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2019 (4) TMI 623

would begin from the recording of satisfaction by the A.O. that certain income has escaped assessment pertaining to a particular assessment year. Admittedly, the assessee has not challenged the validity of notice u/s 148. The assessee was duly supplied satisfaction recorded u/s 153C of the Act. The assessee considered it as a satisfaction recorded u/s 148 of the Act and filed return in response thereto. This fact is not controverted by the assessee. - It is also a fact that the manner in which the satisfaction u/s 147 is required to be recorded is not prescribed under the law. Therefore, considering the totality of the facts and under the peculiarity of the facts of the present case, in our considered view section 292B comes to rescue of the Assessing Officer. Hence, the grounds of the assessee’s appeal is hereby dismissed. - Addition based on diary of third party - addition without confronting the same with the assessee and giving opportunity of cross examination - HELD THAT:- There is no dispute with regard to the fact that the addition has been made on the basis of the statement of employee of one Shri Nilesh Ajmera recorded in relation to the certain transaction recorde .....

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fter, the A.O. proceeded to frame assessment, thereby the A.O. made an addition of ₹ 4 lakhs. The basis of addition by the A.O. was that Shri Nilesh Ajmera had borrowed money in cash from the assessee. The A.O. made addition u/s 69D of the Act. Aggrieved by this, the assessee preferred an appeal before Ld. CIT(A) taking various grounds. However, the Ld. CIT(A) sustained the finding of the A.O. Aggrieved by this, the assessee is in appeal before this Tribunal. 3. At the outset, Ld. Counsel for the assessee submitted that the assessment so framed is ex-facie bad in law. He contended that the A.O. proceeded to initiate proceedings u/s 153 of the Act. Thereafter, without recording satisfaction u/s 148 of the Act proceeded to reopen the assessment and framed assessment u/s 143(3) r.w.s. 147 of the Act. He contended that the satisfaction recorded u/s 153 of the Act cannot be super imposed as the satisfaction recorded u/s 148 of the Act. He contended that the aforesaid provision operate in two different fields. He submitted that the issue goes to the root of the exercising jurisdiction by the assessing authority. In support of these averments, Ld. Counsel drew our attention at the p .....

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issued u/s 148 of the Act would not be valid. In the present case, the satisfaction is recorded by the A.O. reads as under: 1. During the course of assessment proceeding in the case of Shri Nilesh Ajmera director/Shareholder of M/s. Phoenix Devcons Pvt. Ltd., Indore for the assessment year 2008-09, it is found that the assessee has borrowed money on hundi from one Shri Sunil Golecha, Further, statement of Shri Pankaj Joshi, employee of Shri Nilesh Ajmera (one of the main assessee covered in the satellite group) recorded on oath on 21.11.2011, it has been established that Shri Nilesh Ajmera had borrowed money in hundi in cash from Shri Sushil Golecha of Barngar and as per their record this amount is ₹ 12,50,000/- in A.Y. 2008-09, ₹ 48,00,000/- in A.Y. 2009-10 and ₹ 4,00,000/- in A.Y. 2010-11. 2. Analysis of seized documents reflect that at page 165 of LPS A/23 contains the details of Hundi amount received, period, interest rate along with Dalali. Further, page 164 give details of post dated scrutiny cheques issued by the assessee, the hundi dealer Shri Sushil Golecha against the respective hundi borrowing as scrutiny cheques. To substantiate further, the reply of .....

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page 56, 82, 120 & 128), copies of which were received through Hon'ble CIT, Ujjain on 1.4.2012. I have verified the facts from the ITRS furnished by the assessee. I am satisfied that for the aforesaid reasons as discussed above further action under section 153C is attracted for assessment of his total income in accordance with law. 7. There is no doubt that the above satisfaction note by the A.O. relates to initiation of proceedings u/s 153C of the Act. It nowhere states that any income chargeable to tax has escaped assessment. Thus, the satisfaction is not in accordance with the provisions of section 147 of the Act. Now the question arises whether this lapse can be ignored in view of the section 292B of the Act? Section 292B of the Act reads as under: [Return of income, etc., not to be invalid on certain grounds. Section 292B. No return of income, assessment, notice, summons or other proceedings, or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such return of income, assessment, notice, summons or other proceeding if such return of income, as .....

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below. There is no dispute with regard to the fact that the addition has been made on the basis of the statement of employee of one Shri Nilesh Ajmera recorded in relation to the certain transaction recorded in the diary of Shri Nilesh Ajmera. The assessee was not confronted with the employee of Shri Nilesh Ajmera nor any cross examination of Nilesh Ajmera or his employee was given to the assessee. The addition is based on a diary of a third party. Hon'ble Jurisdictional High Court in the case of PCIT-1 Vs. Pukhraj Soni (supra) after considering the various judgements of the Hon'ble apex court has held as under: 7. The Apex court has taken into account in similar circumstances the incriminating materials in form of random sheets, loose papers, computer prints, hard disk and pen drive etc. and has held that they are inadmissible in evidence, as they are in the form of loose papers. 8. In the present case also entries found during search and seizure which are on loose papers are being made the basis to add income of this respondent. 9. Resultantly, in light of the Supreme Court judgements, referred above, no case for interference is made out with the order passed by the Tribu .....

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