- (1.) This appeal under Section 260A of the Income Tax Act is directed against the order of the Income Tax Appellate Tribunal, Jaipur Bench, Jaipur (for short ITAT) dated 21.11.2008 and is relevant for the block period 1.4.1995 to 20.3.2002.
(2.) The brief facts emerging on the face of record are that search operation came to be carried out by the authorised officers of the Income Tax Department on 20/03/2002 at the residential and business premises of Vaidya Shri Narayan Das Swami at Phulera. During the course of search, incriminating documents in the nature of computerized project report was found and seized, which pertained to the respondent-assessee, as per Annx.A-23 pages 1-12 of the Panchnama dated 20.3.2002. On the basis of the said proceedings, notice under Section 158BD read with Section 143(3) of the Income Tax Act came to be issued requiring the assessee-respondent to file a return as contemplated under Section 158BD read with Section 158BC. The assessee submitted a return for the block assessment in form No.2B declaring nil income. It is the case of the respondent that the assessee is a private limited company and was incorporated on 12.1.1996 with an object of manufacturing cables, conductors, electrical transformers etc. and is in the same business since 1997 and has been submitting its return of income regularly. It revealed from the Annx.A-23 seized from the premises of Vaidya Narayan Das Swami and as per the project report it transpired that the assessee had prepared a project report for availing loan from the financial institutions on plot of land bearing F-551-A, Road no.6 VKIA, Jaipur and thereafter, after initial purchase, work shed building construction was made and respondent assessee started production from 15.1.1997. On being queried about the project report, the assessee replied that the assessee to obtain loan got prepared the project report for submitting to various financial institutions from where the assessee was willing to obtain loan namely Rajasthan Financial Corporation (RFC) and/or State Bank of India and/or SBBJ and it was submitted that it is a tentative project report so that the company may obtain a loan and effectively make alteration and modification and construction necessary for the industry, which was needed by it. On being queried to prove the source of income and the investment as per the project report is concerned, it was submitted that whatever investment has been made is duly reflected in the books of accounts. However, the books of accounts have been lost and even an intimation report was submitted with the Vishwakarma Police Station. Further, in the alternative, it was submitted that it contains only projection of the figures and do not suggest that assessee has made any investment or incurred cost to that extent. In the last alternative, it was also submitted that the project report did not pertain to it and merely because the name of the assessee finds place, there is neither signatures of any of the Directors or relatives on these papers nor the date has not been mentioned and even the authenticity of the report is doubtful. However, the assessing officer was not satisfied and dis-satisfied with the explanation offered by the assessee an addition of Rs.36,21,692 was made as per the figures mentioned in the project report.
(3.) On the objection of initiating proceedings under Section 158BD of the Act that the proceedings have wrongly been initiated, the assessing officer held that the proceedings have been validly initiated and accordingly assessment came to be finalised.;