Shri Prahladray M. Shah, Nadiad V. The ACIT, Kheda Cicle, Nadiad

ITA 1785/AHD/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 6198 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 1998-1999
• Appeal Filed On: 17-06-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: G C PIPARA; ALFAQ SA IYAD
• Keywords: Unexplained cash credit; Unexplained investment; Principle of natural justice; Peak credit; Deemed to accrue or arise in india; Block assessment; Notional interest
• Section: 69C; 147; 68; 69; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMEDABAD BEFORE, SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NOS. 1785 TO 1796/AHD/2015 (ASSESSMENT YEA RS: 1998-99 TO 2003-04) PRAHLADRAY M. SHAH 23, SHYAMKUNJ SOCIETY, B/H. VAISHALI CINEMA NADIAD, DISTRICT KHEDA APPELLAN T VS. THE ASSTT. COMMISSIONER OF INCOME-TAX, KHEDA CIRCLE, NADIAD RESPONDENT PAN: AGTPS8575P & ITA NOS. 1820 TO 1825, 2072, 2243/AHD/2013 TO 2246/ AHD/2015 & 2020 TO 2024/AHD/2014 (ASSESSMENT YEA RS: 1998-99 TO 2005-06) YASHODADEVI PRAHLADRAY SHAH 23, SHYAMKUNJ SOCIETY, B/H. VAISHALI CINEMA NADIAD, DISTRICT KHEDA APPELLAN T VS. THE ASSTT. COMMISSIONER OF INCOME-TAX, KHEDA CIRCLE, NADIAD RESPONDENT PAN: AGIPS2324K ITA NOS. 1785/AHD/15 & 35 ORS. [PRAHLADRAY M. SHAH & 3 ORS.] - 2 - & ITA NOS. 2025 TO 2027, 1563 & 1564/AHD/2014, 983 & 984/AHD/2016 (ASSESSMENT YEARS: 2000-0 1 TO 2002-03 & 2004-05) DURGESH PRAHLADRAY SHAH 23, SHYAMKUNJ SOCIETY, B/H. VAISHALI CINEMA NADIAD, DISTRICT KHEDA APPELLAN T VS. THE ASSTT. COMMISSIONER OF INCOME-TAX, KHEDA CIRCLE, NADIAD RESPONDENT PAN: ASQPS4586B & ITA NO. 2028/AHD/2014 (ASSESSM ENT YEAR: 2005-06) TEJAL PRAHLADRAY SHAH 4, GURUKRUPA SOCIETY, OPP. MUNICIPAL SCHOOL NO. 32, I. G. MARG, NADIAD, DISTRICT KHEDA 387001 APPELL ANT VS. THE ASSTT. COMMISSIONER OF INCOME-TAX, KHEDA CIRCLE, NADIAD RESPONDENT PAN: BGBPS3381Q /BY ASSESSEE : SHRI G. C. PIPARA & ALFAQ SA IYAD, A.R. /BY REVENUE : SHRI SURENDRA KUMAR, CIT. D.R. SHRI PRASOON KABRA, SR. D. R. /DATE OF HEARING : 28.12.2017 /DATE OF PRONOUNCEMENT : 30.01.2018 ITA NOS. 1785/AHD/15 & 35 ORS. [PRAHLADRAY M. SHAH & 3 ORS.] - 3 - ORDER PER BENCH THIS BATCH OF 36 CASES PERTAINS TO FOUR ASSESSEES N AMELY PRAHLADRAY M. SHAH (SELF), YASHODADEVI PRAHLADRAY SHAH (WIFE), DURGESH PRAHLADRAY SHAH (SON) AND TEJAL PRAHLADRAY SHAH (DAUGHTER); RESPECTIVELY. TH ERE ARE TOTAL 12 CASES RELATING TO THE ABOVE FIRST ASSESSEE. THEY PERTAIN TO ASSESSME NT YEARS. 1998-99 TO 2003-04. SIX OF THEM EACH ARE QUANTUM AND PENALTY APPEALS. ALL THESE APPEALS EMANATE FROM THE CIT(A)-2, VADODARAS SEPARATE ORDERS. THIS ASSESSE E HAS FILED QUANTUM APPEAL ITA NOS. 1785/AHD/2015 IN ASSESSMENT YEAR 1998-99 AGAIN ST THE CIT(A)S ORDER DATED 24.04.2015 IN CASE NO. CAB/(A)-2/324/14-15 INTER AL IA CONFIRMING ASSESSING OFFICERS ACTION MAKING VARIOUS DISALLOWANCES/ADDIT IONS ON MERITS OF RS.2.5LACS OUT OF TOTAL ADDITION OF RS.35,27,200/- IN THE NATURE O F NON-OPERATIVE FINANCE, OPERATIVE FINANCE ADDITION OF RS.4,04,38,563/- AFTER REJECTIN G PEAK THEORY PLEA DIRECTIONS ISSUED FOR RE-COMPUTING ESTIMATED AND HYPOTHETICAL ADDITION OF RS.24,64,985/- ON ACCOUNT OF ALLEGED INTEREST INCOME ACCRUED ON NON-O PERATIVE AND OPERATIVE FINANCE @15% FOR A PERIOD OF SIX MONTHS INSTEAD OF 9% FOLLO WED AND YET ANOTHER ADDITION OF RS.1,75,000/- QUA INVESTMENTS MADE IN FDRS OUT OF I NCOME FROM UNDISCLOSED SOURCES; RESPECTIVELY. ITA NO.1786/AHD/2015 IS HIS CORRESPONDING PENALTY A PPEAL ARISING FROM THE CIT(A)S ORDER DATED 27.04.2015 IN CASE NO. CAB/(A) -2/330/14-15, UPHOLDING ASSESSING OFFICERS ACTION LEVYING SECTION 271(1)(C ) PENALTY OF RS.1,47,29,204/-. 2. SECOND ASSESSMENT YEAR 1999-2000 INVOLVES ASSESS EES QUANTUM APPEAL ITA NO.1787/AHD/2015 DIRECTED AGAINST THE CIT(A)S ORDE R DATED 24.04.2015 IN CASE NO. CAB/(A)-2/331/14-15, UPHOLDING ASSESSING OFFICERS ACTION MAKING NON OPERATIVE FINANCE ADDITION OF RS.5LACS OUT OF RS.29.25LACS, O PERATIVE FINANCE ADDITION OF RS.3,13,44,122/- THEREBY REJECTING HIS PLEA OF PEAK CREDITS FROM ALLEGED UNDISCLOSED BANK ACCOUNTS, CHEQUE RETURN ENTRIES OF RS.23,25,12 0/- DESPITE THE ALLEGED CASH AVAILABLE IN FRESH DEPOSITS DURING THE YEAR AFTER C ONSIDERING ALL THE ENTRIES IS TO THE ITA NOS. 1785/AHD/15 & 35 ORS. [PRAHLADRAY M. SHAH & 3 ORS.] - 4 - TUNE OF RS.3,11,12,132/- WHEREAS PEAK BALANCE THERE OF COMES TO RS.2,32,824/- ONLY AFTER GIVING CREDIT FOR CASH AVAILABLE, ALLEGED EST IMATED AND HYPOTHETICAL ADDITION OF RS.22,00,834/- QUA INTEREST INCOME ON ACCRUAL BASIS AS PERTAINING TO NON-OPERATIVE AND OPERATIVE FINANCE & INVESTMENTS IN IMMOVABLE AS SETS OF RS.9.8LACS; RESPECTIVELY. RELATED PENALTY APPEAL IS ITA NO. 1788/AHD/2015 WH EREIN BOTH THE LOWER AUTHORITIES HAVE INVOKED SECTION 271(1)(C) OF THE A CT FOR PENALIZING THE ASSESSEE TO THE TUNE OF RS.1,12,87,486/- AS UPHELD IN CIT(A)S ORDER DATED 27.04.2015 IN CASE NO. CAB/(A)-2/325/14-15. 3. THIRD ASSESSMENT YEAR 2000-2001 CONTAINS ASSESSE ES QUANTUM APPEAL ITA NO.1789/AHD/2015 ARISING AGAINST THE CIT(A)S ORDER DATED 24.04.2015 IN CASE NO. CAB/(A)-2/326/14-15, UPHOLDING ASSESSING OFFICERS ACTION MAKING ADDITION OF RS.5LACS OUT OF RS.34,05,600 ON ACCOUNT OF NON-OPER ATIVE FINANCE, OPERATIVE FINANCE ADDITION OF RS.1,71,58,026/- AFTER ALLEGEDLY IGNORI NG ASSESSEES PLEA FOR TAXING PEAK CREDIT ONLY, CHEQUE RETURN ENTRIES OF RS.28,91,600/ -, FRESH DEPOSITS ADDITION OF RS.3,78,97,548/- AND ALLEGED NOTIONAL INTEREST INCO ME OF NON-OPERATIVE AND OPERATIVE FINANCE OF RS.10,17,812/-; RESPECTIVELY. CORRESPONDING PENALTY APPEAL ITA NO. 1790/AHD/2015 EMANATES FROM THE CIT(A)S ORDER DATED 27.04.2015 IN CASE NO. CAB/(A) -2/332/14-15, UPHOLDING ASSESSING OFFICERS ACTION LEVYING PENALTY OF RS.72 ,21,958/-. 4. NEXT ASSESSMENT YEAR 2001-2002 COMPRISES ASSESSE ES QUANTUM APPEAL ITA NO.1791/AHD/2015 ARISING AGAINST THE CIT(A)S ORDER DATED 24.04.2015 IN CASE NO. CAB/(A)-2/327/14-15, UPHOLDING ASSESSING OFFICERS ACTION ADDING NON-OPERATIVE FINANCE ADDITION OF RS.5LACS INSTEAD OF THE TOTAL A DDITION AMOUNT OF RS.54,96,700, OPERATIVE FINANCE ADDITION OF RS.97,70,222/- WITHOU T GIVING PEAK CREDIT BENEFIT, CHEQUE RETURN ENTRIES AGGREGATION FIGURE OF RS.50,1 0,700/-, FRESH DEPOSIT AMOUNT OF RS.4,29,23,765/-, NOTIONAL INTEREST INCOME ADDITION OF RS.7,53,932/- AND RS.1,95,000/- ON ACCOUNT OF FDRS INVESTMENTS FROM U NDISCLOSED SOURCES; RESPECTIVELY. ITA NOS. 1785/AHD/15 & 35 ORS. [PRAHLADRAY M. SHAH & 3 ORS.] - 5 - CORRESPONDING PENALTY APPEAL IN THE IMPUGNED ASSES SMENT YEAR ITA NO. 1792/AHD/2015 EMANATING FROM THE CIT(A)S ORDER DAT ED 27.04.2015 IN CASE NO. CAB/(A)-2/347/14-15, AFFIRMING ASSESSING OFFICERS ACTION LEVYING PENALTY OF RS.56,91,764/- IN QUESTION. 5. NEXT ASSESSMENT YEAR 2002-2003 COMPRISES ASSESSE ES QUANTUM APPEAL ITA NO.1793/AHD/2015 EMANATES FROM THE CIT(A)S ORDER D ATED 24.04.2015 IN CASE NO. CAB/(A)-2/328/14-15, UPHOLDING ASSESSING OFFICERS IDENTICAL ACTION ADDING RS.5LACS OUT OF TOTAL ADDITION OF RS.13,97,000 UNDE R THE HEAD NON-OPERATIVE FINANCE, OPERATIVE FINANCE ADDITION OF RS.1,08,76,765/- WITH OUT CONSIDERING PEAK CREDIT BENEFIT, CHEQUE RETURN ENTRIES AMOUNT OF RS.9.09LAC S, FRESH DEPOSITS ADDITION OF RS.4,82,40,765/-, NOTIONAL INTEREST INCOME OF RS.7, 97,550/- AND CASH DEPOSITED IN BANK ACCOUNTS OF RS.15,00,750 OUT OF GROSS AMOUNT O F RS.24,67,294/-; RESPECTIVELY. RELATED PENALTY APPEAL IN THE IMPUGNED ASSESSMENT YEAR IS ITA NO. 1794/AHD/2015 DIRECTED AGAINST THE CIT(A)S ORDER D ATED 27.04.2015 IN CASE NO. CAB/(A)-2/348/14-15, UPHOLDING PENALTY OF RS.48,31, 314/- IN QUESTION. 6. LAST ASSESSMENT YEAR IN INSTANT ASSESSEES CASE IN 2003-04 CONTAINS ASSESSEES QUANTUM APPEAL ITA NO.1795/AHD/2015 EMANATES FROM T HE CIT(A)S ORDER DATED 24.04.2015 IN CASE NO. CAB/(A)-2/329/14-15, UPHOLDI NG ASSESSING OFFICERS ACTION MAKING VARIOUS ADDITIONS OF OPERATIVE FINANCE OF RS .14.10LACS WITHOUT ACCEPTING PEAK THEORY, FOLLOWED BY NOTIONAL INTEREST INCOME A DDITION OF RS.10,25,000/- IN VIEW OF MULTI FOLDED PLEADINGS THEREIN; RESPECTIVELY. ASSESSEES CORRESPONDING PENALTY APPEAL IN THE IMP UGNED ASSESSMENT YEAR IS ITA NO. 1796/AHD/2015 DIRECTED AGAINST THE CIT(A)S ORDER DATED 27.04.2015 IN CASE NO. CAB/(A)-2/333/14-15, UPHOLDING ASSESSING O FFICERS ACTION LEVYING PENALTY OF RS.29,67,940/- IN QUESTION. 7. WE NOW ADVERT TO SECOND ASSESSEE SMT. YASHODADEV I PRAHLADRAY SHAHS CASES. FIRST ASSESSMENT YEAR 1998-99 INVOLVES HER QUANTUM APPEAL ITA ITA NOS. 1785/AHD/15 & 35 ORS. [PRAHLADRAY M. SHAH & 3 ORS.] - 6 - NO.1820/AHD/2013 PREFERRED AGAINST THE CIT(A)-IV, B ARODAS ORDER DATED 28.03.2013 IN CASE NO. CAB/IV-N-108/2009-10, INTER ALIA UPHOLDING ASSESSING OFFICERS ACTION TAKING RECOURSE TO SECTION 148 PRO CEEDINGS FOLLOWED BY ADDITIONS ON MERITS OF RS.11,36,186/- ON ACCOUNT OF PEAK CREDIT OF VARIOUS FDRS IN MULTIPLE ACCOUNTS COMPRISING WITH FDRS IN QUESTION. HER CORRESPONDING PENALTY APPEAL IS ITA NO. 1821/AH D/2013 DIRECTED AGAINST THE CIT(A)-IV, BARODAS ORDER DATED 28.03.2013 IN C ASE NO. CAB/IV-N-95/11-12 CHALLENGING CORRECTNESS OF BOTH THE LOWER AUTHORITI ES ACTION LEVYING PENALTY OF RS.3,15,857/- UNDER CHALLENGE. 8. NEXT ASSESSMENT YEAR 1999-2000 INVOLVES ASSESSEE S QUANTUM APPEAL ITA NO.1822/AHD/2013 PREFERRED AGAINST THE CIT(A)-IV, B ARODAS ORDER DATED 28.03.2013 IN CASE NO. CAB/IV-N-91/2011-12, UPHOLDI NG ASSESSING OFFICERS ACTION IN BOTH INITIATING SECTION 148 PROCEEDINGS AS WELL AS ADDING VARIOUS FIXED DEPOSITS ACCOUNT AMOUNTING TO RS.1,28,092/-. HER PENALTY APPEAL IS ITA NO. 1823/AHD/2013 ARISING AGAINST THE CIT(A)-IV, BARODAS ORDER DATED 28.03.2013 IN CASE NO. CAB/IV- N-96/11-12 WHEREIN BOTH THE LOWER AUTHORITIES HAVE LEVIED THE PENALTY IN QUESTI ON OF RS. 28,327/-. 9. NEXT ASSESSMENT YEAR 2000-2001 CONTAINS ASSESSEE S QUANTUM APPEAL ITA NO.1824/AHD/2013 PREFERRED AGAINST THE CIT(A)-IV, B ARODAS ORDER DATED 28.03.2013 IN CASE NO. CAB/IV-N-92/2011-12, UPHOLDI NG ASSESSING OFFICERS ACTION INITIATING SECTION 148 PROCEEDINGS FOLLOWED BY MULT IPLE FDRS ACCOUNTS ADDITION OF RS.2,93,283/-. HER PENALTY APPEAL IS ITA NO. 1825/AHD/2013 ARISING AGAINST THE CIT(A)-IV, BARODAS ORDER DATED 28.03.2013 IN CASE NO. CAB/IV- N-97/11-12 CONFIRMING ASSESSING OFFICERS ACTION LEVYING PENALTY OF RS.78 ,083/- IN QUESTION. ITA NOS. 1785/AHD/15 & 35 ORS. [PRAHLADRAY M. SHAH & 3 ORS.] - 7 - WE FURTHER FIND THAT HER LATTER PENALTY APPEAL ITA NO. 2071/AHD/2013 FOR THE VERY ASSESSMENT YEAR IS DIRECTED AGAINST THE CIT(A) -IV, BARODAS ORDER DATED 28.03.2013 IN CASE NO. CAB/IV-N-92/2011-12, UPHOLD ING ASSESSING OFFICERS ACTION IMPOSING PENALTY OF RS.40,167/- UNDER CHALLE NGE. 10. NEXT ASSESSMENT YEAR 2001-2002 INDICATES THAT T HE ASSESSEE HAS FILED HER QUANTUM APPEAL ITA NO.2243/AHD/2015 PREFERRED AGAIN ST THE CIT(A)-2, VADODARAS ORDER DATED 07.05.2015 IN CASE NO. CAB/(A)-2/286/20 14-15, UPHOLDING ASSESSING OFFICERS ACTION INITIATING SECTION 148 PROCEEDINGS AS WELL AS MAKING ADDITION OF RS.3,67,853/- ON ACCOUNT OF MULTIPLE FIXED DEPOSITS IN QUESTION; RESPECTIVELY. HER PENALTY APPEAL THEREIN IS ITA NO. 2244/AHD/2015 ARISING AGAINST THE CIT(A)-2, VADODARAS ORDER DATED 08.05.2015 IN CASE NO. CAB/(A)-2/284/2014-15, CONFIRMING ASSESSING OFFICERS ACTION LEVYING PENAL TY OF RS.1,25,600/- UNDER CHALLENGE. 11. NEXT ASSESSMENT YEAR 2002-2003 INVOLVES ASSESSE ES QUANTUM APPEAL ITA NO.2245/AHD/2015 PREFERRED AGAINST THE CIT(A)-2, VA DODARAS ORDER DATED 07.05.2015 IN CASE NO. CAB/(A)-2/287/2014-15, CONFI RMING ASSESSING OFFICERS ACTION INTER ALIA TAKING RECOURSE TO SECTION 148 PR OCEEDINGS AS WELL AS ADDING AN AMOUNT OF RS.9,14,969/- PERTAINING TO MULTIPLE FIXE D DEPOSITS; RESPECTIVELY. HER PENALTY APPEAL IS ITA NO. 2246/AHD/2015 ARISING AGAINST THE CIT(A)-2, VADODARAS ORDER DATED 08.05.2015 IN CASE NO. CAB/( A)-2/285/2014-15, WHEREIN CIT(A) HAS UPHELD THE ASSESSING OFFICERS ORDER LEV YING PENALTY OF RS.2,75,997/- UNDER CHALLENGE. 12. NEXT ASSESSMENT YEAR 2003-2004 INVOLVES ASSESSE ES QUANTUM APPEAL ITA NO.2021/AHD/2014 ARISING AGAINST THE CIT(A)-IV, BAR ODAS ORDER DATED 11.03.2014 IN CASE NO. CAB/IV-N-50/2007-08, UPHOLDING ASSESSIN G OFFICERS ACTION IN BOTH INITIATING SECTION 148 PROCEEDINGS AS WELL AS ADDIT ION OF RS.4,93,740/- ON ACCOUNT OF CREDITS APPEARING IN BANK DEPOSITS, ACCRUED INTERES T ON FDRS OF RS.2,77,500/- ITA NOS. 1785/AHD/15 & 35 ORS. [PRAHLADRAY M. SHAH & 3 ORS.] - 8 - FOLLOWED BY LOWER APPELLATE DIRECTIONS TO THE ASSES SING OFFICER TO VERIFY VARIOUS ASPECTS PERTAINING TO INTEREST INCOME IN MULTIPLE F DRSS TAXATION; RESPECTIVELY. HER PENALTY APPEAL IS ITA NO. 2020/AHD/2014 ARISING AGAINST THE CIT(A)-IV, BARODAS ORDER DATED 11.03.2014 IN CASE NO. CAB/IV- N-82/2007-08, UPHOLDING ASSESSING OFFICERS ACTION LEVYING PENALTY OF RS.1, 28,230/- UNDER CHALLENGE. 13. NEXT ASSESSMENT YEAR 2004-2005 INVOLVES ASSESSE ES QUANTUM APPEAL ITA NO.2022/AHD/2014 ARISING AGAINST THE CIT(A)-IV, BAR ODAS ORDER DATED 11.03.2014 IN CASE NO. CAB/IV-N-49/2007-08, UPHOLDING ASSESSIN G OFFICERS ACTION IN BOTH INITIATING SECTION 148 PROCEEDINGS FOLLOWED BY ADDI TION OF RS.5,24,238/- BEING MADE PERTAINING TO CREDITS APPEARING IN BANK ACCOUNT(S); RESPECTIVELY. HER PENALTY APPEAL IS ITA NO. 2023/AHD/2014 EMANATI NG FROM THE CIT(A)- IV, BARODAS ORDER DATED 11.03.2014 IN CASE NO. CAB /IV-N-81/2007-08, AFFIRMING ASSESSING OFFICERS ORDER LEVYING PENALTY OF RS.1,3 4,270/- UNDER CHALLENGE. 14. NEXT ASSESSMENT YEAR 2005-2006 INVOLVES ASSESSE ES QUANTUM APPEAL ITA NO.2024/AHD/2014 ARISING AGAINST THE CIT(A)-IV, BAR ODAS ORDER DATED 11.03.2014 IN CASE NO. CAB/IV-N-159/2007-08, UPHOLDING ASSESSI NG OFFICERS ACTION IN BOTH INITIATING SECTION 148 PROCEEDINGS FOLLOWED BY ADDI TIONS OF RS.5LACS AND RS.5,24,238/- BEING MADE PERTAINING TO FDRS GIVEN T O KAJAL DEVELOPERS IN LIEU OF PURCHASE CONSIDERATION FOR FLAT NO.A/7 JAINAM TOWER S; RESPECTIVELY. 15. WE NOW ADVERT TO THIRD ASSESSEE DURGESH PRAHLAD RAY SHAHS CASES NOW. HE HAS FILED HIS QUANTUM APPEAL ITA NO.2025/AHD/2014 F OR ASSESSMENT YEAR 2000- 2001 ARISING AGAINST THE CIT(A)-IV, BARODAS ORDER DATED 11.03.2014 IN CASE NO. CAB/IV-N-101/2011-12, AFFIRMING ASSESSING OFFICERS ACTION IN BOTH INITIATING REOPENING PROCEEDINGS U/S. 148 OF THE ACT AS WELL A S MAKING ADDITION OF RS.51,107/- TO THE EXTENT OF RS.40,656/- BEING INTEREST ON FDRS ; RESPECTIVELY. ITA NOS. 1785/AHD/15 & 35 ORS. [PRAHLADRAY M. SHAH & 3 ORS.] - 9 - HIS PENALTY APPEAL IS ITA NO. 2026/AHD/2014 ARISING AGAINST THE CIT(A)-IV, BARODAS ORDER DATED 11.03.2014 IN CASE NO. CAB/IV- N-106/2011-12, AFFIRMING ASSESSING OFFICERS ORDER LEVYING PENALTY OF RS.8,6 15/- UNDER CHALLENGE. 16. NEXT ASSESSMENT YEAR 2001-02 COMPRISES ASSESSEE S QUANTUM APPEAL ITA NO. 1563/AHD/2014 ARISING AGAINST THE CIT(A)-IV, BARODA S ORDER DATED 27.02.2014 IN CASE NO. CAB/IV-N-102/2011-12, CONFIRMING ASSESSING OFFICERS FINDINGS IN BOTH INITIATING REOPENING PROCEEDINGS U/S. 148 OF THE AC T AS WELL AS ADDING AN AMOUNT OF RS.2,74,750/- PERTAINING TO PEAK AMOUNT IN VARIOUS BANK ACCOUNTS; RESPECTIVELY. HIS PENALTY APPEAL IS ITA NO. 1564/AHD/2014 DIRECTE D AGAINST THE CIT(A)- IV, BARODAS ORDER DATED 26.02.2014 IN CASE NO. CAB /IV-N-107/2011-12, AFFIRMING ASSESSING OFFICERS ACTION LEVYING PENALTY OF RS.86 ,795/- UNDER CHALLENGE. 17. ASSESSMENT YEAR 2002-03 COMPRISES ASSESSEES QU ANTUM APPEAL ITA NO.983/AHD/2016 BEING DIRECTED AGAINST THE CIT(A)-2 , VADODARAS ORDER DATED 18.01.2016 IN CASE NO. CAB/(A)-2/288/14-15, IN BOTH INITIATING RE-ASSESSMENT PROCEEDINGS FOLLOWED BY PEAK AMOUNT ADDITION OF RS. 18,27,921/- BEING UPHELD TO THE TUNE OF RS.13,50,420/-; RESPECTIVELY. HIS PENALTY APPEAL IS ITA NO. 984/AHD/2016 ARISING AGAINST THE CIT(A)-2, VADODARAS ORDER DATED 19.01.2016 IN CASE NO. CAB/( A)-2/289/14-15, UPHOLDING PENALTY OF RS.5,42,003/- UNDER CHALLENGE. 18. LAST ASSESSMENT YEAR 2004-05 IN THIS THIRD ASSE SSEES CASE IS ITA NO.2027/AHD/2014 DIRECTED AGAINST THE CIT(A)-IV, BA RODAS ORDER DATED 11.03.2014 IN CASE NO. CAB/IV-N-61/2007-08 AFFIRMIN G ASSESSMENT FINDINGS IN BOTH INITIATING SECTION 148 PROCEEDINGS AS WELL AS CREDI TS ENTRIES IN MULTIPLE BANK ACCOUNTS OF RS.10,52,329/- BEING ADDED AS UNEXPLAIN ED AND SECTION 68 ADDITION OF UNEXPLAINED CASH CREDIT TO THE TUNE OF RS.2.54LACS; RESPECTIVELY. ITA NOS. 1785/AHD/15 & 35 ORS. [PRAHLADRAY M. SHAH & 3 ORS.] - 10 - 19. LAST ASSESSEE MS. TEJAL PRAHLADRAY SHAH HAS PRE FERRED ITA NO. 2028/AHD/2014 IN ASSESSMENT YEAR 2005-06 AGAINST TH E CIT(A)-IV, BARODAS ORDER DATED 11.03.2014 IN CASE NO. CAB/IV-N-162/2007-08 I NTER ALIA UPHOLDING ASSESSING OFFICERS ACTION ADDING UNEXPLAINED INVESTMENTS OF RS.5LACS TO THE EXTENT OF RS.2.5LACS IN QUESTION. WE MAKE IT CLEAR THAT ALL QUANTUM PROCEEDINGS HEREI NABOVE ARE U/S.144 R.W.S. 147 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT WHEREAS CORRESPONDING PENALTY CASES INVOLVE PROCEEDINGS U/S. 271(1)(C) OF THE ACT . HEARD BOTH THE PARTIES. CASE FILES PERUSED. 20. LEARNED COUNSEL REPRESENTING ASSESSEE SHRI G. C . PIPARA INVITES OUR ATTENTION TOWARDS ASSESSEES PLEADINGS SUMMARIZED HEREINABOVE TO THE EFFECT THAT THE AUTHORITIES BELOW HAVE NOT AFFORDED THEM ADEQUATE O PPORTUNITY OF HEARING IN ORIGINAL AS WELL AS REMAND PROCEEDINGS. HE THEN STATES THAT SOME OF THE ABOVE QUANTUM CASES INVOLVE AN IDENTICAL ISSUE OF CORRECTNESS OF SECTIO N 148 PROCEEDINGS (SUPRA). LEARNED COUNSEL VERY FAIRLY INFORMS US THAT THESE ASSESSEES NO MORE WISH TO PRESS FOR THEIR INSTANT TECHNICAL AND LEGAL SUBSTANTIVE GROUNDS. L EARNED DEPARTMENTAL REPRESENTATIVE DOES NOT OFFER ANY OBJECTION. WE TH EREFORE REJECT ASSESSEES CORRESPONDING ABOVESAID TECHNICAL AND LEGAL SUBSTAN TIVE GROUNDS RAISING ISSUES OF VIOLATION OF PRINCIPLES OF NATURAL JUSTICE AS WELL AS VALIDITY OF REOPENING TO BE NOT PRESSED IN THEIR RESPECTIVE APPEALS. 21. WE ADVERT TO ALL REMAINING ISSUES ON MERITS NOW . LEARNED COUNSEL SUBMITS THAT THIS IS NOT THE DEPARTMENTS CASE THAT THE LAT TER THREE ASSESSEES DO HAVE ANY INDEPENDENT SOURCE(S) OF INCOME. THEIR SOLE SUBSTA NTIVE PLEA THROUGHOUT IS THAT IT IS THE FIRST ASSESSEE WHO HAS EARNED ALL THE INCOME AS SESSED IN ALL THESE DIFFERENT ASSESSEES HANDS SINCE THE SAME HAD BEEN DEPOSITED/ INVESTED IN THEIR NAMES IN THE NATURE OF BANK FDRS AND OTHER ASSETS IN QUESTION. WE REFER TO SMT. YASHODADEVIS QUANTUM CASES IN SUPPORT OF OUR OBSERVATION THAT SH E HAD BEEN HAVING A JOINT ACCOUNT WITH THE FIRST ASSESSEE REGARDING MOST OF THE INVES TMENTS IN FDRS ETC. THE QUESTION ITA NOS. 1785/AHD/15 & 35 ORS. [PRAHLADRAY M. SHAH & 3 ORS.] - 11 - AS TO WHETHER SUCH AN ADDITION IS SUSTAINABLE OR NO T IN VIEW OF THE FACT THAT THERE IS NO INDEPENDENT SOURCE OF INCOME; ALREADY STANDS ANS WERED IN A CO-ORDINATE BENCHS DECISION IN IT(SS)A NO.33 & 231/AHD/2005 DECIDED ON 18.09.2009 MRUNALINI GANDHI VS. ACIT AGAINST THE REVENUE AS UNDER: 5. THE ASSESSEE IS IN FURTHER APPEAL, WE HAVE CONSI DERED THE FACTS AND THE RIVAL CONTENTIONS. THE ASSESSEE'S STATEMENT RECORDED ON T HE DATE OF SEARCH IS AT PAGE 22 OF THE PAPER BOOK. WE DO NOT FIND ANY QUESTION H AVING BEEN ASKED ABOUT THE DEPOSITS. WHAT SHE HAS STATED WHICH IS OF SOME RELE VANT IS THAT HER INCOME CONSISTS OF MONIES GIVEN BY HER HUSBAND AND THAT SH E IS A TRUSTEE OF AN EDUCATIONAL INSTITUTION IN JUNAGADH FROM WHICH SHE IS NOT IN RECEIPT ANY INCOME. AT PAGE 33 - 34 OF THE PAPER BOOK IS A COPY OF THE STATEMENT OF THE ASSESSEE'S HUSBAND MADE DURING THE SEARCH. IN ANSWER TO QUESTI ON NO.2 HE HAS STATED THAT HE WAS FILING INCOME TAX RETURN AT JUNAGADH BUT AT PRESENT HE WAS NOT FILING ANY RETURNS SINCE HE HAD NO INCOME. HIS FAMILY CONSISTE D OF HIMSELF AND WIFE. IN ANSWER TO QUESTION NO.6 HE HAS STATED THAT HE AND H IS WIFE HAD JOINTLY INVESTED RS.6,00,000/- TO RS.7,00,000/- IN POST-OFFICE MIS T WO YEARS BACK WHICH REPRESENTED HIS SAVINGS FROM THE PROFESSIONAL INCOM E AS MEDICAL PRACTITIONER AT JUNAGADH. HE ALSO STATED THAT AFTER COMING TO BAROD A HE LOST HIS PRACTICE GRADUALLY. HE ALSO STATED THAT HE HAD FOR SOME TIME KEPT THE CASH IN HIS HOUSE BEFORE DEPOSITING IT IN THE POST OFFICE OR BANKS. A GAIN IN ANSWER TO QUESTION NO.22 HE HAS STATED THAT THE MIS DEPOSIT FOR RS.6,0 0,000/- REPRESENTS HIS SAVINGS. THE I EARNED REPRESENTATIVE FOR THE ASSESSEE HAS AL SO FILED BEFORE US AN ENGLISH TRANSLATION OF THE ASSESSEE'S ACCOUNT IN M/S.SHREE SHROFF AND IN A TABULAR STATEMENT EXPLAINING THE CASH FLOW FOR INVESTMENT M ADE AND SOURCE THEREOF, HAS SOUGHT TO MATCH THE WITHDRAWALS FROM THE FIRM AND T HE DEPOSITS. IT SEEMS TO US ON A CONSIDERATION OF THE FACTS AND THE SUBMISSIONS OF BOTH THE SIDES THAT WHAT THE ASSESSEE WANTS IS THAT WE SHOULD ACCEPT EITHER OF T HE TWO FACT - SITUATIONS AND THAT BOTH THE SITUATIONS POINT TO THE ONLY CONCLUSI ON VIZ. THAT THE DEPOSITS AND INVESTMENTS ARE EXPLAINED. THE FIRST SCENARIO IS TH AT THE ASSESSEE'S HUSBAND HAS STATED IN THE COURSE OF THE SEARCH THAT THE INVESTM ENTS CAME FROM HIS SAVING OUT OF THE PROFESSIONAL INCOME. IF THIS IS ACCEPTED AS CORRECT, THEN NO ADDITION CAN BE MADE IN THE ASSESSMENT OF THE ASSESSEE UNDER SECTIO N 69B. THE SECOND SCENARIO IS THAT THE ASSESSEE HAS LED EVIDENCE TO SHOW THAT THE INVESTMENTS IN POST OFFICE AND BANK DEPOSITS CAME FROM THE DRAWINGS MADE BY HE R AS PARTNER IN THE FIRM AT JUNGADH. IT IS THE SUBMISSION OF THE ASSESSEE THAT IN EITHER SCENARIO THERE IS NO SCOPE FOR MAKING ANY ADDITION UNDER SECTION 69B IN HER BLOCK ASSESSMENT. HAVING GIVEN THE MATTER OUR SERIOUS CONSIDERATION, WE ARE OF THE VIEW THAT THE ADDITION IS NOT JUSTIFIED. EVEN IF THE ASSESSEE'S C LAIM THAT THE INVESTMENTS WERE MADE BY UTILISING HER DRAWINGS FROM THE FIRM IS REJ ECTED ON THE GROUND THAT THE FIRM'S BOOKS OF ACCOUNT WERE NOT PRODUCED, THAT LEA VES US WITH THE STATEMENT OF THE ASSESSEE'S HUSBAND THAT THE INVESTMENT CAME OUT OF HIS SAVINGS FROM THE PROFESSIONAL INCOME AS MEDICAL PRACTITIONER IN JUNA GADH. THE ASSESSEE I S A HOUSEWIFE. THE DEPOSITS STAND IN THE JOINT NAMES OF THE ASSESSEE AND HER HUSBAND. SHE HAS STATED THAT HER INCOME IS WHATEVER MONEY HER HUSBAND GIVES HER. THE PROBABILITY OF THE ASSESSEE, BEING A HOUSE WIFE, EARNING SUBSTANTIAL ITA NOS. 1785/AHD/15 & 35 ORS. [PRAHLADRAY M. SHAH & 3 ORS.] - 12 - INCOME OF RS.6,00,000/- TO RS.7,00,000/-IS VERY LOW . IN CIT VS. SMT. P.K. NOORJAHAN, (1999) 237 ITR 570, IT HAS BEEN HELD WIT H REFERENCE TO SECTION 69 OF THE ACT THAT THE QUESTION WHETHER THE SOURCE OF THE INVESTMENT SHOULD BE TREATED AS INCOME OR NOT HAS TO BE CONSIDERED IN THE LIGHT OF THE FACTS OF THE EACH CASE AND THE DISCRETION CONFERRED ON THE AO BY THE USE O F THE WORD' MAY' IN THE SAID SECTION HAS TO BE EXERCISED KEEPING IN VIEW THE FAC TS AND CIRCUMSTANCES OF THE EACH CASE. IN OUR HUMBLE VIEW THE RATIO OF THE JUDG MENT APPLIES TO SECTION 69B WHICH ALSO USES THE WORD ' MAY'. FURTHER, SECTIONS 69, 69A, 69B AND 69C ARE ALL OF THE SAME GENRE AND DEAL WITH DEEMED INCOME. THER EFORE, THERE IS GOOD REASON TO THINK THAT THE PRINCIPLES GOVERNING THEM SHOULD BE UNIFORM. RESPECTFULLY APPLYING THE RATIO OF THE JUDGMENT TO THE FACTS OF THE CASE WE ARE OF THE VIEW THAT IT MAY NOT BE PROPER EXERCISE OF DISCRETION TO HOLD THAT THE ASSESSEE EARNED UNDISCLOSED INCOME TO THE EXTENT OF RS.6,65,000/- A ND INVESTED THE SAME IN POST OFFICE MIS AND FIXED DEPOSITS IN BANK. THE ADDITION IS ACCORDINGLY DELETED. 22. CASE RECORDS BEFORE US SUFFICIENTLY INDICATE TH AT THE ENTIRE INCOME IN ALL FOUR ASSESSEES HANDS HAS BEEN DERIVED BY SHRI PRAHLADRA Y SHAH/FIRST ASSESSEE FROM VISHNU VASAN BHANDAR AND FROM CARRYING FINANCE AC TIVITY IN ALL THESE ASSESSMENT YEARS. LOWER AUTHORITIES HAVE ALSO ADDED THE VERY SUM IN MORE THAN ONE ASSESSEES HANDS. TAKE FOR INSTANCE ASSESSMENT YEAR 2000-01. THERE IS AN ADDITION OF RS.3,03,283/- PERTAINING TO BANK FDRS IN BOTH HUSBA NDS AND WIFES HANDS. SAME ANALOGY APPEARS TO HAVE BEEN ADOPTED IN ASSESSMENT YEAR 2002-03 INVOLVING AN IDENTICAL ADDITION OF RS.24,67,294/- PERTAINING TO INVESTMENTS IN BANK FDRS AND BONDS BEING MADE IN BOTH ASSESSEES CASES. THIS FA CTUAL POSITION IS NO DIFFERENT IN OTHER ASSESSMENT YEAR AS WELL. THIRD ASSESSEE (SON ) DURGESH PRAHLADRAY SHAH PLEADS IN ASSESSMENT YEAR 2000-01 THAT BOTH THE LOWER AUTH ORITIES HAVE ALREADY ASSESSED INTEREST AMOUNT OF RS.25,665/- IN HIS MOTHERS CASE . MR. PIPARA ALSO EXPRESSES FIRST ASSESSEES CONCESSION TO BE ASSESSED QUA THE ENTIRE INCOME THAT HAS BEEN ASSESSED IN LATTER THREE ASSESSEES CASES. LEARNED DEPARTMENTA L REPRESENTATIVE FAILS TO CONTROVERT ALL THESE FACTS WITH THE HELP OF CASE RE CORDS. WE THEREFORE DEEM IT APPROPRIATE TO OBSERVE THAT ALL THE UNACCOUNTED INC OME OF THESE FOUR FAMILY MEMBERS HAS IN FACT BEEN EARNED BY THE FIRST ASSESSEE ONLY. WE ACCORDINGLY ARE OF THE OPINION THAT SUCH AN ASSESSMENT IN REMAINING ASSESSEES HAN DS IS PREJUDICIAL TO THE REVENUE ONLY AS EACH ASSESSEE IS SEPARATELY ENTITLED FOR AL L STANDARD DEDUCTIONS ASSESSMENT YEAR-WISE; AVAILABLE IN THE ACT. WE THEREFORE DIRE CT THE ASSESSING OFFICER TO FINALIZE CONSEQUENTIAL ASSESSMENTS IN FIRST ASSESSEE SHRI PR AHLADRAY M. SHAHS CASE ONLY BY ITA NOS. 1785/AHD/15 & 35 ORS. [PRAHLADRAY M. SHAH & 3 ORS.] - 13 - ADDING ALL THE IMPUGNED SUMS AS PER LAW. ORDERED ACCORDINGLY. THE LATTER THREE ASSESSEES QUANTUM AND PENALTY CASES ITA NOS. 1820 TO 1825, 2072, 2243/AHD/2013 TO 2246/AHD/2015 & 2020 TO 2024/AHD/2014 IN CASE OF YASHODADEVI PRAHLADRAY SHAH, ITA NOS. 2025 TO 2027, 1563 & 1564/AHD/2014, 983 & 984/AHD/2016 IN CASE OF DURGESH PRAHLADRAY SHAH AND ITA NO. 2028/ AHD/2014 IN CASE OF TEJAL PRAHLADRAY SHAH ARE THEREFORE ACCEPTED FOR STATISTI CAL PURPOSES. 23. WE NOW PROCEED TO DEAL WITH FIRST ASSESSEE SHRI PRAHLADRAY M. SHAHS CASES FROM ASSESSMENT YEARS 1998-99 TO 2003-04. CASE REC ORDS REVEAL THAT THIS IS THIRD ROUND OF LITIGATION BETWEEN THE PARTIES BEFORE THE TRIBUNAL SINCE FOLLOWED BY TWO EARLIER REMAND ORDERS ON VARIOUS TECHNICAL ISSUES. WE TREAT FIRST ASSESSMENT YEAR ASSESSMENT YEAR 1998-99 INVOLVING ITA NO.1785/AHD/2 015 AS THE LEAD CASE. THE ASSESSEE PLEADS FOUR SUBSTANTIVE GROUNDS HEREIN IN CHALLENGING THE CIT(A)S ORDER PARTLY AFFIRMING ASSESSING OFFICERS ACTION MAKING NON-OPERATIVE FINANCE ADDITION OF RS.2.5LACS OUT OF RS.35,27,200/-, OPERATIVE FINANCE AMOUNT ADDITION OF RS.4,04,38,563/-, CHEQUE RETURN ENTRIES ADDITION OF RS.31,22,200/-, NOTIONAL INTEREST INCOME ADDITION OF RS.24,65,985/- AND INVESTMENT IN FDRS OF RS.1,75,000/-; RESPECTIVELY. THERE IS NO DISPUTE THAT THE REMAINI NG QUANTUM APPEALS IN SUCCEEDING ASSESSMENT YEARS ALSO RAISE THE SAME VERY SUBSTANTI VE GROUNDS. WE NOTICE IN THIS BACKDROP THAT THE LEADING TWO ISSUES AS ARISING FRO M THESE QUANTUM CASES ARE NON OPERATIVE AND OPERATIVE FINANCE ADDITION. THE CIT( A) APPEARS TO HAVE FOLLOWED ESTIMATION METHOD QUA THE FORMER ADDITION WHEREAS H E HAS MADE THE LATTER ADDITION ON ACCOUNT OF THE CORRESPONDING FIGURES NOTICED IN ASSESSEES FOUR UNACCOUNTED BANK ACCOUNTS WHOSE STATEMENTS FORM PART OF RECORDS BEFO RE US FROM PAGES 100 TO 154. 23(A). IT FURTHER COMES TO OUR NOTICE THAT THE ASS ESSING OFFICER HAD ADDED NON-OPERATIVE FINANCE AMOUNT OF RS.35,27,200/-, RS. 29,25,000/-, RS.34,05,600/-, RS.54,96,700/-, RS.13,97,000/- & RS.55,19,000/- IN ASSESSMENT YEARS 1998-99 TO 2003-04 WHEREAS THE CIT(A) HAS CONFIRMED THE SAME T O THE TUNE OF RS.2.5LACS IN SAID FIRST ASSESSMENT YEAR, RS.5LACS EACH IN NEXT F OUR ASSESSMENT YEARS AND ITA NOS. 1785/AHD/15 & 35 ORS. [PRAHLADRAY M. SHAH & 3 ORS.] - 14 - PROCEEDED TO DELETE ENTIRE FIGURE IN LAST ASSESSMEN T YEAR; RESPECTIVELY. THE SAME SUFFICIENTLY INDICATES THAT THE IMPUGNED ESTIMATION RATE IN ALL ASSESSMENT YEARS IS NON UNIFORM. WE THEREFORE DEEM IT APPROPRIATE IN THIS BACKDROP OF FACTS THAT THE ASSESSING OFFICER SHALL FINALIZE CONSEQUENTIAL COMP UTATION ADOPTING THE RATE AS IN LOWER APPELLATE PROCEEDINGS IN ASSESSMENT YEAR 1998 -99 ONLY AS PERTINENT TO THE INSTANT ISSUE IN ALL CORRESPONDING YEARS. THE ASSE SSEE SHALL FILE CONSEQUENTIAL COMPUTATION BEFORE THE ASSESSING OFFICER AS PER LAW . 23(B). MR. PIPARA INVITES OUR FURTHER ATTENTION TO THE FACT THAT THE LOWER AUTHORITIES HAVE ERRED IN HOLDING THAT FLAT NO. A/7 JAINAM TOWERS (SUPRA) HAD BEEN PURCHASED IN ASSESSMENT YEAR 2005-06 WHEREAS THE SA ID TRANSACTION HAD NOT BEEN FINALIZED IN THE IMPUGNED ASSESSMENT YEAR. WE DEEM IT APPROPRIATE WITHOUT GOING INTO MERITS OF THE ISSUE THAT THE ASSESSING OFFICER SHALL CONDUCT NECESSARY VERIFICATION QUA THE INSTANT GRIEVANCE IN CONSEQUEN TIAL PROCEEDINGS. 24. LEARNED COUNSEL REPRESENTING ASSESSEE STATES FI RST OF ALL THAT OUR FORGOING DISCUSSION PERTAINING TO REMAINING THREE ASSESSEES HAS ALREADY DIRECTED THE ASSESSING OFFICER TO ASSESS THE ENTIRE INCOME IN FIRST ASSESS EES HANDS. HE THEN SUBMITS THAT NEITHER THE LOWER AUTHORITIES HAVE GRANTED SHRI PRA HLADRAY M. SHAH PEAK CREDIT BENEFIT REGARDING ALL OF HIS FOUR BANK ACCOUNTS IN FIRST ASSESSMENT YEAR 1998-99 NOR HAVE THEY CONSIDERED TELESCOPING OF THE SAID PEAK AMOUNT ADDITION FINALIZED IN FIRST ASSESSMENT YEAR TO BE SOURCE OF HIS UNACCOUNT ED INCOME IN LATTER ASSESSMENT YEAR AND SO ON. LEARNED CIT-DR IS VERY FAIR IN NOT DISPUTING THIS CRUCIAL PLEA THAT BOTH THE LOWER AUTHORITIES HAVE NOT FOLLOWED PEAK C REDIT ADDITION AS WELL AS TELESCOPING AS PLEADED HEREINABOVE. WE OBSERVE IN THESE FACTS THAT THE ASSESSEE HAS ADMITTEDLY SHOWN MULTIPLE BANK ACCOUNTS NUMBERING F OUR WHOSE CREDITS FORM SUBJECT MATTER OF THE IMPUGNED ADDITIONS. IT IS IN THIS BACKDROP OF FACTS THAT WE ARE OF THE VIEW THAT THE POSSIBILITY OF THE VERY AMOUNT WITHDRAWN FOLLOWED BY ITS RE- DEPOSIT IN OTHER ACCOUNTS CANNOT BE COMPLETELY RULE D OUT. OUR FORGOING DISCUSSION MAKES US TO OBSERVE THAT THE APPLICABILITY OF SIMIL AR RE-DEPOSITS IN OTHER ASSESSEES ACCOUNTS CANNOT BE IGNORED SINCE IT HAS COME ON REC ORD THAT IT IS THE FIRST ASSESSEE ITA NOS. 1785/AHD/15 & 35 ORS. [PRAHLADRAY M. SHAH & 3 ORS.] - 15 - ONLY WHO HAS EARNED THE ENTIRE INCOME. WE ACCORDIN GLY ARE OF THE VIEW THAT THE ASSESSING OFFICER NEEDS TO FINALIZE A COMPREHENSIVE COMPUTATION OF INCOME IN FIRST ASSESSEES CASE IN ALL ASSESSMENT YEARS BEFORE US A FTER CONSIDERING PEAK THEORY AND TELESCOPING PRINCIPLE AS PER LAW. THE ASSESSEE IS DIRECTED PREPARE HIS CONSOLIDATED FINANCIAL STATEMENT(S) IN ALL THESE IMPUGNED ASSESS MENT YEARS INCLUDING THE ASSESSMENT YEARS IN LATTER THREE ASSESSEES STATEME NTS TO BE ULTIMATELY ASSESSED IN HIS HANDS ONLY. WE ACCEPT SHRI PRAHLADRAY M. SHAHS TW ELVE QUANTUM AND PENALTY APPEALS (SUPRA) FOR STATISTICAL PURPOSES IN VIEW OF ABOVE TERMS. IT IS EXPECTED THAT THE LEARNED ASSESSING OFFICER WOULD FINALIZE CONSEQ UENTIAL ASSESSMENTS AS EARLY AS POSSIBLE KEEPING IN MIND THE FACT THAT THE FIRST AS SESSMENT YEAR IS 1998-99. MUCH WATER HAS FLOWED DOWN THE STRAIN THEREAFTER TILL DA TE IN A SPAN OF TWO DECADES. 25. LEARNED COUNSEL REPRESENTING ASSESSEE SUBMITS B EFORE PARTING THAT THE CIT(A) HAS APPLIED 15% RATE OF INTEREST ON ESTIMATION BASI S FOR SIX MONTH REGARDING THE OPERATIVE FINANCE ISSUE (SUPRA). HIS ONLY PLEA IS THAT THE SAME IS ON MUCH HIGHER SIDE AS THE VERY ADDITION MADE ON ANNUAL BASIS TERM S OUT TO BE A VERY HEFTY INTEREST RATE OF 30%. WE FIND THAT THERE IS NO MATERIAL IN THE CASE FILE WHICH COULD JUSTIFY SUCH AN EXORBITANT INTEREST RATE AND THAT TOO ON ES TIMATION BASIS. LEARNED CIT-DR ALSO DOES NOT INDICATE BASIS OF SUCH A HIGHER RATE OF INTEREST ESTIMATION. WE THEREFORE PARTLY ACCEPT ASSESSEES INSTANT PLEA TO REDUCE THE SAID RATE OF INTEREST FROM 15% ON SIX MONTHS BASIS TO 9% ONLY TO BE SUBJECT TO FINAL COMPUTATION IN CONSEQUENTIAL PROCEEDINGS. 26. LEARNED CIT-DR SUBMITTED AT THIS STAGE THAT THE ABOVE FACTS AND CIRCUMSTANCES SUFFICIENTLY INDICATE THAT ALL THESE ASSESSEES AND MORE PARTICULARLY THE FIRST ONE OF THEM SHRI PRAHLADRAY M. SHAH HAS ADMIT TEDLY CONCEALED HIS INCOME FROM BEING ASSESSED BY FURNISHING INACCURATE PARTICULARS . HIS CASE THEREFORE IS THAT THE CORRESPONDING PENALTIES IMPOSED U/S.271(1)(C) OF TH E ACT NEED TO BE CONFIRMED. WE DO NOT SEE ANY UNREASONABLENESS IN REVENUES INSTAN T PLEA IN PRINCIPLE. THE FACT HOWEVER REMAINS THAT THE ASSESSING OFFICER IS YET T O FINALIZE CONSEQUENTIAL COMPUTATION IN VIEW OF OUR QUANTUM DIRECTIONS. WE ACCORDINGLY OBSERVE THAT THERE IS NO BASIS FOR THE IMPUGNED PENALTIES AS OF NOW. WE MAKE IT CLEAR THAT IT SHALL BE ITA NOS. 1785/AHD/15 & 35 ORS. [PRAHLADRAY M. SHAH & 3 ORS.] - 16 - VERY MUCH OPEN FOR LEARNED ASSESSING OFFICER TO TAK E A CALL ON THE INSTANT PENALTY ISSUE AS WELL AFTER FINALIZING CONSEQUENTIAL ASSESS MENTS AS PER LAW. 27. ALL THESE FOUR ASSESSEES THIRTY SIX APPEALS IT A NOS. 1785 TO 1796/AHD/2015 IN CASE OF PRAHLADRAY M. SHAH, ITA N OS. 1820 TO 1825, 2072, 2243/AHD/2013 TO 2246/AHD/2015 & 2020 TO 2024/AHD/2 014 IN CASE OF YASHODADEVI PRAHLADRAY SHAH, ITA NOS. 2025 TO 2027, 1563 & 1564/AHD/2014, 983 & 984/AHD/2016 IN CASE OF DURGESH PRAHLADRAY SHA H AND ITA NO. 2028/AHD/2014 IN CASE OF TEJAL PRAHLADRAY ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. [PRONOUNCED IN THE OPEN COURT ON THIS THE 30 TH DAY OF JANUARY, 2018.] SD/- ( S. S. GODARA ) (MANISH BORAD) JUDICIAL MEMBER ACCO UNTANT MEMBER AHMEDABAD: DATED /01/2018 TRUE COPY ORDER PRONO UNCED ON 30.01.2018 AT AHMEDABAD S.K.SINHA / COPY OF ORDER FORWARDED TO:- SD/- SD/- / REVENUE (A.M.) (J.M.) 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )*+ ,--. . /0 / DR, ITAT, AHMEDABAD 1 +23 45 / GUARD FILE. BY ORDER / . // . /0