Dy.CIT, Circle, Nashik, Nashik V. M/s. Tarachand Chhogmal Lunkad, Nashik

ITA 832/PUN/2002

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 49908 (ITAT-PUNE)
• Duration Of Justice: 9 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 03-06-2002
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUNIL PATHAK RESPON
• Keywords: Bogus purchase; Unexplained cash credit; Business income; Search and seizure; Principle of natural justice; Corroborative evidences; Block assessment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JM AND SHRI D. KARUNAKARA RAO, AM. I.T.A. NO. 832/PN/2002 BLOCK PERIOD: 1990-91 TO 1999-00 DY. CIT CIR. I, NASIK .. APPELLANT VS. M/S. TARACHAND CHHHOGAMAL LUNKAD PROP. TARACHAND CHHOGMAL LUNKAD ONION SHOP, AT POST DEOLA, NASIK PAN APPLIED FOR .. RESPONDENT I.T.A. NO. 831/PN/2002 BLOCK PERIOD: 1990-91 TO 1999-00 DY. CIT CIR. I, NASIK .. APPELLANT VS. SMT. KUSUMBAI GHEVARCHAND LUNKAD PROP. NILESH ADAT SHOP AT POST DEOLA, NASIK PAN APPLIED FOR .. RESPONDENT ASSESSEES BY: SHRI SUNIL PATHAK RESPONDENT BY: SHRI HARESHWAR SHARMA ORDER PER SHAILNDRA KUMAR YADAV, JM ITA NO. 831 AND 832/PN/2002 LUNKAD GROUP BLOCK PERIOD: 1990-91 TO 1999-00 BOTH THESE APPEALS ARISE OUT OF RESPECTIVE ORDERS OF THE CIT(A)-II NASIK DATED 13-3-2002 FOR BLOCK PERIOD 19 90-91 TO 1999-00 RAISING COMMON ISSUES. THEY WERE HEARD TOGE THER AND ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORD ER FOR THE SAKE OF CONVENIENCE. ITA NO. 832/PN/2002 IN THE CASE OF TARACHAND CHHOGMAL LUNKAD 2. THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINS T THE ORDER OF THE CIT(A) AGAINST THE DELETION OF ADDITIO N OF RS. 65,92,313/- ON ACCOUNT OF BOGUS PURCHASES BY WAY OF DESCRIPTIVE GROUNDS WHICH READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE CIT(A) ERRED IN DELETING THE ADDITION MADE OF RS. 65,92,313/- ON ACCOUNT OF BOGUS PURCHASES CLAIMED B Y ASSESSEE TO REDUCE HIS PROFITS/TAXABLE INCOME. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, CIT(A) ERRED IN HOLDING THAT NON-SUPPLY OF STATEMEN TS RECORDED U/S 132(4) TO THE APPELLANT AND UTILIZING THE SAME IN ASSESSMENT PROCEEDINGS CONSTITUTED GROSS IRREGULARITY TENDERING THE NATURE OF THE ASSESSMENT ORDER AS INVALID. THE CIT(A) FAILED TO APPRECIATE THE FACT THAT THE ASSESSEE WAS PROVIDED WITH COPY OF THE STATEMENTS ON 10-3-2000 I.E. WELL BEFORE FINALIZATI ON OF THE ASSESSMENT, HENCE, HE HAD THE STATEMENT WITH HI M WHEN IT WAS BEING UTILIZED AGAINST HIM. THE ABOVE CONCLUSION OF CIT(A) IS THEREFORE INCORRECT. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E CIT(A) ERRED IN RELYING ON AFFIDAVITS WHICH ARE CLA IMED TO HAVE BEEN FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. IN FACT, NO SUCH AFFIDAVITS WERE FILE D BEFORE ITA NO. 831 AND 832/PN/2002 LUNKAD GROUP BLOCK PERIOD: 1990-91 TO 1999-00 THE A.O. AS FRESH EVIDENCE WAS SUBMITTED BY ASSESS EE, THE A.O WAS TO BE GIVEN AN OPPORTUNITY TO ASCERTAIN THEIR GENUINITY. 4) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE CIT(A) FAILED TO GIVE OPPORTUNITY TO THE A.O TO PUT FORTH HIS EXPLANATION ON THE ADDITIONS MADE. COPY OF THE SUBMISSION RUNNING INTO 214 PAGES MADE BY THE ASSESSEE BEFORE THE CIT(A) WAS NOT PROVIDED TO THE A.O NOR WAS OPPORTUNITY GIVEN TO THE A.O TO REBUT THE SUBMISSION MADE BEFORE THE CIT(A). THUS DECISION W AS TAKEN BY THE CIT(A) ARBITRARILY AFTER CONSIDERING T HE SUBMISSION OF THE ASSESSEE ONLY. 5) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E CIT(A) HAS NOT DISPROVED THE OBSERVATION OF THE A.O IN THE ASSESSMENT ORDER LEADING TO THE ADDITIONS. 6) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E CIT(A) FAILED TO APPRECIATE THE FACT THAT STATEMENT U/S 132(4) IS RECORDED UNDER OATH AND THE ASSESSEE HAS DISCLOSED THE TRUTH WHICH WILL NEVER CHANGE WHATEVE R THE CIRCUMSTANCE. SHELTER TAKEN BY THE ASSESSEE THAT TH E DISCLOSURE WAS NOT GIVEN IN PROPER STATE OF MIND AN D WAS GIVEN UNDER PRESSURE IS, THEREFORE, ONLY AN AFT ER THOUGHT. TRUTH WILL ALWAYS REMAIN TRUTH. NO QUESTI ON OF CONFUSING TRUTH ARISES. 7) THE ORDER OF THE CIT(A) MAY THEREFORE BE VACATED AND THAT OF THE A.O BE RESTORED. 3. THE ASSESSEE IS A PACCA ADATIYA TRADING IN ONION , SWEET POTATOES ETC AT DEOLA, DIST. NASIK. SEARCH ACTION TOOK PLACE U/S 132(1) OF THE ACT ON LUNKAD GROUP OF CASES ON 2 9-7- 1999. STATEMENT U/S 132(4) OF THE ACT BY KARTA OF HUF SHRI AMOLAKCHAND T. LUNKAD WAS RECORDED WHEREIN HE HAS DECLARED RS. 60.00 LAKHS AS ADDITIONAL INCOME FOR THE BLOCK ITA NO. 831 AND 832/PN/2002 LUNKAD GROUP BLOCK PERIOD: 1990-91 TO 1999-00 PERIOD. HOWEVER, WHILE FILING THE RETURN ON 2-3-20 00 ONLY NIL: INCOME HAS BEEN DECLARED. THE A.O AFTER SCRUT INIZING THE SEIZED MATERIAL AN AFTER GIVING AN OPPORTUNITY OF HEARING ADDED RS. 63,69,406/- AS UNDISCLOSED INCOME IN THE HANDS OF THE ASSESSEE FOR ASSESSMENT YEAR 1999-2000 AND RS. 2,22,907/- AS UNDISCLOSED INCOME FOR THE BROKEN PER IOD I.E. 1-4-1999 TO 29-7-1999. IN APPEAL, THE CIT(A) DELET ED THE SAME BY OBSERVING AS UNDER: I HAVE CONSIDERED THE SUBMISSIONS OF THE LEARNED COUNSEL OF THE APPELLANT AND ALSO GONE THROUGH THE VARIOUS STATEMENTS AND ALSO THE CASE LAW. NON-SUPP LY OF THE STATEMENTS WHICH ARE RECORDED UNDER SECTION 132(4) TO THE APPELLANT, HOWEVER, UTILIZING THE SAM E IN THE ASSESSMENT PROCEEDINGS CONSTITUTES A GROSS IRREGULARITY RENDERING THE NATURE OF THE ASSESSMENT ORDER AS INVALID. FURTHER, THE CONTENTS OF THE AFF IDAVIT WHICH HAVE BEEN FILED IN THE COURSE OF THE ASSESSME NT PROCEEDINGS HAVE ALSO BEEN REJECTED BY THE A.O AND HAS TAKEN AN ADVERSE VIEW AGAINST THE APPELLANT WITHOUT EXAMINING THE DEPONENTS. THE STATEMENTS WHICH ARE PURPORTED TO HAVE BEEN RECORDED IN THE COURSE OF SE ARCH AND SEIZURE BUT WITHOUT OBTAINING THE SIGNATURE OF THE PANCHAYAT/WITNESS ALSO LOOSE THEIR EVIDENTIAL VALUE SO AS TO BE USED CONCLUSIVELY AGAINST THE APPELLANT. T HE STATEMENTS ON THE BASIS OF WHICH THE A.O HAS MADE T HE ADDITION HAVE ALSO BEEN RETRACTED IMMEDIATELY BY TH E APPELLANT IS A PAKKA ADATIYA, THE PURCHASES HAVE BE EN MADE BY THE APPELLANT FROM KACHHA ADATIYA. SUCH PURCHASES ARE FOUND RECORDED IN THE SEIZED BOOKS OF ACCOUNTS OF THE APPELLANT AS WELL AS IN THE BOOKS O F KACHHA ADATIYA. THE PAYMENTS MADE BY THE APPELLANT TO THESE KACHHA ADATIYA HAVE NOT BEEN DOUBTED BY THE A .O. THE DETAILS WERE ALREADY PUT BEFORE THE A.O IN RESP ECT OF PURCHASES WHICH ARE NOT RECORDED IN APMC THAT HAS BEEN EXPLAINED BY THE APPELLANT BY WAY OF SHIVAR ITA NO. 831 AND 832/PN/2002 LUNKAD GROUP BLOCK PERIOD: 1990-91 TO 1999-00 PURCHASES. THE A.O HAS ACCEPTED THE ENTIRE SALES DISCLOSED BY THE APPELLANT, HOW THE PURCHASES ON WH ICH THESE SALES ARE MADE CAN BE REJECTED BY THE A.O. S INCE THE PURCHASES ARE FOUND RECORDED IN THE SEIZED BOOK S OF ACCOUNTS, IT CANNOT BE CONSIDERED TO BE UNDISCLOSED INCOME WITHIN THE MEANING OF CHAPTER XIVB OF THE AC T. THE ADDITION MADE BY THE A.O AT RS. 63,69,406/- AS UNDISCLOSED INCOME ON ACCOUNT OF BOGUS PURCHASES IS THEREFORE, DELETED. AS REGARDS THE ADDITION OF RS. 2,22,907/- AS UNDISC LOSED INCOME FOR THE BROKEN PERIOD SINCE THE PURCHASES HA VE BEEN FOUND RECORDED IN THE SEIZED BOOKS OF ACCOUNTS , IT CANNOT BE CONSIDERED AS UNDISCLOSED INCOME TO BE TH E PURCHASES OF BLOCK ASSESSMENT AGAINST ABOVE AND THE SAME IS THEREFORE, DELETED. 4. BEFORE US, THE LEARNED DR SUBMITTED THAT ADDITIO N OF RS. 65,92,313/- WAS MADE BY THE A.O ON ACCOUNT OF BOGUS PURCHASES BY THE ASSESSEE TO REDUCE THE BOOK PROFIT /TAXABLE INCOME. THE CIT(A) ERRED IN HOLDING THAT NON-SUPPLY OF STATEMENTS RECORDED U/S 132(4) OF THE ACT AND UTILI ZING THE SAME IN ASSESSMENT PROCEEDINGS CONSTITUTED GROSS IRREGULARITY RENDERING THE NATURE OF ASSESSMENT AS INVALID. THE CIT(A) FAILED TO APPRECIATE THAT THE ASSESSEE W AS PROVIDED WITH COPY OF THE STATEMENTS ON 10-3-2000 I .E. WELL BEFORE FINALIZATION OF THE ASSESSMENT, HENCE HE HAD THE STATEMENT WITH HIM WHEN IT WAS BEING UTILIZED AGAIN ST HIM. THE ABOVE CONCLUSION OF THE CIT(A) IS NOT BASED ON FACTS AND THEREFORE, NOT JUSTIFIED. THE CIT(A) ERRED IN RELY ING ON ITA NO. 831 AND 832/PN/2002 LUNKAD GROUP BLOCK PERIOD: 1990-91 TO 1999-00 AFFIDAVITS WHICH WAS CLAIMED TO HAVE BEEN FILED DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS. IN FACT, NO SUCH AFFIDAVITS WERE FILED BEFORE THE ASSESSING OFFICER. FRESH EVI DENCE WAS SUBMITTED BY THE ASSESSEE FOR WHICH THE ASSESSING O FFICER WAS NOT GIVEN AN OPPORTUNITY. THE CIT(A) FAILED TO GIVEN AN OPPORTUNITY TO THE A.O TO PUT FORWARD HIS EXPLANATI ON ON THE ADDITIONS MADE. MOREOVER, THE ORDER OF THE CIT(A) I S NON- SPEAKING ONE AND IT IS GENERAL. ON THE OTHER HAND, THE LEARNED AR SUPPORTED THE ORDER OF THE CIT(A). ACCO RDING TO THE LEARNED AR, THE ASSESSING OFFICER HAS ERRED IN LAW AS WELL AS ON FACTS WHILE TREATING THE PURCHASES MADE TO KA CHHA ADATIYA AS BOGUS AND NOT TAKING THE WHOLE BASIS OF ALLEGED ACCEPTANCE OF UNDISCLOSED INCOME WITHOUT APPRECIATI NG THE FACT THAT THE STATEMENT STOOD UNCORROBORATED. THE ASSESSING OFFICER FURTHER ERRED IN NOT APPRECIATING THAT ALL PURCHASES MADE BY THE ASSESSEE HAVE BEEN DULY RECORDED IN BOO KS OF ACCOUNT OF ASSESSEE AS WELL AS KACHHA ADATIYA AND H ENCE WERE OUTSIDE THE SCOPE OF UNDISCLOSED INCOME. THE ASSESSING OFFICER FAILED TO APPRECIATE THAT UNLESS PURCHASES ARE MADE, SALES COULD NOT BE EFFECTED. FURTHER, THE ASSESSING OFFICER DID NOT APPRECIATE THAT THE PAYMENT IN RESPECT OF PURCH ASES WERE MADE BY WAY OF ACCOUNT PAYEE CHEQUES. ACCORDINGLY, THE ITA NO. 831 AND 832/PN/2002 LUNKAD GROUP BLOCK PERIOD: 1990-91 TO 1999-00 ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING THE A DDITION AND THE CIT(A) WAS JUSTIFIED IN DELETING THE SAME. 5. AFTER GOING THROUGH THE RIVAL SUBMISSIONS AND TH E MATERIAL ON RECORD WE FIND THAT THE ASSESSEE IS A P ACCA ADATIYA TRADING IN ONIONS AND SWEET POTATOES AT DEO LA. THE ADDITIONS ARE MADE ON THE BASIS OF STATEMENT AS WEL L AS CERTAIN DISCREPANCIES IN BOOKS OF ACCOUNT FOUND DUR ING THE COURSE OF SEARCH. THE ADDITION HAS BEEN MADE ON T HE BASIS OF LOOSE PAPER NO. 1 OF A-31 SHOWING THE NOTING AS SHIVAR KHARDI FROM NILESH ADAT SHOP. THE OTHER ADDITION H AS BEEN MADE ON ACCOUNT OF DIRECT PURCHASES. THE STATEMENT OF TWO FARMERS IS ALSO THE BASIS FOR MAKING SUCH AN ADDITI ON. WHILE DELETING THE ADDITION, THE CIT(A) HAS OBSERVED THAT THE CONTENTS OF THE AFFIDAVIT FILED IN THE COURSE OF AS SESSMENT PROCEEDINGS HAVE BEEN REJECTED BY THE ASSESSING OFF ICER AND HAS TAKEN ADVERSE VIEW AGAINST THE ASSESSEE FOR EXA MINING DEPONENT. THE STATEMENT WHICH WAS PURPORTED TO HAV E BEEN RECORDED IN THE COURSE OF SEARCH AND SEIZURE HAS BE EN MADE BASIS FOR MAKING ADDITION BY THE ASSESSING OFFICER. WE ARE AWARE THAT THE DEPOSITIONS OF THE AFFIDAVIT SHOULD BE REJECTED AFTER CONFRONTING THE CONTENTS OF THE SAME TO THE D EPONENT BUT THAT COULD HAVE BEEN DONE AT THE APPELLATE PROC EEDINGS ITA NO. 831 AND 832/PN/2002 LUNKAD GROUP BLOCK PERIOD: 1990-91 TO 1999-00 BEFORE REACHING TO CERTAIN CONCLUSION. BUT THE SAM E HAS NOT BEEN ATTEMPTED TO HAVE BEEN DONE BY THE CIT(A). SI MILARLY, CIT(A) HAS MADE VARIOUS OBSERVATIONS TO REACH THE CONCLUSION OF DELETION OF ADDITION IN QUESTION BUT DUE OPPORTUNITY OF HEARING TO THE ASSESSING OFFICER IS MISSING AT THE END OF CIT(A) WHICH IS NOT JUSTIFIED. THE CIT(A ) IN GENERAL WAY HAS AGREED TO THE SUBMISSIONS OF THE ASSESSEE B UT IT IS NOT BASED ON DOCUMENTARY EVIDENCE USED AGAINST THE ASSESSEE BY THE ASSESSING OFFICER. TAKING OVERALL VIEW OF THE SITUATION, WE FIND THAT THE CT(A) HAS NOT SUBSTANTI ATED HIS FINDING WITH COGENT MATERIAL IN THIS REGARD. MOREO VER, THE CIT(A) HAS NOT PROVIDED DUE OPPORTUNITY OF HEARING TO THE ASSESSING OFFICER BEFORE APPRECIATING EVIDENCE PUTF OWARD BEFORE HIM. WE ARE OF THE VIEW THAT THE ISSUE NEED S DEEP PROBE INTO THE MATTER. SO IN THE INTEREST OF JUSTI CE, WE SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THE MATTE R TO THE A.O WITH A DIRECTION TO DECIDE THE SAME AS PER FACT AND LAW AFTER PROVIDING DUE OPPORTUNITY OF HEARING TO THE A SSESSEE. SINCE WE ARE RESTORING THE ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR THE REASONS RECORDED ABOVE, WE ARE REFR AINING TO COMMENT ON THE MERITS OF THE ISSUE AT HAND. ITA NO. 831 AND 832/PN/2002 LUNKAD GROUP BLOCK PERIOD: 1990-91 TO 1999-00 ITA NO. 831/PN/2002 IN THE CASE OF SMT KUSUMBAI G. LUNKAD 6. THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINS T THE ORDER OF THE CIT(A)II NASIK DATED 13-3-2002 AGAINST THE DELETION OF ADDITION OF RS. 10,07,715/- ON ACCOUNT OF UNEXPLAINED CASH CREDITS. THE ASSESSEE IS RUNNING A BUSINESS OF KACHHA ADATIYA UNDER THE NAME AND STYLE OF MS. NILESH GEVARCHAND LUNKAD. SEARCH TOOK PLACE IN GRO UP OF ASSESSEE ON 29-7-1999. BLOCK RETURN WAS FILED DISC LOSING INCOME OF RS. 14,500/-. ASSESSMENT WAS COMPLETING MAKING AN ADDITION OF RS. 10,07,715/- WHICH WAS DELETED BY THE CIT(A) IN APPEAL BY OBSERVING AS UNDER: I HAVE CONSIDERED THE SUBMISSIONS OF LEARNED COUNS EL AND GONE THROUGH THE ASSESSMENT ORDER. THE POINT I N DISPUTE IS REGARDING THE ADDITION OF RS. 10,07,715/ - WHICH HAS BEEN MADE BY A.O OUT OF SUNDRY CREDITORS OF RS. 79,89,944/- AS ON 31-3-1998. THIS AMOUNT OF RS . 79,89,944/- HAS BEEN FOUND REFLECTED IN THE BALANCE SHEET WHICH HAS BEEN FILED ALONG WITH RETURN ALONG WITH LIST OF SUCH CREDITORS PRIOR TO THE DATE OF SEARCH. BESIDES THE STATEMENT U/S 132(4) AND U/S 131, NO EVIDENCE OF WHATSOEVER HAS BEEN FOUND IN THE COURSE OF SEARCH THAT ANY O THE SUNDRY CREDITORS SHOWN BY APPELLANT IN HIS BALANCE SHEET ON 31-3-1998 WAS BOG US ON THE OTHER HAND SUCH SUNDRY CREDITORS ARE FOUND RECORDED IN THE REGULAR BOOKS OF ACCOUNT WHICH HAVE BEEN FOUND AND SEIZED IN THE COURSE OF SEARCH. THE PURCHASES MADE BY APPELLANT FROM THESE FARMERS WHO ARE SHOWN AS CREDITORS ARE ALSO VERIFIABLE. THE CONFIRMATIONS FROM FARMERS HAVE ALREADY BEEN FILED BEFORE THE ASSESSING OFFICER. THE ONLY BASIS WITH THE ASSESSING OFFICER FOR MAKING THIS ADDITION OF RS. ITA NO. 831 AND 832/PN/2002 LUNKAD GROUP BLOCK PERIOD: 1990-91 TO 1999-00 10,07,715/- HAS BEEN THE VARIOUS STATEMENTS WHICH HAVE BEEN RECORDED IN RESPECT OF FAMILY MEMBERS IN THE COURSE OF SEARCH. AS DISCUSSED ABOVE, THE CIRCUMSTANCES LEADING TO THE DECLARATION ARE SUCH W HICH THAT THE PERSONS WERE UNDER TREMENDOUS MENTAL PRESSURE AND EXHAUSTED OTHERWISE ALSO STATEMENTS OR ADMISSION HAVE GOT NO EVIDENTIAL VALUE UNLESS SUPPO RTED BY CORROBORATIVE EVIDENCES. THE APPELLANT HAS ALR EADY RETRACTED THE DECLARATION IMMEDIATELY AND FURTHER S ENT LETTERS AFTER RECEIVING THE COPIES OF THE STATEMENT S. FURTHER, THESE AMOUNTS OF RS 79,89,944/- ARE FOUND RECORDED IN THE SEIZED REGULAR BOOKS OF ACCOUNTS. THE INCOME TAX RETURN ALONG WITH BALANCE SHEET AND THE LIST OF CREDITORS ON 31-3-1998 HAVE ALREADY BEEN FILED B Y THE APPELLANT BEFORE THE DATE OF SEARCH. CONFIRMATION FROM THE FARMERS IN THIS REGARD HAVE ALSO BEEN FILED BEF ORE THE A.O. IN VIEW OF THIS, FOLLOWING THE RATIOS (SUPRA) , I HOLD THAT THE DECLARATION OF UNDISCLOSED INCOME OF RS. 1 0 LAKHS MADE BY THE APPELLANTS FAMILY MEMBERS IN THE COURSE OF SEARCH AND SEIZURE WHICH HAS ALSO BEEN RETRACTED BY THE APPELLANT WAS NOT LIABLE TO BE REL IED UPON BY THE A.O WHEN THE SEIZED BOOKS OF ACCOUNTS REFLECT THAT THIS DECLARATION HAS GOT NO BASIS AND THAT NONE OF THE SUNDRY CREDITORS AMOUNTING TO RS. 79,89,994/- AS ON 31-3-1998 ARE LIABLE TO BE CONSID ERED AS UNDISCLOSED INCOME FOR THE PURPOSES OF BLOCK ASSESSMENT UNDER SECTION 158BC HENCE, ADDITION MADE BY THE A.O OF RS. 10,07,715/- FOR THE A.Y 1998-99 I S NOT JUSTIFIED AND THE SAME IS DELETED. 7. THE ABOVE DECISION OF THE CIT(A) HAS BEEN OPPOSE D BEFORE US. THE STAND OF THE LEARNED DR IS THAT THE CIT(A) WAS NOT JUSTIFIED IN RELYING ON ASSESSEES SUBMISSION THAT THE CREDITORS WERE ALREADY SHOWN IN THE REGULAR RETURN FILED BEFORE THE DATE OF SEARCH WITHOUT APPRECIATING THE FACT THAT ONLY DURING THE COURSE OF SEARCH IT CAME TO LIGHT T HAT THE SAID CREDITORS COULD NOT BE EXPLAINED BY ASSESSEE AND TH EREFORE, ITA NO. 831 AND 832/PN/2002 LUNKAD GROUP BLOCK PERIOD: 1990-91 TO 1999-00 HAD SURRENDERED THE SAME AS CONCEALED INCOME WHILE RECORDING STATEMENT U/S 132(4) OF THE ACT. THE CIT( A) HAS FAILED TO APPRECIATE THAT STATEMENT U/S 132(4) OF T HE ACT WAS RECORDED ON OATH AND THE ASSESSEE HAD DISCLOSED THE TRUTH WHICH HAS NOT BEEN RETRACTED BY COGENT REASONS. TH E CIT(A) FAILED TO PROVIDE AN OPPORTUNITY TO THE ASSESSING O FFICER TO PUT FORTH HIS EXPLANATION ON THE ADDITION IN QUESTI ON. A COPY OF THE SUBMISSION RUNNING INTO 202 PAGES MADE BY TH E ASSESSEE BEFORE THE CIT(A) WERE NOT PROVIDED TO THE ASSESSING OFFICER NOR WAS OPPORTUNITY GIVEN TO THE ASSESSING OFFICER TO REBUT THE SUBMISSION MADE BEFORE THE CIT(A). THIS D ECISION OF THE CIT(A) IS LACKING AN OPPORTUNITY OF HEARING TO THE ASSESSING OFFICER WHICH IS VIOLATION OF THE PRINCIP LES OF NATURAL JUSTICE. ON THE OTHER HAND, THE STAND OF THE LEARNED AR FOR THE ASSESSEE IS THAT THE ASSESSING OFFICER W AS NOT JUSTIFIED IN COMPUTING THE UNDISCLOSED INCOME IN QU ESTION. THE ASSESSING OFFICER MADE AN ADDITION OF RS. 10,07 ,715/- ON ACCOUNT OF ALLEGED BOGUS CREDITORS SOLELY ON ACC OUNT OF UNDISCLOSED BUSINESS INCOME WITHOUT APPRECIATING TH E FACTS THAT THE STATEMENT, IF ANY, STOOD RETRACTED VIDE LE TTER DATED 30-8-1999. ACCORDING TO THE ASSESSEE, THE PAYMENTS WERE MADE TO ALL CREDITORS PRIOR TO SEARCH AND SUCH PAYM ENTS WERE ITA NO. 831 AND 832/PN/2002 LUNKAD GROUP BLOCK PERIOD: 1990-91 TO 1999-00 DULY RECORDED IN THE REGULAR BOOKS OF ACCOUNT DURIN G THE COURSE OF SEARCH. 8. AFTER GOING THROUGH RIVAL SUBMISSIONS AND MATERI AL ON RECORD, WE FIND THAT THE DISPUTE IS WITH REGARDS TO ADDITION OF RS. 10,07,715/- WHICH HAS BEEN MADE BY THE ASSESSIN G OFFICER OUT OF SUNDRY CREDITORS OF RS. 79,89,494/- AS ON 31-3- 1998. THIS AMOUNT OF RS. 79,89,490/- HAS BEEN REFL ECTED IN THE BALANCE SHEET WHICH HAS BEEN FILED ALONG WITH T HE LIST OF SUCH CREDITORS CLAIMED TO BE FILED BEFORE THE DATE OF SEARCH. THE A.O HAS MADE ADDITION ON THE BASIS OF STATEMEN T RECORDED U/S 132(4) OF THE ACT WHILE THE CIT(A) HAS DELETED THE ADDITION ON ACCOUNT OF SUBMISSION THAT CREDITOR S HAVE ALREADY BEEN SHOWN IN THE REGULAR RETURN FILED BEFO RE THE DATE OF SEARCH WITHOUT APPRECIATING THE FACTS THAT DURING THE COURSE OF SEARCH IT CAME TO THE LIGHT THAT SAID CRE DITS COULD NOT BE EXPLAINED BY THE ASSESSEE. THEREFORE, HE SU RRENDERED THE SAME AS CONCEALED INCOME WHILE RECORDING STATEM ENT U/S 132(4) OF THE ACT. THE CIT(A) FAILED TO APPRECIATE THAT THE STATEMENT RECORDED U/S 132(4) RECORDED ON OATH WHER EIN HE HAS DISCLOSED THE INCOME WHICH COULD NOT HAVE BEEN DISCLOSED BUT FOR SEARCH, SAME WAS DISCLOSED. VARI OUS SUBMISSIONS HAVE BEEN MADE ON BEHALF OF THE ASSESSE E ITA NO. 831 AND 832/PN/2002 LUNKAD GROUP BLOCK PERIOD: 1990-91 TO 1999-00 DURING APPELLATE PROCEEDINGS BUT WITHOUT CO-RELATIN G THE SUBMISSIONS, RELIEF HAS BEEN GIVEN TO THE ASSESSEE WHICH IS NOT JUSTIFIED. ASSESSING OFFICER HAS NOT BEEN PROVI DED DUE OPPORTUNITY OF HEARING BY THE CIT(A) BEFORE REACHIN G TO CERTAIN CONCLUSION WHICH IS NOT JUSTIFIED. IN VIEW OF ABOVE, WE ARE OF THE OPINION THAT THE ISSUE NEEDS DEEP PROBE INTO THE MATTER TO REACH CONCLUSION. SO, WE SET ASIDE THE OR DER OF THE CIT(A) AND RESTORE THE MATTER TO THE FILE OF THE AS SESSING OFFICER WITH A DIRECTION TO DECIDE THE SAME AS PER FACT AND LAW AFTER PROVIDING OPPORTUNITY OF HEARING TO THE A SSESSEE. IT IS PERTINENT TO MENTION THAT SINCE WE ARE RESTORING THE ISSUE TO THE FILE OF THE ASSESSING OFFICER, WE ARE REFRAI NING TO COMMENT ON THE MERITS OF THE ISSUE AT HAND. 9. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE A RE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF JUNE 2011. SD/- SD/- ( D. KARUNAKARA RAO ) ACCOUNTANT MEMBER ( SHAILENDRA KUMAR YADAV) JUDICIAL MEMBER PUNE: DATED: 30 TH JUNE, 2011 ANKAM ITA NO. 831 AND 832/PN/2002 LUNKAD GROUP BLOCK PERIOD: 1990-91 TO 1999-00 COPY OF THE ORDER IS FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. THE CIT(A) II NASIK 4. THE CIT, - II NASIK 5. THE D.R, B BENCH, PUNE TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, PUNE BENCHES, PUNE