Sri Kishan Chand Lala, Kolkata V. D.C.I.T Cir - 51,kolkata, Kolkata

ITSSA 40/KOL/2013

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 0826 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 4 month(s) 2 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 27-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 25-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A DHIR KR BAR
• Assessee Lawyers: S L KOCHAR
• Keywords: Opportunity of being heard; Block assessment; Documents seized
• Section: 132

Judgement Text

I.T. (SS) A. NO . 40 / KOL ./20 1 3 BLOCK PERIOD : 01.04.1987 TO 05.12.1997 PAGE 1 OF 7 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA B BENCH, KOLKATA BEFORE SHRI P.K. BANSAL , ACCOUNTANT MEMBER AND SHRI MAHAVIR SINGH , JUDICIAL MEMBER I.T. (SS) A. NO. 40 / KOL / 20 1 3 BLOCK PERIOD : 01.04.1987 TO 05.12.1997 SRI KISHAN CHAND LALA,.. ........ ... ................ ........ . APPELLANT C/O. S.L. KOCHAR, ADVOCATE, 86, CANNING STR E ET, KOLKATA - 700 001 [PAN : A BVPL 9079 J ] - VS. - DEPUTY COMMISSIONER OF INCOME TAX, .. ....... ..... . RESPONDE NT CIRCLE - 51, KOLKATA, UTTARAPAN COMPLEX, ULTADANGA, KOLKAT A - 700 054 APPEARANCES BY: SHRI S .L. KOCHAR , ADVOCATE AND SHRI ANIL KOCHAR, ADVOCATE , FOR THE ASSESSEE SHRI A DHIR KR. BAR , CIT, D.R., FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : JULY 02 , 2 01 5 DATE OF PRONOUNCING THE ORDER : JU LY 27 , 201 5 O R D E R PER P.K. BANSAL : THIS A PPEAL HA S BEEN FILED BY THE ASSESSE E AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - XXXII , KOLKATA D ATED 0 2 . 0 1 .20 1 3 FOR THE BLOCK PERIOD 01.04.1987 TO 05.12.1997 BY TAKING THE FOLLOWING EFFECTIVE GROUNDS OF APPE AL: - ( 1 ) FOR THAT THE CIT(A) OUGHT TO HAVE ACCEPTED THE CONTENTION OF THE APPELLANT THAT THE DETERMINATION OF UNDISCLOSED INCOME OF THE APPELLANT FOR BLOCK ASSESSMENT UNDER CHAPTER XIV - B WAS TO BE WITH REFERENCE TO PAPERS/DOCUMENTS SEIZED U/S 132 AND EVIDENCES RELATED THERETO AND IN THAT VIEWS OF THE MATTER THE ESTIMATION OF INCOME FOR VARIOUS YEARS OF BLOCK PERIOD AS MADE BY THE AO WAS TOTALLY UNCALLED FOR. ( 2 ) FOR THAT THE CIT(A) OUGHT TO HAVE APPRECIATED THAT THE HON BLE TRIBUNAL DID NOT CONFIRM THE WORKING OF I.T. (SS) A. NO . 40 / KOL ./20 1 3 BLOCK PERIOD : 01.04.1987 TO 05.12.1997 PAGE 2 OF 7 THE UNDISCLOSED INCOME AS DETERMINED BY THE CIT(A) AND THAT WHEN THE APPELLANT HAD SPECIFICALLY EXPLAINED THE RELEVANT PROVISIONS OF CHAPTER XIV - B, THE DETERMINATION OF UNDISCLOSED INCOME OUGHT TO HAVE BEEN AS PER THE PROVISIONS CONTAINED IN CHAPTER XIV - B OF THE INCOME TAX ACT, 1961. ( 3 ) FOR THAT THE CIT(A) FAILED TO TAKE NOTE OF VARIOUS EXPLANATIONS FILED AND SUBMISSIONS MADE BEFORE HIM AND OUGHT NOT TO HAVE PROCEEDED IN ARBITRARY MANNER IN CONFIRMING THE DETERMINATION OF UNDISCLOSED INCOME AS MADE BY THE AO. ( 4 ) FOR THAT THE ORDER OF THE CIT(A) IS PERVERSE AND AGAINST THE SPIRIT OF THE PROVISIONS FOR DETERMINATION OF UNDISCLOSED INCOME. 2. BRIEF FACTS OF THE CASE ARE THAT THERE HAS BEEN A SEARCH IN THE CASE OF THE ASSESSEE ON 05.12.1997. RETURN OF INCOME FOR TH E BLOCK PERIOD WAS NOT FILED. ASSESSMENT UNDER SECTION 158BC (C) WAS MADE FOR THE BLOCK PERIOD 1989 - 90 TO 1997 - 98 ON 31.12.1999 ON THE BASIS OF THE SEIZED PAPERS. THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(APPEALS) AND THE CIT(APPEALS) DIRECTED THE ASSESSIN G OFFICER TO DECIDE THE MATTER AFRESH. ACCORDINGLY, THE FRESH ASSESSMENT WAS MADE WITH AN INCOME OF RS.20,54,500/ - ON 27.03.2002. AGAIN THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(APPEALS). THE CIT(APPEALS) VIDE HIS ORDER DATED 15.01.2003 DISMISSED THE COND ONATION APPLICATION OF THE ASSESSEE IN FILING THE APPEAL AND ON THAT BASIS DISMISSED THE APPEAL. THE ASSESSEE WENT IN APPEAL BEFORE THE ITAT. THE ITAT VIDE ITS ORDER DATED 11.05.2004 IN ITA NO. 159/KOL/2003 CONDONED THE DELAY OF FILING THE APPEAL BEFORE TH E CIT(APPEALS). THE CIT(APPEALS) CALLED FOR THE REMAND REPORT OF THE ASSESSING OFFICER ON THE ISSUE RAISED BY THE ASSESSEE TO GIVE FRESH OPPORTUNITY OF HEARING TO THE ASSESSEE. AS THE ASSESEE FAILED TO SUBMIT THE DETAILS, THE ASSESSING OFFICER RECONFIRMED THE ORDER PASSED BY HIM EARLIER. THE CIT(APPEALS) ALSO CONFIRMED THE ACTION OF THE ASSESSING OFFICER. THE ASSESSEE AGAIN WENT IN APPEAL BEFORE THE INCOME TAX APPELLATE T RIBUNAL IN ITA NO. 54/KOL/2008. HON BLE ITAT VIDE ITS ORDER DATED 17.08.2009 SET ASIDE THE ASSESSMENT ORDER AND REFERRED THE MATTER I.T. (SS) A. NO . 40 / KOL ./20 1 3 BLOCK PERIOD : 01.04.1987 TO 05.12.1997 PAGE 3 OF 7 BACK TO THE FILE OF ASSESSING OFFICER TO DECIDE THE CASE AFRESH AS PER THE LAW AFTER TAKING INTO CONSIDERATION ALL THE DOCUMENTS AVAILABLE ON RECORD AND AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE REVENUE WENT IN APPEAL BEFORE THE HON BLE CALCUTTA HIGH COURT. HON BLE HIGH COURT IN INCOME TAX APPEAL NO. 117/KOL OF 2010 IN G.A. NO. 1678 OF 2010 DISMISSED THE APPEAL AND DIRECTED THAT THERE IS NO REASON TO INTERFERE IN THE ORDER PASSED BY THE TRIBUNAL. THE ASSESSING OFFICER AGAIN COMPUTED THE UNDISCLOSED INCOME AS PER THE ORDER DATED 27.03.2002. THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(APPEALS), WHO CONFIRMED THE ORDER OF THE ASSESSING OFFICER. 3 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME . WE NOTED THAT THIS IS THE THIRD ROUND OF APPEAL BEFORE THE TRIBUNAL. THE TRIBUNAL HAS SET ASIDE THE EARLIER ASSESSMENT ORDER VIDE ITS ORDER DATED 17.08.2009 IN IT(SS)A. NO. 54/KOL/2008 BY OBSERVING AS UNDER: - AFTER HEARING T HE RIVAL SUBMISSIONS AND ON CAREFUL PERUSAL OF THE MATERIALS AVAILABLE ON RECORD, WE FIND FORCE IN THE ARGUMENTS OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE AO HAS NOT CONSIDERED THE MATERIAL AVAILABLE WITH HIM WHICH WERE PLACED BY THE ASSESSEE AT PAGE NO S. 34 TO 78 OF THE PAPER BOOK CONTAINING (I) COPIES OF THE ACKNOWLEDGMENT IN PROOF OF FILING THE RETURNS FOR THE ASSESSMENT YEARS 1989 - 90 TO 1995 - 96 AND 1997 - 98 ALONG WITH THE COPIES OF PROFIT AND LOSS A/C AND THE BALANCE SHEET AND COPIES OF THE TAX AUDIT REPORT, AS REQUIRED BY THE I.T. ACT WHICH WAS FILED PRIOR TO THE DATE OF SEARCH, I.E. BEFORE 05.12.1997 AND (II) COPIES OF THE 143(1) ORDERS IN RESPECT OF ASSESSMENT YEARS 1990 - 91 TO 1992 - 93. SINCE THESE MATERIALS ARE QUITE VITAL IN DECIDING THE UNDISCLOSE D INCOME OF THE ASSESSEE, WE ONCE AGAIN SET ASIDE T HE MATTER TO THE FILE OF THE AO TO DECIDE THE CASE AFRESH, AS PER LAW, AFTER TAKING INTO CONSIDERATION OF THE ABOVE DOCUMENTS WHICH WERE AVAILABLE IN THE RECORDS OF THE REVENUE AUTHORITIES, AFTER GIVING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE . 4. FROM THE DIRECTION OF THE TRIBUNAL, IT IS APPARENT THAT THE TRIBUNAL WAS OF THE VIEW THAT THE ASSESSING OFFICER WHILE FRAMING THE ASSESSMENT NOT CONSIDERED THE MATERIAL AVAILABLE WITH HIM, WHICH W AS PLACED BY THE ASSESSEE BEFORE THE TRIBUNAL AT PAGES 34 TO 78 OF THE PAPER BOOK , WHICH I.T. (SS) A. NO . 40 / KOL ./20 1 3 BLOCK PERIOD : 01.04.1987 TO 05.12.1997 PAGE 4 OF 7 CONTAINS THE COPIES OF ACKNOWLEDGMENT IN PROOF OF FILING THE RETURNS FOR THE ASSESSMENT YEARS 1989 - 90 TO 1995 - 96 AND 1997 - 98 ALONG WITH THE COPIES OF PROFIT AND LOSS A /C AND THE BALANCE SHEET AND COPIES OF THE TAX AUDIT REPORT . COPIES OF THE PROFIT & LOSS A/C, BALANCE - SHEET AND TAX AUDIT REPORT WERE FILED BEFORE THE ASSESSING OFFICER PRIOR TO THE DATE OF SEARCH I.E. 05.12.1997. HON BLE TRIBUNAL SET ASIDE THE MATTER TO T HE FILE OF THE ASSESSING OFFICER TO DECIDE THE CASE AFRESH AS PER THE LAW AND AFTER TAKING INTO CONSIDERATION ALL THE DOCUMENTS WHICH WERE AVAILABLE IN THE RECORD OF THE REVENUE AUTHORITIES AND AFTER GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE. WE NOTED THAT T HE ASSESSING OFFICER INITIATED OF DECIDING THE ASSESSMENT ORDER OR COMPUTING THE UNDISCLOSED INCOME OF THE ASSESSEE AS PER THE DIRECTION OF THE TRIBUNAL ON THE BASIS OF THE MATERIAL AVAILABLE ON RECORD AS HAS ALREADY BEEN FILED BY THE ASSESSEE RECOMP UTED THE UNDISCLOSED INCOME ON THE BASIS OF THE EARLIER ASSESSMENT ORDER DATED 27.03.20 0 2 BY OBSERVING AS UNDER: - DURING THE COURSE OF HEARING THE ASSESSEE ONLY PRODUCED XEROX COPY OF RETURN ACK. RECEIPTS AND COPY OF INTIMATION U/S 143(1)(A) ONLY. HENCE, T OTAL UNDISCLOSED INCOME IS COMPUTED AS PER ORDER DATED 27.03.2002. AS PER PROVISION OF SECTION 158BC(C) THE TOTAL INCOME IS COMPUTED AS REDUCED BY THE AGGREGATE OF TOTAL INCOME OR AS THE CASE MAY BE, AS INCREASED BY AGGREGATE OF LOSSES OF SUCH PREVIOUS YEA R DETERMINED ON THE BASIS OF INCOME DISCLOSED IN THE RETURNS FILED: ASSESSMENT YEAR INCOME INCLUDING UNDISCLOSED INCOME RETURN/ASSESSED INCOME UNDISCLOSED INCOME 1988 - 89 1,95,000/ - NO COPY OF RETURN PRODUCED 1,95,000/ - 1989 - 90 1,95,000/ - 19,000/ - 1,76,00 0/ - 1990 - 91 1,95,000/ - 18,700/ - 1,76,300/ - 1991 - 92 1,95,000/ - 22,750/ - 1,72,250/ - 1992 - 93 1,95,000/ - 1,200/ - 1,93,800/ - 1993 - 94 1,95,000/ - 8,650/ - 1,86,350/ - 1994 - 95 1,95,000/ - 25,500/ - 1,69,500/ - 1995 - 96 1,95,000/ - 20,850/ - 1,74,150/ - 1996 - 97 1,95, 000/ - NO COPY OF RETURN WAS PRODUCED EXCEPT COMPUTATION 1,95,000/ - 1997 - 98 1,95,000/ - 50,609/ - 144,391/ - I.T. (SS) A. NO . 40 / KOL ./20 1 3 BLOCK PERIOD : 01.04.1987 TO 05.12.1997 PAGE 5 OF 7 1998 - 99 1,95,000/ - 56,720/ - 1,38,280/ - 19,21,021/ - CALCULATION : TOTAL UNDISCLOSED INCOME..........................................RS.19,21 ,021/ - TAX @ 60%...................................................................RS.11,52,600/ - ADD. INTEREST U/S 158BFA(I) @ 2%...........................RS. 2,07,468/ - FOR 9 MONTHS BALANCE PAYABLE............................................... ..........RS.13,60,068/ - PENALTY PROCEEDINGS U/S 158BFA(2) IS INITIATED SEPARATELY. ASSESSED U/S 260A/254/158BC(C) OF THE I.T. ACT, 1961. ISSUED DEMAND NOTICE AND COPY OF THE ORDER TO THE ASSESSEE . 5. THE AFORESAID FINDING OF THE ASSESSING OFFICER, IN O UR OPINION, CLEARLY DENOTES THAT THE UNDISCLOSED INCOME HAS NOT BEEN DECIDED BY THE ASSESSING OFFICER ON THE BASIS OF THE MATERIAL AVAILABLE ON RECORD BUT HAS SIMPLY BEEN DETERMINED IN THE ASSESSMENT ORDER DATED 27.03.2002. THE ABOVE AS SESSMENT ORDER CLEAR LY SPEAKS THAT THE ASSESSING OFFICER HAS NOT ASKED FOR ANY OTHER DETAILED DOCUMENTS FROM THE ASSESSEE TO PROVE HIS CASE. EVEN THE UNDISCLOSED INCOME HAS NOT BEEN DETERMINED ON THE BASIS OF THE MATERIAL AVAILABLE ON RECORD AS HAS BEEN DIRECTED BY THE ITAT V IDE ORDER DATED 17.08.2009. THE ASSESSING OFFICER SIMPLY COMPUTED IN THE EARLIER ASSESSMENT ORDER. IN OUR OPINION, THE ASSESSING OFFICER WAS BOUND TO FOLLOW THE DIRECTIONS OF THE TRIBUNAL AND RE - DETERMINE THE UNDISCLOSED INCOME ON THE BASIS OF THE EVIDENCE S AS HAS BEEN DIRECTED BY THE TRIBUNAL TO LOOK INTO BY THE ASSESSING OFFICER. THE ASSESSING OFFICER INSTEAD OF DISCUSSING THESE DOCUMENTS SIMPLY REPRODUCED THE UNDISCLOSED INCOME AS HAS BEEN ADDED IN THE EARLIER ASSESSMENT. THIS CLEARLY DENOTES THAT THE AS SESSMENT ORDER HAS BEEN PASSED IN A MECHANICAL MANNER WITHOUT APPLYING HIS MIND AND WITHOUT FOLLOWING THE DIRECTIONS OF THIS TRIBUNAL. NOT FOLLOWING THE DIRECTIONS OF THE TRIBUNAL IS CLEARLY DEROGATORY AND CONTRARY TO THE JUDICIAL DISCIPLINE. THE DECISION OF THE TRIBUNAL WAS BINDING ON THE ASSESSING OFFICER THEREFORE, WE ARE OF THE FIRM VIEW THAT THE ASSESSING OFFICER DOES NOT HAVE ANY MATERIAL ON THE BASIS OF WHICH THE INCOME DETERMINED BY HIM CAN BE REGARDED TO BE THE UNDISCLOSED INCOME OF THE ASSESSEE. N O SEIZED INCRIMINATING MATERIAL OR DOCUMENT FOUND I.T. (SS) A. NO . 40 / KOL ./20 1 3 BLOCK PERIOD : 01.04.1987 TO 05.12.1997 PAGE 6 OF 7 DURING THE YEAR WAS REFERRED TO BY THE ASSESSING OFFICER WHICH MAY SPEAK OF THAT THE ASSESSEE HAS EARNED THE UNDISCLOSED INCOME. NO ADDITION ON ESTIMATE BASIS CAN BE MADE IN BLOCK ASSESSMENT. IN THE BLOCK A SSESSMENT, THE ASSESSING OFFICER IS BOUND TO COMPUTE THE UNDISCLOSED INCOME WHICH SHALL BE THE AGGREGATE OF THE TOTAL INCOME OF THE PREVIOUS YEAR FALLING WITH IN THE BLOCK PERIOD COMPUTED , IN ACCORDANCE WITH THE PROVISIONS OF CHAPTER - XIV - B , O N THE BASIS OF THE EVIDENCE FOUND AS A RESULT OF SEARCH OR REQUISITION OF BOOKS OF ACCOUNT OR OTHER DOCUMENTS AND SUCH OTHER MATERIAL S OR INFORMATION AS ARE AVAILABLE WITH THE ASSESSING OFFICER AND RELATABLE TO SUCH EVIDENCE , AS UNDISCLOSED INCOME HAS BEEN DEFINED UNDER SECTION 158B B WHICH INCLUDES ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR ANY INCOME BASED ON ANY ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS , WHERE SUCH MONEY, BULLION, JEWELLERY, VALUABLE ARTICLE , THING ENTR Y I N THE BOOKS 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 THE PURPOSE S OF THIS ACT , OR ANY EXPENSE, DEDUCTION OR ALLOWANCE CLAIMED UNDER THIS ACT WHICH IS FOUND TO BE FALSE. THE ASSESSING OFFICER MERELY ESTIMATED THE INCOME AS HAS BEEN EARLIER ESTIMATED IN THE EARLIER ASSESSMENT ORDER BUT HAS NOT REFERRED TO ANY MATERIAL OR INFORMATION WHICH WAS AVAILABLE WITH HIM OR THE EVIDENCES OR DOCUMENTS FOUND DURING T HE COURSE OF THE SEARCH. WE, THEREFORE, DELETE THE ADDITION MADE IN RESPECT OF THE UNDISCLOSED INCOME, AS IN OUR OPINION, THE ADDITION MADE BY THE ASSESSING OFFICER ON ESTIMATE BASIS CANNOT BE REGARDED TO BE THE UNDISCLOSED INCOME WITHIN THE DEFINITION GIV EN UNDER SECTION 158BB OF THE INCOME TAX ACT, 1961. WE, THEREFORE, SET ASIDE THE ORDER OF THE CIT(APPEALS). 6 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON JU LY 27 , 201 5 . SD/ - SD/ - MAHAVIR SINGH P.K. BANSAL ( JUDICIAL MEMBER) ( ACCOUNTANT MEMBER) KOLKATA, THE 27 TH D AY OF JU LY , 201 5 I.T. (SS) A. NO . 40 / KOL ./20 1 3 BLOCK PERIOD : 01.04.1987 TO 05.12.1997 PAGE 7 OF 7 COPIES TO : (1) SRI KISHAN CHAND LALA, C/O. S.L. KOCHAR, ADVOCATE, 86, CANNING STREET, KOLKATA - 700 001 (2) DEPU TY COMMISSIONER OF INCOME TAX, CIRCLE - 51, KOLKATA, UTTARAPAN COMPLEX, ULTADANGA, KOLKATA - 700 054 (3) COMMISSIONER OF INCOME - TAX (APPEALS) (4) COMMISSIONER OF INCOME TAX ( 5 ) THE DEPARTMENTAL REPRESENTATIVE ( 6 ) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA B ENCHES, KOLKATA LAHA/SR. P.S .