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TMI Blog2007 (10) TMI 285X X X X Extracts X X X X X X X X Extracts X X X X ..... . REBELLO and J. P. DEVADHAR JJ. S. N. Inamdar with K. Gopal and Jitendra Singh instructed by Inter Asia Lawyers for the petitioner. Vimal Gupta with P. S. Sahadevan for the respondents. JUDGMENT The judgment of the court was delivered by J. P. Devadhar J.- These two petitions are filed to challenge the two notices issued under section 148 of the Income-tax Act, 1961 ("the Act" for short), both dated December 20, 2006, relating to the assessment years 1997-98 and 1998-99. 2. The petitioner is engaged in the business of distribution of Indian made foreign liquor. The petitioner ("the assessee" for short) carried on the business in the name of his proprietary concern M/s. Avadh Liquors. On August 12, 1998, a search ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee during the block period. 5. By the impugned notices both dated December 20, 2006, issued under section 148 of the Act, the Assessing Officer sought to reopen the assessment for the assessment years 1997-98 and 1998-99. It may be noted that regular assessments for the assessment years 1997-98 and 1998-99 were completed under section 143(3) of the Act on March 30, 2000, and March 23, 2001, respectively. The reasons recorded for the assessment year 1997-98 read as follows : "Shri Rakesh Dutt - Assessment year 1997-98. The assessee is a proprietor of M/s. Avadh Liquors engaged in the business of distribution of IMFL. He is also one of the directors of M/s. Dutt Mktg. P Ltd. and M/s. Golden Cellar P. Ltd., mainly trading IMFL. There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal. The finding is that the provisions of sections 68 to 69C may not in a block assessment possible be available to be applied appropriately to the income/money/transaction simpliciter, i.e., when the same is recorded in regular books of account and in such a situation the said income may be taken into account as non-genuine/bogus transaction in law/share application money and in turn may be added as the assessee' s own money/income, by applying the aforesaid provision of law in a regular assessment under section 143(3). In view of this finding by the hon'ble Income-tax Appellate Tribunal, the investment made by the assessee in the abovementioned two companies in the form of share/share application money should be assessed in the h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the block assessment for the block period April 1, 1988, to August 12, 1998. Mr. Inamdar submitted that on perusal of the order of the Income-tax Appellate Tribunal it is seen that the finding given therein is that the undisclosed income, if any, could be considered in the hands of the two companies in which the assessee is a director and not in the hands of the assessee. Mr. Inamdar further submitted that in the present case, neither the Tribunal has given any direction to make additions in the hands of the assessee under section 150(1) of the Act, nor any such direction could be given beyond the period of limitation prescribed under the Act. Relying upon a decision of this court in the case of Lotus Investments Ltd. v. G. Y. Wagh, Asst. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gular assessments as contemplated under section 150 of the Act ? 11. In the present case, on the basis of the material gathered during the course of search conducted on August 12, 1998, the block assessment proceedings were initiated. In the block assessment order, addition of Rs. 90 lakhs was made as undisclosed income of the assessee by treating the entire credit entries of seven parties which were claimed to be the share application money in respect of two companies, namely, M/s. Dutt Marketing P. Ltd. and M/s. Golden Cellar P. Ltd., in which the assessee is a director. 12. The Income-tax Appellate Tribunal held that the provisions of sections 68 to 69C may not apply to the block assessment proceedings and where the transactions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e legally, the same could be considered in the hands of the two companies and not in the hands of the assessee. In other words, the finding recorded by the Tribunal is that the undisclosed income arising on application of the provisions of sections 68 to 69C though taxable in the regular assessment, in the facts of the present case, the amount of Rs. 90 lakhs, if at all taxable, it would be in the regular assessment of the two companies and not in the regular assessment of the assessee. 14. In view of the above categorical finding recorded by the Income-tax Appellate Tribunal the contention of the Revenue that the Tribunal has given a finding or direction to the effect that the amount of Rs. 90 lakhs are liable to be taxed in the regula ..... X X X X Extracts X X X X X X X X Extracts X X X X
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