Appeal Details
Counselvise Citation
[2013] 120 COUNSELVISE.COM (IT) 1962 (ITAT-PUNE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
5 year(s) 6 month(s) 30 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
21-03-2013
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
B
Next Hearing Date
16-07-2012
Assessment Year
2002-2003
Appeal Filed On
22-08-2007
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBER, AND SHRI R.S.PADVEKAR, JUDICIAL MEMBER. ITA.NO.1078/PN/2007 (ASSTT. YEAR : 1998-99) HARAKCHAND U.KHINVASRA (HUF), C/G.1 KONARK ESTATE CO-OP HOUSING SOCIETY LTD., OPP. POONA CLUB, PUNE 411001. .. APPELLANT VS. DCIT, CENTRAL CIRCLE-2, PUNE. .. RESPONDENT AND ITA.NO.1079/PN/2007 (ASSTT. YEAR : 2002-03) HARAKCHAND U.KHINVASRA (HUF), 2, NEETA TERRACE CO-OP SOCIETY LTD., MANGALDAS ROAD, PUNE 411001. .. APPELLANT VS. DCIT, CENTRAL CIRCLE-2(3), PUNE. .. RESPONDENT AND ITA.NO.1158/PN/2007 (ASSTT. YEAR : 2002-03) DCIT, CENTRAL CIRCLE-2, PUNE. .. APPELLANT VS. HARAKCHAND U.KHINVASRA (HUF), 2, NEETA TERRACE CO-OP SOCIETY LTD., MANGALDAS ROAD, PUNE 411001. .. RESPONDENT 2 ASSESSEE BY : SHRI DHARMESH SHAH DEPARTMENT BY : SHRI S.K.SINGH ORDER PER G.S.PANNU, AM : THIS IS AN APPEAL DIRECTED AGAINST THE ORDER OF TH E CIT(A)(CENTRAL), PUNE DATE 03.05.2007 WHICH IN TURN HAS ARISEN FROM AN ORDER PASSED BY THE ASSESSING OFFICER U/S.1 47 R.W.S. 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DA TED 30.03.2006 PERTAINING TO THE A.Y. 1998-99. 2. THE APPELLANT IS AN HUF AND A CO-OWNER OF THE PR OPERTY SITUATED AT VADGAONSHERI, PUNE. IT TRANSPIRES THAT THE RIGHTS IN THIS PROPERTY WERE TRANSFERRED BY THE ASSESSEE AND OTHER CO-OWNERS TO A CONCERN, M/S.MARIGOLD PREMISES PVT. LTD. (IN SHORT MPPL) AND THE RESULTANT CAPITAL GAIN WAS OFFERED BY THE ASSESSEE IN THE A.Y. 2002-03. THE ASSESSEE CONSTRUCTED A NEW HOUSE PROP ERTY OUT OF THE SALE CONSIDERATION RECEIVED ON THE TRANSFER OF LAND AND ALSO CLAIMED EXEMPTION IN TERMS OF SECTION 54F OF THE AC T. ON 09.11.2000, THERE WAS A SEARCH ACTION U/S.132(1) OF THE ACT AT THE RESIDENTIAL AND BUSINESS PREMISES OF THE MEMBERS OF VASCON GROUP AND AS A CONSEQUENCE, NOTICE U/S.158BD OF THE ACT W AS ISSUED TO THE ASSESSEE ON 25.09.2002 AND AS A RESULT, A BLOCK ASSESSMENT ORDER DATED 29.09.2004 WAS PASSED BY THE ASSESSING OFFICER U/S.158BD OF THE ACT, TAXING THE LONG TERM CAPITAL GAIN OF RS.10,58,04,003/- ON THE SALE OF THE PROPERTY AT VA DGAONSHERI AS UNDISCLOSED INCOME. ON AN APPEAL FILED BY THE ASSE SSEE AGAINST THE BLOCK ASSESSMENT ORDER, THE CIT(A) VIDE ORDER DATED 28.03.2005, DELETED THE ADDITION MADE ON ACCOUNT OF THE UNDISCL OSED INCOME. FURTHER, IT TRANSPIRES THAT ON 29.03.2005, THE ASSE SSING OFFICER RECORDED REASONS U/S.147 OF THE ACT TO THE EFFECT T HAT CERTAIN INCOME HAD ESCAPED ASSESSMENT FOR THE ASSESSMENT YE AR 1998-99, WHICH WAS THE CAPITAL GAIN ON THE TRANSFER OF THE V ADGAONSHERI PROPERTY AND ACCORDINGLY ON 30.03.2005, A NOTICE U/ S.148 OF THE ACT 3 WAS ISSUED. THE REASONS RECORDED BY THE ASSESSING OFFICER DATED 29.03.2005 READ AS UNDER: REASONS FOR THE BELIEF THAT INCOME HAS ESCAPED ASSE SSMENT- THE ASSESSEE IS A CO-OWNER OF THE PROPERTY SITUATED AT VADGOAN SHERI, S.NO. 15 ADMEASURING 45 ACRES AND 25 GUNTAS. THE OTHER CO-OWNERS ARE NINE LEGAL HEIRS OF LATE SHRI P.C. KHINVASARA, WHO HAD PURCHASED THE PROPERTY ALONG WITH THE ASSESSEE IN 1966. THE OTHER NI NE CO-OWNER OF THE PROPERTY (HALF SHARE IN THE PROPERTY), NAMELY SHRI MO THILAL P. KHINVASARA, SHRI ANIL P. KHINVASARA, SHRI RATANMALA AND MANOJ H. K HINVASARA, SMT. SUREKHABAI MUTHA, SMT. SHAKUNTALA GUGALE, SMT. NIRMALABA I GANDHI, SMT. SHANTABAI GANDHI, SMT. SARLABAI BORA AND SMT. KAML ABAI GUNDECHA HAVE SHOWN/ RETURNED THE CAPITAL GAINS ON THE TRANSFE R OF THE RIGHTS OF THE AFORESAID PROPERTY IN ASSESSMENT YEAR 1998-99 (TOTAL SALE CONSIDERATION IS RS.10.00 CRORES) AND THEREFORE, THE CAPITAL GAINS SHOWN BY THE ABOVE MENTIONED ASSESSES WERE ASSESSED IN THE ASST. YEAR 19 98-99. 2. THE ASSESSEE HAS ENTERED INTO AN AGREEMENT DATED 03.10.1997 FOLLOWED BY THE IRREVOCABLE POWER OF ATTORNEY IN FAVOU R OF NOMINEE OF M/S MARIGOLD PREMISES PVT. LTD., NAMELY, SHRI RAJAN KHINVAS ARA AND SHRI R. VASUDEVAN ON THE SAME DATE (03.10.1997) TO TRANSFER TH E RIGHTS AND INTEREST IN THE ABOVE MENTIONED PROPERTY TO M/S MAR IGOLD PREMISES PVT. LTD. AND RECEIVED PAYMENTS AGGREGATING RS. 67.96 LACS. THE ASSESSEE HAD APPLIED FOR ISSUE OF CLEARANCE TO THE APPROPRIATE AU THORITY (FORM 37) ON 05.12.1997, WHICH THEREFORE, WAS NOT FOR OWN DEVELOPMENT OF THE PROPERTY. THE PURCHASER OF THE PROPERTY, NAMELY, M/S MARIGOLD P REMISES PVT. LTD., THEREAFTER STARTED THE DEVELOPMENT ACTIVITIES, SUCH AS GETTING DEVELOPMENT PLAN SANCTIONED BY PUNE MUNICIPAL CORPORATION, LEVELIN G OF LAND, ROAD DEVELOPMENT, BOUNDARY WALL CONSTRUCTION, ENTERING INTO CONSTRUCTION CONTRACT WITH THE CONTRACTOR, SALE OF THE FLAT/BUNGLOWS PRIOR TO 31.03.1998, WHICH ESTABLISHES THAT THE ASSESSEE HAS HANDED OVER / ALLOWED THE POSSESSION OF THE PROPERTY UNDER REFERENCE. THIS THE REFORE, IS NOTHING BUT TRANSFER U/S 2 (47)(V) OF THE INCOME TAX ACT AS THE C ONDITIONS REQUIRED TO BE FULFILLED FOR TRANSFER U/S 53A OF THE TRANSFER OF THE PROPERTY ACT HAVE BEEN FULFILLED BY THE ASSESSEE. 3. THE CERTIFICATE DATED 16.05.1998 ISSUED BY HARIYAN I & CO., ADVOCATES AND SOLICITORS, REGARDING RIGHTS OF M/S MAR IGOLD PREMISES PVT. LTD. IN THE AFORESAID PROPERTY AT S.NO. 15 VADGAORI SHER I CLEARLY STATES THAT M/S MARIGOLD PREMISES PVT. LTD. IS ENTITLED TO THE SAID PROPERTY AND / ALL OTHERWISE DEAL AND DEVELOP THE SAID PROPERTY AS IT HAS A CLEAR, FREE AND MARKETABLE TITLE TO THE SAID PROPERTY. THIS CERTIFICATE HAS BEEN ISSUED ON THE BASIS OF VARIOUS DOCUMENTS INCLUDING THE TRANSFE R DEED AND IRREVOCABLE POWER OF ATTORNEY OF THE ASSESSEE DATED 03.10.1997. TH E PURCHASER OF THE PROPERTY, THEREFORE, HAS TAKEN THE POSSESSION AS THE ASSESSEE HAS HANDED OVER THE POSSESSION OF THE PROPERTY AND HAS WILLING LY PERFORMED ITS PART OF THE CONTRACT. THUS, EVEN ARRANGEMENTS CONFIRMING THE WILLINGNESS OF OWNERSHIP WITHOUT TRANSFER OF TITLE WOULD FALL U/S. 2(47)(V) OF THE I.T. ACT AS HELD BY THE HONBLE MUMBAI HIGH COURT IN THE CASE OF CHATURBHUJ D. KAPADIA VS. CIT 260 ITR 491. THUS INCOME BY WAY OF CAP ITAL GAINS WAS TO BE ASSESSED IN A.Y. 1998-99 IN THE CASE OF THE ASSESSE E AS HAD BEEN DONE 4 BY THE ABOVE MENTIONED NINE CO-OWNERS IN RESPECT OF T HE SAME LAND OBTAINED BY THEM FROM THE SAME SOURCE AND DURING THE SAM E PERIOD. 4. THE CASE OF CHATHURBHUJ D. KAPADIA VS. CIT 260 ITR 491 (MUM), IS SQUARELY APPLICABLE IN THE CASE OF ASSESSEE BECAUSE THE TRANSFER AGREEMENT DATED 03.10.1997 ESTABLISHES THAT, IN THE GU ISE OF AGREEMENT FOR SALE, DEVELOPMENT AGREEMENT IS CONTEMPLATED, UNDE R WHICH THE DEVELOPER HAS APPLIED/RECEIVED FOR PERMISSION FROM VA RIOUS AUTHORITIES EITHER UNDER POWER OF ATTORNEY OR OTHERWISE IN THE N AME OF THE ASSESSEE, THEN THE A.O. IS ENTITLED TO TAKE THE DATE OF CONTRACT AS THE DATE OF TRANSFER IN VIEW OF SEC. 247(V) OF THE I.T. ACT. THE DEVELOPER HA S OBTAINED A COMMENCEMENT CERTIFICATE IN A.Y. 1998-99 AND HAS SOLD B UNGLOWS WORTH RS. 8,30,30,000/- TO THE ABOVE NINE CO-OWNERS PRIOR TO 31 .3.99 AND THAT IS WHY THE ABOVE MENTIONED NINE ASSESSEES HAVE CLAIMED D EDUCTION U/S 54F OF THE INCOME TAX ACT IN THEIR RETURN FOR A.Y. 1998-99 AND THEREFORE, IT IS ESTABLISHED THAT THE ASSESSEE HAS ALLOWED POSSESSION OVER HIS RIGHT IN THE PROPERTY SITUATED AT VADAGAON SHERI TO THE TRANSFERE E, NAMELY, M/S MARIGOLD PREMISES PVT. LTD. 5. THE CAPITAL GAIN IN THE HANDS OF THE ASSESSEE, IS B EING WORKED OUT ASUNDER: TOTAL SALE CONSIDERATION RS.11,55,00,000/- COST OF ACQUISITION IN THE HANDS OF ASSESSEE IS BEING TAKEN @ AS SHOWN BY THE ABOVE NINE CO-OWNERS WHICH COMES TO RS.29,29,304/- AFTER INDEXATION, THE COST OF ACQUISITION COMES TO RS.29,29,304 X 331 = (-) RS. 96,95,997/- 100 CAPITAL GAINS RS. 10,28,04,003/- 6. REASSESSMENT PROCEEDINGS U/S 148 OF THE INCOME T AX ACT SHOULD NOT BE UNDERTAKEN ON THE BASIS OF FACTS OF UNDISCLOS ED INCOME REVEALED AS A RESULT OF SEARCH, BECAUSE UNDISCLOSED INCOME REVEALE D AS A RESULT OF SEARCH CAN BE BROUGHT TO TAX ONLY IN THE BLOCK ASSESSMENT . 7. WHAT IS BEING TRIED TO BRING TO TAX HERE IS NOT UNDISCLOSED INCOME, WITHIN THE MEANING OF 158B(B) OF THE INCOME TAX ACT, F OR IT IS NOT AN INCOME WHICH HAS NOT BEEN OR WOULD NOT HAVE BEEN DISCLOSED FOR THE PURPOSES OF THE ACT (AS ALSO HELD BY THE CIT(A)-II, PUNE, IN HIS ORD ER DATED 28.03.2005) BUT WAS IS BEING BROUGHT TO TAX HERE IS THE INCOME CHARGEABLE TO TAX IN A PARTICULAR YEAR WHICH HAS ESCAPED ASSESSMENT IN THA T PARTICULAR YEAR I.E. ASSTT. YEAR 1998-99 WITHIN THE MEANING OF SECTION 147 OF THE INCOME TAX ACT. THIS PARTICULAR INCOME MAY HAVE BEEN DISCLOSED ELS EWHERE OR IN SOME OTHER ASSESSMENT YEAR BUT NOT IN PARTICULAR ASSESSM ENT YEAR IN WHICH IT WAS CORRECTLY ASSESSABLE AS PER FACTS AND LAW AS LAI D DOWN BY HONBLE MUMBAI HIGH COURT IN THE CASE OF CHATHURBHUJ D. KAPAD IA VS. CIT 260 ITR 491 (MUM) AND THEREFORE, I AM SATISFIED AND HAVE REAS ON TO BELIEVE THAT INCOME FROM CAPITAL GAINS AT RS.10,58,04,003/- CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT IN A.Y. 1998-99. SD/- (P.W. ATHALYE) PUNE DY. COMMISSIONER OF INCOME TAX DATE : 29.03.2005 CENTRAL CIR. 2(3), 5 PUNE 3. NOTABLY, AS PER THE REASONS RECORDED, THE STAND OF THE REVENUE IS THAT CAPITAL GAIN ON THE SALE OF PROPERTY AT VAD GAONSHERI IS TAXABLE IN THE A.Y. 1998-99 IN VIEW OF THE TRANSFER AGREEMENT DATED 03.10.1997 WHEREBY THE DEVELOPER, I.E., MPPL, HAD A PPLIED FOR PERMISSION FROM VARIOUS AUTHORITIES EITHER UNDER PO WER OF ATTORNEY OR OTHERWISE IN THE NAME OF THE ASSESSEE. IN THE CO NSEQUENT ASSESSMENT MADE U/S.143(3) R.W.S. 147 OF THE ACT DA TED 30.03.2006, THE ASSESSING OFFICER HAS TAXED THE LON G TERM CAPITAL GAINS OF RS.10,58,04,003/- ON THE SALE OF PROPERTY AT VADGAONSHERI AS THE INCOME OF THE ASSESSEE ASSESSABLE FOR A.Y. 1 998-99 ON SUBSTANTIVE BASIS. THE AFORESAID ACTION OF THE ASS ESSING OFFICER HAS BEEN UPHELD BY THE CIT(A) VIDE IMPUGNED ORDER DATED 03.05.2007 AND HENCE THE PRESENT APPEAL OF THE ASSESSEE BEFORE US. 4. PRESENTLY, THE ASSESSEE HAS RAISED MULTIPLE GROU NDS OF APPEAL, BUT ESSENTIALLY REFLECTING FOUR-FOLD GRIEVANCE. TH E FIRST GRIEVANCE IS ON A POINT OF LAW, WHEREBY THE PROCEEDINGS INITIATE D BY THE ASSESSING OFFICER BY INVOKING SECTION 147/148 OF TH E ACT HAVE BEEN CHALLENGED AS BEING INVALID AND VOID AB INITIO. THE SECOND GRIEVANCE IS TO THE EFFECT THAT THE INCOME TAX AUTHORITIES HA VE ERRED IN ASSESSING THE CAPITAL GAIN ON SALE OF VADGAONSHERI PROPERTY IN THE IMPUGNED A.Y. OF 1998-99 AS AGAINST THE A.Y. 2002-0 3 WHICH, ACCORDING TO THE ASSESSEE, IS THE CORRECT YEAR OF A SSESSMENT SINCE THE TRANSFER OF CAPITAL ASSET IN QUESTION IS CLAIME D TO HAVE BEEN EFFECTED DURING THE PREVIOUS YEAR RELEVANT TO THE A .Y. 2002-03. THIRDLY, IT IS CANVASSED THAT THE MANNER OF COMPUTI NG THE CAPITAL GAIN IS ALSO WRONG IN AS MUCH AS THE COST OF ACQUIS ITION AND THE FAIR MARKET VALUE OF THE PROPERTY AS ON 01.04.1981 HAS B EEN ADOPTED BY THE ASSESSING OFFICER AT RS.29,29,304/- AS AGAINST RS.3,01,66,500 ADOPTED BY THE ASSESSEE. LASTLY, THE ASSESSEE IS A LSO AGGRIEVED THAT WHILE ASSESSING THE LONG TERM CAPITAL GAIN IN THIS YEAR, THE CLAIM OF EXEMPTION U/S.54F OF THE ACT HAS BEEN UNJUSTLY D ENIED. 6 5. AT THE TIME OF HEARING THE FIRST AND THE FOREMOS T GRIEVANCE ARTICULATED BY THE LD. COUNSEL FOR THE ASSESSEE IS WITH REGARD TO THE INITIATION OF PROCEEDINGS BY THE ASSESSING OFFICER BY INVOKING SECTION 147/148 OF THE ACT, WHICH ACCORDING TO HIM ARE BAD IN LAW AND VOID AB INITIO. THE POINT SOUGHT TO BE MADE OU T IS THAT THE IMPUGNED PROCEEDINGS COULD NOT BE INITIATED IN RESP ECT OF AN INCOME WHICH HAS ALREADY BEEN SUBJECTED TO A BLOCK ASSESSMENT FRAMED U/S.158BD OF THE ACT. IT IS VEHEMENTLY POIN TED OUT THAT IN CASE THE ASSESSING OFFICER PROCEEDS TO MAKE A BLOCK ASSESSMENT U/S.158BC OR 158BD OF THE ACT, CONSEQUENT TO A SEAR CH ACTION U/S.132(1) OF THE ACT, THE ASSESSING OFFICER CANNOT , BASED ON THE SAME MATERIAL, FORM AN OPINION THAT AN INCOME HAS E SCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147/148 OF THE ACT, ESPECIALLY WHEN SAME ADDITION MADE IN THE BLOCK ASS ESSMENT HAS BEEN FOUND NOT TENABLE IN THE APPELLATE PROCEEDINGS . IN SUPPORT FOR THE AFORESAID PROPOSITION, RELIANCE HAS BEEN PLACED ON VARIOUS DECISIONS: I) SMT.MIRA ANANTA NAIK VS. DCIT 15 DTR 8 (BOM.) II) CARGO CLEARING AGENCY VS. JCIT 307 ITR 1 (GUJ.) III) CIT VS. C.SIVANANDAN 52 DTR 428 (KER.) IV) M.P.RAMACHANDRAN VS. DCIT 8 ITR (TRIB) 655 (MUM). V) VISHWANATH PRASAD ASHOK KUMAR SARRAF VS. CIT & ORS. 235 CTR 367 (ALL.) VI) IL AND FS INVESTMENT MANAGERS LTD. VS. ITO & ORS. 298 ITR 32 (BOM.) 6. IN ORDER TO APPRECIATE THE AFORESAID POSITION CA NVASSED BY THE ASSESSEE, IT WOULD BE APPROPRIATE TO BRIEFLY REFER TO THE FOLLOWING FACTS. THE APPELLANT HUF IS CO-OWNER OF A PROPERTY AT VADGAONSHERI, PUNE. THE ASSESSEE ALONGWITH THE OTH ER CO-OWNERS ENTERED INTO AN AGREEMENT WITH MPPL VIDE VARIOUS SI MILARLY WORDED AGREEMENTS DURING THE F.Y. 1997-98 WHEREBY THEY AGR EED TO TRANSFER THE ENTIRE LAND EXCEPT 50,000 SQ.FT., IN T HE NAME OF MPPL AND THE OWNERSHIP OF 50,000 SQ.FT., REMAINED WITH T HE ASSESSEE. THE ASSESSEE ENTERED INTO A DEVEVELOPMENT AGREEMENT DATED 28.03.2002 WHEREBY THE DEVELOPMENT RIGHTS OF THE PR OPERTY WERE PASSED ON TO MPPL AND A CONVEYANCE DEED TRANSFERRIN G OF THE SAID RIGHT WAS ALSO EXECUTED SIMULTANEOUSLY. BASED ON T HE ABOVE, 7 ASSESSEE COMPUTED CAPITAL GAINS AND OFFERED THE SAM E AS LONG TERM CAPITAL GAINS DURING THE A.Y. 2002-03 IN THE RETURN OF INCOME FILED ON 08.08.2002 DECLARING TOTAL INCOME OF RS.80,69,06 3/- INCLUSIVE OF LONG TERM CAPITAL GAIN OF RS.76,50,000. A SEARCH A CTION WAS CONDUCTED AT THE PREMISES OF THE VASCON GROUP ON 09 .11.2000 AND AS A RESULT OF WHICH NOTICE U/S.158BD OF THE ACT WE RE ISSUED TO THE ASSESSEE ON 25.09.2002 IN ORDER TO FRAME A BLOCK AS SESSMENT TO ASSESS THE UNDISCLOSED INCOME FOR THE RELEVANT BLOC K PERIOD ENDING ON 09.11.2000. THE CAPITAL GAIN SHOWN BY THE ASSES SEE IN THE A.Y. 2002-03 WAS NOT ACCEPTED BY THE DEPARTMENT DURING T HE COURSE OF BLOCK ASSESSMENT PROCEEDINGS ON THE GROUND THAT THE TRANSFER OF ASSET WAS HELD TO HAVE TAKEN PLACE DURING THE F.Y. 1997-98 RELEVANT TO THE A.Y. 1998-99. ACCORDINGLY, VIDE ORDER U/S.1 58BD DATED 29.9.2004 BLOCK ASSESSMENT U/S.158BC R.W.S. 158BD W AS FINALIZED WHEREIN LONG TERM CAPITAL GAIN WAS COMPUTED AT RS.10,58,04,003/- AND ASSESSED TO TAX. IN APPEAL, THE CIT(A) VIDE HIS ORDER DATED 28.03.2005, HELD THAT THE LONG TERM CAPITAL GAINS DID NOT CONSTITUTE UNDISCLOSED INCOME WITHIN THE ME ANING OF SECTION 158B(B) OF THE ACT AND THE ADDITION MADE BY THE ASS ESSING OFFICER WAS DELETED. THE DEPARTMENT PREFERRED AN APPEAL AG AINST THE SAID ORDER BEFORE THE TRIBUNAL. IN THE MEANWHILE, THE A SSESSING OFFICER ALSO TOOK UP FOR SCRUTINY THE RETURN OF INCOME FILE D BY THE ASSESSEE FOR A.Y. 2002-03 WHEREIN VIDE ORDER DATED 31.03.200 5, THE LONG TERM CAPITAL GAINS DECLARED WAS ASSESSED ON PROTECT IVE BASIS. 7. IN THE ABOVE BACKGROUND THE CLAIM OF THE ASSESSE E IS THAT ONCE THE FATE OF THE SUBSTANTIVE ADDITION MADE IN THE BL OCK ASSESSMENT HAD BECOME FINAL, THE ASSESSING OFFICER WAS NOT ENT ITLED TO MAKE THE VERY SAME ADDITION BY REOPENING THE ASSESSMENT FOR A.Y. 1998-99 U/S.147/148 OF THE ACT. AS PER THE ASSESSEE, THE S UBSEQUENT ASSESSMENT MADE U/S.143(3) R.W.S. 147 OF THE ACT DA TED 30.3.2006 IN ORDER TO TAX THE SAME INCOME WAS LACKING IN JURI SDICTION. AS PER THE ASSESSEE, THE ISSUE REGARDING THE TAXABILITY OF THE CAPITAL GAIN ON TRANSFER OF THE PROPERTY AT VADGAONSHERI WAS A S UBJECT MATTER OF 8 CONSIDERATION IN THE BLOCK ASSESSMENT FRAMED U/S.15 8BC/158BD OF THE ACT DATED 29.09.2004, THE SAME POINT CANNOT BE TAKEN UP BY THE ASSESSING OFFICER TO HOLD THAT ANY INCOME HAD E SCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE ACT FOR THE ASSESSMENT YEAR 1998-99 ESPECIALLY IN VIEW OF THE F ACT THAT THE SAME ADDITION MADE IN THE BLOCK ASSESSMENT HAS BEEN CONSIDERED TO BE UNTENABLE BY THE CIT(A). 8. ON THE OTHER HAND, THE PLEA OF THE LD. DR IS THA T THE ASSESSMENT MADE U/S.158BC/158BD OF THE ACT WAS ONLY TO ASSESS THE UNDISCLOSED INCOME FOUND AS A RESULT OF THE SEA RCH, WHEREAS THE SCOPE OF THE PRESENT PROCEEDINGS INITIATED U/S.148 OF THE ACT IS TO TAX AN INCOME WHICH HAD ESCAPED ASSESSMENT WITHIN T HE MEANING OF SECTION 147 OF THE ACT. IN THIS CONNECTION, THE LD. DR REFERRED TO THE OBSERVATION MADE BY THE ASSESSING OFFICER IN TH E REASONS RECORDED, WHICH WE HAVE REPRODUCED IN THE EARLIER P ART OF THIS ORDER, IN ORDER TO JUSTIFY THE IMPUGNED ASSESSMENT PROCEED INGS. 9. IT IS EVIDENT THAT THE ENTIRE CONTROVERSY REVOLV ES AROUND THE TAXABILITY OF THE GAIN ACCRUING TO THE ASSESSEE AS A RESULT OF AN AGREEMENT EXECUTED WITH MPPL WHEREBY THE ASSESSEE T RANSFERRED ITS SHARE OF THE DEVELOPMENT RIGHTS IN THE LAND AT VADG AONSHERI. THE ASSESSEE HAD DECLARED CAPITAL GAINS ON THE BASIS OF THE DEVELOPMENT AGREEMENT DATED 28.03.2002 EXECUTED WITH MPPL IN TH E A.Y. 2002-03, WHEREAS AS PER THE REVENUE, THE SAME WAS L IABLE TO BE ASSESSED FOR A.Y. 1998-99 IN TERMS OF THE AGREEMENT ENTERED WITH MPPL DURING THE F.Y. 1997-98. OSTENSIBLY, THE AFOR ESAID ASPECT OF THE MATTER WAS CONSIDERED BY THE ASSESSING OFFICER WHILE FRAMING BLOCK ASSESSMENT U/S.158BD OF THE ACT DATED 25.09.2 004. NO DOUBT, SUCH BLOCK ASSESSMENT HAS BEEN FOUND LACKING BY THE CIT(A) IN AS MUCH AS THE ADDITION MADE HAS BEEN DELETED ON THE GROUND THAT THE LONG TERM CAPITAL GAINS DID NOT CONSTITUTE UNDISCLOSED INCOME WITHIN THE MEANING OF SECTION 158B(B) OF THE ACT VIDE ORDER DATED 28.03.2005. IN THIS BACKGROUND, HAVING PERUS ED THE REASONS 9 RECORDED BY THE ASSESSING OFFICER ON 29.03.2005, IN ORDER TO INITIATE PROCEEDINGS U/S.147/148 OF THE ACT, IT IS FACTUALLY EVIDENT THAT THE ISSUE CONTEMPLATED BY THE ASSESSING OFFICER IN THE IMPUGNED PROCEEDINGS U/S.147/148 OF THE ACT, NAMELY TAXABILI TY OF LONG TERM CAPITAL GAINS ON TRANSFER OF LAND AT VADGAONSHER WA S A SUBJECT MATTER OF CONSIDERATION DURING THE BLOCK ASSESSMENT PROCEEDINGS U/S.158BD OF THE ACT. THEREFORE, IN THIS BACKGROUN D, ONE HAS TO EXAMINE AS TO WHETHER THE ASSESSING OFFICER WAS COR RECT IN LAW IN FORMING A BELIEF THAT THE VERY SAME INCOME HAS ESCA PED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE ACT FOR TH E A.Y. 1998-99. 10. A SIMILAR SITUATION IN THE CASE OF ANOTHER CO-O WNER MOTILAL P.KHINSWARA (HUF) VIDE ITA NO.88/PN/2012 AND OTHERS DATED 28.02.2013 FOR A.Y. 1998-99 WAS A SUBJECT MATTER OF CONSIDERATION OF THE TRIBUNAL. THE FOLLOWING DISCUSSION IN THE S AID ORDER IS WORTHY OF NOTICE: 12. IN THE AFORESAID BACKGROUND, ONE HAS TO EXAMINE AS TO WHETHER THE PROCEEDINGS INITIATED BY THE ISSUANCE O F NOTICE U/S 148 OF THE ACT IS VALID OR NOT. THE HONBLE GUJARA T HIGH COURT IN THE CASE OF CARGO CLEARING AGENCY (SUPRA) HAS OBSE RVED THAT ONCE THE BLOCK ASSESSMENT U/S 158BA IN RELATION TO THE UNDISCLOSED INCOME FROM THE BLOCK PERIOD AS A CONSE QUENCE OF SEARCH IS CARRIED OUT, THE ASSESSING OFFICER WOULD NOT BE JUSTIFIED IN ISSUING NOTICE U/S 148 OF THE ACT FOR REOPENING SUCH ASSESSMENT. IN THIS CONTEXT, REFERENCE WAS MADE TO THE FIRST PROVISO BELOW SEC. 158BC(A) OF THE ACT WHICH SPECIF ICALLY CONTAINS A CAVEAT THAT NO NOTICE U/S 148 IS TO BE I SSUED FOR THE PURPOSES OF PROCEEDINGS UNDER CHAPTER XIV-B OF THE ACT. FURTHER, IT MAY ALSO BE NOTED THAT SO FAR AS THE IN COME ESCAPING ASSESSMENT IN THIS CASE I.E. ALLOWING OF DEDUCTION U/S 54F OF THE ACT IS CONCERNED, IT WAS ALREADY A SUBJECT MATT ER OF CONSIDERATION IN THE BLOCK ASSESSMENT. IN APPEAL, SUCH BLOCK ASSESSMENT HAS NOT BEEN HELD TO BE TENABLE. SO HOW EVER, IT WOULD NOT FOLLOW THAT SUCH INCOME CAN BE CONSTRUED AS ESCAPED INCOME CHARGEABLE TO TAX U/S 147 OF THE ACT. IN SI MILAR CIRCUMSTANCES, THE HONBLE HIGH COURT OF ALLAHABAD IN THE CASE OF VISHWANATH PRASAD ASHOK KUMAR SARAF VS. CIT & OR S. (2010) 235 CTR (ALL) 367 HAS HELD THAT ONCE A PARTI CULAR AMOUNT HAS BEEN CONSIDERED IN THE BLOCK ASSESSMENT IT CANN OT BE THEREAFTER TREATED AS AN ESCAPED INCOME WITHIN THE MEANING OF SEC. 147/148 OF THE ACT. 10 13. FURTHER, IN THE CASE OF CIT VS. C. SIVANANDAN ( 2011) 52 DTR (KER) 428, HONBLE KERALA HIGH COURT WAS CONSID ERING A SITUATION WHERE THE ASSESSING OFFICER HAD INITIATED PROCEEDINGS U/S 147/148 OF THE ACT, TO TAX CERTAIN INCOME WHICH ACCORDING TO THE REVENUE HAD ESCAPED ASSESSMENT. THE HONBLE KERALA HIGH COURT NOTICED THAT THE BLOCK ASSESSMENT WAS MA DE BY THE ASSESSING OFFICER BASED ON MATERIAL GATHERED DURING THE SEARCH U/S132 OF THE ACT AND ON THE BASIS OF THE SAME MATE RIAL AFTER BLOCK ASSESSMENT WAS CANCELLED BY THE APPELLATE AUT HORITIES, THE ASSESSING OFFICER PROCEEDED TO MAKE THE RE-ASSE SSMENT U/S 147 OF THE ACT. ACCORDING TO THE HONBLE HIGH COUR T, THE ASSESSING OFFICER HAD NO JURISDICTION TO ASSESS THE VERY SAME AMOUNT WHICH WAS CONSIDERED IN THE BLOCK ASSESSMENT . IN THIS REGARD, FOLLOWING OBSERVATIONS IN THE ORDER OF THE HONBLE HIGH COURT IS WORTHY OF NOTICE:- EVEN THOUGH BLOCK ASSESSMENT UNDER SECTION 158BC A ND INCOME ESCAPING ASSESSMENT UNDER SEC. 147 CAN PROBA BLY BE MADE FOR THE SAME PERIOD ON DIFFERENT BASIS, WE DO NOT THINK ASSESSMENTS COULD BE SUCCESSIVELY MADE ONE AF TER ANOTHER FOR THE SAME PERIOD UNDER THE PROVISIONS BA SED ON THE SAME MATERIALS. ONCE MATERIALS ARE GATHERED EIT HER DURING SEARCH UNDER SEC. 132 OR DURING SURVEY U/S 1 32A IT IS UPTO THE AO TO MAKE BLOCK ASSESSMENT U/S 158BC O R IF HE FEELS THAT INCOME ESCAPING ASSESSMENT IS CALLED FOR U/S 147, IT IS UPTO HIM TO ELECT BETWEEN THE TWO AND MA KE ASSESSMENT UNDER THE PROVISION HE FIND APPROPRIATE. HOWEVER, ONCE THE AO AFTER CONDUCTING SEARCH AND BA SED ON MATERIALS GATHERED DURING SEARCH U/S 132, PROCEE DS TO MAKE THE ASSESSMENT UNDER SEC. 158BC, THEN HE CANNO T, BASED ON THE SAME MATERIALS WHICH IN THIS CASE IS D EPOSIT AMOUNTS FOUND DURING SEARCH ASSESSMENT WAS CANCELL ED BY THE FIRST APPELLATE AUTHORITY. THE AO OBVIOUSLY CANNOT GET OVER THE FINDINGS IN THE ORDER OF THE FIRST APP ELLATE AUTHORITY AGAINST A BLOCK ASSESSMENT BY INVOKING PO WERS UNDER SEC. 147. DURING BLOCK ASSESSMENT, THE AO OBVIOUSLY CONSIDERED AS TO WHETHER BANK DEPOSITS IN THE NAMES OF FAMILY MEMBERS OF THE ASSESSEE FOUND DURIN G SEARCH REPRESENT HIS UNDISCLOSED INCOME BUT ACCEPTE D THE ASSESSEES CONTENTION THAT THE SAME BELONG TO HIS F AMILY MEMBERS. RIGHTLY OR WRONGLY ONLY THE INTERESTS FRO M THESE DEPOSITS WERE ASSESSED AS PART OF UNDISCLOSED INCOM E OF THE ASSESSEE FOR THE BLOCK PERIOD. IN APPEAL, THE C IT(A) CANCELLED THE ASSESSMENT ON INTEREST INCOME. WE ARE OF THE VIEW THAT THE AO CANNOT AFTER CANCELLATION OF B LOCK ASSESSMENT BY THE CIT(A) PROCEED TO MAKE AN INCOME ESCAPING ASSESSMENT FOR ASSESSING THE VERY SAME BAN K DEPOSITS AS ESCAPED INCOME. WE DO NOT THINK THE AO HAS JURISDICTION TO ASSESS THE VERY SAME AMOUNT, WHICH WAS CONSIDERED AND GIVEN UP WHILE MAKING BLOCK ASSESSME NT. EVEN THOUGH LEARNED COUNSEL SUBMITTED THAT DEPOSIT AMOUNTS WERE NOT CONSIDERED IN BLOCK ASSESSMENT, WE 11 CANNOT ACCEPT IT BECAUSE WHEN INTEREST FROM THE SAM E DEPOSITS WERE ASSESSED AS UNDISCLOSED INCOME OF THE BLOCK PERIOD, IT CAN BE LEGITIMATELY ASSUMED THAT T HE OFFICER CONSIDERED THE DEPOSIT AMOUNTS FOR ASSESSMENT BUT G AVE UP THE SAME. IN THIS CONTEXT, THE FINDINGS OF THE T RIBUNAL THAT REASSESSMENT UNDER SEC. 147 IS A RESULT OF CHA NGE OF OPINION OF THE AO CANNOT BE SAID TO BE ILLEGAL OR I NCORRECT BECAUSE WHAT WAS TREATED AS UNDISCLOSED INCOME IN B LOCK ASSESSMENT IS LATER TREATED ESCAPED INCOME IN ANOTH ER ROUND OF ASSESSMENT UNDER A DIFFERENT PROVISIONS OF THE ACT (SEC. 147) WHICH IN OUR OPINION IS IMPERMISSIBL E. 14. THE AFORESAID LEGAL POSITION IS ALSO IN LINE WI TH THE JUDGMENT OF HONBLE BOMBAY HIGH COURT IN THE CASE O F SMT. MIRA ANANTA NASIK VS. DY. CIT (I(INVESTIGATION) (20 09) 183 TAXMAN 40 (BOM). THE FOLLOWING OBSERVATIONS OF THE HONBLE HIGH COURT ARE WORTHY OF NOTICE:- THERE IS MUCH SUBSTANCE IN THE CONTENTIONS OF SHRI NADKARNI THAT THE SEARCH HAVING RESULTED IN BLOCK ASSESSMENT. IN THESE PROCEEDINGS THE INCOME TAX ASSESSED AND TAXED AFTER IT WAS BROUGHT TO THE NOTI CE OF THE AO. MERELY BECAUSE THE BLOCK ASSESSMENT WAS NO T UPHELD BY THE AUTHORITIES UNDER THE INCOME-TAX ACT, IT CANNOT BE REASON ENOUGH IN THIS CASE TO INVOKE SEC. 147 OF THE SAME. 15. IN THE BACKGROUND OF THE AFORESAID LEGAL POSITI ON, IN THE PRESENT CASE, IT EMERGES THAT THE PROCEEDINGS U/S 1 47 OF THE ACT HAD BEEN INITIATED SOLELY WITH THE OBJECTIVE OF SOM EHOW TAXING INCOME WHICH THE REVENUE COULD NOT SUCCESSFULLY DO AT THE TIME OF ASSESSMENT PROCEEDINGS U./S 143(3) OR IN THE BLO CK ASSESSMENT PROCEEDINGS U/S 158BC OF THE ACT. THOUG H THE BLOCK ASSESSMENT U/S 158BC AND ASSESSMENT OF AN INC OME U/S 147 WHICH HAD ESCAPED ASSESSMENT EARLIER CAN BE MAD E FOR THE SAME PERIOD, ON DIFFERENT BASIS, SO HOWEVER, IT WOU LD NOT BE APPROPRIATE THAT BOTH ASSESSMENTS CAN BE SUCCESSFUL LY MADE ONE AFTER ANOTHER FOR THE SAME PERIOD UNDER THE RES PECTIVE PROVISIONS BASED ON THE SAME MATERIALS. ONCE THE M ATERIAL GATHERED DURING THE COURSE OF SEARCH U/S 132 IS CON SIDERED IN THE BLOCK ASSESSMENT U/S 158BC OF THE ACT, THEREAFT ER IT IS NOT OPEN FOR THE ASSESSING OFFICER TO INITIATE PROCEEDI NGS U/S 147 OF THE ACT ON THE SAME ISSUE MERELY BECAUSE THE CONDIT IONS IN THE BLOCK ASSESSMENT PROCEEDINGS WERE NOT FOUND SUSTAIN ABLE. IN THIS CONTEXT, THE REASONS RECORDED BY THE ASSESSING OFFICER, REPRODUCED IN THE EARLIER PART OF THIS ORDER DO NOT SHOW ANY REASONABLE BASIS FOR THE ASSESSING OFFICER TO CONCL UDE THAT THERE WAS ANY ESCAPEMENT OF INCOME. CLEARLY, THE INITIAT ION OF PROCEEDINGS U/S 147 BASED ON SUCH REASONS RECORDED DID NOT MEET WITH THE REQUIREMENT OF SEC. 147 OF THE ACT AS UNDERSTOOD IN THE AFORESAID JUDICIAL PRONOUNCEMENTS. IN THIS VIEW OF THE MATTER, HAVING REGARD TO THE AFORESAID LEGAL POSITI ON, THE 12 INITIATION OF PROCEEDINGS BY ISSUANCE OF NOTICE U/S 147/148 IN THE PRESENT CASE IS FLAWED AND VOID ABINITIO . 11. IN VIEW OF THE AFORESAID, IN THE PRESENT CASE I T EMERGES THAT THE PROCEEDINGS U/S.147 OF THE ACT HAVE BEEN INITIATED BY THE ASSESSING OFFICER ON 29.03.2005 WITH THE SOLE OBJECTIVE OF SO MEHOW TAXING THE INCOME WITH THE REVENUE COULD NOT SUCCESSFULLY DO A T THE TIME OF BLOCK ASSESSMENT PROCEEDINGS FOR THE IMPUGNED ASSES SMENT YEAR. ONCE THE MATTER GATHERED DURING THE COURSE OF SEARC H U/S.132 IS CONSIDERED IN THE BLOCK ASSESSMENT U/S.158BC/158BD OF THE ACT, IT IS THEREAFTER NOT OPEN FOR THE ASSESSING OFFICER TO INITIATE PROCEEDINGS U/S.147 OF THE ACT ON THE SAME ISSUE AN D BASED ON THE SAME MATERIAL MERELY BECAUSE THE ADDITION IN THE BL OCK ASSESSMENT WAS NOT FOUND TO BE SUSTAINABLE. THEREFORE, FOLLOW ING THE PRECEDENT NOTED ABOVE, WE DO NOT FIND THAT THE ASSESSING OFFI CER WAS JUSTIFIED IN COMING TO A BELIEF THAT AN INCOME HAD ESCAPED AS SESSMENT WITHIN THE MEANING OF SECTION 147 OF THE ACT AS PER THE RE ASONS RECORDED ON 29.03.2005. IN THIS VIEW OF THE MATTER, THE INI TIATION OF PROCEEDINGS BY ISSUANCE OF NOTICE U/S.147/148 OF TH E ACT IN THE PRESENT CASE IS INVALID AND AS A RESULT, THE CONSEQ UENT ASSESSMENT MADE ON 30.03.2006 IS LIABLE TO BE QUASHED. WE HOL D SO. 12. SINCE THE PRELIMINARY GROUND ON THE POINT OF LA W IS UPHELD AND THE IMPUGNED ASSESSMENT IS HELD AS INVALID, THE SUB SEQUENT GROUND IS RENDERED ACADEMIC AND DOES NOT REQUIRE AD JUDICATION. 13. THE APPEAL IS ALLOWED, AS ABOVE. 14. NOW WE TAKE UP THE CROSS APPEALS OF THE ASSESSE E AND THE REVENUE FOR THE A.Y. 2002-03 WHICH ARE DIRECTED AGA INST THE ORDER OF THE CIT(A) DATED 3.6.2007, WHICH IN TURN AROSE F ROM AN ORDER OF ASSESSMENT MADE BY THE ASSESSING OFFICER U/S.143(3) OF THE ACT DATED 31.3.2005. 13 15. IN THE RETURN OF INCOME FILED BY THE ASSESSEE F OR A.Y. 2002-03, IT DECLARED LONG TERM CAPITAL GAIN OF RS.76,50,000/ - FROM SALE OF LAND AT VADGAONSHERI, PUNE. THE ASSESSING OFFICER WHILE MAKING AN ASSESSMENT U/S.143(3) OF THE ACT HAS ASSESSED TH E CAPITAL GAIN ON PROTECTIVE BASIS FOR THE REASON THAT IN THE BLOC K ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAD ALREADY CONS IDERED THAT THE CAPITAL GAIN FROM THE TRANSFER OF RIGHTS IN THE LAN D AT VADGAONSHERI WAS DURING A.Y. 1998-99 AND THE SAME WAS ASSESSABLE AS UNDISCLOSED INCOME FOR THE BLOCK PERIOD. WHILE ASS ESSING THE CAPITAL GAIN DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME FOR A.Y. 2002-03 ON PROTECTIVE BASIS, THE ASSESSING OFF ICER RECOMPUTED THE AMOUNT OF LONG TERM CAPITAL GAIN. FIRSTLY, THE ASSESSING OFFICER DID NOT ACCEPT THE VALUE OF THE PROPERTY AS ON 01.04.1981 AT RS.3,01,66,500/- CANVASSED BY THE ASSESSEE FOR ASCE RTAINING THE COST OF ACQUISITION, AND INSTEAD ADOPTED THE VALUE OF RS.29,29,304/-. SECONDLY, THE ASSESSING OFFICER AL SO OBSERVED THAT THE ASSESSEE WAS NOT ENTITLED TO EXEMPTION U/S.54F OF THE ACT AMOUNTING TO RS.1,20,00,000/- CLAIMED BY THE ASSESS EE FOR HAVING PURCHASED A NEW RESIDENTIAL HOUSE OUT OF THE GAIN E ARNED FROM SALE OF VADGAONSHERI LAND. IN THIS MANNER, THE ASSESSIN G OFFICER RECOMPUTED THE LONG TERM CAPITAL GAIN AT RS.10,30,2 1,165/- AND ASSESSED IT ON PROTECTIVE BASIS. 16. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFOR E THE CIT(A). THE CIT(A) NOTED THAT SINCE THE COMPUTATION OF CAPI TAL GAINS AND DENIAL OF DEDUCTION U/S.54F OF THE ACT, AS MADE BY THE ASSESSING OFFICER, WAS UPHELD BY HIM IN THE APPEAL FOR A.Y. 1 998-99 VIDE HIS ORDER DATED 3.5.2007, THE COMPUTATION OF CAPITAL GA INS MADE BY THE ASSESSING OFFICER IN THE ORDER DATED 31.03.2005 PAS SED ON PROTECTIVE BASIS U/S.143(3) WAS HELD TO BE REDUNDAN T. FURTHER, THE ASSESSMENT ORDER DATED 31.03.2005 PASSED ON PROTECT IVE BASIS WAS CANCELLED BY THE CIT(A) AS THE ASSESSMENT ORDER FOR A.Y. 1998-99 WHERE ADDITIONS MADE ON SUBSTANTIVE BASIS WAS CONFI RMED BY HIM VIDE HIS ORDER DATED 03.05.2007. 14 17. IN THIS BACKGROUND, THE ASSESSEE AS WELL AS REV ENUE ARE IN APPEAL. AS PER THE REVENUE THE CIT(A) ERRED IN CAN CELLING THE ASSESSMENT ORDER PASSED U/S.143(3) OF THE ACT DATED 31.03.2005 ON PROTECTIVE BASIS. THE ASSESSEE ON THE OTHER HAND H AS CHALLENGED THE ORDER OF THE CIT(A) ON THE POINTS OF DETERMINAT ION OF CAPITAL GAINS AND ALSO ON THE FAILURE OF THE CIT(A) IN NOT HOLDING THAT NO ASSESSMENT ORDER CAN BE PASSED ON PROTECTIVE BASIS BY THE ASSESSING OFFICER. 18. IT WAS A COMMON POINT BETWEEN THE PARTIES THAT THE IMPUGNED PROCEEDINGS ARE TO BE VIEWED IN THE LIGHT OF THE AS SESSMENT MADE BY THE ASSESSING OFFICER FOR A.Y. 1998-99 DATED 30.03. 2006, WHEREIN THE SIMILAR LONG TERM CAPITAL GAIN WAS ASSESSED ON SUBSTANTIVE BASIS. THE SAID ASSESSMENT ORDER HAS BEEN FOUND TO BE LACKING IN JURISDICTION BY US IN THE EARLIER PARAGRAPHS WHILE DEALING WITH THE APPEAL OF THE ASSESSEE IN ITA NO.1078/PN/2007. QUI TE CLEARLY ONCE THE SUBSTANTIVE ADDITION MADE IN THE COURSE OF ASSE SSMENT PROCEEDINGS FOR A.Y. 1998-99 DATED 30.03.2006 HAVE BEEN HELD TO BE UNTENABLE AND CONSEQUENTLY THE ADDITION GETS DEL ETED, THE PROTECTIVE ASSESSMENT MADE IN THE INSTANT YEAR BECO MES SUBSTANTIVE. THEREFORE, IN THIS VIEW OF THE MATTER , THE IMPUGNED ORDER OF THE CIT(A) DATED 03.06.2007 HOLDING THAT T HE ISSUES RELATING TO COMPUTATION OF CAPITAL GAIN AND DENIAL OF DEDUCTION U/S.54F OF THE ACT BECOME REDUNDANT, IS NOT TENABLE . IN THIS LIGHT AND CONSEQUENT TO OUR ORDER FOR THE A.Y. 1998-99, I N ITA.NO.1078/PN/2007, THE CIT(A) IS REQUIRED TO DETE RMINE THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ON THEIR M ERITS. SINCE THE SAID DETERMINATION IS CONSPICUOUS BY ITS ABSENCE IN THE IMPUGNED ORDER OF THE CIT(A), WE DEEM IT FIT AND PROPER TO S ET ASIDE THE MATTER BACK TO THE FILE OF THE CIT(A). THE CIT(A) SHALL C ONSIDER AND DECIDE THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE BEFORE HIM ON MERITS AND AS PER LAW AFTER ALLOWING THE ASSESSEE A REASON ABLE OPPORTUNITY OF BEING HEARD. 15 19. IN THE RESULT, THE APPEAL OF THE ASSESSEE AS WE LL AS OF THE REVENUE FOR A.Y. 2002-03 STANDS ALLOWED AS ABOVE. PRONOUNCED IN THE OPEN COURT ON THIS THE 21 ST DAY OF MARCH, 2013. SD/- SD/- ( R.S.PADVEKAR ) ( G.S.PANNU ) JUDICIAL MEMBER ACCOUNTANT MEMBER GSPS PUNE, DATED THE 21 ST MARCH, 2013 COPY OF THE ORDER IS FORWARDED TO: 1. THE ASSESSEE 2. THE DCIT, CENTRAL CIRCLE-2, PUNE. 3. THE CIT(A)(CENTRAL), PUNE. 4. THE CIT(CENTRAL), PUNE. 5. THE DR B BENCH, PUNE. 6. GUARD FILE. BY ORDER //TRUE COPY// PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, PUNE.
