Shibu Soren, New Delhi V. ACIT, New Delhi

ITSSA 100/DEL/1997

• Counselvise Citation: [2011] 124 COUNSELVISE.COM (IT) 8110 (ITAT-DELHI)
• Duration Of Justice: 14 year(s) 3 month(s) 4 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 02-09-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 24-04-2017
• Assessment Year: misc
• Appeal Filed On: 28-05-1997
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RASHMI CHOPRA ADV ITSS DEL
• Assessee Lawyers: R P MALL
• Keywords: Unexplained investment; Gift; Depreciation; Principle of natural justice; Opportunity of cross examination; Period of limitation; Block assessment; Revised return; Reason to believe; Unabsorbed depreciation; Reassessment proceedings
• Section: 69C; 142(1); 133A; 147; 131; 148; 132; 144; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A BEFORE SHRI R. P. TOLANI, JUDICIAL MEMBER AND SHRI A. K. GARODIA, ACCOUNTANT MEMBER I.T.(SS) NO. 100/ DEL/1997 (BLOCK PERIOD 01.04.1986 TO 26.04.1996 SHRI SHIBU SOREN, 17, GURUDWARA RAKAB GANJ ROAD, NEW DELHI VS. ACIT, CC-6, NEW DELHI PAN/GIR NO. : 275 / ACIT, CC6, ND (APPELLANT) .. (RESPONDENT) APPELLANTS BY: S/SHRI SALIL AGGARWAL, ABHIK KUMAR, ANIL SHARMA, GAUTAM JAIN & R P MALL, ADV. RESPONDENT BY: SMT. RASHMI CHOPRA, STANDING COUNSEL , ADV. IT(SS) 95/DEL/1997 (BLOCK PERIOD 01.04.1986 TO 26.04.1996) SHRI SURAJ MANDAL, VS. ACIT, CC-6, B-26, SHALIMAR APARTMENT, NEW DELHI MASJID MOTH, NEW DELHI APPELLANT BY: SHRI K SAMPATH, NIKHIL MEHTA ADVOCAT ES RESPONDENT BY: MRS. RASHMI CHOPRA, STANDING COUNSE L, ADV. IT(SS) 99/DEL/1997 (BLOCK ASSESSMENT PERIOD 01.04.1986 TO 26.04.1996) SHRI SIMON MARANDI, VS. ACIT, CC-6, B-25, SHALIMAR APARTMENT, NEW DELHI MASJID MOTH, NEW DELHI APPELLANT BY: SHRI ASHOK SIKKA, ADVOCATE RESPONDENT BY: MRS. RASHMI CHOPRA, STANDING COUNSEL , ADVOCATE. IT(SS) 91/DEL/1997 (BLOCK ASSESSMENT PERIOD 01.04.1986 TO 14.04.1996) I.T.(SS)A.NO 91, 95, 99 & 100/DEL/1997 AND 54/DEL/1998 2 SHRI SHAILENDRA MAHTO, VS. ACIT, CC-6, JE-34, KHIRKI EXTENSION, NEW DELHI MALVIYA NAGAR, NEW DELHI APPELLANT BY: SHRI SANTOSH PATHAK, ALOK PERIWAL, AD V. RESPONDENT BY: MRS. RASHMI CHOPRA, STANDING COUNSEL ADVOCATE. I.T.(SS) NO. 54/ DEL/1998 (BLOCK PERIOD 1987-88 TILL 27.09.1996) JHARKHAND MUKTI MORCHA PARTY (JMM) THROUGH CHIEF EXECUTIVE OFFICER C/O SHRI SHIBU SOREN, 17, GURUDWARA RAKAB GANJ ROAD, NEW DELHI VS. ACIT, CC-6, NEW DELHI APPELLANT BY: SHRI SALIL AGGARWAL, ABHIK KUMAR, ANI L SHARMA, GAUTAM JAIN & R.P. MALL, ADVOCATES RESPONDENT BY: MRS. RASHMI CHOPRA, STANDING COUNSE L ADVOCATE. DATE OF CONCLUSION OF HEARING : 03.06.2011 DATE OF PRONOUNCEMENT : 02.09.2011 O R D E R PER SHRI A. K. GARODIA, AM:- OUT OF THIS BUNCH OF 5 APPEALS, ALL THE APPEALS AR E FILED BY THE ASSESSEES. THE FOUR APPEALS ARE FILED BY FOUR INDIVIDUALS AGAINST RESPECTIVE BLOCK ASSESSMENT ORDER PASSED BY THE A.O. ON 29.04.1997 IN THE CASE OF SRI SIBU SOREN, SRI SURAJ MONDAL, SRI SIMON MARANDI & SRI SHAILENDRA MAHTO. THE REMAINING ONE APPEAL IS FILED IN THE EASE OF JHARKHAND MUKTI MORCHA, A POLITICAL PARTY. THIS APPEAL IS DIRECTED AGAINST THE ASSESSMENT ORDER PASSED BY THE A.O. ON 18.11.1997 U /S 158BC READ WITH SECTION 158BD AND SECTION 144 OF THE INCOME TAX ACT, 1961. THESE APPEALS ARE FIRST APPEALS BEFORE THE TRIBUNAL BECAUSE DURING THAT PERIOD OF T IME, BLOCK ASSESSMENT ORDER WAS REQUIRED TO BE PASSED WITH THE APPROVAL OF CIT AND HENCE, THE 1 ST APPEAL WAS REQUIRED TO BE FILED BEFORE THE TRIBUNAL. IT WAS AGREED BY ALL THE SIDES THAT THE FACTS IN ALL THESE CASES ARE SIMILAR AND INTERCONNECTED AND THE ARGUME NTS ARE ALSO MORE OR LESS SIMILAR I.T.(SS)A.NO 91, 95, 99 & 100/DEL/1997 AND 54/DEL/1998 3 AND HENCE, ALL THESE APPEALS WERE HEARD TOGETHER AN D ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. IT WAS ALSO AGREED BY ALL THE SIDES THAT THE FAC TS DISCUSSED IN THE CASE OF SIBU SOREN MAY BE CONSIDERED AND ON THIS BASIS, ALL THE FOUR APPEALS OF 4 INDIVIDUALS CAN BE DECIDED OF COURSE AFTER CONSIDERING THE ARGUMENTS O F DIFFERENT ADVOCATES APPEARING ON BEHALF OF THE RESPECTIVE ASSESSES WHEREAS FROM THE SIDE OF THE DEPARTMENT, MS. RASHMI CHOPRA, STANDING COUNSEL, ADVOCATE IS ARGUING FOR T HE DEPARTMENT IN ALL THESE FIVE CASES. WE, THEREFORE, NOTE DOWN THE FACTS FROM THE CASE OF SHRI SIBU SOREN, WHICH ARE AS UNDER: 3. IT IS NOTED BY THE A.O. IN THE ASSESSMENT ORDER THAT A SEARCH WARRANT U/S 132(1) OF THE INCOME TAX ACT, 1961 WAS ISSUED AND EXECUTED ON 26.04.1996 AT THE PUNJAB NATIONAL BANK, NOROJI NAGAR, NEW DELHI (HEREINAFTER REFERRED TO AS PNB), IN RESPECT OF FDR 195/SPL/FDR 2000 AND FDR 194 AND ALSO S/B A/ C 18914 AND 19100 HELD BY THE ASSESSEE INDIVIDUALLY AND JOINTLY. IT IS FURTH ER NOTED BY THE A.O. THAT THE AMOUNT OF ALL THESE BANK ACCOUNTS WERE PLACED UNDER PROHIBITO RY ORDER U/S 132(3) OF THE INCOME TAX ACT, 1961. THE A.O. ALSO FURTHER NOTED THAT TH E JURISDICTION OF THIS CASE WAS TRANSFERRED TO ACIT, CENTRAL CIRCLE 7, NEW DELHI W. E.F. 04.12.1996 VIDE THE ORDER OF CIT RANCHI PASSED BY HIM U/S 127 ON 02.12.1996. TH E A.O. NOTED THAT NOTICE U/S 158BC OF THE INCOME TAX ACT, 1961 DATED 07.01.1997 WAS ISSUED AND SERVED ON THE ASSESSEE ASKING HIM TO FILE WITHIN 16 DAYS RETURN O F INCOME IN FORM 2B FOR THE BLOCK PERIOD FROM 01.04.1986 TILL 26.04.1996 AS THE SEARC H WAS INITIATED ON THIS DATE AT HIS BANK ACCOUNTS. IN REPLY, A LETTER WAS SUBMITTED BE FORE THE A.O. ON 24.01.1997SUBMITTING THAT THE ENTIRE DOCUMENTS HAVE BEEN SEIZED BY CBI DURING SEARCH ON 07.09.1996 AND 08/09/1996 AND IT WAS STAT ED THAT SINCE THE ASSESSEE IS YET TO OBTAIN COPIES OF THE DOCUMENTS FROM CBI, HE IS NOT IN A POSITION TO FURNISH THE DETAILS AS REQUESTED. THE A.O. AGAIN NOTED THAT A DETAILED QUESTIONNAIRE ALONG WITH NOTICE U/S 142(1) AND 143(2) WERE ISSUED ON 11.02.1997 AND SER VED ON THE ASSESSEE ASKING HIM TO FURNISH INFORMATION ON VARIOUS POINTS MENTIONED IN THE NOTICE. IT IS ALSO NOTED BY THE A.O. THAT THE NOTICE COVERING DETAILS OF FACTS ALON G WITH COPIES OF THE STATEMENTS OF I.T.(SS)A.NO 91, 95, 99 & 100/DEL/1997 AND 54/DEL/1998 4 VARIOUS WITNESSES RECORDED BY IT DEPARTMENT IN BIHA R IN COURSE OF INVESTIGATION CARRIED OUT BY THE IT DEPARTMENT AS REGARDS TO ALLE GED CLAIM OF THE ASSESSEE THAT THE AMOUNT DEPOSITED IN PNB IN HIS NAME BELONGS TO JHAR KHAND MUKTI MORCHA PARTY (HEREINAFTER REFERRED TO AS JMM), WHO RAISED IT T HROUGH DONATIONS (THIS WAS STATED BY THE ASSESSEE ON STATEMENT RECORDED U/S 131 ON 14.03 .1996 BEFORE ADI UNIT 1, NEW DELHI). THE A.O. HAS ALSO NOTED THAT THE NOTICE ALS O COVERS THE DETAILS OF VARIOUS ASSETS FOR WHICH INFORMATION WAS IN POSSESSION OF THE DEPA RTMENT THAT THESE BELONG TO THE ASSESSEE AND THE ASSESSEE WAS ASKED TO FILE THE SOU RCE OF ACQUISITION OF THESE ASSETS. THE ASSESSEE WAS ALSO ASKED TO FILE DETAILS WITH SO URCE OF ANY OTHER ASSETS OWNED BY THE ASSESSEE BUT NOT INCLUDED IN THE ABOVE LIST. T HE ASSESSEE WAS ALSO ASKED TO GIVE DETAILS OF HIS INCOME AND HOUSE HOLD WITHDRAWALS DU RING THE BLOCK PERIOD. THEREAFTER, SEVERAL ADJOURNMENTS WERE TAKEN BY THE ASSESSEE. IT IS ALSO NOTED BY THE A.O. THAT THE LD. A.R. OF THE ASSESSEE MR. RAJE NDRA GUPTA, CA OBTAINED PHOTOCOPY OF JMM BANK ACCOUNT AND ASSESSEES BANK A CCOUNTS ON 05.03.1997. IT IS ALSO NOTED BY THE A.O. THAT A LETTER DATED 03.03.19 97 ASKING THE ASSESSEE TO CONTACT ADI UNIT 1, NEW DELHI FOR INSPECTION OF THE SEARCH DOCUMENTS, WAS SERVED ON THE LD. A.R. OF THE ASSESSEE ON 05.03.1997. THE MATTER WAS ADJOURNED TO 14.03.1997. ON THAT DATE, I.E. ON 14.03.1997, THE ASSESSEE DID NOT FILE ANY DETAILS AND ASKED FOR ADJOURNMENT. FINAL ADJOURNMENT WAS GRANTED BY THE A.O. AND THE HEARING WAS FIXED FOR 26.03.1997. IT IS NOTED BY THE A.O. THAT A LE TTER WAS ISSUED TO THE ASSESSEE ON 14.03.1997 AND IT WAS SERVED ON THE ASSESSEE ON 15. 03.1997 IN WHICH ASSESSEE WAS INFORMED THAT OPPORTUNITY FOR THE CROSS EXAMINATION OF WITNESSES AND THE STATEMENTS RECORDED IN BIHAR IS BEING PROVIDED AT THE OFFICE O F ADI, RANCHI SHRI A K PANDEY ON 19.03.1997 AT 11.00 AM AND HE MAY USE THIS OPPORTUN ITY FOR CROSS EXAMINATION O THE WITNESSES. THEREAFTER, ON 17.03.1997 LD. A.R., SHR I R. GUPTA APPEARED AND FILED A LETTER DATED 17.03.1997 IN WHICH HE SUBMITTED THAT IT WOULD NOT BE POSSIBLE FOR HIS CLIENT TO GO TO RANCHI FOR THE PURPOSE OF CROSS EXA MINATION OF WITNESSES AND REQUESTED THAT CROSS EXAMINATION MAY BE PROVIDED AT NEW DELHI . THE A.O. NOTED THAT THE REQUEST OF THE ASSESSEE WAS REJECTED ON THE SAME DA TE AND HE WAS ASKED TO TAKE THE I.T.(SS)A.NO 91, 95, 99 & 100/DEL/1997 AND 54/DEL/1998 5 OPPORTUNITY PROVIDED TO HIM AT RANCHI BUT THE ASSES SEE DID NOT TAKE THE OPPORTUNITY OF CROSS EXAMINATION PROVIDED TO HIM AT RANCHI. THERE AFTER, IT IS NOTED BY THE A.O. THAT ON 20.03.1997, THE BLOCK RETURN IN FORM 2B WAS FILE D BY THE ASSESSEE ALONG WITH DETAILS OF INCOME OF VARIOUS YEARS. THEREAFTER, ON 26.03.1997, LD. A.R. SHRI R. GUPTA APPEARED ONCE AGAIN AND REQUESTED FOR ADJOURNMENT. THE A.O. ASKED THE LD. A.R. TO FILE ON 02.04.1997 THE SOURCES OF ALL THE ASSETS AN D DEPOSITS IN THE BANK FAILING WHICH HE WAS ASKED TO SHOW CAUSE WHY THE SAME SHOULD NOT BE ADDED AS HIS UNEXPLAINED INVESTMENT. IT IS FURTHER NOTED BY THE A.O. THAT L D. A.R. WAS ALSO EXPLAINED THAT THE RETURN FILED DOES NOT COMPLETELY EXPLAIN THE SOURCE AND ACQUISITION OF VARIOUS DEPOSITS AND CAPITAL ACCOUNT PAPERS DO NOT GIVE BREAKUP OF C APITAL FIGURES. THEREAFTER ON 02.04.1997, SHRI R. GUPTA, CA WITHDREW HIS POWER OF ATTORNEY W.E.F. THAT DATE AND NO OTHER PERSON APPEARED TO ATTEND THE HEARING FIXED. ON 03.04.1997, A SHOW CAUSE NOTICE U/S 144 WAS SERVED ON THE ASSESSEE, WHICH WAS SENT THROUGH SPEED POST AT DELHI ADDRESS GIVEN IN THE BLOCK RETURN AND THE DATE OF R EPLY WAS FIXED FOR 10.04.1997. THE A.O. ALSO NOTED THAT IN THIS NOTICE, ASSESSEE WAS P OINTED OUT VARIOUS DISCREPANCIES, INCOMPLETE INFORMATION SUBMITTED WITH THE RETURN OF INCOME AND WAS ASKED TO SHOW CAUSE WHY THE ASSESSMENT SHOULD NOT BE COMPLETED ON THE BASIS OF THE MATERIAL AVAILABLE ON RECORD AS REPLY TO ALL THE POINTS COVE RED IN THE QUESTIONNAIRE DATED 11.02.1997 HAVE NOT BEEN FURNISHED. THEREAFTER, ON 10.04.1997, ONE SHRI UMA SHANKAR, NOT IN THE CAPACITY OF LD. A.R. OF THE AS SESSEE APPEARED AND CARRIED A LETTER OF THE ASSESSEE REQUESTING FOR ADJOURNMENT. THE NE XT DATE OF HEARING WAS FIXED FOR 15.04.1997. ON 15.04.1997, SHRI J. JAIPURIAR, CA APPEARED AND FILED POWER OF ATTORNEY BUT DID NOT FILE ANY REPLY. ON HIS REQUES T, THE CASE WAS ADJOURNED TO 17.04.1997. SOME OTHER INFORMATION WAS ALSO CALLED FOR AS PER ORDER SHEET ENTRY DATED 15.04.1997. ON 17.04.1997 SHRI J. JAIPURIAR CA APP EARED AND FILED SOME DETAILS. HE WAS ASKED BY THE A.O. TO FILE REPLY TO THE REMAININ G QUERIES AND FURNISH THE DOCUMENTS IN SUPPORT OF THE SUBMISSIONS AND THE CASE WAS ADJO URNED TO 21.04.1997 AND IT WAS POINTED OUT TO HIM THAT THIS IS THE LAST OPPORTUNIT Y FOR THE ASSESSEE TO FILE EVIDENCE AND EXPLANATION. THE A.O. ALSO NOTED THAT THE ASSESSEE WAS ALSO SERVED WITH COPY OF I.T.(SS)A.NO 91, 95, 99 & 100/DEL/1997 AND 54/DEL/1998 6 STATEMENT OF SHRI SHAILENDRA MAHTO RECORDED BY METR OPOLITAN MAGISTRATE, SHRI RAKESH DADANI ON 22.03.1997 AND WAS ASKED TO EXPLAIN WHY I N VIEW OF THE STATEMENT, THE AMOUNT DEPOSITED IN PNB SHOULD NOT BE HELD AS AMOUN T BELONGING TO PERSON IN WHOSE ACCOUNT IT WAS DEPOSITED. COPY OF THE ORDER U/S 13 2(3) SIGNED AND SERVED BY ADI, UNIT 1, NEW DELHI ON 26.04.1996 WAS ALSO GIVEN. ON 21.04.1997, THE ASSESSEE FIELD A LETTER DATED 21.04.1997 BUT NO INFORMATION WAS FILE D AND THE CASE WAS AGAIN ADJOURNED FOR 22.04.1997. ON THIS DATE ALSO, THE ASSESSEE DI D NOT FILE THE REMAINING INFORMATION IN SUPPORT OF HIS INVESTMENT AND OTHER POINTS AND O NLY A LETTER WAS FILED ON THIS DATE. THEREAFTER, THE A.O. COMPLETED THE ASSESSMENT ON 29 .04.1997. IN THE ASSESSMENT ORDER, THE A.O. ALSO DISCUSSED TH E NATURAL JUSTICE ASPECT AND STATED THAT IT WAS FULLY COMPLIED WITH AND VARIOUS OPPORTUNITIES WERE PROVIDED TO THE ASSESSEE. REGARDING THE CROSS EXAMINATION ALSO, IT IS NOTED B Y THE A.O. IN THE ASSESSMENT ORDER THAT THE ASSESSEE WAS PROVIDED OPP ORTUNITY FOR CROSS EXAMINATION ALTHOUGH THE SAME WAS NOT AVAILED BY THE ASSESSEE. THEREAFTER, IN PARA 18 OF THE ASSESSMENT ORDER, THE A.O. HAS REPRODUCED DETAILS O F VARIOUS DEPOSITS IN VARIOUS BANK ACCOUNTS OF THE ASSESSEE AND OTHER PERSONS WHICH AR E AS UNDER: A/C NO. NAME OF HOLDER AMOUNT RS. DATE 194 SHIBU SOREN, RUPI, HEMANT 30,00,000 1.8.93 AND BASANT 19100 -DO- 2,000 & TFR FROM 1.2.95 A/C NO.194 197 SIMON MARANDI & 12,00,000 1.8.93 SUSHILA HANSDA 21,00,000 & 2.8.93 19037 -DO- TFR FROM A/C NO.197 196 SHAILENDRA MAHTO & 39,00,000 1.8.93 ABHA MAHTO 18983 -DO- TFR FROM A/C NO.196 17108 SURAJ MANDAL 30,00,000 1.8.93 195/SPL SURAJ, SHIBU, SIMON & 30,00,000 1.8.93 SHAILENDRA 18914 -DO- 10,000 & 1.8.93 TFR FROM A/C 195 I.T.(SS)A.NO 91, 95, 99 & 100/DEL/1997 AND 54/DEL/1998 7 3. REGARDING DEPOSITS IN VARIOUS BANK ACCOUNTS AT P NB, IT IS NOTED BY THE A.O. THAT IT WAS THE CLAIM OF THE ASSESSEE BEFORE HIM THAT TH E AMOUNT DEPOSITED IN HIS BANK ACCOUNT BELONG TO JMM PARTY AND THE PARTY ALSO SUBM ITTED THAT ITS MONEY WAS DEPOSITED IN THE BANK SO THAT IT COULD BE USED FOR THE PARTYS ACTIVITIES IN NEW DELHI BUT THIS CONTENTION OF THE ASSESSEE AND THE JMM WAS NOT ACCEPTED BY THE A.O. AND HE HAS REFERRED TO THE STATEMENT GIVEN BY SHRI SHAILEN DRA MAHTO DURING THE COURSE OF TRIAL PROCEEDINGS UNDER THE PROVISIONS OF PREVENTION OF C ORRUPTION ACT IN THE COURT OF SPECIAL JUDGE HONBLE SHRI AJIT BHARIHOKE AND U/S 1 64 CR.P.C. ON 22.03.1997 BEFORE THE METROPOLITAN MAGISTRATE SHRI HARISH DUDANI. T HE A.O. ALSO NOTED THAT IN THE STATEMENT, HE HAS ADMITTED THAT THE AMOUNT DEPOSITE D IN THE PNB IN HIS NAME REPRESENTS THE AMOUNT OF RS.50 LACS RECEIVED BY HIM FOR VOTING AGAINST NO CONFIDENCE MOTION AGAINST THE THEN CENTRAL GOVERNMENT, WHICH W AS PHYSICALLY HANDED OVER TO HIM BY SHRI SIMON MARANDI. THE A.O. ALSO NOTED THA T HE HAS STATED THAT OTHER THREE PERSONS NAMELY SHRI SURAJ MANDAL, SIMON MARANDI AND SHAILENDRA MAHTO ALSO RECEIVED ALMOST THE SIMILAR AMOUNTS WHICH WERE DEPO SITED IN PNB IN THEIR RESPECTIVE BANK ACCOUNTS. THE A.O. HEAVILY RELIED ON THE STAT EMENT OF SRI SHAILENDRA MAHTO IN REJECTING THE CLAIM OF THE ASSESSEE THAT THE AMOUNT DEPOSITED IN THESE BANK ACCOUNTS BELONGS TO JMM. THE A.O. ALSO FURTHER NOTED THAT T HE RESOLUTION FOR AUTHORIZING ALL THESE FOUR MPS TO DEPOSIT THE CASH IN THEIR PERSON AL NAME IS SAID TO BE PASSED ON 11.07.1993 BUT THE SAME IS WRITTEN ON A PLAIN PAPER AND THE ATTESTATION OF THIS DOCUMENT IS ONLY DONE ON 29.03.1996. THE A.O. HAS ALSO NOTED THAT THE USE OF MONEY FOR PERSONAL NEED OF THE ACCOUNT HOLDER IS SOUGHT T O BE EXPLAINED BY THE PLEA OF PERSONAL LOAN. THE A.O. HAS FURTHER NOTED THAT THE PROVISION OF PERSONAL LOAN TO THE MEMBERS @ INTEREST OF 2% P.A. WAS ADDED AFTER THE C LOSING OF THE MEETING AND MOREOVER, NO INTEREST WAS PAID BY THESE MPS ON THES E LOANS. VARIOUS OTHER DISCREPANCIES ARE NOTED BY THE A.O. IN THE ASSESSME NT ORDER WITH REGARD TO ENTRY IN THE BOOKS OF ACCOUNT OF JMM OF THESE LOANS SAID TO BE G RANTED TO VARIOUS MPS. IT IS ALSO NOTED BY THE A.O. THAT THE RETURN OF INCOME OF JMM FOR THE ASSESSMENT YEAR 1994-95 WAS FILED ON 31.03.1996 AFTER RECORDING OF STATEMEN T BY IT DEPARTMENT BUT IN THESE I.T.(SS)A.NO 91, 95, 99 & 100/DEL/1997 AND 54/DEL/1998 8 RETURNS ALSO, THE FDR NO. 195 FOR RS.30 LACS IN THE JOINT NAME OF THESE FOUR PERSONS WAS NOT INCLUDED AND THIS FDR WAS SOUGHT TO BE INCL UDED BY FILING REVISED RETURN. THE A.O. ALSO NOTED THAT THE REVISED RETURN IS SAID TO HAVE BEEN FILED BY JMM ON 23.4.1996 WHICH IS BEYOND THE DATE OF 31.03.1996 UP TO WHICH REVISED RETURN COULD HAVE BEEN FILED. THE A.O. ALSO NOTED THAT AS PER THE STATEME NT OF SHRI SUSHIL KUMAR, IT WAS STATED BY HIM THAT HE HAS INTRODUCED ALL THE ABOVE ACCOUNT S AT PNB AND HE ALSO STATED THAT MONEY WAS BROUGHT IN 5-6 SUITCASES, OUT OF WHICH SO ME BUNDLES OF CURRENCY NOTES CARRIED SLIP OF CANARA BANK, BANGALORE. THE A.O. A LSO OBSERVED THAT THIS SHOWS THAT THE AMOUNT CANNOT BE THE AMOUNT RAISED AS DONATION AT BIHAR SINCE THE DONATION CLAIMED TO HAVE BEEN RECEIVED BY THE PARTY IN SMALL DENOMINATION BELOW RS.10,000/- PER PERSON. THE A.O. ALSO FURTHER NOTED THAT IT IS CLAIMED THAT DONATION COUPONS WERE USED FOR RAISING DONATIONS FOR JMM IN THE FINANCIAL YEAR 1993-94 AND THESE DEPOSITS COUPONS WERE OF THE DENOMINATION OF RS.100/, 500/-, 1,000/-, 2,000/- AND 5,000/-. IT IS FURTHER NOTED THAT THESE ARE PLAIN DONATION COUPONS IN WHICH THE NAMES OF THE DONORS ARE NOT MENTIONED. IT IS FURTHER NOTED BY THE A.O. THAT SHRI S BHATTACHARYA HAS STATED ON 11.07.1996 (COPY GIVEN TO THE ASSESSEE) THAT THE SE DONATION COUPONS WERE PRINTED BY RR PAPER STORES CHAS ROAD, BOKARO IN THE YEAR 1 992 & 1993. THE A.O. FURTHER NOTED THAT HE ALSO STATED THAT IN THE YEAR 1995, DO NATION COUPONS OF JMM WERE PRINTED BY M/S SHETH ART PRINTERS, BYE PASS ROAD, CHAS. TH E A.O. HAS FURTHER NOTED THAT SUBSEQUENTLY, SURVEY U/S 133A OF THE INCOME TAX ACT , 1961 WAS CONDUCTED IN THE BUSINESS PREMISES OF M/S. RR PAPER STORES AND SHETH ART PRINTERS ON 12.07.1996. THE A.O. HAS NOTED THAT THESE FACTS EMERGED IN THE COUR SE OF SURVEY THAT M/S. RR PAPER STORES WAS CLOSED SOMETIME IN SEP 1991 AND HENCE, T HEY COULD NOT HAVE PRINTED THE DONATION COUPONS OF JMM AS HAS BEEN SUBMITTED BY TH E ASSESSEE. REGARDING M/S. SETH ART PRINTERS, IT IS NOTED BY THE A.O. THAT THE RE ARE TWO TYPES OF COUPONS. IN TYPE ONE OF COUPONS, THE YEAR 1991 IS PRINTED BUT THESE COUPONS ARE ONLY OF RS.2 LACS AND WOULD HAVE BEEN USED IN YEAR 1991 & 1992. THE OTHE R TYPE OF COUPONS I.E. TYPE 2 ARE THE COUPONS PRINTED IN THE YEAR 1995 OF RS.100.50 L ACS WHICH BEAR THE MARKING OF SAP WHICH DENOTED SETH ART PRINTERS. THE A.O. ALSO NOT ED THAT AS PER M/S. SETH ART I.T.(SS)A.NO 91, 95, 99 & 100/DEL/1997 AND 54/DEL/1998 9 PRINTERS, THESE COUPONS WERE PRINTED IN JANUARY 199 5 AND HENCE, THE SAME COULD NOT HAVE BEEN USED FOR RAISING DONATION IN THE RELEVANT PERIOD. SOME OTHER ASPECTS WERE ALSO DISCUSSED BY THE A.O. IN THE ASSESSMENT ORDER AND FINALLY, IT IS HELD BY HIM THAT THIS CLAIM OF THE ASSESSEE IS NOT ACCEPTABLE THAT T HE AMOUNTS DEPOSITED IN HIS BANK ACCOUNTS WERE BELONGING TO JMM AND HE HELD THAT THE SE ARE THE AMOUNTS OF RESPECTIVE ACCOUNT HOLDERS. OUT OF THE ACCOUNT NO.195/SPL/FDR 2000 WHICH IS STANDING IN THE JOINT NAME OF SURAJ MANDAL, SHIBU SOREN, SIMON MAR ANDI AND SHAILENDRA MAHTO IN WHICH AN AMOUNT OF RS.30 LACS WAS DEPOSITED ON 01.0 8.1993, THE A.O. DISTRIBUTED THE AMOUNT IN THE HANDS OF THESE FOUR PERSONS AND MADE ADDITION OF RS.7.50 LACS IN EACH CASE. REGARDING THE OTHER BANK ACCOUNT NO.194, WHI CH IS IN THE NAME OF SHRI SHIBU SOREN, RUPI, HEMANT & BASANT IN WHICH RS.30 LACS WA S DEPOSITED ON 01.08.1993, THE ENTIRE AMOUNT WAS ADDED IN THE HANDS OF SHRI SHIBU SOREN. AN AMOUNT OF RS.2,000/- WAS DEPOSITED ON 01.02.1995, IN THE JOINT ACCOUNT I N THE NAME OF THESE FOUR PERSONS; SHIBU SOREN, RUPI, HEMANT & BASANT ACCOUNT NUMBER B EING 19100. THIS AMOUNT OF RS.2,000/- WAS ALSO ADDED IN THE HANDS OF SHRI SHIB U SOREN. SOME AMOUNT WAS TRANSFERRED FROM FDR 194 TO ACCOUNT NO.19100 AND NO ADDITION WAS MADE ON ACCOUNT OF SUCH TRANSFER FROM ONE ACCOUNT TO THE OTHER. FO R DEPOSIT OF RS. 10,000/- ON 01.08.1993 IN SAVING ACCOUNT NO. 18914 STANDING IN JOINT NAMES OF THESE FOUR PERSONS, THE A. O. MADE ADDITION OF RS. 2,500/- IN THE HANDS OF EACH OF THESE FOUR PERSONS. IN ADDITION TO THIS, VARIOUS OTHER ADDITIO NS WERE ALSO MADE BY THE A.O. IN THE BLOCK ASSESSMENT OF SHRI SHIBU SOREN WITH REGARD TO VARIOUS INVESTMENTS AND VARIOUS INCOME SUCH AS SALARY AS MP, INTEREST ETC. TOTAL A DDITION MADE BY THE A.O. IN THE CASE OF SHIBU SOREN IS RS.1,16,38,824/-. OUT OF THIS TO TAL ADDITION OF RS.116.38 LACS, THE ADDITION ON ACCOUNT OF VARIOUS DEPOSITS IN THE BANK ACCOUNT WHICH WAS SUBJECTED TO SEARCH PROCEEDINGS AND INTEREST INCOME THEREON IS A S UNDER: FINANCIAL YEAR DEPOSIT IN THE BANK ACCOUNT (RS.) INTEREST (RS.) 1993-94 37,52,500 1,83,395 1994-95 2,000 2.06,765 1995-96 --- 1,33,675 I.T.(SS)A.NO 91, 95, 99 & 100/DEL/1997 AND 54/DEL/1998 10 APRIL 1996 -- -- 4. SIMILARLY, IN THE CASE OF SIMON MARANDI, AN AMOU NT OF RS.12 LACS WAS DEPOSITED ON 01.08.1993 IN THE JOINT ACCOUNT NO.197 SANDING I N THE NAME OF SIMON MARANDI & SUSHILA HANSDA. IN THE SAME BANK ACCOUNT NO.197, A N AMOUNT OF RS.21 LACS WAS DEPOSITED ON 02.08.1993. THE TOTAL ADDITION ON ACC OUNT OF THESE DEPOSITS IN THE BANK ACCOUNT NO197 IS OF RS.33 LACS AND 1/4 TH OF THE DEPOSIT IN THE JOINT FD 195 I.E. RS.7.50 BEING 1/4 TH OF RS.30 LACS, WAS ALSO ADDED IN THE HANDS OF SHRI SIMON MARANDI. IN ADDITION TO THIS, VARIOUS OTHER ADDITIONS WERE MADE IN THE HANDS OF SHRI SIMON MARANDI ON ACCOUNT OF INTEREST INCOME, ON ACCOUNT O F VARIOUS INVESTMENTS AND ALSO ON ACCOUNT OF SALARY AS MP. THE TOTAL ADDITIONS MADE IN HIS HANDS ARE RS.53,53,620/- INCLUDING ADDITION ON ACCOUNT OF DEPOSITS IN PNB AN D THE INTEREST INCOME AS UNDER: FINANCIAL YEAR DEPOSITS (RS.) INTEREST (RS.) 1993-94 40,52,500 1,10,793 1994-95 -- 1,66,207 1995-96 -- 1,38,229 APRIL 1996 -- -- 5. SIMILARLY, IN THE CASE OF SHRI SHAILENDRA MAHTO, ADDITION WAS MADE ON ACCOUNT OF DEPOSITS IN THE BANK ACCOUNT NO.196 STANDING IN THE NAME OF SHRI SHAILENDRA MAHTO AND ABHA MAHTO BEING THE AMOUNT DEPOSITED OF RS.39. 80 LACS ON 01.08.1993. THERE WAS NO CASH DEPOSIT IN THE S/B ACCOUNT NO.18983 ST ANDING IN THE JOINT NAME OF SHRI SHAILENDRA MAHTO AND ABHA MAHTO EXCEPT TRANSFER FRO M ACCOUNT NO.196 AND HENCE NO ADDITION WAS MADE ON ACCOUNT OF DEPOSITS IN THIS B ANK ACCOUNT. ADDITION ON ACCOUNT OF INTEREST INCOME WAS ALSO MADE. THE TOTAL ADDITI ON MADE IN THE HANDS OF SHRI SHAILENDRA MAHTO IS OF RS.84,12,349/- WHICH INCLUDE S ADDITION ON ACCOUNT OF DEPOSITS IN THE BANK ACCOUNT WITH PNB AND INTEREST INCOME AS UNDER: FINANCIAL YEAR DEPOSITS (RS.) INTEREST (RS.) 1993-94 50,00,000 41,323 1994-95 -- 2,39,581 1995-96 -- 87,944 APRIL 1996 -- -- I.T.(SS)A.NO 91, 95, 99 & 100/DEL/1997 AND 54/DEL/1998 11 6. ALTHOUGH, THE AMOUNT DESPOTIZED IN THE BANK ACCOUNT NO.196 IN THE NAME OF SHRI SHAILENDRA MAHTO AND ABHA MAHTO WAS ONLY RS.39 .80 LACS BUT ADDITION WAS MADE TO THE EXTENT OF RS.50 LACS AS HAS BEEN ADMITTED BY HIM IN HIS STATEMENT THAT THE AMOUNT RECEIVED BY HIM ON ACCOUNT OF VOTING AGAINST NO CONFIDENCE MOTION WAS RS. 50 LACS. 7. SIMILARLY, IN THE CASE OF SHRI SURAJ MANDAL, TOT AL ADDITION MADE BY THE A.O. IS OF RS.1,86,34,834/- WHICH INCLUDES ADDITION MADE ON AC COUNT OF DEPOSITS IN PNB AND INTEREST INCOME THEREON AS UNDER: FINANCIAL YEAR DEPOSITS (RS.) INTEREST (RS.) 1993-94 37,52,500 4,28,323 1994-95 -- 5,37,642 1995-96 -- 11,12,502 APRIL 1996 -- -- 8. IN THE REMAINING CASE OF THE PARTY I.E. JMM, THE ASSESSMENT WAS COMPLETED BY THE A.O. U/S 158BC READ WITH SECTION 158BD, THE TOT AL ADDITION MADE WAS AS UNDER: FINANCIAL YEAR DEPOSITS (RS.) INTEREST (RS.) TOTAL (RS.) 1987-88 NIL NIL NIL 1991-92 NIL NIL NIL 1992-93 10,27,348 16,124 10,46,472 1993-94 38,15,332 74,918 38,90,250 1994-95 1,33,60,000 5,29,016 1,38,89,016 1995-96 23,95,000 10,38,853 34,33,853 1996-97 NIL 10,60,,569 10,60,569 1997-98 NIL 32,000 32,000 UPTO 27.9.97 2,36,19,160 9. THE A.O. FURTHER NOTED THAT OUT OF THIS TOTAL AD DITION TO BE MADE IN THE BLOCK OF RS.2,36,19,160/-, THE AMOUNT OF RS.,1,29,98,449/- H AS ALREADY BEEN ASSESSED ON PROTECTIVE BASIS IN THE REGULAR ASSESSMENT PROCEEDI NGS OF THE ASSESSEE FOR THE ASSESSMENT YEAR 1994-95 AND HENCE, ONLY BALANCE AMO UNT OF RS.1,06,20,711/- HAS BEEN ADDED IN THE BLOCK ASSESSMENT ORDER ON PROTEC TIVE BASIS. I.T.(SS)A.NO 91, 95, 99 & 100/DEL/1997 AND 54/DEL/1998 12 10. NOW, ALL THESE FIVE ASSESSEES ARE IN APPEAL BEF ORE US. 11. IT WAS AGREED BY ALL THE SIDES THAT THE CASE OF SHRI SHIBU SOREN WILL BE ARGUED FIRST AND THE ARGUMENTS RAISED IN THIS CASE WILL BE APPLICABLE IN THE REMAINING THERE CASES OF INDIVIDUAL ALSO AND HENCE ALL THESE FOUR C ASES OF INDIVIDUALS CAN BE DECIDED ON THE BASIS OF ARGUMENTS IN THE CASE OF SHRI SHIBU SO REN. IT WAS AGREED THAT IN THE REMAINING THREE CASES, RESPECTIVE COUNSELS WILL MAK E THEIR SUBMISSIONS ONLY WITH REGARD TO ANY ADDITIONAL ARGUMENTS REQUIRED IN THE FACTS OF THAT CASE. 12. THIS IS THE 1 ST ARGUMENT ON BEHALF OF THE ASSESSEE THAT THERE IS N O SEARCH ON THE ASSESSEE IN THE PRESENT CASE. IT WAS SUBMITTED THAT THE ALLEGED WARRANT OF AUTHORIZATION U/S 132(1) WAS ISSUED IN THE NAME OF PNB NOROJI NAG AR, NEW DELHI WHERE THE ASSESSEE HAS BANK ACCOUNT AND FDRS AND NO WARRANT O F AUTHORIZATION U/S 132(1) WAS ISSUED TO SEARCH THE ASSESSEE. THE 2 ND ARGUMENT IS THAT THOUGH THE SEARCH HAD BEEN CONDUCTED ON THE PNB ON 26.04.1996 BUT THE SAME WAS NOT CONCLUDED AS NO PANCHNAMA HAS BEEN DRAWN AND SERVED UPON THE ASSESS EE TILL DATE. IT IS SUBMITTED THAT IN CASE A SEARCH IS INITIATED, THE SAME HAS TO BE C ONCLUDED BY PREPARING A PANCHNAMA BUT IN THE PRESENT CASE, ONLY PROHIBITORY ORDER U/S 132(3) OF THE INCOME TAX ACT, 1961 WERE PASSED ON 26.04.1996 AND A COPY OF ONE SUCH PR OHIBITORY ORDERS WERE PROVIDED TO THE ASSESSEE THAT TOO ON 17.04.1997 I.E. AFTER A PERIOD OF ALMOST ONE YEAR. IT IS FURTHER SUBMITTED THAT NONE OF THE RESIDENTIAL PREM ISES OR OFFICE PREMISES OF THE ASSESSEE WAS EVER SEARCHED U/S 132(1) OF THE INCOME TAX ACT, 1961 AND NO INCRIMINATING DOCUMENTS OR MATERIAL HAS BEEN BROUGH T ON RECORD SO AS TO ENABLE THE DEPARTMENT TO ASSUME JURISDICTION U/S 158BC OF THE INCOME TAX ACT, 1961. IT IS ALSO SUBMITTED THAT SEARCH OF BANK OF THE ASSESSEE IS NO T A SEARCH ON THE ASSESSEE. ARGUMENTS WERE RAISED REGARDING VALIDITY OF SEARCH ALSO BY CONTENDING THAT THERE WAS NO REASON FOR THE DEPARTMENT TO SEARCH THE ASSESSEE BUT WE ARE NOT DEALING WITH THESE ARGUMENTS BECAUSE THE TRIBUNAL CANNOT GO INTO THE Q UESTION OF VALIDITY OF SEARCH. FURTHER CONTENTION WAS RAISED THAT THE OPPORTUNITY WAS NOT PROVIDED TO THE ASSESSEE AND HENCE, THE PRINCIPLES OF NATURAL JUSTICE WAS VI OLATED. IT IS ALSO SUBMITTED THAT THE OPPORTUNITY OF CROSS EXAMINATION WAS NOT PROVIDED T O THE ASSESSEE AND THE OPPORTUNITY I.T.(SS)A.NO 91, 95, 99 & 100/DEL/1997 AND 54/DEL/1998 13 FOR CROSS EXAMINATION SAID TO HAVE BEEN PROVIDED TO THE ASSESSEE WAS NOT A REAL OPPORTUNITY AND HENCE, ON THIS ACCOUNT ALSO, PRINCI PLES OF NATURAL JUSTICE HAS BEEN VIOLATED. ONE MORE CONTENTION WAS RAISED THAT ALTH OUGH PRIOR TO THE FILING OF RETURN, NOTICE U/S 142(1)/143(2) WERE ISSUED ON 11.02.1997 BUT NO NOTICE U/S 143(2) WAS ISSUED AFTER THE FILING OF RETURN OF INCOME AND HEN CE, FOR THIS REASON ALSO, THE ASSESSMENT ORDER FRAMED BY THE A.O. IS BAD IN LAW AS PER THE JUDGMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF HOTEL BLUE MOON AS REPORTED IN 321 ITR 362 (S.C.). REGARDING NON PROVIDING OF OPPORTUNITY AND CROSS EXAMINATION, RELIANCE WAS PLACED ON THE FOLLOWING JUDGMENTS: (A) CIT VS ASHWANI GUPTA 322 ITR 396 (DEL.) (B) KISHANCHAND CHELARAM 125 ITR 713 (S.C.) (C) CIT VS S M AGGARWAL 293 ITR 43 (D) CIT VS S MC SHARE BROKERS LTD. 288 ITR 345 (DEL .) (E) CIT VS DHARAMPAL PREM CHAND LTD. 295 ITR 105 (D EL.) (F) CIT VS PRADEEP KUMAR GUPTA 207 CTR 115 13. IN ADDITION TO VARIOUS ABOVE ARGUMENTS ON TECHN ICAL ASPECT, REGARDING MERITS OF VARIOUS ADDITION MADE BY THE A.O., IT WAS SUBMITTED THAT UNDER THE PROVISIONS OF CHAPTER XIVB OF THE INCOME TAX ACT, 1961, AN ASSESS MENT OF AN UNDISCLOSED INCOME CAN BE MADE ONLY IN RESPECT WHEREOF AN EVIDENCE HAS BEEN FOUND AS A RESULT OF SEARCH AND SUCH OTHER MATERIAL OR INFORMATION AS ARE AVAIL ABLE WITH THE A.O. BUT SUCH MATERIAL OR INFORMATION MUST BE RELATABLE TO SUCH EVIDENCE A S HAS BEEN FOUND AS A RESULT OF SEARCH. IN SUPPORT OF THIS CONTENTION, RELIANCE WA S PLACED ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS: (A) L R GUPTA AND OTHERS VS UNION OF INDIA 194 ITR 32 (B) CIT VS VISHAL AGGARWAL 283 ITR 326 (DEL.) (C) CIT VS JUPITER BUILDERS (P) LTD., 287 ITR 287 (DEL.) (D) CIT VS RAVI KANT JAIN 250 ITR 141 (DEL.) (E) CIT VS V B AGGARWAL 206 CTR 87 (DEL.) (F) CIT VS AGGARWAL DEVELOPERS P. LTD. 163 TAXMAN 699 (G) CIT VS G. K. SENNIAPAN 284 ITR 220 (MAD.) (H) N. R. PAPER & BOARD LTD. VS DCIT 234 ITR 733 ( GUJ.) (I) CIT VS M. S. AGGRAWAL (HUF) 207 TAXATION 691 ( H.C.) MP. I.T.(SS)A.NO 91, 95, 99 & 100/DEL/1997 AND 54/DEL/1998 14 14. IT WAS FURTHER SUBMITTED THAT UNDER THE PROVISI ONS OF CHAPTER XIVB OF THE INCOME TAX ACT, 1961, AN ASSESSMENT OF AN UNDISCLOS ED INCOME CAN BE MADE ONLY IN RESPECT OF AN UNDISCLOSED INCOME AS PER THE EVIDENC E FOUND AS A RESULT OF SEARCH OR OTHER MATERIAL OR INFORMATION RELATABLE TO SUCH EVI DENCE FOUND IN THE COURSE OF SEARCH BUT THE SAME CANNOT BE INVOKED TO ASSESS AN INCOME OR REASSESS WHERE THERE IS ESCAPEMENT. IN SUPPORT OF THIS CONTENTION, RELIANC E WAS PLACED ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS: (A) L R GUPTA AND OTHERS VS UNION OF INDIA 194 ITR 32 (B) 250 ITR 141 (DEL.) CIT VS RAVI KANT JAIN (C) 248 ITR 310 (BOMBAY) CIT VS SHAMBHULAL C BACHK ANIWALA (D) 256 ITR 129 CIT VS VIKRAM A DOSHI, MS. LEENA V DOSHI (E) 248 ITR 562 (CAL.) BHAGWATI PRASAD KEDIA VS CI T (F) 293 ITR 643 (CAL.) CALTRADECO STEEL OIL PVT. LTD. VS CIT (G) 234 ITR 733 (GUJ.) N R PAPER & BOARD LTD. VS C IT (H) 236 ITR 73 (GUJ.) KHADUBHAI VASAN DESAI (I) 248 ITR 526 (GUJ.) N R PAPER & BOARD LTD. VS C IT (J) 245 ITR 488 (GUJ.) CIT VS TABULAL 15. IT WAS SUBMITTED THAT EVEN IF IT IS HELD THAT T HE BLOCK ASSESSMENT WAS VALIDLY MADE, VARIOUS ADDITIONS MADE BY THE A.O. ARE REQUIR ED TO BE DELETED BECAUSE THERE IS NO EVIDENCE FOUND IN THE COURSE OF SEARCH WHICH CAN LEAD TO AN ASSESSMENT OF UNDISCLOSED INCOME IN THE BLOCK ASSESSMENT BECAUSE EVEN THE MONEY LYING INTO FDRS AND BANK ACCOUNTS WITH PNB, NOROJI NAGAR, NEW DELHI ALSO WERE DECLARED BY THE ASSESSEE IN HIS STATEMENT RECORDED ON 14.03.1996 BY ADI UNIT 1, NEW DELHI IN WHICH IT WAS STATED THAT THE AMOUNTS DEPOSITED IN THE BAN K ACCOUNT WITH PNB BELONG TO JMM PARTY AND SOURCE IN THE HANDS OF JMM IS DONATION RE CEIVED BY JMM PARTY. IT IS SUBMITTED THAT COPY OF STATEMENT DATED 14.03.1996 I S AVAILABLE ON PAGES 72-77 OF THE PAPER BOOK-II FILED BY THE ASSESSEE AND HENCE, EVEN THE DEPOSITS INTO THESE BANK ACCOUNTS ARE ALSO NOT A NEW EVIDENCE FOUND IN THE COURSE OF SEARCH BECAUSE SUCH DEPOSITS WERE ALSO DULY DISCLOSED BEFORE THE DEPART MENT IN THEIR STATEMENTS RECORDED ON 14.03.1996. AND HENCE, THE DEPOSITS IN THOSE BAN K ACCOUNTS IS ALSO NOT A DISCOVERY OF SEARCH AND HENCE, EVEN IN RESPECT OF DEPOSITS IN THOSE BANK ACCOUNTS WITH PNB, I.T.(SS)A.NO 91, 95, 99 & 100/DEL/1997 AND 54/DEL/1998 15 NOROJI NAGAR, NEW DELHI WHICH WERE SUBJECTED TO SE ARCH, NO ADDITION CAN BE MADE IN THE BLOCK ASSESSMENT BECAUSE THESE BANK ACCOUNTS AN D DEPOSITS THEREIN ARE NOT A DISCOVERY OF SEARCH. 16. THE COUNSEL OF MR. SIMON MARANDI DID NOT RAISE ANY NEW ARGUMENT AND HE SIMPLY SUBMITTED THAT THE ARGUMENTS RAISED IN THE C ASE OF SHRI SHIBU SOREN MAY BE CONSIDERED IN HIS CASE ALSO. LD. COUNSEL FOR THE A SSESSEE SHRI SURAJ MANDAL ALSO SUBMITTED THAT THE ARGUMENTS RAISED IN THE CASE OF SHRI SHIBU SOREN ARE TO BE CONSIDERED IN HIS CASE ALSO. ONE NEW CONTENTION WA S RAISED BY HIM THAT THE FINDING OF FACTS AS RECORDED BY THE A.O. NO LONGER STAND BECAU SE THE ISSUE HAS BEEN ADJUDICATED ON THE SAME FACTUAL MATRIX BY THE HONBLE APEX COUR T IN CRIMINAL APPEAL NO.1207 AND 10208 OF 1997 IN P V NARSIMHA RAO VS STATE (CBI ) REGARDING THE SAME BANK DEPOSITS. IT WAS ALLEGED THAT THESE FOUR MPS I.E. SHRI SHIBU SOREN, SHRI SURAJ MANDAL, SHRI SIMON MARANDI AND SHRI SHAILENDRA MAHTO BELONG ING TO JMM PARTY HAD RECEIVED CONSIDERATION FROM CONGRESS PARTY FOR VOTING AGAINS T NO CONFIDENCE MOTION AGAINST P V NARSIMHA RAO GOVERNMENT. IT IS ALSO SUBMITTED TH AT THE CASES LODGED BY CBI AGAINST THESE MPS UNDER THE PREVENTION OF CORRUPTIO N ACT WAS FOUND UNJUSTIFIED AND WRONG. IT IS FURTHER SUBMITTED THAT IT IS ALSO KNO WN FACT THAT DIFFERENT PARTIES MANY A TIME COME CLOSURE, FORM ALLIANCE, AGREE TO COOPERAT E WITH EACH OTHER IN AND OUTSIDE THE PARLIAMENT. IT IS FURTHER SUBMITTED THAT JMM PARTY AND CONGRESS PARTY HAVE AGREED TO COOPERATE EACH OTHER. HE FURTHER SUBMITTED THAT AT THIS JUNCTURE OF HISTORY OF THE COUNTRY, THE CONGRESS PARTY APPROACHED THE JMM PART Y TO HELP IN NATIONAL INTEREST AND NOT TO VOTE AGAINST THE P V NARSIMHA RAO GOVERNMENT IN THE PARLIAMENT. HE FURTHER SUBMITTED THAT JMM PARTY RIGHTLY THOUGHT THAT VOTIN G OUT CONGRESS PARTY AT THAT CRITICAL JUNCTURE WHEN THE COUNTRY WAS FACING ECONOMIC AND P UBLIC UNREST IN PUNJAB, J&K AND NORTH EAST ETC. CAN BE DISASTROUS FOR THE COUNTRY A ND IN THE NATIONAL INTEREST, AND FOR STABILITY, NATIONAL SECURITY AND ECONOMIC REFORMS, THE JMM PARTY AGREED TO HELP THE CONGRESS PARTY. HE SUBMITTED THAT CONGRESS PARTY S UO MOTO AND VOLUNTARY DONATED THE AMOUNT TO JMM PARTY FOR THE CAUSE ESPOUSED BY THE P ARTY AND FOR THE WELFARE OF THE PEOPLE OF JHARKHAND. THIS AMOUNT WAS DEPOSITED IN THE BANK ACCOUNTS IN THE NAME OF I.T.(SS)A.NO 91, 95, 99 & 100/DEL/1997 AND 54/DEL/1998 16 EXECUTIVES FUNCTIONING FOR JMM PARTY FOR THE REASON THAT THE PARTY CAN FUNCTION IN THAT AREA THROUGH ITS OFFICE BEARERS. IT WAS ALSO SUBMI TTED THAT THESE FACTS WERE NOT STATED EARLIER BECAUSE OF THE FEAR OF CBI AND FOR FEAR OF BLACKMAILING AND LACK OF PROPER UNDERSTANDING THE LAW. IT WAS ALSO SUBMITTED THAT THE AMOUNT DONATED BY THE CONGRESS PARTY TO JMM PARTY CANNOT AT ALL BE TREATED A BRIBE TO THE ASSESSEE MPS. IT IS ALSO SUBMITTED THAT IT IS WRONG TO SUSPECT OR ALLEGE THA T THERE WAS ANY CONSPIRACY OF VOTING FOR BRIBE. HE SUBMITTED A COPY OF THE JUDGMENT OF HONBLE APEX COURT IN THE CASE OF P V NARSIMHA RAO VS STATE (SUPRA). HE SUBMITTED TH AT THERE IS NOTHING ILLEGAL IN A BIG POLITICAL PARTY GIVING DONATION TO A SMALL PARTY. HE SUBMITTED THAT VOLUNTARY DONATION OF CONGRESS PARTY TO JMM PARTY WAS NOT AGAINST THE OBJECTS OF THE PARTY. HE SUBMITTED THAT THE AMOUNT RECEIVED BY JMM FROM CONG RESS WAS DONATION WHICH IS EXEMPTED U/S 13A OF THE INCOME TAX ACT, 1961. IT I S ALSO SUBMITTED THAT THE FACT THAT THE AMOUNT WAS PAID BY THE CONGRESS PARTY IS FULLY NOTED BY CBI AND AS PER THE OBSERVATION AND FINDING OF THE A.O. HE SUBMITTED THAT THE AMOUNT WAS DONATED BY CONGRESS PARTY AND IT IS EXEMPT U/S 13A OF THE INCO ME TAX ACT, 1961 AND HE SUBMITTED THAT THIS IS AN ALTERNATIVE SUBMISSION IN THE LIGHT OF FACTS AND CIRCUMSTANCES OF THE CASE AND PROVISIONS OF LAW. 17. THE COUNSELS OF THE REMAINING INDIVIDUAL I.E. S HAILENDRA MAHTO ALSO SUBMITTED THAT HIS CASE MAY ALSO BE DECIDED ON THE BASIS OF T HE ARGUMENTS RAISED IN THE CASE OF SHRI SHIBU SOREN. 18. IN REPLY, IT WAS SUBMITTED BY THE STANDING COUN SEL FOR THE REVENUE SMT. RASHMI CHOPRA THAT AS PER THE DECISION OF HONBLE DELHI C OURT RENDERED IN THE CASE OF M B LAL VS CIT AS REPORTED IN 279 ITR 298, VALIDITY OF SEARCH CANNOT BE ASSAILED IN THE APPELLATE PROCEEDINGS AND PROPER RECOURSE WOULD BE TO IMPUGN THE SAME IN A WRIT PETITION WHICH HAS NOT BEEN DONE BY THE ASSESSEE IN THE PRESENT CASE. 19. REGARDING THE 2 ND CONTENTION THAT SEARCH WAS NEVER CONDUCTED ON THE ASSESSEE, IT IS SUBMITTED THAT IN THE FACTS OF THE CASE, IT IS C LEARLY RECORDED IN THE SATISFACTION NOTE THAT THERE ARE REASONS TO BELIEVE THE EXISTENCE OF UNDISCLOSED INCOME IN THE HANDS OF THESE ASSESSES AND OTHER INCRIMINATING CIRCUMSTANCE S/NON EXPLANATION, WHICH JUSTIFIES I.T.(SS)A.NO 91, 95, 99 & 100/DEL/1997 AND 54/DEL/1998 17 THE ACTION FOR INITIATION OF SEARCH OF THESE ASSESS ES. SHE SUBMITTED THAT COPY OF THIS SATISFACTION NOTE ALONG WITH COPY OF WARRANT OF AUT HORIZATION AND COPY OF SEARCH MANUAL IS ALREADY SUBMITTED. IT IS FURTHER SUBMITT ED BY HER THAT BANK IS THE PLACE WHERE THE UNDISCLOSED INCOME OF THE ASSESSEE (UNDIS CLOSED CASH) WAS KEPT AND THUS, AS PER THE PROVISIONS OF SECTION 132(1) READ WITH SECT ION 158BC/158BD OF THE INCOME TAX ACT, 1961, SEARCH IS TO BE CONDUCTED IN THE PLA CE WHERE THERE IS REASON TO BELIEVE THAT SUCH UNDISCLOSED INCOME IS LYING. SHE FURTHER SUBMITTED THAT THE WARRANT OF AUTHORIZATION CLEARLY PROVIDES THAT THE PLACE TO BE SEARCHED IS WHERE THE UNDISCLOSED INCOME IS LYING. SHE FURTHER SUBMITTED THAT SEARCH IS ASSESSEE BASED AND PREMISES BASED. WHEN THE AUTHORIZATION ARE IN THE NAME OF THE ASSESSES, THE SEARCH OF ACCOUNT/FDRS OF THE ASSESSES IN THE BANK ACCOUNTS O F THE ASSESSEE IS A SEARCH ON THE ASSESSEE. THE ORDERS U/S 132(3) WERE ISSUED BOTH O N THE BANK AS WELL AS THE ASSESSEE. SHE PLACED RELIANCE ON THE TRIBUNAL DECISION RENDER ED IN THE CASE OF CIT VS SHILPI SECURITIES IN I.T.A. NO. 130/DEL/2009 DATED 30.11.2 009, COPY OF WHICH WAS SUBMITTED BY HER. REGARDING THE CONTENTION RAISED BY THE LD. COUNSEL FOR THE ASSESSEE THAT THE RELATIONSHIP OF THE BANK AND THE ASSESSEE IS THAT O F DEBTOR AND CREDITOR BY PLACING RELIANCE ON THE JUDGMENT RENDERED IN THE CASE OF K. C.C. SOFTWARE LTD. AND OTHERS AS REPORTED IN 298 ITR 01, IT IS SUBMITTED THAT THIS C ONTENTION IS MISCONCEIVED BECAUSE ADMITTEDLY, THE MONEY BELONGS TO THE ASSESSES WHOSE SOURCE HAS TO BE EXPLAINED BY THE ASSESSEE AND THE BASIS OF RELATIONSHIP AS ALLEGED D OES NOT VITIATE THE ASSUMPTION OF JURISDICTION OF SEARCH. SHE FURTHER SUBMITTED THA T ADMITTEDLY, THE MONEY LYING IN THE BANK ACCOUNTS OF THE ASSESSES IS PRESUMED TO BE THE MONEY OF THE ASSESSEES U/S 132(4A) OF THE INCOME TAX ACT, 1961 AND IN THAT CAS E REPORTED IN 298 ITR 01, THE ISSUE INVOLVED WAS REGARDING WITHDRAWAL OF MONEY BY THE I NCOME TAX DEPARTMENT AND NOT WITH REGARD TO THE QUESTION OF THE PREMISES TO BE S EARCHED AND/ OR THE ASSESSEE TO BE SEARCHED. REGARDING THE ARGUMENT OF LD. COUNSEL F OR THE ASSESSEE IN RELATION TO VIOLATION OF PRINCIPLES OF NATURAL JUSTICE, I.E. NO ADEQUATE HEARING, IT WAS SUBMITTED BY HER THAT THE ASSESSEE DID NOT FILE ANY DETAILS AND ONLY SOUGHT ADJOURNMENTS UP TO 22.04.1997 WHEREAS THE ASSESSMENT WAS TO BE COMPLET ED ON OR BEFORE 30.04.1997. SHE I.T.(SS)A.NO 91, 95, 99 & 100/DEL/1997 AND 54/DEL/1998 18 FURTHER SUBMITTED THAT ON 02.04.1997, DESPITE SEEKI NG NUMBER OF ADJOURNMENTS EARLIER, AUTHORIZED C.A. WITHDRAWN AND THE ASSESSEE DOES NO T APPEAR. SHE FURTHER SUBMITTED THAT IN THE ABSENCE OF DETAILS, THE A.O. ISSUED NOT ICE U/S 144 FOR BEST JUDGMENT ASSESSMENT AS THE TIME WAS RUNNING OUT. SHE FURTHE R SUBMITTED THAT THE ASSESSES A.R. APPEARED ON THE DATE FIXED IN THE NOTICE ISSUED BY THE A.O. U/S 144 I.E. ON 10.04.1997 BUT STILL DID NOT FILE ANY DETAIL AND SOUGHT ADJOUR NMENT KNOWING FULLY WELL THAT THE TIME LIMIT FOR COMPLETING THE ASSESSMENT IS TO EXPI RE ON 30.04.1997. SHE SUBMITTED THAT UNDER THESE FACTS, THERE IS NO DENIAL OF ADEQU ATE OPPORTUNITY TO THE ASSESSEE BUT IN FACT, THE BOOT IS ON THE OTHER LEG AS THE ASSESSEE REFUSED TO FILE DETAILS DESPITE A NUMBER OF ADJOURNMENTS / ACCOMMODATION BY THE A.O. 20. REGARDING THIS CONTENTION THAT NO NOTICE U/S 14 3(2) OF THE INCOME TAX ACT, 1961 WAS ISSUED AFTER FILING THE RETURN, IT WAS SUBMITTE D THAT DETAILED QUESTIONNAIRE AND NOTICE U/S 142(1) AND 143(2) OF THE INCOME TAX ACT, 1961 WERE ISSUED TO THE ASSESSEE ON 11.02.1997 ASKING EXHAUSTIVE INFORMATION AND THE SAME WAS REPLIED BY THE ASSESSEE. SHE SUBMITTED A COPY OF THESE NOTICES AN D QUESTIONNAIRE ALONG WITH REPLY OF THE ASSESSEE. SHE SUBMITTED THAT THE RETURN WAS FI LED ON 20.03.1997 AND THE ASSESSES AR CONTINUED TO APPEAR BEFORE THE A.O. AND NON APPE ARING OR WITHDRAWAL OF ATTORNEY BY C.A. ON 02.04.1997 COMPELLED THE A.O. TO ISSUE N OTICE U/S 144 OF THE INCOME TAX ACT, 1961 WHICH IS DETAILED AND EXHAUSTIVE. SHE S UBMITTED A COPY OF THIS NOTICE ALSO. SHE FURTHER SUBMITTED THAT THE PROCEEDINGS FOR THE BEST JUDGMENT ASSESSMENT WAS NEVER CONTINUED AS ASSESSEE SUBSEQUENTLY APPEARED AND THE A.O. ALLOWED THE ASSESSEE FAIR AND REASONABLE OPPORTUNITY TO DEFEND HIMSELF. SHE ALSO SUBMITTED THAT THE NOTICE ISSUED BY THE A.O. U/S 144 MAY BE PRESUMED TO BE NO TICE U/S 143(2) OF THE INCOME TAX ACT, 1961 BECAUSE ITNS IS HAVING NO STANDARD PRESCR IBED FORMAT AND THE PURPOSE IS TO INFORM THE ASSESSEE REGARDING THE DATE AND INFORMAT ION REQUIRED. 21. REGARDING THE JUDGMENT OF THE HONBLE APEX COUR T IN THE CASE OF BLUE MOON (SUPRA), IT IS SUBMITTED BY HER THAT THE FACTS ARE DISTINGUISHABLE BECAUSE IN THAT CASE, NOTICE U/S 143(2) OF THE INCOME TAX ACT, 1961 WAS N EVER ISSUED AND NEITHER ANY NOTICE U/S 144 WAS ISSUED IN THAT CASE WHEREAS IN THE PRES ENT CASE, NOTICE U/S 143(2) WAS I.T.(SS)A.NO 91, 95, 99 & 100/DEL/1997 AND 54/DEL/1998 19 ISSUED BEFORE THE FILLING OF RETURN AND NOTICE U/S 144 WAS ISSUED AFTER THE FILING OF RETURN AND HENCE, THIS JUDGMENT IS NOT APPLICABLE I N THE PRESENT CASE. IT WAS ALSO SUBMITTED THAT ORDER SHEET ENTRIES ON 26.03.1997 MA Y ALSO BE CONSIDERED AS NOTICE TO THE ASSESSEE U/S 143 (2). 22. REGARDING THIS ARGUMENT THAT THERE IS NO PANCHN AMA, IT WAS SUBMITTED HAT PANCHNAMA IS NOT MANDATORY OR EXPRESSLY STATED IN T HE ACT. IT IS A DOCUMENT WHICH IS PREPARED IN THE PRESENCE OF PANCHAS CONTAINING ITEM S FOUND OR SEIZED IN THE COURSE OF SEARCH AS THE DOCUMENT/ EVIDENCE OF SEIZURE. IT WA S ALSO SUBMITTED THAT PROHIBITORY ORDERS U/S 132(3) OF THE INCOME TAX ACT, 1961 AS IN THE PRESENT CASE, DOES NOT AMOUNT TO SEIZURE AS IT WAS NOT PRACTICABLE TO SEIZE THE M ONEY. SHE ALSO SUBMITTED THAT THE SEARCH IS CONCLUDED WHEN PROHIBITORY ORDER IS LIFTE D AND BOOKS OF ACCOUNT/VALUABLE ARTICLES ARE ACTUALLY SEIZED AND PANCHNAMA IS PREPA RED. SHE ALSO SUBMITTED THAT PANCHNMA IN ANY CASE IS RELEVANT ONLY FOR THE PURPO SE OF EXCLUSION OF PERIOD OF LIMITATION AND IN THE ABSENCE OF ANY SEIZURE, IT HA S NO SIGNIFICANCE AND DEFINITELY DOES NOT VITIATE THE SEARCH. RELIANCE WAS PLACED ON THE TRIBUNAL JUDGMENT RENDERED IN THE CASE OF PROMAIN LTD. VS DCIT AS REPORTED IN 95 ITD 489 (DEL.) (SPECIAL BENCH). RELIANCE WAS ALSO PLACED ON THE JUDGMENT OF HONBL E BOMBAY HIGH COURT RENDERED IN THE CASE OF CIT VS SANDHYA P NAYAK AS REPORTED I N 253 ITR 534. 23. REGARDING THIS CONTENTION THAT SINCE IT WAS HEL D BY THE HONBLE APEX COURT IN THE CRIMINAL CASE WITH REGARD TO THESE DEPOSITS IN THE BANK THAT IMMUNITY IS AVAILABLE TO THESE PERSONS, IT WAS SUBMITTED BY HER THAT ARTI CLE 105 OF THE CONSTITUTION OR ANY OTHER ARTICLE OR SECTION OF INCOME TAX ACT, 1961 DO ES NOT GRANT IMMUNITY TO THE ASSESSEE AGAINST THE TRUE AND COMPLETE DISCLOSURE O F INCOME CHARGEABLE TO TAX AND THE NON TAXABILITY OF THE UNDISCLOSED INCOME. 24. REGARDING THIS CONTENTION THAT THE INCOME AS AL READY DISCLOSED U/S 131 ON 14.03.1996 AND HENCE THERE IS NO UNDISCLOSED INCOME , IT WAS SUBMITTED BY HER THAT STATEMENT MADE U/S 131 OF THE INCOME TAX ACT, 1961 DURING PRE SEARCH INQUIRY WHICH RESULTED IN ISSUANCE OF SEARCH WARRANT CANNOT BE DE EMED TO BE TRUE AND FULL DISCLOSURE OF UNDISCLOSED INCOME AND THE SAME IN ANY CASE IS N OT TRUE AND FULL DISCLOSURE. SHE I.T.(SS)A.NO 91, 95, 99 & 100/DEL/1997 AND 54/DEL/1998 20 SUBMITTED THAT AS PER SECTION 158B(B), UNDISCLOSED INCOME IS GOLD, BULLION, MONEY ETC, OR INCOME WHICH HAS NOT BEEN OR WOULD HAVE NOT BEEN DISCLOSED FOR THE PURPOSE OF THIS ACT. SHE SUBMITTED THAT ADMITTEDLY, NO RETURN HAS EVER BEEN FILED BY THESE ASSESSES AND THUS, THERE IS NO QUESTION OF ANYTHING WAS LYING DI SCLOSED IN THE PRESENT CASES. SHE SUBMITTED THAT MERE STATEMENT AS A PART OF PRE SEAR CH INQUIRY CANNOT AMOUNT TO DISCLOSURE OF INCOME POSSESSED BY THE ASSESSEE CHAR GEABLE TO TAX. SHE SUBMITTED THAT THE MAIN ISSUE IS WHETHER SUCH INCOME WAS EVER DISC LOSED BY THE ASSESSEE AT ANY STAGE. 25. REGARDING THIS ALLEGATION THAT OPPORTUNITY FOR CROSS EXAMINATION WAS NOT PROVIDED, IT IS SUBMITTED BY HER THAT THE ASSESSEE PRAYED FOR CROSS EXAMINATION OF SUSHIL KUMAR INTRODUCTOR OF ACCOUNT, BUT DID NOT TU RN UP TO AVAIL THE OPPORTUNITY TO CROSS EXAMINE AND HENCE, THIS ALLEGATION IS FALSE. IT IS ALSO SUBMITTED BY HER THAT EVEN IF IT IS HELD THAT CROSS EXAMINATION WAS NOT ALLOWE D, THEN IT DOES NOT VITIATE THE ASSESSMENT ORDER AND AT THE BEST IT IS A MATTER OF REMAND. 26. REGARDING THIS SUBMISSION THAT MATERIAL/EVIDENC E WAS NOT FOUND IN THE COURSE OF SEARCH, IT IS SUBMITTED BY HER THAT UNDISCLOSED INC OME IS DEFINED U/S 158B(B) WHILE THE COMPUTATION IS AS PER SECTION 158BB OF THE INCOME T AX ACT, 1961 APPLICABLE FOR SEARCH CASES W.E.F. 1.7.1995. SHE SUBMITTED THAT A S PER THE PROVISIONS OF SECTION 158 BB, COMPUTATION OF UNDISCLOSED INCOME CAN BE ON THE BASIS OF EVIDENCE FOUND AS A RESULT OF SEARCH OR BY REQUISITION OF BOOKS OF ACCO UNTS OR DOCUMENTS OR SUCH OTHER MATERIAL OR INFORMATION AS ARE AVAILABLE WITH THE A .O. SHE SUBMITTED THAT INFORMATION /STATEMENT/DOCUMENT/MATERIAL AVAILABLE WITH THE A.O . CAN BE THE BASIS TO COMPUTE AN UNDISCLOSED INCOME. 27. REGARDING MERITS OF VARIOUS ADDITIONS, SHE SUBM ITTED THAT THE A.O. HAS INDICATED THAT THE ASSESSEE HAS NOT BEEN ABLE TO REBUT THE PR ESUMPTION U/S 132(4A) OF THE INCOME TAX ACT, 1961 IN VIEW OF THE DISCREPANCIES AND INFI RMITY AS MENTIONED IN THE ASSESSMENT ORDER AND HENCE, ALL THE ADDITIONS MADE BY THE A.O. SHOULD BE UPHELD. 28. IN THE REJOINDER, LD. ARS OF THE ASSESSEE REIT ERATED THE SAME ARGUMENTS WHICH WERE RAISED BY THEM EARLIER. I.T.(SS)A.NO 91, 95, 99 & 100/DEL/1997 AND 54/DEL/1998 21 29. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUS ED THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE JUDGMENTS CITED BY BOTH THE S IDES. AS PER THE PROVISIONS OF SECTION 158BA(2) AND ITS EXPLANATION, THE BLOCK ASS ESSMENT UNDER CHAPTER XIV B IS IN ADDITION TO THE REGULAR ASSESSMENT AND IF ANY AD DITION IS MADE IN SUCH REGULAR ASSESSMENT OR IS REQUIRED TO BE OR IS ELIGIBLE TO B E MADE IN THE REGULAR ASSESSMENT THEN SUCH INCOME CANNOT BE ADDED IN THE BLOCK ASSESSMENT . THIS IS BY NOW, A SETTLED POSITION OF LAW THAT IN THE CASE OF BLOCK ASSESSMEN T PROCEEDINGS, ADDITION CAN BE MADE ON THE BASIS OF EVIDENCE FOUND AS A RESULT OF SEARC H OR REQUISITION OF BOOKS OF ACCOUNTS OR OTHER MATERIAL AND SUCH OTHER MATERIAL OR INFORM ATION WHICH ARE AVAILABLE WITH THE A.O. AND ARE RELATABLE TO SUCH EVIDENCE FOUND AS A RESULT OF SEARCH. THIS IS ALSO A SETTLED POSITION BY NOW THAT FOR THE PURPOSE OF ADD ITION IN THE BLOCK ASSESSMENT UNDER CHAPTER XIV B, WHICH WILL RESULT INTO LEVY OF HIGHE R RATE OF TAX OF 60%, INCRIMINATING MATERIAL FOUND IN COURSE OF SEARCH IS TO BE CONSIDE RED AND NOT EACH AND EVERY THING FOUND IN COURSE OF SEARCH. FOR EXAMPLE, REGULAR BOO KS OF ACCOUNT MAINTAINED BY A BUSINESSMAN ARE ALSO FOUND IN COURSE OF SEARCH BUT THOSE BOOKS ARE NOT CONSIDERED TO BE INCRIMINATING MATERIAL BECAUSE EXISTENCE OF REGU LAR BOOKS IS IN THE KNOWLEDGE OF THE REVENUE ALTHOUGH ITS CONTENTS ARE NOT KNOWN TO THE REVENUE. BUT STILL, IN RELATION TO ENTRIES IN THOSE BOOKS, NO ADDITION IS TO BE MADE I N BLOCK ASSESSMENT AND ADDITION, IF ANY, IS TO BE MADE IN REGULAR ASSESSMENT ONLY. THIS IS ALSO A SETTLED POSITION THAT WHETHER REGULAR ASSESSMENT IS ACTUALLY MADE OR NOT OR WHETHER ANY ADDITION IN REGULAR ASSESSMENT IS ACTUALLY MADE OR NOT IS ALSO NOT RELE VANT AND IF ANY ADDITION IS REQUIRED TO BE MADE IN REGULAR ASSESSMENT, IT CANNOT BE ADDE D IN BLOCK ASSESSMENT ONLY FOR THIS REASON THAT NO REGULAR ASSESSMENT WAS MADE OR THAT NO ADDITION WAS MADE IN SUCH REGULAR ASSESSMENT. IN THE PRESENT CASE, NEITHER A NY RETURN OF INCOME WAS FILED BY THE ASSESSEE U/S 139 NOR ANY NOTICE WAS ISSUED BY THE C ONCERNED A.O. U/S 142 (1) OR U/S 148 ASKING THE ASSESSEE TO FILE A RETURN OF INCOME AND ONLY NOTICE ISSUED WAS U/S 158BC. IN THE BACKDROP OF THIS LEGAL AND FACTUAL PO SITION, NOW WE EXAMINE THE OTHER FACTS OF THE PRESENT CASE. I.T.(SS)A.NO 91, 95, 99 & 100/DEL/1997 AND 54/DEL/1998 22 30. IN THE PRESENT CASE, THE SEARCH WAS CONDUCTED O NLY ON VARIOUS BANK ACCOUNTS OF THESE ASSESSES WITH PNB, NOROJI NAGAR, NEW DELHI, A ND DETAILS OF SUCH FDR AND SAVING BANK ACCOUNTS WHICH WERE SUBJECTED TO SEARCH ARE NOTED BY THE A.O. ON PAGE 7 OF THE ASSESSMENT ORDER IN THE CASE OF SHRI SHIBU S OREN. THIS TABLE HAS BEEN REPRODUCED BY US IN PARA 2 ABOVE. HENCE, IN OUR CO NSIDERED OPINION, ALL OTHER ADDITIONS MADE BY THE A.O. IN THE BLOCK ASSESSMENT OF THESE FOUR PERSONS ARE LIABLE TO BE DELETED FOR THIS REASON ALONE THAT THESE ARE NOT BASED ON EVIDENCE FOUND AS A RESULT OF SEARCH AND THERE IS NO REQUISITION OF BOOKS OF A CCOUNTS AND OTHER DOCUMENTS IN THE PRESENT CASE. ALL THESE OTHER ADDITIONS ARE MADE O N THE BASIS OF MATERIAL AND INFORMATION AVAILABLE WITH THE A.O. AS PER POST SEA RCH ENQUIRY BUT THESE OTHER MATERIAL AND INFORMATION ARE NOT SHOWN TO BE RELATABLE TO AN Y ALLEGED EVIDENCE FOUND IN THE COURSE OF SEARCH AND HENCE, ALL OTHER ADDITIONS MAD E BY THE A.O. IN THESE BLOCK ASSESSMENT ORDERS ARE NOT SUSTAINABLE. WE ARE TAKI NG THIS VIEW BY RESPECTFULLY FOLLOWING VARIOUS JUDGMENTS OF HON'BLE HIGH COURT O F DELHI CITED BY LD. A.R. AS HAS BEEN NOTED BY US IN PARA 14 ABOVE. FOR THE SAKE OF READY REFERENCE, WE NOTE DOWN THE RELEVANT FINDINGS OF SOME OF THESE JUDGMENTS WHICH ARE AS UNDER: (I) IN THE CASE OF CIT VS VISHAL AGGARWAL (SUPRA), A SEARCH WAS CONDUCTED U/S 132 OF THE INCOME TAX ACT, 1961 IN FEB 1997 BUT NO INCRIMINATING MATERIAL WAS DISCOVERED DURING THE SEARCH BUT THE A.O. RESORTED TO SECTION 158BC OF THE INCOME TAX ACT, 1961 AND TREATED VARIOUS GIFTS RECEIVED BY THE ASSESSEE IN ASSESSMENT YEAR 1993- 94 AS CONCEALED INCOME. UNDER THESE FACTS, IT WAS HELD BY THE LD. CIT(A) IN THAT CASE THAT IT IS IMPORTANT THAT SOME MATERIAL DOCUMENT OR INFORMATION SHOULD HAVE BEEN DISCOVERED DURING THE SEARCH OPERATION WHICH WOULD INDICATE THAT THE GIFTS WERE BOGUS OR REPRESENT THE CONCEALED INCOME OF THE ASSESSEE A ND SINCE NO SUCH MATERIAL/DOCUMENT/INFORMATION WAS FOUND, POST SEARC H INQUIRY CONDUCTED BY THE A.O. DURING THE BLOCK ASSESSMENT PROCEEDINGS COULD NOT F ORM BASIS FOR MAKING ADDITION AND SINCE THE POST SEARCH INQUIRY WAS UNCONNECTED WITH THE INFORMATION/MATERIAL RECOVERED DURING THE SEARCH, IT WAS HELD THAT THE A.O. COULD REOPEN THE ASSESSMENT U/S 147 OF THE INCOME TAX ACT, 1961 BUT COULD NOT ADD THE INCOME U /S 158BC OF THE INCOME TAX ACT, I.T.(SS)A.NO 91, 95, 99 & 100/DEL/1997 AND 54/DEL/1998 23 1961. ON FURTHER APPEAL, THE TRIBUNAL UPHELD THE O RDER OF THE LD. CIT(A) ON THIS BASIS THAT THERE WAS NOTHING IN THE ASSESSMENT ORDER TO S HOW THAT ANY EVIDENCE WAS FOUND DURING THE SEARCH TO SUGGEST THAT GIFTS WERE BOGUS. AGAINST THIS ORDER OF THE TRIBUNAL IN THAT CASE, THE REVENUE PREFERRED AN APPEAL BEFOR E THE HON'BLE HIGH COURT OF DELHI AND UNDER THESE FACTS, IT WAS HELD BY THE HON'BLE H IGH COURT OF DELHI THAT SINCE NO INCRIMINATING MATERIAL WAS FOUND IN THE COURSE OF S EARCH, THE A.O. COULD NOT TAKE RESORT TO THE PROVISIONS OF CHAPTER XIVB OF THE ACT TO TAX WHAT WAS SAID TO BE UNDISCLOSED OR CONCEALED INCOME OF THE ASSESSEE. (II) SIMILARLY, IN THE CASE OF CIT VS G.K.SENNIAPP AN (SUPRA), IT WAS HELD BY THE HON'BLE HIGH COURT OF MADRAS THAT THE PROVISION S OF SECTION 158BB CLEARLY INDICATE THAT THE WORDS SUCH OTHER MATERIAL OR INF ORMATION AS ARE AVAILABLE WITH THE A.O. CANNOT BE BISECTED OR TAKEN IN ISOLATION FOR THE PURPOSE OF COMPUTATION. SUCH OTHER MATERIALS OR INFORMATION AS ARE AVAILABLE WIT H THE A.O. SHOULD AS PER THE SECTION, BE RELATABLE TO SUCH EVIDENCE, AND REGARDING SUCH EVIDENCE, IT WAS HELD THAT SUCH EVIDENCE MEANS AN EVIDENCE FOUND AS A RESULT OF SEA RCH AND IF THE MATERIAL OR INFORMATION AVAILABLE WITH THE A.O. IS NOT RELATABL E WITH AN EVIDENCE FOUND AS A RESULT OF SEARCH, NO ADDITION CAN BE MADE IN THE BLOCK ASS ESSMENT ON THE BASIS OF SUCH MATERIAL OR INFORMATION WHICH IS NOT RELATABLE TO A NY EVIDENCE FOUND AS A RESULT OF SEARCH. (III) SIMILARLY, IN THE CASE OF CIT VS JUPITER BUI LDERS (SUPRA) ALSO, IT WAS HELD BY THE HON'BLE HIGH COURT OF DELHI THAT IF NO INCRI MINATING MATERIAL WAS FOUND DURING THE SEARCH, ADDITION IN BLOCK ASSESSMENT IS NOT VAL ID. 31. IN THE PRESENT CASE, ONLY ALLEGED MATERIAL FOUN D IN COURSE OF SEARCH IS THE MONEY DEPOSITED IN VARIOUS SAVING ACCOUNTS AND FDRS AND I T IS NOT EVEN AN ALLEGATION THAT ANYTHING ELSE WAS FOUND IN COURSE OF SEARCH, IN ADD ITION TO VARIOUS BANK ACCOUNTS INCLUDING FDRS WITH PNB, NOROJI NAGAR, NEW DELHI, A ND OTHER ADDITIONS MADE BY THE A.O. IS NOT ON THE BASIS OF ANY MATERIAL FOUND IN C OURSE OF SEARCH OR INFORMATION WITH THE A.O. WHICH IS RELATABLE TO SUCH ALLEGED EVIDENC E FOUND IN THE COURSE OF SEARCH AND HENCE, BY RESPECTFULLY FOLLOWING THESE JUDGMENTS, W E HOLD THAT ALL OTHER ADDITIONS I.T.(SS)A.NO 91, 95, 99 & 100/DEL/1997 AND 54/DEL/1998 24 MADE BY THE A.O. ARE NOT SUSTAINABLE SINCE THE SAME ARE NOT ON THE BASIS OF OR RELATABLE TO ANY EVIDENCE FOUND IN THE COURSE OF SEARCH. 32. NOW, REGARDING THE ADDITION MADE BY THE A.O. WI TH REFERENCE TO THE DEPOSITS IN VARIOUS BANK ACCOUNTS AND FDRS WITH PNB, NOROJI NAG AR, NEW DELHI, THERE ARE TWO RELEVANT ASPECTS. ONE ASPECT IS THIS THAT WHETHER T HE MONEY DEPOSITED IN THE BANK IS INCOME OF THE ASSESSEE AND THE SECOND ASPECT IS THI S THAT EVEN IF IT IS ACCEPTED THAT THE MONEY DEPOSITED IN THESE BANK ACCOUNTS AND FDRS IS INCOME OF THE ASSESSEE, WHETHER SUCH INCOME CAN BE ADDED IN THE BLOCK ASSESSMENT. R EGARDING THE FIRST ASPECT, THIS IS THE EXPLANATION GIVEN BY THE LD. A.R. ON MERITS OF THIS ADDITION THAT THE AMOUNTS DEPOSITED IN THESE BANK ACCOUNTS IS THE MONEY OF TH E PARTY I.E. JHARKHAND MUKTI MORCHA (JMM) AND NOT OF THE ASSESSEE AND HENCE, NO ADDITION IS CALLED FOR ON ACCOUNT OF THESE DEPOSITS IN PNB, NOROJI NAGAR, NEW DELHI A LSO. BEFORE DECIDING THIS ASPECT, WE FEEL THAT SECOND ASPECT IS NEEDED TO BE DECIDED FIRST AND THE FIRST ASPECT WILL BE REQUIRED TO BE DECIDED ONLY IF IT IS FOUND THAT ADD ITION CAN BE MADE IN THE BLOCK ASSESSMENT IN RESPECT OF THESE DEPOSITS IN THE BANK EVEN IF IT IS ACCEPTED THAT IT IS AN INCOME OF THE ASSESSEE. HENCE, WE PROCEED TO DECIDE THE SECOND ASPECT FIRST AND FOR DOING SO, WE ASSUME THAT THE MONEY DEPOSITED IN THE NOROJI NAGAR BRANCH OF PNB REPRESENTS INCOME OF THE ASSESSEE. 33. REGARDING THIS ASPECT THAT NO ADDITION CAN BE M ADE IN BLOCK ASSESSMENT WITH RESPECT TO VARIOUS DEPOSITS IN NOROJI NAGAR BRANCH OF PNB EVEN IF IT IS AN INCOME OF THE ASSESSEE, WE FIRST TAKE NOTE OF FACTS OF THE PR ESENT CASE, WHICH ARE RELEVANT FOR DECIDING THIS ASPECT. IT WAS SUBMITTED BY THE LEARN ED AR OF THE ASSESSEE THAT THESE BANK ACCOUNTS WERE DULY DISCLOSED BY THESE ASSESSES IN THE STATEMENTS RECORDED BY ADI (INVESTIGATION) U/S 131 OF THE INCOME TAX ACT, 1961 ON 14.03.1996 AND ON OTHER DATES OF MARCH, 1996. IT IS SUBMITTED THAT A COPY OF THESE STATEMENTS GIVEN BY THESE FOUR PERSONS IS AVAILABLE ON RECORD AND AN ENGLISH VERSION OF THESE STATEMENTS IS ALSO FURNISHED IN THE PAPER BOOK. IT IS SUBMITTED THAT IN REPLY TO QUESTION NO.3, IT WAS STATED BY SHRI SHIBU SOREN THAT HE HAS TWO BANK ACC OUNTS OUT OF WHICH ONE IS IN PNB I.T.(SS)A.NO 91, 95, 99 & 100/DEL/1997 AND 54/DEL/1998 25 NOROJI NAGAR, NEW DELHI AND OTHER IS IN STATE BANK OF INDIA, SANSAD BHAVAN, NEW DELHI. IT WAS ALSO STATED BY HIM THAT HIS WIFE HAS NO BANK ACCOUNT AND HE DOES NOT KNOW OF ANY BANK ACCOUNT OF HIS YOUNGER SON. THE O THER QUESTION WAS AS TO WHETHER HE CAN EXPLAIN THE SOURCE OF THESE BANK ACCOUNTS, F DRS AND INVESTMENT IN THE CAR AND IN REPLY, IT WAS SUBMITTED THAT FDR OF RS.30 LACS I N HIS NAME AND OTHER FDR OF RS.30 LACS IN THE NAME OF HIMSELF AND THREE MPS ARE OUT O F THE FUNDS OF JMM PARTY. IT WAS ALSO SUBMITTED THAT SIMILAR STATEMENT WAS RECORDED OF SHRI SIMON MARANDI ALSO BY THE ADI (INVESTIGATION) ON THE SAME DATE I.E. 14.03.199 6 AND HE ALSO STATED IN REPLY TO QUESTION NO.10 THAT HE HAS ONE BANK ACCOUNT IN HIS NAME WITH PNB, NOROJI NAGAR BRANCH. IT WAS ALSO STATED THAT HE DOES NOT REMEMB ER THE ACCOUNT NUMBER AND THERE IS ONE MORE ACCOUNT IN THE SAME BRANCH OF PNB WHICH IS IN THE JOINT NAMES OF HIMSELF, SHRI SHIBU SOREN, MP, SHRI SURAJ MANDAL MP, AND SHR I SHAILENDRA MAHTO MP AND IT WAS ALSO SUBMITTED THAT COPIES OF BANK STATEMENT OF BOTH THESE BANK ACCOUNTS WILL BE SUPPLIED WITHIN ONE MONTH AND IF THERE IS ANY OTHER BANK ACCOUNT IN ADDITION TO THESE TWO BANK ACCOUNTS, HE WILL SEND THE COPY OF SUCH BA NK ACCOUNTS ALSO. WHEN THIS QUESTION WAS RAISED, AS TO WHAT ARE THE DETAILS OF FDRS WITH PNB, NOROJI NAGAR, NEW DELHI AS PER QUESTION NO.11, IT WAS SUBMITTED IN RE PLY THAT COMPLETE DETAILS WILL BE PROVIDED WITHIN ONE MONTH. ONE MORE QUESTION WAS R AISED THAT AS PER THE INFORMATION OF THE DEPARTMENT, HE HAS DEPOSITED ON 01.08.1993, RS.12 LACS AND RS.21 LACS WITH PNB, NOROJI NAGAR, NEW DELHI, IN FDR AND THERE IS D EPOSIT OF RS.10,000/- IN A JOINT SAVING BANK ACCOUNT NO.18914 IN THE JOINT NAME OF S HRI SHIBU SOREN, SHRI SIMON MARANDI AND SHRI SHAILENDRA MAHTO AND THERE IS ONE FDR NO.195, OF RS.30 LACS IN THE JOINT NAME OF THESE FOUR PERSONS. IN REPLY, IT WAS SUBMITTED THAT THESE ARE THE MONEY OF JMM PARTY WHICH ARE LYING IN THE JOINT SAVING BA NK ACCOUNT AND JOINT FDRS IN THE NAME OF FOUR MPS AND ALSO THE FD IN HIS PERSONAL NA ME. 34. WHEN THIS QUERY WAS RAISED AS TO WHY THE AMOUNT IN QUESTION WAS NOT DEPOSITED IN THE BANK ACCOUNT IN THE ACCOUNT OF THE PARTY JMM , IT WAS SUBMITTED IN REPLY THAT IT WAS DONE AS PER THE DECISION OF THE PARTY WHICH WAS TAKEN PRIOR TO 01.08.1993. THIS QUERY WAS ALSO RAISED AS TO FROM WHERE THE MONEY CA ME WITH THE PARTY AND IN REPLY, IT I.T.(SS)A.NO 91, 95, 99 & 100/DEL/1997 AND 54/DEL/1998 26 WAS SUBMITTED THAT THEY ARE RUNNING AGITATION FOR S EPARATE JHARKHAND STATE AND FOR THIS PURPOSE, THEY ARE GETTING DONATION IN THIS RESPECT AND AS PER THE DECISION OF THE PARTY, THE MONEY WAS DEPOSITED IN THEIR PERSONAL ACCOUNTS. THIS QUERY WAS ALSO RAISED AS TO WHETHER THEY HAVE NAMES AND ADDRESSES OF THE PERSON S WHO HAVE GIVEN THE DONATION TO THE PARTY AND IN REPLY, IT WAS SUBMITTED THAT THERE ARE COUPONS AND RECEIPTS AND THEY HAVE THE NAMES OF MLAS, MPS ETC. WHO COLLECTED THES E DONATIONS FROM THE GENERAL PUBLIC BUT THEY DO NOT HAVE INDIVIDUAL NAMES OF THE PUBLIC. 35. STATEMENT OF SHRI SHAILENDRA MAHTO WAS ALSO REC ORDED BY ADI (INVESTIGATION) U/S 131 ON 18.03.1996. IN THAT STATEMENT, IN REPLY TO QUESTION NO.3, IT WAS SUBMITTED BY SHRI SHAILENDRA MAHTO THAT THERE IS ONE BANK ACC OUNT WITH STATE BANK OF INDIA, PARLIAMENT ANNEXE, NEW DELHI WHICH IS IN HIS NAME A ND IT WAS OPENED IN THE YEAR 1990 WHEN HE WAS ELECTED AS MP. IT WAS ALSO SUBMIT TED THAT THERE IS ONE SAVING BANK ACCOUNT NO.18983 WITH PNB, NOROJI NAGAR, NEW DELHI AND THIS IS IN HIS NAME AND WAS OPENED ON 27.08.1993. IT WAS ALSO SUBMITTED TH AT HE HAS ASKED FOR STATEMENT FROM THE BANK AND HE CAN GIVE THE DETAILS AFTER GOING TH ROUGH THE BANK STATEMENT. WHEN QUERY WAS RAISED REGARDING FDRS WITH THE BANK, IT W AS SUBMITTED THAT THERE IS ONE FDR AT PNB, NOROJI NAGAR, NEW DELHI AND THE FDR NO. IS 196 DATED 01.08.1993 AND IT WAS ALSO SUBMITTED THAT AN AMOUNT OF RS.39.80 LA CS WAS DEPOSITED IN THE FDR AND SUBSEQUENTLY ON 8.10.1993, AN AMOUNT OF RS.20 LACS WAS TRANSFERRED FROM THIS FDR ACCOUNT TO SAVING BANK ACCOUNT NO.18983. WHEN HE W AS ASKED REGARDING SOURCE OF THE DEPOSITS OF RS.39.80 LACS IN THE FDR, IT WAS RE PLIED THAT THIS MONEY IS BELONGING TO THE PARTY JMM AND THE SAME WAS COLLECTED BY THE PAR TY AS DONATION IN VARIOUS PUBLIC MEETINGS AND SINCE HE WAS GENERAL SECRETARY OF THE PARTY, THIS AMOUNT WAS DEPOSITED IN HIS NAME IN THE BANK. 36. SIMILARLY, STATEMENT OF SHRI SURAJ MANDAL WAS A LSO RECORDED BY ADI (INVESTIGATION), NEW DELHI U/S 131 ON 14.03.1996. QUESTION NO.4 WAS REGARDING DETAILS OF BANK ACCOUNTS OF HIMSELF AND HIS FAMILY MEMBERS. IN REPLY, HE HAS NARRATED FULL DETAILS OF VARIOUS BANK ACCOUNTS WHICH INCLUDE EVEN ACCOUNT WITH STATE BANK OF INDIA, KARMATAND WHICH IS IN HIS NAME AND THERE IS ONE ACCOUNT WITH STATE BANK OF I.T.(SS)A.NO 91, 95, 99 & 100/DEL/1997 AND 54/DEL/1998 27 INDIA AT PATNA, VIDHAN SABHA BRANCH IN WHICH HIS SA LARY AS MLA WAS BEING DEPOSITED. IT WAS ALSO SUBMITTED THAT THERE IS ONE ACCOUNT IN STATE BANK OF INDIA, GODDA BRANCH AND IT WAS ALSO SUBMITTED THAT THERE IS ONE ACCOUNT WITH STATE BANK OF INDIA, SANSAD BHAVAN BRANCH WHERE HIS SALARY AS MP WAS BEING DEPO SITED. IT WAS ALSO SUBMITTED THAT THERE IS ONE SAVING BANK ACCOUNT IN HIS NAME W ITH PNB, NOROJI NAGAR, NEW DELHI IN WHICH THE MONEY LYING WAS OF JMM PARTY. IT WAS ALSO SUBMITTED THAT THERE IS JOINT SAVING BANK ACCOUNT WITH PNB NOROJI NAGAR, NEW DELH I WHICH IS IN JOINT NAME OF FOUR JMM MPS. IT WAS ALSO SUBMITTED THAT THERE IS ONE FDR IN HIS AND IN THE NAME OF HIS WIFE AT SBI KARMATAND AND 2 ND FDR WITH PNB IN THE JOINT NAME OF HIMSELF AND OTHER THREE JMM MPS. WHEN THE QUESTION WAS RAISE D REGARDING BALANCE IN VARIOUS BANK ACCOUNTS, IT WAS STATED BY HIM REGARDING SBI K ARMATAND, SBI VIDHAN SABHA B RANCH AND SBI GODDA AND SBI SANSAD BHAVAN. REGARDI NG PNB, NOROJI NAGAR, NEW DELHI, IT WAS SUBMITTED THAT IN THAT ACCOUNT, RS.46 LACS WAS DEPOSITED IN THE YEAR 1993 WHICH MAY BE AROUND RS.52 LACS ON THE DATE OF STATE MENT AFTER INCLUDING INTEREST AND THIS MONEY IS BELONGING TO THE PARTY I.E. JMM PARTY . IT WAS ALSO STATED THAT THERE IS ONE JOINT ACCOUNT WITH THE SAME BRANCH OF PNB IN THE JO INT NAME OF 4 MPS AND RS.10,000/- WAS DEPOSITED IN THE BANK ACCOUNT IN THE BEGINNING. 37. FROM THE ABOVE NARRATION OF THESE FOUR STATEMEN TS RECORDED BY ADI(INVESTIGATION) IN MARCH, 1996, I.E. PRIOR TO TH E DATE OF SEARCH, IT IS CLEAR THAT ALL THESE FOUR MPS HAVE CLEARLY BROUGHT OUT RELEVANT FA CTS AND THEY HAVE DULY DISCLOSED THE FACT OF VARIOUS BANK ACCOUNTS WITH PNB, NOROJI NAGAR, NEW DELHI AND FROM SOME OF THE STATEMENTS, IT IS ALSO COMING OUT THAT EVEN BEFORE THE STATEMENTS WERE RECORDED, CONCRETE INFORMATION WAS AVAILABLE WITH THE DEPARTM ENT REGARDING THE EXISTENCE OF THESE BANK ACCOUNTS, AMOUNTS AND MONEY DEPOSITED IN THESE BANK ACCOUNTS ALONG WITH RELEVANT DATES OF SUCH DEPOSITS BECAUSE IN SOME OF THE QUESTION ITSELF, DETAILS OF THE BANK ACCOUNT ALONG WITH DATE AND AMOUNT OF MONEY DE POSITED ETC. WERE STATED AND QUERY WAS RAISED FOR ITS SOURCE ETC. AND THESE FACT S SHOW THAT FULL DETAILS WERE AVAILABLE WITH THE DEPARTMENT. I.T.(SS)A.NO 91, 95, 99 & 100/DEL/1997 AND 54/DEL/1998 28 38. IN THE LIGHT OF THESE FACTS, NOW WE HAVE TO DEC IDE AS TO WHETHER IT CAN BE SAID THAT THESE BANK ACCOUNTS WERE INCRIMINATING MATERIA L FOUND IN COURSE OF SEARCH WHEN THE DEPARTMENT WAS HAVING DETAILED, CONCRETE AND SP ECIFIC INFORMATION INCLUDING NAME OF BANK, NAME OF BRANCH, ACCOUNT NOS., NAMES OF ACC OUNT HOLDERS, NATURE OF ACCOUNT I.E. SAVING/FD, DATE AND AMOUNT OF DEPOSITS ETC. A S PER THE ABOVE DISCUSSION, IT IS NOTED THAT THE DEPARTMENT WAS ALREADY HAVING COMPLE TE DETAILS REGARDING THESE BANK ACCOUNTS AND DEPOSITS IN THEM ALONG WITH INTEREST C REDITS IN THOSE BANK ACCOUNTS AND THESE ASSESSES ALSO HAVE GIVEN FULL DETAILS WHEN QU ERY WAS RAISED IN THE COURSE OF STATEMENTS RECORDED U/S 131 IN THE MONTH OF MARCH, 1996 WHICH IS PRIOR TO THE DATE OF SEARCH BECAUSE THE SEARCH WAS CONDUCTED ON THESE BA NK ACCOUNTS ON 26.04.1996. HENCE, WE HAVE TO DECIDE AS TO WHETHER IT CAN BE SA ID THAT FACTS REGARDING MONEY LYING IN DEPOSITS IN THESE BANK ACCOUNTS IS AN INCRIMINAT ING MATERIAL FOUND AS A RESULT OF SEARCH PARTICULARLY WHEN THE DEPARTMENT WAS KNOWING BEFOREHAND REGARDING EXISTENCE OF THESE BANK ACCOUNTS AND THE DETAILS REGARDING DE POSITS OF VARIOUS AMOUNTS ON VARIOUS DATES IN THESE BANK ACCOUNTS AND SUCH EXIST ENCE OF BANK ACCOUNTS AND THE AMOUNTS LYING DEPOSITED IN THESE BANK ACCOUNTS WAS ALSO ACCEPTED BY THESE FOUR PERSONS IN THE COURSE OF STATEMENT RECORDED BY ADIT U/S 131 IN THE MONTH OF MARCH 1996 I.E. PRIOR TO THE DATE OF SEARCH. THE CASE WI LL BE DIFFERENT IF THE DEPARTMENT HAS SOME VAGUE INFORMATION REGARDING EXISTENCE OF SOME UNDISCLOSED ASSET LYING SOMEWHERE. BUT THE CASE IS DIFFERENT WHEN CONCRETE AND DETAILED INFORMATION IS AVAILABLE WITH THE DEPARTMENT SUCH AS NAME OF BANK ACCOUNT HOLDER, NAME OF THE BANK AND ITS BRANCH, ACCOUNT NUMBER, AMOUNT OF DEPOSITS AND DATE OF DEPOSITS ETC. IN THE PRESENT CASE, COMPLETE DETAILS INCLUDING THE NAME O F THE PERSONS IN WHOSE NAMES THE MONEY WAS DEPOSITED, NAME OF THE BANK WITH ITS BRAN CH DETAILS, ACCOUNT NUMBER, DATE AND AMOUNT OF DEPOSITS ETC. WAS VERY MUCH AVAILABLE WITH THE DEPARTMENT PRIOR TO THE DATE OF SEARCH AND EVEN AFTER SEARCH, THERE WAS NO SEIZURE ALSO AND MERELY A PROHIBITORY ORDER U/S 132(3) WAS PLACED. UNDER THE SE FACTS, IN OUR CONSIDERED OPINION, THIS IS NOT AN INCRIMINATING MATERIAL FOUND AS A RE SULT OF SEARCH BECAUSE COMPLETE DETAILS WERE ALREADY AVAILABLE WITH THE DEPARTMENT EVEN PRIOR TO THE DATE OF SEARCH. I.T.(SS)A.NO 91, 95, 99 & 100/DEL/1997 AND 54/DEL/1998 29 FOR THE PURPOSE OF READY REFERENCE, WE WOULD LIKE T O REPRODUCE THE PROVISIONS OF THE RELEVANT SECTION OF CHAPTER XIVB, I.E. SECTION 158B (B) AND 158BB(1): CHAPTER XIV-B: SPECIAL PROCEDURE FOR ASSSSMENT OF S EARCH CASES DEFINITIONS: SECTION 158B(B): IN THIS CHAPTER, UNLESS THE CONTEXT OTHERWISE REQU IRES,- (B) 'UNDISCLOSED INCOME' INCLUDES ANY MONEY, BUL LION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR ANY INCOME BASED ON AN Y ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS, WHERE S UCH MONEY, BULLION, JEWELLERY, VALUABLE ARTICLE, THING, ENTRY IN THE BO OKS OF ACCOUNT OR OTHER DOCUMENT OR TRANSACTION REPRESENTS WHOLLY OR PARTLY INCOME OR PROPERTY WHICH HAS NOT BEEN OR WOULD NOT HAVE BEEN DISCLOSED FOR T HE PURPOSES OF THIS ACT 53 [, OR ANY EXPENSE, DEDUCTION OR ALLOWANCE CLAIMED UNDE R THIS ACT WHICH IS FOUND TO BE FALSE]. SECTION 158BB(1): COMPUTATION OF UNDISCLOSED INCOME OF THE BLOCK PERI OD. THE UNDISCLOSED INCOME OF THE BLOCK PERIOD SHALL BE THE AGGREGATE OF THE TOTAL INCOME OF THE PREVIOUS YEARS FALLING WITHIN THE BLO CK PERIOD COMPUTED, [M ACCORDANCE WITH THE PROVISIONS OF THIS ACT, ON THE BASIS OF EVIDENCE FOUND AS A RESULT OF SEARCH OR REQUISITION OF BOOKS OF ACCOUNT OR OTHER DOCUMENTS AND SUCH OTHER MATERIALS OR INFORMATION AS ARE AVAILABLE WIT H THE ASSESSING OFFICER AND RELATABLE TO SUCH EVIDENCE], AS REDUCED BY THE AGGR EGATE OF THE TOTAL INCOME, OR AS THE CASE MAY BE, AS INCREASED BY THE AGGREGATE OF T HE LOSSES OF SUCH PREVIOUS YEARS, DETERMINED, (A) WHERE ASSESSMENTS UNDER SECTION 143 OR SECTION 144 OR SECTION 147 HAVE BEEN CONCLUDED PRIOR TO THE DATE OF COMMENCEMENT OF THE SEARCH OR THE DATE OF REQUISITION], ON THE BASIS OF SUCH ASSESSMENTS; (B) WHERE RETURNS OF INCOME HAVE BEEN FILED UNDER S ECTION 139 -'[OR IN RESPONSE TO A NOTICE ISSUED UNDER SUB-SECTION (I) OF SECTION 142 OR SECTION 148] BUT ASSESSMENTS HAVE NOT BEEN MADE TILL THE DATE OF SEA RCH OR REQUISITION, ON THE BASIS OF THE INCOME DISCLOSED IN SUCH RETURNS; (C) WHERE THE DUE DATE FOR FILING A RETURN OF INCOM E HAS EXPIRED, BUT NO RETURN OF INCOME HAS BEEN FILED, (A) ON THE BASIS OF ENTRIES AS RECORDED IN THE BOOK S OF ACCOUNT AND OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE ON OR BEF ORE THE DATE OF THE SEARCH OR REQUISITION WHERE SUCH ENTRIES RESULT IN COMPUTATION OF LOSS FOR ANY PREVIOUS YEAR FALLING IN THE BLOCK PERIOD: OR (B) ON THE BASIS OF ENTRIES AS RECORDED IN THE BOOK S OF ACCOUNT AND OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE ON OR BEF ORE THE DATE OF THE SEARCH OR REQUISITION WHERE SUCH INCOME DOES NOT EX CEED THE MAXIMUM AMOUNT NOT CHARGEABLE TO TAX FOR ANY PREVIOUS YEAR FALLING IN THE BLOCK PERIOD; (CA) WHERE THE DUE DATE FOR FILING A RETURN OF INCO ME HAS EXPIRED, BUT NO RETURN OF INCOME HAS BEEN FILED, AS NIL IN CASES NOT FALLING UNDER CLAUSE (C-);] (D) WHERE THE PREVIOUS YEAR HAS NOT ENDED OR THE DA TE OF FILING THE RETURN OF INCOME UNDER SUB-SECTION (1) OF SECTION 139 HAS NOT EXPIRED, ON THE BASIS OF ENTRIES RELATING TO SUCH INCOME OR TRANSACTIONS AS RECORDED IN THE BOOKS OF ACCOUNT AND OTHER DOCUMENTS MAINTAINED IN THE NORMA L COURSE ON OR BEFORE THE DATE OF THE SEARCH OR REQUISITION RELATING TO SUCH PREVIOUS YEARS; (E) WHERE ANY ORDER OF SETTLEMENT HAS BEEN MADE UND ER SUB-SECTION (4) I.T.(SS)A.NO 91, 95, 99 & 100/DEL/1997 AND 54/DEL/1998 30 OF SECTION 245D, ON THE BASIS OF SUCH ORDER; {/) WH ERE AN ASSESSMENT OF UNDISCLOSED INCOME HAD BEEN MADE EARLIER UNDER CLAU SE (C) OF SECTION 158BC, ON THE BASIS OF SUCH ASSESSMENT. EXPLANATION.FOR THE PURPOSES OF DETERMINATION OF U NDISCLOSED INCOME, (A) THE TOTAL INCOME OR LOSS OF EACH PREVIOUS YEAR SHALL, FOR THE PURPOSE OF AGGREGATION, BE TAKEN AS THE TOTAL INCOME OR LOSS C OMPUTED IN ACCORDANCE WITH THE PROVISIONS OF ? '[THIS ACT] WITHOUT GIVING EFFECT TO SET OFF OF BRO UGHT FORWARD LOSSES UNDER CHAPTER VI OR UNABSORBED DEPRE CIATION UNDER SUB- SECTION (2) OF SECTION 32: ''[PROVIDED THAT IN COMPUTING DEDUCTIONS UNDER CHAP TER VI-A FOR THE PURPOSES OF THE SAID AGGREGATION, EFFECT SHALL BE GIVEN TO S ET OFF OF BROUGHT FORWARD LOSSES UNDER CHAPTER VI OR UNABSORBED DEPRECIATION UNDER SUB-SECTION (2) OF SECTION 32;J 6] [(B) OF A FIRM, RETURNED INCOME AND TOTAL INCOME AS SESSED FOR EACH OF THE PREVIOUS YEARS FALLING WITHIN THE BLOCK PERIOD SHALL BE THE INCOME DETERMINED BEFORE ALLOWING DEDUCTION OF SALARY, INTEREST, COMMISSION, BONUS OR REMUNERATION BY WHATEVER NAME CALLED S2 [TO ANY PARTNER NOT BEING A WORKING PARTNER]: PROVIDED THAT UNDISCLOSED INCOME OF THE FIRM SO DET ERMINED SHALL NOT BE CHARGEABLE TO TAX IN THE HANDS OF THE PARTNERS, WHE THER ON ALLOCATION OR ON ACCOUNT OF ENHANCEMENT;] (F) ASSESSMENT UNDER SECTION 143 INCLUDES DETERMINA TION OF INCOME UNDER SUB- SECTION (1) OR SUB-SECTION (IB) OF SECTION 143. (2) IN COMPUTING THE UNDISCLOSED INCOME OF THE BLOC K PERIOD, THE PROVISIONS OF SECTIONS 68,69,69A, 69B AND 69C SHALL, SO FAR AS MA Y BE, APPLY AND REFERENCES TO 'FINANCIAL YEAR' IN THOSE SECTIONS SHALL BE CONSTRU ED AS REFERENCES TO THE RELEVANT PREVIOUS YEAR FALLING IN THE BLOCK PERIOD INCLUDING THE PREVIOUS YEAR ENDING WITH THE DATE OF SEARCH OR OF THE REQUISITION. (3) THE BURDEN OF PROVING TO THE SATISFACTION OF TH E ASSESSING OFFICER THAT ANY UNDISCLOSED INCOME HAD ALREADY BEEN DISCLOSED IN AN Y RETURN OF INCOME FILED BY THE ASSESSEE BEFORE THE COMMENCEMENT OF SEARCH OR O F THE REQUISITION, AS THE CASE MAY BE, SHALL BE ON THE ASSESSEE. (4) FOR THE PURPOSE OF ASSESSMENT UNDER THIS CHAPTE R, LOSSES BROUGHT FORWARD FROM THE PREVIOUS YEAR UNDER CHAPTER VI OR UNABSORB ED DEPRECIATION UNDER SUB- SECTION (2) OF SECTION 32 SHALL NOT BE SET OIL AGAI NST THE UNDISCLOSED INCOME DETERMINED IN THE BLOCK ASSESSMENT UNDER THIS CHAPT ER, BUT MAY BE CARRIED FORWARD FOR BEING SET OFF IN THE REGULAR ASSESSMENT S. 39. FROM THE ABOVE PROVISIONS OF CLAUSE (B) OF SECT ION 158B, IT IS SEEN THAT UNDISCLOSED INCOME INCLUDES ANY MONEY, BULLION, JEW ELLERY AND OTHER VALUABLE ARTICLE OR THING AND ANY INCOME BASED ON ANY ENTRY IN THE B OOKS OF ACCOUNTS OR OTHER DOCUMENT OR TRANSACTION WHERE SUCH MONEY, BULLION, JEWELLERY ETC. REPRESENT WHOLLY OR PARTLY INCOME OF THE PROPERTY WHICH HAS NOT BEEN AN D WOULD NOT HAVE BEEN DISCLOSED FOR THE PURPOSE OF THIS ACT. NOW, WE ANALYZE THE FACTS OF THE PRESENT CASE IN THE LIGHT OF THESE PROVISIONS OF SECTION 158B(B) OF THE ACT. IN THE PRESENT CASE, WE FIND THAT MONEY LYING IN VARIOUS BANK ACCOUNTS WAS ALREADY IN THE KNOWLEDGE OF THE DEPARTMENT WITH COMPLETE DETAILS AND WHEN THE DEPARTMENT CONFR ONTED THE ASSESSES, IN THE I.T.(SS)A.NO 91, 95, 99 & 100/DEL/1997 AND 54/DEL/1998 31 STATEMENTS RECORDED U/S 131 IN THE MONTH OF MARCH 1 996, ALL THESE PERSONS HAVE DULY ACCEPTED AND GIVEN DETAILS OF THESE DEPOSITS IN THE SE BANK ACCOUNTS INCLUDING THE DATE AND AMOUNT OF DEPOSITS AND HENCE, THE QUESTION IS W HETHER THESE BANK ACCOUNTS CAN BE SAID TO COMPLY WITH THE REQUIREMENT OF THE PROVISIO NS OF SECTION 158B(B) THAT THIS WOULD NOT HAVE BEEN DISCLOSED FOR THE PURPOSE OF TH IS ACT. IN ADDITION TO THIS, AS PER THE PROVISIONS OF SECTION 158BB, AN ADDITION IN THE BLOCK ASSESSMENT CAN BE MADE ONLY ON THE BASIS OF EVIDENCE FOUND AS A RESULT OF SEARCH. IT IS BY NOW A SETTLED POSITION OF LAW THAT ONLY THAT EVIDENCE FOUND AS A RESULT OF SEARCH WILL BE RELEVANT FOR MAKING ANY ADDITION IN THE BLOCK ASSESSMENT WHICH I S CONSIDERED AN INCRIMINATING MATERIAL BECAUSE THE REGULAR BOOKS MAY ALSO BE FOUN D IN COURSE OF SEARCH BUT THE ENTRIES IN REGULAR BOOKS CANNOT BE CONSIDERED IN BL OCK ASSESSMENT. THE REASON IS THIS THAT THE EXISTENCE OF REGULAR BOOKS IS IN THE KNOWL EDGE OF THE DEPARTMENT. 40. IN THE PRESENT CASE, THERE IS NO REQUISITION OF BOOKS OF ACCOUNTS AND HENCE, THE ONLY BASIS ON WHICH ANY ADDITION CAN BE MADE IN THE BLOCK ASSESSMENT WITH RESPECT TO THESE BANK ACCOUNTS CAN BE THAT IT IS ON THE BASIS OF INCRIMINATING MATERIAL FOUND AS A RESULT OF SEARCH. WE HAVE ALREADY SEEN THAT THE EX ISTENCE OF THESE BANK ACCOUNTS ALONG WITH COMPLETE DETAILS REGARDING THE NAMES OF ACCOUN T HOLDERS, NAME OF THE BANK AND ITS BRANCH ALONG WITH DATE AND AMOUNT OF DEPOSITS E TC. WERE KNOWN TO THE DEPARTMENT BEFORE HAND AND HENCE, IT CANNOT BE SAID THAT THIS IS AN INCRIMINATING MATERIAL FOUND AS A RESULT OF SEARCH. 41. IN THE LIGHT OF THESE FACTS AND ABOVE NOTED LEG AL PROVISIONS, NOW, WE EXAMINE THE APPLICABILITY OF THE JUDGMENT RELIED UPON BY TH E LEARNED AR OF THE ASSESSEE BEING THE JUDGMENT OF HON'BLE HIGH COURT OF DELHI RENDERE D IN THE CASE OF L R GUPTA AND OTHERS VS UNION OF INDIA AND OTHERS (SUPRA). ALTHO UGH THIS JUDGMENT IS WITH REGARD TO VALIDITY OF SEARCH ITSELF AND IN THE PRESENT CAS E, WE ARE NOT DECIDING THIS QUESTION AS TO WHETHER THE SEARCH IN THE PRESENT CASE IS VALID SEARCH OR NOT BECAUSE BEFORE US NEITHER THERE IS AN OBJECTION RAISED BY THE ASSESSE E REGARDING VALIDITY OF SEARCH NOR THIS TRIBUNAL IS COMPETENT TO DECIDE THE ISSUE REGARDING VALIDITY OF SEARCH BUT VARIOUS OBSERVATIONS OF HONBLE DELHI HIGH COURT IN THAT CA SE WILL BE USEFUL AND RELEVANT FOR I.T.(SS)A.NO 91, 95, 99 & 100/DEL/1997 AND 54/DEL/1998 32 THE PURPOSE OF DECIDING THIS ASPECT OF THE MATER AS TO WHETHER IN THE FACTS OF THE PRESENT CASE, IT CAN BE SAID THAT THESE BANK ACCOUN TS ARE INCRIMINATING EVIDENCES FOUND AS A RESULT OF SEARCH. IN OUR CONSIDERED OPINION, FOLLOWING PARA OF PAGE 47-48 OF 194 ITR IS RELEVANT IN THE PRESENT CASE AND HENCE, THE SAME IS REPRODUCED AS UNDER: (C) REFERS TO MONEY, BULLION OR JEWELLERY OR OTHER VALUABLE ARTICLES WHICH, EITHER WHOLLY OR PARTLY, SHOULD HAVE BEEN THE INCOME OF AN ASSESSEE WHICH HAS NOT BEEN DISCLOSED FOR THE PURPOSE OF THE ACT. THE SAID SUB-CLAUSE PERTAINS ONLY TO MOVABLE AND NOT IMMOVABLE ASSETS. SECONDLY, IT PERT AINS TO THOSE ASSETS WHICH, WHOLLY OR PARTLY, REPRESENT WHAT SHOULD HAVE BEEN H IS INCOME. THE EXPRESSION INCOME 'WHICH HAS NOT BEEN, OR WOULD NOT BE, DISCLO SED FOR THE PURPOSES OF THE INCOME-TAX ACT' WOULD MEAN, THAT INCOME WHICH IS LI ABLE TO TAX BUT WHICH THE ASSESSEE HAS NOT RETURNED IN HIS INCOME-TAX RETURN OR MADE KNOWN TO THE INCOME-TAX DEPARTMENT. THE SUB-CLAUSE ITSELF REFERS TO THIS AS 'UNDISCLOSED INCOME OR PROPERTY'. IN OUR OPINION, THE WORDS 'UND ISCLOSED', IN THAT CONTEXT, MUST MEAN INCOME WHICH IS HIDDEN FROM THE DEPARTMEN T. CLAUSE (C) WOULD REFER TO CASES WHERE THE ASSESSEE KNOWS THAT THE MOVABLE ASSET IS INCOME OR REPRESENTS INCOME WHICH IS TAXABLE BUT WHICH ASSET IS NOT DISCLOSED TO THE DEPARTMENT FOR THE PURPOSE OF TAXATION. THOSE ASSET S MUST BE OR REPRESENT HIDDEN OR SECRETED FUNDS OR ASSETS. WHERE, HOWEVER, THE EXISTENCE OF THE MONEY OR ASSET IS KNOWN TO THE INCOME-TAX DEPARTMENT AND WHERE THE CASE OF THE ASSESSEE IS THAT THE SAID MONEY OR VALUABLE ASSET I S NOT LIABLE TO BE TAXED, THEN, IN OUR OPINION, THE PROVISIONS OF SUB-CLAUSE (C) OF SECTION 132(1) WOULD NOT BE ATTRACTED. AN ASSESSEE IS UNDER NO OBLIGATION TO DI SCLOSE IN HIS RETURN OF INCOME ALL THE MONEYS WHICH ARE RECEIVED BY HIM WHICH DO N OT PARTAKE OF THE CHARACTER OF INCOME OR INCOME LIABLE TO FAX. IF AN ASSESSEE R ECEIVES, ADMITTEDLY, A GIFT FROM A RELATION OR EARNS AGRICULTURAL INCOME WHICH IS NOT SUBJECT TO TAX, THEN HE WOULD NOT BE LIABLE TO SHOW RECEIPT OF THAT MONEY I N HIS INCOME-TAX RETURN, NON- DISCLOSURE OF THE SAME WOULD NOT ATTRACT THE PROVIS IONS OF SECTION 132(1)(C). IT MAY BE THAT THE OPINION OF THE ASSESSEE THAT THE RE CEIPT OF SUCH AMOUNT IS NOT TAXABLE MAY BE INCORRECT AND, IN LAW, THE SAME MAY BE TAXABLE BUT WHERE THE DEPARTMENT IS AWARE OF THE EXISTENCE OF SUCH AN ASS ET OR THE RECEIPT OF SUCH AN INCOME BY THE ASSESSEE, THEN THE DEPARTMENT MAY BE FULLY JUSTIFIED IN ISSUING A NOTICE UNDER SECTION 148 OF THE ACT, BUT NO ACTION CAN BE TAKEN UNDER SECTION 132(L)(C). AN AUTHORIZATION UNDER SECTION 132(1) CA N BE ISSUED IF THERE IS A REASONABLE BELIEF THAT THE ASSESSEE DOES NOT WANT T HE INCOME-TAX DEPARTMENT TO KNOW ABOUT THE EXISTENCE OF SUCH INCOME OR ASSET IN AN EFFORT TO ESCAPE ASSESSMENT. SECTION 132(L)(C) HAS BEEN INCORPORATED IN ORDER TO ENABLE THE DEPARTMENT TO TAKE PHYSICAL POSSESSION OF THOSE MOV ABLE PROPERTIES OR ARTICLES WHICH ARE OR REPRESENT UNDISCLOSED INCOME OR PROPER TY. THE WORDS 'UNDISCLOSED INCOME' MUST MEAN- INCOME WHICH IS LIABLE TO BE TAX ED UNDER THE PROVISIONS OF THE INCOME-TAX ACT BUT WHICH HAS NOT BEEN DISCLOSED BY AN ASSESSEE IN AN EFFORT TO ESCAPE ASSESSMENT. 'NOT DISCLOSED' MUST MEAN THE INTENTION OF-THE ASSESSEE TO HIDE THE EXISTENCE OF THE INCOME OR THE ASSET FR OM THE INCOME-TAX DEPARTMENT WHILE BEING AWARE THAT THE SAME IS RIGHTLY TAXABLE. 42. FROM THE ABOVE PARA OF THIS JUDGMENT OF HONBLE DELHI HIGH COURT RENDERED IN THE CASE OF L R GUPTA (SUPRA), WE FIND THAT IT IS O BSERVED BY THE HON'BLE HIGH COURT OF I.T.(SS)A.NO 91, 95, 99 & 100/DEL/1997 AND 54/DEL/1998 33 DELHI THAT IT MAY BE THAT IN THE OPINION OF THE ASS ESSEE, ANY RECEIPT OF AN AMOUNT IS NOT TAXABLE AND SUCH OPINION OF THE ASSESSEE MAY BE INC ORRECT AND THE SAME MAY BE TAXABLE BUT WHERE THE DEPARTMENT IS AWARE OF THE EX ISTENCE OF SUCH AN ASSET OR RECEIPT OF SUCH AN AMOUNT BY THE ASSESSEE THEN THE DEPARTME NT MAY BE FULLY JUSTIFIED IN ISSUING NOTICE U/S 148 OF THE INCOME TAX ACT, 1961 BUT NO A CTION CAN BE TAKEN U/S 132(1)(C). WHEN AS PER THE HON'BLE HIGH COURT OF DELHI, IF THE EXISTENCE OF ASSET IS KNOWN TO THE DEPARTMENT, THE DEPARTMENT MAY BE JUSTIFIED TO ISSU E NOTICE U/S 148 BUT SEARCH U/S 131 IS NOT JUSTIFIED, THEN HOW IT CAN BE SAID THAT ON T HE BASIS OF A SEARCH CONDUCTED UNDER THESE FACTS, THE EXISTENCE OF SUCH ASSET WHICH WAS IN THE KNOWLEDGE OF THE DEPARTMENT CAN BE SAID TO BE AN INCRIMINATING EVIDENCE FOUND I N THE COURSE OF SEARCH. ANYTHING FOUND IN THE COURSE OF SEARCH WHICH IS NOT ALREADY KNOWN MAY BE CONSIDERED AS INCRIMINATING EVIDENCE BUT A KNOWN THING CANNOT BE FOUND AGAIN SUGGESTING THAT AN INCRIMINATING EVIDENCE IS FOUND AS A RESULT OF SEAR CH. THIS CAN BE UNDERSTOOD WITH THE HELP OF AN EXAMPLE ALSO. LET US PRESUME THAT THE D EPARTMENT KNOWS THAT A PERSON B IS HAVING AN AMOUNT OF RS.1 LAC IN HIS BRIEF CASE L YING WITH A. WHEN A QUERY IS RAISED, THAT PERSON ALSO ACCEPTS THAT HE IS HAVING AN AMOUNT OF RS.1 LAC IN HIS BRIEF CASE LYING WITH A AND LATER ON, ONLY THAT BRIEF CASE I S SEARCHED AND IT IS FOUND THAT HIS BRIEF CASE WAS HAVING AN AMOUNT OF RS.1 LAC ONLY. BEFORE SEARCHING THE BRIEF CASE, IT WAS KNOWN TO THE DEPARTMENT THAT THIS BRIEF CASE IS BELONGING TO MR. B AND THE SAME IS CONTAINING AN AMOUNT OF RS.1 LAC AND AFTER THE A CTION OF THE SEARCH, IT HAS MERELY CONFIRMED SUCH KNOWLEDGE OF THIS FACT THAT THE BRIE F CASE OF MR. B IS HAVING AN AMOUNT OF RS.1 LAC BUT THIS IS NOT AN NEW EVIDENCE FOUND IN THE COURSE OF SEARCH. IN OUR CONSIDERED OPINION, THE SEARCH UNDER THESE FACT S MERELY CONFIRMED THE KNOWLEDGE WHICH WAS AVAILABLE PRIOR TO THE ACTION OF THE SEAR CH AND HENCE, IT IS NOT NEW EVIDENCE FOUND IN THE COURSE OF SEARCH BUT IT IS A CONFIRMAT ION OF KNOWLEDGE ABOUT THE EXISTENCE OF AN ASSET BY WAY OF VERIFICATION IN THE COURSE OF SEARCH. IN OUR CONSIDERED OPINION, THERE IS A DIFFERENCE BETWEEN EVIDENCE FOUND IN THE COURSE OF SEARCH AND CONFIRMATION OF CONCRETE INFORMATION AVAILABLE BEFORE THE SEARCH . THE CONCLUSION WILL BE DIFFERENT IF THE INFORMATION OR KNOWLEDGE BEFORE SEARCH IS VA GUE. IN THAT CASE ALSO, THE I.T.(SS)A.NO 91, 95, 99 & 100/DEL/1997 AND 54/DEL/1998 34 CONCLUSION MAY BE DIFFERENT WHERE THERE WAS A CONCR ETE INFORMATION ABOUT EXISTENCE OF AN ASSET BUT THE SEARCH ACTION IS NOT RESTRICTED TO THE SEARCH OF THAT KNOWN ASSET ONLY BUT THE SEARCH WAS CARRIED OUT FOR OTHER THINGS ALS O AND ULTIMATELY AFTER SEARCH, ONLY THAT KNOWN ASSET WAS FOUND IN SEARCH OR THAT ASSET AND SOME OTHER ASSET WAS ALSO FOUND IN SEARCH. BUT WHEN SEARCH IS RESTRICTED TO THAT IT EM OF ASSET ONLY FOR WHICH DETAILED AND CONCRETE INFORMATION WAS ALREADY AVAILABLE, IT CANNOT BE SAID THAT SUCH ASSET WAS FOUND IN COURSE OF SEARCH. AT THE BEST, IT CAN BE S AID THAT THE SEARCH HAS CONFIRMED THE KNOWLEDGE ABOUT THAT ASSET. AS PER THE PROVISIONS OF SECTION 158BB, ADDITION CAN BE MADE IN THE COURSE OF A BLOCK ASSESSMENT ON THE BAS IS OF EVIDENCE FOUND IN THE COURSE OF SEARCH AND NOT ON THE BASIS OF CONFIRMATION OF A PRIOR KNOWLEDGE BY WAY OF SEARCH. THIS CAN BE VIEWED FROM A DIFFERENT ANGLE ALSO. IT IS OBSERVED BY THE HON'BLE HIGH COURT OF DELHI IN THE CASE OF LR GUPTA (SUPRA) THA T WHEN THE EXISTENCE OF AN ASSET IS IN THE KNOWLEDGE OF THE DEPARTMENT, DEPARTMENT MAY BE FULLY JUSTIFIED IN ISSUING NOTICE U/S 148 OF THE INCOME TAX ACT, 1961. IN THE PRESENT CASE ALSO, THE EXISTENCE OF BANK ACCOUNTS IN THE NAME OF THESE ASSESSES WITH CO MPLETE DETAILS SUCH AS NAME OF THE BANK, BRANCH, ACCOUNT NUMBER AS WELL AS DATE AND AM OUNT OF DEPOSITS ETC. WERE KNOWN TO THE DEPARTMENT AND HENCE, AS PER THIS JUDGMENT O F HON'BLE HIGH COURT OF DELHI RENDERED IN THE CASE OF L R GUPTA (SUPRA), THE DEPA RTMENT COULD HAVE ISSUED A NOTICE U/S148 OF THE INCOME TAX ACT, 1961. IF THIS BE SO THEN CAN IT BE SAID THAT UNDER THE SAME FACTS, AN ADDITION CAN BE MADE ON THE BASIS OF NOTICE ISSUED TO THE ASSESSEE U/S 148 AND ALSO IN THE CASE OF BLOCK ASSESSMENT UNDER CHAPTER XIVB WHICH WILL RESULT INTO ATTRACTION OF HIGHER RATE OF TAX @ 60%. THIS IS BY NOW A SETTLED POSITION OF LAW THAT BLOCK ASSESSMENT IS WITH RESPECT TO THE UNDISC LOSED INCOME, FOUND AS PER THE EVIDENCE FOUND IN THE COURSE OF SEARCH AND REGULAR ASSESSMENT HAS TO BE COMPLETED ON THE BASIS OF REGULAR RETURN OF INCOME FILED BY THE ASSESSEE AS PER SECTION 139 OR SECTION 142(1) OR ON THE BASIS OF NOTICE ISSUED UND ER SECTION 148 AND HENCE, AN INCOME CANNOT BE SUBJECT MATTER OF ADDITION IN THE BLOCK ASSESSMENT AS WELL AS IN REGULAR ASSESSMENT. AS PER THE ABOVE CITED JUDGMENT OF HON'BLE HIGH COURT OF DELHI, THIS CAN BE A SUBJECT MATTER OF REGULAR ASSESSMENT, BY WAY OF ISSUING NOTICE U/S 148 I.T.(SS)A.NO 91, 95, 99 & 100/DEL/1997 AND 54/DEL/1998 35 AND HENCE, IT IS IMPLIED THAT THIS CANNOT BE A SUBJ ECT MATTER OF BLOCK ASSESSMENT UNDER CHAPTER XIVB. WHETHER THE DEPARTMENT HAS TAKEN ACT ION FOR REGULAR ASSESSMENT OR NOT, IS NOT RELEVANT FOR THE PURPOSE OF DECIDING TH E ISSUE AS TO WHETHER ANY ADDITION CAN BE MADE IN THE CASE OF BLOCK ASSESSMENT. WHAT IS RELEVANT IS THIS THAT WHETHER THE AMOUNT IN QUESTION FOR WHICH THE ADDITION IS PROPOS ED BY THE A.O. IS BASED ON ANY EVIDENCE FOUND AS A RESULT OF SEARCH OR NOT. IN OU R CONSIDERED OPINION, IN THE PRESENT CASE, THE AMOUNT WHICH HAS BEEN ADDED BY THE A.O. I N RESPECT OF DEPOSITS IN VARIOUS BANK ACCOUNTS WITH PNB NOROJI NAGAR, NEW DELHI IS N OT ON THE BASIS OF ANY EVIDENCE FOUND IN THE COURSE OF SEARCH AND HENCE, NO SUCH AD DITION CAN BE MADE IN THE BLOCK ASSESSMENT PROCEEDINGS. IN HER WRITTEN SUBMISSIONS , ON THIS ASPECT, LEARNED COUNSEL FOR THE REVENUE HAS MERELY SUBMITTED THAT STATEMENT S MADE UNDER SECTION 131 CANNOT BE DEEMED TO BE TRUE AND FULL DISCLOSURE OF DISCLO SED INCOME AND HENCE ADDITION CAN BE MADE IN BLOCK. HER SECOND CONTENTION WAS THIS TH AT NO RETURN OF INCOME WAS FILED BY THESE ASSESSES AT ANY POINT OF TIME AND HENCE, T HERE IS NO QUESTION OF THERE BEING ANYTHING DISCLOSED. THESE CONTENTIONS OF HER ARE NO T VALID BECAUSE THIS IS NOT THE LEGAL POSITION AS EXPLAINED BY HONBLE DELHI HIGH COURT I N THE CASE OF L. R. GUPTA (SUPRA) THAT IF THERE IS ANY UNDISCLOSED INCOME AND THERE I S A SEARCH, ADDITION OF SUCH UNDISCLOSED INCOME IS TO BE MADE IN BLOCK. IT IS OB SERVED BY THE HONBLE JURISDICTIONAL HIGH COURT IN THIS CASE THAT WHERE THE DEPARTMENT I S AWARE OF THE EXISTENCE OF AN ASSET, THEN THE DEPARTMENT MAY BE FULLY JUSTIFIED IN ISSUI NG NOTICE U/S 148 IF THE DEPARTMENT FEELS THAT THERE IS ANY UNDISCLOSED INCOME. THIS SH OWS THAT FOR UNDISCLOSED INCOME, ADDITION CAN BE MADE IN REASSESSMENT PROCEEDINGS AL SO IF THE DEPARTMENT IS AWARE ABOUT THE ASSETS AND DEPARTMENT DOES NOT AGREE WITH THE EXPLANATION OF THE ASSESSEE THAT RECEIPT OUT OF WHICH THE ASSET HAS COME INTO E XISTENCE IS NOT TAXABLE. IN THE PRESENT CASE ALSO, THE DEPARTMENT IS FULLY AWARE WI TH PRECISE AND MINUTE DETAILS ABOUT THESE BANK ACCOUNTS AND MONEY LYING THEREIN AND THE ASSESSEE ALSO ACCEPTED ABOUT THESE BANK ACCOUNTS IN THE STATEMENTS U/S 131 AND A LSO EXPLAINED THAT THESE ARE PARTY FUNDS. IF THE DEPARTMENT IS NOT SATISFIED WITH SUCH EXPLANATION OF THE ASSESSEE, IT COULD HAVE BEEN QUESTIONED IN REGULAR ASSESSMENTS BY ISSU ING NOTICE U/S 148 BUT THESE BANK I.T.(SS)A.NO 91, 95, 99 & 100/DEL/1997 AND 54/DEL/1998 36 ACCOUNTS IN THE FACTS AND CIRCUMSTANCES OF THE PRES ENT CASE CANNOT BE SUBJECT MATTER OF CONSIDERATION AND ADDITION IN BLOCK ASSESSMENT PROC EEDINGS. WE, THEREFORE, DELETE THE ADDITION ON ACCOUNT OF THESE BANK ACCOUNTS ALSO BY HOLDING THAT THE SAME CANNOT BE CONSIDERED OR ADDED IN BLOCK ASSESSMENT. 43. IN THE LIGHT OF THIS DECISION AS PER WHICH WE H AVE HELD THAT NO ADDITION IS JUSTIFIED IN THE PRESENT CASE, EITHER IN RESPECT OF DEPOSITS IN VARIOUS BANK ACCOUNTS WITH PNB NOROJI NAGAR, NEW DELHI OR VARIOUS OTHER ADDITI ONS MADE BY THE A.O., WHICH ARE NOT RELATABLE TO ANY EVIDENCE FOUND IN COURSE OF SE ARCH, WE ARE OF THE CONSIDERED OPINION THAT NO ADJUDICATION IS CALLED FOR REGARDIN G VARIOUS OTHER CONTENTIONS RAISED BY THE LD. A.R. REGARDING NON EXISTENCE OF SEARCH, OR NON VALIDITY OF SEARCH FOR THE REASON THAT THERE IS NO PANCHNAMA OR THAT THERE IS NO NOTI CE ISSUED BY THE A.O. U/S 143(2) AFTER FILING OF BLOCK RETURN ETC. WE DO NOT DECIDE THES E ASPECTS BECAUSE NOW THESE ASPECTS ARE OF ACADEMIC INTEREST ONLY ONCE IT IS HELD BY US THAT NO ADDITION MADE BY THE A.O. IN THE PRESENT CASES IS SUSTAINABLE. WE, THEREFORE, D O NOT DECIDE THESE ASPECTS. 44. IN THE RESULT, ALL THESE FOUR APPEALS FILED BY THESE FOUR INDIVIDUAL ASSESSES ARE ALLOWED IN THE TERMS INDICATED ABOVE. 45. NOW, WE TAKE UP THE REMAINING ONE APPEAL FILED BY THE JMM PARTY AGAINST THE BLOCK ASSESSMENT ORDER PASSED BY THE A.O. U/S 158BC READ U/S 158BD OF THE INCOME TAX ACT, 1961. 46. REGARDING THIS ASSESSEE ALSO, VARIOUS TECHNICAL ARGUMENTS WERE MADE THAT NO SATISFACTION WAS RECORDED BY THE A.O. OF THE SEARCH ED PERSON ETC. BUT WE FEEL THAT WE ARE NOT REQUIRED TO GO INTO THESE ARGUMENTS BECAUSE WE FIND THAT ONCE IT IS HELD IN THE ABOVE FOUR INDIVIDUAL CASES THAT NO INCRIMINATING E VIDENCE WAS FOUND IN COURSE OF SEARCH JUSTIFYING ANY ADDITION U/S 158BC IN THEIR H ANDS, THIS PROTECTIVE ADDITION IN THE CASE OF JMM ALSO GOES BECAUSE WHEN IT IS HELD IN CA SES OF SEARCHED PERSONS THAT NO INCRIMINATING EVIDENCE WAS FOUND IN COURSE OF SEARC H, THERE CANNOT BE AN EVIDENCE FOUND IN COURSE OF SEARCH JUSTIFYING ANY ADDITION I N ANY OTHER CASE BY INVOKING THE PROVISIONS OF SECTION 158BD BECAUSE FOR THAT ALSO, IT HAS TO BE SHOWN THAT SOME INCRIMINATING EVIDENCE WAS FOUND IN SEARCH WHICH IS NOT RELATABLE TO THE SEARCHED I.T.(SS)A.NO 91, 95, 99 & 100/DEL/1997 AND 54/DEL/1998 37 PERSON BUT TO SOME OTHER PERSON. IN THE ABSENCE OF ANY INCRIMINATING MATERIAL HAVING BEEN FOUND IN COURSE OF SEARCH, THERE IS NO BASIS T O MAKE ANY ADDITION IN THE HANDS OF ANY OTHER PERSON ALSO UNDER CHAPTER XIV B. HENCE, T HE ADDITIONS MADE IN THIS CASE ARE ALSO DELETED. 47. IN THE RESULT, ALL FIVE APPEALS ARE ALLOWED IN THE TERMS INDICATED ABOVE. ORDER PRONOUNCED ON THE OPEN COURT ON 2 ND DAY OF SEPTEMBER, 2011. SD/- SD/- (R. P. TOLANI) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER NEW DELHI DATED : 2 ND SEPTEMBER 2011 SP COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, DELHI 6. THE GUARD FILE 1. DATE OF DICTATION. 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER.. OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S. 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. .. I.T.(SS)A.NO 91, 95, 99 & 100/DEL/1997 AND 54/DEL/1998 38