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TMI Blog2015 (11) TMI 394X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Revenue aggrieved by the order dated July 13, 2006, passed by the Income-tax Appellate Tribunal, Allahabad Bench, Allahabad, in Income Tax Appeal No. 558/Alld/05 and Income Tax Appeal No. 617/Alld/05, dismissing the same. Block assessment period in all the aforesaid appeals is the same, i.e., April 1, 1986, to February 12, 1997. 4. The appellant in Income Tax Appeal No. 81 of 2007, has formulated the following five questions contending that the same constitute substantial questions of law arising from the order impugned in this appeal passed by the Tribunal : "1. Whether the hon'ble Income-tax Appellate Tribunal has erred in law in holding that the peak of unexplained debit of Rs. 35,81,988 in the assessment year 1995-96 would be subsumed in the higher debit of Rs. 48,01,158 in the assessment year 1996-97 and in thereby deleting the addition on account of the unexplained peak credit of Rs. 35,81,988 for the assessment year 1995-96, without appreciating the ratio of the decision of the hon'ble Madras High Court in the case of CIT v. K. Palaniappan [2000] 242 ITR 719 (Mad) in which the hon'ble High Court has held that the concealed income detected in an earlier ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otice under section 143(2), the Tribunal was not justified in permitting the additional ground of the assessment order being illegal on account of non-issuance of notice under section 143(2) of Act, 1961 ? 2. Whether the Income-tax Appellate Tribunal was right in law in allowing the assessee to admit the additional ground of appeal, espe cially when the assessee has filed only cross-objection and was not in appeal ? 3. Whether in view of the facts and in the circumstances of the case, the hon'ble Income-tax Appellate Tribunal was right in law in allowing the assessee to raise additional grounds of appeal, which does not arise from the order of the Commissioner of Income-tax (Appeals), when it has filed only cross-objections ? 4. Whether the Income-tax Appellate Tribunal was right in follow ing rule 11 and rule 22 of the Income-tax (Appellate Tribunal) Rules, 1963, to allow the additional ground of appeal, which is contrary to the express provisions of section 253(4) of the Income-tax Act, 1961 ? 5. Whether, in view of the facts and in the circumstances of the case, the hon'ble Income-tax Appellate Tribunal was right in law in admitting additional ground of appeal, espec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 1,79,57,411 as on March 31, 1996. He rectified the block assessment order under section 154 of the Act, 1961, vide order dated October 4, 2000, working out the peak at Rs. 3,90,71,218. After deduction of relief allowed by the Commissioner of Income-tax (Appeals), vide order dated May 18, 1999, the Assessing Officer revised bifurcated income at Rs. 1,23,96,279 as against Rs. 46,26,198. In the case of M/s. Fertilizers Traders, revised income in respect to the assessee came to be Rs. 2,12,88,936 as against Rs. 79,44,989. 13. Again, the assessee preferred an appeal against the order dated October 4, 2000, passed by the Assessing Officer under section 154 of the Act, 1961, being Appeal No. 263/CC/GKP, before the Commissioner of Income-tax (Appeals), contending that the original block assessment order has merged with the appellate order, leaving no authority or jurisdiction to the assessing authority to make any modification with respect to the income already been assessed. Alternatively, it was contended that the revised block peak has been calculated erroneously. The issue of merger of assessment order in the appellate order was answered by the Commissioner of Income-tax (Appeals), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of computer print outs as had been available to the assessee on the grounds that segregated items were verifiable from the manual account. (v) The undisclosed income so worked out in the aforesaid manner shall be allocated between the two firms in the same ratio as had been done earlier at the time of the block assessment, vide order dated February 24, 1999." 20. The Assessing Officer completed the assessment under section 158BC/ 154/251/254 of Act, 1961, vide order dated October 20, 2004, for the block period and assessed the unexplained peak of debit and credit of the assessee and its sister concern as under : (Rs.) A.Y. 1995-96 A.Y 1996-97 A.Y. 1997-98 A.Y. 1997-98 35,81,988 42,80,206 31,94,789 17,50,000 1,28,06,983 21. The aforesaid amount was divided in the ratio 63.2 per cent. and 36.8 per cent. between the assessee and its sister concern, i.e., at Rs. 80,94,013 and Rs. 47,12,970, respectively. 22. Thereagainst, the assessee preferred an appeal before the Commissioner of Income-tax (Appeals), and, vide order dated September 20, 2005, the Commissioner of Income-tax (Appeals) restricted addition of peak debit to Rs. 48,01,158 for the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g that the higher undisclosed income would take care of lower peak credit of the previous year. It is not correct and contrary to what has been said by the Madras High Court in CIT v. K. Palaniappan [2000] 242 ITR 719 (Mad). 26. Having gone through the aforesaid judgment, we do not find that it has laid down such a proposition of law at all. Therein, the assessee, K. Palaniappan, an individual, submitted a declaration on December 29, 1975, under the Voluntary Disclosure of Income and Wealth Act, 1976, declaring an income of Rs. 50,000 in different years from 1968-69 to 1972-73 at Rs. 10,000 per year. The declaration was received in the Office of the Commissioner of Income-tax after cut-off date, therefore, it was not only accepted by the Department but it also refunded the tax deposited by the assessee. The Income-tax Officer initiated assessment proceedings in the assessment year 1976-77, requiring the assessee to explain the source of credit entry of Rs. 50,000, made on December 29, 1975. He ultimately included a sum of Rs. 50,000 in the income and the order of the Assessing Officer was confirmed by the Commissioner of Income-tax (Appeals). The Tribunal, however, reversed the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent year, but, however, we are of the opinion that a concealed income which was neither disclosed in the assessment proceedings nor in any other ancillary proceeding for any earlier year can hardly constitute a source for a subsequent credit entry and if the explanation of the assessee that the source of the credit entry is the undisclosed income of the earlier years is accepted, it will open the doors to tax evasion and the pur pose behind the enaction of section 68 will be easily defeated as it will be open to anyone to point out that the credit entry came from some undisclosed and unassessed income of prior year." 29. Issue, therefore, raised therein has been decided in the facts of the case in hand. 30. We may also notice that against the Tribunal's earlier order dated February 13, 2004, the Department filed an appeal under section 260A before this court. We are informed that these appeals preferred by the Department have also been dismissed by this court. These appeals, i.e., I. T. A. No. 179 of 2004 and other connected appeals have been dismissed by a Division Bench, vide judgment dated December 13, 2013. Therein the court in paragraphs 14 and 15 has said : "14. Regar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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