M/s. Kejals Furnishings,, Pune v. ACIT, Cir.-11(2),, Pune

ITA 928/PUN/2011 | 2000-2001
Pronouncement Date: 28-11-2014 | Result: Allowed

Appeal Details

RSA Number 92824514 RSA 2011
Assessee PAN AABFK6603Q
Bench Pune
Appeal Number ITA 928/PUN/2011
Duration Of Justice 3 year(s) 4 month(s) 29 day(s)
Appellant M/s. Kejals Furnishings,, Pune
Respondent ACIT, Cir.-11(2),, Pune
Appeal Type Income Tax Appeal
Pronouncement Date 28-11-2014
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 28-11-2014
Date Of Final Hearing 16-12-2013
Next Hearing Date 16-12-2013
Assessment Year 2000-2001
Appeal Filed On 29-06-2011
Judgment Text
INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A PUNE BEFORE SHRI R.S. PADVEKAR JUDICIAL MEMBER AND SHRI R.K. PANDA ACCOUNTANT MEMBER ITA NO. 928 AND 929/PN/2011 (ASSESSMENT YEARS 2000-01 & 2001-02) M/S. KEJALS FURNISHINGS 689 NARAYANPETH OFF : LAXMI ROAD KUNTE CHOWK PUNE 411 030 PAN NO.AABFK6603Q .. APPELLANT VS. ACIT CIRCLE-11(2) PUNE .. RESPONDENT ASSESSEE BY : SHRI SUNIL PATHAK & SHRI NIKHIL PATHAK DEPARTMENT BY : SHRI P.L. PATHADE/ SHRI B.C. MALAKAR DATE OF HEARING : 21-10-2014 DATE OF PRONOUNCEMENT : 28-11-2014 ORDER PER R.K. PANDA AM : THE ABOVE TWO APPEALS FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE COMMON ORDER DATED 01-11-2011 OF THE CIT(A)-I PUNE RELATING TO ASSESSMENT YEARS 2000-01 & 2001-02 RESPECTIVELY. FOR THE SAKE OF CONVENIENCE THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY TH IS COMMON ORDER. ITA NO.928/PN/2011 (A.Y. 2000-01) : 2. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESS EE IS A PARTNERSHIP FIRM ENGAGED IN TRADING IN CURTAINS AND OTHER FURNISHINGS. THE ORIGINAL RETURN OF INCOME IN THIS CASE WAS 2 FILED DECLARING TOTAL INCOME OF RS.16 28 420/-. I N THIS CASE THE AO RECEIVED INFORMATION FROM THE ADDL.CIT CIRC LE 11(2) PUNE THAT DURING THE COURSE OF SEARCH AND SEIZURE A CTION IN THE CASE OF SRI SHREERAM H. SONI ON 29-07-2003 SOM E DOCUMENTS RELATING TO MONEY LENDING TRANSACTIONS WE RE SEIZED. AS PER THESE DOCUMENTS THE ASSESSEE M/S. KEJAL FURNISHINGS HAD CARRIED OUT MONEY LENDING ACTIVITY THROUGH SHREERAM H. SONI FOR WHICH HE WAS PAID COMMISSION/BROKERAGE. THE INTEREST AND PRINCIPAL U TILIZED IN THE MONEY LENDING TRANSACTIONS HAD NOT BEEN DISCLOS ED IN THE RETURN OF INCOME FILED BY THE ASSESSEE WITH THE INC OME-TAX DEPARTMENT. ACCORDINGLY THE AO REOPENED THE ASSES SMENT BY ISSUING NOTICE U/S.148 ON 28-03-007. THE ASSESS EE ASKED FOR THE REASONS FOR SUCH REOPENING WHICH WERE PROVI DED TO THE ASSESSEE ON 10-10-2007. SUBSEQUENTLY THE ASSE SSEE ALSO ASKED FOR THE INFORMATION/DOCUMENTS ON THE BAS IS OF WHICH NOTICE U/S.148 WAS ISSUED. 2.1 THE AO ISSUED A DETAILED SHOW CAUSE NOTICE WITH THE COPIES OF THE SEIZED DOCUMENTS IN THE CASE OF SHREE RAM H. SONI GROUP TO THE ASSESSEE. THE ANNEXURE-A TO THE SAID QUESTIONNAIRE READS AS UNDER : ANNEXURE-A M/S. KEJALS FURNISHINGS 689 NARAYANP PETH PUNE 411 020 S.NO. CHEQUE NO. & DATE AMOUNT BORROWER INVESTOR PER INT BROK 1 11792 BEAERR 3.1.2000 100.00 BACHU BHOY(B) KAJALS RASHMI G. 90 1.50 0.25 3 THE ASSESSEE STRONGLY CHALLENGED THE REOPENING OF T HE ASSESSMENT. 2.2 SO FAR AS THE SEIZED DOCUMENT IS CONCERNED THE ASSESSEE VIDE LETTER DATED 07-12-2007 REPLIED AS UN DER: 3] WITHOUT PREJUDICE TO ABOVE PARA IT IS SUBM ITTED THAT THE ADDITION ON MERITS IS ALSO NOT JUSTIFIED. YOUR HONOUR H AS GIVEN US THE COPIES OF THE RELEVANT DOCUMENTS FOUND WITH SONI GROUP AND PRESUMED TO BE PERTAINING TO THE ASSESSEE. FIRST OF ALL IT IS SUBMITTED THAT THE ASSESSEE HAS NEVER LENT ANY FUNDS TO S ONI GROUP. EVEN THE DOCUMENTS FOUND WITH SONI GROUP DO N OT PERTAIN TO THE ASSESSEE. THE NOTING IS RELATING TO 'KAJAL'S RA SHMI G' WHICH IS NOT PERTAINING TO THE ASSESSEE AT ALL. THE NAME OF TH E ASSESSEE IS KEJALS FURNISHINGS AND THE SAME IS NOT ON THE SAID LOOSE P APERS FOUND WITH SONI GROUP. THERE IS NO NAME OF THE ASSESSEE NOTED ON THE DOCUMENTS FOUND WITH SONI GROUP. IN FACT THERE IS NO CLEAR NOTING PERTAINING TO THE ASSESSEE AND IT IS PURELY ON PR ESUMPTION AND SURMISES THAT YOUR HONOUR IS LINKING THE SAID ENTRIE S TO THE ASSESSEE. NO WHERE THE NAME OF THE ASSESSEE IS NOTED NOR ANY OTHER EVIDENCE IS FOUND REGARDING AMOUNT ADVANCED BY THE ASSESSEE. THERE CAN BE SOME OTHER FIRM NAMED KAJALS IN P UNE AND THERE IS NO EVIDENCE THAT THE NOTING PERTAINS TO THE ASSESSEE FIRM. NO WHERE THE DOCUMENTS INDICATE THAT THE AMOUNTS HAVE BEEN LENT BY THE ASSESSEE TO MR. SONI. FURTHER THERE IS NO EVIDEN CE WITH THE DEPT. THAT SONI GROUP HAS ACCEPTED THAT THIS ASSESSEE HAS ADVANCED FUNDS TO SONI GROUP. THE ADDITION PROPOSED B Y YOUR HONOUR IS SIMPLY BASED ON PRESUMPTION AND WITHOUT ANY CORROBORATIVE EVIDENCE. 2.3 RELYING ON VARIOUS DECISIONS IT WAS SUBMITTED T HAT PRESUMPTIONS U/S.132(4A) IS NOT APPLICABLE AGAINST THE ASSESSEE. IT WAS SUBMITTED THAT THE PRESUMPTION IS AVAILABLE ONLY IN RESPECT OF THE PERSON FROM WHOM THE PAPER I S SEIZED. IT CANNOT BE APPLIED AGAINST THIRD PARTY. IT WAS F URTHER ARGUED THAT NO ADDITION CAN BE MADE ON THE BASIS OF EVIDENCE FOUND WITH THIRD PARTY. 3. HOWEVER THE AO WAS NOT SATISFIED WITH THE EXPLANATIONS GIVEN BY THE ASSESSEE. ACCORDING TO T HE AO THOUGH THE ASSESSEE IS NOT ACCEPTING THAT HE HAS AD VANCED LOAN HOWEVER IT IS ACCEPTED RULE OF EVIDENCE U/S. 114 OF 4 INDIAN EVIDENCE ACT THAT IF A PERSON POSSESSING EVI DENCE DOES NOT PRODUCE IT THE INFERENCE IS THAT SUCH EVIDENCE IF PRODUCED WOULD BE DETRIMENTAL TO HIM. THEREFORE ON GIVEN FACTS THIS IS A FIT CASE FOR DRAWING AN INFERENCE FROM NON ACCEPTANCE OF THE ASSESSEE THAT HE IS THE OWNER OF THE FUNDS ADVANCED TO BORROWERS IN CASH AND RECORDED IN BOOKS OF SHREERAM H. SONI. 3.1 AS REGARDS THE SUBMISSION OF THE ASSESSEE THAT NO ADDITION CAN BE MADE ON THE BASIS OF THIRD PARTY T HE AO HELD THAT AS PER SECTION 80 OF THE INDIAN EVIDENCE ACT THERE IS PRESUMPTION AS TO DOCUMENTS PRODUCED AS RECORD ON EVIDENCE ARE GENUINE THAT ANY STATEMENTS AS TO THE CIRCUMSTANCES UNDER WHICH IT WAS TAKEN PURPORTING TO BE MADE BY THE PERSONS SIGNING IT ARE TRUE AND THAT S UCH EVIDENCE STATEMENT OR CONFESSION WAS DULY TAKEN. RELYING ON VARIOUS DECISIONS THE AO MADE ADDITION OF RS.1 0 4 500/- AS UNEXPLAINED INVESTMENT U/S.69 OF THE I.T. ACT. F OR THE A.Y. 2000-01 BY CALCULATING THE SAME AS UNDER : S.NO. BORROWER AMOUNT (IN RS.) DATE OF BORROWAL INTEREST DUE DATE TOTAL (PRINCIPAL +INTEREST (IN RS.) 1 BACHUBHOY (B) 1 00 000 03-01-2000 4 500 03-01-2000 1 04 500 4. BEFORE CIT(A) THE ASSESSEE STRONGLY CHALLENGED T HE REOPENING OF THE ASSESSMENT U/S.148 STATING THAT TH E SAME IS BAD IN LAW AND THEREFORE IT SHOULD BE DECLARED NULL AND VOID. SO FAR AS THE MERIT OF THE CASE IS CONCERNED THE A SSESSEE 5 REITERATED THE SAME ARGUMENTS AS MADE BEFORE THE AO . IT WAS ARGUED THAT THE ADDITION HAS BEEN MADE ON THE B ASIS OF CERTAIN DOCUMENTS FOUND WITH SHREE H. SONI GROUP WH ICH DO NOT INDICATE THAT THE ASSESSEE HAD ADVANCED ANY LOA N. IT WAS REITERATED THAT THE ASSESSEE HAD NEVER ADVANCED ANY LOAN TO SHREERAM H. SONI OR ANY PERSON THROUGH SHREERAM H. SONI OUT OF HIS UNACCOUNTED SOURCES. THE DOCUMENTS FOUN D WITH SHREERAM H. SONI DID NOT INDICATE THAT THE ASSESSEE HAD ADVANCED ANY LOAN. IT WAS ARGUED THAT THE PRESUMPT ION U/S.132(4A) IF AT ALL APPLICABLE COULD BE APPLIED ONLY IN THE CASE OF SHREERAM H. SONI AND NOT IN THE CASE OF THE ASSESSEE. NO ADDITION COULD BE MADE IN THE HANDS O F THE ASSESSEE ON THE BASIS OF SOME LOOSE DOCUMENTS FOUND WITH THIRD PARTY. THE ASSESSEE ALSO SUBMITTED THAT SHRE ERAM H. SONI HAD NEVER ADMITTED THAT THE ASSESSEE ADVANCED LOAN TO HIM OUT OF HIS UNACCOUNTED SOURCES. IT WAS ARGUED THAT PROVISIONS OF SECTION 80 AND 114 OF THE INDIAN EVID ENCE ACT ARE NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE . SIMILARLY THE VARIOUS DECISIONS RELIED ON BY THE AO ARE ALSO NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. 5. HOWEVER THE LD.CIT(A) WAS NOT SATISFIED WITH TH E ARGUMENTS ADVANCED BY THE ASSESSEE AND UPHELD THE V ALIDITY OF THE REASSESSMENT PROCEEDINGS. SO FAR AS THE MER IT OF THE CASE IS CONCERNED HE UPHELD THE ADDITION MADE BY T HE AO BY OBSERVING AS UNDER: 6.4. I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT AND MATERIAL AVAILABLE ON RECORD. SO FAR AS THE GROUNDS U NDER CONSIDERATION ARE CONCERNED IT IS NOTICED THAT THE A PPELLANT HAS 6 DENIED THE TRANSACTION ALTOGETHER STATING THAT HE DID NOT LEND ANY FUNDS TO SHRI S.H. SONI OR HIS CONCERNS. IT IS ALSO CONT ENDED THAT THE NOTINGS ON THE SEIZED DOCUMENTS ARE UNDER THE NAMES 'KE JALS - RASHMI G.' WHICH DOES NOT BELONG TO THE APPELLANT. IT IS EMPHASIZED THAT THE APPELLANT'S NAME WAS KEJALS FURNISHI NGS AND THE DOCUMENTS FOUND WITH SONI GROUP DOESN'T SHOW THIS NAME ANYWHERE. IT IS FURTHER STATED THAT THERE MAY BE OTHE R ENTITIES IN THE NAME OF ABOVE FIRM AND IT CANNOT BE SAID THAT TH E ENTRY AVAILABLE RELATES TO THE APPELLANT. THE APPELLANT HA S FURTHER STATED THAT IT IS ALSO NOT CLEAR THAT WHETHER THE ENTRY IS FO R THE APPELLANT OR ITS PARTNER. KEJALS FURNISHINGS WAS ALSO CLAIMED TO HA VE SISTER CONCERNS HAVING SIMILARITIES. AS PER THE APPELLANT THE BURDEN WAS ON THE DEPARTMENT TO PROVE THAT THE NOTINGS ON THE SE IZED DOCUMENTS RELATED TO THE APPELLANT. HOWEVER IF THIS IS THE APPELLANT'S CLAIM HE SHOULD HAVE BROUGHT ON RECORD A NY SUCH ENTITY EXISTING IN THESE NAMES. IT IS IMPORTANT TO POI NT OUT THAT THE APPELLANT COULD NOT BRING ON RECORD AS TO HOW THE CO MBINATION OF KEJALS - RASHMI G. CAN LEAD TO ANY OTHER IDENTITY THA N THE KEJALS FURNISHINGS ITSELF. FROM THE SUBMISSIONS OF THE APPELLANT IT CAN BE SEEN THAT THE APPELLANT ADMITS THAT MR. RASHMIKANT GAN DHI IS THE PARTNER IN M/S KEJAL FURNISHINGS. HE HAS ALSO ADMITTED T HAT HE IS NOT PARTNER IN THE SISTER CONCERN M/S KEJAL LINEN. THE ARGUMENT OF THE APPELLANT THAT THERE IS ONE MORE ENTITY OF THE N AME OF KEJALS AT CAMP AREA ALSO COULD NOT BE SHOWN THAT ITS PARTNER IS M R. RASHMIKANT GANDHI. IN VIEW OF THE ENTRY AVAILABLE IN THE SEIZED DOCUMENTS AS 'KEJALS - RASHMI G' THE INESCAPABLE INFERE NCE LEADS TO THE APPELLANT. THE ASSESSING OFFICER THEREFORE CAN BE SEEN TO HAVE CORRECTLY ARRIVED AT THE CONCLUSION TO TREAT TH E APPELLANT AS THE INVESTOR. THE APPELLANT HAS CITED VARIOUS DECISIONS OF COURTS AND TRIBUNALS FOR THE PROPOSITION THAT THE ENTRIES ON THE SEIZED DOCUMENTS CANNOT BE APPLIED AGAINST A THIRD. PARTY A ND THE PRESUMPTION U/S 132(4A) CAN BE USED ONLY AGAINST THE PE RSONS FROM WHOSE PREMISES THE DOCUMENTS ARE SEIZED. IT IS A FAC T THAT PRESUMPTION U/S 132(4A) GRANTS LEGAL STRENGTH TO THE RE VENUE ABOUT THE CORRECTNESS OF THE DOCUMENTS SEIZED AND ITS OW NERSHIP. HOWEVER SUCH A PRESUMPTION IS GENERALLY APPLICABLE O R RELIED UPON WHEN THE DOCUMENTS SEIZED LACK INFORMATION BASED ON WHICH ITS IDENTITY OR RELATIONSHIP CAN BE FOUND. IN C ASES WHERE DOCUMENTS SEIZED ARE 'SPEAKING' IT HAS TO BE TREATED AND ACCEPTED TO BE TRUE AND INFERENCE CANNOT BE MADE ON LY ON THE STRENGTH OF PROVISIONS CONTAINED U/S 132(4A). IN THE PR ESENT CASE THE DOCUMENTS FOUND HAVE BEEN ADMITTED BY MR. SONI T O BE TRUE AND HE HAS ALSO EXPLAINED THE NATURE OF TRANSACTIONS. I F THE SAME DOCUMENT REVEALS THAT THE APPELLANT HAS MADE INVESTMEN T AND HAS EARNED INCOME ON THOSE INVESTMENTS ALL OF WHICH HAVE REMAINED UNACCOUNTED THE REVENUE IS NOT REQUIRED TO TAKE THE SUPPORT AVAILABLE U/S 132(4A). IN THE PRESENT CASE NOT ONLY THE DOCUMENTS SEIZED HAVE BEEN FOUND TO BE TRUE AND CORRE CT BUT THE SAME HAS ALSO BEEN FOUND TO REVEAL WHAT THE ASSESSING OFFI CER HAS RELIED IN THE APPEAL DECIDED BY THE HON'BLE ITAT I N THE CASE OF MR. SONI. THIS ASPECT IS BEING DISCUSSED IN THE COMING PARAG RAPHS. IN VIEW OF THE ABOVE THE ARGUMENT OF THE APPELLANT TH AT HE CANNOT BE FASTENED FROM THE ENTRIES AVAILABLE IN THE DOCUMENTS SE IZED FROM MR. SONI APPEARS TOTALLY INCORRECT AND UNACCEPTABLE. IN ADDITION TO THE ABOVE THE APPELLANT HAD VEHEMENTLY RELIED UPON THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF ADDL . CIT VS. MS. LATA MANGAESHKAR (1974) 97 ITR 696 (BOM) FOR THE PR OPOSITION THAT THE ADDITION CANNOT BE MADE IN THE HANDS OF THE ASSESSEE ONLY 7 ON THE BASIS OF ENTRIES IN THE BOOKS OF THIRD PARTIES. I T IS FOUND AS DISCUSSED IN THE PARAGRAPH 6.12 THAT THE SAID DECISION I S DISTINGUISHABLE ON THE FACTS OF THE CASE. 6.5 THE ASSESSING OFFICER HAS DISCUSSED THE SEIZED PAPERS AND DETAILS AVAILABLE RELATING TO APPELLANT TO SHOW THAT THE INFERENCE DRAWN IS CORRECT. THE ENTRIES AVAILABLE IN SEIZED PAPE RS SHOWS 'KEJALS - RASHMI G.' WHICH CLEARLY SHOWS THAT IT RELAT ES TO KEJAL FURNISHINGS WHEREIN MR. RASHMI G. IS LINKED. IT IS ESTABL ISHED THAT MR. RASHMIKANT GANDHI IS THE MAIN PARTNER OF APPELLAN T FIRM. THIS COMBINATION ESTABLISHED THE IDENTITY. THE AUTHENTICI TY AND VERACITY OF THESE SEIZED DOCUMENTS HAS BEEN DULY DISCUSSE D ANALYSED AND ACCEPTED IN THE ITAT ORDER DATED 17.06. 2010 IN ITA NO.474 TO 478 & 518/PN/2007 FOR ASSESSMENT YEARS 1998-99 TO 2003-04 IN THE CASE OF SHRI SHRIRAM H. SONI WHICH HAS ALSO UPHELD THE AUTHENTICITY OF THE ENTRIES MADE IN THE D OCUMENTS. THEREFORE INFERENCE OF ASSESSING OFFICER IS LEGALLY CO RRECT MORE SO WHEN IT REMAINED REBUTTED. 6.6. IT IS NOTICED THAT THE APPELLATE ORDER IN THE C ASE OF SHRI SHRIRAM H. SONI HAS ALREADY BEEN PASSED BY THE ITAT P UNE BENCH IN ITA NOS. 474 TO 478 518/PN/2007 FOR ASSESSMENT YEARS 1998- 99 TO 2003-04 ORDER DATED 17.06.2010 IN WHICH ONE IMPORTANT ISSUE BEFORE THE ITAT WAS WHETHER THE AMOUNTS MENTIONED IN THESE PARTICULAR SEIZED DOCUMENTS (VIDE BUNDLE NOS. 98 AND 99) UNDER THE HEAD 'INVESTORS' IN THE SPECIFIC NAMES OF CER TAIN PERSONS COULD BE TREATED AS APPELLANT'S (SHRI SONI'S) INCOME U /S 68 OF THE I.T. ACT AS UNEXPLAINED CREDIT. THE TRIBUNAL TOOK N OTE OF THESE VARIOUS ENTRIES IN THE SEIZED DOCUMENTS ALONG WITH THE ARGUMENTS OF THE APPELLANT'S A.R. IN WHICH HE HAD VEHEMENTLY RELIED UPON THE STATEMENTS RECORDED ESPECIALLY THAT OF SHRI SUNIL W. RATNAKAR THE ACCOUNTANT OF SHRI S H. SONI AS WELL AS THAT OF SHRI S.H. SONI DURING THE COURSE OF SEARCH AND AFTERWARDS U/S.132(4) / 131(1) (D) OF THE IT. ACT. THE A.R. HAD ARGUED BEFORE THE TRIBUNAL TH AT THE SEIZED DOCUMENTS DEPICT THE TRUE CHARACTER AS WELL AS TRUE NA TURE OF THE TRANSACTION AND THEREFORE IN VIEW OF PROVISIONS OF SE CTION 132(4A) THERE WAS A PRESUMPTION THAT THE DOCUMENTS SEI ZED SPEAK TRUTH. FURTHER CONTENTION WAS THAT A DOCUMENT F OUND DURING SEARCH HAD TO BE READ AS A WHOLE AND NOT IN P ARTS FOR WHICH RELIANCE WAS PLACED ON THE JUDGEMENTS CITED IN THE ORDER. DURING THE COURSE OF THESE SUBMISSIONS THE A.R. OF SHRI S.H. SONI PLACED BEFORE THE ITAT LIST OF 'INVESTORS' AND IT WAS A LSO STATED BY THE A.R. BEFORE THE ITAT THAT SUMMONS U/S 131 WAS ISSUED TO MANY SUCH INVESTORS AS WELL AS BORROWERS TO ESTABLISH THE CORRECTNESS OF THE NAMES APPEARING IN THESE DOCUMENTS OR DERS OF INVESTORS / BORROWERS WERE PLACED BEFORE THE ITAT WHI CH WAS TAKEN DUE COGNIZANCE OF WHILE DECIDING THE SAID APPE ALS OF MR. SONI. THE ITAT IN ITS ORDER HAS SPECIFICALLY STATED TH AT AS PER THESE ASSESSMENT ORDERS IT IS ESTABLISHED THAT RESPECTIVE INVESTOR S HAS INVESTED THEIR MONEY THROUGH SHRI SHRIRAM H. SONI WH O ACTED AS A FINANCE BROKER. IN VIEW OF THE ABOVE THE STAND OF A SSESSING OFFICER LOOKS PERFECTLY CORRECT. 6.7. THE ITAT RELIED ON VARIOUS OTHER DECISIONS OF TRI BUNAL BENCHES BEFORE TAKING A DECISION REGARDING THIS ISSUE. R ELYING ON THE DECISION OF MUMBAI ITAT IN THE CASE OF BIREN SAVL A 8677/M/2004 DATED 23.09.2005 IT WAS CONCLUDED THAT IF ON A 8 DOCUMENT THE NAME OF THE BORROWER AND AMOUNT WAS ACKNOWLEDGED AND ACCEPTED BY THE DEPARTMENT THEN T HE DEPARTMENT HAD NO LEGAL RIGHT TO IGNORE OR DISBELIEV E THE NAME OF THE INVESTOR WRITTEN ON THAT VERY SEIZED MATERIAL. TH ERE CANNOT BE ONE PRESUMPTION TO BE ADOPTED IN RESPECT OF OUTGOING S AND THE OTHER FOR INCOMINGS AND THE DOCUMENTS HAD TO BE READ AS A WHOLE. FOR THIS POINT THE TRIBUNAL ALSO CITED THE DECISION IN THE CASES OF KISHACHAND SHOBHRAJMAL 41 ITR 97 GLASS LINES EQUIPMENT S 30 ITR 181 MEHTA PARIKH & CO. VS CIT 30 ITR 181 (SC) NAVJEEVAN OIL MILL VS CIT 252 ITR 417 (GUJ) C.M. MEHTA VS ACIT 71 ITD 245 KANTHILAL AND BROTHERS VS ACIT 52 ITD 412 (PUNE). THE TRIBUNAL ALSO ACCEPTED THAT ON THE SEIZED DOCUMENT BUNDLE NO. 100 WHICH WAS TREATED AS CASHBOOK THERE WERE THE NAMES OF LENDER S AS WELL AS THE BORROWERS FOR THE CASH FLOW FOR INTEREST PAYMENT REPAYMENT OF LOAN ETC. BASED ON THIS OBSERVATION THE TRIBUNAL ACCEPTED THAT SHRI S.H. SONI WAS A FINANCE BROKER AN D IT WAS FURTHER HELD THAT THERE WERE 'INVESTORS' NAMES MENTION ED IN THE DOCUMENTS SEIZED VIDE BUNDLE NOS. 98 & 99 WHICH DULY SHOWED THE HEADS OF 'INVESTORS' AND 'BORROWERS'. 6.8. THE TRIBUNAL POINTED OUT THAT A.O. HAS ALSO MEN TIONED AT ONE PLACE IN THE ORDER THAT MANY OF THE INVESTORS WHO SE NAMES ARE INDICATED IN THE SEIZED DOCUMENTS ALSO FOUND PLACE IN THE REGULAR BOCKS OF THE ASSESSEE. THE TRIBUNAL HELD THAT TH E STATEMENT RECORDED ON 30.07.2003 DURING THE SEARCH O F SHRI SUNIL W. RATANAKAR ACCOUNTANT OF THE SHRI S.H. SONI EMPH ASIZED THAT THE PAGES CONTAINED IN BUNDLE NO. 100 (CASH BOOK) HAD GOT A SUBSTANTIAL EVIDENTIARY VALUE AS PER LAW. HE HAD STATED THAT THE INVESTORS USED TO INVEST THEIR MONEY AND THE BORROWERS USED TO TAKE MONEY AS A LOAN. HE HAS DESCRIBED THE MODUS OPERAN DI IN DETAIL REGARDING PREPARATION OF PROMISSORY NOTES IN DU PLICATE BY THE BORROWERS IN WHICH THE ORIGINAL WAS WRITTEN IN I NK BEARING THE DETAILS OF CHEQUES ETC. AND A SECOND COPY WAS ALSO P REPARED. HE HAD ALSO REVEALED THAT SHRI S.H. SONI USED TO GIVE A CODE AND IDENTIFICATION NUMBER IN RESPECT OF EVERY TRANSACTIO N. PIE TRIBUNAL ALSO REFERRED TO THE STATEMENT RECORDED OF SHRI S.H. SONI DURING THE SEARCH AND AFTERWARDS AND EMPHASIZED THE FACT THAT THE STATEMENTS RECORDED DURING THE SEARCH OR JUST AFTER CO NCLUSION OF THE SEARCH HAD SIGNIFICANT EVIDENTIARY-VALUE. THE TRI BUNAL ANALYSED THESE ENTRIES IN THE SEIZED DOCUMENTS BUNDLE NO S. 98 & 99 AND EMPHASIZED THE NATURE OF THE TRANSACTIONS I.E. TAKING THE FUNDS FROM INVESTORS AND GIVING IT TO BORROWERS IN WHIC H SHRI S.H. SONI WAS ACTING AS BROKER AND THE BROKERAGE INCOME I S ALSO MENTIONED IN THESE DOCUMENTS. 6.9. THE TRIBUNAL IN PARA 11.11 OF THE ORDER HAS EL ABORATELY DISCUSSED THE CONTENTS OF BUNDLE NO. 100 WHICH IS ADMITT EDLY WRITTEN BY SHRI SUNIL RATNAKAR ACCOUNTANT OF SHRI S.H. SONI. THEREFORE THE TRIBUNAL HAS ACCEPTED THE AUTHENTICIT Y OF THE ENTRIES IN THE SEIZED DOCUMENTS ARID HAS NOT ACCEPTED THE CONTENTION THAT ANY OF THESE DOCUMENTS WERE DUMB DOCU MENTS. THE AUTHENTICITY OF THESE ENTRIES IN THE CASE OF SHRI S.H. SONI HAVE THEREFORE BEEN UPHELD BY THE ITAT IN THE ORDER DAT ED 17.06.2010 AND THERE CANNOT BE ANY DOUBT ABOUT THE SAME. BASED O N THESE FINDINGS THE ITAT HAS ARRIVED AT THE CONCLUSION THAT PROVISIONS OF SECTION 68 CANNOT BE APPLIED IN THE CASE OF SHRI S.H. SONI FOR THE AMOUNTS RECEIVED BY HIM FROM VARIOUS PERSONS AND SHOWN I N THE SEIZED DOCUMENTS UNDER THE HEAD 'INVESTORS' WHILE CATE GORICALLY 9 HOLDING THAT THESE PARTICULAR SEIZED DOCUMENTS FROM BU NDLE NOS. 98 TO 100 HAVE TO BE TREATED AS PART OF BOOKS OF ACCO UNT. THE TRIBUNAL WAS NOT IN AGREEMENT WITH THE CIT (APPEALS) 'S CONCLUSION THAT BECAUSE OF THE FACT THAT CONCRETE ID ENTITY OF THESE PERSONS AND THE NAME OF THE INVESTORS WAS NOT FURNISHED B Y THE APPELLANT IN THAT CASE THEREFORE THE AMOUNT SHOULD BE LIABLE TO BE ADDED AS UNDISCLOSED INCOME OF SHRI S.H. SONI U/S 68 O F THE IT. ACT. FOR THIS PURPOSE THE TRIBUNAL ALSO RELIED UPON THE DEC ISION OF SHRI RAMANLAL P. CHORDIA ITA NO. 47/PN/2000 DATED 7.2.20 01 FOR A.Y. 1995-96. BASICALLY THE TRIBUNAL FROM PARAS 12 TO 21 H AS ELABORATELY DISCUSSED THE ENTRIES IN SEIZED DOCUMENTS BUN DLE NOS. 98 TO 100 AND ITS NATURE AS DETERMINED FROM THE STATEM ENT RECORDED OF SHRI SUNIL RATNAKAR AND SHRI S.H. SONI AS WELL AS THE ORDER OF THE A.O. AND THE CIT (APPEALS) TO ARRIVE AT THE CONCLUSION THAT AS THE ENTRIES IN THESE SEIZED DOCUMENTS WERE CORRE CT SECTION 68 WAS NOT APPLICABLE FOR ADDING THE AMOUNT MENTIONE D UNDER THE HEAD 'INVESTORS' IN DIFFERENT NAMES IN THE HANDS OF SH RI S.H. SONI. FOR THIS PURPOSE THE TRIBUNAL ALSO REPEATEDLY TOOK NOT E OF THE SUMMONS ISSUED U/S 131 TO DIFFERENT INVESTORS AND THE ASSESSMENT ORDERS PASSED IN THEIR CASES. THE TRIBUNAL ONLY CONFIRMED THE ADDITIONS AS THE INCOME OF SHRI S.H. SO NI WHICH WERE APPEARING IN UNIDENTIFIABLE CODES VIZ. 'SHREE S K' 'SRS-3' 'S/3 'SKS' 'XYZ' ETC. WHICH WERE HELD TO BE THE OWN INCOME OF SHRI S.H. SONI INVESTED IN THESE NAMES. BY IMPLICATION IT WAS CONCLUDED THAT THE AMOUNTS MENTIONED UNDER THIS HEAD 'INVESTOR IN BUNDLE NOS. 98 & 99 OTHER THAN THESE PARTICULAR AB BREVIATIONS; WERE HELD TO BE THE PARTICULAR PERSON'S INVESTMENT. 6.10. IN VIEW OF THE ABOVE SALIENT FINDINGS NOTICED F ROM THE ITAT'S ORDER DATED 17.06.2010 IT WAS OBVIOUS THAT THE ITAT HAS HELD THAT THE ENTRIES UNDER THE HEAD 'INVESTORS' IN BU NDLE NOS. 98 AND 99 RELATED TO THE PARTICULAR PERSONS MENTIONED TH EREIN I.E. THE INVESTORS HAD INFACT ADVANCED THE PARTICULAR AMOUNTS T O SHRI S.H. SONI WHO WAS A FINANCE BROKER AND WHO IN TURN HAD ADVANCED IT TO OTHER PERSONS WHO WERE INTERESTED IN BORROWING FROM SHRI S.H. SONI. THE ELABORATE METHOD DISCUSSED IN THE TRIBUNAL'S ORDER AS WELL AS THE NOTINGS ON THE SEIZED DOCUMENTS WHICH SHOWED THE RATE OF INTEREST PERIOD FOR WHICH IT WAS GIVEN ETC. AND ITS CORROBORATION BY THE ENTRIES ON DOCUMENTS IN BUNDLE N O. 100 WHICH WAS IN THE NATURE OF CASHBOOK AND RECORDED THE INCOMINGS / OUTGOINGS OF THE INTEREST AMOUNT AS WELL AS THE PRIN CIPAL THERE IS NO DOUBT ABOUT THE CORRECTNESS OF THIS CONCLUSION. THE STATEMENT RECORDED OF SHRI SUNIL. W. RATNAKAR ACCOUNTANT OF SHRI S.H. SONI GROUP IN WHOSE HANDWRITING RECORDINGS ON THE DOCUMEN TS IN BUNDLE NO. 100 WAS ADMITTEDLY MADE HAS ALSO BEEN DISCU SSED IN THE TRIBUNAL'S ORDER ELABORATELY WHICH LEAVES ONE NO DOUBT ABOUT THE NATURE OF THESE UNACCOUNTED TRANSACTIONS. 6.11. IN THIS CONNECTION THE A.O. HAS CORRECTLY RELIE D ON TWO LANDMARK JUDGEMENTS OF THE HON'BLE APEX COURT IN THE CASE OF SUMATI DAYAL VS. CIT (1995) 214 ITR 801; (SC) AND CI T VS. DURGA PRASAD MORE (1971) 82 ITR 540 (SC) PAGES 545 AND 545 547. IN THE CASE OF SUMATI DAYAL VS. CIT THE APEX COURT HAD ST RESSED THE IMPORTANCE OF CIRCUMSTANTIAL EVIDENCE AND PREPONDERA NCE OF PROBABILITY. IT WAS ALSO HELD THAT THE TAX AUTHORITIE S WERE ENTITLED TO LOOK INTO THE SURROUNDING CIRCUMSTANCES TO FIND OUT THE REALITY AND THE MATTER HAS TO BE CONSIDERED BY APPLYING THE T EST OF HUMAN 10 PROBABILITIES. IN THIS DECISION THE HON'BLE APEX COUR T : RELIED UPON THE RATIO OF THE EARLIER JUDGEMENT IN THE CASE OF D URGA PRASAD MORE 82 ITR 540 (S.C). IN THE APPELLANT'S CASE THE ABOVE FACTS AND EVIDENCES LEAD TO THE EXISTENCE OF COMPELLING CIRCUMST ANTIAL EVIDENCE AND APPLYING THE TEST OF HUMAN PROBABILITI ES IT IS THE NATURAL CONCLUSION THAT APPELLANT WAS THE INVESTOR TO THE TUNE OF RS. 34 LACS OF UNACCOUNTED MONEY; AS IS REVEALED FROM T HE RECORDINGS IN THE SEIZED DOCUMENTS. 6.12. FURTHER THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF ADDL. CIT VS. MS LATA MANGESHKAR (SUPRA) CI TED BY THE APPELLANT IS CLEARLY DISTINGUISHABLE ON FACTS. IT IS REV EALED FROM THE DECISION THAT IT WAS HELD THAT THE DEPARTMENTAL APPEA L WAS DISMISSED BASED ON THE FACT THAT NO REFERABLE QUESTION O F LAW AROSE AND THE FINDINGS GIVEN BY THE TRIBUNAL WERE HE LD TO BE FINDINGS OF FACT. IN THAT CASE IT WAS HELD AS UNDER: 'IN FACT THE TRIBUNAL HAS DISCUSSED THESE ENTRIES APPEARING IN THE LEDGER OF V AND HAS GIVEN SUBSTANTIAL REASON S AS TO WHY IT WAS NOT INCLINED TO ACCEPT THE ENTRIES AS RELIABLE ENTRIES FOR ACCEPTING THE CASE OF THE DEPARTMENT. I NTER ALIA IT POINTED OUT THAT THE LEDGER CONTAINING THE SAID ENTRIES HAD NOT BEEN PRODUCED BEFORE IT THAT NO CORRESPONDING ENTRIES WERE THERE IN THE DAY-BOOK OF THE RELEVANT PERIOD A ND THAT V DID NOT RELY ON THIS LEDGER IN THE COURSE OF ITS OW N ASSESSMENT PROCEEDINGS BUT FOR ITS OWN ASSESSMENT PROCEEDINGS DIFFERENT SET OF BOOKS HAD BEEN RELIED UPON AS GENUINE SET OF BOOKS.' ON THE OTHER HAND IN THE TRIBUNAL'S ORDER DATED 17. 06.2010 IN THE CASE OF SHRI S.H. SONI DISCUSSED ABOVE THE ENTRIES MADE ON SEIZED DOCUMENTS VIDE BUNDLE NOS. 98 99 AND 100 ARE ALL HEL D TO BE AUTHENTIC AND RELEVANT. THE TRIBUNAL IN THIS CASE HA S NOT GIVEN THE FINDING THAT THESE ENTRIES ARE FICTITIOUS AND CANNOT B E RELIED UPON. THEREFORE THE JUDGEMENT IN THE CASE OF ADDL. CIT VS. MS. LATA MANGESHKAR OF THE HON'BLE JURISDICTIONAL HIGH COURT W AS DEARLY DISTINGUISHABLE FROM THAT OF THE APPELLANT'S CASE. 6.13. THE CLAIM OF THE APPELLANT THAT MR. SONI NEVE R ADMITTED THAT THE LOAN WAS ADVANCED BY THE APPELLANT FROM HIS UNACCOUNTED SOURCES IS ALSO INCORRECT. MR. SONI ADMITTED THE AUTHEN TICITY OF THE DOCUMENTS SEIZED AND ASCERTAINED THAT THE NAMES APPEARI NG ARE CORRECT. HOWEVER HE ONLY DECLINED TO ELABORATE THE NAMES FURTHER TO AVOID PERSONAL COMPLICATIONS. THE SAID FINDING WAS A CCEPTED BY THE HON'BLE ITAT WHEREIN IT WAS HELD THAT THE INVESTO RS ARE TRUE AND IDENTIFIABLE EXCEPT THOSE WHERE DETAILS ARE SUCH W HICH CAN LEAD TO NOWHERE AND THOSE ENTRIES WERE HELD TO BE RE PRESENTING THE UNACCOUNTED MONEY OF MR. SONI. AS THE MONEY APPE ARING IN THE NAME OF KEJAL FURNISHINGS WERE NOT ACCEPTED TO BE BELONGING TO MR. SONI IT HAS TO BE TREATED TO BE BELONGING TO M/S KEJAL FURNISHINGS. THE RELIANCE PLACED BY THE ASSESSING OFFICE R ON SEC. 80 AND 114 OF THE INDIAN EVIDENCE ACT ALSO CANNOT BE HELD TO BE IRRELEVANT. THE APPELLANT HAS ALSO NOT BROUGHT ON REC ORD TO SHOW THE SAME. 11 6.14. IN ACCORDANCE WITH THE DISCUSSION MADE ABOVE INC LUDING THE ANALYSIS OF THE TRANSACTIONS AS PER THE DOCUMENTS SEI ZED AND THE RELIANCE PLACED ON THE RELEVANT PORTION OF THE ITAT ORDER DATED 17.06.2010 IN THE CASE OF SHRI S.H. SONI THE APPELLANT'S EXPLANATION IS NOT FOUND TO BE TENABLE IN LAW. ACCOR DINGLY THE ADDITION MADE BY THE A.O. OF AN AMOUNT OF RS.33 18 0 00/- FOR A.Y. 2001-02 AND RS.1 04 500/- FOR A.Y. 2000-01 U/S.69 OF THE I.T. ACT ARE HEREBY UPHELD. GROUNDS NO. 1 TO 7 OF APPEAL ARE DISMISSED. 6. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSE SSEE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS: THE FOLLOWING GROUNDS ARE TAKEN WITHOUT PREJUDICE TO EACH OTHER. ON FACTS AND IN LAW 1. THE LEARNED CIT(A) ERRED IN HOLDING THAT THE REO PENING U/S 148 WAS VALID WITHOUT APPRECIATING THAT THE REASONS RE CORDED WERE PURELY ON PRESUMPTIONS AND SURMISES AND HENCE TH E REOPENING WAS BAD IN LAW AND ACCORDINGLY THE REASSESSME NT U/S 147 SHOULD HAVE BEEN DECLARED NULL AND VOID. 2. THE LEARNED CIT(A) ERRED IN HOLDING THAT THE A.O . WAS JUSTIFIED IN MAKING THE ADDITIONS BY REOPENING THE CA SE U/S. 148 WITHOUT APPRECIATING THAT THE ADDITIONS WERE MADE ON THE BASIS OF THE SEIZED MATERIAL FOUND WITH SHRI SONI AND HENCE THE ADDITIONS IF AT ALL TO BE MADE SHOULD HAVE BEEN BY RESORTING T O SECTION 153C AND THE A.O. COULD NOT TAKE RECOURSE TO THE PROVISION S OF SECTION 148. 3. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDI TION OF RS. 1 04 500/- U/S. 69 BEING THE PRINCIPAL AMOUNT AND T HE INTEREST THEREON ON THE PRESUMPTION THAT THE ASSESSEE HAD ADVANC ED LOAN FROM HIS UNEXPLAINED SOURCES AND HAD ALSO EARNED INTERE ST THEREON. 4. THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE ADDITION WAS MADE TOTALLY BASED ON PRESUMPTION AND SURMISES AND TH ERE WAS NO EVIDENCE THAT THE ASSESSEE HAD ADVANCED ANY SUCH L OAN. 5. THE LEARNED CIT(A) FAILED TO APPRECIATE T HAT - A. THE ASSESSEE HAD NEVER ADVANCED ANY LOAN TO SHRI SO NI OR ANY PERSON THROUGH SHRI SONI OUT OF HIS UNACCOUNTED SOURCE S. B. THE DOCUMENTS FOUND WITH SHRI SONI DID NOT INDICA TE THAT THE ASSESSEE HAD ADVANCED ANY LOAN. C. THE PRESUMPTION U/S 132(4 A) IF AT ALL APPLICAB LE COULD BE APPLIED ONLY IN THE CASE OF SHRI SONI AND NOT IN THE CASE O F THE ASSESSEE. D. NO ADDITION COULD BE MADE IN THE HANDS OF THE AS SESSEE ON THE BASIS OF SOME LOOSE DOCUMENTS FOUND WITH THIRD PARTY. 12 E. SHRI SONI HAD ALSO NEVER ADMITTED THAT THE ASSE SSEE ADVANCED LOAN TO HIM OUT OF HIS UNACCOUNTED SOURCE. 6. THE LEARNED CIT(A) ERRED IN PLACING RELIAN CE ON SECTIONS 80 AND 114 OF THE INDIAN EVIDENCE ACT WITHOUT APPRECIATING THAT THEY HAD NO RELEVANCE TO THE FACTS OF THE PRESENT CASE. 7. THE LEARNED CIT(A) ERRED IN PLACING RELIANCE ON THE ITAT PUNE DECISION IN THE CASE OF SHRI SHRIRAM SONI WHEN THER E WAS NO FINDING GIVEN BY HON'BLE ITAT THAT THE ASSESSEE HAD ADVANCE D MONEY TO SHRI SONI AND HENCE THE ADDITION CONFIRMED BY LEARNED C IT( A) IS NOT JUSTIFIED. 8. THE APPELLANT CRAVES LEAVE TO ADD ALTER AMEND OR DELETE ANY OF THE ABOVE GROUNDS OF APPEAL. 7. THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS G ROUNDS OF APPEAL NO. 1 & 2 FOR WHICH THE LD. DEPARTMENTAL REPRESENTATIVE HAS NO OBJECTION. ACCORDINGLY THE ABOVE 2 GROUNDS ARE DISMISSED AS NOT PRESSED. 8. SO FAR AS GROUNDS OF APPEAL NO. 3 TO 7 ARE CONCE RNED THEY RELATE TO ADDITION OF RS.1 04 500/- MADE BY TH E AO U/S.69 OF THE I.T. ACT AND UPHELD BY THE CIT(A). 9. THE LD. COUNSEL FOR THE ASSESSEE REFERRING TO PA GES 33 AND 34 OF THE PAPER BOOK DREW THE ATTENTION OF THE BENCH TO THE SEIZED DOCUMENTS WHICH SHOWS KAJALS RASHMI G. IN ENGLISH. REFERRING TO PAGE 58 OF THE PAPER BOOK HE DREW THE ATTENTION OF THE BENCH TO THE NOTINGS ON THE SEIZED DOCUMENTS WHICH SHOWS RASHMI GANDHIJI KEJALS IN H INDI. REFERRING TO PAGE 62 OF THE PAPER BOOK HE DREW THE ATTENTION OF THE BENCH TO THE NOTINGS ON THE SEIZED DOCUMENTS WHICH MENTIONS KEJALS USHICOVER. IT MAY BE PERTINENT T O NOTE THAT THE NAME KEJALS IS IN ENGLISH AND USHICOVER IS IN HINDI. HE SUBMITTED THAT RASHMI GANDHI IS THE PART NER OF THE 13 ASSESSEE FIRM. THE BUSINESS OF THE ASSESSEE IS THA T OF SOFA COVERS AND CURTAIN CLOTHS AND THE ASSESSEE DOES NOT DEAL WITH USHICOVER WHICH MEANS PILLOW COVER. HE SUBMITT ED THAT THERE IS ANOTHER FIRM NAMELY KEJALS LINEN WHICH I S ALSO DOING SIMILAR BUSINESS AND IT IS AT DIFFERENT LOCAT ION. HE SUBMITTED THAT THE COPY OF THE STATEMENT OF SHREERA M H. SONI WAS NEVER GIVEN TO THE ASSESSEE. SHREERAM H. SONI NEVER STATED ANYWHERE THAT HE HAS RECEIVED ANY MONE Y FROM THE ASSESSEE FIRM I.E. KEJALS FURNISHINGS. 9.1 REFERRING TO PARA 9 OF THE AO AT PAGE 7 HE SUBM ITTED THAT THE STATEMENT OF THE ASSESSEE WAS NEVER RECORD ED. REFERRING TO PAGES 70 TO 72 OF THE PAPER BOOK HE DR EW THE ATTENTION OF THE BENCH TO THE DETAILED REPLY GIVEN BY THE ASSESSEE ON 07-12-2007. REFERRING TO PAGES 73 AND 74 OF THE PAPER BOOK HE DREW THE ATTENTION OF THE BENCH T O THE FOLLOWING : AT THIS JUNCTURE WE WOULD ALSO LIKE TO SUBMIT THAT I N CASE MR. SONY HAS STATED THAT THE ASSESSEE HAS ADVANCED ANY AMOUNT TO HIM OR SOME OF THE NOTINGS IN SEIZED PAPERS PERTAIN T O THE ASSESSEE IN THAT CASE WE WOULD LIKE TO CROSS EXAMINE MR. SONY. 9.2 HE SUBMITTED THAT DESPITE SUCH REQUEST FOR CROS S EXAMINATION OF SHREERAM H. SONI NO SUCH OPPORTUNIT Y WAS GRANTED TO THE ASSESSEE. HE SUBMITTED THAT NO PROM ISSORY NOTE OR ANY OTHER DOCUMENT EVIDENCING MONEY GIVEN B Y THE ASSESSEE TO SHREERAM H. SONI WAS FOUND FROM THE RES IDENCE OF SHREERAM H. SONI. REFERRING TO PAGES 7 TO 11 OF THE PAPER BOOK HE DREW THE ATTENTION OF THE BENCH TO THE DETA ILED SUBMISSIONS FILED BEFORE CIT(A) VIDE LETTER DATED 0 5-08-2008. REFERRING TO PARA 4 OF THE SAID LETTER THE LD. COUN SEL FOR THE 14 ASSESSEE DREW THE ATTENTION OF THE BENCH TO THE FOL LOWING SUBMISSIONS MADE BEFORE THE CIT(A) : FIRST OF ALL IT IS SUBMITTED THAT THE ASSESSEE HAS NEVER LENT ANY FUNDS TO SONI GROUP. EVEN THE DOCUMENTS FOUND WITH S ONI GROUP DO NOT PERTAIN TO THE ASSESSEE. THE NOTINGS ON THE VARI OUS DOCUMENTS ARE RELATING TO KAJALS RASHMI G WHICH IS NOT PERTAINING TO THE ASSESSEE AT ALL. THE NAME OF THE ASSE SSEE IS KEJALS FURNISHINGS AND THE NAME OF THE PARTNER IS RASHMI KANT GANDHI AND THE SAME IS NOT ON THE SAID LOOSE PAPERS FOUN D WITH SONI GROUP. THERE IS NO NAME OF THE ASSESSEE NOTED ON T HE DOCUMENTS FOUND WITH SONI GROUP. THE LEARNED A.O. H AS ALSO REFERRED TO OTHER DOCUMENTS WHICH ARE WRITTEN IN MAR ATHI LANGUAGE WHEREIN 'KEJAL'S RASHMI G' IS NOTED. HE HAS AL SO REFERRED TO ONE ENTRY WHEREIN 'USHI COVER' THAT MEANS PILLOW C OVER TO SUBSTANTIATE HIS POINT THAT THE ENTRIES ARE PERTAINING TO THE ASSESSEE. HOWEVER WE SUBMIT THAT KEJAL'S FURNISHING DOES NOT SELL ANY PILLOW COVERS. THE ASSESSEE FIRM IS ENGAGED IN TRADI NG OF CURTAIN CLOTH AND SOFA FABRIC AND WE CONFIRM THAT WE HAVE NEVER SOLD ANY PILLOW COVERS. THIS FACT CAN BE ALSO ESTABLISH ED FROM OUR SALE BILLS. THERE MAY BE SO MANY PERSONS OR CONCERNS WHOSE NAME MAY BE KEJAL'S OR RASHMI G. EVEN ASSUMING WITHOUT ADMIT TING THAT THE NOTINGS PERTAIN TO THE ASSESSEE GROUP THERE ARE TWO CONCERNS NAMELY KEJAL'S FURNISHINGS AND KEJAL'S LINEN AND THEN THERE IS SHRI RASHMIKANT GANDHI PARTNER IN ONLY ONE FIRM VIZ. KEJALS FURNISHINGS THUS IN REALITY WHETHER NOTINGS INDICATE ONE OF THE TWO FIRMS OR THE PARTNER OR SOME ONE ELSE IS ALSO NOT CL EAR FROM THE DOCUMENTS. IT IS A SETTLED LAW THAT THE BURDEN I S ON THE DEPT. TO PROVE THE MEANING IT ATTACHES TO THE NOTINGS ON THE L OOSE PAPERS. RELIANCE IS PLACED ON THE DECISION OF ITAT IN THE CA SE OF MONGA METALS [67 TTJ 247]. THERE IS NO DOUBT THAT U/S 132(4) THE LOOSE PAPERS FOUND DURING THE SEARCH ARE TRUE AND GENUINE B UT SUCH PRESUMPTION IS AGAINST THE PERSON FROM WHOM THESE PAPERS ARE FOUND AND NOT AGAINST THE THIRD PARTIES AND SECONDLY DESPITE THIS PRESUMPTION THE BURDEN IS ON THE REVENUE TO PROVE TH E MEANING OF THE NOTINGS ON THE LOOSE PAPERS. NOW IN THIS CASE A S WE HAVE SHOWN NO WHERE IN THE NOTINGS THE ASSESSEES NAME FIGUR ES CLEARLY AND IF THAT BE SO THE QUESTION OF HOLDING A VIEW THAT THESE NOTINGS PERTAIN TO THE TRANSACTIONS OF THE ASSESSEE DOES NO T CROP UP. HENCE THE ASSESSEE SUBMITS THAT THE ADDITION IS PUREL Y MADE ON SUSPICION AND PRESUMPTION AND THEREFORE THE ADDITI ON MADE IS NOT JUSTIFIED. 9.3 HE SUBMITTED THAT THE NOTINGS DO NOT REFER TO K EJALS FURNISHINGS AND MAINLY RELATE TO RASHMI GANDHI. THE REFORE IN ABSENCE OF ANY CORROBORATIVE EVIDENCE ADDITION IN THE HANDS OF THE ASSESSEE IS NOT PERMISSIBLE. HE SUBMI TTED THAT UNDER PROVISIONS OF SECTION 132(4) LOOSE PAPERS FOU ND DURING THE SEARCH ARE TRUE AND GENUINE BUT SUCH PRESUMPTIO N IS 15 AGAINST THE PERSON FROM WHOM THESE PAPERS ARE FOUND AND NOT AGAINST THIRD PARTIES. THE BURDEN IS ON THE RE VENUE TO PROVE THE MEANING OF THE NOTINGS ON THE LOOSE PAPER S. REFERRING TO THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF JAGANNATH EKNATH LAHOTI (HUF) VIDE ITA NO.453/PN/2012 ORDER DATED 11-02-2014 HE SUBMITTED THAT UNDER IDENTICAL FACTS AND CIRCUMSTANCES THE ADDITIO N MADE BY THE AO AND UPHELD BY THE CIT(A) WAS DELETED. 10. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHE R HAND HEAVILY RELIED ON THE ORDER OF THE LD.CIT(A). 11. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES PERUSED THE ORDERS OF THE ASSESSING OFFI CER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE AS SESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. WE FIND THE AO IN THE INSTANT CASE MADE AN ADD ITION OF RS.1 04 500/- ON THE BASIS OF CERTAIN DOCUMENTS SEI ZED FROM THE PREMISES OF ONE MR. SHREERAM H. SONI. WE FIND THE AO CONFRONTED THE NOTINGS OF THE SEIZED DOCUMENTS TO T HE ASSESSEE. THE ASSESSEE VIDE HIS REPLY DATED 07-12- 2007 HAD SUBMITTED THAT IT HAS NEVER LENT ANY FUNDS TO SONI GROUP. IT WAS CATEGORICALLY STATED THAT THE NOTINGS ARE RELA TING TO ONE MR. RASHMI GANDHI AND IT DOES NOT PERTAIN TO THE AS SESSEE FIRM. IT WAS ALSO STATED THAT NO EVIDENCE WHATSOEV ER WAS AVAILABLE WITH THE DEPARTMENT THAT THE SONI GROUP H AS ACCEPTED THAT THIS PARTICULAR ASSESSEE HAS ADVANCED FUNDS TO SONI GROUP. THE ASSESSEE VIDE ANOTHER LETTER DATED 26-12- 2007 HAS ALSO ASKED THE AO TO ALLOW HIM TO CROSS EX AMINE 16 SHREERAM H. SONI IN CASE SHREERAM H. SONI HAD STATE D THAT THE ASSESSEE HAS ADVANCED ANY MONEY TO HIM OR SOME OF THE NOTINGS IN SEIZED PAPER PERTAIN TO THE ASSESSEE. F ROM THE ASSESSMENT ORDER AS WELL AS THE ORDER OF THE LD.CIT (A) WE FIND NO SUCH OPPORTUNITY WHATSOEVER WAS GRANTED TO THE ASSESSEE TO CROSS EXAMINE MR. SONI. FROM THE SEIZE D DOCUMENTS WE FIND AT ONE PLACE IT IS WRITTEN KAJA LS RASHMI G (PAGES 33 & 34 OF PAPER BOOK). SIMILARLY AT ANO THER PLACE IT IS WRITTEN RASHMI GANDHI G.KEJALS (PAGE 58 OF THE PAPER BOOK) IN HINDI. SIMILARLY IN ANOTHER PLACE IT IS WRITTEN KEJALS USHICOVER PARTLY IN ENGLISH AND PARTLY IN HINDI AT PAGE 62. FROM THE ABOVE IT IS SEEN THAT THE SEIZE D DOCUMENT CLEARLY SHOW DIFFERENT NAMES. THE SUBMISS ION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE ASSESSEE DOES NOT DEAL WITH PILLOW COVERS (I.E. USHICOVER IN HINDI) C OULD NOT BE CONTROVERTED BY THE LD. DEPARTMENTAL REPRESENTATIVE . THE ASSESSING OFFICER HAS ALSO NOT SUMMONED MR. RASHMIK ANT GANDHI TO FIND OUT THE VERACITY OF THE SUBMISSION O F THE ASSESSEE FIRM THAT IT HAS NOT LENT ANY MONEY TO MR. SONY. THE NOTINGS IN OUR OPINION DO NOT CLEARLY INDICAT E THAT THE FIRM HAS ADVANCED ANY MONEY. IT MAY AT BEST BE THA T OF ONE INDIVIDUAL MR. RASHMI GANDHI IN WHOSE HANDS ADDITIO N COULD HAVE BEEN MADE. HOWEVER THE ASSESSING OFFICER HAS NOT EXAMINED THAT PERSON. 11.1 WE FIND AN IDENTICAL ISSUE HAD COME UP BEFORE THE TRIBUNAL IN THE CASE OF JAGANNATH EKNATH LAHOTI (HU F) (SUPRA). WE FIND UNDER IDENTICAL FACTS AND CIRCUMS TANCES THE TRIBUNAL HAS DELETED THE ADDITION BY OBSERVING AS U NDER: 17 8. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BO TH THE SIDES PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. WE FI ND THE ASSESSING OFFICER IN THE INSTANT CASE MADE ADDITION OF RS. 15 LAKHS AND CORRESPONDING INTEREST AS WELL AS BROKERAGE ON THE SAME ON THE BASIS OF CERTAIN DOCUMENTS SEIZED FROM THE PREMISES OF MR. SHRIRAM H. SONI. IT IS AN ADMITTED FACT THAT DURIN G THE COURSE OF SEARCH IN THE PREMISES OF MR. SHRIRAM H. SONI HIS STATE MENT WAS RECORDED U/S.132(4) AND HE HAD REFUSED SPECIFICALLY TO IDENTIFY EACH AND EVERY INVESTOR/OPERATOR. ALTHOUGH CREDITS A PPEARING IN THE SEIZED DIARIES IN THE NAME OF DIFFERENT INVESTORS WAS TREATED AS UNDISCLOSED INCOME OF MR. SHRIRAM H. SONI BY THE CIT( A) HOWEVER THE TRIBUNAL VIDE ORDER DATED 17-06-2010 H AS REVERSED THE SAME BY HOLDING THAT PERSONS ARE IDENTIFIABLE AND ALL THE MATERIALS AVAILABLE CLEARLY SHOW THAT MR. SHRIRAM H. SONI HAS ONLY EARNED COMMISSION. BE THAT AS IT MAY BE MR. SHRIRAM H. SONI HAD REFUSED TO IDENTIFY EACH AND EVERY PERSON. WE FIND T HE SEIZED DIARIES/PAPERS CLEARLY SHOW DIFFERENT NAMES SUCH AS JAGA NNATH LAHOTI AND JAGUSETH LATI. HOWEVER WE FIND NO AD DITION HAS BEEN MADE ON ACCOUNT OF ENTRIES APPEARING IN THE NAM E OF THE ASSESSEE I.E. JAGANNATH LAHOTI. EVEN THE ENTRIES APPEA RING IN THE NAME OF THE ASSESSEE FOR SUBSEQUENT YEARS HAS ALSO NOT BEEN BROUGHT TO TAX BY REOPENING THE ASSESSMENT A STATEMENT MADE BY LD. AUTHORISED REPRESENTATIVE AND NOT CONTROVERTED BY THE LD. DEPARTMENTAL REPRESENTATIVE. WE THEREFORE FIND ME RIT IN THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE DEPARTMENT BY NOT REOPENING THE ASSESSMENT IN THE SUBSEQ UENT YEAR HAS ACCEPTED THAT JAGANNATH LAHOTI IS DIFFEREN T FROM JAGUSETH LATI. FURTHER THE ASSESSEE FROM THE VERY BE GINNING WAS DENYING THAT HE IS THE SAME PERSON. WE FIND NEITHE R ANY PROMISSORY NOTE NOR ANY SECURITY IN THE NAME OF THE ASSE SSEE NOR ANY CONFIRMATION OR ANY OTHER CORROBORATIVE EVIDENC E WAS FOUND FROM THE PREMISES OF MR. SHRIRAM H. SONI SO AS TO PROVE THAT THE ASSESSEE IS THE SAME PERSON ESPECIALLY WHEN MR. SHRIRAM H. SONI IN HIS STATEMENT RECORDED U/S.132(4) HAS REFUSED TO IDE NTIFY EACH AND EVERY INVESTOR. 8.1 WE FIND UNDER SIMILAR FACTS THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF ASHOK KESHVLAL OSWAL (SUPRA) HA S DISMISSED THE APPEAL FILED BY THE REVENUE WHEREIN THE CIT(A) HAS DELETED THE ADDITION OF RS.22 02 2000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF ADDITIONS MADE ON THE BASIS OF D OCUMENTS FOUND FROM THE RESIDENCE OF SHRIRAM SONI DURING THE COURSE OF SEARCH AND SEIZURE OPERATION. THE RELEVANT OBSERVATIO N OF THE TRIBUNAL READS AS UNDER : 5. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTIES A ND PERUSED THE RECORD. THE FIRST ISSUE WE HAVE TO DECIDE IS WHETHER THE IDENTITY OF THE ASSESSEE IS PROVED THAT HE IS THE SAME OSWAL ASHOK OR OSWAL ASK. AS PER THE REMAND REPORT GIVEN BY THE ASSESSING OFFICER NO PROMISSORY NOTE OR BLANK CHEQUES ON THE NAMES OF THE ASSESSEE WERE FOUND. ON PERUSAL OF THE REMA ND REPORT WE FIND THAT ASSESSING OFFICER HIMSELF HAS EXAMI NED MANY PERSONS ON SUSPICION WHOSE NAMES WERE ASHOK OSWAL AND THE MIDDLE NAME WAS DIFFERENT. ADMITTEDLY IN THE SEIZED DOCUMENT 18 THERE IS NO MIDDLE NAME. THE ASSESSEE FILED THE SPECIFIC AFFIDAVIT DENYING HAVING ANY RELATION WITH SHRIRAM H. SONI. IN THE REMAND PROCEEDINGS THE AO EXAMINED BANK ACCOUNT AND HAS REP ORTED THAT NO TRANSACTION WAS FOUND BETWEEN SHRIRAM H. SONI AND THE ASSESSEE. IT IS VERY MUCH INTERESTING THAT WHEN THE AO HI MSELF IS NOT SURE ABOUT THE IDENTITY OF OSWAL ASHOK THE NA ME WHICH IS FOUND IN THE SEIZED DOCUMENT HOW THE ASSESSEE CAN BE FA STENED WITH THE LIABILITY OF UNACCOUNTED TRANSACTIONS. WE FIND THAT THE AO HIMSELF ADMITS THAT THE ASSESSEE HAS SPECIFICALLY DENIED . LAW IS WELL SETTLED THAT BURDEN IS ON THE REVENUE TO ESTABL ISH THE IDENTITY IF ANY PERSON IS TO BE CHARGED UNDER THE AC T. THE ACTION OF THE AO EXAMINING THE DIFFERENT PERSONS HAVING THE SAME NAME PRIMA-FACIE ESTABLISHES THAT ASSESSING OFFICER HIMSELF IS N OT SURE THAT THE ASSESSEE IS THE SAME PERSON WHOSE NAME WAS FOUND NO TED IN THE SEIZED DOCUMENT. MOREOVER NOTHING IS ON RECO RD TO SHOW THAT SHRIRAM H. SONI HAS STATED ABOUT THE ASSESSEE THAT W HATEVER THE NOTINGS FOUND WERE IN RESPECT OF THE ASSESSEE. NO CORROBORATIVE MATERIAL IS FOUND. IN OUR OPINION TH E LD.CIT(A) HAS RIGHTLY DELETED THE ENTIRE ADDITION AS THERE IS NO EV IDENCE AGAINST THE ASSESSEE. WE FIND NO MERIT IN THE APPEAL FILED BY THE REVENUE. ACCORDINGLY THE SAME IS DISMISSED. 8.2 SINCE IDENTITY OF THE ASSESSEE WAS NOT PROVED BY MR. SHRIRAM H. SONI AT ANY POINT OF TIME NOR ANY CORROB ORATIVE EVIDENCE WAS FOUND FROM THE RESIDENCE OF MR.SHRIRAM H . SONI SO AS TO PROVE THAT THE ASSESSEE IS THE SAME PERSON AS PER T HE NAME APPEARING IN THE SEIZED DOCUMENT THEREFORE RESPECTF ULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH OF TH E TRIBUNAL IN THE CASE OF ASHOK KESHVLAL OSWAL (SUPRA) AND IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT TO OUR NOTICE WE SET-ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICER TO DELETE T HE ADDITION. 11.2 SINCE THE FACTS OF THE INSTANT CASE ARE IDENTI CAL TO THE FACTS IN THE CASE OF JAGANNATH EKNATH LAHOTI (HUF) (SUPRA) THEREFORE FOLLOWING THE SAME RATIO WE HOLD THAT N O ADDITION IS CALLED FOR IN THE INSTANT CASE. WE ACCORDINGLY SET ASIDE THE ORDER OF THE CIT(A) ON THIS ISSUE AND DIRECT THE AO TO DELETE THE ADDITION OF RS.1 04 500/-. GROUNDS RAISED BY T HE ASSESSEE ARE ACCORDINGLY ALLOWED. ITA NO.929/PN/211 (A.Y. 2001-02) : 12. GROUNDS OF APPEAL NO.1 & 2 RELATE TO VALIDITY O F REOPENING WHICH WAS NOT PRESSED BY THE LD. COUNSEL FOR THE ASSESSEE. 19 12.1 SINCE THE DEPARTMENTAL REPRESENTATIVE HAS NO OBJECTION FOR THE SAME THE ABOVE GROUNDS FILED BY THE ASSESSEE DISMISSED AS NOT PRESSED. 13. GROUNDS OF APPEAL NO.3 TO 7 BY THE ASSESSEE REL ATE TO THE ADDITION OF RS.33 18 000/- U/S.69 BY THE AO AND UPHELD BY THE CIT(A). 13.1 AFTER HEARING BOTH THE SIDES WE FIND THE ABOV E GROUNDS ARE IDENTICAL TO THE GROUNDS OF APPEAL NO. 3 TO 7 I N ITA NO.928/PN/2011. WE HAVE ALREADY DECIDED THE ISSUE AND THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. FOLLOW ING THE SAME RATIO THE ABOVE GROUNDS BY THE ASSESSEE ARE A LLOWED. 14. IN THE RESULT BOTH THE APPEALS FILED BY THE AS SESSEE ARE ALLOWED. PRONOUNCED IN THE OPEN COURT ON 28-11-2014. SD/- SD/- (R.S. PADVEKAR) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE DATED: 28 TH NOVEMBER 2014 SATISH COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. CIT(A)-I PUNE 4. CIT-I PUNE 5. THE D.R A PUNE BENCH 6. GUARD FILE BY ORDER // TRUE COPY // ASSISTANT REGISTRAR ITAT PUNE BENCHES PUNE