TMI Blog2019 (7) TMI 1310X X X X Extracts X X X X X X X X Extracts X X X X ..... t the revenue has assessed business income from transport business by applying a net profit @ 8%. Therefore, it cannot be presumed that assessee was not having opening cash balance. Considering the totality of the facts, we delete this addition. Assessment of business income from transport business by applying a net profit @ 8% - HELD THAT:- We find that the A.O. has estimated the profit without comparing with similarly situated persons. We find that the Tribunal in one of the cases has taken a view of net receipt @ 5.5%. We therefore taking a consistent view direct the A.O. to adopt the net profit @ 5.5% and re-compute the addition accordingly. 37. Ground No.3 is general in nature and needs no separate adjudication. Unsecured temporary loans - proof of returning the same was filed - HELD THAT:- As perused the materials available on record and gone through the orders of the authorities below. The assessing officer has not given any finding whether these amounts were repaid during the year under consideration despite the matter was restored to the A.O. The assessee has placed on record proof of returning of amount through banking channel which is not rebutted by the revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th him and that he did not earn agricultural income of ₹ 4,42,900/- from such land. 3. On the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in upholding the addition of ₹ 4,42,900/- towards income from other sources as made by the assessing officer. 4. The appellant craves leave to add, to alter and/or to modify the grounds of appeal on or before the date of hearing. 3. During the course of hearing, the assessee has also filed an additional ground that reads as under: On the facts and in the circumstances of the case and in law, Learned Assessing Officer erred in making the addition and passing the impugned assessment order under section 153A rws 143(3) without reference to any incriminating material found and seized during the course of conduct of search. 4. This is second round of litigation. In the earlier round of litigation, matter travelled up to the stage of this Tribunal and the Tribunal in IT(SS)A Nos.310 to 316/Ind/2012 pertaining to the assessment years 2001-02 to 2007-08 set aside the assessment to file of the A.O. to frame assessment as per the direction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and agriculture income ₹ 15,74,930 on 20.06.2008 Assessment Order : u/s 143(3) rws153A and 254 dated 26.03.2014 A.Y. 2001-02 ₹ 6,14,400 (addition of ₹ 4,46,308 as disallowance of agriculture income and rental income) A.Y. 2002-03 ₹ 6,87,706 (addition of ₹ 5,15,701 as disallowance of agriculture income and rental income) A.Y. 2003-04 ₹ 8,36,980 (addition of ₹ 5,85,071 as disallowance of agriculture income and rental income) A.Y. 2004-05 ₹ 9,16,120 (addition of ₹ 7,10,096 as disallowance of agriculture income and rental income) A.Y. 2005-06 ₹ 57,22,050 (addition of ₹ 7,54,536 as disallowance of agriculture income and rental income) A.Y. 2006-07 ₹ 14,94,220 (addition of ₹ 10,46,878 as disallowance of agriculture income and rental income) A.Y. 2007-08 ₹ 28,72,280 (addition of ₹ 27,25,930 as disallowance of agriculture income, rental income and addition of entries in BS-1) CIT(A) Order :dated 29.01.2016 addition sustained for all the years on account of agriculture income from lease hold land A.Y. 2001-02 ₹ 4,04,200 A.Y. 2002-03 &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 143(3)rws 153A. Additions made by the Ld. AO relating to agriculture income on lease hold lands is without reference to any incriminating material found during the course of search conducted in the case of the assessee. 3. Search was conducted in the case of Mohd. Shafique, Mohd. Atique and survey in the case of M/s. Ekta Transport Co.Appeals of Mohd. Shafique and Mohd. Atique are in appeal before your Honors. 4. Additional grounds of appeal go to the root of the matterand hence are vital to the disposal of said appeals. Reference to incriminating material is of utmost importance to make addition u/s 153A.Admittance of additional grounds shall help the assessee in getting justice. 5. Reliance is placed on the following decisions for admittance of legal grounds in the instant appeals a. Hon ble Apex Court in the case of National Thermal Power Co. Ltd [1998] 229 ITR 383 [CLPB 01-02] b. Hon ble ITAT Chennai (TM)bench in the case of Hemal Knitting Industries [2010] 127 ITD 160 [CLPB 39-45] c. Hon ble ITAT Mumbai bench in the case ofAnjliPandit[2017] 88 taxmann.com 657 (Mumbai - Trib.) Para 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agriculture income from leasehold land, directions were given to determine total land taken on lease and compute agriculture income after allowing deduction of lease rentals paid. [PB 381 para 10] 8. During the set aside proceedings before Ld. AO, agriculture income on self-owned land was computed @ ₹ 6000 per acre instead of bigha and balance was added. For the addition of agriculture income from lease hold land, the same was sustained for all the years in appeal. 9. In the second round of appeal before Ld. CIT(A), addition made by the Ld. AO on account of self-owned land was deleted by applying the finding given by Hon ble ITAT of ₹ 6,000 per bigha. Addition of agriculture income on land taken on lease was sustained. 10. In A.Y. 2007-08, in addition to the above mentioned income sustained for agriculture income on land taken on lease, addition of ₹ 16,02,200 was sustained relating to one seized document vide BS-1. 11. Aggrieved assessee is in appeal before Your Honors. C. Submission: (A.Y. 2001-02 to 2007-08) 1. Hon ble ITAT Bench of Indore vide order dated 31.01.2013 in appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arch seizure action, no details of agriculture activity were found. 4. In the cash book submitted by the assessee . 5. 5. Even at the time of search, no such document has been found. 6. 6. The lease agreement submitted by the assessee 7. 13. None of the agriculture receipts appearing in cash book are It is evident from above facts already on recordthat Ld. AO has given a factual and categorical finding about non-existence of any incriminating material found during the course of search relating to agriculture income. 3. In the set aside proceedings, both before Ld. AO and Ld. CIT(A) no reference has been made to any incriminating material found during the course of search operations on the basis of which addition has been sustained for the agriculture income on leasehold land. 4. In the statement of assesseerecorded u/s 132 on 21.09.2006, a specific question was raised vide Question No. 8which further emphasizes the fact that no documents relating to the agriculture land taken on lease were found. Relevant extract [PB 34] The above question by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Atique is not a party to this deed and hence the document neither belongs to nor pertains to him. From the above, it is evidently established that there is no incriminating material found and seized during the conduct of search relating to the addition in respect of agricultural income from leasehold land. 7. Without prejudice to the above submission,it is submitted thatHon ble Indore Bench of ITAT noted the fact thatassessee is owning agricultural land and also some land was taken on leaseandgave a very specific direction at para 10 [internal page 13 PB 381] to Ld. AO to compute the lease hold land held by assessee. It was also directed to compute the agriculture earnings from the leasehold land after allowing deduction of lease rentals paid. Assessee submitted the details of the lease hold land held by assessee during the first round of proceedings before Ld. AO.[PB 311 and 312]. Assessee prays that direction may accordingly be given to the Ld. AO and relief may please be granted. Considering the above facts, circumstances of the case, submissions made, documents on record and judicial precedence, appeal of the assessee may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid by the assessee thereon, the Assessing Officer is to compute the agricultural income out of such lease hold lands. We direct accordingly. This inclusion is applicable to all the assessment years, under consideration. 8. The A.O. in pursuance of the aforesaid direction verified the contention of assessee however, he rejected the claim of the assessee in respect of the land taken on lease on the following grounds: As far as additional evidences regarding lease hold land are concerned, the assessee has filed the copies of Khasra and lease agreement in some cases. The submission of the assessee was duly considered, copies of Khasras and lease agreements were perused but the contention of the assessee regarding agriculture income from lease hold land is not found acceptable because of the following reasons:- The copies of khasra produced by the assessee as additional evidences proves that land is owned by the persons whose name are written in the khasra. Under column 4 of form P-II khasra, where the name of the lease holder is usually written, the name of the assessee is not appearing meaning thereby the land has not been given on lease ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aimed lease hold land. Undisputedly, the assessee did not even furnish any proof of agricultural activities was being carried out at the said lease hold land. The assessee could not support the earning of agricultural income on the lease hold land by furnishing credible evidence. When the assessee has claimed to have been carrying out agricultural activity at such a large scale, the normal corollary would be that assessee might have incurred huge expenses in the form of purchase of seed, tilling/cultivation of land, electricity bills and transportation of the agricultural produce and above all proof of sale of agricultural produce. In our considered view, the evidences so furnished by the assessee in support of his claim are not sufficient to come to a conclusion that the assessee has been carrying out any agricultural activity at the lease hold land and earning agricultural income there from. Therefore, the finding of fact as arrived at by the authorities below cannot be disturbed. This ground of the assessee s appeal is dismissed. 11. Now coming to the additional ground of the assessee s appeal that reads as under: On the facts and in the circumstanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e are direct decisions which deal with the subject matter of this submission relating to admission of additional ground in the second round of appellate proceedings before the Hon ble Tribunal. These are in addition to and in continuation of the case law paper book already on record. A Case Law Paper Book Volume 2 is furnished with this submission. a) Hon ble Bombay High Court in the case of Inventors Industrial Corpn. Ltd [1992] 194 ITR 548 HEAD NOTE Section 251 of the Income-tax Act, 1961 Commissioner (Appeals) Powers of Assessment year 1958-59 Whether a ground by which jurisdiction to make assessment itself is challenged can be urged before any authority for first time Held, yes Whether, therefore, assessee was entitled to challenge jurisdiction of Income-tax Officer to initiate reassessment proceedings before Appellate Assistant Commissioner in second round of proceedings even though he had not raised it earlier before Income-tax Officer or in earlier appeal before AAC Held, yes [emphasis supplied] b) Hon ble ITAT Bench of Kolkata A in the case of Peerless Gen. Fin. Inv. Co. Ltd. [2008] 21 SOT 440 HEAD NOTE - Section 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s also incorrect that in restoring the case to the file of the ITO by the earlier order, the only point left open was in respect of addition on merits and that the legal or jurisdictional aspect whether the re-assessment proceedings were legally initiated was not kept open. Even the Tribual s view was erroneous that even though this point went to the root of the jurisdiction and was a pure question of law, merely because the point was initially raised and not pressed when the matter was taken up before the AAC, it could be waived and it could not be reagitated. [emphasis supplied] e) Hon ble Apex Court in the case of S. Nelliappan [1967] 66 ITR 722 HEAD NOTE Section 254 of the Income-tax Act, 1961 [Corresponding to section 33(4) of the Income-tax Act, 1922] - Appellate Tribunal - Power of - Whether in hearing an appeal Tribunal may give leave to assessee to urge grounds not set forth in memorandum of appeal, and in deciding appeal Tribunal is not restricted to grounds set forth in memorandum of appeal or taken by leave of Tribunal - Held, yes [emphasis supplied] f) The legal and jurisdictional issue raised in the instant additional grounds by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble to the facts and circumstances of the present case. Hence, the additional ground raised by the assessee is rejected. Appeal of the assessee is dismissed. 15. Now we take up IT(SS)A No.31/Ind/2016 pertaining to the assessment year 2001-02. The assessee has raised following grounds of appeal: 1. On the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in upholding the order of the assessing officer, wherein he had failed to follow the directions contained in the combined order dated 31.1.2013 in appeal No.310 to 316/Ind/2012 of ITAT. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in upholding the finding of the assessing officer that the appellant was not having any lease hold land with him and that he did not earn agricultural income of ₹ 4,04,200/- from such land. 3. On the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in upholding the addition of ₹ 4,04,200/- towards income from other sources as made by the assessing officer. 4. The appellant craves leave to add, to alter and/or to modify the ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he facts and in the circumstances of the case, the Ld. CIT(A) was not justified in upholding the addition of ₹ 5,50,400/- towards income from other sources as made by the assessing officer. 4. The appellant craves leave to add, to alter and/or to modify the grounds of appeal on or before the date of hearing. 20. Since similar grounds were raised by the assessee in the appeal IT(SS)A No.30/Ind/2016 except difference in figures, this appeal of the assessee is also dismissed based on the findings given in para 14 above in IT(SS)A No.30/Ind/2016. 21. Now we take up IT(SS)A No.34/Ind/2016 pertaining to the assessment year 2005-06. The assessee has raised following grounds of appeal: 1. On the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in upholding the order of the assessing officer, wherein he had failed to follow the directions contained in the combined order dated 31.1.2013 in appeal No.310 to 316/Ind/2012 of ITAT. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in upholding the finding of the assessing officer that the appellant was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow the directions contained in the combined order dated 31.1.2013 in appeal No.310 to 316/Ind/2012 of ITAT. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in upholding the finding of the assessing officer that the appellant was not having any lease hold land with him and that he did not earn agricultural income of ₹ 7,86,930/- from such land. 3. On the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in upholding the addition of ₹ 7,86,930/- towards income from other sources as made by the assessing officer. 4. The appellant craves leave to add, to alter and/or to modify the grounds of appeal on or before the date of hearing. 26. Since similar grounds were raised by the assessee in the appeal IT(SS)A No.30/Ind/2016 except difference in figures, this appeal of the assessee is also dismissed based on the findings given in para 14 above in IT(SS)A No.30/Ind/2016. 27. Now we take up the appeal filed by Md. Shakeel in IT(SS)A No.37 to 42/Ind/2016 against different orders of the Ld. CIT(A) dated 28.1.2016 29.2.2016 respectively pertainin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iculture income ₹ 82,000 on 25.09.2008 A.Y. 2007-08 at ₹ 1,86,185 and agriculture income ₹ 87,000 on 25.09.2008 Assessment Order : u/s 143(3) rws153C and 254 dated 25.03.2014 Particulars 2001-02 2002-03 2003-04 2004-05 2006-07 2007-08 Assessed Income 13,29,320 2,77,390 3,54,735 2,77,390 10,72,560 6,10,185 Total Addition made 11,73,320 1,20,190 1,53,135 8,05,833 4,24,000 Details of additions made Opening cash balance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The matter was set aside by the Hon ble Bench owing to additional evidences filed by the assessee which were not considered by the authorities below. While setting aside the matter to the file of Ld. AO, Hon ble ITAT noted the following facts in its order at internal Page 5[PB 126] On the issue as to why these documents could not be filed before the learned Assessing Officer, it was explained by the learned counsel that the search took place on 21.09.2006 and notice u/s 153C was issued on 16.09.2008 approximately after two years of the search. The return was claimed to be filed on 16.09.2008. It was also pointed that the questionnaire was issued on 11.10.2008, therefore, the assessment was to be completed by 31.12.2008. [emphasis supplied] 8. Search was conducted in the case of Mohd. Shafique, Mohd. Atique and survey in the case of M/s. Ekta Transport Co. Cases of Mohd. Shafique and Mohd. Atique are in appeal before your Honors along with the instant case. 9. In the instant case, the matter relates to fundamental issue of jurisdiction as the impugned assessments for the assessee were completed u/s 153C rws 143(3). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but to some 'other person'; in the second stage, that is, after such satisfaction is arrived by the AO of person searched, then he is required to transfer or hand over the assets or documents to the AO having jurisdiction over the 'other person'; and lastly, the AO of 'other person' shall commence the proceedings under section 153C and consequently pass assessment /reassessment order in the manner provide u/s 153A. If such a procedure is not followed then needless to say that jurisdiction to proceed u/s 153C cannot be acquired by the AO of 'other person', i.e., other than the person searched. 12. Reliance is placed on following judicial precedence of the Jurisdictional High Court of Madhya Pradesh in the case of Mechmen [2015] 60 taxmann.com 484 Para 15 13. These additional grounds go to the root of matter and are vital to the disposal of said appeals. Their admittance shall help the assessee in getting justice. Reliance is placed on the following decisions for admittance of legal grounds in the instant appeals d. Hon ble Apex Court in the case of National Thermal Power Co. Ltd [1998] 229 ITR 383 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d u/s 44AE are not related to the assessee. These documents are of Bombay Transport Company (Prop. NavedBhai). Thus, no referencehasbeen made by Ld. AO to any incriminating material found during the search of Mohd. Atique and Mohd. Shafique, which belongs to the assessee on the basis of which additionismade been made in all the impugned years. In the set aside proceedings, Ld. AO sustained the additions made by the then Ld. AO for all the years under consideration. 17. Further, for A.Y. 2004-05 and A.Y. 2006-07: Bombay Transport Company (Prop. NavedBhai) had entered into transport contract with M.P. State Civil Supplies Corporation Limited, receipts of which amount to ₹ 74,50,000 and ₹ 90,47,916 respectively. Ld. AO applying the provisions of section 292C made an addition of @ 8% on total contract receipts which amounts to ₹ 5,96,000 and ₹ 7,23,833 respectively. This transport contract is in the name of Bombay Transport Company (Prop. NavedBhai).M.P. State Civil Supplies Corporation Limited confirmed that it has made payments to Bombay Transport Company. [PB 99,107] 18. Ld. AO took the deposits in the bank accounts of Mohd. Shafiq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hed persons before issue of notice u/s 153C. Reminder applications were again filed on 02.08.2018 and 25.08.2018. It was only after such a continuous and rigours follow up that certified copy of satisfaction note recorded by AO in the case of assessee i.e. Mohd. Shakeel was provided through letter dated 18.12.2018. Application under RTI was filed on 17.09.2018 which is also pending for disposal in this respect. [PB 55 annexure to this submission] 2. On perusal of the certified copy of satisfaction note following is evident a. Heading Mohd. Shakeel b. Start of the satisfaction note ....documents seized or requisitioned belongs or belong to the assessee i.e. Mohd. Shakeel c. Towards the end of satisfaction note Therefore the proceedings u/s 153C against the assessee is initiated and his income is assessed or re-assessed in according to the provisions of section 153A. 3. All the above noted points as evident from the certified copy of satisfaction note recorded by AO in the case of assessee i.e. MohdShakeel conclude that the satisfaction note provided is from the file of assessee and not f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... own opening cash balance of ₹ 5,00,000/- during the assessment proceedings in the order sheet entry dated 14.10.2008 assessee was asked to support above opening cash balance with supporting evidence .. b. For A.Y. 2001-02 to 2004-05, Ld. AO has stated as under for the addition made by estimating income @ 8% vide order dated 31.12.2008 [PB 73, 79, 91, 97] In the order sheet entry dated 05.12.2008 assessee was asked to furnish following detail: During the year under consideration following amount has been received in the bank a/c. ofMohd. Shafique and Co. Deposits Total Deposits in Bank of India Safia College State Bank of India TT Nagar A.Y. 2001-02 - 8 7,54,054 A.Y. 2002-03 6,000 18,33,879 A.Y. 2003-04 2,36,000 24,65,691 A.Y. 2004-05 3,16,010 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Atique and Mohd.Shafique, which belongedto the assessee. In search assessments, any undisclosed income, which can ultimately be added, is only to the extent of any undisclosed income earned, represented by any incriminating documents/material found during the course of search proceedings. 8. Ld. CIT(A) in first round of proceedings vide order dated 21.03.2012 has also made no reference to any incriminating material found during the search and seizure operations carried out in the case of Mohd. Atique and Mohd. Shafique. [Para 6.3, 7.1 and 7.2 PB 119, Para 8.1 - PB 120, Para 10.2 PB 123] 9. In the set aside proceedings also, Ld. AO has not made any reference to incriminating material found during the course of search operations in the case of Mohd. Atique and Mohd. Shafique which is belonged tothe assessee. a. Assessment Order dated 25.03.2014 page 2 para 5 ..notice u/s 142(1) of Income Tax Act, 1961 dated 13.03.2014 was also served upon the assessee by the notice server and following queries were raised :- The respective queries are as under:- 2. Please furnish the sources of opening ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment 8 2008-09 N.A. NA No assessment 7 2007-08 Unabated Yes 3,37,000 6 2006-07 Unabated Yes 7,23,833 5 2005-06 Unabated No - 4 2004-05 Unabated Yes 6,73,337 3 200 3-04 Unabated Yes 1,32,135 2 2002-03 Out of purview of assessments as per proviso to section 153C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd of ₹ 5 lacs as on 1. 4.2001. Accordingly, the Assessing Officer is directed to delete the addition of ₹ 5 lacs as opening cash balance. [emphasis supplied] [PB 39] Finding given by the Hon ble Bench in the case of father of the assessee in his search assessment finds a direct application in the case of the assessee himself also. In the instant case, assessee is earning income from business of transportation since the year 1991. Apart from this assessee is also earning income from agricultural activity. To substantiate his claim statement of affairs as on 31st March 2000 and 31st March 2001 were submitted before Ld. AO during the first round of proceedings. Accordingly, addition made towards opening cash balance ought to be deleted. 16. For the additions made on the basis that no books are maintained and bills and vouchers of expenses were not produced, the income was estimated by Ld. AO @ 8% on the deposits in bank accounts of Mohd. Shafique and Co which in fact is the proprietary concern of his father in whose assessment the same have been considered for making additions on similar footing. Ld. AO grossly erred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Assessment Order dated 31.12.2008 [PB 112] In the relevant assessment year assessee has shown Advances from following persons: S.No. Name of Person Amount Received Squared Up During the year 01 Memboob Khan 1,00,000/- Yes 02 Rashid Vahid 1,00,000/- Yes 03 S.Mahmood Ali 1,20,000/- Yes In the order sheet entry dated 10.12.2008 assessee was asked to furnish bank statement Bank statement was submitted before Ld. AO during the first round of proceedings. Referring to this statement, it is evident that amount received from the above mentioned three persons was returned through banking channel. Details of which are as under - [PB 46, 50, 51, 52] Sr.No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with relevant judicial decisions is already on record. This further submission may please be considered in continuation to the earlier submission already on record which specifically deals with admission of additional ground challenging the legal and jurisdictional issue for the first time in the second round of appellate proceedings before the Tribunal. 3. Assessee vide application dated 04.09.2018 filed on 07.09.2018 raised additional grounds of appeal. These additional grounds of appeal go the root of the matter and are vital to the disposal of the said appeals. Their admittance shall help appellant in getting justice. 4. Rule 11 of the Income Tax (Appellate Tribunal) Rules, 1963 reads The appellant shall not, except by leave of the Tribunal, urge or be heard in support of any ground not set forth in the memorandum of appeal, but the Tribunal, in deciding the appeal, shall not be confined to the grounds set forth in the memorandum of appeal or taken by leave of the Tribunal under this rule : Provided that the Tribunal shall not rest its decision on any other ground unless the party who may be affected thereby has had a sufficient oppo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal by way of additional ground while appeal was pending before Tribunal - Tribunal refused to permit assessee to raise such additional ground - Whether phrase 'pass such order thereon' occurring in section 254(1) confers widest possible jurisdiction on Tribunal including jurisdiction to permit any additional ground of appeal if in its discretion and for good reasons it thinks it necessary and permissible to do so - Held, yes - Whether Tribunal had jurisdiction to permit additional grounds to be raised before it even though these might not have arisen from AAC's order, so long as these grounds were in respect of subject-matter of entire tax proceedings - Held, yes [emphasis supplied] j) Hon ble Gujarat High Court in the case of P.V. Doshi [1978] 113 ITR 22 HELD ...............as the Tribunal had failed to notice this material distinction between a mere procedural provision which could be waived and such jurisdictional provision or a mandatory provision enacted in public interest which could not be waived, because by consent no jurisdiction could be conferred on the authority unless the conditions precedent were first fulfilled. The Tribunal's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be deleted. The above issue of admittance of additional legal ground raised for the first time before Hon ble Tribunal in second round of appellate proceedings is also raised in the case of searched persons namely, Mohd. Atique and Mohd. Shafique. The ratio of submission made in the case of searched persons applies with equal force in the instant case also, without prejudice to the other legal grounds of appeal. Submitted Authorised Representative 30. Ld. D.R. opposed these submissions and supported the order of the authorities below. 31. We have heard the rival contentions, perused the materials available on record and gone through the orders of the authorities below. In this appeal also, the assessee has filed an additional ground. The parties have adopted same argument as were in ITA No.30/Ind/2016. For the same reasoning additional ground by the assessee are dismissed. Ground No.1 of the assessee s appeal is against confirming the addition of ₹ 5 lakhs by not allowing the claim of opening cash balance as on 1.4.2000. Ld. Counsel for the assessee vehemently argued that the authorities below were not j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the profit without comparing with similarly situated persons. We find that the Tribunal in one of the cases has taken a view of net receipt @ 5.5%. We therefore taking a consistent view direct the A.O. to adopt the net profit @ 5.5% and re-compute the addition accordingly. 37. Ground No.3 is general in nature and needs no separate adjudication. 38. Now we take up IT(SS)A No.38/Ind/2016 pertaining to the assessment year 2002-03. The assessee has raised following grounds of appeal: 1. On the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in upholding the order of the assessing officer, where he had estimated the net profit at 8% on the gross receipts of ₹ 18,39,879/- and in confirming the addition of ₹ 99,190/- as made by the assessing officer. 2. The appellant craves leave to add, to alter and/or to modify the grounds of appeal on or before the date of hearing. 39. Since similar ground was raised by the assessee in the appeal in ground No.2 of IT(SS)A No.37/Ind/2016, except difference in figures, this appeal of the assessee is also partly allowed based on the findings given in paras ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... add, to alter and/or to modify the grounds of appeal on or before the date of hearing. 43. Ground No.1 of the assessee s appeal is against confirming addition of ₹ 77,337/- which was made by applying the net profit on the gross receipts @ 8%. These grounds are similar to the ground raised by the assessee in the appeal in ground No.2 of IT(SS)A No.37/Ind/2016, except difference in figures, these grounds of the assessee are also partly allowed based on the in IT(SS)A No.37/Ind/2016. The A.O. is directed to re-compute the net profit. 44. Ground Nos.2, 3 4 are in respect of the claim of the assessee that the income related to Bombay Transport Company is attributed to the assessee. Ld. Counsel for the assessee reiterated the submissions as made in the written synopsis. It is contended that the business income related to Bombay Transport Company is added in the income of the assessee. 45. Ld. D.R. opposed these submissions and submitted that this income relates to the assessee. Therefore, the addition has rightly been made in the hands of the assessee. 46. We have heard the rival submissions, perused the materials available ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 49. Now we take up IT(SS)A No.41/Ind/2016 pertaining to the assessment year 2006-07. The assessee has raised following grounds of appeal: 1. On the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in upholding the order of the assessing officer, wherein he had given a finding that the appellant was the owner of the concern M/s. Bombay Transport Company, which in fact belong to Shri Naved Bhai. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in upholding the order of the assessing officer, wherein he included the income of M/s. Bombay Transport Company in the hands of the appellant. 3. On the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in confirming the income of M/s. Bombay Transport company at ₹ 7,23,873/- which resulted by the application of N.P. rate of 8% on the Transportation receipts of ₹ 90,47,916/-. 4. The appellant craves leave to add, to alter and/or to modify the grounds of appeal on or before the date of hearing. 50. Ground Nos.1,2 3 are in respect of the claim of the assessee that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is appeal is allowed. Appeal of the assessee in the assessment year 2007-08 is allowed. 56. Now we take up IT(SS)A Nos.124 125/Ind/2016 in the case of Md. Shafique. These two appeals by the assessee are against order of CIT(A)-2, Bhopal dated 4.3.2016 pertaining to the assessment years 2005-06 2007-08. First we take up IT(SS)A No.124/Ind/2016 pertaining to the A.Y. 2005-06. The assessee has raised following grounds of appeal: 1. On the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in upholding that the credit of ₹ 2,00,000/- in the name of Anees Ahmed was not explainable and in confirming the addition of ₹ 2,00,000/- towards the same in the hands of the appellant. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in upholding that the provisions of sec.44 AE did not apply to the appellant as the appellant was carrying the transport business in the name of Mohd. Shafique Co. 3. On the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in upholding that in estimating the Net Profit at 8% of the gross receipts of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g material found and seized during the course of conduct of search. 60. Ld. Counsel for the assessee reiterated the submissions as made in the written submissions which reads as under: Fixed for hearing on 14.02.2019 Before the Hon ble Income Tax Appellate Tribunal, Indore Bench, Indore IT(SS)A No.: 124/Ind/2016 and125/Ind/2016 by the Assessee ________________________________________________________ ____________ In the matter of :Mohd. Shafique, Bhopal PAN :ANIPS2739K Assessment Year :2005-06 and 2007-08 Status : Individual ___________________________________________________________________ __ May it please Your Honors, In the course of hearing held on 06.02.2019, Hon ble Bench was kind in giving an opportunity to the Ld. CIT(DR) to make her submission on the case laws relating to the additional grounds filed by the assessee. 7. A written submission on the additional grounds along with relevant judicial decisions is already on record. This further submission may please be consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E - Section 253 of the Income-tax Act, 1961 - Appellate Tribunal - Appeals to - Assessment year 1994-95 - Whether jurisdictional provision, which is mandatory, can be taken up in second round of litigation and an assessee can raise issue relating to validity of order in second round of litigation even if same was not raised in first round - Held, yes [emphasis supplied] o) Hon ble Bombay High Court (Full Bench) in the case of Ahmedabad Electricity Co. Ltd. [1993] 6 Taxman 27 HEAD NOTE Section 254 of the Income-tax Act, 1961 - Appellate Tribunal - Powers of - Assessment years 1962-63 to 1971-72 - During assessment assessee did not claim deduction of amounts transferred to 'reserve' as per Electric Supply Act, 1948, either before ITO or AAC - Later, on basis of a High Court decision holding such amounts as deductible on revenue account assessee claimed deduction of same before Tribunal by way of additional ground while appeal was pending before Tribunal - Tribunal refused to permit assessee to raise such additional ground - Whether phrase 'pass such order thereon' occurring in section 254(1) confers widest possible jurisdiction on Tribunal includ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grounds by the appellant was dealt by the Hon ble Delhi High Court in the case of Kabul Chawla [2016] 380 ITR 573 - Para 2 The issue that the Court proposes to address in these appeals is the same that was considered by the ITAT viz., Whether the additions made to the income of the Respondent Assessee for the said AYs under Section 2(22)e of the Income Tax Act, 1961 ( Act ) were not sustainable because no incriminating material concerning such additions were found during the course of search and further no assessments for such years were pending on the date of search? [emphasis supplied] 11. The above judicial precedents adequately fortify the case of the appellant. Addition made in absence of incriminating material relating to such addition found and seized during the course of search, ought to be deleted. Submitted Authorised Representative Fixed for hearing on 06.02.2019 Before the Hon ble Income Tax Appellate Tribunal, Indore Bench, Indore IT(SS)A No.: 124/Ind/2016by the Assessee ________________________________________________________ _________ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the year under consideration assessee society has received loan of ₹ 2,00,000/- from Anees Ahmed. In the order sheet entry dated 10.10.2008 assessee was asked to submit copy of Bank Statement and Return of Income of Anees Ahmed. 9. Para 9.4ofCIT(A) order dated 04.03.2016 As the appellant has not furnished any explanation or documentary evidence regarding the credit worthiness of ShriAnees Ahmed or the genuineness of transaction even during the appellate proceedings, the addition made by the A.O. is upheld. 10. Assessee submits that he is not required to maintain books of account and has not maintained the books of account. To invoke provisions of section 68 maintenance of books of accounts is a mandatory condition. In the instant case,sinceno books of accounts are maintained as assessee is not required to maintain them, no addition is warranted u/s 68 of the Act. However, assessee has submitted confirmation letter ofAnees Ahmed as additional evidence which was not accepted and Ld. CIT(A)who proceeded to sustain the addition made by Ld. AO. [PB 9A] 11. Assessee prays that the addition made may plea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ready been considered by the Hon ble Co-ordinate Bench vide order dated 31.01.2013 at PB 377 internal page 6 para 6. Page 274 to 278 is the partnership deed for the business run under the name and style of M/s. S T Developers. Assessee i.e. Mohd.Shafique is not a party to this deed Both the above referred documents neither belongs to nor pertains to assessee i.e. Mohd. Shafique. Considering the above facts, circumstances of the case, submissions made, documents on record and judicial precedence, appeal of the assessee may please be allowed by deleting the additionsmade by the Ld. AO and sustained by the Ld. CIT(A). Submitted. Authorised Representative 61. Ld. D.R. opposed these submissions and supported the orders of the authorities below. Identical ground was raised in Ground No.1 of additional grounds in IT(SS)A No.37/Ind/2016. For the same reasoning, additional ground raised in this appeal is dismissed. 62. Now coming to ground No.1 of the assessee s appeal, it is against sustaining addition of ₹ 2 lakhs. Ld. Counsel for the assessee reiterated the submissions as made in the w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of Mohd. Atique and Mohd. Shafique. Vide letter dated 1.2.2019, Ld. CIT(DR) provided the copies of page 262 and 263 274 to 278. It is pertinent to mention here that page 262 and 263 274 to 278 are not related to assessee i.e. Mohd. Shafique. Page 262 and 263 is the affidavit of Mohd. Atique to obtain license for use of Revolver and has already been considered by the Hon'ble Coordinate Bench vide order dated 31.1.2013 at PAPER BOOK 377 internal page 6 para 6. Page 274 to 278 is the partnership deed for the business run under the name and style of M/s. ST Developers. Assessee i.e. Mohd. Shafique is not a party to this deed. Both the above referred documents neither belongs to nor pertains to assessee i.e. Mohd. Shafique. Considering the above facts, circumstances of the case, submissions made and documents on record, appeal of the assessee may please be allowed by deleting the addition made by the Ld. A.O. and sustained by the Ld. CIT(A). Submitted Authorised representative. 68. Ld. D.R. opposed these submissions. 69. We have heard the riva ..... X X X X Extracts X X X X X X X X Extracts X X X X
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