High Court Of Delhi
CIT vs. Anupam Sweets
Section 132, 158BC, 158BD,
Block period 1st April, 1989 to 27th July, 1999
Badar Durrez Ahmed & Siddharth Mridul, JJ.
IT Appeal No. 220 of 2009
8th February, 2010
Counsel Appeared : Ms. Rashmi Chopra, for the Appellant : S.R. Wadhwa, for the Respondent
JUDGMENT
Siddharth Mridul, J. :
This appeal of the Revenue is directed against the order of the Tribunal, dt. the 31st Jan., 2008 in IT(SS)A No.185/Del/2006 for the block period 1st April, 1989 to 27th July, 1999.
2. A search under s. 132 of the IT Act, 1961 (hereinafter referred to as ‘the said Act’) had been conducted at the residential premises of Sh. R.K. Gupta and Sh. Devender Gupta and their company named M/s Chintpurni Constructions (P) Ltd. The block assessment in the case of said M/s Chintpurni Constructions (P) Ltd. was completed by the AO of the searched person vide order dt. 28th Sept., 2001. Subsequently, the said AO informed the AO having jurisdiction over the assessee that an investment of Rs. 11,53,000 had been made by the assessee and a further sum of Rs. 2.55 lakh had been paid to the said M/s Chintpurni Constructions (P) Ltd. on account of labour charges. Based on the said information, the AO of the assessee initiated proceedings under s. 158BC r/w s. 158BD of the said Act against the assessee. In the block assessment made in the case of the assessee, the AO determined the undisclosed income of Rs. 1,44,9413 on account of investment in the property No. HS-11, Kailash Colony Market, New Delhi. The assessee challenged the order of the AO, both on the ground of jurisdiction as well as on the merit of the addition.
The Commissioner of Income-tax (Appeals) [CIT(A)] vide his order dt. 2nd April, 2006 held that the AO had jurisdiction to assess the assessee under s. 158BC r/w s. 158BD of the said Act. The CIT(A), however, deleted the addition made on account of investment in the property. The Tribunal allowed the appeal filed on behalf of the assessee by holding that no satisfaction, as required under s. 158BD of the said Act was recorded by the AO having jurisdiction over the person searched and consequently the proceedings initiated under s. 158BD of the said Act were bad in law. In this behalf the Tribunal vide the impugned order noted that it is a settled legal position that, recording of satisfaction by the AO, having jurisdiction of the searched person, that some undisclosed income belongs to a person other than a searched person, is mandatory before proceedings under s. 158BD can be initiated against such other person. In this case, after going through the records the Tribunal came to the conclusion that the letter dt. 14th Aug., 2002 predicated on which the proceedings under s. 158BD of the said Act had been initiated by the AO of the assessee “did not show that he was satisfied that the investment had been made by the assessee”. The Tribunal further went on to note that as a matter of fact the AO of the said M/s Chintpurni Constructions (P) Ltd. had vide the assessment completed by him on the 28th Sept., 2001, already added on substantive basis the sum of Rs. 11.53 lakhs to the assessment of the said M/s Chintpurni Constructions (P) Ltd., and from that action of the AO it could be clearly inferred that the said AO was satisfied that the investment did not belong to some other person. Therefore, the Tribunal came to the conclusion that the satisfaction, as mandated under s. 158BD of the said Act, was not recorded. Therefore, the proceedings under s. 158BD/158BC, insofar as the respondent assessee was concerned, were without jurisdiction. We do not find any error with the findings of the Tribunal so as to warrant any interference with the order appealed against. The appeal does not raise any substantial question of law and is consequently dismissed.
[Citation : 321 ITR 485]
