Dr. Gulshan Kumar, Bellary V. DCIT, Bellary

ITSSA 2/BANG/2008

• Counselvise Citation: [2010] 124 COUNSELVISE.COM (IT) 9510 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 23 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 16-02-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 27-01-2010
• Assessment Year: misc
• Appeal Filed On: 24-01-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JASON P BOAZ
• Assessee Lawyers: S VENKATESAN
• Keywords: Block assessment

Judgement Text

IT(SS)A.2/B/08 & 34/B/06 PAGE - 1 IN THE INCOME-TAX APPELLATE TRIBUNAL BANGALORE BENCH 'A' BEFORE SHRI. K. P. T. THANGAL, VICE PRESIDENT AND SHRI. A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER 1. I.T(SS)A.NO.2/BANG/2008 (BLOCK ASSESSMENT : 1986-87 TO 19 96-97) 2. I.T(SS)A.NO.34/BANG/2006 (BLOCK ASSESSMENT : 1986-87 TO 19 96-97) 1. LATE P. J. KUMAR, L/R.SHRI. AJAY PURI, L/R.SMT. MADHU PURI, D/O. P. J. KUMAR, PROP. M/S. SAINIK SALES CORPORATI ON, BANGALORE ROAD, BELLARY 2. DR. L. GULSHAN KUMAR, M/S. SAINIK ENTERPRISES, BANGALORE ROAD, BELLARY .. APPELLANTS V. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE -1, BELLARY .. RESPONDENT APPELLANTS BY : SHRI. S. VENKATESAN RESPONDENT BY : SHRI. JASON P. BOAZ O R D E R PER K. P. T. THANGAL, VICE PRESIDENT : THESE APPEALS ARE BY THE ASSESSEES BELONGING TO A GROUP. SINCE COMMON ISSUES ARE INVOLVED IN THESE APPEALS, THEY A RE CLUBBED IT(SS)A.2/B/08 & 34/B/06 PAGE - 2 TOGETHER AND A CONSOLIDATED ORDER IS PASSED FOR THE SAKE OF CONVENIENCE. 2. THE ASSESSEE IN IT(SS)A.34/BANG/2006, LATE P. J. KUMAR, WAS A PROPRIETOR OF SAINIK SALES CORPORATION, BELLARY ENG AGED IN THE TRADE OF EDIBLE OIL AND VANASPATI. THERE WAS A SEARCH AN D SEIZURE ACTION ON 7.12.1995 AT THE RESIDENCE OF THE ASSESSEE. SUBSEQ UENTLY ASSESSMENT WAS COMPLETED U/S.158BC(C) OF THE ACT ON 31.1.1997. ON THE SAME THE ASSESSEE APPEALED BEFORE THE TRIBUNAL. THE MAT TER WAS REMANDED BACK TO THE FILE OF THE ASSESSING OFFICER BY THE TR IBUNAL, TO REDO THE ASSESSMENT. THE ORDER U/S.143(3) R.W.S.158 BC(C) A ND 254 WAS PASSED ON 17.3.2006. THE ASSESSEE IS IN APPEAL BEF ORE THE TRIBUNAL. 3. THE ASSESSEE IS OBJECTING THE ASSESSMENT FIRSTLY ON THE JURISDICTION POINT. ACCORDING TO THE ASSESSEE, THE CONDITIONS SPECIFIED U/S.132(1)(A) AND (B) DID NOT EXIST AND SO FAR AS T HE CONDITION U/S.132(1)(C) WAS CONCERNED, THERE WAS NO MATERIAL INDICATING THE REASONS TO BELIEVE THAT THE ASSESSEE WAS NOT IN POS SESSION OF ANY MONEY OR ASSET WHICH THE ASSESSEE WOULD NOT HAVE DI SCLOSED FOR THE PURPOSE OF INCOME-TAX TO ENABLE THE AUTHORISING OFF ICER TO ISSUE A WARRANT AND CONSEQUENTLY, THE BLOCK ASSESSMENT REQU IRES TO BE IT(SS)A.2/B/08 & 34/B/06 PAGE - 3 ANNULLED. THE ASSESSEE RELIED ON THE DECISION OF T HE HON'BLE SUPREME COURT IN AJIT JAIN REPORTED IN 260 ITR 80. 4. IN THE CASE OF THE ASSESSEE IN IT(SS)A.2/BANG/2 008 ALSO THERE WAS A SEARCH U/S.132 IN THE CASE OF SAINIK GROUP OF CASES, BELLARY ON 7.12.1995. ASSESSMENT WAS COMPLETED U/S.143(3) R.W .S. 158 BC AND 158BD OF THE ACT ON 29.8.97. IN APPEAL THE MATTER WAS REMANDED BACK TO THE FILE OF THE ASSESSING OFFICER BY THE TR IBUNAL, TO REDO THE ASSESSMENT WITH CERTAIN GUIDELINES. THE CASE WAS H EARD ON SEVERAL OCCASIONS AND THE LEARNED DR PRODUCED THE SEARCH WA RRANT WHICH IS IN THE COMMON NAME OF P. J. KUMAR AND HIS WIFE SMT. SA THPAL BEHL TO REBUT THE CONTENTION OF THE ASSESSE THAT THERE WAS ACTUALLY NO SEARCH WARRANT EVEN. THE LEARNED DR ALSO PRODUCED THE PAN CHANAMAS PREPARED. IT WAS ONE OF THE CONTENTIONS TAKEN BY T HE ASSESSEE THAT THE JOINT WARRANT ISSUE CANNOT BE USED TO MAKE INDIVIDU AL ASSESSMENT. THE ASSESSEE ALSO MADE A WRITTEN SUBMISSION WHICH R EADS AS UNDER : '2. BE IT WHAT IT MAY, I HAD SUBMITTED THAT SINCE THE SEARCH WAS ON A JOINT WARRANT AND ALSO THE PANCHANA MA PREPARED ON 7.12.1995 WAS ALSO JOINT, MAKING ASSESS MENT IN THE INDIVIDUAL HANDS OF LATE SRI. P. J. KUMAR IS BA D IN LAW U/S.158BC OF THE ACT. FOR THIS PROPOSITION, I RELI ED UPON THE DECISION OF THE HON'BLE ITAT, LUCKNOW 'B' BENCH IN THE CASE OF GURU CHARAN SINGH IN ITA NOS.172/LUC/2004, 232/LUC/2004 AND 116/LUC/2004, DT.28.8.2008, WHICH IT(SS)A.2/B/08 & 34/B/06 PAGE - 4 INDIDENTALLY, THE HON'BLE VICE PRESIDENT HAS FORMUL ATED THE ORDER FOR THE BENCH FOR THIS LEGAL PROPOSITION. A COPY OF THE SAID ORDER IS ENCLOSED HEREWITH.' THE ASSESSEE'S REPRESENTATIVE ALSO PRODUCED AN ORD ER OF THE ITAT, CHENNAI 'D' BENCH IN THE CASE OF ANJUGA CHIT FUNDS P. LTD., (113 ITD 67) AND ALSO THE DECISION OF THE HON'BLE ALLAHABAD HIGH COURT IN SMT. VANDANA VERMA (31 DTR 214), FOR THE PROPOSITION THA T IT IS NOT OPEN TO THE ASSESSING AUTHORITY TO MAKE INDIVIDUAL ASSES SMENTS , INVOKING THE PROVISIONS OF CHAPTER XIVB ON THE BASIS OF ASSE TS AND DOCUMENTS DURING THE COURSE OF SEARCH CARRIED OUT IN PURSUANC E OF WARRANT OF AUTHORIZATION WHICH WAS ISSUED IN THE JOINT NAMES O F MORE THAN ONE ASSESSEE. THEY CAN ONLY BE ASSESSED JOINTLY AS AN AOP OR A BOI. 5. THE LEARNED DR, ON THE OTHER HAND, STRONGLY RELI ED ON THE DECISION OF THE ASSESSING OFFICER. 6. CONSIDERING THE RIVAL SUBMISSIONS, WE ARE OF THE VIEW THAT IN THE LIGHT OF THE DECISION OF THE ALLAHABAD HIGH COURT C ITED SUPRA IN THE CASE OF VANDANA VERMA, COPY OF WHICH IS PLACED BEFO RE US, THE APPEAL BY THE ASSESSEES ARE TO BE ALLOWED. IN THESE CASES , WARRANT WAS ISSUED IN THE COMMON NAME OF P. J. KUMAR AND HIS WIFE SMT. SATPHAL BEHL AND THE ASSESSMENT IS COMPLETED IN THE INDIVIDUAL N AME AND CAPACITY. IT(SS)A.2/B/08 & 34/B/06 PAGE - 5 RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINA TE BENCH AND THE HON'BLE HIGH COURT (SUPRA), WE ALLOW THE APPEAL BY BOTH THE ASSESSEES. 7. IN THE RESULT, BOTH THE APPEALS BY THE ASSESSEES ARE ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 16TH DAY OF FEBRU ARY, 2010. SD/- SD/- (A. MOHAN ALANKAMONY) (K. P. T. THANGAL) ACCOUNTANT MEMBER VICE PRESIDENT BANGALORE DATED : 16TH FEBRUARY, 2010 MCN* COPY TO: 1. THE ASSESSEE 2. THE ASSESSING OFFICER 3. THE COMMISSIONER OF INCOME-TAX 4. COMMISSIONER OF INCOME-TAX(A) 5. DR 6. GF, ITAT, NEW DELHI 7. GF, ITAT, BANGALORE