RAMESH SONI,MUMBAI vs. ACIT 7(1), MUMBAI

The asssessee has filed these appeals against the common order dated 02.03.2012 passed by the Commissioner of Income Tax (Appeals)-35 (for short ‘the CIT(A), Mumbai, for the assessment years 1991-92 and 1992-93, whereby the Ld. CIT(A) has dismissed the appeals filed by the assessee against the assessment orders passed u/s 143 (3) of the Income Tax Act, 1961 (for short the ‘Act’).

Brief facts of the case are that the assessee filed its return of income for the assessment years under consideration. Accordingly, the AO passed the assessment orders u/s 143(3) of the Act, after making certain additions. The assessment orders were set aside number of times by the Ld. CIT(A) and the Assessment Years: 1991-92 & 1992-93 Tribunal. Ultimately, the AO finalized the assessment orders after making additions on account of unexplained investment, undisclosed commission, profit out of foreign remittances and profit earned from other transactions and determined the total income of the assessee at Rs. 7,72,00,190/- for the AY 1991-92 and Rs. 3,03,52,360/- for the AY 1992-93. The assessee challenged the assessment orders before the Ld. CIT(A). The Ld. CIT(A) dismissed both the appeals and confirmed the additions made by the AO holding that the assessee is involved in commission of offences under various sections of Foreign Exchange Regulation Act (FERA) and Foreign Exchange Management Act (FEMA) and the Chief Enforcement Officer has filed complaint against the accused persons including the assessee in the present case. 3. The assessee has challenged the impugned orders by raising common grounds that the Ld. CIT(A) has erred in upholding the action of AO in treating third party bank deposit /bank receipts as its undisclosed income; that the CIT(A) has wrongly upheld the addition made on account of commission income on foreign remittances; that the Ld CIT(A) has wrongly upheld the addition of profit on account of foreign remittance and that the Ld CIT(A) erred in upholding the action of AO in making addition on account of profit on notional basis related to third party business. 4. At the outset, the Ld. counsel for the assessee submitted that the Enforcement Directorate (ED) has filed complaint in the Court of Chief Metropolitan Magistrate (CMM) against accused persons including the present assessee under various sections of FERA and FEMA. The Ld counsel further contended as per the said complaint, Mr. Ramesh Kumar Verma was the kingpin and main person behind the transactions in question and the assessee in the present case Mr. Ramesh Soni was merely an employee of Ramesh Kumar Verma. The Ld. counsel further submitted that the main accused Mr. Ramesh Kumar Verma has admitted this fact in his statement recorded during investigation. The Ld. counsel further contended that the AO has made the impugned additions on the basis of investigation conducted by the ED. The Ld. counsel further submitted that under these circumstances, the additions made Assessment Years: 1991-92 & 1992-93 by the AO cannot be sustained, therefore, the impugned order may be set aside and the AO may be directed to pass afresh after the decision of the criminal complaint against the accused persons including the present assessee. 5. On the other hand, the Ld. Departmental Representative (DR) did not oppose the prayer of the Ld. counsel for de-novo assessments and submitted that the department has no objection in case the present appeals are back to the AO for passing assessment orders afresh in accordance with the decision of the Ld. CMM in the complaint filed by the ED against the accused persons including the assessee in these appeals. 6. We have perused the material on record. The Ld. CIT (A) has not decided the appeals of the assessee on merits and dismissed the same on the basis of investigation made by the ED and complaint filed before the Ld. CMM. The concluding paras of the order of the Ld. CIT (A) read as under:-