DCIT CEN. CIR. 18 & 19, MUMBAI V. Sri. MAYR THAKKAR, MUMBAI

ITSSA 631/MUM/2003

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 0002 (ITAT-MUMBAI)
• Duration Of Justice: 10 year(s) 5 month(s) 6 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 29-01-2014
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 13-11-2013
• Assessment Year: misc
• Appeal Filed On: 22-08-2003
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: B N RAO
• Keywords: Corroborative evidences; Block assessment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUM BAI . . , , BEFORE SHRI B. R. MITTAL, JM AND SHRI SANJAY ARORA , AM IT(SS) NO. 631/MUM/2003 (BLOCK PERIOD FROM 01.04.1988 TO 23.03.1999) DY. CIT, CENTRAL CIRCLE 18 & 19, 6 TH FLOOR, OLD CGO BLDG., ANNEXE, M. K. MARG, MUMBAI 400 020 / VS. USHA MAYUR THAKKAR & TWO SONS VIVEK AND VATSAL M. THAKKAR L/H OF LATE MAYUR THAKKAR 21, KSHITJI, HILL ROAD, BANDRA (WEST), MUMBAI-400 050 ./! ./PAN/GIR NO. ( ' # /APPELLANT ) : ( $ # / RESPONDENT ) ' # % / APPELLANT BY : SHRI SANTOSH KUMAR $ # & % / RESPONDENT BY : SHRI B. N. RAO ' ()* & + / DATE OF HEARING : 14.11.2013 ,-. & + / DATE OF PRONOUNCEMENT : 29.01.2014 / / O R D E R PER SANJAY ARORA, A. M.: THIS IS AN APPEAL BY THE REVENUE DIRECTED AGAINST T HE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS) (CENTRAL) - VII, MUMBAI (C IT(A) FOR SHORT) DATED 30.04.2003, PARTLY ALLOWING THE ASSESSEES APPEAL CONTESTING IT S BLOCK ASSESSMENT FOR THE PERIOD 01.04.1988 TO 23.03.1999 VIDE ORDER U/S.158BC(C) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) DATED 31.03.2001. 2. THE APPEAL RAISES, IN PRINCIPAL, TWO ISSUES PER GROUND NOS. 1 AND 2; WHICH WE SHALL TAKE UP IN SERIATIM. THE REVENUES FIRST GROUND, EN UMERATED OVER FOUR CLAUSES, I.E., NUMBERING 1(I) TO (IV), CONCERNS THE QUANTUM OF CAS H PREMIUM RECEIVED BY THE ASSESSEE 2 IT(SS) NO. 631/MUM/2003 (B.P. 01.04.88 TO 23.03.99) DY. CIT VS. USHA MAYUR THAKKAR & OTHRS. ON THE SALE OF N.G.L./NAPTHA BASED PRODUCTS; THE SA ID PRODUCTS, WHICH STOOD PROCURED ON THE BASIS OF QUOTA FIXED BY THE MINISTRY OF PETROLE UM, GOVERNMENT OF INDIA, ENJOYING A HEAVY PREMIUM IN THE OPEN MARKET. ON THE BASIS OF T HE MATERIAL FOUND DURING SEARCH U/S.132(1) IN THAKKAR GROUP OF COMPANIES (OF WHICH THE ASSESSEE IS A PART) ON 21.01.1999, MATERIAL WAS FOUND AND SEIZED IN RELATI ON TO THE SALE OF THE SAID PRODUCTS AT A PREMIUM, WHICH WAS MADE OVER IN CASH AND REMAINED U NACCOUNTED. THE FIRST APPELLATE AUTHORITY, WHILE ACCEPTING AND ENDORSING THE FINDIN GS OF THE ASSESSING AUTHORITY IN RELATION TO THE MODUS OPERANDI BEING FOLLOWED FOR REALIZING THE SAME, DIFFERED WI TH REGARD TO THE QUANTUM THEREOF. WHILE THE ASSESSING OFFICER (A.O.) ESTIMATED THE SAME AT 85.7% OF THE AMOUNT AT WHICH THE SALE WAS BOOKED IN ACCOU NTS, THE LD. CIT(A) HAS ESTIMATED THE SAME AT 30%. THE ASSESSEE IS NOT IN APPEAL, SO THAT THE ONLY ISSUE BEFORE US IS THE VALIDITY OF SAID REDUCTION. 3. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. 3.1 THE DIFFERENCE THAT ATTENDS THE TWO ESTIMATES B Y THE AUTHORITIES BELOW IS, ON ITS FACE VERY SURPRISING INASMUCH AS THE SAME COULD ONL Y BE ON THE BASIS OF THE MATERIALS GATHERED IN SEARCH, SO THAT ORDINARILY IT SHOULD NO T LEAD TO ANY DIFFERENCE, MUCH LESS TO THE EXTENT IT EXISTS IN THE INSTANT CASE. ON A QUERY IN THIS RESPECT RAISED BY THE BENCH DURING HEARING, OUR ATTENTION WAS DRAWN TO THE RELEVANT WO RKING BY THE A.O., I.E., ON THE BASIS OF WHICH THE PREMIUM STANDS COMPUTED BY HIM AT 85.7% , WHICH IS AS UNDER: (REFER PAGES 49, 50 OF THE ASSESSMENT ORDER) A-10/PAGE 1 SEIZED FROM THE RESIDENCE OF THE ASSES SEE SHOWS A COPY OF FAX SHOWING: (A) RATE OF SALE OF NAPHTHA TO B. R. INDUSTRIES FRO M M/S. RAM REMEDIES PVT. LTD. EXAMPLE, AGAINST TANKER NO. GJ5V-4333, THE WEIGHT O F CHEMICAL APPEARS AT 8440 KG. I.E. (8,440 X 1.4) 11,816 LITRE WHICH I S EQUIVALENT TO ONE TANKER OF 12KL. SALE PROCEEDS APPEARS AT RS.97,060/- THERE FORE, RATE PER LITRE WILL BE: 97,060/11,816 = 8.21 3 IT(SS) NO. 631/MUM/2003 (B.P. 01.04.88 TO 23.03.99) DY. CIT VS. USHA MAYUR THAKKAR & OTHRS. (B) PAGE 7 TO 12 OF A-10 ARE COPIES OF INVOICES FRO M M/S. RAM REMEDIES PVT. LTD. TO B. R. INDUSTRIES AS PER WHICH THE RATE IS RS.10 PER KG. I.E. RS.7 PER LITRE (10 X 0.7). (C) ON THE RIGHT HAND SIDE OF THIS PAGE THE ACTUAL PREMIUM IS WRITTEN BY HAND AGAINST CERTAIN INDIVIDUALS REPRESENTING SALE PARTIES, SUCH AS RS.13.00 AGAINST SANDEEP, RS.12.50 AGAINST AJIT, ETC. IN OTHER WORDS, THE RATE OF NAPHTHA CHANGES FROM MA NUFACTURERS TO TRADERS. M/S. RRPL __________ BR IND. __________ OPEN MARKET MANUFACTURER RS.8.21 PER KG. TRADER 13.00 PER KG. OFFICIALLY THROUGH INVOICE RS.7 PER KG. THEREFORE, PERCENTAGE PREMIUMS WILL BE: 13.00 7.00 = 6.00 7.00 7.00 = 85.7% EVEN AS OBSERVED BY THE BENCH ON ITS PERUSAL, THE A .O. HAS APPARENTLY COMMITTED A MISTAKE INASMUCH AS WHILE THE PURCHASE RATE OF RS . 8.21 IS PER LITRE, THE SALE RATE IN THE OPEN MARKET (RS.13) IS ON PER KG. BASIS (1 KG. = 1. 4 LTR.). THE CORRECT COMPARISON COULD ONLY BE WITH REFERENCE TO THE SAME UNIT OF MEASUREM ENT. ACCORDINGLY, IF THE PURCHASE AND SALE RATES ARE TAKEN AT RS.10 PER KG. AND RS.13 PER KG. RESPECTIVELY, THE PREMIUM (RS.3) IS WORKED TO 30% OF THE BOOK VALUE (OF THE SALE). THE LD. CIT(A) VIDE PARA 11 OF HIS ORDER HAS CLARIFIED THIS ASPECT AND ALLOWED RELIEF TO THE ASSESSEE ONLY ON THE SAME BASIS, STATING THAT DIFFERENT PERCENTAGES OF PREMIUM WORKED OUT ON THE BASIS OF DIFFERENT PARTIES RANGED BETWEEN 13% TO 33%, AND WHICH INFORMS HIS ESTIMATIO N OF 30%. THE LD. DEPARTMENTAL REPRESENTATIVE (DR), ON BEING CONFRONTED WITH THE S AME DURING THE COURSE OF THE HEARING, WAS UNABLE TO CONTROVERT THE SAID FINDING BY THE FI RST APPELLATE AUTHORITY OR EVEN OTHERWISE FURNISH ANY EXPLANATION. ACCORDINGLY, WE ARE OF THE PRIMA FACIE VIEW THAT THE QUANTUM OF THE CASH PREMIUM AT 30%, I.E., AS DETERMINED BY THE LD. CIT(A), IS REASONABLE. THIS WOULD 4 IT(SS) NO. 631/MUM/2003 (B.P. 01.04.88 TO 23.03.99) DY. CIT VS. USHA MAYUR THAKKAR & OTHRS. OF COURSE BE SUBJECT TO THE REVENUES GROUND 1(II), EMPHASIZING THAT THE ASSESSED INCOME IN THAT CASE STANDS TO FALL BELOW THE RETURNED INCO ME, WHICH WE SHALL CONSIDER LATER, I.E., UPON CONSIDERING THE ASSESSEES OTHER GROUNDS. 3.2 THE OTHER ISSUE IN THIS REGARD THAT SURVIVES IS THAT RAISED PER GROUND 1(V), WHICH READS AS UNDER: 1.(V) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN DIRECTING THE A.O. TO CALCULATE THE QUANTUM OF PROT ECTIVE ASSESSMENT BY TAKING CASH PREMIUM @ 30% AS AGAINST 85.7% TAKEN BY THE A.O. THE BRIEF FACTS IN RELATION TO THE SAME ARE THAT TH E ASSESSEE, A PART OF THE THAKKAR FAMILY, WAS FOUND TO BE ACTING IN LEAGUE WITH M/S. APEX METCHEM (P.) LTD. (AMPL), A JAIPUR BASED COMPANY, FOR THE SALE OF THE SAID PROD UCTS. ACCORDINGLY, ADDITION AT RS.5,83,074/- AND RS.6,63,029/- ON ACCOUNT OF UNACC OUNTED COMMISSION, ESTIMATED AT 10%, WAS MADE FOR A.Y. 1998-99 AND 1999-2000 RESPEC TIVELY. BESIDES, THERE WERE HEAVY CASH DEPOSITS IN THE BANK ACCOUNT OF AMPL (I.E., WI TH UNION BANK OF INDIA, COTTON GREEN BRANCH, WADALA, MUMBAI) FOR THESE TWO YEARS, WHICH NEEDED TO BE EXPLAINED. THE CASH PREMIUM THEREON WAS WORKED OUT AT 85.7% AT RS.58.31 LACS AND RS.66.30 LACS FOR THE TWO YEARS RESPECTIVELY (REFER PG.85 OF THE ASSESSMENT O RDER). DEDUCTING THE AMOUNT ALREADY ASSESSED IN THE ASSESSEES HANDS BY WAY OF COMMISSI ON, THE BALANCE AMOUNT OF RS.52,47,665/- AND RS.59,67,265/- FOR THE SAID TWO YEARS RESPECTIVELY, WAS ASSESSED IN THE ASSESSEES HANDS AS UNDISCLOSED INCOME ON A PROTECT IVE BASIS. IN APPEAL, THE LD. CIT(A) DELETED THE ADDITION/S MA DE ON ACCOUNT OF COMMISSION INCOME, HOLDING THAT NO MATERIAL HAD BEEN BROUGHT O N RECORD BY THE A.O. TO EXHIBIT EXISTENCE OF ANY AGENCY RELATIONSHIP BETWEEN THE AS SESSEE AND AMPL, SO THAT NO ADDITION ON THAT ACCOUNT COULD BE MADE IN THE HANDS OF THE A SSESSEE, WHETHER SUBSTANTIVE OR PROTECTIVE, WHICH THOUGH IS VALID IN LAW, BEING MAD E TO SAFEGUARD THE INTEREST OF THE REVENUE, ADVERTING TO THE DECISION BY THE APEX COUR T IN THE CASE OF LALJI HARIDAS VS. ITO [1961] 43 ITR 387 (SC), BESIDES OTHERS. WITH REGARD TO THE PROTECTIVE (OR ALTERNATE) ASSESSMENT IN RESPECT OF THE CASH PREMIUM, IN HIS V IEW THE ASSESSMENT IN THE HANDS OF 5 IT(SS) NO. 631/MUM/2003 (B.P. 01.04.88 TO 23.03.99) DY. CIT VS. USHA MAYUR THAKKAR & OTHRS. AMPL HAVING NOT ATTAINED FINALITY, IT WAS CONSIDERE D PROPER BY HIM TO MAINTAIN STATUS QUO , SO THAT THE ASSESSMENT COULD CONTINUE TO OBTAIN, ALBEIT ON A PROTECTIVE BASIS. 3.3 THE REVENUE IMPUGNS THE DIRECTION BY THE LD. CI T(A) FOR A CORRESPONDING REDUCTION OF THE CASH PREMIUM TO 30%, I.E., AS AGAI NST 85.7% WORKED OUT BY THE A.O. ONCE WE HAVE FOUND THE PROPORTION OF CASH PREMIUM A T 30% AS REASONABLE, THE SAME WOULD NORMALLY BE APPLICABLE AND, THUS, RECOMMEND I TSELF FOR ADOPTION IN THE CASE OF SALES MADE IN THE ACCOUNT OF AMPL AS WELL. ON A QUE RY BY THE BENCH DURING THE HEARING WITH REGARD TO THE STATUS OF THE ASSESSMENT IN THE CASE OF AMPL, IT WAS SUBMITTED BY THE LD. AUTHORIZED REPRESENTATIVE (AR), THE ASSESSEES COUNSEL, THAT THE SAME HAS SINCE ATTAINED FINALITY BY THE ORDER BY THE TRIBUNAL (JAI PUR BENCH), PLACING ON RECORD A COPY OF THE SAID ORDER, FURTHER STATING THAT THE QUANTUM OF CASH PREMIUM HAS BEEN FIXED AT 2%. IN HIS VIEW, THE SUBSTANTIVE ASSESSMENT HAVING BEEN CO NFIRMED, THE PROTECTIVE ASSESSMENT, AT WHATEVER QUANTUM, COULD NOT HOLD. THE ASSESSEES ARGUMENT AS MADE BY THE LD. AR QUA THE NON-SURVIVORSHIP OF THE PROTECTIVE ASSESSMENT IS UNEXCEPTIONAL. HOWEVER, TH E SAME IS DE HORS THE MATERIAL ON RECORD AND THE FACTS THAT STAND ESTABLISHED; RATHER , AS WE SHALL PRESENTLY SEE, IS MISLEADING. REFERENCE IN THIS CONTEXT IS MADE TO PGS.73 TO 85 O F THE ASSESSMENT ORDER; PARA 9(A) THROUGH 9(E) OF THE APPELLATE ORDER; AND THE TRIBUN ALS ORDER IN THE CASE OF AMPL (IN ITA NO.09/JP/2008 DATED 24.05.2013/COPY ON RECORD) IN R ELATION TO ITS BLOCK ASSESSMENT. IT WOULD BE RELEVANT TO BRIEFLY RECOUNT THE FACTS H ERE. COPY OF THE SAID BANK ACCOUNT (NUMBERED 11166), OPENED ON 01.10.1997, ALO NG WITH THE SIGNED BLANK CHEQUES AND BLANK AUTHORIZATION LETTERS (ON THE LETTER HEAD OF AMPL) WERE SEIZED FROM THE ASSESSEES RESIDENCE AND OFFICE AS WELL AS FROM THE RESIDENCE OF HIS BROTHER, SHRI ATUL M. THAKKAR. THE INTRODUCTION FOR THE OPENING OF THE SA ID ACCOUNT AS WELL AS THE ADDRESS AND THE PHONE NUMBERS COMMUNICATED TO THE BANK FOR THE PURPOSE, WERE OF (MEMBERS OF) THE THAKKAR FAMILY. THE COMPANY, ON AN ENQUIRY, AVERRED THE SAID ACCOUN T TO BE OPERATED BY THE THAKKAR FAMILY, WITH IT BY EARNING ONLY A NOMIN AL COMMISSION . SHRI MANOJ THAKKAR AND SHRI VINOD (CASHIER OF SHRI SUNIL THAKKAR, THE ASSESSEES BROTHER), WERE FOUND TO 6 IT(SS) NO. 631/MUM/2003 (B.P. 01.04.88 TO 23.03.99) DY. CIT VS. USHA MAYUR THAKKAR & OTHRS. HAVE BEEN RECEIVING DDS/POS PURCHASED AGAINST DEBIT S TO THE SAID BANK ACCOUNT OF AMPL. THE DIRECTOR OF THE SAID COMPANY STATING THE ASSESSEE TO BE THE BENEFICIARY OF THE SAID ACCOUNT, AND THE ADDRESS OF THE ASSESSEES PAR TNERSHIP FIRM, M/S. SUNIL CHEMCIAL INDUSTRIES (BEING THE FLAGSHIP CONCERN OF THE GROUP ), I.E., 15, KOLISAMAJ BUILDING, SEWRI (E), MUMBAI, BEING MENTIONED AS THE LOCAL ADDRESS O F THE SAID FIRM IN MUMBAI, THE ASSESSEE WAS CONSIDERED AS THE BENEFICIARY THEREOF. THE CASH PREMIUM AT THE ADOPTED RATE OF 85.7% WAS WORKED OUT ON THE TOTAL CASH DEPOSIT, I.E., AT RS.68.04 AND RS.77.37 LACS FOR THE TWO CONSECUTIVE YEARS RESPECTIVELY. THE FIRST A PPELLATE AUTHORITY, ON AN EXAMINATION OF THE MATTER, AS AFORE-NOTED, DELETED THE ADDITION ON ACCOUNT OF COMMISSION. THE ADDITION FOR THE CASH PREMIUM WAS RETAINED, I.E., IN PRINCIP LE, THOUGH SCALED DOWN IN VOLUME TO THE PREMIUM AS ASSESSED BY HIM, I.E., AT 30%, AS AGAINS T 85.7% BY THE A.O. THE ADDITION WAS RETAINED INASMUCH AS THE ASSESSMENT IN THE CASE OF AMPL HAD NOT ATTAINED FINALITY, AND TOWARD WHICH THE ASSESSEE HAS RELIED BEFORE US ON T HE ORDER BY THE JAIPUR BENCH OF THE TRIBUNAL (SUPRA). THE SAID ORDER IS IN RESPECT OF P ENALTY PROCEEDINGS U/S. 158BFA(2) QUA THE RELEVANT BLOCK ASSESSMENT AND NOT IN ITS RESPEC T PER SE. A READING THEREOF, HOWEVER, CONFIRMS THAT THOUGH THE ENTIRE AMOUNT (OF RS.253.2 4 LACS) ROUTED THROUGH THE SAID BANK ACCOUNT FOUND UNDISCLOSED INCOME WAS ADDED BY THE R EVENUE, THE TRIBUNAL FOUND THAT THE COMPANY HAD ONLY ALLOWED SHRI THAKKAR TO USE THE SA ID ACCOUNT AND, ACCORDINGLY, DETERMINED ITS INCOME AT 2% OF THE TOTAL TURNOVER I N ACCOUNT BY WAY OF COMMISSION. 3.4 IN VIEW OF THE FOREGOING, THE FOLLOWING EMERGES CLEARLY FROM THE ORDER MADE BY THE TRIBUNAL (JAIPUR BENCH) IN THE CASE OF AMPL AND BY THE REVENUE IN THE PRESENT CASE: A) THAT THE TRIBUNAL (JAIPUR BENCH) FOUND AS A MATTER OF FACT THAT THE SAID BANK ACCOUNT OF AMPL WAS BEING OPERATED FOR AND ON BEHAL F OF THE THAKKAR GROUP, I.E., HAS ACCEPTED THE CLAIM AS MADE BY IT BEFORE THE REV ENUE IN THE INSTANT CASE; B) THE ENTIRE TRANSACTIONS IN THE SAID ACCOUNT WERE NO T DISCLOSED EITHER IN THE BOOKS OF AMPL OR ANY OTHER COMPANY/ENTITY OF THE THAKKAR GRO UP, WHO, INCLUDING THE ASSESSEE, WERE FOUND; RATHER, ADMITTEDLY, ENGAGED I N THE UNACCOUNTED SALE OF PETROLEUM PRODUCTS IN THE OPEN MARKET, WITH THE ESTIMATION OF CASH PREMIUM, I.E., THE PREMIUM COLLECTED IN CASH OVER AND ABOVE THE BI LL AMOUNT, BEING THE SUBJECT MATTER OF DISPUTE BEFORE US; 7 IT(SS) NO. 631/MUM/2003 (B.P. 01.04.88 TO 23.03.99) DY. CIT VS. USHA MAYUR THAKKAR & OTHRS. C) THE CASH DEPOSIT IN THE SAID BANK ACCOUNT, AGAINST WHICH AS IT APPEARS DDS/POS STOOD PURCHASED FOR REMITTANCES, NEED TO BE EXPLAIN ED AS TO THEIR NATURE, SOURCE AND PURPOSE; D) APART FROM THE MARGINAL COMMISSION, ESTIMATED AT 2% TO AMPL, AND BROUGHT TO TAX IN ITS HANDS, IT HAD NO OTHER INTEREST IN THE S AID ACCOUNTS OR THE AMOUNTS DEPOSITED THEREIN; E) THE ENTIRE TRANSACTIONS WERE UNDISPUTEDLY OUTSIDE B OOKS. ACCORDINGLY, THE ENTIRE INVESTMENT AS WELL AS THE INCOME ARISING ON THE SAI D TRANSACTIONS IS OUTSIDE BOOKS, AND WOULD THEREFORE NEED TO BE CONSIDERED, AND ON A SUBSTANTIVE BASIS . THE CASH PREMIUM PER SE , THEREFORE, MAY NOT BE OF MUCH RELEVANCE, EVEN AS THE TRIBUNALS ORDER ON QUANTUM IN THE CASE OF AMPL MAY ALSO HAVE A BEARING THEREON; AND F) THE ASSESSEE HAS ADMITTED CASH PREMIUM AT 30% AND, FURTHER, ALSO NOT DISPUTED THE FINDINGS BY THE FIRST APPELLATE AUTHORITY IN RELATI ON TO THIS ACCOUNT, SO THAT THE SAME HAVE TO BE CONSIDERED AS HAVING ATTAINED FINALITY. THE MATTER, IN OUR CLEAR VIEW, IN VIEW OF THE FACTS AS CRYSTALLIZED, SHALL HAVE TO BE REMANDED BACK FOR AFRESH ADJUDICATION. THE MATTER QUA THE REVENUES GROUND NO. 1(V) IS ACCORDINGLY RESTORED FOR BEING DECIDED AFRESH IN LI GHT OF THE OBTAINING FACTS AND OUR FOREGOING OBSERVATIONS. WE MAY AT THIS STAGE ALSO STATE THAT IT MAY APPEAR THAT WE HAVE EXTENDED OUR PURVIEW IN THE MATTER IN VIEW OF THE REVENUES GROU ND NO.1 (V) (SUPRA). THE ARGUMENT IS MISCONCEIVED BOTH IN THE FACTS OF THE CASE AND IN L AW. WE HAVE ALREADY EXPLAINED THAT THE FACTS IN RELATION TO THE PROTECTIVE ASSESSMENT WERE NOT CLEAR, WITH BOTH THE PARTIES DENYING THE TRANSACTIONS, PUTTING IT TO THE OTHER, SO THAT THE REVENUE PROCEEDED BY ADDING THE ENTIRE AMOUNT IN BOTH THE CASES/ASSESSMENTS. IN FAC T, THE PROTECTIVE ASSESSMENTS ARE MADE, EVEN AS SOUGHT TO BE CLARIFIED BY THE LD. CIT(A) WI TH REFERENCE TO FEW DECISIONS, EVEN THOUGH THE MATTER IS LEGALLY WELL SETTLED, TO ENABLE THE ASSESSMENT OF THE INCOME IN THE HANDS OF THE RIGHT PERSON . THE SAME IN FACT STOOD SUSTAINED BY HIM ONLY FOR THAT REASON. THE ENTIRE EXERCISE AND, IN FACT, THE CONCEPT OF PR OTECTIVE ASSESSMENT ITSELF, WOULD STAND DEFEATED AND RENDERED AS OF NO MOMENT AND WITHOUT P URPOSE, I.E., OTHERWISE. NO ASSESSMENT, IT NEEDS TO BE APPRECIATED, CAN EVEN OT HERWISE BE FINALIZED UNLESS THE FULL FACTS NECESSARY AND MATERIAL FOR THE SAME ARE FOUND , WHILE CLEARLY THE OWNERSHIP OF THE 8 IT(SS) NO. 631/MUM/2003 (B.P. 01.04.88 TO 23.03.99) DY. CIT VS. USHA MAYUR THAKKAR & OTHRS. FUNDS ROUTED THROUGH THE SAID BANK ACCOUNT HAD NOT BEEN ESTABLISHED, WITH BOTH THE PARTIES TRYING TO OBFUSCATE THE FACTS. WE MAY IN TH IS REGARD ADVERT INTER ALIA ON THE DECISION IN THE CASE OF KAPURCHAND SHRIMAL VS. CIT [1981] 131 ITR 451 (SC). 3.5 THE ASSESSMENT AS MADE IN RESPECT OF THE INCOME ARISING IN RELATION TO THE SAID BANK ACCOUNT OF AMPL, JAIPUR IS ACCORDINGLY RESTORE D BACK TO THE FILE OF THE A.O. FOR FRESH DETERMINATION BY HIM IN LIGHT OF THE FACTS AS CRYSTALLIZED UP TO NOW; THE FINDINGS BY THE APPELLATE AUTHORITIES, KEEPING IN VIEW OUR OBSE RVATIONS, AND AFTER ALLOWING THE ASSESSEE PROPER OPPORTUNITY TO PRESENT ITS CASE. 3.6 WE MAY NEXT DWELL ON THE REVENUES GROUND NO.1 (II), CONTENDING THAT THE ADDITION BY ADOPTING THE CASH PREMIUM AT 30%, AT RS .55.13 LACS, WORKS TO LESS THAN THE INCOME AS RETURNED BY THE ASSESSEE HIMSELF, I.E., R S.70 LACS. THE GROUND IS NOT UNFOUNDED AND, IN OUR VIEW, THE DIFFERENCE ARISES PRIMARILY O N ACCOUNT OF DIFFERENCE IN THE RATE OF CASH PREMIUM INASMUCH AS ONLY A COMPLETE STUDY OF T HE CASH FLOWS WOULD YIELD THE EXACT RATE, WHICH HAS NOT BEEN UNDERTAKEN, AND EVEN GOING BY THE WORKING BY THE LD. CIT(A), THE RATES FOUND BY HIM ARE SUBJECT TO WIDE VARIATIO N, AND WHICH IS IMPROBABLE, GIVEN THAT THE OBTAINING MARKET RATE/S WOULD BE THE SAME ACROS S DIFFERENT PARTIES AND, BESIDES, WHY WOULD ONE SELL AT A LOWER RATE IF THE PRODUCT/S FET CHES A HIGHER RATE ? THE LD. CIT(A) HAS, HOWEVER, VIDE PARA 33 OF HIS ORDER, TAKEN CARE OF T HIS CONTINGENCY, HOLDING THAT IN VIEW THEREOF OR FOR ANY OTHER REASON, BEING CHIEFLY THE RELIEF ALLOWED AT THE APPELLATE STAGE, THE ASSESSED INCOME FALLS BELOW THE RETURNED INCOME OF RS.70 LACS, THE ASSESSMENT OF THE UNDISCLOSED INCOME SHALL BE DETERMINED AT RS.70 LAC S. WE FIND THE SAID FINDING AS REASONABLE IN THE FACTS AND CIRCUMSTANCES OF THE CA SE. THE SAID FINDING IS, IN ANY CASE OF THE MATTER, NOT DISPUTED OR APPEALED AGAINST BY THE ASSESSEE, SO THAT THE SAME BECOMES FINAL. THE REVENUES APPREHENSION UNDER THE CIRCUMS TANCES, BROUGHT OUT PER ITS GROUND NO. 1 (II), IS, THEREFORE, UNWARRANTED, EVEN AS WE CONFIRM THE SAID FINDING BY THE LD. CIT(A). FURTHER, IT NEEDS TO BE CLARIFIED, THAT TH E SAME SHALL APPLY ONLY UPON ASSESSMENT OF THE ENTIRE UNDISCLOSED INCOME, FROM WHATEVER SOU RCE, WITH WE HAVING REMITTED THE ASSESSMENT PARTLY, FOR FRESH ADJUDICATION. 9 IT(SS) NO. 631/MUM/2003 (B.P. 01.04.88 TO 23.03.99) DY. CIT VS. USHA MAYUR THAKKAR & OTHRS. 3.7 WE, ACCORDINGLY, CONFIRM THE CASH PREMIUM ON TH E SALE OF PETROLEUM PRODUCTS AT 30%. THE REVENUES GROUNDS 1(I) TO 1(IV) ARE DISPOS ED OF ACCORDINGLY, AND, SAVE GD. 1(II), WHICH SHALL OBTAIN, STAND DISMISSED IN RESUL T. 4. THE ONLY OTHER GROUND (GD. # 2) ASSUMED BY THE R EVENUE IS IN RELATION TO THE DELETION OF AN INCOME TO THE EXTENT OF RS.2,16,000/ -, OUT OF THE TOTAL INCOME OF RS.4.56 LACS ASSESSED BY THE A.O. ON ACCOUNT OF THE UNDISCL OSED PROFIT EARNED FROM TANKER OPERATIONS. 5. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. THE A.O. IN THE ABSENCE OF SUPPORTING EVIDENCES, OBSERVING THE ASSE SSEE TO HAVE CLAIMED A NUMBER OF EXPENSES, WHICH WERE NOT SUPPORTED, ASSESSED HIS IN COME FROM THE TANKER HIRING ACTIVITY IN TERMS OF SECTION 44AE OF THE ACT, I.E., AT RS.24 ,000/- PER TANKER PER ANNUM, AS AGAINST THE LOSS OF RS.2,39,488/- RETURNED BY THE ASSESSEE (IN RELATION TO A.Y. 1999-2000) (PGS.101-102 OF THE ASSESSMENT ORDER). THE BASIS OF THE RELIEF ALLOWED BY THE LD. CIT(A) IS THE FACT THAT THE SAID ACTIVITY STOOD DISCLOSED BY THE ASSESSEE PER ITS AUDITED ACCOUNTS, SO THAT THE SAME CANNOT BE SAID TO BE UNDISCLOSED AND SUBJECT TO BLOCK ASSESSMENT UNDER CHAPTER XIV-B OF THE ACT. WE FIND SUBSTANCE AND MER IT IN THE VIEW OF THE LD. CIT(A), BEING IN TERMS OF THE SETTLED LAW IN THE MATTER, SO THAT NO INFERENCE IN THE MATTER AT OUR END IS CALLED FOR. WE DECIDE ACCORDINGLY. 6. IN THE RESULT, THE REVENUES APPEAL IS PARTLY AL LOWED. '0. 1 ) & ' / ) 2 & 34 ORDER PRONOUNCED IN THE OPEN COURT ON JANUARY 29, 2 014 SD/- SD/- (B. R. MITTAL) (SANJAY ARORA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER ' * MUMBAI; 5( DATED : 29.01.2014 ).(../ ROSHANI , SR. PS 10 IT(SS) NO. 631/MUM/2003 (B.P. 01.04.88 TO 23.03.99) DY. CIT VS. USHA MAYUR THAKKAR & OTHRS. !'#$% &%'# / COPY OF THE ORDER FORWARDED TO : 1. ' # / THE APPELLANT 2. $ # / THE RESPONDENT 3. ' 6 ( ' ) / THE CIT(A) 4. ' 6 / CIT - CONCERNED 5. 9):; $ (<= , ' + <=. , ' * / DR, ITAT, MUMBAI 6. ;>? @* / GUARD FILE ( / BY ORDER, )/(* + (DY./ASSTT. REGISTRAR) , ' * / ITAT, MUMBAI