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2019 (3) TMI 1550 - HC - Income TaxUndisclosed income - Involvement of the assessee in the textile scam - information gathered by another investigating agency and confirmed by the Special Court as sufficient basis for making addition under the Income Tax Act - acquittal of the accused persons in the Criminal Proceeding - Tribunal deleting the entire addition of undisclosed income in the assessee's hands on the ground that the same material was available even prior to the remand - finding of fact against the Assessee that 14 alleged bogus firms are belonging to the Assessee only and the transactions made in the name of said firms related to the Assessee with regard to sale of sarees and dhotis announced by the State Government in the year 1992 related to him and the alleged loss caused to the State Government in the said Scheme formed the income earned by the Assessee during the said block Assessment period HELD THAT:- We are of the opinion that the Tribunal being a fact finding body has erred in dismissing the appeal without appreciating the facts in detail on its own and in rejecting the materials before it. The Tribunal also erred in only relying upon the earlier order passed by the Income Tax Appellate Tribunal by which the matter was remanded vide order 02.03.2000 and the Tribunal while passing the subsequent order impugned before us on 30.06.2006 has taken note of the earlier remand order but still not accepting the request of the Revenue to remand the present case also back to the Assessing Authority, in case the Tribunal felt that the findings by the Assessing Authority were not sufficient. As far as acquittal of the accused persons in the Criminal Proceeding is concerned, it cannot be said to be amounting to automatic deletion of income, added in the hands of the Assessee in the present case under the Income Tax Act. Two proceedings, one under the Income Tax and another in Criminal prosecution operate in different fields and there is no doubt that the material collected during the course of criminal proceeding can also be used by the Authorities in the Income Tax proceedings also. But, the question is that the Appellate Authority should arrive at its own independent findings of fact on the basis of such material after issuing notice to the Assessee, giving him an opportunity to controvert the material against him. Therefore, mere acquittal of the Assessee along with other two co-accused by High Court, as quoted above cannot by itself result in setting aside of the assessment made by the Assessing authority in the present case. In these circumstances we are of the opinion that the matter again deserves to be remanded back to the Assessing Authority for fresh enquiry in the matter.
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