MRS LEENA V. DOSHI, MUMBAI V. ITO WARD-20(2)(4), MUMBAI

ITSSA 68/MUM/1997

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 3904 (ITAT-MUMBAI)
• Duration Of Justice: 23 year(s) 6 month(s) 24 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 20-10-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 26-03-1997
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJEEV HARIT
• Keywords: Question of law; Block assessment; Documents seized
• Section: 69C; 143(3); 150(1); 158BC(c); 153; 158BD; 147; 68; 148; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI BEFORE SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) IT(SS)A NO. 68/MUM/1997 ASSESSMENT YEAR: 1986-87 TO 1995-96 (BLOCK PERIOD) MRS. LEENA V. DOSHI, 2/3, TEHMI TERRACE, 805B, DR. AMBEDKAR ROAD, DADAR (T.T), MUMBAI-400014. VS. INCOME TAX OFFICER, WARD 20(2)(4), ROOM NO. 220, 2 ND FLOOR, PIRAMAL CHAMBERS, LALBAUG, MUMBAI-400013. PAN NO. ADWPD9626L APPELLANT R ESPONDENT ASSESSEE BY : MR. K. GOPAL, AR REVENUE BY : MR. RAJEEV HARIT, CIT-DR DATE OF HEARING : 21/09/2020 DATE OF PRONOUNCEMENT : 20/10/2020 ORDER PER N.K. PRADHAN, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE. THE RELEV ANT ASSESSMENT YEAR IS THE BLOCK PERIOD 1986-87 TO 1995-96. HEREIN, THE HO NBLE BOMBAY HIGH COURT HAS REMANDED THE MATTER BACK TO THE TRIBUNAL TO ADJ UDICATE THE ISSUE OF UNEXPLAINED LOANS ON SUBSTANTIVE GROUNDS AS WELL. 2. THE GROUNDS OF APPEAL FILED BY THE ASSESSEE READ AS UNDER : A APPLICABILITY OF CHAPTER XIV B: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE ASSESSING OFFICER ERRED IN TREATING THE TRANSACTIONS DISCLOSED IN THE REGUL AR BOOKS OF ACCOUNTS AS COVERED MRS. LEENA V. DOSHI . IT(SS)A NO. 68/M/1997 2 BY THE BLOCK ASSESSMENT BY MAKING ADDITIONS IN RESP ECT OF THESE TRANSACTIONS AS UNDISCLOSED INCOME OF THE APPELLANT UNDER THE PROVI SIONS OF CHAPTER XIV B. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE APPEAL IS FILED BY THE ASSESSEE DIRECTLY AGAINST THE BLOCK ASSESSMENT ORDE R PASSED BY THE ASSESSING OFFICER (AO). THE BLOCK PERIOD BEGINS FROM 01.04.19 85 AND ENDS ON 27.11.1995, INVOLVING ASSESSMENT YEARS FROM 1986-87 TO 1996-97 (UPTO 27.11.1995). THE ASSESSEE IS THE WIFE OF SHRI VIKRAM A. DOSHI, A PRO MOTER OF THE ATCO GROUP OF COMPANIES. SHE IS STATED TO BE A SHAREHOLDER IN MOS T OF THE ATCO GROUP OF COMPANIES. SEARCH U/S 132 OF THE ACT HAD TAKEN PLAC E AT HER RESIDENTIAL PREMISES ALONG WITH OTHER RELATIVES AND ATCO GROUP OF COMPANIES ON 27.11.1995. CONSEQUENTLY, NOTICE U/S 158BD WAS ISSU ED TO THE ASSESSEE ON 15.02.1996, IN RESPONSE TO WHICH SHE FILED A RETURN SHOWING INCOME OF RS.2,43,659/- FOR THE PERIOD 01.04.1995 TO 27.11.19 95. UNDISCLOSED INCOME DECLARED BY HER WAS NIL. HOWEVER, THE AO DETERMINED THE TOTAL UNDISCLOSED INCOME AT RS.30,30,919/-. THE ASSESSEE FILED APPEAL AGAINST THE BLOCK ASSESS MENT DIRECTLY BEFORE THE TRIBUNAL. THE GROUNDS RAISED INTER-ALIA BY THE ASSESSEE IN THAT APPEAL RELATED TO THE ADDITION MADE BY THE AO OF THE FOLLO WING CREDITS REFLECTED AS ON 31.03.1990 : A) KASHIBEN DUNGERSHI RS.1,00,000/ - B) SURAJBEN SHAH RS.1,50,000/ - C) DAOODAYAL MUNDHRA RS.4,50,000/ - D) M/S BHARAT TRADING CO. RS.5,00,000/ - DURING AY 1996 - 97. MRS. LEENA V. DOSHI . IT(SS)A NO. 68/M/1997 3 THE TRIBUNAL HELD AS UNDER : 5. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS. SO FAR AS THE CREDIT BALANCE IN THE NAME OF BHARAT TRADING CO. IS CONCERNED, WE SEE NO JUSTIFICATION AT ALL FOR SUSTAINING THE ADDITION. DOCUMENTS PLACED ON RECORD AT PAGES 2 9 TO 34 OF PAPER BOOK I CLEARLY INDICATE THAT IN TERMS OF THE AGREEMENT BETWEEN THE ASSESSEE AND BHARAT TRADING CO. THE LATTER WAS TO PLACE A SECURITY DEPOSIT OF R S.5.00 LACS WITH THE ASSESSEE IN CONSIDERATION OF ASSESSEE FINANCING THE SUBSCRIPTIO N TO PUBLIC ISSUE. THE DEPOSIT WAS REPAID ALSO WITHIN A PERIOD OF THREE MONTHS. THUS, THE ADDITION OF RS.5.00 LACS CANNOT BE SUSTAINED AND HENCE IS DELETED. 6. AS REGARDS THE OTHER THREE CREDITS, NO DOUBT, CO NFIRMATIONS WITH ADDRESSES OF THE PARTIES ARE ON RECORD. ADDRESSES, HOWEVER, BEING IN DIFFERENT INK AND DIFFERENT HAND, APPEAR TO HAVE BEEN ADDED SUBSEQUENTLY. THIS ASPECT , OF-COURSE, DO NOT AUTOMATICALLY ESTABLISH THE LOANS TO BE NON-GENUINE . MOREOVER, THE SIGNATURE OF DAOODAYAL MUNDHRA ON THE CONFIRMATION MATERIALLY DI FFERS FROM HIS SIGNATURE ON THE AFFIDAVIT. WE ARE CONSCIOUS OF THE FACT THAT A PERS ON MAY SIGN DIFFERENTLY AT DIFFERENT TIMES. BE THAT AS IT MAY, THE CONFIRMATIONS PLACED ON RECORD DO NOT INSPIRE MUCH CONFIDENCE. AT THE SAME TIME, THE A.O. HAS ALSO NOT BROUGHT ON RECORD ANY COGENT MATERIAL TO PROVE HER CASE. THUS, BOTH THE SIDES LA CK CONVINCING EVIDENCE. HENCE, IT WOULD MEET THE ENDS OF JUSTICE, IF ADDITION IS REST RICTED TO THE PEAK OF THE LOANS. AT PAGE 24 OF THE PAPER BOOK I, ASSESSEE HAS PLACED TH E PEAK WORKING WHICH MAY BE CONSIDERED BY THE A.O AFTER IGNORING THE BALANCES I N RESPECT OF BHARAT TRADING CO. 7. GROUND NO. 1(B) IS AGAINST THE ADDITION OF RS.4, 32,656/- BEING INTEREST ON ABOVE LOANS. ADDITION OF INTEREST ALSO BE RECONSIDERED IN THE LIGHT OF OUR DECISION IN GROUND NO. 1(A) ABOVE IN THIS CONNECTION, IT IS ALSO DIREC TED THAT INTEREST IN RESPECT OF SURAJBEN SHAH BE VERIFIED AS ACCORDING TO THE LEARN ED COUNSEL, THE SAME HAS BEEN TAKEN AT RS.49,175/.-INSTEAD OF AT RS.19,175/-. MRS. LEENA V. DOSHI . IT(SS)A NO. 68/M/1997 4 3.1 THUS THE TRIBUNAL DELETED THE ADDITION OF RS.5, 00,000/- (D) AND DIRECTED THE AO TO RESTRICT THE ADDITION TO THE PEAK OF LOAN S IN RESPECT OF THE OTHER THREE CREDITS (A), (B) & (C). 4. AGAINST THE SAID ORDER OF THE TRIBUNAL, THE ASSE SSEE FILED AN APPEAL BEFORE THE HIGH COURT. THE HONBLE BOMBAY HIGH COURT IN IT A NO. 1273 OF 2000 PASSED AN ORDER DATED 26.02.2002 OBSERVING AS UNDER : 5. MERE GLANCE AT THE IMPUGNED ORDER WOULD SHOW TH AT NO REASONS ARE TO BE FOUND IN THE ENTIRE ORDER OF THE TRIBUNAL AS TO WHY THE ALTERNATE CONTENTION OF THE APPELLANT/ASSESSEE WAS ACCEPTED BY THE TRIBUNAL WIT HOUT REJECTING MUCH LESS DISCLOSING SUBSTANTIVE CONTENTIONS RAISED BY THE AS SESSEE. NO REASONS ARE TO BE FOUND IN SUPPORT OF THE FINDINGS RECORDED BY THE TRIBUNAL WHILE ACCEPTING THE ALTERNATE SUBMISSION OF THE ASSESSEE. * * * * * * 7. READING ALL THE IMPUGNED ORDERS TOGETHER WOULD P RIMA FACIE SHOW THAT THERE IS NO APPRECIATION OF THE SUBSTANTIVE CONTENTION OF THE APPELLANT BY THE APPELLATE COURT/TRIBUNAL WHICH IS THE FINAL COURT FOR FINDING OF FACT. * * * * * * 11. WE, IN THE ABOVE BACKDROP, ARE OF THE OPINION T HAT INTEREST OF JUSTICE WOULD BE MET BY SETTING ASIDE THE IMPUGNED ORDERS OF THE TRI BUNAL IMPUGNED IN ALL THESE APPEALS TO THE EXTENT THEY ARE CHALLENGED IN RESPEC TIVE APPEALS. 4.1 THUS THE HONBLE HIGH COURT HELD THAT (I) THE T RIBUNAL HAS NOT CONSIDERED THE FIRST TWO SUBSTANTIVE GROUNDS RAISED BY THE ASS ESSEE ONE ON THE GROUND OF FACTS AND THE OTHER ON THE GROUND OF LAW, (II) THE TRIBUNAL STRAIGHTAWAY OPTED FOR DECIDING THE ALTERNATE GROUND AND DIRECTED THE AO TO ADD THE PEAK AMOUNT MRS. LEENA V. DOSHI . IT(SS)A NO. 68/M/1997 5 OF CREDIT, (III) THIS APPROACH IS NOT PROPER IN LAW , AS THE TRIBUNAL WAS UNDER AN OBLIGATION TO ADJUDICATE THE FIRST TWO SUBSTANTIVE GROUNDS RAISED BY THE ASSESSEE IN RESPECT OF THE GROUND RELATING TO UNEXP LAINED LOANS. THEREFORE, THE HONBLE HIGH COURT FELT THAT THE MA TTER SHOULD GO BACK TO THE TRIBUNAL FOR ADJUDICATION OF THE ISSUE OF UNEXP LAINED LOANS ON SUBSTANTIVE GROUNDS AS WELL. THUS THE MATTER HAS COME BEFORE US , FOR THE SECOND TIME. 5. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE EXPL AINS THAT THERE WERE SEVEN ASSESSEES FROM THE SAME GROUP WHOSE ORDER HAS BEEN REMANDED BACK BY THE HONBLE HIGH COURT TO THE TRIBUNAL VIDE ORDER DATED 26.02.2002, 05.03.2002 & 27.08.2005. REFERRING SPECIFICALLY TO THE ORDER OF THE TRIBUNAL DATED 26.09.2007 IN THE CASE OF ONE OF THE ASSESSEE NAMEL Y MR. VIKRAM DOSHI, THE LD. COUNSEL SUBMITS THAT THE TRIBUNAL HAS ALLOWED FULL RELIEF TO THE ASSESSEE FOR UNPROVED LOANS BASED ON THE SUBSTANTIVE MAIN SUBMIS SION OF THE ASSESSEE THAT THE DISPUTE MATTER OF UNPROVED LOANS IS A MATTER F OR REGULAR ASSESSMENT AND NOT BLOCK ASSESSMENT. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTA TIVE (DR), RELYING ON THE OF THE TRIBUNAL IN THE CASE OF MARGADARSI CHIT FUND (P.) LTD. V. ADDL. CIT (2013) 60 SOT 85 (HYD.-TRIB.) (URO), HANEMP PROPERTIES (P.) LTD. V. ACIT (2006) 101 ITD 19 (DELHI) AND THE DECISION OF THE C ALCUTTA HIGH COURT IN HOPE (INDIA) LTD. V. CIT (1993) 71 TAXMAN 387 (CAL.) SUBMITS THAT THE TRIBU NAL MAY CONSIDER DIRECTING THE AO TO INITIATE THE PROCEEDIN GS U/S 148(1) OF THE ACT. IN RESPONSE TO THE ABOVE, THE LD. COUNSEL SUBMITS THAT THE ASSESSEES CASE IS PROTECTED BY THE PROVISIONS OF SUB-SECTION (2) O F SECTION 150 OF THE ACT. MRS. LEENA V. DOSHI . IT(SS)A NO. 68/M/1997 6 FURTHER, RELIANCE IS PLACED BY HIM ON THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF RAKESH DUTT V. ACIT (2009) 311 ITR 247 (BOM.), LOTUS INVESTMENT LTD. V. ACIT (2007) 288 ITR 459 (BOM.). 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS ON RECORD. THE REASONS FOR OUR DECISIONS ARE GIVEN BELOW. WE BEGIN WITH THE CASE LAWS RELIED ON BY THE LD. D R. IN THE CASE OF MARGADARSI CHIT FUND (P.) LTD . (SUPRA), THE TRIBUNAL ALLOWED THE APPEAL OF THE ASSESSEE DELETING THE ADDITIONS MADE IN ALL THESE Y EARS. THE AO NOTED THAT THE TRIBUNAL HAD GIVEN A FINDING THAT THE INCOME IN QUE STION HAD ACCRUED TO THE ASSESSEE ONLY IN THE ASSESSMENT YEAR 2002-03, WHEN THE RIGHT TO RECEIVE THESE AMOUNTS HAD FRUCTIFIED. ON SAID BASIS, THE AO REOPE NED THE ASSESSMENT FOR AY 2002-03 BY ISSUING NOTICE U/S 148. THE TRIBUNAL HEL D THAT IN PURSUANCE OF ORDER PASSED BY THE TRIBUNAL THAT CERTAIN INCOME WA S TAXABLE IN RELEVANT ASSESSMENT YEAR AND NOT IN EARLIER YEARS, IN TERMS OF EXPLANATION 2 TO SECTION 153, THE ASSESSING OFFICER RIGHTLY INITIATED REASSE SSMENT PROCEEDINGS FOR ASSESSMENT YEAR IN QUESTION IN ORDER TO BRING SAID INCOME TO TAX EVEN IF THERE WAS NO SPECIFIC DIRECTION OF TRIBUNAL TO REOPEN THE ASSESSMENT. IN HANEMP PROPERTIES (P.) LTD. (SUPRA), THE TRIBUNAL HELD THAT THE JURISDICTION OF THE ASSESSING OFFICER U/S 158 BC AN D 143(3) IS SEPARATE AND WHAT IS ONCE ASSESSED U/S158BC CANNOT BE ASSESSED U /S 143(3) AND VICE VERSE . IN HOPE (INDIA) LTD . (SUPRA), THE HONBLE CALCUTTA HIGH COURT HELD THA T WHERE ANY INCOME WAS DELETED FROM AN ASSESSMENT IN HIGHER FORUM ON GROUND THAT IT WAS NOT INCOME OF THAT YEAR, THE AO HAD JUR ISDICTION TO INITIATE MRS. LEENA V. DOSHI . IT(SS)A NO. 68/M/1997 7 PROCEEDINGS U/S 147 TO ASSESSEE AS INCOME OF ANOTHE R YEAR WITHOUT ANY LIMITATION APPLYING TO ISSUE OF NOTICE U/S 148 OR T O COMPLETION OF ASSESSMENT OR REASSESSMENT. 6.1 WE TURN TO THE ASSESSMENT ORDER DATED 28.02.199 7 PASSED BY THE AO U/S 158BC(C) OF THE ACT. THE INTRODUCTORY PARAS ARE AS UNDER : 2.1 I HAD VERIFIED THE RETURNS OF THE INCOME FILED BY THE ASSESSEE FOR THE PERIOD COVERED BY THE BLOCK ASSESSMENT. A PERUSAL OF THE R ELEVANT BALANCE SHEETS SHOWED THAT THE FOLLOWING CREDITORS CLOSING BALANCES WERE REFLECTED AS ON 31.03.1990. A) KASHIBEN DUNGERSHI RS.1,00,000/ - B) SURAJBEN SHAH RS.1,50,000/ - C) DAOODAYAL MUNDHRA RS.4,50,000/- D) M/S BHARAT TRADING CO. RS.5,00,000/ - DURING AY 1996 - 97. 2.2 SINCE THE DOCUMENTS SEIZED DURING THE COURSE OF THE SEARCH REVEALED LARGE SCALE UNACCOUNTED TRANSACTIONS BUT ALL THESE RETURN S HAD ALREADY BEEN ACCEPTED U/S 143(1)(A) OF THE I.T. ACT ENQUIRIES INTO THE GENUIN ENESS OF THESE CREDITS BECAME NECESSARY. 6.2 AT THIS MOMENT, WE DISCUSS THE CASE LAWS RELIED ON BY THE LD. COUNSEL. IN THE CASE OF RAKESH N. DUTT (SUPRA), THE HONBLE BOMBAY HIGH COURT HELD THAT THE OBSERVATION OF THE TRIBUNAL IN ASSESSEES APPE AL AGAINST BLOCK ASSESSMENT, THAT ADDITIONS BY WAY OF UNDISCLOSED INCOME TO THE ASSESSEES INCOME BY APPLYING PROVISIONS OF SECTION 68 TO 69C COULD NOT BE MADE IN BLOCK ASSESSMENT OF THE ASSESSEE AND THE SAME COULD BE MA DE IN REGULAR ASSESSMENTS, AND THAT TOO OF TWO COMPANIES, COULD N OT BE SAID TO THE A FINDING OR DIRECTION FOR REOPENING ASSESSEES ASSESSMENT BEYOND A PERIOD OF 6 YEARS, MRS. LEENA V. DOSHI . IT(SS)A NO. 68/M/1997 8 AS THE ALLEGED UNDISCLOSED INCOME IF AT ALL TAXABLE , WOULD BE TAXABLE IN THE REGULAR ASSESSMENT OF THE TWO COMPANIES AND NOT IN THE REGULAR ASSESSMENT OF THE ASSESSEE. IN LOTUS INVESTMENTS LTD . (SUPRA), THE HONBLE BOMBAY HIGH COURT HELD IN RESPECT OF SECTION 150 OF THE ACT THAT THE COMMISS IONER (APPEAL)S OBSERVATIONS, WHILE DELETING DISALLOWANCES IN APPEA L AGAINST BLOCK ASSESSMENTS, THAT THE ASSESSING OFFICER WAS FREE TO LOOK INTO AND CONSIDER DISALLOWANCES U/S 148 IN RELEVANT ASSESSMENT YEARS IN TERMS OF SECTION 150(1) R.W. EXPLANATION 2 TO SECTION 153 COULD NOT BE CONS TRUED TO BE A DIRECTION TO REOPEN ASSESSMENTS SO AS TO ISSUE REASSESSMENT NOTI CES EVEN AFTER EXPIRY OF 6 YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEARS AS CONTEMPLATED U/S 150 AND THEREFORE, REOPENING AFTER EXPIRY OF 6 YEARS ON BASIS OF SAID OBSERVATION WAS TIME BARRED U/S 149 OF THE ACT. 6.3 WE FIND MERIT IN THE CONTENTIONS OF THE LD. COU NSELS THAT THE ASSESSEES CASE IS PROTECTED BY THE PROVISIONS OF SECTION (2) TO SECTION 150 OF THE ACT. THE SAME IS REPRODUCED BELOW: SECTION 150 (1) ........ (2) THE PROVISIONS OF SUB-SECTION (1) SHALL NOT APP LY IN ANY CASE WHERE ANY SUCH ASSESSMENT, REASSESSMENT OR RE-COMPUTATION AS IS RE FERRED TO IN THAT SUB-SECTION RELATES TO AN ASSESSMENT YEAR IN RESPECT OF WHICH A N ASSESSMENT, REASSESSMENT OR RE- COMPUTATION COULD NOT HAVE BEEN MADE AT THE TIME TH E ORDER WHICH WAS THE SUBJECT- MATTER OF THE APPEAL, REFERENCE OR REVISION, AS THE CASE MAY BE, WAS MADE BY REASON OF ANY OTHER PROVISION LIMITING THE TIME WITHIN WHICH ANY ACTION FOR ASSESSMENT, REASSESSMENT OR RE-COMPUTATION MAY BE TAKEN. MRS. LEENA V. DOSHI . IT(SS)A NO. 68/M/1997 9 6.4 AS MENTIONED EARLIER, THE HONBLE BOMBAY HIGH C OURT IN THE INSTANT CASE HAS OBSERVED THAT THERE IS NO APPRECIATION OF THE SUBSTANTIVE CONTENTION OF THE APPELLANT BY THE TRIBUNAL, WHICH IS THE FINAL CODE FOR FINDING OF FACT. THEREFORE, WE HAVE TO DECIDE THE SUBSTANTIVE CONTE NTION OF THE ASSESSEE, INSTEAD OF AGREEING WITH THE CONTENTIONS OF THE LD. DR THAT TRIBUNAL MAY CONSIDER DIRECTING THE AO TO INITIATE THE PROCEEDIN GS U/S 148(1) OF THE ACT. THE INSTANT CASE IS THUS DISTINGUISHABLE FROM THE CASE- LAWS RELIED ON BY THE LD. DR. 6.5 SIMILAR ISSUE AROSE BEFORE THE TRIBUNAL IN THE CASE OF SHRI VIKRAM DOSHI, WHO HAPPENS TO BE AN ASSESSEE FROM THE SAME GROUP. IN THAT ORDER DATED 26.09.2007, THE ITAT C BENCH, MUMBAI [IT(SS) A NO . 105/MUM/1996] HAS HELD THAT :- 8. THE ASSESSEE IS REGULARLY ASSESSED TO INCOME TA X. THE ASSESSEE IS ALSO MAINTAINING REGULAR BOOKS OF ACCOUNTS. ALL THE LOAN S WHICH HAVE BEEN TREATED BY THE ASSESSING AUTHORITY AS UNEXPLAINED HAVE ALREADY BEE N RECORDED IN THE BOOKS OF ACCOUNTS IN THE NORMAL COURSE OF BUSINESS AS AND WH EN THE LOANS WERE TRANSACTED. THE BALANCE SHEETS PREPARED BY THE ASSESSEE FROM TI ME TO TIME FOR DIFFERENT YEARS ALSO REFLECT THE LIST OF LOANS AVAILED BY THE ASSES SEE FROM OTHERS. THE BALANCES SHEETS HAVE ALREADY BEEN FILED BEFORE THE ASSESSING AUTHOR ITY ALONG WITH THE RETURNS OF INCOME FILED BY THE ASSESSEE FOR DIFFERENT ASSESSME NT YEARS IN THE PAST. ALL THOSE RETURNS WERE ACTED UPON AND ASSESSMENT COMPLETED. A LL THESE THINGS HAPPENED BEFORE THE DATE OF SEARCH. THEREFORE, IT IS TO BE S EEN, WITHOUT ANY CONTRADICTION THAT ALL THE LOANS AVAILED BY THE ASSESSEE AND TREATED AS UN EXPLAINED BY THE ASSESSING AUTHORITY IN THE IMPUGNED BLOCK ASSESSMENT HAVE ALR EADY BEEN DISCLOSED TO THE DEPARTMENT, BEFORE SEARCH ACTION. WHEN THESE LOANS HAVE ALREADY BEEN DISCLOSED TO THE DEPARTMENT, IT IS NOT POSSIBLE FOR THE ASSESSIN G OFFICER TO TREAT THOSE LOANS AS UNEXPLAINED FOR THE PURPOSE OF MAKING ADDITIONS IN THE IMPUGNED BLOCK ASSESSMENT. MRS. LEENA V. DOSHI . IT(SS)A NO. 68/M/1997 10 9. IT IS ALSO TO BE SEEN THAT NO MATERIAL WERE COLL ECTED IN THE COURSE OF SEARCH SO AS TO SHOW THAT THE LOANS ACCOUNTED BY THE ASSESSEE IN HIS BOOKS OF ACCOUNTS WERE OTHERWISE UNEXPLAINED OR BOGUS. IN THE COURSE OF BL OCK ASSESSMENT PROCEEDINGS, IN SPITE OF ALL HIS LEGAL ARGUMENTS, THE ASSESSEE HAS FILED THE DETAILS TO PROVE THE GENUINENESS OF THE LOANS. WHETHER THOSE EXPLANATION S ARE ACCEPTABLE OR NOT IS A DIFFERENT ISSUE. IN THE LIGHT OF THOSE EXPLANATIONS AND DETAILS FURNISHED BY THE ASSESSEE, IT IS NOT POSSIBLE TO COME TO AN IRREFUTA BLE CONCLUSION AS FAR AS THE IMPUGNED BLOCK ASSESSMENT IS CONCERNED THAT THE LOANS AMOUNT S WERE UNEXPLAINED. THEREFORE, IT IS TO BE SEEN THAT NO MATERIAL WERE AVAILABLE IN THE HANDS OF THE ASSESSING AUTHORITY SO AS TO DISCREDIT THE EARLIER DISCLOSURE ALREADY M ADE BY THE ASSESSEE. IT IS NOT NECESSARY TO REPEAT THE PLETHORA OF CASE LAWS WHICH CONSISTENTLY HELD THAT WHAT HAS BEEN ALREADY DISCLOSED CANNOT BE A MATTER OF BLOCK ASSESSMENT. THE ASSESSING OFFICER CANNOT INDULGE IN ROVING ENQUIRES REGARDING THE ISS UE THAT HAS ALREADY BEEN DISCLOSED IN THE BOOKS OF ACCOUNTS AND PLACED BEFORE THE DEPA RTMENTS. ALL SUCH ENQUIRIES AND INVESTIGATIONS SHOULD BE MADE BY THE ASSESSING OFFI CER IN A PROCEEDING KNOWN TO THE INCOME TAX LAW OTHER THAN THE BLOCK ASSESSMENT PROC EEDINGS. THEREFORE, WE ARE INCLINED TO ACCEPT TO THE SUBSTANTIVE GROUND RAISED BY THE ASSESSEE ON THE QUESTION OF LAW THAT WHETHER THE LOANS TREATED BY THE ASSESSING OFFICER AS UNEXPLAINED COULD BE TREATED BY THE ASSESSING OFFICER AS UNEXPLAINED COU LD BE TREATED AS FORMING PART OF THE UNDISCLOSED INCOME. WE HOLD THAT THE LOAN AMOUN T CANNOT BE MADE A SUBJECT MATTER OF A BLOCK ASSESSMENT ON THE BASIS OF THE RE VIEW MADE BY THE ASSESSING AUTHORITY. 6.6 FACTS BEING IDENTICAL, WE FOLLOW THE ABOVE ORDE R OF THE CO-ORDINATE BENCH. ALSO WE ARE GUIDED BY THE RATIO LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF RAKESH N. DUTT (SUPRA) AND LOTUS INVESTMENTS LTD . (SUPRA). BEFORE CONCLUDING, WE REMIND OURSELVES OF THE FOLLO WING OFT-QUOTED OBSERVATION OF BHAGWATI N.H., J ( AS HIS LORDSHIP T HEN WAS) IN A.V.FERNANDEZ V. STATE OF KERALA , AIR 1957 SC 657,P. 661:- MRS. LEENA V. DOSHI . IT(SS)A NO. 68/M/1997 11 IN CONSTRUING FISCAL STATUTES AND IN DETERMINING THE LIABILITY OF A SUBJECT TO TAX ONE MUST HAVE REGARD TO THE STRICT LETTER OF THE LAW. I F THE REVENUE SATISFIES THE COURT THAT THE CASE FALLS STRICTLY WITHIN THE PROVISIONS OF TH E LAW, THE SUBJECT CAN BE TAXED. IF, ON THE OTHER HAND, THE CASE IS NOT COVERED WITHIN THE FOUR CORNERS OF THE PROVISIONS OF THE TAXING STATUTE, NO TAX CAN BE IMPOSED BY INFERE NCE OR BY ANALOGY OR BY TRYING TO PROBE THE INTENTIONS OF THE LEGISLATURE AND BY CONS IDERING WHAT WAS THE SUBSTANCE OF THE MATTER. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED THROUGH NOTICE BOARD UNDER RULE 34 (4) OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963. SD/- SD/- (SAKTIJIT DEY) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED: 20/10/2020 RAHUL SHARMA SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI