M/s Paras Rice Mills, Kurukshetra V. DCIT, Kurukshetra

ITSSA 1/CHANDI/2012

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 0289 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 7 month(s) 20 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 10-09-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 05-08-2014
• Assessment Year: misc
• Appeal Filed On: 20-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR AMA RVEER SINGH
• Keywords: Search and seizure; Opportunity of being heard; Principle of natural justice; Block assessment; Bonafide mistake
• Section: 143(3); 244A; 54; 132; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B, CHANDIGARH BEFORE SHRI T.R.SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITSS(A) NO.25 /CHD/2007 BLOCK PERIOD: 1986-87 TO 1996-97 M/S PARAS RICE MILLS, VS. THE A.C.I.T., JHANSA ROAD, CIRCLE KURUKSHETRA. KURUKSHETRA. KURUKSHETRA. PAN: AND ITSS(A) NO.1 /CHD/2012 BLOCK PERIOD: 1.4.1986 TO 26.9.1995 M/S PARAS RICE MILLS, VS. THE D.C.I.T., JHANSA ROAD, CIRCLE KURUKSHETRA. KURUKSHETRA. KURUKSHETRA. PAN: AAHFP1496L (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI TEJ MOHAN SINGH RESPONDENT BY : DR. AMARVEER SINGH, DR DATE OF HEARING : 05.08.2014 DATE OF PRONOUNCEMENT : 10.09.2014 O R D E R PER SUSHMA CHOWLA, J.M. : THE APPEAL FILED BY THE ASSESSEE IN IT(SS)A NO.25/ CHD/2007 IS AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), KARNAL DATED 20.6.2007 AGAINST THE ORDER PASSED UNDER SECT ION 154 OF INCOME TAX ACT, 1961 AND THE APPEAL FILED BY THE ASSESSEE IN IT(SS)A NO.1/CHD/2012 IS AGAINST THE ORDER OF THE DY.COMMIS SIONER OF INCOME TAX, KURUKSHETRA DATED 16.11.2011 AGAINST THE ORDER PASSED UNDER SECTION 143(3) R.W.S. 254 OF INCOME TAX ACT, 1961 ( IN SHORT THE ACT). 2 2. THE PRESENT APPEALS ARE FIXED FOR HEARING BEFORE THE TRIBUNAL PURSUANT TO THE DIRECTIONS OF THE HON'BLE PUNJAB & HARYANA HIGH COURT IN ASSESSEES OWN CASE IN ITA NO.657/CHD/2009 , DATE OF DECISION 21.4.2010. 3. BOTH THE APPEALS RELATING TO THE SAME ASSESSEE W ERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS CONSOLI DATED ORDER FOR THE SAKE OF CONVENIENCE. IT(SS)A NO.25/CHD/2007 : 4. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN IT(SS)A NO.25/CHD/2007 READ AS UNDER: 1. THAT THE ID. COMMISSIONER OF INCOME TAX (APPEALS) H AS ERRED IN LAW IN HOLDING THAT HE HAS NO JURISDICTION OVER THE CASE OF THE AS SESSEE WHICH IS UNJUSTIFIED AND ILLEGAL. 2. THAT THE ID. COMMISSIONER OF INCOME TAX (APPEALS) H AS ERRED IN SUMMARILY REJECTING THE APPEAL WITHOUT DECIDING THE VARIOUS G ROUNDS OF APPEAL RAISED BEFORE HIM WHICH IS ARBITRARY AND UNJUSTIFIED. 3. THAT THE ID. ASSESSING OFFICER HAD ALSO PASSED THE ORDER WITHOUT AFFORDING PROPER OPPORTUNITY OF BEING HEARD WHICH IS AGAINST THE SET TLED PRINCIPLES OF NATURAL JUSTICE. 4. THAT THE BLOCK ASSESSMENT ORDER PASSED UNDER SECTIO N 158 BC HAVING BEEN QUASHED BY THE HON'BLE ITAT ON LEGAL GROUNDS, THE D EMAND RAISED ON THE BASIS OF BLOCK ASSESSMENT ORDER IS REDUCED TO NIL AND THE AS SESSING OFFICER HAVING RAISED A DEMAND OF TAX ON THE BASIS OF QUASHED ORDER IS ILLE GAL AND UNJUSTIFIED, THE ADJUDICATION ON FACTS BEING ONLY ACADEMIC IN NATURE & NON OPERATIONAL ON ACCOUNT OF THE WHOLE PROCEEDING AGAINST THE APPELLANT HAVIN G BEEN QUASHED AND ONLY THIS PART OF THE ORDER BEING OPERATIVE UNDER THE LAW. 5. THAT THE ID. ASSESSING OFFICER HAS FURTHER ERRED IN HOLDING THAT NO INTEREST U/S 132B IS PAYABLE TO THE ASSESSEE WHICH IS AGAINST TH E STATUTORY PROVISIONS AND AS SUCH THE 6. THAT IN ANY CASE, THE ORDER OF THE ASSESSING OFFICE R STANDS MERGED WITH THE ORDER OF THE CIT (A) AND AS SUCH THE GROUNDS RAISED BEFORE T HE CIT (A) ARE LIABLE TO BE ADJUDICATED BY THIS HON'BLE BENCH CONDONING THE DEL AY IN FILING OF APPEAL DIRECTLY TO THIS HON'BLE BENCH AGAINST THE ORDER OF THE ASSE SSING OFFICER IN VIEW OF THE PROVISIONS OF THE LIMITATION ACT. 7. THAT THE ORDER OF CIT (A) IS ERRONEOUS, ARBITRARY, OPPOSED TO THE FACTS OF THE CASE AND IS UNSUSTAINABLE IN LAW. 3 5. THE LEARNED A.R. FOR THE ASSESSEE AT THE OUTSET POINTED OUT THAT THE GROUND OF APPEAL NOS.1 TO 4 ARE NOT PRESSE D AND HENCE THE SAME ARE DISMISSED AS NOT PRESSED. 6. THE ISSUE RAISED VIDE GROUND NO.6 AS PER THE LEA RNED A.R. FOR THE ASSESSEE HAD BECOME ACADEMIC AS THE DELAY IN FI LING THE APPEAL WAS CONDONED BY THE HON'BLE HIGH COURT AND HENCE TH E SAID GROUND OF APPEAL NO.6 IS ALSO DISMISSED. 7. THE ONLY ISSUE RAISED IN THE PRESENT APPEAL IS V IDE GROUND NO.5 WHICH IS AGAINST NON-ALLOWABILITY OF INTEREST UNDER SECTION 132B OF THE ACT. 8. THE BRIEF FACTS OF THE CASE ARE THAT SEARCH AND SEIZURE PROCEEDINGS WERE CONDUCTED AT THE PREMISES OF THE A SSESSEE ON 26.9.1995. THE ASSESSMENT IN THE CASE WAS COMPLET ED UNDER SECTION 158 BC OF THE ACT FOR THE BLOCK PERIOD 1.4. 1985 TO 26.1995 ON 27.9.1996 AT TOTAL UN-DISCLOSED INCOME OF RS.1,4 1,75,090/-. THE NET TAX PAYABLE AFTER ASSESSMENT WAS RS.85,05,0 54/-. THEREAFTER AFTER GIVING APPEAL EFFECT TO THE ORDER OF THE TRIBUNAL, THE INCOME OF THE ASSESSEE WAS RECOMPUTED AT RS.14, 12,334/- AND REFUND OF RS.9,51,500/- INCLUDING INTEREST UNDER SE CTION 244A WAS ALLOWED TO THE ASSESSEE VIDE ORDER DATED 20.11.2003 . THE ASSESSEE THEREAFTER MOVED AN APPLICATION UNDER SECT ION 154 OF THE ACT DATED 26.4.2006 AND POINTED OUT THAT SUM OF RS. 11 LAC WAS RECEIVED BY THE DEPARTMENT OUT OF SALE PROCEEDS OF THE SEIZED RICE, ON WHICH INTEREST @ 15% WAS PAYABLE UNDER SECTION 1 32B OF THE ACT. THE ASSESSING OFFICER VIDE ORDER PASSED UNDE R SECTION 154 OF THE ACT DATED 31.10.2006 OBSERVED THAT THE SAID CONTENTION OF THE ASSESSEE WAS NOT IN CONFORMITY WITH THE PROVISI ONS OF LAW. 4 THE SAID REQUEST OF THE ASSESSEE WAS THUS REJECTED. HOWEVER, CERTAIN OTHER MISTAKE NOTED BY THE ASSESSING OFFICE R WAS CORRECTED BY THE ASSESSING OFFICER AND INTEREST UNDER SECTION 244A OF THE ACT WAS REWORKED. 9. THE CIT (APPEALS) WAS OF THE VIEW THAT SINCE THE ORDER UNDER SECTION 154 OF THE ACT WAS PASSED UNDER SECTION 158 BC OF THE ACT, AGAINST WHICH DIRECT APPEAL LIES TO THE TRIBUNAL. T HE CIT (APPEALS) HAD NO JURISDICTION OVER THE CASE OF THE ASSESSEE. 10. THE ASSESSEE IS IN APPEAL AGAINST THE SAID ORDE R OF THE CIT (APPEALS). 11. SHRI TEJ MOHAN SINGH APPEARED FOR THE ASSESSEE AND VEHEMENTLY ARGUED THAT THE INTEREST UNDER SECTION 1 32B OF THE ACT WAS ALLOWABLE TO THE ASSESSEE. 12. THE LEARNED D.R. FOR THE REVENUE POINTED OUT TH AT IN VIEW OF THE PROVISIONS OF THE ACT NO SUCH INTEREST WAS DUE TO THE ASSESSEE. 13. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. IN THE FACTS OF THE CASE, PURSUANT TO THE ORDER PAS SED UNDER SECTION 158BC OF THE ACT, DIRECT APPEAL WAS FILED BEFORE TH E TRIBUNAL IN WHICH THE INITIAL INCOME DETERMINED BY THE ASSESSIN G OFFICER WAS SUBSTANTIALLY REDUCED RESULTING IN REFUND TO THE AS SESSEE. THEREAFTER AN APPLICATION UNDER SECTION 154 OF THE ACT WAS MOVED BY THE ASSESSEE CLAIMING INTEREST UNDER SECTION 132 B OF THE ACT AGAINST THE MONEY REALIZED OUT OF SEIZED ASSETS BEI NG ADJUSTED AGAINST THE TAXES DUE FROM THE ASSESSEE. THE SAID PLEA OF THE ASSESSEE WAS REJECTED BY THE ASSESSING OFFICER. T HE CIT (APPEALS) DID NOT ENTERTAIN THE APPEAL AS DIRECT AP PEAL WAS TO BE FILED AGAINST THE ORDER UNDER SECTION 158BC OF THE ACT AND 5 THEREAFTER IF ANY RECTIFICATION UNDER SECTION 154 O F THE ACT WAS TO BE CARRIED OUT, THEN THE ISSUE IS TO BE SETTLED BY THE TRIBUNAL AND NOT BY THE CIT (APPEALS). THEREAFTER THE ASSESSEE PREFERRED AN APPEAL BEFORE THE TRIBUNAL ON 18.08.2007. FOR THE P ERIOD FROM PASSING OF THE ORDER UNDER SECTION 154 OF THE ACT A ND TILL THE FILING OF THE APPEAL BEFORE THE TRIBUNAL, THERE WAS DELAY OF 242 DAYS, WHICH WAS NOT CONDONED BY THE TRIBUNAL. THE ASSES SEE MOVED AN APPEAL BEFORE THE HON'BLE PUNJAB & HARYANA HIGH COU RT. THE HON'BLE PUNJAB & HARYANA HIGH COURT IN ITA NO.657 0 F 2009 DATE OF DECISION 21.4.2010 HELD THAT WHERE THE ASSE SSEE WAS PURSUING THE REMEDY AT A WRONG FORUM IN A BANAFIDE BELIEF THAT THE APPEAL WAS COMPETENT BEFORE THE CIT (APPEALS), KARN AL, THE TRIBUNAL SHOULD HAVE CONDONED THE DELAY. THE HON' BLE HIGH COURT HELD THAT THERE WAS BONAFIDE MISTAKE IN PURSU ING THE REMEDY BEFORE THE CIT (APPEALS), KARNAL, WHICH IN TURN HAD CAUSED DELAY IN FILING THE APPEAL BEFORE THE TRIBUNAL TO THE EXT ENT OF 242 DAYS. THE ORDER OF THE TRIBUNAL WAS THUS SET ASIDE AND DI RECTION WAS ISSUED TO THE TRIBUNAL TO ENTERTAIN THE APPEAL AND DECIDE THE SAME ON MERITS. CONSEQUENTLY, THE PRESENT APPEAL WAS LI STED FOR HEARING BEFORE US. 14. THE ISSUE RAISED IN THE PRESENT APPEAL IS IN RE SPECT OF ALLOWABILITY OF INTEREST UNDER SECTION 132B OF THE ACT. THE PRE- AMENDED PROVISIONS OF SECTION 132B OF THE ACT READS AS UNDER: 132B. APPLICATION OF SEIZED OR REQUISITIONED ASSE TS.- (1) THE ASSETS RETAINED UNDER SUB-SECTION (5) OF SECTION 132 MAY BE DEALT WITH IN THE FOLLOWING MANNER, NAMELY :- (I) THE AMOUNT OF ANY EXISTING LIABILITY REFERR ED TO IN CLAUSE (III) OF THE SAID SUB-SECTION AND THE AMOUNT OF THE LIABILITY DETERMI NED ON COMPLETION OF THE REGULAR ASSESSMENT OR REASSESSMENT FOR ALL THE ASS ESSMENT YEARS RELEVANT TO THE PREVIOUS YEARS TO WHICH THE INCOME REFERRED TO IN C LAUSE (I) OF THAT SUB-SECTION RELATES (INCLUDING ANY PENALTY LEVIED OR INTEREST P AYABLE IN CONNECTION WITH SUCH 6 ASSESSMENT OR REASSESSMENT) ANDIRON WHICH HE IS IN DEFAULT OR IS DEEMED TO BE IN DEFAULT MAY BE RECOVERED OUT OF SUCH ASSETS. (II) IF THE ASSETS CONSIST SOLELY OF MONEY, OR PARTLY OF MONEY AND PARTLY OF OTHER ASSETS, THE ASSESSING OFFICER MAY APPLY SUCH MONEY IN THE DISCHARGE OF THE LIABILITIES REFERRED TO IN CLAUSE (I) AND THE ASSES SEE SHALL BE DISCHARGED OF SUCH LIABILITY TO THE EXTENT OF THE MONEY SO APPLIED; (III) THE ASSETS OTHER THAN MONEY MAY ALSO BE A PPLIED FOR THE DISCHARGE OF ANY SUCH LIABILITY REFERRED TO IN CLAUSE (I) AS REM AINS UNDISCHARGED AND FOR THIS PURPOSE SUCH ASSETS SHALL BE DEEMED TO BE UNDER DIS TRAINT AS IF SUCH DISTRAINT WAS EFFECTED BY THE ASSESSING OFFICER OR, AS THE CA SE MAY BE, THE TAX RECOVERY OFFICER UNDER AUTHORISATION FROM THE CHIEF COMMISSI ONER OR COMMISSIONER UNDER SUB-SECTION (5) OF SECTION 226 AND THE ASSESS ING OFFICER OR, AS THE CASE MAY BE, THE TAX RECOVERY OFFICER MAY RECOVER THE AM OUNT OF SUCH LIABILITIES BY THE SALE OF SUCH ASSETS AND SUCH SALE SHALL BE EFFE CTED IN THE MANNER LAID DOWN IN THE THIRD SCHEDULE. (2) NOTHING CONTAINED IN SUB-SECTION (1) SHALL PREC LUDE THE RECOVERY OF THE AMOUNT OF LIABILITIES AFORESAID BY ANY OTHER MODE LAID DOWN I N THIS ACT. (3) ANY ASSETS OR PROCEEDS THEREOF WHICH REMAIN AFT ER THE LIABILITIES REFERRED TO IN CLAUSE (I) OF SUB-SECTION (1) ARE DISCHARGED SHALL BE FORTHWITH MADE OVER OR PAID TO THE PERSONS FROM WHOSE CUSTODY THE ASSETS WERE SEIZED. (4) (A) THE CENTRAL GOVERNMENT SHALL PAY SIMPLE INT EREST AT THE RATE OF FIFTEEN PER CENT PER ANNUM ON THE AMOUNT BY WHICH THE AGGREGATE AMOU NT OF MONEY RETAINED UNDER SECTION 132 AND OF THE PROCEEDS, IF ANY, OF THE ASS ETS SOLD TOWARDS THE DISCHARGE OF THE EXISTING LIABILITY REFERRED TO IN CLAUSE (III) OF S UB-SECTION (5) OF THAT SECTION EXCEEDS THE AGGREGATE OF THE AMOUNTS REQUIRED TO MEET THE LIABI LITIES REFERRED TO IN CLAUSE (I) OF SUB- SECTION (1) OF THIS SECTION. (B) SUCH INTEREST SHALL RUN FROM THE DATE IMMEDIATE LY FOLLOWING THE EXPIRY OF THE PERIOD OF SIX MONTHS FROM THE DATE OF THE ORDER UNDER SUB -SECTION (5) OF SECTION 132 TO THE DATE OF REGULAR ASSESSMENT OR REASSESSMENT REFERRED TO I N CLAUSE (I) OF SUB-SECTION (1) OR, AS THE CASE MAY BE, TO THE DATE OF LAST OF SUCH ASSESS MENTS OR REASSESSMENTS. 15. THE PROVISIONS OF SECTION 132B OF THE ACT LAYS DOWN THE PROCEDURE IN RELATION TO THE APPLICATION OF RETAINE D ASSETS I.E. THE ASSETS RETAINED UNDER SUB-SECTION (5) OF SECTION 13 2 OF THE ACT PURSUANT TO SEARCH CARRIED OUT AT THE PREMISES OF T HE PERSON. FURTHER UNDER SUB-SECTION (4) IT IS PROVIDED THAT T HE CENTRAL GOVERNMENT SHALL PAY SIMPLE INTEREST @ 15% PER ANNU M ON THE AMOUNT BY WHICH THE AGGREGATE AMOUNT OF MONEY RETAI NED UNDER SECTION 132 AND/OR ON ACCOUNT OF THE SALE PROCEEDS OF ANY ASSETS TOWARDS DISCHARGE OF LIABILITY, EXCEEDS THE AGGREGA TE OF THE AMOUNT REQUIRED TO MEET THE LIABILITY AS PER SECTION 132B( 1)(I) OF THE ACT. 7 CLAUSE (B) TO SECTION 132B (4) OF THE ACT PROVIDES THAT THE INTEREST WOULD BE PAID IMMEDIATELY FOLLOWING THE EXPIRY OF P ERIOD OF SIX MONTHS FROM THE DATE OF THE ORDER UNDER SECTION 132 (5) OF THE ACT TO THE DATE OF REGULAR ASSESSMENT OR RE-ASSESSMENT AS REFERRED TO IN SECTION 132B(1)(I) OF THE ACT. IN OTHER WORDS, WH ERE CERTAIN MONEYS ARE RETAINED UNDER SECTION 132 OF THE ACT OR MONEY IS REALISED FROM THE SALE PROCEEDS OF THE ASSETS SOLD BY THE DEPARTMENT TO MEET THE LIABILITIES OF THE PERSON SE ARCHED, THEN WHERE THE SAID AMOUNT REALIZED BY THE DEPARTMENT EX CEEDS THE TAX LIABILITIES OF THE ASSESSEE, THEN THE INTEREST @ 15 % PER ANNUM IS PAYABLE FROM THE DATE OF PASSING OF THE ORDER UNDER SECTION 132(5) OF THE ACT TO THE DATE OF REGULAR ASSESSMENT OR RE- ASSESSMENT. 16. NOW COMING TO THE FACTS OF THE PRESENT CASE, TH E ASSESSMENT UNDER SECTION 158BC OF THE ACT WAS COMPLETED ON 27. 9.1996 ON TOTAL UN-DISCLOSED INCOME OF RS,1,41,75,090/- AND N ET AMOUNT PAYABLE BY THE ASSESSEE WAS DETERMINED AT RS.85,05, 054/-. THEREAFTER PURSUANT TO THE ORDER PASSED BY THE TRIB UNAL, APPEAL EFFECT WAS ALLOWED TO THE ASSESSEE VIDE ORDER DATED 20.11.2003 UNDER WHICH THE INCOME OF THE ASSESSEE WAS RECOMPUT ED AT RS.14,12,334/- AND REFUND OF RS.9,51,500/- INCLUDIN G INTEREST UNDER SECTION 244A OF THE ACT WAS DETERMINED. BEFO RE PASSING OF THE ORDER GIVING APPEAL EFFECT TO THE ORDER OF THE TRIBUNAL, THERE WAS SALE OF STOCK OF PERISHABLE GOODS BY THE DEPART MENT, WHICH IN TURN WERE SEIZED DURING THE COURSE OF SEARCH AND TH E AMOUNT REALISED ON SUCH SALE OF STOCK WAS ADJUSTED AGAINST THE TAXES PAYABLE BY THE ASSESSEE. THE SAID ADJUSTMENT WAS M ADE ON 11.12.1998 OF RS.5 LACS AND ON 28.12.1998 OF RS.6 L ACS. THE BREAK UP LIABILITY OF THE SAID ADJUSTMENT AGAINST T AXES PAID IS 8 NOTED IN THE ORDER PASSED UNDER SECTION 154/254 OF THE ACT GIVING EFFECT TO THE ORDER OF THE TRIBUNAL VIDE ORDER DATE D 20.11.2003. THE LEARNED A.R. FOR THE ASSESSEE HAS FAIRLY ADMITT ED THAT THE AMOUNT REALISED ON THE SALE OF SEIZED ASSETS WAS AD JUSTED AGAINST THE TAXES DUE ON THE ASSESSEE ON 11.12.1998 AND 28. 12.1998 RESPECTIVELY. THE COPY OF THE SAID ORDER IS PLACE D AT PAGES 163 AND 164 OF THE PAPER BOOK. THE ASSESSEE HAD ALSO PLACED ON RECORD COPY OF THE ASSESSMENT ORDER PASSED UNDER SE CTION 158BC OF THE ACT AT PAGES 1 TO 27 OF THE PAPER BOOK, WHICH W AS PASSED ON 27.9.1996. IN OTHER WORDS, THE DATE OF REGULAR AS SESSMENT IN THE CASE OF THE ASSESSEE IS 27.9.1996. HOWEVER, THE A MOUNT REALISED ON SALE OF SEIZED ASSETS WERE ADJUSTED ON 11.12.199 8 AND 28.12.1998. IT WAS PUT TO THE LEARNED A.R. FOR TH E ASSESSEE AS TO THE DATE OF WHICH THE SAID ASSETS WERE SOLD AND HE REPLIED THAT THE DATES OF ADJUSTMENT ARE THE DATES ON WHICH THE SAID SALES SEEMED TO HAVE BEEN MADE AS NO OTHER DETAILS WERE AVAILABLE W ITH THE ASSESSEE. IN VIEW THEREOF, IT IS CLEAR THAT THE SAID SALE OF ASSETS AND REALISATION OF MONEY WAS AFTER THE DATE OF PASS ING OF THE REGULAR ASSESSMENT. 17. UNDER THE PROVISIONS OF SECTION 132B(4)(B) OF T HE ACT, THE INTEREST DUE TO THE ASSESSEE STARTS FROM THE DATE O F ORDER PASSED UNDER SECTION 132(5) OF THE ACT TO THE DATE OF REGU LAR ASSESSMENT OR RE-ASSESSMENT IN THE HANDS OF THE ASSESSEE. AD MITTEDLY, THE REGULAR ASSESSMENT IN THE CASE OF THE ASSESSEE WAS MADE ON 27.9.1996 AND TILL THEN NO MONEY WAS REALISED ON TH E SALE OF THE ASSETS SEIZED BY THE DEPARTMENT. IN THE ABSENCE OF THE SAME, WE FIND NO MERIT IN THE CLAIM OF THE ASSESSEE IN RELAT ION TO THE INTEREST DUE UNDER SECTION 132B OF THE ACT. AS PO INTED OUT IN 9 PARAS HEREINABOVE THAT CONSEQUENT TO THE REGULAR AS SESSMENT MADE UNDER SECTION 158BC OF THE ACT, THERE WAS HUGE DEMA ND PAYABLE BY THE ASSESSEE AS ON 27.9.1996. THE PROVISIONS OF SECTION 132B OF THE ACT HAVE LIMITED APPLICATION AND THE SAME ARE N OT APPLICABLE TO THE FACTS OF THE PRESENT CASE WHERE THE AMOUNT ON S ALE OF SEIZED ASSETS WAS REALISED AFTER THE DATE OF REGULAR ASSES SMENT. NO DOUBT, THE SAID AMOUNT WAS ADJUSTED AGAINST THE DEM ANDS RAISED AGAINST THE ASSESSEE AND PURSUANT TO THE ORDER OF T HE TRIBUNAL, REFUND WAS DETERMINED, IN THE HANDS OF THE ASSESSEE . ON SUCH REFUND DETERMINED PURSUANT TO APPEAL EFFECT GIVEN B Y THE ASSESSING OFFICER, THE ASSESSEE IS DUE TO RECEIVE THE INTERES T UNDER THE PROVISIONS OF SECTION 244A OF THE ACT, WHICH ADMITT EDLY HAD BEEN ALLOWED TO THE ASSESSEE. IN VIEW THEREOF, WE FIND NO MERIT IN THE CLAIM OF THE ASSESSEE AS TO INTEREST RECEIVABLE UND ER SECTION 132B OF THE ACT AND THE SAME IS REJECTED. THE GROUNDS OF APPEAL RAISED BY ASSESSEE ARE DISMISSED. IT(SS)A NO.1/CHD/2012 18. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN IT(SS)A NO.1/CHD/2012 ARE AS UNDER: 1. THAT THE LD. ASSESSING OFFICER HAS ERRED IN PAS SING THE ORDER UNDER SECTION 143(3) OF THE ACT AS AGAINST SECTION 158BC IN AS MUCH AS T HE PROCEEDINGS BEFORE THE ASSESSING OFFICER WERE IN RESPECT OF THE BLOCK PERIOD 01.04.1 986 TO 26.09.1995 WHICH RENDERS THE ORDER ILLEGAL AND UNJUSTIFIED. 2. THAT THE LD. ASSESSING OFFICER HAS ERRED IN LAW AS WELL AS ON FACTS UPHOLDING THE ADDITION OF RS.14,12,324/- WITHOUT GIVING THE BENEF IT OF TELESCOPING OF THE AMOUNTS AS PER THE DIRECTIONS OF THE HON'BLE IT AT WHICH IS IL LEGAL, ARBITRARY & UNJUSTIFIED. 3. THAT THE LD. ASSESSING OFFICER HAS ERRED IN HOLDING THAT THE CLAIM OF THE ASSESSEE REGARDING UNDISCLOSED EXPENDITURE OF RS.6, 36,496/- HAS ALREADY BEEN TREATED AS UNDISCLOSED INCOME BY THE HON'BLE IT AT AND AS S UCH NO INTERVENTION IS CALLED FOR WHICH IS CONTRARY TO THE FACTS ON RECORD IN AS MUCH AS THE HON'BLE IT AT VIDE ORDER DATED 25.09.2009 HAS SPECIFICALLY DIRECTED THE ASSESSING OFFICER TO CONSIDER THE ASPECT OF TELESCOPING AND AS SUCH THE ORDER OF THE ASSESSING OFFICER IS ILLEGAL, ARBITRARY AND UNJUSTIFIED. 10 4. THAT THE ORDER OF THE LD. ASSESSING OFFICER IS ERRO NEOUS, ARBITRARY, OPPOSED TO LAW AND FACTS OF THE CASE AND IS, THUS, UNTENABLE. 19. THE LEARNED A.R. FOR THE ASSESSEE POINTED OUT T HAT THE ONLY ISSUE RAISED IN THE PRESENT APPEAL WAS IN ALLOWING THE BENEFIT OF TELESCOPE OF THE AMOUNT DETERMINED BY THE TRIBUNAL. THE CASE OF THE ASSESSEE WAS THAT THERE WAS UPHOLDING OF ADDITI ON OF RS.14,12,324/- AND FURTHER THERE WAS UPHOLDING OF U N-DISCLOSED EXPENSES OF RS.6,36,496/- IN THE HANDS OF THE ASSES SEE. THE PLEA OF THE ASSESSEE BEFORE US WAS LIMITED THAT THE SAID ADDITION MADE IN THE HANDS OF THE ASSESSEE SHOULD BE TELESCOPED W ITH THE UN- DISCLOSED EXPENDITURE DETERMINED IN THE HANDS OF T HE ASSESSEE. 20. SHRI TEJ MOHAN SINGH APPEARED ON BEHALF OF THE ASSESSEE AND DR.AMARVEER SINGH PUT IN APPEARANCE ON BEHALF OF TH E REVENUE AND PUT FORWARD THEIR CONTENTIONS. BOTH THE LEARNED A .R. FOR THE ASSESSEE AND THE LEARNED D.R. FOR THE REVENUE PLACE D RELIANCE ON THE DECISION OF THE HON'BLE SUPREME COURT IN ANANTH ARAM VEERASINGHAIAH & CO. VS. CIT [123 ITR 457 (SC)]. 21. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ORIGINAL ASSESSMENT IN THE CASE WAS COMPLETED U NDER SECTION 158BC OF THE ACT VIDE ORDER DATED 27.9.1996. THER EAFTER THE TRIBUNAL IN IT(SS)A NO.1118/CHANDI/1996 VIDE ORDER DATED 7.10.2003 GAVE CERTAIN RELIEF TO THE ASSESSEE. CO PY OF THE SAID ORDER IS PLACED AT PAGES 28 TO 147 OF THE PAPER BOO K. CONSEQUENT THERETO, AN ORDER GIVING EFFECT TO THE ORDER OF THE TRIBUNAL WAS PASSED BY THE ASSESSING OFFICER UNDER SECTION 144/2 54 OF THE ACT DATED 20.11.2003, WHICH IS PLACED AT PAGES 148 AND 149 OF THE PAPER BOOK. CONSEQUENT THERETO, THE APPEAL WAS F ILED BEFORE THE CIT (APPEALS) AND THEN BEFORE THE TRIBUNAL AGAINST THE SAID ORDER 11 PASSED UNDER SECTION 154/254 OF THE ACT. THE TRIB UNAL IN IT(SS)A NO.54/CHANDI/2004, VIDE ORDER DATED 25.5.20 09 VIDE PARA 10 ADDRESSED THE ISSUE RAISED BY THE ASSESSEE FOR T ELESCOPING TWO DIFFERENT ADDITIONS MADE ON ACCOUNT OF EXPENDITURE, INCURRED OUTSIDE THE BOOKS OF ACCOUNT AND THE INCOME EARNED OUTSIDE THE BOOKS OF ACCOUNT. THE SAID ISSUE WAS REMITTED BAC K TO THE ASSESSING OFFICER AS NO OPPORTUNITY WAS ALLOWED BY THE ASSESSING OFFICER. IN THE SECOND ROUND BOTH THE ASSESSING O FFICER AND THE CIT (APPEALS) DID NOT AGREE WITH THE CONTENTION OF THE ASSESSEE AND HENCE THE PRESENT APPEAL BEFORE US. 22. ON CONSIDERATION OF RELEVANT DOCUMENTS AND THE ORDER PASSED BY THE AUTHORITIES BELOW, ADMITTEDLY, THE UN-DISCLO SED INCOME OF RS.5,99,633 WAS DETERMINED IN THE CASE OF THE ASSES SEE AND FURTHER UN-DISCLOSED EXPENDITURE OF RS.6,36,496/- WAS ALSO DETERMINED IN THE HANDS OF THE ASSESSEE. BOTH THE UN-DISCLOSED INCOME AND UN- DISCLOSED EXPENDITURE WERE ADJUDICATED BY THE TRIBU NAL VIDE ORDER DATED 7.10.2003. THE PLEA OF THE ASSESSEE BEFORE US IS LIMITED THAT ONCE THE UN-DISCLOSED INCOME IS DETERMINED IN THE HANDS OF THE ASSESSEE THAT PROVES THAT THEE IS AVAILABILITY OF FUNDS WITH THE ASSESSEE, WHICH IN TURN COULD BE UTILIZED FOR INCUR RING EXPENDITURE OUTSIDE THE BOOKS OF ACCOUNT. IN THE TOTALITY OF THE FACTS AND CIRCUMSTANCES WHERE UN DISCLOSED INCOME HAS BEEN D ETERMINED IN THE HANDS OF THE ASSESSEE, WE FIND MERIT IN THE PLE A OF THE ASSESSEE THAT THERE IS AVAILABILITY OF FUNDS WITH THE ASSESS EE , WHICH IN TURN CAN BE SAID TO HAVE BEEN UTILIZED FOR MEETING UN-EX PLAINED EXPENDITURE. IN VIEW THEREOF, WE HOLD THAT THE TE LESCOPING OF UN- DISCLOSED INCOME AGAINST UN-DISCLOSED EXPENDITURE M ERITS TO BE ALLOWED TO THE ASSESSEE AND ADDITION OF THE BALANCE NET UN- 12 DISCLOSED EXPENDITURE OF RS.36,863/- IS TO BE MADE IN THE HANDS OF THE ASSESSEE. THE GROUNDS OF APPEAL RAISED BY ASSES SEE ARE ALLOWED. 23. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITSS(A ) NO. 25/CHD/2007 IS DISMISSED AND ITSS (A) NO. 1/CHD/201 2 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 10 TH DAY OF SEPTEMBER, 2014. (T.R.SOOD) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 10 TH SEPTEMBER, 2014 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH