Shri Ashok Chadha, New Delhi v. ITO, New Delhi

CO 147/DEL/2009 | 2005-2006
Pronouncement Date: 17-09-2010 | Result: Dismissed

Appeal Details

RSA Number 14720123 RSA 2009
Assessee PAN PAGES1743A
Bench Delhi
Appeal Number CO 147/DEL/2009
Duration Of Justice 1 year(s) 3 month(s)
Appellant Shri Ashok Chadha, New Delhi
Respondent ITO, New Delhi
Appeal Type Cross Objection
Pronouncement Date 17-09-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 17-09-2010
Date Of Final Hearing 06-07-2010
Next Hearing Date 06-07-2010
Assessment Year 2005-2006
Appeal Filed On 17-06-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A DELHI BEFORE SHRI RAJPAL YADAV AND SHRI K.G. BANSAL ITA NO. 1455(DEL)/2009 ASSESSMENT YEAR: 2001-02 ITA NO. 1458(DEL)/2009 ASSESSMENT YEAR: 2004-05 ITA NO. 1459(DEL)/2009 ASSESSMENT YEAR: 2005-06 ITA NO. 1460(DEL)/2009 ASSESSMENT YEAR: 2006-07 INCOME-TAX OFFICER S HRI ASHOK CHADHA WARD 47(2) NEW DELHI. VS. E-65 NA RAINA VIHAR NEWDELHI. C.O. NO. 144(DEL)/2009 (ARISING OUT OF ITA NO. 1455(DEL)/2009) ASSESSMENT YEAR: 2001-02 ITA NO. 1266(DEL)/2009 ASSESSMENT YEAR: 2004-05 C.O. NO. 147(DEL)/2009 (ARISING OUT OF ITA NO. 1459(DEL)/2009) ASSESSMENT YEAR: 2005-06 ITA NO. 1267(DEL)/2009 ASSESSMENT YEAR: 2006-07 SHRI ASHOK CHADHA INCOME- TAX OFFICER NEW DELHI. VS. WARD 47(2) NEW DELHI. (APPELLANT) (RESPONDENT) CONTD . PAGE 2 ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 2 DEPARTMENT BY : SHRI ASHOK PANDEY CIT DR ASSESSEE BY : SMT. S. KAPILA ADVOCATE ORDER PER BENCH THESE APPEALS CROSS APPEALS AND CROSS OBJECTI ONS IN THE CASE OF AFORESAID ASSESSEE WERE ARGUED IN A CONSOLIDATED MANNER BY THE LD. DR AND THE LD. COUNSEL FOR THE ASSESSEE. THEREFORE WE THINK IT FIT TO PASS A CONSOLIDATED ORDER. ITA NO.1455(DEL)/2009- A.Y. 2001-02- APPEAL OF THE REVENUE CO NO. 144(DEL)/2009- A.Y. 2001-02-OBJECTION OF THE ASSESSEE 2. THE REVENUE HAS TAKEN TWO GROUNDS IN THE APP EAL TO THE EFFECT THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT(A) ERRED IN (I) DELETING THE ADDITION OF R S. 22 41 141/- MADE BY THE AO U/S 69 OF THE INCOME-TAX ACT 1961 (THE ACT F OR SHORT) IN RESPECT OF PLOT NO. 251 NANGLI SKHRAWATI ON THE BASIS OF THE SEIZED MATERIAL; AND (II) HOLDING THAT THE INCOME WAS NOT ASSESSABLE IN THE HANDS OF THE ASSESSEE IN VIEW OF THE PROVISION CONTAINED IN SECTION 153C OF THE ACT IN SPITE OF THE FACT THAT THE ASSESSEE WAS GIVEN OPPORTUNITY TO EXPLAIN THE SEIZED MATERIAL AND THEREAFTER IT WAS HELD THAT THE INVES TMENT HAS BEEN MADE BY THE ASSESSEE. ON THE OTHER HAND THE ONLY SUBSTANT IVE GROUND TAKEN BY THE ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 3 ASSESSEE IS TO THE EFFECT THAT THE LD. CIT(A) ERR ED IN NOT APPRECIATING THAT THE ASSESSMENT MADE U/S 153A OF THE ACT WAS BAD IN LAW AND VOID AB- INITIO AS NO NOTICE WAS ISSUED U/S 143(2). IT I S MENTIONED THAT HE ERRED IN HOLDING THAT THE GRANT OF OPPORTUNITY TO THE ASSE SSEE AMOUNTS TO COMPLIANCE OF THE AFORESAID STATUTORY NOTICE EVEN IN ABS ENCE OF ITS ISSUANCE. THE OBJECTION OF THE ASSESSEE IS COMMON IN RESPECT OF ALL THE APPEALS EXCEPT FOR THE APPEAL OF ASSESSMENT YEAR 2006-07. IT IS ALSO PRELIMINARY IN NATURE RAISING QUESTION ABOUT THE JURISDICTION OF THE AO TO MAKE ASSESSMENT U/S 153A IN ORDER TO MAKE ADDITIONS T O THE INCOME RETURNED BY THE ASSESSEE. THEREFORE WE SHALL TAKE UP TH E OBJECTION AT THE OUTSET. 3. IT MAY BE APPROPRIATE AT THIS STAGE TO MENTIO N THE FACTS STATED IN THE ASSESSMENT ORDER RELATING TO THIS ISSUE. A S EARCH AND SEIZURE OPERATION U/S 132(1) OF THE ACT WAS CONDUCTED ON 1.9.2005 IN THE CASE OF DILBAGH RAI GROUP ENGAGED IN THE TRADE OF PAN MASALA AND GUTKA. THE RESIDENCE OF THE ASSESSEE AND HIS LOCKER NO. 476 WITH UNION BANK OF INDIA WERE ALSO SEARCHED ON 1.9.2005 AND 28.9.2005 R ESPECTIVELY. IN THE COURSE OF SEARCH CASH AMOUNTING TO RS. 22 500/- JEWELLERY OF THE VALUE OF RS. 4 15 879/- WERE FOUND IN THE RESIDENCE. JEWELLERY OF THE VALUE OF RS. 2 77 703/- WAS ALSO FOUND IN THE LOCKER. C ONSEQUENT UPON THE SEARCH ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 4 A NOTICE U/S 153A WAS ISSUED TO THE ASSESSEE ON 7.9.2007 REQUIRING HIM TO FILE THE RETURN WITHIN 15 DAYS. IN RESPONSE T O THIS NOTICE RETURN OF INCOME WAS FILED ON 24.10.2007 DECLARING TOTAL IN COME OF RS. 90 080/-. IN THE COURSE OF ASSESSMENT PROCEEDINGS A QUESTION NAIRE DATED 7.12.2007 WAS ISSUED TO THE ASSESSEE AND THIS WAS COMPLIED WITH BY WAY OF LETTER DATED 24.12.2007. ANOTHER QUESTIONNAIRE WAS ISSU ED ON 27.12.2007 WHICH WAS COMPLIED ON 28.12.2007. AFTER HEARING THE ASSESSEE THE TOTAL INCOME WAS COMPUTED AT RS. 23 31 760/-. 3. ONE OF THE GROUNDS TAKEN BEFORE THE LD. CIT(A) IN APPEAL FILED BEFORE HIM WAS THAT NO NOTICE U/S 143(2) HAD BEEN ISSUE D AND SERVED ON THE ASSESSEE BEFORE THE COMPLETION OF THE ASSESSMENT. THEREFORE THE ASSESSMENT IS BAD IN LAW. THE LD. CIT(A) CONSID ERED THE FACTS OF THE CASE THE SUBMISSIONS OF THE ASSESSEE AND THE CAS E LAW BROUGHT TO HIS NOTICE. THEREFORE IT HAS BEEN MENTIONED THAT THE NOTICE IS USUALLY ISSUED IN THE PROFORMA MARKED AS ITNS-33. THE PROFORM A IS NOT PRESCRIBED UNDER THE STATUTE. IT IS A COMMUNICATION BY THE AO TO THE ASSESSEE GIVING HIM THE OPPORTUNITY AS REQUIRED U/S 143(2). THER EFORE ONCE THE ASSESSEE HAS BEEN PUT TO NOTICE AND GIVEN OPPORTUNITY TO ATTEND THE OFFICE THE REQUIREMENT OF SECTION 143(2) IS COMPLETE WHETHER THE NOTICE IS ISSUED IN ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 5 THE PROFORMA MENTIONED IN ITNS-33 OR IN SOME OT HER FORMAT. COMING TO THE FACTS OF THE CASE IT IS MENTIONED THAT THE AO HAD COMMUNICATED HIS INTENTION TO SCRUTINIZE THE RETURN BY WAY OF TWO LETTERS AND AFFORDED OPPORTUNITY TO THE ASSESSEE TO PRODUCE NECESSARY ACCOUNTS DOCUMENTS OR EVIDENCES. THEREFORE THE REQUIREMENT OF SECTION 143(2) HAS BEEN SATISFIED IN THIS CASE. 3.1 BEFORE US THE CASE OF THE LD. COUNSEL IS THA T IT IS MANDATORY ON THE PART OF THE AO TO ISSUE AND SERVE A NOTICE U/S 143(2) BEFORE MAKING ASSESSMENT U/S 153A. IN THIS CONNECTION OUR ATT ENTION HAS BEEN DRAWN TOWARDS CLAUSE (A) OF SUB-SECTION (1) OF SECTION 1 53-A WHICH READS AS UNDER:- (A) ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO FURNISH WITHIN SUCH PERIOD AS MAY BE SPECIFIED IN TH E NOTICE THE RETURN OF INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS REFERRED TO IN CLA USE (B) IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER AND SETTING FORTH SUCH OTHER PARTICULARS AS MAY BE PRESCRIBED AND THE PROVISIONS OF THIS ACT SHALL SO FAR AS MAY BE APPLY ACCORDINGLY AS IF SUCH RETURN WERE A RETURN REQUIRED TO BE FURNISHED UNDER SECTION 139; 3.2 THE POINT STRESSED BY THE LD. COUNSEL IS THAT THE PROVISIONS CONTAINED IN SECTION 139 ARE APPLICABLE IN SO FAR AS MAY BE TO A RETURN FURNISHED U/S 153-A. THEREFORE FOR TAKING SUCH A RETURN FOR SCRUTINY A NOTICE U/S ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 6 153A HAS TO BE SERVED ON THE ASSESSEE WHICH HA S NOT BEEN DONE IN THIS CASE. 3.3 IN THE AFORESAID CONNECTION OUR ATTENTION HAS BEEN DRAWN TOWARDS THE PROVISION CONTAINED IN SECTION 158BC(B) (NOW OMITTED). IT IS MENTIONED THAT THE AO SHALL PROCEED TO DETERMINE THE UNDISC LOSED INCOME OF THE BLOCK PERIOD IN THE MANNER LAID DOWN IN SECTION 158BB AND THE PROVISIONS OF SECTION 142 SUB-SECTIONS (2) AND (3 ) OF SECTION 143 SECTION 144 AND SECTION 145 SHALL SO FAR AS MAY BE A PPLY. IT IS HER CASE THAT THIS PROVISION CONTAINED IN SECTION 158BC IS ANA LOGOUS TO THE PROVISION CONTAINED IN SECTION 153A. OUR ATTENTION HAS BE EN DRAWN TOWARDS THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF A SSISTANT CIT & ANOTHER VS. HOTEL BLUE MOON (2010) 321 ITR 362 DECIDED UNDER CHAPTER XIVB CONTAINING PROVISIONS REGARDING SPECIAL PROCEDUR E FOR ASSESSMENT OF SEARCH CASES (SINCE OMITTED). THE DECISION OF T HE HONBLE COURT IS THAT IF AN ASSESSMENT IS TO BE COMPLETED U/S 143(3) READ WITH SECTION 158BC NOTICE U/S 143(2) SHOULD BE ISSUED WITHIN ONE Y EAR FROM THE DATE OF FILING OF THE RETURN OF INCOME FOR THE BLOCK PERIOD. OMI SSION TO DO SO CANNOT BE TAKEN TO BE A PROCEDURAL IRREGULARITY AND THEREF ORE IT CANNOT BE CURED. THE ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 7 RELEVANT PORTION OF THE JUDGMENT AT PAGE NOS. 369 TO 371 IS REPRODUCED BELOW FOR READY REFERENCE:- WE MAY NOW REVERT BACK TO SECTION 158BC(B) WHIC H IS THE MATERIAL PROVISION WHICH REQUIRES OUR CONSIDERAT ION. SECTION 158BC(B) PROVIDES FOR ENQUIRY AND ASSESSMENT. THE SAID PROVISION READS THAT THE ASSESSING OFFICER SHALL PROCEED TO DETERMINE THE UNDISCLOSED INCOME OF THE BLOCK PERIO D IN THE MANNER LAID DOWN IN SECTION 158BB AND THE PROVISI ONS OF SECTION 142 SUB-SECTIONS (2) AND (3) OF SECTION 143 SECTION 144 AND SECTION 145 SHALL SO FAR AS MAY BE APPLY. AN ANALYSIS OF THIS SUB-SECTION INDICATES THAT AFT ER THE RETURN IS FILED THIS CLAUSE ENABLES THE ASSESSING OFFICER TO COMPLETE THE ASSESSMENT BY FOLLOWING THE PROCEDURE LIKE ISS UE OF NOTICE UNDER SECTION 143(2)/142 AND COMPLETE THE ASSES SMENT UNDER SECTION 143(3). THIS SECTION DOES NOT PROVIDE FO R ACCEPTING THE RETURN AS PROVIDED UNDER SECTION 143(1)(A). THE ASSESSING OFFICER HAS TO COMPLETE THE ASSESSMENT UNDER SEC TION 143(3) ONLY. IN CASE OF DEFAULT IN NOT FILING THE RETUR N OR NOT COMPLYING WITH THE NOTICE UNDER SECTION 143(2) /142 THE ASSESSING OFFICER IS AUTHORIZED TO COMPLETE THE ASSESSMENT EX-PARTE UNDER SECTION 144. CLAUSE (B) OF SECT ION 158BC BY REFERRING TO SECTION 143(2) AND (3) WOULD APPEAR TO IMPLY THAT THE PROVISIONS OF SECTION 143(1) ARE EXCLUDED. BUT SECTION 143(2) ITSELF BECOMES NECESSARY ONLY WHERE IT BEC OMES NECESSARY TO CHECK THE RETURN SO THAT WHERE BLOC K RETURN CONFORMS TO THE UNDISCLOSED INCOME INFERRED BY THE AUTHORITIES THERE IS NO REASON WHY THE AUTHORITIES SHOULD I SSUE NOTICE UNDER SECTION 143(2). HOWEVER IF AN ASSESSMEN T IS TO BE COMPLETED UNDER SECTION 143(3) READ WITH SECTI ON 158BC NOTICE UNDER SECTION 143(2) SHOULD BE ISSUED W ITHIN ONE YEAR FROM THE DATE OF FILING OF BLOCK RETURN. OMISS ION ON THE PART OF THE ASSESSING AUTHORITY TO ISSUE NOTICE UNDE R SECTION 143(2) CANNOT BE A PROCEDURAL IRREGULARITY AND THE SAME IS NOT CURABLE AND THEREFORE THE REQUIREMENT OF NO TICE UNDER SECTION 143(2) CANNOT BE DISPENSED WITH. THE O THER IMPORTANT FEATURE THAT REQUIRES TO BE NOTICED I S THAT SECTION 158BC(B) SPECIFICALLY REFERS TO SOME OF THE PRO VISIONS OF THE ACT WHICH REQUIRE TO BE FOLLOWED BY THE ASSESSING OFFICER ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 8 WHILE COMPLETING THE BLOCK ASSESSMENTS UNDER CH APTER XIV- B OF THE ACT. THIS LEGISLATION IS BY INCORPORATI ON. THIS SECTION EVEN SPEAKS OF SUB-SECTIONS WHICH ARE T O BE FOLLOWED BY THE ASSESSING OFFICER. HAD THE INTENTION OF T HE LEGISLATURE BEEN TO EXCLUDE THE PROVISIONS OF CHAPTER XIV OF THE ACT THE LEGISLATURE WOULD HAVE OR COULD HAVE INDICATED THA T ALSO. A READING OF THE PROVISION WOULD CLEARLY INDICATE I N OUR OPINION IF THE ASSESSING OFFICER IF FOR ANY REASON RE PUDIATES THE RETURN FILED BY THE ASSESSEE IN RESPONSE TO NO TICE UNDER SECTION 158BC(A) THE ASSESSING OFFICER MUST NEC ESSARILY ISSUE NOTICE UNDER SECTION 143(2) OF THE ACT WITH IN THE TIME PRESCRIBED IN THE PROVISO TO SECTION 143(2) OF THE ACT. WHERE THE LEGISLATURE INTENDED TO EXCLUDE CERTAIN P ROVISIONS FROM THE AMBIT OF SECTION 158BC(B) IT HAS DONE SO SPECI FICALLY. THUS WHEN SECTION 158BC(B) SPECIFICALLY REFERS TO APPLICABILITY OF THE PROVISO THERETO IT CANNOT BE EXCLUDED. WE MAY ALSO NOTICE HERE ITSELF THAT THE CLARIFICATI ON GIVEN BY THE CENTRAL BOARD OF DIRECT TAXES IN ITS CIRCULAR NO. 717 DATED AUGUST 14 1995 HAS A BINDING EFFECT ON THE DEPA RTMENT BUT NOT ON THE COURT. THIS CIRCULAR CLARIFIES THE REQUIREMENT OF LAW IN RESPECT OF SERVICE OF NOTICE UNDER SUB-SEC TION (2) OF SECTION 143 OF THE ACT. ACCORDINGLY WE CONCLUDE T HAT EVEN FOR THE PURPOSE OF CHAPTER XIV-B OF THE ACT FOR THE DETERMINATION OF UNDISCLOSED INCOME FOR A BLOCK PE RIOD UNDER THE PROVISIONS OF SECTION 158BC THE PROVISIONS O F SECTION 142 AND SUB-SECTION (2) AND (3) OF SECTION 143 ARE A PPLICABLE AND NO ASSESSMENT COULD BE MADE WITHOUT ISSUING NOTIC E UNDER SECTION 143(2) OF THE ACT. HOWEVER IT IS CONTEN DED BY SRI SHEKHAR LEARNED COUNSEL FOR THE DEPARTMENT THAT IN VIEW OF THE EXPRESSION SO FAR AS MAY BE IN SECTION 153BC( B) THE ISSUE OF NOTICE IS NOT MANDATORY BUT OPTIONAL AND ARE TO BE APPLIED TO THE EXTENT PRACTICABLE. IN SUPPORT OF THAT CONTENTION THE LEARNED COUNSEL HAS RELIED ON THE OBSERVATION MADE BY THIS COURT IN DR. PARTAP SINGHS CASE [198 5] 155 ITR 166. IN THIS CASE THE COURT HAS OBSERVED THAT SECTION 37(2) PROVIDES THAT THE PROVISIONS OF THE CODE RELATIN G TO SEARCHES SHALL SO FAR AS MAY BE APPLY TO SEARCHES DIREC TED UNDER SECTION 37(2). READING THE TWO SECTIONS TOGETHER I T MERELY MEANS THAT THE METHODOLOGY PRESCRIBED FOR CARRYI NG OUT THE SEARCH PROVIDED IN SECTION 165 HAS TO BE GENERALL Y FOLLOWED. ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 9 THE EXPRESSION SO FAR AS MAY BE HAS ALWAYS BEE N CONSTRUED TO MEAN THAT THOSE PROVISIONS MAY BE GENERALLY FOL LOWED TO THE EXTENT POSSIBLE. THE LEARNED COUNSEL FOR THE RESP ONDENT HAS BROUGHT TO OUR NOTICE THE OBSERVATIONS MADE BY T HIS COURT IN THE CASE OF MAGANLAL V. JAISWAL INDUSTRIES NEEMA CH [1989] 4 SCC 344 WHEREIN THIS COURT WHILE DEALING WITH TH E SCOPE AND IMPORT OF THE EXPRESSION AS FAR AS PRACTICABLE HAS STATED WITHOUT ANYTHING MORE THE EXPRESSION AS FAR AS POSSIBLE WILL MEAN THAT THE MANNER PROVIDED IN THE CODE FO R ATTACHMENT OR SALE OF PROPERTY IN EXECUTION OF A DECREE SHA LL BE APPLICABLE IN ITS ENTIRETY EXCEPT SUCH PROVISION THEREIN WHICH MAY NOT BE PRACTICABLE TO BE APPLIED. THE CASE OF THE REVENUE IS THAT THE EXPRESSION SO FAR AS MAY BE APPLY INDICATES THAT IT IS NOT EXPECTED TO FOLLOW THE PROVISIONS OF SECTION 142 SUB-SECTIONS (2) AND ( 3) OF SECTION 143 STRICTLY FOR THE PURPOSE OF BLOCK ASSESSMENT S. WE DO NOT AGREE WITH THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE REVENUE SINCE WE DO NOT SEE ANY REASON TO RESTRI CT THE SCOPE AND MEANING OF THE EXPRESSION SO FAR AS MAY BE APPLY. IN OUR VIEW WHERE THE ASSESSING OFFICER IN REPUD IATION OF THE RETURN FILED UNDER SECTION 158BC(A) PROCEEDS TO MA KE AN ENQUIRY HE HAS NECESSARILY TO FOLLOW THE PROVISI ONS OF SECTION 142 SUB-SECTIONS (2) AND (3) OF SECTION 143. SECTION 158BH PROVIDES FOR APPLICATION OF THE OTH ER PROVISIONS OF THE ACT. IT READS : SAVE AS OTH ERWISE PROVIDED IN THIS CHAPTER ALL THE OTHER PROVISIONS OF THIS A CT SHALL APPLY TO ASSESSMENT MADE UNDER THIS CHAPTER. THIS IS AN ENABLING PROVISION WHICH MAKES ALL THE PROVISIONS OF THE AC T SAVE AS OTHERWISE PROVIDED APPLICABLE FOR PROCEEDINGS FOR BLOCK ASSESSMENT. THE PROVISIONS WHICH ARE SPECIFICALLY INCLUDED ARE THOSE WHICH ARE AVAILABLE IN CHAPTER XIV-B OF THE ACT WHICH INCLUDES SECTION 142 AND SUB-SECTIONS (2) AND (3) OF SECTION 143. ON A CONSIDERATION OF THE PROVISIONS OF CHAPTER X IV-B OF THE ACT WE ARE IN AGREEMENT WITH THE REASONING A ND THE CONCLUSION REACHED BY THE HIGH COURT. ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 10 3.4 IN THIS VERY CONNECTION OUR ATTENTION HAS BE EN DRAWN TOWARDS THE PROVISION CONTAINED IN SECTION 148(1) REGARDING ISSUE OF NOTICE WHERE INCOME HAS ESCAPED ASSESSMENT. THIS PROVISION DEALS WITH THE ISSUANCE OF NOTICE AND THE TREATMENT TO BE METED OUT TO THE RETURN FILED IN RESPONSE TO THE NOTICE. THE RETURN UNDER THIS SECTION HAS TO BE TREATED AS A RETURN FURNISHED U/S 139 AND THE PROVISIONS O F THE ACT ARE ACCORDINGLY MADE APPLICABLE SO FAR AS MAY BE. FOR THE SAKE OF READY REFERENCE THE PROVISION IS REPRODUCED BELOW:- BEFORE MAKING THE ASSESSMENT REASSESSMENT OR RECOMPUTATION UNDER SECTION 147 THE ASSESSING OF FICER SHALL SERVE ON THE ASSESSEE A NOTICE REQUIRING HIM TO FURNISH WITHIN SUCH PERIOD AS MAY BE SPECIFIED IN TH E NOTICE A RETURN OF HIS INCOME OR THE INCOME OF ANY OTHER PE RSON IN RESPECT OF WHICH HE IS ASSESSABLE UNDER THIS AC T DURING THE PREVIOUS YEAR CORRESPONDING TO THE RELEVANT AS SESSMENT YEAR IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESC RIBED MANNER AND SETTING FORTH SUCH OTHER PARTICULARS AS MA Y BE PRESCRIBED; AND THE PROVISIONS OF THIS ACT SHAL L SO FAR AS MAY BE APPLY ACCORDINGLY AS IF SUCH RETURN WER E A RETURN REQUIRED TO BE FURNISHED UNDER SECTION 139: 3.5 THUS IT IS HER CASE THAT A RETURN U/S 14 8 STANDS ON THE SAME FOOTING AS A RETURN U/S 139 AS ALSO THE RETURN U/S 153A. THE REQUIREMENT FOR ISSUANCE OF NOTICE U/S 143(2) FOR MAKING AN ASSESSMENT U/S 143(3) WAS CONSIDERED BY THE SPECIAL BENCH OF DELHI TRIBU NAL IN THE CASE OF RAJ ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 11 KUMAR CHAWLA & ANOTHER VS. ITO (2005) 277 ITR (AT ) 225. IT HAS BEEN HELD THAT THE JURISDICTION TO ASSESS OR RE-ASSESS INCOME WHICH HAS ESCAPED ASSESSMENT IS FOUNDED ON A VALID NOTICE ISSUED U/S 148. HOWEVER IF THE RETURN FILED U/S 148 IS SOUGHT TO BE SCRUTINIZED THE COMPLIANCE TO THE PROVISION CONTAINED IN PROVISO TO SECTION 143(2) I S NECESSARY. IN OTHER WORDS SUCH A NOTICE HAS TO BE SERVED WITHIN A PER IOD OF 12 MONTHS AS PROVIDED UNDER PROVISO TO SECTION 143(2) FOR MAKIN G SUCH AN ASSESSMENT. IT MAY BE MENTIONED HERE THAT THE PROVISION HAS B EEN AMENDED TO REMOVE THE TIME LIMIT OF 12 MONTHS AND THE NOTICE ISSUE D AT ANY TIME BEFORE MAKING ASSESSMENT U/S 148 IS NOW A VALID NOT ICE. FOR THE SAKE OF READY REFERENCE THE FINDING CONTAINED IN PLACITUM 48 AT PAGE 254 OF THE REPORT IS REPRODUCED BELOW:- IN THE LIGHT OF THE ANALYSIS OF THE RELEVANT PRO VISIONS OF LAW AND JUDICIAL PRECEDENTS WE ARE OF THE CONSIDERE D VIEW THAT THE RETURN FILED PURSUANT TO NOTICE UNDER SEC. 1 48 OF THE ACT MUST BE ASSUMED AND TREATED TO BE A RETURN FILE D UNDER SECTION 139 OF THE ACT AND THE ASSESSMENT MUST THEREAFTER BE MADE UNDER SECTION 143 OR 144 OF THE ACT AFTER COMPLYING WITH ALL THE MANDATORY PROVISIONS. ACCORDINGLY IT IS INCUMBENT UPON THE ASSESSING AUTHORITY TO ISSU E NOTICE UNDER SECTION 143(2) OF THE ACT WITHIN THE PERI OD AS STIPULATED IN THE PROVISO THEREUNDER. IN THIS VIEW OF THE MATTER THE FIRST QUESTION BEFORE THE SPECIAL BENCH IS ANSW ERED IN THE AFFIRMATIVE. ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 12 3.6 IT IS ALSO HER CASE THAT THE PROVISION CONT AINED IN SECTION 292BB INSERTED IN THE ACT BY FINANCE ACT 2008 WITH EFFE CT FROM 1.4.2008 REGARDING NOTICE DEEMED TO BE VALID IN CERTAIN CIRCUMSTANCES IS APPLICABLE PROSPECTIVELY AND NOT RETROSPECTIVELY AS HELD BY THE SPECIAL BENCH OF DELHI TRIBUNAL IN THE CASE OF KUBER TO BACCO PRODUCTS (P) LTD. VS. DY. CIT (2009) 310 ITR (AT) 300. IT HAS BEEN HELD IN THIS CASE THAT THE PROVISION CANNOT BE CONSTRUED TO HAVE RETR OSPECTIVE OPERATION AND IT HAS TO BE APPLIED PROSPECTIVELY ONLY. THE HONB LE BENCH FURNISHED A SUMMARY OF ITS FINDING IN PLACITUM 46 AT PAGE 324 WHICH IS REPRODUCED BELOW:- SUMMARISING OUR FINDINGS WE HOLD AS FOLLOWS:- (I) SECTION 292BB EVEN IF IT IS PROCEDURAL IT IS C REATING A NEW DISABILITY AS IT PRECLUDES THE ASSESSEE FR OM TAKING A PLEA WHICH COULD BE TAKEN AS A RIGHT CANNOT B E CONSTRUED RETROSPECTIVELY AS THE SAME IS MADE APPLICABLE BY THE STATUTE WITH EFFECT FROM APRIL 1 2008. (II) SECTION 292BB IS APPLICABLE TO THE ASSESSM ENT YEAR 2008-09 AND SUBSEQUENT ASSESSMENT YEARS. 3.7 THE LD. COUNSEL ALSO RELIED ON THE DECISION O F HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. LUNAR DIAMONDS LTD. ( 2006) 281 ITR 1 IN ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 13 WHICH IT IS MENTIONED THAT THE ASSESSEE HAD FILE D AFFIDAVIT STATING THAT IT DID NOT RECEIVE THE NOTICE. IN SUCH A CIRCUMS TANCE THE TRIBUNAL RIGHTLY HELD THAT THE BURDEN WAS UPON THE DEPARTMENT TO PROVE THAT THE NOTICE WAS SERVED ON THE ASSESSEE WITHIN THE PRESCRIBED TIME . HER LIMITED CASE ON THE BASIS OF THIS DECISION IS THAT IT IS FOR TH E REVENUE TO PROVE THAT A NOTICE HAS BEEN SERVED ON THE ASSESSEE. FOR THE SAKE OF READY REFERENCE THE RELEVANT PORTION OF THE JUDGMENT IN PLACITUM 16 ON PAGE 5 IS REPRODUCED BELOW: WE MAY ALSO POINT OUT THAT THERE APPEARS TO BE SOME DOUBT WHETHER THE NOTICE WAS AT ALL SENT TO THE AS SESSEE BECAUSE AS OBSERVED BY THE COMMISSIONER OF INCOME-TAX (APP EALS) THE RECEIPT SHOWING THAT AN ENVELOPE WAS SENT BY RE GISTERED POST MERELY CONTAINED THE NAME OF THE ASSESSEE WITHO UT ITS ADDRESS. CONSEQUENTLY IT IS QUITE POSSIBLE THAT THE NOTICE MAY HAVE BEEN SENT TO THE ASSESSEE AT SOME WRONG OR EVEN SOME INCOMPLETE ADDRESS. HOWEVER IT IS NOT NECESSARY FOR US TO GO INTO THIS QUESTION AT ALL BECAUSE THE ASSESSEE H AD FILED AN AFFIDAVIT STATING THAT IT HAD NOT RECEIVED THE NOTICE AND THE TRIBUNAL RIGHTLY HELD THAT UNDER THESE CIRCUMSTAN CES THE BURDEN WAS UPON THE APPELLANT TO PROVE THAT NOTIC E WAS SERVED UPON THE ASSESSEE WITHIN THE PRESCRIBED TIME. THE APPELLANT HAD FAILED TO PROVE ITS CASE IN THIS REGARD. 3.8 RELIANCE HAS ALSO BEEN PLACED ON THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF ALLANA COLD STORAGE LTD . VS. ITO & OTHERS (2006) 287 ITR 1 IN WHICH IT HAS BEEN MENTIONED THAT THE ASSESSEE IS ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 14 EXPECTED TO FILE A RETURN OF INCOME IN RESPONSE TO NOTICE U/S 148. THE HONBLE SUPREME COURT HAS LAID DOWN THAT HE HAS RIGHT TO SEEK THE REASONS FOR ISSUANCE OF THE NOTICE IN THE CASE OF GKN DRIVESHAFT (INDIA) LTD. VS. ITO (2003) 259 ITR 19. THEREFORE THE AO IS BOUND TO FURNISH THE REASONS WITHIN A REASONABLE TIME. ONCE TH E REASONS ARE RECEIVED THE ASSESSEE HAS A RIGHT TO FILE OBJECTIONS AND THE A O IS BOUND TO DISPOSE THEM OFF BY WAY OF A SPEAKING ORDER. THEREFORE IN A BSENCE OF COMPLIANCE OF THE AFORESAID PROCEDURE THE NOTICE IS LIABLE TO BE QUASHED. THE PURPOSE OF RELIANCE ON THIS DECISION IS NOT VERY CLEAR TO U S AS THE PRIMARY CASE OF THE LD. COUNSEL IS THAT NO NOTICE HAS BEEN ISSUED U/S 143(2) BEFORE COMPLETION OF THE ASSESSMENT. NONETHELESS WE TEND TO AGRE E WITH HER THAT IF ANY STATUTORY REQUIREMENT IS NOT SATISFIED THE ORDER OF ASSESSMENT IS LIABLE TO BE STRUCK DOWN. 3.9 WE HAVE ALREADY SUMMARIZED THE RELEVANT PORTION OF THE IMPUGNED ORDER IN WHICH IT HAS BEEN HELD THAT SINCE TWO QU ESTIONNAIRES HAVE BEEN ISSUED TO THE ASSESSEE BEFORE COMPLETION OF THE ASSESSMENT THE REQUIREMENT OF SECTION 143(2) HAS BEEN SATISFIED. IN VIEW THEREOF THE LD. COUNSEL WAS REQUESTED TO STATE AS TO WHY THESE QUESTIONNAIRES SHOULD NOT BE TAKEN AS NOTICES U/S 143(2). IN THIS CONNECTI ON SHE FILED A PROFORMA ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 15 NOTICE U/S 143(2) MARKED AS ITNS-33 ABOUT WH ICH A MENTION HAS ALSO BEEN MADE IN THE ORDER OF THE LD. CIT(A). HER P RIMARY CASE IS THAT NOTICE IN THIS PROFORMA MUST BE ISSUED TO THE ASSESSEE FOR MAKING COMPLIANCE OF SECTION 143(2). WHEN SHE WAS APPRAISED THAT THIS WAS NOT A NOTICE PRESCRIBED UNDER THE ACT AND IT IS ONLY NON-STA TUTORY PROFORMA DEVISED BY THE REVENUE FOR OBTAINING THE NECESSITY OF ITS REPEATED PRINTING IT HAS BEEN SUBMITTED THAT FOR ANY NOTICE TO COMPLY WITH THE AFORESAID PROVISION IT MUST REFER TO THE RETURN OF INCOME FILED BY T HE ASSESSEE AND AFFORD HIM OPPORTUNITY TO FILE EVIDENCE IN SUPPORT OF THE RE TURN. THIS PROFORMA NOTICE ITNS-33 DULY FILLED FOR ASSESSMENT YEAR 2006- 07 AND ISSUED BY THE AO ON 27.7.2007 HAS BEEN PLACED IN THE PAPER BOOK W HICH READS AS UNDER:- THERE ARE CERTAIN POINTS IN CONNECTION WITH THE RETURN OF INCOME SUBMITTED BY YOU ON. FOR THE ASSESSMENT Y EAR 2006- 07 ON WHICH I WOULD LIKE SOME FURTHER INFORMATION . YOU ARE HEREBY REQUIRED TO ATTEND MY OFFICE ON 20.8.07 AT 11.00 A.M EITHER IN PERSON OR THROUGH A REPRESENTA TIVE DULY AUTHORIZED IN WRITING IN THIS BEHALF OR PRODUCE OR CAUSE THERE TO BE PRODUCED AT THE SAID TIME ANY DOCUMENTS ACCOUNTS AND ANY OTHER EVIDENCE ON WHICH YOU MAY RELY IN S UPPORT OF THE RETURN FILED BY YOU. 3.10 SHE HAS ALSO PLACED ON RECORD THE QUESTIONNAIR E DATED 7.12.2007 ISSUED BY THE AO IN RESPECT OF PROCEEDINGS FOR A SSESSMENT YEARS 2000-01 ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 16 TO 2006-07. THIS NOTICE MAKES MENTION ABOUT THE SEARCH CONDUCTED ON 1.9.2005 AT THE RESIDENCE OF THE ASSESSEE VARI OUS ASSETS FOUND IN THE RESIDENCE AND THE LOCKER AND THE DOCUMENTS FOUND AND SEIZED IN THE COURSE OF SEARCH OF THE RESIDENCE. INFORMATION/DETAIL S HAVE BEEN SOUGHT ON 31 POINTS. AT THE END OF THIS NOTICE IT IS ALSO MEN TIONED THAT IT MAY BE COMPLIED ON 17.12.2007 IN PERSON OR THROUGH AUT HORIZED REPRESENTATIVE ALONG WITH SUPPORTING DOCUMENTS. THE POINTS PRIMAR ILY DEAL WITH ASSETS AND DOCUMENTS FOUND IN THE COURSE OF THE SEARCHES. 3.11 IN REPLY THE LD. DR REFERRED TO THE FIND INGS OF THE LD. CIT(A) IN THIS MATTER. IT HAS BEEN HELD BY HIM THAT THE ASSESSEE HAD BEEN PUT TO NOTICE BY WAY OF TWO QUESTIONNAIRES. THEREFORE THE REQUIREMENT OF SECTION 143(2) STANDS SATISFIED. IN THE ALTE RNATIVE AN ADDITIONAL PLEA HAS BEEN TAKEN THAT AS PER NOTICE U/S 153A ISSU ED ON 7.9.2007 THE ASSESSEE WAS REQUIRED TO FILE THE RETURN WITHIN 15 DAYS. THEREFORE THE TIME LIMIT FOR FILING THE RETURN AS PER THE NOTICE EXPIRED O N 22.9.2007. THE RETURN HAD NOT BEEN FILED TILL THIS DATE. THEREFORE THE RE TURN IS NON-EST. IN COLUMN NO. 6 OF THE PROFORMA ON PAGE 1 OF THE ASSESSMENT ORDER IT IS MENTIONED THAT THE ORDER IS PASSED U/S 153-A OF THE ACT. IN VI EW OF THE FACT THAT NO VALID RETURN HAD BEEN FILED BY THE ASSESSEE THE ORDER SHOULD BE TAKEN TO HAVE ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 17 BEEN PASSED U/S 144 READ WITH SECTION 153-A OF THE ACT. SINCE THE RETURN IS NON-EST AND THE ORDER HAD BEEN PASSED U/S 144 READ WITH SECTION 153A OF THE ACT THERE WAS NO REQUIREMENT OF ISSUING A NOT ICE U/S 143(2). 3.12 IN THE REJOINDER THE LD. COUNSEL SUBMITTED THAT NONE OF THE LOWER AUTHORITIES HAS GIVEN A FINDING THAT THE RETURN I S INVALID. THEREFORE THE ARGUMENT IN THIS REGARD IS A LEAP IN THE DARK. IT IS FURTHER SUBMITTED BY HER THAT THE ASSESSMENT HAS BEEN MADE ON THE BASIS OF MATERIAL FOUND IN THE COURSE OF SEARCH. BUT A VALID ASSESSMENT IN S UCH A SITUATION CAN BE MADE WHICH LEADS TO INCREASE IN THE TOTAL INCOM E ONLY AFTER ISSUANCE AND SERVICE OF A NOTICE U/S 143(2). 4. WE FIND THAT THE LD. CIT(A) HAS GIVEN A CATEG ORICAL FINDING THAT THE REQUIREMENT OF SECTION 143(2) HAS BEEN MET AS TWO QUESTIONNAIRES HAVE BEEN ISSUED IN THIS CASE FIXING THE DATES OF HEARING. THUS HIS FINDING IS THAT THE QUESTIONNAIRES AMOUNT TO NOTICES U/S 14 3(2). IT IS AN ACCEPTED POSITION THAT THESE QUESTIONNAIRES WERE ISSUED A ND SERVED AFTER THE FILING OF THE RETURN U/S 153A. THEREFORE IF THESE A RE NOTICES U/S 143(2) THEN THE CASE OF THE LD. COUNSEL DOES NOT SURVIVE. W E ARE OF THE VIEW THAT THE ARGUMENTS ADVANCED BY THE LD. COUNSEL AND THE LD. DR DO NOT FULLY ADDRESS ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 18 TO THIS FUNDAMENTAL ISSUE. THEREFORE WE HAVE T AKEN RECOURSE TO THE DISCUSSION ON THE SUBJECT MADE IN THE LAW & PRA CTICE OF INCOME-TAX BY KANGA PALKIWALA AND VYAS 9 TH EDITION VOLUME-II AT PAGES 1743 AND 1744. IN THIS DISCUSSION A MENTION HAS BEEN MA DE ABOUT THE DECISION IN THE CASE OF RAJMANI DEVI VS. CIT (1937) 5 ITR 631 (ALL.) WHICH IS DIRECTLY ON THE POINT. AS WE ARE MAKING REF ERENCE TO THE COMMENTARY AND THE CASE LAW WE THINK IT NECESSARY TO REPRO DUCE THE RELEVANT PORTION. PARAGRAPH 10 OF THE COMMENTARY READS AS UNDER: - 10. SUB-SECTION (2): NOTICE TO ATTEND OR PRODUCE EVIDENCE THE PROVISIONS OF THIS SUB-SECTION ARE MANDATORY . IF THE AO HAS MADE AN ASSESSMENT UNDER SUB-S (1) WHICH IS OBJECTED TO BY THE ASSESSEE (SALIMULLAH V CIT 218 ITR 74 [D OES NOT AUTOMATICALLY CANCEL ASSESSMENT]) OR WHETHER OR NOT AN ASSESSMENT HAS BEEN MADE UNDER SUB-S (1) THE AO CONSIDERS IT NECESSARY OR EXPEDIENT TO VERIFY THE CORREC TNESS AND COMPLETENESS OF THE RETURN HE IS BOUND TO SERVE A NOTICE UNDER THIS SUB-SECTION ON THE ASSESSEE REQUIRIN G HIM ON A SPECIFIED DATE EITHER TO ATTEND AT THE AOS O FFICER OR TO PRODUCE OR CAUSE TO BE PRODUCED ANY EVIDENCE ON WHICH THE ASSESSEE DESIRE TO RELY IN SUPPORT OF HIS RETUR N. (RATTANLAL V CIT 97 ITR 533; CIT V GYAN 165 ITR 501; RAJMANI V CIT 5 ITR 631; MOHAMMED HAYAT V CIT 5 ITC 159 167; DHUNICHAND V CIT 2 ITC 188; NIRMAL V SEC OF STAT E 2 ITC 20. IN THE LAST MENTIONED CASE GREAVES J OPI NED THAT THE ASSESSEE MAY WAIVE NOTICE REQUIRED TO BE GIVEN UN DER THIS SUB-SECTION). THE ONLY REQUIREMENT FOR THE ISSUE O F THE NOTICE IS A SATISFACTION ON THE PART OF THE AO THAT IT IS NECESSARY OR EXPEDIENT TO VERIFY THE CORRECTNESS AND COMPLETENE SS OF THE RETURN FILED BY THE ASSESSEE. (CIT V KRISHNARJUNAN 225 ITR ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 19 510; CIT V UNNIKRISHNAN 229 ITR 574 [S 143(2) NOT COMPARABLE TO S 147]). FURTHER SUCH NOTICE CAN BE ISSUED NOTWITHSTANDING THE FACT THAT ASSESSMENT WAS CO MPLETED UNDER THE SUMMARY ASSESSMENT SCHEME AS NOTIF IED BY THE BOARD. (OM TRADING V SECOND ITO 188 ITR 641; DADAMCHAND V CIT 222 ITR 433). THE ONLY CASE I N WHICH THE AO HAS TO TAKE THE PREVIOUS APPROVAL OF TH E DEPUTY COMMISSIONER FOR ISSUING A NOTICE UNDER THIS SUB-SECTION IS WHERE HE HAS MADE AN ASSESSMENT UNDER SUB-S (1) WH ICH HAS BEEN ACCEPTED BY THE ASSESSEE. THE APPROVAL FRO M THE DEPUTY COMMISSIONER IS MANDATORY AND CANNOT BE PRESUMED TO HAVE BEEN GRANTED. (CIT V LADHARAM 245 ITR 340). WHERE THE AO HAS REASON TO BELIEVE THAT THE RE TURN IS FALSE INCORRECT OR INCOMPLETE HE CANNOT PURPORT TO COMPUTE THE INCOME UNDER THE PROVISO TO S 145(1) OR UNDER S 145(2) WITHOUT ISSUING A NOTICE UNDER THIS SUB-SECTION. (KESARIDAS V CIT 2 ITC 213; RAMPRATAP VS CIT 3 ITC 362). THE MEANING OF THIS SUB-SECTION IS THAT WHEN A RETURN IS MADE THE AO SHALL NOT REJECT IT AND TAKE SOME OTHER BASIS AS THE BASIS OF ASSESSMENT WITHOUT GIVING THE ASSESSEE AN OPPOR TUNITY TO APPEAR BEFORE HIM AND GIVE ANY EVIDENCE WHICH HE MA Y DESIRE TO GIVE. (HARMUKHRAI V CIT 3 ITC 198 206 PER RANKIN CJ.) THE CHOICE AS TO WHETHER THE ASSESSEE SHOULD A TTEND THE AOS OFFICE OR WHETHER HE SHOULD PRODUCE OR CAUSE TO BE PRODUCED ANY EVIDENCE IN SUPPORT OF HIS RETURN LIE S WITH THE ASSESSEE AND NOT WITH THE DEPARTMENT. A NOTICE U NDER THIS SUB-SECTION WHICH MERELY CALLS UPON THE ASSESSEE TO ATTEND THE AOS OFFICE AND DOES NOT GIVE HIM THE CHOI CE OF PRODUCING OR CAUSING TO BE PRODUCED ANY EVIDENCE ON WHICH HE MAY RELY IN SUPPORT OF THE RETURN IS THERE FORE INVALID. (RAJMANI V CIT 5 ITR 631). THE SUB-SECTION ITSE LF INDICATES THAT A GENERAL NOTICE CALLING UPON THE ASSESS EE TO APPEAR OR TO PRODUCE EVIDENCE OR CAUSE IT TO BE PRODUCED IS SUFFICIENT. HOWEVER IN SOME CASES IT HAS BEEN HELD THAT THE NOTICE ISSUED UNDER THIS SUB-SECTION SHOULD ORDINARILY SPECIFY THE POINTS UPON WHICH THE ASSESSEE HAS TO PRODUCE EVIDENCE (NIRMAL V SEC OF STATE 2 ITC 20 25 PER MUKERJI [GREAVE J D ISSENTING]) SPECIALLY WHERE THE AOS OBJECTION IS THAT THE AC COUNTS ARE ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 20 INCOMPLETE (CHAN LO CHUVAN V CIT 3 ITC 397 404) BUT NOT WHERE THE ACCOUNTS ARE FABRICATED OR COOKED FOR INCOME-TAX PURPOSES. (IBID) IF THE NOTICE CONTAINS A SMALL ERROR WHICH DOES NOT IN ANY WAY MISLEAD THE ASSESSEE IF W OULD NOT VITIATE THE NOTICE.( SEE S 139 UNDER VALIDITY O F NOTICE). [SEE S 292B AND S 1 UNDER ORDER OR NOTICE UNDER WRONG SECTION.] THE AOS POWER UNDER THIS SUB-SECTION IS NOT CONF INED TO ISSUING ONE NOTICE ONLY; HE MAY ISSUE FURTHER N OTICES REQUIRING THE ASSESSEE TO PRODUCE EVIDENCE ON SP ECIFIED POINTS. (RE LACHHMANDAS 2 ITC 1 3). NO FORM HA S BEEN PRESCRIBED FOR A NOTICE UNDER THIS SUB-SECTION. ( NOPCHAND V CIT 2 ITC 146). 4.1 THE RELEVANT PORTION OF THE JUDGMENT IN THE CA SE OF RAJMANI DEVI (SUPRA) READS AS UNDER:- THE NOTICE THAT WAS ISSUED IN THE PRESENT CASE IS PRINTED AT PAGE 12 OF THE CASE. IT IS AS FOLLOWS: TO ENABLE ME TO TEST THE CORRECTNESS OF THE RETURN MADE BY YOU UNDER SEC. 22 OF ACT XI OF 1922 FOR THE YEA R ENDING SHAIT SAMBAT 1988 I HEREBY REQUIRE YOU TO AT TEND IN PERSON ON OCTOBER 20 1932. IT IS ARGUED ON BEHALF OF THE ASSESSEE THAT THE RE WERE TWO IRREGULARITIES IN THIS NOTICE. THE FIRST I RREGULARITY IS THAT THE YEAR ENDING SHAIT SAMBAT 1988 WAS MENTIONED THOUGH THE CORRECT YEAR WHICH OUGHT TO HAVE BEEN MENTION ED WAS THE YEAR ENDING SHAIT SUDI 15 SAMBAT 1989. THE LEARN ED COMMISSIONER HAS RIGHTLY POINTED OUT THAT THIS DID NOT IN ANY WAY MISLEAD THE ASSESSEE AND WE MIGHT FURTHER MENTION THAT THE ASSESSEE DID APPEAR IN PERSON AND DID NOT LEDGE ANY PROTEST IN RESPECT OF THIS MISTAKE. MOREOVER THE DIFFERENCE IS ONLY THAT OF FIFTEEN DAYS AND THE ACCOUNT BOO KS SUCH AS WERE FURNISHED WERE IN RESPECT OF THE CORRECT YE AR ENDING ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 21 SHAIT SUDI 15 SAMBAT 1989. THE PROCEEDINGS IN CON NECTION WITH WHICH THE NOTICE WAS ISSUED RELATING TO THE YEAR ENDING SHAIT SUDI 15 SAMBAT 1989 AND THESE WERE THE ONLY PROCEEDINGS PENDING AT THAT TIME AND THE ASSESS EE KNEW PERFECTLY WELL WHAT ACCOUNT BOOKS HE WAS REQU IRED TO PRODUCE. WE ARE THEREFORE OF THE OPINION THAT THIS IRREGULARITY DOES NOT IN ANY WAY VITIATE THE N OTICE. THE OTHER IRREGULARITY IS A MORE SERIOUS IRREGUL ARITY AND IT IS THAT THE WORDS OR TO PRODUCE OR TO CAUSE TO BE THERE PRODUCED ANY EVIDENCE ON WHICH SUCH PERSON MAY RELY IN SUPPORT OF THE RETURN WERE SCORED OUT. THE CONTE NTION ON BEHALF OF THE ASSESSEE IS THAT OUT OF THE ALTER NATIVES PROVIDED IN SEC. 23(2) IF IT IS FOR HIM AND NOT FOR THE D EPARTMENT TO CHOOSE THE ALTERNATIVE. THERE ARE THREE ALTERNATI VES PROVIDED BY SEC. 23(2)- 1. TO ATTEND AT THE INCOME-TAX OFFICERS OFFICE. 2. TO PRODUCE ANY EVIDENCE ON WHICH THE ASSESSEE M AY RELY AND 3. TO CAUSE TO BE THERE PRODUCED ANY EVIDENCE ON WHICH THE ASSESSEE MAY RELY. IN THE PRESENT CASE THE INCOME-TAX OFFICE R DID NOT GIVE THE ASSESSEE THE OPTION OF CHOOSING ANY ONE OF TH E THREE ALTERNATIVES BUT ASKED THE ASSESSEE TO ATTEND THE INCOME-TAX OFFICERS OFFICE. THE LEARNED COMMISSIONER SAYS: IT IS THE INCOME-TAX OFFICER WHEN HE AR RIVED AT A CERTAIN FRAME OF MIND WHO IS REQUIRED TO GIVE A NOTICE AND IT IS FOR HIM I SUBMIT TO DECIDE WHICH OF TH E ALTERNATIVES HE WILL CHOOSE. IF HE THINKS THAT FOR HIS PURPOSE S IT WILL BE ENOUGH THAT THE ASSESSEE CAME AND EXPLAINED HOW H E HAD MADE OUT THE RETURN THERE IS NO REASON WHY HE SHOULD EN FORCE THE OTHER ALTERNATIVE PARTICULARLY WHEN HE KNOWS THAT SUCH AN EXPLANATION WOULD BE SUPPLEMENTED BY THE ACCOUNTS H E HAD REQUIRED THE ASSESSEE UNDER SEC. 22(4) TO PRODUCE. IT IS THE INCOME-TAX OFFICER WHO HAS IN A CERTAIN FRAME OF M IND TO ISSUE THE NOTICE AND THE ALTERNATIVES WOULD APPEAR TO BE INTENDED FOR HIM. ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 22 THERE IS NO QUESTION OF ENFORCING THE OTHER ALTERNA TIVES. THE QUESTION IS WHETHER IT IS NOT THE PRIVILEGE OF THE ASSESSEE TO CHOOSE ONE OF THE SEVERAL ALTERNATIVES PROVIDED BY THE SECTION. IF THE CONTENTION OF THE DEPARTMENT WERE CORRECT T HEN THE WORD EITHER' OUGHT MORE APPROPRIATELY TO HAVE OCCURRED AT A DIFFERENT PLACE AND THE SECTION MIGHT READ AS FOLLO WS :- HE SHALL SERVE ON THE PERSON WHO MADE THE RETURN A NOTICE EITHER REQUIRING HIM ON A DATE TO BE THEREIN SPECIFIED TO ATTEND .OR.. . BUT AS THE SECTION READS THE ALTERNATIVES SEEM TO B E FOR THE BENEFIT OF THE ASSESSEE WHO HAS GOT TO CHOOSE A S TO WHICH OF THE OPTIONS HE WILL EXERCISE. THIS IS ALSO MORE REA SONABLE. THE ASSESSEE HAS SUBMITTED HIS RETURN AND THE INCOME-TA X OFFICER HAS REASON TO BELIEVE THAT THE RETURN IS INCORRECT OR INCOMPLETE AND ALTHOUGH THE INCOME-TAX OFFICER MAY BE OF THE O PINION THAT THE EXPLANATIONS FURNISHED BY THE ASSESSEE MIGHT RE MOVE THE OFFICER'S SUSPICION YET THE ASSESSEE MIGHT FEEL TH AT NO AMOUNT OF EXPLANATIONS FURNISHED BY HIM WOULD REMOVE THE D OUBTS OF THE OFFICER AND IT WOULD BE NECESSARY FOR HIM TO P RODUCE SOME EVIDENCE IN SUPPORT OF THE RETURN AND IF THE NOTIC E DIRECTED ONLY THE ATTENDANCE OF THE ASSESSEE THE LATTER WOULD NOT BE ABLE TO PRODUCE VALUABLE EVIDENCE. IT MAY ALSO BE THAT THE ASSESSEE MIGHT FIND IT EXTREMELY INCONVENIENT TO ATTEND IN P ERSON AND AT THE SAME TIME MIGHT FEEL THAT THE OFFICER COULD BE GIVEN EVERY SATISFACTION BY THE PRODUCTION OF SOME EVIDENCE. FR OM EVERY POINT OF VIEW WE ARE OF THE OPINION THAT THE LAW I NTENDED TO GIVE THE OPTIONS TO THE ASSESSEE AND NOT TO THE DEP ARTMENT. IT WAS CONTENDED BY MR. VARMA ON BEHALF OF THE DEPARTM ENT THAT IF THE LAW WERE INTERPRETED IN THE WAY IN WHICH WE FEEL INCLINED TO INTERPRET IT THE POSITION WOULD BECOME UNWORKAB LE. HE SAID THAT IF THE OPTION WERE WITH THE ASSESSEE THEN UND ER CERTAIN CIRCUMSTANCES THERE COULD BE NO DEFAULT IN COMPLIAN CE WITH A NOTICE UNDER SEC. 23(2) AND THE INCOME-TAX OFFICER COULD NEVER PROCEED TO PASS A BEST JUDGMENT ASSESSMENT. THE ILL USTRATION THAT HE GAVE WAS THAT THE ASSESSEE WHO ADMITTEDLY K EEPS NO ACCOUNTS AND WHOSE CALLING DO NOT NECESSARILY INVOL VE THE ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 23 KEEPING OF ACCOUNTS MIGHT ON A NOTICE ISSUED UNDER SEC. 23(2) DECIDE TO ATTEND AT THE INCOME-TAX OFFICER'S OFFICE AND NOT TO PRODUCE ANY EVIDENCE WITH THE RESULT THAT EVEN THOU GH THE INCOME-TAX OFFICER MAY NOT BE SATISFIED WITH THE EX PLANATION OF THE ASSESSEE THE INCOME-TAX OFFICER WOULD NOT BE AB LE TO SAY THAT THERE WAS NON-COMPLIANCE WITH THE NOTICE AND W OULD HAVE TO PROCEED UNDER SEC. 23(2) AND IN THAT CASE HE WO ULD BE COMPELLED TO ACCEPT THE RETURN FILED BY THE ASSESSE E. THERE IS REALLY NO SUBSTANCE IN THIS CONTENTION BECAUSE FIR ST IT WAS NEVER INTENDED THAT THE INCOME-TAX OFFICER SHOULD INVOKE THE POWERS VESTED IN HIM UNDER SEC. 23(4) IN THE MAJORITY OF C ASES AND FURTHER IF THE ASSESSEE CHOOSES NOT TO PRODUCE ANY EVIDENCE IN SUPPORT OF THE RETURN IT MIGHT REALLY WORK TO THE D ETRIMENT OF THE ASSESSEE BECAUSE THEN THE INCOME-TAX OFFICER MIGHT UTILISE THE INFORMATION WHICH HE HAS RECEIVED ABOUT THE INCOME OF THE ASSESSEE AND MIGHT PLACE THAT INFORMATION BEFORE TH E ASSESSEE AND ASK HIM TO DISPLACE THE SAME. THE INCOME-TAX OF FICER MIGHT WELL SUMMON CERTAIN WITNESSES UNDER SEC. 37 O F THE ACT TO SHOW WHAT THE INCOME OF THE ASSESSEE IS AND ON T HE BASIS OF THAT EVIDENCE-THE ASSESSEE BEING GIVEN THE OPTION T O CROSS- EXAMINE SUCH WITNESSES -PROCEED TO ASSESS THE INDIV IDUAL ON AN INCOME HIGHER THAN THAT STATED IN THE RETURN AND PU BLIC REVENUES WOULD NOT IN ANY WAY SUFFER. FURTHER THE SAME DIFFI CULTIES WOULD ARISE IF THE OPTION WERE WITH THE OFFICER. HE MIGHT DECIDE TO ASK THE ASSESSEE TO ATTEND IN PERSON OR HE MIGHT DECIDE TO ASK THE ASSESSEE TO PRODUCE EVIDENCE IN SUPPORT OF THE RETURN AND IN EITHER EVENT IT IS CONCEIVABLE THAT THE INCOME-TAX OFFICER MAY REMAIN UNSATISFIED AND IF THE INCOME-TAX OFFICER K NOWS THAT THE ASSESSEE KEEPS NO ACCOUNTS HE WOULD NOT ISSUE A NOT ICE UNDER SEC. 22(4) AND HE WILL HAVE TO PROCEED UNDER SEC. 2 3(3). IT SEEMS TO US THAT IF THE INCOME-TAX OFFICER WERE THE FINAL JUDGE IN THE MATTER OF THE ALTERNATIVES IT WOULD WORK GRE AT HARDSHIP ON THE ASSESSEE AND THE ASSESSEE IN THOSE CASES IN WHI CH THE INCOME-TAX OFFICER REQUIRES ONLY THE ATTENDANCE OF THE ASSESSEE MIGHT LOSE THE VALUABLE RIGHT OF PRODUCING THE EVID ENCE IN SUPPORT OF THE RETURN AND REMOVING THE DOUBTS OF TH E OFFICER. OUR ANSWER TO THE FIRST QUESTION IS THEREFORE IN T HE AFFIRMATIVE. ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 24 5. HAVING CONSIDERED THE SUBMISSIONS OF THE PARTI ES WE THINK IT FIT TO DWELVE UPON THE PROVISION CONTAINED IN SECTION 143(2)(II) APPLICABLE TO THE FACTS OF THIS CASE. FOR MAKING SCRUTINY A SSESSMENT THE REQUIREMENT MENTIONED IN THIS PROVISION IS THAT THE AO SHALL SERVE ON THE ASSESSEE A NOTICE REQUIRING HIM ON THE DATE TO BE SPECIF IED THEREIN EITHER - (I) TO ATTEND HIS OFFICE; OR (II) TO PRODUCE ANY EVIDENCE ON WHICH THE ASSES SEE MAY RELY IN SUPPORT OF THE RETURN; OR (III) CAUSE TO BE PRODUCED ANY EVIDENCE ON WHICH THE ASSESSEE MAY RELY IN SUPPORT OF THE RETURN. 5.1 FIRSTLY THERE IS SOME CONTROVERSY AS TO WHE THER A GENERAL NOTICE WOULD SUFFICE OR IT HAD TO BE A SPECIFIC NOTICE. THE GENERALLY ACCEPTED POSITION OF THE LAW IS THAT A GENERAL NOTICE CAL LING UPON THE ASSESSEE TO APPEAR OR TO PRODUCE EVIDENCE OR CAUSE THE EVI DENCE TO BE PRODUCED IS SUFFICIENT. HOWEVER IN THE CASE OF NIRMAL V SEC RETARY OF STATE 2 ITC 20 IT HAS BEEN HELD THAT THE NOTICE SHOULD ORDINARI LY SPECIFY THE POINT ON ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 25 WHICH THE ASSESSEE HAS TO PRODUCE THE EVIDENCE ALTHOUGH A DISSENTING JUDGMENT WAS WRITTEN BY GREAVES J. THUS WHAT CAN BE SAID IS THAT A SPECIFIC NOTICE STANDS ON BETTER FOOTINGS THAN A GENERAL NOTICE. THEREFORE THE POSITION OF LAW IN THIS REGARD IS THAT IF TH E ASSESSEE HAS BEEN GIVEN AN OPPORTUNITY TO DO ANY OF THE THREE ALTERNATIVES AS THE CONJUNCTION USED IS OR AND THE DATE AND PLACE OF COMPLIANCE ARE M ENTIONED IT WILL BE A VALID NOTICE U/S 143(2). ALTHOUGH THE ISSUE WAS DECIDED AGAINST THE REVENUE IN THE CASE OF RAJMANI DEVI BUT THAT W AS ON ACCOUNT OF THE FACT THAT THE ASSESSEE WAS PRECLUDED FROM EXERCISING TWO OF THE ALTERNATIVES. IT ALSO APPEARS THAT THE POSITION OF LAW U NDER THE 1922 ACT WAS SOMEWHAT DIFFERENT AS THE CONJUNCTION AND WA S USED BETWEEN SECOND AND THIRD ALTERNATIVES. IN THE INSTANT CASE T HE STATUTORY PROVISION IS CLEAR AS THE CONJUNCTION USED IS OR UNIFORMALLY. THER EFORE FURNISHING OF ANY OF THE THREE ALTERNATIVES TO THE ASSESSEE WOULD S UFFICE THE CONDITION OF A VALID NOTICE IF DATE AND PLACE ARE ALSO MENTION ED IN THE NOTICE. IN THE QUESTIONNAIRE DATED 7.12.2007 THE PLACE HAS BEE N MENTIONED AND THE DATE OF COMPLIANCE HAS ALSO BEEN MENTIONED. FURTHER IT HAS BEEN MENTIONED THAT THE COMPLIANCE TO THE POINTS RAISED MAY BE M ADE IN PERSON OR THROUGH AUTHORIZED REPRESENTATIVE. THUS ACCORDING TO US OPPORTUNITIES AS PER SECOND AND THIRD ALTERNATIVES HAVE BEEN GRANTED T O THE ASSESSEE. AS ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 26 MENTIONED EARLIER THE WIDELY ACCEPTED PROPOS ITION OF LAW IS THAT A GENERAL NOTICE WOULD SUFFICE. HOWEVER A DIFF ERENT VIEW WAS TAKEN IN THE CASE OF NIRMAL V SECRETARY OF STATE IN WHICH IT WAS HELD THAT THE NOTICE SHOULD ORDINARILY SPECIFY THE POINTS IN R ESPECT OF WHICH THE ASSESSEE HAS TO PRODUCE EVIDENCE. THE OBJECTION I N THIS CASE WAS THAT THE NOTICE WAS GENERAL IN NATURE. OBVIOUSLY SUCH A N OBJECTION CANNOT BE TAKEN IN THIS CASE AS THE AO SPECIFIED THE PO INTS IN RESPECT OF WHICH EVIDENCE WAS TO BE PRODUCED OR WAS CAUSED TO BE PRODUCED. THEREFORE WE ARE OF THE VIEW THAT THIS NOTICE AMOUNTS TO C OMPLIANCE OF THE MANDATORY REQUIREMENT OF THE PROVISION CONTAINED IN SECTION 143(2)(II). AS THE NOTICES HAVE BEEN SERVED AFTER THE FILING T HE RETURN MAKING A REFERENCE TO IT IN THE NOTICES WOULD AMOUNT TO ST ATING THE OBVIOUS FACT WHICH IS NOT NECESSARY ACCORDING TO US. 5.2 THE LD. DR HAS RAISED A FRESH PLEA IN DEF ENCE OF THE ORDER OF THE LD. CIT(A) THAT SINCE THE RETURN HAS NOT BEEN FILED W ITHIN THE PRESCRIBED TIME IT IS NON-EST AND THEREFORE THE ASSESSMENT IS MADE U/S 144 READ WITH SECTION 153A. THE CASE OF THE LD. COUNSEL IS THA T NO SUCH FINDING HAS BEEN GIVEN BY ANY OF THE LOWER AUTHORITY AND THUS T HE ARGUMENT IS A LEAP IN THE DARK. WE REALLY DO NOT AGREE WITH HER IN T HIS REGARD. THE REVENUE IS ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 27 A DEFENDANT IN THIS CASE AND IT CAN TAKE UP A NY LEGAL PLEA TO DEFEND THE ORDER OF THE LD. CIT(A) PROVIDED THAT NO FRESH FACT IS REQUIRED TO BE FOUND TO FURNISH A DECISION IN RESPECT OF THE PLEA. THIS FOLLOWS CLEARLY FROM THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CAS E OF B.R.BAMSI VS. CIT (1972) 83 ITR 223. THIS ALSO FOLLOWS FRO M THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF HUKUM CHAND MILLS LTD. VS. CIT 63 ITR 232 IN WHICH THE DEFENDANT REVENUE W AS NOT ONLY ALLOWED TO RAISE THE ADDITIONAL PLEA BUT THE AO WAS ALSO DIRECTED TO FIND FACTS REGARDING THE CLAIM OF DEPRECIATION. AS THE FA CTS REGARDING THE DATE OF NOTICE AND FILING OF THE RETURN ARE ON RECOR D THEREFORE THE ARGUMENT OF THE LD. DR IS NOT A LEAP IN THE DARK BUT A PLEA BASED ON FACTS. THEREFORE HE IS ENTITLED TO TAKE SUCH A PLEA. HOWEVER WE NEED NOT GO INTO THE MERITS OF THIS ISSUE FOR THE REASON THA T WE HAVE ALREADY HELD THAT REQUIREMENTS OF SECTION 143(2) HAVE BEEN MET IN TH IS CASE. 5.3 BEFORE PARTING WE MAY MENTION HERE THAT OUR CONCLUSION REGARDING COMPLIANCE OF THE PROVISION CONTAINED IN SECTION 143(2) CAN BE ARRIVED INDEPENDENT OF THE REFERENCES TO THE COMMENTARY AND THE DECISION IN THE CASE OF RAJMANI DEVI ON PLAIN READING OF THE PRO VISION. ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 28 5.4 THE RESULT OF AFORESAID DISCUSSION IS THAT TH IS GROUND ARISING IN VARIOUS YEARS TAKEN UP BY THE ASSESSEE IS DIS MISSED. 6. IN REGARD TO THE TWO GROUNDS TAKEN BY THE R EVENUE IN ITS APPEAL IT IS MENTIONED IN THE IMPUGNED ORDER THAT DURING T HE COURSE OF SEARCH AT THE RESIDENCE OF THE ASSESSEE A DOCUMENT WAS F OUND REGARDING PLOT NO. 251 NANGLI SAKHRUWATI NAJAFGARH WHICH WAS VA LUED AT RS. 22 41 141/- BY SHRI GAUTAM AKHOURI IN HIS REPORT DATED 15.1 0.2000. THE ASSESSEE WAS REQUIRED TO EXPLAIN THE SOURCE OF INVESTMENT IN THE PROPERTY. IT WAS INTER-ALIA SUBMITTED THAT THE PROPERTY DOES NOT BELONG TO THE ASSESSEE BUT TO HIS WIFE SMT. JYOTI CHADHA AS SOLE OWNER. THE PROPERTY WAS PURCHASED FOR A SUM OF RS. 50 000/- AND THE CORR ESPONDING DEED WAS REGISTERED IN THE OFFICE OF SUB-REGISTRAR AT SERI AL NO. 2784 ADDITIONAL BOOK NO. 1 VOLUME 351 AT PAGES 83 TO 87 ON 26.8.2000 . THIS PROPERTY WAS GOT VALUED FOR THE PURPOSE OF TAKING BANK LOAN. SH E DECLARED THIS PROPERTY IN THE STATEMENT OF HER AFFAIRS AS ON 31.3.20 01 AT RS. 58 000/-. ON THESE FACTS THE FINDINGS OF THE LD. CIT(A) WERE T WO-FOLD-(I) NOTHING COULD BE ADDED AS UNDISCLOSED INVESTMENT IN THE HANDS OF T HE ASSESSEE AS THE PROPERTY DID NOT BELONG TO HIM (II) ANY ACTIO N IN REGARD TO TAXING ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 29 UNDISCLOSED INVESTMENT WILL ARISE ONLY IN THE C ASE OF SMT. JYOTI CHADHA THE OWNER OF THE PROPERTY. 6.1 BEFORE US THE LD. DR RELIED ON THE ORDER OF THE AO. IN REPLY THE LD. COUNSEL SUPPORTED THE ORDER OF THE LD. CIT(A) . IT HAS BEEN SUBMITTED THAT THE PROPERTY BELONGS TO SMT. JYOTI CHADHA AND THERE IS NO EVIDENCE THAT IT BELONGS TO THE ASSESSEE. SINCE THE DOC UMENT BELONGS TO SMT. JYOTI CHADHA ANY ACTION IN THIS REGARD WILL LIE IN H ER HAND. 6.2 WE HAVE CONSIDERED THE FACTS OF THE CASE. IN THE ASSESSMENT ORDER IT IS MENTIONED THAT THE PROPERTY HAS BEEN VALUED AT RS. 22 41 141/- AND THEREFORE ITS ACTUAL VALUE IS THIS AMOU NT AND NOT RS. 50 000/-. FROM THE RETURNS OF SMT. JYOTI CHADHA IT IS C LEAR THAT SHE DOES NOT HAVE THE CAPACITY TO INVEST RS. 22 41 141/- IN T HE PROPERTY. SHE HAS ALSO NOT SHOWN TO HAVE TAKEN ANY LOAN FOR THIS PURPO SE. SHE HAS MADE ADVANCES OF FURTHER AMOUNTS OF RS. 22 51 000/- AND RS. 6 70 000/-. EVEN IF IT IS ASSUMED THAT SHE INVESTED A SUM OF RS. 22 41 141/- IN THE PROPERTY SHE WOULD BE LEFT IN NO POSITION TO ADVANCE THE AFORESAID AMOUNT TO THE ASSESSEE. IN VIEW THEREOF THE SUM OF RS. 22 41 141/- WAS TAXED AS THE INCOME OF THE ASSESSEE U/S 69. ON GOING THROUGH THESE FINDINGS IT IS CLEAR ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 30 THAT THE AO HAS NOT BROUGHT ON RECORD ANY EVIDE NCE TO SHOW THAT INVESTMENT IN THE PROPERTY WAS MADE BY THE ASSE SSEE. THE CONCLUSION IS BASED ON CIRCUMSTANTIAL EVIDENCE ONLY. ON THE OTHER HAND IT IS THAT SHE HAS BEEN FILING HER INCOME-TAX RETURN AND INVES TMENT IN THE PROPERTY WAS SHOWN AT RS. 58 000/-. THIS IS IN CONSONANCE W ITH THE REGISTERED DEED SIGNED BEFORE THE SUB-REGISTRAR. THERE WILL ALW AYS BE A DIFFERENCE BETWEEN PURCHASE CONSIDERATION AND DETERMINATIO N OF THE VALUE OF A PROPERTY ON A CERTAIN DATE. ALTHOUGH THE SUBSTA NTIAL DIFFERENCE IN A SMALL PERIOD DOES LEAD TO A PRESUMPTION OF SU PPRESSION OF PURCHASE CONSIDERATION BUT SUCH A PRESUMPTION IS AT BEST A REBUTABLE PRESUMPTION. IN ANY CASE SUCH A PRESUMPTION CAN BE DRAWN ONLY IN CASE OF SMT. JYOTI CHADHA AS NO EVIDENCE WHATS OEVER HAS BEEN FOUND THAT THE ASSESSEE INVESTED ANY AMOUNT IN THIS PR OPERTY. THEREFORE WE ARE OF THE VIEW THAT THE LD. CIT(A) WAS RIGHT IN HO LDING THAT NO ADDITION COULD HAVE BEEN MADE IN THE HANDS OF THE ASSESSEE. AT THE SAME TIME HE HAS GRANTED LIBERTY TO THE REVENUE TO TAKE ANY ACTION FEASIBLE IN LAW IN THE CASE OF SMT. JYOTI CHADHA AND IN THIS CONNECTIO N HE HAS REFERRED TO THE PROVISIONS CONTAINED IN SECTION 153-C. WE DO NOT FIND ANY ERROR IN THIS FINDING ALSO. ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 31 ITA NO.1458(DEL)/2009- A.Y. 2004-05- APPEAL OF THE REVENUE ITA NO. 1266(DEL)/2009- A.Y. 2004-05- APPEAL OF THE ASSESSEE 7. GROUND NO. 1 IS THAT THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 73 50 000/- MADE BY THE AO U/S 69 IN RESP ECT OF INVESTMENT IN PLOT OF LAND ON THE BASIS OF SEIZED MATERIAL. THE FACTS MENTIONED IN THIS CONNECTION IN THE IMPUGNED ORDER ARE THAT IN T HE COURSE OF SEARCH DOCUMENTS WERE SEIZED SHOWING INVESTMENT IN PL OT ALLOTTED BY HARYANA URBAN DEVELOPMENT AUTHORITY (HUDA FOR SHORT) TO RO OPWELL CONVERTERS A CONCERN BELONGING TO THE HUF OF M/S JYOTI CHAD HA AN EXISTING ASSESSEE. IT WAS SUBMITTED THAT NO ADDITION COULD BE MADE IN THE HANDS OF THE ASSESSEE AS THE PROPERTY DID NOT BELONG T O HIM. INVESTMENT IN THE PROPERTY WAS ONLY RS. 7 35 000/- BECAUSE ONLY 1 0% OF THE TOTAL VALUE HAD BEEN PAID AS BOOKING AMOUNT BY M/S ROOPWELL CONVE RTERS AND THUS THERE IS NO REASON TO MAKE THE ADDITION OF RS. 73 50 000/-. EVEN THE ADDITION OF RS. 7 35 000/- IS NOT REQUIRED TO BE MADE AS THE INVESTMENT STANDS EXPLAINED FROM THE RECORD OF INCOME-TAX DEPARTMENT. THE LD. CIT(A) CONSIDERED THE FACTS OF THE CASE AND SU BMISSIONS MADE BEFORE HIM. IT IS MENTIONED THAT THE INVESTMENT IS IN A PLOT OF LAND AND NOT IN A FLAT AS MENTIONED BY THE AO. THE SEIZED DOCUMEN T IS ADDRESSED TO M/S ROOPWELL CONVERTERS STATING INTER-ALIA THAT A PLOT OF LAND ADMEASURING ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 32 2100 SQ. MTS. HAS BEEN ALLOTTED @ RS. 3 500/- PER SQ. MT. AND THE TENTATIVE PRICE IS RS. 73 50 000/-. THE BOOKING AMOUNT OF R S. 7 35 000/- HAS BEEN ADJUSTED AGAINST THE AFORESAID PRICE AND THE ALLOTTEE HAS BEEN REQUIRED TO PAY A FURTHER SUM OF RS. 11 02 500/- WITHIN 30 DAYS OF ISSUE OF ALLOTMENT LETTER SO AS TO BRING THE AMOUNT PAID TO 25% OF THE TOTAL TENTATIVE PRICE. THE BALANCE AMOUNT OF RS. 55 12 500/- IS PERMITTED TO BE PAID IN LUMP SUM WITHOUT ANY INTEREST OR IN FIVE HALF-YEARLY INSTALLMENTS WITH INTEREST. THE BALANCE-SHEET OF M/S JYOTI C HADHA HUF SHOWS INVESTMENT OF RS. 18 72 000/- ON 31.3.2004 WHICH CONSISTS OF THE EARNEST MONEY AND THE FURTHER AMOUNT PAID. IT HAS BEEN HELD THAT AS THE PROPERTY DOES NOT BELONG TO THE ASSESSEE BUT CLEARLY BELO NGS TO M/S JYOTI CHADHA HUF NO ADDITION COULD BE MADE IN THE HANDS OF THE ASSESSEE. THERE IS ALSO A PRIMA FACIE MISTAKE IN MAKING THE ADD ITION OF RS. 73 58 000/-. THUS THE ADDITION MADE BY THE AO HAS BEEN DELE TED. THE REVENUE HAS BEEN GIVEN LIBERTY TO CONSIDER THE INVESTMENT IN THE HANDS OF THE HUF. 7.1 BEFORE US THE LD. DR RELIED ON THE ORDER O F THE AO WHILE LD. COUNSEL RELIED ON THE ORDER OF THE LD. CIT(A). ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 33 7.2 IN THE ASSESSMENT ORDER IT HAS BEEN MENTION ED THAT SEIZED MATERIAL CONTAINS A LETTER OF ALLOTMENT BY HUDA TO M /S ROOPWELL CONVERTERS DATED 11.8.2003 SHOWING THE PRICE AT RS. 73 50 000/-. IT HAS BEEN SUBMITTED THAT THE PROPERTY BELONGS TO M/S JYO TI CHADHA HUF WHICH IS A REGULAR TAX-PAYER. THE RETURN OF THIS HUF S HOWS TOTAL INCOME OF RS. 72 000/- ONLY FOR ASSESSMENT YEAR 2001-02. THE INCOME FOR ASSESSMENT YEARS 2002-03 2003-04 & 2004-05 ARE RS. 72 000 /- RS. 11 882/- AND RS. 64 633/-. THEREFORE THE HUF DOES NOT HAVE CAPA CITY TO INVEST EVEN A SUM OF RS. 7 35 000/- BY WAY OF EARNEST MONEY. T HE ASSESSEE IS THE KARTA OF M/S JYOTI CHADHA HUF WHO HAS TO EXPLAIN THE SOURCE OF INVESTMENT. IN ABSENCE OF SATISFACTORY EXPLANATION THE AM OUNT IS ADDED IN THE HANDS OF THE ASSESSEE. 7.3 IT IS A MATTER OF FACT ON RECORD THAT THE PROPERTY BELONGS TO M/S JYOTI CHADHA HUF A REGULAR ASSESSEE WHO HA S SHOWN INVESTMENT IN ITS RETURN OF INCOME. NO DOUBT THE INCOMES RE TURNED BY THE HUF IN VARIOUS YEARS DO NOT EVOKE CONFIDENCE THAT IT COULD INVEST THE AMOUNT OUT OF ITS OWN INCOME BUT THE SOURCE OF INVESTME NT COULD BE OTHER THAN ITS OWN INCOME. IN ANY CASE NO EVIDENCE HAS BEEN BROUGHT ON RECORD TO SHOW THAT THE ASSESSEE INVESTED ANY AMOUNT IN ACQUISITION OF THE PLOT OF ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 34 LAND FROM HUDA. THEREFORE WE DO NOT FIND A NY ERROR IN THE ORDER OF THE LD. CIT(A) ESPECIALLY WHEN HE HAS GIVEN LIBERTY TO THE REVENUE TO TAKE ACTION AS PER LAW IN THAT CASE. 8. GROUND NO. 2 IS AGAINST THE DELETION OF ADD ITION OF RS. 10.00 LAKH MADE BY THE AO U/S 68 IN RESPECT OF THE BANK AC COUNT OF THE ASSESSEE. IN THIS CONNECTION IT IS MENTIONED IN THE IMPUGNED ORDER THAT THE AO MADE THE ADDITION IN RESPECT OF TWO SUMS OF RS. 5.0 0 LAKH EACH FOUND CREDITED IN THE BANK ACCOUNT OF THE ASSESSEE ON 13.1.20 04 AND 15.1.2004. IT WAS SUBMITTED BEFORE THE AO THAT THESE AMOUNTS WERE RECEIVED BY WAY OF CHEQUE NOS. 613068 & 613069 FROM PRAGATI INTE RNATIONAL PVT. LTD. THIS EXPLANATION WAS FURNISHED BY WAY OF ADDITIONAL EVIDENCE. THE AO DID NOT CONTROVERT THE ADDITIONAL EVIDENCE. THER EFORE THE ADDITION WAS DELETED. BEFORE US THE LD. DR RELIED ON THE O RDER OF THE AO WHILE THE LD. COUNSEL RELIED ON THE ORDER OF THE LD. CIT(A). 8.1 IN THE ASSESSMENT ORDER IT IS MENTIONED THAT TWO SUMS AS AFORESAID WERE FOUND CREDITED IN THE BANK ACCOUNT OF THE ASSESSEE WITH THE NARRATION PIPL AND A DEBIT ENTRY OF RS. 10. 00 LAKH WAS MADE ON 15.1.2004 WITH THE NARRATION BABA INTL. IN A BSENCE OF ANY PROOF ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 35 REGARDING NATURE AND SOURCE OF THE CREDIT THE AMO UNT WAS BROUGHT TO TAX U/S 68. ON CONSIDERATION OF THE TWO ORDERS IT IS SEEN THAT THE AMOUNT WAS ADDED BY THE AO IN ABSENCE OF ANY EXPLANATION. HOWEVER ADDITIONAL EVIDENCE WAS FILED BEFORE THE LD. CIT(A) IN WHICH IT WAS SUBMITTED THAT THE AMOUNTS WERE RECEIVED BY WAY OF TWO CHEQUES F ROM PRAGATI INTERNATIONAL (P) LTD. THIS EVIDENCE WAS PUT TO THE AO FOR REPORT. IT HAS BEEN MENTIONED BY THE LD. CIT(A) THAT THE AO D ID NOT CONTROVERT THIS EVIDENCE. THUS THE SOURCE WAS HELD TO BE PRO PERLY EXPLAINED BY THE ASSESSEE. IN ABSENCE OF ANY EVIDENCE OR ARGUM ENT TO DISPLACE THIS FINDING OF THE LD. CIT(A) WE DO NOT FIND ANY REASON TO INTERFERE WITH HIS ORDER IN THIS MATTER. 9. GROUND NO. 3 IS STATED TO BE INCONSEQUENTIAL WHICH DEALS WITH THE PROVISION CONTAINED IN SECTION 153C. THUS IT DOE S NOT ACQUIRE ANY DECISION FROM US. 10. THE ASSESSEE HAS TAKEN TWO SUBSTANTIVE GROU NDS IN RESPECT OF NON- ISSUANCE OF NOTICE U/S 143(2) AND CONFIRMATION O F THE AMOUNT OF RS. 10.00 LAKH BEING CASH SEIZED FROM SHRI DALBIR SINGH RAWAT AN EMPLOYEE OF THE ASSESSEE. GROUND NO. 1 REGARDING NON-ISSUAN CE OF NOTICE U/S 143(2) ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 36 STANDS DECIDED AGAINST THE ASSESSEE AS PER OR DER IN C.O. NO. 144(DEL)/2009 (SUPRA). 11. COMING TO THE ADDITION OF RS. 10.00 LAKH I T IS MENTIONED IN THE IMPUGNED ORDER THAT SEIZED RECORDS REVEAL THAT A SUM OF RS. 10.00 LAKH WAS SEIZED FROM SHRI DALBIR SINGH RAWAT AN EMP LOYEE OF THE ASSESSEE AT BHOPAL RAILWAY STATION. THE EXPLANATION OF THE ASSESSEE IS THAT THIS MONEY BELONGS TO SHRI SUDHIR CHADHA THE NEPHEW WHO OWNS CHADHA SEED FARM POST CHAKLAVA KALADHONGI ROAD NANITA L. HE HAS SENT THIS MONEY IN CONNECTION WITH SOME PROPERTY TRANSACTIO N THROUGH SHRI RAWAT. IN ORDER TO SUPPORT THIS CLAIM A RECOVERY SU IT FILED BY HIM AT BHOPAL HAS BEEN FILED. THE AO HAS DRAWN ADVERSE INFERENC E AGAINST THE ASSESSEE ON THE GROUND THAT THE MONEY WAS FOUND IN POSSESSION OF THE EMPLOYEE OF THE ASSESSEE. IN SPITE OF THE CLAIM OF OWNERSHIP BY THE NEPHEW THE MATTER IS STILL PENDING FOR ADJUDICATION BEFORE THE RAILWA Y MAGISTRATE BHOPAL. THE ASSESSEE HAS NOT BEEN ABLE TO EXPLAIN AS TO W HY HIS EMPLOYEE WAS FOUND IN POSSESSION OF THE CASH. THEREFORE MER E DENIAL WITHOUT SUPPORTING EVIDENCE CANNOT BE ACCEPTED. THUS THE LD. CIT(A) UPHELD THE FINDING OF THE AO. ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 37 11.1 BEFORE US THE LD. COUNSEL REFERRED TO THE FI NDINGS OF THE LD. CIT(A) WHICH HAVE ALREADY BEEN SUMMARIZED BY US. SHE DR EW OUR ATTENTION TO ANNEXURE 4 WHICH IS A CLAIM MADE BY SHRI SUDHI R CHADHA BEFORE THE MAGISTRATE RAILWAY POLICE BHOPAL DATED 23.1.20 08. IT IS INTER-ALIA MENTIONED IN THIS CLAIM THAT HE IS CARRYING ON THE BUSINESS OF M/S CHADHA SEED FARM AGRICULTURAL EXPORT. SHRI DALBI R SINGH RAWAT IS A RELIABLE PERSON IN HIS EYE. HE HAD SENT HIM W ITH A SUM OF RS. 10.00 LAKH TO BHOPAL FOR PURCHASE OF LAND. THE RAILWAY POL ICE SEIZED THIS AMOUNT FROM HIM AT BHOPAL RAILWAY STATION WHILE SEARCHIN G HIM. THIS MONEY HAS SINCE THEN BEEN TAKEN OVER BY THE INCOME-TAX DE PARTMENT. THE SALE BILLS AND BANK ACCOUNT ARE ENCLOSED WHICH SHOW THE COMPLETE DETAILS OF THIS MONEY. HE IS THE OWNER OF THIS MONEY. HE WANTS T O TAKE OVER THIS MONEY TILL THE DECISION IN THE MATTER. THE COURT MAY DECIDE THE MATTER ACCORDINGLY. ON THE BASIS OF THE ANNEXURE IT IS HER CASE THAT THE MONEY DID NOT BELONG TO THE ASSESSEE BUT BELONGED TO SH RI SUDHIR CHADHA THE NEPHEW. IN REPLY THE LD. DR RELIED ON THE OR DER OF THE LD. CIT(A) AND BROUGHT ANOMALIES IN THE SUBMISSIONS OF THE ASSE SSEE TO OUR NOTICE. IT IS SUBMITTED THAT THE CLAIM MADE BY SHRI SUDHIR CHADHA CONTAINS AVERMENT ABOUT PURCHASE OF LAND AT BHOPAL. HOWEVER NO D ETAIL HAS BEEN FILED ABOUT THE LAND SOUGHT TO BE PURCHASED BY HIM. THE A MOUNT WAS SEIZED ON ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 38 OR ABOUT 20.4.2003 AS SEEN FROM TELEGRAM SE NT BY THANA PRABHARI GRP BHOPAL TO THE ASSESSEE. HOWEVER THE CLAI M HAS BEEN MADE ON 23.1.2008 MUCH AFTER THE DATE OF SEIZURE AND AFTER THE PASSING OF THE ASSESSMENT ORDER. THEREFORE THE CLAIM HAS BEEN MA DE ONLY TO ACCOMMODATE THE ASSESSEE. 11.2 WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS MADE BEFORE US. THE FACTS ARE THAT A SUM OF RS. 10.0 0 LAKH WAS SEIZED BY THANA PRABHARI GRP BHOPAL FROM SHRI DALBIR SI NGH RAWAT ON 20.4.2003. SHRI RAWAT IS AN EMPLOYEE OF THE AS SESSEE AND THEREFORE THE POLICE STATION SENT THE TELEGRAM TO THE ASSESS EE. IT BECOMES CLEAR FROM THIS CONDUCT OF THE THANA PRABHARI THAT SHRI RAWA T HELD OUT BEFORE HIM THAT THE MONEY BELONGS TO THE ASSESSEE. THEREAFTE R THE MONEY WAS TAKEN OVER BY THE INCOME-TAX DEPARTMENT U/S 132A. THE ASSESSEE OR SHRI SUDHIR CHADHA DID NOT DO ANYTHING FURTHER IN T HE MATTER TILL THE PASSING OF THE ASSESSMENT ORDER ON 31.12.2007. AFTER TH IS DATE SHRI SUDHIR CHADHA SUBMITTED A CLAIM THAT THE MONEY BELONGS TO HIM AND IT WAS SENT THROUGH SHRI RAWAT FOR PURCHASE OF SOME LAND THE DETAILS OF WHICH HAVE NOT BEEN MENTIONED. SHRI SUDHIR CHADHA HAS NOT BE EN PRODUCED FOR EXAMINATION BEFORE THE AO. NO PROPOSAL SEEMS TO HAVE BEEN MADE FOR ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 39 HIS PRODUCTION BEFORE THE LD. CIT(APPEALS). NO SUCH SUGGESTION HAS BEEN MADE EVEN BEFORE US. THEREFORE EVIDENCE ON RECORD SUGGESTS THAT THE CLAIM IS AN AFTERTHOUGHT MADE BY THE NEPHEW TO ACCOMMODATE THE ASSESSEE. IF THE MONEY REALLY BELONGED TO THE NEPH EW ACTION TO CLAIM THE MONEY WOULD HAVE BEEN TAKEN SOON AFTER ITS SEIZU RE BY THE POLICE. THEREFORE THE EVIDENCE ARISING VERY MUCH BELAT EDLY LACKS THE RING OF TRUTH IN IT. ANY PERSON OF NORMAL PRUDENCE WHIL E SEEING SUCH AN EVIDENCE WILL COME TO A CONCLUSION THAT IT IS ONLY AN ACCOMMODATING CLAIM. THEREFORE WE AGREE WITH THE LD. CIT(A) AND HOLD THAT THIS AMOUNT HAS BEEN RIGHTLY INCLUDED IN THE TOTAL INCOME O F THE ASSESSEE. ITA NO. 1459(DEL)/2009-A.Y. 2005-06- APPEAL OF THE REVENUE C.O. NO. 147(DEL)/09-A.Y. 2005-06-OBJECTION OF THE ASSESSEE 12. THE REVENUE HAS TAKEN TWO GROUNDS IN THE AP PEAL AGAINST ADDITION OF RS. 10.00 LAKH EACH MADE BY THE AO IN RESPECT OF INVESTMENT IN PLOT OF LAND AT NARELA AND FLAT IN VIKRANT TOWER. THE TH IRD GROUND REGARDING APPLICABILITY OF PROVISION U/S 153C IS STATED TO BE CONSEQUENTIAL IN NATURE. ON THE OTHER HAND THE ASSESSEE HAS TAKEN UP ON LY ONE GROUND CHALLENGING THE ASSESSMENT ORDER FOR NON-ISSUANC E OF NOTICE U/S 143(2). THIS GROUND STANDS CONCLUDED AGAINST THE ASSES SEE. ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 40 13. IN REGARD TO INVESTMENT IN PLOT NO. 2258 SECT OR 1 NARELA IT IS MENTIONED IN THE ASSESSMENT ORDER THAT AS PER A NNEXURE A-4 PAGE NOS. 10 TO 12 THE POSSESSION OF THE LAND WAS TAKEN BY SHR I ASHOK CHADHA THE DIRECTOR OF BENSON PACKAGING INDUSTRIES (P) LTD . IT WAS SUBMITTED BEFORE HIM THAT THIS COMPANY HAS BEEN CLOSED DOWN. HOWEVER THE ASSESSEE WAS NOT ABLE TO FURNISH THE DETAILS OF NA TURE AND SOURCE OF INVESTMENT IN THE PROPERTY. IN ABSENCE OF SUCH D ETAILS THE COST OF THE PLOT OF LAND WAS ESTIMATED AT RS. 10.00 LAKH @ RS. 4 000/- PER SQ.YD. AND THE AMOUNT WAS BROUGHT TO TAX IN THE HANDS OF THE A SSESSEE AS HIS UNDISCLOSED INVESTMENT. 13.1 BEFORE THE LD. CIT(APPEALS) IT HAS BEEN SUB MITTED THAT THE PLOT OF LAND WAS ACQUIRED BY THE COMPANY AND NOT BY HIM. THEREFORE ANY ACTION IN THIS BEHALF COULD BE TAKEN ONLY IN THE HANDS OF THE COMPANY UNDER THE PROVISIONS OF SECTION 153C(3) AND NOT IN THE HANDS OF THE ASSESSEE U/S 153C(1). IT APPEARS THAT ADDITIONAL EVIDENCE WAS FILED BEFORE HIM TO DEMONSTRATE THAT THE PROPERTY ACTUALLY BELONGED T O THE COMPANY. THIS EVIDENCE CONSISTED OF A RECEIPT DATED 30.12.19 96 SHOWING PAYMENT OF RS. 1 20 000/- TOWARDS ALLOTMENT OF THE PLOT OF LAND TO THE COMPANY. THE ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 41 LEDGER ACCOUNT OF THE COMPANY WAS ALSO FILED TO SHOW THAT A SUM OF RS. 1 20 000/- ONLY HAD BEEN PAID AS ADVANCE. EVIDE NCE WAS ALSO FILED THAT THE PLOT OF LAND WAS ALLOTTED BY WAY OF RELOCATION OF THE PLOT FOR WHICH APPLICATION WAS MADE IN 1996 AND FOR WHICH THE ADVANCE WAS GIVEN BY THE COMPANY. THESE FACTS WERE PUT TO THE AO FO R HIS REMAND REPORT AND HE COULD NOT DISPUTE THESE FACTS IN ANY MANNER. THEREFORE ON THE BASIS OF SEIZED EVIDENCE AND THE ADDITIONAL EVIDENCE HE CAME TO THE CONCLUSION THAT THE POSSESSION OF THE PLOT WAS TAKEN OVER BY THE ASSESSEE AS DIRECTOR OF THE COMPANY AND NOT AS AN INDIVIDUAL. THUS THE ADDITION WAS DELETED WITH LIBERTY TO THE REVENUE TO TAKE SUITABLE ACT ION AS PER LAW IN CASE OF THE COMPANY UNDER THE PROVISION CONTAINED IN SECTION 153C(3). 14. BEFORE US THE LD. DR RELIED ON THE ORDER O F THE AO WHILE THE LD. COUNSEL RELIED ON THE ORDER OF THE LD. CIT(APPEALS ). FURTHER SHE DREW OUR ATTENTION TO PAGE NOS. 32 TO 36 OF THE PAPER BOOK . PAGE 32 IS THE RECEIPT OF APPLICATION FROM THE COMPANY ALONG WITH RECEIPT O F RS. 1 20 000/- BY WAY OF PAY ORDER NO. 075558 DATED 26.12.1996 DRAW N ON UNION BANK OF INDIA CONNAUGHT PLACE NEW DELHI. PAGE NO. 33 IS THE LEDGER ACCOUNT IN THE BOOKS OF THE COMPANY SHOWING THE BALANCE OF RS. 1 20 000/-. PAGE NOS. 34 AND 35 CONSTITUTE ALLOTMENT LETTER FRO M DEPUTY MANAGER DELHI ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 42 STATE INDUSTRIAL DEVELOPMENT CORPORATION LTD. ADDRESSED TO THE COMPANY REGARDING THE ALLOTMENT OF THE LAND. PAGE NO. 36 I S A CERTIFICATE BY THE DIVISIONAL MANAGER CERTIFYING THAT THE COMPANY IS ENGAGED IN MANUFACTURE OF FLEXIBLE PACKAGING AND PRINTING. IT HAS BEEN ALLOTTED AN INDUSTRIAL PLOT ADMEASURING 250 SQ. METERS AT NARELA INDUSTRIAL CO MPLEX UNDER RELOCATION SCHEME OF INDUSTRIES. SINCE THE PARTY HAS D EPOSITED THE ESTIMATED FULL COST OF THE PLOT IT IS AUTHORIZED TO ARRANGE VA RIOUS FACILITIES MENTIONED THEREIN FOR ISSUANCE OF NO OBJECTION CERTIFICATE. 15. WE HAVE CONSIDERED THE FACTS OF THE CASE AN D SUBMISSIONS MADE BEFORE US. THE FACTS MENTIONED IN THE IMPUGNE D ORDER AND THE DOCUMENTS PLACED IN THE PAPER BOOK LEAD TO A CLEA R INFERENCE THAT THE PLOT WAS ALLOTTED TO THE COMPANY WHICH HAD PAID A SUM OF RS. 1 20 000/- TO THE DELHI STATE INDUSTRIAL DEVELOPMENT CORPORATION LTD . IN VIEW THEREOF WE DO NOT FIND ANY ERROR IN THE ORDER OF THE LD. C IT(A) WHICH REQUIRES CORRECTION FROM US MORE SO WHEN HE HAS GRANTED LIBERTY TO THE REVENUE TO TAKE SUITABLE ACTION AS PER LAW IN THE HANDS OF THE COMPANY. 16. IN REGARD TO GROUND NO. 2 IT IS MENTIONED IN THE ASSESSMENT ORDER THAT AS PER ANNEXURE A-2 PAGE 28 SMT. JYOTI CHADHA WIFE OF THE ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 43 ASSESSEE PAID A SUM OF RS. 10.00 LAKH IN RESPE CT OF FLAT NO. 3 7 TH FLOOR VIKRANT TOWER RAJENDRA PLACE NEW DELHI. THIS F LAT HAS A COVERED AREA OF 787 SQ. FT. THE RETURNS FILED BY HER SHOW T HAT SHE DOES NOT HAVE CAPACITY TO PAY A SUM OF RS. 10.00 LAKH. THIS LACK OF CAPACITY BECOMES MORE CLEAR WHEN HER ACCOUNTS SHOW THAT SHE ALSO ADVANCED UNSECURED LOANS OF RS. 22 51 000/- TO THE ASSESSEE AND RS. 6 70 000/- TO SHRI VAIBHAV CHADHA. IN THESE CIRCUMSTANCES IT HAS BEEN HEL D THAT THE CONSIDERATION ACTUALLY FLOWED FROM THE ASSESSEE. THEREFORE THE AMOUNT WAS INCLUDED IN THE TOTAL INCOME OF THE ASSESSEE AS UNEXPLAIN ED INVESTMENT. 16.1 IT WAS SUBMITTED BEFORE THE LD. CIT(A) THAT FROM THE AGREEMENT TO SELL AND PURCHASE IT IS CLEAR THAT SMT. JYOTI CHADHA PURCHASED THE FLAT ALONG WITH SMT. ASHA BHASIN. SHE HAS HALF SHARE IN THE PROPERTY. SHE PAID A SUM OF RS. 5.00 LAKH BY WAY OF CHEQUE AS IS EV IDENT FROM THE AGREEMENT. THIS INVESTMENT HAS BEEN DISCLOSED BY H ER IN THE RETURN OF INCOME. IN ORDER TO SUPPORT THE SUBMISSIONS ADDIT IONAL EVIDENCE WAS FILED BY WAY OF HER BALANCE-SHEET AS ON 31.3.2005 WHICH SHOWS THE INVESTMENT OF RS. 5.00 LAKH IN THIS PROPERTY. THE LD. CIT( A) ALSO NOTED THAT THE AGREEMENT SHOWS THE JOINT OWNERSHIP OF THE PROP ERTY AND THAT SMT. JYOTI CHADHA HAD ONLY HALF SHARE THEREIN. THEREFORE H E CAME TO THE CONCLUSION ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 44 THAT NO AMOUNT COULD BE ADDED IN THE HANDS OF THE ASSESSEE ON THIS GROUND ALSO. 16.2 BEFORE US THE LD. DR RELIED ON THE ORDER O F THE AO AND THE LD. COUNSEL RELIED ON THE ORDER OF THE LD. CIT(APPEAL S). BESIDES THIS SHE ALSO REFERRED TO PAGE NOS. 37 TO 43 OF THE PAPER BOOK. PAGE NOS. 37 TO 41 CONSTITUTE AGREEMENT TO SELL AND PURCHASE BETWE EN SHRI PRAKASH ARORA AND MS. ABHINANDAN AS VENDORS AND SMT. JYOTI CHA DHA AND SMT. ASHA BHASIN AS THE PURCHASERS. THE CONSIDERATION IS PLA CED AT RS. 10.00 LAKH WHICH IS PAID BY WAY OF TWO CHEQUE NOS. 023258 A ND 023255 DATED 12.4.2004 DRAWN ON UNINON BANK OF INDIA AMOU NTING TO RS. 5.00 LAKH EACH. PAGE NO. 42 IS THE RECEIPT IN RESPECT OF PAYMENTS MADE BY SMT. JYOTI CHADHA AND SMT. ASHA BHASIN. PAGE NO. 43 IS THE BALANCE-SHEET OF SMT. JYOTI CHADHA AS ON 31.3.2005 SHOWING INVESTME NT IN THE FLAT AT RS. 5.00 LAKH. 17. WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS MADE BEFORE US. FROM THE EVIDENCE PLACED IN THE PAPER BOOK IT IS CLEAR THAT THE FLAT HAD BEEN PURCHASED BY SMT. JYOTI CHADHA AND SMT. ASHA BHASIN AS JOINT OWNERS. THE OTHER EVIDENCE SHOWS THAT SM T. JYOTI CHADHA PAID ONLY ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 45 A SUM OF RS. 5.00 LAKH WHICH IS REFLECTED IN HER BALANCE-SHEET AS ON 31.3.2005. IN VIEW OF THESE FACTS WE DO NOT FIND ANY ERROR IN THE ORDER OF THE LD. CIT(A) WHICH REQUIRES CORRECTION FROM US. ITA NO. 1460(DEL)/2009-A.Y. 2006-07-APPEAL OF THE R EVENUE ITA NO. 1267(DEL)/2009-A.Y. 2006-07-CROSS APPEAL OF THE ASSESSEE 18. THE REVENUE HAS TAKEN THREE SUBSTANTIVE GRO UNDS IN THE APPEAL REGARDING THE DELETION OF THE ADDITION OF RS. 2 23 70 000/- RS. 32 88 000/- AND RS. 1 02 921/- MADE BY THE AO IN RESPECT OF INVESTMENT AND OTHER TRANSACTIONS MADE IN THE FIRM OF M/S PRAGATI PACK AGING. IN THE COURSE OF SEARCH A LETTER DATED 6.6.2005 ADDRESSED BY THIS FIRM TO THE BANK WAS FOUND IN WHICH VARIOUS BANKING FACILITIES WERE SOUGHT. THESE FACILITIES WERE TERM LOAN OF RS. 333.48 LAKH CASH CREDIT FACILITY OF RS. 186.1 LAKH AND BANK GUARANTEES OF RS. 20.00 LAKH. IT WAS M ENTIONED THAT THE PROMOTERS OF THE FIRM HAD INVESTED FUNDS OF RS. 25 6.58 LAKH AS CAPITAL AND RS. 32.88 LAKH AS UNSECURED LOANS FROM FRIENDS AND RELATIVES TO BE UTILIZED AS LONG-TERM FUNDS. IT WAS SUBMITTED THAT THIS F IRM IS AN ASSOCIATE CONCERN WHICH HAD SOUGHT VARIOUS FACILITIES FRO M UNION BANK OF INDIA WHICH DID NOT MATERIALIZE. FURTHER THE AO NOT ED THAT IN STATEMENT DATED ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 46 1.9.2005 RECORDED IN THE COURSE OF SEARCH THE A SSESSEE INTER-ALIA STATED THAT HE AND HIS SON ARE EQUAL PARTNERS IN A FIR M. THE FIRM IS LOCATED AT JAMMU WHERE THE CONSTRUCTION WORK IS IN PROGRESS. HOWEVER THE PRODUCTION IS YET TO START. IT IS FURTHER STATE D THAT SHRI VAIBHAV CHADHA THE SON IS PURSUING MBA COURSE IN LINCON UNI VERSITY U.K. THE ASSESSEE WAS REQUIRED TO EXPLAIN THE NATURE AND S OURCE OF THE CAPITAL AND LOANS STATED TO HAVE BEEN RAISED BY THE FIRM. TH E SAME WAS NOT EXPLAINED. THEREFORE THE TWO AMOUNTS WERE BROUGHT TO TAX. FURTHER IT WAS NOTED THAT THREE PURCHASES OF RS. 10 000/- RS. 6 6715/ - AND RS. 86 306/- HAVE BEEN MADE BY THIS FIRM IN CASH FOR WHICH BILLS WERE FOUND. IT WAS SUBMITTED THAT THESE TRANSACTIONS PERTAINED TO TH E FIRM. THE AO NOTED THAT THE PAYMENT IS BY WAY OF CASH AND THERE IS NO EN TRY IN THE LEDGER OR CASH BOOK OF THE FIRM. THEREFORE A FURTHER ADDITION OF RS. 1 02 921/- WAS MADE. 18.1 IN THE COURSE OF THE PROCEEDINGS BEFORE THE LD . CIT(A) THE ASSESSEE FILED ADDITIONAL EVIDENCE TO EXPLAIN THE TRANSACT IONS AND SUBMITTED THAT THESE ARE ON ACCOUNT OF M/S PRAGATI PACKAGING. T HE ASSESSEE HAS NOTHING TO DO WITH THIS FIRM. THE CASE OF THE ASSESSEE IS THAT THE FIRM HAD BEEN CONSTITUTED BY FOIL PACK (INDIA) PVT. LTD. A LIM ITED COMPANY AND SHRI ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 47 VAIBHAV CHADHA THE SON OF THE ASSESSEE. FOIL PACK HAD BEEN INCORPORATED UNDER THE COMPANIES ACT 1956 ON 9.1.1990 WHICH I S THE MAJOR PARTNER AND WHICH HAS CONTRIBUTED RS. 234.00 LAKH AS CAPITAL . SHRI VAIBHAV CHADHA HAS CONTRIBUTED RS. 14.15 LAKH AS CAPITAL. BOTH THESE PERSONS ARE EXISTING ASSESSEES AND THEY HAVE SHOWN THEIR INVESTMENTS IN THE RESPECTIVE RETURNS OF INCOME. THE ASSESSEE HAS NOTHING TO DO WITH TH IS FIRM. THE AFFIDAVITS WERE ALSO FILED BY THE FRIENDS AND RELATIVES WITH UNION BANK OF INDIA REGARDING UNSECURED LOANS. ON THESE FACTS THE LD. CIT(A) MENTIONED THAT IN STEAD OF HANDING OVER THE DOCUMENT TO THE AO O F M/S PRAGATI PACKAGING FOIL PACK (INDIA) PVT. LTD. AND SHRI V AIBHAV CHADHA THE AO PROCEEDED TO TAKE ACTION IN THE CASE OF THE ASS ESSEE. THE ASSESSEE FILED ADDITIONAL EVIDENCE BY WAY OF ANNUAL ACCOUNTS OF M /S PRAGATI PACKAGING WHICH SHOW INVESTMENT OF PARTNERS AND COPIES OF A CCOUNTS OF FOIL PACK (INDIA) PVT. LTD. AND SHRI VAIBHAV CHADHA IN THE BOOKS OF M/S PRAGATI PACKAGING. SINCE THE ASSESSEE HAD NOT MADE ANY I NVESTMENT IN THE FIRM IT WAS ARGUED THAT NO ADDITION COULD HAVE BEEN MADE IN THE HANDS OF THE ASSESSEE EITHER IN RESPECT OF CAPITAL OR LOANS. T HE ADDITIONAL DOCUMENTS WERE FORWARDED TO THE AO FOR THE FOR THE REMAND REPORT WHO DID NOT DISPUTE THE AUTHENTICITY OF THE DOCUMENTS. THE REAFTER THE LD. CIT(A) CAME TO THE CONCLUSION THAT THE ASSESSEE HAD NOT M ADE ANY INVESTMENT IN ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 48 M/S PRAGATI PACKAGING EITHER AS CAPITAL OR LOAN . THEREFORE NO ADDITION SHOULD BE MADE IN HIS HAND IN THIS REGARD. 18.2 THE ASSESSEE ALSO FILED DOCUMENTS TO EXPLA IN THE PURCHASES IN THE HANDS OF M/S PRAGATI PACKAGING. THE AO COULD NOT CONTRADICT THE DOCUMENTS CONTAINED IN THE ADDITIONAL EVIDENCE. TH EREFORE IT WAS HELD THAT THE TRANSACTIONS OF PURCHASE RELATED TO M/S PRA GATI PACKAGING. THUS THE ADDITION MADE IN RESPECT OF UNACCOUNTED PURCHASES WAS ALSO DELETED. 19. BEFORE US THE LD. DR RELIED ON THE ORDER OF THE AO WHILE THE LD. COUNSEL RELIED ON THE ORDER OF THE LD. CIT(A). B ESIDES SHE ALSO REFERRED TO PAGE NOS. 44 TO 65 OF THE PAPER BOOK. THESE PA PERS CONTAIN COPIES OF BALANCE-SHEET PROFIT AND LOSS ACCOUNT AND THEIR ANNEXURES WITH M/S PRAGATI PACKAGING; BALANCE-SHEET PROFIT AND LOSS ACCOU NT AND THE ANNEXURES OF FOIL PACK (INDIA) PVT. LTD. AND CAPITAL ACCOUNTS OF THE PARTNERS IN THE BOOKS OF M/S PRAGATI PACKAGING. ON THE BASIS OF THESE DOCUMENTS IT WAS HER CASE THAT NOTHING COULD BE ADDED IN THE HANDS OF THE ASSESSEE. 20. WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS MADE BEFORE US. THE FACTS ARE THAT IN THE COURSE OF SEARCH OF THE PREMISES OF THE ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 49 ASSESSEE CERTAIN DOCUMENTS WERE FOUND WHICH REL ATED TO M/S PRAGATI PACKAGING. THESE DOCUMENTS INTER-ALIA CONTAIN T HE APPLICATION FOR AVAILING VARIOUS CREDIT FACILITIES ETC. FROM THE BANK AND THREE PURCHASES MADE BY THE FIRM. THE STATEMENT OF THE ASSESSEE WAS RE CORDED IN THE COURSE OF SEARCH IN WHICH IT WAS INTER-ALIA DEPOSED THAT H E AND HIS SON ARE PARTNERS IN A FIRM WHICH IS ESTABLISHING ITS FACTORY AT JAMMU. THE AO CONSIDERED THE EVIDENCE AND THE STATEMENT. THE ASSESSEE WA S REQUIRED TO EXPLAIN THE CAPITAL INTRODUCED IN THE FIRM THE LOAN RAISED BY THE FIRM AND PURCHASES MADE BY IT IN CASH. IN ABSENCE OF ANY EXPLANATIO N IN THIS BEHALF EXCEPT THAT THE TRANSACTIONS PERTAIN TO M/S PRAGATI PACKAGIN G VARIOUS AMOUNTS WERE ADDED IN HIS INCOME. HOWEVER IN THE COURSE OF PRO CEEDINGS BEFORE THE LD. CIT(APPEALS) IT WAS FOUND THAT THE ASSESSEE HAD NO CONNECTION WHATSOEVER WITH THE FIRM. THE COMPANY AND THE SON OF THE A SSESSEE ARE PARTNERS IN THE FIRM. THE ASSESSEE HAD NEITHER INVESTED IN THE FIRM BY WAY OF CAPITAL NOR LENT ANY MONEY TO IT. THE PURCHASES WERE S OUGHT TO BE EXPLAINED BY WAY OF FILING FURTHER EVIDENCE. ALL THE EVIDENC E FILED IN THE COURSE OF HEARING WAS FORWARDED TO THE AO FOR HIS REMAND RE PORT BUT HE COULD NOT DISPROVE ANY DOCUMENT. HIS CASE RESTS SOLELY ON THE STATEMENT RECORDED IN THE COURSE OF SEARCH WHICH DOES APPEAR TO US TO BE MISLEADING. HOWEVER ACTUAL FACTS ON RECORD ARE TO THE CON TRARY. IT IS CLEAR THAT THE ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 50 ASSESSEE HAS NO CONNECTION WITH THE FIRM. HE HAS ALSO NOT MADE ANY INVESTMENT BY WAY OF CAPITAL OR LOAN IN THE FIRM . THE TRANSACTIONS OF PURCHASE ALSO PERTAIN TO THE FIRM. THEREFORE ANY ACTION IN RESPECT OF THESE PAPERS CAN BE TAKEN ONLY IN THE HANDS OF THE FIR M AND NOT IN THE HANDS OF THE ASSESSEE. THUS WE ARE IN AGREEMENT WITH THE LD. CIT(A) THAT NO AMOUNT COULD BE ADDED TO THE INCOME OF THE ASSESS EE ON THE BASIS OF THE DOCUMENTS FOUND IN THE COURSE OF SEARCH OF THE PREM ISES OF THE ASSESSEE. 21. COMING TO THE APPEAL OF THE ASSESSEE GROUND N O. 1 IS THAT THE ORDER OF ASSESSMENT IS BAD IN LAW AS NO NOTICE HAS BEEN ISS UED U/S 143(2) OF THE ACT. THIS GROUND IS CONTRARY TO THE FACTS ON RECORD W HICH SHOWS THAT A NOTICE U/S 143(2) HAS BEEN ISSUED AND SERVED ON THE ASS ESSEE FOR THIS YEAR WHICH HAS ALSO BEEN DISCUSSED IN THE CROSS OBJECTION OF THE ASSESSEE FOR ASSESSMENT YEAR 2001-02. IT APPEARS THAT THIS GROUND WAS WRONGLY TAKEN BY THE ASSESSEE AND THAT IS WHY IT HAS NOT BEEN DISCUSSED BY THE LD. COUNSEL BEFORE US. A COPY OF THIS NOTICE EXISTS ON OUR RECORD WHICH SHOWS THAT NOTICE DATED 27.7.2007 WAS ISSUED TO THE ASSESS EE. IN VIEW OF THESE FACTS THIS GROUND IS DISMISSED. ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 51 22. GROUND NO. 2 IS THAT THE LD. CIT(A) ERRED IN SUSTAINING THE ADDITION OF RS. 3 87 364/- ON THE GROUND OF UNACCOUNTED IN VESTMENT IN JEWELLERY. IN THIS CONNECTION IT IS MENTIONED IN THE IMPUGNED ORDER THAT JEWELLERY WEIGHING 906.900 GRAMS AND VALUED AT RS. 6 93 582/- WAS FOUND IN THE RESIDENCE AND LOCKERS OF THE ASSESSEE. THE EXPLA NATION OF THE ASSESSEE IS THAT THIS JEWELLERY IS STREEDHAN OF SMT. JYO TI CHADHA WHO WAS MARRIED ABOUT 25 TO 30 YEARS AGO. THE AO DID NOT ACCEP T THE SUBMISSION ON THE GROUND THAT NO DOCUMENTARY EVIDENCE HAS BEEN FILE D TO SUPPORT THE CONTENTION THAT THE STATUS OF THE FAMILY WAS SUC H THAT SHE COULD POSSESS JEWELLERY WEIGHING 906.900 GRAMS AS STREEDHAN. IN VIEW THEREOF THE AO ACCEPTED EXPLANATION TO THE EXTENT OF 400 GRA MS AND THE VALUE OF JEWELLERY WEIGHING 506 GRAMS AND VALUED AT RS. 3 87 364/- WAS HELD TO BE INCOME FROM UNDISCLOSED SOURCES. BEFORE THE LD. CIT(A) IT HAS BEEN SUBMITTED THAT SMT. JYOTI CHADHA RECEIVED JEWE LLERY BY WAY OF GIFT FROM MOTHER-IN-LAW VIDE GIFT DEED DATED 15.5.1985 A CO PY OF WHICH WAS FILED BY WAY OF ADDITIONAL EVIDENCE. THE CIT(A) CONSIDE RED THE MATTER. HE MENTIONED ABOUT THE EXPLANATION OF THE ASSESSEE THAT THE JEWELLERY IS STREEDHAN AS WELL AS GIFT RECEIVED FROM MOTHE R-IN-LAW TO THEIR CHILDREN AS WELL AS GRAND-CHILDREN. IT IS MENTIONED TH AT NO EVIDENCE WAS FILED BEFORE THE AO REGARDING OWNERSHIP OR ACQUISITIO N OF THE JEWELLERY. THE ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 52 EVIDENCE IS NOW BEING FILED IN THE FORM OF DECLAR ATION. THIS DECLARATION DOES NOT SPECIFY EITHER THE ITEMS OR THEIR I NDIVIDUAL VALUE. RS. 1.00 LAKH IS ALSO MENTIONED IN ROUND FIGURE. IN THESE CIR CUMSTANCES THE ADDITION MADE BY THE AO HAS BEEN UPHELD. 23. BEFORE US THE LD. COUNSEL REFERRED TO THE ORD ERS OF THE AO AND THE LD. CIT(A) IN THIS MATTER. IT WAS SUBMITTED THAT THE JEWELLERY DOES NOT BELONG TO THE ASSESSEE. THE JEWELLERY BELONGS TO HIS WI FE WHO HAD BEEN MARRIED ABOUT 25 YEARS AGO. THEREFORE THE JEWELLERY I S HER STREEDHAN. THE JEWELLERY HAS NOT BEEN ACQUIRED IN ONE YEAR BUT IT HAS BEEN ACQUIRED OVER A PERIOD OF TIME. FURTHER THE FAMILY OF THE A SSESSEE CONSISTS OF SELF-WIFE AND A SON. THEREFORE LOOKING TO THE SIZE OF T HE FAMILY ACQUISITION OF JEWELLERY BY HIS WIFE AT THE TIME OF MARRIAGE GIFT BY MOTHER-IN-LAW THE LOWER AUTHORITIES SHOULD HAVE ACCEPTED THE WHO LE OF THE JEWELLERY TO BE EXPLAINED. IN REPLY THE LD. DR RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. 24. WE HAVE CONSIDERED THE FACTS OF THE CASE AN D SUBMISSIONS MADE BEFORE US. THE PRIMARY CASE OF THE LD. COUNSEL IS THAT THE JEWELLERY BELONGS TO THE WIFE AND NOT TO THE ASSESSEE. IT HAS B EEN ACQUIRED AT THE TIME OF ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 53 THE MARRIAGE AND SUBSEQUENTLY OVER A PERIOD OF TIM E. IT ALSO INCLUDES A GIFT OF RS. 1.00 LAKH FROM MOTHER-IN-LAW. THE WHOLE OF THE JEWELLERY REPRESENTS HER STREEDHAN. AN ALTERNATE PLEA I S ALSO TAKEN THAT THE FAMILY CONSISTS OF SELF WIFE AND A SON. LOOKING TO THE SIZE OF THE FAMILY POSSESSION OF JEWELLERY TO THE EXTENT OF 906.9 G RAMS IS REASONABLE. ON THE OTHER HAND THE FINDING OF THE LD. CIT(A) IS TO T HE EFFECT THAT SINCE GIFT DEED CONTAINS A MENTION OF A ROUND SUM OF RS. 1.0 0 LAKH IT IS NOT BE RELIABLE. THERE IS NO OTHER EVIDENCE REGARDING TH E STREEDHAN BEING ACQUIRED BY THE ASSESSEE AT THE TIME OF MARRIAGE AND OVE R A PERIOD OF TIME. WE FIND THAT THERE IS SOME CONTRADICTION IN THE STA ND TAKEN BY THE LD. COUNSEL IN AS MUCH AS THE JEWELLERY IS STATED TO BE B ELONGING TO SMT. JYOTI CHADHA AND AT THE SAME TIME IT IS ALSO BEING MAD E OUT THAT THERE ARE THREE FAMILY MEMBERS WHO CAN TOGETHER POSSESS JEWELLERY WEIGHING 906.9 GRAMS. NO EVIDENCE HAS BEEN PRODUCED BEFORE TH E LOWER AUTHORITIES THAT ANY WORTHWHILE JEWELLERY WAS ACQUIRED BY THE WIFE AT THE TIME OF THE MARRIAGE. THE PAST INCOME-TAX RECORDS OF THE WIF E AND THE SON HAVE NOT BEEN FILED TO SHOW ANY EVIDENCE OF WITHDRAWALS FOR ACQUISITION OF JEWELLERY. THE GIFT FROM MOTHER-IN-LAW IS ALSO NOT ACCEPTABLE IN VIEW OF THE FINDINGS OF THE LD. CIT(A). IN THESE CIRCUMST ANCES WE DO NOT THINK IT ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 54 NECESSARY TO INTERFERE WITH THE ORDER OF THE LD. CIT(A) WHICH IS BASED ON AVAILABLE FACTS ON RECORD. THUS THIS GROUND IS DISMISSED. 25. THE LAST GROUND IS AGAINST UPHOLDING OF THE ADDITION OF RS. 50 000/- ON ACCOUNT OF EXPENDITURE INCURRED AT TIVOLI GAR DEN WHOSE RECEIPT WAS IN THE NAME OF MRS. ARCHANA CHADHA. IN THIS CONNE CTION IT IS MENTIONED IN THE ASSESSMENT ORDER THAT IN THE COURSE OF SEARCH A DOCUMENT WAS FOUND RELATING TO BOOKING MADE WITH TIVOLI GARDEN RESOR T ON 18.5.2005. THE RECEIPT IS IN THE NAME OF SMT. ARCHANA CHADHA. I T WAS SUBMITTED THAT SMT. ARCHANA CHADHA IS THE NIECE WHO BOOKED SPACE IN TIVOLI GARDEN FOR CONDUCTING SOME CEREMONY. SHE INADVERTENTLY LE FT A RECEIPT OF RS. 50 000/- AT THE RESIDENCE OF THE ASSESSEE. THE AMOUNT IN QUESTION WAS PAID BY HER. THE AO CONSIDERED THIS EXPLANATION. IT HAS BEEN MENTIONED THAT THE RECEIPT WAS FOUND AT THE RESIDENCE OF THE ASSESSEE WHICH LEADS TO AN INFERENCE THAT ALTHOUGH THE AMOUNT HAD BEEN PA ID BY THE ASSESSEE SMT. ARCHANA CHADHA WAS YET TO REIMBURSE THE ASSESSE E FOR THIS EXPENDITURE. IN ABSENCE OF ANY SATISFACTORY EXPLANATION ABOUT THE NATURE AND SOURCE OF EXPENDITURE THE AMOUNT WAS BROUGHT TO TAX IN THE HANDS OF THE ASSESSEE. THE LD. CIT(APPEALS) UPHELD THE ORDER OF THE AO B Y STATING THAT NO ACCEPTABLE EXPLANATION HAS BEEN FURNISHED BY THE ASSESSEE. ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 55 26. BEFORE US THE LD. COUNSEL RELIED ON THE SU BMISSIONS MADE BEFORE THE LOWER AUTHORITIES WHILE THE LD. DR RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. 27. WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS MADE BEFORE US. IT IS SEEN THAT THE RECEIPT HAD BEEN FOUND IN POSSESSION OF THE ASSESSEE. IF IT IS THE CASE OF THE ASSESSEE THAT SMT. ARCHANA CHADHA HAD PAID THE AMOUNT THE ONUS WAS ON HIM TO BRING ON RECORD EVIDENCE TO THAT EFFECT FROM HER. NO SUCH EVIDENCE HAS BEEN BROUGHT ON RECORD. IN ABSENCE THEREOF WE ARE OF THE VIEW THAT THE SUBM ISSION IS ONLY IN THE NATURE OF ARGUMENT WHICH IS NOT SUPPORTED BY ANY EVIDENCE ON RECORD. THE ONUS OF PROVING THE EXPENDITURE SATISFACTORILY W AS ON THE ASSESSEE AS THE RECEIPT WAS FOUND IN HIS POSSESSION. IN THESE CIR CUMSTANCES WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE L D. CIT(A). 28. IN THE RESULT ALL THE APPEALS OF THE REVENUE AND THE CROSS APPEALS AND CROSS OBJECTIONS OF THE ASSESSEE ARE DISMISSED . THIS ORDER WAS PRONOUNCED IN THE OPEN COURT ON 17TH SEPTEMBER 2010. SD/- SD/- (RAJPAL YADAV) (K.G.BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE OF ORDER: 17TH SEPTEMBER 2010. ITA NOS. 1455 1458 1459 1460 1266 1267& C.O.NOS. 144 & 147(DEL)/09 56 SP SATIA COPY OF THE ORDER FORWARDED TO:- SHRI ASHOK CHADHA NEW DELHI. ITO WARD 47(2) NEW DELHI. CIT(A) CIT THE DR ITAT NEW DELHI. ASSISTANT REGISTRAR.