DCIT, Circle - 4, Kolkata, Kolkata V. Kedar Nath Fatehpuria, Kolkata

ITSSA 71/KOL/2008

• Counselvise Citation: [2014] 121 COUNSELVISE.COM (IT) 9996 (ITAT-KOLKATA)
• Duration Of Justice: 5 year(s) 7 month(s) 30 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 29-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: misc
• Appeal Filed On: 30-05-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: YARINDER MEHTA
• Assessee Lawyers: SOUMITRA CHOW DHURY
• Keywords: Unexplained cash credit; Search and seizure; Block assessment
• Section: 143(3); 142(1); 263

Judgement Text

I.T.(SS)A. NO.: 71/KOL./ 2008 BLOCK ASSESSMENT YEAR : 1989 -90 TO 1999-2000 PAGE 1 TO 6 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA C BENCH, KOLKATA CORAM : SHRI ABRAHAM P. GEORGE (ACCOUNTANT MEMBER) AND SHRI GEORGE MATHAN (JUDICIAL MEMBER) I.T.(S.S.)A. NO.: 71/KOL./ 2008 BLOCK ASSESSMENT YEAR : 1989-1990 TO 1999-2000 DEPUTY COMMISSIONER OF INCOME TAX,................ ..APPELLANT CIRCLE-4, KOLKATA, P-7, CHOWRINGHEE SQUARE, 8 TH FLOOR, KOLKATA-700 069 -VS.- KEDAR NATH FATEHPURIA,............................. ......................RESPONDENT 1, R.N. MUKHERJEE ROAD, KOLKATA-700 001 [PAN : AADPF 5700 F] APPEARANCES BY: SHRI YARINDER MEHTA, CIT (D.R), FOR THE DEPARTMENT SHRI SOUMITRA CHOWDHURY, A.R., FOR THE ASSESSEE DATE OF CONCLUDING THE HEARING : JANUARY 27, 2014 DATE OF PRONOUNCING THE ORDER : JANUARY 29, 2014 O R D E R PER ABRAHAM P. GEROGE : 1. IN THIS APPEAL FILED BY THE REVENUE, IT ASSAILS AN ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-IV, KOLKATA DA TED 14.03.2008 WHEREBY HE DELETED AN ADDITION OF RS.8,38,95,000/- MADE BY THE ASSESSING OFFICER FOR UNEXPLAINED CASH CREDIT, IN A N ASSESSMENT DONE UNDER SECTION 143(3) READ WITH SECTION 158BD OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. WHEN THE MATTER CAME UP FOR HEARING, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ADDITION IN QUESTION WAS ALREADY AN ISSUE BEFORE THIS TRIBUNAL ON REVENUES APPEAL IN IT(SS)A. NO. 14/KOL /2008 AND THIS TRIBUNAL HAD CONFIRMED THE ORDER OF LD. CIT(APPEALS ), DELETING THE I.T.(SS)A. NO.: 71/KOL./ 2008 BLOCK ASSESSMENT YEAR : 1989 -90 TO 1999-2000 PAGE 1 TO 6 2 ADDITION MADE BY THE ASSESSING OFFICER. LD. COUNSEL FOR THE REVENUE FAIRLY AGREED THAT THE ISSUE STOOD COVERED BY THE EARLIER ORDER OF THIS TRIBUNAL. 3. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ORIGINAL ORDER UNDER SECTION 1 58BD WAS PASSED BY THE ASSESSING OFFICER ON 30.06.2003. THIS WAS SET A SIDE BY THE LD. CIT-II, KOLKATA ON 27.10.2005 INVOKING SECTION 263 OF THE A CT. ASSESSEES APPEAL BEFORE THIS TRIBUNAL AGAINST SUCH ORDER OF LD. CIT WAS NOT SUCCESSFUL. THE TRIBUNAL WHILE SUSTAINING THE ORDER OF LD. CIT MODI FIED HIS DIRECTION VIDE ITS ORDER DATED 25.01.2007 IN IT(SS)A. NO. 197/KOL/ 2005, INTER ALIA, OBSERVING AS UNDER:- 6. WE HAVE GIVEN OUR CAREFUL CONSIDERATION TO THE RIVAL SUBMISSIONS MADE BEFORE US AND HAVE PERUSED THE ORD ERS OF TAX AUTHORITIES. WE HAVE ALSO CONSIDERED THE PAPER BOOK FILED BY THE LD. COUNSEL FOR THE ASSESSEE AND THE CASE LAWS RELI ED UPON. IN THIS CASE, THE ASSESSEE HAS DISPUTED THE ORDER OF L D. CIT IN SETTING ASIDE THE ORDER OF AO BY INVOKING PROVISION UNDER SECTION 263. THE ASSESSEE HAS SUBMITTED THAT SINCE THE ENTIRE MATTER WAS SUBJUDICE BEFORE THE LD. CIT(A) WHEREIN THE ASSESSEE HAD DISPUTED THE ORDER OF AO ON VARIOUS GROUNDS INC LUDING ITS LEGALITY, THE ABOVE ORDER OF LD. CIT IN DIRECTING T HE A.O. TO MAKE FRESH ASSESSMENT IS NOT JUSTIFIED AS THE ASSESSMENT BY THE A.O. HAS BEEN COMPLETED BY CONDUCTING MANY HEARINGS AND TAKING INTO CONSIDERATION THE FACTS AND CIRCUMSTANCES INVO LVED IN THIS CASE. WE AFTER PERUSING RELEVANT DOCUMENTS AND EVID ENCES ON RECORD FIND THAT SO FAR AS THE ISSUE OF NOTICE UNDE R SECTION 143(2)/142(1) BEFORE COMPLETING BLOCK ASSESSMENT UN DER SECTION 158BD IS CONCERNED, THE SAME CERTAINLY TANT AMOUNT TO LAPSES ON THE PART OF THE A.O. CONSIDERING THE FACT THAT THERE ARE CONFLICTING DECISIONS ABOUT THE LEGALITY OF 158BD P ROCEEDINGS WITHOUT ISSUING NOTICE UNDER SECTION 143(2)/142(1). THOUGH THIS TRIBUNAL HAS TAKEN A VIEW AGAINST THE ASSESSEE WHILE DECIDING THE CASE OF ACIT VS.- T.B. GHOSH PVT. LTD . IN ITA NO. 116/CAL/1997 ORDER DATED 31.12.2001 AND A SIMILAR V IEW HAS BEEN AKEN BY THE ITAT, SPECIAL BENCH, LUCKNOW IN TH E CASE OF NAWAL KISHORE & SONS JEWELLERY VS.- DCIT REPORTED IN 87 ITD 407, STILL THERE ARE CONTRARY JUDGMENT TO THE ABOVE JUDGMENTS WHICH FAVOURS THE ASSESSEE AND IN THESE CIRCUMSTANC ES, THE OBSERVATION OF LD. CIT IN CONSIDERING THE ORDER OF A.O. IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENU E WAS CORRECT. HOWEVER, SO FAR AS THE SECOND STEP OF LD. CIT IN SETTING ASIDE THE ORDER OF A.O. AND THEREBY DIRECTING THE A .O. TO MAKE FRESH ASSESSMENT IS CONCERNED, IN OUR CONSIDERED OP INION, THE A.O. SHOULD RESTRICT HIMSELF WITH THE ADDITIONS MAD E BY HIM IN EARLIER ASSESSMENT EXCEPT COMPLETING FORMALITIES IN ISSUING I.T.(SS)A. NO.: 71/KOL./ 2008 BLOCK ASSESSMENT YEAR : 1989 -90 TO 1999-2000 PAGE 1 TO 6 3 NOTICE UNDER SECTION 143(2)/142(1) AND NO FRESH ADD ITIONS EXCEPT THOSE ALREADY MADE IN THE ORIGINAL ASSESSMEN T SHOULD BE MADE BY A.O. IN FRESH PROCEEDINGS, SINCE IN OUR CON SIDERED OPINION, THE BLOCK ASSESSMENT HAS BEEN COMPLETED BY THE A.O. AFTER CONSIDERING VARIOUS DOCUMENTS AND EVIDENCES P LACED BEFORE HIM AND MAKING A FRESH ADDITIONS/ ENQUIRY AP ART FROM ISSUING NOTICES UNDER SECTION 143(2) AND UNDER SECT ION 142(1) WILL TANTAMOUNT TO REVIEW THE EARLIER ORDER, WHICH IS NOT PERMISSIBLE UNDER THE ACT. WE, THEREFORE, MODIFY TH E DIRECTION OF LD. CIT IN THIS REGARD AND DIRECT THE A.O. TO MA KE FRESH ASSESSMENT ON THE SAME LINE AS MADE EARLIER APART F ROM COMPLETING THE FORMALITY BY ISSUING NOTICE UNDER SE CTION 143(2) AND UNDER SECTION 142(1). WE HOLD AND DIRECT ACCORD INGLY. MEANWHILE THE ASSESSING OFFICER HAD COMPLETED THE R EASSESSMENT BASED ON THE ORDER OF LD. CIT UNDER SECTION 263 OF THE AC T ON 29.12.2006. HOWEVER, THEREAFTER ON RECEIVING THE TRIBUNALS ORD ER DATED 25.01.2007 IN IT(SS)A. NO. 197/KOL/2005, ASSESSING OFFICER PAS SED A FRESH ASSESSMENT ON 31.12.2007 WHEREIN ADDITION OF RS.8,3 8,95,000/- ORIGINALLY MADE WAS PERSISTED WITH. 4. ASSESSEE MOVED IN APPEAL AGAINST ORDER DATED 31. 12.2007 OF THE ASSESSING OFFICER BEFORE LD. CIT(APPEALS). LD. CIT( APPEALS) DELETED SUCH ADDITION OF RS.8,38,95,000/-, INTER ALIA, OBSERVING AS UNDER :- I HAVE ALREADY HELD IN MY ORDER DATED 13.12.2007 I N APPEAL NO. 200/CIT(A)-IV/2006-07 THAT THE LOANS AMOUNTING TO RS.8,38,95,000/- ADDED U/S. 68 OF THE ACT IN THE HA NDS OF THE ASSESESE COULD NOT FORM PART OF THE BLOCK ASSESSMEN T AS THESE WERE DULY APPEARING IN THE REGULAR BOOKS OF ACCOUNT S OF THE ASSESSEE. BY MY SAID ORDER THE ADDITION WAS DIRECTE D TO BE DELETED. SINCE THE FACTS ARE THE SAME AND THE AOS ORDER DATED 31.12.2007 I.E. THE ORDER UNDER PRESENT APPEAL IS A REHASH OF THE EARLIER ORDER, THE ADDITION OF RS.8,38,95,000/- IS DIRECTED TO BE DELETED FOR THE REASONS ELABORATELY DISCUSSED IN MY ORDER DATED 13.12.2007 IN APPEAL NO. 200/CIT(A)-IV/2006-0 7. (II) AS REGARDS THE ISSUE AT (1) ABOVE I FIND THAT THE ORDER DATED 31.12.2007 BY THE A.O. HAS BEEN PASSED FOR THE PURP OSE OF GIVING EFFECT TO THE ITATS ORDER DATED 25.01.2007. IT IS CLEARLY SO MENTIONED IN PARA 2 OF THE AOS ORDER. THE DIREC TION OF THE ITAT WAS LIMITED TO COMPLYING WITH THE FORMALITY OF ISSUING NOTICE U/S. 143(2)/142(1) BEFORE PASSING THE ORDER U/S. 158BD. THIS WAS THE SAME DIRECTION WHICH WAS ALSO GIVEN BY THE CIT, KOLKATA-II BY HIS ORDER U/S. 263 IN COMPLIANCE TO W HICH THE AO HAD PASSED HIS ORDER DATED 29.12.2006 WHICH WAS ADJ UDICATED UPON BY ME EARLIER. AS THE DIRECTION OF THE HONBLE ITAT WERE I.T.(SS)A. NO.: 71/KOL./ 2008 BLOCK ASSESSMENT YEAR : 1989 -90 TO 1999-2000 PAGE 1 TO 6 4 ALREADY COMPLIED WITH IN ESSENCE BY THE AOS ORDER DATED 29.12.2006 I FIND THAT THERE WAS NO NEED TO PASS A FRESH ORDER FOR THE SO-CALLED COMPLIANCE OF THE ITATS ORDER. M OREOVER, WHEN THE AO WAS PASSING HIS ORDER DATED 31.12.2007 HE HAD IN HIS POSSESSION THE APPELLATE ORDER DATED 13.12.2007 OF THE CIT(A)-IV, KOLKATA IN APPEAL NO. 200/CIT(A)-IV/2006 -07. THE APPROPRIATE COURSE FOR THE A.O. WAS TO GIVE EFFECT TO THE CIT(A)- IV, KOLKATA/S ORDER DATED 13.12.2007 IN WHICH HE CO ULD HAVE ALSO INCORPORATED THE FACT THAT THE ORDER OF THE IT AT WAS ALREADY COMPLIED WITH BECAUSE NOTICES U/S 143(2) AN D 142(1) WERE ISSUED BEFORE PASSING ORDER DATED 29.12.2006. SURPRISINGLY WHEN I ENQUIRED FROM THE AO BY MY LETT ER NO. 301 DATED 04.03.2008 WHETHER MY ORDER DATED 13.12.2007 WAS GIVEN EFFECT TO, HE HAS, BY HIS LETTER NO. 982 DATE D 06.03.2008, STATED THAT HE HAD PASSED HIS ORDER DATED 31.12.200 7 IN VIEW OF MY ORDER DATED 13.12.2007 IN APPEAL NO. 200/CIT(A)- IV/2006- 07. IT IS APPARENTLY ERRONEOUS. HAD IT BEEN SO, THE RE COULD BE NO ADDITION OF THE AMOUNT OF RS.8,38,95,000/- BECAUSE THE SAME STANDS DELETED BY MY ORDER DATED 13.12.2007. I, THE REFORE, HOLD THAT THE A.O. HAS PASSED A REDUNDANT ORDER IN THE F ORM HIS ORDER DATED 31.12.2007 AND AT THE SAME TIME HE HAS NOT GIVEN EFFECT TO MY ORDER DATED 13.12.2007 DESPITE CLAIMIN G SO. THE A.O.S ORDER IS, THEREFORE, ANNULLED. 5. MEANWHILE AGAINST ORIGINAL ASSESSMENT, THE APPEA L FILED BY THE REVENUE HAD REACHED TO THIS TRIBUNAL. TRIBUNAL IN I TS ORDER DATED 14.09.2009 IN IT(SS)A. NO. 14/KOL/2008 HELD AS UNDE R :- 7. AFTER HEARING BOTH THE SIDES AT LENGTH AND GOIN G THROUGH THE RECORDS AND THE CASE LAWS RELIED UPON BY THE LE ARNED AR AND THE DR WE HOLD THAT THE ASSESSEE SUBMITTED RECO NCILIATION STATEMENT, LOAN CONFIRMATIONS AND COPY OF LEDGER AC COUNTS BEFORE THE AO. THE RECORD SHOWS THAT THE LOANS WHIC H HAD NOT BEEN SQUARED UP PRIOR TO 31.03.96 WERE DULY SHOWN I N THE SCHEDULE TO THE BALANCE SHEET. THE LIST WHICH WAS F OUND IN THE SEARCH OPERATION AT THE PREMISES OF PAWAN CHANDAK B ELONGING TO THE ASSESSEE WAS REFLECTING THE LOANS AND ADVANC ES TAKEN BY THE ASSESSEE AND OUTSTANDING ON A PARTICULAR DATED, I.E. 09.01.1996 WHICH FALLS PRIOR TO THE LAST DATE OF TH E ACCOUNTING PERIOD. DURING THE ASSESSMENT PROCEEDINGS, THE ASSE SSEE HAS SUBMITTED ALL THE RELEVANT RECORDS. NO NEW RECORD/ EVIDENCE WAS FILED BEFORE THE CIT(A). THE CIT(A) HAS ASKED F OR THE REMAND REPORT AND IN THE REMAND REPORT AO HIMSELF A CCEPTED THE GENUINENESS OF THE LOAN OF RS.5,63,15,000/- WHI CH MADE THE GROUND NO. 2 OF THE REVENUES APPEAL UN-MAINTAINABL E. THE SAME IS IN CONTRADICTION OF THE AOS OWN FINDINGS H ENCE DESERVE TO BE DISMISSED. THE GROUND NO. 1 ALSO PARTIALLY BE CAME I.T.(SS)A. NO.: 71/KOL./ 2008 BLOCK ASSESSMENT YEAR : 1989 -90 TO 1999-2000 PAGE 1 TO 6 5 DEFECTIVE IN VIEW OF THESE FACTS. HOWEVER, WE WOULD LIKE TO SAY REGARDING THE BALANCE AMOUNT OF RS.2,75,80,000/- FO R WHICH THE ASSESSEE HAS SUBMITTED ALL THE DETAILS. WE FIND THA T THE ADDITIONS WERE MADE WITHOUT ANY CONCRETE EVIDENCE. RS.75,25,000/- WAS REFLECTED IN THE REGULAR BOOKS O F ACCOUNT UNDER THE HEAD ADVANCE ACCOUNT. THE MINOR DISCREP ANCY BETWEEN THE DATES AS PER THE LIST AND THE REGULAR B OOKS OF ACCOUNT CANNOT BE MADE THE BASIS FOR MAKING THE ADD ITION OF RS.1,91,30,000/- WHERE THE RECONCILIATION AS WELL A S THE VERIFICATION FROM THE BANK ENTRIES WERE SUBMITTED B Y THE ASSESSEE. CONSIDERING ALL THESE FACTS AND CIRCUMSTA NCES OF THE CASE, WE FIND THAT THE CIT(A) HAS RIGHTLY DELETED T HE ADDITION. MOREOVER, WE WOULD LIKE TO ALSO SAY THAT SINCE THES E ENTRIES WERE REFLECTED IN THE REGULAR BOOKS OF ACCOUNT AND NOT AN OUTCOME OF SEARCH AND SEIZURE OPERATION CARRIED OUT AT THE PREMISES OF MR. CHANDAK. SINCE THE PROCEEDINGS U/S 158BD CAN BE INITIATED ONLY IN THE CASE WHERE UNDISCLOSED INC OME OF THIRD PERSON DETECTED DURING THE SEARCH OPERATION. FOR HO LDING SO WE ALSO GET SUPPORT FROM THE VARIOUS PROVISIONS OF LAW AND AS WELL AS THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT REPORTED IN 243 ITR 664 (SUPRA) WHEREIN THE HIGH CO URT HAS HELD AS UNDER :- HELD THAT CHAPTER XIV-B OF THE ACT PERTAINS TO THE UNDISCLOSED INCOME AND THE ASSESSMENT U/S 143(3) PERTAINS TO THE DISCLOSED INCOME. HENCE, THERE COULD BE NO DISPUTE THAT BOTH THE PROCEEDINGS COULD GO ON SIMULTANEOUSLY SINCE BOTH WERE FOR DIFFERENT TYPES OF INCOME THOUGH FOR THE SAME PERIOD, ONE PROCEEDING WAS FOR UNDISCLOSED INCOME AND THE OTHER PROCEEDING UNDER SECTION 143(3) WAS FOR DISCLOSED INCOME. WE, THEREFORE, SUSTAIN THE ORDER OF THE CIT(A). 6. THUS IT IS CLEAR THAT THE ADDITION MADE BY THE A SSESSING OFFICER HAS ALREADY BEEN ADJUDICATED BY THIS TRIBUNAL AND HELD TO BE NOT VALID AND NOT SUSTAINABLE. WE ARE, THEREFORE, OF THE OPINION THAT LD. CIT(APPEALS) WAS JUSTIFIED IN DELETING THE ADDITION. NO INTERFERENCE IS REQUIRED. 7. IN THE RESULT, APPEAL OF THE REVENUE STANDS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH DAY OF JANUARY, 2014. SD/- SD/- GEORGE MATHAN ABRAHAM P. GEORGE (JUDICIAL MEMBER) (ACC OUNTANT MEMBER) KOLKATA, THE 29TH DAY OF JANUARY, 2014 I.T.(SS)A. NO.: 71/KOL./ 2008 BLOCK ASSESSMENT YEAR : 1989 -90 TO 1999-2000 PAGE 1 TO 6 6 COPIES TO : (1) THE APPELLANT (2) THE RESPONDENT (3) CIT(APPEALS) (4) CIT (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ETC ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.