ACIT, CC-11, E-2, ARA Centre,, v. Tilak Raj Anand,,

ITSSA 85/DEL/2006 | misc
Pronouncement Date: 03-12-2010 | Result: Dismissed

Appeal Details

RSA Number 8520116 RSA 2006
Assessee PAN ADRPA4243P
Bench Delhi
Appeal Number ITSSA 85/DEL/2006
Duration Of Justice 4 year(s) 8 month(s) 12 day(s)
Appellant ACIT, CC-11, E-2, ARA Centre,,
Respondent Tilak Raj Anand,,
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 03-12-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted H
Tribunal Order Date 03-12-2010
Date Of Final Hearing 08-11-2010
Next Hearing Date 08-11-2010
Assessment Year misc
Appeal Filed On 22-03-2006
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H : NEW DELHI BEFORE SHRI RAJPAL YADAV JM AND SHRI A.K.GARODIA AM IT(SS) A.NO.48/DEL/2006 BLOCK PERIOD : 1.4.1997 TO 13.5.2003 SHRI TILAK RAJ ANAND C-97 ANAND NIKETAN NEW DELHI. PAN NO.ADRPA4243P. VS. DY.COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-12 NEW DELHI. (APPELLANT) (RESPONDENT) IT(SS) A.NO.85/DEL/2006 BLOCK PERIOD : 1.4.1997 TO 13.5.2003 ASSTT. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-12 NEW DELHI. VS. SHRI TILAK RAJ ANAND C-97 ANAND NIKETAN NEW DELHI. PAN NO.ADRPA4243P. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SALIL AGGRAWAL ADVOCATE AND SHRI SANJEEV JAIN CA. REVENUE BY : SHRI R.K.GUPTA CIT-DR. ORDER PER A.K.GARODIA AM : THESE ARE CROSS APPEALS FILED BY THE ASSESSEE AND THE REVENUE AND THESE APPEALS ARE DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)-I NEW DELHI DATED 29.12.2005 FOR THE BLOCK PERIOD FROM 1.4.1997 TO 13.5.2003. SINCE THE GROUNDS RAIS ED BY THE ASSESSEE EXCEPT ONE ARE INTER-CONNECTED WITH THE GR OUNDS RAISED BY THE REVENUE BOTH THESE APPEALS WERE HEARD TOGET HER AND ARE IT(SS)-48 & 85/DEL/2006 2 BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. GROUND NOS.1 & 2 OF THE APPEAL FILED BY THE REVE NUE READ AS UNDER:- 1. DELETING THE ADDITION OF RS.1.07 CRORES MADE ON ACCOUNT OF UNEXPLAINED EXPENDITURE U/S 69C OF THE I T ACT 1961 FOR THE PURCHASE OF PROPERTY NO.D-123 ANAND NIKETAN NEW DELHI. 2. DELETING THE ADDITION OF RS.16 14 650/- MADE ON ACCOUNT OF UNEXPLAINED CASH FOUND. 3. BRIEF FACTS REGARDING GROUND NO.1 ARE THAT IT IS NOTED BY THE AO IN PARA 2 OF THE ASSESSMENT ORDER THAT ANNEXURE A-1 HAVING PAGE 1 TO 27 WAS SEIZED FROM THE RESIDENTIAL PREMIS ES OF THE ASSESSEE. IT IS ALSO STATED BY THE AO THAT THIS IS AN AGREEMENT TO SELL DATED 12.5.2003 BETWEEN THE CO-OWNERS OF THE PR OPERTY D-1 ANAND NIKETAN NEW DELHI AND THE ASSESSEE. THE SAI D AGREEMENT SHOWS THAT THE ASSESSEE HAS PURCHASED THIS PROPERTY FROM THE CO- OWNERS SHRI PROMOD SOOD SHRI V.K.SOOD SMT. MANGLA SOOD AND SMT. SUNANDA BANTA AND LATE SMT.SARLA DEVI SOOD. IT IS NOTED BY THE AO THAT THE TOTAL SALE CONSIDERATION HAS BEEN M ENTIONED IN THIS SALE AGREEMENT AS ` 80 LAKHS. IT IS FURTHER N OTICED BY THE AO THAT DURING THE SEARCH AND SEIZURE OPERATION CONDUC TED ON 13.5.2003 AT RESIDENTIAL AND BUSINESS PREMISES OF T HE ASSESSEE AND THE CO-OWNERS OF THIS PROPERTY IT WAS FOUND THA T BESIDES THE ABOVE MENTIONED AMOUNT THE ASSESSEE HAD PAID ` 107 LAKHS IN CASH. IT IS ALSO NOTICED BY THE AO THAT THE FACT T HAT TOTAL SALE CONSIDERATION WAS ` 187 LAKHS WAS ACCEPTED BY THE A SSESSEE HIMSELF DURING HIS STATEMENT RECORDED DURING THE SE ARCH IT(SS)-48 & 85/DEL/2006 3 OPERATION CONDUCTED ON 13.5.2003. IT IS FURTHER NO TICED BY THE AO THAT OUT OF THIS AMOUNT OF ` 187 LAKHS AN AMOUNT O F ` 9 LAKHS IN THE FORM BAYANA WAS PAID EARLIER BY THE ASSESSEE TO THE CO- OWNERS AS PER THE ADVANCE RECEIPT DATED 5.5.2003. THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF TOTAL AMOUNT OF ` 107 LAKHS PAID IN CASH BY THE ASSESSEE ALONGWITH NECESSARY DO CUMENTARY EVIDENCE. IN COURSE OF BLOCK ASSESSMENT PROCEEDING S IT WAS SUBMITTED BY THE LEARNED AR OF THE ASSESSEE BEFORE THE AO IN HIS REPLY VIDE LETTER DATED 6.5.2005 THAT HE HAS RECEIV ED ` 100 LAKHS IN CASH APART FROM ` 155 LAKHS IN CHEQUE FROM SHRI ARJUN KHOSLA WHO HAS PURCHASED PROPERTY AT 167 GOLF LINKS NEW DELHI FROM ASSESSEES COMPANY M/S REGAL FLATS PVT.LTD. IN FEBR UARY-MARCH 2003. THE AR OF THE ASSESSEE ALSO FILED COPY OF TH E SALE DEED WITH THIS LETTER. ON EXAMINATION OF THE SAID SALE DEED IT WAS FOUND THAT THE TOTAL SALE CONSIDERATION MENTIONED I S ONLY ` 155 LAKHS AND THERE IS NO MENTION OF ` 100 LAKHS WHICH ALLEGEDLY WAS RECEIVED BY THE ASSESSEE IN CASH. IT IS FURTHER NO TED BY THE AO THAT THE AMOUNTS MENTIONED IN THE SALE DEED THE MO DE OF PAYMENT ETC. WERE VERIFIED WITH GENERAL LEDGER OF M /S REGAL FLATS PVT.LTD. FOR FY 2002-03 WHICH WAS IMPOUNDED DURING T HE SURVEY OPERATION AT THE PREMISES OF M/S SHIKHA PROPERTIES PVT.LTD. ON 13.5.2003 AS ANNEXURE A-11. IT IS OBSERVED BY THE A O THAT IN THE LEDGER ACCOUNT OF SHRI ARJUN KHOSLA AND LEDGER ACCO UNT OF SALE OF PROPERTY IT WAS FOUND THAT CASH AMOUNT OF ` 100 LA KHS IS NOT MENTIONED THEREIN. IT IS FURTHER NOTED BY THE AO T HAT THIS REPLY OF AR IS CONTRADICTORY TO THE STATEMENT GIVEN BY THE A SSESSEE ON OATH IN THE COURSE OF SEARCH OPERATION. THE AO HAS REPRODUCED THE RELEVANT PORTION OF STATEMENT IN THE ASSESSMENT ORDER IN WHICH IT WAS STATED BY THE ASSESSEE THAT THE SOURCE OF THIS IT(SS)-48 & 85/DEL/2006 4 PAYMENT OF ` 107 LAKHS MAY BE PARTLY OUT OF HIS OWN UNDISCLOSED INCOME AND PARTLY ADVANCE FROM FUTURE PURCHASERS OF FLATS IN REGAL BUILDING. HE HAS STATED IN THE STATEMENT THA T HE DOES NOT KNOW THE AMOUNT RECEIVED FROM FUTURE BUYERS AND THE IR NAMES AND ADDRESSES. THEREAFTER THE AO HAS STATED IN TH E ASSESSMENT ORDER THAT THE ASSESSEE DID NOT MENTION IN THE STAT EMENT THAT ` 100 LAKHS WAS RECEIVED FROM SHRI ARJUN KHOSLA. THE AO ISSUED SUMMONS U/S 131 OF THE ACT TO SHRI ARJUN KHOSLA. HE APPEARED BEFORE THE AO AND DENIED ABOUT ANY CASH PAYMENT TO THE ASSESSEE IN ADDITION TO THE AMOUNT OF ` 155 LAKHS P AID BY HIM AS MENTIONED IN THE SALE DEED. REGARDING THE PAYMENT OF ` 9 LAKHS TO THE CO-OWNERS OF THE PROPERTY AS BAYANA IT WAS S UBMITTED BY THE LEARNED AR AS PER HIS LETTER DATED 25.5.2005 TH AT THE ASSESSEE HAS RECEIVED ` 25 LAKHS WITH RESPECT TO TW O COTTAGES CONSTRUCTED BY HIM ON GADAI PUR FARM LAND FROM ONE SHRI R.K.GUPTA AND SHRI BABA NAG DEV. THE AO HAS STATED ON PAGE 4 OF THE ASSESSMENT ORDER THAT NO PROOF OF IDENTITY O R CREDITWORTHINESS OF THESE PERSONS HAS BEEN FILED. IT IS ALSO NOTED BY THE AO THAT THE COPY OF LETTER IS DATED 11.4.200 3 AND NO NAME OF THE PERSON WHO HAS WRITTEN THIS LETTER IS MENTIO NED. ON THIS BASIS THE AO HELD THAT THIS ARGUMENT THAT ` 25 LAK HS WAS RECEIVED FROM THESE TWO PERSONS IS MERELY AN AFTER THOUGHT AND THEREFORE IS REJECTED. THE AO MADE ADDITION OF ` 1 07 LAKHS AFTER MAKING THESE OBSERVATIONS U/S 69C OF THE ACT. BEIN G AGGRIEVED THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE LE ARNED CIT(A) WHO HAS DELETED THIS ADDITION AND NOW THE REVENUE IS IN APPEAL BEFORE US ON THIS ISSUE. IT(SS)-48 & 85/DEL/2006 5 4. IT IS SUBMITTED BY THE LEARNED DR OF THE REVENUE THAT AS PER THE LETTER AND AFFIDAVIT OF SHRI ARJUN KHOSLA AS AP PEARING ON PAGES 61 AND 62 OF THE PAPER BOOK HE HAS DENIED REGARDIN G ANY PAYMENT BY HIM IN CASH TO THE ASSESSEE OR HIS FAMIL Y MEMBERS OR TO THE FIRM OR THE COMPANY OTHER THAN CHEQUE PAYMEN T FOR BUYING THE PROPERTY AT 167 GOLF LINKS NEW DELHI F OR ` 155 LAKHS FOR WHICH THE PAYMENT WAS MADE THROUGH CHEQUES ONLY AND NO CASH WAS PAID BY HIM. IT IS ALSO SUBMITTED BY HIM THAT IN THE COURSE OF STATEMENT OF THE ASSESSEE IN THE COURSE O F SEARCH THERE IS NO MENTION THAT THE ASSESSEE HAS RECEIVED ANY CASH ON ACCOUNT OF SALE OF PROPERTY BY THE COMPANY M/S REGA L FLATS PVT.LTD. IT IS ALSO SUBMITTED THAT ALTHOUGH THERE IS ENTRY OF CASH RECEIVED IN THE CASH BOOK OF M/S REGAL FLATS PVT.LT D. FOUND IN COURSE OF SEARCH BUT IN THE LEDGER OF THE SAME COMP ANY THIS ENTRY OF CASH RECEIVED IS NOT APPEARING. HE SUBMIT TED A COPY OF LEDGER IN THE BOOKS OF M/S REGAL FLATS PVT.LTD. FOR THE FY 2002-03 AND POINTED OUT THAT IN THE ACCOUNT OF SHRI T.R.ANA ND THERE ARE ENTRIES POSTED UPTO 26.3.2003 BUT THERE IS NO ENTRY REGARDING ANY CASH TRANSFERRED BY THAT COMPANY TO THE ACCOUNT OF SHRI T.R.ANAND. REGARDING THE NOTINGS IN THE SEIZED DIA RY ON PAGE 176 OF PAPER BOOK IT WAS SUBMITTED THAT SINCE THE AMOUNT IS NOT POSTED IN LEDGER ACCOUNT THIS IS AN AFTER-THOUGHT AND CANNOT BE ACCEPTED. 5. AS AGAINST THIS LEARNED AR OF THE ASSESSEE SUPP ORTED THE ORDER OF CIT(A). IT WAS SUBMITTED THAT THE AVAILAB ILITY OF CASH OF ` 100 LAKHS OUT OF ` 107 LAKHS WHICH WAS PAID FOR THE PROPERTY IN CASH IS EVIDENT FROM THE SEIZED DOCUMENTS AND IMPOU NDED CASH BOOK. IT IS ALSO SUBMITTED THAT THIS AMOUNT OF ` 1 CRORE HAS IT(SS)-48 & 85/DEL/2006 6 ALREADY BEEN SHOWN AS INCOME OF M/S REGAL FLATS PVT .LTD. AND WAS ASSESSED IN ITS HANDS. HE SUBMITTED THAT THE C OPY OF RELEVANT ASSESSMENT ORDER IS AVAILABLE ON PAGES 180 AND 181 OF THE PAPER BOOK. IT IS ALSO SUBMITTED THAT RECEIPT OF ` 1 CRORE IN CASH WAS DISCLOSED IN THE REGULAR CASH BOOK OF M/S REGAL FLATS PVT.LTD. IMPOUNDED IN COURSE OF SURVEY FROM ITS PRE MISES ON THE DATE OF SEARCH IN THE CASE OF THE ASSESSEE AND THER EFORE CANNOT BE ASSESSED AS UNDISCLOSED INCOME IN THE BLOCK ASSE SSMENT. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THIS ISSUE HAS BEE N DECIDED BY THE CIT(A) AS PER PARA 7.8 OF HIS ORDER WHICH IS RE PRODUCED BELOW:- 7.8 ANY SURVEY OR OTHER ACTION ON OR NEAR THE DATE OF SEARCH ON 13/05/2003 ON MR.ARJUN KHOSLA COULD HAVE HELPED THE DEPARTMENT IN ASCERTAINING TRUTH. SURVE Y U/S 133A ON THE OFFICE PREMISES OF THE COMPANY SEARCH U/S 132 AT THE RESIDENCE OF THE ASSESSEE AND AT THE RESIDENCE OF MS.MANGLA SOOD ONE OF THE CO- OWNERS OF PROPERTY D-123 ANAND NIKETAN PROVIDE ENOUGH EVIDENCE AND MATERIAL IN THE HANDS OF THE INCOME TAX DEPARTMENT TO ARRIVE AT THE IMPARTIAL DECISION REGARDING THE TAXABILITY OF THE CASH AMOUN T OF RS.1.07 CRORE. IN THE HANDS OF MS.MANGLA SOOD THE ASSESSING OFFICER HAS ALREADY ACCEPTED IT AS A SALE CONSIDERATION OF PROPERTY NO.D-123 ANAND NIKETAN. IN THE CASE OF ASSESSEE I GIVE THE FINDING THAT RS.1 C RORE HAS BEEN RECEIVED AS CASH BY THE ASSESSEE FROM HIS OWN COMPANY M/S REGAL FLATS PVT.LTD. ON ACCOUNT OF SALE OF PROPERTY NO.167 GOLF LINKS DELHI. ENTRIE S FOUND IN CASH BOOK (A-12 AS DISCUSSED ABOVE) IMPOUNDED IN COURSE OF SURVEY U/S 133A CANNOT BE IGNORED BY THE DEPARTMENT. THE ASSESSING OFFICER SHOULD HAVE EXAMINED ALL THE PAPERS FROM ANNEXURE IT(SS)-48 & 85/DEL/2006 7 A-1 TO A-39 BEFORE GIVING HIS FINDING IN THE ASSESSME NT ORDER. SINCE MATERIAL FOUND AND IMPOUNDED FROM THE OFFICE PREMISES OF THE COMPANY M/S REGAL FLATS PVT.LTD. PROVIDE SUBSTANTIVE EVIDENCE THE SAME SHOULD BE TAKEN AS TRUE IN ACCORDANCE WITH SECTION 132(4A) OF THE INCOME TAX ACT. 7. IN ABOVE PARA OF THE ORDER OF CIT(A) A CLEAR FI NDING HAS BEEN GIVEN BY HIM THAT AN AMOUNT OF ` 100 LAKHS HAS BEEN RECEIVED BY THE ASSESSEE IN CASH FROM HIS OWN COMPA NY M/S REGAL FLATS PVT.LTD. AND THIS CASH WAS RECEIVED BY THAT COMPANY ON ACCOUNT OF SALE OF PROPERTY 167 GOLF LINKS NEW DELHI AND ENTRIES ARE FOUND IN CASH BOOK I.E. A-12 IMPOUNDED I N THE COURSE OF SURVEY U/S 133A ON THE SAME DATE I.E. 13.5.2003. LEARNED CIT(A) HAS ENCLOSED THE PHOTOCOPY OF THE RELEVANT D OCUMENTS ALONGWITH HIS ORDER. IN THE SAID CASH BOOK COPY O F WHICH HAS BEEN ENCLOSED BY THE CIT(A) THERE IS AN ENTRY OF C ASH RECEIPT OF ` 1 CRORE ON 22.3.2003 IN CONNECTION WITH SALE OF 1 67 GOLF LINKS NEW DELHI SHOWN TO HAVE BEEN RECEIVED IN CASH AND O N 24.3.2003 THERE IS A ENTRY ON THE CREDIT SIDE OF THE CASH BOO K REGARDING PAYMENT OF CASH OF ` 100 LAKHS TO SHRI T.R.ANAND AS IMPREST. IN THE BALANCE SHEET OF M/S REGAL FLATS PVT.LTD. AS ON 31.3.2003 COPY OF WHICH IS AVAILABLE AT PAGE 75 OF THE ASSESS EES PAPER BOOK AN AMOUNT OF ` 100 LAKHS HAS BEEN SHOWN ON TH E ASSETS SIDE AS IMPREST TO ITS DIRECTOR. AS PER THE ASSESS MENT ORDER OF M/S REGAL FLATS PVT.LTD. FOR AY 2003-04 COPY OF WHI CH IS AVAILABLE ON PAGES 180 & 181 OF THE PAPER BOOK IT IS SEEN TH AT IT HAS BEEN NOTED BY THE AO IN THIS ASSESSMENT ORDER THAT COMPA NY HAS SOLD A PROPERTY BEARING NO.167 GOLF LINKS NEW DELHI FO R ` 255 LAKHS AND SALE CONSIDERATION IS CLAIMED TO HAVE BEEN RECE IVED BY CHEQUE OF ` 155 LAKHS AND CASH ` 100 LAKHS. IT IS FURTHER NOTED BY IT(SS)-48 & 85/DEL/2006 8 THE AO THAT THE ASSESSEE HAS SHOWN A COMPUTATION OF CAPITAL GAIN WHICH HAS BEEN SHOWN AT ` 203.16 LAKHS AND THE SAME IS ACCEPTED. UNDISPUTED POSITION IS THAT ASSESSEE WAS SHOWN THAT A CASH OF ` 100 LAKHS WAS RECEIVED BY IT FROM ITS OWN COMPANY M/S REGAL FLATS PVT.LTD. AND THAT COMPANY WAS SHOWN CAS H RECEIPT OF ` 100 LAKHS ON ACCOUNT OF SALE OF A PROPERTY AND HA S DECLARED LONG TERM CAPITAL GAIN ON THE BASIS OF SALE PROCEED S OF ` 255 LAKHS WHICH HAS BEEN ACCEPTED BY THE AO OF THAT COM PANY AND HENCE IT HAS TO BE ACCEPTED THAT THIS MUCH CASH WA S RECEIVED BY THAT COMPANY ALTHOUGH SHRI KHOSLA WHO IS THE BUYER OF THAT PROPERTY IS DENYING ABOUT ANY PAYMENT IN CASH TO TH E ASSESSEE OR TO THAT COMPANY. IT IS TO BE NOTED THAT WHEN A PERSON HAS MADE PAYMENT OUT OF HIS UNACCOUNTED CASH HE WILL N OT ACCEPT IT AND HENCE THE DENIAL BY SHRI KHOSLA THAT HE HAS NOT MADE ANY CASH FOR PURCHASE OF PROPERTY IN QUESTION CANNOT BE ACCEPTED AS A GOSPEL TRUTH. NOW THE QUESTION IS WHETHER THAT MONEY RECEIVED BY M/S REGAL FLATS PVT.LTD. WAS USED BY TH E ASSESSEE FOR MAKING THIS PAYMENT OF ` 107 LAKHS FOR PURCHASE OF PROPERTY. AS PER THE REGULAR CASH BOOK OF THAT COMPANY I.E. M/S REGAL FLATS PVT.LTD. WHICH WAS IMPOUNDED BY THE DEPARTMENT IN THE COURSE OF SURVEY ON 13.5.2003 THE ENTRIES ARE APPEARING I N THE CASH BOOK OF THAT COMPANY WITH EFFECT TO RECEIPT OF CASH FROM SALE OF PROPERTY AND TRANSFERRING OF CASH TO THE ASSESSEE U NDER IMPREST. SINCE THIS CASH BOOK OF M/S REGAL FLATS PVT.LTD. WA S IMPOUNDED BY THE DEPARTMENT ON THE SAME DATE THIS ALLEGATION OF THE DEPARTMENT CANNOT BE ACCEPTED THAT ENTRY IN THE REG ULAR CASH BOOK OF M/S REGAL FLATS PVT.LTD. IS AN AFTER THOUGH T. ONE MORE OBJECTION OF THE DEPARTMENT IS THAT THERE IS NO POS TING IN THE LEDGER OF THAT COMPANY WITH REGARD TO THIS CASH TRA NSACTION. IT IS IT(SS)-48 & 85/DEL/2006 9 BIT UNUSUAL BUT SIMPLY ON THE BASIS OF THIS FACT AL ONE THAT THESE CASH TRANSACTIONS WERE NOT POSTED IN THE LEDGER ACC OUNT IT CANNOT BE ACCEPTED THAT THESE TRANSACTIONS HAVE NOT TAKEN PLACE AND ENTRIES IN THE CASH BOOK ARE AFTER THOUGHT BECA USE THE CASH BOOK IS THE REGULAR CASH BOOK OF THAT COMPANY AND S AME WAS IMPOUNDED IN THE COURSE OF SURVEY ON THE SAME DATE WHEN THE SEARCH WAS CARRIED OUT BY THE ASSESSEE. REGARDING THIS OBJECTION OF LEARNED DR OF THE REVENUE THAT THERE WAS NO ENTR Y IN THE LEDGER OF THE COMPANY IT WAS EXPLAINED BY THE LEARN ED AR THAT SINCE THE CASH WAS SHOWN IN THE BALANCE SHEET IN TH E COMPANY AS IMPREST LYING WITH THE DIRECTOR OF THE COMPANY THE ENTRY WAS NOT POSTED IN THE LEDGER BY THE ACCOUNTANT BECAUSE HE W AS NOT AWARE AS TO WHETHER THE SAME IS TO BE POSTED IN THE RUNNI NG ACCOUNT OF THE ASSESSEE IN THE BOOKS OF THAT COMPANY OR TO A S EPARATE ACCOUNT. CONSIDERING ALL THESE FACTS WE DO NOT FI ND ANY REASON TO INTERFERE IN THE ORDER OF CIT(A) ON THIS ASPECT TO THE EXTENT OF ` 98 LAKHS 8. REGARDING THIS OBJECTION OF LEARNED DR OF THE RE VENUE THAT THE STATEMENT GIVEN BY THE ASSESSEE IN THE COURSE O F BLOCK ASSESSMENT IS CONTRADICTORY TO THE STATEMENT GIVEN IN THE COURSE OF SEARCH WE FEEL THAT ON THE BASIS OF THIS OBJECT ION ALONE A VALID AND ACCEPTABLE EXPLANATION OF THE ASSESSEE IN THE C OURSE OF BLOCK ASSESSMENT PROCEEDINGS SUPPORTED BY EVIDENCE CANNOT BE REJECTED. 9. FOR THE ISSUE REGARDING EXPLANATION OF THE ASSES SEE FOR CASH PAYMENT OF ` 9 LAKHS AS BAYANA WE WILL DECIDE ALON GWITH GROUND NO.2. BRIEF FACTS IN REGARD TO GROUND NO.2 ARE NOT ED BY THE AO IN IT(SS)-48 & 85/DEL/2006 10 PARA 3 OF THE ASSESSMENT ORDER AS PER WHICH IN THE COURSE OF SEARCH AND SEIZURE OPERATION CONDUCTED AT THE RESID ENTIAL PREMISES OF THE ASSESSEE CASH TOTALING ` 16 14 677 /- WAS FOUND AND OUT OF THIS ` 15 LAKHS WAS SEIZED. DURING THE ASSESSMENT PROCEEDINGS THE AO ASKED THE ASSESSEE TO EXPLAIN T HE SOURCE OF THIS CASH FOUND IN THE COURSE OF SEARCH. IN REPLY IT WAS SUBMITTED BY THE ASSESSEE THAT THE ASSESSEE HAD RECEIVED ` 25 LAKHS FROM ONE SHRI R.K.GUPTA AND SHRI BABA NAG DEV OUT OF WH ICH ` 9 LAKHS WAS GIVEN BY THE ASSESSEE AS BAYANA ADVANCE FOR PUR CHASE OF THE PROPERTY AT A TOTAL COST OF ` 187 LAKHS AND THE REMAINING ` 16 LAKHS WERE FOUND IN THE COURSE OF SEARCH. THE AO D ID NOT ACCEPT THIS EXPLANATION OF THE ASSESSEE ON THIS BASIS THAT NO PROOF OF IDENTITY OR CREDITWORTHINESS OF THESE PERSONS WAS F ILED. IT IS ALSO NOTED BY THE AO THAT THE COPY OF LETTER ALLEGEDLY B Y SHRI BABA NAG DEV IS DATED 11.4.2003 AND NO NAME ETC. OF THE PERSON WHO HAS WRITTEN THIS LETTER HAS BEEN MENTIONED. THE AO ASKED THE ASSESSEE TO PRODUCE THESE TWO PERSONS WITH THEIR PR OOF OF IDENTITY CREDITWORTHINESS AND GENUINENESS OF THE P AYMENT MADE. THE AR OF THE ASSESSEE PRODUCED SHRI R.K.GUPTA BUT NO PROOF OF CREDITWORTHINESS OR GENUINENESS WAS FILED WITH RESP ECT TO THE PAYMENTS RECEIVED FROM HIM. AFTER MAKING THESE OBS ERVATIONS THE AO MADE ADDITION OF `16 14 650/- FOUND FROM THE RESIDENTIAL PREMISES OF THE ASSESSEE UNDER THE PROVISIONS OF SE CTION 69C OF THE ACT. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) WHO HAS DELETED THIS ADDIT ION AND NOW THE REVENUE IS IN APPEAL BEFORE US. 10. IT WAS SUBMITTED BY THE LEARNED DR OF THE REVEN UE THAT THE COPY OF THE STATEMENT OF THE ASSESSEE RECORDED AT T HE TIME OF IT(SS)-48 & 85/DEL/2006 11 SEARCH ON 13.5.2003 IS AVAILABLE ON PAGES 20 TO 34 OF THE PAPER BOOK FILED BY THE REVENUE AND IN THE SAME PAPER BOO K OUR ATTENTION WAS DRAWN TO PAGE 33 AND PARTICULARLY TO QUESTION NO.40 AND ITS REPLY. IT IS SUBMITTED THAT IN REPLY TO THIS QUESTION REGARDING SOURCE OF THE CASH OF ` 15.14 LAKHS FOUND IN THE COURSE OF SEARCH IT WAS STATED BY THE ASSESSEE THAT THIS IS OUT OF SALE CONSIDERATION (PART PAYMENT) RECEIVED FROM SEVERAL PARTIES WHO HAVE BOOKED COMMERCIAL CHAMBERS WHICH ARE BEING BUI LT IN THE REGAL BUILDING. IT IS SUBMITTED THAT THE REPLY GIV EN BY THE ASSESSEE IN THE COURSE OF ASSESSMENT PROCEEDINGS IS TOTALLY DIFFERENT AND HENCE THE REPLY GIVEN IN THE COURSE OF ASSESSMENT PROCEEDINGS IS NOT RELIABLE AND SHOULD BE REJECTED. 11. AS AGAINST THIS LEARNED AR OF THE ASSESSEE SUP PORTED THE ORDER OF CIT(A). IT IS ALSO SUBMITTED BY HIM THAT THE CASH FOUND IN THE SEARCH TALLIES WITH THE CASH BALANCE SHOWN IN T HE SEIZED DIARY AS AVAILABLE ON PAGE 176 OF THE PAPER BOOK. IT IS ALSO SUBMITTED THAT SHRI R.K.GUPTA WAS PRODUCED BEFORE THE AO AND HE CONFIRMED THE ADVANCE OF AMOUNT TO THE ASSESSEE. 12. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WHILE DECIDING THIS GROUND OF TH E REVENUE WE WILL ALSO COVER THE REMAINING PART OF GROUND NO.1 R AISED BY THE REVENUE I.E. REGARDING BAYANA ADVANCE OF `9 LAKHS G IVEN BY THE ASSESSEE TO THE CO-OWNERS. THIS ISSUE HAS BEEN DECI DED BY THE CIT(A) AS PER PARA 8.2 OF HIS ORDER. IT HAS BEEN N OTED BY THE CIT(A) IN THIS PARA THAT FOR SHRI BABA NAG DEV THE CONFIRMATION WAS FILED AND PERSON WAS DEAD AT THE TIME OF EXAMIN ATION BY THE IT(SS)-48 & 85/DEL/2006 12 AO. IT IS ALSO NOTED THAT ASSESSEE HAD PRODUCED FU LL ADDRESS OF THE REGISTERED SOCIETY TO WHICH SHRI BABA NAG DEV WAS ATTACHED AS PRESIDENT AND REGISTRATION NUMBER AND FULL ADDRE SS OF THE SOCIETY WAS AVAILABLE ON THE LETTER HEAD OF THE SOC IETY. IT IS ALSO NOTED BY HIM THAT THE COTTAGE HAS SINCE BEEN TRANSF ERRED IN HIS NAME. REGARDING SHRI R.K.GUPTA IT IS NOTED BY THE CIT(A) THAT THE ASSESSEE HAS PRODUCED THIS PERSON AND DOCUMENTS RELATING TO FILING OF RETURN AND BALANCE SHEET ETC. WERE FURNIS HED. IT IS ALSO NOTED BY THE CIT(A) THAT WHAT OTHER REQUIREMENTS WE RE REQUIRED TO BE MET BY THE ASSESSEE COULD NOT BE ELABORATED B Y THE AO AND HENCE BY MERELY DISAPPROVING OF IDENTITY AND CREDI TWORTHINESS INSPITE OF THE MATERIALS TO THE CONTRARY THE AMOUN T OF ` 12.5 LAKHS RECEIVED FROM SHRI R.K.GUPTA CANNOT BE TAKEN AS UNEXPLAINED INCOME OF THE ASSESSEE. WHEN WE EXAMIN E THE RELEVANT PAGE OF THE PAPER BOOK FILED BY THE ASSESS EE I.E. PAGE 176 WHICH IS A PAGE OF A SEIZED DIARY WE FIND THA T AFTER RECORDING RECEIPTS OF `1 CRORE FROM M/S REGAL FLATS PVT.LTD. AND ` 12.5 LAKHS EACH FROM SHRI BABA NAG DEV AND SHRI R.K .GUPTA AND AFTER DEDUCTING THE PAYMENT OF ` 98 LAKHS ON ACCOUN T OF PURCHASE OF PROPERTY ON 12.5.2003 AND OF ` 9 LAKHS ON 5.5.20 03 ON ACCOUNT OF ADVANCE FOR PROPERTY I.E. D-1 ANAND NIKETAN AND SOME OTHER SMALL PAYMENTS THE BALANCE OF CASH HAS BEEN WORKED OUT ON THIS PAGE OF THE DIARY AT ` 16.15 LAKHS. THE ASSESSEE H AS EXPLAINED THE RECEIPT OF ` 1 CRORE FROM THE COMPANY AS WELL A S ` 12.5 LAKHS FROM SHRI BABA DEV NAG AND ` 12.5 LAKHS FROM SHRI R .K.GUPTA AND IN THIS MANNER HE HAS EXPLAINED THE SOURCE OF PAYM ENT OF ` 107 LAKHS ON ACCOUNT OF PROPERTY INCLUDING INITIAL BAYA NA PAYMENT OF ` 9 LAKHS AND ALSO THE CASH FOUND IN THE COURSE OF SE ARCH OF ` 16 14 650/-. WE THEREFORE FIND NO REASON TO INTERFE RE IN THE ORDER IT(SS)-48 & 85/DEL/2006 13 OF CIT(A) ON BOTH THESE GROUNDS. ACCORDINGLY GROU ND NO.1 & 2 OF REVENUE ARE REJECTED. 13. GROUND NO.3 RAISED BY THE REVENUE READS AS UNDE R:- DELETING THE ADDITION OF RS.56 LACS MADE ON ACCOUN T OF DEEMED DIVIDEND U/S 2(22)E OF THE IT ACT 1961. 14. BRIEF FACTS REGARDING THIS GROUND ARE THAT IT I S NOTED BY THE AO IN PARA 4 OF THE ASSESSMENT ORDER THAT ACCORDING TO AGREEMENT TO SELL DATED 12.5.2003 BETWEEN THE ASSES SEE AND FIVE CO-OWNERS OF PROPERTY D-123 ANAND NIKETAN NEW DELHI TOTAL PURCHASE CONSIDERATION OF PROPERTY WAS FIXED AT ` 8 0 LAKHS. IT IS FURTHER NOTED BY THE AO THAT OUT OF THIS AMOUNT ` 10 LAKHS WAS TO BE PAID AFTER THE FINALIZATION OF THE DEAL. IT IS ALSO NOTED BY THE AO THAT AS PER THE AGREEMENT ` 70 LAKHS WAS PAID T O THE CO- OWNERS. THE AO ASKED THE ASSESSEE TO EXPLAIN THE S OURCE OF THIS PAYMENT OF ` 70 LAKHS. IN REPLY IT WAS SUBMITTED BY THE ASSESSEE THAT ` 14 LAKHS WAS PAID FROM M/S REGAL FLATS PVT.L TD. ON 12.5.2003 ` 8 LAKHS WAS ALSO PAID FROM THE SAME CO MPANY ON THE SAME DATE AND ` 34 LAKHS WAS PAID FROM THE SAME COMPANY. THEREAFTER IT IS NOTED BY THE AO THAT THESE PAYMEN TS WERE MADE BY THIS COMPANY ON BEHALF OF THE ASSESSEE AND ASSES SEE HAD MAJOR SHAREHOLDING I.E. MORE THAN 10% IN THIS COMPA NY. THE AO INVOKED THE PROVISIONS OF SECTION 2(22)(E) AND MADE ADDITION OF ` 56 LAKHS AS DEEMED DIVIDEND BY INVOKING THE PROVISI ONS OF SECTION 2(22)(E). BEING AGGRIEVED THE ASSESSEE CA RRIED THE MATTER IN APPEAL BEFORE CIT(A) WHO DELETED THE ADDI TION ON THE BASIS THAT SUCH ADDITION CANNOT BE MADE IN THE BLOC K ASSESSMENT BECAUSE THE ENTIRE TRANSACTION STOOD FULLY ACCOUNTE D FOR IN THE IT(SS)-48 & 85/DEL/2006 14 BOOKS OF ACCOUNT ON THE BASIS OF WHICH RETURNS WERE FILED. NOW THE REVENUE IS IN APPEAL BEFORE US. 15. LEARNED DR SUPPORTED THE ASSESSMENT ORDER WHERE AS LEARNED AR SUPPORTED THE ORDER OF CIT(A). IT IS AL SO SUBMITTED BY HIM THAT THE ASSESSMENT ORDER IN REGULAR ASSESSMENT PROCEEDINGS FOR AY 2004-05 IS AVAILABLE ON PAGES 183 TO 185 OF THE PAPER BOOK AND THE ORDER OF CIT(A) AGAINST SUCH REGULAR ASSESSMENT ORDER IS ALSO AVAILABLE ON PAGES 186 TO 189 OF THE PAPER BOOK. IT IS POINTED OUT BY THE LEARNED AR TH AT AS PER DIRECTION OF CIT(A) IN THE BLOCK ASSESSMENT PROCEED INGS SAME ADDITION WAS MADE BY THE AO IN THE REGULAR ASSESSME NT BY INVOKING PROVISIONS OF SECTION 2(22)(E) AS CAN BE S EEN IN THE ASSESSMENT ORDER DATED 28.11.2006 AND WHEN ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE CIT(A) IN REGULAR ASSES SMENT PROCEEDINGS THE ADDITION WAS DELETED BY THE CIT(A) VIDE HIS ORDER DATED 16.3.2007 IN WHICH IT HAS BEEN HELD BY HIM THAT THE ASSESSEE WAS HOLDING LESS THAN 8% VOTING POWERS IN M/S REGAL FLATS PVT.LTD. AS ON 12.5.2003 AND THEREFORE PROVI SIONS OF SECTION 2(22)(E) ARE NOT APPLICABLE. IT IS ALSO SUBMITTED BY HIM THAT NO APPEAL HAS BEEN FILED BY THE REVENUE BEFORE THE TRI BUNAL AGAINST THIS ORDER OF CIT(A) IN REGULAR ASSESSMENT PROCEEDI NGS IN ASSESSEES OWN CASE FOR AY 2004-05 AND HENCE THE FI NDING OF CIT(A) HAS BECOME FINAL. 16. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT SUCH ADDITION OF ` 56 LAKHS WAS MADE BY THE AO IN THE BLOCK ASSESSMENT ON THE BASIS OF THE IT(SS)-48 & 85/DEL/2006 15 PAYMENTS MADE BY THE COMPANY M/S REGAL FLATS PVT.LT D. BY WAY OF CHEQUE AND SUCH PAYMENTS WERE DULY ACCOUNTED FOR BY THAT COMPANY IN ITS REGULAR BOOKS AND HENCE CIT(A) HAS RIGHTLY DELETED THIS ADDITION BECAUSE SUCH ADDITION CANNOT BE MADE IN THE BLOCK ASSESSMENT. THE IMPUGNED ORDER OF CIT(A) IS DATED 29.12.2005 AND THEREAFTER IN COURSE OF REGULAR ASSE SSMENT PROCEEDINGS FOR AY 2004-05 IN THE CASE OF THE ASSESS EE THE AO HAS MADE SAME ADDITION IN THE HANDS OF THE ASSESSEE IN REGULAR ASSESSMENT FOR AY 2004-05 AND SUCH ADDITION IN REGUL AR ASSESSMENT PROCEEDINGS IS ALSO DELETED BY LEARNED C IT(A) ON THE BASIS OF THIS FINDING THAT THE ASSESSEE WAS HOLDING LESS THAN 8% OF VOTING POWERS IN M/S REGAL FLATS PVT.LTD. AS ON 12.5.2003. LEARNED DR COULD NOT SHOW US THAT THIS FINDING OF C IT(A) IN REGULAR ASSESSMENT PROCEEDINGS IS NOT CORRECT. HEN CE FOR BOTH THESE REASONS I.E. SUCH ADDITION CANNOT BE MADE IN THE COURSE OF BLOCK ASSESSMENT AND ALSO FOR THIS REASON THAT THE ASSESSEE IS HOLDING LESS THAN 8% OF VOTING RIGHTS IN M/S REGAL FLATS PVT.LTD. AT RELEVANT POINT OF TIME NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE U/S 2(22)(E) ON ACCOUNT OF ADVANCE OF MONEY BY THAT COMPANY I.E. M/S REGAL FLATS PVT.LTD. TO THE A SSESSEE. WE THEREFORE DECLINE TO INTERFERE IN THE ORDER OF CIT (A) ON THIS ISSUE. GROUND NO.3 IS ALSO REJECTED. 17. GROUND NOS.4 & 5 OF THE REVENUES APPEAL ARE INTERCONNECTED WHICH READ AS UNDER:- 4. DELETING THE ADDITION OF RS.60 LACS MADE ON ACCOUNT OF UNDISCLOSED RECEIPTS ON ACCOUNT OF PROPE RTY NO.2 ND FLOOR C-21 ANAND NIKETAN NEW DELHI. IT(SS)-48 & 85/DEL/2006 16 5. DELETING THE ADDITION OF RS.14.50 LACS MADE ON ACCOUNT OF LOANS OF RS.4.5 LAC & RS.10 LACS MADE AVAILABLE BY THE ASSESSEE TO MRS. MAITHLI GANJOO. 18. BRIEF FACTS IN THIS REGARD ARE NOTED BY THE AO IN PARA 5 OF THE ASSESSMENT ORDER. IT IS NOTED BY THE AO THAT P AGE 14 OF ANNEXURE A-3 SEIZED FROM THE RESIDENTIAL PREMISES OF THE ASSESSEE IS AN UNDATED RECEIPT IN WHICH IT IS MENTI ONED THAT A SUM OF `30 LAKHS HAS BEEN RECEIVED FROM MRS.MAITHLI GANJOO WITH RESPECT TO THE SALE OF SECOND FLOOR OF PROPERTY C-2 1 ANAND NIKETAN NEW DELHI. IT IS ALSO NOTED BY THE AO THA T THE AMOUNT OF RS.30 LACS ONLY HAS BEEN WRITTEN IN THE BLANK SPA CE OF THE RECEIPT IN THE HANDWRITING OF THE ASSESSEE. IT IS FURTHER NOTED BY THE AO THAT AT THE BOTTOM OF THIS PAGE THE ASSESSE E HAS WRITTEN WITH HIS OWN HANDS TOTAL RS.55 (FIFTY FIVE) LACS P LUS COST OF CONSTRUCTION. THE AO ASKED THE ASSESSEE TO EXPLAI N THE CONTENTS OF THIS DOCUMENT AND RECONCILE IT WITH ASS ESSEES BOOKS OF ACCOUNT. IN REPLY IT WAS SUBMITTED BY THE LEAR NED AR OF THE ASSESSEE THAT THE SAID PAGE WAS UNSIGNED AND DEAL H AS NOT MATERIALIZED AND THEREFORE THE DOCUMENT HAD NO MEA NING. ON FURTHER QUERY BY THE AO IT WAS SUBMITTED BY THE AS SESSEE THAT THE DEAL REGARDING C-21 ANAND NIKETAN NEW DELHI DI D NOT MATERIALIZE AND NO MONEY WAS RECEIVED. IT WAS ALSO SUBMITTED THAT THIS TRANSACTION WAS PRIOR TO THE BLOCK PERIOD . THE AR OF THE ASSESSEE HAD ENCLOSED A COPY OF THE AGREEMENT TO SA LE DATED 31.3.1993 TO BUTTRESS HIS ARGUMENT THAT THE TRANSAC TION WAS PRIOR TO THE BLOCK PERIOD. THEREAFTER IT IS NOTED BY TH E AO THAT THE SALE AGREEMENT WAS WITH RESPECT TO C-41 ANAND NIKET AN NEW DELHI AND NOT REGARDING C-21 ANAND NIKETAN NEW DEL HI. THE AO BROUGHT THIS FACT TO THE NOTICE OF LEARNED AR OF TH E ASSESSEE. IT IS IT(SS)-48 & 85/DEL/2006 17 FURTHER NOTED BY THE AO THAT DURING THE POST SEARCH INVESTIGATIONS DR. MAITHILI GANJOO HAD APPEARED BE FORE THE ADIT(INV.) UNIT-3(2) NEW DELHI AND WAS ASKED TO EX PLAIN THE CONTENTS OF THE DOCUMENTS AND GIVE DETAILS OF PROPE RTY BOUGHT BY HER. IT IS FURTHER NOTED BY THE AO THAT SHE HAD PU RCHASED PROPERTY C-21 ANAND NIKETAN NEW DELHI ON 26.10.199 9 FROM SMT.SAROJ KAISTHA FOR A TOTAL AMOUNT OF ` 21.60 LAK HS AND THIS AMOUNT WAS ARRANGED BY TAKING LOAN OF ` 4.5 LAKHS F ROM THE ASSESSEE AND ANOTHER LOAN OF ` 10 LAKHS WAS ARRANGE D WITH THE HELP OF THE ASSESSEE. THE AO DISCUSSED THESE ASPEC TS WITH THE AR OF THE ASSESSEE IN THE COURSE OF HEARING HELD ON 17.5.2005 AND HE PROVIDED A COPY OF STATEMENT OF SMT.MAITHLI GANJOO TO THE LEARNED AR OF THE ASSESSEE IN THE COURSE OF HEARING HELD ON 17.5.2005. THE AO ASKED THE ASSESSEE TO EXPLAIN TH E SOURCE OF THE SAME WITH DOCUMENTARY PROOF. HE ALSO ASKED THE AR TO PRODUCE DR.MAITHILI GANJOO IN ORDER TO CORROBORATE THESE CONTENTIONS OF THE ASSESSEE. IT IS NOTED BY THE AO THAT THE ASSESSEES AR DID NOT FILE ANY REPLY ON THIS ASPECT AND MERELY REITERATED THAT THE DEAL REGARDING C-21 ANAND NIKET AN HAD NOT MATERIALIZED. THE AO WAS NOT SATISFIED AND HE MADE ADDITION OF ` 60 LAKHS AS UNDISCLOSED RECEIPT OF THE ASSESSEE ON ACCOUNT OF SALE OF PROPERTY I.E. C-21 ANAND NIKETAN FOR ` 55 L AKHS AND ESTIMATED COST OF CONSTRUCTION AS ` 5 LAKHS. HE AL SO MADE ADDITION OF ` 14.5 LAKHS ON ACCOUNT OF LOAN GIVEN B Y THE ASSESSEE AS PER STATEMENT OF DR.MAITHILI GANJOO. AN ADDITIO N OF ` 60 LAKHS WAS MADE ON ACCOUNT OF UNDISCLOSED RECEIPTS WHEREAS ADDITION OF ` 14.50 LAKHS WAS MADE ON ACCOUNT OF UNEXPLAINED IN VESTMENT U/S 69A. BEING AGGRIEVED THE ASSESSEE CARRIED BOT H THE MATTERS IT(SS)-48 & 85/DEL/2006 18 IN APPEAL BEFORE THE CIT(A) AND HE HAS DELETED BOTH THESE ADDITIONS AND NOW THE REVENUE IS IN APPEAL. 19. LEARNED DR OF THE REVENUE SUPPORTED THE ASSESSM ENT ORDER WHEREAS LEARNED AR SUPPORTED THE ORDER OF CIT(A) ON BOTH THESE ISSUES. IT WAS ALSO SUBMITTED THAT THE PROPERTY IN QUESTION I.E. C- 21 ANAND NIKETAN WAS NEITHER PURCHASED BY DR.MAITH ILI GANJOO NOR SOLD BY THE ASSESSEE AND DR.MAITHILI GANJOO ALS O CONFIRMED THIS FACT BEFORE THE ADIT(INV.). REGARDING LOAN GI VEN BY THE ASSESSEE TO DR.MAITHILI GANJOO IT WAS SUBMITTED TH AT LOAN WAS GIVEN BY THE ASSESSEE OF ` 4.5 LAKHS ONLY WHICH IS DULY SHOWN IN HIS STATEMENT OF NET WORTH AS ON 31.3.2000 AND REGA RDING THE BALANCE AMOUNT OF ` 10 LAKHS IT IS SUBMITTED THAT DR.MAITHILI GANJOO NEVER STATED THAT THE AMOUNT OF ` 10 LAKHS W AS PAID BY THE ASSESSEE. 20. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT BOTH THESE ADDITIO NS WERE DELETED BY THE CIT(A) AS PER PARA 11 TO 11.4 WHICH ARE REPRODUCED BELOW:- 11. GROUND NO.5 & 6 ARE TAKEN TOGETHER FOR THE SAK E OF CONVENIENCE. GROUND NO.5 IS THAT THE ADDITION O F RS.60 LAKH ON THE ALLEGATION OF UNDISCLOSED RECEIPT S ON ACCOUNT OF PROPERTY NO.C-21 ANAND NIKETAN NEW DELHI MADE TO THE UNDISCLOSED INCOME OF THE APPELLANT IS WHOLLY WRONG AND UNTENABLE IN LAW. TH AT THE LEARNED ASSESSING OFFICER HAS FAILED TO APPRECI ATE THAT NEITHER THE IMPUGNED TRANSACTION HAD MATERIALIZED NOR THE ASSESSEES ISSUE WAS IN RESPEC T OF THE BLOCK PERIOD. THAT THE LEARNED ASSESSING OFFIC ER HAS FURTHER FAILED TO APPRECIATE THAT EVEN DURING P OST IT(SS)-48 & 85/DEL/2006 19 SEARCH INVESTIGATION CARRIED OUT AT THE BACK OF THE ASSESSEE MRS.MAITHLY GANGOO HAS NOT ADMITTED ANY TRANSACTION IN RESPECT OF PROPERTY NO.C-21 ANAND NIKETAN. 11.1 GROUND NO.6 IS THAT THE ASSESSING OFFICER HAS ERRED IN MAKING AN ADDITION OF RS.14.50 LAKH ON ACCOUNT OF ALLEGED UNEXPLAINED INVESTMENT U/S 69 OF THE ACT IN RESPECT OF C-24 ANAND NIKETAN PURCHASED BY DR.MAITHLY GANGOO AND ADMITTED BY HER IN POST SEARCH INQUIRIES CARRIED OUT BEHIND THE BACK OF THE ASSESSEE. THAT THE FACT THAT THE PROPERTY HAD BEEN PURCHASED BY DR.MAITHLY GANGOO HAVING BEEN ACCEPTED ON THE BASIS OF HER STATEMENT THERE WAS N O JUSTIFICATION FOR THE ASSESSING OFFICER TO HAVE CONCLUDED THAT THE INVESTMENT IN SUCH PROPERTY WAS MADE BY THE ASSESSEE WITHOUT BRINGING ON RECORD ANY MATERIAL TO SHOW SUCH INVESTMENT EXCEPT FOR A STATEMENT OF DR.MAITHLY GANGOO WHICH WAS ADMITTEDLY RECORDED BEHIND THE BACK OF THE ASSESSEE AND IN RESPECT OF WHICH NO OPPORTUNITY TO CROSS EXAMINE WA S EVEN ALLOWED TO THE ASSESSEE. THAT THE ASSESSING OFFICER HAS FAILED TO APPRECIATE THAT DR.MAITHLY GA NGOO WAS THE EVIDENCE OF THE DEPARTMENT AND IT WAS FOR T HE DEPARTMENT TO HAVE PRODUCED HER FOR CROSS EXAMINATION BEFORE THE ASSESSEE WHEN THEY HAD RELIE D ON HER STATEMENT FOR MAKING ADDITION IN THE HANDS O F THE ASSESSEE. 11.2 THE ASSESSMENT ORDER AT PAGE 7 & 8 (PARA 5) DEALS WITH ADDITIONS RAISED IN GROUND NO.5 & 6. TH E COPY OF THE SEIZED DOCUMENT OF PAGE 14 OF ANNEXURE A-3 WAS SUBMITTED BY THE ASSESSEE. IT IS AN UNSIGNE D RECEIPT WHICH DISCUSSES PROPOSED SALE DEED OF THE SECOND FLOOR OF THE PROPERTY C-21 ANAND NIKETAN NE W DELHI. THE RECEIPT ALSO SAYS THAT IN THE EVENT OF ANY KIND OF THE FAILURE IN RESPECT OF THE AFORESAID TRANSACTION THE MONEY SO RECEIVED HEREIN IS TO BE REFUNDED. 11.3 AS SUBMITTED BY THE ASSESSEE THE TRANSACTIONS IN RESPECT OF THE SAID PROPERTY C-21 ANAND NIKETAN NE W DELHI COULD NOT TAKE PLACE AND TILL TODAY THIS PROP ERTY HAS NOT BEEN DEALT WITH. THERE IS THEREFORE NO IT(SS)-48 & 85/DEL/2006 20 QUESTION OF ANY AMOUNT HAVING CHANGE HANDS. FURTHE R THE ASSESSEE IS NOT THE OWNER OF THIS PROPERTY. TH E ASSESSING OFFICER HAS WRITTEN MORE THAN ONE PAGE WITHOUT INDICATING WHETHER ANY FACTUAL VERIFICATION WAS EVER DONE BY EITHER THE ASSESSING OFFICER OR BY THE INVESTIGATION WING. SUCH LOOSE ENDS ARE LEFT UNATTENDED BY THE DEPARTMENT AND THEN ADDITION IS MADE ARBITRARILY. THE DEPARTMENT ALSO HAS CERTAIN RESPONSIBILITY IN ASCERTAINING THE TRUTH WHICH SEEM TO HAVE NOT BEEN CARRIED OUT. IN SUCH CIRCUMSTANCES T HE ADDITION OF RS.60 LAKH CANNOT BE SUSTAINED. THERE IS NO SCOPE OF ESTIMATION IN THE BLOCK ASSESSMENT. 11.4 REGARDING THE STATEMENT OF DR.MATHLI GANJU THA T SHE HAD TAKEN LOAN OF RS.4.5 LAKH FROM THE ASSESSEE AND FURTHER RS.10 LAKH ARRANGED BY THE ASSESSEE IT IS SEEN THAT THE ASSESSEE HAS SHOWN HIS STATEMENT OF N ET ASSETS AS ON 31/03/2000 FILED BEFORE THE AO ALONGWI TH THE RETURN FOR THE ASSESSMENT YEAR 2000-01. IN THIS STATEMENT THE LOAN TO DR.MATHLI GANJU OF RS.4.5 LAK H IS CLEARLY MENTIONED. THEREAFTER IN EVERY ASSESSMENT YEAR THE SAME THING HAS BEEN SHOWN. THIS FACT WAS BROUGHT TO THE NOTICE OF ASSESSING OFFICER. THE ASSESSING OFFICER DID NOT BOTHER TO LOOK INTO HIS O WN RECORDS WHERE ASSESSEE IS REGULARLY ASSESSED TO TAX . SUCH TYPE OF ADDITION ARE RESORTED TO WITHOUT ANY APPLICATION OF MIND. THERE IS NO BASIS FOR ADDITIO N OF RS.4.5 LAKH. REGARDING THE STATEMENT OF DR.GANJU HAVING SAID THAT RS.10 LAKH WAS ARRANGED AS LOAN TO HER BY THE ASSESSEE THE ASSESSEE WAS NOT ASKED TO CONFIRM OR DENY THE CORRECTNESS OF THE STATEMENT. EVEN THE STATEMENT DOES NOT SHOW THAT ASSESSEE HAS PAID THE AMOUNT. SINCE DR.MATHLI GANJU WAS EXAMINE D BY THE INCOME TAX DEPARTMENT AND ASSESSEE WAS NOWHERE INVOLVED THE RESPONSIBILITY OF THE ASSESSE E WAS NOT THERE AT ALL TO PRODUCE DR.GANJU BEFORE THE ASSESSING OFFICER. IF ANY ADVERSE VIEW WAS TO BE T AKEN REGARDING RS.10 LAKH LOAN IT HAD TO BE AGAINST DR. GANJU AND NOT AGAINST THE ASSESSEE. IT WAS THE RESPONSIBILITY OF THE ASSESSING OFFICER TO PRODUCE DR.GANJU FOR CROSS EXAMINATION BY THE ASSESSEE. NOTHING WAS DONE AND A SIMPLE ADDITION OF RS.10 LAK H WAS MADE IN THE HANDS OF THE ASSESSEE. THE ADDITIO N OF RS.10 LAKH ON THIS COUNT IS DELETED. IT(SS)-48 & 85/DEL/2006 21 21. FROM THE ABOVE PARAGRAPHS OF ORDER OF CIT(A) W E FIND THAT A CLEAR FINDING IS GIVEN BY THE CIT(A) THAT THE ADD ITION OF ` 60 LAKHS WAS MADE ON THE ALLEGATION OF UNDISCLOSED REC EIPTS ON ACCOUNT OF SALE OF C-21 ANAND NIKETAN BUT DR.MAITHI LI GANJOO HAD NOT ADMITTED ANY TRANSACTION IN RESPECT OF PROPERTY C-21 ANAND NIKETAN. ON THE BASIS OF THIS FINDING THE ADDITIO N OF ` 60 LAKHS WAS DELETED BY THE CIT(A) AND WE ARE IN AGREEMENT W ITH CIT(A) ON THIS ISSUE. THE BALANCE AMOUNT OF ` 14.5 LAKHS WAS DELETED ON THIS BASIS THAT THE LOAN OF ` 4.5 LAKHS HAS BEEN DU LY SHOWN IN THE STATEMENTS OF THE ASSESSEE AS ON 31.3.2000 WHICH HA S BEEN FILED BEFORE THE AO ALONGWITH THE RETURN OF INCOME FOR AY 2000-01. REGARDING THE BALANCE AMOUNT OF ` 10 LAKHS IT WAS NEVER STATED BY DR.MAITHILI GANJOO THAT THIS AMOUNT WAS GIVEN BY THE ASSESSEE TO HER. CONSIDERING ALL THESE FACTS WE FIND NO RE ASON TO INTERFERE IN THE ORDER OF CIT(A). WE THEREFORE CONFIRM THE O RDER OF CIT(A) ON BOTH THESE ISSUES. GROUND NOS.4 & 5 ARE REJECTE D. 22. NOW WE CONSIDER GROUND NO.6 OF THE REVENUES A PPEAL WHICH IS AS UNDER :- DELETING THE ADDITION OF RS.26 LACS MADE ON ACCOUN T OF UNEXPLAINED INVESTMENT ON THE BASIS OF SEIZED MATERIAL. 23. BRIEF FACTS ARE THAT IT IS NOTED BY THE AO IN P ARA 6 OF THE ASSESSMENT ORDER THAT PAGES 1 TO 4 AND 29 OF ANNEXU RE A-4 SEIZED FROM THE RESIDENTIAL PREMISES OF THE ASSESSE E ARE RECEIPTS SIGNED BY SHRI M.S.GILL FOR VARIOUS AMOUNTS TOTALLY ` 9 LAKHS. IT IS ALSO NOTED BY THE AO THAT ON PAGE 2 OF THIS ANNEXUR E IT IS IT(SS)-48 & 85/DEL/2006 22 MENTIONED THAT THESE PAYMENTS WERE WITH RESPECT TO CONSTRUCTION OF FOUR COTTAGES AT GADAI PUR NEW DEL HI AND THE TOTAL CONTRACT AMOUNT WAS ` 26 LAKHS. THE AO ASKED THE ASSESSEE TO EXPLAIN THE CONTENTS OF THIS DOCUMENT A ND RECONCILE IT WITH ASSESSEES BOOKS OF ACCOUNT. THE AR OF THE ASSESSEE FILED REPLY WHEREIN HE ARGUED THAT THE SAID CONTRACT WAS FOR ` 26 LAKHS BUT SHRI GILL DID NOT KEEP HIS PROMISE AND IN ORDER TO RESOLVE THE DEADLOCK THE ASSESSEE HAD TO PAY ` 9 LAKHS TO HIM. THE AR OF THE ASSESSEE FILED COPY OF THE SALE DEED DATED 10.6.200 3 WHEREBY THE FARM LAND IN VILLAGE GADAI PUR WAS SOLD TO MRS. MANISH GUPTA FOR ` 16 LAKHS. IT IS NOTED BY THE AO THAT KHASRA NUMBER MENTIONED ON THIS SALE DEED IS DIFFERENT FROM THE K HASRA NUMBER ON THE COPY OF THE SALE DEED DATED 4.6.1998 FILED B Y THE AR OF THE ASSESSEE. ON THIS BASIS THE AO CAME TO THE CONCLU SION THAT THESE TWO DEEDS ARE WITH RESPECT TO DIFFERENT PROPE RTIES. THE AO ASKED THE ASSESSEE TO EXPLAIN THE SOURCE OF PAYMENT TO MR.GILL ALONGWITH NECESSARY DOCUMENTARY EVIDENCE. IN REPLY IT WAS SUBMITTED BY THE ASSESSEE BEFORE THE AO THAT SHRI M .S.GILL DIED BEFORE COMPLETING THE JOB ASSIGNED TO HIM AND HIS S UCCESSOR DID NOT COMPLETE THE JOB ASSIGNED TO HIM. IT WAS ALSO SUBMITTED THAT PAYMENTS WERE MADE TO HIM THROUGH M/S SHIKHA PROPER TIES AND THE COPY OF HIS ACCOUNT IN THE BOOKS OF THAT COMPAN Y WERE ENCLOSED. THE AO HAS REPRODUCED THE COPY OF ACCOUN T OF SHRI GILL IN THE BOOKS OF M/S SHIKHA PROPERTIES AS PER WHICH THERE WAS A SALE OF A MOTOR CAR TO SHRI GILL FOR ` 6 LAKHS. TH E AO HAD NOTED THAT NONE OF THE PAYMENTS AS PER RECEIPTS FOUND IN THE SEIZED DOCUMENT I.E. ANNEXURE A-4 ARE APPEARING IN THIS ACC OUNT OF SHRI GILL IN THE BOOKS OF M/S SHIKHA PROPERTIES. ON THI S BASIS THE AO CAME TO THE CONCLUSION THAT THE ASSESSEE COULD NOT EXPLAIN THE IT(SS)-48 & 85/DEL/2006 23 SOURCE OF PAYMENTS MADE TO SHRI M.S.GILL OF ` 9 LAK HS AND THEREFORE SAME IS HELD AS UNDISCLOSED INCOME OF TH E ASSESSEE. IT IS ALSO NOTED BY THE AO THAT NO DOCUMENTARY EVIDENC E HAS BEEN FILED TO SUBSTANTIATE THE CLAIM OF THE ASSESSEE THA T SHRI GILL COULD NOT COMPLETE HIS CONTRACT. IT IS FURTHER NOTED BY THE AO THAT ON ONE PAGE I.E. RECEIPT OF ` 75 000/- SIGNED BY SHRI G ILL IT IS RECORDED THAT THE SAID AMOUNT IS MEANT FOR INSTALLI NG ELECTRICAL WORK FITTINGS AND FIXTURES ETC. AND THAT NO FURTHE R PAYMENT WAS DUE ON THIS ACCOUNT. ON THE BASIS OF THIS NOTING THE AO CAME TO THE CONCLUSION THAT SHRI GILL HAD COMPLETED HIS PAR T OF THE DEAL AND THEREFORE THIS CONTENTION OF THE ASSESSEE IS R EJECTED THAT WORK WAS NOT COMPLETED BY SHRI GILL AND THE TOTAL A MOUNT OF CONTRACT WHICH INCLUDES THE AMOUNT OF ` 9 LAKHS IS HELD AS UNDISCLOSED INVESTMENT OF THE ASSESSEE. ON THIS BA SIS THE AO MADE ADDITION OF ` 26 LAKHS. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) WHO HAS DELETED THIS ADDITION AND NOW THE REVENUE IS IN APPEAL BEFO RE US. 24. IT IS SUBMITTED BY THE LEARNED DR OF THE REVENU E THAT ON PAGE 92 OF THE PAPER BOOK FILED BY THE REVENUE IS T HE RECEIPT OF ` 4 25 000/- ISSUED BY SHRI M.S.GILL IN WHICH IT HAS B EEN NOTED THAT TOTAL CONTRACT AGREED IS OF ` 26 LAKHS. HE ALSO DR AWN OUR ATTENTION TO THE RECEIPT OF ` 75 000/- APPEARING ON PAGE 91 OF THE PAPER BOOK AND IT WAS SUBMITTED THAT IT HAD BEEN NO TED IN THIS RECEIPT THAT NO FURTHER PAYMENT IS DUE ON THIS COUN T AND HENCE IT IS CLEAR THAT TOTAL AMOUNT OF ` 26 LAKHS AS PER THE CONTRACT HAS BEEN PAID BY THE ASSESSEE TO SHRI M.S.GILL AND THER EFORE THE ADDITION MADE BY THE AO IS JUSTIFIED AND THEREFORE THE ORDER OF LEARNED CIT(A) IS REQUIRED TO BE REVERSED AND THAT OF THE AO IT(SS)-48 & 85/DEL/2006 24 SHOULD BE RESTORED. REGARDING THE SOURCE OF PAYMEN T OF ` 9 LAKHS SUBMITTED BY THE ASSESSEE IT WAS SUBMITTED THAT TH E SAME IS AS PER STATEMENT OF TOTAL ASSETS AS ON 31.3.1999 APPEA RING ON PAGE 24 OF THE PAPER BOOK FILED BY THE ASSESSEE. BUT TH AT IS ON ACCOUNT OF ADVANCE FOR CONSTRUCTION (COTTAGE) AND I T IS NOT CLEAR AS TO WHETHER IT IS THE SAME AMOUNT WHICH HAD BEEN PAID TO SHRI M.S.GILL. 25. AS AGAINST THIS LEARNED AR OF THE ASSESSEE SUP PORTED THE ORDER OF CIT(A). IT IS ALSO SUBMITTED BY HIM THAT ADDITION WAS MADE ONLY ON SURMISES AND CONJECTURES. IT IS ALSO SUBMITTED THAT THE ASSESSEE HAS MADE PAYMENT OF ` 9 LAKHS ONLY AND NO FURTHER AMOUNT WAS PAID AND THIS PAYMENT OF ` 9 LAKHS WAS F ULLY DISCLOSED IN REGULAR COURSE AND NO MATERIAL WAS FOU ND IN THE COURSE OF SEARCH TO SHOW THAT ANY FURTHER PAYMENT W AS MADE. 26. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT AS PER THE RECEIPT S FOUND IN THE COURSE OF SEARCH TOTAL AMOUNT PAID BY THE ASSESSEE IS OF ` 9 LAKHS AND SUCH PAYMENT WAS DULY DISCLOSED BY THE AS SESSEE IN HIS REGULAR RETURN FOR AY 1999-2000 FILED ON 30.6.19 99 MUCH BEFORE THE DATE OF SEARCH. NOW THE QUESTION IS WH ETHER THE ASSESSEE HAS MADE PAYMENT OF ` 9 LAKHS ONLY OR THE TOTAL AGREED AMOUNT OF ` 26 LAKHS WAS PAID BY THE ASSESSEE. WE FIND THAT MERELY ON THIS BASIS THAT THE TOTAL CONTRACT VALUE WAS OF ` 26 LAKHS IT CANNOT BE ACCEPTED THAT THE ENTIRE AMOUNT WAS PAID BY THE ASSESSEE. REGARDING THE NOTING ON RECEIPT OF ` 75 000/- APPEARING ON PAGE 91 OF THE PAPER BOOK FILED BY THE REVENUE IT(SS)-48 & 85/DEL/2006 25 THAT NO FURTHER PAYMENT IS DUE ON THIS COUNT WE FI ND THAT THIS PAYMENT WAS MADE AS PER THIS RECEIPT FOR INSTALLING MOTOR ELECTRICITY WORK BORING TUBE WELL INCLUDING LABOUR FITTING AND FIXTURE ETC. WHEREAS AS PER NOTING ON PAGE 92 THE TOTAL VALUE OF ` 26 LAKHS OF THE CONTRACT WAS IN RESPECT OF CONSTRUC TION OF COTTAGES INCLUDING LABOUR CHARGES BUILDING MATERIAL AND ALL THE FITTINGS AND FIXTURES AND THERE IS NO MENTION ABOUT INSTALLATION OF MOTOR ELECTRICITY WORK AND BORING TUBE WELL ETC. REGARDIN G THIS CONTRACT OF ` 26 LAKHS. HENCE ON THE BASIS OF THIS NOTING IN THE RECEIPT OF ` 75 000/- IT CANNOT BE CONCLUDED THAT THE TOTAL CONT RACT OF ` 26 LAKHS WAS COMPLETED AND TOTAL PAYMENT WAS MADE BY T HE ASSESSEE. CONSIDERING ALL THESE FACTS WE FIND NO REASON TO INTERFERE IN THE ORDER OF CIT(A) ON THIS ISSUE BECA USE INSPITE OF SEARCH NO EVIDENCE COULD BE FOUND BY THE REVENUE T HAT ANYTHING IN EXCESS OF ` 9 LAKHS WAS PAID BY THE ASSESSEE TO SHRI M.S.GILL AND SUCH PAYMENT OF ` 9 LAKHS WAS DULY DISCLOSED BY THE ASSESSEE IN HIS REGULAR RETURN OF INCOME FILED MUCH BEFORE THE SEARCH. THIS GROUND OF THE REVENUE IS ALSO REJECTE D. 27. GROUND NO.7 OF THE REVENUES APPEAL READS AS UN DER:- DELETING THE ADDITION OF RS.16 LACS MADE ON ACCOUN T OF UNEXPLAINED EXPENDITURE (MENTIONED AT PAGE-37 OF ANNEXURE A-4) PAYMENT MADE OF SH.R.S.JERATH. 28. BRIEF FACTS ARE THAT IT IS NOTED BY THE AO IN P ARA 7 OF THE ASSESSMENT ORDER THAT PAGE 37 TO 42 OF ANNEXURE A-4 SEIZED FROM THE RESIDENTIAL PREMISES OF THE ASSESSEE IS RELATED TO FLAT NO.204 A-13 KAILASH COLONY NEW DELHI. THE AO ASKED THE A SSESSEE TO EXPLAIN THE CONTENTS OF THIS DOCUMENT AND TO RECONC ILE WITH THE IT(SS)-48 & 85/DEL/2006 26 ASSESSEES BOOKS OF ACCOUNT. IN REPLY IT WAS SUBM ITTED BY THE ASSESSEE BEFORE THE AO THAT THE TRANSACTION WITH RE SPECT TO THE SAID PROPERTY WAS PRIOR TO THE BLOCK PERIOD AND THE REFORE OUTSIDE THE PURVIEW OF BLOCK ASSESSMENT. THEN THE AO DRAW N ATTENTION OF THE ASSESSEE TO PAGE 37 OF ANNEXURE A-4 WHICH IS THE COMPROMISE LETTER DATED 5.4.1999 IN WHICH IT HAS BE EN STATED THAT THE ASSESSEE SHALL PAY ` 16 LAKHS IN FOUR EQUA L INSTALLMENTS TO SHRI R.S.JAIRATH FOR THE FULL AND FINAL SETTLEME NT OF THE PROPERTY DISPUTE BETWEEN THEM WITH RESPECT TO THIS PROPERTY. THE LEARNED AR OF THE ASSESSEE FILED REPLY BEFORE THE AO AND ST ATED THAT CHEQUE NOS.369771 369772 AND 369773 AMOUNTING TO ` 4 LAKHS ` 4 LAKHS AND ` 3 LAKHS RESPECTIVELY WERE NEVER ENC ASHED. IT WAS FURTHER SUBMITTED BY THE ASSESSEE BEFORE THE AO THA T THE ASSESSEE WAS STILL IN DISPUTE WITH SMT. ILLA THAKOR E WITH RESPECT TO THIS PROPERTY AND IN SUPPORT OF THIS CONTENTION HE FILED A COPY OF LETTER IN THIS REGARD. THEREAFTER IT IS NOTED BY THE AO THAT INSPITE OF THIS ARGUMENT OF THE ASSESSEE PAGE 37 OF ANNEXU RE A-4 IS THE COMPROMISE LETTER BETWEEN THE ASSESSEE AND SHRI R.S .JAIRATH SHOWING THAT A COMPROMISE BETWEEN ASSESSEE AND SHRI R.S.JAIRATH HAS BEEN REACHED AS PER WHICH ASSESSEE WAS TO PAY ` 16 LAKHS TO SHRI R.S.JAIRATH AND THIS PAGE DOES NOT MENTION THE NAME OF SMT.ILLA THAKORE. IT IS ALSO STATED BY THE AO THAT THE ASSESSEE HAS NOT FURNISHED ANY DOCUMENTARY EVIDENCE TO SHOW THAT A COMPROMISE LETTER WAS NOT HONOURED BY THE AS SESSEE. IT IS ALSO NOTED BY THE AO THAT NO DOCUMENTARY EVIDENCE H AS BEEN FILED TO SHOW THAT THE ASSESSEE AND SHRI R.S.JAIRAT H ARE STILL ENGAGED IN LITIGATION OVER THE SAID PROPERTY. ON T HE BASIS OF THESE OBSERVATIONS THE AO HELD THAT THE ASSESSEE H AD PAID ` 16 LAKHS TO SHRI R.S.JAIRATH OUT OF HIS UNDISCLOSED IN COME AND MADE IT(SS)-48 & 85/DEL/2006 27 ADDITION OF THIS AMOUNT U/S 69C. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) WHO HAS DELETED THIS ADDITION AND NOW THE REVENUE IS IN APPEAL BEF ORE US. 29. LEARNED DR OF THE REVENUE SUPPORTED THE ASSESSM ENT ORDER AND OUR ATTENTION WAS DRAWN TO THE COMPROMISE LETTE R WHICH IS APPEARING ON PAGE 96 OF THE PAPER BOOK FILED BY THE REVENUE. 30. AS AGAINST THIS LEARNED AR OF THE ASSESSEE SUP PORTED THE ORDER OF LEARNED CIT(A). IT IS ALSO SUBMITTED BY H IM THAT A CERTIFICATE FROM ADVOCATE IS AVAILABLE ON PAGE 132 OF THE PAPER BOOK FILED BY THE ASSESSEE WHEREIN THE ADVOCATE SHR I AJIT KUMAR UPADHYAY HAD CERTIFIED THAT A CRIMINAL CASE IN RESP ECT OF FIR NO.90/99 IN POLICE STATION GREATER KAILASH NEW DEL HI IS PENDING TRIAL ON 27.9.2005 BEFORE SHRI BRAJESH KUMAR GARG METROPOLITAN MAGISTRATE PATIALA HOUSE NEW DELHI. IT IS SUBMIT TED THAT THE COPY OF FIR NO.90/99 IS AVAILABLE ON PAGES 133 TO 1 35 OF THE PAPER BOOK AND THE SEIZED DOCUMENT IS TALKING ABOUT THIS VERY DISPUTE BETWEEN THE ASSESSEE AND SHRI R.S.JAIRATH F OR WHICH FIR WAS FILED BY SHRI R.S.JAIRATH AND HENCE THIS IS NO T CORRECT THAT THE AMOUNT WAS PAID BY THE ASSESSEE TO SHRI R.S.JAIRATH BECAUSE IN THAT SITUATION THE ASSESSEE MUST HAVE ENSURED THAT THE CASE IS WITHDRAWN BY SHRI R.S.JAIRATH. 31. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS PERUS ED THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THIS ISSUE HAS BEE N DECIDED BY THE CIT(A) AS PER PARA 13 OF HIS ORDER IN WHICH IT IS STATED BY THE CIT(A) THAT ACCORDING TO THE ASSESSEE TILL TODAY H E HAS NOT PAID IT(SS)-48 & 85/DEL/2006 28 ANY AMOUNT TO SHRI R.S.JAIRATH AND THE FIR LODGED B Y SHRI R.S.JAIRATH AGAINST THE ASSESSEE STILL CONTINUES. IT IS ALSO NOTED BY THE CIT(A) THAT THE SEIZED DOCUMENT DOES NOT PROVID E ANY EVIDENCE OF PAYMENT OF ` 16 LAKHS HAVING BEEN MADE AT ANY POINT OF TIME. WE ARE IN AGREEMENT WITH THE LEARNE D CIT(A) ON THIS ISSUE BECAUSE WE FIND THAT AS PER THE CERTIFIC ATE OF THE ADVOCATE DATED 17.9.2005 THE CASE IS STILL CONTINU ING WITH REGARD TO FIR NO.90/99 FILED BY SHRI R.S.JAIRATH ON 14.3.1 999. WE ALSO FIND THAT AS PER THE SEIZED DOCUMENT THERE IS AN A GREEMENT FOR SETTLEMENT ON PAYMENT OF ` 16 LAKHS BUT THERE IS NO EVIDENCE REGARDING THE PAYMENT OF THIS AMOUNT FOUND IN THE C OURSE OF SEARCH. WE THEREFORE FIND NO REASON TO INTERFERE IN THE ORDER OF CIT(A) ON THIS ISSUE AND HENCE WE UPHOLD THE SAME. GROUND NO.7 OF THE REVENUES APPEAL IS ALSO REJECTED. 32. GROUND NO.8 OF THE REVENUE READS AS UNDER:- DELETING THE ADDITION OF RS.40 LACS MADE ON ACCOUN T OF UNDISCLOSED RECEIPTS FOR PROPERTY NO.A-4/1 SECTO R- 14 ROHINI. 33. BRIEF FACTS ARE THAT IT IS NOTED BY THE AO IN P ARA 8 OF THE ASSESSMENT ORDER THAT PAGE 45 OF ANNEXURE A-4 AND PA GE 8 OF ANNEXURE A-6 SEIZED FROM THE RESIDENTIAL PREMISES OF THE ASSESSEE ARE RELATED TO PROPERTY A-4/1 SECTOR-14 RO HINI NEW DELHI. IT IS OBSERVED BY THE AO THAT PAGE 45 OF AN NEXURE A-4 IS THE RECEIPT OF ` 2 LAKHS AND IT IS FURTHER STATED T HAT THE ABOVE MENTIONED PROPERTY IS BEING SOLD FOR A TOTAL CONSID ERATION OF ` 40 LAKHS. IT IS ALSO NOTED BY THE AO THAT THIS PAGE I S SIGNED BY BOTH THE ASSESSEE AND SHRI J.B.KEDIA. THE AO FURTHER SA YS THAT THE IT(SS)-48 & 85/DEL/2006 29 PICTURE BECOMES CLEARER ON EXAMINATION OF PAGE 8 OF ANNEXURE A- 6 WHICH HAS BEEN REPRODUCED BY THE AO ON PAGES 10 & 11 OF THE ASSESSMENT ORDER. WE FIND THAT AS PER THE NOTING O N THIS PAGE PAYMENT OF ` 1 LAKH WAS TO BE MADE IN CASH ON 30.7. 1998 AND THE REMAINING PAYMENTS WERE MADE BY WAY OF SIX CHEQ UES OUT OF WHICH ONE CHEQUE IS OF ` 6 LAKHS ONE CHEQUE IS OF ` 5 LAKHS AND THE REMAINING FOUR CHEQUES ARE OF ` 7 LAKHS EACH. IT IS ALSO STATED ON THIS PAGE THAT THE POSSESSION IS HANDED OVER ON SIGNING OF MOU AND NECESSARY DOCUMENTS WILL BE EXECUTED ON ENC ASHMENT OF THE CHEQUES. THE AO ASKED THE ASSESSEE TO GIVE DETAILS OF THIS PROPERTY AND THE TRANSACTION THUS RECORDED AS PER T HESE DOCUMENTS AND RECONCILE THE SAME AS PER BOOKS OF AC COUNT. LEARNED AR OF THE ASSESSEE SUBMITTED BEFORE THE AO THAT THIS PROPERTY I.E. A-4/1 SECTOR-14 ROHINI NEW DELHI REL ATES TO OMJEE VIKLANG TRUST AND THE ASSESSEE DID NOT HAVE ANY BEN EFICIARY INTEREST IN THE SAID PROPERTY. THE AO HAS STATED I N THE ASSESSMENT ORDER THAT THIS CONTENTION OF THE ASSESS EE IS NOT CORRECT BECAUSE ON PAGE 8 OF ANNEXURE A-6 THE ASSES SEE HIMSELF HAS SIGNED AS EXECUTANT OF THE MOU BETWEEN HIMSELF AND SHRI J.B.KEDIA. IT IS ALSO STATED THAT ON PAGE 45 OF AN NEXURE A-4 SIGNATURE OF THE ASSESSEE ARE VERY CLEARLY VISIBLE. THE AO ASKED THE AR OF THE ASSESSEE ABOUT THESE FACTS. IN REPLY IT WAS SUBMITTED BY THE LEARNED AR BEFORE THE AO THAT THE SAID PROPERTY BELONGED TO OMJEE VIKLANG TRUST AND THE ASSESSEE WA S NOT INVOLVED IN THE SAID PROPERTY IN ANY CAPACITY. IT WAS ALSO SUBMITTED THAT THE PAYMENTS WERE ROUTED THROUGH THE ASSESSEE AND THE ASSESSEE HAS MERELY SIGNED SOME RECEIPTS. IT WAS ALSO SUBMITTED THAT THE CHEQUES IN THE FAVOUR OF THE SAI D TRUST WERE NEVER ENCASHED. THE AO FURTHER RAISED A QUERY THAT M/S SHIKHA IT(SS)-48 & 85/DEL/2006 30 PROPERTIES AND GLORY CONSTRUCTION WERE HAVING THEIR REGISTERED OFFICES AT THESE PREMISES I.E. A-4/1 SECTOR-14 ROHI NI NEW DELHI. IN REPLY IT WAS SUBMITTED BY THE ASSESSEE BEFORE T HE AO THAT THESE COMPANIES WERE HAVING THEIR REGISTERED OFFICE FROM 10.1.1991 BUT THE PROPERTY WAS BELONGING TO OMJEE V IKLANG TRUST. THE ASSESSEE ALSO FURNISHED COPY OF FORM 18 FILED WITH THE REGISTRAR OF COMPANIES NEW DELHI ALONGWITH ITS REC EIPTS. IT IS FURTHER NOTICED BY THE AO THAT IN THE STATEMENT OF THE ASSESSEE RECORDED ON 30.7.2003 BEFORE THE ADIT(INV.) UNIT-3( 4) NEW DELHI THE ASSESSEE HAD STATED THAT HE WAS THE VICE PRESIDENT OF OMJEE VIKLANG TRUST AND THEREFORE THESE PAPERS WER E FOUND AT HIS PREMISES. THE AO WAS NOT SATISFIED AND HE MADE ADDITION OF ` 40 LAKHS. ON APPEAL LEARNED CIT(A) HAS DELETED TH IS ADDITION ALSO AND NOW THE REVENUE IS IN APPEAL BEFORE US. 34. LEARNED DR OF THE REVENUE SUPPORTED THE ASSESSM ENT ORDER WHEREAS LEARNED AR OF THE ASSESSEE SUPPORTED OF THE ORDER OF LEARNED CIT(A). IT WAS ALSO SUBMITTED BY HIM THAT THE PROPERTY WAS NOT OWNED BY THE ASSESSEE BUT WAS OWNED BY THE SOCIETY NAMELY OMJEE VIKLANG TRUST OF WHICH THE ASSESSEE WAS THE VICE PRESIDENT. IT IS ALSO SUBMITTED THAT THE PROPOSED SALE OF THE PROPERTY BY THE ASSESSEE WAS ONLY ON BEHALF OF SOCI ETY AS ITS VICE PRESIDENT. IT IS ALSO SUBMITTED THAT THE ORIGINAL CHEQUES WERE RECEIVED AND WERE IN FAVOUR OF THAT SOCIETY I.E. OM JEE VIKLANG TRUST. IT IS SUBMITTED THAT THE ASSESSEE HAD NO PE RSONAL INTEREST IN THIS TRANSACTION AND HENCE THE ORDER OF CIT(A) ON THIS ISSUE SHOULD BE CONFIRMED. IT IS SUBMITTED THAT THE UNCA SHED CHEQUES SEIZED DURING THE SEARCH ARE AVAILABLE ON PAGES 137 TO 140 OF THE PAPER BOOK. IT IS ALSO SUBMITTED THAT AS PER PAGES 141 TO 143 OF IT(SS)-48 & 85/DEL/2006 31 THE PAPER BOOK IT CAN BE SEEN THAT THE PROPERTY IN QUESTION IS BELONGING TO THAT SOCIETY I.E. OMJEE VIKLANG TRUST. 35. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS PERUS ED THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT ON PAGES 137 TO 14 0 OF THE PAPER BOOK ARE THE PHOTOCOPIES OF FOUR ORIGINAL CHEQUES S EIZED IN THE COURSE OF SEARCH OUT OF WHICH THREE CHEQUES ARE O F ` 7 LAKHS EACH AND REMAINING ONE CHEQUE IS OF ` 5 LAKHS. SIN CE THESE ORIGINAL CHEQUES WERE FOUND AND SEIZED IN THE COURS E OF SEARCH IT IS OBVIOUS THAT THIS PAYMENT WAS NOT MADE TO THIS E XTENT I.E. ` 26 LAKHS. NOW THE QUESTION IS AS TO WHETHER THE BALA NCE PAYMENT OF ` 14 LAKHS WAS IN FACT MADE BY THAT PARTY OR NOT . IN THIS REGARD WE FOUND THAT AS PER THE DETAILS AVAILABLE ON PAGE 136 OF THE PAPER BOOK BEING COPY OF MOU/AGREEMENT FOUND IN THE COURSE OF SEARCH ON THE BASIS OF WHICH THIS ADDITION WAS M ADE THE BALANCE PAYMENT OF ` 14 LAKHS WAS AGREED TO BE MADE BY WAY OF CASH ` 1 LAKH ON 30.7.1998 I.E. ON THE DATE OF SIGN ING OF THAT AGREEMENT ` 6 LAKHS BY WAY OF CHEQUE NO.276433 DAT ED 2.8.1998 AND AN AMOUNT OF ` 7 LAKHS BY WAY OF CHEQU E NO.276434 DATED 7.9.1998. THE REMAINING FOUR CHEQU ES OF ` 26 LAKHS WHICH WERE FOUND IN THE COURSE OF SEARCH COP IES OF WHICH ARE AVAILABLE FROM PAGES 137 TO 140 OF THE PAPER BO OK IT IS SEEN THAT THESE CHEQUES ARE DRAWN IN FAVOUR OF OMJEE VIK LANG TRUST. THE CHEQUE NOS. ARE 276435 TO 276438 BEING THE SAME CHEQUE NUMBERS WHICH ARE NOTED IN THE SAID AGREEMENT DATED 30.7.1998 AVAILABLE ON PAGES 136 OF THE PAPER BOOK. WHEN THE SE FOUR CHEQUES ARE DRAWN IN THE NAME OF OMJEE VIKLANG TRUS T THERE IS NO REASON OR BASIS TO SAY THAT THE BALANCE TWO CHEQ UES OF ` 6 IT(SS)-48 & 85/DEL/2006 32 LAKHS AND ` 7 LAKHS WERE NOT DRAWN IN THE FAVOUR OF THAT SOCIETY ONLY AND THE AMOUNT OF CASH OF ` 1 LAKHS WAS NOT GI VEN/AGREED TO BE GIVEN TO THAT SOCIETY ONLY AND HENCE ON THE BAS IS OF THIS AGREEMENT COPY OF WHICH IS AVAILABLE ON PAGE 136 O F THE PAPER BOOK NO ADDITION CAN BE MADE IN THE HANDS OF THE A SSESSEE. LEARNED CIT(A) HAS GIVEN A CLEAR FINDING IN PARA 14 .2 OF HIS ORDER THAT THE PROPERTY IN QUESTION IS UNDISPUTEDLY OF A REGISTERED SOCIETY NAMELY OMJEE VIKLANG TRUST. IT IS ALSO NOT ED BY THE CIT(A) THAT THE ASSESSEE IS THE VICE PRESIDENT OF T HAT SOCIETY. REGARDING THIS ALLEGATION OF THE AO IN THE ASSESSME NT ORDER THAT AS PER THE BANK ACCOUNT OF SMT. MANJU KEDIA AND SHR I JAI BHAGWAN KEDIA AN AMOUNT OF ` 6 LAKHS WAS SHOWN TO HAVE BEEN PAID ON 11.8.1998 TO THE ASSESSEE IT IS OBSERVED B Y THE CIT(A) THAT WHEN THE AO CAN GET THE BANK ACCOUNT OF THE KE DIAS WHY WAS THE BANK ACCOUNT OF THE ASSESSEE NOT EXAMINED B EFORE ARRIVING AT A FINDING THAT ` 6 LAKHS HAS BEEN CREDI TED IN THE ACCOUNT OF THE ASSESSEE. BEFORE US ALSO NOTHING H AS BEEN BROUGHT ON RECORD THAT ANY AMOUNT HAS BEEN CREDITED TO A BANK ACCOUNT OF THE ASSESSEE. CONSIDERING ALL THESE FAC TS WE FIND NO REASON TO INTERFERE IN THE ORDER OF CIT(A) ON THIS ISSUE. HIS ORDER ON THIS ISSUE IS CONFIRMED AND GROUND NO.8 OF THE R EVENUE IS ALSO REJECTED. 36. GROUND NO.9 OF THE REVENUE AND GROUND NO.1 & 2 OF THE ASSESSEE ARE INTERCONNECTED WHICH READ AS UNDER:- GROUND NO.9 OF THE REVENUE :- DELETING THE ADDITION OF RS.17 54 500/- OUT OF THE TOTAL ADDITION OF RS.44 47 500/- MADE ON ACCOUNT OF IT(SS)-48 & 85/DEL/2006 33 UNEXPLAINED INVESTMENT ON THE BASIS OF PAGES 46 TO 48 OF ANNEXURE A-4. GROUND NO.1 & 2 OF THE ASSESSEE :- 1. THAT THE LEARNED CIT(APPEALS) HAS ERRED BOTH IN LAW AS WELL AS IN FACTS OF THE CASE IN SUSTAINING A N ADDITION OF RS.20.00 LACS OUT OF A TOTAL ADDITION O F RS.30 85 580/- MADE BY THE ASSESSING OFFICER ON THE BASIS OF BACKSIDE OF SEIZED DOCUMENT NO.46 OF ANNEXURE A-4. THAT THE LEARNED CIT(APPEALS) HAS ERRED IN ARBITRARILY SUSTAINING AN ADDITION OF RS.2 0.00 LACS EVEN AFTER HAVING FOUND THAT NO DATES WERE MENTIONED ON THE DOCUMENT AND THAT OLD ACCOUNT WAS MENTIONED ON THE FACE OF THE DOCUMENT. THAT TH E IMPUGNED DOCUMENT IS A DUMB DOCUMENT CONTAINING ESTIMATED FIGURES AND THE LEARNED CIT(APPEALS) OUGH T TO HAVE DELETED THE WHOLE AMOUNT OF RS.30 85 580/-. 2. THAT THE LEARNED CIT(APPEALS) HAS ERRED BOTH IN LAW AS WELL AS IN FACTS OF THE CASE IN SUSTAINING A N ADDITION OF RS.6 93 000/- MADE BY THE ASSESSING OFFICER ON THE BASIS OF SEIZED DOCUMENT NO.48 OF ANNEXURE A-4. THAT THE LEARNED CIT(APPEALS) HAS ERRED IN ARBITRARILY REJECTING THE EXPLANATION OF T HE APPELLANT THAT THE DOCUMENT WAS MERELY A DUMB DOCUMENT AND DID NOT REFLECT ANY TRANSACTION OF THE APPELLANT. 37. BRIEF FACTS ARE THAT IT HAS BEEN NOTED BY THE A O IN PARA 9 OF THE ASSESSMENT ORDER THAT PAGE 46 TO 48 OF ANNEXURE A-4 SEIZED FROM THE RESIDENTIAL PREMISES OF THE ASSESSEE ARE H ANDWRITTEN NOTES CONTAINING NOTING OF VARIOUS PAYMENTS MADE BY THE ASSESSEE. IT IS NOTED BY THE AO THAT PAGE 46 CONTA INS THE PAYMENTS TOTALING ` 30 85 500/- MADE TO CERTAIN PERS ONS AND SIMILARLY THE BACK SIDE OF PAGE 47 HAS DETAILS OF AIR TICKETS WORTH ` 1.69 LAKHS AND SIMILARLY FRONT SIDE OF PAGE 47 C ONTAINS DETAILS OF SOME LOAN AMOUNT OF ` 5 LAKHS. REGARDING PAGE 4 8 IT IS NOTED IT(SS)-48 & 85/DEL/2006 34 BY THE AO THAT THIS PAGE CARRIES DETAILS OF SOME PA YMENT OF ` 6.93 LAKHS MADE BY THE ASSESSEE. IT IS ALSO NOTED BY THE AO THAT THE TOTAL AMOUNT APPEARING ON THIS PAGE IS ` 44 47 500/-. THE AO ASKED THE ASSESSEE TO EXPLAIN THE SOURCE OF THIS PA YMENT WITH NECESSARY DOCUMENTARY EVIDENCE. IN REPLY IT WAS S UBMITTED BY THE ASSESSEE BEFORE THE AO THAT ASSESSEE HAS TO COM E ACROSS A NUMBER OF PERSONS IN RESPECT OF DEALINGS IN PROPERT Y AND DURING THE DISCUSSION THE PARTIES WRITE SOME ROUGH FIGURE S/AMOUNTS ON THE PIECE OF PAPER WHICH NORMALLY IS NOTHING BUT AN ESTIMATE FIGURE OF SOME DEALING. IT WAS ALSO SUBMITTED THAT THESE CALCULATIONS MAY HAVE MATERIALIZED OR MAY NOT HAVE MATERIALIZED. REGARDING PAGE 48 IT WAS SUBMITTED THAT THE FIGURE RELATES BACK TO JULY 1998 AND BY NO STRETCH OF IMAGINATION A PE RSON CAN REMEMBER EACH AND EVERY PIECE OF PAPER WHICH WAS WR ITTEN BY HIM ROUGHLY SIX YEARS BACK. IN A NUTSHELL IT WAS SUBMITTED THAT THESE ROUGH NOTINGS ARE NOTHING BUT A PART AND PARC EL OF MATURED OR UNMATURED DEALING IN 1998 AND HENCE NO MORE EXP LANATION CAN BE PROVIDED IN THIS REGARD. THE AO WAS NOT SAT ISFIED AND HE MADE ADDITION OF ` 39 47 500/- U/S 69C BY ALLEGING UNEXPLAINED EXPENDITURE AND ADDITION OF ` 5 LAKHS WAS MADE BY H IM U/S 69A BY ALLEGING THAT THIS IS AN UNEXPLAINED LOAN GIVEN BY THE ASSESSEE. BEING AGGRIEVED THE ASSESSEE CARRIED TH E MATTER IN APPEAL BEFORE THE CIT(A) WHO HAS CONFIRMED THE ADDI TION OF ` 26 93 000/- OUT OF ADDITION OF ` 39 47 500/- U/S 69C AND DELETED THE BALANCE AMOUNT OF ADDITION MADE BY THE AO U/S 6 9C AND ALSO THE ADDITION OF ` 5 LAKHS MADE BY THE AO U/S 69A WA S DELETED BY THE CIT(A). NOW THE REVENUE IS IN APPEAL REGARDIN G THE ADDITIONS DELETED BY THE CIT(A) WHEREAS THE ASSESSE E IS IN APPEAL IT(SS)-48 & 85/DEL/2006 35 WITH REGARD TO AMOUNT OF ADDITION CONFIRMED BY THE CIT(A) TO THE EXTENT OF ` 26 93 000/-. 38. LEARNED DR OF THE REVENUE SUPPORTED THE ASSESSM ENT ORDER. OUR ATTENTION WAS DRAWN TO THE COPY OF THE SEIZED DOCUMENTS WHICH ARE AVAILABLE FROM PAGE 107 TO 109 OF THE PAPER BOOK FILED BY THE REVENUE AND IT IS NOTED THA T AS PER THIS NOTING IT IS SEEN THAT THESE ARE NOT THE ROUGH NOT INGS BUT SYSTEMATIC ACCOUNT KEPT OF EXPENSES AND LOANS AND T HEREFORE THE ADDITION MADE BY THE AO SHOULD BE CONFIRMED FUL LY. 39. AS AGAINST THIS IT IS SUBMITTED BY THE LEARNED AR THAT THESE ARE MERELY DUMB DOCUMENTS CONTAINING ONLY ROUGH CAL CULATIONS. IT IS ALSO SUBMITTED THAT THE AO HAS FAILED TO PROV E AS TO WHETHER IT REPRESENTS RECEIPTS OR PAYMENTS. IT IS ALSO SUB MITTED THAT IN ONE OF THESE SEIZED DOCUMENTS BEING PAGE 47 THE WO RD ESTIMATE IS CLEARLY WRITTEN AND HENCE THE ENTIRE ADDITION SHOULD BE DELETED. RELIANCE WAS PLACED ON THE FOLLOWING T RIBUNAL DECISIONS:- (I) 39 ITD 183 (DELHI). (II) 67 ITJ 838 (CHANDIGARH). (III) AMAR NATVARLAL SHAH VS. ACIT - 60 ITD 560 (AHMEDABAD). (IV) S.P.GOYAL VS. DCIT - 82 ITD 85 (MUMBAI). (V) BANSAL STRIPS (P) LTD. VS. ACIT - 99 ITD 177 (DELHI) . (VI) 157 TAXMAN 407 (DELHI). IT(SS)-48 & 85/DEL/2006 36 40. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS PERUS ED THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND THE TRIBUNAL DECISIONS CITED BY THE LEARNED AR OF THE ASSESSEE. WE FIND THAT AS PER PAGE 46 OF ANNEXURE A-4 COPY OF WHICH IS AVAILABLE ON PAGE 107 OF THE PAPER BOOK FILED BY THE REVENUE IT IS SEEN THAT ON THE TOP IS WRITTEN AN AMOUNT OF ` 25 LAKHS AGAINST THE WORD PAID. THEREAFTER AN A MOUNT OF ` 50 000/- HAS BEEN ADDED BUT THE NARRATION IS NOT LEG IBLE. AGAIN AN AMOUNT OF ` 50 000/- WAS ADDED WITH THE NARRATION SHORT RECEIPT. THEREAFTER AGAIN AN AMOUNT OF ` 50 000/ - WAS DEDUCTED WITH THE NARRATION CHEQUE RECEIVED. THE REAFTER AN AMOUNT OF ` 5 LAKHS HAS BEEN ADDED WITH SOME NARRAT ION WHICH IS NOT LEGIBLE. THEREAFTER AN AMOUNT OF ` 35 500/- HA S BEEN ADDED WITH THE NARRATION DIFF. PAID EXCESS TO. ON PAGE 48 OF THE SAME ANNEXURE ALSO BELOW THE AMOUNT OF ` 6.93 LAKHS TH IS AMOUNT OF ` 35 500/- HAS BEEN NOTED AND BELOW THAT IT IS STATED THAT SETTLED ON 8.7.1998. ON PAGE 46 OF ANNEXURE A-4 THE TERM PAID IS ALSO MENTIONED AND THE TERM CHEQUE RECEIVED IS AL SO MENTIONED AND THE TERM SHORT RECEIVED IS ALSO MEN TIONED AND HENCE IT IS NOT CLEAR AS TO WHETHER THESE ARE PAYM ENTS BY THE ASSESSEE OR RECEIPTS BY THE ASSESSEE. LEARNED CIT( A) HAS HELD AS PER PARA 15.1 OF HIS ORDER THAT AT NO STAGE WHERE V ARIOUS FIGURES HAVE BEEN MENTIONED ON PAGE 46 OF ANNEXURE A-4 ANY DATES ARE GIVEN. THEREAFTER HE SAYS THAT IN THE ABSENCE OF THE DATES MENTIONED ON THIS PAGE AND IN VIEW OF A SMALL NOTIN G AS OLD ACCOUNT AT THE END OF THE CALCULATION ON FAIR EST IMATE IT CAN BE SAID THAT AN AMOUNT OF ` 20 LAKHS IS UNEXPLAINED EX PENDITURE OUT OF ` 30 85 500/- MENTIONED ON THIS PAGE. WE FAIL TO UNDERSTAND AS TO WHEN NO DATE IS MENTIONED AT ALL ON THIS PAGE 56 OF IT(SS)-48 & 85/DEL/2006 37 ANNEXURE A-4 HOW ANY ADDITION ON THE BASIS OF THIS PAGE CAN BE MADE IN THE BLOCK ASSESSMENT PROCEEDINGS UNLESS IT IS ESTABLISHED THAT THIS IS RELATED TO THE BLOCK PERIO D. HENCE WE HOLD THAT ON THE BASIS OF THIS PAGE 46 OF ANNEXURE A-4 CONTAINING NOTINGS OF AN AMOUNT OF ` 30 85 500/- NO ADDITION C AN BE MADE IN THE BLOCK ASSESSMENT OF THE ASSESSEE. ON THE BA CK SIDE OF THIS PAGE 46 OF ANNEXURE A-4 TOTAL AMOUNT HAS BEEN MENTI ONED AS ` 35.85 LAKHS AND THERE IS NO DATE MENTIONED ON THE B ACK SIDE ALSO. FOLLOWING TWO TERMS ARE ALSO MENTIONED ON THE BACK SIDE OF PAGE 46 I.E. ESTIMATE AND OLD A/C. SINCE NO DATE IS MENTIONED EITHER ON THE FRONT SIDE OR ON THE BACK SIDE OF PAG E 46 OF ANNEXURE A-4 WE HOLD THAT ON THE BASIS OF THIS PAGE NO ADDITION CAN BE MADE IN THE COURSE OF BLOCK ASSESSMENT OF TH E ASSESSEE. SIMILARLY ON PAGE 47 OF ANNEXURE A-4 ALSO NO DATE HAS BEEN MENTIONED AND HENCE ON THE BASIS OF THIS PAGE ALSO NO ADDITION CAN BE MADE. ON PAGE 48 OF ANNEXURE A-4 WHERE AN A MOUNT OF ` 6.93 LAKHS HAS BEEN MENTIONED A CLEAR DATE HAS B EEN MENTIONED I.E. SETTLED ON 8.7.1998. THE DATE 8.7.1 998 FALLS WITHIN THE BLOCK PERIOD AND HENCE WE ARE OF THE CONSIDERE D OPINION THAT TO THIS EXTENT THE ADDITION MADE BY THE AO AND CON FIRMED BY THE CIT(A) IS JUSTIFIED. WE THEREFORE CONFIRM THE AD DITION OF ` 6.93 LAKHS OUT OF TOTAL ADDITION OF ` 44 47 500/- MADE BY THE AO ON THE BASIS OF THESE PAGES OF SEIZED MATERIAL. SINCE TH IS ADDITION OF ` 6.93 LAKHS WAS CONFIRMED BY THE CIT(A) ALSO WE REJ ECT GROUND NO.9 OF THE REVENUES APPEAL WHEREAS GROUND NO.1 OF THE ASSESSEES APPEAL IS ALLOWED AND GROUND NO.2 OF ASS ESSEES APPEAL IS REJECTED. IT(SS)-48 & 85/DEL/2006 38 41. GROUND NO.10 OF THE REVENUE AND GROUND NO.3 OF THE ASSESSEE ARE INTERCONNECTED WHICH READ AS UNDER:- GROUND NO.10 OF THE REVENUE :- DELETING THE ADDITION OF RS.24 LACS AS AGAINST RS. 30 LACS MADE ON ACCOUNT OF UNEXPLAINED EXPENDITURE. GROUND NO.3 OF THE ASSESSEE :- THAT THE LEARNED CIT(APPEALS) HAS ERRED BOTH IN LA W AS WELL AS IN FACTS OF THE CASE IN SUSTAINING AN AD DITION OF RS.6.00 LACS OUT OF A TOTAL ADDITION OF RS.30.00 LACS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF RECEIPT OF LOAN FROM MRS.KRISHNA PAHUJA WHICH STOOD DISCLOSED TO THE DEPARTMENT IN THE STATEMENT OF AFFAIRS FURNISHE D BY THE ASSESSEE IN THE REGULAR COURSE. THAT THE LEARNED CIT(APPEALS) HAS FAILED TO APPRECIATE THAT THE AMOUNT OF RS.30.00 LACS WHICH WERE DULY DISCLOSED PRIOR TO SEARCH AND THAT NO ADDITION COULD BE MADE UNDER CHAPTER XIVB OF THE ACT IN RESPECT OF THE SAI D AMOUNT. 42 . BRIEF FACTS ARE THAT IT IS NOTED BY THE AO IN PARA 10 OF THE ASSESSMENT ORDER THAT PAGE 9 OF ANNEXURE A-6 SEIZED FROM THE RESIDENTIAL PREMISES OF THE ASSESSEE IS A RECEIPT D ATED 3.4.1997 SIGNED BY SHRI G.C.SHARMA SHOWING THAT THE ASSESSEE HAD PAID HIM ` 30 LAKHS. THE AO ASKED THE ASSESSEE TO EXPLA IN THE SOURCE OF THIS PAYMENT WITH NECESSARY DOCUMENTARY EVIDENCE . IN REPLY IT WAS SUBMITTED BEFORE THE AO THAT THIS AMOUNT WAS RECEIVED BY HIM FROM SMT.KRISHNA PAHUJA WIFE OF LATE SHRI I.P. PAHUJA R/O B- 37 SWAMI NAGAR NEW DELHI IN FEBRUARY-MARCH 1997. THE AO ASKED THE ASSESSEE TO PRODUCE SMT.KRISHNA PAHUJA WI TH PROOF OF IDENTITY AND CREDITWORTHINESS ON THE DATE OF ALLEGE D PAYMENT AND IT(SS)-48 & 85/DEL/2006 39 TO PROVE THE GENUINENESS OF THE SAME. THE AR OF TH E ASSESSEE FILED AN AFFIDAVIT SIGNED BY THE ASSESSEE IN WHICH HE STATED THAT THE ASSESSEE HAS RECEIVED THE AMOUNT OF ` 30 LAKHS FROM SMT.KRISHNA PAHUJA BUT THE AR OF THE ASSESSEE DID N OT PRODUCE SMT.KRISHNA PAHUJA. IT IS FURTHER NOTED BY THE AO THAT SUMMONS U/S 131 OF THE ACT WERE ISSUED FOR SMT.KRISHNA PAHU JA WHICH WERE RECEIVED BY MS.SHIKHA PAHUJA DAUGHTER IN LAW OF SM T.KRISHNA PAHUJA. IT IS FURTHER NOTICED BY THE AO THAT SMT.K RISHNA PAHUJA IS DAUGHTER OF THE ASSESSEE AND IN THIS WAY THE ASSES SEE AND SMT.KRISHNA PAHUJA ARE RELATIVE. IT IS ALSO NOTED BY THE AO THAT MS.PAHUJA INFORMED THE NOTICE-SERVER THAT HER MOTHER IN LAW WAS OUT OF STATION AND HAD GONE TO BHOPAL. THE AO ISSU ED SUMMONS AGAIN U/S 131 OF THE ACT TO SERVE ON SMT.KRISHNA PA HUJA. IT WAS REPORTED BY THE INSPECTOR WHO WAS DIRECTED TO SERVE THE SAID SUMMONS THAT ACCORDING TO INFORMATION GATHERED BY H IM FROM THE WATCHMAN THE FAMILY HAD LEFT ABOUT SIX MONTHS BACK AND THE SAID PREMISES WAS LOCKED. IT IS FURTHER NOTED BY T HE AO THAT SUBSEQUENTLY THE AR OF THE ASSESSEE FILED A BANK S TATEMENT OF SMT.KRISHNA PAHUJA IN AN ATTEMPT TO ESTABLISH HER CREDITWORTHINESS. IT IS NOTED BY THE AO THAT THIS BANK STATEMENT IS FOR THE PERIOD 1.5.1996 TO 13.7.1996 AND 1.1.199 7 TO 21.10.1997. THE AO STATED IN THE SAME PARA THAT SI NCE THE BANK STATEMENT DOES NOT COVER THE ENTIRE PERIOD UNDER DI SCUSSION IT DOES NOT ESTABLISH THE CREDITWORTHINESS OF SMT.KRIS HNA PAHUJA IN ANY WAY WHATSOEVER. ON THE BASIS OF THESE DISCUSSI ONS IN THE ASSESSMENT ORDER THE AO HELD THAT THE PAYMENT OF R S.30 LAKHS MADE BY THE ASSESSEE TO SHRI G.C.SHARMA ON 3.4.1997 IS ASSESSEES UNEXPLAINED EXPENDITURE U/S 69C OF THE A CT. HE MADE ADDITION OF THIS AMOUNT. BEING AGGRIEVED THE ASSE SSEE CARRIED IT(SS)-48 & 85/DEL/2006 40 THE MATTER IN APPEAL BEFORE THE CIT(A). THE CIT(A) DELETED THE ADDITION OF ` 24 LAKHS OUT OF TOTAL ADDITION MADE B Y THE AO OF ` 30 LAKHS. HE CONFIRMED THE ADDITION OF ` 6 LAKHS. NO W THE REVENUE IS IN APPEAL REGARDING DELETION OF ` 24 LAKHS WHERE AS ASSESSEE IS IN APPEAL REGARDING CONFIRMING THE ADDITION OF ` 6 LAKHS. 43. LEARNED DR OF THE REVENUE SUPPORTED THE ASSESSM ENT ORDER WHEREAS LEARNED AR OF THE ASSESSEE SUPPORTED THE OR DER OF CIT(A). IT IS ALSO SUBMITTED BY THE LEARNED AR OF THE ASSESSEE THAT OUT OF TOTAL PAYMENT OF ` 30 LAKHS TO SHRI G.C .SHARMA CASH AMOUNT OF ` 24 LAKHS WAS WITHDRAWN FROM THE BANK AC COUNT OF PROPRIETARY CONCERN OF THE ASSESSEE M/S ANAND GUPTA ASSOCIATES ON 3.4.1997 AND COPY OF BANK STATEMENT OF THAT FIRM IS AVAILABLE AT PAGE 158 OF THE PAPER BOOK. REGARDING THE PAYME NT OF THE BALANCE AMOUNT OF ` 6 LAKHS IT WAS SUBMITTED THAT THE SAME WAS OUT OF CASH IN HAND AVAILABLE WITH THE ASSESSEE AS PER BALANCE SHEET OF THE ASSESSEE AS ON 31.3.1997 COPY OF WHICH IS AVAILABLE ON PAGE 32 OF THE PAPER BOOK. IT IS POINTED OUT TH AT AS PER THIS BALANCE SHEET OF THE ASSESSEE THE CASH AMOUNT AVAI LABLE WAS ` 15.60 LAKHS AS ON 31.3.1997 AND PAYMENT IN QUESTION WAS MADE ON 3.4.1997 AND HENCE THE SOURCE OF ENTIRE PAYMENT HAS BEEN EXPLAINED AND THEREFORE THE ENTIRE ADDITION SHOULD HAVE BEEN DELETED BY THE CIT(A). 44. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS PERUS ED THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT AS PER THE REGULAR BALANCE SHEET OF THE ASSESSEE AS ON 31.3.1997 AS APPEARING ON PAG E 32 OF THE PAPER BOOK IT IS SEEN THAT IN THE LIABILITIES SIDE THE ASSESSEE IS IT(SS)-48 & 85/DEL/2006 41 SHOWING A LIABILITY OF ` 10 LAKHS PAYABLE TO SMT.KR ISHNA PAHUJA. THE CASH IN HAND HAS BEEN SHOWN AT ` 15.56 LAKHS AS ON 31.3.1997. THE ASSESSEE HAS ALSO ENCLOSED THE STAT EMENT OF AFFAIRS OF THE ASSESSEE AS ON 31.3.1998 COPY OF WH ICH IS AVAILABLE ON PAGE 28 OF THE PAPER BOOK. THE SAME WAS SUBMITT ED BY THE ASSESSEE TO THE AO ALONGWITH RETURN OF INCOME FOR A Y 1998-99 WHICH HAS BEEN FILED BY THE ASSESSEE PRIOR TO THE D ATE OF SEARCH. AS PER THE STATEMENT OF ASSETS AND LIABILITIES AS O N 31.3.1998 THE ASSESSEE IS SHOWING A PAYMENT OF ` 30 LAKHS TO SHRI G.C.SHARMA WHICH IS COVERED UNDER THE HEAD MOVABLE PROPERTY AND AT THE SAME TIME THE ASSESSEE IS SHOWING A LIABILITY OF ` 34 LAKHS PAYABLE TO SMT.KRISHNA PAHUJA. UNDER THIS FACTUAL POSITION WE ARE OF THE CONSIDERED OPINION THAT NO ADDITION CAN BE MADE IN THE COURSE OF BLOCK ASSESSMENT WITH REGARD TO THIS PAYM ENT OF ` 30 LAKHS TO SHRI G.C.SHARMA BECAUSE THE SAME WAS DULY SHOWN BY THE ASSESSEE IN HIS STATEMENT OF TOTAL ASSETS AS ON 31.3.1998 WHICH WAS SUBMITTED BY THE ASSESSEE BEFORE THE AO A LONGWITH HIS REGULAR RETURN OF INCOME FOR AY 1998-99 FILED BEFORE THE AO BEFORE THE DATE OF SEARCH I.E. 30.6.1998. HENCE W E HOLD THAT NO ADDITION CAN BE MADE ON THIS ACCOUNT AND DELETE THE ENTIRE ADDITION OF ` 30 LAKHS. ACCORDINGLY GROUND NO.10 OF THE REVENUE IS REJECTED WHEREAS GROUND NO.3 OF THE ASSESSEE IS ALLOWED. 45. GROUND NO.11 OF THE REVENUE READS AS UNDER:- DELETING THE ADDITION OF RS.1.30 LACS MADE ON ACCOUNT OF RECEIPTS OF AIR TICKETS FROM M/S BPL TRA VELS PVT.LTD. ON THE BASIS OF MOU BETWEEN M/S BPL PVT.LT D. AND THE ASSESSEE. IT(SS)-48 & 85/DEL/2006 42 46. BRIEF FACTS ARE THAT IT IS NOTED BY THE AO IN P ARA 11 OF THE ASSESSMENT ORDER THAT PAGE 12 AND 13 OF ANNEXURE A-6 SEIZED FROM THE RESIDENTIAL PREMISES OF THE ASSESSEE IS A MOU EXECUTED BY M/S V.P.L. TRAVELS PVT.LTD. IN FAVOUR OF THE ASS ESSEE IN WHICH IT IS MENTIONED THAT THE SAID COMPANY WOULD PROVIDE AI R TICKETS WORTH ` 1.30 LAKHS TO THE ASSESSEE WITHOUT ANY CHAR GE. IT IS FURTHER NOTICED BY THE AO THAT THIS MOU WAS EXECUTE D ON 15.7.1998 BETWEEN THIS COMPANY AND M/S SHIKHA PROPE RTIES IN WHICH THE ASSESSEE IS A DIRECTOR. IT IS FURTHER NO TED BY THE AO THAT A COPY OF THIS AGREEMENT TO SELL IS DULY SIGNE D BY SHRI Y.P.BHATIA ON BEHALF OF M/S V.P.L.TRAVEL PVT.LTD. A ND THE ASSESSEE AND TWO WITNESSES AND WAS FOUND AND SEIZED FROM THE ASSESSEES RESIDENTIAL PREMISES AS PER PAGES 14 TO 16 OF ANNEX URE A-6. THE AO ASKED THE ASSESSEE TO EXPLAIN THE CONTENTS OF TH IS DOCUMENT AND RECONCILE IT WITH ASSESSEES BOOKS OF ACCOUNT. IN REPLY IT WAS SUBMITTED BY THE ASSESSEE THAT THE TERMS OF THE MOU COULD NOT BE FULFILLED AND THEREFORE THE SAID AMOUNT CANNOT BE CONSIDERED AS ASSESSEES UNDISCLOSED INCOME. THEREAFTER IT W AS STATED BY THE AO IN ASSESSMENT ORDER THAT NO DOCUMENTARY EVID ENCE WAS FILED TO SUBSTANTIATE ITS CONTENTION. THE AO MADE ADDITION OF THIS AMOUNT OF ` 1.30 LAKHS BY ALLEGING UNDISCLOSED RECE IPTS. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER IN APPEA L BEFORE THE CIT(A) WHO HAS DELETED THIS ADDITION AND NOW THE R EVENUE IS IN APPEAL BEFORE US. 47. LEARNED DR OF THE REVENUE SUPPORTED THE ASSESSM ENT ORDER WHEREAS THE LEARNED AR SUPPORTED THE ORDER OF CIT(A ). IT WAS ALSO SUBMITTED THAT THE MOU DID NOT MATERIALIZE AND NO AIR TICKETS WERE RECEIVED. IT WAS ALSO SUBMITTED THAT AS PER T HE WRITTEN IT(SS)-48 & 85/DEL/2006 43 SUBMISSIONS SUBMITTED BY THE ASSESSEE BEFORE THE AO BEING LETTER DATED 19.3.2005 AVAILABLE AT PAGES 96 TO 110 OF THE PAPER BOOK IT WAS SUBMITTED THAT THE MOU ENTERED INTO BY THE ASSESSEE WITH M/S V.P.L.TRAVEL PVT.LTD. IS A PART OF AGREEME NT TO SELL SIGNED ON THE SAME DATE BUT THE TERMS OF THE SAID MOU COUL D NOT BE FULFILLED AND HENCE THERE IS NO INCOME. OUR ATTEN TION WAS DRAWN TO PARA 29.1 OF THIS LETTER WHICH IS AVAILABLE ON P AGE 108 OF THE PAPER BOOK. 48. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS PERUS ED THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THIS ADDITION HAS BEEN DELETED BY THE CIT(A) ON THIS BASIS THAT A CONFIRMATION FROM T HE ASSESSEE WAS FILED BEFORE HIM CLEARLY STATING THAT TILL DATE THE ASSESSEE OR HIS GROUP COMPANIES DID NOT HAVE ANY TRANSACTION WI TH M/S V.P.L.TRAVEL PVT.LTD. OR ITS MANAGING DIRECTOR SHRI Y.P.BHATIA AND HENCE THERE WAS NO QUESTION OF ANY AIR TICKETS HAV ING BEEN RECEIVED. DESPITE THIS FINDING OF CIT(A) THE REVE NUE HAS NOT BROUGHT ANY MATERIAL TO SHOW THAT SUCH MOU BETWEEN M/S SHIKHA PROPERTIES AND M/S V.P.L.TRAVEL PVT.LTD. REGARDING SALE OF PROPERTY WAS ACTED UPON. IF THE MAIN AGREEMENT FOR SALE OF PROPERTY WAS NOT ACTED UPON THERE IS NO QUESTION OF RECEIVING A NY AIR TICKETS BY THE ASSESSEE FROM THAT COMPANY AS PER THE MOU IN QUESTION. WE THEREFORE FIND NO REASON TO INTERFERE IN THE O RDER OF CIT(A) ON THIS ISSUE. ACCORDINGLY GROUND NO.11 OF THE REVEN UE IS ALSO REJECTED. 49. GROUND NO.12 OF THE REVENUE READS AS UNDER:- IT(SS)-48 & 85/DEL/2006 44 DELETING THE ADDITION OF RS.5 LACS MADE ON ACCOUNT OF UNEXPLAINED RECEIPT/ADVANCE IN RELATION TO CERTAIN PROPERTY. 50. BRIEF FACTS AS NOTED BY THE AO IN PARA 13 OF TH E ASSESSMENT ORDER ARE THAT PAGE 53 OF ANNEXURE A-2 IMPOUNDED DUR ING THE SURVEY OPERATION CONDUCTED AT BUSINESS PREMISES OF M/S SHIKHA PROPERTIES IS RECEIPT AMOUNTING TO ` 5 LAKHS SIGNED BY THE ASSESSEE. IT IS ALSO STATED BY THE AO THAT IT IS M ENTIONED ON THIS PAGE THAT THIS AMOUNT HAS BEEN RECEIVED FROM SHRI V IJAY KUMAR GAMBHIR AS ADVANCE IN RELATION TO CERTAIN PROPERTY. THE AO ASKED THE ASSESSEE TO RECONCILE THIS RECEIPT. IN R EPLY IT WAS SUBMITTED BY THE ASSESSEE THAT THE DEAL WITH SHRI V IJAY KUMAR GAMBHIR DID NOT MATERIALIZE AND NO PAYMENT OF ` 5 L AKHS WAS RECEIVED BY HIM. IT IS ALSO OBSERVED BY THE AO THA T SHRI VIJAY KUMAR GAMBHIR HAD APPEARED BEFORE ADIT(INV) UNIT-I II(3) NEW DELHI WHERE HE DENIED HAVING MADE ANY PAYMENT TO TH E ASSESSEE. THEREAFTER IT IS STATED BY THE AO THAT IT IS AN ATTEMPT BY THE ASSESSEE TO INTRODUCE HIS UNACCOUNTED MONEY IN THE NAME OF SHRI VIJAY KUMAR GAMBHIR. ON THIS BASIS THE AO ADDED THIS AMOUNT OF ` 5 LAKHS BY ALLEGING THE UNDISCLOSED INC OME OF THE ASSESSEE. BEING AGGRIEVED THE ASSESSEE CARRIED TH E MATTER IN APPEAL BEFORE THE CIT(A) WHO HAS DELETED THIS ADDIT ION AND NOW THE REVENUE IS IN APPEAL BEFORE US. 51. LEARNED DR SUPPORTED THE ASSESSMENT ORDER WHERE AS LEARNED AR SUPPORTED THE ORDER OF CIT(A). IT WAS A LSO SUBMITTED THAT NO TRANSACTION WAS ACTUALLY DONE AS ORIGINAL R ECEIPT ITSELF WAS SEIZED FROM THE ASSESSEE AND THIS FACT HAS BEEN CONFIRMED IT(SS)-48 & 85/DEL/2006 45 BY SHRI VIJAY KUMAR GAMBHIR TO THE ADIT(INV) UNIT-I II(3) THAT NO PAYMENT WAS MADE BY HIM. 52. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS PERUS ED THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT A CLEAR FINDING IS GIVEN BY THE CIT(A) IN PARA 20 OF HIS ORDER WHEREIN IT HAS BEEN OBSERVED BY HIM THAT SHRI VIJAY KUMAR GAMBHIR HAS ADMITTED BEFO RE THE ADIT(INV) THAT NO PAYMENT HAD BEEN MADE BY HIM TO T HE ASSESSEE. WE ALSO FIND THAT ORIGINAL RECEIPT OF ` 5 LAKHS ITSELF HAS BEEN FOUND AND SEIZED IN THE COURSE OF SEARCH. IF ANY PERSON MAKES A PAYMENT HE WILL CARRY THE ORIGINAL RECEIPT FROM THE RECEIVER AND ORIGINAL RECEIPT CANNOT BE FOUND FROM THE RECEIVER. SINCE IN THE PRESENT CASE THE ORIGINAL RECEIPT ITS ELF WAS FOUND AND SEIZED FROM THE POSSESSION OF THE ASSESSEE THE CON TENTION OF THE ASSESSEE HAS TO BE ACCEPTED THAT THE AMOUNT IN QUES TION WAS NOT RECEIVED BY THE ASSESSEE. THIS FACT IS FURTHER SUP PORTED BY THE STATEMENT OF SHRI VIJAY KUMAR GAMBHIR BEFORE THE AD IT(INV) AND CONSIDERING THESE FACTS WE FIND NO REASON TO INTER FERE IN THE ORDER OF CIT(A) ON THIS ISSUE. WE THEREFORE UPHO LD HIS ORDER ON THIS ISSUE. GROUND NO.12 OF THE REVENUE IS ALSO RE JECTED. 53. NOW THE ONLY REMAINING GROUND IS GROUND NO.4 A S PER ASSESSEES APPEAL WHICH IS AS UNDER:- THAT THE LEARNED CIT(APPEALS) HAS ERRED BOTH IN LA W AS WELL AS IN FACTS OF THE CASE IN UPHOLDING THE AD DITION OF RS.2.00 LACS MADE BY THE UNDISCLOSED INCOME OF T HE APPELLANT BY THE ASSESSING OFFICER ON ACCOUNT OF IT(SS)-48 & 85/DEL/2006 46 PAYMENT MADE TO ONE ANIL KAUSHIK BY SHRI M.S.GILL. THAT THE IMPUGNED TRANSACTION STOOD DULY REFLECTED IN THE STATEMENT OF AFFAIRS FILED BY THE APPELLANT AND WAS THEREFORE OUTSIDE THE AMBIT OF CHAPTER XIVB OF THE ACT. 54. BRIEF FACTS ARE THAT IT IS NOTED BY THE AO IN P ARA 12 OF THE ASSESSMENT ORDER THAT PAGES 12 TO 15 OF ANNEXURE A-2 IMPOUNDED DURING THE SURVEY OPERATION CONDUCTED AT BUSINESS PREMISES OF M/S SHIKHA PROPERTIES IS A COPY OF COMP LAINT FROM THE ASSESSEE ADDRESSED TO SHO CONNAUGHT PLACE POLICE S TATION NEW DELHI. IN THIS LETTER THE ASSESSEE HAS CLAIMED TH AT HE HAS PAID A SUM OF ` 2 LAKHS TO A PERSON NAMELY SHRI ANIL KAUSH IK WHO CLAIMED TO HAVE CLOSE LINK WITH SHRI AJIT JOGI. TH E AO ASKED THE ASSESSEE TO EXPLAIN THIS PAYMENT OF ` 2 LAKHS TO SH RI ANIL KAUSHIK. IT WAS SUBMITTED BY THE ASSESSEE BEFORE THE AO THAT THIS AMOUNT WAS GIVEN TO THE ASSESSEE BY SHRI M.S.GILL. SINCE THE ASSESSEE COULD NOT PRODUCE ANY EVIDENCE IN SUPPORT OF HIS CO NTENTION THE AO WAS NOT SATISFIED AND HE MADE ADDITION OF ` 2 LA KHS ON THIS COUNT. BEING AGGRIEVED THE ASSESSEE CARRIED THE M ATTER IN APPEAL BEFORE THE CIT(A) BUT WITHOUT SUCCESS AND NO W THE ASSESSEE IS IN APPEAL BEFORE US. 55. IT WAS SUBMITTED BY THE LEARNED AR THAT ASSESSE E WAS ONLY A MEDIATOR AND NO PAYMENT WAS MADE BY HIM OUT OF HI S OWN MONEY. IT IS ALSO SUBMITTED BY HIM THAT NO MATERIA L IS ON RECORD SHOWING THAT MONEY BELONGED TO THE ASSESSEE. IT IS ALSO SUBMITTED THAT CONFIRMATION OF SHRI M.S.GILL WAS FI LED BEFORE THE AO AND CIT(A) AND COPY IS AVAILABLE AT PAGE 190 OF THE PAPER IT(SS)-48 & 85/DEL/2006 47 BOOK. HE ALSO SUBMITTED THAT SHRI M.S.GILL HAS SIN CE EXPIRED AND CANNOT BE EXAMINED. 56. AS AGAINST THIS LEARNED DR OF THE REVENUE SUPP ORTED THE ORDERS OF THE AUTHORITIES BELOW. 57. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS PERUS ED THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT IT IS NOT IN DISPU TE THAT AN AMOUNT OF ` 2 LAKHS WAS GIVEN BY THE ASSESSEE TO SHRI KAUS HIK. THE DISPUTE IS AS TO WHETHER THIS PAYMENT WAS MADE BY T HE ASSESSEE OUT OF HIS OWN UNACCOUNTED MONEY OR OUT OF MONEY RE CEIVED BY HIM FROM M/S M.S.GILL BUILDERS. AS PER LETTER DATE D 16.1.2002 FROM M/S M.S.GILL BUILDERS COPY OF WHICH IS AVAILA BLE AT PAGE 190 OF THE PAPER BOOK IT IS SEEN THAT IT IS STATED BY SHRI M.S.GILL IN THIS LETTER THAT HE HAS GIVEN THIS MONEY OF ` 2 LAKHS TO THE ASSESSEE FOR PAYMENT TO SHRI ANIL KAUSHIK FOR ASSIGNMENT OF CIVIL CONSTRUCTION WORK AT CHATTISGARH. REGARDING THIS L ETTER OF SHRI M.S.GILL IT HAS BEEN STATED BY THE AO IN THE ASSES SMENT ORDER THAT IT IS AN AFTER THOUGHT BUT THE AO HAD NOT TAKE N THE BOTHERATION TO EVEN EXAMINE SHRI M.S.GILL REGARDING THIS CONFIRMATION BY HIM. EVEN LEARNED CIT(A) HAS NOT C ONSIDERED IT NECESSARY TO EXAMINE SHRI M.S.GILL IN THIS REGARD. WE FAIL TO UNDERSTAND AS TO WHEN THE ASSESSEE HAS EXPLAINED TH E SOURCE OF MONEY IN HIS HANDS BY WAY OF FILING A CONFIRMATORY LETTER FROM A PERSON HOW THE SAME CAN BE REJECTED EVEN WITHOUT E XAMINING THE PERSON. NOW THAT EXAMINATION IS NOT POSSIBLE B ECAUSE SHRI M.S.GILL HAD ALREADY PASSED AWAY AND THEREFORE WE CANNOT RESTORE IT BACK TO THE FILE OF THE AO FOR FRESH DEC ISION AFTER IT(SS)-48 & 85/DEL/2006 48 EXAMINING SHRI M.S.GILL AND WE HAVE TO DECIDE THE I SSUE ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. IN THE LIGH T OF CONFIRMATION FROM SHRI M.S.GILL THAT THE AMOUNT IN QUESTION OF ` 2 LAKHS WAS GIVEN BY HIM TO THE ASSESSEE FOR ONWARD PAYMENT TO SHRI ANIL KAUSHIK WE ARE OF THE CONSIDERED OPINION THAT NO A DDITION ON THIS ACCOUNT CAN BE MADE IN THE HANDS OF THE ASSESSEE AN D THEREFORE WE DELETE THE SAME. GROUND NO.4 OF THE ASSESSEES APPEAL IS ALLOWED. 58. IN THE RESULT THE APPEAL OF THE REVENUE IS DIS MISSED WHEREAS THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWE D. DECISION PRONOUNCED IN THE OPEN COURT ON 3 RD DECEMBER 2010. SD/- SD/- (RAJPAL YADAV) (A.K.GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 03.12.2010. VK. COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT ASSISTANT REGISTRAR IT(SS)-48 & 85/DEL/2006 49