Dr. Kuldeep Singh Santokh, Chandigarh v. ACIT, Chandigarh

ITSSA 3/CHANDI/2011 | misc
Pronouncement Date: 30-07-2012 | Result: Allowed

Appeal Details

RSA Number 321516 RSA 2011
Assessee PAN ACNPS8146G
Bench Chandigarh
Appeal Number ITSSA 3/CHANDI/2011
Duration Of Justice 1 year(s) 2 month(s) 18 day(s)
Appellant Dr. Kuldeep Singh Santokh, Chandigarh
Respondent ACIT, Chandigarh
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 30-07-2012
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 30-07-2012
Date Of Final Hearing 26-07-2012
Next Hearing Date 26-07-2012
Assessment Year misc
Appeal Filed On 12-05-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B CHANDIGARH BEFORE SHRI T.R. SOOD AM AND MS. SUSHMA CHOWLA JM IT(SS)A NO. 03/CHD/2011 B.P: 1.4.96 TO 26.3.200 3 DR. KULDEEP SINGH SANTOKH V A.C.I.T # 846 SECTOR 38-A CENTRAL CIRCLE CHANDIGARH CHANDIGARH ACNPS 8146 G (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI B.M. KHANNA RESPONDENT BY: SHRI S.K. MITTAL DATE OF HEARING: 26.07.2012 DATE OF PRONOUNCEMENT: 30.07.2012 ORDER PER T.R. SOOD A.M IN THIS APPEAL VARIOUS GROUNDS HAVE BEEN RAISED WH ICH READ AS UNDER:- 1 THAT THE LD. CIT(A) HAS FAILED TO APPRECIATE TH E FACTS AND CIRCUMSTANCES OF THE CASE AND HAS THEREBY ERRED IN UPHOLDING THE NOTICE U/S 158BC/158BD. NO SATISFACTION HAS BEEN RECORDED AS THE SEARCH WAS AT THE R/O DR. V.K. GUPTA. THIS MAKES THE PROCEEDI NGS AB-INITIO VOID. 2. THE MONEY BORROWED WAS RETURNED TO DR. V.K. GUPT A AS THE SELLER OF THE PROPERTY SHRI I.K. MALHOTRA REFUSED TO ACCEP T CASH OR IN OTHER WORDS NO TRANSACTION TOOK PLACE. FULL VALUE OF THE PROPERTY WAS PAID AND THE MANNER OF PAYMENT DULY STANDS RECORDED. THESE APPEAR IN THE BOOKS OF FINANCIAL YEAR 2003-04 (MONTH OF APRIL TO AUGUST 2003) WHEN THE REGISTRATION TOOK PLACE ON 18 TH AUGUST 2003. THE DOCUMENTS RESULTING IN COMPLICATION HAD BECOME REDUNDANT BECAUSE THE MONEY TAKEN WAS RETURNED TO DR. V.K. G UPTA AS THE SAME WAS NO ACCEPTED BY THE SELLER SHRI I.K. MALHOTRA RECEIPT REMAINED UNCOLLECTED AS I AND DR. GUPTA ARE VERY GOOD FRIEND S. 3. STATEMENT OF INCOME TAX COMPUTATION CHART ATTACH WITH RETURN CLEARLY RECORDS AS UNDER: IN THE LIGHT OF THESE FACTS NO TRANSACTION HAD B EEN MADE WITH REGARD TO RS. 8 LAKHS BETWEEN ME DR. V.K. GUPTA AN D SHRI I.K. MALHOTRA. I HEREBY OFFER FOR TAXATION THE AMOUNT OF RS. 8 LAK HS TO BUY PEACE AND TRANQUILITY. THE DEPARTMENT HAS ASSESSED RS. 8 LAKHS AS INCOME IN OUR HANDS I.E. MINE AND AS WELL AS DR. GUPTA. THE WHOLE EXERCISE HAS BEEN UNDERTAKEN NEARLY FOR TAXING THE INCOME FOR TAXATION U/S 113 INSTEAD OF NORMAL RATES BY TERMING AS UNDISCLOSED INCOME. 2 IT IS THEREFORE PRAYED THAT THE REMARK TREATING INCOME AS FROM UN-DISCLOSED INCOME MAY BE EXPUNGED. 2. GROUND NO. 1 IN THE EARLIER HEARING ON 6.6.12 THE BENCH HAD D IRECTED THE LD. DR FOR THE REVENUE TO PRODUCE ASSESSMENT RE CORD SO THAT SATISFACTION RECORDED CAN BE VERIFIED. THE LD. DR FOR THE REVEN UE PRODUCED THE RECORD AND FURNISHED COPY OF SATISFACTION NOTE DATED 20.1.2006 WHICH READS AS UNDER:- SATISFACTION NOTE FOR INITIATING PROCEEDINGS U/S 1 58BD R.W.S. 158 BC OF THE ACT IN THE CASE OF SH. K.S. SANTOKH # 846 SEC TOR 38-A CHANDIGARH. A SEARCH AND SEIZURE OPERATION U/S 132 OF INCOME-TA X ACT 1961 WAS CARRIED OUT ON 26.3.2003 AT THE RESIDENTIAL/BUSINES S PREMISES OF SHRI VIJAY KUMAR HIS FAMILY MEMBERS AND RELATIVES. DURI NGTHE COURSE OF SEARCH OPERATION AT HE RESIDENCE OF DR. V.K. GUPTA ON 26.3.2003 A WRITTEN CONFIRMATION/RECEIPT DT. 16.3.2003 ON THE L ETTER HEAD OF SANTOKH NURSING HOME 846 SECTOR 38A CHANDIGARH WAS FOUND. AS PER THIS CONFIRMATION/RECEIPT DR. K.S. SANTOKH RECEIVED RS. 8 LAKHS IN CASH @ 12% INTEREST PER ANNUM FROM DR. V.K. GUPTA. BY DOI NG SO DR. K.S.SANTOKH HAS CONTRAVENED THE PROVISIONS OF SECTI ON 269SS BY ACCEPTING THE LOAN OF RS. 8 LAKHS IN CASH. THEREFORE I AM SATISFIED THAT THERE IS CONTRAVENT ION OF S ECTION 269SS OF THE INCOME-TAX ACT 1961 AND SAME HAS TOBE CONSIDER ED FOR INITIATION OF PENALTY PROCEEDINGS U/S 271D OF INCOME-TAX ACT 196 1 ACCORDINGLY AS PROVIDED U/S 158BD OF THE INCOME-TAX ACT 1961. AC CORDINGLY PROCEEDINGS U/S 158BC(A)(II) OF THE ACT ARE STARTED SEPARATELY IN HIS CASE. 3. R.K. TO ISSUE NOTICE U/S 158BC (A)(II) IN THIS C ASE. SD/- A.C.I.T. 20.1.2006 THE LD. DR FOR THE REVENUE CONTENDED THAT THERE IS CLEAR MENTION THAT THIS WAS IN ACCORDANCE WITH SECTION 158 BD SO THE ABOVE NOTE SHOULD BE CONSTRUED AS SATISFACTION NOTE. 3. ON THE OTHER HAND THE LD. COUNSEL OF THE ASSES SEE SUBMITTED THAT SATISFACTION RECORDED ON 20.1.2006 WHICH HAS BEEN P RODUCED CANNOT BE CALLED SATISFACTION AS PER THE PROVISIONS OF SECTION 158BD OF THE ACT. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS CAREFULLY. SECTION 158 BD READS AS UNDER:- 158BD. WHERE THE ASSESSING OFFICER IS SATISFIED THAT ANY UNDISCLOSED INCOME BELONGS TO ANY PERSON OTHER THAN THE PERSON WITH RESPECT TO WHOM SEARCH WAS MADE UNDER SECTION 132 OR WHOSE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR ANY ASSETS WERE REQUISITIONED UN DER SECTION 132A 3 THEN THE BOOKS OF ACCOUNT OTHER DOCUMENTS OR ASSE TS SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON 8A AND THAT ASSESSING OFFICER SHALL PROCEED 9 [UNDER SECTION 158BC ] AGAINST SUCH OTHER PERSON AND THE PROVISIONS OF THIS CHAPTER SHALL APPLY ACCORDINGLY. THIS PROVISION CAME FOR INTERPRETATION BEFORE THE H ON'BLE SUPREME COURT IN CASE OF MANISH MAHESHWARI V. ACIT AND ANOTHER 289 ITR 341 AND ULTIMATELY IT WAS HELD AS UNDER:- HELD ACCORDINGLY THAT WHERE THE PREMISES OF A DI RECTOR OF A COMPANY AND HIS WIFE WERE SEARCHED U/S 132 OF THE INCOME-TA X ACT 1961 AND A BLOCK ASSESSMENT HAD TO BE DONE IN RELATION TO THE COMPANY THE ASSESSING OFFICER HAD TO (I) RECORD HIS SATISFACTIO N THAT ANY UNDISCLOSED INCOME BELONGED TO THE COMPANY AND (II) HAND OVER T HE BOOKS OF ACCOUNT AND OTHER DOCUMENTS AND ASSETS SEIZED TO THE ASSESS ING OFFICER HAVING JURISDICTION AGAINST THE COMPANY. FROM ABOVE IT IS CLEAR THAT SECTION 158 BD CONTAINS TWO REQUIREMENTS. WHEN EVER A PERSON IS SEARCHED AND SOME MATERIAL IS FOUN D IN RESPECT OF SOME OTHER PERSON AND IF THE ASSESSING OFFICER IS SATISFIED TH AT SUCH OTHER PERSON HAS SOME UNDISCLOSED INCOME THEN HE IS REQUIRED TO HAND OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OF SUCH OTHER PERSON THE MATERI AL WHICH WAS FOUND DURING SEARCH. THUS THE FIRST CONDITION IS THAT THE ASSES SING OFFICER DOING ASSESSMENT OF THE PERSON WHO HAS BEEN SEARCHED IS SATISFIED TH AT MATERIAL WHICH DURING SEARCH WAS FOUND SHOW UNDISCLOSED INCOME IN RESPECT OF OTHER PERSON AND THE SECOND CONDITION IS THAT THE MATERIAL OR DOCUMENTS ETC. SHOULD BE GIVEN TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH PER SON. WE HAVE ALREADY PRODUCED SATISFACTION NOTE WHICH WAS RECORDED ON 20 .1.2006. A PLAIN READING OF THE ABOVE NOTE CLEARLY SHOWS THAT THE SATISFACTION HAS BEEN RECORDED FOR LEVY OF PENALTY FOR CONTRAVENTION OF PROVISIONS OF SECTION 269 SS OF THE ACT. NOWHERE IT IS STATED THAT MATERIAL FOUND DURING SEARCH INDICAT ES THAT SUCH OTHER PERSON HAD SOME UNDISCLOSED INCOME. MOREOVER THERE IS NO INDI CATION IN THE NOTE THAT SUCH MATERIAL WAS HANDED OVER TO THE ASSESSING OFFICER H AVING JURISDICTION ON SUCH OTHER PERSON. IN THIS BACK GROUND IT IS CLEAR THAT ABOVE SATISFACTION CANNOT BE CONSTRUED SATISFACTION AS ENVISAGED U/S 158BD AS IN TERPRETED BY HON'BLE APEX 4 COURT. THEREFORE WE ARE OF THE OPINION THAT NO P ROPER SATISFACTION WAS RECORDED AND ACCORDINGLY WE ANNUL THE ASSESSMENT FRAMED U/S 158 BD OF THE ACT. 5. SINCE WE HAVE ANNUL THE ASSESSMENT ORDER U/S 158 BD IN THE ABOVE NOTED PARAS THEREFORE OTHER GROUNDS BECOME OF ACADEMIC NATURE AND THE SAME ARE NOT BEING ADJUDICATED. 6. IN THE RESULT APPEAL FILED BY THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED ON 30.07. 2012 SD/- SD/- (SUSHMA CHOWLA) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 30 .07.2012 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/ THE DR 5