TaxTMI 
TaxTMI 
2010 (8) TMI 674
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....A-4, A-5 and A-6 of Panchanama dated 11-6-1998 pertaining to office premises of the assessee at 18-19, Sai Vihar, Shivajipath, Kalyan (W) contained vouchers for payments made by the assessee to certain individuals. The total amount as mentioned in A-4, A-5 and A-6, came to Rs. 15,72,105, Rs. 11,67,901 and Rs. 16,63,400 respectively. The Assessing Officer after examining these vouchers found the contention of the assessee as correct with reference to the vouchers recorded in regular books of account. Further for the balance amount, which remained unexplained and unaccounted, he, inter alia, made the following additions in the original assessment. A-4 Rs. 11,395.50 A-5 Rs. 27,901.00 A-6 Rs. 37,900.00 Rs. 77,196 He did not accept the assessee's contention that if any addition was to be made on account of unaccounted vouchers for expenses, then he should be allowed credit for the same amount as expense has been incurred out of this income and, therefore, the net result would be Nil. He observed ....
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....ed Rs. 1,29,452 out of the interest debited to profit and loss account. The assessee's appeal on this count was dismissed by the CIT(A). However, the Tribunal had restored this issue to the file of the Assessing Officer, observing as under :- "On careful consideration of the facts of the case, we think this is a fit case for restoring the matter to the file of the Assessing Officer for fresh examination in the light of our comments above. We order accordingly. The matter is restored to the file of the Assessing Officer for determination de novo. The assessee shall be given good and sufficient opportunity of being heard." 4. During the course of hearing, the assessee had taken additional ground of appeal regarding telescoping of Rs. 3,85,000 treated as deemed income under section 69C on account of certain vouchers for assessment years 1997-98 to 1999-2000 on account of alleged cash received by him against the sales commission of Rs. 1 crore declared and disclosed to tax by the assessee as undisclosed income for the assessment years 1994-95 and 1995-96. The Tribunal noticed that the CIT(A) had rejected this request as there was no evidence to show that cash of Rs. 1 crore was a....
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....he first and second grounds of appeal before the CIT(A) was that the ACIT Circle 23(3) Mumbai erred in passing the order dated 18-5-2007 i.e., beyond the period of limitation provided under section 153 of the Act. The CIT(A) taking note of the fact that section 153(3)(ii) does not prescribe any time limit for completion of assessment in order to give effect to the findings and directions contained in an order under sections 250, 254, 260, 262, 263, 264 or in an order of any court.... dismissed the assessee's ground, inter alia, observing that since the Tribunal had neither set aside nor had cancelled the entire order, therefore, the provisions of section 153(2A) were not applicable. 6. Ld. counsel for the assessee took us through the Tribunal's order and findings noted above and submitted that the Tribunal had set aside the issue to the file of the Assessing Officer for fresh consideration and, therefore, the limitation as given in section 153(2A) is applicable and the provisions of section 153(3)(ii) are not attracted. Ld. counsel submitted that in order to attract the limitation prescribed under section 153(2A), it is not necessary that the entire assessment should have been s....
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....ment is passed by the Assessing Officer or the order under section 250 or section 254 is received by the Chief Commissioner or Commissioner or as the case may be, the order under section 263 or section 264 is passed by the Chief Commissioner." Section 153(3)(ii) : "(3) The provisions of sub-sections (1) and (2) shall not apply to the following classes of assessments, reassessments and recomputations which may, subject to the provisions of sub-section (2A) be completed at any time :- (i) Where a fresh assessment is made under section 146; (ii) Where the assessment, reassessment or recomputation is made on the assessee or any person in consequence of or to give effect to any finding or direction contained in an order, under sections 250, 254, 260, 262, 263 or 264 or in an order of any court in a proceeding otherwise than by way of appeal or reference under this Act;" A bare perusal of the above section would reveal that section 153(2A) uses the phrase "an order of fresh assessment" whereas section 153(3)(ii) uses the phrase "assessments, reassessments and re-computations". Further, section 153(2A) uses the phrase "setting aside or cancelling an assessment" ....
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.... (ii) of sub-section (3), any income is excluded from the total income of the assessee for an assessment year, then, an assessment of such income for another assessment year shall, for the purposes of section 150 and this section, be deemed to be one made in consequence of or to give effect to any finding or direction contained in the said order. Explanation 3.-Where, by an order referred to in clause (ii) of sub-section (3), any income is excluded from the total income of one person and held to be the income of another person, then, an assessment of such income on such other person shall, for the purposes of section 150 and this section, be deemed to be one made in consequence of or to give effect to any finding or direction contained in the said order, provided such other person was given an opportunity of being heard before the said order was passed." These explanations have been specifically incorporated in section 153 so as to save the limitation in those cases where in consequence of fresh assessment order passed in pursuance to the order of appellate authority, a part of income is held to be taxable in another assessment year or in case of another assessee. Such cases ....
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.... under section 250, 254, 263 or 264, the limitation contemplated in section 153 would apply or not. The view taken by us is in conformity with the decision of the Hon'ble Delhi High Court in the case of CIT v. Bhan Textiles (P.) Ltd. (supra), wherein, it has been held that in case assessment is set aside, the limitation as contemplated under section 153(2A) would apply. 11. In view of above discussion, Ground No. 1 raised by the assessee is dismissed. 12. Apropos Ground No. 2, brief facts, as noted earlier are that the assessee was given an opportunity to explain the entries in document Nos. A4, A5 and A6 containing entries relating to alleged payments made by the assessee to certain land owners. The assessee's claim under section 37 was denied by the Assessing Officer and the CIT(A). The Tribunal had restored the matter requiring the assessee to establish the nexus on the basis of seized material between cash payments made and lands purchased and sold. The Assessing Officer has observed that the assessee was issued with a notice dated 20-4-2007 under which, he was given reasonable opportunity of being heard. The assessee filed his written reply dated 8-5-2007. He did not acc....
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....e of search pertained to payments made to those parties. He submitted that on the vouchers, the relevant details are available regarding survey No. etc. Further, he referred to paper book Nos. 2, 3 and 4, wherein, list of landlord names as per memorandum possession receipt and the corresponding vouchers details are given. He submitted that all these details were before the Assessing Officer but he has not considered the same. 15. Ld. D.R. relied on the order of the CIT(A). 16. We have considered the rival submissions and perused the record of the case. We find that the Assessing Officer himself has observed in his order dated 18-5-2007 that the contention of the assessee was not fully agreeable. Thus, it is clear that he was of the view that entirely the assessee's claim was not acceptable. However, he has made the disallowance of the total sum. The Assessing Officer has not given even a single example of the vouchers vis-à-vis the memorandum possession receipt in order to demonstrate the discrepancies. Therefore, we are of the opinion that the matter needs to be examined afresh after giving due opportunity to the assessee to explain the nexus between the cash payments....
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....current findings of fact are recorded by both the authorities below. The appellant on facts could not establish the said expenditure as business expenditure. Since this question revolves around the appreciation of evidence, the view taken is a reasonable and possible view which can be supported on the basis of material available on record, it can hardly be said to be a substantial question of law warranting re-adjudication by this Court." Thus, the said decision was rendered only whether the disallowance of deduction could be considered as raising substantial question of law or not. Therefore, the findings of the Tribunal in the first round regarding consideration of allowability of expenditure under section37 in no way got affected by the decision of the Hon'ble Bombay High Court. In view of the above, this ground is allowed for statistical purposes. 17. Apropos Ground No. 3, brief facts are that the assessee had raised an additional ground before the Tribunal seeking benefit of telescoping of Rs. 3,85,000 treated as deemed income under section 69C on account of certain vouchers for the assessment years 1994-95 and 1995-96, against the undisclosed income of the assessee on a....