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TMI Blog2014 (9) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... TMI 80 - CALCUTTA High Court] - after considering the amendment in Section 158BB, it has been held that the income below the taxable limit of the previous year could not be included as undisclosed income for the block period – also in Chain Sukh Rathi Versus Commissioner Of Income Tax [2003 (9) TMI 12 - RAJASTHAN High Court] it has been held that income has been concealed and it should be computed in cases of search in accordance with the provisions of section 158BB and after computing the total concealed income, it should be taxed as per the rates specified for the concealed income, in each year - the AO is directed to allow appropriate relief to the assessee – Decided in favour of Assessee. Income earned during the year – Undisclosed income or not – Held that:- No disclosure in any other manner was made by the assessee - The assessee has not paid any advance tax or self- assessment tax - merely because some TDS was deducted by the payee, it cannot be presumed that the income is disclosed by the assessee so as to exclude the same from the undisclosed income under Chapter XIV-B - For AY 1997-98, the assessee had income of more than 10 lakhs, he did not file any return at all - The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ota of evidence to establish that the bank accounts in the name of various family members were the bank accounts belonging to the assessee - the direction of the CIT(A) to the AO to exclude the cash and cheque deposited in the accounts of different members of the family cannot be said to be unjustified or incorrect – Decided against Revenue. X X X X Extracts X X X X X X X X Extracts X X X X ..... .1999 CIT(A) restored the aforesaid assessment to the file of AO vi) 28.3.2002 Assessment framed u/s 158BC/143(3) of the Act at an income of ₹ 5,31,41,480/- vii) 2.9.2003 CIT(A) partly allowed the appeal of the assessee. 6. In the original assessment order dated 26th February, 1999, at page 2 paragraph 3, the following finding is recorded:- "3. In response to notices u/s 142(1) and 143(2), Shri Rajesh Girhotra, Advocate attended and filed details from time to time. Written submission have been made as per letters dated 17.2.1999 & 23.2.1999." 7. Thus, as per the finding recorded by the Assessing Officer in the original assessment order dated 26th February, 1999, it is evident that notice under Section 143(2) was served and, in response to such notice, assessee appeared before the Assessing Officer and also filed the written submission. Against the above assessment order, the assessee filed the appeal before the learned CIT(A) but never claimed that notice under Section 143(2) was not served. The CIT(A), vide his order dated 29th October, 1999, restored the aforesaid assessment to the file of the Assessing Officer. Thereafter, fresh assessment was complete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee was squarely covered by Explanation of section 73 vide which the sale and purchase of shares by a company would not be speculative in nature in case its income was mainly derived from house property or capital gains or income of like nature ? (iii) Whether in facts and circumstances of the case the Hon'ble Tribunal was right in law in holding that the brokerage paid was not an admissible expenditure under section 24 of the IT Act even though the rent actually received by the assessee or the tenant was after deducting the brokerage paid ?" 6. We have heard learned counsel for the parties. 7. As regards question (i), we do not find any reason to take a view different from the view taken by the Tribunal. No doubt that an appellate authority can allow a question to be raised for the first time even if such a question was not raised at a lower forum but the discretion to do so has to be exercised in the interest of justice in the facts and circumstances and not mechanically. Normally a question of fact may not be allowed to be raised for the first time as it may prejudice the other side. If such question is raised at the earliest opportunity, the other side can lead ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pinion that the decision of Hon'ble Jurisdictional High Court in the case of Aravali Engineers P.Ltd. (supra) would be squarely applicable and, respectfully following the same, we decline to admit the additional ground sought to be raised by the assessee. 9. Ground Nos.1 & 2 of the amended grounds of appeal read as under:- "1. That having regard to the facts and circumstances of the case learned CIT(A) has erred in law and on facts in not allowing relief out of assessed undisclosed income aggregating to ₹ 90,000/- being the amount of returned income in various years as under as these were below the basic exemption limit. Assessment Year Returned Income Basic Exemp 1987-88 15,000 18,000 1993-94 25,000 28,000 1994-95 25,000 30,000 1995-96 25,000 35,000 2. That having regard to the facts and circumstances of the case, learned CIT(A) has erred in law and on facts in not allowing relief aggregating to ₹ 98,000/- being the amount equal to the basic exemption limits in the following years. Assessment Year Basic Exemption Limit 1988-89 18,000 1988-89 18,000 1990-91 18,000 1991-92 22,000 1992-93 22,000" 10. At the time of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en given to the assessee by the Tribunal can be said to be justified and in accordance with law. Similar question arose in CIT v. M.M. Thomas [2004] 265 ITR 327 again before the Kerala High Court where it was held that since the search under section 132 of the Income-tax Act, 1961, was conducted on November 22, 1995, that is after the retrospective amendment of sub-clause (B) of clause (c) of sub-section (1) of section 158BB, the income below the taxable limit of a previous year could not be included as undisclosed income of the block period." 13. Learned DR has objected to application of the above decision on the ground that the facts in the case of the assessee are altogether different than the facts before the Hon'ble High Court. We find that the decision of Hon'ble High Court is purely based upon the interpretation of provisions of Section 158BB specially the amendment therein by the Finance Act, 2005 with retrospective effect from 1st July, 1995. Therefore, the above decision would be applicable in the case of the assessee also. We, therefore, respectfully following the above decision of Hon'ble Calcutta High Court as well as the amended provisions of Section 158BB((1)(c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts and circumstances of the case, learned CIT(A) has erred in law and on facts in not giving relief of ₹ 11,19,355/- being the amount of income earned during the year of search which cannot be treated as undisclosed income." 17. At the time of hearing before us, the learned counsel for the assessee fairly submitted that though in the grounds of appeal, the relief claimed is ₹ 11,19,355/-, but, actually, the assessee is claiming the relief of only ₹ 79,355/-. He fairly admitted that for AY 1997-98, the assessee did not file any regular return of income either before the search or after the search. That in respect of the amount of ₹ 79,355/-, the tax was deducted at source and therefore, to that extent, the income of ₹ 79,355/- should not be considered as undisclosed income because the tax has already been paid by the assessee by way of tax deduction at source. In support of his contention, he relied upon the decision of Hon'ble Punjab & Haryana High Court in the case of Rajesh Syal Vs. CIT - [2009] 185 TAXMAN 369 (P & H) and of Hon'ble Delhi High Court in the case of CIT Vs. A.T. Invofin India P.Ltd. and others - [2011] 335 ITR 370 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned counsel. However, the facts of the assessee's case are altogether different. For AY 1997-98, though the assessee had income of more than ₹ 10 lakhs, he did not file any return at all. The assessee has not paid any advance tax. Therefore, there was no overt act on the part of the assessee which would indicate that the assessee had the intention to disclose the income. Therefore, on the facts of the assessee's case, both the above decisions relied upon by the learned counsel would be in favour of the Revenue rather than the assessee. That merely because TDS is deducted by a third party, which he was obliged to deduct under the statute, cannot be indicative of the intention of the assessee to disclose the income. In view of the above, we find no merit in ground No.3 of the assessee's appeal. The same is rejected. 21. Ground Nos.4, 6, 7 & 8 of the assessee's amended grounds of appeal read as under:- "4. That having regard to the facts and circumstances of the case, learned CIT(A) has erred in law and on facts in sustaining the addition on account of profit from the deals of Gopal Das Estate & Housing Pvt.Ltd., and that too in the hands of the appellant whereas it w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out of addition of ₹ 2,12,68,390/- as profit from M/s Gopal Dass Estate & Housing (P) Ltd." 24. The facts of the case are that search and seizure operation under Section 132 was carried out at the residence of the assessee i.e. Shri Ram Kumar on 18.02.1997. During the course of search, various documents/loose papers were found and seized. From those documents, it was gathered by the Assessing Officer that the assessee alongwith his brother, wife and sons had paid advance to purchase the land admeasuring to 80 acres in Village Wazirabad and Bindapur. In the original assessment order dated 26.2.1999 at page 3, the Assessing Officer had given the details of the advance given by the assessee and various family members. Later on, these lands were sold to M/s Gopal Dass Estates & Housing (P) Ltd. and the assessee and his brothers received commission from M/s Gopal Dass Estates & Housing (P) Ltd. amounting to ₹ 2,47,85,040/-. That the family members of the assessee had disclosed the income of ₹ 1,43,66,105/- under the VDIS. The Assessing Officer allowed the credit for the same for which at paragraph 22 of the order, he recorded the following finding:- "22. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee, Shri Ram Kanwar." (emphasis by underlining provided by us) 26. The assessee, aggrieved with the order of the Assessing Officer dated 28th March, 2002, filed appeal before the learned CIT(A) who held as under:- "17.5 It is a fact that the AO has not brought out anything on record - there is not an iota of evidence - which could show that the investments in the hands of the various family members were made by the appellant, and that the land actually belonged to the appellant and not to be different family members. The onus was entirely on the AO to bring forth all necessary evidence to substantiate his conclusion that the entire profits were to be taxed in the hands of Sh. Ram Kanwar and that all the deposits in the bank accounts in the form of cash and cheque represented income of the appellant. Unfortunately the AO has failed to discharge the onus. There is no evidence which can even remotely suggest that the appellant was the de-facts owner of the properties, that the appellant had made investment in the properties and therefore, all incomes arising there from would be his income. By simply stating that the appellant was in the fore front of all negotiati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer himself determined the income of the assessee after reducing from the gross commission the income declared by the family members under VDIS. Therefore, even as per the view of the Revenue, the income of the assessee only was to be assessed in the hands of the assessee and not of the family members. Even otherwise, it is a settled law that in the case of the assessee, only his income can be assessed and not the income of the family members. If the Revenue is of the opinion that the family members are the benami of the assessee, then the onus was upon the Revenue to establish so. That no evidence is brought on record by the Assessing Officer to establish that the other family members were benami of Ram Kumar. On the other hand, in the original assessment order, the Assessing Officer himself accepted that income of only Ram Kumar is to be assessed in his hands and not the income of family members. In the set aside assessment order, the Assessing Officer himself stated that there is no reason to take a different view than the view taken in original assessment order. In view of the totality of above facts, we do not find any infirmity in the direction of learned CIT(A) for exclud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of the case, whether the Commissioner of Income Tax (Appeals) was right in law :- (ii) in directing that the addition in respect of bank accounts found in the name of family members be deleted." 33. We have heard the arguments of both the sides and perused relevant material placed before us. In this regard, learned CIT(A) has recorded the following finding:- "The AO shall also exclude all the cash and cheque deposited in the accounts of the different members of the family which have been taken as the income of the appellant. While recomputing the income the AO shall also take into account the bank account with the Union Bank of India, Gurgaon - account No.3233 - wherein it can be seen that there is no deposit of ₹ 29,50,000/- and it is also apparent from the account that a sum of ₹ 8,05,600/- has been added twice in the financial year 1993-94. While recomputing the income the AO is directed to take note of his reply in para (a) and (b) of his submissions dated 27.08.2003 wherein it has been stated that the only deposit was of ₹ 3095 on 27.3.1996 in account No.3233, Union Bank of India, Gurgaon which was closed on 23.07.1996. The AO vide its lette ..... X X X X Extracts X X X X X X X X Extracts X X X X
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