- (1.) The appellant is an individual by status and is a Doctor by profession, running a clinic. The appellant alleges that he was filing his return regularly. For the assessment year 2002-03 the appellant filed his return under Section 139 (1) of the Income Tax Act (hereinafter referred to as the "Act") disclosing an income of Rs.7,20,377/- . In the return the appellant disclosed an income of Rs.35,85,930/- under the head "long term capital gains" arising from sale of shares. In this return, the appellant claimed exemption under Section 54-F on the income shown under the head "long term capital gains" indicating that the amount was invested in the construction of a house.
(2.) Before the return could be processed, a search and seizure operation was carried out under Section 132 of the Act at the appellant's residence and business premises. Based on this search operation, block assessment proceedings under Section 158BC was initiated for the block period commencing from the assessment year 1997-98 till the date of the search, i.e., 14.12.2002. The block assessment proceedings covered the assessment year 2002-03 in which extensive query on the sale of shares and purchases of shares was inquired and discussed. The assessing authority passed an assessment order dated 28.9.2004 holding that the whole transaction was a sham transaction with regard to the claim of long term capital gains and that it was merely an entry for claiming false exemption under Section 54-F of the Act. The assessing officer, accordingly, held that the amount of Rs.36,60,072/- was undisclosed income and added the same to the income of the assessee for the assessment year 2002-03. Aggrieved by the block assessment order dated 28.9.2004 the appellant filed an appeal, which was allowed by an order dated 28.4.2006. The appellate authority held that the amount of Rs.36,60,072/- could not be added as an undisclosed income of the assessee as it was not based on the material seized during the course of search and seizure operation under Section 132 of the Act and, therefore, the said amount was liable to be deleted. The revenue, being aggrieved by the appellate order dated 28.4.2006, preferred an appeal which was dismissed by the Tribunal by an order dated 23.5.2008. The Department did not pursue the matter thereafter before the higher forum and, consequently, the order passed by the Tribunal attained finality.
(3.) After the completion of the block assessment order dated 28.9.2004 the assessing officer issued a notice dated 30.3.2005 under Section 148 of the Act reopening the assessment proceedings for the assessment year 2002-03 on the sole ground that the assessee received an amount of Rs.1,65,000/- from M/s Shivani Hospital Private Limited, which was liable to be assessed in the hands of the appellant as deemed dividend under Section 2(22)(e) of the Act. Based on the aforesaid notice issued under Section 148 of the Act reassessment, an order under Section 147 of the Act was passed on 27.3.2006. In this reassessment order, the assessing officer made the additional dividend of Rs.1,65,000/- under the head "deemed dividend" on the account of advance received from M/s Shivani Hospitals Private Limited. The assessing officer further added an amount of Rs.36,60,072/- on account of the sale of shares. While adding the said amount, the assessing officer in its order held that this issue with regard to the long term capital gains was examined in detail in the block assessment order where an addition of Rs.36,60,072/- was made. However, in order to protect the interest of the revenue, this addition of Rs.36,60,072/- was again being made on a "protective basis".;