Shri Dinesh K. Mehta, Surat V. The ACIT., Circle-3, Surat

ITSSA 85/AHD/2006

• Counselvise Citation: [2011] 124 COUNSELVISE.COM (IT) 8152 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 3 month(s) 9 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 05-08-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 01-08-2011
• Assessment Year: misc
• Appeal Filed On: 26-04-2006
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVINDRA KUMAR
• Assessee Lawyers: M K PATEL
• Keywords: Loose papers; Block assessment
• Section: 132; 144; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI, JM AND A. K. GARODIA , AM) IT (SS)A NO.85/AHD/2006 BLOCK PERIOD: AY 1986-87 TO 1995-96 AND 01-04-1995 TO 09-11-1995 DINESH K. MEHTA, 703, MAHAVIR VILLA, DEEPA COMPLEX, 7 TH FLOOR, RANDER ROAD, SURAT VS THE A. C. I. T., CIRCLE-3, SURAT PA NO. AIZPM 0284H (APPELLANT) (RESPONDENT) APPELLANT BY SHRI M. K. PATEL, AR RESPONDENT BY SHRI RAVINDRA KUMAR, DR O R D E R PER BHAVNESH SAINI: THIS FIRST APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE ACIT, CIRCLE-3(1), SURAT DATED 30-03-2006 FOR THE ABOVE BLOCK PERIOD PASSED U/S 158BC OF THE IT ACT. 2. THE ASSESSEE HAS RAISED SEVERAL GROUNDS OF APPE AL AND PRECISELY IN ALL THESE GROUNDS OF APPEAL THE ASSESS EE HAS CHALLENGED ADDITION OF RS.18,67,654/- ON ACCOUNT OF PROFIT EAR NED FROM DIAMOND BUSINESS, ADDITION OF RS.24,439/- BEING REGULAR INC OME OF ASSESSMENT YEARS 1984 TO 1990 ON ACCOUNT OF NON-FIL ING OF RETURN OF INCOME FOR THE SAID ASSESSMENT YEARS AND CHARGING O F INTEREST U/S 158 BFA (1) OF THE IT ACT. THE ASSESSEE IN THE GRO UNDS OF APPEAL IT (SS) A NO. 85/AHD/2006 DINESH K. MAHTA VS ACIT, CIRCLE- 3, SURAT 2 ALSO STATED THAT THE ADDITIONS HAVE BEEN MADE BY TH E AO WITHOUT GIVING ANY FINDINGS IN THE ASSESSMENT ORDER. 3. BRIEFLY, THE FACTS OF THE CASE ARE THAT A SEARCH AC TION U/S 132 OF THE IT ACT WAS CARRIED OUT AT THE RESIDENTIAL/BUSIN ESS PREMISES OF THE ASSESSEE AT SURAT ON 09-11-1995. DURING THE COURSE OF SEARCH INCRIMINATING PAPERS WERE SEIZED. THE VALUABLES/ASS ETS/BOOKS OF ACCOUNTS WERE FOUND AND SEIZED DURING THE SEARCH HA VE BEEN MENTIONED IN THE ASSESSMENT ORDER IN WHICH MAINLY T HE BOOKS OF ACCOUNTS AND LOOSE PAPERS FILES WERE SEIZED. ORIGIN AL BLOCK ASSESSMENT WAS FRAMED U/S 158BC READ WITH SECTION 1 44 OF THE IT ACT ON 29-11-1996. THE TRIBUNAL SET ASIDE THE ASSES SMENT TO THE FILE OF THE AO. ACCORDINGLY, THE MATTER WAS TAKEN UP FOR HEARING. THE ASSESSEES SUBMISSIONS ARE RECORDED IN THE ASSESSME NT ORDER. HOWEVER, IN THIS APPEAL THE ONLY ISSUE/ISSUES ARE R AISED WITH REGARD TO PROFIT EARNED FROM THE DIAMOND BUSINESS IN A SUM OF RS.18,67,654/- IN WHICH THE ASSESSEE EXPLAINED THAT HE WAS DOING THE BUSINESS OF DALALI IN DIAMOND. IT WAS ALSO EXPL AINED THAT THE AO HAS FORGOTTEN ONE THING THAT IF THE ASSESSEE WOULD HAVE CARRIED OUT BUSINESS OF TRADING OF DIAMOND OF HIS OWN, THEN AT LEAST SOME STOCK OF DIAMOND WOULD HAVE BEEN FOUND DURING THE COURSE OF SEARCH PROCEEDINGS. THE ASSESSEE, THEREFORE, PRECISELY EXP LAINED THAT HE WAS ONLY DOING DALALI BUSINESS BUT WAS NOT CARRYING ON ANY TRADING IN DIAMOND. FURTHER, AS REGARDS ADDITION OF RS.24,439/ - BEING REGULAR INCOME FOR THE ASSESSMENT YEARS 1984 TO 1990 IT WAS SUBMITTED THAT THE SAID INCOME IS CONSISTING OF 17 MONTHS PERIOD A ND THE INCOME OF THE ASSESSEE DURING THE SAID ASSESSMENT YEARS WAS B ELOW THE IT (SS) A NO. 85/AHD/2006 DINESH K. MAHTA VS ACIT, CIRCLE- 3, SURAT 3 MINIMUM AMOUNT NOT CHARGEABLE TO TAX. HENCE, THE AS SESSEE WAS NOT REQUIRED TO FILE RETURN OF INCOME U/S 139 OF TH E IT ACT. THE AO CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE EVIDENCES FILED MAINTAINED BOTH THE ADDITIONS BUT DID NOT GIVE ANY REASONS AS TO WHY BOTH THE ADDITIONS HAVE BEEN MADE AND EVEN NO FINDI NGS HAVE BEEN GIVEN AS TO WHY THESE ADDITIONS HAVE BEEN MAINTAINE D. THE ASSESSEE IS, THEREFORE, AGGRIEVED AGAINST THE ORDER OF THE A O IN PASSING THE ORDER MAKING THE ADDITIONS WITHOUT GIVING ANY FINDI NGS. 4. THE LEARNED COUNSEL FOR THE ASSESSEE, THEREFORE, SU BMITTED THAT THE MATTER REQUIRES RECONSIDERATION AT THE LEV EL OF THE AO BECAUSE NO FINDINGS HAVE BEEN GIVEN ON THE SUBMISSI ONS OF THE ASSESSEE. THE LEARNED DR HOWEVER, RELIED UPON THE O RDER OF THE AO. 5. ON CONSIDERATION OF THE SUBMISSIONS OF THE PARTIES IN THE LIGHT OF THE IMPUGNED ORDER, WE ARE OF THE VIEW THE MATTER R EQUIRES RECONSIDERATION AT THE LEVEL OF THE AO. THOUGH, BOT H THE ADDITIONS WERE PROPOSED ON WHICH EXPLANATION OF THE ASSESSEE WAS CALLED FOR BUT THE AO HAS FAILED TO GIVE ANY FINDING ON BOTH T HE ISSUES AS TO WHY THESE ADDITIONS ARE MADE OR MAINTAINED. THE EXPLANA TIONS OF THE ASSESSEE NOTED ABOVE HAVE NOT BEEN DEALT WITH IN TH E ASSESSMENT ORDER. THE ORDER OF THE AO THUS CANNOT BE SUSTAINED IN LAW. WHEN THE AO MADE ADDITIONS AGAINST THE ASSESSEE IN THE BLOCK ASSESSMENT, HE HAS TO SPECIFY IN THE ASSESSMENT ORDER AS TO WHICH OF THE DOCUMENTS WERE FOUND DURING THE COURSE OF SEARCH TO INDICATE UNDISCLOSED INCOME AND FURTHER FINDINGS HAVE TO BE GIVEN TO SHO W THE BASIS OF MAKING THE ADDITIONS. FURTHER, THE EXPLANATIONS AND SUBMISSIONS OF IT (SS) A NO. 85/AHD/2006 DINESH K. MAHTA VS ACIT, CIRCLE- 3, SURAT 4 THE ASSESSEE SHALL HAVE TO BE DEALT WITH SPECIFICAL LY IN THE ORDER. HOWEVER, THE ORDER OF T HE AO IS SILENT ON THIS ASP ECTS, THEREFORE, MATTER REQUIRES RECONSIDERATION. CHARGING OF INTERE ST IS CONSEQUENTIAL IN NATURE. CONSIDERING THE ABOVE DISCUSSIONS, WE SE T ASIDE THE ASSESSMENT ORDER AND RESTORE THESE ISSUES INVOLVED IN THE PRESENT APPEAL TO THE FILE OF THE AO WITH DIRECTION TO RE-D ECIDE THESE ISSUES BY GIVING REASONABLE SUFFICIENT OPPORTUNITY OF BEING H EARD TO THE ASSESSEE. THE AO SHALL PASS SPEAKING ORDER GIVING R EASONS FOR DECISION IN THE ASSESSMENT ORDER AND SHALL ALSO GIV E SPECIFIC FINDING ON THE SUBMISSIONS OF THE ASSESSEE. 6. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 05-8-2011. SD/- SD/- (A. K. GARODIA) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 05-08-2011 LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD