TMI Blog2020 (3) TMI 497X X X X Extracts X X X X X X X X Extracts X X X X ..... ged to the Appellant firm - Tribunal justification in surmising that the document found in the partner s premises refers to an entity with 9 shares belonged to the appellant firm which has only 5 partners to justify the impugned addition - demand notice under Section 154 of the Act amending the order of assessment under Section 143(3) read with Section 158BD being not in the name of the appellant - HELD THAT: From the perusal of the statement of G.T.Krishna Murthy, it is evident that he is a partner in M/s Venkateshwara Bottles and he has affirmed that he has a share of 9% out of 105%. From perusal of the statement of aforesaid G.T.Krishna Murthy, it is also evident that when he was confronted with the document seized during the course of search, he admitted that he is not aware as to why the shares are given to Mallikarjuna, H.V.S., Vijay Kumar Shetty and Kareem Sab. The aforesaid witness in his evidence has not stated that there is another partnership firm with nine partners, which deals in same business. From the trial balance sheets of the appellant s firm, it is evident that the aforesaid persons names have been reflected and their percentage of profit has also been shown. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw: (i) Whether the Tribunal was justified in upholding the validity of assessment passed under Section 158BD read with Section 143(3) of the Act in the absence of valid satisfaction recorded by the assessing officer after application of his mind on the materials gathered in the course of search of partner of the appellant firm? (ii) Whether the Tribunal was justified in surmising that the alleged undisclosed income from transaction of used empty bottles belonged to the Appellant firm and whether the finding in this regard was not perverse and unsupported by evidence? (iii)Whether the Tribunal was justified in surmising that the document found in the partner s premises refers to an entity with 9 shares belonged to the appellant firm which has only 5 partners to justify the impugned addition? (iv)When the appellant having complied with the provisions of Section 184 of the Act, can the appellant be assessed in the status of AOP? (v)Whether while computing the undisclosed income, the tribunal was justified in upholding the estimate of undisclosed income in the assessment years fallen within the block period when the actual statement found related only to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing Officer made assessment of the appellant s total income under Section 158BD read with Section 143(3) of the Act for the block period by proportionately determining appellant s income by an order dated 28.02.2005, on the basis of income of G.T.Krishna Murthy. Thereafter, the Assessing Officer issued a notice dated 04.1.2006 under Section 154 of the Act proposing to levy interest under Section 158BFA(i), which was omitted to be charged in the order of assessment. By an order dated 24.01.2006, the Assessing Officer charged interest under Section 158BFA(i) vide order under Section 154 of the Act for the block period in the name of M/s Venkateshwara Bottles. 4. Being aggrieved, the appellant preferred appeals before the Commissioner of Income Tax (Appeals), which were disposed of by orders dated 26.05.2008. Being aggrieved, the revenue filed appeals before the Income Tax Appellate Tribunal (hereinafter referred to as the tribunal for short). The appellate tribunal has allowed the appeal preferred by the revenue. In the aforesaid factual background, this appeal has been filed. 5. Learned counsel for the appellant submitted that warrant was issued against G.T.Krishna Murthy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... profits have been shown. It is also pointed out that in the statement, G.T.Krishna Murthy has not stated that there is anotherpartnership firm, which is carrying on the same business with nine partners. It is also pointed out that the requirement contained in Section 184 of the Act has not been complied with and therefore, the appellant cannot be treated as firm and rightly been treated as Association of persons. 7. We have considered the submissions made by learned counsel for the parties and have perused the record. The Circular dated 31.12.2015 clearly provides that satisfaction note has to be prepared by the Assessing Officer in respect of such other person under Section 158BD of the Act. It has further been clarified that even if Assessing Officer finds that the searched person and the other person is one and the same then also he is required to record his satisfaction. The Assessing Officer in the instant case, has recorded a satisfaction note, which reads as under: BLOCK ASSESSMENT (158 BD) M/s Sri.Venkatesha Bottles Keshavapur Extension Old Town Bhadravathi 10.02.2003 Search under Section 132 was carried out in HED Group of case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perusal of the statement of aforesaid G.T.Krishna Murthy, it is also evident that when he was confronted with the document seized during the course of search, he admitted that he is not aware as to why the shares are given to Mallikarjuna, H.V.S., Vijay Kumar Shetty and Kareem Sab. The aforesaid witness in his evidence has not stated that there is another partnership firm with nine partners, which deals in same business. From the trial balance sheets of the appellant s firm, it is evident that the aforesaid persons names have been reflected and their percentage of profit has also been shown. On the basis of the trial balance sheet seized during the search operation, the tribunal has recorded a finding that names of all nine partners including the five partners of the assessee firm appear therein, which goes to prove beyond any shadow of doubt that assessee firm has been indulging in two types of business in the same line and parallel business was being carried out clandestinely with the active participation of four other persons. The aforesaid finding is a finding of fact which has been recorded by the Income Tax Appellate Tribunal on the basis of meticulous appreciation of materi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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