Income Tax Appellate Tribunal - Ahmedabad
Jagdish Prasad Gurjar, Ahmedabad vs Department Of Income Tax on 30 July, 2004
IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD
AHMEDABAD "A" BENCH
(BEFORE S/SHRI R.V.EASWAR, VICE-PRESIDENT AND
N.S. SAINI, ACCOUNTANT MEMBER)
IT(SS)A.No.140/Ahd/2006
[Block Period: 1-4-1996 to 24.07.2002]
ACIT, Cent.Cir.1(4) Vs. Shri Jagdish Prasad S. Gurjar
Ahmedabad. 69, Nigam Society
Vatwa, Ahmedabad.
IT(SS)A.No.88/Ahd/2006
[Block Period: 1-4-1996 to 24.07.2002]
Shri Jagdish Prasad S. Gurjar Vs. ACIT, Cent.Cir.1(4)
69, Nigam Society Ahmedabad.
Vatwa, Ahmedabad.
Revenue by : Shri Rajeev Agarwal
Assessee by : None
ORDER
PER R.V.EASWAR, VICE-PRESIDENT: These cross-appeals pertain to the block assessment made u/s 158BC of the IT Act by order dated 30-7-2004. The assessee is an individual and the block assessment was made pursuant to the requisition u/s 132A of the assets and documents seized by the Enforcement Directorate, Ahmedabad during a search on 9-7-2001.
2. The assessee did not respond to the notice of hearing which has been served on him vide AD card placed on record. We have therefore disposed of the appeals on the basis of the record and after hearing the learned CIT- DR.
3. In the department's appeal, the only objection is that the CIT(A) was not justified in holding that the protective assessment made on the assessee would be justified "only in the eventuality when the respective angadias disown the assets and the specific assets are released in their hands and seized in the hands of the appellant for applying towards the corresponding demands raised. The Assessing Officer is therefore directed to modify the assessment framed on Page - 2 IT(SS)A.No.88 and 140/Ahd/2006 protective basis in the above manner and grant appropriate relief to the appellant. This plea of the appellant therefore succeeds in part".
4. On the other hand, in the assessee's appeal the ground taken is that the CIT(A) erred in confirming the assessment in the hands of the appellant on protective basis particularly when the respective claimants have come forward and seizures were made in their hands.
5. The addition of Rs.3,34,89,705 has been made on the assessee on protective basis. It would appear that the assets seized were being carried by the assessee to be delivered to the persons of the angadias in Delhi or Ahmedabad. The Assessing Officer has remarked that the FEMA authorities opened the parcels in the presence of the owners of the parcels from which some were found to contain cash, jewellery, silver, diamonds and documents. These were seized by them and general goods found in other parcels were released to the owners. On the basis of this, action u/s 158BD has been taken in the case of 12 persons who are named in page 8 of the block assessment order. The assessee has been assessed on the value of the assets seized on protective basis.
6. It is well-settled that it is open to the departmental authorities to make precautionary assessments or protective assessments in order to protect the interests of the revenue where it is not clear as to who is to be assessed in respect of a particular income. This right was recognised the Supreme Court long back in the case of Lalji Haridas v ITO (1961) 43 ITR 387. The Hon'ble Gujarat High Court has also held so in Banyan and Berry v CIT (1996) 222 ITR 831. In light of these decisions, the CIT(A) was not right in saying that the protective assessments can be justified only when the respective angadias disown the assets. Even when they do not disown the assets, if the income-tax authorities are in doubt as to whether the assessee or the angadias are to be assessed in respect of the income or the seized assets it is open to them to make -2- Page - 3 IT(SS)A.No.88 and 140/Ahd/2006 a protective assessment on the assessee. That right cannot be taken away on the ground that it can be exercised only when the angadias disown the assets as held by the CIT(A). We therefore accept the grievance of the department and hold that the Assessing Officer was right in making a protective assessment on the assessee.
7. The assessee's appeal in our view is misconceived. It is based on the erroneous assumption that the CIT(A) has confirmed the protective nature of the assessment. On the contrary, he has vacated the protective nature of the assessment and that is why the revenue is aggrieved and has filed an appeal. The assessee's appeal is accordingly dismissed.
8. In the result, the assessee's appeal is dismissed as misconceived and the department's appeal is allowed. No costs.
Order pronounced in Open Court on 24th July, 2009.
Sd/- Sd/-
(N.S.SAINI) (R.V.EASWAR)
ACCOUNTANT MEMBER VICE-PRESIDENT
Place : Ahmedabad
Date : 24-07-2009
Copy of the order forwarded to:
1) : Assessee
2) : Respondent
3) : CIT(A)
4) : CIT concerned
5) : DR, ITAT.
BY ORDER
DR, ITAT, AHMEDABAD
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