DCIT, Thrissur V. M/s A.M. Motors, Malappuram

ITSSA 22/COCH/2007

• Counselvise Citation: [2012] 121 COUNSELVISE.COM (IT) 8118 (ITAT-COCHIN)
• Duration Of Justice: 5 year(s) 3 month(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 27-07-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 23-07-2012
• Assessment Year: misc
• Appeal Filed On: 26-04-2007
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A S BINDHU
• Assessee Lawyers: C R HARISH
• Keywords: Search and seizure; Block assessment
• Section: 133A

Judgement Text

1 IT(SS)A NO.22 /COCH/2007 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKARA N(AM) I.T(SS)A NO. 22/COCH/2007 (BLOCK PERIOD 01-04-1996 TO 28-08-2002) DY.CIT, CENT.CIR. VS M/S A.M. MOTORS THRISSUR VARANGODE, MALAPPURAM PAN : AAHFA8699Q (APPELLANT) (RESPONDENT) APPELLANT BY : MS. A.S. BINDHU RESPONDENT BY : SHRI C.R. HARISH DATE OF HEARING : 23-07-2012 DATE OF PRONOUNCEMENT : 27-07-2012 O R D E R PER N.R.S. GANESAN (JM) THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME-TAX(A)-I, KOCHI DATED 22-01-2007 AND PERTAINS TO BLOCK PERIOD 01-04- 1996 TO 28-08-2002. 2. MS. A.S. BINDU, THE LD.DR SUBMITTED THAT A SEARC H WAS CONDUCTED AT THE RESIDENTIAL PREMISES OF ONE OF THE PARTNERS OF THE FIRM, VIZ. SHRI MOHAMMED SHERIF ON 28-08-2002. ACCORDING TO THE LD.DR, CERTAI N INCRIMINATING MATERIAL RELATING TO THE ASSESSEE FIRM WAS SEIZED. A SEARCH WAS ALSO CONDUCTED U/S 133A ON THE SAME DAY AT THE BUSINESS PREMISES OF THE ASS ESSEE AND TWO LOOSE SHEETS WERE SEIZED. SUBSEQUENTLY NOTICES WERE ISSUED TO T HE ASSESSEE U/S 158BD OF THE 2 IT(SS)A NO.22 /COCH/2007 ACT. THE ASSESSING OFFICER MADE ADDITION WITH REGA RD TO INVESTMENT MADE BY THE PARTNERS TO THE EXTENT OF RS.2,34,51,978. HOWEVER, THE COMMISSIONER OF INCOME- TAX(A) DELETED THE SAME ON THE GROUND THAT THE ADDI TION WAS MADE ON THE BASIS OF THE MATERIAL FOUND DURING THE COURSE OF SEARCH O PERATION. ACCORDING TO THE LD.DR THE INCRIMINATING MATERIAL WAS FOUND AND DURI NG THE COURSE OF SEARCH OPERATION. THEREFORE, THE MATERIAL FOUND DURING TH E COURSE OF SURVEY OPERATION CAN ALSO BE A BASIS FOR ADDITION SINCE IT RELATES T O THE INVESTMENT MADE BY THE PARTNERS OF THE FIRM. THE LD.DR FURTHER SUBMITTED THAT IN THE CASE OF PARTNERS ASSESSMENT, THE MATTER WAS REMANDED BACK TO THE FILE OF THE ASSESSING OFFICER BY THIS TRIBUNAL. 3. ON THE CONTRARY, SHRI C.R. HARISH, THE LD.REPRES ENTATIVE FOR THE ASSESSEE SUBMITTED THAT THERE WAS A SEARCH IN THE RESIDENTIA L PREMISES OF THE PARTNERS OF THE FIRM AND SURVEY WAS CONDUCTED AT THE BUSINESS P REMISES OF THE FIRM. ACCORDING TO THE LD.REPRESENTATIVE, THE ADDITION WA S MADE IN THE HANDS OF SHRI MOHAMMED SHERIF WHO IS PARTNER OF THE ASSESSEE FIRM . WHEN THE APPEAL OF SHRI MOHAMMED SHERIF CAME UP BEFORE THIS TRIBUNAL, THE I SSUE WAS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER FOR RECONSIDERATI ON. THE MAIN CONTENTION OF THE LD.REPRESENTATIVE FOR THE ASSESSEE IS THAT THE INVE STMENT WAS MADE BY THE PARTNER, SHRI MOHAMMED SHERIF AND THE MATERIAL WAS FOUND ONLY DURING THE COURSE OF SURVEY OPERATION; THEREFORE, THERE CANNOT BE ANY ADDITION IN THE BLOCK ASSESSMENT. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ADDITION WAS MADE ON THE BASIS OF THE REASONS STATED BY THE ASSESSING OFFICER IN THE ASSE SSMENT OF SHRI MOHAMMED SHERIF ON PROTECTIVE BASIS. THE SUBSTANTIVE ADDITI ON WAS MADE IN THE HANDS OF 3 IT(SS)A NO.22 /COCH/2007 SHRI MOHAMMED SHERIF. WHILE CONSIDERING THE APPEAL OF SHRI MOHAMMED SHERIF THIS TRIBUNAL FOUND THAT THE MATTER NEEDED VERIFICA TION ON THE BASIS OF MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION. ADMIT TEDLY, THERE WAS A SEARCH AND SEIZURE OPERATION SIMULTANEOUSLY. SECTION 158BB(1) CLEARLY SAYS THAT UNDISCLOSED INCOME HAS TO BE COMPUTED ONLY ON THE BASIS OF THE MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION OR THE INFORMATION WHICH IS RELATABLE TO THE MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION. THERE FORE, IT IS THE OBLIGATION OF THE ASSESSING OFFICER TO CONFINE HIMSELF TO THE MATERIA L FOUND DURING THE COURSE OF SEARCH OPERATION. IF ANY INFORMATION OBTAINED IN T HE COURSE OF SURVEY OPERATION WHICH IS RELATABLE TO THE MATERIAL FOUND DURING THE COURSE OF SEARCH, THEN TO THAT EXTENT THE MATERIAL FOUND DURING THE COURSE OF SURV EY OPERATION MAY ALSO BE CONSIDERED. HOWEVER, THE MATERIAL FOUND DURING THE COURSE SURVEY OPERATION IS INDEPENDENT AND HAVE NOTHING TO DO WITH THE MATERIA L FOUND DURING THE COURSE OF SEARCH OPERATION, THEN THE MATERIAL FOUND DURING TH E COURSE OF SURVEY OPERATION CANNOT BE A BASIS FOR COMPUTING THE UNDISCLOSED INC OME FOR THE BLOCK PERIOD. SINCE THE SUBSTANTIVE ADDITION MADE IN THE HANDS OF PARTNER, SHRI MOHAMMED SHERIF WAS REMANDED BACK TO THE FILE OF THE ASSESSIN G OFFICER, THIS TRIBUNAL IS OF THE OPINION THAT THE ADDITION MADE IN THE HANDS OF THE FIRM ON PROTECTIVE BASIS ALSO NEEDS TO BE CONSIDERED IN THE LIGHT OF MATERIA L FOUND DURING THE COURSE OF SEARCH OPERATION. ACCORDINGLY THE ORDERS OF THE LO WER AUTHORITIES ARE SET ASIDE AND THE ISSUE OF ADDITION MADE BY THE ASSESSING OFF ICER IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SH ALL RECONSIDER THE ISSUE AFRESH IN ACCORDANCE WITH LAW IN THE LIGHT OF MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION AND THEREAFTER DECIDE THE SAME IN ACCORDA NCE WITH LAW AFTER GIVING OPPORTUNITY TO THE ASSESSEE. 4 IT(SS)A NO.22 /COCH/2007 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLO WED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 27 TH JULY, 2012. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 27 TH JULY, 2012 PK/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE COMMISSIONER OF INCOME-TAX 4. THE COMMISSIONER OF INCOME-TAX(A) 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH