APARESH KUMAR SINGH, J. - (1.) HEARD learned counsel for the parties.
(2.) THE present appeal is directed against the order passed by the learned ITAT, Circuit Bench, Ranchi in I.T. (SS) No. 63/Pat/2001 dated 23rd January 2002, whereunder the learned ITAT has dismissed the appeal and affirmed the order of the Commissioner of Income Tax (Appeals) dated 31st May 2001 in W.T./ W.T./E.D./IT/Appeal No. 378/Ran/S&S/99 -2000 and remitted the matter to the Assessing Officer i.e. Assistant Commissioner of Income Tax, Investigation Circle to re -examine the issue afresh. The brief facts of the case of the appellant are that the appellant submitted his returns for the block period 1st April 1987 to 27th October 1997 on notice issued after a search conducted in his premises under section 132(1) of the Income Tax Act, 1961 on 27th October 1997. A notice under section 158BC of the IT Act was issued to the Assessee on 25th March 1998. On 5th October 1999 a notice under section 142(1) of the Income Tax Act was issued by the Joint Commissioner, Income Tax in connection with the assessment for the block period 1st April 1987 to 27th October 1997 asking him to produce the Books of Account and documents. The Assessee filed his returns wherein he has declared undisclosed total income of Rs. 8,85,000/ - representing undisclosed investment made in acquiring relief bonds with the aforesaid sum. On clarification again being sought, the Assessee submitted his explanation whereupon notices under section 158BFA(2) of the Income Tax Act were issued asking him to show reasonable cause as to why he failed to furnish return of the undisclosed income. The appellant assessee appeared and replied to the show -cause. By order dated 29th October 1999, the Assessing Officer / Assistant Commissioner of Income Tax, Investigation Circle, Ranchi found the undisclosed salary income of Rs. 3,39,900/ -; unexplained payment on account of purchase of property totalling Rs. 3,00,000/ -; unexplained investment in shares and bonds to the tune of Rs. 8,85,000/ -. Consequently, on the basis of appreciation of seized documents, assessment have been made on total income of Rs. 15,24,000/ - out of which, undisclosed income of Rs. 8,85,000/ - have been given deduction, thereby assessment have been made on the total income of Rs. 6,39,900/ -. Being aggrieved, the Assessee preferred an appeal before the Commissioner of Income Tax (Appeals), Ranchi. The Appellate Authority vide order dated 31st May 2001, after considering the submission of the Assessee and the Department of Revenue on the first ground of challenging the addition of Rs. 3,39,900/ - as undisclosed salary income, held that the addition of the salary income of Rs. 1,80,000/ - for the assessment year 97 -98 made on the basis of certificate seized from the possession of the appellant, was proper. However, the said certificate could not be made a basis for estimate for other periods, as every assessment year is a self contained assessment year and block assessment has to be made on the basis of actual seizure made in the course of search operation. There was no material on record to suggest that for the other periods, the appellant was actually in receipt of salary income of Rs. 1,80,000/ -. The Commissioner of Income Tax (Appeals) therefore directed the AO to take the salary of the appellant of Rs. 1,80,000/ - for the assessment year 1997 -98 and deleted the addition for the subsequent period. The appellant accordingly got the relief of Rs. 1,59,500/ -. On the next ground of appellant's challenge to the addition of Rs. 3,00,000/ - under the head 'unexplained payment' on account of purchase of property of Rs. 3,00,000/ -, the Commissioner (Appeals) held that proper inquiries have not been conducted in this regard by the AO on the basis of paper said to have been seized by the AO and relied as statement of one P.P. Sharma. The Commissioner (Appeals) held that in order to come to a finding in relation to such addition, the Assessing Officer should have confronted P.P. Sharma as the seized document was found from his possession and not from the possession of the appellant himself. The Commissioner (Appeals) remitted the issue to the file of the AO to re -examine the issue afresh in the light of the direction given. In the result, the appeal was partly allowed.
(3.) THE appellant thereafter preferred an appeal before the ITAT, Circuit Bench, Ranchi in I.T.(SS) No. 63/Pat/2001 challenging the addition of salary income for the period 1st April 1995 to 31st March 1996 asserting that the Assessee was getting Director's remuneration of Rs. 48,000/ - from M/s Runga Projects Limited from 1st April 1995. Learned Tribunal on hearing the department's representative as well as the Assessee, came to a conclusion that the learned CIT has rightly deleted the addition of undisclosed salary income for the subsequent year as the addition made by the Assessing Officer was not proper. It also found that on the basis of rectification petition under section 154 of the Income Tax Act, the Assessee should get further relief of Rs. 48,000/ - on the basis of own averments made by the learned CIT (Appeals). Learned Tribunal further allowed the relief of Rs. 48,000/ - on the addition of undisclosed salary of Rs. 1,80,000/ - in the financial year 1995 -96. In relation to other grounds raised by the Assessee relating to the addition of Rs. 3,00,000/ - alleged to have been paid by one P.P. Sharma to Sarswati Kunj Cooperative House Building Society, the learned Tribunal after consideration of the submission of the parties, came to a conclusion that the learned AO should have cross -verified the same from the society and thereafter, this amount ought to be taxed in the hands of the Assessee as his undisclosed income, which the AO has failed to do. Learned Tribunal therefore upheld the order of the CIT (Appeals) for directing the AO to examine the issue afresh in the light of the direction and observations made by him under section 250. In the result, the appeal filed by the Assessee was partly allowed.;