Ashwani Minda, V. ACIT, Central Circle-14,

ITSSA 530/DEL/2003

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 1883 (ITAT-DELHI)
• Duration Of Justice: 12 year(s) 6 month(s) 9 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 30-05-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Next Hearing Date: 03-03-2016
• Assessment Year: misc
• Appeal Filed On: 20-11-2003
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SH
• Assessee Lawyers: DR RAKESH GUPTA
• Keywords: Bogus purchase; Share purchase agreement; Retrospective amendment; Block assessment; Bogus loan
• Section: 6; 132; 2

Judgement Text

1 IT(SS)A NO S. 530 & 538/DEL/2003 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: G NEW DELHI BEFORE SHRI G.D. AGRAWAL, HONBLE VICE PRESIDEN T & SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER IT(SS)A NO.-530/DEL/2003 (BLOCK PERIOD -01.04.1990 TO 19.03.2001) ACIT CENTRAL CIRCLE 14, ROOM NO. 319, 3 RD FLOOR, E-2, ARA CENTRE, JHANDEWALAN EXTN., NEW DELHI. VS SH. ASHWANI MINDA GI-48, G.T. KARNAL ROAD, INDUSTRIAL AREA, DELHI-33. AATPM3791R & IT(SS)A NO.-538/DEL/2003 (BLOCK PERIOD -01.04.1990 TO 19.03.2001) SH. ASHWANI MINDA GI-48, G.T. KARNAL ROAD, INDUSTRIAL AREA, DELHI-33. AATPM3791R VS ACIT CENTRAL CIRCLE 14, ROOM NO. 319, 3 RD FLOOR, E-2, ARA CENTRE, JHANDEWALAN EXTN., NEW DELHI. ASSESSEE BY DR. RAKESH GUPTA & SH. SOMIL AGGARWAL, ADV. REVENUE BY SH. PANKAJ VIDHARTHI, CIT DR ORDER PER SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER : IT (SS) A 530/DEL/2003 HAS BEEN FILED BY THE ASSES SEE AGAINST THE ORDER PASSED BY THE LD. CIT (APPEALS)-III, NEW DELHI. THE DATE OF DATE OF HEARING 03.03 .2016 DATE OF PRONOUNCEMENT 2 IT(SS)A NO S. 530 & 538/DEL/2003 IMPUGNED ORDER IS 25.09.2003 AND RELATES TO BLOCK A SSESSMENT U/S 158BC OF THE INCOME TAX ACT, 1961. IT (SS) A NO. 5 38/DEL/2003 IS CROSS-APPEAL BY THE DEPARTMENT. BOTH THE APPEALS W ERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. 2. BRIEF FACTS OF THE CASE, AS EVIDENT FROM THE REC ORDS, ARE THAT MINDA GROUP WAS ENGAGED IN THE BUSINESS OF MANUFACT URING OF VARIOUS AUTOMOBILE COMPONENTS E.G. LOCKS, PANELS, SPEEDOMET ERS, HEATER ASSEMBLY, DOOR LATCHES, PANEL SWITCHES, HANDLE BAR SWITCHES, COMBINATION SWITCHES, INSTRUMENT CLUSTERS ETC. AND SUPPLYING THEM TO MAJOR AUTOMOBILE MANUFACTURERS LIKE MARUTI UDYOG LT D. THESE COMPONENTS WERE ALSO SOLD IN THE OPEN MARKET AS REP LACEMENT PRODUCTS. ON 19.03.2001, A SEARCH OPERATION U/S 132(1) OF INC OME TAX ACT, 1961 (IN BRIEF-THE ACT) WAS CONDUCTED ON THIS GROUP AT THEIR BUSINESS AS WELL AS RESIDENTIAL PREMISES, INCLUDING ASSESSEES RESID ENCE AT A-9, ASHOK VIHAR, PHASE-1, NEW DELHI WHICH WAS JOINTLY OCCUPIE D BY THE ASSESSEE ALONG WITH THE FAMILIES OF HIS FATHER SHRI J.P. MIN DA AND BROTHER SHRI ANIL MINDA. 2.1 AS PER THE AO, TO CONDUCT THE ENTIRE BUSINESS, THE GROUP WAS HAVING THIRTEEN COMPANIES. SOME OF THEM WERE UNDER THE DIRECT CONTROL OF THE MINDA FAMILY AS THEY WERE THE MAJOR SHAREHOL DER IN THESE 3 IT(SS)A NO S. 530 & 538/DEL/2003 COMPANIES. THE REMAINING COMPANIES WERE CONTROLLED BY SOME ALLEGED BENAMIDAR SHAREHOLDERS. THE COMPANIES WHICH WERE CONTROLLED BY THE MINDA GROUP WERE AS UNDER: A) M/S JAY YUHSHIN LTD. B) M/S ANU AUTO INDUSTRIES P. LTD. C) M/S MEW TOOLS P. LTD. D) M/S JPM AUTO MOBILE P. LTD. E) M/S J.A. BUILDERS P. LTD. F) M/S JPM AUTO INDUSTRIES P. LTD. G) M/S JNS INSTRUMENTS P. LTD. H) M/S JPM FARMS P. LTD. I) M/S SHREE VINAYAK TRADING COMPANY P. LTD. J) M/S DWARKA ELECTRO P. LTD. K) M/S BRILLIANT JEWELLERS P. LTD. L) M/S S.N. KOHLI & COMPANY P. LTD. M) M/S SHIRDI AGROFIN P. LTD. N) M/S MODERN ENGINEERING WORKS (FIRM) O) M/S ANU AUTO INDUSTRIES (FIRM) P) M/S JAY IMPEX (FIRM) Q) M/S MOULDERS & FABRICATORS (FIRM) 2.2 M/S JAY YUHSHIN LIMITED WAS THE FLAGSHIP COMPAN Y OF THE GROUP, WHICH WAS ESTABLISHED IN EARLY 1980S IN COLL ABORATION WITH M/S YUHSHIN LTD. OF JAPAN. THIS COMPANY MANUFACTURED M AINLY AUTO COMPONENTS. 4 IT(SS)A NO S. 530 & 538/DEL/2003 2.3 AS PER THE AO, DURING THE SEARCH OPERATION IT W AS REVEALED THAT THE GROUP WAS EARNING HUGE UNACCOUNTED PROFITS BY W AY OF UNACCOUNTED SALES OF AUTOMOBILE COMPONENTS IN THE OPEN MARKET A ND BY DEBITING BOGUS BILLS FOR JOB WORK & BOGUS PURCHASES. THE MODUS OPERANDI AS EXPLAINED BY THE AO IS THAT THE MANUFACTURED COMPON ENTS WERE REMOVED FROM M/S JAY YUHSHIN LTD. AND M/S ANU AUTO INDUSTRIES P. LTD. AND SOLD IN THE OPEN MARKET THROUGH BENAMI CONCERNS LIKE M/S SHRI VINAYAK TRADING COMPANY P. LTD. AND M/S S.N. K OHLI & COMPANY PVT. LIMITED. 2.4 IT WAS ALLEGEDLY FOUND THAT MOST OF THE BOGUS J OB WORK BILLS WERE DEBITED IN THE BOOKS OF M/S MEW TOOLS PVT. LTD. EV IDENCE OF DEBITING THE BOGUS PURCHASES WAS ALSO ALLEGEDLY FOUND IN M/S ANU AUTO INDUSTRIES P. LTD. AND M/S JPM AUTO INDUSTRIES PVT. LTD. 2.5 IT WAS ALLEGEDLY STATED THAT THE MONEY SO EARNE D IS CHANNELIZED IN THE FORM OF BENAMI SHARE CAPITAL OF THE GROUP COMPANIES, BOGUS LOANS, PAYMENT OF CASH FOR UNACCOUNTED CONSIDERATIO N FOR PURCHASE OF PROPERTIES, BOGUS SALE OF JEWELLERY AND HOUSEHOLD E XPENSES. IN MANIPULATING THESE TRANSACTIONS, THE FAMILY WAS ALL EGEDLY HELPED BY SHRI VINOD GARG, THEIR EMPLOYEE AND ACCOUNTANT, SHR I RAJINDER AGGARWAL, CA AND DIRECTOR OF M/S JAY YUHSHIN LTD. IN ADDITION TO THIS, 5 IT(SS)A NO S. 530 & 538/DEL/2003 THE GROUP WAS ALLEGEDLY HAVING THREE TRUSTED EMPLOY EES, WHO WERE THE DIRECTORS IN THEIR BENAMI COMPANIES AND WERE INVOLV ED IN MANAGING THE TAX EVASION ACTIVITIES OF THIS GROUP NAMELY SHRI BH ARAT BHUSHAN MATHUR, SHRI S.K. DEV AND SHRI GAURI SHANKAR. ACTI ON U/S 132(1) WAS ALSO TAKEN ON THESE PERSONS EXCEPT IN THE CASE OF S HRI GAURI SHANKAR. 2.6 AS PER THE STATEMENTS RECORDED AT THE TIME OF S EARCH OPERATION, THE MINDA FAMILY DENIED THE FACT THAT THESE COMPANI ES BELONG TO THEIR GROUP. HOWEVER, ALLEGED CONCLUSIVE EVIDENCES WERE FOUND TO ESTABLISH THAT THE REAL OWNERSHIP OF THESE COMPANIES WAS WITH THE MINDA FAMILY. IT IS ALSO ALLEGED THAT ON THE DATE OF SEARCH SH. J .P. MINDA ADMITTED THAT THESE COMPANIES BELONGED TO HIS GROUP. HOWEVER, IN POST SEARCH INQUIRY HE RETRACTED FROM HIS EARLIER STATEMENT. F OLLOWING COMPANIES ARE ALLEGEDLY THE NINE BENAMI CONCERNS OF THE MINDA GROUP: 1. M/S MEW TOOLS P. LTD. 2. M/S JPM AUTO MOBILE P. LTD. 3. M/S J.A. BUILDERS P. LTD. 4. M/S JPM AUTO INDUSTRIES P. LTD. 5. M/S SHREE VINAYAK TRADING COMPANY P. LTD. 6. M/S DWARKA ELECTRO P. LTD. 7. M/S BRILLIANT JEWELLERS P. LTD. 8. M/S S.N. KOHLI & COMPANY P. LTD. 9. M/S SHIRDI AGROFIN P. LTD. 6 IT(SS)A NO S. 530 & 538/DEL/2003 3. THE ASSESSMENT U/S 158BC OF THE ACT FOR THE BLOC K PERIOD 01.04.1990 TO 19.03.2001 WAS FINALIZED AT RS. 3,48, 85,259/- AFTER MAKING THE FOLLOWING ADJUSTMENTS/ADDITIONS: 1. UNEXPLAINED CASH 3,00,000/- 2. BOGUS SALE OF JEWELLERY/CONVERSION CHARGES 58, 43,707/- 3. UNDISCLOSED INVESTMENT IN PURCHASE OF FARM LAND 30,28,697/- 4. BENAMI SHARE CAPITAL 1, 21,15,114/- 5. INCOME FROM BOGUS JOB WORK THROUGH M/S MEW TOOLS (P) LTD. 1,35,97,741 /- RS. 3,48,85,259 /- 3.1 ON APPEAL, THE LD. CIT (A) CONFIRMED THE ADDITI ON OF RS. 3,00,000/- ON ACCOUNT OF UNEXPLAINED CASH. THE ADDITION ON AC COUNT OF SALE OF JEWELLERY WAS DELETED. THE ADDITION ON ACCOUNT OF CONVERSION CHARGES ON THE SALE OF JEWELLERY WAS ALSO DELETED. THE LD. CIT (A) ALSO DELETED THE ADDITION ON ACCOUNT OF PURCHASE OF FARM LAND. ADDI TION MADE ON ACCOUNT OF BENAMI SHARE CAPITAL WAS ALSO DELETED. THE LD. CIT (A) ALSO DELETED ADDITION ON ACCOUNT OF JOB WORK. IN ADDITI ON, THE AO HAD ALSO LEVIED A SURCHARGE @ 17% ON THE TAX DUE WHICH WAS C HALLENGED BY THE ASSESSEE BEFORE THE LD. CIT (A) BUT THIS GROUND WAS DISMISSED BY THE LD. FIRST APPELLATE AUTHORITY. NOW BOTH, THE ASSESSEE AS WELL AS THE DEPARTMENT, HAVE FILED APPEALS BEFORE THIS TRIBUNAL . 7 IT(SS)A NO S. 530 & 538/DEL/2003 4. THE GROUNDS OF APPEAL OF THE ASSESSEE READ AS UN DER: 1. THAT THE LD. CIT (APPEALS) HAS ERRED BOTH IN LAW A S WELL AS IN FACTS OF THE CASE IN SUSTAINING AN ADDIT ION OF RS. 3.00 LACS MADE TO THE UNDISCLOSED INCOME OF THE ASSESSEE ON THE ALLEGATION OF UNEXPLAINED CASH FOUND DURING THE COURSE OF SEARCH. THAT THE CASH S O FOUND IN THE PREMISES OF THE ASSESSEE WAS FULLY DISCLOSED AND THAT THE ADDITION AS MADE AND SUSTAINED BY THE CIT (APPEALS) IS WRONG AND UNTENABLE IN LAW. 2. THAT THE LD. CIT(APPEALS) HAS ERRED BOTH IN LAW AS WELL AS IN FACTS OF THE CASE IN UPHOLDING THE LEVY OF SURCHARGE ON THE TAX DETERMINED U/S 163 OF THE ACT EVEN THOUGH THE SAME HAS BEEN IMPUGNED ONLY WITH EFFECT FROM 01.06.2002. 3. THAT THE ASSESSEE CRAVES THE RIGHT TO AMEND, DELETE ANY GROUND OF APPEAL AT THE TIME OF HEARING. 5. THE GROUNDS RAISED BY THE DEPARTMENT ARE AS UNDE R: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 30,28,697/- MADE ON ACCOUNT OF UNDISCLOSED INVESTMENT IN PURCHASE OF FARM LAND BY M/S JPM FARMS P. LTD. ON THE GROUND THAT THIS ADDITION HAS BEEN MADE ON SUBSTANTIVE BASIS IN THE CASE M/S JPM FARMS P. LTD. WHEREAS THE AO HAS GIVEN A CATEGORICA L FINDING THAT THIS ADDITION HAS BEEN MADE ON SUBSTANTIVE BASIS IN THE CASE OF THE ASSESSEE, IMPLYING THEREBY THAT THE SAME IS BEING MADE ON PROTECTIVE BASIS IN THE CASE OF M/S JPM FARMS P. LT D. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE LD. CIT (A) ERRED IN DELETING THE ADDITION OF RS. 1,21,15,114/- MADE ON ACCOUNT OF BENAMI INVESTMENT IN SHARE CAPITAL OF DIFFERENT COMPANIES ON THE GROU ND THAT SUBSTANTIVE ADDITION IN THE HANDS OF THESE COMPANIES HAS BEEN MADE WHEREAS IN ESSENCE THE 8 IT(SS)A NO S. 530 & 538/DEL/2003 AO HAS MADE BY IMPLICATION ADDITIONS ON PROTECTIVE BASIS IN THE HANDS OF THESE COMPANIES AND HAS ADDED THE TOTAL AMOUNT ON SUBSTANTIVE BASIS IN THE ASSESSEES CASE. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE LD. CIT (A) ERRED IN DELETING THE ADDITION OF RS. 1,35,97,741/- MADE ON ACCOUNT OF BOGUS JOB WORKS THROUGH MEW TOOLS PVT. LTD. AFTER IGNORING THE FACT THAT THE PARTIES INVOLVED IN BOGUS WORK BILLING HAV E ADMITTED THAT THEY ARE PAYING CASH AGAINST THE CHEQUE RECEIVED AGAINST THE BILLED AMOUNT TO SH. J. P. MINDA AND HIS SONS. 6. THE LD. AR SUBMITTED THAT AS FAR AS GROUND NO. 1 OF ASSESSEES APPEAL IS CONCERNED, THE SAME IS NOT BEING PRESSED. HENCE, THE SAME IS DISMISSED AS NOT PRESSED. ON THE ISSUE OF LEVY OF SURCHARGE, THE LD. AR PLACED RELIANCE ON THE JUDGMENT OF THE HONBLE APEX COURT IN THE CASE OF CIT VS. VATIKA TOWNSHIP (P) LTD. 367 ITR 466 (SC) F OR THE PREPOSITION THAT THE LEVY OF SURCHARGE WAS NOT TO APPLY TO BLOC K ASSESSMENTS PERTAINING TO PERIOD PRIOR TO 1.6.2002 AND THAT THE INTENTION OF THE LEGISLATURE WAS NOT TO GIVE IT A RETROSPECTIVE EFFE CT. THE LD. DR SUPPORTED THE FINDINGS OF THE LD. CIT (APPEALS) ON THIS ISSUE. 7. ARGUING FOR THE DEPARTMENTS APPEAL, ON GROUND N O. 1, THE LD. DR SUBMITTED THAT THE LD. CIT(A) HAD ERRED IN DELETING ADDITION OF RS.30,28,697/- MADE ON ACCOUNT OF UNDISCLOSED INVES TMENT IN PURCHASE OF FARM LAND BY M/S. JPM FARMS LTD. ON THE GROUND THAT THIS 9 IT(SS)A NO S. 530 & 538/DEL/2003 ADDITION HAS BEEN MADE ON SUBSTANTIVE BASIS IN THE CASE OF M/S.JPM FARMS, WHEREAS AO HAS GIVEN A CATEGORICAL FINDING T HAT THIS ADDITION HAS BEEN MADE ON SUBSTANTIVE BASIS IN THE CASE OF T HE ASSESSEE, IMPLYING THEREBY THAT SAME IS BEING MADE ON PROTECT IVE BASIS IN THE CASE OF M/S. JPM FARMS (P) LTD. IT WAS SUBMITTED TH AT IT WAS ON THE BASIS OF INFORMATION GATHERED DURING THE COURSE OF SEARCH AND POST SEARCH ENQUIRIES THAT THE AO IN THE ORDER AT PAGE 1 7 HAD GIVEN A FINDING THAT COMPANY M/S.JPM FARMS (P) LTD. WAS NOT PURSUIN G ANY BUSINESS ACTIVITY EXCEPT OWNING A FARM LAND. THIS COMPANY WA S OWNED BY SH.J.P. MINDA AND HIS TWO SONS ALONG WITH OTHER FAMILY MEMB ERS AND BENAMI SHARE HOLDERS. IT WAS, THEREFORE, HELD IN THE ASSES SMENT ORDER OF THE COMPANY THAT THE UNDISCLOSED FUNDS FOR PURCHASE OF FARMS LAND IN THE HANDS OF M/S.JPM FARMS (P) LTD. HAVE BEEN PROVIDED BY SH.J.P. MINDA AND HIS TWO SONS. THIS CONCLUSION HAS BEEN ARRIVED AT BY THE AO ON THE BASIS OF STATEMENT OF SH.J.P. MINDA RECORDED WHEREI N HE HAD STATED THAT THERE WAS NO SOURCE OF INCOME FOR THE COMPANY AND ALSO ON THE BASIS OF THE STATEMENT OF SH. RAGHUNATH SINGH, SELL ER OF THE LAND WHEREIN HE HAD STATED THAT MONEY IN CASH WAS PAID B Y SH.VINOD GARG MANAGER OF THE MINDA GROUP BEFORE THE EXECUTION OF THE REGISTRATION. THE LD. DR FURTHER SUBMITTED THAT IN VIEW OF ABOVE FACTS AND FINDINGS IN 10 IT(SS)A N OS. 530 & 538/DEL/2003 THE CASE OF COMPANY L/3 RD OF THE UNDISCLOSED INCOME DECLARED AND ASSESSED IN THE CASE OF COMPANY WAS TREATED AS UNDI SCLOSED INCOME OF SH.ASHWANI MINDA (THE ASSESSEE) WHO HAD ACTUALLY CO NTRIBUTED L/3 RD OF SAID UNDISCLOSED INCOME. IT WAS SUBMITTED THAT THE AO HAS NOT ACCEPTED THE SOURCE OF INVESTMENT IN THE HANDS OF JMP FARMS (P) LTD. HE HAS CATEGORICALLY MENTIONED IN THE ORDER OF ASSESSEE AS WELL AS IN THE ORDER OF JMP FARMS (P) LTD. THAT THE COMPANY WAS NOT PURS UING ANY ACTIVITY EXCEPT OWNING OF THE LAND, AND WAS NOT CARRYING ANY BUSINESS ACTIVITY. IN VIEW OF THAT MATTER AO HAS TAXED THE UNDISCLOSED INCOME IN THE HANDS OF PERSONS WHO HAD ACTUALLY CONTRIBUTED THE M ONEY. IT WAS SUBMITTED THAT IN VIEW OF THESE FACTS, THE FINDING OF THE LD. CIT(A) OUGHT TO BE REVERSED. 8. ON GROUND NO. 2 OF THE DEPARTMENTS APPEAL, THE LD. DR SUBMITTED THAT THE LD. CIT(A) HAS ERRED IN DELETING THE ADDIT ION OF RS.1,21,15,114/- MADE ON ACCOUNT OF BENAMI INVESTME NT IN SHARE CAPITAL OF DIFFERENT COMPANIES ON THE GROUND THAT S UBSTANTIVE ADDITION IN THE HANDS OF THESE COMPANIES HAS BEEN MADE WHERE AS IN ESSENCE THE AO HAS MADE ADDITION BY IMPLICATION ON PROTECTIVE B ASIS IN THE HANDS OF THESE COMPANIES AND HAS ADDED THE TOTAL AMOUNT ON S UBSTANTIVE BASIS IN THE HANDS OF THE ASSESSEE. IT WAS SUBMITTED THAT THE STATEMENT OF 11 IT(SS)A N OS. 530 & 538/DEL/2003 SH.RAJENDER AGRAWAL DISCUSSED AT PAGE 71 TO 78 OF P APER BOOK AND OF DIARY ANNEXURE A/23 SEIZED FROM THE RESIDENCE OF RA JENDRA AGRAWAL ON 19.3.2009 GIVE DETAILS OF CASH RECEIVED AND CHEQUE ISSUED FROM THE RAJENDER AGRAWAL GROUP OF CO. TO THE MINDA GROUP. P HOTOCOPIES OF ALL THE STATEMENTS RECORDED WERE MADE AVAILABLE TO THE AR OF THE ASSESSEE ON 8.10.2001 BY THE DDIT, FARIDABAD AND ALSO OPPORT UNITY OF CROSS EXAMINE WAS GIVEN TO THE ASSESSEE ON AT 11:00 A.M. HOWEVER, THE ASSESSEE DID NOT AVAIL THIS OPPORTUNITY. IT WAS SUB MITTED THAT PAGE 79 OF PAPER BOOK - PAGE 7/A-18 SEIZED ON 3.4.2001 FROM OF FICE OF MINDA AT 204/38 SURYA DEEP BUILDING IS CONCLUSIVE EVIDENCE T HAT TRANSACTIONS ARE ARRANGED ONLY AND NOT REAL. SECONDLY, LARGE NUM BER OF BLANK SHARE CERTIFICATES OF DIFFERENT THE MINDA GROUP COMPANIES SEIZED FROM THE OFFICE OF RAJINDER AGRAWAL AT 103/37-38 SURYA DEEP BUILDING ON 30.3.2001. THIRDLY, AS-17 TO A23 - THESE SHARE CERT IFICATES BELONG TO THE MINDA GROUP OF COMPANIES LIKE ANU AUTO INDUSTRY, SI RDI AGROFINE (P) LTD., JPM AUTOMOBILES, JPM FARMS, DWARIKA ELECTRO I NVESTMENT (P) LTD., MEW TOOLS (P) LTD., JA BUILDERS (P) LTD. AND JPM AUTO INDUSTRIES (P) LTD. THESE SHARES CAME TO SHRI VINOD GARG FOR U PDATING OF THE RECORD OF THESE COMPANIES. FOURTHLY, BENAMI SHARE CAPITAL IN THE NAME OF CONSORTIUM VYAPAR LTD. - THIS COMPANY HAS GOT TOTAL SHARE CAPITAL OF 12 IT(SS)A N OS. 530 & 538/DEL/2003 RS.300,08,300/- OUT OF WHICH AN AMOUNT OF RS.2,68,0 0,000/- HAS BEEN INVESTED IN THE MINDA GROUP OF COMPANIES. PREMISES OF THE COMPANY WERE COVERED U/S 132 OF THE I.T.ACT ON 19.3.2001. I T WAS SUBMITTED THAT IN VIEW OF THE COPIOUS EVIDENCES AGAINST THE ASSESS EE, THE RELIEF ALLOWED BY THE LD. CIT (A) DESERVES TO BE REVERSED. 9. ON GROUND NO. 3 OF THE DEPARTMENTS APPEAL, THE LD. DR SUBMITTED THAT THE LD.CIT(A) HAD ERRED IN DELETING ADDITION O F RS.1,35,97,741/- MADE ON ACCOUNT OF BOGUS JOB WORK THROUGH MEW TOOLS PVT.LTD. IT WAS SUBMITTED THAT CHEQUES PAID TO BOGUS PARTIES WERE R ECEIVED BACK IN THE FORM OF CASH BY THE MINDAS. IT WAS SUBMITTED THAT M EW TOOLS WAS A BENAMI CONCERN OF THE MINDA GROUP THROUGH SHRI RAJE NDER AGRAWAL. THE COMPANY CARRIED OUT JOB WORK OF PETTY NATURE FOR M/ S.JAY YUSHIN LTD. BUT FOR THIS WORK VERY HIGH PAYMENTS WERE MADE BY M /S.JAY YUSHIN TO M/S.MEW TOOLS (P) LTD. IT WAS EMPHASIZED THAT AS TH E JOB WORK TO BE DONE WAS OF PETTY NATURE, SO NATURALLY THE EXPENSES WHICH M/S.MEW TOOLS HAD TO INCUR FOR GETTING THIS WORK DONE WERE ALSO NOMINAL IN NATURE. THUS THE ACTUAL PROFIT OF MEW TOOLS BECAME VERY HIGH. TO REDUCE THIS PROFIT, FUNDS WERE SIPHONED OFF FROM ME W TOOLS BY DEBITING BOGUS JOB WORK BILLS. THE TOTAL FUNDS WITHDRAWN THI S WAY BY THE MINDA FAMILY RAN INTO CRORES OF RUPEES. THIS MODUS OPERAN DI HAD BEEN ADOPTED 13 IT(SS)A N OS. 530 & 538/DEL/2003 BECAUSE JAPANESE WERE ONE OF THE MAJOR SHARE HOLDER S OF M/S.JAY YUSHIN LTD. BY WITHDRAWING MONEY THIS WAY, THE MIND A FAMILY DID NOT HAVE TO SHARE PROFITS WITH M/S.YUSHIN LTD. AND ALSO THEY DID NOT HAVE TO PAY ANY TAXES. THE LD. DR FURTHER SUBMITTED THAT TH E MODUS OPERANDI HAD BEEN EXPLAINED BY SH.BHARAT BHUSHAN MATHUR, DIR ECTOR MEW TOOLS LTD. DURING SEARCH AT HIS RESIDENCE ON 19.03.2001. IT WAS SUBMITTED THAT SH.MATHUR STATED THAT MEW TOOLS LTD. WAS A MIN DA GROUP COMPANY. THE LD. DR SUBMITTED THAT M/S.MEW TOOLS H AD SHOWN PAYMENT TO FOLLOWING CONCERNS TO TAKE JOB WORK ADJU STMENT ENTRIES: DURGA INDUSTRIES, UNIVERSAL INDUSTRIES, KAUSHAL IND USTRIES, METAL DEVICES, PERFECT SPARES. SH.MATHUR STATED THAT HE U SED TO HAND OVER BLANK CHEQUES TO SH.ASHWIN MINDA. THE INQUIRIES CON DUCTED ABOUT THE BOGUS JOB WORK BY THE DDIT, FARIDABAD, ARE DISCUSSE D FROM PAGE 130 TO 145 OF THE P.B. WHICH PROVES THAT THESE COMPANIES W ERE USED FOR TAKING BOGUS BILLS. THE OWNERS OF THESE COMPANIES HAVE STA TED THAT THEY HAVE NOT DONE ANY JOB WORK FOR THE MINDA GROUP OF COMPAN IES AND THAT THEY HAVE ISSUED ONLY BOGUS BILLS FOR THE JOB WORK. THEY USED TO RECEIVE CHEQUE AGAINST BILLS, DEPOSIT THEM IN THEIR BANK AC COUNT AND RETURN THE CASH TO SH.ASHWIN MINDA OR A PERSON OF THE MINDA GR OUP. THE LD. DR STATED THAT Q.NO.10 OF THE STATEMENT OF SH.B.B.MATH UR CLEARLY SHOWS 14 IT(SS)A N OS. 530 & 538/DEL/2003 THAT SH.ASHWANI MINDA USED TO TAKE CASH BACK FROM T HE ABOVE NAMED COMPANIES IN WHOSE NAME JOB WORK CHARGES HAVE BEEN SHOWN. THE LD. DR SUBMITTED THAT IN VIEW OF THESE FACTS AND STATEM ENTS ON RECORD, THE AOS ORDER SHOULD BE RESTORED WHILE SETTING ASIDE T HE LD. CIT (A)S ORDER. 10. IN RESPONSE THE LD. AR SUBMITTED THAT GROUND NO . 1 RELATES TO ADDITION OF RS. 30,28,697/- ON A/C OF UNDISCLOSED I NVESTMENT IN PURCHASE OF FARM LAND BY M/S JPM FARMS (P) LTD. HE SUBMITTED THAT THIS FARM WAS PURCHASED BY M/S JPM FARMS (P) L TD. AT RS. 23,39,500/- SHOWN IN THE BOOKS AND THE AMOUNT PAID OVER AND ABOVE THE REGISTERED PRICE I.E. RS. 85,19,875/- AND RS. 4,66,216/- BEING DEVELOPMENT FEE ( AGGREGATING TO RS. 90,86,091) WAS OFFERED TO TAX BY M/S JPM FARMS (P) LTD. AND WHICH HAS BEEN SO ASSESSED IN THEIR HANDS AS NOTED IN THE BLOCK ASSESSMENT ORDER OF JPM FARMS P. LTD. (PAPER BOOK PAGES 20-29) WHEREIN IS THE REL EVANT DISCUSSION IS RESPECT OF THE IMPUGNED LAND ACCORDING TO WHICH RS. 90,86,091/- WAS ADDED AS UNDISCLOSED INCOME OF THAT COMPANY. THUS THERE IS NO QUESTION OF MAKING DOUBLE ADDITION . HE SUBMITTED THAT THE LD. CIT (A) HAS DISCUSSED THIS ISSUE AT PA GE-28-29 OF THE APPEAL ORDER WHICH IS RELIED UPON. IT WAS SUBMITTED THAT THE AO 15 IT(SS)A N OS. 530 & 538/DEL/2003 TAXED THE COMPANY ON THE ONE HAND AND ON THE OTHER HAND PRESUMED/HELD THAT THE DIFFERENCE MUST HAVE BEEN PA ID EQUALLY BY MR. J.P.MINDA AND HIS TWO SONS NAMELY MR. ANIL MIND A AND MR. ASHWANI MINDA- ASSESSEE HERE. HE SUBMITTED THAT THE ADDITION COULD NOT BE MADE IN THE HANDS OF THE ASSESSEE DUE TO THE FOLLOWING REASONS - 1) LAND WAS OWNED / BELONGED TO THE SAID COMPANY AND WAS SHOWN IN ITS BOOKS OF ACCOUNTS. THUS, WHEN LAND BELONGED TO THE COMPANY, THERE WAS NO QUESTION OF ASSUMING THAT THE PURCHASE CONSIDERATION WAS PAID BY SOMEBODY ELSE OTHER THAN THE OWNER COMPANY. 2) WHEN THE PAYMENT OF RS. 23,39,500/- PAID BY CHEQUE BY THE SAID COMPANY WAS ACCEPTED TO BE BELONGING TO SAID COMPANY, THERE WAS NO REASON AS TO WHY THE BALANCE PAYMENT NOT BE TREATED TO HAVE BEEN MADE BY THE SAID COMPANY ONLY. 3) LAND WAS PURCHASED BY THE SAID COMPANY AS IS EVIDENT FROM PAGES 20, 22,23,28,29 OF THE PAPER BOOK AND THUS ANY UNDISCLOSED INCOME WAS TO BE 16 IT(SS)A N OS. 530 & 538/DEL/2003 ASSESSED IN THE HANDS OF THE SAID COMPANY. 4) THERE IS NO EVIDENCE TO SHOW THAT ANY PAYMENT WAS MADE BY THE ASSESSEE AS CAN BE SEEN FROM BARE READING OF PAPER BOOK PAGES 20-29. 5) WHEN AO HIMSELF SAYS THAT THE SAID COMPANY BELONGED TO MR. J.P.MINDA AND OTHER FAMILY MEMBERS, THERE WAS NO BASIS TO ASSUME THAT ASSESSEE MUST HAVE PAID ONE THIRD OF THE DIFFERENCE . 6) DOUBLE ADDITION CANNOT BE MADE- ONE IN THE HANDS OF THE SAID COMPANY AND OTHER IN THE HAND OF THE ASSESSEE, MORE SO WHEN THERE COULD BE NO MOTIVE AS COMPANY AND INDIVIDUAL BOTH WERE TO PAY 60% AS TAX. RATHER IN THE CASE OF COMPANY, SURCHARGE WAS MORE. 7) INCOME DECLARED IN THE RETURN OF THE SAID COMPANY WAS UNDISCLOSED INCOME WHICH MEANS THAT THE ENTITY CONCERNED VIZ. THE SAID COMPANY HAD THIS MUCH OF INCOME FROM UNDISCLOSED SOURCE. 10. THE LD. AR FURTHER SUBMITTED THAT GROUND NO 2 RELATES 17 IT(SS)A N OS. 530 & 538/DEL/2003 TO THE ADDITION OF RS. 1,21,15,114/- ON ACCOUNT OF ALLEGED BENAMI INVESTMENT IN SHARE CAPITAL OF DIFFERENT COM PANIES BY PRESUMING ONE THIRD TO HAVE BEEN INVESTED BY THE AS SESSEE. THE LD. AR SUBMITTED THAT THE ASSESSMENT ORDER OF T HE ASSESSEE WOULD SHOW THAT THERE WAS NO INDEPENDENT D ISCUSSION AND VAGUE OBSERVATIONS HAVE BEEN MADE BY THE AO. TH E AO HAS NOT EVEN REFERRED AS TO WHICH WERE THE EVIDENCE S FOR THE IMPUGNED ADDITION AND AS TO WHETHER THE ASSESSEE WA S EVER CONFRONTED WITH THESE EVIDENCES. HE FURTHER SUBMITTED THAT THE LD. CIT (A) HAS HELD THAT THERE WAS NO EVIDENCE FOUND A S A RESULT OF THE SEARCH OR BROUGHT ON RECORD BY THE AO AND THIS FINDING HAS NOT BEEN DISPLACED WITH EVIDENCE. IN FA CT, ADDITION WAS MADE ON ACCOUNT OF SHARE CAPITAL IN THE HANDS O F VARIOUS COMPANIES WHICH WAS DELETED BY THE TRIBUNAL. I N THE CASE OF JPM AUTOMOBILES, THE TRIBUNAL HAS HELD THAT THERE W AS NO MATERIAL, SHARE CAPITAL STOOD DISCLOSED AND IN ANY CASE ADDIT ION COULD NOT BE MADE IN THE HANDS OF THE COMPANY. 11. THE LD. AR FURTHER SUBMITTED THAT GROUND NO. 3 R ELATES TO ADDITION OF RS. 1,35,97,741/- ON ACCOUNT OF ALLEGED BOGUS JOB WORK THROUGH M/S. MEW TOOLS (P) LTD. HE SUBMITTED THAT THE 18 IT(SS)A N OS. 530 & 538/DEL/2003 AO HAS HELD IN THIS CASE THAT BOGUS JOB WORK WAS DO NE BY M/S MEW TOOLS P LTD. AND DISALLOWANCE OF RS. 4,07,93,22 4/- WAS MADE IN THE ASSESSMENT OF M/S MEW TOOLS P LTD., ONE THIRD OF WHICH COMES TO RS. 13597741/-(I.E. EQUALLY BETWEEN MR. J.P. MINDA AND HIS TWO SONS).HE SUBMITTED THAT JOB CHAR GES PAID BY M/S JAY USHIN TO M/S MEW TOOLS PVT. LTD. WAS RS.8,75,55,623/- REGARDING WHICH THERE IS NO DISPUT E IN THE PRESENT ASSESSMENT ORDER. HOWEVER, WHEN IT WAS IN D ISPUTE IN THE HANDS OF M/S JAY YUSHIN LTD., THE TRIBUNAL DELE TED THE SAID DISALLOWANCE IN THE HANDS OF M/S JAY YUSHIN LT D. ALSO. M/S MEW TOOLS PVT. LTD. PAID JOB WORK CHARGES OF RS.4,07,93,224/- TO ITS JOB WORKERS WHICH WAS DISAL LOWED BY THE A.O. OF M/S MEW TOOLS PVT. LTD. IN THEIR ASSESS MENT AND ONCE AGAIN, ALSO BY THE A.O. OF THE ASSESSEE. ASSES SING OFFICER OF M/S MEW TOOLS P LTD DISCUSSED THIS ISSUE IN THE ASSESSMENT ORDER AND OPINED THAT NO GENUINE JOB WORK WAS DONE THROUGH M/S MEW TOOLS PVT. LTD. IN FACT THE DISALLOWANCE OF THIS VERY AMOUNT WAS MADE IN THE HANDS OF M/S MEW TOOLS PVT. LTD. ON THE GROUND THAT NO JOB WORK EXPENSES WERE INCURRED BY M/S MEW TOOLS PVT. LTD. HE DREW OUR ATTENTION TO PAGES 531- 19 IT(SS)A N OS. 530 & 538/DEL/2003 537A OF THE PAPER BOOK WHICH IS COPY OF THE ORDER OF THE TRIBUNAL IS THE CASE OF M/S. MEW TOOLS (P) LTD. WHI CH SHOWS THAT REVENUE ACCEPTED THE ORDER OF LD. CIT (A) IN T HAT CASE HOLDING THE JOB WORK CHARGES AS GENUINE. THAT BEING THERE WAS NO QUESTION OF MAKING THE ADDITION IN THE HANDS OF THE ASSESSEE. HE SUBMITTED THAT THE TRIBUNAL IN THE CAS E OF JAY USHIN LTD ALSO HELD THE SAME. HE RELIED ON THE ORDE R OF THE LD. CIT (A) AND SUBMITTED THAT THE SAME SHOULD BE UPHEL D. 12. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE PE RUSED THE MATERIAL ON RECORD. AS FAR AS THE ASSESSEES APPEA L IS CONCERNED, GROUND NO. 2 PERTAINING TO LEVY OF SURCHARGE IS SQU ARELY COVERED BY THE JUDGMENT OF THE HONBLE APEX COURT IN THE CASE OF VATIKA TOWNSHIP (P) LTD.(SUPRA), WHEREIN THE HONBLE APEX COURT HAS HELD THAT THOUGH THE PROVISION FOR SURCHARGE UNDER THE F INANCE ACTS HAS BEEN IN EXISTENCE SINCE 1995, THE CHARGE OF SUR CHARGE WITH RESPECT TO BLOCK ASSESSMENTS, HAVING BEEN CREATED F OR THE FIRST TIME BY THE INSERTION OF THE PROVISO TO SECTION 113 OF T HE INCOME TAX ACT, 1961, BY THE FINANCE ACT, 2002, IS CLEARLY A SUBSTA NTIVE PROVISION AND IS TO BE CONSTRUED AS PROSPECTIVE IN OPERATION. THE AMENDMENT NEITHER PURPORTS TO BE MERELY CLARIFICATO RY NOR IS THERE 20 IT(SS)A N OS. 530 & 538/DEL/2003 ANY MATERIAL TO SUGGEST THAT IT WAS INTENDED SO BY PARLIAMENT. THE HONBLE APEX COURT HELD THAT CHAPTER XIV-B OF THE A CT WHICH DEALS WITH BLOCK ASSESSMENT IN SEARCH CASES IS A COMPLETE CODE IN ITSELF PROVIDING FOR SELF-CONTAINED MACHINERY FOR ASSESSME NT OF UNDISCLOSED INCOME FOR THE BLOCK PERIOD OF 10 YEARS OR 6 YEARS, AS THE CASE MAY BE. CHAPTER XIV-B COMPREHENSIVELY TAK ES CARE OF ALL THE ASPECTS RELATING TO THE BLOCK ASSESSMENT RELATI NG TO UNDISCLOSED INCOME. NOT ONLY DOES CHAPTER XIV-B DEFINE WHAT UN DISCLOSED INCOME IS, IT ALSO LAYS DOWN THE BLOCK PERIOD FOR W HICH UNDISCLOSED INCOME CAN BE TAXED AND THE PROCEDURE FOR TAXING TH AT INCOME. SPECIFIC PROVISION IN THE FORM OF SECTION 158BA (2) IS INSERTED MAKING IT THE CHARGING SECTION AND THE RATE AT WHIC H SUCH INCOME IS TO BE TAXED IS MENTIONED IN SECTION 113 OF THE A CT. IT REMAINS STATIC AT 60 PER CENT OF THE UNDISCLOSED INCOME WHI CH IS THE CATEGORICAL STIPULATION IN SECTION 113 OF THE ACT. THE RATES OF TAX CHARGEABLE IN THE CASE OF A BLOCK ASSESSMENT ARE NO T PROVIDED IN THE FINANCE ACT. THE CHARACTER AND NATURE OF UNDISCLOSED INCOME REFERRED TO IN CHAPTER XIV B ARE QUITE DISTINCT FROM TOTAL INCOME REFERRED TO IN SECTION 5. WHEN A SEPARATE CHARGING SECTION IS INTRODUCED SPECIFICALLY, TO ASSESS THE UNDISCLOSED INCOME, 21 IT(SS)A N OS. 530 & 538/DEL/2003 NOTWITHSTANDING A PROVISION IN THE NATURE OF SECTIO N 4 ALREADY ON THE STATUTE BOOK, THE REASON COULD ONLY BE THAT FOR ASSESSING UNDISCLOSED INCOME, THE CHARGING PROVISION IS SECTI ON 158BA(2) ALONE. THE HONBLE APEX COURT FURTHER HELD THAT THE RE CANNOT BE IMPOSITION OF ANY TAX WITHOUT THE AUTHORITY OF LAW. IF IT IS NOT VERY CLEAR FROM THE PROVISIONS OF THE ACT AS TO WHETHER OR NOT THE PARTICULAR TAX IS TO BE LEVIED ON A PARTICULAR CLAS S OF PERSONS, THE SUBJECT SHOULD NOT BE FASTENED WITH ANY LIABILITY T O PAY TAX. AS PER THE HONBLE APEX COURT, THE PROVISO ADDED TO SECTIO N 113 OF THE ACT IS NOT BENEFICIAL TO THE ASSESSEE. ON THE CONTRARY , IT IS A PROVISION WHICH IS ONEROUS TO THE ASSESSEE. THEREFORE, THE N ORMAL RULE OF PRESUMPTION AGAINST RETROSPECTIVE OPERATION WOULD A PPLY. THE FUNDAMENTAL RULE IS THAT NO STATUTE SHALL BE CONSTR UED TO HAVE A RETROSPECTIVE OPERATION UNLESS SUCH A CONSTRUCTION APPEARS VERY CLEARLY IN THE TERMS OF THE ACT, OR ARISES BY NECES SARY AND DISTINCT IMPLICATION. ON THE APPLICATION OF GENERAL PRINCIPL ES CONCERNING RETROSPECTIVITY, THE PROVISO TO SECTION 113 OF THE ACT IS PROSPECTIVE IN NATURE. THIS PROVISO CANNOT BE TREATED AS DECLA RATORY/STATUTORY OR CURATIVE IN NATURE BECAUSE: 22 IT(SS)A N OS. 530 & 538/DEL/2003 (A) PRIOR TO THE AMENDMENT OF SECTION 113 OF THE ACT W HEREBY THE PROVISO WAS ADDED, WHETHER SURCHARGE WAS PAYABLE IN RESPECT OF BLOCK ASSESSMENT OR NOT, WAS TOTALLY AMBIGUOUS AND UNCLEAR. SOME ASSESSING OFFICERS DID NOT LEVY SURCHARGE AND OTHERS ADOPTED DIFFERENT DATES FOR THE APPLICATION OF A PA RTICULAR FINANCE ACT, WHICH RESULTED IN DIFFERENT RATES OF S URCHARGE IN THE ASSESSMENT ORDERS. CHIEF COMMISSIONERS ACCEPTED TH E POSITION, IN NO UNCERTAIN TERMS, THAT AS PER THE LANGUAGE OF SECTION 113, AS IT EXISTED PRIOR TO THE INTRODUCTION OF THE PROV ISO, IT WAS DIFFICULT TO JUSTIFY LEVY OF SURCHARGE. IN THE ABS ENCE OF A SPECIFIED DATE, IT WAS NOT POSSIBLE TO LEVY SURCHARGE AND THE RE COULD NOT HAVE BEEN AN ASSESSMENT WITHOUT A PARTICULAR RATE O F SURCHARGE. (B) NOTWITHSTANDING THAT THE CHIEF COMMISSIONERS RECOMM ENDED RETROSPECTIVE AMENDMENT TO SECTION 113, THE NOTES O N CLAUSES APPENDED TO THE FINANCE BILL, 2002, WHILE PROPOSING INSERTION OF THE PROVISO CATEGORICALLY STATED THAT THE AMENDMENT WOULD TAKE EFFECT FROM JUNE 1, 2002. IT WAS A CONSCIOUS DECIS ION OF THE LEGISLATURE, EVEN WHEN THE LEGISLATURE KNEW THE IMP LICATION THEREOF AND TOOK NOTE OF THE REASONS WHICH LED TO T HE INSERTION OF THE PROVISO, THAT THE AMENDMENT WAS TO OPERATE PROS PECTIVELY. 23 IT(SS)A N OS. 530 & 538/DEL/2003 THE APEX COURT ALSO OBSERVED THAT THE CBDT ITSELF I N CIRCULAR NO. 8 OF 2002, DATED AUGUST 27, 2002, STATES THAT T HE AMENDMENT TO SECTION 113 OF THE ACT, ALONG WITH THE AMENDMENTS IN SECTION 158BE, WOULD BE PROSPECTIVE, I.E., TAKE EFFECT FROM JUNE 1, 2002. THE FINANCE ACT, 2003, B Y ADDITION OF A FURTHER PROVISO, AGAIN MAKES THE POSITION CLEAR T HAT SURCHARGE IN RESPECT OF BLOCK ASSESSMENT OF UNDISCLOSED INCOM E WAS MADE PROSPECTIVE WHERE A BLOCK ASSESSMENT WAS MADE FOR T HE PERIOD APRIL 1, 1989, TO FEBRUARY 10, 2000, PURSUANT TO SE ARCH AND SEIZURE OPERATIONS CONDUCTED U/S 132 OF THE ACT IN THE PREMISES OF THE ASSESSEE; HELD ACCORDINGLY, THAT SURCHARGE LEVIED BY THE AO FOR THE BLOCK ASSESSMENT PERTAINING TO THE P ERIOD PRIOR TO JUNE 1, 2002, WAS LIABLE TO BE DELETED. (EMPHASIS SUPPLIED). THE APEX COURT ALSO HELD THAT AN AMENDME NT MADE TO A TAXING STATUTE CAN BE SAID TO BE INTENDED TO REMO VE HARDSHIPS ONLY OF THE ASSESSEE, NOT OF THE DEPART MENT. IMPOSING A RETROSPECTIVE LEVY ON THE ASESEE WOULD H AVE CAUSED UNDUE HARDSHIP AND FOR THAT REASON PARLIAMENT SPECI FICALLY CHOSE TO MAKE THE PROVISO EFFECTIVE FROM JUNE 1, 20 02. WHERE A BENEFIT IS CONFERRED BY A LEGISLATION, THE RULE AGA INST A 24 IT(SS)A N OS. 530 & 538/DEL/2003 RETROSPECTIVE CONSTRUCTION IS DIFFERENT. IF A LEGI SLATION CONFERS A BENEFIT ON SOME PERSONS BUT WITHOUT INFLICTING A CO RRESPONDING DETRIMENT ON SOME OTHER PERSON OR ON THE PUBLIC GEN ERALLY, AND WHERE TO CONFER SUCH BENEFIT APPEARS TO HAVE BEEN T HE LEGISLATORS OBJECT, THEN THE PRESUMPTION WOULD BE THAT SUCH A LEGISLATION, GIVING IT A PURPOSIVE CONSTRUCTION, WO ULD WARRANT IT TO BE GIVEN A RETROSPECTIVE EFFECT. THIS EXACTLY I S THE JUSTIFICATION TO TREAT PROCEDURAL PROVISIONS AS RETROSPECTIVE. W HERE A LAW IS ENACTED FOR THE BENEFIT OF COMMUNITY AS A WHOLE, EV EN IN THE ABSENCE OF A PROVISION THE STATUTE MAY BE HELD TO B E RETROSPECTIVE IN NATURE. 13. RESPECTFULLY FOLLOWING THE RATIO OF THE JUDGMEN T OF THE HONBLE APEX COURT IN THE CASE OF VATIKA TOWNSHIP P. LTD. ( SUPRA), GROUND NO. 2 OF ASSESSEES APPEAL IS ALLOWED. 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. 15. AS FAR AS GROUND NO. 1 IN THE DEPARTMENTS APPE AL IS CONCERNED, IT IS SEEN FROM A PERUSAL OF THE IMPUGNE D ORDER THAT THE ISSUE HAS BEEN DISCUSSED IN PARAS 14.1 TO 14.4 OF T HE IMPUGNED ORDER IN DETAIL AS UNDER: 14.1 THIS GROUND OF APPEAL RELATE TO THE ADDITION OF RS. 30,28,697/- ON ACCOUNT OF UNDISCLOSED INVESTMEN T IN PURCHASE OF FARM LAND BY M/S JPM FARMS P. LTD. 25 IT(SS)A N OS. 530 & 538/DEL/2003 14.2 THE AR SUBMITTED THAT IT IS NOT CONTROVERTED BY THE AO THAT M/S JPM FARMS P. LTD. IS AN EXISTING FI RM AND THE PROPERTY IN QUESTION STANDS ACQUIRED BY THE COM PANY AND IS REFLECTED IN ITS BOOKS OF ACCOUNTS. THE COM PANY IS CONSTITUTED OF ONLY TWO DIRECTORS NAMELY THE APPELL ANT AND HIS WIFE, WHEREAS ACCORDING TO THE AO, THE IMPU GNED INVESTMENT HAS BEEN MADE BY THE APPELLANT, HIS FATH ER SH. J.P. MINDA AND HIS BROTHER SH. ANIL MINDA. THE AO HAS MISREAD THE FACTS AND, THEREFORE, REACHED THE ERRONEOUS CONCLUSION. IT WAS FURTHER POINTED OUT T HAT M/S JPM FARMS P. LTD. HAS ADMITTEDLY OFFERED THIS UNDISCLOSED INVESTMENT AS ITS UNDISCLOSED INCOME IN THE BLOCK RETURN FILED U/S 158BA, CONSEQUENT TO THE SEA RCH U/S 132. THIS DECLARATION STANDS ACCEPTED BY THE A O HIMSELF AND THAT TOO ON SUBSTANTIVE BASIS. HE FURTH ER ARGUED THAT NO MATERIAL WAS FOUND DURING THE COURSE OF SEARCH OPERATION OR THEREAFTER TO JUSTIFY THIS ADDI TION. HENCE, THE ADDITION OF RS. 30,28,697/- MADE IN THE HANDS OF THE APPELLANT IS WHOLLY UNJUSTIFIED. 14.3 I HAVE GONE THROUGH THE ARGUMENTS BY THE APPELLANT AND ALSO PERUSED THE RELEVANT ASSESSMENT ORDER. IN MY OPINION, THE ADDITION COULD NOT BE MA DE IN THE HANDS OF THE APPELLANT WHEN THERE IS NO DENYING FACT THAT THE LAND IN QUESTION STANDS PURCHASED BY M/S J PM FARMS P. LTD. WHERE THE APPELLANT IS NOT A DIRECTOR . THE SAID COMPANY HAS SEPARATELY OFFERED UNDISCLOSED INC OME ON ACCOUNT OF INVESTMENT IN PURCHASE OF LAND WHILE FILING ITS BLOCK RETURN IN RESPONSE TO NOTICE U/S 158BC AN D SUCH RETURN STANDS ACCEPTED BY THE AO. IT IS WELL SETTL ED PRINCIPLE OF LAW THAT SOME INCOME/INVESTMENT CANNOT BE TAXED TWICE. AS DECIDED BY RAJASTHAN COURT IN 130 TAXMAN 585 WHICH IS TO THE EFFECT THAT ONCE INCOME SHOWN IN THE NAME OF THE APPELLANT FIRM WAS FINALLY ASSESSED AND TAXED IN HANDS OF ONE OF ITS PARTNERS, THERE WAS NO QUESTION OF TAXING THE SAME INCOME OR MAKING AN ADDITION IN THE HANDS OF THE FIRM. 14.4 KEEPING IN VIEW THE FACT THAT THE INVESTMENT MADE IN FARM LAND HAS ALREADY BEEN DECLARED BY M/S JPM FARMS P. LTD. AND DULY ACCEPTED BY THE AO IN IT S 26 IT(SS)A N OS. 530 & 538/DEL/2003 BLOCK ASSESSMENT. I FIND NO REASON TO ADD THE SAME AGAIN IN THE HANDS OF THE APPELLANT. THEREFORE, THE AO W AS NOT JUSTIFIED IN MAKING THE IMPUGNED ADDITION OF RS. 30,28,697/-. ACCORDINGLY, THE SAME IS DELETED. 16. THE FINDINGS OF THE LD. CIT (A) COULD NOT BE DI SPUTED BY THE LD. DR BEFORE US ALSO AND, THEREFORE, WE FIND N O REASON TO INTERFERE WITH THE FINDINGS OF THE LD. CIT (A) ON T HIS ISSUE. GROUND NO. 1 OF DEPARTMENTS APPEAL IS ACCORDINGLY DISMISSED. 17. AS FAR AS GROUND NO. 2 OF THE DEPARTMENTS APPE AL IS CONCERNED, THE ISSUE IS FOUND TO BE DISCUSSED IN PA RAS 15.1 TO 15.7 OF THE IMPUGNED ORDER. THE RELEVANT FINDINGS OF THE LD. CIT (A) ARE IN PARAS 15.6 AND 15.7 AND THEY ARE BEING R EPRODUCED HEREIN UNDER FOR A READY REFERENCE: 15.6 I HAVE GONE THROUGH THE VERBAL AND WRITTEN ARGUMENTS ADVANCED BY THE APPELLANT AND HAVE ALSO PERUSED THE RELEVANT ASSESSMENT ORDERS. THERE IS N O DENYING FACT THAT THE ADDITION HAS BEEN MADE IN THE BLOCK ASSESSMENT OF THESE COMPANIES, LISTED IN THE ASSESSMENT ORDER, ON SUBSTANTIVE BASIS. THE AMOUNT ADDED AS UNDISCLOSED INCOME OF THE APPELLANT WAS NOT OVER AND ABOVE THE AMOUNT ALREADY FORMING SUBJECT MATTER OF BLOCK ASSESSMENT IN THE CASE OF T HE LISTED COMPANIES/ENTITIES. SINCE THE SAME AMOUNT ALREADY STANDS ASSESSED AS UNDISCLOSED INCOME OF SUCH COMPANIES THAT TOO ON SUBSTANTIVE BASIS, NO FURTHER ADDITION, THEREOF, IN THE HANDS OF THE APPE LLANT CAN BE MADE. MOREOVER, THERE IS NO MATERIAL EITHER FOUND DURING THE COURSE OF SEARCH OPERATION OR HAS BEEN BROUGHT ON RECORD BY THE AO THEREAFTER, TO JUS TIFY THAT THE APPELLANT INFACT HAD MADE SUCH INVESTMENTS . 15.7 KEEPING IN VIEW THE FACT THAT THE ADDITION HAS ALREADY BEEN MADE IN THE CASE OF RESPECTIVE COMPANIES ON SUBSTANTIVE BASIS, THE AO WAS NOT 27 IT(SS)A N OS. 530 & 538/DEL/2003 JUSTIFIED IN MAKING THE IMPUGNED ADDITION OF RS. 1,21,15,114/- IN THE HANDS OF THE APPELLANT. ACCORDINGLY, THE SAME IS DELETED. 18. IN VIEW OF THE DETAILED FINDINGS OF THE LD.CIT (A) ON THIS ISSUE WHICH COULD NOT BE CONTROVERTED BY THE DEPART MENT BEFORE USALSO , WE DECLINE TO INTERFERE AND DISMISS GROUND NO. 2 OF THE DEPARTMENTS APPEAL. 19. AS FAR AS GROUND NO. 3 OF DEPARTMENTS APPEAL I S CONCERNED, THE LD.CIT (A) HAS DISCUSSED THE ISSUE I N PARAS 16.1 TO 16.4 OF THE IMPUGNED ORDER. PARAGRAPHS 16.3 AND 16.4 ARE THE RELEVANT PARAGRAPHS WHICH ARE BEING REPRODUCED FOR A READY REFERENCE HEREIN UNDER: 16.3 I HAVE GONE THROUGH THE ARGUMENTS ADVANCED BY THE APPELLANT AND ALSO PERUSED THE RELEVANT ASSESSMENT ORDERS. ADMITTEDLY, THE ADDITI ON INCLUDING 1/3 RD OF THE AMOUNT, AS ALLEGED TO BE RECEIVED BY THE APPELLANT I.E. RS. 1,35,97,741/- HA S ALREADY BEEN ADDED WHILE FRAMING BLOCK ASSESSMENT IN THE CASE OF MEW TOOLS P. LTD. AND ALSO IN THE CA SE OF M/S JAY YUSHIN LTD. ON SUBSTANTIVE BASIS. THIS FACT HAS ALSO BEEN ADMITTED BY THE AO IN HIS ASSESSMENT ORDER. THEREFORE, NO FURTHER ADDITION OF THE SAME AMOUNT CAN BE MADE IN THE HANDS OF THE APPELLANT, WHICH HAS ALREADY BEEN TAXED, ON SUBSTANTIVE BASIS, IN THE HANDS OF THE M/S MEW TOOLS P. LTD. AND M/S JAY YUSHIN LTD. 16.4 KEEPING IN VIEW THE ABOVE FACT, THERE IS NO JUSTIFICATION FOR MAKING ADDITION OF RS. 1,35,97,74 1/- IN THE HANDS OF THE APPELLANT. THEREFORE, THE ADDI TION MADE BY THE AO ON THIS GROUND IS DELETED. 28 IT(SS)A N OS. 530 & 538/DEL/2003 20. THIS FINDING OF THE LD. CIT (A) ALSO DOES NOT C ALL FOR ANY INTERFERENCE AND WE UPHOLD HIS ACTION ON THE ISSUE AND DISMISS GROUND NO. 3 OF THE DEPARTMENTS APPEAL. 21. IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS DISMISSED. 22. IN THE FINAL RESULT, THE ASSESSEES APPEAL IS P ARTLY ALLOWED AND THE DEPARTMENTS APPEAL IS DISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 30.05.2016 . SD/- SD/- (G.D. AGRAWAL) (SUDHANSHU SRIVASTAVA) VICE PRESIDENT JUDICIAL MEMBER DATED: *KAVITA ARORA COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE 1. DRAFT DICTATED ON (HANDWRITTEN) 25.05.2016 2. DRAFT PLACED BEFORE AUTHOR 26.05.2016 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED BY SECOND 29 IT(SS)A N OS. 530 & 538/DEL/2003 MEMBER. 5. APPROVED DRAFT COMES TO THE SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON 7. FILE SENT TO THE BENCH CLERK 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.