SHRI DR. YOGIRAJ SHARMA, Bhopal v. THE ACIT 1(2), Bhopal

ITSSA 161/IND/2013 | 2006-2007
Pronouncement Date: 17-11-2014 | Result: Partly Allowed

Appeal Details

RSA Number 16122716 RSA 2013
Assessee PAN ALOPS1636H
Bench Indore
Appeal Number ITSSA 161/IND/2013
Duration Of Justice 1 year(s) 4 month(s) 6 day(s)
Appellant SHRI DR. YOGIRAJ SHARMA, Bhopal
Respondent THE ACIT 1(2), Bhopal
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 17-11-2014
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted DB
Tribunal Order Date 17-11-2014
Assessment Year 2006-2007
Appeal Filed On 11-07-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI P.K. BANSAL HONBLE ACCOUNTANT MEMBER AND SHRI MUKUL SHRAWAT HONBLE JUDICIAL MEMBER IT(SS) NO. 159 TO 163 /IND/201 3 : (A.YS : 2004 - 05 TO 2008 - 09) DR. YOGIRAJ SHARMA A - 70 SHAKTI NAGAR BHOPAL (APPELLANT) PAN : ALOPS1636H VS ASST . COMMISSIONER OF INCOME TAX - 1(2) BHOPAL ( RESPONDENT ) IT(SS) NO. 224 TO 229/IND/2013 : (A.YS : 2003 - 04 TO 2008 - 09) ASST . COMMISSIONER OF INCOME TAX - 1(2) BHOPAL ( APPELLANT ) VS DR. YOGIRAJ SHARMA A - 70 SHAKTI NAGAR BHOPAL (RESPONDENT) PAN : ALOPS1636H CO NOS. 102 TO 106/IND/2013 (OUT OF IT(SS) NO. 159 TO 163/IND/2013) : (A.YS : 2003 - 04 TO 2006 - 07 & 2008 - 09) DR. YOGIRAJ SHARMA A - 70 SHAKTI NAGAR BHOPAL (CROSS OBJECTOR) PAN : ALOPS1636H VS ASST . COMMISSIONER OF INCOME TAX - 1(2) BHOPAL ( RESPONDENT ) ASSESSEE BY : B.K. NEMA & K.P. DEWANI ADV. REVENUE BY : LAL CHAND CIT DR DATE OF HEARING : 17 /09/2014 DATE OF PRONOUNCEMENT : 17/11 /2014 O R D E R PER BENCH ALL THESE APPEALS HAVE BEEN FILED AGAINST THE COMMON ORDER OF CIT(A) DT. 18.3.2013. S INCE THE FACTS AND SOME OF THE GROUNDS INVOLVED IN ALL THESE APPEALS ARE COMMON THEREFORE ALL THE APPEALS ARE DISPOSED OFF BY THIS COMMON ORDER. 2 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HAS BEEN IN STATE GOVERNMENT SERVICE SINCE 1982 AND WA S POSTED AS DIRECTOR HEALTH AND FAMILY WELFARE FROM 2005. THERE HAD BEEN A SEARCH AND SEIZURE OPERATION U/S 132 OF THE INCOME TAX ACT AT THE RESIDENTIAL PREMISES OF THE ASSESSEE AT A - 70 SHAKTI NAGAR BHOPAL ON 7.9.2007. SURVEY U/S 133A WAS ALSO CONDUCT ED AT THE OFFICE PREMISES OF THE ASSESSEE BUSINESS PREMISES OF M/S. VIGNESH WAREHOUSE AND DISTRIBUTORS PVT. LTD. M/S. GAJANAN DISTRIBUTORS AND DEVELOPERS PVT. LTD. IN WHICH THE WIFE AND SON OF THE ASSESSEE ARE DIRECTORS. VARIOUS INCRIMINATING DOCUMENTS CASH FOREIGN EXCHANGE AND OTHER ASSETS WERE FOUND AND SEIZED FROM THE PREMISES AT A - 70 SHAKTI NAGAR BHOPAL. IN CONSEQUENCE OF SEARCH OPERATION U/S 132 THE AO INITIATED PROCEEDINGS U/S 153A AGAINST THE ASSESSEE. IN RESPONSE TO NOTICE U/S 153A ASSESS EE FILED RETURN S AS UNDER : - A.Y DATE OF FILING RETURN RETURNED INCOME REMARK 2002 - 03 20.10.08 3 09 248/ - THE RETURN WAS FILED ON THE SAME INCOME AS RETURNED ORIGINALLY 2003 - 04 20.10.08 2 97 212/ - THE RETURN WAS FILED ON THE SAME INCOME AS RETURNED ORIGINALLY 2004 - 05 20.10.08 2 87 919/ - THE RETURN WAS FILED ON THE SAME INCOME AS RETURNED ORIGINALLY 2005 - 06 20.10.08 2 80 830/ - THE RETURN WAS FILED ON THE SAME INCOME AS RETURNED ORIGINALLY 2006 - 07 20.10.08 9 14 279/ - THE RETURN WAS FILED ON THE SAME INCOME AS RETURNED ORIGINALLY 2007 - 08 20.10.08 4 51 240/ - THE RETURN WAS FILED ON THE SAME INCOME AS RETURNED ORIGINALLY FOR A.Y 2008 - 09 THE REGULAR RETURN WAS FILED ON 27.10.2008 AT AN INCOME OF RS.5 48 430/ - . AGAINST THE SAID RETURN S THE AO COMPLETED ASSESSMENT BY MAKING THE FOLLOWING ADDITIONS DETERMINING THE INCOME FOR EACH OF THE ASSESSMENT YEAR AS UNDER : 3 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) A.Y. 2002 - 03 INCOME SHOWN IN THE RETURN RS. 3 09 248/ - ADD UNEXPLAINED TUITION FEE RS. 60 000/ - UNEXPLAINED AGRICULTURE INCOME RS. 4 20 700/ - TOTAL INCOME OF ASSESSEE RS. 7 89 948/ - OR SAY RS. 7 89 948/ - A.Y. 2003 - 04 INCOME SHOWN IN THE RETURN RS. 2 97 212.00 ADD BOGUS SHARE CAPITAL GAJANAN RS. 20 00 000.00 BOGUS SHARE CAPITAL SHREE VIGHNESH RS. 15 00 000.00 UNDISCLOSED INCOME OF GAURAV SHARMA RS. 27 00 000.00 UNEXPLAINED AGRICULTURE INCOME RS. 3 03 694.00 TOTAL INCOME OF ASSESSEE RS. 68 00 906.00 OR SAY RS. 68 00 906.00 A.Y. 2004 - 05 INCOME SHOWN IN THE RETURN RS. 2 87 919.00 ADD BOGUS SHARE CAPITAL GAJANAN RS. 10 00 000.00 BOGUS SHARE CAPITAL SHREE VIGHNESH RS. 10 00 000.00 SURRENDERED MADE BY GAURAV SHARMA RS. 8 19 000.00 UNEXPLAINED AGRICULTURE INCOME RS. 5 33 431.00 TOTAL INCOME ASSESSEE RS. 36 40 350.00 OR SAY RS. 36 40 350.00 A.Y. 2005 - 06 INCOME SHOWN IN THE RETURN RS. 2 80 830.00 ADD UNEXPLAINED CASH IN BANK OF SMT. SHASHI SHARMA RS. 2 30 029.00 BOGUS SHARE CAPITAL GAJANAN RS. 50 00 000.00 BOGUS SHARE CAPITAL SHREE VIGHNESH RS. 1 50 00 000.00 SURRENDERED MADE BY GAURAV SHARMA RS. 24 57 384.00 UNEXPLAINED AGRICULTURE INCOME RS. 4 03 200.00 TOTAL INCOME ASSESSEE RS. 2 33 71 443.00 OR SAY RS. 2 33 71 443.00 A.Y. 2006 - 07 INCOME SHOWN IN THE RETURN RS. 9 14 279.00 ADD UNEXPLAINED CASH IN BANK OF SMT. SHASHI SHARMA RS. 80 000.00 UNEXPLAINED CASH IN BANK OF SMT.SHASHI SHARMA - UTI BANK RS. 57 1797.00 UNEXPLAINED INVESTMENT IN IVB BY SHASHI SHARMA RS. 1 90 647.00 BOGUS SHARE CAPITAL GAJANAN RS. 80 00 000.00 SURRENDERED MADE BY GAURAV SHARMA RS. 60 00 000.00 TOTAL INCOME ASSESSEE RS. 1 52 42 123.00 OR SAY RS. 1 52 42 123.00 4 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) A.Y. 2007 - 08 INCOME SHOWN IN THE RETURN RS. 4 51 240.00 ADD UNEXPLAINED CASH IN BANK OF SMT. SHASHI SHARMA RS. 7 76 472.00 SURRENDERED MADE BY GAURAV SHARMA RS. 1 00 000.00 TOTAL INCOME ASSESSEE RS. 13 27 712.00 OR SAY RS. 13 27 712.00 A.Y. 2008 - 09 INCOME SHOWN IN THE RETURN RS. 4 51 240.00 ADD UNEXPLAINED CASH FOUND RS. 1 13 00 000.00 UNEXPLAINED FOREIGN EXCHANGE RS. 6 00 000.00 AS PER LPS 1/1 AND LPS 1/1 BACK RS. 5 85 00 000.00 AS PER LPS 1/1 PAGE 4 AND 5 RS. 2 66 54 000.00 AS PER LPS 1/1 PAGE 6 RS. 3 33 83 000.00 AS PER LPS 1/1 PAGE 6 BACK RS. 97 83 000.00 AS PER LPS 1/1 PAGE 12 RS. 11 18 400.00 AS PER LPS 1/1 PAGE 13 BACK RS. 1 23 000.00 AS PER LPS 1/7 PAGE 6 BACK RS. 1 24 00 000.00 TOTAL INCOME ASSESSEE RS. 14 26 05 130.00 OR SAY RS. 14 26 05 130.00 AGAINST EACH OF THE ASSESSMENT YEAR S THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. BOTH THE ASSESSEE AS WELL AS THE REVENUE HAVE COME IN APPEAL AGAINST THE ORDER OF CIT(A). REVENUES APPEALS : 3. GROUND NO. 1 IN A.YS 2003 - 04 2004 - 05 2005 - 06 AND 2006 - 07 IN REVENUES APPEALS RELATE TO THE DELETION OF THE ADDITION OF RS. 20 LACS RS. 10 LACS RS. 50 LACS AND RS. 80 LACS RESPECTIVELY MADE BY THE AO ON ACCOUNT OF BOGUS SHARE CAPITAL OF M/S. GAJANAN DISTRIBUTORS AND DEVELOPERS PVT. LTD. SI MILARLY GROUND NO. 2 IN A.YS 2003 - 04 2004 - 05 2005 - 06 RELATE TO THE DELETION OF ADDITION OF RS. 15 LACS RS. 10 LACS AND RS. 1.50 CRORES RESPECTIVELY MADE BY THE AO ON ACCOUNT OF BOGUS SHARE CAPITAL OF M/S. VIGNESH WAREHOUSE AND DISTRIBUTORS PVT. LTD. 5 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) 4. THE AO NOTED THAT M/S. GAJANAN DISTRIBUTORS AND DEVELOPERS PVT. LTD. AND M/S. VIGNESH WAREHOUSE AND DISTRIBUTORS PVT. LTD. ARE TWO COMPANIES WHERE SMT. SHASHI SHARMA WIFE OF THE ASSESSEE AND SHRI GAURAV SHARMA SON OF THE ASSESSEE ARE DIRECTORS. THE AO NOTED THAT NO SUBSTANTIAL BUSINESS WAS CARRIED OUT BY THESE COMPANIES. IN BOTH THE COMPANIES SHARE CAPITAL HAS BEEN INDUCTED WHICH WAS RECEIVED FROM INDORE BASED AND KOLKATA BASED COMPANIES. THE AO WAS OF THE OPINION THAT THE SHARE CAPITAL OF THESE T WO COMPANIES W AS UNEXPLAINED INCOME OF THE ASSESSEE AND THEREFORE HE MADE ADDITION SUBSTANTIVELY IN THE HANDS OF THE ASSESSEE. THE AO ASSESSED THE SHARE APPLICATION MONEY RECEIVED FROM THE FOLLOWING PERSONS/CONCERNS TO BE OF THE ASSESSEE S INCOME: IN THE CASE OF M/S. GAJANAN DISTRIBUTORS AND DEVELOPERS A.Y. 2003 - 04 : NAME OF THE SHAREHOLDER ADDRESS DATE OF ALLOTMENT NO. OF SHARE FACE VALUE SHARE APPLICATION TOTAL AMOUNT JUBILANT MULTITRADE PVT. LTD. SAFEX GHAT KOPAR ANDHERI LINK ROAD ASALPHA SAK INOKA ANDHERI EAST MUMBAI 31 - 12 - 02 1000000 1000000 DIMPLE MULTITRADE PVT. LTD. ROOM NO.5 3 RD FLOOR HANUMAN BUILDING 2 PICKET ROAD MUMBAI 31 - 01 - 03 1000000 1000000 A.Y. 2004 - 05 : NAME OF THE SHAREHOLDER ADDRESS DATE OF ALLOTMENT NO. OF SHARE FACE VALUE SHARE APPLICATION TOTAL AMOUNT JUBILANT MULTITRADE PVT. LTD. SAFEX GHAT KOPAR ANDHERI LINK ROAD ASALPHA SAK INOKA ANDHERI EAST MUMBAI 06 - 09 - 03 1000000 A.Y. 2005 - 06 : NAME OF THE SHAREHOLDER ADDRESS DATE OF ALLOTMENT NO. OF SHARE FACE VALUE SHARE PREMIUM SHARE APPLICATION TOTAL AMOUNT OPTIMATE TEXTILE INDUSTRIES LTD. 2 DEVKARAN MENTION IIND FLOOR 63 PRINCE STREET MUMBAI 31 - 03 - 05 66000 10 2640000 660000 3300000 RAPID COMMERCIAL & FINLEASE PVT. LTD. 20 DAWA ZAZAR 4 TH FLOOR 1314 RNT MARG INDORE 31 - 03 - 05 34000 10 1360000 340000 1700000 6 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) A.Y. 2006 - 07 : NAME OF THE SHAREHOLDER ADDRESS DATE OF ALLOTMENT NO. OF SHARE FACE VALUE SHARE CAPITAL SHARE PREMIUM TOTAL AMOUNT OPTIMATE TEXTILE INDUSTRIES LTD. 2 DEVKARAN MENTION IIND FLOOR 63 PRINCE STREET MUMBAI 31 - 02 - 06 25000 10/90 2500000 2250000 2500000 SPECTRUM CHEMICALS PVT. LTD. 2 DEVKARAN MENTION IIND FLOOR 63 PRINCE STREET MUMBAI 21 - 02 - 06 25000 10/90 250000 2250000 2500000 OPTIMATE TEXTILE INDUSTRIES LTD. 2 DEVKARAN MENTION IIND FLOOR 63 PRINCE STREET MUMBAI 21 - 02 - 06 20000 10/90 200000 1800000 2000000 RAPID COMMERCIAL & FINLEASE PVT. LTD. 20 DAWA ZAZAR 4 TH FLOOR 1314 RNT MARG INDORE 31 - 03 - 06 10000 10 100000 900000 1000000 8000000 IN THE CASE OF M/S. SHREE VIGNESH WAREHOUSE & DISTRIBUTORS PVT. LTD . NAME OF COMPANY AY 2003 - 04 AY 2004 - 05 AY 2005 - 06 M/S. ORCHID CONSULTANCY PVT. LTD. 1500000 1000000 RAPID COMMERCIAL & FINLEASE PVT. LTD. 4500000 RCC FINANCE 1500000 SPECTRUM CHEMICALS PVT. LTD. 1500000 OPTIMATE TEXTILES INDUSTRIES PVT. LTD. 2500000 HINDUSTAN CONTINENTAL PVT. LTD. 5000000 TOTAL 1500000 1000000 15000000 TOTAL 17500000 IT WAS FURTHER NOTED BY AO THAT SHRI GAURAV SHARMA WAS 23 YEARSOLD IN A.Y 2006 - 07 AND WAS A STUDENT STUDYING IN AUSTRALIA FROM MAY 2005 TILL NOVEMBER 2006. IN HER STATEMENT RECORDED DURING THE COURSE OF SEARCH SMT. SHASHI SHARMA ACCEPTED THAT SHE WAS N OT AWARE OF THE AFFAIRS OF THE COMPANY AND MOST OF HER TIME IS DEVOTED BY HER FOR LOOKING AFTER HER AILING DAUGHTER AND THEREFORE SHE WAS NOT ABLE TO TELL EVEN THE NAME AND BUSINESS ACTIVITIES OF THE COMPANY IN WHICH SHE IS ONE OF THE DIRECTOR S . THE AO FU RTHER NOTED THAT INSPITE OF HAVING LOSS AND MINOR PROFIT THE COMPANY HAD RECEIVED SHARE CAPITAL AT 10 TIMES OF THE FACE VALUE WHEN EVEN NO DIVIDEND WAS DECLARED BY THESE COMPANIES . THE SUBSCRIBERS ARE NOT RELATED PERSONS BUT ARE COMPANIES BASED IN INDORE MUMBAI AND KOLKATA. THE AO CONDUCTED INQUIRY IN RESPECT OF EACH OF THE SUBSCRIBER S TO THE COMPANY WHO INVESTED SHARE APPLICATION MONEY. 7 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) 5. DURING A.Y 2003 - 04 IT WAS NOTED THAT M/S. GAJANAN DISTRIBUTORS AND DEVELOPERS PVT. LTD. RECEIVED SHARE APPLICATION MONEY OF RS. 10 LACS FROM M/S. JUBILIANT MULTITRADE PVT. LTD.. SIMILARLY ANOTHER RS. 10 LACS WAS RECEIVED AS SHARE APPLICATION MONEY FROM M/S. DIMPLE MULTITRADE PVT. LTD. SUBSEQUENTLY SHARES OF RS.10/ - EACH WERE ISSUED IN A.Y 2005 - 06 AT PREM IUM OF RS. 90/ - . THE COMPANY WAS REQUIRED TO FURNISH CONFIRMATION WHICH WAS NOT FURNISHED. SURVEY WAS CONDUCTED BY ITO INVESTIGATION UNIT - III MUMBAI AT THE REGISTERED OFFICE OF M/S. JUBILIANT MULTITRADE PVT. LTD. OF WHICH ONE SHRI D.N. NAYAK WAS FOUND T O BE THE OWNER OF THE PREMISES. IN HIS STATEMENT SHRI D.N. NAYAK ADMITTED THAT NO BOOKS OF ACCOUNTS DOCUMENTS BANK DETAILS OF M/S. JUBILIANT MULTITRADE PVT. LTD. ARE KEPT. HE ALSO ADMITTED THAT NO BUSINESS ACTIVITY OF THE COMPANY WAS CARRIED ON AT THI S ADDRESS AND THAT HE HAS PROVIDED MAIL MESSAGING FACILITIES ON CHARGES FOR THIS COMPANY FOR WHICH THERE WAS AN AGREEMENT BETWEEN SHRI D.N. NAYAK AND SHRI RAJESH JAIN. HE ALSO STATED THAT SIMILAR FACILITIES HAVE ALSO BEEN PROVIDED TO OTHER COMPANIES. THE AO ALSO NOTED THAT THOUGH THIS COMPANY IS REGISTERED AT MUMBAI BUT THE BANK ACCOUNT FROM WHICH THE CHEQUES HAVE BEEN ISSUED TO M/S. GAJANAN DISTRIBUTORS AND DEVELOPERS PVT. LTD. IS MAINTAINED AT JHARNESHWAR NAGRIK SAHKARI BANK BHOPAL. INSPECTOR MADE INQU IRY AT THE GIVEN ADDRESS AT BHO PAL AND IT WAS FOUND THAT IT WAS UNDER CONSTRUCTION. THE AO THEREFORE OBSERVED THAT THE ADDRESS GIVEN BY THE SAID COMPANY IN INCOME TAX RETURN AND BANK ACCOUNT WAS FALSE. THE STATEMENT OF SHRI RAJENDRA PRASAD AGRAWAL WHO SIGNED THE RETURN WAS RECORDED. HE STATED THAT HE IS DIRECTOR OF THE COMPANY AND THE COMPANY IS CONTROLLED BY SHRI RAJESH JAIN AND IT EXISTS ONLY ON PAPER. M/S. DIMPLE MULTITRADE PVT. LTD. WAS ALSO HAVING THE SAME ADDRESS AS M/S. JUBILIANT MULTITRADE PVT . LTD. THE AO THEREFORE TOOK THE VIEW THAT BOTH THESE COMPANIES WHO MADE SHARE APPLICATION IN M/S. GAJANAN DISTRIBUTORS AND DEVELOPERS PVT. LTD. WERE NOT GENUINE. SIMILARLY FOR A.Y 2004 - 05 INVESTMENT MADE BY M/S. JUBILIANT MULTITRADE PVT. LTD. AMOUNTIN G TO RS. 10 LACS WERE ALSO TREATED TO BE NON - GENUINE. 8 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) 6 . DURING A.Y 2005 - 06 M/S. GAJANAN DISTRIBUTORS AND DEVELOPERS PVT. LTD. RECEIVED SHARE CAPITAL OF RS. 33 LACS FROM M/S. OPTIMATE TEXTILES INDUSTRIES LTD. AND ALLOTTED 66000 SHARES OF FACE VALUE OF R S. 10/ - AT A PREMIUM OF RS. 40/ - . DURING THE ASSESSMENT PROCEEDINGS OF M/S. GAJANAN DISTRIBUTORS AND DEVELOPERS PVT. LTD. THE COMPANY WAS REQUIRED TO FURNISH CONFIRMATION IN RESPECT OF THE SHARE CAPITAL RECEIVED FROM M/S. OPTIMATE TEXTILES INDUSTRIES LTD . WHICH WAS NOT FURNISHED. THE ADDRESS OF M/S. OPTIMATE TEXTILES INDUSTRIES LTD. WAS SHOWN AT 2 ND FLOOR 36B PRINCESS STREET MUMBAI. INSPECTOR WAS DEPUTED AND IT WAS FOUND THAT NO SUCH CONCERN WAS RUNNING FROM THE SAID PREMISES SINCE LAST 8 - 9 YEARS. IT WAS ALSO NOTED BY THE AO THAT WHENEVER CHEQUES WERE ISSUED BY M/S. OPTIMATE TEXTILES INDUSTRIES L TD. IMMEDIATELY CHEQUE/CASH WAS DEPOSITED IN THE BANK ACCOUNT. THE BANK ACCOUNT WAS INTRODUCED BY SHRI SUNIL AGRAWAL . SHRI SUNIL AGRAWAL WAS EXAMINED ON OATH ON 9.1.2008 BY ADIT AND HE ADMITTED THAT HE MET WITH SHRI GAURAV SHARMA AND ACCOMMODATION ENTRI ES IN THE FORM OF SHARE PREMIUM AND SHARE CAPITAL WERE GIVEN TO HIM. THE AO ACCORDINGLY OBSERVED THAT THE STATEMENT OF SHRI SUNIL AGRAWAL SHOWS THAT CASH WAS RECEIVED BY HIM FROM SHRI VINAY GANDHI CA WHO DEPOSITED THE SUM IN THE ACCOUNT OF HIS EMPLOYEES AND ACQUAINTANCES OF THEIR CONCERNS . D URING THE ASSESSMENT PROCEEDINGS SHRI SUNIL AGRAWAL CONFIRMED ENTRIES GIVEN TO M/S. GAJANAN DISTRIBUTORS AND DEVELOPERS PVT. LTD. AS ALSO ANOTHER COMPANY M/S. VIGNESH WAREHOUSE AND DISTRIBUTORS PVT. LTD. AND THAT S HA RE CAPITAL OF RS. 33 LACS IN A.Y 2005 - 06 FROM M/S. OPTIMATE TEXTILES INDUSTRIES LTD. WAS ONLY BOOK ENTRY. SHRI VINAY GANDHI IN HIS STATEMENT ADMITTED THAT SHRI GAURAV SHARMA HAS MET HIM REGARDING SHARE CAPITAL ENTRY AND SHRI GAURAV SHARMA STATED TO HIM TH AT FIRST HE WILL GIVE CASH AND IN LIEU OF CASH CHEQUE HAS TO BE ISSUED IN FAVOUR OF M/S. GAJANAN DISTRIB UTORS AND DEVELOPERS PVT. LTD. AS ALSO M/S. VIGNESH WAREHOUSE AND DISTRIBUTORS PVT. LTD. THE AO FURTHER OBSERVED THAT THE DOCUMENTS SEIZED FROM THE RE SIDENCE OF SHRI SUNIL AGRAWAL AT KRISHNA KUNJ 9 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) 16/1 RACE COURSE ROAD INDORE ALSO SHOWS THAT HE WAS INVOLVED IN PROVIDING SHARE CAPITAL ENTRIES USING VARIOUS BANK ACCOUNTS. THE AO ALSO STATED THAT THE STATEMENT OF SHRI ANUP AGRAWAL DIRECTOR OF M/S. OPTI MATE TEXTILES INDUSTRIES LTD. WAS RECORDED ON 21.12.2009 AND IN HIS STATEMENT HE ADMITTED THAT M/S. OPTIMATE TEXTILES INDUSTRIES LTD. IS A PAPER COMPANY ONLY AND THE SHARE CAPITAL GIVEN BY THIS COMPANY TO M/S. GAJANAN DISTRIBUTORS AND DEVELOPERS PVT. LTD. WAS ONLY AN ACCOMMODATION ENTRY. THUS ON THE BASIS OF STATEMENT OF SHRI SUNIL AGRAWAL SHRI VINAY GANDHI AND SHRI ANUP AGRAWAL DIRECTOR OF M/S. OPTIMATE TEXTILES INDUSTRIES LTD. AND DOCUMENTS SEIZED FROM THE RESIDENCE OF SHRI SUNIL AGRAWAL THE AO TOOK THE VIEW THAT RS. 33 LACS SHOWN AS SHARE CAPITAL WAS GIVEN BY DIRECTOR SHRI GAURAV SHARMA SON OF THE ASSESSEE AND IT WAS ONLY AN ACCOMMODATION ENTRY. 7. IN RESPECT OF SHARE CAPITAL OF RS. 17 LACS RECEIVED FROM M/S. RAPID COMMERCIAL & FINLEASE PVT. LTD. DURING A.Y 2005 - 06 THE AO OBSERVED THAT M/S. GAJANAN DISTRIBUTORS AND DEVELOPERS PVT. LTD. HAS A L SO SHOWN SHARE CAPITAL OF RS. 17 LACS FROM SAID COMPANY AND 34000 SHARES OF RS. 10/ - EACH WERE ALLOTTED FOR RS. 17 LACS. EACH SHARE WAS ALLOTTED AT A PREMIU M OF RS. 40/ - . THE COMPANY HAS SHOWN ITS ADDRESS AT 20 DAWA BAZAAR 4 TH FLOOR RNT MARG INDORE WHEREAS THE RETURN OF THE COMPANY WAS FILED IN MUMBAI. THE ASSESSEE DID NOT FURNISH ANY CONFIRMATION DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS. AS PER THE INQUIRY MADE BY DIT IT WAS NOTED THAT NO SUCH COMPANY EXISTS AT THE ADDRESS GIVEN AT INDORE. IN FACT FROM THE SAID ADDRESS AN ENTITY IN THE NAME OF M/S. STEPPING STONE COMPUTER TRAINING AND PLACEMENT AGENCY WAS FOUND. IT WAS NOTED THAT THIS COMPAN Y FILED ITS LAST RETURN ON 30.9.2005 AND AFTER THAT NO RETURN WAS FILED. THE BANK ACCOUNT OF THE COMPANY WAS MAIN TAINED WITH HDFC BANK INDORE AND CHEQUE OF RS. 17 LACS WAS ISSUED ON 24.3.2005 AND PRIOR TO THAT THE COMPANY DEPOSITED CHEQUE OF RS. 23 LACS AND CASH OF RS. 7.8 LACS FROM 10.3.2005 TO 23.3.2005. THE CHEQUE DEPOSITS INCLUDE 10 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) TRANSFER AMOUNTING TO RS. 13 LACS FROM THE BANK ACCOUNT OF ONE M/S. HINDUSTAN CONTINENTAL PVT. LTD. THE COMPANY WAS NOT FOUND TO BE GENUINE. AS PER THE STATEMENT OF DIRECTOR OF M/S. RAPID COMMERCIAL & FINLEASE PVT. LTD. IT IS ONLY A PAPER COMPANY AND SHARE CAPITAL GIVEN BY THIS COMPANY TO M/S. GAJANAN DISTRIBUTORS AND DEVELOPERS PVT. LTD. WAS ONLY AN ACCOMMODATION ENTRY. 8. IN THE CASE OF M/S. VIGNESH WAREHOUSE AND DISTRIBUTORS PVT. LTD. I T WAS OBSERVED THAT INSPITE OF THE COMPANY SHOWING ONLY LOSSES THE SHARES WERE ISSUED ON PREMIUM. T HE AO HELD THE SHARE CAPITAL IN M/S. VIGNESH WAREHOUSE AND DISTRIBUTORS PVT . LTD. TO BE SUBSTANTIVELY OWNED BY THE ASSESSEE AND TAXED SUBSTANTIVELY THE SHARE CAPITAL IN THE HANDS OF THE ASSESSEE AND PROTECTIVELY IN THE HANDS OF M/S. VIGNESH WAREHOUSE AND DISTRIBUTORS PVT. LTD. THE AO NOTED THAT DURING THE A.Y 2003 - 04 AND 2004 - 05 SHARE CAPITAL OF RS. 15 LACS AND RS. 10 LACS RESPECTIVELY WAS RECEIVED BY M/S. VIGNESH WAREHOUSE AND DISTRIBUTORS PVT. LTD. FROM M/S. ORCHID CONSULTANCY PVT. LTD. THE SHARE APPLICATION MONEY OF RS. 1.5 CRORE WAS RECEIVED BY M/S. VIGNESH WAREHOUSE AND DIS TRIBUTORS PVT. LTD. FROM M/S. RAPID COMMERCIAL & FINLEASE PVT. LTD. M/S. RCG FINANCE PVT. LTD. M/S. SPECTRUM CHEMICALS PVT. LTD. M/S. OPTIMATE TEXTILES INDUSTRIES LTD. AND M/S. HINDUSTAN CONTINENTAL PVT. LTD. FOR ALLOTTING THEM SHARES AT A PREMIUM OF RS . 40/ - . IN RESPECT OF M/S. ORCHID CONSULTANCY PVT. LTD. THE AO M ENTIONED THAT A SURVEY WAS CONDUCTED BY ITO INVESTIGATION UNIT MUMBAI AT THE PREMISES OF THIS COMPANY AT MUMBAI AND SHRI D.N. NAYAK WAS FOUND PRESENT IN THE SAID PREMISES. SHRI D.N. NAYAK O WNED THE PREMISES AND STATED THAT HE WAS RUNNING A PROPRIETARY CONCERN IN THE NAME AND STYLE OF M/S. VISHAL SAMPARK IN WHICH BUSINESS OF PROVIDING MAIL MESSAGING SERVICES TO VARIOUS CLIENTS WAS CARRIED OUT. HE ALSO ADMITTED THAT M/S. ORCHID CONSULTANCY PV T. LTD. ALONGWITH 11 COMPANIES WERE AVAILING MAILING SERVICES. DURING THE SURVEY NO BOOKS OF ACCOUNTS DOCUMENTS BANK DETAILS NAME AND ADDRESSES OF THE DIRECTORS OF THE COMPANY WERE FOUND. SHRI D.N. NAYAK ADMITTED IN HIS STATEMENT THAT ON BEHALF 11 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) OF ONE SHRI RAJESH JAIN HE WAS PROVIDING MAIL MESSAGING FACILITY FOR M/S. ORCHID CONSULTANCY PVT. LTD. HE IS DOING THE SERVICE TO ALL THE CLIENTS WHO WANT TO AVAIL OF THIS SERVICE. THE AO TOOK THE VIEW THAT THE COMPANY IS MERELY A PAPER COMPANY. IT WAS NOTED THAT SHRI RAJENDRA PRASAD AGRAWAL WAS THE DIRECTOR AND AUTHORISED SIGNATORY OF THIS COMPANY AS IN THE ACCOUNT OPENING FORM HIS NAME WAS GIVEN. THE ADDRESS GIVEN IN THE BANK ACCOUNT FORM WAS 12 3 RD FLOOR M.P. NAGAR ZONE - II BHOPAL. AS PER THE INSPECTORS REPORT THERE WAS NO CONCERN IN THE NAME OF M/S. ORCHID CONSULTANCY PVT. LTD. ON THE GIVEN ADDRESS AT BHOPAL. IT WAS OBSERVED BY THE AO THAT AS REGARDS M/S. HINDUSTAN CONTINENTAL LTD. DURING THE A SSESSMENT PROCEEDINGS OF M/S. VIGNESH WAREHOUSE AND DISTRIBUTORS PVT. LTD. NO CONFIRMATION WAS FURNISHED IN RESPECT OF THE SHARE CAPITAL ACCOUNT AND INSPECTOR WAS DEPUTED ON THE ADDRESS OF THIS COMPANY AND IT WAS FOUND THAT THERE WAS OFFICE OF KALPATARU IN FOTECH LTD. ON CALLING FOR DETAILS FROM REGISTRAR OF COMPANIES GWALIOR IN RESPECT OF M/S. HINDUSTAN CONTINENTAL LTD. IT WAS NOTICED THAT THIS COMPANY HAS NOT FILED ANY RETURN FR OM 30.9.2005. FURTHER ACIT - 5(1) INDORE WHILE PASSING THE ASSESSMENT ORDER OF SMT. MEENA DEVI AGRAWAL FOR A.Y 2004 - 05 HELD THAT M/S. HINDUSTAN CONTINENTAL LTD. IS A BOGUS COMPANY. M/S. HINDUSTAN CONTINENTAL LTD. ISSUED CHEQUE TO M/S. VIGNESH WAREHOUSE AND DISTRIBUTORS PVT. LTD. FROM 24.11.2004 TO 10.1.2005 AND AROUND SAME PERIOD THE COMPANY RECEIVED AMOUNTS FROM M/S. V.S. TRADERS AND SUNIL SHARES & STOCKS. IT WAS FURTHER STATED THAT SUNIL SHARES & STOCKS IS A COMPANY WHERE SHRI SUNIL AGRAWAL IS DIRECTOR WHO ALREADY ACCEPTED ON OATH ABOUT GIVING ENTRIES TO VARIOUS COMPANIES . M/S . V.S. TRADERS IS A PROPRIETARY CONCERN OF SHRI RAKESH SHARMA IN WHOSE CASE INQUIRY HAS BEEN MADE AND FINDINGS OF SUCH INQUIRY ARE DISCUSSED WHILE DISCUSSING THE ISSUE OF SHARE CAPITAL RECEIVED FROM M/S. RAPID COMMERCIAL & FINLEASE PVT. LTD. IN THE CASE O F M/S. GAJANAN DISTRIBUTORS AND DEVELOPERS PVT. LTD. SHRI RAKESH SHARMA ADMITTED THAT CASH DEPOSIT IN BANK ACCOUNT DID NOT BELONG TO HIM AND SHRI VINAY GANDHI AND SHRI SUNIL AGRAWAL USED HIS ACCOUNT FOR PROVIDING ACCOMMODATION 12 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) ENTRIES. THE STATEMENT OF DI RECTOR OF M/S. HINDUSTAN CONTINENTAL LTD. SHRI VIJENDRA SUNDER SINGH WAS RECORDED ON 22.12.2009 AND IN HIS STATEMENT HE ADMITTED THAT M/S. HINDUSTAN CONTINENTAL LTD. WAS A PAPER COMPANY AND THE SHARE CAPITAL GIVEN BY THIS COMPANY TO M/S. VIGNESH WAREHOUS E AND DISTRIBUTORS PVT. LTD. WAS ONLY AN ACCOMMODATION ENTRY. THUS THE AO CONCLUDED THAT THE AMOUNT OF RS. 50 LACS SHOWN AS SHARE CAPITAL OF M/S. HINDUSTAN CONTINENTAL LTD. WAS GIVEN BY THE DIRECTOR SHRI GAURAV SHARMA SON OF THE ASSESSEE AND ENTRIES WE RE ARRANGED THROUGH SHRI VINAY GANDHI AND SHRI SUNIL AGRAWAL. THUS ADDITION OF RS. 1.50 CRORE WAS MADE ON SUBSTANTIVE BASIS IN THE HANDS OF THE ASSESSEE AND PROTECTIVE BASIS IN THE HANDS OF M/S. VIGNESH WAREHOUSE AND DISTRIBUTORS PVT. LTD. THE ASSESSEE WENT IN APPEAL BEFORE CIT(A). CIT(A) DIRECTED THE AO TO ASSESS THE SHARE CAPITAL RECEIVED BY THESE COMPANIES IN THE HANDS OF THE COMPANIES AS THE INCOME OF THE YEAR AND DELETED THE SUBSTANTIVE ADDITION MADE IN THE HANDS OF THE ASSESSEE BY OBSERVING AS UND ER : I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE APPELLANT AND FINDINGS OF AO IN ASSESSMENT ORDER. (I) THE FINDINGS OF THE AO ARE BASED ON VARIOUS INCRIMINATING DOCUMENTS FOUND AND SEIZED IN COURSE OF SEARCH ACTION IN THE RESIDENTIAL PREMISES OF THE A PPELLANT SHRI SUNIL AGRAWAL SHRI RAJESH JAIN AND SURVEY CONDUCTED IN THE PREMISES OF OTHER RELATED PERSONS STATEMENT RECORDED DURING SEARCH AND SURVEY ACTION AND POST SEARCH ENQUIRIES CONDUCTED BY THE INVESTIGATION WING. THE FINDINGS OF THE AO ARE SPEC IFIC SUFFICIENT TO PROVE THE EXISTENCE OF ACCOMMODATION OF ENTRY PROVIDERS NAMELY SHRI SUNIL AND JAIN AND SHRI RAJESH JAIN AND ACCOMMODATION ENTRIES PROVIDED BY THEM FOR M/S. GAJANAN DEVELOPERS AND DISTRIBUTORS PVT. LTD. IN EXCHANGE OF COMMISSION THEY CHA RGED FROM THE COMPANY FOR PROVIDING SUCH SERVICES. THE INCRIMINATING PAPER IN LPS - 5 IS EVIDENCE OF ACCOMMODATION ENTRIES GIVEN THROUGH THE BANK ACCOUNT OF SPECTRUM CHEMICALS PVT. LTD. AND OPTIMATE TEXTILE LIMITED ALSO WORKING OUT OF COMMISSION ON THE BASI S OF AMOUNT MONTH AND DATES. M/S. DAZZAL CONFINDIVE LIMITED IS CONTROLLED BY SHRI SUNIL AGRAWAL. THE HUGE CASH DEPOSITS FOUND IN THE BANK ACCOUNT OF THE COMPANY IS UTILIZED FOR PROVIDING ACCOMMODATION ENTRIES THOUGH SHRI AGRAWAL FAILED TO FURNISH THE NA ME OF THE BENEFICIARIES WHO DEPOSITED CASH IN THE BANK ACCOUNT. ON OBSERVING THE TRAIL IT IS FOUND THAT SHRI SUNIL AGRAWAL USED TO RECEIVE CASH THROUGH SHRI VINAY GANDHI FROM SHRI GAURAV SHARMA WHICH WERE DEPOSITED IN THE BANK ACCOUNTS OF HIS EMPLOYEES A ND ACQUAINTANCE AND THEIR CONCERNS NAMELY ASHMIT SAGAR RAKESH SHARMA RIBEKA GARG SATYAM KANUNGO VINISHA GARG ETC.. THE PAGE NO. 2 3 AND 6 OF LPS - 4 SIGNIFIES THE ROLE OF REGULATING AND CONTROLLING THE BANK ACCOUNTS OF THE EMPLOYEES. IT CAN BE SEEN I N THE TRAIL THAT CASH DEPOSITED IN THESE ACCOUNTS 13 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) WERE UTILIZED FOR SUBSEQUENT ISSUE OF CHEQUES TO CONCERNS RELATED / ASSOCIATED WITH SHRI SUNIL AGRAWAL LIKE OPTIMATE TEXTILES INDUSTRIES LIMITED SPECTRUM CHEMICALS PVT. LTD. M/S. RAPID COMMERCIAL AND FINL EASE PVT. LTD. M/S. RCG FINANCE PVT. LTD. HINDUSTAN CONTINENTAL LIMITED. THE INCOME RETURNED BY THE EMPLOYEES IS NEGLIGIBLE AND QUITE DISPROPORTIONATE TO CASH DEPOSITS AND VOLUME OF TRANSACTIONS IN THEIR RESPECTIVE BANK ACCOUNTS. SIMILARLY SHRI RAJESH JAIN IS AN ENTRY PROVIDER FROM MUMBAI AND KOLKATA BASED COMPANIES AND HE PROVIDED ENTRIES TO M/S. GAJANAN DISTRIBUTORS & DEVELOPERS PVT. LTD. AND SHREE VIGHNESH DISTRIBUTORS AND DEVELOPERS PVT. LTD. FROM HIS PAPER COMPANIES JUBILANT MULTITRADE PVT. LIMITE D DIMPLE MULTITRADE PVT. LTD. ORCHID CONSULTANCY PVT. LTD. COMFORT COMMERCIAL PVT. LTD. HILTON INFRASTRUCTURE PVT. LTD. MIDTOWN TRADING PVT. LTD. ETC. HAVING NO BUSINESS PREMISES FOR BUSINESS BUT WITH BANKS FOR ROUTING OF FUNDS. NO ATTEMPT WAS MAD E AT ANY STAGE BY THE APPELLANT TO PROVE THAT THE MATERIALS GATHERED AND USED AGAINST HIM ARE FALSE. IN THE CASE OF AGRAWAL COAL CORPORATION PVT. LTD. VS. ACIT REPORTED IN 142 TTJ 409 HONBLE ITAT INDORE BENCH INDORE HAS HELD THAT THE OPTIMATE TEXTILE S INDUSTRIES LIMITED IS A PAPER COMPANY. SIMILARLY M/S. ORCHID CONSULTANCY PVT. LTD. IS A COMPANY CONTROLLED BY SHRI RAJESH JAIN OPERATING IN PAPER FROM 911 9 TH FLOOR NAVJEEVAN - 3 LAMINGTON ROAD MUMBAI AND THE AO HAS DISCUSSED THE ISSUE AT LENGTH IN HER ORDER OF ASSESSMENT. ACCORDINGLY THE ARGUMENT THAT THE AO HAD NOT ADVERSE FINDINGS ON GENUINENESS OF SHARE APPLICATION MONEY RECEIVED FROM M/S. ORCHID CONSULT ANCY PVT. LTD. IS MISPLACED. (II) INSPITE OF THE COMPANY SHOWING ONLY LOSS OR MINOR PROFIT IT RECEIVED SHARE APPLICATION MONEY FROM THE COMPANIES LISTED ABOVE. THE SHARE APPLICATION MONEY HAD FINALLY BEEN ADJUSTED IN BOTH THE COMPANIES I.E. IN SHREE VIGHNE SH WAREHOUSE AS WELL AGAINST SHARE ALLOTTED AT PREMIUM OF RS. 90 PER SHARE AGAINST FACE VALUE OF RS. 10 PER SHARE. TILL DATE NO DIVIDEND HAS BEEN GIVEN TO THE SHAREHOLDERS. THIS FACT LEADS TO A QUESTION WHY ANY PRUDENT SHARE HOLDER WHO IS UNRELATED TO T HE COMPANY AND ITS DIRECTOR WHICH IS NOT DOING ANY SUBSTANTIAL BUSINESS ACTIVITY AND THATS TOO AT A HUGE PREMIUM. NO BOOKS OF ACCOUNT BANK DETAILS NATURE OF BUSINESS ACTIVITIES OF THE ABOVE COMPANIES AND EVEN THEIR CONFIRMATION WERE PRODUCED FOR VERIFI CATION BEFORE THE AO. IT WAS NOTICED FROM THE RETURN OF INCOME OF M/S. JUBILANT THAT IT HAD FILED RETURNS OF NEGLIGIBLE INCOME COMPARED TO HUGE ASSET HOLDINGS (I.E. INVESTMENTS) WHICH SHOWS THAT THE MAIN BUSINESS OF THE COMPANY WAS EARNING FROM INVESTMEN T BUT THE COMPANY WAS NOT EVEN EARNING INCOME AT THE RATE OF BANK INTEREST OF 5% ON ITS INVESTMENTS. NO GENUINE BUSINESS CONCERN WOULD OPERATE IN SUCH A MANNER OVER SEVERAL YEARS. A PERUSAL OF THE BALANCE SHEET OF M/S. GAJANAN DISTRIBUTORS & DEVELOPERS P VT. LTD. IN THE RELEVANT ASSESSMENT YEARS SHOWS THAT THE COMPANY HAD INVESTED IN PURCHASE OF AGRICULTURAL LAND OF SUBSTANTIAL WHICH HAD NO CONNECTION WITH ANY BUSINESS ACTIVITY OF THE COMPANY OR AS LOANS TO THE DIRECTORS WHICH MAKES IT CLEAR THAT THE COMP ANY HAS JUST BEEN USED TO CREATE A VEIL FOR INVESTMENT IN VARIOUS ASSETS OUT OF UNDISCLOSED INCOME. SINCE REAL ESTATES HAVE BEEN PURCHASED BY THE COMPANY THE AMOUNT APPEARING AS SHARE APPLICATION MUST HAVE ORIGINATED SOMEWHERE. THE AO HAD ALSO GIVEN HIS FINDINGS THAT THE ASSESSEE - COMPANY HAS EARNED INCOME FROM INTEREST AND BUS RUNNING AND COULD NOT HAVE GENERATED THE UNACCOUNTED FUNDS. 14 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) (III) THERE IS NO EVIDENCE ADDUCED BY THE LD. AR WHICH REQUIRES VETTING IN ORDER TO FORM BEDROCK OF THE APPELLATE ORDER EXCEPT HIS HARPING UPON THE CONTENTION THAT SHARE APPLICATION MONIES TO THE ALLEGED COMPANY HAVE CAME THROUGH THE ACCOUNT PAYEE CHEQUES AND THE COMPANIES WHICH SUBSCRIBED TO THE SHARES OF THE ALLEGED COMPANY ARE BORN ON THE FILE OF REGISTER OF COMPANIES AC T 1956 HAS TO COMPLY THE STATUTORY FORMALITIES. THE COMPANIES WHO INTRODUCED FAKE CAPITAL S WERE ALSO COMPLYING WITH SUCH FORMALITIES WHICH DO NOT ADD ANY CREDIBILITY OF EVIDENTIARY VALUE. IN ANY CASE SUCH ARGUMENT DOES NOT IF SO FACTO PROVE THAT THET RANSACTIONS ARE GENUINE. ON THE WHOLE THESE ARGUMENTS ARE BASED ON IRRELEVANT MATERIAL WHICH CANNOT IGNORE THE RELEVANT MATERIAL COLLECTED AND BROUGHT TO RECORD BY THE AO IN HER ORDER OF ASSESSMENT. THE APPELLANTS ARGUMENT THAT THERE WAS DENIAL OF OPPO RTUNITY TO CROSS EXAMINE THE PERSONS WHOSE STATEMENT WERE RECORDED AND USED AGAINST THE APPELLANT IS ALSO MISPLACED. IT IS EVIDENT FROM THE RECORD THAT THE AO SENT COPY OF THE STATEMENTS OF DIFFERENT PERSONS AS MENTIONED ABOVE AND CALLED FOR COMMENT IF A NY OR CROSS EXAMINATION OF THE DEPONENTS BY THE APPELLANT OR SHRI GAURAV SHARMA IF NEEDED. THERE WAS NO RESPONSE TO SUCH OFFER THOUGH RECORDS REVEALED THAT THE OFFER WAS DULY WITHIN THE KNOWLEDGE OF THE APPELLANT OR SHRI GAURAV SHARMA. IN THE LIGHT OF THIS THE ARGUMENT OF THE LD. AR LOSES FORCE. IT IS BECAUSE OF BLOCKING ANY FURTHER ENQUIRY THE APPELLANT OR SHRI GAURAV SHARMA AVOIDED THE OFFER. ONCE THE OPPORTUNITY GIVEN AT THE ASSESSMENT STAGE WAS NOT AVAILED TO CROSS EXAMINE THE DEPONENTS THE GRI EVANCE OF THE APPELLANT CANNOT RIGHTLY BE MAPPED OR PLOTTED WITHIN THE TERRAIN OF PRINCIPLES OF NATURAL JUSTICE. THE APPELLANT OR SHRI GAURAV SHARMA CANNOT PLEAD BACK OF ADEQUATE TIME IN DISCHARGING THE ONUS. (IV) THE LD. AR HEAVILY RELIED ON RATIO OF TH E CASE IN CIT VS. LOVELY EXPORT PVT. LTD. REPORTED IN 319 ITR (ST) 5 (SC) . THE RELIANCE IS ALSO MISPLACED SPECIALLY DUE TO MIS - UNDERSTANDING AND MIS - APPRECIATION OF THE BACK GROUNDS OF THE FACTS OF THE CASE IN LOVELY EXPORT PVT. LTD. THE RATIO OF A DECIS ION IS TO BE UNDERSTOOD AND APPRECIATED IN THE BACKGROUND OF THE FACTS OF THAT CASE. SO UNDERSTOOD IT WILL BE SEEN THAT WHERE THE COMPLETE PARTICULARS OF THE SHARE APPLICANTS SUCH AS THEIR NAMES AND ADDRESSES INCOME - TAX FILE NUMBERS THEIR CREDITWORTHIN ESS SHARE APPLICATION FORMS AND SHARE HOLDERS REGISTER SHARE TRANSFER REGISTER ETC. ARE FURNISHED TO THE AO AND THE AO HAS NOT CONDUCTED ANY ENQUIRY INTO THE SAME OR HAS NO MATERIAL IN HIS POSSESSION TO SHOW THAT THOSE PARTICULARS ARE FALSE AND CANNOT BE ACTED UPON THEN NO ADDITION CAN BE MADE IN THE HANDS OF THE COMPANY UNDER SECTION 68 AND THE REMEDY OPEN TO THE REVENUE IS TO GO AFTER THE SHARE APPLICANTS IN ACCORDANCE WITH LAW. I AM AFRAID THAT I CANNOT APPLY THE RATIO TO A CASE SUCH AS THE PRESEN T ONE WHERE THE AO IS IN POSSESSION OF MATERIAL THAT DIS - CREDITS AND IMPEACHES THE PARTICULARS FURNISHED BY THE ASSESSEE COMPANY AND ALSO ESTABLISHES THE LINK BETWEEN SELF - CONFESSED ACCOMMODATION ENTRY PROVIDERS WHOSE BUSINESS IT IS TO HELP ASSESSES BR ING INTO THEIR BOOKS OF ACCOUNT THEIR UNACCOUNTED MONIES THROUGH THE MEDIUM OF SHARE SUBSCRIPTION AND THE ASSESSEE. THE RATIO IS INAPPLICABLE TO A CASE AGAIN SUCH AS THE PRESENT ONE WHERE THE INVOLVEMENT OF THE APPELLANT IN SUCH MODUS OPERANDI IS CLEA RLY INDICATED BY VALID MATERIAL MADE AVAILABLE TO THE AO AS A RESULT OF SEARCH AND SEIZURE OPERATION AND ENQUIRIES MADE BY THE INVESTIGATION WING INTO THE ACTIVITIES OF SUCH ENTRY PROVIDERS. THE EXISTENCE WITH THE AO OF MATERIAL SHOWING THAT THE SHARE S UBSCRIPTIONS WERE COLLECTED AS PART OF A PRE - MEDICATED PLAN - SMOKE - SCREEN CONCEIVED AND EXECUTED WITH THE CONNIVANCE OR INVOLVEMENT OF THE APPELLANT IN THE 15 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) GUISE OF HIS SON EXCLUDES THE APPLICABILITY OF THE RATIO. THE RATIO IS ATTRACTED TO A CASE WHERE IT IS SIMPLE QUESTION OF WHETHER THE ASSESSEE HAS DISCHARGED THE BURDEN PLACED UPON HIM U/S 68 TO PROVE AND ESTABLISH THE IDENTITY AND CREDITWORTHINESS OF THE SHARE APPLICANT AND THE GENUINENESS OF THE TRANSACTION. IN SUCH A CASE THE AO CANNOT SIT BACK WIT H FOLDED HANDS TILL THE ASSESSEE EXHAUSTS ALL THE EVIDENCE OR MATERIAL IN HIS POSSESSION AND THEN COME FORWARD TO MERELY REJECT THE SAME WITHOUT CARRYING OUT ANY VERIFICATION OR ENQUIRY INTO THE MATERIAL PLACED BEFORE HIM. THE CASE BEFORE ME DOES NOT FAL L UNDER THIS CATEGORY AND IT WOULD BE A TRAVESTY OF TRUTH AND JUSTICE TO EXPRESS A VIEW TO THE CONTRARY. IN THIS REGARD I DERIVED SUPPORT FROM THE JUDGMENT OF THE CASE IN CIT VS. NOVA PROMOTERS AND FINLEASE (P) LTD. 342 ITR 169 (DEL.); ITA NO. 124 TO 127 /IND/2011 DATED 31 - 01 - 2012 OF ITAT INDORE BENCH INDORE IN LUNKAD GROUP OF CASES AND IN THE CASE OF AGRAWAL COAL CORPORATION PVT. LTD. REPORTED IN 118 ITJ 717 / 142 TTJ 409 ETC.. (V) IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE I FIND THAT AO IS J USTIFIED IN TREATING THE SHARE APPLICANTS AS PAPER COMPANIES. THE NEXT QUESTION THAT IS REQUIRED TO BE DECIDED IS AT WHOSE HANDS THE BOGUS SHARE APPLICATION MONIES OUGHT TO BE ASSESSED WHETHER IN THE HANDS OF THE COMPANIES RECEIVING BOGUS SHARE CAPITAL O R IN THE HANDS OF THE APPELLANT OR IN THE HANDS OF SHRI GAURAV SHARMA AS DIRECTORS OF THE COMPANIES. THE INVESTMENTS IN SHARE APPLICATION MONEY THROUGH ACCOMMODATION ENTRIES ARE OBVIOUSLY NOT OUT OF THE UNDISCLOSED SOURCE OF M/S. GAJANAN DISTRIBUTORS & DE VELOPERS PVT. LTD. OR SHREE VIGHNESH WAREHOUSE AND DISTRIBUTORS PVT. LTD. FOR THE REASON ALREADY DISCUSSED ABOVE. IT IS THE NAME OF SHRI GAURAV SHARMA WHICH IS APPEARING IN THE STATEMENT OF ENTRY PROVIDERS. THEY HAVE ADMITTED TO HAVE RECEIVED CASH FROM S HRI GAURAV SHARMA. BUT AS DISCUSSED ABOVE SHRI GAURAV SHARMA HAS NO SUCH BUSINESS ACTIVITIES KNOWN TO THE DEPARTMENT. HE HAS NO ACTIVITIES TO EARN UNACCOUNTED MONIES AND IT IS FOR THIS REASON THE AO HAS RULED OUT ANY SUSPICION WHICH WOULD HAVE WARRANTE D PROTECTIVE ASSESSMENTS OF THE ALLEGED BOGUS SHARE CAPITAL IN HIS HANDS. ON THE OTHER HAND IT IS SEEN THAT DR. YOGIRAJ SHARMA HAS UNACCOUNTED INCOME WHICH CAN BE TRACED BACK TO EARLY YEARS PRECEDING THE ASSTT. YR. 2007 - 08 AND 2008 - 09. THERE ARE AMPLE E VIDENCE OF CLOSE CONNECTION OF DR. YOGIRAJ SHARMA WITH THE SUPPLIERS NAMELY SHRI ASHOK NANDA AND SHRI YOGESH PATARIYA. THERE ARE VARIOUS BUSINESS CONCERNS OF SHRI ASHOK NANDA INCLUDING NETAM INDUSTRIES AND SHRI UMESH KAJVE WHOSE NAME IS LANDED IN THE CASE OF NETAM INDUSTRIES WAS THE DIRECTOR OF THE DIMPLE MULTITRADE PVT. LTD.. SHRI NANDA IS THE SHARE HOLDER OF THE COMPANIES OF SHRI GAURAV SHARMA AND ALSO MANAGING DIRECTOR. SHRI YOGESH PATARIYA IS A CLOSE FAMILY FRIEND OF THE APPELLANT. HE IS PROPRIETOR OF RADIATION IMAGE COMMUNICATION GLOBAL ENTERPRISES AND OTHERS. BOTH OF THEM GET HUGE SUPPLY ORDERS FROM THE DEPARTMENT OF HEALTH. THE LOOSE PAPERS IN PAGE NO. 81 - 84 OF LPS - 2/30 SEIZED FROM A - 70 SHAKTI NAGAR BHOPAL ARE COPIES OF DD NO. 476319 476320 DATED 28 - 03 - 2007 FOR RS. 2.20 LACS EACH 476313 476314 DATED 28 - 03 - 2007 FOR RS.1.50 LAKHS EACH 476315 476316 DATED 28 - 03 - 2007 OF RS. 3.00 LAKHS EACH 476317 4756318 DATED 28 - 03 - 2007 FOR RS. 1.50 LAKHS EACH OF BANK OF BARODA HABIBGANJ BRANCH BHOPAL IN FAVOUR OF RAPID COMMERCIAL AND FINLEASE PVT. LTD. THE JOTTINGS IN PAGE NO. 81 RELATE TO PLANNING OF INVESTMENT IN SHARE APPLICATION MONEY IN GAJANAN DEVELOPERS AND DISTRIBUTORS AND SHRI VIGHNESH WAREHOUSE. THE PAPER WAS WRITTEN IN THE HAND WRITING OF SH RI YOGESH PATARIYA. IT WAS DATED 26 - 03 - 2007 AND THE JOTTINGS THEREIN ARE PLAN OF INVESTMENTS IN FAKE 16 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) SHARE APPLICATION MONEY OF THE ALLEGED COMPANIES THROUGH RAPID COMMERCIAL AND FINLEASE PVT. LTD. OPTIMATE TEXTILE INDUSTRIES SPECTRUMS CHEMICALS ETC. H AVE DIRECT NEXUS WITH THE COPY OF THE DRAFT DISCUSSED ABOVE. THE DRAFTS WERE BASICALLY PAYMENTS MADE TO THE TWO SHARE HOLDING COMPANIES OF INDORE FROM ACCOUNT IN BANK OF BARODA HABIBGANJ AND THE COPY OF THE SAME WAS FOUND AT THE RESIDENCE OF DR. YOGIRAJ SHARMA. ON FURTHER ENQUIRIES IT IS LEARNT THAT SHRI SUNIL KUMAR DESHMUKH HAVING ACCOUNT NO.6485 SHRI MAHENDRA SURYAWANSHI HAVING ACCOUNT NO.6493 WHO ARE ALSO SHARE HOLDERS IN THE ALLEGED COMPANY SHRI PRAVEEN JARWADE HAVING ACCOUNT NO. 6481 AND SHRI RAM ESH PRAJAPATI HAVING ACCOUNT NO. 6487 HAVE MADE THE PAYMENTS FROM THEIR RESPECTIVE ACCOUNTS MAINTAINED AT BANK OF BARODA HABIBGANJ BRANCH. THEY ARE THE LOW PAID EMPLOYEES OF SHRI YOGESH PATARIYA AND THEY HAVE ADMITTED THAT THEIR BANK ACCOUNTS WERE MAINTA INED AND CONTROLLED BY SHRI PATARIYA. THERE ARE EVIDENCES OF PAYMENTS RECEIVED BY DR. YOGIRAJ SHARMA ON SPECIFIC PERCENTAGE OVER THE VALUE OF WORK ORDERS OF SUPPLY AND DISBURSEMENT MADE TO SHRI NANDA AND SHRI PATARIYA MADE AS DISCUSSED IN SEPARATE PARA OF THE APPELLATE ORDER. SHRI L. MANISH ANOTHER SHARE HOLDER IS ALSO REGULAR SUPPLIER OF HEALTH DEPARTMENT. SHRI MAHESH SHARMA AND SMT. MALTI SHARMA OTHER SHAREHOLDERS IN THE ALLEGED COMPANY ARE CLOSE RELATIVES OF THE APPELLANT. INCRIMINATING DOCUMENTS AND PASSBOOKS OF THE AFORESAID EMPLOYEES OF SHRI YOGESH PATARIYA INCLUDING PASSBOOKS AND OTHER DOCUMENTS OF SHRI MAHESH SHARMA AND SMT. SHASHI SHARMA WERE FOUND IN POSSESSION OF THE APPELLANT AT HIS RESIDENCE AT A - 70 SHAKTI NAGAR BHOPAL. THUS SHRI ASHO K NANDA SHRI SUNIL KUMAR DESHMUKH SHRI MAHENDRA SURYAVANSHI SHRI MANISH SHRI MAHESH SHARMA SMT. SHASHI SHARMA ARE THE SHARE HOLDERS OTHER THAN THE ALLEGED PAPER COMPANIES WHEREIN SMT. SHASHI SHARMA AND SHRI GAURAV SHARMA ARE THE DIRECTORS WITH CERTAIN SHARE HOLDINGS. SHRI GAURAV SHARMA HAS SURRENDERED ADDITIONAL INCOME TO COVER UP SOME UNDISCLOSED INVESTMENT IN THE COMPANIES LIKE PURCHASE OF LAND AT KAUSHALYAPURA IN THE NAME OF SHREE VIGHNESH WAREHOUSE AND DISTRIBUTORS PVT. LTD. AS OBSERVED AND DISCU SSED BY THE AO IN HER ORDER OF ASSESSEE. IN VIEW OF THE PATTERN OF SHAREHOLDING AND MANAGEMENT OF AFFAIRS BY THE FAMILY MEMBERS APPEARS THAT DR. YOGIRAJ SHARMA IS PRIME PERSON BEHIND THE TWO COMPANIES THOUGH LEGALLY THEY ARE INDEPENDENT ENTITIES AND DR. Y OGIRAJ SHARMA IS NEITHER A DIRECTOR NOR SHAREHOLDER OF THE COMPANIES. (VI) THE SUBSCRIBING COMPANIES ARE FOUND TO BE FICTITIOUS OR NON - EXISTENT THEREFORE ONE IS OOZING OUT THAT M/S. GAJANAN DISTRIBUTORS AND DEVELOPERS PVT. LTD. AND M/S. SHREE VIGHNESH W AREHOUSE AND DISTRIBUTORS PVT. LTD. HAVE TO DISCHARGE THE ONUS TO ESTABLISH THE CREDITS AMOUNTS RECEIVED FROM THE ALLEGED SUBSCRIBING COMPANIES IN THEIR BOOKS OF ACCOUNT OBVIATE THE MISCHIEF OF SECTION OF 68 OF INCOME TAX ACT. THE LAW IS WELL SETTLED TH AT ONUS PROVE THE SOURCE OF MONEY FOUND TO HAVE BEEN RECEIVED BY AN ASSESSEE IS ON HIM WHERE THE NATURE AND SOURCE OF A RECEIPT WHETHER IT BE OF MONEY OR OTHER PROPERTY CANNOT BE SATISFACTORILY EXPLAINED BY THE ASSESSEE IT IS OPEN TO THE REVENUE TO HOLD THAT IT IS THE INCOME OF THE ASSESSEE AND NO FURTHER BURDEN LIES ON THE REVENUE TO SHOW THAT THE INCOME IS FROM A PARTICULAR SOURCE FOR WHICH I AM SUPPORTED BY THE DECISION OF HONBLE APEX COURT RASHAN DI HATTI V/S CIT REPORTED IN 107 ITR 938 AND KELA KHA N MOHD. HAS REPORTED IN 50 ITR 1. IN THE PRESENT CASE IN HAND THE COMPANIES RECEIVED ACCOMMODATION ENTRIES HAVE GROSSLY FAILED TO ESTABLISH THREE INGREDIENTS OF SECTION 68 OF THE ACT. 17 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) AS DISCUSSED ABOVE THE HONBLE TRIBUNAL INDORE BENCH INDORE IN THE CASE OF AGARWAL COAL CORPORATION PVT. LTD. HAS FOUND THAT THE IDENTITY OF SHAREHOLDERS LIKE OPTIMATE TEXTILE INDUSTRIES LTD. AND HINDUSTAN CONTINENTAL LTD. IS NOT PROVED AND THEREFORE THE INITIAL ONUS HAS NOT BEEN DISCHARGED BY THE ASSESSEE SPECIALLY WHEN THE ASSESSEE WAS CONFRONTED WITH FINDINGS OF COMMISSION SUMMONS RETURNED UNSERVED AND THE ADDRESS GIVEN BY THE ASSESSEE ITSELF THAT TOO AT FOUR PLACES WERE FOUND TO BE FICTITIOUS. THE ASSESSEE HAS NOT GIVEN SATISFACTORY EVIDENCE TO DISCHARGE THE ONUS. IT HAS MERELY GIVEN THE NAMES OF THE FICTITIOUS PARTIES AND THIS IS NOT SUFFICIENT COMPLIANCE. THUS THE ASSESSMENT OF SHARE APPLICATION MONEY IN THE HANDS OF THE ASSESSEE COMPANY HAS BEEN A UPHELD BY THE HONBLE TRIBUNAL. SIMILARLY THE HONBLE TRIBUNAL INDORE BENCH INDORE UPHELD THE ASSESSMENT OF ACCOMMODATION ENTRIES RECEIVED AS SHARE APPLICATION MONEY IN THE LUNKAD GROUP OF CASES IN ITA NO. 124 TO 127/IND/2011 DATED 31.01.2012. M/S. GAJANAN DISTRIBUTORS & DEVELOPERS PVT. LTD. AND M/S. SHREE VIGHNES H WAREHOUSE AND DISTRIBUTORS PVT LTD. HAVE CLAIMED TO HAVE RECEIVED SHARE APPLICATION MONEY FROM THE SAME OPTIMATE TEXTILE INDUSTRIES LTD. THE RATIO OF THE CASES DISCUSSED ABOVE IS SQUARELY APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE CASE. THE ENTR IES OF SHARE APPLICATION MONEY ARE ULTIMATELY APPEARING IN THE BOOKS OF ACCOUNT OF THE COMPANIES AND THE AFFAIRS OF THE COMPANIES ARE UNDER CONTROL OF DR. YOGIRAJ SHARMA. FROM THE PERUSAL OF THE MATERIAL AVAILABLE ON RECORD AND DISCUSSION MADE ABOVE I FE EL THAT LOOKING TO THE PECULIARITY OF THE CASE THE PROPOSITION LAID DOWN IN CIT V/S GUJARAT HEAVY CHEMICALS LTD. 256 ITR 795 IS DISTINGUISHABLE. IN VIEW OF THE OVERALL FACTS AND IN GIVEN CIRCUMSTANCES OF THE CASE AS DISCUSSED ABOVE I FIND THAT THE ASSESS MENT OF SHARE CAPITAL RECEIVED FROM THE FICTITIOUS SUBSCRIBING COMPANIES THROUGH ACCOMMODATION ENTRIES OUGHT TO BE ASSESSED SUBSTANTIVELY IN THE HANDS OF M/S. GAJANAN DISTRIBUTORS & DEVELOPERS PVT. LTD. AND SHREE VIGHNESH WAREHOUSE AND DISTRIBUTORS PVT. LT D. ACCORDINGLY THE AO IS DIRECTED TO ASSESS THE SAME IN THE HAND OF THE COMPANIES AS INCOME OF THE YEAR. THE SUBSTANTIVE ASSESSMENT OF THE SUM IN THE HANDS OF DR. YOGIRAJ SHARMA IS VACATED . 9. THE LD. DR BEFORE US RELIED ON THE ORDER OF AO AND VEHEMEN TLY CONTENDED THAT FROM THE STATEMENT OF THE VARIOUS PARTIES FROM WHICH M/S. GAJANAN DISTRIBUTORS AND DEVELOPERS PVT. LTD. AND M/S. VIGNESH WAREHOUSE AND DISTRIBUTORS PVT. LTD. RECEIVED THE AMOUNT ON ACCOUNT OF SHARE CAPITAL IT IS APPARENT THAT THESE COMPA NIES ARE SIMPLY PAPER COMPANIES. THE AMOUNT HAS BEEN PROVIDED BY SHRI GAURAV SHARMA SON OF THE ASSESSEE. SHRI GAURAV SHARMA DOES NOT HAVE ANY SOURCE TO PROVIDE SUCH HUGE AMOUNT . IT IS ONLY THE ASSESSEE WHO BEING GOVERNMENT SERVANT INVESTED HIS MONEY EARNED THROUGH GRATIFICATION IN SUCH COMPANIES BY GETTING ACCOMMODATION ENTRIES FROM THE MARKET. RELIANCE WAS PLACED IN THIS REGARD ON PARA 5 PG. 10 OF THE ASSESSMENT 18 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) ORDER. IT WAS CONTENDED THAT THE CIT(A) WAS NOT CORRECT IN LAW IN DELETING THE ADDITI ON FROM THE HANDS OF THE ASSESSEE. ORDER OF CIT(A) BE REVERSED AND ORDER OF AO BE RESTORED. 10. THE LD. AR ON THE OTHER HAND VEHEMENTLY CONTENDED THAT THERE HAD BEEN SEARCH IN THE CASE OF THE ASSESSEE. NO EVIDENCE WAS FOUND DURING THE COURSE OF THE SEARCH WHICH SHOWS THAT THE MONEY HAS FLOWN FROM THE ASSESSEE FOR CONTRIBUTION OF SHARE CAPITAL BY VAR IOUS SHAREHOLDERS OF COMPANIES BELONGING TO SHRI GAURAV SHARMA AND HER MOTHER VIZ. M/S. GAJANAN DISTRIBUTORS AND DEVELOPERS PVT. LTD. AND M/S. VIGNESH WAREHOUSE AND DISTRIBUTORS PVT. LTD. THE ASSESSEE IS NEITHER A DIRECTOR NOR SHAREHOLDER OF THESE COMPANI ES. ASSESSEE IS NOT A BENEFICIARY OF THE ASSETS OF THE COMPANIES CONTROLLED BY SHRI GAURAV SHARMA. MERELY THE ASSESSEE IS THE FATHER OF SHRI GAURAV SHARMA WHO IS CONTROLLING THESE TWO COMPANIES DOES NOT MEAN THAT WHATEVER MONEY HAS BEEN INVESTED IN THESE COMPANIES HAS BEEN INVESTED BY THE ASSESSEE. OUR ATTENTION WAS DRAWN TOWARDS THE ASSESSMENT ORDER AND IT WAS CONTENDED THAT EVIDENCE DISCUSSED BY THE AO IN THE ASSESSMENT ORDER OF TH ESE COMPAN IES ARE IN RESPECT OF DEPOSIT IN BANK ACCOUNT OF THE COMPANIES WHO HAVE SUBSCRIBED TO THE SHARE CAPITAL OF M/S. GAJANAN DISTRIBUTORS AND DEVELOPERS PVT. LTD. AND M/S. VIGNESH WAREHOUSE AND DISTRIBUTORS PVT. LTD. THE ASSESSEE HAS NOTHING TO DO WITH THE BANK ACCOUNTS OF THESE COMPANIES. THESE COMPANIES ARE INDEPENDEN T CORPORATE ENTITIES MAKING DUE STATUTORY COMPLIANCES. AO HAS ACCEPTED ALL THE TRANSACTIONS OF THE COMPANIES AS SUBMITTED BY THE SAID COMPANIES IN THE REGULAR RETURNS BEFORE ACTION U/S 132(1) OF THE INCOME TAX ACT . EVEN IN THE RETURN FILED IN PURSUANCE T O NOTICE U/S 153C ALL THE TRANSACTIONS HAS BEEN ACCEPTED EXCEPT SHARE CAPITAL CONTRIBUTION FROM CORPORATE SHAREHOLDER S . REFERENCE MADE FOR STATEMENT S OF VARIOUS INDIVIDUALS RECORDED IN THE ASSESSMENT ORDER OF THE COMPANIES ARE IN RESPECT OF DEPOSITS OF S UCH PERSONS IN THE CORPORATE SHAREHOLDERS OF TWO COMPANIES. IT HAS NO REFERENCE TO THE NAME OF THE ASSESSEE 19 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) AND SUCH STATEMENTS ARE RECORDED BEHIND THE BACK OF THE ASSESSEE AND HAVE NOT BEEN TESTED ON CROSS EXAMINATION. SUCH STATEMENTS RECORDED AT THE BA CK OF THE ASSESSEE CANNOT BE USED AGAINST THE ASSESSEE. IN THIS REGARD RELIANCE WAS PLACED ON THE FOLLOWING DECISIONS : I) KISINCHAND CHELLARAM VS. CIT 125 ITR 713 (SC) II) HEIRS AND LRS. OF LATE LAXMANBHAI S. PATEL VS. CIT 327 ITR 290 (GUJ) IT WAS FURTHER SUBMITTED THAT ONUS TO ESTABLISH THAT THESE CONCERNS ARE BENAMI OR THE TRANSACTIONS ARE NOT GENUINE OR THE CONCERNS BELONG TO THE ASSESSEE LIES ON THE REVENUE. N O EVIDENCE IS ADDUCED TO SUPPORT THE CONCLUSION DRAWN BY THE AO. RELIANCE WAS PLACED IN THIS REGARD ON THE FOLLOWING DECISIONS : I) K RISHNANAND VS. STATE OF M.P AIR 1977 (SC) 796 II) CIT VS. DAULAT RAM RAWATMULL 87 ITR 349 (SC) . LASTLY IT WAS SUBMITTED THAT D URING THE COURSE OF THE SEARCH NO INDISCRIMINATING DOCUMENTS WERE FOUND THE DOCUMENTS FOUND ARE THE SAME WHICH WERE AVAILABLE DURING THE COURSE OF THE RETURNS FILED U/S 139(1). IN THE ABSENCE OF INCRIMINATING DOCUMENTS BEING FOUND RELATING TO THE IMPUGNE D ASSESSMENT YEARS NO ADDITIONS CAN BE MADE AND THE ASSESSMENT WHICH HAS ALREADY CONCLUDED AS PER THE PROVISIONS OF SECTION 143(1)(A) CAN BE DISTURBED AS THESE ASSESSMENT WILL NOT GET ABATED NOT BEING PENDING. THE DOCUMENT AS REFERRED TO BY THE ASSESSING OFFICER RELATE TO THE PERIOD AFTER THE ASSESSMENT YEAR 2006 - 07. RELIANCE WAS PLACED IN THIS REGARD ON THE FOLLOWING DECISIONS: - 11. WE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME ALONG WITH THE ORDER OF THE TAX AUTHORITIES BELOW. WE HA VE ALSO GONE THROUGH THE CASE LAWS AS HAS BEEN RELIED ON BEFORE US. WE NOTED THAT THE AO TREATED THE SHARE 20 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) APPLICATION MONEY RECEIVED BY THE TWO COMPANIES; M/S. GAJANAN DISTRIBUTORS AND DEVELOPERS PVT. LTD. AND M/S. VIGNESH WAREHOUSE AND DISTRIBUTORS PVT. LTD. DURING THE A.YS 2003 - 04 2004 - 05 2005 - 06 AND 2006 - 07 TO BE THE UNDISCLOSED INCOME OF THE ASSESSEE AND TAXED IT SUBSTANTIVELY IN THE HANDS OF THE ASSESSEE. THESE TWO COMPANIES RECEIVED THE FOLLOWING SHARE CAPITAL MONEY DURING THE IMPUGNED ASSESSMENT YEAR : IN THE CASE OF M/S. GAJANAN DISTRIBUTORS AND DEVELOPERS A.Y. 2003 - 04 : NAME OF THE SHAREHOLDER ADDRESS DATE OF ALLOTMENT NO. OF SHARE FACE VALUE SHARE APPLICATION TOTAL AMOUNT JUBILANT MULTITRADE PVT. LTD. SAFEX GHAT KOPAR ANDHERI LINK ROAD ASALPHA SAK INOKA ANDHERI EAST MUMBAI 31 - 12 - 02 1000000 1000000 DIMPLE MULTITRADE PVT. LTD. ROOM NO.5 3 RD FLOOR HANUMAN BUILDING 2 PICKET ROAD MUMBAI 31 - 01 - 03 1000000 1000000 A.Y. 200 4 - 0 5 : NAME OF THE SHAREHOLDER ADDRESS DATE OF ALLOTMENT NO. OF SHARE FACE VALUE SHARE APPLICATION TOTAL AMOUNT JUBILANT MULTITRADE PVT. LTD. SAFEX GHAT KOPAR ANDHERI LINK ROAD ASALPHA SAK INOKA ANDHERI EAST MUMBAI 06 - 09 - 03 1000000 A.Y. 2005 - 06 : NAME OF THE SHAREHOLDER ADDRESS DATE OF ALLOTMENT NO. OF SHARE FACE VALUE SHARE PREMIUM SHARE APPLICATION TOTAL AMOUNT OPTIMATE TEXTILE INDUSTRIES LTD. 2 DEVKARAN MENTION IIND FLOOR 63 PRINCE STREET MUMBAI 31 - 03 - 05 66000 10 2640000 660000 3300000 RAPID COMMERCIAL & FINLEASE PVT. LTD. 20 DAWA ZAZAR 4 TH FLOOR 1314 RNT MARG INDORE 31 - 03 - 05 34000 10 1360000 340000 1700000 A.Y. 2006 - 07 : NAME OF THE SHAREHOLDER ADDRESS DATE OF ALLOTMENT NO. OF SHARE FACE VALUE SHARE CAPITAL SHARE PREMIUM TOTAL AMOUNT OPTIMATE TEXTILE INDUSTRIES LTD. 2 DEVKARAN MENTION IIND FLOOR 63 PRINCE STREET MUMBAI 31 - 02 - 06 25000 10/90 2500000 2250000 2500000 SPECTRUM CHEMICALS PVT. LTD. 2 DEVKARAN MENTION IIND FLOOR 63 PRINCE STREET MUMBAI 21 - 02 - 06 25000 10/90 250000 2250000 2500000 OPTIMATE TEXTILE INDUSTRIES LTD. 2 DEVKARAN MENTION IIND FLOOR 63 PRINCE STREET MUMBAI 21 - 02 - 06 20000 10/90 200000 1800000 2000000 RAPID COMMERCIAL 20 DAWA ZAZAR 4 TH FLOOR 1314 RNT 31 - 03 - 06 10000 10 100000 900000 1000000 21 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) &FINLEASE PVT. LTD. MARG INDORE 8000000 IN THE CASE OF M/S. SHREE VIGNESH WAREHOUSE & DISTRIBUTORS PVT. LTD . NAME OF COMPANY AY 2003 - 04 AY 2004 - 05 AY 2005 - 06 M/S. ORCHID CONSULTANCY PVT. LTD. 1500000 1000000 RAPID COMMERCIAL & FINLEASE PVT. LTD. 4500000 RCC FINANCE 1500000 SPECTRUM CHEMICALS PVT. LTD. 1500000 OPTIMATE TEXTILES INDUSTRIES PVT. LTD. 2500000 HINDUSTAN CONTINENTAL PVT. LTD. 5000000 TOTAL 1500000 1000000 15000000 TOTAL 17500000 12. THE AO ON THE BASIS OF THE STATEMENT RECORDED BY ADIT OF SHRI RAJENDRA PRASAD AGRAWAL IN THE CASE OF M/S. JUBILIANT MULTITRADE PVT. LTD. TOOK THE VIEW THAT M/S. JUBILIANT MULTITRADE PVT. LTD. AND M/S. DIMPLE MULTITRADE PVT. LTD. WHICH HAVE INVESTED RS. 20 LACS AND RS. 10 LACS RESPECTIVELY IN M/S. GAJANAN DISTRIBUTORS AND DEVELOPERS PVT. LTD. WERE COMPANIES CONTROLLED BY SHRI RAJESH JAIN AND EXIST ONLY ON PAPER. SIMILARLY ON THE BASIS OF THE STATEMENT OF SHRI SUNIL AGRAWAL RECORDED U/S 131 ON 9.1.2008 BY A DIT TOOK THE VIEW THAT M/S. OPTIMATE TEXTILES INDUSTRIES LTD. WHICH HAS INVESTED A SUM OF RS. 33 LACS IN A.Y 2005 - 06 AND RS. 45 LACS IN A.Y 2006 - 07 IS ONLY PAPER COMPANY AND THEY HAVE INVESTED THE MONEY BY RECEIVING EQUIVALENT AMOUNT OF CASH. SIMILARLY O N THE BASIS OF STATEMENT OF SHRI VINAY GANDHI RECORDED U/S 131 ON 14.2.2009 THE AO TOOK THE VIEW THAT THE COMPANY HAS PROVIDED ACCOMMODATION ENTRY AND THEY HAD MEETING IN THIS REGARD WITH SHRI GAURAV SHARMA SON OF THE ASSESSEE. SIMILARLY ON THE BASIS O F THE INQUIRY MADE BY DIT IN RESPECT OF M/S. RAPID COMMERCIAL & FINLEASE PVT. LTD. THE AO TOOK THE VIEW ON THE BASIS OF THE STATEMENT OF SHRI GUNJAN KARUN AND SMT. MADHULIKA KARUN THAT THE COMPANY IS A PAPER COMPANY. WE PERUSED THE STATEMENTS. EVEN THOUG H THESE PERSONS IN THEIR RESPECTIVE STATEMENTS HAVE STATED THAT THE COMPANIES WERE PAPER COMPANIES BUT THEY DID NOT DENY THAT THEY HAVEISSUED CHEQUE AND CHEQUE S HA VE BEEN SIGNED BY THEM ON BEHALF OF THE COMPANIES IN WHICH THEY ARE DIRECTORS. 22 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) THESE PERSONS IN THEIR STATEMENT ALSO STATED THAT THEY HAVE ISSUED THE CHEQUE BY TAKING CASH FROM SHRI GAURAV SHARMA NOT FROM ASSESSEE . THE AO JUST RELYING ON THE STATEMENT S OF THESE PERSONS TOOK THE VIEW THAT THE INVESTMENT IN M/S. GAJANAN DISTRIBUTORS AND DEVELOPERS PVT. LTD. AS WELL AS M/S. VIGNESH WAREHOUSE AND DISTRIBUTORS PVT. LTD. HAVE BEEN MADE BY THE ASSESSEE. NONE OF THE PERSONS IN THEIR STATEMENTS NO - WHERE STATED THAT THEY HAD ANY MEETING WITH THE ASSESSEE OR ASSESSEE HAS PROVIDED THE CASH TO THEM. THE AO EVEN THOUGH RELIED ON THE STATEMENT OF THE DIRECTOR OF THESE COMPANIES WHO HAVE INVESTED IN M/S. GAJANAN DISTRIBUTORS AND DEVELOPERS PVT. LTD. AND M/S. VIGNESH WAREHOUSE AND DISTRIBUTORS PVT. LTD. BUT HAS NOT PROVIDED COPIES OF THESE EVIDENC E TO THE ASSESSEE OR TO THE COMPANIES M/S. GAJANAN DISTRIBUTORS AND DEVELOPERS PVT. LTD. AND M/S. VIGNESH WAREHOUSE AND DISTRIBUTORS PVT. LTD. FOR THEIR REBUTTAL. EVEN THE COPIES OF THE STATEMENT RECORDED BY VARIOUS AUTHORITIES WERE NOT PROVIDED TO US SO THAT WE COULD HAVE PROVIDED THESE COPIES TO THE COUNSEL OF THE ASSESSEE. THE AO HAS RELIED ON THE STATEMENT RECORDED AT THE BACK OF THE ASSESSEE. THIS IS A SETTLED LAW THAT THE STATEMENT RECORDED AT THE BACK OF THE ASSESSEE CANNOT BE USED AS A PIECE OF E VIDENCE AGAINST THE ASSESSEE. THE AO WE NOTED HAS NOT EVEN BROUGHT OUT ANY EVIDENCE ON RECORD THAT THESE PERSONS WHO HAVE PROVIDED AS CONTENDED BY THE REVENUE ACCOMMODATION ENTRIES TO M/S. GAJANAN DISTRIBUTORS AND DEVELOPERS PVT. LTD. AND M/S. VIGNESH W AREHOUSE AND DISTRIBUTORS PVT. LTD. HAVE SHOWN ANY SUCH INCOME IN THEIR RETURN FROM THE BUSINESS OF PROVIDING ENTRIES SO AS TO ESTABLISH THAT IT WAS THEIR BUSINESS OF PROVIDING ACCOMMODATION ENTRIES BY EARNING COMMISSION FROM SUCH ENTRIES. ALL THE COMPANI ES FROM WHOM M/S. GAJANAN DISTRIBUTORS AND DEVELOPERS PVT. LTD. AND M/S. VIGNESH WAREHOUSE AND DISTRIBUTORS PVT. LTD. RECEIVED THE CHEQUES TOWARDS THE CAPITAL CONTRIBUTION ARE DULY REGISTERED WITH THE REGISTRAR OF COMPANIES AND THEIR IDENTITY CANNOT BE DOU BTED. THESE COMPANIES HAVE ISSUED THE CHEQUES. THEY HAVE NOT CONTRIBUTED FOR THE SHARE CAPITAL IN CASH. THE ONUS IS ON THESE COMPANIES IN OUR OPINION TO EXPLAIN FROM 23 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) WHERE THEY HAVE INVESTED THE FUNDS IN M/S. GAJANAN DISTRIBUTORS AND DEVELOPERS PVT. L TD. AND M/S. VIGNESH WAREHOUSE AND DISTRIBUTORS PVT. LTD. THE ASSESSEE IS NOT EXPECTED TO PROVE THE SOURCE OF SOURCE. MERELY THERE HAD BEEN A SURVEY IN THE CASE OF M/S. GAJANAN DISTRIBUTORS AND DEVELOPERS PVT. LTD. AS WELL AS M/S. VIGNESH WAREHOUSE AND D ISTRIBUTORS PVT. LTD. I.E COMPANIES IN WHICH VARIOUS COMPANIES CLAIMED TO BE PAPER COMPANIES LATER ON HAD INVESTED HUGE FUNDS BY WAY OF SHARE CAPITAL CONTRIBUTION CANNOT BE ACCEPTED TO ESCAPE FROM THE INCOME TAX LIABILITY BY GIVING STATEMENT THAT THEY HA VE RECEIVED CASH AND IN LIEU OF ISSUING CHEQUES FOR CONTRIBUTING IN THE CAPITAL OF THESE COMPANIES. NO EVIDENCE OR MATERIAL HAS BEEN PLACED ON RECORD BY THESE VARIOUS COMPANIES BEFORE AO OR BEFORE ADIT THAT THESE COMPANIES HAVE RECEIVED CASH FROM SHRI GA URAV SHARMA. ON THE BASIS OF THEIR STATEMENT RECORDED SUBSEQUENTLY MENTIONING THAT THEY HAVE ISSUED CHEQUE IN LIEU OF CASH RECEIVED FOR PROVIDING ACCOMMODATION ENTRIES WILL NOT ABSOLVE THESE PARTIES FROM INCOME TAX LIABILITY. THE PERSONS WHO CREATED THE P APER COMPANIES OR PROVIDED SUCH TYPE OF ACCOMMODATION ENTRIES SHOULD NOT BE MADE SCOT - FREE. IN OUR OPINION THEY ARE THE MAIN CULPRITS FOR EVADING THE TAXES. NO EVIDENCE OR MATERIAL HAS BEEN BROUGHT ON RECORD WHAT ACTION HAS BEEN TAKEN BY THE REVENUE AGA INST THESE COMPANIES. IN OUR OPINION THE ADDITIONS SHOULD HAVE BEEN MADE UNDER THE INCOME TAX ACT IN THE HANDS OF THESE COMPANIES AS THEY HAVE SHOWN INVESTMENT BY WAY OF CAPITAL CONTRIBUTION IN M/S. GAJANAN DISTRIBUTORS AND DEVELOPERS PVT. LTD. AND M/S. VIGNESH WAREHOUSE AND DISTRIBUTORS PVT. LTD. AND THEY ARE NOT ABLE TO PROVE THE SOURCE OF SUCH INVESTMENT. OUR AFORESAID VIEW IS DULY SUPPORTED BY THE DECISION OFHONBLE S UPREME COURT IN THE CASE OF CIT VS. LOVELY E XPORTS 21 6 CTR . IT APPEARS THAT THE AO WE NT ON WITH THE PRESUMPTION THAT SINCE THE ASSESSEE IS A GOVERNMENT SERVANT AND M/S. GAJANAN DISTRIBUTORS AND DEVELOPERS PVT. LTD. AND M/S. VIGNESH WAREHOUSE AND DISTRIBUTORS PVT. LTD. ARE CONTROLLED BY THE SON OF THE ASSESSEE THEREFORE WHATEVER INVESTMEN T HAS BEEN MADE IN THE SHARE CAPITAL OF THESE COMPANIES BY THE VARIOUS 24 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) COMPANIES THE MONEY MUST HAVE FLOWN FROM THE ASSESSEE. THE ONUS IS ON THE REVENUE TO PROVE THAT THE MONEY HAS FLOWN FROM THE ASSESSEE. THERE HAD BEEN SEARCH IN THE CASE OF THE ASSESS EE AND SEARCH IN THE CASE OF DIRECTORS OF THE COMPANIES . NO EVIDENCE WAS FOUND D URING THE COURSE OF THE SEARCH AND BROUGHT TO OUR KNOWLEDGE OR PRODUCED BY THE LD. DR WHICH MAY PROVE THAT THE ASSESSEE HAS MADE INVESTMENT IN M/S. GAJANAN DISTRIBUTORS AND DEVELOPERS PVT. LTD. AND M/S. VIGNESH WAREHOUSE AND DISTRIBUTORS PVT. LTD. IN THE GARB OF VARIOUS COMPANIES. EVEN NO LOOSE PAPER SEIZED DURING THE COURSE OF THE SEARCH WAS PLACED BEFORE US OR BROUGHT ON RECORD TO PROVE THAT THE ASSESSEE HAS RECEIVED COMMISSION BY WAY OF ILLEGAL GRATIFICATION DURING THESE YEARS. ALTHOUGH THE ADDITION HAS BEEN MADE BY AO IN A.Y.2008 - 09 ON THE BASSIS OF LOOSE PAPERS SEIZED BUT NO ADDITION DURING THE IMPUGNED YEAR WAS MADE IN WHICH THESE COMPANIES RECEIVED THE SHARE CAPITAL. IT IS NOT DENIED THAT THE ASSESSEE IS NEITHER A DIRECTOR NOR A SHAREHOLDER IN M/S. GAJANA N DISTRIBUTORS AND DEVELOPERS PVT. LTD. AND M/S. VIGNESH WAREHOUSE AND DISTRIBUTORS PVT. LTD. EVEN NO EVIDENCE HAS BEEN BROUGHT ON RECORD WHICH MAY PROVE THAT CASH HAS BEEN PAID BY THE SON OF THE ASSESSEE SHRI GAURAV SHARMA FOR MAKING THE INVESTMENT IN M /S. GAJANAN DISTRIBUTORS AND DEVELOPERS PVT. LTD. AND M/S. VIGNESH WAREHOUSE AND DISTRIBUTORS PVT. LTD. THIS IS A SETTLED LAW THAT NO ADDITION CAN BE MADE ON THE BASIS OF PRESUMPTION SURMISES AND CONJECTURES. SUPPOSITION HOWSOEVER STRONG IT MAY BE IT C ANNOT TAKE THE PLACE OF ACTUALITY. THE HON'BLE SUPREME COURT HAS CLEARLY LAID DOWN IN THE CASE OF CIT VS. DAULAT RAM RAWATMULL 87 ITR 349 (SC) (SUPRA) THAT APPARENT IS REAL. THE ONUS IS ON THE PERSON WHO ALLEGES THAT APPARENT IS NOT REAL. IT IS APPAREN T FROM THE RECORD OF M/S. GAJANAN DISTRIBUTORS AND DEVELOPERS PVT. LTD. AND M/S. VIGNESH WAREHOUSE AND DISTRIBUTORS PVT. LTD. THAT THE VARIOUS COMPANIES NAMED IN THE PRECEDING PARAGRAPHS HAVE CONTRIBUTED TOWARDS THE SHARE CAPITAL OF THESE COMPANIES. THE O NUS IN VIEW OF THE AFORESAID DECISION LIES ON THE REVENUE TO PROVE THAT THE ASSESSEE HAS INVESTED IN THESE COMPANIES NOT THE VARIOUS COMPANIES WHICH ARE 25 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) THE SHAREHOLDERS ON RECORD . THE REVENUE IN THIS CASE HAS NOT DISCHARGED ITS ONUS EXCEPT THAT RELYING ON THE STATEMENT S RECORDED AT THE BACK OF THE ASSESSEE THAT THE DIRECTOR OF THE COMPANIES WHICH HAS CONTRIBUTED THE SHARE CAPITAL ARE SIMPLY ENTRY PROVIDERS. THESE PERSONS HAVE ALSO NOT STATED THAT THEY HAVE DEALT WITH THE ASSESSEE. IF THE LAW HAS TO BE I NTERPRETED IN THIS MANNER IF AN ASSESSEE MAKES AN INVESTMENT AND IS NOT ABLE TO EXPLAIN THE SOURCE HE MAY PASS OVER THE LEVY OF TAX OR BURDEN OF TAX ON THE PERSON IN WHICH HE HAS MADE THE INVESTMENT BY STATING THAT HE IS SIMPLY PROVIDING ACCOMMODATION EN TRY AND THE RELATIVE OF OTHER PERSON HAS GIVEN HIM CASH. WE DO NOT AGREE WITH THE CONTENTIONS OF LD. DR THAT M/S. GAJANAN DISTRIBUTORS AND DEVELOPERS PVT. LTD. AND M/S. VIGNESH WAREHOUSE AND DISTRIBUTORS PVT. LTD. ARE BENAMI CONCERNS OF THE ASSESSEE. IN OUR OPINION FOR HOLDING THE CONCERNS TO BE THE BENAMI OF THE ASSESSEE FOLLOWING CONDITIONS MUST BE FULFILLED : I) THE BURDEN TO PROVE WHETHER THE CONCERNS OF SHRI GAURAV SHARMA ARE THE BENAMI CONCERNS OF THE ASSESSEE LIES WITH THE REVENUE AND NOT WITH THE A SSESSEE. (KRISHNANAND VS. STATE OF M.P AIR 1977 SC 797 (SUPRA) II) REVENUE SHOULD PROVE THAT THE ASSESSEE HAD MADE INVESTMENT IN THESE CONCERNS AND SOURCE OF THE CAPITAL IN THESE CONCERNS HAVE ARISEN FROM THE ASSESSEE. III) THE ASSESSEE HAS CONTROL OVER THE BUSINE SS. IV) THE ASSESSEE HAS DERIVED BENEFIT FROM SUCH CONCERNS AND THE PROFIT FROM THESE CONCERNS HAS BEEN ENJOYED BY THE ASSESSEE. 13. ON GOING THROUGH THE ASSESSMENT ORDER AS WELL AS THE MATERIAL FILED BEFORE US WE NOTED THAT THE REVENUE HAS NOT PROVED THAT M /S. GAJANAN DISTRIBUTORS AND DEVELOPERS PVT. LTD. AND M/S. VIGNESH WAREHOUSE AND DISTRIBUTORS PVT. LTD. ARE THE BENAMI CONCERNS OF THE ASSESSEE. M/S. GAJANAN DISTRIBUTORS AND DEVELOPERS PVT. LTD. AND M/S. VIGNESH WAREHOUSE AND DISTRIBUTORS PVT. LTD. ARE I NCORPORATED UNDER THE COMPANIES ACT ON 11.12.2002 AND ARE INDEPENDENT 26 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) CORPORATE ENTITIES. THEY ARE BEING ASSESSED TO INCOME TAX SEPARATELY. THEY ARE HAVING THEIR OWN BUSINESS MAY NOT BE BIG ENOUGH . THESE COMPANIES HAVE SEPARATE PAN AS WELL AS COMPANY REGISTRATION NUMBER UNDER THE COMPANIES ACT. CORPORATE VEIL OF THESE COMPANIES HAVE NOT BEEN LIFTED. THESE COMPANIES ARE FILING THEIR INCOME TAX RETURN FROM YEAR TO YEAR WHICH HAS BEEN ACCEPTED BY T HE REVENUE. THERE HAD BEEN A SEARCH IN THE CASE OF THE ASSESSEE. NO MATERIAL OR EVIDENCE WAS BROUGHT TO OUR KNOWLEDGE WHICH MAY PROVE THAT THESE COMPANIES ARE THE BENAMI CONCERNS OF THE ASSESSEE. THE ASSESSEE IS NOT AUTHORISED TO OPERATE THE BANK ACCOUN T OF THESE COMPANIES. THE ASSESSEE HAS NOT EVEN INTRODUCED THE BANK ACCOUNTS. NO PAPER OR DOCUMENTS HAVE BEEN FOUND EVEN DURING THE COURSE OF THE SEARCH THAT THE ASSESSEE IS HAVING CONTROL OVER THE BUSINESS. THERE HAD BEEN A SEARCH BUT THE REVENUE COULD NOT BRING ANY EVIDENCE WHICH MAY PROVE THAT THE ASSESSEE ENJOYED THE BENEFIT OR PROFIT FROM THESE CONCERNS. MERELY THE SON AND WIFE OF THE ASSESSEE ARE THE DIRECTORS AND HAD MADE INVESTMENT IN THESE CONCERNS DOES NOT MEAN THAT THESE CONCERNS ARE THE BENAM I CONCERNS OF THE ASSESSEE. 1 4 . WE HAVE GONE THROUGH THE DECISIONS AS RELIED BY THE LD. AR. WE NOTED THAT IN THE CASE OF PRAKASH NARAIN VS. CIT 134 ITR 364 THE HON'BLE ALLAHABAD HIGH COURT HAS HELD AS UNDER : THE BURDEN OF PROOF REGARDING BENAMI IS UPON THE ONE WHO ALLEGES BENAMI. NO ABSOLUTE FORMULA OR ACID TEST UNIFORMLY APPLICABLE IN ALL SITUATIONS LAID DOWN; YET IN WEIGHING THE PROBABILITIES AND FOR GATHERING THE RD INDICIA THE COURTS ARE USUALLY GUIDED BY THESE CIRCUMSTANCES: (1) THE SOURCE WHICH THE PURCHASE MONEY CAME; (2) THE NATURE AND POSSESSION OF THE PR AFTER THE PURCHASE; (2) MOTIVE IF ANY FOR GIVING THE TRANSACTION A BENAMI COLOUR; (4) THE POSITION OF THE PARTIES AND THE RELATIONSHIP IF ANY BETWEEN CLAIMANT AND THE ALLEGED BENAMIDAR; (5) THE CUSTODY OF THE TITLE DEEDS AFT SALE; AND (6) THE CONDUCT OF THE PARTIES CONCERNED IN DEALING WITH THE AFTER THE SALE. THE ABOVE INDICIA ARE NOT EXHAUSTIVE AND THEIR EFFICACY ACCORDING TO THE FACTS OF EAC H CASE. NEVERTHELESS THE SOURCE WHENCE THE PURCHASE MONEY CAME IS BY FAR THE MOST IMPORTANT TEST FOR DETERMINING WHETHER THE SALE STANDING IN THE NAME OF ONE PERSON IS IN REALITY FOR THE BENEFIT OF ANOTHER. THE MERE REJECTION OF AN 27 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) EXPLANATION WOULD NOT ENTITLE THE DEPARTMENT TO CLAIM THE CONSIDERATION FOR THE PURCHASE OF THE PROPERTY IN THE NAME OF ANOTHER PROVIDED BY THE ASSESSEE. APART FROM THE RELATIONSHIP BETWEEN THE PARTIES MUST BE SOME EVIDENCE OR MATERIAL TO SUPPORT THE CASE OF THE BENANI NATURE OF THE TRANSACTION. A FINDING REGARDING BENAMI IS A FINDING OF FACT. WHEN A FINDING OF FACT IS BASED ON MATERIAL PARTLY RELEVANT AND PARTLY IRRELEVANT THEN A FINDING IS VITIATED IN LAW. THE ITO HELD THE FOLLOWING PURCHASES MADE IN THE YEARS 1965 - 66 TO 1968 - 6 9 SO BE BENAMI (1) A HOUSE IN THE JOINT NAMES OF THE ASSESSES WIFE AND MOTHER - IN - LAW; (II) FOUR SHOPS IN THE NAMES OF THE ASSESSEES WIFE HIS MOT HER - IN - LAW AND HIS FATHER - IN - LAW; (III) A HOUSE IN THE NAME OF HIS FATHER - IN - LAW; AND (IV) A HOUSE IN THE NAME OF THE ASSESSEES WIFE WHICH ALONE THE ASSESSEE ADMITTED WAS PURCHASED BY HIM IN HIS WIFES NAME. THE AAC HELD THAT THE TRANSACTIONS WERE NOT BENAMI BUT ON FURTHER APPEAL THE TRIBUNAL HELD THAT THE TRANSACTIONS WERE BENAMI FOR THE FOLLOWING REASONS: (I) B THE FATHER - IN - LAW OF THE ASSESSEE COI4D NOT BE BELIEVED WHEN HE SAID THAT HE HAD A SUM OF RS. 1 00 000 IN CASH WITH HIM SINCE HE HAD DISCONTINUED HIS BUSINESS IN 1946. (II) B HAD NO SOURCE OF INCOME AND AT THE RELEVANT PERIOD HE ALONG WIT H HIS WIFE WAS LIVING WITH HIS SON - IN - LAW AND BOTH OF THEM WERE DEPENDENT ON THE ASSESSEE. (III) THE ASSESSEES WIFE WAS THE ONLY ISSUE OF HER PARENTS AND (IV) THE ASSESSEE WAS NOT HONEST AS HE L. HAD ADMITTEDLY PURCHASED A HOUSE PROPERTY BENAMI IN THE NAME OF HIS WIFE. ON A REFERENCE HELD THAT THE MERE FACT THAT THE STATEMENT OF B THAT HE HAD CASH AMOUNTING TO RS.1 00 000 WAS NOT ACCEPTED BY THE TRIBUNAL WOULD NOT LEAD TO THE INFERENCE THAT THE PROPERTIES IN QUESTION WERE PURCHASED BENAMI BY THE ASSE SSEE HIMSELF. THE ASSESSEES MOTHER - IN - LAW HAD STATED THAT SHE HAD IN HER POSSESSION JEWELLERY WORTH RS.15 000 AND CASH OF RS.5 000. THE TRIBUNAL HAD NOT STATED THAT THIS STATEMENT WAS NOT ACCEPTABLE OR WAS BEING REJECTED AND UNLESS IT WERE REJECTED THE TRIBUNAL COULD NOT ENTER A FINDING THAT BOTH THE FATHER - IN - LAW AND MOTHER - IN - LAW OF THE ASSESSEE WERE DEPENDENT ON HIM. THE FACT THAT THE ASSESSEES WIFE WAS THE ONLY CHILD OF HER PARENTS COULD NOT LEAD TO THE CONCLUSION JLHAL THE PURCHASES OF THE PROPERTI ES WERE FINANCED NOT BY HER PARENTS BUT BY THE ASSESSEE. IN INDIA BENAMI TRANSACTIONS WERE NOT CONSIDERED TO BE DISHONEST AND THE TRIBUNAL ERRED IN CONCLUDING THAT THE ASSESSEE WAS DISHONEST BECAUSE HE HAD ADMITTEDLY PURCHASED ONE HOUSE BENAMI IN THE NAME OF HIS WIFE. NO MOTIVE HAD BEEN SUGGESTED FOR THE BENAMI PURCHASES BY THE ASSESSEE. THERE WAS NO MATERIAL OR EVIDENCE ON RECORD IN SUPPORT OF THE FINDING OF BENAMI RECORDED BY SHE TRIBUNAL. THE PURCHASES OF THE FIRST THREE ITEMS OF PROPERTIES WERE NOT BENA MI PURCHASES FOR PURPOSES OF INCOME - TAX. THEY COULD NOT BE INCLUDED IN THE TOTAL WEALTH OF THE ASSESSEE. 28 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) THIS JUDGMENT IN OUR OPINION SUPPORTS THE CASE OF THE ASSESSEE BECAUSE IN THE CASE BEFORE US ALSO THE AO HAS MERELY REJECTED THE EXPLANATION OF THE A SSESSEE WITHOUT BRINGING ANY EVIDENCE ON RECORD TO SUPPORT THE CASE OF THE BENAMI NATURE OF THE TRANSACTION. A FINDING REGARDING THE BENAMI NATURE IS A FINDING OF FACT AND IT MUST BE BASED ON THE RELEVANT MATERIAL ON RECORD. NONE OF THE CIRCUMSTANCES AS LA ID DOWN UNDER THIS JUDGMENT TO PROVE THE BENAMI NATURE HAS BEEN ESTABLISHED BY THE REVENUE WHILE TREATING THE SE CONCERNS BELONGING TO ASSESSEES WIFE AND SON TO BE THE BENAMI CONCERNS OF THE ASSESSEE. 1 5 . WE HAVE ALSO GONE THROUGH THE DECISION IN THE CASE OF GULZARILAL RAWAT VS. CIT 259 ITR 176. IN THIS CASE WE NOTED THAT THE INCOME - TAX OFFICER HELD THAT THE INCOME FROM A CERTAIN BUSINESS CONCERN BELONGED TO THE ASSESSEE IN THE ASSESSMENT YEARS 1974 - 75 AND 1975 - 76. THE ASSESSEE EXPLAINED THAT THE BUS INESS BELONGED TO HIS SON S WHO INVESTED RS.8 000 AFTER DISCLOSURE OF THE SAME UNDER THE VOLUNTARY DISCLOSURE SCHEME IT WAS ALSO EXPLAINED THAT THOUGH S WAS A STUDENT AT THAT POINT OF TIME HE EMPLOYED HIS MATERNAL UNCLE WHO LOOKED AFTER THE BUSINESS OF THE CONCERN AN RS.700 PER MONTH HAD BEEN PAID TO HIM. THE INCOME - TAX OFFICER REJECTED EXPLANATION AND HIS DECISION WAS UPHELD BY THE TRIBUNAL. ON A REFERENCE: HELD THAT CONSIDERING THE FACTS THAT WHEN THE INVESTMENT IN THE FIRM HAD BEEN SHOWN AFTER DI SCLOSURE OF STATEMENT UNDER THE VOLUNTARY DISCLOSURE SCHEME THAT THE DEALINGS OF THE CONCERN WERE NOT ONLY WITH THE ASSESSEE BUT IN THE OPEN MARKET WITH OTHER SIMILAR TYPE OF TRADERS THAT THE CONCERN HAD SALES TAX REGISTRATION AND WAS ALSO REGISTERED UND ER THE SHOPS AND COMMERCIAL ESTABLISHMENTS ACT THE BUSINESS INCOME FROM THE CONCERN COULD NOT TAXED IN THE HANDS OF THE ASSESSEE MERELY ON THE GROUND THAT THE PROPRIETOR THE CONCERN WAS THE SON OF THE ASSESSEE. NORMALLY IN A REFERENCE THE COURT DOES NOT INTERFERE IN THE FINDING OF THE TRIBUNAL BUT THE FINDING OF THE TRIBUNAL AS TO WHETHER THE CONCERN WAS INDEPENDENT OR BENAMI PROPERTY OF THE ASSESS WAS PERVERSE. IN SUCH CIRCUMSTANCES THE COURT SHOULD INTERFERE. THE INCOME FROM BUSINESS OF THE CONCERN IN QUESTION WAS NOT ASSESSABLE IN THE HANDS THE ASSESSEE. 29 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) THIS DECISION IN OUR OPINION IS SQUARELY APPLICABLE TO THE FACTS OF THE ASSESSEES CASE. MERELY CERTAIN PAPERS WHICH DO NOT EMPOWER THE ASSESSEE TO CARRY ON THE BUSINESS WERE FOUND AT THE PREMISES OF THE CONCERN IN WHICH ASSESSEE S SON IS A DIRECTOR CANNOT AUTHORISE THE REVENUE TO REGARD THESE CONCERNS TO BE THE BENAMI CONCERNS OF THE ASSESSEE. THESE COMPANIES ARE BEING ASSESSED SEPARATELY TO INCOME - TAX AND THE INCOME BY THESE CONCERNS ARE DULY SHOW N BY THEM IN THEIR RESPECTIVE INCOME TAX RETURN S . THE INVESTMENT MADE IN THE SE CONCERN S WERE NOT PROVED TO HAVE BEEN MADE BY THE ASSESSEE. THEREFORE IN OUR OPINION THESE CONCERNS CANNOT BE REGARDED TO BE THE BENAMI CONCERN S OF THE ASSESSEE MERELY ON THE GROUND THAT IN THESE CONCERNS THE ASSESSEES WIFE AND SON ARE THE MAJOR SHARE HOLDERS . 1 6 . WE HAVE ALSO GONE THROUGH THE DECISION IN THE CASE OF DHIRAJLAL GIRDHARILAL VS. CIT 26 ITR 736 (SC). IN THIS CASE IT WAS HELD THAT THE QUESTION WHETHER A HINDU UNDIVIDED FAMILY IS DOING BUSINESS IN SHARES IS A QUESTION OF FACT; BUT IF THE COURT OF FACT WHOSE DECISION ON A QUESTION OF FACT IS FINAL ARRIVES AT THE DECISION BY CONSIDERING MATERIAL WHICH IS IRRELEVANT TO THE INQUIRY OR BY CONSIDERING MATERIAL WHICH IS PARTLY RELEVANT AND PARTLY IRRELEVANT OR BASES ITS DECISION PARTLY ON CONJECTURES SURMISES AND SUSPICIONS AND PARTLY ON EVIDENCE THEN IN SUCH A SITUATION CLEARLY AN ISSUE OF LAW ARISES. WHEN A COURT OF FACT ACTS ON MATERIAL PARTLY RELEVANT AND PARTLY IRRELEVANT IT IS IMPOSSIBLE TO SAY TO WHAT EXTENT THE MIND OF THE COURT WAS AFFECTED BY THE IRRELEVANT MATERIAL USED BY IT IN ARRIVING AT ITS FINDING. SUCH A FINDING IS VITIATED BECAUSE OF THE USE OF INADMISSIBLE MATER IAL AND THEREBY AN ISSUE OF LAW ARISES. IN THIS CASE ALSO THE HON'BLE SUPREME COURT HAS CATEGORICALLY HELD THAT A FINDING OF FACT IS FINAL IF IT HAS BEEN ARRIVED AT BY CONSIDERING THE RELEVANT MATERIAL OR EVIDENCE. THE FINDING CANNOT BE BASED ON CONJECTURES SURMISES AND SUSPICION. THEREFORE TH E REVENUE IN OUR OPINION CANNOT HOLD MERELY ON PRESUMPTIONS THAT THESE CONCERNS ARE BENAMI CONCERNS OF THE ASSESSEE AND WHATEVER SHARE CAPITAL WAS BROUGHT IN THAT BELONG TO THE ASSESSEE . 30 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) 1 7 . WE HAVE ALSO GONE THROUGH THE DECISION IN THE CASE OF DHAKES WARI COTTON MILLS LTD. VS. CIT 26 ITR 775 (SC). IN THIS CASE IT WAS HELD THAT - IN THIS CASE WE ARE OF THE OPINION THAT THE TRIBUNAL VIOLATED CERTAIN FUNDAMENTAL RULES OR JUSTICE IN REACHING ITS CONCLUSIONS. FIRSTLY IT DID NOT DISCLOSE TO THE ASSESSEE WHAT INFORMATION HAD BEEN SUPPLIED TO IT BY THE DEPARTMENTAL REPRESENTATIVE. NEXT IT DID NOT GIVE ANY OPPORTUNITY TO THE COMPANY TO REBUT THE MATERIAL FURNISHED TO IT BY HIM AND LASTLY IT DECLINED TO TAKE ALL THE MATERIAL THAT THE ASSESSEE WANTED TO PR ODUCE IN SUPPORT OF ITS CASE. THE RESULT IS THAT THE ASSESSEE HAD NOT HAD A FAIR HEARING. THE ESTIMATE OF THE GROSS RATE OF PROFIT ON SALES BOTH BY THE INCOME - TAX OFFICER AND THE TRIBUNAL SEEMS TO BE BASED ON SURMISES SUSPICIONS AND CONJECTURES. IT IS SOMEWHAT SURPRISING THAT THE TRIBUNAL TOOK FROM THE REPRESENTATIVE OF THE DEPARTMENT A STATEMENT OF GROSS PROFIT RATES OF OTHER COTTON MILLS WITHOUT SHOWING THAT STATEMENT TO THE ASSESSEE AND WITHOUT GIVING HIM AN OPPORTUNITY TO SHOW THAT THAT STATEMENT HAD NO RELEVANCY WHATSOEVER TO THE CASE OF THE MILL IN QUESTION. IT IS NOT KNOWN WHETHER THE MILLS WHICH HAD DISCLOSED THESE RATES WERE SITUATE IN BENGAL OR ELSEWHERE AND WHETHER THESE MILLS WERE SIMILARLY SITUATED AND CIRCUMSTANCED. NOT ONLY DID THE TRIB UNAL NOT SHOW THE INFORMATION GIVEN BY THE REPRESENTATIVE OF THE DEPARTMENT TO THE APPELLANT BUT IT REFUSED EVEN TO LOOK AT THE TRUNK LOAD OF BOOKS AND PAPERS WHICH MR. BANERJEE PRODUCED BEFORE THE ACCOUNTANT MEMBER IN HIS CHAMBER. NO HARM WOULD HAVE BEEN DONE IF AFTER NOTICE TO THE DEPARTMENT THE TRUNK HAD BEEN OPENED AND SOME TIME DEVOTED TO SEE WHAT IT CONTAINED. THE ASSESSMENT IN THIS CASE AND IN THE CONNECTED APPEAL WE ARE TOLD WAS ABOVE THE FIGURE OF RS.55 LAKHS AND IT WAS MEET AND PROPER WHEN DEAL ING WITH A MATTER OF THIS MAGNITUDE NOT TO EMPLOY UNNECESSARY HASTE AND SHOW IMPATIENCE PARTICULARLY WHEN IT WAS KNOWN TO THE DEPARTMENT THAT THE BOOKS OF THE ASSESSEE WERE IN THE CUSTODY OF THE SUB - DIVISIONAL OFFICER NARAYANGANJ WE THINK THAT BOTH THE INCOME - TAX OFFICER AND THE TRIBUNAL IN ESTIMATING THE GROSS PROFIT RATE ON SALES DID NOT ACT ON ANY MATERIAL BUT ACTED ON PURE GUESS AND SUSPICION. IT IS THUS A FIT CASE FOR EXERCISE OF OUR POWER UNDER ARTICLE 136. FROM THE PERUSAL OF THIS DECISION ALSO IT IS APPARENT THAT ESTIMATION OF THE GROSS PROFIT OR INCOME CANNOT BE BASED ON SURMISES CONJECTURES OR SUSPICION. THIS IS A WELL SETTLED LAW THAT THE ONUS IS ON THE REVENUE TO PROVE THAT THESE COMPANIES ARE BENAMI CONCERNS OF THE ASSESSEE AND THE ASSESSE E HAS MADE THE INVESTMENTS AS WELL AS ENJOYED THE FRUITS THERE - FROM. THEREFORE THIS DECISION IS APPLICABLE 31 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) ONLY TO THE EXTENT THAT THE ADDITION CANNOT BE BASED ON SURMISES CONJECTURES OR SUSPICION . 1 8 . WE HAVE ALSO GONE THROUGH THE DECISION IN THE CASE OF OMAR SALAY MOHAMED SAIT VS. CIT 37 ITR 151 (SC). IN THIS CASE IT WAS HELD THAT - THE INCOME - TAX APPELLATE TRIBUNAL IS A FACT FINDING TRIBUNAL AND IF IT ARRIVES AT ITS OWN CONCLUSIONS OF FACT AFTER DUE CONSIDERATION OF THE EVIDENCE BEFORE IT THE COURT WILL NOT INTERFERE. IT IS NECESSARY HOWEVER THAT EVERY FACT FOR AND AGAINST THE ASSESSES MUST HAVE BEEN CONSIDERED WITH DUE CARE AND THE TRIBUNAL MUST HAVE GIVEN ITS FINDING IN A MANNER WHICH WOULD CL EARLY INDICATE WHAT WERE THE QUESTIONS WHICH AROSE FOR DETERMINATION WHAT WAS THE EVIDENCE PRO AND CONTRA IN REGARD TO EACH ONE OF THEM AND WHAT WERE THE FINDINGS REACHED ON THE EVIDENCE ON RECORD BEFORE IT. THE CONCLUSIONS REACHED BY THE TRIBUNAL SHOULD NOT BE COLOURED BY ANY IRRELEVANT CONSIDERATIONS OR MATTERS OF PREJUDICE AND IF THERE ARE ANY CIRCUMSTANCES WHICH REQUIRE TO BE EXPLAINED BY THE ASSESSEE THE ASSESSES SHOULD BE GIVEN AN OPPORTUNITY OF DOING SO. ON NO ACCOUNT WHATEVER SHOULD THE TRIBUNAL B ASE ITS FINDINGS ON SUSPICIONS CONJUNCTURES OR SURMISES; NOR SHOULD IT ACT ON NO EVIDENCE AT ALL OR ON IMPROPER REJECTION OF MATERIAL AND RELEVANT EVIDENCE OR PARTLY ON EVIDENCE AND PARTLY ON SUSPICIONS CONJUNCTURES OR SURMISES AND IF IT DOES ANYTHING O F THE SORT ITS FINDINGS EVEN THOUGH ON QUESTIONS OF FACT WILL BE LIABLE TO BE SET ASIDE BY THE COURT. [THE SUPREME COURT ACCORDINGLY ON THE FACTS SET ASIDE THE ORDER OF THE APPELLATE TRIBUNAL IN THIS CASE AND REMANDED THE MATTER FOR RECONSIDERATION IN ACCORDANCE WITH LAW ON THE GROUND THAT THE APPELLATE TRIBUNAL HAD IMPROPERLY REJECTED EVIDENCE GATHERED BY THE INCOME - TAX OFFICER AFTER THE PASSING OF THE ASSESSMENT ORDER BUT PENDING AN APPEAL FROM THE ASSESSMENT ORDER TO THE APPELLATE ASSISTANT COMMISSI ONER.] FROM THE PERUSAL OF THE SAID CASE IT IS APPARENT THAT FINDING HAS TO BE BASED ON THE RELEVANT CONSIDERATION AND THE MATERIAL. NO ADDITION CAN BE SUSTAINED WHICH IS NOT BASED ON THE RELEVANT MATERIAL OR EVIDENCE. 1 9 . WE HAVE ALSO GONE THROUGH THE DECISION IN THE CASE OF CIT VS. DAULAT RAM RAWATMULL 87 ITR 349 (SC). IN THIS CASE IT WAS HELD THAT APPARENT IS REAL. THE ONUS IS ON THE PERSON WHO CLAIMS THAT THE APPARENT IS NOT REAL. BOTH THESE 32 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) CONCERNS ARE SEPARETELY ASS ESSED TO TAX. THE ASSESSEE IS NEITHER A DIRECTOR NOR SHARE HOLDER IN THESE CONCERNS. THERE HAD BEEN SEARCH AND THERE IS NO EVIDENCE BEING FOUND THAT THE ASSESSEE HAS INVESTED IN THE CAPITAL OF THESE COMPANIES. IF THE REVENUE WANTS TO TREAT IT TO BE THE BEN AMI CONCERN OF THE ASSESSEE IN OUR OPINION IN VIEW OF THE DECISION OF THE SUPREME COURT THE ONUS IS ON THE REVENUE TO PROVE THAT THESE CONCERNS ARE THE BENAMI CONCERNS OF THE ASSESSEE. 20. WE HAVE ALSO GONE THROUGH THE DECISION IN THE CASE OF SHEO NARAIN LAL (L.) 26 ITR 249 (ALL). IN THIS CASE THE QUESTION BEFORE THE COURT WAS WHETHER THERE WAS SUFFICIENT MATERIAL ON THE BASIS OF WHICH THE TRIBUNAL COULD COME TO THE CONCLUSION THAT THE WIF E WAS BENAMIDAR FOR THE HUSBAND. WHILE DECIDING THIS QUESTION THE ALLAHABAD HIGH COURT HAS HELD THAT THERE IS NO DOUBT THAT THE BURDEN OF PROOF WAS ON THE REVENUE TO PROVE THAT THE WIFE WAS A BENAMIDAR FOR HER HUSBAND. THE PRESUMPTION MUST BE THAT WHEN THE HOUSE STOOD IN THE NAME OF WIFE SHE WAS THE OWNER THEREOF AND IT WAS FOR THE PERSONS ALLEGING THAT SHE WAS MERELY A BENAMIDAR TO PROVE THE ALLEGATION EITHER BY DIRECT EVIDENCE OR BY SUBSTANTIAL EVIDENCE. THIS CASE IN OUR OPINION WILL SUPPORT THE ASSES SEE OF THE ASSESSEE BECAUSE IN OUR OPINION THE REVENUE HAS NOT BROUGHT ANY EVIDENCE ON RECORD THAT THESE CONCERNS ARE BENAMI CONCERN OF THE ASSESSEE. THE ASSESSEE IN HIS STATEMENT HAS NOT ACCEPTED ABOUT THE INVESTMENTS IN THE CONCERN BEING ARRANGED BY HIM . THE CONCERN IS NOT CONTROLLED AND MANAGED BY THE ASSESSEE. THE ASSESSEE HAS NOT DERIVED THE BENEFIT FROM THE SE CONCERN S . 21 . WE HAVE ALSO GONE THROUGH THE DECISION IN THE CASE OF KURELLA PULLAYYA VS. CIT 45 ITR 364 (AP). IN THIS CASE ALSO THE PROPOSI TION OF LAW WAS THAT THE BURDEN OF ESTABLISHING THE BENAMI IS ON THE PARTY WHO ALLEGES SO. IN THIS CASE THE BUSINESS WAS CARRIED ON IN THE NAME OF THE WIFE. BENAMI TRANSACTION WAS ALLEGED. IT WAS FOUND THE ONUS WAS ON THE AO TO PROVE THAT THE BUSINESS WAS BENAMI IN THE NAME OF THE WIFE OF THE ASSESSEE. IN THE CASE BEFORE US THE 33 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) REVENUE IN OUR OPINION HAS NOT DISCHARGED THE ONUS THAT THE BUSINESS BELONG S TO THE ASSESSEE. THIS CASE ALSO ON THE FACTS IN OUR OPINION SUPPORT S THE CASE OF ASSESSEE. 2 2 . WE HAVE ALSO GONE THROUGH THE DECISION IN THE CASE OF RAMASWAMI NAIDU (V.) VS. CIT 93 ITR 341 (MAD). IT WAS HELD THAT THE BURDEN OF PROOF WAS ON THE DEPARTMENT TO SHOW THAT THE REAL OWNER WAS THE ASSESSEE AND THE AMOUNT BELONGED TO THE ASSESSEE. SIMILAR THE PROP OSITION OF LAW WAS ALSO LAID DOWN BY THE ALLAHABAD HIGH COURT IN THE CASE OF 98 ITR 0280 CIT VS. DAYA CHAND JAIN AS RELIED ON BY THE LEARNED AR. WE HAVE ALSO GONE THROUGH THE DECISION IN THE CASE OF CIT VS. DAYA CHAND JAIN VAIDYA 98 ITR 280 (ALL). IN THI S CASE WE NOTED THAT THE ASSESSEE HIS WIFE TWO MAJOR AND TWO MINOR SONS WERE THE SHAREHOLDERS OF A PRIVATE COMPANY. THE EXPLANATION GIVEN FOR THE SOURCE OF RS.40 500/ - PAID FOR THE ALLOTMENT OF ADDITIONAL SHARES TO THE WIFE AND HER TWO MAJOR SONS WAS NO T ACCEPTED BY THE ITO WHO TREATED THE AMOUNT AS INCOME FROM UNDISCLOSED SOURCE OF THE ASSESSEE AND ASSESSED THE SAME IN THE HANDS OF THE ASSESSEE. TRIBUNAL REVERSED THE ORDER ON A REFERENCE HONBLE HIGH COURT HELD AGREEING WITH THE TRIBUNAL THAT THE REVEN UE COULD SUCCEED ONLY IN CASE THEY HAD BROUGHT ON RECORD MATERIAL FROM WHICH IT COULD BE CONCLUDED THAT THE DEPOSIT MADE BY THE WIFE AND TWO MAJOR SONS WERE IN FACT MADE BY THE ASSESSEE. THIS DECISION ALSO SUPPORTS THE CASE OF THE ASSESSEE. 2 3 . WE HAVE ALSO GONE THROUGH THE DECISION IN THE CASE OF SUKHDAYAL RAMBILAS VS. CIT 136 ITR 414 (BOM) HELD THAT THE FIXED DEPOSIT WAS IN THE NAME OF THE PARTNER LOAN WAS TAKEN BY THE FIRM. THE PARTNER WAS NOT ABLE TO SATISFACTORILY EXPLAIN THE SOURCE OF DEP OSIT. IT WAS HELD THAT IT WILL NOT AUTOMATICALLY MEAN THAT THE FIXED DEPOSIT BELONG TO THE ASSESSEE FIRM. 34 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) 24. IN VIEW OF OUR AFORESAID DISCUSSION WE UPHOLD THE ORDER OF CIT(A)SO FAR IT RELATES TO DELETION OF ADDITION IN THE HANDS OF THE ASSESSEE. WE HA VE ALREADY DELETED THE ADDITION IN THE HANDS OF THESE COMPANIES ALSO VIDE OUR SEPARATE ORDERS. THUS GROUND NO . 1 IN A.YS 2003 - 04 2004 - 05 2005 - 06 AND 2006 - 07 AND GROUND NO. 2 IN A.YS 2003 - 04 2004 - 05 2005 - 06 STANDS DISMISSED. 2 5 . GROUND NO. 3 IN A.Y 20 03 - 04 RELATES TO THE DELETION OF ADDITION OF RS. 27 LACS MADE BY THE AO ON ACCOUNT OF UNDISCLOSED INCOME OF SHRI GAURAV SHARMA. THE FACTS RELATING TO THIS GROUND ARE THAT THE AO NOTED FROM THE RETURN FILED BY SHRI GAURAV SHARMA THE SON OF THE ASSESSEE TH AT SHRI GAURAV SHARMA HAD RECEIVED GIFT OF RS. 22 50 000/ - INADVERTENTLY TAKEN AS RS. 27 LACS. IN THE ABSENCE OF PROOF OF GENUINENESS OF THE GIFT THE AO SUBSTANTIVELY ADDED THE SUM OF RS. 27 LACS IN THE INCOME OF THE ASSESSEE WHILE PROTECTIVELY ADDED THE SAME IN THE HANDS OF SHRI GAURAV SHARMA. 2 6 . WE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME. WE NOTED THAT THE TOTAL GIFTS SHOWN BY SHRI GAURAV SHARMA IN HIS RETURN ORIGINALLY FILED ON 20.10.2003 ARE ONLY RS. 22 50 000/ - . BY MISTAKE THE AO HAS TAKEN RS.5 LACS IN THE CASE OF MILAN PAREKH INSTEAD OF RS. 50 000/ - AND THEREFORE TOOK THE FIGURE OF RS. 27 LACS WHILE THE CORRECT FIGURE OF SUCH GIFT RECEIVED BY THE ASSESSEES SON IS ONLY RS. 22 50 000/ - . THE ASSESSEES SON SHRI GAURAV SHAR MA HAS SHOWN TH ESE GIFT S IN HIS ORIGINAL RETURN FILED MUCH PRIOR TO SEARCH AND FOR WHICH THE ASSESSMENT WAS NOT PENDING AT THE TIME OF SEARCH AND THEREFORE COULD HAVE NOT ABATED. THESE GIFTS WERE ALSO AGAIN SHOWN BY GAURAVE SHARMA IN HIS RETURNS FILED IN R ESPONSE TO NOTICE ISSUED U/S 153A. THERE HAD BEEN A SEARCH IN THE CASE OF THE ASSESSEE BUT NO EVIDENCE OR MATERIAL WAS FOUND OR BROUGHT ON RECORD WHICH MAY PROVE THAT THE GIFTS HAVE BEEN RECEIVED BY THE ASSESSEE. THE GIFTS HAD BEEN RECEIVED THROUGH CHEQU E AND SHRI GAURAV SHARMA HAS SUBMITTED THE RELEVANT EVIDENCE. WHETHER SHRI GAURAV SHARMA HAS PROVED 3 5 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) GENUINENESS OF THE GIFT S HAS TO BE SEEN IN HIS CASE. THERE IS NO EVIDENCE ON RECORD WHICH MAY PROVE THAT THE FUNDS HAVE FLOWN FOR THESE GIFTS FROM THE ASSESSEE. WE THEREFORE CONFIRM THE ORDER OF CIT(A) THAT THESE GIFTS CANNOT BE ADDED IN THE HANDS OF THE ASSESSEE. TO THAT EX TENT WE CONFIRM THE ORDER OF THE CIT(A). THUS GROUND NO. 3 IN A.Y 2003 - 04 STANDS DISMISSED. 2 7 . GROUND NO. 4 IN A.Y 2003 - 04 GROUND NO. 3 IN A.YS 2004 - 05 AND 2005 - 06 RELATE TO THE COMMON ISSUE OF ASSESSING AGRICULTURAL INCOME RETURNED BY THE WIFE OF THE ASSESSEE SMT. SHASHI SHARMA IN THE HANDS OF THE ASSESSEE TREATING THEM TO BE THE INCOME FROM OTHER SOURCES. WE HAVE ALREADY ADJUDICATED THIS ISSUE WHILE DISPOSING OFF THE APPEAL IN THE CASE OF SMT. SHASHI SHARMA WIFE OF THE ASSESSEE IN IT(SS) NO. 531 178 TO 181/IND/2013 IN WHICH THIS TRIBUNAL HAS HELD AS UNDER : 9. WE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME ALONG WITH THE ORDER OF THE TAX AUTHORITIES BELOW. WE HAVE ALSO GONE THROUGH THE ORDER OF NAGPUR BENCH IN ITA NO. 1/NAG/2008 IN THE CASE OF SMT. RUKSANA BEGUM DT. 26.6.2009 IN WHICH IT HAS BEEN HELD THAT AGRICULTURAL INCOME AT RS.30 500/ - PER ACRE IS REASONABLE IN THE ABSENCE OF DAY TO DAY ACCOUNT HAVING BEEN MAINTAINED BY THE ASSESSEE AS RELIED ON BY THE LD. AR. WE NOTED THAT DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS THE ASSESSEE HAS PRODUCED BEFORE THE AO THE PROOF OF OWNING AGRICULTURAL LAND AS WELL AS ABSTRACT IN FORM - P2 COPY OF WHICH ALSO WAS PLACED BEFORE US FROM PG. 64 TO 88. THIS EVIDENCE PROVES THAT THE ASSESSEE IS CULTIVATING THE LAND AND GETTING AGRICULTURAL PRODUCE. WE ALSO NOTED THAT THE ASSESSEE HAS RETURNED AGRICULTURAL INCOME DURING THE ASSESSMENT YEAR 2001 - 02 AT RS.2 72 082/ - WHICH IS APPARENTLY CLEAR FROM THE COPY OF THE RETURN AVAILABLE AT PG. 1 - 3. THE ASSESSMENT HAS BEEN RE - OPENED U/S 148 BUT THE AO DID NOT DISPUTE THE AGRICULTURAL INCOME EARNED BY THE ASSESSEE AT RS.2 72 082/ - . WE NOTED THAT IN EACH OF THE YEAR THE NET AGRICULTURAL INCOME SHOWN BY THE ASSESSEE PER ACRE IS AS UNDER : ASSE SSMENT YEAR INCOME FROM OTHER SOURCES 2002 - 03 RS.14 774/ - 2003 - 04 RS. 9 460/ - 2004 - 05 RS.20 485/ - 2005 - 06 RS.16 642/ - 36 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) IN A.Y 2001 - 02 THE ASSESSEE HAS RETURNED AGRICULTURAL INCOME @ RS.14 320/ - PER ACRE WHICH HAS DULY BEEN ACCEPTED BY THE AO. WE HAVE ALSO GONE THROUGH THE DECISION OF NAGPUR BENCH OF THIS TRIBUNAL IN ITA NO. 1/NAG/2008 IN THE CASE OF SMT. RUKSANA BEGUM (SUPRA). IN THIS CASE WE NOTED THAT THIS TRIBUNAL VIDE ORDER DT. 26.6.2009 HAS HELD AS UNDER : 8. WE H AVE CONSIDERED RIVAL SUBMISSIONS ORDERS OF THE AUTHORITIES BELOW AND THE MATERIALS AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE IS OWNING AGRICULTURAL LAND WHERE AGRICULTURAL OPERATIONS HAVE BEEN CARRIED ON. THE AGRICULTURAL INCOME HAS BEE N DECLARED BY THE ASSESSEE IN EARLIER YEARS AND IN SUBSEQUENT YEARS AS WELL WHICH HAS BEEN ACCEPTED BY THE TRIBUNAL. IN THE YEAR UNDER CONSIDERATION THE CARRYING OF AGRICULTURAL ACTIVITIES IS NOT IN DISPUTE AND ONLY QUANTUM OF REVENUE FROM SUCH ACTIVITIE S IS IN DISPUTE. THE A.O. HAS REJECTED THE TOTAL AGRICULTURAL CLAIMED BY THE ASSESSEE WHEREIN THE LD. CIT(A) HAS ACCEPTED THE CLAIM OF THE ASSESSEE TO THE EXTENT OF RS.20 000/ - PER ACRE AS AGAINST RS.30 500/ - APPROXIMATELY ACCEPTED BY THE TRIBUNAL IN THE C ASE OF LINK HOUSE INDUSTRY LTD. (SUPRA) WHICH DECISION HAS BEEN RELIED ON BY THE LD. CIT(A). HOWEVER THE LD. CIT(A) HAS NOT GIVEN ANY REASON FOR FIXING THE YIELD AT RS.20 000/ - PER ACRE. WE FURTHER FIND THAT THE ASSESSEE IS GROWING ORANGES AND MOSAMBIES WHICH ARE ALSO CASH CROPS AS IN THE CASE OF LINK HOUSE INDUSTRIES LTD. (SUPRA) HENCE WE SEE NO REASON NOT TO ACCEPT THE RATIO OF THAT DECISION IN TOTO. ACCORDINGLY WE FIX THE YIELD AT RS.30 500/ - PER ACRE. CONSEQUENTLY THE ASSESSEE GETS FURTHER RELIEF OF RS.42 000/ - . THUS THIS GROUND OF APPEAL OF ASSESSEE IS ALLOWED IN PART. THE FACTS INVOLVED IN THIS CASE ALSO WE FEEL ARE SIMILAR TO THE FACTS IN THE CASE OF SMT. RUKSANA BEGUM. WE NOTED THAT THE CIT(A) IN EACH OF THE ASSESSMENT YEAR HAS ACCEPTED 90 % OF THE RECEIPT FROM AGRICULTURE AS RETURNED BY THE ASSESSEE TO BE AGRICULTURAL INCOME BUT TREATED APPROXIMATELY 10% OF THE RECEIPT TO THE NON - AGRICULTURAL. THE BASIS OF MAKING ASSUMPTION IN THIS MANNER HAS NOT BEEN GIVEN. THERE CANNOT BE ANY THUMB RULE HOW MUCH INCOME ONE PERSON MAY DERIVE FROM AGRICULTURE. ONCE THE NAGPUR BENCH OF THIS TRIBUNAL HAS ACCEPTED RS.30 500/ - PER ACRE IN A.Y 1999 - 2000 WHICH IS MUCH ABOVE THE INCOME PER ACRE AS RETURNED BY THE ASSESSEE IN EACH OF THE IMPUGNED ASSESSMENT YEAR WE ARE BOUND TO ACCEPT THE AGRICULTURAL INCOME AS RETURNED BY THE ASSESSEE IN EACH OF THE ASSESSMENT YEARS. WE ACCORDINGLY SET ASIDE THE ORDER OF CIT(A) ON THIS ISSUE AND DIRECT THE AO TO ACCEPT THE AGRICULTURAL INCOME AS RETURNED BY THE ASSESSEE AS TH E AGRICULTURAL INCOME IN EACH OF THE ASSESSMENT YEAR AND THE AGRICULTURAL INCOME SO DERIVED SHOULD BE ASSESSED IN THE HANDS OF THE ASSESSEE SUBSTANTIVELY. THUS GROUND NOS. 1 & 2 IN EACH OF ASSESSMENT YEARS IS ALLOWED. 37 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) RESPECTFULLY FOLLOWING OUR AFORESA ID DECISION WE CONFIRM THE ORDER OF CIT(A) DELETING THIS INCOME FROM THE HANDS OF THE ASSESSEE. THUS GROUND NO. 4 IN A.Y 2003 - 04 GROUND NO. 3 IN A.YS 2004 - 05 AND 2005 - 06 STANDS DISMISSED. 2 8 . THIS DISPOSES OFF THE APPEAL FOR A.YS 2003 - 04 AND 2004 - 05. 2 9 . GROUND NO. 4 IN A.Y 2005 - 06 GROUND NOS. 2 & 3 IN A.Y 2006 - 07 AND GROUND NO. 1 IN A.Y 2007 - 08 RELATING TO SUBSTANTIVE ADDITION MADE BY THE AO IN RESPECT OF UNEXPLAINED CASH DEPOSIT IN THE BANK ACCOUNT OF SMT. SHASHI SHARMA DELETED BY THE CIT(A) IS COM MON IN ALL THE YEARS THEREFORE THESE GROUNDS ARE DECIDED AS AGREED BY BOTH THE PARTIES ON THE BASIS OF FACTS RELATING TO A.Y 2005 - 06. 30 . THE BRIEF FACTS RELATING TO THESE GROUNDS ARE THAT THE AO NOTED THAT SMT. SHASHI SHARMA DEPOSITED CASH IN BANK ACCOUNT WITH ASTHA MAHILA SAHAKARI BANK DURING A.Y 2005 - 06 & 2006 - 07 AMOUNTING TO RS. 2 30 029/ - AND RS. 80 000/ - RESPECTIVELY. SIMILARLY A SUM OF RS. 57 197/ - WAS DEPOSITED BY SMT. SHASHI SHARMA IN UTI BANK DURING A.Y 2006 - 07 AND A SUM OF RS. 7 76 472/ - WAS DEPOSITED IN UTI BANK DURING A.Y 2007 - 08. ACCORDING TO THE AO THESE BANK ACCOUNTS WERE NOT DISCLOSED BY SMT. SHASHI SHARMA. WHEN CONFRONTED IT WAS EXPLAINED THAT THE CASH SO DEPOSITED WAS SURRENDERED BY SHRI GAURAV SHARMA SON OF THE ASSESSEE IN HI S RETURN. THE AO IN THE ABSENCE OF ANY SOURCE OF INCOME OF SHRI GAURAV SHARMA ADDED THESE CASH DEPOSITS AS UNEXPLAINED DEPOSITS IN THE HANDS OF THE ASSESSEE SUBSTANTIVELY. BEFORE CIT(A) THE ASSESSEE SUBMITTED THAT SMT. SHASHI SHARMA IS ASSE SSE D TO INCOME TAX FROM A.Y 1983 - 84 AND IS REGULARLY MAINTAINING ACCOUNTS WITH VARIOUS BANKS AND SUBMITTED RETURN YEAR TO YEAR. THE CASH DEPOSITS MADE IN ASTHA MAHILA SAHAKARI BANK AND UTI BANK HAVE BEEN OFFERED BY SHRI GAURAV SHARMA FOR TAXATION IN HIS HANDS WHO CARRIES VARIOUS BUSINESS ACTIVITIES. IN THE COURSE OF THE SEARCH NO EVIDENCE OR MATERIAL WAS FOUND THAT THE DEPOSITS MADE BY SMT. SHASHI SHARMA WERE MADE 38 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) BY THE ASSESSEE OR RELATE TO THE FUNDS PROVIDED BY THE ASSESSEE TO HER. THE BANK ACCOUNTS BELONGED TO SMT. SHASHI SHARMA. ALL THE WITHDRAWAL MADE FROM THESE BANK ACCOUNTS HAVE BEEN UTILIZED BY HER. IT WAS SUBMITTED THAT THE DISCLOSURE MADE BY SHRI GAURAV SHARMA IN HIS RETURN FILED U/S 153A COVERS ALL THESE DEPOSITS AND THEREFORE THE ADDITION BE DELETED. CIT( A) DELETED THE ADDITION ON THE PLEA THAT SINCE THE DISCLOSURE MADE BY SHRI GAURAV SHARMA CONSISTS OF UNEXPLAINED DEPOSITS IN THE BANK ACCOUNTS OF SMT. SHASHI SHARMA AND SHRI GAURAV SHARMA GROSSLY FAILED TO CO - RELATE THE DISCLOSURE MADE WITH THE SOURCE OF T HE UNDISCLOSED INCOME THE DISCLOSURE MADE BY SHRI GAURAV SHARMA IN DIFFERENT YEAR HAVE SUBSTANTIVELY BEEN ASSESSED IN THE HANDS OF THE ASSESSEE AND THEREFORE THERE CANNOT BE ANY SEPARATE ADDITION AS IT WILL TANTAMOUNT TO DOUBLE TAXATION. THEREFORE CIT(A ) DELETED THE ADDITION. 31 . WE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME. THE LD. DR EVEN THOUGH VEHEMENTLY RELIED ON THE ORDER OF THE AO BUT DID NOT ADDUCE ANY EVIDENCE WHICH MAY PROVE THAT THE CASH DEPOSITS MADE BY SMT. SHASHI SHA RMA IN HER ACCOUNT ARE NOT COVERED BY THE DISCLOSURE MADE BY SHRI GAURAV SHARMA IN HIS RETURN FILED U/S 153A. ONCE THE DEPOSITS ARE FULLY COVERED BY THE DISCLOSURE MADE BY SHRI GAURAV SHARMA IN OUR OPINION NO ADDITION CAN BE MADE SEPARATELY IN RESPECT O F THE DEPOSITS IN THE HANDS OF THE ASSESSEE UNTIL AND UNLESS THERE ARE EVIDENCE BEING FOUND DURING SEARCDH OR BROUGHT ON RECORD THAT THE DEPOSITS MADE THE THE BANK ACCOUNT HAVE COME OUT OF THE INCOME OF THE ASSESSEE. WE THEREFORE DISMISS THE GROUND IN A LL THE YEARS I.E. GROUND NO. 4 IN A.Y 2005 - 06 GROUND NOS. 2 & 3 IN A.Y 2006 - 07 AND GROUND NO. 1 IN A.Y 2007 - 08. A.Y 2008 - 09 3 2 . GROUND NO. 1 RELATES TO ADDITION MADE ON ACCOUNT OF CASH FOUND AMOUNTING TO RS. 1.13 CRORES AT THE TIME OF SEARCH BY THE AO AND DELETED BY THE 39 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) CIT(A). WE NOTED THAT THE CIT(A) HAS NOT DELETED THIS ADDITION BUT HAS CONFIRMED THE ADDITION BY REJECTING THE G ROUND TAKEN BY THE ASSESSEE AS IS APPARENT FROM PG. 26 OF THE CIT(A)S ORDER. THUS THIS GROUND IN OUR OPINION IS INFRUCTUOUS AND THEREFORE STANDS DISMISSED AS INFRUCTUOUS. 3 3 . GROUND NO. 2 RELATES TO THE DELETION OF THE ADDITION OF RS. 1 23 000/ - MADE BY THE AO ON THE BASIS OF THE SEIZED LOOSE PAPER MARKED AS LPS - 1 /1 PG. 13. AFTER HEARING THE RIVAL SUBMISSIONS WE NOTED THAT THIS ADDITION HAS BEEN DELETED BY CIT(A) BY OBSERVING AS UNDER : I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE APPELLANT AS ALSO GONE THROUGH THE ASSESSMENT ORDER. IT IS NOTICED THAT IN THE COMPUTATION OF INCOME FOR ASSTT. YR. 2008 - 09 AT PAGE 33 OF THE ASSESSMENT ORDER THE AO HAS SHOWN ADDITION OF RS. 1 23 000/ - AS PER LPS - 1/1 PAGE 13. HOWEVER IT IS NOTICED THAT IN THE A SSESSMENT ORDER THERE IS NO SUCH ISSUE OF ADDITION AMOUNTING TO RS. 1 23 000/ - . THE AO IN HIS REMAND REPORT HAS NOT DISPUTED THE CONTENTION OF THE APPELLANT THAT NO SUCH ADDITION WAS ACTUALLY MADE IN THE ASSESSMENT ORDER. THEREFORE THE ADDITION OF RS. 1 23 000/ - ONLY SHOWN IN THE COMPUTATION OF INCOME IS NOT CORRECT AND ACCORDINGLY THE SAME IS DELETED. SINCE THE AO DID NOT DISPUTE THE CONTENTION OF THE ASSESSEE IN THE REMAND REPORT THEREFORE IN OUR OPINION NO INTERFERENCE IS CALLED FOR IN THE ORDE R OF CIT(A) DELETING THIS ADDITION. WE HAVE ALSO PERUSED THE ASSESSMENT ORDER AND WE DO NOT FIND ANY DISCUSSION IN THE ASSESSMENT ORDER ABOUT THIS ADDITION. IN OUR OPINION THE GROUND HAS BEEN TAKEN BY THE REVENUE JUST FOR THE SAKE OF TAKING THE GROUND. THIS GROUND THEREFORE STANDS DISMISSED. 3 4 . GROUND NO. 3 RELATES TO THE DELETION OF THE ADDITION OF RS. 1.24 CRORE MADE BY THE AO ON THE BASIS OF THE SEIZED LOOSE PAPER MARKED AS LPS 1/7. THE FACTS RELATING TO THIS GROUND ARE THAT THE AO MADE THIS ADDITION ON THE BASIS OF THE BACKSIDE OF PG. 6 OF L PS 1/7 WHICH CONTAINS JOTTING MADE IN THE HANDS OF THE ASSESSEE AS WELL AS IN THE HANDS OF RAJESH RAJORIA WHO WAS THE COMMISSIONER 40 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) OF HEALTH AT THE TIME OF THE SEARCH ACTION. AFTER HEARING THE RIVAL SUBMISSIONS AND GOING THROUGH THE ORDER OF THE TAX AUTHORITIES BELOW AS WELL AS THE ORDER OF CIT(A) WE NOTED THAT THE CONTENTS OF THIS PAPER HAS BEEN DISCUSSED IN DETAIL IN THE ORDER OF SHRI RAJESH RAJORIA AS MENTIONED BY CIT(A) AND CIT(A) AFTER FINDING NEXUS OF THE ENTRY WITH RAJESH RAJORIA CONFIRMED THE ADDITION ON THE BASIS OF THIS PAPER IN THE HANDS OF RAJESH RAJORIA VIDE HIS ORDER IN ITA NO. 216/2010 - 11 DT. 7.3.2013. 3 5 . THE LD. DR EVEN THOUGH VEHEMENTLY CONTENDED BUT DID NOT DISPUTE THAT THE NOTING MADE IN THE LOOSE PAPER IS ALREADY CONFIRMED IN THE HANDS OF RAJESH RAJORIA AND THIS JOTTING HAS NO RELEVANCE WITH THE ASSESSEE. EVEN NO EVIDENCE OR MATERIAL WAS BROUGHT TO OUR KNOWLEDGE WHICH MAY PROVE THAT THE LOOSE PAPER CONTAINS ENTRY RELATING TO THE ASSESSEE. UNDER THESE FACTS AND CIRCUMSTANCES WE DO NOT FIND ANY ILLEGALITY OR INFIRMITY IN THE ORDER OF CIT(A) DELETING THE SAID ADDITION. 3 6 . GROUND NO. 4 RELATES TO DELETION OF THE ADDITION OF RS. 2.91 CRORES MADE BY THE AO ON THE BASIS OF THE SEIZED LOOSE PAPER MARKED AS LPS 1/1 PG. 1. THE AO ON THE BASIS OF THE FRONT AND BACKSIDE OF PG. 1 OF LPS 1/1 SEIZED DURING THE COURSE OF THE SEARCH OBSERVED THAT PRIMA FACIE THE INFORMATION OF DIFFERENT COLUMNS OF THE SEIZED LOOSE PAPER APPEAR TO BE THE NAMES OF THE SUPPLIERS TO THE HEALTH DEPARTMENT OF GOVERNM ENT OF M.P. THE AO THEREFORE MADE INQUIRIES FROM THE SUPPLIERS TO HEALTH DEPT. AND TRIED TO CO - RELATE WITH THE NAMES APPEARING IN THE SEIZED DOCUMENTS. ON THE BASIS OF SUCH CO - RELATION THE AO PROPOSED TO MAKE ADDITION OF RS.1.15 CRORES ON THE BASIS OF T HE FRONT SIDE OF THE LOOSE PAPER NO. 1 AND RS. 4.35 CRORES ON THE BASIS OF THE BACKSIDE OF LOOSE PAPER AS ILLEGAL GRATIFICATION RECEIVED BY THE ASSESSEE. THE AO REJECTED THE CONTENTION OF THE ASSESSEE THAT THE PAPER MAY BE CONTAINING ESTIMATED WORKING OF SOME PROJECT DETAILS OR SOME ESTIMATE DATA OF HEALTH DEPT. AND NOT RELATED TO 41 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) HIM. THE AO HIGHLIGHTED CERTAIN FRONT TRANSACTIONS PARTICULARLY NOTING OF RS.1 26 49 972/ - AGAINST NAME OF GAMBHIR NOTING OF RS. 96 LACS AND RS. 1.20 CRORE AGAINST THE NAME OF ANOOP YADAV NOTING OF 22.90 AND 54 AGAINST THE NAME OF AGRAWAL + JOSHI AND OBSERVED THAT THE NAMES MENTIONED IN THIS LOOSE PAPERS ARE ACTUALLY SUPPLIERS TO THE HEALTH DEPT. THE ORDER VALUE NOTED REFERS TO THE ACTUAL ORDER VALUE. THEREFORE THE CONTENTS OF THE PAPER REFER TO REAL TRANSACTION. THE AO ACCORDINGLY HELD THAT RS. 5.55 CRORE REPRESENTED ILLEGAL GRATIFICATION RECEIVED FROM THE SUPPLIER AND ADDED THE SAME IN THE HANDS OF THE ASSESSEE. THE FRONT PORTION OF THE LOOSE PAPER PG. 1 OF LPS 1/1 IS APP EARING AT PG. 75 OF THE ORDER OF CIT(A) WHILE THE BACKSIDE OF PG. 1 OF LPS 1/1 APPEARS AT PG. 81 - 82 OF THE CIT(A)S ORDER. ON THE BASIS OF THIS PAPER HE NOTED THAT COLUMN NO. 1 CONTAINS NAMES WHILE COLUMN NO. 2 CONTAINS THE VALUE OF THE ORDERS EXECUTED BY THESE PARTIES AND ON THE BASIS OF INFORMATION RECEIVED FROM THE DEPT. OF HEALTH HE TRIED TO CO - RELATE THE VALUE OF THE ORDERS WITH THE SUPPLY MADE BY VARIOUS PARTIES TO THE DEPT. OF HEALTH. THE AO FOR THE SAKE OF CONVENIENCE INDUCTED COLUMN NUMBER FOR HI S REFERENCE. ON THE BASIS OF THE INFORMATION ON THIS PAPER THE AO WAS OF THE VIEW THAT THE ORDER VALUE WAS SOMETIMES WRITTEN IN RUPEES SOMETIMES IN LACS AND IN ONE CASE IN CRORES I.E. IN THE CASE OF GAMBHIR FOR SUPPLY OF ANESTHESIA MACHINE. FURTHER THE AO STATED THAT THE ENTRIES IN THE RELATED COLUMNS ARE VERIFIABLE FROM THE DIVERSION LETTER OF LAGHU UDYOG NIGAM DT. 27.2.2006. HE FURNISHED THE COPY OF THIS WITH HIS WRITTEN SUBMISSION. THE ASSESSEE ADMITS THAT THE ENTRIES IN COLUMN NO. 3 AS ANALYSED BY THE AO IS IN PERCENTAGE OF THE VALUE OF THE ORDER AND ENTRIES IN COLUMN NO. 6 RELATE TO THE CORRESPONDING VALUE OF THE SPECIFIED PERCENTAGE OF THE VALUE OF THE ORDER WRITTEN IN LACS BUT THE AO DID NOT AGREE WITH THE EXPLANATION OF THE ASSESSEE THAT THIS P ERCENTAGE REPRESENTS THE ADVANCE AND THE AMOUNT MENTIONED IN COLUMN REPRESENTS THE VALUE IN ADVANCE GIVEN TO THE SUPPLIER AND ENTRIES IN COLUMN NO. 4 & 5 REPRESENTS PART PAYMENT BEING MADE TO EACH OF THE SUPPLIER ON THE BASIS OF RUNNING BILLS SUBMITTED BY THEM. THE AO ALSO REJECTED 42 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) THE EXPLANATION OF THE ASSESSEE BY WHICH THE ASSESSEE RECONCILED THE FIGURES IN THE CASE OF SUPPLIER JOSHI GAMBHIR AND ANO OP YADAV BY SUBMITTING THAT SUM TOTAL OF COLUMN NOS. 4 5 & 6 INCLUDING M.P SALES TAX @ 9.2% OF THE ORDER VALUE EQUALS TO THE ORDER VALUE WRITTEN IN COLUMN NO. 2 AGAINST EACH SUPPLIER. BY HOLDING THAT THERE IS NO CORROBORATIVE EVIDENCE TO ESTABLISH EVEN I N ANY OF THE CASE TO DEMONSTRATE THAT ANY OF THE SUPPLIER SUBMITTED PART BILLS AND BILL AMOUNT WAS DISBURSED PIECEMEAL COMMENSURATE WITH THE JOTTING MADE IN THE ALLEGED PAPERS. THE AO TOOK THE VIEW THAT THE AMOUNT IN COLUMN NO. 6 IS IN LACS AND REPRESENTS THE AMOUNT RECEIVED FROM THE SUPPLIERS AT A SPECIFIED PERCENTAGE OF THE TOTAL ORDER VALUE. THE AO FURTHER OBSERVED THAT THE CONCLUSION SO ARRIVED CAN BE LINKED AND CO - RELATED WITH THE ENTRIES MADE ON THE BACKSIDE OF PG. 6 OF LPS 1/1. IN RESPECT OF NANDA JI HE SPECIFIED THAT NO AMOUNT IS MENTIONED UNDER COLUMN NO. 6 AS SPECIFIED PERCENTAGE MIGHT HAVE NOT BEEN FINALISED. REFERRING TO BACKSIDE OF PG. 1 OF LPS 1/1 IT WAS STATED THAT IN SERIAL NO. 24 ON BACKSIDE OF PG. 6 LPS 1/1 28 & 25 HAS BEEN WRITTEN AGA INST 6174000 FOR SUPPLY OF H KIT AND 110570 FOR SUPPLY OF SODIUM POTASSIUM ANALYZER BY SHRI NANDA AND 1728720 AND 2764250 HAS BEEN WRITTEN. ENTRIES MADE IN THIS PAPER TALLIES WITH THE ENTRIES OF THE ORDER VALUE MENTIONED IN COLUMN NO. 2 AGAINST NANDAJI AN D JOTTING OF 1728720 AND 2764250 AGAINST THE VALUE OF ORDERS WRITTEN ON THE BACKSIDE OF PG. 60 IS NOTHING BUT 28% AND 25% OF THE VALUE OF THE ORDERS. SIMILAR PERCENTAGE ON ORDER VALUES FROM OTHER SUPPLIERS JOTTED IN PG. 6 ARE FOUND LIKE BACKSIDE OF PG. 6 SUGGESTS RECEIPTS @ 20% 30% 20% 35% AND 35% ON THE ORDER VALUE OF RS.13 80 090/ - RS. 62 00 000/ - RS.18 39 000/ - RS.7 00 000/ - AND RS.72 63 000/ - RECEIVABLE FROM SURESH MODI OF GWALIOR FOR SUPPLY OF OXYGEN CYLINDER AND MANISH SINGH OF MP RAJYA HATHKA RGHA BUNKAR SHAKARI SANGH MARYADIT BHOPAL FOR SUPPLY OF BED SHEETS AND NANDAJI FOR SUPPLY OF DESTROYER AND SWAB . SIMILAR RATE OF CHARGES ON ORDER VALUE IS EVIDENT FROM JOTTING MADE ON THE FRONT SIDE OF PG. 6 I.E 27% AND 30% FROM SUPPLIES MADE BY MAHESHJI ALSO. CIT(A) AFTER GOING THROUGH THE CONTENTION OF THE 43 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) ASSESSEE AND ANALYSING THE JOTTING ON THE FRONT AND BACK OF PG. 1 OF LPS 1/1 CONFIRMED THE ADDITION AT RS. 2.94 CRORES AND DELETED THE ADDITION BY RS.2.91 CRORES OUT OF THE ADDITION MADE AT RS. 5.85 CRORES BY THE AO BY OBSERVING AS UNDER : THE CONCLUSION SO ARRIVED CAN BE LINKED AND CO - RELATED TO THE ENTRIES MADE IN THE BACK SIDE OF PAGE NO. 6 OF LPS - 1/1 . IT IS PERTINENT TO MENTION THAT IN FRONT SIDE OF PAGE NO. 1 EVEN THOUGH PERCENTAGE IN COLUMN NO. 3 HAS BEEN JOTTED AT 25 & 20 THERE IS NO JOTTING DOWN OF THE VALUE IN LAKHS IN COLUMN NO. 6 AGAINST THE WORK ORDERS SPECIFIED IN THE CASE OF NANDAJI. IT WAS NOT JOTTED SINCE THE PERCENTAGE WAS NOT FINALIZED. BUT SPECIFIC PERCENTAGE CHARGED FROM NA NDAJI FOR VALUE OF THE ORDERS MENTIONED IN COLUMN NO. 2 CAN BE TRACED OUT FROM THE JOTTINGS MADE IN PAGE NO. 6 OF LPS - 1/1. IN SR. NO. 24 OF BACK SIDE OF PAGE NO. 6 OF LPS 1/1 28 AND 25 HAS BEEN WRITTEN AGAINST 6174000 FOR SUPPLY OF H KIT AND 1105700 FOR SUPPLY OF SODIUM POTASSIUM ANALYZER BY SHRI NANDA AND THEREAFTER 1728720 AND 2764250 HAS BEEN WRITTEN. THE ENTRIES MADE IN THIS PAPER TALLY WITH THE ENTRIES OF ORDER VALUE MENTIONED IN COLUMN NO. 2 AGAINST NANDAJI AND JOTTINGS OF 1728720 AND 2764250 AGA INST THE VALUE OF ORDERS WRITTEN IN BACK SIDE OF THE PAGE NO. 6 IS NOTHING BUT 28% AND 25% OF THE VALUE OF ORDER. EXAMPLE OF CHARGES WITH SIMILAR PERCENTAGE ON ORDER VALUE FROM OTHER SUPPLIERS JOTTED IN PAGE NO. 6 ARE FOUND LIKE BACK SIDE OF THE PAGE NO. 6 SUGGESTS RECEIPTS @ 20% 30% 20% 35% AND 35% ON ORDER VALUE OF RS. 13 80 090/ - RS. 62 00 000/ - RS. 18 39 000/ - RS 7 00 000/ - RS.72 63 000/ - RECEIVABLE FROM SHRI SURESH MODI OF GWALIOR FOR SUPPLY OF OXYGEN CYLINDER AND SHRI MANISH SINGH OF MP RAJYA HATHKARGHA BUNKAR SHAKARI SANGH MARYADIT BHOPAL FOR SUPPLY OF BED SHEETS AND FROM SHRI NANDA FOR SUPPLY OF DESTROYER AND SWAB. SIMILAR RATE OF CHARGES ON ORDER VALUE IS EVIDENT FROM THE JOTTINGS MADE IN FRONT SIDE OF PAGE NO. 6 I.E. 27% AND 30% FROM SUP PLIES MADE BY MAHESH JI ALSO. THAT APART I FIND THAT THE JOTTINGS MADE IN COLUMN NO. 4 AND COLUMN NO. 6 OF THE PAGE HAVE CORRESPONDING LINKS WITH THE JOTTINGS MADE IN BACK SIDE OF THE PAGE NO.1. THE JOTTINGS IN THE COLUMN 4 SPEAK ABOUT PARTIAL PAYMENTS/FULL PAYMENTS RECEIVED FROM THE SUPPLIERS AGAINST THE SUM MENTIONED IN COLUMN NO.6 AND JOTTINGS OF PIECEMEAL RECEIPTS MADE IN BACK SIDE OF THE PAGE THOUGH NOT COMPLETE. FOR EXAMPLE IN CASE OF GAMBHIR IN COLUMN NO. 1 OF FRONT SIDE OF THE PAGE `19.5+5+5 HAS BEEN WRITTEN AND THE CORRE SPONDING ENTRY APPEARING IN THE NAME OF GAMBHIR IN BACK SIDE OF THE PAGE IS `5+10+2.5+2+1 WHICH SUGGEST THAT SHRI GAMBHIR PAID RS. 19.5 LAKHS IN INSTALLMENT OF RS. 5 LAKHS RS. 10 LAKHS IN FOUR INSTALLMENTS ENTERED 19.5 IN COLUMN NO.4 AGAINST GAMBHIR. S IMILARLY THE ENTRY OF 9.5 IN COLUMN NO. 4 AGAINST THE SUPPLIER ANOOP YADAV TALLIES WITH ENTRY OF `2.5+2+3.5+1.5 APPEARING AGAINST HIS NAME IN BACK SIDE OF THE PAGE. IN CASE OF THE SUPPLIER `AGRAWAL+JOSHI 44 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) ENTRY OF `1.5+5.0 APPEARING IN COLUMN NO. 4 TAL LIES WITH ENTRY OF `1+50+1+2+2 APPEARING AGAINST HIS NAME IN BACK SIDE OF THE PAGE. HERE `50 IS IN THOUSAND AND THE APPELLANT ENTERED `1.5 AFTER RECEIPT OF `1+.50 AND `5 AFTER RECEIPT OF `1+2+2. THERE ARE OTHER INSTANCES OF CONNECTIVITY AND CONTIN UITY OF JOTTINGS MADE IN FRONT AND BACK SIDE OF THE PAGE LIKE IN THE CASE OF JAVED ALLIANZE SCHILLER ETC.. IN VIEW OF THE ABOVE I FIND THAT THE ENTRIES JOTTED IN FRONT SIDE OF PAGE NO. 1 OF LPS - 1/1 ARE SPECIFIC AND CORROBORATIVE AND INFERENCE OF RECEIPT OF ILLEGAL COMMISSION/GRATIFICATION BY THE APPELLANT IN THE FINANCIAL YEAR 2006 - 07 RELEVANT TO THE ASSTT. YR. 2007 - 08 FROM THE ALLEGED SUPPLIERS TO THE EXTENT OF RS. 115.47 LAKHS CAN BE DRAWN MADE. THE JOTTINGS MADE IN BACK SIDE OF PAGE NO. 1 OF LPS - 1/1 APPEAR AS UNDE R: UP SINGH 1.7 TIWARIJI 2.5 PAYMENT 5.65 GAMBHIR 5+10+2.5+2+1 AMIT 1+88 JAAT KHEDI 6.80 A.YADAV 2.5+2+3.5+1.5 BHARGAVA 1 JAVED KHAN ALLIANZE 1+1+1 FURN. JBP MAHESWARI 4+2+1 AGRAWAL SHIV .50+20 SHARMAJI 2+1.40 CROSSED OUT * LOTUS 70+5 0.75 PLASTI SURGE 7 BHAGWATI 1+1.25+3.15 AGRAWAL + JOSHI 1+.5+1+2+2 CROSSED * CHAKACHAK 45 YOGESH GUPTA 10+15+30+15 LOTUS+CHAKACHAK 1.2 SHARIN .50+.50 SHAILENDRA TIWARI 2.5 RAJESH DAGA 20 MAHESHWARI JI BPL 2 ASHOK (JBP) 5+5 BALANCE 10000 SHAILENDRA 4 SHAH 10+3.5+1.5 PF 37 KUK. 18.5 50.00 RAOP 3.5 34.32 GAUZE 41 BEDS 30 TOTAL 343.6 40.57 51.85 THE SUPPLIERS AND THE SUPPLIES MADE BY THEM TO THE HEATH DEPARTMENT WHOSE NAMES ARE APPEARING IN THE LOOSE PAPER. U.P. SINGH U.P. SINGH IS THE PROPRIETOR OF SHRI VAISHNAV INDUSTRY BHOPAL. HE SUPPLIED FURNITURE UNDER FRU SCHEME FOR RS. 56.52 LAKH IN THE FINANCIAL YEAR 2006 - 07 BESIDES VARIOUS OTHER WORK ORDERS EXECUTED BY HIM AS PER THE LIST GIVEN BY THE HEALTH DEPARTMENT. TIWARI JI SHRI SHYAMACHARAN TIWARI IS ASSOCIATED WITH CENTRAL INDIA SALES AGENCY INDORE. HE IS A REGULAR SUPPLIER TO THE HEALTH DEPARTMENT WHICH IS EVIDENT FROM 45 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) THE LIST OF PURCHASES MADE BY HIM SINCE APRIL 2001 MADE AVAILABLE TO THE DEPARTMENT BY DIRECTORATE OF HEALTH. AS PER THE LIST HE HAS BEEN ACCORDED WORK ORDERS OF RS. 81.14 LAKHS IN FINANCIAL YEAR 2006 - 07 AND WORK ORDERS OF RS. 10.5 IN FINANCIAL YEAR 2007 - 08 I.E. UP TO 31 ST AUGUS T 2007. GAMBHIR HE IS ASSOCIATED WITH M/S. MEDIFIX AGENCY FIRST FLOOR HOTEL SWAGAT COMPLEX HAMIDIA ROAD BHOPAL. HE IS AN AGENT OF ALLIED MEDICAL SYSTEM KOHLI CHAMBERS B - 191 NARAINA INDUSTRIAL AREA DELHI. HE SUPPLIED SHADOWLESS CEILING LIGHTS AND OPERATION TABLES OF RS. 1.26 CRORES THROUGH HIS CONCERN MEDIFIX INDUSTRIES BHOPAL. VALUE OF ORDERS MENTIONED AGAINST THE NAME OF MR. GAMBHIR IN THE LOOSE PAPER RELATED TO SUPPLY OF DEFIBRILLATOR WITH MONITOR RECORDER WORTH RS. 29 87 000/ - AND SUPPLY OF ANESTHESIA MACHINE WORTH RS. 2 43 00 000/ - . AS PER THE APPROVAL LETTER OF LUN THE APPROVED SUPPLIERS WERE M/S. SCHILLER HEALTH CARE BHOPAL AND M/S. ALLIED MEDICAL SYSTEM DELHI. HE HAS BEEN GIVEN SEVERAL OTHER WORK ORDERS WHICH IS EVIDENT FROM THE L IST SUPPLIED BY THE DIRECTORATE OF HEALTH AS DISCUSSED ABOVE. A. YADAV SHRI ANOOP YADAV IS PARTNER IN M/S. APOORVA BIO CARE BHOPAL. HE SUPPLIED X - RAY MACHINES WORTH RS. 95 76 000/ - AND CATTERY MACHINE WORTH RS. 1 10 20 500/ - TO THE DEPARTMENT OF HEALT H IN THE FINANCIAL YEAR 2006 - 07 RELEVANT TO THE ASSTT. YR. 2007 - 08. HE HAS BEEN GIVEN SEVERAL OTHER WORK ORDERS WHICH IS EVIDENT FROM THE LIST SUPPLIED BY THE DIRECTORATE OF HEALTH AS DISCUSSED ABOVE. BHARGAVA MR. BHARGAVA IS ASSOCIATED WITH CAPITAL ME DICAL MARKETING BHOPAL. HE IS A REGULAR SUPPLIER OF MEDICINES AND HOSPITAL EQUIPMENTS TO HEALTH DEPARTMENT. FOR EXAMPLE WORK ORDER OF RS. 14 30 000/ - WAS AWARDED TO HIM FOR SUPPLY OF AUTOCLAVE VERTICAL IN THE FINANCIAL YEAR 2006 - 07 AS PER DIVERSION LE TTER OF LUN BESIDES VARIOUS OTHER WORK ORDERS EXECUTED BY HIM AS PER THE LIST GIVEN BY THE HEALTH DEPARTMENT. JAVED KHAN ALLIANZE SHRI JAVED KHAN IS ASSOCIATED WITH M/S. ALLIANZE BO MEDICAL SYSTEMS BHOPAL. HE HAS BEEN GIVEN SEVERAL OTHER WORK ORDERS WHICH IS EVIDENT FROM THE LIST SUPPLIED BY THE DIRECTORATE OF HEALTH AS DISCUSSED ABOVE. FOR EXAMPLE HE WAS GIVEN ORDER OF RS. 37.77 LAKHS FOR SUPPLY OF X - RAY MACHINE AND VARIOUS KITS IN FINANCIAL YEAR 2006 - 07 RELEVANT TO THE ASSTT. YEAR 2007 - 08 AS PER D IVERSION LETTER OF LUN. JBP MAHESHWARI SHRI MANMOHAN MAHESHWARI IS ASSOCIATED WITH M/S. ACCURATE MARKETING JABALPUR. HE IS A REGULAR SUPPLIER OF MEDICINES AND HOSPITAL EQUIPMENTS TO HEALTH DEPARTMENT. FOR EXAMPLE WORK ORDER OF RS. 45 60 880/ - WAS AW ARDED TO HIM FOR SUPPLY OF E.C.G. MACHINE AND DEFIBRILLATOR IN THE FINANCIAL YEAR 2006 - 07 AS PER DIVERSION LETTER OF LUN. SHARMAJI SHRI SHARMA IS PROPRIETOR OF M/S. KWALITY DRUG HOUSE RNT MARG INDORE. HE IS A REGULAR SUPPLIER OF MEDICINES TO THE HEA LTH DEPARTMENT. 46 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) PLASTI SURGE SHRI RAJAN JAKTHANI IS THE PROPRIETOR OF M/S. DOLPHIN PARAMA. HE ALSO LOOKS AFTER THE WORKS OF PLASTIC SURGE INDIA (P) LTD. AMRAVATI WHICH IS AN ASSOCIATE OF KAPL. SHRI RAJESH DAGA LOOKS AFTER THE WORKS OF PLASTI SURGE IND USTRIES BETUL.BOTH THE UNITS HAD BEEN AWARDED WORK ORDERS OF SUPPLY OF MEDICINES AND EQUIPMENTS TO THE HEALTH DEPARTMENT OF MADHYA PRADESH SINCE 2001 AS PER THE AVAILABLE RECORDS WITH THE DEPARTMENT. AGRAWAL + JOSHI SHRI ALOK AGRAWAL HAVE TWO CONCERNS NAMELY AGRAWAL APPLIANCES FLAT NO. 9 BETWA APARTMENT T.T. N AGAR BHOPAL AND AGRAWAL AGENCIES 2 - 3 SINDHI MARKET BHOPAL. SHRI VINOD JOSHI WORKS FOR SHRI AGRAWAL AND APPEARS TO BE RELATED TO M/S. FIBRE FOAM PVT. LTD. MUMBAI. ORDER UNDER FRU SCHEME F OR SUPPLY OF RUBBERIZED WIPER MATTRESSES OF RS. 22.89 LAKHS ACCORDED TO THEM AND THE VALUE OF ORDER IS APPEARING IN JOTTINGS OF THE ABOVE PAGE. SIMILARLY HE SUPPLIED CHEMISTRY ANALYZER WITH ORDER VALUE OF RS. 53 97 151/ - WHICH IS APPEARING AS 54(A) IN FR ONT SIDE OF PAGE NO.1. THEY ARE THE REGULAR SUPPLIERS OF MEDICINES AND EQUIPMENTS TO THE HEALTH DEPARTMENT. YOGESH GUPTA SHRI YOGESH GUPTA IS A PROPRIETOR OF M/S. MOHIT ELECTRONICS HAMIDIA ROAD BHOPAL AND MOHIT HEALTH CARE IN FRONT OF ARYA BHAWAN M .P. NAGAR BHOPAL. HE IS A REGULAR SUPPLIER OF MEDICINES TO THE HEALTH DEPARTMENT. SHARIN SHRI ASHOK SHARIN IS ASSOCIATED WITH M/S. DYNAMIC ENTERPRISES DELHI SUPPLIER OF SPHYGMOMANOMETER AND SUCTION MACHINE. WORK ORDER OF RS. 16 37 300/ - WAS APPROVED BY LUN SUPPLY WAS MADE IN FINANCIAL YEAR 2006 - 07. HE HAS ALSO BEEN GIVEN SEVERAL OTHER WORK ORDERS AS PER THE LIST AVAILABLE WITH THE DEPARTMENT. SHAILENDRA TIWARI SHRI SHAILENDRA TIWARI IS ASSOCIATED WITH M/S. KAMAL MARKETING INDORE. WORK ORDER OF RS. 34 04 646/ - WAS APPROVED BY LUN IN DIVERSION LETTER FOR SUPPLY OF VARIOUS KITS BESIDES SEVERAL OTHER WORK ORDERS EXECUTED BY HIM AS PER THE CAPTIONED LIST. MAHESHWARI JI BPL SHRI J.P. MAHESHWARI IS ASSOCIATED WITH M/S. SHRINATHJI CHEMICALS E - 4/50 ARERA COLONY IN FRONT OF BHOJUR CUB BHOPAL. HE IS A REGULAR SUPPLIER TO HEALTH DEPARTMENT OF GOVERNMENT OF MADHYA PRADESH. ASHOK (JBP) SHRI ASHOK KUNDANI IS ASSOCIATED WITH M/S. MEDINOVA PHARMACEUTICALS JABALPUR. SMT. MANJU KUNDANI IS THE PROPRIETOR OF DALIT ENTERPRISES JABALPUR AND A.K. ENTERPRISES JABALPUR. THEY ARE THE REGULAR SUPPLIERS OF MEDICAL EQUIPMENTS TO THE HEALTH DEPARTMENT. FOR EXAMPLE SHRI ASHOK KUNDANI SUPPLIED ECG MACHINE AND DEFIBRILLATORS IN THE FINANCIAL YEAR 2006 - 07 AS PER THE LETTER OF LUN. SHAH SHRI SAMEER SHAH OF M/S. MEDITRON INSTRUMENT MUMBAI SUPPLIER OF PHOTOTHERAPY - CUM - RADIATE WARMER AND MYCOBULLIRUBINOMETER. WORK ORDER OF RS. 85 16 187/ - WAS APPROVED BY LUN IN DIVERSION LETTER BESIDES SEVERAL OTHERS AWARDED TO HIM AS PER THE LIST FURNISHED BY THE HEALTH DEPARTMENT. 47 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) KUK SHRI DEENDAYAL KUKREJA IS FROM GWALIOR AND HE IS A REGULAR SUPPLIER TO THE HEALTH DEPARTMENT. AMIT SHRI AMIT SAXENA IS ASSOCIATED WITH M/S. MEDICARE BHOPAL. HE IS A REGULAR SUPP LIER OF MEDICINES AND HOSPITAL EQUIPMENTS TO THE DEPARTMENT OF HEALTH WHICH IS EVIDENT FROM THE LIST OF SUPPLIERS FROM APRIL 2001 TO AUGUST 2007 FURNISHED BY THE DEPARTMENT OF HEALTH. HE HAS MADE SUPPLY OF RS. 11.48 LAKHS IN THE FINANCIAL YEAR 2006 - 07. F U RN WRITTEN IN THIS PAGE REFERS TO SUPPLIERS OF HOSPITAL FURNITURE AND OFFICE FURNITURE AND THE JOTTINGS LEADS TO INFERENCE OF SPECIFIC AMOUNT CHARGED ON WORK ORDERS ALLOTTED TO THEM. THEY SUPPLIED ROAP GAUZE BEDS ET C . THE INFORMATION OF FURNITURE SUP PLIERS ARE GIVEN HEREUNDER : LOTUS M/S. LOTUS INDUSTRIES INDORE IS SUPPLIER OF STEEL FURNITURE. WORK ORDERS OF RS. 11.08 LAKHS WAS APPROVED BY LUN BESIDES SEVERAL OTHER OTHERS AWARDED TO HIM AS PER THE LIST FURNISHED BY THE HEALTH DEPARTMENT. BHAGWATI SHRI BHAGWATI INTERIORS INDORE IS SUPPLIER OF STEEL HOSPITAL FURNITURE. WORK ORDERS OF RS. 34.11 LAKHS WAS APPROVED BY LUN BESIDES SEVERAL OTHER OTHERS AWARDED TO HIM AS PER THE LIST FURNISHED TO THE HEALTH DEPARTMENT. CHAKACHAK CHAKACHAK INDUSTRY IS INDORE BASED SUPPLIER OF FURNITURE TO THE HEALTH DEPARTMENT. AS STATED ABOVE JOTTINGS IN THE BACK SIDE OF THE PAGE IS CONTINUATION OF FRONT SIDE OF THE PAGE I.E. JOTTING OF PIECEMEAL RECEIPTS FROM THE SUPPLIERS MENTIONED IN THE FRONT PAGE BE SIDES JOTTINGS OF PIECEMEAL RECEIPT OF CHARGES FROM OTHER SUPPLIERS WHO ARE THE REGULAR SUPPLIERS OF HOSPITAL EQUIPMENTS FURNITURE DRUG AND MEDICINES TO THE HEALTH DEPARTMENT AND THERE IS NO MORE AMBIGUITY IN HOLDING THAT THE FIGURES ARE WRITTEN IN LAKHS IN ALMOST ALL CASES BARING A FEW. THE CHARGE OF 10% ON WORK VALUE OF THE ORDER ON FURNITURE CLAIMED FROM SHRI BHAGWATI INTERIOR AT 1+1.25+3.15 I.E. 3.4 ON VALUE OF THE ORDER OF RS. 34.04 LAKHS WRITTEN IN BACK SIDE OF THE PAGE MEANS THAT THE APPELLANT H AS CHARGED 10% OF ORDER VALUE OF RS. 34.10 LAKHS AND THE RATE IS CONSISTENT WITH THE RATE CHARGED IN PAGE NO. 12 AND 13 OF LPS - 1/1. THE CONNECTIVITY AND CONTINUITY OF THE JOTTINGS MADE IN BACK SIDE OF THE PAGE NO.1 AND PAGE NO. 12 OF LPS - 1/1 HAS BEEN DISC USSED IN THE GROUND NO. 10. HOWEVER THE FOLLOWING MISTAKES FOUND IN THE ASSESSMENT ORDER ARE REQUIRED TO BE RECTIFIED: THE AO MADE ADDITION OF RS. 5 85 00 000/ - ON ACCOUNT OF JOTTINGS MADE IN PAGE NO.1 OF LPS - 1/1 IN COMPUTATION OF ASSESSED INCOME. BUT SHE PROPOSED TO MAKE ADDITION OF RS. 5 55 00 000/ - I.E. RS. 1 15 00 000/ - OUT OF JOTTINGS FROM FRONT SIDE OF THE PAGE N O .1 48 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) AND RS. 4 35 00 000/ - OUT OF JOTTINGS FROM BACK SIDE OF THE PAGE NO. 1. THUS THERE IS A CLERICAL ERROR OF THE EXCESS ADDITION OF RS . 30 00 000/ WHICH OUGHT TO BE RECTIFIED. THE AO HAS TAKEN THE VALUE OF RECEIPTS AS PER JOTTINGS IN BACK SIDE OF THE PAGE AT RS 4 35 00 000/ - I.E. RS. 3 84 00 000/ - PLUS RS. 51 85 000/ - RECEIVED FROM SUPPLIER OF FURNITURE. ON CAREFUL PERUSAL OF FIGURES JOTTED IN BACK SIDE OF THE PAGE NO.1 I FIND THAT `1+88 WRITTEN AGAINST AMIT HAS BEEN TAKEN AS RS. 89 LAKHS WHICH IS IN FACT `1+0.88 I.E. RS. 1.88 LAKHS WHICH IS VERIFIABLE FROM THE VALUE OF THE WORK ORDERS EXECUTED BY SHRI AMIT SAXENA. THERE IS EXCES S ADDITION BY RS. 87.12 LAKHS. THAT APART `1+50+1+2+2 WRITTEN AGAINST THE NAME OF `AGRAWAL+JOSHI HAS BEEN TAKEN BY THE AO AT RS. 56 LAKHS WHICH IS IN FACT `1+.5+1+2+2 I.E. RS. 6.5 LAKHS. THUS THE AO HAS TAKEN THE FIGURE EXCESS BY RS. 49.56 LAKHS. THEREFORE THE FIGURE AT RS. 4.35 CRORE IS REQUIRED TO BE REDUCED BY RS. 1.37 CRORE AND THUS AFTER CORRECTING TOTALING MISTAKE IT IS RECTIFIED AT RS. 2.98 CRORE. AS DISCUSSED ABOVE THE ADDITION MADE ON ACCOUNT OF RECEIPTS OF RS. 20.5 LAKHS RS 9.5 LAK HS AND RS. 6.5 LAKHS FROM THE SUPPLIERS SHRI GAMBHIR SHRI A. YADAV AND SHRI AGRAWAL + SHRI JOSHI APPEARING IN BACK SIDE OF THE PAGE NO. 1 OF LPS - 1/1 HAS ALREADY BEEN ADDED ON THE BASIS OF THE JOTTINGS FOUND IN FRONT SIDE OF THE PAGE NO. 1 OF LPS - 1/1 AND THUS TOTAL OF RS. 36.5 LAKHS CANNOT ONCE AGAIN BE ADDED AS INCOME ON THE BASIS OF JOTTINGS MADE IN THE BACK SIDE OF THE PAGE - 4. THE ADDITION OF RS. 40.57 LAKHS OUT OF JOTTINGS OF ` . 50 AND `34.32 AGAINST THE NAME `KUKREJA AND PAYMENT OF RS. 5.65 LAKHS APPEARING AGAINST THE NAME OF TIWARI JI I FIND THE CONTINUITY AND CORRESPONDING ENTRIES IN PAGE NO. 6 OF LPS - 1/1 AND AFTER CONSIDERING THE OVERALL FACTS AND CIRCUMSTANCES OF THE CASE I FIND ADDITION OF RS. 3.15 LAKHS (RS. 5.65 LAKHS RS. 2.5 LAKHS APPEA RING AGAINST THE NAME OF TIWARI JI) OUT OF RS. 40.57 LAKHS IS SUSTAINABLE THEREBY FURTHER REDUCTION OF ADDITION ON ACCOUNT OF THIS PAGE BY RS. 37.42 LAKHS. THE AO MADE AN ADDITION OF RS. 51.85 LAKHS ON ACCOUNT OF PAYMENT BY SUPPLIER OF FURNITURES. HOW EVER ENTRY OF RS. 45 LAKHS AGAINST THE NAME OF THE SUPPLIER M/S. CHAKACHAK INDUSTRIES HAS BEEN CROSSED IN THE LOOSE PAPER AND H ENCE NOT CONSIDERED BY THE AO. BUT THIS HAS BEEN INCLUDED INADVERTENTLY IN ADDITION OF RS. 51.85 LAKHS AND AFTER CONSIDERING THE SAME THE ADDITION OUGHT TO BE REDUCED FURTHER BY RS. 45 LAKHS. THUS AFTER CONSIDERING THE ABOVE ADDITION MADE OUT OF JOTTINGS IN BACK SIDE OF PAGE NO. 1 OF LPS - 1/1 IS TO BE FURTHER REDUCED BY RS. 36.5 LAKHS AND RS. 37.42 LAKHS AND RS. 45 LAKHS. I T STANDS AT RS. 179 LAKHS. SINCE THE ADDITION MADE AT RS. 1.15 CRORE ON THE BASIS OF ENTRIES MADE IN FRONT SIDE OF THE PAGE NO.1 OF LPS - 1/1 HAS BEEN CONFIRMED THE TOTAL ADDITION MADE ON THE BASIS OF JOTTINGS MADE IN PAGE NO. 1 OF LPS - 1/1 IS CONFIRMED AT RS. 2.94 CRORE (RS. 1.79 CRORE+ RS. 1.15 CRORE). THE APPELLANT GETS A RELIEF OF RS. 2.91 CRORES (RS. 5.85 CRORE RS. 2.94 CRORE) ON THIS COUNT. 49 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) 3 7 . AGAINST THE DELETION OF THE ADDITION REVENUE HAS COME IN APPEAL WHILE THE ASSESSEE HAS COME IN APPEAL AGAINST THE SUSTENANCE OF THE ADDITION. SO FAR AS SUSTENANCE OF THE ADDITION IS CONCERNED WE HAVE DISPOSED OFF THAT ISSUE ALONGWITH THE APPEAL OF THE A SSESSEE. SO FAR AS DELETION OF THE ADDITION OF RS.2.91 CRORES IS CONCERNED WE NOTED THAT THESE ADDITIONS HAVE BEEN DELETED BY CIT(A) ON THE BASIS OF THE MISTAKE FOUND WHILE MAKING THE ADDITION OF RS. 5.85 CRORES ON ACCOUNT OF JOTTING. CIT(A) HAS DEALT W ITH EACH AND EVERY MISTAKE COMMITTED BY AO WHILE DRAWING INFERENCE ON THE BASIS OF FRONT PAGE AS WELL AS BACKSIDE OF PG. 1 OF LPS 1/1. THE LD. DR EVEN THOUGH VEHEMENTLY RELIED ON THE ORDER OF THE AO BUT WHEN HIS ATTENTION WAS DRAWN TOWARDS THE LOOSE PAPER S AS WELL AS FINDING OF CIT(A) HE WAS FAIR ENOUGH TO CONCEDE THE MISTAKES POINTED OUT BY CIT(A) IN THE INFERENCE OF THE AO AS REPRODUCED IN THE FINDING OF CIT(A) AT PG. 85 - 87. ALL THESE MISTAKES ARE INADVERTENT MISTAKES AND ARE APPARENT WHILE COMPUTING T HE FIGURE OF RS. 5.85 CRORES FOR THE PURPOSE OF THE ADDITION. WE HAVE ALSO GONE THROUGH THE LOOSE PAPERS COPY OF WHICH IS AVAILABLE AT PG. 104 - 105 OF THE PAPER BOOK. WE ALSO NOTED COLUMN NUMBERS HAVE BEEN INSERTED BY THE AO ON THESE PAPERS. THESE PAGES DO NOT CONTAIN ANY DATE AND THE FIGURES HAVE BEEN ASSUMED TO BE IN LACS BY THE AO. SINCE HERE WE ARE ONLY CONCERNED WITH THE DELETION OF THE ADDITION BY CIT(A) THEREFORE WE ARE NOT GOING THROUGH THE MERIT OF THE ADDITION BUT WE FIND THAT WHILE DRAWING THE INFERENCE BY AO CIT(A) HAS RIGHTLY HELD THAT THERE IS MISTAKE AND CIT(A) SIMPLY RECTIFIED THE MISTAKE IN THE INFERENCE TAKEN BY THE AO WHILE COMPUTING THE ADDITION ON THE BASIS OF PG.1 OF LPS 1/1. WE THEREFORE DO NOT FIND ANY ILLEGALITY OR INFIRMIT Y IN THE ORDER OF CIT(A). THUS THIS GROUND STANDS DISMISSED. 38 . GROUND NOS. 5 & 6 RELATE TO THE DELETION OF ADDITION OF RS.3 33 83 000/ - AND RS.97 83 000/ - MADE BY THE AO ON THE BASIS OF THE LOOSE PAPERS MARKED AS 50 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) LPS 1/1 PG. 6. THE AO ON THE BASIS OF JOTTING ON PG. 6 LPS 1/1 TOOK THE VIEW THAT THE ASSESSEE HAS RECEIVED MONEY FROM MAHESHJI NANDA SHAILENDRAJI ETC. AT RS.3 33 83 000/ - AS COMMISSION TILL 11.10.2006 AS AO WAS NOT CONVINCED WITH THE EXPLANATION OF T HE ASSESSEE. SIMILARLY ON THE BASIS OF THE BACKSIDE OF PG. 6 OF LPS 1/1 AS REPRODUCED BY CIT(A) AT PG. 96 THE AO TOOK THE VIEW THAT THE ASSESSEE HAS RECEIVED COMMISSION AMOUNTING TO RS.97 83 000/ - FROM THE SUPPLIER NAMED SURESH MEDICAL GWALIOR FOR SUPPL Y OF OXYGEN CYLINDERS SHRI SINGH OF BUNKAR HATHKARGHA SANGH FOR SUPPLY OF BED SHEET AND SHRI NANDA FOR SUPPLY OF DESTROYERS. WHEN THE MATTER WENT BEFORE CIT(A) CIT(A) DELETED THE ADDITION OF RS.333.83 LACS AND RS.97.83 LACS BY OBSERVING AS UNDER : I CONSIDERED THE SUBMISSION MADE BY THE LD. AR THE ASSESSMENT ORDER OF THE AO REMAND REPORT OF THE AO AND REJOINDER TO THE REMAND REPORT AND PERUSED THE MATERIAL AVAILABLE ON RECORD CAREFULLY. THE LOOSE PAPER IS DATED 11 - 10 - 2006 SHRI MAHESH JI AS MENTIONE D IN THE LOOSE PAPERS IS MAHESH PATIDAR OF PATIDAR AGENCIES 42 BUSINESS CENTRE CHAMBER NO. 21 M.P. NAGAR BHOPAL HE IS HAVING AGENCY OF SCHILLER HEALTH CARE INDIA PVT. LIMITED. SIMILARLY SHRI NANDA JI WRITTEN AS `N IN THE PAGE HAS EXECUTED HUGE WOR K ORDERS THROUGH HIS DIFFERENT CONCERNS. `SHIV JOTTED IN THE PAGE IS PROPRIETOR OF SHIV SHAKTI INDUSTRIES 76/3/1 AJIT VIHAR DELHI HAD EXECUTED HUGE WORK ORDERS OF DEPARTMENT OF HEALTH. THERE WAS REFERENCE OF DISBURSEMENT OF FUND OF RS. 171.96 LAKHS T O ZEST PHARMA INDORE AND THE ORDER VALUE IS APPEARING IN THE PAPER AGAINST THE NAME SHAILENDRA. SIMILARLY THE ENTRY OF (2.1 CR) AGAINST THE NAME `ANIL CAN HAVE NEXUS OF WORK ORDER OF RS. 2.10 GIVEN TO SUDHARSHAN PHARMATICAL INDORE. SIMILARLY THE JOT TINGS MADE IN THE BACK SIDE OF THE PAGE NO. 6 ARE SPECIFIC. SURESH MEDI GWALIOR - `SURESH MEDI GWALIOR (OXY CYLINDER) JOTTED IN SR. NO. 22 OF THE PAGE IS M/S. SURESH MEDICAL GWALIOR AND IT HAS SUPPLIED OXYGEN CYLINDERS WORTH RS. 13 80 090/ - AND IT IS EVIDENT FROM DIVERSION LETTER OF LUN. THE FIGURE WRITTEN IN THE LOOSE PAPER IS THE ORDER VALUE AND `20 WRITTEN AGAINST IT IS THE PERCENTAGE OF PAYMENT MADE BY THE SUPPLIER. THE NEXT ENTRY OF `276000 IS 20% OF THE ORDER VALUE WHICH COMES TO RS. 2.76 LAK HS WRITTEN AS `2.76 IN THE PAGE. SHRI SINGH - HATHKARGHA - `SHRI SINGH - HATHKARGHA (BED SHEET) JOTTED IN SR.NO. 23 OF THE PAGE IS SHRI MANISH SINGH OF M.P. RAJYA HATH KARGHA BUNKAR SAHAKARI SANGH MARYADIT. SUPPLY OF BED SHEET (57 X 87) HALF SHEET AND PIL LOW COVERS WORTH RS. 62 00 000/ - BY M.P. RAJYA HATH KARGHA BUNKAR SAHAKAT SANGH MARYADIT. THE FIGURE WRITTEN IN THE LOOSE PAPER IS THE ORDER VALUE AND `30 WRITTEN AGAINST IT IS THE 51 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) PERCENTAGE OF PAYMENT MADE BY THE SUPPLIER. THE NEXT ENTRY OF `1860000 IS 20% OF THE ORDER VALUE WHICH COMES TO RS. 18.61 LAKHS WRITTEN AS `18.61 IN THE PAGE. SHRI NANDA REGARDING ENTRIES OF SUPPLY OF DESTROYER SWAB KIT H AND SODIUM POTASSIUM ANALYZER AND PAYMENTS OF RS. 76.46 LAKHS RECEIVABLE FROM SHRI ASHOK NANDA AS A PPEARING IN SERIAL NO. 24 OF THE JOTTINGS THE CONTINUITY AND CONNECTIVITY OF THE JOTTINGS MADE IN FRONT SIDE OF PAGE 6 OF LPS - 1/1. THE FIGURES APPEARING AGAINST THE NAME OF SHRI NANDA ARE VALUE OF ORDERS FOR SUPPLIES OF ITEM SPECIFY THEREIN AND FIGURES WRITTEN JUST AFTER FIGURES OF ORDER VALUE ARE THE PERCENTAGE OF PAYMENTS CHARGED FROM THE SUPPLIER SHRI NANDA WRITTEN IN RUPEE. IT IS PERTINENT TO MENTION THAT THE SUPPLY OF SWAB WAS MADE BY M.P. RAJYA HATH KARGHA BUNKAR SAHAKARI SANGH MARYADIT THOUGH TH E NAME OF SHRI NANA IS APPEARING IN THE JOTTINGS MADE IN ALLEGED LOOSE PAPER SINCE HE IS AN AGENT OF M.P. RAJYA HATH KARGHA BUNKAR SAHAKARI SANGH MARYADIT. THE JOTTINGS MADE IN THE BACK SIDE OF THE LOOSE PAPER ARE VERY SPECIFIC. HOWEVER JOTTINGS OF `120 .9 OLD AND JOTTINGS OF ` 90 AGAINST ` KITS MADE IN BACK SIDE OF PAGE 5 OF LPS - 1/1 HAVE CONTINUITY AND CONNECTIVITY WITH JOTTINGS OF `1 `3.4 AND `5+5.5+16+ 12+18+60 APPEARING AGAINST `G.LUN `SHIV AND `SHAILENDRA WRITTEN IN FRONT SIDE OF PAGE - 6 OF LPS - 1/1. THE AO HAS WRITTEN `3.4 APPEARING AGAINST `SHIV AS 34 WHICH OUGHT TO BE `3.4 ONLY. THE RECEIPTS DUE FROM `G. LUN `SHIV AND `SHAILENDRA WRITTEN IN FRON T SIDE OF PAGE NO. 6 EQUALS TO `120.9 APPEARING IN BACK SIDE OF THE PAGE 4. (1+3.4+5+5.5+16+12+18+60). THUS RS. 120.9 LAKHS DUE FOR RECEIPTS FROM SUPPLIERS G.LUN SHIV PROPRIETOR OF SHIV SHAKTI INDUSTRIES AND ZEST PHARMA ON THE BASIS OF VALUE OF ORDERS WHICH IS AN OLD DUE HAS BEEN PAID VIDE JOTTINGS MADE IN BACK SIDE OF THE PAGE - 5 OF LPS - 1/1. THE OLD DUES WHEN PAID HAVE BEEN JOTTED DOWN IN BACK SIDE OF THE PAGE NO. 5 OF LPS - 1/1. SIMILARLY THE DUES FROM NANDA JI AND OTHERS JOTTED IN BACK SIDE PAGE NO.6 HAS BEEN JOTTED AS PAID IN BACK SIDE OF THE PAGE NO. 5 OF LPS - 1/1. THUS THE DUES FROM DIFFERENT SUPPLIERS JOTTED IN PAGE NO. 6 HAVE BEEN NEXUS WITH ENTRIES OF RECEIPT OF RS. 120.9 LAKHS 85.49 LAKHS 25 LAKHS AND RS. 36.15 LAKHS ON 09 - 07 - 2007 29 - 07 - 200 7 18 - 08 - 2007 AND 14 - 08 - 2007 RESPECTIVELY OUT OF SUCH DUES JOTTED IN BACK SIDE OF THE PAGE NO. 5 OF LPS - 1/1. IN VIEW OF THE ABOVE THE ADDITION OF THE ABOVE SUM RECEIVED ON SPECIFIED DATES AS JOTTED DOWN IN BACK SIDE OF THE PAGE NO. 5 OF LPS - 1/1 SINCE ALR EADY BEEN CONFIRMED FURTHER ADDITION OF RS. 333.83 LAKHS AND RS. 97.83 LAKHS MADE ON THE BASIS OF JOTTINGS IN PAGE NO. 6 OF LPS - 1/1 ARE NOT SUSTAINABLE AND HENCE ADDITIONS ARE DELETED . THE APPELLANT GETS A RELIEF OF RS. 431.66 LAKHS . 39 . WE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME. WE NOTED THAT CIT(A) HAS GIVEN A FINDING OF FACT. CIT(A) HAS GIVEN A SPECIFIC FINDING THAT THE JOTTING ON THIS PAGE ON THE BASIS OF WHICH ADDITION HAS BEEN 52 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) MADE ARE ALREADY AVAILABLE ON THE BACKSIDE OF PG. 5 OF LPS 1/1 AND REPRESENTS DUPLICATE JOTTING AND DELETED THE ADDITION. THE LD. DR EVEN THOUGH VEHEMENTLY RELIED ON THE ORDER OF THE CIT(A) BUT COULD NOT BRING TO OUR KNOWLEDGE ANY MATERIAL OR EVIDENCE WHICH MAY PROVE THAT THE FINDING GIVEN BY CIT( A) ABOUT THE DUPLICATE ENTRIES OF THE JOTTING ARE INCORRECT. IN VIEW OF THESE FACTS WE CONFIRM THE ORDER OF CIT(A) DELETING THE ADDITION ON THE BASIS OF PG. 6 OF LPS 1/1. THUS GROUND NOS. 5 & 6 STAND DISMISSED. 4 0 . GROUND NO. 7 RELATES TO DELETION OF ADDITION OF RS. 10 LACS MADE BY THE AO ON THE BASIS OF SEIZED LOOSE PAPER MARKED AS LPS 1/1 PG. 12. ON THE BASIS OF PG. 12 & 13 OF LPS 1/1 THE AO WAS OF THE VIEW THAT IT CONTAINS THE DETAILS OF RS. 11 18 400/ - AND REPR ESENTS ILLEGAL GRATIFICATION RECEIVED BY THE ASSESSEE FROM ASHOK KUNDANI AND RAJAN JAGTIYANI AND ACCORDINGLY HE MADE THE ADDITION OF RS. 11 18 400/ - . WHEN THE MATTER WENT BEFORE CIT(A) CIT(A) NOTED THAT THE CORRESPONDING JOTTING OF PAYMENT 5+5 MADE AGA INST THE NAME OF ASHOK JBP ON THE BACKSIDE OF PG. 1 OF LPS 1/1 . CIT(A) THEREFORE REDUCED THE ADDITION BY RS. 10 LACS AND SUSTAINED THE ADDITION OF RS. 1 18 400/ - . THE LD. DR EVEN THOUGH VEHEMENTLY RELIED ON THE ORDER OF AO BUT COULD NOT CONVINCE US F ROM THE LOOSE PAPERS WHICH CONTAINS THE NAME OF ASHOK AT BOTH THE PLACES ABOUT THE DELETION OF ADDITION BY CIT(A) ON THIS GROUND AS IT TANTAMOUNT TO DOUBLE ADDITION. WE ARE NOT DEALING WITH THE PLEA OF THE LD. AR IN THIS REGARD WHETHER ANY ADDITION CAN BE MADE ON THE BASIS OF THESE LOOSE PAPERS. THIS PLEA WILL BE DECIDED WHILE DEALING WITH THE GROUND OF APPEAL OF THE ASSESSEE. IN OUR OPINION CIT(A) HAS RIGHTLY DELETED THE ADDITION AND WE ACCORDINGLY CONFIRM THE ORDER OF CIT(A) ON THIS COUNT. 41 . IN THE RESULT THE APPEALS FILED BY THE REVENUE STAND DISMISSED. 53 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) 42 . ALL THE CROSS OBJECTIONS FILED BY THE ASSESSEE RELATING TO A.YS 2003 - 04 TO 2008 - 09 ARE SUPPORTIVE TO THE ORDER OF CIT(A). SINCE WE HAVE ALREADY DISMISSED THE APPEALS FILED BY THE REVENUE THEREFORE THE CROSS OBJECTIONS FILED BY THE ASSESSEE HAVE BECOME INFRUCTUOUS AND SAME ARE DISMISSED AS INFRUCTUOUS. ASSESSEES AP PEAL (A.YS : 2004 - 05 TO 2008 - 09) 4 3 . IN A.YS. 2004 - 05 TO 2006 - 07 THE ASSESSEE HAS TAKEN COMMON GROUNDS OF APPEAL EXCEPT FOR THE C HANGE IN FIGURE . SIMILAR GROUND S HA VE BEEN TAKEN IN THE A.Y 2007 - 08 AS GROUND NOS. 1 TO 4 AND 11. IN THE A.Y 2004 - 05 TO 2007 - 08 IN GROUND NOS. 2 3 AND 4 THE FIGURE SBE READ AS RS. 7 50 000/ - RS.2 50 000/ - RS.60 00 000/ - AND RS. 1 00 000/ - . BOTH THE PARTIES AGREED THAT TH ESE GROUNDS IN ALL THE FOUR YEARS BE DECIDED ON THE BASIS OF THE FACTS RELATING TO A.Y 2004 - 05. THESE GROUNDS IN A.Y 2004 - 05 READS AS UNDER : 1. THE LEARNED ASSESSING OFFICER ERRED IN HOLDING THAT INCOME SURRENDERED BY SHRI GAURAV SHARMA IS LIABLE TO BE ASSESSED AT THE HA NDS OF ASSESSEE. 2. THE LEARNED CIT(APPEALS) ERRED IN HOLDING THAT SUM OF RS.7 50 000/ - BEING INCOME SURRENDERED BY SHRI GAURAV SHARMA IN HIS RETURN IS LIABLE TO BE ASSESSED TO TAX AT THE HANDS OF ASSESSEE. 3. THE ADDITION SUSTAINED BY CIT(APPEALS) AT RS .7 50 000/ - BEING INCOME DECLARED BY SHRI GAURAV SHARMA IN HIS RETURN IS UNJUSTIFIED UNWARRANTED AND BAD IN LAW. 4. THE LEARNED AUTHORITIES OUGHT TO HAVE HELD THAT RS.7 50 000/ - BEING INCOME OFFERED IN THE RETURN OF SHRI GAURAV SHARMA IS LIABLE TO BE ASS ESSED SUBSTANTIVELY AT THE HANDS OF SHRI GAURAV SHARMA AND NOT AT THE HANDS OF ASSESSEE. 5. THE ASSESSEE DENIES LIABILITY TO BE ASSESSED TO INTEREST U/S 234A 234B AND 234C OF THE I.T. ACT 1961. WITHOUT PREJUDICE THE LEVY OF INTEREST U/S 234A 234B AND 234C IS UNJUSTIFIED UNWARRANTED AND EXCESSIVE. 54 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) THESE GROUNDS RELATE TO THE COMMON ISSUE IN RESPECT OF ADDITION MADE IN THE HANDS OF THE ASSESSEE FOR THE AMOUNT SURRENDERED AND DISCLOSED AS ADDITIONAL INCOME BY SHRI GAURAV SHARMA WHILE FILING HIS RETURN U/S 153A. IN A.Y 2004 - 05 THE INCOME SURRENDERED IS RS.7 50 000/ - IN A.Y 2005 - 06 IT IS RS.2 50 000/ - IN A.Y 2006 - 07 IT IS RS. 60 00 000/ - AND IN A.Y 2007 - 08 IT IS RS. 1 00 000/ - . 4 4 . THE BRIEF FACTS RELATING TO THESE ADDITIONS ARE THAT THE AO NOTED THAT SHRI GAURAV SHARMA IN HIS RETURN FILED IN RESPONSE TO NOTICE ISSUED U/S 153A SURRENDERED THE FOLLOWING INCOME. THE AO ALONGWITH THE SURRENDERED INCOME MADE CERTAIN OTHER ADDITIONS AND ASSESSED THE INCOME PROTECTIVELY IN THE HANDS OF SHRI GAURAV SHARM A AND SUBSTANTIVELY IN THE HANDS OF DR. YOGIRAJ SHARMA ON THE BASIS OF THE FINDING GIVEN IN THE CASE OF SHRI GAURAV SHARMA AS UNDER : A.Y AMOUNT 2004 - 05 RS. 7 50 000/ - 2005 - 06 RS. 2 50 000/ - 2006 - 07 RS. 60 00 000/ - 2007 - 08 RS. 1 00 000/ - THE AO NOTED THAT THE ASSESSEE S SON SURRENDERED THIS INCOME OUT OF THE INCOME FROM COMMISSION RECEIVED AGAINST SALE AND PURCHASE OF PROPERTIES. IN THE OPINION OF THE AO SINCE THE SHRI GAURAV SHARMA WAS ONLY 23 YEARS OLD AND WAS A STUDENT HE COULD NOT HAVE EARNED TH IS INCOME. THE SURRENDER HAS BEEN MADE JUST TO COVER UP THE UNACCOUNTED SOURCE OF INCOME OF HIS FATHER DR. YOGIRAJ SHARMA. THE AO THEREFORE ASSESSED THE INCOME SURRENDERED BY SHRI GAURAV SHARMA IN EACH OF THE ASSESSMENT YEAR PROTECTIVELY IN HIS HANDS AND SUBSTANTIVELY IN THE HANDS OF HIS FATHER DR. YOGIRAJ SHARMA. THE AO FURTHER OBSERVED THAT DR. YOGIRAJ SHARMA WAS IN RECEIPT OF ILLEGAL GRATIFICATION FROM THE SUPPLY OF MEDICINES TO THE HEALTH DEPT. AND AS A RESULT OF THE SEARCH A PATTERN 55 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) WAS ADOPTED BY WHICH UNDISCLOSED INCOME EARNED BY DR. YOGIRAJ SHARMA THROUGH UNSCRUPULOUS MEANS HAVE BEEN DIVERTED IN THE HANDS OF THE FAMILY MEMBERS BY SHOWING BOGUS INCOME BY THEM AS THE ASSESSEE IS A GOVERNMENT SERVANT AND EARNING OF UNDISCLOSED INCOME BY HIM TANT AMOUNT TO VIOLATION OF THE GOVERNMENT SERVICE RULES. THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A) THE ASSESSEE SUBMITTED THAT SHRI GAURAV SHARMA IS AN INDEPENDENT ASSESSEE HAVING SEPARATE PAN SUBMITTING REGULAR RETURN OF INCOME FOR V ARIOUS ASSESSMENT YEARS DIRECTOR IN TWO PRIVATE LIMITED COMPANIES SINCE 11.12.2002 AND ENGAGED IN THE BUSINESS OF REAL ESTATE DEVELOPMENT AND SEARCH WAS CONDUCTED IN THE PREMISES BELONGING TO HIM. MERELY SHRI GAURAV SHARMA WAS 26 YEARS OLD AND WAS A STUD ENT DOES NOT DEBAR HIM TO CARRY ON PROPERTY DEALING BUSINESS. CIT(A) CONFIRMED THE ADDITION BY OBSERVING AS UNDER : DECISION I HEARD THE LD. AR AT LENGTH. THE APPELLANT WAS A REGULAR STUDENT UPTO NOVEMBER 2006. HE WAS PURSUING HIS STUDIES IN AUSTRALIA. BEFORE GOING ABROAD FOR HIGHER STUDIES HE WAS A REGULAR STUDENT OF BACHELOR OF ENGINEERING IN BHOPAL UNIVERSITY. THUS IT IS OBVIOUS THAT HE COULD NOT HAVE ANY TIME TO SPARE FOR EARNING INCOME FROM INDEPENDENT SOURCE. IT IS TRUE THAT HE STARTED FILING RETURN OF INCOME FROM ASSTT. YR. 2001 - 02 I.E. ONLY AFTER TRANSFER OF OWNERSHIP OF ASSETS MOVABLE AND IMMOVABLE OWNED BY HIS DECEASED GRANDMOTHER. THE INTEREST ON THE FDRS PURCHASED BY HIS GRANDMOTHER AND OWNERSHIP TRANSFERRED TO HIM CAN ONLY BE SOURCE OF INCOME FOR ASSTT. YR. 2001 - 02. FOR THAT ASSTT. YR. 2002 - 03 HE FILED THE RETURN DISCLOSING SALARY INCOME OF RS. 48 000/ - AN D INTEREST INCOME FROM FDRS AT RS. 28 254/ - . EVEN IN HIS STATEMENT RECORDED ON 06 - 10 - 2008 SHRI GAURAV SHARMA HAS CATEGORICALLY STATED THAT HE HAS NO FULL KNOWLEDGE OF SALARY INCOME DISCLOSED IN THE RETURN. SINCE THEN HIS SOURCE OF INCOME IS THE SALARY INCOME AND INTEREST INCOME FROM THE FDRS. ON THE OTHER HAND THE CAPITAL IN HIS CAPITAL ACCOUNT IS DISPROPORTIONATE TO THE SOURCE OF INCOME DISCLOSE DIN THE RETURN. IT IS ONLY AFTER THE SEARCH OPERATION IN THE RESIDENTIAL PREMISES WHICH IS LEGALLY OWNED BY HIM THE FACT THAT HE HAS NO INDEPENDENT SOURCE OF INCOME OR ANY INDEPENDENT ACTIVITY FOR EARNING INCOME. THERE WAS NO EVIDENCE OF SOURCE OF INCOME NOT DISCLOSED IN THE RETURN IN THE ENTIRE PROCESS OF SEARCH ACTION. IN ORDER TO COVER UP THE INVESTMENT MADE BY SHRI GAURAV SHARMA IN HIS RETURNS OF INCOME HE CAME UP WITH THE STORY OF SURRENDERING ADDITIONAL INCOME IN THE RETURNS OF INCOME FIELD IN RESPONSE TO THE NOTICE U/S 153A. THE ARGUMENT OF THE LD. AR THAT THE RETURNS FILED BY SHRI GAURAV SHARMA FO R THE EARLIER YEARS HAVE BEEN ACCEPTED IN THE REGULAR ASSESSMENT PROCEEDINGS IS GROSSLY MISPLACED IN VIEW OF THE VERY FACT THAT NOT A SINGLE RETURN OF SHRI GAURAV SHARMA 56 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) FILED FOR EARLIER YEARS WAS PICKED UP FOR REGULAR SCRUTINY. RATHER THESE WERE PROCE SSED ONLY US/ 143(1)(A) OF THE ACT AND THUS THERE IS NO QUESTION OF PRESUMING THAT THE RETURNS WERE ACCEPTED ON REGULAR ASSESSMENT AS HAS BEEN HELD BY THE HONBLE APEX COURT IN THE CASE OF RAJESH JHAVERI STOCK BROKERS PVT. LTD. VS. CIT REPORTED IN 291 CTR 500. WHILE FILING THE RETURN OF INCOME IN RESPONSE TO NOTICE U/S 153A SHRI GAURAV SHARMA ADMITTED BEFORE THE AO THAT THE INCOME EARNED FROM BUSINESS INCOME WAS SURRENDERED AS ADDITIONAL INCOME BUT HE GROSSLY FAILED TO ESTABLISH THE SAME EVEN BY ADDUC ING AN IOTA OF EVIDENCE. THE WRITTEN REPLY OF SHRI GAURAV SHARMA FILED FOR ASSTT. YR. 2004 - 05 BEFORE THE AO IS REPRODUCED HEREUNDER WITH THE COMMENT THAT REASONS BEHIND SURRENDER OF ADDITIONAL INCOME FOR OTHER YEARS ARE SAME : IN THIS REFERENCE IT IS S UBMITTED THAT AS ALREADY STATED IN RETURN FILED U/S 153A. I DEAL IN PROPERTIES EARNED COMMISSION AND DURING THE TRADING THEREOF. DURING THE ASSTT. YR. 2004 - 05 I HAVE EARNED RS. 7 50 000/ - FROM THIS BUSINESS WHICH I HAVE OFFERED FOR TAXATION IN THE RETUR N FILED U/S 153A. THE DETAIL OF SAID INCOME OF RS. 7 50 000/ - EARNED BY ME BY DEALING IN PROPERTIES IS NOT AVAILABLE WITH ME. THE MODUS OPERANDI OF EARNING FROM THE PROPERTY DEALING IS THAT INITIALLY I ADVANCE TAKEN AMOUNT FOR PROPERTY AND THEN DISPOSE O FF THE SAME AFTER GIVING MARGIN MONEY FOR ME. I ALSO EARNED KNOWLEDGE BROKERAGE ON PROPERTY DEALING VARIOUS TIME. NOT ONLY THAT THE LD. AR MADE ALLEGATION THAT THE AO IS NOT JUSTIFIED IN ADDING THE DEPOSITS IN BANK ACCOUNTS OF SMT. SHASHI SHARMA THE SOURCE OF WHICH COULD NOT BE EXPLAINED SUBSTANTIVELY IN THE HANDS OF THE APPELLANT BY CONTENDING THAT INCOME SURRENDERED BY SHRI GAURAV SHARMA ARE INCLUSIVE OF UNEXPLAINED DEPOSITS IN THE BANK ACCOUNT OF SMT. SHASHI SHARMA. IN THE CIRCUMSTANCES UNDER WHIC H THE APPELLANT HAS GROSSLY FAILED TO PRODUCE ANY EVIDENCE REGARDING HIS INCOME FROM COMMISSION I FIND THAT THE AO IS JUSTIFIED IN PRESUMING THAT THE INCOME SURRENDERED IN THE HANDS OF SHRI GAURAV SHARMA IS IN FACT THE INCOME OF THE APPELLANT AND THE MO DUS OPERANDI APPLIED TO JUSTIFY THE INVESTMENTS IN THE NAME OF SHRI GAURAV SHARMA IS AKIN TO BENAMI TRANSACTION WHICH I HAVE DISCUSSED IN ISSUE NO. 3(C) OF THE APPELLATE ORDER. IN SUCH A SITUATION THE PROPOSITIONS LAID DOWN IN THE HONBLE APEX COURT IN T HE CASE OF ITO VS. CH. ATCHAIAH REPORTED IN 218 ITR 239 AND HONBLE CHHATTISGARH HIGH COURT IN THE CASE OF TRILOK DHILLON VS. CIT 240 CTR 229 IS SQUARELY APPLICABLE. IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE AND FOR THE GROUNDS OF DECISION ON SIMIL AR ISSUES DISCUSSED IN THE APPELLATE ORDER I FIND THAT IT IS DR. YOGIRAJ SHARMA WHO IS LAWFULLY LIABLE TO BE TAXED FOR SURRENDERED INCOME OF SHRI GAURAV SHARMA AND SHRI GAURAV SHARMA CANNOT CLAIM IMMUNITY FROM TAX HE HAS PAID ON SAID INCOME IN CO NTRAVENTI ON AND CONTRARY TO LAW. 57 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) 4 5 . THE LD. AR BEFORE US REITERATED THE SUBMISSION MADE BEFORE THE CIT(A) AND FURTHER CONTENDED THAT SHRI GAURAV SHARMA IS A MAJOR AND IS ASSESSED TO INCOME TAX AND INDEPENDENT INDIVIDUAL HOLDING PAN OF HIS OWN. SHRI GAURAV SHARM A HAS SOURCE OF INCOME BEING SALARY AS DIRECTOR OF THE COMPANIES INTEREST INCOME AND OTHER INCOME FROM THE ASSESSMENT YEARS 2001 - 02 . PURSUANT TO THE SEARCH U/S 132(1) OF THE INCOME TAX ACT SHRI GAURAV SHARMA SUBMITTED RETURN OF INCOME IN PURSUANCE OF NO TICE RECEIVED U/S 153A AND DISCLOSED ADDITIONAL INCOME IN EACH OF THE A.YS 2004 - 05 TO 2007 - 08. THE AO WHILE FINALIZING THE ASSESSMENT OF SHRI GAURAV SHARMA ACCEPTED THE INCOME AS SHOWN IN THE RETURN BUT OBSERVED THAT THE ADDITIONAL INCOME IS BEING ASSESSE D PROTECTIVELY IN THE HANDS OF SHRI GAURAV SHARMA AND SUBSTANTIVELY IN THE HANDS OF THE ASSESSEE. CIT(A) CONFIRMED THE ADDITION MADE BY THE AO SIMPLY OBSERVING THAT ACTION OF THE AO IN MAKING THE ADDITION IN THE HANDS OF THE ASSESSEE IS JUSTIFIED. IT WAS FURTHER SUBMITTED THAT PERUSAL OF THE ASSESSMENT ORDER OF SHRI GAURAV SHARMA WOULD INDICATE THAT SHRI GAURAV SHARMA HAS INDEPENDENT SOURCE OF INCOME HAS VARIOUS OTHER INVESTMENTS FROM WHICH INCOME IS DERIVED BY HIM IS AN ADULT AGED ABOUT 26 YEARS AND IS OWNER OF THE PROPERTY AND SEARCH WARRANT WAS ALSO ISSUED IN HIS NAME BY THE INCOME TAX DEPARTMENT. INCOME OFFERED BY SHRI GAURAV SHARMA HAS NEXUS AND CO - RELATION WITH HIS INVESTMENT AND HAS BEEN OFFERED FOR TAXATION IN HIS RETURN IN ORDER TO BUY PEACE AN D AVOID LITIGATION. THE INCOME SO OFFERED HAS NO NEXUS OR CO - RELATION WITH THE ASSESSEE. IN THE COURSE OF THE SEARCH NO INCRIMINATING DOCUMENTS WERE FOUND TO SHOW THAT THE ASSESSEE HAS PROVIDED MONEY TO SHRI GAURAV SHARMA FOR MAKING INVESTMENT WHICH REMAINS UNEXPLAINED AND HAS BEEN OFFERED FOR THE PURPOSE OF TAXATION BY SHRI GAURAV SHARMA. IN THE ABSENCE OF ANY SUCH RECORD OR EVIDENCE BEING BROUGHT BY AO THERE IS NO JUSTIFICATION FOR MAKING THE ASSESSMENT OF INCOME WHICH HAS BEEN DECLARED AT THE HAND S OF THE ASSESSEE. THE ONUS LIES WITH THE REVENUE TO PROVE THAT THE INCOME SURRENDERED BY SHRI GAURAV SHARMA BELONGED TO THE ASSESSEE. IN THIS REGARD RELIANCE WAS PLACED ON THE DECISION OF THE HON'BLE 58 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) SUPREME COURT IN THE CASE OF CIT VS. DAULAT RAM RAWA TMULL 87 ITR 349 (SC) ( SUPRA) . SHRI GAURAV SHARMA IS ASSESSED TO TAX AT MAXIMUM MARGINAL RATE AND NO PREJUDICE WOULD BE CAUSED TO THE REVENUE FOR ASSESSING THE INCOME IN THE HANDS OF SHRI GAURAV SHARMA AS DECLARED AS THE SAME IS SUBJECTED TO TAX AT THE M AXIMUM MARGINAL RATE. THE AO HAS NOT BROUGHT ANY EVIDENCE ON RECORD TO SHOW THAT THE INCOME OFFERED BY SHRI GAURAV SHARMA HAS ANY NEXUS WITH THE ASSESSEE. IN THE COURSE OF THE SEARCH NO EVIDENCE WAS FOUND TO INDICATE THAT THE INVESTMENT/EXPENDITURE IS MA DE BY THE ASSESSEE WHICH IS SOUGHT TO BE DECLARED BY SHRI GAURAV SHARMA IN HIS RETURN OF INCOME. ON THE BASIS OF ABOVE UNDISPUTED FACTUAL POSITION THE ASSESSMENT OF INCOME SOLELY ON THE BASIS OF DECLARATION OF SHRI GAURAV SHARMA IN HIS RETURN IS UNJUSTIF IED AND UNSUSTAINABLE. SHRI GAURAV SHARMA HAS DECLARED INCOME WHICH IS APPARENT AND REVENUE ALLEGES THAT THIS INCOME IS ASSESSABLE AT THE HANDS OF THE ASSESSEE. IT IS FOR THE REVENUE TO PLACE EVIDENCE ON RECORD FOR THE SAME. 4 6 . THE LD. DR ON THE OTHE R HAND RELIED ON THE ORDER OF CIT(A) AND VEHEMENTLY CONTENDED THAT INCOME HAS TO BE ASSESSED IN THE RIGHT HANDS. 4 7 . WE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME ALONGWITH THE ORDER OF THE TAX AUTHORITIES BELOW. THIS IS AN UNDISPUTE D FACT THAT SEARCH AND SEIZURE OPERATION HAS BEEN CARRIED OUT AT A - 70 SHAKTI NAGAR BHOPAL WHICH BELONGED TO THE SON OF THE ASSESSEE SHRI GAURAV SHARMA. THE ASSESSEE WAS ALLOTTED GOVERNMENT ACCOMMODATION AND HAS ALSO OCCUPIED THE SAME. THE SON OF THE A SSESSEE SHRI GAURAV SHARMA GOT INCORPORATED TWO PRIVATE LIMITED COMPANIES ON 11.12.2002. THESE COMPANIESIN WHICH SHRI GAURAV SHARMA WAS THE DIRECTOR WERE CARRYING ON BUSINESS EVEN THOUGH ON A SMALL SCALE. THESE COMPANIES VIZ. M/S. GAJANAN DISTRIBUTORS A ND DEVELOPERS PVT. LTD. AND M/S. SHREE VIGNESH WAREHOUSE AND DISTRIBUTORS PVT. LTD. HAVE FILED THEIR INCOME TAX RETURNS. SHRI GAURAV SHARMA HAS ALSO DERIVED SALARY FROM THESE COMPANIES AS 59 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) DIRECTORS. SHRI GAURAV SHARMA WAS ALSO FILING HIS INCOME TAX RETUR N REGULARLY. THE RETURNS FILED BY SHRI GAURAV SHARMA WERE DULY ACCEPTED U/S 143(1). THE RETURNS UPTO A.Y 2007 - 08 WERE FILED WITHIN THE DUE DATE AND PRIOR TO THE CARRYING OUT OF THE SEARCH AND SEIZURE OPERATION. HE IS AN INCOME TAX ASSESSEE FROM A.Y 2001 - 02. HE RECEIVED PROPERTY THROUGH WILL OF HIS GRANDMOTHER. THIS FACT HAS NOT BEEN DISPUTED BY THE AO. IN THE RETURN FILED IN RESPONSE TO NOTICE U/S 153A SHRI GAURAV SHARMA HAS SHOWN ADDITIONAL INCOME IN EACH OF THE FOLLOWING ASSESSMENT YEARS AS UNDER : A.Y AMOUNT 2002 - 03 RS. 2 00 000/ - 2004 - 05 RS. 7 50 000/ - 2005 - 06 RS. 2 50 000/ - 2006 - 07 RS. 60 00 000/ - 2007 - 08 RS. 35 00 000/ - SO FAR AS A.Y 2002 - 03 IS CONCERNED THERE IS NO DISPUTE AND THE AO EVEN THOUGH ASSESSED THE INCOME PROTECTIVELY BUT THE SAME WAS DELETED BY CIT(A). THE AO DID NOT ACCEPT THE INCOME SURRENDERED BY SHRI GAURAV SHARMA AND TREATED THE SAME AS THE INCOME OF TH E ASSESSEE ON THE PREMISE THAT SINCE SHRI GAURAV SHARMA WAS A STUDENT UPTO 6.11.2006 HE COULD HAVE NOT CARRIED OUT BUSINESS AND AT THE AGE OF 26 YEARS HE WAS TOO YOUNG. SHRI GAURAV SHARMA HAS SHOWN SOURCE OF ADDITIONAL INCOME TO BE BY WAY OF COMMISSION FR OM PURCHASE AND SALE OF PROPERTIES. IT IS NOT DENIED THAT SHRI GAURAV SHARMA WAS A MAJOR AND HE COULD HAVE CARRIED OUT BUSINESS. A STUDENT CARRYING ON STUDIES IS NOT BARRED FROM CARRYING ON BUSINESS. COMMISSION BUSINESS IN THE PURCHASE AND SALE OF PROPER TIES CAN BE CARRIED OUT BY MERELY GETTING BOTH PURCHASERS AND SELLERS MEET SO THAT THE DEAL MAY BE STRUCK. THERE HAD BEEN SEARCH IN THE CASE OF THE ASSESSEE. LOOSE PAPERS WERE FOUND ON THE BASIS OF WHICH THE AO HAS MADE VARIOUS ADDITIONS IN THE HANDS OF T HE ASSESSEE. ON THE BASIS OF THE LOOSE PAPERS WE NOTED THAT THE AO HAS MADE THE ADDITION IN THE HANDS OF THE ASSESSEE 60 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) OBSERVING THAT THE ASSESSEE HAS GOT INCOME EARNED THROUGH GRATIFICATION BY WAY OF COMMISSION ON THE SUPPLY OF MEDICINES/MEDICAL EQUIPMENT . THIS INCOME DOES NOT REPRESENT THE INVESTMENT OR EXPENDITURE MADE BY THE ASSESSEE. IF SON OF THE ASSESSEE WHO IS CARRYING ON BUSINESS HAS SURRENDERED ANY INCOME IN OUR OPINION IT DOES NOT DEBAR THE REVENUE TO ASSESS THE ADDITIONAL INCOME IN THE HAND S OF THE ASSESSEE WHICH HAS BEEN FOUND ON THE BASIS OF THE MATERIAL SEIZED DURING THE COURSE OF THE SEARCH AND WHICH PROVES THAT THE ASSESSEE HAS EARNED THE INCOME. WE NOTED THAT THE AO ADDED THE INCOME SURRENDERED BY SHRI GAURAV SHARMA IN THE HANDS OF TH E ASSESSEE PRESUMING THAT THE INCOME EARNED BY ASSESSEE THROUGH UNSCRUPULOUS MEANS MUST BE ADDED IN THE HANDS OF THE ASSESSEE. THE SOURCE DECLARED BY THE SON OF THE ASSESSEE SHRI GAURAV SHARMA IS ENTIRELY DIFFERENT FROM THE SOURCE ON THE BASIS OF WHICH TH E AO INTENDS TO MAKE THE ADDITION IN THE HANDS OF THE ASSESSEE AND IN FACT HAS MADE THE ADDITION IN THE A.YS 2007 - 08 AND 2008 - 09. IF THERE ARE EVIDENCES AND THE REVENUE CAN PROVE BY DISCHARGING ITS ONUS THAT THE ASSESSEE HAS EARNED THE INCOME IN OUR OPIN ION THE REVENUE IS NOT PROHIBITED FROM MAKING THE ADDITION OF THAT INCOME IN THE HANDS OF THE ASSESSEE. WE DO NOT FIND ANY EVIDENCE OR MATERIAL ON THE BASIS OF WHICH IT CAN BE SAID THAT THE REVENUE HAS DISCHARGED ITS ONUS THAT THE INCOME SURRENDERED BY S HRI GAURAV SHARMA BELONGED TO THE ASSESSEE AND HAS IN FACT BEEN EARNED BY THE ASSESSEE. NO DOUBT THE INCOME EARNED HAS TO BE ASSESSED IN THE RIGHT HANDS BUT THIS DOES NOT GIVE LICENCE TO THE REVENUE THAT THEY MAY ASSESS THE INCOME IN THE HANDS OF THE PERS ON WHOM THEY FEEL HAS EARNED THE INCOME. TO DECIDE WHO HAS ACTUALLY EARNED THE SAME INCOME THERE MUST BE EVIDENCE ON RECORD. THIS IS A SETTLED LAW IN VIEW OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. DAULAT RAM RAWATMULL 87 ITR 3 49 (SC) ( SUPRA ) THAT APPARENT IS REAL. ONUS IS ON THE PERSON WHO ALLEGES THAT THE APPARENT IS NOT REAL. SHRI GAURAV SHARMA WHILE SUBMITTING HIS RETURN IN RESPONSE TO NOTICE U/S 153A HAS SUBMITTED A DECLARATION BY WAY OF VERIFICATION GIVEN IN THE RETURN F ORM THAT THE INCOME BELONGED TO HIM. THEREFORE IN VIEW OF 61 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) THE VERIFICATION IN THE RETURN IT IS APPARENT THAT THE INCOME SURRENDERED BY SHRI GAURAV SHARMA BELONGED TO HIM. IF THE REVENUE DOES NOT AGREE WITH THE INCOME AND VERIFICATION MADE BY SHRI GAURAV SHARMA THE ONUS LIES ON THE REVENUE TO PROVE THAT THE INCOME SURRENDERED BY SHRI GAURAV SHARMA DOES NOT BELONG TO HIM BUT HAS BEEN EARNED BY HIS FATHER DR. YOGIRAJ SHARMA. SHRI GAURAV SHARMA HAS NOT SURRENDERED THE INCOME IN HIS RETURN FILED IN RESPONS E TO NOTICE ISSUED U/S 153A ON THE BASIS OF THE LOOSE PAPERS FOUND AS HAS BEEN INTERPRETED BY THE AO. WE HAVE GONE THROUGH THE ASSESSMENT ORDER AS WELL AS THE ORDER OF CIT(A) AND SUBMISSION MADE BY THE LD. DR . EXCEPT FOR PRESUMPTION AND ASSUMPTION WE DO NOT FIND ANY COGENT MATERIAL OR EVIDENCE BEING BROUGHT ON RECORD WHICH MAY PROVE THAT THE INCOME SURRENDERED BY SHRI GAURAV SHARMA BELONGED TO THE ASSESSEE . WE HAVE ALSO GONE THROUGH THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF ITO VS. ATCHAIAH (CH.) 218 ITR 239. THIS DECISION IN OUR OPINION WILL NOT ASSIST THE REVENUE . THIS DECISION NO DOUBT LAYS DOWN THE PROPOSITION OF LAW THAT INCOME HAS TO BE ASSESSED IN THE RIGHT HANDS AND THIS DECISION CLEARLY LAYS DOWN THAT NO OPTION IS AVA ILABLE TO THE AO TO ASSESS AN ASSOCIATION OF PERSONS OR ITS MEMBERS INDIVIDUALLY. THIS DECISION IN OUR OPINION SUPPORTS THE CASE OF THE ASSESSEE AS SHRI GAURAV SHARMA HAS BY WAY OF VERIFICATION ACCEPTED THE ADDITIONAL INCOME. CONTRARY TO THAT WE DO NOT FIND ANY RELEVANT MATERIAL ON RECORD EXCEPT FOR THE SUPPOSITION AND ASSUMPTION MADE BY THE AO THAT SINCE SHRI GAURAV SHARMA WAS A STUDENT IN NOVEMBER 2006 AND WAS ONLY 26 YEARS OLD HE WOULD HAVE NOT EARNED THE ADDITIONAL INCOME. WE THEREFORE DELETE T HE ADDITION MADE IN RESPECT OF THE ADDITIONAL INCOME AS SURRENDERED BY SHRI GAURAV SHARMA FROM THE HANDS OF THE ASSESSEE AND DIRECT THE AO TO ASSESS THE SAME INCOME SUBSTANTIVELY IN THE HANDS OF SHRI GAURAV SHARMA. 4 8 . GROUND NO. 5 IN A.YS 2004 - 05 TO 2006 - 07 AND GROUND NO. 11 IN A.Y 2007 - 08 ARE CONSEQUENTIAL IN NATURE ABOUT CHARGING OF INTEREST U/S 234A 234B 62 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) AND 234C. WE ACCORDINGLY DIRECT THE AO TO RE - COMPUTE THE INTEREST UNDER THESE SECTIONS AFTER GIVING EFFECT TO OUR ABOVE ORDER. 4 9 . GROUND NOS. 5 TO 10 IN A.Y 2007 - 08 AND GROUND NOS. 8 TO 10 IN A.Y 2008 - 09 SINCE RELATE TO THE COMMON ISSUE OF ADDITIONS BEING MADE ON ACCOUNT OF ILLEGAL GRATIFICATION ARE BEING DISPOSED OFF BY THIS COMMON ORDER. THESE GROUNDS IN BOTH THE ASSESSMENT YEARS READ AS UNDER : A.Y 2007 - 08 5. THE LEARNED CIT(APPEALS) ERRED IN HOLDING THAT FOLLOWING SUMS ARE LIABLE TO BE ASSESSED AT THE HANDS OF ASSESSEE AS ILLEGAL GRATIFICATION AS DISCUSSED AT PAGE 102 OF APPELLATE ORDER. AS PER LPS 1/1 PAGE 1 RS.2 94 00 000/ - AS PER LPS 1/1 PAGE 4 RS.1 55 00 000/ - AS PER LPS 1/1 PAGE 12 & 13 RS. 1 18 400/ - 6. THE LEARNED CIT(APPEALS) ERRED IN ENHANCING THE INCOME ASSESSED WITHOUT AFFORDING REASONABLE OPPORTUNITY OF BEING HEARD. 7. THE ADDITION MADE BY CIT(APPEALS) AT RS.4 50 18 400/ - (2 94 00 000/ - + 1 55 00 000/ - + 1 18 400/ - ) IS UNJUSTIFIED UNWARRANTED AND EXCESSIVE. 8. THE ADDITION MADE IN THE CASE BY HON'BLE CIT(APPEALS) ON THE BASIS OF LOOSE PAPERS IS UNJUSTIFIED UNWARRANTED AND EXCESSIVE. 9. THE LEARNED AUTHO RITIES ERRED IN MAKING ADDITION AT THE HANDS OF ASSESSEE ON THE BASIS OF LOOSE PAPERS BY HOLDING THAT ASSESSEE IS IN RECEIPT OF ILLEGAL GRATIFICATION. 10. THE LEARNED CIT(APPEALS) ERRED IN OBSERVING THAT TOTAL ADDITION TO BE MADE AT THE HANDS OF ASSESSEE ON THE BASIS OF LOOSE PAPERS AT PAGE 105 OF APPELLATE ORDER IS RS.7 70 34 400/ - AS AGAINST ACTUAL CONFIRMED AS PER DISCUSSION IN APPELLATE ORDER AT RS.4 50 18 400/ - . A.Y 2008 - 09 8. THE LEARNED CIT(APPEALS) ERRED IN SUSTAINING ADDITION OF RS.2 67 54 000 / - AS LIABLE TO BE ASSESSED AS ILLEGAL GRATIFICATION AT THE HANDS OF THE ASSESSEE. 63 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) 9. THE ADDITION MADE BY THE ASSESSING OFFICER IN THE CASE OF ASSESSEE AT RS.2 67 54 000/ - ON THE BASIS OF LOOSE PAPERS IS UNJUSTIFIED UNWARRANTED AND EXCESSIVE. 10. THE LEARNED AUTHORITIES ERRED IN MAKING ADDITION AT THE HANDS OF ASSESSEE ON THE BASIS OF LOOSE PAPERS BY HOLDING THAT ASSESSEE IS IN RECEIPT OF ILLEGAL GRATIFICATION. 50 . DURING THE COURSE OF SEARCH CERTAIN LOOSE PAPERS WERE FOUND AT THE RESIDENCE OF THE AS SESSEE. ON THE BASIS OF THESE LOOSE PAPERS THE REVENUE INFERRED THAT ILLEGAL GRATIFICATION WAS RECEIVED BY THE ASSESSEE FROM THE SUPPLIERS. THE SCANNED COPIES OF THE LOOSE PAPERS ARE AVAILABLE AT PG. 12 13 18 19 AND 20 OF THE ASSESSMENT ORDER. THE A O ON THE BASIS OF THESE VARIOUS LOOSE PAPERS MADE THE FOLLOWING ADDITIONS IN A.Y 2008 - 09 : I) ON THE BASIS OF LPS 1/1 FRONT & BACK - RS.585 LACS II) ON THE BASIS OF LPS 1/1 PG. 4 & 5 - RS.266 . 54 LACS III) ON THE BASIS OF LPS 1/1 PG. 6 - RS.333 . 83 LACS IV) ON THE BASIS OF LPS 1/1 BACK OF PG. 6 - RS. 97 . 83 LACS V) ON THE BASIS OF LPS 1/1 PG. 12 & 13 - RS. 11 18 400/ - VI) ON THE BASIS OF LPS 1/7 PG 6 BACK - RS.124 LACS (ALTHOUGH AT PAGE ADDITION IS MADE AT RS.1 01 23 935/ - ) VII) ON THE BASIS OF LPS 1/1 PG. 13 BACK - RS.1 . 23 LAC (ALTHOUGH NO REFERENCE TO THIS PAGE) 51 . THE ASSESSEE WENT IN APPEAL BEFORE CIT(A) AND CIT(A) DELETED THE ADDITION OF RS.291 LACS OUT OF ADDITION OF RS.585 LACS AND SUSTAINED THE ADDITION OF RS.294 LACS IN A.Y 2007 - 08 DELETED ADDITION OF RS.3 33.83 LACS RS.97.83 LACS RS. 10 LACS OUT OF SUM OF RS.11.18 LACS DELETED ADDITION OF RS. 1 23 000/ - ENHANCED THE ADDITION OF RS. 1.55 CRORE ON THE BASIS OF PG. 4 LPS 1/1 IN A.Y 2007 - 08 AND SUSTAINED THE ADDITION TO THE EXTENT OF 1 18 400/ - OUT OF RS.11 18 400/ - FOR A.Y 2007 - 08. THUS CIT(A) ENHANCED THE ADDITION TO THE 64 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) EXTENT OF RS.4 50 18 400/ - FOR A.Y 2007 - 08 AND SUSTAINED THE ADDITION FOR RS.2 67 54 000/ - FOR A.Y 2008 - 09 BUT IN THE CONCLUDING PARAGRAPH CIT(A) IT APPEARS WRONGLY MENTIONED ADD ITION CONFIRMED AT RS.7 70 34 400/ - FOR A.Y 2007 - 08 INSTEAD OF RS.4 50 18 400/ - . AGAINST DELETION OF ADDITION THE REVENUE HAS COME IN APPEAL. THE REVENUES APPEAL WE HAVE ALREADY DISPOSED OFF IN THE PRECEDING PARAGRAPHS. AGAINST THE ENHANCEMENT AS WELL AS SUSTENANCE OF THE ADDITION THE ASSESSEE HAS COME IN APPEAL BY TAKING ABOVE GROUNDS . 52. THE LD. AR BEFORE US SUBMITTED BY RELYING ON THE WRITTEN SUBMISSION MADE BEFORE CIT(A) AVAILABLE AT PG. 123 - 130 OF THE PAPER BOOK THAT DURING THE COURSE OF THE SEA RCH U/S 132(1) CERTAIN LOOSE PAPERS WERE FOUND AND SEIZED WHEREIN CERTAIN NUMERIC AS WELL AS NAMES WERE APPEARING. IN NONE OF THE LOOSE PAPERS THERE WAS ANY NOTING AS REGARDS TO COMMISSION. THE AO ON INFERENCE MADE ASSUMPTION AND PRESUMPTION AND CONCLUDE D THAT THE NOTINGS ARE IN RESPECT OF RECEIPT OF MONEY ON ACCOUNT OF ILLEGAL GRATIFICATION AND WENT ON MAKING ADDITION FOR VARIOUS SUMS. THE ASSESSEE IS A PERSON WORKING WITH STATE GOVERNMENT OF MADHYA PRADESH UNDER THE MINISTRY OF HEALTH AND WELFARE UNDER THE SUPERVISION OF THE HEALTH COMMISSIONER AND HE HAS TO MERELY EXECUTE THE DECISION TAKEN BY THE MINISTRY OF STATE GOVERNMENT AND HEALTH COMMISSIONER. DURING HIS ENTIRE PERIOD OF SERVICE THE ASSESSEE HAS NEVER BEEN CHARGE - SHEETED NOR IS ANY DISCIPLINAR Y ACTION INITIATED AGAINST THE ASSESSEE. EVEN IN THE CONFIDENTIAL REPORTS ALSO THERE IS NO ADVERSE ENTRY AND ASSESSEE HAS ALWAYS BEEN GRANTED A & A+ GRADE WHICH IS EQUIVALENT TO VERY GOOD AND OUTSTANDING. ATTENTION WAS DRAWN TOWARDS THE DECISION OF T HE HON'BLE MADHYA PRADESH HIGH COURT IN WRIT PETITION QUASHING THE ORDER PASSED BY THE STATE GOVERNMENT FOR COMPULSORY RETIREMENT OF THE ASSESSEE DT. 14.11.2008 IN WHICH UNDER PARA 18 & 21 THE HON'BLE HIGH COURT HAS OBSERVED AS UNDER : PARA 18: 65 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) IF THE CASE IN HAND IS ANALYSED IN THE BACKDROP OF THE AFORESAID PRINCIPLES AND ON A SCRUTINY OF THE ENTIRE FACTS IT WOULD BE SEEN THAT DURING HIS ENTIRE SERVICE PERIOD NO CHARGE SHEET IS ISSUED TO THE PETITIONER. NEVER WAS ANY DISCIPLINARY PROCEEDING INITIATED AND THERE IS NOTHING TO INDICATE THAT THERE IS ANY ADVERSE COMMUNICATION IN HIS CONFIDENTIAL REPORT. IN THAT VIEW OF THE MATTER IT IS CLEAR THAT PETITIONERS CONTENTION THAT HE HAS AN UNBLEMISHED SERVICE RECORD SEEMS TO BE CORRECT. PARA 21 : EVEN THE COM MUNICATION MADE BY THE INCOME TAX DEPARTMENT TO THE EFFECT THAT THE RAID WAS CONDUCTED I N THE HOUSE OF THE PETITIONER SEEMS TO BE PRIMA FA CI E INCORRECT AS THE RECORDS AVA ILA B L E IN THE PRESENT CASE SHOWS THAT THE HOUSE BELONGED TO PETITIONERS SON AND THE REFORE THE SEARCH AND SEIZURE CONDUCTED BY THE INCOME TAX DEPARTMENT IS NOT IN THE HOUSE OF THE PETITIONER BUT IS IN THE HOUSE OF HIS SON AND IF THIS FACT IS CONSIDERED THEN THE CONTENTION OF SHRI N.S. KALE LEARNED SENIOR ADVOCATE THAT THERE IS NO NEX US BETWEEN THE RAID CONDUCTED IN THE HOUSE OF PETITIONERS SON AND PETITIONERS INVOLVEMENT IN THE MATTER BECOMES RELEVANT. THERE ARE VARIOUS ASPECTS OF THE MATTER WHICH REQUIRES PROPER ENQUIRY AND SCRUTINY AND WITHOUT DOING SO ACTION TAKEN IN THE MATTER IS NOTHING BUT AN ARBITRARY AND UNREASONABLE ACTION BASED ON PRESUMPTIONS AND ASSUMPTION AND THEREFORE SUC H AN ACTION CANNOT BE SUSTAINED. IT WAS SUBMITTED THAT THE APPEAL FILED BY THE STATE GOVERNMENT AGAINST THIS ORDER OF HON'BLE MADHYA PRADESH HIGH COURT WAS DISPOSED OFF BY THE HON'BLE HIGH COURT VIDE ORDER DT. 23.7.2009 . ATTENTION WAS DRAW N TOWARDS COPY OF THE JUDGEMENT. O N THE BASIS OF THE JUDGEMENT IT WAS ARGUED THAT THE CONTENTION OF THE COUNSEL OF THE STATE GOVERNMENT THAT HUGE CASH AMOUNT WAS RECOVERED FROM THE RESIDENCE OF ASSESSEE AND OTHER PROPERTIES DURING THE COURSE OF SEARCH WAS RECORDED AT PARA 3 OF THE JUDGEMENT AND EVEN AFTER CONSIDERING THE ABOVE FACT ON RECORD THE APPEAL FILED BY THE STATE GOVERNMENT OF MADHYA PRADESH WAS DISMISSED. THIS ORDER HAS NOT BEEN CHALLENGED BY THE STATE GOVERNMENT OF MADHYA PRADESH AND HAS ACHIEVED FINALITY. PERUSAL OF THE JUDGEMENT WOULD INDICATE THAT INSPITE OF ALMOST TWO YEARS AFTER THE SEARCH THE STATE GOVERNMENT HAS NOT FOUND OR BROUGHT TO THE NOTIC E OF THE HIGH COURT ANY ADVERSE MATERIAL AGAINST THE ASSESSEE. THUS IT WAS VEHEMENTLY CONTENDED THAT ON THE BASIS OF THE JUDGEMENT IT CAN PRIMA FACIE BE CONCLUDED THAT THE CASH FOUND DURING THE SEARCH DOES NOT BELONG TO THE ASSESSEE. THEREFORE ASSESSIN G THE SAME AT THE 66 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) HANDS OF THE ASSESSEE AS UNDISCLOSED INCOME BY THE AO IS HIGHLY UNJUSTIFIED. BOTH THE ORDERS OF THE HON'BLE HIGH COURT WERE SUBMITTED BEFORE THE AO BUT THE AO IGNORED THE ORDERS. EVEN RELIANCE WAS PLACED ON THE DECISION OF THE HON'BLE S UPREME COURT IN THE CASE OF DSP CHENNAI VS. K. INBASAGARAN REPORTED IN 1 SCC 420 (2006). IT WAS POINTED OUT THAT THIS DECISION WAS REFERRED BEFORE THE CIT(A) BUT CIT(A) IGNORED THE SAME. THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT IS SQUARELY APPLIC ABLE TO THE FACTS IN THE CASE OF THE ASSESSEE AND THUS IT WAS CONTENDED THAT THE ADDITIONS MADE BY THE AO IS UNJUSTIFIED. RELIANCE WAS ALSO PLACED ON THE FOLLOWING DECISIONS : I) V.K. BRAHMANKAR VS. JCIT 90 TTJ (IND) 821 (2004) II) CIT VS. SMT. P.K. NOORJAHAN 237 ITR 570 (SC) (1999) III) CIT VS. DAULAT RAM RAWATMULL 87 ITR 349 (SC) IV) KRISHNANAND VS. STATE OF M.P AIR 1977 (SC) 796 53. IT WAS ALSO CONTENDED THAT THE ASSESSEE IS PRIMARILY PERFORMING MINISTERIAL ACT AND HAS NO SAY IN DETERMINING THE PRICES OF THE COMMODITY TO BE SUPPLIED AND ANY QUANTITY THEREOF OR PAYMENT FOR SUPPLIES. ON THE ACTIVITY PERFORMED BY THE ASSESSEE IT IS INCO NCEIVABLE TO SAY THAT THE ASSESSEE CAN BE RECIPIENT OF ALLEGED COMMISSION AS CONCLUDED BY THE AO. IT WAS POINTED OUT THAT THE GOVERNING COUNCIL CONSISTS OF VARIOUS PERSONS EXECUTIVE COMMITTEE CONSISTS OF 5 PERSONS AND FINANCIAL POWERS ARE WITH THE DIREC TOR. EVEN OUR ATTENTION WAS DRAWN TOWARDS NOTE SHEET WHICH INDICATES THAT ALL THE TRANSACTIONS ARE UNDER THE APPROVAL OF COMMISSIONER. FOR THIS REFERENCE WAS INVITED TO PG. 159 161 168 AND 171 OF PAPER BOOK. IT WAS POINTED OUT THAT DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS THE ASSESSEE EXPLAINED THAT THE AFORESAID NOTINGS ON THE LOOSE PAPERS ARE SCRIBBLINGS BUDGET NOTINGS MADE IN COURSE OF REPORTING OF FIGURES BY AND TO ASSESSEE FROM THE JUNIORS/SENIORS AND IT IS NOT A CASE OF ANY 67 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) COMMISSION TO BE RECEIVED BY THE ASSESSEE AND NOTINGS ARE NO EVIDENCE OF RECEIPT OF ANY MONEY BY THE ASSESSEE. 54. IT WAS SUBMITTED THAT RECEIPT OF COMMISSION HAS TO BE BILATERAL BETWEEN PAYEE AND RECIPIENT. THERE IS NO EVIDENCE ON RECORD TO SHOW THAT ANY PAYEE HAS PAID COMMISSION TO ASSESSEE. THE A.O. WHILE MAKING SUCH SERIOUS CHARGES ON ASSESSEE HAS NOT VERIFIED WHETHER ANY PARTY HAS PAID ANY ILLEGAL GRATIFICATION TO ASSESSEE AND ARBITRARY CONCLUSIONS DRAWN FROM THE LOOSE PAPERS WHICH ARE IN THE NATURE OF DUMB DOCU MENT IS TOTALLY UNJUSTIFIED. 55. HE FURTHER SUBMITTED THAT THE NAMES OF THE PARTIES WHICH ARE APPEARING IN THE LOOSE PAPERS HAVE BEEN IDENTIFIED BY A.O. ALL IDENTIFIED PARTIES ARE ASSESSED TO INCOME TAX AND ARE BIG SUPPLIERS. THE AFORESAID PERSONS ARE AS SESSED TO INCOME TAX AND IN NO CASE OF WHOSE NAMES ARE APPEARING HAVE BEEN VERIFIED BY A.O. TO BRING EVIDENCE ON RECORD AS REGARD TO ANY PAYMENT OF MONEY BY SUCH PERSONS. ON THE CONTRARY ASSESSMENTS FRAMED AT THE HANDS OF THE RESPECTIVE PERSONS HAVE BEEN ACCEPTED AS IN NO CASE THERE HAS BEEN ANY ADDITION MADE BY REVENUE FOR ANY ILLEGAL GRATIFICATION PAID BY SUCH PERSONS TO ASSESSEE. 56. IT WAS CONTENDED THAT THE LOOSE PAPERS HAVE BEEN EXPLAINED TO BE NOTINGS MADE FOR REPORTING THE TRANSACTIONS AS REGARD TO EXECUTION OF ORDERS OF SUPPLY GIVEN BY M.P. STATE GOVERNMENT TO SUCH PARTIES. THE DETAILED EXPLANATION GIVEN BEFORE A.O. AND CIT(A) CLEARLY EXPLAINED THE SEIZED DOCUMENTS AND THERE REMAINS NOTHING FOR WHICH ANY ADVERSE VIEW NEEDS TO BE TAKEN FOR THE PUR POSE OF MAKING ANY ADDITION. THAT IT IS SETTLED PROPOSITION OF LAW THAT FOR THE PURPOSE OF MAKING ADDITION AT THE HANDS OF ASSESSEE THERE SHOULD BE EVIDENCE ON RECORD TO THE EFFECT THAT ASSESSEE HAS RECEIVED CERTAIN AMOUNT AND THE SAME IS IN THE NATURE O F INCOME CHARGEABLE TO TAX. ONUS TO BRING SUCH EVIDENCE ON RECORD IS CLEARLY ON REVENUE. IN THE CASE OF ASSESSEE REVENUE HAS NOT BROUGHT ANY 68 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) EVIDENCE ON RECORD TO SHOW THAT ASSESSEE IS IN RECEIPT OF ANY MONEY. QUESTION OF MAKING ASSESSMENT OF ANY INCOME A T THE HANDS OF ASSESSEE IS THUS UNJUSTIFIED AND UNSUSTAINABLE. RELIANCE WAS PLACED IN THIS REGARD ON THE DECISION OF APEX COURT IN THE CASE OF PARIMISETTI SEETHARAMA VS. CIT REPORTED AT 57 ITR 532 (SC). 57. HE FURTHER SUBMITTED THAT NOTINGS MADE ARE DUMB DOCUMENTS THAT NOTING MADE ARE NO EVIDENCE TO SHOW THAT ASSESSEE HAS RECEIVED COMMISSION AS CONCLUDED BY A.O. IN THE COURSE OF SEARCH NO CORROBORATIVE EVIDENCE WAS FOUND TO SHOW THAT ASSESSEE IS IN RECEIPT OF ANY COMMISSION FROM SUPPLIERS OF THE GOODS. A .O IN THE COURSE OF ASSESSMENT PROCEEDINGS HAS ALSO NOT BROUGHT ANY EVIDENCE ON RECORD T O DEMONSTRATE THAT ASSESSEE WAS RECIPIENT OF ANY COMMISSION FROM SUPPLIERS IN RESPECT TO AMOUNT COMPUTED IN ASSESSMENT ORDER. THE PERUSAL OF DOCUMENT WOULD INDICATE THA T AFORESAID SEIZED DOCUMENTS ARE DUMB DOCUMENTS DESERVING NO CREDENCE IN THE ABSENCE OF ANY CORROBORATIVE EVIDENCE ON RECORD TO ASSESS ANY UNDISCLOSED INCOME AT THE HANDS OF ASSESSEE. IN THE CASE OF ASSESSEE AO HAS MADE ADDITION FOR ALLEGED COMMISSION HAV ING BEEN RECEIVED BY ASSESSEE. THE EVIDENCE ON RECORD DOES NOT INDICATE THAT ASSESSEE HAS RECEIVED ANY COMMISSION SEIZED DOCUMENTS DOES NOT INDICATE NAME OF ASSESSEE OR RECEIPT OF COMMISSION BY ASSESSEE. THE AO HAS NOT ENQUIRED FROM ANY PERSON AS TO FROM WHOM ALLEGED COMMISSION COULD HAVE BEEN RECEIVED. THE DOCUMENTS ON THE BASIS OF WHICH ADDITION IS MADE ARE NOT AT ALL SPEAKING DOCUMENTS OR EVIDENCE TO ASSESS ANY UNDISCLOSED INCOME ON ACCOUNT OF COMMISSION AT THE HANDS OF ASSESSEE. 58. IT WAS CONTENDED THAT THE ADDITION OF RS.124 LACS HAS BEEN DELETED BY HONBLE CIT(A) FOR THE REASONS DISCUSSED AT PAGE 72 AS AFORESAID SUM HAS ALREADY BEEN ASSESSED AT THE HANDS OF SHRI RAJESH RAJORA FOR ASSESSMENT YEAR 2007 - 08 WHICH HAS BEEN CONFIRMED IN APPELLATE PROCEEDI NGS OF SHRI RAJESH 69 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) RAJORA. THEREFORE THE ADDITION OF THE AFORESAID SUM AGAIN AT THE HANDS OF ASSESSEE IS UNJUSTIFIED AND UNSUSTAINABLE. 59. IT WAS SUBMITTED THAT THE ADDITION OF RS.1 23 000/ - MADE BY AO IS NOT ON ANY BASIS AND IS ALSO NOT BASED ON ANY SE IZED DOCUMENT. THERE IS NO DISCUSSION FOR THE SAME IN ASSESSMENT ORDER. THE CIT(A) AT PAGE 101 OF THE APPELLATE ORDER AFTER DISCUSSING THE ABOVE FACTUAL POSITION HAS DELETED ADDITION. THE CIT(A) HAS RIGHTLY DELETED ADDITION IN THE ABSENCE OF THERE BEING AN Y EVIDENCE ON RECORD FOR THE SAME. THE LEARNED CIT(A) AT PAGE 75 & 76 HAS REFERRED TO WORKING OF LOOSE PAPERS AT RS.115 LACS AND RS.435 LACS. PERUSAL OF ASSESSMENT ORDER AT PAGE 15 WOULD INDICATE THAT AO ALTHOUGH REFERRED TO WORKING OF LOOSE PAPER AT RS.1 15 LACS BUT NO ADDITION FOR SAME WAS MADE. THE FIGURE OF RS. 555 LACS WAS COMPUTED BY AO AT PAGE 16 WHICH COMPRISES WORKINGS OF RS.384 LACS AND RS.171.85 LACS. FOR THIS ATTENTION WAS DRAWN TO PAGE 16 OF ASSESSMENT ORDER. 60. HE FURTHER SUBMITTED THAT IN REMAND REPORT ALSO AO HAS NOT REFERRED TO WORKING OF RS. 115 LACS FOR THE PURPOSE OF ADDITION TO BE MADE. CIT(A) AT PAGE 79 HAS OBSERVED THAT THERE IS NO CORROBORATIVE EVIDENCE THAT PIECE BILLS WERE SUBMITTED. THE OBSERVATION IS FACTUALLY INCORRECT. WRITTEN SUBMISSION BEFORE CIT(A) CLEARLY DEMONSTRATES THAT MANY BILLS ARE RAISED BY SUPPLIERS (P - 153 154 & 169). THE CIT(A) WHILE CONFIRMING THE ADDITION ON THE BASIS OF LOOSE PAPERS HAS DIRECTED THE AO TO MAKE ADDITION IN THE ASS ESSMENT YEAR 2007 - 08 AT RS.294 LACS RS.155 LACS AND RS.1.18 LACS. THE CIT(A) HAS NOT GIVEN ANY NOTICE OF ENHANCEMENT TO ASSESSEE AS IS EVIDENT FROM THE DISCUSSION MADE IN THE APPELLATE ORDER BEFORE GIVING DIRECTION OF ENHANCEMENT IN THE CASE OF ASSESSEE. FOR ASSESSMENT YEAR 2007 - 08 NO SUCH ADDITION HAS BEEN MADE BY A.O. THE ENHANCEMENT OF INCOME IN ASSESSMENT YEAR 2007 - 08 WITHOUT ISSUING NOTICE OF ENHANCEMENT IS LEGALLY UNSUSTAINABLE AND DESERVES TO BE DELETED. THE CIT(A) DIRECTED TO MAKE ADDITION OF RS. 155 LACS FOR ASSTT. YEAR 2007 - 08 EVEN THOUGH 70 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) SAME WAS NEVER MADE BY AO IN THE ASSESSMENT FRAMED U/S 153A FOR ASSTT. YEAR 2008 - 09 OR ASSTT. YEAR 2007 - 08. R ELIANCE WAS PLACED ON THE FOLLOWING DECISION S : I) ITAT ORDER IN ITA NO.3159/MUM/2012 IN THE CASE OF ANUS UYA SUREN MIRCHANDANI VIDE ORDER DATED 13/11/2013. II) 59 TTJ (MUM.) 574 ACIT VS. SHAILESH S. SHAH (P - 44 TO 53) III) 296 ITR 619 (DEL.) CIT VS. GIRISH CHAUDHARY (P - 56 TO 58) IV) 10 DTR (DEL)(TRIB.) 507 SONAL CONSTRUCTIONS VS. DCIT (P - 64 TO 74) V) 293 ITR 43 (D EL.) CIT VS. SM. AGGARWAL (P - 75) VI) 5 DTR (JAB.) (TRIB.) 202 ACIT VS. SATYAPAL WASSAN (P - 90 TO 96) VII) 89 TTJ (CAL) 917 JCIT VS. WEST BENGAL TRADING AGENCY (P - 100) VIII) 91 TTJ (DEL.) 938 N.K. MELHAN VS. DCIT (P - 106 TO 110) IX) 106 TTJ (RANCHI) 422 ACIT VS. A SHOK KUMAR VIG (P - 115 TO 118) X) (2008) 307 ITR 137 (GUJ.) CIT VS. MAULIKKUMAR K. SHAH (P - 129 132 133) XI) BOMBAY HIGH COURT ORDER IN ITA NO.1224 OF 2011 IN THE CASE OF M/S. SUPREME INDUSTRIES LTD. VIDE ORDER DATED 17/1/2013. (P - 135 & 137) XII) AIR 1998 (SC) 1406 CENTRAL BUREAU OF INVESTIGATION VS. V.C. SHUKLA (P - 151) XIII) 294 ITR 49 (SC) CIT V/S P.V. KALYANASUNDARAM (P - 173) (VOL - I) XIV) 57 ITR 532 (SC.) PARIMISETTI SEETHARAMAMMA VS. CIT (P - 36) XV) 98 TTJ (ASR) 705 ITO VS HANUMAN PODDAR & ORS. (P - 09) (VOL - V) XVI) 92 TTJ (CTK) 464 ACIT VS PRASANT AHLUWALLA (P - 12) (VOL. - V) 71 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) XVII) 39 CCH 034 (HYD.)(TRIB) DCT VS K. BABURAO (P - 25) (VOL. - V) 61. OUR ATTENTION WAS DRAWN TO THE LOOSE PAPERS WHICH HAVE BEEN PLACED AT PG. 104 - 114 OF THE PAPER BOOK. IT WAS POINTED OUT BY REFERRING TO THESE PAGES THAT THE AO HAS INFERRED AS IF THE ASSESSEE HAS RECEIVED THE COMMISSION FROM THE SUPPLY BEING MADE TO M.P HEALTH AND FAMILY WELFARE. IT WAS POINTED OUT THAT THE DIRECTORATE OF PUBLIC HEALTH AND FAMILY WELFARE EXECUTES VARIOUS PROGRAMMES INS TITUTED BY THE STATE GOVERNMENT OF MADHYA PRADESH AS WELL AS MONITORS PUBLIC HEALTH AND FAMILY WELFARE SCHEMES WITHIN THE STATE OF MADHYA PRADESH. THE PROCEDURE FOR PROCUREMENT OF MEDICINES/HOSPITAL EQUIPMENT AND OTHER ARTICLES ARE MADE THROUGH M.P. LAGHU UDYOG NIGAM WHICH IS A CORPORATION FORMED BY THE STATE GOVERNMENT AND OPERATES UNDER THE AEGIS OF MINISTRY OF COMMERCE AND INDUSTRY OF STATE OF M.P. 62. IT WAS STRESSED THAT OUT OF THE ADDITION MADE BY THE AO PART OF THE ADDITION WAS SUSTAINED BY CIT(A ) IN A.Y 2007 - 08. ONLY A SUM OF RS.267.54 LACS HAS BEEN CONFIRMED IN A.Y 2008 - 09. HAD THE ASSESSEE EARNED ANY INCOME THE ASSESSEE WOULD HAVE INVESTED THE INCOME AND THERE MUST HAVE BEEN EVIDENCE FOUND IN THIS REGARD. INVESTMENTS IN THE COMPANIES OWNED BY WAY OF SHARE APPLICATION IN WHICH ASSESSEES WIFE AND SON ARE DIRECTORS HAVE NOT BEEN MADE IN A.Y 2007 - 08 AND FOR THIS ATTENTION WAS DRAWN TOWARDS ORDER OF CIT(A) AT PG. 34 & 35 IN RESPECT OF M/S. GAJANAN DISTRIBUTORS AND DEVELOPERS PVT. LTD. AND AT PG. 45 IN RESPECT OF M/S. SHREE VIGNESH WAREHOUSE AND DISTRIBUTORS PVT. LTD. IT WAS ALSO POINTED OUT THAT DURING THE A.Y 2007 - 08 THE ASSESSEES SON SHRI GAURAV SHARMA HAS SURRENDERED A SUM OF RS. 35 LACS AND AO ONLY ASSESSED RS. 1 LAC SUBSTANTIVELY IN THE H ANDS OF THE ASSESSEE. THUS THE SURRENDER MADE DURING A.Y 2007 - 08 TO THE EXTENT OF RS. 34 LACS HAS DULY BEEN ACCEPTED AS THE INCOME BELONGING TO SHRI GAURAV SHARMA SON OF THE ASSESSEE ON THIS BASIS 72 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) ITSELF NO ADDITION COULD HAVE BEEN MADE IN THE CASE OF THE ASSESSEE IN THE ASSESSMENT YEAR 2007 - 08 O R 2008 - 09. 63. THE LD. DR ON THE OTHER HAND RELIED ON THE ORDER OF THE AO AND REFERRING TO PG. 104 - 114 OF THE PAPER BOOK IT WAS CONTENDED THAT INFERENCE DRAWN BY THE AO IS BASED ON THE LOOSE PAPERS SEIZED DURING THE COURSE OF THE SEARCH. THESE PAPERS ARE IN THE HANDWRITING OF THE ASSESSEE AND ASSESSEE IS BOUND TO GIVE EXPLANATION IN RESPECT OF THESE PAPERS. REFERRING TO PG. 12 - 14 OF THE ASSESSMENT ORDER WHICH CONTAINS SCANNED COPY OF LPS 1/1 (FRONT AS WE LL AS BACK SIDE) THE NAMES AND FIGURES ARE GIVEN. FIRST COLUMN REPRESENTS THE NAME OF THE PARTIES SECOND COLUMN REPRESENTS THE VALUE OF THE ORDER AND THIRD COLUMN REPRESENTS THE PERCENTAGE OF COMMISSION AND SIXTH COLUMN REPRESENTS THE AMOUNT RECEIVED BY THE ASSESSEE. IN RESPECT OF SUM OF RS. 61 74 000/ - AND RS.1 10 57 000/ - IT WAS POINTED OUT THAT THE NAME IS WRITTEN AS NANDA AND SHRI ASHOK NANDA IS THE DIRECTOR OF HIPL AND A CLOSE ASSOCIATE OF THE ASSESSEE. THEY HAVE SUPPLIED POTASSIUM ANALYZERS AND H - KITS THROUGH HIS CONCERN AND IS VERIFIABLE FROM APPROVAL LETTER OF LAGHU UDYOG NIGAM NO. 165122 DT. 27.2.2006. ORDERS WERE EXECUTED DURING FINANCIAL YEAR 2006 - 07. IN RESPECT OF ITEM NO. 3 WHICH CONSISTS OF NAMES OF GAMBHIR IT WAS SUBMITTED THAT HE IS AS SOCIATED WITH MEDIFIX AGENCY WHICH SUPPLIED SHADOWLESS CEILING LIGHTS AND OPERATION TABLE OF RS. 1.26 CRORES AND THE FIGURE OF RS.1 26 49 972/ - RELATES TO GAMBHIR WHO SUPPLIED DEFIBRILLATOR WITH MONITOR RECORDER WORTH RS. 29.87 LACS AND ANESTHESIA MACHINE WORTH RS.243 LACS AS PER APPROVAL LETTER OF LUN DT. 27.2.2006 AND THESE WERE SUPPLIED IN A.Y 2007 - 08. ANOOP YADAV THROUGH HIS CONCERN APOORVA BIOCARE SUPPLIED X - RAY MACHINES WORTH RS. 95.76 LACS AND CATTERY MACHINE WORTH RS. 1 10 20 500/ - TO THE DEPT. OF HEALTH IN F.Y 2006 - 07. AGRAWAL + JOSHI THROUGH ITS CONCERN SUPPLIED RUBBERIZED WHITE MATTRESSES OF RS. 22.89 LACS AND CHEMISTRY ANALYZER OF RS. 53.97 LACS DURING F.Y 2006 - 07. JAVED ALLIANZE THROUGH HIS CONCERN M/S. ALLIANZE BIO MEDICAL SYSTEMS WAS 73 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) GIVEN ORDER FOR SUPPLY OF X - RAY MACHINES AND VARIOUS KITS FOR RS. 37.77 LACS DURING F.Y 2006 - 07. IT WAS CONTENDED THAT CIT(A) HAS RIGHTLY CONCLUDED THAT THE AMOUNT HAS BEEN RECEIVED BY THE ASSESSEE AND THEREFORE COLUMN NO. 7 DOES NOT HAVE ANY ENTRY. IT W AS ALSO POINTED OUT THAT THIS IS CO - RELATED WITH PG. 6 OF LPS 1/1. EVEN THOUGH IN COLUMN 3 AT PG. 1 25 & 20 HAS BEEN JOTTED AND IN COLUMN 6 NO VALUE HAS BEEN MENTIONED IN THE CASE OF NANDAJI BUT THIS WAS MADE AS THE FIGURES WERE NOT FINALIZED AND AS SOON AS THESE WERE FINALIZED @ 28% AND 25% THEY WERE PUT AT SR. NO. 24 BACKSIDE OF PG. 6 OF LPS 1/1. FOR THIS ATTENTION WAS DRAWN TO PG. 111. IN RESPECT OF THE OTHER PERSONS SURESH MODI AND MANISH SINGH ALSO SIMILAR PERCENTAGE AS NOTED ARE COMPARABLE. S IMILARLY IT WAS POINTED OUT THAT THE JOTTINGS AT PG. 1 OF LPS 1/1 IN COLUMN 4 & 6 HAS CORRESPONDING LINK WITH THE JOTTING MADE ON THE BACKSIDE OF PG. 1 AND FOR THIS ATTENTION WAS DRAWN TO PG. 105 OF THE PAPER BOOK. EVEN THOUGH THERE ARE LITTLE BIT DIFFER ENCES IN SOME FIGURES IT WAS POINTED OUT THAT THE FIGURE OF 9.5 ENTERED IN COLUMN 4 AGAINST ANOOP YADAV TALLIES WITH THE ENTRY OF 2.5 + 2 +3.5 + 1.5 APPEARING ON THE BACKSIDE OF THE PAGE. SIMILARLY ENTRIES IN THE CASE OF AGRAWAL + JOSHI ALSO TALLIED WIT H 6.5. IT WAS POINTED OUT THAT THERE ARE OTHER INSTANCES OF CONNECTIVITY AND CONTINUITY OF THE JOTTINGS MADE IN FR ONT AND BACK SIDE OF THE PAGE LIKE IN THE CASE OF JAVED ALLIANZE AMIT AND SCHILLER. HE FURTHER SUBMITTED THAT CIT(A) HAS RIGHTLY SUSTAINED THE ADDITION TO THE EXTENT OF RS. 115.47 LACS ON THE BASIS OF FRONT PORTION OF PG. 1 OF LPS 1/1. SIMILARLY ON THE BASIS OF BACK SIDE OF PG. 1 OF LPS 1/1 IT WAS POINTED OUT THAT AFTER GOING THROUGH THE SEIZED PAPER AS APPEARING AT PG. 80 PAPER BOOK 105 CIT HAS CORRECTLY TOOK THE VIEW THAT U.P. SINGH TIWARJI GAMBHIR AMIT YADAV BHARGAVA JAVED KHAN ALLIANZE JBP MAHESHWARI SHARMAJI PLASTI SURGE AGRAWAL + JOSHI YOGESH GUPTA SHARIN SHAILENDRA TIWARI MAHESHWARIJI ASHOK SAHA KUK MADE SUPPLIES TO THE DEPARTMENT OF HEALTH. FURN WRITTEN IN THE PAGE REFERRED TO SUPPLIERS OF HOSPITAL FURNITURE AND OFFICE FURNITURE AND JOTTINGS LEADS TO INFERENCE OF SPECIFIC AMOUNT CHARGED ON WORK ORDERS ALLOTTED TO THEM. THESE PEOPLE 74 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) SUPPLIED ROAP GUAZE BEDS ETC. IN RESPECT OF LOTUS WORK ORDER OF RS. 11.08 LACS WERE APPROVED FOR BHAGWATI WORK ORDER FOR RS. 34.11 LACS WERE APPROVED. CHAKACHAK HAS ALSO SUPPLIED FURNITURE . JOTTING ON THE BACK PAGE IS IN CONTINUATION OF THE FRONT SIDE OF THE PAGE. THE FIGURES AR E WRITTEN IN LACS. THERE IS NO AMBIGUITY IN THIS REGARD. THIS CHARGE OF 10% ON WORK VALUE OF THE ORDER OF FURNITURE CLAIMED FROM BHAGWATI INTERIOR I.E. RS. 3.4 LACS ON THE VALUE OF THE ORDER OF RS. 34.04 LACS. THESE RATES ARE INCONSISTENT WITH THE RATES CHARGED AT PG. 12 & 13 OF LPS 1/1. SIMILARLY OUR ATTENTION WAS DRAWN TO PG. 4 AND 5 OF LPS 1/1 WHICH IS AVAILABLE AT PG. 106 TO 108 OF THE PAPER BOOK AND IT WAS STATED THAT THE PAPER HAS BEEN WRITTEN BY THE ASSESSEE AND BACK PAGE 4 IS CO - RELATED WITH TH E INFORMATION RECEIVED FROM THE STATE GOVERNMENT AND FRONT SIDE OF PG. 4 CONTAINS HAND WRITTEN INFORMATION. BLOOD BANK RELIEF 2.2 X 4 CORRESPONDS TO THE ISSUE OF CHEQUE OF RS.2 20 87 520/ - DT. 27.1.2007 AS ADVANCE TOWARDS PURCHASE OF BLOOD BANK REFRIGER ATOR. ATTENTION WAS LASO DRAWN TO ANOTHER TRANSACTION AT FRONT PAGE OF PG. 4 WRITTEN AS CHC MEDICAL KITS 2.6 X 3.5. IT WAS POINTED OUT THAT THIS REFERRED TO THE BACKSIDE CHEQUE DT. 14.1.2007 FOR RS.266 LACS. SIMILARLY PG. 4 CONTAINS GOI SPECIAL FU NDS FOR H WALL IS CO - RELATED WITH CHEQUE DT. 12.2.2007 FOR RS. 28 80 000/ - . THEREFORE IT WAS CONTENDED THAT THE JOTTINGS ON THESE PAPERS ARE NOT ROUGH WORKING AND THE DEPARTMENT HAS ISSUED SIMILAR AMOUNT CHEQUE TO THE RESPECTIVE SUPPLIERS. IT WAS POINT ED OUT THAT JOTTINGS AT PG. 4 & 5 OF LPS 1/1 ARE RELATED TO EACH OTHER AS ORDERS ARE MOSTLY RELATED TO RCH HAS BEEN GIVEN IN THEM. ON THE BACKSIDE OF PG. 4 04.03.2007 HOLI HAS BEEN WRITTEN. IT MEANS THAT ON THE DAY OF HOLI THE TRANSACTIONS MENTIONED AT PG. 4 HAVE TAKEN PLACE. THAT MEANS THE ASSESSEE HAS RECEIVED ILLEGAL GRATIFICATION ON THE HOLIDAY AS ON THE SAME PAGE THE NET TOTAL OF SUM OF RS. 155 LACS HAS BEEN GIVEN WITH THE DATE 4.3.2007 8.3.2007 10.3. 2007 13.3.2007 AMOUNTING TO 70 25 30 AN D 30 RESPECTIVELY. THESE FIGURES REPRESENT LACS. REFERRING TO THE BACKSIDE OF PG. 5 IT WAS POINTED OUT THAT THE DATES 9.7.2007 29.7.2007 14.8.2007 AND 15.8.2007 ARE MENTIONED. THE TOTAL OF THESE 75 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) AMOUNTS COMES TO RS. 267.54 LACS. THESE ENTRIES ARE ON THE BASIS OF PG. 4 AND 5 AND REPRESENT THE COMMISSION. THUS IT WAS CONTENDED THAT CIT(A) HAS RIGHTLY CONFIRMED THE ADDITION OF RS. 267.54 LACS. THE AO HA S INCORRECTLY ADDED RS.266.54 LACS. IF THE ASSESSEE WAS NOT RECEIVING COMMISSION WHY THE ASSESSEE W OULD HAVE MAINTAINED THESE LOOSE PAPERS ? AO AS WELL AS CIT(A) HAVE RIGHTLY INFERRED THAT THE AMOUNT REPRESENTS COMMISSION RECEIVED BY THE ASSESSEE FROM VARIOUS SUPPLIERS. 64. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS ALONGWITH THE ORDER OF THE TAX AUTHORITIES AS WELL AS THE CASE LAWS AND THE LOOSE PAPERS REFERRED TO BY BOTH THE SIDES BEFORE US DURING THE COURSE OF THE HEARING. T HE ADDITION IN THE A.Y 2007 - 08 AND 2008 - 09 HAVE BEEN CHALLENGED BEFORE US BY WAY OF GROUND NOS. 5 TO 9 IN A.Y 2007 - 08 AND GROUND NOS. 8 TO 10 IN A.Y 2008 - 09 . T HE ADDITIONS HAVE BEEN MADE ON THE BASIS OF LOOSE PAPERS SEIZED DURING THE COURSE OF THE SEARCH AND INFERENCE HAS BEEN DRAWN BY THE REVE NUE THAT THESE LOOSE PAPERS CONTAINED THE INCOME EARNED BY THE ASSESSEE THROUGH GRATIFICATION BY WAY OF COMMISSION ON THE SUPPLY OF MEDICAL INSTRUMENT FURNITURE AND OTHER GOODS TO THE HEALTH & WELFARE DEPT . OF GOVERNMENT OF MADHYA PRADESH. THE LOOSE PAPE RS ON THE BASIS OF WHICH THE ADDITIONS WERE MADE AND SEIZED DURING THE COURSE OF THE SEARCH ARE PLACED IN THE PAPER BOOK FROM PG. 104 - 114. THE AO WE NOTED ON THE BASIS OF THE LOOSE PAPERS MADE THE FOLLOWING ADDITIONS BY DRAWING THE INFERENCE ONLY IN A.Y 2008 - 09 : AS PER LPS 1/1 - RS. 115 LACS AND AS PER BACK OF PG. 1 LPS 1/1 - RS. 435 LACS BUT TOTAL ADDITION IN COMPUTATION WAS TAKEN AT RS. 585 LACS INSTEAD OF RS.550 LACS FOR BOTH. AS PER PG. 4 & 5 LPS 1/1 - RS. 2 67 54 000/ - WAS ADDED BUT IN THE COMPUTATION IT WAS TAKEN AT RS.2 66 54 000/ - 76 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) AS PER PG. 6 LPS 1/1 - RS. 333.83 LACS AS PER BACK OF PG. 6 LPS 1/1 - RS.97.83 LACS AS PER PG. 12 LPS 1/1 - RS.11 18 400/ - AS PER PG. 13 LPS 1/1 - RS. 1 23 000/ - AS PER BACK OF PG. 3 LPS 1/7 - RS.1 01 23 93 5/ - BUT IN THE COMPUTATION IT WAS TAKEN AS RS.1 24 00 000/ - AGAINST THESE ADDITIONS WE NOTED THAT THE ASSESSEE WENT IN APPEAL BEFORE CIT(A) AND CIT(A) DELETED THE FOLLOWING ADDITIONS IN A.Y 2008 - 09 - I) RS. 5 85 00 000/ - II) RS.3 33 83 000/ - III) RS. 97 83 000/ - IV) RS.11 18 400/ - V) RS. 1 23 000/ - AND VI) RS. 1 24 00 000/ - BUT SUSTAINED ADDITION OF RS.2 67 54 000/ - AND CIT(A) DIRECTED AO TO MAKE THE FOLLOWING ADDITIONS IN A.Y 2007 - 08 : I) RS.2 94 00 000/ - OUT OF ADDITION MADE BY AO AT RS.5 85 00 000/ - ON THE BASIS OF PG. 1 AND ITS BACK LPS 1/1. II) RS.1 55 00 000/ - ON THE BASIS OF PG. 4 LPS 1/1 III) RS.1 18 400/ - ON THE BASIS OF PG. 12 AND 13 THE REVENUE HAS COME IN APPEAL BEFORE US IN A.Y 2008 - 09 FOR DELETION OF FOLLOWING ADDITIONS : I) RS. 1 23 000/ - MADE BY AO ON THE BASIS OF PG. 13 LPS 1/1 77 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) II) RS.1 24 00 000/ - (ACTUAL ADDITION AS PER ASSESSMENT ORDER PG. 30 WAS RS.1 01 23 935/ - BUT IN THE COMPUTATION TAKEN AT RS.1 24 00 000/ - ) MADE AS PER BACKSIDE OF PG. 6 LPS 1/7 III) RS.2 91 00 000/ - MADE ON THE BASIS OF PG. 1 & BACKSIDE LPS 1/ 1 IV) RS.3 33 83 000/ - AND RS.97 83 000/ - MADE ON THE BASIS OF PG. 5 & 6 LPS 1/1 V) RS.10 00 000/ - MADE ON THE BASIS OF LOOSE PAPER MARKED PG. 12 LPS 1/1. 65. THE GROUND S TAKEN BY THE REVENUE HA VE BEEN DISMISSED BY US IN THE PRECEDING PARAGRAPHS FROM PARA 3 3 T O 4 1 . WE NOTED THAT EXCEPT THE SUSTENANCE OF ADDITION OF RS.2 67 54 000/ - DURING THE A.Y 2008 - 09 REST OF THE ADDITIONS WERE DIRECTED BY CIT(A) TO BE MADE IN A.Y 2007 - 08. 66. WE ALSO NOTED THAT WHILE MAKING THE ADDITION THE AO HAS DRAWN INFERENCE THAT THE ASSESSEE HAS TAKEN ILLEGAL GRATIFICATION BY WAY OF COMMISSION ON THE SUPPLY OF VARIOUS ITEMS TO THE M.P GOVERNMENT HEALTH DEPT. ALTHOUGH THE SEARCH HAS TAKEN PLACE AT THE RESIDENTIAL PREMISES BELONGING TO THE SON OF THE ASSESSEE BUT THE AO PRESUMED T HAT THE RAID WAS CONDUCTED IN THE HOUSE OF THE ASSESSEE. WHEN THE ASSESSEE WENT BEFORE THE HON'BLE MADHYA PRADESH HIGH COURT BY WAY OF WRIT FOR QUASHING HIS COMPULSORY RETIREMENT ORDER THE HON'BLE HIGH COURT UNDER PARA 21 OF ITS ORDER DT. 14.11.2008 OBSE RVED AS UNDER : PARA 21 : EVEN THE COMMUNICATION MADE BY THE INCOME TAX DEPARTMENT TO THE EFFECT THAT THE RAID WAS CONDUCTED I N THE HOUSE OF THE PETITIONER SEEMS TO BE PRIMA FA CI E INCORRECT AS THE RECORDS AVA ILA B L E IN THE PRESENT CASE SHOWS THAT THE HOUSE BELONGED TO PETITIONERS SON AND THEREFORE THE SEARCH AND SEIZURE CONDUCTED BY THE INCOME TAX DEPARTMENT IS NOT IN THE HOUSE OF THE PETITIONER BUT IS IN THE HOUSE OF HIS SON AND IF THIS FACT IS CONSIDERED THEN THE CONTENTION OF SHRI N.S. KALE LEARNED SENIOR ADVOCATE THAT THERE IS NO NEXUS BETWEEN THE RAID CONDUCTED IN THE HOUSE OF PETITIONERS SON AND PETITIONERS INVOLVEMENT IN THE MATTER BECOMES RELEVANT. THERE ARE VARIOUS ASPECTS OF THE MATTER WHICH REQUIR ES PROPER ENQUIRY AND SCRUTINY AND 78 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) WITHOUT DOING SO ACTION TAKEN IN THE MATTER IS NOTHING BUT AN ARBITRARY AND UNREASONABLE ACTION BASED ON PRESUMPTIONS AND ASSUMPTION AND THEREFORE SUC H AN ACTION CANNOT BE SUSTAINED. FROM THE SAID PARAGRAPH IT IS APP ARENT THAT THE HON'BLE HIGH COURT TOOK THE VIEW THAT THE SEARCH WAS CONDUCTED AT THE PREMISES OF ASSESSEES SON. EVEN WE NOTED THAT THE HON'BLE SUPREME COURT IN THE CASE OF DSP CHENNAI VS. K. INBASAGARAN REPORTED IN 1 SCC 420 (2006) ( SUPRA ) HAS IN THE LAS T PARA OBSERVED AS UNDER : SINCE THE CRUCIAL QUESTION IN THIS CASEWAS OF THE POSSESSION AND THE PREMISES IN QUESTION WAS JOINTLY SHARED BY THE WIFE AND THE HUSBAND AND THE WIFE HAVING ACCEPTED THE ENTIRE RECOVERY AT HER HAND IT WILL NOT BE PROPER TO HOL D HUSBAND GUILTY. THIS FINDING OF THE HON'BLE SUPREME COURT STRENGTHENS THE VIEW OF THE LD. AR THAT IF THE PREMISES IS JOINTLY SHARED BY THE WIFE SON AND THE HUSBAND IT CANNOT BE HELD THAT RECOVERY FROM THE PREMISES BELONGED TO THE HUSBAND. WITH THIS BACKGROUND WE ARE DISPOSING OFF THE GROUNDS TAKEN BY THE ASSESSEE. 6 7 . BEFORE WE GO TO THE MERITS OF THE ADDITION THE ASSESSEE HAS TAKEN IN A.Y 2007 - 08 THE LEGAL GROUND WHICH GOES TO THE JURISDICTION OF CIT(A) IN SUSTAINING THESE ADDITIONS DURING A.Y 2007 - 08. 6 8 . THE LD. AR HAS TAKEN THE PLEA BEFORE US THAT IN A.Y 2007 - 08 EVEN THOUGH THE SAME VERY LOOSE PAPERS WERE DULY EXAMINED BY THE AO BUT NO ADDITION HAS BEEN MADE BY THE AO. CIT(A) ENHANCED THE ASSESSMENT BY DIRECTING THE AO TO MAKE THESE ADDITIONS DURING A.Y 2007 - 08. THE ASSESSEE WAS NOT AFFORDED ANY OPPORTUNITY IN T HIS REGARD. OUR ATTENTION WAS DRAWN TOWARDS THE PROVISION OF SEC. 251(2) WHICH READS AS UNDER : 251(2) - THE COMMISSIONER (APPEALS) SHALL NOT ENHANCE AN ASSESSMENT OR A PENALTY OR REDUCE THE AMOUNT OF REFUND UNLESS THE APPELLANT HAS HAD A REASONABLE OPPORTUNITY OF SHOWING CAUSE AGAINST SUCH ENHANCEMENT OR REDUCTION. 79 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) FROM THE PERUSAL OF THE SAID SUB - SECTION IT IS APPARENT THAT CIT DOES NOT HAVE POWER TO ENHANCE THE ASSESSMENT UNLESS ASSESSEE HAS BEEN GIVEN A REASONABLE OPPORTUNITY OF SHOWING CAUSE AGAINST SUCH ENHANCEMENT. WE PERUSED THE ORDER OF CIT(A) BUT WE DID NOT FIND THAT ANY SPECIFIC SHOW CAUSE OPPORTUNITY IN THIS REGARD WAS GIVEN BY CIT(A) TO THE ASSESSEE. 6 9 . EVEN THE LD. DR WAS ASKED AT THE BAR IN THIS REGARD WHETHER ANY OPPORTUNITY OF SHOWING CAUSE WAS SPECIFICALLY PROVIDED BY CIT(A) BUT HE WAS UNABLE TO ADDUCE ANY COGENT MATERIAL OR EVIDENCE WHICH MAY PROVE THAT CIT(A) HAS GIVEN OPPORTUNITY TO THE ASSESSEE IN THIS REGARD. THE LD. DR RATHER SUBMITTED THAT SINCE THIS ADDITION HAS BEEN DIRECTED BY CIT(A) TO BE MADE OUT OF ADDITION WHICH WERE MADE BY THE AO ON THE BASIS OF THE LOOSE PAPERS FOR A.Y 2008 - 09 THE ASSESSEE HAS DULY BEEN HEARD IN THIS REGARD. WE DO NOT AGREE WITH THE SUBMISSIONS OF THE LD. DR. WE NOTED THAT THE WORD USED U/S 251(2) IS SHALL. DIRECTING THE AO TO MAKE THE ADDITION IN A PARTICULA R YEAR WILL TANTAMOUNT S TO ENHANCING THE ASSESSMENT OF THAT PARTICULAR YEAR AS BY MAKING THESE ADDITIONS THE ASSESSED INCOME OF THAT PARTICULAR YEAR WILL GET INCREASED. 70 . BEFORE US THE LD. AR RELIED ON THE DECISION OF BOMBAY A - BENCH OF ITAT IN ITA NO . 3159/MUM/2012 FOR A.Y 2008 - 09 IN THE CASE OF ANUSUYA SUREN MIRCHANDANI VS. ACIT IN WHICH WE NOTED THAT WHEN A SIMILAR ISSUE HAD ARISEN THE TRIBUNAL HAD DISPOSED OFF THE LEGAL ISSUE IN THE FOLLOWING MANNER : 2.5. IN THE ADDITIONAL GROUNDS FILE D BY THE ASSESSEE A LEGAL ISSUE HAVE BEEN RAISED BY HER. AS STATED EARLIER FAA HAD HELD THAT ASSESSEE WAS NOT ENTITLED TO CLAIM STCG OR LTCG UNDER THE PROVISIONS OF SECTION 10(38) OF THE ACT. SETTLED LAW OF TAXATION JURISPRUDENCE REQUIRED THE FAA TO ISSUE A NOTICE TO THE ASSESSEE BEFORE ENHANCING HIS INCOME. SECTION 251(2) CLEARLY MANDATE S THAT WITHOUT HEARING AN ASSESSEE HIS INCOME CANNOT BE ENHANCED BY THE FAA. WE FIND THAT BECAUSE OF THE DIRECTIONS ISSUED BY THE FAA TO THE AO FOR NOT ALLOWING EXEMPTIONS TO THE ASSESSEE INCOME IS BOUND TO INCREASE. IN OUR OPINION THERE IS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. 80 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) SO WE HOLD THAT DIRECTION S GIVEN BY THE FAA WERE NOT PROPER AND ASSESSEE IS ENTITLED TO GET THE RELIEF. DECIDING THE ADDITIONAL GROUNDS IN FAVO UR OF THE ASSESSEE WE ARE REVERSING THE ORDER OF THE FAA TO THAT EXTENT. ADDITIONAL GROUND FILED BY THE ASSESSEE IS DECIDED IN HER FAVOUR. NO CONTRARY DECISION WAS BROUGHT TO OUR KNOWLEDGE BY THE LD. DR EXCEPT ARGUING THAT IT IS NOT AN ILLEGALITY BUT AN IRREGULARITY. WE DO NOT AGREE WITH THE LD. DR. N OT GIVING SHOW CAUSE NOTICE IS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE AND THEREFORE IS AN ILLEGALITY. WE ARE BOUND TO FOLLOW THE DECISION OF THE CO - ORDINATE BENCH AND ON THIS BASIS ITSELF WE ARE BOUND TO DELETE THE ADDITION MADE BY CIT(A) DURING A.Y 2007 - 08 FOR RS. 2 94 00 000/ - RS. 1 55 00 000/ - AND RS.1 18 400/ - ON THE BASIS OF LOOSE PAPERS. THE REVENUE HAS NOT COME IN APPEAL BEFORE US AGAINST THE SAID DIRECTION OF THE CIT(A) THAT THESE ADDITIONS HA VE TO BE MADE IN A.Y 2008 - 09 NOT IN A.Y 2007 - 08. 71. WE HAVE ALSO GONE THROUGH THE LOOSE PAPERS. WE NOTED THAT ON THE BASIS OF THE LOOSE PAPERS THE AO AND CIT(A) HAVE DRAWN INFERENCE AS IF THE ASSESSEE HAS RECEIVED COMMISSION FROM THE PERSONS MENTIONE D AT PG. 1 LPS 1/1 AND DIRECTED THE AO TO MAKE ADDITION OF RS.1 15 00 000/ - DURING A.Y 2007 - 08 AND RS. 1 79 00 000/ - ON THE BASIS OF BACKSIDE OF PG. 1 LPS 1/1. THESE PAGES ARE REPRODUCED AS UNDER : THE JOTTINGS MADE IN FRONT PORTION OF PAGE NO. 1 OF LPS - 1/1 APPEAR AS UNDER: - ORDER VALUE R PAYMENT AMT. RECEIVED BALANCE 1 2 3 4 5 6 7 NANDAJI 6174000 11057000 25 20 GAMBHIR 1269972 28 19.5+5+5 4527900 19 LACS 16.68 35.42 2884000 (DEFIB) 25 2.5+4.60 5.56 6.32 6.10 16. 2 2 9 7.21 2.28 (ANEESH) 15 7.0+2+69+3.5+1.5 34.2 MEDITRIN INSTRUMENT 20 81 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) ANOOP YADAV 9600000 24 9.5+3 40+7+27+50.22+25 .53+16.74 7.66 11200000 15 +2.30+2+1.60+10+3.5 BALANCE 1.50 16.74 AGRAWAL + JOSHI 22.90 (J) 15 1.5 2.66 3.44 54 ( A) 20 5.0 +207480+4263 1349288 10.80 JAVED ALLIANZE 3+3+3 9 1.728242 AMIT SCHILLER 2+2.48 16.5 115.47 THE JOTTINGS MADE IN BACK SIDE OF PAGE NO. 1 OF LPS - 1/1 APPEAR AS UNDER: UP SINGH 1.7 TIWARIJI 2.5 PAYMENT 5.65 GAMBHIR 5+10+2.5+2+1 AMIT 1+88 JAAT KHEDI 6.80 A.YADAV 2.5+2+3.5+1.5 BHARGAVA 1 JAVED KHAN ALLIANZE 1+1+1 FURN. JBP MAHESWARI 4+2+1 AGRAWAL SHIV .50+20 SHARMAJI 2+1.40 CROSSED OUT * LOTUS 70+5 0.75 PLASTI SURGE 7 BHAGWATI 1+1.25+3.15 AGRAWAL + JOSHI 1+.5+1+2+2 CROSSED * CHAKACHAK 45 YOGESH GUPTA 10+15+30+15 LOTUS+CHAKACHAK 1.2 SHARIN .50+.50 SHAILENDRA TIWARI 2.5 RAJESH DAGA 20 MAHESHWARI JI BPL 2 ASHOK (JBP) 5+5 BALANCE 10000 SHAILENDRA 4 SHAH 10+3.5+1.5 PF 37 KUK. 18.5 50.00 RAOP 3.5 34.32 GAUZE 41 BEDS 30 TOTAL 343.6 40.57 51.85 FROM THESE PAGES WE NOTED THAT IN THE LOOSE PAPERS IN RESPECT OF SUM OF RS. 96 LACS RS. 112 LACS AGAINST ANOOP YADAV THE COMPLETE ROW STANDS SCORED UP IN LOOSE PAPERS AS SEIZED. COLUMN NUMBER HAS BEEN PUT UP BY AO. COLUMN 6 DOES NOT CONTAIN THE WORD RE CEIPT. EVEN AGAINST JAVED ALLIANZE THE FIGURE OF 1.728242 STANDS SCORED UP. SIMILARLY IN RESPECT OF BACKSIDE OF LPS 1/1 IN THE 82 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) LOOSE PAPER AT PG. 105 LOTUS AND CHAKACHAK HAS DULY BEEN SCORED OUT BUT WHILE MAKING THE TOTAL AND PRESUMING IT TO BE COMMIS SION RECEIVED BY THE ASSESSEE BOTH AO AS WELL AS CIT(A) HAS TAKEN THESE FIGURES. EVEN WE NOTED FROM THE LOOSE PAPERS THAT EVEN THOUGH NAMES FIGURES ARE APPEARING BUT THERE IS NO DATE NOR IS IT MENTIONED ABOUT COMMISSION BEING RECEIVED BY THE ASSESSEE. JOTTING AT THE BACKSIDE OF PG. 1 LPS 1/1 ARE NOT IN COLUMN AS HAS BEEN REPRODUCED BY AO AND CIT(A). THESE ARE APPEARING JUST AS JOTTING. WE NOTED THAT THE INFERENCE HAS BEEN DRAWN THAT THE ASSESSEE HAS RECEIVED COMMISSION ON THE BASIS OF SUPPLY BEING MA DE BY THE VARIOUS PARTIES TO M.P HEALTH DEPT. DURING THE F.Y 2006 - 07. WE DO NOT FIND WHETHER THE SE VERY PARTIES WHO MADE THE SUPPLIES WERE CALLED FOR AND WHETHER THEIR STATEMENT HAVE BEEN RECORDED TO VERIFY WHETHER THEY HAVE PAID ANY COMMISSION TO THE ASS ESSEE. NO ADDITION IN OUR OPINION CAN BE MADE MERELY ON THE BASIS OF INFERENCE HOWSOEVER STRONG IT MAY BE . IF THESE PARTIES MADE THE SUPPLIES THE AO BEFORE MAKING THE INFERENCE SHOULD HAVE CALLED THESE PARTIES AND EXAMINED THEM ON OATH . EVEN THE LOOS E PAPERS NOWHERE STATES ABOUT THE RECEIPT OF COMMISSION. SIMILARLY WE NOTED THAT ON THE BASIS OF THE BACK OF PG. 5 LPS 1/1 WHICH CONTAINS THE FOLLOWING DETAILS : 4.3.2007 - 70 8.3.2007 - 25 10.3.2007 - 30 13.3.2007 - 30 TOTAL 155 IT HAS BEEN PRESUMED BY CIT(A) THAT THESE ARE THE SPECIFIC JOTTING OF RECEIPT OF 70 25 30 30 TOTALLING TO 155 AND IT CLEARLY INDICATES RECEIPT OF 70 LACS 25 LACS 30 LACS AND 30 LACS ON THE SPECIFIED DATE FROM VARIOUS SUPPLIERS. SINCE THESE JOTTINGS RELATE FROM 4 .3.2007 TO 13.3.2007 THEREFORE HE DIRECTED THE AO TO MAKE ADDITION DURING THE A.Y 2007 - 08. THESE JOTTIN GS WE NOTED NO DOUBT CONTAINS THE DATE AND HA VE FIGURE S AND THE TOTAL BUT IT DOES NOT MENTION WHETHER THESE FIGURES REPRESENT RECEIPT OR PAYMENT OR AM OUNT WHETHER THE FIGURES ARE IN 83 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) THOUSANDS LACS OR CRORES. EVEN THE NAME OF ANY PARTY IS NOT GIVEN. CIT(A) PRESUMED THE FIGURES ARE IN LACS AND TREATED IT AS COMMISSION RECEIVED BY THE ASSESSEE AND DIRECTED THE AO TO MAKE ADDITION IN THIS REGARD. EVEN NO CORBORATIVE EVIDENCE WAS BROUGHT ON RECORD IN THIS REGARD. 72. SIMILARLY WE NOTED THE ADDITION OF RS. 1 18 400/ - HAS BEEN DIRECTED TO BE MADE IN A.Y 2007 - 08 ON THE BASIS OF LPS 1/1 PG. 12 & 13. THE ABSTRACT OF THIS PAPER HAS BEEN REPRODUCED BY CIT( A) AS UNDER : (VII) PAGE NO. 12 AND 13 OF LPS - 1/1 (GROUND NO.10) THE ABSTRACTS OF PAGE NO. 12 AND 13 OF LPS - 1/1 ARE GIVEN HEREUNDER : RAJAN ASHOK MEDICINE EQUIPMENTS 78X7% 546000 MANDLA 8.6 8.6 12X10% 120000 KAT A NI 4 666000 GWL. 15.14 3 RAJAN 968000/ - 78 12 26X7% 182000 26 27.6 276000 7X10% 70000 119.14 5X10% 50000 953120 MANDLA 302000 998000/ - 276000 998000/ - 1229120 1118400 PAID WE NOTED THAT ON THE BASIS OF THE SAID LOOSE PAPERS AO TOOK THE VIEW THAT THE ASSESSEE HAS TAKEN COMMISSION OF RS.11 18 400/ - FROM ASHOK KUNDANI WHO RUNS MEDINOVA PHARMACEUTICALS A.K. ENTERPRISES AND DALIT ENTERPRISES AND ALSO FROM RAJAN JAGTIYANI WHO RUNS DOLPHIN PHARMA AND ALSO LOOKS AFTER WORK OF M/S. PLASTI SURGE INDIA LTD. WHEN THE MATTER WENT BEFORE CIT(A) CIT(A) DELETED THE ADDITION OF RS. 10 LACS AS HE NOTED THAT AT THE BACKSIDE OF PG. 1 OF LPS 1/1 5+5 WAS WRITTEN AND ON THE BASIS OF THIS AL READY INCLUDED IN THE ADDITION OF RS.294 LACS WHICH WAS SUSTAINED. HE ALSO NOTED THAT THE SUPPLY WAS MADE BY THESE PARTIES IN F.Y 2006 - 07. THEREFORE THE ADDITION WAS CONFIRMED AT RS. 1 18 400/ - BUT DIRECTED THE AO TO MAKE TH IS ADDITION IN THE A.Y 2007 - 0 8. 84 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) 73. AFTER HEARING THE RIVAL SUBMISSIONS AND GOING THROUGH THE LOOSE PAPERS WE NOTED AGAIN THAT THE ADDITION HAS BEEN MADE MERELY ON THE BASIS OF INFERENCE DRAWN THAT AMOUNT PAID REPRESENTS COMMISSION RECEIVED BY THE ASSESSEE ON THE SUPPLY MADE BY THE P ARTIES TO THE DEPARTMENT OF HEALTH M.P. WE DO NOT FIND ANY DATE ON TH ESE LOOSE PAPER S COPIES OF WHICH ARE AVAILABLE IN THE PAPER BOOK . EVEN EXCEPT THE FIGURES THE AMOUNT HAS NOT BEEN GIVEN. NO DOUBT AGAINST THE FIGURE OF 1118400 THE WORD PAID IS WR ITTEN BUT NOW THE QUESTION ARISES WHETHER THE PERSON WHO HAS RECEIVED SOMETHING WILL WRITE THE WORD PAID. IF THIS AMOUNT REPRESENTS COMMISSION RECEIVED BY THE ASSESSEE THE ASSESSEE WOULD HAVE MENTIONED THE WORD RECEIVED NOT PAID. 74. WE ALSO NOT ED THAT WHILE MAKING THE ADDITION AND PRESUMING THE FIGURES MENTIONED IN THE LOOSE PAPERS TO BE COMMISSION RECEIVED BY WAY OF ILLEGAL GRATIFICATION THE REVENUE GOT INFLUENCED AND OBSERVED THAT ASSESSEES SON AND WIFE MADE HUGE INVESTMENT S . EVEN SHAREHOLD ERS FUND HAS BEEN RECEIVED IN BOTH THE COMPANIES M/S. GAJANAN DISTRIBUTORS AND DEVELOPERS PVT. LTD. AND M/S. SHREE VIGNESH WAREHOUSE AND DISTRIBUTORS PVT. LTD. WE NOTED THAT DURING THE IMPUGNED A.Y 2007 - 08 AND 2008 - 09 NO SHARE APPLICATION FUNDS HAVE BEE N RECEIVED BY THESE COMPANIES. EVEN THE SON OF THE ASSESSEE SHRI GAURAV SHARMA HAS SURRENDERED A SUM OF RS. 35 LACS IN A.Y 2007 - 08 BUT THE AO ASSESSED ONLY RS. 1 LAC SUBSTANTIVELY IN THE HANDS OF THE ASSESSEE. IF THE ASSESSEE WOULD HAVE RECEIVED THE COM MISSION THE ASSESSEE WOULD HAVE EITHER INVESTED IN SOME MOVABLE OR IMMOVEABLE PROPERTY OR WOULD HAVE CONSUMED IT BY MAKING THE EXPENDITURE . THERE HAD BEEN A SEARCH IN THE CASE OF THE ASSESSEE. EVEN JEWELLERY AS PER ANNEXURE J F TO PANCHNAMA WAS FOUND ONLY TO THE EXTENT OF RS.9 66 851/ - AS IS APPARENT FROM PG. 35 - 36 OF THE ASSESSMENT ORDER. THIS IS NOT THE CASE OF THE REVENUE THAT THE ASSESSEE MADE HUGE EXPENDITURE DURING THE IMPUGNED ASSESSMENT YEARS. NO OTHER IMMOVEABLE OR MOVABLE PROPERTY NOT DISCLOSED WAS FOUND THEREFORE ON THIS BASIS ITSELF IN OUR 85 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) OPINION NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE AND ACCORDINGLY WE DELETE THE ADDITIONS. 7 5 . GROUND NOS. 8 TO 10 IN A.Y 2008 - 09 RELATE TO SUSTENANCE OF ADDITION OF RS.2 67 54 000/ - . AFTER CONSIDERING THE RIVAL SUBMISSIONS WE NOTED THAT THIS ADDITION HAS BEEN MADE ON THE BASIS OF LOOSE PAPERS SEIZED DURING THE COURSE OF SEARCH BEING PG. 4 & 5 OF LPS 1/1. THESE LOOSE PAPERS INCLUDING THE SCORED UP ENTRY ARE REPRODUCED AS UNDE R : CHEQUES RECEIVED FROM RCH SOCIETY FROM 1 ST JAN.2007 1. CHEQUE NO. 243517 DH 03/01/07 RS. 60 18 390 IKFJOKJ DY;K.K DS VURXZR VKIJS'KU LS VFTZR JKF'KA 2. ---- --- 326175 DH 24/11/07 RS. 16 61 28 270 E - VKJ - P - E@VKJ - LH - P - 2 MX FDV~~L DZ; DJUS GSRWA 3. ---- -- 326167 DH 22/11/07 RS. 20 87 230 IKFJOKJ DY;K.K DS VURXZR VKIJS'KU LS VFTZR JKF'KA (M.P. FUND) 4. ---- ---- 249872 DH 31/11/07 RS. 56 43 117 YSIZKSLDKSI LQ/KKJUS GSRQ IKFJR FD;KA 5. ---- ---- 124119 DH 12/02/07 RS. 28 80 000 TKUUH LQJ{KK ;KSTUK OA VHDKDJ.K LS LECF/KR IZPKJ IZLKJ DK;Z 6. ---- ---- 124120 DH 12/02/07 RS. 29 92 354 VK'KK IZF'K{K.K EKMW;QYL DS EQFNZ DS LECU/K ESAA 7. ---- ---- 326209 DH 06/02/07 RS. 5 25 00 000 YSIZKSLDKSI DZ; FD;S TKUS DS LECU/K ESAA 8. ---- ---- 124125 DH 14/02/07 RS. 2 66 00 000 E - VKJ - P - E@ PLP/ DS VURXZR C.H. DKS CHC FDV MIYC/K DJKUS DS LECA/K ESAA 1. CHEQUE NO. 243536 DH 10/01/07 RS. 3 49 68 589 PPI FUND (11FEB 07) 2. CHEQUE NO. 326225 DH 28/02/07 RS. 2 15 32 604 PPI FUND (11 MARCH 07) 1. CHEQUE NO. 703739 DH 21/11/07 RS. 81 42 576 RELESE OF FUNDS FOR PAYMENT OF H.B. ANALYZER AS AN ADVANCE UNDER SIP 2. CHEQUE NO. 703738 DH 27/11/07 RS. 2 20 87 520 RELEASE OF FUNDS FOR PAYMENT BLOOD BAGS REFRIGERATOR AS ADVANCE SIP JOTTINGS MADE IN FRONT SIDE OF PAGE NO. 4 OF LPS - 1/1 AND FRONT SIDE OF PAGE NO. 5 OF LPS - 1/1 ARE REPRODUCED HEREUNDER : KITS 22 X 5 100.10 LACS 60 50 - 15 35 LAPROSCOPIC REPAIR + HB ANALYSER 564311 + 78.29 PAYMENTS 42 + 78.29 PAID 5.60 (4%) (5%) 14.43 X 4 57 57.72 THOUSAND ASHA TRAINING MODULE 29.92 PAID BY AHISHEK DIRECTLY GOI SPECIAL FUNDS FOR H WALL WRITING 86 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) 28.80 (4) 1.15 CHC MEDICAL KIT 2.66 X (3.5) 9.31 BLOOK BANK REF 2.20 X (4) 8.8 PAID 70 4.3.07 (40 + 30) 54.8 25 8.3.07 30 10.3.07 (15 + 15) 30 13.3.07 1.55 4.3.07 PIPELINE FACILITY SURVEY 60 LAPROSCOPSES 56 2.2 SALT DFS 1.5 6 SWC ASHA KIT 2 + 20 (2) 7 8 MANNEQUIN 2 PRINTING 38 FRONT SIDE OF PAGE NO. 5 OF LPS - 1/1 PAID BALANCE 1 KITS 100.1 60 35 - 0.15 95 2 LAPROSCOPIC REPAIR HB ANALYSER THOUSAND 0.58 56.43 + 78.29 5.6 5.6 (4) + (5) +0.58 6.18 3 ASHA TRAINING MODULE (29.92) PAID BY ABHISHEK 4 GOI FUNDS FOR WALL WRING JYS (28.88) (4) 1.15 1.15 5 CHC MEDICINE KIT 2.66 (3.5) 9.31 9.31 6 BLOOD BANK REFRIGERATOR 2.20 8.8 8.8 7 FACILITY SURVEY 60 60 8 PRINTING ABHISHEK 36 (3.5%) PRABHA KIRAN 1.27 1.27 9 ASHA KIT 5.30 5 X 3.5 17.5 17.5 133.61 BACK SIDE OF PAGE NO. 5 LPS 1/1 PAYMENT 1 DFS 1.5(4) 6 4.3.07 70 2 WARHOUSE 8.3.07 25 3 MANNEQUIN - 2 87 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) 10.3.07 30 4 KITS (22) 13.3.07 30 5 ASHA DRUG (4) 155 6 TRANSPORT VENTILATORS +37.14 7 WATER PURIFYING CAKES +21.39 +110 +15 29.7.07 146.39 - 120.9 OLD 25.49 25.49 + 60 - 15/7/07 85.49 14/8/07 +25.00 BEFORE GOING ABROAD 9.7.07 15/8/07 DFS 3.5 7 LAP REPAIR (5) (2.36) 13.71 + 11.38 + 90 (115.09) 5.75 LAP. REPAIR LAP PURCHASE 13.71 + 11.38 7 CR (50 - 35 MANNEQUIN 8.9 HOSMOC (5) 1.78(5) 23 1.15 KITS 90 120.9 THE AO WHILE MAKING THE ADDITION OBSERVED THAT PG. 4 OF LPS 1/1 CONTAINS DETAILS OF PAYMENT MADE BY THE HEALTH DEPT. TO VARIOUS SUPPLIERS ALONGWITH DATE CHEQUE NUMBER AND AMOUNT AND NAME OF THE SCHEME ETC. THE PAGE WAS WRITTEN BY THE ASSESSEE. THE AO CO - RELATED THE INFORMATION APPEARING ON THE BACKSIDE OF PG. 4 WITH THE INFORMATION RECEIVED FROM THE STATE GOVERNMENT AND OBSERVED THAT FRONT SIDE OF PG. 4 CONTAINS THE HANDWRITTEN INFORMATION BLOOD BANK RELIEF 2.20 X 4. THIS REPRESENTS ISSUE OF CHEQUE O F RS.2 20 87 520/ - PAID AS ADVANCE TOWARDS PURCHASE OF BLOOD BANK REFRIGERATOR. THIS HAS BEEN ISSUED TO HIPL ON 27.1.2007 FOR PAYMENT OF BLOOD BANK REFRIGERATOR. AS REGARDS ANOTHER TRANSACTION ON BACKSIDE OF PG. 4 WRITTEN AS CFC MEDICAL KITS 2.66 X 3. 5 IT CORRESPONDS TO ENTRY IN REVERSE OF THE SAME PAGE WHICH SHOWS THE CHEQUE FOR RS.2 66 00 000/ - DT. 14.1.2007 WAS ISSUED FOR PURCHASE OF ELECTROSCOPE IN FAVOUR OF KARNATAKA ANTIBIOTICS FOR PURCHASE OF MEDICAL KITS. PAGE 4 CONTAINS GOI 88 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) SPECIAL FUNDS FO R H WALL. WRITING ON REVERSE OF THE SAME PAGE SHOWS CHEQUE OF RS. 28 82 000/ - WAS ISSUED ON 12.2.2007 FOR JANANI SURAKSHA YOJNA TO GLOBAL ENTERPRISES OF YOGESH PATARIYA FOR WALL WRITING. THEREFORE THE TRANSACTIONS MENTIONED IN THIS PAPER WERE NOT ROUGH JOTTING. IT WAS ALSO NOTED BY HIM THAT IN THE FRONT SIDE OF PG. 4 04.03.2007 HOLI HAS BEEN WRITTEN. THEREFORE HE WAS OF THE OPINION THAT ON THE DAY OF HOLI THE TRANSACTIONS MENTIONED AT PG. 4 TOOK PLACE FOR RECEIPT OF ILLEGAL GRATIFICATION. IT WAS ALSO NOTED BY HIM THAT IN THE MIDDLE PART OF THIS PAGE DATE - WISE PAYMENT RECEIVED BY DR. SHARMA ARE MENTIONED FROM 4.3.2007 TO 13.3.2007 TOTALLING TO 155 WHICH HE TOOK AS EQUIVALENT TO RS. 155 LACS. IT WAS ALSO NOTED THAT AT THE BOTTOM OF THE PAGE LIST OF ORDERS FOR WHICH COMMISSION AMOUNT IS TO BE RECEIVED IS GIVEN . ON THE BASIS OF BACKSIDE OF PG. 5 IT WAS OBSERVED BY AO THAT FURTHER COMMISSION RECEIVED ON ACCOUNT OF APPROVAL OF ORDERS HAVE BEEN MENTIONED AS 9.7.2007 29.7.2007 14.8.2007 & 15.8.2007 AND FOR THE FIGURES MENTIONED HE ASSUMED THESE FIGURES TO BE IN LACS AGAINST EACH DATE RS. 120.9 LACS RS. 85.49 LACS RS. 25 LACS AND RS.36.15 LACS. TOTAL OF THESE AMOUNTS COMES TO RS. 267.5 LACS. THE AO REJECTED THE EXPLANATION OF THE ASSESSEE THAT TH E JOTTINGS IN PG. 4 5 ARE ROUGH WORKING AND MAY BE RELATED TO PROJECTS OF HEALTH DEPT. S OME ESTIMATED PROJECT DETAILS OR SOME ESTIMATED BUDGET DATA AND TREATED THE SUM OF RS.2 67 54 000/ - PRESUMING THE FIGURES TO BE IN RUPEES AND IN LACS AS UNDISCLOSED INCOME FROM UNDISCLOSED SOURCES. WE NOTED THAT WHEN THE MATTER WENT TO CIT(A) CIT(A) CONFIRMED THE ADDITION BY OBSERVING AS UNDER : THE PAYMENTS CHARGED FROM DIFFERENT SUPPLIERS AS PER THE JOTTINGS MADE IN PAGE NO.4 AND FRONT SIDE OF PAGE - 5 ARE TOTALING TO RS. 199.21 LAKHS AND SINCE RS.60 LAKHS FROM SUPPLIER OF KITS AND RS. 5.6 LAKHS FROM SUPPLIER OF HB ANALYSER AND FROM LAPROSCOPE REPAIRS WERE PAID AS PER THE ENTRIES IN THE PAYMENT COLUMN BALANCE DUE WAS RS. 133.61 LAKHS AS PER FRONT SIDE OF PAGE NO. 5. THE BALANCE WAS RS. 54.8 LAKHS AS PER THE ENTRIES IN FRONT PART OF PAGE NO.4. THERE IS SPECIFIC JOTTINGS OF RECEIPT OF 70 25 30 30 TOTALING TO 155 ON 04 - 03 - 07 08 - 03 - 07 10 - 03 - 07 13 - 03 - 07 MADE IN FRONT SIDE OF PAGE NO. 4 AND BACK SIDE O F PAGE NO. 89 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) 5 OF LPS - 1/1 WHICH CLEARLY INDICATES RECEIPT OF RS. 70 LAKHS 25 LAKHS 30 LAKHS AND 30 LAKHS ON DATE SPECIFIED FROM VARIOUS SUPPLIERS. THUS THERE IS SPECIFICATION OF DATES AND AMOUNT OF RECEIPTS OF RS. 155 LAKHS WITHIN 4 TH MARCH 2007 TO 13 TH MARCH 2007 WHICH CAN HAVE DIRECT NEXUS WITH JOTTINGS MADE IN PAGE NO. 4 AND 5. THIS HAS TO BE ADDED AS INCOME OF THE APPELLANT FOR ASSTT. YR. 2007 - 08 THOUGH THE AO HAS NOT INCLUDED IT IN COMPUTATION OF ASSESSED INCOME DUE TO MERE OMISSION. SHE HAS DISC USSED THE FACTS IN HER ORDER OF ASSESSMENT AND THIS CANNOT BE IGNORED. 7 6 . WE NOTED THAT THE FIGURES HAVE BEEN PRESUMED TO BE IN RUPEES AS WELL AS IN LACS AND IT REPRESENTS COMMISSION. THE LOOSE PAPERS NOWHERE STATES ABOUT THE COMMISSION OR THE AMOUNT R ECEIVED. ADDITION OF RS.267.54 LACS REPRESENTS BASICALLY THE JOTTING ON BACKSIDE OF PG. 5 OF LPS 1/1 WHICH CONTAINS FIGURE OF 120.9 85.49 25 AND 36.15. IT IS NOT CLEAR FROM THIS PAPER WHETHER THESE FIGURES REPRESENT PAID BALANCE OR RECEIPT OR ARE IN C RORES LACS OR THOUSANDS. INFERENCE HAS BEEN DRAWN ON THE BASIS OF THE SUPPLY BEING MADE TO THE HEALTH DEPT. OF M.P. WE ALSO NOTED FROM THE FRONT SIDE OF PG. 4 AGAINST THE FIGURE 54.8 AS PER COMPILATION OF AO THIS FIGURE REPRESENTS THE BALANCE AND FROM F RONT SIDE OF PG. 5 LPS 1/1 THE FIGURE OF 133.61 REPRESENTS BALANCE. THUS THE FIGURE O F 188.41 REPRESENTS THE BALANCE. W HILE AT THE BACKSIDE OF PG. 5 LPS 1/1 ON THE BASIS OF WHICH INFERENCE IN RESPECT OF FIGURE 120.9 85.49 AND 25 AND 36.15 ADDITION OF RS. 267.54 LACS WAS INFERRED AS COMMISSION RECEIVED BY THE ASSESSEE THIS PAGE DOES NOT MENTION WHETHER IT IS PAID RECEIVED OR BALANCE. EVEN OTHERWISE WE NOTED THAT 120.9 HAS BEEN DEDUCTED OUT OF THE FIGURE OF 146.39 AND THE BALANCE WAS WORKED OUT AT 2 5.49. THEN THERE WAS ADDITION OF 60 WHICH GIVES FIGURE OF 85.49. THERE IS FURTHER FIGURE OF 25 AND 35 AND 1.15. THE FIGURE OF 25.49 AND 25 APPEARS TO BE PART AND PARCEL OF 85.49. EVEN WE NOTED THAT AGAINST THE FIGURE OF 120.9 THE WORD OLD HAS BEEN ME NTIONED. THERE IS NO MENTION OF ANY PARTY EXCEPT ITEM SUCH AS DFS LAP.REPAIR MANNEQUINE KITS LAP REPAIR LAP PURCHASE HOSMOC. IN THIS CASE ALSO WE NOTED THAT THE REVENUE AUTHORITIES TRIED TO CO - RELATE THESE FIGURES WITH THE VARIOUS SUPPLIES MADE TO M.P HEALTH DEPT. BUT AO DID NOT CALL ANY OF THE PARTIES OR IF CALLED FOR HAS NOT BROUGHT STATEMENT OF ANY OF 90 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) THE PARTIES IF RECORDED ON RECORD TO PROVE WHETHER THESE PARTIES HAVE PAID ANY COMMISSION TO THE ASSESSEE. EVEN NO INFORMATION WAS SUPPLIED OR GI VEN TO US OR BROUGHT ON RECORDS WHAT HAPPENED IN THE CASE OF THESE PARTIES. INFERENCE WAS SIMPLY DRAWN ON THE BASIS OF THE INTERPRETATION GIVEN TO THE VARIOUS FIGURES APPEARING IN THE LOOSE PAPERS. INFERENCE AS WE HAVE ALREADY HELD WHATSOEVER STRONG CA NNOT TAKE THE PLACE OF ACTUALITY. WE HAVE GONE THROUGH THE VARIOUS DECISIONS AS HAS BEEN RELIED. 1. IN THE CASE OF DSP CHENNAI VS. K. INBASAGARAN(2006) 1 SCC 420 WE NOTED FOLLOWING : - 4. ACCORDING TO THE PROSECUTION ON 13/9/1993 AND ON 14/9/1993 THERE WAS A RAID BY THE INCOME TAX AUTHORITIES IN THE HOUSE OF THE ACCUSED. THE RAID BY THE INCOME TAX DEPARTMENT YIELDED A HUGE AMOUNT OF CASH AMOUNTING TO RS.30 LAKHS 7 GOLD BISCUITS WEIGHING 81 9 GRAMS $1118 AND CERTAIN DOCUMENTS REGARDING PURCHASE OF IMMOVABLE PROPERTIES AND ALSO FIXED DEPOSIT RECEIPTS OF A BANK FOR RS.25 000 IN THE NAME OF THIRD PARTIES 5. GANAPATHY IYER AN ASSISTANT COMMISSIONER OF INCOME TAX CHENNAI CIRCLE - 1(II) HELD AN INQUIRY REGARDING THE HUGE AMOUNT OF CASH UNEARTHED FOR THE PURPOSE OF INCOME TAX ASSESSMENT AND CAME TO THE CONCLUSION THAT THE SAID ASSETS BELONGED TO THE ACCUSED. 6. THE ACCUSED DENIED THE CHARGES AND ACCORDING TO THE ACCUSED THE ASSETS WHICH HAD B EEN UNEARTHED DURING THE RAID BY THE INCOME TAX DEPARTMENT WERE NOT HIS ASSETS BUT THEY WERE THE ASSETS OF HIS WIFE WHO WAS RUNNING CERTAIN COMPANIES. REGARDING CASH OF RS.30 LAKHS RECOVERED FROM HIS HOUSE IT WAS URGED THAT A SUM OF RS.29 LAKHS WAS UNAC COUNTED MONEY OBTAINED BY SALE OF CYCLE RIMS AND SHOE UPPERS BY THE TWO COMPANIES WITHOUT BILL AND THAT MONEY BELONGED TO HER COMPANIES. 7. IT WAS SUBMITTED THAT HE HAD NO PROPRIETARY CONTROL OVER THE SUM OF RS.30 LAKHS SEIZED BY THE INCOME TAX DEPARTMENT AS IT BELONGED TO THE UNACCOUNTED MONEY OF HIS WIFE. 9. THE LEARNED SINGLE JUDGE ALSO FOUND THAT SINCE THE ENTIRE MONEY HAS BEEN ADMITTED BY HIS WIFE WHO HAD COME IN THE WITNESS BOX AS DW 12 AND ADMITTED THAT SHE EARNED THIS MONEY BY SELLING CYCLE RIMS A ND LEATHER SHOE UPPERS WITHOUT ANY BILL AND THIS MONEY BELONGED TO HER AND SHE HAD MADE A CLEAN BREAST BEFORE THE INCOME TAX AUTHORITIES AND THEREBY SHE HAD ACCEPTED THIS UNACCOUNTED MONEY BELONGING TO HER. 91 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) THEREFORE THE LEARNED SINGLE JUDGE HELD THAT T HIS UNACCOUNTED MONEY DID NOT BELONG TO THE ACCUSED. LIKEWISE THE LEARNED SINGLE JUDGE ALSO FOUND THAT THE PURCHASE OF GOLD BISCUITS BY HIS WIFE HAS BEEN PROPERLY EXPLAINED AND LIKEWISE THE PURCHASE OF THE PROPERTY BY THE WIFE FROM THE UNACCOUNTE D MONEY AND ALSO FOUND THAT THE MONEY BELONGED TO HIS WIFE AND THAT SHE HAD MADE A CLEAN BREAST BEFORE THE INCOME TAX OFFICER. 10. LEARNED COUNSEL FOR THE STATE HAS TAKEN US THROUGH THE ENTIRE EVIDENCE AND HAS TRIED TO EMPHASIZE THAT THE PLEA TAKEN BY THE WIFE OF THE ACCUSED THAT THE MONEY BELONGED TO HER WAS WITH A VIEW TO SHIELD HER HUSBAND AND HIS WIFE IS ONLY A DECOY TO PROTECT HER HUSBAND. SHE HAS OWNED THE ENTIRE MONEY BEING THE BLACK MONEY FROM HER BUSINESS. 15. THE BASIC QUESTION THAT EMERGES IN THE PRESENT CASE IS WHETHER THE ACCUSED COULD BE SADDLED WITH ALL THE UNACCOUNTED MONEY AT HIS HAND OR NOT IT IS THE ADMITTED POSITION THAT BOTH THE HUSBAND AND WIFE WERE LIVING TOGETHER. THE WIFE WAS RUNNING THREE CONCERNS THROUGH THOSE CONCERNS WERE RUN NING IN LOSS. YET SHE COULD MANAGE TO EARN BLACK MONEY BY SELLING GOODS WITHOUT BILLS AND AMASSED THIS WEALTH WITHOUT DISCLOSING THE SAME TO THE INCOME TAX AUTHORITY AND WHEN THE RAID WAS CONDUCTED SHE DISCLOSED THE UNACCOUNTED MONEY AND ACCEPTED HERSEL F FOR BEING ASSESSED BY THE INCOME TAX DEPARTMENT. 16. THEREFORE THE INITIAL BURDEN WAS ON THE PROSECUTION TO ESTABLISH WHETHER THE ACCUSED HAS ACQUIRED THE PROPERTY DISPROPORTIONATE TO HIS KNOWN SOURCE OF INCOME OR NOT. 17. IT IS TRUE THAT WHEN THERE IS JOINT POSSESSION BETWEEN THE WIFE AND HUSBAND OR FATHER AND SON AND IF SOME OF THE MEMBERS OF THE FAMILY ARE INVOLVED IN AMASSING ILLEGAL WEALTH THEN UNLESS THERE IS CATEGORICAL EVIDENCE TO BELIEVE THAT THIS CAN BE READ IN THE HANDS OF THE HUSBAND AS TH E CASE MAY BE IT CANNOT BE FASTENED ON THE HUSBAND OR THE HEAD OF THE FAMILY. IT IS TRUE THAT THE PROSECUTION IN THE PRESENT CASE HAS TRIED ITS BEST TO LEAD EVIDENCE TO SHOW THAT ALL THESE MONIES BELONGED TO THE ACCUSED BUT WHEN THE WIFE HAS FULLY OWNED THE ENTIRE MONEY AND THE OTHER WEALTH EARNED BY HER BY NOT SHOWING IN THE INCOME TAX RETURNS AND SHE HAS ACCEPTED THE WHOLE RESPONSIBILITY IN THAT CASE IT IS VERY DIFFICULT TO HOLD THE ACCUSED GUILTY OF THE CHARGE. IN CASE OF JOINT POSSESSION IT IS V ERY DIFFICULT WHEN ONE OF THE PERSONS ACCEPTED THE ENTIRE RESPONSIBILITY. THE WIFE OF THE ACCUSED HAS NOT BEEN PROSECUTED AND IT IS ONLY THE HUSBAND WHO HAS BEEN CHARGED BEING A PUBLIC SERVANT. IN VIEW OF THE EXPLANATION GIVEN BY THE HUSBAND AND WHEN IT H AS BEEN SUBSTANTIATED BY THE EVIDENCE OF THE WIFE THE OTHER WITNESSES WHO HAVE BEEN PRODUCED ON BEHALF OF THE ACCUSED COUPLED WITH THE FACT THAT THE ENTIRE MONEY HAS BEEN TREATED IN THE HANDS OF THE WIFE AND SHE HAS OWNED IT AND SHE HAS BEEN ASSESSED BY THE INCOME TAX DEPARTMENT.SINCE 92 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) THE CRUCIAL QUESTION IN THIS CASE WAS OF POSSESSION AND THE PREMISES IN QUESTION WERE JOINTLY SHARED BY THE WIFE AND THE HUSBAND AND THE WIFE HAVING ACCEPTED THE ENTIRE RECOVERY AT HER HAND IT WILL NOT BE PROPER TO HOLD THE HUSBAND GUILTY. 2. KRISHNANAND VS. STATE OF M.P.AIR 1977 (S.C.) 796. PARA B (HEAD NOTE) THE BURDEN OF SHOWING THAT A PARTICULAR TRANSACTION IS BENAMI AND THE OWNER IS NOT THE REAL OWNER ALWAYS RESTS ON THE PERSON ASSERTING IT TO BE SO AND THIS BURDEN HAS TO BE STRICTLY DISCHARGED BY ADDUCING LEGAL EVIDENCE OF A DEFINITE CHARACTER WHICH WOULD EITHER DIRECTLY PROVE THE FACT OF BENAMI OR ESTABLISH CIRCUMSTANCES UNERRINGLY AND REASONABLY RAISING AN INFERENCE OF THAT FACT. IN THE INSTANT CASE THOUGH THE PROSECUTION ALLEGED THAT CERTAIN AMOUNTS LYING IN THE NAME OF ACCUSEDS WIFE S WAS AN ASSET B ELONGING TO THE ACCUSED NO EVIDENCE AT ALL WAS LED ON THE SIDE OF THE PROSECUTION TO SHOW THAT THE MONIES LYING IN FIXED DEPOSIT IN HER NAME WAS PROVIDED BY THE ACCUSED. HOWSOEVER STRONG MAY BE THE SUSPICION OF THE COURT IN THIS CONNECTION IT CANNOT TAK E THE PLACE OF PROOF. BEYOND RAISING SUSPICION AND DOUBT IN THE MIND OF THE COURT THE PROSECUTION HAS NOT BEEN ABLE TO ADDUCE ANY LEGAL EVIDENCE OF A DEFINITE CHARACTER WHICH WOULD ESTABLISH THE BENAMI CHARACTER OF THIS BANK ACCOUNT. ON THE CONTRARY TH E EVIDENCE LED ON BEHALF OF THE ACCUSED SHOWS THAT S HAD MEANS OF HER OWN. 3. CIT VS. DAULAT RAM RAWATMULL 87 ITR 349 (S.C.). (HEAD NOTES) BENAMI BENAMI PROPERTY FIXED DEPOSIT IN THE NAME OF SON OF PARTNER MERELY BECAUSE THE EXPLANATION WAS FO UND FALSE IT CANNOT BE HELD THAT THE FIRM WHICH OPERATED AN OVERDRAFT ACCOUNT AGAINST SECURITY OF SUCH DEPOSIT OWNER THE MONEY. THE ONUS TO PROVE THAT THE APPARENT IS NOT THE REAL IS ON THE PARTY WHO CLAIMS IT TO BE SO. AS IT WAS THE DEPARTMENT WHICH CL AIMED THAT THE AMOUNT OF FIXED DEPOSIT RECEIPT BELONGED TO THE RESPONDENT FIRM EVEN THOUGH THE RECEIPT HAD BEEN ISSUED IN THE NAME OF B THE BURDEN LAY ON THE DEPARTMENT TO PROVE THAT THE RESPONDENT WAS THE OWNER OF THE AMOUNT DESPITE THE FACT THAT THE REC EIPT WAS IN THE NAME OF B. A SIMPLE WAY OF DISCHARGING THE ONUS AND RESOLVING THE CONTROVERSY WAS TO TRACE THE SOURCE AND ORIGIN OF THE AMOUNT AND FIND OUT ITS ULTIMATE DESTINATION. SO FAR AS THE SOURCE IS CONCERNED THERE IS NO MATERIAL ON THE RECORD TO SHOW THAT THE AMOUNT CAME FROM THE COFFERS OF THE RESPONDENT - FIRM OR THAT IT WAS TENDERED ON BEHALF OF THE RESPONDENT. AS REGARDS THE DESTINATION OF THE AMOUNT THERE IS NOTHING TO SHOW THAT IT WENT TO THE COFFERS OF THE RESPONDENT. 93 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) 4. PARIMISETTI SEETH ARAMAMMA VS. CIT 57 ITR 532 (S.C.). (HEAD NOTES) SALARY CHARGEABILITY JEWELLERY AND AMOUNTS RECEIVED BY ASSESSEE FROM S MAHARANI OF BARODA ADMISSION MADE BY ASSESSEE THAT SHE ACTED AS LOCAL AGENT FOR DISBURSING SALARY TO SERVANTS OF S ASSESS EE WAS DESCRIBED AS PRIVATE SECRETARY TO S IN A CASH MEMO ISSUED BY A THIRD PARTY THERE CIRCUMSTANCES COULD NOT ESTABLISH THAT WHAT WAS GIVEN TO HER BY S WAS REMUNERATION FOR SERVICES RENDERED OR TO BE RENDERED WHAT THE ASSESSEE RECEIVED WAS NOT ASSESS ABLE TO TAX. HELD BY SS. 3 AND 4 THE ACT IMPOSES A GENERAL LIABILITY TO TAX UPON ALL INCOME. BUT THE ACT DOES NOT PROVIDE THAT WHATEVER IS RECEIVED BY A PERSON MUST BE REGARDED AS INCOME LIABLE TO TAX. IN ALL CASES IN WHICH A RECEIPT IS SOUGHT TO BE TAXED AS INCOME THE BURDEN LIES UPON THE DEPARTMENT TO PROVE THAT IT IS WITHIN THE TAXING PROVISION.WHERE HOWEVER A RECEIPT IS OF THE NATURE OF INCOME THE BURDEN OF PROVING THAT IT IS NOT TAXABLE BECAUSE IT FALLS WITHIN AN EXEMPTION PROVIDED BY THE ACT L IES UPON THE ASSESSEE. 5. ACIT VS. SHAILESH S. SHAH 59 TTJ (MUM.) 574. (HEAD NOTES) INCOME ADDITION NOTINGS ON SEIZED PAPER - FIGURES NOTED ON PAPER TAKEN AS COMMISSION AND UNDISCLOSED INCOME OF ASSESSEE - NO SPECIFIC OR DIRECT EVIDENCE AVAILABLE WHICH MAY SUPPORT THE FINDINGS OF AO WORD COMMISSION NOT MENTIONED ON THE LOOSE PAPER WORD RUPEES ALSO NOT MENTIONED AGAINST ANY OF THE FIGURES AO HAS NOT INVOKED ANY OF THE DEEMING PROVISIONS OF SS. 69 TO 69D AND THE FIGURES HAVE BEEN CONSIDERED AS ASSESSEES INCOME UNDER THE SUBSTANTIVE PROVISIONS OF THE ACT - BURDEN IS ON THE REVENUE TO PROVE THAT IT IS WITHIN THE TAXING PROVISIONS WHICH HAS NOT BEEN DISCHARGED BY REVENUE ADDITIONS CANNOT BE SUSTAINED EVEN IF IT IS ASSUMED THAT THE FIGURES REPRESENT COMMISSION LOANS ETC. IT CANNOT BE TAXED IN THIS YEAR BECAUSE EXACT DATE OF RECEIPT IS NOT KNOWN FURTHER THERE IS NO EVIDENCE THAT THE FIGURES REPRESENT LOAN INTEREST ETC. GIVEN OR TAKEN BY ASSESSEE FINDINGS OF AO BASED ONLY ON SUSPICION CANNOT BE SUSTAINED. 6. CIT VS. GIRISH CHAUDHARY 296 ITR 619 (DEL.). (HEAD NOTES) SEARCH AND SEIZURE BLOCK ASSESSMENT UNDISCLOSED INCOME BEFORE AN ADDITION OF AN UNDISCLOSED INCOME CAN BE MADE THE AO HAS TO BRING ON RECORD TH E MATERIAL FOUND AS A RESULT OF SEARCH OF SHOW THAT THERE IS AN UNDISCLOSED INCOME AO TREATED RS.48 LAKHS AS ASSESSEES UNDISCLOSED INCOME ON THE BASIS OF SEIZURE OF A DOCUMENT WHICH SHOWED CERTAIN UNEXPLAINED ENTRIES TOTALING 48 NOT JUSTIFIED THER E IS NO MATERIAL ON RECORD TO SHOW AS TO AN WHAT BASIS THE AO HAS REACHED THE CONCLUSION THAT THE FIGURE 48 IS TO BE READ AS RS.48 LACS SAID DOCUMENT IS A 94 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) DUMB DOCUMENT AND LEADS TO NOW HERE ADDITION RIGHTLY DELETED BY THE TRIBUNAL THERE IS NO ERRO R IN THE ORDER OF THE TRIBUNAL AND IT DOES NOT GIVE RISE TO A QUESTION OF LAW MUCH LESS A SUBSTANTIAL QUESTION OF LAW . 7. SONAL CONSTRUCTIONS VS. DCIT 10 DTR (DEL.)(TRIB.) 507. (HEAD NOTES) SEARCH AND SEIZURE BLOCK ASSESSMENT COMPUTATION OF UN DISCLOSED INCOME ASSESSEE DOING BUSINESS OF DEVELOPMENT AND SALE OF REAL PROPERTIES DISCLOSED THE INVESTMENT IN CONSTRUCTION AND RECEIPT FROM SALES IN THE RETURNS OF INCOME FOR RELEVANT ASSESSMENT YEARS BEFORE THE DATE OF SEARCH AO ON THE BASIS OF LO OSE PAPERS FOUND DURING THE SEARCH OF PARTNER V MADE ADDITIONS IN BLOCK ASSESSMENT ON ACCOUNT OF DIFFERENCE IN COST OF CONSTRUCTION AND SALE PROCEEDS AS SHOWN IN THE BOOKS OF ACCOUNT AND AS REVEALED FROM SAID LOOSE PAPERS NOT JUSTIFIED LOOSE PAPERS NOT CONTAINING ANY DATE - WISE BREAK - UP OF ALLEGED INVESTMENTS AND SALE PROCEEDS BY THEMSELVES WITHOUT ANY CORROBORATIVE EVIDENCE COULD NOT FORM BASIS OF ADDITION IN BLOCK ASSESSMENT PRESUMPTION UNDER S. 132(4) DOES NOT EXTEND TO MAKING OF ASSESSMENT V IN HIS STATEMENT DURING SEARCH HAD DENIED ANY KNOWLEDGE ABOUT THE LOOSE PAPERS AND WAS NOT EXAMINED IN THE COURSE OF ASSESSMENT S ANOTHER PARTNER WHO HAD STATED THAT THE LOOSE PAPERS WERE IN THE HANDWRITING OF V WAS ALSO NOT EXAMINED IN THE COURSE OF ASSESSMENT PROPERTY WAS NOT GOT VALUED FROM DVO TO FIND OUT ACTUAL INVESTMENT PURCHASERS OF THE PROPERTIES WERE ALSO NOT EXAMINED TO FIND OUT WHETHER THEY HAD PAID ANY AMOUNT OVER AND ABOVE THE CONSIDERATION SHOWN IN THE BOOKS IN THE CIRCUMSTANCES ADDITIONS MADE IN BLOCK ASSESSMENT COULD NOT BE SUSTAINED. 8. CIT VS. S.M. AGGARWAL 293 ITR 43 (DEL.). (HEAD NOTES) APPEAL (HIGH COURT) - SUBSTANTIAL QUESTION OF LAW BLOCK ASSESSMENT BOTH CIT(A) AND TRIBUNAL HAVING DELETED ADDITION IN BL OCK ASSESSMENT BY CONCURRENT FINDINGS THAT DOCUMENT RELIED ON BY REVENUE WAS DUMB DOCUMENT SUCH FINDINGS WERE ESSENTIALLY OF FACT NOT GIVING RISE TO ANY SUBSTANTIAL QUESTION OF LAW APPEAL DISMISSED. IT IS WELL SETTLED THAT THE ONLY PERSON COMPETENT TO GIVE EVIDENCE ON THE TRUTHFULNESS OF THE CONTENTS OF THE DOCUMENT IS THE WRITER THEREOF. SO UNLESS AND UNTIL THE CONTENTS OF THE DOCUMENT ARE PROVED AGAINST A PERSON THE POSSESSION OF THE DOCUMENT OR HANDWRITING OF THAT PERSON ON SUCH DOCUMENT BY ITS ELF CANNOT PROVE THE CONTENTS OF THE DOCUMENT. THESE ARE THE FINDS OF FACT RECORDED BY BOTH THE AUTHORITIES I.E. CIT(A) AND THE TRIBUNAL. 9. CIT VS. P.V. KALYANASUNDARAM(2007) 294 ITR 49 (SC). 95 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) (HEAD NOTES) APPEAL (HIGH COURT) SUBSTANTIAL QUESTION OF LAW COMPUTATION OF UNDISCLOSED INCOME IN BLOCK ASSESSMENT IN HIS STATEMENT RECORDED ON THE DATE OF SEARCH SELLER ADMITTED THAT HE HAD RECEIVED A TOTAL CONSIDERATION OF RS.34.35 LAKHS FROM THE ASSESSEE FOR LAND BUT LATER FILED AN AFFIDAVIT DEPOSING THAT THE SALE PRICE WAS RS.4.10 LAKHS ONLY IN YET ANOTHER SWORN STATEMENT THE SELLER REVERTED TO HIS EARLIER VERSION AND DEPOSED THAT THE SALE PRICE WAS RS.34.85 LAKHS AO MADE ADDITION OF RS.30 75 005/ - AS UNDISCLOSED INCOME ON APPEAL CI T(A) HELD THAT THE STATEMENTS OF THE SELLER COULD NOT BE RELIED UPON AND DELTED THE ADDITION TRIBUNAL HELD THAT THE NOTINGS ON THE LOOSE PIECES OF PAPER WERE VAGUE AND COULD NOT BE RELIED UPON AND UPHELD THE DELETION OF ADDITION QUESTIONS AS TO WHAT IS THE ACTUAL SALE PRICE OF THE PROPERTY THE IMPLICATION OF THE CONTRADICTORY STATEMENTS MADE BY THE SELLER AND WHETHER RELIANCE COULD BE PLACED ON THE LOOSE SHEETS RECOVERED IN THE COURSE OF SEARCH ARE ALL QUESTIONS OF FACT AND NOT SUBSTANTIAL QUESTION S OF LAW APPEAL RIGHTLY DISMISSED BY THE HIGH COURT CIT VS. P.V. KALYANASUNDARAM (2006) 203 CTR (MAD) 449 AFFIRMED. 10. ACIT VS. SATYAPAL WASSAN 5 DTR (JAB.) (TRIB.) 202. (HEAD NOTES) INCOME FROM UNDISCLOSED SOURCES ADDITION UNDER S. 69 ADDITION ON THE BASIS OF DUMB DOCUMENT FOUND DURING SEARCH DOCUMENT FOUND DURING SEARCH CONTAINING THE FIGURE 22.30 AO SIMPLY PRESUMING THAT THE FIGURE 22.30 STANDS FOR RS.22.30 LAKHS AND TH ESE WERE ADVANCES GIVEN BY ASSESSEE DURING THE FINANCIAL YEAR RELEVANT TO ASSTT. YR. 1989 - 90 AND MAKING ADDITION AS UNDISCLOSED INCOME NOT JUSTIFIED THE DOCUMENT WAS A DUMB DOCUMENT CONTAINING NO SIGNATURE NO DATE NO UNIT LIKE RUPEE TON KILOGRAM C ENTIMETER ETC. FULL NAMES OF THE PARTIES WERE ALSO NOT GIVEN NOT SHOWING WHETHER IT WAS POSITION OF ASSETS OR LIABILITIES RECEIPTS OR PAYMENTS SALE OR PURCHASE OR ADVANCES MADE OR LOANS RECEIVED AO DID NOT CARRY OUT ANY ENQUIRY WHATSOEVER TO FIND OU T THE NATURE AND PERIOD OF TRANSACTIONS THE ASSESSEE HAD EXPLAINED BY WAY OF AFFIDAVIT THAT THE DOCUMENT BELONGED TO HIS BROTHER D - THERE WAS ALSO AN AFFIDAVIT FILED BY WIDOW OF D ACCORDING TO WHICH THE DOCUMENT BELONGED TO HER HUSBAND EVEN IF THE AFFIDAVITS ARE IGNORED AS FRESH EVIDENCE WRONGLY ADMITTED BY CIT(A) WHAT IS LEFT BEHIND IS THE DUMB DOCUMENT BEREFT OF ANY DETAILS WITHOUT THERE BEING ANY ENQUIRY BY THE AO TO CORRELATE THE SAME WITH OTHER DOCUMENTS SEIZED REGULAR BOOKS OF ACCOUNTS RECORDS KEPT BY OUTSIDE AGENCIES OR STATEMENTS OF CONCERNED PARTIES - THE FOUR ESSENTIAL COMPONENTS OF S. 4 VIZ. THE TAXABLE EVENT THE PERSON CHARGEABLE THE ASSESSMENT YEAR IN WHICH CHARGE IS LEVIABLE AND THE TOTAL INCOME ARE ABSENT IN THE CASE PR ESUMPTION UNDER S. 132(4A) IS NOT AVAILABLE FOR PURPOSES OF ASSESSMENT FURTHER IT BEING A REBUTTABLE AND SHIFTING PRESUMPTION IN THE FACE OF AFFIDAVITS FILED BY THE ASSESSEE AND WIFE OF D THAT IMPUGNED DOCUMENT BELONGED TO D IT COULD NOT BE INFER RED WITHOUT REBUTTING THE SAID AFFIDAVIT ITS THAT THE DOCUMENT AND TRANSACTIONS RECORDED THEREIN BELONGED TO ASSESSEE THERE BEING 96 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) NO MATERIAL ON RECORD TO INDICATE IN CERTAIN TERMS THE PERIOD OF TRANSACTIONS IT WAS NOT POSSIBLE TO INFER THAT THEY BELO NGED TO ASSESSMENT YEAR IN QUESTION - IT IS ALSO NOT POSSIBLE TO INFER THE QUANTUM OF INCOME FROM THE FACE OF THE DOCUMENT WITHOUT THERE BEING ANY INVESTIGATION THERE IS NO EVIDENCE ON RECORD TO SHOW THAT THE ASSESSEE OR HIS LRS TOOK ANY STEPS TO RECOV ER THE AMOUNTS OR THE AO HAS TAXED THE AMOUNTS AS WEALTH OF THE ASSESSEE ADDITION COULD NOT BE SUSTAINED UNDER S. 68 ALSO BECAUSE ON THE ONE HAND THE AO HAD MADE ADDITION UNDER S. 69 AND ON THE OTHER THE DOCUMENT BEING ONLY A LOOSE PAPER COULD NOT BE C ONSTRUED AS BOOK WITHIN THE MEANING OF S. 68 FOR THE SAME REASONS ADDITIONS OF RS.20 000 AND RS.90 000 ON THE BASIS OF YET ANOTHER DUMB DOCUMENT WERE ALSO UNCALLED FOR CONSEQUENTLY THERE IS NO QUESTION OF CHARGING OF TAX ON NOTIONAL INTEREST ON SU CH AMOUNTS. 11. JCIT VS. WEST BENGAL TRADING AGENCY 89 TTJ (CAL.) 917. (HEAD NOTES) SEARCH AND SEIZURE BLOCK ASSESSMENT COMPUTATION OF UNDISCLOSED INCOME ADDITION MADE ON THE BASIS OF INTENTION REFLECTED IN BOOKS OF ONE K TO SEND CASH TO AS SESSEE NO POSITIVE MATERIAL DIRECT OR CIRCUMSTANTIAL TO ESTABLISH THAT AMOUNT WAS RECEIVED BY ASSESSEE ADDITION MADE ON THE BASIS OF SUSPICION WAS RIGHTLY DELETED BY CIT()A. 12. N.K. MALHAN VS. DCIT 91 TTJ (DEL.) 938. (HEAD NOTES) SEARCH AND SEIZURE BLOCK ASSESSMENT COMPUTATION OF UNDISCLOSED INCOME ADDITION ON THE BASIS OF DUMB DOCUMENT DOCUMENT RECOVERED NEITHER STATING ANY DATE NOR ANY YEAR AGAINST ENTRIES NOR SHOWING WHETHER PAYMENT WAS MADE OR RECEIVED NO ADDITION CAN BE MADE O N THE BASIS OF SUCH A DUMB DOCUMENT IN THE ABSENCE OF ANY CORROBORATIVE MATERIAL. 13. ACIT VS. ASHOK KUMAR VIG 106 TTJ (RANCHI) 422. SEARCH AND SEIZURE BLOCK ASSESSMENT COMPUTATION OF UNDISCLOSED INCOME ADDITIONS MADE ON THE BASIS OF A DIA RY SEIZED FROM THE OFFICE PREMISES OF ASSESSEE EXPLANATION OF ASSESSEE THAT DIARY BELONGED TO HIS EMPLOYEE CONTAINING ENTRIES IN THE NATURE OF WORKSHEETS ONLY TRANSACTIONS WERE COMPLETED CHEQUES RECEIVED AND RECORDED IN BOOKS OF ACCOUNT ENTRIES IN THE DIARY ARE ALSO NOT RELIABLE BECAUSE NEXT YEARS ACCOUNTS DO NOT REVEAL MOVEMENT OF AMOUNTS FURTHER IN RESPECT OF BLOCK ASSESSMENT THERE IS NOT PRESUMPTION ABOUT EARNING OF INCOME AND AO CANNOT MAKE ADDITION ON THE BASIS OF INCOMPLETE ENTRIES ENTR IES IN THE DIARY DO NOT CLEARLY REVEAL THAT THE ASSESSEE HAS EARNED INCOME AND NO RELIANCE CAN BE PLACED ON SUCH DUMB DOCUMENT ADDITIONS RIGHTLY DELETED BY CIT(A). 97 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) 14. CIT VS. MAULIKKUMAR K. SHAH (2008) 307 ITR 137 (GUJ.). (HEAD NOTES) INCOME AD DITION ADDITION ON THE BASIS OF DIARY SEIZED DURING SEARCH IN HIS STATEMENT UNDER S. 132(4) ASSESSEE DENIED TO HAVE CHARGED ANY ON MONEY ON THE BOOKING OF SHOPS ONLY EVIDENCE WITH THE AO IS THE DIARY SEIZED FROM ASSESSEE DURING SEARCH AO DID NO T EXAMINE ANY PURCHASER OF SHOPS RIGHT FROM THE BEGINNING ASSESSEE EXPLAINED THAT NOTINGS IN THE DIARY ARE ROUGH ESTIMATES FOR SUBMISSION TO THE BANK FOR OBTAINING LOAN THIS IS SUPPORTED FROM THE FACT THAT SEIZED PAPERS CONTAIN FLOOR - WISE RATE OF THE SH OPS WHICH IS NOT A POSSIBLE SALE PRICE BURDEN HAD SHIFTED ON AO WHICH THE AO FAILED TO DISCHARGE ADDITIONS MADE BY AO TOWARDS ON - MONEY O THE BASIS OF SEIZED PAPER ALONE WITHOUT ANY CORROBORATIVE EVIDENCE CANNOT BE SUSTAINED. 15. BOMBAY HIGH COURT ORDER IN ITA NO.1224 OF 2011 IN THE CASE OF M/S. SUPREME INDUSTRIES LTD. VIDE ORDER DATED 17/1/2013. 4.THE ENTRIES FOUND IN THE SEIZED DOCUMENT ACCORDING TO THE TRIBUNAL CANNOT BE RELIED UPON THE ABSENCE OF SUPPORTING DOCUMENTS. THE REVENUE HAS NOT B ROUGHT ON RECORD ANY EVIDENCE TO SHOW THAT THE TRANSACTION FOR THE PURCHASE OF PLOT WAS FOR RS.98 LACS INCLUDING CASH PAYMENT OF RS.33 LACS. THUS THE APPEAL OF THE RESPONDENT ASSESSEE WAS ALLOWED. 5. WE NOTE THAT THE TRIBUNAL HAS ALLOWED THE APPEAL ON A FINDING A FACT. THIS FINDING BY THE TRIBUNAL IS REACHED TAKING INTO ACCOUNT THE VARIOUS EVIDENCES PRODUCED BY THE ASS3ESSEE TO CONCLUDE THAT AN AMOUNT OF RS.33 LACS HAD IN FACT NEVER CHANGED HANDS. CONSEQUENTLY SECTION 69 OF THE ACT WOULD BE INAPPLICA BLE. 16. CENTRAL BUREAU OF INVESTIGATION VS.V.C. SHUKLA AIR 1998(SC)1406 THIS COURT FURTHER OBSERVED THAT WHERE THE ENTRIES WERE NOT ADMITTED IT WAS THE DUTY OF THE BANK IF IT RELIED ON SUCH ENTRIES TO CHARGE ANY PERSON WITH LIABILITY TO PRODUCE EVIDE3NCE IN SUPPORT OF THE ENTRIES TO SHOW THAT THE MONEY WAS ADVANCED AS INDICATED THEREIN AND THEREAFTER THE ENTRIES WOULD BE OF USE AS CORROBORATIVE EVIDENCE. WHILE CONCURRING WITH THE ABOVE OBSERVATIONS THE OTHER LEARNED JUDGE STATED AS UNDER: IF N O OTHER EVIDENCE BESIDES THE ACCOUNTS WERE GIVEN HOWEVER STRONGLY THOSE ACCOUNTS MAY BE SUPPORTED BY THE PROBABILITIES AND HOWEVER STRONG MAY BE THE EVIDENCE AS TO THE HONESTY OF THOSE WHO KEPT THEM SUCH CONSIDERATION COULD NOT ALONE WITH REFERENCE TO S .34. EVIDENCE ACT BE THE BASIS OF A DECREE. 98 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) 17. CIT VS. SMT. P.K. NOORJAHAN (1999) 237 ITR 570 (SC). (HEAD NOTES) INCOME FROM UNDISCLOSED SOURCES ADDITION UNDER S. 69 DISCRETION OF AO INTENTION OF PARLIAMENT IN ENACTING S. 69 WAS TO CONFER A DISCRETION ON THE ITO IN THE MATTER OF TREATING THE UNEXPLAINED SOURCE OF INVESTMENT AS INCOME OF ASSESSEE ITO IS NOT OBLIGED TO TREAT SUCH SOURCE OF INVESTMENT AS INCOME IN EVERY CASE WHETHER IT HAS TO BE TREATED AS INCOME OR NOT HAS TO BE CONSIDERED IN THE LIGHT OF FACTS OF EACH CASE ASSESSEE A YOUNG LADY COULD NOT EXPLAIN SATISFACTORILY HER SOURCE OF INVESTMENT IN LANDS TRIBUNAL HELD THAT IT WAS NOT POSSIBLE FOR HER TO EARN THE AMOUNT EVEN DURING A DECADE AND THAT THE SOURCE OF INVESTMENTS COU LD NOT BE TREATED AS INCOME OF ASSESSEE NO ERROR IN THE FINDING OF THE TRIBUNAL. 18. V.K. BRAHMANKAR VS. JCIT (2004) 90 TTJ (IND) 821. (HEAD NOTES) SEARCH AND SEIZURE BLOCK ASSESSMENT COMPUTATION OF UNDISCLOSED INCOME CASH OF RS.46 30 000 FOUND FROM THE RESIDENTIAL PREMISES OF ASSESSEE SON OF ASSESSEE CLAIMING THE CASH AND ALSO EXPLAINING THE SOURCE OF IT DEPARTMENT NOT TAKING ANY IMMEDIATE STEPS TO VERIFY THE CLAIM OF THE SON SON ALSO NOT GIVEN OPPORTUNITY OF CROSS - EXAMI NING THE PERSONS WHOSE STATEMENTS AO WANTED TO USE AGAINST HIM ADDITION UNDER S. 69A NOT SUSTAINABLE MORE SO WHEN THE AO HAD ALSO NOT INDICATED THE PREVIOUS YEAR IN WHICH ADDITION WAS TO BE MADE. 19. ITO VS. HANUMAN PODDAR & ORS.(2005) 98 TTJ (ASR .) 705. (HEAD NOTES) INCOME FROM UNDISCLOSED SOURCES ADDITION NOTINGS ON LOOSE PAPERS FOUND DURING SURVEY SURVEY UNDER S. 133A WAS CARRIED OUT AT THE BUSINESS PREMISES OF TWO FIRMS AND CERTAIN LOOSE PAPERS WHERE FOUND IN THAT PREMISES ONLY TWO OF THE NINE ASSESSES ARE PARTNERS IN THE SAID FIRMS NAMES OF THE ASSESSES DID NOT APPEAR ON THESE PAPERS - FURTHER ENTRIES ON THESE PAPERS DO NOT SHOW WHETHER THESE WERE RECEIPTS EXPENSES INVESTMENTS UNACCOUNTED SALES OR PURCHASES NO INVESTMENT IN TH E FORM OF SHARE CERTIFICATES NSCS KVPS OR IN ANY OTHER FORM WAS FOUND IN THE NAME OF ANY OF THE ASSESSEE DURING THE COURSE OF SURVEY - AO MADE ADDITIONS ON THE BASIS OF NOTINGS ON LOOSE PAPERS AND DISCLOSURE OF RS.10 LAKH EACH ON BEHALF OF THE FIRMS MA DE BY A PARTNER OF THESE FIRMS NOT JUSTIFIED NO CORROBORATIVE MATERIAL OR EVIDENCE HAS BEEN PLACED ON RECORD TO JUSTIFY OR SUPPORT THE DISCLOSURE FURTHER THE DISCLOSURE HAS BEEN RETRACTED - THEREFORE THERE WAS NO BASIS FOR MAKING ADDITION OF RS.1 64 000 IN THE HANDS OF EACH ASSESSEE ON THE BASIS OF DUMB ENTRIES LIKEWISE ADDITIONS OF RS.35 000 EACH CANNOT BE JUSTIFIED ON THE BASIS THAT THE ENTRIES REPRESENT 99 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) INVESTMENT IN SHARES BY FAMILY MEMBERS OF THE ASSESSES EVEN ASSUMING THAT THESE ENTRIES REPRESENT INVESTMENT BY OTHER FAMILY MEMBERS THEY CANNOT BE TAXED IN THE HANDS OF THE ASSESSES ADDITIONS DELETED. 20. ADDITIONAL CIT VS. PRASANT AHLUWALIA (2005) 92 TTJ (CTK) 464. (HEAD NOTES) INCOME FROM UNDISCLOSED SOURCES ADDITION JOTTINGS ON LOOSE PAPER FOUND DURING SEARCH OPERATION EXPLANATION OF THE ASSESSEE THAT THE AMOUNT WRITTEN ON SAID PAPER WAS MERE ESTIMATION OF EXPENDITURE FOR FORTHCOMING PERIOD WAS PROBABLE ONLY ROUND FIGURES WERE FOUND INDICATING THAT THE ESTIMATED FIGURES W ERE NOTED FOR PLANNING PURPOSES - NO CORROBORATIVE EVIDENCE ON RECORDS THAT THE AMOUNTS WERE ACTUALLY EXPENDED HENCE ADDITION WAS RIGHTLY DELETED. 21. DEPUTY CIT VS. K. BABU RAO (2014) 39 CCH 034 HYD TRIB. (HEAD NOTES) SEARCH AND SEIZURE ASSES SMENT UNDISCLOSED INCOME SEARCH AND SEIZURE WAS CONDUCTED AT RESIDENTIAL PREMISES OF ASSESSEE NOTICE WAS ISSUED U/S 153A RETURN OF INCOME WAS FILED ADMITTING INCOME AO OBSERVED THAT ASSESSEE WAS INVOLVED IN SEVERAL FINANCIAL TRANSACTIONS RELATIN G TO REAL ESTATE BUSINESS FOR THE PERIOD 2003 TO 2008 AND THESE TRANSACTIONS WERE WRITTEN IN CODED FORM AND IN STATEMENT RECORDED ON DATE OF SEARCH ASSESSEE ADMITTED THAT SEIZED BOOKS CONTAIN DETAILS OF DAY TO DAY EXPENDITURE RECEIPTS AND PAYMENTS PARTL Y RELATED TO HIM AND PARTLY RELATED TO OTHERS AND BOOKS WERE WRITTEN BY MANAGERS AND TWO WIVES AO CONCLUDED THAT THREE DIGITS WERE OMITTED BY ASSESSEE FROM BOTH BANKING AND NONBANKING TRANSACTIONS AND MADE ADDITION BY AFFIXING THREE ZEROES FOR ALL TRANS ACTIONS CIT(A) DELETED ADDITION MADE BY AO HELD IN CASE OF ASSESSMENT U/S 153A THERE SHOULD BE MATERIAL ON RECORD TO SHOW THAT INCOME IS ASSESSED ON BASIS OF MATERIAL/EVIDENCE IN HANDS OF AO GUESS WORK NOT POSSIBLE IN CASE OF SEARCH ASSESSMENT FRAME D U/S 143(3) OR 153A WITHOUT ANY PROPER MATERIAL AO SHOULD HAVE BASIS FOR ASSUMING THAT EXPENDITURE INCURRED BY ASSESSEE IS OUT OF UNDISCLOSED INCOME UNSUBSTANTIATED LOOSE SHEETS CANNOT BE CONSIDERED AS A CONCLUSIVE EVIDENCE TO MAKE ANY ADDITION TOWAR DS UNDISCLOSED INCOME - IN INSTANT CASE ADDITIONS WERE MADE ON BASIS OF ENTRIES RECORDED IN TWO NOTE BOOKS SEIZED ENTRIES IN NOTEBOOK WERE UNSUBSTANTIATED ON BASIS OF SAME AO CONCLUDED THAT FIGURES MENTIONED THEREIN ARE TO BE READ BY ADDING 3 ZEROS A ND ASSESSED UNDISCLOSED INCOME OTHER THAN LOOSE PAPER AO HAS NOT BROUGHT ON RECORD ANY CORROBORATIVE MATERIAL OR EVIDENCE CIT(A) RIGHTLY CONCLUDED THAT IT CANNOT BE ACTED UPON AND DELETED ADDITION IMPUGNED ORDER UPHELD REVENUES APPEAL DISMISSED. 100 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) 7 7 . ON THE BASIS OF THE SE CASE LAWS IT IS A SETTLED LAW THAT THE ONUS IS ON THE REVENUE TO PROVE THAT THE ASSESSEE HAS EARNED THE INCOME. THE ONUS IS ON THE ASSESSEE TO PROVE WHEN THE ASSESSEE CLAIMS THAT THE INCOME IS EXEMPT THAT THE INCOME IS EXEMPT . THERE MUST BE EVIDENCE ON RECDORD. SUSPICION HOWSOEVER STRONG IT MAY BE CANNOT BE THE BASIS OF ADDITION. THERE IS NO BAR IN CARRYING ON THE BUSINESS BY THE SON AND WIFE OF THE ASSESSEE. WE NOTED THAT IN THIS CASE T HE REVENUE WHILE MAKING THE ADDITION S GOT INFLUENCED IN RESPECT OF THE SHARE APPLICATION MONEY RECEIVED IN THE EARLIER YEARS BY M/S. GAJANAN DISTRIBUTORS AND DEVELOPERS PVT. LTD. AND M/S. SHREE VIGNESH WAREHOUSE AND DISTRIBUTORS PVT. LTD. IN WHICH THE ASSESSEES SON AS WELL AS WIFE ARE DIREC TORS. THERE HAD BEEN A SEARCH IN THE CASE OF THE ASSESSEE. WE DID NOT FIND ANY UNDISCLOSED IMMOVEABLE OR MOVEABLE PROPERTY WAS FOUND IN POSSESSION OF THE ASSESSEE. EVEN NO ADDITION IN THIS REGARD HAS BEEN MADE. WE NOTED THAT NO INVESTMENT IN THE FORM O F SHARE CAPITAL WAS BROUGHT IN M/S. GAJANAN DISTRIBUTORS AND DEVELOPERS PVT. LTD. AND M/S. SHREE VIGNESH WAREHOUSE AND DISTRIBUTORS PVT. LTD. DURING THE IMPUGNED A.Y 2008 - 09. THE INVESTMENTS WERE MADE ONLY UPTO A.Y 2006 - 07 IN THESE COMPANAIES . EVEN NO SU RRENDER HAS BEEN MADE DURING THE ASSESSMENT YEAR BY THE ASSESSEES SON OR WIFE. NO CORROBORATIVE EVIDENCE WAS BROUGHT ON RECORD TO DEMONSTRATE THAT THE TRANSACTIONS NOTED IN THE LOOSE SHEETS REPRESENT THE COMMISSION RECEIVED BY THE ASSESSEE. EVEN THE PRO VISIONS OF SECTION 69 TO 69C WERE NOT INVOKED. WE ACCORDINGLY DELETE THE ADDITIONS AND ALLOW GROUND NOS. 8 TO 10 IN A.Y 2008 - 09. 7 8 . IN THE A.Y 2007 - 08 WE NOTED THAT THE GROUND NO. 10 RELATES TO MISTAKE COMMITTED BY CIT(A) WHILE CONCLUDING H IS FINDING A T PG. 105. 7 9 . AFTER HEARING THE RIVAL SUBMISSIONS WE NOTED THAT AT PG. 102 THE CIT(A) DIRECTED AO TO MAKE THE FOLLOWING ADDITIONS TOTALLING TO RS.4 50 18 400/ - IN A.Y 2007 - 08 : 101 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) AS PER LPS 1/1 PG. 1 & ITS BACK - RS.2 94 00 000/ - AS PER LPS 1/1 PG. 4 - RS.1 55 00 000/ - AS PER LPS 1/1 PG. 12 & 13 - RS.1 18 400/ - BUT WHILE CONCLUDING HIS FINDING HE STATED ADDITIONS CONFIRMED AT RS.7 70 34 400/ - FOR A.Y 2007 - 08. THE TOTAL OF THE ADDITIONS CONFIRMED AS PER PG. 102 COMES TO RS.4 50 18 400/ - . TO THA T EXTENT WE ALLOW THE GROUND OF THE ASSESSEE BUT IN OUR OPINION SINCE WE HAVE ALREADY DELETED THE ADDITIONS MADE BY CIT(A) DURING A.Y 2007 - 08 THIS GROUND BECOMES INFRUCTUOUS. 80 . THE LAST GROUND IN BOTH THE ASSESSEES APPEALS RELATES TO CHARGING OF INT EREST U/S 234A 234B AND 234C AND IS CONSEQUENTIAL IN NATURE. WE ACCORDINGLY DIRECT THE AO TO RE - COMPUTE THE INTEREST U/S 234A 234B AND 234C AFTER GIVING EFFECT TO OUR ABOVE ORDER. 8 1 . IN THE RESULT ALL THE APPEALS FILED BY THE ASSESSEE STANDS PARTLY ALLOWED AND ALL THE APPEALS FILED BY THE DEPARTMENT AS WELL AS THE CROSS OBJECTIONS FILED BY THE ASSESSEE STAND DISMISSED. 8 2 . ORDER PRONOUNCED IN PURSUANCE OF RULE 34(4) OF ITAT RULES 1963 BY PUTTING ON NOTICE BOARD OF THE BENCH AT INDORE . SD/ - ( MUKUL SHRAWAT ) JUDICIAL MEMBER SD/ - (P.K. BANSAL) ACCOUNTANT MEMBER DATED : 17 / 11 /201 4 *SSL* COPY TO : 102 IT(SS) NOS. 159 - 163/IND/2013(A.YS2004 - 05 - 2008 - 09) IT(SS) NOS.224 - 229/IND/2013 (A.YS : 2003 - 04 - 2008 - 09) & CO NOS. 102 - 106/IND/2013(A.YS : 2003 - 04 - 2006 - 07 & 2008 - 09) (1) APPELLANT (2) RESPONDENT (3) CIT CONCERNED (4) CIT(A) CONCERNED (5) D.R (6) GUARD FILE TRUE COPY BY ORDER