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TMI Blog2002 (12) TMI 217X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome made 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , seek 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 ..... 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 Officer o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 along with the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce 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 income so computed for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the cash found has relevance to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 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 concerns for the purpose of busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 the extent of 5146 gms. is fully expl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7646 gms. This leaves only a balance of 476 gms. The learned counsel submitted that in the details given on p.5, no credit has been taken for purchases during the period from 1982-83 (year under which wealth-tax returns were filed) to 1986-87 (before block started). He submitted that considering the status of the family and their income level, credit for 476 gms. could be easily given. He, therefore, submitted that no addition is warranted on account of jewellery. 30. As regards silver, total quantity of which was 131.39 kgs. (second column on p.4), according to the learned counsel, credit can be given for 58.52 kgs. as has been brought out on p.5 of paper book No. 2. This is on account of 39 kgs. of silver declared in wealth-tax returns of the ladies in the assessment year 1982-83, purchase of silver on 18th March, 1985, of 7.172 kgs. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relief be granted to the appellant in this respect." 34. In the original ground 4(b), it was contended that share profit of the assessee from M/s. Bafna Automobiles, M/s. Bafna Motor Transport Co., M/s Bafna Auto Carriers, M/s. Bafna Translines and M/s. Bafna Transport India for the assessment years 1987-88 to 1992-93 was taken by the Assessing Officer without deducting firms' taxes and consequently adjusted income as adopted by the Assessing Officer under section 158 was erroneous. As per the original ground, share income should have been calculated after adjusting the firms' taxes payable in case of the respective firms, but subsequently, however, this ground was amended so as to claim that entire share profit from the various concerns for the assessment years 1987-88 to 1992-93 could not have been considered as undisclosed income. The amendment of the ground was made in view of the decision of 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est and salary of the firm which was assessable in the hands of the partners as income from business. The logic and reasoning for assessing salary and interest for the assessment year after 1992-93 was the same as in earlier years and the ratio of the Bombay High Court decision that once firms had disclosed share profit, salary and interest of the partners in their own returns such share was disclosed income as far as partner was concerned was applicable even for the earlier years. In view of the above decision of the Bombay High Court, the contentions of the learned Departmental Representative are not tenable. The ground is one of law and goes to the root of the matter and is accordingly admitted on record and in view of the decision of the Bombay High Court, the entire share profit of the various firms both of Pune as well as of Bombay for the assessment years 1987-88 to 1992-93 are deleted as 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, conjecture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment year 1987-88 the Assessing Officer made an addition of Rs. 25,000. The total addition for the entire block is thus Rs. 4,30,858. Shri Sathe submitted that before the CIT, a chart showing withdrawals for household expenses was filed which is to be found on p.19 of paper book No. 1. This chart is however for the assessment years 1989-90 to 1997-98 (broken period). Details for the earlier two years, i.e., assessment years 1987-88 and 1989-89 could not be compiled. In the chart referred to supra, total withdrawals by the family members for the purpose of household expenses excluding withdrawals for the marriages and jewellery purchases have been given. He drew our attention to the total withdrawals shown in the chart and the withdrawals estimated by the Assessing Officer which is reproduced below: -------------------------------------------------- Asst. Withdrawals as Household expenses yr. shown by the estimated (Rs.) assessee (Rs.) ------------ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r: "Addition of Rs. 12,751, Rs. 30,000, Rs. 1,78,650, Rs. 5,41,800, Rs. 4,85,360 and Rs. 1,55,395 for assessment years 1987-88, 1988-89, 1989-90, 1990-91, 1991-92 and 1992-93, respectively, being credits appearing in capital account of the appellant in various firms is unjust and improper. The entire addition so made be deleted. Just and proper relief be granted to the appellant in this respect." 45. In this ground, various additions made by the Assessing Officer in respect of credits appearing in the capital account of the assessee in various firms has been challenged. This ground has to be read with ground No. 4(b) under which it was firstly contended that the details of capital account were already available to the Department in the assessment of the firms before the date of search. The firms were filing their returns regularly before the date of the raid and in any case for the assessment years 1987-88 to 1992-93 for which additions have been made. Shri Sathe submitted that though it is true that details regarding credits in the capital account could not be filed before the Assessing Officer, in the letter addressed to the CIT dated 26th Sept., 1997, during the course of appr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee 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. 50. Shri Sathe submitted that the details were, however, before the CIT in the letter dated 22nd Sept., 1997. These details and summary of the savings bank account are to be found on pp. 387 to 543 of the paper book No. 1. He submitted that from these details it will be seen that most of the amounts appearing in the deposit side of the account are by way of dividend received from companies or refund of share application money or maturity of LIC policy. To the extent the credits represent refund of share application money, they do not represent any income and such credits will have to be excluded from consideration. He further submitted that to the extent these credits represent dividend, interest or capital gain and to the extent these are not reflected in any regular returns filed by the assessee, these have been returned by the assessee as undisclosed income. He drew our attention to the details given in para 4 of the assessment order and submitted that the Assessing Officer has taxed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t order, by giving reference as "since you have filed certificate regarding ownership of the same", the addition was proposed. Reply was also filed before the CIT by letter dated 26th Sept., 1997, relevant portion is on p. 767 of the paper book. The submissions before the CIT were filed in reply to addition which was proposed by the Assessing Officer in the draft assessment order. According to the assessee, the assessee and his family members purchased wooden logs for construction at Suparshwanath bungalow from Shree Mahavir Saw Mills, Parathwada R.S. Pendhari. Payments were made from drawings made from the business from time to time. 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 family members. Further payment of Rs. 4,00,000 was paid 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. According to the learned counsel, the amount paid towards purchase of wooden logs is reflected in the books of account and in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was shown in the name of individuals. Reply dated 15th Sept., 1997, was filed in response to query raised by the Assessing Officer on 9th Sept., 1997, stating source of investment in BIFSPL. The Assessing Officer has made addition by giving reference as "above explanation of the assessee does not clearly explain the source of investment in shares of BIFSPL." 59. Shri Sathe, the learned counsel for the assessee, submitted that the investment made by the individual is recorded in the books of account. The source of investment in BIFSPL is explained below in the statement of facts: "The assessee applied for shares in BIFSPL in the year 1995-96. The amount was paid from his proprietary concern namely, M/s. G.C.B. Goods Transport. All the money was paid by cheque only and was duly recorded in the books of account. Source regarding amount received in G.C.B. Goods Transport: In G.C.B. Goods Transport, the assessee received amount as refund of share application money which was paid in the earlier year. The refund received was in turn paid to BIFSPL. Bafna Auto Engg. (P.) Ltd. refunded share application money to all individuals in the year 1995-96. Total share application money collected ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k period and as far as the assessee was concerned, according to the assessee's information, there were three marriages of the following persons: --------------------------------------------------------- Name of the Date of marriage person married --------------------------------------------------------- 1.Shri Rajendra G. Bafna, son of Shri G.C. Bafna 25-11-1987 2.Shri Sanjay G. Bafna, son of Shri G.C. Bafna 7-12-1989 3.Mrs. Swati Mehta, daughter of Shri G.C. Bafna 26-11 -1992 --------------------------------------------------------- According to the Assessing Officer details like head-wise marriage expenses, jewellery gifted, etc. had not been furnished. He estimated the marriage expenditure on the marriage of the daughter, i.e., ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 &nb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chnama dated 25th Sept., 1996, shows expenditure of Rs. 27,143 on 30th May, 1986, in the name of the assessee. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 13,416 1987-88 3&4 2 2 6,989 1988-89 3&4 2 2 900 1989-90 3&4 2 2 4,00,000 1991-92 3 10 5 2,43,274 1995-96 29-31 1 5 25,845 1995-96 53 &nbs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt 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.C. Bafna or an expenditure for G.C. Bafna. According to the learned counsel, in all fairness the CIT ought to have gone through these submissions or ought to have referred the matter to the Assessing Officer for verification, but he did not do so. In the detailed submissions in the statement of the case, the learned counsel has given details of the contents of the loose papers and explanations and submitted that most of the figures given in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring 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 particular share is made prior to block period. He submitted that all these explanations were ignored by the Assessing Officer and CIT without bringing any material on record. 73. The learned Departmental representative relied upon the order of the Assessing Officer. 74. After hearing both the sides, we are of the opinion that the matter must go back to the Assessing Officer for verification of the charts filed before him and before the learned CIT. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts 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 other investments made from year to year eligible for the relief as per the various provisions of Chapters VI-A and VIII of the Act. The appellant be granted relief under provisions of said Chapters." The assessee claimed interest on accrual basis for the years covered in the block period and claimed deductions under Chapter VIA of the Act (Sections 80C, 80L, etc.). The assessee also paid premium towards LIC and investments eligible under Chapter VII of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat 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., 1985, and 28th Aug., 1985, and, therefore, value of this investment has been taken for the assessment year 1987-88. According to the learned counsel, actually this investment of Rs. 4,90,236 is made prior to the block period and could not have been considered as investment to be taxed in assessment year 1987-88 nor profits therefrom should have been brought to tax. The learned counsel submitted that the Assessing Officer may be directed to verify these aspects also and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 No. 4(p) reads as under: "Addition of Rs. 5,000, Rs. 12,328, Rs. 12,328, Rs. 4,195, Rs. 14,917, Rs. 3,024, Rs. 42,250, Rs. 67,500 and Rs. 5,000 in assessment years 1987-88 to 1994-95, respectively, is unjust and improper. The additions so made be deleted. The appellant be granted just and proper relief in this respect." During the course of assessment proceedings, the assessee filed details of share transactions made through Kalpataru Holdings/Parag Parakh. On that basis, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 assessee along with other male members of the family purchased three pieces of land at Ambegaon. On perusal of rates, it was found by him that one property had been purchased at the rate of Rs. 50 per sq.ft. on 9th Feb., 1995, while other property has been purchased at the rate of Rs. 23 per sq.ft. on the same date at the same place and again a further property was purchased at the rate of Rs. 40 per sq.ft. on 9th Sept., 1996, i.e., after 19 months of the first purchase. In the absence of ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 the purchase agreement placed at p. 197 of paper book No. 2. It is seen from this map that Hissa No. 7 did not have any access from Mahamarg which was adjacent to Hissa No. 16 which was covered in the first agreement. In fact, Hissa No. 7 which was purchased in the second transaction had a smaller internal access common with other plot-holders on the inside. Because of lack of access to the main road and because the assessee had already succeeded in entering into transaction in respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourse, 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 conclusion of the learned AM is given in para 9 of the proposed order which is reproduced as under: "After hearing both the parties, we hold that this ground is identical to ground No. 1 in the case of G.C. Associates referred to supra. This has been dealt with in paras 5 to 9 of the order dated 18th Aug., 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ural 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 was justified in setting aside the assessments and it was not a case fit for cancellation of the assessments." 108. Therefore, in view of this authoritative pronouncement of the Hon'ble Supreme Court on the point at issue, the assessment made without following procedure as laid down, could only be held to be irregular but not null and void. Therefore, seeking of cancellation of assessment by the assessee is not justified and I reject its plea on this count. 109. In view of the facts, circumstances and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. 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 return. It was incumbent on the Assessing Officer to take cognizance of the return and details filed along with the same. 5. Learned AM appreciated the fact that adequate time was not available at the disposal of the parties, as such information on various points could not be given before the draft assessment was completed. Substantial information was provided to the CIT. CIT could not take note of the submissions and evidence because of the time constraints. As such principle laid down in the dictum audi alteram part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... redits 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 approach of the learned AM in regard to the whole issue. In the case of Smt. Tapati Pal v. CIT [2002] 124 Taxman 123 (Cal.), Hon'ble High Court has held that when any question or issue is raised for first time before Tribunal, which requires enquiry into facts. Tribunal cannot make enquiry of facts in second appeal, but when it has entertained plea which requires enquiry into facts, Tribunal has no option but to remit matter back to Assessing Officer. 10. Hon'ble Gujarat High Court in the case of CIT v. Valimohmed Ahmedbhai [19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 setting aside the order of the Assessing Officer and restoring all the issues to the file of the Assessing Officer for fresh consideration." 2. The learned Vice-President, Shri M.K. Chaturvedi, sitting as Third Member by his opinion dated 11th Dec, 2002, has concurred with the view of the JM to set aside the order of the Assessing Officer and all issues were restored to the file of Assessing Officer for fresh adjudication. In accordance with the majority view, the order of the Assessing Officer is set aside and all the issues are r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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