Shri Chandrakant A. Gandhi, Ahmedabad v. The ACIT., Circle-3,, Ahmedabad

ITSSA 89/AHD/2006 | misc
Pronouncement Date: 08-01-2010 | Result: Partly Allowed

Appeal Details

RSA Number 8920516 RSA 2006
Assessee PAN TFROM1991A
Bench Ahmedabad
Appeal Number ITSSA 89/AHD/2006
Duration Of Justice 3 year(s) 8 month(s) 10 day(s)
Appellant Shri Chandrakant A. Gandhi, Ahmedabad
Respondent The ACIT., Circle-3,, Ahmedabad
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 08-01-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted C
Tribunal Order Date 08-01-2010
Date Of Final Hearing 06-11-2009
Next Hearing Date 06-11-2009
Assessment Year misc
Appeal Filed On 28-04-2006
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C BEFORE SHRI T.K.SHARMA JUDICIAL MEMBER AND SHRI D.C.AGRAWAL ACCOUNTANT MEMBER DATE OF HEARING : 06/11/091 DRAFTED ON: 14/1 2/09 1. IT(SS)A NO.89/AHD/2006 2. IT(SS)A NO.90/AHD/2006 3. IT(SS)A NO.91/AHD/2007 BLOCK PERIOD 01/04/86 TO 01/08/96 1. CHANDRAKANT A.GANDHI 119 BRAHMAPRUNI POLE PATASA POLE GANDHI ROAD AHMEDABAD PAN : - 2. VINOD C.GANDHI DHANLAXMI FARM TAL.DASCROI AHMEDABAD 3. SUNIL C GANDHI DHANLAXMI FARM TAL.DASCROI AHMEDABAD VS. 1. THE ACIT CIRCLE-3 AHMEDABAD 2. THE JCIT (OSD) CIRCLE-7 AHMEDABAD 3.-DO- PAN/GIR NO. : (APPELLANTS) .. (RESPONDENTS) ASSESSEE BY: SHRI S.N. DIVATIA REVENUE BY: SHRI SHELLEY JINDAL CIT-DR O R D E R PER T.K. SHARMA JUDICIAL MEMBER :- THESE ARE THREE APPEALS FILED BY THE THREE ASSESSE ES OF THE SAME GROUP AGAINST THE ORDERS OF THE ASSESSING OFFICERS WHEREIN HE HAS MADE THE ADDITION IN BLOCK ASSESSMENT ON THE BASIS OF DI ARIES SEIZED FROM THE POSSESSION OF SHRI CHANDRAKANT A.GANDHI WHILE HE WAS FOUND IN THE IT(SS)A NOS.89 90 & 91/AHD/2006 BLOCK PERIOD : 1/4/86 TO 1/8/96 - 2 - PREMISE OF LT SHROFF GROUP WHICH WAS SEARCHED BY TH E DEPARTMENT ON 01/08/1998. 2. THE BRIEF FACTS OF THE CASE ARE THAT LT SHROFF G ROUP WAS SEARCHED BY INCOME TAX DEPARTMENT ON 01/08/1998. DURING THE COURSE OF SEARCH AND SEIZURE OPERATION AT THE MANEK CHAWK OFFICE OF THEIR GROUP ASSESSEE SHRI CHANDRAKANT A. GANDHI WAS FOUND PRESENT. HE WAS ALSO SEARCHED AND FIVE NOTE BOOKS WERE FOUND FROM HIS POSSESSION WHICH WERE SEIZED BY THE DEPARTMENT. ACCORDINGLY PROCEEDINGS U/S.1 58BC OF THE I.T. ACT 1961 WERE INITIATED AGAINST HIM. THE ASSESSMENT O RDER WAS PASSED ORIGINALLY FOR THE BLOCK PERIOD FROM 01/04/1986 TO 01/08/1996 ON 31/07/1997 ON AN UNDISCLOSED INCOME OF RS.42 24 220 /-. THIS ORDER WAS SET ASIDE BY THE TRIBUNAL IN IT(SS) NO.163 TO 165/A HD/1997 ON 10/11/2003 GIVING DIRECTION OF PROVIDING OPPORTUNIT Y TO ASSESSEE TO CROSS-EXAMINE S/SHRI ATUL PATEL AND KALPESH THAKKAR WHOSE STATEMENTS WERE RELIED ON WHILE FRAMING ASSESSMENT ORDER. 3. THE FIVE NOTE BOOKS SEIZED FROM THE POSSESSION O F SHRI CHANDRAKANT A.GANDHI REFLECTED RECORD OF DEPOSIT OF MONEY WITH LT SHROFF GROUP AND INTEREST CREDITED THEREON. THE A SSESSEE (SHRI CHANDRAKANT A.GANDHI) DENIED THAT IT HAD ANYTHING TO DO WITH ANY IT(SS)A NOS.89 90 & 91/AHD/2006 BLOCK PERIOD : 1/4/86 TO 1/8/96 - 3 - DEPOSIT OF MONEY WITH LT SHROFF GROUP. ACCORDING T O HIM IT WAS A SELF MADE ENTRIES BY THE ASSESSEE ON THE BASIS OF MONEY RECEIVED BY HIM FROM HIS CHILDREN/RELATIVES. THE DEPARTMENT HOWEVE R RECORDED THE STATEMENT OF SHRI ATUL PATEL WHO WAS THE MANAGER OF MANEK CHAWK OFFICE OF LT SHROFF GROUP WHEREAS KALPESH THAKKAR IS ANOTHER DEPOSITOR LIKE ASSESSEE. THE DEPARTMENT ALSO RECORDED STATE MENTS OF VARIOUS OTHER DEPOSITORS WHOSE RECORDS WERE FOUND FROM THE POSSES SION OF LT SHROFF GROUP AND CAME TO THE CONCLUSION THAT ASSESSEE AND SIMILAR OTHER PERSONS ARE DEPOSITING MONEY WITH LT SHROFF GROUP ON INTERE ST THEREON AND ALSO WITHDRAWING THEIR MONEY AS AND WHEN REQUIRED. THE LT SHORFF GROUP WERE ISSUING PASSBOOKS TO SUCH DEPOSITORS. FIVE OF SUCH NOTE BOOKS WERE FOUND FROM THE POSSESSION OF THE ASSESSEE. THE MAN AGER OF LT SHROFF GROUP I.E. SHRI ATUL PATEL HAS BEEN MAKING ENTRIE S IN THESE PASSBOOKS AT THE TIME OF RECEIPT AND PAYMENTS OF MONEY AND CRED ITING OF INTEREST IN THE BEGINNING OF THE MONTH. SINCE DEPARTMENT HAD RELIED ON THE STATEMENT OF SHRI ATUL PATEL AND SHRI KALPESH THAKK AR THE TRIBUNAL THOUGHT IT PROPER TO PROVIDE AN OPPORTUNITY TO THE ASSESSEE TO CROSS- EXAMINE THESE PERSONS. THE RELEVANT PART OF THE OR DER OF THE TRIBUNAL REFERRED BY THE ASSESSING OFFICER IS AS UNDER:- IT(SS)A NOS.89 90 & 91/AHD/2006 BLOCK PERIOD : 1/4/86 TO 1/8/96 - 4 - WE ALSO FAIL TO UNDERSTAND THAT AS PER DEPARTMENTA L VERSION ASSESSEE CHANDRAKANT THAKKAR WAS PRESENT IN THE PRE MISES OF L.T.SHROFF ON 1.8.1996 AT THE TIME OF SEARCH AND ST ATEMENT OF MANGER ATUL PATEL WERE RECORDED THE SAME DAY. AS SESSEE COULD BE ALLOWED TO CONFRONT THE SAID ATUL PATEL THEN AND THERE BUT SAME WAS NOT DONE BY THE APPELLANT. THUS THE FACT EMER GES THAT STATEMENTS OF ATUL PATEL AND KALPESH THAKKAR WHOSE STATEMENTS DATED 1.8.96 AND 2.8.96 RESPECTIVELY WERE ALSO RELI ED BY A.O.WHILE MAKING THE ADDITION IN QUESTION BUT SAME WERE NOT S UPPLIED TO ASSESSEE AT ANY POINT OF TIME. MOREOVER ASSESSEE WAS ALSO NOT GIVEN OPPORTUNITY TO CROSS-EXAMINE ABOVE SAID ATUL PATEL AND KALPESH THAKKER AT ANY POINT OF TIME. IT IS IN VIO LATION OF PRINCIPLES OF NATURAL JUSTICE BECAUSE OPPORTUNITY OF HEAVING IN ESSENCE OF JUSTICE. 4. THE ASSESSING OFFICER PROVIDED THIS OPPORTUNITY TO THE ASSESSEE SHRI ATUL PATEL WAS SUBJECT TO CROSS-EXAMINATION BU T SHRI KALPESH THAKKER SEEMS TO HAVE NOT BEEN TRACED OUT. AFTER C ARRYING OUT EXTENSIVE ENQUIRY THE ASSESSING OFFICER GAVE FOLLOWING FINDI NG:- THE FACT THAT THE DIARIES BELONG TO THE L T GROUP IS REINFORCED FROM THE FOLLOWING FINDINGS DURING THE SEARCH ACTION. IT(SS)A NOS.89 90 & 91/AHD/2006 BLOCK PERIOD : 1/4/86 TO 1/8/96 - 5 - (I) THE L.T. SHROFF GROUP IS CARRYING OUT BUS INESS OF ACCEPTING DEPOSITS IN CASH ON INTEREST AND ADVANCING LOANS IN CASH BY CHARGING INTEREST; ON LARGE SCALE FROM FOUR DIFFERENT OFFICE S SITUATED AT MODASA MANEKCHAWK AHMEDABAD MANHATTON BUILDING MITHKAHL I AHMEDABAD AND ZAVERI BAZAR OFFICE AT BOMBAY FOR YEARS. (II) DURING THE COURSE OF SEARCH AND SEIZURE OPERATION CARRIED OUT AT VARIOUS PREMISES OF THE GROUP A NUMBER OF DOCUMENT ARY EVIDENCES HAVE BEEN FOUND AT EACH AND EVERY OFFICE. (III) STATEMENT OF VARIOUS PERSONS WHO WERE IN VOLVED IN THE BUSINESS WERE RECORDED SIMULTANEOUSLY AT VARIOUS OFFICES AND AT ALL FOUR DIFFERENT OFFICES THE EMPLOYEE INCHARGE ADMITTED THE FACT OF CARRYING OUT THIS BUSINESS. (IV) AT ALL DIFFERENT PLACES THE SAME PRACTICE IS FOLLOWED I.E. OF ISSUING A PASS BOOK TO THE CLIENT FROM WHOM THE DEPOSITS AR E ACCEPTED WHEREIN THE DEPOSITORS AND WITHDRAWALS ARE ENTERED BY SUPP RESSING 'OOOS'. THE PRACTICE IS UNIFORMLY FOLLOWED AT FOUR DIFFEREN T OFFICES AND IN- CHARGE OF ALL FOUR OFFICES OF L.T. SHROFF GROUP WH O WERE ALSO SIGNING THE PASS BOOKS ISSUED TO CLIENTS IN FRONT OF ENTRIE S WRITTEN ADMITTED THIS FACT [AT MANEKCHAWK OFFICE SHRI ATUL N. PATEL IN H IS STATEMENT RECORDED ON 1-8-96(Q.NO.15) AT MITHAKHALI OFFICE SHRI MAYU R BRAHMBHATT IN Q.NO.12 & 13 OF HIS STATEMENT DATED 1-8-96 SHRI HA RSHAD P. THAKKAR AT MODASA OFFICE IN Q. NO.L0 OF RESTATEMENT DATED 2 -8-96 WHICH IS CONFIRMED BY ANOTHER EMPLOYEE SHRI KANUBHAI IN HIS STATEMENT RECORDED ON 2-8-96 (Q.NO.23) SHRI SHAILESH GOR AT BOMBAY OFFICE IN Q. NO.7 TO 10 OF HIS STATEMENT DATED 1-8-96]. (V) THE MANNER IN WHICH PASS BOOK IS ISSUED A ND ENTRIES ARE MADE IS UNIFORM IN ALL THE OFFICES AND STATEMENTS OF ALL TH E ABOVE REFERRED PERSONS DO NOT HAVE ANY CONTRADICTION. IMPORTANTLY ALL PERSONS SAY THAT THEY ARE ADOPTING THIS SYSTEM ON INSTRUCTION OF EI THER SHRI KALPESH THAKKAR OR SHRI LAXMINARAYAN T. THAKKAR. SHRI KALPE SH THAKKAR IN HIS STATEMENT RECORDED ON 2-8-96 CONFIRMED IN RESPONSE TO Q. NO.24 THAT THE ABOVE MENTIONED SYSTEM OF ISSUING PASSBOOK AND MAKING ENTRIES THEREIN IS UNIFORMLY FOLLOWED IN HIS OFFICES AND TH E POWER OF ISSUING SUCH PASS BOOKS IS ALSO ENTRUSTED TO SHRI ATUL N. P ATEL SHRI MAYUR BRAHMBHATT SHRI SHAILESH GOT AND SHRI HARSHAD P. T HAKKAR WHO HAD INDEPENDENTLY CONFIRMED THIS MODUS OPERANDI IT(SS)A NOS.89 90 & 91/AHD/2006 BLOCK PERIOD : 1/4/86 TO 1/8/96 - 6 - (VI) ASSESSEE SHRI CHANDRAKANT A. GANDHI IS FO UND IN POSSESSION OF FIVE SUCH PASS BOOKS WHICH ARE EXACTLY THE SAME AS ISSU ED BY L.T. SHROFF GROUP IMPORTANTLY AT THE OFFICE OF L.T. SHROFF GRO UP. 7.6 CERTAIN OTHER FACTS WHICH ALSO PROVE THAT THE P ASS BOOKS SEIZED FROM THE POSSESSION OF ASSESSEE WERE ISSUED BY L.T. SHRO FF ONLY AND ENTRIES IN THESE PASS BOOKS REPRESENT DEPOSITS MADE WITH L.T. SHROFF IN THOUSANDS ('000') ARE AS FOLLOWS:- (I) IF THE PASS BOOKS REPRESENTED ASSESSEE'S RECORD OF SMALL EXPENDITURE OR TRANSACTION THEN WHY HE WOULD HAVE BROUGHT THESE PASS BOOKS TO THE OFFICE OF L.T. SHROFF. AT THE TIME OF SEARCH ASSES SEE HAD STATED THAT HE HAD COME TO L.T. SHROFFS OFFICE FOR CHEQUE DISCOUNTING. HOWEVER WHEN HIS STATEMENT WAS RECORDED ON 1-7-97 IN Q NO.8 HE HAS ADMITTED THAT HE HAD NEVER GOT ANY CHEQUE DISCOUNTED FROM L.T. SHROFF BE FORE THE DATE OF SEARCH. FURTHER HE COULD NOT TELL AS TO WHICH CHEQ UE HE HAD TO GET DISCOUNTED FROM L.T. SHROFFS OFFICE. IMPORTANTLY A T THE TIME OF SEARCH ALSO HE WAS NOT FOUND IN POSSESSION OF ANY CHEQUE. (II) ON PERUSAL OF THESE PASS BOOKS IT IS FOU ND THAT IN FIRST WEEK OF EVERY MONTH THERE ARE ENTRIES OF INTEREST PAID FOR THE PR ECEDING MONTH. MOSTLY SUCH ENTRIES ARE MADE ON FIRST DATE OF THE MONTH. (III) IMPORTANTLY THE SEARCH ON L.T. SHROFF G ROUP WAS ALSO CARRIED OUT ON 1-8-96. THEREFORE ASSESSEE HAD FOR ALL POSSIBI LITIES GONE THERE FOR GETTING INTERST THAT IS WHY HE HAD TAKEN ALL THE P ASSBOOKS TO L.T. SHROFFS OFFICE. (V) IN REPLY TO Q. NO.5 OF HIS STATEMENT RECOR DED ON 1-7-97 ASSESSEE HAS CATEGORICALLY STATED THAT HE DOES NOT MAINTAIN ANY ACCOUNT OR RECORDS EVEN IN RESPECT OF HIS AGRICULTURAL RECEIPTS AND EX PENDITURE WHICH ARE MUCH HIGHER THAN THE AMOUNTS MENTIONED IN THE PASS BOOKS. IF THE ASSESSEE'S CONTENTIONS ARE TO BE BELIEVED IF HE DO ES NOT MAINTAIN ANY RECORD EVEN FOR SUCH LARGE RECEIPTS AND EXPENDITURE IT IS VERY DIFFICULT TO BELIEVE THAT HE IS MAINTAINING THESE PASS BOOKS FOR HIS OWN RECORDS IN SUCH A METICULOUS FASHION. (V) ASSESSEE HAS ACCEPTED THAT HE KNEW L.T. S HROFF FOR 7-8 YEARS BECAUSE THEY WERE RESIDING IN THE SAME POLE (Q. NO. 3 & 4) IMPORTANTLY HE HAS TAKEN LOANS ALSO (TWICE) (RS. 1 50 0007- AND R S.1 00 000/- THROUGH CHEQUE) FROM L.T. SHROFF WHICH HE HAS ADMITTED IN R ESPONSE TO Q. NO.7 OTHERWISE ALSO SHOWS THE RELATIONSHIP BETWEEN L.T. SHROFF GROUP AND ASSESSEE. (VI) IMPORTANTLY ASSESSEE WAS NOT THE ONLY CL IENT BUT EXACTLY SAME PASS BOOKS WERE ALSO SEIZED FROM VARIOUS CLIENTS AT DIFF ERENT OFFICES OF L.T. IT(SS)A NOS.89 90 & 91/AHD/2006 BLOCK PERIOD : 1/4/86 TO 1/8/96 - 7 - SHROFF GROUP DURING THE COURSE OF SEARCH AND A NUMB ER OF PERSONS HAVE ADMITTED INDEPENDENTLY THAT SUCH PASS BOOKS WERE IS SUED TO THEM BY L.T. SHROFF GROUP AND IT REPRESENTED THEIR DEPOSITS IN C ASH IN THOUSANDS WITH L.T. SHROFT GROUP. FOR EXAMPLE 12 PASS BOOKS WERE SEIZED FROM RESIDENCE OF SHRI NARESH R. SHAH EMPLOYEE OF L.T. SHROFF GROUP AT MODASA (ANNEXURE A-4) OUT OF WHICH THREE PASS BOO KS WERE IN THE NAME OF SHRI NARESH R. SHAH ONLY AND HE HAD ADMITTED THA T THE PASS BOOKS REPRESENT HIS DEPOSITS WITH L.T. SHROFF GROUP IN TH OUSANDS. I. ONE PASS BOOK WAS SEIZED FROM ONE SHRI S UNIL C. THAKKAR AT MANEKCHAWK OFFICE WHICH WAS IN THE NAME OF HIS FAT HER SHRI CHANDRAKANT R. THAKKAR. SHRI SUNIL C. THAKKAR AND SHRI CHANDRA KANT R. THAKKAR HAVE ADMITTED THAT THE PASS BOOK REPRESEN6TED THEIR DEPO SITS WITH L.T. SHROFF GROUP IN CASH IN THOUSANDS. IMPORTANTLY SHRI CHAND RAKANT R. THAKKAR LIAS ALREADY FILED A RETURN OF INCOME U/S.158BBC OF THE I.T. ACT ON 17-6-1997 IN WHICH HE HAS PAID TADES ALSO ON THE UNDISCLOSED INCOME WHICH IS REPRESENTED BY HIS DEPOSIT WITH L.'T.SHROFF IN THE PASSBOOK. (A COPY OF THIS PASS BOOK IS ALSO ATTACHED WITH THIS ASSESSMENT ORD ER AND IS MARKED AS ANNEXURE-D. IT IS ALSO INCIDENTALLY SIGNED BY SHRI ATUL N. PATEL MANAGER MANEKCHAWK OFFICE L.T. SHROFF GROUP). II. ONE EXACTLY SIMILAR PASS BOOK WAS SEIZED FROM SHRI CHANDUBHAI. EMPLOYEE OF SHRI MANUBHAI B. PATEL AT MITHAKHALI OF FICE. IN RESPECT OF THIS PASS BOOK ALSO IT WAS ADMITTED BY SHRI CHANDUBHAI & MANUBHAI THAT IT WAS ISSUED BY L.T. SHROFF GROUP. AFTER TAKING INITI AL STAND THAT IT REPRESENTED DEPOSITS IN HUNDREDS THEY HAVE RECTIFI ED IT AND ADMITTED THAT IT REPRESENTS THEIR DEPOSITS IN THOUSANDS AND ACCORDIN GLY THE UNACCOUNTED INCOME HAS ALSO BEEN DISCLOSED IN THEIR REVISED RET URN OF INCOME. III. ANOTHER SIMILAR PASS BOOK WAS SEIZED FROM POSSESSION OF ONE SHRI RUPCHAND M. SHYAMSUNDER EMPLOYEE OF DHANSHREE CAPI TAL LTD. AT MITHAKHALI HE HAD ADMITTED AT THE TIME OF SEARCH TH AT THE PASS BOOK WAS ISSUED BY L.T. SHROFF AND ENTRIES IN THE PASS BOOK WERE MADE AFTER SUPPRESSING 'OOOS'. IN FACT LATER ON A RETURN OF I NCOME WAS ALSO FILED BY DHANSHREE CAPITAL LTD. IN WHICH UNACCOUNTED INCOME ON THIS BASIS HAS BEEN DISCLOSED. IV. ANOTHER PASS BOOK MARKED AS A/10 WAS SEIZE D FROM THE POSSESSION OF SHRI NARESH T. SHAH WHICH WAS ISSUED IN THE NAME OF T.N. SHAH. SHRI NARESHT. SHAH HAD ADMITTED THAT ENTRIES IN PASS BOO K REPRESENT THEIR DEPOSITS WITH L.T. SHROFF GROUOP IN THOUSANDS. LATE R ON SHRI T.N. SHAH HAS ALSO PAID TAXES ON THE SAME. V. A PASS BOOK MARKED AS ANNEXURE A/5 WAS SE IZED AT BOMBAY OFFICE FROM THE POSSESSION OF ONE SHRI PARAG CHOKSHI EMPL OYEE OF PAYAL TRADERS. 38 BIHI JAH STREET 1 S ' FLOOR ROOM NO.L 11 NAGDEVI BOMBAY OWNED BY SHRI DINESH R. KANERVA. IN HIS STATEMENT H E HAD ADMITTED THAT IT(SS)A NOS.89 90 & 91/AHD/2006 BLOCK PERIOD : 1/4/86 TO 1/8/96 - 8 - THE ENTRIES MENTIONED IN THIS PASS BOOK REPRESENT T HEIR DEPOSIT IN CASH WITH L.T. SHROFF GROUP IN THOUSANDS. VI. TWO PASS BOOKS MARKED AS ANNEXURE A/2 BELO NGING TO K.M. DEVELOPERS 79 BHAGYODAY 3 RD FLOOR N.M. ROAD MUMBAI-7 WERE SEIZED FROM THE POSSESSION OF ONE SHRI .D.D. TALASE AT MUM BAI OFFICE. IN RESPECT OF THESE PASS BOOKS SHRI JAYESH P. SHAH OF K.M. DE VELOPERS ADMITTED THAT IT REPRESENTED THEIR CASH DEPOSITS WITH L.T. SHROFF GROUP IN THOUSANDS. VII. A PASS BOOK MARKED AS ANNEXURE A-3 BELONGI NG TO SHRI B.P DOSHI KANTORIA BLDG. 215 PANJARAPOLE MUMBAI WAS SEIZED FROM BOMBAY OFFICE FROM (HE POSSESSION OF HIS EMPLOYEE SHRI MANOJ KAN AIYALAL. HE ADMITTED THAT THIS PASS BOOK CONTAIN TRANSACTIONS OF SHRI B.P. DO SHI IN WHICH TRANSACTIONS ARE RECORDED IN THOUSANDS. THE SAME WAS LATER ON CO NFIRMED BY SHRI B.P. DOSHI IN HIS STATEMENT RECORDED ON 32-08-96. VIII. ANOTHER PASS BOOK MARKED AS ANNEXURE A-4 BELO NGING TO HEMANT C. CHEDHA PARTNER IN M/S. TULIP OPP. CRAFORD MARKET MUMBAI WAS SEIZED FROM THE POSSESSION OF HIS EMPLOYEE SHRI SANPATH VIDE HIS LETTER DATED 16-8-96 SHRI HEMEND CHEDHA HAS ADMITTED THAT THE PASS BOOK REPRESENTED THEIR DEPOSITS WITH L.T. SHROFF GROUP IN WHICH AMOUNTS WE RE RECORDED IN THOUSANDS. 7.7 IN VIEW OF THE DISCUSSION HELD ABOVE IT IS CLEAR T HAT THE PASS BOOKS FOUND IN (LIE POSSESSION OF THE ASSESSEE WAS ACTUALLY A R UNNING ACCOUNT OF HIS TRANSACTIONS WITH L T SHROFF GROUP AND THE ENTRIES IN THESE PASS BOOKS HAD BEEN WRITTEN BY THE ACCOUNTANTS OF THE L T SHROFF G ROUP AND NOT BY THE ASSESSEE OF HIS RELATIVES AS CLAIMED BY HIM. IT IS IMPORTANT TO NOTE HERE THAT THE CONCLUSION HAS NOT BEEN DRAWN SOLELY ON THE BAS IS OF THE STATEMENT OF ATUI PATEL OR KALPESH PATEL BUT ON THE BASIS OF TH E CONTENTS OF THE PASS BOOKS STATEMENT OF THE ASSESSEE RECORDED ON VARIOU S DATES SUBMISSION MADE BY HIM ON VARIOUS DATES AND REPRODUCED ABOVE AND OT HER EVIDENCES GATHERED DURING THE COURSE OF SEARCH ACTION WHICH CORROBORAT ED THIS INFERENCE. 7.8 IT IS ALSO INTERESTING TO NOTE THAT THE ASSESSE E NEVER REQUESTED FOR A CROSS EXAMINATION OF WITNESSES WHOSE STATEMENT HAD BEEN R ECORDED AT THE TIME OF ORIGINAL ASSESSMENT PRECISELY FOR THE REASON THAT HE HAD NO DOUBT ABOUT THE VERACITY OF THEIR STATEMENT. THIS ISSUE OF CROSS EX AMINATION HAS BEEN RAISED AFTER A DELAY OF SO MANY YEARS AFTER THE ASSESSEE H AS FELT THAT ONE OF THE PERSONS ATUI PATEL COULD BE COMPROMISED. HOWEVER I T HAS TO BE NOTED THAT IN HIS CROSS EXAMINATION ATUI PATEL HAS NOT GONE BACK ON THE STATEMENT GIVEN EARLIER AND HAS NEVER MENTIONED THAT WHATEVER HE HA D STATED EARLIER ON OATH WAS INCORRECT AND FALSE. HENCE HIS EARLIER STATEME NT STANDS AS GOOD AND AS ADMISSIBLE AN EVIDENCE AS EVER. IT(SS)A NOS.89 90 & 91/AHD/2006 BLOCK PERIOD : 1/4/86 TO 1/8/96 - 9 - 5. AFTER ABOVE FINDING THE ASSESSING OFFICER ANALYSED ENTRIES MADE IN THE FIVE PASSBOOKS FOUND FROM THE POSSESSION OF THE ASSESSEE. VARIOUS DEPOSITS AND BALANCES FROM THESE FIVE PASSBOOKS WER E AS UNDER: PASSBOOK P-1 DEPOSIT BALANCE 1-4-96 2 00 000 2 00 000 6-5-96 1 50 000 3 50 000 3-6-96 1 00 000 4 50 000 1-7-96 50 000 5 00 000 [ SO TOTAL DEPOSITS FRO A.Y. 1996-97 RS.5 00 000/ -] PASSBOOK P-2 DEPOSIT BALANCE 1-4-95 4 00 000 4 00 000 1-6-95 1 00 000 5 00 000 28-2-96 1 00 000 6 00 000 [ SO TOTAL DEPOSITS FRO A.Y. 1996-97 RS.6 00 000/ -] PASSBOOK P-3 DEPOSIT WITHDRAWAL BALANCE 1-4-95 6 00 000 -- 6 00 000 20-7-95 (-)5 00 000 1 00 000 11-8-95 3 00 000 -- 4 00 000 28-2-96 2 00 000 -- 6 00 000 3-4-96 (-)2 00 000 4 00 000 7-6-96 3 00 000 -- 7 00 000 ----------- - TOTAL DEPOSIT RS.14 LACS PASSBOOK P-4 DEPOSIT BALANCE 1-4-95 6 00 000 6 00 000 [ SO TOTAL DEPOSITS FRO A.Y. 1996-97 RS.6 00 000/ -] PASSBOOK P-5 DEPOSIT BALANCE 1-4-96 4 00 000 4 00 000 3-6-96 1 00 000 3 00 000 1-7-96 50 000 5 00 000 [ SO TOTAL DEPOSITS FRO A.Y. 1997-98 RS.4 00 000/ -] IT(SS)A NOS.89 90 & 91/AHD/2006 BLOCK PERIOD : 1/4/86 TO 1/8/96 - 10 - TOTAL DEPOSIT IN ASSESSMENT YEARS 1996-97 AND 1997- 98 = RS.35 LAKHS EXCLUDING INTEREST 6. THE ASSESSEES CLAIM BEFORE THE ASSESSING OFFICE R WAS THAT THE BENEFIT OF WITHDRAWAL OF THE MONEY AND RE-DEPOSIT O F THE SAME SHOULD BE GIVEN. THE ASSESSING OFFICER DID NOT ALLOW THIS BEN EFIT ON THE GROUND THAT THERE IS A VIDE GAP BETWEEN WITHDRAWAL AND DEPOSIT. THE ASSESSING OFFICER ASKED FOR THE SOURCE OF EXPLANATION OF THES E DEPOSITS BUT NO EXPLANATION WAS FURNISHED BY THE ASSESSEE OF THE MO NEY DEPOSITED WITH LT SHROFF GROUP AND AS REFLECTED FROM THE DIARIES. HE ACCORDINGLY TREATED A SUM OF RS.23 LACS AS UNDISCLOSED DEPOSITS U/S.69 OF THE I.T. ACT 1961 FOR THE ASSESSMENT YEAR 1996-97; SUM OF RS.12 00 000/- FOR ASSESSMENT YEAR 1997-98 COMPRISING THE BLOCK PERIO D; UNACCOUNTED INTEREST OF RS.2 36 110/- AND RS.1 13 335/- EARNE D ON THESE DEPOSITS FROM LT SHROFF GROUP IN THE ASSESSMENT YEAR 1996-97 AND ASSESSMENT YEAR 1997-98 RESPECTIVELY. 7. BEFORE US LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT ASSESSEE HAS BEEN CONSISTENTLY SHOWI NG AGRICULTURAL INCOME IN THE RETURN OF INCOME. HIS BROTHERS ARE ALSO HAVING AGRICULTURAL LAND AND THEY ARE ALSO EARNING AGRICULTURAL INCOME. THEREFORE BENEFIT OF AGRICULTURAL INCOME EARNED SHOULD BE GIVEN TO THE A SSESSEE AGAINST THE IT(SS)A NOS.89 90 & 91/AHD/2006 BLOCK PERIOD : 1/4/86 TO 1/8/96 - 11 - MONEY DEPOSITED BY HIM WITH LT SHROFF GROUP. HE D ID NOT SERIOUSLY CONTESTED HIS CLAIM MADE AT EARLIER OCCASION THAT TRANSACTIONS IN THE DIARIES DID NOT BELONG TO HIM OR MONEY WAS DEPOSI TED BY HIM OR INTEREST WAS EARNED BY HIM. WE THEREFORE DO NOT CARRY AN Y DISCUSSION ON THE OWNERSHIP OF DIARY OR TRANSACTIONS RECORDED THEREI N OR ON THE ISSUE OF DEPOSITS OF CASH MADE BY ASSESSEE WITH LT SHROFF G ROUP OR THE INTEREST EARNED THEREON. THESE ARE TAKEN UNDISPUTED AND GR IEVANCE IF ANY RAISED BY THE ASSESSEE ORIGINALLY ARE REJECTED FOR WANT OF SERIOUS CONTEST FROM THE ASSESSEE BEFORE US. IN ANY CASE THERE ARE OV ERWHELMING EVIDENT ON THE RECORD OF THE ASSESSING OFFICER SHOWING THAT SI MILAR PASSBOOKS WERE ISSUED BY LT SHROFF GROUP TO OTHER SUCH DEPOSITORS WHO HAVE ACCEPTED TO HAVE RECEIVED SUCH PASSBOOKS FORM LT SHROFF GROUP W HOSE MANAGER USED TO MAKE ENTRIES IN THE PASSBOOK AT THE TIME WH EN MONEY WAS DEPOSITED OR PAID BACK TO THEM OR INTEREST IS CREDI TED THEREIN. THERE IS NO CREDENTIALS IN THE ARGUMENTS OF THE ASSESSEE THAT H E HAS HIMSELF MADE ENTRIES IN THOSE PASSBOOKS WHEN HE HAS RECEIVED MON EY FROM HIS CHILDREN/RELATIVES. THE ASSESSING OFFICER HAS AMP LY SHOWN THAT HANDWRITING IN THE PASSBOOKS WAS THAT OF THE MANAG ER OF THE LT SHROFF GROUP WHOSE SIGNATURES ALSO VERY WELL TALLIED WITH THAT OF SHRI ATUL PATEL THE MNAGER. WE THEREFORE AFFIRM THE ORDE R OF THE ASSESSING OFFICER TO THE EXTENT THAT THE PASSBOOKS FOUND FROM THE POSSESSION OF THE IT(SS)A NOS.89 90 & 91/AHD/2006 BLOCK PERIOD : 1/4/86 TO 1/8/96 - 12 - ASSESSEE CONTAINED THE TRANSACTIONS RELATING TO HIS DEPOSITS WITH LT SHROFF GROUP AND CONTENTS THEREIN ARE TRUE AND TH ERE IS NO CONTRARY MATERIAL TO HOLD IT OTHERWISE. 8. THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASS ESSEE IN RESPECT OF EXPLANATION OF DEPOSITS SUBMITTED THAT ASSESSEE AND HIS FAMILY MEMBERS HAVE SUFFICIENT AGRICULTURAL LAND OUT OF W HICH THEY ARE EARNING SUBSTANTIAL AGRICULTURAL INCOME WHICH THEY ARE SHOW ING IN THE IT RETURNS. SUCH AGRICULTURAL INCOME IS ACCUMULATED AND IS DEP OSITED WITH THE LT SHROFF GROUP. THE CREDIT OF SUCH AGRICULTURAL INC OME SHOULD BE GIVEN. HE REFERRED TO THE FOLLOWING CHART SHOWING HOW MUCH AGRICULTURAL INCOME ASSESSEE AND HIS BROTHERS HAVE EARNED. \ DETAILS OF AGRICULTURAL INCOME AS PER I.T. RECORDS. A.Y. GROSS RECEIPTS TOTAL NET RECEIPTS TOTAL REMARKS 21 880 1990-91 C 39453 V * S * 59 435 26 812 28 873 77 565 ITR FILED NO ITR FILED -DO- 43 964 1991-92 C 66464 V * S. * 66 464 42 930 90 918 . 1 77 812 ITR FILED NO ITR FILED - ..DO.... 1992-93 C 53450. V* 53 450 38 450 1 22 559 2 25 236 3 86 245 ITR.FILED. NO ITR FILED - DO- IT(SS)A NOS.89 90 & 91/AHD/2006 BLOCK PERIOD : 1/4/86 TO 1/8/96 - 13 - S * ITR FILED NO ITR FILED 1993-94 C 96868 V * S * 96 868 86 865 70 404 1 14 629 2 71 898 -DO- 1994-95 / C 90672 V 169360 S 213693 4 76 725 80 441 1 45 101 2 05 793 4 31 335 ITR FILED NO ITR FILED -DO- 1995-96 C 84376 V 177954 S 187024 4 49 354 55 705 1 60 939 1 70 159 3 86 803 ITR FILED -DO- -DO- 1996-97 C 261839 V 312135 S 321561 8 95 535 1 99 839 2 35 447 2 54 561 6 89 847 ITR FILED -DO- -DO- 1997-98 BROKER PERIOD (UPTO 1.8.96.) C * V * ' S * * 47 200 1 10 181 1 15 469 2 72 850 AS PER BLOCK ITR TOTAL 26 94 335 NOTES: 1 ..LATE SHRI C.A. GANDHI WAS ASSESSED TO T AX AND HAD DECLARED AGRI. INCOME IN HIS RETURNS AS PER DETAILS IN BLOCK RETURN (P.23 1). * WHEREVER THE DETAILS ARE NOT AVAILABLE IT IS SHO WN BY * IN THE COLUMN. 2. SHRI VINOD GANDHI AND SUNIL GANDHI FROM A.Y. 199 3-94 (SEE P.242-253) AND (P.268-277). 9. ACCORDING TO THIS CHART ASSESSEE HAD TOTAL RS.2 6 94 335/- AS AGRICULTURAL INCOME DURING THE BLOCK PERIOD THE CR EDIT FOR WHICH IS CLAIMED. SECONDLY THE TELESCOPING EFFECT IS ALSO CLAIMED I.E. ASSESSEE HAS WITHDRAWN MONEY FORM LT SHROFF GROUP WHICH IS RE-DEPOSITED. THUS RE-DEPOSIT SHOULD BE TREATED AS COMING OUT OF MONEY WITHDRAWN. HE REFERRED TO THE WORKING DONE BY THE ASSESSING OF FICER AND SUBMITTED IT(SS)A NOS.89 90 & 91/AHD/2006 BLOCK PERIOD : 1/4/86 TO 1/8/96 - 14 - THAT ASSESSEE AND HIS BROTHERS HAVE WITHDRAWN RS.7 LACS AS PER PASSBOOK NO.3 AND RS.1 LAC AS PER PASSBOOK NO.5. THUS TOTA L WITHDRAWAL IS OF RS.8 LACS. THE ASSESSING OFFICER HAS COMPUTED THE UNDISCLOSED INCOME WITHOUT GIVING BENEFIT OF TELESCOPING AT RS.36 47 3 55/-. IF THE TELESCOPING EFFECT IS GIVEN THEN THE ASSESSEE WILL GET A REDUCTION OF RS.8 LACS. THUS TOTAL UNDISCLOSED INCOME WILL BE REDUCED TO RS.24 47 355/-. THE ASSESSEE AND HIS FAMILY MEMBE RS HAVE SHOWN AGRICULTURAL INCOME OF RS.26 94 435/-. THEREFORE AGRICULTURAL INCOME IS MORE THAN UNDISCLOSED INCOME FOUND DEPOSITED WITH L T SHROFF GROUP AS REFLECTED FROM THE PASSBOOKS. ACCORDINGLY THERE IS NO CASE OF TAXING ANY UNDISCLOSED INCOME. 10. AGAINST THIS LEARNED DEPARTMENTAL REPRESENTATI VE SUBMITTED THAT IT IS INCORRECT TO HOLD THAT AGRICULTURAL INCOME EA RNED IN THE ASSESSMENT YEARS 1990-91 TO 1994-95 OR EARNED IN ASSESSMENT Y EAR 1995-96 WOULD BE AVAILABLE FOR DEPOSIT WITH LT SHROFF GROUP. THE RE IS A VIDE GAP BETWEEN ALLEGED EARNING OF AGRICULTURAL INCOME AND DATE OF DEPOSIT WITH LT SHROFF GROUP. THE EARLIEST DATE OF DEPOSIT FOU ND IS 01/04/1995. THEREFORE NO BENEFIT OF ANY AGRICULTURAL INCOME EA RNED PRIOR TO THIS DATE CAN BE GIVEN. FURTHER IN SUBSEQUENT PERIOD WH ATEVER AGRICULTURAL INCOME IS EARNED CANNOT BE PRESUMED TO BE ENTIRELY AVAILABLE FOR DEPOSIT. IT(SS)A NOS.89 90 & 91/AHD/2006 BLOCK PERIOD : 1/4/86 TO 1/8/96 - 15 - THE ASSESSEE MUST HAVE CONSUMED PART OF AGRICULTURA L INCOME AND THEREFORE ENTIRE AMOUNT EARNED DURING THE PERIOD O F DEPOSIT CANNOT BE SAID TO BE AVAILABLE FOR DEPOSIT. THE LEARNED DEPA RTMENTAL REPRESENTATIVE FURTHER SUBMITTED THAT NO BENEFIT SH OULD BE GIVEN TO ALLEGED AGRICULTURAL INCOME IN THOSE CASES WHERE RE TURN IS NOT FILED PRIOR TO DATE OF SEARCH. FURTHER NO BENEFIT OF AGRICUL TURAL INCOME SHOULD BE GIVEN AFTER THE FINAL DATE OF DEPOSIT I.E. 01/07/1 996. THE LEARNED DEPARTMENTAL REPRESENTATIVE THEN SUBMITTED THAT THE ASSESSEE HAS NOT FURNISHED ANY EVIDENCE OF HOW MUCH AGRICULTURAL INC OME HE HAS EARNED HOW MUCH HOLDING IT HAD WHETHER AGRICULTURAL OPERA TIONS WERE ACTUALLY CARRIED OUT WHAT WAS THE HOUSE-HOLDING EXPENDITURE HOW MUCH AGRICULTURAL INCOME HAS BEEN PERSONALLY CONSUMED H OW MUCH HAS BEEN SAVED. HE ALSO SUBMITTED THAT MONEY WITHDRAWN FROM L.T.SHROFF GROUP CANNOT BE ALL PRESUMED TO BE AVAILABLE FOR DEPOSIT AS ASSESSEE WILL NOT WITHDRAW MONEY FOR THE SAKE OF WITHDRAWAL ONLY. I T WILL WITHDRAW ONLY FOR HIS USE OR SOME OTHER PURPOSES AND SHOULD NOT B E SAID TO BE AVAILABLE AFTER A GAP OF SUBSTANTIAL TIME. HE REFERRED TO PASSBOOK NO.3 WHERE RS.5 LACS WAS WITHDRAWN ON 27/05/1995. A SUM OF RS .3 LACS WAS DEPOSITED ON 11/08/1995 AND ANOTHER SUM OF RS.2 LAC S WAS DEPOSITED ON 28/02/1996. THEREAFTER A SUM OF RS.2 LACS WAS WIT HDRAWN ON 03/04/1996 BUT RS.3 LACS WAS DEPOSITED ON 07/06/ 1996. THUS AFTER A IT(SS)A NOS.89 90 & 91/AHD/2006 BLOCK PERIOD : 1/4/86 TO 1/8/96 - 16 - GAP OF A MONTH OR TWO IT CANNOT BE SAID THAT WITHDR AWN MONEY WAS AVAILABLE FOR RE-DEPOSIT. HE THEN REFERRED TO ACC RUED INTEREST WHICH ACCORDING TO HIM SHOULD BE TAXED SEPARATELY. 11. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RE CORD. IN OUR CONSIDERED VIEW THE OWNERSHIP OF THE TRANSACTION AND CONTENT S OF THE PASSBOOKS ARE NOT IN DISPUTE ANY MORE ON ACCOUNT OF WANT OF SERIO US CONTEST FROM THE ASSESSEE AND ANY CONTRARY MATERIAL. THEREFORE AS WE HAVE DISCUSSED ABOVE FINDING OF THE LD. ASSESSING OFFICER ON THIS ISSUE IS CONFIRMED. 12. REGARDING EXPLANATION FURNISHED BY THE ASSESSEE WE NOTICED THAT IN SPITE OF SEVERAL OPPORTUNITIES GIVEN TO ASSESSEE HE HAS NOT FURNISHED ANY EXPLANATION BEFORE THE ASSESSING OFFICER. THIS IS NOT APPRECIATED. HOWEVER WE NOTICE THAT ASSESSEE HAS FILED INCOME T AX RETURNS SINCE ASSESSMENT YEAR 1990-91 WHERE AGRICULTURAL INCOME H AS BEEN DECLARED WHICH IS APPARENTLY ACCEPTED BY A DEPARTMENT. THER EFORE EXISTENCE OF AGRICULTURAL LAND AND INCOME THEREFROM CANNOT BE DI SPUTED. NOW THE QUESTION REMAINS FOR OUR ADJUDICATION IS WHETHER TH E ENTIRE RECEIPT RIGHT FROM 1991 ARE AVAILABLE FOR DEPOSIT MADE FOR THE F IRST TIME ON IT(SS)A NOS.89 90 & 91/AHD/2006 BLOCK PERIOD : 1/4/86 TO 1/8/96 - 17 - 01/04/1995. IN OUR VIEW THIS PROPOSITION IS NOT ACCEPTABLE. LOOKING TO THE ENTIRE FACTS AND CIRCUMSTANCES OF THE CASE WE GIVE FOLLOWING FINDING: (I) WHERE NO RETURN OF INCOME IS FILED EXISTENCE OF AGRICULTURAL INCOME AND BENEFIT THEREFROM CANNOT BE GIVEN. HOWE VER IF IT IS PROVED THAT S/SHRI VINDOD GANDHI & SUNIL GAND HI HAD AGRICULTURAL LAND THEN AGRICULTURAL INCOME ON TH E SAME SCALE CAN BE ACCEPTED I.E. ON THE BASIS OF AGRICUL TURAL HOLDING OF SHRI CHANDRAKANT A. GANDHI IN WHOSE CASE RETURN OF INCOME WAS FILED. THE ASSESSEE HAS NOT E XPLAINED AS TO HOW MUCH AGRICULTURAL LAND SHRI CHANDRAKANT G ANDHI HAD IN POSSESSION ON WHICH AGRICULTURAL OPERATION W AS CARRIED OUT. THE ASSESSING OFFICER WILL HOWEVER FIND OUT THE AGRICULTURAL LAND IN POSSESSION IN THE NAME OF SHRI CHANDRAKANT GANDHI AND WORK OUT PER ACRE HOW MUCH AGRICULTURAL INCOME FOR EACH YEAR WAS DECLARED TO BE ERNED BY SHRI CHANDRAKANT GANDHI. SIMILARLY PER ACRE NET RECEIPT WOULD BE APPLIED IN A CASE OF HOLDINGS OF S /SHRI VINOD GANDHI AND SUNIL GANDHI. IF NET RECEIPT SO WORKED OUT IN THE CASE OF S/SHRI VINOD GANDHI AND SUNIL GA NDHI IS MORE THAN WHAT HAS BEEN SHOWN IN THE CHART GIVEN (W HICH IS REPRODUCED ABOVE) THEN SUCH EXCESS SHALL BE IGNOR ED. IN CASE WORKING PRO-RATA IN THE CASE OF S/SHRI VINOD GANDHI AND SUNIL GANDHI IS FOUND LESSER THEN WHAT IS SHOW N IN THE ABOVE CHART THEN SUCH LESSER FIGURE WOULD BE ADOPT ED AS NET AGRICULTURAL INCOME. THUS YEAR-WISE CHART OF NET AGRICULTURAL INCOME WOULD BE PREPARED BY THE ASSESS ING OFFICER. HE MAY TAKE NECESSARY HELP FROM THE ASSE SSEE. IT(SS)A NOS.89 90 & 91/AHD/2006 BLOCK PERIOD : 1/4/86 TO 1/8/96 - 18 - (II) IT CANNOT BE ACCEPTED THAT ENTIRE AGRICULTURA L INCOME `EARNED DURING THE ASSESSMENT YEAR 1990-91 TO 1994-95 WOULD BE AVAILABLE FOR DEPOSIT WITH LT SHROFF GROUP. WE CONS IDER IT FAIR TO ESTIMATE SAVINGS MADE FROM AGRICULTURAL INC OME. AFTER TAKING AN OVERALL VIEW OF FACTS AND CIRCUMS TANCES OF THE CASE WE DIRECT THAT 40% OF AGRICULTURAL INCOME EARNED BY THREE ASSESSEES TILL ASSESSMENT YEAR 1992-93 WOU LD BE AVAILABLE AS SAVINGS FOR DEPOSIT WITH LT SHROFF GR OUP AS ON 01/04/1995 ONWARDS. OUT OF THE AGRICULTURAL INCOME EARNED IN THE ASSESSMENT YEARS 1993-94 & 1994-95 60% OF T HE AGRICULTURAL INCOME WOULD BE AVAILABLE AS SAVINGS F OR DEPOSIT WITH LT SHROFF GROUP. IN SUBSEQUENT YEARS WE TAKE THAT 80 OF THE AGRICULTURAL INCOME WILL BE AVAILABL E FOR DEPOSIT TILL 01/04/1996. THE ASSESSING OFFICER WI LL ACCORDINGLY CALCULATE SAVINGS OUT OF AGRICULTURAL INCOME FOR ALL THESE YEARS AND GIVE CREDIT TO THE ASSESSEE. (III) IT IS PERTINENT TO NOTE THAT FOR THE FIRST T IME BEFORE THE TRIBUNAL THE ASSESSEE HAS FILED DETAILS OF AGRICUL TURAL INCOME ALREADY DECLARED BY THREE ASSESSEES. THE EV IDENCE OF LAND HOLDING IS STILL REQUIRED TO BE VERIFIED AN D SO THE EVIDENCE OF AGRICULTURAL OPERATIONS. IN ANY CASE ONCE OR WHATEVER DEPARTMENT HAS ACCEPTED THE AGRICULTURAL I NCOME DECLARED IN THE RETURN OF INCOME PRIOR TO THE SEARC H AND TO THAT EXTENT THE ASSESSING OFFICER WILL ACCEPT THE E XISTENCE OF IT(SS)A NOS.89 90 & 91/AHD/2006 BLOCK PERIOD : 1/4/86 TO 1/8/96 - 19 - AGRICULTURAL INCOME SUBJECT TO THE VERIFICATION OF THE RETURNS FILED BY THEM. (IV) THE ASSESSING OFFICER WILL ALSO VERIFY WHETHER SAVINGS FROM AGRICULTURAL INCOME AS DIRECTED BY US TO BE COMPUT ED IS NOT INVESTED ELSEWHERE BEFORE GIVING CREDIT OF SUCH SAV INGS. TO THE EXTENT INVESTMENTS ARE FOUND ELSEWHERE CREDIT WILL BE REDUCED FURTHER (OUT OF 40% 60% AND 80% BEING SAVI NGS FROM AGRICULTURAL INCOME AS HELD BY US ABOVE). 13. REGARDING RE-DEPOSIT OUT OF WITHDRAWALS WE HOL D THAT THREE MONTHS AFTER WITHDRAWAL MONEY WILL NOT BE AVAILAB LE FOR REDEPOSIT. THEREFORE A DEPOSIT OF RS.2 LACS MADE ON 28/02/199 6 AND CLAIMED TO BE OUT OF WITHDRAWAL ON 27/09/1995 IN THE PASSBOOK NO. 3 CANNOT BE ACCEPTED AS IT IS BEYOND REASONABLE TIME GAP. EXP LANATION IN RESPECT OF ALL OTHER RE-DEPOSITS BEING WITHIN REASONABLE PERIO D OF WITHDRAWAL IS ACCEPTED AS SATISFACTORIY. ACCORDINGLY OUT OF RS .8 LACS FOUND TO BE WITHDRAWN EXPLANATION WITH RESPECT TO RS.6 LACS IS ACCEPTED. INTEREST INCOME HAS TO BE TAXED SEPARATELY AND HAS TO BE EXC LUDED FROM BEING EXPLAINED OUT OF AGRICULTURAL INCOME. EVEN IN A CA SE WHERE S/SHRI VINOD GANDHI OR SUNIL GANDHI HAVE NOT FILED RETURN OF INC OME WE DIRECT THE ASSESSING OFFICER TO ACCEPT THE EXISTENCE OF AGRICU LTURAL INCOME ON THE IT(SS)A NOS.89 90 & 91/AHD/2006 BLOCK PERIOD : 1/4/86 TO 1/8/96 - 20 - BASIS OF AGRICULTURAL HOLDING AND THEIR PRIMA-FACI E PROOF OF OPERATION OF AGRICULTURAL INCOME. 14. AS PER OUR ABOVE DISCUSSION THE ASSESSING OFFI CER IS DIRECTED TO RE-COMPUTE THE AGRICULTURAL INCOME AND SAVINGS AVAI LABLE FOR DEPOSIT AND WORK OUT TAXABLE UNDISCLOSED INCOME IN BLOCK PERIO D. 15. SHRI SUNIL GANDHI AND VINOD GANDHI ARE BROTHERS AND SONS OF SHRI CHANDRAKANT A.GANDHI. SHRI CHANDRAKANT A.GANDHI IS EXPIRED AND BOTH THE SONS HAVE BEEN INTRODUCED AS HIS LEGAL HEIRS. SUBSTANTIVE ASSESSMENT HAS BEEN MADE IN THE CASE OF SHRI CHANDRAKANT A.GAN DHI WHEREAS PROTECTIVE ASSESSMENTS HAVE BEEN MADE IN THE CASES OF S/SHRI SUNIL GANDHI AND VINOD GANDHI. IN THE PRESENT CASE WE H AVE HELD THAT THE ENTIRE UNDISCLOSED INCOME SHOULD BE ASSESSED IN THE HANDS OF SHRI CHANDRAKANT A.GANDHI THEN ACCORDINGLY PROTECTIVE A SSESSMENTS IN THE HANDS OF S/SHRI SUNIL GANDHI AND VINOD GANDHI WILL NOT SURVIVE. THUS ASSESSING OFFICER WILL ACCORDINGLY CARRY OUT COMPUT ATION OF UNDISCLOSED INCOME AS PER DIRECTIONS NARRATED ABOVE BUT ONLY I N THE HANDS OF SHRI CHANDRAKANT A.GANDHI THROUGH HIS LEGAL HEIRS. OTHE R TWO ASSESSMENTS ARE ACCORDINGLY QUASHED. IT(SS)A NOS.89 90 & 91/AHD/2006 BLOCK PERIOD : 1/4/86 TO 1/8/96 - 21 - 16. IN THE RESULT APPEAL IN THE CASE OF CHANDR AKANT A.GANDHI IS PARTLY ALLOWED BUT FOR STATISTICAL PURPOSES WHEREAS APPEA LS IN THE CASES OF TWO ASSESSEES - S/SHRI VINOD C.GANDHI AND SUNIL C.GANDH I ARE ALLOWED. ORDER SIGNED DATED AND PRONOUNCED IN THE COURT ON 08/01/2010. SD/- SD/- ( D.C. AGRAWAL ) ( T.K.SHARMA ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 08/01/2010 T.C. NAIR COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT. 2. THE RESPO NDENT 3. THE CIT CONCERNED. 4. THE LD. CIT(AP PEALS)-CONCERNED 5. THE DR AHMEDABAD BENCH.6. THE GUARD FILE. BY ORDER //TRUE COPY// (DY./ASSTT.REGISTRAR) ITAT AHMEDABAD