JAYANTILAL C. JAIN, MUMBAI V. ITO 15(1)(1), MUMBAI

ITA 3838/MUM/2013

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8847 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-10-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: J
• Next Hearing Date: 24-11-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 14-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ALOK JOHARI
• Assessee Lawyers: VIMAL PURNIYA
• Keywords: Unexplained investment; Business income; Income from undisclosed sources; Opportunity of being heard; Period of limitation; Validity of assessment
• Section: 69C; 143(3); 153A; 234B; 133(6); 147; 131; 68; 69; 132; 144

Judgement Text

THE INCOME TAX APPELLATE TRIBUNALJ BENCH, MUMBAI BEFORE SHRI R.C SHARMA, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.3838/MUM/2013 (ASSESSMENT YEAR: 2008-09) JAYANTILAL C. JAIN, PROP. M.S. RAJGURU JEWELLERY MART, 621 COTTON EXCHANGE BLDG. 6 TH FLOOR, KALBADEVI ROAD, MUMBAI 400002, PAN ABOPJ3987G . APPELLANT V/S ITO 15(1)(1) MUMBAI . RESPONDENT ASSESSEE BY : SHRI. VIMAL PURNIYA -AR REVENUE BY : SHRI. ALOK JOHARI CIT-DR DATE OF HEARING 09.10.2017 DATE OF ORDER - 18.10. 2017 ORDER UNDER SECTION 254(1) OF INCOME-TAX ACT PER: PAWAN SINGH JUDICIAL MEMEBR; 1. THIS APPEAL BY ASSESSEE UNDER SECTION 253 OF I.T AC T IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME-TAX (AP PEALS) [CITT-(A)] FOR THE ASSESSMENT YEAR 2008-09. THE A SSESSEE HAS RAISED FOLLOWING GROUND OF APPEAL. GROUND NO.1 1.THE LD. CIT (A) ERRED IN CONFIRMING AND TREATING THE CASH SEIZED OF RS. 61 LACS FROM ASSESSEE'S EMPLOYEE / MANAGER AT THE MUMBAI AIRPORT ON 15.05.2007 AS CONCEALED INCOME FROM HIS UNDISCLOSED BUSINESS. 2. HE ALSO ERRED IN TREATING THE CASH, WHICH IS REC ORDED IN THE BOOKS OF ACCOUNT AS CONCEALED INCOME OF THE ASSESSEE. 2 ITA NO.3838/M/13- JAYANTILAL C. JAIN 3. HE FAILED TO APPRECIATE AND OUGHT TO HELD THAT: A. THE PRESUMPTION THAT THE CASH SEIZED AS UNDISCLO SED INCOME FROM UNDISCLOSED SOURCES WITHOUT RELYING UPO N ANY DOCUMENTS/ EVIDENCES BY CIT(A) IS NOT JUSTIFIED AS CASH SEIZED WAS RECORDED IN THE BOOKS OF ACCOUNT. B. ASSESSEE MANUFACTURED JEWELLERY AT MUMBAI AND SE NT TO CUTTACK FOR RETAILS SALE AGAINST SPOT BASIS, DELIVE RY AGAINST CASH PAYMENT. C. AS PER PRACTICE AT CUTTACK OFFICE, ASSESSEE TRAN SFER CASH IN LUMP SUM TO TIJORI (GODREJ CHEST) A/C. D. ASSESSEE REMOVED CASH OF RS.61 FROM TIJORI AND G IVE TO MR. KANHARAM. ALL CASH IS PART OF ASSESSEE BOOKS OF ACCOUNT. E. THE LD. CIT (A) HAS NOT RELIED ON BOOKS OF ACCOU NT AND EVIDENCE SUPPORTED BY THE APPELLANT. F. THE LD. CIT (A) AND AO HAS ERRED IN IGNORING THE DETAILS OF CASH SUBMITTED BY THE ASSESSEE VIDE LETTER DATED 06/12/2012. G. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE, T HE SAID DISALLOWANCE WERE UNJUSTIFIED AND UNWARRANTED. 4. THE ASSESSEE PRAYS THAT THE SAID ADDITION OF RS. 61 LACS BE DELETED. GROUND NO. 2 1. THE LD. CIT (A) ERRED IN CONFIRMING AND TREATING THE GOLD JEWELLERY OF RS. 18,15,390/- SEIZED AT MUMBAI AIRPO RT, AS UNEXPLAINED INVESTMENT OF THE ASSESSEE UNDER SECTIO N 69 OF THE INCOME TAX ACT. 2. HE ALSO ERRED IN TREATING THE GOLD JEWELLERY WHI CH IS RECORDED IN THE BOOKS OF ACCOUNT AS UNEXPLAINED INVESTMENT OF THE ASSESSEE. 3. HE FAILED TO APPRECIATE AND OUGHT TO HELD THAT: A. THAT THE SEIZED GOLD WAS REALIZED BY ASSESSEE IN EXCHANGE OF JEWELLERY SOLD AT CUTTACK. B. THE SEIZED JEWELLERY IS PART OF ASSESSEE STOCK-I N-TRADE AND RECORDED IN BOOKS OF ACCOUNT. C. THE LD CIT (A) MADE ADDITION ON ACCOUNT OF UNEXP LAINED INVESTMENT U/S 69, WITHOUT APPRECIATING THAT ABOVE JEWELLERY IS RECORDED IN BOOKS AND SEC.69 APPLIES O NLY WHEN INVESTMENT IS NOT RECORDED IN BOOKS OF ACCOUNT . D. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE, T HE SAID DISALLOWANCE WERE UNJUSTIFIED AND UNWARRANTED. 3 ITA NO.3838/M/13- JAYANTILAL C. JAIN 4. THE ASSESSEE PRAYS THAT THE SAID ADDITION OF RS. 18,15,390/- BE DELETED GROUND NO. 3 1. THE LD. CIT(A) HAS ERRED IN TREATING THE GENUINE CREDITORS AS BOGUS AND ADDED RS. 30,21,580/- TO THE TOTAL INCOME OF THE ASSESSEE. 2. THE LD. CIT (A) HAS ERRED IN DISREGARDING THE DOCUMENTARY EVIDENCE FILED BY THE ASSESSEE SUCH AS CONFIRMATION FROM THE LOAN PARTIES ALONG WITH THE NECESSARY DOCUMENTS. 3. HE FAILED TO APPRECIATE AND OUGHT TO HELD THAT: A. THE BASIC REQUIREMENTS FOR PROVING GENUINENESS O F THE TRANSACTION ARE FULFILLED BY THE ASSESSEE THROUGH T HE DOCUMENTS SUBMITTED BY THE LOAN PARTIES WHICH IS ENOUGH TO PROVE THAT THE IDENTITY OF THE LOAN PARTY AND GENUINENESS AND CREDITWORTHINESS OF THE LOAN PARTIE S. B. THE SAID TRANSACTION OF LOAN HAS BEEN MADE FROM THROUGH PROPER BANKING CHANNEL VIA CROSS ACCOUNT PA YEE CHEQUES WHICH ITSELF PROVES THE GENUINENESS OF TRANSACTION. C. FURTHER ALSO ALL THE LOAN PARTIES ARE ASSESSED T O INCOME TAX AND PAN COPIES OF ALL THE PARTIES HAVE BEEN SUBMITTED ALONG WITH THE LOAN CONFIRMATION. D. THERE BEING A REAL RECEIPT OF AMOUNT AS LOAN BY THE ASSESSEE FROM THESE CREDITORS, THE ASSESSEE CAN BE SAID TO HAVE EXPLAINED THE CREDIT ENTRIES AND ESTABLISHE D THAT THE UNSECURED LOANS SO RAISED FROM THIRD PARTIES BY HIM ARE GENUINE AND ALSO THE ONUS THAT LAY UPON HIM U/S 68 OF THE ACT STOOD DULY DISCHARGED AFTER HE HAD FURNI SHED THE AFORESAID INFORMATION WHICH HE COULD DO AS A BORROWER. E. THE ASSESSEE WAS UNDER NO OBLIGATION TO PROVE SO URCE OF SOURCE NOR ORIGIN OF ORIGIN AFTER THE ASSESSEE HAD ESTABLISHED THE SOURCE OF SUCH RECEIPTS AS LOANS. F. IT IS AN ADMITTED POSITION OF LAW THAT ONCE THE ASSESSEE EXPLAINS THE CREDIT ENTRY AND BRINGS EVIDENCE TO SH OW THAT THE ENTRY IS RELATED TO A THIRD PARTY AND THAT CREDIT WAS THAT OF THE THIRD PARTY, THE BURDEN WOULD SHIFT TO THE ASSESSING OFFICER TO PROVE THAT IT IS NOT TRUE . G. THE INCOME TAX OFFICER THUS HAS TO ESTABLISH THA T THE ENTRY WAS NOT REAL BUT WAS PSEUDONYMOUS. 4 ITA NO.3838/M/13- JAYANTILAL C. JAIN H. THIS BURDEN IN THE PRESENT CASE IN APPEAL, HOWEV ER, HAS NOT BEEN DISCHARGED BY THE ASSESSING AUTHORITY BEFO RE MAKING ADDITION UNDER THE ACT NOR HAS HE ESTABLISHE D THAT THE ENTRY WAS NOT REAL BUT WAS PSEUDONYMOUS I. THE DOCUMENTARY EVIDENCE WAS ADEQUATE TO ESTABLI SH ALL THE THREE INGREDIENTS REQUIRED TO BE ESTABLISHED BY THE ASSESSEE UNDER SECTION 68, NAMELY, THE IDENTITY AND CREDITWORTHINESS AND THE GENUINENESS OF THE LOAN TRANSACTIONS. J. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE, T HE SAID DISALLOWANCE WERE UNJUSTIFIED AND UNWARRANTED. 4. THE ASSESSEE PRAYS THAT THE SAID ADDITION OF RS. 30,21,580/- BE DELETED GROUND NO.4 1. THE ASSESSEE PRAYS THAT THE SAID ADDITION OF RS. 4,89,423/-LESS: INTEREST ON LOAN OF RS.15LAKH REQUI RED TO BE DELETED. 2. THE LD CIT(A) AS A CONSEQUENCE OF DISALLOWANCE OF L OAN HAS ALSO DISALLOWED INTEREST OF RS. 4,89,423/- LESS : INTEREST ON LOAN OF RS. 15 LAKH. 3. BUT DISALLOWANCE OF LOAN MADE BY LD CIT (A) IS UNSUSTAINABLE AND BAD IN LAW. 4. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE, THE SAID DISALLOWANCE WAS UNJUSTIFIED AND UNWARRANTED. 5. THE ASSESSEE PRAYS THAT THE SAID ADDITION OF RS. 4,89,423/- LESS: INTEREST ON LOAN OF RS. 15 LAKH RE QUIRED TO BE DELETED. GROUND NO. 5 2. THE LD. CIT (A)ERRED IN CONFIRMING THE ADDITION OF RS. 36,000/- RENT OF PREMISES AT CUTTACK RESPECTIVELY I N VIEW OF SECTION 69C OF THE INCOME TAX ACT, 1961. THE ASSESSEE SUBMITS THAT: I. THE SAID RENT OF RS.36,000/- PAID BY ASSESSEE'S BROTHER MR. PRADEEP C LAIN AND SAME HAS BEEN SHOWN AS WITHDRAWAL IN CAPITAL ACCOUNT OF YOUR APPELLANT'S B ROTHER MR. PRADEEP C LAIN. II. NO ADDITION FOR THE SAME CAN BE MADE IN THE HAN DS OF THE ASSESSEE WHILE COMPLETING THE ASSESSMENT FOR THE A. Y. 2008-09. III. THE SAID AMOUNT WAS ALSO NOT REIMBURSED BY THE ASSESSEE TO HIS BROTHER. IV. FURTHER THE SAID AMOUNT HAS NOT CLAIMED BY THE ASSESSEE AS EXPENDITURE IN HIS PROFIT & LOSS ACCOUNT. 5 ITA NO.3838/M/13- JAYANTILAL C. JAIN V. HENCE, ADDITION CANNOT BE MADE IN THE HANDS OF T HE ASSESSEE. VI. FURTHER THE APPELLANT HAS EXPLAINED THE SOURCE OF EXPENDITURE. HENCE THE ADDITION U/S 69C IS BAD IN L AW. VII. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE, THE SAID DISALLOWANCE WERE UNJUSTIFIED AND UNWARRANTED. VIII. HENCE, THE SAID ADDITION OF RS. 36,000/- NEED S TO BE DELETED. GROUND NO. 6 1. THE LD. CIT (A) HAS ERRED IN CONFIRMING THE DISA LLOWING 10% OF THE CONVEYANCE AND TRAVELLING EXPENSES I.E RS. 8,374/- (10% OF RS. 83,739/-) AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE AND THEREBY ALLEGE D THAT THE SAID CONVEYANCE AND TRAVELLING EXPENSES AR E INCURRED FOR NON BUSINESS PURPOSE. 2. THE ASSESSEE SUBMITS THAT: A. THE LD. AO HAS MADE AN AD-HOC DISALLOWANCE OF 20 % OF THE CONVEYANCE & TRAVELLING EXPENSES INCURRED BY TH E ASSESSEE. AND CIT(A) CONFIRM UPTO 10%. B. WITHOUT BRINGING ON RECORD ANY DOCUMENTARY EVIDE NCE SUPPORTING THE ASSUMPTION THAT THE SAME IS OF PERSO NAL NATURE. C. SUCH A DISALLOWANCE IS PURELY PRESUMPTION IN NAT URE AND CANNOT BE MADE WITHOUT BRINGING ON RECORD ANY EVIDE NCE TO PROVE THAT THE SAME? AS NOT BEEN INCURRED FOR TH E PURPOSE OF BUSINESS. D. ADDITIONS CANNOT BE MADE MERELY ON ASSUMPTIONS OR PRESUMPTIONS OR SURMISES OR CONJECTURES. E. IT IS THE BURDEN OF THE DEPARTMENT TO PROVE THE CORRECTNESS OF SUCH ADDITIONS. F. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE, T HE SAID DISALLOWANCE WERE UNJUSTIFIED AND UNWARRANTED. G. HENCE, THE SAID ADDITION OF RS. 8,374/- NEEDS TO BE DELETED . GROUND NO. 7 1. THE LD. CIT (A) ERRED IN ACTUALLY SERVING THE OR DER ON 05/01/2011 BUT HE SHOULD HAVE SERVED THE ORDER TO T HE ASSESSEE ON OR BEFORE 31/12/2010 WHICH WAS THE LAST DATE OF COMPLETION OF ASSESSMENT OR MAKE SUCH ARRANGEMENT THAT ORDER SHOULD BEYOND THE LIMIT OF H IM, THEREFORE THE ORDER IS BARRED BY LIMITATION. 6 ITA NO.3838/M/13- JAYANTILAL C. JAIN 2. HENCE, THE SAID ORDER IS TIME BARRED, THEREFORE, BAD IN LAW AND VOID-AB-INITIO. GROUND NO. 8 1. THE LD. CIT (A) ERRED IN CHARGING INTEREST U/S 2 34A, 234B AND 234C OF THE IT ACT. 2. THE ASSESSEE PRAYS THAT LEVY OF SAID INTEREST BE DELETED. GROUND NO. 9 1. THE LD. CIT (A) ERRED IN CHARGING INTEREST U/S 2 71(1)(C) OF THE INCOME TAX ACT. GROUND NO. 10 1. THE ASSESSEE CRAVES LEAVE TO ADD FURTHER GROUNDS OR TO AMEND OR ALTER THE EXISTING GROUNDS OF APPEAL. THE ASSESSEE FURTHER BY FILING SEPARATE APPLICATION HAS RAISED FOLLOWING ADDITIONAL GROUND OF APPEAL. GROUND NO.11 ' THE ORDER DATED 31.12.2010 PASSED BY THE LD. AO U/S . 143(3) R.W.S. 153A OF THE INCOME TAX ACT FOR A.Y.20 08- 09 WAS BARRED BY THE PERIOD OF LIMITATION U/S. 153A(1)(B) OF THE INCOME TAX ACT, 1961'. IN VIEW OF THE DECISION OF THE HON'BLE SUPREME COU RT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. VS. CIT REPORTED IN 229 ITR 383, WE WOULD REQUEST THE HON'B LE ITAT TO ADMIT THE ADDITIONAL GROUND OF APPEAL. 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE FILED RETURN OF INCOME ASSESSMENT YEAR 2008-09 ON 26.03.2009 DECLAR ING TOTAL INCOME OF RS.8,35,940/-. AS A SEARCH ACTION U /S. 132 WAS CARRIED OUT ON THE ASSESSEE ON 15.05.2007 DURIN G THE SUCH A CASH OF RS.61,00,000/- AND JEWELLERY OF RS.18,15,390/- WAS FOUND AND CEASED FROM THE ASSESS EES EMPLOYEE SHRI KAHNA RAM AND PRADEEP C JAIN. SUBSEQU ENT 7 ITA NO.3838/M/13- JAYANTILAL C. JAIN TO THE SEARCH ACTION THE ASSESSMENT FOR SIX PREVIOU S ASSESSMENT YEARS WERE COMPLETED BY DY.CIT CIRCLE (1 5) MUMBAI, VIDE ORDER DATED 23.12.2009 U/S. 143(3) R.W .S. 153A. THE ASSESSMENT IN THAT YEAR UNDER CONSIDERATI ON WAS COMPLETED ON 31.12.2010. THE ASSESSING OFFICER IN W HILE PASSING ORDER IN COLUMN NO. 11 OF ITNS 65 ( FORMAT OF ASSESSMENT ORDER) RECORDED SECTION 143(3) R.W.S 1 53A OF THE INCOME TAX. HOWEVER, AT THE CONCLUDED PARA OF THE ASSESSMENT ORDER THE ASSESSING OFFICER RECORDED AS SESSED ACCORDINGLY U/S. 143(3) OF THE INCOME TAX ACT. 3. THE ASSESSING OFFICER WHILE PASSING ASSESSMENT Y EAR MADE THE ADDITION OF VARIOUS ADDITION/DISALLOWANCE CONSI STING OF ADDITION OF RS.61,00,000/- ON ACCOUNT OF UNDISCLOSE D INCOME, ADDITION OF RS. 18,15,390/- AS UNEXPLAINED INVESTME NT IN GOLD U/S. 69, ADDITION OF RS. 45,21,580/- ON ACCOU NT OF UNEXPLAINED LOAN, ADDITION OF RS. 4,89,423/- ON ACC OUNT OF INTEREST ON UNEXPLAINED LOAN, ADDITION ON ACCOUNT O F DISALLOWANCE OF RENTAL EXPENSES OF PREMISES AT CUTT ACK FOR RS.66,000/-, AND DISALLOWANCE OF CONVEYANCE OF RS.1 6,747/-. 4. ON APPEAL BEFORE COMMISSION OF INCOME TAX (APP EALS) THE ADDITION ON ACCOUNT OF UNDISCLOSED BUSINESS INCOME OF BUSINESS INCOME FOR RS. 61,00,000/-,UNEXPLAINED INV ESTMENT 8 ITA NO.3838/M/13- JAYANTILAL C. JAIN IN GOLD U/S. 69 OF RS. 18,15,390/, UNEXPLAINED LOA NS AND ITS INTEREST WAS SUSTAINED. HOWEVER, THE DISALLOWANCE O F RENTAL EXPENSES WAS RESTRICTED TO RS.36,000/- (OUT OF TOTA L RS.66,000/-) AND DISALLOWANCE ON ACCOUNT OF CONVEY ANCE WAS RESTRICTED TO 10% OUT OF TOTAL EXPENDITURE CLAI M FOR RS.83,739/-. THUS, AGGRIEVED BY THE COMMISSION (APP EALS) THE ASSESSEE HAS FILED PRESENT APPEAL BEFORE US. 5. WE HAVE LD. AR, OF THE ASSESSEE AND LD. DR OF R EVENUE AND PERUSED THE MATERIAL ON RECORD. IN SUPPORT OF ADDIT IONAL GROUND OF APPEAL THE LD. AR, OF THE ASSESSEE ARGUED THAT A SEARCH ACTION WAS CONDUCTED ON ASSESSEE AGAIN ON 15.05.2007. THE SIX ASSESSMENT YEAR IMMEDIATELY PRE CEDING ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR WERE ASSESSMENT YEAR 2007-08 TO 2002-03(DESCENDING ORDER ). THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2008-09 IS OUT OF THE PURVIEW OF SECTION 153A OF THE INCOME TAX ACT. THE ASSESSING OFFICER PASSED THE ORDER FOR ASSESSMENT Y EAR UNDER CONSIDERATION U/S. 143(3) R.W.S 150A ON 13.12.2010. THUS, THE ORDER PASSED BY ASSESSING OFFICER IS INVALID AN D IS LIABLE TO DECLARED AS SUCH. THE LD. AR OF THE ASSESSEE FUR THER ARGUED THAT ADDITIONAL GROUND OF APPEAL IS PURELY L EGAL A NATURE AND DOES NOT REQUIRE TWO BRING ANY FURTHER F ACTS OF 9 ITA NO.3838/M/13- JAYANTILAL C. JAIN RECORD. ALL FACTS RELATED FOR THE DISPOSAL OF ADDIT IONAL GROUND OF APPEAL EMANATE FROM THE RECORD ITSELF. THE ADDIT IONAL GROUND OF APPEAL GOES TO THE ROOT OF THE CASE AND S HOULD BE DECIDED FIRST. IT WAS ARGUED THAT THE REVENUE CANNO T TAKE EVEN THE BENEFIT OF SECTION 292 B TO CURE THE INVALI DITY OF THE ORDER. IN SUPPORT OF HIS SUBMISSIONS THE LD AR FOR THE ASSESSEE RELIED ON THE DECISION OF MADRAS HIGH COUR T IN V. RAMAIAH VS CIT [2013] 37 TAXMAN.COM 167( MADRAS), PUNJAB AND HARYANA HIGH COURT IN CIT VS NORTON MOTO RS [2015] 146 TAXMAN 701 (P&H) AND DECISION OF TRIBUNA L IN DLS PROPERTIES (P ) LTD VS DCIT [2013] 33 TAXMAN.CO M 420(DELHI). ON THE OTHER HAND LD. DR FOR THE REVENU E STRONGLY OPPOSES THE APPLICATION FOR RAISING ADDITI ONAL GROUND OF APPEAL. IT WAS ARGUED THAT AND PARA 11 OF ITNS 65(FORMANT OF ASSESSMENT ORDER), THERE IS A MERELY A TYPOGRAPHICAL ERROR WHICH MAY OCCURRED WHILE PASSIN G ORDER. THE ASSESSING OFFICER CORRECTLY RECORDED PROVISION OF SECTION AT THE CONCLUDED PARA OF ASSESSMENT ORDER. THE ORDE R IS NEITHER INVALID NOR REQUIRES ANY CORRECTION. IT WA S FURTHER ARGUED THAT ADMITTEDLY NO NOTICE U/S. 153A FOR THE ASSESSMENT YEAR UNDER CONSIDERATION WAS ISSUED BY ASSESSING OFFICER. IN FACT, THE ASSESSMENT WAS PASS ED U/S. 10 ITA NO.3838/M/13- JAYANTILAL C. JAIN 143(3). THE SEARCH WAS CONDUCTED ON 15.05.2007. THE ASSESSEE FILED RETURN OF INCOME FOR RELEVANT ASSESS MENT YEAR LATER ON 26.03.2009. THE ASSESSING OFFICER ADMITTE DLY NOT ISSUE NOTICE U/S. 153A TO ASSESSEE REQUIRING HIM TO FURNISH RETURN OF INCOME. THUS, THE ASSESSEE CANNOT TAKE T HE PLEA THAT ASSESSMENT ORDER WAS PASSED U/S. 153A R.W.S 14 3(3). EVEN OTHERWISE A SIX ASSESSMENT YEAR AS REFERRED IN CLAUSE (B) AND SUB SECTION (1) OF 153A SPEAKS ABOUT SIX AS SESSMENT YEAR IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELE VANT TO THE PREVIOUS YEAR IN WHICH YEAR SEARCH IS CONDUCTED . 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE PARTY AND HAVE GONE THROUGH THE CONTENTS OF ASSESSMENT ORDER AND OTHER MATERIAL AVAILABLE ON RECORD. THE SEARCH WAS CONDUCTED ON15.05.2007. THE ASSESSING OFFICER HAS NO OCCASION TO ISSUE NOTICE U/S. 153A TO THE ASSESSEE FOR ASSESSMENT YEA R 2008- 89 REQUIRING THE ASSESSEE TO FILE RETURN OF INCOME. EVEN OTHERWISE ASSESSMENT ORDER FOR PRECEDING SIX ASSESS MENT YEARS HAVE BEEN COMPLETED BY COMPLETED BY DY.CIT CI RCLE (15) MUMBAI, VIDE ORDER DATED 23.12.2009 U/S. 143(3 ) R.W.S. 153A. THE ASSESSEE FIELD HIS RETURNED OF INCOME ONL Y ON 26.03.2009. THE ASSESSMENT YEAR 2008-09 WAS OUT OF THE PURVIEW OF NOTICE U/S. 153A. THE ASSESSEE HAS NOT D ISPUTED 11 ITA NO.3838/M/13- JAYANTILAL C. JAIN THE VALIDITY OF ASSESSMENT OF SIX PRECEDING YEARS. IN OUR CONSIDERED VIEW THE SIX ASSESSMENTS YEAR AS REFERRE D IN CLAUSE (B) OF SUB SECTION (1) OF 153A CLEARLY SPEAK S ABOUT SIX ASSESSMENT YEAR IMMEDIATELY PRECEDING ASSESSMENT YE AR RELEVANT TO THE PREVIOUS YEAR IN WHICH YEAR SEARCH IS CONDUCTED. FURTHER, IN OUR CONSIDERED VIEW, THE ASS ESSMENT YEAR UNDER CONSIDERATION IS OUT OF THE PREVIEW OF S COPE OF SECTION 153A. SINCE THE ASSESSMENT FOR THE YEAR UND ER CONSIDERATION WAS OUT OF THE SCOPE OF SECTION 153A, THUS, THE PERIOD OF LIMITATION PRESCRIBED UNDER SECTION 153A( 1)(B) HAS NO APPLICATION FOR PASSING THE ASSESSMENT ORDER WIT H A STIPULATED PERIOD AS PRESCRIBED THEREIN. HENCE THE ORDER PASSED BY THE AO UNDER SECTION 143(3) IS WITHIN PRE SCRIBED PERIOD OF LIMITATION AS PROVIDED UNDER SECTION 153. THE VARIOUS DECISION RELIED BY LD AR OF THE ASSESSEE AR E NOT APPLICABLE ON THE FACTS OF THE GROUNDS OF APPEAL AS DISCUSSED ABOVE, IN FACT THE ORDER PASSED BY AO FOR THE AY UN DER CONSIDERATION IS ORDER UNDER SECTION 143(3) AND NOT UNDER SECTION 153A R.W.S. 143(3) OF THE ACT. HENCE, THE ADDITIONAL GROUND OF APPEAL RAISED BY ASSESSEE IS DISMISSED. 7. GROUND NO. 1 & 2 RELATES TO UNEXPLAINED CASH OF RS. 61,00,000/- AND UNEXPLAINED JEWELLERY OF RS. 18,15, 390/- 12 ITA NO.3838/M/13- JAYANTILAL C. JAIN SEIZED AT MUMBAI AIRPORT. THE LD. AR OF THE ASSESSE E ARGUED ASSESSEE MADE PURCHASES OF JEWELLERY IN MUMBAI AND USED TO SALE IN CUTTACK IN RETAIL SALE AGAINST SPOT BASIS O N CASH PAYMENT, THE CASH RECOVERED IN THE SAID SEARCH WAS ACCOUNTED MONEY OF THE ASSESSEE. THE ASSESSEES 98. 82% OF PURCHASE ARE FROM RAKSHA BULLION. ALL THE CASH AND JEWELLERY ARE SHOWN IN THE BOOKS OF ACCOUNT. THE ASSESSEE HA S PROVIDED ALL THE DETAILS OF THE CASH AND THE JEWELL ERY ALONG WITH CONFIRMATION. THE CASH AND JEWELLERY CANNOT BE TREATED AS UNEXPLAINED OR CONCEALED INCOME OF THE ASSESSEE. THE AO PASSED THE ASSESSMENT ORDER WITHOUT GIVING SUFFICIE NT OPPORTUNITY. IT WAS ARGUED THAT PURSUANT TO THE SEA RCH ACTION, THE ASSESSMENT ORDER FOR AYS 2004-05, 2005- 06, 2006-07 & 2007-08 WAS PASSED UNDER SECTION 153A R.W .S. 143(3). THE ASSESSEE FILED APPEAL IN ALL QUANTUM AS SESSMENT BEFORE THE TRIBUNAL AND THE MATTER WAS RESTORED TO THE FILE OF AO VIDE ORDER DATED 27.04.2016 IN ITA NO. 7190, 698 9, 6990 & 7191/MUM/2010. THE RELIEF PRAYED IN THE GROU ND NO.1 & 2 OF THE APPEAL ARE RELATED TO THE CASH AND GOLD JEWELLERY WAS SEIZED IN THE SEARCH ACTION ON 15.05. 2007. THE AO WHILE PASSING ASSESSMENT ORDER HAS NOT GIVEN SUF FICIENT OPPORTUNITY TO EXPLAIN AND SUBSTANTIATE THE CLAIM O F ASSESSEE 13 ITA NO.3838/M/13- JAYANTILAL C. JAIN AND THESE GROUNDS OF APPEAL MAY ALSO BE RESTORED TO THE FILE OF AO WITH THE DIRECTION TO ALLOW THE ASSESSEE TO E XPLAIN ABOUT THE SEIZURE OF CASH AND JEWELLERY. ON THE OTH ER HAND, THE LD. DR FOR THE REVENUE SUPPORTED THE ORDER OF A UTHORITIES BELOW AND WOULD ARGUE THAT THE ASSESSEE HAS NOT APP EARED BEFORE THE AO ON A NUMBER OF APPOINTED DATES AND AS KED FOR ADJOURNMENT. THE ASSESSEE STARTED TO APPEAR AT THE FAG END OF THE YEAR WHEN THE TIME PERIOD FOR PASSING THE AS SESSMENT ORDER WAS KNOCKING. HOWEVER, ON OUR SPECIFIC QUERY, THE LD. DR FOR THE REVENUE AGREED THAT HE HAS NO OBJECTION, IF THE GROUNDS OF APPEAL ARE RESTORED TO THE FILE OF AO. H OWEVER, IT WAS PRAYED THAT ASSESSEE BE DIRECTED TO FULLY CO-OP ERATE AND TO PROVIDE THE FULL DETAIL AND NOT TO DRAG THE PROC EEDING UNNECESSARY. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF THE PARTIES AND PERUSED THE ORDER OF TRIBUNAL FOR AY 2004-05 TO 200 7-08 IN ITAS NO. 7190, 6989, 6990 & 7191/MUM/2010. WE HAVE NOTED THAT MOST OF THE GROUNDS RAISED IN THE APPEAL WERE RESTORED TO THE FILE OF AO. CONSIDERING THE CONTENT ION OF BOTH THE PARTIES, THE GROUND NO.1 &2 ARE RESTORED TO THE FILE OF AO TO DECIDE BOTH THE GROUND AFRESH IN ACCORDANCE WITH LAW. THE ASSESSEE IS DIRECTED TO PROVIDE FULL DETAIL AND INF ORMATION 14 ITA NO.3838/M/13- JAYANTILAL C. JAIN WHICH MAY BE REQUIRED BY AO AND NOT TO TAKE THE ADJOURNMENT WITHOUT LEGITIMATE GROUND. 9. IN THE RESULT, GROUND NO.1 & 2 ARE ALLOWED FOR STATISTICAL PURPOSE. 10. GROUND NO.3 RELATES TO ADDITION ON LOAN OF RS. 30,2 1,580/- AND GROUND NO. 4 RELATES TO PROPORTIONATE DISALLOWA NCE OF INTEREST ON LOAN FOR RS. 4,89,423/-. THE LD. AR OF THE ASSESSEE ARGUED THAT ASSESSEE HAS RAISED SIMILAR GR OUND OF APPEAL BEFORE THE TRIBUNAL IN THE APPEALS FOR AY 20 04-05 TO 2007-08 AND THE TRIBUNAL IN ITS ORDER DATED 27.04.2 016 REMANDED THE SIMILAR GROUND OF APPEAL TO THE FILE O F AO. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE HAS NOT DISPUTED THE CONTENTION OF LD. AR OF THE ASSESSEE. 11. WE HAVE CONSIDERED THE CONTENTION OF BOTH THE PARTI ES AND HAVE GONE THROUGH THE ORDER OF TRIBUNAL FOR AY 2004 -05 TO 2007-08 WHEREIN ON SIMILAR GROUND, THE TRIBUNAL HAS RESTORED THE MATTER TO THE FILE OF AO TO PASS THE O RDER AFRESH. THE RELEVANT PORTION OF ORDER FOR AY 2007-08 ON SIM ILAR GROUND IS EXTRACTED BELOW. ISSUE NO. 1, 2 & 3:- 24. IN THE SAID ISSUE THE ASSESSEE HAS CHALLENGED T HE ADDITION TO THE TUNE OF RS.21,08,000/- U/S. 69C OF THE ACT. THE ASSESSEE HAS TAKEN THE LOAN FROM 9 PERSONS BUT FAILED TO PRODUCED THEM BEFORE THE ASSESSING OFFICER THERE FORE THE ASSESSING OFFICER TREATED THE SAID AMOUNT AS 15 ITA NO.3838/M/13- JAYANTILAL C. JAIN UNEXPLAINED LOAN AND ADDED TO THE INCOME OF THE ASS ESSEE U/S. 68 OF THE ACT. HERE ALSO THE MATTER IS THE SA ME WHERE THE ASSESSING OFFICER RAISED THE QUESTION ON IDENTI TY, CAPACITY AND GENUINENESS OF THE TRANSACTION. THE ASSESSING OFFICER HAS ALSO RECORDED THE REASON THAT THE LENDERS WERE NOT PRODUCED BEFORE HIM. HOWEVER, THE ASSESSEE HAS PROVED THE IDENTITY OF THE LENDERS BY PRODUCING THE SUFFICIENT DOCUMENTS ON RECORD WHICH HAS ALSO BEEN PRODUCED BEFORE US IN THE PAPER BOOK. WH AT HAS BEEN PRODUCED BY THE ASSESSEE ON RECORD IS HEREBY MENTIONED BELOW:- SR. NO NAME OF THE LENDER DOCUMENTS OF THE LENDER 1. CHAGANLAL D. JAIN 1 . COPY OF THE BALANCE SHEET, INCOME & EXPENDITURE A/C.AND CAPITAL A/C.FORA.Y.07-08. 2. COMPUTATION OF INCOME FOR A.Y.07- 08. 3. INCOME TAX ACKNOWLEDGEMENT FOR A.Y.07-08. 4. PAN CARD XEROX 5. RATION CARD XEROX 6. XEROX COPY OF THE BANK PASSBOOK OF THE LENDER DULY REFLECTING THE LOAN GIVEN TO THE APPELLANT. 7. CONFIRMATION LETTER FOR LOAN GIVEN. 8. COPY OF LETTER DATED:11/11/2008 WRITTEN BY THE LENDER TO THE AO IN REPLY TO THE NOTICE U/S. 133(6) ISSUED TO THEM CONFIRMING THE TRANSACTION WITH YOUR APPELLANT. 9. COPY OF THE BANK STATEMENT OF THE LENDER (SARASWAT BANK) AND THAT OF THE APPELLANT (ICICI BANK) DULY REFLECTING A FURTHER LENDING OF A AMOUNT OF RS.23 LACS ON 21/11/2006 BY THE LENDER TO THE APPELLANT. 2. PRAKASHDEVI JAIN 1 . COPY OF THE BALANCE SHEET, INCOME & EXPENDITURE A/C.AND CAPITAL A/C.FORA.Y.07-08. 2. COMPUTATION OF INCOME FOR A.Y.07- 08. 3. INCOME TAX ACKNOWLEDGEMENT FOR A.Y.07-08. 4. PAN CARD XEROX 5. RATION CARD XEROX 6. XEROX COPY OF THE BANK PASSBOOK OF THE LENDER DULY REFLECTING THE 16 ITA NO.3838/M/13- JAYANTILAL C. JAIN LOAN GIVEN TO THE APPELLANT. 7. CONFIRMATION LETTER FOR LOAN GIVEN. 8. COPY OF LETTER DATED:11/11/2008 WRITTEN BY THE LENDER TO THE AO IN REPLY TO THE NOTICE U/S. 133(6) ISSUED TO THEM CONFIRMING THE TRANSACTION WITH YOUR APPELLANT. 9. COPY OF THE BANK STATEMENT OF THE LENDER (SARASWAT BANK) AND THAT OF THE APPELLANT (ICICI BANK) DULY REFLECTING A FURTHER LENDING OF A AMOUNT OF RS.2.4 LACS ON 15/11/2006 AND 2.4 LACS ON 23.11.2006 BY THE LENDER TO THE APPELLANT. 3. PRADEEP JAIN 2 . COPY OF THE BALANCE SHEET, INCOME & EXPENDITURE A/C.AND CAPITAL A/C.FORA.Y.07-08. 2. COMPUTATION OF INCOME FOR A.Y.07- 08. 3. INCOME TAX ACKNOWLEDGEMENT FOR A.Y.07-08. 4. PAN CARD XEROX 5. RATION CARD XEROX 6. XEROX COPY OF THE BANK PASSBOOK OF THE LENDER DULY REFLECTING THE LOAN GIVEN TO THE APPELLANT. 7. CONFIRMATION LETTER FOR LOAN GIVEN. 8. COPY OF LETTER DATED:11/11/2008 WRITTEN BY THE LENDER TO THE AO IN REPLY TO THE NOTICE U/S. 133(6) ISSUED TO THEM CONFIRMING THE TRANSACTION WITH YOUR APPELLANT. 9. COPY OF THE BANK STATEMENT OF THE LENDER (SARASWAT BANK) AND THAT OF THE APPELLANT (ICICI BANK) DULY REFLECTING A FURTHER LENDING OF A AMOUNT OF RS. 2.5 LACS ON 15.11.2006 BY THE LENDER TO THE APPELLANT. 4. MITESH C. JAIN 1 . COPY OF THE BALANCE SHEET, INCOME & EXPENDITURE A/C.AND CAPITAL A/C.FORA.Y.07-08. 2. COMPUTATION OF INCOME FOR A.Y.07- 08. 3. INCOME TAX ACKNOWLEDGEMENT FOR A.Y.07-08. 4. PAN CARD XEROX 5. RATION CARD XEROX 6. XEROX COPY OF THE BANK PASSBOOK OF THE LENDER DULY REFLECTING THE LOAN GIVEN TO THE APPELLANT. 17 ITA NO.3838/M/13- JAYANTILAL C. JAIN 7 . CONFIRMATION LETTER FOR LOAN GIVEN . 8. COPY OF LETTER DATED:11/11/2008 WRITTEN BY THE LENDER TO THE AO IN REPLY TO THE NOTICE U/S. 133(6) ISSUED TO THEM CONFIRMING THE TRANSACTION WITH YOUR APPELLANT. 9. COPY OF THE BANK STATEMENT OF THE LENDER (SARASWAT BANK) AND THAT OF THE APPELLANT (ICICI BANK) DULY REFLECTING A FURTHER LENDING OF A AMOUNT OF RS.80,000/- ON 21.11.2006 BY THE LENDER TO THE APPELLANT. 5. NEETU JAIN 1 . COPY OF THE BALANCE SHEET, INCOME & EXPENDITURE A/C.AND CAPITAL A/C.FORA.Y.07-08. 2. COMPUTATION OF INCOME FOR A.Y.07- 08. 3. INCOME TAX ACKNOWLEDGEMENT FOR A.Y.07-08. 4. PAN CARD XEROX 5. RATION CARD XEROX 6. XEROX COPY OF THE BANK PASSBOOK OF THE LENDER DULY REFLECTING THE LOAN GIVEN TO THE APPELLANT. 7. CONFIRMATION LETTER FOR LOAN GIVEN. 8. COPY OF LETTER DATED:11/11/2008 WRITTEN BY THE LENDER TO THE AO IN REPLY TO THE NOTICE U/S. 133(6) ISSUED TO THEM CONFIRMING THE TRANSACTION WITH YOUR APPELLANT. 9. COPY OF THE BANK STATEMENT OF THE LENDER (SARASWAT BANK) AND THAT OF THE APPELLANT (ICICI BANK) DULY REFLECTING A FURTHER LENDING OF AN AMOUNT OF RS.2.3 LACS ON 15.11.2006 BY THE LENDER TO THE APPELLANT. 6. NARPATRAJ D. SANGHVI 1 . COPY OF THE BALANCE SHEET, INCOME & EXPENDITURE A/C.AND CAPITAL A/C.FORA.Y.07-08. 2. COMPUTATION OF INCOME FOR A.Y.07- 08. 3. INCOME TAX ACKNOWLEDGEMENT FOR A.Y.07-08. 4. PAN CARD XEROX 5. RATION CARD XEROX 6. XEROX COPY OF THE BANK PASSBOOK OF THE LENDER DULY REFLECTING THE LOAN GIVEN TO THE APPELLANT. 7. CONFIRMATION LETTER FOR LOAN GIVEN. 8. COPY OF LETTER DATED:11/11/2008 18 ITA NO.3838/M/13- JAYANTILAL C. JAIN WRITTEN BY THE LENDE R TO THE AO IN REPLY TO THE NOTICE U/S. 133(6) ISSUED TO THEM CONFIRMING THE TRANSACTION WITH YOUR APPELLANT. 9. COPY OF THE BANK STATEMENT OF THE LENDER (SARASWAT BANK) AND THAT OF THE APPELLANT (ICICI BANK) DULY REFLECTING A FURTHER LENDING OF A AMOUNT OF RS.3 LACS ON 23/11/2006 AND 1.00 LACS ON 06.12.2006 AND RS.25,000/- ON 10/01/2007 BY THE LENDER TO THE APPELLANT. 7. MANJUDEVI N. SANGHVI 1 . COPY OF THE BALANCE SHEET, INCOME & EXPENDITURE A/C.AND CAPITAL A/C.FORA.Y.07-08. 2. COMPUTATION OF INCOME FOR A.Y.07- 08. 3. INCOME TAX ACKNOWLEDGEMENT FOR A.Y.07-08. 4. PAN CARD XEROX 5. RATION CARD XEROX 6. XEROX COPY OF THE BANK PASSBOOK OF THE LENDER DULY REFLECTING THE LOAN GIVEN TO THE APPELLANT. 7. CONFIRMATION LETTER FOR LOAN GIVEN. 8. COPY OF LETTER DATED:11/11/2008 WRITTEN BY THE LENDER TO THE AO IN REPLY TO THE NOTICE U/S. 133(6) ISSUED TO THEM CONFIRMING THE TRANSACTION WITH YOUR APPELLANT. 9. COPY OF THE BANK STATEMENT OF THE LENDER (SARASWAT BANK) AND THAT OF THE APPELLANT (ICICI BANK) DULY REFLECTING A FURTHER LENDING OF A AMOUNT OF 33,000/- ON 12.01.2007 BY THE LENDER TO THE APPELLANT. 8. KALPANA PRADEEP JAIN 1 . COPY OF THE BALANCE SHEET, INCOME & EXPENDITURE A/C.AND CAPITAL A/C.FORA.Y.07-08. 2. COMPUTATION OF INCOME FOR A.Y.07- 08. 3. INCOME TAX ACKNOWLEDGEMENT FOR A.Y.07-08. 4. PAN CARD XEROX 5. RATION CARD XEROX 6. XEROX COPY OF THE BANK PASSBOOK OF THE LENDER DULY REFLECTING THE LOAN GIVEN TO THE APPELLANT. 7. CONFIRMATION LETTER FOR LOAN GIVEN. 8. COPY OF LETTER DATED:11/11/2008 19 ITA NO.3838/M/13- JAYANTILAL C. JAIN WRITTEN BY TH E LENDER TO THE AO IN REPLY TO THE NOTICE U/S. 133(6) ISSUED TO THEM CONFIRMING THE TRANSACTION WITH YOUR APPELLANT. 9. COPY OF THE BANK STATEMENT OF THE LENDER (SARASWAT BANK) AND THAT OF THE APPELLANT (ICICI BANK) DULY REFLECTING A FURTHER LENDING OF A AMOUNT OF RS.2 LACS ON 08.04.2006 AND ANOTHER RS.1 LACS ON 15.05.2006 BY THE LENDER HAVE ALSO LEND RS.2.00 LACS WHICH WAS DULY REPAID ON 17.01.2007. 9. RITESH K. JAIN 1 . COPY OF THE BALANCE SHEET, INCOME & EXPENDITURE A/C.AND CAPITAL A/C.FORA.Y.07-08. 2. COMPUTATION OF INCOME FOR A.Y.07- 08. 3. INCOME TAX ACKNOWLEDGEMENT FOR A.Y.07-08. 4. PAN CARD XEROX 5. RATION CARD XEROX 6. XEROX COPY OF THE BANK PASSBOOK OF THE LENDER DULY REFLECTING THE LOAN GIVEN TO THE APPELLANT. 7. CONFIRMATION LETTER FOR LOAN GIVEN. 8. COPY OF LETTER DATED:11/11/2008 WRITTEN BY THE LENDER TO THE AO IN REPLY TO THE NOTICE U/S. 133(6) ISSUED TO THEM CONFIRMING THE TRANSACTION WITH YOUR APPELLANT. 9. COPY OF THE BANK STATEMENT OF THE LENDER (SARASWAT BANK) AND THAT OF THE APPELLANT (ICICI BANK) DULY REFLECTING A FURTHER LENDING OF A AMOUNT OF RS.40,000 ON 10.01.2007 AND RS.40,000 ON 12.01.2007 BY THE LENDER TO THE APPELLANT. THE LEARNED CIT(A) DID NOT CONSIDER THE CLAIM OF TH E ASSESSEE ON THE GROUND OF THAT THE ASSESSEE FAILED TO PRODUCED THE ABOVE MENTIONED 9 CREDITORS AND THE DOCUMENTS WHICH HAVE BEEN PRODUCED BY THE ASSESSEE WERE ALSO NOT BEEN CONSIDERED ON THE PRESUMPTION TH AT THE ASSESSEE WAS USING THE AVOIDANCE TACTICS. THE LEAR NED CIT(A) WAS ALSO OF THE VIEW THAT THE ASSESSEE FAILE D TO SHOW THE CAPACITY OF THE ABOVE SAID 9 CREDITORS AND THE ABOVE SAID CREDITORS WERE NOT HAVING THE PROPER SOU RCE OF INCOME. BUT AS DISCUSSED ABOVE THE ASSESSEE HAS GI VEN 20 ITA NO.3838/M/13- JAYANTILAL C. JAIN THE DETAILS OF THE CREDITORS AND THEIR RECORDS WHIC H SHOULD BE CONSIDERED IN ACCORDANCE WITH LAW. HOWEVER, THE ASSESSING OFFICER ISSUED THE NOTICE U/S. 133(6) OF THE ACT AND THE SAID CREDITORS ALSO FILED REPLY TO THE SAID NOTICE. IF THE PRESENCE OF THE ABOVE SAID CREDITORS ARE NECESS ARY THEN THE ASSESSING OFFICER CAN SECURE THEIR PRESENC E BY ISSUANCE OF NOTICE U/S. 131 OF THE ACT AND ALSO CAN PROVIDE THE OPPORTUNITY OF BEING CROSS EXAMINATION TO THE ASSESSEE. ANYHOW IN VIEW OF THE ABOVE SAID DOCUMEN TS WE ARE OF THE VIEW THAT THE IDENTITY, CAPACITY AND GEN UINENESS OF THE LENDERS IS REQUIRED TO BE EXAMINED IN VIEW O F THE DOCUMENTS PRODUCED BEFORE US ON RECORD IN THE INTER EST OF JUSTICE AFTER DUE PROVIDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN ACCORDANCE WITH LAW. ACCORDINGLY, WE RESTORE THIS ISSUE ON THE FILE OF ASSESSING OFFICER TO EXAMINE A MATTER AFRESH IN VIEW OF THE ABOVE SAID OBSERVATIONS AND ALSO DECIDE THE ISSUE IN ACCORDANC E WITH LAW. ACCORDINGLY, THESE ISSUES ARE DECIDED IN FAVO UR OF THE ASSESSEE AND AGAINST THE REVENUE. 12. CONSIDERING THE DECISION OF TRIBUNAL IN ASSESSEES OWN CASE FOR EARLIER YEARS, THESE GROUND OF APPEAL ARE ALSO RESTORED TO THE FILE OF AO WITH THE SAME OBSERVATION AS PER ORD ER DATED 27.04.2006 PASSED BY TRIBUNAL. IN THE RESULT, GROUN DS NO. 3 & 4 ARE ALLOWED FOR STATISTICAL PURPOSE. 13. GROUND NO.5 RELATES TO CONFIRMING THE ADDITION OF R S. 36,000/- ON ACCOUNT OF RENT OF PREMISES AT CUTTACK. THE LD. AR OF THE ASSESSEE FAIRLY ARGUED THAT SIMILAR GROUN D OF APPEAL WAS DECIDED BY THE TRIBUNAL AGAINST THE ASSE SSEE IN ASSESSEES OWN CASE FOR AY 2007-08. THE LD. DR FOR THE REVENUE SUBMITTED THAT FACTS OF THE YEAR UNDER CONS IDERATION ARE SIMILAR. HENCE, THE GROUND OF APPEAL RAISED BY ASSESSEE BE DISMISSED. 21 ITA NO.3838/M/13- JAYANTILAL C. JAIN 14. CONSIDERING THE CONTENTION OF LD. AR OF THE ASSESSE E THAT SIMILAR GROUND OF APPEAL FOR AY 2007-08 WAS DISMISS ED BY THE TRIBUNAL VIDE ORDER DATED 27.04.2016. HENCE, TH IS GROUND OF APPEAL IS DECIDED AGAINST THE ASSESSEE. 15. GROUND NO.6 RELATES TO ADHOC DISALLOWANCE OF TRAVEL LING EXPENSES @ 10% OF TOTAL EXPENSES. THE LD. AR OF THE ASSESSEE ARGUED THAT SIMILAR ADHOC DISALLOWANCE WA S RAISED AGAINST THE ASSESSEE FOR AY 2007-08 AND THE TRIBUNA L HAS REMANDED THE MATTER TO THE FILE OF AO IN ITS ORDER DATED 27.04.2016. THE LD. DR FOR THE REVENUE ARGUED THAT HE HAS NO OBJECTION, IF THIS GROUND OF APPEAL IS ALSO REST ORED BACK TO THE FILE OF AO FOR CONSIDERING AFRESH. 16. WE HAVE CONSIDERED THE SUBMISSION OF BOTH THE PARTI ES AND HAVE SEEN THE ORDER OF TRIBUNAL FOR AY 2007-08. THE TRIBUNAL PASSED THE FOLLOWING ORDER: ISSUE NO. 6:- 26. ACCORDING TO ISSUE NO.6 THE ASSESSEE HAS CHALLE NGED THE ADDITION TO THE TUNE OF RS. 60,000/- ON ACCOUNT OF UNEXPLAINED EXPENSES LIKE ELECTRICITY, SALARIES AND TRAVELLING EXPENSES OF BOTH SIDES (MUMBAI AND CUTTACK) FOR THE A.Y. 2007- 08. THE CONTENTION OF THE ASSESSEE IS THAT OFFICE OF THE ASSESSEE WAS NOT IN OPERATION IN THE A.Y. 2007-08 THEREFORE THERE IS NO ISSUE OF EXPENDITURE. ON APPRAISAL OF ORDER PASSED BY THE ASSESSING OFFICER AS WELL AS LEARNED CIT(A) ON RECO RD, THE EXPENSES ASSESSED BY THE ASSESSING OFFICER IS ON A CCOUNT OF ELECTRICITY, SALARY AND TRAVELLING ETC. THE ELECTR ICITY BILLS, SALARY AND EXPENDITURE OF TRAVELLING IS A MATTER OF RECORD WHICH CAN BE CONFIRMED BY GOING THROUGH THE RELEVANT BOOKS OF AC COUNTS/BILL ETC OF THE ASSESSEE. MERELY ON THE BASIS OF THIS F ACT THAT THE ASSESSEE WAS NOT RUNNING THE BUSINESS THEREFORE THE 22 ITA NO.3838/M/13- JAYANTILAL C. JAIN EXPENDITURE IS NOT ALLOWABLE, DOES NOT SEEMS JUSTIF IABLE WITHOUT CONDUCTED ANY REQUIRED ENQUIRY. ANYHOW, THIS MATTE R HAS NOT BEEN EXAMINED PROPERLY EARLIER THEREFORE WE ARE OF THE VIEW THAT THIS EXPENDITURE WHICH HAS BEEN DISALLOWED ON ACCOUNT OF NON WORKING OF THE BUSINESS OF THE ASSESSEE IS REQU IRED TO BE EXAMINED AFRESH IN THE LIGHT OF THE DOCUMENTS / ACC OUNTS OF THE ASSESSEE IN THE INTEREST OF JUSTICE. WE THEREFORE REMAND THIS ISSUE ON THE FILE OF ASSESSING OFFICER TO EXAMINED A MATTER AFRESH IN THE LIGHT OF THE DOCUMENTS / ACCOUNTS OF THE ASSESSEE AND BY GIVING HIM AN OPPORTUNITY OF BEING HEARD IN ACCORDANCE WITH LAW. ACCORDINGLY THIS ISSUE IS DECIDED IN FAV OUR OF THE ASSESSEE AND AGAINST THE REVENUE. 17. CONSIDERING THE DECISION OF TRIBUNAL IN ASSESSEES OWN CASE WHEREIN SIMILAR GROUND OF APPEAL WAS RESTORED TO TH E FILE OF AO. THUS, KEEPING IN VIEW THE PRINCIPLE OF CONSISTE NCY, THIS GROUND OF APPEAL IS ALSO RESTORED TO THE FILE OF AO . 18. IN THE RESULT, THIS GROUND OF APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. 19. GROUND NO.7 RELATES TO THE SERVICE OF ASSESSMENT OR DER SERVED ON 05.01.2011. THE LD. AR OF THE ASSESSEE AR GUED THAT ASSESSMENT ORDER PASSED ON 31.12.2010 IS TIME BARRED AS THE SAME WAS NOT SERVED WITHIN PERIOD OF LIMITAT ION. IT WAS ARGUED THAT THE ASSESSMENT ORDER WAS DELIVERED BY HIM ON 05.01.2011. THE ASSESSMENT ORDER SHOULD HAVE BEE N SERVED ON OR BEFORE 31.12.2010. SINCE THE ASSESSMEN T ORDER WAS SERVED ON 05.01.2011, IT BECAME TIME BARRED, TH EREFORE, BAD-IN-LAW AND VOID AB-INITIO. IN SUPPORT OF HIS SU BMISSION, THE LD. AR OF THE ASSESSEE RELIED UPON THE DECISION OF GUJARAT 23 ITA NO.3838/M/13- JAYANTILAL C. JAIN HIGH COURT IN CASE OF KANUBHAI M. PATEL (HUF) V. HI REN BHATT OR HIS SUCCESSORS TO OFFICER [2011] 12 TAXMANN.COM 198 (GUJ.) AND DECISION OF DELHI TRIBUNAL IN ITO VS. ON EXIM P. LTD. (2013) 40 TAXMANN.COM 133 (DEL TRIB.). FURTHER ON RECORD WE FIND THAT THE LD AR FOR THE ASSESSEE HAS FILED WRITTEN NOTES ON VARIOUS GROUNDS OF APPEAL WHEREIN HE HAS ALSO RELIED ON THE DECISION OF ALLAHABAD HIGH COURT IN CIT VS SINCERE CONSTRUCTION [2015]54 TAXMAN.COM 31(ALLAHAB AD) AND DECISION OF TRIBUNAL IN SHANTI LAL GODAWAT VS A CIT [2009] 126 TTJ 135 (JODH). ON THE OTHER HAND, THE L D. DR FOR THE REVENUE SUPPORTED THE ORDER OF AUTHORITIES BELO W. IT WAS ARGUED THAT ASSESSMENT ORDER WAS MADE WITHIN TWO YE AR FROM THE END OF ASSESSMENT YEAR. THE AO PASSED THE ORDER WITHIN PERIOD OF LIMITATION AS PRESCRIBED UNDER SEC TION 153 OF THE ACT. THE GROUND OF APPEAL RAISED BY ASSESSEE IS MISCONCEIVED. IT WAS ARGUED THAT AS PER THE PROVISI ONS OF SECTION 153, THE AO IS REQUIRED TO MAKE THE ORDER W ITHIN PRESCRIBED PERIOD. SECTION 153 NOWHERE SPEAKS ABOUT SERVICE OF ASSESSMENT ORDER WITHIN THE PRESCRIBED PERIOD OF LIMITATION PROVIDED FOR PASSING THE ASSESSMENT ORDER. THE VARI OUS DECISION RELIED BY LD. AR OF THE ASSESSEE ARE NOT A PPLICABLE. THE DECISION RELIED BY LD. AR OF THE ASSESSEE RELAT ES TO PERIOD 24 ITA NO.3838/M/13- JAYANTILAL C. JAIN SERVICE OF NOTICE UNDER SECTION 148, WHICH HAS NO R ELEVANCE WITH THE GROUND OF APPEAL RAISED HEREIN. SECTION 14 7 RELATES TO NOTICE OF RE-OPENING FOR WHICH SERVICE OF NOTICE WITHIN PRESCRIBED PERIOD OF LIMITATION PROVIDED THEREIN, W HICH IS MANDATORY. 20. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE PAR TIES AND HAVE GONE THROUGH THE ORDER OF AUTHORITIES BELOW. W E HAVE NOTED THAT ASSESSMENT ORDER IS PASSED ON 31.12.2010 . THE ASSESSMENT ORDER IS PASSED WITHIN PRESCRIBED PERIOD OF LIMITATION AS PROVIDED UNDER SECTION 153(1) AT THE RELEVANT PERIOD. SECTION 153 NOWHERE PROVIDES TIME LIMIT FOR SERVICE OF ASSESSMENT ORDER PASSED EITHER UNDER SECTION 143 OR 144 OF THE ACT, WITH IN THE PERIOD PRESCRIBED THEREIN. THE LEGISLATURE HAS INTENTIONALLY USED THE WORD MADE WHILE DRAFTING THE SECTION 153 OF THE ACT FOR PASSING THE ASSESSMENT ORDER UNDER SECTION 143 OR 144 OF THE A CT. THE LD AR FOR THE ASSESSEE HAS NOT ARGUED THAT AFTER PR EPARING AND BEFORE SERVICE OF THE ORDER THE AO MADE ANY VAR IATION. THERE IS ALLEGATION OR EVIDENCE THAT THE ORDER OF A SSESSMENT WAS PASSED AFTER PERIOD OF LIMITATION. EVEN OTHERWI SE, THE ORDER WAS SERVED WITHIN REASONABLE TIME. THE VARIOU S DECISIONS RELIED BY LD AR FOR THE ASSESSEE ARE FACT UALLY DIFFER. 25 ITA NO.3838/M/13- JAYANTILAL C. JAIN THE GROUND OF APPEAL RAISED BY ASSESSEE HAS NO FORC E AND THE SAME IS DISMISSED. HENCE, THIS GROUND OF APPEAL IS DISMISSED. 21. GROUND NO.8 RELATES TO INTEREST UNDER SECTION 234A, 234B & 234C OF THE ACT. THIS GROUND OF APPEAL IS CONSEQUEN TIAL AND NEEDS NO ADJUDICATION. 22. GROUND NO. 9 RELATES TO INITIATING PENALTY UNDER SE CTION 271(1)(C). THIS GROUND OF APPEAL IS PREMATURE AND N EEDS NO ADJUDICATION AT OUR END. 23. GROUND NO. 10 IS GENERAL AND NEEDS NO ADJUDICATION. 24. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 18.10.2017 SD/- SD/- R.C. SHARMA PAWAN SINGH ACCOUNTANT MEMBER JUDICIAL MEM BER MUMBAI, DATED: 18.10.2017 COPY OF THE ORDER FORWARDED TO : SK, PS 1. THE ASSESSEE; 2. THE REVENUE; 3. THE CIT(A); 4. THE CIT, MUMBAI CITY CONCERNED; 5. THE DR, ITAT, MUMBAI; 6. GUARD FILE. BY ORDER . (DY./ASSTT.REGISTRAR) ITAT, MUMBAI