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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 ..... sessee has been able to discharge the onus for showing the nature and source of credit entries in the bank account of KEW, PEL as well as, in the bank accounts of N.C. Jain and P.L. Mittal which in turn are sourced from Shaw Wallace and its subsidiaries. As evident that the source of money for Shaw Wallace and subsidiaries was in turn from ICDS which promoted the assessing officer to disallow in the hands of Shaw Wallace interest expenditure to the tune of Rs. 67.65 crores and therefore the addition to the tune of Rs. 12.41 crores made in respect of credit entities in the bank accounts of the two entries are unjustified and rightly directed the same to be deleted. Thus, we find that the tribunal after verifying and examining the factual position has granted relief to the assessee and the revenue has failed to make out a case to set aside the order passed by the tribunal. Substantial questions of law are answered against the revenue. - HON BLE MR. ACTING CHIEF JUSTICE T.S. SIVAGNANAM AND HON BLE MR. JUSTICE HIRANMAY BHATTACHARYYA Appearance:- For the Appellant : Mr. Om Narain Rai, Senior Advocate. Mr. Amit Sharma, Advocate. For the Respondent : Mr. J.P. Khaitan, Senior Advocate. M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , of Shaw Wallace and thereafter to come up with a fresh assessment order in the case of the assessee. Pursuant to the order passed by the tribunal, reassessment was completed and second block assessment order dated 27.03.2002 was passed making substantive addition of Rs. 12.41 crores as undisclosed income on the ground of credit entries/cheques deposited in two bank accounts of the PEL and KEW. The assessee assailed the correctness of the order by filing an appeal before the tribunal contending that the assessing officer committed an error in making substantive addition in the reassessment on a new issue which was not subject to the assessment which was set aside by the tribunal by order dated 08.10.1999 and such new addition in the reassessment is void in law and not permissible. It was further contended that the assessing officer committed an error in changing the findings given by his predecessor in the original block assessment especially in the absence of any fresh material or evidence and it is a case of change of opinion. Further the assessing officer committed a serious error in making the addition by ignoring findings of the assessing officer in the original assessment wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 12,41,00,000/-being unexplained deserves to be treated as undisclosed income of the assessee; the tribunal failed to appreciate that the observation of the tribunal in the first round of litigation to the effect that the assessing officer would 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, had attained finality and in the instant case the assessing officer has indeed done that which was required of it to be done; the tribunal failed to appreciate that when by the first order dated 08.10.1999 passed by the tribunal, direction was given to the assessing officer to make a fresh assessment by examining the facts of the case once more after taking into consideration further developments in the block assessment of Shaw Wallace and to pass a fresh assessment order which tantamount to directing the assessing officer to form an opinion without being influenced by the opinion of the first assessing officer, therefore it could not be held that the second assessing officer did not enjoy the jurisdi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e basis. Further by referring to the second assessment order dated 27.03.2002, it is pointed out that setting aside the block assessment in the case of Shaw Wallace has already been completed on 30.03.2000 and the findings in the original block assessment in respect of the said matter remains unaltered and the appeal filed by the Shaw Wallace against the said order is pending before the tribunal. 7. Now we are required to see as to whether the tribunal was justified in allowing the appeal filed by the assessee and setting aside the order passed by the assessing officer dated 27.03.2005 for the block period from 01.04.1986 to 27.08.1996. The learned tribunal has elaborately set out the facts and we find that there are repetitions at various places and it became a little difficult for us to cull out the reasons assigned by the tribunal for allowing the appeal. After hearing the elaborate submissions made by the learned advocates on either side and on careful consideration of the order passed by the tribunal, we are of the view that the learned tribunal was right in allowing the assessee s appeal. We support such conclusion with the following reasons:- 8. In the first order of the tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amine whether there was any further developments in the case of Shaw Wallace and noted that this question has been answered by the second assessment order passed in the year 2002 wherein it has been observed that the set aside block assessment in the case of Shaw Wallace has already been completed on 30.03.2000 and findings in the original block assessment in respect of the above matter remains unaltered meaning thereby no addition or deduction/deletion has been made in the addition made in the hands of Shaw Wallace and the original assessment order in the case of Shaw Wallace has been followed and reiterated in the second block assessment order dated 30.03.2000. Thus, it became clear that no addition has been made by the assessing officer in the reassessment of the block period in the case of Shaw Wallace. Therefore, the tribunal noted that this fact has to be considered by the assessing officer as per the direction issued by the tribunal and thereafter to come up with a fresh assessment order in the case of the respondent assessee. The second assessing officer had admitted that there is no alteration in the hands of the Shaw Wallace meaning thereby that there is no addition or de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... secondly, the Tribunal in its First Order of 1999 (dated 08.10.1999) has categorically made a finding of fact in its own words It has been learnt that the Tribunal has set aside the block assessment order in the case of SWC and has directed the AO to reassess the same in the light of an order passed by the Calcutta High Court in the writ petition filed by SWC in WP No. 11982/7/1999 relating to the block assessment and also regular assessments for the relevant period. Since the assessment in which the addition of Rs. 11.86 lakhs has been made in a substantive manner itself stands set aside for re-framing purpose, in fitness of things the addition of the amount in the hands of the present assessee also on protective basis should require a fresh examination. We therefore, set aside the impugned block assessment and direct the AO to examine the facts of the case once fore 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 . This finding of fact as found by the First Tribunal order of 1999 that substantive assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of M/s. SWC. From this discussion we note that in the block assessment order of M/s SWC it was found that M/s. SWC had transferred through several persons/entities including the assessee Rs. 89.02 crores for acquiring six (6) Gauhati based companies and this amount (Rs. 89.02 crores) was from ICDS of Rs. 219.77 crores and therefore the AO in the case of M/s. SWC disallowed the interest expenditure to the tune of Rs. 67.65 crores on the reason that amount of Rs. 89.02 crores was utilized for non-business purpose and we note that for these precise reasons that no substantial addition was made in the hands of the assessee because the entire money which has come to the kitty of assessee either as credit entry or withdrawal are from/for M/s. SWC. For this reason only the First AO made addition on the assessee only on protective basis. 11. The learned tribunal not stopping with the above conclusion examined the merits of the addition to the tune of Rs. 12.41 crores on the ground that the credit to the bank account of N.C. Jain and P.L. Mittal has not been proved by the assessee. Though the assessing officer noted that the assessee has filed bank statement, chart, statement recorded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ., Branch, Calcutta) Rs. 345 lakhs P.L. Mittal (A/c No. 4915 Syndicate Bank Brabourne Rd., Branch, Calcutta Rs. 235 lakhs M/s. Dunlop India Limited Rs. 200 lakhs M/s. Kalo Engineering Works N.C. Jain (A/c No. 4882 Syndicate Bank Brabourne Rd., Branch, Calcutta) Rs. 230 lakhs P.L. Mittal (A/c No. 4915 Syndicate Bank Brabourne Rd., Branch, Calcutta Rs. 422 lakhs M/s. Dunlop India Limited Rs. 275 lakhs 12. After taking note of these facts, the tribunal held that this being the reason that in the first assessment order, the assessment in the case of the respondent assessee was on protective basis. In paragraph 21 of the order passed by the tribunal elaborate exercise has been done by the tribunal to examine the details produced by the assessee to return a finding of fact that the money has been transferred to the two entities are from the bank accounts of the two said persons. Thus, the tribunal rightly concluded that the protective assessment was not warranted in the hands of the assessee because the assessee has been able to discharge the onus for showing the nature and source of credit entries in the bank account of KEW, PEL as well as, in the bank accounts of N.C. Jain and P.L. Mit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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