Sri Mahabir Prasad Rungta, Ranchi V. ACWT, Ranchi

CO 2/RAN/2016

• Counselvise Citation: [2016] 123 COUNSELVISE.COM (IT) 2417 (ITAT-RANCHI)
• Duration Of Justice: 9 month(s) 23 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 16-09-2016
• Appeal Filed By: Assessee
• Bench Allotted: Not Allotted
• Assessment Year: 2007-2008
• Appeal Filed On: 23-11-2015
• Court: TRIBUNAL
• Department Lawyers: DEEPAK ROUSHAN SR
• Assessee Lawyers: S K PODDAR; DEVESH PODDAR ADVO
• Keywords: Search and seizure; Document seized; Tax effect; Documents seized
• Section: 143(3); 153A; 234B; 132

Judgement Text

1 ITA NO. 26-27/RAN/2015 & CO NO.02-03/RAN/ 2016 AY 07-08 & 08-09 MAHABIR PRASAD RUNGTA. IN THE INCOME TAX APPELLATE TRIBUNAL: RANCHI BENCH, RANCHI [BEFORE SHRI N. V. VASUDEVAN, JM & SHRI M. BALAGAN ESH, AM] I.T(SS).A NO. 26/RAN/2015 ASSESSMENT YEAR: 2007-08 ASSISTANT COMMISSIONER OF INCOME-TAX VS. SHRI MAHA BIR PRASAD RUNGTA, CENTRAL CIRCLE-1, RANCHI. PUSHPANJALI, BARIATU R OAD, RANCHI, JHARKHAND (PAN: AABCA9521E) (APPELLANT) (RESPONDENT) & C.O. NO. 02/RAN/2016 IN I.T(SS).A NO. 26/RAN/2015 ASSESSMENT YEAR: 2007-08 SHRI MAHABIR PRASAD RUNGTA, VS. ASSTT. COMMISSION ER OF INCOME-TAX CENTRAL CIRCLE-1, RANCHI (CROSS OBJECTOR) (RESPONDENT) & I.T(SS).A NO. 27/RAN/2015 ASSESSMENT YEAR: 2008-09 ASSISTANT COMMISSIONER OF INCOME-TAX VS. SHRI MAHA BIR PRASAD RUNGTA, CENTRAL CIRCLE-1, RANCHI. PUSHPANJALI, BARIATU R OAD, RANCHI, JHARKHAND (PAN: AABCA9521E) (APPELLANT) (RESPONDENT) & C.O. NO. 03/RAN/2016 IN I.T(SS).A NO. 27/RAN/2015 ASSESSMENT YEAR: 2008-09 SHRI MAHABIR PRASAD RUNGTA, VS. ASSTT. COMMISSION ER OF INCOME-TAX CENTRAL CIRCLE-1, RANCHI (CROSS OBJECTOR) (RESPONDENT) DATE OF HEARING: 15.09.2016 DATE OF PRONOUNCEMENT: 16.09.2016 FOR THE REVENUE: SHRI DEEPAK ROUSHAN, SR. STANDING COUNSEL FOR THE ASSESSEE: SHRI S.K.PODDAR & SHRI DEVESH PODDAR, ADVOCATES ORDER PER SHRI M. BALAGANESH, AM: BOTH THESE APPEALS BY REVENUE AND CROSS OBJECTIONS BY ASSESSEE ARE ARISING OUT OF ORDER OF CIT(A)-3, PATNA VIDE APPEAL NO. 184 -185/CIT(A)-3/PAT/2009-10 2 ITA NO. 26-27/RAN/2015 & CO NO.02-03/RAN/ 2016 AY 07-08 & 08-09 MAHABIR PRASAD RUNGTA. DATED 22.05.2015. ASSESSMENTS WAS FRAMED BY DCIT, CENTRAL CIRCLE-1, RANCHI U/S. 153A R.W.S. 143(3) OF THE INCOME-TAX ACT, 1961 (HER EINAFTER REFERRED TO AS THE ACT) FOR AYS 2007-08 AND 2008-09 VIDE HIS SEPARAT E ORDERS DATED 31.12.2009. SINCE ISSUES ARE COMMON AND FACTS ARE IDENTICAL WE DISPOSE OFF BOTH THE APPEALS AND THE CROSS OBJECTION BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. IT (SS) A NO.26/RAN /15 ASST YEAR 2007-08 2. THE ONLY ISSUE TO BE DECIDED IN THE APPEAL OF T HE REVENUE IS AS TO WHETHER THE LD CITA IS JUSTIFIED IN DELETING THE ADDITION IN TH E SUM OF RS. 5,80,000/- IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 2.1. THE LD DR STATED THAT THE TAX EFFECT ON THE D ISPUTED ADDITION IS LESS THAN RS 10 LACS AND ACCORDINGLY AS PER THE RECENT CBDT CIRC ULAR NO. 21/2015 DATED 10.12.15, THE APPEAL OF THE REVENUE DESERVES TO BE DISMISSED. HE ALSO STATED THAT ACCORDINGLY THE CROSS OBJECTION OF THE ASSESSEE ALS O WOULD BECOME INFRUCTUOUS. IN RESPONSE TO THIS, THE LD AR ARGUED THE GROUNDS RAIS ED IN HIS CROSS OBJECTIONS ON THE ISSUE OF GRANTING CREDIT OF CASH SEIZED IN THE SUM OF RS. 17,40,000/- ON THE DATE OF SEARCH IE ON 7.9.2007 AND ACCORDINGLY PRAYED FOR RE WORKING OF INTEREST U/S 234B OF THE ACT AFTER GIVING CREDIT TO THE SAID CASH SEIZED AS TAX PAID ON 31.10.2007 (BEING THE DATE OF FILING THE RETURN). 2.2. WE HAVE HEARD THE RIVAL SUBMISSIONS. IT IS S EEN FROM THE PERUSAL OF THE RECORDS AND AS CONCEDED BY THE LD DR , THAT THE TOT AL TAX EFFECT ON THE ADDITION DISPUTED BEFORE US IS ADMITTEDLY BELOW THE TAX EFFE CT LIMIT PRESCRIBED BY CBDT VIDE CIRCULAR NO. 21 / 2015 DATED 10.12.2015 FOR PR EFERRING APPEALS BEFORE TRIBUNAL BY THE REVENUE. IT WILL BE PERTINENT TO REPRODUC E THE RELEVANT PORTION OF THE SAID CIRCULAR NO. 21 / 2015 DATED 10.12.2015 :- 3. HENCEFORTH, APPEALS / SLPS SHALL NOT BE FILED IN CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMITS GIVEN HEREUNDER:- 3 ITA NO. 26-27/RAN/2015 & CO NO.02-03/RAN/ 2016 AY 07-08 & 08-09 MAHABIR PRASAD RUNGTA. S.NO. APPEALS IN INCOME TAX MATTERS MONETARY LIMIT (IN RS) 1 BEFORE APPELLATE TRIBUNAL 10,00,000/- 2 BEFORE HIGH COURT 20,00,000/- 3 BEFORE SUPREME COURT 25,00,000/- 2.3. THE LD DR WAS NOT ABLE TO POINT OUT THAT THE C ASE FALLS UNDER ANY OF THE EXCEPTIONS CONTEMPLATED IN THE SAID CIRCULAR NO. 21/2015 DATED 10.12.2015. WE ALSO FIND THAT THE CIRCULAR MAKES IT VERY CLEAR THAT THE REVISED MONET ARY LIMITS SHALL APPLY RETROSPECTIVELY TO PENDING APPEALS ALSO. WE FIND THAT THE CIRCULAR IS BINDING ON THE TAX AUTHORITIES. THIS POSITION HAS BEEN CONFIRMED BY THE HONBLE APEX COURT IN THE CASE OF COMMISSIONER OF CUSTOMS VS INDIAN OIL CORPORATION LTD REPORTED IN 2 67 ITR 272 (SC) WHEREIN THEIR LORDSHIPS EXAMINED THE EARLIER DECISIONS OF THE APE X COURT WITH REGARD TO BINDING NATURE OF THE CIRCULARS AND LAID DOWN THAT WHEN A CIRCULAR ISSUED BY THE BOARD REMAINS IN OPERATION THEN THE REVENUE IS BOUND BY IT AND CANNO T BE ALLOWED TO PLEAD THAT IT IS NOT VALID OR THAT IT IS CONTRARY TO THE TERMS OF THE ST ATUTE. HENCE WE HOLD THAT THE APPEAL(S) OF THE REVENUE DESERVE TO BE DISMISSED IN TERMS OF LOW TAX EFFECT VIDE CIRCULAR NO.21 / 2015 DATED 10.12.2015. ACCORDINGLY, THIS BEING A LOW TA X EFFECT CASE, WE DISMISS THE APPEAL OF THE REVENUE IN LIMINE , AS UNADMITTED, WITHOUT GOIN G INTO THE MERITS OF THE CASE. IN THE RESULT, THIS APPEAL OF THE REVENUE IS DISMI SSED INLIMINE. 3. IN VIEW OF THE REVENUE APPEAL BEING DISMISSED AS NOT MAINTAINABLE, THE CROSS OBJECTION OF THE ASSESSEE IS ALSO TO BE TREATED AS DISMISSED AS IT BECOMES INFRUCTUOUS. HENCE, THE ARGUMENT ADVANCED BY THE L D AR ON THE GRANTING OF CREDIT OF CASH SEIZED IN THE SUM OF RS. 17,40,000/- WITH E FFECT FROM 31.10.2007 IN THE CONTEXT OF LEVY OF INTEREST U/S. 234B OF THE ACT, N EED NOT BE GONE INTO. 4. IN THE RESULT, THE APPEAL OF THE REVENUE IN IT (SS) A 26/RAN/15 FOR ASST YEAR 2007-08 IS DISMISSED AND CROSS OBJECTION OF THE ASS ESSEE IN CO 02/RAN/16 IS DISMISSED AS INFRUCTUOUS. 4 ITA NO. 26-27/RAN/2015 & CO NO.02-03/RAN/ 2016 AY 07-08 & 08-09 MAHABIR PRASAD RUNGTA. IT(SS) A NO. 27/RAN/15 ASST YEAR 2008-09 5. THE ONLY ISSUE TO BE DECIDED IN THE APPEAL OF TH E REVENUE IS AS TO WHETHER THE LD CITA IS JUSTIFIED IN DELETING THE ADDITION IN TH E SUM OF RS. 67,50,000/- IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 5.1. THE BRIEF FACTS OF THIS ISSUE IS THAT PURSUAN T TO THE SEARCH AND SEIZURE OPERATION U/S 132 OF THE ACT WAS CONDUCTED IN THE R ESIDENTIAL AND BUSINESS PREMISES OF RUNGTA GROUP OF CASES ON 7.9.2007 , NOTICE U/S 1 53A OF THE ACT WAS ISSUED ON THE ASSESSEE. IN RESPONSE THERETO, THE ASSESSEE FI LED RETURN OF INCOME FOR RS. 2,17,48,100/- WHICH INCLUDED UNDISCLOSED INCOME OF RS. 2,08,14,997/-. THE LD AO EXAMINED THE BOOKS OF ACCOUNTS OF THE ASSESSEE WITH REFERENCE TO SEIZED DOCUMENTS / PAPERS. HE OBSERVED FROM PAGE 19 OF IMPOUNDED D OCUMENT MARKED AS A-15 WHICH MENTIONED AN ENTRY FUND AT PLEASURE 67.50 LACS DATED 3.9.2007. THE LD AO OBSERVED THAT THIS PAGE WAS DULY SIGNED AND THE SAM E WAS IMPOUNDED FROM THE OFFICE PREMISES OF M/S RUNGTA IRRIGATION LTD AT 564 8, RAEPURA, KAROL BAGH, NEW DELHI DURING THE SURVEY OPERATION. HE STATED THAT THE AFFAIRS OF M/S RUNGTA IRRIGATION LTD WAS MANAGED AND CONTROLLED BY SHRI M .P.RUNGTA (ASSESSEE HEREIN). THE LD AO FURTHER OBSERVED THAT PAGES 33 TO 41 OF I MPOUNDED DOCUMENT MARKED AS A-17 WERE BLANK SIGNED CHEQUES ISSUED BY DIRECTOR OF M/S PLEASURE INVESTMENT (P) LTD. THESE DOCUMENTS WERE ALSO SEIZED FROM THE OFF ICE PREMISES OF M/S RUNGTA IRRIGATION LTD AT 5648, RAEPURA, KAROL BAGH, NEW DE LHI. 5.2. THE ASSESSEE WAS ASKED TO EXPLAIN THE NATURE OF THESE ENTRIES MENTIONED IN IMPOUNDED DOCUMENT A-15 AND CIRCUMSTANCES UNDER WHI CH THE BLANK SIGNED CHEQUES SIGNED BY M/S PLEASURE INVESTMENT (P) LTD W ERE LYING IN THE OFFICE OF M/S RUNGTA IRRIGATION LTD. THE ASSESSEE REPLIED THAT N OTING IN IMPOUNDED DOCUMENT A- 15 WAS ABOUT CHEQUE OF RS. 67.50 LACS WHICH WAS REC EIVED FROM M/S PLEASURE INVESTMENT (P) LTD FOR DEPOSITING IT INTO THE COMPA NY ACCOUNTS. AS REGARDS BLANK SIGNED CHEQUES, HE SUBMITTED THAT THEY WERE ISSUED BY M/S PLEASURE INVESTMENT (P) 5 ITA NO. 26-27/RAN/2015 & CO NO.02-03/RAN/ 2016 AY 07-08 & 08-09 MAHABIR PRASAD RUNGTA. LTD AND THE LEAFS ARE OF ANDHRA BANK, KOLKATA. HE FURTHER STATED THAT M/S PLEASURE INVESTMENT (P) LTD OPENED A BRANCH OFFICE AT DELHI TO DO BUSINESS OF FINANCE AND INVESTMENT AND HENCE FOR THE SAKE OF OPERATIONAL CO NVENIENCE, SIGNED CHEQUES WERE KEPT AT DELHI. 5.3. THE LD AO OBSERVED THAT THE SUBMISSION OF THE ASSESSEE WAS NOT SATISFACTORY AND PLAUSIBLE ESPECIALLY WHEN NO EVIDENCE IN SUPPOR T OF HIS CONTENTION WAS PRODUCED. HE OBSERVED THAT THE AFFAIRS OF M/S RAM GARH SPONGE IRON PVT LTD (RSIPL) WAS MANAGED AND CONTROLLED BY THE ASSESSEE. M/S PLEASURE INVESTMENT (P) LTD IS A SHAREHOLDER IN M/S RSIPL. THE LD AO OBSER VED AS UNDER:- 5.4.M/S. PLEASURE INVESTMENT PVT. LTD. HAS INV ESTED RS.68,30,000/- IN SHARES OF M/S. RAMGARH SPONGE IRON PVT. LTD. DURING THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR 2008-09. 5.5. PAGE 19 OF IMPOUNDED DOCUMENT/PAPERS A-15 D ENOTES FUND OF RS.67,50,000/- OF SHRI MAHABIR PRASAD RUNGTA ON 03.09.2007 IN M/S. PLEASURE INVESTMENT PVT. LTD. THIS SAFELY LEADS TO THE CONCLUSION THAT SHRI MAHAB IR PRASAD RUNGTA HAS ROTATED HIS OWN UNDISCLOSED MONEY TO THE TUNE OF RS.67,50,000/ - IN M/S. RAMGARH SPONGE IRON PVT. LTD. THROUGH M/S. PLEASURE INVESTMENT PVT. LTD . AND THIS CONCLUSION GETS SOLID STRENGTH FROM THE FACT THAT NINE LEAFS OF BLANK SIG NED CHEQUES IS FOUND AND IMPOUNDED FROM THE OFFICE PREMISES M/S. RUNGTA IRRI GATION LTD., THE AFFAIRS OF WHICH ARE MANAGED AND CONTROLLED BY SHRI MAHABIR PRASAD R UNGTA. SHRI MAHABIR PRASAD RUNGTA, PERHAPS, WOULD HAVE TAKEN THESE SIGNED BLAN K LEAFS TO SAFEGUARD HIS UNDISCLOSED MONEY HANDED OVER TO M/S. PLEASURE INV ESTMENT PVT. LTD. 5.6. FOR THE ASSESSMENT YEAR 2008-09, THE ASSESSEE HAS OFFERED UNDISCLOSED INCOME OF RS.2,08,14,997/-. HE OBSERVED THAT RS. 67,50,000/- DISCUSSED IN PARA 5.5 OF HIS ORDER DOES NOT FORM PART OF DISCLOSURE BY THE ASSESSEE AND ACCORDINGLY BROUGHT THE SAME TO TAX AS UNDISCLOSED INCOME OF THE ASSESSEE. 5.4. THE LD CITA DELETED THE ADDITION BY MAKING T HE FOLLOWING OBSERVATIONS :- AFTER GOING THROUGH THE FINDING OF THE AO IN THE A SSESSMENT ORDER, REMAND REPORT, (AO REITERATED AND JUSTIFIED ADDITION OF RS.67.50 L ACS MADE BY THE AO IN THE ORIGINAL ASSESSMENT ON THE GROUND THAT THE AVAILABI LITY OF BLANK SIGNED CHEQUE AT THE PREMISES OF RUNGTA IRRIGATION LTD. SUGGESTED TH AT UNDISCLOSED FUND WAS GIVEN BY THE ASSESSEE TO M/S. PLEASURE INVESTMENT (P) LTD . AND BLANK CHEQUE WAS TAKEN AS SAFEGUARD OF FUND INVESTED) OF THE AO DURING APPELL ATE PROCEEDINGS AND SUBMISSION OF THE APPELLANT, I FIND THAT THE APPELLANT COULD N OT EXPLAIN PROPERLY THE AVAILABILITY OF BLANK SIGNED CHEQUES OF PLEASURE INVESTMENT LTD. WHICH WAS MAIN BASIS FOR TREATING THE AMOUNT OF RS.67.50 LACS AS UNDISCLOSED INCOME IN THE HANDS OF THE 6 ITA NO. 26-27/RAN/2015 & CO NO.02-03/RAN/ 2016 AY 07-08 & 08-09 MAHABIR PRASAD RUNGTA. APPELLANT. HOWEVER THE CONTENTION OF APPELLANT THA T THE UNDISCLOSED INCOME DECLARED FOR THE AY 2007-08 RS.1,37,03,107/- AND TH E UNDISCLOSED INCOME OF RS.2,08,14,997/- DISCLOSED FOR THE CURRENT ASSTT. Y EAR ARE MORE THAN SUFFICIENT TO MEET THE SO CALLED UNDISCLOSED AMOUNT OF THE RS.67. 50 LACS INVESTED IN M/S. PLEASURE INVESTMENT (P) LTD. THERE IS FORCE IN THE CONTENTION OF THE APPELLANT AS THE UNDISCLOSED INCOME DECLARED FOR AY 2007-08 AS W ELL AS FOR THE CURRENT ASSESSMENT YEAR, THE UNDISCLOSED FUND AVAILABLE WIT H THE APPELLANT HAS TO BE GIVEN CREDIT FOR ANY UNDISCLOSED INVESTMENT DURING THESE ASSESSMENT YEARS. THEREFORE, THE ADDITION OF RS.67.50 LACS IS HEREBY DELETED. 5.5. THE LD DR ARGUED THAT THE ASSESSEE COULD NOT PROPERLY EXPLAIN THE EXISTENCE OF BLANK SIGNED CHEQUE LEAVES IN THE BUSINESS PREMI SES OF RUNGTA IRRIGATION LTD, AN ENTITY, CONTROLLED BY THE ASSESSEE. THERE WAS NO N EXUS OR EVEN REMOTE NEXUS THAT HAS BEEN BROUGHT ON RECORD BY THE LD CITA TO JUST IFY AVAILABILITY OF FUNDS IN THE HANDS OF THE ASSESSEE TO CONFER THE BENEFIT OF TELE SCOPING. ADDITION WAS MADE ON THE BASIS OF SEIZED DOCUMENTS A-15 & A-17 AND ACCOR DINGLY VEHEMENTLY RELIED ON THE ORDER OF THE LD AO. 5.6. IN RESPONSE TO THIS, THE LD AR ARGUED THAT I T IS NOT IN DISPUTE THAT BOTH THE ENTITIES I.E RAMGARH SPONGE IRON PVT LTD (RSIPL) AN D PLEASURE INVESTMENT (P) LTD ARE ENTITIES IN WHICH ASSESSEE IS HAVING MANAGERIAL CONTROL. HAVING ESTABLISHED THIS FACT, IT WOULD BE HIGHLY ILLOGICAL TO STATE THAT TH E ASSESSEE HAD RECEIVED BLANK SIGNED CHEQUES AS SECURITY FOR GIVING HIS UNDISCLOSED FUND TO PLEASURE INVESTMENT (P) LTD FOR ONWARD TRANSMISSION TO RSIPL AS SHARE CAPITAL. HE ARGUED THAT NO MATCHING ASSETS WERE FOUND BY THE SEARCH TEAM EXCEPT CASH OF RS. 17,40,000/- ON 7.9.2007. HENCE THE DISCLOSURE MADE BY THE ASSESSEE TOWARDS G P ON UNDISCLOSED SALES , MISCELLANEOUS INCOME, CASH RECEIPTS ON SALE OF KALK AJI FLATS ETC ARE SUFFICIENT SOURCES TO EXPLAIN THE ALLEGED INVESTMENT MADE IN S HARE CAPITAL AND HENCE THE LD CITA HAD RIGHTLY GRANTED THE TELESCOPING BENEFIT. H E ACCORDINGLY VEHEMENTLY RELIED ON THE ORDER OF THE LD CITA TO THAT EFFECT. HE ARG UED FURTHER THAT THOUGH THE SUFFICIENT BANK BALANCES WERE AVAILABLE WITH PLEASU RE INVESTMENT (P) LTD ON 3.9.2007 TO THE TUNE OF RS. 67.55 LACS, WHICH WOULD CLEARLY PROVE THE SOURCE FOR MAKING THE INVESTMENT IN RSIPL BY THEM TO THE TUNE OF RS. 67.50 LACS. THOUGH THIS FACT WAS BROUGHT TO THE NOTICE OF THE LD CITA DURIN G APPELLATE PROCEEDINGS, THE LD CITA THOUGHT IT CONVENIENT TO GRANT RELIEF ON THE B ASIS OF TELESCOPING PRINCIPLE AND 7 ITA NO. 26-27/RAN/2015 & CO NO.02-03/RAN/ 2016 AY 07-08 & 08-09 MAHABIR PRASAD RUNGTA. DID NOT GIVE ANY FINDING ON THE AVAILABILITY OF OWN FUNDS WITH PLEASURE INVESTMENT (P) LTD. HENCE THE ASSESSEE IS FORCED TO COME ON C ROSS OBJECTIONS BEFORE THIS TRIBUNAL. 5.7. WE HAVE HEARD THE RIVAL SUBMISSIONS. THE FA CTS STATED HEREINABOVE ARE NOT REITERATED FOR THE SAKE OF BREVITY. IT IS NOT IN D ISPUTE THAT PLEASURE INVESTMENT (P) LTD IS ALREADY AN EXISTING SHAREHOLDER IN M/S RSIP L WHICH FACT IS ALSO MENTIONED BY THE LD AO IN HIS ASSESSMENT ORDER. IT WOULD BE HIGHLY ILLOGICAL TO TREAT THE INVESTMENT MADE BY PLEASURE INVESTMENT (P) LTD IN R SIPL IN ASST YEAR 2008-09 ALONE AS UNDISCLOSED INCOME OF ASSESSEE BEING ROUT ED THROUGH PLEASURE INVESTMENT (P) LTD IN M/S RSIPL. IN ANY CASE, THE AMOUNT IS F OUND CREDITED IN THE BOOKS OF M/S RSIPL , WHICH IS ONLY AN ENTITY CONTROLLED BY T HE ASSESSEE. WE FIND THAT THE ASSESSEE HAD STATED BEFORE THE LD CITA THAT M/S PLE ASURE INVESTMENT (P) LTD ON 3.9.2007 HAD SUFFICIENT BANK BALANCE TO THE TUNE OF RS. 67.55 LACS IN ORDER TO MAKE INVESTMENT IN SHARES OF M/S RSIPL TO THE TUNE OF RS . 67.50 LACS. HENCE THE SOURCE OF PLEASURE INVESTMENT (P) LTD FOR MAKING INVESTMEN T IN SHARES OF M/S RSIPL APPEARS TO BE PROVED BEYOND DOUBT. BUT NO EVIDENCE IN THIS REGARD IS FURNISHED BEFORE US BY THE LD AR EXCEPT MAKING AN ORAL STATEM ENT IN THIS REGARD. ACCORDINGLY, THE GROUNDS 3 TO 5 RAISED IN THE CROSS OBJECTIONS OF THE ASSESSEE FOR THE ASST YEAR 2008-09 ARE DISMISSED. 5.7.1. WE FIND THAT EXCEPT THE PRESENCE OF BLANK SIGNED CHEQUE LEAVES, THERE IS NO OTHER EVIDENCE BROUGHT ON RECORD BY THE LD AO TO PR OVE THAT THE ASSESSEE HAD ROUTED HIS UNDISCLOSED FUNDS THROUGH PLEASURE INVESTMENT ( P) LTD FOR MAKING INVESTMENT IN SHARE CAPITAL OF RSIPL. WE HOLD THAT JUST BECAUS E BOTH THE ENTITIES VIZ. PLEASURE INVESTMENT (P) LTD AND M/S RSIPL WERE CONTROLLED BY THE ASSESSEE HEREIN, THE ASSESSEE CANNOT BE INVITED WITH THE ADDITION OF RS. 67.50 LACS MERELY BASED ON THE PRESENCE OF BLANK SIGNED CHEQUES. WE FIND LOT OF F ORCE IN THE ARGUMENT OF THE LD AR THAT THERE IS NO NEED TO OBTAIN SECURITY IN THE FORM OF BLANK SIGNED CHEQUES , EVEN ASSUMING, THAT ASSESSEE HAD ROUTED HIS UNDISCL OSED FUND THROUGH PLEASURE INVESTMENT (P) LTD , AS IT HAS ALREADY BEEN ADMITTE D THAT THE SAID COMPANY BELONGS 8 ITA NO. 26-27/RAN/2015 & CO NO.02-03/RAN/ 2016 AY 07-08 & 08-09 MAHABIR PRASAD RUNGTA. TO THE SAME GROUP OF THE ASSESSEE. IT IS APPRECIA BLE THAT NO PERSON WOULD OBTAIN SECURITY IN THE FORM OF BLANK CHEQUE LEAVES DULY SI GNED WHEN TRANSACTIONS HAPPEN BETWEEN GROUP COMPANY. ANYWAY THESE FACTS ARE NOT RELEVANT FOR THE DISPOSAL OF THE ISSUE BEFORE US, AS THE LD CITA HAD GRANTED RE LIEF TO THE ASSESSEE ON THE PRINCIPLE OF TELESCOPING. 5.7.2. NOW THE SHORT POINT THAT ARISES FOR OUR CON SIDERATION IS AS TO WHETHER THE TELESCOPING BENEFIT GIVEN BY THE LD CITA WOULD BE J USTIFIED IN THE FACTS AND CIRCUMSTANCES OF THE CASE OR NOT. IT IS NOT IN DIS PUTE THAT THE ASSESSEE HAD INDEED OFFERED UNDISCLOSED INCOME OF RS. 1,37,03,107/- FOR THE ASST YEAR 2007-08. FOR THE ASST YEAR 2008-09, WE FIND THAT THE ASSESSEE HAD OF FERED UNDISCLOSED INCOME OF RS. 2,08,14,997/- AS BELOW:- GROSS PROFIT ON UNDISCLOSED SALES RS. 1,83,14,99 7/- MISCELLANEOUS INCOME RS. 25,00,000/- ----------------------- RS. 2,08,14,997/- ----------------------- IT IS NOT THE CASE OF THE REVENUE THAT THE UNDISCLO SED INCOME OFFERED ABOVE IS FOUND / MATCHED WITH CERTAIN ASSETS FOUND IN THE COURSE OF SEARCH. IF IT IS SO, THE CASE OF THE REVENUE GETS STRENGTHENED THAT OBVIOUSLY THE AFORES AID UNDISCLOSED INCOME WOULD NOT BE AVAILABLE WITH THE ASSESSEE FOR MAKING THE I NVESTMENT OF RS. 67.50 LACS. BUT THAT IS NOT THE CASE OF THE REVENUE HERE. EXCEPT T HE CASH SEIZURE OF RS. 17,40,000/-, THE LD AR STATES THAT NO OTHER ASSETS WERE FOUND. EVEN THE JEWELLERIES FOUND IN THE COURSE OF SEARCH WERE EXPLAINED BY THE ASSESSEE AS ALREADY DECLARED UNDER VDIS 1997. WE ALSO FIND THAT NO OTHER ADDITION HAS BEEN MADE BY THE LD AO IN THE SEARCH ASSESSMENTS FRAMED ON THE ASSESSEE FOR BOTH THE ASS T YEARS 2007-08 AND 2008-09. HENCE THE AFORESAID UNDISCLOSED INCOME OFFERED BY T HE ASSESSEE WOULD SUFFICIENTLY EXPLAIN THE SOURCE FOR INVESTMENT IN SHARES, IF ANY , IN M/S RSIPL, TO THE TUNE OF RS. 67,50,000/- BEING THE VALUE OF BLANK SIGNED CHEQUES , AND HENCE THE ORDER OF THE LD CITA DOES NOT CALL FOR ANY INTERFERENCE. ACCORDING LY, WE DISMISS THE GROUND RAISED BY THE REVENUE. 9 ITA NO. 26-27/RAN/2015 & CO NO.02-03/RAN/ 2016 AY 07-08 & 08-09 MAHABIR PRASAD RUNGTA. 6. THE OTHER GROUNDS RAISED BY THE ASSESSEE IN HI S CROSS OBJECTIONS I.E. GROUND NOS. 1 & 2 ARE ONLY SUPPORTIVE OF THE ORDER OF THE LD CITA AND HENCE THE SAME ARE DISMISSED AS INFRUCTUOUS. 7. WITH REGARD TO GROUND NO. 6 RAISED BY THE ASSE SSEE IN HIS CROSS OBJECTION, WITH REGARD TO LEVY OF INTEREST U/S 234A AND 234B O F THE ACT WITHOUT GIVING CREDIT FOR CASH SEIZED IN THE SUM OF RS. 17,40,000/- ON 7. 9.2007 (I.E. THE DATE OF SEARCH) , WE FIND THAT THE LD AR PLACED RELIANCE IN THIS REGA RD ON THE DECISION OF THE HONBLE JHARKHAND HIGH COURT IN THE CASE OF MAHESH CHOUDHAR Y VS CIT, BIHAR IN TAX CASE NO. 11 OF 2001 DATED 2.11.2012 . HE STATED THAT THE SEIZED CASH OF RS. 17,40,000/ - WAS GIVEN CREDIT / ADJUSTED TOWARDS DEMAND BY THE I NCOME TAX DEPARTMENT ON 29.3.2010. HE ARGUED THAT NO INTEREST U/S 234A A ND 234B OF THE ACT SHOULD BE CHARGED UPTO 29.3.2010 ON THE TAX COMPONENT EQUIVAL ENT TO RS. 17,40,000/- AS THERE WAS NO FAULT THAT COULD BE ATTRIBUTED TO THE ASSESS EE FOR THE SAME FOR THE DELAYED ADJUSTMENT OF SEIZED CASH. IN RESPONSE TO THIS, T HE LD DR VEHEMENTLY RELIED ON THE ORDER OF THE LD AO. 7.1. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND LOT OF FORCE IN THE ARGUMENT ADVANCED BY THE LD AR WITH REGARD TO THIS ISSUE. W E FIND THAT THE HONBLE JHARKHAND HIGH COURT IN THE CASE STATED SUPRA HAD D ULY DEALT WITH THIS ISSUE AND HELD IN FAVOUR OF THE ASSESSEE. THE RELEVANT OPERA TIVE PORTION OF THE JUDGEMENT IS REPRODUCED HEREUNDER:- 6. WE CONSIDERED THE SUBMISSIONS OF LEARNED COUNSE L FOR THE PARTIES AND PERUSED THE FACTS OF THE CASE AS WELL AS RELEVANT PROVISION S OF LAW. IT APPEARS FROM SECTION 132(5) THAT WHERE ANY MONEY IS SEIZED UNDER SUB-SE CTION (1) OR SUB-SECTION (1A) OF SECTION 132, THE INCOME TAX OFFICER IS REQUIRED TO GIVE REASONABLE OPPORTUNITY OF HEARING TO THE PERSONS CONCERNED AND AS PER SUB-CLA USE (I) FOR ESTIMATING THE UNDISCLOSED INCOME IN A SUMMARY MANNER TO THE BEST OF HIS JUDGMENT ON THE BASIS OF SUCH MATERIALS AS ARE AVAILABLE WITH HIM AND IS RE QUIRED TO CALCULATE TAX ON SUCH INCOME, AS PROVIDED IN SUB-CLAUSE (II) OF SUB-SECTI ON (5) OF SECTION 132 OF ACT AND THEN DETERMINE THE AMOUNT OF INTEREST PAYABLE AS PR OVIDED BY SUB-CLAUSE(IIA) AS WELL AS PENALTY IMPOSABLE UNDER THE INCOME TAX ACT, AS I F THE ORDER HAD BEEN THE ORDER OF REGULAR ASSESSMENT AND SPECIFYING THE AMOUNT THA T WILL BE REQUIRED TO SATISFY ANY EXISTING LIABILITY UNDER THE INCOME TAX ACT. AS PE R SECTION 132B (AS WAS APPLICABLE AT RELEVANT TIME) THE ASSETS RETAINED UNDER SUB-SEC TION (5) OF SECTION 132 IS REQUIRED TO BE DEALT WITH AS CLAUSES (I) TO (III) AND IS REQ UIRED TO BE ADJUSTED AS PER SUB- SECTION 4 OF SECTION 132B. THE ASSETS/MONEY RETAIN ED UNDER SUB-SECTION (5) OF SECTION 132, AS PER CLAUSE (II) ARE REQUIRED TO BE ADJUSTED IN DISCHARGE OF THE 10 ITA NO. 26-27/RAN/2015 & CO NO.02-03/RAN/ 2016 AY 07-08 & 08-09 MAHABIR PRASAD RUNGTA. LIABILITIES REFERRED TO IN CLAUSE (I) OF SECTION 13 2B AND ASSESSEE SHALL BE DISCHARGED OF SUCH LIABILITY TO THE EXTENT OF THE MONEY SO APP LIED. AS PER CLAUSE (III) OF SUB- SECTION (1) OF SECTION 132B, EVEN OTHER ASSETS OTHE R THAN THE MONEY RETAINED BY THE ASSESSING OFFICER CAN BE SOLD OUT AND PROCEED CAN B E DISCHARGED AGAINST THE LIABILITIES OF THE ASSESSEE. AS PER SUB-SECTION 4(A ) OF SECTION 132B, THE CENTRAL GOVERNMENT IS LIABLE TO PAY SIMPLE INTEREST AT THE RATE OF FIFTEEN PER CENT PER ANNUM ON THE AMOUNT BY WHICH THE AGGREGATE OF MONEY RETAI NED UNDER SECTION132 AND OF THE PROCEEDS, IF ANY, OF THE ASSETS SOLD TOWARDS TH E DISCHARGE OF THE EXISTING LIABILITY REFERRED TO IN CLAUSE (III) OF SUB-SECTION (5) OF T HAT SECTION EXCEEDS THE AGGREGATE OF THE AMOUNTS REQUIRED TO MEET THE LIABILITIES REFERR ED TO IN CLAUSE (I) OF SUB-SECTION (1) OF SECTION 132B. THEREFORE, THE SCHEME OF THE ACT CLEARLY SUGGESTS T HAT THE MONEY SEIZED DURING THE COURSE OF THE SEARCH IS RET AINED BY THE REVENUE FOR THE LIABILITY OF THE ASSESSEE WHICH MAY BE DETERMINED F INALLY BY THE ASSESSMENT OR RE- ASSESSMENT OR BY FINAL ORDER OF ASSESSMENT OR RE-AS SESSMENT, THE EXISTING LIABILITY OF A PREVIOUS TIME IS ONLY QUANTIFIED AND NOT A CRE ATION OF LIABILITY ON THE DATE OF PASSING OF THE ASSESSMENT ORDER. THEREFORE, THE RET AINED AMOUNT ALSO REQUIRED TO BE GIVEN ADJUSTMENT AGAINST THE THEN LIABILITY OF T HE ASSESSEE, WHICH HAS BEEN QUANTIFIED SUBSEQUENTLY BY THE ORDER OF ASSESSMENT AND RE-ASSESSMENT. THIS FACT FINDS SUPPORT OF SUB-SECTION (4) OF SECTION 132B, W HICH FOR EXCESS AMOUNT RETAINED BY THE REVENUE, THE CENTRAL GOVERNMENT SHA LL PAY THE INTEREST. 7. CONSEQUENTLY, THE REFERENCE IS ANSWERED AND IT I S HELD THAT TRIBUNAL WAS NOT JUSTIFIED IN HOLDING THAT THE ASSESSEE WAS LIABLE F OR INTEREST U/S. 139(8)/217 FOR THE ASSESSMENT YEAR 1988-1989 AND INTEREST/S. 234A & 23 4B FOR THE ASSESSMENT YEAR 1989-1990 UP TO 26.03.91. RESPECTFULLY FOLLOWING THE AFORESAID DECISION OF HO NBLE JHARKHAND HIGH COURT, WE ALLOW THE GROUND NO. 6 OF CROSS OBJECTION OF THE AS SESSEE. 8. THE GROUND NO. 7 RAISED IN THE CROSS OBJECTION OF THE ASSESSEE FOR THE ASST YEAR 2008-09 IS GENERAL IN NATURE AND DOES NOT REQUIRE A NY ADJUDICATION. 9. IN THE RESULT, THE APPEALS OF THE REVENUE IN IT (SS) A 26 & 27 /RAN/15 ARE DISMISSED AND CROSS OBJECTION OF THE ASSESSEE IN CO 02 /RAN/16 IS DISMISSED AND CO 03/RAN/16 IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16.09.2016 SD/- SD/- (N. V. VASUDEVAN) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTAN T MEMBER DATED :16TH SEPTEMBER, 2016 JD.(SR.P.S.) 11 ITA NO. 26-27/RAN/2015 & CO NO.02-03/RAN/ 2016 AY 07-08 & 08-09 MAHABIR PRASAD RUNGTA. COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT - ACIT, CENTRAL CIRCLE-1, RANCHI 2 RESPONDENT - SHRI MAHABIR PRASAD RUNGTA, RANCH I 3 . THE CIT(A), 4. 5. CIT DR, ITAT, RANCHI / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .