M/S VIJAY SOLVEX LTD., Alwar V. ACIT, Alwar

CO 45/JPR/2012

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 3721 (ITAT-JAIPUR)
• Duration Of Justice: 5 year(s) 9 month(s) 22 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 03-04-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 11-06-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NEENA JEPH JCIT DHK
• Assessee Lawyers: S L PODDAR; ISHA KANUNGO S
• Keywords: Search and seizure; Opportunity of being heard; Principle of natural justice; Block assessment
• Section: 132; 144

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKWO] U;KF;D LNL; ,O A JH HKKXPUN KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, A M VK;DJ VIHY LA- @ ITA NO. 377/JP/2015 FU/KZKJ.K O'K Z @ ASSESSMENT YEARS : 1995-96. SHRI KAILASH CHAND DANGAYACH, D-49, HATHI BABU KA BAGH, BANI PARK, JAIPUR. CUKE VS. THE INCOME - TAX OFFICER, WARD 3(2), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. ADOPD 5054 A VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI S.L. PODDAR & MS ISHA KANUNGO (ADVOCATES ) JKTLO DH VKSJ LS@ REVENUE BY : SMT. NEENA JEPH (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 19.02.2018 ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 19/03/2018. VKNS'K@ ORDER PER SHRI VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 27.03.2015 OF LD. CIT (A)-I, JAIPUR FOR THE ASSESSMENT YEAR 1995- 96. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT (A) HAS ERRED IN UPHOLDING THE ACTION OF THE LE ARNED AO IN GIVING THE FINDING THAT THE AMOUNT OF RS. 3,52,123/ - WAS NOT DECLARED BY SHRI AMIT DANGAYACH INSPITE OF VITAL EV IDENCES ON RECORD. 2 ITA NO. 377/JP/2015 KAILASH CHAND DANGAYACH, JAIPUR. 2. THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CA SE THE LEARNED ASSESSING OFFICER/LEARNED CIT (A) HAS ERRED IN ASSE SSING THE TOTAL INCOME OF THE ASSESSEE AT RS. 14,89,910/- WIT HOUT GIVING THE EFFECTS OF EARLIER ORDER. 3. THE ASSESSEE CRAVES YOUR INDULGENCE TO ADD, AMEN D OR ALTER ALL OR ANY GROUNDS OF APPEAL BEFORE OR AT THE TIME OF H EARING. 2. THE ONLY ISSUE ARISES IN THIS APPEAL OF THE ASSE SSEE IS REGARDING AN ADDITION OF RS. 3,52,123/- WAS MADE ON ACCOUNT OF DEPOSITS IN T HE BANK ACCOUNT. A SEARCH AND SEIZURE OPERATION UNDER SECTION 132 WAS CARRIED OUT ON 30 TH DECEMBER, 1994. THE ORIGINAL ASSESSMENT WAS FRAMED UNDER SECTION 144 OF THE IT ACT ON 26.03.1998 WHEREIN THE AO MADE VARIOUS ADDITIONS INCLUDING AN ADDITION OF RS. 5,00,000/- ON ACCOUNT OF DEPOSITS IN VARIOUS BANK ACCOUNTS IN THE NAMES OF RACHNA DANGAYACH, AKSHAY DANGAYACH AND AMIT DANGAYACH. ON APPEAL, TH E LD. CIT (A) VIDE ORDER DATED 23 RD FEBRUARY, 1999 SET ASIDE THE MATTER ISSUED TO THE RECORD OF THE AO. THEREAFTER THE PROCEEDINGS WERE AGAIN CARRIED TO TH IS TRIBUNAL AND THE TRIBUNAL VIDE ORDER DATED 28 TH SEPTEMBER, 2007 SET ASIDE THE MATTER AGAIN TO THE RECORD OF THE AO. THE PRESENT APPEAL IS ARISING FROM THE SECOND S ET ASIDE ORDER PASSED BY THIS TRIBUNAL. 3. BEFORE US, THE LD. A/R OF THE ASSESSEE HAS POINT ED OUT THAT IN THE ORIGINAL PROCEEDINGS THE MATTER WAS SET ASIDE BY THE LD. CIT (A) TO THE RECORD OF THE AO. HOWEVER, ON FURTHER APPEAL, THIS TRIBUNAL VIDE ORDE R DATED 22 ND SEPTEMBER, 2006 IN ITA NO. 236/JP/1999 DELETED THE ADDITION MADE BY TH E AO ON ACCOUNT OF DEPOSITS IN THE BANK ACCOUNT. THEREFORE IN THE FIRST ROUND OF A PPEAL THE SAID ADDITION WAS DELETED BY THIS TRIBUNAL. HOWEVER, IN THE MEANTIME THE AO AGAIN PASSED AN ORDER AS PER DIRECTIONS OF THE LD. CIT (A) SETTING ASIDE THE ISSUE AND, THEREFORE, THE AO IN THE 3 ITA NO. 377/JP/2015 KAILASH CHAND DANGAYACH, JAIPUR. ORDER DATED 28 TH MARCH, 2001 AGAIN MADE AN ADDITION OF RS. 10,53,78 6/- AS AGAINST THE ORIGINAL ADDITION OF RS. 5,00,000/- ON THIS ACC OUNT. THE LD. A/R HAS FURTHER SUBMITTED THAT THE ORDER PASSED BY THE AO IN THE SE T ASIDE PROCEEDINGS WAS AGAIN CARRIED TO THE TRIBUNAL. HOWEVER, THE TRIBUNAL WHI LE PASSING THE ORDER DATED 28 TH SEPTEMBER, 2007 HAS MISTAKENLY OBSERVED THAT THE IS SUE WAS SET ASIDE TO THE RECORD OF THE AO IN THE ORIGINAL ORDER DATED 22 ND SEPTEMBER, 2006 AND HENCE THE MATTER WAS SET ASIDE TO THE AO. THUS THE LD. A/R HAS SUBMI TTED THAT THE PROCEEDINGS ARISING FROM THE SET ASIDE ORDER PASSED BY THE AO ARE ILLEG AL AS THE ADDITION ITSELF WAS DELETED BY THIS TRIBUNAL IN THE FIRST ROUND OF APPE AL. 3.1. ON THE OTHER HAND, THE LD. D/R HAS SUBMITTED T HAT THE MATTER HAS TRAVELLED UPTO THIS TRIBUNAL TWO TIMES PRIOR TO THE PRESENT A PPEAL AND, THEREFORE, THE PRESENT APPEAL HAS ARISEN FROM THE ORDER PASSED BY THE AO A S PER DIRECTIONS OF THIS TRIBUNAL VIDE ORDER DATED 28 TH SEPTEMBER, 2007. HE HAS FURTHER CONTENDED THAT TH E TRIBUNAL IN THE SUBSEQUENT PROCEEDINGS VIDE ORDER DATED 31 ST OCTOBER, 2011 IN ITA NO. 322/JP/2011 HAS AGAIN SET ASIDE THE ISSUE TO THE RE CORD OF THE AO AND THE PRESENT ORDER PASSED BY THE AO IS IN PURSUANT TO THE DIRECT IONS OF THE TRIBUNAL AND, THEREFORE, THE ADDITION SUSTAINED BY THE LD. CIT (A ) IS JUSTIFIED. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THERE IS NO DISPUTE THAT THE ORIGINAL ASSES SMENT ORDER WAS PASSED BY THE AO VIDE ORDER DATED 26 TH MARCH, 1998 AND IN THE FIRST ROUND OF APPEAL AGAIN ST THE SAID ORDER, THE LD. CIT (A) SET ASIDE THE ISSUE TO THE R ECORD OF THE AO VIDE ORDER DATED 23 RD FEBRUARY, 1999. HOWEVER, ON FURTHER APPEAL, THIS T RIBUNAL VIDE ORDER DATED 22 ND SEPTEMBER, 2006 IN ITA NO. 236/JP/1999 HAS CONSIDER ED AND DECIDED THIS ISSUE IN PARA 30 TO 31 AS UNDER :- 4 ITA NO. 377/JP/2015 KAILASH CHAND DANGAYACH, JAIPUR. 30. THE AO MADE ADDITION OF RS. 5,00,000/- ASSUMIN G THAT THE ASSESSEE MIGHT HAVE DEPOSITED RS. 5,00,000/- IN THE DIFFERENT BANK ACCOUNTS FROM HIS UNEXPLAINED INCOME. THE SUBMISSIO N OF LD AR IN THIS REGARD REMAINED THAT THESE BANK ACCOUNTS WERE OWNED AND POSSESSED BY M/S ONKARMAL BANSIDHAR & SONS, A PARTNERSHIP FIR M, WHICH HAD FURNISHED A DETAILED CERTIFICATE/EXPLANATION IN THI S REGARD AS FIND MENTIONED IN PAGE NO. 3 OF THE ORIGINAL ASSESSMENT ORDER. THE LD AR SUBMITS THAT THE AO ON PAGE-8 HAS REFERRED TO CERTA IN BANK ACCOUNT. AS FAR AS THE APPELLANT IS CONCERNED IT IS ONLY HAV ING ONE BANK ACCOUNT BEARING SB A/C NO. 14165/68 WITH UNITED COMMERCIAL BANK, CHANDPOLE BAZAR, JAIPUR. ON PERUSAL IT IS APPARENT THAT THERE ARE NO TRANSACTIONS. THE OTHER ACCOUNT MENTIONED BY LD AO 23 CD-14/93 OF UCO BANK IS NOT OF THE APPELLANT. THUS THE APPELLANT HAS NO CON CERN, CONNECTION OVER T HE SAID ACCOUNT. THE ACCOUNT REFERRED AS 400 /63 WITH SYNDICATE BANK IS CERTAINLY IN THE NAME OF THE APPELLANT BUT HAS BEEN OWNED BY M/S ONKARMAL BANSHIDHAR & SONS AS ALL THE TRANSACTI ON OF THE SAID ACCOUNT ARE OF M/S ONKARMAL BANSHIDHAR & SONS. M/S ONKARMAL BANSHIDHAR & SONS IS ALREADY BEFORE THE SETTLEMENT COMMISSION. THE AO HAS MENTIONED ABOUT SOME BANK ACCOUNTS OF RACHNA , AKSHAY, AMIT, SUNITA RAWAT, PRIYANKA HOWEVER THE APPELLANT HAS NEITHER ANY CONCERN NOT HAS ANY CONNECTION OVER THE SAID ACCOUN T OF DIFFERENT FAMILY MEMBERS, ALL ARE INDIVIDUALS PERSONS IN THEI R OWN RIGHT. THE APPELLANT CAN NOT BE HELD RESPONSIBLE FOR THE BANK ACCOUNTS OF DIFFERENT FAMILY MEMBERS. IT DESERVES TO BE IGNORED. SUNITA R AWAT IS NOT RELATED TO THE APPELLANT. SIMILARLY PRIYANKA DANGAYACH IS M INOR DAUGHTER OF SHRI MAHESH DANGAYACH YOUNGER BROTHER, OF THE APPEL LANT. THEREFORE, ALL THESE BANK ACCOUNTS DESERVE TO BE CONSIDERED IN THE RESPECTIVE HEADS AND NOT IN THE HEADS OF THE APPELLANT NOR HAS ANY CONCERN OR CONNECTION OVER THE SAME. THE AO HAS PRESUMED AND A SSUMED THAT THE ASSESSEE DEPOSITED RS. 5 LACS IN THESE ACCOUNTS SAME IS BASED ON 5 ITA NO. 377/JP/2015 KAILASH CHAND DANGAYACH, JAIPUR. NO EVIDENCE AS FAR AS THE APPELLANT IS CONCERNED TH ERE IS NO CREDIT IN HIS INDIVIDUAL ACCOUNT THE ADDITION BEING IN VIOLAT ION OF PRINCIPLES OF NATURAL JUSTICE DESERVES TO BE DELETED. THE LD DR O N THE OTHER HAND BANKS UPON THE ASSESSMENT ORDER. 31. AFTER HAVING GONE THROUGH THE ORDERS OF THE LOW ER AUTHORITIES IN VIEW OF ARGUMENTS ADVANCED BY THE PARTIES, WE FIND FROM THE PERUSAL OF PAGE NO.8 & 9 OF THE ASSESSMENT ORDER THAT THE A O HAS MADE THE ADDITION IN QUESTION ON THE BASIS THAT THE ASSESSEE DID NOT PRODUCE ANY DETAILS AND BANK STATEMENTS/PASS BOOK, THEREFORE IT WAS NOT POSSIBLE TO IDENTIFY THE ACCOUNT RELATED TO HUF AND INDIVIDUAL. HE THEREFORE ADDED BACK RS. 3,00,000/- TO THE TOTAL INCOME OF THE ASSE SSEE IN HUF STATUS FOR A.Y. 1995-96 FOR FURTHER CONSIDERATION IN HIS I NDIVIDUAL ASSESSMENT AS WELL. THE AO MENTIONED FURTHER THAT CONSIDERING THE NON COOPERATIVE ATTITUDE OF THE ASSESSEE FOR THE INTERE ST OF REVENUE HE HOLD THAT ASSESSEE DEPOSITED RS. 5 LACS DURING THE YEAR UNDER ASSESSMENT IN VARIOUS BANK ACCOUNTS OUT OF HIS UNDISCLOSED INCOME . WE ARE THUS OF THE VIEW THAT THE AO HAS MADE ADDITION PURELY ON TH E ASSUMPTION WITHOUT EVEN MENTIONING ANY AMOUNT FOUND DEPOSITED IN THE DIFFERENT ACCOUNTS OF THE BANK WHOSE DETAILS LIKE ACCOUNT NUM BERS AND NAME OF BANKS HAVE BEEN MENTIONED AT PAGE NO.8 & 9 OF THE A SSESSMENT ORDER. WE ARE OF THE VIEW THAT WHEN REFERENCE OF THESE ACC OUNTS WERE AVAILABLE WITH THE AO IN THAT CASE DUE TO NON COOPE RATION OF THE ASSESSEE, AS ALLEGED, AT LEAST ONE OPTION WAS AVAIL ABLE BEFORE THE AO TO VERIFY FROM THE CONCERN BANKS AS TO HOW MUCH DEP OSITS WERE AVAILABLE IN THESE ACCOUNTS SO THAT A DEFINITE AMOU NT ON THE BASIS OF THAT INFORMATION SHOULD HAVE BEEN ADDED BY THE AO I NSTEAD OF MAKING A GUESS THAT ASSESSEE MIGHT HAVE DEPOSITED AN AMOUN T OF RS. 5 LACS IN THESE ACCOUNTS FROM HIS UNDISCLOSED INCOME, WHICH I N OUR VIEW HAS NO BASIS OR STANDING IN THE MATTER OF BLOCK ASSESSMENT . WE THUS WHILE SETTING ASIDE FIRST APPELLATE ORDER UPHOLDING THE A SSESSMENT, DIRECT THE AO TO DELETE THE ADDITION. THE GROUND NO.-8 IS ALLO WED. 6 ITA NO. 377/JP/2015 KAILASH CHAND DANGAYACH, JAIPUR. THUS IT IS CLEAR THAT THIS TRIBUNAL HAS DELETED THE ADDITION IN RESPECT OF THE DEPOSITS MADE IN THE DIFFERENT BANK ACCOUNTS AMOUNTING TO RS . 5,00,000/-. SINCE THE AO HAD PASSED AN ORDER DATED 28 TH MARCH, 2001 IN PURSUANT TO THE ORDER OF THE LD. CI T (A), THEREFORE, PARALLEL PROCEEDINGS WERE ALSO STARTED I N THE MATTER WITHOUT GIVING EFFECT TO THE ORDER OF THIS TRIBUNAL DATED 22 ND SEPTEMBER, 2006. THEREFORE, ONCE THIS ISSUE WAS DECIDED BY THE TRIBUNAL ON MERITS, THEREFORE, A LL SUBSEQUENT PROCEEDINGS BY THE AO ARE IN CONTRAVENTION OF THE ORDER OF THIS TRIBUN AL DATED 22 ND SEPTEMBER, 2006. THOUGH THE TRIBUNAL IN THE SUBSEQUENT APPEAL VIDE O RDER DATED 28 TH SEPTEMBER, 2007 HAS SET ASIDE THE ISSUE ARISING FROM THE ORDER PASSED BY THE AO DATED 28 TH MARCH, 2001 IN PURSUANT TO THE ORDER OF THE LD. CIT (A) SETTING ASIDE THE ISSUE TO THE AO HAS AGAIN REMANDED THE MATTER TO THE AO IN PARA 35 AS UNDER :- 35. AFTER PERUSAL OF ASSESSMENT ORDER, WE FIND TH AT THE AO HAS MADE EFFORT TO VERIFY THE CORRECTNESS OF THE EXPLAN ATION OF THE ASSESSEE. HE HAS HOWEVER NOT STRICTLY FOLLOWED THE DIRECTION OF LD. CIT (A) VIDE ORDER DATED 23.2.1999 IN APPEAL NO. 229/19 98-99 TO DECIDE THE MATTER AFRESH. SINCE ON SIMILAR ISSUE THE TRIBU NAL HAS ALREADY SET ASIDE THE ORDERS OF LOWER AUTHORITIES IN ITA NO.236 /JP/1999 IN THE APPEAL OF ASSESSEE FOR THE SAME ASSESSMENT YEAR 199 5-06 AND HAS REMANDED THE MATTER TO THE FILE OF THE A.O. FOR A F RESH CONSIDERATION, WE WHILE SETTING ASIDE THE ORDERS OF THE LOWER AUTH ORITIES ON ADDITION OF RS. 10,53,786/- IN QUESTION, REMAND THE MATTER TO T HE FILE OF THE A.O. TO DECIDE THE MATTER AFRESH IN THE MANNER DIRECTED BY THE LD. CIT (A) 7 ITA NO. 377/JP/2015 KAILASH CHAND DANGAYACH, JAIPUR. VIDE HIS ORDER DATED 23.2.1999 IN APPEAL NO. 229/98 -99 AFTER AFFORDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE . THE GROUND NO. 2 IS THUS ALLOWED FOR STATISTICAL PURPOSES. THUS IT IS CLEAR THAT THE SECOND ORDER OF THE TRIBU NAL DATED 28 TH SEPTEMBER, 2007 WAS PASSED ON THE BASIS OF ASSUMPTION OF WRONG FACT S THAT IN THE FIRST ROUND OF APPEAL IN ITA NO. 236/JP/1999 VIDE ORDER DATED 22.0 9.2006 THE MATTER WAS REMANDED TO THE AO WHEREAS IN FACT THE ISSUE WAS DE CIDED IN FAVOUR OF THE ASSESSEE. THUS THE PROCEEDINGS ARISING FROM THE ORD ER PASSED BY THE AO DATED 28 TH MARCH, 2001 IS NOT SUSTAINABLE IN LAW ON THIS ISSUE WHEN THE ADDITION ON ACCOUNT OF DEPOSITS IN THE BANK WAS DELETED BY THIS TRIBUNAL I N THE FIRST ROUND OF APPEAL ITSELF. ACCORDINGLY, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE DELETE THE ADDITION MADE BY THE AO ON THIS ACCOUNT. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 19/03/2018 . SD/- SD/- HKKXPUN FOT; IKY JKWO (BHAGCHAND) ( VIJAY PAL RAO ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 19/03/2018. DAS/ 8 ITA NO. 377/JP/2015 KAILASH CHAND DANGAYACH, JAIPUR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI KAILASH CHAND DANGAYACH, JAIPUR , 2. IZR;FKHZ@ THE RESPONDENT-THE ITO, WARD 3(2), JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 377/JP/2015} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR