ACIT, Cir. 3(1), Dhule, V. Shri Radheshyam B. Agarwal, Dhule

ITA 161/PUN/2009

• Counselvise Citation: 16124514 RSA 2009
• Duration Of Justice: 6 year(s) 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 15-12-2014
• Assessment Year: 2001-2002
• Appeal Filed On: 02-02-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B C MALAKAR
• Keywords: Unexplained cash credit; Unexplained investment; Salary income; Opportunity of being heard; Corroborative evidences; Block assessment; Reason to believe; Reassessment proceedings
• Section: 143(3); 27; 148; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE MS. SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO. 160 AND 161/PN/2009 (ASSESSMENT YEARS : 2000-01 & 2001-02) ACIT, CIRCLE-3(1), DHULE .. APPELLANT VS. SHRI RADHESHYAM B. AGRAWAL, KARTAVYA, 80 FT ROAD, DHULE. .. RESPONDENT PAN NO.AAOPA2001M ASSESSEE BY : SHRI NIKHIL PATHAK REVENUE BY : SHRI B.C. MALAKAR DATE OF HEARING : 15-12-2014 DATE OF PRONOUNCEMENT : 13-03-2015 ORDER PER R.K.PANDA, AM : THE ABOVE 2 APPEALS FILED BY THE REVENUE ARE DIRECT ED AGAINST THE COMMON ORDER DATED 28-11-2008 OF THE CIT(A)-I, NASHIK RELATING TO ASSESSMENT YEAR 2000-01 AND 2001-02 RESPECTIVELY . FOR THE SAKE OF CONVENIENCE, BOTH THE APPEALS WERE HEARD TOGETHE R AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. ITA NO.160/PN/2009 (A.Y.2000-2001) : 2. GROUND OF APPEAL NO.1 BY THE REVENUE READS AS UN DER : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A)-I, NASHIK HAS ERRED IN DELETING THE ADDITION MADE BY AO O F RS.23,50,000/- FOR A. Y. 2000-01 BEING UNACCOUNTED INVESTMENTS MADE BY THE ASSESSEE IN THE CHINTAMANI NAGARI SAHAKARI PATSANTHA MARYADIT, DHULE. 2 2.1 FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSES SEE IS AN INDIVIDUAL AND IS ENGAGED IN THE BUSINESS OF CONSTRUCTION IN T HE NAME AND STYLE OF DHULE CONSTRUCTION COMPANY DERIVING INCOME FROM CON TRACT RECEIPTS, INTEREST AND REMUNERATION AS PARTNER FROM A PARTNER SHIP FIRM NAMELY M/S. HOTEL DWARKA. HE ALSO DERIVES SALARY INCOME F ROM RADHESHYAM STOCKBROKERS PVT. LTD. APART FROM THIS HE ALSO DER IVES INCOME FROM HOUSE PROPERTY AND INCOME FROM OTHER SOURCES. THE ASSESSEE IS ALSO THE FOUNDER AND CHAIRMAN OF A CREDIT COOPERATIVE SO CIETY NAMELY M/S.CHINTAMANI NAGARI SAHAKARI PATSANSTHA MARYADIT , DHULE. AN ACTION U/S.132 OF THE I.T. ACT WAS CARRIED OUT AGAI NST M/S.CHINTAMANI NAGARI SAHAKARI PATSANSTHA MARYADIT, DHULE ON 17-09 -2002. ORDER U/S.158BC R.W.S. 143(3) DATED 26-10-2004 WAS PASSED IN THE CASE OF M/S.CHINTAMANI NAGARI SAHAKARI PATSANSTHA MARYADIT, DHULE WHEREIN ADDITIONS U/S.68 OF THE ACT TOWARDS UNEXPLAINED FIX ED DEPOSITS OF RS.68,80,000/- WAS MADE. THIS ADDITION OF RS.68,80 ,000/- WAS DELETED BY THE CIT(A)-I, NASHIK VIDE HIS ORDER DATE D 29-12-2006. IN THE SAID ORDER, THE CIT(A) DIRECTED THE AO TO INITI ATE RE-ASSESSMENT PROCEEDINGS IN THE CASE OF THE PERSONS WHO ACTUALLY OWNED THE SAID UNEXPLAINED FIXED DEPOSITS. THE AO THEREAFTER INIT IATED RE-ASSESSMENT PROCEEDINGS IN THE CASE OF THE ASSESSEE AND MADE TO TAL ADDITION OF RS.68,80,000/, I.E. RS.23,50,000/- IN THE A.Y. 2000 -2001 AND RS.45,30,000/- IN THE A.Y. 2001-02. 3 2.2 SO FAR AS THE ADDITION OF RS.68,80,000/- IS CON CERNED THE LD.CIT(A) AT PARA 5 OF HIS ORDER HAS SUMMARIZED THE REASONS GIVEN BY THE AO WHICH READS AS UNDER : I) M/S.CHINTAMANI NAGARI SAHAKARI PATSANSTHA MAR YADIT, DHULE, AS WELL AS THE APPELLANT FAILED TO PROVE THAT THE SAID F IXED DEPOSITS APPEARING IN THE BOOKS OF THE PATSANSTHA WERE GENUINE AND COULD NOT PRODUCE THE FIXED DEPOSIT HOLDERS BEFORE THE A.O. TH E A.O. HAS CONCURRED WITH THE OPINION OF THE JT.C.I.T., RANG E-3, NASHIK, GIVEN IN THE ASSESSMENT OF THE PATSANSTHA. II) THAT THE SAID PATSANSTHA WAS FLOATED BY THE APPE LLANT AND THE APPELLANT IS THE WHOLE AND SOLE OF THE PATSANSTHA AND O THER DIRECTORS ARE DUMMY DIRECTORS AND FURTHER THE AFFAIRS OF THE P ATSANSTHA ARE CLOSELY CONTROLLED BY THE APPELLANT HIMSELF. III) THAT THE APPELLANT IS RUNNING VARIOUS BUSINESSES I N HIS NAME AND IN THE NAME OF HIS FAMILY MEMBERS AND IS CONTROLLING ALL THESE BUSINESSES ON HIS OWN. IV) THAT THERE IS GREAT POSSIBILITY THAT THE FUNDS RE PRESENTED BY THE SAID FIXED DEPOSITS OF RS.68,80,000/- IN FACT BELONGED TO THE APPELLANT. V) THAT THE PREPARATION OF FIXED DEPOSITS IN BENAM I NAMES OR IN THE NAMES OF NON-EXISTENT PERSONS AND ALSO PREPARATION OF LO AN DOCUMENTS IN RESPECT OF SUCH FIXED DEPOSITS COULD NOT H AVE BEEN DONE WITHOUT THE EXPRESS INSTRUCTION AND KNOWLEDGE OF THE A PPELLANT. VI) THAT AN EMPLOYEE SHRI ANIL AGRAWAL CONTINUED A S GENERAL MANAGER EVEN AFTER FOUND ENGAGED IN FRAUDULENT ACTIVITIES AN D NOT SUSPENDED AS HE WAS ACTING UNDER THE INSTRUCTIONS OF THE APPELLAN T. VII) THAT THE A.O. OBSERVED THAT IN RESPECT OF TWO GR OUPS OF FIXED DEPOSITS, THE SIGNATURES OF THE PERSONS ENCASHING THE SAME WERE EXACTLY IDENTICAL. THE A.O. ALSO STATED THAT THE DEPO SITS CLAIMED TO BE BELONGING TO SHRI RAJENDRA SHARMA DID NOT BELONG TO HIM AS HE DENIED HAVING KEPT SUCH FIXED DEPOSITS. THE FIXED DEPOSITS IN R ESPECT OF 77 AND 20 PERSONS CLAIMED TO HAVE BEEN INTRODUCED BY SH RI RAMAKANT V.AGRAWAL, MANAGER, DHULE VIKAS SAHAKARI BANK WERE A LSO NOT GENUINE AS SHRI RAMAKANT V. AGRAWAL VIDE HIS LETTER DATED 24/ 09/2004 HAD CATEGORICALLY DENIED TO HAVE INTRODUCED THE SAID PE RSONS. IN VIEW OF THE ABOVE OBSERVATIONS, IN THE ABSENCE OF ANY PROOF RE GARDING GENUINENESS OF THESE DEPOSITS AND IN VIEW OF THE OBSERVAT IONS OF THE A.O. IN THE ASSESSMENT ORDER OF M/S.CHINTAMANI NAGARI SA HAKARI PATSANSTHA MARYADIT, DHULE, THE A.O. HELD THAT THE PR EPONDERANCE OF HUMAN PROBABILITIES SUGGEST THAT THESE DEPOSITS ACTUALLY BELONGED TO THE APPELLANT. VIII) THAT THE SAID AMOUNT OF RS.68,80,000/- BELONGIN G TO THE APPELLANT WAS PARKED BY THE HIM IN DIFFERENT NAMES WITH THE PAT SANSTHA IN THE FORM OF FIXED DEPOSITS AND WERE UTILIZED AS AND WHEN NEEDED FOR UNACCOUNTED TRANSACTIONS OF BUSINESSES OF HIS FAMILY AND H ENCE WOULD BE TAXABLE IN HIS INDIVIDUAL HANDS. 4 2.3 IN VIEW OF THE ABOVE REASONS THE AO MADE ADDITI ON OF RS.23,50,000/- BEING THE PEAK OF THE CREDIT BY HOLD ING THAT THE ASSESSEE MR. RADHE SHYAM AGRAWAL ONLY HAS MADE THE INVESTMENTS IN THE FICTITIOUS NAMES OF NON-EXISTING PERSONS. 3. BEFORE CIT(A) IT WAS SUBMITTED THAT THE INFORMAT ION REQUIRED BY THE A.O. IN RESPECT OF THE ALLEGED UNEXPLAINED F IXED DEPOSITS AS WAS AVAILABLE WITH THE PATSANSTHA WAS FILED BEFORE HIM. IT WAS EXPLAINED THAT THE FOLLOWING INFORMATION IN RESPECT OF EACH F IXED DEPOSIT WAS FILED : A. THE NAME OF THE DEPOSITOR HOLDER ALONGWITH THE ADDRESS PRESENT AT THE TIME OF OPENING OF DEPOSIT. B. DATE OF KEEPING THE DEPOSIT. C. MODE OF KEEPING THE DEPOSIT. D. SIGNATURE OF THE FIXED DEPOSIT CHALLAN E. FIXED DEPOSIT NUMBER F. DATE ON DEPOSIT RECEIPT G. AMOUNT OF DEPOSIT H. DATE OF MATURITY OF DEPOSIT I. MODE OF PAYMENT OF INTEREST J. DATE OF PAYMENT OF INTEREST AMOUNT K. MODE OF REPAYMENT OF PRINCIPLE AMOUNT L. DATE OF REPAYMENT OF PRINCIPLE AMOUNT M. SIGNATURE AT THE TIME OF DISCHARGE OF DEPOS IT N. CURRENT POSITION 3.1 IT WAS SUBMITTED THAT THE THEN C.I.T.(APPEALS) HAS DIRECTED THE A.O. IN HIS APPELLATE ORDER DATED 29/12/2006 IN THE CASE OF M/S.CHINTAMANI NAGARI SAHAKARI PATSANSTHA MARYADIT, DHULE, THAT THE DEPOSITS OUGHT TO BE BROUGHT TO TAX IN THE HANDS OF ACTUAL DEPOSITORS AND NOT IN THE HANDS OF THE ASSESSEE. IT WAS SUBMI TTED THAT THE OBSERVATIONS AND ALLEGATIONS MADE BY THE A.O. IN HI S ASSESSMENT ORDER IN THE CASE OF M/S.CHINTAMANI NAGARI SAHAKARI PATSA NSTHA MARYADIT 5 ARE NOTHING BUT A.O'S SURMISES, SUSPICIONS AND CONJ ECTURES WITHOUT ANY SUPPORTING EVIDENCE. 3.2 THE ASSESSEE SUBMITTED BEFORE LD.CIT(A) THAT TH E A.O. HAS ALSO ASSESSED THE INCOME OF THE ASSESSEE U/S.158BC VIDE ORDER DATED 29/09/2004. IN THE SAID ASSESSMENT, THE A.O. HAS NO T WRITTEN ANYTHING ABOUT THE ALLEGED UNDISCLOSED INVESTMENT IN FIXED D EPOSITS OF RS.68,80,000/- BY THE ASSESSEE. THE A.O. HAS ALSO N OT MADE ANY SUCH ADDITION ON PROTECTIVE BASIS IN THE SAID ORDER U/S. 158BC. AS REGARDS ALLEGATION OF THE A.O. THAT IN THE TWO SETS OF FIXE D DEPOSIT RECEIPTS THE SIGNATURES AT THE TIME OF ENCASHMENT ARE SIMILAR, IT WAS SUBMITTED THAT THE SAID SIGNATURES WERE NOT OF SHRI RADHESHYAM B. AGRAWAL. AS REGARDS DEPOSITS IN THE NAME OF SHRI RAJENDRA SHARM A ARE CONCERNED IT WAS SUBMITTED THAT ADEQUATE PROOF REGARDING DEPOSIT AND WITHDRAWAL OF THE SAID DEPOSIT WERE SUBMITTED DURING THE ASSES SMENT PROCEEDINGS AND THE APPELLATE PROCEEDINGS TO PROVE THAT THE SAM E WERE ENCASHED BY HIM ONLY. THE AVAILABLE PROOFS WERE FILED WHICH WER E IGNORED BY THE A.O. AND STATEMENT OF SHRI RAJENDRA SHARMA WAS ONLY BELIEVED. THE REAL DEPOSITOR, I.E. SHRI RAJENDRA SHARMA WAS IN FA CT POINTED-OUT TO THE A.O. ON THE BASIS OF THE DOCUMENTARY EVIDENCE AVAIL ABLE WITH M/S.CHINTAMANI NAGARI SAHAKARI PATSANSTHA MARYADIT. AS REGARDS THE DEPOSITORS INTRODUCED BY SHRI RAMAKANT AGRAWAL IS C ONCERNED IT WAS SUBMITTED THAT VIDE LETTER DATED 23/07/2003, SHRI R AMAKANT AGRAWAL HAS CATEGORICALLY STATED THAT HE KNOWS THE SAID 20 DEPOSITORS. THE COPY OF THE LETTER WAS FILED WITH THE A.O. 6 3.3 AS REGARDS FIXED DEPOSIT IN THE NAME OF SHRI M UKESH SUHAGMAL JAIN IS CONCERNED, IT WAS SUBMITTED THAT THE DEPOSI T WAS ACCEPTED AND THE LOAN WAS GIVEN AGAINST THE SAID DEPOSIT, THEREA FTER THE DEPOSIT WAS ENCASHED AND LOAN WAS REPAID. THE DOCUMENTARY EVIDE NCE IN RESPECT OF THE TRANSACTION AVAILABLE WITH THE PATSANSTHA WA S FILED WITH THE A.O. HOWEVER, THE A.O. IGNORED THE SAME AND BELIEVED THE STATEMENT GIVEN BY SHRI MUKESH SUHAGMAL JAIN THAT THE DEPOSIT DID N OT BELONG TO HIM. 3.4 THE ASSESSEE SUBMITTED THAT NO OPPORTUNITY TO C ROSS-EXAMINE SHRI MUKESH JAIN, SHRI RUPESH JAIN, SHRI RAMAKANT A GRAWAL AND SHRI RAJENDRA SHARMA WAS GRANTED BY THE AO. 3.5 IT WAS POINTED OUT THAT THE STAFF OF THE SOCIET Y IS APPOINTED BY THE SOCIETY AS PER THE NORMS APPROVED BY THE REGIST RAR OF THE CO- OPERATIVE SOCIETIES AS PER THE ACT, RULES AND BYE-L AWS. AS REGARDS COMMENT OF THE A.O. IN RESPECT OF SHRI ANIL AGRAWAL , THE ASSESSEE SUBMITTED THAT SHRI ANIL AGRAWAL WAS IN THE BOARD O F DIRECTORS DURING THE RELEVANT ASSESSMENT YEARS. HE WAS THE ONLY PERS ON IN THE RELEVANT YEARS WHO HAD THE COMPLETE KNOWLEDGE REGARDING PROC EDURAL ASPECTS OF RUNNING A CREDIT COOPERATIVE SOCIETY AS HE HAD W ORKED PREVIOUSLY IN THE BANKING INDUSTRY IN VARIOUS CAPACITIES. AFTER N OTING THE VARIOUS IRREGULARITIES HE WAS REMOVED FROM THE BOARD AND WA S ONLY RETAINED AS GENERAL MANAGER (AN EMPLOYEE). 3.6 THE ASSESSEE SUBMITTED THAT M/S.CHINTAMANI NAGA RI SAHAKARI PATSANSTHA MARYADIT IS REGISTERED UNDER MAHARASHTRA CO.OPERATIVE 7 SOCIETIES' ACT, 1960. THE COOPERATIVE SOCIETY IS UN ION OF PERSONS ESTABLISHED ACCORDING TO THE PRINCIPLE OF EQUALITY, THE NUMBER OF MEMBERS OF THE SOCIETY CAN BE UNLIMITED AND THE SAM E IS FORMED FOR IMPROVING FINANCIAL POSITION OF ITS MEMBERS. THE SO CIETY HAS ITS BY- LAWS AND IS GOVERNED BY THE SAME AND ALSO BY THE PR OVISIONS OF THE COOPERATIVE SOCIETIES' ACT. THE CHAIRMAN, OFFICE BE ARERS, MANAGING COMMITTEE ARE CONSTITUTED OR ELECTED BY MEMBERS OF THE SOCIETY. THE MANAGING COMMITTEE TAKES POLICY DECISIONS AND THE S AME ARE IMPLEMENTED BY THE MANAGER AND STAFF OF THE SOCIETY . THE CHAIRMAN AND DIRECTORS ARE WORKING HONORARY TO SERVE THE SOC IETY AND CANNOT BE EXPECTED TO KNOW AND LOOK AFTER EACH AND EVERY TRAN SACTION OF ACCEPTING AND REPAYING THE FIXED DEPOSITS TO THE ME MBERS. 3.7 IT WAS SUBMITTED THAT M/S.CHINTAMANI NAGARI SAH AKARI PATSANSTHA MARYADIT IS GOVERNED BY 11 DIRECTORS AND 5 MEMBERS OF ADVISORY COMMITTEE AND VARIOUS EMPLOYEES. THERE ARE MANY RENOWNED PERSONS IN THE BOARD OF DIRECTORS AND THE ADVISORY COMMITTEE OF THE SOCIETY. THESE PERSONS CANNOT BE T REATED AS THE DUMMY DIRECTORS OR DUMMY MEMBERS OF ADVISORY COMMIT TEE. 3.8 THE ASSESSEE SUBMITTED THAT HE IS AN ENGINEER A ND IS RUNNING SEVERAL BUSINESSES AND HENCE DURING THE F.YS 1999-2 000 AND 2000- 2001 COULD NOT DEVOTE MUCH OF HIS TIME TO THE PATSA NSTHA. HE WAS NEVER PRESENT AND BEING CHAIRMAN ALSO NOT REQUIRED TO BE PRESENT WHEN THE DEPOSITS ARE ACCEPTED OR REPAID. 8 3.9 FINALLY, IT WAS SUBMITTED THAT THE AO HAS NOT B ROUGHT ON RECORD ANY EVIDENCE TO SHOW THAT THE SAID AMOUNT OF RS.68. 80 LAKHS WAS AVAILABLE WITH THE ASSESSEE IN HIS PERSONAL CAPACIT Y AND THE AO HAS NOT BROUGHT ON RECORD A SINGLE EVIDENCE TO PROVE THAT T HE ALLEGED UNEXPLAINED FIXED DEPOSITS BELONGED TO THE ASSESSEE . 4. BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE THE LD.CIT(A) DELETED THE ADDITION FOR BOTH THE ASSESSM ENT YEARS BY OBSERVING AS UNDER : 7. I HAVE CAREFULLY CONSIDERED THE CONTENTIONS OF TH E A.O.IN HIS ASSESSMENT ORDERS AND THE REMAND REPORT AND ALSO THE SUBMI SSIONS OF THE APPELLANT. ON PERUSAL OF THE SAME, IT IS NOTICED T HAT THE SAID FIXED DEPOSITS AMOUNTING TO RS.68,80,000/- WERE NOT EXPLAINE D OR PROVED EITHER BY THE PATSANSTHA OR BY THE APPELLANT TO BE G ENUINE TO THE SATISFACTION OF THE A.O. IT IS ALSO NOTICED THAT THE T HEN C.I.T.(APPEALS) IN HIS ORDER DATED 29/12/2006 IN THE CASE OF M/S. CHINTAM ANI NAGARI SAHAKARI PATSANSTHA MARYADIT, DHULE, HAS DIRECTED THE A.O. TO TAX THE UNEXPLAINED FIXED DEPOSITS IN THE HANDS OF THE ACTUAL INVESTORS. THE C.I.T.(APPEALS) HAS NOT DIRECTED TO TAX THE SAID UNEXP LAINED DEPOSITS APPEARING IN THE BOOKS OF THE PATSANSTHA IN THE HANDS O F THE APPELLANT. 7.1 IT IS ALSO A KNOWN FACT THAT THE CREDIT COOPERATI VE SOCIETIES HAVING SUBSTANTIAL TRANSACTIONS AS THAT OF M/S.CHINTAMANI NAGARI SAHAKARI PATSANSTHA MARYADIT ARE GOVERNED BY THE PROV ISIONS OF THE COOPERATIVE SOCIETIES' ACT AND MANAGED BY THE BOARD OF DIRECTORS, ADVISORY COMMITTEE AND VARIOUS EMPLOYEES AND NOT BY TH E CHAIRMAN HIMSELF. IT IS ALSO KNOWN FACT THAT THE CHAIRMAN AND T HE BOARD OF DIRECTORS TAKE POLICY DECISIONS AND THE EMPLOYEES AND M ANAGERS IMPLEMENT THE SAME. FURTHER THE FAILURE, IF ANY, ON THE PART OF THE MANAGER, STAFF AND DIRECTORS LOOKING AFTER THE DAY-TO -DAY AFFAIRS OF THE PATSANSTHA TO MAINTAIN PROPER RECORD ABOUT ALL THE FI XED DEPOSIT HOLDERS GIVING THEIR NAMES, ADDRESSES, IDENTITY ETC. IS PUNISHABLE UNDER THE PROVISIONS OF VARIOUS ENACTMENTS INCLUDING TH E CO- OPERATIVE SOCIETIES ACT. HOWEVER THIS FAILURE TO MAIN TAIN PROPER RECORD SHALL NOT RESULT INTO ADDITION OF THESE BENAMI FIXED DEPOSITS IN THE HANDS OF THE CHAIRMAN OF THE PATSANSTHA WITHOUT B RINGING ON RECORD ANY EVIDENCE PROVING THAT THE INVESTMENT IN T HE SAID FIXED DEPOSITS WAS MADE BY HIM. 7.2 IN THE CASE UNDER APPEAL, IT IS NOTICED THAT THE AMOU NT CREDITED IN THE BOOKS OF THE PATSANSTHA IN THE FORM OF FIXED DE POSITS REMAINED UNEXPLAINED. FURTHER, IT WAS ALSO NOTICED AND HELD BY THE THEN C.I.T.(APPEALS)-I, NASHIK, IN HIS ORDER DATED 29/12/2 006 THAT THE PATSANSTHA HAS NOT EARNED ANY UNDISCLOSED INCOME AND HEN CE THE UNEXPLAINED CREDITS CANNOT BE TAXED IN THE HANDS OF T HE PATSANSTHA 9 AND ARE TO BE TAXED IN THE HANDS OF THE ACTUAL INVEST OR. IT IS A WELL- ESTABLISHED LAW THAT IN SUCH CIRCUMSTANCES, THE ADDITION U/S.69 CANNOT BE MADE IN THE HANDS OF ALLEGED INVESTOR WITHOUT BRIN GING ON RECORD COGENT EVIDENCE. THIS PROPOSITION IS SUPPORTED BY THE D ECISION OF HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. D AYACHAND JAIN VAIDYA REPORTED AT 98 ITR 280. THE BRIEF FACTS OF TH IS CASE ARE THAT INVESTMENT IN SHARES OF NAVJEEVAN & CO. LTD. WAS MADE BY THE WIFE AND SONS OF THE ASSESSEE. THE A.O. FOUND THE EXPLANATION IN RESPECT OF SHARES PURCHASED BY WIFE AND TWO MAJOR SONS AS UNSATISFACTO RY. HOWEVER, AS THE REVENUE HAD NOT BROUGHT ON RECORD MA TERIAL FROM WHICH IT COULD BE CONCLUDED THAT THE INVESTMENT MADE BY THE WIFE AND TWO MAJOR SONS WERE IN FACT MADE BY THE ASSESSEE HIMSELF, IT WAS HELD THAT THE ADDITION CANNOT BE SUSTAINED. 7.3 IT IS ALSO NOTICED THAT DURING THE COURSE OF THE SEARCH & SURVEY ACTION, THE A.O. HAS NOT FOUND ANY DOCUMENTARY EVIDE NCE IN SUPPORT OF HIS ALLEGATION THAT THE SAID UNEXPLAINED FIXED DEPOSI TS BELONGED TO THE APPELLANT. NO SUCH EVIDENCE WAS BROUGHT ON RECORD BY THE A.O. EVEN DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS. THE ALL EGATION OF THE A.O. THAT THE APPELLANT IS THE WHOLE AND SOLE OF THE PATSANSTHA AND THE OTHER DIRECTORS ARE DUMMY DIRECTORS IS NOT SUPPORTED BY ANY EVIDENCE. THE ALLEGATION OF THE A.O. THAT THE APPEL LANT IS CONTROLLING AND MANAGING ALL THE BUSINESSES OF HIS FAMILY MEMBERS FRO M BEHIND THE CURTAIN IS ALSO NOT SUPPORTED BY ANY EVIDENCE. TH E PROBABILITY SUSPECTED BY THE A.O. THAT THE APPELLANT HAS PARKED UN ACCOUNTED INCOME OF THE FAMILY BUSINESSES IN THE SAID ALLEGED FIX ED DEPOSITS WITH THE PATSANSTHA AND THE SAME WERE UTILIZED AS AND WHEN R EQUIRED FOR UNACCOUNTED TRANSACTIONS, IS ALSO NOT SUPPORTED BY ANY E VIDENCE. IT IS A WELL-ESTABLISHED LAW THAT NO ADDITION CAN BE MADE O N THE BASIS OF SURMISES, SUSPICION AND CONJECTURES WITHOUT ANY SUPPORTING EVIDENCE. THIS PROPOSITION IS SUPPORTED BY VARIOUS DECISIONS LIKE DH KESHWARI COTTON MILLS LTD. VS. CIT 26 ITR 775 (SC), OMCAR SALA Y MOHAMED SAIT VS. CIT 37 ITR 151 (SC) AND LALCHAND BHAGAT AMBIKA R AM VS. CIT 37 ITR 288 (SC). 7.4 THE A.O. HAS ALSO NOT BROUGHT ON RECORD ANY EVIDE NCE THAT THE SAID AMOUNT WAS FOUND WITH THE APPELLANT IN THE FORM OF UNEXPLAINED INVESTMENT OR ASSET. THE A.O. WAS SPECIFICAL LY ASKED VIDE THIS OFFICE LETTER DATED 30/09/2008 AS UNDER: '2. IT HAS BEEN MAINLY CONTENDED BY THE APPELLANT TH AT THE ADDITION IN RESPECT OF THE DEPOSITS HAS ALREADY BEEN MADE U/S.158B C OF THE ACT IN THE CASE OF M/S.CHINTAMANI NAGARI PATSANSTHA MARYADIT, DHULE. THE ADDITION WAS DELETED BY THE C.I.T.(APPEALS) AND THE D EPARTMENT HAS FILED APPEAL BEFORE THE HON'BLE I.T.A.T. IT HAS FURT HER BEEN CONTENDED THAT THE C.I.T.(APPEALS) HAD OBSERVED THAT THE DEPOSIT S OUGHT TO BE TAXED IN THE HANDS OF THE PERSONS TO WHOM THE SAID DEPO SITS BELONG. THE APPELLANT HAS CONTENDED THAT THE ENTIRE ADDITION S HAVE AGAIN BEEN MADE IN HIS HANDS U/S.143(3) R.W.S. 147 WITHOUT BRINGIN G ANY EVIDENCE ON RECORD THAT SUCH DEPOSITS BELONGED TO HIM. 2. YOU ARE REQUESTED TO SUBMIT YOUR REPORT KEEPING IN VIEW THE CONTENTIONS RAISED BY THE APPELLANT IN LETTER DATED 26/05/2008 ALONGWITH ANY EVIDENCE IN SUPPORT OF THE ADDITIONS MA DE IN THE HANDS OF THE APPELLANT.......' 10 THE A.O. SUBMITTED HIS REPORT BY LETTER DATED 18/11/2 008. IN THE SAID REPORT ALSO, THE A.O. HAS NOT BROUGHT ON RECORD ANY E VIDENCE IN SUPPORT OF HIS CLAIM THAT THE FIXED DEPOSITS AMOUNTING TO RS.68,80,000/- BELONGED TO THE APPELLANT. THE A.O. H AS REITERATED THE CONTENTIONS STATED IN THE ASSESSMENT ORDER AND ALSO IN THE CASE OF M/S.CHINTAMANI NAGARI SAHAKARI PATSANSTHA MARYADIT. THE A.O. HAS PROCEEDED IN A MANNER AS IF THE FIXED DE POSITS WERE FOUND NOTED IN THE BOOKS OF ACCOUNTS OF THE APPELLANT INDIVIDUAL AND THEY REMAINED UNEXPLAINED, IGNORING THE FACT THAT T HESE DEPOSITS WERE KEPT AND FOUND RECORDED IN THE BOOKS OF M/S.CHINTAMAN I NAGARI SAHAKARI PATSANSTHA MARYADIT. IN VIEW OF THE ABOVE DI SCUSSION, I AM OF THE CONSIDERED OPINION THAT THE A.O. WAS NOT JUSTIFIED IN TREATING THE FIXED DEPOSITS OF RS.68,80,000/- AS THE ALLEGED UNEXPLA INED INVESTMENT OF THE APPELLANT. THE ADDITION OF RS.23,50 ,000/- FOR THE A.Y.2000-2001 AND RS.45,30,000/- FOR THE A.Y.2001,- 2002 [TOTAL RS.68,80,000/- MADE BY THE A.O. IS HEREBY DELETED. 4.1 AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REV ENUE IS IN APPEAL BEFORE US. 5. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS THE CHAIRMAN OF THE PAT SANSTHA. THE SEARCH TOOK P LACE IN CASE OF THE PAT SANSTHA AS WELL AS THE ASSESSEE. ON THE BASIS OF THE BENAMI DEPOSITS FOUND, THE AO MADE ADDITION OF RS.68,80,00 0/- IN THE HANDS OF THE PAT SANSTHA ON SUBSTANTIVE BASIS. AN AMOUNT OF RS.20 LAKHS WAS ALSO ADDED IN THE HANDS OF ANIL AGARWAL ON PROT ECTIVE BASIS. THERE WAS NO OTHER ADDITION IN CASE OF THE PAT SAN STHA. THE LD.CIT(A) DELETED THE ADDITION FROM CHINTAMANI NAGA RAI SAHAKARI PAT SANSTHA AND DIRECTED THE AO TO INITIATE APPROPRIATE PROCEEDINGS IN THE HANDS OF THE CONCERNED PERSONS WHO HAVE MADE THE IN VESTMENTS IN SUCH FICTITIOUS DEPOSITS EITHER DIRECTLY OR THROUGH ANY OTHER ENTITY. IN PURSUANCE OF THE ORDER OF THE LD.CIT(A) THE AO MADE ADDITION OF RS.23,50,000/- DURING A.Y. 2000-01 AND RS.45,30,000 /- DURING A.Y. 2001-02. 11 5.1 THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THA T DURING THE COURSE OF SEARCH NO DOCUMENT WHATSOEVER WAS FOUND T O SHOW THAT THE ASSESSEE HAS MADE THE FIXED DEPOSITS. THEREFORE, U NDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE AO COULD HAVE TAKEN RECOURSE TO THE PROVISIONS OF SECTION 158BD AND NOT THE PROVISIONS OF SECTION 147. REFERRING TO PAGES 71 TO 84 OF THE PAPER BOOK HE SU BMITTED THAT THE AO HAS PASSED THE ORDER U/S.158BC(C) OF THE I.T. AC T ON 29-09-2004 IN CASE OF THE ASSESSEE. REFERRING TO PAGE 84 OF T HE PAPER BOOK HE SUBMITTED THAT THE AO HAS COMPLETED THE ASSESSMENT DETERMINING THE TOTAL UNDISCLOSED INCOME AT RS.3,25,270/-. REFERRI NG TO PAGES 82 OF 90 OF THE PAPER BOOK HE SUBMITTED THAT THE LD.CIT(A) H AS CONFIRMED THE ADDITION MADE BY THE AO IN THE HANDS OF THE ASSESSE E. REFERRING TO PAGE 25 OF THE PAPER BOOK THE LD. COUNSEL FOR THE A SSESSEE SUBMITTED THAT THE AO HAS PASSED THE ORDER U/S.158BC(C) IN CA SE OF CHINTAMANI NAGARI PAT PEDI MARYADIT, DHULE ON 26-10-2004. REF ERRING TO PAGE 69 OF THE PAPER BOOK THE LD. COUNSEL FOR THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO PARA 22.3 OF THE ASSESSMENT ORDER O F THE PAT SANSTHA FOR THE BLOCK PERIOD WHICH READS AS UNDER : 22.3 THE PRESENT PAT -PEDHI IE. CHINTAMANI NAGRI SA HAKARI PAT PEDHI , MARYADIT, DHULE IS FLOATED BYSHRI RADHESHYAM B. AGR AWAL WHO IS ALSO THE CHAIRMAN. IT IS GATHERED THAT OTHER DIRECTORS AR E PRACTICALLY DUMMY. SHRI RADHESHYAM B. AGRAWAL IS PRACTICALLY THE WHOLE SOLE OF THE PAT PEDHI AND CLOSELY CONTROLS ITS AFFAIRS. HE ALSO HAS BUSINESS IN THE NAME OF RADHESHYAM B. AGRAWAL. THERE ARE OTHER BUSINESSES IN THE FAMILY SUCH AS RUNNING OF LODGE, ETC. ALSO SHRI RA DHESHYAM B. AGRAWAL, BEING HEAD OF THE FAMILY PRACTICALLY CONTR OLS ALL SUCH BUSINESSES FROM BEHIND THE CURTAIN. THUS, THERE IS GREAT POSSIBILITY THAT THE FUNDS WHICH ARE NOW TAXED AS UNEXPLAINED CASH CREDITS U/S.68 OF THE I.T. ACT IN THE HANDS OF PAT PEDHI REALLY BEL ONG TO SHRI RADHESHYAM B. AGRAWAL AS HIS UNDISCLOSED INCOME. THE PR EPARATION OF INSTRUMENTS OF FIXED DEPOSITS IN BENAMI NAMES OR NAME S OF NON EXISTENT PERSONS AND ALSO PREPARATION OF LOAN DOCUMENTS AS DISCUSSED IN CASES OF SHRI RAJKUMAR ALIAS RAJENDRA JAIN, SHINDE R AND SHRI 12 MUDANE COULD NOT HAVE BEEN DONE BY THE EMPLOYEES OF THE PAT PEDHI WITHOUT THE EXPRESS INSTRUCTIONS AND KNOWLEDGE OF SHRI RADHESHYAM B. AGRAWAL. ANY EMPLOYER WOULD NOT TOLERATE ANY BR EACHES. THE MOMENT SUCH BREACHES ARE NOTICED THE CONCERNED EMPLOY EE WOULD BE PULLED UP. IF THE CLAIM OF SHRI ANIL AGRAWAL, G.M. OF THE PAT PEDHI TO THE EFFECT THAT HE HAD RAISED LOAN OF RS.18,00,000/- IN H IS PERSONAL CAPACITY TO BE UTILIZED BY HIM FOR STATED PURPOSE OF PURCHASE OF LAND AND HAD WRITTEN IDENTIFICATION NUMBERS OF FIXED DEPO SIT RECEIPTS OF ENTIRELY DIFFERENT PERSONS ON SUCH LOAN DOCUMENTS, IS BE LIEVED TO BE TRUE, SUCH A CLAIM AMOUNTS TO SAID SHRI ANIL AGRAWAL A TTEMPTING TO PLAY FRAUD ON THE PAT PEDHI. ANY EMPLOYER, PARTICU LARLY AN EMPLOYER IN A PRIVATE SECTOR WOULD NOT TOLERATE SUCH BREACHES A ND WOULD SACK SUCH EMPLOYEE. THE FACT THAT NOT ONLY SHRI ANIL AGR AWAL CONTINUES TO BE IN SERVICE OF THE PAT PEDHI BUT HAS BEEN ELEVATED TO THE POST OF GENERAL MANAGER, DESPITE SHRI RADHESHYAM B. AGRAWAL H AVING BECOME AWARE OF THE TRANSACTIONS IN NAMES OF NON EXISTENT PERSO NS CLEARLY SHOWS THAT THE SAID TRANSACTIONS, I.E. PREPARATION OR WR ITING OF FIXED DEPOSITS RECEIPTS IN BENAMI NAMES OR NAMES OF NON EXISTEN T PERSONS OR IN NAMES OF PERSONS WHOSE IDENTITY IS NOT KNOWN, COU LD NOT HAVE BEEN DONE WITHOUT THE KNOWLEDGE OR EXPRESS INSTRUCTION S OF SHRI RADHESHYAM B. AGRAWAL. THUS, THE INCOME NOW BROUGHT TO TAX IN THE HANDS OF PAT PEDHI APPEARS ACTUALLY TO BELONG TO SHRI RADHESHYAM B. AGRAWAL, CHAIRMAN OF THE PAT PEDHI IN HIS INDIVIDUAL CAPACITY. HOWEVER, AS THE SEARCH WAS RESTRICTED TO THE OFFICE PRE MISES OF THE PAT PEDHI AND AS THE UNEXPLAINED CASH CREDITS REPRESENTING DEPOSITS IN BENAMI NAMES OR NAMES OF NON EXISTENT PERSONS ARE FOUND TO BE CREDITED IN THE BOOKS OF THE PAT PEDHI AND OTHER DISA LLOWABLES ARE EMANATING FROM THE BOOKS OF THE PAT PEDHI, THE INCOM E IS TAXED IN THE HANDS OF THE PAT PEDHI ITSELF. IF, HOWEVER, AT A LAT ER DATE DURING COURSE OF ANY PROCEEDINGS UNDER THE I.T. ACT EITHER BY WAY OF APPEAL, REFERENCE OR REVISION OR BY COURT IN ANY PROCEEDINGS UNDER ANY OTHER LAW IF SUCH AUTHORITY IS SATISFIED THAT THE INCOME NOW TAXED IN THE HANDS OF THE PATH PEDHI IS TAXABLE IN THE HANDS OF ANY PERSON OTHER THAN THE PAT PEDHI AND IF SUCH AUTHORITY GIVES A FIND ING TO TAX SAID INCOME IN HANDS OF SUCH OTHER PERSON OTHER THAN THE PA T PEDHI AND IF SUCH AUTHORITY GIVES A FINDING TO TAX SAID INCOME IN H ANDS OF SUCH OTHER PERSON, IT WOULD BE OPEN TO THE THEN ASSESSING OF FICER TO TAX SAID INCOME IN THE HANDS OF SUCH OTHER PERSON AS PER PROVISIO NS OF SECTION 150(1) OF THE I.T. ACT, 1961. THUS, IN SUCH AN EVENT IF SUCH INCOME IS TO BE TAXED IN THE HANDS OF SHRI RADHESHYAM B. AGRAWAL I N HIS INDIVIDUAL CAPACITY, HE WOULD NOT BE ABLE TO WASH HIS HANDS IN TH E MANNER OF PAYMENT OF TAXES ON SUCH INCOME BY RAISING A CLAIM TH AT HIS LIABILITY IS LIMITED TO THE EXTENT OF SHARES HELD BY HIM, AS IT WOU LD AMOUNT TO HOLDING THAT IT WAS HIS MONEY WHICH WAS PARKED BY HIM AND WITHDRAWN BY HIM IN DIFFERENT NAMES AS AND WHEN NEEDE D BY HIM FOR UNRECORDED TRANSACTIONS OF BUSINESSES OF HIS FAMILY AND HENCE WOULD BE TAXABLE IN HIS INDIVIDUAL HANDS AND HENCE WOULD B E LIABLE TO BE RECOVERED FROM HIS PERSONAL ASSETS HE SUBMITTED THAT WHEN THE SAME AO PASSED THE ORDER S IN ALL 3 CASES THE AO COULD HAVE MADE PROTECTIVE ADDITION IN THE C ASE OF RADHYESHYAM AGARWAL LIKE HE HAS DONE IN THE CASE OF ANIL AGARWAL. 13 HE SUBMITTED THAT IN CASE OF THE PAT SANSTHA THE LD .CIT(A) HOLDS THAT IN ABSENCE OF ANY EVIDENCE BROUGHT ON RECORD THAT T HE PAT SANSTHA HAS MADE DEPOSITS IN BOGUS NAMES OUT OF ITS UNACCOUNTED MONEY THE ADDITION CANNOT BE MADE IN THE HANDS OF PAT SANSTHA . HE HAS DIRECTED TO INITIATE APPROPRIATE PROCEEDINGS IN THE CASES OF THE CONCERNED PERSONS WHO HAVE MADE THE INVESTMENT. HOWEVER, HE HAS NOT SPECIFICALLY MENTIONED THE NAME OF THE ASSESSEE. 5.2 THE LD. COUNSEL FOR THE ASSESSEE DREW THE ATTEN TION OF THE BENCH TO EXPLANATION 3 TO PROVISIONS OF SECTION 153 WHICH READS AS UNDER : 153. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EXPLANATION 3.- WHERE, BY AN ORDER 1 REFERRED TO IN CLAUSE (II) OF SUBSECTION (3)],; ANY INCOME IS EXCLUDED FROM THE TOTA L INCOME- OF ONE PERSON AND HELD TO BE THE INCOME OF ANOTHER PERSON, T HEN, AN ASSESSMENT OF SUCH INCOME ON SUCH OTHER PERSON SHALL, FOR T HE PURPOSES OF SECTION 150 AND THIS SECTION, BE DEEMED TO B E ONE MADE IN CONSEQUENCE OF OR TO GIVE EFFECT TO ANY FINDING OR D IRECTION CONTAINED IN THE SAID ORDER, PROVIDED SUCH OTHER PERSON WAS GIVEN AN OPPORTUNITY OF BEING HEARD BEFORE THE SAID ORDER WAS PASSED. 5.3 REFERRING TO THE ABOVE PROVISIONS HE SUBMITTED THAT THE LD.CIT (A) HAS TO GIVE OPPORTUNITY TO THE ASSESSEE WHILE D ECIDING THE CASE OF THE PAT SANSTHA IN CASE THE INCOME HAS TO BE TAXED IN THE HANDS OF MR. RADHE SHYAM B. AGRAWAL. HOWEVER, THE CIT(A) HAS NO T GIVEN ANY SUCH SPECIFIC DIRECTION, THEREFORE, GIVING SUCH GEN ERAL DIRECTIONS U/S.153 DOES NOT COME TO THE RESCUE OF THE DEPARTME NT. 5.4 IN HIS SECOND PLANK OF ARGUMENT, THE LD. COUNSE L FOR THE ASSESSEE SUBMITTED THAT THE AO SHOULD HAVE ISSUED N OTICE U/S.158BD 14 IN THE INSTANT CASE IF HE WANTED TO TAX THE SAME IN THE HANDS OF THE ASSESSEE AND ISSUING NOTICE U/S.147 IS NOT THE PROP ER RECOURSE. REFERRING TO PROVISIONS OF SECTION 158BD HE SUBMITT ED THE SAID PROVISIONS SPEAK ABOUT THE UNDISCLOSED INCOME OF AN Y OTHER PERSON OTHER THAN THE PERSON WITH RESPECT TO WHOM SEARCH W AS MADE U/S.132 OR BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR ANY ASSET S REQUISITIONED U/S.132A. THEREFORE, UNDER THE FACTS AND CIRCUMSTA NCES OF THE CASE, THE ASSESSMENT SHOULD HAVE BEEN COMPLETED EITHER U/ S.158BD OR 158BC BUT DEFINITELY NOT U/S.147. HE SUBMITTED THA T THE AO IS SAME IN CASE OF THE PAT SANSTHA AS WELL AS THE ASSESSEE AND MR.ANIL AGARWAL. THEREFORE, WHEN HE HAS MADE PROTECTIVE AS SESSMENT IN THE CASE OF ANIL AGARWAL HE COULD HAVE VERY WELL MADE P ROTECTIVE ASSESSMENT IN THE CASE OF THE ASSESSEE ALSO. HOWEV ER, SINCE THE AO HAS MISSED THE BUS BY NOT MAKING ANY PROTECTIVE ASS ESSMENT, NOW HE CANNOT TAKE THE RECOURSE TO THE PROVISIONS OF SECTI ON 147. 5.5 REFERRING TO THE DECISION OF THE HONBLE GUJARA T HIGH COURT IN THE CASE OF CARGO CLEARING AGENCY (GUJARAT) VS. JCI T REPORTED IN 307 ITR 1 HE SUBMITTED THAT THE HONBLE HIGH COURT IN THE SAID DECISION HAS HELD THAT ONCE AN ASSESSMENT HAS BEEN FRAMED U/ S.158BA OF THE I.T. ACT IN RELATION TO UNDISCLOSED INCOME FOR THE BLOCK PERIOD AS A RESULT OF SEARCH THERE IS NO QUESTION OF THE AO ISS UING NOTICE U/S.148 OF THE I.T. ACT FOR REOPENING SUCH ASSESSMENT AS TH E SAID CONCEPT IS REPUGNANT TO THE SPECIAL SCHEME OF ASSESSMENT OF UN DISCLOSED INCOME FOR THE BLOCK PERIOD. IT HAS BEEN HELD THAT THE F IRST PROVISO UNDER 15 SECTION 158BC (A) OF THE ACT SPECIFICALLY PROVIDES THAT NO NOTICE U/S.148 OF THE I.T. ACT IS REQUIRED TO BE ISSUED FO R THE PURPOSE OF PROCEEDINGS UNDER CHAPTER XIVB. HE ALSO RELIED ON THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF WES TERN INDIA BAKERS PVT. LTD. VS. DCIT REPORTED IN 87 ITD 607 TO THE PROPOSITION THAT PROVISIONS OF SECTION 147 CANNOT BE APPLIED IN CONTEXT OF BLOCK ASSESSMENT IN TERMS OF CHAPTER XIVB AND CLAIM OF R E-ASSESSMENT. REFERRING TO THE DECISION OF THE AMRISTAR BENCH OF THE TRIBUNAL IN THE CASE OF ITO VS. ARUN KUMAR KAPOOR REPORTED IN 140 T TJ 249 HE SUBMITTED THAT THE TRIBUNAL IN THE SAID DECISION HA S HELD THAT REASSESSMENT U/S.147 ON THE BASIS OF INCRIMINATING MATERIAL AGAINST THE ASSESSEE FOUND IN SEARCH OF THIRD PARTY AND FORWARD ED TO AO OF ASSESSEE BY SEARCH OFFICER WAS ILLEGAL AND VOID AB- INITIO AS IN SUCH A SITUATION ASSESSMENT COULD BE MADE ONLY U/S.153C WH ICH SPECIFICALLY OUSTED THE APPLICATION OF SECTIONS 147/148. HE ALS O RELIED ON THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE C ASE OF MOTI PANJABI (HUF) VS. ACIT AND OTHER CONNECTED APPEALS VIDE ITA NOS. 1474/PN/2011, 1479/PN/2011 ORDER DATED 21-11-2012. 5.6 WHILE ARGUING THE MERIT OF THE CASE, THE LD. CO UNSEL FOR THE ASSESSEE SUBMITTED THAT DURING THE COURSE OF SEARCH NO EVIDENCE WHATSOEVER WAS FOUND BY THE REVENUE THAT THOSE DEPO SITS WERE MADE BY THE ASSESSEE. NO INVESTIGATION WAS CARRIED OUT BY THE AO TO FIND OUT AS TO WHO ARE THE REAL DEPOSITORS OR BENEFICIAR IES. THE AO HAS NOT BROUGHT ANY MATERIAL ON RECORD TO SHOW THAT THE PRO CEEDS OF THE FIXED 16 DEPOSITS HAVE COME BACK TO THE ASSESSEE DIRECTLY OR INDIRECTLY. HE SUBMITTED THAT THE CIT(A) HAS GIVEN A DIRECTION TO TAX THE UNACCOUNTED DEPOSITS IN THE HANDS OF THE CONCERNED PERSONS AND THE REVENUE HAS CHALLENGED SUCH ORDER OF THE CIT(A) BEFORE THE ITAT . THEREFORE, BEFORE FINALITY OF THE ORDER IT WAS NOT POSSIBLE ON THE PART OF THE AO TO ISSUE NOTICE U/S.147. REFERRING TO THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF DHFL VENTURE CAPITAL FUND VS. ITO AND OTHERS REPORTED IN 358 ITR 471 HE SUBMITTED THAT TH E HONBLE HIGH COURT IN THE SAID DECISION HAS HELD THAT RECOURSE T O SECTION 148 OF THE I.T. ACT CANNOT BE FOUNDED IN LAW ON A HYPOTHESIS O F WHAT WOULD BE THE POSITION IN FUTURE SHOULD AN APPEAL BEFORE THE APPELLATE AUTHORITY, BEING THE TRIBUNAL OR THE HIGH COURT, RESULT IN A P ARTICULAR OUTCOME. THE STATUTE DOES NOT CONTEMPLATE THE REOPENING OF A N ASSESSMENT UNDER SECTION 148 ON SUCH A HYPOTHESIS OR A CONTING ENCY WHICH MAY EMERGE IN THE FUTURE. HE ACCORDINGLY SUBMITTED THA T THE ORDER OF THE CIT(A) SHOULD BE UPHELD AND THE GROUNDS RAISED BY T HE REVENUE SHOULD BE DISMISSED. 6. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND STRONGLY SUPPORTED THE ORDER OF THE AO. HE SUBMITT ED THAT SEARCH WAS CARRIED OUT U/S.132 OF THE I.T. ACT IN THE CASE OF THE PAT SANSTHA AS WELL AS THE ASSESSEE MR. RADHE SHYAM B. AGRAWAL. T HEREFORE, NOTICE U/S.158BC(C) HAS TO BE ISSUED TO BOTH THE PARTIES. THE SAME AO ASSESSED THE INCOME OF THE PAT SANSTHA AS WELL AS M R. RADHE SHYAM B. AGRAWAL. THEREFORE, ONCE THIS HAS BEEN DONE, TH ERE IS NO QUESTION 17 OF ISSUING NOTICE U/S.158BD TO THE ASSESSEE. NOTICE U/S.158BD HAS TO BE ISSUED ONLY FOR NON-SEARCHED PERSON. THEREFORE, THE DECISION OF THE AMRITSAR BENCH OF THE TRIBUNAL RELIED ON BY THE LD. COUNSEL FOR THE ASSESSEE IS NOT APPLICABLE TO THE FACTS OF THE PRES ENT CASE. REFERRING TO PAGE 3 PARA 4 OF THE RE-ASSESSMENT ORDER, THE LD. D EPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE AO HAS MADE THE A SSESSMENT ORDER PRIOR TO THE ORDER PASSED IN THE CASE OF THE PAT SA NSTHA HOLDING THAT THE MONEY IS OF THE SAID PAT SANSTHA. AFTER THE ORDER OF THE CIT(A) THE AO HAS ISSUED NOTICE U/S.147 SINCE IT WAS HELD BY T HE CIT(A) THAT THE FIXED DEPOSITS DO NOT BELONG TO THE PAT SANSTHA. T HEREFORE, THERE IS NO QUESTION OF ISSUING NOTICE U/S.158BD TO THE ASSESSE E AS THE LAW DOES NOT PERMIT FOR ISSUE OF SUCH A NOTICE IN CASE OF A SEARCHED PERSON. THE LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY ARGUED T HAT THE MONEY BELONGS TO SOMEBODY AND IT IS NOT OF ANY HOAX AND I T IS NOT OUT OF NOTHING. SINCE THE ASSESSEE WAS THE WHOLE AND SOLE OF THE PAT SANSTHA AND WITHOUT HIS KNOWLEDGE SUCH THING COULD NOT HAVE HAPPENED, THEREFORE, THE AO WAS JUSTIFIED IN TREATING THE SAI D UNACCOUNTED FIXED DEPOSITS AS THE UNDISCLOSED INCOME OF THE ASSESSEE. HE ACCORDINGLY SUBMITTED THAT THE ORDER OF THE AO SHOULD BE UPHELD . 7. THE LD. COUNSEL FOR THE ASSESSEE IN HIS REJOINDE R SUBMITTED THAT THE AO HAS PASSED THE ASSESSMENT ORDER IN THE CASE OF MR. ANIL AGRAWAL ON THE SAME DATE AND HAS MADE PROTECTIVE AD DITION THERE. HOWEVER, DESPITE WRITING SO MANY THINGS AT PARA 22. 3 OF THE ASSESSMENT ORDER IN THE CASE OF THE PAT SANSTHA THE SAME AO HAS NOT 18 MADE ANY ADDITION ON PROTECTIVE BASIS IN THE CASE O F THE ASSESSEE. SINCE THERE WAS NO EVIDENCE WHATSOEVER FOUND DURING THE COURSE OF THE SEARCH TO SHOW THAT THE FIXED DEPOSITS ARE MADE OUT OF THE UNDISCLOSED INCOME OF THE ASSESSEE OR THAT THE MATU RITY PROCEEDS OF SUCH DEPOSITS HAVE COME BACK TO THE ASSESSEE DIRECT LY OR INDIRECTLY, THEREFORE, THERE IS NO QUESTION OF MAKING ANY ADDIT ION IN THE HANDS OF THE ASSESSEE. HE ACCORDINGLY SUBMITTED THAT THE OR DER OF THE CIT(A) BE UPHELD AND THE GROUNDS RAISED BY THE REVENUE BE DISMISSED. 8. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAV E ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. WE FIND IN THE INSTANT CASE ACTION U/S.132 OF THE I.T. ACT WAS CARRIED OUT IN T HE CASE OF M/S. CHINTAMANI NAGARI PAT SANSTHA MARYADIT, DHULE AS WE LL AS THAT OF THE ASSESSEE ON 17-09-2002. DURING THE COURSE OF SAID SEARCH CERTAIN FIXED DEPOSITS AMOUNTING TO RS.68,80,000/- COULD NO T BE EXPLAINED PROPERLY, THEREFORE, THE AO IN THE ASSESSMENT ORDER OF THE PAT SANSTHA PASSED U/S.158BC(C) DATED 26-10-2004 MADE ADDITION OF RS.23,50,000/- FOR A.Y. 2000-01 AND RS.45,30,000/- FOR A.Y. 2001-02 AS UNACCOUNTED INVESTMENT. ON APPEAL FILED BY THE SAID PAT SANSTHA, THE CIT(A) IN HIS ORDER DATED 29-12-2006 DELETED TH E ADDITION FROM THE HANDS OF THE PATSANSTHA AND DIRECTED THE AO TO TAX THE UNEXPLAINED FIXED DEPOSITS IN THE HANDS OF THE ACTUAL INVESTORS . HOWEVER, HE HAS NOT DIRECTED TO TAX THE SAID UNEXPLAINED DEPOSITS A PPEARING IN THE 19 BOOKS OF THE PAT SANSTHA IN THE HANDS OF THE PRESEN T ASSESSEE. WE FIND ON THE BASIS OF SUCH DIRECTION THE AO ISSUED NOTICE U/S.147 TO THE ASSESSEE AND BROUGHT TO TAX AN AMOUNT OF RS.23,50,0 00/- FOR THE IMPUGNED ASSESSMENT ORDER AND AN AMOUNT OF RS.45,30 ,000/- FOR A.Y. 2001-02. WE FIND THE LD.CIT(A) DELETED THE ADDITIO N ON THE GROUND THAT ADDITION US/.69 CANNOT BE MADE IN THE HANDS OF ALLEGED INVESTOR WITHOUT BRINGING ON RECORD COGENT EVIDENCE. HE OBS ERVED THAT DURING THE COURSE OF SEARCH AND SURVEY ACTION THE AO HAS N OT FOUND ANY DOCUMENTARY EVIDENCE IN RESPECT OF THE ALLEGATION T HAT THE UNEXPLAINED FIXED DEPOSITS BELONG TO THE ASSESSEE. NO SUCH EVI DENCE WAS BROUGHT ON RECORD BY THE AO EVEN DURING THE COURSE OF THE A SSESSMENT PROCEEDINGS. ACCORDING TO THE LD.CIT(A) NO ADDITIO N CAN BE MADE ON THE BASIS OF SURMISES, SUSPICION AND CONJECTURES WI THOUT ANY SUPPORTING EVIDENCE. 8.1 IT IS THE CASE OF THE REVENUE THAT SINCE THE AS SESSEE MR. RADHE SHYAM B. AGRAWAL WAS THE CHAIRMAN OF THE PAT SANSTH AND WAS THE WHOLE AND SOLE OF THE PAT SANSTHA, THEREFORE, WITHO UT HIS SUPPORT AND KNOWLEDGE THE DEPOSITS COULD NOT HAVE BEEN MADE. F URTHER, HE WAS INVOLVED IN A NUMBER OF BUSINESS ACTIVITIES. THERE FORE, IT WAS HIS MONEY THAT WAS KEPT AS FIXED DEPOSITS WITH THE PAT SANSTHA IN THE NAMES OF FICTITIOUS PERSONS. IT IS THE CASE OF THE LD. COUNSEL FOR THE ASSESSEE THAT DURING THE COURSE OF SEARCH NO EVIDEN CE WHATSOEVER WAS FOUND TO SHOW THAT THOSE FIXED DEPOSITS WERE MADE B Y THE ASSESSEE. THERE WAS NO INVESTIGATION BY THE AO AS TO WHO ARE THE REAL 20 BENEFICIARIES. FURTHER, IT IS ALSO THE CASE OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE CIT(A) IN THE CASE OF THE PAT SAN STHA HAS ONLY DIRECTED TO TAX THE FIXED DEPOSITS IN THE HANDS OF THE REAL PERSONS AND HE HAS NOT GIVEN ANY SPECIFIC DIRECTION TO TAX THE SAME IN THE HANDS OF THE ASSESSEE. 8.2 WE FIND MERIT IN THE ABOVE CONTENTION OF THE LD . COUNSEL FOR THE ASSESSEE. IT IS AN ADMITTED FACT THAT ACTION U /S.132 OF THE I.T. ACT WAS CARRIED OUT SIMULTANEOUSLY IN THE CASE OF THE P AT SANSTHA AS WELL AS THAT OF THE ASSESSEE. NO EVIDENCE WHATSOEVER WAS FOUND DURING THE COURSE OF SEARCH IN CASE OF THE ASSESSEE THAT HE HA S MADE SUCH FICTITIOUS FIXED DEPOSITS. NO INVESTIGATION WHATSO EVER WAS CARRIED OUT BY THE AO TO FIND OUT AS TO WHO ARE THE REAL BENEFI CIARIES. NOTHING HAS BEEN BROUGHT ON RECORD TO SHOW THAT THE MONEY HAS C OME BACK TO THE ASSESSEE. ALTHOUGH THE LD.CIT(A) HAS DIRECTED THE AO TO TAX THE SAME IN THE HANDS OF THE CONCERNED PERSONS, WE FIND THE LD.CIT(A) HAS NOT GIVEN ANY SPECIFIC DIRECTION TO TAX THE SAM E IN THE HANDS OF THE ASSESSEE MR. RADHE SHYAM B. AGRAWAL. IT IS ALSO AN ADMITTED FACT THAT THE PATSANSTHA AS WELL AS THE REVENUE HAVE CHALLENG ED THE ORDER OF THE CIT(A) BEFORE THE TRIBUNAL AND THE TRIBUNAL VIDE OR DER DATED 31-12- 2012 HAS ALLOWED THE APPEAL OF THE ASSESSEE AND DIS MISSED THE APPEAL OF THE REVENUE. WE THEREFORE FIND MERIT IN THE ARG UMENT OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE AO COULD NOT HAVE ISSUED NOTICE U/S.147 OF THE I.T. ACT BEFORE THE ORDER ATTAINED F INALITY. 21 8.3 THE HONBLE BOMBAY HIGH COURT IN THE CASE OF DH FL VENTURE CAPITAL FUND (SUPRA) HAS HELD THAT RECOURSE TO SECT ION 148 OF THE I.T. ACT, 1961 CANNOT BE FOUNDED IN LAW ON A HYPOTHESIS OR WHAT WOULD BE THE POSITION IN FUTURE SHOULD AN APPEAL BEFORE THE APPELLATE AUTHORITY BEING THE TRIBUNAL OR THE HIGH COURT RESULT IN A PA RTICULAR OUTCOME. THE STATUTE DOES NOT CONTEMPLATE THE REOPENING OF A N ASSESSMENT U/S.148 ON SUCH A HYPOTHESIS OR A CONTINGENCY WHICH MAY EMERGE IN THE FUTURE. THE HONBLE HIGH COURT AT PLACITUM 15 OF THE ORDER HAS OBSERVED AS UNDER : THE JURISDICTIONAL REQUIREMENT FOR REOPENING AN ASSESSM ENT ORDER UNDER SECTION 148 IS THE FORMATION OF A REASON TO BELI EVE BY THE ASSESSING OFFICER THAT INCOME HAS ESCAPED ASSESSMENT. THE FO RMATION OF THE REASON TO BELIEVE AND THE EXISTENCE OF THAT RE ASON MUST BE IN THE PRESENT. RECOURSE CANNOT BE TAKEN TO THE PROVISIONS OF SECTION 148 WHERE THE ASSESSING OFFICER HAS A REASON IN PRESENT, MEANI NG THEREBY, A REASON WHICH IS PRESENT TO HIS MIND WHEN HE FORMS HIS REASON TO BELIEVE, THAT INCOME HAS ESCAPED ASSESSMENT. CANNOT BE F OUNDED IN LAW ON A HYPOTHESIS OF WHAT WOULD BE THE POSITION IN F UTURE SHOULD AN APPEAL BEFORE THE APPELLATE AUTHORITY, BEING THE TR IBUNAL OR THE HIGH COURT, RESULT IN A PARTICULAR OUTCOME. THE STATUTE D OES NOT CONTEMPLATE THE REOPENING OF AN ASSESSMENT UNDER SECTION 148 ON SUCH A HYPOTHESIS OR A CONTINGENCY WHICH MAY EMERGE IN FUTURE. 8.4 WE FURTHER FIND THE SAME AO HAS PASSED THE ORDE R IN THE CASE OF PAT SANSTHA AS WELL AS IN THE CASE OF MR. ANIL AGRA WAL AND MR. RADHE SHYAM B. AGRAWAL. ALTHOUGH PROTECTIVE ADDITION HAS BEEN MADE IN THE HANDS OF MR. ANIL AGRAWAL, HOWEVER, NO ADDITION ON PROTECTIVE BASIS HAS BEEN MADE IN THE CASE OF MR. RADHE SHYAM B. AGRAWAL DESPITE THE OBSERVATION OF THE AO AT PARA 22.3 OF T HE ASSESSMENT ORDER IN THE CASE OF THE PAT SANSTHA WHICH HAS ALREADY BE EN REPRODUCED IN THE PRECEDING PARAGRAPHS (PARA 5.1 OF THE IMPUGNED ORDER). WE THEREFORE FIND MERIT IN THE SUBMISSION OF THE LD. C OUNSEL FOR THE 22 ASSESSEE THAT ONCE AN ASSESSMENT HAS BEEN FRAMED U/ S.158BA OF THE ACT IN RELATION TO UNDISCLOSED INCOME FOR THE BLOCK PERIOD AS A RESULT OF SEARCH, THERE IS NO QUESTION OF THE AO ISSUING N OTICE U/S.148 OF THE I.T. ACT FOR RE-OPENING OF SUCH ASSESSMENT AS THE S AID CONCEPT IS REPUGNANT TO THE SPECIAL SCHEME OF ASSESSMENT OF UN DISCLOSED INCOME FOR THE BLOCK PERIOD. 8.5 WE FIND THE HONBLE GUJARAT HIGH COURT IN THE C ASE OF CARGO CLEARING AGENCY (GUJARAT) (SUPRA) WHILE DECIDING T HE ISSUE OF RE- OPENING IN CASE OF A BLOCK ASSESSMENT HAS OBSERVED AS UNDER : AS ALREADY NOTICED HEREINBEFORE, THE ENTIRE SCHEME U NDER CHAPTER XIV OF THE ACT, MORE PARTICULARLY FROM SECTIONS 147 TO 153 OF THE ACT PERTAINING TO REASSESSMENT, AND THE SPECIAL PROCEDURE F OR ASSESSING THE UNDISCLOSED INCOME OF THE BLOCK PERIOD UNDER CHAP TER XIV-B OF THE ACT ARE NOT ONLY SEPARATE AND DISTINCT FROM EACH OTHE R, BUT IF AN EFFORT IS MADE TO INCORPORATE THE SCHEME UNDER CHAPTER XIV O F THE ACT FOR THE PURPOSE OF ASSESSMENT OF THE BLOCK PERIOD THERE IS A CONFLICT BETWEEN THE PROVISIONS WHICH BECOMES APPARENT ON A PLA IN READING. IN THE CIRCUMSTANCES, AS PER THE ESTABLISHED RULES OF INT ERPRETATION, UNLESS AND UNTIL A PLAIN READING OF THE TWO STREAMS OF ASSESSMENT PROCEDURE DOES NOT RESULT IN THE PROCEDURES BEING INDE PENDENTLY WORKABLE, ONLY THEN THE QUESTION OF RESOLVING THE CON FLICT WOULD ARISE. BUT TO THE CONTRARY, IN THE PRESENT CASE, IN THE LIG HT OF THE PROVISIONS OF SECTION 158BH OF THE ACT, ONCE THERE IS A CONFLICT BE TWEEN THE TWO STREAMS OF PROCEDURE, AS LAID DOWN BY THE APEX COURT, THE PROVISIONS OF CHAPTER XIV-B OF THE ACT SHALL PREVAIL AND HAVE P RIMACY. THUS, VIEWED FROM ANY ANGLE, THE STAND OF THE REVENUE DOES NOT MERIT ACCEPTANCE. ONCE ASSESSMENT HAS BEEN FRAMED UNDER SECTION 158BA OF THE ACT IN RELATION TO UNDISCLOSED INCOME FOR THE BLO CK PERIOD AS A RESULT OF SEARCH THERE IS NO QUESTION OF THE ASSESSING OFFI CER ISSUING NOTICE UNDER SECTION 148 OF THE ACT FOR REOPENING SUC H ASSESSMENT AS THE SAID CONCEPT IS ABHORRENT TO THE SPECIAL SCHEME OF ASSESSMENT OF UNDISCLOSED INCOME FOR BLOCK PERIOD. AT THE COST OF RE PETITION IT IS REQUIRED TO BE STATED AND EMPHASISED THAT THE FIRST PRO VISO UNDER SECTION 158BC(A) OF THE ACT SPECIFICALLY PROVIDES THAT NO NOTICE UNDER SECTION 148 OF THE ACT IS REQUIRED TO BE ISSUED FOR THE PURPOSE OF PROCEEDING UNDER CHAPTER XIV-B OF THE ACT. 23 8.6 VARIOUS OTHER DECISIONS CITED BY THE LD. COUNSE L FOR THE ASSESSEE ALSO SUPPORT THE VIEW THAT NO NOTICE U/S.1 47 CAN BE ISSUED IN CASE OF A BLOCK ASSESSMENT. THEREFORE, BOTH ON MER IT AS WELL AS ON LEGAL ISSUE, THE ASSESSEE HAS TO SUCCEED. IN THIS VIEW OF THE MATTER AND IN VIEW OF THE DETAILED REASONING GIVEN BY THE CIT( A) WHILE DELETING THE ADDITION, WE FIND NO INFIRMITY IN THE SAME. AC CORDINGLY, THE ORDER OF THE CIT(A) ON THIS ISSUE IS UPHELD AND THE GROUN D RAISED BY THE REVENUE IS DISMISSED. 9. GROUNDS OF APPEAL NO.2 TO 4 BY THE REVENUE READ AS UNDER : 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE LD. CIT(A) HAS ERRED IN HOLDING THAT THE ASSESSMENT COMPLETED BY AO U/S. 143(3) R.W.S.147 IS BAD IN LAW. THE FINDING OF THE LD.CIT(A) THAT THE INCOME WHICH WAS ASSESSABLE U/S. 158BC R.W.S. 158BD AS PER PROVISIO NS OF CHAPTER XIV-B CANNOT BE ASSESSED UNDER GENERAL PROVISIONS OF THE ACT UNDER SECTION 143(3) R.W.SEC.147 UNDER CHAPTER XIV IS NOT CORRECT AS THE PROVISIONS AS APPEARING IN THE EXPLANATION (C) TO SUB -SECTION (2) OF SECTION 158BA ARE NOT RELEVANT IN THE CASE OF THE ASSESSEE. 3. WHETHER IN THE CIRCUMSTANCES AND FACTS OF THE CASE T HE CIT(A) WAS RIGHT IN RELYING ON EXPLANATION (C) TO SEC. 158BA(2 ). 4. WHETHER IN THE CIRCUMSTANCES AND FACTS OF THE CASE T HE CIT(A) WAS RIGHT IN HOLDING THAT PROVISIONS OF SEC. 158BD WERE A PPLICABLE AND NOT THAT OF SEC. 147. 9.1 FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSES SEE CHALLENGED THE VALIDITY OF THE REASSESSMENT PROCEEDINGS BEFORE THE CIT(A) STATING THAT INCOME ASSESSED UNDER CHAPTER XIV B CANNOT BE ASSESSED IN REGULAR ASSESSMENT. EXPLANATION (C) TO PROVISIONS OF SECTION 158BA(2) WAS BROUGHT TO THE NOTICE OF THE CIT(A). IT WAS SUBMITTED THAT THE AO SHOULD HAVE ASSESSED THE ALLEGED FICTIT IOUS DEPOSITS U/S.158BD IN THE HANDS OF THE ACTUAL INVESTORS AS D IRECTED BY THE 24 C.I.T.(APPEALS). IN VIEW OF THE ABOVE FACTS, IT WAS ARGUED THAT THE REGULAR ASSESSMENT MADE BY THE A.O. U/S.143(3) R.W. S. 147 IS BAD IN LAW. IT WAS FURTHER ARGUED THAT THE SPECIAL AND SPE CIFIC PROVISIONS OF THE ACT SHALL PREVAIL OVER THE GENERAL PROVISIONS O F THE ACT. IN SUPPORT OF THIS CLAIM, THE ASSESSEE RELIED ON THE RATIO LAI D DOWN BY THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF SNOWCEM VS. CIT, CENTRAL CIRCLE-3, MUMBAI REPORTED IN 12 SOT 33 3 AND THE DECISION OF THE HON'BLE GUJARAT HIGH COURT IN THE C ASE OF CARGO CLEARING AGENCY (GUJARAT) VS. JT.CIT REPORTED IN 21 8 CTR 541. VARIOUS OTHER DECISIONS WERE ALSO BROUGHT TO THE NO TICE OF THE CIT(A) TO THE PROPOSITION THAT ONCE ASSESSMENT HAS BEEN MA DE U/S.158BA IN RELATION TO UNDISCLOSED INCOME OF THE BLOCK PERIOD AS A RESULT OF SEARCH, THE A.O. CANNOT ISSUE NOTICE U/S.148 FOR RE -OPENING OF SUCH ASSESSMENT. THE ASSESSEE FURTHER CLAIMED THAT THE A .O. HAS ASSESSED THE ASSESSEE U/S.158BC VIDE ORDER DATED 29/09/2004 AND THE ALLEGED UNEXPLAINED FIXED DEPOSITS WERE ASSESSED BY THE A.O . IN THE HANDS OF M/S.CHINTAMANI NAGARI SAHAKARI PATSANSTHA MARYADIT AND WERE NOT ADDED IN THE CASE OF THE ASSESSEE. 10. BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE THE LD.CIT(A) HELD THAT INCOME WHICH WAS ASSESSABLE U/S .158BC R.W.S. 158BD AS PER THE SPECIAL PROVISIONS OF CHAPTER XIVB CANNOT BE ASSESSED UNDER THE GENERAL PROVISIONS OF THE ACT U/ S.143(3) R.W.S. 147 OF CHAPTER XIV. HE ACCORDINGLY HELD THAT THE ASSES SMENT ORDER IS BAD IN LAW. THE RELEVANT OBSERVATIONS OF THE CIT(A) RE ADS AS UNDER : 25 8.1 I HAVE CAREFULLY CONSIDERED THE ABOVE CONTENTI ONS OF THE APPELLANT. THE SAME IS SUPPORTED BY THE RATIO LAID DOWN BY THE HON'BLE I.T.A.T., MUMBAI 'I' BENCH, MUMBAI, IN THE CASE OF SNOWCEM VS. C.I.T., CENTRAL CIRCLE-3, MUMBAI - 12 S OT 333 (MUM.) WHEREIN THE ISSUE THAT WHERE THE AMOUNT IS C OVERED BY ANY SPECIFIC PROVISION LIKE SECTION 36(L)(VII) R.W. S. 36(2) OF THE ACT, WHETHER THE AMOUNT CAN BE CONSIDERED AS A LOSS IN GENERAL PROVISION OF SECTION 28, WAS DECIDED. THE HON'BLE I .T.A.T. HAS LAID DOWN THAT WHERE SPECIFIC PROVISION OF THE ACT ARE APPLICABLE, GENERAL PROVISIONS OF THE ACT CANNOT BE APPLIED. IN VIEW OF THE ABOVE DISCUSSION AND RESPECTFULLY FOLLO WING THE ABOVE RATIO LAID DOWN BY THE DECISIONS CITED BY THE APPELLANT, I AM OF THE CONSIDERED VIEW THAT THE INCOME WHICH WAS ASSESSABLE U/S.158BC R.W.S, 158BD AS PER THE SPECIA L PROVISIONS OF CHAPTER XIV-B, CANNOT BE ASSESSED UNDER THE GENE RAL PROVISIONS OF THE ACT U/S.143(3) R.W.S. 147 OF CHAP TER XIV AND HENCE THE ASSESSMENT ORDER IS BAD IN LAW. 10.1 AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE RE VENUE IS IN APPEAL BEFORE US. 11. AFTER HEARING BOTH THE SIDES, WE DO NOT FIND AN Y INFIRMITY IN THE ORDER OF THE CIT(A). THE HONBLE GUJARAT HIGH COUR T IN THE CASE OF CARGO CLEARING AGENCY (GUJARAT) (SUPRA) HAS HELD TH AT ONCE AN ASSESSMENT HAS BEEN FRAMED U/S.158BA OF THE I.T. AC T IN RELATION TO UNDISCLOSED INCOME FOR THE BLOCK PERIOD AS A RESULT OF SEARCH THERE IS NO QUESTION OF THE AO ISSUING NOTICE U/S.148 OF THE I.T. ACT FOR REOPENING SUCH ASSESSMENT AS THE SAID CONCEPT IS RE PUGNANT TO THE SPECIAL SCHEME OF ASSESSMENT OF UNDISCLOSED INCOME FOR THE BLOCK PERIOD. 11.1 THE RELEVANT OBSERVATION OF THE HONBLE HIGH C OURT HAS ALREADY BEEN REPRODUCED AT PARA 8.5 OF THE IMPUGNED ORDER. THE VARIOUS OTHER DECISIONS RELIED ON BY THE LD. COUNSEL FOR THE ASSE SSEE IN SUPPORT OF 26 THE ABOVE PROPOSITION ARE ALSO MENTIONED AT PARA 5. 5 OF THE IMPUGNED ORDER. IN VIEW OF THE DECISION OF HONBLE GUJARAT HIGH COURT CITED (SUPRA) IT HAS TO BE HELD THAT ONCE AN ASSESSMENT H AS BEEN FRAMED U/S.158BA OF THE I.T. ACT IN RELATION TO UNDISCLOSE D INCOME FOR THE BLOCK PERIOD AS A RESULT OF SEARCH THERE IS NO QUES TION OF THE AO ISSUING NOTICE U/S.148 OF THE I.T. ACT FOR REOPENIN G SUCH ASSESSMENT AS THE SAID CONCEPT IS REPUGNANT TO THE SPECIAL SCHEME OF ASSESSMENT OF UNDISCLOSED INCOME FOR THE BLOCK PERIOD. WE THEREFO RE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD.CIT(A) ON THIS ISS UE. THE GROUNDS RAISED BY THE REVENUE ARE ACCORDINGLY DISMISSED. ITA NO.161/PN/2009 (A.Y. 2001-02) : 12. GROUNDS OF APPEAL NO.1 RAISED BY THE REVENUE RE ADS AS UNDER : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE LD. CIT(A)-I, NASHIK HAS ERRED IN DELETING THE ADDITION MADE BY AO OF RS. 45,30,000/-FOR A. Y. 2001-02 BEING UNACCOUNTED INVE STMENTS MADE BY THE ASSESSEE IN THE CHINTAMANI NAGARI SAHAKARI PATSANTHA MARYADIT, DHULE. 12.1 AFTER HEARING BOTH THE SIDES, WE FIND THE ABOV E GROUND RAISED BY THE REVENUE IS IDENTICAL TO THE GROUND OF APPEAL NO .1 IN ITA NO.160/PN/2009. WE HAVE ALREADY DECIDED THE ISSUE AND THE GROUND RAISED BY THE REVENUE HAS BEEN DISMISSED. FOLLOWIN G THE SAME RATIO, THE GROUND RAISED BY THE REVENUE IS DISMISSED. 13. GROUNDS OF APPEAL NO.2 TO 4 BY THE REVENUE READ AS UNDER : 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE ASSESSMENT COMPLETED BY AO U/ S. 143(3) R.W.S.147 IS BAD IN LAW. THE FINDING OF THE LD.CIT(A) THAT THE INCOME WHICH WAS ASSESSABLE U/S. 158BC R.W.S. 158BD AS PER PROVISIO NS OF 27 CHAPTER XIV-B CANNOT BE ASSESSED UNDER GENERAL PROVISION S OF THE ACT UNDER SECTION 143(3) R.W.SEC.147 UNDER CHAPTER XIV IS NOT CORRECT AS THE PROVISIONS AS APPEARING IN THE EXPLANATION (C) TO SUB-SECTION (2) OF SECTION 158BA ARE NOT RELEVANT IN THE CASE OF THE ASSE SSEE. 3. WHETHER IN THE CIRCUMSTANCES AND FACTS OF THE CASE T HE CIT(A) WAS RIGHT IN RELYING ON EXPLANATION (C) TO SEC. 158BA(2 ). 4. WHETHER IN THE CIRCUMSTANCES AND FACTS OF THE CASE T HE CIT(A) WAS RIGHT IN HOLDING THAT PROVISIONS OF SEC. 158BD WERE A PPLICABLE AND NOT THAT OF SEC. 147. 13.1 AFTER HEARING BOTH THE SIDES, WE FIND THE ABOV E GROUNDS RAISED BY THE REVENUE ARE IDENTICAL TO THE GROUNDS OF APPE AL NO.2 TO 4 IN ITA NO.160/PN/2009. WE HAVE ALREADY DECIDED THE ISSUE AND THE GROUNDS RAISED BY THE REVENUE HAVE BEEN DISMISSED. FOLLOWI NG THE SAME RATIO, THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 14. IN THE RESULT, BOTH THE APPEALS FILED BY THE RE VENUE ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 13-03-2015. SD/- SD/- (SUSHMA CHOWLA) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBE R PUNE DATED: 13 TH MARCH, 2015 SATISH COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. THE CIT(A)-I, NASHIK 4. THE CIT-I, NASHIK 5. THE D.R, B PUNE BENCH 6. GUARD FILE BY ORDER // TRUE COPY // ASSISTANT REGISTRAR ITAT, PUNE BENCHES, PUNE 28