TMI Blog2002 (12) TMI 217X X X X Extracts X X X X X X X X Extracts X X X X ..... during the course of the search. Out of the group, 10 regular firms and few individuals were filing their returns regularly, but in other cases, including that of the assessee, no returns were filed and no assessments had taken place before the search action was taken. As far as the firms were concerned, the returns were filed for the assessment year 1995-96 and the assessments were also made. Apart from these partnership firms which had filed their regular returns, there were 42 AOPs, 23 partnership firms, 3 HUFs, 3 family trusts and 15 individuals out of whom the assessee is one such individual. 3. The block assessments were completed in the case of a number of AOPs and these assessments were challenged in appeal before this Tribunal. The representative case was that of G.C. Associates v. Dy. CIT [2003] 80 TTJ (Pune) 539 which was decided by this Tribunal vide order dated 19-8-2000. Some of the grounds in the present appeal have already been dealt with in the order of the Tribunal in the case of G.C. Associates, Pune, to which suitable reference will be made later on while discussing the grounds of appeal. 4. After the search, assessment for the block period 1987-88 to 1997- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k hearing before the CIT, Pune, and file your written objections with evidence to him with a copy to this office on or before 25th September, 1997." In view of this specific opportunity given to the assessee, the assessee filed number of papers and evidences before the CIT with his letter dated 26th September, 1997. Copies of these evidences and submissions have been placed in paper book No. 1. From the various letters addressed by the Assessing Officer seeking information from the assessee, it is clear that scrutiny of Bafna group of cases started some time in the month of June, 1997, as is clear from the letters issued by the Assessing Officer dated 24th June, 1997, 4th July, 1997, 7th July, 1997, etc. As far as the assessee is concerned, his case was taken up along with other individual assessees, viz., his brothers, his mother and his sons, etc. Thus, it is seen that in the short span of three months, compiling data for large number of assessees for a period of ten years was extremely difficult. This was mainly because the activities of the assessee and the group were on very substantial scale. It was submitted by the learned counsel of the assessee that getting the data from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that this ground is identical to ground No. 1 in the case of G.C. Associates. This has been dealt with in paras 5 to 9 of the order dated 18th August, 2000, in the case of G.C. Associates. As per para 9 in that order, we have held that filing of the belated return was valid in law and the Assessing Officer is directed to take cognizance of the entire return as also its accompaniments in regard to computation of income. 10. Ground No. 2 reads as under: "On facts and circumstances prevailing in the case and as per provisions of law, it be held that the undisclosed income should have been assessed at Rs. 36,21,770 as is admitted by the appellant as against Rs. 2,93,78,183 computed by the Assessing Officer. The appellant be granted just and proper relief in this respect." This is general ground challenging various additions made to the undisclosed income returned. This ground has, therefore, to be read along with other grounds. The ground does not, therefore, call for any specific comment. 11. Ground No. 3(a) reads as under: "3. Without prejudice to ground Nos. 1 and 2, and circumstances prevailing in the case and as per provisions of law it be held that: The Assessing Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted as per section 158BB for computing undisclosed income. Accordingly, this ground is allowed in part. 14. Ground No. 3(c) reads as under: "The Assessing Officer is in error in granting depreciation on pro rata basis for the period from 1st April, 1996 to 12th September, 1996. The depreciation should have been allowed in full as per provisions of law and on facts and circumstances prevailing in the case for the said period. Just and proper relief be granted to the appellant in this respect." The facts and arguments of both the sides on this ground are identical to those discussed by us in our order in the case of G.C. Associates. As such, the decision given by us in our aforesaid order (para 31) will apply mutatis mutandis. For the detailed reasons given in our aforesaid order, we direct the Assessing Officer to allow depreciation at the rate of 50 per cent of the allowable depreciation for the broken period. This ground accordingly succeeds. 15. Ground No. 3(d) reads as under: "The Assessing Officer ought to have granted claims of expenses pertaining to trips of trucks, truck expenses and administration expenses on the basis of the P L, a/c submitted by the appellant al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st for credit of advance tax. This ground accordingly fails. 18. Ground No. 3(g) reads as under: "The Assessing Officer is in error in computing the income pertaining to the previous year ended on 31st March, 1996 and for the period from 1st April, 1996 to 12th September, 1996, as undisclosed income and not granting relief in terms of provisions of section 158BB(1)(d) of the Act. It further be held that the entire, income so computed for the said period is to be adjusted and to be set off in terms of provisions of section 158BB(1)(d) of the Act and tax imposable on such income would be regular tax-leviable under the general provisions of the Act and not at the rate of 60 per cent chargeable on the basis of undisclosed income. Just and proper relief be granted to the appellant in this respect." 19. In this ground, it has been contended that the Assessing Officer was in error in computing the income pertaining to the previous year ending on 31st March, 1996, and for the period from 1st April, 1996 to 12th September, 1996, as undisclosed income and not granting relief in terms of provisions of section 158BB(1)(d) of the Act. It is further contended in this ground that the entire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is not, therefore, as if the income on the basis of books of account could not have been computed. Accordingly, the income so computed on the basis of books of account is directed to be deducted as per section 158BB(1)(d). In this, we stand supported by our decision in the case of G.C. Associates and also in the cases of Shradha Constructions v. Asstt. CIT [2001] 76 ITD 85 (Pune) and Sou. Vidya Madanlal Malani v. Asstt. CIT [2000] 74 ITD 341 (Pune). This ground accordingly succeeds. 23. Ground No. 4(a) reads as under: "Without prejudice to ground Nos. 1, 2 and 3, on facts and circumstances prevailing in the case and as per provisions of law it be held that: a. Addition of Rs. 50,000 out of cash found at Rs. 55,054, that of Rs. 3,35,329 on account of value of part of the jewellery found at the time of search and seizure that of Rs. 5,07,543 on account of value of silver found at the time of search and seizure is unjust and improper. The same be deleted." This ground has to be read in the context of block assessments in the case of the assessee as well as of other individual members of the Bafna family. Shri K.A. Sathe, the learned counsel for the assessee, submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound of Rs. 4,48,089 is much less. He, therefore, submitted that this is not a case of excess cash found, but rather a case of shortage of cash. No addition, therefore, can be made in the case of the assessee or in the case of any other assessees in Bafna group in respect of the above cash. The learned counsel further submitted that the assessee has tried to reconcile the shortage in cash, and according to the assessee, Rs. 3,31,906 represents IOUs in the name of welders, fitters, painters or staff members. According to the learned counsel, the assessee has a system of giving advances to the various staff members as also persons to whom some work like welding, painting, etc. is given. At the time when the advances are given, entries in the cash books are not made, but when the final bill is received from the concerned staff member or the concerned welder, fitter, etc. expenses are debited. He submitted that a separate record is kept of such IOUs or the advances given which on the date of raid were of Rs. 3,31,906. The balance of Rs. 1,02,674, according to the learned counsel, representing further shortage will be on account of cash withdrawn by the family members from the family co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lady and further credit for subsequent purchases should have been granted. According to the assessee, most of the jewellery was explained. However, if any part of the jewellery was to be treated as unexplained, benefit of intangible additions, particularly on account of shortage of cash may be allowed to be set off against the unexplained part of the jewellery. Similar claim was made in respect of silver and it was pointed out that silver was also declared in the wealth-tax returns. 29. In the course of arguments before us, the learned counsel filed full details of jewellery found which are to be found on pp. 3 to 5 of paper book No. 2. These details show the entire jewellery found in the house of Bafnas and it was requested that instead of considering the jewellery in the bedroom of each member of the family, the entire jewellery should be seen as a whole for the family, particularly because Smt. K.C. Bafna who was the senior most member of the family and Shri G.C. Bafna were also having jewellery of the family. The learned counsel submitted that the total jewellery as found in the various bedrooms was 8122.24 gms. as is clear from second column on p.4. Out of this, jewellery to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and purchase of silver of 12.650 kg. on 19th November, 1989. Thus, the silver which is to be explained is 72.57 kgs. [131.39 kgs. (-) 58.82 kgs.]. The learned counsel further submitted that some credit for silver purchased during the period from the assessment year 1982-83 to 1986-87 may be given. If any silver is considered to be unexplained, the learned counsel submitted that this may be considered to be out of cash shortage as has been shown earlier. He, therefore, submitted that no addition on account of silver also is required. 31. The learned Departmental Representative submitted that the facts and figures given by the learned counsel need to be verified at the end of the Assessing Officer because these were not before him at the time of framing the assessment. 32. We have considered the rival submissions and perused the facts on record. We find that vide letter dated 26th September, 1997, the assessee had brought to the notice of the learned CIT that the lady members of Bafna family had declared jewellery in their Wealth-tax returns filed for the assessment year 1982-83. This fact was not before the Assessing Officer. It was also pointed out that jewellery was purchased ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Bombay High Court in the case of CIT v. Shamlal Balram Gurbani [2001] 249 ITR 501. The learned counsel submitted that the above ground was purely a legal one and did not require any investigation of fresh facts. The learned counsel further submitted that the various firms in which the assessee was partner were regularly filing their returns of income till the date of search and in any case the returns for the assessment years 1987-88 to 1992-93 were already filed. The Assessing Officer had also undertaken the block assessments of these firms simultaneously with the block assessment of the present assessee. In dealing with the share profit of the various firms in para 4 of his order, the Assessing Officer stated that the assessee was asked to explain why his share profit should not be taken as undisclosed income for the assessment years 1987-88 to 1992-93 and the assessee was also asked to explain the credits in the capital account. Since the information was filed only in the case of M/s. Bafna Transport India which was assessed at Bombay, in all other concerns the entire share profit as well as credits to capital account were assessed as undisclosed income of the assessee for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these cannot be considered as undisclosed income of the assessee. 38. Ground No. 4(c) reads as follows: "Addition on account of household expenses aggregating to Rs. 4,30,858 for the block period is unjust and improper and is based on no evidence and arbitrary out of guesswork, conjectures. The addition so made be deleted. The appellant be granted just and proper relief in this respect." 39. This ground is also a ground common to all the individual assessees in this group. During the course of assessment, details regarding household expenses could not be furnished. The Assessing Officer made the addition with the following remarks: "(3) Household expenses: Vide this office letter dated 2nd June, 1997, the assessee was asked to file details of household expenses with their break-up. However, the assessee has not filed the details. During the course of hearing, the assessee filed details of family members, according to which, there are nine major family members including the mother of the assessee Smt. Kundanbai C. Bafna. Since the assessee has not filed the details of household expenses, same are estimated at Rs. 75,000 in assessment year 1987-88 with the increase of 10 per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s as Household expenses yr. shown by the estimated (Rs.) assessee (Rs.) -------------------------------------------------- 1989-90 1,20,000 90,750 1990-91 2,37,500 99,825 1991-92 3,00,000 1,09,807 1992-93 4,46,000 1,20,786 1993-94 5,52,000 1,32,865 1994-95 5,64,000 1,46,152 1995-96 5,64,000 1,60,767 1996-97 2,32,000 1,76,876 (broken period) -------------------------------------------------- The learned counsel further submitted that the withdrawals made by the assessee and the family members are from the firm M/s. Bafna Motor Transport, Pune, and M/s. Bafna Road Lines and subject to the verification of the above figures, it would to seen that the withdrawals shown by the assessee and family members are far in excess of what the Assessing Officer estimated by way of household expenses. He, therefore, submitted that there is no justification for the impugned addition. 42. The learned Departmental Representative relied upon the order of the Assessing Officer. 43. We have considered the rival sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be subject-matter of block assessment, there being no material found during the search suggesting any undisclosed income and because the details of credits were already available on record of the firms before the search, factually also there does not appear to be any warrant for taxing the credits appearing in the capital account. He further submitted that it will be seen that most of the credits appearing in the capital accounts to the extent the credits represent the amounts introduced by the assessee and they are mostly transfers made from one firm to another and there is no element of income involved. 46. The learned Departmental Representative relied upon the order of the Assessing Officer. 47. We have considered the rival submissions and perused the facts on record. The submissions made by Shri Sathe deserve to be verified at the end of the Assessing Officer. We accordingly direct the Assessing Officer to verify details of the credits as have been filed before the CIT on pp. 237 to 383 and re-adjudicate upon the issue after giving an opportunity of being heard to the assessee. 48. Ground No. 4(e) reads as under: "Addition in aggregate of Rs. 19,11,135 for assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also addition on account of dividend, interest, etc. as separately made. 51. The learned Departmental Representative relied upon the order of the Assessing Officer. 52. We have considered the rival submissions and perused the facts on record. At the time of assessment, details of credits in the savings bank account in various banks were not available. Since full details regarding credit are now available, these deserve to be verified at the end of the Assessing Officer. Further, from the submissions of the learned counsel, it is clear that double addition has been made. Under the circumstances, we deem it fit to set aside the order of the Assessing Officer on this issue and restore the issue to his file with the direction that he should go through the details and re-adjudicate upon the issue after giving an opportunity of being heard to the assessee. 53. Ground No. 4(f) reads as follows: "Addition of Rs. 4 lakhs on account of value of stock of wooden logs is for assessment year 1996-97 is unjust and improper. The additions so made be deleted. Just and proper relief be granted to the appellant in this respect." 54. During the course of search and seizure of Bafna Auto Eng ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the impugned addition. 55. The learned Departmental Representative relied upon the order of the Assessing Officer. 56. We have considered the rival submissions and perused the facts on record. We find force in the submissions of the learned counsel, but the same deserve to be verified from the books of account which were seized. The Assessing Officer is directed to verify whether the payment of Rs. 2,75,000 was made from Bafna Roadlines in the year 1995-96 and was debited in the name of Suparshwanath Constructions on behalf of the family members. Further, payment of Rs. 4,00,000 was made towards purchase of wooden logs in the year 1990-91 and out of which Rs. 2,00,000 was debited in the books of Bafna Motor Transport Co. (Poona) on behalf of family members of Bafna group under Suparshwanath Constructions. This fact also needs to be verified by the Assessing Officer. Accordingly, we restore this issue to the file of the Assessing Officer and direct him to verify the facts and readjudicate upon the issue after giving an opportunity of being heard to the assessee. 57. Ground No. 4(g) reads as under: "Addition of Rs. 15,68,400 for assessment year 1996-97 on account of invest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were partners. Full details explaining source of investment and account extracts in respective concerns are enclosed highlighting the relevant portion. As far as investment by individuals in BIFSPL is concerned, no documents or loose papers were found during the course of search. Queries were raised on the basis of details filed by the assessee." 60. The learned Departmental Representative relied upon the order of the Assessing Officer. 61. We have considered the rival submissions and perused the facts on record. It is noted that the Assessing Officer has rejected the explanation filed by the assessee without any verification. Least the Assessing Officer was expected to verify the contents of the letter dated 15th Sept., 1997, which was filed before the Assessing Officer. In our opinion, the Assessing Officer should have given adequate opportunity to the assessee and accordingly, we restore this issue to the file of the Assessing Officer. He is directed to go through the details filed by the assessee and get explanation wherever necessary from the assessee and readjudicate upon the issue after giving an opportunity of hearing to the assessee. 62. Ground No. 4(h) reads as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oks of firms where he was a partner. As far as reference in the Assessing Officer's order on p.7, loose paper Nos. 3 and 4 of bundle 1 seized by party No. 1 on 13th Sept., 1996, the Assessing Officer made reference to the amount of Rs. 1,18,428 on p.3. According to the learned counsel, the amount was paid to Hotel Ashoka Executive for Swati Bafna's marriage. The amount of Rs. 1,18,428 was paid as follows: ----------------------------------------------------------- 5-11-1992 Rs. 20,000 paid by cheque vide withdrawal by No. 048052 GCB from BMT Co.,Poona 15-12-1992 Rs. 30,000 paid by cheque vide withdrawal by No. 048093 GCB from BMT Co. Poona 5-01-1993 Rs. 11,600 paid by cheque vide withdrawal by No. 048123 GCB from BMT Co., Poona 15-3-1993 Rs. 25,000 paid by cheque vide withdrawal by No. 048215 GCB from BMT Co., Poona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee. Details of expenditure show that same has been incurred on mandap, stage, decoration, generator, etc. It appears that some marriage /function has been performed on 30th May, 1986, for which no details have been filed by the assessee. In view of the above, expenditure of Rs. 1 lakh is estimated on the above function and the same is treated as undisclosed income of the assessee for assessment year 1987-88 for which the year ending is 30th June, 1986." According to the learned counsel, the said loose paper reflects statement of expenditure for function held on 20th May, 1986. This amount was paid from the withdrawals made by the group from time to time. We do not find any merit in this contention of the learned counsel. From the tenor of the loose paper, it is clear that the expenditure was incurred outside the books of account. Accordingly, addition has to be made, but it has to be restricted to Rs. 27,143, i.e., details of expenditure given in the loose paper and there is no scope for any estimation at Rs. 1,00,000. Accordingly, we retain an addition of Rs. 27,143 and the assessee will be entitled to a relief of Rs. 72,857. 68. Ground No. 4(i) reads as follows: "Additions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same. For example-L.P. No. 4: The assessee and his other family members purchased wooden logs for construction at Suparshwanath bungalow from Shree Mahavir Saw Mills, Paratwada and R.S. Pendhari. The payments were made from drawings made from the business from time to time. Further payment of Rs. 4 lakhs was made towards purchase of wooden logs in the year 1990-91 and out of which Rs. 2 lakhs was debited in the books of Bafna Motor Transport Co. (Poona) on behalf of family members of Bafna group. According to the learned counsel this is a vital issue and this fact has not been taken into consideration by the authorities below. Similarly, an amount of Rs. 2,75,000 was paid to Mr. Pendhari for purchase of wooden logs in the year 1995-96 and was duly recorded in the books of Bafna Roadlines, but the Assessing Officer did not verify the entries from the books of Bafna Roadlines. Similarly, for L.P. No. 8, according to the learned counsel, reply was filed before the learned CIT vide letter dated 26th Sept., 1997 and submitted that these were mere jottings in the name of B.C. Bafna, N.C. Bafna and S.C. Bafna. The figures on the loose paper do not show whether this is an income to G. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt on these scores." The above additions related to alleged investment in shares seized during the course of search. Shares given in the annexures are few out of large number of shares seized by the Department on 12th Sept., 1996. Shri Sathe submitted that reply was filed before the CIT under common issue vide letter dated 26th Sept., 1997. Further, chart showing shares seized and source of investment of that shares was enclosed at the time of hearing before the CIT. He further submitted that this chart was already filed before the Assessing Officer during the course of assessment proceedings. He drew our attention to the chart showing investment in shares for the respective assessment years and submitted that it can be seen that all investment made was from regular books of account and transactions were duly recorded in the books of account. The learned counsel further submitted that in Annexure 9, the Assessing Officer computed the investment in shares for the assessment year 1987-88 seized on 12th Sept., 1996. In the chart the date of acquisition is also written against various shares. In that certain dates were prior to block period which means that the investment in that par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perused the facts on record. We have already restored the issue of shares seized during the course of search to the file of the Assessing Officer for verification as to whom the shares belong and to verify the source of investment. Further, we do not find any justification on the part of the Assessing Officer for estimating dividend at the rate of 30 per cent of the investment. There cannot be any uniform formula of dividend on investment because investments are in shares of different companies. Accordingly, only the dividend which the respective company had declared has to be added in the hands of those persons to whom the shares belonged. Accordingly, we restore this issue to the file of the Assessing Officer with the direction that as per our directions given in respect of the seized shares supra in para 64 and to add only the dividend actually declared by the respective company in the hands of the respective persons in the group. 80. Ground No. 4(l) reads as under: "The Assessing Officer is in error in not considering the relief pertaining to the interest earned on fixed deposit receipts with bank covered by section 80L, amount paid towards life insurance premiums and othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clusion of shares of other members of the family and shares of the period earlier to the block period. Even while computing undisclosed income for the purposes of block assessment, normal deductions which are available to the assessee in computing capital gains are available as is clear from the provisions of section 158BB according to which provisions of Chapter IV are applicable. Section 48 falls within Chapter IV and accordingly, it has been submitted before us that there is no reason for the Assessing Officer to deny benefits of deduction under section 48 as might be due. 85. The learned counsel also brought to our notice that the Assessing Officer has considered the transactions prior to the block period. This would be clear from the fact that in Annexure 30 in computing the income for the assessment year 1987-88 he has included profit of Rs. 6,83,172 as profit on sale of shares and an amount of Rs. 4,90,236 is added as investment in shares. Details of Rs. 4,90,236 are to be found on p. 224 of paper book No. 2. This is copy of the statement considered by the Assessing Officer. In this chart, it has been clearly written by him that these shareholdings are as on 12th Oct., 198 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntal Representative submitted that this ground is consequential to ground No. 4(j) dealing with shares and accordingly, the matter may be decided. Since we have restored the issue regarding investment in shares and dividend on shares, this matter being consequential, we restore the same to the file of the Assessing Officer. He is directed to readjudicate upon the issue following our directions given in respect of shares seized in para 64 supra. 91. Ground No. 4(o) reads as under: "Addition of Rs. 300 in assessment year 1992-93, Rs. 2,700 in assessment year 1993-94 and Rs. 17,100 each in assessment years 1994-95 to 1997-98 being the dividend estimated on shares owned and held by Swati G. Bafna alias Mrs. Swati Mehta is unjust and improper and contrary to the provisions of law. The addition so made be deleted. It may further be held that dividend estimated at 30 per cent on investments by the Assessing Officer is erroneous. The appellant be granted just and proper relief in these respects." This ground is identical to ground No. 4(k). For the detailed reasons given in para 69 supra, we restore this issue to the file of the Assessing Officer with similar directions. 92. Ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... drew our attention to the observations of the learned CIT in Annexure 30 to the order. The CIT had directed the Assessing Officer to obtain the details of cost of acquisition and to take up the issue in rectification proceedings. The Assessing Officer has not taken up rectification proceedings and the learned Departmental Representative submitted that he had no objection if the issue is restored to the file of the Assessing Officer. Accordingly, we restore this issue to the file of the Assessing Officer. He is directed to follow the directions of the CIT, i.e., resort to rectificatory proceedings by giving an opportunity of being heard to the assessee. 95. Ground No. 4(r) reads as under: "Addition of Rs. 91,125 in assessment year 1996-97 and Rs. 12,500 in assessment year 1997-98 on account of alleged investment in property purchased at Ambegaon is unjust and improper and without any evidence. The addition so made be deleted. Just and proper relief be granted to the appellant in this respect." 96. The issue covered in this ground has been referred to by the learned Assessing Officer in para 11 of his assessment order. It has been stated by the Assessing Officer that the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said property was entered into on 17th May, 1993. The price in this transaction was determined at Rs. 5,00,000 per 1,000 sq. mts. and token amount of Rs. 2 lakhs was paid by cheque on 17th Jan., 1993, at the time of purchase agreement and Rs. 25,000 each was paid on 6th July, 1994 and 20th Sept., 1994. Balance payment of Rs. 11,50,000 was paid in February, 1995. The source of investment has been fully accepted by the Assessing Officer and no addition was made by him. 99. As regards the second agreement, it was in respect of property at S.No. 34 and the agreement was for Rs. 6,21,000. The property was purchased from Chhajed Jain Lunawat and others. There was no Sathe-khat as far as this property was concerned. According to the learned counsel, whereas the first property was agreed to be purchased on 17th Jan., 1993, second property was purchased only in February, 1995. Though actual sale deeds of both the properties were on the same date, the agreement for the first property was two years earlier. The main reason why smaller price was paid for this transaction was that this plot had no access at all from the main road. Shri Sathe in this behalf referred to the map enclosed with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground accordingly succeeds. 102. Vide letter dated 13th Aug., 2001, the assessee has moved the following revised ground No. 4(b): "The learned Assessing Officer erred in holding that share of profit from M/s. Bafna Transport India, M/s. Bafna Automobiles (Auto Sales Div.), Bafna Motor Transport Co. (Poona), Bafna Auto Carriers, Bafna Translines for assessment years 1987-88 to 1992-93 which was duly available on the file of the respective firms who had filed their regular returns in due course, before the search, constituted undisclosed income of the assessee for the above years and was to be included in the total undisclosed income of the block period. It may, therefore, be held that inclusion of the share income of the above firms as detailed in para 4 of the assessment order may kindly be deleted." We have dealt with this issue in paras 35 to 37 of our order supra. Accordingly, no further comment is called for. 103. In the result, the appeal is allowed in part. U.B.S. Bedi, J.M. - I have had an occasion to go through the proposed order of the learned AM when the same was received by me for consideration. 105. So far as ground No. 1 is concerned, the finding and the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion and could be cured in appeal proceedings by remanding the case back on the file of the Assessing Officer with a direction to redo the assessment after following due procedure. So far as assessee's contention about treating these proceedings to be null and void is concerned, it cannot be accepted in view of Supreme Court decision in the case of CIT v. Jai Prakash Singh [1996] 219 ITR 737 wherein it was held as under: "An omission to serve or any defect in the service of notices provided by procedural provisions does not efface or erase the liability to pay tax where such liability is created by distinct substantive provisions (charging section). Any such omission or defect may render the order irregular-depending upon the nature of the provision not complied with but certainly not void or illegal.... Held, allowing the appeal, that the Tribunal was correct in holding that non-service of notice under section 143(2) of the Income-tax Act, 1961, to nine out of the ten legal representatives of the deceased S did not invalidate the assessment orders of the ITO relating to the assessment years 1965-66, 1966-67 and 1967-68 and that it was at best an irregularity for which the AAC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, the AM is right in allowing the appeal in part or the JM is right in setting aside the order of the Assessing Officer and restoring all the issues to the file of the Assessing Officer for fresh consideration?" 2. I have heard the rival submissions in the light of material placed before me and precedents relied upon. 3. Notice under section 158BC of the Income-tax Act, 1961 (hereinafter called 'the Act'), was issued and served on the assessee on 7th April, 1997, calling for the return for the block period. The assessee did not file return for the block period within the time allowed in the said notice. Assessee did file return for the block period on 23rd Sept., 1997, declaring therein undisclosed income of Rs. 36,21,770. As the return was filed beyond time, it was treated as non est return by the Assessing Officer. Assessing Officer acknowledged receipt of return in the order. It was received when Assessing Officer almost finalized the assessment. Details were submitted to the CIT for his approval on 26th Sept., 1997. CIT accorded the approval on 29th Sept., 1997. 4. Both the learned Members agreed on the point that belated return filed by the assessee was a valid retu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resentative invited my attention on various paras of learned AM's order. It was demonstrated with reference to the observation made in those paras that learned AM was aware that relevant details were not made available to the Assessing Officer. He proceeded to decide the issues one way or the other. Some points were adjudicated, some were restored. My attention was adverted to para 47. Relevant portion of learned A.M.'s order is reproduced as under: "We accordingly direct the Assessing Officer to verify details of the credits as have been filed before the CIT on pp. 237 to 383 and readjudicate upon the issue after giving an opportunity of being heard to the assessee." Further, at para 49 it is said: "Since the assessee could not immediately file these details, all such credits in the bank account were considered by the Assessing Officer as undisclosed income of the respective assessment years in the block." Thereafter, in para 50 he notes the submissions that the details were, however, before the CIT. Then he concluded in para 52 that since full details are now available these deserve to be verified by the Assessing Officer. 9. The aforesaid example just indicates the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an order is struck down as invalid being in violation of the principles of natural justice, there is no final decision on the cause and fresh proceedings are left open. Tribunal assailed the order of assessment by virtue of its inherent defect. Flaw in the order appealed against was non-observance of certain procedure. It is, therefore, appropriate to direct Assessing Officer to start the procedure once again with a view to follow the rules of procedure and the principles of natural justice. Learned JM found that order was crept with a curable infirmity. As such the order of Assessing Officer was set aside and all the issues were restored to the file of Assessing Officer for fresh adjudication. In my opinion, this is a correct view. I am inclined to agree with the decision given by learned JM. 14. The matter will now go before the regular Bench for deciding the appeal in accordance with the opinion of the majority. U.B.S. Bedi, J.M. -As there was a difference of opinion between the AM and the JM, following question was referred to a Third Member: "Whether, on the facts and in the circumstances of the case, the AM is right in allowing the appeal in part or the JM is right in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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