ACIT, Bhubaneswar V. Bhabani Charan RAth, Bhubaneswar

ITSSA 74/CTK/2012

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 8639 (ITAT-CUTTACK)
• Duration Of Justice: 2 month(s) 10 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 11-01-2013
• Appeal Filed By: Department
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 01-11-2012
• Court: TRIBUNAL
• Department Lawyers: PARAMITA TRIPATHY
• Assessee Lawyers: P
• Keywords: Unexplained investment; Income from undisclosed sources; Search and seizure; Revised return
• Section: 153A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK ( ) BEFORE . . , , HONBLE SHRI K.K.GUPTA, ACCOUNTANT MEMBER. /AND . . . , H ONBLE SHRI K.S.S.PRASAD RAO, JUDICIAL MEMBER / I.T (SS) A.NO S . 74 AND 75/CTK/2012 / ASSESSMENT YEAR S 2005 - 06 AND 2007 - 08 ASST.COMMISSIONER OF INCOME - TAX, CIRCLE 1(2), BHUBANESWAR. - - - VERSUS - BHABANI CHARAN RATH, B - 20, B.J.B.NAGAR, BHUBANESWAR 751 014 PAN: AAKPR 0120 J ( /APPELLANT ) ( / RESPONDENT ) / FOR THE APPELLANT : / S MT. PARAMITA TRIPATHY, CIT - DR / FOR THE RESPONDENT: / SHRI P.S.PANDA/K.K.AGARWAL, ARS / DATE OF HEARING: 02.01.2013 / DATE OF PRONOUNCEMENT: 11.01.2013 / ORDER . . , , SHRI K.K.GUPTA, ACCOUNTANT MEMBER. THESE T WO APPEALS BY THE REVENUE ARISE OUT OF THE SEPARATE ORDER S OF THE COM MISSIONER OF INCOME - TAX (APPEALS) BOTH DT.24.8.2012 FOR THE ASSESSMENT YEARS 2005 - 06 AND 2007 - 08 RAISING THE FOLLOWING GROUNDS. ASSESSMENT YEAR 2005 - 06 : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS NOT JUSTIFIED IN DELETING THE A DDITION OF 18,12,795 MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNACCOUNTED INCOME OF THE ASSESSEE WHICH WAS ADMITTED THAT THE IMPUGNED AMOUNT WAS NOT DEPOSITED IN THE ACCOUNT OF THE OCA. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS NOT JUSTIFIED IN DELETING THE ADDITION OF 20 LAKHS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTMENT IN BAJAJ ALLIANZ, WHEN THE ASSESSEE HAD ONLY SHOWN AN INVESTMENT OF 44,217 IN BAJAJ ALLIANZ DURING THE RELEVANT ASSESSMENT YEAR. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS NOT JUSTIFIED IN CONSIDERING 20 LAKHS INVESTED IN BAJAJ ALLIANZ AS EXPLAINED AS PER THE STATEMENT OF AFFAIRS SUBMITTED I.T(SS)A.NOS.74 AND 75/CTK/2012 ACIT V. BHABANI CHARAN RATH AYS 2005 - 06 AND 2007 - 08 2 ALONG WITH THE SO CALLED REVISED RETURN FILED ON 06.12.2007, WHEN THE SAID RETURN HAS BEEN HELD BY THE CIT(A) AS NON - EST. ASSESSMENT YEAR 2007 - 08 : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS NOT JUSTIFIED IN DELETING THE ADDITION OF 45,56,811 MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNDISCLOSED INVESTMENT IN THE NAME OF ONE SMT. JAYITA BANERJEE WHICH WAS CLEARLY A BENAMI ACCOUNT OF THE ASSESSEE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS NOT JUSTIFIED IN DELETING THE ADDITION OF 20 LAKHS MADE BY THE AG ON ACCOUNT O F UNEXPLAINED INVESTMENT IN BAJAJ ALLIANZ DURING THE RELEVANT ASSESSMENT YEAR. 2. THE BRIEF FACTS AS HAVE BEEN BROUGHT ON RECORD ARE THAT THE ASSESSEE IS THE PRESIDENT/CHAIRMAN OF THE SOCIETY, ORISSA COMPUTER ACADEMY (IN SHORT OCA) WHICH IS RUNNING DIF FERENT EDUCATIONAL INSTITUTIONS OF ENGINEERING & MANAGEMENT COURSES. ON 9.8.2005, A SEARCH & SEIZURE OPERATION U/S.132 WAS CONDUCTED BY THE DEPARTMENT IN THE OFFICE PREMISES OF THE OCA AS WELL AS THE RESIDENTIAL PREMISES OF THE ASSESSEE. CONSEQUENTLY, ASSE SSMENTS WERE MADE U/S. 153A/143(3) FOR THE ASSESSMENT YEAR 2005 - 06 AND U/S.143(3) FOR THE ASSESSMENT YEAR 2007 - 08 MAKING VARIOUS ADDITIONS. ON APPEAL, THE LEARNED CIT(A) DELETED SOME OF THE ADDITIONS, WHICH ARE NOW UNDER CHALLENGE BY THE REVENUE AS PER THE IR RESPECTIVE GROUNDS IN THE RESPECTIVE ASSESSMENT YEARS AS ABOVE. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AT LENGTH . ON OUR CAREFUL PERUSAL OF THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW AND CONSIDERATION OF THE SUBMISSIONS OF THE RIVAL PARTIES, WE PROPOS E TO DEAL WITH THE APPEALS ASSESSMENT YEAR WISE ON THE ISSUES RAISED BY THE REVENUE IN THE RESPECTIVE ASSESSMENT YEARS AS UNDER. I.T(SS)A.NOS.74 AND 75/CTK/2012 ACIT V. BHABANI CHARAN RATH AYS 2005 - 06 AND 2007 - 08 3 IT (SS) A NO.74/CTK/2012 ( ASSESSMENT YEAR 2005 - 06 ) : 4. THE FIRST ISSUE RAISED BY THE REVENUE IS AGAINST THE DELETION OF THE ADD ITION OF 18,12,795 MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNACCOUNTED INCOME OF THE ASSESSEE. 4.1. DURING THE COURSE OF SEARCH OPERATION ON 09.08.2005, CASH BOOKS BEARING IDENTIFICATION MARK SM - 3 & OCA - 1 WERE SEIZED. ON GOING THROUGH THOSE BOOKS THE ASSESSING OFFICER FOUND THAT ON MOST OF THE DAYS THE COLLECTION MADE FROM THE STUDENTS IS HANDED OVER TO THE CHAIRMAN, SRI B.C. RATH AND HE HAD RECEIVED THE AMOUNT AFTER PUTTING SIGNATURE WITH DATE IN THOSE REGISTERS. THE TOTAL AMOUNT HANDED OVER TO SRI RA TH DURING THE FINANCIAL YEAR 2004 - 05 IS FOUND AT 18,12,795. HOWEVER, ON GOING THROUGH THE BANK STATEMENTS OF OCA, THE ASSESSING OFFICER OBSERVED THAT THE SAME HAS NOT BEEN FOUND TO BE DEPOSITED. THE ASSESSING OFFICER ISSUED A LETTER DT. 25.10.2007 REQUESTING THE ASSESSEE TO STATE THE PURPOSE FOR WHICH THE AMOUNTS WERE DEPOSITED WITH HIM. IN REPLY DT.2.11.2007 THE ASSESSEE STATED - THE COPY OF THE CASH BOOK WHICH WAS ENCLOSED BY YOU IS THE CASH BOOK MAINTAINED BY THE ADMISSION SECTION. IN THIS CASH BOOK THEY ONLY REFLECT THE AMOUNT COLLECTED ON AD MISSION AND NOT ANY OTHER TRANSACTION. AS PER THE USUAL PRACTICE THE CASH COLLECTED BY THE ADMISSION SECTION IS SENT TO THE CHAIRMAN OF THE SOCIETY (I.E. AT ADMINISTRATIVE OFFICE) AND THERE THE TOTAL COLLECTION OF ADMISSION AND TUITION FEES IS ENTERED IN T HE CASH BOOK. THEN ALL THE REGULAR (I.E. DAY TO DAY) EXPENSES ARE MET OUT OF IT. HENCE THE ENTRIES REFLECTED IN THE CASH BOOK AS AMOUNT DEPOSITED WITH THE CHAIRMAN IS NOT THE AMOUNT OF MONEY TAKEN AWAY BY THE CHAIRMAN, BUT FUND TRANSFERRED TO ADMINISTRATI VE OFFICE. THEREFORE, THESE COLLECTIONS ARE NOT THE INCOME OF THE CHAIRMAN THE ASSESSEE WAS FURTHER ASKED BY THE ASSESSING OFFICER VIDE HIS LETTER DT. 04.12.2007 REQUESTING TO EXPLAIN AS TO WHY THE AMOUNT OF 18,12,795 WILL I.T(SS)A.NOS.74 AND 75/CTK/2012 ACIT V. BHABANI CHARAN RATH AYS 2005 - 06 AND 2007 - 08 4 NOT BE TREATED AS HIS UNACCOUNTED RECEIPTS FROM THE SOCIETY. IN HIS REPLY DT. 02.11.2007 IT HAS BEEN STATED THAT THE AMOUNT RECEIVED BELONGED TO THE SOCIETY OCA WHICH WAS DULY REFLECTED IN THE BOOKS OF ACCOUNT OCA. THE ABOVE EXPLANATION OF THE ASSESSEE WAS NOT SATISFACTORY TO THE ASSESSING OFFICER. HE OBSERVED THAT T HE CLAIM THAT THE TOTAL COLLECTION OF ADMISSION AND TUITION FEES IS ENTERED IN THE CASH BOOK IS NOT CORRECT SINCE DURING THE COURSE OF SEARCH OPERATION, NO OTHER CASH BOOK WERE FOUND WHERE THESE AMOUNTS HAVE BEEN REFLECTED AND THE ASSESSEE MAINTAINED NO PERSONAL BOOKS OF ACCOUNT. THE ASSESSEE HAS NOT SUBSTANTIATED HIS CLAIM EITHER. THEREFORE, HE TREATED THE AMOUNT OF 18,12,795 AS AN UNACCOUNTED INCOME OF THE ASSESSEE FROM THE SOCIETY AND MADE ADDITION TO THE TOTAL INCOME OF THE ASSESSEE . 4.2. BEFORE THE LEARNED CIT(A) THE SAME EXPLANATION WAS REITERATED AND IT WAS FURTHER SUBMITTED THAT IT IS A ROUTINE PRACTICE IN T HE CASE OF THE OCA TO HAND OVER THE UNUTILIZED PORTION OF THE CASH IN THE EVENING FOR SAFE CUSTODY TO SRI B. C. RATH, WHICH THE INSTITUTION COLLECTED FROM STUDENTS EACH DAY. WHATEVER CASH COLLECTED ARE DULY RECORDED IN THE BOOKS OF ACCOUNTS AND THE SAME W ERE PRODUCED BEFORE THE ASSESSING OFFICER FOR VERIFICATION. DURING THE COURSE OF HEARING AND ALSO IN RESPONSE TO THE REMAND REPORT, THE ASSESSEE HAD SUBMITTED THE BOOKS OF ACCOUNTS AND THE ASSESSING OFFICER HAS VERIFIED THE SAME AND GAVE HIS REPORT. FROM T HE REPLY GIVEN IN RESPONSE TO THE REMAND REPORT, THE ASSESSING OFFICER WAS ALSO SATISFIED HIMSELF ABOUT THE ACCOUNTING OF THE ENTIRE FEES RECEIVED BY THE OCA. NOT A SINGLE EVIDENCE WAS FOUND FOR NON ACCOUNTING OF THE FEES RECEIVED DURING THE COURSE OF SEAR CH. IT WAS ALSO CONTENDED THAT IF THE ENTIRE FEES RECEIVED IS ACCOUNTED FOR IN THE BOOKS OF OCA, THE QUESTION OF HANDING OVER THE FEES COLLECTED IN CASH AND I.T(SS)A.NOS.74 AND 75/CTK/2012 ACIT V. BHABANI CHARAN RATH AYS 2005 - 06 AND 2007 - 08 5 CONSIDERING THE SAME AS UNACCOUNTED INCOME OF THE ASSESSEE DOES NOT ARISE. CONSIDERING SUCH SUBMISS IONS OF THE ASSESSEE AND CONSIDERING THE FACTS AND CIRCUMSTANCES, THE LEARNED CIT(A) HAS DELETED THE IMPUGNED ADDITION OF 18,12,795 ON THE OBSERVATION VIDE PARAGRAPH 4.2 OF HIS ORDER, WHICH READS UNDER. 4.2. I HAVE CAREFULLY CONSIDERED THE FINDING OF TH E AO AND THE SUBMISSIONS MADE BY THE APPELLANT. THE SUBMISSION OF THE APPELLANT EXPLAINING THE FACTS APPEAR TO BE REASONABLE. THE AO HIMSELF OBSERVES THAT THE CASH BOOK WAS BEING INITIALED BY THE APPELLANT AS THE CHAIRMAN OF OCA, THUS IT CANNOT BE SAID THA T THE CASH WAS NOT ENTERED IN THE CASH BOOK. THE CASH IS USED FOR DAY - TO - DAY EXPENDITURE AND THE CASH MAY NOT BE DEPOSITED IN THE BANK ACCOUNT AS AND WHEN IT IS COLLECTED. THERE MAY NOT BE A ONE - TO - ONE RELATIONSHIP BETWEEN COLLECTION OF CASH AND DEPOSITS I N THE BANK ACCOUNT. SIMPLY BECAUSE THE CASH WAS NOT DEPOSITED IN BANK ACCOUNT WOULD NOT BE A GOOD GROUND TO CONCLUDE THAT THE CASH HAS BEEN TAKEN BY THE CHAIRMAN, OCA FOR HIS PERSONAL USE. ACCORDINGLY, THERE IS NO SUFFICIENT GROUND TO CONCLUDE THAT THE AMO UNT OF 18,12,795 HAS BEEN TAKEN BY THE APPELLANT FOR HIS PERSONAL BENEFIT. ACCORDINGLY, THE ADDITION OF 18,12,795 IS DELETED. 5. IN GROUND NO S .2 AND 3 , THE REVENUE HAS DISPUTED THE DELETION OF THE ADDITION OF 20 LAKHS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTMENT IN BAJAJ ALLIANZ. 5.1. THE ASSESSING OFFICER OBSERVED IN HIS ORDER THAT THE INQUIRY CONDUCED WITH BAJAJ ALLIAN Z LIFE INSURANCE COMPANY LTD., REVEALED THAT THE ASSESSEE HAD INVESTED THEREIN 24,217 ON 29.9.2004, 20,00,000 ON 20.9 .2004 AND 20,000 ON 29.3.2005, TOTALING TO 20,44,217. BUT THE ASSESSEE DECLARED THE INVESTMENT TOWARDS BAJAJ ALLIANZ LIFE INSURANCE POLICIES TO THE TUNE OF 44,217. WHEN THIS WAS POINTED OUT, THE ASSESSEE EXPLAINED THAT THE ACTUAL INVESTMENT IN BAJAJ ALL IANZ INSURANCE COMPANY LTD., WAS 20,44,217 WHICH I.T(SS)A.NOS.74 AND 75/CTK/2012 ACIT V. BHABANI CHARAN RATH AYS 2005 - 06 AND 2007 - 08 6 ARE DULY REFLECTED IN THE STATEMENT OF AFFAIRS OF THE ASSESSEE. THE ASSESSING OFFICER DID NOT ACCEPT THIS EXPLANATION OBSERVING IN HIS ORDER THAT THE CLAIM OF THE ASSESSEE IS NOT TENABLE. HE OBSERVED THAT T HE ASSESSEE HAS NOT DISCLOSED THE INVESTMENT OF 20,00,000 ON BAJAJ ALLIANZ INSURANCE CO. LTD. EITHER IN THE ORIGINAL RETURN FILED ON 27.10.2005 OR IN THE RETURN FILED ON 28.04.2006 IN RESPONSE TO NOTICE U/S. 153A DT. 08.03.2006. THERE WAS NO STATEMENT OF AFFAIRS FILED EITHER WITH THE ORIGINAL RETURN OR WITH THE RETURN FILED ON 28.04.2006. IT IS THE DEPARTMENT WHICH HAS COLLECTED THE INFORMATION AND CONFRONTED THE SAME TO THE ASSESSEE. HENCE, THE DISCLOSURE OF INVESTMENT OF 20,00,000 IS NOT A VOLUNTARY O NE. THE ASSESSEE HAS NOT FURNISHED ANY INFORMATION REGARDING THE SOURCE OF INVESTMENT. IT ESTABLISHES THAT HE IS NOT IN A POSITION TO FURNISH THE SAME. ACCORDINGLY, THE AMOUNT OF 20,00,000 IS TREATED AS AN INVESTMENT OUT OF UNDISCLOSED SOURCES AND ADDED TO THE TOTAL INCOME. 5.2. ON APPEAL, THE LEARNED CIT(A) HAS DELETED THE ADDITION OF 20 LAKHS ON THE OBSERVATION IN 5.2 OF HIS ORDER, WHICH IS REPRODUCED AS UNDER : I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE APPELLANT AND OTHER RELEVANT FACTS. THE APPELLANT HAS DISCLOSED ADDITIONAL INCOME OF 45 LACS WHICH WAS OFFERED TO TAX WHILE FILING THE RETURNS IN ALL THE THREE OCCASIONS NARRATED EARLIER, THOUGH THE RETURN FILED ON DT. 06.12.2007 HAS NOT BEEN ACCEPTED AS A VALID RETURN. THE INCOME DISCLOSED WOULD RESULT IN CREATION OF ASSETS WHICH CAN BE KNOWN ONLY WHEN THE BALANCE SHEET OR STATEMENT OF AFFAIRS SHOWING INCOME FROM ALL SOURCES INCLUDING INCOME OF 45 LACS AND ALL INVESTMENTS. THE STATEMENT OF AFFAIRS, WHICH HAS BEEN FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS, COULD NOT BE IGNORED WITHOUT ADEQUATE REASONS. THE APPELLANT HAS SHOWN ADDITIONAL INCOME OF 45 LACS AND ALSO FURTHER ASSETS IN THE FORM OF INVESTMENTS IN BAJAJ ALLIANZ INSURANCE. BOTH INCOME AND INVESTMENT OUT OF THE SAID INCOME C ANNOT BE ADDED AT THE SAME TIME. THE STATEMENT OF AFFAIRS CONTAINING THE ADDITIONAL INCOME OFFERED AND INVESTMENT MADE HAS NOT BEEN REJECTED BY THE AO AND THE SAME APPEARS TO SUPPORT THE INCOME COMPUTED BY THE AO. I.T(SS)A.NOS.74 AND 75/CTK/2012 ACIT V. BHABANI CHARAN RATH AYS 2005 - 06 AND 2007 - 08 7 ACCORDINGLY, THE ADDITION OF 20 LACS CANN OT BE SUSTAINED, HENCE DELETED. IT(SS)A NO.75/CTK/2012 (ASSESSMENT YEAR 2007 - 0 8): 6. GROUND NO.1 RAISED BY THE REVENUE IS AGAINST DELETION OF THE ADDITION OF 45,56,811 MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNDISCLOSED INVESTMENT IN THE N AME OF ONE SMT. JAYITA BANERJEE. 6.1. DURING THE COURSE OF ASSESSMENT, T HE INVESTMENTS MADE IN POLICY NO 15100761 OF BAJAJ ALLIANZ LIFE INSURANCE COMPANY LTD. OF 25,00,000, HDFC MUTUAL FUND 16,15,500, ICICI PRUDENTIAL MUTUAL FUND 3,84,500, IN THE NAME OF SMT. JAYITA BANARJEE BAJAJ ALLIANZ LIFE INSURANCE COMPANY LTD. WERE HELD BY THE ASSESSING OFFICER AS REPRESENTING UNDISCLOSED INCOME FROM UNDISCLOSED SOURCES OF THE ASSESSEE AND THEREFORE, HE MAD E THE ADDITION OF 45,56,811 AS UNEXPLAINED INVESTMENT U/S.69 OF THE I.T.ACT,1961. 6.2. BEFORE THE LEARNED CIT(A), THE ASSESSEE FURNISHED THE BALANCE SHEET AND CAPITAL ACCOUNT AS ON 31.3.2007 AS QUOTED IN HIS ORDER. CONSIDERING THE SAME AND ALSO THE SUBMISSIONS OF THE ASSESSEE APPELLANT BEFORE HIM , THE LEARNED CIT(A) DE LETED THE SAID ADDITION BY OBSERVING IN HIS ORDER IN PARAGRAPH FROM THE ABOVE, IT IS CLEAR THAT AN AMOUNT OF 1,45,52,333 WITHDRAWN AS DRAWINGS WAS AVAILABLE TO THE APPELLANT FOR HIS PERSONAL AND FAMILY CONSUMPTION AND INVESTMENTS. THE AMOUNT IS SUBSTANTIAL AND MAY NOT EXHAUST FOR PERSONAL OR FAMILY EXPENDITURE. SOME AMOUNT OF THE SAID DRAWINGS WOULD HAVE GONE FO R INVESTMENTS IN BENEMI, OR ELSE INVESTMENTS IN HIS OWN NAME WOULD HAVE FOUND A PLACE IN BALANCE SHEET. THE DRAWING IS OUT OF TAX PAID INCOME. THE HONBLE ITAT HAS OBSERVED IN THE CASE OF THE APPELLANT THAT THERE IS NO REQUIREMENT TO ESTABLISH NEXUS AS LON G AS SUFFICIENT TAX PAID FUNDS ARE AVAILABLE. THE SITUATION CONSIDERED BY THE ITAT IS SIMILAR TO THE FACTS IN THE INSTANT ASSESSMENT YEAR. UNDER SUCH CIRCUMSTANCES AND FOLLOWING THE DECISION OF THE ITAT IN APPELLANTS OWN CASE CITED EARLIER, THE SOURCE OF INVESTMENTS IN I.T(SS)A.NOS.74 AND 75/CTK/2012 ACIT V. BHABANI CHARAN RATH AYS 2005 - 06 AND 2007 - 08 8 THE NAME OF SMT. JAYITA BANERJEE IS EXPLAINED IN VIEW OF THE TAX PAID INCOME WITHDRAW AS DRAWINGS. IN VIEW OF THE SAME, THE ADDITION IN THE NAME OF JAYITA BANARJEE AMOUNTIN G TO 45,56,811 IS DELETED. 6.3. THE LEARNED COUNSEL OF THE ASSESSEE REITERATED THE SUBMISSIONS AS WERE MAD E BEFORE THE AUTHORITIES BELOW AND SUBMITTED THAT DURING THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSING OFFICER MADE ADDITIONS ON ACCOUNT OF INVESTMENTS MADE BY THE ASSESSEE IN THE NAME OF ONE SMT. JAYITA BANE RJEE OF 25,00,000 IN BAJAJ ALLIANZ, 16,15,000 IN HDFC M.F. AND 3,84,500 IN ICICI PRUD.FUND AND 57,311 BEING INTEREST EARNED THERE FROM, ALL TOTALING TO 45,56,811. A SEARCH AND SEIZURE OPERATION TOOK PLACE AT THE BUSINESS AND RESIDENTIAL PREMISES OF T HE ASSESSEE GROUP ON 09.08.2005. DURING THE COURSE OF SEARCH, CASH AND BOOKS OF ACCOUNTS WERE SEIZED. FURTHER A SURVEY WAS ALSO CONDUCTED DURING THE COURSE OF ASSESSMENT PROCEEDINGS ON 27.09.2007 IN THE GROUP PREMISES AND THE GROUP WAS UNDER PRESSURE BECAU SE OF CONTINUOUS INVESTIGATION AGAINST IT. TO COME CLEAN AND BUY PEACE WITH THE DEPARTMENT, THE GROUP REVIEWED ITS ENTIRE FINANCIAL STATUS AND FILED REVISED RETURNS ON 06.12.2007 WITH A SUBSTANTIAL AMOUNT OF ADDITIONAL INCOME IN THE HANDS OF MOST OF THE IN DIVIDUAL ASSESSEES. HOWEVER, WHILE COMPLETING THE ASSESSMENT, THE DEPARTMENT DECLARED ALL THE REVISED RETURNS AS NON - EST BUT USED THE INFORMATION IN THE RETURNS FOR THE PURPOSE OF ADDITION. WHILE THIS WHOLE PROCESS OF REVIEW WAS ON, THE ASSESSEE WAS HIGHLY APPREHENSIVE OF SEIZURE OF ITS ASSETS. ACCORDINGLY, MAY NOT BE WITH PROPER ADVICE, BUT THE RESPONDENT DECIDED TO DIVERT SOME LIQUID ASSETS AND PARKED IT SOMEWHERE ELSE FOR USING IT FOR CREATING ASSETS. IN FACT, THE RESPONDENT GROUP HAD CREATED A LOT OF UN ACCOUNTED FINANCIAL ASSETS WHICH THEY HAD DECIDED DURING THE PROCESS OF REVIEW TO INCLUDE IN THE REVISED RETURN. THE PRESENT DIVERSION OF FUNDS BY INVESTING IN THE NAME OF MS. J. BANERJEE IS THE I.T(SS)A.NOS.74 AND 75/CTK/2012 ACIT V. BHABANI CHARAN RATH AYS 2005 - 06 AND 2007 - 08 9 CONSEQUENCE OF THE ABOVE FACT. HAVING OWNED UP THE ALLEGED IN VESTMENTS, THE ASSESSEE EXPLAINED ITS SOURCES THAT THE ASSESSEE FILED HIS REVISED RETURNS FOR THE SEARCH PERIOD ON 06.12.2007. BY THAT TIME THE ASSESSEE RESPONDENT HAD ALREADY INVESTED THE IMPUGNED AMOUNT IN THE NAME OF SMT. J AYITA BANERJEE WHICH WAS OUT O F EXISTING FUNDS AND SHOWN AS DRAWINGS FOR THE YEAR. THE ASSESSEE REVIEWED ITS ENTIRE UNACCOUNTED FINANCIAL ASSETS AND OTHER ASSETS AND PREPARED A STATEMENT OF AFFAIRS UP TO THE DATE OF FILING OF REVISED RETURN I.E. 06.12.2007 WHICH FACTORED IN ALL THE UNA CCOUNTED ASSETS IN HIS NAME AND IN THE NAME OF SOME OTHER PERSONS UP TO THAT DATE AND DISCLOSED EVERYTHING IN THE REVISED RETURN INCLUDING THE ABOVE ALLEGED INVESTMENTS. HAVING FILED THE REVISED RETURN FOR THE F.Y. 2005 - 06, WHICH FACTORED MOST OF THE UNAC COUNTED ASSETS, HE WITHDREW A PART OF HIS CAPITAL ACCOUNT DURING THE YEAR AND INVESTED THE SAME IN THE NAME OF ONE SMT. J AYITA BANERJEE DURING THE YEAR UNDER CONSIDERATION . THE SAME WITHDRAWAL IS EVIDENT FROM THE STATEMENT OF AFFAIRS FILED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS (COPY PLACED ON RECORD), WHICH SHOWS THAT DURING THE YEAR UNDER CONSIDERATION THERE WAS PERSONAL DRAWINGS OF ALMOST 165.51 LA KH S WHICH THE ASSESSEE DIVERTED FROM HIS PERSONAL ACCOUNT TO OTHERS. OUT OF THE ABOVE WITHDRAWA LS, THE ASSESSEE HAD INVESTED THE ALLEGED AMOUNT OF 44,99,500 IN THE NAME OF SMT. J. BANERJEE AND THE ADDITION MADE BY THE A.O. WAS 45,56,811 WHICH INCLUDES INTEREST OF 57,311 WAS NOT JUSTIFIED, WHICH THE LEARNED CIT(A) CONSIDERING THE ABOVE FACTS AND SUBMISSIONS HAVE RIGHTLY DELETED THE SAME. HE FURTHER SUBMITTED THAT FOR SIMILAR ADDITIONS IN THE ASSESSMENT YEAR 2008 - 09 RELIEF HAS BEEN GRANTED BY THIS TRIBUNAL IN ITA NO.12/CTK/2012 DT.25. 06.2012 (COPY PLACED ON RECORD) I.T(SS)A.NOS.74 AND 75/CTK/2012 ACIT V. BHABANI CHARAN RATH AYS 2005 - 06 AND 2007 - 08 10 6.4. IN GROUND NO.2 THE REVENUE H AS DISPUTED THE DELETION OF THE ADDITION OF 20 LAKHS BEING THE INVESTMENT MADE IN BAJAJ ALLIAN LIFE INSURANCE COMPANY IN THE NAME OF THE ASSESSEE DURING THE ASSESSMENT YEAR UNDER CONSIDERATION . 6.5. ON APPEAL, THE LEARNED CIT(A) DELETED THE SAID ADDITION OF 20 LAKHS ON THE FINDING THAT THE ASSESSEE HAD ALREADY DISCLOSED SUBSTANTIAL INCOME IN EARLIER AYS AND FILED STATEMENT OF AFFAIRS INCORPORATING THE SAME, OUT OF WHICH INVESTMENT OF 20 LACS HAS BEEN MADE IN THE NAME OF THE ASSESSEE IN BAJAJ ALLIANZ INS URANCE. THEREFORE, HE HELD THAT THE SAME CANNOT BE TAXED AGAIN IN THE HANDS OF THE ASSESSEE . HE FURTHER OBSERVED THAT THE ASSESSEE IS NOT REQUIRED TO PROVE THE NEXUS OF INVESTMENT OF 20 LACS WITH THE FUNDS ALREADY DISCLOSED FOLLOWING THE ORDER OF THE ITA T IN ASSESSEES OWN CASE. 6.6. THE LEARNED COUNSEL OF THE ASSESSEE FILED A COPY OF THE STATEMENT OF AFFAIRS WHERE IN THE ABOVE INVESTMENT HAS BEEN DULY DISCLOSED. THE SAID STATEMENT OF AFFAIRS WAS FILED ALONG WITH THE REVISED RETURN THE INVESTMENT IN QUEST ION WAS DULY DISCLOSED . IN VIEW OF THE ABOVE, THE LEARNED COUNSEL OF THE ASSESSEE CONTENDED THAT THE IMPUGNED ADDITION MADE BEING UNJUST AND ILLEGAL , THE LEARNED CIT(A) IS JUSTIFIED IN DELETING THE SAID ADDITION. HE PRAYED TO UPHOLD THE IMPUGNED ORDER OF T HE LEARNED CIT(A) AND DISMISS THE APPEAL OF THE REVENUE. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFUL LY PERUSED THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW AND ALSO THE MATERIAL PLACED ON RECORD. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE INCLINED TO HOLD THAT THE AMOUNTS PURPORTED TO BE BROUGHT TO TAX BY THE ASSESSING OFFICER IN BOTH THE AYS UNDER CONSIDERATION HAS RIGHTLY BEEN DELETED BY THE LEARNED CIT(A), THOSE HAVING DULY BEEN EXPLAINED BY THE ASSESSEE TO THE I.T(SS)A.NOS.74 AND 75/CTK/2012 ACIT V. BHABANI CHARAN RATH AYS 2005 - 06 AND 2007 - 08 11 EXTENT THAT THE AM OUNTS GENERATED AND RENDERED TO TAX WAS THE AMOUNTS AVAILABLE ON THE BASIS OF INCOME AS DISCLOSED IN THE STATEMENT OF AFFAIRS. THE LEARNED CIT - DR FOR THE REVENUE HAS NOT BEEN ABLE TO CONTROVERT THE FACTS AS NOTED BY THE AUTHORITIES BELOW INSOFAR AS NO NEW EVIDENCE HAS BEEN BROUGHT ON RECORD TO INDICATE THAT THE AMOUNTS NOW BROUGHT TO TAX BY THE ASSESSING OFFICER WERE OVER AND ABOVE THE AMOUNTS ALREADY RENDERED TO TAX OR WERE FROM THE DECLARED AMOUNTS OF INCOME WHEN THE ASSESSING OFFICER WAS TO CONSIDER THE REVISED RETURNS ON THE BASIS OF OCA HAVING FILED RETURNS IN PURSUANCE TO NOTICE U/S.153A. IT WAS NOT THE CASE OF THE ASSESSING OFFICER TO DIFFERENTIATE AND IDENTIFY THE INCOMES OTHER THAN WHAT WAS STATED BEFORE HIM. THE SAME INCOMES CANNOT SUFFER TAX AGAIN IN THE HANDS OF THE ASSESSEE WHEN INVESTMENTS ARE NOT CLAIMED AS INVESTED FROM UNDISCLOSED INCOME OF THE ASSESSEE ITSELF. THE ISSUES THEREFORE ARE SQUARELY COVERED BY THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR EARLIER YEARS WHEN THE ASSESSMEN T FOR THE AY 2008 - 09 HAS NOT BEEN MADE IN PURSUANCE TO NOTICE U/S.153A. THEREFORE, WE FIND NO INFIRMITY IN THE ORDERS OF THE LEARNED CIT(A) INSOFAR AS THE DELETION OF THE ADDITIONS IN BOTH THE AYS DISPUTED BY THE REVENUE BEFORE THE TRIBUNAL ARE ON UNCONTRO VERTED FACTS BROUGHT NO RECORD. WE UPHOLD THE SAME AND DISMISS BOTH THE APPEALS OF THE REVENUE. 8. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE FOR THE ASSESSMENT YEARS 2005 - 06 AND 2007 - 08 ARE DISMISSED. SD/ - SD/ - ( . . . ) , (K.S.S.PRASAD RAO), JUDICIAL MEMBER ( . . ) , , (K.K.GUPTA), ACCOUNTANT MEMBER. ( ) DATE: 11.01.2013 ( ), (H.K.PADHEE), SENIOR.PRIVATE SECRETARY. I.T(SS)A.NOS.74 AND 75/CTK/2012 ACIT V. BHABANI CHARAN RATH AYS 2005 - 06 AND 2007 - 08 12 - COPY OF THE ORDER FORWARDED TO: 1 . / THE APPELLANT : ASST.COMMISSIONER OF INCOME - TAX, CIRCLE 1(2), BHUBANESWAR. 2 / THE RESPONDENT: BHABANI CHARAN RATH, B - 20, B.J.B.NAGAR, BHUBANESWAR 751 014 3 . / THE CIT, 4 . ( )/ THE CIT(A), 5 . / DR, CUTTACK BENCH 6 . GUARD FILE . / TRUE COPY, / BY ORDER, APPE NDIX XVII SEAL TO BE AFFIXED ON THE ORDER SHEET BY THE SR. P.S./P.S. AFTER DICTATION IS GIVEN 1. DATE OF DICTATION 04.01.2013 . 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DI CTATING MEMBER 07.01.2013 OTHER MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT.... 5 . DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S . 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 11.01.2013 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE A SSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER ................ 9. DATE OF DESPATCH OF THE ORDER ..