Shri Kamlesh M.Patel, Baroda v. The ACit., Circle-3,, Baroda

ITSSA 22/AHD/2007 | misc
Pronouncement Date: 22-09-2010 | Result: Dismissed

Appeal Details

RSA Number 2220516 RSA 2007
Assessee PAN ACPPP2613K
Bench Ahmedabad
Appeal Number ITSSA 22/AHD/2007
Duration Of Justice 3 year(s) 7 month(s) 20 day(s)
Appellant Shri Kamlesh M.Patel, Baroda
Respondent The ACit., Circle-3,, Baroda
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 22-09-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 05-09-2008
Date Of Final Hearing 16-09-2010
Next Hearing Date 16-09-2010
Assessment Year misc
Appeal Filed On 02-02-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'D' (BEFORE S/SHRIBHAVNESH SAINI JM AND D. C. AGRAWAL AM) IT (SS) A NO.22/AHD/2007 BLOCK PERIOD: 1985-86 TO 15-12-1995 KAMLESH M. PATEL 78 SAMIR PARK SOCIETY HIGH TENSION ROAD SUBHANPURA BARODA V/S THE ASSISTANT COMMISSIONER OF INCOME- TAX CIRCLE-3 AAYAKAR BHAVAN BARODA PA NO. ACPPP 2613 K (APPELLANT) (RESPONDENT) IT (SS) A NO.23/AHD/2007 BLOCK PERIOD: 1985-86 TO 15-12-1995 JATIN M. PATEL 78 SAMIR PARK SOCIETY HIGH TENSION ROAD SUBHANPURA BARODA V/S THE ASSISTANT COMMISSIONER OF INCOME- TAX CIRCLE-3 AAYAKAR BHAVAN BARODA PA NO. AMWPP 2832P (APPELLANT) (RESPONDENT) ASSESSEE BY SMT. URVASHI SHODHAN AR DEPARTMENT BY SHRI K. M. MAHESH DR O R D E R PER BHAVNESH SAINI: BOTH THESE FIRST APPEALS BY DIFFERENT ASSESSEES ARE DIRECTED AGAINST DIFFERENT ORDERS OF THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-3 BAR ODA DATED 21-12-2006 FOR THE ABOVE BLOCK PERIOD. 2. SINCE THE ISSUES ARE COMMON IN BOTH THE APPEALS THEREFORE BOTH THE APPEALS WERE HEARD TOGETHER AND WE DISPOSE OF THE SAME THROUGH THIS COMMON CONSOLIDATE D ORDER. 3. BOTH THE APPEALS WERE EARLIER DISMISSED IN DEFAU LT; HOWEVER THE SAME APPEALS WERE RESTORED BY ALLOWING THE MISC. IT (SS) A NO.22 AND 23/AHD/2007 KAMLESH M. PATEL AND JATIN M. PATEL VS ACIT CIR-3 BARODA 2 APPLICATIONS OF THE ASSESSEES. THE OFFICE THEREFOR E FIXED BOTH THE APPEALS FOR HEARING ON MERIT. 4. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOTH T HE PARTIES PERUSED THE FINDINGS OF THE AUTHORITIES BELOW AND T HE MATERIALS AVAILABLE ON RECORD. THE LEARNED COUNSEL FOR THE ASSESSEE MAI NLY ARGUED IN THE CASE OF THE ASSESSEE KAMLESH M. PATEL AND STATED TH AT ORDER IN THIS CASE MAY BE FOLLOWED IN THE CASE OF THE OTHER ASSESSEE J ATIN M. PATEL BECAUSE THE ISSUES ARE SAME. IT (SS) A NO.22/AHD/2007 (ASSESSEE: KAMLESH M. PATEL) 5. THIS APPEAL BY THE ASSESSEE IS FILED ON THE FOLL OWING GROUNDS: 1. THE LEARNED ASSESSING OFFICER HAS ERRED IN LAW AND IN FACTS IN DISALLOWING THE CLAIM OF THE APPELLANT IN REGARD TO LOSS ON ACCOUNT OF TRADING IN SHARES IN COMPLETE DISREGARD TO THE FACTS AVAILABLE AND LAW PERSISTING AND PLACING RELIANCE ON IRRELEVANT CONSIDERATION AND MATERIAL COLLECTED AT THE BACK OF THE APPELLANT AND THEREFORE ON CONSIDERATION OF FACTS AND LAW THE LEARNED ASSESSING OFFICER BE DIRECTED TO ALLOW THE CLAIM OF LOSS ON TRADING IN SHARES AS CLAIMED. 2. THE LEARNED ASSESSING OFFICER HAS ERRED IN LAW AND IN FACTS MAKING AN ADDITION OF RS.10.20 LAKHS ON ACCOUNT OF UNEXPLAINED CASH CREDITS HAVING COMPLETE DISREGARD TO THE AVAILABLE MATERIAL ON RECORD AND THE LAW AND THEREFORE SUCH ACTION BEING BAD THE LEARNED ASSESSING OFFICER BE DIRECTED TO DELETE THE ENTIRE ADDITION OF RS.10.20 LAKHS MADE ON THIS ACCOUNT. 3. THE LEARNED ASSESSING OFFICER HAS ERRED IN LAW AND IN FACTS IN MAKING AN ADDITION OF RS.3 58 000/- AS UNEXPLAINED INCOME OF THE ASSESSEE HAVING COMPLETE DISREGARD TO THE FACTS OF THE CASE AND LAW SUBSISTING AND THEREFORE IT (SS) A NO.22 AND 23/AHD/2007 KAMLESH M. PATEL AND JATIN M. PATEL VS ACIT CIR-3 BARODA 3 THE LEARNED ASSESSING OFFICER BE DIRECTED TO DELETE THE ENTIRE ADDITION OF RS.3 58 000/- MADE ON THIS ACCOUNT. 4. THE LEARNED ASSESSING OFFICER HAS ERRED IN MAKING AN ORDER IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE AND WITHOUT AFFORDING REASONABLE OPPORTUNITY OF BEING HEARD AND ALSO RELYING ON MATERIAL WHICH WAS NEVER REFERRED TO THE APPELLANT AND COLLECTED AT THE BACK OF THE APPELLANT AND SUCH ORDER BEING BAD IN LAW IS PRAYED TO BE CANCELLED/QUASHED. 6. THE FACTS OF THE CASE ARE THAT THE ASSESSEE SHR I KAMLESH M. PATEL IS DOING THE BUSINESS OF SHARE AND SECURIT IES. A SEARCH OPERATION WAS CONDUCTED AT THE PREMISES OF S HRI N. S. SATANI AND SHRI P. N. PATEL ON 15-12-1995. DURING T HE COURSE OF SEARCH PROCEEDINGS CERTAIN TRANSACTIONS IN THE NAME OF THE ASSESSEE WERE OBSERVED IN THE BOOKS OF ACCOUNT OF T HE PARTIES. ACCORDINGLY IN ACCORDANCE WITH THE PROVISIONS OF C HAPTER XIV- B NOTICE U/S 158BD WAS ISSUED TO THE ASSESSEE ON 16-04-1996 REQUIRING THE ASSESSEE TO FURNISH THE RE TURN OF INCOME. WHEN NO SUCH RETURN WAS FURNISHED WITHIN TH E STIPULATED TIME WRITTEN REMINDER WAS SERVED ON THE ASSESSEE. ON 1-11-1996 THE RETURN OF INCOME WAS FURNISHED SH OWING A LOSS OF RS.7 28 000/-. ASSESSMENT U/S 158BC READ WI TH SECTION 158BG AND 158BD OF THE IT ACT WAS PASSED ON 29-04-1997 AT A TOTAL INCOME OF RS.13 78 000/- AS A GAINST RETURNED LOSS OF RS.7 28 816/-. DURING THE COURSE O F ASSESSMENT PROCEEDINGS ADDITION OF RS.13 78 000/- WAS MADE ON THE FOLLOWING GROUND: (I) UNEXPLAINED INVESTMENT ON DEPOSITS RS.10 20 0 00/- (II) UNACCOUNTED PROFIT OF SHARE TRADING RS. 3 58 000/- TOTAL ADDITION RS.13 78 000/- IT (SS) A NO.22 AND 23/AHD/2007 KAMLESH M. PATEL AND JATIN M. PATEL VS ACIT CIR-3 BARODA 4 THEREAFTER ASSESSEE PREFERRED APPEAL BEFORE THE TR IBUNAL. THE TRIBUNAL VIDE ITS ORDER IN ITA NO.114 AND 115/AHD/1 997 DATED 16-05-2005 HAS SET ASIDE THE MATTE TO BE DECIDED AF RESH IN VIEW OF THE FACTS DISCUSSED IN THE CASE OF NIZAR AL I S. SATANI IN IT (SS) A NO.17 19 20 AND 113/AHD/1997 DATED 22-0 2-2005. THE ORDER OF THE TRIBUNAL IN THE CASE OF NIZAR ALI S. SATANI WAS PERUSED WHEREIN THE AO WAS DIRECTED TO FOLLOW THE D ECISION IN THE CASE OF CHANDRAKANT I. GANDHI. THE RELEVANT ABS TRACT OF THE DIRECTIONS OF THE TRIBUNAL IN THE CASE OF CHAND RAKANT I. GANDHI IS REPRODUCES AS UNDER: THE CLAIM OF THE LD. COUNSEL BEFORE US WITH REGARD TO THE AFORESAID ADDITIONS IS THAT THESE TRANSACTIONS ARE FULLY REFLECTED IN THE BOOKS OF ACCOUNTS AND DISCLOSED BE FORE THE I. T. AUTHORITIES IN THE RETURN OF INCOME FILED BY THE ASSESSEE. HOWEVER THE LD. D. R. COULD NOT APPRISE US ABOUT THE CORRECT POSITION ON THIS ASPECT. IN CASE THE TRANSACTIONS ARE DULY REFLECTED IN THE BOOKS OF ACC OUNTS THE GENUINENESS OF THE TRANSACTIONS INCLUDING THE N ATURE OF DEPOSITS APPEARING IN THE BOOKS WOULD OBVIOUSLY BE OUTSIDE THE PURVIEW OF BLOCK ASSESSMENT AS HELD BY US ABOVE. HOWEVER IN CASE THE TRANSACTIONS ARE NOT RE FLECTED IN THE REGULAR BOOKS OF ACCOUNTS THE A. O. IS FULL Y JUSTIFIED IN LOOKING INTO THE NATURE AND SOURCE OF INVESTMENT S AND DEPOSITS REPRESENTED BY THESE TRANSACTIONS. SINCE T HE ISSUE HAS NOT BEEN CLARIFIED BEFORE US WE WOULD RE STORE THE AFORESAID THREE ADDITIONS TO THE FILE OF THE AO WITH A DIRECTION THAT THESE ISSUES MAY BE CONSIDERED AFRES H IN THE LIGHT OF THE AFORESAID OBSERVATIONS/DIRECTIONS . IN VIEW OF THE ABOVE BACK GROUND OPPORTUNITY OF BE ING HEARD WAS GIVEN TO THE ASSESSEE VIDE NOTICE U/S 143(2) OF THE IT ACT ON 02-08-2006 REQUESTING THE ASSESSEE TO ATTEND THE OFFICE ON 18-08-2006. THE SAID NOTICE WAS RETURNED UN-SERVED. AGAIN A NOTICE U/S 143(2) DATED 18-09-2006 WAS ISSUED REQUE STING THE ASSESSEE TO ATTEND THE OFFICE ON 24-09-2006. ASSESS EES AUTHORIZED REPRESENTATIVE SHRI MUKUND BAKSHI ATTEND ED THE IT (SS) A NO.22 AND 23/AHD/2007 KAMLESH M. PATEL AND JATIN M. PATEL VS ACIT CIR-3 BARODA 5 OFFICE ON 24-09-2006 WITHOUT ANY SUBMISSIONS EVIDE NCE OR BOOKS OF ACCOUNTS. HENCE THE ASSESSEES REPRESENTA TIVE WAS REQUESTED TO APPEAR WITH COMPLETE DETAILS BOOKS OF ACCOUNTS AND EVIDENCES ON 18-10-2006. THE LEARNED COUNSEL FO R THE ASSESSEE REQUESTED FOR COPY OF APPELLATE ORDER AND THE SAME WAS PROVIDED ON 25-05-2006. TILL DATE THE ASSESSEE HAS NEITHER ATTENDED THE OFFICE NOR SUBMITTED ANY DETAI LS REPLY OR CLARIFICATION IN THIS MATTER IN SPITE OF LAPSE OF O NE AND HALF MONTH. THEREFORE FINAL SHOW CAUSE NOTICE WAS ISSUE D VIDE LETTER DATED 01-12-2006 AS PER DIRECTION OF THE TRI BUNAL. 7. THE ASSESSING OFFICER CONSIDERING NON-COMPLIANCE BY THE ASSESSEE CONSIDERED THE ISSUE AFRESH AND CONFIRMED THE ADDITIONS. HIS FINDINGS IN PARA 4 ARE REPRODUCED AS UNDER: 4. IN SPITE OF THIS OPPORTUNITY ALSO THE ASSESSEE HAS NEITHER BOTHERED TO COMPLY NOR FILED ANY SUBMISSION . THE ASSESSEE HAS NOT TAKEN ANY CARE TO ATTEND THE PROCE EDINGS AND FURNISH THE REQUIRED DETAILS AND INFORMATION AS REQUIRED FOR THE COMPLETION OF THE ASSESSMENT. SINC E THE ASSESSEE IS SILENT ON EVERY STAGE OF ASSESSMENT PROCEEDINGS IT IS CLEAR THAT HE HAS NO ANY EVIDENC E TO ESTABLISH HIS CLAIM. AS PER THE SPECIFIC QUERY RAIS ED IN SHOW CAUSE NOTICE ASSESSEE HAS NOT PRODUCED ANY EVIDENCE IN SUPPORT OF HIS CLAIM TO ESTABLISH WHETH ER THESE ENTRIES ARE PART OF REGULAR BOOKS OF ACCOUNT OR NOT . HONBLE ITAT HAS GIVEN A CLEAR DIRECTION THAT IF THE ASSESS EE DOES NOT PRODUCE ANY EVIDENCES IN HIS SUPPORT OF CLAIM I N THIS REGARD THEN AO IS JUSTIFIED IN ADDING THE ABOVE TRANSACTION IN THE UNDISCLOSED INCOME UNDER THE BLO CK ASSESSMENT. ASSESSEE HAS NOT MAINTAINED ANY BOOKS O F ACCOUNT WHICH GET CLEARED FROM THE RETURN OF INCOM E OF THE ASSESSEE FOR A. Y. 94-95 AND A. Y. 95-96 WHEREIN HE HAS DISCLOSED INCOME FROM REMUNERATION SHARE OF PROFIT FROM THE FIRM AND INCOME FROM OTHER SOURCES FOR WHICH BO OKS OF ACCOUNT IS NOT REQUIRED. FURTHER IN BLOCK RETURN A SSESSEE HAS SHOWN NIL INCOME FOR THE A. Y. 1986-87 TO 1993- 94 WHICH SHOWS THAT ASSESSEE HAS NEVER MAINTAINED BOOK S OF ACCOUNT. APART FROM THAT ASSESSEE HAS ADMITTED IN IT (SS) A NO.22 AND 23/AHD/2007 KAMLESH M. PATEL AND JATIN M. PATEL VS ACIT CIR-3 BARODA 6 STATEMENT RECORDED ON OATH DTD. 26.12.95 THAT HE HA S NOT MAINTAINED ANY BOOKS OF ACCOUNT (ANSWER NO.11). EVE N AT THE TIME OF ORIGINAL BLOCK ASSESSMENT PROCEEDINGS IT WAS HELD BY THE THEN AO THAT ASSESSEE IS NOT MAINTAININ G REGULAR BOOKS OF ACCOUNT AND WHICH WAS NOT CHALLENG ED IN APPEAL ALSO. SINCE THE ASSESSEE HAS ALTHOUGH ADMITT ED THAT HE HAS NOT MAINTAINED BOOKS OF ACCOUNT THERE IS NO QUESTION OF VERIFICATION WHETHER THE RELEVANT ENTRI ES IS REFLECTED IN THE BOOKS OF ACCOUNT OR NOT AS THE ASS ESSEE IS NOT MAINTAINING BOOKS OF ACCOUNT AS STATED ABOVE. THEREFORE IT IS CONCLUDED THAT THE ABOVE TRANSACTION/ENTRIES HAS TO BE ASSESSED UNDER BLOCK ASSESSMENT AS UNDISCLOSED INCOME . IN VIEW OF THE ABOVE THE INFERENCE DRAWN AT THE TI ME OF THE ORIGINAL BLOCK ASSESSMENT ORDER PASSED U/S 1 58BC R. W. S. 158BG R .W. S. 158BD DATED 29.04.1997 STA NDS AS IT IS. SUBJECT TO THE ABOVE REMARKS THE TOTAL INCOME OF THE ASSESSEE IS COMPUTED AS UNDER:- UNDISCLOSED INCOME AS PER RETURN NIL ADD:I)UNEXPLAINED INVESTMENT ON DEPOSITS RS.10 20 000/- II)UNACCOUNTED PROFIT OF SHARE TRADING RS. 3 58 00 0/- ============ TOTAL TAXABLE INCOME RS.13 78 000/- ============ ASSESSED ACCORDINGLY U/S 158 BC R. W. S. 158 BD R. W. S. 254 OF THE I. T. ACT. CALCULATE TAX. ISSUE DE MAND NOTICE AND CHALLAN ACCORDINGLY. INITIATE PENALTY U/ S 271 (1) (B) OF THE I. T. ACT. THIS ORDER IS PASSED AFTER OBTAINING APPROVAL FROM THE HONBLE CIT-I BARODA VIDE HIS LETTER NO. BRD/T ECH- 1/APPROVAL/158BC/KMP/2006-07 DATED 21.12.2006. 8. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS NOT MAINTAINED BOOKS OF ACCOUNT AT THE TIME OF SEARCH AND THAT THE IT (SS) A NO.22 AND 23/AHD/2007 KAMLESH M. PATEL AND JATIN M. PATEL VS ACIT CIR-3 BARODA 7 ASSESSEE EXPLAINED THE ADDITION OF CASH CREDITS. TH E LEARNED COUNSEL FOR THE ASSESSEE HOWEVER SUBMITTED THAT THE ASSESSEE S HOULD BE GIVEN BENEFIT OF PEAK CREDIT COMPUTATION OF WHICH IS FIL ED AT PAGE 20 OF THE PAPER BOOK. THE LEARNED COUNSEL FOR THE ASSESSEE AL SO SUBMITTED THAT THE ADDITION OF RS.3 58 000/- IS CLEARLY UNJUSTIFIED IN VIEW OF THE SUBSTANTIVE ADDITION MADE ABOVE. THE LEARNED COUNSEL FOR THE AS SESSEE REFERRED TO EARLIER ASSESSMENT ORDER DATED 29-4-1997 (PB-8) AND EXPLAINED THAT THE ASSESSEE MADE A CLAIM OF PEAK CREDIT AT THE ORIGINA L ASSESSMENT STAGE. THE LEARNED COUNSEL FOR THE ASSESSEE REFERRED TO VA RIOUS REPLIES FILED BEFORE THE AO AT THE ORIGINAL ASSESSMENT PROCEEDING S COPIES OF WHICH ARE FILED IN THE PAPER BOOK. THE LEARNED COUNSEL FOR TH E ASSESSEE HOWEVER FAIRLY CONCEDED THAT NO FRESH REPLY OR EXPLANATION WAS FILED BEFORE THE AO IN THE SET ASIDE PROCEEDINGS. THE LEARNED COUNSEL F OR THE ASSESSEE LASTLY SUBMITTED THAT ONE MORE OPPORTUNITY MAY BE GIVEN TO THE ASSESSEE TO EXPLAIN THE ISSUE BEFORE THE AO IN THE INTEREST OF JUSTICE. 9. ON THE OTHER HAND THE LEARNED DR RELIED UPON TH E ORDER OF THE AO AND SUBMITTED THAT THE TRIBUNAL HAS GIVEN A SPECIFI C FINDING IN THE ORDER DATED 16-05-2005 WHILE RESTORING THE MATTER TO THE FILE OF THE AO AND THE ASSESSEE FAILED TO COMPLY WITH THE DIRECTION OF THE TRIBUNAL. THE LEARNED DR SUBMITTED THAT THE ASSESSEE TOOK THE PLEA BEFORE THE TRIBUNAL THAT THE ORDER IN THE CASE OF SHRI NAZIR ALI S. SATANI M AY BE FOLLOWED WHILE REMANDING THE MATTER TO THE FILE OF THE AO AND THE TRIBUNAL ACCEPTED THE PLEA OF THE ASSESSEE BUT THE ASSESSEE FAILED TO COM PLY WITH THE DIRECTION OF THE TRIBUNAL BEFORE THE AO IN THE SET ASIDE PROC EEDINGS AND NOW TAKEN THE CONTRARY PLEA THAT NO BOOKS OF ACCOUNT HAVE BEE N MAINTAINED. THE IT (SS) A NO.22 AND 23/AHD/2007 KAMLESH M. PATEL AND JATIN M. PATEL VS ACIT CIR-3 BARODA 8 LEARNED DR SUBMITTED THAT SINCE THE ASSESSEE DID NO T EXPLAIN THE ISSUE BEFORE THE AO THEREFORE THE ADDITIONS MAY BE CONF IRMED AND NO FURTHER OPPORTUNITY MAY BE GIVEN TO THE ASSESSEE TO FURTHER EXPLAIN THE ISSUE. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSION AND THE MAT ERIAL AVAILABLE ON RECORD. WE HAVE GONE THROUGH THE EARLIER ASSESSM ENT ORDER DATED 29-04-1997 IN WHICH ADDITION OF RS.13 78 000/- WAS MADE WHICH ARE ALSO CHALLENGED IN THE PRESENT APPEAL COPY OF WHICH IS FILED AT PAGE 8 OF THE PAPER BOOK. THE AO IN THE INTERNAL PAGE 5 OF TH E ASSESSMENT ORDER (PB -12) CLEARLY MENTIONED REGARDING CONTENTION OF THE ASSESSEE REGARDING CASH CREDIT ADDITION THAT THE ARGUMENTS OF THE ASSE SSEE HAVE BEEN GIVEN DUE CONSIDERATION HOWEVER SINCE THE ASSESSEE HAS NO D OCUMENTARY EVIDENCE TO PROVE THE RECYCLING OF THE MONEY AND ESTABLISH T HE NEXUS BETWEEN THE WITHDRAWALS FROM DIFFERENT ACCOUNTS THE CONTENTION OF THE ASSESSEE CANNOT BE ACCEPTED. IT WOULD THEREFORE SHOW THAT EVEN IN THE ORIGINAL ASSESSMENT PROCEEDINGS THE PLEA OF THE ASSESSEE RE GARDING PEAK CREDIT ADDITION WAS NOT ACCEPTED BY THE AO. ALL THE REPLIE S FILED IN THE PAPER BOOK PERTAIN TO THE RELIES FILED BEFORE THE AO AT T HE ORIGINAL ASSESSMENT PROCEEDINGS. THUS THESE EXPLANATIONS OF THE ASSESS EE HAVE BEEN REJECTED BY THE AO. THE ASSESSEE PREFERRED APPEAL BEFORE THE TRIBUNAL WHICH WAS DECIDED VIDE ORDER DATED 16-05-2005 AS IS NOTED IN THE ASSESSMENT ORDER ALSO. COPY OF THE ORDER OF THE TRIBUNAL IS FILED AT PAGE 70 OF THE PAPER BOOK. IT IS NOTED IN THE ORDER OF THE TRIBUNAL IN P ARA 3 THAT THE ASSESSEES REPRESENTATIVE SUBMITTED THAT THE APPEALS ARE IDENT ICAL TO THE APPEALS IN IT (SS) A NO.22 AND 23/AHD/2007 KAMLESH M. PATEL AND JATIN M. PATEL VS ACIT CIR-3 BARODA 9 IT(SS) A NOS. 17 19 20 AND 113/AHD/1997 FOR THE B LOCK PERIOD. THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE ALSO SUBM ITTED BEFORE THE TRIBUNAL THAT IN THESE APPEALS THE BENCH HAS SENT B ACK THE MATTER TO THE FILE OF THE AO. THE TRIBUNAL FOUND THAT THE MATTER IS CONNECTED WITH THE AFORESAID APPEALS PERTAIN TO THE CASES OF SHRI NIZA R ALI S. SATANI. THE FINDINGS OF THE TRIBUNAL IN THAT CASE ARE REPRODUCE D ABOVE AS HAVE BEEN NOTED BY THE AO IN THE FRESH ASSESSMENT ORDER. IN T HAT CASE THE LEARNED COUNSEL OF THE ASSESSEE SUBMITTED BEFORE THE TRIBUN AL THAT TRANSACTIONS ARE FULLY REFLECTED IN THE BOOKS OF ACCOUNT AND DIS CLOSED BEFORE THE INCOME TAX AUTHORITIES. THEREFORE ADDITION CANNOT BE MADE AND SAME WOULD BE OUTSIDE THE PURVIEW OF THE BLOCK ASSESSMENT. ACCORD INGLY THE TRIBUNAL FOLLOWED THE ORDER IN THE ABOVE CASES IN IT (SS) A NO. 17 19 20 AND 113/AHD/1997 AND RESTORED THE MATTER TO THE FILE OF THE AO. THE FINDING OF THE TRIBUNAL IN PARA 7 ARE REPRODUCED AS UNDER: 7. AS STATED ABOVE THAT FACTS OF THE MATTER BEFORE US ARE ALSO CONNECTED TO THOSE APPEALS DECIDED BY THE ITAT CITED (SUPRA) WHEREIN THE MATTER HAS BEEN SENT BACK TO TH E FILE OF A. O. FOR DECIDING THE MATTER AFRESH. WE RESPECTFUL LY FOLLOW THE ABOVE ORDER OF ITAT IN IT (SS) A NO.17 19 20 & 113/AHD/1997 ORDER DATED 22-2-2005 AND IN VIEW OF T HAT WE ARE ALSO SENDING BACK THE MATTER TO THE FILE OF A. O. WITH THE IDENTICAL DIRECTION. THE A. O. IS DIRECTED ACCO RDINGLY. 11. THE ABOVE DIRECTION OF THE TRIBUNAL WOULD SHOW THAT WHILE REMANDING THE MATTER TO THE FILE OF THE AO THE TRI BUNAL NOTED THAT THE MATTER IS SENT TO THE AO WITH THE IDENTICAL DIRECTI ONS. THE TRIBUNAL FOLLOWED THE ORDER IN THE CASE OF SHRI NIZAR ALI S. SATANI AS NOTED ABOVE IN WHICH PLEA OF THE ASSESSEE WAS THAT SINCE THESE TRANSACTIONS ARE FULLY REFLECTED IN THE BOOKS OF ACCOUNT AND INTIMATED TO THE REVENUE IT (SS) A NO.22 AND 23/AHD/2007 KAMLESH M. PATEL AND JATIN M. PATEL VS ACIT CIR-3 BARODA 10 AUTHORITIES THEREFORE SAME WOULD BE OUTSIDE THE P URVIEW OF THE BLOCK ASSESSMENT. THE TRIBUNAL IN THAT CASE DIRECTED THE AO TO DECIDE THE ISSUE AFRESH IN THE LIGHT OF THE OBSERVATIONS/DIREC TIONS CONTAINED IN THAT ORDER. THE ABOVE FACTS NOTED IN THE ORDER OF THE TR IBUNAL WOULD SHOW THAT THE ASSESSEE IMPRESSED BEFORE THE TRIBUNAL THAT BOO KS OF ACCOUNT HAVE BEEN MAINTAINED AND SINCE IDENTICAL MATTER IS RESTO RED TO THE FILE OF THE AO FOR RECONSIDERATION AS ENTRIES ARE NOTED IN THE BOOKS OF ACCOUNT THEREFORE THE MATTER MAY BE RESTORED ON THE SAME W AY TO THE FILE OF THE AO. HOWEVER THE ASSESSEE DID NOT APPEAR BEFORE THE AO IN THE SET ASIDE PROCEEDINGS AND NO BOOKS OF ACCOUNT WERE PRODUCED. NO SUBMISSIONS HAVE BEEN MADE TO EXPLAIN THE ISSUES. NO EVIDENCE W AS FILED TO EXPLAIN THE ISSUE. THE ASSESSEE HAS THUS FAILED TO COMPLY W ITH THE DIRECTIONS OF THE TRIBUNAL. THE AO NOTED FROM THE RETURN OF INCOM E FOR THE EARLIER YEARS THAT THE ASSESSEE HAS NOT MAINTAINED ANY BOOK S OF ACCOUNT. THEREFORE IT IS CLEARLY TAKING A SOMERSAULT IN THE MATTER. THE ASSESSEE AT THE FIRST FOUND PROCEEDINGS BEFORE THE TRIBUNAL MADE A CONTRARY SUBMISSION AND NOW THE ASSESSEE MAINTAINED THAT NO BOOKS OF ACCOUNT ARE MAINTAINED AND BENEFIT OF PEAK CREDIT MAY BE GI VEN TO THE ASSESSEE. AS NOTED ABOVE AT THE ORIGINAL ASSESSMENT PROCEEDI NGS THE THEORY OF PEAK CREDIT WAS NOT ACCEPTED BY THE AO BECAUSE THE ASSESSEE HAS NO EVIDENCE TO PROVE RECYCLING OF THE MONEY AND ESTABL ISH THE NEXUS BETWEEN THE WITHDRAWALS FROM THE DIFFERENT ACCOUNTS . THE THEORY OF PEAK CREDIT WAS ACCORDINGLY REJECTED. ON GOING THROUGH T HE WHOLE OF THE ORDER OF THE TRIBUNAL DATED 16-05-2005 WE DO NOT FIND IF THE ASSESSEE RAISED THE PLEA OF PEAK CREDIT THEORY BEFORE THE TRIBUNAL. THERE IS NO WHISPER OF THE PEAK CREDIT THEORY IN THE ENTIRE ORDER OF THE T RIBUNAL WHILE REMANDING THE MATTER TO THE FILE OF THE AO. IT WOULD THEREFO RE SHOW THAT THE ASSESSEE NEVER AGITATED ABOUT PEAK CREDIT THEORY BE FORE THE TRIBUNAL. MORE SO THE ASSESSEE FAILED TO LAY DOWN FACTUAL FO UNDATION OF THE PEAK CREDIT AT THE ORIGINAL ASSESSMENT STAGE AS WELL AS IN THE SET ASIDE IT (SS) A NO.22 AND 23/AHD/2007 KAMLESH M. PATEL AND JATIN M. PATEL VS ACIT CIR-3 BARODA 11 PROCEEDINGS. HONBLE ALLAHABAD HIGH COURT IN THE CA SE OF BHAIYALAL SHYAM BEHARI VS CIT 276 ITR 38 HELD AS UNDER: IN ORDER TO ADJUDICATE UPON THE PLEA OF PEAK CREDI T THE FACTUAL FOUNDATION HAS TO BE LAID BY THE ASSESSEE. HE HAS TO OWN ALL CASH CREDIT ENTRIES IN THE BOOKS OF ACCOUNT AND ONLY THEREAFTER CAN THE QUESTION OF PEA K CREDIT BE RAISED. HELD THAT AS THE AMOUNT OF CASH CREDITS STOOD IN THE NAMES OF DIFFERENT PERSONS WHICH ALL ALONG THE ASSESSEE HAD BEEN CLAIMING TO BE GENUINE DEPOSITS WITHDRAWALS/PAYMENTS TO DIFFERENT PERSONS DURING TH E PREVIOUS YEARS THE ASSESSEE WAS NOT ENTITLED TO CL AIM THE BENEFIT OF PEAK CREDIT. 12. WE MAY ALSO NOTE THAT SINCE THE ISSUE OF PEAK C REDIT WAS NOT RESTORED TO THE FILE OF THE AO AS NOTED ABOVE THER EFORE THE AO WAS BOUND BY THE DIRECTION OF THE TRIBUNAL AND COULD NO T HAVE TAKEN UP THE MATTER WHICH WAS NOT RESTORED TO HIM. THE LIMITED I SSUE WAS RESTORED TO THE FILE OF THE AO; THEREFORE THE AO RIGHTLY DID N OT TAKE UP THE MATTER OF PEAK CREDIT IN THE SET ASIDE PROCEEDINGS. THE HON BLE ANDHRA PRADESH HIGH COURT IN THE CASE OF PULIPATI SUBBARAO AND CO. VS AACIT 35 ITR 673 HELD AS UNDER: THE PETITIONER FIRM WHICH WAS PREVIOUSLY ASSESSED IN THE STATUS OF A REGISTERED FIRM WAS ASSESSED FOR THE YEAR 1952-53 AS AN UNREGISTERED FI RM ON THE GROUND THAT IT DID NOT FILE AN APPLICATION F OR REGISTRATION. THE PETITIONER APPEALED TO THE APPELL ATE ASSISTANT COMMISSIONER NOT ON THE ACTUAL ASSESSMENT BUT ONLY WITH REGARD TO THE REFUSAL OF THE INCOME-T AX OFFICER TO TREAT THE FIRM AS A REGISTERED FIRM. THE APPELLATE ASSISTANT COMMISSIONER WAS SATISFIED THAT THERE WAS AN APPLICATION FOR REGISTRATION. HE THER EFORE SET ASIDE THE ASSESSMENT AND DIRECTED THE INCOME-TA X OFFICER TO RECEIVE A DUPLICATE APPLICATION AND TO D EAL WITH IT ACCORDING TO LAW. THE INCOME-TAX OFFICER CA LLED UPON THE PETITIONER TO PRODUCE ITS ACCOUNT BOOKS TO MAKE A FRESH ASSESSMENT. THE PETITIONER APPLIED TO THE HIGH COURT FOR THE ISSUE OF A WRIT OF PROHIBITION IT (SS) A NO.22 AND 23/AHD/2007 KAMLESH M. PATEL AND JATIN M. PATEL VS ACIT CIR-3 BARODA 12 RESTRAINING THE INCOME-TAX OFFICER FROM MAKING A DE NOVO ASSESSMENT: HELD THAT THE ORDER OF THE APPELLATE ASSISTANT COMMISSIONER DID NOT CONTAIN A DIRECTION THAT THE INCOME-TAX OFFICER SHOULD PROCEED TO MAKE A FRESH ASSESSMENT SUCH AS ENVISAGED UNDER SECTION 31(3) (B ) OF THE INCOME-TAX ACT THE ORDER WAS SPECIFIC AND ALL THAT THE APPELLATE ASSISTANT COMMISSIONER DIRECTED THE OFFICER TO DO WAS TO RECEIVE A DUPLICATE COPY OF TH E APPLICATION FOR REGISTRATION AND DISPOSE OF IT ACCO RDING TO LAW AND THEREFORE IT WAS NOT OPEN TO THE OFFICE R TO CONDUCT A FRESH ENQUIRY AND PROCEED TO MAKE A FRESH ASSESSMENT. THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF KATI HAR JUTE MILLS (P) LTD VS CIT 120 ITR 861 HELD AS UNDER: HELD THAT THE ENTIRE ASSESSMENT WAS NOT SET ASIDE BY THE AAC. ON THE CONTRARY HIS ORDER SET AS IDE ONLY THAT PART OF THE ORDER OF THE ITO WHICH WAS APPEALED AGAINST AND THAT ALSO WITH SPECIFIC DIRECT IONS TO THE ITO TO CONSIDER THE MATTER ON THAT PART ONLY . AS THERE WAS NO DISPUTE WITH REGARD TO THE ASSESSABILI TY OF THE SALE PROCEEDS OF THE LOOM HOURS AT ANY STAGE OF THE PROCEEDINGS THE AAC DID NOT CONSIDER THAT QUESTION AT ALL. THE ORDER OF THE AAC IF READ AS A WHOLE IN I TS PROPER CONTEXT WOULD CLEARLY SHOW THAT IT WAS NEITH ER THE INTENT NOR THE PURPOSE NOR THE IMPORT OF THE OR DER THAT THE WHOLE ASSESSMENT SHOULD BE SET ASIDE AND EVERYTHING SHOULD BE KEPT AT LARGE SO AS TO ALLOW T HE ITO TO MAKE A FRESH ASSESSMENT ON ALL THE ASPECTS O F THE CASE AND GIVE A FREE HAND TO THE ASSESSEE TO MA KE ALL CLAIMS AND ALL ARGUMENTS IN THAT ASSESSMENT. IN THE CIRCUMSTANCES OF THE CASE THE TRIBUNAL WAS RIGHT IN HOLDING THAT IN THE CASE OF AN APPEAL FROM AN ASSESSMENT MADE AFTER BEING SET ASIDE WITH THE DIRECTION BY THE AAC THE AAC WAS PRECLUDED FROM ENTERTAINING A NEW PLEA BASED ON THE LATEST DECISI ON OF THE SUPREME COURT IN THE SUBSEQUENT APPEAL. IT (SS) A NO.22 AND 23/AHD/2007 KAMLESH M. PATEL AND JATIN M. PATEL VS ACIT CIR-3 BARODA 13 THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF S. P. KOCHHAR VS ITO 145 ITR 255 HELD AS UNDER: WHEN THE TRIBUNAL SETS ASIDE THE ASSESSMENT AND REMANDS THE CASE FOR MAKING A FRESH ASSESSMENT THE POWER OF THE ITO IS CONFINED TO THE SUBJECT-MATTER OF APPEAL BEFORE THE TRIBUNAL. HE CANNOT TAKE UP THE QUESTION WHICH WAS NOT TH0E SUBJECT-MATTER OF APPEAL BEFORE THE TRIBUNAL EVEN THOUGH NO SPECIFIC DIRECTION HAS BEEN GIVEN BY THE TRIBUNAL. THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF SRI VINDHYA BASINI PRASAD GUPTA VS CIT (186 ITR 253) HELD AS UN DER: HELD (I) THAT IT WAS CLEAR FROM THE ORDER OF THE APPELLATE AUTHORITY THAT THE REMAND TO THE INCOME-TAX OFFICER WAS LIMITED ONLY TO ONE ISSUE. THE TRIBUNAL WAS RIGHT IN HOLDING THAT THE INCOME-TAX OFFICER COULD NOT CONSIDER OTHER QUESTIONS OR ENLARGE THE SCOPE OF THE PROCEEDINGS. NO QUESTION OF LAW AROSE FROM THE ORDER OF THE TRIBUNAL. THE HONBLE MADHYA PRADESH HIGH COURT INDORE BENCH IN THE CASE OF CIT VS HOPE TEXTILES LTD. (225 ITR 993) HEL D AS UNDER: IT IS WELL SETTLED THAT AN APPELLATE AUTHORITY WHILE REMANDING THE CASE CAN GIVE DIRECTIONS AND LAY DOWN LIMITS FOR THE ENQUIRY TO BE MADE BY THE LOWER COURT. WHEN SUCH A DIRECTION IS MADE AND LIMITS ARE LAID DOWN THE POWER AND JURISDICTION OF THE LOWER COURT TO DEAL WITH THE CASE AFTER REMAND DEPEND ON THE SPECIFICATIONS OF THE REMAND ORDER. THE LOWER COURT HAS NO JURISDICTION TO ENTER INTO ANY QUESTION WHICH FALLS OUTSIDE THIS LIMIT (SEE V. R. SUBRAMANYAM V. B. THAYAPPA AIR 1966 SC 1034 AND BUDHILAL DEVIPRASAD V. JAGANNATHDAS BAJRANGDAR AIR 1963 MP 344). IN THE INSTANT CASE THE COMMISSIONER OF INCOME-TAX (APPEALS) HAS IN ITS REMAND ORDER DATED JANUARY 30 1982 MADE A CLEAR DIRECTION TO THE ASSESSING IT (SS) A NO.22 AND 23/AHD/2007 KAMLESH M. PATEL AND JATIN M. PATEL VS ACIT CIR-3 BARODA 14 OFFICER TO RECONSIDER THE CASE ONLY ON THE MATTER RELATING TO THE DISALLOWANCE OUT OF MACHINERY REPAIRS. THE ASSESSING OFFICER HAD THEREFORE CLEARLY TRAVELED BEYOND THE SPECIFICATIONS OF THE REMAND ORDER IN MAKING THE AFORESAID ADDITIONS AND THE APPELLATE AUTHORITIES WERE THEREFORE RIGHT IN DELETING THE SAID ADDITIONS. THE ORDER OF THE TRIBUNAL IS BASED ON PROPER APPRECIATION OF THE SETTLED LEGAL POSITION AND DOES NOT THEREFORE GIVE RISE TO ANY REFERABLE QUESTION OF LAW. 13. THE ASSESSEE DESPITE GIVING OPPORTUNITY TO EXPL AIN THE ISSUES/ADDITIONS BEFORE THE AO DELIBERATELY DID NO T EXPLAIN ANY OF THE ADDITIONS THEREFORE AO RIGHTLY CONCLUD ED THE ISSUES AGAINST THE ASSESSEE AND THE FINDING OF THE AO WERE BASED UPON APPRECIATION OF THE SEIZED MATERIAL FOUN D DURING THE COURSE OF SEARCH. CONSIDERING THE ABOVE DISCUSS IONS IT IS CLEAR THAT THE ASSESSEE HAS FAILED TO EXPLAIN THE I SSUES BEFORE THE AO NOT ONLY IN THE ORIGINAL ASSESSMENT PROCEEDI NGS BUT IN THE SET ASIDE PROCEEDINGS ALSO. THE DIRECTION OF TH E TRIBUNAL HAS NOT BEEN COMPLIED WITH. THEREFORE THERE IS NO REASON TO INTERFERE IN THE ORDER OF THE AO. SINCE THE ASSESSE E HAS FAILED TO COMPLY WITH THE DIRECTION OF THE TRIBUNAL AND AL SO FAILED TO AVAIL THE OPPORTUNITY OF BEING HEARD IN THE SET ASI DE PROCEEDINGS THERE IS NO REASON TO GIVE FURTHER OPP ORTUNITY TO THE ASSESSEE TO EXPLAIN THE ISSUE BEFORE THE AO IN THE THIRD ROUND PROCEEDINGS. WE THEREFORE DO NOT FIND ANY M ERIT IN THE CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE. WE IT (SS) A NO.22 AND 23/AHD/2007 KAMLESH M. PATEL AND JATIN M. PATEL VS ACIT CIR-3 BARODA 15 THEREFORE DO NOT FIND ANY MERIT IN THE APPEAL OF T HE ASSESSEE. SAME IS ACCORDINGLY DISMISSED. 14. IN THE RESULT THE APPEAL OF THE ASSESSEE IS DI SMISSED. IT (SS) A NO.23/AHD/2007 (ASSESSEE: JATIN M. PATEL) 15. THIS IS FILED ON THE FOLLOWING GROUNDS: 1. THE LEARNED ASSESSING OFFICER HAS ERRED IN LAW AND IN FACTS IN DISALLOWING THE CLAIM OF THE APPELLANT IN REGARD TO LOSS ON ACCOUNT OF TRADING IN SHARES IN COMPLETE DISREGARD TO THE FACTS AVAILABLE AND LAW PERSISTING AND PLACING RELIANCE ON IRRELEVANT CONSIDERATION AND MATERIAL COLLECTED AT THE BACK OF THE APPELLANT AND THEREFORE ON CONSIDERATION OF FACTS AND LAW THE LEARNED ASSESSING OFFICER BE DIRECTED TO FOLLOW THE CLAIM OF LOSS ON TRADING IN SHARES AS CLAIMED. 2. THE LEARNED ASSESSING OFFICER HAS ERRED IN LAW AND IN FACTS IN MAKING AN ADDITION OF RS.50 000/- ON ACCOUNT OF DISCLOSED INCOME INVESTED IN SHARES HAVING COMPLETE DISREGARD TO THE AVAILABLE MATERIAL ON RECORD AND ALSO THE LAW AND THEREFORE THE LEARNED ASSESSING OFFICER BE DIRECTED TO DELETE THE ENTIRE ADDITION OF RS.50 000/-. 3. THE LEARNED ASSESSING OFFICER HAS ERRED IN LAW AND IN FACTS IN MAKING AN ADDITION OF RS.98 186/- AS UNDISCLOSED INCOME OF THE ASSESSEE HAVING COMPLETE DISREGARD TO THE FACTS OF THE CASE AND LAW SUBSISTING AND THEREFORE THE LEARNED ASSESSING OFFICER BE DIRECTED TO DELETE THE ENTIRE ADDITION OF RS.98 186/- MADE ON THIS ACCOUNT. 4. THE LEARNED ASSESSING OFFICER HAS ERRED IN MAKING AN ORDER IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE AND WITHOUT AFFORDING IT (SS) A NO.22 AND 23/AHD/2007 KAMLESH M. PATEL AND JATIN M. PATEL VS ACIT CIR-3 BARODA 16 REASONABLE OPPORTUNITY OF BEING HEARD AND ALSO RELYING ON MATERIAL WHICH WAS NEVER REFERRED TO THE APPELLANT AND COLLECTED AT THE BACK OF THE APPELLANT AND SUCH ORDER BEING BAD IN LAW I0S PRAYED TO BE CANCELLED/QUASHED. 16. THE LEARNED REPRESENTATIVES OF BOTH THE PARTIES SUBMITTED THAT THE ISSUE IS SAME AS IS CONSIDERED IN THE CASE OF KAMLESH M. PATEL. BY FOLLOWING THE ORDER IN THAT CASE WE D ISMISS THIS APPEAL OF THE ASSESSEE ALSO. 17. IN THE RESULT BOTH THE APPEALS OF THE DIFFEREN T ASSESSEES ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT TODAY ON 22-09-2 010 SD/- SD/- (D. C. AGRAWAL) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 22-09-2010 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANTS 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR ITAT AHMEDABAD 6. GUARD FILE BY ORDER DY.R/AR ITAT AHMEDABAD