Shri H. Chandrahas, Mangalore V. ACIT, Mangalore

ITSSA 153/BANG/2004

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2040 (ITAT-BANGALORE)
• Duration Of Justice: 15 year(s) 2 month(s) 4 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 04-02-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 04-02-2020
• Assessment Year: misc
• Appeal Filed On: 30-11-2004
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DILIP M
• Keywords: Opportunity of being heard; Block assessment
• Section: 153

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI N. V. VASUDEVAN, VICE PRESIDENT AND SHRI A. K. GARODIA, ACCOUNTANT MEMBER IT (SS) A NO. 153 /BANG/20 0 4 BLOCK PERIOD : 01.04.1990 TO 06.09.2000 SHREE H. CHANDRAHAS, M/S CHANDRAHAS & CO, D. NO. 20 2 3, SOUTH WHARF, BUNDER, MANGALORE. OFFICE NO. PAN /GIR NO. : C 3 VS. ACIT CENTRAL CIRCLE, MANGALORE. APPELLANT RESPONDENT ASSESSEE BY : SHREE SRINIVAS KAMATH, C. A. REVENUE BY : S HREE DILIP M., STANDING COUNSEL DATE OF HEARING : 04 .0 2 .2020 DATE OF PRONOUNCEMENT : 30 . 0 4 .20 20 O R D E R PER A. K. GARODIA, A. M. : THIS APPEAL IS FILED BY THE ASSESSEE AND THE SAME IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A) VI, BANGALORE DATED 15.10.2014. 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED SEVERAL GROUNDS AND SEVERAL ADDITIONAL GROUNDS. AS PER ORIGINAL GROUND NO. 1 AND ADDITIONAL GROUNDS NO. 1 AND 2, THE ASSESSEE HAS SOME TECHNICAL OBJECTIONS WHICH SAY THAT COMPUTATION OF INCOME AS PER THE BLOCK ASSESSMENT ORDER IS NOT AS PER LAW BECAUSE IT IS BASED ON NET ASSET METHOD WHICH IS NOT SUPPORTED BY ANY OF THE PROVISIONS OF THE ACT AND THIS I ALSO AN OBJECTION THAT SINCE THE SEARCH WARRANT IS JOINT NAMES, THE ASSESSMENT SHOULD HAVE BEEN MADE AS AN AOP AND THEREFORE, THE PRESENT ASSESSMENT IN INDIVIDUAL CAPACITY OF THE ASSESSEE IS BAD IN LAW. 3. ON MERIT, AS PER GROUND NO. 2 OF ORIGINAL GROUNDS, THIS IS THE GRIEVANCE OF THE ASSESSEE THAT REGULAR INCOME OFFERED FOR A. Y. 1991 92 AND 1992 93 SHOULD BE DELETED AS RELEVANT EVIDENCES HAD BEEN IT(SS)A NO. 153 /BANG/2004 PAGE 2 OF 5 FURNISHED BEFORE CIT (A). AS PER GROUND NO. 3 OF ORIGINAL GROUNDS, THIS IS THE GRIEVANCE OF THE ASSESSEE THAT ADDITION OF RS. 10,00,720/- ON ACCOUNT OF PAYMENT MADE TO ANUBHAV PLANTATION ID BAD IN LAW BECAUSE OUT OF THIS, ONLY RS. 2 LACS WAS PAID BY THE ASSESSEE AND THE BALANCE AMOUNT WAS PAID BY THE WIFE AND CHILDREN OF THE ASSESSEE. AS PER GROUND NO. 4 OF ORIGINAL GROUNDS, THIS IS THE GRIEVANCE OF THE ASSESSEE THAT ADDITION OF RS. 139,770/- FOR THE BROKEN PERIOD IN REGULAR COURSE FOR A. Y. 2000 2001 SHOULD BE DELETED BECAUSE NO INCOME CAN BE TAXED FOR THE BROKEN PERIOD. AS PER GROUND NO. 5 OF ORIGINAL GROUNDS, THIS IS THE GRIEVANCE OF THE ASSESSEE THAT THE AMOUNT OF RS. 70,000/- SEIZED IN COURSE OF SEARCH SHOULD BE ADJUSTED AGAINST TAX LIABILITY OF THE ASSESSEE EVEN THOUGH IT IS SAID TO BE ALLEGEDLY ADJUSTED IN THE FIRMS HAND (CHANDRAHAS & CO.) AFTER GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE. AS PER GROUND NO. 6 OF ORIGINAL GROUNDS, THIS IS THE GRIEVANCE OF THE ASSESSEE THAT THE INTEREST CHARGED U/S 158 BFA SHOULD BE DELETED. 4. BOTH SIDES WERE HEARD AND THEIR SUBMISSIONS ARE CONSIDERED. WE ALSO CONSIDER VARIOUS WRITTEN SUBMISSIONS FILED BY THE LEARNED AR OF THE ASSESSEE. FIRST, WE DECIDE THE TECHNICAL OBJECTIONS. IN OUR CONSIDERED OPINION, THERE IS NO MERIT IN THESE OBJECTIONS. THIS OBJECTION IS NOT VALID THAT COMPUTATION OF INCOME AS PER THE BLOCK ASSESSMENT ORDER IS NOT AS PER LAW BECAUSE IT IS BASED ON NET ASSET METHOD WHICH IS NOT SUPPORTED BY ANY OF THE PROVISIONS OF THE ACT BECAUSE IF THE INVESTMENT MADE BY THE ASSESSEE IS NOT OUT OF EXPLAINED SOURCES, SUCH INVESTMENT OUT OF UNEXPLAINED SOURCES CAN BE TAXED AS INCOME OF THE ASSESEE. THE SECOND TECHNICAL OBJECTION ALSO HAS NO MERIT THAT SINCE THE SEARCH WARRANT IS JOINT NAMES, THE ASSESSMENT SHOULD HAVE BEEN MADE AS AN AOP AND THEREFORE, THE PRESENT ASSESSMENT IN INDIVIDUAL CAPACITY OF THE ASSESSEE IS BAD IN LAW BECAUSE AS PER SECTION 292CC RECENTLY INSERTED IN THE INCOME TAX ACT, 1961 W.E.F. 01.04.1976. NO ARGUMENT WAS MADE BY THE LEARNED AR IT(SS)A NO. 153 /BANG/2004 PAGE 3 OF 5 OF THE ASSESSEE ON ANY OTHER ASPECT OF VARIOUS TECHNICAL OBJECTIONS AND THEREFORE IT IS INFERRED THAT ANY OTHER ASPECT OF TECHNICAL OBJECTIONS ARE NOT PRESSED. ALL TECHNICAL OBJECTIONS OF THE ASSESSEE ARE REJECTED. 5. NOW WE DECIDE VARIOUS ISSUES RAISED ON MERIT. AS PER GROUND NO. 2 OF ORIGINAL GROUNDS, THIS IS THE GRIEVANCE OF THE ASSESSEE THAT REGULAR INCOME OFFERED FOR A. Y. 1991 92 1ND 1992 93 SHOULD BE DELETED AS RELEVANT EVIDENCES HAD BEEN FURNISHED BEFORE CIT (A). IN THIS REGARD, WE FIND THAT AS PER PARA 2.2.3 OF HIS ORDER, IT IS HELD BY THE LEARNED CIT (A) THAT AS PER THE EVIDENCE FILED BEFORE HIM, THIS CLAIM OF THE ASSESSEE APPEARS TO BE CORRECT BUT BECAUSE THESE EVIDENCES WERE NOT FURNISHED BEFORE THE AO, HE REMITTED THIS MATTER BACK TO THE AO TO RE EXAMINE AND IF ON REEXAMINATION, THE CLAIM OF THE ASSESSEE IS FOUND CORRECT THEN THE AO IS DIRECTED NOT TO TREAT THE INCOME SHOWN IN THE RETURNS FILED FOR THESE TWO YEARS AS UNDISCLOSED INCOME. IN VIEW OF THIS, WE HOLD THAT THERE IS NO INFIRMITY IN THE ORDER OF CIT (A) ON THIS ISSUE BUT IF CONSEQUENTIAL ORDER IS NOT PASSED BY THE AO, THEN THE AO SHOULD DO THE SAME WITHIN SIX MONTHS FROM THE DATE OF THIS ORDER AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THIS GROUND IS DECIDED ACCORDINGLY. 6. AS PER GROUND NO. 3 OF ORIGINAL GROUNDS, THIS IS THE GRIEVANCE OF THE ASSESSEE THAT ADDITION OF RS. 10,00,720/- ON ACCOUNT OF PAYMENT MADE TO ANUBHAV PLANTATION ID BAD IN LAW BECAUSE OUT OF THIS, ONLY RS. 2 LACS WAS PAID BY THE ASSESSEE AND THE BALANCE AMOUNT WAS PAID BY THE WIFE AND CHILDREN OF THE ASSESSEE. IN THIS REGARD, WE FIND THAT IN PARA 2.3.1, IT IS NOTED BY CIT (A) THAT INVESTMENT OF RS. 10,00,720/- IN ANUBHAV PLANTATION SHARES IS IN THE NAME OF THE ASSESSEE, HIS WIFE AND IT(SS)A NO. 153 /BANG/2004 PAGE 4 OF 5 HIS CHILDREN. IN SPITE OF THIS OBSERVATION IN THIS PARA, LEARNED CIT (A) SAYS IN PARA 2.3.4 OF HIS ORDER THAT EXCEPT THIS OBJECTION THAT THIS INVESTMENT IS NOT RECEIVABLE SINCE THAT COMPANY HAS GONE BANKRUPT AND THEREFORE, THIS ADDITION IS NOT JUSTIFIED, NO OTHER OBJECTION IS MADE BY THE ASSESSEE IN THIS REGARD. UNDER THESE FACTS, WE FEEL IT PROPER TO REMIT THIS MATTER TO AO FOR A FRESH DECISION AFTER EXAMINING THIS ASPECT AS TO WHETHER THIS INVESTMENT IS ACTUALLY MADE BY THE ASSESSEE OUT OF HIS UNDISCLOSED INCOME ALTHOUGH PART OF IT IS IN THE NAME OF THE WIFE AND CHILDREN OF THE ASSESSEE. WE ORDER ACCORDINGLY. THE AO IS DIRECTED TO DECIDE THIS ASPECT BY WAY OF A SPEAKING AND REASONED ORDER AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 7. AS PER GROUND NO. 4 OF ORIGINAL GROUNDS, THIS IS THE GRIEVANCE OF THE ASSESSEE THAT ADDITION OF RS. 139,770/- FOR THE BROKEN PERIOD IN REGULAR COURSE FOR A. Y. 2000 2001 SHOULD BE DELETED BECAUSE NO INCOME CAN BE TAXED FOR THE BROKEN PERIOD. NO ARGUMENT IS MADE BY THE LEARNED AR OF THE ASSESSEE IN THIS REGARD AND THEREFORE, THIS IS INFERRED THAT THIS GROUND IS NOT PRESSED AND ACCORDINGLY REJECTED AS NOT PRESSED. 8. AS PER GROUND NO. 5 OF ORIGINAL GROUNDS, THIS IS THE GRIEVANCE OF THE ASSESSEE THAT THE AMOUNT OF RS. 70,000/- SEIZED IN COURSE OF SEARCH SHOULD BE ADJUSTED AGAINST TAX LIABILITY OF THE ASSESSEE EVEN THOUGH IT IS SAID TO BE ALLEGEDLY ADJUSTED IN THE FIRMS HAND (CHANDRAHAS & CO.) AFTER GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE. NO ARGUMENT IS MADE BY THE LEARNED AR OF THE ASSESSEE IN THIS REGARD AND THEREFORE, THIS IS INFERRED THAT THIS GROUND IS NOT PRESSED AND ACCORDINGLY REJECTED AS NOT PRESSED. IT(SS)A NO. 153 /BANG/2004 PAGE 5 OF 5 9. AS PER GROUND NO. 6 OF ORIGINAL GROUNDS, THIS IS THE GRIEVANCE OF THE ASSESSEE THAT THE INTEREST CHARGED U/S 158 BFA SHOULD BE DELETED. THIS ISSUE OF INTEREST IS CONSEQUENTIAL. MOREOVER, NO ARGUMENT IS MADE BY THE LEARNED AR OF THE ASSESSEE IN THIS REGARD AND THEREFORE, THIS IS INFERRED THAT THIS GROUND IS NOT PRESSED AND ACCORDINGLY REJECTED AS NOT PRESSED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. SD/- SD/- (N. V. VASUDEVAN) (A.K. GARODIA) VICE PRESIDENT ACCOUNTANT MEMBER BANGALORE, DATED: 30 TH APRIL, 2020. /NS/* AKG COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.