M/s Baldev Singh & Co., Chandigarh V. ITO, Khanna

ITA 1073/CHANDI/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0710 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-01-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 26-10-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: S K MUKHI
• Keywords: Principle of natural justice
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A, CHANDIGARH BEFORE SHRI T.R.SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NOS. 1072 & 1073/CHD/2012 (ASSESSMENT YEARS : 1985-86 & 1986-87) M/S BALDEV SINGH & CO. VS. THE INCOME TAX OFFICER , AMBALA CANTT.,H.O.SAMRALA WARD 1, C/O MUKHI & ASOCIATES, KHANNA. # 1285, SECTOR 42-B, CHANDIGARH. PAN: AAHFB3708P (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.K.MUKHI RESPONDENT BY : SHRI AKHILESH GUPTA, DR DATE OF HEARING : 27.12.2012 DATE OF PRONOUNCEMENT : 14.01.2013 O R D E R PER SUSHMA CHOWLA, J.M, : THESE TWO APPEALS FILED BY THE ASSESSEE ARE AGAINST THE CONSOLIDATED ORDER OF THE COMMISSIONER OF INCOME-TA X (APPEALS)-II, LUDHIANA DATED 22.08.2012 RELATING TO ASSESSMENT YE ARS 1985-86 AND 1986-87 AGAINST THE ORDER PASSED UNDER SECTION 143( 3) R.W.S. 254 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. THE COMMON GROUNDS OF APPEAL RAISED BY THE ASSE SSEE IN BOTH THE APPEALS ARE AS UNDER: 1. THAT THE ORDER OF LD. CIT (A) IS ILLEGAL, ARBITRARY, ERRONEO US WITHOUT CONSIDERING THE SUBMISSIONS AND EVIDENCES FILED AND ON RECORD THUS NEEDS TO BE QUASHED. 2. THAT THE LD. CIT (A) IS NOT JUSTIFIED IN NOT ADJ UDICATING VARIOUS GROUNDS OF APPEAL AS TAKEN UP BY THE APPELL ANT IN FORM NO. 35 AND ALSO NOT CONSIDERING THE PRAYER BY THE APPEL LANT FOR CONSIDERING THE SAME AS ADDITIONAL GROUNDS OF APPEA L AS PLEADED IN VIEW OF THE JUDGMENT OF HON'BLE SUPREME COURT OF IN DIA IN THE CASE OF 2 NATIONAL THERMAL POWER CO. LTD VS CIT, 229 ITR 383 (SC) SO THAT SO THE ORDER OF ID CIT (A) IS ERRONEOUS, ILLEGAL AND PERVE RSE. 3. THAT THE LD. CIT (A) IS NOT JUSTIFIED IN ERRONEO USLY HOLDING MR. BALDEV SINGH A KARINDA/WORKER OF M/S BALDEV SINGH A ND CO THE APPELLANT FIRM AS PARTNER OF THE SAID FIRM WITHOUT APPRECIATING THE FACTS AND EVIDENCES ON RECORD IN ITS ENTIRETY AND T RUE SPIRITS. 4. THAT WITHOUT PREJUDICE TO ABOVE THE APPELLANT DI SPUTES THE VERY FINDINGS OF THE ID. CIT(A)WITHOUT APPRECIATING THE FACTS AND CIRCUMSTANCES, EVIDENCES ON RECORD WHICH IS ALSO AG AINST THE PRINCIPLES OF NATURAL JUSTICE. 5. THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND AN D DELETE ANY OF THE GROUNDS OF APPEAL ON OR BEFORE THE DISPOSAL OF THE PRESENT 4. BOTH THE APPEALS RELATING TO THE SAME ASSESSEE O N IDENTICAL FACTS WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY T HIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 5. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IN THE CASE WAS COMPLETED IN THE HANDS OF THE ASSESSEE UNDER SECTIO N 143(3)/144 R.W.S.147/148 OF THE ACT ON TOTAL INCOME OF RS.1,90 ,000/-. THE CIT (APPEALS) REVERSED THE ORDER OF THE ASSESSING OFFIC ER UNDER WHICH IT WAS HELD THAT SHRI BALDEV SINGH ALONGWITH OTHERS WAS PA RTNER IN M/S BALDEV SINGH & CO. AND HELD 75% SHARE IN THE SAID FIRM. T HE ASSESSING OFFICER WAS THUS DIRECTED NOT TO CONSIDER SHRI BALDEV SINGH AS PARTNER IN THE SAID FIRM FOR THE ASSESSMENT YEARS UNDER CONSIDERAT ION. HOWEVER, THE INCOME OF M/S BALDEV SINGH & CO. FOR THE TWO ASSESS MENT YEARS ASSESSED BY THE ASSESSING OFFICER WOULD REMAIN UNCHANGED. T HE REVENUE FILED APPEAL BEFORE THE TRIBUNAL, WHICH VIDE ORDER DATED 31.3.2009 SET ASIDE THE ORDER OF THE CIT (APPEALS) AND DIRECTED THE ASS ESSING OFFICER TO DECIDE THE ISSUE IN LINE WITH ITS DIRECTIONS. 6. THE TRIBUNAL IN THE APPEAL FILED BY THE ASSESSEE IN ITA NOS.528 & 529/CHANDI/2008 VIDE ORDER DATED 31.3.2009 IN FIRST ROUND OF APPEAL OBSERVED AS UNDER: 3 6. ON THIS POINT, THE LEARNED COUNSEL POINTED OUT THAT THE FORM M-14 OSTENSIBLY, AS FURNISHED BY THE REVENUE, DOES NOT INCLUDE THE SIGNATURES OF SHRI BA LDEV SINGH. THE LEARNED COUNSEL POINTED OUT THAT THE IS SUE WAS ALSO CHALLENGED BY WAY OF WRIT PETITION BEFORE THE HON'BLE HIGH COURT BY SHRI BALDEV SINGH IN CWP NO.7046 OF 2002. ULTIMATELY, THE SAID WRIT PETITI ON HAS BEEN DISPOSED OF BY THE HON'BLE HIGH COURT ON T HE PLEA OF ALTERNATIVE REMEDY. SO HOWEVER, THE COPY OF FORM NO.M-14 SUBMITTED BY THE REVENUE WAS NOT HELD TO BE CONCLUSIVE AND IN FACT, THE HON'BLE HIGH COUR T IN ITS INTERIM ORDER DATED 25.5.2006 OBSERVED AS UNDER :- WE HAVE HEARD LEARNED COUNSEL FOR THE PARTIES FOR SOME TIME. WE ARE OF THE OPINION THAT IT HAS BECOME ABSOLUTELY NECESSARY TO PERUSE THE RECORD PERTAINING TO THE AUCTION OF LIQUOR VENDS, WHICH WAS CONDUCTED BY THE EXCISE AND TAXATION DEPARTMENT IN AMBALA DISTRICT FOR THE YEARS 1984- 85 AND 1985-86. LEARNED ADDITIONAL ADVOCATE GENERAL, HARYANA, IS REQUESTED TO REQUISITION THE RELEVANT RECORD AND THAT THE CONCERNED OFFICIAL IN THIS REGARD, WHO IS WELL-VERSED WITH THE MATTER, SHALL ALSO BE PRESENT. 7. ON THE BASIS OF THE AFORESAID, THE LEARNED COUNS EL SUGGESTED THAT HE HAS NO OBJECTION EVEN IF THE EXER CISE OBSERVED IN THE ORDER OF THE HON'BLE HIGH COURT IS NOW CARRIED OUT. 8. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. I HAVE ALSO CONSIDERED THE MATERIAL ON RECORD AND THE ORDE RS OF THE LOWER AUTHORITIES. THE COMMISSIONER OF INCO ME- TAX (A) HAS PRIMARILY CONCLUDED THAT THE RESPONDENT SHRI BALDEV SINGH IS NOT A PARTNER IN THE FIRM M/S BALDEV SINGH & CO. IN FACT, THIS ASSERTION OF THE COMMISSIONER OF INCOME-TAX (A) IS IN CHALLENGE. NO DOUBT THE PROCEEDINGS INITIATED BY THE ASSESSING OF FICER ARE PURELY ON THE BASIS OF THE DEPOSITION MADE BY S HRI PRITAM SINGH. IT IS ALSO A FACT THAT SHRI BALDEV SINGH IS NOT A STRANGER TO M/S BALDEV SINGH & CO. BECAUSE IN THE PETITION U/S 273A OF THE ACT, IT IS ADMITTED TH AT SHRI BALDEV SINGH WAS A SALESMAN OF THE ASSESSEE FIRM IN QUESTION. AT THE SAME TIME, IT MAY ALSO BE RELEVAN T TO OBSERVE THAT THE ONUS TO ESTABLISH AS TO WHETHER OR NOT THE RESPONDENT SHRI M/S BALDEV SINGH IS A PARTNER I N M/S BALDEV SINGH & CO., LIES ON THE REVENUE. THIS IS BECAUSE IT IS THE REVENUE WHO INITIATED THE IMPUGNE D ASSESSMENT PROCEEDINGS BASED ON THE STATEMENT OF SH RI PRITAM SINGH. IT IS FOR THE REVENUE TO ASCERTAIN O N THE BASIS OF CLINCHING EVIDENCE AS TO WHETHER OR NOT SH RI BALDEV SINGH IS A PARTNER IN M/S BALDEV SINGH & CO. , ESPECIALLY WHEN SHRI BALDEV SINGH HAS DENIED BEING A PARTNER. SUCH A STAND OF SHRI BALDEV SINGH IS EVIDENCED BY HIS FILING OF WRIT PETITION BEFORE THE HON'BLE HIGH COURT AS ALSO THE APPEAL BEFORE THE COMMISSIONER OF INCOME-TAX (A) AGAINST THE ASSESSME NT 4 MADE BY THE ASSESSING OFFICER. I FIND THAT THE CONCLUSIVE MANNER TO ESTABLISH SO, CAN BE UNDERSTOO D FROM THE OBSERVATIONS MADE BY THE HON'BLE HIGH COUR T, WHICH HAVE BEEN EXTRACTED ABOVE. OSTENSIBLY, THE FIRM HAS CARRIED OUT LIQUOR BUSINESS BY OBTAINING VENDS IN AUCTION FROM THE EXCISE AUTHORITIES. THE RECORD OF THE AUCTION OF LIQUOR VENDS CONDUCTED BY THE EXCISE AND TAXATION DEPARTMENT IN AMBALA DISTRICT FOR THE YEAR S IN QUESTION IS A RELEVANT AND NECESSARY EVIDENCE TO ESTABLISH THE TRUTH. NOTABLY, THE SAID SHRI PRITAM SINGH OR THE REVENUE HAS NOT PRODUCED ANY PARTNERSHIP DEE D TO ESTABLISH THE CASE AGAINST THE ASSESSEE. IN ORD ER TO CARRY OUT THE AFORESAID EXERCISE, THE COUNSEL FOR T HE RESPONDENT HAS ALSO MADE AN OFFER TO COOPERATE AT T HE LEVEL OF THE ASSESSING OFFICER. THE LEARNED D.R. HAS NO OBJECTION TO THE SAME. I, THEREFORE, SET ASIDE THE ORDER OF THE COMMISSIONER OF INCOME-TAX (A) AND DIR ECT THE ASSESSING OFFICER TO CARRY OUT THE AFORESAID EXERCISE AND THEREAFTER CONFRONT THE ASSESSEE WITH THE RELEVANT MATERIAL. AFTER CONSIDERING THE SUBMISSI ONS OF THE ASSESSEE AND THE MATERIAL ON RECORD, THE ASSESSING OFFICER SHALL PASS AN ORDER AFRESH ON THI S ISSUE. 7. THE MATTER WAS SET ASIDE AT THE CONCESSION OF TH E LEARNED A.R. FOR THE ASSESSEE THAT ON THE BASIS OF THE AFORESAID OBS ERVATIONS OF HON'BLE HIGH COURT, THE LEARNED COUNSEL SUGGESTED THAT HE H AS NO OBJECTION EVEN IF THE EXERCISE OBSERVED IN THE ORDER OF THE HON'BL E HIGH COURT IS NOW CARRIED OUT. 8. DURING THE COURSE OF SET ASIDE PROCEEDINGS THE A SSESSING OFFICER CONFRONTED THE RECORD OF AUCTION OF LIQUOR VENDS SU PPLIED BY THE EXCISE AUTHORITIES AND SHOW CAUSED THE ASSESSEE AS UNDER: 7. THE COUNSEL FOR THE ASSESSEE WAS CONFRONTED WITH THE RECORD OF THE AUCTION OF LIQUOR VENDS CONDUCTED BY THE EXCISE AND TAXATION DEPARTMENT IN AMBALA DISTRICT FOR THE FINANCIAL YEA R 1984-85 & 1985- 86, SUPPLIED BY THE CONCERNED EXCISE AUTHORITIES CA LLED FOR U/S 133 (6) OF THE INCOME TAX ACT, 1961, BY DEPUTING INSPECTOR OF THIS OFFICE FOR THE PURPOSE. THE ATTESTED COPIES OF THE DOCUMENTS RECEI VED FROM THE EXCISE & TAXATION COMMISSIONER (HARYANA), PANCHKULA AND DY . EXCISE 85 TAXATION COMMISSIONER (EXCISE) AMBALA WERE HANDE D OVER TO MR. RAJIV SHARMA, ADVOCATE, COUNSEL FOR THE ASSESSEE, A S PER THIS OFFICE LETTER NO. 384 DATED 16/20.12.2010 FOR COMMENTS AND COMPLIANCE ON 23.12.2010, ON THE ISSUE AS UNDER: - 'IN ORDER TO COMPLY WITH THE DIRECTIONS ISSUED BY T HE HON'BLE ITAT, TO VERIFY THE FACTS, THE RECORD PERTAINING TO THE AUCTION OF LIQUOR VENDS CONDUCTED BY THE EXCISE & TAXATION DEP ARTMENT IN 5 AMBALA DISTRICT DURING THE YEARS 1984-85 & 1985-86 WAS CALLED FOR U/S 133 (.6) OF THE INCOME TAX ACT, 1961 FROM T HE CONCERNED AUTHORITIES. THE ATTESTED COPIES OF RELEV ANT RECORDS HAVE BEEN RECEIVED FROM THE EXCISE &TAXATIO N COMMISSIONER (HARYANA), PANCHKULA AND ALSO FROM THE DY. EXCISE & TAXATION COMMISSIONER (EXCISE), AMBALA. AS PER THE AUCTION AND ALLOTMENT RECORDS SUPPLIED BY THE CONCE RNED COMPETENT AUTHORITIES:, SH. BALDEV SINGH, S/O SH. K ASHMIRA SINGH, RESIDENT OF SAMRALA IS ONE OF THE SUCCESSFUL BIDDER ALONGWITH OTHERS. THE DOCUMENTS SUPPLIED BY THE EXC ISE & TAXATION DEPARTMENT CONTAIN THE SIGNATURE OF SH. BA LDEV SINGH ALONGWITH OTHERS, AT THAT TIME, BEFORE THE EXCISE A UTHORITIES. ALTHOUGH THE DOCUMENTS SUPPLIED BY BOTH THE AUTHORI TIES CONTAIN THE SAME PARTICULARS, BUT COPIES OF ALL THE DOCUMENTS ARE SENT TO YOU FOR INFORMATION AND YOUR COMMENTS, IF A NY (NINE PAGES OF EACH SET).' 9. THE REPLY OF THE ASSESSEE AS CONSIDERED BY THE A SSESSING OFFICER POINT-WISE WAS AS UNDER: I) NOTICES U/S 148 NOT VALID II) NO OPPORTUNITY WAS AFFORDED TO SH. BALDEV SINGH TO REBUT STATEMENT OF SH. PRITAM SINGH STATING HIM AS A PART NER ANY STAGE, III) SH. PRITAM SINGH, NOT PRODUCED FOR CROSS EXAMI NATION AT ANY STAGE, WHEN INITIAL SURRENDER DURING SEARCH ON 25.08.1989 WAS MADE BY SH. PRITAM SINGH FOR HIS SHARE IN THE LIQUOR BUSINESS. IV) THE OTHER PARTNERS HAVE NOT BEEN SUMMONED FOR C ROSS EXAMINATION TO ESTABLISH THE TRUTH. V) SH. PRITAM SINGH NEVER APPRISED MR. BALDEV SINGH OR OTHERS FOR THE SURRENDER DURING 132 ACTION IN 1989 WHILE IT WAS AF TER SEVEN YEARS I.E. ON 28.02.1996, HE FIRST TIME MENTIONED THE NAME OF BALDEV SINGH AND CLARIFIED THE SURRENDER IN THE HANDS OF THE FIRM VI) ACCORDING TO FORM NO. M-14 FOR 1984-85 SH. PRIT AM SINGH WAS NOT A PARTNER, THEN HOW COULD HE SURRENDER THE AMOUNT O N BEHALF OF THE FIRM, IT MEANS HE WAS THE MAIN BRAIN/OWNER OF THE S AID TWO VENDS WHEREIN HE HAD ONLY GIVEN NAMES OF OTHER PERSONS WH O WERE EITHER HIS EMPLOYEES OR KNOWN PERSONS. 10. THE ASSESSING OFFICER UNDER PARA 11 AT PAGES 6 TO 8 HAS INCORPORATED THE CONTENTS OF THE DOCUMENTS RECEIVED FROM EXCISE & TAXATION DEPARTMENT IN WHICH SAID LIQUOR VEND WAS A LLOTTED TO M/S BALDEV SINGH & CO. ON BIDDING AND IT HAD HAD UNDER TAKEN TO PAY LICENCE FREE OF RS.10,25,000/- FOR THE FINANCIAL YEAR 1984- 85 AND RS.6,60,000/- 6 FOR THE FINANCIAL YEAR 1985-86. THE CONCLUSION OF THE ASSESSING OFFICER VIDE PARA 12 WAS AS UNDER: 12. KEEPING IN VIEW OF ALL THE FACTS, EVIDENCE IN THE SHAPE OF AUCTION AND ALLOTMENT RECORDS SUPPLIED BY THE EXCISE & TAXA TION DEPARTMENT, IT IS EVIDENT THAT SH. BALDEV SINGH IS PARTNER IN M/S BAL DEV SINGH 85 CO,, LIQUOR CONTRACTOR, AMBALA CANTT, H.O. SAMRALA DURING THE F .Y. 1984-85 AND 1985- 86. THE OBJECTION RAISED BY THE COUNSELS OF THE ASS ESSEE THAT THE ASSESSEE SH. BALDEV SINGH NEVER PARTICIPATED IN EXCISE PROCE EDINGS IS NOT ACCEPTED, IN VIEW OF THE CONCRETE EVIDENCE IN THE SHAPE OF RE CORD OF AUCTION AND ALLOTMENT OF LIQUOR VENDS CONDUCTED BY THE EXCISE A ND TAXATION DEPARTMENT IN AMBALA DISTRICT DURING THE F.Y. 1984-85 AND 1985-86 AS DISCUSSED ABOVE. IN VIEW OF THE THESE FACTS AND EVIDENCES, IT IS HELD THAT SH. BALDEV SINGH IS A PARTNER IN M/S BALDEV SINGH & CO., LIQUO R CONTRACTOR, AMBALA CANTT. H.O. SAMRALA DURING THE F.Y. 1984-85 & 1985-86. THE DEMAND NOTICE U/S 156 (ITNS-7) OF THE INCOME TA X ACT, 1961 IS BEING ISSUED FOR TECHNICAL PURPOSES. HOWEVER, DE MAND ALREADY RAISED VIDE ORDER U/S 143 (3) R/W SEC. 147/148 OF THE INCO ME TAX ACT, 1961 DATED 05.03.1998 AND CONFIRMED BY THE COMMISSIONER OF INC OME TAX (A)-II, LUDHIANA IS TO BE TREATED AS REGULAR DEMAND AGAINST THE ASSE SSEE. 11. THE ASSESSING OFFICER ALSO OBSERVED THAT THERE WAS NO RELEVANCE OF THE ARGUMENTS RAISED BY THE LEARNED A.R. FOR THE AS SESSEE VIS--VIS THE EXTENT OF ASSESSABILITY OF INCOME AS THE CIT (APPEA LS) HAD HELD AS UNDER: THE INCOME OF M/S BALDEV SINGH & COO., ASSESSED B Y THE ASSESSING OFFICER FOR THE TWO A.YS I.E. A.Y. 19 85-86 & 1986-87 WOULD, HOWEVER, REMAIN UNCHANGED 12. THE CIT (APPEALS) IN THE SECOND ROUND CONSIDERE D THE ARGUMENTS OF THE ASSESSEE IN RELATION TO THE JUSTIFICATION OF TH E ORDER OF THE ASSESSING OFFICER IN HOLDING SHRI BALDEV SINGH TO BE THE PART NER IN THE LIQUOR VEND UNDER THE NAME AND STYLE OF MR.BALDEV SINGH & CO. THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE ARE INCORPORATED UNDER PARA 5.2 AT PAGES 6 TO 8 OF THE APPELLATE ORDER. THE CONCLUSIO N OF THE CIT (APPEALS) VIDE PARA 5.3 WAS AS UNDER: 5.3 I HAVE CAREFULLY CONSIDERED THE APPELLANT'S S UBMISSIONS. THE HON'BLE ITAT, CHANDIGARH AFTER CONSIDERING THE FACT S OF THE CASE HAD DIRECTED THAT THE RECORD OF AUCTION OF LIQUOR VENDS CONDUCTED BY EXCISE AND TAXATION DEPARTMENT IN AMBALA DISTRICT FOR THE YEARS IN QUESTION IS A RELEVANT AND NECESSARY EVIDENCE TO ESTABLISH T HE TRUTH THAT IS WHETHER SHRI BALDEV SINGH IS A PARTNER IN M/S BALDE V SINGH & CO. OR 7 NOT. THE FACT THAT NO PARTNERSHIP DEED HAD BEEN PR ODUCED TO ESTABLISH THE TRUTH WAS NOTED BY THE HON'BLE ITAT WHILE DIREC TING AS ABOVE. THE HON'BLE ITAT HAD ALSO TAKEN NOTE OF DIRECTIONS BY THE HON'BLE PUNJAB & HARYANA HIGH COURT GIVEN BY ITS INTERIM OR DER 25.05.2006 ON THIS ISSUE. IN THESE CIRCUMSTANCES THE AO WAS F ULLY JUSTIFIED IN RELYING UPON THE RECORDS OF AUCTION OF THE LIQUOR V ENDS CONDUCTED BY THE EXCISE AND TAXATION DEPARTMENT IN AMBALA DISTRI CT TO DECIDE THE ISSUE AS TO WHETHER SHRI BALDEV SINGH WAS A PARTNER OF M/S BALDEV SINGH & CO. DURING THE RELEVANT PERIOD OR NOT. THE AO IN A DETAILED ORDER HAS DISCUSSED RELEVANT DOCUMENTS PERTAINING T O THE EXCISE AND TAXATION DEPARTMENT WHICH COULD PROVE THAT SHRI BAL DEV SINGH WAS A PARTNER OF M/S BALDEV SINGH & CO. DURING THE RELEVA NT PERIOD. THESE DOCUMENTS HAVE BEEN ELABORATED BY THE AO ON PAGE 7 & 8 OF THE ASSESSMENT ORDER AND HAVE ALSO ANNEXED AS ANNEXURE TO THE ASSESSMENT ORDER. THE APPELLANT HAS FAILED TO CONTROVERT THE F INDINGS GIVEN BY THE AO AFTER EXAMINING THESE DOCUMENTS. IN THESE CIRCUM STANCES, AO WAS JUSTIFIED IN ARRIVING AT THE CONCLUSION THAT SH. BA LDEV SINGH WAS A PARTNER IN THE APPELLANT FIRM. 13. THE CIT (APPEALS) ALSO PLACED RELIANCE ON DECIS ION OF MADHYA PRADESH HIGH COURT IN THE CASE OF RAMPAL THAKURDIN GUPTA VS. CIT (MP) 234 ITR 304. 14. IN RESPECT OF THE QUANTIFICATION OF INCOME IN T HE HANDS OF THE ASSESSEE THE CIT (APPEALS) VIDE PARA 4.3 HELD AS UN DER: 4.3 I HAVE CAREFULLY CONSIDERED THE APPELLANTS SUBMISSIONS. THE ISSUE REGARDING THE ASSESSMENT OF INCOME AND HE QUANTIFICATION OF INCOME IN THE HANDS OF THE APPELLANT M/S BALDEV SINGH & CO. HAD ATTAINED A FINALITY AFTE R THE FOLLOWING ORDER OF THE LD. CIT(A)-II, IN HIS ORDER DATED 11.03.2008. 'THE INCOME OF M/S BALDEV SINGH & CO. ASSESSED BY T HE. I.E. AY 1985-86 & 1986-87 WOULD, HOWEVER REMAIN UNCHANGED.' NO APPEAL WAS FILED ON THIS ISSUE BY EITHER THE APP ELLANT OR THE DEPARTMENT. THE APPEAL FILED BY THE DEPARTMENT AGAINST THE ORDE R OF CIT(A)-11, DATED 11.03.2008 WAS ON LIMITED ISSUE OF DIRECTIONS TO TH E AO NOT TO CONSIDER SH. BALDEV SINGH AS A PARTNER IN THE FIRM M/S BALDEV SI NGH & CO. THE HON'BLE IT AT SET-ASIDE THE ORDER OF THE CIT(A)-II, LUDHIANA O N THIS LIMITED ISSUE. THE ASSESSMENT ORDER PASSED BY THE AO, WHICH IS UNDER A PPEAL, IS IN CONSEQUENCE TO THESE DIRECTIONS OF HON'BLE IT AT. THIS GROUND O F APPEAL THEREFORE DOES NOT ARISE FROM THE ORDER UNDER APPEAL. THIS GROUND OF A PPEAL IS ACCORDINGLY DISMISSED. 15. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT (APPEALS). THE LEARNED A.R. FOR THE ASSESSEE BEFORE US MADE EXTENS IVE SUBMISSIONS IN RESPECT OF VARIOUS ASPECTS OF THE ISSUE RAISED AND POINTED OUT THAT 8 UNDOUBTEDLY THE LICENCE DOCUMENT IN RESPECT OF THE AWARD OF LIQUOR VENDS WAS SIGNED BY BALDEV SINGH AND OTHERS AND THE SAID LICENCE WAS ALSO ISSUED, BUT SHRI BALDEV SINGH WAS NOT RUNNING THE BUSINESS. IT WAS THE CONTENTION OF LEARNED A.R. FOR THE ASSESSEE THA T THE SAID REGULAR BUSINESS WAS RUN BY SHRI PRITAM SINGH, WHO HAD SURR ENDERED THE INCOME DURING THE COURSE OF SEARCH AT HIS PREMISES AND THE SAID INCOME COULD NOT BE ADDED IN THE HANDS OF THE ASSESSEE, HOLDING BALD EV SINGH TO BE PARTNER. THE LEARNED A.R. FOR THE ASSESSEE FURTHER PLACED RELIANCE ON THE SUBMISSIONS MADE BY THE ASSESSEE DURING THE ASSESSM ENT PROCEEDINGS WHICH WERE AS UNDER: I) BALDEV SINGH WAS SIMPLY WORKING WITH MR PRITAM SINGH AND WAS GETTING SALARY FOR LOOKING AFTER HIS BUSINESS OF LI QUOR VEND AT AMBALA. II) MR PRITAM SINGH WAS ENGAGED IN VARIOUS BUSINES S ACTIVITIES INCLUDING LIQUOR, TRANSPORTATION, ETC. AS IS CLEAR FROM HIS STATEMENT DURING SEARCH AND SURRENDER MADE THEREOF (KINDLYREFER TO PAPER BOOK PAGE 1 TO 4). III) 16.03.1984: PRITAM SINGH PARTICIPATED IN AUCT ION OF LIQUOR VENDS AT AMBALA AND GOT THE VENDS. IV) 11,03.1985: PRITAM SINGH AGAIN PARTICIPATED IN VENDS AUCTION AND GOT THE VENDS. V) 18.08.1989: SEARCH U/S 132 CONDUCTED AT PREMISES OF PRITAM SINGH. VI) PRITAM SINGH DECLARED/SURRENDERED TOTAL UNDISCL OSED INCOME OF RS.9,72,000/- WHICH INCLUDED INCOME FROM LIQUOR BUS INESS IN HIS HANDS AND NOT IN THE HANDS OF ASSESSEE FIRM (KINDLY REFER TO PAPER BOOK PAGE 1 TO 4), PLYING OF BUS ANAND BROTHERS PVT LTD. SALE OF SHOP AND HOUSE EXPENSES. VII) 16.02.1996: THAT FOR SEVEN YEARS AFTER HE MAD E SURRENDER IN HIS HANDS FOR HIS LIQUOR BUSINESS (KINDLY REFER TO PAPE R BOOK PAGE 1 TO 4) MR PRITAM SINGH VIDE HIS LETTER TO CIT AMBALA CO NCOCTED A FRESH STORY TO AVOID PAYMENT OF TAXES AND THEREBY STATED THAT B ALDEV SINGH IS OPERATING HIS BUSINESS FROM SAMRALA WHICH IS SELF S ERVING STATEMENT. SUCH STATEMENTS DO NOT VEST POWERS IN THE HANDS OF REVENUE TO TREAT ANYONE AS ASSESSEE. 16. THE LEARNED D.R. FOR THE REVENUE POINTED OUT TH AT ALL THE PROCEEDINGS BEFORE THE CIT (APPEALS) AND THE TRIBUN AL BOTH IN THE EARLIER ROUND AND IN THE PRESENT ROUND HAD BEEN FIL ED BY SHRI BALDEV SINGH. IT WAS FURTHER CONTENDED BY THE LEARNED D.R . FOR THE REVENUE THAT 9 THE ISSUE WAS SET ASIDE TO THE FILE OF THE ASSESSIN G OFFICER WITH LIMITED MANDATE AND THE PRESENT ORDER HAS BEEN PASSED BY T HE ASSESSING OFFICER FOLLOWING THE DIRECTIONS OF THE TRIBUNAL. THE LEAR NED D.R. FOR THE REVENUE FURTHER PLACED RELIANCE ON THE RATIO LAID D OWN BY THE HON'BLE MADHYA PRADESH HIGH COURT IN RAMPAL THAKURDIN GUPTA (SUPRA). 17. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE PRESENT PROCEEDINGS BEFORE US ARE IN THE SECOND ROU ND AS THE EARLIER PROCEEDINGS WERE SET ASIDE TO THE ASSESSING OFFICER WITH DIRECTIONS TO CARRY OUT ENQUIRIES AND TO ESTABLISH THE STATUS OF THE ASSESSEE VIS-A-VIS M/S BALDEV SINGH & CO. THE TRIBUNAL (SUPRA) VIDE O RDER DATED 31.3.2009 HAD CONSIDERED THE CLAIM OF THE ASSESSEE AND STAND OF THE DEPARTMENT AND ALSO THE LITIGATION BEFORE THE HON'B LE HIGH COURT AND HAD DIRECTED THE REVENUE TO CARRY OUT THE EXERCISE IN ORDER TO ESTABLISH AS TO WHETHER SHRI BALDEV SINGH WAS PARTNER IN M/S BAL DEV SINGH & CO. BEFORE THE HON'BLE PUNJAB & HARYANA HIGH COURT THE ASSESSEE HAD FILED WRIT PETITION IN WHICH HE DENIED BEING A PARTNER IN M/S BALDEV SINGH & CO. CONSIDERING THE ABOVE SAID PLEADINGS OF THE AS SESSEE AND IN VIEW OF THE OBSERVATIONS MADE BY THE HON'BLE HIGH COURT, TH E TRIBUNAL OBSERVED OSTENSIBLY, THE FIRM HAS CARRIED OUT LIQUOR BUSINES S BY OBTAINING VENDS IN AUCTION FROM THE EXCISE AUTHORITIES. THE RECORD OF THE AUCTION OF LIQUOR VENDS CONDUCTED BY THE EXCISE AND TAXATION D EPARTMENT IN AMBALA DISTRICT FOR THE YEARS IN QUESTION IS A RELE VANT AND NECESSARY EVIDENCE TO ESTABLISH THE TRUTH . IT WAS FURTHER OBSERVED BY THE TRIBUNAL THAT IN ORDER TO CARRY OUT THE AFORESAID EXERCISE, THE C OUNSEL FOR THE RESPONDENT HAS ALSO MADE AN OFFER TO COOPER ATE AT THE LEVEL OF THE ASSESSING OFFICER. THE LEARNED D.R. HAS NO OBJ ECTION TO THE SAME. I, THEREFORE, SET ASIDE THE ORDER OF THE CO MMISSIONER OF INCOME - TAX (A) AND DIRECT THE ASSESSING OFFICER TO CARRY O UT THE AFORESAID 10 EXERCISE AND THEREAFTER CONFRONT THE ASSESSEE WITH THE RELEVANT MATERIAL. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE A ND THE MATERIAL ON RECORD, THE ASSESSING OFFICER SHALL PASS AN ORDER A FRESH ON THIS ISSUE . THE ASSESSING OFFICER OBTAINED THE RECORD FROM THE EXCISE & TAXATION DEPARTMENT, THE CONTENTS OF WHICH ARE INCORPORATED UNDER PARA 11 AT PAGES 6 TO 8 IN WHICH IT WAS ESTABLISHED THAT THE L IQUOR VENDS HAD BEEN AWARDED TO M/S BALDEV SINGH & CO., THE ASSESSEE, WH ICH CONSTITUTED OF SEVERAL PERSONS INCLUDING SHRI BALDEV SINGH. THE S IGNATURE/S OF SHRI BALDEV SINGH WERE THERE ON THE SAID DOCUMENTS FURNI SHED BEFORE THE EXCISE & TAXATION DEPARTMENT FOR ISSUE OF THE LIQUO R VENDS AND ALSO ON THE DOCUMENTS UNDER WHICH THE SAID LIQUOR VENDS HAD BEEN ISSUED TO M/S BALDEV SINGH & CO. THE LEARNED A.R. FOR THE ASSESS EE HAS FAIRLY CONCEDED THAT THE SAID LIQUOR VEND WAS ISSUED IN TH E NAME OF SHRI BHAGAT SINGH & CO. AND THE ASSESSEE HAD SIGNED THE SAID DO CUMENTS REFERRED TO BY THE ASSESSING OFFICER. HOWEVER, THE LEARNED A.R . FOR THE ASSESSEE HAS VEHEMENTLY STATED THAT THE BUSINESS WAS NOT RUN BY THE ASSESSEE THOUGH THE LICENCE WAS ISSUED TO THE ASSESSEE. TH E SECOND PLEA OF THE LEARNED A.R. FOR THE ASSESSEE WAS THAT THE SURRENDE R WAS MADE BY SHRI PRITAM SINGH DURING THE COURSE OF SEARCH PROCEEDING S CONDUCTED AT HIS PREMISES AND SUCH SURRENDER OF INCOME COULD NOT BE HELD TO BE ASSESSABLE IN THE HANDS OF THE ASSESSEE. THE LEARNED A.R. FOR THE ASSESSEE ALSO SUBMITTED THAT NO PARTNERSHIP DEED WAS FILED BY SHR I PRITAM SINGH, NOR ANY SUCH DOCUMENT WAS CONFRONTED BY THE ASSESSING OFFICER TO THE ASSESSEE. 18. AS POINTED OUT IN THE PARAS HEREINABOVE, THIS I S THE SECOND ROUND OF PROCEEDINGS WHERE MANDATE OF THE TRIBUNAL IS LIM ITED. IN THE FIRST ROUND OF PROCEEDINGS BEFORE THE TRIBUNAL THE LEARNE D A.R. FOR THE ASSESSEE HAD FAIRLY CONCEDED THAT HE HAD NO OBJECTI ON IF THE EXERCISE 11 OBSERVED IN THE ORDER OF THE HON'BLE HIGH COURT WAS CARRIED OUT. IN VIEW OF THE SAID CONCESSION OF THE LEARNED A.R. FOR THE ASSESSEE AND ALSO KEEPING IN MIND THAT NO PARTNERSHIP DEED WAS FILED EITHER BY SHRI PRITAM SINGH OR WAS CONFRONTED BY THE REVENUE, THE ALTERNA TE EXERCISE SUGGESTED BY THE TRIBUNAL WAS TO LOOK THROUGH THE R ECORD OF AUCTION OF LIQUOR VENDS CONDUCTED BY THE EXCISE & TAXATION DEP ARTMENT. THE SAID DOCUMENTS WERE CONSIDERED AS NECESSARY EVIDENCE TO ESTABLISH THE TRUTH. THE ASSESSING OFFICER HAD CALLED FOR THE SAID RECOR D AND THE DOCUMENTS WERE CONFRONTED TO THE ASSESSEE AND THE OBJECTION R AISED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER THAT HE HAD NEVER PART ICIPATED IN THE EXCISE PROCEEDINGS WAS REJECTED IN VIEW OF THE CONCRETE EV IDENCE IN THE SHAPE OF RECORD OF AUCTION AND THE ALLOTMENT OF LIQUOR VE NDS CONDUCTED BY THE EXCISE & TAXATION DEPARTMENT DURING THE FINANCIAL Y EARS 1984-85 AND 1985-86, WHICH DOCUMENTS WERE DULY SIGNED BY THE AS SESSEE, WHICH HAVE BEEN ACCEPTED TO BE THE SIGNATURE OF THE ASSESSEE B Y THE LEARNED A.R. FOR THE ASSESSEE BEFORE US. IN THE ENTIRETY OF THE FAC TS AND CIRCUMSTANCES WE FIND NO MERIT IN THE PLEA OF THE ASSESSEE THAT THOU GH THE LIQUOR VEND WAS ISSUED IN HIS NAME BUT BUSINESS WAS NOT CARRIED ON BY THE ASSESSEE. THE ASSESSEE HAD FAILED TO PRODUCE ANY EVIDENCE TO ESTA BLISH THAT THE SAID BUSINESS WAS CARRIED ON BY ANY OTHER PERSON OTHER T HAN THE PERSON TO WHOM THE SAID VEND WAS ALLOTTED. 19. THE PLEA OF THE ASSESSEE THAT HE WAS ONLY THE N AME LENDER TO OBTAIN THE LICENCE FOR ISSUE OF LIQUOR VENDS AND HAD NOT R UN THE BUSINESS, CANNOT HOLD IN VIEW OF THE RATIO LAID DOWN BY THE HON'BLE MADHYA PRADESH HIGH COURT IN RAMPAL THAKURDIN GUPTA (SUPRA). THE HON'B LE MADHYA PRADESH HIGH COURT OBSERVED AS UNDER: THE ASSESSEE HIMSELF HAS ACTED AS A CONTRACTOR AND SIGNED ALL THE PAPERS BEFORE THE EXCISE DEPARTMENT AND TOOK A CONTRACT OF FOUR YEARS THEN HE HAS TO ANSWER FOR THE TAX LIABILITY ALSO. IT IS TOO BEL ATED A STAGE TO 12 REPRESENT THAT BEHIND HIM SOMEBODY ELSE WAS THE REA L OWNER AND HE IS ONLY THE REPRESENTATIVE OF THAT. SUCH ARGUMENT C ANNOT BE COUNTENANCED FOR THE SIMPLE REASON THAT HE SIGNED T HE CONTRACT WITH THE EXCISE DEPARTMENT OF THE STATE OF M. P. WHICH I S A STATUTORY CONTRACT AND IT IS HE WHO IS LIABLE TO HAVE LIFTED THE REQUISITE AMOUNT OF THE LIQUOR, THEREFORE, HE WAS THE REAL CONTRACTOR A ND HE MIGHT BE ACTING AT THE INSTANCE OF SOMEBODY ELSE; BUT HE CANNOT ESC APE THE LIABILITY FOR ANY BREACH COMMITTED BY HIM ARISING OUT OF THE LIQU OR CONTRACT IN THE STATE OF M. P. THEREFORE, HE WAS THE PERSON RECOGNISED TO BE THE REAL CONTRACTOR WITH THE STATE OF M. P. AND FOR ANY PROF IT AND LOSS ARISING OUT OF THE CONTRACT, HE HAS TO PAY THE TAX. IN THIS VIE W OF THE MATTER, WE OF THE OPINION THAT THE VIEW TAKEN BY THE TRIBUNAL APPEARS TO BE JUSTIFIED, AND THE AFORESAID QUESTIONS ARE ANSWERED IN FAVOUR OF T HE REVENUE AND AGAINST THE ASSESSEE AND THERE IS NO REASON FOR US TO TAKE A DIFFERENT VIEW FROM THE VIEW TAKEN BY THE TRIBUNAL. WE ANSWER ALL THE AFORE SAID QUESTIONS IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE. ' 20. THE LEARNED A.R. FOR THE ASSESSEE HAD ALSO VEHE MENTLY OBJECTED TO THE ASSESSABILITY OF THE QUANTUM OF INCOME IN THE H ANDS OF THE ASSESSEE. DURING THE COURSE OF HEARING OF THE PRESENT APPEAL, IT WAS PUT TO THE LEARNED A.R. FOR THE ASSESSEE THAT WHETHER ANY APPE AL OR CROSS OBJECTION WERE FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT (APPEALS), IN THE FIRST ROUND OF PROCEEDINGS WHEREIN THE CIT (APPEALS ) HAD ASSESSED THE QUANTUM OF INCOME IN THE HANDS OF THE ASSESSEE. TH E ORDER OF THE CIT (APPEALS) DATED 11.3.2008 HAVING ATTAINED FINALITY UNDER WHICH THE INCOME WAS QUANTIFIED IN THE HANDS OF THE ASSESSEE, WE FIND NO MERIT IN THE PLEAS RAISED BY THE ASSESSEE IN THIS REGARD AND THE SAME ARE DISMISSED. IN VIEW THEREOF, WE FIND NO MERIT IN TH E PRESENT GROUNDS OF APPEAL RAISED BY THE ASSESSEE AND THE SAME ARE REJE CTED. 21. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH DAY OF JANUARY, 2013. SD/- SD/- (T.R.SOOD) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 14 TH JANUARY, 2013 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH 13