Shri Vinod Katuwa, JAIPUR v. DCIT, UDAIPUR

ITA 105/JODH/2014 | 2004-2005
Pronouncement Date: 31-07-2014 | Result: Partly Allowed

Appeal Details

RSA Number 10523314 RSA 2014
Assessee PAN AENPK0467J
Bench Jodhpur
Appeal Number ITA 105/JODH/2014
Duration Of Justice 5 month(s) 3 day(s)
Appellant Shri Vinod Katuwa, JAIPUR
Respondent DCIT, UDAIPUR
Appeal Type Income Tax Appeal
Pronouncement Date 31-07-2014
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted DB
Tribunal Order Date 31-07-2014
Date Of Final Hearing 17-07-2014
Next Hearing Date 17-07-2014
Assessment Year 2004-2005
Appeal Filed On 25-02-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH JODHPUR BEFORE SHRI HARI OM MARATHA JUDICIAL MEMBER AND SHRI N.K.SAINI ACCOUNTANT MEMBER SA NOS. 05 06 & 07 /JU/2014 A/O ITA NOS. 1 05 & 106 /JU/2014 [ ASSESSMENT YEAR S : 200 4 - 05 & 2007 - 08] & I TA NO S . 105 1 06 & 107 /JU/2014 [ ASSESSMENT YEAR S : 2004 - 05 200 7 - 08 & 2010 - 11] SHRI VINOD KATUWA VS. THE DY. C.I.T S/O SHRI MOHAN LAL KATUWA CENTRAL CIRCLE - 1 68/258 RATI TALAI UDAIPUR BANSWARA PAN : AENPK 0467 J (APPELLANT) (R ESPONDENT) ITA NO. 1 98 /JU/2014 [ ASSESSMENT YEAR S : 200 4 - 05] THE DY. C.I.T VS. SHRI VINOD KATUWA CENTRAL CIRCLE - 1 S/O SHRI MOHAN LAL KATUWA UDAIPUR 68/258 RATI TALAI BANSWARA PAN : AENPK 0467 J SA NOS. 10/JU/2014 & A/O ITA NOS. 1 09 /JU/2014 [ ASSESSMENT YEAR: 200 4 - 05] SHRI R.N. BHANDARI VS. THE DY. C.I.T S/O SHRI RANCHOD NATHJI BHANDHARI CENTRAL CIRCLE - 1 68/258 RATI TALAI UDAIPUR BANSWARA PAN : ABFPB 1213 N 2 SA NO. 08/JU/2014 A/O ITA NOS. 1 08 /JU/2014 [ A SSESSMENT YEAR : 2007 - 08] & ITA NOS. 1 08 /JU/2014 [ ASSESSMENT YEAR: 200 7 - 08] SMT. NEETA KATUWA VS. THE DY. C.I.T W/O SHRI VINOD KATUWA CENTRAL CIRCLE - 1 68/258 RATI TALAI UDAIPUR BANSWARA PAN : AOAPK 1250 J ITA NO S. 95 96 & 97 /JU/2014 [ ASSESSMENT YEAR S : 200 7 - 08 2008 - 09 & 2009 - 10] THE DY. C.I.T VS. SMT. NEETA KATUWA CENTRAL CIRCLE - 1 W /O SHRI VINOD KATUWA UDAIPUR 68/258 RATI TALAI BANSWARA PAN : A OA PK 1250 J (APPELLANT) (RESPONDENT) SA NO. 09/ JU/2014 A/O ITA NOS. 1 10 /JU/2014 [ ASSESSMENT YEAR : 2007 - 08] & ITA NOS. 1 10 /JU/2014 [ ASSESSMENT YEAR: 200 7 - 08] SMT. ANITA BHANDARI VS. THE DY. C.I.T W/O SHRI R.N. BHANDARI CENTRAL CIRCLE - 1 68/258 RATI TALAI UDAIPUR BANSWARA PAN : ABFPB 1212 P ITA NO S. 98 & 99 /JU/2014 [ ASSESSMENT YEAR S : 200 7 - 08 & 2009 - 10] THE DY. C.I.T VS. SMT.ANITA BHANDARI CENTRAL CIRCLE - 1 W/O SHRI R.N. BHANDARI UDAIPUR 68/258 RATI TALAI BANSWARA PAN : ABFPB 1212 P (APPELLANT) (RESPONDENT) 3 ASSESSEE BY : SHRI SANJAY JHANWAR SHRI RAHUL LAKHWANI DEPARTMENT BY : SHRI O.P MEENA CIT - DR DATE OF HEARING : 17 .0 7 .2014 DATE OF PRONOUNCEMENT : 31 . 07. 2014 ORDER PER BENCH: - THE ABOVE CAPTIONED MATTERS COMPRISING OF APPEALS CROSS APPEALS AND STAY APPLICATIONS BELONGING TO KATUWA GROUP WERE HEARD TOGETHER . THEREFORE FOR THE SAKE OF CONGRUENCE BREVITY AND CONVENIENCE WE PROCEED TO DISPOSE THEM OFF BY THIS COMMON ORDER. STAY APPLICATIONS FILED REGARDING THE APPEA LS UNDER REFERENCE STAND DISMISSED HAVING BECOME INFRUCTUOUS AS WE HAVE HEARD THE MAIN APPEALS WHICH ARE SIMULTANEOUSLY BEING DISPOSED OF F BY THIS VERY ORDER. SHRI VINOD KATUWA ITA NO . 10 5 / JU /2014 & ITA NO. 198/JU/2014 A.Y. 2004 - 05 2. TO START WITH WE WILL NARRATE THE FACTS OBTAINING IN SHRI VINOD KATUWAS APPEAL FOR A.Y. 2004 - 05 OF WHICH YEAR BOTH THE PARTIES ARE IN APPEAL. 4 2.1 THE BACKGROUND FACTS IN NUT - SHELL OF CASES OF THIS GROUP ARE THAT THE ASSESSEE IS A FIRM IN WHICH T HERE ARE TWO PARTNERS N AMELY SHRI R.N. BHANDARI ( AKI RAVINDRANATH BHANDARI) AND SHRI VINOD KATUWA . A SEARCH AND SEIZURE ACTION U/S 132 OF THE INCOME - TAX ACT 1961 ['THE ACT' FOR SHORT] WAS CARRIED OUT AT THE RESIDENTIAL AND BUSINESS PREMISES OF SHRI R .N. BHANDARI AND SHRI VINO D KATUWA ON 12.08.2009 . S IMULTANEOUSLY SURVEY ACTION U/S 133A OF THE ACT WAS ALSO CARRIED OUT AT THE BUSINESS PREMISES OF THE FIRM OF THIS GROUP ON THE SAME DATE . THE CASE OF THE FIRM HAS ALREADY BEEN HEARD AND DECIDED VIDE ORDER DATED 23.05.2014. ON T HE BASIS OF SEARCH PROCEEDINGS A NOTICE U/S 153A OF THE ACT WAS ISSUED TO THE ASSESSEE FOR THE A.Y. 2004 - 05 ON 24.11.2009 AND WAS SERVED UPON HIM ON 26.11.2009 . THIS NOTICE REQUIR ED THE ASSESSEE TO PREPARE A TRUE AND COR RECT RETURN OF HIS TOTAL INCOME INC LUDING HIS UNDISCLOSED INCOME IN RESPECT OF WHICH HE WAS ASSESSABLE IN THIS YEAR IN THE PRESCRIBED FORMAT TO BE FILED WITHIN 30 DAYS OF SERVICE OF THE NOTICE AS PER LAW. IN RESPONSE TO THIS NOTICE THE ASSESSEE FILED REQUISITE RETURN ON 15.4.2010 DECLARI NG INCOME OF RS. 1 44 389/ - AND AGRICULTURAL INCOME OF RS. 1 95 200/ - . THE ASSESSEE HAD DECLARED SAME INCOME IN HIS ORIGINAL RETURN FILED ON 28.2.2005. THE CASE OF THE ASSESSEE WAS EXAMINED IN THE LIGHT OF THE DOCUMENTS/PAPERS FOUND DURING THE COURSE OF SEARCH/SURVEY AFTER OBTAINING REPLIES TO THE 5 QUERIES RAISED AND CONSIDERING THE WRITTEN REPLIES FILED BY THE ASSESSEE. THE ASSESSEE DERIVED SALARY INCOME OF RS. 1 44 389/ - FROM THE BANK OF RAJASTHAN LIMITED. HE IS ALSO A PARTNER IN M/S CHETAK COMPLEX [T HE FIRM] AND G OT SHARE OF PROFIT WHICH HAS BEEN CLAIM ED AS EXEMPT U/S 10(2A) OF THE ACT. DURING ASSESSMENT PROCEEDINGS THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE PRODUCED VARIOUS DETAILS/COPIES OF DOCUMENTS ACCOUNT S FOR THE ABOVE INCOMES TO JUSTIFY HIS CLAIM SO MADE . HOWEVER THE A SSESSMENT WAS COMPLETED AT A TOTAL INCOME OF RS. 24 35 980/ - ON 22.11.2012 U/S 143(3) R.W.S 153A . AGAINST THIS ORDER THE ASSESSEE PREFERRED FIRST APPEAL AND THE LD. CIT(A) HAS GIVE N A PART RELIEF TO HIM. NOW BOTH THE P ARTIES ARE AGGRIEVED AND HAVE FILED THEIR RESPECTIVE APPEALS. 2.2 THE FIRST EFFECTIVE GROUND RAISED BY THE ASSESSEE READS AS UNDER: UNDER THE FACTS & CIRCUMSTANCES OF THE CASE AND IN LAW LD. CIT (APPEALS) HAS ERRED IN UPHOLDING THE ADDITION OF RS. 2 90 000/ - U/S 69 OF THE ACT FOR AN AMOUNT WHICH IS DULY EXPLAINED AND CONSIDERED U/S 153C IN THE SEARCH ASSESSMENT IN THE CASE OF GROUP MEMBER I.E. M/S CHETAK COMPLEX AND HENCE DUPLICITY . 6 2.3 FACTS OF GROUND NO. 1 OF ASSESSEES APPEAL ARE THAT DURING THE COURSE OF SEARCH VARIOUS INCRIMINATING DOCUMENTS/EVIDENCE INCLUDING A CPU WERE FOUND AND SEIZED . THE CPU CONTAINED TWO TYPES OF ACCOUNTS OF THE FIRM M/S CHETAK COMPLEX ONE REFLECTING THE ACTUAL STATE OF AFFAIRS AND THE OTHER WAS A DOCTORED ONE SO AS T O REDUCE THE INCIDENCE OF TAX. HOWEVER IN THE CASE OF THE FIR M THE ACTUAL ACCOUNTS RECORDED IN THE CPU AND NOMENCLATURED AS KUTBI ACCOUNT HAS BEEN ACCEPTED BY BOTH THE PARTIES. THE REVENUE HAS ALSO ACCEPTED THAT KUTBI BOOK AS THE CORRECT STATE OF AFF AIRS. CERTAIN CREDIT ENTRIES FOUND RECORDED IN THE KUTBI PERTAINING TO THE FIRM CHETAK COMPLEX COULD BE EXPLAINED NEITHER BY THE FIRM N OR BY THE PARTNERS . ACCORDINGLY TREATING THEM AS UNEXPLAINED INCOME OF THE ASSESSEE THE A.O. HAS ADDED RS. 2.90 LAKHS U/S 69 OF THE AC T IN THE HANDS OF THIS ASSESSEE. T HE LD. CIT(A) CENTRAL JAIPUR HAS UPHELD THIS ADDITION. AGAINST THIS CONFIRMATION THE ASSESSEE HAS RAISED THIS GROUND AND HAS MADE THE FOLLOWING SUBMISSIONS IN THIS REGARD : 1. IT IS RESPECTFULLY SUBM ITTED THAT IN THE KUTBI BOOKS OF THE FIRM RS. 2.90 LAKS HAS BEEN SHOWN TO BEEN RECEIVED FROM MR. VINOD KATUWA ON DIFFERENT DATES. IT IS PERTINENT TO MENTION THAT A CASH FLOW STATEMENT WAS PREPARED BY THE ASSESSEE AS HE WAS NOT REQUIRED TO MAINTAIN BOOKS O F ACCOUNTS AFTER INCORPORATING THE INFLOW AND OUTFLOW OF CASH 7 FROM THE BANK AS WELL AS CURRENT ACCOUNT OF CHETAK COMPLEX. THIS CASH FLOW STATEMENT WAS PLACED BEFORE THE LD AO AS WELL AS LD CIT(A). WITH THE PERUSAL OF THE SAID CASH FLOW STATEMENT AVAILABLE AT PAGE NO 48 TO 50 OF THE PAPER BOOK IT IS EVIDENT THAT THERE WAS SUFFICIENT CASH BALANCE AVAILABLE WITH THE ASSESSEE FOR THE PAYMENT OF ABOVEMENTIONED RS 2.90 LACS TO M/S CHETAK COMPLEX ON DIFFERENT DATES. 2. THEREFORE THERE WAS NO JUSTIFICATION IN S USTAINING THIS ADDITION IN THE HANDS OF THE PARTNER WHEN THIS PAYMENT WAS MADE FROM THE FUNDS RECEIVED FROM THE FIRM OR OTHER DISCLOSED SOURCES. 3. EVEN OTHERWISE THE AMOUNT IS COVERED BY THE UNDISCLOSED INCOME OF RS. 1 18 28 450/ - TAXED IN THE HANDS OF THE FIRM AND PEAK CREDIT OF RS. 36 42 550/ - TAXED IN THE HANDS OF THE FIRM WHICH WAS AVAILABLE IN THE HANDS OF THE PARTNERS. 2. 4 ON THE OTHER HAND THE LD. CIT - DR HAS RELIED ON THE ORDER OF THE LD. CIT(A) AND HAS SUPPORTED THE REASONS GIVEN TO ADD THIS AMOUNT BY THE A.O. APART FROM THIS THE FOLLOWING WRITTEN SUBMISSIONS HAVE ALSO BEEN MADE: 8 THE ASSESSEE HAS PAID CASH TO MANY SEPARATE PERSONS AND RECEIVED CHEQUES AGAINST THE CASH PAID FROM SUCH PERSONS RESPECTIVELY ON EITHER SAME DATE OR IN NEAR FUTU RE I.E. 1 - 2 DAYS. ON PERUSAL OF 'ACTUAL - CC.KUTBI ACCOUNT' THESE TRANSACTIONS ARE CLEARLY NARRATED AS CROSS ENTRY. THE ASSESSEE HAS ISSUED CHEQUES TO MANY PERSONS AND RECEIVED CASH AGAINST THEM FROM SUCH PERSONS RESPECTIVELY ON EITHER SAME DATE OR IN NEAR FUTURE I.E. 1 - 2 DAYS. ON PERUSAL OF ACTUAL - CC.KUTBI ACCOUNT THESE TRANSACTIONS ARE NARRATED AS CLEARLY CROSS ENTRY. IN THIS CASE THE CASH HAS BEEN GIVEN TO MANY DIFFERENT PERSONS SEPARATELY AND SAME WAS NEVER RECEIVED BACK AND WHEN THE AMOUNT HAS NOT R ETURNED BACK THERE ARISES NO QUESTION OF APPLICATION OF THEORY OF 'PEAK CREDIT'. AS SUCH WHOLE OF THE AMOUNT IN TOTAL AS MENTIONED IN TABLE BELOW IS 'PEAK CREDIT' AND SET - OFF IS POSSIBLE WHEN THE AMOUNT HAS NOT CIRCULATED. THUS ALL THE UNEXPLAINED MONEY ALLEGEDLY CLAIMING FOR PEAK CREDIT WAS HELD BY THE ASSESSEE. FURTHER DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE WAS REQUIRED TO EXPLAIN EACH AND EVERY ENTRY AS APPEARING IN ITS BOOKS OF ACCOUNT BUT TILL THE DATE OF FINALIZATION OF ASSESSM ENT THE ASSESSEE HAS NOT EXPLAINED EACH AND EVERY ENTRY. IN FACT ASSESSEE CANNOT EXPLAIN THE 'CROSS ENTR IES BECAUSE THE 'ACTUAL C C (2000 TO 2010) 9 KUTBI ARE SELF EXPLANATORY AND THERE REMAINS NOT ANY DOUBT THAT ASSESSEE HAS TAKEN ACCOMMODATION ENTRIES FOR THE CASH LYING WITH IT FROM UNDISCLOSED SOURCES. EACH ENTRY MUST BE SEPARATELY EXPLAINED BY ASSESSEE - WHILE EXPLAINING THE VARIOUS CREDITS AND INVESTMENTS IT IS POSSIBLE THAT THE ASSESSEE MAY BE SUCCESSFUL IN EXPLAINING SOME OF THEM BUT THAT DOES NO T BY ITSELF MEAN THAT THE ENTIRE INVESTMENTS HAS TO BE CONSIDERED AS EXPLAINED. IT IS EACH AND INDIVIDUAL ENTRY ON WHICH THE MIND HAS TO BE APPLIED BY THE TAXING AUTHORITY WHEN AN EXPLANATION IS OFFERED BY THE ASSESSEE - CIT V. R.S. RATHORE [1995] 212 ITR 390 (RAJ.). BURDEN IS ON ASSESSEE TO PROVE SOURCE OF RECEIPT - THE LAW IS WELL SETTLED THAT THE ONUS OF PROVING THE SOURCE OF A SUM OF MONEY FOUND TO HAVE BEEN RECEIVED BY AN ASSESSEE IS ON HIM. WHERE THE NATURE AND SOURCE OF A RECEIPT WHETHER IT BE OF M ONEY OR OTHER PROPERTY CANNOT BE SATISFACTORILY EXPLAINED BY THE ASSESSEE IT IS OPEN TO THE REVENUE TO HOLD THAT IT IS THE INCOME OF THE ASSESSEE AND NO FURTHER BURDEN LIES ON THE REVENUE TO SHOW THAT THE INCOME IS FROM ANY PARTICULAR SOURCE - ROSHAN DI H ATTI V. CIT [1977] 107 ITR 938 (SC)/KALE KHAN MOHAMMAD HANIF V. CIT [1963] 50 ITR 1 (SC). FROM THE ABOVE SPECIFIC REASONS THE PEAK CREDIT STATEMENT FURNISHED IS NOT ACCEPTED AND HEREBY REJECTED. AS HAS BEEN MENTIONED ABOVE ACCOUNT IN TALLY HAS BEEN 10 EXAM INED AND IT IS FOUND FROM THE VARIOUS ACCOUNTS THAT THERE ARE CLEAR CUT NARRATIONS AGAINST THE ENTRIES OF CASH BOOK VIZ ' BEING CASH RECEIVED M/S VIJAY TRADERS AGAINST CROSS ENTRY BY CHE NO 236215' ' 'BEING CASH RECEIVED FROM AMOL CONSTRUCTION BY ASHOKJI PADLIYA (ENTRY CROSS)' ' CH NO. 221096 OF THE BOR LTD DATED 12/05/2009 FROM SMT NEETA KATUA AGAINST CROSS ENTRY' 'CH NO. 795143 OF THE BOR LTD DATED 04/06/2009 FROM SMT NEETA KATUA AGAINST CROSS ENTRY (PRANAV PANDYAJI) 'AND SIMILAR ENTRIES IN LEDGERS OF SMT ANITA BHANDARI NAVKAR ENTERPRISES NXLNM I.E. NARAYN LAI MUNDRA SUBHASHJI ASHOK KUMAR MUKESH JAIN (STAFF) BHARAT KUMAR BHAVSAR DINESH BHAVSAR ELECTRICIAN AAHA TRIVESI CROSS VISHAL JAIN . THE NARRATION AS WELL AS VERIFIABILITY OF ABOVE TRANSAC TIONS FROM BANK ARE CLEARLY PROVES THAT THE ASSESSEE HAS TAKEN ACCOMMODATION ENTRIES BY WAY OF GIVING CASH TO RESPECTIVE PERSONS AND HAS OBTAINED CHEQUES. SIMILARLY THE ASSESSEE HAS ALSO TAKEN ACCOMMODATION ENTRIES BY WAY OF ISSUING CHEQUES AND TAKING CAS H FROM VARIOUS PERSONS. IT IS ALSO IMPORTANT TO MENTION HERE THAT THESE INSTANCES HAVE ALSO NOT ONLY BEEN FOUND IN THE 'ACTUAL CC (2000 - 2010)KUTUBI' ACCOUNTS BUT THESE ARE ALSO MENTIONED/FOUND IN THE MATERIAL SEIZED/IMPOUNDED DURING THE COURSE OF SEARCH A ND SURVEY ACTION CARRIED OUT AT THE RESIDENTIAL PREMISES OF PARTNERS AS WELL AS BUSINESS PREMISES OF THE ASSESSEE I.E. (ANNEXURE - AS - 1 TO AS - 3 FROM RESIDENCE OF R.N. BHANDARI ANX - A - 1 TO A - 3 FROM RESIDENCE OF VINOD KATUWA AND ANX - A - 1 TO A - 30 FROM BUSINESS P REMISES OF CHETAK 11 COMPLEX). AS STATED ABOVE THE ASSESSEE HAS NOT EXPLAINED THE ABOVE ENTRIES EVEN THOUGH THE MATERIAL/IMPOUNDED HAS ALSO NOT BEEN SATISFACTORILY EXPLAINED BY THE ASSESSEE. IN SUCH SCENARIO THE ASSESSEE HAS FAILED TO EXPLAIN THE ISSUE IN A LL CHARACTERISTIC.........' FROM THE ABOVE IT IS APPARENT THAT THE ADDITION MADE BY THE AO WAS BASED ON COMPLETE MATERIAL EVIDENCES AND AFTER EXAMINATION AND REBUTT ING SUBMISSION S OF THE ASSESSEE. CONSIDERING THE ABOVE THE AO HAD RIGHTLY MADE THE ADDITI ON WHICH HAS CONFIRMED BY THE LD.CIT(A)CENTRAL ALSO AND THE HON'BLE ITAT IS REQUESTED TO UPHOLD THE ENTIRE ADDITION IN FAVOUR THE REVENUE AND REJECT THE CLAIM OF THE ASSESSEE. 2. 5 AFTER CONSIDERING THE RIVAL SUBMISSIONS WE HAVE FOUND THAT THE ASSESSEE HA S EXPLAINED THE TRANSACTIONS APPEARING IN ASSESSEES ACCOUNT IN THE BOOKS OF TH E FIRM THROUGH LETTERS DATED 14.3. 2011 AND 16.5.2011. ADMITTEDLY THIS ASSESSEE DID NOT MAINTAIN HIS BOOKS OF ACCOUNT BUT FOR EXPLAINING THE STATE OF AFFAIRS HE HAS PREPARED A INFLOW AND OUTFLOW STATEMENT OF FUNDS BETWEEN THE FIRM AND THE ASSESSEE WHICH WAS PRODUCED BEFORE THE AO. IT IS FOUND THAT THE SOURCE OF INVESTMENT MADE BY THE ASSESSEE IN THE CASH BOOK WAS EITHER FROM DRAWINGS MADE FROM THE FIRM OR FR O M INCOME EARNED BY HIM. THE SOURCE OF INVESTMENT IN THE FIRM STANDS EXPLAINED AND ONCE RECEIPTS 12 HAVE BEEN DISCLOSED AND DULY ACCOUNTED FOR BY THE FIRM FOR WHICH THE ASSESSEE IS PARTNER THEN NO ADDITION CAN BE MADE ON THE ROTATION OF SAME AMOUNT. OTHERWISE IT WOULD TANTAM OUNT TO DOUBLE ADDITION. ACCORDINGLY WE FIND FORCE AND MERIT IN THIS GROUND OF ASSESSEES APPEAL AND ORDER TO DELETE TH IS ADDITION FROM THE HANDS OF THE ASSESSEE BY ALLOWING THIS GROUND . 2. 6 GROUND NO. 2 OF ASSESSEES APPEAL IS AGAINST CHARGING OF INTER EST U/S 234A 234B 234C & 234D OF THE ACT. C HARGING OF INTEREST U/S 234A 234B AND 234C CANNOT BE ALLOWED AS THE CHARGING OF INTEREST UNDER THESE SECTIONS IS MANDATORY UNDER THE ACT. HOWEVER THE ASSESSEE IS ENTITLED TO CONSEQUENTIAL RELIEF. THIS GROUND STANDS DISMISSED. 2.7 IN THE RESULT THE APPEAL OF THE ASSESSEE STANDS PARTLY ALLOWED. 3. THE SOLE GROUND RAISED BY THE REVENUE READS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A)(C) JAIPUR HAS ERRED IN DELETING THE ADDIT ION MADE U/S. 68 OF RS. 20 00 000/ - WITHOUT APPRECIATING THE FACT 13 THE ASSESSEE FAILED TO PRODUCE COPY OF BANK ACCOUNT STATEMENT ITR AND PAN OF SHRI BHAGWATI LAL PRAJAPAT DURING THE ASSESSMENT PROCEEDINGS THEREFORE THE GENUINENESS OF TRANSACTION AND CREDI T WORTHINESS NOT PROVED . 3.1 BRIEFLY STATED THE FACTS OF THE CASE ARE THAT AN AMOUNT OF RS. 20 LAKHS WAS RECEIVED BY THE A SSESSEE FROM MR. BHAGWATI LAL PRAJAPAT. THE AO DURING THE ASSESSMENT PROCEEDINGS REQUIRED THE A SSESSEE TO SUBMIT DETAILS IN RESPECT TO THE TRANSACTION WITH BHAGWATI LAL PRAJAPAT. THE A SSESSEE FURNISHED THE BANKERS CONFIRMATION AND COPY OF PASSPORT OF MR BHAGWATI LAL PRAJAPAT. THE A SSESSEE SUBMITTED THAT THE AMOUNT OF RS 20 LACS HAS BEEN RECEIVED AS FRIENDLY ASSISTANCE FROM MR BHAGWAT I LAL PR A JAPAT. HOWEVER THE AO MADE AN ADDITION OF RS 20 L A KHS IN THE HANDS OF A SSESSEE S T ATING THAT THE ASSESSEE HAS FAILED TO PROVE THE GENUINENESS OF TRANSACTION AND CREDIT WORTHINESS OF SHRI BHAGWATI LAL PRAJPAT. AGGRIEVED THE ASSESSEE FILED APPEAL BE FORE THE LD CIT(A) WHO AFTER TAKING INTO CONSIDERATION THE SUBMISSIONS OF THE A SSES S EE AND THE DOCUMENTS PLACED ON RECORD HELD THAT THE CREDIT WORTH INES S AND IDENTITY OF THE CREDITORS WAS ESTABLISHED AND THER EFORE THE ADDITION OF RS 20 LAKHS MADE TO THE IN COME OF THE ASSESSEE HAS TO BE DELETED. THE RELEVANT PARA OF THE CIT(A) READS AS UNDER : 14 GIVEN THIS EVIDENCE IT DOES NOT APPEAR TO BE JUSTIFIABLE TO MAKE AN ADDITION ON ACCOUNT OF THIS LOAN WITHOUT BRINGING ON RECORD ANY SUBSTANTIAL EVIDENCE BY THE AO TO REBUT THE EVIDENCE PLACED ON RECORD. THE FINANCIAL WORTH AND IDENTITY OF THE CREDITOR IS ESTABLISHED BY THE FACT THAT HE HAD OBTAINED THIS LOAN FROM SBBJ AGAINST HIS FDRS WHICH HAS BEEN CERTIFIED BY THE BANK. THUS THERE WAS ENOUGH EVIDENCE ON RECORD TO P ROVE THE IDE NTITY AND CREDITWORTHINESS OF SHRI BHAGWATI LAL PRAJAPAT IN THE CASE. 3.2 WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE CAREFULLY PERUSED THE ENTIRE MATERIAL ON RECORD . BOTH THE RIVAL REPRESENTATIVES REITERATED THEIR ORIGINAL ARGUMENTS. TH E LD. D.R. RELIED ON THE ORDER OF THE A.O WHEREAS THE LD. A.R. RELIED ON THE ORDER OF THE LD. CIT(A). THE DEPARTMENT BY THIS GROUND HAS CHALLENGED THE ACTION OF THE L D CIT(A) OF DELETING THE ADDITION BY ALLEGING THAT THE A PPELLANT HAS FAILED TO PROVE THE GENUINENESS OF THE TRANSACTION AND CREDIT WORTHINESS OF SHRI BHAGWATI LAL PRAJAPAT. THE LD. A .R. SUBMITTED THAT T HE ASSESSEE DURING THE COURSE OF APPELLATE PROCEEDING HAS PRODUCED THE COPY OF PASSPORT OF MR BHAGWATI LAL PRAJAPAT TO PROVE HIS IDENTITY. THE COPY OF FDRS AGAINST WHICH LOAN WAS TAKEN BY SHRI BHAGWATI LAL PRAJAPAT FROM SBBJ COPY OF CONFIRMATION FROM SBBJ BANK AND AFFIDAVIT FROM MR BHAGWATI LAL PRAJAPAT WERE FURNISHED TO JUSTIFY THE CAPACITY OF MR BHAGWATI LAL PR A JAPAT SO AS TO ADVANCE FUNDS. T HE LD. A .R. FURTHER SUBMITTED THAT 15 F INALLY IN ORDER TO PROVE THE GENUINENESS HE SUBMITTED THE COPY OF HIS BANKER AS WELL AS BHAGWATI LAL PRAJAPATS BANKER. THE SUBMISSION PLACED BEFORE L D CIT(A) IS AVAILABLE AT PAGE NO A1 TO A30. THE LD. A .R. SUBMITTED T HAT W ITH THE DETAILED SUBMISSIONS AND THE DOCUMENTS CORROBORATING THEM IT IS EVIDENT THAT THE A SSESSEE HAS DULY DISCHARGED HIS ONUS AND THEREFORE NO ADDITION WAS WARRANTED UNDER THE CURRENT GROUND. 3.3 AFTER CONSIDERING THE RIVAL SUBMISSIONS WE HAVE F OUND THAT THE IDENTITY AND GENUINITY OF THIS TRANSACTION DULY STAND PROVED FROM THE COPY OF PASSPORT OF SHRI BHAGWATI LAL PRAJAPAT AND BY THE CONFIRMATION FILED RESPECTIVELY. COPIES OF FDRS AGAINST WHICH LOAN WAS TAKEN BY SHRI BHAGWATI LAL PRAJAPAT FROM SBBJ COPY OF CONFIRMATION FROM SBBJ AND AFFIDAVIT FROM SHRI BHAGWATI LAL PRAJAPAT WERE ALSO FURNISHED WHICH COULD VERY WELL JUSTIFY HIS CAPACITY TO ADVANCE A LOAN OF RS. 20 LAKHS. COPY OF ASSESSEES BANKER AS WELL AS THAT OF THE CREDITOR IS ALSO AVAILABL E ON RECORD. THEREFORE IN THE FACTS AND CIRCUMSTANCES OF THE CASE WE CANNOT INTERFERE IN THE IMPUGNED FINDING OF THE LD. CIT(A). 3. 4 IN THE RESULT THE APPEAL OF THE REVENUE STANDS DISMISSED. 16 SHRI VINOD KATUWA ITA NO. 106/JU/ 2014 [A.Y. 2007 - 08] 4. TH IS APPEAL OF THE ASSESSEE FOR A.Y. 2007 - 08 IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A) DATED 6.1.2014. 4.1 F IRST GROUND RAISED IN THIS APPEAL BY THE ASSESSEE READS AS UNDER : UNDER THE FACTS & CIRCUMSTANCES OF THE CASE AND IN LAW LD. CIT (APPEALS) H AS ERRED IN UPHOLDING THE ADDITION OF RS. 3 40 33 146/ - U/S AS UNEXPLAINED INCOME ON THE BASIS OF DEAF AND DUMB PAPERS. 4.2 BRIEFLY STATED THE FACTS OF THE CASE ARE THAT D URING THE COURSE OF SEARCH SEVERAL LOOSE PAPERS WERE FOUND AND SEIZED F ROM THE RE SIDENCE OF THE ASSESSEE A S PER A NNEXURE S A1 TO A - 3. THESE DOCUMENTS ARE AVAILABLE IN THE P.B. OF THE ASSESSEE FROM PAGE S 1 TO 81. WHEN CONFRONTED TO THE ASSESSEE WITH REGARD TO THEM TH E A SSESSEE OFFERED EXPLANATION I N RESPECT OF ALL THESE PAPERS BEFORE AO AS WELL AS LD CIT (A). HOWEVER AO MADE AN ADDITION OF RS. 3 40 33 416/ - ON THE BASIS OF THESE PAPERS WHICH HAS BEEN SUSTAINED BY L D. CIT(A). AGGRIEVED THE ASSESSEE HAS RAISED THIS GROUND IN SECOND APPEAL. 17 4.3 THE LD. A.R. HAS SUBMITTED AS UNDER: MO ST OF THESE PAPERS ARE IN THE NATURE OF MEMORANDA NOTINGS AND DO NOT CONTAIN COMPLETE PARTICULARS AND NATURE OF THE TRANSACTIONS AND ALSO DONT CONTAIN DATE OF THE TRANSACTIONS. THESE PAPERS ARE IN THE NATURE OF DEAF AND DUMB PAPERS WHICH ARE NOT CAPABLE O F ANY CONCLUSIVE INFERENCES. FOR EXAMPLE PAPER AT PAGE NUMBER 3 OF THE PAPER BOOK CAN BE SEEN WHICH HAS RESULTED IN ADDITION OF RS 1 25 00 000/ - . HOWEVER IF THIS PAPER IS SEEN IT IS NOT POSSIBLE TO MAKE OUT ANYTHING ON THE BASIS OF THIS PAPER AND TO DRAW A NY CONCLUSIVE INFERENCE ON THE BASIS OF THIS PAPER. SIMILARLY PAPERS AT PAGE NO 2 4 5 6 AND 8 MAY ALSO BE SEEN. IT IS IMPOSSIBLE TO CONCLUDE ANYTHING ON THE BASIS OF THESE PAPERS THEY DO NOT CONCLUDE THAT ANY TRANSACTION HAS BEEN TAKEN PLACE OR NOT. EVE N THE NATURE OF TRANSACTION IS NOT CLEAR AS TO WHETHER THEY ARE RECEIPTS OR PAYMENTS OR INCOME OR EXPENDITURE OR LOAN GIVEN OR TAKEN OR RECONCILIATION ENTRIES ETC. IT IS ALSO NOT CLEAR THAT WHETHER THESE PERTAINS TO ASSESSEES BUSINESS IF YES TO WHICH PE RIOD. IN VIEW OF THIS NATURE OF MOST OF THE PAPERS FOUND IT WAS NOT CORRECT FOR THE LD AO AND LD CIT(A) TO MAKE OR SUSTAIN ANY ADDITION ON THE BASIS OF THESE PAPERS. IT IS NOT POSSIBLE TO DETERMINE THE PEAK IN THE ABSENCE OF DATE AND NATURE OF THE TRANSA CTION. WHILE MAKING ANY ADDITION ON THE BASIS OF ANY DOCUMENT AT LEAST THIS HAS TO BE ASCERTAINED AS TO WHETHER THE ENTRIES REPRESENT INCOME OF THE ASSESSEE AS PER ANY PROVISION OF 18 THE INCOME TAX LAW. WITHOUT DOING SO THEY WERE NOT JUSTIFIED IN MAKING SUCH A HUGE ADDITION. IT IS RELEVANT TO MENTION THAT IN M/S CHETAK COMPLEX WERE THE ASSESSEE IS A PARTNER THERE IS A REAL ESTATE BUSINESS WHERE THERE WERE MANY TRANSACTION IN CASH AND IT IS LIKELY THAT CASH RECONCILIATION OR MEMORANDA NOTING OF THE TRANSACTIO N TO BE UNDERTAKEN IN RESPECT OF CONSTRUCTION OR SALES ACTIVITY OR TEMPORARY CASH RECEIPT/PAYMENT ENTRIES IS BEING NOTED WHICH BECOMES IRRELEVANT AFTER ACTUAL TRANSACTION HAS ALREADY BEEN TAKEN PLACE. ONCE THE ACTUAL TRANSACTION TAKES PLACE THE SAME IS CAP TURED IN THE KUTBI BOOKS WHICH CONTAINED THE ENTIRE RECORD OF CASH TRANSACTIONS. WHILE COMPUTATION OF INCOME OF CHETAK COMPLEX KUTBI BOOKS HAS BEEN MADE THE BASIS. EVEN THE DEPARTMENT HAS TAKEN SALES ON THE BASIS OF KUTBI BOOKS ONLY. ONCE ALL THE CASH AND UNACCOUNTED TRANSACTIONS SYSTEMATICALLY REORDERED IN KUTBI BOOKS HAVE BEEN TAKEN INTO ACCOUNT FOR COMPUTING THE INCOME OF M/S CHETAK COMPLEX THESE PAPERS SHOULD NOT BE SEPARATELY CONSIDERED. IT IS IMPORTANT TO MAKE A REFERENCE TO SOME OTHER PAPERS AT PAGE 48 TO 60 OF THE PAPER BOOK WHICH ITSELF SHOW THAT THESE PAPER BELONGS TO THIRD PARTY AND PROBABLY THEY WERE RECEIVED FOR VERIFICATION / NEGOTIATION WITH THE CONTRACTORS FOR MAKING THE PAYMENTS. THIS IS USUAL FOR REAL ESTATE BUSINESS TO RECEIVE SUCH R EFERENCES BUT THE PAPERS ITSELF REVEALS THAT THEY ARE NOT RELATED TO THE ASSESSEE. HOWEVER LD. AO HAS MADE THE ADDITION ON THE BASIS OF THESE PAPERS. THE OTHER PAPERS ALSO MOSTLY CONTAIN SUCH MEMORANDUM ENTRIES ONLY. THE PAPER WISE EXPLANATION IS AVAILABL E AT PAGE NO. A11 TO A19 OF THE PAPER 19 BOOK. FURTHER THE STATEMENT RECORDED ON THESE PAPERS AND REPLIES SUBMITTED DURING THE CASE IN ASSESSMENT PROCEEDINGS ARE AVAILABLE AT DIFFERENT PAGES OF THE PAPER BOOK ALSO JUSTIFIES THAT NO ADDITION IS WARRANTED ON TH E BASIS OF THESE PAPER. RELIANCE ON THE FOLLOWING JUDGMENTS IS BEING PLACED WHICH HIGHLIGHT THE LEGAL POSITION THAT NO ADDITION CAN BE MADE ON THE BASIS OF DEAF AND DUMB PAPERS AND ROUGH JOTTINGS FROM WHICH NOTING IS DISCERNIBLE: BANSAL STRIPS (P) LTD. & O RS. VS. A CIT (2006) 100 TTJ (DEL) 665 WHILE COMPLETING AN ASSESSMENT THE AO IS NOT A COURT. HE IS ALSO NOT BOUND BY TECHNICAL RULES OF EVIDENCE. HE MAY CONSIDER MATERIAL WHICH WOULD BE WHOLLY INADMISSIBLE IN A COURT OF LAW. HE MAY DRAW HIS CONCLUSION AND INFERENCES ON THE CUMULATIVE EFFECT OF VARIOUS CIRCUMSTANCES BASED UPON THE TEST OF HUMAN PROBABILITY. AT THE SAME TIME THOUGH TECHNICAL RULES OF EVIDENCE DO NOT APPLY THE AO IS BOUND BY THE PRINCIPLES OF NATURAL JUSTICE. HE CANNOT DRAW HIS INFERENCES ON THE BASIS OF SUSPICION CONJECTURES AND SURMISES. SUSPICION HOWSOEVER STRONG CANNOT TAKE PLACE OF MATERIAL IN SUPPORT OF FINDINGS OF THE AO. THE AO SHOULD ACT IN A JUDICIAL MANNER PROCEED WITH A JUDICIAL SPIRIT AND COME TO A JUDICIAL CONCLUSION . IF AN I NCOME NOT ADMITTED BY AN ASSESSEE IS TO BE ASSESSED IN THE HANDS OF THE ASSESSEE THE BURDEN TO ESTABLISH THAT SUCH INCOME IS CHARGEABLE TO TAX IS ON THE AO. IN THE ABSENCE OF ADEQUATE MATERIAL AS TO THE NATURE AND OWNERSHIP OF THE TRANSACTION UNDISCLOSED INCOME CANNOT BE ASSESSED IN THE HANDS OF THE ASSESSEE MERELY BY ARITHMETICALLY TOTALLING VARIOUS FIGURES JOTTED DOWN ON LOOSE DOCUMENTS. FOR THE PURPOSE OF RESORTING TO DEEMING PROVISIONS DUMB DOCUMENTS OR DOCUMENTS WITH NO CERTAINTY HAVE NO EVIDENTIARY VALUE. 20 YUDHVIR RAMLAL MENI VS. DEPUTY COMMISSIONER OF INCOME TAX (2011) 9 ITR 781 (AHD) ADDITION MADE BY THE AO ON ACCOUNT OF UNEXPLAINED INVESTMENT ON THE BASIS OF SOME VAGUE NOTINGS ON CERTAIN LOOSE PAPERS CANNOT BE SUSTAINED. SMT. BOMMANA SWARNA REK HA VS. ASSISTANT COMMISSIONER OF INCOME TAX (2005) 94 TTJ (VISAKHA) 885 THE LOOSE PAPER DOES NOT HAVE ANY DATE NOR NAME NOR NAME OF THE ASSESSEE OR ASSESSEES HUSBAND. THE AO HAS TREATED THIS PAPER AS BELONGING TO THE ASSESSEE IGNORING THE FACT THAT PRESU MPTION UNDER S. 132 SUB - S. (4A) IS AVAILABLE ONLY AGAINST THE PERSON FROM WHOSE POSSESSION THE DOCUMENT IS FOUND. THERE IS NO DISPUTE THAT THIS PAPER WAS NOT FOUND FROM THE POSSESSION OF THE ASSESSEE BUT FROM THE BUSINESS PREMISES OF B THE HUSBAND OF THE ASSESSEE. THE TOTAL OF THE LOOSE PAPER IS RS. 42 72 081 OUT OF WHICH THE AO HAS REDUCED A SUM OF RS. 25 53 818 TREATING THAT THESE RELATE TO THE TRANSACTIONS FOR THE PURPOSES MADE BY B PROPRIETORSHIP CONCERN OF B BUT TREATED PART OF THE TRANSACTION R ELATING TO THE ASSESSEE. THE LOOSE PAPER FOUND AND SEIZED HAS TO BE READ IN TOTO. IT CANNOT BE READ AS PARTLY BELONGING TO THE HUSBAND OF THE ASSESSEE AND PARTLY BELONGING TO THE ASSESSEE. THE AO HAS NOT BROUGHT OUT ANY COGENT EVIDENCE OR MATERIAL ON RECOR D WHICH MAY PROVE THAT THE PART OF THE ITEMS STATED IN THE PAPER REPRESENT THE TRANSACTIONS ENTERED INTO BY THE ASSESSEE DURING THE PERIOD OF THE BLOCK ASSESSMENT. THE DESCRIPTION EXCEPT THE SUM OF RS. 6 28 831 REPRESENTS THE EXPENDITURE AND IN ANY CASE A DEDUCTION WAS TO BE MADE TOWARDS THE INCOME FROM THE BUSINESS. THE ASSESSEE WILL ALSO BE ENTITLED FOR THE DEDUCTION IN RESPECT OF THE EXPENSES INCURRED BY HER DURING THE COURSE OF THE BUSINESS. ONUS IS ON THE AO TO PROVE THAT THE TRANSACTIONS AS STATED I N THE LOOSE PAPER WHICH IS NOT FOUND FROM THE POSSESSION OF THE ASSESSEE RELATE TO THE ASSESSEE IS MORE. THE AO HAS NOT DISCHARGED THE ONUS AND NO ADDITION CAN BE MADE MERELY ON THE BASIS OF SURMISES AND CONJECTURES SPECIALLY WHEN 21 PART OF THE TRANSACTION S WERE CONSIDERED IN THE CASE OF THE ASSESSEES HUSBAND. THIS IS A SETTLED LAW THAT A PAPER HAS TO BE READ IN TOTO NOT IN PART. THEREFORE THE ADDITION IS DELETED. ASSISTANT COMMISSIONER OF INCOME TAX VS. SATYAPAL WASSAN (2008) 5 DTR (JAB)(TRIB) 202 IT IS MERELY BY SURMISES THAT THE AO HAS TAXED IT IN THE YEAR 1989 - 90. AS A RESULT IT IS HELD THAT DOCUMENT IN QUESTION IS A NON - SPEAKING DOCUMENT. NOTWITHSTANDING ABOVE THE DOCUMENT IS ONLY A PIECE OF PAPER AND CANNOT BE CALLED TO BE A 'BOOK' WITHIN THE MEANING OF S. 68. IN ORDINARY SENSE A BOOK SIGNIFIES A COLLECTION OF SHEETS OF PAPER BOUND TOGETHER IN A MANNER WHICH CANNOT BE DISTURBED OR ALTERED EXCEPT BY TEARING THEM APART. THIS BINDING IS OF A KIND WHICH IS NOT INTENDED TO BE MOVABLE IN THE SENSE OF BEING UNDONE AND PUT TOGETHER AGAIN. AS PER S. 34 OF INDIAN EVIDENCE ACT BOOK MEANS A COLLECTION OF SHEETS OF PAPER BOUND TOGETHER WITH THE INTENTION THAT SUCH BINDING SHALL BE PERMANENT. UNBOUND PAPERS COLLECTIVELY KEPT IN ONE VOLUME IN WHATEVER QUANTI TY THOUGH FILLED UP WITH ONE CONTINUOUS ACCOUNT ARE NOT A BOOK OF ACCOUNT WITHIN THE MEANING OF S. 34 OF INDIAN EVIDENCE ACT. NO ADDITION UNDER S. 68 CAN BE MADE ON THE BASIS OF LOOSE SHEET BEING THE DOCUMENT FOUND DURING THE COURSE OF THE SEARCH. EVEN OTHERWISE SUCH PRESUMPTION CAN ONLY BE RAISED WHEN DOCUMENT IS SPEAKING ONE AND IT REFLECTS COMPLETE TRANSACTIONS WITHOUT TWO INTERPRETATIONS. AS A RESULT THE IMPUGNED DOCUMENT IS A DUMB DOCUMENT AND NO ADDITION CAN BE MADE ON THAT BASIS. 22 MS. AISHW ARYA K. RAI VS. DEPUTY COMMISSIONER OF INCOME TAX (2007) 104 ITD 166 (MUMBAI)(TM) COMING TO LOOSE PAPER THE SAME WAS WRITTEN IN CODED MANNER. ONE INTERPRETATION OF THE REVENUE IS THAT EXTREME RIGHT COLUMN OF FIGURE TOTALLING '78' REPRESENTS CHEQUE PAYMEN TS AND THE MIDDLE COLUMN REPRESENTS CASH PAYMENTS AND CHEQUE PAYMENTS. APROPOS THAT ASSESSEES CONTENTION IS THE WORD 'PROMISE' IS CLEARLY WRITTEN ON THE SIDE OF INSCRIPTION THEREFORE THESE WERE PROMISES MADE ACTUAL PAYMENTS ARE DULY RECORDED IN THE B OOKS OF ACCOUNTS WHICH HAVE BEEN VERIFIED. THE ASSESSEES VERSION COULD HAVE BEEN VERY WELL CLARIFIED FROM THE END OF BUILDERS REGARDING SCHEDULE OF PAYMENTS ANY ON - MONEY INVOLVED AND THE ACTUAL PAYMENT MADE. NO RECORD OF THE BUILDERS HAS BEEN PRODUCED B Y THE DEPARTMENT FOR THE REASON BEST KNOWN TO THEM BUT AT VARIOUS PLACES THE AO AND CIT(A) HAVE GIVEN FINDING THAT THE BUILDERS HAVE CLARIFIED THAT THE PROPERTY WAS TRANSACTED FOR AGREED VALUE OF RS. 90 LAKHS. THE REVENUE HAS REFERRED TO ENTRY '10/99' O N THE LEFT - HAND SIDE '1.40' AND ON THE RIGHT - HAND SIDE '56' IS WRITTEN. ACCORDING TO THE REVENUE '1.40'REPRESENTS CASH COMPONENTS AND CHEQUE COMPONENTS. IN THAT CASE ALSO ADDITION SHOULD HAVE BEEN RS. 84 LAKHS AND NOT RS. 50 LAKHS. UNDER THESE CIRCUMSTANCE S THE REVENUE COULD HAVE BETTERED ITS CASE BY INQUIRY FROM THE BUILDER CONCERNED. HAVING NOT DONE SO THINGS CANNOT BE ASSUMED IN THIS BEHALF SO AS TO UPHOLD THE ADDITION. IN THE GIVEN FACTS AND CIRCUMSTANCES THE REVENUES STAND SUFFERS FROM CONTRADICTIO NS IN THE INTERPRETATION OF THE SEIZED PAPERS AS AGAINST WHICH THE EXPLANATIONS OF THE ASSESSEE THOUGH NOT FULLY VERIFIABLE APPEARS MORE REASONABLE. IN THE GIVEN FACTS AND CIRCUMSTANCES THE LOOSE PAPER DOES NOT SUPPORT CASE OF THE REVENUE. S.P. GOYAL VS. DEPUTY COMMISSIONER OF INCOME TAX (2002) 82 ITD 85 (MUMBAI)(TM) LOOSE SHEETS OF PAPER TORN OUT OF DIARY FOR THE YEAR 1992 COULD NOT BE CONSTRUED AS BOOKS FOR THE PURPOSE OF S. 68 23 FURTHER LOOSE PAPER IN ITSELF HAS NO INTRINSIC VALUE AND IT DOES NOT R EPRESENT NEGOTIABLE INSTRUMENT WHICH CAN BE EXCHANGED FOR A SUM OF RS. 60 LAKHS ASHWANI KUMAR VS. INCOME TAX OFFICER (1992) 42 TTJ (DEL) 644 IN ORDER TO ATTRACT THE PRESUMPTION UNDER S. 132(4A) THE FIRST REQUIREMENT IS THAT THE DOCUMENT SHOULD BE FOUND IN POSSESSION OR CONTROL OF THE ASSESSEE. IN THIS CASE THE REVENUE HAS BEEN SAYING THAT THE DOCUMENT WAS FOUND INSIDE THE SHOP OF THE ASSESSEE. HOWEVER THERE IS NOTHING IN THE ORDERS OF THE AUTHORITIES BELOW TO SHOW THAT THE SLIP WAS IN POSSESSION AND CO NTROL OF THE ASSESSEE. EVERYTHING PHYSICALLY PRESENT INSIDE THE SHOP OF A PERSON MAY NOT BE IN THAT PERSON'S CONTROL AND POSSESSION. FOR PROVING POSSESSION IT IS NECESSARY TO SHOW THAT THE PERSON CONCERNED HAD THE INTENTIO N POSSESSENDI. IN THIS CASE NOTHIN G OF THAT SORT IS POINTED OUT BY THE AUTHORITIES BELOW. THEN FOR PRESUMING THAT THE CONTENTS OF THE BOOKS OF ACCOUNT OR DOCUMENT ARE TRUE THE DOCUMENT MUST BE SPEAKING ONE. IN THIS CASE THE SLIP SAID TO HAVE BEEN RECOVERED BY THE REVENUE DOES NOT CONTAI N ANY NARRATION IN RESPECT OF THE VARIOUS FIGURES NOTED THEREIN. THE SLIP DOES NOT INDICATE WHETHER THE FIGURES REFERRED TO QUANTITIES OF MONEY OR TO QUANTITIES OF GOODS AND WHETHER ONE SIDE AND IF SO WHICH SIDE REPRESENTS RECEIPTS WHICH SIDE REPRESENTED OUTGOINGS. THUS IS THUS A DUMB DOCUMENT AND AS THE ORDERS OF THE AUTHORITIES BELOW WOULD SHOW THEY HAVE MERELY ADDED THE TOTAL OF THE RIGHT SIDE OF THE SLIP WITHOUT SUPPLYING THE FIGURES ANY LANGUAGE TO INDICATE THEIR MEANINGS. IN THE CASE OF SUCH A DU MB DOCUMENT THE PROVISIONS OF S. 132(4A) DO NOT PERMIT ANYONE TO PRESUME THAT THE TOTAL OF THE FIGURES OF RIGHT SIDE OF THE SLIP REPRESENTS THE ASSESSEE'S INCOME. THE PRESUMPTION AT THE MOST IS ATTRACTED TO THE FIGURES AND A FURTHER PRESUMPTION THAT THEY REPRESENT THE INCOME OF THE ASSESSEE IS NOT PERMISSIBLE UNDER S. 132(4A). WHEN A DUMB DOCUMENT LIKE THE PRESENT SLIP IS RECOVERED AND THE REVENUE WANTS TO MAKE USE OF IT IT IS THE DUTY OF THE REVENUE TO COLLECT NECESSARY EVIDENCE WHICH MAY PROVIDE AN AC CEPTABLE NARRATION TO THE VARIOUS 24 ENTRIES. THE EVIDENCE COLLECTED SHOULD BE SUCH THAT ANY REASONABLE MAN WOULD ACCEPT THE HYPOTHESIS ADVANCED BY THE REVENUE THAT THE FIGURES WRITTEN ON THE RIGHT SIDE OF THE SLIP REPRESENT INCOMES EARNED BY THE ASSESSEE. IT WAS CONCEDED THAT NO SUCH EVIDENCE HAS BEEN BROUGHT ON RECORD. FURTHER THE REVENUE HAS GIVEN NO ADJUSTMENT TO THE ENTRIES ON THE LEFT SIDE OF THE SLIP. THEREFORE THE SLIP IN QUESTION DID NOT INDICATE THAT THE FIGURES REPRESENTS RECEIPT OF INCOME TO THAT EXTENT BY THE ASSESSEE AND IT WAS NOT PERMISSIBLE TO THE REVENUE WITHOUT PROCURING ANY EVIDENCE TO SUPPORT SUCH A HYPOTHESIS THAT THE ENTRIES RECORD THE INCOME OF THE ASSESSEE AND TO PRESUME SUCH ASSUMED NARRATION OF THE ENTRIES TO BE TRUE. THEREFORE THE ADDITIONS CANNOT BE SUSTAINED AND THEY ARE HEREBY DELETED. S.K. GUPTA VS. DEPUTY COMMISSIONER OF INCOME TAX 1999 63 TTJ DEL 532 PRESUMPTION ARISING OUT OF SUB S. 4A OF S. 132 IS AVAILABLE TO THE REVENUE FOR THE LIMITED PURPOSE OF SEARCH AND SEIZURE AND THE PROCEEDINGS UNDER S. 132(5) AND 132(11) . SUCH PRESUMPTIONS ARE AVAILABLE FOR THE LIMITED PURPOSE OF ESTIMATING THE UNDISCLOSED INCOME AND THE ESTIMATED TAX LIABILITY FOR THE PURPOSE OF DECIDING WHETHER THE SEIZED ASSETS SHOULD BE SEIZED OR RETAINED. T HE PRESUMPTION CANNOT HAVE THE EFFECT OF EXCLUDING OR OVERRIDING THE PROVISIONS OF S. 69 DURING THE COURSE OF REGULAR ASSESSMENT PROCEEDINGS. THEREFORE THERE IS NO CORROBORATING EVIDENCE OF THE CONTENTS OF THE DOCUMENTS AND ALSO THERE IS NO MATERIAL TO ASC ERTAIN THE TRUTHFULNESS OF THE STATEMENT. IN SUCH CIRCUMSTANCES IT CANNOT BE PRESUMED THAT SEIZED DOCUMENT SHOWS ANY TRANSACTION OF SALE AND PURCHASE ENTERED INTO BY THE ASSESSEE WHICH IS NOT DISCLOSED BY HIM. RAJ PAL SINGH RAM AUTAR VS. ITO 1991 39 TTJ DE L 544 FOLLOWED; PUSHKAR NARAIN SARAF VS. CIT 1990 86 CTR ALL 110 : 1990 183 ITR 388 MUM APPLIED . 25 IT IS RESPECTFULLY SUBMITTED THAT PROVISION OF SECTION 292C ARE PARI - MATERIA TO THE PROVISION OF SECTION 132(4A) OF THE ACT THEREFORE AS HELD IN THE JUDGME NTS REFERRED TO ABOVE EVEN THE PROVISIONS OF SECTION 292C OF THE ACT DO NOT HELP THE CASE OF THE DEPARTMENT IN AS MUCH AS ACCORDING TO THE SECTION THE LOOSE PAPERS HAVE TO BE TAKEN AT THEIR FACE VALUE AND BELIEVED TO BE TRUE. HOWEVER WHEN THEY DO NOT IND ICATE ANY CONCLUSIVE REFERENCE NOTHING CAN BE INFERRED ON THE BASIS OF THESE PAPERS BY ADDING ANY PRESUMPTIONS. MAKING PRESUMPTIONS BEYOND THE NOTINGS OF LOOSE PAPERS IS NOT ONLY BEYOND THE SCOPE OF SECTION 292C BUT RATHER CONTRARY TO SUCH PROVISIONS. FUR THER IT IS PERTINENT TO MENTION THAT THERE WERE NO TANGIBLE ASSETS AVAILABLE TO SUPPORT THE IMPUGNED ADDITIONS. HENCE ALL THE ADDITIONS BASED ON DEAF AND DUMB PAPERS DESERVE TO BE DELETED. THERE ARE SOME SCHOOL FEES PAYMENTS THROUGH DD THE COPIES OR REF ERENCE OF WHICH ARE AVAILABLE IN THESE PAPERS: - SR. NO. PAGE NO. DATE AMOUNT OF ADDITION BANK ACCOUNT 1. A - 1/1 30.03.2007 1 67 500/ - 2. A - 2/14 25.04.2006 1 62 875/ - ACCOUNT STATEMENT OF BOB AVAILABLE AT PAGE NO. A 22 OF PB OF AY 2007 - 08. 3. A - 2/15 25.04.2 006 1 65 000/ - ACCOUNT STATEMENT OF BOB 26 IT I S EVIDENT THAT O UT OF THE ABOVE AMOUNT AT SERIAL NUMBER 2 HAVE BEEN DIRECTLY PAID THROUGH REGULAR BANK ACCOUNT OF THE ASSESSEE AND THE REMAINING AMOUNT HAS BEEN PAID OUT OF THE AMOUNT AVAILABLE WITH THE ASSESSEE AS WELL AS OUT OF THE UNDISCLOSED INCOME OF THE FIRM M/S CH ETAK COMPLEX. THEREFORE EVEN IN RESPECT OF THE SAME NO ADDITION IS CALLED FOR. IT IS PERTINENT TO MENTION THAT UNDISCLOSED INCOME TO THE EXTENT OF RS. 1 18 28 450/ - IN AGGREGATE WAS OFFERED FOR TAXATION IN THE HANDS OF M/S CHETAK COMPLEX ON THE BASIS OF U NACCOUNTED TRANSACTIONS WHICH HAVE BEEN FINALLY TAXED. FURTHER TO ABOVE HONBLE ITAT WHILE DEALING WITH THE CASE OF FIRM M/S CHETAK COMPLEX FOR AY 2004 - 05 TO 2010 - 11 HAS ADDITIONALLY SUSTAINED AN ADDITION TO THE UNDISCLOSED INCOME TO RS. 36 42 550/ - IN VA RIOUS YEARS AS PEAK CREDIT. A STATEMENT OF SUCH PEAK CREDIT IS ENCLOSED WITH THIS SYNOPSIS EXTRACTED FROM THE PAPER BOOK OF THE FIRM M/S CHETAK COMPLEX. THE STATEMENT SHOWS THAT OUT OF THE TOTAL AMOUNT OF RS 36 42 550/ - TAXED IN THE HANDS OF THE FIRMS AVAILABLE AT PAGE NO. A 22 OF PB OF AY 2007 - 08. 4. A - 2/16 10.04.2006 40 000/ - 5. A - 2/17 25.04.2006 1 62 500/ - ACCOUNT STATEMENT OF BOB AVAILABLE AT PAGE NO. A 22 OF PB OF AY 2007 - 08. 27 UN DISCLOSED CASH BALANCE OF RS 34 74 080/ - WAS AVAILABLE WITH THE ASSESSEE FIRM AND ITS PARTNERS FOR OTHER APPLICATIONS. THEREFORE ALSO TO THE EXTENT OF UNDISCLOSED INCOME TAXED IN THE HANDS OF FIRMS NO ADDITION CAN BE SUSTAINED IN THE HANDS OF THE PARTNERS EVEN IF ANY CASH PAYMENT IS BEING MADE. 4.2 ON THE OTHER HAND THE LD. D.R. RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. APART FROM THIS HE HAS FILED WRITTEN SUBMISSIONS WHICH READ AS UNDER: THE CONTENTS OF THE SYNOPSIS HAVE BEEN CONSIDERED CAREF ULLY VIS - A - VIS EVIDENCE SEIZED DURING SEARCH SUBMISSION FURNISHED DURING THE COURSE OF ASSESSMENT AS WELL AS FIRST APPELLATE PROCEEDINGS. THE SUBMISSION OF THE ASSESSEE FILED BEFORE THE HON'BLE ITAT IS IN THE ROUTINE NATURE AS FURNISHED DURING ASSESSMENT AND APPELLATE PROCEEDINGS ALSO. THE AO HAS TRIED ALL MEANS OF CROSS VERIFICATION OF ALL THE SEIZED INCRIMINATING DOCUMENTS VIS - A - VIS THE ACTUAL C C (2000 - 2010) KUTBI ACCOUNTS OF M/S CHETAK COMPLEX BUT COULD NOT FIND MOST OF THE NAMES WRITTEN ON THESE LOOS E PAPERS E SPECIALLY THE ONES WRITTEN ON PAGES BUNCHED AS ANNEXURE A - L & A - 2. IN ABSENCE OF ASSESSEE'S COOPERATION AND KEEPING IN VIEW THE TIME BARRING NATURE OF THE CASE ALL THE PAPERS WERE TABULATED AND NECESSARY ADDITION WERE MADE IN THE HANDS OF THE AS SESSEE. FURTHER THE FACTS OF THE CASE ARE THAT INCRIMINATING DOCUMENTS WERE FOUND SEIZED AND ANNEXURIZED AS ANNEXURE - A - L TO A - 3 DURING THE COURSE OF SEARCH AT 28 RESIDENTIAL PREMISES. DURING THE COURSE OF SEARCH IN THE STATEMENT U/S 132(4). OPPORTUNITY WAS GIVEN TO THE ASSESSEE TO EXPLAIN THE NATURE OF TRANSACTIONS REFLECTED IN THESE DOCUMENTS. FOR EACH DOCUMENT CONFRONTED DURING THE COURSE OF SEARCH THE ASSESSEE SUBMITTED THAT HE DID NOT HAVE ANY EXPLANATION OR THAT HE COULD NOT REMEMBER AND HE WOULD GIVE AN EXPLANATION AFTERWARDS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS HIS STATEMENT WAS ONCE AGAIN TAKEN U/S. 131 ON 10.09.2009. IN THIS STATEMENT ALSO THE ASSESSEE PREVARICATED AND DID NOT GIVE SPECIFIC EXPLANATION WITH REFERENCE TO THESE NOTING NEITHE R DID HE CO - RELATE THEM WITH EITHER BOOKS OF ACCOUNT OR THIS BANK STATEMENT. ON THE BASIS OF EVIDENCE FOUND AND THE PERSISTENT PREVARICATION OF THE ASSESSEE THE AO HAS TRIED ALL MEANS OF CROSS VERIFICATION OF ALL THE SEIZED INCRIMINATING DOCUMENTS VIS - A - V IS THE ACTUAL C C (2000 - 2010) KUTBI ACCOUNTS OF M/S CHETAK COMPLEX BUT COULD NOT FIND MOST OF THE NAMES WRITTEN ON THESE LOOSE PAPERS E SPECIALLY THE ONES WRITTEN ON PAGES BUNCHED AS ANNEXURE A - L & A - 2. IN ABSENCE OF ASSESSEE'S COOPERATION AND KEEPING IN VIEW THE TIME BARRING NATURE OF THE CASE ALL THE PAPERS WERE TABULATED. THUS IT IS SEEN THAT THE AO PUT SUBSTANTIAL EFFORTS IN DECIPHERING THE ENTRIES IN THE SEIZED DOCUMENTS GAVE A SET OFF OF THE DOUBLE ENTRIES AND THEREAFTER WORKED OUT THE YEAR WISE PE AK CREDIT IN THE 4 A.YS. AN ADDITION OF RS. 34033416/ - WAS MADE IN A.Y. 2007 - 08 AND AFTER GIVING BENEFIT OF TELESCOPING AN ADDITION OF RS. 82509624/ - WAS MADE IN A.Y. 2010 - 11. THE ENTRIES WERE 29 TAKEN YEAR WISE AND WHERE NO DATE WAS MENTIONED THE ENTRIES WER E CONSIDERED IN THE YEAR OF SEARCH AS PER LAW SINCE THE ASSESSEE AT NO STAGE BROUGHT CLARIFICATION TO THE DATES OF THESE NOTING. IN VIEW OF THE ABOVE IT IS SEEN THAT ORDER OF THE AO WAS NOT WHIMSICAL NOR WAS IT PASSED WITHOUT APPLICATION OF MIND. DUE OPPO RTUNITY WAS GIVEN TO THE ASSESSEE TO EXPLAIN THESE ENTRIES AND ON THE FAILURE OF THE APPELLANT TO DO SO HE WORKED OUT THE YEAR - WISE INCOME OF THE NOTING MADE ON THESE PAPERS. ON PERUSAL OF SUBMISSIONS MADE DURING THE ASSESSMENT AND APPELLATE PROCEEDINGS IT IS SEEN THAT FOR MOST OF ENTRIES THE EXPLANATION IS GIVEN THAT THEY WERE ROUGH ESTIMATE AND CANNOT BE CORRELATED WITH THE ENTRIES IN THE BOOKS AND THEREFORE THEY ARE OF NO CONSEQUENCE. THIS CAN HARDLY BE TAKEN AS A WORTHWHILE EXPLANATION IN THIS CASE P ARTICULARLY AFTER EXAMINING THE SEIZED MATERIAL. FOR EXAMPLE ON PAGE NO. 11 OF ANNEXURE - A - 1 IT HAS BEEN MENTIONED AS FOLLOWS: MUNDRA SAHEB - 3.00 DUNGAR DHAN - 1.86 MUKESH THEKEDAR - 1.00 NANAWATI MEDICAL - 1.00 DHOBI UDAIPUR ROAD - 5.25 HAKAR - 4.11 JA NARDANJI - 1.50 SHISHUPAL JAIN - 1.50 NARENDRAPATEL - 2.00 ALL THESE ENTRIES ON PAGE NO. 11 HAVE BEEN ACCOUNTED FOR ON PAGE NO. 12 OF ANNEUXRE - A - 1 IDENTICALLY ALONGWITH THE OTHER ENTRIES. ON PAGE NO. 12 THE ASSESSEE SEEMS TO HAVE DRAFTED OUT A TOTAL STATE MENT OF TRANSACTIONS ON A 30 PARTICULAR DATE. THESE ENTRIES ON PAGE 11 WOULD NOT HAVE BEEN REPLICATED WHILE CONSOLIDATING ALL THE TRANSACTIONS ON PAGE 12 IF THEY WERE MERELY ROUGH NOTING. IN FACT AS PER THESE ENTRIES ON PAGE 12 RS. 14 LACS AND 3 LACS HAVE E ITHER BEEN WITHDRAWN OR DEPOSITED IN THE BANK. THESE ENTRIES COULD VERY WELL HAVE BEEN VERIFIED FROM THE BANK STATEMENT BUT THIS HAS NOT BEEN DONE DELIBERATELY. IT APPEARS TO BE AN ATTEMPT BY THE ASSESSEE TO PURPOSELY BE EVASIVE REGARDING THESE ENTRIES TO PREVENT THE DEPARTMENT FROM CORRECTLY ARRIVING AT THE ESCAPED INCOME AS PER THESE DOCUMENT S IN HIS CASE. GIVEN THE FACT THAT IN SOME CASES BANK AND M/S CHETAK COMPLEX HAS BEEN MENTIONED BEFORE THE NOTING IT CANNOT BE SAID THAT IT IS NOT POSSIBLE TO IDENTI FY THE NATURE OF THESE ENTRIES OR TO CROSS VERIFY THEM. THUS IT IS HELD THAT AT NO STAGE THE ASSESSEE SOUGHT TO EXPLAIN THE NATURE OF THESE TRANSACTIONS REFLECTED IN THE NOTING IN THESE DOCUMENTS. THE FACT THAT HE HAS BEEN CONSISTENTLY EVASIVE REGARDING THIS MATTER CANNOT BE TREATED AS VIRTUE IN HIS CASE BUT HIS FAILURE TO DISCHARGE HIS ONUS IN EXPLAINING THESE ENTRIES TO ARRIVE AT THE CORRECT DETERMINATION OF UNDISCLOSED TRANSACTIONS DURING THIS PERIOD. MOREOVER SECTION 292C WAS INTRODUCED IN THE INCOME TAX ACT WITH RETROSPECTIVE EFFECT FROM 01.10.1975. AS PER THIS SECTION WHERE ANY BOOKS OF ACCOUNT AND OTHER DOCUMENTS ARE FOUND IN THE POSSESSION OR CONTROL OF ANY PERSON DURING THE COURSE OF SEARCH IT IS TO BE PRESUMED THAT THE BOOKS OF ACCOUNTS AND OTH ER DOCUMENTS BELONG TO 31 SUCH PERSON THAT THE CONTENTS OF SUCH BOOKS AND DOCUMENTS ARE TRUE. THUS THE PRESUMPTION OF THE AO WHILE MAKING ADDITIONS ON THE BASIS OF THE CONTENTS OF THESE PAPERS IS VALID AS PER SECTION 292C. IT WAS REQUIRED FOR THE ASSESSEE TO REBUT THIS PRESUMPTION WHICH HAS NOT BEEN DONE. THEREFORE THERE IS NO ANOMALY IN THE PRESUMPTION DRAWN BY THE AO OR THE ADDITION MADE BY HIM ON THE BASIS OF THESE ENTRIES. FURTHER SUFFICIENT OPPORTUNITY WAS GIVEN BY THE AO DURING THE COURSE OF ASSESSME NT PROCEEDINGS AND EVEN DURING THE APPELLATE PROCEEDINGS BUT THE ASSESSEE HAS BEEN RECALCITRANT IN FURNISHING EXPLANATION REGARDING THESE ENTRIES. FOR EXAMPLE PAGE 1 OF ANNEXURE - A - 1 IS COPY OF DD OF RS. 167500 DATED 30.07.2007 FOR PAYMENT OF FEES TO NAVRAC HNA INTERNATIONAL SCHOOL. THE LD.CIT(A) WAS ASKED THE ASSESSEE TO FURNISH THE SOURCE OF THIS PAYMENT. IT WAS SUBMITTED THAT THE PAYMENT WAS MADE FROM THE BANK ACCOUNT OF THE ASSESSEE AS WELL AS DRAWING FROM M/S CHETAK COMPLEX IN WHICH THE ASSESSEE IS A PAR TNER. THE CASH BOOK OF M/S CHETAK COMPLEX WAS NOT SUBMITTED FOR VERIFICATION OF THE WITHDRAWALS FOR THIS PAYMENT. BANK STATEMENT OF THE ASSESSEE WAS SUBMITTED. ON PERUSAL OF THE SAME IT WAS SEEN THAT THERE ARE NOT WITHDRAWALS DURING THE ENTIRE MONTH OF MA RCH 2007 TO EXPLAIN THE SOURCE OF THIS DD OF RS. 167500/ - . 32 SIMILARLY PAGE NO. 17 OF ANNEXURE - A - 2 IS A RECEIPT ISSUED BY NAVRACHNA INTERNATIONAL SCHOOL DATED 06.05.2006 OF RS. 162500/ - . ON PERUSAL OF BANK STATEMENT OF THE ASSESSEE IT IS SEEN THAT BALA NCE IN HIS ACCOUNT ON 20.04.2006 WAS ONLY RS. 1500/ - ON 25.04.2006 RS. 165000/ - WAS DEPOSITED IN CASH AND THEREAFTER DD WAS PREPARED ON 25.04.2006 AFTER WHICH THE BALANCE REDUCED TO RS. 36257 - . NO EXPLANATION HAS BEEN FURNISHED REGARDING SOURCE OF CASH DE POSIT IN THE BANK ACCOUNT OF RS. 165000 / - ON 25.04.2006. THUS THE SOURCE OF THE PAYMENT OF THE FEE HAS NOT BEEN EXPLAINED ALONGWITH CORROBORATIVE EVIDENCE AT ANY STAGE. SINCE THE ASSESSEE FAILED TO DISCHARGE HIS ONUS OF EXPLAINING THESE ENTRIES AND TO GE T THEM CORRELATED WITH BANK STATEMENT AND KUTBI OF THE FIRM THE DEPARTMENT WAS LEFT NO ALTERNATIVE BUT TO TAKE THESE ENTRIES FACT VALUE AND MAKE THE NECESSARY ADDITION BECAUSE THEY CLEARLY REFLECTED THE BUSINESS TRANSACTIONS OF THE ASSESSEE. THE NEXT CON TENTION OF THE ASSESSEE IS THAT TO THE EXTENT OF UNDISCLOSED INCOME TAXED IN THE HANDS OF FIRMS NO ADDITION CAN BE SUSTAINED IN THE HANDS OF THE PARTNERS EVEN IF ANY CASH PAYMENT IS BEING MADE. THIS ARGUMENT OF THE ASSESSEE IS NOT AT ALL ACCEPTABLE FOR TH E SIMPLE REASON THAT THE VERY FACT THAT THE TRANSACTIONS NOTED IN THESE PAPERS COULD NOT BE RELATED WITH THE ENTRIES IN THE KUTBI PROVES THAT THEY WERE UNDERTAKEN IN HIS INDIVIDUAL CAPACITY AND SO ARE REQUIRED TO BE ADDED IN HIS INDIVIDUAL INCOME. 33 AS REGA RD PEAK CREDIT DETERMINED IN THE CASE OF M/S CHETAK COMPLEX IS CONCER N ED IT IS TO STATE THAT DURING THE COURSE OF ENTIRE PROCEEDINGS BEFORE THE AO AS WELL AS THE L D.CIT(A) CENTRAL JAIPUR HAS NOT FURNISHED WORKING OF PEAK CREDIT OF RS. 3642550 / - (A.Y. 20 08 - 09). HOWEVER THE WORKING OF PEAK CREDIT HAS BEEN OBTAINED FROM THE ASSESSEE THROUGH FAX AND PLACED IN RECORD. AFTER RECEIVING THIS WORK ASSESSMENT RECORDS HAVE BEEN EXAMINED CAREFULLY AND IT WAS FOUND THAT WORKING OF PEAK CREDIT GIVEN DURING THE COURS E OF ASSESSMENT PROCEEDINGS ON 15.12.2011 IS COMPLETELY DIFFERENT FROM THE WORKING GIVEN BEFORE HON'BLE ITAT. THUS THIS COMES INTO THE PURVIEW OF ADDITIONAL EVIDENCES AND COMMENTS OF THE AO SHOULD HAVE BEEN CALLED FOR. THIS SHOWS THAT THE HON'BLE ITAT ARB ITRARY ACCEPTED THE PEAK CREDIT AS GIVEN BY THE ASSESSEE BEFORE THEM. FROM THE ABOVE FACTS AND CIRCUMSTANCES THE AO HAS RIGHTLY MADE THE ADDITIONS ON THE BASIS OF SEIZED DOCUMENTS AND SUBSEQUENTLY CONFIRMED BY THE LD.CIT(A)CENTRAL. JAIPUR. THE HON'BLE IT AT MAY KINDLY BE REQUESTED TO REJECT GROUND RAISED BY THE ASSESSEE AND DECIDE THE APPEAL IN FAVOUR OF REVENUE. 4. IT IS ALSO RELEVANT TO MENTION HERE THAT IN THE ASSESSMENT ORDER WHEREVER ADDITIONS WERE MADE THE AO HAD CATEGORICALLY MENTIONED ABOUT THE ISSUE OPPORTUNITIES PROVIDED TO THE ASSESSEE SUBMISSION FILED BY THE ASSESSEE AND HIGHLY STRUCTURED & PROLIFIC REASONS FOR MAKING 34 ADDITIONS. THUS RAISING SUCH GROUND IS NOT REASONABLE AND THE HON'BLE ITAT MAY KINDLY BE REQUESTED TO REJECT GROUND RAISED BY THE ASSESSEE AND DECIDE THE APPEAL IN FAVOUR OF REVENUE. 4.3 FOR THIS YEAR THERE IS NO APPEAL OF THE REVENUE. 4.4 AFTER CONSIDERING THE RIVAL SUBMISSIONS WE HAVE FOUND IT FOR A FACT THAT THE ASSESSEE HAS NO SEPARATE BUSINESS OTHER THAN DERIVING SALA RY INCOME AND INCOME FROM HIS FIRM. THE PROVISIONS OF SECTION 292C ARE PARI MATERIA TO THE PROVISIONS OF SECTION 132(4) OF THE ACT. THEREFORE THE DECISIONS TAKEN FOR ONE SECTION WILL ALSO MUTATIS MUTANDIS APPLY TO OTHER SECTIONS. IT IS TRUE THAT THESE DOCUMENTS WERE FOUND FROM THE POSSESSION OF THE ASSESSEE AND THE PROVISIONS OF SECTION 292C ARE ATTRACTED WHERE ANY BOOKS OF ACCOUNT AND OTHER DOCUMENTS ARE FOUND IN THE POSSESSION OR CONTROL OF ANY PERSON DURING THE COURSE OF SEARCH. IT IS TO BE PRESUMED THAT THESE BELONG TO SUCH PERSONS AND THAT CONTENTS OF SUCH BOOKS OF ACCOUNT ARE TRUE. THUS ONE CANNOT SAY THAT PRESUMPTION RAISED AND INVOKED BY THE A.O FOR MAKING ADDITION ON THE BASIS OF THESE DOCUMENTS IS INVALID. HOWEVER THE PRESUMPTION IN QUESTIO N IS DEFINITELY A REBUTTABLE ONE. THE ASSESSEE HAS OFFERED EXPLANATION IN RESPECT OF THESE PAPERS BEFORE THE A.O. AS WELL AS THE 35 LD. CIT(A). ALL THESE PAPERS/DOCUMENTS ARE AVAILABLE IN PAPER BOOK AT PAGES 1 TO 81. MOST OF WHICH ARE IN THE NATURE OF MEMOR ANDUM NOTINGS AND DO NOT CONTAIN THE NATURE OF TRANSACTIONS AND ALSO DO NOT CONTAINED THE DATE OF ALLEGED DOCUMENTS. THESE PAPERS IN OUR CONSIDERED OPINION ARE DEAF AND DUMB DOCUMENTS/PAPERS WHICH ARE NOT CAPABLE OF ANY CONCLUSIVE INFERENCE. FOR EG. AT PA GE 3 OF THE PAPER BOOK DOCUMENT IS ENCLO SE D WHICH HAS RESULTED INTO ADDITION OF 1 25 00 000/ - . IF THIS PAPER IS EXAMINED ONE CANNOT MAKE OUT ANYTHING CONCRETE ON THE BASIS THEREOF. SIMILARLY PAGES 2 4 5 6 AND 8 ARE ALSO OF THE SAME NATURE. IT IS NOT POSSIBLE TO ACQUIRE ANYTHING ON THE BASIS OF THESE PAPERS AS TO WHETHER THESE RELATED TO ANY TRANSACTION OR NOT. THE NATURE OF TRANSACTIONS ARE NOT CLEAR WHETHER THESE ARE RECEIPTS OR PAYMENTS INCOME O R EXPENDITURE LOAN GIVEN OR TAKEN OR RECONCILIATIO N ENTRIES ETC. IT IS ALSO NOT CLEAR IF THESE ENTRIES PERTAIN TO ASSESSEES BUSINESS AND PERTAIN TO WHAT PERIOD. IT IS ALSO NOT POSSIBLE TO DETERMINE THE PEAK IN THE ABSENCE OF DATE AND MANUFACTURE OF THESE TRANSACTIONS. WE ARE IN AGREEMENT WITH THE LD . A.R. THAT BEFORE MAKING ANY ADDITION ON THE BASIS OF ANY DOCUMENT AT LEAST IT IS TO BE ASCERTAINED AS TO WHETHER CONCERNED ENTRY REPRESENTS INCOME OF THE ASSESSEE AS PER LAW OR NOT. THE ASSESSEE IS A PARTNER IN THE FIRM M/S CHETAK COMPLEX WHICH IS IN T HE REAL ESTATE BUSINESS. 36 THERE WERE MANY TRANSACTIONS IN CASH AND IT IS POSSIBL E THAT THE CASH RECONCILIATION OR MEMORANDA NOTINGS OF TRANSACTIONS TO BE TAKEN IN RESPECT OF CONSTRUCTION OR SALES ACTIVITY OR TEMPORARY CASH RECEIPT/PAYMENT ENTRIES IS BEING NOTED WHICH BECOMES IRRELEVANT AFTER ACTUAL TRANSACTION HAS ALREADY BEEN TAKEN PLACE. IT IS FOUND THAT AFTER THE ACTUAL TRANSACTION TAKES PLACE THE SAME IS CAPTURED IN THE KUTBI BOOKS WHICH CONTAINED THE ENTIRE RECORD OF CASH TRANSACTIONS. WHILE COMPUTI NG THE INCOME OF THE FIRM KUTBI BOOKS HAS BEEN MADE THE BASIS. EVEN THE DEPARTMENT HAS TAKEN THE SALES ON THE BASIS OF KUTBI BOOKS ONLY. ONCE THE CASH AND UNACCOUNTED TRANSACTIONS SYSTEMATICALLY RECORDED IN THE KUTBI BOOKS HAVE BEEN TAKEN INTO ACCOUNT FO R COMPUTING THE INCOME OF THE FIRM THESE PAPERS SHOULD NOT BE SEPARATELY CONSIDERED IN THE HANDS OF THE PARTNERS. SIMILARLY THE PAPERS AT PAGES 48 TO 60 OF THE PAPER BOOK SHOW THAT THESE DOCUMENTS BELONG TO THIRD PARTY AND PROBABLY THEY WERE RECEIVED FO R VERIFICATION OR NEGOTIATION WITH THE CONTRACTOR FOR MAKING THE PAYMENTS AS THIS IS USUAL PRACTICE IN REAL ESTATE BUSINESS TO RECEIVE SUCH REFERENCES. THE POSSIBILITY THA T THESE PAPERS MAY NOT RELATE T O THE ASSESSEE IS MORE PROMINENT. WE HAVE SEEN THE EXPLANATION OF THE ASSESSEE REGARDING EACH PAPER ARE AVAILABLE AT PAGES 11 TO 19 OF HIS PAPER BOOK. WE HAVE GONE THROUGH THE STATEMENTS RELIED ON THE BASIS OF THESE PAPERS AND 37 REPLIES SUBMITTED DURING THE ASSESSMENT PROCEEDINGS COPIES OF WHICH ARE CONTAI NED IN ASSESSEES PAPER BOOK. THESE STATEMENTS DO NOT JUSTIFY ANY ADDITION ON THE BASIS OF THESE SEIZED DOCUMENTS. IN OUR CONSIDERED OPINION THESE DOCUMENTS ARE DEAF AND DUMB AND ON THE BASIS OF LOOSE PAPERS NO ADDITION CAN BE MADE. IN THIS REGARD DE CISIONS ON WHICH THE LD. A.R. HAS RELIED AND WHICH HAVE BEEN REPRODUCED HEREINABOVE ARE RELEVANT. WE NEED NOT REPEAT ONCE AGAIN. THE LOOSE PAPERS HAVE TO BE TAKEN ON THEIR FACE VALUE AND HAVE TO BE BELIEVE D TO BE TRUE. BUT WHEN THESE PAPERS DO NOT INDIC ATE ANY CONCLUSIVE REFERENCE AND NOTHING CAN BE INFERRED THEREFROM THE PRESUMPTION OF SECTION 292C WOULD ABATE. IT IS ALSO TRUE THAT NO TANGIBLE ASSETS WERE FOUND TO MAKE THESE ADDITIONS. IN OUR CONSIDERED OPINION ADDITIONS MADE ON THE BASIS OF DUMB AN D DEAF PAPERS DESERVES TO BE DELETED. WE HAVE ALSO NOTED THAT SOME PAYMENTS WERE MADE THROUGH DEMAND DRAFT COPIES OR REFERENCE OF WHICH WE HAVE TABULATED HERE IN ABOVE IN THE SUBMISSIONS OF THE LD. A.R. FROM THAT TABLE IT IS REVEALED THAT AT SL. NO. 2 AN AMOUNT HAS BEEN DIRECTLY PAID THROUGH REGULAR BANK AND THE REMAINING AMOUNT HAS BEEN PAID OUT OF AMOUNT AVAILABLE WITH THE ASSESSEE AND AS WELL AS UNDISCLOSED INCOME OF THE FIRM. THEREFORE EVEN IN RESPECT OF THE SAME NO ADDITION CAN BE MADE IN THE H ANDS OF THE FIRM. UNDISCLOSED INCOME TO THE EXTENT OF RS. 38 1 18 28 450/ - [IN AGGREGATE] HAS BEEN OFFERED FOR TAXATION ON THE BASIS OF UNACCOUNTED TRANSACTION AND WHICH HAVE BEEN CONFIRMED BY US AS WELL. WHILE DEALING WITH THE CASE OF THE FIRM WE HAVE ALS O SUSTAINED THE ADDITION TO THE UNDISCLOSED INCOME TO THE EXTENT OF RS. 36 42 550/ - IN THE VARIOUS YEARS AS PEAK CREDIT. A STATEMENT OF PEAK CREDIT IS FOUND ENCLOSED IN THE PAPER BOOK WHICH IS REFLECTED FROM THE BOOKS OF THE FIRM TO THE EXTENT OF UNDISCLO SED INCOME. NO FURTHER ADDITION CAN BE MADE OR SUSTAINED IN THE CASE OF THE PARTNERS EVEN IF ANY CASH PAYMENT IS TO BE MADE. ACCORDINGLY WE HAVE FOUND THAT IT IS NOT SAFE TO MAKE ANY SUCH ADDITION AS NO PRESUMPTION OR INFERENCE CAN BE DRAWN ON THE BASIS OF SURMISES CONJECTURES AND SURMISES. SUSPICION HOWSOEVER STRONG CANNOT TAKE THE PLACE OF MATERIAL IN SUPPORT OF FINDINGS OF THE A.O. THE A.O. HAS TO ACT IN JUDICIAL MANNER AND COME TO A JUDICIAL CONCLUSION. IF ANY INCOME NOT ADMITTED BY ANY ASSESSEE IS TO BE ASSESSED IN ITS HANDS ITS BURDEN TO ESTABLISH SUCH INCOME IS CHARGEABLE TO TAX LIES ON THE A.O. NO ADDITION CAN BE MADE ON THE BASIS OF VAGUE NOTINGS ON CERTAIN LOOSE PAPERS WHICH DO NOT HAVE DATE OR NAME OF THE ASSESSEE. ACCORDINGLY WE ARE OF THE C ONSIDERED OPINION THAT THE PROVISIONS OF SECTION 292C OF THE ACT HAS TO BE APPLIED IN TOTO. DECISIONS ON WHICH THE LD. A.R. HAS RELIED ARE RELEVANT FOR THE 39 PURPOSE. ACCORDINGLY WE CANNOT SUSTAIN THE IMPUGNED ADDITION AND ORDER TO DELETE THE SAME F ROM THE HANDS OF THE ASSESSEE. 4.5 SECOND GROUND RE GARDING CHARGING OF INTEREST U/S 234A 234B 234C AND 234D IS MANDATORY AND THE ASSESSEE IS ENTITLED TO CONSEQUENTIAL RELIEF. THIS GROUND CANNOT BE ALLOWED. 4.6 IN THE RESULT THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. SHRI VINOD K ATUWA ITA NO. 107/JU/2014 [A.Y. 2010 - 11 5. THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A) DATED 7.2.2014 . 6. THE REVENUE HAS NOT FILED ANY APPEAL FOR THIS YEAR. 7. THE ASSESSEE HAS RAISED ADD ITIONAL GROUNDS WHICH BEING LEGAL IN NATURE HAVE BEEN ADMITTED AND WERE TAKEN ON BOARD. 7.1 THE FIRST GROUND RAISED BY THE ASSESSEE IN THIS APPEAL READS AS UNDER: 40 UNDER THE FACTS & CIRCUMSTANCES OF THE CASE AND IN LAW LD. CIT (APPEALS) HAS ERRED IN UP HOLDING THE NET ADDITION OF RS. 8 25 09 624/ - (AFTER BENEFIT OF PEAK CREDIT) AS UNEXPLAINED INCOME ON THE BASIS OF DEAF AND DUMB PAPERS. 7.2 THIS GROUND NO. 1 OF THE ASSESSEE IS SIMILAR TO GROUND NO. 1 RAISED IN A.Y. 2007 - 08 AS ABOVE. THEREFORE WITH S IMILAR REASONING WE ORDER TO DELETE THE ADDITION OF RS. 8 25 09 624/ - 7.3 GROUND NO 2 WAS NOT PRESSED. 8. GROUND NO. 1 OF ADDITIONAL GROUND S WHICH IS TREATED AS SECOND ISSUE OF THIS APPEAL READS AS UNDER: UNDER THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW LD. CIT (APPEALS) HAS ERRED IN: A. SUSTAINING THE ADDITION OF RS 8 24 414/ - AS UNEXPLAINED INVESTMENT IN JEWELLERY U/S 69A. B. NOT ADMITTING ADDITIONAL EVIDENCES PLACED VIDE APPLICATION DATED 17.12.2013 UNDER RULE 46A OF THE INCOME TAX RULES 1962 FOR ADMISSION OF AFFIDAVITS GIVEN THE LADY FAMILY MEMBERS EVIDENCING THE OWNERSHIP OF THE JEWELLERY FOUND DURING THE SEARCH PROCEEDINGS. 41 8.1 BRIEFLY STATED THE FACTS OF THE CASE ARE THAT DURING THE COURSE OF SEARCH 1203.03 GRAMS JEWELLERY WAS FOUND AT THE PREMISES OF THE ASSESSEE. THE ASSESSEES FAMILY CONSISTS OF THE FOLLOWING MEMBERS: SR. NO. NAME OF RELATIVE RELATION WITH ASSESSEE AGE AT THE TIME OF SEARCH 1. NEETA KATUWA WIFE 44 2. SHIKHAR KATUWA SON 15 3. SALONI KATUWA DAUGHTER 13 4. ANIL KATUWA B ROTHER 41 5. NEETU KATUWA BROTHERS WIFE 36 APART FROM THIS HIS MOTHER SMT. GIRIJA KATUWA AGED 76 ALSO RESIDES WITH HIM MOST PART OF THE YEAR. THE OTHER FAMILY MEMBERS BROTHER AND BROTHERS WIFE KEEP VISITING ON DIFFERENT OCCASIONS. IN RESPECT OF THE JE WELLERY FOUND THE ASSESSEE GAVE SPECIFIC EXPLANATION IN THE STATEMENT RECORDED DURING THE COURSE OF SEARCH U/S 132(4) ON 12.08.2009 ITSELF. VIDE ANSWER TO QUESTION NUMBER 18 HE SUBMITTED THAT JEWELLERY FOUND BELONGED TO HIS WIFE HIS MOTHER AND BROTHERS WIFE WHICH WERE RECEIVED BY THEM ON THEIR RESPECTIVE MARRIAGES AND FAMILY FUNCTIONS. EVEN IN ANSWER TO QUESTION 7 IT WAS STATED BY THE ASSESSEE THAT THE JEWELLERY BELONGING TO HIS WIFE AND MOTHER AND HIS SISTER WAS LYING AT HIS RESIDENCE. DESPITE THIS CLE AR STATEMENT OF THE 42 ASSESSEE THE A.O. RELYING MERELY UPON THE QUANTITY OF JEWELLERY MENTIONED BY HIM AS A PART OF ANSWER TO QUESTION NUMBER 7 HAS TREATED JEWELLERY TO THE EXTENT OF 300 GRAMS AS EXPLAINED AND REST AS UNEXPLAINED. THE LD CIT(A) HOWEVER A LLOWED PART RELIEF BY ALLOWING BENEFIT AS PER DEPARTMENTAL INSTRUCTION NO 1916. SHE CONSIDERED JEWELLERY TO THE EXTENT OF 600 GRAMS (500 GRAMS FOR ASSESSEES WIFE AND 100 GRAMS FOR ASSESSEE) AS EXPLAINED. 8.2 WITH REGARD TO THE ABOVE THE LD. A.R. SUBMITT ED AS UNDER : T HAT A GENTLEMAN WOULD NOT HAVE PRECISE IDEA ABOUT JEWELLERY OF LADIES. FURTHER SINCE THE QUESTION WAS GENERAL IT IS NOT KNOWN THAT HOW IT WAS EXPLAINED DURING THE COURSE OF SEARCH AND HOW IT WAS UNDERSTOOD. IT IS QUITE LIKELY THAT HE MIGH T NOT HAVE CONSIDERED THE JEWELLERY ON BODY OF FAMILY MEMBERS. FURTHER WHAT HE HAS EXPLAINED IS JUST ROUGH ESTIMATE AND IT IS LIKELY THAT HE HAS MENTIONED THE QUANTITY FOR EVERY PERSON WHICH APPEARS FROM THE GENERAL APPROXIMATIONS IN THE ANSWERS. MOREOVER IT IS RELEVANT TO MENTION THAT STATEMENT OF SMT. NEETA KATUWA WAS ALSO RECORDED BY THE DEPARTMENT ON THE SAME DAY DURING THE COURSE OF THE SEARCH BUT NO SPECIFIC QUESTION IN RELATION TO JEWELLERY WAS ASKED FROM HER. DEPARTMENT IS RELYING UPON QUESTION RE LATING TO MOVABLE AND IMMOVABLE PROPERTY ASKED TO HER. A HOUSEHOLD LADY CANNOT APPRECIATE 43 SUCH TECHNICAL QUESTIONS PARTICULARLY WHEN THE QUESTION TALKS ABOUT IN YOUR NAME AS THERE IS NO NAME ON JEWELLERY. AS THE JEWELLERY RECEIVED IN MARRIAGES ETC. IS I N NOBODYS NAME. FURTHER THE HOUSEHOLD LADIES AT SUCH SMALL PLACE GENERALLY DO NOT KNOW THE MEANING AND DEFINITION OF MOVABLE AND IMMOVABLE PROPERTIES. HAD THE QUESTION ABOUT JEWELLERY ASKED FROM HER A CORRECT REPLY WOULD HAVE COME. UNDER THESE CIRCUMSTAN CES AND NATURE OF STATEMENTS RECORDED DURING THE COURSE OF SEARCH THE DEPARTMENT SHOULD HAVE CONSIDERED THE JEWELLERY AS EXPLAINED ON THE BASIS OF QUANTITIES IN THE DEPARTMENTAL INSTRUCTION NO. 1916 DATED 11.05.1994. AND IF 500 GRAMS OF JEWELLERY FOR THE A SSESSEES MOTHER AND SOME JEWELLERY OF HIS SISTER BROTHERS WIFE AND DAUGHTER IS CONSIDERED THEN THE REMAINING JEWELLERY OF 602.30 GRAMS STANDS EXPLAINED. THEREFORE NO PART OF JEWELLERY CAN BE CONSIDERED AS UNEXPLAINED. EVEN IGNORING THE ADDITI ONAL EVIDEN CES PRODUCED BEFORE L D CIT(A) IN THE FORM OF AFFIDAVITS OF HIS BROTHERS WIFE AND HIS MOTHER. EVEN OTHERWISE ON ACCOUNT OF THE AVAILABILITY OF UNACCOUNTED INCOME OF THE FIRM THIS ADDITION WAS NOT JUSTIFIED. IN VIEW OF THE ABOVE THE ADDITION SHOULD BE FULLY DELETED. 8.3 WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE CAREFULLY PERUSE D THE ENTIRE MATERIAL ON RECORD. THE ISSUE REGARDING TREATING JEWELLERY IN TERMS OF INSTRUCTION NO. 1916 DATED 11.05.1994 THE JEWELLERY MENTIONED QUA EACH LADY AND MALE ETC. AS PER THE HONBLE 44 JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. KAILASH CHAND SHARMA REPORTED IN 198 CTR 201 [RAJ]. HAS TO BE TREATED AS EXPLAINED. THE ARGUMENT OF THE DEPARTMENT THAT THIS INSTRUCTION SPEAKS ABOUT NOT SEIZING THIS MUCH JEWELLERY FROM THEM AND DOES NOT TREAT THE SAME EXPLAINED DOES NOT SURVIVE AFTER THE VIEW TAKEN BY THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. KAILASH CHAND SHARMA [SUPRA] . IT IS NOT MATERIAL WHAT COULD HAVE BEEN SAID BY ANY MALE MEMBER DURING SEARCH PROCEEDI NGS ABOUT THE POSSESSION OF JEWELLERY AS USUALLY A GENERAL QUESTION REGARDING THIS ISSUE CAN BE MISUNDERSTOOD. THE INSTRUCTION COUPLED WITH THE VIEW TAKEN BY THE JURISDICTIONAL HIGH COURT HAS TO BE IMPLEMENTED. THE AFFIDAVITS FILED IN THIS REGARD MAY NO T BE THAT RELEVANT. ACCORDINGLY THE ENTIRE SUCH JEWELLERY STANDS EXPLAINED. WE ALLOW THIS GROUND OF APPEAL AND DELETE THE IMPUGNED ADDITION. 9. GROUND NO. 3 READS AS UNDER: UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW L D. CIT (APPEALS) HAS ERRED IN UPHOLDING THE ADDITION OF RS.10 00 000/ - U/S 69 OF THE ACT FOR AN AMOUNT WHICH IS DULY EXPLAINED AND ALSO CONSIDERED IN THE ASSESSMENT OF M/S CHETAK COMPLEX HENCE DUPLICITY. 45 9.1 BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE ASSESSEE THA T AS PER THE KUTBI BOOKS [ OF THE FIRM ] RS. 10 LAK H S HAS BEEN SHOWN TO BEEN RECEIVED FROM MR. VINOD KATUWA AGAINST THE PAYMENT GIVEN TO SHRINATH PLAZA BANSWARA. THIS AMOUNT HAS BEEN ADDED IN THE HANDS OF THIS ASSESSEE 9.2 WITH REGARD TO THIS ADDITION THE LD. A.R. HAS SUBMITTED AS UNDER: IT IS PERTINENT TO MENTION THAT A CASH FLOW STATEMENT WAS PREPARED BY THE ASSESSEE AS HE WAS NOT REQUIRED TO MAINTAIN BOOKS OF ACCOUNTS AFTER INCORPORATING THE INFLOW AND OUTFLOW OF CASH FROM THE BANK AS WELL AS CURRENT ACCOUNT OF CHETAK COMPLEX. THIS CASH FLOW STATEMENT WAS PLACED BEFORE THE LD AO AS WELL AS LD CIT(A). WITH THE PERUSAL OF THE SAID CASH FLOW STATEMENT AVAILABLE AT PAGE NO 40 OF THE PAPER BOOK IT IS EVIDENT THAT THERE WAS SUFFICIENT CASH BALANCE AVAILABLE WITH THE ASSESSEE FOR THE PAYMENT OF ABOVEMENTIONED RS 10 LACS TO M/S CHETAK COMPLEX. THEREFORE THERE WAS NO JUSTIFICATION IN SUSTAINING THIS ADDITION IN THE HANDS OF THE PARTNER WHEN THIS PAYMENT WAS MADE FROM THE FUNDS RECEIVED FROM THE FIRM OR OTHER DISCLOSED SOURCES. EVEN OTHERWISE THE AMOUNT IS COVERED BY THE UNDISCLOSED INCOME OF RS. 1 18 28 450/ - TAXED IN THE HANDS OF THE FIRM AND PEAK CREDIT OF RS. 36 42 550/ - TAXED 46 IN THE HANDS OF THE FIRM WHICH WAS AVAILABLE IN THE HANDS OF THE PARTNERS. 9. 3 THE LD. D.R. RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. 9.4 WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE CAREFULLY PERUSED THE ENTIRE MATERIAL ON RECORD . FROM THE CASH FLOW STATEMENT ENCLOSED AT PAPER BOOK PAGE 40 IT IS EVIDENTLY CLEAR THAT THERE W AS SUFFICIENT CASH BALANCE AVAILABLE WITH THIS ASSESSEE FOR MAKING PAYMENT OF RS. 10 LAKHS TO THE FIRM. OTHERWISE ALSO THIS AMOUNT CAN BE TREATED AS COVERED UNDER THE UNDISCLOSED INCOME OF RS. 1 18 28 450/ - OFFERED FOR TAX IN THE HANDS OF THE FIRM AND TH E PEAK CREDIT OF RS. 36 42 550/ - TAXED IN THE HANDS OF THE FIRM WHICH WAS AVAILABLE IN THE HANDS OF THE PARTNERS. ACCORDINGLY THIS AMOUNT IS TREATED AS EXPLAINED AND IS ORDERED TO BE DELETED AND GROUND NO. 3 OF THE APPEAL IS ALLOWED. 10. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. SHRI R.N. BHANDARI ITA NO . 109 / JU /2014 [A.Y. 2004 - 05] 11. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN ITS APPEAL: 47 1. UNDER THE FACTS & CIRCUMSTANCES O F THE CASE AND IN LAW LD. CIT (APPEALS) HAS ERR ED IN UPHOLDING THE ADDITION OF RS. 18 50 000/ - IN THE HANDS OF THE APPELLANT ON ACCOUNT OF UNEXPLAINED MARRIAGE EXPENDITURES ON THE BASIS OF HYPOTHETICAL INTERPRETATION OF LOOSE PAPERS FOUND IN SEARCH. 2. UNDER THE FACTS & CIRCUMSTANCES OF THE CASE AND IN LAW LD. CIIT (APPEALS HAS ERRED IN HOLDING THE EXPENDITURE INCURRED BY THE APPELLANT ON HIS DAUGHTERS MARRIAGE AS UNEXPLAINED BY REJECTING THE EXPLANATION OFFERED BY THE APPELLANT REGARDING THE SOURCE OF SUCH EXPENSES. 11. BOTH THE GROUNDS RELATE TO SAME ISSUE. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PARTNER IN M/S CHETAK COMPLEX A PARTNERSHIP FIRM. BESIDES INCOME FROM PARTNERSHIP FIRM THE ASSESSEE ALSO EARNS AGRICULTURAL INCOME. S OME LOOSE PAPERS WERE FOUND AND SEIZED FROM THE RESIDENTIAL PREMISES OF THE APPELLANT AND MARKED AS ANNEXURE AS1 TO AS - 4. THE ASSESSEE AT THE TIME OF RECORDING HIS STATEMENTS U/S 131 ON 21.08.2009 EXPLAINED THE CONTENT OF EACH AND EVERY PAPER FOUND AT HIS PREMISES. T HE A.O. AT THE TIME OF THE ASSESSMENT PROCEEDINGS REQUIRED THE A SSESSEE TO FURNISH COMPLETE DETAILS OF EXPENDITURE INCURRED ON ANY MARRIAGE CEREMONY OR ANY OTHER TYPE OF SOCIAL FUNCTION WHEREIN EXPENDITURE 48 MORE THAN RS. 10 000/ - HAVE BEEN INCURRED. IN REPLY TO WHICH HE SUBMITTED THA T HE INCURRED RS. 9 21 000/ - TOWARDS THE EVENT OF MARRIAGE OF HIS DAUGHTER WHICH WAS VERIFIABLE FROM PAGE NO. 4 OF ANNEXURE AS - 1/4. THE AMOUNT WAS CONTRIBUTED BY BOTH THE ASSESSEE AND HIS WIFE FOR THE PURPOSE OF INC URRING EXPENDITURE . THE OTHER SOURCES WER E GIFTS RECEIVED FROM RELATIVES ON THE OCCASION OF MARRIAGE. THE RELEVANT DOCUMENTS JUSTIFYING THE SOURCE OF EXPENSES INCURRED WERE ALSO SUBMITTED WITH THE SAID REPLY. THE A.O. MADE AN ADDITION OF RS.18 50 000/ - ALLEGING UNEXPLAINED MARRIAGE EXPENSES IN W EDDING OF DAUGHTER OF THE APPELLANT. INA APPEAL THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE ACCEPTED THAT PAGE 4 OF THE ANNEXURE IS THE DOCUMENT WHERE IN THE DETAILS REGARDING THE EXPENSES INCURRED IN THE MARRIAGE ARE RECORDED. HOWE VER SHE ERRONEOUSLY INTERPRET ED THE CONTENTS OF THE SAID PAGE 4 OF ANNEXURE AS - 4 AND HELD CONTRARY TO THE SUBMISSION MADE BY THE APPELLANT. SHE QUANTIFIED THE EXPENDITURES INCURRED ON THE MARRIAGE OF THE ASSESSEES DAUGHTER AT RS 18.41 LAKH S. F URTHER REGA RDING CLAIM OF THE ASSESSEE OF AVAILABLE SOURCE OF FUND SHE ACCEPTED SOURCES OF RS 5 LAKHS ONLY AS EXPLAINED IN THE HANDS OF THE ASSESSEE AND FINALLY MADE AN ADDITION OF RS 13.42 LAKHS . 49 11.1 THE LD. A.R. SUBMITTED AS BELOW: T HE L D CIT (A) HAS FAILED TO CONSIDER THE NOTINGS APPEARING ON PAGE NO 4 OF ANNEXURE A - 1. AS PER SAID NOTING IT IS CLEAR THAT IN TOTAL EXPENDITURES OF RS 9.21 LACS ARE TO IN INCURRED FOR WHICH LIQUID FUNDS TO THE TUNE OF RS 5 LACS WERE AVAILABLE WITH HIM AND REMAINING BALANCE RS 4.21 LACS HAS TO BE ARRANGED. THE PAPER NEVER MEANS TO SAY THAT FUNDS REQUIRED TO SOLEMNIZE THE MARRIAGE OF HIS DAUGHTER AT RS 9.21 LACS + RS 5 LACS + RS 4.12 LACS = RS 18.42 LACS. THIS FACTUAL POSITION WAS ALSO PLACED BEFORE THE LD AO BY THE ASSESSEE VIDE HI S REPLY LETTER DATED 08.04.2011. THIS LETTER WAS ALSO PLACED BEFORE LD CIT(A). (COPY OF THE LETTER IS AVAILABLE AT PAGE NUMBER 59 TO 62 OF THE PAPER BOOK.) FURTHER REGARDING SOURCE OF EXPENDITURE OF RS 9.21 LACS THE ASSESSEE DULY EXPLAINED THE SAME AT POI NT 25 OF HIS LETTER DATED 08.04.2011. THE A SSESSEE SUBMITTED HIS CASH FLOW STATEMENT WHICH PROVIDES DETAILS REGARDING SOURCES FROM WHERE THE PART OF THE FUNDS REQUIRED FOR THE EXPENSES WAS ARRANGED. THE DRAWINGS/SAVINGS OF WIFE OF THE A SSESSEE (MOTHER OF T HE GIRL) WERE ALSO UTILISED FOR INCURRING EXPENSES IN HER DAUGHTERS MARRIAGE. THE FUNDS WERE ALSO ARRANGED FROM THE SAVINGS MADE IN PAST PERIODS AND THE CASH GIFTS RECEIVED FROM THE RELATIVES ON THE OCCASION OF MARRIAGE. 50 1. WITH THE ABOVE SUBMISSION IT IS CLEAR THAT ALL THE EXPENDITURES WERE INCURRED FROM LEGITIMATE SOURCES AND THEREFORE ANY ADDITION BY TREATING THE SOURCE OF EXPENDITURE AS UNEXPLAINED IS UNWARRANTED. 2. EVEN OTHERWISE THE AMOUNT SPENT IN THE DAUGHTERS MARRIAGE IS COVERED BY THE UNDISCLOSED INCOME OF RS. 1 18 28 450/ - TAXED IN THE HANDS OF THE FIRM AND PEAK CREDIT OF RS. 36 42 550/ - TAXED IN THE HANDS OF THE FIRM WHICH WAS AVAILABLE IN THE HANDS OF THE PARTNERS. 11.2 ON THE OTHER HAND THE LD. D.R. RELIED ON THE ORDERS OF THE A.O. AND SU BMITTED THAT THE ASSESSEE HAS NOT SUBMITTED HEAD - WISE DETAILS OF EXPENDITURE INCURRED ON MARRIAGE OF HIS DAUGHTER. THE ASSESSEE HAS GIVEN EVASIVE ANSWERS ON THE MATERIAL SEIZED DURING SEARCH AND HAS NOT GIVEN CORRECT FIGURES OF EXPENDITURE INTENTIONALLY. THE LD. D.R. FURTHER SUBMITTED THAT THE LD. CIT(A) WAS NOT CORRECT IN DELETING THE ADDITION AND IN THE ASSESSMENT ORDER WHEREVER ADDITIONS WERE MADE THE A.O. HAD CATEGORICALLY MENTIONED ABOUT THE ISSUE OPPORTUNITIES PROVIDE TO THE ASSESSEE SUBMISSION F ILED BY THE ASSESSEE AND HIGHLY STRUCTURED AND PROLIFIC REASONS FOR MAKING ADDITIONS. 51 11.3 WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE CAREFULLY PERUSED THE ENTIRE MATERIAL ON RECORD. AFTER HEARING BOTH THE SIDES IT IS NOTICED THAT AS PER THE NOTINGS APP EARING ON PAGE NO. 4 OF ANNEXURE A - 1 TOTAL EXPENDITURE WAS TO BE INCURRED ON HER MARRIAGE. OUT OF THIS EXPENDITURE FOUND TO THE EXTENT OF RS. 5 LAKHS WERE AVAILABLE AND THE BALANCE OF RS. 4.21 LAKHS W AS TO BE ARRANGED. WE HAVE EXAMINED THIS PAGE AND ARE CONVINCED THAT THE ASSESSEE HAS CLEARLY EXPLAINED THIS PAGE . THE ADDITIONS OF RS. 4.21 LAKHS IS NOT JUSTIFIED. OTHERWISE ALSO THE VIEW TAKEN BY THE DEPARTMENT IS NOT CERTAIN AND IS ONLY A GUESS WORK. FROM THE DETAILED LETTER DATED 8.4.2011 OF THE ASSE SSEE WHICH IS AVAILABLE AT PAGES NOS. 59 TO 62 OF THE PAPER BOOK THE SOURCES (S) OF THE ENTIRE EXPENDITURE STANDS EXPLAINED. BE THAT AS IT MAY AGAIN THE EXPENDITURE CAN BE SAFELY TREATED A COVERED UNDER THE SURRENDERED UNDISCLO SE D INCOME AS DISCUSSED WHI LE DECIDING GROUND NO. 3 IN ITA NO. 107/JU/2014 [A.Y. 2010 - 11] AS ABOVE. ACCORDINGLY WE ALLOW THIS GROUND AND ORDER TO DELETE THE IMPUGNED ADDITION. 11.4 IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. 52 SMT. NEETU KATUWA ITA NO . 108 / JU /2014 A .Y. 2007 - 08 & ITA NO. 95/JU/2014 [A.Y. 2007 - 08] 12. TH ESE ARE CROSS APPEAL S BY THE ASSESSEE AND REVENUE RESPECTIVELY AND ARE DIRECTED AGAINST THE ORDER OF THE LD. CIT(A) DATED 31.12.2013 FOR A.Y. 2007 - 08 . 12. FIRST GROUND RAISED BY THE ASSESSEE READS AS UNDER: UNDER THE FACTS & CIRCUMSTANCES OF THE CASE AND IN LAW LD. CIT (APPEALS) HAS ERRED IN UPHOLDING THE ADDITION OF RS. 1 24 93 230/ - BY DISALLOWING THE EXEMPTED CAPITAL GAIN AS UNDISCLOSED IN COME FROM OTHER SOURCES. 12.1 BRIEFL Y STATED THE FACTS OF THE CASE ARE THAT THE ASSESSEE T HE ASSESSEE IS AN INDIVIDUAL RECEIVING SALARY FROM CHETAK COMPLEX AS WELL AS EARNING S FROM BANK INTEREST AND SHOWING THE SAME UNDER HEAD INCOME FROM OTHER SOURCES. THE ASSESSEE IS NOT ENGAGED IN CAR RYING OUT ANY KIND OF BUSINESS ACTIVITY. THE ASSESSEE AND MRS ANITA BHANDARI PURCHASED SOME ADJOINING PIECES OF AGRICULTURAL LAND SITUATED AT TEHSIL GHATOLA AND DISTRICT BANSWARA RAJASTHAN AS INVESTMENT. THE REGISTRIES IN RESPECT OF PURCHASES MADE ARE ENC LOSED AT PAGE NO. 31 TO 69 OF THE PAPER BOOK. THE DETAILS OF THE SAID PURCHASES ARE AS FOLLOWS: 53 SELLERS NAME NEETA KATUWA ANITA BHANDARI DATE OF REGISTRY PACIFIC INDUSTRIES 5.11 HECTARES 20.16 HECTARES 05.10.2006 GOKULDHAM DEVELOPERS 5.17 HECTARES 1.18 HECTARES 05.10.2006 NARENDRA K NANAVATI 2.40 HECTARES NA 19.10.2006 TOTAL 12.68 HECTARES 21.34 HECTARES SINCE THEY GOT A GOOD OPPORTUNITY IN A SHORT PERIOD OF TIME THE ASSESSEE ALONG WITH MRS. ANITA BHANDARI SOLD 158 BIGHA AGRICULTURAL LANDS LOCA TED AT BANSWARA TO RSWM LIMITED BHILWARA VIDE CONVEYANCE DEED DATED 10.11.2006 FOR A TOTAL SALE CONSIDERATION OF RS.3 47 05 000/ - OF WHICH RS.1 72 97 500/ - WAS RECEIVED BY MRS. ANITA BHANDARI AND RS. 1 74 07 500/ - WAS RECEIVED BY THE ASSESSEE . THE LAND SO LD WAS PART OF THE TOTAL 208 BIGHA LAND PURCHASED BY THE ASSESSEE AND MRS. ANITA BHANDARI. THE PURCHASE CONSIDERATION FOR SUCH LAND WAS PAID AS FOLLOWS: 54 PARTICULARS OF PAYMENT ANITA BHANDARI NEETA KATUWA BY ANITA BHANDARI HERSELF RS.57 98 470/ - - BY N EETA KATUWA HERSELF - RS.64 69 420/ - PAYMENT MADE BY TAKING LOAN FROM CHETAK COMPLEX (PAID DIRECTLY FROM CHETAK COMPLEX) RS.48 59 600/ - RS.48 59 600/ - TOTAL RS.1 06 58 070/ - RS.1 13 29 020/ - THE LAND SOLD WAS A RURAL AGRICULTURAL LAND WHICH IS NOT A CAPITAL ASSET UNDER SECTION 2(14) OF THE ACT HENCE THERE IS NO CAPITAL GAIN ARISING ON ITS TRANSFER. THE FACT THAT THE SAID LAND WAS AN AGRICULTUR AL LAND AND NOT A CAPITAL ASSET IS AN ADMITTED AND UNDISPUTED FACT. THE A.O. CONSIDERED THE SAID CAPITAL RECE IPT ON SALE OF A RURAL AGRICULTURAL LAND AS INCOME OF THE ASSESSEE UNDER HEAD INCOME FROM OTHER SOURCES. THE AO WHILE MAKING THE IMPUGNED ADDITION MENTIONED THAT THE SAID LAND WAS HELD FOR A VERY SHORT PERIOD OF TIME JUST FOR A MONTH AND NO AGRICULTURAL OPERATIONS WERE UNDERTAKEN ON THIS LAND. THE BENEFIT U/S 10(37) OF THE ACT WAS NOT AVAILABLE TO FIRMS AND COMPANIES HENCE THE TRANSACTION WAS UNDERTAKEN IN THE HANDS OF THE INDIVIDUALS. THE ASSESSEE BEING AGGRIEVED BY THE AFOREMENTIONED CONCLUSION OF THE LD AO FILED AN APPEAL BEFORE THE LD CIT(A). THE LD CIT(A) HELD THAT THE 55 GAIN ARISING FROM THE TRANSFER OF THE LAND IS A BUSINESS INCOME IN THE HANDS OF THE ASSESSEE AS AGAINST INCOME FROM OTHER SOURCES HELD BY THE LD AO. THE LD CIT(A) IN SUPPORT OF HIS FINDING MENTIONED THAT AS THE MONEY WAS BORROWED FROM M/S CHETAK COMPLEX RECEIPTS FROM THE SALE OF THE LAND WERE UTILISED FOR THE BUSINESS OF M/S CHETAK COMPLEX THE SIZE OF THE TRANSACTION WA S HUGE THERE WAS MODIFICATION OF THE LAND USE INTENT OF A SSESSEE S HUSBAND WA S TO MAKE A QUICK BUSINESS PROFITS AS VARIOUS FIRMS IN WHICH THE ASSESSEES HUSBAND WA S PARTNER ARE ENGAGED IN TRANSACTION OF PURCHASE AND SALE OF LAND REGULARLY SO EVEN THE TRANSACTION EXECUTED BY ASSESSEE CANNOT BE HELD TO BE A STRAY OR CASUAL RECEIPT. 12.2 THE LD. A.R. SUBMITTED AS UNDER: APPELLANT IS AN INDIVIDUAL AND IS NOT ENGAGED IN ANY KIND OF BUSINESS ACTIVITY. SHE PURCHASED THE LAND IN CONSIDERATION NOT WITH INTENT TO DO ANY KIND OF TRADING OR BUSINESS ACTIVITY BUT MEREL Y AS AN INVESTMENT. FORTUNATELY SHE WAS ABLE TO GET A BUYER FOR THE PART OF THE LAND WITHIN A PERIOD OF MONTH FROM THE DATE OF PURCHASE THAT TO BEFORE MAKING PAYMENT OF THE PURCHASE CONSIDERATION OF THE LAND. THE ACTIVITY OF BUYING AND LATER ON SELLING WA S AN ISOLATED AND SINGLE TRANSACTION UNDERTAKEN BY THE APPELLANT. THE SAID ACTIVITY WAS NOT UNDERTAKEN AS A PART OF ANY KIND OF ORGANIZED BUSINESS IN EFFECT IT WAS ONLY A STRAY TRANSACTION TO EARN CAPITAL 56 APPRECIATION. THE APPELLANT PLACES RELIANCE ON THE FOLLOWING JUDGMENTS IN SUPPORT OF ITS CONTENTION: THE REVENUE SHOULD ESTABLISH BY POSITIVE EVIDENCE THAT THE PURCHASE AND SALE OF THE PROPERTY BY THE ASSESSEE IS WITH A VIEW TO EARN PROFITS THROUGH TRADING TRANSACTIONS. IN ORDER TO HOLD THAT AN ACTIV ITY IS IN THE NATURE OF AN ADVENTURE THERE MUST BE POSITIVE MATERIALS TO PROVE THAT THE ASSESSEE INTENDED TO TRADE IN SUCH AN ACTIVITY AND IN THE ABSENCE OF EVIDENCE THE SALE OF IMMOVABLE PROPERTY CONSISTING OF LAND CAN GIVE RISE ONLY TO CAPITAL ACCRETI ONS. THE NORMAL INFERENCE TO BE DRAWN IN CASES OF PURCHASE OF LAND IS THAT IT IS INTENDED TO BE AN INVESTMENT WHETHER IT YIELDS INCOME OR NOT - CIT V. A. MOHAMMED MOHIDEEN [1989]42 TAXMAN 1/176 ITR 393 (MAD.). IF A PERSON INVESTS MONEY IN LAND INTENDING T O HOLD IT ENJOYS ITS INCOME FOR SOME TIME AND THEN SELLS IT AT A PROFIT IT WOULD BE A CLEAR CASE OF CAPITAL ACCRETION AND NOT PROFIT DERIVED FROM AN ADVENTURE IN THE NATURE OF TRADE . JUST AS THE CONDUCT OF THE PURCHASER SUBSEQUENT TO THE PURCHASE OF A C OMMODITY IMPROVING OR CONVERTING IT SO AS TO MAKE MORE READILY RESALEABLE IS RELEVANT FACTOR IN DETERMINING THE CHARACTER OF THE TRANSACTION SO WOULD HIS CONDUCT PRIOR TO THE PURCHASE BE RELEVANT IF IT SHOWS A DESIGN AND A PURPOSE G. VENKATASWAMI NAIDU & C O . V. CIT[1959] 35 ITR 594 (SC) 57 THE LD CIT(A) HAS CARVED OUT A CASE THAT AS THE APPELLANTS HUSBAND IS ENGAGED IN BUYING AND SELLING OF LAND THROUGH DIFFERENT PARTNERSHIP FIRMS HENCE THE ACTIVITY OF SALE OF LAND UNDERTAKEN BY THE APPELLANT ALSO TO BE CONSIDERED AS BUSINESS ACTIVITY. AS PER THE FACTS ON RECORD THE LAND WAS OWNED BY THE APPELLANT THEREFORE THE EXISTING SOURCE OF INCOME AND NATURE OF ACTIVITIES CARRIED OUT BY THE APPELLANT HAS TO BE EXAMINED IN ORDER TO DETERMINE THE HEAD OF INCOME IN WH ICH THE INCOME SHALL BE CHARGEABLE. THE NATURE OF ACTIVITIES BEING CARRIED OUT BY THE APPELLANTS HUSBAND SHALL NOT AFFECT THE HEAD IN WHICH THE INCOME SHALL BE CLASSIFIED IN THE HANDS OF THE APPELLANT. NO PROVISION OF INCOME TAX LAW PROVIDES THAT IF IN C ASE AN ASSET HAS BEEN PURCHASED BY BORROWED FUNDS THEN THE NATURE OF ACTIVITIES AS UNDERTAKEN BY THE LENDER OF FUNDS SHALL BECOME RELEVANT FOR DETERMINING THE TAXABILITY IN THE HANDS OF BORROWER. THE APPELLANT HAS TAKEN FINANCIAL ASSISTANCE FROM M/S CHETAK COMPLEX FOR THE PURCHASE OF LAND AND THIS ASSISTANCE HAS BEEN RETURNED WHEN THE FUNDS WERE REALIZED ON SALE OF LAND. THIS ACTIVITY OF GETTING FUNDS AND LATER ON RETURNING THE SAME IN NO CASE CAN CHANGE THE HEAD OF INCOME IN WHICH INCOME SHALL BE CHARGEABL E IN THE HANDS OF THE APPELLANT. THAT M/S RSWM LTD (BUYER OF THE LAND) MADE AN APPLICATION UNDER RAJASTHAN PROMOTION INVESTMENT SCHEME 2003 TO GET 50% WAIVER FROM THE PAYMENT OF STAMP DUTY 58 ON TRANSFER DOCUMENT AND CONVERSION CHARGES ON CHANGE OF LAND US E. AS PER THE CONDITION OF THE SCHEME THE PERMISSION HAS TO BE TAKEN PRIOR TO THE PAYMENT/PURCHASE OF THE LAND. THEREFORE M/S RSWM LTD MADE AN APPLICATION ON 25.10.2006 AND THE SAME WAS APPROVED BY THE COMMISSIONER INDUSTRIES GOVT. OF RAJASTHANS ORDER D ATED 04.11.2006. THIS ACTION OF TAKING PERMISSION BY M/S RSWM LTD. PRIOR TO THE DATE OF EXECUTION OF SALE DEED I.E. 10.11.2006 HAS BEEN TAKEN AS A GROUND BY THE LD CIT(A) FOR TREATING THE GAIN AS BUSINESS INCOME IN THE HANDS OF THE APPELLANT. THE APPLICATI ON FOR WAIVER OF CONVERSION CHARGES AND STAMP DUTY MADE BY THE BUYER (M/S RSWM LTD.) CAN BE NO WAY CHANGE THE NATURE OF TRANSACTION IN THE HANDS OF APPELLANT. THE SELLER CAN NEVER EXERCISE ANY CONTROL OVER THE BUYER WHO WANTS TO AVAIL THE BENEFIT UNDER ANY SCHEME. HENCE THE FINDING OF THE LD CIT (A) THAT CHANGE IN THE LAND USE CAN EVEN CHANGE THE NATURE OF INCOME IN THE HANDS OF THE APPELLANT IS INCORRECT AND BASELESS. IN ORDER TO DETERMINE THE NATURE OF TRANSACTIONS THE INTENT OF THE LEGAL OWNER HAS TO BE EXAMINED. HOWEVER LD CIT(A) HAS SUPERFICIALLY IMAGINED THAT IT IS APPELLANTS HUSBANDS INTENTION WHICH HAS TO BE CONSIDERED FOR DETERMINING THE NATURE OF THE TRANSACTION IN THE HANDS OF THE APPELLANT. SO FAR AS RELIANCE WAS PLACED BY HER ON THE STATEMENT S OF THE APPELLANT RECORDED AT THE TIME OF SEARCH IT IS APPEARING FROM THE QUESTION ASKED TO THE APPELLANT THAT THE 59 STATEMENT WAS NOT INDEPENDENT AND THE WORDS WERE FEAD IN HER MOUTH IN ORDER TO GET THE ANSWER FOR THE BENEFIT OF REVENUE. THEREFORE THESE STATEMENTS ARE NOT WORTHY OF RELIANCE. IN VIEW OF THE ABOVE THE AGRICULTURE LAND IN QUESTION IS OUT OF THE AMBIT OF CAPITAL ASSETS WITHIN THE MEANING OF SECTION 2(14) OF THE ACT BEING RURAL AGRICULTURE LAND AND THEREFORE NO CAPITAL GAINS IS CHARGEABLE TO TAX. FURTHER SINCE THESE LANDS WERE NOT STOCK - IN - TRADE OF THE ASSESSEE AND THE ASSESSEE WAS NOT IN THE BUSINESS OF REAL - ESTATE TRANSACTIONS THE INCOME EARNED FROM THE SALE OF THE AGRICULTURAL LAND CANNOT BE TREATED AS BUSINESS INCOME. THEREFORE THE IN COME EARNED FROM THE SALE OF LAND WOULD NOT BE CHARGEABLE TO TAX. WITHOUT PREJUDICE TO ABOVE IT IS SUBMITTED THAT THE INCOME IF ANY HAS TO BE COMPUTED AT RS 88 01 802/ - AS AGAINST RS 95 61 418/ - COMPUTED BY THE LD CIT(A) AFTER TAKING INTO ACCOUNT COST OF THE LAND TO RS 1 13 29 020/ - . THE LD CIT (A) HAS GROSSLY ERRED IN TAKING COST OF THE LAND AT RS 1 03 29 020/ - ON THE BASIS OF STATEMENT OF SH MANOJ MATHUR. 12.3 ON THE OTHER HAND THE LD. D.R. REITERATED THE SAME REASONING GIVEN FOR MAKING THE ADDITIO N. 60 12.4 WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE CAREFULLY PERUSED T HE ENTIRE MATERIAL ON RECORD. AFTER CONSIDERING THE RIVAL STAN DS ON THIS ISSUE VIS A VIS THE RECORDS AVAILABLE BEFORE US IT IS FOUND THAT THE ASSESSEE AS AN INDIVIDUAL IS NOT ENG AGED IN ANY KIND OF BUSINESS ACTIVITY. THE PIECE OF LAND SOLD IS DESCRIBED AS RURAL AGRICULTURAL LAND WHICH CANNOT BE TREATED AS A CAPITAL ASSET IN TERMS OF SECTION 2(14) OF THE ACT. THE AO HAS TREATED THE PROFIT ARISING FROM THE PURCHASE AND SALE OF THIS LAND AS INCOME FROM OTHER SOURCES. THE MAIN REAS O N OF HIS EPILOGUE IS THAT THE PURCHASE AND SALE HAPPENED WITHIN A SHORT SPAN OF TIME BEING JUST A MONTH AND NO AGRICULTURAL OPERATIONS WERE UNDERTAKEN ON THIS LAND. THE LD. CIT(A) HAS TO THE CONTRAR Y TREATED AS ASSESSEES BUSINESS INCOME ON THE PREMISE THAT MONEY FOR THE PURCHASE OF THE LAND WAS BORROWED FROM THE FIRM AND THE PROCEEDS OF THE SALE WERE ALSO UTILIZED IN THE BUSINESS OF THE FIRM. IN OUR CONSIDERED OPINION THERE IS NO EVIDENCE ON REC ORD TO HOLD THAT THE PURCHASE AND SALE OF THE LAND WAS WITH A VIEW TO EARN PROFITS THROUGH TRADING TRANSACTIONS IN THE NATURE OF ADVE N TURE. IT SEEMS TO BE A STRAY TRANSACTION TO EARN CAPITAL APPRECIATION. THE LD. AR HAS RELIED ON THE DECISION OF THE JODH PUR BENCH OF THE TRIBUNAL IN THE CASE SMT. SUPRIYA KANWAR VS. ITO IN ITA NO. 362/JU/20101 DECIDED ON 13.5.2014 WHEREIN ON SIMILAR ISSUE THE LD. THIRD MEMBER HAS HELD THAT THE PIECE 61 OF LAND SOLD WAS NOT A CAPITAL ASSET. THE DECISIONS RELIED ON BY THE LD . AR AND DISCUSSED ABOVE FULLY SUPPORT THE ASSESSEES CASE ESPECIALLY THE DECISION OF THE HONBLE APEX COURT RENDERED IN THE CASE OF G. VENKATASWAMI NAIDU & CO. [SUPRA]. ACCORDINGLY WE ALLOW THIS GROUND IN THE FAVOUR OF THE ASSESSEE. 12.5 G ROUND NO. 2 OF ASSESSEES APPEAL READS AS UNDER: UNDER THE FACTS & CIRCUMSTANCES OF THE CASE AND IN LAW LD. CIT (APPEALS) HAS ERRED IN UPHOLDING THE ADDITION OF RS. 1 50 000/ - U/S 69 OF THE ACT FOR AN AMOUNT WHICH IS DULY EXPLAINED AND CONSIDERED U/S 153C IN THE SEARCH ASSESSMENT IN THE CASE OF A GROUP MEMBER I.E. M/S CHETAK COMPLEX AND HENCE DUPLICITY. 12.6 THIS GROUND IS SIMILAR TO GROUND NO. 2 RAISED BY THE ASSESSEE SHRI VINOD KATUWA IN ITA NO. 105/JU/2014 A.Y. 2004 - 05 . THEREFORE WITH SIMILAR REASONING W E DELETE THIS ADDITION AS DONE IN THE CASE OF SHRI VINOD KATUWA . 12.7 GROUND NO. 3 OF ASSESSEES APPEAL IS AGAINST CHARGING OF INTEREST U/S 234A 234B 234C & 234D OF THE ACT. C HARGING OF INTEREST U/S 234A 234B AND 234C CANNOT BE ALLOWED AS THE CHARGI NG OF INTEREST UNDER THESE SECTIONS IS MANDATORY UNDER 62 THE ACT. HOWEVER THE ASSESSEE IS ENTITLED TO CONSEQUENTIAL RELIEF. THIS GROUND STANDS DISMISSED. 12.8 IN THE RESULT THE APPEAL OF THE ASSESSEE STANDS PARTLY ALLOWED. 12.9 GROUND NO. 1 RAISED IN R EVENUES APPEAL READS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A)(C) JAIPUR HAS ERRED IN DELETING ADDITION OF RS. 29 31 812/ - OUT OF TOTAL ADDITION OF RS. 1 24 93 230/ - MADE ON ACCOUNT OF DISALLOWANCE OF EXEMPTED CAPITAL GAIN AS UNDISC LOSED INCOME FROM OTHER SOURCES. 1 2 .1 0. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE ASSESSEE THE LAND SOLD BY THE ASSESSEE IN RELATION TO WHICH ADDITION HAS BEEN MADE WAS PART OF THE TOTAL 208 BIGHA LAND PURCHASED BY THE APPELLANT AND MRS. ANITA BHANDARI. THE PURCHASE CONSIDERATION FOR SUCH LAND WAS PAID AS FOLLOWS : PARTICULARS ANITA BHANDARI NEETA KATUWA PAYMENT MADE BY ANITA BHANDARI HERSELF RS.57 98 470/ - - PAYMENT MADE BY NEETA KATUWA HERSELF - RS.64 69 420/ - 63 PAYMENT MADE B Y TAKING LOAN FROM CHETAK COMPLEX (PAID DIRECTLY FROM CHETAK COMPLEX) RS.48 59 600/ - RS.48 59 600/ - TOTAL RS.1 06 58 070/ - RS.1 13 29 020/ - IN RELATION TO PART OF LAND (I.E. 158 BIGHAS) SOLD THE COST OF ACQUISITION OF THE ASSESSEE COMES OUT TO BE RS.86 05 698/ - (I.E. RS.1 13 29 020 X 158 / 208). THEREFORE THE GAIN ON SALE OF THE LAND WAS RS.88 01 802/ - (RS. 1 74 07 500 I.E. SALES CONSIDERATION MINUS RS. 86 05 698/ - ). HOWEVER THE A.O. ARRIVED AT THE AMOUNT OF GAIN WITHOUT CONSIDERING THE AMOUNT PAID BY WAY OF LOAN FROM CHETAK COMPLEX AND HAS COMPUTED GAIN AS RS. 1 24 93 230 / - (I.E. RS. 1 74 07 500 MINUS RS.49 14 270/ - ). THUS THE COST OF ACQUISITION COMPUTED BY LD. AO IS RS.49 14 270/ - ONLY (I.E. RS.64 69 420 X 158 / 208) WHICH IS INCORRECT. THE L D CIT (A ) APPRECIATED THE FACTS AND TRIED TO DETERMINE THE CORRECT AMOUNT OF CAPITAL GAIN. 12.11 THE LD. A.R. SUBMITTED AS UNDER: WITHOUT PREJUDICE TO THE CLAIM OF THE ASSESSEE THAT THE GAIN ARISING ON TRANSFER OF THE LAND IS NOT CHARGEABLE TO TAX IT IS SUBMI TTED THAT THE LD AO ERRED WHILE COMPUTING THE GAIN 64 ARISING FROM TRANSFER OF THE LAND. THE LD AO CONSIDERED THE PROPORTIONATE COST OF THE LAND AS RS 49 14 270/ - AS AGAINST RS 86 05 698/ - . THE LD CIT (A) AFTER VERIFYING THE FACTS PLACED ON RECORDS BEFORE HE R HAS HELD THAT TOTAL COST OF LAND IS RS 1 03 29 020/ - AND CORRESPONDING PROPORTIONATE COST OF THE LAND IS RS 76 46 082/ - (1 03 29 020/208*158). HOWEVER THE LD CIT (A) MADE A CALCULATION MISTAKE AS THE PROPORTIONATE COST COMES TO RS 78 46 042/ - INSTEAD OF RS 76 46 082/ - AS DETERMINED BY THE ASSESSEE. THE LD CIT(A) ALSO DENIED TO ALLOW COST OF RS 10 LAKHS ON ACCOUNT OF CONTRADICTORY STATEMENTS GIVEN BY SH MANOJ MATHUR. THEREFORE WITHOUT PREJUDICE TO THE FACT THAT THE AMOUNT RECEIVED ON SALE PRICE IS A CAPIT AL RECEIPT AND IS NOT INCLUDIBLE IN THE TOTAL INCOME OF THE APPELLANT IT IS SUBMITTED THAT THE AMOUNT OF CORRECTED GAIN IF ANY SHALL BE RS.88 01 802/ - . IN CASE THE ASSESSEES GROUND NUMBER 1 IS ALLOWED AND THE ENTIRE GAIN ENTIRE GAIN BEING NON TAXABLE. THEN THIS GROUND OF THE DEPARTMENT WILL BECOME IN FRUCTUOUS. 12.12 ON THE OTHER HAND THE LD. D.R. REITERATED THE SUBMISSIONS MADE AND RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. 12.13. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE CAREFULLY P ERUSED THE ENTIRE MATERIAL ON RECORD. IN VIEW OF OUR ABOVE FINDING GIVEN IN RELATION TO GROUND NO. 1 OF ASSESSEES APPEAL THIS GROUND OF 65 THE REVENUE BECOMES INFRUCTUOUS. THIS GROUND IS DISMISSED AS HAVING BECOME INFRUCTUOUS. 12.14 THE REVENUE HAS RAIS ED GROUND NO. 2 AS FOLLOWS: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A)(C) JAIPUR HAS ERRED IN DELETING THE ADDITION OF RS. 29 01 007/ - MADE ON ACCOUNT OF UNEXPLAINED EXPENDITURE U/S. 69C. 12.15 THE ASSESSEE CLAIMED COST OF RS 49 14 270/ - IN THE RETURN U/S 153C AS AGAINST RS 21 17 746/ - DECLARED IN THE ORIGINAL RETURN U/S 139(1). REGARDING THE DIFFERENCE AMOUNT IT WAS EXPLAINED THAT THE SAME WAS GIVEN BY M/S CHETAK COMPLEX. HOWEVER THE AO DID NOT ACCEPT THE EXPLANATION OF THE A SSE SSEE AND MADE THE IMPUGNED ADDITION. THE ABOVE FACTUAL POSITION ALONG WITH CORROBORATIVE EVIDENCES WAS PLACED BEFORE THE L D CIT(A) WHO AFTER CONSIDERING THE SAME ALLOWED THE AMOUNT BORROWED FROM M/S CHETAK COMPLEX AS COST INCURRED FOR THE PURCHASE OF LAND AND DELETED THE ADDITION MADE U/S 69C. THE L D CIT(A) HELD AS UNDER: I HAVE CAREFULLY PERUSED THE ORDER OF THE AO AND SUBMISSIONS OF THE AR OF THE APPELLANT AND CONCUR WITH 66 THE SUBMISSIONS OF THE AR. THE SIMPLE CONTENTION OF THE APPELLANT IS THAT SINCE T HE ENTIRE LAND WAS NOT SOLD DURING THE THIS AY BUT ONLY PART OF THIS LAND WAS SOLD THE COST OF THE LAND FOR COMPUTING THE GAINS WAS REQUIRED TO BE TAKEN PROPORTIONATE TO THE SALE OF THE LAND. I DO NOT FIND ANY FAULT IN THIS RATIONALE OF CALCULATION OF INC OME FROM THE TRANSFER OF THE LAND. MOREOVER RELIANCE HAS BEEN PLACED ON KUTBI THE ACTUAL BOOKS OF M/S CHETAK COMPLEX WHILE DECIDING THE ISSUES IN THIS GROUP THUS THE MONEY SHOWN TO HAVE BEEN RECEIVED FROM M/S CHETAK COMPLEX AS VERIFIED FROM KUTBI CANNOT BE ADDED TO THE INCOME OF THE ASSESSEE U/S 69C. THE DEPARTMENT HAS CHALLENGED THIS ACTION OF THE L D CIT(A) OF DELETING THE ENTIRE ADDITION MADE U/S 69C AND HAS COME IN APPEAL . 12.16 THE LD. A.R. SUBMITTED THAT W ITH THE DETAILED SUBMISSIONS PLACED BEFORE THE L D CIT(A) AVAILABLE AT PAGE NO S . A - 1 TO A - 87 AND THE CONCLUSION ARRIVED BY THE LD. CIT(A) IT IS CLEAR THAT NO ADDITION U/S 69C OF THE ACT CAN BE MADE IN THE HANDS OF THE A SSE S SEE OF THE AMOUNT WHICH WAS PAID FROM THE FUNDS RECEIVED FROM M/S CHET AK COMPLEX. HENCE THE ACTION OF THE L D CIT(A) WAS JUSTIFIED AND CORRECT IN DELETING THE ENTIRE ADDITION OF RS 29 01 007 / - . HOWEVER THE LD. D.R. RELIED ON THE ORDER OF A.O. 67 12.17 WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE CAREFULLY PERUSED THE ENTIRE MATERIAL ON RECORD. AFTER HEARING BOTH THE SIDES WE DO NOT FIND ANY MERIT IN THIS GROUND OF THE REVENUE. THE DEPARTMENT HAS NOT BEEN ABLE TO BRING DIFFERENT FACTS TO JUSTIFY THIS ADDITION AND TO DEVIATE US FROM THE FINDING OF THE LD. CIT(A). THE EXPLANA TION OF THE ASSESSEE IN THIS REGARD STANDS CONFIRMED. ACCORDINGLY WE CANNOT ALLOW THIS GROUND NO. 2 OF REVENUES APPEAL AND DISMISS THE SAME. 12.18 GROUND NO. 3 RAISED BY THE REVENUE READS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A)(C) JAIPUR HAS ERRED IN RESTRICTING ADDITION TO RS. 1 50 000/ - OUT OF TOTAL ADDITION OF RS. 6 00 000/ - MADE U/S 69 THOUGH THE SOURCE OF INVESTMENT HAS NOT BEEN EXPLAINED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS . 12.19 THIS GROUND IS SIMILAR TO GROUND NO. 1 RAISED BY THE ASSESSEE SHRI VINOD KATUWA IN ITA NO. 105/JU/2014 A.Y. 2004 - 05 . THEREFORE WITH SIMILAR REASONING WE DELETE THIS ADDITION AS DONE IN THE CASE OF SHRI VINOD KATUWA . 12.20 IN THE RESULT THE APPEAL OF THE DEPARTMENT STANDS DISMISSED. 68 SMT. NEETA KATUWA ITA NOS. ITA NOS. 96 & 97/JU/2014 [A.Y S . 2008 - 09 & 2009 - 10] 13. THESE TWO APPEALS BY THE DEPARTMENT ARE DIRECTED AGAINST THE ORDER OF THE LD. CIT(A) DATED 26.12.2013 FOR A.Y. 2008 - 09 AND 2009 - 10. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A)(C) JAIPUR HAS ERRED IN DELETING ADDITIONS U/S 69 OF RS 38 50 000/ - EVEN WHEN THE SOURCE OF INVESTMENTS IN THE FORM OF DUBIOUS CREDIT ENTRIES HAD NOT BEEN EXPLAINED DURING THE COURSE OF ASSESSMEN T PROCEEDINGS AND THE ADDITION WAS DELETED WITH OUT GIVING AN OPPORTUNITY TO A.O. 13.1 T HE ASSESSEE IS AN INDIVIDUAL AND RECEIVING SALARY FROM CHETAK COMPLEX. IT IS ALSO EARNING BANK INTEREST AND SHOWING THE SAME UNDER HEAD INCOME FROM OTHER SOURCES. TH E ASSESSEE IS NOT ENGAGED IN CARRYING OUT ANY KIND OF BUSINESS ACTIVITY. I N THE KUTBI BOOKS OF THE FIRM RS. 22.50 LAKHS HAS BEEN SHOWN TO HAVE BEEN RECEIVED FROM MRS. NEETA KATUWA ON DIFFERENT DATES. THE AMOUNT OF RS 6 LAKH S WHICH THE LD AO ALLEGED TO BE P AID WAS NEVER APPEARING IN THE ACCOUNT O F M/S CHETAK COMPLEX AND RS 10 L A KHS WERE CONSIDERED TWICE. HENCE AS PER L D AO AMOUNT OF RS 38.50 LAKHS WAS ADVANCED. THE AMOUNT OF RS 12.50 LAKHS WAS ADVANCED BY MEANS OF CHEQUES AND REST BY CASH. THE SOURCES OF ADV ANCES WERE DULY 69 ACCOUNTED FOR RECEIPTS FROM THE ACTIVITIES CARRIED OUT BY THE APPELLANT FUNDS RECEIVED FROM M/S CHETAK COMPLEX AND LOANS FROM DIFFERENT PARTIES. THE CONFIRMATIONS OF THE PARTIES FROM WHOM LOANS WERE TAKEN WERE PLACED ON RECORDS. IT IS PERT INENT TO MENTION THAT A CASH FLOW STATEMENT WAS ALSO PREPARED BY THE ASSESSEE AS HE WAS NOT REQUIRED TO MAINTAIN BOOKS OF ACCOUNTS AFTER INCORPORATING THE INFLOW AND OUTFLOW OF CASH FROM THE BANK AND OTHER DISCLOSED SOURCES. THIS CASH FLOW STATEMENT AND CONFIRMATIONS OF THE AMOUNT OF LOANS RECEIVED IN BANK ACCOUNTS WERE PLACED BEFORE THE AO AS WELL AS L D CIT (A). HOWEVER THE AO CONSIDERED THE ENTIRE AMOUNT OF RS 38.50 LAKHS AS UNEXPLAINED INVESTMENT U/S 69 AND MADE THE ADDITION. THE L D CIT(A) AFTER VER IFYING THE ENTRIES OF THE BANK PASS BOOK AND THE SOURCES OF CREDITS APPEARING IN IT DELETED THE ENTIRE ADDITION OF RS 38.50 LA KHS . 13.2 WHILE DELETING THE ADDITION THE LD. CIT(A) HELD AS UNDER: A FTER MAKING NECESSARY VERIFICATION FROM THE DOCUMENTS AVA ILABLE ON RECORD IT WAS FOUND THAT THE ADDITION OF RS. 6 LAKH S MADE ON ACCOUNT OF CHEQUE DATED 6.10.2007 WAS NOT RECORDED EITHER IN THE KUTBI BOOK OR IN THE BANK ACCOUNT OF THE APPELLANT. THEREFORE THIS ADDITION CANNOT SUSTAIN. 70 ON VERIFICATION OF THE BANK STATEMENT AND CASH FLOW STATEMENT IT IS SEEN THAT THE APPELLANT RECEIVED RS. 10 LAKH S IN CASH ON 15.9.2007 FROM HER HUSBAND SH. VINOD KATUWA ON 11.10.2007 AND SHE WITHDREW RS. 2 50 000/ - FROM BANK THEREFORE THE APPELLANT HAD SUFFICIENT CASH IN HAND TO MAK E A CASH ADVANCE OF RS. 10 LAKH S ON 13.10.2007 TO CHETAK COMPLEX. THE ADDITION MADE OF RS. 10 LAKH U/S 69 IS NOT SUSTAINABLE AFTER MAKING THE ABOVE VERIFICATION. THE APPELLANT HAS FILED CONFIRMATIONS DURING THE ASSESSMENT PROCEEDINGS REGARDING THE SOURCE OF THE AMOUNTS DEPOSITED IN HER BANK ACCOUNTS DURING THIS FY. THESE HAVE NOT BEEN EXAMINED BY THE AO AT ALL AND THE ADDITION HAS BEEN MADE SUMMARILY OF RS 12.50 LA KHS IN HER HANDS EVEN THE THOUGH THE AMOUNT WAS ADVANCED BY HER TO CHETAK COMPLEX VIDE CHEQU E THROUGH HER BANK ACCOUNT. THE ADDITION IS NOT SUSTAINABLE SINCE THE AO HAS FAILED TO EXAMINE AND REBUT THE EVIDENCE BROUGHT ON RECORD BY THE APPELLANT TO EXPLAIN THE SOURCE OF THE DEPOSITS IN THE BANK ACCOUNT OF THE APPELLANT. 13.3. THE LD. A.R. SUBMI TTED THAT W ITH THE FACTS AVAILABLE ON RECORDS ENTRIES IN THE PASS BOOK AS WELL AS CASH FLOW STATEMENT AND CONFIRMATIONS AVAILABLE ON RECORDS IT IS EVIDENT THAT THE S OURCE OF AMOUNT OF RS 22.50 LAKHS ADVANCED BY THE APPELLANT TO M/S CHETAK COMPLEX IS DULY EXPLAINED. HENCE NO ADDITION U/S 69 OF THE ACT OF THE 71 SAID AMOUNT CAN BE MADE IN THE HANDS OF THE APPELLANT. THEREFORE THE ACTION OF THE LD CIT(A) WAS JUSTIFIED AND CORRECT IN DELETI NG THE ADDITION OF RS 38.50 LAKHS . 13.4 THE LD. D.R. HAS REITERATED THE S AME SUBMISSIONS AS MADE BY HIM IN A.Y. 2004 - 05 IN GROUND NO. 1 IN ITA NO. 105/JU/2014 IN THE CASE OF SHRI VINOD KATUWA. 13.5 WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE PERUSED THE RELEVANT MATERIAL ON RECORD. THE FACTS AND CIRCUMSTANCES OF THIS GROUND ARE EXACTLY IDENTICAL TO THE FACTS IN THE CASE OF SHRI V INOD KATUWA IN ITA NO. 105/JU/2014 FOR A.Y. 2004 - 05 WHEREIN WE HAVE DELETED THE ADDITION MADE BY THE AO. THEREFORE WITH SIMILAR REASONING WE DELETE TH E IMPUGNED ADDITION AND ALLOW THIS GROUND OF A PPEAL RAISED BY THE ASSESSEE. 14. THE SOLE GROUND RAISED IN ITA NO. 97/JU/2014 IS SIMILAR TO THE SOLE GROUND RAISED IN ITA NO. 96/JU/2014 WHEREIN WE HAVE DELETED THE ADDITION . ON THE SAME REASONING AS WE HAVE IN THE CASE OF SHRI V INOD KATUWA IN ITA NO. 105/JU/2014 FOR A.Y. 2004 - 05 WE T HEREFORE WITH SIMILAR REASONING WE DELETE THIS GROUND OF APPEAL RAISED BY THE ASSESSEE. 72 15. IN THE RESULT BOTH THE APPEALS OF THE REVENUE STAND DISMISSED. SMT. ANITA BHANDARI ITA NO . 110 / JU /2014 A.Y. 2007 - 08 & ITA NO. 9 8 & 99 /JU/2014 [A.Y. 2007 - 08 & 2009 - 10 ] 1 6 . THESE ARE CROSS APPEALS BY THE ASSESSEE AND REVENUE RESPECTIVELY AND ARE DIRECTED AGAINST THE ORDER OF THE LD. CIT(A) DATED 24.12.2013 FOR A.Y. 2007 - 08. 17. THE FOLLOWING GROUNDS HAVE BEEN RAISED IN I TA NO. 110/JU/2014 A.Y. 2007 - 08 : 1. UNDER THE FACTS & CIRCUMSTANCES OF THE CASE AND IN LAW LD. CIT (APPEALS) HAS ERRED IN UPHOLDING THE ADDITION OF RS. 1 2 8 9 2 893 / - BY DISALLOWING THE EXEMPTED CAPITAL GAIN AS UNDISCLOSED IN COME FROM OTHER SOURCES. 2. UNDER THE FACTS & CIRCUMSTANCES OF THE CASE AND IN LAW LD. CIT (APPEALS) HAS ERRED IN UPHOLDING THE ADDITION OF RS. 2 90 000/ - U/S 69 OF THE ACT FOR AN AMOUNT WHICH IS DULY EXPLAINED AND CONSIDERED U/S 153C IN THE SEARCH ASSESSMENT IN THE CAS E OF GROUP MEMBER I.E. M/S CHETAK COMPLEX AND HENCE DUPLICITY . 73 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN MAINTAINING THE INTEREST LIABILITY U/S 234A 234B 234C & 234D OF THE ACT AND WITHDRAWING THE INTER E ST U/S 244A OF THE ACT. 18. THE FOLLOWING GROUNDS HAVE BEEN RAISED IN ITA NO. 98/JU/2014 [A.Y. 2007 - 08] : 1. UNDER THE FACTS & CIRCUMSTANCES OF THE CASE AND IN LAW LD. CIT (APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS. 36 91 427/ - OUT OF TOTAL ADDITION OF RS. 1 28 92 893/ - MADE ON ACCOUNT OF DISALLOW ANCE OF THE EXEMPTED CAPITAL GAIN AS UNDISCLOSED IN COME FROM OTHER SOURCES. 2. UNDER THE FACTS & CIRCUMSTANCES OF THE CASE AND IN LAW LD. CIT (APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS. 29 01 007/ - MADE ON ACCOUNT OF UNEXPLAINED EXPENDITURE U/S 69C. 3. UNDER THE FACTS & CIRCUMSTANCES OF THE CASE AND IN LAW LD. CIT (APPEALS) HAS ERRED IN RESTRICTING THE ADDITION OF RS. 1 00 000/ - OUT OF TOTAL ADDITION OF RS. 11 10 000/ - MADE U/S 69 THOUGH THE SOURCE OF INV ESTMENT HAS NOT BEEN EXPLAINED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 74 19. THE FOLLOWING GROUNDS HAVE BEEN RAISED IN ITA NO. 99 /JU/2014 [A.Y. 2009 - 10] : 1. UNDER THE FACTS & CIRCUMSTANCES OF THE CASE AND IN LAW LD. CIT (APPEALS) HA S ERRED IN DELETING THE ADDITION OF RS. 36 25 000 / - EVEN WHEN THE SOURCE OF INVESTMENTS IN THE FORM OF DUBIOUS CREDIT ENTRIES HAD NOT BEEN EXPLAINED DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND THE ADDITION WAS DELETION WITHOUT GIVING OPPORTUNITY TO THE A.O. 20 . FACTS AND CIRCUMSTANCES SUBMISSIONS AND ARGUMENTS IN THESE CASES ARE MUTATIS MUTANDIS SAME AND SIMILAR TO THOSE TAKEN IN THE ABOVE CASES OF SAME GROUP. THESE ARE DECIDED ACCORDINGLY. 21 . IN THE RESULT THE APPEAL OF THE ASSESSEE IS PARTLY AL LOWED WHEREAS THE APPEAL OF THE REVENUE STAND DISMISSED. 22 . THE SOLE GROUND RAISED IN ITA NO. 99/JU/2014 IS SIMILAR TO THE SOLE GROUND RAISED IN ITA NO. 98 /JU/2014 WHEREIN WE HAVE DELETED THE ADDITION ON THE SAME REASONING AS WE HAVE IN THE CASE OF SHRI V INOD KATUWA IN ITA NO. 105/JU/2014 FOR A.Y. 2004 - 05 . THEREFORE WITH 75 SIMILAR REASONING WE DELETE THIS GROUND OF APPEAL RAISED BY THE ASSESSEE. 2 3 . IN THE RESULT THE APPEAL OF THE REVENUE STANDS DISMISSED. 24 . TO SUM UP ALL THE STAY APPLICATION STAND DISMISSED. THE APPEALS OF THE ASSESSEE IN ALL THE ASSESSEES CASES ARE PARTLY ALLOWED WHEREAS ALL THE APPEALS OF THE REVENUE STAND DISMISSED. O RDER PRONOUNCED IN THE COURT ON 31 ST JULY 2014. SD/ - SD/ - (N.K.SAI NI) [HARI OM MARATHA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 31 ST JULY 2014 VL/ - COPY TO: THE APPELLANT THE RESPONDENT THE CIT BY ORDER THE CIT(A) THE DR ASS ISTANT REGISTRAR ITAT JODHPUR