M/s. Transatlantic Packaging Pvt. Ltd., V. The ACIT., Circle-3, Baroda

ITSSA 194/AHD/2014

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 8884 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 20-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 17-09-2019
• Assessment Year: misc
• Appeal Filed On: 05-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P SHARMA
• Keywords: Unexplained investment; Income from undisclosed sources; Opportunity of being heard; Deemed to accrue or arise in india; Capital receipt; Capital expenditure; Set aside
• Section: 69C; 69B; 68; 69; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI O. P. MEENA, ACCOUNTANT MEMBER& MS. MADHUMITA ROY, JUDICIAL MEMBER IT(SS)A NO.194/AHD/2014 (BLOCK PERIOD :01.04.1995 TO 22.01.2002) M/S. TRANSATLANTIC PACKAGING PVT. LTD., SURVEY NO.263 VILLAGE LUNEJ, GOLANA ROAD, KHAMBAT 388 620 VS. ACIT, CIRCLE 3, BARODA [ PAN NO. AABCT 0147 R ] ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI S.N. SOPARKAR , SR. ADVOCATE WITH SHRI PARIN SHAH RESPONDENTBY: SHRI O. P. SHARMA, CIT-D.R. DATE OF HEARING 17.09.2019 DATE OF PRONOUNCEMENT 20 .0 9 . 2019 O R D E R PER MS. MADHUMITA ROY - JM: THE INSTANT APPEAL FILED BY THE ASSESSEE IS DIRECT ED AGAINST THEORDER DATED 18.02.2014PASSED BY THE COMMISSIONER OF INCOM E TAX (APPEALS) IV, BARODA UNDER SECTION 158BC R.W.S. 254 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED AS TO THE ACT)ARISING OUT O F THE ORDER DATED 12.12.2007 PASSED BY THE ASST.COMMISSIONER OF INCOME TAX, CIRC LE 3, BARODAFOR BLOCK PERIOD 01.04.1994 TO 22.01.2002 WITH THE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED ASSESSING OFFICER AS WELL AS THE LEARNED CIT(A) HAVE GROSSLY ERRED IN NOT FOLLOWING THE CLEAR DIRECTIONS OF THE HON'BLE ITAT, WHILE SET TING ASIDE CERTAIN ISSUES BACK TO THE ASSESSING OFFICER FOR RECONSIDERATION, VIDE ITS ORDER DATED 13 TH OCTOBER, 2006 IN 1T(SS)A NO. 127/AHD/2005. IT(SS)A NO.194/AHD/2014 M/S. TRANSATLANTIC PACKAGING PVT. LTD. VS. ACIT BLOCK PERIOD 01.04.1995 TO 22.01.2002 - 2 - 2. ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE, T HE LEARNED CIT(A) ERRED IN UPHOLDING THE ADDITION OF RS.84 LACS MADE BY THE AS SESSING OFFICER ON THE ALLEGED GROUND THAT THE AFORESAID AMOUNT REPRESENTS UNACCOUNTED INVESTMENT MADE BY THE APPELLANT-COMPANY IN CONSTRUCTION OF FA CTORY BUILDING. 3. ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE, T HE LEARNED CIT(A) ERRED IN UPHOLDING THE ADDITION OF RS.7,59,000 MADE BY THE A SSESSING OFFICER ON THE ALLEGED GROUND OF UNACCOUNTED PAYMENT MADE BY THE A PPELLANT-COMPANY. 2. THE APPELLANT COMPANY IS ENGAGED IN THE MANUFACT URE OF PLASTIC CONTAINERS OF INTERNATIONAL STANDARD HAVING FACILIT Y OF TOTALLY AUTOMATIC IMPORTED PLANT. THE BRIEF FACTS LEADING TO THIS CASE IS THIS THAT A SEARCH ACTION U/S 132 OF THE ACT WAS CARRIED OUT ON 22.01.2002 IN THE GROUP CASE OF THE ASSESSEE COMPANY AT THE FACTORY PREMISES OF THE COMPANY AS W ELL AS THE RESIDENTIAL PREMISES OF THE RESIDENT DIRECTORS WHERE CERTAIN PA PERS WERE FOUND AND SEIZED IN WHICH THE PIECE OF PAPER INVENTORIED AT PAGE NO. 27 OF ANNEXURE A-1 MENTIONS A SUM OF RS.84 LACS BEING CASH PAYMENT WHI CH WAS IN QUESTION BEFORE THE AUTHORITIES BELOW AND BEFORE US AS WELL. CONSEQUENTLY, NOTICE U/S 158BC WAS ISSUED TO THE ASSESSEE AND FINALLY THE AS SESSMENT FOR THE BLOCK PERIOD WAS ASSESSED ON 27.02.2004 DETERMINING TOTAL UNDISCLOSED INCOME AT RS. 9,83,47,750/-U/S 69C OF THE ACTAND ADDED TO THE TOT AL INCOME OF THE ASSESSEEWHICH WAS IN APPEAL CONFIRMED BY THE LEARNE D CIT A AGAINST WHICH APPEAL WAS PREFERRED BEFORE THE HONBLE ITAT. WHILE DECIDING THE APPEAL PREFERRED BY THE ASSESSEETHE HONBLE ITAT IN IT(SS) A NO.127/AHD/2005 FOR BLOCK PERIOD 01.04.1995 TO 22.01.2002 BY AND UNDER ITS ORDER DATED 13.10.2006 RESTORED THE MATTER TO THE FILE OF THE L EARNED AO WITH THE DIRECTION UPON HIM TO DECIDE THE ISSUE AFRESH IN TERMS OF THE OBSERVATION MADE BY THE HONBLE TRIBUNAL AFTER GIVING THE PROPER OPPORTUNIT Y OF HEARING TO THE ASSESSEE IT(SS)A NO.194/AHD/2014 M/S. TRANSATLANTIC PACKAGING PVT. LTD. VS. ACIT BLOCK PERIOD 01.04.1995 TO 22.01.2002 - 3 - THE RELEVANT OBSERVATION MADE BY THE LEARNED ITAT A PPEARING AT PAGE 50 OF THE PAPER BOOK FILED BEFORE US BY THE ASSESSEE IS R EPRODUCED HEREINBELOW: 9. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS M ADE FROM BOTH THE SIDES ALONGWITH THE FINDING GIVEN BY THE TAX AUTHOR ITIES AS WELL AS THE MATERIAL ON RECORD. THIS IS AN ADMITTED FACT THAT D URING THE COURSE OF THE SEARCH PAGE NO. 27 OF ANNEXURE-A-1 DATED 22.01.200 8 WAS SEIZED FROM THE FACTORYPREMISES OF THE ASSESSEE. THIS PAPER SHOWS C ERTAIN FIGURES ALLEGED TO BE THE PAYMENT MADE TO M/S. BUILT QUICK CONSTRUCTIO N CO, THE TOTAL AMOUNT WERE SHOWN AT RS.52668030/- AS PER DETAILS AS REPRO DUCED IN THE BRIEF FACTS. THE RESIDENT DIRECTORS ADMITTED IN THE STATEMENT RE CORDED U/S 132 (4) THAT A SUM OF RS. 84 LACS WAS PAID IN CASH, THE NON-RESIDE NT DIRECTOR OF THE COMPANY DISPUTED THE STATEMENT MADE BY THE RESIDENT DIRECTO RS AND CONTENDED THAT THE RESIDENT DIRECTORS WERE NOT AUTHORIZED TO MAKE THE DISCLOSURE OF THE UNACCOUNTED INCOME ON BEHALF OF THE COMPANY. WE HAV E GONE THROUGH ANSWER TO QUESTION NO. 27 WHICH READ AS UNDER:- 'Q.NO.27. BASED ON THE ABOVE AND VARIOUS SEIZED MAT ERIALS, DO YOU WISH TO ADMIT ANY UNDISCLOSURE INCOME OF YOURS/ YOUR GOODSELF? ANS. PLEASE GIVE ME SOME TIME TO THINK AND TIME TO CONSULT MY BROTHERS/SHRI DILIP R. AMIN AND IF ANY I WILL DO TH E NEEDFUL IN THIS CASE, (STATEMENT RESUMED AFTER BREAK) HOWEVER, I HA VE ALSO CONSULTED MY ACCOUNTANT SHN PRAKASH J PATEL AND AFTER CAREFUL CONSIDERING THE FACT OF THE CASE, SEIZED MATERIAL AND CASH (UNACCOU NTED) TRANSACTIONS OF RS. 84 LAC, I AS A DIRECTOR OF THE CO., M/S. TRA NSATLANTIC PACKAGING P. LTD. FOR AND ON BEHALF OF THE BOARD OF DIRECTOR AND THE CO. DULY AUTHORIZED AS PRINCIPAL OFFICER OF THE CO. ADMIT UN DISCLOSED INCOME OF M/S. TRANSATLANTIC PACKAGING P. LTD. TO THE TUNE OF RS.84 LACS AS UNACCOUNTED CASH INVESTMENT OF RS.84 LACS ASUNACCOU NTED CASH INVESTMENT OF RS.84 LACS. THIS INVESTMENT HAS NO OT HER LIABILITIES/EXPENSES AS CLAIMED BY THE CO/WE THE BO ARD OF DIRECTOR. I AM DULY AUTHORIZED SIGNATORY OF FOR AND ON BEHALF O F THEBOARD OF DIRECTOR OF M/S.TRANSATLANTIC PACKAGING PVT. LTD. A DMIT 'NET UNDISCLOSED INCOME OF RS.84 LACS FOR THE BLOCK PERI OD ALSO PROMISE TO PAY DUE TAXES AS PER PROVISIONS OF I.T. ACT AT THE EARLIEST.' THE A.O. OBSERVED THAT THIS STATEMENT WAS MADE BY S HRI. ROHITBHAI AMIN IN INDIVIDUAL CAPACITY AS WELL AS FOR AND ON BEHALF OF THE BOARD OF DIRECTORS OF THE ASSESSEE. THIS IS ALSO AN UNDISPUTED FACT THAT THE ASSESSEE HAD STARTED THE COMMERCIAL PRODUCTION FROM 22.11.2001. THE SLIP WAS FOUND ON 22.01.2002 THE SLIP DOES NOT CONTAIN ANY DATE WHEN THE PAYMENT WAS MADE BY THE ASSESSEE. EVEN THE ASSESSMENT ORDER ALSODO NOT STAT E WHEN THE PAYMENT WAS MADE EVEN NO DESCRIPTION AGAINST THE SAID AMOUNT IS MENTIONED. IT IS ONLY IN ANSWER TO QUESTION NO. 20, SH. ROHITBHAIAMIN STATED THAT THEY HAVE PAID IN IT(SS)A NO.194/AHD/2014 M/S. TRANSATLANTIC PACKAGING PVT. LTD. VS. ACIT BLOCK PERIOD 01.04.1995 TO 22.01.2002 - 4 - CASH RS. 84 LACS TO M/S. BUILT QUICK CONSTRU CTION CO. FROM TIME TO TIME SINCE 01.04.2000 TO DECEMBER, 2000 (APPROX) HO W MUCH PAYMENT ARE MADE PRIORTO THE COMMERCIAL PRODUCTION IS NOT BROUG HT ON RECORD. T HIS IS A FACT ON RECORD THAT THE STATEMENT GIVEN BY SH. ROHI TBHAI AMIN WAS MADE NOT ONLY ON BEHALF OF BOARD OF DIRECTORS BUT ALSO IN IN DIVIDUAL CAPACITY. BUT THERE IS NO AUTHORIZATION ON RECORD THAT THE BOARD OF DIR ECTORS HAS AUTHORIZED SH. ROHITBHAI AMIN TO MAKE DECLARATION ON BEHALF OF THE COMPANY. IT IS ALSO NOT CLEAR WHETHER THE ASSESSEE COMPANY HAS STARTED ITS COMMERCIAL PRODUCTION WHEN THE PAYMENT WAS MADE TO THE BUILT QUICK CONSTR UCTION CO. NOFINDING IN THIS REGARD IS ON RECORD. WE HAVE GONE THROUGH THE PROVISIONS OF SECTION 69B OF THE INCOME TAX ACT AND WE FIND THAT THE WORD USE D IS 'MAY' WHICH DENOTES THAT IT IS NOT NECESSARY THAT THE A.O. MUST TREAT T HE EXCESS INVESTMENT MADE BY THE ASSESSEE TO BE ITS INCOME IN EACH AND EVERY CAS E. IF THE ASSESSEE HAS NOT STARTED COMMERCIAL PRODUCTION WHETHER THE ASSESSEE WOULD HAVE EARNEDTHE INCOME WAS ALSO TO BE LOOKED INTO THIS FACT IS ALSO TO HE LOOKED IN TO WHETHER THE EXCESS INVESTMENT IS MADE BY THE DIRECTOR IN TH E INDIVIDUAL CAPACITY OR BY THE COMPANY. THIS IS AN UNDISPUTED FACT THAT THE ST ATEMENT MADE BY SH. ROHITBHAI AMIN IS NOT ONLY ON BEHALF OF THE COMPANY , THEREFORE THE DISCLOSURE MADE BY SH.ROHITBHAI WHETHER BELONG TO THE ASSESSEE OR TO ROHITBHAI IN INDIVIDUAL CAPACITY IS TO BE DECIDED SPECIALLY WHEN THE ASSESSEE COMPANY DID NOT HAVE ANY SOURCE OF INCOME EXCEPT THE CAPITAL RE CEIPT BY WAY OF SHARE CONTRIBUTION OR BORROWINGS NEITHER THE CIT(A) NOR T HE AO HAS LOOKED INTO THIS. OUR AFORESAID VIEW IS DULY SUPPORTED BY ME DE CISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. P.K. NOORJAHAN , 237 ITR 570 IN WHICH IT WAS HELD :- 'IN THE CORRESPONDING CLAUSE OF THE BILL WHICH WAS INTRODUCED IN PARLIAMENT, WHILE INSERTING SECTION 69 IN THE INCOM E TAX ACT. 1961, THE WORD 'SHALL' HAD BEEN USED BUT CURING THE COURSE OF CONSIDERATION OF THE BILL AND ON THE RECOMMENDATION OF THE SELECT CO MMITTEE, THE SAID WORD WAS SUBSTITUTED BY THE WORD 'MAY' THIS CLEARLY INDICATES THAT THE INTENTION OF PARLIAMENT IN ENACTING SECTION 69 WAS TO CONFER A DISCRETION ON THE INCOME TAX OFFICER IN THE MATTER OF TREATING THE SOURCE OF INVESTMENT WHICH HAS NOT BEEN SATISFACTOR ILY EXPLAINED BY THE ASSESSEE AS THE INCOME OF THE ASSESSEE AND THE INCO ME TAX OFFICER IS NOT OBLIGED TO TREAT SUCH SOURCE OF INVESTMENT AS INCOM E IN EVERY CASE WHERE, ERE EXPLANATION OFFERED BY THE ASSESSEE IS F OUND, TO BE NO- SATISFACTORY. THE QUESTION WHETHER THE SOURCE OF DI E INVESTMENT SHOULD BE TREATED AS INCOME OR NOT UNDER SECTION 69 HAS TO BE CONSIDERED IN THE LIGHT OF THE FACTS OF EACH CASE, IN OTHER WORDS , A DISCRETION HAS BEEN CONFERRED ON THE INCOME TAX OFFICER UNDER SECT ION 69 OF THE ACT TO TREAT THE SOURCE OF INVESTMENT AS THE INCOME OF THE ASSESSEE IF THE EXPLANATION OFFERED BY THE ASSESSEE IS NOT FOUND SA TISFACTORY AND THE SAID DISCRETION HAS TO BE EXERCISED KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF THE PARTICULAR CASE. IT(SS)A NO.194/AHD/2014 M/S. TRANSATLANTIC PACKAGING PVT. LTD. VS. ACIT BLOCK PERIOD 01.04.1995 TO 22.01.2002 - 5 - HELD, DISMISSING THE APPEAL, THAT IN THE INSTANT CA SE, THE TRIBUNAL HAD HELD THAT THE DISCRETION HAD NOT BEEN PROPERLY EXER CISED BY THE INCOME TAX OFFICER AND THE APPELLATE ASSISTANT COMMISSIONE R TAKING INTO ACCOUNT THE CIRCUMSTANCES IN WHICH THE ASSESSES WAS PLACED AND THE TRIBUNAL HAD FOUND THAT THE INVESTMENTS COULD NOT B E TREATED AS INCOME OF THE ASSESSEE, THE HIGH COURT HAS AGREED W ITH THE SAID VIEW OF THE TRIBUNAL THERE WAS NO ERROR IN THE FINDING R ECORDEDBY THE TRIBUNAL. SECTION 69 COULD NOT BE INVOKED IN RESPEC T OF THE INVESTMENTS OF THE ASSESSEE.' WE THEREFORE, IN THE INTEREST OF THE JUSTICE THINK IT APPROPRIATE THAT THIS GROUND BE SET ASIDE AND RESTORE TO THE FILE OF THE A.O. WI TH THE DIRECTION THAT THE AO SHOULD DECIDE THIS ISSUE AFRESH AFTER GIVING THE PR OPER OPPORTUNITY TO THE ASSESSEE AND AFTERCONSIDERING OUR AFORESAID OBSERVA TIONS. THUS, THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. PURSUANT TO THE SAID DIRECTION PASSED BY THE LEARNE D ITAT THE LEARNED AO PASSED AN ORDER ON 12.12.2007. 3. IT APPEARS FROM THE SAID ORDER THAT WHILE DEALIN G WITH THE PARTICULAR ASPECT OF THE MATTER OF ALLEGED ACCOUNTED INVESTMEN T OF RS.84 LACS IN THE CONSTRUCTION OF FACTORY BUILDING BY THE ASSESSEE,TH E LEARNED AO OBSERVED AS FOLLOWS: 1. THE CONTENTION OF THE ASSESSEE HAS BEEN PERUSED. IN THIS CASE DURING THE COURSE OF SEARCH, A PAPER SEIZED FROM THE FACTO RY PREMISES AND INVENTORIZED AT SERIAL NO.-27 OF ANNEXURE A-1 DATED 22-01-2002 REFLECTED PAYMENTS TO M/S. BUILT QUICK CONSTRUCTION CO. WHICH WAS IN-CHARGE OF THE CONSTRUCTION OF THE ASSESSEE'S FACTORY. THE TOTAL P AYMENT RECORDED IN THIS PAPER WAS RS.5,26,68,030/- OUT OF WHICH, RS.84 LACS WAS SHOWN AS PAID IN CASH. SHRI DHRUMESHROHITBHAI AMIN, THE SON OF SHRI ROHITBHAI AMIN, THE RESIDENT DIRECTOR AND THE PERSON ON THE SPOT, ADMIT TED IN HIS STATEMENT RECORDED U/S.132(4) THAT THIS SUM OF RS.84,00,000/- WAS PAID .IN CASH TO M/S. BUILT QUICK CONSTRUCTION CO. LTD. FOR THE CONSTRUCT ION OF FACTORY BUILDING OF THE ASSESSEE WHICH WAS NOT ACCOUNTED FOR IN ITS BOO KS. THIS STATEMENT WAS CORROBORATED BY THE STATEMENT OF VARIOUS OTHER PERS ONS IN CHARGE OF THE AFFAIRS OF THE ASSESSEE COMPANY. THIS WAS SUBSEQUEN TLY ADMITTED BY THE RESIDENT DIRECTOR, SHRI ROHITBHAI AMIN AS UNDISCLOS ED INCOME FOR THE BLOCK PERIOD. THE MANAGING PARTNER OF THE CONSTRUCTION FI RM, M/S. BUILT QUICK CONSTRUCTION CO., SHRI PARESHBHAI THAKKAR ALSO CONF IRMED THE RECEIPT OF RS.84,00,000/- IN CASH. IN THE COURSE OF PROCEEDING S U/S.158BC, THE ASSESSING OFFICER CONFRONTED THE ASSESSEE WITH THIS MATERIAL WHEREUPON THE ASSESSEE TOOK IT(SS)A NO.194/AHD/2014 M/S. TRANSATLANTIC PACKAGING PVT. LTD. VS. ACIT BLOCK PERIOD 01.04.1995 TO 22.01.2002 - 6 - THE PLEA THAT THE PAYMENT DID NOT FORM PART OF UNDI SCLOSED INCOME, BECAUSE IT WAS CAPITAL EXPENDITURE MADE DURING THE CONSTRUCTIO N PERIOD AS THE ASSESSEE HAD THEN NOT BEGUN ITS COMMERCIAL PRODUCTION. EVEN IF THIS PAYMENT WAS MADE OUTSIDE THE BOOKS OF ACCOUNT, IT COULD BE ADJUSTED AGAINST CAPITAL EXPENDITURE AND COULD NOT BE TAXED AS UNDISCLOSED INCOME OF THE ASSESSEE, IT WAS CONTENDED BY THE ASSESSEE. REJECTING THIS CONTENTIO N, THE ASSESSING OFFICER ADDED THIS AMOUNT U/S 69B OF THE ACT WHICH WAS CONF IRMED BY THE CIT(A). THE ITAT WILE DECIDING THE ISSUE, OBSERVED THAT THE PAY MENT WAS ADMITTED BY SHRI ROHITBHAI AMIN AS UNACCOUNTED BUT HIS STATEMENT WAS GIVEN NOT ONLY ON BEHALF OF THE ASSESSEE COMPANY BUT ALSO IN HIS INDI VIDUAL CAPACITY AND THERE IS NOAUTHORIZATION, ON RECORD THAT THE BOARD OF DIRECT ORS HAD AUTHORIZED SHRI ROHITBHAI AMIN TO MAKE DECLARATION ON BEHALF OF THE COMPANY. IT WAS ALSO NOT CLEAR WHETHER THE ASSESSEE COMPANY HAD STARTED ITS COMMERCIAL PRODUCTION WHEN THE PAYMENT WAS MADE. SECTION 69B USES THE WOR D 'MAY' WHICH DENOTES THAT IT IS NOT NECESSARY THAT THE ASSESSING OFFICER MUST TREAT THE EXCESS INVESTMENT AS INCOME N EACH AND EVERY CASE. IF THE ASSESSEE HAD NOT STARTED COMMERCIAL PRODUCTION, IT HAD TO BE LOOKED INTO WHE THER IT WOULD HAVE EARNED INCOME. THE FACT WHETHER THE EXCESS INVESTMENT WAS MADE BY THE DIRECTOR IN HIS INDIVIDUAL CAPACITY OR BY THE COMPANY HAD ALSO TO BE LOOKED INTO. THE ITAT FURTHER OBSERVED THAT, SINCE THE STATEMENT MAD E BY SHRI ROHITBHAI AMIN WAS NOT ONLY ON BEHALF OF THE COMPANY BUT ALSO ON H IS OWN BEHALF, THE QUESTION WHETHER THE DISCLOSURE BELONGED TO THE ASS ESSEE OR TO SHRI ROHITBHAI AMIN IN HIS INDIVIDUAL CAPACITY HAD TO BE DECIDED S PECIALLY WHEN THE ASSESSEE COMPANY DID NOT HAVE ANY SOURCE OF INCOME EXCEPT TH E CAPITAL RECEIPT BY WAY OF SHARE-SUBSCRIPTION OR BORROWINGS. SINCE NEITHER THE ASSESSING OFFICER NOT THE CIT(A) HAD LOOKED IN TO THESE ASPECTS, IT WOULD BE APPROPRIATE THAT THIS GROUND BE SET ASIDE AND RESTORED TO THE FILE OF THE ASSESSING OFFICER, THE TRIBUNAL CONCLUDED AND ACCORDINGLY SET ASIDE THIS I SSUE. 4. HEARD THE RESPECTIVE PARTIES, PERUSED THE RELEVA NT MATERIALS AVAILABLE ON RECORD. IN APPEAL, WHILE CONFIRMING THE ORDER PASSE D BY THE LEARNED AO THE LEARNED CIT(A) OBSERVED AS FOLLOWS: 4.3.1. IN THIS CASE, IT IS AN ADMITTED FACT THAT U NEXPLAINED INVESTMENT OF RS 84 LACS HAVE BEEN MADE IN THE CONSTRUCTION OF FACTO RY PREMISES OF THE APPELLANT COMPANY. THIS FACT HAS BEEN ADMITTED BY T HE DIRECTOR OF THE APPELLANT COMPANY AS WELL AS THE MANAGING DIRECTOR OF THE CONSTRUCTION FIRM. THE APPELLANT HAS NOWHERE STATED THAT SUCH INVESTME NT WAS RECORDED IN ITS BOOKS OF ACCOUNTS PRIOR TO THE DATE OF SEARCH. THE APPELLANT HAS NOT EXPLAINED THE SOURCE OF THIS EXPENDITURE EXCEPT FOR DISPUTING THE HAND IN WHICH THIS UNEXPLAINED INVESTMENT SHOULD BE TAXED AND STATING THAT SINCE IT HAD NOT COMMENCED COMMERCIAL PRODUCTION AT THE TIME OF MAKI NG OF SUCH INVESTMENT, HENCE IT COULD NOT HAVE EARNED SUCH INCOME. BUT THE APPELLANTHAS FAILED TO POINT OUT ANY LEGAL PROVISION AS PER WHICH DIRECTOR IS REQUIRED TO OBTAIN THE IT(SS)A NO.194/AHD/2014 M/S. TRANSATLANTIC PACKAGING PVT. LTD. VS. ACIT BLOCK PERIOD 01.04.1995 TO 22.01.2002 - 7 - APPROVAL OF THE BOARD OF DIRECTOR BEFORE MAKING ANY STATEMENT UNDER SUB SECTION (4) OF SECTION 132 OF THE ACT. SUB SECTION (4) OF SECTION 132 AUTHORIZES THE AUTHORIZED OFFICER TO RECORD THE STATEMENT ON O ATH OF ANY PERSON WHO IS FOUND TO BE IN POSSESSION OR IN CONTROL OF ANY BOOK S OF ACCOUNTS, DOCUMENTS MONEY, BILLS AND OTHER VALUABLE ARTICLES AND SUCH S TATEMENTS CAN BEUSED AS EVIDENCE IN ANY PRECEDING UNDER THE INCOME TAX ACT 1961. THUS, FOR MAKING THE STATEMENT THE DIRECTOR WAS NOT REQUIRED TO OBTA IN APPROVAL OF BOARD OF DIRECTORS AS HE WAS BOUND TO GIVE THE STATEMENT IN RESPECT OF NOTINGSFNUND IN THE DAIRY AT THE PREMISES WHERE THE DIRECTOR WAS PR ESENT. A COMPANY IS A JURISTIC PERSON AND IT IS ALWAYS REPRESENTED BY ITS DIRECTOR. BESIDES, WITHOUT PREJUDICE TO THIS, EVEN IF IT IS ASSUMED THAT SUCH STATEMENT WAS MADE WITHOUT ANY AUTHORIZATION, STILL THE APPELLANT HAS TO PROVE THAT THE EXPLANATION GIVEN IN THIS STATEMENT WAS NOT CORRECT AND THAT THESE NO TINGS DID NOT PERTAIN TO THE UNEXPLAINED INVESTMENT MADE IN THE FACTORY PREMISES OF THE APPELLANT. THE APPELLANT HAS NOT DISCHARGED THIS ONUS. BESIDES THE RE ARE OTHER EVIDENCES TO ESTABLISH THAT THE NOTING WERE REGARDING INVESTMENT MADE FOR CONSTRUCTION OF FACTORY PREMISES AND SUCH INVESTMENT HAS NOT BEEN R ECORDED IN THE BOOKS OF ACCOUNTS. HENCE TAXABILITY OF THIS AMOUNT IS REQUIR ED TO BE EXAMINED IN THE HANDS OF THE APPELLANT ITSELF. 4.3.2. SO FAR AS TAXABILITY OF THIS AMOUNT IS CONC ERNED, SIMILAR ISSUE HAS BEEN DECIDED BY ITAT DELHI BENCH IN ITS DECISION IN THE CASE OF HALDIRAM FOODS LTD, 79 ITD 425 (DELHI). IN THIS CASE, THE AS SESSEE WAS FOUND TO HAVE PAID RS.22 LAKHS AS ON MONEY IN CASH FOR PURCHASE O F LAND. IN THE STATEMENT RECORDED U/S 132(4), THE DIRECTOR OF THE COMPANY VO LUNTARILY SURRENDERED AMOUNT OF RS. 25 LAKHS OUT OF WHICH HE CLAIMED TO H AVE PAID RS.22 LACS TO THE VENDOR FOR THIS 'ON MONEY'. THE AO REJECTED THE DIR ECTOR'S CONTENTION ON GROUNDS THAT OWNERSHIP OF LAND WAS VESTING WITH ASS ESSEE. HENCE, THE DIRECTOR SHOULD HAVE BEEN SHOWN AS CREDITOR IN BOOKS OF ACCO UNTS OF THE COMPANY. ACCORDINGLY, THE SUM OF RS.22 LAKHS WAS HELD TO ASS ESSEE COMPANY'S INCOME FROM UNDISCLOSED SOURCES U/S 69B. THE ADDITION WAS UPHELD BY CIT(A). FURTHER, IN APPEAL THE ITAT HELD AS FOLLOWS AFTER D ISCUSSING DECISION IN THE CASE OF SMT. PK NOORJAHAN (SUPRA) AND BHARAT ENGINE ERING CONSTRUCTION (SUPRA). 'A COMPANY IS, UNDER THE GENERAL LAW, A JURISTIC PE RSON ELIGIBLE TO OWN PROPERTY AND TO SUE OR BE SUED, IN ITS NAME. A COMP ANY IS SEPARATE AND DISTINCT FROM ITS SHAREHOLDERS. IN THE EYE OF LAW C OMPANY IS ITS OWN MASTER AND IS ANSWERABLE LIKE ANY OTHER PERSON. AS SUCH, THE DIRECTOR CANNOT BE CONSTRUED TO BE THE LEGAL OWNER OF THE CO MPANY. IT FOLLOWS THAT HE CANNOT MAKE DISCLOSURE FOR THE BENEFIT OF T HE COMPANY. THEREFORE, THE ASSESSING OFFICER WAS CORRECT IN HOL DING THAT THE INVESTMENT, MADE FOR ACQUIRING THE ASSET OF THE COM PANY WAS TO BE EXAMINED IN THE HANDS OF COMPANY AND NOT IN THE HAN DS OF THE DIRECTOR OF THE COMPANY, WHO WAS SIMPLY AN AGENT AND NOT THE OWNER OF THE ASSET. W DID NOT MAKE INVESTMENT TOWARDS THE PURCHA SE OF THE SAID IT(SS)A NO.194/AHD/2014 M/S. TRANSATLANTIC PACKAGING PVT. LTD. VS. ACIT BLOCK PERIOD 01.04.1995 TO 22.01.2002 - 8 - PROPERTY AS THE SAME WAS NOT REFLECTED- IN THE COMP ANY'S BALANCE SHEET. IN THE INSTANT CASE, THE VENDOR, IN CLEAR AN D UNEQUIVOCAL TERMS, ADMITTED THE RECEIPT OF 'ON-MONEY' TO THE EXTENT OF RS. 22 LAKHS. AS THE ASSESSEE DID NOT HAVE ANY EXPLANATION TO OFFER, DIR ECTOR MADE THE DISCLOSURE. THE POSSIBILITY OF EARNING MADE BY THE COMPANY COULD NOT BE RULED OUT ALTOGETHER. IT IS A TRITE LAW THAT THE DISCLOSURE MUST RELATE TO INCOME ACTUALLY EARNED BY THE DECLARANT. IMMUNIT Y CAN ONLY BE GRANTED TO THE DECLARANT ALONE AND NOT TO OTHER PER SONS. RIGHT TO MAKE DISCLOSURE IS A CONCESSION PROVIDED TO THE ASSESSEE UNDER THE STATUTE. IN ORDER TO AVAIL THE BENEFIT OF DISCLOSURE, IT IS A SINE QUA NON, THAT THE ASSESSEE MUST COMPLY ALL THE CONDITIONS CONTAINED I N THE ACT. ONE OF THE CONDITIONS CONTAINED IS THAT THE ASSESSEE MUST BE THE OWNER OF THE ASSET, FOUND DURING THE COURSE OF THE SEARCH. IN TH E INSTANT CASE, THE DECLARANT WAS NOT OWNER. HE WAS THE ONLY DIRECTOR O F THE COMPANY. HE DID NOT HAVE AUTHORITY FROM THE COMPANY TO MAKE SUC H DISCLOSURE. EVEN THE BOOKS OF THE COMPANY DID NOT REFLECT THE F ACTUM OF DISCLOSURE. ALSO, AT NO STAGE, THE DIRECTOR WAS SHOWN AS A CRED ITOR FOR A SUM OF RS. 22 LAKHS. IN SUCH CIRCUMSTANCES, DISCLOSURE MADE BY THE DIRECTOR QUA THE UNDISCLOSED ASSETS OF THE COMPANY WAS NON EST. IN THE INSTANT CASE, INCOME WAS DECLARED BY THE DIRECTOR WHEREAS THE AMO UNT OF INVESTMENT WAS MADE BY THE ASSESSEE-COMPANY. THE ASSESSEE-COMP ANY WAS A DIFFERENT ENTITY FROM ITS DIRECTORS. AS SUCH, THE B ENEFIT OF DISCLOSURE COULD NOT BE EXTENDED TO THE ASSESSEE-COMPANY.' 4.3.3. BESIDES, THE DECISION OF HON'BLE SUPREME CO URT IN THE CASE OF PK NOORJAHAN HAS ALSO BEEN DISCUSSED IN DETAIL BY THE HON'BLE SUPREME COURT IN THE CASE OF P. MOHAN KALA, 161 TAXMANN 169 (SC). IN THIS CASE, THE COURT AS HELD THAT AS FOLLOWS:- 'IT IS TRUE THAT EVEN AFTER REJECTING THE EXPLANATI ON GIVEN BY THE ASSESSEES, IF FOUND UNACCEPTABLE, THE CRUCIAL ASPEC T, WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, IT SHOULD BE I NFERRED THAT THE SUMS CREDITED IN THE BOOKS OF THE ASSESSEES CONSTITUTED INCOME OF THE PREVIOUS YEAR, MUST RECEIVE THE CONSIDERATION OF TH E AUTHORITIES, PROVIDED THAT THE ASSESSEES REBUT THE EVIDENCE AND THE INFERENCE DRAWN TO REJECT THE EXPLANATION OFFERED AS UNSATISFACTORY . SECTION 68 ITSELF PROVIDES THAT WHERE ANY SUM IS FOUND CREDITED IN TH E BOOKS OF THE ASSESSEES FOR ANY PREVIOUS YEAR, THE SAME MAY BE CH ARGED TO INCOME TAX AS THE INCOME OF ASSESSEES OF THE PREVIOUS YEAR , IF THE EXPLANATION OFFERED BYTHE ASSESSEES, ABOUT THE NATURE AND SOURC E OF SUCH SUMS FOUND CREDITED IN THE BOOKS OF THE ASSESSEES, IS IN THE OPINION OF THE ASSESSING OFFICER NOT SATISFACTORY. SUCH OPINION FO UND ITSELF CONSTITUTES A PRIMA FACIE EVIDENCE AGAINST THE ASSESSEES, VIZ., THE RECEIPT OF MONEY, AND IF THE ASSESSEES FAIL TO REBUT THE SAID EVIDENCE, THE SAME CAN BE USED AGAINST THE ASSESSEES BY HOLDING THAT I T WAS A RECEIPT OF AN INCOME NATURE. IN THE INSTANT CASE, THE AUTHORITIES , CONCURRENTLY FOUND IT(SS)A NO.194/AHD/2014 M/S. TRANSATLANTIC PACKAGING PVT. LTD. VS. ACIT BLOCK PERIOD 01.04.1995 TO 22.01.2002 - 9 - THE EXPLANATION OFFERED BY THE ASSESSEES UNACCEPTAB LE. THE AUTHORITIES UPHELD THE OPINION FORMED BY THE ASSESSING OFFICER THAT THE EXPLANATION OFFERED WAS NOT SATISFACTORY. THE ASSES SEES DID NOT TAKE THE PLEA THAT EVEN IF THE EXPLANATION WAS NOT ACCEP TABLE, THE MATERIAL AND ATTENDING CIRCUMSTANCES AVAILABLE ON RECORD DID NOT JUSTIFY THE SUM FOUND CREDITED IN THE BOOKS TO BE TREATED AS A RECEIPT OF AN INCOME NATURE. THE BURDEN IN THIS REGARD WAS ON THE ASSESS EES. NO SUCH ATTEMPT HAD BEEN MADE BEFORE ANY AUTHORITY. [PARA 2 1]' 4.3.4. IN THE PRESENT CASE, DESPITE THE FACT THAT UNEXPLAINED CASH HAS BEEN INVESTED IN THE CONSTRUCTION OF THE FACTORY OF THE APPELLANT, THE APPELLANT HAS NOWHERE MADE ANY SUBMISSION REGARDING THE PROBABLE SOURCES OF SUCH UNEXPLAINED EXPENSES. THE SUPREME COURT HAS HELD TH AT WHERE THE EXPLANATION OFFERED BY THE ASSESSEE ABOUT THE NATUR E AND SOURCE OF SUMFUND CREDITED IN THE BOOKS IS NOT SATISFACTORY THERE IS PRIMA FACIE EVIDENCE AGAINST THE ASSESSEE VIZ, THE RECEIPT OF THE MONEY. THE BUR DEN IS ON THE ASSESSEE TO REBUT THE SAME AND IF HE FAILS TO REBUT IT CAN BE H ELD AGAINST THE ASSESSEE THAT IT WAS A RECEIPT OF AN INCOME NATURE. IN THE CASE O F PK NOORJAHAN (SUPRA), THE APPELLANT HAD FURNISHED AN EXPLANATION THAT THE INV ESTMENT IN PROPERTY HAD BEEN MADE OUT OF INCOME RECEIVED BY HER FROM ASSETS HANDED OVER BY HER STEP FATHER IN EARLIER YEARS. IN THE PRESENT CASE, 'RE IS NOT AN IOTA OF EXPLANATIONS AVAILABLE ABOUT THE PROBABLE SOURCES OF INVESTMENT MADE BY THE APPELLANT IN CONSTRUCTION OF THE FACTORY. IN THIS REGARD, THE IT AT AHMEDABAD BENCH IN ITS DECISION IN THE CASE OF DAXABENKIRTIBHAI THAKKAR IN ITA NO.462/AHD/2006 HAS HELD AS FOLLOWS: '5.8 NOW ADVERTING TO DECISION IN P.K.NOORJAHAN(SU PRA) RELIED UPON BY THE LD. AR , IN THAT CASE FACTS WERE THAT T HE ASSESSEE A MUSLIM LADY, AGED ABOUT 20 YEARS DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 1968-69 ON NOVEMBER 15, 1967, PURCH ASED 16 CENTS OF LAND IN ERNAKULAM AND THE AMOUNT SPENT BY HER, I NCLUSIVE OF STAMP AND REGISTRATION CHARGES, FOR THIS PURCHASE WAS RS. 34,628. ON NOVEMBER 27, 1968, SHE PURCHASED ANOTHER 12 CENTS O F LAND AT ERNAKULAM AND THE TOTAL INVESTMENT FOR THIS PURCHAS E WAS RS. 25,902. THE EXPLANATION OF THE ASSESSEE REGARDING THE SOURC E OF THE PURCHASE MONEY FOR THESE INVESTMENTS WAS THAT THE SAME WERE FINANCED OUT OF THE SAVINGS FROM THE INCOME OF THE PROPERTIES WHICH WERE LEFT BY HER MOTHER'S FIRST HUSBAND. THE SAID EXPLANATION OFFERE D BY THE ASSESSEE WAS REJECTED EXCEPT TO THE EXTENT OF RS. 2,000 BY T HE INCOME-TAX OFFICER WHO MADE AN ADDITION OF RS. 32,628 AS INCOM E FROM OTHER SOURCES IN THE ASSESSMENT YEAR 1968-69 AND AN ADDIT ION OF RS. 25,902 IN THE ASSESSMENT YEAR 1969-70. THE SAID ORDERS WER E AFFIRMED IN APPEAL BY THE APPELLATE ASSISTANT COMMISSIONER. THE INCOME-TAX APPELLATE TRIBUNAL, HOWEVER, HELD THAT EVEN THOUGH THE EXPLANATION ABOUT THE NATURE AND SOURCES OF THE PURCHASE MONEY WAS NOT SATISFACTORY BUT IN THE FACTS AND CIRCUMSTANCES OF THE CASE IT WAS NOT IT(SS)A NO.194/AHD/2014 M/S. TRANSATLANTIC PACKAGING PVT. LTD. VS. ACIT BLOCK PERIOD 01.04.1995 TO 22.01.2002 - 10 - POSSIBLE FOR THE ASSESSEE TO EARN THE AMOUNT INVEST ED IN THE PROPERTIES AND THAT BY NO STRETCH OF IMAGINATION COULD THE ASS ESSEE BE CREDITED WITH HAVING EARNED THIS INCOME IN THE COURSE OF THE ASSESSMENT YEAR OR WAS EVEN IN A POSITION TO EARN IT FOR A DECADE OR M ORE. THE TRIBUNAL TOOK THE VIEW THAT ALTHOUGH THE EXPLANATION OF THE ASSESSEE WAS LIABLE TO BE REJECTED, SECTION 69 OF THE ACT CONFERRED ONL Y A DISCRETION ON THE INCOME.-TAX OFFICER TO DEAL WITH THE INVESTMENT AS INCOME OF THE ASSESSEE AND THAT IT DID NOT MAKE IT MANDATORY ON H IS PART TO DEAL WITH THE INVESTMENT AS INCOME OF THE ASSESSEE AS SOON AS THE TATTER'S EXPLANATION HAPPENED TO BE REJECTED. ON THAT VIEW, THE TRIBUNAL ALLOWED THE APPEALS OF THE ASSESSEE AND CANCELLED T HE ASSESSMENT MADE BY THE INCOME- TAX OFFICER. THEREAFTER, THE TR IBUNAL AT THE INSTANCE OF THE REVENUE REFERRED THE QUESTION TO TH E HIGH COURT FOR ITS OPINION. THE HIGH COURT AGREED WITH THE SAID VIEW O F THE TRIBUNAL AND HELD THAT IN THE INSTANT CASE IT COULD NOT BE SAID THAT THE TRIBUNAL WAS WRONG IN HAVING DIFFERED FROM THE INCOME TAX OFFICE R AND THE APPELLATE ASSISTANT COMMISSIONER IN THE MATTER OF E XERCISING JUDICIAL DISCRETION AS TO WHETHER EVEN AFTER REJECTING THE E XPLANATION OF THE ASSESSEE, THE VALUE OF THE INVESTMENTS WERE TO BE T REATED AS THE INCOME OF THE ASSESSEE. ACCORDING TO THE HIGH COURT, THE T RIBUNAL HAD NOT COMMITTED ANY ERROR IN TAKING INTO ACCOUNT THE COMP LETE ABSENCE OF RESOURCES OF THE ASSESSEE AND A/SO THE FACT THAT HA VING REGARD TO HER AGE AND THE CIRCUMSTANCES IN WHICH SHE WAS PLACED S HE COULD NOT BE CREDITED WITH HAVING MADE ANY INCOME OF HER OWN AND IN THESE CIRCUMSTANCES THE TRIBUNAL WAS RIGHT IN REFUSING TO MAKE AN ADDITION OF THE VALUE OF THE INVESTMENTS TO THE INCOME OF TH E ASSESSEE. HON'BLE APEX COURT UPHELD THE VIEW OF THE HON'BLE HIGH COUR T. THE ID, AR APPEARING BEFORE US DID NOT EXPLAIN AS TO HOW THIS DECISION IS OF ANY HELP TO THE ASSESSEE, ESPECIALLY WHEN THE ASSESSEE, IN THE INSTANT CASE, ON BEING QUESTIONED IN THE LIGHT OF MATERIAL FOUND DURING THE COURSE OF SURVEY, OFFERED THE AMOUNT ATTRIBUTABLE TO UNACCOUN TED STOCK FOUND DURING THE SURVEY TO TAX IN HER STATEMENT' RECORDED ONLY AFTER THE SURVEY AND SUBSEQUENTLY PAID TAX THEREON. THERE IS NOTHING TO SUGGEST THAT AT ANY STAGE, THIS OFFER HAS BEEN RETRACTED. I N THESE CIRCUMSTANCES, WE ARE OF THE OPINION THAT THE RELIANCE ON THE AFOR ESAID DECISION, RENDERED ON ALTOGETHER DIFFERENT FACTS, IS TOTALLY MISPLACED.' THUS, IN ALL THESE DECISION IT HAS BEEN HELD THAT W HETHER THE SOURCE OF INVESTMENT SHOULD BE TREATED INCOME EARNED U/S 69 H AS TO BE CONSIDERED IN THE LIGHTS OF FACTS OF EACH CASE. SINCE IN THE PRESENT CASE, THE APPELLANT HAS FAILED TO FILE ANY EXPLANATION REGARDING THE UNEXPLAINED I NVESTMENT IN ITS FACTORY BUILDING, HENCE, IT IS HELD THAT AO HAS RIGHTLY HEL D SUCH AMOUNTS AS ITS INCOME U/S 69B OF THE ACT. HENCE, THIS GROUND OF APPEAL IS DISMISSED. IT(SS)A NO.194/AHD/2014 M/S. TRANSATLANTIC PACKAGING PVT. LTD. VS. ACIT BLOCK PERIOD 01.04.1995 TO 22.01.2002 - 11 - 5. IT APPEARS FROM THE RECORDS THAT THE LEARNED TRI BUNAL WAS PLEASED TO SPECIFICALLY OBSERVED THE UNDISPUTED FACT THAT THE ASSESSEE HAS STARTED COMMERCIAL PRODUCTION FROM 22.11.2001 AND THE SLIP WHICH WAS FOUND ON 22.01.2002 I.E. WITHIN THE 3 MONTHS FROM THE DATE O F COMMENCEMENT OF COMMERCIAL PRODUCTION DOES NOT CONTAIN ANY DATE WHE N THE PAYMENT WAS MADE BY THE ASSESSEE. NEITHER ANY DESCRIPTION AGAINST TH E AMOUNT IN QUESTION IS MENTIONED IN THE PARTICULAR SLIP. IT IS ONLY IN THE ANSWER TO QUESTION NO.20 SHRI ROHITBHAI AMIN STATED THAT HE PAID IN CASH RS. 84 L ACS TO M/S. BUILT QUICK CONSTRUCTION CO. FROM TIME TO TIME SINCE 01.04.2000 TO DECEMBER, 2000 (APPROX). HOW MUCH PAYMENT WERE MADE PRIOR TO THE C OMMERCIAL PRODUCTION WAS ALSO NOT BROUGHT ON RECORD. THOUGH THE SAID SHR I ROHIBHAI AMIN DEPOSED NOT ONLY BY THE BOARD OF DIRECTORS BUT ALSO IN THE INDIVIDUAL CAPACITY. IT WAS NEITHER ON RECORD THAT WHETHER HE WAS HAVING AUTHOR IZATION ON BEHALF OF DIRECTORS. THERE IS NO SUCH SPECIFIC DETAILS AS REG ARDS THE ASSESSEE COMPANY HAS WHETHER STARTED ITS COMMERCIAL PRODUCTION WHEN THE PAYMENT WAS MADE TO M/S. BUILT QUICK CONSTRUCTION CO. IT WAS FURTHER ME NTIONED BY THE HONBLE TRIBUNAL THAT THE DISCLOSURE MADE BY SHRI ROHIBHAI AMIN WHETHER BELONG TO THE ASSESSEE OR TO SHRI ROHIBHAI AMIN IN INDIVIDUAL CAPACITY IS TO BE DECIDED ESPECIALLY WHEN THE ASSESSEE COMPANY DID NOT HAVE A NY SOURCE OF INCOME EXCEPT THE CAPITAL RECEIPT BY WAY OF SHARE CONTRIBU TION OR BORROWINGS. THESE ASPECTS OF THE MATTER HAVE NOT BEEN CONSIDERED EITH ER BY THE LEARNED CIT(A) OR BY THE LEARNED AO WHICH WAS DIRECTED TO BE CONSIDER ED BY THE LEARNED AO BY THE ORDER DATED 13.10.2006 PASSED BY THE HONBLE IT AT. BUT IN SPITE OF THOSE SPECIFIC DIRECTION PASSED BY THE HONBLE TRIBUNAL W HILE MAKING ASSESSMENT AFRESH THESE WERE NOT BEENEXAMINED BY THE LEARNED A O. ON THE CONTRARY, THE LEARNED AO OBSERVED THATSHRI ROHITBHAI AMIN, THE R ESIDENT DIRECTOR, WAS NOT AUTHORIZED BY THE BOARD OF DIRECTORS TO MAKE DECISI ON ON BEHALF OF THE COMPANY IS HYPER-TECHNICAL AND FURTHER OBSERVED TH AT FOR INVOKING THIS IT(SS)A NO.194/AHD/2014 M/S. TRANSATLANTIC PACKAGING PVT. LTD. VS. ACIT BLOCK PERIOD 01.04.1995 TO 22.01.2002 - 12 - PROVISION, THE CONSIDERATION WHETHER THE COMMERCIAL PRODUCTION HAS STARTED OR NOT IS IMMATERIAL BECAUSE IT IS NOT A NORMAL INCOME FROM A PARTICULAR SOURCE BUT THE DEEMED INCOME WHICH DOES NOT ADMIT ANY SOURCE. WE DEPRECATE THIS PRACTICE FOLLOWED BY THE LEARNED AO IN MAKING REMAR KS AGAINST THE ORDER PASSED BY THE HONBLE TRIBUNAL DATED 13.10.2006 ON THIS ISSUE INSTEAD OF PREFERRING AN APPEAL BEFORE THE HIGHER FORUM IF THE REVENUE IS AGGRIEVED BY THE ORDER PASSED.WE FURTHER NOTE THAT NOT ACCEPTING THE ORDER IN THIS MANNER IS BEYOND JUDICIAL DECORUM. THIS PARTICULAR ASPECT OF THE MATTER, HAS ALSO BEEN OVERLOOKED BY THE LEARNED CIT(A) FOR THE REASON BES T KNOWN TO HIM WHILE CONFIRMING THE ORDER PASSED BY THE LEARNED AO. HENC E, WE FIND THAT THE AUTHORITIES BELOW HAS NOT ACTED IN THE MANNER HAS B EEN SPECIFIED BY THE HONBLE TRIBUNAL IN ORDER TO DEAL THE ISSUE AFRESH; THE DIRECTIVES OF THE HONBLE TRIBUNAL HAS NOT BEEN FOLLOWED IN ITS LETTER AND SP IRIT AND HENCE, WE ARE OF THE OBSERVATION TO RESTORE THE ISSUE TO THE FILE OF THE LEARNED AO WITH A SPECIFIC DIRECTION UPON HIM TO DEAL WITH THE ISSUE AFRESH IN THE LIGHT OF THE OBSERVATIONS MADE BY THE HONBLE TRIBUNAL BY ITS ORDER DATED 13. 10.2006. WHILE DOING SO, THE LEARNED AO WILL FURTHER GIVE AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND WILL ALSO EXAMINE THE EVIDENCE ON RECORD OR ANY OTHER EVIDENCE WHICH THE ASSESSEEMAY CHOOSE TO FILE AT THE TIME OF HEARING O F THE MATTER. 5. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 20 / 0 9 /201 9 SD/- SD/- ( O. P. MEENA) ( MS. MADHUMITA ROY ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 20/09/2019 PRITIYADAV, SR.PS IT(SS)A NO.194/AHD/2014 M/S. TRANSATLANTIC PACKAGING PVT. LTD. VS. ACIT BLOCK PERIOD 01.04.1995 TO 22.01.2002 - 13 - / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. () / THE CIT(A)-IV, BARODA. 5. , ! ', #$%% / DR, ITAT, AHMEDABAD 6. &' () / GUARD FILE. / BY ORDER, //TRUE COPY// / (DY./ASSTT.REGISTRAR) !, #$ / ITAT, AHMEDABAD 1. DATE OF DICTATION18.09.2019 (DICTATION PAGES 4) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 19.09.2019 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S19.09.2019 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER