TMI Blog1996 (12) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... ) the assessee filed a return under the Amnesty Scheme on 30th March, 1987 declaring additional income of Rs. 87000 arrived at on the basis of peak credit as reflected on the receipts and payments side in the seized diaries. 2.2. For asst. yr. 1983-84 (ITA No. 2972/Ahd/1990) the assessee declared additional income of Rs. 2 lacs under the Amnesty Scheme. For asst. yr. 1984-85 (ITA No. 3900/Ahd/1990), since the books of accounts had been seized for this year on 1st June, 1984 the assessee could not file his return voluntarily but he filed the return of income in response to notice under s. 148 on 27th Dec., 1985. Proceedings under s. 132(5) were initiated in which investments in fixed deposits NSCs were noted, but these additions were not made in the regular assessments since such investments stood explained. The assessee thereafter filed a revised return of income on 31st March, 1986 and thereafter filed another revised return on 30th March, 1987 under the Amnesty Scheme declaring total income of Rs. 88,800 which included additional income of Rs. 50,000 representing the peak credit as per notings in the seized diaries. 3. The ITO did not accept the returns under the Amnesty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings after almost two years that show-cause notice was issued to the assessee to explain the various entries in the diaries. But the assessee had already declared additional income for three assessment years in the returns filed under the Amnesty Scheme and paid taxes accordingly, and such additional income was calculated on the basis of the only scientific and accepted method i.e. peak credit during the year taking into account the receipts and payments on different dates during the year relating to the various transactions. He, therefore, held that the assessee was entitled to the benefits of Amnesty Scheme. 5.1. For asst. yr. 1985-86, the CIT(A) held that the finding of the ITO relating to his proposal to make the additions of Rs. 64,000 and Rs. 1,000 representing the alleged receipts and payments as reflected in the diaries had to be expunged inasmuch as the peak credit had been added to be assessed in the hands of the assessee in the earlier assessment years and the impugned amounts of this year had already been covered by the overall peak credit reached in the earlier years. 6. Aggrieved by the findings of the CIT(A), the Revenue is in appeal before us. Shri Suni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nter alia, clarifies that even if there is a search in the case of an assessee, he can avail himself of the benefits of the Amnesty Scheme provided the asset or income declared was not the subject-matter of seizure and there had been no positive detection of concealment of income by the ITO. The learned counsel for the assessee submitted that though the diaries were seized, no efforts were made by the ITO to establish any concealment of income on the basis of the diaries seized, and before any detection could be made by the AO, the assessee voluntarily came forward and surrendered income (peak amounts) under the Amnesty Scheme which was on the statute book at the relevant time. Coming to the specific charge of the learned Departmental Representative that at least in asst. yr. 1982-83 prior detection of concealed income was made, the learned counsel submitted that though the statement of the assessee was recorded in February, 1987 under s. 131, the assessee at no place made any admission about the concealment of income and that he only admitted that the diaries found and seized from his residence belonged to him. Notice for the scrutiny of the diaries was issued as late as on 23rd S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee himself in order to buy peace with the Revenue and to save himself from anticipated and protracted litigation. The Revenue might have a prima facie belief that some thing would come up from these diaries and some income could be assessed in the hands of the assessee; but such belief was merely a prima facie one and not positive detection of concealment as envisaged in clarifications issued to question No. 19 in Circular No. 451, dt. 17th Feb., 1986. The case of the assessee thus squarely stands covered by the decision of the Ahmedabad Bench 'B' of ITAT in the case of Prakash Oil Industries Ginning Factory to which one of us (Accountant Member) was a party and where we have followed the ratio laid down by the Hon'ble Calcutta High Court in the case of Anand Kumar Saraf. In the said judgment, the Hon'ble High Court has clearly held that merely seizure of papers cannot mean detection and that when detection has not taken place, if the assessee were to come forward with a disclosure under the Amnesty Scheme, he or she is very-well eligible for all the benefits as envisaged under the Amnesty Scheme. The Hon'ble High Court further observed at p. 574 as under: "The mere stig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue time as prescribed in the Amnesty Scheme. This has been clearly explained by the CBDT in reply to question No. 19 in the said Circular No. 451 dt. 17th Feb., 1986." All the more in the said case the search had been carried out only a few days prior to the date of furnishing of the revised return by the assessee; whereas in the present case the search had been carried out as long back as on 1st June, 1984 i.e., almost two years prior to the filing of the revised returns by the assessee and no action, whatsoever had been taken by the Revenue to go into the facts of the case and unearth concealed income which they thought to have been concealed by the assessee in the seized diaries. Under the circumstances we uphold the findings of the CIT(A) and concur with him that the assessee is entitled to the benefits of the Amnesty Scheme. The grounds raised by the Revenue on this issue are accordingly dismissed. 9. The next common ground raised by the Revenue in appeal relating to asst. yrs. 1982-83, 1983-84 and 1984-85 relates to the action of the CIT(A) in setting aside the additions made by the AO on account of unexplained investments in purchases, etc. 9.1 In asst. yr. 1982-83 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as reflected in the diaries has to be expunged inasmuch as the perk credit has been added to be assessed in the hands of the appellant in the earlier assessment year by the CIT(A) 1, Ahemadabad and the impugned amounts of this year had already been covered by the overall peak credit reached in the earlier years." After hearing both the sides we do not find any infirmity in the above findings of the CIT(A) as the aforesaid two additions of Rs. 64,000 and Rs. 1,000 stand already covered by overall peak credit reached in the earlier years. We accordingly dismiss this ground. 11. Now, we take up the cross-objections filed by the assessee. In C.O. No. 316/Ahd/1992 for asst. yr. 1982-83 the objections No. 1 2 read as under: 1. "In law and in the facts and circumstances of the case of the appellant the learned CIT(A) has grossly erred in not considering the ground that the order passed by the AO under s. 143(3) r/w s. 147 of the Act is bad in law insofar as the same is without jurisdiction as the provisions of s. 147 of the IT Act did not apply as all the primary facts were before the AO who finalised the original assessment under s. 143(1) of the IT Act, it, therefore, deserve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 148 was illegal and void. (2) In law and in the facts and circumstances of the respondent's case, the learned CIT(A) ought to have held that the order passed by the AO is illegal and void having been passed in pursuance of the directions issued by the higher authorities and that order being not his own decision. (3) In law and in the facts and circumstances of the respondent's case the learned CIT(A) ought to have held that the notice issued under s. 148 was procedural and formal in a view of the revised return having been filed disclosing all facts under the Amnesty Scheme. (4) In law and in the facts and circumstances of the respondent's case having acted upon the return filed under the Amnesty Scheme, under the same proceedings, the AO cannot avail of the opportunity of dealing with the aspects which are not covered by the revised return filed under the Amnesty Scheme and being conditional one. After hearing both the parties we do not find any merit in the objections raised because notice issued by the ITO were legal and consequently the order passed by the ITO are valid. The objections are accordingly dismissed. 14. In the result, the Revenue's appeals are di ..... X X X X Extracts X X X X X X X X Extracts X X X X
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