Palladam – 641 664 v. Commissioner Of Income Tax Central Circle-Ii, Coimbatore

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 17.02.2020 CORAM THE HON'BLE DR.JUSTICE VINEET KOTHARIANDTHE HON'BLE MR.JUSTICE R.SURESH KUMAR Tax Case (Appeal) No.176 of 2010 P.K.GaneshwarNo.21, Pollachi RoadPalladam – 641 664. Palladam – 641 664....Appellant Vs.Commissioner of Income TaxCentral Circle-II, Coimbatore....Respondent -----Tax Case filed under Section 260A of the Income Tax Actagainst the order dated 30.06.2009 passed in ITANo.1845/Mds/2002 by the Income Tax Appellate Tribunal 'D'Bench, Chennai against the order of the commissioner of IncomeTax (Appeals)-II,Coimbatore dated 25.10.2002 and made in ITAppeal No.86 c /2002-03 and against the order of the DeputyCommissioner of Income Tax,Central Circle II,Dated 21.03.2002for the Assessment Year 1997-98.-----For Appellant : Mr.R.Kumarfor M/s.T.N.Seetharaman For Respondent :Mr.T.R.Senthil KumarSenior Standing Counsel J U D G M E N T (Judgment of the Court was delivered by DR.VINEETKOTHARI,J.) The learned counsel for the Assessee submitted that in https://hcservices.ecourts.gov.in/hcservices/ view of the judgment of the Honourable Supreme Court in abatch of cases including that of the present appellantAssessee Mr.P.K.Ganeshwar (C.A.No.10164 of 2010) decided bythe Honourable Supreme Court on 02.05.2018 since reported in(2018) 404 ITR 526 SC [ CIT -Vs- S.Ajit Kumar, P.K.Ganeshwarand Braj Binani) , upholding the addition of Rs.2.56 Croresmade in the hands of the Assessee in the Block Assessment,another addition of the same amount in the Regular Assessmentproceedings under Section 143(3) of the Income Tax Act, 1961,cannot be sustained. 2. Learned counsel for the appellant further submittedthat after the aforesaid decision of the Honourable SupremeCourt, the Assessing Authority viz., the Deputy Commissionerof Income Tax, Circle-2,Tirupur had already passed an AppealGiving Effect Order on 05.11.2018, in which the addition ofRs.2.56 Crores has been made in the Block Assessment in thecase of the Assessee and net demand payable has been computedat Rs.38,16,510/- . 3. The Honourable Supreme Court in the aforesaid case[CIT -Vs- S.Ajit Kumar, P.K.Ganeshwar (present appellant videC.A.No.10165 of 2010) and Braj Binani) reported in (2018) 404ITR 526 SC, has held as under. “Held, allowing the appeal, that it is a cardinalprinciple of law that in order to add any income inthe block assessment, evidence of such must be foundin the course of the search under Section 132 of theAct or in any proceedings simultaneously conductedin the premises of the assessee or persons connectedwith the assessee and having transaction or dealingswith such assessee. In the present case, in responseto the notice under Section 158BC of the Act, theassessee filed a return admitting the cost ofinvestment and disclosing the details of transactionbetween the assessee and the builder in theassessment year 2001-02. However, he had notdisclosed the payment of Rs.95,16,000 in cash madeto the builder. The method of calculating theundisclosed income of the block period is providedunder Section 158BB of the Act. It can becalculated only on the basis of evidence found as aresult of search or requisition of books of accountor other documents and such other materials orinformation as are available with the AssessingOfficer and relatable to such evidence. Nodeparture from this provision is allowed, otherwiseit may cause prejudice to the assessee. However, Section 158BH of the Act, makes all other provisionsof the Act applicable to assessments made underChapter XIV-B except otherwise provided under thisChapter. The power of survey has been providedunder Section 133A of the Act. Therefore, anymaterial or evidence found in a survey which hasbeen simultaneously made at the premises of aconnected person can be utilised while making theblock assessment in respect of an assessee underSection 158BB read with Section 158BH of the Act.This would fall under the words “and such othermaterials or information as are available with theAssessing Officer and relatable to such evidence”occurring in Section 158BB of the Act. TheAssessing Officer was justified in taking theadverse material collected or found during thesurvey or any other method while making the blockassessment.” 4. The relevant portion of the order of the learnedTribunal dated 30.06.2009 for Assessment Year 1997-98, whichdeals with assessment under Section 143(3) of the Act,confirming repetitive addition of the same amount, is alsoquoted below for ready reference. “ 33. In view of the facts and circumstances of thecase, and the position in law as discussed in theabove paragraphs, we are of the considered opinionthat the order of the CIT (A), confirming theaddition of Rs.2.56 Crores, does not call for anyinterference. His order is, accordingly confirmed.Therefore, the 'third issue' raised through groundNo.3 is decided against the assessee.” 5. Obviously, the same addition on account of allegedundisclosed income cannot be made in the hands of the Assesseetwice over, once in the Block Assessment under Section 153BCof the Act and second time in the Regular Assessment underSection 143(3) of the Act, from which proceedings the presentorder of the learned Tribunal has arisen. 6. Therefore, in these circumstances, we set aside theearlier order passed under Section 143(3) of the Act by theAssessing Officer, Commissioner of Income Tax (Appeals) and https://hcservices.ecourts.gov.in/hcservices/ the learned Tribunal. We remand the case back to theAssessing Officer to pass fresh orders in accordance with theorder passed by the Hon'ble Supreme Court, within a period ofthree months from today. The appeal is disposed ofaccordingly. No costs. Sd/- Assistant Registrar(CS VIII) //True Copy// Sub Assistant RegistrarKSTTo1. Commissioner of Income Tax Central Circle-II, Coimbatore.2. Income Tax Appellate Tribunal 'D' Bench, Chennai3. The Deputy Commissioner of Income Tax,Central CircleII,Coimbatore.+1cc to Mr.T.R.Senthil Kumar , Advocate SR.No. 14000T.C.A.No.176 of 2010A.SK(26/05/2020)