Manoj Aggarwal v. Dy. CIT
INCOME TAX ACT, 1961
Income from undisclosed source - Addition under section 68 -Cash credit vis--vis unexplained investment
AO made addition under section 68 on ground that bank accounts that of assessee showed unsecured loan from two HUFs and bank accounts of these entities were used by the assessee in his business of giving accommodation entries and that these two entities did not have any resources of their own. Held: Since, assessee was not maintaining any books of account, therefore, section 68 will not be applicable, though cash deposit in bank should be explained by assessee under section 69 or section 69B. If assessee, unless shows nature and source of money deposited into his bank account, by any clinching evidence, same should be as assessees unexplained income.
Income-tax Act, 1961, Section 69, read with sections 68 and 69B
A.Y.: 2000-01
Decision: In favour of revenue.
INCOME TAX ACT, 1961
Search and seizure - Block Assessment -Undisclosed income
Assessee had admitted during search proceedings, that he carried business of providing accommodation entries in respect of share trading business. He also contended that transactions in business of jewellery represented actual purchases and sales. Department seized several sale and purchase bills issued by company B, in which assessee and his father were only shareholders and directors. AO found that B was a bogus entity, neither engaged in real business of sale or purchase of jewellery and accordingly, AO made addition on account of commission income as undisclosed income. Held: Evidence on record showed that B had showroom in India and had sales-tax assessment. Hence, jewellery business carried on by B company should be held to be genuine and no addition was justified on account of these jewellery transactions.
Income-tax Act, 1961, Section 158B
A.Y.: Block period 1-4-1990 to 20-8-2000
Decision: In favour of revenue.
INCOME TAX ACT, 1961
Search and seizure - Block Assessment -Undisclosed income of any other person
Held: If AO making block assessment in case of person searched under section 158BD, he had to be satisfied and must contain a positive finding that undisclosed income detected belongs to some person other than person searched and, thus, recording of satisfaction was mandatory and imperative before assumption of jurisdiction under section 158BD. Unless a clear time of fifteen days was given as prescribed in section 158BC (a)(i), notice would be rendered invalid and hence, jurisdiction under section 158BD by issue of such notice and all further proceedings of block assessment pursuant thereto would also be rendered invalid and void.
Income-tax Act, 1961, Section 158BD
A.Y.: Block period 1-4-1990 to 20-8-2000
INCOME TAX ACT, 1961
Assessment - Notice under section 143(2) -Time Limit
Assessee was called to filed block return under section 158BD on 19-12-2002. Assessee filed on 16-6-2003. Assessee, by letter dated 16-6-2003, asked AO to supply a copy of reasons recorded by him for notice issed under section 158BC, but same was not supplied by AO. Thereafter, he filed writ petition before High Court. High Court directed that AO required to supply reasons before proceeding further in matter of assessment, i.e., in issuing notice under section 143(2). AO complied the order on 3-12-2003. Assessee filed its objection on 17-12-2003, and these objections were disposed by AO on 8-11-2004 and on same day, AO issued notice under section 143(2). Held: High Courts direction was clear and unambiguous and merely because AO taken 11 months to dispose of objection raised under section 158BD, notice under section 143(2) passed diligently on same day on which he disposed of assessees objection, could not be held to be served after period of limitation, i.e., beyond 12 months from end of month in which return was furnished.
Income-tax Act, 1961, Section 143, read with section 158BD
A.Y.: Block period 1-4-1990 to 20-8-2000
Decision: In favour of assessee.
FINANCE ACT, 1997
Voluntary Disclosure of Income Scheme, 1997 - Conditions Precedent -Delay in payment of tax
Held:Since, entry had made in books of account as per the requirements of Voluntary Disclosure of Income Scheme (VDIS), 1997, therefore, section 68 can be invoked when declared asset was sold later and sale proceeds were credited in books of account. Hence, asset representing declared income or acquired out of declared income was later sold, AO had power to examine issue whether real sale of asset was not curtailed by any provisions of VDIS of 1997.
Finance Act, 1997, Section 68,
A.Y.: 1998-99
Decision: In favour of revenue.