Radha Kishan Somani, Kolkata V. ACIT, Central Circle - XI, Kolkata, Kolkata

ITA 835/KOL/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2473 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2010
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 1997-1998
• Appeal Filed On: 28-04-2010
• Court: TRIBUNAL
• Department Lawyers: PIYUSH KOLHE
• Assessee Lawyers: B C JAIN
• Keywords: Unexplained cash credit; Corroborative evidences; Block assessment
• Section: 143(3); 148

Judgement Text

1 , C , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH- C , KO LKATA [ . . . . . . . . , ,, , . .. . . .. . , , , , !' ] [BEFORE SHRI B.R.MITTAL, JUDICIAL MEMBER & SRI C.D. RAO, ACCOUNT ANT MEMBER] # # # # / ITA NO. 835 (KOL) OF 2010 $%& '( / ASSESSMENT YEAR 1997-98 RADHA KISHAN SOMANI, KOLKATA . (PAN-ALKPS0459E) ASSTT.COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-XI, KOLKATA. (+, / APPELLANT ) - % - - VERSUS - (/0+,/ RESPONDENT ) # # # # / ITA NO. 836 (KOL) OF 2010 $%& '( / ASSESSMENT YEAR 1997-98 CHUNNI LAL SOMANI, KOLKATA . (PAN-ALKPS0463N) ASSTT.COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-XI, KOLKATA. (+, / APPELLANT ) - % - - VERSUS - (/0+,/ RESPONDENT ) # # # # / ITA NO. 837 (KOL) OF 2010 $%& '( / ASSESSMENT YEAR 1997-98 SHYAM SUNDAR SOMANI, KOLKATA . (PAN-ALRPS8755L) ASSTT.COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-XI, KOLKATA. (+, / APPELLANT ) - % - - VERSUS - (/0+,/ RESPONDENT ) # # # # / ITA NO. 838 (KOL) OF 2010 $%& '( / ASSESSMENT YEAR 1997-98 LAQXMI NARAYAN SOMANI, KOLKATA . (PAN-ALRPS8754M) ASSTT.COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-XI, KOLKATA. (+, / APPELLANT ) - % - - VERSUS - (/0+,/ RESPONDENT ) +, 1 2 !/ FOR THE APPELLANTS: / SRI B.C. JAIN /0+, 1 2 ! / FOR THE RESPONDENT: / SRI PIYUSH KOLHE. !3 / ORDER ( . . ), (B.R.MITTAL), JUDICIAL MEMBER : 2 THESE FOUR APPEALS BY DIFFERENT ASSESSEES ARE FIL ED AGAINST SEPARATE ORDERS OF LD. C.I.T.(A), CENTRAL-I, KOLKATA, ALL DATED 05/1/2 010, RELATING TO ASSESSMENT YEAR 1997- 98. THE FACTS OF THE CASE AND GROUNDS OF APPEAL IN ALL THESE APPEALS ARE IDENTICAL, EXCEPT VARIATION IN AMOUNTS OF ADDITION ON ACCOUNT OF UNEX PLAINED AGRICULTURAL INCOME. THEREFORE, ALL THESE APPEALS ARE DISPOSED OF BY THI S COMMON ORDER FOR THE SAKE CONVENIENCE. 2. AT THE TIME OF HEARING BEFORE US, THE ASSESSEE S LEARNED COUNSEL POINTED OUT THAT IF THE FACTS IN THE CASE OF CHUNNI LAL SOMANI (ITA NO. 836/K/10) ARE CONSIDERED, THE SAME WILL COVER THE APPEALS OF THREE OTHER ASSESSEE S AS THE FACTS AND ARGUMENTS ARE ALMOST SIMILAR. THE OUTCOME, WHICH MAY ARRIVE AT I N RESPECT OF THE ABOVE APPEAL, WILL BE APPLICABLE TO OTHER THREE APPEALS. THE LD. DEPARTME NTAL REPRESENTATIVE ALSO CONSENTED TO THE ABOVE SUBMISSION OF THE LEARNED COUNSEL. WE , THEREFORE, TAKE UP FIRST THE APPEAL BEING ITA NO. 836/KOL/ 2010 IN THE CASE OF CHUNNI L AL SOMANI. ITA NO. 836/KOL/2010 (CHUNNI LAL SOMANI) : 3. THE GROUNDS OF APPEAL FILED BY THE ASSESSEE FOR THE ASSESSMENT YEAR UNDER CONSIDERATION ARE AS UNDER: 1) THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE ACTION OF LD. ASSESSING OFFICER IN ASSUMING JURISDICTION U/S. 148. 2) THAT IN THE FACTS AND CIRCUMSTANCES OF TH E CASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE ASSUMP TION OF JURISDICTION BY THE LD. ASSESSING OFFICER WHICH WAS ALREADY BARRED BY L IMITATION. 3) THAT IN THE FACTS AND CIRCUMSTANCES OF TH E CASE, THE LD. C.I.T.(A) ERRED IN CONFIRMING THE ASSESSMENT MADE BY THE LD. A.O. AS V ALID AND JUSTIFIED. 4) THAT IN THE FACTS AND CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITIONS MADE BY THE LD. A.O. ON AC COUNT OF UNEXPLAINED AGRICULTURAL INCOME OF RS.315370/- WITHOUT ANY BASI S REASON OR JURTIFICATION. 4. THE RELEVANT FACTS GIVING RISE TO THIS APPEAL A RE THAT THE ASSESSEE FILED HIS RETURN DISCLOSING TOTAL INCOME OF RS.3,38,372/-, WHICH INC LUDED NET AGRICULTURAL INCOME OF RS.2,77,380/-. ASSESSMENT U/S. 143(3) WAS COMPLETE D ENHANCING THE INCOME TO 3 RS.5,05,407/-, WHEREBY GROSS AGRICULTURAL INCOME OF RS.3,15,370/- WAS ADDED TO THE RETURNED INCOME AS UNEXPLAINED CASH CREDIT AS THE A SSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS COULD NOT PRODUCE ANY EVIDEN CE IN SUPPORT OF AGRICULTURAL INCOME AND RELATED EXPENSES THEREOF AND OFFERED THE SAME T O BE TAXED AS NORMAL INCOME VIDE LETTER DATED 30/3/2000. THE ASSESSEE APPEALED TO TH E LD. C.I.T.(A), WHO DECIDED THE APPEAL VIDE ORDER DATED 31/3/2003 IN FAVOUR OF THE ASSESSEE AND NO APPEAL WAS FILED BY THE DEPARTMENT AGAINST THE SAID ORDER OF LD. C.I.T. (A) BECAUSE THE SAME ADDITION WAS REPEATED IN THE BLOCK ASSESSMENT ORDER DATED 30/11/ 2000 HOLDING THAT EVIDENCE OF CLAIM OF BOGUS AGRICULTURAL INCOME WAS AVAILABLE IN THE S EIZED MATERIAL. 5. SEARCH & SEIZURE OPERATION AGAINST SOMANI GROUP OF CASES WAS CONDUCTED ON 19/11/1998 AND SUBSEQUENT DATES. NOTICE U/S. 158BC WAS ISSUED AND IN RESPONSE TO THE SAID NOTICE, THE ASSESSEE FILED BLOCK RETURN SHOWIN G UNDISCLOSED INCOME AT NIL. THE ASSESSMENT WAS COMPLETED U/S. 158BC(C) DATED 30/11/ 2000 ON TOTAL UNDISCLOSED INCOME OF RS.6,25,677/- FOR THE BLOCK PERIOD INCLUDING THE AGRICULTURAL INCOME CONSIDERING IT AS UNDISCLOSED INCOME. THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. C.I.T.(A) AND THE LD. C.I.T.(A) VIDE ORDER DATED 7/3/2003 CONFIRMED THE B LOCK ASSESSMENT FRAMED BY THE A.O. UPHOLDING THE ADDITION MADE AS CASH CREDIT ON ACCOU NT OF AGRICULTURAL INCOME. THE ASSESSEE THEREAFTER FILED FURTHER APPEAL BEFORE THE TRIBUNAL AGAINST THE SAID ORDER OF LD. C.I.T.(A). THE TRIBUNAL OBSERVED THAT THE IMPU GNED CASH CREDIT ON ACCOUNT OF UNEXPLAINED AGRICULTURAL INCOME COULD BE CONSIDERED IN THE REGULAR ASSESSMENT FOR THE YEAR UNDER CONSIDERATION IN WHICH THE AMOUNT WAS FO UND CREDITED IN THE BOOKS OF ACCOUNTS OR RECORDS OF THE ASSESSEE OR IN THE BANK ACCOUNTS OF THE ASSESSEE AND NOT IN THE BLOCK ASSESSMENT, AS DECIDED BY THE LD. C.I.T.( A). HENCE THE TRIBUNAL DELETED THE SAID ADDITION OF UNEXPLAINED AGRICULTURAL INCOME FR OM BLOCK ASSESSMENT ORDER. IN VIEW OF ABOVE, THE A.O. PASSED ORDER DATED 3/5/2006 U/S. 14 3(3)/251/154 AMENDING THE ORDER PASSED U/S. 143(3)/251 DATED 5/5/2003 AND TO INCLUD E RS.2,77,380/- IN THE TOTAL INCOME OF THE ASSESSEE AND THE TOTAL INCOME WAS ARRIVED AT RS.3,38,370/-. 6. THE ASSESSEE CAME IN APPEAL BEFORE THE LD. C.I. T.(A) AGAINST THE SAID ORDER DATED 3/5/2006 PASSED U/S. 143(4)/251/154 AND THE DISPUTE WAS WHETHER THERE WAS ANY 4 RECTIFIABLE MISTAKE AND A.O. COULD DO SO. THE LD. C .I.T.(A) VIDE ORDER DATED 22/12/2006 CANCELLED THE ORDER PASSED BY THE A.O. U/S. 143(3)/ 251/154 AND ALLOWED THE APPEAL OF THE ASSESSEE ON THE GROUND, INTER ALIA, THAT IT WAS BEYOND THE JURISDICTION OF THE A.O.. 7. THE DEPARTMENT FILED APPEAL BEFORE THE TRIBUNAL AGAINST THE SAID ORDER DATED 22/12/2006 OF THE LD. C.I.T.(A) AND THE TRIBUNAL VI DE ORDER DATED 7/8/2007 DISMISSED THE REVENUES APPEAL INTER ALIA BY HOLDING AS UNDER :- 8. IN THE BLOCK ASSESSMENT, THE ASSESSEE H AD FILED THE APPEAL BEFORE THE TRIBUNAL IN WHICH THE TRIBUNAL DELETED THE ADDITION RELATING TO BLOCK ASSESSMENT ON THE GROUND THAT THE ISSUE OF AGRICULTURAL INCOME IS TO BE CONSIDERED IN THE REGULAR ASSESSMENT. HOWEVER, BY ORDER DATED 29.9.2 004, THE A.O. HAS ONLY GIVEN EFFECT TO THE ORDERS OF THE APPELLATE AUTHORITIES. THEREFORE, IF AT ALL THE REVENUE WAS AGGRIEVED, THEY SHOULD HAVE FILED APPEA L BEFORE THE TRIBUNAL AGAINST THE ORDER OF THE C.I.T.(A) IN REGULAR ASSESSMENT, W HEREIN HE HAS DELETED THE ADDITION RELATING TO AGRICULTURAL INCOME. ONCE THE ADDITION WAS DELETED BY THE C.I.T.(A), THE A.O. WAS DUTY BOUND TO GIVE EFFECT T O THE SAME. IN VIEW OF THE ABOVE, WE ARE OF THE OPINION THAT THERE WAS NO APPA RENT MISTAKE IN THE ORDER OF THE A.O. DATED 23/9/2004. ACCORDINGLY, WE UPHOLD T HE IMPUGNED ORDER OF THE C.I.T.(A) AND DISMISS THE APPEALS FILED BY THE REVE NUE. 8. THE A.O. THEREAFTER ISSUED NOTICE U/S. 148 R.W. S. 150/254 OF THE ACT DATED 22/2/2008 WITH A VIEW TO REOPEN THE REGULAR ASSESSM ENT FOR THE YEAR UNDER CONSIDERATION. THE ASSESSEE DISPUTED THE LEGALITY OF ISSUANCE OF SAID NOTICE STATING THAT THE NOTICE WAS ISSUED AFTER MERGER OF THE ORIGINAL ASSESSMENT PROCEEDINGS WITH THE ORDER OF LD. C.I.T.(A) DATED 21/3/2003 INVOLVING TH E SAME ISSUE. FURTHER THE NOTICE U/S. 148 WAS ISSUED AFTER MORE THAN 4 YEARS OF THE END O F ASSESSMENT YEAR. HOWEVER, THE A.O. COMPLETED THE ASSESSMENT U/S. 147 R.W.S. 150/2 54/154/ 251/143(3) DATED 29/12/2008 ON A TOTAL INCOME OF RS.3,76,360/- AND T HEREBY MADE ADDITION OF RS.3,15,370/- ON ACCOUNT OF AGRICULTURAL INCOME, TR EATING THE SAME AS NORMAL INCOME OF THE ASSESSEE. 9. BEING AGGRIEVED, THE ASSESSEE FILED APPEAL BEFO RE THE LD. C.I.T.(A) CHALLENGING ASSUMPTION OF JURISDICTION BY THE A.O. U/S. 148 BY REOPENING THE ASSESSMENT AS ALSO ADDITION MADE THEREUNDER OF RS.3,15,370/- TREATING THE AGRICULTURAL INCOME AS NORMAL INCOME OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERA TION. THE LD. C.I.T.(A) HAS 5 CONFIRMED THE ACTION OF THE A.O. AND THUS DISMISSE D THE ASSESSEES APPEAL BY HOLDING AS UNDER :- 5.2 FROM THE PLAIN READING OF THE ABOVE PROVISIO N (SEC. 147) IT IS CLEAR THAT EXPLANATION 2 SPECIFICALLY PROVIDES THAT WHERE BY A N ORDER IN AN APPEAL, ANY INCOME IS EXCLUDED FROM THE TOTAL INCOME OF AN ASSE SSEE FOR AN ASSESSMENT YEAR, THEN AN ASSESSMENT OF SUCH INCOME FOR ANOTHER ASSES SMENT YEAR SHALL BE DEEMED TO BE ONE MADE IN CONSEQUENCE OF, OR TO GIVE EFFECT TO, ANY FINDING OR DIRECTION CONTAINED IN THAT ORDER (IN APPEAL). THIS PROVISION WOULD CERTAINLY COME TO THE AID OF THE DEPARTMENT IN THE INSTANT CASE, SINCE THE TR IBUNAL HAS FOUND THAT RS.3,15,370/ ADDED IN THE BLOCK ASSESSMENT WAS A TA XABLE REVENUE RECEIPT. THE DELETION OF THAT INCOME BY THE TRIBUNAL FORM THE BL OCK ASSESSMENT SHALL BE DEEMED TO BE A DIRECTION, AND TO GIVE EFFECT TO THE DIRECTION, REASSESSMENT COULD BE MADE UNDER SECTION L47 READ WITH SECTIONS 150 AN D 153(3) OF THE INCOME TAX ACT 1961. THE OTHER DECISIONS OF THE HONBLE SUPREM E COURT ON WHICH RELIANCE HAS BEEN PLACED BY LEARNED AUTHORISED COUNSEL OF TH E ASSESSEE ARE SIGNIFICANTLY DISTINGUISHABLE AS THE FACTS WERE DIFFERENT. 5.3 SINCE IN THE PRESENT CASE, THE FINDING GIVEN BY THE INCOME-TAX APPELLATE TRIBUNAL AS CONTAINED IN PARAGRAPH 7 & 10 OF ITS OR DER DATED 25-01-2005 WAS AN ESSENTIAL FINDING OR A NECESSARY FINDING OR WAS A F INDING WHICH WAS INEXTRICABLY CONNECTED WITH THE DECISION OF THE APPEAL, IT WAS A VALID FINDING AND IT CONSEQUENTLY ENABLED THE INCOME-TAX AUTHORITIES TO VALIDLY REOPEN THE ASSESSMENTS FOR THE ASSESSMENT YEAR 1997-98. I MAY ALSO INCIDENTALLY MENTION HERE THA T THE ASSESSEE ITSELF HAD RAISED A PLEA BEFORE THE ITAT THAT THE ASSESSMENT OF UNEXPLA INED AGRICULTURE INCOME IS TO BE ASSESSED IN THE REGULAR ASSESSMENT AND NOT IN THE BLOCK ASSESSMENT. HENCE, WHEN THE TRIBUNAL HELD THAT THE ASSESSMENT OF UNEXP LAINED AGRICULTURE INCOME HAS TO BE CONSIDERED IN THE HANDS OF THE ASSESSEE I N THE REGULAR ASSESSMENT, IT ONLY GAVE A FINDING WHICH THE ASSESSEE SOUGHT AND W HICH WAS TO THE EFFECT THAT THE UNEXPLAINED AGRICULTURE INCOME RELATED TO THE A SSESSMENT YEARS 1997-98. 5.4. IN CONCLUSION, I AM OF THE OPINION THAT AS P ER THE PROVISIONS OF SEC. 150 READ WITH SECTION 153(3) AND EXPLANATION 2 OF SEC. 153, THE BAR OF LIMITATION STOOD LIFTED AND THE SUPPLEMENTARY ASSESSMENTS MADE ON TH E ASSESSEE FOR THE ASSESSMENT YEARS 1997-98 IS VALID AND JUSTIFIED. HENCE THIS APPEAL BY THE ASSESSEE BEFORE US WITH TH E GROUNDS MENTIONED IN PARAGRAPH-3 ABOVE. 10. AT THE TIME OF HEARING, THE LD. A/R OF THE ASS ESSEE SUBMITTED THAT CERTAIN INCOME FROM AGRICULTURAL OPERATIONS WAS INCLUDED IN THE RETURN OF INCOME AND APPROPRIATE REBATE FOR THE TAX PAYABLE ON SUCH AGRICULTURAL INC OME WAS CLAIMED IN THE REGULAR RETURN 6 OF THE ASSESSEE. THE GROSS AMOUNT OF AGRICULTURAL RECEIPT WAS ADDED AS INCOME FROM OTHER SOURCES IN SUCH REGULAR ASSESSMENT. HE FURTH ER SUBMITTED THAT THE A.O. NOT ONLY IGNORED THE STIPULATIONS MADE IN THE REGULAR ASSESS MENT PROCEEDINGS, BUT THE SAME AMOUNT WAS AGAIN ADDED AS UNDISCLOSED INCOME IN THE BLOCK ASSESSMENT PROCEEDINGS. ON APPEAL IN REGULAR ASSESSMENT PROCEEDINGS, THE ADDIT ION FOR SUCH AGRICULTURAL INCOME WAS DELETED AND THE DEPARTMENT DID NOT FILE ANY APPEAL AGAINST SUCH DELETION OF INCOME. THEREFORE, THE REGULAR ASSESSMENT ORDER DATED 31/3/ 200 PASSED U/S. 143(3) ATTAINED FINALITY. HE FURTHER SUBMITTED THAT REASSESSMENT P ROCEEDINGS HAVE BEEN INITIATED AFTER MORE THAN 9 YEARS FROM THE END OF THE RELEVANT ASSE SSMENT YEAR AND, THEREFORE, THE SAME WERE BARRED BY LIMITATION. HE HAS FILED A PAPE R BOOK CONTAINING COPIES OF EARLIER ORDERS AND WRITTEN SUBMISSIONS MADE BEFORE THE AUTH ORITIES BELOW. HE FURTHER SUBMITTED THAT THE ASSESSEE NEVER OFFERED THE AGRIC ULTURAL INCOME AS UNDISCLOSED INCOME IN THE BLOCK ASSESSMENT. IN FACT, THERE WAS NO ESC APEMENT OF ANY INCOME, NOR WAS ANY INFORMATION BEFORE THE A.O. TO ASSUME JURISDICTION U/S. 148 OF THE ACT. THAT RECOURSE TO SEC. 147 R.W.S. 150 HAS BEEN TAKEN BY THE A.O. B ECAUSE OF CERTAIN OBSERVATION OF THE HONBLE TRIBUNAL IN BLOCK ASSESSMENT PROCEEDINGS AN D SUCH ASSUMPTION OF JURISDICTION WAS NOT LAWFUL IN VIEW OF PROVISIONS OF SEC. 150(2) OF THE ACT. HE FURTHER SUBMITTED THAT THE LD. C.I.T.(A) INVOKED PROVISIONS OF SEC. 153(3), EX PLANATION 2, BUT THERE WAS NO FINDING OR DIRECTION BY THE HONBLE TRIBUNAL AND CERTAIN OBSER VATIONS WERE ONLY MADE BY IT. ACCORDING TO HIM, THEREFORE, THE APPLICATION OF PRO VISIONS OF SEC. 153(2) EXPLANATION 2 BY THE LD. C.I.T.(A) WAS MISPLACED. HE REITERATED THA T NO NOTICE CAN BE ISSUED ON THE BASIS OF OBSERVATION OF HONBLE TRIBUNAL AS THE EARLIER A SSESSMENT ORDER HAD MERGED WITH THE ORDER OF LD. C.I.T.(A), FOR WHICH THE DEPARTMENT HA D NOT FILED ANY APPEAL. THE LD. A/R, THEREFORE, SUBMITTED THAT THE A.O. CANNOT PASS AN O RDER MAKING REASSESSMENT BY ISSUING NOTICE U/S. 148 R.W.S. 150 DATED 22/2/2008 IGNORING THE ORDER OF LD. C.I.T.(A) AS THE ORDER OF THE A.O. PASSED U/S. 143(3) HAD ALREADY BE EN MERGED WITH THE ORDER OF LD. C.I.T.(A). HE FURTHER SUBMITTED THAT ONCE THE INCO ME WAS SUBJECTED TO ASSESSMENT FOR ANY PARTICULAR YEAR, IT CANNOT BE SAID TO HAVE ESCA PED ASSESSMENT. THE FACT OF AGRICULTURAL INCOME WAS ALREADY KNOWN TO THE A.O. S INCE THE DATE OF FILING OF RETURN FOR REGULAR ASSESSMENT AND NO NEW FACT OR INFORMATION C AME TO HIS KNOWLEDGE OR POSSESSION. 7 THUS THE OBSERVATION OF HONBLE TRIBUNAL RELIED UPO N BY THE A.O. COULD NOT BE SAID TO BE ANY NEW INFORMATION OF ESCAPEMENT OF ANY INCOME FOR ASSUMING JURISDICTION U/S. 148 R.W.S. 150 OF THE ACT. IN SUPPORT OF HIS SUBMISSIONS, THE LD. A/R RELIED UPON THE FOLLOWING DECISIONS :- A) HUM BOLDT WEDAQ INDIA LTD. VS. CIT [236 ITR 84 5 (CAL)] B) CIT VS. RAMCHANDRA HATECHERIES [305 ITR 117 ( MAD)] C) CIT VS. EMPIRE INDUSTRIES LTD. [210 ITR 267 (BOM)] D) CIT VS. RAO THAKAR NARAYAN SINGH [56 ITR 234 (SC)] E) PARSHURAM POTTERY WORKS CO. LTD. VS. ITO [10 6 ITR 1 (SC)] F) M.K. THAKKAR VS. CIT [197 ITR 110 (KAR)] G) MEER ANANT NAIK VS. DCIT [221 CTR 149 (BOM)] . THE LD. A/R SUBMITTED THAT THE RATIO OF THE AFORESA ID DECISIONS IS SQUARELY APPLICABLE TO THE ISSUE IN THIS APPEAL AND, THEREFORE, THE ORDER OF LD. C.I.T.(A) CONFIRMING THE REASSESSMENT PROCEEDING AND ADDITION MADE THEREUNDE R SHOULD BE QUASHED. IN HIS ALTERNATIVE ARGUMENTS, THE LD. A/R SUBMITTED THAT I F THE AGRICULTURAL INCOME IS TO BE TAKEN AS REGULAR INCOME, THE EXPENDITURE INCURRED O N SUCH AGRICULTURAL INCOME SHOULD BE ALLOWED. HE FURTHER SUBMITTED THAT ONLY THE CASH D EPOSIT IN THE DISCLOSED BANK ACCOUNT OF THE ASSESSEE SHOULD BE TREATED AS INCOME AND NOT THE ENTIRE DEPOSITS. 11. THE LD. DEPARTMENTAL REPRESENTATIVE, ON THE OT HER HAND, RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. HE SUBMITTED THAT THE HONB LE TRIBUNAL OBSERVED THAT ENQUIRIES IN RELATION TO AGRICULTURAL INCOME HAD BEEN CONDUCTED BY THE A.O. AT THE TIME OF ORIGINAL ASSESSMENT AND HAS HELD THAT THE SAID INCOME COULD NOT FORM PART OF BLOCK ASSESSMENT BUT COULD FORM PART OF THE REGULAR ASSESSMENT. HE, THEREFORE, SUBMITTED THAT THE REASSESSMENT HAS BEEN MADE IN CONSEQUENCE OF AND TO GIVE EFFECT TO FINDING OR DIRECTION CONTAINED IN APPELLATE ORDER, EXTENDED PERIOD FOR R EOPENING IS AVAILABLE AND THE IMPUGNED REASSESSMENT PROCEEDING AND THE ADDITION MADE THERE UNDER HAS RIGHTLY BEEN CONFIRMED BY THE LD. C.I.T.(A). IN SUPPORT OF HIS SUBMISSIO N, THE LD. DEPARTMENTAL REPRESENTATIVE PLACED RELIANCE ON THE FOLLOWING DECISIONS :- A) HUNGERFORD INV. TRUST LTD. V ITO [231 ITR 175 (SC)] 8 B) CIT V AMY COLABAWALA [243 ITR 19 (KER)] C) DCIT V SPENCES HOTEL P. LTD. [289 ITR 145 (KA R)] D) K.M.SHARMA V ITO [221 ITR 202 (DEL)] E) ACIT V RAJENDRA KUMAR [2008-TIOL-278-ITAT-DEL] IN REGARD TO THE ALTERNATIVE SUBMISSION OF THE LD. A/R, THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE COULD NOT PRODUCE ANY EVIDENCE IN SUPPORT OF HIS AGRICULTURAL INCOME OR ANY EXPENDITURE INCURRED ON SUCH EARNING. THEREFORE, T HERE IS NO MERIT IN THE ASSESSEES ALTERNATIVE ARGUMENT. 12. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS O F THE LEARNED REPRESENTATIVES OF THE PARTIES AND THE ORDERS OF THE AUTHORITIES BELOW . WE HAVE ALSO GONE THROUGH THE RELEVANT CASE LAWS CITED BY THE LD. REPRESENTATIVES OF THE PARTIES IN SUPPORT OF THEIR SUBMISSIONS. 13. IN ORDER TO APPRECIATE THE CONTENTION OF THE L D. A/R, WE OBSERVE THAT THE LD. CIT(A) HAS SUMMARIZED IN PARA-5 OF THE IMPUGNED ORD ER THE REASONS FOR ISSUING NOTICE U/S. 148 AND COMPLETING THE REASSESSMENT U/S. 147 R .W.S. 150/254. WE CONSIDER IT PRUDENT TO STATE THE SAME, WHICH READS AS UNDER :- 5. THERE IS NO DISPUTE THAT IN THE YEAR UNDE R CONSIDERATION ORDER UNDER SECTION 143(3) WAS PASSED ON 31/03/2000 MAKING ADDI TION OF PS. 3,15,370/ BEING THE GROSS AGRICULTURE INCOME DECLARED BY THE COMPAN Y. THIS ADDITION WAS MADE BY THE A.O. AS THE ASSESSEE FAILED COULD NOT PRODUCE A NY SUPPORTING EVIDENCE IN SUPPORT OF THE CLAIM OF AGRICULTURE INCOME AND OFFE RED THE SAME TO BE TAXED AS NORMAL VIDE LETTER DT. 30.03.2000. SUBSEQUENTLY THE SAME ADDITION WAS REPEATED IN THE BLOCK ASSESSMENT PASSED U/S 158BC VIDE ORDER DATED 30.11.00 HOLDING THAT EVIDENCE OF CLAIM OF BOGUS AGRICULTURE INCOME WAS A VAILABLE IN THE SEIZED MATERIAL. SUBSEQUENTLY THE CIT (A) CONFIRMED THE ADDITION MAD E IN BLOCK ADDITION AND DELETED THE SAME IN THE REGULAR ASSESSMENT HOLDING THAT THE SAME CANNOT BE TAXED TWICE. THE DEPARTMENT ACCEPTED THE FINDING OF THE C .I.T(A), HOWEVER THE ASSESSEE FILED FURTHER APPEAL BEFORE THE ITAT AGITATING THAT THE AO WAS WRONG IN TREATING THE AGRICULTURE INCOME AS UNDISCLOSED INCOME FOR TH E BLOCK PERIOD AND SINCE THE INCOME IN QUESTION HAS ALREADY BEEN ASSESSED IN THE REGULAR ASSESSMENT, THE SAME CANNOT BE ASSESSED AGAIN IN THE BLOCK ASSESSMENT. T HE HONBLE ITAT VIDE ORDER DT. 25.01.2005 AFTER DISCUSSING THE ISSUE IN DETAIL HELD THAT INCOME IN QUESTION CANNOT BE CONSIDERED OR INCLUDED IN THE BLOCK ASSES SMENT PROCEEDINGS AND CAN BE CONSIDERED IN THE REGULAR ASSESSMENT PROCEEDING. 9 14. FROM THE ABOVE, WE OBSERVE THAT THE ASSESSEE D ECLARED CERTAIN AGRICULTURAL INCOME IN HIS RETURN. DURING THE COURSE OF ASSESSM ENT PROCEEDINGS AS NO DOCUMENTS COULD BE FILED/PRODUCED IN SUPPORT OF SUCH AGRICULTURAL I NCOME, THE ASSESSEE OFFERED THE SAME TO BE TAXED AS REGULAR INCOME. ACCORDINGLY, THE AS SESSMENT WAS COMPLETED U/S. 143(3) TREATING THE SAID INCOME AS UNEXPLAINED CASH CREDIT AND THE SAME WAS ADDED TO THE ASSESSEES TOTAL INCOME. THE ASSESSEE APPEALED TO T HE LD. C.I.T.(A), WHO DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY TREATING THE INCOME AS UNDISCLOSED INCOME AND CONFIRMED THE ADDITION MADE IN BLOCK ASSESSMENT. THE DEPARTM ENT DID NOT FILE ANY APPEAL AGAINST THE SAID APPELLATE ORDER AND THE ADDITION WAS DELET ED FROM REGULAR ASSESSMENT BY THE A.O. ON 5/5/2003 GIVING EFFECT TO THE SAID ORDER OF LD. C.I.T.(A). SINCE THE ASSESSEE FILED APPEAL AGAINST THE ORDER OF LD. C.I.T.(A) CON FIRMING ADDITION MADE IN BLOCK ASSESSMENT AGAINST WHICH THE ASSESSEE CAME IN APPEA L BEFORE THE TRIBUNAL AGITATING THAT THE INCOME IN QUESTION HAD ALREADY BEEN ASSESSED IN REGULAR ASSESSMENT, THE SAME INCOME COULD NOT BE ASSESSED AS UNDISCLOSED IN THE BLOCK A SSESSMENT PROCEEDING. THE TRIBUNAL VIDE ORDER DATED 25/1/2005 HAS CONCLUDED THE MATTER AS UNDER :- 10. IN THE RESULT, ALL THE APPEALS OF THE ASSES SES ARE ALLOWED HOLDING THAT INCOME, IF ANY, REPRESENTING THE VARIOUS AMOUNTS RE CEIVED BY THE ASSESSES BY DEMAND DRAFTS WHICH HAS BEEN DEPOSITED AND CREDITED IN THE ASSESSEES DISCLOSED BANK ACCOUNT CANNOT BE CONSIDERED OR INCL UDED IN THE PRESENT BLOCK ASSESSMENT PROCEEDINGS AND CAN BE CONSIDERED IN THE REGULAR ASSESSMENT PROCEEDINGS PERTAINING TO THE RESPECTIVE ASSESSMENT YEARS IN WHICH THE AMOUNT WAS FOUND CREDITED IN THE BOOKS OF ACCOUNTS OR RECO RDS OF THE ASSESSEE OR IN THE BANK ACCOUNTS OF THE ASSESSEE. 15. IN PURSUANCE OF THE SAID ORDER OF THE TRIBUNAL , THE A.O. PASSED RECTIFICATORY ORDER U/S. 143(3)/251/154 DATED 3/5/2006 TO GIVE EF FECT TO THE OBSERVATION OF THE TRIBUNAL IN ITS ORDER DATED 25/1/2005 AND MODIFIED HIS EARLIER ORDER DATED 5/5/2003, BUT ON APPEAL BY THE ASSESSEE AGAINST THE SAID RECT IFICATORY ORDER OF A.O., THE LD. C.I.T.(A) ALLOWED THE ASSESSEES APPEAL HOLDING THA T THE ORDER OF RECTIFICATION MUST BE CANCELLED AS WITHOUT JURISDICTION AND UNJUSTIFIED O N MERITS. IN FURTHER APPEAL BEFORE THE TRIBUNAL, THE TRIBUNAL VIDE ITS ORDER DATED 17/8/20 07 UPHELD THE ORDER OF LD. C.I.T.(A) AND DISMISSED THE REVENUES APPEAL WITH THE FOLLOWI NG FINDING :- 8. FROM THE ABOVE FACTS IT IS EVIDENT THAT THE A .O. HAS RECTIFIED HIS ORDER DATED 10 29.9.2004 PASSED U/S.143(3)/251/254. NOW THE QUESTI ON IS WHETHER THERE WAS AN APPARENT MISTAKE IN THE SAID ORDER. THE A.O. HAS MA DE THE ADDITION OF AGRICULTURAL INCOME IN THE REGULAR ASSESSMENT WHICH WAS DELETED BY THE C.I.T.(A). THE REVENUE HAS ACCEPTED THE FINDING OF THE C.L.T.(A) AND, THER EFORE, NO APPEAL ON THIS GROUND AGAINST THE SAID ORDER OF THE C.I.T.(A) WAS FLIED. IN THE BLOCK ASSESSMENT, THE ASSESSEE HAD FILED THE APPEAL BEFORE THE TRIBUNAL I N WHICH THE TRIBUNAL DELETED THE ADDITION RELATING TO BLOCK ASSESSMENT ON THE GR OUND THAT THE ISSUE OF AGRICULTURAL INCOME IS TO BE CONSIDERED IN THE REGU LAR ASSESSMENT. HOWEVER, BY ORDER DATED 29.9.2004, THE A.O. HAS ONLY GIVEN EFFE CT TO THE ORDERS OF THE APPELLATE AUTHORITIES. THEREFORE, IF AT ALL THE REV ENUE WAS AGGRIEVED, THEY SHOULD HAVE FILED APPEAL BEFORE THE TRIBUNAL AGAINST THE O RDER OF THE C.I.T(A) IN REGULAR ASSESSMENT, WHEREIN HE HAS DELETED THE ADDITION REL ATING TO AGRICULTURAL INCOME. ONCE THE ADDITION WAS DELETED BY THE C.I.T.(A), THE A.O. WAS DUTY BOUND TO GIVE EFFECT TO THE SAME. IN VIEW OF THE ABOVE, WE ARE OF THE OPINION THAT THERE WAS NO APPARENT MISTAKE IN THE ORDER OF THE A.O. DATED 23. 9.2004 . ACCORDINGLY, WE UPHOLD THE IMPUGNED ORDER OF THE C.I.T.(A) AND DISM ISS THE APPEALS FILED BY THE REVENUE. [EMPHASIS SUPPLIED] 16. IN VIEW OF THE ABOVE FACTS, WE ARE OF THE CONS IDERED VIEW THAT THE SUBMISSION OF THE ASSESSEE THAT THE INITIATION OF REASSESSMENT PR OCEEDING IS BARRED BY LIMITATION COULD NOT BE ACCEPTED, BECAUSE THE A.O. HAS MADE THE ASSE SSMENT BY INVOKING THE PROVISIONS OF SEC. 148 OF THE ACT TO TAX THE AGRICULTURAL INCOME AS DISCLOSED BY THE ASSESSEE IN THE ORIGINAL RETURN FILED AND SUBSEQUENTLY ADMITTED IT TO BE TAXED AS NORMAL INCOME OF THE ASSESSEE ONLY TO GIVE EFFECT TO THE FINDING OF THE TRIBUNAL ORDER DATED 25/1/2005. AS MENTIONED HEREINABOVE THAT THE TRIBUNAL HAS CATEGOR ICALLY STATED WHILE DISPOSING OF THE APPEAL FILED AGAINST THE BLOCK ASSESSMENT PROCEEDIN GS THAT THE SAID AGRICULTURAL INCOME COULD NOT BE CONSIDERED AS UNDISCLOSED INCOME IN TH E BLOCK ASSESSMENT PROCEEDINGS AND COULD BE CONSIDERED IN THE REGULAR ASSESSMENT PROCE EDINGS PERTAINING TO THE RESPECTIVE ASSESSMENT YEARS IN WHICH THE AMOUNT WAS FOUND CRED ITED IN THE BOOKS OF ACCOUNT OR RECORDS OF THE ASSESSEE OR IN THE BANK ACCOUNTS OF THE ASSESSEE. WE ARE OF THE CONSIDERED VIEW THAT THE LD. C.I.T.(A) HAS RIGHTLY HELD IN THE IMPUGNED ORDER THAT IN VIEW OF THE ABOVE OBSERVATION OF THE TRIBUNAL, THE TIME LIMIT FOR COMPLETION OF ASSESSMENTS AND REASSESSMENTS AS PROVIDED U/S. 150 OF THE ACT W ILL NOT BE APPLICABLE IN VIEW OF PROVISIONS OF SEC. 153(3) AND EXPLANATION 2 THEREOF . HENCE, WE HOLD THAT THE NOTICE U/S. 148 ISSUED BY THE A.O. TO ASSESS THE ALLEGED AGRICU LTURAL INCOME AS INCOME OF THE ASSESSEE, IN THE FACTS AND CIRCUMSTANCES OF THE CAS E, IS JUSTIFIED. 11 17. IN RESPECT OF THE ALTERNATIVE PLEA TAKEN BY TH E ASSESSEE THAT IF THE AGRICULTURAL INCOME IS TO BE TAKEN AS REGULAR INCOME OF THE ASSE SSEE, THE EXPENDITURE INCURRED ON SUCH AGRICULTURAL INCOME SHOULD BE ALLOWED, WE FIND SUBSTANCE IN THE SAID CONTENTION OF THE LD. A/R. WE OBSERVE THAT THE ASSESSEE VIDE HIS LETTER DATED 30/3/2000, AT THE TIME OF MAKING THE ORIGINAL ASSESSMENT, CONCEDED THAT HE COULD NEITHER SUBSTANTIATE THE AGRICULTURAL INCOME NOR THE EXPENSES INCURRED, AS C LAIMED BY HIM. IN VIEW OF THE ABOVE LETTER OF THE ASSESSEE DATED 30/3/2000, THE AGRICUL TURAL INCOME SHOWN BY THE ASSESSEE WAS ASSESSED AS REGULAR INCOME OF THE ASSESSEE. WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE MUST HAVE INCURRED THE EXPENDITURE TO EARN THE SAID INCOME SHOWN AS AGRICULTURAL INCOME BY THE ASSESSEE. WE ARE OF THE CONSIDERED VIEW THAT THE NET AMOUNT CREDITED BY THE ASSESSEE IN HIS P/L ACCOUNT SHOULD BE CONSIDERED AS REGULAR INCOME OF THE ASSESSEE AND NOT THE GROSS AMOUNT OF INCOME AS SHOWN BY THE ASSESSEE AS AGRICULTURAL INCOME. THEREFORE, WE HOLD THAT THE I NCOME OF RS.2,77,380/-, THE NET AMOUNT SHOWN BY THE ASSESSEE, SHOULD BE CONSIDERED AS INCOME OF THE ASSESSEE FROM OTHER SOURCES AS AGAINST RS.3,15,370/- ADDED BY THE AUTHORITIES BELOW. 18. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS A LLOWED IN PART, AS INDICATED ABOVE. ITA NO. 835/KOL/2010 (RADHA KISHAN SOMANI) : ITA NO. 837/KOL/2010 (SHYAM SUNDAR SOMANI) : ITA NO. 838/KOL/2010 (LAXMI NARAYAN SOMANI) : 19. NOW WE TAKE UP THE APPEALS FOR ASSESSMENT YEAR 1997-98 FILED BY THE AFORESAID THREE ASSESSES BEING I.T.A. NOS. 835, 837 & 838 (KO L)/2009. 20. THE GROUNDS RAISED IN ALL THESE APPEALS ARE ID ENTICAL TO THOSE OF ITA NO. 836 (KOL)/10, REPRODUCED IN PARA-3 ABOVE. THE LD. REPRE SENTATIVES OF THE PARTIES SUBMITTED THAT THEIR SUBMISSIONS ARE SAME AS WERE FOR ITA NO. 836 (KOL)/20 IN THE CASE OF CHUNNI LAL SOMANI. THEREFORE, FOR THE DETAILED REASONS DI SCUSSED HEREINABOVE IN THE CASE OF CHUNNI LAL SOMANI, WE ARE OF THE CONSIDERED VIEW TH AT THE NET AMOUNT CREDITED BY THE ASSESSEE(S) IN HIS/THEIR P/L ACCOUNT SHOULD BE CONS IDERED AS REGULAR INCOME OF THE ASSESSEE(S) AND NOT THE GROSS AMOUNT OF INCOME AS S HOWN BY THE ASSESSEE(S) AS AGRICULTURAL INCOME. THEREFORE, WE HOLD THAT THE I NCOME OF RS.2,97,259/-, RS.3,90,513/- AND RS.3,18,302/-, THE NET AMOUNT SHOWN BY THE AFOR ESAID RESPECTIVE ASSESSEE(S), SHOULD 12 BE CONSIDERED AS INCOME OF THE ASSESSEE(S) FROM OTH ER SOURCES AS AGAINST RS.3,28,415/-, RS.4,64,881/- AND RS.3,42,290/- RESPECTIVELY ADDED BY THE AUTHORITIES BELOW. 21. IN THE RESULT, THESE THREE APPEALS OF THE AF ORESAID ASSESSEE(S) ARE ALLOWED IN PART, AS INDICATED ABOVE. 22. TO SUM UP, ALL THE FOUR APPEALS OF THE ASSESSE S ARE ALLOWED IN PART, AS INDICATED ABOVE. 4 !3 '5! 6 5% 7 48 THIS ORDER IS PRONOUNCED IN OPEN COURT ON 30.07.2010. SD/- SD/- ( . .. . . .. . ) !' ( . . . . . . . . ) (C.D.RAO) , ACCOUNTANT MEMBER (B.R.MITTAL) , JUDICIAL MEMBER ( (( ( ' ' ' ') )) ) DATE: 30-07-2010 # # # # / ITA NOS. 835 TO 838 (KOL) OF 2010 !3 1 /$$9 :!9';- COPY OF THE ORDER FORWARDED TO : 1. +, / THE APPELLANT : 1) CHUNNI LAL SOMANI; (2) RADHA KISHAN SOMANI; (3) SHYAM SUNDAR SOMANI & (4)LAXMI NARAYAN SOMANI, 143/1/1, COTTON STREET, KOLKATA-700 007. 2 /0+, / THE RESPONDENT : A.C.I.T., CENTRAL CIRCLE-XI, KOLKA TA. 3. $3% () : THE CIT(A), CENTRAL-I, KOLKATA. 4. $3%/ THE CIT, KOL- 4. @$7 /$% / DR, ITAT, KOLKATA BENCHES, KOLKATA 5. GUARD FILE . 09 /$/ TRUE COPY, !3%5/ BY ORDER, (DKP) B C / DEPUTY REGISTRAR .