TMI Blog2003 (3) TMI 317X X X X Extracts X X X X X X X X Extracts X X X X ..... issued notice 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 11,236 1989-90 12,835 1990-91 17,612 1991-92 20,094" 4. In the computation of income, the Assessing Officer has taken the above undisclosed income which is only the interest from Gomtesh Construction for the following assessment years: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osed income for the assessment year 1990-91. 9. Before the Assessing Officer it was explained that the said deposit was a gift by Mrs. Pandya which was effected by giving credit to the assessee out of the existing credit balance in the account of Smt. Pandya in the books of Gomtesh Construction. In support of the explanation, a letter dated 1-5-1989 from Mrs. Pandya was also filed before the Assessing Officer. The Assessing Officer disbelieved the claim for the following three reasons: (1) In the letter dt. 1-5-89, a cheque was directed to be issued; however cash is deposited in the name of the assessee. (2) The source of income of Mrs. Pandya and whether she is assessed for tax are not mentioned in the letter and hence her creditworthiness cannot be ascertained. (3) The reason for giving the gift is not mentioned. 10. We have heard both the parties. It is noted that a similar issue came up before us for consideration in the case of Shri Chidesh H. Jain brother of the assessee and the addition was deleted vide our order dt. 14-5-2001 in IT(SS) A.No. 116/PN/96. For the reasons discussed therein, we see no justification for the impugned addition and delete the same. This gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the 11 persons and all of them had confirmed of giving the amounts either directly or through Shri H.G. Jain to the assessee. He submitted that in view of this position, the Assessing Officer was wrong in not accepting the Affidavits in support of the credits of Rs. 1,35,000 and prayed that the uncontroverted Affidavits may be accepted as conclusive evidence in support of the credits, especially as the addition has been made in the Block assessment and the matter is nearly 10 years old. 14. The learned D.R. supported the order of the Assessing Officer. 15. We have considered the rival submissions and perused the facts on record. It is noted that the Assessing Officer asked the assessee to produce these creditors but for this purpose, only four days were allowed and on 29-1-1997 instead of producing the creditors the assessee filed sworn Affidavits of these 11 persons. After receipt of these Affidavits, the Assessing Officer ought to have once again asked the assessee to produce these creditors to verify the contents of the Affidavits. Under the circumstances, we hold that adequate opportunity was not given to the assessee because the Assessing Officer after he received the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents of the confirmatory letters, he should have called upon the assessee to produce these two creditors because after filing the confirmatory letters, the onus got shifted to the court of the Assessing Officer. That was not done by the Assessing Officer because at no stage he asked the assessee to produce the two creditors. Under the circumstances, we hold that since the assessee had discharged the initial onus, addition of Rs. 10,000 as undisclosed income is uncalled for. This ground accordingly succeeds and the addition of Rs. 10,000 is deleted. Ground No. 1(e): 21. Ground No. 1(e) reads as under: "The learned ACIT (Inv) Cir. 3(2) Aurangabad has erred: (1) in making an addition to the undisclosed income relating to: (e) expenses recorded in seized books without availability of cash amounting to Rs. 50,860 in the Assessment year 1994-95" 22. On scrutiny of cash book for the tax year 1994-95 found and seized at the time of search, the Assessing Officer noted that the assessee had incurred following expenditure/made payments which were recorded in the seized books, without availability of cash: Date Amount Particulars 06-10-93 5000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he cash book filed before this Bench at pages 1, 6 and 8 of 2nd paper book, the learned counsel showed that everyone of the amounts mentioned by the Assessing 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 Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer. 30. After hearing both the parties, we see no justification for the impugned addition. First of all, the investment is Rs. 23,000 and not Rs. 30,000 wrongly taken 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 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... So far as other grounds are concerned, I fully concur with the learned Accountant Member. 41. So far as the arguments of both sides and other details as recorded by the learned Accountant 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 bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a 35 of the proposed order is concerned, after considering the material on record and the fact that the addition of Rs. 1,35,000 has been set aside to be decided afresh by the Assessing Officer therefore, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be said that the evidence comprised in the second Paper Book is additional evidence. It is abundantly clear from records that the said evidence was available before the Assessing Officer. As such, on this 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 1988-89 11,236 1989-90 12,835 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch 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 order. As such, it is beyond the power of the third Member to examine those aspects. However, I find that the aspect touched by the learned Judicial Member creates a dispute to be resolved by the Third Member. The learned Judicial Member intends to set aside the issue de hors such rider. In his opinion when the matter is going back for fresh adjudication before the Assessing Officer, the jurisdiction of the Assessing Officer should not be restricted w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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