Dr. K.P. Vishwanatha Prabhu, Mangalore v. ACIT, Mangalore

CO 19/BANG/2009 | misc
Pronouncement Date: 23-02-2012 | Result: Dismissed

Appeal Details

RSA Number 1921123 RSA 2009
Assessee PAN ADVPK6266E
Bench Bangalore
Appeal Number CO 19/BANG/2009
Duration Of Justice 2 year(s) 8 month(s) 29 day(s)
Appellant Dr. K.P. Vishwanatha Prabhu, Mangalore
Respondent ACIT, Mangalore
Appeal Type Cross Objection
Pronouncement Date 23-02-2012
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 23-02-2012
Date Of Final Hearing 23-02-2012
Next Hearing Date 23-02-2012
Assessment Year misc
Appeal Filed On 25-05-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI N.K. SAINI ACCOUNTANT MEMBER AND SHRI GEORGE GEORGE K. JUDICIAL MEMBER IT(SS)A NO. 22/BANG/2008 ASSESSMENT YEAR : BLOCK PERIOD 01.04.1988 TO 04.02 .1999 DR. K.P. VISHWANATH PRABHU POORNIMA PINTO LANE BEJAI MANGALORE 575 004. PAN : ADVPK 6266E VS. THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 1(1) MANGALORE. APPELLANT RESPONDENT IT(SS)A NO. 27/BANG/2009 ASSESSMENT YEAR : BLOCK PERIOD 01.04.1988 TO 04.02 .1999 THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 1(1) MANGALORE. VS. DR. K.P. VISHWANATH PRABHU POORNIMA PINTO LANE BEJAI MANGALORE 575 004. PAN : ADVPK 6266E APPELLANT RESPONDENT CO NO.19/BANG/2009 [IN IT(SS)A NO. 27/BANG/2009] ASSESSMENT YEAR : BLOCK PERIOD 01.04.1988 TO 04.02 .1999 DR. K.P. VISHWANATH PRABHU POORNIMA PINTO LANE BEJAI MANGALORE 575 004. PAN : ADVPK 6266E VS. THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 1(1) MANGALORE. CROSS OBJECTOR APPELLANT IN APPEAL IT(SS)A NOS. 22/B/08 & 27/B/09 & CO NO.19/B/09 PAGE 2 OF 12 APPELLANT BY : MRS. SHEETAL BORKAR ADVOCATE RESPONDENT BY : SHRI FARAHAT HUSSAIN QURESHI CIT-II(DR) DATE OF HEARING : 23.02.2012 DATE OF PRONOUNCEMENT : 23.02.2012 O R D E R PER BENCH THE APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 29.12.2007 OF THE CIT(APPEALS) MANGALORE WHILE TH E APPEAL BY THE DEPARTMENT AND CROSS OBJECTION BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER DATED 27.02.2009 OF THE CIT(APPEALS) MANGALO RE. SINCE THESE APPEALS AND THE CROSS OBJECTION WERE HEARD TOGETHER SO THESE ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. FIRST WE WILL DEAL WITH THE APPEAL OF THE ASSESS EE IN IT(SS)A NO. 22/BANG/08 FOR THE BLOCK PERIOD 01.04.1988 TO 04.02 .1999. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: I. THE ORDER OF THE LEARNED COMMISSIONER OF INCOM E TAX (APPEALS) MANGALORE IS OPPOSED TO LAW AND FACTS OF THE CASE. II. A) THE LEARNED COMMISSIONER OF INCOME TAX (APPE ALS) MANGALORE IS ERRED IN STATING THAT NO EVIDENCE IN SUPPORT OF THE CLAIM OF FIXED DEPOSITS AMOUNTING TO RS.L0 23 167/- EXISTED AS ON 31.3.1988 WHICH ARE FORMING PART OF INCOME DECL ARED FOR THE BLOCK PERIOD AMOUNTING TO RS.92 63 348/-; B) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) MANGALORE OVERLOOKED THE FACT THAT SINCE THE MATTE RS PERTAINS TO 1988 AND IT IS NOT POSSIBLE FOR THE APPELLANT TO CO LLECT THE PROOF REGARDING UTILIZATION OF BANK DEPOSITS HELD AS ON 3 1.3.1988. HE OUGHT TO HAVE TELESCOPED THE OPENING BALANCE. IT(SS)A NOS. 22/B/08 & 27/B/09 & CO NO.19/B/09 PAGE 3 OF 12 III. A) THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) MANGALORE HAS ERRED IN LAW IN NOT REDUCING AN INCOM E OF RS.L 88 47 990/- BEING INCOME DECLARED DURING THE SURVEY UNDER SECTION 133A FROM THE INCOME OF THE BLOCK PERIOD A S PER THE DIRECTION OF THE INCOME TAX APPELLATE TRIBUNAL AT P AGE 4 OF ORDER DATED 16.11.2006 IN M.P.NO.124/BANG/2006. B) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) MANGALORE HAS FAILED TO APPRECIATE THE FACT THAT S URVEY OPERATION UNDER SECTION 133A AND THE SEARCH OPERATION UNDER S ECTION 132 OF THE INCOME TAX ACT ARE TWO DIFFERENT PROCEEDINGS . HE IS NOT JUSTIFIED IN STATING THAT THE APPELLANT HAS NOT FI LED ANY RETURN IN RESPONSE TO NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT. EVEN IF THE APPELLANT HAS WRONGLY INTERPRETED ANY STATU TORY PROVISIONS IT IS THE DUTY OF THE ASSESSING OFFICER TO PROTECT THE REVENUE BY MAKING PROTECTIVE ASSESSMENTS FOR THE BLOCK ASSESSM ENT YEARS. C) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) MANGALORE HAS FAILED TO APPRECIATE THE FACT THAT B ASIC PRINCIPLES OF TAXATION IS ALSO BINDING ON THE ASSESSING AUTHOR ITIES. IV. THE APPELLANT CRAVES LEAVE TO ADD AMEND OR AL TER ANY OF THE FORGOING GROUNDS. V. FOR THESE AND ANY OTHER GROUNDS THAT MAY BE URG ED BEFORE THE HON'BLE ITAT IT IS PRAYED THAT THE HON'BLE ITA T MAY ALLOW THE APPEAL WITH COST. 3. GROUND NOS. I IV & V ARE GENERAL IN NATURE SO DO NOT REQUIRE ANY COMMENTS ON OUR PART. THE GRIEVANCE OF THE ASSESSE E VIDE GROUND II (A) & (B) RELATES TO THE ADDITION OF RS.10 23 167. THE F ACTS RELATING TO THIS ISSUE IN BRIEF ARE THAT THE ASSESSEE IS A DOCTOR AND RUNS A CLINIC BY NAME PRABHUS CLINIC AND ALSO A NURSING HOME BY NAME K.P. MEMORIAL HOSPITAL AT KALASA CHIKMAGALUR DISTRICT. INITIALLY A SURVE Y WAS CONDUCTED ON THE BUSINESS PREMISES OF THE ASSESSEE ON 12.10.1999 I T WAS NOTICED FROM TDS RETURNS AND FORM 27 FILED BY THE BANKS THAT THE ASSESSEE WAS HAVING A LARGE NUMBER OF FIXED DEPOSITS. DURING THE COURSE OF SURVEY CERTAIN FIXED IT(SS)A NOS. 22/B/08 & 27/B/09 & CO NO.19/B/09 PAGE 4 OF 12 DEPOSITS WERE FOUND AND ASSESSEE OFFERED THAT HE WO ULD FILE RETURNS BY DECLARING SUCH FIXED DEPOSITS IN HIS NAME OR IN THE NAME OF HIS WIFE AS UNDISCLOSED INCOME. SUBSEQUENTLY A SEARCH WAS CON DUCTED AT THE BUSINESS AND RESIDENTIAL PREMISES OF THE ASSESSEE O N 04.02.1999. AS A CONSEQUENCE TO SEARCH A NOTICE U/S. 158BC OF THE I NCOME-TAX ACT 1961 [HEREINAFTER REFERRED TO AS THE ACT IN SHORT] WA S ISSUED ON 17.03.99 AND THE ASSESSEE FILED THE RETURN OF INCOME ON 29.04.19 99 DISCLOSING UNDISCLOSED INCOME OF RS.1 66 66 490. HOWEVER THE ASSESSMENT WAS FRAMED U/S. 158BC OF THE ACT ON 26.2.2001 BY MAKING ADDITIONS OF RS.91 62 048. IN THE SAID ADDITIONS ONE OF THE AD DITION AMOUNTING TO RS.19 24 190 WAS ON ACCOUNT OF UNACCOUNTED DEPOSITS THE SAID ADDITION WAS CONFIRMED BY THE LD. CIT(APPEALS) BY HIS ORDER DATED 25.06.2004. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE TRIBUNAL IN IT(SS)A NO.128/B/04 WHICH WAS DECIDED VIDE ORDER DATED 30. 12.2005 AND THE APPEAL OF THE ASSESSEE WAS PARTLY ALLOWED. THE AS SESSEE AGAINST THE SAID ORDER FILED MISCELLANEOUS PETITION I.E. M.P. 124/B /06 WHICH WAS DECIDED VIDE ORDER DATED 16.11.2006 AND CERTAIN MODIFICATIO NS WERE MADE IN THE EARLIER DIRECTIONS GIVEN IN PARA 56 OF THE ORDER DA TED 30.12.2005 THE SAID MODIFICATIONS READ AS UNDER:- THE AO WILL VERIFY THAT INVESTMENT IN FIXED DEPOS ITS TO THE EXTENT OF RS.92 63 348/- AS MENTIONED IN THE CH ART FILED FOR THE PURPOSE OF COMPUTING THE UNDISCLOSED INCOME INC LUDES ALL THE DEPOSITS TAKEN DURING THE BLOCK PERIOD AND DOES NOT EXCLUDE DEPOSITS IF ANY HELD ON OR BEFORE 31.3.88 AND RENEW ED DURING THE BLOCK PERIOD THEN THE CLOSING BALANCE OF FIXED DEP OSITS AS ON 31.3.88 WILL BE CONSIDERED TO BE AVAILABLE AGAINST THE ADDITIONS REFERRED TO IN PARA 56 OF THE ORDER AND FOR EXPLAIN ING UNACCOUNTED FIXED DEPOSITS OF RS.16 80 146/-. IT(SS)A NOS. 22/B/08 & 27/B/09 & CO NO.19/B/09 PAGE 5 OF 12 4. THE ASSESSING OFFICER WHILE GIVING EFFECT TO THE AFORESAID ORDER DATED 16.11.2006 OF THE ITAT PASSED AN ORDER DATED 04.05.2007 AND MADE THE ADDITION OF RS.10 23 167 BY OBSERVING THAT THE ASSESSEE HAD ONLY FURNISHED PROOF FOR DEPOSIT HOLDINGS AS ON 31.03.19 88 AND THAT MERELY HAD REITERATED HIS STAND THAT THE SAME HAD BEEN RENEWED AND INCLUDED IN THE INCOME DECLARED FOR THE BLOCK PERIOD AMOUNTING TO R S.92 63 348. 5. THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A PPEALS) WHO CONFIRMED THE ACTION OF THE ASSESSING OFFICER BY OB SERVING THAT THE ASSESSEE COULD NOT PRODUCE EVIDENCE IN SUPPORT OF T HE CONTENTION AND THE REASON GIVEN BY THE ASSESSEE FOR NOT FURNISHING ANY EVIDENCE IN THIS REGARD TO THE AO WAS THAT SINCE THE MATTER PERTAINED TO 19 88 AND IT WAS NOT POSSIBLE FOR THE ASSESSEE TO COLLECT THE PROOF REGA RDING THE UTILIZATION OF BANK DEPOSITS HELD AS ON 31.03.1988 FOR RS.10 23 16 7. THEREFORE THE AO DID NOT ALLOW ANY RELIEF TO THE ASSESSEE. THE LD. CIT(A) POINTED OUT THAT THE AO IN HIS ORDER DATED 04.05.2007 HAD MENTIONED THAT THE ASSESSEE IN HIS LETTER DATED 05.01.2000 HAD CLEARLY MENTIONED THAT THOSE DEPOSITS OF RS.92 63 348 WERE FRESH DEPOSITS FROM THE ACCOUNTIN G YEAR 1988-89 TO 1998-99. HE THEREFORE FOUND NO INFIRMITY IN THE OR DER OF THE AO AND CONFIRMED THE ADDITION MADE BY THE AO FOR A SUM OF RS.10 23 167. 6. NOW THE ASSESSEE IS IN APPEAL. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORIT IES BELOW AND FURTHER SUBMITTED THAT THE ASSESSEE WAS HAVING FIXED DEPOSI TS OF RS.10 23 167 AS ON 31.3.1988 THOSE FIXED DEPOSITS WERE DECLARED IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/S. 158BC OF THE ACT A ND WERE PART OF IT(SS)A NOS. 22/B/08 & 27/B/09 & CO NO.19/B/09 PAGE 6 OF 12 RS.92 63 348. THEREFORE BY MAKING THIS ADDITION A DOUBLE TAXATION HAS BEEN DONE SO THIS ADDITION IS NOT MAINTAINABLE. 7. IN HIS RIVAL SUBMISSIONS THE LD. CIT(DR) STRONG LY SUPPORTED THE ORDER OF THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT THE ASSESSEE DID NOT FURNISH ANY EVIDENCE BEFORE THE AO IN SUPPORT OF HI S CONTENTION THAT THIS AMOUNT WAS OFFERED FOR TAXATION IN RETURN OF INCOME FILED FOR THE BLOCK PERIOD THEREFORE IT WAS NOT A DOUBLE ADDITION AND THE LD. CIT(APPEALS) WAS JUSTIFIED IN CONFIRMING THE ADDITION MADE BY THE AO . 8. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IN THE INSTANT CASE IT IS NOT IN DISPUTE THAT THE CLAIM OF THE ASSESSEE FROM THE VERY BEGINNING WAS THAT FIXED DEPOSITS OF RS.10 23 167 WERE EXISTI NG AS ON 31.03.1988 I.E. THE DATE PRIOR TO THE BLOCK PERIOD UNDER CONS IDERATION AND CONSTITUTED A PART OF RS.92 63 348 DECLARED IN THE RETURN OF UNDI SCLOSED INCOME FILED FOR THE BLOCK PERIOD UNDER CONSIDERATION. IN THE INST ANT CASE IT IS NOTICED THAT IN THE ORDER DATED 04.05.2007 WHICH WAS PASSED BY T HE AO FOR GIVING EFFECT TO THE ORDER OF ITAT DATED 16.11.2006 IN M.P. NO.12 4/BANG/06 THE ASSESSING OFFICER MENTIONED AS UNDER: THE ASSESSEE HAS ONLY FURNISHED PROOF FOR DEPOSIT HOLDINGS AS ON 31/3/1988 AND HAS MERELY REITERATED HIS STAND THAT THE SAME HAVE BEEN RENEWED AND INCLUDED IN THE INCOME DECLARED FO R THE BLOCK PERIOD AMOUNTING TO RS.92 63 348/-. 9. FROM THE ABOVE NOTING OF THE AO AT PAGE NO.2 OF THE ORDER DATED 04.05.2007 IT APPEARS THAT THE ASSESSEE HAD FURNIS HED PROOF FOR THE DEPOSIT HOLDINGS AS ON 31.03.1988. HOWEVER NOTHING IS BROUGHT ON RECORD IT(SS)A NOS. 22/B/08 & 27/B/09 & CO NO.19/B/09 PAGE 7 OF 12 BY THE AO THAT THE FIXED DEPOSITS AGGREGATING TO RS .10 23 167.52 WAS NOT PART OF THOSE DEPOSIT HOLDINGS. IT IS ALSO NOTICED FROM THE ASSESSMENT ORDER DATED 26.02.2001 THAT THE AO AT PAGE 5 TREATED THE INCOME OF RS.19 24 190 ON ACCOUNT OF DEPOSITS AS UNACCOUNTED DEPOSITS FOR THE BLOCK PERIOD THE DETAILS OF THE SAID DEPOSITS WAS AS UND ER: SL NO. NAME OF THE BANK DATE OF DEPOSIT DEPOSIT AMOUNT 1 KARNATAKA BANK KALASA (CD A/C.) 05.04.1988 05.08.1988 RS. 25 000 RS. 17 190 2 KARNATAKA BANK (FD A/C.) RS.15 92 000 3 CANARA BANK KALASA (RD) 17.4.98 TO 16.1.99 RS. 1 00 000 4 CANARA BANK BALEHOLE 25.04.1998 22.06.1998 RS. 10 000 RS. 20 000 5 SYNDICATE BANK KUDREMUKH (CD) 20.4.98 TO 22.1.99 RS. 1 00 000 6 VIJAYA BANK MAGUNDI 10.12.1998 24.12.1998 31.12.1998 RS. 20 000 RS. 20 000 RS. 20 000 TOTAL RS.19 24 190 10. FROM THE ABOVE TABLE IT IS NOTICED THAT THE A O HAD NOT MENTIONED THE DATE OF DEPOSIT AMOUNTING TO RS.15 92 000 WITH KARNATAKA BANK AT THE SAME TIME IT IS NOT CLEAR AS TO WHETHER THE DEPOSI TS OF RS.10 23 167 HELD BY THE ASSESSEE AS ON 31.3.1988 FORMED PART OF THE AFORESAID DEPOSIT OF RS.15 92 000 BECAUSE THE AO HAS NOT THROWN ANY LIG HT ON THIS FACT INSPITE OF THE CONTENTION OF THE ASSESSEE THAT THE DEPOSITS WERE RENEWED AND FORMED PART OF RS.92 63 348. IN THE INSTANT CASE THE LD. CIT(APPEALS) CONFIRMED THE ACTION OF THE AO BY OBSERVING THAT TH E ASSESSEE HAD NOT PRODUCED ANY EVIDENCE IN SUPPORT OF THE CLAIM THAT FIXED DEPOSIT OF RS.10 23 167 EXISTING AS ON 31.3.1988 WAS FORMING P ART OF INCOME DECLARED FOR THE BLOCK PERIOD. THE AFORESAID OBSER VATION OF THE LD. CIT(A) IS CONTRARY TO THE OBSERVATIONS OF THE AO MADE AT PAGE 2 OF THE ORDER DATED IT(SS)A NOS. 22/B/08 & 27/B/09 & CO NO.19/B/09 PAGE 8 OF 12 04.05.2007 WHEREIN IT WAS MENTIONED THAT THE ASSESS EE HAD FURNISHED PROOF FOR DEPOSIT HOLDINGS AS ON 31.03.1988 SO ALL THE FACTS RELATING TO THE ISSUE UNDER CONSIDERATION ARE NOT BROUGHT ON RECORD THEREFORE WE DEEM IT APPROPRIATE TO SET ASIDE THE ORDER PASSED BY THE LD . CIT(APPEALS) AND REMAND THIS ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER TO BE DECIDED AFRESH IN ACCORDANCE WITH LAW AFTER CONSIDERING AL L THE RELEVANT MATERIAL AVAILABLE ON RECORD AND IF IT IS FOUND THAT THE PRO OF FOR DEPOSIT HOLDINGS AS ON 31.03.1988 AMOUNTING TO RS.92 63 348 FURNISHED B Y THE ASSESSEE ALSO INCLUDED THE BANK DEPOSITS OF RS.10 23 167 THEN IT CANNOT BE ADDED AGAIN BY CONSIDERING THE SAME AS UNDISCLOSED INCOME OF TH E ASSESSEE. ACCORDINGLY THIS ISSUE IS SET ASIDE TO THE FILE OF ASSESSING OFFICER AND THE ASSESSEE IS FREE TO ADDUCE ANY EVIDENCE BEFORE THE AO IN SUPPORT OF HIS CLAIM RELATING TO THIS ADDITION. 11. IN THE NEXT ISSUE VIDE GROUND III (A) & (B) T HE PRAYER OF THE ASSESSEE IS TO REDUCE HIS INCOME BY RS.1 88 47 990 BEING INCOME DECLARED DURING THE SURVEY U/S. 133A FROM THE INCOME OF THE BLOCK PERIO D AS PER THE DIRECTIONS OF THE ITAT VIDE ORDER DATED 16.11.2006 IN M.P. NO. 124/BANG/2006. THE FACTS RELATED TO THIS ISSUE IN BRIEF ARE THAT THE L D. CIT(APPEALS) WROTE A LETTER DATED 13.11.2007 TO THE ASSESSING OFFICER INFORMING THAT THE ITAT VIDE ORDER DATED 16.11.2006 DIRECTED THAT THE ADDITIONS TO THE RETURNED INCOME FOR THE PURPOSE OF COMPUTING UNDISCLOSED INCOME FOR THE BLOCK PERIOD COULD NOT BE MADE IN RESPECT OF MATERIAL FOUND DURING THE SURVEY. THE LD. CIT(A) ASKED THE AO TO SUBMIT A REPORT AFTER TAKING INTO C ONSIDERATION THE CONTENTION OF THE ASSESSEE THAT IN THE SURVEY OPERA TION CONDUCTED AT THE BUSINESS PREMISES OF THE ASSESSEE ON 28.12.1988 RE CEIPTS OF FIXED IT(SS)A NOS. 22/B/08 & 27/B/09 & CO NO.19/B/09 PAGE 9 OF 12 DEPOSITS FOR RS.1 88 47 990 WERE FOUND AND ACCOUNTE D. THE AO SUBMITTED REMAND REPORT DATED 11.12.2007 AND STATED IN PARA 3 OF THE SAID REPORT THAT THE ASSESSEE MADE A DECLARATION RELATING TO THE AMO UNT OF DEPOSITS MADE BY HIM IN HIS NAME AND IN THE NAME OF HIS WIFE ON 2 5.01.1999 FOR VARIOUS YEARS AS UNDER:- A.Y. AMOUNT OF DECLARATION OF INCOME (RS.) 1989-90 6 50 665 1990-91 10 24 856 1991-92 13 23 709 1992-93 17 22 417 1993-94 11 46 089 1994-95 12 47 719 1995-96 27 81 986 1996-97 26 35 811 1997-98 32 67 852 1998-99 30 46 886 TOTAL 1 88 47 990 12. THE LD. CIT(APPEALS) ON THE BASIS OF THE AFORES AID REPORT OBSERVED THAT THOUGH THE ASSESSEE NO DOUBT FOLLOWING THE SU RVEY U/S. 133A HAD DISCLOSED INCOME OF RS.1.88 CRORE BUT THE ASSESSEE HIMSELF OPTED TO INCLUDE THIS INCOME IN THE RETURN OF INCOME FOR THE BLOCK PERIOD FILED U/S. 158BC OF THE ACT. THE LD. CIT(A) FURTHER OBSERVED THAT THE ASSESSEE HIMSELF CHOSE TO INCLUDE THIS INCOME IN THE RETURN FILED U/S. 158BC AND GAVE IN WRITING THAT IN VIEW OF THE SEARCH WHICH HAD TAK EN PLACE IN HIS CASE INSTEAD OF FILING RETURNS IN RESPONSE TO NOTICE U/S . 148 OF THE ACT SERVED UPON HIM HE WOULD FILE THE RETURN FOR THE BLOCK PE RIOD U/S. 158BC. THE LD. CIT(A) OBSERVED THAT THE ASSESSEE HIMSELF HAD INCLU DED IN THE RETURN OF INCOME THE AMOUNT OF RS.1.88 CRORE DISCLOSED EARLIE R IN SURVEY U/S. 133A OF IT(SS)A NOS. 22/B/08 & 27/B/09 & CO NO.19/B/09 PAGE 10 OF 12 THE ACT THEREFORE THE SAID INCOME CONSTITUTED AS P ART OF THE RETURNED INCOME. ACCORDING TO HIM THIS WAS NOT ADDED BY TH E AO IN THE RETURN OF INCOME AND THEREFORE INCOME AS PER THE BLOCK ASSESS MENT FOLLOWING THE ORDER OF THE CIT(A) MANGALORE AND THE ORDER OF ITA T BANGALORE AND EFFECT GIVEN TO THOSE ORDERS DID NOT INCLUDE ANY INCOME WH ICH WAS DISCLOSED IN SURVEY U/S. 133A WHICH THE AO WOULD HAVE ADDED IN THE RETURNED INCOME. THE LD. CIT(A) HELD THAT IF THIS INCOME WAS EXCLUDE D FROM THE ASSESSED INCOME FOR THE BLOCK PERIOD IT WOULD CREATE A STRA NGE SITUATION THAT TAXABLE RECEIPTS WERE NOT TAXED DUE TO FAULTY INTERPRETATIO N OF THE CLARIFICATION GIVEN BY THE ITAT. 13. NOW THE ASSESSEE IS IN APPEAL. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORIT IES BELOW AND THE LD. CIT(DR) IN HIS RIVAL SUBMISSIONS STRONGLY SUPPORTED THE ORDER PASSED BY THE LD. CIT(A). 14. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IN THE PRESENT CASE THERE IS NO DISPUTE TO THIS FACT THAT A DIREC TION WAS GIVEN BY THE ITAT VIDE ORDER DATED 16.11.06 IN M.P. NO.124/B/06 MOVED BY THE ASSESSEE AGAINST THE ORDER DATED 30.12.2005 PASSED IN ITA NO .128/BANG/2004 THAT THE INCOME DISCLOSED IN SURVEY U/S. 133A WAS NOT T O BE ADDED IN THE INCOME OF THE BLOCK PERIOD. THE LD. CIT(A) IN THE IMPUGNED ORDER AT PARA 4.1.2 CLEARLY STATED THAT THE ASSESSEE HIMSELF HAD INCLUDED A SUM OF RS.1.88 CRORE DISCLOSED EARLIER IN SURVEY U/S. 133A OF THE ACT IN THE RETURN OF INCOME ON THE CONTRARY THE FACT REMAINS THAT TH E ASSESSEE FILED RETURN OF UNDISCLOSED INCOME DECLARING AN INCOME OF RS.1 66 6 6 490. IN OUR OPINION IT(SS)A NOS. 22/B/08 & 27/B/09 & CO NO.19/B/09 PAGE 11 OF 12 IF THE AMOUNT OF RS.1.88 CRORE HAD BEEN DISCLOSED THEN THE INCOME DECLARED BY THE ASSESSEE WOULD HAVE BEEN MORE THAN THE SAID AMOUNT OF RS.1.88 CRORE HOWEVER IN THE PRESENT CASE THE TOT AL INCOME DECLARED BY THE ASSESSEE AS REPORTED BY THE AO WAS RS.1 66 66 4 90. THEREFORE IT IS NOT CLEAR HOW THE LD. CIT(A) OBSERVED THAT THE ASSE SSEE HIMSELF HAD INCLUDED THE AMOUNT OF RS.1.88 CRORE WHICH WAS ALRE ADY DECLARED IN SURVEY U/S. 133A IN THE RETURN OF INCOME. IT IS ALSO NOTI CED FROM PAGE 19 OF THE BLOCK ASSESSMENT ORDER DATED 26.02.2001 PASSED U/S. 158BC OF THE ACT THAT THE AO MADE THE ADDITION OF RS.91 62.048 ONLY THEN HOW THE ASSESSEE HAD RAISED THE GROUND FOR REDUCING THE INC OME OF RS.1 88 47 990 BOTH THE PARTIES DURING THE COURSE OF HEARING WERE UNABLE TO CLARIFY THE ABOVE POSITION. SINCE THE OBSERVATION OF THE LD. C IT(A) IS CONTRARY TO THE FACTS AS WE HAVE ALREADY POINTED OUT WE DEEM IT AP PROPRIATE TO REMAND THIS ISSUE BACK TO THE FILE OF THE AO TO BE ADJUDI CATED AFRESH IN ACCORDANCE WITH LAW AFTER PROVIDING DUE AND REASONABLE OPPORTU NITY OF BEING HEARD TO THE ASSESSEE AND ALSO BY KEEPING IN VIEW THE DIRECT IONS GIVEN BY THE ITAT VIDE ORDER DATED 16.11.2006 PASSED IN M.P. NO.124/B ANG/2006. 15. IN IT(SS)A NO.27/BANG/2009 THE ONLY GRIEVANCE OF THE DEPARTMENT RELATES TO THE DELETION OF PENALTY LEVIED BY THE AO U/S. 158BFA(2) OF THE ACT. SINCE WE HAVE REMANDED THE ISSUES RELATING TO THE QUANTUM ADDITIONS BACK TO THE FILE OF THE AO WHILE DECIDING THE APPEA L OF THE ASSESSEE IN IT(SS)A NO.22/BANG/2008 IN THE FORMER PART OF THIS ORDER AND PENALTY BEING CONSEQUENTIAL TO THE QUANTUM ADDITION THIS ISSUE I S ALSO REMANDED BACK TO THE FILE OF THE AO. IT(SS)A NOS. 22/B/08 & 27/B/09 & CO NO.19/B/09 PAGE 12 OF 12 16. IN THE CO NO.19/B/09 THE ASSESSEE HAS ONLY SUP PORTED THE ORDER OF THE LD. CIT(A) DELETING THE PENALTY LEVIED U/S. 158 BFA(2) OF THE ACT. AS WE HAVE SET ASIDE THE SAID ORDER OF THE LD. CIT(A) AND THE ISSUE WAS REMANDED BACK TO THE AO BECAUSE IT WAS CONSEQUENTIAL IN NATU RE SO THIS CROSS OBJECTION BECOMES INFRUCTUOUS PARTICULARLY WHEN NO RELIEF WAS SOUGHT BY THE ASSESSEE. ACCORDINGLY THE CROSS OBJECTION FIL ED BY THE ASSESSEE IS DISMISSED AS INFRUCTUOUS. 17. IN THE RESULT THE APPEAL BY THE ASSESSEE AS WE LL AS BY THE DEPARTMENT ARE ALLOWED FOR STATISTICAL PURPOSES WH ILE THE CROSS OBJECTION BY THE ASSESSEE IS DISMISSED AS INFRUCTUOUS. PRONOUNCED IN THE OPEN COURT ON THIS 23 RD DAY OF FEBRUARY 2012. SD/- SD/- ( GEORGE GEORGE K. ) ( N.K. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE DATED THE 23 RD FEBRUARY 2012. DS/- COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT BANGALORE.