Shri Rajkumar Shankar rao Hattarki, Kolhapur v. ACIT, (Central) Circle, TAKAL A, Kolhapur

ITA 360/PUN/2008 | misc
Pronouncement Date: 22-07-2011 | Result: Partly Allowed

Appeal Details

RSA Number 36024514 RSA 2008
Assessee PAN AEQPG7974F
Bench Pune
Appeal Number ITA 360/PUN/2008
Duration Of Justice 3 year(s) 4 month(s) 19 day(s)
Appellant Shri Rajkumar Shankar rao Hattarki, Kolhapur
Respondent ACIT, (Central) Circle, TAKAL A, Kolhapur
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 misc
Appeal Filed On 04-03-2008
Judgment Text
ITA NOS. 575 360 359 & 615/ PN/2006 RAJKUMAR S. HATTARKI AND PRABHAKAR M. GAVA LI A.Y. 2002-03. 1 IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV JM AND SHRI D. KARUNAKARA RAO ACCOUNTANT MEMBER ITA NO. 575/PN/2008 (A Y: 1996-97 TO 2003-04) DY. COMMISSIONER OF INCOME-TAX APPELLANT CENTRAL CIRCLE KOLHAPUR VS . SHRI RAJKUMAR SHANKARRAO HATTARKI RESPONDENT BAZAR PETH A/P HALKARNI TAL. GADHINGLAJ KOLHAPUR PAN : NOT AVAILABLE ITA NO.360/PN/2008 (ASSTT. YEARS : 1996-97 TO 2002-03) SHRI RAJKUMAR SHANKARRAO HATTARKI APPELLANT BAZAR PETH A/P HALKARNI TAL. GADHINGLAJ KOLHAPUR PAN : NOT AVAILABLE V/S. ASSTT. COMMISSIONER OF INCOME TAX (CENTRAL) R ESPONDENT CIRCLE TAKAL A KOLHAPUR ITA NO. 359/PN/2008 (ASSTT. YEARS : 1996-97 TO 2002-03) SHRI PRABHAKAR MARUTI GAVALI APPELLANT AT & POST HEBBAL TAL. GADHINGLAJ KOLHAPUR PAN : AEQPG7974F V/S. ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 1 RESPONDENT TARABAI PARK KOLHAPUR ITA NOS. 575 360 359 & 615/ PN/2006 RAJKUMAR S. HATTARKI AND PRABHAKAR M. GAVA LI A.Y. 2002-03. 2 ITA NO.615/PN/2008 (ASSTT. YEARS : 1996-97 TO 2002-03 (B.P) ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 1 APPELLANT KOLHAPUR V/S. SHRI PRABHAKAR MARUTI GAVALI APPELLANT AT & POST HEBBAL TAL. GADHINGLAJ KOLHAPUR PAN : AEQPG7974F ASSESSEE BY : SHRI S.P. JOSHI & SHRI P.S. PHADNIS DEPARTMENT BY : SHRI HARESHWAR SHARMA : ORDER : THERE ARE FOUR APPEALS UNDER CONSIDERATION AND THE Y INVOLVE A COUPLE OF CROSS APPEALS INVOLVING TWO ASSESSEES NAMELY RAJKUMAR SHA NKARRAO HATTARKI AND PRABHAKAR M GAVALI . WE SHALL FIRST TAKE UP THE CROSS APPEALS INVOLVIN G THE ASSESSEE RAJKUMAR SHANKARRAO HATTARKI. ITA NO. 360 & 575/PN/2006 (RAJKUMAR SHANKARRAO HATTARKI) 2. THESE ARE CROSS APPEALS FILED BY THE ASSESSEE A ND REVENUE AGAINST THE ORDER OF CIT(A) DATED 26.11.2007 RELATING THE BLOCK ASSE SSMENT MADE U/S. 158 BC(C) OF INCOME TAX ACT 1961. DURING THE PROCEEDINGS BEFORE US LD COUNSEL FOR THE ASSESSEE FILED REVISED GROUNDS AND THE SAID GROUNDS BY BOTH THE PARTIES AS UNDER : 3. ASSEESSEES GROUNDS AS RAISED IN THE APPEAL VIDE ITA NO. 360/P N/2008 ARE: ON THE FACTS AND IN THE CIRCUMSTANCE S OF THE CASE AND IN LAW 1) THE LD. CIT(APPEALS) ERRED IN HOLDING TO TAX UNDER SECTION 158BC THE ALLEGED UNEXPLAINED INVESTMENT OF RS. 1521890/ - WHEN NO EVIDENCE WAS FOUND ABOUT THESE INVESTMENTS IN THE C OURSE OF SEARCH AND THE SAID ASSESSMENT OF ALLEGED UNEXPLAINED INVE STMENT IS NOT ON ITA NOS. 575 360 359 & 615/ PN/2006 RAJKUMAR S. HATTARKI AND PRABHAKAR M. GAVA LI A.Y. 2002-03. 3 THE BASIS OF ANY SEIZED MATERIAL IN SPITE OF SPECIF IC ADDITIONAL GROUNDS RAISED BEFORE HIM ON 7.6.2005. WITHOUT PREJUDICE TO GROUND RAISED AT SR. NO. 1 ABOVE. 2) THE LD. CIT APPEALS ERRED IN HOLDING THAT THE INVES TMENT IN PURCHASE OF AGRICULTURAL LAND OF 15.65 ACRES FOR R S. 1318000/- IN THE NAMES OF MEMBERS VIZ SADANAND REKHA AND SHIVSHANK AR OF H U F OF RAJKUMAR HATTARKI IS THE INVESTMENT OF THE ASSESSES IN HIS INDIVIDUAL STATUS AND ERRED IN CONSIDERING THE SAME FOR WORKIN G OUT UNDISCLOSED IN CASE UNDER SECTION 158BC IN THE HANDS OF THE ASSESS EE AS INDIVIDUAL. 3) THE LD. CIT (APPEALS) ERRED IN HOLDING THAT THE ASSESSEE AS INDIVIDUAL HAS 1/6 TH SHARE IN THE BIGGER HUF LANDS OF 76.78 ACRES AND ERRED IN HOLDING THAT THE NEW LAND OF 15.65 ACRES IS HIS INDIVIDUAL PROPERLY WHEN AS KARTA OF HIS HUF SHRI RAJKUMAR HA TTARKI HAS 1/6 TH SHARE IN 76.78 ACRES + 15.65 ACRES OF LAND BELONGIN G TO SMALLER HUF. 4) THE LD. CIT(A) ERRED IN HOLDING THAT REPAYMENT O F RS.10 94 575/- FOR LOANS AS ASSESSES INVESTMENT IN HIS INDIVIDUAL STATUS WHEN IT WAS TAKEN FOR 6 HUFS AND ALSO ERRED IN HOLD ING THAT THE WITHDRAWALS MADE FROM BANK ALSO WHERE AGRICULTURA L INCOME IS CREDITED WERE NOT AVAILABLE FOR INVESTMENT IN PURC HASE OF 15.65 ACRES OF LAND AND FOR REPAYMENT OF LOAN WITH INTEREST OF RS. 10 94 575/-. 5) THE LD. CIT (APPEALS) ERRED IN ESTIMATING NET AGR ICULTURAL INCOME FROM SUGAR CANE CULTIVATION AT 30.76% OF THE GROSS RECEIPTS AS AGAINST NET INCOME OF RS 13 92 694 WORKING AMOUNT T O FOR THE ENTIRE SUGAR CANE CULTIVATED FOR THE 6 HUFS. 6) THE LD. CIT (APPEALS) ERRED IN ESTIMATING NET INC OME FROM OTHER CROPS AT RS 2 36 555 AS AGAINST WORKING OUT T O RS. 9 22 842/- SHOWN FOR ALL 6 HUFS. 7) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE CIT(A) HAS ERRED IN MAKING ADDITIONS FOR LOAN REPAYMENT OF RS. 10 94 575 EVEN THOUGH THE SOURCES ARE FULLY EXPLAINED FROM B ANK AND OTHER SOURCES THEREOF. 8) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE THE CIT(A) HAS ERRED IN LAW AND ON MERIT IN MAKING ADDITIONS A S UNDISCLOSED EVEN THOUGH THE SOURCES ARE FULLY EXPLAINED THEREOF. 9) THE AO HAS ERRED IN LEVYING SURCHARGE ON INCOME TAX CALCULATION IN THE CLOCK ASSESSMENT SUCH SURCHARGE IN NOT LEVIABLE IN BLOCK ASSESSMENT IN THE APPELLANTS CASE AS THE DATE OF SEARCH IS PRIOR TO 1.6.2002. 4. REVENUES GROUNDS RAISED IN THE APPEAL VIDE ITA NO. 575/PN/2008 ARE AS UNDER : ITA NOS. 575 360 359 & 615/ PN/2006 RAJKUMAR S. HATTARKI AND PRABHAKAR M. GAVA LI A.Y. 2002-03. 4 1. THE LD C.I.T.(A)ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF UNDISCLOSED INCOME OF RS. 47 22 536/ FROM TANKER BUSINESS CARRIED OUT BY THE ASSESSEE. 2. THE LD. C.I.T.(A) ERRED IN COMPUTING UNDISCLOSED INCOME OF THE ASSESSEE FOR THE BLOCK PERIOD AT RS. 15 21 890/- AS AGAINST RS. 47 22 536/- DETERMINED BY THE A.O. 3. THE LD. C.I.T.(A) ERRED IN ESTIMATING AGRICULTURAL INCOME OF THE ASSESSEE AT RS. 5 57 850/- AS AGAINST INCOME OF RS.1 49 502/- DETERMINED BY THE A.O ON THE BASIS OF EXPERT ADVICE . 5. THE GROUNDS RAISED BY BOTH THE ASSESSEE AND THE REVENUE IN THEIR RESPECTIVE APPEALS IN OUR OPINION REVOLVE AROUND THE COMMON IS SUES IE (I) BENAMI NATURE OF THE TRUCK BUSINESS AND (II) ISSUES RELATING TO AGRICULT URAL LANDS/INCOME IE INVESTMENT IN THE AGRICULTURAL LANDS AND ESTIMATION OF THE AGRICU LTURAL INCOME ETC. WE PROCEED TO DEAL WITH SAID ISSUES IN THIS ORDER IN A ACCORDINGL Y THESE APPEALS ARE CLUBBED AND ARE BEING DISPOSED IN THE PRECEDING PARAGRAPHS. FIR ST WE SHALL TAKE UP THE BENAMI NATURE OF THE TRUCK BUSINESS ISSUE. 6. RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE IS A POLITICIAN AND DIRECTOR IN THE M/S VEERA SHAMIV CO-OPERATIVE BANK AND IN GOKUL DOODH SINGH. ASSESSEE WAS NOT ASSESSED TO INCOME TAX BEFORE THE DATE OF SEARC H ACTION AND THUS HE NEVER FILED THE RETURN OF INCOME. ASSESSEE WAS COVERED U/S. 132 OF THE INCOME TAX ACT AND THE REVENUE TUMBLED ON CERTAIN INCRIMINATION PAPERS RELATING TO A TRUCK BUSINESS AND ALSO INVESTMENTS IN AGRICULTURAL LAND HELD IN THE NAMES OF HIS FAMILY MEMBERS. THE NOTICE U/S. 158BC OF THE ACT WAS ISSUED AND THE ASSESSEE FILED THE RETURN OF INCOME DECLARING THE UNDISCLOSED INCOME OF RS. NIL ON 11.2.2003. IT IS MENTIONED IN THE ORDERS OF THE REVENUE THAT THE PARENTS OF TH E ASSESSEE OWN ABOVE 76 ACRES OF AGRICULTURAL HOLDING AND HIS SHARE IN THAT CONSTITU TES 1/6 TH OF 76.78 ACRES. ASSESSEE CLAIMS THAT THE SAID LAND HOLDING OF 76.78 ACRES BE LONGS TO THE BIGGER HUF. HOWEVER IT IS A FACT THAT THE ASSESSEE OR HIS FATH ER NEVER FILED THE HUF RETURNS IN HUF STATUS. FURTHER THE ASSESSEE ACQUIRED 15.65 AC RES IS HIS INDIVIDUAL CAPACITY AND THE ASSESSEE CLAIM THAT HE IS THE KARTA OF HIS HUF. STATUS OF BIGGER AND SMALLER ITA NOS. 575 360 359 & 615/ PN/2006 RAJKUMAR S. HATTARKI AND PRABHAKAR M. GAVA LI A.Y. 2002-03. 5 HUFS IS THE DISPUTED AREAS AND SO ARE THE LAND HOLD INGS AND THE AGRICULTURAL INCOME OUT OF THE SAID AGRICULTURAL LAND HOLDINGS. IN ADDI TIONS THE SEARCH ACTION ENDED UP IN THE DISCOVERY OF INCRIMINATING DOCUMENTS PERTAINING TO THE TRUCK BUSINESS. THESE TRUCK BUSINESS WAS REGISTERED IN THE NAME OF SRI PR ABHAKAR M GAVALI. THERE WERE LOTS OF QUESTION AS TO WHY THESE PAPERS PERTAINING TO T RUCK BUSINESS OF THE SRI GAVALI ARE FOUND AND SEIZED FROM THE PREMISES OF THE ASSESSEE. IN THIS REGARD DURING THE SEARCH PROCEEDINGS A STATEMENT OF THE ASSESSEE WAS RECORDED ON OATH AND EXPLANATION OF THE ASSESSEE WAS SOUGHT. ASSESSEE OW NED UP THAT THE SAID INCRIMINATING DOCUMENTS WERE FOUND IN HIS PREMISES AND THE HAND WRITING APPEARED ON THESE DOCUMENTS PERTAINS TO HIM AND HE WROTE THE CONTENTS ON THE SAID DOCUMENTS. DURING THE ASSESSMENT PROCEEDINGS A.O C AME TO THE CONCLUSION THAT THE SAID TRUCK BUSINESS ACTUALLY BELONGED TO THE AS SESSEE THOUGH THE TRUCKS LOANS TAKEN FROM THE COOPERATIVE BANK AND THE BUSINESS AR E HELD IN THE NAME OF MR. PABHAKAR M. GAVALI. A.O IS OF THE OPINION THAT ASS ESSEE BEING A DIRECTOR OF THE COMPANY ORGANIZED LOANS IN THE NAME OF MR. GAVALI WHERE MR. GAVALI IS ONLY THE NAME LENDER. AT THE END A.O QUANTIFIED THE 4 TRUC K RECEIPTS NUMBERING AND QUANTIFIED THE TOTAL RECEIPT S EARNED BY THE FOUR TRUCK OWNERS @ RS.82 85 943/-. AFTER ALLOWING DEPRECIATION ON INSURANCE AND SALARY ETC. THE ESTIMATED THE NET PROFIT ON ACCOUNT OF THE TANKER BUSINESS IS KEPT AT RS.47 21 536/-. REVENUE ALSO CONDUCTED POST SEARCH ENQUIRIES AND DISCOVERED VARI OUS BANK ACCOUNTS HELD DIN THE NAME OF THE PRABHAKAR M GAVALI AND FOUND THERE ARE NUMBER OF CASH ENTRIES. AO FOUND SUCH CASH DEPOSITS IN AN ACCOUNT AND TOTALS T O RS. 86 47 200/-. AFTER REPAYMENT OF LOANS ARE CONSIDERED AND OTHER CASH DE POSITS WORKS OUT TO RS.32 14 358/-. A.O FOUND THE UNEXPLAINED WITHDRAWALS WORKS OUT TO RS 54 32 542/-. IN THIS REGARD MR. GAVALI ALSO MADE A STATEMENT MENTIONING THAT THE ENTIRE CASH WITHDRAWALS DEBITED IN THE LOAN ACCOUNT AFTER INCURRING EXPENSES ARE EXPLAINABLE. AFTER ENQUIRIES AND PERUSAL OF THE IN CRIMINATING INFORMATION GATHER DURING THE SEARCH ACTION THE A.O CAME TO THE CONCL USION THAT SRI GAVALI IS THE MAN OF NO MEANS AND HE DOES NOT HAVE THE IDEA OF THE BU SINESS OF PLYING OF TANKERS. ITA NOS. 575 360 359 & 615/ PN/2006 RAJKUMAR S. HATTARKI AND PRABHAKAR M. GAVA LI A.Y. 2002-03. 6 THOUGH THE TANKERS ARE HELD IN HIS SRI GAVALI THOU GH THE LOANS WERE ALSO TAKEN IN HIS NAME THE BUSINESS IS ACTUALLY BEING CONTROLLER AND MANAGED BY THE ASSESSEE. AS PER THE DISCUSSION GIVEN IN PARA 6 OF THE ASSESSMEN T YEAR A.O CAME TO THE CONCLUSION THAT RS.47 22 536/- ESTIMATED NET PROFIT ON ACCOUNT OF TANKER BUSINESS AND THE SAME IS HELD TO BE UNDISCLOSED INCOME OF TH E ASSESSEE. THUS THE A.O MADE ANALYSIS OF BANK ACCOUNTS ON ONE HAND RESORTED TO THE ESTIMATION OF THE NET PROFIT LIKELY EARNED ON ACCOUNT OF TANKER BUSINESS ON OTHE R SIDE AND ATTEMPTED TO BRING OUT A CONCLUSION THAT ASSESSEE HATTARKI IS THE OWNER OF THE TRUCK BUSINESS AND MR. GAVALI IS MERELY A BENAMI . ACCORDINGLY A.O HELD RS. 47 22 536/- IS HIS UNDISCLOSED INCOME FOR THE BLOCK PERIOD AS PER THE CONTENTS IN PARA 12 OF THE ASSESSMENT ORDER. 7. RELEVANT FACTS RELATING TO THE OTHER ISSUE OF INHERITANCE (1/6 TH OF 76.78 ACRES) / INVESTMENT IN AGRICULTURAL LANDS AND THE ESTIMATION OF THE AGRICULTURAL INCOME ARE THAT THE AS PER THE ASSSESSEES SUBMISSIONS H E INHERITED 1/6 TH OF 76.78 ACRES BELONGING TO BIGGER HUF AND IN ADDI TION HE ALSO ACQUIRED 15.65 ACRES IN THE NAMES OF HIS FAMILY MEMBERS OUT OF HIS AGRICULTURAL INCOME. OTHERWISE DURING THE SEARCH ACTION THE A.O FOUND THAT TOTAL INVESTMENTS IN SAID AGRICULTURAL LANDS AS PER THE SEIZED PAPER PERTAINING TO THE MEM BERS OF HIS FAMILY I.E. SADANAND R. HATTARKI MS. REKHA R. HATTARKI SHRI SHIVKAM H ATTARKI WORKS OUT TO TOTAL OF RS.13 018 000/-. ASSESSEE DESIGNATES THESE ACQUISIT IONS AS PERSONAL ACQUISITIONS OF THE MEMBERS OF THE FAMILY OF THE ASSESSEE. CONSIDE RING THE FACT THAT THEY ARE NOT ASSESSED TO TAX AND DOES NOT HAVE THE SOURCES OF IN COME OTHER THAN CONTROVERSIAL AGRICULTURAL INCOME EARNED FROM THE SAID LANDS TO E XPLAIN THE SAID INVESTMENT AO PROCEEDED TO CLUB ALL THE INVESTMENTS HELD IN THE N AME OF HIS FAMILY MEMBERS AND ASSESSED THEM IN THE HANDS OF THE ASSESSEE. WHILE ASSESSING THE A.O GRANTED SET OFF OF AGRICULTURAL INCOME EARNED OUT OF THE SAID L AND TO THE EXTENT OF ONLY RS. 1 49 502/- WITH WHICH THE ASSESSEE IS AGGRIEVED A ND RELEVANT DETAILS ON ESTIMATION IS GIVEN IN PARA 8 OF THE ASSESSMENT ORDER. AS PER THE A.O OUT OF THE SAID AMOUNTS ITA NOS. 575 360 359 & 615/ PN/2006 RAJKUMAR S. HATTARKI AND PRABHAKAR M. GAVA LI A.Y. 2002-03. 7 THE INCOME FROM SUGAR CANE AND INCOME FROM OTHER C ORPS WAS ESTIMATED AT RS.1 40 502/-. FOR THIS ESTIMATION A.O HAS DISCUS SED IN PARA 9 ONWARDS AND IN ITS SUB-PARAGRAPH RELIED ON THE OPINION OF RETIRED AGR ONOMIST FROM MAHATMA PHULE KRISHI VIDYAPITH (MKU) RAHURI. AFTER GIVING SET OFF TO THE INCOME OF RS.1 49 502/- THE A.O FOUND UNEXPLAINED INVESTMENT INTO AGRICULTU RAL LAND IS KEPT AT RS. 11.71 LAKHS. AO CONSIDERED THE AVAILABLE ACCOUNTED SOURCE S SUCH AS THE LOANS OR AGRICULTURAL INCOME AND THUS THE A.O CAME TO THE C ONCLUSION THAT THE SAID INVESTMENTS IN LANDS AND IN TANKERS EXCEEDED HIS AG RICULTURAL INCOME OF ALL THE MEMBERS OF THE FAMILY. CONSIDERING THE FACT THAT SI NCE THESE INVESTMENTS BEING BELOW THE UNDISCLOSED NET TANKER PROFITS OF RS.47 2 2 531/- A.O PROCEEDED TO NOT TO MAKE ANY FURTHER ADDITION ON ACCOUNT OF INVESTMENT IN THE AGRICULTURAL LAND. THUS THE EFFECTIVE ADDITION BY THE A.O IN BLOCK ASSESSM ENT IS KEPT AT RS. 47 27 530/-. IN THE PROCESS THE A.O REJECTED ASSESSEES CONTENTION THAT THE AGRICULTURAL LAND PERTAINS TO SMALLER H.U.F. FURTHER IN THE PROCESS A.O DID NOT CONSIDER THE AGRICULTURAL INCOME ALLEGEDLY EARNED OUT OF THE HUF LANDS AMOUNTING TO RS. 76.78 LAKHS. 7. AGGRIEVED WITH THE ABOVE ORDER OF THE A.O ASSES SEE FILED APPEAL BEFORE THE CIT(A). MAIN ISSUES DISCUSSED IN THE ORDER OF THE CIT(A) ARE (I) THE FINALITY ABOUT THE BENAMI NATURE OF THE BUSINESS OF RUNNING OF TRUCKS AND RELATED ADDITION OF RS. 47.22 LAKHS; (II) APPLICABILITY OF PROVISION OF SEC TION 44A OF THE TRUCK BUSINESS; (III) INVESTMENTS IN LANDS AMOUNTING TO RS.13.18 LAKHS; (IV) AGRICULTURAL INCOME FROM THE HUF LAND AMOUNTING TO RS. 76.78 ACREAS; AND (V) AG RICULTURAL INCOME FROM THE LAND HOLDING OF 15.65 ACREAS OWNED BY HIM AND THE MEMBER S OF HIS FAMILY. 8. SO FAR AS FIRST ISSUE RELATING TO THE BENAMI NATURE OF THE BUSINESS OF RU NNING OF TRUCKS IS CONCERNED RELEVANT DETAILS IS GIVEN I N PARA 10 OF THE IMPUGNED ORDER OF THE CIT(A). REGARDING THE APPLICABILITY OF PROVISI ONS OF SEC. 44A ARE CONCERNED ITA NOS. 575 360 359 & 615/ PN/2006 RAJKUMAR S. HATTARKI AND PRABHAKAR M. GAVA LI A.Y. 2002-03. 8 WHICH IS RAISED WITHOUT PREJUDICE RELEVANT DECISI ONS IS GIVEN IN PARA 11 OF THE IMPUGNED ORDER. RELEVANT PARAS 10 & 11 ARE REPRODU CED AS UNDER : 10. THE EVIDENCE THAT HAS BEEN RELIED UPON TO CO NCLUDE THAT THE ASSETS ARE OWNED BY THE APPELLANT IS THAT THE PAPERS REGAR DING THE BUSINESS WERE FOUND IN THE RESIDENCE OF THE APPELLANT AND SHRI GA VALI DID NOT APPEAR TO HAVE DETAILED KNOWLEDGE OF THE AFFAIRS RELATING TO THE T ANKERS BUSINESS. THE ABOVE EVIDENCE IS NOT SUFFICIENT TO PROVE SUCH A SERIOU S CHARGE. THERE IS NO EVIDENCE THAT THE INCOME FROM THE TANKER BUSINESS H AD COME INTO THE HANDS OF THE APPELLANT. THE ASSETS HAVE BEEN PURCHASED BY WAY OF LOANS. THE LOANS ARE IN THE NAME OF SHRI GAVALI. THE ASSETS (TRUCKS ) HAVE BEEN ALSO PURCHASED IN THE NAME OF SHRI GAVALI. THERE IS NO EVIDENCE T HAT THE BANK ACCOUNTS IN THE NAME OF SHRI GAVALI ARE ACTUALLY OPERATED BY TH E APPELLANT. SHRI GAVALI HAS FURNISHED A SWORN AFFIDAVIT OWNING UP THE BUSIN ESS AS HIS OWN LEGITIMATE BUSINESS. HE HAS ALSO FILED RETURNS OF INCOME SHOW ING INCOME THERE FROM. IN OTHER WORDS THERE ISNT SUFFICIENT EVIDENCE TO PRO VE THAT THE BUSINESS IS CONDUCTED A IN BENAMI MANNER BY THE APPELLANT. 11. IN THE CIRCUMSTANCES THE ADDITION OF THE INCOM E FROM THE TANKER BUSINESS AS UNDISCLOSED INCOME OF THE APPELLANT CAN NOT BE SUSTAINED. THE INCOME SHOULD BE ASSESSED IN THE HANDS OF SHRI GAVA LI. THE ALTERNATIVE ARGUMENT THAT THE PROVISIONS OF SECTION 44AE SHOUL D BE APPLIED FOR DETERMINING THE BUSINESS OF TRANSPORTATION OF MILK BY TRUCKS IS RENDERED SUPERFLUOUS AS A RESULT OF THE ABOVE DECISION 9. REGARDING THE INVESTMENTS OF RS 13.18 LAKHS IN T HE AGRICULTURE LAND PURCHASED IN THE NAMES OF THE MEMBERS OF THE FAMILY ARE CONCE RNED THE CIT(A) HELD THAT THE SOURCE AND INVESTMENT HAS NOTHING TO DO WITH THE T ANKER BUSINESS AND SOURCE IN FACT IS FROM THE AGRICULTURE INCOME. ACCORDINGLY H E COMPUTED THE AGRICULTURE INCOME FROM THE LAND HOLDINGS OF THE ASSESSEE AND HE HLD T HAT ASSESSEES 1/6 TH SHARE FROM THE LARGER UF IS 12.79 ACRES (OUT OF 76.78 OF THE APPELLANTS OWN LANDS INCLUDING THE ONE HELD IN THE OPINION OF THE FAMILY MEMBERS IS 15 .65 ACRES TOTAL HOLDING BELONGED TO HIS FAMILY IS 28.44 ACRES I.E. 30.76% OF THE 92. 43 ACRES. ASSESSEE ESTIMATED TOTAL SUGAR CANE YIELD APPLYING MPKV FIGURES AT RS.10 44 520/- AND APPELLANTS SHARE ON ACCOUNT OF SUGAR CANE CROPS ATTRIBUTABLE TO HIS SH ARE. THE ORDERS DOES NOT CONTAIN THE MANNER OF WORKING OF AGRICULTURE SUGAR CANE INC OME FOR 92.42 ACRES AT RS.10 44 520/-. ITA NOS. 575 360 359 & 615/ PN/2006 RAJKUMAR S. HATTARKI AND PRABHAKAR M. GAVA LI A.Y. 2002-03. 9 10. COMING TO THE NET INCOME FROM OTHER CROPS THE CIT(A) KEPT THAT SUCH INCOME FROM HIS LAND HOLDINGS AT RS.2 36 555/-. TH E MANNER OF WORKING IS NOT EVIDENT FROM THE IMPUGNED ORDER. HOWEVER THERE IS A CRYPTIC DESCRIPTION OF EARNING INCOME ON OTHER CROPS AT RS. 15 38 070/-. AFTER AL LOWING EXPENSES FROM THE NET INCOME AND COMPUTING NET INCOME AT RS.7639035/- TH E ASSESSEES SHARE OF INCOME AT 30.76% AT 2 36 555/-. NO DETAILED WORKING IS EM ANATING FROM THE ORDERS AS THE TWO TOTAL AGRICULTURAL INCOME CLAIMED BY ASSESSEE A MOUNTING TO RS. 38 59 298/- BEFORE ALLOWING EXPENDITURE. OTHERWISE THE NET AG RICULTURE INCOME IS ESTIMATED AT RS.23 10 453/-. RELEVANT PARAGRAPHS FROM THE CIT(A ) ORDER ARE REPRODUCED AS UNDER : 22. AS REGARDS INCOME FROM OTHER CROPS IT HAS BEEN DECI DED IN THE SAME ORDER OF DHANJIRAO DESAI THAT THE EXPENDITURE SHOU LD BE TAKEN AT 50% OF THE TOTAL RECEIPTS. THE APPELLANT HAS NOT BEEN ABLE TO BIFURCATE THE SUGAR CANE CROP ACCORDING TO TYPE I.E. ADSALI SURU AND RATOON . IN THE CIRCUMSTANCES THE AVERAGE OF THE PERCENTAGES COULD BE TAKEN TO ESTIMA TE EXPENDITURE. THE PERCENTAGE OF EXPENDITURE WORKS OUT TO 55%. THE SUGARCANE INCOME OF THE APPELLANT COMPUTED ON THE BASIS OF THE ABOVE WORKS OUT AS UNDER :- TOTAL ACREAGE 76.78 + 15.65 = 92.43 ACRES HUF LAND 76.78 ACRES APPELLANTS SHARE 1/6 TH 12.79 ACRES APPELLANTS OWN LAND 15.65 ACRES TOTAL LAND BELONGING TO APPELLANTS FAMILY 28.44 ACRES PERCENTAGE OF TOTAL ACREAGE 30.76% 92.43 TOTAL SUGAR INCOME RS.10 44 520/- APPELLANTS SHARE @ 30.76% RS.3 21 295/- 23. THE OTHER CROPS HAVE BEEN ESTIMATED AT RS.15 38 070/-. CONSIDERING THAT THE APPELLANTS SHARE IS 30.76% AND THE AGRICU LTURAL EXPENSES FURNISHED THE INCOME FROM OTHER CROPS FOR THE APPELLANT WOULD WORK OUT AS UNDER :- GROSS INCOME FROM OTHER CROPS RS.15 38 070/- LESS: EXPENSES RS. 7 69 035/- NET INCOME RS.7 69 035/- 30.76% (APPELLANTS SHARE) RS.2 36 555/- 24. THE TOTAL INCOME/FUNDS DURING THE BLOCK PERIOD IS DETERMINED AS UNDER ITA NOS. 575 360 359 & 615/ PN/2006 RAJKUMAR S. HATTARKI AND PRABHAKAR M. GAVA LI A.Y. 2002-03. 10 NET INCOME FROM SUGARCANE RS.3 21 295/- NET INCOME FROM OTHER CROPS RS.2 36 555/- LOANS TAKEN RS.11 50 000/- TOTAL RS.17 07 850/- 25. THE APPELLANTS INVESTMENTS AND EXPENSES DURING THE BLOCK PERIOD INCLUDING HOUSEHOLD EXPENSES AS DECLARED BY THE APP ELLANT IN HIS LETTER DTD. 30.12.2003 ARE AS UNDER :- I. INVESTMENTS IN PROPERTY RS.13 18 000/- II. HOUSEHOLD EXPENSES RS.8 17 165/- III. LOAN REPAYMENT RS.10 94 575 /- TOTAL RS.32 29 740/- 26. THE UNDISCLOSED INCOME FOR THE BLOCK PERIOD WOR KS OUT TO RS.15 21 890/- AS UNDER :- INCOME RS.17 07 850/- LESS: EXPENSES RS.32 29 740/- RS.15 21 890/- THE APPELLANTS UNDISCLOSED INCOME FOR THE BLOCK PE RIOD IS THUS CONFIRMED AT RS.15 21 890/- AS AGAINST RS. 47 22 530/- ASSESSED BY THE A.O IN THE BLOCK ASSESSMENT 11. FINALLY CIT(A) DETERMINED THE ASSESSEES UNDIS CLOSED INCOME AT RS. 1521890/- AS AGAINST THE RS. 47 22 530/- ASSESSED B Y THE A.O IN THE BLOCK ASSESSMENT. WITH THE ORDER OF THE CIT(A) BOTH THE ASSESSEE AS WELL AS THE REVENUE ARE AGGRIEVED FOR THEIR RESPECTIVE REASONS AND FILE D THE PRESENT CROSS APPEAL BEFORE US. 12. DURING THE PROCEEDINGS BEFORE BOTH THE PARTIES HAVE MADE VARIOUS SUBMISSIONS AND AFTER HEARING THEM IN OUR OPINION THERE ARE TWO MAJOR ISSUES TO BE DEALT WITH IN THIS APPEALS AND THEY ARE: (I) ISSUES REGARDING THE OWNERSHIP OF THE BUSINESS OF THE TRUCKS AND (II) THE OTHER ISSUE REL ATES TO THE LAND HOLDINGS BY BIGGER HUF AND SMALLER HUF AND ESTIMATION OF THE AGRICULTU RAL INCOME. THERE ARE MANY ARGUMENTS FOR EACH OF THE SAID ISSUES. WE SHALL DEA L WITH THE EACH OF THE SAID MAJOR ISSUE IN THE FOLLOWING PARAGRAPHS. ITA NOS. 575 360 359 & 615/ PN/2006 RAJKUMAR S. HATTARKI AND PRABHAKAR M. GAVA LI A.Y. 2002-03. 11 13 . REGARDING THE OWNERSHIP OF THE BUSINESS OF THE TR UCKS: BEFORE US R EGARDING THE ISSUE OF THE OWNERSHIP OF THE BUSINESS OF THE TRUCKS SRI HARESHWAR SHARMA LD DR FOR THE REVENUE ADVANCED VAR IOUS ARGUMENTS AND STATED THAT THE MATTER UNDER CONSIDERATION NEEDS TO BE SET ASIDE TO THE FILES OF THE AO FOR FRESH CONSIDERATION. THE SAME ARE: (A) REFERRING TO THE STATEMENT OF THE SRI HATTARKI IN GENERAL AND THE ANSWERS OF THE ASSESSEE TO THE QUESTION NO 10 AND 1 1 OF THE STATEMENT IN PARTICULAR LD DR MENTIONED THAT S EARCH ACTION RESULTED IN SEIZURE OF VARIOUS DOCUMENTS AT THE PREMISES OF SRI HATTARK I THE ASSESSEE THEY RELATE TO THE TRUCKS PLYING BUSINESS THEY ARE FOUND TO BE IN CRIMINATING DOCUMENTS AND THE SAME IS UNDISPUTED; (I) THEY ARE WRITTEN IN THE OWN HAND WRITING OF THE ASSESSEE AS ADMITTED BY SRI HATTARKI IN RESPONSE TO THE SAID Q NO 11 OF THE STATEMENT RECORDED DURING THE SEARCH AND SEIZURE OPERATION U/S 132 OF THE ACT; (III) SEIZED FROM THE PREMISES OF THE ASSESSEE AND THEREFORE THE ONUS IS ON SRI HATTARKI TO EXPLAIN AS TO WHY SRI HATTARKI FELT IMPORTANT OR FELT NEED OR CON SIDER IT RELEVANT TO PICK THE PEN AND THE IMPUGNED INCRIMINATING DOCUMENT TO WRITE DOWN T HE IMPUGNED DETAILS ON THE SAID PAPER AND THE PRESUMPTION IMPLIED IN THE PROVI SIONS OF SECTION 132(4) OF THE ACT HAS TO BE DISCHARGED. (B) ELABORATING THE SAME LD DR REASONED THAT WHEN THE ASSESSEE IS NOT THE OWNER OF THE TRUCKERS BUSINESS WHY THE RELEVANT DOCUMENTS WERE WRITTEN BY HIM IN PERSON AND WHY THESE DOCUMEN TS WERE MAINTAINED BY HIM AND POSSESSED BY HIM IN HIS PREMISES. IT IS INEXPLI CABLE AS WHY MR GAVALIS PAPERS ARE SEIZED FROM THE PREMISES OF THE ASSESSEE WHEN THEY ARE NEITHER THE PART OF THE COMBINED FAMILY IE LIVING IN THE SAME HOUSE NOR REL ATED SEROLOGICALLY FINANCIALLY ETC; (C) REFERRING TO THE STATUS OF THE ASSESSEE VIS AVI S SRI GAVALI LD DR MENTIONED THAT THE SRI HATTARKI IS A POPULAR POLITICIAN AND CONTES TANT FOR REPRESENTING THE PEOPLE IN A PARTICULAR CONSTITUENCY FURTHER HE MENTIONED THAT MR GAVALI IS A MAN OF FEW MEANS AT RELEVANT POINT OF TIME LD DR ATTEMPTED TO MAKE OUT THAT THE MR GAVALI IS MERELY ITA NOS. 575 360 359 & 615/ PN/2006 RAJKUMAR S. HATTARKI AND PRABHAKAR M. GAVA LI A.Y. 2002-03. 12 A NAME LENDER FOR SRI HATTARKI. IT IS THE CASE OF THE REVENUE TH AT THE TRUCK AND THE TRUCKS PLYING BUSINESS PERTAINS TO SRI HATTARKI; RE FERRING TO THE WAY THE CASH WAS SWINDLED FROM THE IMPUGNED BANK ACCOUNTS LD DR ATT EMPTED TO MAKE OUT THAT THE SAID CASH WITHDRAWAL WAS MADE AND THE SAID CASH WAS USED FOR THE BENEFITS OF THE ASSESSEE AND AS PER THE DR IT PROVES THE BENAMI NATURE OF ANY BUSINESS; (D) REFERRING TO THE INADEQUATELY DRAFTED ORDER OF THE AO AND CIT(A) LD DR MENTIONED THAT THE ABOVE FACTS GATHERED BY THE INVESTIGATION AUTHORITIES HAVE ESCAPED THE ATTENTION OF BOTH AO AND THE CIT(A) FOR ANY REASON AND THEREFORE THE MATTER NEEDS TO BE SET ASIDE TO THE FILES OF THE AO. (E) R EFERRING TO THE IMPUGNED ORDER OF THE CIT(A) LD DR WAS CRITICAL OF THE COMMENT OF TH E CIT(A) WHO HELD THAT MR GAVALI IS NOT THE BENAMI OF THE ASSESSEE AND THEREF ORE THE INCOME EARNED OUT OF THE TRUCKS NEEDS TO BE ASSESSED IN THE HANDS OF MR GAVALI ONLY LD DR OF THE OPINION THE CONCLUSION OF THE CIT(A) ARE PREMATURE AND THEY WERE TAKEN WITHOUT APPRECIATING THE FACTS GARNERED BY THE REVENUE DURI NG THE INVESTIGATION. LD DR ALLEGED THAT THE CIT(A) IGNORED THE FACTS MENTIONED ABOVE AND ALSO THE PRESUMPTION EXPRESSLY MENTIONED IN THE PROVISIONS OF SECTION 1 32(4) OF THE ACT AND GAVE RELIEF TO THE ASSESSEE WITHOUT GIVING PROPER REASONS. (F) FUR THER HE MENTIONED THAT THE ASSESSEE IS THE REAL OWNER OF THE TRUCKERS BUSINESS . FOR THIS SRI SHARMA TRACED THE TIME-LINE AND EVENTS-LINE OF THE SAID BUSINESS AND MENTIONED THAT THE (I) ASSESSEE IS THE DIRECTOR OF THE COOPERATIVE BANK FROM WHERE THE LOANS ARE TAKEN USING THE NAME OF MR GAWALI (II) ASSESSEE IS THE DIRECTOR IN THE DUDH SANGH FOR THE TRUCKS WERE USED FOR CARRYING THE MILK FOR CONSIDERATION (III) ASSESSEE IS IN CONTROL OF THE TRUCKS AND EMPLOYEES OF THE TRUCK BUSINESS AS EVIDENCED BY THE SEIZED DOCUMENTS AND ALSO MR GAWALI (IV) ASSESSEE IS ALSO IN CONTROL OF THE OPERATION OF THE SB A/C NO 55 (V) ASSESSEE AND THE GAWALI COMBINE FAILED TO EXPLAIN T HE DEBITS AND CREDITS IN THE SAID SB ACCOUNT MAINTAINED FOR THE SAID TRUCKERS BUSINE SS. (VI) REFERRING TO THE ABSENCE OF EXPLANATION FOR THE DIFFERENCES IN CASH DEPOSITE D AND CASH WITHDRAWN AMOUNTING TO ABOVE RS 56 LAKHS LD DR MENTIONED THAT MONEY IS LAUNDERED BY THESE PEOPLE. FINALLY LD DR ATTEMPTED TO IMPRESS UPON THE NEED F OR THE AO TO GATHER THE DETAILS ITA NOS. 575 360 359 & 615/ PN/2006 RAJKUMAR S. HATTARKI AND PRABHAKAR M. GAVA LI A.Y. 2002-03. 13 OF THE FOLLOWING IN THE FUTURE SET ASIDE PROCEEDING S NAMELY (I) WHO APPLIED AND SIGNED ON THE APPLICATIONS MADE TO THE COOPERATIVE BANK FOR THE LOANS FOR THE TRUCKS BUSINESS (II) WHO STOOD AS THE GUARANTOR FOR THE SAID HUGE LOAN EXCEEDING THE TENS OF LAKHS; (III) WHAT ARE THE DETAILS OF THE ASSETS GIVEN AS SECURITY FOR SUCH LOANS AND THE OWNERSHIP OF SUCH ASSETS; (IV) WHO PAID THE MARGIN MONEY WHICH IS MANDATORY FOR AVAILING LOANS; (IV) THE DETAILS OF THE INDIVID UAL WHO RECEIVED / COLLECTED THE LOAN CHEQUES AND WHO SIGNED ON THE REGISTERS OF THE BANK ACKNOWLEDGING THE REC EIPT OF THE CHEQUES; (V) WHO PLACED ORDERS FOR PURCHASE OF THE TRUCKS AND THE RELEVANT COMMUNICATION WITH THE SUPPLIERS; (VI) WHO SIGNED O N THE VOUCHERS AND BANK SLIPS WHILE DEPOSITING AND WITHDRAWAL OF THE CASH THE SAID SB A/C NO 55. UNLESS THESE ISSUES ARE ATTENDED TO BY THE AO/ CIT(A) IN THE SET ASIDE PROCEEDINGS THE REAL OWNERSHIP OF THE BUSINESS OF RUNNING TRUCKS BOTH ON FACT AND LAW CANNOT BE ESTABLISHED. THEREFORE HE PLEADED FOR SETTING ASID E. 14. ON THE OTHER HAND SRI JOSHI LD COUNSEL FOR TH E ASSESSEE RELIED UPON THE ORDER OF THE CIT(A) ON THIS OWNERSHIP ISSUE OF THE BUSINESS OF RUNNING OF THE TRUCKS MENTIONED THAT MR GAVALI IS THE OWNER OF THE FOUR T RUCKS AND THE CIT(A) HAS RIGHTLY ASSESSED AS IN HIS HANDS AND THEREFORE THE SAME SH OULD NOT BE DISTURBED. FOR THIS THERE IS ADEQUATE DOCUMENTATION TO SUPPORT (I) THE FACT OF APPLYING FOR THE LOANS AND OBTAINING THE SAME FROM THE SAID COOPERATIVE BANK; (II) LOAN AMOUNT REACHING THE BANK ACCOUNTS OF THE SRI GAVALI; (III) APPROPRIATIO N OF THE SAID AMOUNT FOR THE PURCHASE OF THE TRUCKS IN HIS NAME; (IV) USE OF THE TRUCKS FOR HIS BUSINESS. FINALLY LD COUNSEL SUMMED UP STATING THAT THAT SRI GAVALI IS T HE OWNER OF THE SAID BUSINESS. HOWEVER THERE IS NO REBUTTAL ON THE ISSUES RAISED BY THE LD DR EXCEPT STATING THAT THERE IS NO NEED FOR SETTING ASIDE THE PROCEEDINGS TO THE AO AND THE ORDER OF THE CIT(A) NEEDS TO BE CONFIRMED ON THIS ISSUE. 15. WE HAVE HEARD THE PARTIES WHO MADE THEIR ARGUM ENTS VEHEMENTLY. FROM THE RECORDS AND ARGUMENTS WE FIND THAT THE CASE OF THE REVENUE IS THAT THE ASSESSEE ITA NOS. 575 360 359 & 615/ PN/2006 RAJKUMAR S. HATTARKI AND PRABHAKAR M. GAVA LI A.Y. 2002-03. 14 HAS NOT REBUTTED THE PRESUMPTION UNDERLINED IN THE PROVISIONS OF SECTION 132(4) OF THE ACT SO FAR AS THE DOCUMENTS SEIZED FROM THE PRE MISES OF THE ASSESSEE BUT UNDISPUTEDLY BELONGING TO THE SRI GAVALI. ASSESSEE HAS FAILED DEMONSTRATE AS TO WHY HE HAD TO PEN THE CONTENTS ON THE INCRIMINATING DOC UMENTS IN HIS OWN HAND WRITING. THEREFORE THE ASSESSEE CANNOT BE DELINKED FROM THE BUSINESS OF RUNNING THE TRUCKS WHEN INCRIMINATING DOCUMENTS WERE SEIZED FROM HIS P REMISES. MERELY THE LOANS WERE TAKEN IN THE NAME OF SRI GAVALI AND THE TRUCKS WERE PURCHASED IN HIS NAME IT IS NOT A CONCLUSIVE FACTOR FOR DECIDING THE READ OWNER OF THE SAID BUSINESS. NONE OF THE REVENUE AUTHORITIES HAVE ATTENDED TO THE CRUCIAL FA CT OF ASSESSEES UNDISPUTED OWN HAND WRITING ON THE INCRIMINATING THE DOCUMENTS SEI ZED FROM THE PREMISES. IN OUR OPINION IT IS INCOMPREHENSIBLE WHAT MADE THE ASSES SEE TO WRITE DOWN THE IMPUGNED INCRIMINATING BOOK/DOCUMENTS/PAPERS CLAIMED TO BE B ELONGING TO MR GAVALI. WE HAVE CONSIDERED THE RIVAL DIVERGENT POSITIONS IN TH E MATTER. THE CORE ISSUE FOR DECISION BEFORE US RELATES THE REAL OWNERSHIP OF T HE BUSINESS OF THE RUNNING OF THE TRUCKS AND EXAMINATION OF ALL THE RELEVANT FACTS B Y THE REVENUE FOR ARRIVING AT THE CORRECT CONCLUSIONS THEREOF. AS PER THE ASSESSEE IT IS THE BUSINESS OF THE ASSESSEE AND IT BELONGS TO SRI GAVALI. PER CONTRA REVENUE HOLDS IT BELONGS TO THE ASSESSEE AND SRI GAVALI IS MERELY THE NAME LENDER/BENAMIDAR. 16. THE DIVERGENT POSITIONS OF THE TWO PARTIES OF T HIS LITIGATION WERE NARRATED ABOVE. NOW WE PROCEED TO ENLIST THE UNDISPUTED FACT S AND THEY ARE : (I) NO DISPUTE ON THE SEIZURE OF THE IMPUGNED INCRIMINATING DOCUME NTS PERTAINING TO THE TRUCK PLYING BUSINESS STANDING IN THE NAME OF SRI GAVALI ARE FOUND A FROM THE PREMISES OF THE ASSESSEE (II) QUESTIONING ABOUT THEM DURING TH E SEARCH PROCEEDINGS (III) A STATEMENT WAS TAKEN FROM THE ASSESSEE; (IV) THE ASS ESSEE OWNED UP THE FACT THAT THE HAND WRITING ON THESE DOCUMENTS BELONGS TO HIM- THE ASSESSEE; (V) THE CIT(A) HAS NOT CONSIDERED IT RELEVANT TO APPRECIATE OR ADJ UDICATE THE PRESUMPTION THAT SPRINGS FROM THE PROVISIONS OF SECTION 132(4) OF TH E ACT. IN OUR OPINION IT IS CLEAR OMISSION IN THE ASSESSMENT PROCEEDINGS ON PART OF T HE AO IN NOT CONSIDERING THE ITA NOS. 575 360 359 & 615/ PN/2006 RAJKUMAR S. HATTARKI AND PRABHAKAR M. GAVA LI A.Y. 2002-03. 15 UNDISPUTED FACT OF GIVING ANSWERS OF THE ASSESSEE O WNING UP THE WRINGS RELATING TO THE BUSINESS OF RUNNING OF THE TRUCKS. THE SAID OMI SSION CONTINUED TO PERSIST DURING THE FIRST APPELLATE PROCEEDINGS TOO. 17. CONSIDERING THE DIVERGENT POSITIONS AND THE UND ISPUTED FACTS WE FIND THAT THE REVENUE AUTHORITIES HAVE OMITTED TO BRING CERTAIN I MPORTANT FACTS RELEVANT FOR DECIDING THE BENAMI NATURE OF THE IMPUGNED BUSINESS. NUMBER OF ISSUES RAISED BY THE LD DR HAVE NEITHER BEEN ATTENDED NOR ADJUDICATE D BY THE FIRST APPELLATE AUTHORITIES. IT IS STILL AN ENIGMA AS TO WHY AND HO W THE CRUCIAL FACT OF ASSESSEES OWN HAND WRITING AS DISCUSSED ABOVE HAVE NOT BEEN CONSI DERED RELEVANT FOR DECIDING THE BENAMI NATURE OR CONSIDERED AND NOT ADJUDICATED UPO N IN THEIR ORDERS. THEREFORE IN OUR OPINION LD DR HAS RAISED PERTINENT QUESTIONS W HICH ARE PART OF HIS SUBMISSION NARRATED ABOVE. THESE ARE REQUIRED TO BE ATTENDED O R REBUTTED BY THE AO AND THE CIT(A) WITH SPEAKING ORDER ON EACH OF THE ISSUES/AR GUMENTS. TILL ALL OF THE ABOVE QUERIES ARE ANSWERED IN SATISFACTION THE ALLEGATIO N OF REAL OWNERSHIP OF THE IMPUGNED TRUCKS BUSINESS CANNOT BE DECIDED. THEREF ORE WE ARE OF THE OPINION THAT THE MATTER HAS TO GO TO THE FILES OF THE AO. ASSESS EE SHOULD BE GIVEN REASONABLE OPPORTUNITY OF BEING HEARD AS PER THE PRINCIPLES OF NATURAL JUSTICE. WE DEEM FIT TO DIRECT THE AO TO EXAMINE ALL THE ISSUE RAISED IN TH IS ORDER BY BOTH COUNSELS AND PROVIDE DETAILED REASONING BY PASSING A SPEAKING OR DER TOUCHING UPON EACH OF THE SAID ISSUES. ACCORDINGLY THE RELEVANT GROUNDS ARE SET ASIDE . 18 . LAND HOLDINGS BY BIGGER HUF AND SMALLER HUF: DURING THE SEARCH AND SEIZURE OPERATION THE REVENUE DISCOVERED UNACCOUNT ED ASSETS AND INVESTMENTS OF VARIOUS KINDS AND ASSESSEE ATTEMPTED TO EXPLAIN THE SOURCES OF SUCH ASSETS/INVESTMENTS BY THE AGRICULTURAL INCOME EARNE D OUT OF THE AGRICULTURAL LANDS OF TWO KIND IE AGRICULTURAL HOLDINGS OF THE BIGGER HU F AND THOSE AGRICULTURAL LANDS ACQUIRED BY THE SELF AND THE MEMBERS OF THE FAMILY OF THE ASSESSEE. HOWEVER THE REVENUE QUESTIONED THE EXISTENCE OF SAID HUFS IN GE NERAL AND EARNING OF AGRICULTURAL ITA NOS. 575 360 359 & 615/ PN/2006 RAJKUMAR S. HATTARKI AND PRABHAKAR M. GAVA LI A.Y. 2002-03. 16 INCOME IN PRINCIPLE AND THE QUANTUM OF EARNINGS OF SUCH INCOME IN PARTICULAR. THERE IS NO DIRECT EVIDENCE IN SUPPORT OF THE QUANTUM OF SUCH EARNINGS AND ESSENTIALLY BOTH THE PARTIES RESORTED TO ESTIMATIONS WHICH IS OF COURSE OF THE BONE OF CONTENTION BEFORE US TOO. IT IS THE CASE OF THE ASSESSEES COU NSEL THAT THE ASSESSEE IS INHERITED 1/6 TH OF ANCESTRAL PROPERTY IE BIGGER HUF AND IT IS ARGU ED THAT HE IS THE PRACTICALLY MAINTAINING THE WHOLE OF THE SAID LAND WITH THE CON SENT OF THE REST OF THE COPARCENERS. THEREFORE THE AO HAS ERRED IN NOT CON SIDERING THE AGRICULTURAL INCOME EARNED OUT OF THE SAID LAND. AS PER THE ASSESSEE I F THE SAID STAND OF THE ASSESSEE IS CONSIDERED THERE IS NO CASE OF ANY SUSTAINING ANY ADDITION. IF THE QUANTUM OF AGRICULTURAL INCOME AS REPORTED BY THE ASSESSEE IS CONSIDERED THERE IS NO SCOPE FOR ANY FURTHER ADDITIONS AS MADE BY THE AO. REGARDING THE LAND HOLDING OF HIS FAMILY AMOUNTING TO ABOVE 15 ACRES ACQUIRED BY THEM THE C ASE OF THE ASSESSEE IS THAT THE SAID LAND HOLDINGS CONSTITUTES SMALLER HUF. IN ALTE RNATIVE THE CASE OF THE ASSESSEE IS THAT THE REVENUE ERRED IN THRUSTING ON THE INCOME O F THE OTHER MEMBERS OF THE FAMILY AND CLUBBING THE SAME TO THE INCOME OF THE A SSESSEE. AS PER THE COUNSEL SUCH A CLUBBING IS NOT PERMISSIBLE IN LAW. 19. AS PER THE LD DR REGARDING THE LAND HOLDING SA ID TO BE BELONGING TO THE BIGGER HUF THERE IS NO EVIDENCE TO SUPPORT THE SAM E AND NOBODY HAS GONE INTO THE OWNERSHIP ISSUES OF THE SAID LANDS. HE ALSO HIGHLIG HTED THE ABSENCE ANY ASSESSMENT UNDER DIRECT TAXES IN THE STATUS OF HUF. REGARDING THE LAND HOLDING OF 15 AND ODD ACRES HE IS OF THE VIEW THAT THE SAME ARE ACQUIRED BY THE ASSESSEE IN THE NAME OF THE MEMBERS OF THE FAMILY AND THEREFORE THE SAME I S PROPERLY CONSIDERED BY THE CIT(A) AS THE INVESTMENT AND INCOME OF THE ASSESSEE . 20. REGARDING THE ESTIMATION OF AGRICULTURAL INCOME BOTH THE PARTIES HAVE INFORMED US THAT THE SAID INCOME WAS ESTIMATED BASE D ON THE MPKV FIGURES AND THEY ALSO REFERRED TO THE EXISTING DECISION OF THIS TRIB UNAL IN THE CASE OF PATIL DILP BAJIRAO AND MANY OTHER CASES ONN THIS TOPIC AND MENTIONED THAT THE ISSUE OF ESTIMATION ITA NOS. 575 360 359 & 615/ PN/2006 RAJKUMAR S. HATTARKI AND PRABHAKAR M. GAVA LI A.Y. 2002-03. 17 WAS SET ASIDE WITH CERTAIN DIRECTIONS AND THEY ARE RELEVANT TO THIS CASE TOO AS THE SAME MPKV FIGURES ARE ADOPTED IN THE INSTANT CASE T OO. 21. ON UNDER THE ISSUES AND THE IMPLICATIONS OF EAC H ISSUE WE FIND THESE ISSUES HAVE NOT BEEN PROPERLY ADDRESSED TO BY THE CIT(A) I N HIS ORDER. ON THE OTHER HAND WE FIND THAT THE AOS ORDER IS SILENT ON THESE ISSU ES AND FAILED TO BRING RELEVANT FACTS ON THE OWNERSHIP OF THE SAID LANDS WHO IS ACTUALLY IN POSSESSION OF THE ENTIRE AGRICULTURAL HOLDINGS WHO ACTUALLY IS THE OWNER OF THESE LANDS WHO ACTUALLY DID THE AGRICULTURAL ACTIVITY WHO ACTUALLY EARNED THE SAID AGRICULTURAL INCOME IN WHOSE HANDS THE IMPUGNED AGRICULTURAL INCOME HAS TO BE AS SESSEE HOW THE SHARE OF SUCH INCOME PERTAINING TO HIS OTHER COPARCENARIES SHOULD BE CONSIDERED FOR EXPLAINING THE UNACCOUNTED ASSETS/INVESTMENTS OF THE ASSESSEE WHY OR WHY NOT THE UNREPORTED OR UNDISCLOSED ASSETS/INVESTMENTS OF ALL THE COPARCENA RIES ARE TO BE CONSIDERED IN THE HANDS OF THE ASSESSEE IF THE SAID INCOME HAS TO BE CONSIDERED IN HIS HANDS OR OTHERWISE WHEN THE SEARCH AND SEARCH ASSESSMENT IS PERSONS SPECIFIC WHY INCOME OF OTHER PERSONS IS ASSESSED IN THE HANDS OF THE AS SESSEE WITHOUT PROPERLY ESTABLISHING THE BENAMI NATURE OF SUCH INCOME/ASSET S/INVESTMENTS ETC. FURTHER ON QUANTIFICATION OF AGRICULTURAL INCOME ALSO THERE IS NEED FOR APPROPRIATE AND REASONABLE AND SPEAKING ORDER TOO. THEREFORE WE AR E OF THE OPINION ALL THE RELEVANT GROUNDS OF THESE APPEALS SHOULD BE REFERRED TO THE FILES OF THE AO FOR FRESH EXAMINATION OF THE FACTS AND FRESH DECISION ON THE ISSUES ANALYSED ABOVE AFTER GRANTING REASONABLE OPPORTUNITY OF BEING HEARD TO T HE ASSESSEE. ASSESSEE IS DIRECTED TO FURNISH EVERY REQUISITE EVIDENCE TO ESTABLISH TH E (I) EXISTENCE OF THE BIGGER HUF AS CLAIMED; (II) OWNERSHIP OF THE AGRICULTURAL HOLDING S; (III) WHO IS THE ACTUAL OR BENEFICIAL OWNER OF THE SAID HOLDINGS; (IV) WHETHER SUCH HOLDINGS WERE HELD BY THE ASSESSEE AND THEREFORE THE PROPRIETY DEMANDS TAXIN G ON THE RESULTANT INCOME IN HIS HANDS OR OTHER WISE; (V) WHY THE AO MUST TAKE A GLO BAL APPROACH VIS A VIS THE UNDISCLOSED ASSETS/INVESTS OF THE COPARCENARIES OF THE BIGGER HUF IF HELD EXISTING BY THE AO AND ALSO VIS A VIS THE AGRICULTURAL INCOM E EARNED OUT OF THE ALLEGED LANDS ITA NOS. 575 360 359 & 615/ PN/2006 RAJKUMAR S. HATTARKI AND PRABHAKAR M. GAVA LI A.Y. 2002-03. 18 OF THE SO CALLED BIGGER HUF; (VI) ASSESSEE SHALL A LSO FILED SOME OF THE DECISIONS TAKEN BY THIS TRIBUNAL WHERE THE SAME COUNSEL REPRE SENTED SAY THE CASE OF SRI PATIL BAJIRAO SAKHARAM VIDE THE ITA NO. 453 & 500/PN/200 7 (BLOCK PERIOD 1996-97 TO 2002-03). PARA 4 OF THIS ORDER OF OURS WHICH CONTA INS THE REFERENCES TO OTHER RELEVANT DECISIONS OF OURS AGAIN IS RELEVANT AND THE SAME READ AS UNDER: 4. WE HAVE HEARD BOTH THE PARTIES PERUSED THE ORDE RS OF THE REVENUE AND THE ORDER OF THE TRIBUNAL DT. 27.10.2009. SO FAR AS THE ADDITIONAL GROUND IS CONCERNED IT IS EVIDENT THAT THE SAME IS LEGAL IN NATURE AND WE FIND NO DIFFICULTY IN ADMITTING THE SAME AND REFERR ING THE SAME TO THE FILE OF THE CIT(A) FOR HIS COMMENTS AND ADJUDICATION ON THE ISSUE RAISED THEREIN. REGARDING THE OTHER ISSUES RELATING TO THE ESTIMATI ON OF AGRICULTURAL INCOME RELYING ON THE MPKC STATISTICS AND OTHER ISSUES RAI SED IN GROUND 2 TO 4 WE ARE OF THE OPINION THAT THE SAME COULD BE SET ASIDE TO THE FILE OF THE CIT(A) FOR DECIDING THE ISSUE AFRESH IN THE LIGHT OF OUR DIREC TIONS MENTIONED IN THE ORDER DT 27.10.2009 IN THE CASE OF SHRI PATIL DILIP BABUR AO (SUPRA). FURTHER THE LD COUNSEL ALSO FILED THE COPY OF THE ORDER OF THE TRI BUNAL IN THE CASE OF SANJEEVANIDEVI S GAIKWAD ITA NO. 875/PN/07 DT. 15. 4.2010 WHERE ONE OF US IS THE PARTY TO IT AND MENTIONED ON THE ISSUES IN THAT APPEAL ALSO RELATE TO THE ISSUE OF (I) QUANTIFICATION OF AGRICULTURAL INCOME RELYING ON THE MPKV STATISTICS (II) SOURCES OF INVESTMENT IN CERTAIN A SSETS (III) NON CONSIDERATION OF CERTAIN ACCOUNTED SOURCES OF INCOME ...... WE HAVE EXAMINED THE ARGUMENTS OF THE COUNSEL AND TENDED TO AGREE WITH HIM. ACCORD INGLY ALL THE ISSUES ARE SET ASIDE AND CIT(A) IS DIRECTED TO DECIDE THE ISSU ES AFRESH IN THE LIGHT OF THE ABOVE ORDERS THIS TRIBUNAL AFTER GIVING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. CIT(A) SHALL PASS A SPEAKING ORDER ON ALL THE ISSUES IN ACCORDANCE WITH THE PROVISIONS OF SECTION 250(6) OF THE ACT AN D ALSO TUNE WITH THE JURISDICTIONAL HIGH COURT JUDGMENT IN THE CASE OF M /S SHIVSAGAR VEG. RESTAURANT REPORTED IN 317 ITR 344 (BOM). ASSESSEE IS ALSO DIRECTED TO FILE THE COPIES OF THE CITED ORDERS OF THE TRIBUNAL BEFORE THE CIT(A) AT THE TIME OF THE HEARING. ACCORDINGLY THE GROUNDS ARE SET ASIDE . 22. UNLIKE IN OTHER CASES WE HAVE DECIDED TO SEND THESE ISSUES TO THE FILES OF THE FILES OF THE AO FOR THE REASON THAT THE AO HAS COMP LETELY OMITTED TO CONSIDER THE CONTENTS OF CRUCIAL STATEMENT OF THE ASSESSEE FOR E STABLISHING THE BENAMI NATURE OR OTHER WISE OF THE AGRICULTURAL LANDS CLAIMED TO BE PERTAINING TO THE BIGGER HUF BUT HELD BY THE ASSESSEE FOR AGRICULTURAL PRACTICES PUR POSES AND FOR EARNING OF AGRICULTURAL INCOME WHICH WAS FINALLY USED TO EXPL AIN THE UNEXPLAINED ASSETS/INVESTMENTS DISCOVERED DURING THE SEARCH. AS SESSEE IS DIRECTED FILED ALL THESE ITA NOS. 575 360 359 & 615/ PN/2006 RAJKUMAR S. HATTARKI AND PRABHAKAR M. GAVA LI A.Y. 2002-03. 19 COPIES OF THE DECISIONS OF OURS BEFORE THE AO DURIN G THE SET ASIDE PROCEEDINGS WHICH SHOULD BE COMPLETED IN A TIME BOUND MANNER. A CCORDINGLY THE RELEVANT GROUNDS ARE SET ASIDE . 23. LEVY OF SUR-CHARGE SEARCHED CONDUCTED PRIOR TO 1- 6-2002 : ASSESSEE RAISED THIS GROUND CHALLENGING THE LEVY OF SURCHARG E TO THE BLOCK ASSESSMENTS RELATABLE TO THE SEARCHED CONDUCTED PRIOR TO THE AM ENDMENT. REGARDING THE GROUNDS RELATING TO THE LEVY OF SURCHARGE WE FIND THE SAME HAS TO BE DECIDED IN LINE WITH THE JUDGMENT OF THE APEX COURT IN THE CASE OF S N GUPRA (297 ITR 322). LEARNED DR FOR REVENUE ARGUED VEHEMENTLY STATING THAT THE SURCHA RGE IS ALWAYS LEVIABLE ON THE TAX COMPUTED IN THE BLOCK ASSESSMENTS ALSO. THE INSERTI ON OF PROVISO TO SECTION 113 BY THE FINANCE ACT 2002 W E F 1.6.2002 IS MERE CLARIFI CATORY IN NATURE. FURTHER THE LD DR FOR THE REVENUE HAS SUBMITTED THAT THE SAID ISSU E OF LEVY OF SURCHARGE IN THE BLOCK ASSESSMENTS FOR THE PERIOD PRIOR TO THE SAID AMENDMENT IS SETTLED NOW BY VIRTUE OF THE APEX COURTS JUDGMENT IN THE CASE OF CIT VS SURESH N GUPTA (297 ITR 322)(SC)(2008) WHERE IT IS HELD THAT THE PROVISO T O SECTION 113 INSERTED BY THE FINANCE ACT 2002 W E F 1.6.2002 IS CLARIFICATORY A ND CURATIVE IN NATURE. THEREFORE EVEN WITHOUT THE SAID PROVISO THE SURCHARGE IS LEV IABLE IN RESPECT OF THE SEARCHES CONDUCTED PRIOR TO 1.6.2002. 24. WE HAVE HEARD THE DR AND PERUSED THE IMPUGNED O RDER OF THE CIT(A). WE FIND THERE IS NO REFERENCE IN THE SAID ORDER TO ANY SPECIFIC JUDGMENT RELIED ON BY THE ASSESSEE ON THE SUBJECT OF SURCHARGE FOR THE PERIOD PRIOR TO THE SAID AMENDMENT. ON THE CONTRARY IT HAS BEEN THE STAND OF THE REVENUE AS WELL AS THE COURTS THAT THE SAID AMENDMENT IS CURATIVE IN NATURE. IT IS A SETTLED IS SUE NOW BY VIRTUE OF THE APEX COURTS JUDGMENT IN THE CASE OF CIT VS SURESH N GUP TA (SUPRA) THAT THE SAID AMENDMENT IS CURATIVE AND THE SURCHARGE IS LEVIABLE IN RESPECT OF THE SEARCHES CONDUCTED PRIOR TO 1.6.2002 TOO. CONSIDERING THE SA ID RATIO DECIDENDI IN THE CASE OF THE SURESH N GUPTA (SUPRA) WHICH IS AFFIRMED IN THE CASE OF RAJIV BHATARA (310 ITA NOS. 575 360 359 & 615/ PN/2006 RAJKUMAR S. HATTARKI AND PRABHAKAR M. GAVA LI A.Y. 2002-03. 20 ITR 105)(SC) AT THE LEVEL OF THE APEX COURT WE ARE OF THE OPINION THAT THE GROUND RAISED IN THE APPEAL OF THE ASSESSEE HAS TO BE DISMISSED AND CONFIRM THE ORDER OF THE CIT(A). 25. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE AND THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSE. ITA NO. 359/PN/2008 &ITA NO. 615/PN/2008 BY PRABHAKAR M. GAVALI 26. THESE TWO APPEALS ARE FILED BY THE ASSESSEE AND THE REVENUE AGAINST THE ORDER OF THE CIT(A) DATED 27.11. 2007. THE APPEAL V IDEITA NO. 359/PN/2008 IS FILED BY THE ASSESSEE AND OTHER APPEAL VIDE ITA 615/PN/20 08 IS FILED BY THE REVENUE. THE ISSUES IN THESE APPEAL IN SHORT ARE THAT THE AS SESSEE IS AGGRIEVED AGAINST CONFIRMING THE ADDITION OF RS. 15 21 890/- AS MENTI ONED ABOVE. ON THE OTHER HAND REVENUE IS AGGRIEVED AGAINST THE RELIEF GRANTED TO THE ASSESSEE INSTEAD OF CONFIRMING ADDITION OF RS. 47 22 530/-. IN OUR OPINION THE GR OUNDS IN THESE APPEALS ARE CONNECTED TO THE ISSUE SET ASIDE BY US VIDE OUR DEC ISIONS IN THE CASE OF SRI HATTARKI DISCUSSED IN THE PRECEDING PARAGRAPHS OF THIS COMPO SITE ORDER. TILL THE FINALITY ON FACTS ARE REACHED IN THE SAID CASE THE PRESENT APP EALS CANNOT BE ADJUDICATED JUDICIOUSLY. THEREFORE WE ARE OF THE OPINION THAT ALL THE GROUNDS IN THESE CROSS APPEALS HAVE TO BE SET ASIDE FOR FRESH ADJUDICATION CONSIDERING THE DECISION IN THE CASE OF SRI HATTARKI. AO IS ALSO DIRECTED TO EXAMIN E THE LEGAL ISSUES RELATING TO THE VALIDITY OF THE ASSESSMENTS U/S 158BD OF THE ACT AN D PASS A SPEAKING ORDER ON THE ISSUES. AT THE END ALL THE GROUNDS IS THESE TWO AP PEALS ARE SET ASIDE PRO-TANTO AND MUTATIS MUTANDIS . ITA NOS. 575 360 359 & 615/ PN/2006 RAJKUMAR S. HATTARKI AND PRABHAKAR M. GAVA LI A.Y. 2002-03. 21 27. IN THE RESULT THE APPEALS OF THE ASSESSEE AND THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 22ND JUL Y 2011 SD/- SD/- ( SHAILENDRA KUMAR YADAV ) JUDICIAL MEMBER (D. KARUNAKARA RAO) ACCOUNTANT MEMBER PUNE: DATED: 22ND JULY 2011 US COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT I/II KOLHAPUR /CIT (CENTRAL) PUNE 4. THE CIT(A)- KOLHAPUR 4. THE D.R. ITAT A BENCH PUNE 5. GUARD FILE BY ORDER ASSTT. REGISTRAR ITAT PUNE