The Commissioner Of Income Tax v. M/S.anewera International Marketing

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTIONINCOME TAX APPEAL NO.1238 OF 2008 The Commissioner of Income Tax, ..Appellant Vs. M/s.Anewera International Marketing..Respondent Mr.Suresh Kumar for the Appellant.Mr.P.J.Pardiwalla, Senior Advocate with Mr.V.Joshii/b.S.G.Dalal for the Respondent. CORAM :- DR.S.RADHAKRISHNAN &V.C.DAGA, JJ.DATE : 4TH DECEMBER, 2008 P.C. 1.Heard the learned Counsel for the parties. By way of present Appeal, the Appellant is seeking to raise the following substantial questions of law: a. Whether on the facts and in thecircumstances of the case the Hon’ble Tribunalis justified in law in deleting the additionof Rs.3.07 crores on the ground that thisaddition could not have been made in Blockassessment even though the addition was madeas a result of information collected duringthe course of search in Khandar group of casesand enquiries made thereafter in Khandar groupof cases ?b. Whether on the facts and in thecircumstances of the case the Hon’ble Tribunalwas right in law in deleting the addition ofRs.2.65 lac made by the Assessing Officer onaccount of interest to be received ?c. Whether on the facts and in thecircumstances of the case the Hon’ble Tribunalwas right in law deleting the addition ofRs.1.75 lac made by the Assessing Officer onaccount of interest accrued ?d. Whether on the facts and in thecircumstances of the case the Hon’ble Tribunal was right in law deleting the addition Rs.11.57 lac made by the Assessing Officer account of trading loss ofon? 2. We have perused the order dated 26th September, 2007 passed by the Income Tribunal, especially paragraph Nos.5,7 and 8, which read as under: Tax Appellate 5. In the present case, the Assessing Officerasked the assessee to prove the genuineness ofthe various loans reflected in its books ofaccounts. It is not that the AssessingOfficer is coming to see those loans for thefirst time, that too as a result of the searchconducted on 27th November, 1995. The detailsof these loans are already with the assessingauthority before the date of search. Whetherthe returns were accepted under Section 143(1)or the assessments were completed underSection 143(3), is not a matter to be decidedby the assessee. It is for the assessingauthority to decide whether he should acceptthe return under section 143(1) or he shouldverify the return and pass an assessment orderunder Section 143(3). The Asessing Officermay opt for any of the above course of actionbut such an option exercised by the assessingauthority does not dilute the fact that theassessee has disclosed all these particularsto the income-tax department, even before thesearch. It is not possible to say that suchreturns filed by the assessees were acceptedunder section 143(1), there was no truedisclosure on the part of the assessee. 7. Therefore, it is to be seen that thefactum of availing of loans from variouspersons has already been disclosed by theassessee to the assessing authority with thedetails and particulars. It is notpermissible in law that the Assessing Officermay undertake further roving enquiries onmatters already disclosed by an assessee onthe ground that there was a search. TheAssessing Officer cannot review his own order,even in a course of block assessmentproceedings. Either the search or theenquiries made after the search should bringout specific materials to book the assesseeaccountable for undisclosed income. In thepresent case, whether the loans were genuineor not is a matter that could be enquired by there is no merit in the above Appeal. Hence, the Appeal stands dismissed. (V.C.DAGA,J.) (DR.S.RADHAKRISHNAN,J.)