SHRI NARESH PARWAL, Jaipur v. DCIT, Jaipur

ITA 1314/JPR/2010 | 2007-2008
Pronouncement Date: 22-07-2011 | Result: Partly Allowed

Appeal Details

RSA Number 131423114 RSA 2010
Assessee PAN ACBPP1541N
Bench Jaipur
Appeal Number ITA 1314/JPR/2010
Duration Of Justice 8 month(s) 11 day(s)
Appellant SHRI NARESH PARWAL, Jaipur
Respondent DCIT, Jaipur
Appeal Type Income Tax Appeal
Pronouncement Date 22-07-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 22-07-2011
Assessment Year 2007-2008
Appeal Filed On 11-11-2010
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH A JAIPUR (BEFORE SHRI R.K.GUPTA AND SHRI N.L.KALRA) ITA NO.1314/ JP/2010 ASSESSMENT YEAR: 2007-08 PAN: ACBPP 1541 N SHRI NARESH PARWAL VS. THE DCIT 301 GURUKRIPA BUILDING CENTRAL CIRCLE- 3 TELIPARA CHOURA RASTA JAIPUR JAIPUR (APPELLANT ) (RESPONDENT) ITA NO.1416/ JP/2010 ASSESSMENT YEAR: 2007-08 PAN: ACBPP 1541 N THE DCIT VS. SHRI NARESH PARWAL CENTRAL CIRCLE- 3 301 GURUKRIPA BUILDING JAIPUR TELIPARA CHOURA RASTA JAIPUR (APPELLANT ) (RESPONDENT) ITA NO.1315/ JP/2010 ASSESSMENT YEAR: 2008-09 PAN: ACBPP 1541 N SHRI NARESH PARWAL VS. THE DCIT 301 GURUKRIPA BUILDING CENTRAL CIRCLE- 3 TELIPARA CHOURA RASTA JAIPUR JAIPUR (APPELLANT ) (RESPONDENT) ITA NO.1417/ JP/2010 ASSESSMENT YEAR: 2008-09 PAN: ACBPP 1541 N THE DCIT VS. SHRI NARESH PARWAL CENTRAL CIRCLE- 3 301 GURUKRIPA BUILDING JAIPUR TELIPARA CHOURA RASTA JAIPUR (APPELLANT ) (RESPONDENT) 2 DEPARTMENT BY : SHRI SUNIL MATHUR ASSESSEE BY : SHRI P.C. PARWAL ORDER PER N.L. KALRA AM:- THE ASSESSEE AS WELL AS REVENUE HAVE FILED THE APP EALS AGAINST COMMON ORDER OF THE LD. CIT(A) CENTRAL JAIPUR DATED 06-10-2010 FOR THE ASSESSMENT YEARS 2007-08 AND 2008-09. 2.0 FIRST OF ALL WE WILL TAKE UP THE APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2007-08. 2.1 THE FIRST GROUND OF APPEAL RAISED BY THE ASSESS EE IS AS UNDER:- 1. THE LD. CIT(A) HAS ERRED IN FACTS AND IN LAW I N CONFIRMING ADDITION OF RS. 4 85 37 833/- ON THE BAS IS OF ANNEXURE A-8 BY: (A) HOLDING THAT ASSESSEE IS ENGAGED IN UNACCOUNTED MONEY LENDING BUSINESS IGNORING THAT IN RESPECT OF TRANSACTION IN ANNEXURE A-8 ASSESSEE ACTED AS BROK ER. (B) DRAWING INCORRECT INFERENCE FROM THAT VARIOUS STATEMENTS OF ASSESSEE RECORDED IN COURSE OF SEARCH BY IGNORING THE PROVISIONS OF SECTION 292C REVERSING THE ORDER OF AO IN ASSESSING COMMISSION INCOME IN RESPECT OF THE TRANSACTION RECORDED IN ANNEXURE A-8 (INSTEAD OF UPHOLDING THE COMMISSION INCOME AND DELETING ADDITION MADE ON ACCOUNT OF AL LEGED MONEY LENDING ADVANCE) 3 2.2 THE BRIEF FACTS IN THIS CASE FOR BOTH THE ASSES SMENT YEARS ARE AS UNDER:- 1. ASSESSEE IS ENGAGED IN THE BUSINESS OF BROKERAGE FO R FINANCIAL AND MONEY TRANSACTIONS IN HIS PROPRIETARY CONCERN M/S P ARWAL ASSOCIATES. SEARCH U/S 132 WAS CARRIED OUT AT THE BUSINESS PREM ISES OF THE ASSESSEE ON 21-6-07. IN SEARCH APART FROM CASH OF RS. 63 39 000/- CERTAIN PAPERS AND DOCUMENTS RELATING TO THE BROKERAGE ACTI VITY OF THE ASSESSEE WAS FOUND. 2. THE ASSESSEE IN HIS STATEMENT U/S 132(4) DATED 21-6 -07 EXPLAINED THE NATURE OF ACTIVITIES CARRIED ON BY HIM. IN REPLY TO Q. 9 HE EXPLAINED THAT HE IS ENGAGED IN FINANCE BROKERAGE JEWELRY BR OKERAGE FINANCE CONSULTANCY. THE RATE OF BROKERAGE WAS STATED TO BE RS. 100/- ON TRANSACTION OF RS. 1 LAC. HE ALSO STATED THAT HE GE TS DALALI SIMILARLY IN JEWELRY BROKERAGE AND FINANCIAL CONSULTANCY. HE FIL ED HIS REGULAR RETURNS DECLARING BROKERAGE INCOME. 3. DURING SEARCH AFTER INVENTORISING PHYSICAL CASH OF RS. 63 39 000/- WHEN THE SOURCE OF THE SAME WAS ASKED THE ASSESSEE IN REPLY TO Q. NO. 34 OFFERED CASH OF RS. 63 LACS AS UNDISCLOSED INCOME EARNED FROM BROKERAGE MONEY LENDING AND HAWALA BUSINESS. IN RE PLY TO Q. NO. 37 HE FURTHER OFFERED RS. 2.37 CRORE FOR CIRCULATION O F UNACCOUNTED FUNDS IN SEIZED LOOSE PAPERS. 4. THE STATEMENT OF THE ASSESSEE WAS AGAIN RECORDED U/ S 131 ON 16-7-07 BY THE ADIT IN WHICH EXPLANATION WAS ASKED ABOUT VA RIOUS ANNEXURE SEIZED IN COURSE OF SEARCH. THE ASSESSEE BEFORE ADI T IN REPLY TO Q NO. 26 SURRENDERED RS. 3.50 CRORE FOR TAX CONSIDERING THE SEIZED ANNEXURES AND THE AMOUNT INVOLVED IN THE MARKET. 4 5. THE ASSESSEE AFTER OBTAINING COPIES OF THE SEIZED D OCUMENTS AND ANALYZING THE SAME FOUND THAT THE PAPERS PERTAIN MA INLY TO THE A.Y. 2006-07 TO 2008-09. HE WORKED OUT THE TURNOVER ON T HE BASIS OF THESE PAPERS AND WORKED OUT BROKERAGE INCOME BY APPLYING RATE OF BROKERAGE @ 0.10% ON THE MONEY TURNOVER. THIS INCOM E WAS WORKED OUT AT RS. 105.80 LACS. THE ASSESSEE IN HIS STATEME NT DATED 22-6-07 HAS ALSO STATED THAT RS. 20 LACS WAS ADVANCED TO MR. DI NESH SAINI ON 1-6- 2005 . CONSIDERING THIS THE ASSESSEE INCLUDED ADDIT IONAL INCOME OF RS. 1.30 CRORE IN HIS RETURNS FOR A. Y. 2006-07 TO 200 8-09 FILED ON 13-11- 09 BY OFFERING RS. 25 LACS 45 LACS AND 60 LACS RES PECTIVELY IN THESE YEARS WITH A REQUEST THAT IF LATER ON DEPARTMENT AS SESS THE INCOME IN ANY OTHER YEAR INCOME TO THAT EXTENT BE REDUCED FR OM THE INCOME OFFERED BY THE ASSESSEE IN THE RETURN. COPY OF NOTE S TO RETURN FILED WITH RETURN U/S 153A ALONG WITH CALCULATION OF TURNOVER ON THE BASIS OF VARIOUS SEIZED DOCUMENTS IS ENCLOSED AT PAPER BOOK PAGES 24 TO 33 . 6. IN COURSE OF ASSESSMENT PROCEEDINGS THE AO COMPUTED THE INCOME BOTH ON GENERATION BASIS AND ON INVESTMENT BASIS. O N GENERATION BASIS HE ACCEPTED THE COMMISSION INCOME AT RS. 105 80 000 /- AS DECLARED BY THE ASSESSEE. HE FURTHER WORKED OUT INTEREST ON ALLEGED DEBTORS AT RS. 1 43 17 000/- (26 67 000 +116 50 000) AND THUS ARRIVED AT THE TOTAL INCOME ON GENERATION BASIS AT RS. 2 48 97 000 /-. ON INVESTMENT BASIS ALLEGED UNRECORDED DEBTORS WERE WORKED OUT AT RS. 6 72 81 458/- (1 00 00 000 + 5 72 81 458) AND CASH OF RS. 63 00 0 00/- TOTALING TO RS. 7 35 81 458/-. THE SUMMARIZED POSITION OF INCOM E SO WORKED OUT IS TABULATED BELOW:- 5 A.Y. BROKERAGE INCOME @ 0.10% INTEREST ON DEBTORS AS PER APPROVAL MEMO INTEREST ON DEBTORS ON THE BASIS OF ANN. A-8 TOTAL INCOME ON GENERATION BASIS UNRECORDED DEBTORS AS PER APPROVAL MEMO / CASH UNRECORDED DEBTORS AS PER ANN. A-8 TOTAL INCOME ON INVESTMENT /ASSETS BASIS INCOME ASSESSED BY THE AO 1 2 3 4 5 (2+3+4) 6 7 8 (6+7) 9 (5+8) 02-03 - 50 000 50 000 10 00 000 10 00 000 10 50 0 00 03-04 - 120 000 120 000 - 120 000 04-05 - 120 000 120 000 - 120 000 05-06 - 120 000 120 000 - 120 000 06-07 5 42 000 520 000 10 62 000 20 00 000 20 00 000 30 62 000 07-08 44 58 000 600 000 58 25 000 108 83 000 - 485 37 833 485 37 833 543 62 833 (58 25 000 + 485 37 833) 08-09 55 80 000 11 37 650 58 25 000 125 42 650 70 00 000 + 63 00 000 87 43 625 220 43 625 125 42 650 TOTAL 105 80 000 26 67 650 116 50 000 248 97 000 1 63 00 000 572 81 458 735 81 458 713 77 483 IN A. Y. 07-08 THE AO DID NOT MADE SEPARATE ADDITI ON FOR BROKERAGE INCOME OF RS. 44.58 LACS AND INTEREST OF RS. 6 LACS BY ALLOWING SET OFF AGAINST INVESTMENT IN DEBTORS OF RS. 485 37 833/-. HOWEVER HE ADDED INTEREST ON DEBTORS OF RS. 58 25 000/-. THE LD CIT( A) DELETED THE ADDITION OF RS. 58 25 000/- BUT CONFIRMED ADDITION OF RS. 4 85 37 833/-. IN A.Y. 08-09 THE AO ASSESSED TOTAL UNDISCLOSED IN COME ON GENERATION BASIS AND DID NOT MAKE SEPARATE ADDITION FOR ALLEGED UNRECORDED DEBTORS/CASH BY ALLOWING THE SET OFF AGA INST RECOVERY OF DEBTORS OF RS. 4 85 37 833/- TAXED IN A. Y. 07-08. THE LD. CIT(A) UPHELD THE ADDITIONS MADE ON THE BASIS OF GENERATIO N OF INCOME. 2.3 THE FACTS FOR THE ASSESSMENT YEAR 2007-08 IN RE SPECT OF GROUND OF APPEAL NO. 1 ARE AS UNDER:- 1. THE AO ON THE BASIS OF VARIOUS PAPERS AND DOCUMENTS WORKED OUT INCOME OF THE ASSESSEE ON GENERATION BASIS AND ON I NVESTMENT BASIS AS SUMMARIZED BELOW:- INCOME ON GENERATION BASIS AMOUNT (RS.) BROKERAGE INCOME RS. 44 58 000 6 INTEREST ON DEBTORS AS PER APPROVAL MEMO RS. 1 20 000 INTEREST ON ADVANCE TO DINESH SAINI RS. 4 80 000 INTEREST ON DEBTORS AS PER ANNEXURE A-8 RS. 58 25 000 1 08 83 000/- INCOME ON INVESTMENT BASIS UNRECORDED DEBTORS AS PER ANN. A-8 4 85 37 833 /- THE AO ASSESSED UNDISCLOSED INCOME OF RS. 5 43 62 8 33/- BY ADDING THE UNRECORDED DEBTORS OF RS. 4 85 37 833/- AS PER ANNEXURE A-8 AND INTEREST THEREON AT RS. 58 25 000/-. 2. THE AO AT PAGE 8 OF THE ASSESSMENT ORDER HAS CONSID ERED THE TURNOVER OF THE MONEY AS PER VARIOUS ANNEXURES AND WORKED OU T THE BROKERAGE INCOME OF THE ASSESSEE AT RS. 44 58 000/-. HOWEVER ON PAGE 10 OF THE ORDER HE FURTHER OBSERVED THAT AS PER THE VARIOUS P AGES OF ANNEXURE A- 8 THERE IS CALCULATION OF INTEREST RECEIPT OF RS. 58 24 540/- FROM WHICH THE AMOUNT OF INVESTMENT IN THE MONEY LENDING WAS W ORKED OUT TO RS. 4 85 37 833/- AND BOTH THESE AMOUNTS WERE ADDED CON SIDERING IT TO BE THE MONEY LENT BY THE ASSESSEE BY NOT ACCEPTING THE CONTENTION THAT ASSESSEE ONLY ACTED AS A BROKER IN RESPECT OF THESE TRANSACTIONS. 2.4 THE LD. CIT(A) DELETED THE ADDITION OF RS. 58 2 5 000/- AND CONFIRMED THE ADDITION OF RS. 4 85 37 833/- BY HOLDING THAT I T IS THE AMOUNT ADVANCED BY THE ASSESSEE FOR THE FOLLOWING REASONS:- (A) THE ASSESSEE IN ANSWER TO Q. NO. 17 IN THE STATEMEN TS RECORDED DURING SEARCH HAS ADMITTED THAT AS PER PAGE 4 6 8 & 25 OF A-2 HE HAS ADVANCED RS. 20 LACS TO SHRI DINESH SAINI ON 1-6-20 05. THUS IT IS UNDISPUTED THAT THE ASSESSEE IS ENGAGED IN UNACCOUN TED MONEY LENDING BUSINESS. 7 (B) IN RESPECT OF CASH FOUND OF RS. 63.39 LACS THE ASSE SSEE HAS ADMITTED THAT THIS IS UNACCOUNTED WHICH HAS BEEN EARNED THRO UGH HAWALA MONEY LENDING AND BROKERAGE BUSINESS. (C) IN REPLY TO Q. NO. 37 IN STATEMENT RECORDED ON 22-6 -07 THE ASSESSEE ADMITTED THAT LOOSE PAPERS REFLECT CIRCULATION OF H IS UNACCOUNTED FUND AND AGAINST THAT HE SURRENDERED RS. 2.37 CRORES. (D) IN ANSWER TO Q. NO. 26 IN STATEMENT RECORDED ON 20- 7-2007 THE ASSESSEE ADMITTED RS. 3.5 CRORE AS INVESTMENT IN MO NEY LENDING. (E) THE ASSESSEE HIMSELF IN THE STATEMENTS RECORDED ON 16-7-2007 I.E. AFTER 25 DAYS OF SEARCH HAS INCREASED THE UNACCOUNT ED INVESTMENT IN MONEY LENDING TO RS. 3.5 CRORE WHEREAS IT WOULD HAV E BEEN REDUCED IF THE ASSESSEE IS ENGAGED ONLY IN BROKERAGE BUSINESS. THUS THE CLAIM MADE BY THE ASSESSEE IN ASSESSMENT PROCEEDINGS IS A N AFTER THOUGHT. (F) KERALA HIGH COURT IN CASE OF V. KUNHAMBU AND SONS V S. CIT 219 ITR 235 AND DR. S. C. GUPTA VS. CIT 248 ITR 782 (ALL.) HAS HELD THAT THE STATEMENT MADE VOLUNTARILY BY THE ASSESSEE COULD FO RM BASIS OF ASSESSMENT AND NO CASE HAS BEEN MADE OUT THAT THE S TATEMENT WAS TAKEN UNDER MISTAKEN BELIEF OF FACT OR LAW. 2.5 DURING THE COURSE OF PROCEEDING BEFORE US THE LD. AR HAS FILED THE FOLLOWING SUBMISSIONS. 1. FROM A BARE LOOK TO THE VARIOUS PAGES OF ANNEXURE A -8 REFERRED BY THE AO AT PAGE 10 OF THE ORDER IT CAN BE NOTED THAT TH E SAME REPRESENT THE CALCULATION OF INTEREST IN RESPECT OF THE AMOUNT LE NT BY SHRI AMAN GUPTA AND SHRI ANURAG KOOLWAL TO THE VARIOUS BORROW ERS THROUGH THE ASSESSEE. THE PAGE WISE DETAIL OF SUCH TRANSACTION IS AS UNDER:- 8 PAGE NO. PERIOD AMOUNT OF INTEREST REMARKS 21 (PB 79) 15-3-06 TO 15-5-06 4470 + 2167.40 = 6637.40 CALCULATION OF INTEREST RECEIVED FROM BORROWERS IN RESPECT OF 69 SLIPS AND OPEN AMOUNT (ANNEXURE A-22 PB 90-91) 21 BACK (PB 78) UPTO 15-9- 06 4510 + 4628 +154 = 9292 CALCULATION OF INTEREST RECEIVED FROM BORROWERS IN RESPECT OF 69 SLIPS AND OPEN AMOUNT. ON 69 SLIPS INTEREST IS CALCULATED FOR 2 MONTHS AND ON OPEN AMOUNT INTEREST IS CALCULATED FOR 4 MONTHS. THE PAPER ALSO INDICATE THAT INTEREST RECEIVED FROM BORROWER HAS BEEN PAID TO LENDER. 9-10 (PB 75-77) 15-11-06 TO 15-1-07 9556 CALCULATION OF INTEREST RECEIVED FROM BORROWERS IN RESPECT OF 69 SLIPS AND OPEN AMOUNT 5 (PB 74) 15-1-07 TO 15-3-07 8212 CALCULATION OF INTEREST RECEIVED FROM BORROWERS IN RESPECT OF 69 SLIPS AND OPEN AMOUNT 12-13 (PB87-89) 15-3-07 TO 15-5-07 10492=35 CALCULATION OF INTEREST RECEIVED FROM BORROWERS IN RESPECT OF 69 SLIPS AND OPEN AMOUNT 27 & BACK (PB 80-81) 1-8-06 TO 1-10-06 8670 CALCULATION OF INTEREST RECEIVED FROM BORROWERS IN RESPECT OF 50 SLIPS AND OPEN AMOUNT (ANNEXURE A-22 PB 92-93) 34-35 (PB 84-86) 1-10-06 TO 1-12-06 10153 CALCULATION OF INTEREST RECEIVED FROM BORROWERS IN RESPECT OF 50 SLIPS AND OPEN AMOUNT 33 & BACK (PB 80-83) 1-2-07 TO 1-4-07 5130 CALCULATION OF INTEREST RECEIVED FROM BORROWERS IN RESPECT OF 30 SLIPS 2. THE FACT THAT THE ABOVE AMOUNTS WERE ADVANCED BY TH E LENDER SHRI AMAN GUPTA AND SHRI ANURAG KOOLWAL TO DIFFERENT BOR ROWERS IS ALSO EVIDENT FROM ANNEXURE A-22 A-2 AND A-21. IN ANNEXU RE A-22 (PB 90-91) THE DETAILS OF AMOUNT ADVANCES BY THE LENDER SHRI AMAN TO VARIOUS BORROWERS ARE NOTED IN RESPECT OF 69 SLIPS OUTSTANDING ON 19- 5-07. SIMILARLY THE AMOUNT ADVANCED BY LENDER SHRI ANURAG KOOLWAL 9 (AK) TO VARIOUS BORROWERS IN RESPECT OF 40 SLIPS AR E NOTED. (PB 92- 93) . AGAIN THE WORKING OF INTEREST REALIZED FROM BORRO WERS AND PAYABLE TO LENDERS ARE FOUND NOTED IN ANNEXURE A-2 (PB 94-98) . AGAIN SUCH WORKING IS AVAILABLE IN ANNEXURE A-21 (PB 99-110) WHICH IS THE BORROWER WISE DETAIL IN WHICH NAME OF AMAN AND ANUR AG IS ALSO APPEARING. THESE PAPERS CONCLUSIVELY ESTABLISHES TH E FACT THAT THE AMOUNT INVOLVED IN THESE PAPERS ARE NOT THE AMOUNT ADVANCED BY THE ASSESSEE BUT ARE ONLY THE NOTING MADE BY THE ASSESS EE AS A BROKER FOR RECOVERY OF INTEREST FROM BORROWERS AND REMITTING T HE SAME TO THE LENDERS. IN VIEW OF ABOVE THE ADDITION MADE BY THE AO AND CONFIRMED BY CIT(A) ON ACCOUNT OF THE PRINCIPAL AMOUNT INVOLV ED IN THESE PAPERS IN THE HANDS OF THE ASSESSEE IS UNJUSTIFIED AND UNCALLED FOR. 3. SECTION 292C PROVIDES THAT WHERE ANY BOOKS OF ACCOU NTS OR OTHER DOCUMENTS FOUND IN POSSESSION OF ANY PERSON IN COUR SE OF SEARCH U/S 132 THEN IT IS PRESUMED THAT THE CONTENTS OF SUCH BOOKS OF ACCOUNTS AND OTHER DOCUMENTS ARE TRUE. IN HE PRESENT CASE TH E DOCUMENTS FOUND IN SEARCH FROM POSSESSION OF ASSESSEE RECORDS THE T RANSACTIONS OF AMOUNT LENT BY ONE PARTY TO ANOTHER PARTY. THE CONT ENTS OF SUCH DOCUMENTS ARE TO BE PRESUMED TO BE TRUE UNLESS OTHE RWISE PROVED. THE AO HAS NOT BROUGHT ANY MATERIAL TO NEGATE THIS PRES UMPTION. THUS AS PER LEGAL PRESUMPTION ALSO ASSESSEE CANT BE HELD T O BE A MONEY LENDER IN RESPECT OF SUCH TRANSACTION. 4. IT IS SUBMITTED THAT ON THE BASIS OF ANNEXURE A-8 T HE AO HAS ALLEGED THAT THE ASSESSEE IS INDULGED IN MONEY LENDING ACTI VITY AND THE AMOUNT MENTIONED THEREIN REPRESENTS THE ASSESSEES INVESTM ENT IN MONEY 10 LENDING TRANSACTIONS. HOWEVER AT THE SAME TIME THE AO ON THE BASIS OF THIS ANNEXURE HAS WORKED OUT THE BROKERAGE INCOME O F THE ASSESSEE. THIS IS EVIDENT FROM PAGE 8 OF THE ORDER WHEREIN ON THE BASIS OF ANNEXURE A-8 AN AMOUNT OF RS. 7280.67 LACS HAS BEEN CONSIDERED TO BE THE VOLUME OF MONEY ON WHICH BROKERAGE INCOME IS ESTIMATED. HENCE ON THE BASIS OF THIS VERY ANNEXURE ADDITION O F RS. 4 85 37 833/- MADE ON ACCOUNT OF ASSESSEES INVESTMENT IN MONEY L ENDING TRANSACTION IS UNCALLED FOR. THE CIT(A) HOWEVER EXC LUDED THE TURNOVER OF THESE TRANSACTIONS FOR DETERMINING THE BROKERAGE INCOME OF THE ASSESSEE BUT HE HAS NOT BROUGHT ANY MATERIAL ON RECORD TO PROVE THAT THESE PAPERS REFLECT THE MONEY ADVANCED BY THE ASSESSEE. HE HAS ALSO NOT GIVEN ANY FINDING ON THE VARIOUS OTHER PAP ERS FROM WHICH THE AMOUNT MENTIONED IN ANNEXURE A-8 ARE CORRELATED TO ESTABLISH THAT THESE TRANSACTIONS ARE NOT THE TRANSACTIONS OF AMOU NT ADVANCED BY THE ASSESSEE. THE DEPARTMENT HAS ALSO CHALLENGED THE FI NDINGS OF CIT(A) IN EXCLUDING RS. 7280.67 LACS FOR WORKING OUT BROKE RAGE INCOME IN GROUND NO. 2 (I). THUS WHEN THE PAPERS FOUND IN SEA RCH AS WELL AS THE DEPARTMENT PROVES/ACCEPTS THAT ANNEXURE A-8 IS IN R ELATION TO BROKERAGE ACTIVITY OF THE ASSESSEE CONSIDERING THE SAME AS ASSESSEES INVESTMENT IN MONEY LENDING BUSINESS IS CONTRARY TO THE MATERIAL ON RECORD. 5. THE VARIOUS OBSERVATIONS MADE BY LD. CIT(A) FOR CON SIDERING THE TRANSACTIONS IN ANNEXURE A-8 AS MONEY ADVANCED BY T HE ASSESSEE IS MISCONCEIVED AND WITHOUT CORRECTLY APPRECIATING THE MATERIAL ON RECORD AS EXPLAINED BELOW:- 11 (A) IN REPLY TO Q. NO. 17 (PB 5-6) THE ASSESSEE IN RESPECT OF PAGE 4 6 8 & 25 OF A-2 HAS STATED THAT THESE ARE THE TRANSACTI ONS RELATING TO MR. DINESH SAINI OF DUBAI TO WHOM HE LENT RS. 20 LA CS ON 1-6-205. THUS THE ADMISSION OF ASSESSEE FOR MONEY LENDING IS WITH REFERENCE TO SPECIFIC PAPERS AND TO THIS EXTENT THE ASSESSEE HIMSELF HAS OFFERED RS. 20 LACS IN A. Y. 2006-07. THIS CANNOT B E GENERALIZED TO OTHER TRANSACTIONS/PAPERS MORE PARTICULARLY WHEN WI TH REFERENCE TO PAPERS IN ANNEXURE A-1 A-2 A-4 A-8 A-13 TO A-19 AND VARIOUS OTHER ANNEXURES THE AMOUNT INVOLVED THEREIN HAS BEE N CONSIDERED TO BE MONEY TURNOVER ON WHICH THE BROKERAGE INCOME IS ESTIMATED BY AO. (B) IN THE PRELIMINARY STATEMENT IN REPLY TO Q. NO. 9 (PB 2-3) THE ASSESSEE HAS CATEGORICALLY STATED THAT HE IS ENGAGE D IN FINANCE BROKERAGE JEWELRY BROKERAGE & FINANCE CONSULTANCY. IN REPLY TO VARIOUS OTHER QUESTIONS ASSESSEE HAS TIME AND AGAIN STATED THAT HE IS ENGAGED IN MONEY LENDING BROKERAGE AND HAWALA B USINESS. HENCE ANNEXURE A-8 IGNORING THE EVIDENCE BROUGHT O N RECORD BY THE ASSESSEE CANNOT BE CONSIDERED AS MONEY LENDING ADVANCE OF THE ASSESSEE. (C) IN REPLY TO Q. NO. 34 (PB 12) REGARDING THE SOURCE OF CASH FOUND IT IS EXPLAINED THAT THE SAME IS OUT OF HIS EARNING FR OM HAWALA MONEY LENDING AND BROKERAGE BUSINESS. FROM THIS IT CANNOT BE INFERRED THAT ANNEXURE A-8 RELATES TO MONEY LENDING OF ASSESSEE. (D) IN REPLY TO Q NO. 37 (PB 13-14) THE ASSESSEE MADE SURRENDER OF RS. 2.37 CRORE ON THE BASIS OF UNACCOUNTED FUNDS WHICH IS IN CIRCULATION AS PER LOOSE PAPERS SEIZED DURING COURS E OF SEARCH. IT IS SPECIFICALLY STATED THAT IT INCLUDES THE AMOUNT ADV ANCED TO DINESH 12 SAINI. THUS THE MONEY LENDING WAS ONLY TO EXTENT OF RS. 20 LACS ADVANCED TO MR. SAINI AND THE REST WAS THE AMOUNT I N CIRCULATION. FROM THIS REPLY IT CANNOT BE CONCLUDED THAT ANNEXUR E A-8 IS IN RESPECT OF MONEY ADVANCED BY THE ASSESSEE. (E) THE ASSESSEE IN Q. NO. 9 (PB 17) OF STATEMENT DATED 16-7-07 HAS STATED THAT ANNEXURE A-8 REFLECTS THE ROTATION OF M ONEY INTEREST CALCULATION AND THE COMMISSION DETAIL. IT IS SPECIF ICALLY POINTED OUT THAT IT CONTAIN THE DETAILS OF INTEREST RECEIVED FR OM PARTICULAR PARTIES. IT IS NOWHERE STATED THAT THE ADVANCE WAS GIVEN BY HIM OR INTEREST IS EARNED BY HIM. (F) IN REPLY TO Q. NO. 26 (PB 23) ASESSEE INCREASED THE SURRENDER TO RS. 3.50 CRORE CONSIDERING ALL THE ANNEXURES AND AM OUNT INVOLVED IN THE MARKET. FROM THIS REPLY IT CANNOT BE INFERRE D THAT THIS IS THE AMOUNT OF INVESTMENT MADE BY THE ASSESSEE IN MONEY LENDING BUSINESS IGNORING THE VARIOUS OTHER DOCUMENTS AND T HE PAPERS. IN FACT ASSESSEE WAS CONTINUOUSLY INTERROGATED FOR FIV E DAYS WHICH IS EVIDENT FROM THE FACT THAT RECORDING OF HIS STATEME NT STARTED ON 16- 7-07 AND CONCLUDED ON 20-7-07 (PB 15-38). THIS ITSELF SHOWS THAT THE ASSESSEE WAS COERCED TO ADMIT THAT RS. 3.50 CRO RES AS HIS AMOUNT INVOLVED IN THE MARKET. IN THESE CIRCUMSTANC ES STATEMENT OF THE ASSESSEE BY NO STRETCH OF IMAGINATION CANN OT BE SAID TO BE VOLUNTARY. THE CASES RELIED BY THE CIT(A) ARE THER EFORE NOT APPLICABLE TO THE FACTS OF THE ASSESSEES CASE. 6. IT IS WELL SETTLED LAW THAT FOUNDATION OF ASSESSMEN T CANNOT BE SOLELY THE STATEMENTS GIVEN DURING SEARCH UNTIL AND UNLESS THE MATERIAL FOUND IN SEARCH SUGGESTS SO. THE MATERIAL FOUND IN SEARCH SUGGEST THAT THE 13 ASSESSEE IS A BROKER AND NOT MONEY LENDER. HENCE SO LELY ON THE BASIS OF STATEMENTS ADDITION CANNOT BE MADE. FOR THIS REL IANCE IS PLACED ON FOLLOWING CASES:- PULLANGONE RUBBER PRODUCE COMPANY LIMITED V. STATE OF KERELA AND ANOTHER 91 ITR 18 (SC) HELD THAT ADMISSION IS AN EXTREMELY IMPORTANT PIECE OF EVIDENCE BUT IT CANT BE SAID TH AT IT IS CONCLUSIVE. IT IS OPEN TO THE ASSESSEE WHO MADE ADMISSION TO SHOW THAT IT IS INCORRECT AND THE ASSESSEE SHOULD BE GIVEN PROPER O PPORTUNITY TO SHOW THE CORRECT STATE OF AFFAIRS. ITO VS. VIJAY KUMAR KESAR (2010) 36 DTR 13 (CHATTIS GARH) HELD THAT CONFESSION MADE BY THE ASSESSEE DURING THE SUR VEY PROCEEDINGS IS NOT CONCLUSIVE AND IT IS OPEN TO THE ASSESSEE TO ES TABLISH THAT THE SAME WAS NOT TRUE AND CORRECT BY FILING COGENT EVIDENCE. THE TRIBUNAL ACCEPTED THE EXPLANATION OF THE ASSESSEE FOR RETRAC TING HIS ADMISSION AND DELETED THE ADDITION MADE ON ACCOUNT OF EXCESS CASH AND STOCK BY ACCEPTING THE UPDATED BOOKS OF ACCOUNT PREPARED BY THE ASSESSEE SUPPORTED BY PRIMARY EVIDENCES ON RECORD. MAYANK PODDAR (HUF) V. WEALTH TAX OFFICER 181 CTR 3 62 (CAL) HELD THAT A PROPERTY WHICH IS NOT OTHERWISE TAXABLE CANT BECOME TAXABLE BECAUSE OF MISUNDERSTANDING OR WRONG UNDERS TANDING OF LAW BY THE ASSESSEE OR BECAUSE OF HIS ADMISSION OR MISA PPREHENSION. SURENDRA PAL VERMA VS. ACIT 89 ITD 129 (CHD)(TM): CONFESSIONAL STATEMENT MADE DURING SEARCH ARE OFTEN VENERABLE ON GROUND THAT PERSON GIVING SUCH STATEMENT REMAIN UND ER A GREAT MENTAL STRESS AND STRAIN AND IN THE ABSENCE OF AVAILABILIT Y OF RELEVANT DETAILS DOCUMENTS AND BOOKS AT THE TIME OF GIVING STATEMENT PRECISE 14 INFORMATION AS TO UTILIZATION OF SUCH INCOME AND YE AR OF INVESTMENT CANNOT BE CORRECTLY FURNISHED. THE BOARD IN INSTRUCTION NO. 286/2/2003-IT(INV.) DA TED 10-3-2003 HAS ALSO ADVISED THAT ASSESSING OFFICER SHOULD RELY UPON EVIDENCE/MATERIAL GATHERED DURING THE COURSE OF SEA RCH WHILE FRAMING THE ASSESSMENT ORDER AND NOT ON THE CONFESSION STAT EMENT MADE IN COURSE OF SEARCH AND SEIZURE. IN VIEW OF ABOVE THE ADDITION OF RS. 4 85 37833/- M ADE BY THE AO AND CONFIRMED BY THE CIT(A) BE DIRECTED TO BE DELETED. SO FAR AS INTEREST OF RS. 58.25 LACS DELETED BY CIT(A) BY ALLOWING SET OFF AGAINST THE INVESTMENT THE SAME NEEDS TO BE CONFIRMED BUT ON T HE GROUND THAT ASSESSEE HAS NOT EARNED ANY INTEREST AS THE ALLEGED AMOUNT OF RS. 4 85 37 833/- IS NOT THE AMOUNT LENT BY THE ASSESSE E IN THE MARKET. ACCORDINGLY GROUND OF THE ASSESSEE BE ALLOWED GROU ND NO. 1 OF THE DEPARTMENT BE DISMISSED AND GROUND NO. 2 OF THE DEP ARTMENT FOR ASSESSING THE BROKERAGE INCOME AT RS. 44.58 LACS BE ACCEPTED. 2.6 THE LD. AR FURTHER DREW OUR ATTENTION TO THE NE WS REPORT APPEARING IN NEWSPAPER AMAR UJALA DATED 18 TH SEPT. 2009. IN THIS NEWS REPORT IT IS MENTIONED THAT A PERSON STAYING IN A HOTEL AT HARID WAR LEFT HIS ROOM IN THE MORNING OF 14 TH SET. 2009 BUT DID NOT RETURN TILL LATE NIGHT. THE MANAGEMENT OF THE HOTEL THEREFORE INTIMATED THE POLICE AND TH E POLICE MADE SEARCH OF THE ROOM OCCUPIED BY THAT PERSON IN THE HOTEL. IN THE HOTEL THE PERSON HAS MENTIONED HIS NAME AS NARESH KUMAR S/O SHRI SAWAR M AL PARWAL R/O MAHESH COLONY NEAR TONK PHATAK JAIPUR . DURING SEA RCH OF THE ROOM 15 OCCUPIED BY THE PERSON WHO MENTIONED HIS NAME AS NA RESH PARWAL IN HOTEL REGISTER THE POLICE FOUND A LETTER IN WHICH IT WAS WRITTEN BY SHRI NARESH PARWAL THAT HE IS COMMITTING SUICIDE BECAUSE HE HAS TO PAY HUGE LOAN. THE RELATIVES OF SHRI NARESH PARWAL REACHED HARIDWAR AN D AS PER NEWSPAPER REPORT THE RELATIVES WERE NOT ABLE TO TRACE SHRI N ARESH PARWAL. FROM THE NEWSPAPER REPORT THE LD. AR SUBMITTED THAT THE ASS ESSEE WAS NOT ABLE TO REPAY THE AMOUNTS GIVEN FROM OTHER PERSONS FOR GIVI NG TO OTHER PARTIES AS A LOAN BECAUSE HE WAS NOT ABLE TO RECOVER SUCH SUMS F ROM THE PARTIES TO WHOM THESE WERE GIVEN ON LOAN. LUCKILY THE PERSON DID N OT COMMIT SUICIDE. THE LD. AR SUBMITTED THAT THE ASSESSEE WAS SIMPLY A BRO KER AND WAS ADVANCING THE MONEY OF OTHER PARTIES.. 2.7 THE LD. DR REFERRED TO PAGE 8 OF THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2007-08 IN WHICH THE SEIZED DOCUMEN TS A-8 HAS BEEN REFERRED TO SHOW THE TURNOVER OF RS. 7280.67 LACS ON THE BASIS OF THE INTEREST SLIPS. EXHIBIT A-21 AND A-22 SHOW THE TURNOVER OF RS. 3609.60 IN RESPECT OF MONEY LENDING. EXHIBIT A-14 TO A-19 A-24 TO A- 27 AND A-38 TO A-39 ARE THE LEDGERS WHICH SHOW THE TURNOVER OF RS. 336 86.08 LACS. THUS THE TOTAL TURNOVER IN THE ASSESSMENT YEAR 2007-08 IS RS. 445 76.35 LACS. THEREAFTER THE LD. DR DREW OUR ATTENTION TO PAGE 10 AND 11 OF THE ASSESSMENT ORDER. THE AO HAS GIVEN DETAILS OF INTEREST MENTIONED AT DIFFE RENT PAGES OF ANNEXURE 16 A-8. FROM THE DETAILS AVAILABLE ON DIFFERENT PAGES OF ANNEXURE A-8 THE AO ASCERTAINED THE INTEREST TO THE EXTENT OF RS. 58 24 540/- FOR ASSESSMENT YEAR 2007-08 AND RS. 10 49 235/- FOR THE ASSESSMENT YEAR 2008-09. ON THE BASIS OF THE INTEREST THE AO DETERMINED THE AMOUNT OF PR INCIPLE AT RS. 4 85 37 833/- AND HELD THAT THIS AMOUNTS STANDS IN VESTED IN HAWLA/ MONEY LENDING BUSINESS. THE AO ALSO ADDED THE COMMISSION AT 0.1% ON THE TURNOVER FROM THE INTEREST SLIPS AND THE SEIZED D OCUMENTS CONTAINING THE MONEY LENDING TURNOVER AND LEDGER TURNOVER . THE L D. DR THEREAFTER DREW OUR ATTENTION TO THE STATEMENT RECORDED DURING THE COURSE OF SEARCH. AT THE TIME OF SEARCH THE ASSESSEE ADMITTED THE ADDITIONA L INCOME TO THE EXTENT OF RS. 3.00 CRORES INCLUDING CIRCULATION OF FUNDS IN T HE MARKET OF RS. 2.37 CRORES AND THE CASH FOUND OF RS. 63.00 LACS AT THE TIME OF SEARCH. DURING POST SEARCH THE ASSESSEE SURRENDERED RS. 3.50 CROR ES ON 20-07-2007. THUS THE SURRENDER WAS MADE BEFORE THE DDIT (INV.) JA IPUR TO THE EXTENT OF RS. 3.50 CRORES THOUGH AT THE TIME OF SEARCH THE SAME WAS AT RS. 3.00 CRORES. THE LD. DR SUBMITTED THAT THE SURRENDER WAS VOLUNTA RILY AND THEREFORE THE AO WAS JUSTIFIED IN MAKING ADDITION BY HOLDING THAT THE ASSESSEE IS INDULGING IN MONEY LENDING BUSINESS. 2.8 WE HAVE HEARD BOTH THE PARTIES. THE ASSESSEE IN THE NOTE ATTACHED WITH THE RETURN OF INCOME MENTIONED THAT SURRENDER IN ST ATEMENT U/S 132(4) WAS 17 MADE ON ESTIMATE BASIS WITHOUT MAKING ANY WORKING F ROM THE SEIZED DOCUMENTS. THE SEARCH WAS CONDUCTED ON 21-06-07 AND THE STATEMENT U/S 132(4) WAS RECORDED ON 21-06-07. DURING POST SEARCH THE ASSESSEE SURRENDERED RS. 3.50 CRORES ON 20-07-07. HOWEVER THE RETURN OF INCOME FILED ON 13 TH NOV. 09 SHOWS AN INCOME OF RS. 46 48 580/-. THE AS SESSEE HAS DECLARED UNDISCLOSED INCOME OF RS. 1.30 CRORES FOR THE ASSESSMENT YEARS 2006-07 TO 2008-09 AS AGAINST RS. 3.50 CRORES. THE AO REQUIRED THE ASSESSEE TO EXPLAIN AS TO WHY TO SURRENDER AMOUNT HAS NOT BE EN DISCLOSED IN THE RETURN OF INCOME. THE ASSESSEE SUBMITTED THAT CERTAIN APPR OVAL SLIPS FOUND DURING THE COURSE OF SEARCH CONTAIN THE NAMES OF THE LENDE RS AND THE BORROWERS. THE SIGNATURE OF THE BORROWERS ARE ALSO AVAILABLE AT TH ESE APPROVAL SLIPS. THE AMOUNT MENTIONED IN THE APPROVAL SLIPS DO NOT PERTA IN TO HIM. THE ADDRESSES OF THE PARTIES AS KNOWN TO HIM WERE ENCLOSED. IN TH E PAPER BOOK THE LD. AR OF THE ASSESSEE HAS FILED THE NAMES OF THE BORROWER S AND THE NAMES OF THE LENDERS. THESE DETAILS ARE AVAILABLE AT PAGES 71 TO 72 OF THE PAPER BOOK. IN THESE DETAILS THE ASSESSEE HAS GIVEN THE EXHIBIT N O. PAGE NO. OF THE EXHIBIT NAME OF THE LENDERS NAME OF THE BORROWERS AND THE INTEREST AMOUNT. EXHIBIT MENTIONED IN THESE PAPERS ARE A-8 AND A-22. THE COP IES OF CERTAIN PAGES OF SOME EXHIBITS HAVE ALSO BEEN ENCLOSED IN THE PAPER BOOK. IN SOME OF THE PAPERS NAMES OF THE LENDERS IS ABBREVIATED AND ON THE SAME PAPERS ONLY 18 INITIAL HAS BEEN MENTIONED E.G. SOMEWHERE IT IS MEN TIONED AS A IT MEANS AMAN AND IN SOME PAPER IT IS MENTIONED AS AK AJAY KOOLWAL. THUS THE ASSESSEE HAS GIVEN AN EXPLANATION TO THE AO THAT HE IS A BROKER. THE LD. CIT(A) HAS ACCEPTED THAT HE IS A BROKER AND IN EARL IER RETURN THE ASSESSEE HAS BEEN SHOWN BROKERAGE FROM FINANCIAL TRANSACTIONS. W E ARE AWARE THAT ON THE BASIS OF SEIZED PAPERS FOUND AT THE PREMISES OF A P ERSON CANNOT BE CONCLUSIVELY EVIDENCE FOR HOLDING THAT SUCH AMOUNTS ARE DISCLOSED UNDISCLOSED INCOME OF THAT PERSON. EVEN IF THE DOCU MENTS ARE CONSIDERED TO BE TRUE THE PROVISIONS OF SECTION 68 AND 69 MAY BE APPLICABLE IN THE CASE OF THE ASSESSEE. THE ASSESSEE WILL BE AT LIBERTY TO AR GUE THAT SUCH PROVISIONS ARE NOT APPLICABLE IN THE CASE OF A BROKER AND ASSESSEE WILL HAVE TO ESTABLISH THAT HE IS A BROKER AND NOT MONEY LENDER. HOWEVER THE C ONTENTION OF THE ASSESSEE IS THAT THE HE WAS SIMPLY A BROKER AND WAS ADVANCIN G BELONGING TO OTHERS HAS NOT BEEN DULY CONSIDERED AND INVESTIGATED BY TH E AO. THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF HUKAM CHAN D JAIN VS. ITO 334 ITR 197 HELD THAT ADMISSION IS AN IMPORTANT PEACE O F EVIDENCE BUT IS NOT CONCLUSIVE. IT IS OPEN TO THE ASSESSEE TO SHOW THAT ADMISSION IS NOT CORRECT. THE ADMISSION MADE BY THE AO HAS TO BE DISLODGED BY HIM. THE ASSESSEE HAS GIVEN THE ADDRESSES OF THE BORROWERS AS WELL A S LENDERS. THE AO WILL THEREFORE HAVE TO VERIFY AS TO WHETHER INTEREST RE CEIVED BY THE ASSESSEE IS IN 19 RESPECT OF HIS OWN INVESTMENT OR IT IS FROM THE FU NDS MADE AVAILABLE TO HIM BY EITHER PARTIES. THEREFORE THE ISSUE OF ADDITIO N OF RS. 4 85 37 833/- IS RESTORED BACK ON THE FILE OF THE AO. 3.1 THE SECOND GROUND OF APPEAL OF THE ASSESSEE IS THAT THE LD. CIT(A) HAS ERRED IN UPHOLDING THE ACTION OF THE AO IN WORKING OUT INCOME ON INTEREST ON APPROVAL MEMO AT RS. 1.20 LACS EVEN THOUGH NO SEPAR ATE ADDITION HAS BEEN MADE. 3.2 THE BRIEF FACTS IN THIS CASE ARE AS UNDER:- 1. IN SEARCH AN APPROVAL MEMO OF RS. 10 LACS DATED 3 0-10-01 WAS FOUND AT PAGE 25 OF ANNEXURE A-2. AS PER THIS APPRO VAL MEMO SHRI OMPRAKASH WAS THE LENDER AND SHRI SURESH KUMAR WAS THE BORROWER. NO RATE OF INTEREST IS MENTIONED ON THIS MEMO. (ANN EXURE A TO ASSESSMENT ORDER) . 2. IN COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE VI DE LETTER DATED 14- 12-2009 SUBMITTED THAT HE ACTED AS A BROKER IN RESP ECT OF THIS TRANSACTIONS AND THEREFORE SLIPS WAS LYING WITH HIM . HE ALSO SUBMITTED THAT HE HAS NOT GIVEN ANY ADVANCE TO THIS PARTY. HE ALSO REQUESTED TO MAKE DIRECT ENQUIRY AND SUBMITTED THE ADDRESSES OF BOTH THE PARTIES. 3. THE AO WHILE COMPLETING THE ASSESSMENT FOR A. Y. 20 02-03 HELD THAT THE APPROVAL MEMOS ARE NOTHING BUT HUNDIES DULY SIG NED BY THE ASSESSEE. THE TRANSACTIONS RECORDED IN THE APPROVAL MEMO ARE UNRECORDED DEBTORS OF THE ASSESSEE AND THEREFORE HE ADDED THE SAME TO 20 THE TOTAL INCOME OF THE ASSESSEE. ON THIS AMOUNT HE CALCULATED INTEREST @ 1% TO MAKE ADDITION OF RS. 1.20 LACS IN THE YEAR UNDER CONSIDERATION. HOWEVER NO SEPARATE ADDITION WAS MAD E BY ALLOWING IT AS SET OFF AGAINST THE INVESTMENT ADDED BY HIM. THE APPEAL FOR A.Y. 2002-03 IS STILL PENDING BEFORE CIT(A). 3.3 THE LD. CIT(A) HAS NOT MADE ANY SPECIFIC FINDIN G. 3.4 DURING THE COURSE OF PROCEEDING BEFORE US THE LD. AR HAS SUBMITTED AS UNDER:- 1. AT THE OUTSET IT MAY BE POINTED OUT THAT THE OBSERV ATION MADE BY THE AO THAT THE ASSESSEE IS INDULGED IN MONEY LENDING B USINESS IS INCORRECT AND CONTRARY TO SEIZED RECORDS. THE AFORE SAID APPROVAL MEMOS CONTAIN THE NAME OF BOTH THE LENDER AND THE B ORROWER PARTIES AND ALSO THE SIGNATURE OF THE BORROWER PARTIES. THE RE IS NO SIGNATURE OF THE ASSESSEE. THE ASSESSEE HAS GIVEN THE NAME AND A DDRESSES OF THESE PARTIES VIDE LETTER DATED 14-12-09 AND REQUESTED T HE AO TO MAKE INDEPENDENT ENQUIRY. HOWEVER THE AO WITHOUT MAKING ANY ENQUIRY HAS HELD THAT THE TRANSACTIONS ARE UNRECORDED DEBTO RS OF THE ASSESSEE WHICH IS NEITHER BORN OUT FROM THE STATEMENTS NOR F ROM SEIZED DOCUMENTS. FURTHER THE AO CONTRADICTS IN HIS STAND AS ON THE ONE HAND HE HAS ASSESSED BROKERAGE INCOME ON THE TRANSACTION S OF APPROVAL MEMO AS OFFERED BY THE ASSESSEE IN RETURN (AO PAGE 8) AND ON THE OTHER HAND HE TREATED THAT THE ASSESSEE HAS LENT HI S OWN CAPITAL IN THE MARKET. HENCE ADDITION ON ACCOUNT OF INTEREST MADE BY THE AO NEEDS TO BE DELETED. 21 2. THE ASSESSEE IN HIS PRELIMINARY STATEMENT RECORDED U/S 132(4) DATED 21-6-07 HAS CATEGORICALLY STATED THAT HE IS A FINAN CE BROKER AND ARRANGED THE TRANSACTION BETWEEN THE PARTIES ON WHI CH HE HAD RECEIVED DALALI WHICH IS GENERALLY RS. 100/- P.M. FOR TRANSA CTION OF ONE LAC. . IN REPLY TO A SPECIFIC QUESTION Q. NO. 23 AND 24 ABOU T THE APPROVAL MEMO SIZED VIDE ANNEXURE A-2 THE ASSESSEE REPLIED T HAT HE ACTED AS BROKER AND RECEIVED DALALI IN THE TRANSACTIONS NOTE D IN APPROVAL MEMO. THE AMOUNT MENTIONED IN THESE APPROVAL MEMOS DO NOT PERTAIN TO HIM. IT IS OF VARIOUS PARTIES WHOSE NAME ARE MENTIO NED ON THE SLIP. THESE APPROVAL MEMOS WERE PENDING TO BE DELIVERED T O THE PARTIES. HE ALSO EXPLAINED THE MANNER IN WHICH SUCH APPROVAL ME MOS ARE WRITTEN. THUS THE ASSESSEE HAS NOWHERE STATED THAT AMOUNT IN VOLVED IN THESE APPROVAL MEMOS ARE HIS INVESTMENT AS ALLEGED BY THE AO. OTHERWISE ALSO NO RATE OF INTEREST IS MENTIONED ON THIS APPRO VAL MEMO AND THEREFORE ASSUMING INTEREST ON THE SAME IS BAD-IN-L AW. 3. SECTION 292C PROVIDES THAT WHERE ANY BOOKS OF ACCOU NTS OR OTHER DOCUMENTS FOUND IN POSSESSION OF ANY PERSON IN COUR SE OF SEARCH U/S 132 THEN IT IS PRESUMED THAT THE CONTENTS OF SUCH BOOKS OF ACCOUNTS AND OTHER DOCUMENTS ARE TRUE. IN HE PRESENT CASE TH E APPROVAL MEMO FOUND IN SEARCH FROM POSSESSION OF ASSESSEE RECORDS THE TRANSACTIONS OF AMOUNT LENT BY ONE PARTY TO ANOTHER PARTY. THE C ONTENTS OF SUCH MEMO ARE TO BE PRESUMED TO BE TRUE UNLESS OTHERWISE PROVED. THE AO HAS NOT BROUGHT ANY MATERIAL TO NEGATE THIS PRESUMP TION. THUS AS PER LEGAL PRESUMPTION ALSO ASSESSEE CANT BE HELD TO BE A MONEY LENDER IN RESPECT OF SUCH TRANSACTION AND THEREFORE NO INTER EST CAN BE 22 CONSIDERED IN THE HANDS OF THE ASSESSEE IN RESPECT OF THIS APPROVAL MEMO. IN VIEW OF ABOVE THE AO BE DIRECTED NOT TO MAKE ANY ADDITION ON ACCOUNT OF INTEREST IF THE INCOME IS ASSESSED ON TH E BASIS OF INCOME APPROACH. 3.5 ON THE OTHER HAND THE LD. DR DREW OUR ATTENTION TO PAGE 5 AND 6 OF THE ASSESSMENT ORDER. THERE IS AN APPROVAL MEMO AVA ILABLE IN ANNEXURE A-2 WHICH SHOWS THAT A SUM OF RS. 10.00 LACS HAS BEEN L ENT TO SHRI SURESH KUMAR. AFTER THE SAME WAS GIVEN BY SHRI OM PRAKAS H TO THE ASSESSEE AS BROKER FOR THE PURPOSE OF ADVANCING THE LOAN. ON TH E BASIS OF THIS APPROVAL MEMO THE AO HAS INCLUDED THE INTEREST INCOMEOF RS. 1.20 LACS . HOWEVER NO SEPARATE ADDITION HAS BEEN MADE BECAUSE THIS STA NDS INCLUDED IN THE DEBTORS AND INTEREST. THE INTEREST AS PER ANNEXURE A-8 IS RS. 58 24 540/-. 3.6 WE HAVE HEARD BOTH THE PARTIES. IT IS NOTICED T HAT THE AO HAS MADE NO SEPARATE ADDITION FOR THE SUM OF RS. 1.20 LACS. THE INTEREST INCLUDED IN THE INCOME IS ON THE BASIS OF ANNEXURE A-8 WHILE APPROV AL MEMO IS AVAILABLE IN ANNEXURE A-2. THE ASSESSEE HIMSELF HAS SURRENDERED THE UNDISCLOSED INCOME TO THE EXTENT OF RS. 45.00 LAS. HENCE NO SEPARATE ADDITION IS REQUIRED TO BE MADE. THUS IT IS NOT NECESSARY TO ADJUDICATE UPON T HE ISSUE OF ADDITION. THE ADDITION IN RESPECT OF RS. 10.00 LACS IS PENDING B EFORE THE LD. CIT(A) FOR THE 23 ASSESSMENT YEAR 2002-03. HENCE WE ARE NOT PRE-EMPT ING THE FINDING OF THE LD. CIT(A) FOR THE ASSESSMENT YEAR 2002-03. 4.1 THE THIRD GROUND OF APPEAL OF THE ASSESSEE IS T HAT THE LD. CIT(A) HAS ERRED IN ASSESSING THE INCOME FROM INTEREST AT RS. 4.80 LACS ON ADVANCE TO SHRI DINESH SAINI. 4.2 THE AO NOTICED THAT THE ASSESSEE DURING THE COU RSE OF SEARCH PROCEEDINGS ADMITTED TO HAVE ADVANCED A SUM OF RS. 20.00 LACS TO SHRI DINESH SAINI ON 01-06-05. THE ASSESSEE IN THE STATE MENT ADMITTED THAT HE HAS TO RECEIVE INTEREST OF RS. 20.00 LACS @ 2% UPTO THE DATE OF SEARCH. ACCORDING TO THE AO A SUM OF RS. 25.00 LACS REMAINED OUTSTAN DING AS ON 21-06-07. NO EVIDENCE IN RESPECT OF INTEREST RECEIVED HAS BEEN FILED. THE ASSESSEE SUBMITTED BEFORE THE AO THAT HE HAS MADE ADVANCE OF RS. 20.00 LACS TO SHRI DINESH SAINI. THIS ADVANCE OF RS. 20.00 LACS IS INC LUDED IN THE RETURN FOR THE ASSESSMENT YEAR 2006-07. NO INTEREST HAS BEEN RECEI VED AND EVEN THE RECEIPT OF PRINCIPLE AMOUNT IS DOUBTFUL. THE AO HELD THAT T HE INTEREST HAS ACCRUED TO THE ASSESSEE AND THEREFORE INCLUDED A SUM OF RS. 4 .80 LACS IN INTEREST.. HOWEVER NO SEPARATE ADDITION HAS BEEN MADE BECAUSE THE AO HAS CONSIDERED THE UNDISCLOSED INCOME ON THE BASIS OF T HE DEBTORS AND INTEREST AS PER ANNEXURE A-8. 4.3 BEFORE US THE LD. AR HAS SUBMITTED AS UNDER:- 24 THERE IS NO DISPUTE THAT ASSESSEE ADVANCED RS. 20 L ACS TO DINESH SAINI ON 01-6-05 . ON THIS AMOUNT INTEREST W ORKS OUT TO RS. 4.80 LACS. THE ASSESSEE HAS HOWEVER OFFERED INCOME AT RS. 45 LACS AS AGAINST BROKERAGE INCOME OF RS. 44.58 LACS WORKED O UT BY THE AO. THUS THERE IS AN EXCESS OFFER OF INCOME BY RS. 4200 0/-. THIS AMOUNT BE ALLOWED SET OFF AGAINST THE INTEREST OF RS. 4.80 LACS. ACCORDINGLY IF THE INCOME IS ASSESSED ON THE BASIS OF INCOME THEOR Y ADDITION ON ACCOUNT OF INTEREST BE SUSTAINED AT RS. 4.38 LACS A S AGAINST RS. 4.80 LACS CALCULATED BY THE AO. 4.4 WE HAVE HEARD BOTH THE PARTIES. SINCE THE ASSES SEE HIMSELF HAS SHOWN UNDISCLOSED INCOME AT RS. 45.00 LACS AND THEREFORE THE SUM OF RS. 4.80/- LACS STANDS INCLUDED IN THE INCOME OF RS. 45.00 LAC S. HENCE NO SEPARATE ADDITION IS REQUIRED TO BE MADE. 5.1 THE FOURTH GROUND OF APPEAL OF THE ASSESSEE IS THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF RS. 23 838/ - OUT OF VARIOUS EXPENSES. 5.2 THE FACTS OF THE CASE ARE THAT THE AO OBSERVED THAT FOR SOME EXPENSES MANUAL VOUCHERS HAVE BEEN PREPARED WITHOUT SIGNATUR E AND COMPLETE ADDRESSES OF THE RECIPIENTS. THE EXPENSES ARE NOT S UBJECT TO PROPER VERIFICATION. SOME OF THESE EXPENSES ARE OF PERSONA L NATURE AND PERSONAL USE CANNOT BE DENIED. NO DAY-TO-DAY CALL REGISTER FOR T HE TELEPHONE AND MOBILE HAS BEEN KEPT. NO LOG BOOK HAS BEEN MAINTAINED FOR CAR. BUSINESS 25 EXPEDIENCY OF THESE EXPENSES HAS NOT BEEN PROVED. A CCORDINGLY HE DISALLOWED 20% OF SUCH EXPENSES. 5.3 THE CIT(A) RESTRICTED THE DISALLOWANCE TO THE E XTENT OF 15% OF ABOVE EXPENSES AMOUNTING TO RS. 23 838/-. 5.4 WE HAVE HEARD BOTH THE PARTIES. THE LD. CIT(A) CONSIDERING THE SUBMISSIONS WAS FAIR ENOUGH TO RESTRICT THE DISALL OWANCE TO RS. 23 838/- INCLUDING THE DEPRECIATION ON CAR. 5.5 BEFORE US THE LD. AR HAS SUBMITTED THAT DEPRE CIATION CONSIDERED BY THE AO INCLUDE THE DEPRECIATION ON FAX MACHINE AND COMPUTER. THE DEPRECIATION ON CAR IS RS. 21 246/-. HENCE FOR CONS IDERING 15% OF THE EXPENSES TO BE DISALLOWED THE DEPRECIATION WILL H AVE TO BE TAKEN AT RS. 21 246/- AS AGAINST RS. 47 985/-. THE AO WILL RECOM PUTE THE DISALLOWANCE. 6.0 NOW WE WILL TAKE UP THE APPEAL OF THE REVENUE F OR THE ASSESSMENT YEAR 2007-08 PARTICULARS TOTAL AMOUNT OF EXPENSES DISALLOWED BY THE AO @20% CONVEYANCE EXPENSES 18 625/- 3 725/- TELEPHONE EXPENSES 86 361/- 17 272/- OFFICE EXPENSES 5 946/- 1 190/- DEPRECIATION ON CAR 47 985/- 9 597/- TOTAL 31 784/- ROUNDED OFF TO RS. 31 800/- 26 6.1 THE FIRST GROUND OF APPEAL OF THE REVENUE IS T HAT THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 58.25 LACS MA DE BY THE AO BEING INTEREST ON THE UNACCOUNTED MONEY LENDING ACTIVITY TO THE TUNE OF RS. 4 85 37 833/- EVEN AFTER CONFIRMING THAT ACTIVITY O F THE ASSESSEE INCLUDED THE ACTIVITY OF MONEY LENDING. 6.2 WHILE DECIDING THE APPEAL OF THE ASSESSEE WE HAVE RESTORED BACK THE ISSUE ON THE ADDITION OF RS. 4 85 37 833/- ON THE F ILE OF THE AO. THE AO WILL HAVE TO RECORD THE FINDING AS TO WHETHER THE TRANSA CTIONS MENTIONED IN ANNEXURE A-8 AND OTHER ANNEXURE REFERRED TO THE MON EY LENDING ACTIVITY OR WERE FOR THE ACTIVITY AS BROKER FOR PROVIDING FINAN CE TO THE PARTIES FROM OTHER PARTIES INTERESTED IN MAKING THE ADVANCE. IN CASE T HE ASSESSEE IS ONLY A BROKER THEN IT CHARGES THE COMMISSION AND THE INTER EST IS RECEIVABLE ON THE PARTIES WHO HAS PROVIDED THE FINANCE. THE AO HAS NE ITHER EXAMINED ANY LENDERS OR BORROWERS THOUGH THE ASSESSEE HAS PROVID ED THE NAMES AND ADDRESSES OF THE LENDERS AND BORROWERS. THE ISSUE O F INTEREST OF RS. 58.25 LACS IS ALSO RESTORED BACK ON THE FILE OF THE AO. T HE AO WILL PROVIDE THE OPPORTUNITY TO THE ASSESSEE TO SHOW THAT IT HAS REC EIVED ONLY BROKERAGE AND NO INTEREST HAS BEEN RECEIVED. 6.3 THE SECOND GROUND OF APPEAL OF THE REVENUE IS THAT THE LD. CIT(A) HAS ERRED IN REDUCING THE BROKERAGE TURNOVER TO RS. 37 295.68 LACS AS AGAINST 27 BROKERAGE TURNOVER OF RS. 44 576.35 LACS WORKED OU T ON THE BASIS OF SEIZED RECORDS. 6.4 THE AO HAS TAKEN THE TOTAL TURNOVER OF RS. 44 576.35 LACS BY CONSIDERING THE TURNOVER MENTIONED ON INTEREST SLI PS MONEY LENDING TURNOVER AND LEDGER TURNOVER . ON THE BASIS OF THE ABOVE TURNOVER THE COMMISSION HAS BEEN ESTIMATED AT RS. 44.58 LACS. T HE ASSESSEE HAS OFFERED THE UNDISCLOSED INCOME TO THE EXTENT OF RS. 45.00 L ACS AND THEREFORE NO SEPARATE ADDITION HAS BEEN MADE BY THE AO. 6.5 THE LD. CIT(A) HAS OBSERVED THAT THE AO HAS TRE ATED THE TRANSACTION IN EXHIBIT A-8 AND A-2 AS TRANSACTIONS RELATING TO MON EY LENDING BUSINESS AND THEREFORE SUCH TRANSACTION CANNOT BE CONSIDERED FOR THE PURPOSE OF COMPUTING THE BROKERAGE COMMISSION. FOR THE ASSESSM ENT YEAR 2007-08 THE TURNOVER ON THE BASIS OF EXHIBIT A-8 IS RS. 7280.67 LACS AND THEREFORE THE SAME WAS REDUCED FROM THE TOTAL TURNOVER OF RS. 44 756.35 LACS AND THE LD. CIT(A) DIRECTED THE AO TO TAKE BROKERAGE COMMISSION AT RS. 37.29 LACS. 6.6 WE HAVE HEARD BOTH THE PARTIES. SINCE WE HAVE R ESTORED THE ISSUE OF MONEY LENDING ON THE FILE OF THE AO THEREFORE THE AO WILL HAVE TO RECORD THE FINDINGS AS TO WHETHER TRANSACTIONS RECORDED IN ANNEXURE A-9 RELATED TO THE MONEY LENDING BUSINESS OR TO THE FINANCE BROKER AGE. HENCE THIS ISSUE IS RESTORED BACK ON THE FILE OF THE AO. 28 7.0 NOW WE WILL TAKE UP THE APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2008-09 IN ITA NO. 1315/JP/2010. 7.1 THE FIRST GROUND OF APPEAL OF THE ASSESSEE IS T HAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 58.25 LACS ON ACCOUNT OF INTEREST ON THE ALLEGED DEBTORS OF RS. 4 85 37 833/- IN THE ASS ESSMENT YEAR 207-08 BUT NOT ACCEPTING THAT THE ASSESSEE IS ONLY A BROKER IN RESPECT OF THESE TRANSACTIONS. 7.2 WE HAVE HEARD BOTH THE PARTIES. THE ISSUE OF HO LDING THE DEBTORS TO THE EXTENT OF RS. 4 8537 833/- FOR THE ASSESSMENT YEAR 2007-08 HAS BEEN RESTORED BACK ON THE FILE THE AO WHILE CONSIDERING THE APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2007-08 . FOLLOWING OUR FIN DING FOR THE AY 2007-08 WE RESTORE THIS ISSUE ON THE FILE OF THE AO BECAUSE THE QUANTUM OF DEBTORS IS TO BE DECIDED AFRESH. 8.1 THE SECOND GROUND OF APPEAL OF THE ASSESSEE IS THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 6 57 650/- ON ACCOUNT OF ALLEGED INTEREST ON THE LOAN AMOUNT ON APPROVAL MEMO AS PER ANNEXURE A-2 BUT NOT ACCEPTING THAT ASSESSEE IS ONLY A BROKER IN RESPECT OF THESE APPROVAL MEMOS. 8.2 WE HAVE HEARD BOTH THE PARTIES. THE APPROVAL ME MOS ARE IN CODE NOS. AND THE ENTRIES RECORDED IN APPROVAL MEMOS HAVE BEE N EXPLAINED BY THE ASSESSEE DURING THE COURSE OF SEARCH. HENCE THE ST ATEMENT OF THE ASSESSEE IN 29 DISCLOSING THE NATURE OF TRANSACTIONS CANNOT BE CON SIDERED AS UNTRUE. THE ONLY THING IS IN RESPECT OF APPLICATION OF SECTION 68 AND 69 OF THE ACT. THE AO WILL GIVE AN OPPORTUNITY TO THE ASSESSEE TO EXPL AIN THE TRANSACTIONS IN THE APPROVAL MEMOS EITHER BY PRODUCING THE BORROWERS OR THE LENDERS OR MAY ASK THE AO TO ISSUE SUMMONS TO PRODUCE SUCH BORROWERS A ND LENDERS. HENCE THIS ISSUE OF RS. 6 57 650/- IS RESTORED BACK ON TH E FILE OF THE AO. 9.1 THE THIRD GROUND OF APPEAL OF THE ASSESSEE IS T HAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 4.80 LACS O N ACCOUNT OF INTEREST ON ADVANCE TO SHRI DINESH SAINI OF RS. 20.00 LACS GIVE N IN THE ASSESSMENT YEAR 2006-07. 9.2 THE ASSESSEE DURING THE COURSE OF SEARCH PROCEE DINGS ADMITTED TO HAVE GIVEN THE LOAN @ 2%. THE APPROVAL MEMOS DID NOT CON TAIN THE RATE OF INTEREST. THE ASSESSEE IN HIS CONTENTION HAS STATED THAT EVEN THE PRINCIPAL AMOUNT IS DOUBTFUL. WHEN THE PRINCIPAL AMOUNT IS DO UBTFUL THEN THE INTEREST CANNOT BE SAID TO HAVE BEEN ACCRUED. WE RELY ON THE DECISION OF THE TRIBUNAL IN THE CASE OF RADHA MOHAN MAHESHWARI VS. DCIT (ITA NO. 1302 TO 1304/ JP/20 DATED 14-07-2011) WHERE FOLLOW ING CASE LAWS WERE RELIED UPON. 1. CIT VS. FAL INDUSTRIES LTD. 314 ITR 47 (MAD.) 2. CIT VS. CITY UNION BANK LTD. (MAD.) 3. CIT VS. FEDERAL BANK LTD. (KER.) 30 4. CIT VS. BIRLA GWALIOR (P) LTD. 89 ITR 266 (SC) 5. RAJASTHAN STATE GANGANAGAR SUGAR MILLS LTD. VS. DCI T (ITA NO. 28/JP/2010 DATED 20-08-2010) 6. MADAN LAL JAIN VS. ACIT (ITA NO. 198.JP/2005) ITAT JAIPUR WE THEREFORE FEEL THAT THE LD. CIT(A) WAS NOT JUST IFIED IN CONFIRMING THE ADDITION OF RS. 4.80 LACS. 10.1 THE FOURTH GROUND OF APPEAL OF THE ASSESSEE IS THAT THE LD. CIT(A) HAS ERRED IN UPHOLDING THE ACTION OF THE AO IN DETERMIN ING THE AMOUNT OF DEBTORS AS PER APPROVAL MEMO AT RS. 70.00 LACS AND AS PER ANNEXURE A-8 AT RS. 87 43 625/-. 10.2 WE HAVE HEARD BOTH THE PARTIES. THE ISSUE AS T O WHETHER THE AMOUNTS RECEIVED AS PER APPROVAL MEMO AND AS PER ANNEXURE A -8 WERE FROM OTHER PARTIES BY THE ASSESSEE AS A BROKER AND HE ONLY CHA RGED THE COMMISSION. THIS ISSUE HAS BEEN RESTORED BACK ON THE FILE OF THE AO WHILE ADJUDICATING UPON THE GROUND OF APPEAL NO. 1 FOR THE ASSESSMENT YEAR 2007-08. FOLLOWING OUR FINDINGS FOR THE ASSESSMENT YEAR 2007-08 THIS ISSU E IS ALSO RESTORED BACK ON THE FILE OF THE AO. 11.1 THE FIFTH GROUND OF APPEAL OF THE ASSESSEE IS THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF RS. 22 422/ - OUT OF VARIOUS EXPENSES. 31 11.2 AFTER HEARING BOTH THE PARTIES WE FEEL THAT T HE LD. CIT(A) WAS JUSTIFIED FAIR ENOUGH TO RESTRICT THE DISALLOWANCE TO 15% OF THE EXPENSES HOWEVER TELEPHONE IN RESPECT OF RESIDENTIAL PHONE WERE OF ONLY RS. 90 729/- AND THEREFORE 15% OF RS. 19 939/- IS TO BE CONSIDERED AS AGAINST RS. 64 179/- CONSIDERED BY THE AO. THE AO WILL RECOMPUTE THE DIS ALLOWANCE. 12.0 NOW WE TAKE UP THE APPEAL OF THE REVENUE FOR T HE ASSESSMENT YEAR 2008-09 IN ITA NO.1417 JP/2010. 12.1 THE ONLY GRIEVANCE OF THE REVENUE IS THAT THE LD. CIT(A) HAS ERRED IN REDUCING THE BROKERAGE TURNOVER TO RS. 54 359.88 LA CS AS AGAINST BROKERAGE TURNOVER OF RS. 55 801.42 LACS. 12.2 THE LD. CIT(A) IN HIS ORDER HAS MENTIONED THAT THE AO HAS TAKEN THE AMOUNT ADVANCED TO APPROVAL MEMOS AS MONEY LENDING BUSINESS. ONCE IT HAS BEEN HELD AS MONEY LENDING BUSINESS THEN NO BRO KERAGE COMMISSION CAN BE CHARGED ON SUCH MONEY LENDING BUSINESS. ACCORDIN GLY THE LD. CIT(A) REDUCED THE TURNOVER FOR BROKERAGE BUSINESS AT RS. 54 359.88 LACS AS AGAINST RS. 55801.42 LACS. 12.3 WE HAVE HEARD BOTH THE PARTIES. SINCE THE ISSU E OF TRANSACTION RECORDED ON THE APPROVAL MEMO HAS BEEN RESTORED BAC K ON THE FILE OF THE AO WHILE DECIDING THE GROUND OF APPEAL NO. 2 OF THE A SSESSEE. THEREFORE THIS ISSUE IS ALSO RESTORED BACK ON THE FILE OF THE AO. 32 13. IN THE RESULT THE APPEALS OF THE ASSESSEE AS W ELL AS OF THE REVENUE ARE PARTLY ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 22-07 -2011. SD/- SD/- (R.K. GUPTA) (N.L. KALRA) JUDICIAL MEMBER ACCOUNTANT MEMBER JAIPUR DATED; 22/07/2011 *MISHRA COPY FORWARDED TO :- 1. SHRI NARESH PARWAL JAIPUR 2. THE DCIT CENTRAL CIRCLE- 3 JAIPUR 3. THE LD. CIT (A) JAIPUR 4. THE LD. CIT BY ORDER 5. THE LD.DR 6. THE GUARD FILE (ITA NO.1314/JP /10) A.R ITAT JAIPUR 33 34