Sri Bajarang Prasad Agarwal, Secunderabad v. ITO, Hyderabad

ITA 1030/HYD/2009 | 1998-1999
Pronouncement Date: 29-01-2010 | Result: Partly Allowed

Appeal Details

RSA Number 103022514 RSA 2009
Assessee PAN ABFPA5380D
Bench Hyderabad
Appeal Number ITA 1030/HYD/2009
Duration Of Justice 3 month(s) 29 day(s)
Appellant Sri Bajarang Prasad Agarwal, Secunderabad
Respondent ITO, Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 29-01-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 22-01-2010
Assessment Year 1998-1999
Appeal Filed On 30-09-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B HYDERABAD BEFORE SHRI N.R.S. GANESAN JUDICIAL MEMBER AND SHRI CHANDRA POOJARI ACCOUNTANT MEMBER ITA NO.1030/HYD/2009 : ASSTT. YEAR 1998-1999 SHRI BAJRANG PRASAD AGARWAL HYDERABAD (PAN ABFPA 5380D) ITO WARD NO.4(4) HYDERABAD (APPLICANT) (RESPONDENT) APPLICANT BY : SHRI M.V. ANIL KUMAR RESPONDENT BY : SMT. VASUNDHARA SINHA DR O R D E R PER: CHANDRA POOJARI ACCOUNTANT MEMBER THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGA INST THE ORDER OF THE CIT(A) V HYDERABAD DATED 27/8/2009 AND PER TAINS TO THE ASSESSMENT YEAR 1998-99. 2. THE ASSESSEE RAISED THE FOLLOWING GROUNDS: 1. THAT THE CIT(A) AND ASSESSING OFFICER ARE WRON G IN LAW AND FACTS OF THE CASE IN INFERRING THAT INCOME HAD ESCAPED ASSESSMENT FOR THIS ASSESSMENT YEAR WHEN THE DATE OF INVESTMENT IN THE SHARES WERE VERY MUCH AVA ILABLE WITH THE DEPARTMENT THE NOTICE U/S 147 READ WITH 148 IS NOT VALID AND THE A SSESSMENT MAY BE QUASHED. 2. THAT THE ITO ERRED IN USING CONTENTS OF THE VDIS SCHEME TO ISSUE NOTICE U/S 148 OF THE IT ACT 1961. 3. WITHOUT CONCEDING THAT EVEN IF THE CONTENTS OF T HE VDIS DECLARATION CAN BE USED AS EVIDENCE AGAINST THE ASSESSEE ON THE FACTS AND CIR CUMSTANCES OF THE CASE THEY DO NOT CONSTITUTE INFORMATION FOR THE ASSESSMENT YEA RS IN QUESTION AS THE INFORMATION EVEN ACCORDING TO SUCH DECLARATION PERTAINS TO ASSE SSMENT YEARS OTHER THAN THE ASSESSMENT YEARS IN QUESTION. 4. THAT THE INCOMES ARE WRONGLY ASSESSED TO THIS YE AR. THAT THE ITO AND CIT(A) HAS ERRED IN ASSESSING THE INCOMES U/S 69 OF THE IT ACT 1961 AS UNEXPLAINED INVESTMENTS. SECTION 69 OF THE IT ACT READS AS UND ER: WHERE IN THE FINANCIAL YEAR IMMEDIATELY PROCEEDING THE ASSESSMENT YEAR THE ASSESSEE HAS MADE INVESTMENTS WHICH ARE NOT RECORDE D IN THE BOOKS OF ACCOUNT IF 2 2 ANY MAINTAINED BY HIM FOR ANY SOURCE OF INCOME AN D THE ASSESSEE OFFERS NO EXPLANATION OFFERED BY HIM IS NOT IN THE OPINION OF THE ASSESSING OFFICER SATISFACTORY THE VALUE OF THE INVESTMENT MAY BE DEEMED TO BE THE INCOME OF THE ASSESSEE OF SUCH FINANCIAL YEAR. 5. THAT THE IMPUGNED INCOME SHOULD HAVE BEEN ASSES SED IN THE RELEVANT PREVIOUS YEAR TO WHICH THESE INCOMES RELATE I.E. ASSESSMENT YEARS 1990-91 TO ASSESSMENT YEARS 1994-95. 3. BRIEF FACTS OF THE CASE THAT THE THE ASSESSEE FILE D DECLARATION UNDER THE VOLUNTARY DISCLOSURE OF INCOME SCHEME 1997 (VDIS97) U/ S 65(1) OF THE FINANCE ACT 1997. IN THE DECLARATION SO FIELD THE ASSE SSEE HAD SHOWN INVESTMENT IN UNDISCLOSED ASSETS IN THE FORM OF SHARES IN HIS OWN NAME TO THE EXTENT OF RS.2 78 00 000. HOWEVER THE ASSESSEE DID NOT PAY THE TAXES AS REQUIRED UNDER VDIS 1997. IN THE DECLARATION MADE THE ASSESSEE FURNISHED THE DETAILS OF INVESTMENT IN SHARES AS UNDER: S.NO AMOUNT OF INCOME DECLARED RS. ASSESSMENT YEARS TO WHICH THE INCOME RELATES DESCRIPTION OF ASSETS 1 16 15 000 1990-91 SHARES OF NANDI FABRICS (P) LTD . 2 35 00 000 1991-92 SHARES OF NANDI FABRICS (P) LTD . 3 25 00 000 1992-93 SHARES OF NANDI FABRICS (P) LTD . 4 23 00 000 1993-94 SHARES OF SIYARAM TEXTILES P LT D. 5 2 00 000 1994-95 SHARES OF NEW VIJAYA LAXMI OIL EXTRACTION REFINERY P LTD. 6 30 00 000 1994-95 SHARES OF PIONEER SYNTEX P LTD. 7 66 40 000 1994-95 INVESTMENT IN SRIRAM MILLS 8 70 00 000 1994-95 LOAN TO SURESH KUMAR AGARWAL 9 8 00 000 1994-95 INVESTMENT IN BP EXPORTS 10 2 45 000 1994-95 CASH TOTAL 2 78 00 000 3.1 THE COPIES OF RELEVANT ENTRIES IN THE BOOKS OF BAJ RANG PRASAD AGARWAL FOR THE FINANCIAL YEAR 1997-98 FILED ALONG WITH THE DECLARATION ARE REPRODUCED AS UNDER: SHARES OF NANDI FABRICS (P) LTD. 16 15 000 SHARES OF NANDI FABRICS (P) LTD. 35 00 000 SHARES OF NANDI FABRICS (P) LTD. 25 00 000 SHARES OF SIYARAM TEXTILES P LTD. 23 00 000 SHARES OF NEW VIJAYA LAXMI OIL EXTRACTION REFINERY P LTD. 2 00 000 3 3 SHARES OF PIONEER SYNTEX P LTD. 30 00 000 INVESTMENT IN SRIRAM MILLS 66 40 000 LOAN TO SURESH KUMAR AGARWAL 70 00 000 INVESTMENT IN BP EXPORTS 8 00 000 CASH 2 45 000 TO VDIS 2 78 00 000 SD/- (BP AGARWAL) 3.2. SINCE THE ASSESSEE DID NOT PAY TAXES AS PER THE DE CLARATION FILED UNDER VDIS 97 NOTICE U/S 148 WAS ISSUED TO THE ASSESSEE AFT ER RECORDING REASONS AS UNDER: 3.3. IT IS FURTHER SUBMITTED THAT THE ASSESSEE FILED DE CLARATION U/S 65(1) OF VDIS 1997 BEFORE CIT-II HYDERABAD ON 31.12 .1997 DECLARING A TOTAL INCOME OF RS.2 78 00 000/- BEING INVESTMENT MADE IN SH ARES AND BRINGING THE SAME INTO BOOKS OF ACCOUNTS DURING THE FINANCIAL YEAR 19 97-98. BUT THE ASSESSEE HAS FAILED TO PAY ANY TAX AS PER THE ABOVE DECLA RATION. THUS THE INCOME LIABLE TO TAX HAS ESCAPED ASSESSMENT. 3.4. IT IS FURTHER SUBMITTED THAT NOTICE U/S 148 OF T HE ACT WAS ISSUED AFTER OBTAINING APPROVAL OF THE CIT HYDERABAD AS PE R LAW. THEREAFTER SINCE THE ASSESSEE DID NOT FILED ANY RETURN NOR MADE ANY COMPL IANCE TO THE NOTICE U/S 148 OF THE ACT A SHOW CAUSE NOTICE WAS ISSUED TO THE ASSE SSEE ASKING TO EXPLAIN WHY THE DECLARATION UNDER VDIS NOT FOLLOWED BY THE PAYMENT OF TAXES SHOULD BE TREATED AS INCOME FROM UNDISCLOSED SOURCES. EVEN THOUGH THE AR OF THE ASSESSEE APPEARED YET NO INFORMATION WAS FILED. CO NSEQUENTLY THE ASSESSING OFFICER ADDED THE ENTIRE AMOUNT AS UNDISCLOSED IN VESTMENTS IN THE YEAR IN WHICH THE DECLARATION WAS FILED. 4 4 4. ON APPEAL TO CIT(A) CONFIRMED THE ORDER OF T HE ASSESSING OFFICER. AGAINST THIS THE ASSESSEE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD FROM BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. WITH REFERENCE TO REOPENING OF THE ASSESSMENT T HE SECTION 147 AUTHORIZES AND PERMITS THE ASSESSING OFFICER TO ASSESS OR REA SSESS INCOME CHARGEABLE TO TAX IF HE HAS REASON TO BELIEVE THAT INCO ME FOR ANY ASSESSMENT YEAR HAS ESCAPED ASSESSMENT. THE WORD REASON IN THE PHRA SE REASON TO BELIEVE WOULD MEAN CAUSE OR JUSTIFICATION. IF F THE A SSESSING OFFICER HAS CAUSE OR JUSTIFICATION TO KNOW OR SUPPOSE THAT INCOME HAD ESCAPE D ASSESSMENT IT CAN BE SAID TO HAVE REASON TO BELIEVE THAT AN INCOME HAD E SCAPED ASSESSMENT. THE EXPRESSION CANNOT BE READ TO MEAN THAT THE ASSESSING OFFICER SHOULD HAVE FINALLY ASCERTAINED THE FACT BY LEGAL EVIDENCE OR CONCLUSI ON. THE FUNCTION OF THE ASSESSING OFFICER IS TO ADMINISTER THE STATUTE WITH SOLICITUD E FOR THE PUBLIC EXCHEQUER WITH AN INBUILT IDEA OF FAIRNESS TO TAXPAYER S. FOR AN INITIATION OF ACTION U/S 147(A ) THE FULFILLMENT OF THE TWO REQUISIT E CONDITIONS IN THAT REGARD IS ESSENTIAL. AT THE INITIATION STAGE WHAT IS REQUIRE D IS REASON TO BELIEVE BUT NOT THE ESTABLISHED FACT OF ESCAPEMENT OF INCOME. AT TH E STAGE OF ISSUE OF NOTICE THE ONLY QUESTION IS WHETHER THERE WAS RELEVANT MATERIAL ON WHICH A REASONABLE PERSON COULD HAVE FORMED A REQUISITE BELIEF . WHETHER THE MATERIALS WOULD CONCLUSIVELY PROVE THE ESCAPEMENT IS NOT THE CONCERN AT THAT STAGE. THIS IS SO BECAUSE THE FORMATION OF BELIEF BY THE ASSESSING OFFI CER IS WITHIN THE REALM OF SUBJECTIVE SATISFACTION. 5.1 THE SCOPE AND EFFECT OF SECTION 147 AS SUBSTITUTED W. E.F. APRIL 1 1989 AS ALSO SECTIONS 148 TO 152 ARE SUBSTANTIALLY DIFFERE NT FROM THE PROVISIONS AS THEY STOOD PRIOR TO SUCH SUBSTITUTION. UNDER THE OLD PROVISIONS OF SECTION 147 SEPARATE CLAUSES (A ) AND (B) LAID DOWN THE CIRCUMS TANCES UNDER WHICH INCOME ESCAPING ASSESSMENT FOR THE PAST ASSESSMENT YEARS COULD B E ASSESSED OR REASSESSED. TO CONFER JURISDICTION UNDER SECTION 147(A ) TWO CONDITIONS WERE 5 5 REQUIRED TO BE SATISFIED FIRSTLY THE ASSESSING OFFICER MUST HAVE REASON TO BELIEVE THAT INCOME PROFITS OR GAINS CHARGEABLE TO INCOME TAX HAVE ESCAPED ASSESSMENT AND SECONDLY HE MUST ALSO HAVE REASON TO BELIEV E THAT SUCH ESCAPEMENT HAS OCCURRED BY REASON OF EITHER OMISSION OR FAI LURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY OR TRULY ALL MATERIALS FACTS N ECESSARY FOR HIS ASSESSMENT OF THAT YEAR. BOTH THESE CONDITIONS WERE CONDIT IONS PRECEDENT TO BE SATISFIED BEFORE THE ASSESSING OFFICER COULD HAVE JURISDI CTION TO ISSUE NOTICE U/S 148 READ WITH SECTION 147(A ). BUT UNDER THE SUBSTI TUTED SECTION 147 EXISTENCE OF ONLY THE FIRST CONDITIONS SUFFICES. THE ASSE SSING OFFICER FOR WHATEVER REASON HAS REASON TO BELIEVE THAT INCOME HAS ES CAPED ASSESSMENT IT CONFERS JURISDICTION TO REOPEN THE ASSESSMENT. BOTH THE CO NDITIONS MUST BE FULFILLED IF THE CASE FALLS WITHIN THE AMBIT OF THE PR OVISION TO SECTION 147. THE CASE AT HAND IS COVERED BY THE MAIN PROVISION AND NOT TH E PROVISO. SO LONG AS THE INGREDIENTS OF SECTION 147 ARE FULFILLED THE ASSESSIN G OFFICER IS FREE TO INITIATE PROCEEDING U/S 147. 6. IN OUR OPINION IN THE PRESENT CASE THERE IS A MA TERIAL BEFORE HIM IN THE FORM OF VDIS DECLARATION AND ENTRY IN THE BOO KS OF ACCOUNT FOR THE FINANCIAL YEAR 1997-98 BY BRINGING THE A TOTAL INCOM E OF RS.2 78 00 000 AND ON THAT BASIS THE ASSESSING OFFICER REOPENED THE ASSESSMENT. WE DO NOT FIND ANY INFIRMITY IN REOPENING THE ASSESSMENT AND THE SAME IS CONF IRMED. 7. REGARDING THE MERIT OF THE ADDITIONS THE ASSESSEE S COUNSEL RELIED ON THE JUDGEMENT ON THE ORDER OF THE TRIBUNAL IN TH E CASE OF SHANKAR R. MHATRE VS. ACIT (117 ITD 241) (ITAT MUMBAI E BENCH) WHEREIN IT WAS HELD THAT: ONE CAN FIND FROM COMPUTATION OF INCOME FILED BY THE ASSESSEE THAT A CLEAR NOTE HAS BEEN GIVEN THAT HE HAD EARNED AND I NVESTED FUNDS WHICH RELATE FROM THE LAST SO MANY YEARS AND THAT THE SAM E DO NOT PERTAIN TO THE IMPUGNED ASSESSMENT YEARS. IN SHORT WHAT WAS STATED HERE IS THAT THE INCOME IN QUESTION DOES NOT PERTAIN TO THE PREV IOUS YEAR RELATABLE 6 6 TO THE ASSESSMENT YEARS 1998-99. A PERUSAL OF THE TABLE OF VDIS CLEARLY SHOWS THAT NONE OF THESE ASSETS HAVE BEEN A CQUIRED BY THE ASSESSEE DURING THE PREVIOUS YEAR RELATABLE TO THE ASSESSMENT YEARS 1998-99. WHILE SO THE ENTIRE INCOME IN QUESTION I S BROUGHT TO TAX DURING THE IMPUGNED ASSESSMENT YEARS. THIS IS NOT LEGALLY CORRECT TO TAX THIS INCOME IN THE YEAR UNDER APPEAL. THE VERY FOUNDATION FOR BRINGING TO TAX THE INCOME IS THE DECLARATION GIVEN BEFORE THE CIT BY THE ASSESSEE UNDER VDIS ACT. THIS MATERIAL HAS TO BE TAKEN IN ITS ENTIRETY AND ALL FACTS RECORDED IN SUCH DECLARATION SHOULD ALSO BE CONSIDERED IN ITS ENTIRETY AND LAW IS TO BE CORREC TLY APPLIED TO THESE FACTS. THE YEARS OF INVESTMENT AND THE YEARS IN WH ICH INCOME IS EARNED ARE TO BE TAKEN AS DECLARED AS THERE IS NO OTHER E VIDENCE WITH THE REVENUE TO ENABLE THEM TO COME TO A CONTRARY CONCLU SION. ONLY SELECTED PORTIONS OF THE DECLARATIONS CANNOT BE FOR M PART OF THE EVIDENCE FOR THE PURPOSE OF ADDITION. THUS WHEN I N THE DECLARATION THE YEAR OF EARNING OF INCOME IS STATED THE ASSESSING OFFICER CANNOT WITHOUT EVIDENCE TO THE CONTRARY TREAT THIS INCOME AS THAT WHICH IS EARNED IN A DIFFERENT ASSESSMENT YEARS. EVEN OTHER WISE THE ADDITION CANNOT BE SUSTAINED UNDER S. 69 FOR INVOKING S. 69 THE PRIMARY REQUIREMENT IS THAT INVESTMENTS HAD TO BE MADE BY T HE ASSESSEE IN THE FINANCIAL YEAR IMMEDIATELY PRECEDING THE ASSESSMENT YEARS. NONE OF THE INVESTMENTS IN THIS CASE WERE MADE IN THE IMMED IATELY PRECEDING ASSESSMENT YEARS. NEITHER THE INCOME WAS EARNED IN THIS CASE NOR THE INVESTMENT HAS BEEN MADE IN THE FINANCIAL YEAR IMME DIATELY PRECEDING THE ASSESSMENT YEARS. THUS THE ABOVE ADDITION HAS TO BE NECESSARILY DELETED ON THE GROUND THAT THE INCOME SOUGHT TO BE ADDED THE ABOVE ADDITION HAS TO BE NECESSARILY DELETED ON THE GROUN D THAT THE INCOME SOUGHT TO BE ADDED DOES NOT PERTAIN TO THE IMPUGNED ACCOUNTING YEAR. ON THE ISSUE OF THE ASSESSEE FILING A CONDITIONAL R EVISED RETURN THE SAM E CANNOT BE HELD AGAINST THE ASSESSEE. FILING OF R ETURN OF INCOME WAS UNDER PROTEST AND WITHOUT PREJUDICE TO HIS RIGH TS AND THIS CANNOT FORM THE BASIS OF BRINGING TO TAX THE INCOME OF THE ASSESSEE OF EARLIER YEARS IN THIS YEAR. EVEN IF IT IS HELD OTHERWISE THE FILING OF THE RETURN IS A FUNDAMENTAL ERROR OF LAW ON THE PART OF THE ASSES SEE AND THAT IS NO GROUND FOR BRINGING TO TAX AN AMOUNT WHICH IS NOT OTHERWISE TAXABLE DURING THE IMPUGNED ASSESSMENT YEARS UNDER THE PROV ISIONS OF THE IT ACT. ACQUIESCENCE CANNOT TAKE AWAY FROM A PARTY TH E RELIEF HE IS ENTITLED TO WHEN TAX IS LEVIED OR COLLECTED WITHOUT AUTHORITY OF LAW. THUS EVEN IF IT IS HELD THAT THE ASSESSEE HAD SUO M OTU FILED HIS RETURN OF INCOME DECLARING ADDITIONAL INCOME IT IS NO GROUND FOR BRINGING TO TAX THE INCOME NOT PERTAINING TO THE YEAR TO TAX IN THI S AS MADE BY THE ASSESSING OFFICER. THUS FOR ALL THESE REASONS IT H AS NECESSARILY TO BE HELD THAT THE ADDITION IN QUESTION HAS TO BE DELETE D FOR THE REASONS THAT IT DOES NOT PERTAIN TO THE IM PUGNED PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEARS 1998-99 AND THE ASSESSING OFFICER HAS NO AUTHORITY TO TAX THE SAME IN THIS YEAR. NIRMALA L. MEHTA VS. A BALASUBRAMANIAM CIT (2004) 191 CTR 9 (BOM) 8: (2004) 269 ITR 1 (BOM ) CIT VS. DKB & CO. (2000) 161 CTR (KER) 187 (2000) 243 ITR 618 (KE R) AND MAYNAK 7 7 PODDAR (HUF) VS. WTO (2003) 181 CTR (CAL) 362 (2003 ) 262 ITR 633 (CAL.) APPLIED. 8. ON THE OTHER HAND THE DR RELIED ON THE ORDER OF THE CIT(A). IN THE PRESENT CASE IT IS ADMITTED FACT THAT THE ASSESSMENT HAS BEEN COMPLETED U/S 144 OF THE IT ACT WITHOUT THE PARTICIPATION OF THE A SSESSEE. THE ASSESSEE NEITHER PARTICIPATED NOR COOPERATED WITH THE DEPARTME NT IN EXPLAINING THE IMPUGNED ADDITIONS AND THE ASSESSEE DID NOT PROVIDE ANY EVIDENCE TO SUBSTANTIATE ITS CLAIM THAT THE VARIOUS INVESTMENTS MADE I N THE DIFFERENT YEARS AND NOT DURING THE ASSESSMENT UNDER CONSIDERATION. THE BU RDEN IS ON THE ASSESSEE WHICH IS NOT DISCHARGED BY PROVING THAT IT IS NOT P ERTAINING TO THE ASSESSMENT YEAR UNDER CONSIDERATION. IT IS THE DUTY OF T HE ASSESSEE TO PRODUCE RELEVANT MATERIALS TO SHOW THAT INVESTMENT HAS B EEN MADE IN EARLIER YEAR/S. BEFORE US ALSO NO EVIDENCE WAS PRODUCED TO SHO W THAT THE ABOVE INVESTMENTS NOT PERTAIN TO THE ASSESSMENT YEAR UNDER CON SIDERATION. SINCE THESE INVESTMENTS AND CASH BALANCE ARE ENTERED IN THE BOO KS OF ACCOUNT IN THE ASSESSMENT UNDER CONSIDERATION THE ASSESSEE IS DUTY BOUND TO EXPLAIN THE SAME. WHERE THE ASSESSEE HAS MADE INVESTMENTS OR ACQUIRED A SSETS AND THE SAME HAVE BEEN SHOWN IN THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE BUT REGARDING THE FULL EXTENT OF THE INVESTMENTS OFF ERS NO EXPLANATION ABOUT THE SOURCE OF INCOME FOR SUCH INVESTMENTS THEN THE ASSESSING OFFICER AT LIBERTY TO TREAT IT AS DEEMED INCOME OF THE ASSESSEE FOR SUCH ASSESSME NT YEAR. IN THIS CASE THE INVESTMENTS HAVING BEEN ENTERED IN THE BOO KS OF ACCOUNTS OF THE ASSESSEE IN THE ASSESSMENT YEAR UNDER CONSIDERATION AND THE SOURCES OF INCOME FOR MAKING SUCH INVESTMENTS REQUIRED TO BE EXPLAI NED BY THE ASSESSEE . THE ASSESSEE COUNSEL RELIED ON THE ORDER OF THE TRIBUNAL IN THE CASE OF SHANKAR R. MAHTRE CITED SUPRA. IN THAT CASE THE ASSESSEE FILED I TS ORIGINAL RETURN OF INCOME DECLARING RENTAL INCOME AND INCOME FROM OTHER SO URCES AS WELL AS AGRICULTURAL INCOME ON 3 RD SEPTEMBER 1999 WITH ITO WARD 1(5) KALYAN. DURING THE PREVIOUS YEAR 1997-98 THE ASSESSEE WANTED T O TAKE ADVANTAGE OF VDIS AND FILED A DECLARATION. LATER THE ASSESSEE HAD N OT PAID TAXES DUE ON 8 8 VDIS DECLARATION. THE ASSESSING OFFICER RECEIVED INFORMAT ION FROM THE CONCERNED AUTHORITY I.E. CIT III THANE THAT THE ASSE SSEE HAD NOT BEEN GRANTED A CERTIFICATE BY THE CIT AND THAT HE CANNOT B E ALLOWED THE BENEFIT OF VDIS-97 IN RESPECT OF HIS DISCLOSURES MADE. BASED ON THE ABOVE INFORMATION RECEIVED THE ASSESSING OFFICER REOPENED THE PROCEEDINGS U /S 147 AND ISSUED NOTICE U/S 148. THE ASSESSEE HAD IN RESPONSE TO NOTICE NU/S 148 FILED A REVISED RETURN OF INCOME FOR THE ASSESSMENT YEAR 1998-9 9 DECLARING THE TOTAL INCOME OF RS.36 30 843 WHICH INCLUDED THE ADDITIONAL IN COME OF RS.33 85 000 U/S 69 OF THE IT ACT WHICH WAS SUBJECT TO A NOTE ANNEXUR E. AFTER CONSIDERING THE DETAILED REPORT THE ASSESSING OFFICER MADE ADDITION OF RS.33 85 000 U/S 69 OF THE IT ACT. ON APPEAL THE FIRST APPELLATE AUTHOR ITY CONSIDERED THE SAME. ON FURTHER APPEAL TO THE TRIBUNAL IT WAS HELD THAT R EOPENING ON THE BASIS OF VDIS DECLARATION DISCLOSING INCOME AND INVESTMENT FOR ASSESSM ENT YEARS 1983-84 TO 1996-97 COULD NOT HAVE REOPENED ASSESSMENT F OR ASSESSMENT YEARS 1998-99. FURTHER ON MERIT IT WAS ALSO HELD THA T ON THE BASIS OF DECLARATION MADE UNDER THE VDIS DISCLOSING INCOME AND I NVESTMENT FOR THE ASSESSMENT YEARS 1983-84 TO 1996-97 (WHICH WAS NOT ACCEPT ED FOR NON PAYMENT OF TAX) NO ADDITION COULD BE MADE U/S 69 IN THE ASSESSMENT YEARS 1998-99. 8.1. IN THE PRESENT CASE THE ASSESSING OFFICER REOPENED THE ASSESSMENT NOT ONLY ON THE BASIS VDIS DECLARATION MADE BY THE ASSESSE E BUT ALSO ON THE BASIS OF AN ENTRY IN THE BOOKS OF ACCOUNT DECLARING A TO TAL INCOME OF RS.2 78 00 000 IN THE FINANCIAL YEAR 1997-98. AS SUCH THE RATIO LAID DOWN BY THE ABOVE ORDER OF THE TRIBUNAL CANNOT BE APPLIED TO THE PRESENT FACTS OF CASE SINCE THERE IS ENTRY REGARDING THE INCOME OF RS.2 78 00 000 WHICH IS TO BE EXPLAINED BY THE ASSESSEE. 9. IN OUR OPINION IT IS FAIR TO SET ASIDE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO THE ASSESSEE TO PROVE ITS CLAIM AT THE 9 9 LEVEL OF THE ASSESSING OFFICER THAT THE INVESTMENT HAS BE EN MADE BY THE ASSESSEE NOT IN THE ASSESSMENT YEAR UNDER CONSIDERATION AND ALSO THE INCOME IS NOT RELATING TO THE ASSESSMENT YEAR UNDER CONSIDERATIO N. ACCORDINGLY THE ISSUE IS SET ASIDE TO THE FILE OF THE ASSESSING OFFICER FOR FRESH CONSIDERATION. 10. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON. 29.1.2010 SD/- SD/- (N.R.S. GANESAN) (CHANDRA POOJARI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 29 TH JANUARY 2009 COPY FORWARDED TO: 1. C/O M.A. ANANDAM & CO. CA 7A SURYA TOWERS SP R OAD SECUNDERABAD 2. ITO WARD 4 (4) HYDERABAD 3. CIT(A)-V HYDERABAD. 4. CIT HYDERABAD 5. THE D.R. ITAT HYDERABAD. NP