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2008 (7) TMI 472
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.... as well as at the premises of Shri Dharmaseelan. However, each and every single individual was contacted and statement as well as enquiry report was obtained from available individuals on 3-11-2000; 7-11-2000; 8-11-2000; 17-11-2000 and 21-11-2000. Out of the total number of individuals shown as creditor some were not available at their addresses and those who were available have stated that they have not lent any money to the assessee-company. The sworn statement was recorded from Dharmaseelan on 14-11-2000 wherein he has offered a sum of Rs. 25 lakh out of the total advance and affirmed that the other advances were genuine. 3. Prior to the search, the assessee has purchased properties in Chennai for a sum of Rs. 2,18,63,00,000 through Court auction. The assessee-company wanted to sell one of the properties at Korukpet for a sum of Rs. 1.7 crores and applied for clearance from the proper authorities on 17-8-2000. The appropriate authority gave no objection certificate on 19-9-2000. Since the Assessing Officer was not satisfied about the source for acquiring these two properties, he called for various details. In response, the assessee stated that the properties were purchased o....
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....tted that when the block assessment has been annulled for want of jurisdiction because the addition made by the Assessing Officer is not based on any material found during the search or any investigation in relation to such evidence found during the search. He has further submitted that the CIT ought to have deleted the addition made by the Assessing Officer instead of annulling the assessment on the ground of jurisdiction. He has further submitted that in the appellate proceeding, the Commissioner (Appeals) himself can give a finding which is only necessary for the disposal of the particular case for a particular assessment year and cannot give any direction with respect to an assessment year which is not the subject-matter in the appeal. Therefore, he has contended that the direction given by the Commissioner (Appeals) in the present case are not necessary for the disposal of the appeal before him and the same cannot be considered as given under section 150 of the Income-tax Act since the assessment cannot be reopened as barred by limitation and the authorities cannot adopt an indirect procedure to circumvent the provisions of law specified for the purpose. He has pleaded that af....
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....tence of persons, creditworthiness and genuineness. Since the proceedings and such instructions were given prior to the date of search, it is on record that the information in respect of acquisition in auction and the source of funds were already with the authorities. In these circumstances, the question arises whether the Commissioner (Appeals)'s action in giving the direction to the Assessing Officer to issue notice under section 148 by treating the action under section 150 of the Income-tax Act is justified or not? We find force in the submission of the learned counsel of the assessee that the appellate authority can give findings and directions only in respect of year/period which is before that authority and no direction or finding can be given in respect of other years. In case of Rajinder Nath v. CIT [1979] 120 ITR 14, the Hon'ble Supreme Court has held that finding within meaning of section 153(3)(ii) must be a finding necessary for disposal of a particular case in respect of particular assessee and in relation to particular assessment year. The expression 'direction' as per section 153(3)(ii) must be an express direction necessary for the disposal of the ca....
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.... empowered to give while deciding the case before it. The expressions 'finding' and 'direction' in section 1$3(3)(ii) must be accordingly confined. Section 153(3)(ii) is not a provision enlarging the jurisdiction of the authority or Court." In the case of Rajaram & Bros., the Hon'ble M.P. High Court has held as under: "In our opinion, once the block assessment for the period 1st April, 1988 to 11th August, 1998 was gone into in proceedings under section 158B(c) and appropriate reliefs by way of addition and/or deletion were given to the assessee by the Assessing Officer and by CIT(A) and lastly by Tribunal on facts, there was no need to give this liberty to the Assessing Officer to again initiate proceedings under section 148 in respect of concluded regular assessment for the year 1998-99. It was much more so, when no reasons were assigned whatsoever as to why and under what circumstance and what basis, this liberty is being given by the CIT(A) to the Assessing Officer for initiation of the proceedings under section 148 of the Act and that for the assessment year 1998-99. In order to grant this liberty to Assessing Officer for initiating proceedings ....
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....on at the premises as well as company of the managing director Shri Dharamseelan on 3-112000 a notice under section 158BC on 7-11-2000 to the assessee-company was issued. In response to the notice, the assessee filed return on 12-1-2001 admitting an undisclosed income of Rs. 26 lakh. The Assessing Officer finally passed a block assessment order on 29-11-2002 wherein he has computed the total undisclosed income at Rs. 1,60,00,000. While computing the undisclosed income, the Assessing Officer has rejected the confirmation letters of the individuals as well as the statements recorded before the Assessing Officer during the assessment proceedings. 9. Aggrieved by the order of the Assessing Officer, the assessee filed an appeal before the Commissioner (Appeals) which was allowed by the impugned order. While deciding the appeal, the Commissioner (Appeals) has annulled the block assessment for want of jurisdiction. The Commissioner (Appeals) has observed that nothing was found in the course of search to point out that the advances were bogus. The assessee has furnished the details of advance even before the date of search and, therefore, the department was aware of the details of advan....
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....n and taking advances from 63 persons to meet the purchase price has been disclosed in the books of account for the year ending 31-3-1999 under Schedule 6 of audited balance-sheet. The assessee-company has also provided a note that form part of profit and loss account and balance-sheet as on 31-3-1999. The learned counsel for the assessee has vehemently contended that the assessee has filed its return of income for the year 1999-2000 on 30-12-1999 along with hand-written report wherein the assessee has disclosed the transaction in question and explained all relevant details with regard to purchase and sale of property and the same was also reflected in the audited balance-sheet for the year ending 31-3-2000. Therefore, the transaction relating to purchase of properties were mentioned in the return filed before the date of search. Hence, they cannot be treated as undisclosed income and assessed in the block assessment as complete information was with the department on the date of search. The counsel for the assessee has referred page Nos. 15 and 20 of the paper book which is scheduled to the accounts with a note attached and form part of profit and loss account showing details of....
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....redits/advances which is already a subject-matter of return already filed by the assessee for the assessment year 1999-2000 and part of the assessee's books of account. 12. After hearing the rival contentions and material on record, we find that it is undisputed fact that block assessment order is passed by the Assessing Officer thereby undisclosed income has been computed on the basis of the statement recorded during the search which was retracted by the persons. No evidence or material was found in the search which substantiates the undisclosed income computed by the Assessing Officer and as pointed out by the learned counsel for the assessee all necessary details and information were already with the department as the assessee had already filed the return of income for the assessment year 1999-2000 before the date of search. Even during the proceedings under section 27D, the department had investigated the matter as regards advance taken by the assessee from 63 persons as source of fund to purchase the properties in question. From all these facts, it is clear that all necessary details and information were already with the department with respect to the purchase of the pr....