VIREN AHUJA, MUMBAI v. DCIT CC 47, MUMBAI

ITA 3890/MUM/2013 | 2006-2007
Pronouncement Date: 29-04-2015 | Result: Partly Allowed

Appeal Details

RSA Number 389019914 RSA 2013
Assessee PAN AACPA4809M
Bench Mumbai
Appeal Number ITA 3890/MUM/2013
Duration Of Justice 1 year(s) 11 month(s) 13 day(s)
Appellant VIREN AHUJA, MUMBAI
Respondent DCIT CC 47, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 29-04-2015
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted F
Tribunal Order Date 29-04-2015
Date Of Final Hearing 12-11-2014
Next Hearing Date 12-11-2014
Assessment Year 2006-2007
Appeal Filed On 16-05-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL F BE NCH MUMBAI . . BEFORE SHRI I.P. BANSAL JUDICIAL MEMBER AND SHRI N.K. BILLAIYA ACCOUNTANT MEMBER / I.T.A. NO. 3890/MUM/2013 ( / ASSESSMENT YEAR : 2006-07 SHRI VIREN AHUJA 1 NEELKANTH ROAD NO. 6 CHEMBUR MUMBAI-400 071 / VS. THE DCIT CC-47 MUMBAI / I.T.A. NO. 4171/MUM/2013 ( / ASSESSMENT YEAR : 2007-08 SHRI VIREN AHUJA 1 NEELKANTH ROAD NO. 6 CHEMBUR MUMBAI-400 071 / VS. THE DCIT CC-47 MUMBAI / I.T.A. NO. 4708/MUM/2013 ( / ASSESSMENT YEAR : 2007-08 THE DCIT CC-47 MUMBAI / VS. SHRI VIREN AHUJA 1 NEELKANTH ROAD NO. 6 MUMBAI-400 071 / I.T.A. NO. 4322/MUM/2013 ( / ASSESSMENT YEAR : 2008-09 SHRI VIREN AHUJA 1 NEELKANTH ROAD NO. 6 CHEMBUR MUMBAI-400 071 / VS. THE DCIT CC-47 MUMBAI ' ./ ./PAN/GIR NO. :AACPA 4809M ( '% /APPELLANT ) .. ( &''% / RESPONDENT ) '% / APPELLANT BY: SHRI J.P. BAIRAGRA &''% ) / RESPONDENT BY: SHRI R.R. PRASAD SHRI VIREN AHUJA 2 ) + / DATE OF HEARING :22 .04.2015 ) + / DATE OF PRONOUNCEMENT : 29.04.2015 / O R D E R PER N.K. BILLAIYA AM: ITA NO. 3890/MUM/2013 IS THE APPEAL BY THE ASSESSE E AGAINST THE ORDER OF THE LD. CIT(A) 38 MUMBAI DT. 2 1.2.2013 PERTAINING TO ASSESSMENT YEAR 2006-07. ITA NOS. 4171 AND 4708 /M/13 ARE CROSS APPEALS BY THE ASSESSEE AND THE REVENUE AGAINST THE VERY SAME ORDER OF THE LD. CIT(A) FOR ASSESSMENT YEAR 2007-08 AND ITA NO. 4322 /M/13 IS THE APPEAL BY THE ASSESSEE FOR A.Y.2008-09. AS C OMMON ISSUES ARE INVOLVED IN ALL THESE APPEALS THEY WERE HEARD TOGE THER AND DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE AN D BREVITY. ITA NO. 3890/MUM/2013-2006-07 2. THE ASSESSEE HAS RAISED AS MANY AS 8 GROUNDS. B Y GROUND NO. 1 TO 5 THE ASSESSEE HAS CHALLENGED THE JURISDICTION OF THE ASSESSING OFFICER FOR MAKING ASSESSMENT U/S. 143(3) R.W. SEC. 153A OF THE ACT. THE LD. COUNSEL FOR THE ASSESSEE STATED THAT HE IS NOT PRES SING THESE GROUNDS. GROUND NO. 1 TO 5 ARE ACCORDINGLY DISMISSED. THE LD . COUNSEL FOR THE ASSESSEE STATED THAT HE IS ALSO NOT PRESSING GROUND NO. 6 THE SAME IS ALSO DISMISSED AS NOT PRESSED. 3. GROUND NO. 7 RELATES TO THE ADDITION OF RS. 2 70 88 882/- MADE U/S. 68 OF THE ACT. SHRI VIREN AHUJA 3 3.1. WHILE SCRUTINIZING THE RETURN OF INCOME THE A O NOTICED THAT THE ASSESSEE HAS RECEIVED UNSECURED CREDIT FROM VARIOUS PARTIES. THE DETAILS OF WHICH READS AS UNDER: S. NO. CREDITOR ADDITION DURING A.Y. 2006-07 ADDITION DURING A.Y. 2007-08 1. LAFFAN SOFTWARE (P) LTD. 9 67 240/- 1 00 00 000/- 2. LOGIC INFOTECH PVT. LTD. 1 02 80 040/- 50 00 000/- 3. N.E. ELECTRONICS LTD. 1 08 41 300/- 0 4. BHASKAR FUND 28 57 782/- 0 5. PANSOFT TECHNOLOGIES 21 42 520/- 0 TOTAL 2 70 88 882/- 1 50 00 000/- 3.2. THE ASSESSEE WAS ASKED TO EXPLAIN THE AFOREMEN TIONED CREDITS. THE ASSESSEE WAS SPECIFICALLY REQUIRED TO PROVE THE IDE NTITY OF THE CREDITORS GENUINENESS OF THE TRANSACTION AND CREDIT WORTHINE SS OF THE CREDITORS. THE AO OBSERVED THAT THE ASSESSEE HAS ONLY SUBMITT ED THE MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATION OF THE COMPANIES THEIR BOARD RESOLUTIONS LOAN CONFIRMATIONS AND IN FEW CASES BA LANCE SHEET. THE AO PROCEEDED BY MAKING OBSERVATIONS RELATING TO THE AS SESSMENT PROCEEDINGS IN THE GROUP CASES OF M/S. BERMACO GROUP CONCERNS WHEREIN THE ASSESSEE IS A DIRECTOR. THE AO FURTHER OBSERVED THAT IN THE ENQUIRIES MADE BY THE INVESTIGATION WING IT WAS REVEALED THAT THESE CR EDITORS ARE BOGUS COMPANIES WHEREIN CASH HAS BEEN DEPOSITED BEFORE SU CH CREDIT WAS ADVANCED. FROM PARA-V ON PAGE-5 TILL PARA-X ON PAG E-10 THE AO DISCUSSED THE CREDIT ENTRIES OF THESE COMPANIES IN VARIOUS GROUP CONCERNS OF THE ASSESSEE AND FINALLY CONCLUDED BY TREATING T HE LOAN RECEIVED FROM THESE COMPANIES AT RS. 2 70 88 882/- AS UNDISCLOSED INCOME OF THE ASSESSEE U/S. 68 OF THE ACT. SHRI VIREN AHUJA 4 4. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. C IT(A) AND STRONGLY CONTENDED THAT THE ASSESSEE HAS DISCHARGED THE ONU S CAST UPON HIM BY VIRTUE OF THE PROVISIONS OF SEC. 68 OF THE ACT. IT WAS STRONGLY CONTENDED THAT THE ASSESSEE HAS SUCCESSFULLY ESTABLISHED THE IDENTITY OF THE CREDITORS GENUINESS OF THE TRANSACTION AND CREDIT WORTHINESS OF THE CREDITORS. AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS THE LD. CIT(A) OBSERVED THAT THE GENUINESS OF THE TRANSACTIONS CANNOT BE VERIFIE D BY THE AO UNLESS THE ASSESSEE DISCHARGES THE ONUS OF PRODUCING THE LOAN CREDITORS OR THE AO IS ABLE TO SERVE THE SUMMONS ON THE LENDERS PROVIDED CORRECT AND LATEST ADDRESS OF THE LENDERS IS MADE AVAILABLE BY THE ASS ESSEE. THE ASSESSEE HAS NOT DISCHARGED THIS BASIC ONUS PLACED ON HIM. THE LD. CIT(A) CARRIED ON HIS OBSERVATIONS ON THE VARIOUS GROUP COMPANIES OF THE ASSESSEE AND CONFIRMED THE ADDITIONS MADE BY THE AO. 5. AGGRIEVED BY THIS THE ASSESSEE IS BEFORE US. T HE LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY SUBMITTED THAT THE ASSESSEE HAS SUCCESSFULLY DISCHARGED THE ONUS THEREFORE THE ORDER OF THE LD. CIT(A) IS ERRONEOUS ON FACTS. THE LD. COUNSEL FOR THE ASSESSEE DREW OUR A TTENTION TO THE DOCUMENTS FILED IN SUPPORT OF THE GENUINENESS OF TH E CREDIT ENTRIES. IT IS THE SAY OF THE LD. COUNSEL THAT IN VARIOUS JUDICIAL DECISIONS IT HAS BEEN HELD THAT ONCE THE ASSESSEE HAS ESTABLISHED THE IDE NTITY OF THE CREDITORS AND THE GENUINESS OF THE TRANSACTION THEN THE ASSE SSEE CANNOT BE EXPECTED TO PROVE THE SOURCE OF THE SOURCE. IN SUPPORT OF H IS CONTENTION THE LD. COUNSEL PLACED RELIANCE ON VARIOUS JUDICIAL DECISIO NS PLACED BEFORE US IN THE FORM OF PAPER BOOK. 6. PER CONTRA THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SUPPORTED THE ORDERS OF THE REVENUE AUTHORITIES. SHRI VIREN AHUJA 5 7. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUT HORITIES BELOW AND THE RELEVANT DOCUMENTARY EVIDENCES BROUGHT ON RECO RD. WE HAVE ALSO GONE THROUGH VARIOUS JUDICIAL DECISIONS PLACED BEFO RE US. THERE IS NO DISPUTE THAT THE ASSESSEE HAS SUBMITTED FOLLOWING D OCUMENTS: 1) MEMORANDUM/ARTICLES OF ASSOCIATION OF COMPANIES 2) BOARD RESOLUTION OF THE COMPANIES 3) LOAN CONFIRMATIONS 4) BALANCE SHEET 5) PAN DETAILS 6) COPIES OF I.T. RETURNS. 8. A PERUSAL OF THESE DOCUMENTS GO TO ESTABLISH THA T THE ASSESSEE HAS PRIMA FACIE DISCHARGED THE ONUS CAST UPON HIM BY VI RTUE OF PROVISIONS OF SEC. 68 OF THE ACT. THE ONUS HAS NOW SHIFTED ON TO THE AO. LET US SEE HOW THE AO HAS DISCHARGED THE ONUS. A PERUSAL OF T HE ASSESSMENT ORDER SHOWS THAT THE AO HAS DISCUSSED AT LENGTH THE TRANS ACTIONS IN VARIOUS GROUP COMPANIES BY THE LENDERS OF THE CASE IN HAND. THE AO DREW SUPPORT FROM THE OBSERVATIONS MADE IN OTHER GROUP C ASES BUT THAT CANNOT BE THE SOLE BASIS FOR MAKING THE ADDITIONS IN THE C ASE IN HAND. WE FIND THAT THE TRANSACTIONS HAVE BEEN MADE BY CHEQUE. TH ERE IS NO DIRECT EVIDENCE BROUGHT ON RECORD IN THE CASE OF THE ASSES SEE TO SHOW THAT THE TRANSACTION IS NOT GENUINE AS NO VERIFICATION HAS B EEN MADE IN THE CASE OF THE ASSESSEE FROM THE RELATED BANKS. WE ALSO FIND THAT ALL THE LENDER COMPANIES ARE TAXPAYERS AND THEIR PAN DETAILS ARE ON RECORD ALONGWITH THE COPIES OF THEIR INCOME TAX RETURN. THERE IS NO EVIDENCE TO SHOW THAT THE AO HAS MADE ENQUIRIES FROM THE LENDER COMPANIES . MERELY BECAUSE THE LENDER COMPANIES WERE FOUND TO BE NAME LENDERS IN OTHER GROUP COMPANIES WOULD NOT EMPOWER THE AO TO MAKE ADDITIO NS U/S. 68 OF THE ACT IN THE HANDS OF THE PRESENT ASSESSEE. SHRI VIREN AHUJA 6 8.1. THE HONBLE GUJARAT HIGH COURT IN THE CASE OF MURLIDHAR LAHORIMAL VS CIT 280 ITR 512 RELYING UPON ANOTHER D ECISION OF THE SAME COURT IN THE CASE OF CIT VS PRAGATI CO.OPERA TIVE BANK LTD. 278 ITR 170 HAS HELD THAT AN THE ASSESSEE CAN BE ASKED TO PROVE THE SOURCE OF CREDIT IN BOOKS BUT CANNOT BE ASKED TO PROVE THE SOURCE OF THE SOURCE. A SIMILAR VIEW WAS ALSO TAKEN BY THE HONBLE HIGH C OURT OF RAJASTHAN IN THE CASE OF LABH CHAND BOHRA VS ITO219 CTR 571. TH E HONBLE HIGH COURT OF BOMBAY IN THE CASE OF CIT VS DWARKADISH I NVESTMENT PVT. LTD. 330 ITR 298 HAS HELD THAT THOUGH IN SEC. 68 PROCEED INGS THE INITIAL BURDEN OF PROOF LIES ON THE ASSESSEE YET ONCE HE P ROVES THE IDENTITY OF THE CREDITORS/SHARE APPLICANTS BY EITHER FURNISHING THE IR PAN OR INCOME-TAX ASSESSMENT NUMBER AND SHOWS THE GENUINENESS OF TRAN SACTION BY SHOWING MONEY IN HIS BOOKS EITHER BY ACCOUNT PAYEE CHEQUE O R BY DRAFT OR BY ANY OTHER MODE THEN THE ONUS OF PROOF WOULD SHIFT TO T HE REVENUE JUST BECAUSE THE CREDITORS COULD NOT BE FOUND AT THE ADD RESS GIVEN IT WOULD NOT GIVE THE REVENUE THE RIGHT TO INVOKE SECTION 68 OF THE ACT. A SIMILAR VIEW WAS TAKEN BY THE HONBLE HIGH COURT OF RAJASTHAN IN THE CASE OF ARAVALI TRADING CO. VS ITO 220 CTR 622 8.2. CONSIDERING THE FACTS IN TOTALITY IN THE LIGH T OF THE JUDICIAL DECISIONS REFERRED TO HEREINABOVE KEEPING IN MIND THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF CIT VS OR ISSA CORPORATION PVT. LTD. 159 ITR 78 WE HAVE NO HESITATION TO HOLD THAT THE ASSESSEE HAS SUCCESSFULLY DISCHARGED THE ONUS CAST UPON HIM BY V IRTUE OF SEC. 68 OF THE ACT. NO ADDITION IS THEREFORE CALLED FOR. WE SET ASIDE THE FINDINGS OF THE LD. CIT(A) AND DIRECT THE AO TO DELETE THE ADDITION MADE U/S. 68 OF THE ACT. THIS GROUND OF THE ASSESSEE IS ALLOWED. SHRI VIREN AHUJA 7 9. GROUND NO. 8 RELATES TO THE LEVY OF INTEREST U/S . 234A. 234B AND 234C OF THE ACT. LEVY OF INTEREST IS MANDATORY THO UGH CONSEQUENTIAL THE AO IS DIRECTED TO CHARGE INTEREST AS PER PROVISIONS OF LAW. 10. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ITA NO. 4171/M/13- ASSESSEES APPEAL A.Y 2007-08 11. GROUND NO. 1 TO 5 RELATE TO THE JURISDICTION O F THE AO FOR MAKING ASSESSMENT U/S. 143(3) R.W. SEC. 153A OF THE ACT. 12. AT THE VERY OUTSET THE LD. COUNSEL FOR THE AS SESSEE STATED THAT HE IS NOT PRESSING GROUND NO. 1 TO 5. GROUND NO. 1 TO 5 ARE ACCORDINGLY DISMISSED. 13. GROUND NO. 6 RELATES TO THE ADDITION OF RS. 1.5 0 CRORES MADE BY THE AO U/S. 68 OF THE ACT. 14. THE ASSESSEE HAS BORROWED MONEY FROM TWO PARTIE S FROM WHOM THE MONIES WERE BORROWED IN A.Y. 2006-07 ALSO. WE HAVE DELETED THE ADDITION MADE IN A.Y. 2006-07 IN ITA NO. 3890/M/13 QUA GROUND NO. 7 OF THAT APPEAL. FOLLOWING OUR OWN FINDING /DETAILE D DISCUSSIONS THEREIN WE DIRECT THE AO TO DELETE THE ADDITION OF RS. 1. 50 CROES. GROUND NO. 6 IS ACCORDINGLY ALLOWED. 15. GROUND NO. 7 RELATES TO THE ADDITION OF RS. 25 LAKHS MADE BY THE AO U/S. 69 OF THE ACT. 16. THIS ISSUE HAS BEEN CONSIDERED BY THE AO AT PAR A-9 OF HIS ORDER. REFERRING TO CERTAIN INCRIMINATING PAPER FOUND DURI NG THE COURSE OF THE SEARCH THE ASSESSEE WAS ASKED TO EXPLAIN THE NATU RE OF THE DOCUMENT FOUND AT THE TIME OF SEARCH. AS SCANNED COPY OF THE SAID DOCUMENT IS SHRI VIREN AHUJA 8 EXHIBITED AT PAGE-13 OF THE ASSESSMENT ORDER. THE ASSESSEE EXPLAINED THAT HE HAS PURCHASED 5 FLATS IN MARVEL DIVA PUNE FOR WH ICH IT WAS INITIALLY AGREED THAT THE ASSESSEE WILL PAY ADDITIONAL RS. 25 LAKHS FOR SOME EXTRA EXPENSES. HOWEVER FINALLY THESE EXPENSES DID NOT M ATERIALIZE AND NO CASH WAS FINALLY PAID. THIS EXPLANATION OF THE ASS ESSEE DID NOT FIND ANY FAVOUR WITH THE AO WHO PROCEEDED BY TREATING 25 LAK HS AS UNEXPLAINED INVESTMENT U/S. 69 OF THE ACT AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. 17. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) BUT WITHOUT ANY SUCCESS. 18. BEFORE US THE LD. COUNSEL FOR THE ASSESSEE VEH EMENTLY SUBMITTED THAT THE ADDITIONS HAVE BEEN MADE MERELY BECAUSE SO ME DOCUMENT WAS FOUND AT THE TIME OF SEARCH WHICH ONLY CONTAINS SOM E JOTTINGS. IT IS THE SAY OF THE LD. COUNSEL THAT MERELY BECAUSE SOME ENT RIES ARE FOUND IN A PIECE OF PAPER WOULD NOT JUSTIFY THE ADDITION. 19. PER CONTRA THE LD. DR SUPPORTED THE ASSESSMENT ORDER. 20. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUT HORITIES BELOW. WE HAVE ALSO CAREFULLY GONE THROUGH THE IMPUGNED DOCUM ENT EXHIBITED AT PAGE-13 OF THE ASSESSMENT ORDER. WE FIND THAT AT T HE CENTRE ON THE TOP SIDE THERE IS A REFERENCE TO CASH RS. 25 LAKHS AND 50% 12 50 000-/. EXCEPT FOR THIS THERE IS NOTHING TO SUGGEST WHAT T HE AO HAS DRAWN OUT OF THIS DOCUMENT THAT IT IS AN UNEXPLAINED INVESTMENT MADE BY THE ASSESSEE. WE ALSO FIND THAT 5 FLATS PURCHASED BY THE ASSESSEE FOR AN AGREED COST OF RS. 244 LAKHS THE STAMP DUTY VALUE OF WHICH IS AT RS. 218 LAKHS. THUS IT CAN BE SEEN THAT THE AGREEMENT VALUE IS IN FAR EXCE SS OF THE STAMP DUTY VALUE THEREFORE IT CANNOT BE SAID THAT SOME CASH WA S PAID OVER AND ABOVE SHRI VIREN AHUJA 9 THE AGREED VALUE. WE ALSO FIND THAT THE AO HAS SIM PLY DISBELIEVED THE EXPLANATION OF THE ASSESSEE BUT AT THE SAME TIME HA S NOT BROUGHT ANY DEMONSTRATIVE MATERIAL EVIDENCE ON RECORD TO PROVE THAT THERE IS AN UNEXPLAINED INVESTMENT MADE BY THE ASSESSEE. THE A O DID NOT EVEN CARE TO VERIFY FROM THE SAID BUILDER. THE ADDITIONS HAV E BEEN MADE PURELY ON THE STRENGTH OF A PIECE OF PAPER WITHOUT ANY CORROB ORATIVE/DEMONSTRATIVE EVIDENCE THEREFORE IN OUR CONSIDERED VIEW SUCH ADD ITIONS CANNOT BE SUSTAINED. WE SET ASIDE THE FINDINGS OF THE LD. CI T(A) AND DIRECT THE AO TO DELETE THE ADDITION OF RS. 25 LAKHS. GROUND NO. 7 IS ACCORDINGLY ALLOWED. 21. GROUND NO. 8 RELATES TO THE LEVY OF INTEREST U/ S. 234A. 234B AND 234C OF THE ACT. LEVY OF INTEREST IS MANDATORY THO UGH IT IS CONSEQUENTIAL THE AO IS DIRECTED TO CHARGE INTERES T AS PER PROVISIONS OF LAW. 22. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ITA NO. 4708/M/13 A.Y. 2007-08 REVENUES APPEAL ALONG WITH ITA NO. 4322/M/13 ASSESSEES APPEAL FOR A.Y. 2008-0 9 23. THE SOLE GRIEVANCE OF THE REVENUE IS THAT THE L D. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 5.90 CRORES HOLDING TH AT THE TRANSACTIONS PERTAIN TO A.Y. 2007-08. CONSEQUENT TO SUCH FINDING OF THE LD. CIT(A) THE ADDITIONS HAVE BEEN CONFIRMED IN A.Y. 2008-09 F OR WHICH THE ASSESSEE IS IN APPEAL. THEREFORE OUR DECISION TO T HIS GROUND OF APPEAL OF THE REVENUE WOULD ALSO COVER THE GRIEVANCE OF THE A SSESSEE FOR A.Y. 2008-09. 24. THIS ISSUE HAS BEEN DISCUSSED BY THE AO AT PARA -10 OF HIS ORDER WHEREIN HE HAS MADE REFERENCE TO CERTAIN INCRIMINAT ING PAPERS FOUND AND SHRI VIREN AHUJA 10 SEIZED AT THE TIME OF SEARCH. SCANNED COPIES OF TH E IMPUGNED DOCUMENTS ARE EXHIBITED AT PAGES 15 AND 16 OF THE ASSESSMENT ORDER. THE ASSESSEE WAS CONFRONTED WITH THESE DOCUMENTS AND WAS ALSO AS KED TO EXPLAIN THE NATURE. THE ASSESSEE VIDE HIS SUBMISSION DT. 5.12. 2011 STATED THAT THIS PAGE CONTAINS SOME ROUGH NOTING WITH RESPECT TO CER TAIN PROPOSALS BEING DISCUSSED WITH A PROPOSED BUSINESS PARTNER AND WORK ING OF ESTIMATED PROFITABILITY WITH REFERENCE TO DATES AS WELL. IT IS HAVING NO OTHER FINANCIAL IMPLICATION. THE AO DID NOT ACCEPT THIS E XPLANATION OF THE ASSESSEE AND OBSERVED THAT THIS OFFICE HAS TO INTERPRET THE PAPERS FOR ITS CONTENTS BASED ON THE FACTS AND FIGURES. THE AO PROCEEDED BY HOLDING THAT RS. 5.90 CRORES IS PAID BY THE ASSESSEE TO SHR I VIKRAM AGARWAL AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. 25. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A). IT WAS STRONGLY CONTENDED BEFORE THE LD. CIT(A) THAT THE I MPUGNED DOCUMENT IS NOTHING BUT A DUMB DOCUMENT ON THE BASIS OF WHICH N O ADDITION CAN BE MADE. STRONG RELIANCE WAS PLACED ON THE DECISION O F THE TRIBUNAL IN THE CASE OF PRATIMA EDUCATIONAL SOCIETY 561 (AT) 20 (H YD). AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS THE LD. CIT(A) OBSERVED THAT THE DATES OF THE TRANSACTION REFLECTED IN THE SEIZE D DOCUMENT DO NOT PERTAIN TO A.Y. 2007-08. THE LD. CIT(A) DELETED TH E IMPUGNED ADDITION FROM THE ASSESSMENT YEAR 2007-08 TO BE CONSIDERED I N A.Y. 2008-09 AND 2009-10. 26. AGGRIEVED BY THIS THE REVENUE IS BEFORE US. 27. THE LD. DR STRONGLY SUPPORTED THE FINDINGS OF T HE AO. 28. THE LD. COUNSEL FOR THE ASSESSEE REITERATED WHA T HAS BEEN STATED BEFORE THE LOWER AUTHORITIES. IT IS THE SAY OF THE LD. COUNSEL THAT MERELY ON THE BASIS OF THESE TWO DOCUMENTS NO ADDITION CA N BE MADE BE IT A.Y. SHRI VIREN AHUJA 11 2007-08 OR 2008-09 OR ANY OTHER ASSESSMENT YEAR. T HE LD. COUNSEL VEHEMENTLY SUBMITTED THAT THE ENTIRE ADDITIONS HAVE BEEN MADE AT THE WHIMS AND SURMISES AND WITHOUT ANY CORROBORATIVE E VIDENCES THEREFORE THE ENTIRE ADDITION NEED TO BE DELETED NOT ONLY FRO M A.Y. 2007-08 BUT ALSO IN A.Y. 2008-09 OR ANY OTHER ASSESSMENT YEARS. 29. HAVING HEARD THE RIVAL SUBMISSIONS WE HAVE CAR EFULLY PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND HAVE GIVEN A TH OUGHTFUL CONSIDERATION TO THE IMPUGNED SEIZED MATERIAL EXHIBITED AT PAGE-1 5 OF THE ASSESSMENT ORDER. DOCUMENT AT PAGE-15 OF THE ASSESSMENT ORDER THERE IS REFERENCE TO SHRI VIKRAMJI CHENNAI. SOME OF THE NOTINGS ARE AS UNDER: CASH 25/6 50.00 08/07 50.00 23/09 200.00 4/12 180.00 22/2 50.00 25/02 25.00 07/03 100.00 TOTAL 575.00 30. THERE IS ANOTHER ENTRY OF RS. 15 LAKHS. DOCUME NT EXHIBITED AT PAGE-16 OF THE ASSESSMENT ORDER AGAIN REFERS TO SHR I VIKRAMJI CHENNAI WITH PROFIT MARGIN 70% AND 30% TO THE ASSESSEE. WE FAILED TO PERSUADE OURSELVES TO GIVE ANY LOGICAL CONCLUSION/FINDING I N RESPECT OF THESE DOCUMENTS ON THE BASIS OF WHICH THE AO HAS MADE THE ADDITION. THERE IS NOT EVEN AN IOTA OF EVIDENCE TO SHOW THAT THE AO HA S MADE AN ENQUIRY FROM THE SAID SHRI VIKRAMJEE AGARWAL. MERELY BECAUS E SOME FIGURES WERE FOUND TO BE WRITTEN IN SOME DOCUMENT THE AO CANNOT EXTRAPOLATE 50 AND INTERPRET 50 AS 50 00 000 575 AS 575 LAKHS WITHOUT ANY SHRI VIREN AHUJA 12 CORROBORATIVE/DEMONSTRATIVE EVIDENCE. WITHOUT THER E BEING ANY CORROBORATIVE EVIDENCE ADDITIONS MADE MERELY ON TH E BASIS OF SOME ILLOGICAL AND IRRELEVANT ENTRY/JOTTING ON A PIECE O F PAPER CANNOT JUSTIFY THE ACTIONS OF THE AO AND OF THE LD. CIT(A). WE THERE FORE DO NOT FIND ANY MERIT IN THE ADDITIONS MADE BY THE AO ON THE BASIS OF THESE DOCUMENTS. WE DIRECT THE AO TO DELETE THE ENTIRE ADDITIONS MAD E ON THE BASIS OF THESE TWO DOCUMENTS. THE APPEAL FILED BY THE REVENUE IS DISMISSED AND APPEAL FO THE ASSESSEE FOR A.Y. 2008-09 IS ALLOWED. 31. AS HELD EARLIER LEVY OF INTEREST IS MANDATORY THOUGH CONSEQUENTIAL WE THEREFORE DIRECT THE AO TO LEVY INTEREST AS PER PROVISIONS OF THE LAW. 32. BEFORE CLOSING IN A.Y. 2008-09 THE ASSESSEE HAS RAISED GROUND NO. 1 TO 5 CHALLENGING THE JURISDICTION OF THE AO IN RESPECT OF THE ASSESSMENT MADE U/S. 143(3) R.W. SECTION 153A OF TH E ACT. THE LD. COUNSEL FOR THE ASSESSEE STATED THAT HE IS NOT PRES SING THESE GROUNDS. GROUND NO. 1 TO 5 ARE ACCORDINGLY DISMISSED AS NOT PRESSED. 33. GROUND NO. 6 RELATES TO THE ADDITION OF RS. 5 C RORES MADE U/S. 68 OF THE ACT. THIS ISSUE HAS BEEN CONSIDERED BY THE AO AT PARA-8 OF HIS ASSESSMENT ORDER WHEREIN HE HAS REFERRED TO SOME IN CRIMINATING PAPER FOUND AT THE TIME OF SEARCH. THE SCANNED COPY OF T HIS PAPER IS AT PAGE-3 OF THE ASSESSMENT ORDER FOR A.Y. 2008-09. THE ASSE SSEE WAS ASKED TO EXPLAIN THE CONTENTS OF THE IMPUGNED PAPER. THE A O OBSERVED THAT THE ASSESSEE COULD NOT EXPLAIN ALL THE TRANSACTIONS OF THE SAID PAPER. THE AO FURTHER OBSERVED THAT THE PAPER CONTAINS CERTAIN EX PENSE DETAILS TOGETHER WITH THE SOURCE THEREOF. THE AO SUMMARIZED THE EXP ENSES AS UNDER: A) BUNGALOW - RS. 4 85 10 347/- B) OTHERS - RS. 6 54 16 175/- C) PUNJAB BIOMASS - RS. 5 35 94 360/- SHRI VIREN AHUJA 13 --------------------------- TOTAL -RS.16 75 20 882/- ============== 33.1. THE AO FURTHER OBSERVED THAT THE SOURCE FOR T HESE EXPENDITURES IS AT RS. 12 CRORES FROM ILFS AND SPICE. THERE IS A R EFERENCE OF RS. 5 CRORES FROM P. ANANDAM WHICH ACCORDING TO THE AO WAS NOT REFLECTED IN THE BOOKS. THE AO FURTHER OBSERVED THAT EXPENSE OF RS. 4 85 10 347/- UNDER THE HEAD BUNGALOIW IS ALSO NOT EXPLAINED. THE AO P RECEDED BY TREATING RS. 5 CRORES AS UNEXPLAINED INCOME OF THE ASSESSEE. 34. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) BUT WITHOUT ANY SUCCESS. 35. BEFORE US THE LD. COUNSEL FOR THE ASSESSEE STA TED THAT THE ENTIRE ADDITION HAS BEEN MADE ON THE BASIS OF A LOOSE PAPE R FOUND AT THE TIME OF SEARCH AND THE AO HAS SIMPLY SURMISED THAT THE AMOU NT REFERRED AFTER THE NAME OF SHRI P. ANANDAM AMOUNTING TO RS. 5 CRORES IS ASSESSEES UNEXPLAINED INCOME. THE LD. COUNSEL PLEADED FOR THE DELETION OF THIS AMOUNT. 36. PER CONTRA THE LD. DR COULD NOT BRING ANYTHING TO SUPPORT THE REVENUE AUTHORITIES AS STATED IN THE RESPECTIVE ORD ERS. 37. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. WE HAVE ALSO GIVEN A THOUGHTFUL CONSIDERATION TO THE IMPUGNED LOOSE PAPER EXHIBITED AT PAGE-3 OF THE ASSESSMENT ORDER. THE SAID PAPER DOES NOT CONTAIN NAME OF THE ASSESSEE ANYWHERE EXCEPT THAT IT WAS FOUND FROM THE PREMISES OF THE ASSESSEE. SECONDLY THE FIGURES WRITTEN IN FRONT OF VARIOUS N AMES IN THE LOOSE PAPER DO NOT DENOTE WHETHER THE ASSESSEE HAS SPENT THESE AMOUNT OR THE ASSESSEE HAS BORROWED THESE AMOUNT. THE AO HAS SIMPLY MENTI ONED THAT RS. 5 SHRI VIREN AHUJA 14 CRORES IN THE NAME OF SHRI P. ANANDAM IS NOT FOUND REFLECTED IN THE BOOKS. HOWEVER IN RESPECT OF OTHER ENTRIES RELATI NG TO RS. 16.75 CRORES THE AO HAS NOT POINTED OUT IN WHOSE BOOKS THESE AMO UNTS HAVE BEEN FOUND TO BE RECORDED. ON THE ONE HAND THE AO HAS CONSIDERED RS. 5 CRORES AS INCOME OF THE ASSESSEE AND ON THE OTHER H AND RS. 4.85 CRORES FOUND TO BE SPENT ON THE BUNGALOW AS OBSERVED BY THE AO WAS NOT TREATED AS UNEXPLAINED INVESTMENT. THE AO CANNOT T AKE TWO DIFFERENT VIEWS ON THE SAME SET OF DOCUMENTS. IT IS CLEAR TH AT THE AO HAS MADE ADDITIONS PURELY ON THE BASIS OF SURMISES AND CONJU NCTURES. WE THEREFORE CANNOT SUSTAIN SUCH ADDITIONS MADE PURELY ON ASSUMP TION WITHOUT THERE BEING ANY CORROBORATIVE EVIDENCE BROUGHT ON RECORD . WE SET ASIDE THE FINDING OF THE LD. CIT(A) AND DIRECT THE AO TO DELE TE THE ADDITION OF RS. 5 CRORES. GROUND NO. 6 FOR A.Y. 2008-09 IS ALLOWED . 38. THE ISSUE RAISED VIDE GROUND NO. 7 ARE DIRECTLY CONNECTED WITH THE ISSUE RAISED IN REVENUES APPEAL FOR A.Y. 2007-08 THEREFORE NEED NO SEPARATE ADJUDICATION. 39. IN THE RESULT THE APPEALS FOR THE ASSESSEE ARE PARTLY ALLOWED AND THAT OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29TH APRIL 2015 SD/- SD/- (I.P. BANSAL ) (N.K. BILLA IYA) /JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; 3 DATED : APRIL 2015 . . ./ RJ SR. PS SHRI VIREN AHUJA 15 !'#$ %$' / COPY OF THE ORDER FORWARDED TO : 1. '% / THE APPELLANT 2. &''% / THE RESPONDENT. 3. 4+ ( ) / THE CIT(A)- 4. 4+ / CIT 5. 567 &+89 89 / DR ITAT MUMBAI 6. 7: / GUARD FILE. / BY ORDER '5+ &+ //TRUE COPY// / (DY./ASSTT. REGISTRAR) / ITAT MUMBAI