9911796707
TMI Blog2003 (3) TMI 317X X X X Extracts X X X X X X X X Extracts X X X X ..... ice under section 158BC to the assessee, in response to which the assessee filed return of income for the block period assessment years 1986-87 to 1996-97 in Form No. 2B on 5-9-1996 declaring nil undisclosed income. The Assessing Officer made assessment under section 158BC on 30-1-1997 on a total income of Rs. 3,69,219. 2. Aggrieved by the order of the Assessing Officer, the assessee is in appeal before this Tribunal and four grounds have been raised. The same are discussed and disposed of as under. Ground No. 1 (a): 3. Ground No. 1(a) reads as under: "The learned ACIT (Inv) Cir. 3(2) Aurangabad has erred: (i) in making an addition to the undisclosed income relating to: (a) Interest from Gomtesh Constructions: Asst. Year Amount 1986-87 17,616 1987-88 13,083 1988-89 &nb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsp; 1990-91 17,612 18,000 1991-92 20,094 22,000 Shri S.N. Inamdar, the learned counsel for the assessee, submitted that the Assessing Officer has taken the above total income as undisclosed income on the ground that returns of income for these- years were not filed by the assessee. He pointed out that for all the above assessment years, the total income computed by the Assessing Officer was below taxable limit. Further the interest was already recorded in the books of account of Gomtesh Construction. He therefore urged that the Assessing Officer may be directed not to take the above total income as undisclosed income. 5. Shri Shishir Agarwal, the learned D.R. Strongly supported the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ground No. 1(c): 11. Ground No. 1(c) reads as under: "The learned ACIT (Inv) Cir. 3(2) Aurangabad has erred: (i) in making an addition to the undisclosed income relating to: c. cash credit of Rs. 1,35,000 from various persons in the Assessment year 1993-94." 12. For the reasons discussed in paras 13, 14 and 15 of the assessment order, the Assessing Officer has added credits aggregating to Rs. 1,35,000 as undisclosed income for the assessment year 1993-94. Briefly stated the facts are that in the books of account of the assessee seized by the Revenue, the account of Shri H.G. Jain showed total credits of Rs. 1,66,150. These were rough and incomplete books. In the final books of account prepared by the assessee after the search, there were credits of Rs. 16,150 and Rs. 15,000 in the names of Shri H.G. Jain (HUF) and H.G. Jain (individual) respectively, totalling to Rs. 31,150. The balance of the credits totalling to Rs. 1,35,000 were in the name of 11 different persons. During the course of assessment proceedings, the Assessing Officer by his letter dt. 2-1-1997 asked the assessee to produce these 11 persons before him within 8 days. As the time afforded was too short, the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee to produce the eleven persons, though he had asked the assessee to produce them on an earlier date. After taking into consideration the facts and circumstances of the case, we restore this issue to the file of the Assessing Officer. He is directed to go through the contents of the Affidavits and if he feels necessary, he may call the deponents for examination. Accordingly, this issue is restored to the file of the Assessing Officer. Ground No. 1(d): 16. Ground No.1 (d) reads as under: "The ld. A. CIT (Inv) Cir. 3(2) Aurangabad has erred: (1) in making an addition to the undisclosed income relating to: (d) cash credit of Rs. 5,000 from Mannumiya and Rs. 5,000 from Raju Kulkarni in Assessment year 1994-95." 17. For the reasons discussed in paras 12.1 to 12.2, the Assessing Officer added the amount of Rs. 10,000 as undisclosed income in respect of credits of Rs. 5,000 each appearing in the accounts of Shri Mannumiyan and Shri Raju Kulkarni. During the course of assessment proceedings, the assessee filed confirmatory letters from the two creditors. The Assessing Officer has held that the confirmatory letters did not give the details regarding immediate source of income; sour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulars 06-10-93 5000 computer system 11-10-93 4000 deposit in bank 20-10-93 250 term-loan repayments 27-10-93 6050 dynamic traders 25-10-93 1501 printing & stationery 27-10-93 9010 purchase of EPABX 29-10-93 11 printing & stationery 01-01-94 200 printing & stationery 05-01-94 25051 DD purchase &n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer in para 12.3 of his order (except Rs. 9,010 for date 27-10-93, which was not actually incurred), are duly accounted for in the final cash book. He submitted that the amount of Rs. 9,010 was not actually incurred and further stressed that the fact that the assessee received jobwork charges is not disputed nor is it the case of the Assessing Officer that these receipts were spent elsewhere. He therefore submitted that in view of these facts and explanation, the addition of Rs. 50,860 made by the Assessing Officer as undisclosed income deserves to be deleted. 24. Shri Shishir Agarwal, the learned D.R. relied on the order of the Assessing Officer. 25. We have considered the rival submissions and perused the facts on record. We find force in the submissions of the learned counsel. The Assessing Officer himself has accepted that the assessee was doing jobwork and job-work receipts during the period 1-4-93 to 31-3-94 were of Rs. 95,815. It is further noted that the job-work receipts which have been accepted by the Assessing Officer were not at all incorporated in the rough and incomplete cash book and hence, there was incorrect depiction of cash balances in the seized cash b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aken by the Assessing Officer. The whole position has been reconciled and the facts have further been elaborated in the case of Shri Chidesh Jain. Accordingly, we see no justification for the impugned addition and delete the same. This ground accordingly succeeds. Ground No. 1(g): 31. Ground No. 1(g) reads as under: "The learned ACIT (Inv) Cir. 3(2) Aurangabad has erred: (1) in making an addition to the undisclosed income relating to : (g) Income from Garima Enterprises amounting to Rs. 12,008 for Assessment year 1995-96" 32. For the reasons discussed in para 12.7 of the assessment order, the Assessing Officer has made an estimate of income of Rs. 12,008 from the assessee's proprietary concern M/s. Garima Enterprises. The Assessing Officer has estimated the job receipts at Rs. 1,08,000 as against Rs. 1,02,945 shown by the assessee and made estimate of allowable expenses at Rs. 95,992 against Rs. 1,12,651 claimed. The estimate has been made by the Assessing Officer on the ground that the job work receipts and the expenses are not fully verifiable. 33. We have heard both the parties. This is the case of Block assessment and it is noted that during the search no material was fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Member are concerned, in order to avoid repetition, I adopt the same for the purposes of my order except for the conclusion and findings in respect of the above two grounds. 42. After considering the arguments of both the sides, material on record as well as order of the Assessing Officer I find that the assessee filed a second paper book containing page Nos. 1 to 8 along with the covering letter dated 6-11-2001 by giving the following certificate: "Certified that the original cash book (final) was produced before the Assessing Officer. The papers at Sr. No.1 above are copies of the said cash book." From the above certificate it is concluded that no such document as contained from pages 1 to 8 of the second paper book have been filed before the Assessing Officer. Since the said statement is described as "Garima Enterprises 1993-94 - Cash/bank book - and cash in hand 01-04-93 to 31-03-94" and the same is not stated to have been filed before the Assessing Officer, therefore, it is nothing but an additional evidence. This is the new evidence for which assessee is found to have not made any request for admission of the same in terms of rule 29 of the ITAT Rules, 1963. Since rule 29 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, observations as recorded in para 35 of the proposed order is not appropriate. Therefore, in my considered view, no further direction as pleaded in ground No.2 in assessee's appeal for the Assessment year 1993-94 can be issued. Therefore, with respect to ground No.2 except for the Assessment year 1993-94 I agree with the finding and conclusion of the learned Accountant Member with respect to other assessment years. 47. As a result, appeal of the assessee is partly accepted in terms above. ORDER UNDER SECTION 255(4) OF THE INCOME-TAX ACT, 1961 Per Chhibber, Accountant Member.--As there is a difference of opinion between the Accountant Member and the Judicial Member, the matter is being referred to the President of the Income-tax Appellate Tribunal with a request that the following question may be referred to a Third Member or to pass such orders as the President may desire: "Whether on the facts and in the circumstances of the case, the view taken by the Accountant Member on grounds 1(e) and 1(f) and Ground No.2 relating to assessment year 1993-94 is correct or the view taken by the Judicial Member in setting aside these grounds is correct?" THIRD MEMBER ORDER Per Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aspect, I agree with the decision of the learned Accountant Member. 5. Coming to the next aspect contained in Ground No.2, I find that this issue relates to the assessment year 1993-94 only. Ground No.2 reads as under:-- "The learned ACIT (Inv) Cir. 3(2) Aurangabad has erred: (2) in considering the disclosed income as nil for Assessment year 86-87, 87-88, 88-89, 89-90, 90-91, 91-92, 93-94, 95-96." 6. The learned Accountant Member, while adjudicating this ground, has held that the crux of this ground for the assessment years 1986-87 to 199192 is covered by Ground No. 1 (a). Ground No. 1(a) reads as under:-- "The learned ACIT(Inv) Cir. 3(2) Aurangabad has erred: (1) in making an addition to the undisclosed income relating to: (a) Interest from Gomtesh Constructions: Asst. Year Amount 1986-87 17,616 1987-88 13,083 &nb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see, as such the issue was restored to the file of Assessing Officer. 10. The learned Judicial Member agreed to this aspect. He said in his order that beyond this no direction is required. The observation as recorded in Para 35 of the proposed order was found not to be appropriate. The dispute is qua the applicability of the decision of the Indore Bench of the Tribunal rendered in the case of Smt. Sitadevi Daga. This decision was followed by the Bench up to the assessment year 1991-92. 11. For the assessment year 1993-94, the learned Judicial Member has his reservation apropos the following of the said precedent. Why this decision is to be followed or why not to follow, there is no adequate discussion on this aspect. However, this issue is not beyond controversy. In the case of CIT v. M.M. George [2002] 264 ITR 45(Ker.), Hon'ble High Court has held that since the assessment is for a block period, it is not necessary to find out whether the income is below the taxable limit in any previous year. This view taken by the Hon'ble High Court is contrary to the decision of the Indore Bench of the Tribunal in the case of Smt. Sitadevi Daga. But these aspects are not highlighted in the or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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