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Manoj Aggarwal vs. DCIT (ITAT Delhi 5 Member Spl Bench)

DATE: (Date of pronouncement)
DATE: July 28, 2008 (Date of publication)

(1) Even in the case of an assessee not maintaining books of account and to whom s. 68 does not apply, addition in respect of unexplained entries in the bank book can be made;

(2) Where the assessee was not provided copies of the seized documents and the delay in filing the block return was on that count, interest u/s 158BFA (1) is not leviable even though there is no exemption on that count in the statute.;

(3) It is a precondition to invoking s. 158BD that the AO must, in the course of s. 158BC proceedings, record satisfaction that the income belongs to the other person. In the absence of such finding, s. 158BD cannot be invoked. The satisfaction must be objective and not subjective. It must be recorded before jurisdiction is exercised. Even though no time limit is prescribed, there is an implied time limit for giving such finding i.e. the period prescribed in s. 158BE for framing the s. 158BC assessment;

(4) The note of satisfaction must indicate the undisclosed income found as a result of the search and the person to whom the income belongs before proceedings are initiated. The law laid down in the context of s. 147 is not relevant in view of the fact that s. 158BD uses the “satisfaction” and not “reason to believe”.

(5) Where the s. 158BC notice gave the assessee a period of less than 15 days to file the return though the section required a period of not less than 15 days to be given, held that the notice suffered from an incurable defect rendering all emanating proceedings illegal and null and void.

(6) The immunity conferred by the VDIS is confined to the jewellery disclosed by the assessee and does not extend to the sale of such jewellery. It is also not correct to say that s. 68 does not apply to sales proceeds of an asset credited in the books of account. The AO is entitled to go into the genuineness of transactions of sales of such declared jewellery.