Tax Management India. Com
                        Law and Practice: A Digital eBook ...

Category of Documents

TMI - Tax Management India. Com
Case Laws Acts Notifications Circulars Classification Forms Manuals SMS News Articles
Highlights
D. Forum
What's New

Share:      

        Home        
 

TMI Blog

Home List
← Previous Next →

2018 (4) TMI 788

es of the BSG and not in the premises of the assessee. AO himself has held that the seized material AIBSG/01 and AIBSG/02 did not belong to the assessee but rather belongs to BSG. Having held that the said seized material belonged to BSG, AO at a later date issued the requisite notice and completed the assessment in his case making substantial additions, largely relying on the same seized material - Unless the material belongs to the assessee, the same cannot be used or held against the assessee in proceedings under Section 153A or 153C of the Act. Thus the additions made by the Assessing Officer based on seized material AIBSG/01 is unsustainable for this reason. - As the seized material AIBSG/01 as per the panchanama contained 72 total pages and 72 written pages whereas the copies supplied to the assessee contained 90 written pages - reply of Revenue is that all the seized material are properly numbered, serialized, are genuine and that the objection put forth by the assessee is hyper technical in nature. If the copies of the seized documents supplied are in excess of the actual documents seized, as seemed to be suggested by the assessee, the assessee could easily point out th .....

X X X X X X X

Full Text of the Document

X X X X X X X

similar and therefore these appeals were heard together and are disposed off by way of this consolidated order for the sake of convenience. 2. Briefly stated, the facts of the case are as under :- 2.1 The assessee (hereinafter referred to as KMIORE ) is a company engaged in the business of iron ore mining. A search and seizure action under Section 132 of the Income Tax Act, 1961 (in short 'the Act') was conducted in the case of the assessee on 28.09.2010 in pursuance of warrant of authorization dt.27.9.2010. Notices under Section 153A of the Act dt.23.3.2011 were issued to the assessee for Assessment Years 2008-09 to 2011-12 and in response thereto, the assessee filed the returns of income for these years on 2.4.2012. The assessments were concluded under Section 143(3) r.w.s. 153A of the Act vide order dt.14.3.2013. The details of income returned, additions made and income assessed for Assessment Years 2008-09 to 2011-12 are as under : Asst. Year Income declared u/s.153A (Rs.) Total Additions Accrued Income (Rs.) Unaccounted cash receipts (Rs.) Wrong Claim of expenditure (Rs.) 2008-09 1,68,45,707 8,35,91,047 NIL 9,54,36,754 2009-10 15,28,58,320 17,79,43,250 1,85,00,000 34, .....

X X X X X X X

Full Text of the Document

X X X X X X X

ow erred in placing reliance on the statements given by Mr.Kartikeya M Ghorpade and Mrs.Ambika Ghorpade at the time of search which was explained through their subsequent correspondence. 15. Without prejudice, the authorities below erred in relying on the material A/BSG/01 & A/BSG/02 without clarifying the questions raised on the said seized material. 16. The authorities below erred in relying on statements recorded from Mr. Bharat S Ghorpade, Mr. Dinesh Kumar Singhi, Mr.Kartikeya M Ghorpade, Mr. K.V. Balan and Mr. Antony Balraj. 17. The authorities below erred in relying on statements supra in Ground No.16 without providing opportunity to cross examine. 18. That the approval granted u/s153D is not as per law. 19. The appellant denies the liabilities of interest u/s 234B & 234C of the Act. Further prays that the interest if any should be levied only on returned income. 20. No opportunity has been given before levy of interest u/s 234B and 234C of the Act. Without prejudice to the appellant s right of seeking waiver before appropriate authority, the appellant begs for consequential relief in the levy of interest u/s 234B and 234C of the Act. 21. For the above and other groun .....

X X X X X X X

Full Text of the Document

X X X X X X X

S (Series) AIDKS/1 and the statements recorded from Sri Bharat S Ghorpade (in short BSG ), Kartikeya M Ghorpade (in short KMG ), Ambika K Ghorpade (in short AKG ) and Dinesh Kumar Singhi (in short DKS ). On an analysis of the above referred seized material, the Assessing Officer made the following additions : Asst. Year Total unaccounted cash sales Receipts (Rs.) Undisclosed income of KMIORE (Rs.) Undisclosed income of AKG (Rs.) 2008-09 16,71,82,094 8,35,91,047 8,35,91,047 2009-10 19,06,35,900 17,79,43,250 1,26,92,650 2010-11 15,27,27,045 8,70,54,416 6,56,72,629 2011-12 12,95,46,334 9,58,64,287 3,36,82,047 Total : 64,00,91,373 44,44,53,000 19,56,38,373 5.2 The Assessing Officer s case, based on an appraisal of the seized documents, is that it has transpired that the assessee along with Smt. Ambika Ghorpade had extracted iron ore both with and without permit and had received substantial sums both in cheque as well as in cash. While the amounts received by cheque have been duly recorded in the books of account, the cash components received have not been reflected in the books of account. The addition in the table above (at para 5.1 of this order) represents the alleged cash received .....

X X X X X X X

Full Text of the Document

X X X X X X X

ikeyas Manganese and Iron Ores Private Limited at Kartikeya Niwas, Krutika Farm Sandur. The premises at Gaurihara, Gandhi Colony, Hospet, was also searched purportedly u/s 132 of the Act and certain materials were seized. The said premise does not belong to the assessee but belongs to Mr. S.Y. Ghorpade. The warrant of authorization in this search was also not shown to the assessee or its representatives. It was shown to one Mr. S.Y.Ghorpade to whom the said premises belonged to. The seizure of documents marked A/BSG/01 and A/BSG/02 were made in the hands of S.Y. Ghorpade and Bharath S Ghorpade. The said material did not belong to the assessee. During the course of search at Bangalore premises at Mantri Elite, C-1102, Bannerghatta Road, Bangalore, a statement was recorded from Mr. Karthikeya M Ghorpade in the wee hours of the day. The assessee had lot of apprehensions about the legality and the manner in which statement was recorded and immediately filed a letter before the DDIT (Inv) seeking amendment to the statement recorded (PB page 1 to 3). Inspite of the said request, the DDIT (Inv) refused to give a copy of statement recorded to enable the assessee to confirm the veracity of .....

X X X X X X X

Full Text of the Document

X X X X X X X

assessee and the entries are totally in variance with the books maintained. Not even the rudimentary evidence that the assessee has received cash in excess of what is recorded in the books has been led by the AO. The detailed explanation given by the assessee has been ignored. Thus the addition is based on wholly inconsistent and unsustainable conclusions. There is neither any asset commensurate to the alleged cash receipts nor is actual cash available with the assessee. In the absence of any such asset or valuable, it would be wholly inconsistent to make the above additions. In this regard, the assessee relies on the decision in Nirmal Fashions (P) Ltd vs DCIT - 123 TTJ 180 - Kolkata ITAT (CLPB page 306/317) wherein the tribunal has held as under: … As per the presumption of the AO, the assessee is carrying on the business of purchase and sale of saree outside the books on large scale which has resulted in the huge income which is not recorded in the assessee s books of account every year. However, during the course of search of the assessee s premises, no unrecorded stock, cash or other assets were found. The Revenue has searched the business premises of the firm/company a .....

X X X X X X X

Full Text of the Document

X X X X X X X

. In our view, if assessment is allowed to be reopened on the basis of search, in which no incriminating material had been found, and merely on the basis of further investigating the books of accounts which had been already submitted by the assessee and accepted by the Assessing officer at the time of regular assessment, the same would amount to the Revenue getting a second opportunity to reopen the concluded assessment which is not permissible under the law. Thus, non adherence to the provisions of section 145(3) of the Act, renders the additions unsustainable. Based solely on the seized material A/BSG/01 & A/BSG/02 the income in the form of alleged cash sales has been calculated at page 53 of the assessment order extracted as under: Total cash receipts as per seized materials From the above discussion, it is clear that M/s. KMIORE and M/s. AKG have received total cash of ₹ 64,00,91,473/- as evidenced by the seized material. The amount received by M/s. KMIORE and M/s. AKG are purely their profits out of which these concerns might be incurring certain expenses on payment of royalty, administrative expenses etc. All the legal and statutory expenses are met out of accounted .....

X X X X X X X

Full Text of the Document

X X X X X X X

B page 436/446), 3) P.Srinivas Naik vs ACIT - 114 TTJ 856 - ITAT Bangalore (CLPB page 133/136) 4) PCIT vs Vinita Chaurasia - 394 ITR 758 - DEL HC (CLPB page 80/91) Since the department itself has held the material belongs to Bharat S Ghorpade no addition could be made in the hands of the assessee. Secondly the seized material A/BSG/01 & A/BSG/02 seized is mentioned in panchanama issued to SY Ghorpade/Bharat S Ghorpade at PB page 218. The extract of the portion of panchanama is as under : Sl No Description Total pages Written pages 1 Folder containing loose sheets 72 72 2 Folder containing loose sheets 150 150 When the assessee sought copies of the seized material it was provided by the department and the same has been filed before the Hon ble ITAT. The assesseee immediately took objection of the contents and denied any cash transaction contemporaneously vide letter dt. 26.10.2010 & 22.11.2010 (PB page 1 & 2) and also requested for authentication of the seized material. The department has not authenticated the seized material till date. There are gaping issues on the veracity of the seized material provided as the A/BSG/01 & A/BSG/02 to the assessee. While the number .....

X X X X X X X

Full Text of the Document

X X X X X X X

he case of Ambika Ghorpade at C-1102, Mantri Elite Apartments, Bannerghatta Road, Bangalore (page 422 PB). The search commenced on 28.09.2010 at 9.30am and the proceedings closed on 29.09.2010 at 8.45am. During the search proceedings the statement on oath of Kartikeya M Ghorpade (husband of Ambika Ghorpade and Managing Director of KMIORE) was recorded on oath questioning him on certain pages of the seized material marked as A/BSG/01 & A/BSG/02 (page 408PB). The statement u/s 132(4) was also recorded of Ambika Ghorpade at the same time during the search proceedings questioning her on certain pages of the seized material marked as A/BSG/02 (page 420 PB). In view of the above factual position, it is incorrect to say that the seized material shown to Kartikeya M Ghorpade/Ambika Ghorpade while recording statement is the same seized material which was seized in the case of Bharat S Ghorpade at his father SY Ghorpade residence as the said seized material was still in Hospet on 29.09.2010 till 7.45am. Since the statements were taken from Kartikeya M Ghorpade and Ambika Ghorpade in the wee hours of the day and there being no clarity on the basis on which the statements were recorded, th .....

X X X X X X X

Full Text of the Document

X X X X X X X

both cheque and cash. The above indicates that the alleged seized material A/BSG/01 & A/BSG/02 were at Hospet which is about 500kms from Bangalore. The access to Hospet is by rail and road and there is no airport. The statement of Kartikeya M Ghorpade in question no. 7 & 13 (PB page 412) extracted hereunder: Q.No.7: I am showing you pages 71,72,109,115,118,125,129,135 and 147 of the seized material marked as A/BSG/02 seized from the residence of Mr. Bharat Ghorpade at Gandhi Colony, Hospet during the course of search u/s 132(1) on 28/9/2010. Please go through the pages and explain the contents of the same. Also please state who has written these pages. Q.No.13: I am showing you page No.34 of the seized material marked as A/BSG/01 seized from the residence of Mr. Bharat Ghorpade at Gandhi Colony, Hospet during the course of search u/s 132(1) on 28/9/2010. Please go through the page and explain the contents of the same. Also please state who has written these page. and statement of Ambika Ghorpade in question no.3 (PB page 421) extracted hereunder: Q.No.3: I am showing you pages 71,72,109,115,118,125,129,135 and 147 of the seized material marked as A/BSG/02 seized from the re .....

X X X X X X X

Full Text of the Document

X X X X X X X

nd the books of accounts (PB page 456 to 470) clearly indicating that the transaction through the bank accounts of the assessee does not tally with that of the seized material, thus rendering the only argument of the AO also incorrect. The seized material A/BSG/01 & A/BSG/02 are a bunch of loose sheets with semi legible scribblings is not a regular books of accounts and not even kaccha books of accounts. It has lot of overlapping information and not continuous. It does not even mention the individual transactions but mentions certain aggregate of transactions in somewhat non descriptive code words. Several conflicting interpretations are possible and no uniform conclusion can be drawn. It is in this context that the Hon ble Supreme Court has held in Common Cause (A Registered Society) & Others vs. Union of India & Others - 98 CCH 28 (CLPB page 279, para 17 pg 284, para 20 &21 page 285, para 24 page 286) that no liability can be fastened on the basis of loose sheets as per section 34 of the Evidence Act. The supreme court also refers to the view of the Income Tax Settlement Commission and upholds the same that loose sheets are not evidence because it is neither books .....

X X X X X X X

Full Text of the Document

X X X X X X X

ddition cannot be made on estimate basis, guess work and suspicion: Dhakeswari Cotton Mills Ltd vs CIT - 26 ITR 775 - SC (CLPB page 155/156) A.S.Sivan Pillai vs CIT - 34 ITR 328 - Madras HC(CLPB page 162/163) On the issue that admission is not conclusive and has no evidentiary value: Pullangode Rubber Produce Co Ltd vs. State of Kerala & Anr - 91 ITR 18 - Supreme Court (CLPB page 189/190) CIT vs. S.Khader Khan Son - 352 ITR 480 - SC (CLPB page 336) CBDT Instruction No.F.No.286/2/2003/IT(Inv) - confession of additional income during the course of search & seizure and survey operation (CLPB page 167) On the issue that loose sheets have no evidentiary value/no corroborative material: Common Cause (A Registered Society) & Others vs. Union of India & Others - 98 CCH 28 - SC CIT vs. Shri Praveen Juneja - ITA 57/2017 - Delhi HC Nishant Construction Pvt Ltd vs ACIT - ITA 1502/Ahd/2015 - AHD ITA Nirmal Fashions (P) Ltd vs DCIT - 123 TTJ 180 - Kolkata ITAT. On the issue that statement taken in the wee hours cannot be relied: Sahil Study Circle Pvt Ltd vs DCIT - 179 TTJ 1 - Delhi ITAT On the issue of approval granted u/s 153D, it is the contention of the assessee that the appr .....

X X X X X X X

Full Text of the Document

X X X X X X X

ative of the assessee. v. One more show cause notice dated 9/1/2013 was issued by incorporating the relevant pages of the seized material and the statements of Sri Kartikeya Ghorpade Managing Director of the assessee company (page 19 to 21 of the assessment order). The assessee filed reply on 6/2/2013 (page 21 to 24 of assessment order). vi. All the issues on point wise were considered and finding was recorded by the Assessing Officer as under: - a. with respect to objection stating statement does not indicate any payment of cash or activity outside books. Assessee attention was invited to statement dated 19/7/2010 to Q.No.8 of Mr Dinesh Kumar Singhi accepting payment of ₹ 1.40 crores in cash and the remaining amount of ₹ 27,03,33,112/- in cheque. b. Assessee s objection regarding not indulged in sale outside the books of accounts and no supply has been made to JSW and KFIL, attention of the assessee was invited to the seized material found and seized from the premises of Mr Bharat S Ghorpade and confirmed by Mr Dinesh Kumar Singhi, Mr Kartikeya Ghorpade and also Mrs Ambika Ghorpade. c. Assessee objection with respect to statements of Mr Dinesh Singhi, Mr Bharat S Ghorp .....

X X X X X X X

Full Text of the Document

X X X X X X X

tal iron ore sold during these months was 127006.97 MT at the rate of ₹ 750 per MT for total sale value of ₹ 9,52,55,227. Out of this, the amounts covered in the invoice was ₹ 6,64,55,424/- adjusted to the permitted quantity of iron ore measuring 52442.780 MT. The remaining sale consideration of ₹ 2,87,99,803/- is written as cash for the month of August and September 2009 out of which a sum of ₹ 37,99,803/- is written to have been received and the balance of ₹ 2,50,00,000/- yet to be received. A sum of ₹ 1,50,00,000/- being cash component for the month of August 2009 has been considered in the about table. The remaining amount of ₹ 1,37,99,803/- needs to be taxed as unaccounted and undisclosed income in the hands of the assessee and Mrs Ambika Ghorpade proportionately. f. Similarly the cash receipts for period of April 2008 to March 2009, cash payments are tabulated at page 39 of the assessment order. Total amount received in cash is ₹ 19,06,35,900/- for the above period and the same has been admitted by Mr Bharat S Ghorpade from Mr Dinesh Kumar Singhi of M/s. Bharat Mines and Minerals. Relevant portion of statement is extracted .....

X X X X X X X

Full Text of the Document

X X X X X X X

ts on sale of iron ore during February 2008 to August 2008 and not being accounted in the books of accounts of the assessee for relevant period. (Statement extracted at page 44 to 48 of the assessment order). The above cash receipts have been admitted by Mr Kartikeya Ghorpade on sale of iron ore during the period on confrontation of the seized material, and the same has been admitted to be undisclosed income. (Relevant Statement of Mr Kartikeya Ghorpade extracted at page 49 to 50 of assessment order). j. The cheque component received on sale of iron ore by the assessee and Shri Ambika K Ghorpade mentioned in the seized material tallied with the books of accounts with minor differences which would have crept in due to rounding off of the rates or due to carry forward of the previous month sales to the following months or addition of arrears of royalty etc and fits to the modus of accounting and billing as discussed above. The month wise sale as found in the seized material is tabulated at page 51 to 52 of the assessment order. From the tabulation it is clear that Bill prepared at the end of month for the cheque portion of the consideration received, consideration received by cheque .....

X X X X X X X

Full Text of the Document

X X X X X X X

d the content s to be correct. Another party to the contract Mr Dinesh Kumar Singhi has further admitted the contents to be true. Mr Kartikeya Ghorpade Managing Director of the assessee company has accepted the contention of the seized material to be correct and true. In such circumstances the contention of the assessee is an afterthought and without any basis. b. The contention of the assessee that objection filed has been summarily dismissed without meaningful going through the same is incorrect on the face of it. Each and every objection has been dealt by the Assessing Officer point wise. The Assessing Officer has explained each and every page of the seized material and the relevance of the same with support of the statements of the above referred persons. c. The further contention that the material in the form of A/BSG/01 and A/BSG/02 does not belong to the assessee is an afterthought when the person in charge of the business of the assessee and the Managing Director have admitted the same, the above submission is only for the sake of argument without any substance. d. In view of the assessments being pending under section 153A of the Act, the contention of the assessee that as .....

X X X X X X X

Full Text of the Document

X X X X X X X

anted strictly in conformity with the provisions of the Act. Wherefore it is respectfully prayed to dismiss the appeal filed by the assessee. 6. ANALYSIS & CONCLUSIONS. 6.1.1 We have heard the rival contentions, perused and carefully considered the submissions put forth, the orders of the authorities below and the others material on record, including references to the relevant seized material in AIBSG/01, AIBSG/02, A/KMIORES (Series), AIDKS-1 and the statements of Bharat S Ghorpade, Kartikeya M Ghorpade,Ambika Ghorpade and Dinesh Kumar Singhi. 6.1.2 The issues that require consideration can be summed up as under :- 1) Whether seized material AIBSG/01 and AIBSG/02 can be relied on for framing the assessments in the hands of the assessee M/s. KMIORE, Ambika Ghorpade, M/s. BMM Ispat Limited and M/s. Bharat Mines and Minerals. 2) Veracity of relying on the statements of Bharat S Ghorpade, Kartikeya M Ghorpade, Ambika Ghorpade and Dinesh Kumar Singhi. 3) The reliability of seized material in A/KMIORES (series) 4) Whether such addition is sustainable in the absence of commensurate undisclosed cash or valuables or assets or unexplained expenditure. 5) Whether there is enough corrobora .....

X X X X X X X

Full Text of the Document

X X X X X X X

dicial pronouncements :- 1) Vijaybhai N. Chandrani vs. ACIT - (333 ITR 436) - Guj HC 2) Hon ble Bangalore ITAT in Senate vs. DCIT - (181 TTJ 562) 3) P.Srinivas Naik vs ACIT - 114 TTJ 856 - ITAT Bangalore. 4) PCIT vs Vinita Chaurasia - (394 ITR 758) - DEL HC. 7.2 Per contra, the Ld. Standing Counsel for Revenue objected to the assessee's submissions, as in para 4(c) and 4(d) of the written submissions which are extracted as under :- 4. (c) The further contention that the material in the form of A/BSG/01 and A/BSG/02 does not belong to the assessee is an afterthought when the person in charge of the business of the assessee and the Managing Director have admitted the same, the above submission is only for the sake of argument without any substance. 4. (d) In view of the assessments being pending under section 153A of the Act, the contention of the assessee that assessment under section 153C of the Act has to be done in respect of the material found and seized from Mr Bharat S Ghorpade is incorrect and the Act does not provide for dual assessments one under section 153A and another under section 153C of the Act. Reliance is placed on the judgement of the High Court in the case of .....

X X X X X X X

Full Text of the Document

X X X X X X X

overcome the admission made on oath. The entire set of seized material has been placed before this Hon ble Tribunal and the authenticity can be examined. Each and every page of the document has been authenticated by Mr Bharat S Ghorpade by affising signature and date, from whose possession the same has been seized. In such a situation, the assessee is not correct in questioning the authenticity of the seized material that too in a situation where majority of the entries tallied with the books of accounts maintained by the assessee. 8.3 The objection of the assessee is that the copies of seized documents are in excess of the number mentioned as seized in the Panchanama. The reply of Revenue is that all the seized material are properly numbered, serialized, are genuine and that the objection put forth by the assessee is hyper technical in nature. If the copies of the seized documents supplied are in excess of the actual documents seized, as seemed to be suggested by the assessee, the assessee could easily point out the documents that don t belong to it. This has not been done. It could be merely a case of wrong mention of numbers in the Panchanama. As long as the assessee has not poi .....

X X X X X X X

Full Text of the Document

X X X X X X X

Ghorpade at his father SY Ghorpade residence as the said seized material was still in Hospet on 29.09.2010 till 7.45am. Since the statements were taken from Kartikeya M Ghorpade and Ambika Ghorpade in the wee hours of the day and there being no clarity on the basis on which the statements were recorded, the assessee represented by its Directors (Kartikeya M Ghorpade and Ambika Ghorpade) wrote to the Investigation wing seeking copies of seized material based on which their statements were recorded (page 1 & 2 PB). Till date the said copies have not been made available to the assessee neither an opportunity to rectify the statements has been given. Assessee s submissions regarding the same before the AO are found in page 90 to 92 relevant page 92 ;pages 115 to 122 PB, relevant page 117 PB. 9.1.2 The essential contention of the assessee in this objection is that the additions have been made in the assessee's hands based on certain statements recorded from Kartikeya M Ghorpade and Ambika Ghorpade, wherein these two persons have reportedly admitted to earning of undisclosed income, after they were confronted with the documents in question. It is the assessee's contention th .....

X X X X X X X

Full Text of the Document

X X X X X X X

de. Mere reliance on a statement recorded in the wee hours of the day in the course of search action without any further efforts to bring in corroborative evidence and afford opportunities to the assessee and to the deponents also to explain or rebut or correct the statements is inappropriate. On an appraisal of the record before us, in our view, the Assessing Officer has faultered in not following the rule of law and the procedures prescribed in this regard by judicial pronouncements. In this context, the reliance placed on the follwoing is appropriate :- (i) Pullangode Rubber Produce Co. Ltd. Vs. State of Kerala & Another (91 ITR 18) (SC) (Paper Book pages 189 & 190) wherein the Hon'ble Court observed that - An admission is an extremely important piece of evidence but it cannot be said that it is conclusive. It is open to the person who made the admission to show that it is incorrect. (ii) CBDT Instruction No.F.No.286/2/2003/IT(Inv) dt.10.3.2003 (Page 167) - on confessions of additional income during the course of search and seizure and survey operations. (iii) Sahil Study Circle Pvt. Ltd. Vs. DCIT (179 TTJ 1) (Delhi ITAT) (Paper Book pages 337 & 338) wherein it w .....

X X X X X X X

Full Text of the Document

X X X X X X X

een rendered academic and we therefore refrain from making any observation and adjudication on this issue. 10.3.1 Similar arguments / contentions as above have been put forth by both parties for Assessment Years 2009-10 to 2011-12 in respect of appeals in ITA Nos.833 to 835/Bang/2015 since the issues and facts are similar. Both parties have basically relied on the submissions made in Assessment Year 2008-09, for these Assessment Years 2009-10 to 2011- 12, which have been heard and considered at length by us. 10.3.2 We have considered the rival submissions and perused and carefully considered the material on record and the judicial pronouncements cited. We find that the facts and issues before us, in the case on hand for Assessment Years 2009-10 to 2011-12 are similar to those in the appeal for Assessment Year 2008-09. Since we have decided the issue in the assessee's appeal in ITA No.832/Bang/2015 for Assessment Year 2008-09 in favour of the assessee, the impugned issues in the appeals in ITA Nos.833 to 835/Bang/2015 for Assessment Year 2009-10 to 2011-12 are also held and allowed in favour of the assessee and therefore the additions of ₹ 17,79,43,250 for Assessment Year .....

X X X X X X X

Full Text of the Document

X X X X X X X

ent submitted that the Department s case is discussed at pages 54 to 65 of the order of assessment for Assessment Year 2008-09. Revenue has further sought to buttress its arguments in written submissions in para 2(vii),(m) and (n) which are as under :- (a) Bogus expenses:-The entire operations of the mines owned by the assessee are being carried out by Bharat Mines and Minerals as such the assessee has no expenses to be incurred except administrative in miscellaneous expenses. In the course of search at residence of Mr Bharat Ghorpade and office premises of the assessee setting bills pertaining to the contract works were found and seized and the same is placed at page 55 of the assessment order reflecting adjustment bills in the name of the employees of the company. (b) Similar entries were found for the Assessment Year 2010-11 in the notebook maintained by the assessee and same is scanned at page 57 of the assessment order reflecting generation of bills in the names of spouses of the employees by the assessee. The statement of employees (accountant) is extracted at page 59 and 60 admitting the contractors are either the employees of the company or the spouses or relatives. Further .....

X X X X X X X

Full Text of the Document

X X X X X X X

ot be used against the assessee by the Assessing Officer. Further, opportunity for cross-examination of Sri K.V. Balan and Sri Antony Balaraj has also not been provided to the assessee by the Assessing Officer. In such cases, no addition can be made as has been held by the Hon'ble Delhi High Court in the case of CIT Vs. SMC Share Brokers Ltd. (288 ITR 345) as under : In the absence of the third party, being made available for cross-examination despite repeated requests by the assessee, his statement could not be relied upon to the detriment of the assessee and the Tribunal was justified in setting aside the block assessment. 11.4.3 The above decision of the Hon'ble Delhi High Court has been relied upon by the co-ordinate bench of this Tribunal in the case of M/s. Obulapuram Mining Company Pvt. Ltd. Vs. DCIT in ITA No.653/Bang/2015 dt.29.7.2016, wherein the co-ordinate bench has held that disallowances made on the basis of statements of persons not being made available for cross-examination cannot be used against the assessee and hence such disallowances are not sustainable. Even otherwise, we have already held in the pre-paragraphs of this order (supra) that seized material .....

X X X X X X X

Full Text of the Document

X X X X X X X

 

 

← Previous Next →

 

 

|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || Database || Members || Refer Us ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.
|| Blog || Site Map - Recent || Site Map ||