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2018 (3) TMI 594

course of which the relevant share of the parties’ rights and liabilities have been settled. The business, which had yielded such interest, had to be inevitably apportioned between the two brothers who had parted ways later. Income generated was during the period when both of them were together. Essentially, being factual, the findings are based upon a rationale which is both convincing and reasonable. The Court is of the opinion that there is no error of law with respect to the additions made. - As far as the addition with respect to the unaccounted sum of ₹ 92,16,098/- goes, the Court notices that besides contesting that the assessee’s son was nick named “Golu”, there cannot be any denial that the documents seized clearly revealed the total expenditure that the assessee incurred in respect of both his children. Those were not traceable to the books of account or the returns that he had disclosed earlier. In these circumstances, the addition made was justified. - Decided in favour of the Revenue - ITA 1003/2017, C.M. APPL.41767-41768/2017 & 3505/2018 - Dated:- 12-3-2018 - MR. S. RAVINDRA BHAT AND MR. A.K. CHAWLA JJ. Appellant Through: Sh. Arvind Kumar with Sh. Harshvard .....

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erred by the assessee, the Appellate Commissioner apportioned the undisclosed interest income in the ratio of 40%:60% respectively in the hands of the assessee and the brother - S.K. Gupta. The Appellate Commissioner rested his reasoning, based upon a settlement award made by the Company Law Board in the course of inter se disputes and differences that were the subject matter of litigation before the Board. The Appellate Commissioner also allowed credit for the opening capital. The assessee appealed to the Tribunal. 4. The Tribunal by the impugned order rejected the assessee s contention with respect to the validity of the assessment made in the block period. The assessee had contended that in the absence of any satisfaction recorded in terms of Section 153C(1) of the Act, since the seizures relied upon in the final assessment pertained to him but were made in the course of the proceedings and search of his brother s premises (to which he was a third party), the materials so seized became third party material for which notice was mandatorily required. It was argued, in other words, that in the absence of a notice under Section 153C, the assessment was illegal. This contention was r .....

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p companies and thus it is not possible to allocate the income there from person-wise and company-wise. Therefore, we ate inclined to agree with the findings of the Commissioner of Income Tax (Appeals) that the income should be allocated between Shri. S.K Gupta and Shri V.K. Gupta as they are the key players after the death of Late Shri Suraj Bhan Gupta and they also agreed before the Company Law Board vide order dated 13.1.2009 to divide the assets of the family and group companies in the ratio of 60:40 respectively among them. Hence, we decline to agree with the contention of the assessee that the entire income discernible from the consolidated balance sheets should be assessed in the hands of Late Shri Suraj Bhan Gupta. 22. So far as the alternative prayer of the assessee is concerned that the income should be assessed in the hands of AOP is concerned, we do not find any force in this contention as there was no AOP in existence during the relevant assessment years and it is also not clear as to which AOP the income should be assessed. At this juncture, we again point out that vide Company Law Board order dated I 3.1.2009 both the assessees have agreed to divide the assets of the .....

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Ltd. v. ACIT (370 ITR 295); Commissioner of Income Tax v. RRJ Securities Ltd. (380 ITR 612) and Principal CIT v. Nikki Drugs and Chemicals Pvt. Ltd. (386 ITR 680). 9. Counsel argued that the Tribunal s decision that the assessee and his brother Suresh Kumar Gupta have agreed before the Company Law Board to divide the assets of the family and the group companies in ratio of 40:60, respectively among them could be the basis of the finding that the undisclosed interest income should also be apportioned in the same ratio between them. 10. Mr. Zoheb Hossain, learned counsel for the Revenue urged that in this case there is no dispute that firstly the statement of the assessee was recorded on 30.07.2009. In the course of the statement, the books seized from his premises were confronted to him; he also admitted that a hard disk was seized in the course of the search. The statement of S.K. Gupta too was made available before the final assessment order was framed in the case of the assessee. Based upon the statement as well as the settlement recorded by the Company Law Board on 13.08.2008, it was concluded that the amounts required to be added were to be in the names of the assessee and S.K. .....

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take the matter further, under Section 153C. 13. The assessee s arguments about the correct procedure are, in fact, a matter of law. However, there are certain singular features to this case. The search and seizure was conducted on the same date; even through one authorization. The premises searched were S-511, Greater Kailash Part-II. The warrant, in fact, was issued in the name of S.K. Gupta, Gaurav Gupta, the assessee, Veena Gupta, Vikas Gupta and Ms. Madhu Gupta. The panchnama drawn on 01.08.2009 was signed by both the assessee and S.K. Gupta. The statements of both S.K. Gupta and Vinod Gupta were recorded on the same date, i.e. 31.07.2009. Furthermore, the documents, cash and other books of accounts seized pointed to such circumstances that the Revenue was justified in arguing that a separate notice under Section 153C was unnecessary. These facts are that both the assessees are brothers. Both were involved in the common business and the assessee used to be in-charge of the accounts. Given these, there was no necessity of issuing notice under Section 153C and following the separate but elaborate procedure prescribed therein. 14. The Court is also cognizant of the fact that so f .....

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