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TMI Blog2023 (4) TMI 580X X X X Extracts X X X X X X X X Extracts X X X X ..... ether the Hon'ble Tribunal was justified in replacing the opinion of the second assessing officer regarding withdrawal of cash from the bank accounts of M/s. Kalo Engineering Works and M/s. Pragati Engineering Company with its own opinion without mentioning the facts leading to such conclusion. 2. We have heard Mr. Om Narain Rai, learned senior standing counsel assisted by Mr. Amit Sharma, learned standing counsel for the appellants and Mr. J.P. Khaitan, learned senior advocate assisted by Mr. Asim Chowdhury and Mr. Soham Sen, learned advocates appearing for the respondent assessee. 3. The facts which are necessary for considering the substantial questions of law suggested by the revenue are set out as hereunder: 4. A search was conducted during 1996 on the group of M/s. Shaw Wallace and Company Limited (Shaw Wallace) and also on the respondent assessee as well. Pursuant to the search, the original block assessment under Section 158BC of the Act was completed on 27.02.1998 making an addition of Rs. 11.86 crores on protective basis. The addition was made on the ground that the assessee had withdrawn cash from two bank accounts of M/s. Pragati Engineering Limited (PEL) and M/s. Ka ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal was disposed of by the judgment dated 11.03.2020 holding that the tribunal in its order dated 31.03.2005 has not addressed the issues which have been pointed out by the assessee and they should have been dealt with in accordance with the earlier order of the tribunal dated 08.10.1999 for such reasons, the order passed by the tribunal dated 31.03.2005 was set aside and the tribunal was directed to re-determined the appeal as expeditiously as possible. Pursuant to which the tribunal took up the matter and by the impugned order allowed the appeal. Aggrieved by the same, the revenue has preferred the present appeal. 5. On behalf of the revenue, it is argued that the tribunal failed to appreciate that the failure of the assessee to explain the purpose, reason and basis of the withdrawal of Rs. 11.86 crores satisfactory clearly establishes that it was the assessee's income and the assessee had not disclosed the same and was rightly added by the assessing officer; the tribunal failed to appreciate that the assessee's version that the sale proceeds of undisclosed shares had been deposited in the two bank accounts standing in the name of PEL and KEW were not established in as much ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard to the findings pursuant to the investigation done by ADIT (Investigation) wherein it has been stated that the money coming through N.C. Jain and P.L. Mittal has come from Shaw Wallace or its subsidiaries and after mentioning the same, the assessee was asked to substantiate their claim with evidence that the credit entries in the two bank accounts are sale proceeds of undisclosed shares as claimed by the assessee in their letters dated 28.12.1996 and 18.02.1998. Further the assessing officer has referred to the contents of the letter of the assessee dated 28.12.1996 wherein he had stated that the assessee had invested out of his undisclosed income in the share applications made in the financial year 1989-1990 and 1990-1991. Further there is reference to the assessee's statement dated 18.02.1998 stating that he had retained the amount of Rs. 186 lakhs out of net cash withdrawals of Rs. 1180 lakhs and the balance Rs. 1000 lakhs was returned back in cash to the nominees of Shaw Wallace. Therefore, the facts clearly establishes that there is no linkage of the assessee's undisclosed income as disclosed in the block return and the transactions in the bank account of PEL and KEW and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the present assessee also on a protective basis should required a fresh examination. We therefore, set aside the impugned block assessment and direct the AO to examine the facts of the case once more after allowing the assessee an opportunity of being heard and also to take into consideration the further developments in the block assessment and thereafter to come up with a fresh assessment order in the case of the assessee" (emphasis given by us) 9. The reasons for the tribunal to issue the abovementioned direction was because the assessing officer in the original block assessment made in the year 1998 has made substantive addition of Rs. 11.86 crores in the hands of Shaw Wallace and since the case of Shaw Wallace has been remanded back to the assessing officer for reframing the block assessment and other assessments, the addition made on the assessee was on protective basis. The tribunal took note of the fact that this court had set aside the block assessment/regular assessment in the case of Shaw Wallace and directed fresh assessment to be made. Therefore, the tribunal thought fit to set aside the assessment made on the assessee and remand back the matter to the assessing off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 dated 11.03.2020 which is to the following effect: The Court: By an order of the tribunal dated 8th October, 1999, the appeal of the assessee was partly allowed by setting aside the impugned block assessment directing the assessing officer to examine the facts of the case once more after hearing the assessee, taking into account "further developments in the block assessment" and made a fresh assessment order. Rs. 11.86 lakhs were added to the account to the assessee on a "protective basis". This protective addition was made in connection with a block assessment order made in the case of Shaw Wallace and Co. Ltd. (SWC) where these additions were made in a "substantive manner". According to the tribunal, since this substantive addition had been set aside and remanded, the case of the assessee required a re-look. The remand was thus very limited. 10. From the above judgment and order, it is clear that the remand was for a very limited purpose and therefore, the second assessing officer in the reassessment proceedings could not have altered the protective assessment made to the tune of Rs. 11.86 crores on the respondent assessee as there is no change or development in the find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SWC then the same amount would have been reduced to that extent, from the second/block reassessment order of 30.03.2000 in the case of M/s. SWC which is not the case of the Second AO and so the finding of AO is per se contradictory and in this context the Ld. A.R. explained that in the case of M/s. SWC in the first round the AO noted that M/s. SWC has deposited Rs. 89.2 crores to take over six (6) Gauhati companies and had deposited money in the accounts of Shri N.C. Jain and Shri P.K. Mittal and intermediers: meaning thereby that money transferred by M/s. SWC to Shri N.C. Jain and Shri P.K. Mittal and then transferred to M/s. Kalo and M/s. Pragati which were benamidars,/entities have been taxed substantively in the hands of M/s. SWC and according to him this fact is evident from a perusl of the impugned order at page 11/77 of the paper book the second AO has noted that "Besides in the case of SWCL............In that case on the basis of investigations it was revealed that the fund of SWCL to the tune of Rs. 89.02 crores out of ICDSs of Rs. 219.77 crores utilized for acquisition of six Gauhati based companies was held to be for non-business purpose as the money was siphoned off in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 131 of the Act in the year 1998 to make the addition of Rs. 12.41 crores. The tribunal noted that pursuant to the show cause notice issued by the assessing officer the assessee submitted a further chart to show that money came to the bank accounts of PEL and KEW from Shaw Wallace through bank accounts of N.C. Jain and P.L. Mittal. The tribunal also noted that the assessing officer has not pointed out any infirmity in the flow chart and the statement of the assessee which was recorded by the investigating wing under Section 131 of the Act as early as on 18.02.1998, and faulted the assessing officer for having outrightly rejected on spacious plea. The tribunal also faulted second assessing officer in not cross verifying the claim that the bank statement from the Syndicate Bank obtaining from those bank accounts which could have been easily be done. Furthermore the tribunal noted that the documents produced by the assessee clearly show that the money came to the account of PEL and KEW from Shaw Wallace through bank account of N.C. Jain and P.L. Mittal through cheques. After rejecting the findings of the second assessing officer to be spacious plea, the tribunal took upon itse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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