Bipan Kumar Jain, Ludhiana v. CIT III, Ludhiana

ITA 34/CHANDI/2013 | 2004-2005
Pronouncement Date: 18-10-2013 | Result: Dismissed

Appeal Details

RSA Number 3421514 RSA 2013
Assessee PAN AASPJ3794L
Bench Chandigarh
Appeal Number ITA 34/CHANDI/2013
Duration Of Justice 9 month(s) 9 day(s)
Appellant Bipan Kumar Jain, Ludhiana
Respondent CIT III, Ludhiana
Appeal Type Income Tax Appeal
Pronouncement Date 18-10-2013
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 18-10-2013
Assessment Year 2004-2005
Appeal Filed On 09-01-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A CHANDIGARH BEFORE SHRI T.R. SOOD ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA JUDICIAL MEMBER ITA NO. 34/CHD/2013 ASSESSMENT YEAR : 2004-05 BIPAN KUMAR JAIN VS. CIT-III 94-D LUDHIANA BRS NAGAR LUDHIANA AASPJ 3794 L (APPELLANT) (RESPONDENT) APPELLANT BY WRITTEN SUBMISSIONS THROUGH SHR I RAJIV JAIN RESPONDENT BY: SHRI MANJIT SINGH DATE OF HEARING 20.9.2013 DATE OF PRONOUNCEMENT 18.10.2013 O R D E R PER T.R.SOOD A.M THIS APPEAL IS DIRECTED AGAINST THE ORDER DATED 7.1 1.2012 OF THE LD. CIT-III. LUDHIANA. 2 THIS APPEAL IS LATE BY ONE DAY. THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT FEE FOR TRIBUNAL WAS PAID O N 7.1.2013 AND THE APPEAL WAS HANDED OVER TO HIS ASSISTANT FOR FIL ING THE SAME WITH THE TRIBUNAL. HOWEVER THE ASSISTANT FACED SOME PE RSONAL DIFFICULTY AND FILED THE APPEAL LATE BY ONE DAY. HE MADE A PRA YER THAT DELAY MAY BE CONDONED. ON THE OTHER HAND THE LD. DR FOR THE REVENUE OPPOSED THE SUBMISSIONS OF THE LD. COUNSEL OF THE A SSESSEE. 3 AFTER CONSIDERING THE RIVAL SUBMISSIONS WE ARE SA TISFIED THAT THERE IS SUFFICIENT CAUSE FOR FILING THE APPEAL BY ONE DAY PARTICULARLY AFTER NOTICING THE FACT THAT FEE FOR THE APPEAL HAS BEEN PAID IN THE BANK ON 7.1.2013 THEREFORE WE CONDONE THE DELAY. 4 IN THIS APPEAL THE ASSESSEE HAS RAISED FOLLOWING GROUND: THAT THE LD. CIT HAS ERRED IN INVOKING THE JURISDI CTION U/S 263 THROUGH ENHANCING THE ASSESSMENT BY RS. 29 25 782/- WHICH A CTION IS BEING CHALLENGED ON FACTS AND LAW. 2 5 AFTER HEARING BOTH THE PARTIES WE FIND THAT UPON EXAMINATION OF ASSESSMENT ORDER PASSED U/S 143(3) R.W.S. 254 OF IN COME TAX ACT THE LD. LD. COMMISSIONER WAS OF THE OPINION THAT TH E SAME WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE RE VENUE. IT WAS NOTED THAT SURVEY WAS CONDUCTED IN THE OFFICE-CUM-R ESIDENCE OF THE ASSESSEE ON 15.6.2004. DURING SURVEY IT WAS FOUND THAT THE ASSESSEE WAS INDULGING IN GIVING PROFIT ACCOMMODATI ON ENTRIES IN FORM OF CAPITAL GAIN GIFTS ETC. THIS POSITION WAS ADMITTED IN THE STATEMENT RECORDED DURING SURVEY. THE ASSESSEE HAD FILED A RETURN OF INCOME OF RS. 15 LAKHS. SUBSEQUENTLY THE CASE W AS SELECTED FOR SCRUTINY AND ASSESSMENT WAS COMPLETED U/S 143(3) A T RS. 1 01 25 138/-. THE DETAILS OF THE SAME ARE AS UNDE R: I INCOME FROM THE ISSUE OF CERTIFICATES OF LONG TERM/SHORT TERM CAPITAL GAINS ETC. THIS ADDITION WAS MADE BY THE ASSESSING OFFICER BY APPLYING RATE OF 1% COMMISSION TO TOTAL TURNOVER AS CALCULATED ON THE BASIS OF BANK TRANSACTION. RS. 40 49 820/- II INCOME FROM THE TRADING OF SHARES IN THE HANDS OF THE ASSESSEE BY APPLYING 1% PROFIT ON TOTAL SHARES DEALT WITH RS. 1 71 318/- III UNEXPLAINED INVESTMENT IN THE BUSINESS OF DEALING IN EQUITY SHARES RS. 74 04 000/- FROM THE ABOVE A SUM OF RS. 15 LAKHS ON ACCOUNT OF RETURN FILED WAS REDUCED. THIS ORDER WAS LATER ON RECTIFIED BY FURTHER MAKING ADDITION OF RS. 15 LAKHS ON ACCOUNT OF SURRENDERED INCOME WHICH WAS INADVERTENTLY REDUCED IN THE ASSESSMENT ORDER. THE ASSESSEE HAD FILED AN APPEAL AGAINST THIS ORDER. 6 THE LD. CIT(A) VIDE ORDER DATED 29.9.2008 ALLOWED PART RELIEF ON ACCOUNT OF PROFIT EARNED BY THE ASSESSEE AS COM MISSION ON TOTAL TURNOVER BY DIRECTING THE ASSESSING OFFICER TO APPL Y RATE OF COMMISSION AT 0.5% AGAINST THE RATE OF 1% APPLIED B Y THE ASSESSING OFFICER. THE TURNOVER FIGURE WAS DIRECTED TO BE TA KEN AT RS. 1 09 29 54 158/- ON THE BASIS OF BANK TRANSACTION. HOWEVER THE ADDITION OF RS. 74 04 000/- WHICH WAS MADE BY THE A SSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE BUSINE SS OF TRADING OF SHARES WAS DELETED BY THE LD. CIT(A) ON THE BASIS T HAT THE ASSESSEE HAD SUFFICIENT SOURCES OF FUNDS BECAUSE OF THE ADDI TION MADE ON SIMILAR REASONING IN ASSESSMENT YEAR 2003-04 AND 20 04-05. 3 THEREAFTER THE ASSESSEE AND THE REVENUE FILED APPEA LS BEFORE THE TRIBUNAL. 7 THE TRIBUNAL IN ITA NO. 1094-96 AND 1087-1089/CHD /2008 ADJUDICATED VARIOUS ISSUES. IN NUT SHELL THE TRIBUN AL CONFIRMED THE ACTION OF THE LD. CIT(A) IN RESPECT OF NET PROFIT ON TOTAL TURNOVER AS WELL AS DELETION ON ACCOUNT OF UNEXPLAINED INVESTM ENT IN SHARES. HOWEVER THE ORDER WAS SET ASIDE FOR RE-EXAMINATION FOR THE LIMITED PURPOSE IN RESPECT OF FOLLOWING ISSUES: (A) DEPOSITS RELATING TO ASSESSMENT YEAR 2003-04 OR 2004-05 AND TO RECOMPUTED THE TURNOVER ACCORDINGLY ; (B) THE SOURCE OF PAYMENT MADE BY ASSESSEE TO M/S R . KOHLI & CO. VIS--VIS THE DETAILS OF SHARES ACQUIRED. 8 IT WAS NOTED BY THE LD. COMMISSIONER THAT WHILE G IVING EFFECT TO THE ORDER OF THE TRIBUNAL THE ASSESSING OFFICER HA S ALLOWED A LOSS OF RS. 14 43 658/- FROM SHARE BUSINESS WHICH WAS NOT D IRECTED BY THE TRIBUNAL. HE FURTHER NOTED THAT THE ASSESSING OFFI CER HAS ALSO IGNORED TO ADD THE ITEM OF RS. 14 82 124/- WHICH WA S ORIGINALLY CONFIRMED BY THE LD. CIT(A) IN THE APPELLATE ORDER. ACCORDINGLY A SHOW CAUSE NOTICE DATED 24.5.2012 WAS ISSUED. THE CASE WAS FIXED FOR HEARING ON 5.6.2012 ON WHICH DATE AN ADJOURNMEN T WAS SOUGHT AND THE CASE WAS FIXED ON 5.7.2012. ON THE SAID DA TE AGAIN AN ADJOURNMENT WAS REQUESTED AND THE CASE WAS FIXED FO R 7.8.2012 BUT NOBODY ATTENDED THE PROCEEDINGS. ONE MORE OPPORTUN ITY WAS GIVEN AND THE CASE WAS FIXED ON 7.11.2012 BUT NOBODY ATTE NDED. IN VIEW OF THE FACTS THE LD. COMMISSIONER ENHANCED THE INCO ME OF THE ASSESSEE BY RS. 29 25 782/- VIDE PARA 6 OF THE ORDE R WHICH IS AS UNDER: KEEPING IN VIEW OF THE ABOVE FACTS I CONSIDER THAT THE ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) R.W.S 254 DATED 29 .12.2011 IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INT EREST OF THE REVENUE. THUS THE ASSESSMENT FRAMED BY THE ASSESSING OFFICE R ON 29.12.2011 IS ENHANCED BY RS. 29 25 782/- (RS. 14 43 658/- ON ACC OUNT OF WRONG ALLOWANCE OF TRADING LOSS FROM SHARES PLUS RS. 14 8 2 124/- ON ACCOUNT OF NON-INCLUSION IN THE INCOME ASSESSED BY THE ASSESSI NG OFFICER DESPITE BEING ASSESSED BY LD. CIT(A)). 9 BEFORE US THE CASE WAS FIXED FOR HEARING ON VARI OUS DATES. ON 29.8.2013 THE LD. COUNSEL OF THE ASSESSEE SHRI H.C . JAIN ARGUED THE MATTER IN RESPECT OF SOME PENALTY ORDERS AND LATER ON HE REALIZED 4 THAT HE WAS CARRYING A WRONG FILE AND THEREFORE H E SOUGHT SOMETIME AND THE CASE W AS ADJOURNED TO 17.9.2013. ON THAT D ATE THE CONCERNED DEPARTMENTAL REPRESENTATIVE WAS NOT PRESE NT. BECAUSE OF SOME URGENT MEETING. HOWEVER THE BENCH ASKED THE L D. COUNSEL OF THE ASSESSEE TO PROCEED WITH THE CASE. AFTER INITI AL ARGUMENTS HE ADMITTED THAT AS FAR AS THE ITEM OF LOSS IS CONCERN ED SAME HAS BEEN WRONGLY ALLOWED BY THE ASSESSING OFFICER WHILE GIVI NG EFFECT TO THE ORDER OF THE TRIBUNAL AND THEREFORE TO THIS EXTEN T REVISIONARY ORDER PASSED U/S 263 IS CORRECT. HOWEVER IN RESPECT OF SECOND ITEM IT TRANSPIRED THAT ADDITION HAS TO BE VERIFIED FROM TH E ORDER OF LD. CIT(A) AND THE SAME WAS NOT AVAILABLE WITH HIM AND THEREFORE CASE WAS ADJOURNED TO 20.9.2013. ON 20.9.2013 WRITTEN S UBMISSIONS HAVE BEEN FILED THROUGH SHRI RAJIV KUMAR JAIN WHO IS SON OF THE ASSESSEE AND IT HAS BEEN STATED THAT SINCE THE LD. COUNSEL O F THE ASSESSEE IS NOT WELL THEREFORE THE ISSUE MAY BE DECIDED ON TH E BASIS OF WRITTEN SUBMISSIONS. 10 ON THE OTHER HAND THE LD. DR FOR THE REVENUE S TRONGLY SUPPORTED THE ORDER OF THE LD. COMMISSIONER AND POI NTED OUT THAT THERE WAS NO DIRECTION FOR ALLOWING ANY LOSS BY THE TRIBUNAL AND IN FACT THERE WAS NO SUCH ISSUE ON THE APPEAL BEFORE T HE TRIBUNAL THEREFORE THE ASSESSING OFFICER IS WRONG IN ALLOW ING TRADING LOSS OF RS. 14 43 658/-. FOR SECOND ISSUE HE FILED A COPY OF THE ORDER OF THE LD. CIT(A) DATED 29.9.2008. HE SUBMITTED THAT IN T HE ORIGINAL ASSESSMENT ADDITION OF RS. 1 71 318/- WAS MADE ON A CCOUNT OF ESTIMATED PROFIT @ 1% ON TRADING TURNOVER IN SHARES AMOUNTING TO RS. 1713825/-. HOWEVER WHEN THE ISSUE TRAVELED TO THE LD. CIT(A) IT WAS NOTED THAT THE ADDITION IS REQUIRED TO BE MADE WAS RS. 1482124/- AS PER PAGE 31 32 OF THE APPELLATE ORDER . HE ALSO POINTED OUT THAT THE LD. CIT(A) HAS NOTED THAT THIS MISTAKE HAS ALREADY BEEN RECTIFIED BY THE ASSESSING OFFICER U/S 154 THEREFORE THE ASSESSING OFFICER WAS DUTY BOUND TO ADD THIS IN COME SEPARATELY BECAUSE NO RELIEF WAS GIVEN BY THE TRIBUNAL ON THIS ACCOUNT ALSO. SINCE THE ASSESSING OFFICER HAS FAILED TO ADD THIS ITEM OF INCOME THE ORDER IS CLEARLY ERRONEOUS AND PREJUDICIAL TO T HE INTEREST OF THE REVENUE. 11 HE FURTHER SUBMITTED THAT THIS IS A CASE OF SURV EY IN WHICH INCRIMINATING DOCUMENTS WERE FOUND AT THE PREMISES OF THE ASSESSEE 5 WHICH REVEALED THAT ASSESSEE WAS ENGAGED IN GIVING ACCOMMODATION ENTRIES IN THE FORM OF CAPITAL GAIN AND GIFTS ETC. AND THIS FACT WAS ADMITTED DURING SURVEY. THEREFORE CLEARLY IT IS A CASE WHERE PENALTY PROCEEDINGS WOULD BE ATTRACTED. HE REFERRE D TO THE ORIGINAL ORDER PASSED ON 29.12.2006 WHERE PENALTY PROCEEDING S HAS BEEN CLEARLY INITIATED THEREFORE WHILE GIVING EFFECT T HERE WAS NO REASON FOR NOT INITIATING THE PENALTY PROCEEDINGS. 12 WE HAVE HEARD THE RIVAL SUBMISSIONS CAREFULLY. W RITTEN SUBMISSIONS MADE THROUGH SHRI RAJVI JAIN WHO STATED THAT HE IS THE SON OF THE ASSESSEE SHRI BIMAL KUMAR JAIN HAVE BEE N CONSIDERED. PARA A B & C OF THE WRITTEN SUBMISSIONS ARE DIRECT ED AGAINST THE PROPER OPPORTUNITY NOT BEING PROVIDED TO THE ASSES SEE AND IT HAS BEEN REQUESTED THAT THE MATTER MAY BE REMANDED BACK TO THE FILE OF THE LD. COMMISSIONER. WE HAVE GONE THOUGH THE RECO RD AS WELL AS COPY OF THE NOTING SHEET FILED IN THE PAPER BOOK AN D FIND THAT THE CASE HAS BEEN FIXED ON VARIOUS DATES BUT THE ASSESS EE DID NOT MAKE ANY APPEARANCE OR SIMPLY ADJOURNMENTS WERE SOUGHT. WE ARE ALSO OF THE OPINION THAT IN THIS CASE THE ASSESSING OFFI CER HAS BLATANTLY ALLOWED THE RELIEF. IT IS NOT A CASE OF SIMPLE MIS TAKE BUT IT IS A CASE OF BLUNDER. THEREFORE WE ARE NOT INCLINED TO REST ORE THE MATTER TO THE FILE OF LD. COMMISSIONER. PARA D OF THE WRITTE N SUBMISSIONS DEALS WITH THE ISSUES ON MERIT WHICH READS AS UNDER : D - THE WRITTEN SUBMISSIONS ARE ALSO BEING GIVEN O N MERITS ALSO. THE ISSUES INVOLVED IN THE SHOW CAUSE NOTICE ARE BEING GIVEN AS UNDER. 1 THIS APPEAL AGAINST THE ASSESSMENT ORDER DATED 2 9/12/2011 U/S 143(3) R.W.S.254 OF THE INCOME TAX ACT 1961. THIS ORDER IS PLACED IN THE PAPER BOO K PAGE NO. 22 TO 26 AND THE SAME MAY PLEASE BE REFERRED. IN THIS ASSESSMENT ORD ER THE A.O HAS ALLOWED LOSS FROM TRADING OF SHARES AT RS. 1443658/-. NO OTHER ISSUE IS INVOL VED IN THIS ASSESSMENT ORDER. 2 THE SECOND ISSUE IS OF RS.1482124/- ON ACCOUNT O F TRADING OF SHARES ALREADY ASSESSED AND CONFIRMED BY THE C1T(A) WAS IGNORED BY THE A.O AS MENTIONED BY THE CIT- III IN THE SHOW CAUSE NOTICE. THIS ISSUE OF RS.1482124/- RELATES TO ASSES SMENT ORDER DATED 29/12/2006 WHICH IS BEYOND THE LIMITATION PERIOD. THIS ASSESSMENT ORDER IS NOT UNDER THE PREVIEW OF CIT-LLL AND EVEN THE ORDER OF CIT(A) DATED 29/09/20 08. 3 THE THIRD ISSUE IN THE NOTICE IS REGARDING PENA LTY U/S 271(L)(C) OF THE INCOME TAX ACT 196 WHICH IS ALSO BEYOND THE JURISDICTION OF CIT-LLL. THE PARA WISE REPLY TO EACH ISSUE IS BEING EXPLAINE D AS UNDER. - A YOUR KIND ATTENTION IS INVITED TO THE SHOW CAUSE NOTICE DATED 24/05/2012 ISSUED BY CIT-LLL WHICH IS PLACED IN THE PAPER BOOK PAGE 15 TO 18. IN THIS NOTICE THE CIT HAS GIVEN REFERENCE OF PARA 45 OF IT AT ORDER WHICH IS PLACED IN THE PAPER BOOK PAGE 27 TO 67. THE PARA 45 IS ON PAGE 64. THIS PARA IS ALSO MENTIONED IN THE O RDERS U/S 263. IN THIS CASE THE ITAT 6 HAS SPECIFICALLY RESTORED THE ISSUE BACK TO A.O FOR VERIFICATION OF SOURCE OF PAYMENTS MADE BY THE ASSESSEE AND ALSO THE DETAILS OF SHARES ACQUIRE D. THE A.O DURING THE PROCEEDINGS CALLED THE INFORMATION FROM THE ASSESSEE AND AFTER VERIFICATIO N THE A.O ALLOWED THE LOSS TO THE ASSESSEE AFTER VERIFYING THE COMPLETE DOCUMENTS WHICH WERE P RODUCED BY ASSESSEE TO THE A.O. IT IS ALSO IMPORTANT TO MENTION HERE THAT ORDER OF ITAT WAS PR ONOUNCED ON 22/04/2010 IN THE OPEN COURT. THE A.O HAS ALLOWED THE LOSS OF RS.1443658/- AFTER CONS IDERING ALL THE PLEADINGS AND AFTER VERIFICATION OF DOCUMENTS. IT IS IMPORTANT TO MENTI ON HERE THAT THE A.O HAS TAKEN THE INCOME OF RS.3872988/- AFTER RECTIFYING AND CORRECTING THE FIGURES. THE CIT-LLL HAS NOT DOUBTED THIS FIGURE. B THE CIT-LLL HAS TAKEN THE FIGURE OF RS.1482124/- FROM THE C1T(A) ORDER DATED 29/09/2008 AND THIS FIGURE IS RELATED TO ORDER DATED 29/12/2006. IN THI S ORDER WHICH IS BEYOND THE SCOPE OF CIT-LLL AND EVEN BEYOND THE JURISDICTION OF CIT-LLL. THE CIT HA S NO POWERS TO DIRECT THE A.O U/S 263 TO MAKE / ADD ANY AMOUNT RELATING TO ORDER DATED 29/12/2006. THE CIT HAS ACTED BEYOND HIS JURISDICTION AND ILLEGALLY PASSED THE OR DER U/S 263 ON THIS ISSUE. THE ASSESSEE HAS RIGHTLY CHALLENGED THE ORDER U/S 263 BEFORE THE 1TA T. IT IS REQUESTED AND PRAYED TO ACCEPT THE CONTENTION OF ASSESSEE ON THIS ISSUE. IT IS ALSO IM PORTANT TO MENTION HERE THAT EVEN IN THE ORDER! DATED 29/12/2011 THERE IS NO MENTION OF THIS FIGURE OF RS 1482124/-. THE CIT HAS PASSED THE ORDER U/S 263 AGAINST THE ORDER OF A.O DATED 29/12/2011 A ND IN THIS ORDER NO SUCH FIGURE OF RS. 1482124/- IS BEING REFLECTED. C THE NEXT ISSUE IS PENALTY U/S 271(L)(C) AND CIT HAS NO POWERS TO DIRECT THE A.O FOR GIVING! DIRECTIONS U/S 263. YOUR KIND ATTENTION IS INVITED TO 147-ITR(STATUTES) 1 (SUPRA) DISMISSING THE; SLP FILED BY THE DEPARTMENT AGAINST JUDGMENT DATED 17/0 4/1981 REPORTED IN 133-ITR-7! WHEREBY HIGH COURT HELD THAT CIT IN SUO MOTU REVISION U/S 263 WA S NOT ENTITLED TO SET ASIDE THE; ASSESSMENT ORDER ON THE GROUND THAT THERE WAS NO MENTION OF INITIATI ON OF PENALTY PROCEEDINGS 1 IN THE ASSESSMENT ORDER. | D IT IS REQUESTED AND PRAYED TO ACCEPT THE CONTEN TION OF THE ASSESSEE AND REVISIONARY ORDER PASSED UNDER THE WRONG NOTION OF LAW BE CANCELLED. 13 AS FAR AS FIRST ISSUE IS CONCERNED ORIGINALLY T HE LD. COUNSEL OF THE ASSESSEE ON 17.9.2013 CLEARLY ADMITTED BEFORE U S THAT LOSS HAS BEEN WRONGLY ALLOWED BY THE ASSESSING OFFICER AND T HEREFORE REVISIONARY ORDER WAS CORRECT. NOW IN WRITTEN SUBM ISSIONS IT HAS BEEN STATED THAT THE TRIBUNAL HAS SET ASIDE THE ORD ER OF THE LD. CIT(A) AND VIDE PARA 45 WHICH SPECIFICALLY RESTORED THE ISSUE BACK TO THE ASSESSING OFFICER FOR VERIFICATION OF SOURCES OF PAYMENT AND THE LOSS WAS ALLOWED BY THE ASSESSING OFFICER AFTER VER IFYING THE COMPLETE DOCUMENTS. WE DO NOT FIND ANY FORCE IN TH E SUBMISSIONS. IN THIS CASE A SURVEY WAS CONDUCTED ON THE PREMISES OF THE ASSESSEE. DURING SURVEY IT WAS FOUND THAT THE ASSE SSEE WAS ENGAGED IN GIVING ACCOMMODATION ENTRIES ON ACCOUNT OF LONG TERM/SHORT TERM CAPITAL GAINS AS WELL AS GIFTS AND LOSS ENTRY. FURTHER THE ASSESSEE HAD INDULGED IN SHARE TRADING. ULTIMA TELY ORIGINALLY THE ASSESSMENT WAS COMPLETED BY MAKING AN ADDITION ON ACCOUNT OF ACCOMMODATION ENTRIES AMOUNTING TO RS. 45 49 82 0/-. INCOME FROM TRADING AND SHARES AMOUNTING TO RS. 1 71 318/- WHICH WAS LATER ON RECTIFIED TO RS. 14 82 124/-. IN ADDITION TO THESE ITEMS THE ADDITION WAS MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN 7 BUSINESS OF DEALING IN EQUITY SHARES AT RS. 74 04 0 00/-. THE ADDITION ON ACCOUNT OF UNDISCLOSED INVESTMENT WAS DELETED B Y THE LD. CIT(A) BECAUSE OF THE INVESTMENT BEING AVAILABLE IN EARLIE R YEARS ON ACCOUNT OF ADDITIONS MADE TOWARDS ESTIMATED INCOME AS WELL AS UNDISCLOSED INCOME. THIS ADDITION WAS CHALLENGED B EFORE THE TRIBUNAL BECAUSE FIRST APPELLATE ORDER WAS FOR THRE E YEARS I.E. 2002- 03 2003-04 AND 2004-05. THE TRIBUNAL HAS ADJUDICA TED THIS ISSUE VIDE PARA 45 WHICH READS AS UNDER: 45. WE HAVE HEARD THE RIVAL SUBMISSIONS ON THE SEC OND ISSUE RAISED IN THE PRESENT APPEAL. DURING THE COURSE OF ASSESSMENT PROCEEDING S THE ASSESSING OFFICER HAD SOUGHT INFORMATION FROM M/S R. KOHLI & COMPANY STO CK BROKERS. THE BOOKS OF M/S R. KOHLI & COMPANY REFLECTED PURCHASE AND SALE OF SHAR ES DURING THE ASSESSMENT YEARS 2002-03 TO 2004-05. THE SAID TRANSACTION OF INVEST MENT IN PURCHASE OF SHARES AND PROFITS ARISING ON SALE OF SHARES PURCHASED DURING THE CONFIRMATION WERE FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE ONLY PLEA OF THE ASSESSEE WAS THAT THE AFORESAID INVESTMENTS WEREI MADE OUT OF THE FUNDS WHICH WERE DEPOSITED IN THE VARIOUS BANKS AND THE SHARES WERE PURCHASED ON BEHALF OF THE PERSONS WHO HAD GIVEN THE FUND:;. WE FIND'THE ABOVE EXPLANATION OF THE ASSESSEE TO BE AT VARIANCE WITH HIS AVERMENTS MADE IN THE STATEMENT RECORDED DURING THE COURSE OF SURVEY PROCEEDINGS. T HE EXPLANATION OF THE ASSESSEE IN RESPECT OF THE CARRYING ON THE BUSINESS OF ACCOMMODATION EN TRIES HAS BEEN REFERRED TO BY US IN PARAS HEREINABOVE. WHILE EXPLAINING THE MODUS OPERANDI OF THE BUSINESS CARRIED OUT IT WAS STATED BY THE ASSESSEE THAT CHEQUES / DRAFTS ARE ISSUED FOR T HE PROFITS EARNED BY THE CLIENTS AGAINST CASH RECEIPT FROM THE SAID PARTIES. THE ASSESSEE CL AIMS TO HAVE ISSUED THE PROFIT ENTRIES AGAINST WHICH NO TRANSACTION WAS ENTERED INTO THE S TOCK EXCHANGE AND ONLY PROFIT ON PAPERS WAS PROVIDED TO THE CLIENTS ON COMMISSION BASIS. IN THE ABOVE SAID BACKGROUND WE FIND NO MERIT IN THE CLAIM OF THE ASSESSEE THAT THE PURCHASE OF S HARES REFLECTED IN THE COPY OF ACCOUNT OF M/S R. KOHLI & COMPANY ARE ON ACCOUNT OF THE CASH RECEIVED FROM THE PERSONS TO WHOM PROFITS ENTRIES HAVE BEEN ISSUED. THE ASSESSEE HAS FAILED TO FILE A NY EVIDENCE ON RECORD TO PROVE HIS CONTENTION. THE ASSESSEE FAILED TO FURNISH ANY EVIDENCE BEFORE .HE AUTHORITIES IN RESPECT OF HIS CONTENTION THAT THE AMOUNTS FOR PURCHASE OF SHA RES WERE PAID OUT OF THE FUNDS RECEIVED FROM OTHER PERSONS FOR WHOM SUCH SHARES WERE BEING TRANS ACTED. IN THE ABSENCE OF ANY EVIDENCE TO THE CONTRARY WE UPHOLD THE ORDER OF C IT THAT THE SAID SHARES BEING ACTUALLY PURCHASED EITHER IN THE NAME OF THE ASSESS EE OR IN THE NAMES OF HIS FAMILY MEMBERS IS THE UNACCOUNTED INVESTMENT OF THE ASSESSEE AND THE SAME IS TO BE INCLUDED IN THE HANDS OF THE ASSESSEE. THE SECOND CONTENTION OF THE WAS THAT THE AMOUNTS FOR THE PURCHASE OF SHARES WERE PAID OUT OF THE BANK ACCOUNTS OF THE ASSESSEE HIS MOTHER AND HIS SON WHICH HAS BEEN CONSIDERED WHILE ESTIMATING THE INCOME IN THE HANDS OF ASSESSEE THE AR FOR THE ASSESSEE HAD MADE REFERENCE TO THE EVIDENCE FILED IN THIS RE GARD AT PAGES 225 TO 227 OF THE PAPER BOOK. THE SAID EVIDENCE PLACED BEFORE US HAD NOT BEEN FIL ED BEFORE 'THE ASSESSING OFFICER AND THE SAME WAS NOT CONSIDERED BY THE ASSESSING OFFICER. I H THE INTEREST OF JUSTICE WE DEEM IT FIT TO RESTORE THE ISSUE BACK TO ASSESSING OFFICER TO VERI FY THE SOURCE OF PAYMENTS MADE BY ASSESSEE TO MR. R.K. KOHLI & CO VIS-A-VIS THE DETAILS OF SHARES ACQUIRED. IF IT IS FOUND THAT THE TRANSACTIONS IN THE RELEVANT SOURCE BANK ACCOUNT HAVE BEEN CONSIDER ED WHILE ESTIMATING THE INCOME IN THE HANDS OF ASSESSEE FOR ACCOMMODATION . BASIS NECESSARY CREDIT SHALL BE ALLOWED WHILE COMPUTING UNEXPLAINED INVESTMENTS. IN THE ASSESSMENT YEARS 2003- 04 AND 2004-05 THE BENEFIT OF TELESCOPING IS TO BE ALLOWED IN RESPECT OF INCOME ASSESSED IN THE EARLIER YEARS. WE CONFORM THE ORDER OF CIT(A ) IN THIS REGARD. THUS THE ORDER OF CIT(A) IS UPHELD SUBJECT TO THE ABOVE MENTIONED DIRECTIONS . THIS PARA HAS BEEN MADE THE PART OF SHOW CAUSE NOTI CE BY THE LD. COMMISSIONER. THE READING OF THE ABOVE CLEARLY SHO W THAT THE ADDITION WAS CONFIRMED BY THE TRIBUNAL IN PRINCIPLE . HOWEVER THE MATTER WAS SET ASIDE FOR THE PURPOSE OF VERIFICATIO N IF ANY FOR SOURCE OF INVESTMENT WHICH COULD BE EXPLAINED BY TH E ASSESSEE. 8 14 WHILE GIVING EFFECT TO THIS ORDER THE ASSESSING OFFICER HAS DEALT WITH THIS ISSUE IN FOLLOWING PARAS: AS REGARDING THE SECOND ISSUE I.E. THE PROFIT FROM TRADING OF SHARES WITH M/S R. KOHLI & CO. THE ASSESSEE WAS ASKED TO FILE THE DETA ILS OF THE SHARES PURCHASED & SOLD DURING THE YEAR UNDER CONSIDERATION THE ASS ESSEE HAS FILED A WRITTEN REPLY ON 28.12.2011 ALONGWITH DETAILS & EVIDENCES A S PLACED ON RECORD WHICH IS REPRODUCED AS UNDER : ''YOUR GOOD SELF HAS ASKED FOR THE DETAILS OF SHARE S PURCHASED FROM M/S R. KOHLI & CO. STOCK EXCHANGE LUDHIANA BEING THE INVESTMENT MADE DURING THE ASS. YEAR 2004-05 FOR PURCHASE OF SILVER LINE SHARES AND NET VISTC INFO SHARES IN TH IS CONNECTION IT IS SUBMITTED THAI SHARES WERE PURCHASED BY SH. BIPAN JAIN FROM M/S R. KOHLI & CO. AND PAYMENTS WERE MADE TO M/S R. KOHLI & CO. THROUGH SH RAJIV JAIN & HER MOTHER SMT. KANTA JAIN. THE PHOTOCOPY OF BANK STATEMENT WITH HDFC BANK SAVING A/C NO. 034210 0000900 MALL ROAD LUDHIANA IS ATTACHED. IN THE BANK STATEMENT THE PAY MENT DIRECTLY MADE BY HIS SON BY SH.RAJIV JAIN ARE MARKED AS RED FOR THE PURPOSE OF VERIFICATION. YOUR KIND ATTENTION IS INVITED TO ASS. ORDER PAGE NO. 10 PARA 2 BEING UNEXPLAINED IN VESTMENT IN SHARE TRADING BUSINESS IN THE NAME OF SH. RAJIV JAIN AND HER MOTHER SMT. KANT A JAIN IS DULY MENTIONED AND YOUR KIND ATTENTION IS INVITED TO CIT(PPEALS-II) ORDER NO.59 56 & 310-IT/CIT(A)-II/06-07 DATED 29-09-2008 WHEREIN THE CIT(A) HAS ATTACHED ANNEXURE -A FOR THE ASS. YEAR 2002-03 TO 2004-05 IN WHICH THE COMPLETE DETAILS HAVE BEEN GIVEN FOR THE PURPOSES O F TURNOVER. YOUR KIND ATTENTION IS INVITED TO PAGE NO. 2 OF ANNEZURE- A THE NAME OF SH. RAJIV JA IN IS MENTIONED AT SERIAL NO. 5 AND THE TOTAL AMOUNT IS CONSIDERED FOR THE PURPOSES OF TURNOVER A T RS 13114229. THE PHOTOCOPY OF THE BANK STATEMENT RELATING TO SH. RAJIV JAIN IS ALSO A TTACHED FOR YOUR KIND VERIFICATION. ONCE THE FIGURES OF TURNOVER HAS BEEN CONSIDERED AND AGAIN I NVESTMENT IN SHARES HAS BEEN CONSIDERED IN THE ASS. ORDER BEING UNEXPLAINED INVESTMENT . THIS IS DOUBLE TAXATION ONCE THE FIGURE IS TAKEN IN TURNOVER AND AGAIN FOR THE PURPOSES OF UNEXPLAINED INVESTMENT SO AGAIN THIS FIGURE HAS BEEN CONSIDERED. YOUR KIND ATTENTION IS INVITED TO THE I ST AND 2 ND PARA AT PAGE NO. 07 10 OF THE ASS. ORDER WHICH IS REPRODUCED AS UNDER. AS PER INFORMATION GIVEN ABOVE THE ASSESSEE HIMSELF PURCHASED /SOLD 685273 SHARES DURING THE PREVIOUS YEAR WHEREAS HE CARRIED ON THE SHARE T RADING BUSINESS IN THE NAME OF HIS MOTHER AND SON SH. RAJIV JAIN AND HAD TOTAL TURNOVE R OF RS. 131080600/-. THE ASSESSEE HAS NOT PRODUCED ANY BOOKS OF ACCOUNTS TO PROVE THE SOURCE OF INVESTMENT AND THE PROFIT DERIVED FROM THE DEALING IN EQUITY S HARES. SINCE IN THE ABSENCE OF BOOKS OF ACCOUNTS I THEREFORE ESTIMATE THE ASSESSEE'S UN EXPLAINED INVESTMENT AT 5% OF THE TOTAL TURNOVER WHICH IN RESPECT OF TRADING IN PERSO NAL NAME IS ESTIMATED AT RS. 17131825/- KEEPING IN VIEW OF THE VOLUME OF EQUITY SHARES TRAD ED BY THE ASSESSES IN HIS OWN NAME AND IN THE NAME OF HIS MOTHER SMT. KENTA RANI & SON SH. RAJIV JAIN I WORK OUT THE UNEXPLAINED INVESTMENT AT 5% OF THE TOTAL TURNOVER AS DISCUSSED ABOVE. IN THE CASE OF THE ASSESSEE HE HAS TRADED IN 6 85 273 SHARES OF DI FFERENT COMPANIES BUT THERE IS NO INFORMATION AS REGARDS THE SALE PROCEEDS OF THE SAI D SHARES. I THEREFORE ESTIMATE THE AMOUNT OF INVESTMENT IN HIS CASE AT RS.8.5 LAC SO F AR AS THE UNEXPLAINED INVESTMENT IN THE OTHER TWO CASE IS CONCERNED IT WORKS OUT TO RS. 655 4000/- WHICH IS 5% OF THE TOTAL TURNOVER IN THEIR CASE AT RS. 13 10 80 600/- AND AD DITION OF RS.7404000/- IS THEREFORE MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE BU SINESS OF TRADING IN EQUITY SHARES. THIS IS ADDED TO THE TOTAL INCOME OF THE ASSESSEE A ND ASSESSED ACCORDINGLY. HOWEVER THE ASSESSEE HAS PREPARED THE DETAILED CHAR T FOR INDIA BULLS SECURITIES LTD. AND M/S R. KOHLI & CO. AND THE COMPLETE COPIES OF ACCOU NTS OF THE BANK HAS ALSO BEEN GIVEN WHICH INCLUDES HDPC BANK & BANK OF PUNJAB ARE ATTAC HED ALONG WITH DETAILS & EXPLANATION AGAINST EACH ENTRY. YOUR GOOD SELF WILL FIND THAT T HE BANK ACCOUNT OF SH. RAJIV JAIN HAS ALREADY BEEN CONSIDERED BY THE THEN A.O AND CIT (A) -II LDH DURING THE ASSESSMENT & APPEAL PROCEEDINGS. THE VERIFICATION MAY PLEASE BE DONE AT YOUR END. THE ASSESSEE HAS PREPARED THE DETAILS OF INDIA BULLS SECURITIES LTD. FOR FUTU RE SEGMENT & OPTION SEGMENT AND. YOUR GOOD SELF WILL FIND THAT IN FUTURE SEGMENT THERE IS LOSS OF 3074955/- AND IN THE OPTION SEGMENT THERE IS PROFIT OF 53941/- RESULTING INTO N ET LOSS OF RS. 3021014/-. THE COMPLETE DETAILS O/F&O ARE ATTACHED IN THE CASE OF SH. RAJIV JAIN. FURTHER IT IS ALSO IMPORTANT THAT SH. RAJIV JAIN HAS PAID INTEREST OF RS. 41198IF- AS PER STATEMENT OF INDIA BULLS SECURITIES LTD ATTACHED. THE INTEREST PAID IS ON ACCOUNT OF FINANC ING GOT DONE FROM INDIA BULLS SEC. LTD. FOR WHICH THE ENTRIES CAN BE VERIFIED FROM YOUR HONOR. 9 THE ASSESSEE HAS ALSO PREPARED THE DETAILS OF INDIA BULLA SECURITIES LTD IN THE NAME OF SMT. KANTA RANI FOR THE ASS. YEAR 2004-05 AND THE NET RE SULT OF INDIA BULLS SECURITIES LTD IS GIVEN AS UNDER:- INDIABULLS SECURITIES LTD F.Y 2003-2004 RS. DELIVERY SEGMENT (LOSS) - 267860.06 INTRADAY SEGMENT PROFIT 5046.60 FUTURE SEGEMENT ( LOSS) - 846024.68 OPTION SEGMENT ( LOSS) - 873930.57 INTEREST PAID TO INDIABU LLS SECURITIES LTD -124373.09 TOTAL RS. -2107141.80 THUS YOUR GOOD SELF WILL FIND THAT THERE IS NET LOS S OF RS. 2107142/- IN THE CASE OF SMT. KANTA JAIN AND THIS ACCOUNT HAS BEEN OWNED BY SHRI B.K. JAIN AND THE ADDITIONS HAVE BEEN MADE ACCORDINGLY . NOW THE CORR ECT STATE OF AFFAIRS IN THE CASE OF SHRI B.K. JAIN SHOULD LBLEL GIVEN THE TREAT MENT OF LOSS INCURRED BY SHRI RAJIV JAIN HIS SON & SMT. KANTA JAIN HIS MOTHER FO R WHICH THE COMPLETE DETAILS HAS BEEN GIVEN TO YOUR GOOD SELF ABOVE. THE REPLY FILED BY THE ASSESSEE WAS EXAMINED IN DET AIL AND DETAILS FILED ALONG WITH REPLY HAVE BEEN PERUSED AND IT IS FOUND THAT T HERE IS A NET LOSS TO THE ASSESSEE FROM TRADING SHARES WHICH AS PER DETAILS C OMES TO RS. 14 43 658/- AND AS SUCH IS ASSESSED. THE CASE WAS DISCUSSED WI TH COUNSEL AND ASSESSEE IN DETAILS AND AFTER DISCUSSION THE INCOME IS COMPU TED AS UNDER: INCOME AS COMPUTED ABOVE FROM THE ISSUE OF CERTIFICATES ETC. RS. 38 72 988/- LESS: LOSS FROM THE TRADING OF SHARES RS. 14 43 658 /- TOTAL INCOME RS. 24 29 330/- THE READING OF ABOVE PARAS OF THE ASSESSMENT ORDER CLEARLY SHOW THAT THE ASSESSING OFFICER HAS WRONGLY UNDERSTOOD T HE ORDER OF THE TRIBUNAL AND HAS GIVEN WRONG EFFECT TO THE SAME. T HE ASSESSEE WAS REQUIRED TO PROVE THE SOURCE OF INVESTMENT FOR WHIC H SOME ADDITIONS WERE MADE IN THE EARLIER YEARS. HOWEVER THE ASSES SEE ULTIMATELY DEALT WITH THE ISSUE ON RESULTS OF SHARE TRANSACTIO NS AND THE ASSESSING OFFICER ACCEPTED THE SAME AND ALLOWED LOS S TO RS. 14 43 688/- WHICH WAS NEITHER THE DIRECTION OF THE TRIBUNAL NOR A FINDING OF THE LD. CIT(A) IN THE APPEAL PROCEEDINGS BEFORE THE FIRST APPELLATE AUTHORITY. IN FACT WHEN THE PROFITS ITSEL F HAS BEEN ESTIMATED THERE IS NO QUESTION OF COMPUTING THE LOS S IN RESPECT OF SHARE TRADING. MOREOVER BEFORE US THE LD. COUNSEL OF THE ASSESSEE HAS VERY CLEARLY ADMITTED ON 17.9.2013 THAT THIS WA S CLEARLY A CASE COMMITTED BY THE ASSESSING OFFICER. THEREFORE WE HOLD THAT THE 10 ASSESSMENT ORDER TO THE EXTENT OF ALLOWING LOSS FRO M TRADING IN SHARES IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 15 AS FAR AS SECOND ISSUE IS CONCERNED WE ARE UNAB LE TO AGREE WITH THE CONTENTION OF THE ASSESSEE THAT THE ISSUE IS NOT ORIGINATING FROM ASSESSMENT ORDER. THERE IS NO FORCE IN THE CON TENTION MADE THROUGH WRITTEN SUBMISSIONS THAT THIS ISSUE PERTAIN S TO ASSESSMENT ORDER DATED 29.12.2006. IN FACT THE ASSESSMENT ORD ER DATED 29.12.2006 WAS CHALLENGED BEFORE THE LD. CIT(A) AND THEN BEFORE THE TRIBUNAL AND THE PRESENT ASSESSMENT ORDER DATED 29. 12.2011 IS IN CONTINUATION OF SAME PROCEEDINGS BECAUSE THIS ORDER IS PASSED TO GIVE APPEAL EFFECT TO THE ORDER OF THE TRIBUNAL PAS SED U/S 254. WHEN AN ADDITION WAS ALREADY MADE FOR THE FIRST TIM E THE SAME CANNOT BE IGNORED WHILE GIVING APPEAL EFFECT TO THE ORDER OF THE TRIBUNAL IN THE LAST ORDER AND THEREFORE IT IS CL EAR THAT ERROR HAS BEEN COMMITTED IN THE LATEST ORDER WHILE GIVING APP EAL EFFECT. THE SAME IS REGARDING COMPUTATION OF ESTIMATED PROFIT E ARNED ON ACCOUNT OF SHARE DEALING DONE BY THE ASSESSEE WITH SHRI R.K . KOHLI AND CO. AND OTHERS. THIS PROFIT WAS ESTIMATED BY THE ASSES SING OFFICER AT 1% AND ORIGINALLY TURNOVER OF THE ASSESSEE WAS TAKE N AT RS. 1 71 31 825/- AND THEREFORE ADDITION WAS MADE FOR RS. 1 71 380/-. WHEN THE ISSUE TRAVELED TO THE FILE OF LD. CIT(A) THE SAME WAS DEALT AT PAGE 31 AS UNDER: AS FAR AS THE ADDITION ON ACCOUNT OF PROFITS IN S HARE TRADING ARE CONSIDERED AS PER THE DETAILS GIVEN IN THE TABLE AB OVE THE APPELLANT WAS FOUND TO HAVE SOLD 50000 SHARES OF SILVER LINE DURI NG THE PERIOD RELEVANT TO ASSESSMENT YEAR 2002-03. AS PER THE DETAILS TH E PROFIT ON SALES OF THESE SHARES CAME TO RS. 7 91 615/-. ADDITION OF TH IS AMOUNT WAS ALSO MADE BY THE ASSESSING OFFICER IN THE ASSESSMENT YEA R 2002-03. FOR THE ASSESSMENT YEAR 2004-05 THE ASSESSING OFFICER EST IMATED SUCH PROFITS @ 1% OF ETH TURNOVER IN APPELLANTS OWN NAME AND IN THE NAMES OF HIS MOTHER AND HIS SON. THE TOTAL TURNOVER IN HIS NAME AND IN THE NAMES OF HIS MOTHER AND SON FOR THE PERIOD RELEVANT TO ASSES SMENT YEAR 2004-05 CAME TO RS. 14 82 12 425/-. PROFITS ON SALES OF TH ESE SHARES @ 1% OF THIS AMOUNT WOULD COME TO RS. 14 82 124/-. THOUGH IN THE ASSESSMENT ORDER ADDITION ON ACCOUNT OF INCOME FROM TRADING O F SHARES HAVE BEEN TAKEN AT RS.1 71 318/- SUBSEQUENT VIDE PASSING ORDE R U/S 154 ADDITION OF RS. 14 82 124/- WAS MADE BY THE O IN PLACE OF RS . 1 71 318/-. AGAINST ABOVE DETAILED SUBMISSIONS WERE MADE BY TH E ASSESSEE WHICH HAVE ALSO BEEN REPRODUCED BY THE LD. CIT(A) A T PAGE 32 TO 37 OF THIS ORDER AND FOR THE SAKE OF BREVITY WE ARE NO T REPRODUCING THE SAME. AFTER CONSIDERING THE SUBMISSIONS THE ISSUE WAS DECIDED IN THE FOLLOWING PARAS: 11 IN VIEW OF THE ABOVE IT IS CONTENDED THAT THE ADD ITIONS MADE BY THE ASSESSING OFFICER A RE NOT JUSTIFIED AND THAT THE S AME SHOULD BE DELETED. I HAVE CAREFULLY CONSIDERED THE CONTENTION OF THE ID COUNSEL FOR THE APPELLANT AND PERUSED THE RELEVANT RECORD. IN THE WRITTEN SUBMISSIONS IT IS AGAIN BEING REITERATED THAT THE APPELLANT HAD CARRIED OUT THE TRANSACTIONS IN .QUESTION ON BEHALF OF OTHERS. AS PER THE ID. COUNSEL WHEN THE A.O. HAD ALREADY ESTIMATED THE INCOME .FROM SIMILAR TRANSACTIONS @ .1% ON ALL THE DEPOSITS SHE WAS NOT-JUSTIFIED IN WORKING OUT THE INCOME ON TRANSACTIONS IN QUESTION IN THE ABOVE MANNER. IT IS THE CONTENTION OF THE ID COUNSEL THAT THE AMOUN TS FOR THE PURCHASE OF SHARES IN QUESTION WERE PAID OUT OF THE ILL ADS WHICH WORE DEPOSITED IN THE BANK AFTER RECEIVING THE SAME FROM OTHER PERSONS FOR WHOM SUCH SHARES WORE BEING TRANS ACTED. HOWEVER THE CONTENTION OF THE LD. COUNSEL IS WITHOUT ANY EVIDENCE. WHEREAS THE APPE LLANT WAS FOUND TO HAVE PASSED ; ON BOGUS PROFITS ON SALE OF SHARES IN THE SHAPE OF ACCOMMODA TION ENTRIES AND FOR WHICH ADDITIONS @ 0.5% OF THE TURNOVER HAS SUSTAINED THE POSITION WITH REGARD TO THE SHARES IN QUESTION IS QUITE DIFFERENT. THESE ARE THE SHARES WHICH WERE ACTUALLY PURCHASED AND NO BOGUS TRANSACTIONS WERE INVOLVED. ADMITTEDLY THE SHARES WERE PURCHASE D _EITHER IN THE NAME OF THE APPELLANT OR IN THE NAMES OF HIS MOTHER OR SON. IN THE FACE OF T HIS FACTUAL POSITION IT WAS FOR THE APPELLANT TO PROVE BY FILING NECESSARY EVIDENCE IF THE. INVESTMENT IN THE PURCHASE OF THESE SHARES WAS MADE OUT OF THE FUNDS RECEIVED FRO M OTHER PERSONS. IN THE ABSENCE OF SUCH EVIDENCE WHICH IS AN ADMITTED POSITION THE A.O. C ANNOT BE HELD TO BE UNJUSTIFIED IN CONSIDERING THE INVESTMENT IN THESE SHARES AS UNACC OUNTED INVESTMENT AND THE PROFITS ON THE SALES OF THESE SHARES AS UNACCOUNTED INCOME OF THE APPELLANT FOR THE RELEVANT ASSESSMENT YEAR. IN THE WRITTEN SUBMISSIONS REPRODUCED ABOVE THE ID . LD. COUNSEL OF THE ASSESSEE HAS ALSO OBJECTED TO THE A.O: UTILIZING THE INFORMATIO N WHEREIN ONLY BILL NUMBERS AND AMOUNTS HAVE BEEN MENTIONED IN THE DETAILS FOR THE ASSESSME NT YEAR 2003-04. AS PER THE ID. COUNSEL OF THE ASSESSEE THESE DETAILS DO NOT INDICATE THE NAME AND NUMBER OF SHARES TRANSACTED. HOWEVER THIS OBJECTION OF THE ID. LD. COUNSEL OF T HE ASSESSEE CANNOT BE ACCEPTED THE INFORMATION WAS RECEIVED BY THE A.O. IN RESPECT OF THE APPELLANT AND HIS FAMILY MEMBERS SPECIFICALLY FROM THE BROKERS M/S R. KOHLI &. CO. THERE FORE THOUGH THE DETAILS AS ABOVE ARE NOT APPEARING IN THIS INFORMATION SO LONG THE INFORMATION PERTAINS TO THE APPELLANT OR HIS FAMILY MEMBERS THE ASSESSING OFFICER WAS FULLY JUSTIFIED IN TAKING__THE SAME INTO CONSIDERATION FOR ESTIMATING THE INCOME OF THE APPE LLANT. THE NEXT OBJECTION TAKEN BY THE ID. COUNSEL IS THAT THESE ADDITIONS ON ACCOUNT OF INVESTMENT IN SHARES HAVE BEEN MADE BY THE A.O. PUR ELY ON GUESS AND ESTIMATION BASIS AND THAT THEREFORE THESE ARE NOT SUSTAINABLE. DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF DHAKESHWARI COTTON MILLS LT D (SUPRA) HAS BEEN RELIED UPON IN THIS REGARD. HOWEVER HERE AGAIN I AM NOT INCLINED TO A GREE WITH THE CONTENTION OF THE ID. COUNSEL. THE A.O. HAD IN HER POSSESSION THE DETAILS OF SHARES WHICH WERE ' ADMITTEDLY PURCHASED AND SOLD BY THE APPELLANT THRO UGH THE SHARE BROKER M/S R.KOHII & CO. AND OTHERS DURING THE PERIOD RELEVANT TO THE ASSESSMENT Y<;ARS UNDCI 1 CONSIDERATION. IN THE ABSENCE' OF OTHER NECESSARY DETAILS MADE AVAILA BLE TO HER BY THE APPELLANT THE A.O HAD. TO ESTIMATE THE INCOME BEING UNACCOUNTED INVESTMENT AN D UNACCOUNTED PROFITS FROM SALE AND PURCHASE; OF THESE SHARES. THOUGH THE ID. COUNSEL IS CONTENDI NG THAT THE A.O. COULD NOT ESTIMATE THE INCOME IN THE ABOVE MANNER WITHOUT B RINGING ON RECORD NECESSARY DETAILS AND CALCULATING EXACT AMOUNTS FOR SUCH ADDITIONS IT IS SEEN THAT EVEN DURING THE APPEAL PROCEEDINGS NO SUCH DETAILS HAVE BEEN NUDE AVAILABLE BY THE APPELL ANT. THEREFORE IN THE ABSENCE OF DETAILS WHICH ARC IN THE PERSONAL KNOWLEDGE OF THE APPELLANT ONLY AND WHICH DETAILS WERE NOT PRODUCED EITHER DURING THE ASSESSMENT PROCEEDINGS OR DURING THE APP EAL PROCEEDINGS THE STAND OF THE A.O IN ESTIMATING THE INCOME ON ACCOUNT OF UNACCOUNTED INV ESTMENT AND UNACCOUNTED INVESTMENT AND UNACCOUNTED PROFITS ON SUCH SHARE TRANSACTION IS H ELD TO BE FULLY JUSTIFIED. AS FAR AS THE ASSESSMENT YEARS 2002-03 AND 2003-04 ARE CONCERNED THE ADDITI ONS HAVE BEEN MADE ON THE BASIS OF EXACT DETAILS WHICH HAVE ALREADY BEEN MENTIONED ABOVE. FOR THE ASSESSMENT YEAR 2004-05 THE ADDITION MADE BY THE A.O @. 5% OF THE TURNOVER FOR INVESTMENT AND @ 1% OF THE TURNOVER FOR PROFIT DO NOT APPEAR TO BE EXCESSIVE OR UNREASONABLE. IN V IEW OF THE ABOVE THE ADDITIONS MADE ON ACCOUNT OF UNACCOUNTED INVESTMENT AND UNACC OUNTED PROFIT ON SALES AND PURCHASE OF SHARES IN THE NAME OF THE APPELLANT AND IN THE NAMES OF HIS MOTHER AND SON DURING THE PERIOD RELEVANT TO THE ASSESSME NT YEAR UNDER CONSIDERATION AS MENTIONED ABOVE ARE UPHELD IN PRINCIPLE. 16 AGAIN AT PAGE 40 THE LD. CIT(A) HELD AS UNDER: FOR ASSESSMENT YEAR 2004-05 ADDITION OF RS. 14 82 124/- ON ACCOUNT OF PROFIT ON SHARE TRADING IS CONFIRMED. HOWEVER AS FAR AS ADDITION OF RS. 74 04 000/- MADE FOR INVESTMENT FOR THIS BUSINESS O F TRADING IN SHARES FOR ASSESSMENT YEAR 2004-05 IS CONCERNED THE SAME IS TAKEN TO BE 12 COVERED BY THE AMOUNTS AVAILABLE OUT OF THE ADDITIO NS MADE AND CONTINUED FOR ASSESSMENT YEARS 2002-03 A ND 2003-04 AS PER THIS ORDER. THEREFORE FOR THE ASSESSMENT YEAR 2004-05 ADDITIO N OF RS. 74 04 000/- IS ALSO DELETED. THUS FROM ABOVE IT IS CLEAR THAT THE LD. CIT(A) DUR ING APPEAL PROCEEDINGS BEFORE HIM HAS CONFIRMED THIS ADDITION PARTICULARLY AFTER NOTING THAT THE ASSESSING OFFICER HAS HIMSELF MADE ADDITIONS OF RS. 14 82 124/- BY INVOKING THE PROVISIONS OF SECTION 1 54 BY ORDER PASSED U/S 154. THIS ISSUE WAS ALSO CHALLENGED BEF ORE THE TRIBUNAL AND THE TRIBUNAL ADJUDICATED THIS ISSUE VIDE PARA 4 6 WHICH IS AS UNDER: THE NEXT ADDITION IS ON ACCOUNT OF PROFITS EARNED ON PURCHASE AND SALE OF SHARES. IN VIEW OF OUR DECISION IN PARAS HEREIN ABOVE IN INCLUDING THE INVESTMENTS IN SUCH SHARES IN THE HANDS OF ASSESSEE THE PROFIT ARISING ON SALE OF SUCH SHARES IS ALSO TO BE ASSESSED IN TH E HANDS OF ASSESSEE. WE CONFIRM THE ORDER OF THE LD. CIT(A) IN THIS REGA RD AND DISMISS THE GROUND OF APPEAL RAISED BY THE ASSESSEE. THUS FROM ABOVE IT BECOMES CLEAR THAT THE TRIBUNAL HAS ALSO CONFIRMED THE ADDITION ON ACCOUNT OF ESTIMATED PRO FIT AT 1%. 17 NOW THIS ADDITION SHOULD HAVE BEEN MADE PART OF THE ORDER OF ASSESSMENT WHILE GIVING EFFECT TO THE ORDER OF THE TRIBUNAL BUT THE ASSESSING OFFICER HAS CONVENIENTLY FORGOTTEN TO MAK E ADDITION TO THE INCOME AND THEREFORE HIS ORDER HAS BECOME ERRONEO US AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AND THE LD. COMMISSIONER HAS CORRECTLY HELD ACCORDINGLY AND DIRECTED THE ASS ESSING OFFICER TO MAKE ADDITION ON THESE TWO ITEMS I.E. IN RESPECT OF WRONG LOSS ALLOWED OF RS. 14 43 688/- AND RS. 14 82 124/- ON A CCOUNT OF ESTIMATED LOSS. THEREFORE IN OUR OPINION REVISIO NARY ORDER PASSED U/S 263 IN RESPECT OF THESE TWO ISSUES DOES NOT RE QUIRE ANY INTERFERENCE AND WE CONFIRM THE SAME. 18 AFTER CONSIDERING THE RIVAL SUBMISSIONS THOUGH W E AGREE WITH THE CONTENTION THAT NORMALLY LD. COMMISSIONER HAS N O POWER TO DIRECT INITIATION OF PENALTY PROCEEDINGS U/S 263. HOWEVER THIS RULE WILL APPLY IN NORMAL CIRCUMSTANCES. IN THIS CASE A S DISCUSSED EARLIER THIS IS A CASE WHERE ASSESSMENT ORDER HAS BEEN PASS ED TO GIVE APPEAL EFFECT TO THE ORDER OF THE TRIBUNAL. IN THE ORIGINAL ORDER PASSED ON 29..12.2006 CLEARLY PENALTY PROCEEDINGS W ERE INITIATED U/S 271(1)(C). THIS ISSUE WAS NOT CHALLENGED BEFORE TH E TRIBUNAL THEREFORE NO DIRECTIONS WERE GIVEN BY THE TRIBUNA L. THEREFORE WHEN THE APPEAL EFFECT WAS BEING GIVEN WHAT WAS ALR EADY DONE 13 WHICH WAS NOT CHALLENGED BEFORE THE HIGHER AUTHORIT IES REMAINS UNDISTURBED AND SAME FINDING HAD TO BE GIVEN AGAIN WHILE GIVING SUCH APPEAL EFFECT. THEREFORE THE ASSESSING OFFIC ER CLEARLY COMMITTED ERROR WHILE NOT REPEATING THE DIRECTION FOR INITIATION OF PENALTY PROCEEDINGS. 19 BEFORE PARTING WE WOULD LIKE TO OBSERVE THAT THI S CASE SEEMS TO BE A TOTAL NEGLIGENCE ON THE PART OF THE ASSESSING OFFICER. IN FACT THE WAY THE ORDER HAS BEEN PASSED IT IS GIVING A FE ELING THAT SAME HAS BEEN DONE WITH ULTERIOR MOTIVE AND IN SUCH CASE S REVENUE SHOULD ALWAYS CONDUCT ENQUIRIES. 20 IN VIEW OF THE ABOVE WE FIND NOTHING WRONG WITH THE ORDER OF THE LD. COMMISSIONER AND CONFIRM THE SAME. 21 IN THE RESULT APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 18.10.2013 SD/- SD/- (SUSHMA CHOWLA) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 18.10.2013 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/THE DR