Ramanlal M. Shah, V. ACIT,

ITA 627/PUN/2006

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 49918 (ITAT-PUNE)
• Duration Of Justice: 5 year(s) 1 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 24-05-2006
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARESHWAR SHARMA
• Assessee Lawyers: S U PATHAK
• Keywords: Gift; Income from undisclosed sources; Search and seizure; Loose papers; Source of fund; Block assessment
• Section: 133A; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JM AND SHRI G.S. PANNU, AM. I.T.A. NO. 627/PN/2006 BLOCK PERIOD: 1-4-1995 TO 11-10-2001 RAMANLAL M. SHAH PROP. RAJASHREE ENTERPRISES 1/35, 4 TH ROAD, SKD COLONY 17/26 MADHAVARAM ROAD, ADONI 518 301 PAN AEYPS 0525 E .. APPELLANT VS. ASSTT. CIT CEN. CIR. 2(3) PUNE . RESPONDENT I.T.A. NO. 628/PN/2006 BLOCK PERIOD: 1-4-1995 TO 11-10-2001 MAHENDRAKUMAR M. SHAH M/S. MAHESHWARI FINANCIERS 1/35, 4 TH ROAD, SKD COLONY 17/26 MADHAVARAM ROAD, ADONI 518 301 PAN ADSP584283 .. APPELLANT VS. ASSTT. CIT CEN. CIR. 2(3) PUNE . RESPONDENT APPELLANTS BY: SHRI S.U. PATHAK AND SHRI NIKHIL PATHAK RESPONDENT BY: SHRI HARESHWAR SHARMA ORDER PER SHAILNDRA KUMAR YADAV, JM BOTH THESE APPEALS BY DIFFERENT ASSESSES ARE DIRECTED SEPARATE ORDERS OF CIT IDENTICALLY DATED 2 4-3- 2006 PASSED U/S 263 OF THE ACT FOR THE BLOCK PERIOD 1-4- 1995 TO 11-10-2001. ITA NO. 627/PN/2006 IN THE CASE OF RAMANLAL M. SHAH ITA NO. 627 AND 628/PN/2006 RAMANLAL & MAHENDRA SHAH BLOCK PERIOD: 1-4-1995 TO 11-10-2001 2 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS IN THI S APPEAL WHICH READ AS UNDER: 1. THE LEARNED CIT ERRED IN CANCELLING THE ASSESSME NT. ORDER ALLEGING THAT IT IS ERRONEOUS AND PREJUDICIAL TO THE REVENUE ON VARIOUS ISSUES STATING THAT THESE ISSUES WERE NOT EXAMINED BY THE A.O. AT THE TIME OF ASSESSMENT. 2] THE LEARNED CIT ERRED IN HOLDING THAT THE A.O. DID NOT EXAMINE THE FOLLOWING ISSUES WHILE MAKING AN ASSESSMENT AND THE ADDITIONS WERE WARRANTED ON THOS E ISSUES. I) INTRODUCTION OF RS. 69,37,732/- IN THE BOOKS OF THE ASSESSEE FROM M/S. JUPITER COMMERCIAL CORPORATION. II) CASH BROUGHT IN BY THE ASSESSEE FROM ADONI TO PUNE AND TAKEN BACK. III) GIFTS OF RS. 39,00,000/- RECEIVED BY THE ASSESSEE FROM VARIOUS HUFS. IV) TRANSACTIONS ON PAGES 5,6 AND 8 OF SEIZED MATERIAL AT ANNEX. P 3) THE LEARNED CIT FAILED TO APPRECIATE THAT A. THE ISSUES' ON WHICH HE CONSIDERED THE ASSESSME NT ORDER ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE WERE CONSIDERED BY THE A.O DURING THE COURSE OF BLO CK ASSESSMENT PROCEEDINGS AFTER EXAMINING THE FACTS OF THE CASE AND THE SUBMISSIONS OF THE ASSESSEE THEREON AN D HENCE, THE ASSESSMENT ORDER SHOULD NOT HAVE BEEN CONSIDERED ERRONEOUS AND PREJUDICIAL TO THE INTERES T OF THE REVENUE. B. THE ADDITIONS ON 'THE ISSUES' RAISED BY THE CIT WERE BEYOND THE SCOPE OF BLOCK ASSESSMENT. AS THE MATERI AL FACTS IN REGARD THERETO WERE ALREADY DISCLOSED BY T HE ASSESSEE / THE CONNECTED PERSON BEFORE THE SEARCH T O THE DEPT. IN THE RETURNS FILED AND ENTRIES RECORDED IN REGULAR BOOKS. HENCE, THE ASSESSMENT ORDER FOR THE BLOCK PE RIOD COULD NOT BE CONSIDERED AS ERRONEOUS AND PREJUDICIA L TO THE INTEREST OF THE REVENUE. C. JUST BECAUSE THE A.O. HAS DISCUSSED CERTAIN ISSU ES IN THE ASSESSMENT ORDER FOR THE BLOCK PERIOD BUT DI D NOT MAKE ADDITIONS RELATING THERETO AS THEY WERE NOT WARRANTED IN THE ASSESSMENT U/S 158BC(C), DID NOT RESULT IN THE ERRONEOUS ASSESSMENT/ORDER WHICH COUL D BE CONSIDERED PREJUDICIAL TO THE INTEREST OF THE REVEN UE. 4. THE REASONS MENTIONED BY THE LEARNED CIT IN THE NOTICE U/S 263 DID NOT JUSTIFY HIS DECISION THAT TH E ASSESSMENT ORDER WAS ERRONEOUS AND PREJUDICIAL TO T HE ITA NO. 627 AND 628/PN/2006 RAMANLAL & MAHENDRA SHAH BLOCK PERIOD: 1-4-1995 TO 11-10-2001 3 REVENUE. APPELLANT, THEREFORE, PRAYS FOR CANCELLATI ON OF ORDER U/S 263. 5. WITHOUT PREJUDICE, THE LEARNED CIT WAS NOT JUSTI FIED IN CANCELLING THE ENTIRE ASSESSMENT ORDER WHEN HE CONSIDERED THE ORDER AS ERRONEOUS ONLY ON A FEW ISS UES. 6) THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR DELETE ANY OF THE ABOVE GROUNDS OF APPEAL. 3. THE ASSESSEE IS A PROPRIETOR OF RAJASHREE ENTERP RISES. SURVEY ACTION WAS CONDUCTED ON 11-10-2001. IN THE B LOCK RETURN, THE ASSESSEE DECLARED UNDISCLOSED INCOME OF RS.16,00,000/-. THE A.O. COMPLETED THE ASSESSMENT U/S 158BC(C) BY ASSESSING THE UNDISCLOSED INCOME AT RS. 1,11 ,97,164/-. THEREAFTER, CIT REVISED THE ORDER U/S 263 AND DIRECTED THE ASSESSING OFFICER TO VERIFY CERTAIN IT EMS AND COMPLETE THE ASSESSMENT. THE SAME HAS BEEN AGITATE D BEFORE US. IN FACT, CIT HAS DIRECTED THE ASSESSING OFFICER TO EXAMINE THE FOLLOWING ISSUES: I) INTRODUCTION OF RS. 69,39,732/- IN THE BOOKS OF ASSESSEE FROM M/S. JUPITER COMMERCIAL CORPORATION (HEREINAFT ER REFERRED TO AS JCC FOR SHORT). II) CASH BROUGHT IN BY THE ASSESSEE FROM ADONI TO P UNE AND TAKEN BACK. III) GIFTS OF RS. 39.00 LAKHS RECEIVED BY THE ASSES SEE FROM VARIOUS HUFS. IV) TRANSACTIONS ON PAGES 5, 6 AND 8 OF SEIZED MATE RIAL AT ANNEXURE P. 3.1. THE ISSUE OF INTRODUCTION OF FUNDS IN THE BOOK S OF THE ASSESSEE FROM JCC HAS BEEN DISCUSSED BY CIT IN PARA 13 TO 27 OF HIS ORDER. BRIEFLY STATED THE FACTS ON THIS ISSUE ARE THAT ITA NO. 627 AND 628/PN/2006 RAMANLAL & MAHENDRA SHAH BLOCK PERIOD: 1-4-1995 TO 11-10-2001 4 THE ASSESSEE HAD RECEIVED CERTAIN AMOUNTS FROM JCC. THE ASSESSEE HAS RECEIVED RS. 2,22,732/- FROM JCC. THE AMOUNT IS CLAIMED TO HAVE BEEN RECEIVED PRIOR TO SEARCH AN D SEIZURE RECORDED BY THE ASSESSEE IN HIS BOOKS. IN THE ORIG INAL ASSESSMENT, THE ASSESSEE HAD EXPLAINED THE SOURCES FROM WHICH CASH WAS GIVEN BY JCC AND THE ASSESSING OFFIC ER HAD ACCEPTED THE SAME AND DID NOT MAKE ANY ADDITION. A CCORDING TO THE ASSESSEE, JCC IS A PARTNERSHIP FIRM ASSESSED AT BANGALORE WHEREIN THE ASSESSEE IS ALSO A PARTNER. ACCORDING TO THE ASSESSEE, THE CASH HAS BEEN SHOWN AS RECEIVE D FROM JCC IN THE BOOKS OF THE ASSESSEE ONLY WHEN THERE IS INSUFFICIENT CASH BALANCE IN THE BOOKS OF THE ASSES SEE. THE CIT OBSERVED THAT THE ASSESSING OFFICER HAS NOT APP LIED HIS MIND ON THE ISSUE AND IGNORED CERTAIN FACTUAL ASPEC TS AND HENCE, HE HAS DIRECTED THE ASSESSING OFFICER TO CON SIDER THE ISSUE AFRESH. 3.2 ACCORDING TO THE ASSESSEE, CIT HAS FAILED TO AP PRECIATE THAT NO ADDITION CAN BE MADE IN RESPECT OF THE AMOU NT RECEIVED FROM JCC IN THE BLOCK ASSESSMENT. THE AMO UNT RECEIVED FROM JCC WAS DULY REFLECTED IN REGULAR BOO KS PRIOR TO SEARCH AND NO INCRIMINATING MATERIAL WAS FOUND DURI NG SEARCH TO WARRANT THE ABOVE ADDITION. IT WAS SUBMITTED TH AT THE TRANSACTION WITH JCC WAS QUESTIONED BY THE ASSESSIN G OFFICER IN THE ORIGINAL ASSESSMENT VIDE LETTER DATED 8-7-20 03 WHICH HAS BEEN PLACED AT PAGES 301 TO 307 OF THE PAPER BO OK. 3.3 FURTHER, IN THE COURSE OF ASSESSMENT PROCEEDING S, THE ITA NO. 627 AND 628/PN/2006 RAMANLAL & MAHENDRA SHAH BLOCK PERIOD: 1-4-1995 TO 11-10-2001 5 ASSESSEE HAD EXPLAINED THE SAME TO THE ASSESSING OF FICER ALONG WITH NECESSARY EVIDENCES AS REFERRED IN PAGES 217 TO 230 OF THE PAPER FILED ON BEHALF OF THE ASSESSEE. MOREOVER, IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS CLAIMED TO HAVE PRODUCED ALL RECORDS, DOCUMENTS TO EXPLAIN THE CASH RECEIVED FROM JCC AS DETAILED IN PAGES 313 TO 460 OF THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. FURTHER, THE ASSESSEE HAS ALSO MADE DETAILED SUBMISSIONS TO THE ASSESSING OFFICER VIDE HIS LETTER DATED 14-8-2003, A COPY OF THE SAME IS PLACED AT PAGES 457 TO 460 OF THE PAPER BOOK. FURTHER, IT WAS SUBMITTED THAT A COPY OF ORDER SHEE T ENCLOSED AT PAGES 211 TO 215 OF THE PAPER BOOK SHOWED THAT T HE ISSUE OF CASH RECEIVED FROM JCC IS CLEARLY VERIFIED BY TH E ASSESSING OFFICER. AFTER CONSIDERING THE SUBMISSIONS MADE ON BEHALF OF THE ASSESSEE, THE ASSESSING OFFICER HAS ACCEPTED TH E CLAIM OF THE ASSESSEE AND NO ADDITION HAS BEEN MADE. RELEVAN T OFFICE NOTE OF THE ASSESSING OFFICER IN RESPECT OF BLOCK A SSESSMENT IS AT PAGES 487 TO 489 OF THE PAPER BOOK FILED ON B EHALF OF THE ASSESSEE. 3.4 IN THIS BACKGROUND IT WAS SUBMITTED ON BEHALF O F THE ASSESSEE THAT THE ASSESSING OFFICER HAS VERIFIED TH E ISSUE OF CASH RECEIVED FROM JCC IN DETAIL AND ACCEPTED THE C LAIM OF THE ASSESSEE. HENCE, CIT WAS NOT JUSTIFIED IN INVO KING HIS JURISDICTION UNDER THE PROVISIONS OF SECTION 263 OF THE ACT ON THIS ISSUE SINCE THE ASSESSING OFFICER HAD DULY VER IFIED THIS ISSUE IN THE ASSESSMENT PROCEEDINGS. ITA NO. 627 AND 628/PN/2006 RAMANLAL & MAHENDRA SHAH BLOCK PERIOD: 1-4-1995 TO 11-10-2001 6 3.5 AFTER GOING THROUGH THE RIVAL SUBMISSIONS AND M ATERIAL ON RECORD WE FIND THAT THE ASSESSEE HAS RECEIVED CE RTAIN AMOUNTS FROM JCC WHICH ARE CLAIMED TO BE RECEIVED P RIOR TO SEARCH AND SEIZURE. IN THE ORIGINAL ASSESSMENT THE ASSESSEE HAS EXPLAINED THE SOURCE FROM WHICH CASH WAS GIVEN BY JCC AND A.O. HAS ACCEPTED THE SAME. THE ASSESSEE HAS RECEIVED AMOUNT FROM JCC, WHO IS ASSESSED AT BANGALORE AND ASSESSEE IS ONE OF THE PARTNERS. THIS WAS DONE TO MAKE OUT DEFICIENCY TO THE ASSESSEE FIRM. ACCORDING TO T HE CIT, THE ASSESSING OFFICER HAD NOT APPLIED HIS MIND ON THE I SSUE AND IGNORED THE SOME ON FACTUAL ASPECT. IT SHOWS THAT THE ASSESSEE HAS LOOKED INTO THE MATTER BUT HAS NOT ANA LYZED THE THINGS IN THE WAY IN WHICH THE CIT WANT. THE TRAN SACTION IN QUESTION WAS ASKED TO BE EXPLAINED BY THE ASSESSING OFFICER IN ORIGINAL ASSESSMENT VIDE LETTER DATED 8-7-2003 W HICH IS PLACED ON PAGES 301 TO 307 OF THE PAPER BOOK. THE NECESSARY EVIDENCES IN THIS REGARD WERE REFERRED AS DETAILED AT PAGES 217 TO 230 OF THE PAPER BOOK FILED ON BEHA LF OF THE ASSESSEE. FURTHER, DURING THE ASSESSMENT PROCEEDIN GS, THE ASSESSEE HAS PRODUCED ALL RECORDS, DOCUMENTS TO EX PLAIN THE CASH RECEIVED FROM JCC AS DETAILED IN PAGES 313 TO 460 OF THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. THE ASSESSEE HAS ALSO MADE DETAILED SUBMISSIONS BEFORE THE ASSESSING OFFICER VIDE HIS LETTER DATED 14-8-2003, A COPY OF THE SAME IS PLACED AT PAGES 457 TO 460 OF THE PAPER BOOK CLAIMED TO BE CERTIFIED BEFORE THE ASSESSING OFFICE R. THE COPY OF ORDER SHEET HAS BEEN ENCLOSED AT PAGES 211 TO 2 15 OF THE ITA NO. 627 AND 628/PN/2006 RAMANLAL & MAHENDRA SHAH BLOCK PERIOD: 1-4-1995 TO 11-10-2001 7 PAPER BOOK TO ESTABLISH THAT THE CASH WAS RECEIVED FROM JCC HAD BEEN VERIFIED BY THE ASSESSING OFFICER DURING T HE ASSESSMENT PROCEEDINGS AND HE HAS ACCEPTED THE SAM E AFTER ANALYZING THE EVIDENCES PUT FORWARD ON BEHALF OF T HE ASSESSEE. THUS, THE ASSESSING OFFICER HAS VERIFIED THE ISSUE AND ACCEPTED THE CLAIM OF THE ASSESSEE. IN THIS B ACKGROUND, CIT WAS NOT JUSTIFIED IN INVOKING THE PROVISIONS OF SECTION 263 OF THE ACT ON THIS ISSUE. 4. NEXT ISSUE IS WITH REGARDS TO CASH BROUGHT IN BY THE ASSESSEE FROM ADONI TO PUNE. THIS ISSUE HAS BEEN DI SCUSSED BY THE CIT IN PARA 10 TO 12 OF HIS ORDER. FACTS RE LATING TO THIS ISSUE ARE THAT THE ASSESSEE HAD BEEN GIVING LO ANS TO BUSINESS CONCERNS IN PUNE. FOR THAT PURPOSE, BANK A CCOUNT BEARING NO. 1740 WAS OPENED IN BANK OF INDIA, PUNE. THE ASSESSEE EXPLAINED THAT HE USED TO SEND THE CASH FR OM ADONI TO PUNE FOR DEPOSITING THE AMOUNT IN THE BANK ACCOU NT. THE ASSESSING OFFICER IN THE ORIGINAL ASSESSMENT PROCEE DINGS DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE THAT HE U SED TO SEND CASH FROM ADONI TO PUNE. AFTER DETAILED VERIFI CATION OF THE ISSUE THE ASSESSING OFFICER HELD THAT THE CASH DEPOSITED IN THE SAID BANK ACCOUNT DID NOT PERTAIN TO THE ASS ESSEE BUT BELONGED TO THE PARTIES TO WHOM LOANS WERE ADVANCED BY THE ASSESSEE. ACCORDINGLY, HE DID NOT MAKE ANY ADDITION IN RESPECT OF THE CASH DEPOSITED IN THE BOOKS OF ASSES SEE. THE CIT IN REVISIONAL PROCEEDINGS, HELD THAT WHEN THE A SSESSING OFFICER HAS NOT ACCEPTED THE THEORY OF ASSESSEE THA T CASH WAS ITA NO. 627 AND 628/PN/2006 RAMANLAL & MAHENDRA SHAH BLOCK PERIOD: 1-4-1995 TO 11-10-2001 8 SENT FROM ADONI TO PUNE, HE SHOULD HAVE MADE THE AD DITION OF THE CASH DEPOSITED IN THE HANDS OF THE ASSESSEE. THUS, CIT REVISED THE ORDER ON THIS ISSUE. 4.1 THE STAND OF THE ASSESSEE IS THAT THE DEPARTMEN T DID NOT FIND ANY EVIDENCE THAT THE CASH DEPOSITED IN PU NE ACCOUNT WAS NOT BROUGHT FROM ADONI. THE ASSESSEE SUBMITTED THAT NO INCRIMINATING MATERIAL WAS FOUND AND THEREFORE THE ADDITION CANNOT BE MADE IN BLOCK ASSE SSMENT. THE ASSESSEE ALSO SUBMITTED THAT CERTAIN INQUIRIES WERE CONDUCTED PRIOR TO SEARCH AND A SURVEY ACTION HAD T AKEN PLACE ON 17-7-1998 WHEREIN THE DEPARTMENT HAS INVES TIGATED THE DEPOSITS IN THE BANK ACCOUNT AND NO ADDITION WA S MADE IN THE HANDS OF THE ASSESSEE. IN FACT, THE STATEME NT OF THE ASSESSEE WAS ALSO RECORDED IN THE ASSESSMENT PROCEE DINGS AS REFERRED ON PAGES 513 TO 517 OF THE PAPER BOOK. TH US THE DEPARTMENT WAS AWARE OF THE CASH DEPOSITS IN THE BA NK ACCOUNT AND THEREFORE, THE ADDITION WAS OUTSIDE THE PURVIEW OF BLOCK ASSESSMENT. THE COPY OF ASSESSMENT ORDER F OR A.Y. 1997-98 HAS BEEN PLACED AT PAGES 519 TO 529 OF THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. 4.2 IN ORIGINAL ASSESSMENT, THE ASSESSEE HAD MADE DETAILED SUBMISSIONS AND THE ASSESSING OFFICER ACCEPTED THE CONTENTION OF THE ASSESSEE. THE ASSESSING OFFICER H AD RAISED THIS ISSUE AND THE LETTER ISSUED BY THE ASSESSING O FFICER IS PACED AT PAGES 241 TO 254 OF THE PAPER BOOK FILED O N BEHALF ITA NO. 627 AND 628/PN/2006 RAMANLAL & MAHENDRA SHAH BLOCK PERIOD: 1-4-1995 TO 11-10-2001 9 OF THE ASSESSEE. THE ASSESSEE HAS ALSO MADE DETAILE D SUBMISSIONS ON HE SAID ISSUE BEFORE THE CONCERNED ASSESSING OFFICER AS PER PAGES 257 TO 286 OF THE PA PER BOOK FILED ON BEHALF OF THE ASSESSEE. 4.3 IT WAS FURTHER SUBMITTED THAT THE DEPARTMENT HA S ISSUED NOTICES U/S 158BD TO VARIOUS PERSONS TO WHOM THE ASSESSEE HAD GIVEN LOANS OUT OF THE CASH DEPOSITED IN THE SAID BANK ACCOUNT. THE DEPARTMENT HAS TAKEN CONTRA RY STANDS IN THOSE CASES WHEREIN THE AMOUNT DEPOSITED IN THE SAID BANK ACCOUNT IS TAXED AS INCOME OF THE PERSONS TO WHOM THE LOANS IS GIVEN BY THE ASSESSEE. ACCORDINGL Y IN VIEW OF THE DEPARTMENTS STAND IN THOSE CASES, THE ADDIT ION IN THIS CASE WAS NOT JUSTIFIED. OUR ATTENTION WAS INVITED TO THE SATISFACTION NOTE FORWARDED BY THE ASSESSING OFFICE R IN RESPECT OF THE OTHER PERSONS (PAGES 491 TO 502 OF T HE PAPER BOOK. THE ASSESSEE HAS ALSO REFERRED TO THE DECISI ON OF THE TRIBUNAL IN THE CASE OF SHRI ATUL BHAGAT IN IT(SS) A NO. 32/PN/1998 FOR THE BLOCK PERIOD 1987-88 TO 1997-98) DATED9-3-2001 PLACED AT PAGES 503 TO 512 OF THE PAP ER BOOK. 4.4 THE ASSESSEE SUBMITTED THAT THE STATEMENT OF TH E ASSESSEE WAS RECORDED ON 9-3-2000 AND DETAILED INVESTIGATION WAS MADE BY THE ASSESSING OFFICER IN ASSESSMENT PROCEEDINGS AND NO ADDITION WAS MADE AS REFERRED IN PAGES 513 TO 5`17 OF THE PAPER BOOK FIL ED ON BEHALF OF THE ASSESSEE. FURTHER, THE ASSESSING OFF ICER HAD ITA NO. 627 AND 628/PN/2006 RAMANLAL & MAHENDRA SHAH BLOCK PERIOD: 1-4-1995 TO 11-10-2001 10 WRITTEN A LETTER TO THE CHIEF CIT REGARDING THIS IS SUE AND SHE HAD REQUESTED HIM TO ISSUE NECESSARY DIRECTNESS OF REOPENING THE CASES OF THE OTHER PERSONS AS REFERRE D IN PAGES 300-300A OF THE PAPER BOOK. IN THIS BACKGROUND, IT WAS SUBMITTED THAT THE ISSUE WAS DULY EXAMINED BY THE E RSTWHILE ASSESSING OFFICER AND HENCE THE CIT WAS NOT JUSTIFI ED IN REVISING THE ORDER ON THIS ISSUE. 4.5 IN THE ORIGINAL ASSESSMENT THE ASSESSEE HAS CLA IMED TO HAVE RECEIVED THE AMOUNT AT PUNE FROM ADONI AND THE SAME WAS CLAIMED TO BE BROUGHT FOR DEPOSITING IN BANK A CCOUNT BEARING NO. 1740 OF BANK OF INDIA, PUNE. ACCORDI NGLY HE DID NOT MAKE ANY ADDITIONS IN RESPECT OF CASH DEP OSITED IN BOOKS OF ASSESSEE. IT WAS SHOWN THAT THIS ISSUE WAS DISCUSSED AND DECIDED BY THE ASSESSING OFFICER IN T HE ORIGINAL ASSESSMENT PROCEEDINGS AFTER APPLICATION O F HIS MIND. HOWEVER, THE CIT DID NOT ACCEPT THE THEOR Y THAT THE CASH WAS SENT FROM ADONI TO PUNE AND THE ASSESSIN G OFFICER SHOULD HAVE MADE THE ADDITION OF CASH DEPOS ITED IN THE HANDS OF THE ASSESSEE. THE CIT HAS NOT ESTABLI SHED THE FACT THAT THE CASH WAS NOT BROUGHT FROM ADONI AND A SSESSING OFFICER WAS NOT JUSTIFIED IN ACCEPTING VERSION OF A SSESSEE ON THE POINT. CERTAIN INQUIRIES WERE MADE IN THIS REG ARD AND NO ADDITION WAS MADE IN THE HANDS OF THE ASSESSEE BY T HE ASSESSING OFFICER. IN FACT, THE STATEMENT OF THE A SSESSEE WAS ALSO RECORDED DURING THE ASSESSMENT PROCEEDINGS WH ICH ARE PLACED ON PAGES 513 TO 517 OF THE PAPER BOOK. THE ASSESSEE ITA NO. 627 AND 628/PN/2006 RAMANLAL & MAHENDRA SHAH BLOCK PERIOD: 1-4-1995 TO 11-10-2001 11 HAS ALSO MADE DETAILED SUBMISSIONS ON THE ISSUE BEF ORE THE ASSESSING OFFICER AS EVIDENT FROM PAGES 257 TO 286 OF THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. FURTHER HE SUBMITTED THAT THE DEPARTMENT HAS ISSUED NOTICES U/ S 158BD TO VARIOUS PERSONS TO WHOM THE ASSESSEE HAD G IVEN LOANS OUT OF THE CASH DEPOSITED IN THE SAID BANK AC COUNT. THE DEPARTMENT HAS TAKEN CONTRARY STANDS IN THOSE C ASES WHEREIN THE AMOUNT DEPOSITED IN THE SAID BANK ACCOU NT IS TAXED AS INCOME OF THE PERSONS TO WHOM THE LOANS WA S CLAIMED TO BE GIVEN BY THE ASSESSEE. THUS THE AS SESSING OFFICER ANALYZED THE SAME AT PARTICULAR STAGE. T HE STATEMENT OF THE ASSESSEE WAS RECORDED AND DETAILED INVESTIGATION WAS MADE BY THE ASSESSING OFFICER IN ASSESSMENT PROCEEDINGS AND NO ADDITION WAS MADE AS REFERRED IN PAGES 513 TO 517 OF THE PAPER BOOK FILE D ON BEHALF OF THE ASSESSEE. FURTHER, THE ASSESSING OFFICER HA D WRITTEN A LETTER TO THE CHIEF CIT IN THIS REGARD AND REQUESTE D TO ISSUE NECESSARY DIRECTNESS FOR REOPENING THE CASES OF THE OTHER PERSONS AS REFERRED IN PAGES 300-300A OF THE PAPER BOOK. THUS, THE ISSUE WAS EXAMINED BY THE ASSESSING OFF ICER AS DISCUSSED ABOVE AND SO THE CIT WAS NOT JUSTIFIED IN INVOKING THE PROVISIONS OF SECTION 263 ON THIS ISSUE. 5. NEXT ISSUE IS WITH REGARDS TO GIFTS RECEIVED OF RS. 39.00 LAKHS FROM VARIOUS HUF. THE BRIEF FACTS OF THIS IS SUE ARE THAT THE ASSESSEE CLAIMED TO HAVE RECEIVED VARIOUS GIFTS FROM THE MEMBERS OF HUF TO THE TUNE OF RS. 39.00 LAKHS. ALL ITA NO. 627 AND 628/PN/2006 RAMANLAL & MAHENDRA SHAH BLOCK PERIOD: 1-4-1995 TO 11-10-2001 12 THESE GIFTS WERE RECEIVED PRIOR TO SEARCH AND DULY RECORDED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE AS CAN BE SEE N FROM PAGES 41 TO 58 OF THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. FURTHER, THE HUFS HAVE SUBMITTED THEIR BA LANCE SHEETS, CAPITAL ACCOUNT ALONG WITH THE RETURNS PRIO R TO SEARCH AND HAD CATEGORICALLY MENTIONED ABOUT THE GI FTS BEING MADE TO THE ASSESSEE. DETAILS ARE MENTIONED ON PAGE S 65 TO 194 OF THE PAPER BOOK FILED ON BEHALF OF THE ASSESS EE. HOWEVER, THE CIT HAS STATED THAT THE HUFS ARE BOGUS ENTITIES AND HENCE THE GIFTS RECEIVED BY THE ASSESS EE ARE ALSO BOGUS. THE CIT HAD DOUBTED THE SOURCE OF FUNDS WIT H THE HUFS. HE HAS ALSO STATED THAT NONE OF THE HUFS HAD WITHDRAWN ANY AMOUNT FROM THE BANK ACCOUNTS. ACCOR DING TO THE CIT, THE MONEY IN THESE HUFS FROM WHICH THE GIFTS HAVE BEEN RECEIVED IS NOTING BUT UNACCOUNTED INCOME OF THE ASSESSEE. THE CIT ACCORDINGLY HELD THAT THE ASSESS ING OFFICER HAS NOT EXAMINED THE ISSUE OF GIFTS AND THE REFORE, DIRECTED HIM TO VERIFY THE SAME. 5.1 THE STAND OF THE ASSESSEE IN THIS REGARD IS THA T THESE HUFS ARE ASSESSED TO TAX AND HAVE BEEN FILING THEIR RETURNS OF INCOME. THE COPIES OF RETURN OF INCOME AND BALA NCE SHEET FILED PRIOR TO SEARCH ARE FILED AT PAGES 65 TO 194 OF THE PAPER BOOK AS STATED ABOVE. FURTHER, THE ASSESSEE HAD AL SO FILED THE RETURNS PRIOR TO SEARCH AND HAD SHOWN THE GIFTS RECEIVED IN HIS BALANCE SHEET AS PER PAGES 41 TO 58 OF THE P APER BOOK. THE SCRUTINY IN RESPECT OF THE ASSESSEE WAS ALSO CO MPLETED ITA NO. 627 AND 628/PN/2006 RAMANLAL & MAHENDRA SHAH BLOCK PERIOD: 1-4-1995 TO 11-10-2001 13 FOR A.Y. 197-98 AND THE ASSESSING OFFICER AFTER THO ROUGH INQUIRIES HAD ACCEPTED THE GENUINENESS OF THE HUFS AND NO ADDITION WAS MADE. THE COPY OF ASSESSMENT ORDER IS PLACED AT PAGES 519 TO 529 OF THE PAPER BOOK. IN FACT, BE FORE SEARCH, SURVEY U/S 133A WAS CARRIED OUT ON THE ASSE SSEE AND THE DEPARTMENT AFTER MAKING THROUGH INVESTIGATI ON ACCEPTED THE GENUINENESS OF THE HUFS AS PER PAGES 5 13 TO 517 OF THE PAPER BOOK FILED ON BEHALF OF THE ASSESS EE. IN THIS BACKGROUND IT WAS SUBMITTED THAT THE ASSESSING OFFI CER HAS VERIFIED THE ISSUE OF GIFTS AND HAS NOT MADE THE AD DITION. ACCORDINGLY, THE CIT WAS NOT JUSTIFIED IN REVISING THE ORDER. FURTHER, IT WAS SUBMITTED THAT THE ADDITION DIRECTE D TO BE MADE WAS NOT JUSTIFIED SINCE IT IS OUTSIDE THE PURV IEW OF BLOCK ASSESSMENT. NO INCRIMINATING MATERIAL WAS FO UND DURING THE SEARCH AND THEREFORE, THE CIT WAS NOT JU STIFIED IN DIRECTING ASSESSING OFFICER TO MAKE THE ADDITION. IT IS SETTLED LEGAL POSITION THAT NO ADDITION CAN BE MADE IN BLOC K ASSESSMENT ON THE BASIS OF MERE PRESUMPTIONS AND SU RMISES WITHOUT ANY CONCRETE EVIDENCE FOUND DURING SEARCH. ADDITIONS CAN BE MADE ONLY ON THE BASIS OF INCRIMIN ATING MATERIAL FOUND DURING SEARCH. IT WAS ALSO POINTED OUT THAT IN THE REGULAR ASSESSMENT OF THE ASSESSEE AS WELL A S THE HUFS THE DEPARTMENT HAS ACCEPTED THE GENUINENESS OF THE GIFTS. THUS, WHEN THE DEPARTMENT HAS TAKEN A PARTI CULAR STAND, THERE WAS NO REASON TO ADOPT A DIFFERENT STA ND IN BLOCK ASSESSMENT. RELIANCE WAS PLACED ON THE DECIS ION OF SUPREME COURT IN THE CASE OF RADHASOAMI SATSANG VS. CIT ITA NO. 627 AND 628/PN/2006 RAMANLAL & MAHENDRA SHAH BLOCK PERIOD: 1-4-1995 TO 11-10-2001 14 (1992) 193 ITR 321 (SC) AND BOMBAY HIGH COURT DECIS ION IN THE CASE OF H. A. SHAH & CO. VS. CIT AND EXCESS PRO FITS TAX, BOMBAY CITY (1956) 30 ITR 618 (BOM). IN THIS BACKGR OUND, IT WAS SUBMITTED THAT THE ADDITION OF RS. 39.00 LAKHS DOES NOT CONSTITUTE UNDISCLOSED INCOME AND THE CIT WAS NOT J USTIFIED IN DIRECTING THE ASSESSING OFFICER TO MAKE THE ADDI TION. WITHOUT PREJUDICE TO THE ABOVE, IT WAS SUBMITTED TH AT THE PROPOSED ADDITIONS ARE NOT JUSTIFIED AT ALL. FIRST OF ALL, IT WAS SUBMITTED THAT THE GIFTS RECEIVED BY THE ASSESSEE A RE FROM 39 HUFS OUT OF WHICH ONLY 12 HUFS WERE HAVING CREDIT A CCOUNT WITH THE ASSESSEE. FURTHER, IT WAS SUBMITTED THAT THE GIFTS WERE MADE BY THE HUFS TO THE ASSESSEE IN RECOGNITIO N OF THE FACT THAT THE ASSESSEE OVER THE YEARS WAS MAINLY SP ENDING THE AMOUNTS ON HOUSEHOLD EXPENSES FOR THE BENEFIT O F ALL THE FAMILY MEMBERS. ACCORDINGLY, THEY THOUGHT OF RECIPR OCATING THE ASSESSEES OBLIGATION BY GIVING HIM THE ABOVE G IFTS. THERE IS NOTHING WRONG IN SUCH APPROACH. SECONDLY, ALL T HESE TRANSACTIONS ARE FULLY ACCOUNTED FOR IN THE BOOKS B EFORE THE SEARCH. THE GIFTS MADE TO THE ASSESSEE WERE NOTHIN G AS COMPARED TO THE EARNINGS OF THE HUFS FROM RESPECTIV E BUSINESSES. WHEN THE GIFTS HAVE BEEN DISCLOSED IN T HE BALANCE SHEETS OF THE CONCERNED HUFS PRIOR TO SEARC H, THERE WAS NO REASON TO MAKE THE ADDITION IN BLOCK ASSESSM ENT. ACCORDINGLY, THE PROPOSED ADDITIONS ARE NOT JUSTIFI ED UNDER THE PROVISIONS OF SECTION 263 OF THE ACT. 5.2 AFTER GOING THROUGH RIVAL SUBMISSIONS AND MATER IAL ON ITA NO. 627 AND 628/PN/2006 RAMANLAL & MAHENDRA SHAH BLOCK PERIOD: 1-4-1995 TO 11-10-2001 15 RECORD, WE FIND THAT THE ASSESSEE HAS CLAIMED TO HA VE RECEIVED GIFTS FROM HUF OF HIS FAMILY MEMBERS TO TH E TUNE OF RS.39,00,000/-. ALL THESE GIFTS WERE RECEIVED PRI OR TO SEARCH AND DULY RECORDED IN BOOKS OF ACCOUNTS WHICH IS EVI DENT FROM THE DETAILS AT PAGES 41 TO 58 OF THE PAPER BO OK FILED ON BEHALF OF THE ASSESSEE. FURTHER, HUFS HAVE SUBMIT TED THEIR BALANCE SHEETS, CAPITAL ACCOUNTS ALONGWITH THE RETU RNS PRIOR TO SEARCH AND HAD MENTIONED ABOUT GIFTS BEING MADE TO THE ASSESSEE AND THE SAME ARE DETAILED AT PAGES 65 TO 1 94 OF THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. ACCORDI NG TO THE CIT THE HUFS ARE BOGUS ENTITIES AND HENCE THE GIFTS RECEIVED BY THE ASSESSEE ARE ALSO BOGUS. THE CIT HAD DOUBTE D THE SOURCE OF FUNDS WITH THE HUFS. THE OBJECTION OF TH E CIT IS ALSO THAT NONE OF THE HUFS HAD WITHDRAWN ANY AMOUNT FROM THE BANK ACCOUNTS. ACCORDING TO THE CIT, THE MONEY IN THESE HUFS FROM WHICH THE GIFTS HAVE BEEN RECEIVED IS NOTHING BUT UNACCOUNTED INCOME OF THE ASSESSEE. ACCORDINGLY THE CIT HELD THAT THE ASSESSING OFFICER HAS NOT EXAMINED THE ISSUE. SO HE DIRECTED THE ASSESSING OF FICER TO VERIFY THE SAME. WE FIND THAT THE HUF ARE ASSESSED TO TAX AND HAVE BEEN FILING RETURNS WHICH IS MATTER OF REC ORD. THE COPIES OF RETURN OF INCOME AND BALANCE SHEET FILED PRIOR TO SEARCH ARE PLACED AT PAGES 65 TO 194 OF THE PAPER B OOK DULY CERTIFIED. THESE GIFTS HAVE BEEN RECEIVED PRIOR TO SEARCH AND HAVE BEEN SHOWN IN ENTRIES OF BALANCE SHEET AS PER PAGES 41 TO 58 OF THE PAPER BOOK FILED ON BEHALF OF THE ASSE SSEE. THE SCRUTINY IN RESPECT OF THE ASSESSEE WAS ALSO COMPLE TED FOR ITA NO. 627 AND 628/PN/2006 RAMANLAL & MAHENDRA SHAH BLOCK PERIOD: 1-4-1995 TO 11-10-2001 16 A.Y. 1997-98 AND THE ASSESSING OFFICER AFTER THOROU GH INQUIRIES HAD ACCEPTED THE GENUINENESS OF THE HUFS AND NO ADDITION WAS MADE ON THIS ACCOUNT. THE COPIES OF ASSESSMENT ORDERS ARE PLACED AT PAGES 519 TO 529 OF THE PAPER BOOK. IN FACT, SURVEY U/S 133A WAS CARRIED O UT ON THE ASSESSEE AND THE DEPARTMENT AFTER MAKING THROUGH INVESTIGATION ACCEPTED THE GENUINENESS OF THE HUFS WHICH IS EVIDENT FROM THE ENTRIES MADE IN THIS REGARD AS PER PAGES 513 TO 517 OF THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. THUS, THE ASSESSING OFFICER HAS VERIFIED THE ISSUE OF GIFTS AND HAS NOT MADE ANY ADDITION. IN THIS REGARD, THE CIT WAS NOT JUSTIFIED IN REVISING THE ORDER ON THIS ACCOUNT . MORE OVER THE CIT HAS DIRECTED TO MAKE THE ADDITION ON THIS ACCOUNT WHICH IS ALSO CONTRARY TO THE SETTLED LEGAL POSITIO N ON THE ISSUE. NO INCRIMINATING MATERIAL WAS FOUND DURING T HE COURSE OF SEARCH AND ADDITION CANNOT BE MADE ON PRESUMPTIONS. WITHOUT PREJUDICE TO ABOVE, WE FIND THAT IT CAN BE MADE IN THE REGULAR ASSESSMENT IN THE CASE O F ASSESSEE AS WELL AS THE HUFS. THE DEPARTMENT HAS AC CEPTED THE GENUINENESS OF THE GIFTS IN QUESTION. ONCE THE DEPARTMENT HAS TAKEN A PARTICULAR STAND, THERE WAS NO REASON TO ADOPT A DIFFERENT STAND IN BLOCK ASSESSME NT. IN VIEW OF THIS FACTUAL POSITION ANDLEGAL DISCUSSIONS, CIT IS NOT JUSTIFIED IN DIRECTING THE ASSESSING OFFICER TO MA KE THE ADDITION U/S.263. 6. THE NEXT ISSUE IS WITH REGARDS TO TRANSACTIONS A S FOUND ITA NO. 627 AND 628/PN/2006 RAMANLAL & MAHENDRA SHAH BLOCK PERIOD: 1-4-1995 TO 11-10-2001 17 ON PAGES 5, 6 AND 8 OF THE SEIZED MATERIAL WHICH HA S BEEN REFERRED IN PARAS 28 TO 40 OF THE CITS ORDER. THE FACTS IN THIS REGARD ARE THAT DURING SEARCH, CERTAIN PAGES R ELATING TO M/S. ALIMCHAND TOPANDAS OIL INDUSTRIES LTD., WERE F OUND WITH THE ASSESSEE. THE ASSESSEE STATED THAT HE WAS A DIRECTOR IN THE SAID COMPANY TILL MARCH 2000 AND TH EREFORE, CERTAIN PAPERS WERE FOUND WITH HIM. THESE PAPERS H AVE BEEN PLACED AT PAGES 469 TO 473 OF THE PAPER BOOK. IT WAS EXPLAINED TO THE ASSESSING OFFICER THAT THESE NOTIN GS PERTAINED TO THE COMPANY AND THEREFORE, THERE WAS N O REASON TO MAKE ANY ADDITION IN THE ASSESSEES HANDS ON THE BASIS OF THE SAID LOOSE PAPERS. DURING THE ORIGINAL ASSESSM ENT PROCEEDINGS, THE ASSESSEE HAD EXPLAINED THE DETAILS OF THE PAPERS FOUND AND THE ASSESSING OFFICER WAS SATISFIE D WITH THE SUBMISSIONS OF THE ASSESSEE. HOWEVER, THE CIT H AS STATED THAT THE ASSESSING OFFICER HAS NOT VERIFIED THIS ISSUE AND HENCE HE HELD THAT THE ASSESSMENT ORDER PASSED BY HIM IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 6.1 THE STAND OF THE ASSESSEE IS THAT THE PAPERS PE RTAINED TO M/S. ALIMCHAND TOPANDAS OIL INDUSTRIES LTD. THE REFORE, THERE WAS NO REASON TO MAKE ANY ADDITION IN THE HAN DS OF THE ASSESSEE. DURING THE COURSE OF ASSESSMENT PROC EEDINGS, THE ASSESSEE HAD SUBMITTED THE CONFIRMATION LETTER OF SHRI K.V. GOPAL KRISHNA, CHAIRMAN OF THE COMPANY WHEREIN HE HAD CONFIRMED THAT THE PAPERS RELATED TO THE COMPAN Y. THE COPY OF THE SAID LETTER IS PLACED ON PAGES 475 TO 4 76 OF THE ITA NO. 627 AND 628/PN/2006 RAMANLAL & MAHENDRA SHAH BLOCK PERIOD: 1-4-1995 TO 11-10-2001 18 PAPER BOOK. THUS, WHEN THE CHAIRMAN OF THE SAID CO MPANY HAS ACCEPTED THAT THE PAPERS PERTAINED TO IT, THERE WAS NO REASON TO MAKE THE ADDITION IN THE HANDS OF THE ASS ESSEE, SUBMITTED THE ASSESSEE. FURTHER, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAD FILED DETA ILED SUBMISSION TO THE ASSESSING OFFICER REGARDING THE S AID PAPERS AND THE SAME WERE PLACED ON PAGES 461 TO 463 OF THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. THE ASS ESSEE ALSO SUBMITTED THE BALANCE SHEET OF THE COMPANY TO CO-RE LATE THE FIGURES APPEARING ON THE SEIZED PAPERS WHICH HAVE B EEN PLACED AT PAGES 477 TO 480 OF THE PAPER BOOK. DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE EXPL AINED CERTAIN ENTRIES WHICH WERE PERTAINING TO THE SAID C OMPANY. FOR EXAMPLE, AN AMOUNT OF RS. 6,68,316/- IS NOTED O N PAGE. THE SAID AMOUNT IS GIVEN BY CHEQUE BY RAJASHREE HOT ELIERS PVT. LTD., TO THE COMPANY. THE COPY OF THE BANK AC COUNT IS PLACED ON PAGE 481 OF THE PAPER BOOK FILED ON BEHAL F OF THE ASSESSEE. IN THIS BACKGROUND, IT WAS SUBMITTED THA T THE ASSESSING OFFICER HAD VERIFIED THIS ISSUE AND HAS A CCEPTED THE CLAIM OF THE ASSESSEE. THUS, THE CIT WAS NOT J USTIFIED IN REVISING THE ORDER ON THIS ISSUE. LEARNED DR SUPPOR TED THE ORDER OF CIT ON THIS ISSUE AND SUBMITTED THAT THE A SSESSING OFFICER HAS NOT ANALYZED THE ISSUE. SO, THE ORDER O F THE ASSESSING OFFICER ON THIS ACCOUNT IS ERRONEOUS AS W ELL AS PREJUDICIAL TO THE INTEREST OF REVENUE. 6.2 WE FIND THAT DURING SEARCH, CERTAIN PAGES RELAT ING TO ITA NO. 627 AND 628/PN/2006 RAMANLAL & MAHENDRA SHAH BLOCK PERIOD: 1-4-1995 TO 11-10-2001 19 M/S. ALIMCHAND TOPANDAS OIL INDUSTRIES LTD., WERE F OUND WITH THE ASSESSEE WHEREIN CERTAIN TRANSACTIONS ON PAGES 5,6 AND 8 WERE FOUND IN THE SEIZED MATERIAL. THE S TAND OF THE ASSESSEE IS THAT HE WAS A DIRECTOR IN THE SAID COMP ANY TILL MARCH 2000 AND THEREFORE, CERTAIN PAPERS WERE FOUND WITH HIM. THESE PAPERS HAVE BEEN PLACED AT PAGES 469 TO 473 OF THE PAPER BOOK. IN THIS REGARD, IT WAS EXPLAINED TO THE ASSESSING OFFICER THAT THESE NOTINGS PERTAINED TO T HE COMPANY AND THEREFORE, THERE WAS NO REASON TO MAKE ANY ADDITION IN THE ASSESSEES HANDS ON THE BASIS OF TH E SAID LOOSE PAPERS. DURING THE ORIGINAL ASSESSMENT PROCE EDINGS, THE ASSESSEE HAD EXPLAINED THE DETAILS OF THE PAPER S FOUND AND THE ASSESSING OFFICER WAS SATISFIED WITH THE SU BMISSIONS PUT FORWARD ON BEHALF OF THE ASSESSEE. IN REVISIONA L PROCEEDING THE CIT HAS STATED THAT THE ASSESSING O FFICER HAS NOT VERIFIED THIS ISSUE AND HENCE HE HELD THAT THE ASSESSMENT ORDER PASSED BY HIM IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. DURIN G THE COURSE OF PROCEEDINGS THE ASSESSEE SUBMITTED THAT IN THE CONFIRMATION LETTER OF SHRI K.V. GOPAL KRISHNA, CHA IRMAN OF THE COMPANY INTER ALIA, HE CONFIRMED THAT THE PAPER S BELONGED TO ITS COMPANY. THE COPY OF THE SAID LET TER IS PLACED AT PAGES 475 TO 476 OF THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. THUS, THE CHAIRMAN OF THE SAID CO MPANY HAS ACCEPTED THAT THE PAPERS BELONGED TO HIM AND THERE IS NO REASON TO MAKE THE ADDITION IN THE HANDS OF THE ASSESSEE. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS FILED ITA NO. 627 AND 628/PN/2006 RAMANLAL & MAHENDRA SHAH BLOCK PERIOD: 1-4-1995 TO 11-10-2001 20 WRITTEN SUBMISSIONS REGARDING SAID PAPERS AND THE S AME WERE PLACED AT PAGES 461 TO 463 OF THE PAPER BOOK F ILED ON BEHALF OF THE ASSESSEE. THE ASSESSEE ALSO SUBMITT ED THE BALANCE SHEET OF THE COMPANY TO CO-RELATE THE FIGUR ES APPEARING ON THE SEIZED PAPERS WHICH HAVE BEEN PLAC ED AT PAGES 477 TO 480 OF THE PAPER BOOK. DURING THE COUR SE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE EXPLAINED CERT AIN ENTRIES WHICH WERE PERTAINED TO THE SAID COMPANY AM OUNTING TO RS. 6,68,316/- AS NOTED ON THE SAID PAGE. THE SAID AMOUNT IS GIVEN BY CHEQUE BY RAJASHREE HOTELIERS PV T. LTD. TO THE SAID COMPANY. THE COPY OF THE BANK ACCOUNT IS PLACED ON PAGE 481 OF THE PAPER BOOK FILED ON BEHALF OF TH E ASSESSEE. IT SHOWS THAT THE ASSESSING OFFICER HAS VERIFIED THIS ISSUE AND ANALYZED IN DETAIL AND ACCEPTED TH E CLAIM OF THE ASSESSEE. AGREEING TO CONTENTION RAISED ON BEH ALF OF THE ASSESSEE, WE HOLD THAT THE CIT WAS NOT JUSTIFIED I N REVISING THE ORDER ON THIS ISSUE BY INVOKING PROVISIONS U/S 263 OF THE ACT. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALL OWED. ITA NO. 628/PN/2006 IN THE CASE OF MAHENDRAKUMAR J. SHAH 7. THE GROUNDS RAISED IN THIS APPEAL READ AS UNDER: 1 ] THE LEARNED CIT ERRED IN CANCELLING THE ASSE SSMENT. ORDER ALLEGING THAT IT IS ERRONEOUS AND PREJUDICIAL TO THE REVENUE ON VARIOUS ISSUES STATING THAT THESE ISSUES WERE NOT EXAMINED BY THE A.O. AT THE TIME OF ASSESSMENT. 2] THE LEARNED CIT ERRED IN HOLDING THAT THE A.O. DID NOT EXAMINE THE FOLLOWING ISSUES WHILE MAKING AN ASSESSMENT AND THE ADDITIONS WERE WARRANTED ON THOS E ISSUES, I. INTRODUCTION OF RS. 67,15,000/- IN THE BOOKS OF THE ASSESSEE FROM M/S. JUPITER COMMERCIAL CORPORATION. II. CASH BROUGHT IN BY THE ASSESSEE FROM ADONI TO PUNE ITA NO. 627 AND 628/PN/2006 RAMANLAL & MAHENDRA SHAH BLOCK PERIOD: 1-4-1995 TO 11-10-2001 21 AND TAKEN BACK. 3] THE LEARNED CIT FAILED TO APPRECIATE THAT A. 'THE ISSUES' ON WHICH HE CONSIDERED THE ASSESSMENT ORDER ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE WERE CONSIDERED BY THE A.O DURING THE COURS E OF BLOCK ASSESSMENT PROCEEDINGS AFTER EXAMINING THE FACTS OF THE CASE AND THE SUBMISSIONS OF THE ASSESS EE THEREON AND HENCE, THE ASSESSMENT ORDER SHOULD NOT HAVE BEEN CONSIDERED ERRONEOUS AND PREJUDICIAL TO T HE INTEREST OF THE REVENUE. B. THE ADDITIONS ON 'THE ISSUES' RAISED BY THE CIT WER E BEYOND THE SCOPE OF BLOCK ASSESSMENT. AS THE MATERI AL FACTS IN REGARD THERETO WERE ALREADY DISCLOSED BY T HE ASSESSEE / THE CONNECTED PERSON BEFORE THE SEARCH T O THE DEPT. IN THE RETURNS FILED AND ENTRIES RECORDED IN REGULAR BOOKS. HENCE, THE ASSESSMENT ORDER FOR THE BLOCK PERIOD COULD NOT BE CONSIDERED AS ERRONEOUS A ND PREJUDICIAL TO THE INTEREST OF THE REVENUE. C. JUST BECAUSE THE A.O. HAS DISCUSSED CERTAIN ISSUES IN THE ASSESSMENT ORDER FOR THE BLOCK PERIOD BUT DID N OT MAKE ADDITIONS RELATING THERETO AS THEY WERE NOT WARRANTED IN THE ASSESSMENT U/S 158BC( C), DID NOT RESULT IN THE ERRONEOUS ASSESSMENT ORDER WHICH COUL D BE CONSIDERED PREJUDICIAL TO THE INTEREST OF THE REVENUE. 4] THE REASONS MENTIONED BY THE LEARNED CIT IN T HE NOTICE U/S 263 DID NOT JUSTIFY HIS DECISION THAT TH E ASSESSMENT ORDER WAS ERRONEOUS AND PREJUDICIAL TO T HE REVENUE. APPELLANT, THEREFORE, PRAYS FOR THE CANCEL LATION OF THE ORDER U/S 263. 5] WITHOUT PREJUDICE, THE LEARNED CIT WAS NOT JUST IFIED IN CANCELLING THE ENTIRE ASSESSMENT ORDER WHEN HE CONSIDERED THE ORDER AS ERRONEOUS ONLY ON A FEW ISS UES. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR DELETE ANY OF THE ABOVE GROUNDS OF APPEAL. 8. THE RELEVANT FACTS ARE THAT THE ASSESSEE IS A PROPRIETOR OF MAHESHWARI FINANCIERS. THERE WAS A SEARCH CONDUCTED ON THE ASSESSEE ON 11-10-2001. IN THE BLOCK RETURN, THE ASSESSEE DECLARED UNDISCLOSED INCOME OF RS. 2,00,000/-. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S 158BC(C) BY DETERMININ G THE UNDISCLOSED INCOME AT RS. 22,63,247/-. ITA NO. 627 AND 628/PN/2006 RAMANLAL & MAHENDRA SHAH BLOCK PERIOD: 1-4-1995 TO 11-10-2001 22 SUBSEQUENTLY, THE CIT INVOKED JURISDICTION U/S 263 OF THE ACT AND DIRECTED THE ASSESSING OFFICER TO VERIF Y CERTAIN ITEMS AND COMPLETE THE ASSESSMENT. THE SAM E HAS BEEN OPPOSED BY THE ASSESSEE BEFORE US. 9 IN FACT, CIT DIRECTED THE ASSESSING OFFICER TO EXAMINE THE FOLLOWING ISSUES AFRESH: I) INTRODUCTION OF RS. 69,39,732/- IN THE BOOKS OF THE ASSESSEE FROM M/S. JCC II) CASH BROUGHT IN BY THE ASSESSEE FROM ADONI TO PUNE AND TAKEN BACK. FIRST ISSUE IS WITH REGARDS TO INTRODUCTION OF FUN DS IN THE BOOKS OF THE ASSESSEE FROM JCC THE RELEVANT FACTS ARE THAT THE ASSESSEE HAD CLAIMED TO HAVE RECEIVED RS. 67,15,000/- FROM JCC DURING THE BLOCK PERIOD PRIOR TO SEARCH WHICH WAS PROPERLY RECORDED BY THE ASSESSEE IN THE BOOKS. IN THE ORIGINAL ASSESSMENT PROCEEDINGS, THE ASSESSEE EXPLAINED THE SOURCES FROM WHICH CASH WAS GIVEN BY JCC AND THE ASSESSING OFFICER HAD ACCEPTED THE SAME AND DID NOT MAKE ANY ADDITION. M/S. JCC IS A PARTNERSHIP FIRM ASSESSED AT BANGALORE WHEREIN THE ASSESSEE IS A PARTNER. THE CIT HAS DISCUSSED THIS I SSUE FROM PATES 13 TO 40 OF HIS ORDER. ACCORDING TO HIM , THE CASH HAS BEEN SHOWN AS RECEIVED FROM JCC IN THE BOO KS OF THE ASSESSEE ONLY WHEN THERE IS INSUFFICIENT CAS H BALANCE IN THE BOOKS OF THE ASSESSEE. THE CIT HAS STATED THAT THE ASSESSING OFFICER HAS NOT APPLIED H ER MIND ON THE ISSUE AND IGNORED CERTAIN FACTUAL ASPEC TS ITA NO. 627 AND 628/PN/2006 RAMANLAL & MAHENDRA SHAH BLOCK PERIOD: 1-4-1995 TO 11-10-2001 23 AND HENCE HE HAS DIRECTED THE ASSESSING OFFICER TO CONSIDER THE ISSUE AFRESH. 9.1 THE STAND OF THE ASSESSEE WAS THAT THE CIT FAILED TO APPRECIATE THAT NO ADDITION CAN BE MADE I N RESPECT OF THE AMOUNT RECEIVED FROM JCC IN THE BLOC K ASSESSMENT. THE AMOUNT RECEIVED FROM JCC WAS DULY REFLECTED IN THE REGULAR BOOKS PRIOR TO SEARCH AND NO INCRIMINATING MATERIAL WAS FOUND DURING SEARCH TO WARRANT ANY ADDITION. FURTHER, THE TRANSACTION WIT H JCC WAS QUESTIONED BY THE ASSESSING OFFICER IN THE ORIGINAL ASSESSMENT VIDE LETTER DATED 8-7-2003 PLAC ED AT PAGES 23 TO 340 OF THE PAPER BOOK FILED ON BEHALF O F THE ASSESSEE. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAD DULY EXPLAINED THE SAME TO THE ASSESSI NG OFFICER ALONG WITH NECESSARY EVIDENCES PLACED AT PA GES 165 TO 167 OF THE PAPER BOOK. FURTHER, IN THE COUR SE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAD PRODUCED A LL RECORDS, DOCUMENTS, ETC. TO EXPLAIN THE CASH RECEIV ED FROM JCC PLACED AT PAGES 31 TO 164 OF THE PAPER BOO KS). THE COPY OF ORDER SHEET IS PLACED AT PAGES 17 TO 22 OF THE PAPER BOOK FROM WHICH IT WAS CLEAR THAT THE ISS UE OF CASH RECEIVED FROM JCC IS CLEARLY VERIFIED BY THE ASSESSING OFFICER. AFTER TAKING INTO CONSIDERATION THE SUBMISSIONS MADE ON BEHALF OF THE ASSESSEE, THE ASSESSING OFFICER ACCEPTED THE CLAIM OF THE ASSESSE E AND NO ADDITION WAS MADE. THE RELEVANT OFFICE NOTE OF THE ITA NO. 627 AND 628/PN/2006 RAMANLAL & MAHENDRA SHAH BLOCK PERIOD: 1-4-1995 TO 11-10-2001 24 ASSESSING OFFICER IN RESPECT OF THE BLOCK ASSESSMEN T ORDER OF RAMANLAL SHAH WHEREIN THE FACTS OF THE ASSESSEES CASE ARE MENTIONED ON PAGES 237 TO 239 O F THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. ACCORDINGLY, IT WAS SUBMITTED THAT THE ASSESSING OF FICER HAS VERIFIED THE ISSUE OF CASH RECEIVED FROM JCC IN DETAIL AND ACCEPTED THE CLAIM OF THE ASSESSEE. IT WAS THEREFORE, SUBMITTED THAT THE CIT HAD NO JURISDICTI ON TO INVOKE THE PROVISIONS OF SECTION 263 OF THE ACT ON THIS ISSUE SINCE THE ASSESSING OFFICER HAD DULY VERIFIED THIS ISSUE IN THE ASSESSMENT PROCEEDINGS. FURTHER, NOTH ING INCRIMINATING WAS FOUND DURING THE SEARCH ACTION TO INDICATE THAT THE ENTRIES ARE BOGUS. 9.2 AFTER GOING THROUGH THE RIVAL SUBMISSIONS AND MATERIAL ON RECORD WE FIND THAT THE ASSESSEE HAS RECEIVED CE RTAIN AMOUNTS FROM JCC WHICH WAS CLAIMED TO BE RECEIVED P RIOR TO SEARCH AND SEIZURE. IN THE ORIGINAL ASSESSMENT THE ASSESSEE HAS EXPLAINED THE SOURCE FROM WHICH CASH WAS GIVEN BY JCC AND A.O. HAS ACCEPTED THE SAME. THE ASSESSEE HAS RECEIVED AMOUNT FROM JCC, WHO IS ASSESSED AT BANGALORE AND ASSESSEE IS ONE OF THE PARTNERS. THIS WAS DONE TO MAKE OUT DEFICIENCY TO THE ASSESSEE FIRM. ACCORDING TO T HE CIT, THE ASSESSING OFFICER HAD NOT APPLIED HIS MIND ON THE I SSUE AND IGNORED THE SOME ON FACTUAL ASPECT. IN FACT ACCORD ING TO CIT ASSESSING OFFICER HAS LOOKED INTO THE MATTER BUT HA S NOT ANALYZED THE THINGS IN THE WAY IN WHICH THE CIT WAN TED. ITA NO. 627 AND 628/PN/2006 RAMANLAL & MAHENDRA SHAH BLOCK PERIOD: 1-4-1995 TO 11-10-2001 25 ACCORDING TO ASSESSEE, THE TRANSACTION IN QUESTION WAS ASKED BY THE ASSESSING OFFICER IN ORIGINAL ASSESSMENT VID E LETTER DATED 8-7-2003 WHICH WAS PLACED ON PAGES 301 TO 307 OF THE PAPER BOOK. IT WAS FURTHER SUBMITTED THAT NECESSAR Y EVIDENCES ARE REFERRED IN PAGES 217 TO 230 OF THE P APER BOOK FILED ON BEHALF OF THE ASSESSEE. FURTHER, DURING T HE ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS PRODUCED ALL RECORDS, DOCUMENTS TO EXPLAIN THE CASH RECEIVED FRO M JCC AS DETAILED IN PAGES 313 TO 460 OF THE PAPER BOOK FILE D ON BEHALF OF THE ASSESSEE. FURTHER, THE ASSESSEE HAS ALSO MAD E DETAILED SUBMISSIONS BEFORE THE ASSESSING OFFICER VIDE HIS L ETTER DATED 14-8-2003, A COPY OF THE SAME IS PLACED AT PAGES 45 7 TO 460 OF THE PAPER BOOK CLAIMED TO BE CERTIFIED BEFORE TH E ASSESSING OFFICER. THE COPY OF ORDER SHEET ENCLOSED AT PAGE S 211 TO 215 OF THE PAPER BOOK SHOWED THAT THE CASH WAS RECE IVED FROM JCC HAD BEEN VERIFIED BY THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS AND HE HAS ACCEPTED THE SAME AFTER ANALYZING THE EVIDENCES PUT FORWARD ON BEHAL F OF THE ASSESSEE. ACCORDINGLY, THE ORDER OF CIT ON THIS ISS UE BE QUASHED. WHILE ON THEOTHER HAND, THELEARNED DR SUPP ORTED THEORDER OF THE CIT ON THIS ISSUE. 9.3 AFTER GOING THROUGH THE RIVAL SUBMISSIONS AND MATERIAL ON RECORD, WE FIND THAT THE ASSESSING OFFI CER HAS VERIFIED THE ISSUE AND ACCEPTED THE CLAIM OF THE AS SESSEE. IN THIS REGARD CIT WAS NOT JUSTIFIED IN INVOKING THE P ROVISIONS OF SECTION 263 OF THE ACT. IN SIMILAR SET OF CIRCUMST ANCES, WE ITA NO. 627 AND 628/PN/2006 RAMANLAL & MAHENDRA SHAH BLOCK PERIOD: 1-4-1995 TO 11-10-2001 26 HAVE SET ASIDE THE ORDER OF CIT IN THE CASE OF RAMA NLAL SHAH VIDE PARA 3 OF THIS ORDER. FACTS BEING SIMILAR, SO FOLLOWING SAME REASONING, ORDER OF CIT ON THIS ISSUE IS SET A SIDE. 11. THE NEXT ISSUE IS WITHS REGARDS TO CASH BROUGHT IN BY THE ASSESSEE FROM ADONI TO PUNE. THE RELEVANT FA CTS ARE THAT THE ASSESSEE HAD BEEN GIVING LOANS TO BUSI NESS CONCERNS IN PUNE. FOR THAT THE PURPOSE, THE ASSESSE E OPENED BANK ACCOUNT NO. 1728 IN BANK OF INDIA, PUNE . IT WAS EXPLAINED ON BEHALF OF THE THE ASSESSEE THAT HE USED TO SEND THE CASH FROM ADONI TO PUNE FOR DEPOSI TING THE AMOUNT IN THE BANK ACCOUNT. THE ASSESSING OFFI CER IN THE ORIGINAL ASSESSMENT PROCEEDINGS DID NOT ACCE PT THE CONTENTION OF THE ASSESSEE THAT HE USED TO SEND CASH FROM ADONI TO PUNE. AFTER DETAILED VERIFICATION OF THE ISSUE THE ASSESSING OFFICER HELD THAT THE CASH DEPO SITED IN THE SAID BANK ACCOUNT DID NOT PERTAIN TO THE ASS ESSEE BUT BELONGED TO THE PARTIES TO WHOM LOANS WERE ADVANCED BY THE ASSESSEE. ACCORDINGLY, HE DID NOT MAKE ANY ADDITION IN RESPECT OF THE CASH DEPOSITED IN TH E BOOKS OF THE ASSESSEE. THE CIT HELD THAT WHEN THE ASSESSING OFFICER HAS NOT ACCEPTED THE THEORY OF TH E ASSESSEE THAT CASH WAS SENT FROM ADONI TO PUNE, HE SHOULD HAVE MADE THE ADDITION OF THE CASH DEPOSITED IN THE HANDS OF THE ASSESSEE, THUS HE HAS REVISED THE ORDER OF THE ASSESSING OFFICER ON THIS ISSUE. ITA NO. 627 AND 628/PN/2006 RAMANLAL & MAHENDRA SHAH BLOCK PERIOD: 1-4-1995 TO 11-10-2001 27 10.1 THE STAND OF THE ASSESSEE IS THAT THE ADDITION SOUGHT TO BE MADE BY THE CIT IS PURELY ON PRESUMPTI ON AND SURMISES. THE DEPARTMENT DID NOT FIND ANY EVIDENCE THAT THE CASH DEPOSITED IN PUNE ACCOUNT WA S NOT BROUGHT FROM ADONI. THE ASSESSEE SUBMITTED THA T NO INCRIMINATING MATERIAL WAS FOUND AND THEREFORE T HE ADDITION COULD NOT BE MADE IN BLOCK ASSESSMENT. FURTHER, CERTAIN INQUIRIES WERE CONDUCTED PRIOR TO SEARCH AND ALSO A SURVEY ACTION HAD TAKEN PLACE ON 17- 7-1998 WHEREIN THE DEPARTMENT INVESTIGATED THE DEPOSITS IN THE BANK ACCOUNT AND NO ADDITION WAS MA DE IN THE HANDS OF THE ASSESSEE. IN FACT, THE STATEME NT OF THE ASSESSEE WAS ALSO RECORDED IN THE ASSESSMENT PROCEEDINGS AS DETAILED AT PAGE 513 TO 517 OF THE P APER BOOK OF RAMANLAL SHAH. THUS THE DEPARTMENT WAS ALREADY AWARE OF THE CASH DEPOSITS IN THE BANK ACCO UNT AND THEREFORE THE ADDITION WAS OUTSIDE THE PURVIEW OF BLOCK ASSESSMENT. FURTHER, IN THE ORIGINAL ASSESSM ENT, THE ASSESSEE HAD MADE DETAILED SUBMISSIONS AND THE ASSESSING OFFICER ACCEPTED THE CONTENTION OF THE ASSESSEE. THE ASSESSING OFFICER HAD RAISED THIS IS SUE AND A LETTER WAS ISSUED BY HIM AS PER PAGES 241 TO 244 OF THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. THE ASSESSEE HAD MADE DETAILED SUBMISSIONS ON THE SAID ISSUE BEFORE THE ASSESSING OFFICER DURING THE COURS E OF ASSESSMENT PROCEEDINGS AS PER PAGES 201 TO 236 OF T HE PAPER BOOK. THE ASSESSING OFFICER HAD ALSO ASKED T HE ITA NO. 627 AND 628/PN/2006 RAMANLAL & MAHENDRA SHAH BLOCK PERIOD: 1-4-1995 TO 11-10-2001 28 ASSESSEE TO GIVE DETAILS OF THE LOANS GIVEN TO PUNE BASED PARTIES AS PER PAGES 1215 TO 1255 OF THE PAPER BOOK . FURTHER, IT WAS SUBMITTED THAT THE DEPARTMENT HAS ISSUED NOTICES U/S 158BD TO VARIOUS PERSONS TO WHOM THE ASSESSEE HAD GIVEN LOANS OUT OF THE CASH DEPOSI TED IN THE SAID BANK ACCOUNT. THE DEPARTMENT HAD TAKEN CONTRARY STANDS IN THOSE CASES WHEREIN THE AMOUNT DEPOSITED IN THE SAID BANK ACCOUNT WAS TAXED AS INC OME OF THE PERSON TO WHOM THE LOAN IS GIVEN BY THE ASSE SSEE. ACCORDINGLY, IN VIEW OF THE DEPARTMENTS STAND IN T HOSE CASES, THE ADDITION IN THIS CASE IS NOT JUSTIFIED I N THE PRESENT CASE. OUR ATTENTION WAS INVITED TO THE SATISFACTION NOTE FORWARDED BY THE ASSESSING OFFICE R IN RESPECT OF THE OTHER PERSONS AS PER PAGES 317 TO 33 6 OF THE PAPER BOOK. RELIANCE WAS ALSO PLACED ON THE DECISION OF THE TRIBUNAL IN THE CASE OF ATUL BHAGAT (SUPRA). FURTHER, THE ASSESSING OFFICER HAD WRITTE N A LETTER TO CHIEF CIT REGARDING THIS ISSUE AND REQUES TED HIM TO ISSUE NECESSARY DIRECTIONS FOR OPENING THE C ASES OF THE OTHER PERSONS AS PER PAGES 300-300A OF THE P APER BOOK FILED IN THE CASE OF RAMANLAL SHA. IT WAS THE REFORE, SUBMITTED THAT THE ISSUE WAS DULY EXAMINED BY THE ASSESSING OFFICER AND HENCE THE CIT WAS NOT JUSTIFI ED IN INVOKING THE JURISDICTION U/S 263 OF THE ACT. ON TH E OTHER HAND, LEARNED DR SUPPORTED THE ORDER OF THE C IT. ITA NO. 627 AND 628/PN/2006 RAMANLAL & MAHENDRA SHAH BLOCK PERIOD: 1-4-1995 TO 11-10-2001 29 10.1. AFTER GOING THROUGH RIVAL SUBMISSIONS ANDMATERIALON RECORD, WE FIND THAT IN THE ORIGINAL ASSESSMENT THE ASSESSEE HAS CLAIMED TO HAVE RECEIVE D THE AMOUNT AT PUNE FROM ADONI AND THE SAME WAS CLAIMED TO BE BROUGHT FORWARD DEPOSITING IN BANK ACCOUNT BEARIN G NO. 1740 OF BANK OF INDIA, PUNE. ACCORDINGLY HE DI D NOT MAKE ANY ADDITIONS IN RESPECT OF CASH DEPOSITED IN BOOK S OF ASSESSEE. IT WAS SHOWN THAT THIS ISSUE WAS DISCU SSED AND DECIDED BY THE ASSESSING OFFICER IN THE ORIGINAL AS SESSMENT PROCEEDINGS. HOWEVER, THE CIT DID NOT ACCEPT TH E THEORY THAT THE CASH WAS SENT FROM ADONI TO PUNE AND THE ASSESSING OFFICER SHOULD HAVE MADE THE ADDITION OF CASH DEPOSITED IN THE HANDS OF THE ASSESSEE. THE REVENU E HAS NOT FOUND ANY EVIDENCE THAT THE CASH WAS NOT BROUGHT F ROM ADONI. CERTAIN INQUIRIES WERE MADE IN THIS REGARD A ND NO ADDITION WAS MADE IN THE HANDS OF THE ASSESSEE. IN FACT, THE STATEMENT OF THE ASSESSEE WAS ALSO RECORDED DURING THE ASSESSMENT PROCEEDINGS WHICH IS PLACED ON PAGES 51 3 TO 517 OF THE PAPER BOOK. SO THE CIT WAS NOT JUSTIFIED IN INVOKING THE PROVISION OF SECTION 263 OF THE ISSUE. THE DEPARTMENT HAS ALSO ISSUED NOTICES U/S 158BD TO VAR IOUS PERSONS TO WHOM THE ASSESSEE HAD GIVEN LOANS OUT OF THE CASH DEPOSITED IN THE SAID BANK ACCOUNT. THE DEPAR TMENT HAS TAKEN CONTRARY STANDS IN THOSE CASES WHEREIN TH E AMOUNT DEPOSITED IN THE SAID BANK ACCOUNT IS TAXED AS INCOME OF THE PERSONS TO WHOM THE LOANS WAS CLAIME D TO BE GIVEN BY THE ASSESSEE. THUS THE ASSESSING OFFICE R ITA NO. 627 AND 628/PN/2006 RAMANLAL & MAHENDRA SHAH BLOCK PERIOD: 1-4-1995 TO 11-10-2001 30 ANALYZED THE SAME AT PARTICULAR STAGE. THE STATEME NT OF THE ASSESSEE WAS RECORDED AND DETAILED INVESTIGATION WA S MADE BY THE ASSESSING OFFICER IN ASSESSMENT PROCEEDINGS AND NO ADDITION WAS MADE AS REFERRED IN PAGES 513 TO 517 O F THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. FURTHE R, THE ASSESSING OFFICER HAD WRITTEN A LETTER TO THE CHIEF CIT IN THIS REGARD AND REQUESTED TO ISSUE NECESSARY DIRECTNESS FOR REOPENING THE CASES OF THE OTHER PERSONS AS REFERRE D IN PAGES 300-300A OF THE PAPER BOOK. WE HAVE DECIDED SIMILAR ISSUE IN FAVOUR OF ASSESSEE IN THE CASE OF RAMANLAL SHAH VIDE PARA 4 OF THIS ORDER. FACTS ARE ALSO MOSTLY SIMILAR. SO, FOLLOWING SAME REASONING, WE HOLD THAT THE ISSUE WAS EXAMIN ED BY THE ASSESSING OFFICER AND HENCE THE CIT WAS NOT JU STIFIED IN INVOKING THE PROVISIONS OF SECTION 263 ON THIS ISS UE. ACCORDINGLY THIS APPEAL IS ALSO ALLOWED. 11. IN THE RESULT, BOTH THE APPEALS ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF JUNE 2011. SD/- SD/- ( G.S. PANNU ) ACCOUNTANT MEMBER ( SHAILENDRA KUMAR YADAV) JUDICIAL MEMBER PUNE: DATED: 30 TH JUNE 2011 ANKAM COPY OF THE ORDER IS FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. THE CIT, - CENTRAL PUNE 4. THE D.R, A BENCH, PUNE TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, PUNE BENCHES, PUNE ITA NO. 627 AND 628/PN/2006 RAMANLAL & MAHENDRA SHAH BLOCK PERIOD: 1-4-1995 TO 11-10-2001 31