Shri Shyam Kumar Chandak (Indl.), v. The ACIT, 1(1),

CO 128/IND/2007 | misc
Pronouncement Date: 26-07-2011 | Result: Dismissed

Appeal Details

RSA Number 12822723 RSA 2007
Assessee PAN AECPC9068C
Bench Indore
Appeal Number CO 128/IND/2007
Duration Of Justice 3 year(s) 8 month(s) 18 day(s)
Appellant Shri Shyam Kumar Chandak (Indl.),
Respondent The ACIT, 1(1),
Appeal Type Cross Objection
Pronouncement Date 26-07-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 26-07-2011
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. : AECPC9068C I.T. (SS). A.NO. 192 / IND /200 7 BLOCK ASSESSMENT PERIOD : 01.04.1996 TO 13.12.2002 ACIT SHRI RAM KUMAR CHAND AK 1(1) VS UDAIPURA BHOPAL. DISTT. RAISEN ASSESSEE RESPONDENT C.O. NO.126/IND/2007. (ARISING OUT OF I.T. (SS). A.NO. 192 / IND /200 7 ) BLOCK ASSESSMENT PERIOD : 01.04.1996 TO 13.12.2002 SHRI RAM KUMAR CHANDAK ACIT UDAIPURA VS 1(1) DISTT. RA ISEN BHOPAL. CROSS OBJECTOR RESPONDENT PAN NO. : ACRBC0104C I.T. (SS). A.NO. 190 / IND /200 7 BLOCK ASSESSMENT PERIOD : 01.04.1996 TO 13.12.2002 ACIT SHRI SHYAM KUMAR CHANDAK 1(1) VS UDAIPURA BHOPAL. DISTT. RAISEN ASSESSEE RESPONDENT C.O . NO.12 8 /IND/2007. (ARISING OUT OF I.T. (SS). A.NO. 19 0 / IND /200 7) BLOCK ASSESSMENT PERIOD : 01.04.1996 TO 13.12.2002 - : 2 : - 2 SHRI SHYAM KUMAR CHANDAK ACIT UDAIPURA VS 1(1) DISTT. RAISEN BHOPAL. CROSS OBJECTOR RESPONDENT DEPARTMENT B Y : SHRI KESHAVE SAXENA CIT DR ASSESSEE BY : SHRI H.P.VERMA AND SHRI ASHISH GOYAL O R D E R PER R. C. SHARMA A.M. TH ESE ARE THE APPEALS FILED BY THE REVENUE AND CROSS OBJECTIONS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) IN THE MATTER OF BLOC K ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER U/S 158BC READ WITH SECTION 143(3) FOR THE PERIOD 1.4.1996 TO 13.12.2002. COMMON GROUNDS HAVE BEEN TAKEN IN ALL THE APPEALS THEREFORE THEY WERE HEARD TOGETHER AND ARE NOW DECIDED BY THIS CONSOLIDATED ORD ER. 2. F OLLOWING GROUNDS HAVE BEEN TAKEN BY THE REVENUE IN I.T.(SS).A.NOS. 192/IND/2007 : - ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN : - - : 3 : - 3 1. HOLDING THAT NOTICE ISSUED BY THE ASSESSING OFFICER U/S 158BC FOR FILING OF RETURN OF INCOME IS NOT VALID AND THEREFORE CONSEQUENTIAL PROCEEDINGS ARE UNSUSTAINABLE. 2. DELETING THE ADDITION OF RS. 56 98 000/ - MADE BY THE ASSESSING OFFICER FOR UNDISCLOSED INVESTMENT IN TRACTORS AND IN THE NAME OF BENAMI PERSONS ON SUBSTANTIVE BASIS. 3. DELETING THE ADDITION OF RS. 28 215/ - ON ACCOUNT OF UNDISCLOSED INCOME FROM TRACTOR HIRING CHARGES. 4. DELETING THE ADDITION OF RS. 14 14 120/ - BEING UNDISCLOSED INCOME ON ACCOUNT OF PURCHASE OF LAND LOAN TO BALIRAM AND ON THE BASIS OF LOOSE PAPERS ADDED IN THE HAND S OF ASSESSEE ON SUBSTANTIVE BASIS. 5. DELETING THE ADDITION OF RS. 65 500/ - ON ACCOUNT OF UNEXPLAINED HUNDIES SHARES AND FDRS ON SUBSTANTIVE BASIS. - : 4 : - 4 6. DELETING THE ADDITION OF RS. 1 03 09 398/ - MADE ON ACCOUNT OF UNDISCLOSED INCOME ON THE BASIS OF UNEXPLAINED TRANSACTION I N THE LOOSE PAPERS. 7. DELETING THE ADDITION OF RS. 70 96 0 42/ - ON ACCOUNT OF UNEXPLAINED CREDITS IN BANK ACCOUNTS ON SUBSTANTIVE BASIS. 8. DELETING THE ADDITION OF RS. 36 93 662/ - MADE ON ACCOUNT OF UNEXPLAINED CREDITS IN BANK ACCOUNTS ON SUBSTANT IVE BASIS. 3. THE GROUNDS TAKEN IN THE CROSS OBJECTION READS AS UNDER : - THE LD. CIT(A) ERRED IN NOT HOLDING 1. THAT THE DECISION OF THE AO IS CONTRARY TO LAW MATERIALLY INCORRECT AND UNSUSTAINABLE IN LAW AS WELL AS ON FACTS IN RESPECT OF THE LEGALITY OF A SSESSMENT. 2. THAT THERE WAS NO MATERIAL FOR SEARCH U/S 132. 3. THAT PROVISIONS OF CHAPTER XIV - B WERE NOT ATTRACTED. - : 5 : - 5 4. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. THE FACTS IN BRIEF ARE THAT THE SEARCH AND SEIZURE OPERATION U/S 132(1) OF THE INCOME - TA X ACT 1961 WAS CARRIED OUT ON 13.12.2002 AND 14.12.2002 AT THE RESIDENTIAL AND BUSINESS PREMISES OF CHANDAK GROUP AT UDAIPUR AND AT SHOP OF MAHESHWARI TRACTORS AND A SURVEY OPERATION U/S 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 CASH GOLD AND SILVER JEWELLERY FDR NSCS SHARES STOCKS ETC. WERE FOUND AND OUT OF WHICH CASH FDR NSC S HARES HUNDIES GOLD AND SILVER JEWELLERY WERE SEIZED AND STOCK WORTH RS. 12 81 2 02/ - WAS UNDER DEEMED SEIZURE. 5. BEFORE CIT(A) IT WAS SUBMITTED BY ASSESSEE THAT IN ACCORDANCE WITH THE S EC . 282 OF THE I .T. ACT 1961 SEARCH ACTION U/S 132 WAS NOT JUSTIFIED HENCE THE SAME SHOULD BE QUASHED AS INVALID. IT WAS CONTENDED THAT THE ACTION U/S 132 OF THE IT ACT AGAINST THE ASSESSEE WAS RAISED ON REASON TO SUSPECT AND NOT ON REASONS TO BELIEVE AS CONTEMPLATED U / S 132 OF THE IT ACT AND HENCE ACTION OF SEARCH IS INVALID IN LAW. IT WAS SUBMITTED BEFORE CIT(A) THAT THE AO BE KINDLY DIRECTED TO PLACE D BEFORE YOUR HONOUR THE COPY OF THE SATISFACTION NOTE RECORDED FOR THE PURPOSE OF TAKING ACTION U/S 132 - : 6 : - 6 AND THE COPY OF THE SAME BE ALSO SUPPLIED TO THE ASSESSEE SO THAT THE NECESSARY SUBMISSION IN DEFENCE COULD BE MADE BEFORE HIM . FOR THIS PURPOSE RELI ANCE WAS PLACED ON THE DECISION IN CASE OF DR. A. K. BANSAL VS. ACIT REPORTED IN 247 ITR 54(A T) & OTHER DECISION OF ITAT JODHPUR BENCH IN CASE OF CHITRA DEVI VS. ACIT REPORTED IN 77 TTJ . 640(JD). 6. BEFORE THE CIT(A) THE LD. AUTHORIZED REPRESENTATIVE OF T HE ASSESSEE ALSO CONTENDED THAT PRIOR TO THE SEARCH IT IS AN ADMITTED AND ACCEPTED FACT THAT THE ASSESSEE HAS A STATUS OF HUF. ALL THE ASSETS OF THE ASSESSEE OR ANCESTRAL AND THE INCOME FROM SUCH ASSETS ARE THE INCOME OF THE HUF WHICH HAVE BEEN ASSESSED A S SUCH FOR THE PAST SEVERAL YEARS AND THEREFORE THE ASSESSEE HAS ALL REASONS TO BELIEVE THAT THE SEARCH WARRANT IN SUCH CIRCUMSTANCES WOULD HAVE NOT BEEN ISSUED IN THE STATUS OF INDIVIDUAL UNDER THE PROVISIONS OF SECTION 2(31) OF THE IT ACT. AS PER LD. AUT HORIZED REPRESENTATIVE T HERE ARE SEVEN CATEGORIES OF PERSONS ASSESSABLE UNDER IT ACT. THE SAID SECTION CONTAINS THE DEFINITION OF 'PERSON'. THE SAID SECTION THEREFORE PRESCRIBES THAT HUF AND INDIVIDUAL ARE DISTINCT PERSON. SECTION 132 OF THE IT ACT EMPO WERS THE INCOME TAX AUTHORITY TO TAKE ACTION AGAINST 'PERSON' TO WHOM SUMMONS UNDER SECTION 131 - : 7 : - 7 IS ISSUED BUT HE FAILED TO PRODUCE THE BOOKS OF ACCOUNT OR TO A PERSON WHO IS IN POSSESSION OF MONEY BULLION GOLD JEWELLERY ETC. THE FORM NO.45 PRESCRIBED FOR THE ISSUE OF WARRANT OF AUTHORIZATION UNDER SECTION 132 ALSO REQUIRES NAMING OF SUCH PERSON. SECTION 158BC ALSO SAYS THAT WHERE ANY SEARCH HAS BEEN CONDUCTED UNDER SECTION 132 OR BOOKS OF ACCOUNTS OTHER DOCUMENTS OR ASSETS ARE REQUISITIONED UNDER SECTION 132A IN CASE OF ANY PERSON THE AO SHALL MAKE AN ASSESSMENT AGAINST SUCH PERSON IN ACCORDANCE WITH THE PROVISION OF CHAPTER XIV - B OF THE IT ACT. IT WAS ALSO SUBMITTED THAT ALL THE RELATED PROVISIONS OF IT ACT REQUIRED SPECIFICATIONS OF PERSON WHO HAS BEE N SUBJECTED TO SEARCH PROCEEDING AN D THE AO THEN ONLY ASSUMED THE JURISDICTION TO MAKE THE ASSESSMENT OF SUCH PERSON AND NOT TO ANY OTHER PERSON. HE SUBMITTED THAT BEFORE TAKING AN ACTION UNDER SECTION 132 THE' AUTHORITIES HAS TO BE SPECIFIC AS TO THE PER SON AND HIS STATUS AND THEREAFTER THE AO IS ALSO BOUND TO ISSUE A NOTICE UNDER SECTION 158BC MENTIONING THEREIN CLEARLY THE STATUS OF THE PERSON FOR WHICH HE IS PROPOSED TO BE ASSESSED. VAGUE AND ILLEGAL NOTICE HAVE NO LEGAL STATUS AND SO ALSO THE VAGUE AU THORIZATION/ACTION UNDER SECTION 132. LD. AUTHORIZED REPRESENTATIVE ALSO SUBMITTED THAT IN THE INSTANT CASE THERE WAS NO - : 8 : - 8 AUTHORIZATION IN THE INDIVIDUAL CAPACITY AND THEREFORE THE ISSUE OF NOTICE UNDER SECTION 158BC AND THAT TO WITHOUT SPECIFYING THE STATU S IS UNLAWFUL AND WITHOUT JURISDICTION AND HENCE THE IMPUGNED ORDER MAY KINDLY BE DECLARED AS BAD IN LAW. 7. FURTHER CONTENTION OF THE LD. AUTHORIZED REPRESENTATIVE WAS THAT THE SEARCH IN THIS CASE WAS INSTITUTED ON 13 - 12 - 2002 & 14.12.2002 . IN THE COURSE O F SEARCH STATEMENT WAS RECORDED. IN THE SAID STATEMENT THE ASSESSEE CATEGORICALLY STATED THAT HE OWNS ANCESTRAL AGRICULTURAL LAND ON WHICH CULTIVATION IS BEING CARRIED ON AND DERIVED SUBSTANTIAL INCOME FROM YEAR TO YEAR. HE ALSO HAVE INTEREST INCOME FROM MONEY LENDING ACTIVITIES WHICH IS FUNDED THROUGH THE AGRICULTURAL INCOME. THE ASSESSEE HAS ALSO STATED BEFORE THE AO THAT HE IS DOING BUSINESS IN PARTNERSHIP IN THE NAME OF YAMUNA JEWELLERS IN WHICH THERE ARE TWO PARTNERS NAMELY ONE SHYAM KUMAR CHANDAK(HU F) AND RAM KUMAR CHANDAK (HUF). THE ASSESSEE ALSO CATEGORICALLY STATED IN THE STATEMENT RECORDED ON 14.12.2002 THAT ALL THE ASSETS BELONGS TO HUF AND HE IS DECLARING INCOME IN HIS TAX RETURN IN THE STATUS OF HUF. HE HAS ALSO FILED A CHART SHOWING THE YEAR - WISE RETURN FROM A Y 1996 - - : 9 : - 9 1997 TO 2003 - 2004 AND DATE OF FILING THEREOF. HE ALSO ADDED IN HIS SUBMISSION THAT THE ASSESSMENT FOR THE YEAR 1998 - 1999 WAS COMPLETED UNDER SCRUTINY U/S 143(3). THE LD. AUTHORIZED REPRESENTATIVE ALSO VEHEMENTLY CONTENDED THAT IT IS AN ESTABLISHED FACT ON RECORD THAT THE ASSESSEE HAS NO SELF ACQUIRED PROPERTY OR ASSETS AND HAS NO INCOME IN HIS INDIVIDUAL CAPACITY. THIS IS ALSO SUPPORTED BY THE FACT THAT DURING THE COURSE OF SEARCH OPERATION NO DOCUMENTS OR EVIDENCE WAS FOUND TO PRO VE THAT THERE WAS ANY INCOME FROM ANY SOURCE IN HIS INDIVIDUAL CAPACITY. HENCE THE AO WAS UNDER THE STATUTORY OBLIGATION ABOUT THE STATUS OF THE ASSESSEE AT WHICH THE NOTICE WAS TO BE ISSUED. BEFORE CIT(A) IT WAS SUBMITTED BY THE ASSESSEE THAT THE NOTICE SO ISSUED WAS A VAGUE NOTICE WITHOUT COMPLYING WITH THE MANDATORY REQUIREMENT AS ENVISAGE D IN THE LAW AND ALSO DECIDED IN VARIOUS DECISIONS BY THE HIGH COURTS AND TRIBUNALS. ASSESSEE FURTHER SUBMITTED THAT THE NOTICE ISSUED U/S 158BC IS INVALID IN LAW AND ALL THE SUBSEQUENT PROCEEDING BASED UPON SUCH ILLEGAL NOTICE IS ALSO INVALID AND BAD. THEREFORE HE PLEADED THAT THE IMPUGNED ORDER BE HELD AS ILLEGAL AND WITHOUT JURISDICTION AND BE CANCELLED. - : 10 : - 10 8. AFTER CONSIDERING THE DECISION OF DR. A.K. BANSAL THE LD. CIT(A) HELD THAT THE AO HAS NOT ESTABLISHED AND DECIDED THE OBJECTION OF THE ASSESSEE AS TO HOW THE NOTICE ISSUED WITHOUT CONTAINING AND MENTIONING STATUS OF THE ASSESSEE WHEN THIS FACT WAS WELL WITHIN THE KNOWLEDGE OF THE AO. ACCORDINGLY THE CIT(A) HELD THAT NOTICE U/S 158BC ISSUED BY THE ASSESSING OFFICER AND SERVED ON THE ASSESSEE ON 11.10.2004 FOR FILING THE RETURN WAS INVALID. 9. BY THE IMPUGNED ORDER THE LD. CIT(A) ACCEPTED THE ASSESSEE S CONTENTION AFTER HAVING FOLLOWING OBSERVATIONS : - AFTER CONSI DERING THE FACTS OF THE CASE AND THE SUBMISSIONS 1 AM OF THE CONSIDERED OPINION THAT THE AO HAS NOT ESTABLISHED AND DECIDED THE OBJECTION OF THE ASSESSEE THAT AS TO HOW THE NOTICE ISSUED WITHOUT CONTAINING AND MENTIONING THE ASSESSEE STATUS EVE N THIS FACT WAS WELL WITHIN THE KNOWLEDGE OF THE AO. THE GROUND NO.7 AND THE SUBMISSION OF THE ASSESSEE AGAINST THIS GROUND IS MORE SPECIFIC WHEREIN THE ID. AR HAS - : 11 : - 11 MENTIONED THE DETAILS ABOUT THE STATUS OF THE ASSESSEE AS HUF. IN SUCH CIRCUMSTANCES I HAVE NO HESITATI ON TO HOLD THAT THE NOTICE UNDER SECTION 158BC ISSUED BY THE AO & SERVED ON THE ASSESSEE ON 11.10.2004 FOR FILING THE RETURN IS NOT VALID. THEREFORE THE NOTICE AND THE CONSEQUENTIAL PROCEEDINGS BASED UPON SUCH ILLEGAL NOTICE ARE DECIDED UNSUSTAINABLE IN L AW. THESE GROUNDS ARE THEREFORE DECIDED IN FAVOUR OF THE ASSESSEE . 10. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS. THIS ISSUE HAS BEEN DEALT IN DETAIL WHILE DECIDING APPEAL OF REVENUE IN CASE OF RAM KUMAR CHANDAK HUF I.T.A.NO. 188/IND/2007. FOLLOW ING THE SAME REASONING AND ANALOGY THE GROUND RAISED BY REVENUE IS ALLOWED IN ITS FAVOUR. 11. WITH REGARD TO THE ADDITION OF RS. 56 98 000/ - MADE ON ACCOUNT OF UNDISCLOSED INVESTMENT IN THE TRACTOR GIVEN IN THE NAME OF BENAMI PERSONS THE A . O . HAS DISCUSSED THIS ISSUE ON PARA NO.1 ON PAGE NO.2 OF HIS ORDER. THE AO OBSERVED ON SCRUTINY OF - : 12 : - 12 SEIZED DOCUMENTS LPS(MT - 2) SEIZED FROM THE PREMISES OF MAHESWARI TRACTORS UDAIPURA SHOWS THAT THIS FILES CONTAINS REGISTRATION CERTIFICATES OF 37 TRACTORS WHICH ARE REGIST ERED IN THE NAME OF VARIOUS FAMILY MEMBERS AND RELATIVES OF CHANDAKS AND MALANIS AND BENAMI PERSONS WHO HAPPENS TO BE RELATIVES AND KNOWN PERSONS OF THESE TWO FAMILIES. THE AO FURTHER MENTIONED THAT THE ASSESSEE HAS NOT FURNISHED ANY REPLY ON THIS MATTER HENCE HE HELD THAT THE TRACTORS FINANCE BUSINESS WAS MANAGED BOTH BY THE FAMILIES OF CHANDAKS AND MALANIS. HENCE BOTH GROUPS ARE NOT READY TO TAKE THE ONUS. HE HAS FURTHER MENTIONED THAT THE INVESTMENT IN THE PURCHASE OF THESE TRACTORS WORK OUT TO RS. 1 1 3 96 000 / - DURING THE PERIOD 10.07.1997 TO 07.08.2000. IT IS THE GENERAL PRACTICE THAT EVEN IF A VEHICLE IS SOLD TO A PARTY THE SAME IS REGISTERED IN THE NAME OF PURCHASER WITH THE RTO AND THE REGISTRATION BOOK IS HANDED OVER TO THE PURCHASER PARTY. BUT 37 REGISTRATION CERTIFICATE/BOOK WERE FOUND AND SEIZED AS CLEAR FROM LPS(MT)2 THE NAME APPEARS IN THESE REGISTRATION BOOK OR IN THE NAME OF FAMILY MEMBERS OF CHANDAK AND MALANI GROUP AND IN THE BENAMI NAMES. HE HAS FURTHER - : 13 : - 13 MENTIONED THAT SINCE BOTH THE FAMIL IES OF CHANDAKS AND MALANIS WERE INVOLVED IN THE INVESTMENT AND FINANCING OF TRACTORS HENCE THE INVESTMENT IS SUBSTANTIALLY ADDED EQUALLY IN THE HANDS OF SHRI SHIVNARAYAN MALANI HUSBAND OF SHRI KAMALA DEVI MALANI AND DEFACTO CONTROLLER OF THE INVESTMENT AN D FINANCING BUSINESS OF MALANI GROUP AND SHRI RA M KUMAR CHANDAK WHO HAPPENS TO BE THE KEY PERSON OF THE CHANDAK GROUP. THE SAME WILL BE PROTECTIVELY ADDED IN THE HANDS OF SMT.KAMALA DEVI MALANI AND SHRI RAMKUMAR CHANDAK. ACCORDINGLY HE MADE ADDITION FOR RS .56 98 000 / - IN THE HANDS OF THE ASSESSEE . 12. BY THE IMPUGNED ORDER THE LD. CIT(A) DELETED THE ADDITION AFTER HAVING THE FOLLOWING OBSERVATIONS : - 1. ' I HAVE MYSELF PERUSED THE BOOKS OF ACCOUNTS WHICH WERE NOT SEIZED DURING THE COURSE OF SEARCH AND FOUND T HAT SALE RELATING TO 37 TRACTORS IS DULY FOUND RECORDED IN THE REGULAR BOOKS OF ACCOUNT AND AS SUCH HAS BEEN SHOWN BY THE ASSESSEE IN THE RESPECTIVE RETURNS FILED BY IT IN THE NORMAL COURSE. - : 14 : - 14 THEREFORE THERE IS NO JUSTIFICATION AT ALL FOR ASSESSING OFFICER TO INFER THAT ASSESSEE HAD NOT RECORDED THE SALE OF 37 TRACTORS IN HIS BOOKS OF A CCOUNTS. THE SALES OF 37 TRACTORS ARE DULY SUPPORTED BY BILLS AND VOUCHERS. THEREFORE IT IS NOT CORRECT TO SAY THAT IT IS NOT VERIFIABLE. THE SALE OF 37 TRACTORS ARE ABSOLU TELY VERIFIABLE AND A RE FOUND DULY RECORDED IN THE REGULAR B OOKS OF ACCOUNTS. THEREFORE T HERE IS NO JUSTIFICATION WHAT SO EVER TO DRAW ADVERSE INFERENCE IN RESPECT OF SALE OF 37 TRACTORS AS MENTIONED IN ANNEXURE - 2 . ' THE THEN CIT(A) - L HAS DISCUSSED IN D ETAILS ABOUT THE 37 TRACTORS ON PAGE NO.14 OF HIS APPELLATE ORDER AND MENTIONED THAT THE SALE OF 37 TRACTORS ARE DULY SUPPORTED BY BILLS AND VOUCHERS. A FINDING HAS ALSO BEEN RECORDED BY CIT(A) IN THE APPELLATE ORDER THAT THE SALE OF 37 TRACTORS ARE ABSOLU TELY VERIFIABLY AND ARE FOUND DULY RECORDED IN THE REGULAR BOOKS OF ACCOUNTS. THEREFORE THERE - : 15 : - 15 IS NO JUSTIFICATION WHAT SO EVER TO DRAW ADVERSE INFERENCE IN RESPECT OF 37 TRACTORS AS MENTIONED IN ANNEXURE - 2. I HAVE GONE THROUGH THE ORDER OF THE AO AND AL SO THE THEN CIT(A)I AND ALSO PERUSED THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE WHICH IS ON PAGE NO.57 TO 61 OF HIS PAPER BOOK. I HAVE ALSO SEEN THE INVOICE / BILLS RAISED BY M/S.MAHESHWARI TRACTORS. RESPECTFULLY FOLLOWING THE DECISION IN CASE OF M/S.MA HESHWARI TRACTORS I HOLD THAT THE ADDITION OF RS.56 98 000 / - MADE BY THE AO CANNOT BE SUSTAINED AND HAS TO BE DELETED. THUS THE APPEAL ON THIS POINT IS ALLOWED. 13. WE HAVE CONSIDERED RIVAL CONTENTIONS. WITH REGARD TO ADDITION ON ACCOUNT OF INVESTMENT I N TRACTORS AMOUNTING TO RS. 56.98 LAKHS WE FOUND THAT DURING SEARCH AT M/S. MAHESHWARI TRACTORS 37 REGISTRATION CERTIFICATES FOR TRACTORS IN NAMES OF VARIOUS PERSONS WERE FOUND. THE AO HELD THAT TRACTORS WERE PURCHASED - : 16 : - 16 BY BENAMI PERSONS WHO HAPPENED TO BE RELATIVES AND KNOWN PERSONS OF CHANDAK FAMILY AND MALANI FAMILY. THEREFORE THE AO MADE ADDITION ON ACCOUNT OF INVESTMENT BY OBSERVING THAT INVESTMENT IN TRACTORS WAS MADE BY THE ASSESSEE AND MALANI FAMILY EQUALLY. HALF AMOUNT OF RS. 56.98 LAKHS WAS ADD ED IN THE HANDS OF THE ASSESSEE. AFTER GIVING FINDING AT PAGE 6 OF THE APPELLATE ORDER AND DEALING WITH SUBMISSIONS OF ASSESSEE AND AO AS PLACED AT PAPER BOOK PAGE NO.149 TO 152 THE CIT(A) HAS DELETED THE ADDITION. FROM THE RECORD WE FOUND THAT MATERIAL WAS NOT FOUND AT THE PREMISES OF THE ASSESSEE NOR THE ASSESSEE WAS PARTNER IN M/S. MAHESHWARI TRACTORS IN HIS INDIVIDUAL CAPACITY. SMT.KAMLA MALANI AND SHRI RAM KUMAR CHANDAK (HUF) ARE PARTNERS OF MAHESHWARI TRACTORS. THE AO HAD MADE ADDITION ON SUBSTANTI VE BASIS IN ASSESSEE S HANDS AND IN THE HANDS OF SMT. KAMLA DEVI AND RAM KUMAR CHANDAK HUF. AS PER THE DETAILS PLACED ON RECORD WE FOUND THAT TRACTORS WERE PURCHASED BY PERSONS DIFFERENT FROM ASSESSEE AND AO - : 17 : - 17 HAS BROUGHT NOTHING ON RECORD TO SHOW THAT THE TRACTORS WERE PURCHASED BY THE ASSESSEE. EVEN THE REGISTRATION CERTIFICATE WHICH IS A PRIMA FACIE EVIDENCE OF OWNERS OF VEHICLE WAS NOT IN THE NAME OF ASSESSEE. TRACTORS WERE NOT FOUND DURING SEARCH AT ASSESSEE S PREMISES AND THE SALES OF THESE TRACTORS WERE DULY RECORDED IN REGULAR BOOKS OF M/S. MAHESHWARI TRACTORS TO PERSONS DIFFERENT FROM ASSESSEE WHICH IS EVIDENT AS PER THE SALE BILLS PLACED AT PAGE 153 TO 189 OF PAPER BOOK. SOME SALES HAVE ALREADY BEEN VERIFIED BY SALES TAX OFFICER AS PER THE DOCUME NTS PLACED AT PAGE 189 OF THE PAPER BOOK. 14. IN VIEW OF THE ABOVE OBSERVATION WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) FOR DELETING THE IMPUGNED ADDITION. 15. THE ADDITION MADE ON ACCOUNT OF UNDISCLOSED INCOME FROM TRACTOR HIRING CHARGES AMO UNTING TO RS. 28 215/ - WAS DELETED BY THE LD. CIT(A) AFTER HAVING THE FOLLOWING OBSERVATIONS : - I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE ASSESSEE . I HAVE ALSO GONE THROUGH THE - : 18 : - 18 ORDER OF THE AO. ON PERUSAL OF THE ORDER I FOUND THAT THE AO HAS MENTI ONED ONLY THAT DOCUMENTS BEARING NO. BS - 4/PAGE 125 - 126 SHOW THE HIRING CHARGES OF THE TRACTORS ON VARIOUS DAYS AND TOTAL AMOUNT OF RS. 28 215/ - HAS BEEN CHARGED ON NUMEROUS OCCASIONS AND SAME IS ADDED TO THE UNDISCLOSED INCOME OF THE ASSESSEE . HE HAS NOT P ROVED THAT THIS PAPER PERTAINS TO ASSESSEE AND HE HAS RECEIVED THIS AMOUNT. THE AO HAS ALSO NOT CONDUCTED ANY ENQUIRY FROM THE LOCAL PERSON AS TO WHETHER THE ASSESSEE DERIVES ANY INCOME FRO M TRACTOR HIRING CHARGES. SINCE THE ADDITION IS WITHOUT ANY INFORMA TION OR CONFIRMATION THE ADDITION IS NOT JUSTIFIED AND HAS TO BE DELETED. THUS THE APPEAL ON THIS POINT IS ALLOWED . 16. WE HAVE CONSIDERED RIVAL CONTENTIONS W ITH RESPECT TO ADDITION MADE ON ACCOUNT OF TRACTOR HIRING INCOME OF RS. 28 215/ - WE FOUND THAT - : 19 : - 19 DOCUMENTS RELATING TO SUCH INCOME WAS FOUND FROM PREMISES OF M/S. YAMUNA JEWELLERS WHICH RELATED TO M/S. CHANDAK BANDHU KRISHI FARM AND ALSO INDICATE AGRICULTURAL INCOME OF VARIOUS FAMILY MEMBERS WITH REGARD TO THE AGRICULTURAL OPERATIONS CARRIED OUT BY THEM. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) FOR DELETING THE ADDITION OF RS. 28 215/ - . 17. WITH REGARD TO ADDITION OF RS. 14 14 120/ - ON ACCOUNT OF PURCHASE OF LAND LOAN TO BALIRAM THE AO OBSERVED THAT DURING THE COURSE OF SEARCH S OME LOOSE PAPERS WERE FOUND PERTAINING TO THE ASSESSEE AND HE WAS ASKED VIDE QUESTIONNAIRE U/S 142(1) DATED 04.12.2004 TO EXPLAIN THE NATURE OF POSSESSION OF THIS DOCUMENTS AND THE KIND OF TRANSACTION WHICH IT INDICATES AND TO EXPLAIN SUCH TRANSACTIONS IN DETAILS. HE FURTHER MENTIONED THAT THE ASSESSEE GAVE A SCANTY REPLY WHICH IS WITHOUT ANY BASIS AND DOCUMENTARY EVIDENCE. THE AO THEREFORE MADE ADDITION OF RS.14 14 120/ - . 18. BY THE IMPUGNED ORDER THE LD. CIT(A) DELETED THE ADDITION AFTER HAVING THE FOLLOWIN G OBSERVATIONS : - - : 20 : - 20 I HAVE PERUSED THE ORDER OF THE AO AND ALSO CAREFULLY CONSIDERED THE WRITTEN SUBMISSIONS OF THE ASSESSEE GIVEN ON PAGE NO. 100 - 101 . I HAVE ALSO SEEN AND VERIFIED THE ENCLOSURES IN THE SHAPE OF EVIDENCE AND FOUND THAT THE AO HAS NOT CON SIDERED JUDICIOUSLY THESE DOCUMENTS WHICH WERE ALREADY FOUND AND SEIZED. THE ID. AR HAS MENTIONED IN DETAILS OF HIS SUBMISSION IN POINT NO. 2 TO 5. AFTER CONSIDERING ALL THE FACTS AND THE EVIDENCES ENCLOSED BY THE ASSESSEE I AM OF THE CONSIDERED VIEW THAT THE AO WAS NOT JUSTIFIED IN MAKING THE ADDITION OF RS. 14 14 120/ - WHICH HAS TO BE DELETED. THUS THE APPEAL ON THIS POINT IS ALLOWED. 19. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS W ITH REGARD TO ADDITION OF RS. 14 14 120/ - ON ACCOUNT OF INVESTME NT IN LAND/LOAN WE FOUND THAT LPS A/3 RELATED TO PURCHASE OF TWO AGRICULTURAL LANDS OF 1.5 ACRE EACH. TOTAL INVESTMENT WORKS OUT TO BE RS. 1 27 332/ - BY HUF WHICH IS DULY DISCLOSED IN THE RETURN OF HUF FOR ASSESSMENT YEAR 1999 - 2000 AT RS. 1 27 332/ - INC LUDING ALL OTHER COSTS. WITH REGARD TO LPS - A/6 INDICATING LOAN TO SHRI BALIRAM WE FOUND THAT - : 21 : - 21 PANCHNAMA WAS IN THE NAME OF RAM KUMAR CHANDAK AND SHYAM KUMAR CHANDAK. IT REFERRED TO P.B.199 WHICH IS A LOOSE SHEET MENTIONING THE AMOUNT. IT CANNOT BE SAID T HAT THE PAPER BELONGS TO THE ASSESSEE. FURTHERMORE NO ACTION WAS TAKEN IN THE HANDS OF SHYAM KUMAR CHANDAK. THIS PAPER WAS ALSO NOT IN THE HAND WRITING OF ASSESSEE NOR SIGNED BY HIM. IT DOES NOT STATE OF LOAN GIVEN BY ASSESSEE TO BALIRAM NOR INDICATE EAR NING OF ANY INTEREST INCOME OF RS. 90000/ - THEREON. THIS DOCUMENT IS DUMP DOCUMENT WHICH APPEARS TO BE RELATING TO BALIRAM S COURT CASE. LPS A/15 INDICATE EXPENSES VIDE THREE VOUCHERS WHICH RELATE TO PURCHASE OF PESTICIDES JOINTLY WITH OTHER FARMERS NAM ELY DEVENDRA KUMAR LODHI RS. 2.50 LAKHS AND KAMLESH KUMAR RS. 3 63 000/ - TO AVAIL DISCOUNT. AFFIDAVIT OF THESE PERSONS WERE PLACED BEFORE THE LOWER AUTHORITIES. BALANCE OF RS. 2 87 000/ - WHICH WAS PAID BY ASSESSEE FAMILY WERE DULY RECORDED IN HUF RETURN PRIOR TO SEARCH SOME EXPENSES WERE INCURRED BY THE ASSESSEE AND SIMILAR EXPENSES HAVE BEEN RECORDED BY OTHER - : 22 : - 22 FAMILY MEMBERS. SINCE ASSESSEE FAMILY MAINLY IS AGRICULTURIST VARIOUS MEMBERS OF THE FAMILY WERE HOLDING POSTS AS UNDER : - (I) ASSESSEE WAS SURPANCH OF PANCHAYAT WHICH INCLUDED MANY VILLAGES INCLUDING KHADON BHADON GAYKHURI NARHARA. (II) SMT. RADHA DEVI W/O SHYAM SUNDER WAS PARSHAD OF UDAIPURA MUNICIPAL COMMITTEE. (III) SHRI SHYAM CHANDAK WAS CHAIRMAN OF HEALTH COMMITTEE JANPAT PANCHAYAT UDAIPURA COMPRISING OF 196 VILLAGES. SINCE ASSESSEE WAS NOT CARRYING ANY AGRICULTURAL ACTIVITIES IN ITS INDIVIDUAL CAPACITY NO ADDITION IS WARRANTED IN THE HANDS OF ASSESSEE INDIVIDUAL. ACCORDINGLY NO INFIRMITY IN THE ORDER OF CIT(A) DELETING THE IMPUGNED ADDITION. - : 23 : - 23 20. ADDITI ON OF RS. 65 500/ - MADE ON ACCOUNT OF UNEXPLAINED HUNDIES SHARES AND FDRS WAS DELETED BY THE LD. CIT(A) AFTER HAVING FOLLOWING OBSERVATIONS : - I HAVE CONSIDERED THE ORDER OF THE AO AND ALSO PERUSED THE SUBMISSION OF THE ASSESSEE . THE ADDITION CANNOT BE S USTAINED BECAUSE OF THE REASON THAT THE ASSESSEE HAD EXPLAINED ALL THE PAPERS AND INVESTMENT AT THE TIME OF HEARING AS THE COPY OF THESE DOCUMENTS WAS NOT PROVIDED TO HIM. THIS FACT IS EVIDENT FROM THE FDR OF RS. 1 0 000/ - WAS CONSIDERED IN THE CASE OF SMT. RADHA CHANDAK IN HER CASE. RS. L 0 000/ - IN THE SHAPE OF FDR BELONGS TO SMT. KANDI GODANI WAS EXPLAINED PROPERLY AND HUNDIES WORTH RS.49 500/ - HAS NOT BEEN ESTABLISHED BY THE AO BELONGING TO THE ASSESSEE . AFTER TAKING INTO CONSIDERATION ALL THE FACTS AND T HE SUBMISSION OF THE ASSESSEE I AM OF THE VIEW THAT THE ADDITION OF RS. 65 500/ - IS NOT JUSTIFIED AND THE SAME HAS TO - : 24 : - 24 BE DELETED. THUS THE APPEAL ON THIS GROUND IS ALLOWED. 21. IN THIS REGARD THE AO IN HIS PARA NO. 4 OF THE ORDER H AS MENTIONED THAT THE F D R S AMOUNTING TO RS.25 000/ - (VS - L) NSC WORTH RS.10 000/ - (VS - 2) AND SHARED RS.3 000/ - (VS - 3) AND HUNDI WORTH RS.49 500/ - (HS - I) WERE FOUND DURING THE COURSE OF SEARCH. HE FURTHER FOUND THAT THE ASSESSEE HAS NOT EXPLAINED PROPERLY AND HELD THAT THE ASSESSEE FILED VAGUE AND INSUFFICIENT REPLY REQUIRED TO PROVE THE SOURCE OF ABOVE INVESTMENT OF RS.65 500/ - . THEREFORE HE MADE ADDITION OF RS.59 500/ - ON SUBSTANTIVE BASIS IN THE HANDS OF THE ASSESSEE AND RS. 10 000/ - INVESTMENT IN F D R IN THE NAME OF SHRI KANTI GO DANI AND RS.49 500/ - IS ADDED ON PROTECTIVE BASIS IN THE HANDS OF SHRI SHYAM KUMAR CHANDAK. 22. WE HAVE CONSIDERED RIVAL CONTENTIONS AND FOUND THAT THE HUNDI OF RS. 49 500/ - WAS MENTIONED IN THE PANCHNAMA PREPARED IN THE NAME OF SHYAM KUMAR CHANDAK. AS PER DOCUMENTS PLACED ON RECORD LOAN WAS GIVEN TO MANOJ KUMAR RS. 20 000/ - SHRI GIRDHARILAL JAIN RS. 27 500/ - CONTENTION OF LD. - : 25 : - 25 AUTHORIZED REPRESENTATIVE WAS THAT THE LOAN WAS GIVEN BY SMT. YAMUNA DEVI AS PER THE DOCUMENTS PLACED AT P.B.NO.334 AND THE SAME H AVE ALREADY BEEN ACCOUNTED FOR IN HIS BOOKS 1999 - 2000. ACCORDINGLY WE CONFIRM THE ACTION OF CIT(A) FOR DELETING RS. 20 000/ - . THE BALANCE AMOUNT OF RS. 27 500/ - WHICH REMAINED UNEXPLAINED IS HEREBY REVERSED AND ACTION OF THE AO FOR MAKING THIS ADDITION I S BEING CONFIRMED. 23. WITH REGARD TO ADDITION OF RS. 3000/ - ON ACCOUNT OF SHARES AND INTEREST ON FDR (AGRO BOND GOLDEN FOREST LIMITED RS. 3000/ - ) THE CONTENTION OF LD. AUTHORIZED REPRESENTATIVE WAS THAT INSPITE OF REPEATED REQUEST THE COPY WAS NOT SUPPLIE D TO THE ASSESSEE TO EXPLAIN THE SAME. IT WAS ALSO STATED THAT INTEREST ON THESE BONDS WAS NOT RECEIVED NOR ACCRUED AS BONDS ARE TO MATURE AFTER 25 YEARS. IN THE INTEREST OF JUSTICE WE RESTORE THE GROUND WITH REGARD TO ADDITION OF RS. 3 000/ - ON ACCOUNT OF SHARES WITH A DIRECTION TO FURNISH A COPY TO THE ASSESSEE FOR HIS EXPLANATION. IN RESPECT OF INTEREST ON BOND AMOUNTING TO RS. 3000/ - - : 26 : - 26 WHICH NEITHER ACCRUED NOR RECEIVED BY THE ASSESSEE THERE IS NO REASON TO BRING THE SAME INTO TAX NET DURING THE YEAR U NDER CONSIDERATION. ACCORDINGLY THIS PART OF CIT(A) S ACTION IS CONFIRMED. WITH REGARD TO ADDITION ON ACCOUNT OF FDR OF RS. 10 000/ - OF SMT. KANTI GODANI WE FOUND THAT THESE FDRS WERE NOT BELONGING TO THE ASSESSEE BUT RELATED TO THE MOTHER IN LAW OF THE ASSESSEE S BROTHER IN LAW. AFFIDAVIT TO THIS EFFECT WAS ALSO FILED BEFORE THE AO. THE AO IS DIRECTED TO EXAMINE SMT.KANTI GODANI TO FIND OUT THE FACTUAL POSITION AND TO DECIDE THE ISSUE AFRESH. WE DIRECT ACCORDINGLY. 24. WITH REGARD TO ADDITION OF RS. 1 03 09 398/ - ON THE BASIS OF TRANSACTION IN LOOSE PAPERS THE AO HAS DEALT WITH ISSUE AT PAGE 5 OF HIS ORDER WHEREIN HE STATED THAT AS PER NOTINGS ON LOOSE PAPER ASSESSEE HAD GIVEN LOAN TO CERTAIN PERSONS AND MADE SOME INVESTMENT/ INCURRED EXPENSES. 50 % OF TOTA L SUM WAS ADDED IN THE HANDS OF RAM KUMAR AND SHYAM KUMAR. HOWEVER THESE AMOUNT WERE PROTECTIVELY ADDED IN THE HANDS OF BOTH HUFS. C ONTENTION OF THE ASSESSEE BEFORE THE AO WAS THAT THE TWO HUF'S MENTIONED ABOVE ARE INCOME TAX ASSESSEE SINCE ASSESSMENT YEA R 1996 - 1997 AND THE OTHER - : 27 : - 27 MEMBERS ARE ALSO ASSESSED TO INCOME TAX SINCE ASSESSMENT YEAR 2001 - 2002. SEARCH WAS CONDUCTED ON 13.12.2002 RELEVANT TO THE FINANCIAL YEAR 2002 - 2003 ASSESSMENT YEAR 2003 - 2004. PRIOR TO THE SEARCH THE RETURNS OF ALL THE MEMBERS OF THE FAMILY WERE FILED UPTO ASSESSMENT YEAR 2002 - 2003 AND SINCE THE RETURNS FOR ASSESSMENT YEAR 2003 - 2004 WERE NOT FILED AS THEY WERE NOT DUE. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE AND HIS FAMILY MEMBERS HAD BEEN FILING THEIR RETURNS REGULARLY FROM YEA R TO YEAR ENCLOSING THEREWITH ALL THE NECESSARY AND REQUIRED DOCUMENTS. HE ALSO STATED THAT THE CAPITAL ACCOUNT AND BALANCE SHEET ENCLOSED IN THE RETURN PRIOR TO SEARCH ARE ENCLOSED ALONGWITH THE SUBMISSION. HE HAS VEHEMENTLY ARGUED THAT NONE OF THE LOANS AND ADVANCES ARE UNEXPLAINED. ALL THE LOANS AND ADVANCES HAVE BEEN DISCLOSED IN THE RESPECTIVE BALANCE SHEETS PERTAINING TO THE CONCERNED MEMBER OF THE CHANDAK GROUP. HE ALSO ENCLOSED THE SUMMARY OF SAID LOANS AND ADVANCES AS MENTIONED IN ANNEXURE - I. HE H AS EXPLAINED THAT RAM KUMAR CHANDAK DOES NOT HAVE ANY INCOME IN HIS INDIVIDUAL CAPACITY ALL HIS ASSETS YIELDING INCOME ARE ANCESTRAL ASSETS AND HE DOES NOT HAVE ANY ASSETS IN HIS INDIVIDUAL CAPACITY. HE HAD ALWAYS BEEN FILING INCOME TAX RETURNS IN THE CAP ACITY OF KARTA OF HIS OWN BRANCH OF HUF. THIS FACT IS ALSO VERY - : 28 : - 28 MUCH EVIDENT FROM THE ASSESSMENT RECORD OF HUF. IN HIS STATEMENT RECORDED DURING THE COURSE OF SEARCH HE HAD CATEGORICALLY STATED THAT HIS INCOME AND PROPERTIES ARE HUF PROPERTIES AND HE HAD NO PROPERTY OR INCOME IN HIS INDIVIDUAL CAPACITY. THE ID. AR ALSO ENCLOSED THE STATEMENT OF FACTS WHICH WERE FILED ALONGWITH THE RETURN. IT IS WORTH POINTING OUT TO NOTE THAT THE ASSESSEE HAS ALSO INFORMED AND DISCLOSED THIS FACT AT THE TIME OF SEARCH. HE HAS ASSERTED THAT THE ASSESSMENT RECORDS OF THE ASSESSEE EXISTS WITH THE DEPARTMENT PRIOR TO SEARCH ALSO SUPPORTS THE CONTENTION OF THE ASSESSEE . THE ID.AR HAS FILED DETAILED EXPLANATION IN RESPECT OF VARIOUS LOOSE PAPERS ON THE BASIS OF WHICH THE AO WORKE D OUT THE UNDISCLOSED INCOME OF RS. 2 06 18 797/ - . THE EXPLANATION HAS BEEN GIVEN ON PAGE NO.123 TO 148. HE HAS ALSO ENCLOSED THE RELEVANT SEIZED PAPERS ON THE BASIS OF WHICH THE AMOUNT OF LOAN OR ADVANCE HAS BEEN TAKEN BY THE AO. THE ID.AR HAS EXPLAINED T HE AMOUNT MENTIONED IN THESE COLUMNS WITH REFERENCE TO THE SEIZED DOCUMENTS. HE HAS FURTHER MENTIONED THAT THE ASSESSEE HAD NO SELF ACQUIRED PROPERTY AND ALL ASSETS OR PROPERTIES ARE ANCESTRAL IN NATURE. THEREFORE THE INCOME YIELDED THERE FROM IS ASSESSABL E AS THE INCOME OF THE HUF AND THE INVESTMENT MADE FROM THE SAID INCOME ARE THE INVESTMENT OF THE HUF. IT WAS - : 29 : - 29 SUBMITTED THAT THE AO IS ERRONEOUSLY ASSESSING THE DISCLOSED INCOME FROM THE DISCLOSED INVESTMENT OF HUF AS THE UNDISCLOSED INCOME OF THE ASSESSE E AS AN INDIVIDUAL. HE HAS FURTHER SUBMITTED THAT THE INCONSISTENCY IN HIS FINDING IS ALSO VERY MUCH APPARENT FROM THE FACT THAT THE AO IS RECORDING THE FINDING THAT THE SAME INCOME WILL ALSO BE ASSESSED AS THE INCOME OF HUF. HOWEVER THE AO DID NOT ACCEP T ASSESSEE S CONTENTION AND ADDED EQUAL AMOUNT IN THE INCOME OF RAM KUMAR AND SHYAM KUMAR. 25. BY THE IMPUGNED ORDER THE LD. CIT(A) DELETED THE ADDITION AFTER HAVING THE FOLLOWING OBSERVATIONS : - I HAVE CAREFULLY PERUSED THE SUBMISSION AND DOCUMENTS FILED BY THE L D. AR. I HAVE ALSO GONE THROUGH THE ORDER OF THE AO. AFTER GOING THROUGH THE DOCUMENTS I FOUND THAT THERE IS IMMENSE FORCE IN THE ARGUMENTS AND SUBMISSION PLACED BEFORE ME BY THE L D.AR. THE STATUS OF THE ASSESSEE AS HUF HAS NEVER DISPUTED OR DOUBTE D BY THE AO. IT HAS BEEN - : 30 : - 30 FOUND THAT THE ASSESSEE HAS GENERATED AND ACCUMULATED THE INCOME FROM THE AGRICULTURE LAND WHICH HE RECEIVED AFTER DEATH (IN THE YEAR 1994) OF HIS FATHER LATE SHRI MADAN GOPALJI CHANDAK. THE ASSESSEE WAS ALSO FILING HIS RETURN REGU LARLY UNDER THE STATUS OF HUF. I HAVE ALSO CONSIDERED THE SEIZURE ITEM AS MENTIONED IN THE ORDER AND IN THE SUBMISSION AND EXPLANATION OF THE L D.AR IN RESPECT OF ALL THE ADDITIONS. AFTER CONSIDERING THE MATERIAL AND SUBMISSIONS I AM OF THE OPINION THAT TH E AO HAS MADE ADDITION WITHOUT BRINGING ANY POSITIVE AND CORROBORATIVE MATERIAL ON RECORD. THUS THE ENTIRE AMOUNT OF RS. 2 06 18 797/ ADDED BACK BY EQUAL PROPORTION I.E. 50 % EACH IN THE HANDS OF SHYAM KUMAR CHANDAK AND SHRI RAM KUMAR CHANDAK CANNOT BE SU STAINED AND ACCORDINGLY THE AMOUNT OF RS. 1 03 09 398/ - ADDED BACK IN THE INDIVIDUAL - : 31 : - 31 HANDS OF THE ASSESSEE IS DELETED. THE FINDING OF THE AO THAT THE AMOUNT WILL BE PROTECTIVELY ADDED TO BOTH S HYAM KUMAR CHANDAK HUF AN D RAM KUMAR CHANDAK HUF IS ALSO HE LD WRONG AND ACCORDINGLY THE PROPOSED ADDITION IN THE HANDS OF HUF OF BOTH WILL NOT BE JUSTIFIABLE. THEREFORE THIS GROUND OF THE APPEAL IS DISPOSED OFF ACCORDINGLY. THUS THE APPEAL ON THIS GROUND IS ALLOWED. 26. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTEN TIONS AND FOUND THAT W ITH REGARD TO DELETION OF ADDITION OF RS. 1 03 09 398/ - ON ACCOUNT OF LOOSE PAPERS WE FOUND THAT THE AO HAS MADE HALF ADDITION IN THE HANDS OF THE ASSESSEE AND HALF ADDITION IN THE HANDS OF SHRI SHYAM KUMAR CHANDAK. AT THE VERY SAME TIME THE AO HAS ADDED PROTECTIVELY THESE AMOUNTS IN THE HANDS OF RAM KUMAR CHANDAK HUF AND SHYAM KUMAR CHANDAK HUF. CONTENTION OF LD. AUTHORIZED REPRESENTATIVE WAS - : 32 : - 32 THAT NOT EVEN A SINGLE DOCUMENT WAS RELATED TO THE ASSESSEE NOR IT WAS IN THE HANDWRITIN G OF THE ASSESSEE. AS THE PANCHNAMA WAS COMMON IT CANNOT BE MADE OUT THAT THE DOCUMENTS WERE FOUND IN POSSESSION OF THE ASSESSEE. THERE IS NO PRESUMPTION U/S 292B ARISES AGAINST THE ASSESSEE. NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE. ON PERUSA L OF THESE LOOSE PAPERS IT APPEARS THAT THEY PERTAIN TO LOANS TO CERTAIN PERSONS AND CERTAIN EXPENDITURE/INVESTMENT. THE AO ADDED ENTIRE AMOUNT IN ASSESSEE S HANDS WITHOUT GIVING ANY JUSTIFICATION AS TO HOW THE DOCUMENTS BELONG TO THE ASSESSEE. AS PER THE DOCUMENTS PLACED AT PAPER BOOK NO.240 IT IS QUITE CLEAR THAT FAMILY OF THE ASSESSEE WAS REGULARLY ENGAGED IN THE BUSINESS OF MONEYLENDING AND YEARWISE DETAIL OF OUTSTANDING ADVANCE OF THE FAMILY MEMBERS WAS GIVEN THEREIN. HOWEVER IN INDIVIDUAL CAPACITY NEITHER SHRI RAM KUMAR NOR SHRI SHYAM KUMAR ARE ENGAGED IN MONEYLENDING BUSINESS. AS THE DETAILS OF ADVANCES AND THEIR BALANCES WERE REGULARLY DISCLOSED BY THE FAMILY MEMBERS OF THE - : 33 : - 33 ASSESSEE IN THEIR REGULAR ASSESSMENT FOR THE RELEVANT ASSESSMENT YEARS WHICH IS CLEAR FROM ANNEXURE 2 TO 7 OF P.B. NO.240. SINCE ALL THE ADVANCES WERE DISCLOSED IN THE REGULAR RETURNS NONE OF THE PAPERS FOUND TO BE SIGNED BY THE ASSESSEE. IT CANNOT BE SAID THAT THE ADVANCE WAS GIVEN BY ASSESSEE IN HIS INDIVIDUAL CAPACITY. NO NE OF THE DOCUMENTS MENTIONED IN THE ORDER WERE FOUND INDEPENDENTLY FROM THE POSSESSION OF THE ASSESSEE THESE DOCUMENTS WERE FOUND AT PLACE OF YAMUNA JEWELLERS RAM KUMAR CHANDAK AND SHYAM KUMAR CHANDAK AND FROM KRISHI FARM. FULL DETAILS OF ADVANCES WERE SUBMITTED BEFORE THE LOWER AUTHORITIES AND AFTER RECORDING HIS FINDING AND DISCUSSING THE ISSUE IN HIS APPELLATE ORDER THE LD. CIT(A) HAS DELETED THE SAME. WE HAD ALSO EXAMINED LOOSE PAPERS BS 3 PAGE 1 BS3 PAGE 2 BS 3 PAGE 3 4 5 6 7 8 9 10 AND FO UND THAT RESPECTIVE ADVANCES HAVE ALREADY BEEN RETURNED ON THE SAME DAY AND WERE DULY DISCLOSED IN THE REGULAR RETURNS OF HUF. WE HAD ALSO EXAMINED LPS A/15 PAGE 1 8 12 30 33 40 42 43 45 48 AND 49 - : 34 : - 34 AND FOUND THAT AMOUNT MENTIONED IN THESE DOCUMENTS WERE ALREADY DISCLOSED IN THE REGULAR RETURNS. WE HAD ALSO EXAMINED LPS A/15 PAGE 3 7 13 14 38 41 AND OBSERVED THAT THESE ARE UNDATED AND NOT IN THE HANDWRITING OF THE ASSESSEE AND DOES NOT DISCLOSE ANY TRANSACTION. NO ADDITION CAN BE MADE ON THE BA SIS OF SUCH DUMB DOCUMENTS AS WAS HELD BY JABALPUR BENCH IN THE DECISION OF SATYPAL WASAN 295 (AT) 352 (JAB) GIRISH CHOWDHURY 163 ITR 608 (DEL). 27. FULL JUSTIFICATION WITH REGARD TO EACH AND EVERY DOCUMENT FOUND IN THE BUNCH OF LOOSE PAPERS WERE EXPLAINED BY THE ASSESSEE BEFORE THE LOWER AUTHORITIES. ACCORDINGLY WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) IN DELETING THE ADDITION SO MADE WITH RESPECT TO THESE LOOSE PAPERS. 28. THE AO HAS ALSO MADE ADDITION OF RS. 70 96 042/ - . THE AO WHILE MAKI NG THIS ADDITION HAS REFERRED TO THE FOLLOWING LOOSE PAPERS : - 1. LPS - A/6 PAGE 5 JAGDISH AHIRWAR - : 35 : - 35 2. LPS - A/6 - PAGE 5 - MD.SHAMIM 3. LPS - A/6 - PAGE 5 - DHARAMDAS 4. LPS - A/6 - PAGE 5 - IMRAN CONTRACTOR 5. LPS - A/6 - PAGE 4 - SUNDARLAL BHAIYALAL 6. LPS - A/6 - PAGE 4 - BHAGWAN SINGH 7. LPS - A/6 - PAGE 4 - RAMKISAN PATEL 8. LPS - A/6 - PAGE 4 - RAM SINGH PATEL 9. LPS - A/6 - PAGE 3 - C.B.VISHWAKARMA 10. LPS - A/6 - PAGE 3 - DHIRAJ SINGH DHILWAR 11. LPS - A/6 - PAGE 3 - AMAR SINGH PATEL 12. LPS - A/6 - PAGE 3 - SHER SINGH PRAJAPATI 13. LPS - A/6 - PAGE 3 - DESHBANDHU SHARMA 14. LPS - A/6 - PAGE 3 - KRISHNA KUMAR PATEL 15. LPS - A/6 - PAGE 3 - RAMSINGH AHIRWAR 29. IT WAS SUBMITTED BY THE ASSESSEE THAT THE LOOSE PAPERS ARE NOT RELATED TO THE ASSESSEE . IT WAS FURTHER MENTIONED THAT THE SAID LOOSE PAPERS ARE RELATED TO THE FINANCE FOR PURCHASI NG THE TRACTORS. MOST OF THE PERSONS HAVE BEEN FINANCED BY THE FAMILY MEMBERS OF S.N.MALANI AND BY SHRI GIRIRAJ KISHOR RATHI. - : 36 : - 36 30. FURTHER SUBMISSION OF THE ASSESSEE WAS THAT HE IS THE KARTA OF RAM KUMAR CHANDAK (HUF) AND IN THAT CAPACITY HE IS A PARTNER IN TH E FIRM MAHESHWARI TRACTORS UDAIPURA. IT IS SUBMITTED THAT IN THE TRACTOR BUSINESS SEVERAL PROSPECTIVE CUSTOMERS COME TO THE SHOW - ROOM MAKING ENQUIRIES ABOUT THE COST OF TRACTOR EXPENSES FOR REGISTRATION INSURANCE ETC. AND THE SCHEME OF FINANCE AVAILABL E EITHER FROM BANKS OR FROM PRIVATE FINANCIERS. M / S. MAHESHWARI TRACTORS ACTS AS A MEDIATOR AND FACILITATES THE TRANSACTION WITH A VIEW TO SELL THE TRACTORS AND ARRANGES FINANCES EITHER FROM BANKS OR FROM PRIVATE FINANCIERS. IN THE CASES WHERE BANK FINAN CES ARE NOT POSSIBLE FUNDS ARE ARRANGED FROM PRIVATE FINANCIERS AND THEREFORE IT BECOMES THE OBLIGATION ON THE PART OF THE SHOW ROOM TO MAKE COLLECTIONS OF THE LOAN AMOUNT FROM THE PERSONS WHO HAD TAKEN PRIVATE FINANCE. THEREFORE THE PERSONS WHO HAD TAKE N THE LOAN THROUGH MAHESHWARI TRACTORS USUALLY COME TO THE SHOW - ROOM TO MAKE THE PAYMENT AND THE COLLECTIONS ARE GIVEN TO THE FINANCIERS. THE REFERRED SEIZED PAPERS SHOW THE DETAILS OF SUCH COLLECTIONS. THE ASSESSEE HAS EXPLAINED THE SEIZED PAPERS AS DISC USSED BY AO AS UNDER : - I. LPS - A/6 - PAGE 5 JAGDISH AHIRWAR - : 37 : - 37 THE COPY OF SEIZED LOOSE PAPER IS ATTACHED. IT HAS BEEN SUBMITTED THAT THE REFERRED PAPER IS NOT RELATED TO THE ASSESSEE AND THE NOTINGS APPEARING ON THE SEIZED PAPER RELATES TO THE FINANCE PROVIDE D TO JAGDISH AHIRWAR BY THE FAMILY MEMBERS OF S.N.MALANI AND ITS RECOVERIES. HE HAS SUBMITTED THAT THESE FACTS CAN BE VERIFIED FROM SHRI JAGDISH AHIRWAR AND S.N.MALANI. THE ASSESSEE SUBMITS THAT HE DID NOT FINANCE ANY AMOUNT. AND EARNED INTEREST THEREON AS ALLEGED. THE ASSESSEE FURTHER SUBMITTED THAT THE SEIZED PAPER ALSO DOES NOT SHOW THAT THE ASSESSEE HAD FINANCED RS.280330 AND EARNED INTEREST RS. 241083.80. THE ASSESSEE SUBMITTED THAT THE A.O. HAS ESTIMATED THE INTEREST INCOME ON HIS OWN HYPOTHETICAL ASS UMPTIONS AND PRESUMPTIONS. THE CALCULATION OF INTEREST BY THE A.O. IS WHOLLY UNLAWFUL AND UNSUSTAINABLE IN LAW. THE ENTIRE ADDITION IS IMAGINARY AND WARRANTS DELETION. THE ADDITIONS ARE UNLAWFUL AND THEREFORE BE DELETED. 2. LPS - A/6 - PAGE 5 - MD.SHAMIM - : 38 : - 38 THE I D.AR HAS ATTACHED THE SEIZED LOOSE PAPERS AND SUBMITTED THAT THE REFERRED PAPER IS NOT RELATED TO THE ASSESSEE . IT HAS BEEN ALSO SUBMITTED THAT THE NOTINGS APPEARING ON THE SAID PAPER RELATES TO THE FINANCE PROVIDED BY SHRI GIRIRAJ KISHORE RATHI TO MD.SHAM IM AND ITS RECOVERIES. THIS FACT CAN BE VERIFIED FROM SHRI MOHD. SHAMIM AND GIRIRAJ KISHORE RATHI. AFFIDAVIT OF MD.SHAMIM AND GIRIRAJ KISHORE RATHI ARE ENCLOSED. THE ASSESSEE HAS SUBMITTED THAT HE DID NOT FINANCE ANY AMOUNT AND EARNED INTEREST THEREON AS A LLEGED. THE ASSESSEE HAS SUBMITTED THAT THE SEIZED PAPER ALSO DOES NOT SHOW THAT THE ASSESSEE HAD FINANCED RS.1 89 000 AND EARNED INTEREST RS. 2 11 680. THE ASSESSEE SUBMITTED THAT THE A.O. HAS ESTIMATED THE INTEREST INCOME ON HIS OWN HYPOTHETICAL ASSUMPTI ONS AND PRESUMPTIONS. THE CALCULATION OF INTEREST BY THE A.O. IS ALSO WHOLLY UNLAWFUL AND UNSUSTAINABLE IN LAW. THE ENTIRE ADDITION IS IMAGINARY AND WARRANTS DELETION. THE ADDITIONS ARE UNLAWFUL AND THEREFORE BE DELETED. 3. LPS - A/6 - PAGE 5 - DHARAMDAS THE CO PY OF SEIZED LOOSE PAPER IS ENCLOSED. IT HAS BEEN - : 39 : - 39 SUBMITTED THAT THE REFERRED PAPER IS NOT RELATED TO THE ASSESSEE AND THE NOTINGS APPEARING ON THE SEIZED PAPER RELATES TO THE FINANCE PROVIDED TO DHARAMDAS BY THE FAMILY MEMBERS OF SHRI S .N. MALANI AND ITS RECOVERIES. THESE FACTS CAN BE VERIFIED FROM SHRI DHARAMDAS AND SHRI S.N. MALANI. THE ASSESSEE HAS SUBMITTED THAT HE DID NOT FINANCE ANY AMOUNT AND EARNED INTEREST THEREON AS ALLEGED THE ASSESSEE FURTHER SUBMITS THAT THE SEIZED PAPER ALSO DOES NOT SHOW T HAT THE ASSESSEE HAS FINANCED RS. 2 85 900 / - AND EARNED INTEREST RS. 2 11 566 / - . THE ASSESSEE HAS SUBMITTED THAT THE A.O. HAD ESTIMATED THE INTEREST INCOME ON HIS OWN HYPOTHETICAL ASSUMPTIONS AND PRESUMPTIONS. THE CALCULATION OF INTEREST BY THE A.O. IS WHOL LY UNLAWFUL AND UNSUSTAINABLE IN LAW. THE ENTIRE ADDITION IS IMAGINARY AND WARRANTS DELETION. THE ADDITIONS ARE UNLAWFUL AND THEREFORE BE DELETED. 4. LPS - A/6 - PAGE 5 - IMRAN CONTRACTOR THE COPY OF SEIZED LOOSE PAPER IS ATTACHED. IT IS SUBMITTED - : 40 : - 40 THAT THE REF ERRED PAPER IS NOT RELATED TO THE ASSESSEE . IT IS SUBMITTED THAT THE NOTINGS AS APPEARING ON THE REFERRED LOOSE PAPER RELATES TO FINANCE PROVIDED BY SHRI GIRIRAJ KISHORE RATHI TO SHRI IM RAN CONTRACTOR AND ITS RECOVERIES. THESE FACTS CAN BE VERIFIED FROM SHRI IMRAN CONTRACTOR AND SHRI GIRIRAJ KISHORE RATHI. AFFIDAVIT OF IMRAN CONTRACTOR AND GIRIRAJ KISHORE RATHI ARE ATTACHED. THE ASSESSEE HAS SUBMITTED THAT HE DID NOT FINANCE ANY AMOUNT AND EARNED INTEREST THEREON AS ALLEGED. THE ASSESSEE HAS SUBMITTED THA T THE SEIZED PAPER ALSO DOES NOT SHOW THAT THE ASSESSEE HAD FINANCED RS. 289850 AND EARNED INTEREST RS. 220286 / - . THE ASSESSEE HAS SUBMITTED THAT THE A.O. HAD ESTIMATED THE INTEREST INCOME ON HIS OWN HYPOTHETICAL ASSUMPTIONS AND PRESUMPTIONS. THE CALCULATI ON OF INTEREST BY THE A.O. IS ALSO WHOLLY UNLAWFUL AND UNSUSTAINABLE IN LAW. THE ENTIRE ADDITION IS IMAGINARY AND WARRANTS DELETION. THE ADDITIONS ARE UNLAWFUL AND THEREFORE BE DELETED. 5. L P S - A/6 - PAGE 4 - SUNDERLAL BHAI Y ALAL THE COPY OF SEIZED LOOSE PAPER I S ATTACHED. IT IS SUBMITTED THAT THE REFERRED PAPER IS NOT RELATED TO THE ASSESSEE . IT IS - : 41 : - 41 SUBMITTED THAT THE NOTINGS AS APPEARING ON THE REFERRED LOOSE PAPER RELATES TO THE FINANCE PROVIDED BY THE FAMILY MEMBERS OF SHRI S.N. MALANI TO SHRI SUNDERLA L BHAIYA LAL AND ITS RECOVERIES. THESE FACTS CAN BE VERIFIED F ROM RI .. A .. AM AND SHRI GIRIRAJ KISHORE RATHI. THE ASSESSEE HAS SUBMITTED THAT HE DID NOT FINANCE ANY AMOUNT AND EARNED INTEREST THEREON AS ALLEGED. THE ASSESSEE HAS SUBMITTED THAT THE SEIZED PAPER ALSO DOES NOT SHOW THAT THE ASSESSEE HAD FINANCED RS. 2 82 910 / - AND EARNED INTEREST RS. 1 69 746 / - . THE ASSESSEE HAS SUBMITTED THAT THE A.O. HAD ESTIMATED THE INTEREST INCOME ON HIS OWN HYPOTHETICAL ASSUMPTIONS AND PRESUMPTIONS. THE CALCULATION OF INTEREST BY THE A.O. IS ALSO WHOLLY UNLAWFUL AND UNSUSTAINABLE IN LAW. THE ENTIRE ADDITION IS IMAGINARY AND WARRANTS DELETION. THE ADDITIONS ARE UNLAWFUL AND THEREFORE BE DELETED. 6. LPS - A/6 - PAGE 4 - BHAGWAN SINGH THE COPY OF SEIZED LOOSE PAPER IS ATTACHED. IT IS SUB MITTED THAT THE REFERRED PAPER IS NOT RELATED TO THE ASSESSEE . IT IS SUBMITTED THAT THE NOTINGS APPEARING ON THE SEIZED PAPER RELATES TO THE FINANCE PROVIDED TO BHAGWAN SINGH B Y - : 42 : - 42 THE_F A MILY MEMBERS OF SHRI S . N . MALANI AND ITS RECOVERIES. THESE FACTS CAN B E VERIFIED FROM SHRI BHAGWAN SINGH AND SHRI S. N . MALANI. THE ASSESSEE SUBMITS THAT HE DID NOT FINANCE ANY AMOUNT AND EARNED INTEREST THEREON AS ALLEGED. THE ASSESSEE FURTHER SUBMITS THAT THE SEIZED PAPER ALSO DOES NOT SHOW THAT THE ASSESSEE HAD FINANCED R S. 2 72 735 / - AND EARNED INTEREST RS. 2 34 552 / - . THE ASSESSEE SUBMITS THAT THE A. O . HAD ESTIMATED THE INTEREST INCOME ON HIS OWN HYPOTHETICAL ASSUMPTIONS AND PRESUMPTIONS. THE CALCULATION OF INTEREST BY THE A.O. IS WHOLLY UNLAWFUL AND UNSUSTAINABLE IN LAW . THE ENTIRE ADDITION IS IMAGINARY AND WARRANTS DELETION. THE ADDITIONS ARE UNLAWFUL AND THEREFORE BE DELETED . 7. LPS - A / 6 P AGE 4 - RAMKISAN PATEL THE COPY OF SEIZED LOOSE PAPER IS ATTACHED. IT IS SUBMITTED THAT THE REFERRED PAPER IS NOT RELATED TO THE ASSES SEE . IT IS SUBMITTED THAT THE NOTINGS APPEARING ON THE SEIZED PAPER RELATES TO THE FINANCE PROVIDED TO RAMKISAN PATEL BY THE FAMILY MEMBERS OF SHRI S N. MALANI AND ITS RECOVERIES THESE FACTS CAN BE VERIFIED FROM SHRI RAMKISAN PATEL AND SHRI S . N MALANI THE ASSESSEE - : 43 : - 43 SUBMITS THAT HE DID NOT FINANCE ANY AMOUNT AND EARNED INTEREST THEREON AS ALLEGED. THE ASSESSEE FURTHER SUBMITS THAT THE SEIZED PAPER ALSO DOES NOT SHOW THAT THE ASSESSEE HAD FINANCED RS. 269735 / - AND EARNED INTEREST RS. 226577 / - . THE ASSESSEE SUB MITS THAT THE A.O. HAD ESTIMATED THE INTEREST INCOME ON HIS OWN HYPOTHETICAL ASSUMPTIONS AND PRESUMPTIONS. THE CALCULATION OF INTEREST BY THE A.O. IS WHOLLY UNLAWFUL AND UNSUSTAINABLE IN LAW. THE ENTIRE ADDITION IS IMAGINARY AND WARRANTS DELETION. THE ADDI TIONS ARE UNLAWFUL AND THEREFORE BE DELETED . 8. LPS - AJ6 - PAGE 4 - RAMSINGH PATEL THE COPY OF SEIZED LOOSE PAPER IS ATTACHED. IT IS SUBMITTED THAT THE REFERRED PAPER IS NOT RELATED TO THE ASSESSEE . IT IS SUBMITTED THAT THE NOTINGS APPEARING ON THE SEIZED P APER RELATES TO THE FINANCE PROVIDED TO RAMSINGH PATEL BY THE FAMILY MEMBERS OF SHRI S N MALANI AND ITS RECOVERIES. THESE FAC T S CAN BE VERIFIED FROM SHRI RAMSINGH PATEL AND SHRI S.N. MALANI. THE ASSESSEE SUBMITS THAT HE DID NOT FINANCE ANY AMOUNT AND EARNE D INTEREST THEREON AS ALLEGED. THE ASSESSEE FURTHER SUBMITS THAT THE SEIZED - : 44 : - 44 PAPER ALSO DOES NOT SHOW THAT THE ASSESSEE HAD FINANCED RS. 1 70 000 / - AND EARNED INTEREST RS. 68 000 / - . THE ASSESSEE SUBMITS THAT THE A.O. HAD ESTIMATED THE INTEREST INCOME ON HIS OWN HYPOTHETICAL ASSUMPTIONS AND PRES UMPTIONS . THE CALCULATION OF INTEREST BY THE A.O. IS WHOLLY UNLAWFUL AND UNSUSTAINABLE IN LAW. THE ENTIRE ADDITION IS IMAGINARY AND WARRANTS DELETION. THE ADDITIONS ARE UNLAWFUL AND THEREFORE BE DELETED 9. LPS - AJ6 - PA GE 3 - C .B. VISHWAKARMA THE COPY OF SEIZED LOOSE PAPER IS ATTACHED. IT IS SUBMITTED THAT THE REFERRED PAPER IS NOT RELATED TO THE ASSESSEE . IT IS SUBMITTED THAT THE NOTINGS APPEARING ON THE SEIZED PAPER RELATES TO THE FINANCE PROVIDED TO C.B. VISHWAKARMA BY THE FAMILY MEMBERS OF SHRI S. N. MALANI AND ITS RECOVERIES . THESE FACTS CAN BE VERIFIED FROM SHRI C. B. VISHWAKARMA AND SHRI S.N. MALANI. THE ASSESSEE SUBMITS THAT HE DID NOT FINANCE ANY AMOUNT AND EARNED INTEREST THEREON AS ALLEGED. THE ASSESSEE FURTH ER SUBMITS THAT THE SEIZED PAPER ALSO DOES NOT SHOW THAT THE ASSESSEE HAD FINANCED RS. 2 72 635 / - AND EARNED INTEREST RS. 2 45 371.50. THE ASSESSEE SUBMITS THAT THE A.O. HAD ESTIMATED THE INTEREST INCOME ON HIS OWN HYPOTHETICAL - : 45 : - 45 ASSUMPTIONS AND PRESUMPTIONS . THE CALCULATION OF INTEREST BY THE A.O. IS WHOLLY UNLAWFUL AND UNSUSTAINABLE IN LAW. T HE ENTIRE ADDITION IS IMAGINARY AND WARRANTS DELETION. THE ADDITIONS ARE UNLAWFUL AND THEREFORE BE DELETED . 10. LPS - AJ6 - PAGE 3 - DILRAJ SINGH DHILWAR THE COPY OF SEI ZED LOOSE PAPER IS ATTACHED. IT IS SUBMITTED THAT THE REFERRED PAPER IS NOT RELATED TO THE ASSESSEE . IT IS SUBMITTED THAT THE NOTINGS AS APPEARING ON THE REFE RRED LOOSE AND RELATES T O THE FINANCE PROVIDED BY THE FAMILY M EMBERS OF SHRI S. N MALANI TO SHRI D I LRAJ SINGH DHILWAR AND ITS - RECOVERIES. THESE FACTS CAN BE VERIFIED FROM SHRI S.N. MALANI AND SHRI DILRAJ SINGH DHILWAR. THE ASSESSEE SUBMITS THAT HE DID NOT FINANCE ANY AMOUNT AND EARNED INTEREST THEREON AS ALLEGED. THE ASSESSEE SUBMITS THAT THE SEIZED P APER ALSO DOES NOT SHOW THAT THE ASSESSEE HAD FINANCED RS. 220000 / - AND EARNED INTEREST RS. 193600 / - . THE ASSESSEE SUBMITS THAT THE A.O. HAD ESTIMATED THE - : 46 : - 46 INTEREST INCOME ON HIS OWN HYPOTHETICAL ASSUMPTIONS AND PRESUMPTIONS. THE CALCULATION OF INTEREST BY THE A.O. IS ALSO WHOLLY UNLAWFUL AND UNSUSTAINABLE IN LAW. THE ENTIRE ADDITION IS IMAGINARY AND WARRANTS DELETION. THE ADDITIONS ARE UNLAWFUL AND THEREFORE BE DELETED. 11. LPS - A/6 - PAGE 3 - AMAR SINGH PATEL THE COPY OF SEIZED LOOSE PAPER IS ATTACHED . IT IS SUBMITTED THAT THE REFERRED PAPER IS NOT RELATED TO THE ASSESSEE . IT IS SUBMITTED THAT THE NOTINGS AS APPEARING ON THE REFERRED LOOSE PAPER RELATES TO THE FINANCE PROVIDED BY SHRI GIRIRAJ KISHORE RATHI TO SHRI AMAR SINGH PATEL AND ITS RECOVERIES. THESE FACTS CAN BE VERIFIED FROM SHRI AMAR SINGH PATEL AND SHRI GIRIRAJ KISHORE RATHI. THE AFFIDAVIT OF HAKAM SINGH S/O LATE AMAR SINGH AND GIRIRAJ KISHORE RATHI ARE ATTACHE D . THE ASSESSEE SUBMITS THAT HE DID NOT FINANCE ANY AMOUNT AND EARNED INTEREST THEREON AS ALLEGED. THE ASSESSEE SUBMITS THAT THE SEIZED PAPER ALSO DOES NOT SHOW THAT THE ASSESSEE HAD FINANCED RS. - : 47 : - 47 263885 / - AND EARNED INTEREST RS. 284995.80. THE ASSESSEE SUBMITS THAT THE A.O. HAD ESTIMATED THE INTEREST INCOME ON HIS OWN HYPOTHETICAL ASSUMPTIONS AND PRESUMPTIONS. THE CALCULATION OF INTEREST BY THE A.O. IS ALSO WHOLLY UNLAWFUL AND UNSUSTAINABLE IN LAW. THE ENTIRE ADDITION IS IMAGINARY AND WARRANTS DELETIO N . THE ADDITIONS ARE UN L AWFUL AND THEREFORE BE DELETED. 11. LPS - A/6 - PAGE 3 - SHER SINGH P RAJAPATI THE COPY OF SEIZED LOOSE PAPER IS ATTACHED. IT IS SUBMITTED THAT THE REFERRED PAPER IS NOT RELATED TO THE ASSESSEE . IT IS SUBMITTED THAT THE NOTINGS APPEARING ON THE SEIZED ~ RELATES TO THE FINANCE PROVIDED TO SHER SINGH PRAJAPATI BY THE FAMILY M EMBERS OF' S HRI S.N MALA NI AND ITS RECOVERIES . THESE F ACTS CAN BE VERIFIED FROM SHRI SHER SINGH PAJAPATI. 12. LPS - A/6 - PAGE 3 - DESHBANDHU SHARMA THE COPY OF SEIZED LOOSE PAPER IS ATTACHED . IT IS SUBMITTED THAT THE REFERRED PAPER IS NOT RELATED TO THE ASSESSE E . IT IS SUBMITTED THAT THE NOTINGS APPEARING ON THE SEIZED PAPER - : 48 : - 48 RELATED TO THE FINANCE PROVIDED TO DESHBANDHU SHARMA BY THE FAMILY MEMBERS OF SHRI S.N. MALANI AND ITS RECOVERIES. THESE FACTS CAN BE VERIFIED FROM SHRI DESHBANDHU SHARMA AND SHRI S.N MALAN I. THE ASSESSEE SUBMITS THAT HE DID NOT FINANCE ANY AMOUNT AND EARNED INTEREST THEREON AS ALLEGED. THE ASSESSEE FURTHER SUBMITS THAT THE SEIZED PAPER ALSO DOES NOT SHOW THAT THE ASSESSEE HAD FINANCED RS.279625 A ND EARNED INTEREST RS.2 40 477.50. THE ASSES SEE SUBMITS THAT THE A.O. HAD ESTIMATED THE INTEREST INCOME ON HIS OWN HYPOTHETICAL ASSUMPTIONS AND PRESUMPTIONS. THE CALCULATION OF INTEREST BY THE A.O. IS WHOLLY UNLAWFUL AND UNSUSTAINABLE IN LAW. THE ENTIRE ADDITION IS IMAGINARY AND WARRANTS DELETION. THE ADDITIONS ARE UNLAWFUL AND THEREFORE BE DELETED . 14. LPS - A/6 - PAGE 3 - KRISHNA KUMAR PATEL THE COPY OF SEIZED LOOSE PAPER IS ATTACHED. IT IS SUBMITTED THAT THE REFERRED PAPER IS NOT RELATED TO THE ASSESSEE . IT IS SUBMITTED THAT THE NOTINGS APPEARING ON THE SEIZED PAPER RELATES TO THE FINANCE PROVIDED - TO KRISHNA KUMAR PATEL BY THE FAMILY MEMBERS OF SHRI S.N. MALANI AND ITS RECOVERIES. - : 49 : - 49 THESE FACTS CAN BE VERIFIED FROM SHRI KRISHNA KUMAR PATEL AND SHRI S.N. MALANI. THE ASSESSEE SUBMITS THAT HE DID NOT FINANCE ANY AMOUNT AND EARNED INTEREST THEREON AS ALLEGED. THE ASSESSEE FURTHER SUBMITS THAT THE SEIZED PAPER ALSO DOES NOT SHOW THAT THE ASSESSEE HAD FINANCED RS. 284270 AND EARNED INTEREST RS. 147820.40. THE ASSESSEE SUBMITS THAT THE A.O. HAD ESTIMATED T HE INTEREST INCOME ON HIS OWN HYPOTHETICAL ASSUMPTIONS AND PRESUMPTIONS. THE CALCULATION OF INTEREST BY THE A.O. IS WHOLLY UNLAWFUL AND UNSUSTAINABLE IN LAW. THE ENTIRE ADDITION IS IMAGINARY AND WARRANTS DELETION. THE ADDITIONS ARE UNLAWFUL AND THEREFORE B E DELETED 15. LPS - A/6 - PAGE 3 - RAM SINGH AHIRWAR THE COPY OF SEIZED LOOSE PAPER IS ATTACHED. IT IS SUBMITTED THAT THE REFERRED PAPER IS NOT RELATED TO THE ASSESSEE . IT IS SUBMITTED THAT THE NOTINGS APPEARING ON THE SEIZED PAPER RELATES TO THE FINANCE PROVIDED 0 RAM SINGH AHIRWAR BY THE FAMILY MEMBERS OF SHRI S.N .MALANI AN D ITS RECOVERIES. THESE FACTS CAN BE VERIFIED FROM SHRI RAM SINGH AHIRWAR AND SHRI S.N. MALANI. THE ASSESSEE SUBMITS THAT HE DID NOT FINANCE ANY AMOUNT AND EARNED INTEREST THEREON AS ALLEGED . THE - : 50 : - 50 ASSESSEE FURTHER SUBMITS THAT THE SEIZED PAPER ALSO DOES NOT SHOW THAT THE ASSESSEE HAD FINANCED RS. 278810 AND EARNED INTEREST RS. 234200.40. THE ASSESSEE SUBMITS THAT THE A.O. HAD ESTIMATED THE INTEREST INCOME ON HIS OWN HYPOTHETICAL ASSUMPTIONS AN D PRESUMPTIONS. THE CALCULATION OF INTEREST BY THE A.O. IS WHOLLY UNLAWFUL AND UNSUSTAINABLE IN LAW. THE ENTIRE ADDITION IS IMAGINARY AND WARRANTS DELETION. THE ADDITIONS ARE UNLAWFUL AND THEREFORE BE DELETED 31. BY THE IMPUGNED ORDER THE CIT(A) DE LETED THE ADDITION AFTER HAVING THE FOLLOWING OBSERVATIONS : - I HAVE CAREFULLY GONE THROUGH THE SUBMISSIONS AND VARIOUS DOCUMENTS AND ALSO CONSIDERED THE ORDER OF THE AO. THE AO HAS MENTIONED THAT THE ASSESSEE WAS ASKED TO PROVE AND EXPLAIN THE VARIOUS DO CUMENTS MENTIONED ABOVE AND SINCE FOR WANT OF. PROPER EXPLANATION HE ADDED THE AMOUNT OF RS.3919685/ - ON ACCOUNT OF FINANCE FOR TRACTORS AND ALSO ADDED BACK RS.3176357/ - TOWARDS INTEREST EARNED ON THE ABOVE FINANCE. THUS HE MADE TOTAL ADDITION OF RS.7096 042/ - AS UNDISCLOSED INCOME OF THE - : 51 : - 51 ASSESSEE . AS STATED BY THE ASSESSEE THAT THE ENTIRE FINANCE MATTER WAS RELATED TO THE MALANI GROUP AND THIS INFORMATION WAS ALSO GIVEN DURING THE COURSE OF BLOCK ASSESSMENT PROCEEDINGS. THE AO HAS ALSO NOT BROUGHT ON REC ORD ANY POSITIVE AND CORROBORATIVE MATERIAL TO SUPPORT HIS FINDING THAT THE ASSESSEE WAS INDIVIDUALLY INVOLVED IN THE FINANCE MATTER. THE ASSESSEE . IN HIS SUBMISSION HAS REPEATEDLY AND CONSISTENTLY ARGUED THAT THE TRACTOR FINANCE BUSINESS WAS BEING CARRIED ON BY THE MEMBERS OF MALANI GROUP. THE VARIOUS RETURNS SUBMISSIONS FILED BEFORE THE AO AND ENCLOSED IN THE PAPER BOOK ALONGWITH THE AFFIDAVIT OF THE ASSESSEE HAVE _BEEN CONSIDERED AND IT IS FOUND THAT THE ASSESSEE WAS NOT CARRYING OUT ANY BUSINESS IN HIS IND IVIDUAL CAPACITY. THE ASSESSEE ALSO FILED APPLICATION UNDER RULE 46A OF THE IT RULE ALONGWITH VARIOUS DOCUMENTS AND ON BEING ASKED THE AO HAS INFORMED THAT HE DOES NOT WANT TO COMMENT ANYTHING ABOUT THESE DOCUMENTS. SINCE THE AO HAS NOT ESTABLISHED TH E FACT THAT THE ASSESSEE WAS CARRYING ON ANY BUSINESS RELATING TO FINANCE OF TRACTORS AND ALSO BROUGHT - : 52 : - 52 ANY MATERIAL ON RECORD THAT THE ASSESSEE HAS GIVEN THE AMOUNT/FINANCE AS MENTIONED ABOVE TO 15 PERSONS AND CHARGED ANY INTEREST THEREON. FURTHER THE AO HAS ALSO NOT POINTED OUT ANY SPECIFIC DOCUMENT TO PROVE THE CONTENTION IN SUPPORT OF HIS FINDING. THE AO HAS ALSO NOT CONSIDERED THE FACT THAT WHEN THE MALANI GROUP WAS INVOLVED IN THIS BUSINESS THEREFORE HE WAS REQUIRED TO VERIFY AND CONFIRM ABOUT THE CONTENTION OF THE ASSESSEE REGARDING THIS INFORMATION. AFTER CONSIDERING ALL THE FACTS AND SUBMISSION I AM OF THE CONSIDERED OPINION THAT THE ADDITION OF THE FINANCE AMOUNT OF RS. 39 19 685/ - AND INTEREST ESTIMATED THEREON IS TOTALLY BASED ON SUPERFLUOUS AND CONJECTURE BASIS. THEREFORE THE AGGREGATE ADDITION OF RS. 7096042/ - CANNOT BE SUSTAINED AND IT HAS TO BE DELETED. THUS THE APPEAL ON THIS GROUND IS ALLOWED . 32. WE HAVE CONSIDERED RIVAL CONTENTIONS W ITH REGARD TO DELETION OF ADDITION ON ACCOUNT OF TRAC TOR FINANCE AND INTEREST AMOUNTING TO RS. 70.96 LAKHS WE FOUND THAT THESE FINANCES WERE GIVEN BY MALANI FAMILY WHERE SEPARATE SEARCH WAS CONDUCTED AND SAME WAS FULLY - : 53 : - 53 EXPLAINED IN THOSE CASES. THE ASSESSEE WAS NOT ENGAGED IN TRACTOR FINANCING EVEN DURING SEARCH NO EVIDENCE WAS FOUND TO ESTABLISH THAT TRACTOR WAS FINANCED BY THE ASSESSEE OR THAT THE ASSESSEE HAS RECEIVED ANY AMOUNT OF INTEREST. 33. ACCORDINGLY NO ADDITION WAS WARRANTED IN ASSESSEE S HANDS. AFTER DISCUSSING IN DETAIL AT PAGE 11 OF THE APPELLA TE ORDER AND AFTER CONSIDERING THE WRITTEN SUBMISSION PLACED AT PAGE 543 AND 547 THE LD. CIT(A) HAS DELETED THE ADDITION NO INTERFERENCE IS REQUIRED IN THE FINDING RECORDED BY THE LD. CIT(A) IN SO FAR AS THESE FINANCES WERE ALREADY CONSIDERED IN THE HAN DS OF MALANI FAMILY WHERE SEPARATE SEARCH WAS CONDUCTED. 34. WITH REGARD TO DELETION OF ADDITION ON ACCOUNT OF CREDITS IN BANK AMOUNTING TO RS. 36 93 662/ - WHICH THE AO HAS DISCUSSED AT PAGE 9 PARA 7 WE FOUND THAT WHILE MAKING THE ADDITION THE AO HAS REFE RRED TO ACCOUNT IN CENTRAL BANK OF INDIA ACCOUNT NO. 3842 KSHETRIYA GRAMIN BANK A/C NO.1463 AND ZILA SAHAKARI KENDRIYA A/C NO. 5768. SINCE ALL THE BANK ACCOUNTS - : 54 : - 54 WERE DULY REFLECTED IN REGULAR RETURNS OF HUF NO ADDITION IS WARRANTED IN THE HANDS OF THE AS SESSEE (INDIVIDUAL). WE ALSO FOUND THAT THE ASSESSEE HAS FILED CASH ROTATION STATEMENT AND COPIES OF THE BANK ACCOUNT AND DATE - WISE DETAILS OF DEPOSITS AND WITHDRAWALS FROM THE BANK WHEREIN ALL THE CREDITS PERTAINED TO AGRICULTURAL RECEIPTS INTEREST RECE IPTS AGAINST ADVANCES RECEIPTS FROM MAHESHWARI TRACTORS RECEIPTS AGAINST ADVANCE BANK WITHDRAWALS AND BANK INTEREST. AS ALL THE SOURCES OF RECEIPTS WERE REGULARLY DISCLOSED BY THE ASSESSEES HUF IN THEIR RESPECTIVE RETURNS NO ADDITION WAS WARRANTED IN A SSESSEE S HANDS. WE FOUND THAT IN THE ASSESSMENT YEAR 1998 - 99 RAM KUMAR CHANDAK HUF S RETURN WAS UNDER SCRUTINY AND ASSESSMENT WAS FRAMED U/S 143(3) WHEREIN THESE ADVANCES WERE DISCLOSED AS OUTSTANDING DURING THAT YEAR. THE SOURCES AND THE BANK ACCOUNTS WERE ALSO CONSIDERED THERE ACCORDINGLY NO ADDITION IS PERMISSIBLE IN THE BLOCK ASSESSMENT PROCEEDINGS. WITH REGARD TO DEPOSIT IN SAHARA INDIA FINANCE CORPORATION - : 55 : - 55 LIMITED AMOUNTING TO RS. 1200 EACH CONTENTION OF THE ASSESSEE WAS THAT SAME WAS OUT OF HOU SE HOLD WITHDRAWALS. SINCE HOUSE HOLD WITHDRAWALS WAS SUFFICIENT TO COVER THESE NO SEPARATE ADDITION IS WARRANTED FOR SUCH SMALL DEPOSITS. AFTER DISCUSSING IN DETAIL AT APPELLATE ORDER PAGE 18 AND THE WRITTEN SUBMISSION PLACED AT PAGE 564 THE LD. CIT(A ) HAS DELETED THE ADDITION NO INTERFERENCE IS WARRANTED. 35. IN REGARD TO ADDITION OF RS. 36 93 662/ - THE AO MENTIONED IN HIS ORDER THAT THE ASSESSEE HAS NOT EXPLAINED THE ENTRIES IN THE BANK ACCOUNT AND ALSO HE HAS NOT FILED H IS RETURN IN THE CAPACITY OF INDIVIDUAL BUT AS KARTA OF RAMKUMAR CHANDAK(HUF). THEREFORE HE ADDED THE UNDISCLOSED INCOME PROTECTIVELY IN THE HANDS OF RAMKUMAR CHANDAK(HUF). 36. BEFORE THE LD. CIT(A) THE CONTENTION OF THE LD. AUTHORIZED REPRESENTATIVE WAS THAT THE ASSESSEE HAS NO SELF A CQUIRED ASSETS AND HE HAD/HAS NO INCOME IN HIS INDIVIDUAL CAPACITY. ALL THE ASSETS OF THE ASSESSEE OF ANCESTRAL AND ALL THESE FACTS WERE CATEGORICALLY MENTIONED AND STATED IN THE - : 56 : - 56 COURSE OF SEARCH PROCEEDING ITSELF. THE ASSESSMENT RECORDS OF THE ASSESSEE RI GHT FROM A Y 1995 - 96 ALSO SUPPORT THIS FACT. THE ASSESSEE S HUF HAS THE FOLLOWING BANK ACCOUNTS. I) SAVING BANK ACCOUNT NO.3843 WITH CENTRAL BANK OF INDIA UDAIPURA II) SAVINGS BANK ACCOUNT NO.1436 WITH KSHETRIYA GRAMIN BANK HOSHANGABAD BRANCH UDA IPURA. III) SAVINGS BANK ACCOUNT NO.5768 WITH J ILA SAHKARI KENDRIYA BANK RAISEN BRANCH UDAIPURA. HE HAS FURTHER SUBMITTED THAT THE ASSESSEE HAS ALSO SMALL INVESTMENT IN SAHARA INDIA CORPORATION AND WHICH HAS BEEN REFLECTED IN HUF RETURN. THE INVESTMENTS BA NK DEPOSITS IN ABOVE BANK ACCOUNTS HAVE ALSO BEEN DISCLOSED IN THE BALANCE SHEET OF HUF. HE HAS STRONGLY SUBMITTED THAT THE ABOVE BANK ACCOUNTS ARE OF HUF OF THE ASSESSEE AND THE DEPOSITS MENTIONED THEREIN ARE FULLY EXPLAINABLE. T HE CASH ROTATION STATEMENT FOR THE BLOCK PERIODS WAS ALSO PLACED ON RECORD WHEREIN THE BANK DEPOSITS ARE CLEARLY SHOWN. HE ALSO ENCLOSED THE DETAILS OF ADVANCES GIVEN TO - : 57 : - 57 VARIOUS PERSONS FROM THE ACCOUNT OF HUF. THE LD. AUTHORIZED REPRESENTATIVE HAS ALSO FILED THE DETAILS OF DEPOSIT S MADE IN THE BANK ACCOUNT. 37. AFTER CONSIDERING ASSESSEE S CONTENTION THE LD. CIT(A) DELETED THE ADDITION AFTER HAVING THE FOLLOWING OBSERVATIONS : - I HAVE GONE THROUGH THE DETAILS FILED BY THE ASSESSEE AND ALSO PERUSED THE ORDER OF THE AO . THE ADDITI ON MADE BY THE AO IS NOT JUSTIFIED BECAUSE OF THE REASON THAT THE ASSESSEE WAS CONTINUOUSLY INSISTING TO THE DEPARTMENT FROM THE VERY BEGINNING THAT HE DOESN'T HAVE ANY INDIVIDUAL SOURCE AND DOING ALL BUSINESS F ROM THE FUNDS BELONGING TO THE HUF HEADED BY THE ASSESSEE BEING KARTA OF HU F. THE DOCUMENTS AVAILABLE ON RECORD ALSO CONFIRMED THIS CLAIM OF THE ASSESSEE . IT IS VERY SURPRISING TO NOTE THAT THE HEAVY ADDITIONS ARE MADE WITHOUT MAKING ANY ATTEMPTS TO VERIFY THE CONTENTION OF THE ASSESSEE . AFTER GOING THROUGH THE ENTIRE MATERIAL AND FACTS OF THE CASE I AM OF THE CONSIDERED VIEW THAT THE ADDITION IS TOTALLY WRONG AND THE SAME CANNOT BE SUSTAINED AND HAS TO BE DELETED. THUS THE APPEAL ON THIS GROUND IS ALLOWED. - : 58 : - 58 38. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND FIND FROM RECORD THAT ALL THE BUSINESS ACTIVITIES OF THE ASSESSEE WAS CARRIED ON BY ITS HUF. EVEN THE ASSESSMENT RECORDS OF THE ASSESSEE FROM ASSESSMENT YEAR 1995 - 96 ALSO SUPPORT THIS FACT THAT VARIOUS DEPOSITS IN THE BANK ACCOUNT WERE INC ORPORATED IN THE HUF RETURNS . ACCORDINGLY WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) IN DELETING THE ADDITION OF RS. 36 93 662/ - . ACCORDINGLY THE ORDER OF THE CIT(A) OF THIS GROUND IS CONFIRMED. I.T.(SS).A.NO. 190/IND/2007 AND C.O. NO.128/IND/ 2007 : 39. THIS APPEAL AND CROSS OBJECTION ARE AGAINST THE ORDER OF CIT(A) DATED 25.7.2007 IN THE MATTER OF ORDER PASSED U/S 158BC. 40. FACTS OF THIS CASE ARE PARI - MATERIA TO THE FACTS OF APPEAL FILED IN I.T.(SS).A.NO. 192/IND/2007 IN THE CASE OF SHRI RAM KUMAR CHANDAK. SIMILAR ADDITION MADE IN THE CASE OF RAM KUMAR CHANDAK WAS ALSO MADE IN THE HANDS OF HIS BROTHER SHRI SHYAM KUMAR CHANDAK WHICH HAS BEEN DELETED BY THE LD. CIT(A) AGAINST WHICH REVENUE IS IN FURTHER APPEAL BEFORE US. - : 59 : - 59 41. FIRST GROUND RELATES TO THE V ALIDITY OF THE ASSESSEE FRAMED. 42. THIS ISSUE HAS ALREADY BEEN DISCUSSED IN DETAIL IN CASE OF RAM KUMAR CHANDAK HUF IN I.T.(SS).A.NO. 188/IND/2007. FOLLOWING THE SAME REASONING THE ORDER OF CIT(A) ON THIS GROUND IS REVERSED AND DECIDED IN FAVOUR OF THE REVE NUE. 43. SECOND GRIEVANCE OF THE REVENUE RELATES TO ADDITION OF UNEXPLAINED EXPENSES AND INVESTMENT AMOUNTING TO RS. 17 94 600/ - . THE AO HAS DEALT WITH THE ISSUE AT PAGE 2 WHEREIN HE FOUND THAT SOME LOOSE PAPERS WERE FOUND DURING SEARCH WHICH INDICATED UNEXP LAINED RECEIPTS ADVANCE GIVEN BY THE ASSESSEE EXPENSES TOWARDS PURCHASE OF SOME VEHICLES BY SHYAM KUMAR CHANDAK THAT AMOUNT GIVEN TO VARIOUS PERSONS ON LOAN. 44. THE LD. CIT(A) HAS DELETED THE ADDITION AFTER RECORDING FOLLOWING OBSERVATIONS : - I HAVE GI VEN MY ANXIOUS CONSIDERATION ON THE COUNTER REPLY AND SUBMISSION MADE BY THE - : 60 : - 60 APPELLANT AND GONE THROUGH THE PAGE NOS. 5 TO 8 REGARDING THE ADDITION OF RS. 17 94 670/ - ( IN FACT THIS FIGURE IS RS. 17 94 600/ - . ) THE ADDITIONS HAVE BEEN MADE ON THE BASIS OF LOOSE PAPERS FOUND DURING THE COURSE OF SEARCH AND WHICH ARE MENTIONED HEREUNDER : - LPS - 3/PAGE NO.13 FOR ADDITION OF 13 000 LPS - 3/PAGE NO.14 FOR ADDITION OF 7 000 LPS - 3/PAGE NO.1 9 FOR ADDITION OF 1 02185 LPS - 4/PAGE NO.12 & 29 FOR ADDITION OF 12 964 LP S - 4/PAGE NO.12 & 29 FOR ADDITION OF 8 164 LPS - 4/PAGE NO.12 & 29 FOR ADDITION OF 7 641 LPS - 4/PAGE NO.12 & 29 FOR ADDITION OF 3 336 LPS - 4/PAGE NO. 27 & 2 8 FOR ADDITION OF 2 67 962 LPS - 4/PAGE NO. 27 & 28 FOR ADDITION OF 1 31 813 LPS - 4/PAGE NO. 30 FOR ADDI TION OF 75 775 LPS - 4/PAGE NO. 47 FOR ADDITION OF 40 202 LPS - 4/PAGE NO. 52 FOR ADDITION OF 5 067 LPS - A/1/PAGE NO.15 FOR ADDITION OF 2 00 000 LPS - A/2/PAGE NO.15 FOR ADDITION OF 16 100 LPS - A/2/PAGE NO.18 FOR ADDITION OF 5 14 091 LPS - A/7/PAGE NO. 20 & 21 FOR ADDITION OF 3 00 300 LPS - A/15/PAGE NO.39 FOR ADDITION OF 54 000 LPS - BS/2/PAGE NO.125 FOR ADDITION OF 35 000 RS.17 94 600 I HAVE CAREFULLY CONSIDERED THE EXPLANATION ALONGWITH THE CONTENTS OF LOOSE PAPERS FILED BY THE APPELLANT AS MENTIONED ON PAG E NO. 5 TO 8 . I HAVE ALSO PERUSED IN ALL RESPECTS OF EACH AND EVERY - : 61 : - 61 ADDITION MADE BY THE ASSESSING OFFICER. AFTER CONSIDERING ALL THE DOCUMENTS IN THIS REGARD I HOLD THAT THE ADDITIONS MADE AS MENTIONED ABOVE APPEAR TO BE NOT CORRECT. THE AO HAS NOT BROUG HT ON RECORD ANY CORROBORATIVE MATERIAL AND COGENT REASONS IN SUPPORT OF HIS FINDINGS FOR MAKING THE ADDITIONS. FOR EXAMPLE FOR MAKING ADDITION OF RS. 5 14 091/ - IT HAS BEEN SUBMITTED BY THE LD. AUTHORIZED REPRESENTATIVE THAT THIS SEIZED PAPER IS A ROUGH CALCULATION SHEET FOR THE PURPOSE OF COSTING OF TATA SUMO VEHICLE WHICH WAS PURCHASED BY SMT. YAMUNA DEVI MOTHER OF THE APPELLANT IN THE FINANCIAL YEAR 2000 - 01. THE SAID INVESTMENT IS A DISCLOSED INVESTMENT IN THE TAX RETURNS OF SMT. YAMUNA DEVI IN THE A SSESSMENT YEAR 2001 - 02 FURNISHED ON 09.08.2002. THUS THE LD. AUTHORIZED REPRESENTATIVE PLEADED THAT THE SEIZED PAPERS DOES NOT REPRESENT IN ANY MANNER THAT IT IS THE UNEXPLAINED INVESTMENT OF THE APPELLANT TO THE EXTENT OF RS. 5 14 091/ - . - : 62 : - 62 THE LD. AUTHORIZ ED REPRESENTATIVE HAS FURTHER SUBMITTED THAT THE AO HAS ADDED THIS AMOUNT OF RS. 17 94 600/ - AS UNDISCLOSED INCOME OF THE APPELLANT ON SUBSTANTIVE BASIS AND FURTHER MENTIONED IN HIS ORDER THAT THE SAME AMOUNT WILL BE ADDED PROTECTIVELY IN THE HANDS OF SHYA M KUMAR CHANDAK HUF. SINCE THE ADDITIONS AS MENTIONED ABOVE ARE NOT JUSTIFIED AND THEREFORE NO ADDITION WILL BE MADE EITHER ON SUBSTANTIVE BASIS OR PROTECTIVE BASIS IN THE HANDS OF APPELLANT INDIVIDUAL AND IN THE HANDS OF HUF. THUS ALL THE ABOVE ADDITIO NS AGGREGATED TO RS. 17 94 600/ - ARE DELETED. 45. THE REVENUE IS IN FURTHER APPEAL BEFORE US AGAINST THE ABOVE DELETION. 46. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND FOUND FROM RECORD THAT OUT OF TOTAL ADDITION OF RS. 17 94 600/ - ADDITION OF RS. 8 57 287/ - PERTAINS TO SOME LOOSE PAPERS WHICH HAVE BEEN ADDED - : 63 : - 63 IN THE CASE OF SHYAM KUMAR CHANDAK HUF. AGAINST THE DELETION OF SUCH ADDITION THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL IN GROUND NO.9. THE TRIBUNAL HAVE ALREADY DISPOSED OF THE DELETION OF ADDITION AS CHALLENGED BY THE REVENUE WHILE DISPOSING OF THE APPEAL OF SHRI SHYAM KUMAR CHANDAK HUF. THUS THE ISSUE IS COVERED BY GROUND NO. 09 IN CASE OF SHYAM KUMAR CHANDAK WITH REGARD TO ADDITION OF RS. 8 57 287/ - . 47. THE BALANCE ADDITION OF RS. 9 3 7 313/ - PERTAINS TO FOLLOWING DOCUMENTS : - (1) LPS - 3 PAGE 19 RS. 1 02 185/ - THE AO HAS TREATED IT AS UNEXPLAINED RECEIPT. WE HAD GONE THROUGH THE DOCUMENTS PLACED ON RECORD AND FOUND THAT THIS PAPER WAS FOUND FROM YAMUNA JEWLLERS AND THE ASSESSEE IS PARTNE R IN HUF CAPACITY IN THE SAID FIRM. THIS PAPER DOES NOT RELATE TO THE ASSESSEE AND DID NOT SHOW ANY TRANSACTION BY THE ASSESSEE NOR IT WAS IN THE - : 64 : - 64 HAND WRITING OF THE ASSESSEE. ACCORDINGLY NO ADDITION IS WARRANTED IN ASSESSEE S HANDS. (2) LPS - 4 PAGE 12 AMOUNTING TO RS. 12 964/ - + RS. 7644/ - ( INTEREST) THIS PAPER WAS TREATED BY THE ASSESSING OFFICER AS ADVANCE GIVEN BY THE ASSESSEE. AFTER GOING THROUGH THE MATERIAL PLACED ON RECORD IN THE ORDER OF LOWER AUTHORITIES WE FOUND THAT THE ASSESSEE WAS SABHAPA TI OF SWARTHY SAMITI UDAIPURA AT THE RELEVANT POINT OF TIME AND HIS WIFE WAS PARSHAD NAGAR PANCHAYAT. CONTENTION OF THE LD. AUTHORIZED REPRESENTATIVE WAS THAT DUE TO THIS NO. OF PEOPLE USED TO VISIT THE ASSESSEE FOR SETTLING THEIR DISPUTES AND MORE SO WHEN THE ASSESSEE WAS ADVOCATE. HOWEVER THE ASSESSEE COULD NOT ESTABLISH CONCLUSIVELY THAT THE SAID PAPERS DO NOT INDICATE ANY ADVANCE BY THE ASSESSEE. ACCORDINGLY THE ADDITION WAS VALIDLY MADE BY THE ASSESSING OFFICER AND CIT(A) WAS NOT JUSTIFIED IN D ELETING THE SAME. - : 65 : - 65 (3) LPS - 4 PAGE 29 INDICATE ADVANCE GIVEN BY THE ASSESSEE AMOUNTING TO RS. 8164/ - + 3336/ - (INTEREST). HOWEVER THE ASSESSEE COULD NOT CONCLUSIVELY PROVE THAT IT WAS NOT AN ADVANCE GIVEN BY THE ASSESSEE. ACCORDINGLY AO WAS JUSTIFIED IN MA KING THE ADDITION. (4) LPS - A/1 : THIS DOCUMENT INDICATE LOAN CONSENT GIVEN BY THE ASSESSEE AMOUNTING TO RS. 2 LAKHS. IT WAS ADDED BY THE ASSESSING OFFICER IN ASSESSEE S INCOME. WE HAVE CONSIDERED RIVAL CONTENTIONS AND GONE THROUGH THE ORDERS OF THE AUTHO RITIES BELOW AND THE DOCUMENTS PLACED ON RECORD. WE FOUND THAT LPS - A/1 EX FACIE SHOWS THAT IT IS JUST A CONSENT LETTER GIVEN BY HIS BROTHER TO GIVE LOAN IF THE LATTER GETS LPG DEALERSHIP. NOTHING WAS FOUND TO INDICATE THAT THE ASSESSEE HAS ACTUALLY GIVEN ANY LOAN AND FOUND THE DEALERSHIP OF LPS/IOC WAS NOT ALLOWED TO HIM. - : 66 : - 66 ACCORDINGLY THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER. (5) LPS - A/2 INDICATED EXPENSES TOWARDS PURCHASE OF SOME VEHICLES BY SHYAM KUMAR CHANDAK AMOUNTING TO RS. 5 14 091/ - . WE HAVE CONSIDERED THE DOCUMENTS PLACED ON RECORD. THE AO HAS ADDED THIS AMOUNT IN ASSESSEE S INCOME BY TREATING INVESTMENT/EXPENSES IN ASSESSEE S HANDS. WE FOUND THAT IT WAS AN ESTIMATION FOR PURCHASE OF TATA SUMO WHICH WAS ACTUALLY PURCHASED BY YAMUNA DEVI UNDER FINANCE SCHEME AND THE SAME WAS DULY DISCLOSED IN THE RETURN AS PLACED IN P B 73 7. ACCORDINGLY THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION. (6) LPS - A/15 INDICATED PAYMENT OF RS. 54 000/ - . THE CONTENTIO N OF THE LD. AUTHORIZED REPRESENTATIVE WAS THAT THE ASSESSEE IS A NOTARY AND ADVOCATE WHO SHOWS COLLECTION OF FEE FROM THE CLIENTS FROM TIME TO TIME AND SINCE INCOME OF THE YEAR TO WHICH IT PERTAINS WAS BELOW TAXABLE LIMIT NO RETURN - : 67 : - 67 WAS FILED. WE DIRECT THE AO TO VERIFY THE AMOUNT OF INCOME DURING THE YEAR TO WHICH SUCH PAYMENTS PERTAINED AND IF HE FINDS THAT INCOME OF ASSESSEE DURING THAT YEAR WAS BELOW TAXABLE LIMIT NO ADDITION WAS W ARRANTED FOR SUCH PAYMENTS HAVING BEEN RECEIVED BY THE ASSESSEE. WE D IRECT ACCORDINGLY. (7) LPS BS/2 INDICATED AMOUNT GIVEN TO VARIOUS PERSONS ON 28.10.2002 THAT LOAN IN THE NAME OF DAUGHTER OF THE ASSESSEE AMOUNTING TO RS. 35 000/ - . WE FOUND THAT ALL THESE AMOUNTS WERE ALREADY DISCLOSED IN THE RETURN BY THE RESPECTIVE F AMILY MEMBERS OF THE ASSESSEE. SAME IS EVIDENT AS PER P. B. N.78 GIVING DETAILS OF SUCH ADVANCES. ACCORDINGLY NO INTERFERENCE IS WARRANTED AGAINST SUCH DELETION. 48. GROUND NO. 3 RAISED BY THE REVENUE WITH REGARD TO ADDITION DELETED BY THE LD. CIT(A) AMOUNTIN G TO RS. 1 03 09 398/ - WITH RESPECT TO NOTINGS ON THE LOOSE PAPERS. 49. THIS ISSUE HAS BEEN ELABORATELY DEALT WITH BY DISPOSING GROUND NO.6 IN THE CASE OF RAM KUMAR - : 68 : - 68 CHANDAK IN I.T.(SS).A.NO. 192/IND/2007 HEREINABOVE. FOLLOWING THE SAME ANALOGY WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) FOR DELETING THE SAME. 50. IN GROUND NO.4 THE REVENUE IS AGGRIEVED CREDITS IN BANK AMOUNTING TO RS. 21 13 035/ - . 51. THIS GROUND IS ALSO COVERED BY GROUND NO.8 IN CASE OF SHYAM KUMAR CHANDAK HUF IN I.T.(SS).A.NO. 189/IN D/2007. FOLLOWING THE SAME ANALOGY WE CONFIRM THE ACTION OF THE CIT(A) ON THIS GROUND. 52. GROUND NO. 5 PERTAINS TO DELETION OF ADDITION OF RS. 59 500/ - ON ACCOUNT OF HUNDIES SHARES AND FDRS. 53. THIS ISSUE IS COVERED BY GROUND NO.5 OF RAM KUMAR CHANDAK HUF IN I.T.(SS).A.NO. 192/IND/2007 DISCUSSED HEREINABOVE. THIS GROUND IS ALSO DISPOSED OF IN THE SAME MANNER AS GROUND NO. 5 OF RAM KUMAR CHANDAK (INDIVIDUAL). 54. IN THE RESULT THE APPEAL OF THE REVENUE IS ALLOWED IN PART IN TERMS INDICATED HEREINABOVE. - : 69 : - 69 55. IN THE CROS S OBJECTION THE ASSESSEE HAS CHALLENGED THE ORDER OF CIT(A) ON THE GROUND THAT HE WAS NOT JUSTIFIED IN HOLDING THAT DECISION OF AO WAS CONTRARY TO LAW MATERIALLY INCORRECT AND UNSUSTAINABLE IN LAW AS WELL AS ON FACTS IN RESPECT OF LEGALITY OF ASSESSMENT. 56. WE HAVE ALREADY DISCUSSED THE LEGALITY OF THE ASSESSMENT FRAMED BY THE ASSESSING OFFICER WHILE DISPOSING GROUND NO.1 OF REVENUE S APPEAL. ON THE SAME ANALOGY WE DO NOT FIND ANY MERIT IN THE CROSS OBJECTION FILED BY THE ASSESSEE. 57. IN THE RESULT THE APPEAL OF THE REVENUE IS ALLOWED IN PART WHEREAS CROSS OBJECTION FILED BY THE ASSESSEE IS DISMISSED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 26 TH JU LY 2011. SD/ - SD/ - (JOGINDER SINGH) ( R.C.SHARMA) JUDICIAL MEMBER ACCOUN TANT MEMBER DATED : 26 TH JU LY 2011 . CPU* 267 ' . '