TMI Blog2006 (7) TMI 302X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 as erroneous and prejudicial to the interests of revenue and wrongly presumed that an amount of Rs. 1 crore has escaped assessment. 2. On the facts and circumstances of the case, the learned CIT (Central), Nagpur also erred in ignoring the fact that the contentious issue of 'the ownership' of the seized diaries, on the basis of which the learned CIT (Central), Nagpur has made his presumption, is already subject-matter of an appeal before the Hon'ble CIT(A)-I, Nagpur and is under his consideration. And therefore according to the provisions of section 263(1)(c) the order passed by the learned CIT (Central), Nagpur is without jurisdiction and bad in law. 3. The learned CIT (Central), Nagpur has erred in making an addition of Rs. 1 crore to the assessed undisclosed income of the appellant on the basis of his presumptions. 4. The order passed under section 263 be quashed and the appellant be granted appropriate relief. 5. The additions of Rs. 1,00,00,000 made as above be deleted and the income of the appellant he reduced to that extent." Ground No. 2, is to the effect that the order of the Assessing Officer was subject-matter of appeal before the learned CIT (Central), Nagpu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer, it came to his notice that while entries at 51. Nos. 1, 3 and 4 were considered by the Assessing Officer, the entry at Sl. No. 2 on page 13 of diary No. A-67 was not considered by him for the purpose of framing the assessment for the block period. The entry was again reproduced by the learned CIT in his order on page 2 as under:- "50.00 lakhs 11-11-1996 to 10-11-2001 -Fix Double 1.0 crore This entry is in respect of Shri B.B. Mahajan, father in law of Shri N.H. Jalkote" Therefore, notices under section 263 dated 4-2-2004 and 9-2-2004 were issued to the assessee seeking his explanation as to why the amount of Rs. 1 crore may not be assessed in his hands, being the amount which had been omitted by the Assessing Officer for the purpose of assessment in his order. It was represented before him that the impugned entry was merely a hypothetical entry. No money was invested or received in respect of the aforesaid entry. It was further represented that the entry has been circumscribed by a rectangular box and it is followed by several other entries in the form of a running account. It was also represented that the entry was not considered by Shri P.B. Mahaj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 crore on 10-11-2001. 3.4 Coming to the argument of the assessee that the impugned entry was not verified, examined or explained in search proceedings, post search proceedings or in the proceedings of block assessment, it was pointed out by the learned CIT that the aforesaid failure was the reason for invoking provisions of section 263. He also referred to the fact that the aforesaid entry was repeated on page 20 of diary No. A-71, where running entries stopped at Rs. 52 lakh while on page 13 of diary No. A-67, these running entries were recorded up to Rs. 64 lakh. Therefore, his finding was that repetition of the entries at two different places shows that the entry was not merely a hypothetical entry but it represented a real transaction of placing an amount of Rs. 50 lakh as a deposit for a fixed period, doubling to Rs. 1 crore in a period of five years. 3.5 Coming to the argument that the search and seizure operation did not lead to any evidence about huge investment of Rs. 50 lakh, the learned CIT pointed out that the assessment in this case had been made solely and entirely on the basis of entries recorded in diaries by the assessee in his own handwriting. The diaries wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ri Prashant Mahajan. He passed revisionary orders on 25-3-2004 and 21-7-2004 respectively. These orders were based upon Annexure A-67 and Annexure A-71. Copies of these Annexures were placed on pages 1 and 3 of the paper book. The learned counsel pointed out that Annexure A-71 contained some entries, totalling up to Rs. 52 lakhs. These entries were reproduced on Annexure A-67 and there were some more entries on A-67, which totalled to Rs. 64 lakh. Both these annexures, on the top, contained certain entries, placed in a rectangular box. For the sake of ready reference, the entries in the box are reproduced below:- A-67 B.B. Mahajan "50.00 lakh 11-11-96 to 10-11-2001 Fix Duppat 1.00 crore" A-71 B.B. Mahajan "50.00lakh 11-11-96 to 10-11-2001 Fix 1.00 crore" The amount of Rs. 64 lakh, at which entries on A-67 ended on 18-9-2001, was declared as undisclosed income in the block return of Shri P. Mahajan as per his deposition under section 132(4) of the Act. The learned counsel further pointed out that in the course of search and in post search enquiry no evidence was found that the aforesaid amount of Rs. 50 lakh was advanced by the assessee to anyone, received by anyon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... noting regarding two godowns owned by Mrs. Rajshree Jalkote and Shri Vijay Jalkote, These notings had been recorded for the reason that Shri B.B. Mahajan had shown interest in purchasing these godowns. The import of the entry was that if Shri B.B. Mahajan intends to purchase the same, the consideration thereof would be to the tune of Rs. 2.60 lakh. The deal did not materialize and the property still stood in the names of Mrs. Rajshree Jalkote and Shri Vijay Jalkote. The learned counsel also pointed out that Shri B.B. Mahajan declared the income in respect of entries on A-67 made below the box. However, no undisclosed income was offered by him to tax on the basis of the entries in the box. The learned counsel also pointed out that the learned CIT referred to certain other entries, namely, Rs. 5 lakh becoming Rs. 10 lakh, which was accepted by Shri M.H. Andure and declared such amount as his income. It was pointed out by him that the impugned entry and the other entries were qualitatively different in nature in the sense that the other entries were considered subsequently in the running account while the impugned entry was not taken into account anywhere subsequently. This issue was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... going. In this case, nowhere it is found from where the funds are coming, (iv) Mr. M.B. Andure, Mr. M.B. Patil, Mr. Mahajan have signed the diaries as acknowledgement of transactions amongst themselves and not with the appellant. Thus, inference drawn by the Assessing Officer about the money lending transaction of the appellant is not based on correct appreciation of facts and evidences on record: It may be mentioned here that the learned DR objected to the fact that various documents such as notices, replies and the order of the learned CIT(A) were not placed in the paper book in full form. He pointed out that production of part evidence may not give a correct picture. In view thereof, the learned DR was requested to file complete copies from revenue's record and state his case on the basis of such complete evidence. 4.2 The learned counsel referred to statement of Shri P.B. Mahajan, placed in the paper book on pages 61 to 127. The English version of the relevant questions and answers were also placed in the paper book on pages 129 to 149. The aforesaid statement was recorded in Marathi on 21-11-2001 under the provisions of section 132(4). In answer to question No. 21, it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -9-2001. It was reiterated that even after reading of the statement of Shri P. Mahajan, his answer remains the same as given earlier. 4.4 On the basis of the aforesaid evidence, statements, notices and the orders, the learned counsel pointed out that both the Assessing Officer and the learned CIT(A) had applied their minds to the impugned entry placed in the box. It was further pointed out that the learned CIT had issued notice to the assessee before passing of the order by the learned CIT(A). The notice under section 263 was issued on 9-2-2004, and the revisionary order was passed on 25-3-2004, while the learned CIT(A) passed the order on 28-1-2005. He referred to the explanation of the assessee regarding the impugned entries recorded by the learned CIT in paragraph 7 of the order. It was pointed out that the impugned entry was not considered by Shri P. Mahajan when he declared his undisclosed income for the block period because the entry was hypothetical in nature. The entry was neither verified, examined nor explained during the course of search proceedings, post search proceedings or even the block assessment proceedings. It was pointed out that there is an error in this part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 21-7-2004. Thus, the learned CIT was also not sure whether the income belonged to the assessee or Shri P. Mahajan. 4.5 Coming to the legal issue, the learned counsel relied on the decision of Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd. v. CIT [2000] 243 ITR 83, in which it was inter alia pointed out that the words "prejudicial to the revenue" should be read in conjunction of the word "erroneous", finding place in section 263. Though the case was decided in favour of the revenue, it was held that where two views are possible and the ITO has taken one view with which the CIT does not agree, the order of the Assessing Officer cannot be treated as erroneous or prejudicial to the interests of the revenue, unless the view taken by the ITO is unsustainable in law. Having summarized the ratio of the decision, we would like to reproduce two paragraphs of this order on pages 88 89 to appreciate fully the ratio of the decision, as under:- "The phrase 'prejudicial to the interests of the revenue' has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of the Assessing Officer cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. In order to appreciate the ratio of this case fully, we consider it necessary to produce one paragraph from page 117 of the order, which dealt with the facts of that case and enunciation of law:- "We may now examine the facts of the present case in the light of the powers of the Commissioner set out above. The Income-tax Officer in this case made enquiries in regard to the nature of the expenditure incurred by the assessee. The assessee had given detailed explanation in that regard by a letter in writing. All these are part of the record of the case. Evidently, the claim was allowed by the Income-tax Officer on being satisfied with the explanation of the assessee. Such decision of the Income-tax Officer cannot be held to be 'erroneous' simply because in his order he did not make an elaborate discussion in that regard. Moreover, in the instant case, the Commissioner himself, even after initiating proceedings for revision and hearing the assessee, could not say that the allowance of the claim of the assessee was erroneous and that the expenditure was not revenue expenditure but an expenditure of capital nature. He simply asked the Income-tax Officer to re-examine the matter. Tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1988 thereon, there could be no basis for addition in the proceedings of assessment year 1989-90, especially when no tangible assets in the form of unexplained investments were found at the time of search which could justify huge additions made. 4.9 He also relied on the decision of Hon'ble ITAT, Nagpur Bench, in the case of Elite Developers v. Dy. CIT [2000] 73 ITD 379. In that case, the Assessing Officer assessed undisclosed income of the assessee at Rs. 71.32 lakh against nil income returned. The Assessing Officer assessed the gifts received by the fathers of three partners from NRI purchasers of flats and amount declared by way of receipt of "on-money" in statement recorded from one partner under the provisions of section 132(4), which was subsequently retracted. The Hon'ble Tribunal pointed out that the assessment of gifts was based upon wrong facts and, therefore, such assessment was bound to be wrong for the reason that the Assessing Officer failed to discharge his onus of proving that the gifted amount belonged to the assessee. The assessee had otherwise proved the identity, creditworthiness of the donors and genuineness of the transactions. Therefore, the amount could n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11-1996 to 10-11-2001. He pointed out that though the impugned entry formed part of the notice, the Assessing Officer did not make any specific enquiry in respect of the noting and, therefore, the assessee was not fully questioned about the import of the entry. Thereafter, he referred to volume No. VII of the paper book, which contained various replies given by the assessee and Shri P.B. Mahajan in respect of the impugned entry. In regard to entries at page 13 of A-67, which also included the impugned entry. The assessee replied vide his letter dated 23-9-2003 that the entries related to Shri B.B. Mahajan. It was explained that these transactions had been offered for taxation in the block assessment of Shri P.B. Mahajan as ascertained by him on enquiries from Shri B.B. Mahajan and Shri P.B. Mahajan. In regard to entries in A-71, it was explained that the transactions written on pages 1 to 24 pertained to S/Shri M.H. Andure, M.B. Patil, and P.B. Mahajan and that they will be in better position to give reply in respect of these entries. In regard to the entry on page 20, it was reiterated that the transactions related to Shri P.B. Mahajan and Shri B.B. Mahajan and that the assessee d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Assessing Officer was also a possible view and, therefore, his order could not be considered as erroneous or prejudicial to the interests of the revenue. The learned DR pointed out that while the proposition of law that if the Assessing Officer has taken one of the possible views, then, the order cannot be revised under section 263 represents the correct state of law. But that will be the case when the matter had been fully examined by the Assessing Officer and he took a reasonable decision in the matter. However, the Assessing Officer had not considered the matter fully in the instant case. 5.3 He relied on the decision of V. Narayanan v. Dy. CIT [2004] 88 ITD 43 (Chennai). In that case, some cash and a car were given by the company to his representative in India, who was honorary head of the company's representative office in India. The car was imported for assessee's use and later it was transferred to his name. The gift of car was in the nature of termination benefit though it was termed as a goodwill gesture. The information about receipt of the car was not examined by the Assessing Officer and, therefore, the Commissioner was right in concluding that the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee, which was not discharged by the assessee. Therefore, the order accepting the gifts was erroneous and prejudicial to the interests of the revenue. 5.8 He also relied on the decision in the case of Super Cloth v. Asstt. CIT [2006] 99 ITD 300 (Chennai), in which it was pointed out that lack of proper enquiry is sufficient to come to the conclusion that the order passed by the Assessing Officer was erroneous and prejudicial to the interests of the revenue. 5.9 He also relied on the decision in the case of CIT v. South India Shipping Corpn. Ltd. [1998] 233 ITR 546 (Mad.), in which the Assessing Officer allowed weighted deduction under section 35B on certain expenditure without verifying the claim with reference to statutory language of the relevant sub-clause. The Hon'ble Court pointed out that on a reading of the order of the Commissioner. It was clear that the ITO allowed weighted deduction on commission paid to brokers, charters and their brokers, while it was explained to the Assessing Officer that the commission had been paid to foreign brokers through whom the information had been obtained. The assessee took conflicting stands before the Assessing Officer and the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g revisionary jurisdiction. However, in view of the fact that there was ample material to show that the assessment was made without collecting any evidence or making any proper enquiry and it was also made in undue haste, the CIT was within his jurisdiction to pass the revisionary order. 5.13 He also relied on the decision in the case of Tarajan Tea Co. (P.) Ltd. v. CIT [1994] 205 ITR 45 (Gauhati), a case in which assessment was made under section 143(3) read with section 144B. The decision of the Court was that in spite of directions given by the IAC, it was the order of the Assessing Officer. The order was made without making due and proper enquiry, which was erroneous and prejudicial to the interests of the revenue. 5.14 He also relied on the decision of Hon'ble Supreme Court in the case of Smt. Tara Devi Aggarwal v. CIT [1973] 88 ITR 323. The facts of that case do not have any bearing on the instant case, however, the same may be stated. The assessee was assessed on the income voluntarily returned by her. However, it was found that she had not earned the income and, therefore, she was not assessable on that income. The Commissioner revised the order under section 33B of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y carried on by the assessee. 5.17 The learned counsel had also raised argument that the impugned entry does not show who lent the money, who received the money, and how the money was utilized. Therefore, his case was that the impugned entry could not be relied upon for coming to conclusion about undisclosed income in the case of the assessee. The learned DR vehemently contradicted this argument by stating that the entry was loud and clear. The entry was not made on any loose papers but it was made by the assessee in the diaries in his own handwriting. The impugned transaction along with certain other transactions were carried from one diary to another diary, which clearly established that the assessee was not doing any arithmetical exercise while writing the entry. In this connection he particularly relied on the decisions in the case of Tarajan Tea Co. (P.) Ltd. and Smt. Tara Devi Aggarwal. In the case of the aforesaid Tarajan Tea Co. (P.) Ltd., it was inter alia pointed out that the order was initially passed by the Assessing Officer although directions were given by the IAC under section 144B. Such an order is the order of the Assessing Officer, amenable to revisionary jurisd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resented income of the assessee and in the alternative the income of Shri P. Mahajan. It was also his case that if the Tribunal finds that further enquiries are required to be made in the matter to come to the correct conclusion, such direction may be issued either to the Commissioner or to the Assessing Officer. A reference was also made to the affidavit filed by the assessee in the course of assessment proceedings; in which it was inter alia mentioned that the transactions in the diaries and documents seized in the course of search and seizure operation were not those of the assessee but those of Shri P. Mahajan, M.H. Andure or M.B. Patil. His statement in the course of search and seizure proceedings was also referred to, in which it was clearly stated that the diaries were written by him. He referred to the decision in the case of Hotel Kiran v. Asstt. CIT [2002] 82 ITD 453 (Pune.), in which it was inter alia held that where a statement has been made under section 132(4) voluntarily without coercion or threat and the contents of the statement are clear and unambiguous, the same are binding on the assessee even if retracted subsequently by him. 6.1 In the rejoinder, the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In spite of clear statement of the assessee that the transactions in the diaries did not belong to him, he was assessed at undisclosed income of about Rs. 11 crore. At no point of time, there was any deviation in the statement of the assessee and, thus, there was no retraction by him. Insofar as Shri P. Mahajan is concerned, he initially deposed to the effect that he had taken loan from the assessee and his wife, but later on explained that the transactions were his transactions. This change in his stance does not amount to retraction in respect of impugned entry. 6.4 The learned counsel also referred to the impugned transaction mentioned in the diaries. According to him, even if the transaction is presumed to have taken place, the notings do not show who advanced the money and who took the money. No security was furnished in respect of transaction. In view thereof, no court will consider such an evidence for enforcement of the liability in case of dispute between the transacting parties. Thus, such an entry cannot be relied upon for making assessment in the case of the assessee especially when none has owned up the transaction. In any case, non-taxation of the amount after obta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Officer had examined the entries including the impugned entry and in respect of impugned entry he came to the conclusion that no addition could be made in the hands of the assessee or in the hands of Shri P. Mahajan. Thus, it is a case of mere change of opinion and the learned Commissioner could not have revised the order merely on change of opinion. 7.1 We have considered the facts of the case and rival submissions. On examination of the arguments of the rival parties, we find that they have gone far beyond the ambit of appeal before us. The question before us is whether the learned Commissioner was right in invoking jurisdiction under section 263 of the Act and hold that the order of the Assessing Officer was erroneous and prejudicial to the interests of the revenue; and whether he was justified in enhancing the income of the assessee by a sum of Rs. 1 crore. We are not concerned in this appeal with merits and demerits of additions made by the Assessing Officer in respect of other entries. Therefore, we consider it appropriate to confine ourselves to the grounds of appeal and in doing so, we find support from the decision of. the Hon'ble Punjab Haryana High Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mahajan, in the course of search, initially deposed that he had taken loans aggregating to about Rs. 64 lakh from the assessee and his wife. When this part of the statement was shown to the assessee, he again reiterated that such a statement of Shri P. Mahajan is not correct. Neither Shri P. Mahajan nor the assessee ever deposed that the impugned entry was backed up by any financial transaction. The revenue could not find out the money involved in the transaction in spite of extensive searches and enquiries made thereafter. While the entries are clear with reference to dates and amounts and they found place in two different diaries, the entries do not clearly show who lent the money and who borrowed the money. Subsequent entries on A-67 have been signed by Shri P. Mahajan but the impugned entry placed in the box on the top of the diary page has not been signed by anyone. During the course of assessment, the Assessing Officer sought explanation about the impugned entry in questionnaire issued to the assessee on 23-9-2003. The assessee maintained his earlier stand that the entry was a hypothetical entry. In regard to other entries, he maintained the stand that they pertained to othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mahajan. The assessee was also questioned about the impugned entry. It was deposed that after going through all these entries, his explanation remains the same as given earlier and the earlier reply was that the entry is hypothetical in nature. It appears that after the conclusion of the search, Investigation Directorate made enquiries regarding the location of money involved in the impugned entry, but such enquiries remained infructuous. The Assessing Officer made enquiry into this and other entries and a specific questionnaire dated 23-9-2003 was issued to the assessee. In this questionnaire, on page 18, the impugned entry was specifically reproduced. The assessee submitted his explanation in letter dated 4-11-2003. It was explained that it was a casual noting made during the course of discussion held by Mahajan family and that he specifically remembered that Shri B.B. Mahajan was telling his sons that they should carry out the business efficiently to maximize profits. He was illustrating that if Rs. 50 lakh are kept in fixed deposit for five years, it can become Rs. 1 crore. From the aforesaid, it is clear that enquiry was made into the matter at the time of search and also in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment proceedings and, therefore, such order could not be held to be erroneous and prejudicial to the interests of the revenue. We find that in the instant case also, the diaries had been seized by the authorities in the course of search and seizure proceedings. The assessee was also required to furnish explanation about the impugned entry and other entries, which was given to the Assessing Officer. Thus, we are of the view that this decision supports the case of the assessee. The learned DR relied on the decision in the case of V. Narayanan. In that case, return filed by the assessee was accepted under section 143(1) without carrying out any scrutiny. Foreign company had sent USD 1,00,000 and also a Benz car, which was later allowed to be retained by the assessee. However, this amount and the value of the car was not shown as income and was also not assessed to tax. The Commissioner held these receipts to be in the nature of termination benefits and also pointed out that no enquiry whatsoever was made by the Assessing Officer. The order was upheld by the Hon'ble Tribunal. The facts of instant case are entirely different inasmuch as the order for the block period was made by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the interests of the revenue. It may be noted that case was one of failure to make enquiry into the explanation filed by the assessee. The Assessing Officer had to satisfy himself whether conditions prescribed in sections 36(1)(vii), 40A(3), 68 etc., were satisfied or not. In other words, the explanation of the assessee had to be tested with regard to the statutory provisions on the issues involved, which was not done. However, the instant case is one where diaries were discovered by the revenue and the question was whether impugned entry represented any real and substantive financial transaction undertaken by the assessee. Therefore, we are of the view that the facts of that case are also distinguishable. Coming to the case of Bharat Petroleum Corpn. Ltd., the issue was purely legal, namely, whether the assessee was entitled to get deduction under section 80-IA on the amount of interest earned by it in respect of inter-corporate deposits. The claim was allowed without considering the decision of territorial High Court. We do not have the case of allowability of any deduction before us. Therefore, the facts of that case are totally different from the facts of the instant case. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uiry was feasible on the facts of the case and, thus, the ratio of that case is distinguishable from the facts of this case. We have examined this matter. We find that the learned Commissioner did not make any further enquiry while making addition of a sum of Rs. 1 crore to the undisclosed income of the assessee. His conclusion was based on the same facts which were there before the Assessing Officer. Therefore, we are of the view that facts of that and this case are distinguishable in the sense that no further enquiry was required prima facie or seemed feasible after searching the assessee, making post search enquiry and questioning the assessee about the impugned entry in the course of assessment. The issue in Pandit Lashkari Ram's case was that revised return was accepted without making any enquiry into such return, which is not the issue in the case before us. The learned DR had also relied on the decision of Hon'ble Supreme Court in the case of Rampyari Devi Saraogi. In that case initial capital, gift and sale of jewellery were accepted without making any enquiry. The Assessing Officer also did not find out whether the assessee was carrying on business from the given addre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter as that would not have led to any adverse conclusion against the assessee. Coming to the decision of Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd., the facts were that there was no application of mind by the Assessing Officer. There was no material to support the claim of the assessee that receipt was in lieu of loss of agricultural income. Therefore, the conclusion of order being erroneous was held to be justified. However in the instant case, all the facts went on record and the Assessing Officer had applied his mind. Therefore, we are of the view that it is a case of change of opinion about the interpretation of the impugned entry and not a case where the Assessing Officer had not examined the matter. 8.5 The question still remains whether further enquiries were called for as the learned DR repeatedly hammered this point. We have considered this matter also. We have already pointed out that department had made whatever enquiry it could make to locate the corresponding assets. Neither cash nor any other investment relatable to the impugned entry was found. We have also seen that other three entries of Damduppat stand on somewhat different footing from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Amar Natvarlal Shah, the Assessing Officer sought to make addition on the basis of certain loose papers found from the assessee after decoding the figures. The Hon'ble Tribunal pointed out that the seized paper did not mention the year, where as the Assessing Officer took the year to be 1988 and made addition in assessment year 1989-90. The Assessing Officer did not examine the important witnesses to come to a proper conclusion in the matter. No tangible asset was found at the time of search, which could have justified the addition. Thus, there was no evidence that the assessee had in fact received 'on-money'. Coming to the facts of this case, no asset has been found, it is not known who advanced money and who received the money. The assessee had deposed that the contents of the diary did not pertain to him. Shri P. Mahajan owned up the transactions below the box but not the transactions mentioned in the box. Thus, the learned CIT has not brought any fact on record to establish that the entries in the box represented any substantial financial transaction. In any case, there is substantial scope of difference of opinion in coming to proper conclusion in the matter. There is nothin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e jurisdiction to pass order on this issue. We have already seen that the Assessing Officer had not made any addition on the impugned entry. Therefore, there was no question of this issue becoming subject-matter of appeal before the learned CIT(A). We have also seen that the learned Commissioner had passed the order before passing of the appellate order by the learned CIT(A). Section 246 of the Act does not provide for any appeal to the CIT(A) against the order of the Commissioner of Income-tax, passed under section 263 of the Act. It appears that it is for this reason that the learned counsel did not press this ground. Nonetheless, we are of the view that there is no force in the ground of appeal that this issue was subject-matter of appeal before the learned CIT(A). Since this issue was decided by the learned CIT in the revisionary order, it becomes clear that the learned CIT(A) erred in dealing with this issue and exceeded his appellate jurisdiction under section 246. 9.4 In a nutshell, it is held that the order passed by the Assessing Officer was not erroneous and prejudicial to the interests of the revenue as contemplated under section 263 of the Act. Therefore, the addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... akh mentioning the date as 18-9-2001. The entries in the box pertained to Rs. 50 lakh becoming Rs. 1 crore between 11-11-1996 to 10-11-2001. The later date is subsequent to 18-9-2001. The impugned entry in the box has not been signed by Shri P. Mahajan. 12. The arguments of the learned counsel and the learned DR were the same as in the case of Shri Jalkote. In fact separate arguments were not made by anyone of them before us and they relied in the overall arguments made in the case of Shri Jalkote. It is for this reason that we have pointed out some dis-similarities in the case of the assessee and Shri Jalkote in the opening part of this order. However, we are of the view that such distinction does not make any difference to the overall conclusion that the matter had been examined by the Assessing Officer and the learned Commissioner made addition of Rs. 1 crore without making any further enquiry. Thus, it was a case of mere change of opinion. Therefore, relying on our order in appeal No. 625/PN/04, the addition of Rs. 1 crore made by the learned Commissioner in this case is deleted. In view of this finding, the without prejudice ground of appeal regarding addition of Rs. 50 lakh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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