SHIVJI MANJI AMBA Vs. DEPUTY COMMISSIONER OF INCOME TAX
INCOME TAX APPELLATE TRIBUNAL
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R.N. SINGHAL, A.M. : -
(1.) THESE nine matters-seven appeals in all and two cross-objections by the assessee only-pertain to the same assessee and involve same/connected points. They were heard together. Hence, they are disposed of by a consolidated order.
(2.) Assessee has filed appeals for each of the five years involved, viz., asst. yrs. 1980-81 to 1984-85. Department has filed appeals only for two years, viz., asst. yrs. 1981-82 and 1982-83. In the context of those Departmental appeals assessee has filed cross-objections also.
On the first date of hearing the learned advocate for the assessee giving the background of the case explained that the assessee basically hailed from India but was a British subject settled in Kenya. He came to India in 1973 and through banking channels brought a total sum of Rs. 53,600. His two sons continued to live in Kenya. The assessee himself and his sons were only labourers and did not have any other activity of business or trading, etc. The sons sent moneys from Kenya sometimes through banking channels and sometimes otherwise. The moneys were deposited in banks and invested in NSCs. etc. For asst. yrs. 1980-81 to 1984-85 assessee was called upon to file the returns of income which were filed. It was submitted on behalf of the assessee that books of accounts were not maintained but on the basis of information available from bank accounts etc., some sort of cash books and ledgers were prepared. It was submitted that cash books and ledgers constituted the basis for the returns filed. Originally assessments for all the five years involved were made by adding back disbelieved items of receipt of cash e.g. alleged sale of gold ornaments, etc. On appeal, the first appellate authority passed a consolidated order dt. 25th July, 1985 holding that various aspects required "deep verification" by the Assessing Officer. He ultimately set aside the assessment orders with certain directions. In the second round of assessments the Assessing Officer changed the very basis of quantification of additions. He picked up the unexplained investments. In other words, against additions made in the first round on the basis of disbelieved credits he made additions in the second round on the basis of unexplained investment (i.e., debits). So, first and foremost contention of the assessee was that in the second round the Assessing Officer was not entitled to consider the items which were not considered in the first round. The learned advocate was specifically told that when the assessee has not maintained the books of account but had merely tried to reconstruct them subsequently, in his own way, the proper course would be to proceed on the basis of unexplained investments rather than on the basis of disbelieved receipts of cash shown on the credit side of the subsequently prepared books. Realising this position, the question that arose was that this would involve drawing up of statements for availability of money with the assessee at the beginning of each year and that in turn would depend upon the acceptance or rejection of assessees explanation for each item of cash shown as received. In this context the learned advocate explained that in the second round of assessments the Assessing Officer has not taken into account even the conclusively proved receipts of money e.g., for interest from banks and on maturity of National Saving Certificates, etc. He at this stage offered to prepare different sets of statements on the basis of different assumptions regarding acceptance or rejection of assessees explanation and claim of receipt of money. Accordingly, on the next date of hearing, viz., 23rd Dec., 1993 he has furnished three sets of statements. First statement is on the basis of assessees own claims, second is by ignoring the receipts of money disbelieved by the Department and the third is basically on the lines of the second statement but by ignoring small deposits, etc., in the bank account which are not specifically questioned by the Department. It is explained that on the basis of second statement, i.e., by ignoring the questioned receipts of money and by considering also the small deposits in the bank, etc., total addition for asst. yrs. 1980-81 to 1982-83 would be Rs. 1,05,175 while as per the third statement, i.e., by ignoring the questioned receipts of money and also ignoring the small deposits in the bank accounts, etc., at different times the total addition in these three years would come to Rs. 97,375. On this aspect, we would agree in principle with the learned advocate for the assessee that for our further discussion statement No. 3 should form the basis. This is so because the difference of total addition is less than Rs. 8,000 (difference between Rs. 1,05,175 and Rs. 97,374) and secondly because apart from the fact that Department has not questioned small deposits made in the banks some benefit of availability of cash of labour charges, etc., should be given to the assessee.
(3.) EVEN at the cost of repetition it may be mentioned that in quantifying the additions in the second round of assessment orders the Assessing Officer has not taken into account even the proved bank withdrawals and moneys available on maturity of NSCs, etc. We agree with the learned advocate for the assessee that for making additions even on the basis of unexplained parts of investment, the availability of money from the bank withdrawals and on maturity of NSC, etc. cannot and should not be ignored.;
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