9911796707
TMI Blog2023 (10) TMI 448X X X X Extracts X X X X X X X X Extracts X X X X ..... return of income. The Tribunal, vide IT(SS)A No. 193/Mds/97, detailed order dated 14-10-2003, after considering assessee's submissions as well as additional evidences filed by the assessee, reduced the taxable income of Rs. 540.07 Lacs to Rs. 64.98 Lacs. The assessee as well as department assailed this order before Hon'ble High Court of Madras in TCA No. 686 of 2005 and 2 of 2009 dated 27.03.2012. 2. The Hon'ble Court, vide paras-8 to 12 of the order noted that since it was a block assessment, the assessee could file appeal only before Tribunal since there was no provision to file appeal before CIT(A) at relevant point of time. Under these circumstances, Rule 46A could not be pressed in to service. However, as per Rule 29, Tribunal may allow production of additional evidences upon being satisfied subject to the condition that Tribunal should afford sufficient opportunity to the revenue to rebut those additional evidences. Therefore, the objection raised by revenue for admission of additional evidences by Tribunal was dismissed. In paras 14 and 15, the Hon'ble Court also noted the nature of documents furnished by the assessee before Tribunal. In para-16, it was held by Hon'ble Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee. The statement of the assessee was recorded on various occasions starting from 13-11- 2015 onwards. The assessee filed additional evidences in the form of paper-book containing 316 pages. Some more documents were filed on 09-12-2015. The assessee's representative appeared on 11-12-2015 and submitted paper-book (explanation with evidences containing 264 pages). Various other submissions and documents were filed from time to time in support of the case and final hearing took place on 23-12- 2015. In para-7, Ld. AO noted as under: - During the course present proceedings on various dates, the assessee and the Authorised representative appeared on various dates discussed above and submitted the paper book containing additional evidence (pages 1 to 316) filed before the Hon'ble ITAT - attested copy of the charge sheet filed by the DVAC before the Session Court cum Special Judge, Chennai, copy of the order of Special court in case No. 2/2003 both in Tamil version and translated English version, copy of the bail order, copy of the order for release obtained from Special Court (bail for assessment), copy of statement recorded by DVAC, paper book containing explanation with evidences ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order is not sustainable in law as the same is not in consonance with the specific directions of the Hon'ble Tribunal while remitting the matter to the assessing authority. 1.2 The impugned assessment order is not sustainable in law as the same has been made without application of mind and without appreciating the submissions of the assessee despite specific written submissions in reply to the show cause notice of the AO. 1.3 The AO failed to note that the assessee had filed evidences of the state revenue authorities before this Hon'ble Tribunal to show and prove his agriculture income and also the source of investments of other persons whose income and investments were sought to be included as that of the assessee, based on which this Hon'ble Tribunal deleted those additions. 1.4 The impugned assessment order, as admitted in the order itself, is only a repetition and reiteration of the earlier block assessment Order passed in flagrant inconsistency to the proceedings before this Hon'ble Tribunal and is hence liable to be quashed in toto. 1.5 The AO failed to note that the documents filed by the assessee by way of additional evidences were not only to show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... search -Rs. 9,02,150 The AO erred in treating the entire cash found of Rs. 9,02,150 as the undisclosed income of the assessee, without considering the explanation offered and the evidences let in to prove the agricultural income earned by the assessee. 3. Gold jewellery - Rs. 10,21,946 The AO equally went wrong in treating a sum of Rs. 10,21,946, being the value of gold jewellery found as undisclosed income of the assessee, without considering the explanation offered. 4.Silver Jewellery - Rs. 81,088 Similarly, the AO erred in treating a sum of Rs. 81,088 being the value of silver articles found as undisclosed income of the assessee ignoring the explanation offered. 5.Diamond Jewellery - Rs. 80,000 The AO equally went wrong in treating a sum of Rs. 80,000/- being the value of diamond jewellery found as undisclosed income of the assessee, ignoring the explanation offered. 6.House hold Articles - Rs. 2,50,000 The AO erred in treating the value of household articles found of Rs. 2,50,000/- as undisclosed income of the assessee, ignoring the explanation offered. 7.Investment in cars - Rs. 9, 15,000. 7.1 The AO erred in treating the contessa car bearing Registr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the interest on the fixed deposit made by A.A. Govindarajan of Rs.1,36,270/-, Rs.1,27,953/-, Rs.1,67,684 and Rs.19,227 for the A.Ys:1994-95, 1995-96, 1996-97 and 1997-98 as the undisclosed income of the assessee. 13.4 The AO went wrong in treating the interest of Rs.25/- on the savings bank a/c balance of A.G. Chittibabu and Rs.25/- on the savings bank a/c balance of A.A. Govindarajan as the undisclosed income of the assessee. 14. Deposits into Bank alc of P.Krishnan & K.Ramakrishnan 14.1 The AO erred in treating a sum of Rs.13,00,100/-, Rs.3,00,000/- and Rs.25,00,000/- in SB A/C No.11547 of P.Krishnan with Bank of Baroda, Kulumani branch as undisclosed income of the assessee for the A.Yrs:199394, 1994-95, 1995-96 and 1997-98 respectively. 14.2 The AO equally went wrong in treating a sum of Rs.55,368/-, Rs.86,802/and Rs.57,819/- being the interest from SB A/C No.11547 of P.Krishnan with Bank of Baroda, Kulumani branch as undisclosed income of the assessee for the A.Yrs:1994-95, 1995-96 and 1997-98 respectively. 14.3 The AO erred in treating the sum of Rs.25,00,00/-, (Rs.15,00,000 plus Rs.10,00,000/-) in SB A/C No.11821 of K.Ramakrishnan with Bank of Baroda, Kulumani bran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gundrum Rs. 7 ,21,200 E. Land at Vadagaunchi Village by Selvi Kanagavalli &5 others Rs.13,21,470 F. Flat at No.9/4, Nehru Nagar, Adayar by Chittibabu Rs. 9,05,400 G.Purchase of flat No.9/3, Nehru Nagar, Adayar by Malliga Krishnan Rs.6,59,900 Purchase of agricultural land of 1 Acre &80 cents at Kulumani Village by Poongundrum Rs.90,000 Total 18.2 The AO went wrong in estimating and treating various sums as property income from the property at Fern hill, Kodaikanal; property at Bankers Colony, Kumaran Nagar, Tiruchy, and the two flats at Nehru Nagar, Adyar as that of the assessee. 19. Investment in Residential house at Kulumani Nagar Trichy Rs.11,94,000 The AO went wrong in treating the investment in the residential house at Kulumani Nagar Trichy of Rs.11.94,000 as undisclosed income of the assessee: 20. Unexplained investment in Buses 20.1 The AO erred in treating the investment in many buses as unexplained investment of the assessee and treating the income therefrom as the unexplained income of the assessee: 20.2 The AO went wrong in estimating huge figures as income from operation of buses and treating it as unexplained income of the assessee: A.Yr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... undisclosed income ignoring the fact that this source of income had already been disclosed to the department. A.Y: Amount 1992 - 93 Rs.24,600 1993 - 94 Rs.36,000 1994- 95 Rs.41,500 1995 - 96 Rs,53,000 1996 - 97 Rs.59,500 1997- 98 Rs.10,000 Total Rs. 2,24,600 28. Fixation of agricultural income of assessee 28.1 The AO went wrong in either not giving credit for agricultural income earned by the appellant during the assessment years 1987-88, 1988-89 and 1989-90. 28.2 The AO went wrong in observing that no evidence had been let it to prove the earning of agricultural income. 28.3 The AO erred in fixing the agricultural income of the following years at a very low figure; A.Y: Amount 1991-92 Rs.20,760 1992-93 Rs.24,220 1993-94 Rs.27,680 1994-95 Rs.41,500 1995-96 Rs.34,600 1996-97 Rs.38,060 1997-98 (upto 17.7.96) Rs.17,300 29. Block assessment should be confined to search materials 29.1 The AO failed to note that in the proceedings for block assessment only the materials seized at the time of search and the materials collected in relation thereto alone could be made use of and not any other materials. The AO went wrong in using all the materi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted. It is further ordered to destroy the M.O.1 to M.O.33 after the appeal time. Arguments of Ld. AR 5.1 The assessee has filed detailed written submissions on 28.11.2019. The paper-books containing various documents, submissions, case laws etc. have also been filed before us. The first and foremost argument of Ld. AR is that Ld. AO has failed to look into the additional evidences as filed by the assessee before Tribunal despite specific directions of Hon'ble High Court. The Ld. AR drew attention to the fact that the income of the assessee has been determined exactly at the same figure in all the three assessments as framed by Ld. AO. The Ld. AR submitted that Ld. AO has merely confirmed the additions made in the first block assessment order dated 31.07.1997. For the same, Ld. AR drew attention to the impugned order wherein all the additions have been reconfirmed with similar observations. The Ld. AR stated that Ld. AO has not attempted anything on the additional evidences and repeated the assessment by observing that the assessee did not produce any corroborative evidences in support of the additional evidences. The Ld. AR submitted that the exception taken by Hon'ble High Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... absence of anything shown to the contrary, there seems to be no reason as to why these duly proved evidence should not be relied upon by the Court. The High Court has specifically appraised the findings given by the CBI Court in this regard. The relationship between the Indian Bank and the Respondent is very much clear by the evidence led during the criminal proceedings. The Executive Director of the Bank has specifically spoken about the role of the Respondent as a broker specifically engaged by the Bank for the purchase of securities and that the Bank has included the interest money too in the consideration paid, for the purpose of taking demand drafts in favour of PSUs. Further, the evidence led by other bank officials points out that the price of securities itself were fixed by the bank authorities and as per their directions the Respondent had purchased the securities at the market price and the differential amount was directed to be used for taking demand drafts from the bank itself for paying additional interest to the PSUs. Further, the letter dated 25.03.1994 by the Bank wherein the Bank had acknowledged the receipt of Demand Drafts taken by the Respondent gives an unblurr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plied for the assessment and the disposal of the appeal thereto to be in accordance with law as directed by the Hon'ble High Court as well as by this Hon'ble Tribunal. (d) As these submissions made as above are in furtherance and complimentary to the grounds of appeal raised in the appeal by me as well as the Gist of submissions filed before this Hon'ble Tribunal this appeal may be disposed accordingly. Arguments of Revenue 6.1 The Ld. CIT-DR has also filed detailed written submissions of 52 pages supporting the assessment order. In these submissions, Ld. CITDR has submitted that Ld. AO has arrived at conclusion that the documents submitted by the assessee do not have any evidentiary value to support the claim made by the assessee that the cash found was sourced out of agricultural income. The Ld. CIT-DR further submitted that the additional evidences produced before Tribunal were given due consideration while passing the assessment order. 6.2 The Ld. CIT-DR further submitted that the proceedings of Special Court and Income Tax proceedings are on different footings. Under certain circumstances, the decision of civil court is also binding on criminal court although converse is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to consider the documents filed as additional evidences by the assessee and pass fresh order. 9. Pursuant to the same, another assessment was framed by Ld. AO on 28.03.2013 determining exactly the same income as determined in order dated 31-07-1997 which was again subject matter of challenge before Tribunal vide IT(SS)A No. 12/Mds/2013 order dated 19.06.2015. It was admitted position therein that Ld. AO did not consider the additional evidences filed by the assessee despite specific directions of Hon'ble High Court. Accordingly, the Tribunal held that by not considering the additional evidences, there was clear violation of the direction issued by the Hon'ble High Court. Since the directions of Hon'ble High Court was not followed, the matter was against sent back by Tribunal to Ld. AO for fresh consideration. 10. In the third round, another assessment order has been passed on 31-12-2015. Upon perusal of assessment order, it would appear that though Ld. AO has called for additional evidences as well as requisite details from the assessee, however, the impugned assessment is primarily guided by original assessment framed on 31-07-1997 which is also evident from the fact that income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eated all those accounts as relating to the assessee. The bench confirmed the addition of Rs. 49.90 Lacs on the ground that the assessee took different stands at different points of time by introducing certain persons to the scene. The explanations were self-serving explanations only. The addition of consequential interest of Rs. 0.26 Lacs was also confirmed. The addition of deposits held in the name Shri Govindarajan and Shri A.G. Chittibabu for Rs. 34.34 Lacs was deleted since AO did not establish real nexus of the assessee with those deposits. Both of them explained the sources available in their hands in the form of agricultural income. The addition of deposits held in the name Shri P. Krishnan for Rs. 53.86 Lacs was deleted since the same was found to be made on mere suspicion. The addition of deposits held in the name Shri K. Ramakrishnan for Rs. 54.93 Lacs also deleted since that person had positively confirmed the ownership of the deposits and explained the source of such deposits. The addition of deposits held in the other Savings Bank Accounts for Rs. 32.75 Lacs was also deleted since the explanation of the assessee was found to be bona-fide. The addition of deposit of Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee's submissions as well as evidences filed by the assessee before the bench. The same documents were placed by the assessee before Ld. AO in the present proceedings. However, Ld. AO rejected the same and chose to take the same stand as taken in original assessment order. Aggrieved, the assessee is before us with similar arguments and evidences. Under these circumstances, the bench concurs with the findings of Tribunal in first round and considers it fit to adopt the same adjudication in the present proceedings. In other words, the income of the assessee stand reduced to Rs. 64,98,721/- as adjudicated by Tribunal in the first round. All the grounds of appeal stand disposed-off accordingly. 13. Our aforesaid adjudication is duly supported by the order of Hon'ble Special Court acquitting the assessee and all the other accused persons. The observations of Hon'ble Supreme Court in DCIT vs. Jayachandran & Others (supra) duly support the argument of Ld. AR that the findings arrived at by the criminal court could be taken into consideration while deciding the question as to the relationship between the parties to the case. When the findings are arrived by a criminal court on the ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee 12,47,380 12,47,380 NIL 344 & 345 YES 17 Deposit in the name of Master Chiranjeevi 29,392 29,392 NIL 345 YES 18 Immovable prop in the name of other persons Investment in the name of Malliga Krishnan and her minor children Sudarkodi & Chiranjeevi & others in the house property at Fern-hill, Kodaikanal 22,01,037 22,01,037 345-348 YES Investment in others name in the house property at Kumaran Nagar, Trichy 24,34,800 24,34,800 NIL 345-348 YES Investment in others name in the land at Manikandam Panchayat 8,75,150 8,75,150 NIL 345-348 YES Investment in others name in the plots at Anna Nagar, Trichy 7,21,200 7,21,200 NIL YES Investment in others name in land at Vadagaunji village 13,21,470 13,21,470 NIL YES Investment in others name in the flat at Nehru Nagar, Adyar 9,05,400 9,05,400 NIL YES Investment in others name in flat at Nehru Nagar, Adyar 6,59,900 6,59,900 NIL YES Investment in the name of others on the agricultural land in Wuraiyur 90,000 90,000 NIL 19 Improvement of residential house a ..... 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