The ACIT Central-II, Bhopal v. Shri Nitin Agrawal, Bhopal

ITSSA 182/Ind/2019 | 2014-2015
Pronouncement Date: 25-03-2021 | Result: Dismissed

Appeal Details

RSA Number 18222716 RSA 2019
Assessee PAN ADUPA9906C
Bench Indore
Appeal Number ITSSA 182/Ind/2019
Duration Of Justice 1 year(s) 7 month(s) 15 day(s)
Appellant The ACIT Central-II, Bhopal
Respondent Shri Nitin Agrawal, Bhopal
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 25-03-2021
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 25-03-2021
Date Of Final Hearing 10-03-2021
Next Hearing Date 10-03-2021
Last Hearing Date 10-03-2021
First Hearing Date 11-06-2020
Assessment Year 2014-2015
Appeal Filed On 09-08-2019
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE HON'BLE KUL BHARAT JUDICIAL MEMBER AND HON'BLE MANISH BORAD ACCOUNTANT MEMBER IT(SS)A NO.182/IND/2019 ASSESSMENT YEAR 2014-15 APPELLANT BY SHRI S.S. DESHPANDE CA RESPONDENT BY SHRI S.S. MANTRI CIT DATE OF HEARING: 10 . 0 3 .20 2 1 DATE OF PRONOUNCEMENT: 25 .0 3 .2021 ACIT(CENTRAL) - II BHOPAL VS. SHRI NITIN AGRAWAL 1 MOUNT VIEW HILLS CHUNA BHATTI BHOPAL ( REVENUE ) (RESPONDENT ) PAN: A DUPA9906C ITA NO.657/IND/2019 ASSESSMENT YEAR 2014-15 ACIT(CENTRAL) - II BHOPAL VS. M/S S.V. INFRA DEVELOPERS PREMIER ORCHARD OPP. MBHRC KARNOND BY PASS ROAD BHOPAL ( REVENUE ) (RESPONDENT ) PAN:ADUPA9906C SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 2 / O R D E R PER MANISH BORAD: THE ABOVE CAPTIONED APPEALS FILED AT THE INSTANCE OF THE REVENUE PERTAINING TO DIFFERENT ASSESSEE(S) FOR ASS ESSMENT YEAR 2014-15 ARE DIRECTED AGAINST THE ORDERS OF LD. COMM ISSIONER OF INCOME TAX(APPEALS)-3 (IN SHORT LD. CIT] BHOPAL D ATED 17.05.2019 AND 05.03.2019 WHICH ARE ARISING OUT OF THE ORDER U/S. 143(3) OF THE INCOME TAX ACT 1961 (IN SHORT THE ACT) FOR A .Y. 2014-15 DATED 28.03.2016 FRAMED BY ACIT (CENTRAL)-II BHOPAL. 2. AS SOME OF THE ISSUES RAISED IN THESE APPEALS AR E COMMON AND ARISING OUT OF SIMILAR FACTS THESE WERE HEARD TOGET HER AT THE REQUEST OF BOTH THE PARTIES AND ARE BEING DISPOSED OFF BY W AY OF THIS CONSOLIDATED ORDER FOR SAKE OF CONVENIENCE AND BREV ITY. 3. REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL I N THE CASE OF ASSESSEE NAMELY SHRI NITIN AGRAWAL VIDE IT(SS)A NO. 182/IND/2019 FOR ASSESSMENT YEAR 2014-15 :- (1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 5 00 00 000/- MADE BY ASSESSING OFFICER ON ACCOUNT OF ADMISSION OF ADDITIONAL INCOME U/S 132(4 ) OF THE INCOME TAX SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 3 ACT 1961 (2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 26 42 910 /- MADE BY ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CASH OF THE INCOME TAX ACT 1 961 (3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 24 88 216/- MADE BY ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED JEWELLERY OF THE INCOME TAX ACT 1961 (4) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 50 00 000/- MADE BY ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED ADVANCES TO SHRI LILWANI OF THE INCOME TAX ACT 1961 (5) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 10 00 000/- MADE BY ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTMENT IN WATCHES OF THE INCOME TAX ACT I 96I (6) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 1 00 000/- MADE BY ASSESSING OFFICER ON ACCOUNT OF FOREIGN TRAVEL EXPENSES OF THE INCOME TA X ACT 196I (7) THE APPELLANT RESERVES HIS RIGHT TO ADD AMEND OR ALTER THE GROUNDS OF APPEAL ON OR BEFORE THE DATE; THE APPEAL IS FINALLY HEARD FOR DISPOSAL. 4. REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL I N THE CASE OF ASSESSEE NAMELY M/S S.V. INFRA DEVELOPERS VIDE ITA NO.657/ IND/2019 FOR ASSESSMENT YEAR 2014-15 :- SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 4 (1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 5 00 00 000/- MADE BY ASSESSING OFFICER ON ACCOUNT OF ADMISSION OF ADDITIONAL INCOME U/S 132(4 ) OF THE INCOME TAX ACT 1961 (2) THE APPELLANT RESERVES HIS RIGHT TO ADD AMEND OR ALTER THE GROUNDS OF APPEAL ON OR BEFORE THE DATE; THE APPEAL IS FINALLY HEARD FOR DISPOSAL. 5. FROM PERUSAL OF THE GROUNDS RAISED BY THE REVENU E WE FIND THAT THE ISSUE RAISED IN GROUND NO.1 OF EACH OF THE APPEAL IS COMMON THROUGH WHICH THE REVENUE HAS CHALLENGED THE FINDING OF LD. CIT(A) DELETING THE ADDITION MADE BY THE LD. A. O ON THE BASIS OF STATEMENT GIVEN U/S 132(4) OF THE ACT WHEREIN THE A SSESSEE DURING THE COURSE OF SEARCH ADMITTED ADDITIONAL INCOME. T HE REMAINING GROUNDS PERTAINS TO THE REVENUES APPEAL IN THE CAS E OF SHRI NITIN AGRAWAL. SINCE BOTH THE ASSESSEE(W) ARE FROM THE S AME GROUP AND WERE SUBJECTED TO THE SEARCH U/S 132 OF THE ACT ON 29.1.2014 WE WILL FIRST TAKE UP THIS COMMON ISSUE RAISED IN GROU ND NO.1 OF BOTH THE APPEALS BY REVENUE. AS AGREED BY BOTH THE PART IES WE WILL TAKE THE FACTS OF SHRI NITIN AGRAWAL FOR THE PURPOSE OF ADJUDICATING THIS COMMON ISSUE RAISED BEFORE US. SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 5 6. BRIEF FACTS OF THE CASE ARE THAT THE APPELLANT I S AN INDIVIDUAL AND DERIVES INCOME FROM BUSINESS RENTAL INCOME AND OTHER SOURCES. SEARCH AND SEIZURE OPERATION U/S 132 OF T HE I.T. ACT WAS CARRIED OUT AT THE RESIDENTIAL AND BUSINESS PREMISE S OF THE APPELLANT AS WELL AS ON THE PREMISES OF OTHER CONCE RNS/BUSINESS ASSOCIATES OF SIGNATURE GROUP ON 29.01.2014. NOTICE U/S 153A OF THE ACT WERE ISSUED ON 12.09.2014. IN RESPONSE TO THE SAID NOTICE ASSESSEE HAS FILED RETURN OF INCOME ON 30.11.2014 D ECLARING INCOME OF RS.1 84 65 660/-. DURING THE COURSE OF ASSESSMEN T PROCEEDINGS LD. A.O REFERRED TO THE STATEMENT GIVEN BY THE ASSE SSEE U/S 132(4) OF THE ACT ADMITTING ADDITIONAL INCOME ON ACCOUNT O F VARIOUS DISCREPANCIES NOTICED/INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. DETAILED SUBMISSION FILED BY THE ASSESSEE WERE CONSIDERED. THE STATEMENT GIVEN BY THE ASSESSEE U/ S 132(4) OF THE ACT WAS COMPOSITE IN NATURE REFERRING TO VARIOUS DI SCREPANCIES NOTICED DURING THE COURSE OF SEARCH. LD. A.O COMPL ETED THE ASSESSMENT ASSESSING INCOME AT RS.8 21 10 518/- AFT ER MAKING FOLLOWING ADDITIONS:- SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 6 (I) ADMISSION OF ADDITIONAL INCOME U/S 132(4) RS. 5 00 00 000/- (II) UNEXPLAINED CASH RS. 26 42 910 /- (III)UNEXPLAINED JEWELLERY RS. 48 01 948/- (IV)UNEXPLAINED ADVANCE TO SHRI LILWANI RS. 50 00 000/- (V) UNEXPLAINED INVESTMENT IN WATCHES R S. 10 00 000/- (VI)FOREIGN TRAVEL EXPENSES RS. 2 00 000/- 7. AGGRIEVED ASSESSEE PREFERRED APPEAL BEFORE LD. C IT(A) AND PARTLY SUCCEEDED. 8. NOW THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL . 9. AS REGARDS THE COMMON GROUND NO.1 PERTAINING TO THE ADDITION MADE BY THE LD. A.O BASED ON THE STATEMENT GIVEN U/S 132(4) OF THE ACT AND SUBSEQUENTLY DELETED BY THE F IRST APPELLATE AUTHORITY LD. DEPARTMENTAL REPRESENTATIVE VEHEMENT LY ARGUED SUPPORTING THE ORDER OF LD. A.O AND ALSO SUBMITTED THAT THE STATEMENT GIVEN U/S 132(4) OF THE ACT WAS ON OATH A ND NO RETRACTION OF SAID STATEMENT WAS MADE IN REASONABLE TIME. RET RACTION OF SAID STATEMENT BY WAY OF NOT OFFERING THE INCOME IN THE RETURN OF INCOME IS NOT ACCEPTABLE AND LD. A.O HAS RIGHTLY MADE THE ADDITION. SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 7 10. PER CONTRA LD. COUNSEL FOR THE ASSESSEE SUPPORT ING THE FINDING OF LD. CIT(A) ALSO MADE WRITTEN SUBMISSION WHICH IS REPRODUCED BELOW:- THE ASSESSEE IS AN INDIVIDUAL DERIVING INCOME FROM DEVELOPMENT CONSTRUCTION AND SALE OF REAL ESTATE. THE ASSESSEE ALSO DERIVES INCOME FROM VARIOUS PARTNERSHIP FIRMS. THE ASSESSEE IS FIL ING THE RETURNS REGULARLY. THE BOOKS OF ACCOUNTS ARE AUDITED AND THE TAR IS FI LED. A SEARCH WAS CONDUCTED ON THE SIGNATURE GROUP AND ALSO AT THE PR EMISES OF THE ASSESSEE. DURING THE COURSE OF THE STATEMENT RECORD ED U/S 132(4) THE ASSESSEE DECLARED AN ADDITIONAL INCOME OF RS.5 00 0 0 000/- FOR THE A.Y. 2014-15. IN THE STATEMENT Q.50 WAS ASKED AS 'DURING THE COUR SE OF SEARCH IN YOUR HOUSE SUBSTANTIAL JEWELLERY WAS FOUND. ON VERIFICAT ION OF THE PROJECTS IT IS SEEN THAT THE WORK-IN-PROGRESS IN VARIOUS FIRMS DO NOT MATCH WITH THE AMOUNTS DISCLOSED IN THE BOOKS OF ACCOUNTS. BESIDES THIS IN YOUR HOUSE AT 1 MOUNT VILLA CH UNA BHATTI BHOPAL SUBSTANTIAL I NVESTMENT HAS BEEN MADE. ALL THESE QUESTIONS HAVE NOT BEEN SATISFACTOR ILY ANSWERED. YOU ARE AGAIN GIVEN AN OPPORTUNITY TO EXPLAIN THIS THE ASSESSEE GAVE A REPLY AS ----- DURING THE COURS E OF THE PROCEEDINGS CONSIDERING THE DOCUMENTS PAPERS AND JEWELLERY ET C. FOUND I HAVE CONSULTED THE MANAGER ABHISHEK JAIN. DURING THIS F INANCIAL YEAR IN THE VARIOUS PROJECTS OF MY FIRMS PREMIUM ARCADE ORCHI D SQUARE AND RED SQUARE CASH RECEIPTS WHICH ARE NOT INCORPORATED IN THE BOOKS ARE APPROX. TO THE TUNE OF RS. 10 CRORES. OUT OF THIS I HAVE I NVESTED 1 CRORE IN JEWELLERY 1 CRORE IN THE FURNISHING OF THE HOUSE AND APPROX. 8 CRORES IN SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 8 WORK-IN-PROGRES OF VARIOUS FIRMS THE DETAILS OF WH ICH ARE AS UNDER SWADESH DEVELOPERS AND COLONISERS 4 CROR ES S. V. INFRA DEVELOPERS 3.5 CRORES SWADESH DEVELOPERS 0.50CRORES I OFFER THE ABOVE AMOUNT AS UNDISCLOSED INCOME. THI S INCOME IS BESIDES THE INCOME DISCLOSED IN THE BOOKS OF VARIOUS FIRMS FOR THE F.Y. 2013-14. I WILL DECLARE THE INCOME IN THE INCOME TAX RETURN AS UNDE R: SWADESH DEVELOPERS AND COLONISERS 5 CRORE S SS. V. INFRA DEVELOPERS 5 CRORES HOWEVER WHILE FILING THE RETURNS THE ASSESSEE RET RACTED FROM THE SAID SURRENDER AND FILED THE RETURNS ON THE BASIS OF THE ACCOUNTS WHICH ARE DULY AUDITED. 1. IN THE COURSE OF THE ASSESSMENT PROCEEDINGS ALL THE INFORMATION AS REQUIRED BY THE AO FROM TIME TO TIME WAS FURNISHED. THE ASSESSEE IS IN THE BUSINESS OF REAL ESTATE BUILDERS AND DEVELOPERS. T HE ASSESSEE DURING THE RELEVANT PERIOD WAS DEVELOPING A RESIDENTIAL COMPLE X IN THE INDIVIDUAL CAPACITY AND ALSO IN THE FIRMS IN WHICH HE WAS A PA RTNER. THE EXPENSE INCURRED ON THE PURCHASE OF LAND AND CONSTRUCTION E XPENSES ON THE PROJECTS WERE THE BUSINESS EXPENSES OF THE ASSESSEE. THE ASS ESSEE HAD MAINTAINED REGULAR BOOKS OF ACCOUNT IN WHICH ALL TH E EXPENSES INCLUDING THE COST OF CONSTRUCTION WERE DULY RECORDED. THESE BOOKS WERE PRESENTED BEFORE THE AO DURING THE COURSE OF ASSESSMENT PROCE EDINGS AND WERE DULY CHECKED BY HIM AND NO DEFICIENCY WAS FOUND IN THE B OOKS OF ACCOUNT OR THE SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 9 RECORDS MAINTAINED. NO EVIDENCE WAS FOUND DURING TH E COURSE OF SEARCH OR AFTER WORDS DURING POST SEARCH ENQUIRY OR PRE ASSESSMENT ENQUIRIES TO SUGGEST THAT THE ASSESSEE HAS RECEIVED ANY EXTRA RE CEIPTS OR HAS INCURRED ANY UNRECORDED EXPENSE. THEREFORE THE ASSESSEE RET RACTED FROM THE DECLARATION MADE FOR ADDITIONAL INCOME U/S 132(4). 2. THE ID. A.O. DID NOT CONSIDER THE SUBMISSIONS OF TH E ASSESSEE AND MADE VARIOUS ADDITIONS ON THE BASIS OF THE LOOSE PAPERS AND ALSO ON THE BASIS OF THE INVESTMENTS MADE BESIDES THE CASH FOUND THE J EWELLERY AND THE INVESTMENTS IN THE RESIDENTIAL HOUSE. DURING THE CO URSE OF THE ASSESSMENT PROCEEDINGS THE MATTER WAS REFERRED TO THE DVO REG ARDING THE INVESTMENT IN THE RESIDENTIAL HOUSE. ON THE BASIS OF THIS REPO RT THE ADDITIONS WERE MADE IN VARIOUS YEARS. THE ID. A.O. FURTHER MADE AD DITIONS OF RS.26 42 910/- FOR ALLEGED UNEXPLAINED CASH FOUND RS.48 OL 948/- FOR ALLEGED UNEXPLAINED INVESTMENT IN JEWELLERY RS.IO OO OOO/- FOR ALLEGED UNEXPLAINED INVESTMENTS IN WATCHES. ON THE BASIS OF THE LOOSE PAPERS THE ID. A.O. MADE THE ADDITION OF RS.5O OO OOO/- FOR AL LEGED UNEXPLAINED ADVANCES TO MR. LALWANI AND RS.2 OO OOOI- FOR FOREIGN TRAVEL. 3. IN APPEAL IT WAS SUBMITTED BEFORE THE LD. CIT(A) T HAT THE ASSESSEE HAS INCURRED EXPENSES ON THE PROJECT WHICH ARE DULY REC ORDED IN THE REGULAR BOOKS OF ACCOUNTS AND WERE SUPPORTED BY PROPER SUPP ORTING EVIDENCES AND FORMED PART OF THE SALES/WLP SHOWN BY THE ASSESSEE. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE HAS BEEN MAINTAINING RE GULAR BOOKS OF ACCOUNTS WHICH WERE DULY AUDITED AND THE AUDIT REPO RT ALONG WITH AUDITED FINANCIAL STATEMENTS WERE DULY FURNISHED BEFORE THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS. NO DISCREPANCY WAS FOUND IN THE BOOKS OF ACCOUNT NOR ANY PAPER/PROOF WAS FOUND THAT THE ASS ESSEE HAS RECEIVED ANY EXTRA PAYMENT ON SALE OF FLATS. NO UNDISCLOSED INVESTMENT OR ASSETS SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 10 WERE FOUND DURING THE COURSE OF SEARCH. IT WAS FURT HER SUBMITTED THAT THE ADDITIONS CANNOT BE MADE WITHOUT FINDING ANY INCRIM INATING MATERIAL MERELY ON THE BASIS OF THE STATEMENT RECORDED U/S 1 32(4). THE ASSESSEE RELIED ON NUMBER OF JUDGMENTS OF VARIOUS HIGH COURT S AND THE JUDGMENTS OF THE INDORE TRIBUNAL. 4. AFTER CONSIDERING THE VARIOUS OBJECTIONS RAISED BY THE ASSESSEE AND ANALYSING THE DIFFERENT CASE LAWS THE LD. CIT(A) A LLOWED THE ASSESSEE'S APPEAL. ARGUMENTS IT IS SUBMITTED THAT NO ADDITION WAS WARRANTED AS T HE SURRENDER HAS NOT BEEN MADE WITH REFERENCE TO ANY LOOSE PAPER SEIZED DURING THE COURSE OF SEARCH AND WAS ACCORDINGLY NOT IN ACCORDANCE WITH T HE PROVISIONS OF SECTION 132(4). THE AO HAS FAILED TO BRING ON RECOR D ANY SPECIFIC INSTANCE OF THE ASSESSEE HAVING EARNED ANY UNDISCLOSED INCOM E OR HAVING MADE ANY UNEXPLAINED INVESTMENT WHICH COULD JUSTIFY THE ADDITION UNDER REFERENCE. THE SOLE BASIS FOR MAKING THE ADDITION I S THE STATEMENT MADE BY ONE OF THE PARTNERS. THE LD. A.O. HAS MADE VARIOUS ADDITIONS FOR THE DOCUMENTS FOUND. THUS ALL THE LOOSE PAPERS AND THE INVESTMENTS HAVE BEEN CONSIDERED BY THE A.O. AND ACCORDINGLY HE HAS MADE THE ADDITIONS UNDER VARIOUS HEADS. AFTER MAKING THE ADDITIONS ON THE BASIS OF VARIOUS PAPERS THERE REMAINS NO SCOPE FOR MAKING ANY FURHER ADDITION ON THE BASIS OF DECLARATION MADE IN THE STATEMENT. IT IS HUMBLY SUBMITTED THAT NO INCRIMINATING MATERI AL WAS FOUND DURING THE COURSE OF THE SEARCH TO SHOW THAT THE ASSESSEE HAS RECEIVED ANY EXTRA PAYMENT THAN MENTIONED IN THE BOOKS OF ACCOUNTS NOR HAS INCURRED ANY EXTRA EXPENDITURE ON THE CONSTRUCTION OF BUILDINGS NOR ANY PAPER/PROOF WAS FOUND THAT THE ASSESSEE HAS RECEIVED ANY EXTRA PAYMENT ON SALE OF SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 11 FLATS. NO UNDISCLOSED INVESTMENT OR ASSETS WERE FOU ND DURING THE COURSE OF SEARCH. THE ASSESSEE HAS MAINTAINED REGULAR BOOKS O F ACCOUNTS WHICH ARE NOT FOUND TO BE INCOMPLETE OR UNRELIABLE. THE BOOKS OF ACCOUNTS ARE NOT REJECTED. IT IS FURTHER SUBMITTED THAT NO ADDITION CAN BE MAD E WITHOUT FINDING ANY INCRIMINATING MATERIAL MERELY ON THE BASIS OF THE D ECLARATION. IN THIS CONNECTION THE ATTENTION IS DRAWN TO THE DIRECT JUD GMENT OF THE HON'BLE INDORE TRIBUNAL IN THE CASE OF SHRI SUDIP MAHESHWAR I IN ITA 524/IND/2013 PRONOUNCED ON 13/0212019 AND IN THE CA SE OF M/S ULTIMATE BUILDERS IN ITA 134/2019 PRONOUNCES ON 091 08/2019. THE HON'BLE TRIBUNAL HAS RELIED ON THE VARIOUS JUDGMENT S OF THE VARIOUS HIGH COURTS SPECIALLY THE DECISION OF THE HON. JHARKHAND HIGH COURT IN THE CASE OF SHRI GANESH TRADING EO. VIS. CIT AND THE DECISIO N OF HON. GUJRAT HIGH COURT IN THE CASE OF KAILASHBEN MANGARLAL CHOKSI V/S. CLT. AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSES SEE AND THE PAPERS FILED DURING THE COURSE OF THE APPEAL THE ID. CIT(A ) ALLOWED THE APPEAL. IN VIEW OF THE ABOVE IT IS HUMBLY SUBMITTED THAT T HE ORDER OF THE ID. CIT(A) IS CORRECT IN DELETING THE SAID ADDITION. THUS THE ADDITION DELETED BY ID. CLT(A) IS CORRECT AND MAY PLEASE BE UPHELD. 11. THE CRUX OF THE ARGUMENT OF LD. COUNSEL FOR THE ASSESSEE ARE THAT THE ALLEGED ADDITION IS PURELY BASED ON THE ST ATEMENT GIVEN U/S 132(4) OF THE ACT AND THERE IS NO CORROBORATION WIT H ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF S EARCH. IT IS ALSO SUBMITTED THAT WHATEVER DISCREPANCIES WERE NOTICED DURING THE SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 12 COURSE OF SEARCH SEPARATE ADDITIONS HAD ALREADY BEE N MADE BY THE LD. A.O. 12. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US. THE COMMON ISSUE RAISED BY THE R EVENUE IS WITH REGARD TO THE ADDITIONS MADE BY LD. A.O IN THE HAND S OF ASSESSEE(S) SHRI NITIN AGRAWAL AND M/S S.V. INFRA DEVELOPERS FO R ASSESSMENT YEAR 2014-15 BY THE LD. A.O ON THE BASIS OF ADMISSI ON OF ADDITIONAL INCOME IN THE STATEMENT GIVEN U/S 132(4) OF THE ACT AT RS.5 CRORES EACH IN THE HANDS OF BOTH THE ASSESSEE(S) BUT WRONG LY DELETED BY LD. CIT(A) OBSERVING THAT THE IMPUGNED ADDITIONS ARE NO T CORROBORATING WITH ANY INCRIMINATING MATERIAL FOUND DURING THE CO URSE OF SEARCH. 13. WE OBSERVE THAT SEARCH U/S 132 OF THE ACT WAS C ONDUCTED AT THE GROUP CONCERN/BUSINESS ASSOCIATES OF SIGNATURE GROUP ON 29.1.2014. MR. NITIN AGRAWAL IS ONE OF THE KEY PER SON CONTROLLING THE BUSINESS OF THE GROUP. SEARCH WAS CONDUCTED AT HIS RESIDENTIAL PREMISES ALSO. DURING THE COURSE OF SEARCH UNEXPLA INED JEWELLERY UNEXPLAINED CASH UNEXPLAINED INVESTMENT AND ADVANC E WERE NOTICED. THEREAFTER STATEMENT U/S 132(4) OF THE AC T OF SHRI NITIN SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 13 AGRAWAL WAS TAKEN WHEREIN HE ACCEPTED TO OFFER ADDI TIONAL INCOME IN THE NAME OF VARIOUS BUSINESS CONCERNS AS WELL AS HIS INDIVIDUAL NAME. IN THE INSTANT APPEAL THE IMPUGNED ACCOUNT O F RS.5 CRORES EACH WAS SURRENDERED BY NITIN AGRAWAL IN HIS OWN NA ME AS WELL AS M/S S.V. INFRA DEVELOPERS. LD. A.O THEREAFTER DURI NG THE COURSE OF ASSESSMENT PROCEEDINGS CALLED FOR REPLY. DETAILED SUBMISSIONS WITH REGARD TO THE DISCREPANCIES FOUND DURING THE COURSE OF SEARCH WERE FILED. LD. A.O CONCLUDED THE ASSESSMENT BY MAKING V ARIOUS ADDITIONS UNDER DIFFERENT HEADS IN UNEXPLAINED CAS H UNEXPLAINED JEWELLERY UNEXPLAINED ADVANCE UNEXPLAINED INVESTM ENT AND FOREIGN TRAVEL EXPENSES. LD. A.O SEPARATELY MADE ADDITION OF RS.5 CRORES FOR ADDITIONAL INCOME OFFERED IN STATEMENT U/S 132(4) O F THE ACT BUT NOT OFFERED TO TAX IN THE RETURN OF INCOME. 14. WHEN THE MATTER CAME BEFORE LD. CIT(A) HE DELET ED THE ADDITION OF RS.5 CRORES MADE IN THE HANDS OF SHRI N ITIN AGRAWAL MADE BY THE LD. A.O GIVING DETAILED FINDING ON FACT AND PLACING RELIANCE ON VARIOUS DECISIONS. RELEVANT EXTRACT IS REPRODUCED BELOW:- SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 14 4.2 GROUND NO. 3:- THROUGH THIS GROUND OF APPEAL THE APPELLANT HAS CHALLENGED THE ADDITION OF RS. 5 00 00 000/- ON ACCOUNT OF ADMISSION OF UNDISCLOSED INCOME U/S 132(4). DURING THE COURSE OF SEARCH NO INCRIMINATING DOCUMENTS HAVE BEEN FOUND FROM THE OF FICE OR FROM THE PROJECT SITE OF THE APPELLANT. THERE WERE OTHER DOC UMENTS WHICH WERE DULY EXPLAINED BY THE APPELLANT. NO UNDISCLOSED INVESTME NT HAS BEEN FOUND. THE ACCOUNTS FOR THE RELEVANT YEARS HAVE ALSO BEEN EXAMINED BY THE ASSESSING OFFICER TO REASSESS THE INCOME. THE ASSES SING OFFICER DID NOT FIND ANY IRREGULARITY OF ANY SORT SO AS TO WARRANT ANY ADDITION TO THE RETURNED INCOME. IT IS TO BE MENTIONED THAT THERE I S NO ADDITION TO THE RETURNED INCOME IN ANY OF THE YEARS UP TO THE A.Y. 2014-15. THE AO MADE THE ADDITION IN THE A. Y. 2014-15 AS A RESULT OF SE ARCH IS BASED ON THE STATEMENT OF SHRI NITIN AGRAWAL RECORDED U/S 132(4) . NO DOCUMENTARY EVIDENCE HAS BEEN BROUGHT IN SUPPORT OF THE ADDITIO N. 4.2.1 THE ALLEGATION THAT THERE IS A HUGE DIFFERENC E IN THE WORK IN PROGRESS FOUND AT SITE AND THAT MENTIONED IN THE FINANCIAL B OOKS OF ACCOUNT IS NOT SUPPORTED BY ANY DOCUMENT FOUND DURING THE COURSE O F SEARCH. DURING THE COURSE OF SEARCH OR POST SEARCH ENQUIRY OR EVEN DUR ING ASSESSMENT PROCEEDINGS NO PARTICULARS OF WHAT IS THE QUANTUM OF DIFFERENCE HOW THE DIFFERENCE HAS BEEN ARRIVED AT BOTH IN TERMS OF QU ANTITY AND VALUE WAS NEVER WORKED OUT. DURING ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER DID NOT REFER THE CASE TO THE DVO OR MADE ANY EFFOR TS TO ARRIVE AT THE VARIATION IN THE BOOK FIGURES AND THAT IS AVAILABLE AT THE PROJECT SITE. THERE IS NO BASIS WHATSOEVER ON ACCOUNT OF WHICH IT CAN B E STATED THAT THERE IS AN EXCESS INVESTMENT IN WORK IN PROGRESS TO JUSTIFY THE ADDITION OF RS. 5 CRORES. SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 15 4.2.2 THE ABOVE FACT CAN BE CONFIRMED FROM PAGE-16 OF THE STATEMENT DATED 30-31/01/2014 RECORDED IN RESPECT OF SHRI NITIN AGRAWAL. IT HAS B EEN STATED THAT THE FIGURES OF 'WORK-IN-PROGRESS' AS NO TED AT SITE DO NOT MATCH WITH THE BOOKS OF ACCOUNT. THERE IS NO REFERENCE TO ANY QUANTITY OR VALUE OF STOCK EXCESS OR SHORT. HOW COULD THE APPELLANT BE ASKED TO EXPLAIN THE DIFFERENCE WHICH IS NOT QUANTIFIED? IT IS ALSO NOT MENTIONED AS TO WHETHER THE DIFFERENCE IS ON THE POSITIVE SIDE OR NEGATIVE SIDE. NOT HAVING DONE SO THE MERE STATEMENT MADE BY THE ASSESSEE WHO WAS SI CK AND UNDER SEDATION AND WITHOUT ACTUAL FIGURES IN HAND TO SHO W THAT THERE WAS A DIFFERENCE CANNOT BE MADE THE BASIS OF MAKING AN A DDITION TO THE RETURNED INCOME. COPY OF THE RELEVANT PAGES OF THE STATEMENT HAS BEEN REPRODUCED BY THE AO AT PAGE NO. 10 AND 11 OF THE ASSESSMENT O RDER. THE STATEMENT RECORDED DOES NOT SPEAK ABOUT THE QUANTITY OF THE M ATERIAL FOUND DURING THE COURSE OF SEARCH. THE INVENTORY DRAWN DURING TH E COURSE OF SEARCH IN RESPECT TO THE MATERIAL FOUND IS ALSO NOT EXCESSIVE . DURING THE COURSE OF SEARCH NO EXERCISE HAS BEEN DONE TO ARRIVE TO THE B OOK STOCK VALUE. 4.2.3 IT IS TO BE MENTIONED THAT SHRI NITIN AGRAWAL HAD S UFFERED A HEART ATTACK IN THE RECENT PAST. HE WAS UNDER MEDICAL OBS ERVATION AND MEDICATION. HIS HEALTH DETERIORATED DURING THE SEAR CH OPERATION WHICH CONTINUED FOR THREE DAYS. DOCTOR WAS CALLED AND AS PER DOCTOR'S ADVICE SHRI NITIN AGRAWAL WAS KEPT UNDER SEDATION. MEDICAL CERTIFICATE HAS BEEN PRODUCED DURING THE COURSE OF ASSESSMENT PROCEEDING S. THEREFORE SUCH STATEMENT CANNOT BE CONSIDERED AS A VOLUNTARY STATE MENT. A STATEMENT TAKEN UNDER SUCH CONDITIONS CANNOT CERTAINLY BE MAD E THE BASIS OF ADDITION IN ASSESSMENT; MORE SO WHEN THERE ARE NO C ORROBORATING FACTS BY WAY OF INCRIMINATING DOCUMENTS FOUND OR PROOF OF UN DISCLOSED INCOME BEING DISCOVERED TO SUPPORT THE STATEMENT. NEITHER DURING THE COURSE OF SEARCH OR POST SEARCH ENQUIRIES NOR DURING THE COUR SE OF ASSESSMENT SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 16 PROCEEDINGS HAVE REVEALED ANY UNEXPLAINED OR UNDISC LOSED INVESTMENTS INCOME OR OTHER EXPENDITURE. FURTHER THE VOLUME OF THE MATERIAL AT SITE IS SO SMALL THAT IT CANNOT BY ANY MEANS JUSTIFY AN UND ISCLOSED INCOME OF RS. 5.00 CRORES. 4.2.4 WHILE GOING THROUGH THE STATEMENT AT PAGE NO. 10-11 OF THE STATEMENT IN QUESTION IT IS OBSERVED THAT AN AMOUNT OF RS. 3.50 CRORES HAS BEEN STATED AGAINST M/S S V INFRA DEVELOPERS AS UND ISCLOSED INVESTMENT; ALSO A SUM OF RS. 50 LACS HAS BEEN SHOWN TOWARDS UN DISCLOSED INCOME WITH M/S SWADESH DEVELOPERS AND BUILDERS. HOWEVER LATER ON THE SAME HAS BEEN SUMMED UP AT RS.5.00 CRORES IN THE CASE OF SV INFRA DEVELOPERS AND NIL IN THE CASE OF SWADESH DEVEOPLERS AND BUILD ERS. ALL IT SHOWS IS THAT THE DISCLOSER DOSE NOT REVEALS THE TRUE AND CO RRECT PICTURE OF UNDISCLOSED INCOME. SUCH A STATEMENT CARRIES NO WEI GHT IN THE EYES OF LAW . THE A.O. HAS PLACED HIS RELIANCE ON THE DECISION OF THE HON'BLE HIGH COURT OF PUNJAB & HARYANA IN THE CASE OF CIT VS RAKESH MAHAJAN 214 CT R 218 (2007). I HAVE CAREFULLY GONE THROUGH THE SAID DECISION I AM OF THE CONSIDERED OPINION THAT THE FACTS IN THE INSTANT CA SE ARE CLEARLY DISTINGUISHABLE FROM THE FACTS IN THE SAID DECISION OF THE HON'BLE PUNJAB AND HARYANA HIGH COURT IN AS MUCH AS IN THE INSTANT CASE NO DISPROPORTIONATE ASSET HAS BEEN BROUGHT ON RECORD.' I FIND THAT THE CASE OF THE APPELLANT FINDS SUPPORT FROM THE FOLLOWING DECISIONS: A) M. NARA YANAN & BROS. VS. ASSISTANT COMMISSIONER OF INCOME TAX (20 LL) 243 CTR (MAD) 588 : (2011) 339 FIR 192 : (2011) 60 DTR 233 XXXXXX ..... XXXXX SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 17 B) INCOME TAX OFFICER VS. VIJAY KUMAR KESAR (2010) 231 CTR (CHATTISGARH) 165: (2010) 327 ITR 497: (2010) 36 DTR 13 XXXXXX ..... XXXXX C) COMMISSIONER OF INCOME TAX VS. SHRL RAMDAS MOTOR TR ANSPORT (2000) 163 CTR (AP) 403 : (1999) 238 ITR 177 (AP) : (1999) 102 T AXMAN 300 (AP) XXXXXX ..... XXXXX D) KAILASHBEN MANHARLAL CHOKSHI VS. COMMISSIONER OF INCOME TAX (2008) 220 CTR (GUJ) 138 : (2010) 328 ITR 411 : (2008) 174 TAXMAN466 : (2008) 14 DTR 257 XXXXXX ..... XXXXX IT IS THE CASE OF THE ASSESSEE THAT DURING THE COUR SE OF SEARCH & SEIZURE NO INCRIMINATING MATERIAL OR UNDISCLOSED INCOME OR INVESTMENTS WERE FOUND. IT IS STATED THAT THE ASSESSEE WAS UNDER MEN TAL PRESSURE AND TIRED. THEREFORE TO BUY PEACE OF MIND HE ACCEPTED AND DE CLARED RS.5 CRORES DURING THE COURSE OF SEARCH. IT IS ALSO STATED THAT THE CASE LAWS AS RELIED BY THE A.O. ARE NOT APPLICABLE ON THE FACTS OF THE PRESENT CASE. THE HON'BLE SUPREME COURT RENDERED IN THE CASE OF PULLANGODE RU BBER PRODUCE CO. LTD. 91 ITR 18 (SC) WHEREIN THE HON'BLE COURT HAS HELD THAT ADMISSION CANNOT BE SAID THAT IT IS CONCLUSIVE. RETRACTION FROM ADMI SSION WAS PERMISSIBLE IN LAW AND IT WAS OPEN TO THE PERSON WHO MADE THE ADMI SSION TO SHOW THAT IT WAS INCORRECT. HOWEVER RELIANCE IS PLACED ON THE J UDGEMENT OF THE HON'BLE GUJARAT HIGH COURT RENDERED IN THE CASE OF CIT VS. CHANDRA KUMAR JETHMAL KOCHAR (2015) 55 TAXMANN.COM 292 (GUJARAT) WHEREIN IT HAS BEEN HELD THAT MERELY ON THE BASIS OF ADMISSION THA T FEW BENAMI CONCERNS WERE BEING RUN BY ASSESSEE ASSESSEE COULD NOT BE B ASIS FOR MAKING THE ASSESSEE LIABLE FOR TAX AND THE ASSESSEE RETRACTED FROM SUCH ADMISSION AND REVENUE COULD NOT FURNISH ANY CORROBORATIVE EVI DENCE IN SUPPORT OF SUCH EVIDENCE. IT WAS FURTHER URGED BY THE ASSESSEE THAT ADMISSION SHOULD SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 18 BE BASED UPON CERTAIN CORROBORATIVE EVIDENCES. IN T HE ABSENCE OF CORROBORATIVE EVIDENCES THE ADMISSION IS MERELY A HOLLOW STATEMENT. A THOUGHTFUL CONSIDERATION TO THE RIVAL CONTENTIONS O F THE APPELLANT AND AO. IT IS UNDISPUTED FACT THAT THE STATEMENT RECORDED U/S 132(4) OF THE ACT HAS A BETTER EVIDENTIARY VALUE BUT IT IS ALSO A SETTLED P OSITION OF LAW THAT THE ADDITION CANNOT BE SUSTAINED MERELY ON THE BASIS OF THE STATEMENT. THERE HAS TO BE SOME MATERIAL CORROBORATING THE CONTENTS OF THE STATEMENT. IN THE CASE IN HAND REVENUE COULD NOT POINT OUT AS WHAT W AS THE MATERIAL BEFORE THE A.O. WHICH SUPPORTED THE CONTENTS OF THE STATE MENT. THE A.O. FAILED TO EO-RELATE THE DISCLOSURES MADE IN THE STATEMENT WIT H THE INCRIMINATING MATERIAL GATHERED DURING THE SEARCH. THE HON'BLE IT AT INDORE IN THE CASE OF ACIT 1(1)BHOPAL VIS SHRI SUDEEP MAHESHWARI VIDE ITA NO. 524/IND/2013 A.Y. 2010-11 DATE 13.02.2019 DELETED THE ADDITION O N THE SIMILAR FACTS. RESPECTFULLY FOLLOWING THE DECISION OF THE HON'BLE TRIBUNAL THE ADDITION MADE BY AO AMOUNTING TO RS. 5 00 00 000/- IS DELETED. THEREFORE THE APPEAL ON THIS GROUND IS ALLOWED. 15. WE FURTHER FIND THAT IN THE CASE OF ANOTHER AS SESSEE NAMELY M/S S.V. INFRA DEVELOPERS WHEREIN ALSO SIMILAR TYP E OF ADDITION OF RS.5 CRORES WAS MADE FOR ADMITTING ADDITIONAL INCOM E U/S 132(4) OF THE ACT LD. CIT(A) HAS GIVEN ALMOST SIMILAR FINDIN G AND DELETED THE ADDITION. IN THE CASE OF M/S S.V. INFRA DEVELOPERS THE SURRENDER WAS MADE ON ACCOUNT OF HUGE DIFFERENCE IN THE WORK IN PROGRESS FOUND AT WORK SITE AND THAT MENTIONED IN THE FINAN CIAL BOOK. BUT DURING THE COURSE OF ASSESSMENT PROCEEDINGS LD. A.O DID NOT REFER SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 19 THE CASE TO THE DEPARTMENTAL VALUATION OFFICER NOR MADE ANY EFFORTS TO ARRIVE ON THE VARIATION IN THE BOOK FIGURES AND VALUE ESTIMATED AT THE PROJECT SITE AND RESORTED TO MAKE THE ADDITION PURELY ON THE BASIS OF STATEMENT. LD. A.O ALSO FAILED TO TAKE NO TE OF THE FACT THAT IN THE CASE OF M/S S.V. INFRA DEVELOPERS TILL THE T IME OF SEARCH THERE WAS NOT A SINGLE BUNGLOW THAT WAS COMPLETED FOR SAL E THEREFORE NO SALE OR ANY POSSESSION OF HOUSE IS HANDED OVER TO A NY CUSTOMER. THE VOLUME OF THE MATERIAL AT SITE WAS ALSO TOO SMA LL WHICH CANNOT JUSTIFY THE UNDISCLOSED INCOME OF RS.5 CRORES. LD. CIT(A) AFTER APPRECIATING THE ABOVE STATED FACTS CONCLUDED THAT THE ADDITION MADE WAS PURELY ON THE BASIS OF THE STATEMENT GIVEN U/S 132(4) OF THE ACT AND DESERVES TO BE DELETED. 16. AFTER GOING THROUGH THE ABOVE FINDING OF LD. CI T(A)AND THE FACTS NARRATED/DISCUSSED IN THE PRECEDING PARAS FOL LOWING TWO ASPECTS NEEDS TO BE CONSIDERED. (1) IN THE CASE OF SHRI NITIN AGRAWAL SURRENDER O F INCOME WAS MADE LOOKING TO VARIOUS DISCREPANCIES NOTICED BY T HE SEARCH TEAM BUT AT THE TIME OF COMPLETING THE ASSESSMENT LD. A.O HAD MADE SEPARATE ADDITIONS FOR ALL SUCH DISCREPAN CIES SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 20 NOTICED/INCRIMINATING MATERIAL FOUND AND ADDITION WAS FURTHER MADE FOR THE SURRENDER OF RS.5 CRORES. SO WHETHER SUCH ADDITION NOT CORROBORATING WITH ANY INCRIMINATING MATERIAL FOUND DURING SEARCH AND MADE PURELY ON THE BASIS OF STATEMENT GIVEN U/S 132(4) OF THE ACT WAS JUSTIFI ED. (2) IN THE CASE OF M/S S.V. INFRA DEVELOPERS ALSO SURRENDER WAS MADE FOR THE ALLEGED MISTMATCH IN WORK IN PROGRESS AT PROJECT SITE VIS--VIS THE FIGURES AVAILABLE IN FINANCIAL BOOKS. SURRENDER OF RS.5 LAKHS WAS MADE. DURING THE COUR SE OF ASSESSMENT PROCEEDINGS LD. A.O HAS NOT REFERRED TH E MATTER TO DEPARTMENTAL VALUATION OFFICER AND HE ALSO COULD N OT CONTROVERT THE FACT THAT THE CONCERN M/S S.V. INFR A DEVELOPERS WAS NEW AND THERE WAS NO SALE SINCE THE BUNGLOWS W ERE UNDER CONSTRUCTION AND IN SHORT LD. A.O FAILED TO CORROB ORATE THE ADDITION OF RS.5 CRORES WITH THE EXCESS WORK IN PR OGRESS ALLEGED TO BE FOUND DURING THE COURSE OF SEARCH. IN THE BODY OF THE ASSESSMENT ORDER ALSO REFERENCE IS ONLY MADE T O THE STATEMENT GIVEN U/S 132(4) OF THE ACT. SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 21 17. WITH REGARD TO THE ABOVE TWO ASPECTS LD. DR WAS ALSO CONFRONTED TO PLACE ANY EVIDENCE TO SHOW THAT THE A LLEGED ADDITION OF RS.5 CRORES EACH MADE IN THE CASE OF BOTH THE A SSESSEE(S) NAMELY SHRI NITIN AGRAWAL AND M/S S.V. INFRA DEVELOPERS I S HAVING ANY NEXUS WITH ANY INCRIMINATING MATERIAL OR CORROBORAT IVE EVIDENCE FOUND DURING THE COURSE OF SEARCH. BUT LD. DEPARTME NTAL REPRESENTATIVE FAILED TO BRING ANY SUCH EVIDENCE. T HEREFORE THE UNDISPUTED FACTS REMAINS IS THAT BOTH THE IMPUGNED ADDITIONS WERE PURELY MADE ONLY ON THE BASIS OF STATEMENT GIVEN DU RING THE COURSE OF SEARCH AND HAVE NO NEXUS WHATSOEVER WITH ANY INC RIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. 18. UNDER THESE GIVEN CIRCUMSTANCES WE FIND THAT SI MILAR ISSUE HAS COME UP BEFORE US IN ANOTHER GROUP CASE M/S. SIGNATURE GROUP IN IT(SS) A NO.184 TO 186/IND/2018 ORDER DATED 8.1. 2021 WHICH IS THE SAME GROUP AS THAT OF THE ASSESSEE MENTIONED IN THE INSTANT APPEAL AND THIS TRIBUNAL AFTER CONSIDERING THE SETT LED JUDICIAL PRECEDENTS DELETED THE ADDITIONS WHICH WERE MADE BY THE LD. A.O PURELY ON THE BASIS OF STATEMENT GIVEN U/S 132(4) O F THE ACT OBSERVING AS FOLLOWS:- SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 22 25. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US AND CAREFULLY GONE THROUGH THE DECISIONS RELIED BY LD. COUNSEL FOR THE ASSESSEE. THROUGH GROUND NO.3 RAISED FOR ASSESSMENT YEARS 201 3-14 & 2014-15 ASSESSEE HAS CHALLENGED THE FINDING OF LD. CIT(A) CONFIRMING THE ADDITION OF RS.25 00 000/- AND RS.3 00 00 000/- MADE BY THE LD. AO FOR ASSESSM ENT YEARS 2013-14 & 2014-15 RESPECTIVELY FOR THE AMOUNT DECLARED BY THE ASSESSEE U/S 132(4) OF THE ACT CONTENDING THAT THE SAME IS WITHOUT CORROBORATI NG WITH ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. 26. WE OBSERVE THAT THE SEARCH WAS CONDUCTED ON SIG NATURE GROUP INCLUDING THE ASSESSEE ON 29.1.2014. CERTAIN LOOSE PAPERS WE RE SEIZED. ADDITIONAL INCOME OF RS.3 25 00 000/- (RS. 25 00 000/- + RS.3 00 00 0 00/-) WAS OFFERED FOR ASSESSMENT YEARS 2013-14 AND 2014-15 RESPECTIVELY. HOWEVER IN THE RETURN OF INCOME FILED POST SEARCH U/S 153A OF THE ACT SUCH A DDITIONAL INCOME OF RS.25 00 000/- AND RS.3 00 00 000/- WAS NOT OFFERED IN THE RETURN OF INCOME. DURING THE ASSESSMENT PROCEEDINGS IT WAS SUBMITTED THAT VARIOUS LOOSE PAPERS AND DOCUMENTS NARRATED BY THE LD. A.O FOUND DURING THE COURSE OF SEARCH DOES NOT PERTAIN TO THE ASSESSEE. SINCE THERE WAS NO SU CH INCRIMINATING MATERIAL RELATING TO THE ASSESSEE FOUND DURING THE COURSE OF SEARCH RELATING TO THE ADDITION IN QUESTION THE ALLEGED ADDITION WAS MADE PURELY ON THE BASIS OF THE STATEMENT GIVEN U/S 132(4) OF THE ACT. 27. WE ALSO OBSERVE THAT IN THE ASSESSMENT ORDER AS WELL AS ORDER OF THE FIRST APPELLATE AUTHORITY THERE IS NO MENTION OF ANY INCR IMINATING MATERIAL HAVING ITS NEXUS WITH THE ALLEGED INCOME DECLARED U/S 132(4) O F THE ACT. THE LD. A.O HAS FAILED TO PROVE ON RECORD ANY SPECIFIC INSTANCE WIT H SUPPORT OF INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH WHICH CO ULD SHOW THAT THE ASSESSEE HAS EARNED THE ALLEGED UNDISCLOSED INCOME. IT IS N OT IN DISPUTE THAT VARIOUS OTHER ADDITIONS HAVE BEEN MADE BY THE LD. A.O FOR THE UND ISCLOSED INVESTMENT U/S 69B UNDISCLOSED INVESTMENT IN PROJECTS OF LAND AND UNEXPLAINED UNSECURED LOAN AS WELL AS UNEXPLAINED CASH U/S 69A OF THE ACT. HO WEVER SPECIFICALLY WITH SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 23 REGARD TO THE ADDITION OF RS.25 00 000/- AND RS.3 0 0 00 000/- MADE FOR THE ASSESSMENT YEARS 2013-14 AND 2014-15 THE SAME IS PU RELY BASED ON THE STATEMENT GIVEN ON OATH U/S 132(4) OF THE ACT BY TH E AUTHORISED REPRESENTATIVE ON BEHALF OF THE ASSESSEE WHICH WAS COLLECTIVELY SURRE NDERED AS ADDITIONAL INCOME ON BEHALF OF VARIOUS GROUP CONCERNS. BUT WITHOUT TH E SUPPORT OF ANY INCRIMINATING MATERIAL ON WHICH THE REVENUE AUTHORITIES WERE ABLE TO LAY THEIR HANDS THIS ADDITION TOTALLING TO RS.3.25 CRORES (RS.25 00 000/ - + RS.3 00 00 000/-) IS BASED ONLY ON THE STATEMENT GIVEN U/S 132(4) OF THE ACT. 28. NOW THE MOOT QUESTION REMAINS THAT WHETHER THE LD. A.O WAS JUSTIFIED IN MAKING THE ADDITION PURELY ON THE BASIS OF STATEMEN T GIVEN U/S 132(4) OF THE ACT WITHOUT PROVING ON RECORD ANY CORROBORATIVE EVIDENC E OR INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH WHICH COULD HAVE DIRECT NEXUS WITH THE ALLEGED ADDITION OF RS.3.25 CRORES. 29. WE OBSERVE THAT SIMILAR ISSUE CAME UP BEFORE TH IS TRIBUNAL IN ANOTHER GROUP CONCERN M/S ULTIMATE BUILDERS V/S ACIT ITA NO .134/IND/2019 ORDER DATED 09.08.2019. M/S ULTIMATE BUILDERS WAS ALSO S UBJECTED TO SEARCH U/S 132 OF THE ACT ON 29.1.2014 BEING PART OF THE SAME SIGN ATURE GROUP. FROM PERUSAL OF THE IMPUGNED ORDER OF LD. CIT(A) IN THE CASE OF M/S SIGNATURE BUILDERS OBSERVED AT PAGE 64 & 65 LD. CIT(A) HAS GIVEN THE BRIEF DET AILS OF THE ADDITIONAL INCOME ADMITTED BY THE AUTHORISED PERSON OF M/S SIGNATURE GROUP WHICH IS AS FOLLOWS; S.NO CONCERN/F.Y 2012- 13 2013- 14 TOTAL 1 SIGNATURE INFRASTRUCTURE 50 300 350 2 SIGNATURE BUILDERS 25 300 325 3 SIGNATURE BUILDERS AND COLONISERS 25 300 325 4 SIGNATURE DEVELOPERS 100 100 TOTAL 1100 SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 24 5 OM BUILDERS 275 275 6 OM CONSTRUCTION 50 750 800 7 SAINATH INFRASTRUCTURE P LTD 25 25 TOTAL 1100 8 ULTIMATE BUILDERS 225 225 9 VIRASHA INFRASTRUCTURE 225 225 TOTAL 450 10 M/S SAINATH COLONIZERS PVT. LTD 110 110 11 SHRI ANIL KERED KHILWANI 40 40 TOTAL 150 30. FROM THE ABOVE WE FIND THAT IN THE CASE OF M/S ULTIMATE BUILDERS ALSO ADDITIONAL INCOME WAS SURRENDERED IN THE STATEMENT GIVEN U/S 132(4) OF THE ACT FOR WHICH THE ADDITION WAS MADE BY THE LD. A.O WIT HOUT CORROBORATING IT WITH ANY INCRIMINATING MATERIAL AND THE ADDITION WAS CON FIRMED BY LD. CIT(A). WHEN THE MATTER TRAVELLED BEFORE THIS TRIBUNAL THE ADDIT ION OF RS.2.25 CRORES WAS DELETED BY THIS TRIBUNAL OBSERVING AS FOLLOWS:- 9. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RE CORDS PLACED BEFORE US AND CAREFULLY GONE THROUGH THE JUDGMENTS REFERRED TO AND RELIED BY BOTH THE PARTIES. THE SOLE GRIEVANCE OF THE ASS ESSEE RAISED IN GROUND NO.1 OF THE INSTANT APPEAL IS AGAINST THE ORDER OF LD. CIT(A) CONFIRMING THE ADDITION OF RS.2 25 00 000/- MADE BY THE LD. A.O ON ACCOUNT OF UNDISCLOSED INCOME SURRENDERED DURING THE COURSE OF SEARCH BY THE PARTNER OF THE ASSESSEE FIRM. 10. AT THE COST OF REPETITION WE WOULD LIKE TO RECITE AND RECAPITULATE THE FACTS ONCE MORE. THE ASSESSEE IS A PARTNERSHIP FIR M ENGAGED IN REAL ESTATE BUSINESS. IT IS THE PART OF SIGNATURE GROUP. SEAR CH ACTION WAS INITIATED IN THE SIGNATURE GROUP AND ITS ASSOCIATES ON 29.1.2014 . THE ASSESSEES SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 25 ASSOCIATION WITH THE SIGNATURE GROUP IS ON ACCOUNT OF THE COMMON PARTNERS IN VARIOUS CONCERNS. ASSESSEE IS SEPARATELY ASSESS ED TO TAX. SEARCH U/S 132(4) OF THE ACT WAS INITIATED IN THE CASE OF THE ASSESSEE ON 29.1.2014 AND WAS CONCLUDED ON 31.1.2014. THIS FACT IS PROVE D ON THE BASIS OF PANCHANAMA PREPARED BY THE OFFICER OF THE SEARCH TEAM WHICH IS PLACED AT PAGE 62-64. NO SURRENDER WAS MADE IN THE STATEM ENTS TAKEN BY THE SEARCH TEAM DURING THE COURSE OF SEARCH FROM 29.1.2 014 TO 31.1.2014. THERE IS NO MENTION OF ANY INCRIMINATING MATERIAL R EFERRED BY THE LD. A.O ON THE BASIS OF WHICH ADDITIONS HAVE BEEN MADE. 11 . THE SEARCH ACTION IN THE CASE OF SIGNATURE GROUP CONTINUED EVER AFTER 31.1.2014. ON 02.02.2014 MR. VIPIN CHOUHAN WHO IS THE PARTNER OF THE ASSESSEE FIRM GAVE A STATEMENT BEFORE THE SEARC H TEAM WHEREIN HE MADE SURRENDER OF RS.2 25 00 000/- ON BEHALF OF THE APPELLANT FIRM AND AGREED TO OFFER IT TO TAX. IN THE VERY SAME STATEM ENT HE ALSO MADE SURRENDER ON BEHALF OF ANOTHER FIRM M/S. VIRASHA IN FRASTRUCTURE IN THE CAPACITY OF A PARTNER. IN THE VERY SAME STATEMENT HE ALSO MADE SURRENDER ON BEHALF OF OTHER COMPANIES OF SIGNATURE GROUP. L D. A.O DURING THE COURSE OF ASSESSMENT PROCEEDINGS OBSERVED THAT THE ASSESSEE HAS NOT OFFERED SURRENDERED INCOME OF RS.2 25 00 000/- FOR TAX AND CONFRONTED THE ASSESSEE. DURING THE ASSESSMENT PROCEEDINGS U/S 14 3(3) OF THE ACT ASSESSEE MADE THE RETRACTION BY SUBMITTING THAT NO SUCH UNDISCLOSED INCOME WAS EARNED AND THEREFORE NO SUCH INCOME WAS REQUIRED TO BE OFFERED TO TAX. HOWEVER LD. A.O GIVING REFERENCE TO THE STATEMENT OF MR. VIPIN CHOUHAN PARTNER OF ULTIMATE BUILDERS AND ALS O GIVING REFERENCE TO THE SEIZED DOCUMENTS FOUND DURING THE SEARCH AT SIG NATURE GROUP MADE ADDITION FOR UNDISCLOSED INCOME. WHEN THE MATTER C AME UP BEFORE LD. CIT(A) ADDITION WAS CONFIRMED. HOWEVER THE BASIS O F ADDITION WAS ACCEPTED TO HAVE BEEN MADE ONLY ON THE BASIS OF THE STATEMENT OF MR. VIPIN CHOUHAN. NO REFERENCE WAS MADE TO ANY INCRIMINATIN G MATERIAL HAVING ITS SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 26 BEARING ON THE SURRENDERED INCOME. DURING THE COURS E OF HEARING BEFORE US LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT DURING THE COURSE OF SEARCH I.E. BETWEEN 29.1.14 TO 31.1.2014 NO CASH OR UNRECO RDED ASSETS WAS FOUND NO INCRIMINATING MATERIAL WAS FOUND AND NO I NCOME WAS OFFERED TO TAX IN THE STATEMENT RECORDED U/S 132(4) OF THE ACT OF THE PERSON FOUND TO BE IN THE POSSESSION AND CONTROL OF THE BOOKS OF PR EMISES. RELEVANT QUESTIONS ASKED ABOUT THE LOOSE PAPER FOUND WERE DU LY REPLIED IN THE STATEMENT. 12. LD. COUNSEL FOR THE ASSESSEE FURTHER CONTENDED THA T SINCE THE SEARCH IN THE CASE OF ASSESSEE WAS CONCLUDED ON 31.1.2014 THE ALLEGED STATEMENT OF THE PARTNER MR. VIPIN CHOUHAN TAKEN ON 02.02.201 4 CANNOT BE CONSTRUED AS A STATEMENT GIVEN DURING THE COURSE OF SEARCH U/S 132(4) OF THE ACT SO FAR AS RELATING TO THE ASSESSEE SINCE TH E SEARCH IN ITS CASE ALREADY CONCLUDED ON 31.1.2014. HE FURTHER SUBMITT ED THAT NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH AND AS HELD BY HONBLE TRIBUNAL IN THE LATEST DECISION IN THE C ASE OF ACIT(1) VS. SUDEEP MAHESHWARI (SUPRA) THAT NO ADDITION WAS CALLED FOR WHICH HAS BEEN MADE MERELY ON THE BASIS OF THE STATEMENT WITHOUT CORREL ATING THE DISCLOSURE MADE IN THE STATEMENT WITH THE INCRIMINATING MATERI AL GATHERED DURING THE COURSE OF SEARCH. 13. SO THE CONTENTION OF THE LD. COUNSEL FOR THE ASSES SEE CAN BE SUMMARISED THAT THE ADDITION CANNOT BE MADE MERELY ON THE BASIS OF STATEMENT WHICH TOO WAS TAKEN AFTER CONCLUSION OF THE SEARCH AND NO CORRELATION HAS BEEN MADE WITH THE INCRIMINATING MA TERIAL FOUND DURING THE COURSE OF SEARCH. 14. ON THE OTHER HAND DEPARTMENTAL REPRESENTATIVE GAVE REFERENCE TO VARIOUS JUDGEMENTS REFERRED ABOVE. SHE MAINLY PLA CED EMPHASIS ON THE JUDGMENT OF HONBLE HIGH COURT OF MADRAS IN THE CAS E OF KISHORE KUMAR V/S DCIT (SUPRA) HOLDING THAT WHEN THERE WAS A CLE AR ADMISSION OF SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 27 UNDISCLOSED INCOME IN THE STATEMENT SWORN IN U/S 13 2(4) OF THE ACT THERE IS NO NECESSITY TO SCRUTINISE THE DOCUMENTS. 15. NOW SO FAR AS THE FIRST CONTENTION OF THE ASSESSEE THAT THE STATEMENT RELIED ON BY THE REVENUE AUTHORITIES CANNOT BE CONS TRUED AS A STATEMENT GIVEN U/S 132(4) OF THE ACT WE WILL LIKE TO FIRST REPRODUCE THE PROVISIONS OF SECTION 132(4) OF THE ACT; (4) THE AUTHORISED OFFICER MAY DURING THE COURSE OF THE SEARCH OR SEIZURE EXAMINE ON OATH ANY PERSON WHO IS FOND TO BE IN POS SESSION OR CONTROL OF ANY BOOKS OF ACCOUNT DOCUMENTS MONEY BULLION JE WELLERY TO OTHER VALUABLE ARTICLE OR THING AND ANY STATEMENT MADE BY SUCH PERSON DURING SUCH EXAMINATION MAY THEREAFTER BE USED IN EVIDENCE IN ANY PROCEEDING UNDER THE INDIAN INCOME- TAX ACT 1922 (11 OF 1922 ) OR UNDER THIS ACT. EXPLANATION.- FOR THE REMOVAL OF DOUBTS IT IS HERE BY DECLARED THAT THE EXAMINATION OF ANY PERSON UNDER THIS SUB- SECTION M AY BE NOT MERELY IN RESPECT OF ANY BOOKS OF ACCOUNT OTHER DOCUMENTS OR ASSETS FOUND AS A RESULT OF THE SEARCH BUT ALSO IN RESPECT OF ALL MA TTERS RELEVANT FOR THE PURPOSES OF ANY INVESTIGATION CONNECTED WITH ANY PR OCEEDING UNDER THE INDIAN INCOME- TAX ACT 1922 (11 OF 1922 ) OR UNDE R THIS ACT. 16. THE ABOVE SUB SECTION 4 OF SECTION 132 OF THE ACT STARTS WITH REFERENCE TO AUTHORISED OFFICER WHICH MEANS THA T THE OFFICER WHO IS AUTHORISED TO CONDUCT SEARCH ON THE ASSESSEE. IN T HE INSTANT CASE IT IS STATED BEFORE US THAT THE AUTHORISED OFFICER OF THE ASSESSEE AND THAT OF THE OTHER CONCERNS OF SIGNATURE GROUP ARE DIFFERENT. 17. AFTER THE WORD THE AUTHORISED OFFICER IT READS DU RING THE COURSE OF SEARCH OR SEIZURE EXAMINATION OF BOTH THE PERSON. DURING THE COURSE OF SEARCH IS A PERIOD DURING WHICH THE SEARCH IS INIT IATED AND CONCLUDED. IN THE INSTANT CASE THE SEARCH WAS INITIATED ON 29.1.2 014 AND CONCLUDED ON 31.1.2014 BY A AUTHORISED OFFICER FOR THE ASSESSEE WHICH IS VERIFIABLE FROM SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 28 THE PANCHANAMA FRAMED BY THE SEARCH TEAM. THE STAT EMENT OF MR. VIPIN CHOUHAN WAS TAKEN ON 02.02.2014 BY ANOTHER AUTHORIS ED OFFICER AND THIS DATE IS AFTER THE CONCLUSION OF THE SEARCH IN THE C ASE OF THE ASSESSEE ON 30.01.2014. 18. THERE MAY HAVE BEEN SOME FORCE IN THE CONTENTION O F THE REVENUE AUTHORITIES IF THE STATEMENT U/S 132(4) OF THE ACT WAS TAKEN DURING THE COURSE OF SEARCH AT THE ASSESSEES PREMISES OR DURI NG THE CONTINUATION OF SEARCH THE STATEMENT MAY HAVE BEEN RECORDED ON OTH ER PLACES BUT THE FACT IS THAT SO FAR AS THE ASSESSEE M/S. ULTIMATE BUILDE RS IS CONCERNED THE SEARCH CONCLUDED ON 31.01.2014 AND BEFORE THE CONCL USION OF THE SEARCH NO SURRENDER OF UNDISCLOSED INCOME WAS MADE IN THE STATEMENT RECORDED U/S 132(4) OF THE ACT BY THE PERSONS AVAILABLE AT T HE ASSESSEES BUSINESS PREMISES. 19. AS REGARDS THE STATEMENT OF MR. VIPIN CHOUHAN GIVE N ON 02.02.2014 IS CONCERNED WE FIND THAT THIS STATEMENT CONTAINS THE SURRENDER FOR VARIOUS GROUP CONCERNS AND NOT SPECIFICALLY FOR THE ASSESSEE M/S. ULTIMATE BUILDERS. REFERENCE WAS ALSO GIVEN TO OTHER BUSINE SS CONCERNS NAMELY M/S. VIRASHA INFRASTRUCTURE SIGNATURE INFRASTRUCTU RE SIGNATURE BUILDERS AND SIGNATURE BUILDERS AND COLONISERS. CERTAINLY T HE SEARCH IN THE CASE OF CONCERNS OTHER THAN THE ULTIMATE BUILDERS DID NOT C ONCLUDE ON 02.02.2014 BUT AT THAT POINT OF TIME ON 02.02.2014 THE SEARCH IN THE CASE OF ULTIMATE BUILDERS STOOD CONCLUDED TWO DAYS BEFORE ON 31.1.20 14. 20. WE THEREFORE ARE OF THE CONSIDERED VIEW THAT THE A LLEGED STATEMENT GIVEN BY MR. VIPIN CHOUHAN ON 02.02.2014 MAY BE CON STRUED AS THE SECTION 132(4) OF THE ACT FOR ALL THE OTHER CONCERN S NAMED ABOVE EXCEPT FOR THE ASSESSEE I.E. M/S. ULTIMATE BUILDERS. THEREFOR E THE STATEMENT REFERRED TO BY THE LD. A.O ON THE BASIS OF WHICH THE ADDITIO N HAVE BEEN MADE IN THE SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 29 HANDS OF THE ASSESSEE IN OUR VIEW CANNOT BE CONSTRU ED AS THE STATEMENT U/S 132(4) OF THE ACT. 21. COMING TO THE ISSUE OF ADDITION MADE BY THE LD. A. O ON THE BASIS OF THE STATEMENT BUT NO REFERENCE BEEN GIVEN TO THE I NCRIMINATING MATERIAL WE FIND THAT IN THE ASSESSMENT ORDER LD. A.O HAS RE FERRED TO VARIOUS SEIZED DOCUMENTS BUT NONE OF THEM IS DIRECTLY RELAT ED TO THE ASSESSEE. THESE SEIZED DOCUMENTS ARE OF THE SIGNATURE GROUP A ND LD. A.O HAS ONLY MENTIONED THE DETAILS OF THE SEIZED DOCUMENT WITHOU T UTTERING A WORD ABOUT THEIR NEXUS WITH THE BUSINESS TRANSACTION CAR RIED OUT BY THE ASSESSEE OR BY POINTING OUT ASSESSEES CONNECTION WITH THE SEIZED DOCUMENT IN NAME OR OTHERWISE. THUS IT CAN BE SAFE LY CONCLUDED THAT THE ADDITION MADE BY THE LD. A.O WAS NOT ON THE BASIS O N THE INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH BUT ONLY ON THE BASIS OF STATEMENT OF MR. VIPIN CHOUHAN GIVEN ON 02.02.2014. 22. RECENTLY THE CO-ORDINATE BENCH IN THE CASE OF ACIT (1) VS. SUDEEP MAHESHWARI (SUPRA) IN WHICH THE UNDERSIGNED WAS ALS O A CO-AUTHOR WHILE ADJUDICATING THE ISSUE THAT WHETHER ADDITION CAN B E MADE MERELY ON THE BASIS OF STATEMENT GIVEN DURING THE COURSE OF SEARC H WITHOUT CORRELATING THE STATEMENT WITH INCRIMINATING MATERIAL WE HAVE DECIDED THE ISSUE OBSERVING AS FOLLOWS:- 6. IT IS THE CASE OF THE ASSESSEE THAT DURING THE COURSE OF SEARCH & SEIZURE NO INCRIMINATING MATERIAL OR UNDISCLOSED I NCOME OR INVESTMENTS WERE FOUND. IT IS STATED THAT THE ASSESSEE WAS UND ER MENTAL PRESSURE AND TIRED. THEREFORE TO BUY PEACE OF MIND HE ACCEPTE D AND DECLARED RS.3 CRORES IN PERSONAL NAME. IT IS ALSO STATED THAT TH E CASE LAWS AS RELIED BY THE A.O. ARE NOT APPLICABLE ON THE FACTS OF THE PRE SENT CASE. THE ASSESSEE HAS RELIED ON THE DECISION OF THE HON'BLE SUPREME C OURT RENDERED IN THE CASE OF PULLANGODE RUBBER PRODUCE CO. LTD. 91 ITR 1 8 (SC) WHEREIN THE HON'BLE COURT HAS HELD THAT ADMISSION CANNOT BE SAI D THAT IT IS CONCLUSIVE. SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 30 RETRACTION FROM ADMISSION WAS PERMISSIBLE IN LAW AN D IT WAS OPEN TO THE PERSON WHO MADE THE ADMISSION TO SHOW THAT IT WAS I NCORRECT. HOWEVER RELIANCE IS PLACED ON THE JUDGEMENT OF THE HON'BLE GUJARAT HIGH COURT RENDERED IN THE CASE OF CIT VS. CHANDRAKUMAR JETHMA L KOCHAR (2015) 55 TAXMANN.COM 292 (GUJARAT) WHEREIN IT HAS BEEN HELD THAT MERELY ON THE BASIS OF ADMISSION THAT FEW BENAMI CONCERNS WERE BE ING RUN BY ASSESSEE ASSESSEE COULD NOT BE BASIS FOR MAKING THE ASSESSEE LIABLE FOR TAX AND THE ASSESSEE RETRACTED FROM SUCH ADMISSION AND REVENUE COULD NOT FURNISH ANY CORROBORATIVE EVIDENCE IN SUPPORT OF SUCH EVIDE NCE. IT WAS FURTHER URGED BY THE ASSESSEE THAT ADMISSION SHOULD BE BASE D UPON CERTAIN CORROBORATIVE EVIDENCES. IN THE ABSENCE OF CORROBO RATIVE EVIDENCES THE ADMISSION IS MERELY A HOLLOW STATEMENT. WE HAVE GI VEN OUR THOUGHTFUL CONSIDERATION TO THE RIVAL CONTENTIONS OF THE PARTI ES. IT IS UNDISPUTED FACT THAT THE STATEMENT RECORDED U/S 132(4) OF THE ACT H AS A BETTER EVIDENTIARY VALUE BUT IT IS ALSO A SETTLED POSITION OF LAW THAT THE ADDITION CANNOT BE SUSTAINED MERELY ON THE BASIS OF THE STATEMENT. TH ERE HAS TO BE SOME MATERIAL CORROBORATING THE CONTENTS OF THE STATEMEN T. IN THE CASE IN HAND REVENUE COULD NOT POINT OUT AS WHAT WAS THE MATERIA L BEFORE THE A.O. WHICH SUPPORTED THE CONTENTS OF THE STATEMENT. IN THE ABSENCE OF SUCH MATERIAL COUPLED WITH THE FACT THAT IT IS RECORDED BY THE LD. CIT(A) THAT THE ASSESSEE HIMSELF HAD SURRENDERED A SUM OF RS.69 59 000/- AND RS.75 00 000/- IN A.Y. 2008-09 AND 2009-10 RESPECTI VELY. THE A.O. FAILED TO CO-RELATE THE DISCLOSURES MADE IN THE STATEMENT WITH THE INCRIMINATING MATERIAL GATHERED DURING THE SEARCH. THEREFORE NO INFERENCE IS CALLED FOR IN THE FINDING OF THE LD. CIT(A) AND IS HEREBY AFFI RMED. GROUND RAISED BY THE REVENUE IS DISMISSED. 23. HONBLE GUJARAT HIGH COURT IN THE CASE OF KAILASHB EN MANGARLAL CHOKSHI VS. CIT - (2008) 14 DTR 257 (GUJ.) HELD TH AT MERELY ON THE BASIS SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 31 OF ADMISSION THE ASSESSEE COULD NOT HAVE BEEN SUBJ ECT TO ADDITIONS UNLESS AND UNTIL SOME CORROBORATIVE EVIDENCE IS FOU ND IN SUPPORT OF SUCH ADMISSION. 24. HON'BLE JHARKHAND HIGH COURT SHREE GANESH TRADING CO. V/S COMMISSIONER OF INCOME-TAX TAX CASE NO.8 OF 1999 O RDER DATED 03.01.2013 HELD AS UNDER; 4. WE CONSIDERED THE SUBMISSIONS OF THE LEARNED COUNS EL FOR THE PARTIES AND PERUSED THE REASONS GIVEN IN THE IMPUGNED ORDER S AS WELL AS REASONS GIVEN IN THE CASE OF KAILASHBEN MANHARLAL CHOKSHI ( SUPRA). 5. IT APPEARS FROM THE STATEMENT OF FACTS THAT THERE WAS A SEARCH IN THE BUSINESS PREMISES OF THE PETITIONERS FIRM AS WELL AS IN THE RESIDENTIAL PREMISES OF ITS PARTNER SHRI SHEO KUMAR KEJRIWAL ON 24TH SEPTEMBER 1987. DURING THE COURSE OF SEARCH THE STATEMENT OF SHRI SHEO KUMAR KEJRIWAL HAD BEEN RECORDED UNDER SECTION 132(4) OF THE INCOME TAX ACT AND IN THE STATEMENT HE STATED THAT HE WAS PARTNER IN THE GANESH TRADING COMPANY I.E. THE PRESENT ASSESSEE-FIRM IN HIS INDI VIDUAL STATUS AND THAT HE SURRENDERED RS. 20 LACS FOR THE ASSESSMENT YEAR 1988-89 AS INCOME ON WHICH TAX WOULD BE PAID. HE FURTHER STATED THAT OTH ER PARTNERS WOULD AGREE TO THE SAME; OTHERWISE IT WOULD BE HIS PERSON AL LIABILITY. HOWEVER IN THE RETURNS FILED AFTER SEARCH THE INCOME OF RS. 2 0 LACS SURRENDERED BY SHRI SHEO KUMAR KEJRIWAL WAS NOT DECLARED BY THE AS SESSEE-FIRM. ON BEING ASKED TO EXPLAIN THE REASON FOR NOT SHOWING T HE SURRENDERED AMOUNT IN THE RETURNS IT WAS SUBMITTED BY THE ASSESSEE TH AT DECLARATION MADE BY THE PARTNER WAS MISCONCEIVED AND DIVORCED FROM REAL FACTS. IT WAS CONTENDED THAT THE DECLARATION WAS MADE AFTER PERSU ASION WHICH ACCORDING TO THE LEARNED COUNSEL FOR THE ASSESSEE SHRI BINOD PODDAR IN FACT WAS BECAUSE OF COERCION EXERTED BY THE SEARCH OFFICERS. IN EXPLANATION IT WAS SUBMITTED THAT THE FIRM OR THE INDIVIDUAL HAD NO UNDISCLOSED INCOME. THE ASSESSEES SAID RETRACTION WAS NOT ACCEPTED BY SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 32 ANY OF THE AUTHORITIES BELOW ON THE GROUND THAT THE STATEMENT GIVEN BY THE ASSESSEE APPEARS TO BE VOLUNTARILY GIVEN STATEMENT DISCLOSING UNDISCLOSED INCOME OF RS. 20 LACS. ACCORDING TO THE LEARNED COU NSEL FOR THE ASSESSEE SHRI BINOD PODDAR THE ASSESSING OFFICER HAD FULL J URISDICTION TO PROCEED FOR FURTHER ENQUIRY AND COULD HAVE COLLECTED EVIDENCE I N SUPPORT OF ALLEGED ADMISSION OF UNDISCLOSED INCOME OF THE ASSESSEE. 6. WE ARE OF THE CONSIDERED OPINION THAT STATEMENT RE CORDED UNDER SECTION 132(4) OF THE INCOME TAX ACT 1961 IS EVIDENCE BUT ITS RELIABILITY DEPENDS UPON THE FACTS OF THE CASE AND PARTICULARLY SURROUN DING CIRCUMSTANCES. DRAWING INFERENCE FROM THE FACTS IS A QUESTION OF L AW. HERE IN THIS CASE ALL THE AUTHORITIES BELOW HAVE MERELY REACHED TO THE CO NCLUSION OF ONE CONCLUSION MERELY ON THE BASIS OF ASSUMPTION RESULT ING INTO FASTENING OF THE LIABILITY UPON THE ASSESSEE. THE STATEMENT ON O ATH OF THE ASSESSEE IS A PIECE OF EVIDENCE AS PER SECTION 132(4) OF THE INCO ME TAX ACT AND WHEN THERE IS INCRIMINATING ADMISSION AGAINST HIMSELF T HEN IT IS REQUIRED TO BE EXAMINED WITH DUE CARE AND CAUTION. IN THE JUDGMENT OF KAILASHBEN MANHARLAL CHOKSHI (SUPRA) THE DIVISION BENCH OF GU JARAT HIGH COURT HAS CONSIDERED THE ISSUE IN THE FACTS OF THAT CASE AND FOUND THE EXPLANATION GIVEN BY THE ASSESSEE TO BE MORE CONVINCING AND THA T WAS NOT CONSIDERED BY THE AUTHORITIES BELOW. HERE IN THIS CASE ALSO N O SPECIFIC REASON HAS BEEN GIVEN FOR REJECTION OF THE ASSESSEES CONTENTI ON BY WHICH THE ASSESSEE HAS RETRACTED FROM HIS ADMISSION. NONE OF THE AUTHO RITIES GAVE ANY REASON AS TO WHY ASSESSING OFFICER DID NOT PROCEED FURTHER TO ENQUIRE INTO THE UNDISCLOSED INCOME AS ADMITTED BY THE ASSESSEE IN H IS STATEMENT UNDER SECTION 134(2) IN FACT SITUATION WHERE DURING THE C OURSE OF SEARCH THERE WAS NO RECOVERY OF ASSETS OR CASH BY THE DEPARTMENT . THIS FACT ALSO HAS NOT BEEN TAKEN CARE OF AND CONSIDERED BY ANY OF THE AUTHORITIES THAT IN A CASE WHERE THERE WAS SEARCH OPERATION NO ASSETS OR CASH WAS RECOVERED FROM THE ASSESSEE IN THAT SITUATION WHAT HAD PROMP TED THE ASSESSEE TO SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 33 MAKE DECLARATION OF UNDISCLOSED INCOME OF RS. 20 LA CS. MERE READING OF STATEMENT OF ASSESSEE IS NOT THE ASSESSMENT OF EVID ENTIARY VALUE OF THE EVIDENCE WHEN SUCH STATEMENT IS SELF-INCRIMINATING. THEREFORE WE ARE OF THE CONSIDERED OPINION THAT IN THE PRESENT CASE A WRONG INFERENCE HAD BEEN DRAWN BY THE AUTHORITIES BELOW IN HOLDING THAT THERE WAS UNDISCLOSED INCOME TO THE TUNE OF RS. 20 LACS. 7. IN VIEW OF THE ABOVE REASONS WITHOUT ANSWERING TH E QUESTION ABOUT RETROSPECTIVE OPERATION OF THE PROVISO TO SECTION 1 34(4) WE ARE HOLDING THAT THE AUTHORITIES BELOW HAVE COMMITTED ERROR OF LAW I N DRAWING INFERENCE FROM THE MATERIALS PLACED ON RECORD I.E. ADMISSION OF THE ASSESSEE COUPLED WITH ITS RETRACTION BY THE ASSESSEE. THE REVENUE MA Y NOW PROCEED ACCORDINGLY. 25. IN THE LIGHT OF RATIO LAID DOWN IN VARIOUS JUDGMEN TS REFERRED ABOVE INCLUDING ONE IN THE CASE OF ACIT(1) VS. SUDEEP MAH ESHWARI (SUPRA) DECIDED BY US WHEREIN ALSO WE AFTER REFERRED VARIO US JUDGMENTS OF HON'BLE HIGH COURTS HAVE HELD THAT ADDITIONS CANN OT BE SUSTAINED MERELY ON THE BASIS OF STATEMENT GIVEN DURING THE COURSE O F SEARCH WITHOUT CORRELATING THE ADDITION WITH THE INCRIMINATING SEI ZED MATERIAL. THEREFORE THE DECISION RELIED BY LD. DEPARTMENTAL REPRESENTAT IVE LAYING DOWN THE RATIO THAT ADDITION CAN BE MADE EVEN ON THE BASIS O F STATEMENT GIVEN DURING THE COURSE OF SEARCH U/S 132(4) OF THE ACT I RRESPECTIVE OF THE FACT WHETHER ANY INCRIMINATING MATERIAL IS FOUND OR NOT WILL NOT SUPPORT REVENUE IN THE INSTANT CASE. 26. IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE A ND RESPECTFULLY FOLLOWING THE JUDGEMENTS AND DECISIONS REFERRED ABO VE WE FIND THAT FIRSTLY THE STATEMENT GIVEN BY MR. VIPIN CHOUHAN U/S 132(4) OF THE ACT ON 02.02.2014 CANNOT BE CONSIDERED AS THE STATEMENT GI VEN U/S 132(4) OF THE ACT IN THE INSTANT CASE OF THE ASSESSEE FIRM SINCE THE SEARCH ACTION IN CASE SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 34 OF ASSESSEE WAS CONCLUDED ON 31.1.2014 BY THE AUTH ORISED OFFICER. SECONDLY AS REGARDS TO OTHER BUSINESS CONCERNS REFE RRED BY MR. VIPIN CHOUHAN IN HIS STATEMENT GIVEN ON 02.02.2014 AND IN CASE OF SUCH BUSINESS CONCERN WHEREIN SEARCH ACTION U/S 132 OF T HE ACT WAS CONTINUING THE SAID STATEMENT DATED 02.02.2014 WILL BE CONSIDE RED AS THE STATEMENT U/S 132(4) OF THE ACT. THIRDLY NO REFERENCE HAS B EEN GIVEN BY THE REVENUE AUTHORITIES TO ANY INCRIMINATING MATERIAL FOUND DUR ING THE COURSE OF SEARCH AT THE BUSINESS PREMISES OF THE ASSESSEE WHICH COU LD BE CORRELATED TO THE ALLEGED SURRENDERED INCOME EARNED BY THE ASSESSEE F ROM UNDISCLOSED SOURCES. 27. WE THEREFORE ARE OF THE CONSIDERED VIEW THAT THE FI NDING OF LD. CIT(A) NEEDS TO BE SET ASIDE AND THE ADDITION OF RS.2 25 0 0 000/- DESERVES TO BE DELETED SINCE IT HAS BEEN MADE ON THE BASIS OF A ST ATEMENT NOT GIVEN U/S 132(4) OF THE ACT AND WITHOUT REFERRING TO ANY INCR IMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. ADDITION FOR UNDISCLO SED INCOME OF RS.2 25 00 000/- IS DELETED. ACCORDINGLY GROUND NO .1 RAISED IN THE APPEAL BY THE ASSESSEE IS ALLOWED. 31. FROM PERUSAL OF THE ABOVE FINDING OF THIS TRIBU NAL IN THE CASE OF M/S ULTIMATE BUILDERS (SUPRA) WE FIND THAT THE COMMON ISSUE RAISED IN GROUND NO.3 OF M/S SIGNATURE BUILDERS IS IDENTICAL TO THE ISSUE RAISED AND ADJUDICATED IN THE CASE OF M/S ULTIMATE BUILDERS (S UPRA). WE THEREFORE RESPECTFULLY FOLLOWING THE SAME AND ALSO IN VIEW O F THE IDENTICAL FACT THAT IMPUGNED ADDITION OF RS.25 00 000/- AND RS.3 00 00 000/- MADE BY THE LD. A.O WAS PURELY BASED ON THE STATEMENT GIVEN U/S 132(4) OF THE ACT AND THERE WAS NO REFERENCE TO ANY INCRIMINATING MAT ERIAL FOUND DURING THE COURSE OF SEARCH WHICH COULD SUPPORT THE IMPUGNED A DDITION WE THUS DELETE THE ADDITION OF RS.25 00 000/- FOR ASSESSMEN T YEAR 2013-14 AND RS.3 00 00 000/- FOR ASSESSMENT YEAR 2014-15 AND SE T ASIDE THE FINDING SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 35 OF BOTH THE LOWER AUTHORITIES AND ACCORDINGLY ALLOW GROUND NO.3 RAISED IN ASSESSEES APPEAL FOR ASSESSMENT YEARS 2013-14 AND 2014-15 RAISED IN ITA NO.185-186/IND/2018. 19. WE THEREFORE RESPECTFULLY FOLLOWING THE JUDGMEN TS REFERRED HEREIN ABOVE AND THE CONSISTENT VIEW TAKEN BY THIS TRIBUNAL UNDER SIMILAR SET OF FACTS ARE OF THE CONSIDERED VIEW THA T SINCE THE IMPUGNED ADDITION OF RS.5 CRORE EACH IS PURELY MADE ON THE BASIS OF STATEMENT U/S 132(4) OF THE ACT WITHOUT ESTABLISHI NG ANY NEXUS WITH INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH THE FINDING OF LD. CIT(A) DELETING THE ADDITION OF RS.5 CRORES EACH IN THE CASE OF SHRI NITIN AGRAWAL AND M/S S.V. INFRA DEVEL OPERS NEEDS NO INTERFERENCE AND THE SAME IS CONFIRMED. IN THE RES ULT COMMON GROUND NO.1 RAISED BY REVENUE IN THE CASE OF SHRI N ITIN AGRAWAL AND M/S S.V. INFRA DEVELOPERS VIDE IT(SS)A NO.182/I ND/2019 AND ITA NO.657/IND/2019 RESPECTIVELY STANDS DISMISSED. 20. NOW WE TAKE UP THE REMAINING GROUNDS OF THE REV ENUES APPEAL NO. IT(SS)A NO.182/IND/2019 IN THE CASE OF S HRI NITIN AGRAWAL. WITH REGARD TO GROUND NO.2 TOP 6 REVENUE HAS CHALLENGED THE FOLLOWING ADDITIONS DELETED BY LD. CIT(A). SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 36 GROUND NO. PARTICULARS AMOUN T 2 UNEXPLAINED CASH RS.26 42 910/ - 3 UNEXPLAINED JEWELLERY RS.24 88 216/ - 4 UNEXPLAINED ADVANCE TO SHRI LILWANI RS.50 00 000/ - 5 UNEXPLAINED INVESTMENT IN WATCHES RS.10 00 000/ - . 6 UNEXPLAINED FOREIGN TRAVEL EXPENSES RS.1 00 000/ - 21. FOR ALL THE ABOVE STATED GROUNDS LD. DEPARTMENT AL REPRESENTATIVE VEHEMENTLY ARGUED SUPPORTING THE OR DER OF LD. A.O AND PRAYED FOR CONFIRMING THE ADDITIONS MADE BY LD. A.O. 22. PER CONTRA LD. COUNSEL FOR THE ASSESSEE SUPPORT ED THE FINDING OF LD. CIT(A) AND ALSO ARGUED REFRRING TO FOLLOWING WRITTEN SUBMISSIONS :- GROUND NO 2: DELETION OF ADDITION OF RS.26 42 910/- ON ACCOUNT OF ALLEGED UNEXPLAINED CASH DURING THE COURSE OF THE SEARCH THE CASH WAS FOUND AT THE BUSINESS PREMISES AT RS.26 42 910/-. IT WAS SUBMITTED THAT T HE CASH BALANCES AS PER THE BOOKS OF ACCOUNTS OF VARIOUS FIRMS WAS RS. 87 82 341/-. OUT OF THIS SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 37 CASH A SUM OF RS.26 42 910/- WAS KEPT WITH THE PART NER. THE BALANCE OF THE CASH WAS EXPLAINED AS CASH IN OFFICE AT RS.3 16 630/- ; RS.50 00 000/- AS PENDING CASH ENTRY BEING ADVANCE TO SMT. BIG SAREE MALL AND BALANCE OF RS.8 22 801/- BEING EXPENSES IN CURRED FOR PENDING VOUCHERS AT SITE. THE ID. A.O. DID NOT ACCEPT THE C ONTENTION OF THE ASSESSEE AND MADE THE ADDITION. THE ID. CIT(A) HAS DELETED T HE SAME ON THE GROUND THAT THE CASH BALANCE AS PER THE SEIZED BOOKS OF AC COUNTS IS RS.87 82 341/- WHICH TAKES CARE OF THE CASH FOUND A T THE RESIDENCE AND AS SUCH NO ADDITION IS CALLED FOR. ARGUMENTS IT IS HUMBLY SUBMITTED THAT AS PER CASH BOOK WHICH WAS SEIZED DURING THE COURSE OF THE SEARCH THERE WAS A SUBSTANTIAL CASH B ALANCE. THUS THE CIT(A) WAS RIGHT IN DELETING THE SAID ADDITION. GROUND NO.3 DELETION OF ADDITION OF RS.24 88 216/- ON ACCOUNT OF ALLEGED UNEXPLAINED JEWELLERY ON THE BASIS OF THE JEWELLERY FOUND AT THE RESIDENC E AND IN THE LOCKER DURING THE COURSE OF THE SEARCH AND AFTER CONSIDERI NG THE STATEMENT THE ID. A.O. MADE THE ADDITION OFRS.48 01 948 AS UNDISCLOSE D INCOME. IN APPEAL THE CIT(A) ALLOWED THE DEDUCTION OF RS.2 4 88 216/- AS PER THE BOARD'S CIRCULAR AND THE WEALTH TAX RETURNS FILED E ARLIER. THE ID. CIT(A) MAINTAINED THE BALANCE ADDITION OFRS.23 13 739/-. THE ID. CIT(A) WAS JUSTIFIED IN CONSIDERING THE BOA RD'S CIRCULAR AND THE WEALTH TAX RETURNS AND DELETING THE ADDITION OF RS. 24 88 216/-. THE ORDER OF THE ID. CIT(A) MAY PLEASE BE MAINTAINED. SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 38 GROUND NO.4 DELETION OF ADDITION OF RS.50 OO OOO/- ON ACCOUNT OF ALLEGED UNEXPLAINED ADVANCES TO LALWANI FAMILY DURING THE COURSE OF THE SEARCH COPIES OF TWO CHEQ UES DATED 15/12/2013 OF RS.25 00 000/- EACH SMT. BIG SAREE MALL WERE FO UND AT THE PREMISES OF SHRI P. RAJU THE PARTNER OF THE ASSESSEE IN THE FI RM M/S. S.V. INFRA DEVELOPERS. IN THE STATEMENT OF SHRI RAJU HE ADMIT TED THAT HE HAS ADVANCED A LOAN OF RS.50 00 000/- TO LALWANI GROUP. HE FURTHER STATED THAT SHRI NITIN AGRAWAL HAS ALSO ADVANCED THE SIMILAR LO AN. THE STATEMENT OF THE ASSESSEE WAS RECORDED. IN THE STATEMENT RECORDE D ON 10/01/2014 THE ASSESSEE ADMITTED THAT HE HAS ADVANCED CASH TO SHRI DINESH LALWANI FOR PURCHASE OF FLOOR ADJACENT TO THE OFFICE OF THE ASS ESSEE. SUBSEQUENTLY THIS TRANSACTION WAS CANCELLED. IT WAS FURTHER STATED TH AT ON CANCELLATION OF THE AGREEMENT TWO CHEQUES WERE GIVEN BY THE PARTY FOR R EPAYMENT OF THE ADVANCE. ON THE REQUEST OF THE PARTY TWO CHEQUES WE RE GIVEN BY THEM. THE PARTY HOWEVER STOPPED THE PAYMENT OF THESE CHEQUES WHICH WERE FOUND DURING THE COURSE OF SEARCH. DURING THE COURSE OF THE POST SEARCH ENQUIRY A STA TEMENT OF SHRI DINESH LALWANI WAS RECORDED ON 27/05/2014 AND 22/07/2014. IN THE STATEMENT SHRI DINESH LALWANI STATED THAT THEY HAD PURCHASED 6 DUPLEX FLATS IN THE BUILDING OF THE ASSESSEE FOR A CONSIDERATION OF 6 C RORES WHICH WERE REGISTERED ON 31/03/2013. HE FURTHER STATED THAT 1 CRORE IS REQUIRED TO BE PAID. HE STATED THAT POST DATED CHEQUES WERE ISSUED FOR RENOVATION OF THE SIX DUPLEX FLATS. SINCE THE RENOVATION WAS NOT COMP LETED WITHIN THE TIME THEY STOPPED THE PAYMENT. IT WAS SUBMITTED BEFORE THE ID. A.O. THAT THE ASSES SEE HAD ENTERED INTO AN AGREEMENT FOR PURCHASE OF A FLOOR IN THE BUILDING O F SHRI LALWANI AND MADE THE PAYMENT IN CASH. THERE IS A SUBSTANTIAL CASH BA LANCE AS ON SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 39 31/03/2013 OUT OF WHICH THE PAYMENT OF RS.50 00 000/-- WAS MADE (PG.20 OF ASST. ORDER). HOWEVER THE TRANSACTION WAS CANCE LLED BY THE LALWANI GROUP AND A CANCELLATION AGREEMENT WAS ENTERED ON 07/11/2014 WHICH WAS NOTARISED (PG. 137 OF PB). LALWANI GROUP GAVE T WO CHEQUES FOR THE RETURN OF THE ADVANCE FOR WHICH THE PAYMENT WAS STO PPED. THESE CHEQUES WERE SUBSTITUTED BY THE SUBSEQUENT CHEQUES. THE ID. A.O. DID NOT ACCEPT THE CONTENTION OF THE A SSESSEE AND ON THE GROUND THAT THE CASH WAS PAID IS NOT ACCEPTABLE AND IN THE ABSENCE OF SATISFACTORY EXPLANATION THE ADDITION OF RS.50 00 000/- IS MADE AS UNEXPLAINED INVESTMENT. BEFORE THE ID. CIT(A) THE ARGUMENTS. WERE PUT FORW ARD THAT THE CASH ADVANCES WERE GIVEN FOR THE PURCHASE OF THE PROPERT Y WHICH WAS CANCELLED AND ON CANCELLATION THE CHEQUES WERE RECEIVED FROM THE PARTY. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE HAS FILED A COM PLAINT FOR THE OFFENCE U/S 138 R.W.S. 420 OF IPC. IT WAS FURTHER SUBMITTED THAT THE STATEMENT OF SHRI LALWANI CANNOT BE CONSIDERED WITHOUT PROVIDING THE SUFFICIENT OPPORTUNITY OF CROSS EXAMINATION. VARIOUS DECISIONS WERE CITED BEFORE THE ID. CIT(A). THE ID. CIT(A) CONSIDERED THE SUBMISSIONS OF THE AS SESSEE AND THE FOLLOWING CIRCUMSTANTIAL EVIDENCES. A. IN THE STATEMENT THE ASSESSEE HAS STATED ON OATH T HAT THE ADVANCE WAS GIVEN IN CASH FOR PURCHASE OF A SPACE ADJACENT TO T HE ASSESSEE WHICH DID NOT MATERIALISE. B. THE CHEQUES GIVEN BY DINESH LALWANI WERE REPLACED B Y TWO CHEQUES WHICH WERE DISHONOURED WITH THE REASON OF STOP PAYM ENT BY THE DRAWER. SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 40 THE MEMO OF STOP PAYMENT HAS BEEN SEIZED DURING THE COURSE OF THE SEARCH. C. THE CANCELLATION AGREEMENT HAS BEEN ENTERED. D. THE APPELLANT FILED A COMPLAINT FOR THE OFFENCE U/S 138 R.W.S. 420 OF IPC WHICH IS PENDING IN THE COURT. E. NO OPPORTUNITY OF CROSS EXAMINATION IS GIVEN. F. THE A.O. OVERLOOKED THE STATEMENT RECORDED OF THE A SSESSEE AND HIS PARTNER. THE ID. CIT(A) AFTER CONSIDERING THE SUBMISSIONS AN D THE EVIDENCES ALLOWED THE ASSESSEE'S APPEAL AND DELETED THE ADDIT IONS. ARGUMENTS IT IS HUMBLY SUBMITTED THAT THE EVIDENCES FILED BY THE ASSESSEE CONCLUSIVELY PROVE THAT THE ADVANCES WERE GIVEN FOR THE PURCHASE OF THE PROPERTY IN CASH. THERE WAS A SUFFICIENT CASH BALAN CE AVAILABLE WITH THE ASSESSEE. THE STATEMENT OF SHRI DINESH LALWANI IS T OTALLY UNRELIABLE AND NO EVIDENCE HAS BEEN PUT UP TO CORROBORATE THE EVID ENCE. THE DUPLEX FLATS WERE REGISTERED IN JANUARY 2013 AND THE POSSESSION WAS HANDED OVER. THERE IS NO EVIDENCE TO SHOW THAT THE ASSESSEE WAS ASKED TO RENOVATE THE HOUSE. NO PERSON WILL GIVE ANY POST DATED CHEQUE FO R THE RENOVATION OF THE NEWLY CONSTRUCTED HOUSE. THE CANCELLATION AGREEMENT OF THE PREMISES DULY SIGNED BY THE PARTY AND THE CHEQUES GIVEN BY THEM W HICH ARE MENTIONED IN THE AGREEMENT CLEARLY PROVE THAT THE CHEQUES WER E ISSUED FOR THE REPAYMENT OF THE ADVANCE GIVEN. THE FACT IS FURTHER STRENGTHENED THAT SUBSEQUENT CHEQUES WERE ISSUED REPLACING THE EARLIE R CHEQUES. THE ASSESSEE'S VERSION IS FURTHER PROVED THAT THE COMPL AINT WAS FILED IN THE SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 41 MAGISTRATE'S COURT FOR DISHONOURING THE CHEQUE WHIC H IS PENDING. IN VIEW OF THE ABOVE IT IS HUMBLY SUBMITTED THAT T HE ID. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION. THE ORDER OF TH E ID. CIT(A) MAY UPHELD. GROUND NO.5 DELETION OF ADDITION OF RS.I0 OO OOO/- ON ACCOUNT OF ALLEGED UNEXPLAINED INVESTMENT IN WATCHES THE ID. A.O. HAS MADE ADDITION OF RS.I0 00 000/- FO R THE WATCHES FOUND DURING THE COURSE OF THE SEARCH. IT WAS SUBMITTED T HAT THESE ARE DUPLICATE CHINESE WATCHES AND WOULD NOT EXCEED MORE THAN RS. 25 000/- IN VALUE. THE ID. A.O. DID NOT ACCEPT THE CONTENTION OF THE A SSESSEE ON THE GROUND THAT THE DETAILS OF PURCHASE AND THE BILLS HAVE NOT BEEN PRODUCED. ON THE BASIS OF INTERNET PRICES HE HAS MADE THE ADDITION O F RS.10 00 000/-. THE ID. CIT(A) DELETED THE ADDITION THAT THE SAME H AS BEEN MADE SOLELY ON ESTIMATE PRESUMPTION AND ASSUMPTION THE ADDITIONS CANNOT BE MADE ON GUESSWORK WITHOUT ANY EVIDENCE. IT IS HUMBLY SUBMITTED THAT THESE WATCHES ARE CHINE SE DUPLICATE WATCHES AND HAVE NO VALUE. THE ASSESSEE HAS VISITED HONG KO NG AND CHINA NUMBER OF TIMES (PG. 36 OF THE ASST. ORDER). THE AD DITIONS CANNOT BE MADE ON PURE GUESSWORK WITHOUT ANY EVIDENCE. THE ID. CIT (A) WAS RIGHT IN DELETING THE ADDITIONS. GROUND NO.6 DELETION OF ADDITION OF RS.L OO OOO/- O N FOREIGN TRAVEL THE LD. A.O. HAS MADE THE ADDITION OF RS.2 00 000/- ON FOREIGN TRAVEL ON ESTIMATED BASIS. THE LD. CIT(A) HAS UPHELD THE ADDI TION OF RS.L OO OOO/- ALLOWING A RELIEF OF RS. L 00 000/-. SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 42 23. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US. REVENUE HAS RAISED FOLLOWING GRO UNDS CHALLENGING THE FINDING OF LD. CIT(A) DELETING THE ADDITION ON ACCOUNT OF THE FOLLOWING:- G ROUND NO. PARTICULARS AMOUNT 2 UNEXPLAINED CASH RS.26 42 910/ - 3 UNEXPLAINED JEWELLERY RS.24 88 216/ - 4 UNEXPLAINED ADVANCE TO SHRI LILWANI RS.50 00 000/ - 5 UNEXPLAINED INVESTMENT IN WATCHES RS.10 00 000/ - . 6 UNEXPLAINED FOREIGN TRAVEL EXPENSES RS.1 00 000/ - 24. AS REGARDS GROUND NO.2 FOR UNEXPLAINED CASH WE OBSERVE THAT AS PER THE PANCHNAMA CASH OF RS.26 42 910/- WAS FOU ND FROM THE RESIDENCE OF THE ASSESSEE AND RS.3 16 630/- WAS FOU ND FROM THE OFFICE PREMISES. DURING THE ASSESSMENT PROCEEDINGS RECONCILIATION STATEMENT OF PHYSICAL CASH BALANCE FOUND DURING THE SEARCH AS AGAINST THE CASH RECORDED IN THE BOOKS OF ACCOUNTS WAS FURNISHED SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 43 BUT THE SAME WAS NOT ACCEPTED BY LD. A.O WHEN THE MATTER CAME UP BEFORE LD. CIT(A) THE ADDITION FOR UNEXPLAINED C ASH WAS DELETED OBSERVING AS FOLLOWS:- 4.3 GROUND NO. 4 :- THROUGH THIS GROUND OF APPEAL THE APPELLANT HA S CHALLENGED THE ADDITION OF RS. 26 42 910/- ON ACCOUNT OF UNEXPLAINED CASH. DURING THE COURSE OF SEARCH CASH AMOUNTING TO RS. 26 42 910/- WAS FOUND OUT OF WHICH RS. 25 00 000/- WAS SEIZED. THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS REQUIRED THE ASSESSEE TO EXP LAIN THE ACQUISITION OF THE CASH FOUND DURING THE COURSE OF SEARCH. THE ASS ESSEE IN REPLY SUBMITTED THAT THE CASH FOUND PHYSICALLY IS COMPLET ELY MATCHED WITH BOOKS OF ACCOUNTS. 4.3.1 THE APPELLANT DURING THE COURSE OF APPELLATE PROCEE DINGS SUBMITTED THAT CASH AMOUNTING TO RS. 26 42 910/- WAS FOUND FR OM RESIDENTIAL PREMISES AND SUM OF RS. 3 16 630/- WAS FOUND FROM O FFICIAL PREMISES. THE APPELLANT HAS BEEN MAINTAINING COMBINED CASH BALANC E FOR ALL THE UNITS RUN BY HIM AND SUBMITTED RECONCILIATION OF CASH FOU ND DURING THE COURSE OF SEARCH. 4.3.2 I HAVE CONSIDERED THE FACTUAL MATRIX OF THE CASE P LEA RAISED BY THE APPELLANT AND FINDINGS OF THE AO. THE APPELLANT BEF ORE THE AO AS WELL AS BEFORE ME HAS FILED RECONCILIATION STATEMENT OF CAS H FOUND DURING THE CURSE OF SEARCH AND IN SUPPORT HAS FILED COPIES OF CASH B OOKS. THE RELEVANT EXTRACT OF RECONCILIATION STATEMENT IS AS UNDER:- CASH BALANCE AS PER BOOKS OF ACCOUNTS AS ON 28.01.2 014 SWADESH DEVELOPERS AND COLONIZERS RS. 7 32 575/- SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 44 SWADESH DEVELOPERS AND BUILDERS RS. 94 657/- SV INFRA DEVELOPERS RS.79 55 109/- TOTAL RS. 87 82 341/- CASH FOUND PHYSICALLY/ACCOUNTS PENDING CASH FOUND AT RESIDENCE RS.26 42 910/- CASH AT OFFICE RS. 3 16 630/- CASH ENTRY PENDING SHREEMATI BIG SAREE MALL RS. 50 00 000/- OTHER PENDING VOUCHERS AT SITE AND RS. 8 22 801/- OFFICE TOTAL RS. 87 82 341/- FURTHER ON PERUSAL OF COPIES OF CASH BOOK IT WAS O BSERVED THAT CASH BALANCE AS ON 28.01.2014 IN THE FIRM M/ SV INFRA DEVELOPERS WAS RS. 79 55 109/- RS. 7 32 575 IN M/S SWADESH DEVELOPERS AND COLONISERS AND RS. 94 657/- IN M/S SWADESH DEVELOPERS AND BUILDERS. THE AO HAS ALLEGED THAT THESE FIRMS ARE DIFFERENT ENTITY AND B OOKS OF ACCOUNTS ARE MAINTAINED SEPARATELY THEREFORE MAINTENANCE OF CA SH BALANCE OF ALL THESE CONCERNS IS NOT CORRECT AS PER STANDARD PRACTICE OF ACCOUNTING. ON THE CONTRARY THE APPELLANT HAS STRONGLY CONTENDED THAT THERE IS NO PRINCIPLE OF LAW WHICH BOUNDS ANY FIRM/INDIVIDUAL TO KEEP ITS CA SH IN SEPARATE CASH BOX. THE AO FURTHER STATED THAT THE CASH ENTRY OF R S. 50 LAKHS IN THE NAME SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 45 OF SHREEMATI BIG SAREE MALL WAS NOT FULLY EXPLAINED BY THE APPELLANT IN MY CONSIDERED OPINION IF THE APPELLANT HAS PROVIDED DETAILS OF THE CASH PAYMENT TO THE SAID FIRM/COMPANY IT WAS ON THE PAR T OF THE AO TO CONFIRM FROM THE SAID PARTY WHETHER ANY SUCH PAYMENT WAS RE CEIVED FROM APPELLANT WHICH THE AO FAILED TO DO SO. THE APPELLANT HAS FULLY EXPLAINED EACH AND EVERY DE TAIL OF CASH FOUND DURING THE COURSE OF SEARCH WHEN HE WAS ASKED ONLY TO EXPLAIN SOURCE OF CASH AMOUNTING TO RS. 26 42 910/-. THUS IN VIEW OF THE ABOVE THE AO WAS NOT JUSTIFIED IN CONSIDERING THE FACTS AND EVIDENCE S BEFORE HIM AND THUS THE ADDITION MADE BY THE AO AMOUNTING TO RS. 26 42 910/- IS DELETED. THEREFORE APPEAL ON THIS GROUND IS ALLOWED. 25. FROM PERUSAL OF THE ABOVE FINDING AND THE FACT S PLACED BEFORE US WE FIND THAT SHRI NITIN AGRAWAL IS ONE OF THE KEY PERSON CONTROLLING THE VARIOUS BUSINESS. THE DEPARTMENT H AS TAKEN THE BASIS OF STATEMENT OF SHRI NITIN AGRAWAL FOR MAKING VARIOUS ADDITIONS WHICH INTERALIA INCLUDED SURRENDER ON BEH ALF OF VARIOUS BUSINESS CONCERNS SO THIS IS AN UNDISPUTED FACT TH AT THOUGH THERE ARE DIFFERENT ENTITIES RUNNING UNDER THE BUSINESS GROUP BUT THEY ALL ARE INTER CONNECTED AND CONTROLLED BY SOME COMM ON PERSONS OF WHICH ONE IS SHRI NITIN AGRAWAL. IN THE RECONCILIA TION STATEMENT CASH BALANCE AS PER THE BOOKS IS STATED AT RS.87 82 341/-. SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 46 REVENUE HAS NOT CONFRONTED THIS FACT. THE ASSESSEE HAS STATED THAT THE CASH IN HAND FOUND DURING THE COURSE OF SEARCH FROM HIS RESIDENCE WAS PART OF THE CASH IN HAND OF THE GROUP . THERE IS NO CONTRARY FINDING BY LD. A.O TO THE FIGURES NARRATED IN THE RECONCILIATION STATEMENT ABOUT THE CASH BALANCE IN BOOKS OF BUSINESS CONCERN NAMED THEREIN. UNDER THESE GIVEN F ACTS WHERE THE CASH IN HAND AVAILABLE IN BOOKS IS MUCH MORE THAN T HE CASH FOUND DURING THE COURSE OF SEARCH AND THE SAME HAS BEEN R IGHTLY EXPLAINED IN THE RECONCILIATION STATEMENT WE FIND NO JUSTIFICATION IN THE ADDITION MADE BY LD. A.O FOR UNEXPLAINED CASH A ND LD. CIT(A) HAS RIGHTLY DELETED THE ADDITION AND THE FINDING IS THUS CONFIRMED. GROUND NO.2 OF REVENUES APPEAL NO. IT(SS) NO. 182/ IND/2019 STANDS DISMISSED. 26. AS REGARDS GROUND NO.3 FOR THE ADDITION FOR UNE XPLAINED JEWELLERY AT RS.24 88 216/- FOLLOWING JEWELLERY WA S FOUND/ SEIZED AT THE RESIDENCE AND LOCKER OF THE ASSESSEE AS PER THE PANCHNAMA DRAWN DURING THE COURSE OF SEARCH ACTION. SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 47 S.NO. ADDRESS OF THE PREMISES COVERED U/S 132 OF I.T. ACT 1961 JEWELLERY FOUND (IN RS.) SEIZED (IN RS.) 1 NITIN AGRAWAL R/O H NO.1 MOUNT VIEW VILLAS CHUNA BHATTI BHOPAL FOUND-(GOLD NET WEIGHT 2371.070 GM) SEIZED-(GOLD NET WEIGHT 1475.42 GM) FOUND (SILVER NET WEIGHT 1927.00 GM) RS.90 58 305/ - RS.56 365/- RS.67 82 036 2 JEWELLERY FROM LOCKER NO.64 STATE BANK OF INDIA P.B.B SHAHPURA BHOPAL (IN THE NAME OF SHRI NITIN AGRAWAL & SMT. MAMTA AGRAWAL) FOUND-(GOLD NET WEIGHT 1835.02 GMS) SEIZED (GOLD NET WEIGHT 1467 GMS) RS.56 87 278/ - RS.43 85 570/ - 27. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS SUBMITTED BY THE ASSESSEE THAT HE HAS BEEN A HIGH TAX PAYER S INCE PAST MORE THAN 20 YEARS AND ENJOYS A SOUND FINANCIAL STATUS I N THE SOCIETY. THE WIFE OF THE ASSESSEE IS ALSO FROM A HIGH STATUS FAMILY. THEY GOT MARRIED IN THE YEAR 1990 AND HAS RECEIVED CONSIDERA BLE AMOUNT OF GOLD JEWELLERY FROM THE FAMILY AND IN-LAWS. HIS WIF E HAVE BEEN FILING SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 48 RETURN OF WEALTH AND GOLD JEWELLERY HAS BEEN DECLAR ED. THE COPY OF THE WEALTH TAX RETURN WAS ALSO FILED. HOWEVER LD. A.O DID NOT CONSIDER THESE SUBMISSIONS AND ALSO DID NOT GAVE AN Y CREDIT TO THE CBDT INSTRUCTION 1916 DATED11.5.1994 AND WAS OF TH E VIEW THAT TOTAL VALUE OF GOLD JEWELLERY FOUND DURING THE COUR SE OF SEARCH AT RS.1 48 01 948/- AS UNEXPLAINED AND AFTER CONSIDERI NG THE SURRENDER OF RS.5 CRORES MADE BY THE ASSESSEE FOR T HE BEST REASON KNOWN TO THE LD. A.O HE MADE ADDITION OF RS.48 01 9 48/- OBSERVING THAT REMAINING AMOUNT OF UNEXPLAINED JEWELLERY OF RS.1 CRORE IS TO BE COVERED IN THE ADDITION OF RS. 5 CRORES. WHEN T HE MATTER CAME UP BEFORE LD. CIT(A) ADDITION FOR UNEXPLAINED JEWEL LERY WAS PARTLY DELETED AT RS.24 88 216/- OBSERVING AS FOLLOWS:- 4.4. GROUND NO.5: THROUGH THIS GROUND OF APPEAL TH E APPELLANT HAS CHALLENGED THE ADDITION OF RS.48 01 948/- ON ACCOUN T OF UNEXPLAINED JEWELLERY. DURING THE COURSE OF SEARCH GOLD WEIGH ING 2371.070 GMS WAS FOUND FROM RESIDENCE AND 1835.02 GMS WAS FOUND FROM BANK LOCKER AND SILVER WEIGHING 1927 GMS WAS ALSO FOUND FROM RESIDE NCE OF THE ASSESSEE. THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS REQUIRED THE ASSESSE TO EXPLAIN THE SOURCE OF ACQUISITION OF SUCH JEWELL ERY ALONG WITH DOCUMENTARY EVIDENCES. THE ASSESSEE IN REPLY BEFORE THE AO SUBMITTED THAT THE WIFE OF ASSESSEE HAS BEEN FILING WEALTH TA X RETURN AND HAS DULY SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 49 SHOWN 735 GRMS OF GOLD JEWELLERY AND ITEM WISE DETA ILS WILL BE SUBMITTED LATER ON. THE AO AFTER CONSIDERING REPLY OF THE ASS ESSEE DID NOT FIND THE SAME ACCEPTABLE FOR THE FOLLOWING REASONS:- 1. THE ASSESSEE HAS NOT SUBMITTED ANY ITEM WISE DETAIL S OF THE ABOVE JEWELLERY FOUND FROM RESIDENCE AND LOCKER EVEN THOU GH HE HAS STATED IN REPLY THAT THE LIST OF JEWELLERY EXPLAINING THE SOU RCE OF EACH PURCHASE OR GIFT RECEIVED SHALL BE PROVIDED SHORTLY. TILL DATE THE A SSESSEE HAS NOT FURNISHED ANY SUCH DETAILS. II. THE ASSESSEE HAS ALSO NOT SUBMITTED ANY CONFIRM ATION OF OTHER FAMILY MEMBERS AND RELATIVES OF THE ASSESSEE TO PROVE THAT THE JEWELLERY HAS BEEN GIFTED BY THEM TO THE ASSESSEE AND HIS WIFE. E VEN TILL DATE THE ASSESSEE HAS FAILED TO FURNISH SUCH DETAILS LIKE NA ME AND ADDRESS OF THE PERSON WHO HAS GIFTED THE JEWELLERY DATE OF RECEIP T OF SUCH GIFT ETC. ILI. THE ASSESSEE HAS ALSO NOT SUBMITTED ANY EVIDE NCE WHICH COULD SUBSTANTIATE THE ASSESSEE'S CLAIM THAT THE JWELLERY BELONGS TO GIFT RECEIVED AT THE TIME OF HIS MARRIAGE AND THEREAFTER. IV AS REGARDS THE CLAIM OF THE ASSESSEE OF FILING OF WEALTH TAX RETURN THE ASSESSEE HAS SUBMITTED ONLY THE COMPUTATION OF WEALTH AND CHALLAN OF RS 330/- OF WEALTH TAX PAYMENT FOR A.Y 1991-92 AND NO COPY OF RETURN OF WEALTH HAS BEEN SUBMITTED BY THE ASSESSEE. IN THE C OMPUTATION OF WEALTH FOR A. Y 1991-92 THE NET WEIGHT OF GOLD ORNAMENTS A RE SHOWN AT 625 GRAMS. VII THE CBDT INSTRUCTION NO. 1916 DATED 11/05/1994 IS MEANT TO BE AN ADMINISTRATIVE INSTRUCTION FOR THE GUIDANCE OF THE AUTHORIZED OFFICER AT THE TIME OF SEARCH AND SEIZURE ACTION REGARDING NON-SEI ZURE OF JEWELLERY UPTO 500 GMS FOR MARRIED WOMAN AND 100 GMS FOR MALE MEMB ER ETC. GIVEN THEIR SENTIMENTAL ATTACHMENT TO IT. HOWEVER NON- S EIZURE OF JEWELLERY DOES NOT IMPLY THAT THE JEWELLERY IS TO BE TREATED AS EX PLAINED IN THE ASSESSMENT PROCEEDINGS BY THE A. 0. 4.4.1 THE APPELLANT DURING THE COURSE OF APPELLATE PROCEEDINGS SUBMITTED THAT THE ENTIRE JEWELLERY HAS BEEN FOUND FROM RESID ENCE AND JOINT BANK LOCKER IN THE NAME OF APPELLANT AND HIS WIFE. SMT M AMTA AGARWAL WIFE OF APPELLANT HAS CLAIMED THAT THE ENTIRE JEWELLERY BEL ONGS TO HER AND WAS SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 50 GIVEN BY HER PARENTS AND IN LAWS AT HER MARRIAGE AN D OTHER OCCASIONS. THE JEWELLERY WAS ALSO ACQUIRED OUT OF HER OWN FUNDS AN D FUNDS PROVIDED BY HER HUSBAND. FURTHER SMT MAMTA AGARWAL HAS FILED W EALTH TAX RETURN FOR YEAR 1991-92 AND 1992-93 DECLARING TOTAL GOLD OF 73 5 GMS. 4.4.2 I HAVE CONSIDERED THE FACTS OF THE CASE THE WRITTEN SUBMISSIONS OF THE LEARNED AR AND VARIOUS DECISION CITED AND ALSO PERUSED THE ASSESSMENT ORDER. THE APPELLANT STATED THAT THE TOT AL GOLD JEWELLERY 2371.07 GMS WAS FOUND FROM RESIDENCE AT HO. NO 1 M OUNT VIEW VILLAS CHUNNA BHATTI BHOPAL AND 1835.02 GMS FROM BANK LOC KER WITH STATE BANK OF INDIA SHAHPURA BHOPAL DURING THE COURSE OF THE SEARCH. RELIANCE IS PLACED ON INSTRUCTION NO. 1916 OF CBDT: 'INSTRUCTION NO. 1916 (F.NO. 286/63/93-IT{LNV.II) DATED 11-5-1994 ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES ('CBDT') DIRECTS THE INCOME TAX AUTHORITIES CONDUCTING A SEARCH TO NOT SEIZE JEWELLERY AND ORNAMENTS FOUND DURING THE COURSE OF SEARCH OF VARYING QUANTITIES SPECIFIED IN THE INSTRUCTIONS DEPENDING UPON THE MARITAL STATUS AND THE GENDER OF A PERSON SEARCHED. THE GUIDELINES ARE ISSUED TO ADDRESS THE INSTANCES OF SEIZURE OF JEWELLERY OF SM ALL QUANTITY IN THE COURSE OF SEARCH OPERATIONS U/S. 132 THAT HAVE BEEN NOTICED BY THE CBDT. A COMMON APPROACH IS SUGGESTED IN SITUATIONS WHERE SE ARCH PARTIES COME ACROSS ITEMS OF JEWELLERY FOR STRICT COMPLIANCE BY THE AUT HORITIES. THE CBDT DIRECTED THAT IN THE CASE OF A PERSON NOT ASSESSED TO WEALTH-TAX GOLD JEWELLERY AND ORNAMENTS TO THE EXTENT OF 500 GMS. PER MARRIED LADY 250 GMS. PER UNMARRIED LADY AND 100 GMS. PER MALE MEMBER OF THE FAMILY NEED NOT BE SEI ZED. BESIDES THIS THE ABOVE JEWELLERY INCLUDES STRI-DHA N OF THE ASSESSEE'S WIFE AND JEWELLERY OF ASSESSEE. 4.4.3 THE LAW WITH RESPECT TO QUANTITY OF JEWELLERY AND ORNAMENTS WHICH WOULD GENERALLY BE HELD BY THE FAMILY MEMBERS OF AN ASSESSEE HAS GONE THROUGH HUGE LITIGATIONS. BOARDS' INSTRUCTION NO 19 16 DATED 11TH MAY 1994 WHICH LAYS DOWN GUIDELINES FOR SEIZURE OF JEWELLERY AND ORNAMENTS HAS ALSO BEEN INTERPRETED BY VARIOUS COURTS AND TRIBUNA LS. SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 51 IN THE CASE COMMISSIONER OF INCOME TAX VS RATANLA L VYAPARILAL JAIN {(2010) 235 CTR 0568: (2010) 45 DTR 0290; ( 2011) 3 39 JTR 0351J IT HAS BEEN THAT: 'INSTRUCTION NO. 1916 DT 11TH MAY 1994 WHICH LAYS DOWN GUIDELINES FOR SEIZURE OF JEWELLERY IN THE COURSE OF SEARCH TAKES INTO ACCOUN T THE QUANTITY OF JWELLERY WHICH WOULD GENERALLY BE HELD BY THE FAMILY MEMBERS OF AN ASSESSE AND THEREFORE UNLESS ANYTHING CONTRARY IS SHOWN IT CAN BE SAFELY PRESUMED THAT T HE SOURCE TO THE EXTENT OF THE JEWELLERY STATED IN THE CIRCULAR STANDS EXPLAINED' . IN THE CASE COMMISSIONER OF INCOME TAX VS M.S AGRAW AL (HUF) {(2008) 76 CCH 0802 MPHC: (2008) 11 DTR 0169 (MP)] IT HAS BEEN HELD THAT: 'IN THE ABSENCE OF ANY MATERIAL FOUND DURING SEARCH HAVING NEXUS WITH UNDISCLOSED INCOME NO ADDITION COULD BE MADE IN BLOCK ASSESSME NT UNDER CHAPTER XIV-B; FURTHER TRIBUNAL WAS JUSTIFIED IN DELETING ADDITION ON ACCO UNT OF JEWELLERY HAVING REGARD TO CBDT INSTRUCTION NO. 1916 DT. 11 MAY 1994. IN THE CASE ASHOK CHADDHAVS ITO (2011) 202 TAXMAN 3 95 IT HAS BEEN HELD THAT: 'SECTION 69A OF THE INCOME-TAX ACT 1961 - UNEXPLAINED MONEYS - ASSESSMENT YEAR 2006- 07 _ DURING A SEARCH AT ASSESSEE'S RESIDENTIAL PREMISES 906.900 GMS JEWELLERY WAS FOUND FROM ASSESSEE _ ASSESSEE EXPLAINED THAT HE WAS MARRIED 25 YEARS BACK AND JEWELLERY WAS RECEIVED BY HIS WIFE IN FORM OF 'STREEDHAN' OR ON OTHER OCCASIONS SUCH AS BIRTH OF A CHILD ETE. _ ASSESSING OFFICER ACCEPTED ONLY 400 GMS OF JEWELLERY AS EXPLAINED AND TREATED 506.900 G MS OF JEWELLERY AS UNEXPLAINED AND ACCORDINGLY MADE ADDITION UNDE R SECTION 69A - WHETHER COLLECTING JEWELLERY OF 906.900 GMS BY A WOMAN IN A MARRIED LIFE OF 25 YEARS IN FORM OF STREEDHAN OR ON OTHER OCCASIONS IS ABNORMAL - HELD NO - WHETHER THEREFORE ASSESSING OFFICER WAS UNJUSTIFIED IN TRE ATING ONLY 400 GMS AS 'REASONABLE' AND TREATING REMAINING JEWELLERY AS 'U NEXPLAINED' - HELD YES - WHETHER THEREFORE ADDITION MADE WAS TO BE DELETED - HELD YES {IN FAVOUR OF ASSESSEE)'. SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 52 IN THE CASE SMTPATI DEVI VS INCOME TAX OFFICER AND OTHERS REPORTED IN 240 ITR -727 (KARNATAKA HIGH COURT) IT HAS BEEN HEL D THAT: 'BY REFERRING TO INSTRUCTION NO 1916 IT WAS HELD THAT IT IS NOT THE VALUE WHICH IS CONSIDERED BUT IT IS THE WEIGHT WHICH IS CONSIDERED REASONABLE LOOKING TO THE SOCIAL CIRCUMSTANCES PREVAILING IN THE COUNTRY. 4.4.4 CONSIDERING THE AFORESAID FACTS AND CIRCUMSTANCES O F THE CASE AND THE VARIOUS DECISIONS CITED ABOVE THE FINDINGS ON T HIS ISSUE ARE AS BELOW: I). THE APPELLANT ASSESSEE IS MARRIED FOR ABOUT 30 YEARS AND THE SEARCH TOOK PLACE IN JANUARY 2014. FOR AN INDIVIDUAL AND F OR MARRIED LADY COLLECTING JEWELLERY IN THE FORM OF STRI-DHAN OR BU YING JEWELLERY ON OTHER IMPORTANT OCCASIONS IS VERY NORMAL AND COMMON IN HI NDU FAMILIES. THIS DEPENDS TO A LARGE EXTENT ON THE STATUS AND INCOME OF THE FAMILY. IN THIS CASE THE APPELLANT'S STATUS IS REFLECTED FROM THE R EGULAR RETURNS OF INCOME FILED. II). THE A.O'S FINDINGS HAS NO MERIT THAT THE APPEL LANT HAS NOT SUBMITTED ANY MATERIAL EVIDENCE TO SUBSTANTIATE HER CLAIM REG ARDING JEWELLERY RECEIVED AS GIFT AT THE TIME OF MARRIAGE. AT THE TI ME OF MARRIAGE JEWELLERY IS GIVEN AS GIFT BY CLOSE RELATIVES AND FRIENDS AND A PERSON GIVING A GIFT OF JEWELLERY DOES NOT ATTACH THE BILL OF PURCHASE. III). DURING THE LAST 10 TO 15 YEARS THE PRICES OF GOLD HAVE GONE UP MANY FOLDS. THE VALUATION OF JEWELLERY WAS DONE AT THE T IME OF SEARCH. IT WOULD BE PROPER TO CONSIDER THE WEIGHT OF THE JEWELLERY R ATHER THAN THE VALUATION ON THE DATE OF SEARCH. THE JEWELLERY WHICH IS PART OF STRI-DHAN AND ALSO ACQUIRED AT AN EARLIER DATE WOULD HAVE BEEN ACQUIRE D AT A PRICE MUCH LOWER THAN THE VALUE ARRIVED AT TBE TIME OF SEARCH ON ACCOUNT OF VALUATION. SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 53 IV). THE A.O HAS NOT MENTIONED ANY SPECIFIC MATERIA L FOUND DURING THE COURSE OF SEARCH WHICH WOULD SHOW THAT THE INVESTME NT IN JEWELLERY FOUND IN THE LOCKER ON ACCOUNT OF UNDISCLOSED SOURCES. TH E A.O HAS NOT BEEN ABLE TO CONNECT ACQUISITION OF JEWELLERY WITH ANY UNDISC LOSED INCOME. THE A.O HAS PROCEEDED WITH THE ONUS BEING ON THE ASSESSEE T O PROVE THE GENUINENESS OF THE SOURCE OF ACQUISITION OF JEWELLE RY. BUT THE A.O HAS NOT BEEN ABLE TO ESTABLISH ANY NEXUS WITH ANY DOCUMENT OR EVIDENCE COLLECTED DURING THE SEARCH. V). APPELLANT HAS ALSO FILED COPIES OF WEALTH TAX RETURNS M YEAR 1991- 92 AND 1992-93 SHOWING JEWELLERY OF735 GMS. MERELY IF AN AFFIDAVIT! EVIDENCES OR BILLS IS NOT FILLED REGARDING RECEIVIN G OF JEWELLERY AT THE TIME OF MARRIAGE IT CANNOT BE PRESUMED THAT IT HAS BEEN AC QUIRED OUT OF UNDISCLOSED SOURCES. IN THE CASE OF COMMISSIONER OF INCOME TAX VS RATANLAL VYAPARILAL JAIN [(2010) 235 CTR 0568: (2010) 45 DTR 0290 : ( 2011) 339 1TR 0351J. WHERE IT HAS BEEN HELD; 'THE TRIBUNAL FOUND THAT THE JEWELLERY HELD BY THE ASSESSEE AND HIS FAMILY MEMBERS WAS WELL WITHIN THE LIMIT LAID DOWN UNDER T HE CBDT CIRCULAR AND ACCORDINGLY DELETED THE WHOLE ADDITION ON THE GROU ND THAT THE JEWELLERY HELD BY EACH OF THE FAMILY MEMBERS WAS BELOW THE LI MITS SPECIFIED IN THE SAID CIRCULAR. THOUGH IT IS TRUE THAT THE CBDT INST RUCTION NO. 1916 DT. 11 TH MAY 1994 LAYS DOWN GUIDELINES FOR SEIZURE OF JE WELLERY AND ORNAMENTS IN THE COURSE OF SEARCH THE SAME TAKES INTO ACCOUN T THE QUANTITY OF JEWELLERY WHICH WOULD GENERALLY BE HELD BY FAMILY M EMBERS OF AN ASSESSEE BELONGING TO AN ORDINARY HINDU HOUSEHOLD. THE APPROACH ADOPTED BY THE TRIBUNAL IN FOLLOWING THE SAID CIRCU LAR AND GIVING BENEFIT TO THE ASSESSEE EVEN FOR EXPLAINING THE SOURCE IN RES PECT OF THE JEWELLERY BEING HELD BY THE FAMILY IS IN CONSONANCE WITH THE GENERAL PRACTICE IN HINDU FAMILIES WHEREBY JEWELLERY IS GIFTED BY THE R ELATIVES AND FRIENDS AT THE TIME OF SOCIAL FUNCTIONS VIZ. MARRIAGES BIRT HDAYS MARRIAGE ANNIVERSARY AND OTHER FESTIVALS. THESE GIFTS ARE CU STOMARY AND CUSTOMS SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 54 PREVAILING IN A SOCIETY CANNOT BE IGNORED. THUS ALT HOUGH THE CIRCULAR HAD BEEN ISSUED FOR THE PURPOSE OF NON- SEIZURE OF JEWE LLERY DURING THE COURSE OF SEARCH THE BASIS FOR THE SAME RECOGNIZES CUSTOM S PREVAILING IN HINDU SOCIETY. IN THE CIRCUMSTANCES UNLESS THE REVENUE S HOWS ANYTHING TO THE CONTRARY IT CAN SAFELY BE PRESUMED THAT THE SOURCE TO THE EXTENT OF THE JEWELLERY STATED IN THE CIRCULAR STANDS EXPLAINED. THUS THE APPROACH ADOPTED BY THE TRIBUNAL IN CONSIDERING THE EXTENT O F JEWELLERY SPECIFIED UNDER THE SAID CIRCULAR TO BE A REASONABLE QUANTITY CANNOT BE FAULTED WITH. IN THE CIRCUMSTANCES IT IS NOT POSSIBLE TO STATE T HAT THE TRIBUNAL HAS COMMITTED ANY LEGAL ERROR SO AS TO GIVE RISE TO A Q UESTION OF LAW. ' IN THE CASE COMMISSIONER OF INCOME TAX VS M.S AGRAW AL (HUF) [(2008) 76 CCH 0802 MPHC: (2008) 11 DTR 0169 (MP)] WHERE IT HA S BEEN HELD; 'IN THE CASE AT HAND THE AO HAS NOT CONNECTED ANY UNDISCLOSED INCOME WITH ANYTHING THAT HAS COME IN SEARCH AND SEIZURE. THE AO HAS HIMSELF RECORDED WITH REGARDED WITH REGARD TO THE NRI GIFTS THAT THE ASSESSEE HAD DENIED OF HAVING MADE ANY COMPENSATORY PAYMENTS. HE HAS ALSO FOUND THAT THE STATEMENTS RECORDED OF THE DONOR WERE NOT CLEAR AND HE HAS NOT SPECIFICALLY MENTIONED ANYTHING ABOUT THE GIFTS MAD E TO THE ASSESSEE. THE AO HAS PROCEEDED WITH REGARD TO THE ONUS ON THE ASSESS EE TO PROVE THE GENUINENESS OF THE TRANSACTION AND ON THAT BASIS H E HAS HELD IT TO BE NON- GENUINE. BUT THE FACT REMAINS THAT NO NEXUS HAS BEE N ESTABLISHED WITH ANY DOCUMENT OR EVIDENCE COLLECTED DURING SEARCH AN D SEIZURE WITH REGARD TO THE GIFTS MADE. THERE IS NO FINDING AS TO HOW TH E GIFTS ARE NOT GENUINE EXCEPT STATING ABOUT THE ONUS. BE THAT AS IT MAY I N THE ABSENCE OF ANY DOCUMENT DURING SEARCH OR SEIZURE IT IS DIFFICULT TO ACCEPT THE SUBMISSION OF THE COUNSEL FOR THE REVENUE THAT THE CONCLUSION ARRIVED AT BY THE TRIBUNAL TO THE EFFECT THAT THE PROCEEDINGS COULD N OT HAVE BEEN INITIATED UNDER CHAPTER XIV-B IS ERRONEOUS OR PERVERSE. THE C BOT INSTRUCTION WHICH RELATE TO GUIDELINES FOR SEIZURE OF JEWELLERY AND O RNAMENTS IN THE COURSE OF SEARCH PROVIDES THAT IN THE CASE OF A WEALTH-TAX-AS SESSEE GOLD JEWELLERY AND ORNAMENTS FOUND IN EXCESS OF THE GROSS WEIGHT D ECLARED IN THE WT RETURNS ONLY NEED BE SEIZED THE OFFICER HAVING REG ARD TO THE STATUS OF THE FAMILY AND THE CUSTOM AND PRACTICES OF THE COMMUNITY TO WHICH THE FAMILY BELONGS AND OTHER CIRCUMSTANCES OF THE CASE.' IN THE CASE ASHOK KUMAR JAIN VS DCIT- ITA NO. 21/IND/2003 REPORTED IN (2004) 32 ITC 527 (IND) WHERE IT HAS BEEN HELD; SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 55 ' .... THE CBDT INSTRUCTION BE TAKEN AS YARD STICK TO ARRIVE AT REASONABLENESS OF HOLDING OF GOLD ORNAMENTS IN A MI DDLE CLASS HINDU FAMILY PREVAILING CUSTOMS ALSO TO GIVE GIFTS TO MI NOR CHILDREN IS ON FESTIVE OCCASIONS'. 4.4.5 THE APPELLANT'S WIFE SMT MAMTA AGARWAL HAS FI LED WEALTH TAX RETURN IN YEAR 1991-92 AND 1992-93 SHOWN GOLD JEWEL LEY OF 735 GRAMS. THUS LOOKING INTO THE INCOME AND STATUS OF THE APP ELLANT ASSESSEE AND IN VIEW OF THE DECISIONS CITED ABOVE THE GOLD JEWELLE RY IN POSSESSION OF THE APPELLANT ALONG WITH HIS WIFE SMT. MAMTA AGARWAL TO THE EXTENT OF 835 (735 + 100) GRAMS IS REASONABLE. KEEPING IN VIEW BO ARD'S CIRCULAR 1916 THE BREAKUP OF GOLD JEWELLERY TO THE EXTENT OF 835 GRAMS TAKEN AS REASONABLE IS GIVEN AS UNDER; IN GRAMS NITIN AGARWAL (APPELLANT ASSESSEE) 100 MAMTA AGARWAL (APPELLANT ASSESSEE'S WIFE) 735 (AS PER WEALTH TAX RETUM FILED IN YEAR 1991-92 AND 1992-93) TOTAL 835 IT IS THEREFORE HELD THAT OUT OF THE TOTAL GOLD J EWELLERY FOUND IN POSSESSION AS CLAIMED BY THE APPELLANT'S WIFE AND APPELLANT ON LY 835 GRAMS AMOUNTING TO RS. 24 88 216/- ( 835 GMS X RS. 2979.90) IS REASONABLE. ADDITION ON ACCOUNT OF 835 GRAMS OF GOLD JEWELLERY AMOUNTING TO RS. 24 88 216/- OUT OF THE TOTAL GOLD JEWELLERY IN POSS ESSION AND CLAIMED BY THE APPELLANT AND HIS WIFE SMT. MAMTA AGARWAL IS HE REBY DELETED AND BALANCE ADDITION OF RS. 23 13 732/- IS CONFIRMED. T HEREFORE APPEAL ON THIS GROUND IS PARTLY ALLOWED. SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 56 28. FROM PERUSAL OF THE ABOVE FINDING OF LD. CIT(A) WE OBSERVE THAT HE HAS RIGHTLY CONSIDERED THE WEALTH TAX RETURN SUB MITTED BY THE ASSESSEE DURING YEAR 1991-92 AND 1992-93 AND ALSO C ONSIDERED THE INSTRUCTION NO.1916 OF CBDT DATED 11.5.1994 AND AFT ER REFERRING TO SETTLED JUDICIAL PRECEDENTS HAS CONFIRMED THE ADDIT ION OF RS.23 13 732/- OUT OF THE TOTAL ADDITION OF RS.48 0 1 948/- MADE BY THE LD. A.O. SINCE THE REVENUE AUTHORITIES HAS FAI LED TO BRING ANY OTHER MATERIAL CONTRARY TO THE FINDING GIVEN BY LD. CIT(A) AND CONSIDERING THE FACT THAT THE ASSESSEE HAS FILED WE ALTH TAX AND ASSESSED AS WELL AS CONSIDERING THE LIMIT OF JEWELL ERY OF 500 GRMS FOR FEMALE AND 100 GRAMS FOR MALE MEMBER PROVIDED IN CB DT INSTRUCTION NO.1916 DATED 11.5.1994 WE FIND NO REA SON TO INTERFERE IN THE FINDING OF LD. CIT(A) DULY SUPPORTED BY JUDI CIAL PRECEDENCE DELETING THE ADDITION OF RS.24 88 216/-. THUS GROUN D NO.3 OF THE REVENUES APPEAL VIDE IT(SS)A NO.182/IND/2019 IS D ISMISSED. 29. AS REGARDS GROUND NO.4 DELETING THE ADDITION OF RS.50 LAKHS ON ACCOUNT OF ALLEGED UNEXPLAINED ADVANCE TO SHRI L ILWANI FAMILY THERE WAS SOME TRANSACTION BETWEEN THE ASSESSEE AND SHRI DINESH LILWANI PARTNER OF SHRIMATI BIG SAREE MALL. ASSESS EE CONTENDED SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 57 THAT RS.50 LAKHS WAS GIVEN IN CASH TO SHRI DINESH L ILWANI AS AN ADVANCE FOR ACQUIRING OF OFFICE SPACE WHEREAS SHRI DINESH LLILWANI HAS SUBMITTED THAT THE CHEQUES FOUND IN THE POSSESS ION OF SHRI NITIN AGRAWAL WERE WITH REGARD TO THE REMAINING AMO UNT OF CONSIDERATION TO BE PAID FOR COMPLETION OF FLATS PU RCHASED FROM REAL ESTATE GROUP RUN BY THE ASSESSEE BUT STOPPED FOR PA YMENT AS WORK WAS NOT COMPLETED. HOWEVER THE LD. A.O CAME TO THE CONCLUSION THAT ASSESSEE HAD GIVEN UNACCOUNTED CASH OF RS.50 L AKHS TO M/S SHRIMATI BIG SAREE MALL OWNED BY SHRI DINESH LILWAN I. THE RELEVANT FINDING OF LD. A.O IS EXTRACTED BELOW:- THE SUBMISSION OF THE ASSESSEE IS CONSIDERED CAREFU LLY. IT IS AN ADMITTED FACT THAT THE ASSESSEE HAS PAID RS. 50 LAKHS IN CAS H TO SHRI DINESH LILWANI PARTNER OF SHRIMATI BIG SAREE MALL. THIS CASH TRANSACTION O F RS. 50 LAKH ARE NOT FOUND TO BE RECORDED IN THE BOOKS OF A CCOUNTS OF THE ASSESSEE AND HIS CONCERNS AT THE TIME OF SEARCH ACTION. THE ASS ESSEES CONTENTION THAT DUE TO REPEATED PROMISE OF REPAYMENT OF THE ADVANCE IN CAS H THE SAID AMOUNT WAS NOT ENTERED IN HIS BOOKS OF ACCOUNT IS NOT ACCEPTABLE A S THE AMOUNT HAS BEEN PAID ALMOST BEFORE SIX MONTHS. FURTHER THE AMOUNT IS Q UITE BIG AMOUNT WHICH SHOULD HAVE BEEN RECORDED IN THE BOOKS OF ACCOUNTS AT THE TIME OF PAYMENT ITSELF. THEREFORE THE ASSESSEES CONTENTION IN TH IS REGARD IS NOT ACCEPTABLE. AS EARLIER DISCUSSED IN THIS ORDER THE BOOKS OF A CCOUNT OF THE ASSESSEE AND HIS CONCERNS CANNOT BE RELIED UPON THE ASSESSE ES THIS CONTENTION THAT THE SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 58 SOURCE OF CASH PAID TO M/S SHRIMATI BIG SAREE MALL IS OUT OF CASH IN HAND AVAILABLE IS NOT ACCEPTABLE. FURTHER THE EXPLANAT ION OFFERED BY THE ASSESSEE IN THIS REGARD IS NOT ACCEPTABLE. IN ABSENCE OF SATIS FACTORY EXPLANATION AN ADDITION OF RS.50 00 000/- IS MADE TO THE TOTAL INC OME OF THE ASSESSEE ON ACCOUNT OF UNEXPLAINED INVESTMENT U/S 69 OF THE I.T . ACT FOR A.Y 2014-15. PENALTY PROCEEDINGS U/S 271AAB OF THE I.T. ACT ARE INITIATED FOR A.Y. 2014-15. 30. WHEN THE MATTER CAME BEFORE LD. CIT(A) THE ADDI TION OF RS.50 LAKHS WAS DELETED CONSIDERING THE CASH RECONCILIATI ON STATEMENT FILED BY THE ASSESSEE SHOWING THAT THERE WAS SUFFIC IENT CASH BALANCE IN THE BOOKS OF GROUP CONCERNS TO COVER UP THE ALLE GED CASH ADVANCE GIVEN TO SHRI DINESH LILWANI. THE FINDING OF LD. C IT(A) IS REPRODUCED BELOW:- 4.6 GROUND NO. 8:- THROUGH THIS GROUND OF APPEAL THE APPELLANT HAS CHALLENGED THE ADDITION OF RS. 50 00 000/- IN A.Y. 2014-15 ON ACCOUNT OF UNEXPLAINED ADVANCE TO SHRI LILWANI. DURING THE COU RSE OF SEARCH IT WAS FOUND THAT SHRI P. RAJU HAS ADVANCED SUM OF RS. 50 LAKHS TO SHRI DINESH LILWANI PARTNER OF 'SHRIMATI BIG SAREE MALL' AND TW O CHEQUES DATED 15.12.2013 OF RS. 25 LAKHS EACH WERE FOUND AND SEIZ ED IN THE NAME OF P. RAJU WHICH WERE ISSUED BY M/S SHRIMATI BIG SAREE MALL. WHEN CONFRONTED TO SHRI P RAJU HE STATED THAT CHEQUES WERE ISSUED A GAINST LOAN GIVEN IN CASH TO SHRI DINESH LILWANI PARTNER OF M/S SHRIMATI BIG SAREE MALL AND SIMILARLY ANOTHER LOAN OF RS. 50 LAKHS HAS BEEN GIV EN BY SHRI NITIN SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 59 AGARWAL TO SHRI DINESH LILWANI. STATEMENT OF SHRI D INESH LILWANI WAS RECORDED ON OATH ON 27.05.2014 AND 22.07.2014 WHER EIN HE STATED THAT 6 DUPLEXS WERE PURCHASED AT PROJECT PALACE ORCHAD KO LAR ROAD BHOPAL AND REGISTRIES ERE DONE ON 31.03.20\3 HOWEVER THE DUP LEXES ARE STILL UNDER CONSTRUCTION. THE SIX DUPLEXES WERE PURCHASED FOR R S. 6 CRORES AND PAYMENT OF RS. 5 CRORES HAS BEEN MADE THROUGH CHEQU ES HOWEVER PAYMENT OF RS. 1 CRORES IS STILL TO BE PAID. HE FUR THER STATED THAT THE POST DATED CHEQUES WERE GIVEN FOR RENOVATION WORK OF SIX DUPLEXES. SINCE THE RENOVATION WORK WAS NOT COMPLETED IN TIME THEREFORE PAYMENT OF THESE CHEQUES WERE STOPPED. DURING THE POST SEARCH ENQUIRIES WHEN SHRI P RAJU WAS AGAIN CONFRONTED WITH THIS ISSUE HE STATED THAT THE AMOUNT WAS AGAIN ST THE DEAL FOR PURCHASE OF PROPERTY FROM FIRM SHRIMATI BIG SAREE M ALL AND IN SUPPORT HE FILED A COPY OF AGREEMENT DATED 07.11.2013 WHEREIN SHRI LILWANI AGREED FOR REPAYMENT OF RS. 1 CRORES IN LIEU OF CANCELLATI ON OF AN EARLIER PROPOSAL. THEREFORE THE AO REQUIRED THE ASSESSEE TO SHOW CAU SE AS TO WHY AN AMOUNT OF RS. 1.50 CRORES SHOULD NOT BE ADDED TO HI S INCOME. THE ASSESSEE IN REPLY SUBMITTED AS UNDER:- TRANSACTIONS WITH MR DINESH LALWANI : THE COPY OF THE STATEMENTS RELIED UPON BY YOUR GOOD SELF IN THE MATTER MAY PLEASE BE PROVIDED TO THE ASSESSEE AND IN CASE RELIANCE IS PLACED SOLELY ON T HE SAID STATEMENTS PURPORTEDLY RECORDED U/S 131 OF THE INCOME TAX ACT 1961 AN OPPORTUNITY TO CROSS EXAMINE THE SAID PERSONS MAY ALSO BE AFFOR DED TO THE ASSESSEE. WITHOUT PREJUDICE TO THE FOREGOING THE ASSESSEE EN CLOSES HEREWITH COPIES OF THE DOCUMENTS RELATING TO THE HOUSING TRANSACTIO NS ENTERED INTO WITH THE LALWANI FAMILY WHICH ARE SELF EXPLANATORY. THERE IS YET ONE MORE TRANSACTION RELATING TO THE PURCHASE OF FLOOR AREA BELONGING TO THE LILWANI FAMILY ADJACENT TO THE ASSESSEE'S OFFICE AT E5116 ARERA COLONY. THE DOCUMENTS RELATING TO WHICH HAVE BEEN FOUND AT THE TIME OF SEARCH. THE ASSESSEE REITERATES THAT ALL THE TRANSACTIONS HAVE BEEN DULY RECORDED IN THE AUDITED BOOKS OF ACCOUNT OF THE ASSESSEE AND TH ERE IS NO TRANSACTION PENDING AS AT THE DATE WHICH HAVE CARRIED OUT OF TH E BOOKS OF THE SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019& ITA NO.657/IND/2019 60 ASSESSEE. IT MAY ALSO BE PERTINENT TO POINT OUT THA T THERE IS A CIVIL 1 CRIMINAL SUIT AGAINST THE LALWANI FAMILY FOR DISHON OR OF THE CHEQUES IN VIOLATION OF THE AGREEMENT TO SELL OFFICE PREMISES. THE CASH RECEIPTS OF RS 1 CRORE ARE DULY RECORDED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE IN THE YEAR PRIOR TO THE YEAR OF SEARCH WHEN THE SALE TOOK PLAC E. A PERUSAL OF THE BOOKS OF ACCOUNT WOULD HAVE OBVIATED THE NEED OF THIS OBS ERVATION PLEASE. 4.6.1 THE APPELLANT DURING THE COURSE OF APPELLATE PROCEE DINGS SUBMITTED THAT THE AO HAS RELIED UPON THE STATEMENT OF SHRI D INESH LILWANI AGAINST THE APPELLANT AND NO OPPORTUNITY OF CROSS EXAMINATI ON WAS PROVIDED. THE APPELLANT FURTHER SUBMITTED THAT A SUIT IN RESPECT OF THE SAID SUM OF RS. 50 LAKHS IS STILL PENDING IN THE BHOPAL COURT AND IN S UPPORT HAS FILED NECESSARY EVIDENCES. 4.6.2 I HAVE CONSIDERED THE FACTS OF THE CASE EVIDENCES ON RECORD AND FINDINGS OF THE AO. THIS IS AN UNDISPUTED FACT THAT SHRI P RAJU IN HIS STATEMENT RECORDED ON OATH HAS STATED THAT HE AND T HE APPELLANT HAS GIVEN LOAN OF RS. 50 LAKHS EACH TO SHRI DINESH LILWANI P ARTNER OF MLS SHRIMATI BIG SAREE MALL WITHOUT INTEREST. SHRI P RAJU FURTHE R SUBMITTED THAT THE SAID LOAN HAS NOT BEEN RECEIVED BACK BY THE APPELLANT. T HEREAFTER STATEMENT OF APPELLANT WAS ALSO RECORDED ON OATH ON 30.01.2014 W HEREIN IT WAS EXPLAINED THAT AN ADVANCE OF RS. 50 LAKHS IN CASH W AS GIVEN TO SHRI DINESH LILWANI FOR PURCHASE OF FLOOR ADJACENT TO HE AD OFFICE HOWEVER THE TRANSACTION DID NOT MATERIALIZED AND SHRI DINESH LI LWANI GAVE TWO CHEQUES OFRS. 25LAKHS EACH DATED 15.12.2013 IN THE NAME OFSHRI P RAJU WHICH WERE ALSO SEIZED AS PAGE NO 85 & 87 OF LPS-1. SHRI P RAJU DEPOSITED THE CHEQUES IN HIS BANK AND WHICH WERE DI SHONORED WITH REASON 'PAYMENT STOPPED BY DRAWER'. THE RETURN MEMO WAS AL SO SEIZED DURING THE COURSE OF SEARCH VIDE PAGE NO 86 OF LPS-1. THE APPELLANT THEREAFTER MOVED TO COURT AGAINST MLS SHRIMATI THE BIG SAREE M ALL AND FILD COMPLAINT U/S 200 OFCRPC OFFENCE U/S 138 OF NI ACT 1881 R.W.S 420 OF IPC 1860. SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019 ITA NO.657/IND/2019 61 THE CASE OF THE APPELLANT WAS FIXED IN COURT ON 22. 08.2017 VIDE NOTICE NO MCRC/10603/2017 DATED 27.07.2017 AND THE SAME IS PENDING IN COURT. SIMILAR FACTS WERE NARRATED BY SHRI P RAJU IN HIS S TATEMENT RECORDED ON OATH DURING THE COURSE OF POST SEARCH ENQUIRIES. SH RI P RAJU HAS ALSO SUBMITTED A COPY OF AGREEMENT DATED 07.11.2013 WHE REIN SHRI LILWANI HAS AGREED FOR REPAYMENT OF LOAN OF RS. 1 CRORES IN LIEU OF CANCELLATION OF PROPERTY DEAL UNDER CONSIDERATION. THE AO IN ORDER TO ASCERTAIN TRUE AND CORRECT FACTS OF THE CASE ISSUED SUMMONS TO SHRI DI NESH LILWANI AND STATEMENT OF SHRI DINESH LILWANI WAS RECORDED ON OA TH ON 27.05.2014 AND 22.07.2014 WHEREIN HE STATED THAT HE ALONG WITH HI S FAMILY HAS PURCHASED 6 DUPLEXES FROM FIRM OF THE APPELLANT FOR RS. 6 CRORES AND PAYMENT OF RS. 1 CRORE IS STILL PENDING TO BE PAID. SHRI DINESH LILWANI HAS ALSO STATED THAT THE TWO CHEQUES WERE ISSUED FOR RE NOVATION WORK OF TWO DUPLEXES AND WHEN THE WORK WAS NOT COMPLETED IN TIM E THE SAME WERE STOPPED FOR PAYMENT. 4.6.3 THE APPELLANT BY TAKING AN ALTERNATE PLEA STA TED THAT THE AO HAS USED STATEMENT OF SHRI DINESH LILWANI AGAINST HIM W ITHOUT PROVIDING SUFFICIENT OPPORTUNITY OF CROSS EXAMINATION. AFTER CONSIDERING THE ENTIRE FACTS IN TOTALITY I HAVE REACHED TO FINAL CONCLUSIO N THAT THE AO OUGHT TO HAVE PROVIDED OPPORTUNITY OF CROSS EXAMINATION BEFO RE MAKING ANY ADDITION ON THE BASIS OF THIRD PARTY STATEMENT. HON 'BLE SUPREME COURT IN THE CASE OF ANDAMAN TIMBER INDUSTRIES VS. COMMISSIO NER OF CENTRAL EXCISE KOLKATA IN CIVIL APPEAL NO.248 OF 2006 HAS H ELD THAT IN ABSENCE OF CROSS-EXAMINATION OF PARTIES THE ASSESSMENT PROCEE DINGS TO BE QUASHED. FURTHER THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF PRAFUL CHUNILAL PATEL VS. M.J. MAKWANA [236 ITR 832 (GUJ)] AND JCIT & ORS . VS. GEORGE WILLIMSON (ASSAM) LTD. [258 ITR 126 (GUJ)] HAS HELD THAT STATEMENT OF THIRD PARTY CANNOT BE RELIED UPON WITHOUT HAVING ANY CORR OBORATIVE EVIDENCE. SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019 ITA NO.657/IND/2019 62 SIMILARLY HON'BLE SUPREME COURT IN THE CASE OF KIS HANCHAND CHELLARAM V/SO CIT 125 ITR 713 (SC) HAS HELD THAT ADVERSE INF ERENCE CANNOT BE DRAWN AGAINST THE ASSESSEE FROM THE STATEMENT OF TH IRD PARTIES. SIMILARLY LD. AR OF THE ASSESSEE HAS RELIED UPON THE DECISION OF HON'BLE HIGH COURT IN THE CASE OF CIT VIS. INDRAJIT SINGH SURI (2013) 33 TAXMANN 281 (GUJ.) THAT WHERE ADDITIONS WERE MADE ON THE BASIS OF STAT EMENTS OF PERSONS WHO WERE NOT ALLOWED TO BE CROSS EXAMINED BY THE AP PELLANT ADDITIONS WERE NOT SUSTAINABLE. IT IS A SERIOUS FLAW ON PRINC IPLES OF NATURAL JUSTICE WHICH RENDERS THE ORDER A NULLITY. IT IS ALSO VERY IMPORTANT TO NOTICE THAT THE AO HAS OVERLOOKED STATEMENT OF TWO PERSONS I.E. SHR I P RAJU AND SHRI NITIN AGARWAL AND HAS RELIED UPON STATEMENT OF SHRI DINES H LILWANI. FURTHER THE AO OUGHT TO HAVE CONSIDERED THE FACT THAT THE C ASE OF THE APPELLANT FOR ADVANCING LOAN TO SHRI DINESH LILWANI IS STILL PEND ING IN COURT AND THE MATTER CAN ONLY BE DECIDED IN BEST WHEN THE ORDER O F THE COURT IS PRONOUNCED. 4.6.4 IN VIEW OF THE ABOVE DISCUSSION THE AO WAS N OT JUSTIFIED IN MAKING ADDITION OF RS. 50 00 000/- ON ACCOUNT OF LOAN TO S HRI DINESH LILWANI AND THEREFORE ADDITION MADE BY THE AO AMOUNTING TO RS. 50 00 000/- IS DELETED. THEREFORE APPEAL ON THIS GROUND IS ALLOWE D. 31. FROM PERUSAL OF THE ABOVE FINDING OF LD. CIT(A) UNDISPUTED FACTS ARISING OUT OF THE PRESENT ISSUE ARE THAT FIR STLY THERE WAS SUFFICIENT CASH IN HAND WITH THE ASSESSEE AND ITS GROUP CONCERNS SECONDLY LD. A.O HAS NOT PROVIDED OPPORTUNITY OF CR OSS EXAMINATION OF THE ASSESSEE WITH SHRI DINESH LILWANI BEFORE REL YING ON THE STATEMENT OF SHRI DINESH LILWANI THIRDLY LD. A.O O VER LOOKED THE SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019 ITA NO.657/IND/2019 63 STATEMENTS OF SHRI P. RAJU AND SHRI NITIN AGRAWAL A ND GAVE ONLY CREDIT TO THE STATEMENT OF SHRI DINESH LILWANI AND FOURTHLY THE LD.A.O FAILED TO CONSIDER THE FACT THAT THE CASE OF THE APPELLANT FOR ADVANCE OF LOAN TO SHRI DINESH LILWANI IS STILL PEN DING IN THE COURT. UNDER THESE GIVEN FACTS IN OUR CONSIDERED VIEW LD. A.O WAS NOT JUSTIFIED IN MAKING ADDITION FOR UNEXPLAINED ADVANC ES AT RS.50 LAKHS. THUS NO INTERFERENCE IS CALLED FOR IN THE F INDING OF LD. CIT(A) THUS GROUND NO.4 OF THE REVENUES APPEAL IT(SS)A NO.182/IND/2019 IS DISMISSED. 32. AS REGARDS GROUND NO.5 FOR THE DELETION OF ADDI TION OF RS.10 LAKHS BY LD. CIT(A) WE OBSERVE THAT DURING THE COUR SE OF SEARCH 17 WATCHES WERE SEIZED FROM THE ASSESSEES RESIDENCE. NO PURCHASE BILLS OF THESE WATCHES WERE FOUND. LD. A.O CLAIMED THEM TO BE BRANDED WATCHES VALUED AT RS.10 LAKHS. BEFORE THE L D. A.O ASSESSEE SUBMITTED THAT THESE WATCHES ARE DUPLICATE CHINESE MADE WATCHES. LD. A.O WAS NOT SATISFIED AND HE MADE ADDITION FOR RS.10 LAKHS . WHEN THE MATTER CAME BEFORE LD. CIT(A) THE ADDITION WERE DELETED SINCE THERE WAS NO EVIDENCE TO SUPPORT THE VALUATIO N OF RS.10 LAKHS BROUGHT BY THE LD. A.O. LD. CIT(A) DELETED THE ADD ITION OF RS.10 SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019 ITA NO.657/IND/2019 64 LAKHS FOR UNEXPLAINED INVESTMENT IN WATCHES OBSERVI NG AS FOLLOWS:- 4.7 GROUND NO. 9:- THROUGH THIS GROUND OF APPEAL T HE APPELLANT HAS CHALLENGED THE ADDITION OF RS.10 00 000/- IN A.Y. 2 014-15 ON ACCOUNT OF UNEXPLAINED INVESTMENT IN WATCHES. DURING THE COURS E OF SEARCH 17 WATCHES WERE FOUND FROM RESIDENCE OF APPELLANT. THE REFORE THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS REQUIRED THE A SSESSEE TO FURNISH SOURCE OF INVESTMENT IN THESE WATCHES. THE ASSESSEE IN REPLY SUBMITTED THAT THE WATCHES PURCHASED BY THE APPELLANT ARE ALL DUPLICATE CHINESE MAKE WATCHES THE AO AFTER CONSIDERING REPLY OF THE ASSESSEE SUBMITTED THAT THE WATCHES ARE BRANDED WATCHES AND ESTIMATED THE PRICE OF THESE WATCHES AT RS. 10 00 000/-. 4.7.1 THE APPELLANT DURING THE COURSE OF APPELLATE PROCEE DINGS SUBMITTED THAT THE AO HAS ERRED IN NOT REFERRING THE MATTER T O AN EXPERT WHO WOULD CLEARLY ASCERTAIN THE CORRECT VALUE OF THESE DUPLIC ATE CHINESE WATCHES. FURTHER THERE IS NO DOCUMENTARY EVIDENCE BY WAY NO TING ON PASSPORT FOR CARRYING VALUABLE WATCHES OR A CUSTOMS CLEARANCE BE CAUSE THE WATCHES WERE ALL DUPLICATE AND OF NO SIGNIFICANT VALUE. 4.7.2 I HAVE CONSIDERED THE FACTS OF THE CASE SUBMISSIONS FILED AND FINDINGS OF THE AO. THE AO DURING THE COURSE OF ASS ESSMENT PROCEEDINGS OBSERVED THAT THE ASSESSEE HAS PURCHASED WATCHES WO RTH RS. 10 00 000/- WITHOUT REFERRING THE MATTER TO A VALUER/EXPERT WHO COULD HAVE ASCERTAINED THE CORRECT VALUE OF THE WATCHES. THE ADDITION MADE BY THE AO IS SOLELY ON ESTIMATE ASSUMPTION AND PRESUMPTION BASIS. THE AO HAS GROSSLY ERRED IN MAKING ADDITION SIMPLY ON THE BASIS OF GUESS WORK ASSUMPTION AND PRESUMPTION. IT IS WELL SETTLED THAT NO ADDITION CA N BE MADE AS A LEAP IN THE DARK. THE AO IS NOT ENTITLED TO MAKE A GUESS WI THOUT EVIDENCE. THE ASSESSMENT OF ANY PARTICULAR YEAR CANNOT BE BASED O N MERE SUSPICION OR SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019 ITA NO.657/IND/2019 65 BARE GUESS BUT ON A LEGITIMATE MATERIAL FROM WHICH A REASONABLE INFERENCE OF ANY UNEXPLAINED CASH CREDIT CAN BE MADE. HON'BLE SUPREME COURT IN THE CASE OF DHAKESHWARI COTTON MILLS LTD. V/S CIT (1954 ) 26 ITR 775 (SC) HAS HELD THAT ALTHOUGH STRICT RULES OF EVIDENCE ACT DO NOT APPLY TO INCOME TAX PROCEEDINGS STILL ASSESSMENT CANNOT BE MADE ON THE BASIS OF IMAGINATION AND GUESS WORK. IT HAS BEEN HELD IN THE CASE OF UMA CHARAN SAHA & BROS CO. V/S CIT 37 ITR 21 (SC) THAT SUSPICION HOWEVER STRONG CANNOT TAKE PLACE OF EVIDENCE. SIMILAR VIEWS HAVE BEEN EXPRESSE D BY APEX COURT IN THE CASE OF DHIRAJ LAL GIRDHARILAL V/S CIT (1954) 26 IT R 736 (SC). 4.7.3 IN VIEW OF THE ABOVE JUDICIAL PRONOUNCEMENT THE AO WAS NOT JUSTIFIED IN MAKING ADDITION ON ESTIMATE BASIS AND ALSO WHEN NO CORROBORATIVE EVIDENCE WAS FOUND SUGGESTING UNACCOUNTED INVESTMEN T IN PURCHASE OF WATCHES. THUS' THE ADDITION MADE BY THE AO AMOUNTIN G TO RS. 10 00 000/- IS DELETED. THEREFORE APPEAL ON THIS G ROUND IS ALLOWED. 33. WE THEREFORE IN THE GIVEN FACTS AND CIRCUMSTANC ES OF THE CASE AND THE UNCONTROVERTED FACT THAT LD. A.O HAS NOT T AKEN ANY STEP TO BRING ON RECORD THE VALUATION OF THE WATCHES FOUND DURING THE COURSE OF SEARCH WHICH THUS MAKES THE ADDITION MERE LY ON THE ESTIMATED BASIS AND SAME THEREFORE HAVE BEEN RIGHTL Y DELETED BY LD. CIT(A) RELYING ON SETTLED JUDICIAL PRECEDENTS. GRO UND NO.5 OF THE REVENUES APPEAL IN IT(SS)A NO.182/IND/2019 STANDS DISMISSED. 34. NOW WE TAKE UP GROUND NO.6 IS REGARDING DELETIO N OF ADDITION ON ACCOUNT OF FOREIGN TRAVEL EXPENSES AT RS.1 LAKH. BRIEF FACTS SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019 ITA NO.657/IND/2019 66 RELATING TO THIS ISSUE ARE THAT DURING THE SEARCH PROCEEDINGS VARIOUS DOCUMENTS WERE FOUND ABOUT THE FOREIGN TRAV EL CARRIED OUT BY THE ASSESSEE AND HIS WIFE. THE ASSESSEE CLAIMED THEM TO BE DULY RECORDED IN THE BOOKS. HOWEVER LD. A.O MADE ADDITI ON FOR RS.2 LAKHS FOR ASSESSMENT YEAR2014-15. SUBSEQUENTLY WHE N THE MATTER TRAVELLED BEFORE LD. CIT(A) HE SUSTAINED IT AT RS.1 LAKH CONSIDERING THE ADDITION OF RS.2 LAKH ON A LITTLE HIGHER SIDE. WE IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE FIND THAT THE A SSESSEE WHO IS INTO THE BUSINESS OF CONSTRUCTION HAS CONDUCTED VAR IOUS FOREIGN VISITS AND EXPENSES OF THE SAME WERE ALSO DEBITED I N THE BOOKS OF ACCOUNTS. LD. A.O ESTIMATED THE UNDISCLOSED EXPEND ITURE AT RS.2 LAKH. WE ARE HOWEVER OF THE VIEW THAT LD. CIT(A) BE ING FAIR TO BOTH THE PARTIES HAS RIGHTLY CONSIDERED THE ISSUE AND PA RTLY DELETED THE ADDITION AT RS.1 LAKH WHICH THUS DO NOT CALL FOR AN Y INTERFERENCE. ACCORDINGLY GROUND NO.6 OF THE REVENUES APPEAL IN IT(SS)A NO.182/IND/2019 IS DISMISSED. 35. GROUND NO.7 IS GENERAL IN NATURE WHICH NEEDS NO ADJUDICATION. SHRI NITIN AGRAWAL & S.V. INFRA DEVELOPERS IT(SS)A NO.182/IND/2019 ITA NO.657/IND/2019 67 36. ACCORDINGLY ALL THE GROUNDS OF REVENUE IN THE C ASE OF SHRI NITIN AGRAWAL IN IT(SS)A NO.182/IND/2019 AND THAT OF M/S S.V. INFRA DEVELOPERS VIDE ITA NO.657/IND/2019 ARE DISMISSED. IN THE RESULT BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 25.03.20 21. SD/- SD/- (KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER INDORE; DATED : 25 TH MARCH 2021 /DEV COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUA RD FILE. BY ORDER ASSISTANT REGISTRAR INDORE