| Question And Answer | |
|---|---|
| Subject: | Re-assessment Proceedings/ Double Taxation. Applicability of section 153C |
| Category: | Income-Tax |
| Querist: | GOVIND AGRAWAL |
| Answered by: | Research Team |
| Tags: | Reassessment, Search and Seizure |
| Date: | July 12, 2021 |
Assessment for A.Y 2012-13 was reopened by issuing notice U/S 148 on the allegation that the assessee has received Bogus commodity profit through banking channel and passed on cash as per statement of broker.
The assessee had shown the profit on commodity and offered the same for taxation in the original return and also in the return filed in response to 148 notice. No deduction from the aforesaid income was claimed.
Apart from various legal grounds of appeal one of the ground is , since the income has already been offered to taxation the addition of the same again on the allegation that the assessee had paid cash amount to the broker amounts to double taxation which is against the settled principle.
Query 1 : How far the aforesaid plea is tenable . Please give case laws in support of the same.
Query 2 : from the reassessment order it is not clear whether the search was conducted on the alleged accommodation entry provider . Whether addition ground can be taken that notice U/S 153C was not issued hence the proceedings are invalid.
The assessee must have requested for recording reasons . In the recorded reasons the Assessing Officer must have referred the whether there was search and seizure action against the broker . If there was a search and seizure action against the broker the issue of notice u/ s 148 is bad in law the notice should have been u/s 153C of the Act . The assessee may rely on following case laws Rajat Shubra Chatterji v. ACIT, ITA No. 2430/Del/2015 (Delhi)(Trib.) , ITO v. Arun Kumar Kapoor (2011) 16 taxmann.com 373 (Amritsar)(Trib.) G. Koteswara Rao v. DCIT [2015] 64 taxmann.com 159 (Vishakha) ( Trib. ) .
The burden is on the revenue to prove that the cash transaction and alleged payment of profit . The assessee can request for statement of the Broker and also cross examination. Addition cannot be made without giving an opportunity of cross examination . The assessee can rely on following case laws . Kishanchand Chellaram v. CIT (1980) 125 ITR 713 (SC), Andaman Timber Industries v. CCE (2015) 127 DTR 241 / 281 CTR 241 (SC)
The issue of double taxation depend upon how the assessment order will be framed and the nature of addition etc .
The Tax consultant may be able to guide after reading the , recorded reasons , objections raised , order disposing the objection and the assessment order .