Appeal Details
Counselvise Citation
[2018] 125 COUNSELVISE.COM (IT) 9504 (ITAT-PUNE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 1 month(s) 28 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
17-01-2018
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
A
Next Hearing Date
16-01-2018
Assessment Year
2010-2011
Appeal Filed On
19-11-2015
Judgement Text
, , , , IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE . , , BEFORE SHRI D.KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NOS.1508 TO 1511/PUN/2015 / ASSESSMENT YEARS : 2008-09 TO 2011-12 PRITI DEVENDRA SHAH, BHAGYALAXMI NIWAS, A/P MANCHAR, BAZAR PETH, DISTRICT PUNE - 410503 . /APPELLANT VS. DY.CIT, CENTRAL CIRCLE-1(1), PUNE . / RESPONDENT ASSESSEE BY : SHRI SUHAS P. BORA REVENUE BY : SHRI ACHAL SHARMA / DATE OF HEARING : 16.01.2018 / DATE OF PRONOUNCEMENT: 17.01.2018 / ORDER PER BENCH : THERE ARE 4 APPEALS OF THE ASSESSEE UNDER CONSIDERATION INVOLVING ASSESSMENT YEARS 2008-09 TO 2011-12. ALL THESE 4 APPEALS REVOLVE AROUND THE COMMON ISSUE OF TAXATION OF UNACCOUNT ED JEWELLERY AND SILVER. 2. WE FIRST TAKE UP THE APPEAL ITA NO.1511/PUN/2015 FOR A.Y. 2011-12. GIVING BACKGROUND FACTS OF THE CASE, LD. AR FOR THE ASSE SSEE SUBMITTED THAT SEARCH ACTION U/S.132 OF THE ACT WAS CON DUCTED IN THE PRITI GROUP OF CASES ON 04-02-2011 (A.Y. 2011-12). SEARCH RESULTED IN THE SEIZURE OF DOCUMENTS AND THE EXCESS JEWELLERY/SILVER. REGARDING THE GOLD JEWELLERY, IT IS THE FINDING OF THE SEARCH PARTY TH AT ASSESSEE MADE DISCLOSURE OF RS.41,14,225/- ON ACCOUNT OF JEWELLERY FOU ND AND ITA NOS.1508 TO 1511/PUN/2015 PRITI DEVENDRA SHAH 2 SEIZED DURING THE SEARCH ACTION. HOWEVER, THE SEIZED PA PERS DURING THE SEARCH ACTION NAMED BUNDLE NO.3 LISTS OUT THE BILLS SHO WING THE EVIDENCE OF PURCHASE OF JEWELLERY AND SUCH ACQUISITION OF JE WELLERY WORKS OUT TO RS.71,40,553/- AND THE DETAILS OF ACQUISITION ARE LISTED IN A TABULAR FORM. RELEVANT ASSESSMENT-YEAR WISE DETAILS ARE IN THE TABLE WHICH IS EXTRACTED HERE AS UNDER : S. NO. SEIZED PAGE NO PARTY NAME PARTICULARS DATE OF BILL AMOUNT A.Y. TOT AL 1 2 NA GOLD 11/06/2007 416000 2008-09 2 8 NA JEWELLERY 11/06/2007 937368 2008-09 3 11 GOVARDHAN JEWELLERY 19/08/07 55757 2008-09 4 13 NA JEWELLERY 27/03/08 500000 2008-09 5 21 NA JEWELLERY 27/04/07 596453 2008-09 2505578 6 1 NA EARRING 23/10/08 62000 2009-10 7 9 NA JEWELLERY 07/09/2008 83750 2009-10 8 10 NA JEWELLERY 10/01/2008 1410000 2009-10 9 14 NA NA 9/7/08, 25/10/08 273000 2009-10 1828750 10 5 ARENA KUNDAN SET 22K 26/06/09 127596 2010-11 11 6 PANNALAL ZAVERI D P SET 15/06/09 18938 2010-11 12 16 NA JEWELLERY 30/05/09 1160000 2010-11 13 17 GOKUL GEMS & JEWELLERY JEWELLERY 06/01/2009 4500 2010-11 14 18 NA JEWELLERY 27/12/09 1130000 2010-11 15 19 GOKUL GEMS & JEWELLERY JEWELLERY 06/01/2009 14600 2010-11 2455634 16 15 SHAH BABULAL GOKULDAS JEWELLERY 18/01/11 38089 2011-12 17 20 GALA DIAMOND JEWELLERY 12/01/2010 212502 2011-12 18 4 CARD I5-008 NA NA 100000 2011-12 350591 TOTAL 7140553 3. FROM THE ABOVE TABLE, THE TOTAL UNACCOUNTED JEWELLER Y ACQUIRED DURING THE A.Y. 2008-09 WORKS OUT TO RS.25,05,578/-. SIMILAR LY, RS.18,28,750/- IS THE JEWELLERY RELEVANT TO THE A.Y. 2009- 10, RS.24,55,634/- FOR THE A.Y. 2010-11 AND RS.3,50,591/- IS FOR T HE A.Y. 2011-12. ITA NOS.1508 TO 1511/PUN/2015 PRITI DEVENDRA SHAH 3 4. LD. AR SUBMITTED THAT IGNORING THE FACTS RELATING TO T HE AVAILABILITY OF THE DATES OF ACQUISITION OF THE SAID JEWELLERY, TH E WHOLE OF THIS AMOUNT OF RS.71,40,553/- WAS TAXED IN THE A.Y. 2011-12 . INFACT, ASSESSEE OFFERED THE SAME DURING THE SAID SEARCH PROCEE DINGS. THE SAID UNACCOUNTED INVESTMENT OF RS.71,40,553/- ON ACCOUNT OF JEWELLERY WAS OFFERED TO TAX IN THE RETURN OF INCOME FILED BY THE ASSESSEE FOR A.Y. 2011-12. HOWEVER, DURING THE ASSESSME NT PROCEEDINGS, IGNORING THE ABOVE ARRANGEMENT, THE AO ISSUE D A NOTICE U/S.153C OF THE ACT FOR THE A.YRS. 2008-09 TO 2010-11 AN D PROCEEDED TO TAX THE UNACCOUNTED JEWELLERY OF 25,05,578/- FOR THE A .Y. 2008-09, RS.18,28,750/- FOR THE A.Y. 2009-10 AND RS.24,55,634/- FOR TH E A.Y. 2010-11 RESPECTIVELY. IN DOING SO, THE DATES APPEARING IN THE SEIZED DOCUMENTS WERE RELIED BY THE AO. HOWEVER, WHEN IT COM ES TO THE ADDITION FOR THE A.Y. 2011-12 IS CONCERNED, THE AO PROCEE DED TO TAX AS PER THE INCOME RETURNED BY THE ASSESSEE WITHOUT GRANT ING ANY TELESCOPING BENEFIT. TO THAT EXTENT, IT IS A CASE OF DOUBLE TAXATION ON THE SAID UNACCOUNTED JEWELLERY. THE CIT(A) CONFIRMED THE A FORESAID ADDITIONS FOR ALL THE 4 YEARS, I.E. A.YRS. 2008-09 TO 2011-1 20-11. IN EFFECT, THE AMOUNT OF RS.67,89,962/- IS TAXED TWICE BOTH IN T HE A.Y. 2011-12 CUMULATIVELY AND IN THE INDIVIDUAL ASSESSMENT YEARS. 5. AGGRIEVED WITH THE ABOVE MANNER OF ASSESSMENT OF THE AO IN ALL THE 4 YEARS AND CONFIRMED BY THE CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. 6. FURTHER, LD. AR FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS NO OBJECTION TO NOT TO PRESS THE APPEALS FOR A.YRS. 2008 -09 TO 2010-11 IF THE SUITABLE DIRECTIONS ARE GIVEN TO THE AO WITH REGARD TO THE A.Y. 2011-12 WHICH IS IN EFFECT OF GRANTING RELIEF TO THE ASSESSEE TO THE EXTENT OF RS.67,89,962/-. ITA NOS.1508 TO 1511/PUN/2015 PRITI DEVENDRA SHAH 4 7. IN THE BACKGROUND OF THE ABOVE, ASSESSEE RAISED THE FOLLOWING ADDITIONAL GROUNDS AND THE SAME ARE EXTRACTED AS UNDER : 1. ASSESSEE SUBMITS THAT IF ADDITION MADE ON ACCOUN T OF EXCESS JEWELLERY OF RS.25,05,587/- IN THE A.Y. 2008-09, RS .18,28,750/- IN THE A.Y. 2009-10 AND RS.24,55,634/- IN THE A.Y. 2010-11 IS CONFIRMED AS TO BE TAXED IN THE RESPECTIVE YEARS THEN TELESCOPIC BE NEFIT OF THESE AMOUNTS BE GIVEN IN THE A.Y. 2011-12. 2. ASSESSEE SUBMITS THAT THIS WILL BE DOUBLE ADDITI ON ONCE ON THE BASIS OF SEIZED PAPER IN THE RESPECTIVE YEARS AND A GAIN IN THE A.Y. 2011-12 ON THE BASIS OF DECLARATION U/S.134(4) OF T HE ACT IN THE A.Y. 2011-12. 3. THE ASSESSEE THEREFORE SUBMITS THAT ON THESE FAC TS THE MATTER MAY BE SET ASIDE TO THE AO FOR THE PURPOSE OF TAXIN G THE AMOUNTS IN THE CORRECT YEAR AND INCOME FOR THE A.Y. 2011-12 BE RED UCED TO THE EXTENT OF AMOUNT TAXED IN THE YEAR 2008-09 TO 2020-11 ON ACCO UNT OF EXCESS JEWELLERY. 4. THE ASSESSEE SUBMITS THAT THE ADDITIONAL GROUNDS RAISED ARE LEGAL IN NATURE AND AS ALL THE FACTS ARE ON RECORD, THE ASSESSEE REQUEST FOR ADMISSION OF THE ABOVE ADDITIONAL GROUNDS OF AP PEAL. 8. BRINGING OUR ATTENTION TO THE ASSESSMENTS MADE BY T HE AO FOR ALL THE 4 YEARS, LD. AR FOR THE ASSESSEE SUBMITTED THAT IT IS UNFAIR THAT THE MANNER OF MAKING THE ASSESSMENT ON THE AMOUNT TO THE EXTENT OF RS.67,89,962/- IS UNSUSTAINABLE IN LAW. FURTHER, THE FACT OF M AKING ADDITION OF RS.67,89,962/- IN THE A.Y. 2011-12 WAS DEMONSTRA TED BY THE LD. AR FOR THE ASSESSEE. DRAWING OUR ATTENTION TO THE COMPUTATION OF INCOME PLACED AT PAGE 2 OF THE PAPER BOOK AND ALSO DRAWING OUR ATTENTION TO ITEM NO.2 ON THE SAID PAGE, HE DEMONSTRATED THAT AN AMOUNT OF RS.68,53,001/- WAS ALREADY OFFERED TO T AX UNDER THE HEAD INCOME FROM OTHER SOURCES -(BANK INT./INT. ON BONDS (BANK INTEREST) OTHER INCOME (INCOME DISCLOSED IN SEARCH-JEWELLER Y). MENTIONING THAT ASSESSEE ERRONEOUSLY OFFERED THE SAID A MOUNT IN THE A.Y. 2011-12, LD. AR SUBMITTED THAT THE ASSESSEE IS UNDER THE BONAFIDE BELIEF THAT SUCH INCOME WILL NOT BE ADDED BY THE AO ONCE AGAIN IN THE A.YRS. 2008-09 TO 2010-11. BUT THIS IS A CAS E WHERE THE ITA NOS.1508 TO 1511/PUN/2015 PRITI DEVENDRA SHAH 5 AO UNFAIRLY TAXED THIS AMOUNT IN THE RESPECTIVE ASSESSME NT YEARS ALSO WITHOUT GRANTING ANY TELESCOPIC BENEFIT IN THE A.Y. 2011-12. 9. RELYING ON THE CBDT CIRCULAR NO.14 (XL-35), DATED 11- 04-1955, LD. AR FOR THE ASSESSEE SUBMITTED THAT IT IS THE DUTY OF THE AO TO MAKE PROPER ASSESSMENT GUIDING THE ASSESSEE IN EVERY REASO NABLE WAY, PARTICULARLY IN THE MATTER OF CLAIMING AND SECURING RELIEFS AS PER THE RULES AND PROCEDURES LAID DOWN IN THE INCOME TAX ACT A ND THE RULES. FURTHER, HE SUBMITTED THAT THERE IS NO BAR FOR THE AO FO R MAKING AN ASSESSMENT EVEN IF IT HAS AN EFFECT OF REDUCTION OF RETURN OF INCOME AND IF IT IS IN THE INTEREST OF ADMINISTRATION OF JUSTICE. HE ALSO BROUGHT OUR ATTENTION TO THE NAGPUR BENCH DECISION IN THE CASE OF DCIT VS. SANMUKHDAS WADHWANI 85 ITD 734. RELYING ON THE DECISION OF PUNE BENCH OF THE TRIBUNAL IN THE CASE OF SERUM INSTITUTE OF IN DIA LTD. VS. DCIT AND VICE VERSA IN ITA NOS. 985 AND 986/PUN/2015 A ND ITA NOS. 1535 AND 1536/PUN/2015, DATED 28-11-2017, LD. AR FOR TH E ASSESSEE ALSO SUBMITTED IN FAVOUR OF TAXING THE AMOUNTS IN THE CORR ECT ASSESSMENT YEAR EVEN IF MEANS HAVING A NEGATIVE EFFECT FOR THE A.Y. 2011-12. 10. ON THE OTHER HAND, LD. DR FOR THE REVENUE RELIED HEAV ILY ON THE ORDERS OF THE AO/CIT(A) AND MENTIONED THE FACT OF NOT RAIS ING THE ISSUE OF TELESCOPING BENEFIT BEFORE THE LOWER AUTHORITIES. IN ANY CASE, HE FAIRLY CONCURRED WITH THE FACT THAT THE ISSUE RAISED BY T HE ASSESSEE THROUGH THE ADDITIONAL GROUNDS CONSTITUTES LEGAL IN NATURE. 11. WE HEARD BOTH THE SIDES AND PERUSED THE PECULIAR FAC TS OF THIS CASE AND ORDERS OF ASSESSMENT AND THE COMBINED ORDER OF CIT(A). WE FIND THERE IS NO DISPUTE WITH REGARD TO THE UNACCOUNTED NATURE OF THE JEWELLERY WORTH RS.71,40,553/-. FURTHER, THERE IS NO DISPUT E ABOUT THE YEARS OF ACQUISITION AND TAXABILITY OF THE SAME. IT WAS OFFER ED IN THE ITA NOS.1508 TO 1511/PUN/2015 PRITI DEVENDRA SHAH 6 RESPECTIVE ASSESSMENT YEARS. IT IS AN UNDISPUTED FACT T HAT THE ASSESSEE OFFERED AN AMOUNT OF RS.68,53,001/- AND FILED THE RETURNS AND PAID TAXES UNDER THE HEAD INCOME FROM OTHER SOURC ES, WHICH IS EVIDENT FROM THE COMPUTATION OF INCOME PLACED AT PAGE 2 O F THE PAPER BOOK. IN EFFECT, THE SAID AMOUNT OF UNACCOUNTED JEWELLER Y IS ONCE ADDED BY THE AO FOR THE A.YRS. 2008-09 TO 2010-11 U/S.1 53C OF THE ACT IGNORING THE FACT THAT THE SAID AMOUNTS WERE ALREADY OFFERED IN THE RETURN OF INCOME FOR THE A.Y. 2011-12. BONAFIDE BELIEF IN OFFER ING THE ADDITIONAL INCOME WAS NOT RESPECTED BY THE AO FOR ANY RE ASON. NOW, THROUGH THE ADDITIONAL GROUNDS (SUPRA), ASSESSEE RAISED T HE LEGAL ISSUE STATING THAT THE ASSESSEE DESIRES TELESCOPING BENEFIT IN THE A.Y. 2011 -2. HE RELIED ON VARIOUS DECISIONS INCLUDING THE CBDT CIRCULAR NO .14(XL- 35), DATED 19-04-1955 IN RESPECT OF THE LEGAL PROPOSITION THAT THE RETURNED INCOME CAN BE ASSESSED AT THE LOWER SIDE ON T HE PECULIAR FACTS OF THE PRESENT CASE. IN THIS REGARD, WE PERUSED T HE CBDT CIRCULAR AND THE RELEVANT PORTION IS EXTRACTED AS UNDER : 3. OFFICERS OF THE DEPARTMENT MUST NOT TAKE ADVANTAGE OF IGNORANCE OF AN ASSESSEE AS TO HIS RIGHTS. IT IS ON E OF THEIR DUTIES TO ASSIST A TAXPAYER IN EVERY REASONABLE WAY, PARTICULARLY IN THE MATTER OF CLAIMING AND SECURING RELIEFS AND IN THIS REGARD THE OFFICERS SHOULD TAKE THE INITIATIVE IN GUIDING A TAXPAYER WH ERE PROCEEDINGS OR OTHER PARTICULARS BEFORE THEM INDICATE THAT SOME RE FUND OR RELIEF IS DUE TO HIM. THIS ATTITUDE WOULD, IN THE LONG RUN, BENEF IT THE DEPARTMENT FOR IT WOULD INSPIRE CONFIDENCE IN HIM THAT HE MAY BE SURE OF GETTING A SQUARE DEAL FROM THE DEPARTMENT. ALTHOUGH, THEREFORE, THE RESPONSIBILITY FOR CLAIMING REFUNDS AND RELIEFS RESTS WITH ASSESSEES O N WHOM IT IS IMPOSED BY LAW, OFFICERS SHOULD : (A) DRAW THEIR ATTENTION TO ANY REFUNDS OR RELIEFS TO WHICH THEY APPEAR TO BE CLEARLY ENTITLED BUT WHICH THEY HAVE OMITTED TO CLAIM FOR SOME REASON OR OTHER; (B) FREELY ADVISE THEM WHEN APPROACHED BY THEM AS T O THEIR RIGHTS AND LIABILITIES AND AS TO THE PROCEDURE TO BE ADOPTED F OR CLAIMING REFUNDS AND RELIEFS. 12. FURTHER, WE ALSO PERUSED THE DECISION OF THE TRIBUNAL IN THE CASE OF SERUM INSTITUTE OF INDIA LTD. (RELIED UPON BY THE ASSE SSEE) WHERE THE DECISION OF NAGPUR BENCH IN THE CASE OF DCIT VS. SANMUKHD AS ITA NOS.1508 TO 1511/PUN/2015 PRITI DEVENDRA SHAH 7 WADHWANI WAS RELIED UPON BY THE TRIBUNAL AND HELD THAT M AKING OF AN ASSESSMENT ON THE ASSESSED INCOME LESSER THAN THE RET URNED INCOME IS WITHIN THE SCOPE/JURISDICTION OF THE AO. ADOPTING THE SAID DECISIONS, WE HAVE GRANTED SIMILAR DIRECTIONS IN THE CASE OF SERUM IN STITUTE OF INDIA LTD. VIDE OUR ORDER DATED 28-11-2017. RELEVANT P ORTION IS EXTRACTED AS UNDER : 33. TO START WITH, WE WILL TAKE UP THE APEX COURT S JUDGMENT IN THE CASE OF COMMISSIONER OF INCOME-TAX V. SHELLY PRODUC TS [2003] 261 ITR 367 (SC), THE APEX COURT HELD IN FAVOUR OF REFUNDIN G OF THE EXCESS TAXES PAID (OF ADVANCE TAX AS WELL AS SELF-ASSESSMENT TAX ) OUT OF ABUNDANT CAUTION OR OWING TO ERROR OR NON TAXABILITY. HELD PORTION OF THIS JUDGMENT IS EXTRACTED AS UNDER : HOWEVER, FAILURE OR INABILITY OF THE REVENUE TO FR AME A FRESH ASSESSMENT SHOULD NOT PLACE THE ASSESSEE IN A MORE DIS- ADVANTAGEOUS POSITION THAN HE WOULD HAVE BEEN IN IF A FRESH ASSESSMENT WERE MADE. IN A CASE WHERE THE ASSESSEE CHOOSES TO DEPOSIT, BY WAY OF ABUNDANT CAUTION , ADVANCE TAX OR TAX ON SELF ASSESSMENT WHICH IS IN EXCESS OF HIS LIABILITY ON THE BASIS OF THE RETURN FURNISHED OR, IF THERE IS AN ARITHMETICA L ERROR OR INACCURACY, IT IS OPEN TO THE ASSESSEE TO CLAIM REF UND OF THE EXCESS TAX PAID IN THE COURSE OF THE ASSESSMENT PRO CEEDINGS. HE CAN CERTAINLY MAKE SUCH A CLAIM BEFORE THE CONCERNE D AUTHORITY CALCULATING THE REFUND. SIMILARLY, IF THE ASSESSEE HAS, BY MISTAKE OR INADVERTENCE OR ON ACCOUNT OF IGNORANCE, INCLUDED IN HIS INCOME ANY AMOUNT WHICH IS EXEMPTED FROM PAYMENT OF INCOME-TAX, OR IS NOT INCOME WITHIN THE CONTEMPLATI ON OF LAW, HE MAY LIKEWISE BRING THIS TO THE NOTICE OF THE AS SESSING AUTHORITY, WHICH, IF SATISFIED, MAY GRANT HIM RELIEF AND REFUND THE TAX PAID IN EXCESS, IF ANY. SUCH MATTERS CAN B E BROUGHT TO THE NOTICE OF THE CONCERNED AUTHORITY IN A CASE WHERE A REFUND IS DUE AND PAYABLE, AND THE AUTHORITY CONCERNED, ON BEING SATISFIED, SHALL GRANT APPROPRIATE RELIEF. 34. IN THE CASE OF GUJARAT GAS COMPANY LTD. VS. JCI T (245 ITR 84) THE HONBLE GUJARAT HIGH COURT HELD THAT THE INSTRU CTION OF THE CBDT CIRCULAR NO.549 (PARA NO.5.12 DATED 31-10-1989 IS U LTRA-VIRES WHEN THE SAID INSTRUCTION MANDATES THE AO AGAINST MAKING THE SCRUTINY ASSESSMENTS AT THE FIGURE LESS THAN THAT RETURNED BY THE ASSESSEE. RELEVANT HELD PORTION OF THIS JUDGMENT READS AS UND ER : HELD, THAT THE CIRCULAR IN QUESTION REFERS TO ASSE SSMENTS WHICH ARE TO BE MADE U/S.143(3) OF THE ACT. THE CIRCULAR DIRECTS THAT IN A PARTICULAR TYPE OF CASES, I.E. IN SCRUTINY CASES U/S.143(3) OF THE ACT, THE INCOME CAN NEITHER BE ASSESSED AT A FIGURE LOWER THAN THE RETURNED INCOME NOR THE LOSS ASSESSED AT A FIGU RE HIGHER THAN THE LOSS NOR FURTHER REFUND GIVEN EXCEPT WHAT WAS D UE ON THE BASIS OF THE RETURNED INCOME. THUS, BY ISSUANCE OF THE CIRCULAR, THE QUASI-JUDICIAL OFFICER IS DIRECTED TO ASSESS CA SES OF PARTICULAR NATURE IN A PARTICULAR MANNER. THE ASSESSING OFFIC ER BEING BOUND BY IT HAD ABDICATED HIS FUNCTION AND DID NOT ACT INDEPENDENTLY AND, THEREFORE, THERE WAS NO QUESTION OF ALTERNATIVE REMEDY WHICH WAS A FUTILE REMEDY. IN F ACT, THE ITA NOS.1508 TO 1511/PUN/2015 PRITI DEVENDRA SHAH 8 JURISDICTION HAD BEEN EXERCISED BY THE CENTRAL BOAR D OF DIRECT TAXES BY ISSUING THE CIRCULAR AND, THEREFORE, THE O RDER OF THE ASSESSING OFFICER WAS WITHOUT JURISDICTION. THE CO URT HAD TO EXERCISE ITS JURISDICTION UNDER ARTICLE 226. THE O RDER OF THE ASSESSING OFFICER TO THE EXTENT IT STATED THAT THE TOTAL INCOME WOULD BE THE RETURNED INCOME, WAS TO BE SET ASIDE, WITH A DIRECTION TO THE ASSESSING OFFICER TO MAKE ASSESSME NT WITHOUT KEEPING IN MIND THE CENTRAL BOARD OF DIRECT TAXES CIRCULAR DATED 31-10-1989. 35. THE SAME HONBLE GUJARAT HIGH COURT AGAIN IN TH E CASE OF CIT VS. MILTON LAMINATES LTD. VIDE TAX APPEAL NO.1022 OF 201 0 DATED 24-01- 2012 HELD THE ISSUE IN FAVOUR OF THE ASSESSEE AND A GAINST THE REVENUE. REVENUE TOOK THE ISSUE TO THE HONBLE HIGH COURT ON THE ISSUE, IF THE TRIBUNALS DIRECTION TO THE AO TO ALLOW COMPLETE EF FECT TO THE ORDER OF THE CIT(A) WITHOUT RESTRICTING THE INCOME TO THE RETURN ED INCOME. IN THIS CASE, AFTER GIVING EFFECT TO THE ORDER OF THE CIT(A ), THE INCOME ASSESSED HAS FALLEN BELOW THE RETURNED INCOME OF THE ASSESSE E. THE HONBLE HIGH COURT UPHELD THE ORDER OF THE TRIBUNAL. RELEVANT L INES FROM THIS JUDGMENT ALSO ARE EXTRACTED AS UNDER : 7. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE TRIBUNALS ULTIMATE CONCLUSION I N ALLOWING THE ASSESSEES APPEAL. THOUGH SOME OF THE OBSERVATIONS MAY NOT APPEAL TO US, NEVERTHELESS, FOR THE REASONS SOMEWHA T DIFFERENT FROM THOSE RECORDED BY THE TRIBUNAL WE COME TO THE SAME CONCLUSION. DECISION OF THE APEX COURT IN CASE OF SHELLY PRODUCTS & OTHERS (SUPRA), WAS RENDERED IN VERY DIFFERENT BACKGROUND. IT WAS A CASE WHERE THE ASSESSEE HAD F ILED RETURN. ASSESSEE HAD PAID SELF ASSESSMENT TAX ON THE INCOME DISCLOSED IN THE RETURN. TRIBUNAL ON APPEAL BY THE ASSESSEE HELD THAT THE ORDER OF THE ASSESSMENT PASSED BY THE ASSESSING OFF ICER WAS AB- INITIO VOID SINCE HE HAD NO JURISDICTION TO DEAL WI TH SUCH PROCEEDINGS. REVENUE SOUGHT REFERENCE BEFORE THE H IGH COURT. WHEN SUCH REFERENCE WAS PENDING, THE ASSESSEE APPLI ED TO THE DEPARTMENT FOR REFUND OF THE TAX PAID. IT WAS IN T HIS BACKGROUND THE APEX COURT EXPRESSED THE OPINION THAT LIABILITY TO PAY INCOME TAX DOES NOT DEPEND ON ASSESSMENT BEING MADE AND FA ILURE OR INABILITY TO FRAME FRESH ASSESSMENT AFTER EARLIER A SSESSMENT IS SET ASIDE OR NULLIFIED IN APPROPRIATE PROCEEDINGS, DOES NOT DISENTITLE THE ASSESSEE TO CLAIM REFUND OF THE ADVA NCE TAX AND TAX PAID ON SELF ASSESSMENT BECAUSE TO THAT EXTENT THE ASSESSEE HAD ADMITTED HIS LIABILITY TO PAY TAX IN ACCORDANCE WITH LAW. FACTS OF THE PRESENT CASE ARE THEREFORE, DIFFERENT. IN CASE OF HAND, THE ASSESSMENT WAS NOT RENDERED NULL. IN FAC T SUCH ASSESSMENT, WHICH ACCORDING TO THE ORDER OF CIT(APP EALS) HAD BECOME FINAL TAX LIABILITY OF THE ASSESSEE, CAME LO WER THAN THAT DECLARED BY HIM IN THE RETURN FILED. (1) TO SUM UP, FROM THE ABOVE, IT IS OBVIOUS THAT T HE FETTERS IMPOSED BY THE CBDT, ON THE AOS, WHEN IT COMES TO ASSESSING THE INCOME OF ASSESSEE LOWER THAN THE RETURNED INCOME, ARE HELD U LTRA VIRES. FURTHER, THE HONBLE APEX COURT ALSO HELD THAT THE TAXES PAI D BY THE ASSESSEE AS A MATTER OF ABUNDANT CAUTION, I.E. BY WAY OF ADVANC E OR SELF ASSESSMENT TAXES, NEEDS TO BE REFUNDED AFTER DUE VE RIFICATION OF THE CLAIMS. (2) LD. COUNSEL FOR THE ASSESSEE FILED VARIOUS DEC ISIONS OF THE TRIBUNAL DEMONSTRATING THAT THE CONTINGENCY DISCL OSURE ARE ENTITLED TO REFUND AFTER DUE VERIFICATION. IN THIS REGARD, LD. COUNSEL FOR THE ASSESSEE FILED WRITTEN NOTE ON CONTINGENCY ISSUE STATING THAT THE RETURN OF INCOME FILED BY THE ASSESSEE CONSTITUTES A NOTIO NAL UNDISCLOSED ITA NOS.1508 TO 1511/PUN/2015 PRITI DEVENDRA SHAH 9 INCOME AS PART OF THE TOTAL INCOME. THE SAME SHOUL D NOT BECOME AN IMPEDIMENT FOR ASSESSING THE INCOME OF THE ASSESSEE BASED ON THE PRINCIPLES RELATING TO THE REAL INCOME THEORY. ACC ORDING TO HIM, THE INCOME OFFERED BY THE ASSESSEE IN THE RETURN OF INC OME IS NOT SACROSANCT AND WHAT MATTERS IS THE AOS FINDING ON THE ASSESSE D INCOME OF THE ASSESSEE. THE ASSESSED INCOME CAN BE LOWER THAN TH E RETURNED INCOME. RELYING ON THE DECISION OF NAGPUR BENCH OF THE TRIB UNAL IN THE CASE OF DCIT VS. SANMUKHDAS WADHWANI 85 ITD 734, SHRI R.S. ABHYANKAR, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT WHERE T HE ASSESSEE HIMSELF RETURNED HIS UNDISCLOSED INCOME ON ADHOC BASIS WITH OUT GIVING ANY BREAK-UP FOR THE SAME AND WHEN THE SUBSEQUENT WORKI NG SUBMITTED BY HIM REVEALS THAT THE UNDISCLOSED INCOME ACTUALLY AS SESSABLE IN THE HANDS OF THE ASSESSEE IS LOWER THAN THE RETURNED IN COME, THE SAME HAS TO BE ASSESSED AT SUCH LOWER INCOME BASED ON THE CO NCEPT OF REAL INCOME. ONLY CONDITION SPECIFIED IN THE SAID DECIS ION RELATES TO THE VERIFICATION AND CORRECTNESS OF THE STATEMENTS SO S UBMITTED GIVING THE DETAILED WORKING BEFORE THE AO. RELEVANT PORTION I S EXTRACTED AS UNDER : '12. IT IS OBSERVED THAT A SIMILAR ISSUE IN THE CONTEXT OF REGULAR ASSESSMENT AROSE FOR CONSIDERATION BEFORE T HE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT V . BHARAT GENERAL INSURANCE CO. LTD. [1971] 81 ITR 303 WHEREIN IT WAS HELD BY THEIR LORDSHIPS THAT EVEN IF AN ASSESSEE DECLARES A N INCOME IN THE RETURN, THE ASSESSING OFFICER CANNOT ASSESS IT MERELY ON THAT BASIS AND HE HAS TO CONSIDER ITS TAXABILITY IN THE LIGHT OF OTHER CIRCUMSTANCES DE HORS THE ADMISSION MADE IN T HE RETURN . IN THE CASE OF NARAYANAN V . GOPAL AIR 1960 SC 235 , THE HON ' BLE SUPREME COURT HAS HELD THAT AN ADMISSION IN THE RETURN IS NOT CONCLUSIVE AND IT WOULD BE DECISIVE O NLY IF NOT SUBSEQUENTLY WITHDRAWN OR PROVED TO BE ERRONEOUS . IT IS WELL- ESTABLISHED THAT THE OBJECT OF AN ASSESSMENT IS TO DETERMINE THE CORRECT INCOME AND CONSEQUENTLY THE CORRECT TAX LIABILITY . IN OUR OPINION , THIS SETTLED POSITION EQUALLY HOLDS GOOD IN THE MATTER OF BLOCK ASSESSMENT ALSO SINCE THE SCOPE OF UNDISCLOSED INCOME ASSESSABLE IN THE BLOCK ASSESSME NT IS SPECIFICALLY PROVIDED AND THE PROCEDURE FOR DETERMI NATION OF SUCH INCOME IS ALSO CLEARLY LAID DOWN . IN THESE CIRCUMSTANCES , ANY AMOUNT WHICH IS NOT ASSESSABLE AS UNDISCLOSED INCOME FOR THE BLOCK PERIOD CANNOT BE A SSESSED AS SUCH MERELY FOR THE REASON THAT THE SAME WAS DEC LARED BY THE ASSESSEE IN THE RETURN FOR BLOCK PERIOD AND THERE CANNOT BE SUCH ESTOPPEL AGAINST THE STATUTE . IT , THEREFORE , FOLLOWS THAT IF THE ASSESSEE COMMITS A PATENT MISTAKE OF FACT OR LAW WHILE FILING HIS RETURN OF UNDISCLOSED INCOME UNDER SECTION 158BC , HE CANNOT BE ASSESSED ON SUCH INCORRECT INCOME MERELY ON THE BASIS OF ADMISSION MADE IN THE RETURN. 13. . . . . . . . .IN SUCH CIRCUMSTANCES, WHEN A DE TAILED WORKING MADE SUBSEQUENTLY BY THE ASSESSEE OF UNDISCLOSED IN COME REVEALED THAT THE TOTAL UNDISCLOSED INCOME ASSESSAB LE IN THE HANDS OF THE ASSESSEE WAS LOWER THAN THE RETURNED I NCOME, WE ARE OF THE OPINION THAT THE SAME HAS TO BE ASSESSED AT SUCH LOWER AMOUNT GOING BY THE CONCEPT OF REAL INCOME ES PECIALLY WHEN THE SAID WORKING WAS VERIFIED AND FOUND TO BE CORRECT BY THE ASSESSING OFFICER. 36. SIMILAR PROPOSITION WAS AFFIRMED BY THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. BHARAT GENERAL INSURANCE COM PANY LTD. 81 ITR 303 WHEREIN IT IS HELD THAT WHEN THE ASSESSEE DECLA RES INCOME IN THE RETURN, THE AO CANNOT ASSESS MERELY ON THAT BASIS A ND HAS TO CONSIDER ITS LIABILITY IN THE LIGHT OF OTHER CIRCUMSTANCES D E HORS THE ADMISSION MADE BY HIM IN THE RETURN. LD. COUNSEL FOR THE ASS ESSEE ALSO REFERRED TO ITA NOS.1508 TO 1511/PUN/2015 PRITI DEVENDRA SHAH 10 THE OTHER JUDGMENT IN THE CASE OF ESTER INDUSTRIES LTD. VS. CIT 316 ITR 260 (DELHI). ACCORDING TO THIS JUDGMENT, SUO MOTO DISALLOWANCE LEADING TO INCREASED RETURNED INCOME CAN ALWAYS BE VERIFIED BY THE AO IN THE ASSESSMENT AND DECREASE THE RETURNED INCOME, EVEN I F IT FALLS BELOW THE AMOUNT OF TOTAL INCOME RETURNED BY THE ASSESSEE IN THE RETURN OF INCOME. IN THIS CASE, THE HONBLE HIGH COURT RESTORED THE M ATTER FOR SUCH VERIFICATION. RELEVANT PORTION OF THE JUDGMENT ARE EXTRACTED AS UNDER : '11 . ACCORDING TO US, THE TRIBUNAL OUGHT TO HAVE EXAMINE D THE ISSUE AS TO WHETHER THE FACT THAT ASSESSEE HAD MADE AN ADMISSION WITH RESPECT TO AN ADDITION / DISALLOWANCE IN ITS ORIGINAL RETURN OR IN THE REVISED RETURN WOULD IPSO FACTO BAR THE ASSESSEE FROM CLAIMING AN EXPENSE OR DISPUTING AN A DDITION IF IT IS OTHERWISE PERMISSIBLE UNDER LAW . THIS IS SO ESPECIALLY IN VIEW OF THE CIRCUMSTANCES , THAT THE ASSESSING OFFICER WHILE MAKING THE ADDITIONS /DISALLOWANCES DID NOT CALL UP ON THE ASSESSEE TO FURNISH ANY EXPLANATION . THE UPSHOT OF THE SUBMISSION MADE BY THE LEARNED COUNSEL FOR THE ASSE SSEE, IS THAT , HAD THE ASSESSEE BEEN GIVEN AN OPPORTUNITY BY THE ASSESSING OFFICER IT COULD HAVE DEMONSTRATED THAT N O ADDITIONS OR DISALLOWANCES WERE CALLED FOR , IN VIEW OF THE BINDING PRECEDENTS OF COURTS AND/OR TRIBUNAL IN RES PECT OF EACH OF THE ADDITION/DISALLOWANCE . THE OBSERVATIONS MADE IN THE TAX AUDIT REPORT COULD NOT HAVE FORMED THE BASI S OF ADDITIONS / ALLOWANCES BY THE ASSESSING OFFICER . ON THIS ASPECT OF THE MATTER THE OBSERVATIONS IN THE JUDGME NT OF THE SUPREME COURT IN THE CASE OF PULLANGODE RUBBER PROD UCE CO. LTD. V. STATE OF KERALA [1973] 91 ITR 18 BEING APPO SITE ARE EXTRACTED HEREINBELOW : IT IS NO DOUBT TRUE THAT E NTRIES IN THE ACCOUNT BOOKS OF THE ASSESSEE AMOUNT TO AN ADMISSION THAT THE AMOUNT IN QUESTION WAS LAID OUT OR EXPENDED FOR THE CULTIVATION , UPKEEP OR MAINTENANCE OF IMMATURE PLANTS FROM WHICH NO AGRICULTURAL INCOME W AS DERIVED DURING THE PREVIOUS YEAR . AN ADMISSION IS AN EXTREMELY IMPORTANT PIECE OF EVIDENCE BUT IT CANNOT BE SAID THAT IT IS CONCLUSIVE . IT IS OPEN TO THE PERSON WHO MADE THE ADMISSION TO SHOW THAT IT IS INCORRECT . (P . 20) . 11 . 1 WE FIND THAT THE TRIBUNAL INSTEAD OF EXAMINING TH E MATTER FROM THIS ANGLE HAS REPEATED THE ORDER PASSE D IN THE FIRST ROUND WITHOUT DUE APPLICATION OF MIND TO THE ISSUES WHICH CALLED FOR ADJUDICATION. 37. THE NAGPUR BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS. SANMUKHDAS WADHWANI (SUPRA) HELD CATEGORICALLY THAT THE INCOME NOT ASSESSABLE AS UNDISCLOSED INCOME OF THE ASSESSEE CA NNOT BE ASSESSED AS SUCH MERELY BECAUSE ASSESSEE DECLARED THE SAME THROUGH A STATEMENT IN SEARCH ACTION. ADMISSION MADE BY THE ASSESSEE IN THE RETURN OF INCOME IS NO SACROSANCT. AO IS UNDER STA TUTORY OBLIGATION TO MAKE ASSESSMENT OF ASSESSEE BASED ON THE FACTS OF C ASE AND AS PER THE PROVISIONS OF ACT. IN OTHER WORDS, COMING TO THE F ACTS OF THE ASSESSEE, IF THE SAID SUM OF RS. 1 CRORE IS NOT ASSESSABLE TO TA X AS INCOME OF THE ASSESSEE, THE SAME OUGHT NOT BE ASSESSED EVEN IF TH E ASSESSED INCOME COMES TO A LOWER FIGURE QUA THE RETURNED INCOME. ITA NOS.1508 TO 1511/PUN/2015 PRITI DEVENDRA SHAH 11 38. WE HAVE CONSIDERED THE ABOVE LEGAL SCOPE OF THE PRINCIPLE RELATING TO THE LOWER FIGURE OF ASSESSED INCOME QUA THE RETU RNED INCOME. FURTHER, WE HAVE HEARD THE PARTIES AND PERUSED THE WRITTEN SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE. F URTHER ALSO, WE PERUSED THE REASONING GIVEN BY THE CIT(A) WHILE DIS MISSING THE CLAIM OF THE ASSESSEE. WE FIND THE CONTENTS OF PARA NO.12 O F HIS ORDER ARE RELEVANT. FOR THE SAKE OF COMPLETENESS OF THIS ORD ER, WE PROCEED TO EXTRACT PARA NO.13.2 OF THE CIT(A) : 13.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . TO SUM UP, THE FRESH CLAIM MADE BY THE APPELLANT DURING THE PRESENT PROC EEDINGS THAT SUCH INCOME OF RS.1,00,00,000/- MAY BE EXCLUDED FRO M THE TOTAL INCOME ASSESSED BY THE ASSESSING OFFICER AS NO DISC REPANCIES WERE FOUND DURING THE ASSESSMENT PROCEEDINGS CANNOT BE ACCEPTED AS THE ADDITIONAL INCOME WAS OFFERED VOLUN TARILY IN THE RETURN OF INCOME. THE ALTERNATE CLAIM OF THE APPEL LANT FOR SET OFF OF SUCH CONTINGENCIES AGAINST OTHER STATUTORY DISAL LOWANCE MADE BY THE AO ALSO CANNOT BE ACCEPTED AS DISCUSSED ABOV E. GROUND OF APPEAL NO.8 STANDS REJECTED. THE CIT(A) DENIED THE CLAIM OF THE ASSESSEE IGNORIN G THE SETTLED LEGAL PROPOSITIONS ON THE TOPIC. THE REASONS GIVEN ABOVE BY THE CIT(A) ARE ARTIFICIAL AND NOT SUPPORTED BY THE LEGAL PRECE DENTS. 39. THE CBDT ISSUED A CIRCULAR NO.549 DATED 31-10-1 989 IMPOSING FETTERS ON THE AOS FOR NOT DETERMINING THE ASSESSED INCOME AT A LOWER FIGURE THAN THE RETURNED INCOME. THE SAID CIRCULAR WAS HELD ULTRA VIRES BY THE HIGHER JUDICIARY IN THE CASE OF GUJARAT GAS COMPANY LTD. (SUPRA). INFACT, IT IS THE DUTY OF THE AO TO MAKE AN ASSESSM ENT BASING ON THE FACTS OF THE CASE AND AS PER THE PROVISIONS OF THE I.T. ACT. IN THE CASE OF SHELLY PRODUCTS (SUPRA), THE HONBLE APEX COURT HEL D THAT THE ADVANCE TAX/SELF ASSESSMENT TAX PAID AS PART OF AN ABUNDANT CAUTION ARE REQUIRED TO BE REFUNDED ON VERIFICATION OF THE CLAI M OF THE ASSESSEE. THE NAGPUR COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS. SANMUKHDAS WADHWANI (SUPRA) HELD THAT THE ASSESSED INCOME CAN BE LOWER QUA THE RETURNED INCOME OF THE ASSESSEE. FUR THER, THE TRIBUNAL HELD IN THIS CASE, ANY AMOUNT WHICH IS NOT ASSESSAB LE AS UNDISCLOSED INCOME OF THE ASSESSEE CANNOT BE ASSESSED MERELY FO R THE REASON ASSESSEE DECLARED IN THE RETURN OF INCOME. THERE C ANNOT BE SUCH ESTOPPELS AGAINST THE STATUTE IF THE ASSESSEE ITSEL F FINDS A PATENT MISTAKE OF FACT WHILE FILING THE RETURN OF INCOME A SSESSEE CANNOT BE ASSESSED ON SUCH INCORRECT INCOME MERELY ON THE BA SIS OF ADMISSION MADE BY HIM IN THE RETURN OF INCOME. 40. IN THE INSTANT CASE, CONSIDERING THE ABOVE SETT LED LEGAL PROPOSITIONS, WE PROCEED TO EXAMINE AVAILABILITY OF FACTS RELATING TO THE PRESENT CASE. IN THE RETURN OF INCOME, ASSESSEE ME RELY OFFERED AN AMOUNT OF RS.1 CRORE TOWARDS CONTINGENCY. MEANING THEREBY THAT INCASE THE AO MAKES CERTAIN ADDITIONS BASING ON SAME FACTS OR LEGAL ISSUES, THE SAID DISCLOSURE AMOUNT OF RS.1 CRORE SHOULD BE CONSIDERED FOR SET OFF/ADJUSTMENT ETC. IN CASE AO FAILED TO MAKE SUCH ADDITIONS, THE SAID AMOUNT OF RS.1 CRORE IS NOT REQUIRED TO BE ASSESSED AS INCOME OF THE ASSESSEE. IT IS AN ADMITTED FACT THAT THE AO MADE ADDITION U/S.14A OF THE ACT IN THE ASSESSMENT U/S.153A OF THE ACT IN TH E ABSENCE OF ANY INCRIMINATING MATERIAL. THIS ADDITION IS MADE OVER AND ABOVE THE SAID CONTINGENCY AMOUNT OF RS.1 CRORE. HOWEVER, WE FIND WHILE DISCUSSING IN THE PRECEDING PARAGRAPH THIS DISALLOWANCE U/S.14A I S UNSUSTAINABLE IN THIS ASSESSMENT AS THE SAME DOES NOT HAVE STRENGTH OF ANY INCRIMINATING MATERIAL. IN OTHER WORDS, THE AO MADE AN UNSUSTAINABLE ADDITION U/S.14A OF THE ACT AND TAXED THE SAID AMOU NT OF RS.1 CRORE- CONTINGENCY INCOME WITHOUT MAKING ADJUSTMENT THE SA ID AMOUNT OF RS.1 CRORE. IN ANY CASE, WE DELETED SAID DISALLOWANCE U /S.14A OF THE ACT. THEREFORE, THE QUESTION OF ADJUSTMENT IS ONLY AN AC ADEMIC EXERCISE. ITA NOS.1508 TO 1511/PUN/2015 PRITI DEVENDRA SHAH 12 IGNORING THE SAME, WE NOW HAVE TO DECIDE THAT THE S AID AMOUNT OF RS. 1 CRORE IS ASSESSABLE TO TAX IN THE LIGHT OF THE ABOV E LEGAL SCOPE RELATING TO THIS ADDITION. 41. THE AO HAS NOT BROUGHT ANY ISSUE OR FACTS RELAT ING TO THE UNDISCLOSED INCOME SPECIFIC TO THE SAID SUM OF RS.1 CRORE. IN SUCH CIRCUMSTANCES, WE ARE OF THE OPINION THAT THE DECIS ION OF THE NAGPUR BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS. SANMU KHDAS WADHWANI (SUPRA) BECOMES RELEVANT TO THE FACTS OF THE PRESEN T CASE. AS SUCH, WE PROCEED TO DISMISS THE VOLUNTARY-CENTRIC REASONING GIVEN BY THE CIT(A) FOR DENYING THE CLAIM OF THE ASSESSEE REGARDING TH E ISSUE OF TAXATION OF THE SAID AMOUNT OF RS.1 CRORE. CONSIDERING THE ABO VE, WE ARE OF THE OPINION THAT THE AO IS DIRECTED TO VERIFY THE WORKI NG OF TOTAL UNDISCLOSED INCOME ASSESSABLE IN THE HANDS OF THE ASSESSEE GOIN G BY THE CONCEPT OF REAL INCOME. HE SHALL GRANT REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. AO IS DIRECTED TO APPLY THE RATIO LA ID DOWN BY THE ABOVE REFERRED JUDGMENTS IN GENERAL AND THE RATIO LAID DO WN BY THE NAGPUR BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS. SANMU KHDAS WADHWANI (SUPRA) WHILE ARRIVING AT THE ASSESSED INCOME OF TH E ASSESSEE. AO SHALL NOT CONSIDER THE SO-CALLED VOLUNTARY DISCLOSURE OF THE SAID AMOUNT OF RS. 1 CRORE AS THE SAME DOES NOT AMOUNT TO ANY VOLUNTAR Y DISCLOSURE IN A REAL SENSE. HAD IT BEEN REALLY VOLUNTARY, THE ASSE SSEE WOULD NOT HAVE RAISED THIS ISSUE BEFORE US. IT IS THE REQUIREMENT OF THE STATUTE THAT THE AO SHALL MAKE ASSESSMENT STRICTLY AS PER THE PROVIS IONS OF THE LAW AND DETERMINE THE ASSESSED INCOME ACCORDINGLY. FOR APP LYING THE SAID LEGAL PRINCIPLES AS WELL AS THE JUDGMENTS AND THE ORDER O F THE NAGPUR BENCH OF THE TRIBUNAL, WE REMAND THIS ISSUE TO THE FILE O F THE AO FOR THE LIMITED PURPOSE OF ADJUDICATION OF THE ISSUE RELATING TO TA XABILITY OF THE CONTINGENCY AMOUNT OF RS.1 CRORE. ACCORDINGLY, THI S GROUND BY THE ASSESSEE IS ALLOWED PRO TANTO. 13. FROM THE ABOVE, IT IS EVIDENT THAT MAKING OF PROPER ASSESSMENT BY THE AO ASSUMES SIGNIFICANCE UNDER THE STATUTE NOTWITH STANDING THE OFFER OF INCOME BY THE ASSESSEE IN THE RETURN OF INCOME ON PECULIAR FACTS OF EACH CASE. THEREFORE, WE ARE OF THE VIEW THAT CONSIDERING THE PRINCIPLES OF NATURAL JUSTICE, THE ADDITIONAL GROUNDS RAISED BY THE ASSESSEE SHOULD BE ADMITTED AND REMANDED TO THE FILE OF A O FOR FRESH ADJUDICATION IN THE MATTER CONSIDERING THE ABOVE REFERRE D DECISIONS AND THE CBDT CIRCULAR REFERRED ABOVE. ACCORDINGLY, THE ADDITIONAL GROUNDS RELATING TO GRANTING OF TELESCOPING BENEFIT WITH RE GARD TO THE DISCLOSURE OF UNACCOUNTED JEWELLERY IS REMANDED TO THE FILE OF AO FOR FRESH ADJUDICATION AND DECISION. IT IS OBVIOUSLY UNFAIR TO TAX RS.67,89,962/- AND OTHERS IF ANY, IN THREE ASSESSMENT YEA RS AS DISCUSSED ABOVE. THEREFORE, AO SHALL NOT ONLY ALLOW THE CL AIM OF THE ASSESSEE AFTER HEARING HIM AND EXAMINING THE ISSUE AND AP PLICABILITY OF THE CITED JUDGMENTS BUT ALSO GRANT REASONABLE OPPORT UNITY OF BEING ITA NOS.1508 TO 1511/PUN/2015 PRITI DEVENDRA SHAH 13 HEARD TO THE ASSESSEE IN ACCORDANCE WITH THE SET PRINC IPLES OF NATURAL JUSTICE. THUS, ALL THE ADDITIONAL GROUNDS RAISED BY THE ASS ESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 14. COMING TO THE REGULAR GROUND NOS. 1 TO 4 RAISED BY THE ASSESSEE IN THE APPEAL, LD. AR FOR THE ASSESSEE SUBMITTED THAT ALL THE GROUNDS REVOLVE AROUND THE ISSUE OF ADDITION OF RS.2.2 LAKHS ON ACC OUNT OF UNEXPLAINED INVESTMENT IN SILVER ARTICLES. 15. BRINGING OUR ATTENTION TO THE ORDER OF TRIBUNAL IN THE CASE OF NETRA PRITAM SHAH VS. DCIT VIDE ITA NO.1504/PUN/2015 FOR THE A.Y. 2011-12, ORDER DATED 29-11-2017, LD. AR FOR THE ASSESSE E SUBMITTED THAT THIS ISSUE NOW STANDS COVERED BY THE ORDER OF THE TRIBUNAL. AS DISCUSSED IN THE ABOVE SAID CASE, THE ASSESSEE HAPPENE D TO BE ONE OF THE FAMILY MEMBERS OF THIS GROUP. RELEVANT DISCUSSION IS G IVEN IN PARA NOS. 4 TO 10 OF THE SAID ORDER OF THE TRIBUNAL AND THEY A RE IDENTICAL. FOR THE SAKE OF COMPLETENESS, RELEVANT PORTIONS ARE EXTR ACTED HERE AS UNDER : 4. BRIEFLY, IN THE FACTS OF THE CASE, SEARCH AND S EIZURE ACTION UNDER SECTION 132 OF THE ACT WAS CONDUCTED IN THE PARAG G ROUP OF CASES ON 04.02.2011. SEARCH WAS CONDUCTED AT THE RESIDENCE O F SHRI DEVENDRA SHAH, SHRI PRITAM SHAH, THEIR BUSINESS ASSOCIATES AN D THE CORRESPONDING BUSINESS PREMISES ON 04.02.2011. THE SAID GROUP WAS ENGAGED IN TRADING AND MANUFACTURING OF MILK PRODUC TS, WHEREIN M/S. PARAG MILK FOODS PVT. LTD. WAS FLAGSHIP CONCERN OF THE GROUP AND M/S. BHAGYALAXMI DAIRY FARMS PVT. LTD. WAS SISTER CONCER N OF PARAG GROUP. SOME OF GROUP CONCERNS OF PARAG GROUP AS WELL AS BU SINESS ASSOCIATES WERE ALSO COVERED UNDER SURVEY UNDER SECTION 133A O F THE ACT. VARIOUS LOOSE PAPERS, HAND WRITTEN CHITS AND COMPUTER PRINT OUTS, ETC. SUPPORTING THE PRACTICE ADOPTED BY THE CONCERN WAS SEIZED FROM THE BUSINESS PREMISES AS WELL AS RESIDENTIAL PREMISES. ALL THESE PAPERS / LOOSE DOCUMENTS WERE CONFRONTED TO SHRI DEVENDRA SH AH, SMT. PRITI SHAH, SMT. NETRA PRITAM SHAH (ASSESSEE) AND THE EMP LOYEES AND CONCERNED OFFICIALS DURING THE SEARCH AS WELL AS DU RING POST SEARCH ENQUIRIES.. . . . 5. . . . . 6. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE A SSESSEE POINTED OUT THAT OUT OF TOTAL JEWELLERY FOUND VALUED AT RS.8,80 ,000/-, THE ASSESSEE HAD SHOWN THE VALUE OF SILVER ARTICLES AT RS.2,20,0 00/-, WHICH HAS ACCUMULATED OVER A PERIOD OF TIME AND THE SAME IS T HUS, EXPLAINED IN THE HANDS OF ASSESSEE.. . . . . . ITA NOS.1508 TO 1511/PUN/2015 PRITI DEVENDRA SHAH 14 7. . . . . 8. . . . . 9. . . . . 10. NOW, COMING TO THE SECOND ADDITION ON ACCOUNT O F VALUE OF SILVER ARTICLES FOUND FROM THE ASSESSEE AND HER FAMILY MEM BERS, WHICH TOTALED TO THE VALUE OF RS.8,80,000/-. THE LIST OF FAMILY MEMBERS WHICH IS AVAILABLE AT PAGE 6 OF THE ASSESSMENT ORDER REFLECT S 13 MEMBERS OF THE SAID FAMILY AND IN VIEW OF FAMILY TRADITIONS , HOLDING OF SILVER ARTICLES TO THE EXTENT OF RS.2,20,000/- MERI TS TO BE ACCEPTED IN THE HANDS OF ASSESSEE. ACCORDINGLY, WE HOLD SO. THUS, THERE IS NO MERIT IN MAKING AFORESAID ADDITION ON ACCOUNT OF SI LVER OF RS.2,20,000/-. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE TH US, ALLOWED. 16. CONSIDERING THE ABOVE, WE ARE OF THE OPINION THAT THE UNEXPLAINED SILVER TO THE EXTENT OF WORTH RS.2.2 LAKHS IS H ELD TO BE ALLOWABLE WITHOUT ANY TAX. THEREFORE, RELYING ON THE ORDER OF TRIBUNAL (SUPRA), TAXING THE UNACCOUNTED SILVER WORTH OF RS.2.2 LAKHS IN THE HANDS OF THE ASSESSEE IS UNCALLED FOR. ACCORDINGLY, THE OR IGINAL GROUNDS RAISED BY THE ASSESSEE ON THIS ISSUE ARE ALLOWED IN TOTO. 17. COMING TO THE APPEALS ITA NOS. 1508 TO 1510/PUN/2015 FOR A.YRS. 2008-09 TO 2010-11 , LD. AR DREW OUR ATTENTION TO THE GROUNDS RAISED BY THE ASSESSEE IN ALL THE 3 APPEALS AND MENTIONED THAT THE SAME ARE RAISED IN CONNECTION WITH THE AFORESAID UNEXPLAIN ED INVESTMENT IN JEWELLERY OF 25,05,578/- FOR THE A.Y. 2008-09, RS.18,28,750/- FOR THE A.Y. 2009-10 AND RS.24,55,634/- FOR TH E A.Y. 2010-11 RESPECTIVELY. TOTAL OF THESE ADDITIONS WORKS OU T TO RS.67,89,962/-. REFERRING TO THE FACTS AND ADDITIONAL GROUND S RAISED IN A.Y. 2011-12, SUBJECTED TO THE GRANT OF RELIEF ON ACCOUN T OF TELESCOPIC BENEFIT, LD. AR FOR THE ASSESSEE FURTHER SUBMITTE D THAT HE WILL NOT PRESS THESE APPEALS. THE ADDITIONS IN THESE ASSE SSMENT YEARS WERE MADE AS PER THE DATES AVAILABLE ON THE RECEIPTS/INV OICES SHOWING THE EVIDENCE OF ACQUISITION OF JEWELLERY IN PARTICULAR ASSESSMENT YEA R. ITA NOS.1508 TO 1511/PUN/2015 PRITI DEVENDRA SHAH 15 18. ON HEARING BOTH THE PARTIES, WE FIND THE PRAYER OF THE LD. AR FOR THE ASSESSEE SHOULD BE ALLOWED IN VIEW OF OUR FINDING IN PAR A 13 ABOVE. THEREFORE, ALL THE 3 APPEALS STANDS DISMISSED AS NOT PRES SED IN VIEW OF OUR FINDING IN PRINCIPLE AND IN FAVOUR OF GRANTING TELESCOPIN G BENEFIT TO THE EXTENT OF THE ABOVE SAID AMOUNTS FROM THE INCOME RETURNED BY THE ASSESSEE FOR A.Y. 2011-12. THE FIGURES AND FACTS AR E SUBJECT TO VERIFICATION OF THE AO DURING THE REMAND PROCEEDINGS FOR T HE A.Y. 2011-12. WITH THESE DIRECTIONS, THE GROUNDS RAISED BY TH E ASSESSEE IN ALL THESE 3 APPEALS ARE DISMISSED AS NOT PRESSED. 19. IN THE RESULT, ALL THE 3 APPEALS OF THE ASSESSEE ARE DISMISSED. 20. TO SUM UP, THE APPEAL OF THE ASSESSEE FOR A.Y. 2011-12 IS ALLOWED FOR STATISTICAL PURPOSES AND THE APPEALS OF THE ASS ESSEE FOR A.YRS. 2008-09 TO 2010-11 ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 17 TH DAY OF JANUARY, 2018. SD/- SD/- (VIKAS AWASTHY) (D. KARUNAKARA RAO) /JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE; DATED : 17 TH JANUARY, 2018. / COPY OF THE ORDER FORWARDED TO : BY ORDER // TRUE COPY // //TRUE COPY// SENIOR PRIVATE SECRETARY , / ITAT, PUNE 1. / THE APPELLANT 2. / THE RESPONDENT 3. CIT(A) - 1 3, PUNE 4 . 5. CIT - 13, PUNE % , , A BENCH PUNE; 6 . / GUARD FILE.
