TaxTMI 
TaxTMI 
2010 (2) TMI 908
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.... in I. T. A No. 2203/Ahd/2002 are notices under section 148 of the Income-tax Act, 1961 (hereinafter referred to as "the Act") was issued on the assessee-Hindu undivided family in the status of the Hindu undivided family for the years under considerations as also for the assessment years 1987-88 to 1996-97. The assessee filed returns of income in response to the notice under section 148 of the Act, declaring agricultural income and diary income, accompanied by computation of income and receipts and payments account for the respective periods. The assessee's nature of income is from diary farming and agricultural. The assessments under section 143(3) read with section 147 of the Act were framed by the Deputy Commissioner of Income-tax, Circle-1, Vapi, accepting the status of the assessee as Hindu undivided family and accepting the assessee's agricultural income and from diary farming as disclosed but making certain disallowance of unexplained expenditure on account conveyance, repair and maintenance and miscellaneous expenses as not related to agricultural activity vide order dated March 28, 2000. Aggrieved against the assessment orders, the assessee preferred an appeal before the C....
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....undisclosed income and assets acquired by the family members. The status claimed by the assessee of the Hindu undivided family is therefore rejected and the income which is assessed and taxed in the hands of Shri C. J. Rathod (individual), on substantive basis and in the hands of the assessee on protective basis." Accordingly, the Assessing Officer assessed the assessee-Hindu undivided family on protective basis and substantive addition was made in the hands of the individual. Aggrieved, the assessee preferred an appeal before the Commissioner of Income-tax (Appeals). The Commissioner of Income-tax (Appeals) allowed the status of the Hindu undivided family and directed the Assessing Officer that any addition is to be taxed on substantive basis in the hands of the Hindu undivided family and not in the individual status. For this, the Commissioner of Income-tax (Appeals) held in paragraphs 18.6 to 18.8 as under:- "18.6 I have carefully gone through the submissions of the appellant and also the facts mentioned by the Assessing Officer in his assessment order I am of the view that the Assessing Officer has not brought out sufficient and convincin....
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....evidenced was filed for the same. He strongly agitated to the order of the Commissioner of Income-tax (Appeals) as he has decided on the basis of photo copy of Mamlatdar certificate evidencing inheritance of land and this certificate is not conclusive that the land belongs to the Hindu undivided family. In view of these arguments, the learned senior Departmental representative urged the Bench to confirm the order of the Assessing Officer. On the other hand learned counsel for the assessee, Shri Mehul K. Patel, first of all, started his argument by referring to the assessee's paper book page 26, where he has taken us to assessment orders originally passed by the Assessing Officer. He stated that the assessee has filed returns of income in response to notice under section 148 of the Act issued in the capacity of the Hindu undivided family and not as the individual. He stated that the assessee has filed 7 x 12 extracts of agricultural lands owned by the assessee and a certificate from the Mamlatdar of Silvassa stating that the assessee has inherited pieces of agricultural land totally addition measuring 4 hectare and 5 acres. According to learned counsel, once the Assessing ....
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....made by the Assessing Officer. For this, the Tribunal in first round, vide order dated April 4, 2003, has recorded findings in paragraph 1 as under:- "All these appeals by the assessee relate around the common issue, i.e., disallowance of agricultural expenses made by the Assessing Officer under section 69C of the Income-tax Act, 1961. For the sake of convenience these appeals are consolidated and disposed of by a common order." We further find that on this issue, that the Tribunal has set aside the issue to examine the character and allowability of the expenditure vis-a-vis the agricultural activity and other activities by giving following findings in paragraphs 3 and 4:- "3. I find that the case was not examined in the right perspective. The requirement of section 60C is that the expenditure has to be found to have been incurred by the assessee in the financial year and secondly the assessee fails to indicate satisfactorily the source of such expenditure. The provisions of section 60C are mere clarificatory and embody a rule of evidence. Even otherwise an addition could be made in respect of the amount of expenditure which the assessee is found to ha....
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....l is incorrect. The order of the Deputy Commissioner was already implemented on August 18, 1989 and this was not agitated, within the time prescribed for appeal and was allowed to become final. Therefore, there is no reason to interfere with the orders of the Assessing Officer now appealed against on this point. Thereafter, the petitioners filed an appeal in T. A. No. 857 of 1991 before the Tribunal. By the order date'd July 13, 1992, the Tribunal dismissed the said appeal. 2. Admittedly, the petitioners have not filed any appeal against the order of the Assessing Officer dated August 18, 1989, levying tax at 10 per cent. on the turnover of Rs. 20,23,290 and the order dated August 18, 1989, has become final. Further, the order of remand dated March 27, 1989, by the appellate authority in Appeal No. 57 of 1988 with regard to the turnover of Rs. 1,21,05,095 which included the turnover of Rs. 20,23,290 was not the subject-matter of appeal before the Tribunal in T. A. No. 454 of 1989, which was subsequently remanded to the Assessing Officer. Similarly the order of remand dated September 20, 1989, made by the Tribunal in T. A. No. 454 of 1989 does not cover the turno....
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....the question regarding the validity of jurisdiction of the officer to reopen assessment proceedings has become final, in an appeal against a fresh order made pursuant to remand to the first appellate authority by the Tribunal, the assessee is not entitled to raise the question about validity of reopening of assessment before the Tribunal. We find that the hon'ble Madras High Court has considered the decision of the hon'ble Kerala High Court in the case of M. K. Mohammad Kunhi v. CIT [1973] 92 ITR 341 (Ker), wherein it is held as under (from headnote):- "Where the Appellate Tribunal remands a case the finality of views expressed by it while doing so depends on the nature of the order of remand. If the remand is in the nature of calling for a finding and the Tribunal keeps seisin of the case it may be permissible for the Tribunal to reconsider its views. On the other hand, if the Tribunal disposes of the appeal while passing the order of remand and another appeal comes before the Tribunal, against the order passed after the remand, it has no power to reconsider the finding or opinion. Questions which have become final and concluded by the remand order cannot be reopened." &....
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.... status different from that in the earlier years, is not warranted. The hon'ble Kerala High Court relied on the hon'ble apex court judgment in the case of New Jehangir Vakil Mills Co. Ltd. v. CIT [1963] 49 ITR (SC) 137 (page 898 of 130 ITR):- "The ruling given by the Full Bench of the Madras High Court and the Division Bench of the Bombay High Court appear to have got the approval of the Supreme Court though not expressly, as could be gathered from the following passage occurring in New Jehangir Vakil Mills Co. Ltd. v. CIT [1963] 49 ITR (SC) 137 (page 142):- 'The extent to which a decision given by an Income-tax Officer for one assessment year affects or binds a decision for another year has been considered by courts several times and speaking generally it may be stated that the doctrine of res judicata or estoppel by record does not apply to such decisions ; in some cases it has been held that though the Income-tax Officer is not bound by the rule of res judicata or estoppel by record, he can reopen a question previously decided only if fresh facts come to light or if the earlier decision was rendered without taking into consideration material evidence, etc.'" ....
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....declared agricultural income. The assessee contended before the Commissioner of Income-tax (Appeals) that he has filed copies of sale bills regarding sale of agricultural produce and also filed evidence to show the holding of agricultural land by the assessee. The Commissioner of Income-tax (Appeals) forwarded these submissions and evidence to the Assessing Officer. The Assessing Officer in the remand report examine the aspect of agricultural income and noted that only xerox copies of sale bills regarding sale of agricultural produce have been produced and he narrated the agricultural income assessed for different assessment years as under:- Assessment year Assessed income Income shown by the appellant (Rs.) (Rs.) 1987-88 1,26,015 1,38,185 1988-89 1,58,273 1,92,575 1989-90 3,02,364 4,20,994 1991-92 2,86,947 3,80,125 1992-93 3,19,404 4,27,555 1993-94 6,24,826 8,08,456 1994-95 7,84,415 9,98,064 1995-96 8,31,604 10,55,608 1996-97 8,53,281 10,59,721 Total 48,17,857 61,60,346 In view of the remand report and submissions of the assessee, the Commissioner of Income-tax (Appea....
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..... 5.30 lakhs in the assessment year 1992-93. Accordingly, we can only make a fair estimate and taking the figures of earlier years, we estimate the disallowance at Rs. 1 lakh only and the balance can be treated as agricultural income. The Assessing Officer is directed to recompute the disallowance at Rs. 1 lakh only. This issue of the Revenue's appeal is dismissed and that of the assessee is partly allowed. The next two common issues in I. T. A. No. 2023 and 2151/Ahd/2002 of the Revenue and the assessee is as regards to unexplained investment in immovable property at Rs. 7,99,059 by the Assessing Officer, unexplained investment in motor car by the Assessing Officer and unexplained investment of loans and advances at Rs. 25,63,440. For this, the assessee has raised following grounds Nos. 4 and 5 and the Revenue has raised following ground No. 6:- I. T. A. No. 2151/Ahd/2002:- "4. On appreciation of the facts and circumstances of the case, the learned Commissioner of Income tax (Appeals) ought not to have confirmed the action of the Assessing Officer in making addition to the rune of Rs. 4,13,480 on account of investments in land and cash balance by treating the....
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....95-96 a sum of Rs. 31.53 lakhs was taxed in the hands of individual and the same was settled under Kar Vivad Samadhan Scheme 1998. The Assessing Officer was not convinced and made addition of the above three counts. The Commissioner of Income-tax (Appeals) deleted the addition made by the Assessing Officer on account of unexplained investment in assets at Rs. 7,99,059 to the extent of Rs. 3,89,579 and sustained the balance addition of Rs. 4,13,480. Similarly, the Commissioner of Income-tax (Appeals) also deleted the addition of unexplained investment in movable property, i.e., motor cycle, television, fridge, etc. on the basis of agriculture income declared by the assessee in all the years. He has considered the cash flow made by the assessee and the income of the last ten years as declared and assessed by the Assessing Officer. He has also deleted the addition of unsecured loans and advances except the addition of Rs. 4,13,480. We find that the capital of the Hindu undivided family for the assessment year 1997-98 has been shown at Rs. 49,73,264 and this is supported by the capital account and copies of the balance-sheet for the assessment years 1987-88 to 1996-97 and in ....
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....essing Officer." We further find that the Assessing Officer as well as the Commissioner of Income-tax (Appeals) has considered that out of the total amount given at Rs. 57.16 lakhs given by the assessee, the following loans were claimed to be advance received for purchase of land by the assessee as under:- Date Name Amount Mode 5-4-1996 Goman Chhiba Rathod 50,000 Cash 8-10-1996 Chhibabhai J. Parmar 50,000 Cash 8-6-1996 Khandubhai J. Solanki 1,01,000 Cash 25-6-1996 Fatehsinh B. Solanki 36,000 Cash 10-12-1996 B. C. Rathod 11,13,463 Cash K. A. Chikhaliwala 1,31,000 The assessee purchased this land from Vhikubhai C. Rathod but due to the CBI enquiries purchased of land could not materialise and the advance was outstanding. The assessee has also obtained advance against sale of land from Nailesh B. Parmar and Jaidevsinh B. Parmar at Rs. 8 lakhs and Rs. 3 lakhs respectively. Taking into consideration the capital available with the assessee and the loans as per records, we find that the assessee has sufficient funds for advancing the amount considering the amount of Rs. 31....
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....or agreement for charging of interest with these depositors. In view of these facts and circumstances of the case, we feel that the Assessing Officer has made addition without any basis, the same deserves to be deleted. Accordingly, the orders of the lower authorities is reversed and the appeal of the assessee is allowed on this issue." As above, that there is no agreement between the assessee and the persons to whom the money has been advanced regarding charging of interest and the assessee has actually not charged any interest and these loans were interest free loans. As there is no charge of interest, the assessee is not entitled for any income. Accordingly, the deeming addition made by the Assessing Officer is deleted in view of the decision of the Tribunal in the assessee's group case Smt. Nirmala J. Rathod (supra). Coming to the Revenue's appeal No. 2023/Ahd/2002:- The addition in the case of individual has been made on the substantiated basis by the Assessing Officer but the Commissioner of Income-tax (Appeals) deleted the addition accepting the Hindu undivided family of the assessee and directed the Assessing Officer to treat the addition on the subst....