Sewa Ram Lakhotia Prop. M/s. Shree Ram Carriers, JODHPUR V. ACIT, JODHPUR

ITSSA 20/JODH/2006

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 9680 (ITAT-JODHPUR)
• Duration Of Justice: 7 year(s) 10 month(s) 27 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 13-12-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 11-12-2013
• Assessment Year: misc
• Appeal Filed On: 17-01-2006
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR DEEPAK SEHGAL
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENC H : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO. 20/JODH/2006 (A.YS. 1997-98 TO 2003-04) SEWA RAM LAKHOTIA VS. THE A.C.I.T. PROP. M/S SHREE RAM CARRIERS, CENTRAL CIRCLE-2 39-A, DHARAM NARAYAN JI KA HATTA, JODHPUR. PAOTA, JODHPUR PAN NO. AATPL4203H (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI MAHAVIR JAIN DEPARTMENT BY : D.R. DEEPAK SEHGAL, D.R. DATE OF HEARING : 11/12/2013. DATE OF PRONOUNCEMENT : 13/12/2013. O R D E R PER N.K.SAINI, A.M THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDE R DATED 08 TH DECEMBER, 2005 OF LD. CIT(A)-II, JODHPUR. IN THIS A PPEAL FOLLOWING GROUNDS HAVE BEEN RAISED:- 1. THAT ON THE FACTS, IN THE CIRCUMSTANCES AND IN VIEW OF THE PROVISIONS OF THE IT ACT, 1961, THE ASSESSMENT ORD ER UNDER APPEAL, IS BAD IN LAW AND DESERVES TO BE CANCELLED . 2 2. THAT REGARDING THE ADDITION OF RS. 10,88,669/-, THE APPELLANT APPEALS THAT IT HAS NOT BEEN MADE/SUSTAINED IN ACC ORDANCE WITH THE PROVISIONS OF THE CHAPTER XIV OF IT ACT, 1961 AND, THEREFORE,THE SAME NEEDS TO BE DELETED. 3. THAT WITHOUT ANY PREJUDICE TO THE AFORESAID GROU NDS OF APPEAL, THE APPELLANT APPEALS THAT EVEN IN VIEW OF THE FACTS A ND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(APPEALS ) DID NOT JUSTIFY IN SUSTAINING THE AFORESAID ADDITION OF RS . 10,88,669/-. THE APPELLANT, THEREFORE, REQUESTS FOR DELETING THIS A DDITION. 4. THAT WITHOUT ANY PREJUDICE TO THE GROUND NO. 1 O F THE APPEAL, THE APPELLANT APPEALS THAT THE ADDITION OF RS. 14,00,0 00/- ON THE ALLEGATION THAT THE BOOKS OF ACCOUNTS OF THE APPEL LANT WERE FOUND INCOMPLETE AT THE TIME OF SEARCH, HAS NOT BEEN MAD E/SUSTAINED IN ACCORDANCE WITH THE PROVISIONS OF THE CHAPTER XIV OF IT ACT, 1961 AND, THEREFORE, THE SAME NEED TO BE DELETED. 5. THAT WITHOUT ANY PREJUDICE TO THE GROUND NOS. 1 AND 4 OF THE APPEAL, THE APPELLANT APPEALS THAT EVEN IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(APPEALS ) DID NOT JUSTIFY IN SUSTAINING THE ADDITION OF RS. 14,00,00 0/-. THE APPELLANT, THEREFORE, REQUESTS FOR DELETING THIS ADDITION. 6. THAT WITHOUT ANY PREJUDICE TO THE GROUND NOS. 1, 4 AND 5 OF THE APPEAL, THE APPELLANT APPEALS THAT EVEN IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(APPEALS ) DID NOT JUSTIFY IN SUSTAINING THE ADDITION OF RS. 36,218/- (RS. 14,00,000/- MINUS RS. 13,63,792/-). THE APPELLANT, THEREFORE, REQUESTS FOR DELETING THE SAME, WHICH IS A PART OF THE ADDITION OF RS. 14,00,000/-. 7. THAT WITHOUT ANY PREJUDICE TO THE GROUND NO. 1 O F THE APPEAL, THE APPELLANT APPEALS THAT EVEN IN VIEW OF THE FACT AN D CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(APPEALS) DID NOT JUST IFY IN SUSTAINING THE ADDITIONS OF RS. 2,050/- AND 1,000/-. THE APPE LLANT REQUEST FOR DELETING THESE ADDITIONS. 3 8. THAT WITHOUT ANY PREJUDICE TO THE GROUND NO. 1 O F THE APPEAL, THE APPELLANT APPEALS THAT EVEN IN VIEW OF THE FACTS A ND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(APPEALS ) DID NOT JUSTIFY IN SUSTAINING THE ADDITION OF RS. 10,000/- . THE APPELLANT REQUESTS FOR DELETING THIS ADDITION. 9. THAT THE APPELLANT APPEALS FOR CONSEQUENTIAL REL IEF FROM THE INTEREST CHARGED U/S 158 BFA(1). 10. THAT THE APPELLANT CRAVES OPPORTUNITY FOR FURNI SHING ANY OTHER GROUND/S OF APPEAL ON OR BEFORE THE DATE OF APPEAL HEARING. 2. THE ASSESSEE ALSO RAISED THE FOLLOWING ADDITIONA L GROUNDS, BY STATING THAT THESE ARE SPECIFIC GROUND FOR GROUND NOS. 1,2, AND 4:- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ASSESSMENT ORDER UNDER APPEAL AS REQUIRED TO BE PAS SED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 158BD WHE REAS THE SAME HAS BEEN PASSED U/S 158BC ONLY AND, THEREFORE, THE SAME IS BAD IN LAW AND DESERVED TO BE CANCELLED. 2. THAT REGARDING THE ADDITION OF RS. 10,88,669/-, THE APPELLANT APPEALS THAT IT HAS NOT BEEN MADE/SUSTAINED IN ACC ORDANCE WITH THE PROVISIONS OF SECTION 158BD OF THE I.T. ACT, 19 61 AND, THEREFORE, THE APPELLANT APPEALS FOR ITS DELETION. 3. THAT REGARDING THE ADDITION OF RS. 14,00,000/-, THE APPELLANT APPEALS THAT IT HAS NOT BEEN MADE/SUSTAINED IN ACCO RDANCE WITH THE PROVISIONS OF SECTION 158BD OF THE I.T. ACT, 19 61 ADDITION, THEREFORE, THE APPELLANT APPEALS FOR ITS DELETION. 3. AT THE FIRST INSTANCE, THE LEARNED COUNSEL FOR THE ASSESSEE ARGUED THE LEGAL ISSUE RAISED VIDE GROUND NO. 1 OF THE ADDITIO NAL GROUND WHICH RELATES TO THE VALIDITY OF THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER. 4 4. FACTS RELATED TO THIS CASE IN BRIEF ARE THAT A S EARCH WAS CONDUCTED AT THE RESIDENTIAL AS WELL AS BUSINESS PREMISES OF LAKHOTI A GROUP OF CASES, TO WHICH THE ASSESSEE BELONGS ON 20/12/2002 AND FINALLY CONC LUDED ON 02/01/2003. DURING THE COURSE OF SEARCH, VARIOUS TYPES OF VALUA BLES SUCH AS CASH, JEWELLERY, FDRS ETC. HAD BEEN FOUND AND SEIZED. THE ASSESSEE FILED THE RETURN OF INCOME ON 12/1/2005 DECLARING AN INCOME O F RS. 4,76,753/-, HOWEVER, THE ASSESSMENT WAS FRAMED BY THE ASSESSING OFFICER AT AN INCOME OF RS. 29,78,472/- BY MAKING THE VARIOUS ADDITIONS. 5. THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A ) AND CHALLENGED THE VALIDITY OF THE ASSESSMENT ORDER BY RAISING THE GRO UND THAT THE ASSESSMENT ORDER UNDER APPEAL IS BAD IN LAW AND DESERVES TO BE CANCELLED. THE SAID GROUND WAS CONSIDERED BY THE LD. CIT(A) AS GENERAL IN NATURE AND ACCORDINGLY IT WAS REJECTED. NOW THE ASSESSEE IS IN APPEAL. 6. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSMENT IN THIS CASE WAS WRONGLY FRAMED U/S 158BC OF THE I.T. ACT, 1961 (HEREINAFTER TO BE REFERRED AS THE ACT) AND NO NOTICE U/S 158BD OF THE ACT WAS GIVEN. IT WAS CONTENDED THAT NO INCRIMINATING DOCUMENTS, VALUABLE OR ASSETS WERE FOUND FROM THE PREMISES OF THE ASSESSEE WHERE THE SEARCH WAS CONDUCTED ON 02/1/2003. IT WAS FURTHER STATED THAT THE ASSESSMEN T WAS FRAMED ON THE BASIS OF THE DOCUMENTS FOUND DURING THE COURSE OF SEARCH CONDUCTED ON 20/12/2002 5 AT THE BUSINESS AND RESIDENTIAL PREMISES OF SHRI OM PRAKASH LAKHOTIA, THEREFORE, THE ASSESSMENT WAS TO BE FRAMED U/S 158B D OF THE ACT AND NOT UNDER SECTION 158BC OF THE ACT. IT WAS FURTHER STAT ED THAT THE ASSESSING OFFICER, WHO FRAMED THE ASSESSMENT OF THE SEARCHED PERSON, HAD NOT RECORDED ANY SATISFACTION, THEREFORE, THE ASSESSMENT FRAMED IN THE HANDS OF THE ASSESSEE WAS NOT VALID. RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS:- I. ACIT VS. SMT. MUKTA GOENKA (2011) 137 TTJ (JAB) (TM) 249. II. V.B. GIRI VS. ACIT (2009) 126 TTJ (JD) 217. III. KRISHNA SUGAR CORPORATION VS. DCIT (2010) 133 TTJ (LUCKNOW) (UO) 33 IV. DCIT VS. SUMMIT SECURITIES LTD. (2011) 140 TTJ (MUMBAI) (SB) 393 7. IN HIS RIVAL SUBMISSIONS, THE LEARNED D.R. SUPPO RTED THE ORDERS OF THE AUTHORITIES BELOW. 8. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN T HE INSTANT CASE, IT IS NOTICED THAT A SEARCH WAS CONDUCTED ON 20/12/2002 AND PANCH NAMA WAS MADE ON 24/12/2002 IN THE RESIDENTIAL AND BUSINESS PREMISES OF OM PRAKASH LAKHOTIA. THE ASSESSMENT HAS ALSO BEEN FRAMED ON THE BASIS OF DOCUMENTS FOUND DURING THE COURSE OF SEARCH, WHICH STARTED ON 20/12 /2002. THE CLAIM OF THE LEARNED COUNSEL FOR THE ASSESSEE IS THAT THE SEARCH AT THE RESIDENCE OF THE ASSESSEE WAS CONDUCTED ON 02/1/2003 AND NO INCRIMIN ATING DOCUMENT WAS FOUND AT THAT TIME. IT IS WELL SETTLED THAT DURING THE COURSE OF SEARCH, IF CERTAIN 6 INCRIMINATING DOCUMENTS, VALUABLES ETC. BELONGING T O ANY OTHER PERSONS ARE FOUND THEN THE ASSESSING OFFICER HAVING JURISDICTIO N OVER THE CASE OF THE SEARCHED PERSONS, IS REQUIRED TO RECORD THE SATISFA CTION RELATING TO THE PERSONS TO WHOM THE INCRIMINATING DOCUMENTS BELONGS AND THE REAFTER THE ASSESSING OFFICER HAVING JURISDICTION ON THE CASE OF THE PERS ONS TO WHOM THE INCRIMINATING DOCUMENTS ETC. PERTAINS, MAY FRAME TH E ASSESSMENT U/S 158BD OF THE ACT. HOWEVER, IN THE PRESENT CASE, THE ASSES SMENT WAS FRAMED U/S 158BC AND NOT U/S 158BD OF THE ACT AND NOTHING IS B ROUGHT ON RECORD TO SUBSTANTIATE THAT THE ASSESSING OFFICER HAVING THE JURISDICTION OVER THE SEARCHED PERSON RECORDED THE OBJECTIVE SATISFACTION , THEREFORE, THE ASSESSMENT FRAMED U/S 158BC INSTEAD OF SECTION 158B D OF THE ACT WAS NOT VALID. IT IS TRITE THAT BEFORE TAKING THE PROCEEDIN GS AGAINST ANY PERSON, OTHER THAN THE SEARCHED PERSON, OBJECTIVE SATISFACTION IS TO BE RECORDED. IN THE INSTANT CASE, THE SEARCH TOOK PLACE AT THE BUSINESS AND RESIDENTIAL PREMISES OF SHRI OM PRAKASH LAKHOTIA AND IF THE DOCUMENTS OR AS SETS OR VALUABLES BELONGING TO THE ASSESSEE WERE FOUND THEN THE ASSES SING OFFICER HAVING JURISDICTION OVER THE CASE OF SHRI OM PRAKASH LAKHO TIA WAS REQUIRED TO RECORD THE OBJECTIVE SATISFACTION AND THEN THE ASSESSMENT WAS TO BE FRAMED BY THE ASSESSING OFFICER HAVING JURISDICTION OVER THE CASE OF THE ASSESSEE U/S 158BD OF THE ACT, HOWEVER IN THE PRESENT CASE, NOTHING IS BROUGHT ON RECORD THAT THE AFORESAID ACTION WAS TAKEN, THEREFORE, THE ASSESSME NT FRAMED U/S 158BC 7 INSTEAD OF U/S 158BD READ WITH SECTION 143(3) OF TH E ACT WAS NOT VALID. ACCORDINGLY, THE SAME IS QUASHED. SINCE WE HAVE QUA SHED THE ASSESSMENT FRAMED U/S 158BC OF THE ACT, NO SEPARATE FINDING IS GIVEN ON THE OTHER ISSUES RAISED BY THE ASSESSEE IN THIS APPEAL. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . (ORDER PRONOUNCED IN THE COURT ON 13/12/2013). SD/- SD/- (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 13/12/2013 RANJAN* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD.CIT 4. THE CIT(A) 5. THE D.R ASSISTANT REGISTRAR, ITAT, JODHPUR.