Sri.R.Romi, Kollam V. ACIT, Kollam

ITSSA 13/COCH/1996

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 9447 (ITAT-COCHIN)
• Duration Of Justice: 16 year(s) 9 month(s) 30 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 23-08-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 05-06-2013
• Assessment Year: misc
• Appeal Filed On: 24-10-1996
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUSAN GEORGE
• Assessee Lawyers: N S RAJAGOPAL
• Keywords: Unexplained expenditure; Invalid notice; Search and seizure; Peak credit; Assessment record; Block assessment
• Section: 143(3)

Judgement Text

IT(SS) A 13/ COCH/ 96 1 IN THE INCOME TAX APELALTER TIBUNAL COCHIN BENCH , COCHIN BEFORE S/SH RI N.R.S. GANESAN, JM & B. R. BASKARAN, AM IT (SS) A NO. 13 /COCH/ 96 ( BLOCK ASSESSMENT 1.4. 19 85 TO 15.9. 19 95 ) SHRI R ROMI DEVI VILASOM MEENAD CHATHANOOR PO KOLLAM - DIST VS THE ASST COMMR O F INCOME TAX INVESTIGATION CIRCLE, KOLLAM ( APPELLANT) (RESPONDENT) PAN NO. R - 12/INV.QLN ASSESSEE BY SHRI N S RAJAGOPAL REVENUE BY SMT SUSA N GEORGE, SR DR DATE OF HEARING 5 TH JUNE 2013 DATE OF PRONOUNCEMENT 23 RD , AUG 2013 OR D ER PER B.R. B ASKARAN, AM: THE ASSESSEE HAS FILED THIS DIRECT APPEAL CHALLENGING THE BLOCK ASSESSMENT ORDER DATED 27 TH SEPT 1996 PASSED BY THE AO U/S 143(3) R.W.S 158BC OF THE ACT AND IT RELATES TO THE BLOCK PERIOD FROM 1.4.1985 TO 15.9.1996. 2. THIS APPEAL WAS ORIGINALLY DISPOSED OF EX - PARTE BY THE C O - ORDINATE BENCH OF THIS TRIBUNAL ON 28 TH AUG 1997. THEREAFTER, THE ASSESSEE FILED A MISCELLANEOUS PETITION SEEKING RECALL OF THE EXPARTE ORDER AND THE SAME AS ALLOWED VIDE THE ORDER DATED 14 TH AUG 1998 PASSED IN M P 59/CO CH/1998. A CCORDINGLY, THE EX - PARTE ORDER WAS RECALLED AND THE APPEAL WAS RESTORED . 2 THE FACTS RELATING TO THE CASE ARE STATED IN BRIEF. THE ASSESSEE HEREIN WA S WORKING AS A BROKER FOR PURCHASE AND SALES OF VEHICLES. HE WAS ALSO ARRANG ING FINANCE FROM FINANCIERS FOR IT(SS) A 13/ COCH/ 96 2 PURCHASE OF VEHICLES. THUS, THE ASSESSEE WAS EARNING COMMISSION INCOME FROM THE ABOVE STATED ACTIVITIES. THE DEPARTMENT CARRIED OUT SEARCH AND SEIZURE OPERATIONS IN THE HANDS OF TWO PERSONS, VIZ., SHRI BABU RAJENDRA PRASAD A N D SHRI SA SIDHARAN , WHO WERE ENGAGED IN MONEY LENDING ACTIVITIES . CONSEQUENTLY, THE ASSESSEE WAS ALSO SUBJECTED TO SEARCH ON 15 TH SEPT 1995. DURING THE COURSE OF SEARCH, CERTAIN PASS BOOKS AND NOTE BOOKS WERE UNEARTHED BY THE SEARCH TEAM . CONSEQUENT LY, THE ASSESSM ENT PROCEEDING U/S 158BC OF THE ACT WAS INITIATED IN THE HANDS OF THE ASSESSEE. THE AO COMPLETED THE ASSESSMENT BY DETERMINING THE UNDISCLOSED INCOME AT RS. 9,55, 380/ - AS DETAILED BELOW : SL.,NO PARTICULARS AMOUNT 1 BANK DEPOSIT IN A/C NO.3216 - PEAK CREDI T AS PER PARA 3 1,52,525.00 2 CHIT CONTRIBUTIONS AS DISCUSSED IN APRA 4 1,39,428.50 3 LIC PAYMENTS AS P ER P ARA 5 58,426.00 4 MARRIAGE EXPENSES OF SISTER ASSESSEES SHARE AS PER PARA 6 50,000.00 5 REMODEL L ING OF HOUSE ASSESSEES SHARE AS PER PARA 7 45 ,000.00 6 DONATION TO TEMPLE PARA 8 10,000.00 7 HOUSEHOLD EXPENSE FOR THE BLOCK PERIOD AS PER PARA 9 5,00,000.00 TOTAL 9,55,379. 5 0 AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE HAS FILED THIS APPEAL BEFORE US. 3. THE ASSESSEE HAS RAISED FOL LOWING TWO ADDITIONAL GROUNDS BEFORE US: - (A) THE BLOCK ASSESSMENT ORDER IS BAD IN LAW AS IT HAS BEEN FRAMED ON THE BASIS OF AN INVALID NOTICE U/S 158BC R.W.S. 158BD. (B) THE BLOCK ASSESSMENT ORDER IS BAD IN LAW AS IT HAS BEEN COMPLETED WITHOUT ISSUE O F A NOTICE U/S 143(2) OF THE INCOME TAX ACT. 4. WITH REGARD TO THE FIRST LEGAL ISSUE, THE LD COUNSEL SUBMITTED THAT THE ASSESSING OFFICER INITIATED THE PROCEEDINGS U/S 158BD OF THE ACT, BY ISSUING NOTICE U/S 158BC R.W.S. 158BD OF THE ACT. SINCE THE ASSES SEE HIMSELF WAS SUBJECTED TO SEARCH, THE AO SHOULD HAVE INITIATED THE IT(SS) A 13/ COCH/ 96 3 PROCEEDINGS U/S 158BC OF THE ACT. WE DO NOT FIND MERIT IN THE SAID CONTENTION IN VIEW OF THE DECISION RENDERED BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF LEKSHMI TRADERS(20 12)(344 ITR 281) . FOR THE SAKE OF CONVENIENCE, WE EXTRACT BELOW THE RELEVANT OBSERVATIONS MADE BY THE HONBLE JURISDICTIONAL HIGH COURT IN THIS REGARD: - BUT THE ONLY QUESTION RAISED IS WHETHER THE NOTICE ISSUED BY THE DEPARTMENT BASED ON WHICH THE BLOC K ASSESSMENT WAS COMPLETED IS VALID OR NOT. WHAT WE FIND FROM SEC. 158BD IS THAT NO INDEPENDENT NOTICE IS CONTEMPLATED UNDER THE SAID SECTION BECAUSE IT ONLY GIVES JURISDICTION TO THE ASSESSING OFFICER TO ASSESS A PERSON OTHER THAN THE SEARCHED PERSON B ASED ON MATERIALS GATHERED DURING SEARCH. WHAT IS STATED IN SEC. 158BD IS THAT WHEN ANY EVIDENCE IS COLLECTED ABOUT INCOME EARNED BY A PERSON OTHER THAN THE PERSON SEARCHED U/S. 132, THE OFFICER WHO CONDUCTED THE SEARCH SHALL HAND OVER THOSE MATERIALS AND EVIDENCE TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON TO BE PROCEEDED FOR ASSESSMENT, AND ONCE THE MATERIALS ARE HANDED OVER, THE ASSESSING OFFICER HAVING JURISDICTION OVER THE PERSON TO BE ASSESSED SHOULD ISSUE NOTICE AND MAKE ASS ESSMENT U/S. 158BC. IN OTHER WORDS, THE PROCEDURE FOR ASSESSMENT OF A PERSON OTHER THAN THE SEARCHED PERSON UNDER SEC. 158BD IS THE SAME PROCEDURE CONTAINED IN SEC. 158BC. SINCE NO NOTICE IS PRESCRIBED U/S. 158BD, WHAT IS REQUIRED IS TO ISSUE AN INTIMAT ION ABOUT THE INITIATION OF PROCEEDINGS U/S. 158BD BY THE OFFICER, AND THEN TO CALL FOR RETURN IN FORM 2B PRESCRIBED UNDER RULE 12(1)(A) FOR ASSESSMENT U/S. 158BC OF THE ACT. IN OTHER WORDS, WHEN THE ASSESSEE ADMITS RECEIPT OF NOTICE AND FILES ITS PROPE R RETURN IN THE PRESCRIBED FORM IN TERMS OF THE NOTICE, WE DO NOT THINK THAT THE ASSESSEE IS ENTITLED TO CONTEND THAT THE NOTICE IS NOT SERVED IN ACCORDANCE WITH THE PROCEDURE PRESCRIBED UNDER THE ABOVE SECTIONS. IN OUR VIEW, PROOF OF THE DETAILED PROC EDURE ADOPTED FOR SERVICE OF NOTICE UNDER SUB - SEC. (2) OF SEC. 282 IS REQUIRED TO BE ENQUIRED INTO ONLY WHEN THE ASSESSEE COMPLAINS NON - RECEIPT OF NOTICE. IN OTHER WORDS, WHEN NOTICE ISSUED IS ACCEPTED BY THE ASSESSEE AND RETURN IS FILED IN TERMS OF THE NOTICE, THE ASSESSEE CANNOT CONTEND THAT THERE IS NO SERVICE OF NOTICE IN TERMS OF THE SECTION. BESIDES THE ABOVE, WHAT WE FIND IS THAT ANNEXURE D NOTICE IS A NOTICE PRESCRIBED UNDER RULE 12(1)(A) OF THE RULES AND IN THE SAID NOTICE WHAT IS CALLED FOR IS RETURN IN THE PRESCRIBED FORMAT, I.E., IN FORM 2B, WHICH IS FOR MAKING BLOCK ASSESSMENT U/S. 158BC. SO MUCH SO, EVEN THOUGH THE ASSESSING OFFICER HAS CORRECTED SEC. 158BC TO SEC. 158BD, THE CONTENTS OF THE NOTICE SATISFY THE REQUIREMENT OF A NOTICE UNDER SEC. 158BC AS WELL. ACCORDINGLY, WE DISMISS THIS LEGAL GROUND RAISED BY THE ASSESSEE. IT(SS) A 13/ COCH/ 96 4 5. WITH REGARD TO THE SECOND LEGAL ISSUE, VIZ., NON - ISSUANCE OF NOTICE U/S 143(2) OF THE ACT, WE NOTICE THAT THE ASSESSEE HAS RAISED THIS LEGAL ISSUE SI MPLY FOR THE REASON THAT THE NOTICE U/S 143(2) WAS NOT AVAILABLE IN HIS RECORD. THE ASSESSEE WAS SUBJECTED TO SEARCH IN 1995 AND WE ARE HEARING THE APPEAL AFRESH IN 2013. THUS, ALMOST 18 YEARS HAVE ELAPSED SINCE THE DATE OF SE ARCH AND HENCE THE POSSIBILI TY OF MISPLACING THE 143(2) NOTICE CANNOT BE RULED OUT. THE ASSESSEE DID NOT URGE THIS LEGAL ISSUE AT THE TIME OF FILING APPEAL BEFORE THE TRIBUNAL , BUT URGED FOR THE FIRST TIME BEFORE US AFTER A LAPSE OF CONSIDERABLE YEARS . WE ALSO NOTICE THAT THE ASSES SEE HAS NOT TAKEN ANY STEP TO INSPECT THE ASSESSMENT RECORD IN ORDER TO ASCERTAIN WHETHER THE AO HAS ISSUED THE NOTICE U/S 143(2) OF THE ACT BEFORE COMPLETING THE BLOCK ASSESSMENT. IT IS WELL SETTLED PROPOSITION OF LAW THAT IT IS THE RESPONSIBILITY OF THE PERSON MAKING ALLEGATIONS TO PROVE THE SAME WITH CREDIBLE EVIDENCE. IN THE INSTANT CASE, THE ASSESSEE HAS FAILED TO PROVE THE ALLEGATION WITH ANY MATERIAL. UNDER THESE CIRCUMSTANCES, WE DO NOT FIND ANY JUSTIFICATION IN ADMITTING THIS LEGAL GROUND AT THI S STAGE AND ACCORDINGLY DISMISS THE SAME IN LIMINE. 6 WE SHALL NOW TURN TO MERITS OF ADDITIONS. THE FIRST ISUSE RELATES TO THE ASSESSMENT OF PEAK AMOUNT OF RS.1,52,525/ - FOUND IN THE BANK ACCOUNT OF THE ASSESSEE MAINTAINED IN QUILON DISTRICT COOPERATIVE BANK. THE AO NOTICED THAT THE BANK ACCOUNT, CITED ABOVE CONTAINED DEPOSITS OF VARIOUS AMOUNT S ON VARIOUS DATES. BEFORE THE AO, THE ASSESSEE COULD NOT GIVE SATISFACTORY EXPLANATION WITH REGARD TO THE SOURCE OF THOSE DEPOSITS. HENCE, THE AO WORKED OUT THE PEAK AMOUNT OF BANK BALANCE, WHICH WORKED OUT TO RS.1,52,525/ - AND ASSESSED THE SAME AS UNDISCLOSED INCOME OF THE ASSESSEE. 6.1 BEFORE US, THE LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE DEPOSITS IN THE ABOVE SAID BANK ACCOUNT WAS NOT MADE BY THE ASS ESSEE; BUT BY ANOTHER PERSON NAMELY SHRI BABU RAJENDRA IT(SS) A 13/ COCH/ 96 5 PRASAD. HE FURTHER SUBMITTED THAT SHRI BABU RAJENDRA PRASAD APPEARED BEFORE THE AO AND HAS ALSO ACCEPTED THE SAID PLEA OF THE ASSESSEE. ACCORDINGLY, THE LD AR SUBMITTED THAT THE AO WAS NOT JUSTIFIED IN ASSESSING THE PEAK CREDIT AMOUNT OF RS. 1,52,525/ IN THE HANDS OF THE ASSESSEE. HOWEVER, THE LD D.R SUBMITTED THAT THE AO WAS JUSTIFIED IN ASSESSING THE PEAK CREDIT BALANCE OF THE BANK ACCOUNT, SINCE IT STANDS IN THE NAME OF THE ASSESSEE. 6.2 WE HAV E HEARD THE PARTIES ON THIS ISSUE AND PERUSED THE RECORD. THOUGH IT IS CLAIMED THAT THE DEPOSITS IN THE ABOVE SAID BANK ACCOUNT WERE MADE BY SHRI BABU RAJENDRA PRASAD, WE NOTICE THAT THE ASSESSEE HAS NOT BROUGHT ANY MATERIAL ON RECORD TO SHOW THAT THESE D EPOSITS WERE SATISFACTORILY EXPLAINED BY SHRI BABU RAJENDRA PRASAD OR THE SAME WERE ASSESSED IN HIS HANDS. IN THE ABSENCE OF ANY EVIDENCE TO EXPLAIN THE SOURCES OF THE DEPOSITS MADE IN THE BANK ACCOUNT, IN OUR VIEW, THE ASSESSING OFFICER WAS JUSTIFIED IN ASSESSING THE PEAK CREDIT AMOUNT OF RS.1,52,525/ - AS UNDISCLOSED INCOME IN THE HANDS OF THE ASSESSEE. 7. THE NEXT ISSUE RELATES TO THE ASSESSMENT OF CHIT CONTRIBUTION AMOUNT OF RS.1,39,428/ - AS UNDISCLOSED INCOME OF THE ASSESSEE. THE ASSESSEE CLAI MED BEFORE THE AO THAT THE CHIT CONTRIBUTIONS WERE MADE JOINTLY BY ALL BROTHERS OF THE FAMILY. BUT THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS WON THE BID AFTER THE DATE OF SEARCH. ACCORDINGLY, HE TREATED THE CHIT CONTRIBUTION AMOUNT OF RS.1,39, 428/ - AS UNDISCLOSED INCOME OF THE ASSESSEE. 7.1 BEFORE US, THE LD A.R REITERATED THE CONTENTIONS MADE BEFORE THE AO. HOWEVER, WE NOTICE THAT THE ASSESSEE HAS FAILED TO SUBSTANTIATE HIS CLAIM, VIZ., HIS BROTHERS ALSO CONTRIBUTED AMOUNTS, WITH ANY CRED IBLE EVIDENCE. THERE SHOULD NOT BE ANY DOUBT THAT MERE ORAL SUBMISSIONS WILL NOT COME TO THE HELP OF THE ASSESSEE. HENCE, WE DO NOT FIND ANY INFIRMITY IN MAKING ADDITION OF RS.1,39,428/ - , REFERRED ABOVE. IT(SS) A 13/ COCH/ 96 6 8. THE NEXT ISSUE RELATES TO THE ASSESSMENT OF LIC CONTRIBUTION OF RS.58,426/ - . BEFORE THE AO THE ASSESSEE FAILED TO EXPLAIN THE SOURCES FOR MAKING THE PAYMENT OF LIC PREMIUM, REFERRED ABOVE. BEFORE US ALSO, NO EXPLANATION WAS OFFERED. UNDER THESE CIRCUMSTANCES, IN OUR VIEW, THE AO WAS JUSTIFIED IN ASSESSING THE AMOUNT OF RS.58,426/ - REFERRED ABOVE AS UNDISCLOSED INCOME OF THE ASSESSEE. 9. THE NEXT ADDITION RELATES TO THE ASSESSMENT OF ASSESSEES SHARE OF EXPENSES OF RS.50,000/ - IN CONDUCTING MARRIAGE OF ASSESSEES SISTER. ON NOTICING THA T THE MARRIAGE OF THE ASSESSEES SISTER WAS CONDUCTED IN JANUARY, 1995, THE AO CALLED FOR MARRIAGE EXPENSES DETAILS. THE AO ACCEPTED THE CONTENTION OF THE ASSESSEE THAT ALL THE BROTHERS JOINTLY INCURRED THE MARRIAGE EXPENSES. AFTER CONSIDERING EXPLANATIO NS FOR THE SOURCES, THE AO ESTIMATED THE ASSESSEES SHARE IN THE MARRIAGE EXPENSES AS RS.50,000/ - AND ASSESSED THE SAME AS UNDISCLOSED INCOME. 9.1 BEFORE US, THE ASSESSEE FAILED TO FURNISH ANY MATERIAL TO REBUT THE FINDINGS GIVEN BY THE ASSESSING OFFI CER. HENCE, WE DO NOT FIND ANY REASON TO INTERFERE WITH HIS ORDER ON THIS ISSUE. 10. THE NEXT ADDITION RELATES TO THE ASSESSMENT OF RS.45,000/ - AS ASSESSEES SHARE IN REMODELING OF HOUSE. DURING THE COURSE OF SEARCH, THE SEARCH TEAM UNEARTHED A NOTE BOOK NUMBERED AS S - XIII, WHERE FROM IT WAS FOUND THAT THE ASSESSEE HAD INCURRED A SUM OF RS.45,000/ - ON REMODELING OF HOUSE. THE TOTAL EXPENSES INCURRED WAS ADMITTED AS RS.74,000/ - . THE ASSESSEES MOTHER CONFESSED THAT THE ASSESSEE IS FULLY AWARE OF THE EXPENSES INCURRED ON REMODELING OF HOUSE. THE ASSESSEE SUBMITTED THAT THE EXPENSES WERE MET BY ALL THE BROTHERS IT(SS) A 13/ COCH/ 96 7 (7 IN NUMBER). BUT, IT WAS NOTICED THAT ONLY TWO BROTHERS WERE RESIDING TOGETHER. HENCE, THE AO TOOK THE VIEW THAT THE ASSESSEE SHOULD HAVE CONTRIBUTED RS.45,000/ - AND ACCORDINGLY ASSESSED THE SAME AS UNDISCLOSED INCOME OF THE ASSESSEE. 10.1 BEFORE US, THE ASSESSEE FAILED TO FURNISH ANY MATERIAL TO SUPPORT HIS CONTENTIONS OR TO REBUT THE FINDINGS GIVEN BY THE ASSESSING OFFICER. HENCE, WE D O NOT FIND ANY REASON TO INTERFERE WITH HIS ORDER ON THIS ISSUE. 11. THE NEXT ADDITION RELATES TO THE ASSESSMENT OF RS.10,000/ - , BEING THE DONATION GIVEN TO A KALYANA MANDAPAM. DURING THE COURSE OF SEARCH, A RECEIPT SHOWING CONTRIBUTION MADE BY THE A SSESSEE WAS UNEARTHED. THE ASSESSEE SUBMITTED THAT HE WAS THE PRESIDENT OF A DEVI TEMPLE AND HENCE HE HIMSELF PREPARED RECEIPT, BUT DID NOT MAKE THE PAYMENT THEREOF. SINCE THE CASH RECEIPT WAS AVAILABLE, THE AO DID NOT BELIEVE THE EXPLANATIONS GIVEN BY T HE ASSESSEE AND ACCORDINGLY ASSESSED THE AMOUNT OF RS.10,000/ - AS UNDISCLOSED INCOME OF THE ASSESSEE. 12. BEFORE US, THE ASSESSEE FAILED TO BRING ANY MATERIAL ON RECORD TO SUBSTANTIATE HIS CONTENTIONS THAT HE DID NOT MAKE PAYMENT OF RS.10,000/ - AS FOUND IN THE CASH RECEIPT. IT IS SETTLED PROPOSITION THAT IT IS THE RESPONSIBILITY OF THE PERSON TO PROVE THAT THE APPARENT IS NOT REAL, IF HE CLAIMS SO. SINCE THE ASSESSEE HAS FAILED TO PROVE THAT THE APPARENT WAS NOT REAL, WE DO NOT FIND ANY REASON TO INTER FERE WITH THE DECISION OF AO ON THIS ISSUE. 13. THE LAST ADDITION RELATES TO THE ASSESSMENT OF RS.5,00,000/ - , BEING ESTIMATED HOUSE HOLD EXPENSES AS THE UNDISCLOSED INCOME OF THE ASSESSEE. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT THE ASSESSIN G OFFICER HAS ASSESSED THE HOUSE HOLD EXPENSES ON ESTIMATED BASIS, I.E., IT(SS) A 13/ COCH/ 96 8 THE SAID ASSESSMENT IS NOT BASED UPON ANY SEIZED RECORD. UNDER SEC. 158B B(1) OF THE ACT , BLOCK ASSESSMENT SHOULD BE MADE ON THE BASIS OF EVIDENCE FOUND AS A RESULT OF SEARCH OR REQU ISITION OF BOOKS OF ACCOUNT OR OTHER DOCUMENTS AND SUCH OTHER MATERIALS OR INFORMATION AS ARE AVAILABLE WITH THE ASSESSING OFFICER AND RELATABLE TO SUCH EVIDENCE. 13 .1 UNDISPUTEDLY, THE ASSESSING OFFICER DID NOT RELY ON ANY SEIZED MATERIAL FOR MAKING THE IMPUGNED ADDITION. THE HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF CIT V JETHMAL BOOB (215 CTR (RAJ) 36) HAS HELD THAT IN A BLOCK ASSESSMENT PROCEEDING, NO ADDITION CAN BE MADE TOWARDS LOW DOMESTIC EXPENSES MERELY ON ESTIMATED BASIS. T HE OBSERVATIONS MADE BY HON'BLE COURT IS EXTRACTED BELOW: - THE LAST QUESTION WAS PERTAINING TO DECISION OF THE TRIBUNAL THAT UNDER CHAPTER XIV - B OF THE IT ACT, ESTIMATED ADDITION ON ACCOUNT OF UNRECORDED HOUSEHOLD EXPENSES IS NOT PERMISSIBLE. WE ARE OF THE OPINION TH AT WHILE COMPLETING THE ASSESSMENT UNDER CHAPTER XIV - B, ADDITIONS CAN BE MADE ONLY ON THE BASIS OF INCRIMINATING DOCUMENT/MATERIAL COLLECTED, SEIZED DURING THE COURSE OF SEARCH. THE VARIOUS BENCHES OF THE TRIBUNAL ARE FOLLOWING THIS PRINCIPLE. THIS BEING A SETTLED PRINCIPLE OF LAW, NO REFERENCE IS RECOMMENDED ON THIS ACCOUNT ALSO. THUS, THE MATTER WAS NOT REFERABLE. TAKING NOTE OF ALL THE FACTS, THE TRIBUNAL PASSED THE ORDER, THEREFORE AGAIN, IT BEING A SETTLED LAW, IT WAS NOT FOUND TO BE ISSUE FOR REFE RENCE TO THE SCOPE. IN VIEW OF THE SPECIFIC PROVISION THAT THE UNDISCLOSED INCOME SHOULD BE DETERMINED ON THE BASIS OF ANY EVIDENCE FOUND DURING THE COURSE OF SEARCH , WE ARE OF THE VIEW THAT THE AO WAS NOT RIGHT IN LAW IN ESTIMATING THE DOMESTIC EXPENSE S, THAT TOO WITHOUT REFERRING TO ANY OF THE SEIZED MATERIAL . ACCORDINGLY, WE DIRECT THE AO TO DELETE THE ADDITION OF RS.5.00 LAKHS REFERRED ABOVE. 14. THE LD COUNSEL SUBMITTED THAT THE BALANCE AVAILABLE IN THE S.B ACCOUNT MAINTAINED WITH THE QUILON D IST. CO - OP BANK AS ON THE DATE OF SEARCH WAS ONLY RS.2,553/ - ., WHEREAS THE AO HAS TREATED THE PEAK CREDIT AMOUNT OF RS.1,52,525/ - AS THE UNDISCLOSED INCOME OF THE ASSESSEE. SINCE THE ASSESSEE HAS WITHDRAWN THE AMOUNT TO THE TUNE OF RS.1,49,972/ - (RS.1,52, 525 LESS IT(SS) A 13/ COCH/ 96 9 RS.2,553/ - ), THE SAME SHOULD BE GIVEN SET OFF AGAINST THE UNEXPLAINED EXPENSES/INVESTMENTS, WHICH HAVE BEEN TAKEN AS THE UNDISCLOSED INCOME OF THE ASSESSEE. WE FIND FORCE IN THE SAID CONTENTIONS. THERE SHOULD NOT BE ANY DISPUTE THAT IT IS NOT PE RMISSIBLE TO ASSESS BOTH UNEXPLAINED INCOME AS WELL AS UNEXPLAINED EXPENDITURE WITHOUT GIVING SET OFF OF INCOME AGAINS T THE EXPENDITURE IF THE EXPENDITURE IS INCURRED AFTER GENERATION OF INCOME, LEST IT SHOULD RESULT IN DOUBLE ADDITION. ACCORDINGLY, WE DI RECT THE AO TO ALLOW SET OFF OF RS.1,49,972/ - AGAINST THE INVESTMENTS/EXPENSES ASSESSED AS UNDISCLOSED INCOME IN THE HANDS OF THE ASSESSEE. 15. THE LD A.R ALSO CONTENDED THAT THE ASSESSEE SHOULD BE GIVEN BENEFIT OF INCOME BELOW TAXABLE LIMIT. THE LD A .R ALSO PLACED RELIANCE ON THE DECISION RENDE RED IN THE CASE OF CIT VS. THOMAS M.M. (KER) (265 ITR 327). HOWEVER, WE DO NOT FIND MERIT IN THE SAID CONTENTIONS IN VIEW OF CLAUSE (CA) OF SUB. SEC. (1) OF SEC. 158BB, WHICH READS AS UNDER: - WHERE THE DUE DAT E FOR FILING A RETURN OF INCOME HAS EXPIRED, BUT NO RETURN OF INCOME HAS BEEN FILED, AS NIL, IN CASES NOT FALLING UNDER CLAUSE (C) CLAUSE (C) COVERS THOSE CASES WHERE NO RETURN OF INCOME HAS FILED, BUT BOOKS OF ACCOUNT AND OTHER DOCUMENTS ARE MAINTAINED I N THE NORMAL COURSE OF BUSINESS ON OR BEFORE THE DATE OF SEARCH. IN THE INSTANT CASE, THERE IS NO DISPUTE THAT THE ASSESSEE DID NOT MAINTAIN ANY BOOKS OF ACCOUNT AND HENCE HE SHALL BE COVERED BY CLAUSE (CA), EXTRACTED ABOVE, IN WHICH CASE, HE IS NOT ENTIT LED FOR DEDUCTION OF AMOUNT PRESCRIBED AS NON - TAXABLE LIMIT IN EACH OF THE YEAR FALLING IN THE BLOCK PERIOD. THE DECISION IN THE CASE OF THOMAS M.M., REFERRED SUPRA, HAS BEEN RENDERED IN THE CONTEXT OF CLAUSE (C) OF SEC. 158BB(1) AND HENCE THE SAME IS NOT APPLICABLE TO THE INSTANT ISSUE. IT(SS) A 13/ COCH/ 96 10 16. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 23 RD , DAY OF AUG 2013. SD/ - SD/ - (N.R.S. GANESAN) ( B.R. BASKARAN ) JUDICIAL MEMBER ACCOUNTANT MEMBER COCHI N: DATED 23 RD , AUG 2013 RAJ* COPY TO: 1. APPELLANT - SHRI R ROMI - DEVI VILASOM MEENAD - CHATHANOOR PO - KOLLAM - DIST 2 RESPONDENT THE A S ST COMMR OF INCOME TAX, INVESTIGA TION CIRCLE, KOLLAM 3 CIT(A) 4 CIT , KOLLAM 5 DR 6 GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT, COCHIN