Shri Arun Sehlot, Bhopal v. The ACIT, 3(1), Bhopal

MA 80/IND/2017 | 2006-2007
Pronouncement Date: 25-03-2021 | Result: Partly Allowed

Appeal Details

RSA Number 8022724 RSA 2017
Assessee PAN ABFPM9882E
Bench Indore
Appeal Number MA 80/IND/2017
Duration Of Justice 3 year(s) 10 month(s) 22 day(s)
Appellant Shri Arun Sehlot, Bhopal
Respondent The ACIT, 3(1), Bhopal
Appeal Type Miscellaneous Application
Pronouncement Date 25-03-2021
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted DB
Tribunal Order Date 25-03-2021
Date Of Final Hearing 12-02-2021
Next Hearing Date 12-02-2021
Last Hearing Date 16-11-2018
First Hearing Date 06-07-2018
Assessment Year 2006-2007
Appeal Filed On 03-05-2017
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE HONBLE KUL BHARAT JUDICIAL MEMBER AND HONBLE MANISH BORAD ACCOUNTANT MEMBER PAN NO: ABFPM9882E M.A. NOS. 67 TO 70/IND/2017 ASSESSMENT YEARS 2003-04 TO 2006-07 (ARISING OUT OF (I.T(SS) NOS.206 TO 212/IND/2012) SHRI SANJAY MEHTA ACIT (3)(1) BHOPAL V/S BH OPAL (APPELLANT) (RESPONDENT) PAN NO: ABFPM9681H M.A. NOS. 71 TO 74/IND/2017 ASSESSMENT YEARS 2003-04 TO 2006-07 (ARISING OUT OF (I.T(SS) NOS.200 TO 203/IND/2012) SMT. SEEMA MEHTA ACIT (3)(1) BHOPAL V/S BH OPAL (APPELLANT) (RESPONDENT) PAN NO: ADOPS9911M M.A. NOS. 75 TO 78/IND/2017 ASSESSMENT YEARS 2003-04 TO 2006-07 (ARISING OUT OF (I.T(SS) NOS.193 TO 196/IND/2012) MRS. SANDHYA SAHLOT ACIT (3)(1) BHOPAL V/S BH OPAL (APPELLANT) (RESPONDENT) SANJAY MEHTA & ORS M.A. NOS 67 TO70/IND/2017 2 PAN NO: AFSPM8170Q M.A. NOS. 55 TO 58/IND/2017 ASSESSMENT YEARS 2003-04 TO 2006-07 (ARISING OUT OF (I.T(SS) NOS.154 TO 157/IND/2012) MR. SURENDRA MEHTA ACIT (3)(1) BHOPAL V/S BH OPAL (APPELLANT) (RESPONDENT) PAN NO: ABFPM9683F M.A. NOS. 59 TO 62/IND/2017 ASSESSMENT YEARS 2003-04 TO 2006-07 (ARISING OUT OF (I.T(SS) NOS.160 TO 163/IND/2012) MR. SANDEEP MEHTA ACIT (3)(1) BHOPAL V/S BH OPAL (APPELLANT) (RESPONDENT) PAN NO: AFSPM8168A M.A. NOS. 63 TO 66/IND/2017 ASSESSMENT YEARS 2003-04 TO 2006-07 (ARISING OUT OF (I.T(SS) NOS.167 TO 170/IND/2012) MRS. PRIYA MEHTA ACIT (3)(1) BHOPAL V/S BH OPAL (APPELLANT) (RESPONDENT) PAN NO: AEYPM4445D M.A. NOS. 82 TO 85/IND/2017 ASSESSMENT YEARS 2003-04 TO 2006-07 (ARISING OUT OF (I.T(SS) NOS.149 TO 152/IND/2012) MR. HITESH MEHTA ACIT (3)(1) BHOPAL V/S BH OPAL (APPELLANT) (RESPONDENT) SANJAY MEHTA & ORS M.A. NOS 67 TO70/IND/2017 3 PAN NO: ADOPS9911M M.A. NOS. 92 53 79 TO 81/IND/2017 ASSESSMENT YEARS 2003-04 TO 2006-07 & 2009-10 (ARISING OUT OF (I.T(SS) NOS.186 TO 189 & 192/IND/2 012) MR. ARUN SAHLOT ACIT (3)(1) BHOPAL V/S BH OPAL (APPELLANT) (RESPONDENT) REVENUE BY SHRI HARSHIT BARI SR.DR ASSESSEE BY SHRI YESHWANT SHARMA CA DATE OF HEARING 1 2 .02.2021 DATE OF PRONOUNCEMENT 2 5 . 0 3 .2021 O R D E R THESE MISCELLANEOUS APPLICATIONS HAVE BEEN FILED U /S 254(2) OF THE INCOME TAX ACT 1961 BY THE AFORESAID ASSESSEE( S) AGAINST THE DIFFERENT ORDERS DATED 22.03.2013 16.04.2013 & 30. 04.2013. THROUGH THESE PETITIONS ASSESSEE(S) HAVE POINTED O UT THAT THERE ARE CERTAIN APPARENT MISTAKES WHICH ARE REQUIRED TO BE RECTIFIED U/S 254(2) OF THE INCOME-TAX ACT 1961. 2. THE LEARNED COUNSEL ON BEHALF OF THE ASSESSEE S UBMITTED THAT ALL THESE MISCELLANEOUS APPLICATIONS (IN SHORT M. A ) HAVE BEEN FILED WITHIN STIPULATED TIME OF 4 YEARS APPLICABLE AT THE TIME OF FILING MAS. FOR THE PROPOSITION THAT MA COULD BE FILED WITHIN 4 YEARS AT THE SANJAY MEHTA & ORS M.A. NOS 67 TO70/IND/2017 4 RELEVANT POINT OF TIME HE RELIED ON THE JUDGEMENT OF HONBLE MP HIGH COURT IN THE CASE OF DISTT. CENTRAL CO-OPERATIVE BANK LTD. V. UOI (2017) 86 TAXMANN.COM 176(MP) . DETAILED CHART ALONG WITH AFFIDAVITS EXHIBITING THAT ALL THESE MAS HAVE BEEN FILED WITHIN 4 YEARS OF THE DATE OF RECEIPT ARE PLACED ON RECORD. 3. IN VIEW OF THE PROPOSITION LAID DOWN BY HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF DISTT. CENTRAL CO-OPERATIVE BANK LTD. V. UOI (2017) 86 TAXMANN.COM 176(MP ) WE ARE IN AGREEMENT WITH LD.AR THAT ALL THESE MAS ARE FILED WITHIN TIME AND DESERVE TO BE ENTERTAINED FOR ADJUDICATION. 4. THE LD. AR HAS SUBMITTED THAT A SEARCH U/S.132 O F THE ACT TOOK PLACE SIMULTANEOUSLY ON ALL THESE ASSESSEES ON 30.0 5.2008 AND THE ASSESSMENT YEARS INVOLVED ARE FROM AY 2003-04 TO 20 09-10.THESE MAS HAVE BEEN FILED ON TWO COMMON ISSUES RELATING T O ALL THE ASSESSEES OF THE GROUP WHICH HAVE REMAINED UNDECIDE D WARRANTING RECTIFICATION: I. NO ADDITION OUGHT TO HAVE BEEN MADE IN RESPECT THOS E YEARS WHERE NO INCRIMINATING MATERIAL WAS FOUND AS THESE ASSESSMENTS STOOD COMPLETED U/S. 143(3)/143(1) AND WERE NOT PENDING ON THE DATE OF SEARCH. SANJAY MEHTA & ORS M.A. NOS 67 TO70/IND/2017 5 II. IN ABSENCE OF CORROBORATION BY WAY OF INDEPENDENT EVIDENCE NO ADDITION OUGHT TO HAVE BEEN MADE IN RE SPECT OF ROUGH NOTINGS IN THE DIARY FOUND IN SEARCH . 5. LD. COUNSEL FOR THE ASSESSEE TOOK US THROUGH THE IMPUGNED ORDERS OF THIS TRIBUNAL IN ORDER TO SHOW THAT ABOV E STATED TWO ISSUES REMAINED TO BE ADJUDICATED BY THIS TRIBUNAL EVEN THOUGH THEY WERE SPECIFICALLY RAISED IN THE GROUNDS OF APP EAL FILED BEFORE THIS TRIBUNAL. 6. LD. DEPARTMENTAL REPRESENTATIVE WAS ALSO FAIR EN OUGH TO ACCEPT THIS FACT THAT THE ABOVE STATED TWO ISSUES R EMAINED TO BE ADJUDICATED BY THIS TRIBUNAL. WE THEREFORE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEES ABOVE CAPTIONED MISCELL ANEOUS APPLICATIONS DESERVES TO BE ALLOWED TO THE EFFECT T HAT ABOVE STATED TWO ISSUES NEEDS TO BE ADJUDICATED AS THERE WAS AN APPARENT MISTAKE IN THE ORDER OF THIS TRIBUNAL MENTIONED HER EIN ABOVE. WE WILL LIKE TO MAKE IT CLEAR THAT EXCEPT THE TWO ISSU ES RAISED BY THE ASSESSEE IN HIS MISCELLANEOUS APPLICATIONS WHICH W ILL BE ADJUDICATED BY US IN THE SUBSEQUENT PARAS ALL OTHER FINDINGS OF THIS TRIBUNAL WILL REMAIN INTACT AND OUR ADJUDICATION WI LL BE LIMITED ONLY SANJAY MEHTA & ORS M.A. NOS 67 TO70/IND/2017 6 TO THE TWO ISSUES RAISED BEFORE US WHICH THOUGH WER E RAISED BEFORE THIS TRIBUNAL BUT REMAINED TO BE ADJUDICATED. AT T HE TIME OF DISPOSAL OF MISCELLANEOUS APPLICATIONS HEARING WAS ALSO COMPLETED FOR THE PENDING ISSUES NOT ADJUDICATED AT THE TIME OF ORIGINAL HEARING BY THIS TRIBUNAL. THE SAME ARE ADJUDICATED AND DECIDED AS FOLLOWS. 7. WE TAKE UP THE FIRST ISSUE WHICH READS AS UNDER: - I. NO ADDITION OUGHT TO HAVE BEEN MADE IN RESPECT THOS E YEARS WHERE NO INCRIMINATING MATERIAL WAS FOUND AS THESE ASSESSMENTS STOOD COMPLETED U/S. 143(3)/143(1) AND WERE NOT PENDING ON THE DATE OF SEARCH. 8. THE BRIEF FACTS OF THE CASES ARE THAT IN THESE C ASES ORIGINAL ASSESSMENT UNDER SECTION 153A WERE MADE FOR AY 2003 -04 TO 2008- 09 AND ASSESSMENT UNDER SECTION 143(3) WAS MADE FOR AY 2009-10 FOR ALL THE ASSESSEES OF THE GROUP. THE LD. AO MADE VARIOUS ADDITIONS IN ALL THE ASSESSMENT YEARS. IT HAS BEEN CONTENDED BY THE LD. AR THAT THE LD.AO MADE VARIOUS ADDITIONS IN AY 2003-04 TO 2006-07 IGNORING THE FACT THAT THE ASSESSMENTS FOR AY 2003-04 TO 2006-07 STOOD COMPLETED ON THE DATE OF SEARCH AND I N ALL THE IMPUGNED ASSESSMENT YEARS VIZ. AY 2003-04 TO 2006-0 7 NO SANJAY MEHTA & ORS M.A. NOS 67 TO70/IND/2017 7 INCRIMINATING MATERIAL WAS FOUND DURING SEARCH EXC EPT ROUGH JOTTINGS IN A DIARY FOUND IN CASE OF ASSESSEE ARUN SAHLOT. FURTHER IN RESPECT OF ALL THE ASSESSEES A SPECIFIC LEGAL GROU ND NO. 2 WAS TAKEN BEFORE THIS TRIBUNAL IN THE GROUNDS OF APPEAL WHIC H READS AS FOLLOWS UNDER : GROUND NO. 2 : THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE THE ORDER U/S.153A IS BAD IN LAW PARTICULARLY BECAUSE: I. NO CORRESPONDING MATERIAL MUCH LESS INCRIMINATING M ATERIAL WAS FOUND IN THE COURSE OF SEARCH OR THEREAFTER FOR SUBJECT ADDITIONS. II. NO ASSESSMENT COULD BE SAID TO BE 'PENDING' ON THE DATE OF INITIATION OF SEARCH AND HAVE 'ABATED' FOR THE SUBJ ECT ASSTT. YEAR AS STIPULATED U/S. 153A. III. ASSESSMENT UNDER SECTION 153A ON THE BASIS OF SEARC H ACTION UNDER SECTION 132 CANNOT AND SHOULD NOT BE EQUATED TO REGULAR/ NORMAL SCRUTINY ASSESSMENT UNDER SECTION 1 43(3) AS DONE BY THE AO. IV. SEC. 153A DOES NOT PERMIT DENOVO ASSESSMENT DEVOID OF ANY MATERIAL / EVIDENCE AS DONE BY THE AO. 9. THE LD. AR SUBMITTED THAT THE ABOVE SPECIFIC LEG AL GROUNDS REMAINED UN ADJUDICATED IN ALL THE CASES AND HENCE IT WARRANT RECTIFICATION U/S. 254(2). HE FURTHER ASSERTED THAT IN CASE OF ONE OF THE ASSESSEES OF THE GROUP ARUN SAHLOT IN ITA NO. IT(SS).A.NOS.186 SANJAY MEHTA & ORS M.A. NOS 67 TO70/IND/2017 8 TO 192/IND/2012 & 261 TO 267/IND/2012 HONBLE BENCH HAS ALREADY HELD THAT ADDITIONS IN RESPECT OF COMPLETED ASSESSMENTS SHOULD NOT BE MADE IN ABSENCE OF ANY INCRIMINATING MATERIAL IN VIEW OF SPECIAL BENCH DECISION IN THE CASES OF ALL CARGO GLOBAL VS. DCIT 20 ITJ 45 (MUM.)(SB) AND GURINDER SINGH BAWA I N ITA NO. 2075/MUM/2010 DTD. 16.11.2012. HE TOOK US THROUGH PARA NO. 28- 31 AT PAGE 61-65 OF THE ABOVE REFERRED ITAT ORDER O F MR. ARUN SAHLOT ( THE LEADING CASE) TO DEMONSTRATE THAT THE BENCH HAD HELD THAT ASSESSMENT YEARS 2003-04 TO 2006-07 WERE NOT PENDI NG AND STOOD COMPLETED ON THE DATE OF SEARCH AND HENCE IN RESPECT OF DEEMED DIVIDEND THE AO SHOULD DECIDE AFRESH TAKING IN TO CONSIDERATION THE LEGAL PROPOSITION DECIDED IN THE CASE OF ALL CARGO GLOBAL AND GURINDER SINGH BABA (SUPRA) . IT WAS STATED THAT THIS WAS DONE IN RESPECT OF DEEMED DIVIDEND BECAUSE THER E WAS CONTRADICTORY FINDINGS OF LD.AO AND LD.CIT(A) ON TH E FACT OF AVAILABILITY OF INCRIMINATING MATERIAL OR NOT DURIN G SEARCH RELATING TO DEEMED DIVIDEND AS DISCUSSED BY THE BENCH. 10. THE LD. AR VEHEMENTLY ARGUED THAT SINCE THE VER Y PRINCIPLE HAS BEEN DECIDED BY THE BENCH IN FAVOUR OF ONE OF T HE ASSESSEES OF GROUP AS AFORESAID THE SAME SHOULD BE HELD AND AP PLIED IN FAVOUR SANJAY MEHTA & ORS M.A. NOS 67 TO70/IND/2017 9 OF THE REMAINING ASSESSES OF THE SAME GROUP REFERRE D IN INSTANT MAS. LD.AR ALSO SUBMITTED THAT DETAILED CHART OF ALL THE ASSESSEES WERE FURNISHED IN THE HEARING BEFORE THE HONBLE I TAT AND THE SAME ARE AGAIN FILED PLACED AT PAGE NO. 34 TO 39 O F SYNOPSIS VOLUME 2 . THIS CHART WILL HELP TO EXPLAIN THAT TH AT NONE OF THE ADDITIONS WERE MADE ON THE BASIS OF ANY INCRIMINATI NG MATERIAL FOUND DURING THE COURSE OF SEARCH IN RESPECT OF AY 2003-04 TO 2006-07 FOR ALL THE ASSESSEES EXCEPT THE ADDITION MADE ON THE BASIS OF DIARY IN CASE OF ARUN SAHLOT. 11. WE HAVE GONE THROUGH THE CONTENTIONS MADE BY TH E LD. AR AND FACTS OF THE CASE. WE FIND THAT THE IMPUGNED LE GAL ISSUE RAISED BY ALL THE ASSESSEES BY WAY OF SPECIFIC GROUND NO. 2 HAS REMAINED UNDECIDED BY THE BENCH AND HENCE IT CALLS FOR RECTI FICATION U/S. 254(2). LD. DR COULD NOT CONTROVERT THE FACT THAT N ONE OF THE ADDITIONS WERE MADE ON THE BASIS OF ANY SEIZED INCR IMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH IN RESPE CT OF AY 2003-04 TO 2006-07 FOR ALL THE ASSESSEES EXCEPT THE ADDITI ON MADE ON THE BASIS OF DIARY IN CASE OF ARUN SAHLOT. 12. WE FURTHER FIND THAT THE CARDINAL PROPOSITION T HAT ADDITIONS IN RESPECT OF UN-ABATED AND COMPLETED ASSESSMENTS S HOULD NOT BE SANJAY MEHTA & ORS M.A. NOS 67 TO70/IND/2017 10 MADE IN ABSENCE OF ANY INCRIMINATING MATERIAL IS A SETTLED LAW AND HAS BEEN FOLLOWED BY THIS TRIBUNAL ALSO IN CASE OF ONE OF THE ASSESSEE OF THE SAME GROUP NAMELY ARUN SAHLOT. SINC E ALL THE ASSESSES MENTIONED IN THE ABOVE CAPTIONED MISC. APP LICATIONS BEING PART OF THE SAME GROUP SUBJECTED TO SEARCH AND CAS ES HEARD AND DECIDED TOGETHER AND THE FACTS BEING COMMON IT WAS ASSERTED BY LD. COUNSEL FOR THE ASSESSEE THAT THE SAME VIEW DESERV E TO BE TAKEN IN RESPECT OF OTHER ASESSEE(S) OF THE GROUP. 13. IT IS A SETTLED PROPOSITION AS LAID DOWN IN THE CASE OF CIT V/S KABUL CHAWLA (2016) 380 ITR 573 (DELHI) THAT ADDITIONS FOR THE CONCLUDED AND NON ABATED ASSESSMENT CAN BE MADE ONL Y IF THERE IS A INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH FOR THOSE YEARS. BEFORE US LD. COUNSEL FOR THE ASSESSEE HAS DEMONSTRATED THROUGH THE DOCUMENTS PLACED IN THE PAPER BOOK THAT ASSESSMENT YEAR 2003-04 TO ASSESSMENT YEAR 2006-07 WITH RESPEC T TO ALL THE ASSESSEE(S) MENTIONED IN THE INSTANT MISCELLANEOUS APPLICATION ARE CONCLUDED AND NON ABATED ASSESSMENTS AS THEY HAVE E ITHER TO BE ASSESSED U/S 143(3) OF THE ACT OR THE TIME LIMIT FO R ISSUANCE OF NOTICE U/S 143(2) OF THE ACT HAD EXPIRED AND THERE WAS NO INCRIMINATING MATERIAL FOUND DURING THE COURSE OF S EARCH WITH SANJAY MEHTA & ORS M.A. NOS 67 TO70/IND/2017 11 RESPECT TO ASSESSMENT YEAR 2003-04 TO ASSESSMENT YE AR 2006-07 AND THEREFORE THE ADDITIONS MADE BY THE LD. A.O FOR ALL THESE YEARS IN RESPECT OF THE ASSESSEE(S) MENTIONED IN THE INST ANT MISCELLANEOUS APPLICATION DESERVES TO BE DELETED. 14. WE HOWEVER ARE OF THE CONSIDERED VIEW THAT LO OKING TO THE PECULIARITY OF THE FACTS AND IN THE INTEREST OF JUS TICE IT WILL BE FAIR FOR BOTH THE PARTIES IF THIS ISSUE IS SET ASIDE TO THE FILE OF LD. A.O FOR LIMITED PURPOSE OF EXAMINING THE VERACITY OF THE SU BMISSIONS MADE BY THE LD. COUNSEL FOR THE ASSESSEE. WE ACCORDINGL Y ORDER SO AND DIRECT THE LD. A.O THAT AFTER GIVING NECESSARY AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE(S) SHOU LD EXAMINE FIRSTLY AS TO WHETHER ANY INCRIMINATING MATERIAL WA S FOUND DURING THE COURSE OF SEARCH FOR ASSESSMENT YEAR 2003-04 TO ASSESSMENT YEAR 2006-07 HAVING ANY NEXUS WITH THE ADDITIONS MA DE AND SECONDLY WHETHER THE ASSESSMENT YEAR 2003-04 TO ASS ESSMENT YEAR 2006-07 WERE FALLING UNDER THE CATEGORY OF CONCLUDE D AND NON ABATED ASSESSMENTS. IN CASE THE LD. A.O FINDS THAT ASSESSMENT YEAR 2003-04 TO ASSESSMENT YEAR 2006-07 WERE CONCLU DED AND NON ABATED ASSESSMENTS AND THERE WAS NO INCRIMINATING M ATERIAL FOUND DURING THE COURSE OF SEARCH PERTAINING TO THESE ASS ESSMENT YEARS SANJAY MEHTA & ORS M.A. NOS 67 TO70/IND/2017 12 IN VIEW OF SETTLED JUDICIAL PRECEDENTS SHOULD NOT MAKE ANY ADDITION FOR THE ASSESSEE(S) MENTIONED HEREIN ABOVE AND IN T HE ALTERNATE CAN TAKE NECESSARY ACTION AS PER THE PROVISIONS OF LAW. IN THE RESULT FIRST COMMON ISSUE RAISED BY ABOVE CAPTIONED ASSESS EE(S) PRESENT BEFORE US AS TO WHETHER NO ADDITION OUGHT TO HAVE BEEN MADE IN RESPECT THOSE YEARS WHERE NO INCRIMINATING MATERIAL WAS FOUND AS THESE ASSESSMENTS STOOD COMPLETED U/S 143(3)/143(1) AND WERE NOT PENDING ON THE DATE OF SEARCH IS HEREBY ALLOWED FOR STATISTICAL PURPOSES. 15. AS REGARDS SECOND ISSUE I.E. IN ABSENCE OF CORROBORATION BY WAY OF INDEPENDENT EVIDENCE NO ADDITION OUGHT TO HAVE BEEN MADE IN RESPECT OF ROUGH NOTINGS IN THE DIARY FOUND IN SEAR CH LD. AUTHORISED REPRESENTATIVE REITERATED HIS SUBMISSIONS AS MADE I N HIS APPLICATION. HE VEHEMENTLY ARGUED THAT THE OBJECTIO N RELATING TO THE ADDITION MADE BY AO IN RESPECT OF ROUGH NOTINGS IN THE DIARIES FOUND IN SEARCH WITHOUT CORROBORATION BY WAY OF IND EPENDENT EVIDENCE WAS ALSO RAISED SPECIFICALLY BEFORE THE L D.AO LD.CIT(A) AND ALSO BEFORE THIS HONBLE TRIBUNAL. HE TOOK US T HROUGH PARA NO. 64 PG. 98 OF ITAT ORDER OF ASSESSEE ARUN SAHLOT IN ITA NO. SANJAY MEHTA & ORS M.A. NOS 67 TO70/IND/2017 13 IT(SS).A.NOS.186 TO 192/IND/2012 AND 261 TO 267/IND /2012 WHICH READS AS UNDER : 64. BEFORE US THE CONTENTIONS OF LD. AUTHORISED RE PRESENTATIVE IS THAT THE ASSESSING OFFICER HAS NOT BROUGHT ANY CORROBORA TIVE MATERIAL ON RECORD TO INDICATE THAT SUCH PAYMENTS WERE ACTUALLY MADE BY THE ASSESSEE. 16. HE ALSO TOOK US THROUGH SUBMISSIONS EARLIER MA DE BEFORE THIS TRIBUNAL DURING THE REGULAR COURSE OF HEARING WHERE IN IT WAS REPEATEDLY ASSERTED AND ARGUED THAT NO INDEPENDENT CORROBORATIVE MATERIAL WAS BROUGHT EVEN WORTH THE NAME BY AO BE FORE MAKING ANY SUCH ADDITION ON ACCOUNT OF ROUGH NOTINGS IN TH E DIARY. HE HAS AGAIN FILED BEFORE US THE COPY OF THE SUBMISSIONS AND ARGUED THAT THIS ISSUE ALSO GOES TO THE ROOT OF THE CASE AND IS NECESSARY FOR CORRECT DETERMINATION OF TAX LIABILITY OF THE ASSES SEE AND HAVING REMAINED UNDECIDED CALLS FOR RECTIFICATION U/S. 25 4(2) OF INCOME TAX ACT 1961. 17. WE HAVE GONE THROUGH THE FACTS OF THE CASE SUB MISSIONS MADE BY THE LD.AR AND HAVE ALSO HEARD LEARNED DR ON THE ISSUE WHO HAS SUPPORTED THE ORDER OF THIS TRIBUNAL. 18. WE FIND THAT THIS VERY ISSUE GOES TO THE ROOT O F THE MATTER FOR DETERMINATION OF TAX LIABILITY OF THE ASSESSEE HAS NOT BEEN DECIDED SANJAY MEHTA & ORS M.A. NOS 67 TO70/IND/2017 14 BY THE BENCH THOUGH IT WAS RAISED BY THE ASSESSEE A ND HENCE IT WARRANTS RECTIFICATION U/S. 254(2) OF THE INCOME TA X ACT 1961. 19. WE OBSERVE THAT TWO DIARIES WERE FOUND FROM THE POSSESSION OF THE ASSESSEE NAMELY ARUN SAHLOT DURING THE COURSE O F SEARCH CONDUCTED ON 30.05.2008. THE ASSESSEE ARUN SAHLOT USED TO LIVE IN THIS HOUSE AND VACATED THE SAME WAY BACK IN 2003. I T REMAINED UNGUARDED FOR THREE YEARS AND A GUARD TO LOOK AFTER THE HOUSE WAS APPOINTED ONLY IN 2006.THE DIARY WAS FOUND IN A SCR AP FORM FROM A BISTER PETI AND INVENTORISED AS B-3.. ANOTHER DIARY WAS FOUND FROM PRESENT HOUSE OF ASSESSEE AT E3/10 ARERA COLONY B HOPAL RELATING TO AY 2009-10 INVENTORISED AS A-3. 20. AS REGARDS DIARY RELATING TO AY 2004-05 INVENTO RISED AS BS-3 WE TAKE NOTE OF THE FACT THAT THE ASSESSEE ALL ALON G HAS BEEN CONTENDING AND ARGUING SINCE INCEPTION THAT HE HAS NOT MADE ANY SUCH ALLEGED PAYMENTS NOTED IN THE DAIRY. IN THE SU BMISSIONS EARLIER MADE BEFORE BENCH ALSO HE REITERATED HIS ST AND EMPHATICALLY. HE STATED THAT THE ASSESSEE IS DIRECTOR OF RAJ EVEN TS AND ENTERTAINMENT PVT. LTD. WHICH LUNCHED A HINDI DAIL Y NEWSPAPER IN THE IMPUGNED FINANCIAL YEAR 2003-04. IT ALSO HAD A NEW BUSINESS OF SANJAY MEHTA & ORS M.A. NOS 67 TO70/IND/2017 15 CABLE TV DISTRIBUTION. HE IS ALSO DIRECTOR IN RAJ H OMES PVT. LTD. WHICH DEALS IN REAL ESTATE. BEING NEW IN THE FIELD OF MEDIA AND CABLE TV DISTRIBUTION ASSESSEE DID AGGRESSIVE PLANNING T O SCALE UP READERSHIP OF NEWSPAPER AND VIEWERSHIP OF CABLE TV. THIS DIARY RELATED TO ONLY THAT YEAR OF INITIAL PHASE OF BUSIN ESS PLANNING AND DEVELOPMENT. 21. ASSESSEE EXPLAINED THAT JOTTINGS IN THE IMPUGNE D DAIRY HAD NOTHING TO DO WITH ACTUAL FINANCIAL TRANSACTIONS AN D IT MERELY CONTAINED VARIOUS PROPOSALS WHAT HE INTENDS TO DO OR GET DONE REMINDERS APPOINTMENTS PLANNING BUSINESS TARGETS PROJECTIONS ETC. BUT NONE OF THEM HAVE MATERIALISED. IT WAS ALS O CONTENDED THAT MOST OF THE ENTRIES ARE DUMB AND DO NOT SHOW WHETHE R THESE ARE PAYMENTS OR RECEIPTS WHEREAS THE AO HAS ARBITRARILY TREATED ALL OF THEM AS PAYMENTS. IT WAS VEHEMENTLY SUBMITTED THAT THE AO DID NOT EVEN TRY TO CORROBORATE MUCH LESS CORROBORATED AND ACTED ONLY ON THE BASIS OF SUSPICION CONJECTURES AND SURMISES . IT WAS STATED THAT HAD THE ASSESSEE MADE SUCH HUGE PAYMENTS AS A LLEGED BY LD.AO HE WOULD NOT HAVE THROWN THE DIARY RECKLESSL Y IN AN UNGUARDED HOUSE FOR YEARS TOGETHER AND WOULD HAVE S URELY KEPT IT SANJAY MEHTA & ORS M.A. NOS 67 TO70/IND/2017 16 IN SAFE CUSTODY FOR MEMORANDUM PURPOSES. EVEN HE WO ULD NOT HAVE SCRAPPED THE JOTTINGS BY WAY OF CUTTING THE ENTRIES AS WAS DONE IN THIS CASE. HE FURTHER ARGUED THAT IF SUCH PAYMENTS IN LARGE NUMBERS AND FREQUENCIES WERE MADE AT LEAST SOME OT HER EVIDENCE IN THE FORM OF UNACCOUNTED BILLS KACHCHA RECEIPT F OR PAYMENT CASH FLOW STATEMENT OR THE LIKE WOULD HAVE BEEN FOUND IN EXTENSIVE SEARCH BUT NOTHING OF THE SORT WAS FOUND WHICH SP EAKS THE TRUTH. 22. HE WAS ALSO STATED THAT THE ENTRIES WERE MERELY PROPOSALS IS FURTHER PROVED FROM THE FACT THAT SIMILAR ENTRIES A RE REPEATED MANY TIMES FOR REMINDER PURPOSE AND NATURALLY NOBODY WOU LD MAKE EXACTLY IDENTICAL PAYMENT TO SAME PERSONS REPEATEDL Y. BUT THE AO HAS ADDED ALL SUCH ENTRIES. EVEN SOME PROPOSED RECE IPTS WERE JOTTED IN THE NOTINGS WHICH AO HAS TREATED AS PAYMENTS. I T WAS CONTENDED THAT THE JOTTINGS ARE IN ROUND FIGURES FURTHER VIND ICATES THAT THESE ESTIMATED FIGURES WERE NOTED ONLY FOR PLANNING PRO POSAL BUSINESS TARGETS PROJECTIONS ETC. IT WAS ALSO EXPLAINED THA T NO UNDISCLOSED SOURCE OF INCOME OR UNDISCLOSED CASH WAS FOUND IN T HE SEARCH OF ASSESSEE AND ONLY CASH OF RS. 15 350/- AND JEWELLER Y LESS THAN 500 GM. WAS FOUND FROM ASSESSEE DURING SEARCH WHICH SP EAKS FOR ITSELF. SANJAY MEHTA & ORS M.A. NOS 67 TO70/IND/2017 17 23. THE LD. AR ALSO STATED THAT THE ACTION OF THE L D.AO WAS WHIMSICAL AND ARBITRARY BECAUSE HE ACCEPTED PLEA OF THE ASSESSEE PARTLY THAT THE SCRIBBLING ARE MERE BUSINESS PROPOS ALS AND DID NOT MAKE ADDITIONS IN RESPECT OF SOME OF THESE ENTRIES LIKE ENTRY AT DIARY PG. NO. 89 PG.25 / SR. NO. 17 PG.48 / SR. N O. 9 PG.49 / SR. NO. 11 PG.60 / SR. NO. 8 PG. 70 / SR. NO. 6.IT WA S ARGUED THAT SUCH CASUAL AND ARBITRARY APPROACH OF THE AO IS IMPERMIS SIBLE IN LAW AS THE EXPLANATION OF THE ASSESSEE CANNOT BE ACCEPTED IN PART AND REJECTED IN PART AND FOR THIS PROPOSITION HE RELIED ON THE DECISION OF MEHTA PARIKH VS. CIT 30 ITR 181 (SC). 24. FOR THE PROPOSITION THAT ADDITION ON THE BASIS OF JOTTINGS IN THE DIARY CANNOT BE MADE WITHOUT ANY INDEPENDENT CORROB ORATIVE EVIDENCE AND NO ADDITION CAN BE MADE ON THE BASIS O F MERE SURMISES OR CONJECTURES THE LD. AR RELIED ON THE D ECISIONS OF ACIT VS. SATYAPAL WASSAN 10 ITJ 216 (JABALPUR) CIT VS. R AJ PAL SINGH RAM AVTAR 288 ITR 498 (ALL HC) ACIT VS. PRASHANT A HLUWALIA 92 TTJ 464 (CTK) AMARJIT SINGH BAKSHI V.ACIT 86 ITD 13 (D ELHI)(TM) BRIJLAL ROOPCHAND VS. ITO 40 TTJ 668 (INDORE) CIT VS. D K GUPTA 308 ITR 230 233 ( DELHI HC) CIT VS. ATAM VALVES 184 TAXMAN 6 (P&H) CIT VS. MAULIK KUMAR 307 ITR 137 (GUJ HC) MADANLAL NARENDRA KUMAR VS. SANJAY MEHTA & ORS M.A. NOS 67 TO70/IND/2017 18 ACIT 31 ITC 123 146-147 (INDORE) J.S.PARKAR VS. V B PALEKAR 94 ITR 616 644 ( BOMBAY) ACIT VS. SHAILESH S. SHAH 63 ITD 153 (MUM.) DHIRAJ LAL GIRDHARILAL V. CIT 26 ITR 736 (SC) DHAK ESHWARI COTTON MILLS V. CIT 26 ITR 775 (SC) S K GUPTA VS. DCIT 63 ITJ 532 (DELHI) AMAR NATWARLA SHAH VS. ACIT 60 ITD 560 564-565 (AH D.) CIT VS. KHAZAN SINGH & BROS. 304 ITR 243 (P&H) DD.MALHAN VS . DCIT 91 TTJ 947 (DELHI ) DCIT VS. VINOD KAMRA 102 TTJ 152 155 (JOD.) AND ATUL KUMAR JAIN VS. DCIT 64 TTJ 786 (DELHI). 25. WE HAVE GONE THROUGH THE WRITTEN SUBMISSIONS OF AR AND THE DECISIONS RELIED UPON BY HIM. WE FIND THAT AS REGAR DS DIARY FOUND RELATING TO AY 2004-05 FROM THE POSSESSION OF THE A SSESSEE ARUN SAHLOT THE ASSESSEE HAS BEEN EXPLAINING SINCE INCE PTION THAT JOTTINGS IN THE IMPUGNED DAIRY HAD NOTHING TO DO WI TH ACTUAL FINANCIAL TRANSACTIONS AND IT MERELY CONTAINED VARI OUS BUSINESS PROPOSALS REMINDERS APPOINTMENTS PLANNING BUSI NESS TARGETS PROJECTIONS ETC. HE FILED AN AFFIDAVIT TOO BEFORE A O ON OATH SOLEMNLY STATING THAT HE HAS NOT MADE ANY SUCH PAYMENTS AS P RESUMED AND ALLEGED BY THE AO. ASSESSEE ALSO ISSUED LETTERS U/ S. 131 OF THE ACT TO CALL THE RESPECTIVE PARTIES TO VERIFY THE FACTS BUT THE SAME WAS NOT DONE. IN THE STATEMENT RECORDED U/S. 132(4) OF THE ACT ALSO ASSESSEE SANJAY MEHTA & ORS M.A. NOS 67 TO70/IND/2017 19 NOWHERE ACCEPTED TO HAVE MADE ANY SUCH PAYMENTS ALL EGED TO HAVE BEEN RECORDED IN THE SEIZED DIARY AND HE ONLY AVER RED THAT THE DIARY CONTAINS MERELY WORK LIST. 26. WE ALSO TAKE NOTE OF THE FACT THAT DESPITE CATE GORICAL DENIAL OF ANY SUCH PAYMENTS BY THE ASSESSEE ARUN SAHLOT HE WAS NEITHER EXAMINED AS AUTHOR OF THE DIARY NOR WAS HE CROSS-EX AMINED AS DEPONENT OF THE AFFIDAVIT. WE TAKE NOTE OF THIS VER Y SIGNIFICANT AND IMPORTANT FACT OOZING OUT FROM AO ORDER THAT THE AO CLAIMS TO HAVE IDENTIFIED SO -CALLED RECIPIENTS OF THE ALLEGED PAY MENTS CONTAINED IN THE DIARY BY COLLECTING THEIR ADDRESSES AND EVEN PH ONE NUMBERS AS NARRATED IN HIS ASSESSMENT ORDER AT PAGE 55 AND 61- 65 BUT HE HAS NEITHER EXAMINED ANY OF THEM NOR EVEN TRIED TO TAKE PAIN TO CORROBORATE MUCH LESS CORROBORATED THE SAME BY WA Y OF INDEPENDENT EVIDENCE. 27. EVEN ONE EMPLOYEE ASIM ANSARI WAS SIMULTANEOU SLY SEARCHED AND WAS SIMULTANEOUSLY ASSESSED BY SAME AO AND ADDITION ON ACCOUNT OF THREE ALLEGED PAYMENTS TO HI M WERE MADE IN THE HANDS OF ASSESSEE TO THE TUNE OF RS. 8 25 000 ( 2 00 000 + 3 25 000 + 3 00 000) AT PAGE 46 ( TABLE) AT SR. 8 O F AO ORDER. THE SANJAY MEHTA & ORS M.A. NOS 67 TO70/IND/2017 20 AO HAS ALSO IDENTIFIED ASIM ANSARI AT PAGE 53 OF HI S ORDER/PARA 3 TO BE THE SAME PERSON WHO WAS ASSESSED BY HIM SIMULTAN EOUSLY. BUT EVEN IN CASE OF ASIM ANSARI ALSO NEITHER HE WAS EX AMINED BY AO NOR ANY CORRESPONDING INCOME IN THE HANDS OF THE AS IM ANSARI AS ALLEGED RECIPIENT WAS EVER MADE. 28. LD. COUNSEL FOR THE ASSESSEE HAS BROUGHT THE FA CTS ON RECORD TO DEMONSTRATE THAT THE ADDITIONS MADE BY THE LD. A .O ARE MERELY ON THE BASIS OF SCRIBBLING IN THE DIARY WHICH IS A ROUGH DOCUMENT AND NO NEXUS OF THE NOTES MADE IN THE DIARY HAVE BE EN ESTABLISHED WITH THE PERSON MENTIONED THEREIN NOR ANY CONNECTIO N OF THE ASSESSEE WITH ANY SUCH TRANSACTION OF ANY NATURE HA S BEEN ESTABLISHED. IT IS ALSO BEEN ARGUED BEFORE US THAT IN VIEW OF THE SETTLED JUDICIAL PRECEDENTS ADDITIONS CANNOT BE MAD E MERELY ON THE BASIS OF ROUGH JOTTINGS ON LOOSE PAPER OR DIARY AS NO SIGNATURE OR INITIAL OF THE MAKER ARE AVAILABLE AND NO CORROBORA TIVE EVIDENCE IS FOUND TO PROVE THAT THE TRANSACTION APPEARING IN JO TTINGS SO MADE IN THE DIARY OR LOOSE PAPER HAS ACTUALLY TAKEN PLACE. AFFIDAVIT HAS ALSO BEEN FILED BY THE ASSESSEE IN THIS REGARD. IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE AND OUR DISCUSSIONS MADE HEREIN ABOVE SANJAY MEHTA & ORS M.A. NOS 67 TO70/IND/2017 21 WE ARE OF THE CONSIDERED VIEW THAT THE ISSUE RAISED IN GROUND NO.5 IN IT (SS)A NO.187/IND/2012 IN THE CASE OF ARUN SAH LOT FOR ASSESSMENT YEAR 2004-05 NEEDS TO BE SET ASIDE TO T HE FILE OF LD. A.O FOR AFRESH EXAMINATION. ON PERUSAL IT SEEMS TH AT THE ADDITIONS ARE BASED MERELY ON ROUGH JOTTINGS AND ROUGH DIARY BUT STILL IN THE INTEREST OF JUSTICE AND FAIR PLAY WE ARE OF THE VIE W THAT THE ISSUE NEEDS TO BE EXAMINED AFRESH BY LD. A.O AFTER PROVID ING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND THE LD. A.O IS ALSO DIRECTED THAT IN VIEW OF THE SETTLED JUDICIAL PRECE DENTS AND DISCUSSIONS HEREIN ABOVE THE ADDITION CAN BE MADE O N THE BASIS OF THE SEIZED DIARY ONLY IF PROPER NEXUS IS ESTABLISHE D AND SAME IS CORROBORATED WITH RELEVANT MATERIAL. IF THE LD. A. O IS NOT ABLE TO ESTABLISH ANY SUCH NEXUS BETWEEN THE NOTINGS IN THE SEIZED DIARY AND THE ACTUAL TRANSACTION HAVING TAKEN PLACE THEN NO ADDITION DESERVES TO BE MADE AND IF FOUND OTHERWISE LD. A.O CAN MAKE ADDITION AS PERMISSIBLE UNDER THE LAW. IN THE RESU LT GROUND NO.5 FOR ASSESSMENT YEAR 2004-05 IN THE CASE OF ARUN SAH LOT IN IT (SS)A NO.187/IND/2012 IS ALLOWED FOR STATISTICAL PURPOSES . SANJAY MEHTA & ORS M.A. NOS 67 TO70/IND/2017 22 29. SIMILARLY AS REGARDS ADDITION OF RS. 2 00 000/ - IN THE HANDS OF ARUN SAHLOT IN AY 2009-10 ON THE BASIS OF NOTING S IN THE DIARY INVENTORIZED AS A-3 WE FIND THAT THE ASSESSEE DEPO SED IN THE AFFIDAVIT FILED BEFORE AO THAT HE HAS NOT MADE ANY PAYMENT TO MR. SAMAL AND EXPLAINED IN THE AFFIDAVIT THAT IT WAS ME RE PROPOSAL TO OFFER EMPLOYMENT TO ONE MR. SAMAL WHICH IS EXPLICIT FROM THE WORD SALARY WRITTEN THEREIN. BUT THE IDEA BEING UNILAT ERAL ONE AND AS THE ASSESSEE DID NOT TALK TO MR. SAMAL ON THE PROPOSAL HE DROPPED THE IDEA. 30. WE NOTE THAT HERE ALSO THE LD. AO DID NOTHING TO CORROBORATE MUCH LESS CORROBORATED HIS PRESUMPTION OF UNDISCLO SED PAYMENT AND WITHOUT FINDING ANY ADVERSITY IN THE DEPOSITION OF THE ASSESSEE HE WENT ON TO MAKE ADDITION ONLY ON SURMISES AND CO NJECTURES BUT SINCE WE HAVE ALREADY SET ASIDE THE ISSUE OF ADDITI ONS MADE ON THE BASIS OF SEIZED DIARY B-3 TO LD. A.O FOR AFRESH EXA MINATION WE ARE OF THE VIEW THAT THE ISSUE OF ADDITIONS MADE AT RS. 2 00 000/- RAISED BY THE ASSESSEE IN GROUND NO.4 OF IN IT(SS)A NO.19 2/IND/2012 WHICH WAS MADE BY THE LD. A.O ON THE BASIS OF SEIZE D DIARY MARKED AS A-3 IS ALSO SET ASIDE TO THE FILE OF LD. A.O FOR FRESH EXAMINATION SANJAY MEHTA & ORS M.A. NOS 67 TO70/IND/2017 23 AND IS HEREBY DIRECTED TO GIVE REASONABLE OPPORTUNI TY OF BEING HEARD TO THE ASSESSEE AND SHOULD MAKE ADDITION ONLY IF NE XUS WITH CORROBORATIVE EVIDENCE IS ESTABLISHED BETWEEN THE J OTTINGS IN THE DIARY WITH THE ACTUAL TRANSACTION HAVING TAKEN PLAC E. 31. IN THE RESULT ALL THE MISCELLANEOUS APPLICATION S FILED BEFORE US ARE ALLOWED TO THE EXTENT OF THE CLAIM THAT TWO COM MON ISSUES REMAINED TO BE ADJUDICATED BY THIS TRIBUNAL AND FUR THER THE TWO ISSUES MENTIONED HEREIN ABOVE WHICH REMAINED TO BE ADJUDICATED BY THIS TRIBUNAL AT THE TIME OF ORIGINAL HEARING AR E HEREBY ALLOWED FOR STATISTICAL PURPOSES AS PER THE TERMS INDICATED HEREIN ABOVE. THE ORDER PRONOUNCED IN THE OPEN COURT ON 25.03.2021. SD/- SD/- ( KUL BHARAT) (MANISH B ORAD) JUDICIAL MEMBER ACC OUNTANT MEMBER / DATED : 25 TH MARCH 2021 /DEV COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CIT (A) CONCERNED/ DR ITAT INDORE/GUARD FILE. BY ORDER ASSTT.REGISTRAR I.T.A.T. INDORE