Smt. Yamuna Devi Chandak, v. The ACIT, 1(1),

CO 124/IND/2007 | misc
Pronouncement Date: 27-07-2011 | Result: Dismissed

Appeal Details

RSA Number 12422723 RSA 2007
Assessee PAN AECPC9063K
Bench Indore
Appeal Number CO 124/IND/2007
Duration Of Justice 3 year(s) 8 month(s) 20 day(s)
Appellant Smt. Yamuna Devi Chandak,
Respondent The ACIT, 1(1),
Appeal Type Cross Objection
Pronouncement Date 27-07-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 27-07-2011
Date Of Final Hearing 02-06-2011
Next Hearing Date 02-06-2011
Assessment Year misc
Appeal Filed On 07-11-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI JOGINDER SINGH J.M. AND SHRI R.C.SHARMA A.M. PAN NO. : AECPC9063K I.T. (SS) A.NO. 186 / IND /200 7 BLOCK PERIOD : 01.04.1996 TO 13.12.2002 ACIT SMT. YAMUNA DEVI CHANDAK 1(1) VS UDAIPURA BHOPAL RAISEN APPELLANT RESPONDENT C.O.NO. 124/IND/2007 (ARISING OUT OF I.T.(SS)A.NO. 186/IND/2008) BLOCK PERIOD : 01.04.1996 TO 13.12.2002 SMT. YAMUNA DEVI CHANDAK ACIT UDAIPURA VS 1(1) RAISEN BHOPAL CROSS OBJECTOR RESPO NDENT PAN NO. : N.A. I.T.(SS)A.NO. 96 /IND/200 6 BLOCK PERIOD : 01.04.1996 TO 13.12.2002 ACIT M /S.YAMUNA JEWELLERS 1(1) VS UDAIPURA BHOPAL RAISEN APPELLANT RESPONDENT C.O.NO. 1 07 /IND/200 6 (ARISING OUT OF I.T.(SS)A.NO. 96 /IND/200 6 ) BLOCK PERIOD : 01.04.1996 TO 13.12.2002 - : 2 : - 2 M/S.YAMUNA JEWELLERS ACIT UDAIPURA VS 1(1) RAISEN BHOPAL CROSS OBJECTOR RESPONDENT PAN NO. : AECPC9063K I.T.(SS)A.NO. 1 15 /IND/2008 BLOCK PERIOD : 01.04.1996 TO 13.12.2002 ACIT S HRI SUSHIL KUMAR M ANTRI 1(1) VS 9 TH LANE SARAFA BAZAR ITARSI. BHOPAL APPELLANT RESPONDENT C.O.NO. 22 /IND/20 10 (ARISING OUT OF I.T.(SS)A.NO. 115 /IND/2008) BLOCK PERIOD : 01.04.1996 TO 13.12.2002 SHRI SUSHIL KUMAR MANTRI ACIT 9 TH LANE SARAFA BAZAR ITAR SI. VS 1(1) BHOPAL CROSS OBJECTOR RESPONDENT DEPARTMENT BY : SHRI KESHAVE SAXENA CIT DR ASSESSEE BY : SHRI ASHISH GOYAL AND SHRI GIRISH AGRAWAL ADVOCATES - : 3 : - 3 O R D E R PER R. C. SHARMA A.M. TH ESE ARE APPEALS FILED BY THE REVENU E AND CROSS APPEALS BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) DATED. 25.7.2007 FOR THE BLOCK PERIOD 1.4.1996 TO 13.12.2002 IN THE MATTER OF ORDER PASSED U/S 158BC/ 158BD READ WITH SECTION 1 43(3) OF THE INCOME - TAX ACT 1961. I.T.(SS).A.NO. 186/IND/2008 AN D C.O.NO. 124/IND/2007 : 2. THE FACTS IN BRIEF ARE THAT THE SEARCH AND SEIZURE OPERATION UNDER SECTION 132(1) OF THE I. T. ACT WAS CARRIED OUT ON 13 - 12 - 2002 AND 14 - 12 - 2002 AT THE RESIDENTIAL AND BUSINESS PREMISES OF CHANDAK FAMILY AT UDAIPURA AND AT SHOP PR EMISES OF MAHESWARI TRACTORS AND A SURVEY OPERATION UNDER SECTION 133(A) WAS ALSO CARRIED ON 13 - 12 - 2002 AT CHANDAK BANDHU KRISHI FARM AT UDAIPURA. DURING THE COURSE OF SEIZURE ACTION AT THE PREMISES UNEXPLAINED ASSETS BOOKS OF ACCOUNT AND - : 4 : - 4 INCRIMINATING DO CUMENTS WERE SEIZED AS PER THE ANNEXURES TO T H E VARIOUS PANCHNAMAS. 3. NOTICE U/S 158BD WAS ISSUED TO THE ASSESSEE ON 10.11.2004 IN RESPONSE TO WHICH THE ASSESSEE FILED HER RETURN OF INCOME FOR THE BLOCK PERIOD 18.11.2004 WHEREIN UNDISCLOSED INCOME WAS SHOWN AT NIL. IN THE YEAR - WISE CHART OF DISCLOSED AND UNDISCLOSED INCOME THE ASSESSEE HAS CLAIMED TO HAVE FILED RETURN OF INCOME IN THE ASSESSMENT YEARS 2001 - 02 AND 2002 - 03. THE ASSESSEE HAS PRIMARILY IN THESE TWO YEARS IN THE BLOCK PERIOD SHOWN INCOME FROM MON EY LENDING AND AGRICULTURAL INCOME. DURING THE COURSE OF THE BLOCK ASSESSMENT PROCEEDINGS THE AO OBSERVED THAT THE DETAILS FURNISHED FROM TIME TO TIME BY THE ASSESSEE HAVE BEEN DULY EXAMINED AND CONSIDERED. IN AN ATTEMPT TO EXPLAIN THE INVESTMENT MADE BY THE ASSESSEE IN VARIOUS ASSETS AND EXPENDITURE INCURRED DURING THE BLOCK PERIOD THE ASSESSEE HAS FILED CASH ROTATION STATEMENTS FOR VARIOUS ASSESSMENT YEARS CLAIMING : - : 5 : - 5 (I) THAT SHE HAD EARNED SUBSTANTIAL INCOME FROM AGRICULTURE DURING ALL THE ASSESSMENT YEARS COMPRISED IN THE BLOCK PERIOD. (II) THAT SHE EARNED INTEREST INCOME FROM MONEYLENDING WHICH WAS BELOW THE TAXABLE LIMIT DURING THE ASSESSMENT YEARS 1999 - 2000 TO 2000 - 01 . (III) THAT SHE RECEIVED BACK SUBSTANTIAL SUMS OF MONEY AS REPAYMENT OF LOANS ADVANCED DURING THE EARLIER YEARS MAINLY THE YEARS PRIOR TO THE BLOCK PERIOD. (IV) THAT SHE RECEIVED SUBSTANTIAL SUMS OF MONEY FROM CERTAIN OTHER PERSONS. 4. BEFORE THE AO IT WAS ALSO SUBMITTED THAT THE ASSESSEE IS AN EXISTING ASSESSEE SINCE ASSESSMENT YEAR 2001 - 02. - : 6 : - 6 A.Y. DATE OF FILING OF RETURN INCOME SHOWN SOURCES 2001 - 02 9.8.02 60 222 AND AGRICULTURAL INCOME RS. 2 35 825/ - P.B. 70 MONEYLENDING 2002 - 03 9.8.02 55 127 AND AGRICULTURAL INCOME RS. 2 01 705/ - . P. B. 66 MONEYLENDING 2003 - 04 30.12.05 80 125 AND AGRICULTURAL INCO ME RS.1 98 850 P.B.58 MONEYLENDING 5. THE AO DISBELIEVED THE AGRICULTURAL INCOME SHOWN BY THE ASSESSEE AND MADE AN ADDITION OF RS.13 90 770/ - . THE AO IN HIS ORDER HAS DISCUSSED THIS ISSUE IN PARA NO.5.2 FROM PAGE NO. 11 TO 22. HE HAS STATED THAT VIDE QUESTI ONNAIRE DATED 01.12.2004 THE APPELLANT WAS ASKED 'DO YOU HAVE ANY INCOME FROM AGRICULTURE AND WHETHER THE SAME IS DISCLOSED DURING THE BLOCK PERIOD. PLEASE SPECIFY THE DETAILS SUCH AS TYPE OF LAND LOCATION KIND OF CROP GROWN RECEIPTS & - : 7 : - 7 EXPENSES ITS MOD E (CASH/ CHEQUE) AND DOCUMENTARY EVIDENCE OF OWNERSHIP OF AGRICULTURAL LAND. PLEASE SPECIFY RECEIPT & EXPENSES WITH DOCUMENTARY EVIDENCE.' 6. VIDE HIS REPLY DATED 09.12.2004 IT WAS STATED ' THAT THE ASSESSEE HOLDS ANCESTRAL AGRICULTURAL LAND MEASURING AROUND 30.87 ACRES AT GRAM KHADON PATWARI HALKA NO.9 TEHSIL UDAIPURA R A ISEN: IN ADDITION TO ABOVE HOLDING OF LAND OTHER PERSON'S AGRICULTURAL LAND ALSO TAKEN ON LEASE (KOLI) FOR AGRICULTURE PURPOSE AND AGRICULTURE ACTIVITIES WERE PERFORMED. THIS FACT WAS ALREA DY SUBMITTED ALONG WITH THE RETURNS FILED BY THE APPELLANT. THE ASSESSE'S AGRICULTURE LAND IS IRRIGATED WITH THE HELP OF SMALL RIVER NEAR TO AGRICULTURE LAND AND' BOREWELL. THE APPELLANT GROWS TWO CROPS IN HIS AGRICULTURE LAND. THE PHYSICAL VERIFICATION OF APPELLANT'S AGRICULTURE LAND AND ITS AGRICULTURE OPERATIONS CAN BE DONE. IT WAS FURTHER STATED THAT THE APPELLANT HAS - : 8 : - 8 AGRICULTURE INCOME THE COPIES OF SALE OF AGRICULTURE PRODUCE BAHI AND LEASE AGREEMENT OF AGRICULTURE LAND ALL WERE SUBMITTED WITH THE REGULAR RETU RN S FI LED BY THE APPELLANT. THE AO AFTER CONSIDERING THE DETAILS IN RESPECT OF AGRICULTURE LAND FILED BY THE APPELLANT HAS FOUND THAT 'IT IS NOT AT ALL SURPRISING THAT THE CONCERNS TO WHOM SALE OF CROPS HAS BEEN SHOWN ARE FAMILY CONCERNS OR RELATED CONCERNS OF THE APPELLANT'S GROUP AND HE HAS DRAWN THE FOLLOWING TABLE IN HIS ORDER. DATE BILL PARTY TO ITEM AMOUNT WT REMARK S NO SOLD COMPARISO N KHASRA BILLS 14.8.96 5 MAHESWARI BATRI 7834 5 60 TRADERS 12.9.96 22 MAHESWARI GRAM 77490 70 NO TRADERS IN OWN PER 13.11.9 6 15 MAHESWARI YELLOW 104801 148 NO TRADERS SOYABEA SOYABE IN OWN PER 25. 2.97 25 GOPILAL TEWDA 64970 93 NO RATHI GROWN IN LAND AS - : 9 : - 9 KHASRA 10.3.97 43 GOPILAL MASOOR 97500 98 RATHI 423106 . 6.8.97 98 MA H ESWARI MASOOR 140818 124.75 NO TR ADERS GROWN IN LAND AS KHASRA 1.12.97 0 GIRIRAJ BATRI 98370 89.20 239188 20.9.99 50 MAHESWARI TUWAR 62507 29.55 NO STORE IN OWN PER 4.2.00 73 MAHESWARI MAS OOR 103894 62.60 GEN. STORE 11.2.00 5 ANNAPURNA SOYABEA 30148 37.60 NO TRADERS SOYABEAN GROWN IN LAND AS PER KHASRA 25.2.00 13 MAHESWARI MASOOR 69696 44.2 TRADERS - 2.3.00 22 GOPILAI MASOOR 81600 68 RATHI 347845 5.5.00 54 MAHESWARI GEN 40543 49.951 51 - DO - GEN. STORE SOYA NO 27.5.00 MASOOR 33 MAHESWARI GEN. MASOOR 44834 31.55 GROWN STORE IN OWN LAND AS PER KHASRA IN VIEW OF THE ABOVE OBSERVATION THE AO OPINED THAT THE APPELLANT HAS FAILED TO DISCHARGE HER ONUS OF PROVING THAT THE INCOME CLAIMED TO BE EXEMPT WAS - : 10 : - 10 IN FACT AGRICULTURE INCOME. IN THIS CASE THE APPELLANT H AS CLAIMED TO HAVE EARNED AGRICULTURE INCOME AS MENTIONED BELOW - NET AGRICULTURAL INCOME CLAIMED TO HAVE BEEN GENERATED 1997 - 98 170250 1998 - 99 178910 1999 - 00 195600 2000 - 01 209630 2001 - 02 235825 2002 - 03 201705 2003 - 04 198850 (TILL THE DATE OF SEARCH) ________ TOTAL 1390770 THE AO ACCORDINGLY TREATED THE AGRICULTURE INCOME TOTALING TO RS.13 90 770 / - CLAIMED TO HAVE BEEN EARNED DURING THE BLOCK PERIOD AS INCOME FROM OTHER SOURCES AND HELD TO BE THE UNDISCLOSED INCOME OF THE APPELL ANT FOR THE BLOCK PERIOD. - : 11 : - 11 7. BY THE IMPUGNED ORDER AFTER RECORDING FOLLOWING FINDINGS THE LD. CIT(A) DELETED THE ADDITION : - I HAVE BESTOWED MY ANXIOUS CONSIDERATION ON THE SUBMISSION OF THE LD. AUTHORIZED REPRESENTATIVE. I HAVE ALSO PERUSED THE REASONS ADVANCED BY THE ASSESSING OFFICER REGARDING THIS ISSUE. I FOUND THAT THE AO HAS NOT DISPUTED THE HOLDING OF AGRICULTURE LANDS OF THE CHANDAK FAMILY. FOR LAND TAKEN ON LEASE I.E. KOLI PATTA THE AGREEMENTS RIN PUSTIKA AND COPY OF KHASARA NAKAL WERE PRODUCE D. ALL THESE DOCUMENTS HAVE ALSO NOT BEEN DOUBTED OR DISPUTED. MERELY BECAUSE THE CONCERNED PERSONS WERE NOT PRODUCED BEFORE THE AO FOR VERIFICATION/ EXAMINATION THE ADVERSE INFERENCE CANNOT BE DRAWN IN THE ABSENCE OF ANY POSITIVE MATERIAL AGAINST THE ASS ESSEE . BUT THE AO HAS ALSO NOT BROUGHT ANY ADVERSE AND COGENT REASON OR MATERIAL IN SUPPORT OF HIS FINDINGS. I ALSO FOUND THAT THE APPELLANT HAS DULY DISCHARGED - : 12 : - 12 THE ONUS LIES UPON HER BY FILING THE NECESSARY EVIDENCES. THE ASSESSEE CULTIVATES ABOUT 50 AC RES OF LAND. DURING THE COURSE OF SEARCH ACTION NO EVIDENCE WAS SEEN OR FOUN D TO SUPPORT THE AO S CONCLUSION. AFTER CONSIDE RI NG THE ESTIMATED IN VIEW OF THE DECISION OF THE LD. I.T.A.T. BENCH JABALPUR AND ALSO THE DECISION GIVEN BY MY LD. PREDECESSOR I ESTIMATE THE AGRICULTURE INCOME IN CASE OF THE ASSESSEE @ 10 000/ - PER ACRE OF THE TOTAL LAND H OLDING AND IF THIS AVERAGE FIGURE IS TAKEN THEN THE INCOME WILL BE MORE THAN THAT OF DECLARED IN THE RETURN. THUS THE INCOME SHOWN BY THE ASSESSEE APPEARS TO B E REASONABLE AND THEREFORE THE FINDING OF AO IS NOT JUSTIFIED. IN VIEW OF THE ABOVE FINDINGS THE ADDITION MADE ON ACCOUNT OF BOGUS AGRI CULTURE INCOME AT RS.13 90 770/ - CANNOT BE SUSTAINED AND IT HAS TO BE DELETED. THUS THE APPEAL ON THIS POINT IS ALLOWED. - : 13 : - 13 8. AGAINST THE ABOVE ORDER OF CIT(A) THE REVENUE IS IN FURTHER APPEAL BEFORE US. 9. WE HAVE CONSIDERED THE RIVAL CONTENTIONS CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND FROM RECORD THAT DURING THE YEAR FALLING WITHIN THE BLOCK PE RIOD THE ASSESSEE CULTIVATED ABOUT 50 ACRES OF LAND. DURING THE COURSE OF SEARCH NO EVIDENCE WAS FOUND TO SUPPORT THE AO S CONCLUSION THAT THE ASSESSEE HAD NOT CARRIED OUT ANY AGRICULTURAL ACTIVITIES. NOWHERE THE AO HAS DISPUTED HOLDINGS OF AGRICULTURAL LAND BY THE CHANDAK FAMILY NOR THE LAND TAKEN ON LEASE I.E. KOLY PATTA. ALL THE DOCUMENTS COMPRISING OF AGREEMENT RIN PUSTIKA AND COPY OF KHASRA NAKAL WERE PRODUCED BEFORE THE AO. MERELY BECAUSE THE CONCERNED PERSON WHO HAS GIVEN THE LAND ON LEASE WERE N OT PRODUCED BEFORE THE AO THE ADVERSE INFERENCE CANNOT BE DRAWN IN THE ABSENCE OF ANY POSITIVE MATERIAL AGAINST THE ASSESSEE. THE LD. CIT(A) HAS CLEARLY OBSERVED AND RECORDED A FINDING TO THE - : 14 : - 14 EFFECT THAT THERE WAS NO ADVERSE MATERIAL ON RECORD TO DOUBT TH E LAND OWNERSHIP AND INVOLVEMENT OF ASSESSEE IN AGRICULTURAL OPERATION. THE LAND TAKEN ON KOLY WAS ALSO SUPPORTED BY THE EVIDENCE IN THE SHAPE OF AFFIDAVITS OF THE OWNERS OF THE SAID LAND AGREEMENT ETC. CHANDAK FAMILY CONSISTING OF ELEVEN MEMBERS OUT OF WHICH TWO PERSONS I.E. ASSESSEE AND HER SON SHRI SHYAM KUMAR CHANDAK WERE PROPERLY LOOKING AFTER THE AGRICULTURAL OPERATIONS. THERE WAS NO SUPPORTING EVIDENCE IN THE AO S OBSERVATION TO THE EFFECT THAT MAJOR OPERATION OF AGRICULTURAL PRODUCE WAS CONSUMED I N THE FAMILY OF CHANDAK GROUP. KEEPING IN VIEW THE TOTAL LAND HOLDINGS BY THE ASSESSEE VIS - - VIS LAND CULTIVATED DURING THE YEAR THE LD. CIT(A) REASONABLY ESTIMATED PER ACRE ON THE BASIS OF DECISION OF THE I.T.A.T. JABALPUR BENCH WHEREIN IT WAS HELD THA T ESTIMATION OF GROUP @ RS. 10 000/ - PER ACRE WILL BE REASONABLE THE LD. CIT(A) OBSERVED THAT INCOME SHOWN BY THE ASSESSEE FROM AGRICULTURE WAS REASONABLE AND AO WAS NOT JUSTIFIED IN TREATING AGRICULTURAL INCOME OF RS. - : 15 : - 15 13 90 770/ - AS INCOME FROM OTHER SO URCES. THE FINDINGS ARRIVED AT BY THE LD. CIT(A) IS ON THE BASIS OF MATERIAL ON RECORD THEREFORE DO NOT WA RRANT ANY INTERFERENCE. 10. IN THE RESULT THIS GROUND OF REVENUE S APPEAL IS DISMISSED. 11. NEXT GRIEVANCE OF THE REVENUE RELATES TO DELETION OF ADDITION OF RS. 1 10 000/ - ON ACCOUNT OF ALLEGED UNEXPLAINED CASH. 12. DURING THE COURSE OF SEARCH CASH OF RS. 1 15 300/ - WAS FOUND OUT OF WHICH AO ACCEPTED RS. 5300/ - AND MADE AN ADDITION OF RS. 1 10 000/ - . THE ASSESSEE HAS EXPLAINED SOURCE OF CASH IN HAND AS ON 31 ST MARCH 2003 AT RS. 95 164/ - . DETAILED CASH ROTATION STATEMENT EXPLAINING THE SOURCE OF CASH WAS FURNISHED. THE SOURCES OF CASH ARE : - (A) AGRICULTURAL RECEIPTS RS. 1 98 850/ - (B) INTEREST RECEIPTS RS. 80 125/ - (C) RECEIPTS AGAINST ADVANCES RS. 4 99 700/ - (D) RECEIVED FROM SHRI - : 16 : - 16 S.K. LOYA RS. 7 00 000/ - 13. SOURCE OF CASH RECEIPT OUT OF INTEREST INCOME AND RECEIPT AGAINST ADVANCES WERE NOT DOUBTED BY THE ASSESSING OFFICER. WITH REGARD TO CASH RECEIPT OF RS. 7 LAKHS FROM SHRI R.K. LOHIA DURI NG SEARCH ITSELF LOOSE PAPERS WERE FOUND IN BH 3 PAPER BOOK 54A SHOWING ADVANCE FROM R.K. LOHIA. THIS WAS AGAINST SALE OF LAND. 14. BY THE IMPUGNED ORDER THE LD. CIT(A) DELETED THE ADDITION AFTER HAVING FOLLOWING OBSERVATIONS : - I HAVE GONE THROUGH THE REAS ONING OF THE AO REGARDING THIS ISSUE AND ALSO CONSIDERED THE SUBMISSIONS OF THE APPELLANT. THE AGRICULTURAL INCOME HAS BEEN ACCEPTED AT PARA NO.3 (GROUND NO.3). FURTHER THE AMOUNT GIVEN BY SHRI R.K.LOYA HAS NOT BEEN DISPUTED BY THE AO. THE CASH ROTATION ST ATEMENT FILED BEFORE THE AO HAVE ALSO NOT BEEN DISBELIEVED. AFTER CONSIDERING THE FACTS AND MATERIAL AND THE SUBMISSION OF THE AR I AM OR THE CONSIDERED OPINION THAT THE AO WAS NOT JUSTIFIED IN MAKING THE - : 17 : - 17 ADDITION OF RS. 1 10 000/ - TREATING THE SAME AS U NDISCLOSED INCOME OF THE APPELLANT. ACCORDINGLY THE ADDITION IS NOT JUSTIFIED AND IT HAS TO BE DELETED. THUS THE APPEAL ON THIS POINT IS ALLOWED. 15. NOW REVENUE IS IN FURTHER APPEAL BEFORE US AGAINST THE ABOVE ORDER OF CIT(A). 16. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND FOUND THAT FOR EXPLAINING AVAILABILITY OF CASH THE ASSESSEE HAS FURNISHED DETAILED CASH FLOW STATEMENT DULY MENTION ING THEREIN SOURCE OF CASH AND ITS AVAILABILITY AS ON THE DATE OF SEARCH. THE CASH ROTATION STATEMENT FILED BEFOR E THE AO WAS NOT DISBELIEVED. WE THEREFORE DO NOT FIND ANY REASON TO INTERFERE IN THE FINDING OF THE LD. CIT(A) AS NOTED ABOVE FOR DELETING THE ADDITION OF RS. 1 10 000/ - . 17. NEXT GRIEVANCE OF THE REVENUE RELATES TO DELETION OF ADDITION OF RS. 49 52 150/ - BE ING UNEXPLAINED INVESTMENT MADE BY THE AO VIDE PA RA NO. 5.3 OF HIS - : 18 : - 18 ORDER. THE AO HAS NOTICED THAT THE ASSESSEE HA D PURCHASED A TATA S UM O M ODEL 2000 BEARING REGISTRATION NO. MP - 38 - 0184 ON 29.04 2000. THE AO HAS NOTED THE TOTAL INVESTMENT OF RS. 580720/ - AS U NDER: - (A) AY INVESTMENT (RS.) 2001 - 02 453575/ - 2002 - 03 127145/ - TOTAL 580720 (B) THE AO FOUND THAT THE ASSESSEE WAS HOLDING A BANK ACCOUN T NO. SB2110/2 IN CENTRAL BANK OF INDIA UDAIPURA IN WHICH THE ASSESSEE HAS MADE CASH DEPOSIT AS UNDER A.Y . CASH DEPOSIT 1997 - 1998 660000/ - 1998 - 1999 --- 1999 - 2000 --- 2000 - 2001 --- 2001 - 2002 200500/ - - : 19 : - 19 2002 - 2003 --- 2003 - 2004 --- TOTAL 860500/ - (C) THE AO HAS NOTED FROM THE DOCUMENT SEIZED THAT IN THE FINA N CIA L YEAR 199 8 - 99 THE ASSESSEE HAS PURCHASED AN AGRICULTURE LAND FOR RS.695000 / - PLUS REGISTRY CHARGES. HE HAS FURTHER MENTIONED TH AT IN THE AY 2002 - 03 THE ASSESSEE HAS SHOWN INVESTMENT OF RS. 760050 / - IN AGRICULTURAL LAND MEASURING 0.18 ACRES SITUATED AT J.J.ROAD UDAIPURA. HE HAS FURTHER NOTED THAT IN THE TOTAL INVESTMENT ON THIS LAND WAS RS. 760050 / - COMPRISING OF COST OF LAND RS. 695000 / - STAMP DUTY OF RS. 53500 / - ADDITIONAL STAMP DUTY OF RS. 6100 / - COURT FEE OF RS. 2000 / - AND MISCELLANEOUS EXPENSES OF RS. - : 20 : - 20 3450 / - . THE AO ALSO OBSERVED THAT THE ASSESSEE HAD GIVEN ADVANCES OF RS. 27 50 880/ - . 18. TO SHOW THE AVAILABILITY OF FUND THE CASH ROTATION STATEMENT FURNISHED BY THE ASSESSEE INDICATED AS UNDER : - F.Y. 1996 - 97 OPENING CASH 92 009/ - DRA WINGS 39 500/ - AGRICULTURAL RECEIPTS 1 70 250/ - ADVANCES GIVEN 71 990/ - INTEREST RECEIPTS 35 074/ - DEPOSITS IN BANK 6 60 000/ - RECEIPTS AGAINST 2 35 010/ - CLOSING CASH 16 853/ - ADVANCES I .. BANK WITHDRAWAL 2 56 000/ - F.Y. 1997 - 98 OPENING CASH 16 853/ - DRAWINGS 42 150/ - AGRICULTURAL RECEIPTS 1 78 910/ - ADVANCES GIVEN 1 77 540/ - INTEREST RECEIPTS 39 817/ - CLOSING CASH 15 8 90/ - F.Y. . 1998 - 99 OPENING CASH 15 890/ - DRAWINGS 46 290/ - AGRICULTURAL RCCEI P TS 1 95 600/ - ADVANCES GIVEN 78 280/ - INTEREST RECEIPTS 48 218/ - LAND PURCHASED 7 60 050/ - -- RECEIPTS AGAINST ADVANCES 5 97 400/ - CLOSING CASH 12 488/ - RECEIPT FROM SMT. SHARDA OMJI BAGLA 40 000/ - - : 21 : - 21 F Y . . 1999 - 2000 OPENING CASH 12 488/ - DRAWINGS 50 700/ AGRICULTURAL RECEIPTS 2 09 630/ - ADVANCES GIVEN 8 84 690/ I NTEREST RECEIPTS 49 116/ - CLOSING CASH 14 539/ RECEIPTS AGAINST ADVANCES 6 78 695/ - F.Y. 2000 - 01 OPENING CASH 14 539/ - ADVANCES GIVEN 31 420/ AGRICULTURAL PURCHASE OF TATA SUMO 2 35 8 25/ 2 15 150/ INCOME INSTALLMENTS OF INTEREST RECEIPTS 99 492/ - TATA 2 38.425/ - SUMO RECEIPTS AGAINST ADVANCES 4 01 235/ DEPOSITS IN BANK 2 00 500/ - _._ - .. - '. -- DRAWINGS 54 350/ - -- - CLOSING CASH 11 246/ - F.Y. 2001 - 02 OPENING CASH 11 246/ - DRAWINGS 54 405/ AGRICULTURAL RECEIPTS 2 01 705/ - ADVANCES GIVEN 1.44 350 / - INSTALLMENTS OF INTEREST RECEIPTS 5 50 98/ - TATA 1 27 145 SUMO -- R ECEIPTS AGAINST ADVANCES 16 600/ - CLOSING CASH 38 .749 ' -- RCCEIPT FROM I SMT . SHARDA 80 000/ OMJI BAGLA -- -- F.Y 2002 - 03 (TILL OPENING CASH 1 ADVANCES GIVEN 13 62 610/ 13.12.02) 38 749/ - - - -- AGRIC ULTURAL 1 98 850/ - DRAWINGS 39 400/ - INCOME INTEREST RECEIPTS 80 125/ - CLOSING CASH 1 15.414/ . - RECEIPTS AGAINST ADVANCES 4 99 700/ - - : 22 : - 22 RECEIPT FROM SHRI 7 00 000/ - R.K. LOYA 19. BY THE IMPUGNED ORDER THE LD. CIT(A) DELETED THE ADDITION AFTER CONSIDERING THE CASH FLOW STATEMENT FILED BY THE ASSESSEE AND ALSO TAKING INTO ACCOUNT THE AO S OBJECTION. WE FOUND THAT IN EACH YEAR THE ASSESSEE HAS DULY EXPLAINED THE AVAILABILITY OF CASH THROUG H VARIOUS SOURCES AND ALSO INCORPORATED CASH OUTGOING IN THE RESPECTIVE YEARS. THE CASH FLOW STATEMENT ALSO INCORPORATED WITHDRAWAL FROM THE BANK AND DEPOSIT IN BANK ACCOUNT. THESE ENTRIES WERE PROPERLY CORROBORATED WITH THE STATEMENT. INTEREST INCOME IN V ARIOUS YEARS HAVE NOT BEEN DISBELIEVED WHICH WERE ALREADY OFFERED BY THE ASSESSEE IN HER INCOME TAX RETURNS. NOTHING WAS BROUGHT ON RECORD TO DOUBT ANY E NTRY IN THE CASH FLOW STATEMENT SUBMITTED FOR EACH YEAR INDIVIDUALLY AND THE CLOSING BALANCE OF EACH YE AR WAS PROPERLY CARRIED FORWARD IN THE NEXT YEAR. - : 23 : - 23 THROUGH THIS CASH FLOW STATEMENT THE ASSESSEE HAS PROPERLY EXPLAINED AVAILABILITY OF CASH FOR PURCHASE OF TATA SUMO DURING THE ASSESSMENT YEAR 2001 - 02 AND 2002 - 03 DEPOSIT IN BANK ACCOUNT AT RS. 8 60 500 / - PURCHASE OF AGRICULTURAL LAND OF RS. 7 60 050/ - AND ADVANCE OF RS. 27 50 880/ - . FROM THE RECORD WE ALSO FOUND THAT ALL THE ABOVE ITEMS AS MENTIONED BY THE ASSESSING OFFICER AT PARA 6 WERE ALREADY DISCLOSED IN THE REGULAR RETURN PRIOR TO SEARCH. THE ASSE SSEE FILED RETURN FOR ASSESSMENT YEAR 2001 - 02 AND 2002 - 03 PRIOR TO SEARCH AS THE INCOME FOR ONLY THESE TWO YEARS EXCEEDED THE MAXIMUM AMOUNT NOT CHARGEABLE TO TAX. THE YEAR - WISE CASH ROTATION STATEMENT FURNISHED BY THE ASSESSEE DULY EXPLAINS CREDIT ON ACC OUNT OF VARIOUS INCOME RECEIVED AND ITS SOURCE. WITH REGARD TO THE AGRICULTURAL RECEIPTS THE ISSUE HAS ALREADY BEEN DISCUSSED IN THE EARLIER GROUND. RECEIPTS OF INTEREST INCOME HAS ALSO BEEN DISC LOSED BY THE ASSESSEE. - : 24 : - 24 RECEIPT FROM SHRI R.L. LOHIA AMOUNTIN G TO RS. 7 LAKHS ITSELF WAS FOUND AS PER THE LOOSE PAPERS FOUND DURING THE COURSE OF SEARCH IN BS - 3. THIS WAS AGAINST SALE OF LAND. FOR THE ASSESSMENT YEAR 1999 - 2000 RS. 40 000/ - AND FOR ASSESSMENT YEAR 2002 - 03 RS. 80 000/ - WAS RECEIVED FROM SMT.SHARDA OM JI BAGLA. RELEVANT CONFIRMATIONS WERE FILED BEFORE THE AO ALONGWITH COPY OF RETURN OF SMT.SHARDA OMJI BAGLA WHEREIN AMOUNT OF LOAN WAS DISCUSSED. IT WAS ALREADY DISCLOSED BY THE ASSESSEE IN HER RETURN FOR ASSESSMENT YEAR 2001 - 02 PRIOR TO SEARCH. ADVANCES GIVEN WERE ALSO OUT OF AVAILABLE CASH. IN THE CASH FLOW STATEMENT WE FOUND THAT THE EXPENSES INCURRED HAVE ALSO BEEN TAKEN CARE OF AND AT NO POINT OF TIME THE EXPENSES EXCEEDED THE BALANCE OF CASH AVAILABLE. WITH REGARD TO THE PAWNING BUSINESS THE ASSES SEE HAS NOT MAINTAINED ANY BOOKS. BALANCE OF ADVANCES WERE ALREADY DISCLOSED IN REGULAR RETURN PRIOR TO SEARCH. LIST OF BALANCE OUTSTANDING AGAINST ASSETS WAS ALSO FILED. EVEN AGRICULTURAL RECEIPTS SHOWN BY - : 25 : - 25 THE ASSESSEE WAS IN EXACT FIGURE. DURING THE COUR SE OF SEARCH NO INCRIMINATING MATERIAL WAS FOUND. SINCE AGRICULTURAL INCOME WAS DULY DISCLOSED IN REGULAR RETURNS THE SAME WAS INCORPORATED IN THE CASH FLOW STATEMENT PREPARED TO JUSTIFY AVAILABILITY OF VARIOUS EXPENSES. SINCE IN THE ASSESSMENT YEAR 1997 - 98 TO 200 8 - 09 INCOME WAS BELOW TAXABLE LIMIT NO RETURN OF INCOME WAS FILED. SINCE ASSESSMENT YEAR 2001 - 02 AND 2002 - 03 THE RETURN WAS FILED SINCE IT EXCEEDED THE TAXABLE LIMIT AS DEDUCTION U/S 88C WAS AVAILABLE NO TAX WAS PAID. WE THEREFORE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF CIT(A) FOR DELETING THE IMPUGNED ADDITION OF RS. 49 52 150/ - . 20. THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED EXPENDITURE AMOUNTING TO RS. 2 87395/ - IS NOT SUSTAINABLE IN VIEW OF THE FACT THAT SAME HAS ALREADY BEEN INCORPORATED IN THE CASH FLOW STATEMENT AS DISCUSSED ABOVE WHEREIN WE DO NOT FIND ANY ERROR. - : 26 : - 26 21. THE ADDITION WAS ALSO MADE BY THE ASSESSING OFFICER ON ACCOUNT OF OPENING CASH OF RS. 92 009 / - . THIS FIGURE WAS TAKEN BY THE ASSESSEE A S OPENING CASH BALANCE WHILE PREPARING THE CASH FLOW STATEMENT. THE LD. CIT(A) HAS DELETED THE SAME BY OBSERVING THAT THE ASSESSEE WAS CULTIVATING HIS LAND FOR THE LAST 40 YEARS AND ALSO DOING BUSINESS FOR THE LAST 15 YEARS AND WITHIN SUCH PERIOD IT WAS P OSSIBLE FOR HER TO S AVE AND KEEP CASH AMOUNT AS OPENING BALANCE OF RS. 92009/ - . 22. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS. KEEPING IN VIEW THE EXPENDITURE OF THE ASSESSEE AND STANDARD OF LIVING OPENING CASH BALANCE SHOWN AT RS. 92009/ - APPEARS TO BE ON HIGHER SIDE. KEEPING IN VIEW TOTALITY OF FACTS WE DIRECT THE AO TO TAKE OPENING CASH BALANCE AT RS. 50 000/ - . BALANCE CASH IS BEING ADDED TO THE INCOME OF THE ASSESSEE AS UNEXPLAINED OUT OF TOTAL CASH BALANCE OF RS.92 009/ - AS SHOWN BY THE ASSESSEE . - : 27 : - 27 23. THE ADDITION OF RS. 12 38 358/ - ON ACCOUNT OF UNDISCLOSED INCOME OF PAWNING BUSINESS WAS DELETED BY THE LD. CIT(A) AFTER HAVING FOLLOWING OBSERVATIONS : - I HAVE CAREFULLY CONSIDERED THE WRITTEN SUBMISSIONS AND THE DOCUMENTS ENCLOSED BY TH E APPELLANT AND ALSO PERUSED THE ORDER OF THE AO. THE ADDITION OF RS. 12 38 358/ - HAS BEEN MADE AS UNDISCLOSED INCOME OF PAWNING BUSINESS. I FOUND THAT THE YEAR WISE AMOUNTS WHICH HAVE BEEN HELD TOBE UNDISCLOSED INCOME HAVE BEEN SHOWN IN THE CASH ROTATION STATEMENT IN WHICH THE APPELLANT HAS SHOWN THE AVAILABILITY OF FUNDS AND ALSO THE UTILIZATION OF THE SAME. SINCE THE CASH ROTATION STATEMENT HAS BEEN CONSIDERED GENUINE AND ACCEPTED ACCORDINGLY THE ADDITION OF RS. 12 38 358/ - IS TOTALLY UNJUSTIFIED AND U NCALLED FOR. - : 28 : - 28 THEREFORE THE SAME IS TO BE DELETED. THUS THE APPEAL ON THIS GROUND IS ALLOWED. 24. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND FOUND THAT CHANDAK GROUP WAS HAVING SAHUKARI BUSINESS AT LARGE SCALE WHICH WAS RUN BY ITS TWO HUFS NAMELY RAM KUMAR CHANDAK AND SHRI SHYAM KUMAR CHANDAK HUF. ADDITION S FOR SUCH ADVANCES HAVE A LREADY BEEN MADE IN THE CASE OF RAM KUMAR CHANDAK HUF WHICH HAS BEEN DELETED BY THE LD. CIT(A) IN CASE OF HUF. THE ISSUE HAS BEEN DISCUSSED BY US WHILE DISPOSING GROUND NO. 5 OF REVENUE S APPEAL IN THE CASE OF RAM KUMAR CHANDAK HUF. RESPECTFULLY FOLLOWING THE REASONING GIVEN BY US IN CASE OF RAM KUMAR CHANDAK (HUF) IN I.T. (SS). A.NO. 192 / IND /200 7 WE DO NOT FIND A NY REASON TO INTERFERE IN THE FINDING OF THE LD. CIT(A) FOR DELETING THE ADDITION OF RS. 49 52 1250/ - IN THE HANDS OF SMT. YAMUNA DEVI CHANDAK. - : 29 : - 29 25. WITH REGARD TO ADDITION OF RS. 60 622/ - BY TREATING THE REGULAR INCOME AS UNDISCLOSED INCOME WE FOUND THAT ALL THESE INCOMES HAVE ALREADY BEEN DISCLOSED IN THE RETURNS FILED U/S 139(4). I.T.A CT DOES NOT PREVENT THE ASSESSEE TO FURNISH THE RETURN OF INCOME WITHIN THE TIME ALLOWED UNDER THE VARIOUS PROVISIONS OF SECTION 139. MERELY BECAUSE SUCH RETURNS WERE NOT FILE D U/S 139(1) THE SAME CANNOT BE ADDED AGAIN WHILE FRAMING THE BLOCK ASSESSMENT WHEN UNDISPUTEDLY INCOME OF RS. 60 622/ - WAS ALREADY FORMING PART OF RETURN OF INCOME FOR ASSESSMENT YEAR 2001 - 02. THUS THERE IS NO INFIRMITY IN THE ORDER OF CIT(A) WHO ALLOW ED THIS GROUND BY DISCUSSING AT PAGE 23 OF HIS APPELLATE ORDER. 26. IN THE RESULT THE APPEAL OF THE REVENUE IS ALLOWED IN PART. 27. IN THE CROSS OBJECTION THE ASSESSEE HAS CHALLENGED THE VALIDITY OF ASSESSMENT FRAMED U/S 158BD. - : 30 : - 30 28. CONTENTION OF THE LD. AUTHORIZED REPRESENTATIVE WAS THAT NO SEARCH WAS CONDUCTED AGAINST ASSESSEE AND WHILE FRAMING THE ASSESSMENT U/S 158BD THE AO HAS NOT REFERRED TO ANY INCRIMINATING MATERIAL FOUND DURING SEARCH AGAINST THE ASSESSEE. HE FURTHER SUBMITTED THAT THE ASSESSEE APPLIED FOR PROVIDING COPY OF SATISFACTION U/S 158BD BUT THE SAME WAS NOT SUPPLIED. THE LEGAL GROUND TAKEN BY THE ASSESSEE WAS DISMISSED BY THE LD. CIT(A) AFTER HAVING FOLLOWING OBSERVATIONS : - I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE APPELLANT AND PERUSED THE ORDER OF THE AO. I HAVE ALSO GONE THROUGH THE REPLIES FILED BEFORE THE AO IN COMPLIANCE TO THE VARIOUS NOTICES ISSUED BY THE ASSESSING OFFICER. THE CONTENTION OF THE LD. AUTHORIZED REPRESENTATIVE REGARDING THE SATISFACTION RECORDED BEFORE THE INITIATI ON OF PROCEEDINGS U/S 158BD IS NOT ACCEPTABLE BECAUSE AS PER THE REASON S MENTIONED BY - : 31 : - 31 HIM ON PAGE NO. 1 & 2 THERE WERE SUFFICIENT MATERIAL AVAILABLE WITH THE AO FOR TAKING THE ACTION AGAINST THE APPELLANT BY ISSUING NOTICE U/S 158BD. THUS THIS GROUND OF T HE APPELLANT IS DISMISSED. 29. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND FOUND THAT THE AO IN HIS ORDER AT PAGE NOS. 1 & 2 HAS DULY DISCUSSED THE REASON FOR INITIATING PROCEEDINGS U/S 158BD. THE CIT(A) HAS ALSO RECORDED A CATEGORICAL FINDING TO THE EFFECT THAT THERE WERE SUFFICIENT MATERIAL AVAILABLE WITH THE AO FOR TAKING ACTION AGAINST THE ASSESSEE BY ISSUING NOTICE U/S 158 BD. NOTHING WAS BROUGHT TO OUR NOTICE TO DEVIATE FROM THE FINDING RECORDED BY THE LD. CIT(A). WE THEREFORE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) FOR HOLDING THE INITIATION OF PROCEEDINGS U/S 158BD AS VALID. 30. IN THE RESULT THE APPEAL OF THE REVENUE IN I.T.(SS)A.NO. 186/IND/2008 IS ALLOWED IN PART WHEREAS CROSS OBJECTION FILED BY THE ASSESSEE IS DISMISSED. - : 32 : - 32 I. T.(SS)A.NO. 96/IND/2006 : 31. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. THE FACTS IN BRIEF ARE THAT ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM CONSISTING OF RAM KUMAR CHANDAK HUF AND SHYAM KUMAR CHANDAK HUF. JEWELLERY SHOP WAS OPENED ON 21.11 .2002. THERE WAS SE ARCH AT THE SHOP ON 13.12.2002. THUS THE BLOCK PERIOD COMPRISED ONLY FROM 21.11.2002 TO 13.12.2002 I.E. ONLY FOR 23 DAYS. IN REPLY TO THE NOTICE ISSUED U/S 158BC THE ASSESSEE SUBMITTED THAT UNDER PROVISIONS OF SECTION 44AF THE ASSESSE E IS NOT REQUIRED TO MAINTAIN THE BOOKS OF ACCOUNT AS THE TURNOVER WAS BELOW RS. 40 LAKHS AND THAT SALES OF THE ASSESSEE ARE VERIFIABLE FROM THE BILL BOOK WHICH WAS SEIZED DURING THE COURSE OF SEARCH. FURTHER THE RETURN FOR ASSESSMENT YEAR 2003 - 04 WAS NO T DUE ON SEARCH DATE. HOWEVER THE AO HAS ASSESSED THE INCOME ON 23 DAYS AT RS. 23 86 440/ - I.E. @ RS. 1 03 758/ - PER DAY. FROM THE ORDER OF THE AO WE FOUND THAT THERE WAS SEARCH AT ASSESSEE S - : 33 : - 33 BUSINESS PREMISES WHEREIN ON THE BASIS OF FOLLOWING DOCUMENTS FOUND DURING SEARCH THE ADDITION WAS MADE BY THE ASSESSING OFFICER : - S.NO. SEIZED PAPER REFERENCE AMOUNT ( RS.) AMOUNT ( RS.) 1. LPS 2 PG. 18 22 25 TO 29 33 42 72 1 59 132/ - 2. LPS 1 PG. 3 TO 5 13 23 24 44 668/ - 3. BS 5 PAGE 91PB 85 7 96 550/ - 4. BS 5 PAGE 91 (BACK) PAPER BOOK 86 9 69 200 5. BS 5 PAGE 92 PAPER BOOK 87 1 45 000 LESS: ADDITION FOR STOCK 22 88 595 LESS: ADDITION FOR STOCK 9 78 096 13 10 499 32. BY THE IMPUGNED ORDER THE LD. CIT(A) DELETED THE ADDITIO N AFTER HAVING THE FOLLOWING OBSERVATIONS : - - : 34 : - 34 I HAVE CONSIDERED THE SUBMISSION OF THE LEARNED COUNSEL VERY CAREFULLY. I HAVE ALSO SEEN THE REASONING GIVEN BY THE ASSESSING OFFICER FOR MAKING ADDITION AMOUNT TO RS. 97 844/ - BY APPLY ING GROSS PROFIT RATE OF 20 % ON TOTAL SALE OF RS. 4 89 218/ - . AFTER DUE CONSIDERATION OF THE MATTER I HOLD THAT AO WAS NOT JUSTIFIED IN C OMPUTING UNDISCLOSED INCOME ON THE BASIS OF DOCUMENTS BS - 1 BS - 6 BS - 7 BS - 8 & BS - 9 BECAUSE INCOME COMPUTED ON THE BASIS OF ENTRIES FOUND RECO RDED IN THE DOCUMENTS FOUND DURING THE COURSE OF SEARCH BEING IS REQUIRED TO BE EXCLUDED FROM THE COMPUTATION OF TOTAL UNDISCLOSED INCOME OF THE BLOCK PERIOD IN VIEW OF CLAUSE (D) OF SUB SECTION (1) OF SECTION 158BB WHICH IS APPLICABLE TO THE FACTS AND CIR CUMSTANCES OF THE CASE OF THE APPELLANT AS THE PREVIOUS YEAR IN CASE OF APPELLANT HAS NOT ENDED OR THE DATE OF FILING - : 35 : - 35 OF THE RETURN OF INCOME U/S 139(1) HAS NOT EXPIRED. THE CLAUSE (D) OF SUB SECTION (1) OF SECTION `158BB CLEARLY SPECIFIED THE EXCLUSION OF INCOME FROM THE PURVIEW OF TOTAL UNDISCLOSED INCOME WHICH IS COMPUTED ON THE BASIS OF DOCUMENTS FOUND DURING THE SEARCH OF THE PREVIOUS YEAR WHICH HAS NOT ENDED. I AGREE WITH THE ARGUMENT OF THE LEARNED COUNSEL THAT THERE WAS NO JUSTIFICATION FOR THE AO T O APPLY A RATE OF 20 % ON A TURNOVER FOR WORKING OUT INCOME BECAUSE IT IS THE FIRST YEAR OF THE BUSINESS THAT TOO ONLY FOR A PERIOD OF 22 DAYS AND APPELLANT S CASE IS THE BEST CASE FOR MAKING COMPARISON. AS PER TRADING ACCOUNT PREPARED AS REPRODUCED ABOVE THE GROSS PROFIT IS WORKED OUT TO RS. 39 324/ - WHICH IN TERMS OF PERCENTAGE IS ABOUT 10%. IT WOULD BE APPROPRIATE IF THE INCOME OF THE APPELLANT FOR THE BUSINESS CONDUCTED ONLY - : 36 : - 36 22 DAYS IS TAKEN AT RS. 39 350/ - AS AGAINST RS. 97 844/ - TAKEN BY THE ASSESSI NG OFFICER. THERE IS A CONSIDERABLE FORCE IN THE ARGUMENT OF THE LEARNED COUNSEL THAT AO HAS INCLUDED EVEN THE TRADE DEBTORS IN CREDIT SALE AS IS EVIDENT FROM THE DETAILS OF SALES MENTIONED ABOVE THE CORRECT AMOUNT OF SALE ON THE BASIS OF THESE DOCUMENTS IS WORKED OUT TO RS. 3 93 502/ - AS AGAINST RS. 4 89 218/ - . ACCORDINGLY ADDITION MADE BY THE ASSESSING OFFICER AMOUNTING TO RS. 97 844/ - IS HEREBY DELETED AS INCOME OF THE APPELLANT ON THE BASIS OF THE DOCUMENTS FOUND DURING THE COURSE OF SEARCH IS REQUIRE D TO BE EXCLUDED IN VIEW OF CLAUSE (D) OF SUB - SECTION (1)_ OF SECTION 158BB FROM THE COMPUTATION OF TOTAL UNDISCLOSED INCOME OF THE BLOCK PERIOD. I THEREFORE DELETE THE ADDITION MADE BY THE ASSESSING - : 37 : - 37 OFFICER. THUS THESE GROUNDS 9 13 & 14 ARE DISPOSED O FF ACCORDINGLY. 33. ADDITION ON ACCOUNT OF UNEXPLAINED STOCK OF GOLD AND SILVER ORNAMENTS AMOUNTING TO RS. 9 78 096/ - WAS DELETED BY THE LD. CIT(A) AFTER HAVING THE FOLLOWING OBSERVATIONS : - I HAVE VERY CAREFULLY CONSIDERED THE SUBMISSION OF THE LEARNED CO UNSEL IN THIS REGARD. I HAVE ALSO SEEN THE REASONS GIVEN BY THE ASSESSING OFFICER FOR MAKING ADDITION OF RS. 9 78 096/ - ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE STOCK OF GOLD & SILVER ORNAMENTS FOUND ON THE DATE OF SEARCH. AFTER DUE CONSIDERATION OF THE MATTER I HOLD THAT AO WAS NOT JUSTIFIED IN MAKING ADDITION AS APPELLANT HAD SATISFACTORILY EXPLAINED THE SOURCE OF ACQUISITION OF GOLD & SILVER ORNAMENTS FOUND ON THE DATE OF SEARCH. APPELLANT HAS PREPARED TRADING ACCOUNTS RELATING TO GOLD & SILVER - : 38 : - 38 ORNAM ENTS ON THE BASIS OF DOCUMENTS FOUND DURING THE COURSE OF SEARCH RELATING TO THE BUSINESS OF GOLD & SILVER ORNAMENTS OF THE APPELLANT AND IT WAS FOUND THAT STOCK OF GOLD & SILVER ORNAMENTS AS WORKED OUT ON THE BASIS OF TRADING ACCOUNTS WHICH WAS PREPARED O N THE BASIS OF DOCUMENTS. ALL PURCHASES AND SALE WERE TAKEN INTO ACCOUNT WHILE PREPARING TRADING ACCOUNT OF THESE ITEMS AS ARE REFLECTED IN THE DOCUMENTS SEIZED. SINCE NO EXCESS OF GOLD & SILVER ORNAMENTS WERE FOUND AS A RESULT OF SEARCH IN MY CONSIDERED VIEW NO ADDITION IS REQUIRED TO BE MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT. AO WAS NOT JUSTIFIED IN NOT CONSIDERING THE ENTIRE PURCHASES MADE. APPELLANT THOUGH HAD NOT MAINTAINED REGULAR BOOKS OF ACCOUNT I.E. CASH BOOK AND LEDGER BUT IT HAD MAINTAINED TH E RELIABLE RECORDS OF PURCHASE AND SALE. AS - : 39 : - 39 PROVIDED U/S 158BB THE UNDISCLOSED INCOME IS TO BE COMPUTED ONLY WITH REFERENCE TO EVIDENCE FOUND DURING THE COURSE OF SEARCH AND APPELLANT HAD NOT MADE ANY INVESTMENT WHICH IS NOT RECORDED THE ADDITION MADE BY THE ASSESSING OFFICER IS NOT SUSTAINABLE. SINCE APPELLANT HAD SATISFACTORILY EXPLAINED THE SOURCE OF ACQUISITION OF GOLD & SILVER ORNAMENTS FOUND ON THE DATE OF SEARCH NO UNDISCLOSED INCOME IS REQUIRED TO BE COMPUTED. ACCORDINGLY ADDITION MADE BY THE AS SESSING OFFICER ON ACCOUNT OF UNEXPLAINED STOCK IN STOCK OF GOLD & SILVER ORNAMENTS IS HEREBY DELETED BECAUSE APPELLANT HAD VERY WELL EXPLAINED THE GOLD & SILVER ORNAMENTS FOUND DURING THE COURSE OF SEARCH. THEREFORE THIS GROUND IS DECIDED IN FAVOUR OF TH E APPELLANT. 34. REVENUE IS IN FURTHER APPEAL BEFORE US - : 40 : - 40 35. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND FOUND THAT DURING SEARCH FOLLOWING GOLD AND CASH WAS FOUND ON PHYSICAL VERIFICATION : - S.NO. PARTICULARS GROSS WEIGHT FOUND VALUE IN PANCHNAMA (RS.) 1. GOLD 1623.440 GM S . 7 81 759.00 2. SILVER 57.365 KGS. 3 17 283.00 3. CASH 9 235.00 TOTAL` 11 08 277.00 36. THE SOURCE OF CASH AND GOLD WAS EXPLAINED BY THE ASSESSEE OUT OF ITS CAPITAL CONTRIBUTION OF RS. 12 LAKHS ( RS. 6 LAKHS BY EACH PAR TNER ) . IN VIEW OF THE CAPITAL OF RS. 12 LAKHS EMPLOYED BY THE ASSESSEE FIRM STOCK OF GOLD AND SILVER OF RS. 11 . 08 LAKHS FOUND DURING SEARCH CANNOT BE SAID TO BE UNDISCLOSED INCOME WITHIN THE MEANING OF SECTION 158B(B) OF THE INCOME - TAX ACT 1961. WE THE REFORE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) FOR DELETING THE SAME AFTER RECORDING FINDING AS STATED ABOVE. - : 41 : - 41 37. NEXT GRIEVANCE OF THE REVENUE RELATES TO DELETION OF ADDITION OF RS. 13 10 449/ - ON ACCOUNT OF INVESTMENT IN YAMUNA JEWELLERS. 38. WE HAVE C AREFULLY CONSIDERED THE RIVAL CONTENTIONS AND FOUND FROM THE RECORD THAT BUSINESS OF PARTNERSHIP FIRM WAS STARTED WITH INITIAL CASH CAPITAL OF RS. 12 LAKHS WHICH WAS CONTRIBUTED BY BOTH THE PARTNERS IN THEIR HUF CAPACITY IN EQUAL PROPORTION. DURING COURSE OF ASSESSMENT THE ASSESSEE HAS FURNISHED CONFIRMATION LETTERS FROM BOTH THE PARTNERS DULY CONFIRMING HAVING INVESTED RS. 6 LAKHS EACH. THE CONFIRMATION LETTER ALSO STATED REGARDING RESPECTIVE PAN NUMBERS OF PARTNERS . THE MONEY SO RECEIVED BY THE FIRM WAS INVESTMENT OF THE PARTNERS OF THE FIRM AND IT CANNOT BE SAID TO BE UNDISCLOSED INVESTMENT OF THE ASSESSEE FIRM. THE ISSUE IS SQUARELY COVERED BY THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF METACHEM INDUSTRIES 161 CTR 444 . CREDIT FOR SAID INVESTMENT OF PARTNERS HAS TO BE GIVEN IN THE CASE OF THE - : 42 : - 42 ASSESSEE FIRM. ACCORDINGLY WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) FOR DELETING THE ADDITION OF RS. 13 10 449/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF INVESTMENT IN YAMUNA JEWELLERS SOURCE OF WHICH WAS DULY EXPLAINED. 39. NEXT GRIEVANCE OF THE REVENUE RELATES TO DELETION OF ADDITION OF RS. 97 844/ - MADE BY THE ASSESSING OFFICER IN THE ESTIMATION OF GROSS PROFIT ON SALES. IN THIS REGARD THE AO OBSERVED THAT BILL BOOKS SEIZED DURING SEARCH DO NOT CONTAIN SERIAL NUMBERS/BILL NUMBERS AND THEY ARE JUST ESTIMATE AND ARE INDICATIVE OF THE FACT THAT THE ASSESSEE DOES NOT WANT TO SHOW TURNOVER WHILE FURNISHING RETURN. IT WAS SUBMITTED B EFORE THE ASSESSING OFFICER THAT IT WAS A NEW SHO P JUST OPENED ABOUT 23 DAYS BACK IN THE VILLAGE AREA AND THEREFORE WHAT THE ASSESSEE DID FOR MEETING HIS IMMEDIATE REQUIREMENT HE PURCHASED THE READY MADE BILL BOOK FROM THE MARKET AND FOR THE DAILY SALES THE BILLS WERE ISSUED IN - : 43 : - 43 REGULAR MANNER. THE PU RCHASE OF BILL BOOK AND ISSUING BILLS TO THE CUSTOMERS SHOWS BONA FIDE INTENTION OF THE ASSESSEE. THEREFORE IT CANNOT BE SAID TO BE UNDISCLOSED INCOME FALLING WITHIN THE PURVIEW OF SECTION 158(B) AND THE SAME HAVE ALREADY BEEN CONSIDERED BY THE ASSESSEE I N ITS RETURN OF INCOME. THE SEIZED PAPERS BS - 1 BS - 6 TO BS - 9 SHOW TOTAL SALES OF THE ASSESSEE BOTH CASH AND CREDIT AS UNDER : - S.NO. PARTICULARS WEIGHT AMOUNT 1. GOLD JEWELLERY 600.001 GMS. 330709 2. SILVER 7837 GMS. 62793 TOTAL 393502 40. IT I S CLEAR FROM THE ABOVE THAT TOTAL CASH AND CREDIT SALES FOR 23 DAYS WERE RS. 3.93 LAKHS OUT OF WHICH NET DEBTORS OF CREDIT SALES AS PER BS - 1 WERE RS. 1 06 568/ - . THE NET CASH REALIZATION AGAINST SALES THEREFORE WAS RS. 2 87 574/ - . HOWEVER DUE TO TOALLI NG ERROR THE AO STATED THAT TOTAL SALES WAS - : 44 : - 44 RS. 4.89 LAKHS ON WHICH AO APPLIED GROSS PROFIT RATE OF 20 % AND MADE THE ADDITION OF RS. 97 844/ - . THE REASON FOR VARIATION IN SALES TAKEN BY THE ASSESSING OFFICER AND ACTUAL SALE WAS THAT THE CREDIT SALE BILL P OSTED IN BS - 1 WAS AGAIN BEING TAKEN AS SALES BY THE ASSESSING OFFICER. THE APPLICATION OF GROSS PROFIT RATE OF 20 % BY THE ASSESSING OFFICER IS NOT BASED ON ANY SEIZED MATERIAL AND THE SAME WAS ONLY ASSUMPTION AND PRESUMPTION OF THE AO. SINCE THE SALE OF T HE ASSESSEE WAS BELOW RS. 40 LAKHS DURING THE YEAR THE PROVISIONS OF SECTION 44AF IS APPLICABLE ACCORDING TO WHICH PROFIT IS TO BE TAKEN AT 5 %. KEEPING IN VIEW THE NATURE OF ASSESSEE S BUSINESS BEING SALE OF JEWELLERY ADDITIONAL INCOME ON ACCOUNT OF MA KING OF JEWELLERY CANNOT BE RULED OUT . KEEPING IN VIEW TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE THE AO IS DIRECTED TO APPLY PROFIT RATE OF 7.5 % ON THE TOTAL SALES EFFECTED BY THE ASSESSEE SO AS TO COVER THE INCOME ON ACCOUNT OF MAKING CHARGES . WE DIRECT ACCORDINGLY. - : 45 : - 45 41. IN THE RESULT THE APPEAL OF THE REVENUE IS ALLOWED IN PART. 42. IN THE CROSS OBJECTION FILED BY THE ASSESSEE THE ASSESSEE IS AGGRIEVED FOR INITIATION OF PROCEEDINGS U/S 158B C OF THE ACT AGAINST THE ASSESSEE FIRM ON THE PLEA THAT ACTION U/S 158BD HAS ALREADY BEEN TAKEN AGAINST SHYAM KUMAR HUF AND RAM KUMAR HUF THEREFORE AS PER LD. AUTHORIZED REPRESENTATIVE PROCEEDINGS AGAINST ASSESSEE FIRM U/S 158BC DESERVES TO BE QUASHED. 43. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND FOUND THAT INCRIMINATING MATERIAL WAS FOUND DURING COURSE OF SEARCH AT ASSESSEE FIRM WITH RESPECT TO BUSINESS CARRIED ON BY THE PARTNERSHIP FIRM M/S. YAMUNA JEWELLERS THEREFORE THE AO WAS JUSTIFIED IN INITIAT ING PROCEEDINGS U/S 158B C AGAINST ASSESSEE FIRM AND THERE IS NO INFIRMITY FOR INITIATING ACTION U/S 158B C . - : 46 : - 46 44. IN THE RESULT THE APPEAL OF THE REVENUE IS ALLOWED IN PART WHEREAS THE CROSS OBJECTION FILED BY THE ASSESSEE IS DISMISSED. I.T.(SS)A.NO. 115/IND/2008 AND C.O.NO. 22/IND/2010 : 45. THE FACTS IN BRIEF ARE THAT IN TERMS OF SEARCH AT PREMISES OF SHRI S.K. CHANDAK AND SHRI R.K. CHANDAK ON 13.12.2002 ASSESSEE WAS ISSUED NOTICE U/S 158BD ON 15.7.2005. THEREAFTER THE AO FRAMED ASSESSMENT U/S 158BD/143(3) AT AN INCOME OF RS. 4 75 000/ - AS AGAINST NIL RETURNE D INCOME. IN THE ASSESSMENT SO FRAMED THE ADDITION OF RS. 4 75 000/ - WAS MADE ON ACCOUNT OF ENTRIES FOUND IN THE SEIZED PAPERS BS - 3/188 WHICH INDICATED INVESTMENT O F RS. 4 LAKHS AND INTEREST OF RS. 75 000/ - . THE LD. CIT(A) HAS DELETED THE ADDITION AFTER OBSERVING THAT THESE AMOUNTS HAVE ALREADY BEEN DISCLOSED BY SHRI SHYAM KUMAR CHANDAK HUF AND SHRI RAM KUMAR CHANDAK HUF AND ALSO PAID DUE TAX THEREON. THEREFORE THIS ADDITION OF RS. 4 75 000/ - IS NOT WARRANTED IN THE HANDS OF ASSESSEE SHRI SUSHIL - : 47 : - 47 KUMAR MANTRI. REVENUE IS IN FURTHER APPEAL BEFORE US 46. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND GONE THROUGH THE SEIZED MATERIAL AND THE SUPPORTING EVIDENCE PLACED ON RECORD. WE FOUND THAT THE AMOUNT OF RS. 4 LAKHS REPRESENTED INVESTMENT BY SHRI RA M KUMAR CHANDAK AND SHRI SHYAM KUMAR CHANDAK AT RS. 2 LAKHS EACH WHICH HAS BEEN OFFERED BY THESE TWO PERSONS IN THEIR BLOCK RETURNS AS PLACED AT PAPER BOOK 9 TO 11 AND AFFIDAVITS HAVE ALSO BEEN FILED AND PLACED AT PAPER BOOK 22 - 23. FURTHERMORE IN THEIR ASSESSMENTS THE SAME HAS BEEN ACCEPTED. THUS THERE IS NO INFIRMITY IN THE ORDER OF THE CIT(A) FOR DELETING THE ADDITION IN THE HANDS OF SHRI S.K. MANTRI. 47. IN THE CROSS OBJECTION THE ASSESSEE HAS OBJECTED INITIATION OF PROCEEDINGS U/S 158BD. 48. WE HAVE CAR EFULLY CONSIDERED THE RIVAL CONTENTIONS AND FOUND THAT SEIZED PAPER BS - 3/181 WHERE CREDIT APPEARED IN THE NAME OF SUSHIL MANTRI - : 48 : - 48 IS A SUFFICIENT REASON TO BELIEVE THAT PROCEEDINGS AGAINST SHRI SUSHIL MANTRI IS REQUIRED U/S 158BD. FURTHERMORE WHEN THIS IN COME HAS ALREADY BEEN OFFERED AND TAXED IN THE HANDS OF SHYAM KUMAR CHANDAK HUF AND RAM KUMAR CHANDAK HUF AND DULY TAXED IN THEIR RESPECTIVE HANDS THE CROSS OBJECTION FILED BY SHRI SUSHIL KUMAR MANTRI HAS BECOME ACADEMIC. 49. IN THE RESULT ALL THE APPEALS OF THE REVENUE ARE ALLOWED IN PART WHEREAS THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE DISMISSED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 27 TH JU LY 2011. SD/ - SD/ - (JOGINDER SINGH) ( R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER D ATED : 27 TH JU LY 2011 . CPU* 212 8