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TMI Blog2005 (9) TMI 223X X X X Extracts X X X X X X X X Extracts X X X X ..... confirming this illegality. 4, That the learned AO has erred on facts and in law in declining to give us credit for cash in hand through withdrawls from Bank of Baroda, Defence Colony, New Delhi, to the value of Rs. 73,000 which was utilised for depositing in same bank: viz., Bank of Baroda, Defence Colony, New Delhi, Punjab Sind Bank, Hall Bazar, Amritsar and FDR of Rs. 50,000 in the name of Col. Narinder Singh Gill on 14th May, 1992 subsequently and that the order of learned AO is contradictory to the assessment order of wealth-tax passed by the same AO in case of same assessee wherein the availability of this cash in hand and its utilisation was accepted and worthy CIT(A) has erred in confirming the same. 5. That the learned AO has erred on facts and in law in declining to give credit of Rs. 20,000 for deposit in Bank of Baroda, Defence Colony, New Delhi, on 20th May, 1995 against available cash of Rs. 2,39,102 prior to that date." 2. The assessee also filed additional ground of appeal. However, the same was not pressed by the learned counsel for the assessee. The same is accordingly dismissed. 3. Briefly, the facts are that this case belongs to Snowhite group of cases ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... June, 2000 in the assessment order in which it was explained that the assessee along with another person obtained the FDR of Rs. 35,000 each (three in number) for the period of 36 months starting from 11th Sept., 1985. The date of renewal is 11th Sept., 1988. The AO was of the view that since the assessee has declared Rs. 1,05,000 as concealed income for the asst. yr. 1990-91 in the return filed/declared for block period and the assessee is not entitled to file a revised return, therefore, no relief could be granted to the assessee. 4.2 Addition of Rs. 50,000 of FDR purchased on 14th May, 1992 : The assessee filed details before the AO showing availability of the amount and withdrawals available to the assessee. The AO was of the view that the cash left with the assessee was less than Rs. 50,000 and accordingly made the addition. Since the assessee has failed to explain the amount invested in the FDR, therefore, the addition was accordingly made. The AO did not give credit for withdrawals of Rs. 73,000 as the amount was withdrawn separately three years prior to it. 4.3 Cash deposit of Rs. 20,000 with Bank of Baroda on 20th May, 1995: The addition was made treating the afores ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilability of the amount was explained from the material on record as well as the addition of Rs. 20,000 was explained by availability of the funds as was explained before the AO. The learned counsel for the assessee produced sufficient material before the CIT(A) to show that the additions were unjustified and unwarranted. The CIT(A) considering the submissions of the assessee dismissed the appeal of the assessee. The CIT(A) considered that the addition of Rs. 1.29,246 (Rs. 1,05,000 + Rs. 24,246) on account of FDR amount and interest is justified. The CIT(A) observed that there is no provision in law to alter any entry in respect of the figures of returned income shown by the assessee. The CIT(A) observed that he can provide relief to the assessee only if she shows the provisions of law cover her case. The CIT(A) also observed that if she cannot show this, no relief can be given even if the case is fully justified. As regards the decision of the Tribunal, Nagpur Bench in the case Sanmukhdas Wadhwani, the CIT(A) did not follow the order and observed that he respectfully differ with this decision because it goes against the very framework of the Act and goes against the letter and spi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... file revised return, therefore, the authorities below were justified in making the addition against the assessee. 7. We have considered the rival submissions on this issue on ground Nos. 2 and 3. It is admitted fact that earlier appeal of the assessee was decided by the CIT(A) vide order dt. 5th March, 2001 and on this issue restored the matter to the file of the AO for reconsideration in view of the information dt. 14th June, 2000 supplied by the bank. Therefore, the AO was bound to reconsider the issue in the light of the direction of the CIT(A). It is settled law that when matter is remanded to the AO on limited issue, jurisdiction is confined to such issue alone. We are fortified in our view by the following decisions: (1) Sri Vindhya Vasini Prasad Gupta vs. CIT (1990) 186 ITR 253 (All); (2) Kartar Singh vs. CIT (1978) 111 ITR 184 (P H); (3) Katihar Jute Mills (P) Ltd. vs. CIT (1979) 120 ITR 861 (Cal); (4) Pulipati Subbarao Co. vs. AAC (1982) 28 CTR (AP) 290 : (1982) 135 ITR 673 (AP); (5) CIT vs. Hope Textiles Ltd. (1997) 143 CTR (MP) 33 : (1997) 225 ITR 993 (MP); and (6) S.P. Kochhar vs. ITO (1983) 37 CTR (All) 49 : (1984) 145 ITR 255 (All). Therefore, the du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idered identical facts in which return of income for the block period was filed by the assessee on 18th Aug., 1997 declaring an undisclosed income of Rs. 7 lakhs. During the course of assessment proceedings, the assessee submitted that his total undisclosed income for the block period works out to Rs. 6,60,633 comprising of Rs. 3,64,309 on account of balancing figure being excess of assets over liabilities worked out on the basis of entries appearing in the various diaries and a further sum of Rs. 2,89,324 on account of difference in opening capital appearing in the said diaries, which was more than the capital appearing in the regular books as on 1st April, 1990. The working of the undisclosed income at Rs. 6,60,633 furnished by the assessee was verified and found to be correct by the AO. However, he made further addition on the reasons that the income was surrendered by the assessee on this amount in his statement recorded under s. 132(4) as well as on the basis of the admission of the assessee. The additions were challenged which were deleted by the CIT(A). The Revenue challenged the action of the CIT(A) in directing the AO to adopt the undisclosed income of the assessee at Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by holding that the CIT(A) was justified in directing the AO to adopt the undisclosed income finally determined at Rs. 6,60,633 as against the income originally returned by the assessee at Rs. 7 lakhs. The aforesaid decision of the Tribunal, Nagpur Bench is squarely applicable to the case of the assessee and as such the addition of Rs. 1,29,246 (Rs. 1,05,000 + Rs. 24,246) was clearly unjustified even if the assessee has shown it to be undisclosed income in the return filed for the block period. 8. In the aforesaid facts and the circumstances, it is clear that the AO has not followed the order of the CIT(A). If the AO did not agree with the order of the CIT(A) dt. 5th March, 2001, then he has a remedy to agitate his point in appeal before the Tribunal as per law. The AO is subordinate to CIT(A) and once the AO has not challenged the order of the CIT(A) before the Tribunal, the order of the CIT(A) has become final and is binding upon the AO. The AO, therefore, acted against judicial norms. But the matter would not rest here as not only the AO disobeyed the order of the CIT(A) but the CIT(A) also disobeyed the order of . the Tribunal, Nagpur Bench, in the case of Sanmukhdas Wadhwani ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment order of wealth under s. 17(1) of the WT Act, dt. 21st March, 2003 by which the amount of Rs. 2,45,450 was available with the assessee on 31st March, 1992. The same computation is given in the computation of net wealth. 11. On the other hand, the learned Departmental Representative relied upon the orders of the authorities below. 12. On consideration of the above facts, we are of the view that the assessee has explained the source of Rs. 50,000 through which the FDR was purchased. In the wealth-tax order for the asst. yr. 1991-92 net wealth of Rs. 2,45,456 was available to the assessee. Even as per assessment order, the AO has accepted the contention of the assessee about the availability of the amount as per working given on p. 6 of the assessment order. We may remind here that on the principle of telescoping even the funds on which additions have been made are available for the purpose of explaining the aforesaid addition. The assessee from the above facts has been able to prove that sufficient source was available with the assessee with regard to the purchase of the FDR of Rs. 50,000. We accordingly set aside the orders of the authorities below and delete the addition. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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