Ita/7/2003 Of Commissioner Of Income Tax Udaipur v. Shri Prameshwar Bohra

D.B. INCOME TAX APPEAL NO.7/2003Commissioner of Income Tax, UaipurVs. ShriPrameshwar Bohra. Date of judgment January, 2007 : 04[th] PRESENT HON'BLE MR. JUSTICE RAJESH BALIAHON'BLE MR. JUSTICE CHATRA RAM JAT Mr. K.K. Bissa for the appellant.Mr. Anjay Kothari for the respondents ________ This appeal is directed against the order ofthe Income Tax Appellate Tribunal, Jodhpur BenchJodhpur dated 6[th] Dec., 2001. While admitting theappeal on 17.2.2003, the following question of law havebeen framed as substantial questions of law forconsideration in this appeal:- 1. Whether on the facts and in thecircumstances of the case, the I.T.A.T.Was justified in quashing the noticeissued on 17.6.1997 under Section 148of I.T. Act for the Assessment Year1993-94 by resorting to provide toSection 147 even by holding that thereis no failure on the part of assessee indisclosing fully and truly all material 2 facts necessary for the assessment inquestion? 2.Whether on the facts and in thecircumstances of the case, and on acorrect interpretation of Sections 68 and69 of the Income Tax Act, 1961, theTribunal was right in holding that theunexplained investment/cash creditamounting to Rs.1,55,316/- appearingin the books of accounts on the first dayof previous year relevant to theassessment year 1993-94 was nottaxable as income of the assessee forthe said previous year? circumstances of the case, and on acorrect interpretation of Sections 68 and69 of the Income Tax Act, 1961, theTribunal was right in holding that theunexplained investment/cash creditamounting to Rs.1,55,316/- appearingin the books of accounts on the first dayof previous year relevant to theassessment year 1993-94 was nottaxable as income of the assessee forthe said previous year? The first question does not give out the realpicture of the controversy raised and decided by theTribunal inasmuch as it is not a case in which thequestion of expiry of limitation for assuming jurisdictionto issue notice under Section 148/147 arises forconsideration. In fact, the impugned notice for re-assessment of the income for assessment year 1993-94has been issued on 17.6.1997 that is to say beforeexpiry of 4 years from the end of the assessment year 1993-94, hence, the case falls within the province ofproviso to Section 147 or under Section 149 providinglimitation for initiating proceeding under Section 147which remains within limitation. The question really wasraised about the validity of taking action under Section147 at all. In fact, in relation to the assessment year1993-94, under Section 147 the first notice was issuedon 11[th] July, 1996 itself and the income which allegedlyescaped assessment from tax was the one which issubject matter of question No.2 that is to say anamount of investment/ cash credit of Rs.1,55,316/- wasappearing in the books of account of the assessee on thefirst date of previous year relevant to the assessmentyear 1993-94 that is to say on 1[st] April, 1992 or in otherwords that was carried forwarded from the previous yearending on 31[st] March, 1992. The notice issued on 11[th] July, 1996 was notpursued by the Assessing Officer inter alia on theground that it was issued without obtaining priorapproval from the Addl. CIT and hence, after seekingprior approval of the Addl. CIT fresh notice was issued under Section 147/148 on 17[th] June, 1997. Theassessee has raised contention that since first notice wasalready pending, the second notice could not have beenissued and secondly, that there is no provision in theIncome Tax Act to vacate the already issued notice andconsidering it to be pending, by ignoring the vacationorder, no fresh notice could be issued. The notice issued on 11[th] July, 1996 was notpursued by the Assessing Officer inter alia on theground that it was issued without obtaining priorapproval from the Addl. CIT and hence, after seekingprior approval of the Addl. CIT fresh notice was issued under Section 147/148 on 17[th] June, 1997. Theassessee has raised contention that since first notice wasalready pending, the second notice could not have beenissued and secondly, that there is no provision in theIncome Tax Act to vacate the already issued notice andconsidering it to be pending, by ignoring the vacationorder, no fresh notice could be issued. Apparently the question No.1 has not beenframed to bring out this controversy. The question No.2is a question which relates to the merits of the additionsmade in the assessee's income through re-assessmentas we shall presently notice that the question No.2deserves to be decided in favour of the assessee andagainst the Revenue, we do not deem it necessary toreframe the question about the validity of re-assessmentproceedings in the present case as it would not benecessary to decide the case. On the merit of the additions made in theincome of the assessee, there is a clear finding andabout which there is no dispute that the amount added in the income of the assessee as unexplained investmentor cash credit in the assessment year 1993-94 was thesame amount which was credited in the books ofaccount of the assessee for previous year ending on 31[st]March, 1992. The Tribunal has categorically come to afinding, and that finding is not under challenge, that thisis not a case of cash credit entered in the books ofaccount of the assessee during the year but it is a casein which the assessee has invested the capital in thebusiness and this amount was shown as a closing capitalas on 31[st] March, 1992 and on 1[st] April, 1992 it was anopening balance. Considering this aspect, the Tribunalhas come to the conclusion that what was alreadycredited in the books of accounts ending on 31[st] March,1992 for financial year 1991-92 relevant to AssessmentYear 1992-93 cannot be an unexplained cash credit orinvestment in the books of account maintained for thefinancial year 1992-93, the accounting period of whichends on 31[st] March, 1993 so as to warrant itsconsideration as unexplained investment or cash creditfor its relevant assessment year 1993-94. It does not require any elaborate argumentthat a carried forward amount of the previous year doesnot become an investment or cash credit generatedduring the relevant year 1993-94. This alone issufficient to sustain the order of the Tribunal in deletingthe amount of Rs.1,55,316 from the assessment forassessment year 1993-94. Since the appeal succeeds onthe merit of the assessee's case in respect of theadditions made in the income computed onreassessment the validity of notice dated 17.6.1997need not be gone into. Accordingly, this appeal fails and is herebydismissed. No order as to costs. , J. [ RAJESH BALIA ], J. babulal/