TARANNUM ZAFAR KHAN, MUMBAI v. ACIT CC. 43, MUMBAI

ITA 5889/MUM/2009 | 2001-2002
Pronouncement Date: 12-07-2013 | Result: Partly Allowed

Appeal Details

RSA Number 588919914 RSA 2009
Assessee PAN AGBPK8144J
Bench Mumbai
Appeal Number ITA 5889/MUM/2009
Duration Of Justice 3 year(s) 8 month(s) 7 day(s)
Appellant TARANNUM ZAFAR KHAN, MUMBAI
Respondent ACIT CC. 43, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 12-07-2013
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted E
Tribunal Order Date 12-07-2013
Date Of Final Hearing 27-06-2013
Next Hearing Date 27-06-2013
Assessment Year 2001-2002
Appeal Filed On 05-11-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH MUMBAI BEFORE SHRI R.K.GUPTA JM & SHRI N.K.BILLAIYA AM ITA NO S . 5888 TO 5890 / MUM/ 20 0 9 ( ASSESSMENT YEAR S : 2000 - 01 2001 - 02 & 2006 - 07 ) M/S TARANNUM ZA F AR KHAN TANISHQ BUNGLOW NO. 63 MHADA FOUR BUNGLOW ANDHERI (W) MUMBAI - 400 053 VS. A CIT CC 43 MUMBAI PAN/GIR NO. : A GBPK 8144 J ( APPELLANT ) .. ( RESPONDENT ) /ASSESSEE BY : MR. VIPUL JOSHI & MR. NISHIT GANDHI /REVENUE BY : MR. GIR I JA DAYAL DATE OF HEARING : 27 TH JUNE 201 3 DATE OF PRONOUNCEMENT : 12 TH JULY 2013 O R D E R PER SHRI R.K.GUPTA : THIS COMMON ORDER SHALL GOVERN THE DISPOSAL OF THREE APPEALS WHICH HAVE BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LEARNED CIT(A) FOR ASSESSMENT YEARS 2000 - 01 20 01 - 02 & 2006 - 07 RESPECTIVELY. 2 . SINCE COMMON ISSUES ARE INVOLVED IN ALL THE THREE CASES THEREFORE FOR THE SAKE OF CONVENIENCE ALL THE CASES HAVE BEEN HEARD AND DISPOSED OF BY THIS CONSOLIDATED ORDER. 3 . THE ASSESSEE HAS TAKEN ADDITIONAL GROUND FOR AL L THE RELEVANT THREE ASSESSMENT YEARS HERE BEFORE THE TRIBUNAL WHICH IS AS UNDER : - 1. IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW THE ASSESSMENT FRAMED IS BAD ILLEGAL VOID AND WITHOUT JURISDICTION AS THE NECESSARY CONDITIONS FOR ASSUMI NG JURISDICTION ITA NO S . 5888 TO 5890 / 0 9 2 AND/OR FOR INITIATING THE ASSESSMENT AND/OR FOR COMPLETION OF THE ASSESSMENT WERE NOT FULFILLED. 4 . LEARNED AR OF THE ASSESSEE STATED THAT THESE ASSESSMENTS ARE BARRED BY LIMITATION AS THE ASSESSMENTS WERE NOT COMPLETED WITHIN 21 MONTHS F ROM THE END OF THE FINANCIAL YEAR IN WHICH THE SEARCH WAS CONDUCTED. IT WAS FURTHER STATED THAT IN THESE CASES THE SEARCH WAS CONDUCTED ON 29 - 8 - 2005 THEREAFTER NOTICE UNDER SECTION 153A WAS ISSUED. THE ASSESSEE FILED RETURNS IN RESPONSE TO NOTICE UNDER S ECTION 153A. AFTER ISSUING NOTICE UNDER SECTION 143(2) AND 142(1) THE RESPECTIVE ASSESSMENT S WERE COMPLETED ON 31 - 12 - 2007. ON A QUERY FROM THE BENCH THAT THE ASSESSMENTS SEEM TO BE IN TIME AS THEY ARE COMPLETED WITHIN 21 MONTHS FROM THE END OF THE FINANCI AL YEAR IN WHICH THE SEARCH WAS CONDUCTED. AFTER VERIFYING THE FACTS LEARNED AR FAIRLY CONCEDED THAT THESE ASSESSMENT S ARE IN TIME. 5 . IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE WE REJECTED THE CONTENTION OF THE LEARNED AR THAT THESE ASSE SSMENTS ARE BARRED BY LIMITATION BY HOLDING THAT THE ASSESSMENTS WERE COMPLETED BY THE AO ARE IN TIME. 6 . LEARNED AR FURTHER SUBMITTED THAT SINCE NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH THEREFORE THE ASSESSMENT S SO COMPLETED AR E BAD IN LAW WHICH ARE LIABLE TO BE QUASHED. RELIANCE WAS PLACED ON THE DECISION REPORTED IN 23 ITR 766 (TRIB) AND 141 ITD 151 I.E. IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD .. COPIES OF THESE ORDERS HAVE BEEN FILED BY THE LEARNED AR. ITA NO S . 5888 TO 5890 / 0 9 3 7 . IN REPLY LEA RNED DR STATED THAT ON SIMILAR FACTS THE TRIBUNAL IN THE CASE OF SCOPE ( P ) LIMITED (2013) 33 TAXMAN.COM 167 HAS HELD THAT THE AO IS BOUND TO ISSUE NOTICE UNDER SECTION 153A AS THE PROVISION OF SECTION 153A ARE DIFFERENT FROM THE PROVISION OF SECTION 158 BD AND BC. IT WAS FURTHER SUBMITTED THAT THE DECISION ON WHICH RELIANCE HAS BEEN PLACED BY THE LEARNED AR HAVE ALREADY BEEN CONSIDERED BY THIS BENCH. IT WAS FURTHER STATED THAT THE DECISION OF THE HON BLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF ANIL B HATIA AND THE DECISION OF THE SPECIAL BENCH IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD (SUPRA) HAVE BEEN TAKEN INTO CONSIDERATION AND FOUND THAT ON SEARCH CONDUCTED AFTER ENACTING THE PROVISION OF SECTION 153A THE AO IS BOUND TO ISSUE NOTICE TO THE ASS ESSEE THEREFORE THE ASSESSMENT CANNOT BE HELD AS BAD IN LAW. 8 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND CONSIDERED THEM CAREFULLY. AFTER CONSIDERING THE SUBMISSION AND TAKING INTO CONSIDERATION THE DECISIONS ON WHICH THE RELIANCE HAS BEEN PLACED BY BOTH THE PARTIES WE FOUND THAT THE ASSESSMENT SO COMPLETED CANNOT BE HELD AS BAD IN LAW ON THE ISSUE THAT THERE WAS NO MATERIAL FOUND DURING THE COURSE OF SEARCH AS THE ASSESSMENT HAS BEEN COMPLETED UNDER SECTION 153A WHICH IS A NEW PROVISION IN THE LAW BY W HICH IT HAS BEEN PROVIDED THAT THE ASSESSMENT FOR SIX YEARS HAS TO BE COMPLETED INDEPENDENTLY. IF THERE WAS ANY MATERIAL THEN ON THE BASIS OF MATERIAL OR ANY MATERIAL GATHERED AFTER SEARCH WAS TO BE CONSIDERED WHILE COMPUTING THE ASSESSMENT UNDER SECTION 1 53C. ITA NO S . 5888 TO 5890 / 0 9 4 8.1 IN CASE OF SCOPE (P) LIMITED (SUPRA) THE TRIBUNAL AFTER ANALYZING VARIOUS CASE LAWS INCLUDING THE DECISION IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD (SUPRA) AND IN THE CASE OF ANIL BHATIA (SUPRA) ON WHICH RELIANCE HAS BEEN PLACED BY LEARNED AR HAS HELD THAT ONCE THE SEARCH/REQUISITION IS MADE UNDER SECTION 132 OF THE ACT THE AO IS BOUND TO ISSUE NOTICE UNDER SECTION 153A TO THE ASSESSEE TO FURNISH THE RETURN FOR EACH ASSESSMENT YEARS FALLING WITHIN SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SEARCH CONDUCTED OR REQUISITION WAS MADE. CONSEQUENTLY THE AO IS EMPOWERED TO ASSESS OR REASSESS THE TOTAL INCOME OF ALL THESE SIX ASSESSMENT YEARS. ACCORDINGLY THE LEGAL GROUND RAISED BEFORE TH E TRIBUNAL THAT WITHOUT ANY INCRIMINATING MATERIAL ASSESSMENT COMPLETED WAS BAD IN LAW WAS REJECTED BY THE BENCH. 8.2 WE ARE IN AGREEMENT WITH THE FINDING OF THE TRIBUNAL GIVEN IN THE CASE OF SCOPE (P) LTD. (SUPRA) THAT THE AO IS BOUND TO ISSUE NOTICE UN DER SECTION 153A AFTER SEARCH CONDUCTED UNDER SECTION 132 OF THE ACT. ONCE THE NOTICE UNDER SECTION 153A IS ISSUED FOR FILING THE RETURN THEN THE AO HAS TO COMPLETE THE ASSESSMENT OF THE YEARS OF WHICH THE RETURN WAS REQUIRED. IT IS A DIFFERENT MATTER AS TO WHETHER THE ADDITION IS LIABLE TO BE MADE OR NOT ON THE BASIS OF THE MATERIAL FOUND OR OTHERWISE HOWEVER THE ASSESSMENT HAS TO BE COMPLETED. ACCORDINGLY WE HOLD THAT THE AO WAS RIGHT N COMPLETING THE ASSESSMENT UNDER SECTION 153C OF THE ACT . THEREFOR E WE HOLD THAT THE ORDER PASSED BY THE AO ITA NO S . 5888 TO 5890 / 0 9 5 ARE NOT BAD IN LAW. ACCORDINGLY WE REJECT THE LEGAL GROUND FOR ALL THE THREE ASSESSMENT YEARS BEFORE US RAISED BY THE ASSESSEE AFTER ADMITTING THE SAME AS THE GROUND RAISED WAS PURELY A LEGAL GROUND. 9. NOW WE WILL TAKE UP THE APPEALS OF THE ASSESSEE FOR ALL THE THREE RELEVANT ASSESSMENT YEARS ON MERIT. 10 . IN APPEAL OF THE ASSESSEE I.E. ITA NO. 5888/M/2009 FILED FOR THE ASSESSMENT YEAR 2000 - 01 GROUNDS NO. 1 TO 3 ARE AGAINST CONFIRMING THE ADDITION OF RS. 7 00 0 00/ - RECEIVED AS GIFT FROM FRIEND OF THE ASSESSEE MR. SUJIT KUMAR SINGH WHO IS NRI BUSINESSMAN IN RUSSIA HAVING IMMENSE WEALTH AS PROFESSIONAL RECEIPT ADDITION OF RS.5 LAKHS RECEIVED AS GIFT FROM ANOTHER FRIEND SHRI T.R.IRANI WHO IS A BUILDER IN MUMBAI AND CONFIRMING THE ADDITION OF RS. 4 LAKHS TAKEN AS LOAN FROM MR. T.R.IRANI RESPECTIVELY. 10.1 THE FACTS IN SUCCINCT ARE THAT THE ASSESSEE ENGAGED IN THE PROFESSION OF DANCE PROFESSION WITH CERTAIN RESTAURANT/DANCE BAR. A SEARCH AND SEIZURE ACTION UNDE R SECTION 132 OF THE ACT WAS CONDUCTED AT THE ASSESSEES RESIDENCE ON 29 - 08 - 2005 AND CASH OF RS. 22 77 100/ - AND JEWELLERY OF RS. 18 10 627/ - WERE FOUND OUT OF WHICH UNEXPLAINED CASH OF RS. 22 LAK H S AND UNEXPLAINED JEWELLERY VALUED AT RS. 12 24 339/ - WERE SEI ZED. NOTICE UNDER SECTION 153A W AS ISSUE D ON 16 - 2 - 2006 AND ASSESSEE FURNISHED A LETTER ON 29 - 3 - 2006 STATING THAT THE RETURN FILED ORIGINALLY ON 3 - 10 - 2000 BE TREATED AS A RETURN FILED IN RESPONSE TO THE SAID NOTICE UNDER SECTION 153A OF THE ACT. THEREAFTER ITA NO S . 5888 TO 5890 / 0 9 6 NOTICE S UNDER SECTION 143(2) AND 142(1) WERE ISSUED FOR ASSUMING THE JURISDICTION AND FOR THE PURPOSE OF COMPLETION OF ASSESSMENT. IN ORIGINAL RETURN THE ASSESSEE HAS SHOWN INCOME OF RS.5 35 022/ - . DURING THE ASSESSMENT PROCEEDING THE ASSESSEE WAS ALLOW ED OPPORTUNITY TO EXPLAIN HER CASE AND VARIOUS DETAILS WERE ALSO ASKED FOR. FROM THE BALANCE SHEET THE AO NOTICED THAT THE ASSESSEE HAS RECEIVED GIFT S OF RS. 7 LAKHS AND 5 LAKHS FROM MR. SUJIT KUMAR SINGH & MR. T.R.IRANI RESPECTIVELY AND ALSO RECEIVED LOA N OF RS. 4 LAKHS FROM MR. T.R.IRANI. THE ASSESSEE WAS REQUIRED TO BE FILED THE NECESSARY DETAILS AND PROOF OF RELATIONSHIP WITH THE DONOR. THE ASSESSEE WAS REQUIRED TO FILE THE PROOF OF VALID GIFT AND ON WHAT OCCASION IT WAS GIVEN. THE DETAILS OF INCOME TAX RECORD OF MR. SUJIT KUMAR SINGH AND MR. T.R.IRANI WERE ALSO REQUIRED TO BE FILED. SOURCE OF INCOME OF SHRI SUJIT KUMAR SINGH AND MR. T.R.IRANI WERE ALSO REQUIRED TO BE FILED. THE GENUINENESS OF TRANSACTION WAS ALSO REQUIRED TO BE PROVED ALONG WITH PHOTOC OPY OF BANK STATEMENT OF SHRI SUJIT KUMAR SINGH AND MR. T.R.IRANI. THE ASSESSEE VIDE REPLY DATED 2 4 - 10 - 2007 SUBMITTED A PHOTOCOPY OF DECLARATION OF GIFT COPY OF PAN CARD OF MR. SUJIT KUMAR SINGH AND CONFIRMATION OF GIFT WAS ALSO FILED. IT WAS STATED THAT SHE IS NOT ABLE TO PRODUCE THEM AS THEY ARE OUT OF STATION AND BUSY IN THEIR PROFESSION. REGARDING LOAN OF RS.4 LAKHS MR. T.R.IRANI AGAIN CONFIRMATION OF THE PARTY ALONG WITH BANK STATEMENT WAS FILED. HOWEVER THE AO WAS NOT SATISFIED AS IN HIS VIEW THE ASSESSEE FAILED TO PROVE THE GENUINENESS OF TRANSACTION OF GIFT AS WELL AS LOAN. THE AO NOTICED THAT THERE IS NO PROOF ITA NO S . 5888 TO 5890 / 0 9 7 OF ANY LOVE AND AFFAIRS BETWEEN THE ASSESSEE AND THE DONOR. ACCORDINGLY THE AO TREATED THE AMOUNT OF RS. 16 LAKHS AS PROFESSIONAL RECEIP T AND ADDED TO THE INCOME OF THE ASSESSEE. 10.2 THE CONTENTIONS RAISED BEFORE THE AO WERE REITERATED BEFORE THE CIT(A). IT WAS EXPLAINED THAT THE ASSESSEE WAS NOT ABLE TO PRODUCE THE AFORESAID PARTIES BECAUSE SHRI SUJIT KUMAR SINGH RESIDES IN RUSSIA AND HE VISITS INDIA ONLY ONCE IN A YEAR AND IN SUCH CIRCUMSTANCES HE COULD NOT BE PRODUCED BEFORE THE AO . REGARDING MR. T.R.IRANI IT WAS SUBMITTED THAT HE ALSO COULD NOT APPEAR BECAUSE OF THE FEAR OF ADVERSE PUBLICITY AND MEDIA PRESSURE. HOWEVER ASSESSEE S UBMITTED BANK DETAILS OF THESE PERSONS AND COPY OF GIFT DEED IN CASE OF MR. SUJIT KUMAR SINGH AND MR. IRANI WHO HAVE GIVEN GIFTS. IN RESPECT OF THE LOAN CONFIRMATION WAS ALSO FILED. IT WAS SUBMITTED THAT THE LOAN WAS GIVEN IN EARLIER YEAR I.E. FOR THE AS SESSMENT YEAR 1999 - 2000 AND THE SAME WAS REPAID ALSO DURING THE YEAR UNDER CONSIDERATION. ALL THE ENTRIES HAVE BEEN MADE IN THE BALANCE SHEET. THEREFORE THE LOAN AMOUNT CANNOT BE ADDED TO THE INCOME OF THE ASSESSEE OF THE YEAR UNDER CONSIDERATION. FURTHER DETAILS WERE FILED BEFORE THE CIT(A) . A REMAND REPORT WAS ALSO SOUGHT BY THE CIT(A) AND THE SAME WAS SENT BY THE AO VIDE LETTER DATED 9 - 2 - 2009. IN THE SAID REMAND REPORT IT WAS STATED BY THE LEARNED AO THAT SUMMONS WERE ISSUED UNDER SECTION 131 IN THE NAM E OF MR. SUJIT KUMAR SINGH HOWEVER THEY HAVE RETURNED BACK. THEREAFTER FRESH SUMMONS WERE ALSO ISSUED AT THE VILLE PARLE MUMBAI ADDRESS WHICH WAS ACCEPTED HOWEVER MR. SUJIT KUMAR SINGH FAILED TO APPEAR BEFORE ITA NO S . 5888 TO 5890 / 0 9 8 THE AO. IT WAS SUBMITTED THAT THE CREDITW ORTHINESS OF MR. SUJIT KUMAR SINGH WAS NOT DOUBTED BECAUSE AS PER STATE MENT OF AFFAIRS SUFFICIENT FUNDS WERE AVAILABLE WITH HIM HOWEVER HE COULD NOT PRODUCE THEREFORE IT WAS SUBMITTED THAT THE GIFT GIVEN CANNOT BE ACCEPTED AS GENUINE. THE ASSESSEE WAS GIVEN A COPY OF REMAND REPORT. THEREAFTER A REJOINDER WAS ALSO FILED. RELIANCE WAS PLACED ON VARIOUS CASE LAWS MENTIONING IN THE ORDER OF THE CIT(A) AT PAGE 11. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PARTIES I.E. AO AS WELL AS THE COUNSEL OF THE A SSESSEE LEARNED CIT(A) FOUND THAT MR. SUJIT KUMAR SINGH IS NOT RELATIVE OF THE ASSESSEE THEREFORE THERE WAS NO OCCASION TO GIVE A SUM OF RS. 7 LAKHS. SIMILARLY HE CONFIRMED THE ADDITION OF RS. 5 LAKHS ALSO ALONG WITH LOAN OF RS. 4 LAKHS. NOW THE ASSESSEE IS IN APPEALS HERE BEFORE THE TRIBUNAL. 10.3 THE CONTENTIONS RAISED BEFORE THE LOWER AUTHORITIES WERE REITERATED HERE BEFORE THE TRIBUNAL . RELIANCE WAS ALSO PLACED ON VARIOUS CASE LAWS. ATTENTION OF THE BENCH WAS DRAWN ON COPY OF WRITTEN SUBMISSION PLAC ED ON RECORD. 10.4 IN REPLY LEARNED DR STRONGLY SUPPORTED THE ORDER OF THE LEARNED CIT(A) . IT WAS FURTHER SUBMITTED THAT THE ASSESSEE IS A FAMOUS BAR DANCER WHO WAS CAUGHT BY POLICE ON THE CRIME OF BETTING IN THE CRICKET MATCHES REPUTATION OF THE ASSE SSEE IS NOT SO WELL THEREFORE THE AO WAS CORRECT IN MAKING THE ADDITION. LEARNED CIT(A) IS ALSO JUSTIFIED IN CONFIRMING THE ORDER OF THE AO. ITA NO S . 5888 TO 5890 / 0 9 9 10.5 WE HAVE HEARD RIVAL SUBMISSION AND CONSIDERED THEM CAREFULLY. AFTER CONSIDERING THE SUBMISSIONS AND TAKIN G INTO CONSIDERATION AND OTHER MATERIALS ON RECORD WE FOUND THAT THE ASSESSEE DESERVE TO SUCCEED ON THESE GROUNDS. FIRSTLY THERE WAS NO MATERIAL BEFORE THE AO TO HOLD THAT ANY INCOME HAS ESCAPED ASSESSMENT. THE RETURN OF INCOME WAS DULY FILED IN TIME. CO PY OF COMPUTATION ALONG WITH BALANCE SHEET WAS ENCLOSED. FROM THE BALANCE SHEET ITSELF THE AO NOTICED THAT CERTAIN GIFTS HAS BEEN RECEIVED BY THE ASSESSEE THEREFORE THE ASSESSEE WAS REQUIRED TO FILE NECESSARY DETAILS TO PROVE THE GIFTS AS WELL AS LOAN ARE GENUINE. NECESSARY DETAILS WERE FILED WHICH WERE NOT FOUND INCORRECT. THE MA IN REASON FOR MAKING ADDITION IS THAT BOTH THE PERSONS I.E. MR. SUJIT KUMAR SINGH AND MR. T.R.IRANI COULD NOT BE PRODUCED FOR VERIFICATION OTHERWISE ALL DETAILS WERE FILED. C APACITY OF BOTH THE PERSONS WAS NOT IN DOUBT AS THEY WERE MEN OF SUBSTANCE. BOTH THE PERSONS WERE ASSESSED TO TAX REGULARLY. ALL THESE DETAILS WERE FILED BEFORE THE AO AND CIT(A) . THE REMAND REPORT WAS ALSO SOUGHT. NO ADVERSE COMMENT WAS RECEIVED BY THE LE ARNED CIT(A) FROM THE AO EXCEPT THAT IN SPITE OF OPPORTUNITY BOTH THE PERSONS COULD NOT BE PRODUCED HENCE THE ADDITION MADE AND SUSTAINED IN OUR CON SIDERED VIEW IS NOT JUSTIFIED AS ALL EVERY DETAILS WERE FILED. THIS IS A CASE OF SEARCH. NO DOUBT THE AO IS BOUND TO COMPLETE THE ASSESSMENT BUT IF ANY ADDITION IS TO BE MADE THAT HAS TO BE MADE ON THE BASIS OF MATERIAL OR ON THE BASIS OF ANY OTHER INFORMATION RECEIVED AFTER THE SEARCH. IN THE PRESENT CASE NO ADVERSE MATERIAL WAS FOUND AGAINST THE ASSESS EE. ITA NO S . 5888 TO 5890 / 0 9 10 AN ENQUIRY WAS MADE ON THE BASIS OF BALANCE SHEET FILED BY THE ASSESSEE HERSELF ALONG WITH THE RETURN. 10.6 LEARNED DR HAS PLACED RELIANCE ON THE DECISION OF THE TRIBUNAL IN THE CASE OF SCOPE (P) LIMITED (SUPRA) BUT IN THIS CASE IT HAS BEEN HELD BY T HE TRIBUNAL BY RECORDING ITS FINDING IN PARA 13 THAT THE AO CANNOT RESORT TO A R OV ING AND FISHING ENQUIRY TO FIND OUT WHETHER ANY INCOME HAS ESCAPED ASSESSMENT DURING THE REASSESSMENT PROCEEDINGS WHEN THERE IS NO INCRIMINATING MATERIAL FOUND OR SEIZED DUR ING THE COURSE OF SEARCH ACTION UNDER SECTION 132. UNDISPUTEDLY THERE WAS NO INCRIMINATING MATERIAL IN RESPECT TO GIFTS OF RS. 7 LAKHS RS. 5 LAKHS AND IN RESPECT OF LOAN OF RS. 4 LAKHS FROM THESE TWO PERSONS MENTIONED ABOVE THEREFORE FOR THESE REASON ALS O NO ADDITION CAN BE MADE. EVEN AND OTHERWISE AS STATED ABOVE THE ASSESSEE HAS FILED EACH AND EVERY DETAIL THEREFORE FOR THESE REASON S ALSO NO ADDITION SHOULD HAVE BEEN MADE. 10.7 IN CASE OF SHRI GURINDER SINGH BAWA DECIDED IN ITA NO. 2075/M/2010 V IDE ORDER DATED 16 - 11 - 2012 THE TRIBUNAL HAS HELD THAT THOUGH THE ASSESSMENT HAS TO BE COMPLETED ON THE BASIS OF RETURN FILED IN RESPONSE TO NOTICE UNDER SECTION 153A HOWEVER NO ADDITION CAN BE MADE WITHOUT ANY MATERIAL. IN THIS CASE ALSO THE AO MADE ASS ESSMENT ON THE BASIS OF INFORMATION/MATERIAL AVAILABLE IN THE RETURN OF INCOME FILED ORIGINALLY. THE TRIBUNAL NOTED THAT THE INFORMATION REGARDING GIFT WAS AVAILABLE IN THE RETURN OF INCOME AS CAPITAL ACCOUNT ITA NO S . 5888 TO 5890 / 0 9 11 HAD BEEN CREDITED BY THE ASSESSEE BY THE AMOUNT OF GIFT. THEREFORE THERE WAS NO MATERIAL WITH THE AO TO MAKE ANY ADDITION. FACTS OF THE CASE IN HAND IS SIMILAR TO THE FACTS IN THE CASE OF SHRI GURINDER SINGH BAWA (SUPRA) AS IN THE PRESENT CASE ALSO THE AO MADE ADDITION ON THE BASIS OF INFORMATION/BA LANCE SHEET FILED ALONG WITH THE RETURN. THERE WAS NO OTHER MATERIAL WITH THE AO TO HOLD THAT THE GIFT WAS NOT GENUINE. INFORMATION IN RESPECT TO GIFTS AND LOAN WERE INCORPORATED IN THE BALANCE SHEET THEREFORE WE ARE OF THE CONSIDERED VIEW THAT THERE IS NO MATERIAL TO HOLD THAT INCOME HAS ESCAPED ASSESSMENT. ACCORDINGLY WE ARE OF THE VIEW THAT THE ADDITION MADE AND SUSTAINED ON ACCOUNT OF GIFTS AND LOAN WAS NOT JUSTIFIED. 10.8 AFTER COMPLETION OF HEARING LEARNED DR HAS FILED A COPY OF DECISION IN THE CASE OF GOPAL LAQL BHADRUKA VS. DCIT REPORTED IN (2012) 346 ITR 106 (AP) WHEREIN THE HON BLE ANDHRA PRADESH HAS HELD THAT THE AO WAS BOUND TO COMPLETE THE ASSESSMENT UNDER SECTION 153A/153C OF THE ACT AND WHILE COMPLETING THE ASSESSMENT THE AO CAN TAKE I NTO CONSIDERATION THE MATERIAL AVAILABLE DURING THE SEARCH AND SEIZURE OPERATION FOR MAKING AN ASSESSMENT OF THE UNDISCLOSED INCOME OF THE ASSESSEE. IN FACT IN THIS CASE THE ASSESSEE HAS ACCEPTED IS HAVING TAKEN OWN MONEY AND THEREFORE THE ADDITION WAS MADE WHICH WAS CONFIRMED BY THE TRIBUNAL AND THEREAFTER BY THE HONBLE HIGH COURT. HOWEVER IN THE PRESENT CASE THERE IS NO SUCH MATERIAL WITH THE AO TO HOLD THAT ANY INCOME HAS ESCAPED THE ASSESSMENT NEITHER THERE WAS ANY OTHER MATERIAL WAS BROUGHT ON RECORD NOR THERE WAS ANY OTHER ITA NO S . 5888 TO 5890 / 0 9 12 INFORMATION EXCEPT THAT THE ENQUIRY MADE ON THE BASIS OF INFORMATION AND DETAILS GIVEN AT THE TIME OF FILING THE RETURN BY THE ASSESSEE ITSELF. THEREFORE THE RATIO OF TH IS DECISION IS NOT APPLICABLE ON THE FACTS OF THE PRESE NT CASE. LEARNED DR ALSO SUPPLIED A COPY OF THE DECISION OF THE TRIBUNAL IN THE CASE OF M/S KEERTHI HOUSING (P) LTD. DECIDED IN ITA NO. 1302 - 1303/HYD/2011 VIDE ORDER DATED 15 - 2 - 2013 . IN THIS CASE THE TRIBUNAL FOLLOWING THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF GOPAL LAL BHADRUKA VS. DCIT (SUPRA) HAS HELD THAT THE AO CAN CONSIDER ANY OTHER MATERIAL WHICH WAS AVAILABLE AT THE TIME OF COMPLETING THE ASSESSMENT. AFTER CONSIDERING THIS DECISION OF THE TRIBUNAL WE FOUND THAT THERE IS A DEC ISION OF HONBLE GUJARAT HIGH COURT WHICH WAS IN FAVOUR OF THE ASSESSEE WHEREIN IT HAS BEEN HELD THAT WITHOUT ANY MATERIAL NO ADDITION CAN BE MADE IN THE CASE OF SEARCH WHILE COMPLETING ASSESSMENT UNDER SECTION 153A. HOWEVER THE DECISION OF HON BLE GUJ ARAT HIGH COURT IN THE CASE OF VUJAYBHAI N. CHANDRANI VS. ACIT REPORTED IN 231 CTR 474 WAS NOT TAKEN INTO CONSIDERATION FOR THE REASON THAT THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF GOPAL LAL BHADRUKA (SUPRA) WAS AVAILABLE BEFORE THE TRIBUNAL. THE DECISION OF THE JURISDICTIONAL HIGH COURT IS BINDING IN THE JURISDICTION OF THE HYDERABAD BENCH . THEREFORE THE HYDERABAD BENCH OF THE TRIBUNAL WAS BOUND TO FOLLOW THE DECISION OF THE H O N BLE ANDHRA PRADESH HIGH COURT. HOWEVER THE CASE IN HA NDS BELONGS TO MUMBAI WHICH FALLS U NDER THE JURISDICTION OF THE HONBLE MUMBAI HIGH COURT . T WO DECISIONS ARE AVAILABLE I.E. THE DECISION OF ITA NO S . 5888 TO 5890 / 0 9 13 HON BLE GUJARAT HIGH COURT AND THE HON BLE ANDHRA PRADESH HIGH COURT. THEN THE DECISION FAVOURING THE ASSESSEE HAS TO BE FOLLOWED AS HELD BY THE HON BLE SUPREME COURT IN THE CASE OF VEGETABLE PRODUCT . THEREFORE FOR THIS REASON ALSO NO ADVERSE INFERENCE CAN BE TAKEN AGAINST THE ASSESSEE. EVEN AND OTHERWISE THE FACTS BEFORE THE HON BLE ANDHRA PRADESH HIGH COURT WERE DI FFERENT FROM THE FACTS OF THE CASE IN HAND AS IN THE CASE IN HAND THERE WAS NO INCRIMINATING MATERIAL OR ANY OTHER INFORMATION GATHERED BY THE AO AT THE TIME OF COMPLETION OF ASSESSMENT. 10.9 IN VIEW OF THE SE FACTS AND CIRCUMSTANCES OF THE CASE WE DELE TE THE ADDITION OF RS. 7 LAKHS RS. 5 LAKHS AND & RS. 4 LAKHS TOTALING TO RS. 16 LAKHS MADE BY THE AO ON ACCOUNT OF GIFTS AND LOAN. GROUNDS NO. 1 TO 3 IN THE APPEAL OF THE ASSESSEE ARE ALLOWED. 11 . GROUND NO. 4 IN APPEAL OF THE ASSESSEE IS AGAINST SUSTAINING THE ADDITION OF RS. 2 67 500/ - OVER AND ABOVE THE AGREED VALUE OF FLAT PURCHASED AT KAMDHENU TOWER LOKHANDWALA . 11.1 DURING THE ASSESSMENT PROCEEDING THE AO ON EXAMINING OF THE BALANCE SHEET FOUND THAT THE ASSESSEE HAS PURCHASED TWO NEW FLATS ONE AT PA NORAMA TOWERS CO - OPERATIVE HOUSING SOCIETY LTD. AND ANOTHER AT KAMDHENU SHOPPING CENTRE CO - OPERATIVE HOUSING SOCIETY LTD.. AS PER TOKEN RECEIPT FOUND IN THE LOCKER THE FLAT IN KAMDHENU SHOPPING CENTRE CO - OPERATIVE HOUSING SOCIETY LTD. WAS PURCHASED AT RS. 18 70 000/ - . THE ASSESSEE WAS REQUIRED TO EXPLAIN THE SOURCE OF ITA NO S . 5888 TO 5890 / 0 9 14 PURCHASE OF THIS FLAT. IN REPLY IT WAS STATED THAT THE ASSESSEE NEGOTIATED FOR TWO FLAT ADJOINING ON THE SAME FLOOR AT KAMDHENU BUILDING AND THE AMOUNT SHOWED ON THE PAPER IN SEIZED MATERIAL AMOUNTING TO RS. 18.70 LACS IS AGREED COST FOR AFORESAID TWO FLAT BUT LATER ON AT PARTICULAR SPUR OF TIME DUE TO SHORTAGE OF FUNDS TRANSACTION DOES NOT MATERIALIZE SO SHE DECIDED TO BUY ONE FLAT AT KAMDHENU BUILDING FOR TOTAL CONSIDERATION OF RS. 9 20 000/ - AND STAMP DUTY OF RS. 32 750/ - ONLY WAS PAID AND THE SAME WAS DISCLOSED IN THE BALANCE SHEET AS ON 31 - 3 - 2000. THE CONTENTION OF THE ASSESSEE WAS FOUND CORRECT. HOWEVER THE AO REFERRED THE MATTER TO THE DVO FOR VALUATION OF THE FLAT WHO VALUED THE PROPERT Y AT RS. 11 87 500/ - . THE ASSESSEE HAS SHOWN THE COST OF RS. 9 20 000/ - . THEREFORE THE AO MADE AN ADDITION OF RS. 2 67 500/ - AS DIFFERENCE BETWEEN THE VALUATION DONE BY THE DVO AND THE VALUE SHOWN BY THE ASSESSEE IN THE BALANCE SHEET. 11.2 LEARNED CIT(A) HAS CONFIRMED THE ACTION OF THE AO. 11.3 AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PARTIES WE FOUND THAT THERE IS NO BASIS FOR MAKING ANY ADDITION OF RS. 2 67 500/ - . THE ASSESSEE HAS DISCLOSED THE AMO UNT OF RS.9 20 000/ - WHEREAS THE DVO VALUED THIS PR OPERTY AT RS. 11 87 500/ - . THIS IS A MINOR DIFFERENCE IN VALUATION. THERE IS NO OTHER EVIDENCE AGAINST THE ASSESSEE THAT THE ASSESSEE HAS PAID OVER AND ABOVE THE AMOUNT SHOWN IN THE BALANCE SHEET THEREFORE WITHOUT ANY MATERIAL OR EVIDENCE THE ADDITION MAD E ONLY ON THE BASIS OF DVOS REPORT IS NOT JUSTIFIED. THIS IS A CASE OF SEARCH. THERE SHOULD BE SOME MATERIAL FOUND AGAINST THE ASSESSEE ITA NO S . 5888 TO 5890 / 0 9 15 DURING THE COURSE OF SEARCH. AS STATED ABOVE THERE WAS NO MATERIAL FOUND AGAINST THE ASSESSEE AND THE ADDITION WAS M ADE ONLY ON THE BASIS OF DVOS REPORT. EVERY TIME THERE MAY BE A DIFFERENCE IN VALUATION OF THE PROPERTY. THEREFORE MERELY ON THE BASIS OF DVOS REPORT IN OUR CONSIDERED VIEW THE ADDITION CANNOT BE MADE IN THE HANDS OF THE ASSESSEE ESPECIALLY IN THE CA SE OF SEARCH. ACCORDINGLY WE DELETE THE ADDITION ALSO. 12 . NOW WE WILL TAKE UP THE APPEAL OF THE ASSESSEE FILED FOR THE ASSESSMENT YEAR 2001 - 2002 I.E ITA NO. 5889/M/2009 WHEREIN THE FIRST ISSUE RELATES TO CONFIRMING THE ADDITION OF RS. 4 LAKHS ON ACCOUN T OF LOAN AND RS.2 50 000/ - ON ACCOUNT OF RENT DEPOSIT OF FLAT. 12.1 BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE ASSESSEE FURNISHED HER RETURN OF INCOME AND ALSO ENCLOSED HER BALANCE SHEET AS ON 31 - 3 - 2001 . DURING THE ASSESSMENT PROCEEDING UNDER SECT ION 153A READ WITH SECTION 143(3)/153D THE AO NOTICED THAT THE ASSESSEE HAS SHOWN LOANS FROM H ER MOTHER MRS. HASINA KHAN AT RS.3 50 000/ - AND HER FATHER MR. ZAFAR KHAN AT RS. 3 LACS RESPECTIVELY. THE ASSESSEE WAS REQUIRED TO EXPLAIN THE SOURCE OF LOAN. IT WAS STATED THAT THE LOAN FROM PARENTS WERE NOT TAKEN AND IN FACT THE LOAN OF RS. 4 LAKHS WAS TAKEN IN EARLIER YEAR AND RS. 2 50 000/ - WAS DEPOSITED IN THE BANK ON ACCOUNT OF LOAN OF FLAT. IT WAS EXPLAINED THAT DUE TO MISTAKE OF CHARTERED ACCOUNTANT AND THE AUTHORIZED REPRESENTATIVE THE BALANCE SHEET PREPARED WAS NOT PREPARED PROPERLY. AFTER EXAMINING THE ARGUMENTS ITA NO S . 5888 TO 5890 / 0 9 16 AND FACTS OF THE CASE THE AO NOTICED THAT THE ASSESSEE IS NOT ABLE TO PROVE THE CORRECTNESS BY FILING ANY DOCUMENTARY EVIDENCE. IT SEEMS A CHANG E OF OPINION AT THE TIME OF POST SEARCH ASSESSMENT SUITING TO CIRCUMSTANCES. IT W AS NOTED THAT THERE WERE NO ENTRIES IN THE BANK OF ANY SUCH DEPOSIT RECEIVED FROM THE TENANT OR FROM THE SAID MR. T.R.IRANI FROM WHOM THE LOAN WAS SHOWN IN THE EARLIER YEAR. A CCORDINGLY THE ADDITION OF RS. 3 50 000/ - AND RS. 3 LACS WAS MADE BY THE AO. 12.2 IN APPEAL LEARNED CIT(A) HAS CONFIRMED THE ACTION OF THE AO. 12.3 LEARNED AR REITERATED THE ARGUMENTS TAKEN BEFORE THE CIT(A) . ATTENTION OF THE BENCH WAS DRAWN ON COPY OF T HE WRITTEN SUBMISSION PLACED IN THE COMPILATION FILED BEFORE THE CIT(A). FURTHER RELIANCE WAS PLACED ON WRITTEN SUBMISSION FILED BEFORE THE TRIBUNAL . 12.4 ON THE OTHER HAND LEARNED DR STRONGLY PLACED RELIANCE ON THE ORDER OF LEARNED CIT(A) . 1 2. 5 AFTER CO NSIDERING THE SUBMISSION AND PERUSING THE MATERIAL ON RECOR D WE FIND THAT THE ASSESSEE DESERVE TO SUCCEED ON THESE GROUNDS. IT IS NOTED THAT THE ORIGINAL RETURN WAS FILED UNDER SECTION 139(1) ON 31 - 3 - 2002 DECLARING THE TOTAL INCOME OF RS. 15 38 913/ - . THE RETURN WAS ACCOMPANIED BY INCOME AND EXPENDITURE ACCOUNT BALANCE SHEET AND CAPITAL ACCOUNT. THEREAFTER THE SAME RETURN WAS FILED IN RESPONSE TO NOTICE UNDER SECTION 153 A. AFTER EXAMINING ALL THESE DETAILS AND SUBMISSION ALONG WITH THE ORDER OF THE LEARNE D CIT(A) WE FIND THAT THE LEARNED AO AS WELL AS LEARNED CIT(A) WERE NOT JUSTIFIED IN NOT TAKING INTO CONSIDERATION THE EXPLANATION OF THE ASSESSEE THAT NO ITA NO S . 5888 TO 5890 / 0 9 17 LOAN WAS TAKEN FROM THE MOTHER AND FATHER AS THE LOAN OF RS. 4 LAKHS WAS TAKEN FROM SHRI T.R.IRANI IN THE YEAR 1999 - 2000 . IN VIEW OF THE ABOVE FACTS WE ARE OF THE VIEW THAT THE ADDITION MADE BY THE AO WHICH IS CONFIRMED BY THE LEARNED CIT(A) IS NOT JUSTIFIED. CORRECTED BALANCE SHEET AND EXPLANATION WAS FILED DURING THE ASSESSMENT PROCEEDING WHICH SHOU LD HAVE BEEN EXAMINED BY THE AO. ACCORDINGLY WE HOLD THAT THE LOAN OF RS. 4 LAKHS TAKEN FROM MR. T.R. IRANI WHICH WAS TAKEN IN THE ASSESSMENT YEAR 1999 - 2000 IS NOT JUSTIFIED IN MAKING THE ADDITION IN THE YEAR UNDER CONSIDERATION. ACCORDINGLY WE DELETE T HE ADDITION OF RS. 4 LAKHS. 12.6 IN REGARD TO ADDITION OF RS. 2 50 000/ - IT WAS EXPLAINED THAT THIS WAS ON ACCOUNT OF RENT AND SECURITY DEPOSIT AGAINST THE FLAT WHICH WAS RENTED OUT BY THE ASSES SEE. A COPY OF LEAVE AND LICENCE AGREEMENT IS PLACED AT PAGE 23. SINCE THERE WAS WRONG ENTRY IN THE BALANCE SHEET AS THE AMOUNT WAS SHOWN AS LOAN FROM FATHER WHEREAS THE SAME WAS DEPOSITED OUT OF SECURITY AND RENT RECEIVED AGAINST THE FLAT . IT IS FURTHER SEEN THAT IN COMPUTATION OF INCOME THE ASSESSEE HAS SHOWN TH E RENTAL INCOME. THEREFORE NO DOUBT REMAINS THAT THE ASSESSEE HAS RECEIVED RENTAL INCOME AS WELL AS SECURITY WHICH WAS DEPOSITED IN THE BANK. THEREFORE THE ADDITION OF RS. 2 50 000/ - WAS NOT JUSTIFIED. IF BY ANY REASON AN INCORRECT ENTRY HAS BEEN MADE I N THE BALANCE SHEET HOWEVER ON A LATER STAGE THE SAME HAS BEEN EXPLAINED AND THAT EXPLANATION W AS NOT FOUND INCORRECT THEN IN OUR VIEW THE EXPLANATION IS LIABLE TO BE ACCEPTED. IN VIEW OF THESE CIRCUMSTANCES WE DELETE THE ITA NO S . 5888 TO 5890 / 0 9 18 REMAINING ADDITION OF RS. 2 50 000/ - ALSO . IN THIS WAY THE ENTIRE ADDITION OF RS. 6 50 000/ - IS HEREBY DELETED. 13 . THE NEXT ISSUE IS IN RESPECT TO ADDITION OF RS. 6 07 200/ - MADE ON THE BASIS OF DVOS REPORT. 13.1 DURING THE ASSESSMENT PROCEEDING THE AO FOUND THAT THE ASSESSEE HAS PURCHASED A FALT AT RS. 27 LAKHS. THE AO REFERRED THE MATTER TO DVO UNDER SECTION 142A OF THE ACT WHO VALUED THE PROPERTY AT RS. 33 07 200/ - . THE ASSESSEE HAS SHOWN INVESTMENT OF RS. 27 LAKHS THE DIFFERENCE OF RS. 6 07 200/ - WAS ADDED BY THE AO ON ACCOUNT O F INVESTMENT FROM UNEXPLAINED SOURCES. 13.2 IN APPEAL LEARNED CIT(A) HAS CONFIRMED THE SAME. 13.3 AFTER CONSIDERING THE SUBMISSION WE FIND THAT THIS ADDITION IS ALSO LIABLE TO BE DELETED. FIRSTLY THERE WAS NO MATERIAL DURING THE COURSE OF SEARCH TO HO LD THAT THE ASSESSEE HAS MADE UNEXPLAINED INVESTMENT OF RS. 6 07 200/ - . ONLY ON THE BASIS OF DIFFERENT IN THE DVOS REPORT THE ADDITION HAS BEEN MADE WHICH IS NOT PERMISSIBLE IN CASE OF SEARCH . THIS IS NOT A CASE OF THE DEPARTMENT THAT SOME EVIDENCE HAS B EEN FOUND SUGGESTING THAT THE ASSESSEE HAS MADE ANY INVESTMENT OVER AND ABOVE THE DISCLOSED AMOUNT. SIMILAR ADDITION OF RS. 2 LAKHS OR ODD WAS MADE IN THE IMMEDIATELY PRECEDING YEAR AND THE SAME HAS BEEN DELETED BY US. HENCE IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE AND IN VIEW OF THE REASONING GIVEN WHILE DISPOSING THE SIMILAR ISSUE FOR ASSESSMENT YEAR 2000 - 01 WE DELETE THIS ADDITION OF RS. 6 07 200/ - FOR THE YEAR UNDER CONSIDERATION ALSO. ITA NO S . 5888 TO 5890 / 0 9 19 14 . REMAINING ISSUE IS IN RESPECT OF ADDITION OF RS. 3 37 341/ - MADE BY THE AO ON ACCOUNT OF GIFT RECEIVED FROM MR. SUJIT KUMAR SINGH . 14.1 AFTER EXAMINING THE BALANCE SHEET THE AO FOUND THAT THE ASSESSEE HAS SHOWN GIFT OF RS. 3 37 341/ - FROM ONE SHRI SUJIT KUMAR SINGH. THE ASSESSEE WAS REQUIRED TO PRODUCE T HE PERSON AND TO FILE NECESSARY DETAILS. THE CONFIRMATION OF LOAN WAS FILED CONFIRMATION OF BANK DETAILS WERE ALSO GIVEN. SINCE THE ASSESSEE COULD NOT PRODUCE THE PERSON THEREFORE THE AO REJECTED THE EXPLANATION AND MADE THE ADDITION. 14.2 LEARNED CIT(A ) IN APPEAL HAS ALSO CONFIRMED THE ACTION OF THE AO AFTER TAKING INTO CONSIDERATION THE REMAND REPORT SENT BY THE AO . 14.3 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ALONG WITH THE ORDERS OF THE AUTHORITIES BELOW AND OTHER DETAILS AND FOUND THAT THE ONUS LAY UPON THE ASSESSEE HAS BEEN DULY DISCHARGED. EACH AND EVERY DETAIL PROVING THE GIFT GENUINE WAS FILED. THE AMOUNT OF GIFT IS DULY INCORPORATED IN THE BALANCE SHEET ENCLOSED ALONG WITH THE RETURN OF INCOME. THERE WAS NO MATERIAL FOUND DURING THE COURSE O F SEARCH TO HOLD THAT THE GIFT RECEIVED BY THE ASSESSEE WAS NOT GENUINE. SIMILAR ADDITION ON ACCOUNT OF GIFT OF RS. 5 LAKHS WAS MADE FOR ASSESSMENT YEAR 2000 - 01. AFTER DISCUSSING THE ISSUE IN DETAIL WE HAVE DELETED THE SIMILAR ADDITION MADE FOR ASSESSMENT YEAR 2000 - 01. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE AND IN VIEW OF THE REASONING GIVEN WHILE DISPOSING THE ISSUE FOR ASSESSMENT YEAR 2000 - 01 WE DELETE THE ADDITION FOR THE YEAR UNDER CONSIDERATION ALSO. ITA NO S . 5888 TO 5890 / 0 9 20 15 . NOW WE WILL TAKE UP APPEAL I.E. ITA NO. 5890/M/2009 FILED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2006 - 07 WHEREIN THE FIRST ISSUE RELATES TO CONFIRMING THE ADDITION OF RS. 77 100/ - ON ACCOUNT OF CASH SEIZED. 15.1 FOR THE YEAR UNDER CONSIDERATION ALSO THE RETURN WAS FILED ON 29 - 3 - 200 6 FOR A PERIOD FROM 1 - 4 - 2005 TO 29 - 8 - 2005. THEREAFTER THE NOTICE UNDER SECTION 148 WAS ISSUED. IN RESPONSE TO NOTICE UNDER SECTION 148 RETURN DECLARING RETURN OF RS. 25 94 496/ - WAS FILED ON 6 - 9 - 2007. ORIGINALLY THE DECLARED INCOME WAS RS. 25 71 414/ - . AT THE TIME OF SEARCH CASH OF RS. 22 77 100/ - AND JEWELLERY OF RS. 15 77 988/ - WAS FOUND AT THE RESIDENCE OF ASSESSEE. IN ADDITION TO THAT JEWELLERY OF RS. 2 32 639/ - WAS FOUND AND SEIZED FROM THE LOCKER. THE ASSESSEE WAS REQUIRED TO EXPLAIN THE SAME. THE AO NO TICED THAT THE ASSESSEE HAS ALREADY SHOWN A SUM OF RS. 2 2 LAKHS IN HER RETURN OF INCOME FILED ON 6 - 9 - 2007 . SHE HAS NOT OFFERED ANY EXPLANATION IN RESPECT TO REMAINING AMOUNT OF RS. 77 100/ - . THEREFORE THE SAME BE ADDED. 15.2 LEARNED CIT(A) ALSO CONFIRMED THE ACTION OF THE AO. 15.3 AFTER CONSIDERING THE SUBMISSION AND PERUSING THE MATERIAL ON RECORD WE FOUND THAT THE CASH IN HAND AVAILABLE WITH THE ASSESSEE WAS NOT TAKEN INTO CONSIDERATION BY THE AO OR BY THE CIT(A). THE UNEXPLAINED AMOUNT OF RS. 22 LAKHS WAS ALREADY DISCLOSED IN THE RETURN. THE PETTY AMOUNT OF RS. 77 100/ - WAS NOT CONSIDERED AS AVAILABLE WITH THE ASSESSEE. THE ASSESSEE IS FILING REGULAR RETURN OF INCOME. THE CASH ITA NO S . 5888 TO 5890 / 0 9 21 OF RS. 77 100/ - OUT OF INCOME OF THE YEAR AS WELL AS FROM THE EARLIER YEARS IS NOT SUCH AN AMOUNT WHICH CAN BE SAID THAT WAS NOT AVAILABLE WITH THE ASSESSEE. THEREFORE KEEPING IN MIND THE SMALLNESS OF THE AMOUNT AND KEEPING IN MIND THAT THE ASSESSEE HAS ALREADY SHOWN INCOME OF RS. 22 LAKHS ON ACCOUNT OF CASH WE DELETE THE ADDITION OF RS. 77 100/ - . 16 . THE NEXT ISSUE IS AGAINST CONFIRMING THE ADDITION OF RS.2 71 915/ - ON THE BASIS OF VALUATION IN RESPECT OF JEWELLERY ETC. 16.1 THE TOTAL JEWELLERY OF RS. 18 10 627/ - WAS FOUND DURING THE COURSE OF SEARCH. THE AO NOTED THAT THE ASSESSE E HAS SHOWN JEWELLERY IN DIFFERENT ASSESSMENT YEAR FROM ASSESSMENT YEAR 2000 - 01 TO ASSESSMENT YEAR 2006 - 07 AT RS. 15 38 712/ - . REMAINING JEWELLERY OF RS. 2 71 95/ - WAS TREATED AS UNEXPLAINED. ACCORDINGLY ADDITION WAS MADE. 16.2 THE CIT(A) HAS ALSO CONFIRM ED THE ADDITION MADE BY THE AO. 16.3 AFTER CONSIDERING THE SUBMISSION AND PERUSING THE MATERIAL ON RECORD WE FIND THAT AS PER SEIZED MATERIAL THE WEIGHT OF GOLD JEWELLERY WAS OF 1073.53 GMS WHEREAS AS PER VALUATION REPORT IT WAS 837.90 GMS. MOST OF T HE BILLS PERTAINING TO JEWELLERY ARE RELATING TO EARLIER YEAR FOR WHICH THE ADDITIONS HAVE ALREADY BEEN MADE IN THE EARLIER YEARS. THE ADDITION OF RS. 2 71 915/ - WAS MADE ONLY ON THE BASIS OF VALUERS REPORT OTHERWISE THERE IS NO DIFFERENCE IN ITEMS OF J EWELLERY FOR WHICH THE ADDITIONS HAVE ALREADY BEEN MADE IN EARLIER YEARS. THEREFORE WE ITA NO S . 5888 TO 5890 / 0 9 22 ARE OF THE VIEW THAT ON THE BASIS OF DIFFERENCE IN VALUATION REPORT THE ADDITION SHOULD NOT HAVE BEEN MADE. THE QUANTITY OF JEWELLEY HAS ALREADY BEEN SHOWN IN THE EAR LIER YEARS. THERE IS NO DIFFERENCE IN QUANTITY OF ITEMS AS THE DIFFERENCE IS ONLY ON ACCOUNT OF THE VALUATION REPORT. ACCORDINGLY WE DELETE THE ADDITION OF RS. 2 71 915/ - . 17 . THE NEXT ISSUE RELATES TO CONFIRMING THE ADDITION OF RS. 9 057/ - ON ACCOUNT OF SHOPPERS STO P CARD. 18 . DIFFERENT CREDIT CARDS WERE FOUND DURING THE SEARCH PERIOD. DURING THE ASSESSMENT PROCEEDING IT WAS SEEN THAT THE ASSESSEE HAS MADE SEVERAL EXPENSES THROUGH CREDIT CARD I.E. THROUGH HSBC AT RS. 1 27 988/ - CITI BANK CREDIT CARD AT RS. 5 224/ - AND SHOPPERS STOP CARD AT RS.9 057/ - . THE AO FOUND THAT ALL THE EXPENSES ARE VERIFIABLE EXCEPT THE EXPENSES MADE THROUGH SHOPPERS STOP CARD WHICH WAS NOT MADE THROUGH THE DISCLOSED BANK ACCOUNT OF THE ASSESSEE. ACCORDINGLY HE MADE THIS ADDITIO N. 18.1 LEARNED CIT(A) HAS ALSO CONFIRMED THE SAME. 18.2 AFTER CONSIDERING THE SUBMISSION AND PERUSING THE MATERIAL ON RECORD WE FIND THAT IN FACT ALL THE EXPENSES HAVE BEEN ACCOUNTED FOR IN THE BANK ACCOUNT. THE ASSESSEE GOT DISCOUNT ON PURCHASE MADE T HROUGH SHOPPERS STO P AND THIS DISCOUNT HAS BEEN ADDED BY THE AO BY NOT EXAMINING THE CASE IN PROPER MANNER. THEREFORE WE ARE OF THE VIEW THAT THE ADDITION MADE AND CONFIRMED IS NOT JUSTIFIED. ITA NO S . 5888 TO 5890 / 0 9 23 18.3 ONE MORE REASON IS THERE THAT MOST OF THE ADDITIONS HAVE BEEN MADE IN THE ROUTINE MANNER AS THE ISSUE HAS NOT BEEN DISCUSSED IN RIGHT PERSPECTIVE IN TAKING INTO CONSIDERATION THE SUBMISSION AND OTHER EVIDENCES FILED. IT IS ALSO A MATTER OF FACT THAT NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH AS ONLY DURING T HE ASSESSMENT PROCEEDING THESE EXPENSES WERE FOUND MADE THROUGH CREDIT CARDS. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE WE DELETE THE ADDITION OF RS. 9 057/ - . 19 . THE NEXT ISSUE RELATES TO CONFIRMING THE ADDITION OF RS. 4 3 6 506/ - TAKEN LOAN FROM SHRI SUJIT KUMAR SINGH WHO IS AN NRI BUSINESSMEN IN RUSSIA. 19.1 ON EXAMINATION OF BALANCE SHEET THE ASSESSEE WAS REQUIRED TO FILE DETAILS IN RESPECT TO LOANS FROM SHRI SUJIT KUMAR SINGH OF RS. 4 36 506/ - . THE LOAN CONFIRMATION AN D OTHER DETAILS WERE FILED HOWEVER SHRI SUJIT KUMAR SINGH COULD NOT BE PRODUCED AS HE WAS AN NRI. THE AO DID NOT ACCEPT THE EXPLANATION. ACCORDINGLY HE MADE ADDITION OF RS. 4 36 506/ - . 19.2 CIT(A) HAS ALSO CONFIRMED THE SAME. 19.3 AFTER CONSIDERING TH E SUBMISSION AND PERUSING THE MATERIAL ON RECORD WE FIND THAT THIS ADDITION IS ALSO LIABLE TO BE DELETED. FIRSTLY NO INCRIMINATING MATERIAL WAS FOUND TO HOLD THAT ANY BOGUS LOAN HA S BEEN SHOWN BY THE ASSESSEE. THE LOAN TAKEN FROM SHRI SUJIT KUMAR SINGH WHO IS A FRIEND OF THE ASSESSEE WAS SHOWN IN THE BALANCE SHEET FILED ITA NO S . 5888 TO 5890 / 0 9 24 ALONG WITH THE RETURN AND CONFIRMATION OF THE SAME WAS FILED. ONLY ON THE BASIS OF THAT SHRI SUJIT KUMAR SINGH COULD NOT BE PRODUCED THE ADDITION WAS MADE AND SUSTAINED. THE LOAN WAS T AKEN THROUGH PROPER BANKING CHANNEL AS 9 975 DOLLARS WERE RECEIVED WHICH WAS CONVERTED INTO INDIAN RUPEES AND WERE SHOWN IN THE BALANCE SHEET. THEREFORE THERE IS NO MATERIAL TO HOLD THAT THE ASSESSEE HAS SHOWN BOGUS LOAN . SIMILAR ADDITION WAS MADE FOR AS SESSMENT YE A R 2000 - 01 AND AFTER DISCUSSING THE ISSUE IN DETAIL WE HAVE DELETED THE LOAN SHONW BY THE ASSESSEE. FOR THE SAME REASONING AND IN VIEW OF THE DISCUSSION MADE ABOVE WE DELETE THIS ADDITION ALSO. 20 . THE NEXT ISSUE RELATES TO CONFIRMING THE AD DITION OF RS. 11 000/ - ON ACCOUNT OF CREDIT CARD PAYMENT MADE BY THE MOTHER OF THE ASSESSEE. 20.1 AS PER THE SEIZED MATERIAL I.E. SERIAL NO. 27 & 31 OF ANNEXURE - A/1 IT WAS FOUND THAT THE ASSESSEE HAS MADE A PAYMENT AMOUNTING TO RS. 11 000/ - . SHE WAS ASKED T O EXPLAIN THE SOURCE OF PAYMENT. IN REPLY THE ASSESSEE HAS STATED THAT THE PAYMENT WAS MADE BY HER MOTHER BUT THE BANK DEPOSIT SLIPS SHOW THAT THE PAYMENTS HAVE BEEN MADE AND SIGNED BY THE ASSESSEE HERSELF. ACCORDINGLY THE AO REJECTED THE CONTENTION OF T HE ASSESSEE AND MADE THE ADDITION OF RS. 11 000/ - 20.2 LEARNED CIT(A) HAS ALSO CONFIRMED THE ACTION OF THE AO. 20.3 AFTER EXAMINING THE SUBMISSION AND THE ORDERS OF THE AUTHORITIES BELOW IT IS NOT CLEAR THAT HOW THE PAYMENT OF RS. 11 000/ - WAS MADE. IT ITA NO S . 5888 TO 5890 / 0 9 25 IS STATED THAT THE PAYMENT WAS MADE THROUGH CREDIT CARD OF HER MOTHER. THIS ASPECT HAS NOT BEEN EXAMINED THEREFORE TO MEET THE END OF JUSTICE WE ARE OF THE VIEW THAT THIS MATTER SHOULD GO BACK TO THE FILE OF THE AO TO EXAMINE THIS ISSUE AFRESH. WE ORDER AC CORDINGLY. 21 . REMAINING ISSUE IS IN RESPECT TO CONFIRMING THE ADDITION OF RS. 75 000/ - ON ACCOUNT OF BETTING INCOME. 21.1 CERTAIN DOCUMENTS WERE FOUND SHOWING CERTAIN BETTING ACTIVITIES BEING DONE BY THE ASSESSEE. A SURVEY ACTION WAS CONDUCTED IN CASE OF MR. MILIND D NANUD AND SHRI PRADIP KUMAR PARMAR WHO ACCEPTED THAT THE ASSESSEE WAS INVOLVING IN BETTING ACTIVITY. IT IS FURTHER NOTED THAT IN THE ORDER OF THE AO THAT DURING SEARCH PROCEEDING THE STATEMENT UNDER SECTION 132 WAS RECORDED AND THE ASSESSEE HAS ACCEPTED THE BETTING ACTIVITY. AFTER TAKING INTO CONSIDERATION ALL THESE FACTS THE AO CALCULATED THE BETTING AMOUNT AND FOUND THAT A SUM OF RS. 75 000/ - HAS BEEN TRANSACTED IN BETTING TRANSACTIONS. ACCORDINGLY AN ADDITION OF RS. 75 000/ - WAS MADE WHI CH HAS ALSO BEEN CONFIRMED BY THE LEARNED CIT(A) IN APPEAL. 21.2 AFTER CONSIDERING THE SUBMISSION AND PERUSING THE MATERIAL ON RECORD WE FIND THAT CERTAIN MATERIAL WAS FOUND WHICH SHOWS THAT THERE WAS SOME BETTING ACTIVITY DONE. THE ASSESSEE WAS NOT ABL E TO EXPLAIN THESE FACTS IN THE PAPER FOUND DURING THE SEARCH. THEREFORE WE ARE OF THE CONSIDERED VIEW THAT THE ADDITION MADE BY THE AO AND CONFIRMED BY THE CIT(A) WAS JUSTIFIED. ACCORDINGLY WE CONFIRM THIS ADDITION. ITA NO S . 5888 TO 5890 / 0 9 26 22 . IN THE RESULT APPEAL FOR THE A SSESSMENT YEAR S 2000 - 01 & 2001 - 02 (I.E. ITA NO. 5888 &5889 /M/2009) ARE ALLOWED AND APPEAL FOR THE ASSESSMENT YEAR 2006 - 07 (I.E.ITA NO. 5890/M/2009) IS ALLOWED PARTLY AND PARTLY FOR STATISTICAL PURPOSES. 2000 - 01 & 20 01 - 02 (I.E. ITA NO.5888&5889/M/2009) 2006 - 07 (I.E. ITA NO.5890/M/2009) ORDER PRONOUNCED IN THE OPEN COURT ON THIS 12TH DAY OF JULY 2013 . SD/ - ( ) ( N.K.BILLAIYA ) SD/ - ( ) ( R.K.GUPTA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 12/07 /2013 . /PKM PS COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A) MUMBAI. 4. / CIT 5. / DR ITAT MUMBAI 6. GUARD FILE. //TRUE COPY// / BY ORDER ( ASSTT. REGISTRAR) / ITAT MUMBAI