DCIT, Alappuzha V. M/s Boban Jaganath Shinde & A.Rahim, Alappuzha

ITSSA 4/COCH/2009

• Counselvise Citation: [2011] 124 COUNSELVISE.COM (IT) 8121 (ITAT-COCHIN)
• Duration Of Justice: 2 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 24-08-2011
• Appeal Filed By: Department
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 09-04-2009
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA
• Assessee Lawyers: K R SUDHAKARAN PILLAI ADV
• Keywords: Search and seizure; Opportunity of being heard; Principle of natural justice; Block assessment
• Section: 143(3); 131; 132; 144; 15

Judgement Text

1 IN THE INCOME TAX APPELLAT E TRIBUNAL COCHIN BEN CH, COCHIN BEFORE S/SHRI N.VIJAYAKUMARAN, JM AND SANJAY AR ORA, AM I.T.(SS)A. NO. 4/COCH/2009 BLOCK PERIOD ENDING ON 09.11.2000 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE- 1, ALAPPUZHA VS. M/S.BOBAN JAGANNATH SHINDE & A.RAHIM, PALAKULAM VELIYIL, ASHRAMAM WARD, ALAPPUZHA. (REVENUE-APPELLANT) (ASSESSEE-RES PONDENT) REVENUE BY MS. S. VIJAYAPRABHA, DR ASSESSEE BY SHRI K.R.SUDHAKARAN PILLAI, ADV.-AR DATE OF HEARING 27/07/2011 DATE OF PRONOUNCEMENT 24/08/2011 O R D E R PER SANJAY ARORA, AM: THIS IS AN APPEAL BY THE REVENUE ARISING OUT OF TH E ORDER BY THE COMMISSIONER OF INCOME-TAX (APPEALS)-IV, KOCHI (CIT(A) FOR SHORT) DATED 18.12.2008, AND THE BLOCK PERIOD UNDER REFERENCE IS 1.4.1990 TO 9.11.2000, TH E DATE OF SEARCH. 2.1 THE FACTS OF THE CASE IN BRIEF ARE THAT THERE W AS A SEARCH U/S. 132 OF THE INCOME-TAX ACT, 1961 ('THE ACT' HEREINAFTER) ON 09/11/2000 AT THE BUSINESS AND RESIDENTIAL PREMISES OF THE ASSESSEE, ONE OF THE SUPPLIERS TO THE A.V.J. GR OUP OF JEWELLERS, DEALING IN GOLD ORNAMENTS, WHICH WAS ALSO RAIDED AT ITS VARIOUS PRE MISES ON THAT DATE, VIZ. ALAPPUZHA, MAVELIKARA AND CHERTHALA. THE ASSESSEE WAS RUNNING A GOLD REFINING AND ORNAMENTS MANUFACTURING UNIT AT ALLEPPEY NAMED DURGA GOLD WO RKS. THOUGH DOING THE SAID BUSINESS FOR THE LAST SEVERAL YEARS, HE WAS NOT FIL ING ANY RETURN OF INCOME IN RESPECT TO THE SAME. 2 2.2 SEVERAL DOCUMENTS IN RELATION TO THE BUSINESS A CTIVITIES OF SH. BOBAN JAGANNATH SHINDE WERE FOUND AND SEIZED, AND STATEMENT OF SMT. NANDA B SHINDE, HIS WIFE, RECORDED ON OATH; HE BEING NOT AVAILABLE. SUBSEQUENTLY, HE W AS ALSO SUMMONED U/S. 131 OF THE ACT AND HIS STATEMENT RECORDED ON 20.11.2000. NOTICE U /S. 158BC OF THE ACT WAS ACCORDINGLY ISSUED ON 8.3.2001 BY ASSTT. CIT, INV. CIRCLE, KOTT AYAM. THE ASSESSEE DID NOT FILE ANY RETURN OF INCOME IN FORM 2B IN RESPONSE THERETO, EV EN AS THE JURISDICTION OVER THE CASE WAS ASSIGNED TO CENTRAL CIRCLE, KOTTAYAM. THE ASSE SSEE EXPIRED ON 22.1.2002 AND, ACCORDINGLY, HIS LEGAL REPRESENTATIVES, BEING HIS W IVES, SMT. NANDA B.SHINDE (SUPRA) AND SMT. SUMAN B.SHINDE, I.E., AFTER BRINGING THEM ON R ECORD, WERE SHOW CAUSED ON 21.10.2002, CALLING FOR THEIR OBJECTIONS. THE ASSES SEE PLEADED FINANCIAL HARDSHIP BEING FACED BY THE LATE SH. SHINDES FAMILY, CONSISTING O F HIS TWO WIVES AND SEVEN CHILDREN. THE ASSESSING OFFICER (AO) OF THE PERSON SEARCHED, I.E., ASSTT. CIT, CENTRAL CIRCLE, KOTTAYAM, WAS OF THE VIEW THAT IT WAS APPARENT FROM THE DETAILS AVAILABLE IN THE SEIZED BOOKS MARKED AS MKA-4, MKA-5, MKA-6 UP TO MKA-18, O F THE `ASSESSEE BEING IN JOINT BUSINESS WITH SHRI A.RAHIM, MANUFACTURING AND SELLING GOLD ORNAMENTS ON WHOLESALE BASIS, DURING THE PERIOD JUNE, 1998 TO JA N, 1999. THE SAME ALSO EVIDENCED THE PROFIT BEING EARNED FROM THE SAID BUSINESS, WHICH W AS AT AN AVERAGE OF ` 60,000/- PER MONTH, SO THAT AN INCOME OF ` 4,80,000/- WAS LIABLE TO BE BROUGHT TO TAX. SO, HOW EVER, AS IT WAS CLEAR THAT THE INCOME WAS BEING EARNED BY TH E ASSESSEE IN JOINT BUSINESS WITH SHRI A.RAHIM, THE SAME WAS HENCE TO BE ASSESSED ONLY IN THE HANDS OF THE ASSOCIATION OF PERSONS (AOP) CONSISTING OF THE TWO. ACCORDINGLY, A FTER SEEKING PRIOR APPROVAL FROM THE ADDL. COMMISSIONER ON 26.11.2002, THE AO CONCERNED, I.E., OF THE PERSON SEARCHED, CLOSED THE ASSESSMENT AS A NIL DEMAND CASE. FRESH PROCEEDINGS ON THE ASSESSEE-AOP WERE INITIATED BY THE ISSUE OF NOTICE U/S. 158BC ON 12.3.2003. NO RETURN OF INCOME WAS AGAIN FILED. THE AO, AFTER RECORDING THE ASSESSEES OBJECTIONS, AND CONSIDERING THE SAME, FRAMED THE ASSESSMENT IN THE HANDS OF THE AOP AT AN UNDISCLOSED INCOME OF ` 4.80 LAKHS. 2.3 IN APPEAL, HOWEVER, THE SAME FOUND FAVOUR WITH THE LD. CIT(A) ON SEVERAL COUNTS. FIRSTLY, THE NOTICE, BEING ISSUED ONLY ON 12.3.2003 , WAS TIME BARRED; THE SEARCH HAVING BEEN CONDUCTED ON 9.11.2000, THE ASSESSMENT U/S. 15 8BD OUGHT TO HAVE BEEN COMPLETED 3 BY NOVEMBER, 2002. SECONDLY, NO SATISFACTION WAS R ECORDED BY THE AO CONCERNED, WHICH, ALONG WITH THE TRANSFER OF THE MATERIALS LEA DING TO AN INFERENCE OF UNDISCLOSED INCOME IN THE HANDS OF THE ASSESSEE, WOULD ONLY LEA D TO AN ASSUMPTION OF JURISDICTION BY THE ASSESSEES AO. FURTHER, THE REVENUE HAD ASSESS ED THE SHARE OF SHRI A.RAHIM ALSO IN THE AOPS INCOME, AND WHICH STOOD ALREADY ASSESSED IN HIS INDIVIDUAL HANDS. IT WAS, THEREFORE, NOT OPEN TO IT TO TAKE A DIFFERENT STAND AND ASSESS THE BALANCE INCOME IN THE HANDS OF THE AOP, I.E., THE SAME CAN ONLY BE ASSESS ED IN THE HANDS OF SH. BOBAN J. SHINDE IN HIS INDIVIDUAL CAPACITY. LASTLY, THERE WAS NO BASIS THAT THE REVENUE/AO FOR ESTIMATING THE INCOME OF THE APPELLANT, WHICH, BEING UNDISCLOS ED INCOME, HAD NECESSARILY TO BE BASED ON THE MATERIALS FOUND IN SEARCH, AND `ESTIMA TION HAD NO PLACE IN THE COMPUTATION OF UNDISCLOSED INCOME. THE ASSESSEEES APPEAL WAS, ACCORDINGLY, UPHELD BY THE LD. CIT(A). AGGRIEVED, THE REVENUE IS IN APPEAL. 3. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. WE SHALL TAKE UP EACH OF THE SEVERAL ISSUES RAISED PER THE IMPUGNED ORDER, BEING AGITATED BY THE ASSESSEE, IN SERIATIM. THE ASSESSEES FIRST CONTENTION, RAIS ED WITH REFERENCE TO THE COPY OF THE NOTICE DATED 12/3/2003 INITIATING PROCEEDINGS (PB P G. 1 ), IS THAT THE PROCEEDINGS ARE VITIATED AS IT IS NOT A NOTICE U/S. 158BD BUT ONLY U/S. 158 BC. THAT IS, NO NOTICE U/S. 158 BD, IN FACT, STANDS ISSUED TO IT; THE NOTICE INITIA TING PROCEEDINGS ISSUED ON 12.3.2003 BEING ONLY U/S. 158BC. HOW COULD AN ASSESSMENT U/S. 158BD R/W 158BC BE FRA MED IN THE ABSENCE OF ANY NOTICE U/S. 158BD ? FURTHER, IF IT IS TO BE TREATED AS A S. 158BC NO TICE, THE SAME IS BARRED BY TIME, EVEN AS HELD BY THE LD. CIT(A). THE ASSESSEES THIRD OBJECTION, AND WHICH ALSO FOUND FAVOUR WITH THE LD. CIT(A), IS THE ABSENCE OF ANY SATISFACTION BEING RECORDED BY THE ASSESSING OFFICER OF THE PERSON SEA RCHED. REFERENCE STANDS MADE BY THE ASSESSEE IN THIS CONTEXT TO THE DECISION IN THE CAS E OF SUBHAS CHANDRA BHANIRAMKA VS. CIT (2010); 32 ITR 349(CAL.); MANOJ AGGARWAL VS. CIT (DY.) (2008) 113 ITD 372 (DEL.)(SB) AND CIT(DY.) VS. FLAIR BUILDERS P. LTD. (2010) 3 ITR (TRIB.) 158 (DELHI). 3.1 FIRSTLY, THE WARRANT OF AUTHORIZATION BEING A DMITTEDLY NOT IN THE NAME OF THE ASSESSEE-AOP, THE NOTICE DATED 12.3.2003 IS ONLY A NOTICE U/S. 158BD R/W S. 158BC OF THE 4 ACT. THE ASSESSMENT FRAMED UNDER CHAPTER XIV-B ON RECOUR SE TO S. 158BD IS ONLY U/S. S. 158BC, EVEN AS PROVIDED FOR S. 158BD ITSELF . THAT IS, THE MENTION OF `SEC. 158BC ON THE NOTICE IS NOT INCORRECT AS THE NOTICE IS IN FACT FO R FRAMING AN ASSESSMENT THERE-UNDER, THOUGH ISSUED WITH REFERENCE TO S. 158BD, SO THAT A MORE PROPER DESCRIPTION OF IT WOULD BE AS A NOTICE U/S. 158BC R/W S. 158 BD. AT THE MAX IMUM, IT COULD BE SAID THAT THERE HAS BEEN AN OMISSION TO WRITE `SEC. 158BD ON THE NOTIC E, WHICH CANNOT BY ANY STRETCH BE CONSIDERED AS FATAL. IT IS TRITE LAW, AS EXPLAINED BY THE APEX COURT, AS FAR BACK AS IN THE CASE OF HAZARI MAL KUTHIALA VS. ITO (1961) 41 ITR 12 (SC), THAT THE EXERCISE OF POWER BY THE AO WOULD BE REFERABLE TO A JURISDICTION THAT CONFERS VALIDITY TO IT RATHER THAN ONE WHICH RENDERS IT NUGATORY, AND THAT WHERE HE HAS TH E JURISDICTION TO ASSESS, A MERE MENTION OF A WRONG SECTION WOULD NOT VITIATE THE PR OCEEDINGS. THE STATUTE IS TO BE READ IN A MANNER THAT MAKES IT WORKABLE RATHER THAN OTHERWI SE (REFER, INTER ALIA , M.V.AHAJAN BOREWELL & CO . (1998) 230 ITR 1 (SC)). THE NOTICE IS ALSO SAVED BY S. 292B OF THE ACT, EVEN AS POINTED OUT BY THE LD. DR DURING THE HEARIN G. THERE IS NO QUESTION OF THE NOTICE ISSUED TO THE ASSESSEE BEING ONE U/S. 158BC, I.E., SOLELY, AS CONTENDED BY THE ASSESSEE; THE SAME HAVING BEEN DONE VIDE NOTICE DATED 8.3.2001; T HE PROCEEDINGS INITIATED WHEREBY CAME TO A CLOSE VIDE ORDER U/S. 158BC R/W S. 143(3) OF THE ACT DATED 27.11.2002. THE QUESTION OF THE NOTICE BEING TIME BARRED, WOULD ALS O, THEREFORE, NOT ARISE; THE SAME BEING ONLY WITH REFERENCE TO THE NOTICE U/S. 158BC (REFER : S. 158BE), WITH THE ASSESSMENT IN THE INSTANT CASE HAVING BEEN COMPLETED ON 11/3/2004, I. E., WITHIN THE TIME AVAILABLE THEREFOR UP TO 31/3/2005. THE REVENUE HAS FOLLOWED THE CORRECT PROC EDURE. FINDING THAT THE INCOME REFLECTED PER THE SEIZED MATERIAL AS BEING IN FACT QUA A DIFFERENT ASSESSEE, THE AO OF THE PERSON SEARCHED, I.E., SH. BOBAN J. SHINDE, INDIVIDUAL, CL OSED THE PROCEEDINGS ALREADY INITIATED, AND FRESH PROCEEDINGS IN THE CASE OF THE ASSESSEE, AN AOP OF THE PERSON SEARCHED ALONG WITH ANOTHER PERSON, WERE COMMENCED, BY THE ISSUE O F NOTICE THERETO, AND THE FORMER HAVING EXPIRED, ON THE ANOTHER PERSON, SH. A. RAHIM , AS WELL AS THE LRS OF THE LATE SH. BOAN J. SHINDE, AS A MEMBER/S OF THE ASSESSEE-AOP, REQUIRING FILING OF A TRUE AND CORRECT RETURN OF THE UNDISCLOSED INCOME OF THE AOP FOR THE BLOCK PERIOD ENDING 9.11.2000 THERE IS NO AMBIGUITY IN THE NOTICE, WHICH CLEARLY SPECIFIES (FROM AMONG THE DIFFERENT 5 STATUSES) THAT THE RETURN OF INCOME CALLED FOR IS O F THE AOP (REFER THE ASSESSMENT ORDER DATED 27/11/2002 IN THE CASE OF SH. SHINDE (INDIVID UAL); THE IMPUGNED ASSESSMENT ORDER; AND THE `STATEMENT OF FACTS BEFORE THE LD. CIT(A)) .THERE IS ALSO NO QUESTION OF ANY TRANSFER OF JURISDICTION, FOR S.127 TO HAVE ANY APP LICATION IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND, ACCORDINGLY, THE DECISION IN THE CASE OF SUBHAS CHANDRA BHANIRAMKA VS. CIT (SUPRA) IS NOT APPLICABLE. IN THAT CASE THE PROCEE DINGS INITIATED WERE DROPPED DUE TO THE AO NOT HAVING THE JURISDICTION TO ASSESS THE AS SESSEE, AN INDIVIDUAL, THE SUBSEQUENT NOTICE TO WHOM, BY HIS AO, REQUIRED HIM TO FILE THE RETURN OF THE COMPANY AS WELL. 3.2 AS REGARDS THE QUESTION OF `SATISFACTION, WE A RE COMPLETELY AT LOSS TO UNDERSTAND AS TO HOW THE ASSESSEE CONSIDERS ITS CASE AS COVERE D BY THE AFORE-REFERRED DECISIONS. THE PERSON SEARCHED, I.E., SHRI BOBAN JAGANNATH SHINDE, WAS SUBJECT TO SEARCH ON 9.11.2000, AND IT WAS ONLY ON THE BASIS OF MATERIALS SEIZED TH EREAT, AS WELL AS HIS STATEMENT RECORDED U/S. 131, AND THAT OF HIS WIFE U/S. 132(4), WHICH L ED TO THE AO CONCERNED COMING TO A FIRM CONCLUSION THAT THE UNDISCLOSED INCOME OF HIS BUSIN ESS, I.E., MANUFACTURE AND SALE OF GOLD ORNAMENTS ON WHOLESALE BASIS, WAS BEING CARRIED OUT JOINTLY WITH SHRI A. RAHIM, SO THAT THE INCOME OF THE SAID BUSINESS WOULD ONLY BE ASSES SABLE IN THE HANDS OF THE AOP COMPRISING THE TWO. THE EXISTENCE OF THE AOP IS NO T DISPUTED; THE LAW IN THE MATTER BEING EVEN OTHERWISE SETTLED BY THE APEX COURT, AND REITERATED BY THE HONBLE JURISDICTIONAL HIGH COURT, AS IN THE CASE OF CIT V. T.V. SURESH CHANDRAN , 121 ITR 985 (KER.). IT WAS ON THIS BASIS ALONE THAT PROCEEDING S U/S. 158BC WERE CLOSED ON SHRI BOBAN J. SHINDE, THE PERSON SEARCHED, AS A NIL DEMAND CAS E BY HIS AO ON 27.11.2002. HOW COULD THEN THE ASSESSEE PLEAD OF THERE BEING NO `SA TISFACTION BY THE AO OF THE PERSON SEARCHED OR OF THE SAME HAVING NOT BEEN RECORDED ? ON THE CONTRARY, IT IS PATENT, IN WRITING, AND MANIFEST ON RECORD . IT IS ONLY THIS SATISFACTION HELD BY THE AO OF TH E PERSON SEARCHED, I.E., OF THE UNDISCLOSED INCOME UNDER REF ERENCE BEING OF THE ASSESSEE THAT LED TO THE CLOSURE OF THE PROCEEDINGS ON THE PERSON SEARCH ED AND INITIATION OF PROCEEDINGS U/C. XIV-B IN THE ASSESSEES CASE. THE ORDER DATED 27/11 /2002 (COPY ON RECORD/PB PG. 2-6 ) ITSELF IS AMPLE TESTIMONY OF THE SAME WHAT IS IT IF NOT THE SATISFACTION BY THE CONCERNED AO? FURTHER, HOW DID, AND ON WHAT BASIS, ONE MAY ASK, T HE RELEVANT RECORDS CAME TO THE 6 ASSESSEES AO, LEADING TO THE ISSUE OF NOTICE U/S. 158BC R/W S. 158BD ON 12/3/2003 ? IN FACT, THERE IS MENTION OF THE CORRESPONDENCE EXCHAN GED BETWEEN THE AO OF THE PERSON SEARCHED, THE ADDL. COMMISSIONER, CENTRAL CIRCLE, K OTTAYAM, AND THE ASSESSEES AO IN THE LATTERS REMAND REPORT DATED 18/3/2008, REFERRE D TO AND REPRODUCED AT PARA 4.5 OF THE IMPUGNED ORDER. THE HONBLE JURISDICTIONAL HIGH COU RT IN THE CASE OF CIT VS PANCHAJANYAM MANAGEMENT AGENCIES AND SERVICES (2011) 239 CTR (KER.) 424 IS SQUARELY ON THE POINT, FURTHER CLARIFYING THE LAW I N THE MATTER. IT HAS, THEREBY, REVERSED THE DECISION BY THE TRIBUNAL, WHICH STANDS RELIED U PON BY IT IN THE CASE OF SOUDHA GAFOOR VS. ACIT (IN IT(SS)A NOS. 113 & 135/COCH/2004 DATED 9.5.200 8), BEING RELIED UPON BY THE ASSESSEE (PB PG. 7 ). THE SAID DECISION BY THE HONBLE JURISDICTIONAL HIGH COURT STANDS RENDERED AFTER CONSIDERING THE DECISION OF THE APEX COURT IN THE CASE OF MANISH MAHESWARI VS.CIT , 289 ITR 341 (SC). IT STANDS ACCEPTED THEREIN THA T S. 158BD IS ONLY AN ENABLING PROVISION FOR ASSESSMENT OF INCOME (OF THE PERSON OTHER THAN THE PERSON SEARCHED) INFERABLE FROM THE MATERIALS OR INFORMATI ON SEIZED OR FOUND AS A RESULT OF SEARCH. THERE IS NO REQUIREMENT UNDER THE ACT, EIT HER U/S. 132 OR U/S. 158 BD, FOR THE AO TO RECORD HIS SATISFACTION IN WRITING. WHENEVER TH E LEGISLATURE SO INTENDED, IT MADE THE REQUIREMENT EXPLICIT, AS IN THE CASE OF S. 148(2). THE SATISFACTION IS ONLY FOR THE PURPOSE OF TRANSFER OF THE FILES. THAT THE SATISFACTION HAS TO BE A PRIMA FACIE ONE, THOUGH IN THE PRESENT CASE IT IS EXPLICIT, IS EVEN OTHERWISE TRIT E LAW, AS EXPLAINED PER A NUMBER OF DECISIONS, AS IN THE CASE OF RUSHIL INDUSTRIES LTD. V. HARISH PRAKASH , 251 ITR 609 (GUJ.); PRIYA BLUE INDUSTRIES (P.) LTD. V. CIT (JT.) , 251 ITR 615 (GUJ.); HARVEY HEART HOSPITALS LTD. V. CIT (ASSTT.) , 130 TTJ (CHENNAI) 700. THE ISSUE AS REGARDS `SATISFACTION HAS BEEN, AND AGAIN AFTER CONSIDERING THE DECISION OF THE APEX COURT IN THE CASE OF MANISH MAHESWAR I (SUPRA), AS WELL AS IN THE CASE OF MANOJ AGGARWAL VS. CIT (SUPRA), STANDS CONSIDERED BY THE BANGALORE BENCH OF THE TRIBUNAL IN THE CASE OF SUBHAN JAVEED VS. CIT (ASST.) , 122 ITD 307 (BANG.). WHEN THE SATISFACTION OF THE AO HAVING JURISDICTION OVER THE PERSON RAIDED WAS CLEARLY INFERABLE FROM THE RECORDS, INCLUDING THE ASSESSMENT ORDER U/ S. 158BC AND OTHER RELEVANT DOCUMENTS, IT COULD DEFINITELY BE SAID THAT HE HELD THE REQUISITE SATISFACTION, SO THAT THERE WAS, ON A TRANSFER OF THE FILES/RECORD TO THE AO OF THE ASSESSEE, A SUFFICIENT COMPLIANCE TO 7 ASSUME JURISDICTION U/S. 158BD. THE FACTS IN THE I NSTANT CASE ARE ALSO SELF-SPEAKING. ASSESSMENT U/S. 158BC, WHICH WAS INITIATED ON SH. B OBAN J. SHINDE IN HIS INDIVIDUAL CAPACITY WAS CLOSED ONLY ON THE BASIS OF THE FINDIN G THAT THE UNDISCLOSED INCOME WAS EARNED FROM HIS JOINT BUSINESS WITH SHRI A.RAHIM AN D, CONSEQUENTLY, WAS TO BE ASSESSED IN THE STATUS OF AN AOP COMPRISING THE TWO, I.E., T HE PRESENT ASSESSEE (PB PG. 6 ). 3.3 WE, THEREFORE, FIND NO MERIT IN THE ASSESSEES LEGAL OBJECTIONS. WE DECIDE ACCORDINGLY. 4. THE NEXT GRIEVANCE RAISED BY THE ASSESSEE I S IN RELATION TO THE QUANTUM, STATING IT TO BE AN AD-HOC ESTIMATE, AND NOT BASED ON THE SEIZED MATERIALS. IN THIS REGARD, WE FIND THE REVENUES CONSISTENT STAND, BASED ON THE SEIZED MAT ERIAL, AS WELL AS THE STATEMENT OF SH. BOBAN J. SHINDE, PARTICULARLY ANSWERS TO Q. NOS. 9 TO 14 OF HIS STATEMENT RECORDED U/S. 131 ON 20.11.2000 (REFERRED TO IN THE SOF), IS OF A N EARNING AT AN AVERAGE OF ` 60,000/- PER MONTH DURING THE PERIOD JUNE, 1998 TO JANUARY, 1999, I.E., THE PERIOD FOR WHICH THE DETAILS WERE AVAILABLE. ACCORDINGLY, IT IS NOT UNDE RSTOOD AS TO HOW THE QUANTUM IS BEING IMPUGNED BY THE ASSESSEE. THE ESTIMATE PER SE IS NOT PRECLUDED IN THE BLOCK ASSESSMENT, BUT ONLY THAT THE SAME HAS TO BE BASED ON MATERIALS OR INFORMATION AVAILABLE WITH THE AO IN RELATION TO EVIDENCE FOUND IN SEARCH OR RELATABL E THERETO. THE SEIZED MATERIALS REFERRED TO AT PARA 2 ABOVE, AS WELL AS THE STATEMENTS U/S. 132(4) AND S. 131, ARE ONLY EVIDENCE FOUND AS A RESULT OF SEARCH. THIS IS AGAIN A SUBJEC T MATTER OF SETTLED LAW, FOR WHICH WE MAY REFER TO SOME DECISIONS, AS: HOTEL KUMAR PALACE VS. CIT , 283 ITR 110 (P&H); RAJNIK AND CO. VS. CIT (ASSISTANT) , 251 ITR 651 (A.P.); CIT VS. RAJENDAR PRASAD GUPTA , 248 ITR 350 (RAJ.); NAPAR DRUGS (P.) LTD. V. CIT (DY.) (2006) 98 ITD 285 (DEL.)( TM). FURTHER ON, BOTH DURING THE PROCEEDINGS U /S. 158BC, AS INITIATED ON THE PERSON SEARCHED, AS WELL AS DURING THE CURRENT PROCEEDINGS , THE ASSESSEE WAS CONFRONTED WITH THE PROPOSED ADDITION (REFER PARA 6 OF THE ASSESSMENT O RDER). THE ASSESSEES ONLY EXPLANATION, WE FIND, BESIDES FINANCIAL HARDSHIP, IS THAT SHRI A .RAHIM HAVING RETURNED INCOME FOR A.Y. 1999-2000 IN RESPONSE TO NOTICE ISSUED TO HIM BY TH E INVESTIGATION WING OF THE DEPARTMENT, TAXING THE SAME IN THE ASSESSEES HANDS WOULD AMOUNT TO DOUBLE TAXATION. IN 8 FACT, BEFORE THE LD. CIT(A) IT WAS ALSO AGITATED, A ND WHICH ALSO FOUND HER FAVOUR, THAT SHRI A.RAHIM HAVING BEEN ASSESSED ON HIS SHARE OF INCOME FROM THE JOINT BUSINESS IN HIS INDIVIDUAL CAPACITY, THE REVENUE COULD NOT ADOPT A DIFFERENT STAND, SO THAT SHRI BOBAN JAGANNATH SHINDE COULD ONLY BE ASSESSED IN RESPECT OF HIS SHARE, AND IN THE INDIVIDUAL CAPACITY ONLY. WE ARE NOT IMPRESSED WITH THE ASSES SEES STAND. AN INCOME CAN ONLY BE ASSESSED IN THE RIGHT HANDS, AND ITS BEING TAXED IN THE HANDS OF THE OTHER, EVEN IF SO; IT BEING NOWHERE PROVED WITH ANY MATERIAL ON RECORD TH AT SHRI A.RAHIM HAD RETURNED ANY PART OF HIS SHARE OF INCOME FROM THE SAID JOINT BUS INESS, COULD NOT BE A GROUND FOR NOT ASSESSING THE SAME IN THE HANDS OF THE RIGHT PERSON . THIS IS TRITE LAW [REFER: I.T.O. VS. CH. ATCHAIAH (1996) 218 ITR 239 (SC)]. IN FACT, THE ARGUMENT IT SELF PROVES THE REVENUES CASE OF THE TWO BEING IN JOINT BUSINESS, WITH SH. A . RAHIM ADMITTING TO HIS SHARE IN THE INCOME THEREFROM, AND WHICH WE FIND TO BE RATHER FO R A HIGHER SUM, BOTH FOR AY 198-99 & AY 199-2000. FURTHER, IF AND TO THE EXTENT RETURN ED, THE PROPER RECOURSE AVAILABLE FOR SHRI A. RAHIM WOULD BE TO SEEK A MODIFICATION OF HI S ASSESSMENT BY RECALLING HIS ASSESSMENT OF THE SAID SHARE, HAVING BEEN BROUGHT T O TAX IN THE CASE OF THE AOP. IN FACT, THE INSTANT ASSESSMENT IS U/S. 144, I.E., A BEST JUDGEMENT ASSESSMENT; THE ASSESSEE HAVING NOT FILED THE RETURN OF UNDISCLOSED INCOME. THE SAME THOUGH HAS BEEN FRAMED FOLLOWING THE PRINCIPLES OF NATURAL JUSTICE, AND THE ASSESSEE GRANTED OPPORTUNITY OF BEING HEARD IN THE MATTER, PRIOR TO BEING ASSESS ED ON THE BASIS OF THE MATERIALS GATHERED AND AVAILABLE WITH THE AO. THE LD. CIT(A) HERSELF H AS REJECTED THE ASSESSEES GROUND IN ITS RESPECT, STATING THAT THE AO HAD RESORTED TO TH E PROVISION OF S. 144 ONLY ON ACCOUNT OF NON-COOPERATION BY THE ASSESSEE. THE ASSESSMENT U/S . 144 IS UNDER THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE, JUST AND VALID. THIS WOU LD MEET THE ASSESSEES RELIANCE ON THE DECISION IN THE CASE OF T.C.N. MENON VS. CIT , 96 ITR 148 (KER.). SO, HOWEVER, WE FIND, ON THE BASIS OF THE REMAND REPORT DATED 18/3/2008, THAT THE SH. SHINDE, PER HIS STATEMENT DATED 20/11/2000, HAS CLEARLY STATED THAT HIS JOINT BUSINESS (WITH SH. A. RAHIM) CONTINUED UP TO 15.1.1999. ACC ORDINGLY, THE QUANTIFICATION OF THE UNDISCLOSED INCOME COULD NOT EXTEND UP TO JANUARY E ND, AS MADE BY THE AO; THE REVENUE HAVING NOT CONTESTED THE SAME, RATHER BASING ITS CA SE THEREON. THE ASSESSEE GETS PART RELIEF ON QUANTUM. WE DECIDE ACCORDINGLY. 9 5. IN THE RESULT, THE REVENUES APPEAL IS PARTLY ALLOWED. SD/- SD/ - (N.VIJAYAKUMARAN) (SANJAY ARORA) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: ERNAKULAM DATED: 24TH AUGUST, 2011 GJ COPY TO: 1. M/S. BOBAN JAGANNATH SHINDE & A.RAHIM, PALAKULAM VELIYIL, ASHRAMAM WARD, ALAPPUZHA. 2. THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE-1, ALAPPUZHA. 3. THE COMMISSIONER OF INCOME-TAX (APPEALS)-IV, KOC HI. 4. THE COMMISSIONER OF INCOME-TAX, KOTTAYAM. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE .