The ACIT, 1(1), Bhopal v. Shri P.D. Goyal, Bhopal

ITSSA 398/IND/2012 | 2007-2008
Pronouncement Date: 26-07-2013 | Result: Partly Allowed

Appeal Details

RSA Number 39822716 RSA 2012
Assessee PAN ABBPG3494L
Bench Indore
Appeal Number ITSSA 398/IND/2012
Duration Of Justice 7 month(s) 9 day(s)
Appellant The ACIT, 1(1), Bhopal
Respondent Shri P.D. Goyal, Bhopal
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 26-07-2013
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted DB
Tribunal Order Date 26-07-2013
Assessment Year 2007-2008
Appeal Filed On 17-12-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI JOGINDER SINGH J.M. AND SHRI R.C.SHARM A A.M. PAN NO. : ABBPG3494L I.T.A.NO S . 396 TO 400 /IND/201 2 A.Y. : 2005-06 TO 2009-10 ACIT 1(1) BHOPAL VS. SHRI P. D. GOYAL 18 SHYAMLA HILLS BHOPAL APPELLANT RESPONDENT C.O.NOS. 20 TO 24/IND/2013 (ARISING OUT OF I.T.A.NOS. 396 TO 400/IND/2012) A.Y. : 2005-06 TO 2009-10 SHRI P. D. GOYAL 18 SHYAMLA HILLS BHOPAL VS. ACIT 1(1) BHOPAL CROSS OBJECTOR RE SPONDENT DEPARTMENT BY : S MT. MRIDULA BAJPAI CIT DR ASSESSEE BY : SHRI S.S.DESHPANDE C.A. DATE OF HEARING : 20 . 0 6 .201 3 DATE OF PRONOUNCEMENT : 26 . 0 7 .201 3 O R D E R -: 2: - 2 PER R. C. SHARMA A.M. THESE ARE THE APPEALS FILED BY THE REVENUE AND CROS S OBJECTIONS BY THE ASSESSEE AGAINST THE ORDER OF CIT (A) DATED 30.8.2012 FOR THE ASSESSMENT YEAR 2005-06 TO 2009-1 0 IN THE MATTER OF ORDER PASSED U/S 153C/143(3) OF THE INCOM E-TAX ACT 1961. 2. THE RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. FACTS IN BRIEF ARE THAT THE ASSESSEE INDIV IDUAL IS REGULAR INCOME TAX ASSESSEE AND DERIVES INCOME FROM HIS BUSINESS OF DEALING IN LAND. A SEARCH U/S. 132 OF T HE INCOME TAX ACT FOR SHORT THE ACT) WAS CONDUCTED ON THE A SSESSEES SON SHRI ASHOK GOYAL IN MAY 2008. SUBSEQUENTLY NO TICES U/S. 153C WAS ISSUED AND AFTER ISSUING STATUTORY NO TICES THE ASSESSMENTS WERE COMPLETED MAKING VARIOUS ADDITIONS . IN THE ASSESSMENT YEAR 2005-06 AN ADDITION OF RS. 3 32 92 7/- WAS MADE BY THE ASSESSING OFFICER. THE A.O. HAS MADE THE ABOVE ADDITION ON THE BASIS OF LOOSE PAPER NO. LPS 1/47 PAGES 1-67 ON THE GROUND THAT THE REGISTRATION EXPENSES OF RS. 3 32 927/-(RS.3 09 000 + 23 927/- -: 3: - 3 INCURRED ON PURCHASE OF 5.87 ACRE OF LAND AT VILLAG E NEVRI WAS PAID OUT OF UNDISCLOSED SOURCES. 3. BEFORE THE LD. CIT(A) T HE LD. AR SUBMITTED THAT THE REGISTRATION CHARGES OF RS. 23 927/- ARE DULY RECOR DED IN THE BOOKS OF ACCOUNTS. DURING THE ASSESSMENT PROCEEDINGS THE BOOKS OF ACCOUNTS WERE PRODUCED BEFORE THE A.O. COPY OF THE LEDGER ACCOUNT CONTAININ G THE ENTRY WAS ALSO FILED BEFORE HIM. THE BALANCE AMOUNT WAS STATED AS PAID BY THE PURCHASER. 4. BY THE IMPUGNED ORDER THE LD. CIT(A) DELETED THE ADDITION OF RS. 23 927/- AND UPHELD ADDITION OF RS. 3 09 000/- AFTER HAVING THE FOLLOWING OBSERVATIONS :- I HAVE GONE THROUGH THE ASSESSMENT ORDER AND HAVE CONSIDERED THE SUBMISSIONS OF THE ASSESSEE AND THE COPY OF LEDGER ACCOUNT FILED. IT HAS BEEN SPECIFICALLY MENTIONED IN THE SUBMISSIONS OF THE ASSESSEE REPRODUCED AT PAGE 43 OF THE ASSESSMENT ORDER IN THE -: 4: - 4 CASE OF SHRI ASHOK GOYAL THAT THE SAID TRANSACTION WAS DULY RECORDED IN HIS REGULAR BOOKS OF ACCOUNT. IN THE COPY OF LEDGER ACCOUNT FILED THE REGISTRATION EXPENSES ARE FOUND TO HAVE BEEN RECORDED AT RS. 23 927/-. AS THESE EXPENSES ARE DULY RECORDED IN REGULAR BOOKS OF ACCOUNTS AND SUCH BOOKS WERE PRODUCED BEFORE THE A.O. DURING ASSESSMENT PROCEEDINGS THE A.O. WAS NOT JUSTIFIED IN TREATING SUCH EXPENSES AS UNEXPLAINED TO THAT EXTENT. HOWEVER FOR BALANCE OF RS.3 09 000/- (RS. 3 32 927 23 927) THE ASSESSEE HAS NOT FILED ANY EVIDENCE TO SUPPORT HIS STAND THAT THE REGISTRATION EXPENSES WERE PAID BY THE SELLER. THE CONTENTION OF THE ASSESSEE CANNOT BE ACCEPTED WITHOUT ANY -: 5: - 5 CONFIRMATION FROM THE SELLER OF THE PROPERTY. HENCE THE ADDITION OF RS. 3 09 000/- IS CONFIRMED. THE ASSESSEE GETS RELIEF OF RS. 23 927/-. THIS GROUND OF APPEAL IS THEREFORE PARTLY ALLOWED. 5. AGAINST THE ABOVE ORDER BOTH ASSESSEE AND REVENU E ARE IN APPEAL BEFORE US. 6. RIVAL CONTENTIONS HAVE BEEN CONSIDERED AND RECORD PERUSED. AN ADDITION OF RS.3 32 927/- WAS MADE BY T HE ASSESSING OFFICER ON THE PLEA THAT THE ASSESSEE HAS NOT RECORDED REGISTRATION EXPENSES OF RS.3 09 000/- AND RS. 23 927/- TOTALING TO RS.3 32 927/- INCURRED ON PURC HASE OF 5.87 ACRES OF LAND AT VILLAGE NEORI. BY THE IMPUGNE D ORDER THE CIT(A) DELETED THE ADDITION OF RS. 23 927/- AND UPH ELD THE BALANCE ADDITION OF RS. 3 09 000/-. THE ADDITION OF RS. 23 927/- WAS DELETED BY OBSERVING THAT THE SAID TRA NSACTION WAS DULY RECORDED IN THE BOOKS OF SHRI ASHOK GOYAL. AS PER THE COPY OF LEDGER FILED BEFORE THE LOWER AUTHORITI ES THE CIT(A) -: 6: - 6 FOUND THAT REGISTRATION EXPENSES OF RS. 23 927/- WE RE RECORDED THEREIN AND BOOKS OF ACCOUNTS WERE PRODUCED BEFORE THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS AND AS SUCH THERE WAS NO JUSTIFICATION FOR UPHOLDING THE A DDITION OF RS. 23 927/-. WITH RESPECT TO THE BALANCE ADDITION OF RS. 3 09 000/- NOR IT WAS FOUND RECORDED IN THE BOOKS O F ACCOUNTS THE CIT(A) FOUND THAT THE ASSESSEE COULD NOT ESTABLISH BY BRINGING ANY MATERIAL ON RECORD TO THE EFFECT THAT SUCH REGISTRATION EXPENSES WERE PAID BY THE SELLER. AS THE ASSESSEE WAS UNABLE TO SUBSTANTIATE THE SOURCE OF R S. 3 09 000/- THE CIT(A) CONFIRMED THE ADDITION. WE D O NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) IN CONFIRM ING THE ADDITION OF RS.3 09 000/- WHILE DELETING THE ADDITI ON OF RS. 23 927/-. 7. IN THE RESULT THE GROUND TAKEN BOTH BY THE ASSESS EE AND THE REVENUE IS DISMISSED. 8. AN ADDITION OF RS. 1 57 387/- WAS MADE IN THE ASSESSMENT YEAR 2005-06 ON THE BASIS OF SEIZED PAPE RS LPS- 1/47 PAGES 1-67. THE A.O. HAS MADE THIS ADDITION ON THE BASIS OF SEIZED PAPER NO. LPS 1/47 PAGE 1-67 ON THE -: 7: - 7 GROUND THAT THE REGISTRATION EXPENSES OF RS. 1 57 3 87/- INCURRED ON PURCHASE OF 2.82 ACRE OF LAND AT VILLAG E NEVRI WAS PAID BY THE ASSESSEE OUT OF HIS UNDISCLOSED SOU RCES. 9. BEFORE THE CIT(A) T HE LD.AR HAS CONTENDED THAT THE REGISTRATION CHARGES OF RS. 1 57 387/- ARE DULY RECORDED IN THE BOOKS OF ACCOUNTS WHICH WERE PRODU CED BEFORE THE A.O. DURING ASSESSMENT PROCEEDINGS. COP Y OF RELEVANT LEDGER ACCOUNT CONTAINING THE ENTRY WAS AL SO FILED BEFORE THE A.O. THEREFORE THE ACTION OF THE A.O. I S NOT CORRECT. 10. BY THE IMPUGNED ORDER THE LD. CIT(A) DELETED THE ADDITION AFTER HAVING THE FOLLOWING OBSERVATIONS :- I HAVE GONE THROUGH THE ASSESSMENT ORDER AND CONSIDERED THE SUBMISSIONS OF THE ASSESSEE AND THE COPY OF LEDGER ACCOUNT FILED. IT HAS BEEN SPECIFICALLY MENTIONED IN THE ASSESSEES SUBMISSIONS REPRODUCED AT PAGE 46 OF THE ASSESSMENT ORDER IN THE CASE OF SHRI ASHOK -: 8: - 8 GOYAL THAT THE SAID TRANSACTION WAS RECORDED IN HIS REGULAR BOOKS OF ACCOUNT AND THAT SUCH BOOKS OF ACCOUNTS WERE PRODUCED FOR VERIFICATION. IN THE COPY OF LEDGER ACCOUNT FILED THE REGISTRATION EXPENSES ARE FOUND TO HAVE BEEN RECORDED AT RS. 1 57 387/-. AS THESE EXPENSES ARE DULY RECORDED IN REGULAR BOOKS OF ACCOUNTS WHICH WERE PRODUCED BEFORE THE A.O. ASSESSING OFFICER IS NOT JUSTIFIED IN TREATING THE EXPENSES AS UNEXPLAINED. THE ASSESSEE GETS A RELIEF OF RS. 1 57 387/-. THIS GROUND OF APPEAL IS ACCORDINGLY ALLOWED. 11. RIVAL CONTENTIONS HAVE BEEN CONSIDERED AND RECORD PERUSED. AN ADDITION OF RS.1 57 387/- WAS MADE IN THE A.Y. 2005-06 ON THE BASIS OF SEIZED PAPERS LPS1/47 ON TH E GROUND THAT REGISTRATION EXPENSES OF RS. 1 57 387/- INCURR ED ON PURCHASE OF 2.82 ACRES OF LAND WERE PAID BY THE ASS ESSEE OUT OF UNDISCLOSED SOURCES. BY THE IMPUGNED ORDER THE CIT(A) DELETED THE ADDITION BY RECORDING A FINDING THAT TR ANSACTION OF -: 9: - 9 PURCHASE OF LAND WAS DULY RECORDED IN THE BOOKS OF ASHOK GOYAL AND THESE BOOKS OF ACCOUNTS WERE PRODUCED FOR VERIFICATION BEFORE THE ASSESSING OFFICER. AS PER T HE COPY OF LEDGER ACCOUNT PLACED ON RECORD THE REGISTRATION E XPENSES WERE FOUND TO BE RECORDED AT RS. 1 57 387/-. THE D ETAILED FINDING RECORDED BY THE CIT(A) HAS NOT BEEN CONTROV ERTED. WE THEREFORE DO NOT FIND ANY INFIRMITY IN THE ORDER O F THE CIT(A) IN DELETING THE ADDITION OF RS. 1 57 387/- WHICH WAS F OUND TO BE PROPERLY RECORDED IN THE BOOKS OF ACCOUNTS OF THE A SSESSEE. 12. AN ADDITION OF RS. 2 54 000/- WAS MADE IN THE ASSESSMENT YEAR 2005-06 ON THE BASIS OF LPS-1/41. THE IMPUGNED ADDITION HAS BEEN MADE ON THE BASIS OF LOO SE PAPER MARKED LPS 1/41 PAGES 123-135 ON THE GROUND THAT TH E REGISTRATION EXPENSES OF RS. 2 54 000/- INCURRED ON PURCHASE OF 2.25 ACRE OF LAND AT VILLAGE BAGMUGALIA WAS PAID BY THE ASSESSEE OUT OF UNDISCLOSED SOURCES. 13. BY THE IMPUGNED ORDER THE LD. CIT(A) DELETED THE ADDITION AFTER HAVING THE FOLLOWING OBSERVATIONS :- I HAVE GONE THROUGH THE ASSESSMENT ORDER AND CONSIDERED THE SUBMISSIONS OF THE -: 10: - 10 ASSESSEE. THAT ASSESSEES CLAIM THAT THE EXPENSES WERE PAID BY THE SELLER IS NOT SUPPORTED BY ANY EVIDENCE. THEREFORE IT CANNOT BE ACCEPTED WITHOUT ANY CONFIRMATION FROM THE SELLER OF THE PROPERTY. THE ADDITION IS THEREFORE CONFIRMED. THIS GROUND OF APPEAL IS ACCORDINGLY DISMISSED. 14. RIVAL CONTENTIONS HAVE BEEN CONSIDERED. AN ADDITION OF RS. 2 54 000/- WAS MADE IN THE ASSESSMENT YEAR 2005 -06 ON THE PLEA THAT REGISTRATION EXPENSES OF RS.2 54 000/ - INCURRED ON PURCHASE OF LAND AT VILLAGE BAJ MUGALIA WERE PAI D BY THE ASSESSEE OUT OF UNDISCLOSED SOURCES. BY THE IMPUGNE D ORDER THE CIT(A) CONFIRMED THE ADDITION. WE HAVE CONSIDER ED THE RIVAL CONTENTIONS AND FIND THAT THE ASSESSEE COULD NOT SUBSTANTIATE THE SOURCE OF REGISTRATION EXPENSES IN CURRED BY HIM AT RS. 2 54 000/-. EVEN BEFORE US THE LEARNED COUNSEL FOR THE ASSESSEE COULD NOT DISLODGE THE FINDINGS RECORD ED BY THE LOWER AUTHORITIES. WE THEREFORE CONFIRM THE ACTI ON OF THE -: 11: - 11 CIT(A) IN UPHOLDING THE ADDITION OF RS. 2 54 000/- WITH REFERENCE TO LPS-1/41 PAGES 123 TO 135. 15. AN ADDITION OF RS. 1 33 455/- AND RS. 88 665/- ALSO MADE IN THE ASSESSMENT YEAR 2005-06. THE IMPUGNED ADDITION WAS MADE ON THE BASIS OF LOOSE PAPER LPS 1 /41 PAGE 123-135 ON THE GROUND THAT THE REGISTRATION EXPENSES OF RS. 1 33 455/- INCURRED ON PURCHASES OF 2.60 ACRE OF LAND AT VILLAGE KHAJURIKALAN WERE PAID OUT OF UNDISCLOSED SOURCE. 16. BEFORE THE LD. CIT(A) T HE AR HAS SUBMITTED THAT REGISTRATION EXPENSES OF RS. 1 33 455/- & RS. 88 66 5/- TOTALING TO RS.2 22 120/- ARE DULY RECORDED IN THE BOOKS OF ACCOUNTS. COPY OF THE LEDGER ACCOUNT CONTAINING SUC H ENTRY WAS FILED BEFORE THE A.O. BESIDES PRODUCING T HE BOOKS OF ACCOUNTS. COPY OF THE LEDGER ACCOUNT WAS A LSO FILED. THEREFORE IT WAS REQUESTED TO DELETED THE A DDITION AND ALLOW THE APPEAL ON THIS GROUND. 17. BY THE IMPUGNED ORDER THE LD. CIT(A) DELETED THE ADDITION AFTER HAVING THE FOLLOWING OBSERVATIONS :- -: 12: - 12 I HAVE GONE THROUGH THE ASSESSMENT ORDER AND HAVE CONSIDERED THE ASSESSEES SUBMISSIONS AND THE COPY OF LEDGER ACCOUNT FILED. IT HAS BEEN SPECIFICALLY MENTIONED IN THE SUBMISSIONS OF THE ASSESSEE REPRODUCED AT PAGE 96 OF THE ASSESSMENT ORDER IN THE CASE OF SHRI ASHOK GOYAL THAT THE SAID TRANSACTION WAS DULY RECORDED IN HIS REGULAR BOOKS OF ACCOUNT AND THAT SUCH BOOKS OF ACCOUNTS WERE BEING PRODUCED FOR VERIFICATION. IN THE COPY OF LEDGER ACCOUNT FILED THE REGISTRATION EXPENSES ARE FOUND RECORDED AT RS.2 22 120/- AS THESE EXPENSES ARE DULY RECORDED IN REGULAR BOOKS OF ACCOUNTS AND SUCH BOOKS WERE PRODUCED BEFORE THE A.O. I AM OF THE CONSIDERED OPINION THAT NO ADDITION WAS CALLED FOR ON THIS SCORE. THE ADDITION MADE BY THE A.O. NOT -: 13: - 13 PROPER HENCE DELETED. THESE GROUNDS OF APPEALS ARE ACCORDINGLY ALLOWED. 18. RIVAL CONTENTIONS HAVE BEEN CONSIDERED AND RECORD PERUSED. DURING THE COURSE OF SEARCH THE ASSESSING OFFICER FOUND THAT REGISTRATION EXPENSES OF RS. 1 33 455/- AND RS. 88 665/- TOTALING TO RS.2 22 120/- WERE NOT ACCOUN TED FOR. BY THE IMPUGNED ORDER THE CIT(A) DELETED THE ADDITION BY RECORDING A FINDING THAT THIS TRANSACTION RELATED T O PURCHASE OF PROPERTY BY ASHOK GOYAL AND THE REGISTRATION EXPENS ES HAVE BEEN DULY RECORDED IN THE BOOKS OF ACCOUNTS WHICH W ERE ALSO PRODUCED BEFORE THE ASSESSING OFFICER. PAGE 96 OF T HE ASSESSMENT ORDER OF SHRI ASHOK GOYAL WAS ALSO REFER RED TO WHICH STATED THAT THIS TRANSACTION WAS DULY RECORDE D IN THE REGULAR BOOKS OF ACCOUNTS OF SHRI ASHOK GOYAL AND T HE SAME WAS PRODUCED FOR VERIFICATION. AFTER VERIFYING THE LEDGER COPY THE CIT(A) DELETED THE ADDITION. THE FINDINGS RECO RDED BY THE CIT(A) HAVE NOT BEEN CONTROVERTED ACCORDINGLY WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT(A ) ACCORDING TO WHICH REGISTRATION EXPENSES OF RS. 2 22 120/- WE RE DULY RECORDED IN THE REGULAR BOOKS OF SHRI ASHOK GOYAL W HICH ALSO -: 14: - 14 FIND PLACE IN THE ASSESSMENT ORDER OF SHRI ASHOK GO YAL AT PAGE 96. 19. AN ADDITION OF RS. 3 50 000/- IN THE ASSESSMENT YEA R 2007-08 RS. 53 20 000/- IN THE ASSESSMENT YEAR 20 08-09 AND RS. 40 LAKHS IN THE ASSESSMENT YEAR 2009-10 WAS MADE IN THE HANDS OF THE ASSESSEE ON PROTECTIVE BASIS FOR W HICH SUBSTANTIVE ADDITION WAS MADE BY THE ASSESSING OFFI CER IN THE HANDS OF ASHOK GOYAL. 20. BY THE IMPUGNED ORDER THE LD. CIT(A) DELETED THE PROTECTIVE ADDITION AFTER HAVING THE FOLLOWING OBSE RVATIONS :- I HAVE GONE THROUGH THE ASSESSMENT ORDER AND HAVE CONSIDERED THE ARGUMENTS OF THE LD. AR. THE GROUNDS OF APPEAL RELATING TO THESE ADDITIONS WERE ADJUDICATED IN THE CASE OF SHRI ASHOK GOYAL WHERE SUBSTANTIVE ASSESSMENT WAS MADE IN HIS FAVOUR. SINCE THE IMPUGNED AMOUNTS WERE DISCLOSED IN THE CASE OF THE PRESENT ASSESSEE NO SEPARATE ADDITION IS CALLED FOR IN HER CASE EVEN ON PROTECTIVE BASIS -: 15: - 15 HENCE DELETED. THIS GROUND OF APPEAL IS ACCORDINGL Y ALLOWED. 21. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND FIND FROM RECORD THAT THE ADDITION HAS ALREADY BEEN CONS IDERED ON SUBSTANTIVE BASIS IN THE HANDS OF SHRI ASHOK GOYAL. ACCORDINGLY WE DO NOT FIND ANY INFIRMITY IN THE OR DER OF THE CIT(A) IN DELETING THE PROTECTIVE ADDITION MADE IN THE HANDS OF THE ASSESSEE. 22. IN THE ASSESSMENT YEAR 2006-07 AN ADDITION OF RS. 5 87 000/- WAS MADE. IN THIS REGARD THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD PURCHASED ONE PROPERTY FOR RS.20 54 000/-. THE PAYMENT OF THE SAME WAS MADE THROUGH CHEQUE OF RS. 14 67 500/- AND PDC (POST DAT ED CHEQUE) OF RS. 5 87 000/-. THE A.O. HAD OBSERVED TH AT THE POST DATED CHEQUE OF RS. 5 87 000/- ISSUED ON 4.4.2 005 CANNOT EXPLAIN THE SOURCE OF PAYMENT WHICH HAS CLE ARLY BEEN MADE IN CASH. 23. BEFORE THE LD. CIT(A) THE LD AR HAS SUBMITTED THAT THE ASSESSEE HAS PURCHASED THE SAID PROPERTY ON -: 16: - 16 31.3.2005 AND THE REGISTRATION DOCUMENT ITSELF STAT ES THAT POST DATED CHEQUE OF RS. 5 87 000/- DATED 4.4.2005 HAS BEEN GIVEN AGAINST CONSIDERATION. THE SAID CHEQUE N O 162995 DATED 4.4.2005 ISSUED TO THE SELLER OF THE P ROPERTY MS. MAMTA LALCHANDANI WAS CLEARED IN THE BANK ACCOU NT OF THE ASSESSEE ON 5.5.2005. COPY OF THE BANK PASS BOOK WAS FILED BEFORE THE A.O. IT WAS THEREFORE ARGUED THAT THE A.O. WAS NOT CORRECT IN CONCLUDING THAT THE PAYMENT WAS MADE IN CASH ESPECIALLY WITHOUT BRINGING FOURTH AN Y MATERIAL TO SUPPORT HIS INFERENCE. 24. BY THE IMPUGNED ORDER THE LD. CIT(A) DELETED THE ADDITION AFTER HAVING THE FOLLOWING OBSERVATIONS :- I HAVE GONE THROUGH THE ASSESSMENT ORDER AND THE COPY OF THE BANK PASS BOOK AND THE SUBMISSIONS MADE BY THE LD AR. IT IS SEEN THAT THE ASSESSEE HAD PURCHASED THE SAID PROPERTY ON 31.3.2005 AND MADE THE PAYMENT BY CHEQUE OF RS.14 67 500/- DATED 27.02.2005 AND POST DATED CHEQUE OF RS.5 87 000/- DATED 4.4.2005. AS PER THE COPY OF BANK PASS BOOK -: 17: - 17 THE PDC OF RS. 5 87 000/- WAS CLEARED ON 5.4.2005. THUS THERE WAS NO REASON FOR THE A.O. TO SUSPECT THAT THE SAID AMOUNT WAS PAID IN CASH. THE ADDITION OF RS. 587000/- IS NOT PROPER HENCE DELETED. THIS GROUND OF APPEAL IS ACCORDINGLY ALLOWED. 25. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND FIND FROM RECORD THAT THE ADDITION OF RS. 5 87 000/- WAS MADE IN THE A.Y. 2006-07. THE ASSESSING OFFICER OBSERVED TH AT THE ASSESSEE HAS PURCHASED ONE PROPERTY FOR RS.20 54 00 0/- PAYMENT WAS MADE THROUGH CHEQUE FOR RS. 14 67 500/- AND PDC (POST DATED CHEQUES) OF RS. 5 87 000/- THE ASSE SSING OFFICER OBSERVED THAT PDC ISSUED ON 4.4.2005 CANNOT BE EXPLAINED. ACCORDINGLY THE ADDITION WAS MADE. THE CIT(A) DELETED THE ADDITION BY OBSERVING THAT THE ASSESSEE HAS PURCHASED THE PROPERTY ON 31.3.2005 AND ON THE REGI STRATION DOCUMENT ITSELF POST DATED CHEQUES OF RS. 5 87 000/ - WAS MENTIONED AS PAID AGAINST CONSIDERATION. THE CIT(A) FURTHER OBSERVED THAT THE SAID CHEQUE NO. 162995 DATED 4.4. 2005 ISSUED TO THE SELLER OF THE PROPERTY MRS. MAMTA LAL CHANDANI WAS CLEARED IN THE BANK ACCOUNT ON 5.5.2005. COPY O F THE -: 18: - 18 BANK PASS BOOK WAS ALSO FILED BEFORE THE ASSESSING OFFICER. AS SUCH CHEQUE OF RS. 5 87 000/-WAS FOUND TO BE CLEARE D ON 5.5.2005 AND DULY CREDITED IN THE BANK ACCOUNT OF T HE ASSESSEE WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) IN DELETING THE ADDITION OF RS. 5 87 000/- WHICH WA S DULY RECORDED IN THE BANK ACCOUNT OF THE ASSESSEE. 26. AN ADDITION OF RS. 1 CRORE WAS MADE IN THE ASSESSME NT YEAR 2006-07 ON THE BASIS OF SEIZED DOCUMENTS LPS 1/21 PAGES 3-12 AND LPS 1/10 PAGES 16 21. IN THIS REGA RD THE ASSESSING OFFICER OBSERVED THAT DURING THE COURSE O F SEARCH A JOINT VENTURE AGREEMENT WAS SEIZED AND MARKED AS LP S 1/21 PAGE 5-12 & LPS 1/9 PAGE 16-21. IT WAS EXECUTED ON 1.11.2005 BETWEEN THE ASSESSEE AND SHRI AJAY SHARMA WHO IS ASSESSEE'S PARTNER IN THE FIRM M/S. DRAUPADI CONSTRUCTION. AS PER THIS JV AGREEMENT THE ASSESSEE WAS TO RECEIVE RS. 1 CRORE IN VARIOUS INSTALLMENTS ALL THROUGH CHEQUE AS MENT IONED IN THE SAID AGREEMENT. HOWEVER NO SUCH RECEIPT WAS FO UND RECORDED IN THE REGULAR BOOKS OF ACCOUNTS ON THE GR OUND THAT THE SAID JV WAS CANCELLED AND WAS NEVER ACTED UPON. IN THE ABSENCE OF ANY CANCELLATION AGREEMENT FOUND DURING SEARCH -: 19: - 19 THE ASSESSEE'S EXPLANATION WAS NOT ACCEPTED AND ADD ITION OF THE STATED AMOUNT OF RS. 1 CRORE WAS MADE. 27. BEFORE THE LD. CIT(A) THE LD. A.R CONTENDED THAT ASSESSEE WAS WORKING AS PARTNER WITH A FIRM STYLED 'DRAUPDI CONSTRUCTION' W.E.F. 27.10.2004. THE FIRM IS A REGU LAR INCOME TAX ASSESSEE. THE SHARE PROFIT RECEIVED FROM THE FI RM IS DULY RECORDED IN THE ASSESSEE'S BOOKS AND ALSO DULY DISC LOSED IN HIS RETURNS. IN THE COURSE OF TIME THE ASSESSEE DECIDED TO WITHDRAW FROM THE PARTNERSHIP AND INSTEAD INTENDED TO ENTER INTO A JOINT VENTURE AND ACCORDINGLY THE JV AGREE MENT UNDER REFERENCE WAS EXECUTED. THE ASSESSEE WAS HOWEVER ADVISED THAT A PARTNERSHIP DEED CAN ONLY BE CANCELLED THROU GH A DISSOLUTION DEED AND NOT THROUGH THIS JV AGREEMENT. THE ASSESSEE WAS ALSO INFORMED THAT THE LAND UNDER CONS IDERATION BECAME THE PROPERTY OF THE PARTNERSHIP FIRM IN ACCO RDANCE WITH PARA-3 OF THE PARTNERSHIP DEED W.E.F. 27.10.20 04 THE DAY ON WHICH THE PARTNERSHIP DEED WAS EXECUTED AND THE ASSESSEE WAS NO LONGER THE OWNER OF THE SAID PROPERTY AND HE NCE THE JV AGREEMENT UNDER REFERENCE ENTERED INTO BY HIM D EPICTING HIMSELF AS THE OWNER WAS INVALID AND THE JV AGREEM ENT -: 20: - 20 ACCORDINGLY BECOMES NULL AND VOID. THOUGH THE SAID JV AGREEMENT HAD BECOME NULL AND VOID DUE TO ABOVE CON DITIONS THE PARTIES HAD FORMALLY CANCELLED THE SAME BY WAY OF A CANCELLATION AGREEMENT. AS A CONSEQUENCE CHEQUES MENTIONED IN SUCH AGREEMENT WERE ALSO NOT ENCASHED. COPY OF THE SAID CANCELLATION AGREEMENT WHICH WAS FILED WIT H THE AO DURING THE ASSESSMENT PROCEEDINGS WAS SUBMITTED. AS A RESULT THE ORIGINAL PARTNERSHIP FIRM IS CONTINUING UNAFFECTED BY THE INTERMEDIARY CANCELLED JV AGREEMENT. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE WAS INFORMED BY THE OTH ER PARTY TO THE JV AGREEMENT THAT THE A.O. HAD ALSO RECORDE D THE STATEMENT OF THAT PARTY U/S 131 OF THE ACT WHO HAS ALSO CONFIRMED THE SAID FACTS. DESPITE SUCH CONFIRMED PO SITION THAT THE JV WAS CANCELLED AND THE CHEQUES MENTIONED IN T HE JV WERE NOT RECEIVED THE A.O. HAS MADE THE ADDITION O N SURMISES AND CONJECTURES AND HIS ACTION IS NOT CORRECT. 28. BY THE IMPUGNED ORDER THE LD. CIT(A) DELETED THE ADDITION AFTER HAVING THE FOLLOWING OBSERVATIONS :- 14.3 I HAVE CAREFULLY GONE THROUGH THE ASSESSMENT ORDER THE RELEVANT SEIZED PAPERS THE -: 21: - 21 SUBMISSIONS OF THE ASSESSEE AND THE COPIES OF JV CANCELLATION AGREEMENT TILED UNDISPUTEDLY THE BUSINESS OF THE PARTNERSHIP FIRM IS CONTINUING SUBSTITUTING THE JV AGREEMENT. ACCORDINGLY THE JV HAS BECOME REDUNDANT. THEREFORE THE ACTION OF THE A.O. IS NOT CORRECT. IT IS FURTHER OBSERVED THAT THE ENTIRE PAYMENTS MENTIONED IN THE SAID AGREEMENT WERE TO BE MADE BY ACCOUNT PAYEE CHEQUES. THE AO HAS NOT BROUGHT ON RECORD ANY MATERIAL TO SUBSTANTIATE THAT SUCH CHEQUES WERE REPLACED BY CASH. UNDER THE CIRCUMSTANCES THE AO WAS NOT JUSTIFIED IN MAKING THE ADDITION. THIS GROUND OF APPEAL IS ACCORDINGLY ALLOWED AND THE AO IS DIRECTED TO DELETE THE ADDITION OF RS. L CRORE. 29. RIVAL CONTENTIONS HAVE BEEN CONSIDERED AND RECORD PERUSED. THE ADDITION WAS MADE BY THE ASSESSING OF FICER ON THE BASIS OF SEIZED DOCUMENT LPS 1/21 PAGES 3 TO 12 AND LPS 1/10 PAGES 16 TO 21. IN THIS REGARD THE ASSESSING OFFICER STATED THAT THE JOINT VENTURE AGREEMENT WAS FOUND W HICH WAS EXECUTED BETWEEN THE ASSESSEE AND AJAY SHARMA WHO I S -: 22: - 22 ASSESSEES PARTNER IN THE FIRM M/S DRUPATI CONSTRUC TION. AS PER THE JOINT VENTURE AGREEMENT THE ASSESSEE WAS TO RECEIVE RS. 1 CRORE IN VARIOUS INSTALMENTS THROUGH CHEQUES AS M ENTIONED IN THE SAID AGREEMENT. IT WAS EXPLAINED BEFORE THE ASSESSING OFFICER THAT THE ASSESSEE WAS WORKING AS PARTNER OF M/S DRUPATI CONSTRUCTION WITH EFFECT FROM 27.10.2004. T HIS FIRM WAS REGULARLY ASSESSED TO TAX AND THE SHARE OF PROF IT RECEIVED FROM THE SAID FIRM WAS DULY RECORDED IN THE BOOKS O F ACCOUNTS AND ALSO DISCLOSED IN THE RETURN. LATER ON THE ASS ESSEE WAS INTENDING TO WITHDRAW FROM THE PARTNERSHIP AND THE REFORE PROPOSED A JOINT VENTURE AGREEMENT. SUBSEQUENTLY T HE SAID AGREEMENT WAS CANCELLED AND THE ASSESSEE DID NOT RE CEIVE ANY CHEQUE AS MENTIONED IN THE JOINT VENTURE AGREEMENT. COPY OF CANCELLATION OF THE JOINT VENTURE AGREEMENT WAS ALS O FILED BEFORE THE ASSESSING OFFICER. AS NOTHING WAS RECEIV ED BY THE ASSESSEE DUE TO CANCELLATION OF JOINT VENTURE AGREE MENT NOR ANYTHING WAS FOUND CREDITED IN THE BANK ACCOUNT OF THE ASSESSEE THE ADDITION WAS ALLEGED TO BE UNJUSTIFIE D. THE CIT(A) DELETED THE ADDITION BY OBSERVING THAT THE J OINT VENTURE AGREEMENT WAS CANCELLED AND THIS FACT WAS BEFORE TH E -: 23: - 23 ASSESSING OFFICER. THE CIT(A) FURTHER FOUND THAT TH E ENTIRE PAYMENT MENTIONED IN THE SAID AGREEMENT WAS TO BE M ADE BY ACCOUNT PAYEE CHEQUES WHEREAS THE ASSESSEE WAS NOT IN RECEIPT OF ANY CHEQUE AS PER THE BANK ACCOUNT PLAC ED BEFORE THE LOWER AUTHORITIES. AS NOTHING WAS RECEIVED BY T HE ASSESSEE AS PER THE SAID JOINT VENTURE AGREEMENT IN TERMS O F THE FINDINGS RECORDED BY THE CIT(A) IN PARA 14.3 WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) IN DELETIN G THE SAID ADDITION. 30. AN ADDITION OF RS. 18 LAKHS IN THE ASSESSMENT YEAR 2006-07 AND RS. 20 LAKHS IN THE ASSESSMENT YEAR 200 8-09 WAS MADE. IN THIS REGARD THE ASSESSING OFFICER OBS ERVED THAT DURING THE COURSE OF SEARCH THREE CHEQUES DRAWN IN FAVOUR OF THE ASSESSEE I.E. ONE CHEQUE OF RS. 18 00 000/- DATED 6.10.2005 ISSUED BY SHRI ATEEQ AND TWO CHEQUES OF RS. 11 00 000/- AND RS. 9 00 000/- ISSUED RESPECTIVELY BY M/S. DRAUPDI CONSTRUCTION AND SHRI SANJEEV KHARBANDA WERE FOUND AND SEIZED. T HE A.O. HAS ADDED THE VALUE OF THESE CHEQUES AS UNEXPLAINED CASH LOANS ADVANCED TO THESE PERSONS. ACCORDING TO THE AO. THESE -: 24: - 24 CHEQUES WERE OBTAINED AND AVAILABLE WITH THE ASSESS EE AGAINST SECURITY OF THE CASH LOANS TENDERED BY HIM. 31. BEFORE THE LD. CIT(A) I N THE COURSE OF APPEAL PROCEEDINGS THE LD. COUNSEL HAS MADE ELABORATE SUBMISSIONS THE SUM AND SUBSTANCE OF WHICH STATES THAT THE CHEQUE OF RS. 18 00 000/- ISSUED BY SHRI ATEEQ RELATES TO LOAN OBTAINED FROM HIM. IT WAS CONTENDED THAT THE ASSESSEE'S FAMILY BORROWS MONEY FROM HIM FROM TIME TO TIME AND OTHER LOAN TRANSACTIONS APPEARING IN THE CASES OF THE ASSESSEE AND HIS GRANDSON SHRI ANCHIT GOYAL SUBSTANTIATE THIS FACT. IT WAS SUBMITTED THAT SUCH LOANS ARE RAISED IN THE PROCESS OF PURCHASING PROPERTIES. THOUGH THE CHEQUES WERE OBTAINED FROM THE PARTIES THEY ARE PRESENTED ONLY WHEN THE FUNDS ARE REQUIRED AFTER MATERIALIZAT ION OF THE DEALS OTHERWISE THE CHEQUES ARE NOT PRESEN TED. THE CHEQUE UNDER CONSIDERATION BELONGS TO THAT CATEGORY. DUE TO LONG RELATIONS THE LENDER COULD NO T -: 25: - 25 RECALL THE CHEQUE AND IT WAS LYING WITH THE ASSESSEE . IT WAS ALSO ARGUED THAT THE SAID CHEQUE WAS DATED 13.10.2005 AND IS STALE AS ON THE DATE OF SEARCH AS SUCH AND COULD NOT HAVE BEEN USED AS A SECURITY AS INFERRED BY THE AO. 32. BY THE IMPUGNED ORDER THE LD. CIT(A) DELETED THE ADDITION AFTER HAVING THE FOLLOWING OBSERVATIONS :- REGARDING THE CHEQUE OF RS. 9 00 000/- DATED 18.03.2008 ISSUED BY SHRI SANJEEV KHARBANDA ON BEHALF OF M/S. SUPER BUILDERS AND DEVELOPERS THE ASSESSEE CONTENDED THAT HE IS A PARTNER IN THE SAID FIRM AND RECEIVES CHEQUES FROM THE SAID FIRM IN REGULAR COURSE AND THEY ARE RECORDED IN THE REGULAR BOOKS OF ACCOUNT. FEW OTHER INSTANCES OF SUCH CHEQUE TRANSACTIONS WERE ALSO CITED. THE ASSESSEE HAS RECEIVED THE CHEQUE IN THE NORMAL COURSE OF BUSINESS AND IT WAS TO BE DEPOSITED ON 18.03.2008 BUT ON THE REQUEST OF THE DRAWER IT -: 26: - 26 WAS TO BE DEPOSITED AFTER 75 DAYS AND IN THE MEAN WHILE THE SEARCH TOOK PLACE AND THE SAID CHEQUE WAS SEIZED DURING THE SAID SEARCH. IT WAS CONTENDED THAT THE ALLEGATION THAT IT WAS RECEIVED AGAINST CASH LOAN IS NOT CORRECT SPECIFICALLY FOR THE REASON THAT THE ASSESSEE IS ALSO A PARTNER IN THE FIRM AND LENDING CASH LOAN IN SECURITY OF CHEQUE OF THE SAME FIRM IS RIDICULOUS. IT WAS CONTENDED THAT THE ASSESSEE BEING A PARTNER COULD HAVE INTRODUCED THE FUNDS EVEN IN CASH IF REQUIRED. THUS ACCORDING TO THE ASSESSEE THE ACTION OF THE A.O. IS HYPOTHETICAL AND IS NOT BASED EVEN ON ANY RATIONAL ANALOGY OR PROOF REGARDING THE CHEQUE OF RS. 11 00 000 DATED 01.10.2007 ISSUED BY SHRI AJAY SHARMA OF DRAUPDI CONSTRUCTION IDENTICAL SUBMISSIONS WERE MADE. THE GIST OF THE SUBMISSIONS IS THAT THE CHEQUE WAS RECEIVED AS PER CONDITIONS MENTIONED IN THE JV AGREEMENT REFERRED ABOVE AND THIS DOES NOT REPRESENT ANY -: 27: - 27 SECURITY AGAINST ANY CASH LOAN ALLEGEDLY GIVEN BY HIM. THE LD. A.R. CONTENDED THAT THERE IS NO EVIDENCE OF ANY FORM AND ALL THE ADDITIONS WERE MADE MERELY ON SURMISES. THE PREMISES OF THE ASSESSEE AND HIS SON WERE THOROUGHLY SEARCHED AND NO EVIDENCES SUGGESTING SUCH CASH LOANS BY THE ASSESSEE OR HIS FAMILY MEMBERS WERE FOUND. UNDER SUCH CIRCUMSTANCES THE ADDITION WAS MADE PURELY ON SUSPICION AND DESERVES TO BE DELETED. 33. BY THE IMPUGNED ORDER THE LD. CIT(A) DELETED THE ADDITION AFTER HAVING THE FOLLOWING OBSERVATIONS :- I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORDERS AND SUBMISSION OF THE ASSESSEE ALONG WITH COPIES OF THE CHEQUES COPY OF ACCOUNT OF THE FIRM M/S. SUPER DEVELOPERS AND JV AGREEMENT OF ASSESSEE WITH SHRI AJAY SHARMA. I HAVE ALSO PERUSED THE CASH BOOK AND LEDGER OF THE ASSESSEE AND HIS GRANDSON PRODUCED DURING THE -: 28: - 28 COURSE OF HEARING. ADMITTEDLY THE ASSESSEE'S FAMILY HAS BEEN TAKING LOANS FROM SHRI ATEEQ THROUGH CHEQUES AND SIMILAR ISSUE HAS COME UP IN THE CASE OF SHRI ANCHIT OF THE ASSESSEE. THEREFORE THE ALLEGATION THAT THE CHEQUES RELATE TO SECURITY AGAINST CASH LOANS IS A LONG DRAWN CONCLUSION. DUE TO EXPIRY OF VALIDITY OF THE CHEQUE OF SHRI ATIQ IT BECOMES UNENFORCEABLE. SIMILARLY THE CHEQUE ISSUED BY SANJEEV KHARBANDA AS PARTNER OF M/S SUPER DEVELOPERS AND PROMOTERS IN WHICH THE ASSESSEE IS A PARTNER SHOWS THAT IT WAS ISSUED IN THE NORMAL COURSE OF BUSINESS AND IT DOES NOT CALL FOR ANY ADVERSE INFERENCE WITHOUT ANY BASIS. THE CHEQUE ISSUED BY SHRI AJAY SHARMA RELATES TO THE JV AGREEMENT REFERRED TO IN PARA 14 ABOVE WHEREIN PARTICULARS OF THE CHEQUE ARE INDICATED. THEREFORE IT CANNOT BE CONCLUDED THAT THE CHEQUE -: 29: - 29 IS AVAILABLE AS SECURITY AGAINST CASH LOAN. THE LD. A.R' S CONTENTION THAT THOROUGH SEARCH OF THE ASSESSEE'S PREMISES WAS CONDUCTED AND NO EVIDENCES SUGGESTING LENDING OF CASH LOANS WAS FOUND CARRIES SOME FORCE. THE AO HAS NOT BROUGHT FORTH ANY MATERIAL TO SUBSTANTIATE THAT ANY SUCH LOANS WERE GIVEN BY THE ASSESSEE. IT IS TRITE LAW THAT NO ADDITION COULD BE MADE ON THE BASIS OF SUSPICION AND SUSPICION HOWSOEVER STRONG MAY BE AND CANNOT SUBSTITUTE LEGAL PROOF. THEREFORE THE ADDITIONS MADE BY THE A.O. ARE NOT SUSTAINABLE HENCE DELETED. THIS GROUND OF APPEAL ACCORDINGLY IS ALLOWED. 34. RIVAL CONTENTIONS HAVE BEEN CONSIDERED AND RECORD PERUSED. FROM RECORD WE FIND THAT VARIOUS ADDITION S WERE MADE IN THE A.YS. 2006-07 TO 2008-09 ON THE PLEA TH AT CHEQUES ISSUED BY ATIQ WERE FOUND WITH THE ASSESSEE . THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE HAS EXTENDED CASH LOAN AGAINST WHICH CHEQUES WERE GIVEN AS A -: 30: - 30 SECURITY. AS NO SUCH LOANS WERE FOUND RECORDED AS HAVING BEEN GIVEN BY THE ASSESSEE THE ASSESSING OFFICER A DDED THE AMOUNT OF CHEQUES TO THE ASSESSEES INCOME IN THESE YEARS. BY THE IMPUGNED ORDER THE CIT(A) DELETED THE ADDIT ION BY OBSERVING THAT THE ASSESSEES FAMILY WAS TAKING THE LOAN FROM ATIQ THROUGH CHEQUES WHICH HAVE BEEN DULY RECORDED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE AND HIS OTHER FAM ILY MEMBERS. AS NOTHING WAS BROUGHT ON RECORD TO SUBSTA NTIATE THAT THE CHEQUE WAS GIVEN AS A SECURITY OF LOAN WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) IN DELETIN G THE ADDITION IN RESPECT OF CHEQUE OF SHRI ATIQ. FURTHERMORE ASS ESSEE AND HIS FAMILY WAS REGULARLY RECEIVING LOAN FROM SHRI A TIQ AND WHICH DULY FIND PLACE IN THEIR RESPECTIVE BOOKS OF ACCOUNTS. SIMILARLY CHEQUE ISSUED BY SANJEEV KHARBANDA AS PA RTNER OF M/S SUPER DEVELOPERS AND PROMOTERS IN WHICH THE ASS ESSEE WAS ALSO A PARTNER IT WAS FOUND THAT THE CHEQUE WA S ISSUED IN THE NORMAL COURSE OF BUSINESS. THE CIT(A) OBSERVED THAT EVEN AFTER COMPLETE SEARCH AT THE RESIDENCE AND BUSINESS PREMISES NOTHING WAS FOUND TO SUGGEST THAT THE ASSESSEE HAD GIVEN ANY CASH LOAN TO ANY PERSON. ON THE CONTRARY THE ASSES SEE WAS -: 31: - 31 FOUND TO HAVE TAKEN LOAN FOR THE PURPOSE OF ITS PRO PERTY BUSINESS. THE DETAILED FINDINGS RECORDED BY THE CIT (A) HAVE NOT BEEN CONTROVERTED ACCORDINGLY WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) RESULTING INTO DELETION OF ADDITION MADE BY THE ASSESSING OFFICER ON THE BASIS OF CHEQUES SO FOUND. 35. AN ADDITION OF RS. 3 38 580/- RS. 8 80 200/- RS. 13 41 091/- RS. 22 23 844/- WAS MADE IN THE ASSESS MENT YEARS 2006-07 2007-08 AND 2008-09 RESPECTIVELY. IN THIS REGARD THE ASSESSING OFFICER OBSERVED THAT SOME CH EQUES DRAWN IN THE NAME OF THE ASSESSEE WERE FOUND DURING THE COURSE OF SEARCH. IT WAS HELD BY THE AO THAT THE AS SESSEE HAS GIVEN LOANS IN CASH AND HAS OBTAINED SIGNED CHEQUE AS SECURITY FROM THE BORROWER. AS NO SUCH LOANS WERE A PPEARING IN THE BOOKS OF ACCOUNT OF THE ASSESSEE THE VALUE OF SUCH CHEQUES HAS BEEN ADDED AS UNEXPLAINED INCOME OF THE ASSESSEE. THE AO HAS FURTHER HELD THAT THE ASSESSEE MUST HAVE EARNED INTEREST INCOME ON SUCH LOANS AND HAVE ACCORDINGLY CALCULATED INTEREST ON THESE LOANS AND HAVE ADDED THE SAME AS INCOME OF THE ASSESSEE IN VARIOUS YEARS . -: 32: - 32 36. BEFORE THE LD. CIT(A) IT WAS SUBMITTED BY THE ID. AR THAT THE ASSESSEE HAS NOT GIVEN ANY SUCH LOAN. DETA ILED SUBMISSIONS WERE MADE IN THIS REGARD WHICH ARE ALRE ADY SUMMARISED IN PARA 15.2 OF THIS ORDER ABOVE. IT WAS FURTHER SUBMITTED THAT THE AO HAS NOT FOUND ANY EVIDENCE OR MATERIAL TO SUBSTANTIATE THAT THE ASSESSEE HAS RECEIVED ANY AMOUNT AS INTEREST INCOME. 37. BY THE IMPUGNED ORDER THE LD. CIT(A) DELETED THE ADDITION AFTER HAVING THE FOLLOWING OBSERVATIONS :- I HAVE GONE THROUGH THE ASSESSMENT ORDERS AND TILE SUBMISSIONS OF THE ASSESSEE. AS PER DETAILED DISCUSSION MADE IN PARA 15.3 OF THIS ORDER IT HAS ALREADY BEEN HELD THAT THE AO WAS NOT JUSTIFIED IN TREATING THE CHEQUE AS SECURITY AGAINST THE ALLEGED LOANS. THUS ONCE IT HAS BEEN HELD THAT THE SAID CHEQUES DID NOT REPRESENT ANY LOAN GIVEN BY THE ASSESSEE THERE IS NO QUESTION OF RECEIVING ANY INTEREST ON SUCH ALLEGED LOANS. THIS GROUND OF APPEAL IS THEREFORE ALLOWED AND THE ADDITION TOWARDS -: 33: - 33 INTEREST INCOME OF RS. 338580/- 880200/- 1341091/- 2223844/- RESPECTIVELY MADE IN VARIOUS YEARS IS HEREBY DELETED. 38. RIVAL CONTENTIONS HAVE BEEN CONSIDERED AND RECORD PERUSED. SIMILAR ADDITION WAS MADE BY THE ASSESSIN G OFFICER IN RESPECT OF CHEQUES FOUND DURING THE COURSE OF SE ARCH. THE CIT(A) DELETED THE SAME BY OBSERVING THAT NOTHING W AS FOUND TO SUGGEST THAT THE ASSESSEE HAS GIVEN ANY LOAN. WE HAVE ALREADY DISCUSSED THIS ISSUE IN PARA____. BASED ON THE SAME REASONING WE CONFIRM THE ACTION OF THE CIT(A). 39. IN THE ASSESSMENT YEAR 2007-08 AN ADDITION OF RS. 20 LAKHS WAS MADE ON THE BASIS OF TYPED LEGAL NOTICE F OUND DURING THE COURSE OF SEARCH THE AO OBSERVED THAT AS PER PROVISION OF SECTION 132( 4A) THE ASSESSEE WAS REQ UIRED TO REBUT THE PRESUMPTION THAT IT DOES NOT BELONG TO HI M HE FAILED TO DO SO AND THEREFORE THE ADDITION WAS MADE. IN THE COURSE OF APPEAL PROCEEDINGS BEFORE CIT(A) THE LD. AR HAS CONTENDED THAT THE LETTER WAS UNSIGNED AND WAS NOT IN THE ASS ESSEE'S HAND WRITING. SEARCH U/S. 132 OF THE ACT WAS NOT CO NDUCTED IN THE ASSESSEE'S PREMISES. THEREFORE THE PRESUMPTIVE PROVISION -: 34: - 34 OF SECTION 132(4A) DOES NOT APPLY. EXPLAINING ON ME RITS THE LD. AR CONTENDED THAT THE LETTER STATES THAT PAYMEN T OF RS. 2 00 000/- WAS MADE BY CASH AND RS. 12 00 000/- BY CHEQUE AND THE SAID AMOUNT WAS DEMANDED BACK. IT WAS CONTE NDED THAT NO SUCH CHEQUE WAS EVER ISSUED TO ANY PERSON A ND THIS FACT IS VERIFIABLE FROM THE BOOKS OF ACCOUNTS. AS A COROLLARY THE CLAIM OF REFUND OF RS. 2 OO 000/- INDICATED IN THE SAID LETTER DOES NOT CARRY ANY SIGNIFICANCE. THE LD. COUNSEL FU RTHER SUBMITTED THAT IT IS VERY COMMON IN LEGAL DISPUTES TO MAKE ALLEGATION ON EACH OTHER AND SUCH ALLEGATION ARE NO T ALWAYS TRUE. 40. BY THE IMPUGNED ORDER THE LD. CIT(A) DELETED THE ADDITION AFTER HAVING THE FOLLOWING OBSERVATIONS :- 17.1 I HAVE GONE THROUGH THE OBSERVATIONS OF THE AO AND SUBMISSIONS OF THE ASSESSEE . UNDISPUTEDLY THE LETTER UNDER REFERENCE IS NOT SIGNED NOR IS UNDER THE SIGNATURE OF THE ASSESSEE. NO CORROBORATIVE EVIDENCE WAS FOUND DURING SEARCH TO SUGGEST THAT SUCH CASH PAYMENTS WAS EVER MADE EARLIER. THE ASSESSEE'S CONTENTION THAT NO CHEQUE O F -: 35: - 35 RS. 12 00 000/- MENTIONED IN THE LETTER WAS EVER PAID BY HIM IS A FACT VERIFIABLE FROM THE BOOKS OF ACCOU NTS AND BANK STATEMENTS. THIS STATEMENT OF THE ASSESSEE WAS NOT CONTROVERTED BY THE AO. THUS IF ONE PART OF THE TRANSACTION IS HELD TO BE INCORRECT THE OTHER PART CANNOT BE TREATED AS CORRECT WITHOUT SUPPORTING EVIDENCES. UNDER THESE CIRCUMSTANCES THE ADDITION MADE BY THE A.O. IS NOT PROPER HENCE DELETED. THIS GROUND OF APPEAL IS THEREFORE ALLOWED AND THE ADDITION OF R S. 2 00 000/- IS DIRECTED TO BE DELETED. 41. RIVAL CONTENTIONS HAVE BEEN CONSIDERED AND RECORD PERUSED. THE ADDITION WAS MADE BY THE ASSESSING OF FICER ON THE BASIS OF TYPED LEGAL NOTICE FOUND DURING THE CO URSE OF SEARCH. THE CIT(A) DELETED THE ADDITION BY OBSERVIN G THAT THE SAID NOTICE WAS NOT SIGNED BY THE ASSESSEE. THERE W AS NOTHING TO SUGGEST THAT THE ASSESSEE HAS RECEIVED ANYTHING AS PER THE NOTICE GIVEN. NOTHING WAS FOUND DURING THE COURSE OF SEARCH TO SUGGEST THAT ANY SUCH CASH PAYMENT WAS EVER MADE BY THE ASSESSEE NOR IT WAS FOUND THAT ANY CHEQUE OF RS. 12 LACS WAS -: 36: - 36 EVER PAID BY HIM. EVEN AS PER THE BOOKS OF ACCOUNT S NOTHING WAS POINTED OUT BY THE ASSESSING OFFICER TO SHOW TH AT THE ASSESSEE HAS PAID ANY CHEQUE OF RS. 12 LACS NOR IN THE BANK ACCOUNT OF THE ASSESSEE ANY SUCH WITHDRAWAL WAS IND ICATED. THE DETAILED FINDING RECORDED BY THE CIT(A) IN PARA 17.1 HAS NOT BEEN CONTROVERTED BY BRINGING ANY POSITIVE MATE RIAL ON RECORD ACCORDINGLY WE DO NOT FIND ANY REASON TO IN TERFERE WITH THE ORDER OF THE CIT(A). ACCORDINGLY THE SAME IS U PHELD. 42. IN THE ASSESSMENT YEAR 2007-08 AN ADDITION OF RS. 29 22 000/- WAS MADE ON THE BASIS OF UNSIGNED SAUDA C HITTI MENTIONING THE PURCHASE CONSIDERATION AT RS.44 22 0 00 (@22 00 000 PER ACRE) FOUND DURING COURSE OF SEARCH . THE AO OBSERVED THAT PREPARATION OF A DOCUMENT AND RETENTI ON OF A COPY THEREOF BY THE ASSESSEE CLEARLY ESTABLISHES TH E FACT THAT SUCH AGREEMENT INDEED TOOK PLACE. HE ALSO HELD THAT THE AGREEMENT RECITES THAT THE PAYMENT WAS MADE. 43. BEFORE THE LD. CIT(A) THE LD. AR FOR THE ASSESSEE CONTENDED THAT THE SAID SAUDA CHITTI WAS NOT UNDER THE SIGNATURE OF ANY OF THE PARTIES. SUCH DRAFT DOCUMEN TS ARE PREPARED AT THE NEGOTIATION STAGE TO SPECIFY TERMS AND -: 37: - 37 CONDITIONS REGARDING PAYMENTS UNDER NEGOTIATION TO AVOID FUTURE DISPUTE. HOWEVER SUCH DRAFT DOCUMENTS UNTI L AND UNLESS ARE SIGNED BY ALL PARTIES AND WITNESSES DO NOT TAKE CHARACTER OF AGREEMENT. AS APPARENT FROM THE SEIZED PAPERS NO CONSIDERATION HAD PASSED ON. IT WAS FURTHER EXPL AINED THAT THE ASSESSEE VERY COMMONLY RETAINS ONE SIDE USED SC RAP STATIONERY FOR FURTHER USE AND THE IMPUGNED PAPER W AS ONE SUCH STATIONERY USED FOR FUTURE USE ON THE OTHER SI DE. A COPY OF SAUDA CHITTI -LPS- NO.1/16 PAGE NO.7 WAS ALSO F IELD. 44. BY THE IMPUGNED ORDER THE LD. CIT(A) DELETED THE ADDITION AFTER HAVING THE FOLLOWING OBSERVATIONS :- 18.3 I HAVE CONSIDERED THE ASSESSMENT ORDER AND THE SUBMISSIONS OF THE ASSESSEE. IT IS FOUND TH AT THE AO HAS MADE THE ADDITION ON THE BASIS OF A TYPED DRAFT OF LETTER WHICH IS NOT UNDER THE SIGNATURE OF EITHER THE PURCHASER OR THE SELLER OR THE WITNESS. THE SAID LETTER CONTAINS BLANK SPACES IN THE DESCRIPTION COLUMN OF PAYMENT. THUS NO RELIANC E COULD HAVE BEEN PLACED ON SUCH UNSIGNED HALF FILLED PAPER. NO ENQUIRY SEEMS TO HAVE BEEN MADE FROM -: 38: - 38 THE SELLERS MENTIONED IN SUCH LETTER. THE AO HAS NO T BROUGHT ANY OTHER MATERIAL ON RECORD TO SUBSTANTIAT E THAT THE SAID TRANSACTION WAS ENTERED INTO AT THE PRICE STATED IN THE SAID LETTER. THUS THE AO WAS N OT JUSTIFIED IN MAKING THE ADDITION ON THE BASIS OF SU CH PAPER. ACCORDINGLY THIS GROUND OF APPEAL IS ALLOWE D AND THE ADDITION OF RS. 29 22 000/- MADE BY THE AO IS HEREBY DELETED. 45. RIVAL CONTENTIONS HAVE BEEN CONSIDERED AND RECORD PERUSED. FROM RECORD WE FIND THAT THE ADDITION WAS MADE BY THE ASSESSING OFFICER ON THE BASIS OF UNSIGNED SAUD A CHITTHI MENTIONING PURCHASE OF LAND. IT WAS SUBMITTED BEFOR E THE ASSESSING OFFICER THAT THE SAID SAUDA CHITTHI WAS N OT UNDER THE SIGNATURE OF ANY PARTY AND SUCH DRAFT DOCUMENTS ARE PREPARED AT NEGOTIATION STAGE TO SPECIFY THE TERMS AND CONDITIONS REGARDING PAYMENTS UNDER NEGOTIATION TO AVOID FUTURE DISPUTE. IT WAS FURTHER CONTENDED THAT THE S AID DRAFT DOCUMENT UNTIL AND UNLESS SIGNED BY ANY OF THE PART IES DOES NOT TAKE THE CHARACTER OF AGREEMENT. AS PER THE AS SESSEE NO CONSIDERATION WAS PASSED NOR THE ASSESSEE HAS PURCH ASED ANY -: 39: - 39 LAND. THE CIT(A) DELETED THE ADDITION BY OBSERVING THAT THE ADDITION WAS MADE ON THE BASIS OF TYPED DRAFT LETTE R WHICH WAS NOT UNDER SIGNATURE OF ANY OF THE SELLERS OR THE PU RCHASERS. THE SAID LETTER CONTAINS BLANK SPACES. THUS NO RE LIANCE SHOULD HAVE BEEN PLACED ON SUCH UNSIGNED HALF FILLE D PAPER. WE FIND THAT NOTHING WAS FOUND DURING THE COURSE OF SEARCH OR ON SUBSEQUENT INQUIRY TO BRING ON RECORD THAT THE A SSESSEE HAS PURCHASED ANY PROPERTY AS MENTIONED IN THE DRAF T LETTER. ACCORDINGLY WE DO NOT FIND ANY INFIRMITY IN THE OR DER OF THE CIT(A) RECORDED IN PARA 18.3 46. AN ADDITION OF RS. 2 29 135/- WAS MADE IN THE ASSESSMENT YEAR 2007-08 ON THE BASIS OF LOOSE PAPER NO. LPS 1/47 PAGE 67 O BSERVING THAT THE ASSESSEE HAS PAID THE STAMP DUTY CHARGES OF RS.2 29 135/- FOR THE PROPERT Y PURCHASED AT VILLAGE NEORI OUT OF UNDECLARED SOURCE . 47. BEFORE THE LD. CIT(A) IT WAS SUBMITTED BY THE AR T HAT THE SAID AMOUNT WAS PAID BY THE SELLER OF THE PROPE RTY AND WAS ACCORDINGLY NOT REQUIRED TO BE RECORDED IN TH E HOOKS OF ACCOUNT OF THE ASSESSEE. -: 40: - 40 48. BY THE IMPUGNED ORDER THE LD. CIT(A) CONFIRMED DELETED THE ADDITION AFTER HAVING THE FOLLOWING OBS ERVATIONS :- 19.3 I HAVE GONE THROUGH THE ASSESSMENT ORDER AND HAVE CONSIDERED THE - SUBMISSIONS OF THE ASSESSEE. THE ASSESSEE HAS NOT BROUGHT ON RECORD ANY EVIDENCE TO SUPPORT HIS STAND THAT THE REGISTRATION EXPENSES WERE PAID BY THE SELLER. THE CONTENTION ( OF THE ASSESSEE CANNOT BE ACCEPTED WITHOUT ANY CONFIRMATION FROM THE SELLER OF THE PROPERTY. THIS GROUND OF APPEAL IS ACCORDINGLY DISMISSED AND ADDITION OF RS. 2 29 135/- IS CONFIRMED. 49. RIVAL CONTENTIONS HAVE BEEN CONSIDERED AND RECORD PERUSED. AS PER NOTINGS OF LPS 1/47 PAGE 67 THE A SSESSEE HAS PAID STAMP DUTY OF RS. 2 29 135/- IN RESPECT OF PROPERTY PURCHASED AT VILLAGE NEORI. HOWEVER THE ASSESSEE COULD NOT EXPLAIN THE SOURCE NOR COULD INDICATE WHETHER SUCH EXPENDITURE FINDS PLACE IN THE REGULAR BOOKS OF ACC OUNTS. ACCORDINGLY THE ADDITION MADE BY THE ASSESSING OFF ICER WAS CONFIRMED BY THE CIT(A). NOTHING WAS BROUGHT TO OUR NOTICE BY THE LEARNED AR SO AS TO PERSUADE TO DEVIATE FROM TH E FINDINGS -: 41: - 41 RECORDED BY THE LOWER AUTHORITIES. WE THEREFORE C ONFIRM THE ACTION OF THE CIT(A) IN UPHOLDING THE ADDITION OF R S. 2 29 135/-. 50. IN THE ASSESSMENT YEAR 2007-08 AN ADDITION OF RS. 1 84 375/- WAS MADE ON THE BASIS OF LOOSE PAPER LPS 1/41. IN THIS REGARD THE ASSESSING OFFICER OBSERVED THAT AD DITION OF RS.1 84 375/- MADE ON ACCOUNT OF PAYMENT OF REGISTR ATION CHARGES OUT OF UNEXPLAINED SOURCES. THE AO OBSERVED THAT AS PER LOOSE PAPER NO. LPS 1/49 PAGE. 1- 32 THE ASSES SEE HAS PURCHASED 2.19 ACRE OF LAND AT VIL1AGE NEORI BUT TH E REGISTRATION EXPENSES WERE NOT FOUND BOOKED. 51. BEFORE THE LD. CIT(A) THE LD. AR OF THE ASSESSEE CONTENDED THAT. THE STAMP DUTY TOWARDS PURCHASE OF PROPERTY WAS RS.88 400/- AND NOT RS. 1 84 375/- AND THE ASSE SSEE HAS SPENT RS. L 19 375/- TOWARDS REGISTRATION AND OTHER EXPENSES AND THE SAME IS DULY RECORDED IN THE BOOKS OF ACCOU NTS. COPY OF LEDGER ACCOUNT WAS ALSO FILED. 52. BY THE IMPUGNED ORDER THE LD. CIT(A) DELETED THE ADDITION AFTER HAVING THE FOLLOWING OBSERVATIONS :- -: 42: - 42 20.3 I HAVE GONE THROUGH OBSERVATIONS OF THE AO AND SUBMISSIONS OF THE ASSESSEE AND COPY OF THE LEDGER ACCOUNT TILED. THE ASSESSEE HAS FAILED TO ESTABLISH THAT THE STAMP DUTY PAID ON THE REGISTRATION WAS RS . 88 400/- AND NOT RS. 1 84 375/-. THEREFORE THE CONTENTION OF THE ASSESSEE IS NOT ACCEPTABLE. HOWEVER SINCE THE ASSESSEE HAS DEBITED RS. 1 19 975/- TOWARDS REGISTRATION EXPENSES AND FAILED TO OFFER ANY EXPLANATION REGARDING BALANCE AMOUNT O F RS. 64 400/- THE ADDITION MADE BY THE A.O. IS RESTRICTED TO RS. 64 400/-. THE ASSESSEE GETS RELIE F OF RS. 1 19 975/-. THE GROUND OF APPEAL IS PARTLY ALLOWED. 53. RIVAL CONTENTIONS HAVE BEEN CONSIDERED AND RECORD PERUSED. AS PER LPS 1/41 AN EXPENDITURE OF RS. 1 8 4 375/- WAS STATED TO BE PAID ON ACCOUNT OF REGISTRATION CH ARGES. THE ASSESSING OFFICER ADDED THE SAME ON THE PLEA THAT R S. 1 84 375/- WAS NOT ACCOUNTED FOR IN THE REGULAR BOO KS OF -: 43: - 43 ACCOUNTS. THE CIT(A) DELETED THE ADDITION OF RS. 1 19 375/- AND SUSTAINED THE ADDITION OF RS. 65 000/- BY OBSER VING THAT THE ASSESSEE HAS ACTUALLY SPENT RS. 1 19 375/- TOWA RDS REGISTRATION AND OTHER EXPENSES WHICH WERE DULY REC ORDED IN THE BOOKS OF ACCOUNTS. THE CONTENTION OF THE ASSES SEE THAT ACTUAL EXPENDITURE ON STAMP DUTY WAS RS. 88 400/- W AS NOT FOUND TO BE SUPPORTED BY ANY DOCUMENTARY EVIDENCE. ACCORDINGLY OUT OF THE TOTAL ADDITION OF RS. 1 84 375/- THE CIT(A) DELETED THE ADDITION OF RS. 1 19 375/- WHICH FINDS PLACE IN THE ASSESSEES BOOKS WHEREAS THE BALANCE ADDITIO N WAS CONFIRMED. IN VIEW OF THE FINDINGS RECORDED AT PARA 20.3 OF THE ORDER OF THE CIT(A) AS REPRODUCED ABOVE WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT(A). 54. IN THE RESULT THE GROUND TAKEN BOTH THE ASSESSEE AND THE REVENUE IS DISMISSED. 55. IN THE ASSESSMENT YEAR 2007-08 AN ADDITION OF RS. 4 58 945/- WAS MADE. AS PER SEIZED PAPER NO. LPS 1/ 36 PAGE 15-43 THE ASSESSEE WAS FOUND TO HAVE PURCHASED 2.5 3 ACRE LAND AT VILLAGE AHMADPUR FOR RS. 18 00 000/- ON WHI CH STAMP DUTY EXPENSES OF RS. 458945/- WERE FOUND TO HAVE BE EN -: 44: - 44 INCURRED. THE ASSESSEE HAS NOT GIVEN ANY EXPLANATIO N REGARDING THE SOURCE OF PAYMENT OF STAMP DUTY AND HENCE AN ADDITION OF RS. 4 58 945 WAS MADE HOLDING THAT STAM P DUTY WAS PAID OUT OF UNEXPLAINED SOURCES. 56. BEFORE THE LD. CIT(A) THE LD. AR HAS SUBMITTED TH AT THE ASSESSEE HAS INCURRED STAMP DUTY AND OTHER EXPE NSES OF RS. 4 59 445/- ON PURCHASE OF THE SAID PROPERTY AND THE SAME IS DULY RECORDED IN HIS BOOKS OF ACCOUNT. IT WAS FU RTHER SUBMITTED THAT THE SAID BOOKS WERE PRODUCED BEFORE THE A.O. DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND A C OPY OF RELEVANT EXTRACT WAS ALSO FILED. A COPY OF THE RELE VANT PAGE OF THE LEDGER PAGE WAS ALSO SUBMITTED. 57. BY THE IMPUGNED ORDER THE LD. CIT(A) DELETED THE ADDITION AFTER HAVING THE FOLLOWING OBSERVATIONS :- 21.3 I HAVE GONE THROUGH THE ASSESSMENT ORDER AND HAVE CONSIDERED THE RELEVANT SEIZED PAPER THE SUBMISSIONS OF THE ASSESSEE AND THE COPY OF LEDGER ACCOUNT FILED. IT IS SEEN THAT THE ASSESSEE HAS INC URRED TOTAL EXPENSES OF RS. 4 59 445/- ON REGISTRATION OF THE SAID PROPERTY AND THE SAME IS RECORDED IN THE REGUL AR BOOKS OF ACCOUNT. AS THESE EXPENSES ARC DULY RECORD ED -: 45: - 45 IN REGULAR BOOKS OF ACCOUNTS AND SUCH BOOKS WERE PRODUCED BEFORE THE AO DURING ASSESSMENT PROCEEDINGS THE AO WAS NOT JUSTIFIED IN TREATING S UCH EXPENSES AS UNEXPLAINED. THIS GROUND OF APPEAL IS ACCORDINGLY ALLOWED. THE ASSESSEE GETS A RELIEF OF RS. 4 58 945/-. 58. RIVAL CONTENTIONS HAVE BEEN CONSIDERED AND RECORD PERUSED. AS PER NOTHING ON LPS 1/36 PAGE 14.53 THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS PURCH ASED LAND AT VILLAGE AHMEDPUR FOR WHICH STAMP DUTY OF RS. 4 5 8 945/- WAS PAID. BY OBSERVING THAT THE ASSESSEE COULD NOT EXPLAIN THE SOURCE OF EXPENDITURE THE ADDITION WAS MADE. T HE CIT(A) DELETED THE SAME BY OBSERVING THAT AS PER COPY OF L EDGER ACCOUNT THE ASSESSEE HAS INCURRED TOTAL EXPENDITUR E OF RS. 4 59 445/- ON REGISTRATION OF THE PROPERTY AND THE SAME WAS FOUND RECORDED IN THE REGULAR BOOKS OF ACCOUNTS. TH E CIT(A) HAS CATEGORICALLY RECORDED A FINDING THAT THESE EXP ENSES ARE DULY RECORDED IN THE REGULAR BOOKS OF ACCOUNTS AND SUCH BOOKS WERE PRODUCED BEFORE THE ASSESSING OFFICER DU RING THE ASSESSMENT PROCEEDINGS. THE FINDINGS RECORDED BY TH E CIT(A) -: 46: - 46 HAVE NOT BEEN CONTROVERTED BY THE DEPARTMENT BY BRI NGING ANY POSITIVE MATERIAL ON RECORD ACCORDINGLY WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) RESULTING INTO DELETION OF ADDITION MADE ON ACCOUNT OF REGISTRATION CHARGES. 59. IN THE ASSESSMENT YEAR 2008-09 AN ADDITION OF RS. 25 LAKHS WAS MADE ON THE BASIS OF LOOSE PAPER NOS. LPS -1/50 PAGE NO. 24-37. THE A.O. OBSERVED THAT THE ASSESSEE HAS PURCHASED 0.77 ACRES OF LAND AT VILLAGE-NEORI FOR R S. 40 00 000/- AND HAS SHOWN PAYMENT OF ONLY RS. 15 00 000/- THEREFORE HE ADDED THE DIFFERENCE. 60. BEFORE THE LD. CIT(A) THE LD. AR OF THE ASSESSEE CONTENDED THAT THE LAND WAS PURCHASED FOR RS. 40 00 000/- AND THE PAYMENTS WERE MADE IN AS UNDER:- 12.07.2007 5 00 000 30.11.2007 5 00 000 11.01.2008 10 00 000 01.02.2008 5 00 000 12.02.2008 6 00 000 13.02.2008 2 00 000 16.02.2008 5 00 000 22.02.2008 2 00 000 TOTAL 40 00 000 -: 47: - 47 61. THE PAYMENTS ARE DULY RECORDED IN THE BOOKS OF ACCOUNTS WHICH WERE PRODUCED BEFORE THE AO. HOWEVE R IN THE WRITTEN SUBMISSION MADE BEFORE THE AO THE PAYMENT WAS WRONGLY MENTIONED RS. 15 00 000/- DUE TO TYPING MIS TAKE. IT IS ALSO CONTENDED THAT PAYMENTS ARE VERIFIABLE FROM BOOKS OF ACCOUNTS. 62. BY THE IMPUGNED ORDER THE LD. CIT(A) DELETED THE ADDITION AFTER HAVING THE FOLLOWING OBSERVATIONS :- 2 2.3 I HAVE CONSIDERED THE ASSESSMENT ORDER AND THE SUBMISSION OF THE LD.AR. AS PER THE COPY OF LED GER ACCOUNT FILED AND BOOKS OF ACCOUNTS PRODUCED THE ASSESSEE HAS MADE A PAYMENT OF RS. 40 00 000/- FOR PURCHASE OF LAND AT NEORI ON VARIOUS DATES AS MENTIONED IN PARA 22.2 ABOVE THE TOTAL VALUE OF LA ND IS TALLYING WITH THE VALUE OF NEORI LAND APPEARING IN THE BALANCE SHEET OF THE ASSESSEE. THEREFORE I AM OF THE CONSIDERED OPINION THAT SINCE THE AMOUNT OF INVESTMENT OF RS. 40 LAKH IS VERIFIABLE FROM THE BO OKS OF ACCOUNT NO ADDITION IS CALLED FOR. ACCORDINGLY THE -: 48: - 48 ADDITION MADE OF RS. 25 00 000/- IS HEREBY DELETED AND THIS GROUND OF APPEAL IS ALLOWED. 63. RIVAL CONTENTIONS HAVE BEEN CONSIDERED AND RECORD PERUSED. AN ADDITION OF RS. 25 LACS WAS MADE ON TH E BASIS OF LOOSE PAPER LPS 1/50 PAGES 24 TO 37. THE ADDITION WAS MADE ON THE PLEA THAT THE ASSESSEE HAS PURCHASED LAND AT VILLAGE NEORI FOR RS. 40 LACS BUT PAYMENT OF RS. 5 LACS WAS SHOWN. ACCORDINGLY DIFFERENCE OF RS. 25 LACS WAS ADDED BY THE ASSESSING OFFICER. THE CIT(A) DELETED THE ADDITION BY OBSERVING THAT THE ASSESSEE HAS MADE THE TOTAL PAYMENT OF RS. 40 LACS AS UNDER :- 12.07.2007 5 00 000 30.11.2007 5 00 000 11.01.2008 10 00 000 01.02.2008 5 00 000 12.02.20 08 6 00 000 13.02.2008 2 00 000 16.02.2008 5 00 000 22.02.2008 2 00 000 TOTAL 40 00 000 THE CIT(A) ALSO RECORDED A FINDING THAT THE TOTAL V ALUE OF LAND WAS TALLYING WITH THE VALUE OF NEORI LAND APPEARING IN THE BALANCE SHEET OF THE ASSESSEE. BY OBSERVING THAT T HE TOTAL INVESTMENT OF RS. 40 LACS WAS VERIFIABLE FROM THE B OOKS OF -: 49: - 49 ACCOUNTS NO ADDITION WAS WARRANTED. THE FINDINGS RECORDED BY THE CIT(A) HAVE NOT BEEN CONTROVERTED BY BRINGIN G ANY MATERIAL ON RECORD. ACCORDINGLY WE DO NOT FIND AN Y REASON TO INTERFERE WITH THE FINDING RECORDED BY THE CIT(A) W HICH RESULT INTO DELETION OF RS. 25 LACS. 64. IN THE ASSESSMENT YEAR 2008-09 AN ADDITION OF RS. 2 55 000/- WAS MADE ON THE BASIS OF SEIZED LOOSE PA PER NO. LPS 1/52 PAGE 1-17 RELATING TO PURCHASE OF 1.2 ACRE OF LAND AT NEORI. IT IS THE REGISTRATION DOCUMENT IN WHICH TH E PURCHASE CONSIDERATION IS MENTIONED AS RS. 14 55 000/-. AGAI NST THIS THE ASSESSEE HAS RECORDED THE PURCHASE AT RS. 12 00 000/- IN HIS BOOKS THUS DIFFERENCE OF RS. 2 55 000/- WAS A DDED AS UNEXPLAINED INVESTMENT. 65. BEFORE THE LD. CIT(A) THE LD. AR HAS STATED THAT THE SALE VALUE MENTIONED IN THE AGREEMENT IS RS. 13 50 000/- ONLY AND THE VALUE OF RS. 14 55 000/- WAS FOR STAMP DUTY VALUATION PURPOSE AND NO SUCH ADDITIONAL INVESTMENT WAS MADE BY THE ASSESSEE. COPY OF THE SAID LOOSE PAPER WAS ALSO FUR NISHED. 66. BY THE IMPUGNED ORDER THE LD. CIT(A) DELETED THE ADDITION AFTER HAVING THE FOLLOWING OBSERVATIONS :- -: 50: - 50 I HAVE GONE THROUGH THE ASSESSMENT ORDER THE COPY OF SEIZED LOOSE PAPER AND THE SUBMISSIONS OF THE ASSESSEE. IT IS OBSERVED THAT THOUGH THE SALE CONSIDERATION IN THE SAID SEIZED PAPER IS MENTIONED AS RS. 13 50 000/- IN THE DETAILS OF AMOUNT PAID THE TOTAL SUM PAID IS REFLECTED AT RS. 14 55 000/-. THE CONTENTION OF THE ASSESSEE IS NOT CORRECT. THE ASSE SSEE HAD IN FACT PURCHASED THE SAID PROPERTY FOR RS. 14 55 000/- AND PAID THE REMAINING AMOUNT OF RS. 2 55 000/- OUT OF HIS UNDISCLOSED SOURCES. THE ACTI ON OF THE A.O. IS THEREFORE CONFIRMED. THIS GROUND O F APPEAL IS ACCORDINGLY DISMISSED. 67. RIVAL CONTENTIONS HAVE BEEN CONSIDERED AND RECORD PERUSED. AN ADDITION OF RS. 2 55 000/- WAS MADE IN THE A.Y. 2008-09 ON THE BASIS OF SEIZED LOOSE PAPER NO. LPS 1/52 PAGES 1 TO 17 WHICH PERTAINED TO PURCHASE OF 1.2 ACRES OF LAND AT NEORI. THE ASSESSING OFFICER STATED THAT PURCHASE CONSIDERATION WAS MENTIONED AT RS. 14 55 000/- AGAI NST WHICH THE ASSESSEE HAS RECORDED PURCHASES OF RS.12 LACS IN HIS BOOKS ACCORDINGLY DIFFERENCE OF RS. 2 55 000/ - WAS ADDED -: 51: - 51 AS UNEXPLAINED INVESTMENT. BY THE IMPUGNED ORDER THE CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. NOT HING WAS PRODUCED BEFORE US TO EXPLAIN THE DIFFERENCE IN PUR CHASE CONSIDERATION OF RS. 2 55 000/- WHICH WAS NOT SHOWN IN THE BOOKS OF ACCOUNTS. ACCORDINGLY WE CONFIRM THE ACT ION OF THE CIT(A) IN UPHOLDING THE ADDITION OF RS. 2 55 000/- MADE IN RESPECT OF LAND PURCHASE AT NEORI. 68. AN ADDITION OF RS. 20 LAKHS WAS MADE IN THE ASSESSMENT YEAR 2008-09 ON THE BASIS OF LOOSE PAPER NOS. LPS- 1/5 PAGE NO. 1-10. THE AO OBSERVED THAT THE AS SESSEE HAS PURCHASED LAND FOR RS. 40 00 000/- AT VILLAGE-B ISHAN KHEDI. HOWEVER IN ORDER TO SHOW AVAILABILITY OF CA SH HE HAD SHOWN RECEIPT OF GIFT TO THE TUNE OF RS. 20 00 000/ -. IT WAS HELD THAT THE ASSESSEE FAILED TO ESTABLISH THE IDEN TITY CREDITWORTHINESS OF THE LENDER AND GENUINENESS OF T HE GIFT; THEREFORE HE ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. 69. BEFORE THE LD. CIT(A) THE LD. AR OF THE ASSESSEE CONTENDED THAT DURING THE RELEVANT PERIOD THE ASSE SSEE RECEIVED A GIFT OF RS.20 00 000/- FROM HIS WIFE SMT . OMWATI -: 52: - 52 GOYAL. IT HAS NO RELATION WITH THE PURCHASE OF LAND AT VILLAGE BISHAN KHEDI. SMT. GOYAL IS AN INCOME TAX ASSESSEE AND HER ASSESSMENTS WERE ALSO COMPLETED U/S.153A SIMULTANEO USLY WITH THAT OF THE ASSESSEE. THE GIFTS GIVEN ARE RECO RDED IN HER BOOKS OF ACCOUNTS AND THE AO DID NOT DISPUTE THIS F ACT IN HER CASE. COPY OF RELEVANT EXTRACT OF LEDGER WAS ALSO F ILED DURING THE ASSESSMENT PROCEEDINGS AND THIS ESTABLISHES THE IDENTITY CREDITWORTHINESS OF THE LENDER AND GENUINENESS OF T HE TRANSACTION. IT WAS CONTENDED THAT THE OTHER OBSERV ATIONS REGARDING AUDIT REPORT ETC. CARRY NO SIGNIFICANCE. 70. BY THE IMPUGNED ORDER THE LD. CIT(A) DELETED THE ADDITION AFTER HAVING THE FOLLOWING OBSERVATIONS :- 24.3 I HAVE GONE THROUGH THE OBSERVATIONS OF THE AO AND SUBMISSIONS OF THE ASSESSEE. ADMITTEDLY THE GIFT WAS RECEIVED FROM SMT. OMWATI GOYAL WIFE OF THE ASSESSEE. THE AO HAS COMPLETED ASSESSMENT U/S.153A SIMULTANEOUSLY IN HER CASE AND THERE IS NO DISPUTE REGARDING MAKING OF GIFT. T HE OTHER OBSERVATIONS IN THE ASSESSMENT ORDER ARE OF LITTLE RELEVANCE. UNDER SUCH CIRCUMSTANCES SINCE THE -: 53: - 53 IDENTITY CREDITWORTHINESS OF THE DONOR AND GENUINENESS OF THE TRANSACTION ARE PROVED THE ADDITION MADE BY THE A.O. ON IRRELEVANT CONSIDERATIONS IS NOT PROPER. THE ADDITION IS DELET ED. THE APPEAL IS ALLOWED ON THIS GROUND. 71. RIVAL CONTENTIONS HAVE BEEN CONSIDERED AND RECORD PERUSED. IN THE A.Y. 2008-09 AN ADDITION OF RS.20 LACS WAS MADE BY REJECTING THE ASSESSEES CLAIM OF GIFT HAVI NG BEEN RECEIVED FROM HIS WIFE SMT. OMVATI GOEL. IT WAS C ONTENDED BEFORE THE LOWER AUTHORITIES THAT SMT.OMVATI GOEL I S ASSESSED TO TAX AND HER ASSESSMENTS WERE ALSO COMPLETED U/S 153A OF THE ACT BY THE SAME ASSESSING OFFICER SIMULTANEOUS LY WITH THE ASSESSEE. THE AMOUNT OF GIFT WAS ALSO RECORDED IN H ER BOOKS OF ACCOUNTS AND THE ASSESSING OFFICER DID NOT DISPUTE THE FACT IN HER CASE. BY THE IMPUGNED ORDER THE CIT(A) DELETE D THE ADDITION BY OBSERVING THAT THE GIFT WAS RECEIVED FR OM SMT. OMVATI GOEL WIFE OF THE ASSESSEE WHOSE ASSESSMENT WAS COMPLETED BY THE SAME ASSESSING OFFICER U/S 153A SIMULTANEOUSLY WITH THE CASE OF THE ASSESSEE. SINCE THE IDENTITY CREDIT WORTHINESS OF THE DONOR AND THE GE NUINENESS OF -: 54: - 54 THE TRANSACTION WAS FOUND TO BE PROVED THE CIT(A) DELETED THE ADDITION. WE DO NOT FIND ANY INFIRMITY IN THE ORDE R OF THE CIT(A). 72. IN THE ASSESSMENT YEAR 2009-10 AN ADDITION OF RS. 11 LAKHS WAS MADE AS PER LOOSE PAPER NO. LPS-11/50 PAGE 24-37. THIS PAPER RELATES TO PURCHASE OF 0.77 ACRES OF LAN D AT VILLAGE- NEORI. AS PER THIS PAPER THE ASSESSEE HAD AGREED T O PAY RS. 51 00 000/- OUT OF WHICH RS. 40 00 000/- WAS PAID T ILL 31.03.2008 AND ACCORDING TO THE A.O. THE BALANCE PA YMENT WAS MADE IN SUBSEQUENT YEAR BUT THE SAME IS NOT APP EARING IN THE BOOKS OF ACCOUNTS. 73. BEFORE THE LD. CIT(A) THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THE ASSESSEE WAS TO PURCHASE LAND FOR RS.51 00 000/- OUT OF WHICH RS.40 00 000/- WAS PAID AND THE BALANCE AMOUNT IS STILL PAYABLE. IT WAS FURTHER CONTENDED THAT SINCE THE ENTIRE PAYMENT WAS NOT MADE OWNERSH IP OF THE SAID LAND WAS ALSO NOT TRANSFERRED IN THE ASSESSEE' S FAVOUR. IT WAS STATED THAT THE SEIZED PAPER NOWHERE STATES THA T THE BALANCE PAYMENT OF RS. 11 00 000/- WAS MADE. IT WAS ALSO CONTENDED THAT THE AO HAS FAILED TO BRING ANY MATER IAL ON -: 55: - 55 RECORD TO SUBSTANTIATE THAT THE ASSESSEE HAS MADE T HE BALANCE PAYMENT OR THAT THE PAYMENT WAS MADE IN THE RELEVAN T YEAR. 74. BY THE IMPUGNED ORDER THE LD. CIT(A) DELETED THE ADDITION AFTER HAVING THE FOLLOWING OBSERVATIONS :- I HAVE GONE THROUGH THE OBSERVATIONS OF THE A.O. AND SUBMISSIONS OF THE ASSESSEE. COPIES OF RELEVANT SEIZED PAPERS WERE ALSO PERUSED. THE ASSESSEE HAS PURCHASED THE REFERRED AND FOR RS.51 00 000/ OUT OF WHICH RS.40 00 000/- WAS PAID AND BALANCE AMOUNT OF RS.11 00 000/- WAS PENDING. IT IS FOUND FROM PAGE 26 OF THE ASSESSMENT ORDER IN THE CASE OF SHRI ASHOK GOYAL THAT OUT OF DUE AMOUNT OF RS.51 00 000/- THE ASSESSEE HAS NOT PAID RS.11 00 000/-. THE SAME FACT IS CONFIRMED FROM PAGE 29 OF THE ASSESSMENT ORDER. ON PAGE NO.1 OF THE SEIZED PAPERS AN AMOUNT OF RS. 11 00 000/- IS MENTIONED AGAINST DESCRIPTION OF 0.77 ACRES NEORI LAND AND THE FIGURES HAVE BEEN CANCELLED BY DRAWING A LINE ACROSS IT AND IT APPEARS THAT ON THI S -: 56: - 56 BASIS THE AO HAS PRESUMED THAT THE SAID AMOUNT WAS PAID. NO CORROBORATIVE EVIDENCE WAS BROUGHT ON RECORD TO ESTABLISH SUCH PAYMENT. UNDER THESE CIRCUMSTANCES THE ADDITION IS NOT SUSTAINABLE HENCE DELETED. THIS GROUND OF APPEAL IS ACCORDINGLY ALLOWED. 75. RIVAL CONTENTIONS HAVE BEEN CONSIDERED AND RECORD PERUSED. AN ADDITION OF RS.11 LACS WAS MADE IN THE A.Y. 2009-10 ON THE PLEAT THAT THE ASSESSEE HAS PURCHASE D 0.77 ACRES OF LAND AT NEORI. AS PER LOOSE PAPER LPS 11/5 0 PAGES 24 TO 37 THE ASSESSEE HAD AGREED TO PAY RS. 51 LACS O UT OF WHICH RS. 40 LACS WERE PAID TILL 31.3.2008 AND THE BALANC E PAYMENT WAS TO BE MADE IN THE SUBSEQUENT YEAR BUT THE SAME WAS NOT APPEARING IN THE BOOKS OF ACCOUNTS OF SUBSEQUENT YE AR. IT WAS STATED BEFORE THE LOWER AUTHORITIES THAT THE LAND W AS PURCHASED FOR RS. 51 LACS BUT THE ACTUAL PAYMENT DU RING THE YEAR WAS RS. 40 LACS AND THE BALANCE AMOUNT OF RS. 11 LACS WAS DUE AND NOT ACTUALLY PAID. THE CIT(A) DELETED THE ADDITION BY OBSERVING THAT THE ASSESSEE HAS ACTUALLY PAID RS . 40 LACS AND BALANCE AMOUNT OF RS. 11 LACS WAS PENDING. BY R EFERRING -: 57: - 57 TO THE ASSESSMENT ORDER IN THE CASE OF SHRI ASHOK G OYAL PAGE 26 WHEREIN IT WAS STATED THAT THE ASSESSEE HAS NOT PAID RS. 11 LACS THE CIT(A) OBSERVED THAT THE FACT OF NOT M AKING THE PAYMENT HAS BEEN CONFIRMED ON PAGE 29 OF THE ASSESS MENT ORDER OF ASHOK GOYAL BY OBSERVING THAT NOTHING WAS FOUND TO STATE THAT THE ASSESSEE HAS PAID MORE THAN RS. 40 L ACS DURING THE YEAR. WE FIND THAT SINCE THE ASSESSEE HAS PAID ONLY RS. 40 LACS AND NOTHING WAS FOUND TO SUGGEST THAT THE ACTU AL PAYMENT WAS MORE THAN IT AND THIS FACT WAS ALSO COR ROBORATED WITH THE FINDING RECORDED BY THE ASSESSING OFFICER HIMSELF AT PAGES 26 AND 29 OF THE ASSESSMENT ORDER OF ASHOK GO YAL. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A ) FOR DELETING ADDITION OF RS. 11 LACS WHICH WAS NOT ACTUALLY PAID BY HIM AND CONFIRM THE SAME. 76. IN THE ASSESSMENT YEAR 2009-10 AN ADDITION OF RS. 90 LAKHS WAS MADE ON THE BASIS OF LOOSE PAPER NO.LPS/3 0 PAGE 2 WHICH STATES THAT THE RATE OF THE LAND IS RS. 30 00 000/- PER ACRE AND IT WAS FURTHER MENTIONED RS. 10 00 000/- BAYANA DENA HAI 9 MAHA KA SAMY RS.50 000/- NAGAD DIYE'. THE A.O. -: 58: - 58 HELD THAT ON VERIFICATION FROM THE WEB SITE OF MP G OVERNMENT IT WAS FOUND THAT THE LAND WAS SUBSEQUENTLY PURCHAS ED BY THE ASSESSEE SHRI P.D. GOYAL. THEREFORE THE A.O. HAS MADE THIS ADDITION. 77. BEFORE THE LD. CIT(A) LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE CONTENDED THAT THE PAPER DOES NOT RELA TE TO THE ASSESSEE. IT DOES NOT CONTAIN ANY DATE OR REFERENCE OF ANY LAND HENCE NO MEANINGFUL INFERENCE COULD BE DRAWN. THE ASSESSEE ALSO CONTENDED THAT THE ASSESSING OFFICER NEVER BRO UGHT ANY SUCH REPORT FROM THE GOVERNMENT SITE TO THE KNOWLED GE OF THE ASSESSEE AND HAS NEVER SOUGHT ANY EXPLANATION FROM THE ASSESSEE AND HAS NEVER SOUGHT ANY EXPLANATION FROM THE ASSESSEE. THEREFORE THE ACTION OF THE ASSESSING OF FICER IS NOT CORRECT. 78. BY THE IMPUGNED ORDER THE LD. CIT(A) DELETED THE ADDITION AFTER HAVING THE FOLLOWING OBSERVATIONS :- 28.3 I HAVE GONE THROUGH THE ASSESSMENT ORDER THE COPY OF THE RELEVANT SEIZED PAPER AND THE SUBMISSIO N OF THE ASSESSEE. IT IS FOUND THAT DURING THE ASSESSMENT PROCEEDINGS A QUERY REGARDING THE SAID -: 59: - 59 PAPER WAS MADE FROM SHRI ASHOK GOYAL. THE QUERY RAISED IN THIS REGARD AND REPRODUCED ON PAGE 128 OF THE ASSESSMENT ORDER AND IT READS THAT 'PAGE 2 OF LPS 30 ..HAS BEEN PURCHASED BY SHRI ASHOK GOYAL .. AS MENTIONED IN THE ASSESSMENT ORDER REPLY IN THIS REGARD WAS ALSO GIVEN BY SHRI ASHOK GOYAL. IT IS FURTHER MENTIONED THAT 50 000/- CASH WAS GIVEN AS ADVANCE BY SHRI ASHOK GOYAL. THUS AT NO PLACE ANY QUERY WAS MADE FROM THE ASSESSEE AND THE ASSESSEE HAS NEVER GIVEN ANY REPLY ON THIS ISSUE. THE AO HAS STATED THAT FROM THE SITE OF M.P.GOVT THIS LAND WAS FOUND TO HAVE BEEN PURCHASED BY THE ASSESSEE SHRI P.D.GOYAL. THE ASSESSEE HAS DENIED OF HAVING MADE ANY SUCH PURCHASE. THE AO HAS NOT BROUGHT SUCH REPORT OBTAINED FROM THE SITE OF M.P. GOVT TO THE NOTICE O F THE ASSESSEE AND HAD NOT RAISED ANY QUERY IN THIS REGAR D AND AS SUCH IT COULD NOT HAVE BEEN USED AGAINST TH E ASSESSEE WITHOUT FIRST CONFRONTING SUCH REPORT WITH THE ASSESSEE. IN THE CASE OF GARGI DIN LWALA PRASAD VS. CIT (1974) 96 ITR 97 (ALL) IT WAS HELD BY THE HAN 'BLE ALLAHABAD HIGH COURT THAT THE PRINCIPLES OF -: 60: - 60 NATURAL JUSTICE ARE APPLICABLE TO ASSESSMENT PROCEEDINGS. THE ELEMENTARY PRINCIPLE OF NATURAL JUSTICE IS THAT THE ASSESSEE SHOULD HAVE KNOWLEDGE OF THE MATERIAL WHICH IS GOING TO BE USED AGAINST HIM SO THAT HE MAY BE ABLE TO MEET IT. FURTHER THE AO HAS NOT MADE ANY FURTHER ENQUIRY FROM THE SELLERS OF TH E SAID LAND TO ESTABLISH THAT THE LAND WAS SOLD TO TH E ASSESSEE. NO CORROBORATIVE MATERIAL WAS BROUGHT ON RECORD TO SUBSTANTIATE THE AVERMENT THAT THE ASSESS EE HAD PURCHASED THE LAND. THE SEIZED PAPER SPECIFICALLY STATES THAT RS.L0 00 000/- BAYANA DENA HAI WHICH MEANS THAT RS.10 00 000/- WAS TO BE PAID AS ADVANCE. THUS THIS SLIP ONLY MENTIONS THE TERMS ON WHICH SUCH TRANSACTION WAS TO BE MADE. UNDER THESE CIRCUMSTANCES: THE ACTION OF THE AO IN MAKING ADDITION IS NOT CORRECT. IN VIEW OF THESE FINDINGS THIS GROUND OF APPEAL IS ALLOWED AND THE ADDITION MADE OF RS. 90 00 000/- IS HEREBY DELETED. 79. RIVAL CONTENTIONS HAVE BEEN CONSIDERED AND RECORD PERUSED. THE ADDITION WAS MADE BY THE ASSESSING OF FICER ON THE PLEA THAT AS PER WEBSITE OF MP GOVT. THE ASSES SEE HAS -: 61: - 61 PURCHASED SOME PROPERTY MARKED ON LPS 3- PAGE 2 WHI CH STATES THAT RS. 10 LACS BAYANA DENA HAI 9 MAAH KA SAMAY RS. 50 000/- NAKAD DIYE. THE CIT(A) DELETED THE A DDITION BY OBSERVING THAT THE ASSESSING OFFICER HAS NOT BROUGH T SUCH REPORT OBTAINED FROM THE SITE OF MP GOVERNMENT TO T HE NOTICE OF THE ASSESSEE AND HAD NOT RAISED ANY QUERY IN THI S REGARD AND AS SUCH IT COULD NOT HAVE BEEN USED AGAINST THE ASSESSEE WITHOUT FIRST CONFRONTING SUCH REPORT TO THE ASSESS EE. RELIANCE WAS PLACED ON THE DECISION REPORTED AT 96 ITR 97 WH EREIN ALLAHABAD HIGH COURT OBSERVED THAT PRINCIPLES OF NA TURAL JUSTICE ARE APPLICABLE TO THE ASSESSMENT PROCEEDING S. THE ELEMENTARY PRINCIPLE OF NATURAL JUSTICE IS THAT THE ASSESSEE SHOULD HAVE KNOWLEDGE OF THE MATERIAL WHICH IS GOIN G TO BE USED AGAINST HIM SO THAT HE MAY BE ABLE TO MEET IT. WE ALSO FIND THAT NEITHER ANY PURCHASE DEED WAS FOUND DURIN G THE COURSE OF SEARCH NOR DURING SUBSEQUENT INQUIRY IT W AS BROUGHT ON RECORD THAT THE ASSESSEE HAS EITHER PURCHASED TH E PROPERTY OR PAID SOMETHING ON ACCOUNT OF SUCH PROPERTY. HOW EVER TO THE EXTENT OF ACTUAL PAYMENT OF RS. 50 000/- MADE B Y THE ASSESSEE AS PER NOTINGS ON LPS-3 PAGE WE CONFIRM T HE -: 62: - 62 ADDITION. ACCORDINGLY ORDERS OF BOTH THE LOWER AUT HORITIES ARE MODIFIED AND ADDITION IS RESTRICTED TO RS. 50 000/- . WE DIRECT ACCORDINGLY. 80. IN THE RESULT APPEALS OF THE REVENUE ARE ALLOWED I N PART WHEREAS CROSS OBJECTIONS OF THE ASSESSEE ARE D ISMISSED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 26 TH JULY 2013. SD/- SD/- (JOGINDER SINGH) (R. C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 26 TH JULY 2013. CPU* 1015267