Shri Rajendraprasad Gupta, Indore V. The DCIT, 4(1), Indore

ITSSA 43/IND/2011

• Counselvise Citation: [2012] 121 COUNSELVISE.COM (IT) 8227 (ITAT-INDORE)
• Duration Of Justice: 11 month(s) 7 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 14-06-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2000-2001
• Appeal Filed On: 07-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DARSHAN SINGH
• Keywords: Bogus Share capital; Unexplained investment; Business income; Search and seizure; Opportunity of being heard; Source of fund
• Section: 143(3); 153A; 263; 132

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER IT(SS)A NOS.41 TO 47/IND/2011 A.YS. 1998-99 TO 2004-05 RAJENDRA PRASAD GUPTA, INDORE PAN AFBPG 1214 Q :: APPELLANT VS DCIT-4(1), INDORE :: RESPONDENT IT(SS)A NOS.48 TO 54/IND/2011 A.YS. 1998-99 TO 2004-05 SUBHASH CHANDRA GUPTA, INDORE PAN AFBPG 1215 R :: APPELLANT VS DCIT-4(1), INDORE :: RESPONDENT 2 IT(SS)A NOS.55 TO 61/IND/2011 A.YS. 1998-99 TO 2004-05 SMT. VANDANA GUPTA, INDORE PAN AFBPG 1231 R :: APPELLANT VS DCIT-4(1), INDORE :: RESPONDENT ASSESSEES BY SHRI PRAKASH JAIN, CA REVENUE BY SHRI D A R S H A N S I N G H , CIT D R DATE OF HEARING 25.05.2012 DATE OF PRONOUNCEMENT 1 4 . 06.2012 O R D E R PER JOGINDER SINGH, JUDICIAL MEMBER THIS BUNCH OF TWENTYONE APPEALS IS BY DIFFERENT ASSESSEES. DURING HEARING, THE LD. COUNSEL FOR THE ASS ESSEE DID NOT PRESS GROUNDS 1 AND 2 AND THE SAME ARE, THEREFO RE, DISMISSED AS NOT PRESSED. THE ONLY GROUNDS PRESSED AR E GROUND NOS. 3 AND 4 WHICH ARE7 AS UNDER :- 3 3. THAT THE ORDER UNDER APPEAL LOUDLY SPEAKS THAT LD. CIT(A) IS DETERMINED TO ENHANCE THE INCOME BUT FOR THAT HE DID NOT GIVE A REASONABLE OPPORTUNITY TO THE ASSESSEE OF SHOWING CAUSE AGAINST ENHANCEMENT U/S U/S 251(2) OF THE IT ACT. HE FOLLOWED FAULTY PROCEDURE OF DIRECTING ENQUIRIES TO BE MADE ON SEVERAL POINTS BY THE A.O. FOR THE PURPOSE OF ENHANCEMENT AND THEREBY PUT THE ASSESSEE TO UNNECESSARY HARASSMENT AND LITIGATION, WHEN THE CASES ARE AS OLD AS RELATE TO THE ASSESSMENT YEARS 1998-99 TO 2004-05 (ACCOUNTING PERIOD 1997-98 TO 2003-04) AND THE ASSESSMENT ORDER HAS BEEN PASSED AFTER PRIOR APPROVAL OF THE JOINT COMMISSIONER OF INCOME TAX. 4. THAT THE IMPUGNED REMAND ORDER CANNOT BE TREATED AS NOTICE U/S 251(2) OF THE ACT. 2. DURING HEARING OF THESE APPEALS, WE HAVE HEARD SHRI PRAKASH JAIN, LD. COUNSEL FOR THE ASSESSEE AND SHRI DARSHAN SINGH, LEARNED CIT DR. THE CRUX OF ARGUMENTS ON BEHALF OF THE ASSESSEE IS THAT SEARCH AND SEIZURE OPERAT ION U/S 132 OF THE ACT WAS CARRIED OUT AT THE RESIDENTIAL PREMISES OF SHRI SUBHASH CHANDRA GUPTA, SHRI RAJENDRA PRASAD GUPTA AND THE SEARCH WARRANTS WERE ISSUED/EXECUTED IN THE NAME OF SHRI SUBHASH CHANDRA 4 GUPTA AND SHRI RAJENDRA PRASAD GUPTA, WHEREAS NO SEARCH WARRANT WAS ISSUED IN THE NAME OF SMT. VANDANA GUPTA. IT WAS POINTED OUT THAT IN THE REMAND REPORT, THE LEARNED ASSESSING OFFICER HIMSELF HAS ADMITTED THAT NO SUCH WARRANT WAS EXECUTED UPON SMT. VANDANA GUPTA FOR WHICH OUR ATTENTION WAS INVITED TO THE COPY OF THE REMAND RE PORT, FILED IN THE PAPER BOOK. MR. JAIN FURTHER POINTED OU T THAT IDENTICAL GROUND WAS RAISED BEFORE THE LEARNED CIT(A) WHO WITHOUT DECIDING THE SAID GROUND (IN THE CASE OF SMT. VANDANA GUPTA), PASSED ORDER U/S 250(4) OF THE ACT IDENTICAL TO SHRI SUBHASH CHANDRA GUPTA AND SHRI RAJENDRA PRASAD GUPTA. IT WAS PLEADED THAT THOUGH THE LEARNED CIT(A) HAS WIDE POWERS U/S 250(4) OF THE ACT, BUT HE IS NOT EXPECTED TO EXAMINE THOSE ASPECTS WHICH HAV E ALREADY REACHED FINALITY, EVEN AT THE STAGE OF THE TRIBUN AL, THEREFORE, THE WHOLE ASSESSMENT IS NOT OPEN FOR 5 REASSESSMENT. IT WAS EXPLAINED THAT THE LEARNED ASSESSIN G OFFICER HAS ALREADY CONSIDERED THE VARIOUS MATTERS AND TH E LEARNED CIT(A) IS TRYING TO INTRODUCE NEW SOURCE OF INCOME UNDER THE GARB OF IMPUGNED ORDER AND IS EXPECTED TO CONFINE HIMSELF TO THE SUBJECT MATTER ADDRESSED IN OR IGINAL ASSESSMENT FOR WHICH THE LD. COUNSEL FOR THE ASSESSEE RELIED UPON THE DECISION IN THE CASE OF CIT VS. SHAP OORJI PAALONJI MISTRY (44 ITR 891) (SC), NARRONDAS MANORDAS; 31 ITR 909 (BOM); CIT VS. CHHAGANLAL KAILASH & COMPANY; 148 ITR 7 (MAD); CIT V. SARDARILAL & COMPANY; 251 ITR 8 64 (DEL) (FB); CIT V. UNION TYRES; 240 ITR 556 (DEL); CIT VS. ASSOCIATED GARMENTS MARKERS; 197 ITR 350 (RAJ.). THE CRUX OF ARGUMENTS IS THAT THE LEARNED CIT(A) IS TRYIN G TO USE THE REVISIONARY POWERS AVAILABLE WITH THE LEARNED ADMINISTRATIVE COMMISSIONER U/S 263 OF THE ACT BY PASSING AN ORDER U/S 250(4) OF THE ACT WHICH IS NOT 6 PERMISSIBLE AS SEPARATE JURISDICTION AND POWERS HAVE BEE N ENSHRINED IN THE INCOME TAX ACT. A PLEA WAS ALSO RAISED THAT THE LEARNED CIT(A) THROUGH THE IMPUGNED ORDER WAN TS TO ADD TO THE INCOME OF VARIOUS ASSESSEES WHOSE ASSESSMENT ORDERS HAVE TRAVELLED UPTO CIT(A) AND THE TRIBUNAL. IT WAS POINTED THAT THE TRIBUNAL HAS ALREADY DECIDED THOSE CASES, THEREFORE, THE LEARNED CIT(A) IS NOT EXPECTED TO SIT OVER THE DECISION OF THE TRIBUNAL AND HAS CLEARLY CROSSED PRINCIPLE OF JUDICIAL DISCIPLINE. OU R ATTENTION WAS INVITED TO PAGES 1 TO 8 OF THE PAPER BOOK EVIDENCING THAT THE ASSESSMENT ORDERS OF THOSE ASSESSE ES WERE EITHER QUASHED BY THE EARLIER CIT(A) OR DELETED THE ADDITION WHICH WAS CONFIRMED BY THE TRIBUNAL. THEREFOR E, IN THE IMPUGNED ORDER, THE LEARNED CIT(A) IS TRYING TO ADD THOSE ITEMS IN THE INCOME OF THE PRESENT ASSESSEES W ITHOUT APPRECIATING THE FACTS AND HE HAS NO POWER TO FIND OUT T HE 7 NEW SOURCE OF INCOME WHICH WAS NOT THE SUBJECT MATTER OF ASSESSMENT IN THE PRESENT CASES. THE CRUX OF ARGUME NTS IS THAT IN THE IMPUGNED ORDER, AN EFFORT HAS BEEN MADE INDIRECTLY TO GET THE INCOME INCLUDED OF OTHER ASSES SEE WHICH WAS NOT BEFORE HIM. MR. JAIN FURTHER CONTENDED THAT THE LEARNED FIRST APPELLATE AUTHORITY HAS NOT APPRECIATED THE SETTLED PRINCIPLE OF LAW I.E. THE THINGS WHICH CANNOT BE DONE DIRECTLY ALSO CANNOT BE DONE INDIRECTLY FOR WHI CH RELIANCE WAS PLACED IN CIT V. KELVINATOR OF INDIA LIMITE D; 256 ITR 1 (PAGE 15), RAM JETHMALANI & OTHERS V. UNION O F INDIA. IT WAS PRAYED THAT THE IMPUGNED ORDER PASSED U/ S 250(4) OF THE ACT SHOULD BE QUASHED. 2.1 ON THE OTHER HAND, THE LEARNED CIT DR, SHRI DARSHAN SINGH, DEFENDED THE IMPUGNED ORDER BY SUBMITTING TH AT THE LEARNED CIT(A) HAS WIDE POWERS AND IS EMPOWERED TO PAS S ANY ORDER UNDER THE FACTS AND CIRCUMSTANCES AVAILABLE ON 8 RECORD AND ALSO HAVING CO-TERMINUS POWERS AS THAT OF THE ASSESSING OFFICER. IT WAS FURTHER PLEADED THAT THE MOD US OPERANDI OF THE ASSESSEE AND ITS GROUP CASES WAS TO EARN UNEXPLAINED MONEY ON WHICH ASSESSMENT ORDER IS SILENT . IT WAS ALSO POINTED OUT THAT THERE WAS SOME LAND SITUATED AT DEWAS FOR RESIDENTIAL-CUM-COMMERCIAL PURPOSES, WHICH WAS PURCHASED BY THE COMPANY AND THIS FACT WAS AIRED BY IBN-7 CHANNEL ALLEGING THAT SOME POLITICAL PERSONS FAVOU RED THE ASSESSEE GROUP. IT WAS PLEADED THAT SOME UNEXPLAIN ED MONEY WAS POSSESSED BY THIS GROUP. IT WAS ALSO ASSERTE D PURSUANT TO SEARCH AT THE RESIDENCE OF ONE SHRI B.K. S INGH, AN EMPLOYEE OF SHRI SUBHASH GUPTA, CERTAIN PAPERS WERE FOUND WHICH ARE CONNECTED WITH THE ASSESSEE GROUP. A PLEA WAS ALSO RAISED THAT THIS GROUP ALSO PURCHASED LAND AT LASUDIA FOR RS.509.60 LACS AND CERTAIN DOCUMENTS WERE SEIZED FROM JOY BUILDERS AND THE LAND WAS OF THESE 9 ASSESSEES. CERTAIN OTHER LAND WAS ALSO ARGUED TO BE PURCHASED WITH SHRI MAHESHWARI AND AGRAWALJI IN BHOPAL WHERE UNEXPLAINED INVESTMENT WAS MADE ALONG WITH THE PLOTS IN ROYAL ESTATES. THE CRUX OF ARGUMENTS WAS IN DEFENCE OF THE IMPUGNED ORDERS. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUS ED THE MATERIAL AVAILABLE ON THE RECORD. FROM THE RECORD W E FIND THAT WHILE FRAMING SCRUTINY ASSESSMENT U/S 153A READ WITH SECTION 143(3) OF THE ACT, THE ASSESSING O FFICER HAD MADE DETAILED INQUIRY ON THE BASIS OF APPRAISAL REPO RT AND MADE REQUIRED ADDITIONS IN RESPECT OF INCRIMINATING DOCUMENTS FOUND DURING SEARCH. AFTER GETTING PRIOR APPROVAL OF JOINT COMMISSIONER OF INCOME TAX, HE ASSESSED/RE-ASSESSED THE INCOME FOR THE ASSESSMENT YEAR S 1998-99 TO 2004-05 UNDER CONSIDERATION. BY DIRECTIN G THE ASSESSING OFFICER TO MAKE FURTHER INQUIRIES IN THE M ATTER OF 10 INCOME ALREADY ASSESSED IN THE HANDS OF OTHER ASSESSEES RELATING TO THE PRESENT ASSESSEE, THE LEARNED CIT(A) H AS PUT THE ASSESSEE TO UNNECESSARY HARASSMENT AND LITIGATIO N, WHICH IS NOT JUST AND FAIR. WE HAVE ALSO GONE THROUGH T HE PAPER BOOK CONTAINING ASSESSMENT ORDER, ORDERS OF THE FIRST APPELLATE AUTHORITY AND OF THE TRIBUNAL IN THE CASES OF OTHER ASSESSEES WHOSE ASSESSMENTS WERE AGAIN RACKED UP BY THE CIT(A) DIRECTING THE ASSESSING OFFICER MAKE INCLUSION OF SUCH INCOME IN THE ASSESSMENTS OF THE P RESENT ASSESSEES AFTER MAKING INQUIRIES, WHICH IS NOT PERMISS IBLE UNDER THE SCHEME OF THE ACT. ON A QUERY REGARDING ALLEGATION THAT THE MEMBERS OF GUPTA FAMILY EARNED UNACCOUNTED MONEY AS DIRECTORS OF M/S SIDDHARTHA TUBES LIMITED, THE LD. COUNSEL FOR THE ASSESSEE INVITED OU R ATTENTION TO THE ORDER OF THE TRIBUNAL AVAILABLE AT PAGE S 36 TO 58 OF THE PAPER BOOK, DATED 16 TH FEBRUARY, 2009 IN THE CASE OF ACIT V. M/S. SIDDHARTH TUBES LIMITED; IT( SS) A. 11 NOS. 76 TO 79/IND/2007, WHEREIN THE APPEALS OF THE DEPARTMENT WERE DISMISSED. TO THIS ASSERTION OF THE L D. COUNSEL FOR THE ASSESSEE, NO CONTRARY DECISION WAS BRO UGHT TO OUR NOTICE BY THE LEARNED CIT DR REVERSING THE OR DER OF THE TRIBUNAL, MEANING THEREBY, AS ON DATE, THE ORDER OF THE TRIBUNAL STANDS. REGARDING THE QUERY ON CASH, JEWELLERY, SILVER UTENSILS AND STOCK, FOUND DURING SEARCH, IT WAS CLAIMED THAT THE GOLD JEWELLERY OF THE RESPECTIVE FAMI LY MEMBERS WAS DISCLOSED IN THEIR RESPECTIVE WEALTH TAX RETURNS FOR WHICH OUR ATTENTION WAS INVITED TO PAGES 7 3 TO 80 OF THE PAPER BOOK. THEREFORE, NO ADDITION WAS MADE IN THE HANDS OF THE PRESENT ASSESSEES WHILE FRAMING THE ASSESSMENT U/S 143(3) READ WITH SECTION 153A OF THE A CT. ON THE ISSUE OF BOGUS SHARE CAPITAL AND SALE OUTSIDE THE BOOKS OF ACCOUNTS, SUPPRESSION OF TURNOVER, ETC., IT WAS EXPLAINED BY THE LD. COUNSEL FOR THE ASSESSEE THAT NO DEMAND WAS PENDING AS ON DATE FROM KOLKATTA BASED 12 COMPANIES LIKE MAPLE INTERNATIONAL, BRIDHAM SUPPLIERS LIMITED; GRAVITY MARKETING; PEPSICON TRADERS AND TRANSPOWER TRADERS, ETC. OUR ATTENTION WAS INVITED TO PAGES 88 TO 220 AND 221 TO 515 EVIDENCING FILING OF R ETURNS UNDER THE COMPANIES ACT. SO FAR AS THE DEVELOPMENT OF LAND SITUATED AT DEWAS FOR RESIDENTIAL-CUM-COMMERCIAL PURPOSES, PAYMENT FOR LAND CONVERSION, EXPENDITURE F OR DEVELOPMENT AND THE ALLEGED PROFIT NOT DISCLOSED ON T HE SALE OF PLOTS, IT WAS EXPLAINED THAT THE LAND WAS PURCHASED BY M/S SAM INDUSTRIES LIMITED, INDORE, AND THE HONBLE H IGH COURT APPOINTED THE LIQUIDATOR. THE LD. COUNSEL FOR T HE ASSESSEE TRIED TO EXPLAIN THE POSITION WITH THE HELP OF PAGES 516 TO 526, 527 TO 529 AND ORDER OF THE TRIBUNAL DATED 13 TH MARCH, 2009 (PAGES 544 TO 566 OF THE PAPER BOOK) (D.C .I.T. VS. M/S VISION HOUSING FINANCE PRIVATE LIMITED (I.T.A . NOS. 261 TO 266/IND/2008) WHEREIN SIX APPEALS OF THE REVE NUE WERE DISMISSED, MEANING THEREBY, THOSE APPEALS H AVE 13 ALSO REACHED FINALITY AT LEAST AT THE LEVEL OF THE TRIB UNAL AS ON DATE AND NO CONTRARY DECISION AGAINST THE AFORESAID ORDER WAS BROUGHT TO OUR NOTICE BY THE REVENUE FROM ANY HONBLE HIGHER FORUM. IT WAS ALSO NOT THE CASE OF THE LEARNED CIT DR THAT WHILE DECIDING THE APPEALS OF OTHE R ASSESSEES, ANY DIRECTION WAS GIVEN BY THE TRIBUNAL FOR ADDING THOSE INCOME IN THE HANDS OF PRESENT ASSESSEES. WHEN NO SUCH DIRECTION WAS GIVEN BY THE TRIBUNAL AND T HE MATTER WAS DECIDED BY THE TRIBUNAL ON MERITS, THE PROP ER FORUM OF APPEAL AGAINST SUCH ORDER OF THE TRIBUNAL IS HONBLE HIGH COURT. MERELY BECAUSE THE TRIBUNAL HAS CONFIRMED THE ORDER OF THE CIT(A) DELETING THE ADDI TIONS ON MERITS, PRESENT CIT(A) IS NOT EMPOWERED TO PROPOSE ADDITION OF THOSE INCOME IN THE HANDS OF THE PRESENT ASSESSEES, MORE PARTICULARLY WHEN THE ASSESSING OFFICE R HAS CONSIDERED ALL THE RELEVANT ASPECTS WHILE FRAMING T HE SCRUTINY ASSESSMENT ORDERS OF PRESENT ASSESSEES. SUC H 14 ASSESSMENTS WERE FRAMED NOT ONLY AFTER APPLICATION OF MI ND AND MAKING PROPER INQUIRIES BUT ALSO AFTER GETTING THE DRAFT ASSESSMENT ORDERS DULY APPROVED BY THE COMPETENT AUTHORITIES. SO FAR AS PURCHASE OF 5 ACRES OF LAND OF DH AR KOTHI IS CONCERNED, IT WAS EXPLAINED THAT ONLY A POWER OF ATTORNEY TO SAFEGUARD THE PROPERTY FROM ENCROACHMENT AND TO MAINTAIN THE PROPERTY WAS ENTERED AND THIS FACT CAN BE VERIFIED FROM SUB REGISTRAR, INDORE, BY FURTHER CLAIM ING THAT NO PAYMENT WAS MADE BY THE ASSESSEE FOR THE ALLEG ED PURCHASE OF THIS PROPERTY. THE LD. COUNSEL FOR THE ASSESSEE WITH THE HELP OF PAGES 567 TO 569 OF THE PAPER BOOK, CLARIFIED HIS STAND. ON A QUERY FROM THE BENCH REGARDIN G RESERGENT INDIA BONDS, IT WAS EXPLAINED THAT MR. MOHAN ADASANI AND GURMUKH ADASANI WERE THE FAMILY FRIENDS OF GUPTA FAMILY AND FOR ITS ASSESSMENT, HE DREW SUPPORT F ROM PAGES 570 TO 586 OF THE PAPER BOOK. 15 4. ON THE QUERY REGARDING PURCHASE OF LAND AT LASUDIA BY SHRI SUBHASH GUPTA, IT WAS EXPLAINED THAT THE AGREEMENT DID NOT MATERIALIZE AND WAS CANCELLED WHICH WAS EVIDENT FROM THE STATEMENT OF SHRI MAHENDRA JAIN RECORDED DURIN G THE ASSESSMENT PROCEEDINGS FOR WHICH OUR ATTENTION WAS DRAWN TO PAGES 621 TO 625 OF THE PAPER BOOK AND FOR T HE STATEMENT OF SHRI MAHENDRA JAIN TO PAGES 626 TO 629 OF THE PAPER BOOK. REGARDING UNEXPLAINED INVESTMENT AND PAYMENT FOR PURCHASE OF LAND AT BHOPAL, IT WAS CLAIMED THAT NO PROPERTY WAS PURCHASED BY SHRI S.C. GUPTA ALONG WITH SHRI MAHESHWARI AND SHRI OM AGRAWAL WHICH CAN BE VERIFIED FROM THE OFFICE OF SUB-REGISTRAR, BHOPAL. F OR PURCHASE OF PLOTS BY SHRI SUBHASH GUPTA IN ROYAL ESTATES AND FORMATION OF JAN HIT GRAH NIRMAN COOPERATIVE HOUSING SOCIETY, IT WAS CLAIMED THAT THE ASSESSEE NEIT HER INVESTED ANY MONEY NOR DEVELOPED ANY COLONY ALONG WITH SHRI RAMESH GANGWAL, SHRI MAHESHWARI AND SHRI SUBHASH 16 JAIN IS HAVING NO RELATION WITH THE SAHKARI SOCIETY. OU R ATTENTION WAS INVITED TO PAGES 645 TO 674 OF THE PAPER BOOK. FOR ACTIVITIES OF FENNY COOPERATIVE HOUSING SO CIETY, OUR ATTENTION WAS INVITED TO PAGES 621 TO 625 AND STATEMENT AT PAGES 626 TO 629. SO FAR AS LONG TERM CAPITAL GAINS BY GUPTA FAMILIES WITH THE HELP OF CALCUTTA BASED CAS IS CONCERNED, IT WAS EXPLAINED THAT THE GUPTA FAMILY HAS NOT TAKEN ANY LONG TERM CAPITAL GAINS FOR WHICH OUR ATTENTION WAS INVITED TO INCOME TAX RETURNS AVAILABLE AT PAGES 634 TO 637, 638 TO 640 AND 641 TO 644 OF THE PAP ER BOOK. FOR THE ALLEGATION OF PURCHASE OF LANDS, AS PER DOCUMENTS, IT WAS CLAIMED THAT THE IMMOVABLE PROPERTIES WERE PURCHASED BY THE FAMILY MEMBERS WHICH WERE DULY ACCOUNTED FOR IN THE BOOKS OF ACCOUNTS AND SAME WERE VERIFIED DURING THE ASSESSMENT PROCEEDINGS. FOR THE CONSTRUCTION OF PALATIAL HOUSE AT PRAGATI VIHAR FOR INVESTMENT OF RS. 10 CRORES, IT WAS EXPLAINED THAT FOR SUCH 17 CONSTRUCTION, ADDITION HAS ALREADY BEEN MADE IN THE RESPECTIVE HANDS FOR WHICH OUR ATTENTION WAS INVITED T O PAGES 675 TO 700, 701 TO 718 (ITAT ORDER), 719 TO 74 6. 4.1 FROM THE ABOVE EXPLANATION, WHICH IS DULY SUPPORTE D BY ASSESSMENT ORDERS, APPELLATE ORDER OF CIT(A)/TRIBUN AL AND OTHER DOCUMENTARY EVIDENCES AS PLACED ON RECORD, WE FIND FORCE IN THE ASSERTION OF THE LD. COUNSEL FO R THE ASSESSEE. AT THE SAME TIME, IT IS WORTH MENTIONING HE RE THAT SECTION 250(4) OF THE INCOME TAX ACT CONFERS W IDE POWERS ON THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AND HIS POWERS ARE MUCH WIDER. BUT THE LEARN ED CIT(A) IS NOT COMPETENT TO INTRODUCE NEW SOURCE OF INCOME IN THE ASSESSMENT AND AS SUCH HIS POWERS ARE CONFINED T O THE SUBJECT MATTER OF ORIGINAL ASSESSMENT ONLY. HOWEVE R, WE ARE CONFINED TO PRESENT APPEALS ONLY WHEREIN THE SUBJECT MATTER OF APPEAL BEFORE THE LEARNED CIT(A) WAS THE ASSESSMENT AND THE SCOPE OF THE APPEAL WAS LIMITED TO TH E 18 SUBJECT MATTER ONLY. THE CIT(A) HAS NO POWER TO TRAVEL BEYOND THE SUBJECT MATTER OF THE ASSESSMENT AND AS SUCH HE IS NOT ENTITLED TO DIRECT THE AO TO INTRODUCE NE W SOURCES OF INCOME AND ASSESS THE SAME BY PASSING ORDER U/S 250( 4) IN THE MANNER WE SEE IN CASE OF PRESENT ASSESSEES. 4.2 WE FURTHER FIND THAT THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. CHAGANLAL KAILAS & CO., 148 ITR 7 HELD AS UNDER :- THE CASE BEFORE US IS AN A FORTIORI ONE. EVEN THOUGH AN ITEM OF INCOME WAS BEFORE THE ITO AND NOTED BY HIM, THE SUPREME COURT HAS HELD THAT SINCE THE ITO HAD NOT CONSIDERED THAT ITEM WITH REFERENCE TO THE QUESTION OF TAXABILITY OR OTHERWISE, THE POWER OF ENHANCEMENT CANNOT BE INVOKED BY THE AAC TO BRING THAT ITEM TO TAX. IN THE CASE BEFORE US, THERE IS NO MATERIAL TO INDICATE THAT THE ITO WAS AWARE OF THE ENTRY IN THE ACCOUNTS WITH REGARD TO THE RECEIPT OF THE VARIOUS AMOUNTS FOR CHARITY. EVEN ASSUMING THAT THERE WERE ENTRIES IN THE ACCOUNT BOOKS REGARDING THE SAID SUM AS CONTENDED BY THE REVENUE, STILL, SO LONG AS SUCH SUM HAS NOT BEEN SUBJECTED TO THE PROCESS OF ASSESSMENT BY THE ITO, THE SAID ITEM CANNOT BE TREATED AS AN 19 ITEM TO BE CONSIDERED FOR ENHANCEMENT BY THE AAC. SIMILAR VIEW HAS BEEN EXPRESSED BY THE VARIOUS HIGH COURTS IN THE FOLLOWING CASES :- (I) CIT VS. SARDARILAL & CO, 251 ITR 864 (DEL) FB (II) CIT VS. UNION TYRES 240 ITR 556 (DEL.) (III) CIT VS. ASSOCIATED GARMENTS MAKERS 197 ITR 350 (RAJASTHAN.) THE HONBLE DELHI HIGH COURT IN UNION TYRES (240 IT R 556), AFTER CONSIDERING VARIOUS DECISIONS LIKE CIT VS. SAPO ORJI PALOONJI MISTRY (SUPRA) AND CIT VS. RAI BAHADUR HARDUTROY MOTILAL CHAMARIA; 66 ITR 443 (SC) AS ALSO CIT VS. KANPUR COAL SYNDICATE; 53 ITR 225 (SC), CIT VS. NIRBHAYRAM DALURAM; 224 ITR 610 (SC) AND JUTE CORPORATION OF INDI A VS. CIT; 187 ITR 688 (SC), HELD AS UNDER :- HELD, THAT, IN THE INSTANT CASE, THE TRIBUNAL WAS JUSTIFIED IN HOLDING THAT IN CALLING FOR A REMAND REPORT ON FOUR POINTS, NAMELY, ANTECEDENTS OF THE ASSESSEE, SOURCE OF INVESTMENT MADE IN PURCHASE OF GOODS, BUSINESS CONNECTIONS OF THE ASSESSEE AND BANK RECONCILIATION STATEMENT, THE APPELLATE ASSISTANT COMMISSIONER HAD EXCEEDED HIS JURISDICTION. WHILE COMPUTING THE TOTAL 20 BUSINESS INCOME OF THE ASSESSEE, THE ASSESSING OFFICER HAD ESTIMATED THE SALES AT AN ENHANCED FIGURE AND HAD APPLIED A HIGHER RATE OF GROSS PROFIT. THUS, THE ONLY MATTER DEALT WITH BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER WAS THE ESTIMATION OF PROFITS AND GAINS OF THE BUSINESS OF THE ASSESSEE. THE APPELLATE ASSISTANT COMMISSIONER HAD HIS DOUBTS ABOUT THE CAPACITY OF THE ASSESSEE TO RAISE FINANCES FOR THE PURCHASE OF GOODS AND SHOW A HUGE TURNOVER IN THE VERY FIRST YEAR OF HIS BUSINESS. IN OTHER WORDS, THE ENQUIRY ORDERED BY THE APPELLATE ASSISTANT COMMISSIONER WAS TO SATISFY HIMSELF ABOUT THE SOURCE OF INVESTMENT BY THE ASSESSEE. IT IS AXIOMATIC THAT FAILURE TO PROVE THE SOURCES OF INVESTMENT WILL RESULT IN ADDITION IN THE HANDS OF THE ASSESSEE UNDER A DIFFERENT PROVISION OF LAW AND WILL NOT HAVE MUCH RELEVANCE IN THE ESTIMATION OF SALES AND GROSS PROFIT RATE ADOPTED BY THE ASSESSING OFFICER. ANY ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT WOULD CONSTITUTE A NEW SOURCE OF INCOME WHICH WAS NOT THE SUBJECT MATTER OF ASSESSMENT BEFORE THE ASSESSING OFFICER, AND, THEREFORE, IT WAS NOT OPEN TO THE FIRST APPELLATE AUTHORITY TO DIRECT THE ASSESSING OFFICER TO CONDUCT ENQUIRY REGARDING IT. IT IS PERTINENT TO MENTION HERE THAT THE AFORESAID DEC ISION OF THE HONBLE DELHI HIGH COURT WAS AFFIRMED BY THE FULL BENCH OF THE SAME HIGH COURT IN CIT VS. SARDARILAL & COMPANY; 251 ITR 864. 21 4.3 SO FAR AS THE DECISION FROM THE HONBLE GUJARAT HIGH COURT IN CIT VS. AHMEDABAD CRUCIBLE COMPANY (206 ITR 574), RELIED ON BY THE LEARNED CIT DR, IS CONCER NED, WE FIND THAT THE HONBLE GUJARAT HIGH COURT PRONOUNCED TH IS DECISION ON 15 TH JUNE,1993 WHEREAS THE DECISION FROM HONBLE DELHI HIGH COURT IN UNION TYRES (SUPRA) IS O F 23 RD DECEMBER, 1999 WHICH WAS AFFIRMED BY THE FULL BENCH OF THE HONBLE DELHI HIGH COURT ITSELF IN SARDARILAL & COMPANY (SURPA) ON 7 TH SEPTEMBER, 2001, MEANING THEREBY THAT BOTH THE DECISIONS FROM THE HONBLE DELHI HIGH COURT (INCLUDING THE FULL BENCH DECISION) ARE OF LATTER DATE . IT IS PERTINENT TO MENTION HERE THAT THE DECISION FROM HON BLE GUJARAT HIGH COURT WAS VERY MUCH AVAILABLE WHEN THE HONBLE DELHI HIGH COURT REACHED TO A PARTICULAR CONCLUSION, THEREFORE, WITH UTMOST REGARD, WE ARE SUP POSED TO FOLLOW THE LATTER DECISION ESPECIALLY WHEN THE DE CISIONS FROM THE HONBLE APEX COURT LIKE CIT VS. NIRBHAYRAM 22 DALURAM;224 ITR 610 (SC), CIT VS. KANPUR COAL SYNDICATE; 53 ITR 225 (SC), JUTE CORPORATION OF INDIA; 187 ITR 688 (SC), ALONG WITH OTHERS, WERE DULY CONSIDERED. 4.4. FROM THE DECISIONS FROM HONBLE DELHI HIGH COURT, IT BECOMES CRYSTAL CLEAR THAT THE POWERS OF TH E LEARNED CIT(A) ARE LIMITED TO THE SUBJECT MATTER OF ASSESSMENT AND NOT BEYOND THAT. IT IS A SETTLED PRINCIP LE OF LAW THAT EVEN IF THERE ARE TWO VIEWS, THE VIEW IN FAVO UR OF THE ASSESSEE HAS TO BE PREFERRED. AS SUCH, CIT(A) IS NOT PERMITTED TO TRAVEL BEYOND THE SUBJECT MATTER OF ASSESSMENT. IT ALSO BECOMES CLEAR THAT IT IS NOT ONLY T HE SUBJECT MATTER OF THE APPEAL BEFORE HIM BUT THE SUBJEC T MATTER OF THE ASSESSMENT. IN OUR OPINION, THE POWERS OF ENHANCEMENT VESTED IN THE CIT(A) ARE RESTRICTED ONLY TO THE INCOME WHICH WAS THE SUBJECT MATTER OF CONSIDERATION F OR THE PURPOSES OF ASSESSMENT BY THE ASSESSING OFFICER. 23 4.5 THE VARIOUS DECISIONS RELIED UPON BY THE LEARNED CIT(A) ARE DISTINGUISHABLE AND ARE NOT DIRECTLY ON THE SUBJECT. 4.6. IN THE CASE BEFORE US, WHAT THE LEARNED CIT(A) I S ATTEMPTING TO DO IS THAT UNDER THE GUISE OF PROVISION S OF SECTION 250(4) OF THE ACT, HE IS TRYING TO ACT AS IF HE IS THE ADMINISTRATIVE CIT AND AS SUCH HAS GOT REVISIONARY POWERS . IN THE GUISE OR ORDER PASSED U/S 250(4) CIT(A) IS TR YING TO EVEN REOPEN THE COMPLETED ASSESSMENTS OF OTHER ASSESS EES WHICH HAVE REACHED FINALITY TO THE LEVEL OF THE TRIBUN AL WHICH IS NOT PERMISSIBLE UNDER LAW. WE MAY OBSERVE THAT EVEN ADMINISTRATIVE CIT BY EXERCISING POWERS U/S 263 OF THE ACT, IS NOT PERMITTED TO DIRECT THE AO TO REVIS E THE ASSESSMENT BY ADDING THE INCOME OF OTHER ASSESSES WHO SE ASSESSMENTS ARE EITHER QUASHED OR ADDITIONS HAVE NOT ONL Y BEEN DELETED BY HIS PREDECESSOR BUT WHICH WERE CONF IRMED BY THE TRIBUNAL ALSO. 24 5. WE HAVE GONE THROUGH THE PAPER BOOK AND EVIDENCES FILED BEFORE US AND FIND THAT ALMOST ALL THE ITEMS MENT IONED BY THE LD. CIT (A) IN THE ORDER PASSED U/S 250(4) HAV E RIGHTLY BEEN CONSIDERED BY THE A.O. IN THE CASE OF OTHER ASSESSES AND THE ASSESSMENT ORDERS OF THOSE ASSESSES AR E EITHER QUASHED BY THE PREDECESSOR CIT (A) OR THE ADDIT IONS WERE DELETED BY THE TRIBUNAL. AS SUCH, THE LEARNED C IT(A) IS TRYING TO ADD THOSE ITEMS IN THE INCOME OF ASSESS EE WITHOUT APPRECIATING THE FACT THAT HE HAS NO POWER TO FI ND OUT NEW SOURCE OF INCOME WHICH WAS NOT THE SUBJECT M ATTER OF ASSESSMENT IN THESE CASES. 6. IF ANY PART OF THE INCOME HAS ESCAPED ASSESSMENT, IT IS THE JURISDICTION OF THE ADMINISTRATIVE CIT U/S 263 OF THE ACT TO INVOKE HIS REVISIONARY POWERS TO DIRECT THE A SSESSING OFFICER TO INCLUDE THE INCOME WHICH HAS ESCAPED ASSESSMENT AND NOT OF THE LEARNED CIT(A). IN THIS VIE W OF THE MATTER ALSO, THE LEARNED CIT(A) HAS CLEARLY JUMPED O VER 25 THE JURISDICTION OF THE ADMINISTRATIVE CIT, WHICH DES ERVES TO BE ANNULLED, AS THE POWER OF BOTH THE AUTHORITIES HAVE BEEN SEPARATELY ENSHRINED IN THE ACT. 7. IF THE ARGUMENTS ADVANCED BY THE LEARNED RESPECTIVE COUNSELS AND THE MATERIAL AVAILABLE ON RECORD ARE KEPT IN JUXTAPOSITION AND ANALYSED, WE FIND THAT IN T HE IMPUGNED ORDER THE LEARNED CIT(A) HAS EXCEEDED HIS JURISDICTION AND IT APPEARS THAT THE ORDERS HAVE BEEN FRAMED BY ASSUMING THE REVISIONAL JURISDICTION OF THE LEARNED ADMINISTRATIVE COMMISSIONER U/S 263 OF THE AC T WHICH IS NOT PERMISSIBLE UNDER THE ACT. IN THE LIGH T OF THE ASSERTION/EXPLANATION MADE BY THE LD. COUNSEL FOR THE ASSESSEE, WE ARE OF THE VIEW THAT THE CLAIM OF THE ASSES SEE NEEDS FRESH CONSIDERATION BY THE LEARNED CIT(A). HOWE VER, WITHOUT GOING INTO MUCH DELIBERATION, IN THE INTERES T OF JUSTICE AND ALSO THAT NO PREJUDICE IS CAUSED TO EITHER SIDE, WE SET ASIDE THE ORDER OF THE CIT(A) PASSED U/S 25 0(4) OF 26 THE ACT AND DIRECT THE LEARNED FIRST APPELLATE AUTHORITY TO DECIDE THE APPEALS ON MERITS ON THE GROUNDS RAISED BEF ORE HIM, AFTER PROVIDING DUE OPPORTUNITY OF BEING HEARD T O THE PARTIES. IN THE RESULT, ALL THESE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES ONLY. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT ON 14 TH JUNE, 2012. SD/- SD/- (R.C.SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 14.6.2012 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, GU ARD FILE 4.6./6.6./7.6/8.6/12.6/14.6 27