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DATE: February 24, 2017 (Date of pronouncement)
DATE: April 22, 2017 (Date of publication)
AY: 2009-10
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S. 263: There is a distinction between “lack of enquiry” and “inadequate enquiry”. If the AO has called for the necessary details and the assessee has furnished the same, the fact that the AO is silent in the assessment order does not mean that he has not applied his mind so as to justify exercise of revisional powers by the CIT u/s 263

We are of the view, that there is a distinction between “lack of enquiry” and “inadequate enquiry”. In the present case the Assessing Officer collected necessary details, examined the same and then framed the assessment u/s. 143(3) of the Act. Therefore, in such a situation the decision from Hon’ble High Court of Delhi in CIT vs. Anil Kumar Sharma (2011) 335 ITR 83 (Del.)(supra), clearly comes to the rescue of the assessee . We are expected to ascertain whether the Assessing Officer had investigated/examined the issue and applied his mind towards the whole record made available by the assessee during assessment proceedings. Uncontrovertedly, necessary details/reply to the questionnaire were filed/produced by the assessee and the same were examined by the Assessing Officer, therefore, it is not a case of lack of enquiry by the Assessing Officer

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DATE: February 14, 2017 (Date of pronouncement)
DATE: March 18, 2017 (Date of publication)
AY: 2011-12
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CITATION:
S. 143(3): Loose papers which do not have full details are "dumb documents" and have no evidentiary value. The fact that the assessee sold goods at a concession does not mean that that the difference between sale value and market value can be assessed as income. The onus is on the AO to make inquiries from the buyers and bring incriminating evidence on record to show that the assessee sold flats at a higher rate

The AO has no power to disturb the sale price shown except in three cases. The first is under Section 145 of the Act. Where the sale of properties is part of the business of the assessee, the Assessing Officer, if he is of the opinion that the accounts are not correct and complete, may proceed to reject the books of accounts and thereafter make a best judgment assessment of the income in the manner prescribed by Section 144. The second is the case where Section 50C of the Act is invoked on the basis of the prices fixed by the Stamp Valuation Authorities of the State Government. That section, it is pointed out, however, applies only in the computation of capital gains and cannot be availed by the Revenue where the profits of the business are to be computed

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DATE: January 18, 2017 (Date of pronouncement)
DATE: January 30, 2017 (Date of publication)
AY: 2009-10
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Bogus purchases: As a direct one to one relationship/nexus between the purchases and sales has not been established by the assessee, the purchases have to be treated as bogus and 12% of the purchase cost is assessable as profits (law on the subject noted)

It is also a settled legal proposition that if no evidence is given by the party on whom the burden is cast, the issue must be found against him. Therefore, onus is always on a person who asserts a proposition or fact, which is not self evident, The onus, as a determining factor of the whole case can only arise if the Tribunal, which is vested with the authority to determine, finally all questions of fact, finds the evidence pro & con, so evenly balanced that it can come to no conclusion, then, the onus will determine the matter

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DATE: November 25, 2016 (Date of pronouncement)
DATE: January 11, 2017 (Date of publication)
AY: 2007-08
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S. 143(3): An addition towards income cannot be made merely on the basis of the statement of a third party that an amount has been paid to the assessee in the absence of conclusive evidence

Now the issue which requires our consideration is whether the addition can be sustained solely on the basis of the statement of Shri Hanuman Yadav, when there is no material placed on record that Shri Hanuman Yadav has made any claim against the assessee in any court of law seeking cancellation of sale deed or filing a recovery suit. The Coordinate Bench of the Tribunal after following the ratio laid down by Hon’ble Supreme Court under the similar circumstances in Union of India vs. T. R. Verma 1957 SC 882 and Kishan Chand Chellaram vs. CIT, 125 ITR 713 (SC) has held in the case of Ghanshyam Das Agarwal vs. ITO in ITA No. 1161/JP/2010 that in the absence of any conclusive evidence the document could not have been disbelieved. The D/R could not point out any binding precedent wherein it has been held that the oral statement would over ride the documentary evidence. Therefore, respectfully following the decision of the Coordinate Bench in the case of Ghanshyam Das Agarwal vs. ITO in ITA No. 1161/JP/2010, we are of the view that the AO was not justified to make addition solely on the basis of the statement of Shri Hanuman Yadav when there was a registered sale deed and more particularly when the maker of statement has not challenged the sale deed before any court of law. It is also not placed on record whether the sale deed was executed under coercion.

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DATE: November 30, 2016 (Date of pronouncement)
DATE: January 4, 2017 (Date of publication)
AY: 2008-09
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S. 143(2)/ 143(3): Proper service of the notice u/s 143(2) is mandatory and its failure renders the assessment order void. The fact that an unauthorized person appeared on behalf of the assessee before the AO does not mean that the notice was properly served

The contention of the AR was that Shri M.Sankar is not a concerned person representing the assessee to receive such notice and the notice was served on improper person. We also find from the assessment order that Shri Sanjib Sarkar being one of the partners appeared on 10-12- 2010 before the AO for first time and the order sheet at page no-1 of paper book supports the same. We further find that the AO recorded the issuance of notice u/s. 142(1) on 19-7-2010 for fixing the hearing on 02-08-2010 and thereafter, according to assessment order, probably, after 26-08-2010 another notice for initiation of penalty proceedings u/s. 271(1)(b)of the Act was issued. Therefore, it goes to show that a person claiming to be representing the assessee as partner appeared before the AO for the first time on 10-12-2010 in response to notice issued u/s. 271(1)(b) of the Act and it concluded that the service of notice u/sec 143(2) on 30-09-09 and issuance of notice thereafter u/sec 142(1) of the Act was not in the knowledge of the assessee and as rightly contended by the AR notice u/sec 143(2) of the Act was not properly served on the assessee

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DATE: July 14, 2016 (Date of pronouncement)
DATE: August 5, 2016 (Date of publication)
AY: 1994-95
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CITATION:
S. 132(4): Mere voluntary disclosure of undisclosed income by assessee cannot form basis of addition if no evidence is detected in search. Fact that retraction of statement is late is irrelevant. CBDT Circular No. F.No.286/2/2003-IT (In) dated 10.03.2003 bars addition on the basis of confession

It is a normal presumption that statement under section 132(4) is given voluntarily unless it is proved otherwise. There is no evidence on record to show that this statement was given in any coercion. But this statement was subject to variation on either side after verification i.e. assessee could reduce the disclosure made or the Assessing Officer could enhance the same if the facts and evidence so warranted. May be, even if this fact is not mentioned in the statement itself, the point will still remain since it is no body’s case to get say any extra tax then is due. The reality remains that there is no evidence what-so-ever with the department even in consequence of a serious action like search and seizure followed by detailed security which could support the earning of speculation income of Rs.10,50,000/- in this year. In other words, there is no evidence to support the very existence of this income except the so called statement u/s 132(4) of the Act. It defies logic that an assessee will or should admit any income which he had not earned and which the department had not found out

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DATE: July 20, 2016 (Date of pronouncement)
DATE: August 3, 2016 (Date of publication)
AY: 1991-92
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S. 132(4): Admission of undisclosed income by assessee is not conclusive if no evidence is found to support the admission. A retraction, though belated, is valid. Failure to provide cross-examination to assessee of persons whose statements are relied up is fatal to the addition. CBDT Directive F.No.286/98/2013 IT (INV.II] dated 18/12/2014 prohibits additions on the basis of confession

Admission made by the assessee is not a conclusive proof and such admission can be used as an evidence unless it is not retracted. The assessee in this case has already retracted the statement which in our opinion is a valid retraction. Although there had been search in the case of Gokul Corporation and its partner Shri Suresh A Patel on which the Revenue has relied for making the additions in the case of the assessee but the Revenue could not bring any evidence or material except the statement of the assessee which was recorded on 8.1.96 and also the statements of Shri Subhash Pandey and Shri Kashyap Thakore and these statements were although recorded at the back of the assessee. When the assessee has asked for their cross-examination, the cross examination was not given to the assessee, although the statement of the assessee was recored in consequence of the said statement

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DATE: June 8, 2016 (Date of pronouncement)
DATE: June 28, 2016 (Date of publication)
AY: 2008-09
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CITATION:
S. 148 notice issued to, and reassessment order passed on, a non-existing entity is without jurisdiction. A writ petition can be entertained despite the presence of alternate remedy

The impugned notice has been issued in respect of a non existing entity as M/s. Addler Security Systems Pvt. Ltd., which stands dissolved, having been struck off the Rolls of the Registrar of Companies much before its issue. Consequently, the assessment has been framed also in respect of the non-existing entity. This defect in issuing a reopening notice to a non-existing company and framing an assessment consequent thereto is a issue which goes to the root of the jurisdiction of the Assessing Officer to assess the non-existing company

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DATE: June 10, 2016 (Date of pronouncement)
DATE: June 28, 2016 (Date of publication)
AY: 2011-12
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CITATION:
S. 263: In challenging the validity of a s. 263 revision order, the validity of the underlying s. 143(3) assessment order which is sought to be revised can be examined even if the said assessment order has not been challenged and has become final. If the assessment order is passed on a non-existent entity, the revision order is void

There is no doubt that after passing of the original assessment order, the primary (i.e. original proceedings) had come to an end and attained finality and, therefore, outcome of the same cannot be disturbed, and therefore, the original assessment order framed to conclude the primary proceedings had also attained finality and it also cannot be disturbed at the instance of the assessee, except as permitted under the law and by following the due process of law. Under these circumstances, it can be said that effect of the original assessment order cannot be erased or modified subsequently. In other words, whatever tax liability had been determined in the original assessment order that had already become final and that cannot be sought to be disturbed by the assessee. But, the issue that arises here is that if the original assessment order is illegal in terms of its jurisdiction or if the same is null & void in the eyes of law on any jurisdictional grounds, then, whether it can give rise to initiation of further proceedings and whether such subsequent proceedings would be valid under the law as contained in Income Tax Act? It has been vehemently argued before us that the subsequent proceedings (i.e. collateral proceedings) derive strength only from the order passed in the original proceedings (i.e. primary proceedings). Thus, if order passed in the original proceedings is itself illegal, then that cannot give rise to valid revision proceedings

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