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II. Direct Taxes Case Laws:
1. Surendra
Kumar Jain Vs. Principal Commissioner of Income Tax, W.P.(C) 4304/2018
& CM APPL. 16759/2018 Date of Pronouncement: 01/10/2018. Delhi High
Court
Issue:
Whether limitation period in cases of block reassessment
proceedings concerning search, seizure assessments be governed by period
prescribed u/s 153(2A)(Relevant to AY 2005-06 to 2012-13).
Held: Yes
Brief facts:
The brief facts of the case are that pursuant to search and seizure
proceedings u/s 132 of Income tax Act’1961 on the assessee, the
assessment was completed for the block period on 28.03.2013 by the
concerned Ld. AO. Ld. CIT(A) partly allowed the assessee’s appeal on
14.08.2014.On appeal, the Hon’ble ITAT remitted the matter back to Ld.AO
to complete the assessment de novo who completed the assessment of
block period by order dated 22.12.2017.The assessee contended that the
impugned order is per se illegal and void on the ground that Ld.AO
should have completed the assessment up to 31.12.2016 as per proviso to
Sec 153(2A).(Applicable to AY 2005-06 to AY 2012-13).
Being aggrieved, the assessee has filed writ petition before the Hon’ble High Court.
Held:
The Hon’ble High Court by placing reliance on judgement in case of
Odeon Builders Pvt. Ltd. vs. PCIT held that as per proviso to Section
153(2A), the period in case of reassessment was nine months from the
financial year in which notice for reassessment is served.
Further, the Hon’ble Court held that two year period of limitation as
was contended by revenue shouldn’t be applied in remand proceedings (as
was the case in hand) in cases of block reassessment proceedings.
Therefore, the appeal was held in favour of assessee and against the revenue.
Cases Referred:
1. Odeon Builders Pvt. Ltd. vs. PCIT (2017) 393 ITR 27 (Delhi HC).
2. Nokia India (P) Ltd. vs. DCIT, (2017) 85 Taxmann.com 291 (Delhi HC).
3. CIT vs. Bhan Textile P. Ltd, (2008) 300 ITR 176 (Delhi HC).
4. PCIT vs. PPC Business and Products P. Ltd., (2017) 398 ITR 71(Delhi HC).
(Please click here for judgment)
2. ACIT Vs. M/s Cast & Blower Co. Pvt. Ltd., I.T.A. No. 750/Rjt/2014, Date of Pronouncement: 04.10.2018, ITAT - Rajkot
Issue:
Whether the provisions of Section 292C of the Income Tax Act, 1961
can be applied in respect of unsigned Agreement to Sell found during
the course of Survey at the premises of assessee in the name of third
party, on the basis of Statement of Director of assessee?
Held: Yes
Brief facts:
The assessee company is engaged in manufacturing of water pumps under
the brand ‘TRISHUL’. A survey operation under s.133A of the Act was
carried out at the business premises of the assessee company on
19.10.2010. In the course of survey proceedings, a Satakhat (agreement
to sale) on a stamp paper no. 3997 of Rs.50/- was found pertaining to an
agricultural land for consideration of Rs.2,57,00,000/-. The aforesaid
Satakhat was duly signed by the sellers but remained unsigned on behalf
of the assessee. At the back of the Satakhat, a manual jotting of
various entries were observed which shows that the assessee has made
certain payments on various dates to the intending sellers aggregating
to Rs.1,71,25,000/- in cash as on-money in cash in part consideration of
land. As per the statement of Director of assessee company, it was
found that the assessee has decided to purchase the land in the name of
son of the Director. The assessee contended that no such dealing as
mentioned in the documents impounded were actually carried out.
The AO
accordingly invoked Section 292C of the Act which enables the Revenue to
presume that the documents found in the course of the survey belong to
the person in possession and the contents thereof are true. The AO made
an addition of Rs.1,71,25,000/- towards unexplained money under s.69A
r.w.s. 292C of the Act. Aggrieved by the order of the AO, the assessee
preferred appeal before the CIT(A). The CIT(A) has deleted the addition
on the ground that the impugned Satakhat found during the course of
survey action in the business premises of the assessee company is a
piece of dumb document & without any corresponding independent
evidence, no additions can be made based on mere statements recorded
during course of survey action, which cannot be acted upon as an
evidence for the purposes of making additions. The Revenue, being
aggrieved, filed an appeal before the Hon’ble ITAT.
Held:
The Hon’ble ITAT held that absence of any formal signature on behalf
of the buyer in the Satakhat agreement found in its custody is not
detrimental to assessee company per se. It is only elementary that the
transaction of on-money in cash is between the two parties would be done
secretly. Typically, flows of cash are unearthed by the chain of
circumstances. There can possibly be no direct manner to gather the
proof of the cash transactions. The preponderance of probabilities thus
leans against the assessee when the facts and circumstances are seen in
natural perspective. Further, when the document i.e. Satakhat is read as
a whole in the circumstances existing, we find that presumption of
unaccounted transactions in the deal as recorded in the manual jottings
is clearly discernible and has a sound basis. The retraction made by the
Director subsequent to survey and affidavit placed before the CIT(A) is
clearly opposed to what is obvious and thus ostensibly unreliable and
devoid of any value. It is concluded on facts that the contents of the
document found are relevant and true which establishes the existence of
unaccounted cash transactions, non-detection of physical cash per se
would not be a handicap to invoke the provisions concerning assessment
of unexplained and unaccounted assets and/or income. For these reasons,
the question is answered in favour of the revenue and against the
assessee.
Hence, the appeal was held in favour of the revenue and against the assessee.
(Please click here for judgment)
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