TaxTMI 
TaxTMI 
2013 (11) TMI 1493
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....in question?" 3. Later on during the course of hearing on 6th August, 2013, the following order was passed: "Keeping in view the aforesaid position and specifically ground 'j' as raised by the Revenue, we deem it appropriate to frame an additional substantial question of law: "Whether the order of the Tribunal is erroneous and contrary to law as it has not adjudicated and decided the grounds of appeal placed by the Revenue and on this ground the entire order should be set aside?" Thus, the second question of law was framed and we are required to answer the two question of law. 4. The respondent-assessee was subjected to search and seizure operations on 14th July, 1999 in which his residence was also covered. Pursuant to notice under Section 158BC dated 9th August, 2000, return for the block period was filed on 22nd September, 2000, declaring undisclosed income of Rs.2,10,000/-. The Assessing Officer made addition of Rs.5,23,78,058/- as unexplained income under Section 69A of the Act, holding that the transactions of purchase from M/s Sachdeva Trading Co. and M/s Rave Scans were not genuine and the transactions relating to export of graphic art films and brass tips for ball pen....
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...., ITA(SS) No. 85/D/02 was still pending but the said application was dismissed on 9th May, 2008. 7. We have referred to these facts in view of the contention raised by the counsel for the respondent-assessee which was discerned by us in our order dated 6th August, 2013. Counsel for the respondent-assessee had raised an erroneous plea and had incorrectly relied upon grounds of appeal subject matter of IT(SS)A 294(Del.)2003. A very limited and narrow issue on the question of computation of disallowance under Section 80HHC was raised. The main appeal by the Revenue was against the deletion of the additions and the finding recorded by the Commissioner (Appeal) in the order dated 18th March, 2002 which was made subject matter of cross-appeals IT(SS)A 77/Del/2002 filed by the respondent-assessee and IT(SS)A 85/Del/2002 filed by the Revenue. 8. For the sake of completeness and to avoid any confusion as to what was held by the tribunal while deciding appeals IT(SS) A77/Del/2002 and IT(SS) A85/Del/2002, we intend to reproduce the findings recorded by the tribunal in paragraph 5 and 6 of the impugned order dated 5th September, 2008, which read as under:- "5. We have considered the rival s....
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....are Brokers Ltd. (288 ITR 345), hold that the Assessing Officer cannot take adverse view on the basis of statement of Shri Sachdeva. If the statement of Shri Sachdeva is discarded or is ignored while considering the evidence on record, there is no other material before the Assessing Officer to take an adverse view. We, therefore, deleted the addition as made by the Assessing Officer on the basis of the statement of Shri Sachdeva. Since, we have deleted the entire addition, the finding of the learned CIT(A) and addition is to be made as per section 40A(3) of the Act, no longer survives." 9. At this stage, we note and record that these are the only findings and reasoning recorded by the tribunal. The first finding relies upon the judgment of Delhi High court in CIT vs. Ravi Kant Jain (2001) 250 ITR 141 (Del.). In the said case, it was held that the block assessment proceedings were not a substitute for regular assessment proceedings and their scope and ambit was limited in that sense to the material unearthed during the search. The block assessment proceedings were in addition to regular proceedings done or to be done. In the block assessment proceedings evidence found as a result o....
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....ch. He was made to sign documents including partnership deed. He had signed blank cheque books, bank opening forms, bond papers and some affidavits. But, he did not do business in the name of Sachdeva Trading Co. and the deposits in the bank account were made by Arun Malhotra. Similarly, he had opened bank account in Dena Bank in the name of M/s Rave Scans, in which he was again shown as a sole proprietor. He had signed documents including blank papers, cheques etc and had given them to Arun Malhotra. He was not in a position to supply goods of the value and all bills and invoices of Sachdeva Trading Co. and Rave Scans were bogus. The telephone number and sales tax number on the bills of Sachdeva Trading Co. were not genuine though his residential address was mentioned. He did not know the address C B-8, Ring Road, Naraina, printed on the bills of Rave Scans. He was unaware of brass tips for ball pens and did not know any person by the name of S.P. Batra. 11. We have referred to the aforesaid facts in detail to highlight that the legal finding on the first aspect recorded by the tribunal in the impugned order, are wrong and factually incorrect. The block assessment order was based....
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....imilarly bank accounts in Dena Bank relating to Rave Scans and Bank of India relating to Sachdeva Trading Co. were called for and placed on record. As per the bills seized during the course of search, respondent had shown purchases of Rs.1,91,65,440/- from Sachdeva Trading Co. and Rs.1,47,00,000/- from Rave Scans, totaling Rs.3,38,65,440/-. The respondent had received export proceeds of Rs.5,21,72,843/- from M/s Triwood Ltd., Hong Kong between 17th October, 1994 to 1st March, 1995. After the proceeds were received, the same were transferred to the bank account of Sachdeva Trading Co. and Rave Scans from where they were withdrawn by way of cash withdrawals. The respondent assessee has accepted and admitted that Iram Group International nor he had not filed any return for the assessment year 1994-95. 13. On the said aspect, the Commissioner (Appeals) had recorded that the respondent had not filed any return and, therefore, books of accounts and documents cannot be treated as part of any return filed, besides several purchase invoices were seized in order to establish that the purchases were not genuine. Commissioner (Appeals) thus upheld initiation of the block assessment proceeding....
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.... not agree be subjected to cross-examination. Evidence Act is not directly and specifically made applicable to income tax assessment proceedings. However, principles of natural justice and fair play apply. Principles of natural justice require and mandate, a fair, equitable and just procedure and what could be fair and just in a given case is premised on the factual matrix and cannot be put in a strait jacket formula. The Delhi High Court in J & K Cigarettes Ltd. vs. Collector of Central Excise, 2009 (242) ELT 189 (Del.) examined the constitutional validity of Section 9D of the Central Excise Act, 1944 which confers power or discretion upon the Central Excise Officer to rely upon statement of witnesses who have not been subjected to cross-examination, if any of the following conditions are satisfied: "(a) when the person who had given the statement is dead; (b) when he cannot be found; (c) when he is incapable of giving evidence; (d) when he is kept out of the way by the adverse party; and (e) when his presence cannot be obtained without an amount of delay or expense, which the Officer considers unreasonable." 17. It was accordingly held as under:- "25. Section 9-D of the Ac....
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....rring to the same subject, viz. relevancy of statement of fact by person who is dead or cannot be found under certain circumstances, passed with the same purpose and for the same object, the safe and well known rule of construction is to assume that the legislature, when using well known words upon which there have been well known decisions, use those words in the sense which the decisions have attached to them. The provisions under Section 32 of the Evidence Act have not been found to be ultra vires of the Constitution. Therefore, the provisions under Section 9-D of the Act, which are pari materia with the provisions under Section 32 of the Evidence Act, cannot be held as ultra vires of the Constitution." 18. The Division Bench, thereafter, referred to the provisions and position of law de hors Section 9D and it was observed that whenever power was given to an adjudicating authority to pass quasi judicial order which might have adverse civil consequences, it must be exercised in just, fair and bonafide manner and in good faith. It should not be arbitrary. The said conditions were sine qua non to the pillars of democratic set up but they cannot and should not be extended beyond li....
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....ales bills were also raised by them. Papers were signed by Arun Malhotra as sole proprietor. Certificate of Export and Realization was issued in the name of Iram Group International with Arun Malhotra as the proprietor. Proceeds were deposited in the Central Bank of India account of Iram Group International. 20. The Assessing Officer has referred to several statements of Chander Prakash Sachdeva recorded on different dates. Copies of these statements were made available to the respondent for his comments. Chander Prakash Sachdeva was also summoned for cross-examination by the respondent-assessee. However, Chander Prakash Sachdeva refused cross-examination on the ground that he feared for his life. The said fact is specifically mentioned in the assessment order, though at another place it is also mentioned that for reasons best known to him, Chander Prakash Sachdeva refused cross-examination. The fact that Chander Prakash Sachdeva had feared for his life, stands recorded in the order passed by the Commissioner (Appeals). It is recorded that during the course of statement on 9th November, 1998, Chander Prakash Sachdeva had asserted that he had been threatened and warned that he woul....
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....ourts while deciding disputes of such nature, cannot take a myopic view but a holistic approach is required. The surrounding circumstances and milieu have to be gone into and examined and indeed would reflect and help in ascertainment of truth. In the present case, the order of the tribunal is lacking on the said aspects. Even if there may be justification and reason to ignore or not entirely base the case on statements of Chander Prakash Sachdeva, several facts required explanation and elucidation from the respondent. Absence or failure to explain may in fact be reflective and help in adjudicating the contention whether any threats were extended to Chander Prakash Sachdeva or whether the facts corroborate the statement and together establish the stand of the Revenue. 22. We would now like to refer to the written submissions field by the respondent and notice the contentions. The respondent-assessee has incorrectly submitted that the Commissioner (Appeals) had held that the purchases from Sachdeva Trading Co. and Rave Scans were genuine. There is no such finding by the Commissioner (Appeals). Findings of Commissioner (Appeals) as noticed above is vague, contradictory and not coher....