| Tuesday, July 19, 2011 |
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I. What's New of the day :
1. DHEERAJ CONSTRUCTION AND INDUSTRIES LTD Vs. COMMISSIONER OF INCOME TAX, ITA No. 218 of 2001, Dated : 1st July 2011, HIGH COURT OF CALCUTTA Whether when no incriminating document is found during the search, no addition can be made in respect of the transactions reflected in the regular books in the block assessment even if they are found to be fictitious and can only be considered under regular assessment Held - Yes Whether surcharge is applicable to the Income tax payable even though the search and seizure took place before insertion of the proviso to Section 113 of the Act. The proviso to Section 113 of the Act is curative in nature as is held by the Supreme Court, in the case of CIT vs. Suresh N. Gupta. Therefore, it is held that surcharge is applicable to the Income tax fixed under Section 113 of the Act even though the search and seizure took place before insertion of the proviso to Section 113 of the Act. (Please click here for judgment)
2. MRG DEVELOPERS (P) LTD Vs INCOME TAX OFFICER, ITA No. 1642/Del/2009 Assessment Year: 2004-2005, Dated: 20th May 2011 ITAT – New Delhi Whether when no information regarding the assessment records of alleged entry operators is considered by the AO due to non completion of assessment in those cases, the assessment is rightly set aside to the AO. Most important information will come from the assessment records of alleged king pins of entry operators whose names have been mentioned in assessment order and ADI reports. There is no reference to any action taken on record. Since search & survey operations were made and systematic operations were going on, department must have proceeded against all of them and framed assessments. It is alleged by the department itself that they were operating with network of fictitious and brief case companies whose existence on paper was there but physical operations were managed and the capital was created by transfer of money from one account to other. Proper ascertainments of facts cannot be made in such type of cases unless the action taken in parallel king pin cases is referred to. AO was handicap when none of the person responded to the notice or summons and is found to be non-existent. AO and CIT(A) ought to have verified the record of parallel proceedings/ search proceedings in the case of kingpins of entry operators and their network entities, which has not been referred. (Please click here for judgment)
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