AJAY C. MEHTA, MUMBAI V. ASST CIT CIR 44, MUMBAI

CO 145/MUM/2014

• Counselvise Citation: [2014] 123 COUNSELVISE.COM (IT) 0170 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 2 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 26-12-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2009-2010
• Appeal Filed On: 24-07-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained investment; Unexplained expenditure; Loose papers; Opportunity of being heard; Principle of natural justice; Period of limitation; Additional evidence; Time period of passing order
• Section: 153A; 68; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G, MUMBAI . . . . . . . . , , BEFORE SHRI R.C. SHARMA, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER ITA NO. : 3767/MUM/2013 , (ASSESSMENT YEAR: 2010-11) DCIT, CENTRAL CIRCLE - 44, ROOM NO. 656, 6 TH FLOOR, AAYAKAR BHAVAN, M K ROAD, MUMBAI -400 020 VS SHRI CHIMANLAL K MEHTA, 93 & 94, KOREGAON PARK, PUNE -411 001 .: PAN: AAFPM 0905 P (APPELLANT) ! (RESPONDENT) APPELLANT-ASSESSEE BY : S/SHRI H P MAHAJANI, S V JOSHI, DEEPAK DESAI, DIGANT MEHTA RESPONDENT-REVENUE BY : SMT ABHA KALA CHANDA CROSS OBJECTION (CO) 148/MUM/2014 ARISING OUT OF ITA NO. : 3767/MUM/2013, AY 2010-11 SHRI CHIMANLAL K MEHTA, KOREGAON PARK, PUNE -411 001 .: PAN: AAFPM 0905 P VS ACIT, CENTRAL CIRCLE - 44, ROOM NO. 656, MUMBAI -400 020 ! (RESPONDENT) CROSS OBJECTOR ASSESSEE BY : S/SHRI H P MAHAJANI, S V JOSHI, DEEPAK DESAI, DIGANT MEHTA RESPONDENT BY : SMT ABHA KALA CHANDA '#$ % &' /DATE OF HEARING : 10-11-2014 ()* % &' / DATE OF PRONOUNCEMENT : 26-12-2014 SR. NO. ITA/CROSS OBJECTION NO. & NAME OF THE ASSESSEE VS APPEAL BY ASSESSEE OR DEPARTMENT A.Y. CIT(A)S ORDER DATE 1 3777/MUM/2013- M/S YERROWADA INVESTMENT LTD, DEEPAK COMPLES OFF GOLF COURSE ROAD, SHASTRINAGAR, YERWADA, PUNE -411006 DCIT, CIR.44, MUM DEPARTMENT 2010-11 11.02.2013 2 CO 150/MUM/2014- M/S YERROWADA INVESTMENT LTD, 10-B BAKHTAWAR, NARIMAN POINT, MUMBAI -400 021 .: PAN: AAACY 0186 C ACIT, CC-44 MUM ASSESSEE 2010-11 11.02.2013 3 3765/MUM/2013 SHRI DEEPAK C MEHTA, 93 & 94 KOREGAON PARK, PUNE -411 001 ACIT, CC.44, MUM DEPARTMENT 2010-11 11.02.2013 4 CO 149/MUM/2014- SHRI DEEPAK C MEHTA, GR. FLOOR, KEJRIWAL HOUSE, 7-N, GAMADIA ROAD, MUMBAI -400 026 .: PAN: AAHPM 6688 F ACIT, CC-44 MUM ASSESSEE 2010-11 11.02.2013 5 3766/MUM/2013 SHRI SHAILESH C MEHTA, 93 & 94 KOREGAON PARK, PUNE -411 001 ACIT, CC.44, MUM DEPARTMENT 2010-11 11.02.2013 6 CO 159/MUM/2014- SHRI SHAILESH C MEHTA, 93 SUM, SOUTHMAN ROAD, KOREGAON PARK, PUNE -411 001 .: PAN: AAFPM 3448 R ACIT, CC-44 MUM ASSESSEE 2010-11 11.02.2013 7 3764/MUM/2013 SHRI AJAY C MEHTA, 93 & 94 KOREGAON PARK, PUNE ACIT, CC.44, DEPARTMENT 2010-11 25.02.2013 SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 2 -411 001 MUM 8 CO 146/MUM/2014- SHRI AJAY C MEHTA, GROUND FLOOR, KEJRIWAL HOUSE, 7-N, GAMADIA ROAD, MUMBAI -400026 .: PAN: AAFPM 3456 K ACIT, CC-44 MUM ASSESSEE 2010-11 25.02.2013 APPEALS HEARD ON 11.11.2014 SR. NO. ITA/CROSS OBJECTION NO. & NAME OF THE ASSESSEE VS APPEAL BY ASSESSEE OR DEPARTMENT A.Y. CIT(A)S ORDER DATE 1 3778/MUM/2013 - SHRI CHIMANLAL K MEHTA, 93 & 94, KOREGAON PARK, PUNE -411 001 ACIT, CC 44, MUM DEPARTMENT 2009-10 11.02.2013 2 CO 147/MUM/2014- SHRI CHIMANLAL K MEHTA, GROUND FLOOR, KEJRIWAL HOUSE, 7-N, GAMADIA ROAD, PUNE -411 026 .: PAN: AAFPM 0905 P ACIT, CC 44, MUM ASSESSEE 2009-10 11.02.2013 3 3779/MUM/2013 - SHRI AJAY C MEHTA, 93 & 94, KOREGAON PARK, PUNE -411 001 DCIT, CC 44, MUM DEPARTMENT 2009-10 11.02.2013 4 CO 145/MUM/2014- SHRI AJAY C MEHTA, GROUND FLOOR, KEJRIWAL HOUSE, 7-N, GAMADIA ROAD, PUNE -411 026 .: PAN: AAFPM 3456 K ACIT, CC 44, MUM ASSESSEE 2009-10 11.02.2013 '#$ % &' /DATE OF HEARING : 11-11-2014 ()* % &' / DATE OF PRONOUNCEMENT : 26-12-2014 , , , , O R D E R , : :: : PER VIVEK VARMA, JM: THE APPEALS FILED BY THE DEPARTMENT & CORRESPONDING CROSS OBJECTIONS FILED BY THE ASSESSEE, AS CAPTIONED ABOV E, HAVE BEEN FILED AGAINST THE ORDER OF THE CIT(A) 36, MUMBAI, FOR ASSESSMENT YEAR 2009-10 AGAINST THE DIFFERENT ORDERS OF [ALL DATED 31.01.2012, EXCEPT IN THE CASE OF SHRI AJAY C MEHTA , WHICH IS DATED 25.02.2013], MUMBAI AND ANOTHER TWO APPEALS OF THE SAID GROUP & CORRESPONDING CROSS OBJECTIONS HAVE B EEN FILED AGAINST DIFFERENT ORDERS OF THE CIT(A)-36, MUMBAI, COMMONLY DATED 11.02.2013 FOR ASSESSMENT YEAR 2009-10. AS ALL THE APPEALS IN THESE GROUP, WHEREIN THE GROUNDS RAISED A RE COMMON, THEREFORE, THEY HAVE BEEN CLUBBED HEARD TOGETHE R AND SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 3 ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER FOR THE S AKE CONVENIENCE & BREVITY. WE SHALL TAKE-UP ITA NO. 3767/MUM/2013, AS A LEAD APPEAL IN THIS GROUP, WHEREIN, T HE DEPARTMENT HAS RAISED THE FOLLOWING GROUNDS: ITA NO. : 3767/MUM/2013 : DEPARTMENT APPEAL : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT(A) ERRED IN ANNULLING THE ASSESSMENT ON THE GROUND OF LIMITATION BY HOLDING THAT THE C.D. WAS CREATED ON 28.3.2003, FALLING BEYOND SIX YEARS LIMITATION PERIOD PRESCRIB ED IN SECTION 153A(1) WITHOUT VERIFYING THE AUTHENTICITY AND ALLE GED DATE OF CD THROUGH FORENSIC EXPERT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) ERRED IN ANNULLING THE ASSESSMENT ON THE BASIS OF SURMISES AND PRESUMPTIONS WITHOUT VERIFYING THE FAC TS AS AVAILABLE ON RECORD. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS . 35,47,00,000/- ON ACCOUNT OF UNACCOUNTED RECEIPTS D UE TO FAMILY ARRANGEMENT IGNORING THE PRESUMPTIONS WITH R EGARD TO THE ENTRIES FOUND IN SIZED MATERIAL AS PER PROVISIO NS OF SECTION 292C R.W.S. 132(4A) OF I.T. ACT. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS . 37,63,00,000/- ON ACCOUNT OF UNACCOUNTED PAYMENTS D UE TO FAMILY ARRANGEMENT IGNORING THE PRESUMPTIONS WITH R EGARD TO THE ENTRIES FOUND IN SEIZED MATERIAL AS PER PROVISI ONS OF SECTION 292C R.W.S. 132(4A) OF I.T. ACT. 5. ON THE FACTS AND IN LAW, THE LD. CIT(A) ERRED IN ANNULLING THE ASSESSMENT AND DELETING THE ADDITIONS BY RELYING ON THE ADDITIONAL EVIDENCE IN THE FORM OF FAMILY AGREEMENT S DATED MARCH 2000 AND 01.01.2003 BUT IGNORING THAT THESE A GREEMENTS INDICATED FINANCIAL TRANSACTIONS DURING THE YEARS C OVERED U/S 153A OF THE I.T. ACT. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) ERRED IN ADMITTING THE ADDITIONAL EV IDENCE IN VIOLATION OF RULE 46A OF THE I.T. RULES 1962 WITHOU T PROVIDING THE AO OPPORTUNITY TO COMMENT ON MERITS. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFI CER BE RESTORED. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GR OUND AND/OR ADD NEW GROUNDS WHICH MAY BE NECESSARY. 2. THE FACTS ARE THAT THERE WAS A SEARCH ACTION U/S 1 32(1) ON DEEPAK GROUP ON 21.07.2009 AND THE INSTANT ASSESSMENT IS A CONSEQUENCE OF THE SEARCH. 3. ASSESSMENT PROCEEDINGS, CONSEQUENT TO SEARCH WERE INITIATED BY THE AO AND THE AO RAISED CERTAIN QUERIES WITH REGARD SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 4 TO CERTAIN LOOSE PAPERS, MARKED AS ANNEXURE-A-5, LOOSE PAPER BUNDLE NO. 9. 4. THIS PAPER HAD CERTAIN NOTINGS, WHICH ARE AS THE FOLLOWIN G ABBREVIATIONS, USED IN THE SEIZED PAPERS: S.NO. NAME ABBREVIATION 1 MR. CHIMANLAL KHIMCHAND MEHTA CKM 2 MR. DEEPAK CHIMANLAL MEHTA DCM 3 MR. SAILESH CHIMANLAL MEHTA SCM 4 MR. AJAY CHIMANLAL MEHTA ACM 5 M/S. DEEPAK FERTILIZERS & PETROCHEMICALS CORPORATION LTD. DFPCL 6 M/S. DEEPAK NITRATE LTD DNL 7 M/S. YERROWADA INVESTMENTS LTD YIL PAGE NO. QUERY 37 & 38 CAPITAL A/C. OF ALL FAMILY MEMBERS & THEIR GROUPS SHOWS AMOUNTS IN LAKHS MENTIONING CAPITAL, LOANS TAKEN, CURRENT LIABILITIES, DEFICITS, IMMOVABLE ASSETS, ASSETS, LOANS GIVEN & THE BALANCE & FURTHER MENTIONS THE CASH RECEIVED & CASH PAID. THE AMOUNT SHO WN IN THESE CAPITAL ACCOUNTS APPEARS TO BE IN LAKHS. THE BALANCE SHEETS OF THE GROUP CONCERNS ARE REPRODUCED AS UNDER: DCM & GROUP CAPITAL 1000 MARYLAND 392 OTHER LIABILITY (TAX ON YIL) 67 GOTRI 17 DNL 647 OTHER 4 STOCK (OTHER) 6 BALANCE 1 1067 1067 CASH RECD. + 1,187 CASH PAID - 1,186 1 ACM & GROUP CAPITAL 2951 F.A. 82 LOAN TAKEN 411 GOTRI 17 CURRENT LIAB. 416 MARYLAND 279 LOAN TO OTH 243 CURR. ASSETS 705 BALANCE 2452 3778 3778 CASH RECD. + 4,939 CASH PAID - 2,499 2,440 +12 2,452 SCM & GROUP CAPITAL 806 GOTRI 17 LOAN TAKEN 84 BUNGLOW 396 SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 5 DEFICIT -WCCL-2200 -OTHERS 753 2953 DFPCL-SH 2,153 YIL TDR SH. 94 LOANS TO OTHERS 10 LOAN TO SMART 430 3843 3843 CASH RECD. + 668 CASH PAID - 3,621 DEFICIT 2,953 CKM & GROUP CAPITAL 1,384 F.A. 77 LOAN TAKEN 2,924 GOTRI 21 CURR. LIAB. 2,924 YIL 2,682 DEFICIT 216 YIL (STOCK) 325 BARODA 11 INV. SHARES-OTH. 305 3843 STOCK OTHERS 856 JEWELLERY 21 LOAN TO OTHERS 164 CURR. ASSETS-OTH 370 4,832 4,832 CASH RECD. + 3,547 CASH PAID - 3,763 DEFICIT 216 YIL CAPITAL 2537 DFPCL SHARES 597 CURR. LIAB. 10 LOAN TO OTHERS 35 CURRENT ASSETS -OTHERS -CKM -SCM 19 216 753 CASH & BANK BAL. 927 2,547 2,547 CASH RECD. + 1,896 CASH PAID 969 LOAN TO CKM/SCM SURPLUS 927 WCCL CAPITAL 72 F.A. 1 LOAN OTHERS 2,200 LOAN TO SCM 2,200 CURR. LIAB. 308 LOAN TO OTHERS 118 CURR. ASSETS-OTH. 29 CASH & BK. BAL. 232 2,580 2,580 CASH RECD. + 2,448 CASH PAID - 2,216 SURPLUS 232 PL. RECONCILE THE SAME WITH YOUR CAPITAL A/C., BALA NCE SHEET, & WEALTH TAX STATEMENTS. IN CASE OF NON SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 6 SUBMISSION OF DETAILS & EXPLANATION & RECONCILIATIO N OF THESE TRANSACTIONS, PL. EXPLAIN WHY YOUR CAPITAL A/ C. SHOULD NOT BE TAKEN AS PER THESE PAPERS & THE CASH PAYMENTS & CASH RECEIPTS SHOULD NOT BE CONSIDERED OUTSIDE THE BOOKS OF A/C. & YOUR INCOME BE DEDUCED ACCORDINGLY? FURTHER, PL. PROVE THE GENUINENESS, CREDITWORTHINESS & IDENTITY OF THE LOANS TAKEN & TH E CURRENT LIABILITIES. IN CASE OF FAILURE TO SUBMIT T HE RELEVANT DETAILS/EVIDENCES, THE SAME WOULD BE TREAT ED AS INCOME OF THE RESPECTIVE PERSONS U/S 68 OF THE I T ACT, FOR THE RELEVANT YEAR. 5. THE AO SOUGHT EXPLANATION AND DECODIFICATION OF THE ABO VE NOTINGS. 6. THE ASSESSEE VIDE LETTER DATED 26.11.2011, SUBMITTED, THE PAPER CONTAINS GROUPWISE PROBABLE BALANCE SHEE TS. IT SEEMS THAT THIS STATEMENT IS PREPARED SOMEWHERE IN MARCH 2003. THIS GROUP BALANCE SHEET ARE PREPARED TO ASCE RTAIN THE SITUATION OF ASSETS AND THE ABILITIES AFTER GIVING EFFECT TO SOME TRANSACTIONS IN LINE WITH FAMILY ARRANGEMENT THOUGH T BY SHRI CKM AT THAT TIME. BROADLY SPEAKING AROUND 2003 SHRI CKM HAD THOUGHT OF GIVING CONTROL OF DFPCL TO SHRI SCM, AND CONTROL OF DEEPAK NITRITE TO SHRI DCM, SHRI ACM WAS TO BE GIVE N LIQUID FUND IN THE FORM OF CAPITAL IS AND SHRI CKM HAD DEC IDED TO KEEP ALL THE REAL ESTATE PROPERTIES AND LIABILITIES RELA TED TO THE REAL ESTATE. NOW GO GIVE EFFECT TO THE ABOVE DECIDED FAMILY ARRA NGEMENT, IT WAS REQUIRED TO TRANSFER/SELL SOME OF THE ASSETS FR OM SOME FAMILY MEMBERS TO OTHER FAMILY MEMBERS AT MARKET RA TE. FOLLOWING TYPE OF TRANSACTIONS WOULD HAVE A RISE TO TAKE PLACE AMONG ALL THE FAMILY MEMBERS. 1) SHRI DCM GROUP TO RETAIN SHARES OF DNL IN HIS FOLD AND SHRI DCM GROUP WAS REQUIRED TO TRANSFER OTHER ASSETS SUC H AS SHARES OF DFPCL TO SHRI SCM GROUP AND SHARES OF YIL TO SHRI CKM GROUP. 2) SHRI ACM GROUP WAS REQUIRED TO TRANSFER ALL THE SHA RES OF DFPCL IN FAVOUR OF SHRI SCM GROUP, ALL THE SHARES O F DNL IN FAVOUR OF SHRI DCM GROUP AND ALL THE SHARES OF YIL TO SHRI CKM GROUP. 3) SHRI SCM GROUP WAS REQUIRED TO RETAIN ALL THE SHARE S OF DFPCL GROUP AND TRANSFER ALL THE SHARES OF DNL TO S HRI DCM GROUP AND ALL THE SHARES OF YIL TO SHRI CKM GROUP. 4) SHRI CKM GROUP WAS REQUIRED TO RETAIN ALL THE SHARE S OF YIL AND WAS REQUIRED TO TRANSFER ALL THE SHARES OF DFPC L TO SHRI SCM GROUP AND TRANSFER OF THE SHARES OF DNL TO SHRI DCM GROUP. NOW WE ALSO WANTED TO KNOW WHAT WILL BE THE PICTURE OF ASSETS AND LIABILITIES OF ALL THE ABOVEMENTIONED GROUPS AF TER THE ABOVE SAID FAMILY ARRANGEMENT TRANSACTION WILL BE EXECUTE D. ACCORDINGLY WE HAVE PREPARED PROBABLE BALANCE SHEET S OF ALL THE GROUPS OF SHRI CKM AND FAMILY ASSUMING THAT THE ABO VE SAID FAMILY TRANSACTIONS WILL HAPPEN. THUS YOU WILL SEE THAT IN THE BALANCE SHEET OF SHRI DCM GROUP DFPCL SHARES AND YIL SHARES ARE REMOVED AND DNL SHA RES ARE SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 7 RETAINED. IN SHRI ACM GROUP ALL SHARES OF DFPCL AND DNL AND YIL ARE REMOVED. IN SHRI SCM GROUP ALL SHARES OF DN L AND YIL ARE REMOVED BUT DFPCL SHARES (BOTH FULLY PAID AND P ARTLY PAID) ARE KEPT. IN SHRI CKM ALL THE SHARES OF DFPCL AND D NL ARE REMOVE AND SHARES OF YIL ARE KEPT OR ADDED/PURCHASE D FROM OTHER GROUP. IN THIS PROCESS OF BUYING AND SELLING VARIOUS ASSET S AS PER THE FAMILY ARRANGEMENT THINKING, EACH GROUP WILL BE EIT HER REQUIRED TO TAKE LOAN TO PURCHASE THE SHARES/ASSETS AT MARKE T VALUE OR EACH GROUP MAY HAVE SURPLUS FUNDS, IF NO ASSETS ARE TO BE PURCHASED AND ONLY SALE OF ASSETS TO HAPPEN. THESE TRANSACTIONS WILL FINALLY LEAD TO SURPLUS BALANCES IN SOME OF THE GROUP AND DEFICIT IN THE BANK BALANCES IN OTHER GRO UP. ON THE BASIS OF ABOVE EXPECTED TRANSACTIONS , WE HA D DRAWN UP PROBABLE BALANCE SHEET GROUPWISE AFTER GIVING EFFEC T TO THE ABOVE SET TRANSACTIONS TO DETERMINE WHICH GROUP WIL L REMAIN WITH SURPLUS FUNDS AND WHICH GROUP WILL NEED FUNDS SO THAT EXECUTION OF THE ABOVE SET TRANSACTION TAKES PLACE. THUS YOU WILL SEE THAT ALL THE PROBABLE BALANCE SHE ETS ARE PREPARED ACCORDINGLY. WE HAD DECIDED THE ABOVE SAID APPROACH AND TO A LAR GE EXTENT WE HAVE IMPLEMENTED ALSO BUT TIMING OF IMPLEMENTATI ON WERE DIFFERENT FOR DIFFERENT ASSETS/LIABILITIES. BROADLY ALL THESE ENTITIES CONTINUE TO HAVE THE ASSETS MENTIONED AND SOME LIAB ILITIES HAVE BEEN DISCHARGED. IT WILL TAKE TIME TO CONSOLIDATE T HE ENTITIES TO SHOW YOU THE PRESENT STATUS WHICH WILL REFLECT SIMI LAR PICTURE AMONG THE FAMILY ONLY BUT SINCE THESE WERE PROTECTE D BALANCE SHEETS MORE FOR M I S AND DUE TO DIFFERENT PARAMETE RS ASSESSMENT AT THAT TIME LIKE MARKET RATE AT WHICH S HARES WILL BE PURCHASED OR SOLD, MARKET RATE AT WHICH PROPERTY WI LL BE SOLD, THE TIMING OF THE DISCHARGING LIABILITY, ETC. HOWEV ER WE CAN BRING THE BOOKS OF ACCOUNTS FOR VERIFICATION OF THE POSIT ION AS OF 2009 OR 2011. WE HAVE FILED ALL THE INCOME TAX RETURNS AND WEALTH TAX RETURNS WHEREVER REQUIRED FOR ALL THESE YEARS AND THE DEPAR TMENT CAN VERIFY THE SAME. IT WILL BE GROSS INJUSTICE IF PROJECTIONS AND ITS I MPLEMENTATION PLANNING PAPERS OF THE ENTIRE FAMILY MATCHING WITH EACH OTHERS OBLIGATIONS AND RIGHTS ARE CONSTRUED AS TRANSACTION S OUTSIDE BOOKS AND TREATED AS CASH PAYMENT AND CASH RECEIPT. SINCE PROJECTIONS HAVE BEEN MADE BASED ON PURCHASE AND SALE OF PROBABLE VALUE OF ASSETS AND SUBSEQUENTLY RESULT ING IN ASSETS CREATION OR DAILY ABILITY CREATION CANNOT BE PROVED FROM THIS PAPERS. HOWEVER AS MENTIONED EARLIER THE BOOKS OF A CCOUNTS BASED ON ABOVE APPROACH WILL SLOW THE LOAN/LIABILIT IES, ETC. FOR YOUR VERIFICATION AND NEED NOT BE CONSTRUED OTHER W AY|. 7. THE AO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESS EE, CAME TO THE VIEW THAT THE NOTINGS OF CASH PAID AND CASH RECEIVED HAVE TO BE READ, AS SUCH, AS THERE WAS ACTUAL CASH TRANSACTION AND HE, THEREFORE, ADDED RS. 35,47,00,000/- CASH RECEIVED U/S 6 8 AND RS. 37,63,00,000/- CASH PAID AS UNACCOUNTED PAYMENT. SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 8 8. AGAINST THIS ORDER OF THE AO, THE ASSESSEE APPROACHE D THE CIT(A), BEFORE WHOM, THE ASSESSEE REITERATED HIS SUBMISSIONS MADE ON THE ADDITION MADE BEFORE THE AO. HE FURTHER SUBMITTED ON THE ISSUE OF LIMITATION THE AUTHORIZED REPRESEN TATIVE SUBMITTED THAT THE ADDITION HAS BEEN MADE IN THE CONTEXT AND WITH REFERENCE TO THE 'FAMILY ARRANGEMENTS'. HE SUBMITTED THAT THE FIRST DEED WAS IN MARCH, 2000 AND THE SECOND ONE ON JANUARY, 2003. THUS, THE ASSESSMENT YEARS RELEVANT WOULD BE A.Y, 2000-01 AND / OR A.Y. 2003-04. BOTH THESE YEARS FALL BEYOND THE PERIOD OF SIX YEARS I.E. FROM A.Y.2004-05 TO 2009- 10 FOR WHICH THE ASSESSMENTS U/S.153A COULD HAVE BE EN MADE & HAVE ACTUALLY BEEN MADE BY THE AO. HE SUBMITTED THAT COP IES OF BOTH THE FAMILY AGREEMENTS ARE PART OF THE SEIZED MATERIAL. HE SUBMITTED THAT THE AO HAS CIRCUMVENTED THIS DIFF ICULTY AND MADE THE ADDITION IN A.Y.2010-11 BY OBSERVING THAT 'SINCE TH E YEAR OR DATE HAS NOT BEEN SPECIFIED IN THE SEIZED DOCUMENT, IT WOULD BE CONSTRUED AS IF THE DOCUMENT & THE ENTRIES THERE-ON PERTAIN TO THE YEAR INCIDENTAL TO THE SEARCH, VIZ.A.Y.2010-11'. THE AUTHORIZED REPRESENTATIVE SUBMITTED THAT THERE IS NO BASIS OR FACTUAL BACKGROUND FOR SUCH A STEP AND IN FACT NO SUCH ADDI TION WAS WARRANTED EITHER IN A.Y. 2010-11 OR IN ANY OTHER YEAR. HE FURTHER SUBMITTED THAT THE WORKINGS OF REDISTRIB UTION OF ASSETS AS PER PAGE NOS.37 & 38 WHICH ARE THE BASIS FOR THE ASSESS MENT HAVE ALSO BEEN DRAWN UP PRIOR TO 31 MARCH, 2003 AS IS APPAREN T FROM THE SEIZED CD 19. HE FURTHER SUBMITTED THAT CD NO.2, ON BEING OPENED SHOWED ANOTHER FIVE PAGES PERTAINING TO GROUP BALANCE SHEETS. THESE FIV E PAGES ARE THE BASIS FOR PREPARATION OF TWO PAGES NOS.37 & 38, THE CAUSE OF ADDITION IN THE A.Y. 2010-11. THESE FIVE PAGES HAVE VERY CLEAR HEAD INGS AS 'BALANCE SHEET AS ON 13/03/2003'. HE SUBMITTED THAT INFORMATION CONTAINED IN THE TWO PAGES I.E. 37 & 38 PERTAIN TO THE PERIOD BEFORE 31/03/2003 AND HENCE A DDITIONS MADE BASED ON THESE TWO PAGES ARE TIME BARRED. TO DEAL W ITH THE QUESTION OF LIMITATION AND, INCIDENTAL THERETO THE MERITS OF TH E CASE, THE ENTIRE FACTUAL CONSPECTUS OF THE MATTER HAS BEEN EXAMINED BY ME. F OR THIS PURPOSE THE SUBMISSIONS MADE BY THE AUTHORIZED REPRESENTATIVE O N THE MERITS OF THE MATTER ARE SUMMARIZED BELOW: A. THE APPELLANT IS THE FATHER OF, AMONG OTHERS, DEEPA K (DCM) (ELDEST SON), SAILESH (SCM) AND AJAY (ACM). HE IS T HE FOUNDER OF THE DEEPAK GROUP OF COMPANIES WHICH INCLUDE TWO LISTED COMPANIES DEEPAK FERTILIZERS AND PETROCHEMICALS CORPORATION LTD. (DF PCL) AND DEEPAK NITRITE LTD. (DNL). THE GROUP OWNS VARIOUS ASSETS A ND PROPERTIES AND HAS BEEN CARRYING ON VARIOUS BUSINESSES OVER THE LA ST SEVERAL DECADES. B. THERE WERE DISPUTES WITHIN THE FAMILY. THE APPELLAN T, WHO IS PRESENTLY INTO HIS EIGHTIES, WANTED TO EVOLVE A SUC CESSION PLAN THE AIM OF WHICH WAS PEACE AND HARMONY IN THE FAMILY. HE ALONG WITH HIS WIFE MRS. KANTA MEHTA DESIRED TO RELINQUISH IN FAVOR OF THEIR SONS, THEIR INTERESTS IN THE TWO LISTED COMPANIES DFPCL AND DNL . C. IN ORDER TO PRESERVE PEACE AND HARMONY IN THE FAMIL Y AND, WITH A VIEW TO PUT AN END TO/PREVENT FINANCIAL DISPUTES AND DIFFERENCES BETWEEN THE APPELLANT-FATHER AND HIS AFORESAID THRE E SONS, IN MARCH, 2000 OR SO THE APPELLANT, HIS WIFE AND THREE SONS E NTERED INTO A FAMILY AGREEMENT DRAFTED BY M/S. UDWADIA, UDESHI AND BERGI S, SOLICITORS AND ADVOCATES. THE AUTHORIZED REPRESENTATIVE SUBMITTED THAT 2000 FAMILY AGREEMENT FORMS PART OF THE SEIZED MATERIAL (PAGES 13 TO 26 OF THE PAPER BOOK). SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 9 D. THE FIRST FAMILY AGREEMENT WAS ENTERED INTO IN MARC H, 2000, THIS AGREEMENT ALSO FORMS PART OF THE SEIZED MATERI AL. E. DESPITE THIS AGREEMENT THE DISPUTES DID NOT DIE DOW N WHEREUPON A FRESH FAMILY AGREEMENT WAS DRAWN UP BY M/S. UDWADIA, UDESHI AND BERGIS, SOLICITORS, IN JANUARY, 2003. TH IS AGREEMENT ALSO FORMS PART OF THE SEIZED MATERIAL (PAGES 1 TO 12 OF THE PAPER BOOK). F. IN TERMS OF THE 2003 FAMILY AGREEMENT THE FAMILY SH ARES IN DFPCL AND DNL, WHICH WERE NOTIONALLY VALUED FOR THI S LIMITED PURPOSE, WERE TO BE AGAIN DIVIDED EQUALLY AMONG THE THREE SO NS IN SUCH A WAY THAT EACH SON WAS TO RECEIVE ASSETS OF THE VALUE OF RS.53 CRORES. THIS AGREEMENT ALSO ENVISAGED INTER SE TRANSFER OF SHARES OF DFPCL AND DNL AND OTHER FAMILY ASSETS AND LIABILITIES TO BE RETAINED BY THE APPELLANT AND HIS WIFE. G. THE 2003 AGREEMENT ALSO PROVIDED FOR FURTHER INTER SE REDISTRIBUTION OF OTHER ASSETS AND LIABILITIES BETW EEN THE FAMILY MEMBERS. H. THE AUTHORIZED REPRESENTATIVE EXPLAINED THAT EQUAL DISTRIBUTION OF THE FAMILY ASSETS AMONG THE FOUR GROUPS MEANT RE DISTRIBUTION OF ASSETS INVOLVING VARIOUS FAMILY MEMBERS AND THEIR C ORPORATE ENTITIES. THIS BASICALLY INVOLVED ENSURING THAT CONTROL, ASSE TS, AND LIABILITIES OF SPECIFIC ENTITIES WERE ALLOTTED TO SPECIFIC GROUP I N THE PROCESS ENSURING THAT THERE WAS FINANCIAL EQUALITY. I THE AUTHORIZED REPRESENTATIVE SUBMITTED TOWARDS T HIS END, AROUND 12TH MARCH, 2003 I.E. SOON AFTER THE FAMILY AGREEME NT WAS ENTERED INTO ON 1ST JANUARY, 2003, AN EXERCISE WAS UNDERTAKEN WH ERE UNDER PROBABLE /REQUIRED REDISTRIBUTION OF FINANCIAL ASSE TS WAS PLOTTED. SINCE THIS EXERCISE INVOLVED AS MANY AS ABOUT 33 ENTITIES AND FINANCIAL ASSETS OF LARGE NUMBER AND VALUE AND DIVERSE NATURE, IT WA S THOUGHT EXPEDIENT TO PLOT IN A SEPARATE ACCOUNTING SOFTWARE USED BY A PPELLANT'S OFFICE, THE PROBABLE /REQUIRED REDISTRIBUTION IN THE FORM OF ME MORANDUM LEDGER ACCOUNTS BY RECORDING MEMORANDUM JOURNAL ENTRIES ET C. THE IDEA WAS TO ENSURE THAT ALL PROPOSED EFFECTS ARE PROPERLY CAPTU RED AND EQUITABLE AND CULMINATE IN DESIRED RESULTS. J. HE SUBMITTED THAT ACCORDINGLY, THE PROPOSED REDI STRIBUTION WAS PLOTTED ON THE COMPUTER IN EXCEL FORMAT IN GREAT DETAIL AND THE POST-PROPOSED REDISTRIBUTION FINANCIALS WERE DRAWN UP. K. A SUMMARY OF THE GROSS AND NET EFFECT OF THIS RE DISTRIBUTION WAS ALSO NOTED AT THE END OF THE MEMORANDUM FINANCIALS (PAGE S G - ITO G -11 OF THE BOX FILE). L. THIS EXERCISE SHOWED THAT CKM GROUP WOULD RECEIV E ASSETS FROM WITHIN GROUP WORTH RS. 3,547/- AND WOULD IN TURN HA VE TO GIVE UP ASSETS FROM WITHIN GROUP WORTH RS.3,763/. THE NET RESULT O F THE REDISTRIBUTION WAS TO BE DEFICIT OF RS. 216/- PAYABLE BY CKM GROUP . (PAGES G-10 OF BOX FILE NO.1). DCM GROUP WOULD RECEIVE ASSETS FROM WITHIN GROUP WO RTH RS. 1,187/- AND WOULD IN TURN HAVE TO GIVE UP ASSETS FROM WITHI N GROUP WORTH RS. 1,186/-. THE NET RESULT OF THE REDISTRIBUTION WAS T O BE SURPLUS OF RS.1 RECEIVABLE BY DCM GROUP (PAGE G-7 OF BOX FILE NO. 1 ). SIMILARLY, SCM GROUP WOULD RECEIVE ASSETS FROM WITH IN GROUP WORTH RS. 668/- AND WOULD IN TURN HAVE TO GIVE UP ASSETS FROM WITHIN GROUP WORTH RS. 3,621/-. THE NET RESULT OF THE REDISTRIBUTION W AS TO BE DEFICIT OF RS. 2,953/- PAYABLE BY SCM GROUP (PAGE G-9 OF BOX FILE NO. 1). SIMILARLY ACM GROUP WOULD RECEIVE ASSETS FROM WITHI N GROUP WORTH RS. 4,939/- AND WOULD IN TURN HAVE TO GIVE UP ASSETS FR OM WITHIN GROUP WORTH RS. 2,499/-. THE NET RESULT OF THE REDISTRIBU TION WAS TO BE SURPLUS OF RS. 2,440/- RECEIVABLE BY ACM GROUP (PAGE G-8 OF BOX FILE NO. 1). SIMILARLY YIL WOULD RECEIVE ASSETS FROM WITHIN GROU P WORTH RS.1896 AND WOULD IN TURN HAVE TO GIVE UP ASSETS FROM WITHIN GR OUP WORTH RS.969/-. SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 10 THE NET RESULT OF THE REDISTRIBUTION WAS TO BE DEFI CIT OF RS. 927/- PAYABLE BY YIL(PAGE G-11 OF BOX FILE NO. 1) M. HE TOOK ME THROUGH THE PAPER BOOK CONTAINING ALL THE BASIC DOCUMENTS STARTING FROM TRIAL BALANCE AS ON 13/03/2003, PROBA BLE TRANSACTIONS IN DETAIL TO GIVE EFFECT TO THE 'FAMILY ARRANGEMENT' & PROBABLE BALANCE SHEETS GROUP WISE ON THE BASIS OF WHICH ADDITIONS H AVE BEEN MADE. THE AR CLARIFIES THAT THESE ARE ALL PART OF THE SEIZED MATERIAL AVAILABLE WITH THE AO. HE FURTHER CLARIFIED THAT THE TRIAL BALANCE AS ON 1 3.03 .2003 ON TALLY FINALLY LEADS UP TO THE AUDITED ACCOUNTS FOR THE F. Y.20022003 FOR ALL MEMBERS OF THE DEEPAK GROUP WHICH ARE AVAILABLE ALO NG WITH THE RETURNS OF INCOME FILED BY ALL OF THEM FOR A.Y.2003-04. HE EXPLAINED THAT GROUP WISE PROBABLE BALANCE SHEE TS AS ON 13/03/2003 WHICH GIVES COMPLETE BREAKUP & DETAILS OF LIABILITIES AND ASSETS CONSTITUENT WISE HAVE ULTIMATELY GOT CONVERT ED & REDUCED INTO THE SAID TWO PAGES (37 & 38). HE SUBMITTED THAT A COMPA RISON OF EXTRACTS FROM THE SAID TWO PAGES (37 & 38) AND BALANCE SHEET AS ON 13/03/2003 (AS AVAILABLE IN CD NO. 2 . 9. THUS TO PROVE HIS POINT ON FACTS, THE ASSESSEE, DURING THE APPEAL PROCEEDINGS BEFORE THE CIT(A), OPENED THE TWO CDS, I.E. 2 & 19 AND FOLLOWING THE PATH ARRIVED AT THE TWO PAGES, I.E. 3 7 & 38 AND IT WAS POINTED OUT THAT THE LAST DATE OF CREATIO N OF PAGES ON THE CDS WHOSE PRINTOUTS WERE FOUND FROM THE LOOSE PA PERS AS WELL, WAS DATED 28.03.2003. 10. THE ASSESSEE ALSO POINTED OUT TO THE CIT(A), THAT T HE VERY BASIS FOR ADDITION, BEING THE PAPERS TO BE UNDATED, LOST ITS CREDENCE. THE ASSESSEE ALSO SUBMITTED BEFORE THE CIT(A) T HAT THE USE OF THE WORD CASH WAS IN FACT LOOSE ASSETS, WHICH WERE TRANSFERRED IN AND OUT OF VARIOUS ENTITIES, RESULTING AND CONSEQUENT TO THE FAMILY ARRANGEMENT. 11. THE CIT(A), AFTER CONSIDERING THE DETAILED SUBMISSIONS AN D ALSO, AFTER TAKING INTO ACCOUNT INCONSEQUENTIAL REMAND REP ORT SUBMITTED BY THE AO, HELD, I HAVE CONSIDERED THE FACTS OF THE CASE AND PERUSE D THE MATERIAL ON RECORD INCLUDING THE CD2 AND CD 19 SUBMITTED DUR ING THE COURSE OF THE HEARING AND OPENED BY THE REPRESENTAT IVES OF THE APPELLANT IN MY PRESENCE. ON AN EXAMINATION OF THE MATERIAL FURNISHED BY THE APPELLANT DURING THE COURSE OF THE HEARING AND ON PERUSING THE TWO CD I AM OF THE OPINION THAT NO NEW EVIDENCE IS SOUGHT TO BE PLACED BEF ORE ME BY THE APPELLANT. THE ENTIRE MATERIAL INCLUDING THAT ON THE TWO C D FORMS PART OF THE SEIZED MATERIAL AND WAS THEREFORE WITH THE AO WHEN HE PASSED THE ORDER. SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 11 IN THE REMAND REPORT THE AO HAS NOT OFFERED ANY COMMENTS IN RESPECT OF ASSESSMENT ORDERS FOR A.Y.20 10-11 WITHOUT ASSIGNING ANY REASON THEREBY SUGGESTING THA T HE HAD NOTHING TO SAY IN THE MATTER. BEYOND DOUBT CD 19 FILE HAVING PATH NAME AS 'COPY 19\SURESH\OHD\MYDOCUMENTS\DATA\MSODATA\EXCEL\INDBS .XLS' CONTAINS SAME TWO PAGES AS 37 & 38 COPIES OF WHICH HAVE BEEN APPENDED TO THE ASSESSMENT ORDER AND WHICH CON STITUTE THE BASIS FOR THE IMPUGNED ASSESSMENT. CD NO. 2, WHEN OPENED SHOWED ANOTHER FIVE PAGES PERTAINING TO GROUP BALANCE SHEETS. THESE FIVE PAGE S ARE THE BASIS FOR PREPARATION OF TWO PAGES NO. 37 & 38. REL EVANT FIGURES ON PAGES 37 & 38 PERFECTLY MATCH WITH THE FIGURES O N 5 PAGES ON CD 2. IT IS SEEN THAT THESE FIVE PAGES HAVE VERY CLEAR HE ADINGS AS 'BALANCE SHEET AS ON 13/03/2003'. IT IS THUS CLEAR THAT TWO PAGES I.E. 37 & 38 ARE TH E SUMMARIZED VERSION OF FIVE PAGES AVAILABLE ON CD 2 AND FURTHER THAT THE ENTIRE DATA CONTAINED THEREIN PERTAINS TO THE PERIO D BEFORE 31/03/2003 THE AR HAS CLARIFIED THAT PAGES 37 & 38 REPRESENT P ROBABLE BALANCE SHEETS DRAWN UP IN THE CONTEXT OF FAMILY AG REEMENT OF 01/01/2003. ON AN EXAMINATION OF THE MATERIAL ON RECORD IT IS Q UITE CLEAR THAT THERE HAVE BEEN LONG STANDING DISPUTES WITHIN THE MEHTA FAMILY GENESIS OF WHICH GOES BEYOND THE YEAR 2000. A SERIES OF LETTERS HAVE BEEN EXCHANGED BETWEEN THE APPELLANT A ND HIS SON SAILESH WHEREIN VARIOUS CLAIMS AND COUNTER CLAIMS H AVE BEEN RAISED. THE APPELLANT, WHO IS INTO HIS EIGHTIES, AS THE HEA D OF THE FAMILY WANTED TO EVOLVE A SUCCESSION PLAN THE AIM OF WHICH WAS PEACE AND HARMONY IN THE FAMILY. HE ALONG WITH HIS WIFE M RS. KANTA MEHTA DESIRED TO RELINQUISH IN FAVOR OF THEIR SONS, THEIR INTERESTS IN THE TWO LISTED COMPANIES DFPCL AND DNL. SINCE THE 2000 AGREEMENT DID NOT RESULT IN SETTLEME NT OF DISPUTES A FRESH FAMILY AGREEMENT WAS DRAWN UP BY M /S. UDWADIA, UDESHI AND BERGIS, SOLICITORS, IN JANUARY, 2003. UNDER THIS FAMILY AGREEMENT DCM WOULD OWN AND MANAG E DNL, SCM WOULD OWN AND MANAGE DFPCL AND ACM WAS TO BE PAID CASH OF RS. 53 CRORES BEING HIS SHARE IN THE V ALUE OF THE FAMILY SHARES. FOR THIS PURPOSE SHARES IN DFPCL AND DNL, WHICH WERE NOTIONALLY VALUED AND DIVIDED EQUAL LY AMONG THE THREE SONS IN SUCH A WAY THAT EACH SON WAS TO R ECEIVE ASSETS OF THE VALUE OF RS 53 CRORES. THE 2003 AGREE MENT PROVIDED FOR VARIOUS THINGS INCLUDING PAYMENT OF SP ECIFIED AMOUNTS AND INTER SE REDISTRIBUTION OF OTHER ASSETS AND LIABILITIES BETWEEN THE FAMILY MEMBERS AS EXPLAINED IN DETAIL BY THE AR IN HIS SUBMISSIONS. AS EXPLAINED BY THE AR EQUAL DISTRIBUTION OF THE FA MILY ASSETS AMONG THE FOUR GROUPS MEANT REDISTRIBUTION O F ASSETS INVOLVING VARIOUS FAMILY MEMBERS AND THEIR CORPORAT E ENTITIES. THIS INVOLVED ENSURING THAT CONTROL, ASSETS, AND LI ABILITIES OF SPECIFIC ENTITIES WERE ALLOTTED TO SPECIFIC GROUP I N THE PROCESS ENSURING THAT THERE WAS FINANCIAL EQUALITY. AN EXERCISE OF PLOTTING PROBABLE /REQUIRED REDISTRI BUTION OF FINANCIAL ASSETS AS APPEARING ON SAID PAGES 37 & 38 WAS UNDERTAKEN AROUND 12TH MARCH, 2003 I.E. SOON AFTER THE FAMILY AGREEMENT WAS ENTERED INTO ON 1ST JANUARY 20 03. SINCE SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 12 THIS EXERCISE INVOLVED AS MANY AS ABOUT 33 ENTITIES AND FINANCIAL ASSETS OF LARGE NUMBER AND VALUE AND DIVE RSE NATURE, THE OFFICE OF THE APPELLANT THOUGHT EXPEDIENT TO PL OT IN SEPARATE ACCOUNTING SOFTWARE. AN ELEMENTARY EXERCISE OF PREP ARING MEMORANDUM LEDGER ACCOUNTS BY RECORDING MEMORANDUM JOURNAL ENTRIES ETC WAS UTILIZED FOR THIS PURPOSE. THE CDS ON RECORD ALSO CLEARLY ESTABLISH THE FACT THAT THE STA RTING POINT OF THIS ENTIRE EXERCISE WAS BALANCE SHEETS AS ON 13.03 .2003 AS APPEARING IN THE BOOKS OF ACCOUNT MAINTAINED BY VAR IOUS GROUP ENTITIES. THE FURTHER FACT WHICH DISTINCTLY EMERGES FROM THE SEIZED MATERIAL/CD IS THAT THE COMPONENTS OF THE FIGURES O F CASH PAID AND CASH RECD AS APPEARING AT THE END OF THESE PROB ABLE BALANCE SHEETS ARE IN FACT LIQUID ASSETS IN THE FOR M OF LOANS, LIABILITIES, CASH AND BANK BALANCES ETC. THE PROBABLE BALANCE SHEET IN THE CASE OF CKM GROUP AS APPEARING ON PAGE 37 & 38 READS AS UNDER:S CKM & GROUP CAPITAL 1,384 F.A. 77 LOAN TAKEN 2,924 GOTRI 21 CURRENT LIAB. 306 YIL 2,682 DEFICIT 216 YIL (STOCK) 325 BARODA 11 INV. SHARES-OTHERS 305 STOCK OTHERS 856 JEWELLERY 21 LOAN TO OTHERS 164 CURRENT ASSETS-OTHER 370 4,832 4,832 CASH RECD. + 3,547 CASH PAID - 3,763 DEFICIT 216 THE AO HAS BROUGHT TO TAX RS. 35.47 CRORES AND RS. 37.63 CRORES AS UNEXPLAINED CASH RECEIVED AND CASH PAID. THE BREAKUP OF THE SAID TWO FIGURES AS AVAILABLE ON CD2 IS AS UNDER: CKM & GROUP PARTICULARS CD NO.2 (GROUPWISE BALA- NCE SHEETS AS ON 13.3.2003 TWO PAGES 37 & 38 (ALSO IN CD NO. 19) LIABILITIES : CAPITAL ACCOUNT 1,384 1,384 1,384 LOAN TAKEN FROM OTHERS 2,924 2,924 2,924 CURRENT LIABILITIES 308 308 LOANS TAKEN FROM GROUP WHITEHALL CURRENT LIABILITIES GROUP CALLS PAYABLE (TREATED AS CASH PAID IN PAGES 37 & 38) 745 637 2259 122 3763 3,763 8379 - - - - 3,763 8,379 ASSETS FIXED ASSETS FIXED ASSETS GOTRI BUNGLOW YIL SHARES YIL SHARES (STOCK) BARODA PLOT 77 21 2682 325 11 77 21 2682 325 11 SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 13 INVESTMENTS IN SHARES OTHERS STOCK OTHERS JEWELLERY LOAN TO OTHERS CURRENT ASSETS OTHER LOAN GIVEN TO GROUP CURRENT ASSETS GROUP CASH AND BANK BALANCE 960 875 1712 3547 305 856 21 164 370 3547 8379 305 856 21 164 370 -- -- -- 3547 8379 IT IS THUS CLEAR THAT THE SO CALLED CASH PAID IN FACT IS THE TOTAL OF THE FOLLOWING LOANS TAKEN FROM GROUP WHITEHALL CURRENT LIABILITIES GROUP CALLS PAYABLE (TREATED AS CASH PAID IN PAGES 37 & 38) TOTAL 745 637 2259 122 3763 637 SIMILARLY THE SO CALLED CASH RECD IS IN FACT THE TO TAL OF THE FOLLOWING: LOANS TAKEN FROM GROUP WHITEHALL CURRENT LIABILITIES GROUP CALLS PAYABLE (TREATED AS CASH PAID IN PAGES 37 & 38) TOTAL 745 637 2259 122 3763 637 IN MY OPINION, IT IS BEYOND DOUBT THAT THE WORDS CA SH PAID AND CASH RECD HAVE BEEN IN FACT USED TO REFER TO ID ENTIFIED LIQUID ASSETS BY WAY OF LOANS TAKEN, LOANS GIVEN, C URRENT LIABILITIES, AND CASH/BANK BALANCES WHICH WERE PROP OSED TO BE REDISTRIBUTED PURSUANT TO THE FAMILY AGREEMENT. THE SE WORDS DO NOT REPRESENT HARD CASH RECEIVED OR HARD CASH PA ID AS ORDINARILY -CONVEYED BY THESE WORDS. THAT THE FIGURES APPEARING ON PAGES 37 AND 38 ARE P ROBABLE BALANCE SHEETS IS OBVIOUS. THE PURPOSE OF ENTIRE BALANCE SHEETS HAS ALSO BEEN SATISFACTORILY EXPLAINED BY THE APPELLANT; IT HAS ITS GENESIS IN T HE LONG STANDING FAMILY DISPUTES WHICH ARE IN FACT STILL NOT SETTLED . THE FACT THAT THESE PROBABLE BALANCE SHEETS HAVE BE EN DRAWN UP FROM THE ACCOUNTED BALANCE SHEETS AS ON 13.03.20 03 IS ALSO CLEARLY REFLECTED IN CD 2 (G-6 TO G-1 1 OF THE PAPE R BOOK - BOX FILE NO. 1). THERE IS ALSO MERIT IN THE CONTENTION OF THE AR THA T THOUGH BY PASSING SIMILAR ORDERS IN THE CASE OF 5 GROUP ASSES SEES, THE AO HAS BROUGHT TO TAX RS.242,75,00,000/- AS UNACCOUNTED CASH, DURING SEARCH ON 21.07.2009 NO UNACCOUNTED CASH WAS FOUND AT ANY PLACE - OFFICE OR SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 14 RESIDENCE - ACROSS THE GROUP. SIMILARLY NO ACCOUNTE D INVESTMENT OR UNACCOUNTED EXPENDITURE WAS ALSO FOUN D. THIS LENDS FURTHER SUPPORT TO THE CONTENTION OF THE APPE LLANT THAT THESE ARE ONLY PROBABLE OR PROJECTED FIGURES AND NO T FIGURES OF HARD CASH. ANOTHER NOTEWORTHY FACT WHICH EMERGES ON VIEWING CD 19 CONTAINING PAGES 37 & 38 IS THAT THE CONTENT THERE OF WAS CREATED ON 28.03.2003. THE PROPERTIES OF THIS CD/FI LE AS RECORDED IN THE COMPUTER AT THE TIME OF ITS CREATIO N, WHICH WAS ALSO DEMONSTRATED BEFORE ME, APPEAR AS UNDER: THERE IS THEREFORE MERIT IN THE CONTENTION OF THE A R THAT THIS CD WAS CREATED ON 28.03.2003 A DATE FALLING BEYOND SIX YEAR LIMITATION PERIOD PRESCRIBED IN SECTION 153A(L) OF THE ACT. IN MY OPINION THE APPEAL MERITS BEING ALLOWED BOTH ON GROUNDS OF LIMITATION AND THE GROUND THAT THE FIGURES ARE I N ANY EVENT ONLY PROBABLE BALANCE SHEETS AND DO NOT REFLECT ACT UAL TRANSACTIONS OF CASH PAID AND CASH RECD. THESE PROB ABLE BALANCE SHEETS WERE THEMSELVES BASED ON BALANCE SHEETS AS ON 13.03.2003 DRAWN UP FROM THE REGULAR BOOKS OF ACCOU NT MAINTAINED BY THE APPELLANT MOREOVER THE WORDS CASH PAID AND CASH RECD DO NOT I N FACT REFLECT HARD CASH BUT IDENTIFIED AND ACCOUNTED LIQU ID ASSETS. FOR ALL THE REASONS DISCUSSED HEREINABOVE, THE ASSE SSMENT IS ANNULLED AND EX CONSEQUENTIAL THE SUM OF RS. 73,10, 00,000/- ADDED TO THE TOTAL INCOME OF THE APPELLANT DOES NOT SURVIVE AND GETS DELETED. 12. THE CIT(A), THUS DELETED THE ENTIRE ADDITION OF RS. 73,10,00,000/- MADE IN THE HANDS OF THE ASSESSEE, MR. CHIMA NLAL KHIMCHAND MEHTA. SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 15 13. AGAINST THIS ORDER OF THE CIT(A), THE DEPARTMENT HA S FILED APPEAL BEFORE THE ITAT. 14. BEFORE US, THE DR SUBMITTED THAT THE ORDER OF THE C IT(A) SUFFERED FROM THE BASIC FOUNDATION OF TRUTH THAT THE PAPERS, AS RE LIED UPON BY THE AO WERE UNDATED AND THAT THERE WAS AN EVIDENCED MOVEMENT OF ACTUAL CASH BETWEEN THE FAMILY MEMBERS AND ENTITIES. 15. THE DR ALSO SUBMITTED THAT THE CIT(A)S RELIANCE HAS BEEN ON THE RUN OF CDS, WHICH DEPICTED A CERTAIN DATE. THE DR SUBMITTE D THAT THE FACTUAL ASPECT OF THE ACTUAL NOTINGS OF THE CDS HAS NOT B EEN VERIFIED. THE DR, ON THESE SUBMISSIONS PLEADED THAT THE CASE SHOU LD BE RESTORED TO THE FILE OF THE AO FOR RE-EXAMINING AND READJU DICATION AFTER EXAMINING THE AUTHENTICITY OF THE CDS. 16. ON THE OTHER HAND, THE AR SUBMITTED THAT THE ENT IRE BASIS OF ADDITIONS MADE, AS PER FACTS AND FIGURES REPRODUCED ABOVE IN THE ORDER, ARE CERTAIN LOOSER PAPERS, WHICH AS PER HARD COPY WERE UNDATED, BUT WHEN EXAMINED FROM THE SOURCE , WOULD RESULT IN, IN THE NOTINGS MADE IN THE CDS, AS MADE ON 23.03.2003 AND 28.03.2003. TH IS WAS DONE AND ON EXAMINED AND RERUN OF THE CDS BY THE CIT (A) HIMSELF, WHICH WERE FOUND AND SEIZED BY THE SEARCH PARTY ON 21.0 7.2009. THE AR POINTED OUT THAT SEIZURE OF CDS CAN BE SEEN FROM THE PANCHNAMAS AS PREPARED ON 21.07.2009. 17. THE AR FURTHER SUBMITTED THAT CHARACTERIZATION OF TH E WORD CASH USED IN THE NOTINGS WAS NOTHING BUT LOANS TAKEN AND GIV EN, CURRENT LIABILITIES AND BANK BALANCES TO BE DISTRIBUTED, AS A RESULT OF ON FAMILY SETTLEMENT. IT IS PROVED FROM THE FACT THAT ACTU AL MOVEMENT OF ASSETS AND LIABILITIES WAS DONE IMMEDIATELY AND WHEREVER ANY LIABILITY AROSE IN THE FORM OF CAPITAL GAINS, TAXES WERE PAID IN ACCORDANCE WITH LAW, ON THOSE ASSETS. SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 16 18. THE AR ALSO SUBMITTED THAT EVEN IN THE REMAND REPO RT, THE AO ACCEPTED THE FACT THAT THIS FAMILY DISTRIBUTION WAS DONE IN THE PERIOD PRIOR TO THE 153A PERIOD AND THAT IS WHY NO COMMENTS WERE MADE. 19. THE AR SUBMITTED THAT IN THE LIGHT OF THE ABOVE AND COMPLETE FACTS TAKEN INTO CONSIDERATION BY THE CIT(A), NO INFIRMITY CAN BE SEEN. THE AR, THEREFORE, SUBMITTED THAT THE APPEAL AS FILED BY TH E DEPARTMENT MUST BE REJECTED. 20. WE HAVE PERUSED THE ARGUMENTS FROM EITHER SIDE AN D HAVE ALSO PERUSED THE MATERIAL PLACED BEFORE US ALONG WITH THE ORDE RS OF THE REVENUE AUTHORITIES. 21. THE FOLLOWING ABBREVIATIONS, ARE USED IN THE SEIZED PAPERS: S.NO. NAME ABBREVIATION 1 MR. CHIMANLAL KHIMCHAND MEHTA CKM 2 MR. DEEPAK CHIMANLAL MEHTA DCM 3 MR. SAILESH CHIMANLAL MEHTA SCM 4 MR. AJAY CHIMANLAL MEHTA ACM 5 M/S. DEEPAK FERTILIZERS & PETROCHEMICALS CORPORATION LTD. DFPCL 6 M/S. DEEPAK NITRATE LTD DNL 7 M/S. YERROWADA INVESTMENTS LTD YIL 22. THE FACT THAT PAPERS AND CDS WERE SEIZED AT THE TIM E OF SEARCH ON 21.07.2007, IS EVIDENCED FROM THE PANCHNAMA (APB VOL 3, P G. 912). IT IS ALSO A FACT THAT THE HARD COPIES OF PRINT OUT WHICH WERE UNDATED WERE FOUND IN THE LOOSE PAPERS, WHICH, WHEN EXAMINED BY RU NNING THE CDS WERE FOUND TO BE PERTAINING TO 23.03.2003 AND 28.03.20 03, PERIOD PRIOR TO THE 153A PROCEEDINGS. 23. ON EXAMINATION OF THE SEIZED PRINT OUT, IT IS SEEN THAT THE IMPUGNED CDS SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 17 WAS IN FACT CREATED ON 28.03.2003. THIS MEANS THAT SEIZED HARD COPIES WAS NOTHING BUT THE PRINT OUT OF THE CD PREPARED ON 28 .03.2003, THEREFORE, THE ASSUMPTION OF THE AO THAT SINCE THE PAPER S WERE UNDATED, AND THEREFORE, THEY HAVE TO BE PRESUMED TO BE PERTAINING TO THE FINANCIAL YEAR, IN WHICH THEY WERE FOUND, LOSSES ITS LEGS AND THIS ASSUMPTION FALLS. HENCE ADDITION CANNOT BE SUSTAINED ON THIS ARGUMENTS. 24. ON THE OTHER HAND, THE SUBMISSIONS OF THE AR CANNO T BE IGNORED THAT ALL THE ASSETS AND LIABILITIES WERE DISTRIBUTED AS PER T HE FAMILY ARRANGEMENT IMMEDIATELY THEREAFTER AND WHEREVER NECESS ARY, DUE TAXES HAD BEEN PAID. 25. BEFORE US THOUGH THE AR PLACED RELIANCE ON THE DECIS IONS OF P R METRANI VS CIT- 287 ITR 209 (SC) AND SURENDRA M KHAND HAR VS ACIT 321 ITR 254 (BOM). IN OUR VIEW BOTH THESE DECISIONS MAY NOT BE NECESSARY, BECAUSE, THE QUESTION OF REBUTTAL ON THE PROP OSED ADDITION IS NOT OCCASIONED BECAUSE THE ADDITIONS MADE BY THE AO, HAVE BEEN BASED ON NOTINGS ON THE CDS PREPARED ON 28.03.2003, WH ICH WE HAVE SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 18 HELD PERTAINED TO PERIOD PRIOR TO THE SEARCH PERIOD ASSE SSMENTS UNDER SECTION 153A AND, THEREFORE CANNOT BE SUSTAINED. 26. AFTER PERUSING THE ENTIRE MATERIAL PLACED BEFORE US, WE ARE OF THE OPINION THAT FOR TENTATIVE FAMILY SETTLEMENT, THE ENTIRE WOR KING WAS DONE. IN THE PROCESS OF WORKING OUT THE FAMILY SETTLEMEN T, THE ASSESSEE PICKED UP THE ACTUAL BOOKS FIGURES AS ON 13.03.2003 OF VAR IOUS ENTITIES TO ARRIVE AT REASONABLE DISTRIBUTION. NEITHER ANY INCOME W AS RECEIVED NOR ACCRUED IN FAVOUR OF THE ASSESSEE. THE ARGUMENT OF THE AO/DR THAT THERE WAS ACTUAL MOVEMENT OF CASH COULD NOT BE SU BSTANTIATED BY THE AO/DR, AS NOT ONE CURRENCY NOTE WAS FOUND, WHICH CO ULD BE HELD TO BE UNACCOUNTED. EVEN THE FACT THAT THE FIGURES TAKE N BY THE ASSESSEE FOR FAMILY DISTRIBUTION WERE FROM THE ACTUAL BOOKS ALSO COULD NOT BE NEGATED BY THE AO OR BY THE DR BEFORE US. THE FACT, THAT ON ACTUAL AND FINAL DISTRIBUTION OF MOVABLE ASSETS, AS WORKED O UT, ALL LEGITIMATE TAXES HAD BEEN PAID BY THE VARIOUS PERSONS/EN TITIES HAS ALSO NOT BEEN CONTROVERTED BY THE DR/AO. THIS GOES TO PROVE THAT THE AO TREADED ON THE PATH OF SUSPICION AND BASED HIS FINDINGS ON ASSUMPTION. 27. WE THEREFORE SUSTAIN THE FINDINGS OF THE CIT(A), WHERE IN HE HAS DEMOLISHED THE ENTIRE CASE OF THE AO, BOTH ON MERITS AND LEGALITY, ACCEPTING THE FACT THAT THE ASSESSMENT FRAMED BY THE A O IS ERRONEOUS, AS THE FIGURES ARE BASED ON THE CDS SEIZED BY THE DEP ARTMENT, WHICH CLEARLY SHOWS CREATION OF THE SAME ON 28.03.2003, WHICH IS BEYOND THE LIMITATION PERIOD, AS PRESCRIBED IN SECTION 153A. 28. WE ALSO REJECT THE GOA NO. 6, WHEREIN THE DEPARTM ENT HAS SOUGHT RESTORATION OF THE CASE TO THE FILE OF THE AO, BEC AUSE OF NON ALLOWANCE OF PROPER OPPORTUNITY UNDER RULE 46A. THIS HAS B EEN CATEGORICALLY REJECTED BY THE CIT(A), WHEREIN HE HAS HELD THAT THE ASSESSEE HAS NOT PRODUCED/SUBMITTED ANYTHING OR ANY E VIDENCE, WHICH WAS NOT BEFORE THE AO OR WAS NOT IN THE SEIZED MATERIAL. EVEN IN THE SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 19 COURSE OF HEARING BEFORE US, THE DR COULD NOT BRING OUT O R POINT OUT ANY DOCUMENT, WHICH COULD BE SAID TO BE TAKEN INTO CONSID ERATION BY THE CIT(A) AND NOT CONSIDERED BY THE AO. 29. WE, THEREFORE, REJECT THE GROUNDS AS RAISED BY THE D EPARTMENT AND CONSEQUENTIALLY DISMISS THE APPEAL AS FILED BY THE DEPARTMENT. 30. IN THE RESULT, DEPARTMENTAL APPEAL, AS FILED BY THE REVE NUE STANDS DISMISSED. 31. NOW, WE SHALL DEAL WITH REMAINING APPEALS, BY FOLLOWING OUR LE AD APPEAL IN ITA NO.3767/MUM/2013 AS DECIDED BY US HEREINAB OVE OF THIS ORDER FILED BY THE DEPARTMENT. ITA NO. : 3777/MUM/2013 : DEPARTMENT APPEAL : 32. THE DEPARTMENT HAS RAISED THE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT(A) ERRED IN ANNULLING THE ASSESSMENT ON THE GROUND OF LIMITATION BY HOLDING THAT THE C.D. WAS CREATED ON 28.3.2003, FALLING BEYOND SIX YEARS LIMITATION PERIOD PRESCRIB ED IN SECTION 153A(1) WITHOUT VERIFYING THE AUTHENTICITY AND ALLE GED DATE OF CD THROUGH FORENSIC EXPERT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) ERRED IN ANNULLING THE ASSESSMENT ON THE BASIS OF SURMISES AND PRESUMPTIONS WITHOUT VERIFYING THE FAC TS AS AVAILABLE ON RECORD. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS . 18,96,00,000/- ON ACCOUNT OF UNACCOUNTED RECEIPTS D UE TO FAMILY ARRANGEMENT IGNORING THE PRESUMPTIONS WITH R EGARD TO THE ENTRIES FOUND IN SIZED MATERIAL AS PER PROVISIO NS OF SECTION 292C R.W.S. 132(4A) OF I.T. ACT. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS . 9,69,00,000/- ON ACCOUNT OF UNACCOUNTED PAYMENTS DUE TO FAMILY AR RANGEMENT IGNORING THE PRESUMPTIONS WITH REGARD TO THE ENTRIE S FOUND IN SEIZED MATERIAL AS PER PROVISIONS OF SECTION 292C R .W.S. 132(4A) OF I.T. ACT. 5. ON THE FACTS AND IN LAW, THE LD. CIT(A) ERRED IN ANNULLING THE ASSESSMENT AND DELETING THE ADDITIONS BY RELYING ON THE ADDITIONAL EVIDENCE IN THE FORM OF FAMILY AGREEMENT S DATED MARCH 2000 AND 01.01.2003 BUT IGNORING THAT THESE A GREEMENTS INDICATED FINANCIAL TRANSACTIONS DURING THE YEARS C OVERED U/S 153A OF THE I.T. ACT. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) ERRED IN ADMITTING THE ADDITIONAL EV IDENCE IN SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 20 VIOLATION OF RULE 46A OF THE I.T. RULES 1962 WITHOU T PROVIDING THE AO OPPORTUNITY TO COMMENT ON MERITS. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFI CER BE RESTORED. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GR OUND AND/OR ADD NEW GROUNDS WHICH MAY BE NECESSARY. A COPY OF THE ORDER OF THE CIT(A), MUMBAI WAS RECEI VED IN THIS OFFICE ON 15.3.2013. THE LIMITATION DATE FOR FILING OF APPEAL U/S 253(2) IS 13.5.2013. HOWEVER, THE APPEAL SHOULD BE FILED IMMEDIATELY. 33. THE CIT(A) ON CONSIDERATION OF THE SUBMISSIONS AS MAD E BY THE ASSESSEE ALONG WITH THE DOCUMENTS FOUND SEIZED, HAS OBSERVED: I HAVE CONSIDERED THE FACTS OF THE CASE AND PERUSED THE MATERIAL ON RECORD INCLUDING THE CD2 AND CD19 SUBMITTED DURING THE COURSE OF THE HEARING AND OPENED BY THE REPRESENTATIVES OF THE APPELLANT IN MY PRESENCE. ON AN EXAMINATION OF THE MATERIAL FURNISHED BY THE APPELLANT DURING THE COURSE OF THE HEARING AND ON PERUSING THE TWO CL) I AM OF THE OPINION THAT NO NE W EVIDENCE IS SOUGHT TO BE PLACED BEFORE ME BY THE APPELLANT. THE ENTIRE MATERIAL INCLUDING THAT ON TH E TWO CD FORMS PART OF THE SEIZED MATERIAL AND WAS THEREF ORE WITH THE AG WHEN HE PASSED THE ORDER. IN THE REMAND REPORT THE AO HAS NOT OFFERED ANY COMMENTS IN RESPECT OF ASSESSMENT ORDERS FOR A.Y.2010-11 WITHOUT ASSIGNING ANY REASON THEREBY SUGGESTING THAT HE HAD NOTHING TO SAY IN THE MATTER . BEYOND DOUBT CD 19 FILE HAVING PATH NAME AS 'COPYL9\SURESH\OHD\MYDOCUMENTS\DATA\MSGDATA\EX CEL\INDBS.XLS' CONTAINS SAME TWO PAGES AS 37 & 38 COPIES OF WHICH HAVE BEEN APPENDED TO THE ASSESSMEN T ORDER AND WHICH CONSTITUTE THE BASIS FOR THE IMPUGN ED ASSESSMENT. CD NO. 2, WHEN OPENED SHOWED ANOTHER FIVE PAGES PERTAINING TO GROUP BALANCE SHEETS. THESE FIVE PAGE S ARE THE BASIS FOR PREPARATION OF TWO PAGES NO. 37 & 38. RELEVANT FIGURES ON PAGES 37 & 38 PERFECTLY MATCH W ITH THE FIGURES ON 5 PAGES ON CD 2. IT IS SEEN THAT THESE FIVE PAGES HAVE VER Y CLEAR HEADIN G S AS 'BALANCE SHEET AS. IT IS THUS CLEAR THAT TWO PAGES I.E. 37 & 38 ARE TH E SUMMARIZED VERSION OF FIVE PAGES AVAILABLE ON CD 2 AND FURTHER THAT THE ENTIRE DATA CONTAINED THEREIN PERTAINS TO THE PERIOD BEFORE 31/03/2003 THE AR HAS CLARIFIED THAT PAGES 37 & 38 REPRESENT PROBABLE BALANCE SHEETS DRAWN UP IN THE CONTEXT OF FAMILY AGREEMENT OF 01/01/2003. ON AN EXAMINATION OF THE MATERIAL ON RECORD IT IS QUITE CLEAR THAT THERE HAVE BEEN LONG STANDING DISPUTES WITHIN THE MEHTA FAMILY GENESIS OF WHICH G OES BEYOND THE YEAR 2000. A SERIES OF LETTERS HAVE BEEN EXCHANGED BETWEEN THE MR. CKM AND HIS SON SAILESH WHEREIN VARIOUS CLAIMS AND COUNTER CLAIMS HAVE BEEN SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 21 RAISED. MR. CKM, WHO IS INTO HIS EIGHTIES, AS THE HEAD OF T HE FAMILY WANTED TO EVOLVE A SUCCESSION PLAN THE AIM O F WHICH WAS PEACE AND HARMONY IN THE FAMILY. HE ALONG WITH HIS WIFE MRS. KANTA MEHTA DESIRED TO RELINQUIS H IN FAVOR OF THEIR SONS, THEIR INTERESTS IN THE TWO LIS TED COMPANIES DFPCL AND DNL. SINCE THE 2000 AGREEMENT DID NOT RESULT IN SETTLEMENT OF DISPUTES A FRESH FAMILY AGREEMENT WAS DRAWN UP BY M/S. UDWADIA, UDESHI AND BERGIS, SOLICITORS, IN JANUARY, 2003. UNDER THIS FAMILY AGREEMENT DCM WOULD OWN AND MANAGE DNL, SCM WOULD OWN AND MANAGE DFPCL AND ACM WAS TO BE PAID CASH OF RS. 53 CRORES BEING HIS SHARE IN TH E VALUE OF THE FAMILY SHARES. FOR THIS PURPOSE SHARES IN DFPCL AND DNL, WHICH WERE NOTIONALLY VALUED AND DIVIDED EQUALLY AMONG THE THREE SONS IN SUCH A WAY THAT EACH SON WAS TO RECEIVE ASSETS OF T HE VALUE OF RS.53 CRORES. THE 2003 AGREEMENT PROVIDED FOR VARIOUS THINGS INCLUDING PAYMENT OF SPECIFIED AMOUNTS AND INTER SE REDISTRIBUTION OF OTHER ASSETS AND LIABILITIES BETWEEN THE FAMILY MEMBERS AS EXPLAINED IN DETAIL BY THE AR IN HIS SUBMISSIONS. AS EXPLAINED BY THE AR EQUAL DISTRIBUTION OF THE FAMILY ASSETS AMONG THE FOUR GROUPS MEANT REDISTRIBUTION OF ASSETS INVOLVING VARIOUS FAMILY M EMBERS AND THEIR CORPORATE ENTITIES. THIS INVOLVED ENSURIN G THAT CONTROL, ASSETS, AND LIABILITIES OF SPECIFIC ENTITI ES WERE ALLOTTED TO SPECIFIC GROUP IN THE PROCESS ENSURING THAT THERE WAS FINANCIAL EQUALITY. AN EXERCISE OF PLOTTING PROBABLE /REQUIRED REDISTRIBUTION OF FINANCIAL ASSETS AS APPEARING ON SAID PAGES 37 & 38 WAS UNDERTAKEN AROUND 12TH MARCH , 2003 I.E. SOON AFTER THE FAMILY AGREEMENT WAS ENTER ED INTO ON 1ST JANUARY, 2003. SINCE THIS EXERCISE INVO LVED AS MANY AS ABOUT 33 ENTITIES AND FINANCIAL ASSETS O F LARGE NUMBER AND VALUE AND DIVERSE NATURE, THE OFFI CE OF THE APPELLANT THOUGHT EXPEDIENT TO PLOT IN SEPAR ATE ACCOUNTING SOFTWARE. AN ELEMENTARY EXERCISE OF PREPARING MEMORANDUM LEDGER ACCOUNTS BY RECORDING MEMORANDUM JOURNAL ENTRIES ETC WAS UTILIZED FOR THI S PURPOSE. THE CDS ON RECORD ALSO CLEARLY ESTABLISH T HE FACT THAT THE STARTING POINT OF THIS ENTIRE EXERCIS E WAS BALANCE SHEETS AS ON 13.03.2003 AS APPEARING IN THE BOOKS OF ACCOUNT MAINTAINED BY VARIOUS GROUP ENTITI ES. THE FURTHER FACT WHICH DISTINCTLY EMERGES FROM THE SEIZED MATERIAL/CD IS THAT THE COMPONENTS OF THE FIGURES O F CASH PAID AND CASH RECD AS APPEARING AT THE END OF THESE PROBABLE BALANCE SHEETS ARE IN FACT LIQUID ASSETS IN THE FORM OF LOANS, LIABILITIES, CASH AND BANK BALANCES ETC. THE PROBABLE BALANCE SHEET IN THE CAS E OF YIL AS APPEARING ON PAGE 37 & 38 READS AS UNDER: YIL CAPITAL 2537 DFPCL SHARES 597 CURR. LIAB. 10 LOAN TO OTHERS 35 CURRENT ASSETS -OTHERS 19 SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 22 -CKM -SCM 216 753 CASH & BANK BAL. 927 2,547 2,547 CASH RECD. + 1,896 CASH PAID 969 LOAN TO CKM/SCM SURPLUS 927 THE AO HAS BROUGHT TO TAX RS. 18.96 CRORES AND RS. 9.69 CRORES AS UNEXPLAINED CASH RECEIVED AND CASH PAID. THE BREAK UP OF THE SAID TWO FIGURES AS AVAILABLE ON CD 2 IS UNDER: YIL PARTICULARS CD NO.2 (GROUPWISE BALA- NCE SHEETS AS ON 13.3.2003 TWO PAGES 37 & 38 (ALSO IN CD NO. 19) LIABILITIES : CAPITAL ACCOUNT CURRENT LIABILITIES 2,537 10 2,537 10 TOTAL 2,547 2,547 ASSETS : FIXED ASSETS INVESTMENTS IN SHARES DFPCL LOAN TO OTHERS CURRENT ASSETS OTHER LOAN GIVEN TO GROUP CURRENT ASSETS GROUP CASH AND BANK BALANCE (TREATED AS CASH RECEIVED IN PAGES 37 & 38) 1,678 170 48 - 597 35 19 - 597 35 19 1896 1896 1896 TOTAL 2,547 2,547 IT IS THUS CLEAR THAT THE SO CALLED CASH PAID IN FACT IS THE TOTAL OF THE FOLLOWING: LOANS GIVEN TO CKM LOANS GIVEN TO SCM (TREATED AS CASH PAID IN PAGES 37 & 38) TOTAL 216 753 969 SIMILARLY THE SO CALLED CASH RECD IS IN FACT THE TOTAL OF THE FOLLOWING: ASSETS : LOAN GIVEN TO GROUP CURRENT ASSETS 1678 SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 23 GROUP CASH AND BANK BALANCE (TREATED AS CASH RECEIVED IN PAGES 37 & 38) TOTAL 170 48 1896 THE DIFFERENCE BETWEEN CASH RECEIVED OF 1896 AND CASH PAID OF 969 IS 927 WHICH IS SHOWN AS DEFICIT (CASH & BANK BALANCE) IN PAGES 37 & 38. IN MY OPINION, IT IS BEYOND DOUBT THAT THE WORDS CA SH PAID AND CASH RECD HAVE BEEN IN FACT USED TO REFER TO IDENTIFIED LIQUID ASSETS BY WAY OF LOANS TAKEN, LOANS GIVEN, CURRENT LIABILITIES, AND CASH/BANK BAL ANCES WHICH WERE PROPOSED TO BE REDISTRIBUTED PURSUANT TO THE FAMILY AGREEMENT. THESE WORDS DO NOT REPRESENT HARD CASH RECEIVED OR HARD CASH PAID AS ORDINARILY CONVE YED BY THESE WORDS. THAT THE FIGURES APPEARING ON PAGES 37 AND 38 ARE PROBABLE BALANCE SHEETS IS OBVIOUS. THE PURPOSE OF THE ENTIRE EXERCISE OF PREPARING MEMORANDUM PROBABLE BALANCE SHEETS HAS ALSO BEEN SATISFACTORILY EXPLAINED BY THE APPELLANT; IT HAS I TS GENESIS IN THE LONG STANDING FAMILY DISPUTES WHICH ARE IN FACT STILL NOT SETTLED. THE FACT THAT THESE PROBABLE BALANCE SHEETS HAVE BE EN DRAWN UP FROM THE ACCOUNTED BALANCE SHEETS AS ON 13.03.2003 IS ALSO CLEARLY REFLECTED IN CD 2 (G-6 T O G-11 OF THE PAPER BOOK - BOX FILE NO. 1). THERE IS ALSO MERIT IN THE CONTENTION OF THE AR THA T THOUGH BY PASSING SIMILAR ORDERS IN THE CASE OF 5 GROUP ASSESSEES, THE AO HAS BROUGHT TO TAX RS.242,75,00,000/- AS UNACCOUNTED CASH, DURING SEARCH ON 21.07.2009 NO UNACCOUNTED CASH WAS FOUND AT ANY PLACE - OFFICE OR RESIDENCE - ACROSS T HE GROUP. SIMILARLY NO ACCOUNTED INVESTMENT OR UNACCOUNTED EXPENDITURE WAS ALSO FOUND. THIS LENDS FURTHER SUPPORT TO THE CONTENTION OF THE APPELLANT THAT THESE ARE ONLY PROBABLE OR PROJECTED FIGURES AND NO T FIGURES OF HARD CASH. ANOTHER NOTEWORTHY FACT WHICH EMERGES ON VIEWING CD 19 CONTAINING PAGES 37 & 38 IS THAT THE CONTENT THE RE OF WAS CREATED ON 28.03.2003. THE PROPERTIES OF THI S CD/FILE AS RECORDED IN THE COMPUTER AT THE TIME OF ITS CREATION, WHICH WAS ALSO DEMONSTRATED BEFORE ME, APPEAR AS UNDER: SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 24 THERE IS THEREFORE MERIT IN THE CONTENTION OF THE A R THAT THIS CD WAS CREATED ON 28.03.2003 A DATE FALLING BEYOND SIX YEAR LIMITATION PERIOD PRESCRIBE D IN SECTION 153A(1) OF THE ACT. IN MY OPINION THE APPEAL MERITS BEING ALLOWED BOTH ON GROUNDS OF LIMITATION AND THE GROUND THAT THE FIGUR ES ARE IN ANY EVENT ONLY PROBABLE BALANCE SHEETS AND DO NOT REFLECT ACTUAL TRANSACTIONS OF CASH PAID AND CASH RECD. THESE PROBABLE BALANCE SHEET WERE THEMSELVES BASED ON BALANCE SHEETS AS ON 13.03.2003 DRAWN UP FROM THE REGULAR BOOKS OF ACCOUNT MAINTAIN ED BY THE APPELLANT. MOREOVER THE WORDS CASH PAID AND CASH RECD DO NOT IN FACT REFLECT HARD CASH BUT IDENTIFIED AND ACCOUNTED LIQUID ASSETS. FOR ALL THE REASONS DISCUSSED HEREINABOVE, THE ASSESSMENT IS ANNULLED AND EX CONSEQUENTIA THE SUM OF RS.28,65,00,000/- ADDED TO THE TOTAL INCOME OF THE APPELLANT DOES NOT SURVIVE AND GETS DELETED. 34. AS THE ISSUES INVOLVED IN THE IMPUGNED APPEAL ARE COM MON AS DELIBERATED AND DECIDED BY US HEREINABOVE, IN OUR ORDER WHILE ADJUDICATING THE DEPARTMENT APPEAL IN ITA NO. 3767/MUM/2 013 AT LENGTH. THE RELEVANT CONCLUSIVE PARAS OF OUR ORDER READ AS UNDER: 20. WE HAVE PERUSED THE ARGUMENTS FROM EITHER SIDE AND HAVE ALSO PERUSED THE MATERIAL PLACED BEFORE US ALO NG WITH THE ORDERS OF THE REVENUE AUTHORITIES. 21. THE FOLLOWING ABBREVIATIONS, ARE USED IN THE SEIZED PAPERS: S.NO. NAME ABBREVIATION 1 MR. CHIMANLAL KHIMCHAND MEHTA CKM 2 MR. DEEPAK CHIMANLAL MEHTA DCM SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 25 3 MR. SAILESH CHIMANLAL MEHTA SCM 4 MR. AJAY CHIMANLAL MEHTA AC M 5 M/S. DEEPAK FERTILIZERS & PETROCHEMICALS CORPORATION LTD. DFPCL 6 M/S. DEEPAK NITRATE LTD DNL 7 M/S. YERROWADA INVESTMENTS LTD YIL 22. THE FACT THAT PAPERS AND CDS WERE SEIZED AT THE TIME OF SEARCH ON 21.07.2007, IS EVIDENCED FROM THE PANCHNAMA (APB VOL 3, PG. 912). IT IS ALSO A FACT T HAT THE HARD COPIES OF PRINT OUT WHICH WERE UNDATED WERE FO UND IN THE LOOSE PAPERS, WHICH, WHEN EXAMINED BY RUNNIN G THE CDS WERE FOUND TO BE PERTAINING TO 23.03.2003 A ND 28.03.2003, PRIOR PERIOD TO THE PERIOD FOR 153A PROCEEDINGS. 23. ON EXAMINATION OF THE SEIZED PRINT OUT, IT IS S EEN THAT THE IMPUGNED CDS WAS IN FACT CREATED ON 28.03.2003. THIS MEANS THAT SEIZED HARD COPIES WAS NOTHING BUT THE PRINT OUT OF THE CD PREPARED ON 28.03.2003, THEREFORE, THE ASSUMPTIO N OF THE AO THAT SINCE THE PAPERS WERE UNDATED, AND THEREFORE, THEY HAVE TO BE PRESUMED TO BE PERTAININ G TO THE FINANCIAL YEAR, IN WHICH THEY WERE FOUND, LOSSE S ITS LEGS AND THIS ASSUMPTION FALLS. HENCE ADDITION CAN BE SUSTAINED ON THIS ARGUMENTS. 24. ON THE OTHER HAND, THE SUBMISSIONS OF THE AR CA NNOT BE IGNORED THAT ALL THE ASSETS AND LIABILITIES WERE DISTRIBUTED AS PER THE FAMILY ARRANGEMENT IMMEDIATE LY THEREAFTER AND WHEREVER NECESSARY, CAPITAL GAINS HA D BEEN PAID. SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 26 25. BEFORE US THOUGH THE AR PLACED RELIANCE ON THE DECISIONS OF IN THE CASE OF P R METRANI VS CIT- 287 ITR 209 (SC) IN THE CASE OF SURENDRA M KHANDHAR VS ACIT 321 ITR 254 (BOM) IN OUR VIEW BOTH THESE DECISIONS MAY NOT BE NECESSA RY, BECAUSE, THE QUESTION OF REBUTTAL ON THE PROPOSED ADDITION HAS NOT BEEN OCCASIONED BECAUSE THE ADDITI ONS MADE BY THE AO, HAVE BEEN BASED ON NOTINGS ON THE C DS PREPARED ON 28.03.2003, WHICH WE HAVE HELD CANNOT B E SUSTAINED. 26. WE ALSO REJECT THE GOA NO. 6, WHEREIN THE DEPARTMENT HAS SOUGHT RESTORATION OF THE CASE TO TH E FILE OF THE AO, BECAUSE OF NON ALLOWANCE OF PROPER OPPORTUNITY UNDER RULE 46A. THIS HAS BEEN CATEGORIC ALLY REJECTED BY THE CIT(A), WHEREIN HE HAS HELD THAT TH E ASSESSEE HAS NOT PRODUCED/SUBMITTED ANYTHING OR ANY EVIDENCE, WHICH WAS NOT BEFORE THE AO OR WAS NOT IN THE SEIZED MATERIAL. 27. WE, THEREFORE, REJECT THE GROUNDS AS RAISED BY THE DEPARTMENT AND CONSEQUENTIALLY DISMISS THE APPEAL A S FILED BY THE DEPARTMENT. 28. IN THE RESULT, DEPARTMENTAL APPEAL, AS FILED BY THE REVENUE STANDS DISMISSED. 35. FOLLOWING THE ABOVE SAID PARAS, WE DISMISS THE GROUNDS INVOLVED IN DEPARTMENT ITA NO. 3777/MUM/2013. ACCORDINGLY, DEPART MENTS APPEAL STANDS DISMISSED. ITA NO. : 3765/MUM/2013 : DEPARTMENT APPEAL : 36. THE DEPARTMENT HAS RAISED THE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT(A) ERRED IN ANNULLING THE ASSESSMENT ON THE GROUND OF LIMITATION BY HOLDING THAT THE C.D. WAS CREATED ON 28.3.2003, FALLING BEYOND SIX YEARS LIMITATION PERIOD PRESCRIB ED IN SECTION 153A(1) WITHOUT VERIFYING THE AUTHENTICITY AND ALLE GED DATE OF CD THROUGH FORENSIC EXPERT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) ERRED IN ANNULLING THE ASSESSMENT ON THE BASIS OF SURMISES AND PRESUMPTIONS WITHOUT VERIFYING THE FAC TS AS AVAILABLE ON RECORD. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS . 11,87,00,000/- ON ACCOUNT OF UNACCOUNTED RECEIPTS D UE TO FAMILY ARRANGEMENT IGNORING THE PRESUMPTIONS WITH R EGARD TO THE ENTRIES FOUND IN SIZED MATERIAL AS PER PROVISIO NS OF SECTION 292C R.W.S. 132(4A) OF I.T. ACT. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS . 11,86,00,000/- ON ACCOUNT OF UNACCOUNTED PAYMENTS D UE TO FAMILY ARRANGEMENT IGNORING THE PRESUMPTIONS WITH R EGARD TO SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 27 THE ENTRIES FOUND IN SEIZED MATERIAL AS PER PROVISI ONS OF SECTION 292C R.W.S. 132(4A) OF I.T. ACT. 5. ON THE FACTS AND IN LAW, THE LD. CIT(A) ERRED IN ANNULLING THE ASSESSMENT AND DELETING THE ADDITIONS BY RELYING ON THE ADDITIONAL EVIDENCE IN THE FORM OF FAMILY AGREEMENT S DATED MARCH 2000 AND 01.01.2003 BUT IGNORING THAT THESE A GREEMENTS INDICATED FINANCIAL TRANSACTIONS DURING THE YEARS C OVERED U/S 153A OF THE I.T. ACT. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) ERRED IN ADMITTING THE ADDITIONAL EV IDENCE IN VIOLATION OF RULE 46A OF THE I.T. RULES 1962 WITHOU T PROVIDING THE AO OPPORTUNITY TO COMMENT ON MERITS. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFI CER BE RESTORED. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GR OUND AND/OR ADD NEW GROUNDS WHICH MAY BE NECESSARY. 37. THE CIT(A) ON CONSIDERATION OF THE SUBMISSIONS AS MAD E BY THE ASSESSEE ALONG WITH THE DOCUMENTS FOUND SEIZED, HAS OBSERVED: I HAVE CONSIDERED THE FACTS OF THE CASE AND PERUS ED THE MATERIAL ON RECORD INCLUDING THE CD2 AND CT)19 SUBMITTED DURING THE COURSE OF THE HEARING AND OPENED BY THE REPRESENTATIVES OF THE APPELLANT IN M Y PRESENCE. ON AN EXAMINATION OF THE MATERIAL FURNISHED BY THE APPELLANT DURING THE COURSE OF THE HEARING AND ON PERUSING THE TWO CD I AM OF THE OPINION THAT NO NEW EVIDENCE IS SOUGHT TO BE PLACED BEFORE ME BY THE APPELLANT. THE ENTIRE MATERIAL INCLUDING THAT ON TH E TWO CD FORMS PART OF THE SEIZED MATERIAL AND WAS THEREF ORE WITH THE AO WHEN HE PASSED THE ORDER. IN THE REMAND REPORT THE AO HAS NOT OFFERED ANY COMMENTS IN RESPECT OF ASSESSMENT ORDERS FOR A.Y.2010-11 WITHOUT ASSIGNING ANY REASON THEREBY SUGGESTING THAT HE HAD NOTHING TO SAY IN THE MATTER . BEYOND DOUBT CD 19 FILE HAVING PATH NAME AS 'COPYL9\SURESH\OHD\MYDOCUMENTS\DATA\MSODAT A\EXCEL\INDBS.XLS' CONTAINS SAME TWO PAGES AS 37 & 38 COPIES OF WHICH HAVE BEEN APPENDED TO THE ASSESSMENT ORDER AND WHICH CONSTITUTE THE BASIS FOR THE IMPUGNED ASSESSMENT.CD NO. 2, WHEN OPENED SHOWED ANOTHER FIVE PAGES PERTAINING TO GROUP BALANCE SHEE TS. THESE FIVE PAGES ARE THE BASIS FOR PREPARATION OF T WO PAGES NO. 37 & 38. RELEVANT FIGURES ON PAGES 37 & 3 8. THE RELEVANT FIGURES ON PAGES 37 & 38 PERFECTLY MAT CH WITH THE FIGURES ON 5 PAGES ON CD 2 IT IS SEEN THAT THESE FIVE PAGES HAVE VERY CLEAR HEADINGS AS 'BALANCE SHEET AS ON 13/03/2003'. IT IS THUS CLEAR THAT TWO PAGES I.E. 37 & 38 ARE THE SUMMARIZE D VERSION OF FIVE PAGES AVAILABLE ON CD 2 AND FURTHER THAT THE ENTIRE DATA CONTAINED THEREIN PERTAINS TO THE SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 28 PERIOD BEFORE 31/03/2003 THE AR HAS CLARIFIED THAT PAGES 37 & 38 REPRESENT PROBABLE BALANCE SHEETS DRAWN UP IN THE CONTEXT OF FAMILY AGREEMENT OF 01/01/2003. ON AN EXAMINATION OF THE MATERIAL ON RECORD IT IS QUITE CLEAR THAT THERE HAVE BEEN LONG STANDING DISPUTES WITHIN THE MEHTA FAMILY GENESIS OF WHICH GOES BEYOND THE YEAR 2000. A SERIES OF LETTERS HAVE BEEN EXCHANGED BETWEEN THE APPELLANT AND HIS SON SAILESH WHEREIN VARIOUS CLAIMS AND COUNTER CLAIMS HAVE BEEN RAISED. MR. CKM, WHO IS INTO HIS EIGHTIES, AS THE HEAD OF THE FAMILY WANTED TO EVOLVE A SUCCESSION PLAN THE AIM OF WHICH WAS PEACE AND HARMONY IN THE FAMILY. HE ALONG WITH HIS WIFE MRS. KANTA MEHTA DESIRED TO RELINQUISH IN FAVOR OF THEIR SONS, THEIR INTERESTS IN THE TWO LISTED COMPANIES DFPCL AND DNL. SINCE THE 2000 AGREEMENT DID NOT RESULT IN SETTLEMENT OF DISPUTES A FRESH FAMILY AGREEMENT WAS DRAWN UP BY M/S. UDWACLIA, UDESHI AND BERGIS, SOLICITORS, IN JANUARY, 2003. UNDER THIS FAMILY AGREEMENT DCM WOULD OWN AND MANAGE DNL, SCM WOULD OWN AND MANAGE DFPCL AND ACM WAS TO BE PAID CASH OF RS. 53 CRORES BEING HIS SHAR E IN THE VALUE OF THE FAMILY SHARES. FOR THIS PURPOSE SHARES IN DFPCL AND DNL, WHICH WERE NOTIONALLY VALUED AND DIVIDED EQUALLY AMONG THE THREE SONS IN SUCH A WAY THAT EACH SON WAS TO RECEIVE ASSETS OF THE VALUE OF RS.53 CRORES. THE 2003 AGREEMENT PROVIDED FOR VARIOUS THINGS INCLUDING PAYMENT OF SPECIFIED AMOUNTS AND INTER SE REDISTRIBUTION OF OTHER ASSETS AND LIABILITIES BETW EEN THE FAMILY MEMBERS AS EXPLAINED IN DETAIL BY THE AR IN HIS SUBMISSIONS. AS EXPLAINED BY THE AR EQUAL DISTRIBUTION OF THE FAMILY ASSETS AMONG THE FOUR GROUPS MEANT REDISTRIBUTION OF ASSETS INVOLVING VARIOUS FAMILY MEMBERS AND THEIR CORPORATE ENTITIES. THIS INVOLVED ENSURING THAT CONTROL, ASS, AND LIABILITIES OF SPEC IFIC ENTITIES WERE , ALLOTTED TO SPECIFIC GROUP IN THE PROCESS ENSURING THAT THERE WAS FINANCIAL EQUALITY. AN EXERCISE OF PLOTTING PROBABLE /REQUIRED REDISTRIBUTION OF FINANCIAL ASSETS AS APPEARING ON SAID PAGES 37 & 38 WAS UNDERTAKEN AROUND 12TH MARCH, 2003 I.E. SOON AFTER THE FAMILY AGREEMENT WA S ENTERED INTO ON 1ST JANUARY, 2003. SINCE THIS EXERC ISE INVOLVED AS MANY AS ABOUT 33 ENTITIES AND FINANCIAL ASSETS OF LARGE NUMBER AND VALUE AND DIVERSE NATURE , THE OFFICE OF THE APPELLANT THOUGHT EXPEDIENT TO PL OT IN SEPARATE ACCOUNTING SOFTWARE. AN ELEMENTARY EXERCIS E OF PREPARING MEMORANDUM LEDGER ACCOUNTS BY RECORDING MEMORANDUM JOURNAL ENTRIES ETC WAS UTILIZED FOR THI S PURPOSE. THE CDS ON RECORD ALSO CLEARLY ESTABLISH T HE FACT THAT THE STARTING POINT OF THIS ENTIRE EXERCIS E WAS BALANCE SHEETS AS ON 13.03.2003 AS APPEARING IN THE BOOKS OF ACCOUNT MAINTAINED BY VARIOUS GROUP ENTITI ES. THE FURTHER FACT WHICH DISTINCTLY EMERGES FROM THE SEIZED MATERIAL/CD IS THAT THE COMPONENTS OF THE FIGURES O F SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 29 CASH PAID AND CASH RECD AS APPEARING AT THE END OF THESE PROBABLE BALANCE SHEETS ARE IN FACT LIQUID ASSETS IN THE FORM OF LOANS, LIABILITIES, CASH AND BANK BALANCES ETC. THE PROBABLE BALANCE SHEET IN THE CASE OF DCM GROUP AS APPEARING ON PAGE 37 & 38 READS AS UNDER: CAPITAL OTHER LIABILITY (TAX ON YIL) 1000 67 MARYLAND GOTRI DNL OTHER STOCK OTHER SH/. BALANCE 392 17 647 4 6 1 1067 1067 CASH RECEIVED + 1,187 CASH PAID _ 1,186 1 THE AO HAS BROUGHT TO TAX RS.11.87 CRORES AND RS.11.86 CRORES AS UNEXPLAINED CASH RECD AND CASH PAID. SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 30 SIMILARLY THE SO CALLED CASH RECD IS IN FACT THE TO TAL OF THE FOLLOWING: ASSETS: LOAN GIVEN TO GROUP 150 CURRENT ASSETS GROUP 1011 OTHERS 3 SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 31 CASH AND BANK BALANCE 23 (TREATED AS CASH RECEIVED IN PAGES 37 & 38) TOTAL 1187 IN MY OPINION, IT IS BEYOND DOUBT THAT THE WORDS CA SH PAID AND CASH RECD HAVE BEEN IN FACT USED TO REFER TO IDENTIFIED LIQUID ASSETS BY WAY OF LOANS TAKEN, LOANS GIVEN, CURRENT LIABILITIES, AND CASH/BANK BAL ANCES WHICH WERE PROPOSED TO BE REDISTRIBUTED PURSUANT TO THE FAMILY AGREEMENT. THESE WORDS DO NOT REPRESENT HARD CASH RECEIVED OR HARD CASH PAID AS ORDINARILY CONVE YED BY THESE WORDS. THAT THE FIGURES APPEARING ON PAGES 37 AND 38 ARE PROBABLE BALANCE SHEETS IS OBVIOUS. THE PURPOSE OF THE ENTIRE EXERCISE OF PREPARING MEMORANDUM PROBABLE BALANCE SHEETS HAS ALSO BEEN SATISFACTORILY EXPLAINED BY THE APPELLANT; IT HAS I TS GENESIS IN THE LONG STANDING FAMILY DISPUTES WHICH ARE IN FACT STILL NOT SETTLED. THE FACT THAT THESE PROBABLE BALANCE SHEETS HAVE BE EN DRAWN UP FROM THE ACCOUNTED BALANCE SHEETS AS ON 13.03.2003 IS ALSO CLEARLY REFLECTED IN CD 2 (G-6 T O G-LL OF THE PAPER BOOK - BOX FILE NO. 1). THERE IS ALSO MERIT IN THE CONTENTION OF THE AR THA T THOUGH BY PASSING SIMILAR ORDERS IN THE CASE OF 5 GROUP ASSESSEES, THE AO HAS BROUGHT TO TAX RS.242,75,00,000/- AS UNACCOUNTED CASH, DURING SEARCH ON 21.07.2009 NO UNACCOUNTED CASH WAS FOUND AT ANY PLACE - OFFICE OR RESIDENCE - ACROSS T HE GROUP. SIMILARLY NO ACCOUNTED INVESTMENT OR UNACCOUNTED EXPENDITURE WAS ALSO FOUND. THIS LENDS FURTHER SUPPORT TO THE CONTENTION OF THE APPELLANT THAT THESE ARE ONLY PROBABLE OR PROJECTED FIGURES AND NO T FIGURES OF HARD CASH.. ANOTHER NOTEWORTHY FACT WHICH EMERGES ON VIEWING CD 19 CONTAINING PAGES 37 & 38 IS THAT THE CONTENT THERE OF WAS CREATED ON 28.03.2003. THE PROPERTIES OF THIS CD/FI LE AS RECORDED IN THE COMPUTER AT THE TIME OF ITS CREATIO N, WHICH WAS ALSO DEMONSTRATED BEFORE ME, APPEAR AS UNDER: THERE IS THEREFORE MERIT IN THE CONTENTION OF THE A R THAT THIS CII) WAS CREATED ON 28.03.2003 A DATE FALLING BEYO ND SIX YEAR LIMITATION PERIOD PRESCRIBED IN SECTION 53 A(1) SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 32 THE ACT. IN MY OPINION THE APPEAL MERITS BEING ALLOWED BOTH ON GROUNDS OF LIMITATION AND THE GROUND THAT THE FIGUR ES ARE IN ANY EVENT ONLY PROBABLE BALANCE SHEETS AND D O NOT REFLECT ACTUAL TRANSACTIONS OF CASH PAID AND CASH RECD. THESE PROBABLE BALANCE SHEETS WERE THEMSELVES BASED ON BALANCE SHEETS AS ON 13.03.2003 DRAWN UP FROM THE REGULAR BOOKS OF ACCOUNT MAINTAIN ED BY THE APPELLANT. MOREOVER THE WORDS CASH PAID AND CASH RECD DO NOT IN FACT REFLECT HARD CASH BUT IDENTIFIED AND ACCOUN TED LIQUID ASSETS. FOR ALL THE REASONS DISCUSSED HEREINABOVE, THE ASSESSMENT IS ANNULLED AND EX CONSEQUENTIA THE SUM OF RS.23,73,00,000/- ADDED TO THE TOTAL INCOME OF THE APPELLANT DOES NOT SURVIVE AND GETS DELETE. 38. AS THE ISSUES INVOLVED IN THE IMPUGNED APPEAL ARE COMM ON AS DELIBERATED AND DECIDED BY US HEREINABOVE IN OUR ORDER W HILE ADJUDICATING THE DEPARTMENTS ITA NO. 3767/MUM/2013 AT LENGTH AND FOLLOWING THE SAME DECIDED ANOTHER DEPARTMENTS APPEAL IN ITA 3777/MUM/2013. THE RELEVANT CONCLUSIVE PARAS OF OUR ORD ER READ AS UNDER: 20. WE HAVE PERUSED THE ARGUMENTS FROM EITHER SIDE AND HAVE ALSO PERUSED THE MATERIAL PLACED BEFORE US ALONG WITH THE ORDERS OF THE REVENUE AUTHORITIES. 21. THE FOLLOWING ABBREVIATIONS, AS USED IN THE S EIZED PAPERS: S.NO. NAME ABBREVIATION 1 MR. CHIMANLAL KHIMCHAND MEHTA CKM 2 MR. DEEPAK CHIMANLAL MEHTA DCM 3 MR. SAILESH CHIMANLAL MEHTA SCM 4 MR. AJAY CHIMANLAL MEHTA ACM 5 M/S. DEEPAK FERTILIZERS & PETROCHEMICALS CORPORATION LTD. DFPCL 6 M/S. DEEPAK NITRATE LTD DNL 7 M/S. YERROWADA INVESTMENTS LTD YIL 22. THE FACT THAT PAPERS AND CDS WERE SEIZED AT THE TIME OF SEARCH ON 21.07.2007, IS EVIDENCED FROM THE PANCHNAMA (APB VOL 3 912). IT IS ALSO A FACT THAT T HE HARD COPIES OF PRINT OUT WHICH WERE UNDATED WERE FO UND IN THE LOOSE PAPERS, WHICH, WHEN EXAMINED BY RUNNIN G THE CDS WERE FOUND TO BE PERTAINING TO 23.03.2003 A ND 28.03.2003, PRIOR TO THE PERIOD FOR 153A PROCEEDING S. 23. ON EXAMINATION OF THE SEIZED PRINT OUT, IT IS S EEN THAT THE IMPUGNED CDS SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 33 WAS IN FACT CREATED ON 28.03.2003. THIS MEANS THAT SEIZED HARD COPIES WAS NOTHING BUT THE PRINT OUT OF THE CD PREPARED ON 28.03.2003, THEREFORE, THE ASSUMPTIO N OF THE AO THAT SINCE THE PAPERS WERE UNDATED, AND THEREFORE, THEY HAVE TO BE PRESUMED TO BE PERTAININ G TO THE FINANCIAL YEAR, IN WHICH THEY WERE FOUND, LOSSE S ITS LEGS AND THIS ASSUMPTION FALLS. HENCE ADDITION CAN BE SUSTAINED ON THIS ARGUMENTS. 24. ON THE OTHER HAND, THE SUBMISSIONS OF THE AR CA NNOT BE IGNORED THAT ALL THE ASSETS AND LIABILITIES WERE DISTRIBUTED AS PER THE FAMILY ARRANGEMENT IMMEDIATE LY THEREAFTER AND WHEREVER NECESSARY, CAPITAL GAINS HA D BEEN PAID. 25. BEFORE US THOUGH THE AR PLACED RELIANCE ON THE DECISIONS OF IN THE CASE OF P R METRANI VS CIT- 287 ITR 209 (SC) IN THE CASE OF SURENDRA M KHANDHAR VS ACIT 321 ITR 254 (BOM) IN OUR VIEW BOTH THESE DECISIONS MAY NOT BE NECESSA RY, BECAUSE, THE QUESTION OF REBUTTAL ON THE PROPOSED ADDITION HAS NOT BEEN OCCASIONED BECAUSE THE ADDITI ONS MADE BY THE AO, HAVE BEEN BASED ON NOTINGS ON THE C DS PREPARED ON 28.03.2003, WHICH WE HAVE HELD CANNOT B E SUSTAINED. 26. WE ALSO REJECT THE GOA NO. 6, WHEREIN THE DEPARTMENT HAS SOUGHT RESTORATION OF THE CASE TO TH E FILE OF THE AO, BECAUSE OF NON ALLOWANCE OF PROPER OPPORTUNITY UNDER RULE 46A. THIS HAS BEEN CATEGORIC ALLY REJECTED BY THE CIT(A), WHEREIN HE HAS HELD THAT TH E ASSESSEE HAS NOT PRODUCED/SUBMITTED ANYTHING OR ANY EVIDENCE, WHICH WAS NOT BEFORE THE AO OR WAS NOT IN THE SEIZED MATERIAL. 27. WE, THEREFORE, REJECT THE GROUNDS AS RAISED BY THE DEPARTMENT AND CONSEQUENTIALLY DISMISS THE APPEAL A S FILED BY THE DEPARTMENT. 28. IN THE RESULT, DEPARTMENTAL APPEAL, AS FILED BY THE REVENUE STANDS DISMISSED. SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 34 39. FOLLOWING THE ABOVE SAID PARAS, WE DISMISS THE GROUNDS INVOLVED IN DEPARTMENT ITA NO. 3765/MUM/2013. ACCORDINGLY, DEPART MENTS APPEAL STANDS DISMISSED. ITA NO. : 3766/MUM/2013 : DEPARTMENT APPEAL : 40. THE DEPARTMENT HAS RAISED THE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT(A) ERRED IN ANNULLING THE ASSESSMENT ON THE GROUND OF LIMITATION BY HOLDING THAT THE C.D. WAS CREATED ON 28.3.2003, FALLING BEYOND SIX YEARS LIMITATION PERIOD PRESCRIB ED IN SECTION 153A(1) WITHOUT VERIFYING THE AUTHENTICITY AND ALLE GED DATE OF CD THROUGH FORENSIC EXPERT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) ERRED IN ANNULLING THE ASSESSMENT ON THE BASIS OF SURMISES AND PRESUMPTIONS WITHOUT VERIFYING THE FAC TS AS AVAILABLE ON RECORD. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS . 6,68,00,000/- ON ACCOUNT OF UNACCOUNTED RECEIPTS DUE TO FAMILY AR RANGEMENT IGNORING THE PRESUMPTIONS WITH REGARD TO THE ENTRIE S FOUND IN SIZED MATERIAL AS PER PROVISIONS OF SECTION 292C R. W.S. 132(4A) OF I.T. ACT. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS . 36,21,00,000/- ON ACCOUNT OF UNACCOUNTED PAYMENTS D UE TO FAMILY ARRANGEMENT IGNORING THE PRESUMPTIONS WITH R EGARD TO THE ENTRIES FOUND IN SEIZED MATERIAL AS PER PROVISI ONS OF SECTION 292C R.W.S. 132(4A) OF I.T. ACT. 5. ON THE FACTS AND IN LAW, THE LD. CIT(A) ERRED IN ANNULLING THE ASSESSMENT AND DELETING THE ADDITIONS BY RELYING ON THE ADDITIONAL EVIDENCE IN THE FORM OF FAMILY AGREEMENT S DATED MARCH 2000 AND 01.01.2003 BUT IGNORING THAT THESE A GREEMENTS INDICATED FINANCIAL TRANSACTIONS DURING THE YEARS C OVERED U/S 153A OF THE I.T. ACT. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) ERRED IN ADMITTING THE ADDITIONAL EV IDENCE IN VIOLATION OF RULE 46A OF THE I.T. RULES 1962 WITHOU T PROVIDING THE AO OPPORTUNITY TO COMMENT ON MERITS. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFI CER BE RESTORED. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GR OUND AND/OR ADD NEW GROUNDS WHICH MAY BE NECESSARY. 41. THE CIT(A) ON CONSIDERATION OF THE SUBMISSIONS AS MADE BY THE ASSESSEE ALONG WITH THE DOCUMENTS FOUND SEIZED, HAS OBSERVED: TO FURTHER BOLSTER HIS CASE THE AR OPENED IN MY PRE SENCE THE SAID TWO CD 2 AND 19. ON BEING ACCESSED CD 19, AND ON OPENING HAVING PATH NAME AS 'COPY 1 9\SURESH\OHD\MYDOCUMENTS\DATA\MSODATA\EX SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 35 CEL\INDBS .XLS', HE SHOWED ME FILE CONTAINING SAME TWO PAGES AS 37 & 38 WHICH IS THE BASIS FOR THE IMPUGNED ASSESSMENT. HE ALSO DREW MY ATTENTION TO THE FACT THAT AS PER T HE COMPUTER RECORD, THIS FILE HAVING TWO PAGES SIMILAR TO 37 & 38, WAS CREATED ON 28/03/2003. THE COPY OF COMPUTER PRINTOUT WAS ALSO PLACED ON RECORD. HE SUBMITTED THAT, IN THE CIRCUMSTANCES, USE OF THE WORDS 'CASH PAID' AND CASH RECEIVED' HAS TO BE SEEN IN THE FACTS AND CONTEXT OF THE CASE AND NOT WITH REFERENCE TO THE ENGLISH DICTIONARY AS HAS BEEN DON E BY THE LEARNED AO. THE AR SUBMITTED THAT THE AO VIDE HIS LETTER DATED 17.01.2012 HAD PERMITTED THE APPELLANT TO TAKE COPI ES OF ALL THE SEIZED MATERIAL (INCLUDING SOFT MATERIAL) WHICH INCLUDES THE MATERIAL RECORDED ON THE SAID TW O CDS. HE SUBMITTED THAT THE APPELLANT OBTAINED SUCH COPIES FROM THE AO ON 08.02.2012. THUS, NO ADDITION AL EVIDENCE IS CONTAINED IN THESE CDS. I HAVE CONSIDERED THE FACTS OF THE CASE AND PERUSED THE MATERIAL ON RECORD INCLUDING THE CD2 AND CD19 SUBMITTED DURING THE COURSE OF THE HEARING AND OPENED BY THE REPRESENTATIVES OF THE APPELLANT IN M Y PRESENCE. ON AN EXAMINATION OF THE MATERIAL FURNISHED BY THE APPELLANT DURING THE COURSE OF THE HEARING AND ON PERUSING THE TWO CD I AM OF THE OPINION THAT NO NEW EVIDENCE IS SOUGHT TO BE PLACED BEFORE ME BY THE APPELLANT. THE ENTIRE MATERIAL INCLUDING THAT ON TH E TWO CD FORMS PART OF THE SEIZED MATERIAL AND WAS THEREF ORE WITH THE AO WHEN HE PASSED THE ORDER. IN THE REMAND REPORT THE AO HAS NOT OFFERED ANY COMMENTS IN RESPECT OF ASSESSMENT ORDERS FOR A.Y.2010-11 WITHOUT ASSIGNING ANY REASON THEREBY SUGGESTING THAT HE HAD NOTHING TO SAY IN THE MATTER . BEYOND DOUBT CD 19 FILE HAVING PATH NAME AS 'COPY L9\SURESH\OHD\MYDOCUMENTS\DATA\MSODATA\EXCEL \INDBS.XLS' CONTAINS SAME TWO PAGES AS 37 & 38 COPIES OF WHICH HAVE BEEN APPENDED TO THE ASSESSMEN T ORDER AND WHICH CONSTITUTE THE BASIS FOR THE IMPUGN ED ASSESSMENT. CD NO. 2, WHEN OPENED SHOWED ANOTHER FIVE PAGES PERTAINING TO GROUP BALANCE SHEETS. THESE FIVE PAGE S ARE THE BASIS FOR PREPARATION OF TWO PAGES NO. 37 & 38. RELEVANT FIGURES ON PAGES 37 & 38 PERFECTLY MATCH W ITH THE FIGURES ON 5 PAGES ON CD 2. IT IS SEEN THAT THESE FIVE PAGES HAVE VERY CLEAR HEADINGS AS 'BALANCE SHEET AS ON 13/03/2003'. IT IS THUS CLEAR THAT TWO PAGES I.E. 37 & 38 ARE TH E SUMMARIZED VERSION OF FIVE PAGES AVAILABLE ON CD 2 AND FURTHER THAT THE ENTIRE DATA CONTAINED THEREIN PERTAINS TO THE PERIOD BEFORE 31/03/2003 THE AR HAS CLARIFIED THAT PAGES 37 & 38 REPRESENT PROBABLE BALANCE SHEETS DRAWN UP IN THE CONTEXT OF FAMILY AGREEMENT OF 01/01/2003. SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 36 ON AN EXAMINATION OF THE MATERIAL ON RECORD IT IS QUITE CLEAR THAT THERE HAVE BEEN LONG STANDING DISPUTES WITHIN THE MEHTA FAMILY GENESIS OF WHICH GOES BEYOND THE YEAR 2000. A SERIES OF LETTERS HAVE BEEN EXCHANGED BETWEEN THE APPELLANT AND HIS SON SAILESH WHEREIN VARIOUS CLAIMS AND COUNTER CLAIMS HAVE BEEN RAISED. MR. CKM, WHO IS INTO HIS EIGHTIES, AS THE HEAD OF THE FAMILY WANTED TO EVOLVE A SUCCESSION PLAN THE AIM OF WHICH WAS PEACE AND HARMONY IN THE FAMILY. HE ALONG WITH HIS WIFE MRS. KANTA MEHTA DESIRED TO RELINQUISH IN FAVOR OF THEIR SONS, THEIR INTERESTS IN THE TWO LISTED COMPANIES DFPCL AND DNL. SINCE THE 2000 AGREEMENT DID NOT RESULT IN SETTLEMENT OF DISPUTES A FRESH FAMILY AGREEMENT WAS DRAWN UP BY M/S. UDWACLIA, UDESHI AND BERGIS, SOLICITORS, IN JANUARY, 2003. UNDER THIS FAMILY AGREEMENT DCM WOULD OWN AND MANAGE DNL, SCM WOULD OWN AND MANAGE DFPCL AND ACM WAS TO BE PAID CASH OF RS. 53 CRORES BEING HIS SHAR E IN THE VALUE OF THE FAMILY SHARES. FOR THIS PURPOSE SHARES IN DFPCL AND DNL, WHICH WERE NOTIONALLY VALUED AND DIVIDED EQUALLY AMONG THE THREE SONS IN SUCH A WAY THAT EACH SON WAS TO RECEIVE ASSETS OF THE VALUE OF RS.53 CRORES. THE 2003 AGREEMENT PROVIDED FOR VARIOUS THINGS INCLUDING PAYMENT OF SPECIFIED AMOUNTS AND INTER SE REDISTRIBUTION OF OTHER ASSETS AND LIABILITIES BETW EEN THE FAMILY MEMBERS AS EXPLAINED IN DETAIL BY THE AR IN HIS SUBMISSIONS. AS EXPLAINED BY THE AR EQUAL DISTRIBUTION OF THE FAMILY ASSETS AMONG THE FOUR GROUPS MEANT REDISTRIBUTION OF ASSETS INVOLVING VARIOUS FAMILY MEMBERS AND THEIR CORPORATE ENTITIES. THIS INVOLVED ENSURING THAT CONTROL, ASS, AND LIABILITIES OF SPEC IFIC ENTITIES WERE , ALLOTTED TO SPECIFIC GROUP IN THE PROCESS ENSURING THAT THERE WAS FINANCIAL EQUALITY. AN EXERCISE OF PLOTTING PROBABLE /REQUIRED REDISTRIBUTION OF FINANCIAL ASSETS AS APPEARING ON SAID PAGES 37 & 38 WAS UNDERTAKEN AROUND 12TH MARCH, 2003 I.E. SOON AFTER THE FAMILY AGREEMENT WA S ENTERED INTO ON 1ST JANUARY, 2003. SINCE THIS EXERC ISE INVOLVED AS MANY AS ABOUT 33 ENTITIES AND FINANCIAL ASSETS OF LARGE NUMBER AND VALUE AND DIVERSE NATURE , THE OFFICE OF THE APPELLANT THOUGHT EXPEDIENT TO PL OT IN SEPARATE ACCOUNTING SOFTWARE. AN ELEMENTARY EXERCIS E OF PREPARING MEMORANDUM LEDGER ACCOUNTS BY RECORDING MEMORANDUM JOURNAL ENTRIES ETC WAS UTILIZED FOR THI S PURPOSE. THE CDS ON RECORD ALSO CLEARLY ESTABLISH T HE FACT THAT THE STARTING POINT OF THIS ENTIRE EXERCIS E WAS BALANCE SHEETS AS ON 13.03.2003 AS APPEARING IN THE BOOKS OF ACCOUNT MAINTAINED BY VARIOUS GROUP ENTITI ES. THE FURTHER FACT WHICH DISTINCTLY EMERGES FROM THE SEIZED MATERIAL/CD IS THAT THE COMPONENTS OF THE FIGURES O F CASH PAID AND CASH RECD AS APPEARING AT THE END OF THESE PROBABLE BALANCE SHEETS ARE IN FACT LIQUID ASSETS IN THE FORM OF LOANS, LIABILITIES, CASH AND BANK BALANCES ETC. SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 37 SCM & GROUP CAPITAL 806 GOTRI 17 LOAN TAKEN 84 BUNGLOW 396 DEFICIT -WCCL-2200 -OTHERS 753 2953 DFPCL-SH 2,153 YIL TDR SH. 94 LOANS TO OTHERS 10 LOAN TO SMART 430 3843 3843 CASH RECD. + 668 CASH PAID - 3,621 DEFICIT 2,953 THE AO HAS BROUGHT TO TAX RS.6.68 CRORES AND RS.36.21 CRORES AS UNEXPLAINED CASH RECD AND CASH PAID. THE BREAK UP OF THE SAID TWO FIGURES AS AVAILABLE O N CD 2 IS AS UNDER: SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 38 SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 39 IN MY OPINION, IT IS BEYOND DOUBT THAT THE WORDS CA SH PAID AND CASH RECD HAVE BEEN IN FACT USED TO REFER TO IDENTIFIED LIQUID ASSETS BY WAY OF LOANS TAKEN, LOANS GIVEN, CURRENT LIABILITIES, AND CASH/BANK BAL ANCES WHICH WERE PROPOSED TO BE REDISTRIBUTED PURSUANT TO THE FAMILY AGREEMENT. THESE WORDS DO NOT REPRESENT HARD CASH RECEIVED OR HARD CASH PAID AS ORDINARILY CONVE YED BY THESE WORDS. THAT THE FIGURES APPEARING ON PAGES 37 AND 38 ARE PROBABLE BALANCE SHEETS IS OBVIOUS. THE PURPOSE OF THE ENTIRE EXERCISE OF PREPARING MEMORANDUM PROBABLE BALANCE SHEETS HAS ALSO BEEN SATISFACTORILY EXPLAINED BY THE APPELLANT; IT HAS I TS GENESIS IN THE LONG STANDING FAMILY DISPUTES WHICH ARE IN FACT STILL NOT SETTLED. THE FACT THAT THESE PROBABLE BALANCE SHEETS HAVE BE EN DRAWN UP FROM THE ACCOUNTED BALANCE SHEETS AS ON 13.03.2003 IS ALSO CLEARLY REFLECTED IN CD 2 (G-6 T O G-LL OF THE PAPER BOOK - BOX FILE NO. 1). THERE IS ALSO MERIT IN THE CONTENTION OF THE AR THA T THOUGH BY PASSING SIMILAR ORDERS IN THE CASE OF 5 GROUP ASSESSEES, THE AO HAS BROUGHT TO TAX RS.242,75,00,000/- AS UNACCOUNTED CASH, DURING SEARCH ON 21.07.2009 NO UNACCOUNTED CASH WAS FOUND AT ANY PLACE - OFFICE OR RESIDENCE - ACROSS T HE GROUP. SIMILARLY NO ACCOUNTED INVESTMENT OR UNACCOUNTED EXPENDITURE WAS ALSO FOUND. THIS LENDS FURTHER SUPPORT TO THE CONTENTION OF THE APPELLANT THAT THESE ARE ONLY PROBABLE OR PROJECTED FIGURES AND NO T FIGURES OF HARD CASH.. ANOTHER NOTEWORTHY FACT WHICH EMERGES ON VIEWING CD 19 CONTAINING PAGES 37 & 38 IS THAT THE CONTENT THERE OF WAS CREATED ON 28.03.2003. THE PROPERTIES OF THIS CD/FI LE AS RECORDED IN THE COMPUTER AT THE TIME OF ITS CREATIO N, WHICH WAS ALSO DEMONSTRATED BEFORE ME, APPEAR AS UNDER: THERE IS THEREFORE MERIT IN THE CONTENTION OF THE A R THAT THIS CII) WAS CREATED ON 28.03.2003 A DATE FALLING BEYO ND SIX YEAR LIMITATION PERIOD PRESCRIBED IN SECTION 53 A(1) THE ACT. IN MY OPINION THE APPEAL MERITS BEING ALLOWED BOTH ON SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 40 GROUNDS OF LIMITATION AND THE GROUND THAT THE FIGUR ES ARE IN ANY EVENT ONLY PROBABLE BALANCE SHEETS AND D O NOT REFLECT ACTUAL TRANSACTIONS OF CASH PAID AND CASH RECD. THESE PROBABLE BALANCE SHEETS WERE THEMSELVES BASED ON BALANCE SHEETS AS ON 13.03.2003 DRAWN UP FROM THE REGULAR BOOKS OF ACCOUNT MAINTAIN ED BY THE APPELLANT. MOREOVER THE WORDS CASH PAID AND CASH RECD DO NOT IN FACT REFLECT HARD CASH BUT IDENTIFIED AND ACCOUN TED LIQUID ASSETS. FOR ALL THE REASONS DISCUSSED HEREINABOVE, THE ASSESSMENT IS ANNULLED AND EX CONSEQUENTIA THE SUM OF RS.42,89,00,000/- ADDED TO THE TOTAL INCOME OF THE APPELLANT DOES NOT SURVIVE AND GETS DELETE. 42. AS THE ISSUES INVOLVED IN THE IMPUGNED APPEAL ARE COMM ON AS DELIBERATED AND DECIDED BY US HEREINABOVE IN OUR ORDER W HILE ADJUDICATING THE DEPARTMENT APPEAL IN ITA NO. 3767/MUM/2 013 AT LENGTH AND FOLLOWING THE SAME DECIDED ANOTHER TWO APPEAL O F THE DEPARTMENT IN ITAS NO. 3777/MUM/2013 & ITA 3765/MUM/2 013. THE RELEVANT CONCLUSIVE PARAS OF OUR ORDER READ AS UNDER: 20. WE HAVE PERUSED THE ARGUMENTS FROM EITHER SIDE AND HAVE ALSO PERUSED THE MATERIAL PLACED BEFORE US ALONG WITH THE ORDERS OF THE REVENUE AUTHORITIES. 21. THE FOLLOWING ABBREVIATIONS, ARE USED IN THE SEIZED PAPERS: S.NO. NAME ABBREVIATION 1 MR. CHIMANLAL KHIMCHAND MEHTA CKM 2 MR. DEEPAK CHIMANLAL MEHTA DCM 3 MR. SAILESH CHIMANLAL MEHTA SCM 4 MR. AJAY CHIMANLAL MEHTA ACM 5 M/S. DEEPAK FERTILIZERS & PETROCHEMICALS CORPORATION LTD. DFPCL 6 M/S. DEEPAK NITRATE LTD DNL 7 M/S. YERROWADA INVESTMENTS LTD YIL 22. THE FACT THAT PAPERS AND CDS WERE SEIZED AT THE TIME OF SEARCH ON 21.07.2007, IS EVIDENCED FROM THE PANCHNAMA (APB VOL 3, PG. 912). IT IS ALSO A FACT T HAT THE HARD COPIES OF PRINT OUT WHICH WERE UNDATED WERE FO UND IN THE LOOSE PAPERS, WHICH, WHEN EXAMINED BY RUNNIN G THE CDS WERE FOUND TO BE PERTAINING TO 23.03.2003 A ND 28.03.2003, PERIOD PRIOR TO THE 153A PROCEEDINGS. 23. ON EXAMINATION OF THE SEIZED PRINT OUT, IT IS S EEN THAT THE IMPUGNED CDS SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 41 WAS IN FACT CREATED ON 28.03.2003. THIS MEANS THAT SEIZED HARD COPIES WAS NOTHING BUT THE PRINT OUT OF THE CD PREPARED ON 28.03.2003, THEREFORE, THE ASSUMPTIO N OF THE AO THAT SINCE THE PAPERS WERE UNDATED, AND THEREFORE, THEY HAVE TO BE PRESUMED TO BE PERTAININ G TO THE FINANCIAL YEAR, IN WHICH THEY WERE FOUND, LOSSE S ITS LEGS AND THIS ASSUMPTION FALLS. HENCE ADDITION CAN BE SUSTAINED ON THIS ARGUMENTS. 24. ON THE OTHER HAND, THE SUBMISSIONS OF THE AR CA NNOT BE IGNORED THAT ALL THE ASSETS AND LIABILITIES WERE DISTRIBUTED AS PER THE FAMILY ARRANGEMENT IMMEDIATE LY THEREAFTER AND WHEREVER NECESSARY, CAPITAL GAINS HA D BEEN PAID. 25. BEFORE US THOUGH THE AR PLACED RELIANCE ON THE DECISIONS OF IN THE CASE OF P R METRANI VS CIT- 287 ITR 209 (SC) IN THE CASE OF SURENDRA M KHANDHAR VS ACIT 321 ITR 254 (BOM) IN OUR VIEW BOTH THESE DECISIONS MAY NOT BE NECESSA RY, BECAUSE, THE QUESTION OF REBUTTAL ON THE PROPOSED ADDITION HAS NOT BEEN OCCASIONED BECAUSE THE ADDITI ONS MADE BY THE AO, HAVE BEEN BASED ON NOTINGS ON THE C DS PREPARED ON 28.03.2003, WHICH WE HAVE HELD CANNOT B E SUSTAINED. 26. WE ALSO REJECT THE GOA NO. 6, WHEREIN THE DEPARTMENT HAS SOUGHT RESTORATION OF THE CASE TO TH E FILE OF THE AO, BECAUSE OF NON ALLOWANCE OF PROPER OPPORTUNITY UNDER RULE 46A. THIS HAS BEEN CATEGORIC ALLY REJECTED BY THE CIT(A), WHEREIN HE HAS HELD THAT TH E ASSESSEE HAS NOT PRODUCED/SUBMITTED ANYTHING OR ANY EVIDENCE, WHICH WAS NOT BEFORE THE AO OR WAS NOT IN THE SEIZED MATERIAL. 27. WE, THEREFORE, REJECT THE GROUNDS AS RAISED BY THE DEPARTMENT AND CONSEQUENTIALLY DISMISS THE APPEAL A S FILED BY THE DEPARTMENT. 28. IN THE RESULT, DEPARTMENTAL APPEAL, AS FILED BY THE REVENUE STANDS DISMISSED. SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 42 43. FOLLOWING THE ABOVE SAID PARAS, WE DISMISS THE GROUNDS INVOLVED IN DEPARTMENTS ITA NO. 3766/MUM/2013. ACCORDINGLY, DEPA RTMENTS APPEAL STANDS DISMISSED. ITA NO. : 3764/MUM/2013 : DEPARTMENT APPEAL : 44. THE DEPARTMENT HAS RAISED THE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT(A) ERRED IN ANNULLING THE ASSESSMENT ON THE GROUND OF LIMITATION BY HOLDING THAT THE C.D. WAS CREATED ON 28.3.2003, FALLING BEYOND SIX YEARS LIMITATION PERIOD PRESCRIB ED IN SECTION 153A(1) WITHOUT GETTING ANY FORENSIC EXAMINATION. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) ERRED IN ANNULLING THE ASSESSMENT ON THE BASIS OF SURMISES AND PRESUMPTIONS WITHOUT VERIFYING THE FAC TS AS AVAILABLE ON RECORD. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS . 49,39,00,000/- ON ACCOUNT OF UNACCOUNTED RECEIPTS D UE TO FAMILY ARRANGEMENT IGNORING THE PRESUMPTIONS WITH R EGARD TO THE ENTRIES FOUND IN SIZED MATERIAL AS PER PROVISIO NS OF SECTION 292C R.W.S. 132(4A) OF I.T. ACT. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS . 24,99,00,000/- ON ACCOUNT OF UNACCOUNTED PAYMENTS D UE TO FAMILY ARRANGEMENT IGNORING THE PRESUMPTIONS WITH R EGARD TO THE ENTRIES FOUND IN SEIZED MATERIAL AS PER PROVISI ONS OF SECTION 292C R.W.S. 132(4A) OF I.T. ACT. 5. ON THE FACTS AND IN LAW, THE LD. CIT(A) ERRED IN ANNULLING THE ASSESSMENT AND DELETING THE ADDITIONS BY RELYING ON THE ADDITIONAL EVIDENCE IN THE FORM OF FAMILY AGREEMENT S DATED MARCH, 2000 AND 01.01.2003 BUT IGNORING THAT THESE AGREEMENTS INDICATED FINANCIAL TRANSACTIONS DURING THE YEARS COVERED U/S 153A OF THE I.T. ACT. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) ERRED IN ADMITTING THE ADDITIONAL EV IDENCE IN VIOLATION OF RULE 46A OF THE I.T. RULES 1962 WITHOU T PROVIDING THE AO OPPORTUNITY TO COMMENT ON MERITS. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFI CER BE RESTORED. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GR OUND AND/OR ADD NEW GROUNDS WHICH MAY BE NECESSARY. 45. THE CIT(A) ON CONSIDERATION OF THE SUBMISSIONS AS MAD E BY THE ASSESSEE ALONG WITH THE DOCUMENTS FOUND SEIZED, HAS OBSERVED: THUS THE WORD CASH HAS BEEN USED IN THE CONTEXT OF LIQUID ASSETS NOT ONLY BY THE APPELLANT BUT ALSO BY AN EXTERNAL CA AND BY THE PANE OFFICE OF THE APPELLANT. THIS THEREFORE SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 43 ESTABLISHES A SET PATTERN OF USING THE WORD CASH LOOSELY NOT ONLY WITH REFERENCE TO HARD CASH BUT ALSO OTHER LIQUID ASSETS. IT IS ALSO A FACT THAT THE LETTER DATED 03.12.2008 WAS DICTATED TO THE SECRETARY OF CKM AND COPIES THEREOF WERE ALSO MARKED TO COMPANY EXECUTIVES, EMINENT SOLICITOR AND ALSO GIVEN TO ARBITRATORS. THERE IS MERIT IN THE CONTENTION OF THE AR THAT SUCH OPEN REFERENCE TO CASH OR UNACCOUNTED TRANSACTIONS OF SUCH MAGNITUDE CAN BE SAID TO BE CONTRARY TO NORMAL HUMAN CONDUCT. AS RIGHTLY POINTED OUT BY THE AR SCM IN HIS LETTER DATED 11/12/2008 HAS QUESTIONED THE CORRECTNESS OF THE CONTENTS OF CKM;S LETTER DATED 03/12/2008. IT IS SEEN THAT THIS LETTER IS AGAIN MARKED TO A COMPANY EXECUTIVE AND TO THE SAME SOLICITOR. THE ASSESSING OFFICER HAS NOT MADE A REFERENCE TO THIS LETTER IN THE ASSESSMENT ORDER THOUGH IT WAS PART OF THE SEIZED MATERIAL. THE OTHER MATERIAL FACT WHICH THE ASSESSING OFFICER HAS NOT GIVEN DUE IMPORTANCE IS THAT DURING THE COURSE OF THE SEARCH COVERING THE ENTIRE DEEPAK GROUP COVERING BOTH RESIDENCES OF ALL FAMILY MEMBERS AND ALL THE COMPANIES, NO UNACCOUNTE D CASH WAS FOUND. GOING BY THE ASSESSING OFFICER OWN PRESUMPTION, THIS CASH TRANSACTION IS SUPPOSED TO HAVE TAKEN PLACE DURING THE PERIOD 01.04.2008 TO 31.03.2009 WHILE THE SEARCH TOOK PLACE ON 21.07.2009. DURING THIS EXTENSIVE SEARCH NEITHER WAS ANY UNACCOUNTED CASH OR ANY UNACCOUNTED INVESTMENT OR UNACCOUNTED EXPENDITURE WAS DETECTED EITHER BY THE SEARCH PARTY OR BY THE ASSESSING OFFICER DURING ASSESSMENT PROCEEDINGS BARRING USE OF THE WORD CASH IN THE SAID LETTER OF 03.12.2008. IN MY OPINION THIS FACT LENDS FURTHER CREDENCE TO THE ARGUMENT OF THE AR THAT USE OF THE WORD CASH IN THE SAID LETTER WAS IN THE CONTEXT OF LIQUID FUN DS ONLY AND NOT HARD CASH AS PRESUMED BY THE ASSESSING OFFICER. THE OTHER RELEVANT FACT IS THAT THE FAMILY DISPUTES PARTICULARLY BETWEEN CKM AND SCM HAVE NOT BEEN SETTLED EVEN TODAY AND THE MATTER IS PENDING BEFORE ARBITRATORS. THIS FACT IS ALSO COMING OUT FR OM THE SUBMISSIONS MADE DURING ASSESSMENT PROCEEDINGS. IT IS ALSO SEEN THAT THE ASSESSING OFFICER HAS BROUGHT RS.20 CRORES TO TAX IN A.Y. 2009-10 ONLY BECAUSE THERE IS USE OF THE WORD CASH IN THE LETTER DATED 03.12.2008. IN MY OPINION THERE IS NO BASI S FOR SUCH APPROACH. THE SEIZED MATERIAL CLEARLY SHOWS THAT FAMILY DISPUTES ARE DEEP ROOTED AND GOING ON SINCE PRIOR TO THE YEAR 2000. THE FIRST FAMILY AGREEMENT IS OF MARCH, 2000. THE SECOND FAMILY AGREEMENT IS OF 01/01/2003. THE 2003 AGREEMENT SPEAKS OF THE APPELLANT BEING REQUIRED TO PAY RS.30 CRS. TO ACM ON OR BEFORE 31.03.2003. THE AGREEMENT ALSO NOTES AS A FACT THAT 'WHICH SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 44 FUNDS HAVE BEEN PROVIDED BY CKM TO SCM'. THUS, ACCORDING TO THE JANUARY 2003 AGREEMENT THIS WAS THE ONLY OBLIGATION UNDERTAKEN BY THE APPELLANT VIS--VIS SCM'S LIABILITY TO PAY 53 CRORES TO ACM. ON THE DATE OF EXECUTION OF THE AGREEMENT ITSELF ON 01/01/2003 THE AGREEMENT USES THE PAST TENSE 'WHICH FUNDS HAVE BEEN PROVIDED BY CKM TO SCM' SUGGESTING THAT THE EVENT, IF AT ALL, HAS ALREADY HAPPENED AND CKM HAS ALREADY DISCHARGED HIS UNDERTAKING BY PROVIDING FUNDS TO ACM AS EARLY AS 01/01/2003. THERE IS THEREFORE NO BASIS FOR THE ASSESSING OFFICER TO COME TO A CONCLUSION THAT THE ALLEGED CASH TRANSACTION TOOK PLACE IN F.Y.2008-09 WARRANTING AN ADDITION IN A.Y.2008-09. THE TRANSACTION OF SALE OF FSI BY THE CKM GROUP COMPANY SOFOTEL TO DFPCL, SCM GROUP COMPANY, IS ALSO STATED TO HAVE TAKEN PLACE IN MARCH, 2003. THIS TRANSACTION, WAS DULY APPROVED BY THE BOARD OF DIRECTORS OF DFPCL AND HAS ALSO BEEN ACCEPTED BY TH E DEPARTMENT BOTH IN THE CASE OF SOFOTEL AND DFPCL. T HIS TRANSACTION WAS UNDERTAKEN TO PROVIDE LIQUIDITY TO THE FAMILY. THIS EVENT HAS ALSO OCCURRED IN MARCH 2003 WHICH COINCIDES WITH THE DEADLINE FOR DISCHARGE BY SCM OF HIS OBLIGATION TO PAY ACM RS.30 CRORES ON OR BEFORE 3 1.03.2003 FOR WHICH FUNDS WERE PROVIDED BY CKM AT THAT POINT OF TIME SINCE SCM DID NOT HAVE LIQUIDITY. THIS FACT ALSO DOES NOT SUPPORT THE AO CONCLUSION T HAT THE ALLEGED CASH TRANSACTION TOOK PLACE IN F.Y.2008 -09 WARRANTING AN ADDITION IN A.Y.2008-09. ON A COMBINED READING OF PARA 18 AND PARA 31 OF THE STATEMENT OF FACTS WITH THE APPEAL MEMO TWO THINGS EMERGE NAMELY THAT CKM HAD PROVIDED (IN THE SENSE OF ARRANGED) ASSETS WORTH RS.30 CRORES FOR ACM AND HIS GROUP ENTITIES BEFORE 31/03/2003 AND FURTHER THAT, IN COURSE OF TIME, ACM WAS PROVIDED ( IN THE SENSE OF MADE AVAILABLE) FUNDS IN LIQUID FORM T O THE EXTENT OF RS.34.83 CRORES BY CKM BY PROVIDING CONTR OL OVER CERTAIN PRIVATE COMPANIES HAVING LIQUID FUNDS. CORRECTNESS OF THIS STATEMENT OF FACTS HAS NOT BEEN CHALLENGED BY THE AO AT ANY POINT OF TIME AFTER FIL ING OF THE APPEAL MEMO AND THEREFORE SHOULD BE PRESUMED TO BE CORRECT. IN THIS MANNER CKM CAN BE SAID TO HAVE DISCHARGED H IS ONLY OBLIGATION TOWARDS ACM UNDERTAKEN ON BEHALF OF SCM. THE SEIZED MATERIAL DOES NOT AND IT IS ALSO NOT THE CASE OF THE AC THAT THERE WAS ANY OTHER OBLIGATION UNDERTAKEN BY CKM UNDER THE FAMILY AGREEMENT OF 2003. THERE WAS THEREFORE NO QUESTION OF CKM BEING REQUIRED TO PAY HARD CASH TO ACM ON BEHALF OF SCM IN PURSUANCE OF THE SAID AGREEMENT. THE WORD CASH HAS THEREFORE TO BE NECESSARILY INTERPRETED CONSISTENT WITH THE MANNER IN WHICH IT HAS BEEN GENERALLY USED WITHIN GROUP WHICH SEEMS TO BE SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 45 THE NORMAL CONDUCT OF THE GROUP. THE FACT ALSO REMAINS THAT CKM AND SCM AND THE REST OF THE FAMILY WERE HAVING DEEP ROOTED DIFFERENCES WHICH EVEN THE 2003 AGREEMENT DID NOT FULLY RESOLVE NOTWITHSTANDING THE FACT THAT THE SCHEME OF CONTROL OVER THE TWO PUBLIC LIMITED COMPANIES WAS COMPLETELY CHANGED THEREIN AS COMPARED TO THE 2000 FAMILY AGREEMENT. IN MY OPINION IN SUCH A SITUATION AND IN THE BACKGROUND OF SUCH DEEP ROOTED FAMILY DISPUTES, NORMAL HUMAN CONDUCT WOULD BE OF SETTLING INTER SE OBLIGATIONS AND CLAIMS USING ACCOUNTED FUNDS THEREB Y CLEARLY LEAVING A TRAIL ESTABLISHING FACT OF SETTLE MENT OF EACH CLAIM AND COUNTER CLAIM. IN THE FACE OF THE BITTERNESS IN RELATIONS BETWEEN CKM AND SCM AS REFLECTED IN OF SOME OF THE LETTERS FORM ING PART OF THE SEIZED MATERIAL, PRESUMPTION THAT CASH WOULD HAVE BEEN PAID BY CKM TO ACM ON BEHALF OF SCM WOULD BE CONTRARY TO NORMAL HUMAN CONDUCT. NORMAL HUMAN CONDUCT WOULD SUGGEST PAYMENT BY CHEQUE OR BY PROVIDING OTHER LIQUID FUNDS ONLY. THE LETTER OF 03.12.2008 HAS BEEN FORMALLY MARKED TO THE SOLICITOR BERGIS DESAI AND ALSO TO DAD AND ACM. THIS WOULD SUGGEST THAT CKM WANTED KEEP A TRAIL OF THE DISCHARGE BY HIM OF HIS OBLIGATION TO PAY 30 CRORES ON BEHALF OF SCM. THIS CONDUCT IS MORE IN TUNE WITH RECORDING OF FACT OF TRANSACTIONS IN ACCO UNTED FUNDS RATHER THAN OF UNACCOUNTED CASH. EVEN ON A PREPONDERANCE OF PROBABILITY THIS WOULD APPEAR TO BE TRUE. THE FACT THAT EMERGES ON A CONJOINT READING OF THE RELEVANT SEIZED MATERIAL IS THAT THE SUM OF RS.20 CRORES IN FACT MERELY REPRESENTS VALUE OF DISPUTED NET CREDIT CLAIMED BY CKM FROM SCM ARISING OUT OF SALE OF FSI IN MARCH, 2003 BY SOFOTEL (CKM GROUP COMPANY) TO DFPCL (SCM GROUP COMPANY) AND NOT CASH AS A PLAIN AND ISOLATED READING OF THE LETTER DATED 03.12.2008 WOULD SUGGEST. IN MY OPINIO N KEEPING IN MIND THE TOTALITY OF THE FACTS OF THE CA SE THERE IS NO WARRANT FOR SUCH PLAIN AND ISOLATED REA DING. IT IS ALSO SEEN THAT THOUGH AS PER THE FAMILY AGREE MENT OF 2003 ACM WAS TO BE PAID CASH OF 53 CRORES IT I S NOT THE CASE OF THE ASSESSING OFFICER THAT ACM HAS IN F ACT BEEN PAID RS. 53 CRORES IN UNACCOUNTED CASH. IN MY OPINION THE ADDITION OF RS. 20 CRS MADE BY TH E AO AS UNEXPLAINED PAYMENT IN CASH IS CONTRARY TO TH E MATERIAL ON RECORD. THE ADDITION IS MADE PURELY ON THE BASIS OF CONJECTURES AND SURMISES AND ON A PLAIN AN D ISOLATED READING OF A SOLITARY LETTER AND WITHOUT G IVING WEIGHTAGE TO THE OTHER LETTERS AND OTHER SEIZED MAT ERIAL ON RECORD AND THE TO THE CONDUCT OF THE GROUP IN TH E MATTER OF USE OF THE WORD CASH AS CLEARLY EMERGING FROM THE SEIZED MATERIAL. THE SAID FIGURE OF RS. 20 CRORES DOES NOT REPRESENT ANY CASH TRANSACTION AS PRESUMED BY THE ASSESSING OFFICER. SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 46 46. AS THE ISSUES INVOLVED IN THE IMPUGNED APPEAL ARE COMM ON AS DELIBERATED AND DECIDED BY US HEREINABOVE IN OUR ORDER W HILE ADJUDICATING THE DEPARTMENT APPEAL IN ITA NO. 3767/MUM/2 013 AT LENGTH AND FOLLOWING THE SAME DECIDED ANOTHER THREE APPEA LS OF THE DEPARTMENT IN ITAS NO. 3777/MUM/2013, ITA 3765/MUM/201 3 & 3766/MUM/2013. THE RELEVANT CONCLUSIVE PARAS OF OUR ORD ER READ AS UNDER: 20. WE HAVE PERUSED THE ARGUMENTS FROM EITHER SIDE AND HAVE ALSO PERUSED THE MATERIAL PLACED BEFORE US ALONG WITH THE ORDERS OF THE REVENUE AUTHORITIES. 21. THE FOLLOWING ABBREVIATIONS, ARE USED IN THE SEIZED PAPERS: S.NO. NAME ABBREVIATION 1 MR. CHIMANLAL KHIMCHAND MEHTA CKM 2 MR. DEEPAK CHIMANLAL MEHTA DCM 3 MR. SAILESH CHIMANLAL MEHTA SCM 4 MR. AJAY CHIMANLAL MEHTA ACM 5 M/S. DEEPAK FERTILIZERS & PETROCHEMICALS CORPORATION LTD. DFPCL 6 M/S. DEEPAK NITRATE LTD DNL 7 M/S. YERROWADA INVESTMENTS LTD YIL 22. THE FACT THAT PAPERS AND CDS WERE SEIZED AT THE TIME OF SEARCH ON 21.07.2007, IS EVIDENCED FROM THE PANCHNAMA (APB VOL 3, PG. 912). IT IS ALSO A FACT T HAT THE HARD COPIES OF PRINT OUT WHICH WERE UNDATED WERE FO UND IN THE LOOSE PAPERS, WHICH, WHEN EXAMINED BY RUNNIN G THE CDS WERE FOUND TO BE PERTAINING TO 23.03.2003 A ND 28.03.2003, PERIOD PRIOR TO THE PERIOD FOR 153A PROCEEDINGS. 23. ON EXAMINATION OF THE SEIZED PRINT OUT, IT IS S EEN THAT THE IMPUGNED CDS SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 47 WAS IN FACT CREATED ON 28.03.2003. THIS MEANS THAT SEIZED HARD COPIES WAS NOTHING BUT THE PRINT OUT OF THE CD PREPARED ON 28.03.2003, THEREFORE, THE ASSUMPTIO N OF THE AO THAT SINCE THE PAPERS WERE UNDATED, AND THEREFORE, THEY HAVE TO BE PRESUMED TO BE PERTAININ G TO THE FINANCIAL YEAR, IN WHICH THEY WERE FOUND, LOSSE S ITS LEGS AND THIS ASSUMPTION FALLS. HENCE ADDITION CAN BE SUSTAINED ON THIS ARGUMENTS. 24. ON THE OTHER HAND, THE SUBMISSIONS OF THE AR CA NNOT BE IGNORED THAT ALL THE ASSETS AND LIABILITIES WERE DISTRIBUTED AS PER THE FAMILY ARRANGEMENT IMMEDIATE LY THEREAFTER AND WHEREVER NECESSARY, CAPITAL GAINS HA D BEEN PAID. 25. BEFORE US THOUGH THE AR PLACED RELIANCE ON THE DECISIONS OF IN THE CASE OF P R METRANI VS CIT- 287 ITR 209 (SC) IN THE CASE OF SURENDRA M KHANDHAR VS ACIT 321 ITR 254 (BOM) IN OUR VIEW BOTH THESE DECISIONS MAY NOT BE NECESSA RY, BECAUSE, THE QUESTION OF REBUTTAL ON THE PROPOSED ADDITION HAS NOT BEEN OCCASIONED BECAUSE THE ADDITI ONS MADE BY THE AO, HAVE BEEN BASED ON NOTINGS ON THE C DS PREPARED ON 28.03.2003, WHICH WE HAVE HELD CANNOT B E SUSTAINED. 26. WE ALSO REJECT THE GOA NO. 6, WHEREIN THE DEPARTMENT HAS SOUGHT RESTORATION OF THE CASE TO TH E FILE OF THE AO, BECAUSE OF NON ALLOWANCE OF PROPER OPPORTUNITY UNDER RULE 46A. THIS HAS BEEN CATEGORIC ALLY REJECTED BY THE CIT(A), WHEREIN HE HAS HELD THAT TH E ASSESSEE HAS NOT PRODUCED/SUBMITTED ANYTHING OR ANY EVIDENCE, WHICH WAS NOT BEFORE THE AO OR WAS NOT IN THE SEIZED MATERIAL. 27. WE, THEREFORE, REJECT THE GROUNDS AS RAISED BY THE DEPARTMENT AND CONSEQUENTIALLY DISMISS THE APPEAL A S FILED BY THE DEPARTMENT. 28. IN THE RESULT, DEPARTMENTAL APPEAL, AS FILED BY THE REVENUE STANDS DISMISSED. 47. FOLLOWING THE ABOVE SAID PARAS, WE DISMISS THE GROUNDS INVOLVED IN DEPARTMENTS ITA NO. 3764/MUM/2013. ACCORDINGLY, DEPA RTMENTS APPEAL STANDS DISMISSED. ITA NO. : 3778/MUM/2013 : DEPARTMENT APPEAL : AY 2009-10 : 48. THE DEPARTMENT HAS RAISED THE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS . 20,00,00,000/- ON ACCOUNT OF UNACCOUNTED RECEIPTS D UE TO FAMILY ARRANGEMENT IGNORING THE PRESUMPTIONS WITH R EGARD TO THE ENTRIES FOUND IN SIZED MATERIAL AS PER PROVISIO NS OF SECTION 292C R.W.S. 132(4A) OF I.T. ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) ERRED IN ADMITTING THE ADDITIONAL EV IDENCE IN SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 48 VIOLATION OF RULE 46A OF THE I.T. RULES 1962 WITHOU T PROVIDING THE AO OPPORTUNITY TO COMMENT ON MERITS. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFI CER BE RESTORED. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GR OUND AND/OR ADD NEW GROUNDS WHICH MAY BE NECESSARY A COPY OF THE ORDER OF THE CIT(A), MUMBAI WAS RECEI VED IN THIS OFFICE ON 15.03.2013. THE LIMITATION DATE FOR FILIN G OF APPEAL U/S 253(2) IS 13.5.2013. HOWEVER, THE APPEAL SHOULD BE FILED IMMEDIATELY'. 49. THE CIT(A) ON CONSIDERATION OF THE SUBMISSIONS AS MADE BY THE ASSESSEE ALONG WITH THE DOCUMENTS FOUND SEIZED, HAS OBSERVED: THUS THE WORD CASH HAS BEEN USED IN THE CONTEXT OF LIQUID ASSETS NOT ONLY BY THE APPELLANT BUT ALSO BY AN EXTERNAL CA AND BY THE PANE OFFICE OF THE APPELLANT. THIS THEREFORE ESTABLISHES A SET PATTERN OF USING THE WORD CASH LOOSELY NOT ONLY WITH REFERENCE TO HARD CASH BUT ALSO OTHER LIQUID A SSETS. IT IS ALSO A FACT THAT THE LETTER DATED 03.12.2008 WAS DICTATED TO THE SECRETARY OF CKM AND COPIES THEREOF WERE ALSO MARKED TO COMPANY EXECUTIVES, EMINENT SOLICITOR AND ALSO GIVEN TO ARBITRATORS. THERE IS M ERIT IN THE CONTENTION OF THE AR THAT SUCH OPEN REFERENCE TO CASH OR UNACCOUNTED TRANSACTIONS OF SUCH MAGNITUDE CAN BE SAID TO BE CONTRARY TO NORMAL HUMAN CONDUCT. AS RIGHTLY POINTED OUT BY THE AR SCM IN HIS LETTER DATED 11/12/2008 HAS QUESTIONED THE CORRECTNESS OF THE CONTENTS OF CKM;S LETTER DATED 03/12/2008. IT IS SEEN THAT THIS LETTER IS AGAIN MARKED TO A COMPANY EXECUTIVE AND TO THE SAME SOLICITOR. THE ASSESSING OFFICER HAS NOT MADE A REFERENCE TO THIS LETTER IN THE ASSESSMENT ORDER THOUGH IT WAS PART O F THE SEIZED MATERIAL. THE OTHER MATERIAL FACT WHICH THE ASSESSING OFFICER HAS NOT GIVEN DUE IMPORTANCE IS THAT DURING THE COURSE OF THE SEARCH COVERING THE ENTIRE DEEPAK GROUP COVERING BOTH RESIDENCES OF ALL FAMILY MEMBERS AND ALL THE COMPANIES, NO UNACCOUNTED CASH WAS FOUND. GOING BY THE ASSESSING OFFICER OWN PRESUMPTION, THIS CASH TRANSACTION IS SUPPOSED TO HAVE TAKEN PLACE DURING THE PERIOD 0 1.04.2008 TO 3 1.03.2009 WHILE THE SEARCH TOOK PLACE 011 21.07.2009. DURING THIS EXTENSIVE SEARCH NEITHER WAS ANY UNACCOUNTED CASH OR ANY UNACCOUNTED INVESTMENT OR UNACCOUNTED EXPENDITURE WAS DETECTED EITHER BY THE SEARCH PARTY OR BY THE ASSESSING OFFICER DURING ASSESSMENT PROCEEDINGS BARRING USE OF THE WORD CASH IN THE SAID LETTER OF 03.12.2008. IN MY OPINION THIS FACT LENDS FURTHER CREDENCE TO T HE ARGUMENT OF THE AR THAT USE OF THE WORD CASH IN THE SAID LETTER WAS IN THE CONTEXT OF LIQUID FUNDS ONLY AND NOT HARD CASH AS PRESUMED BY THE ASSESSING OFFICER. SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 49 THE OTHER RELEVANT FACT IS THAT THE FAMILY DISPUTES PARTICULARLY BETWEEN CKM AND SCM HAVE NOT BEEN SETTLED EVEN TODAY AND THE MATTER IS PENDING BEFORE ARBITRATORS. THIS FACT IS ALSO COMING OUT FROM THE SUBMISSIONS MADE DURING ASSESSMENT PROCEEDINGS. IT IS ALSO SEEN THAT THE ASSESSING OFFICER HAS BROU GHT RS.20 CRORES TO TAX IN A.Y. 2009-10 ONLY BECAUSE THERE IS USE OF THE WORD CASH IN THE LETTER DATED 03.12.2008. IN MY OPINION THERE IS NO BASIS FOR SUCH APPROACH. THE SEIZED MATERIAL CLEARLY SHOWS THAT FAMILY DISPUTES ARE DEEP ROOTED AND GOING ON SINCE PRIOR T O THE YEAR 2000. THE FIRST FAMILY AGREEMENT IS OF MARCH, 2000. THE SECOND FAMILY AGREEMENT IS OF 01/01/2003. THE 2003 AGREEMENT SPEAKS OF THE APPELLANT BEING REQUIRED TO PAY RS.30 CRS. TO ACM ON OR BEFORE 31.03.2003. THE AGREEMENT ALSO NOTES AS A FACT THAT 'WHICH FUNDS HAVE BEEN PROVIDED BY CKM TO SCM'. THUS, ACCORDING TO THE JANUARY 2003 AGREEMENT THIS WAS THE ONLY OBLIGATION UNDERTAKEN BY THE APPELLANT VIS--VIS SCM'S LIABILITY TO PAY 53 CRORES TO ACM. ON THE DATE OF EXECUTION OF THE AGREEMENT ITSELF ON 01/01/2003 THE AGREEMENT USES THE PAST TENSE 'WHICH FUNDS HAVE BEEN PROVIDED BY CKM TO SCM' SUGGESTING THAT THE EVENT, IF AT ALL, HAS ALREADY HAPPENED AND CKM HAS ALREADY DISCHARGED HIS UNDERTAKING BY PROVIDING FUNDS TO ACM AS EARLY AS 01/01/2003. THERE IS THEREFORE NO BASIS FOR THE ASSESSING OFFICER TO COME TO A CONCLUSION THAT THE ALLEGED CASH TRANSACTION TOOK PLACE IN F.Y.2008-09 WARRANTING AN ADDITION IN A.Y.2008-09. THE TRANSACTION OF SALE OF FSI BY THE CKM GROUP COMPANY SOFTEL TO DFPCL, SCM GROUP COMPANY, IS ALSO STATED TO HAVE TAKEN PLACE IN MARCH, 2003. THIS TRANSACTION, WAS DULY APPROVED BY THE BOARD OF DIRECTORS OF DFPCL AND HAS ALSO BEEN ACCEPTED BY TH E DEPARTMENT BOTH IN THE CASE OF SOFTEL AND DFPCL. TH IS TRANSACTION WAS UNDERTAKEN TO PROVIDE LIQUIDITY TO THE FAMILY. THIS EVENT HAS ALSO OCCURRED IN MARCH 2003 WHICH COINCIDES WITH THE DEADLINE FOR DISCHARGE BY SCM OF HIS OBLIGATION TO PAY ACM RS.30 CRORES ON OR BEFORE 3 1.03.2003 FOR WHICH HIN DS WERE PROVIDED BY CKM AT THAT POINT OF TIME SINCE SC M DID NOT HAVE LIQUIDITY. THIS FACT ALSO DOES NOT SUPPORT THE AG CONCLUSION T HAT THE ALLEGED CASH TRANSACTION TOOK PLACE IN F.Y.2008 -09 WARRANTING AN ADDITION IN A.Y.2008-09. ON A COMBINED READING OF PARA 18 AND PARA 31 OF THE STATEMENT OF FACTS WITH THE APPEAL MEMO TWO THINGS EMERGE NAMELY THAT CKM HAD PROVIDED (IN THE SENSE OF ARRANGED) ASSETS WORTH RS.30 CRORES FOR AC M AND HIS GROUP ENTITIES BEFORE 31/03/2003 AND FURTHE R THAT, IN COURSE OF TIME, ACM WAS PROVIDED (IN THE S ENSE OF MADE AVAILABLE) HINDS IN LIQUID FORM TO THE EXTE NT OF RS.34.83 CRORES BY CKM BY PROVIDING CONTROL OVER CE RTAIN PRIVATE COMPANIES HAVING LIQUID FUNDS. SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 50 CORRECTNESS OF THIS STATEMENT OF FACTS HAS NOT BEEN CHALLENGED BY THE AG AT ANY POINT OF TIME AFTER FIL ING OF THE APPEAL MEMO AND THEREFORE SHOULD BE PRESUMED TO BE CORRECT. IN THIS MANNER CKM CAN BE SAID TO HAVE DISCHARGED H IS ONLY OBLIGATION TOWARDS ACM UNDERTAKEN ON BEHALF OF SCM. THE SEIZED MATERIAL DOES NOT AND IT IS ALSO NOT THE CASE OF THE AG THAT THERE WAS ANY OTHER OBLIGATION UNDER TAKEN BY CKM UNDER THE FAMILY AGREEMENT OF 2003. THERE WAS THEREFORE NO QUESTION OF CKM BEING REQUIRED TO PAY HARD CASH TO ACM ON BEHALF OF SCM I N PURSUANCE OF THE SAID AGREEMENT. THE WORD CASH HAS THEREFORE TO BE NECESSARILY INTERPRETED CONSISTENT WITH THE MANNER IN WHICH IT HAS BEEN GENERALLY USED WITHIN GROUP WHICH SEEMS TO BE THE NORMAL CONDUCT OF THE GROUP. THE FACT ALSO REMAINS THAT CKM AND SCM AND THE REST OF THE FAMILY WERE HAVING DEEP ROOTED DIFFERENCES WHICH EVEN THE 2003 AGREEMENT DID NOT FULLY RESOLVE NOTWITHSTANDING THE FACT THAT THE SCH EME OF CONTROL OVER THE TWO PUBLIC LIMITED COMPANIES WA S COMPLETELY CHANGED THEREIN AS COMPARED TO THE 2000 FAMILY AGREEMENT. IN MY OPINION IN SUCH A SITUATION AND IN THE BACKGROUND OF SUCH DEEP ROOTED FAMILY DISPUTES, NORMAL HUMAN CONDUCT WOULD BE OF SETTLING INTER SE OBLIGATIONS AND CLAIMS USING ACCOUNTED FUNDS THEREB Y CLEARLY LEAVING A TRAIL ESTABLISHING FACT OF SETTLE MENT OF EACH CLAIM AND COUNTER CLAIM. IN THE FACE OF THE BITTERNESS IN RELATIONS BETWEEN CKM AND SCM AS REFLECTED IN OF SOME OF THE LETTERS FORM ING PART OF THE SEIZED MATERIAL, PRESUMPTION THAT CASH WOULD HAVE BEEN PAID BY CKM TO ACM ON BEHALF OF SCM WOULD BE CONTRARY TO NORMAL HUMAN CONDUCT. NORMAL HUMAN CONDUCT WOULD SUGGEST PAYMENT BY CHEQUE OR BY PROVIDING OTHER LIQUID FUNDS ONLY. THE LETTER OF 03.12.2008 HAS BEEN FORMALLY MARKED T O THE SOLICITOR BERGIS DESAI AND ALSO TO DAD AND ACM. THIS WOULD SUGGEST THAT CKM WANTED KEEP A TRAIL OF THE DISCHARGE BY HIM OF HIS OBLIGATION TO PAY 30 CRORES ON BEHALF OF SCM. THIS CONDUCT IS MORE IN TU NE WITH RECORDING OF FACT OF TRANSACTIONS IN ACCOUNTED FUNDS RATHER THAN OF UNACCOUNTED CASH. EVEN ON A PREPONDERANCE OF PROBABILITY THIS WOULD APPEAR TO BE TRUE. THE FACT THAT EMERGES ON A CONJOINT READING OF THE RELEVANT SEIZED MATERIAL IS THAT THE SUM OF RS.20 CRORES IN FACT MERELY REPRESENTS VALUE OF DISPUTED NET CREDIT CLAIMED BY CKM FROM SCM ARISING OUT OF SALE OF FSI IN MARCH, 2003 BY SOFOTEL (CKM GROUP COMPANY) TO DFPCL (SCM GROUP COMPANY) AND NOT CASH AS A PLAIN AND ISOLATED READING OF THE LETTER DATED 03.12.2008 WOULD SUGGEST. IN MY OPINION KEEPI NG IN MIND THE TOTALITY OF THE FACTS OF THE CASE THERE IS NO WARRANT FOR SUCH PLAIN AND ISOLATED READING. IT IS ALSO SEEN THAT THOUGH AS PER THE FAMILY AGREEMENT OF 2003 ACM WAS TO BE PAID 'CASH' OF 53 SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 51 CRORES IT IS NOT THE CASE OF THE ASSESSING OFFICER THAT ACM HAS IN FACT BEEN PAID RS.53 CRORES IN UNACCOUNT ED CASH. IN MY OPINION THE ADDITION OF RS.20 CRS. MADE BY TH E AO AS UNEXPLAINED PAYMENT IN CASH IS CONTRARY TO TH E MATERIAL ON RECORD. THE ADDITION IS MADE PURELY ON THE BASIS OF CONJECTURES AND SURMISES AND ON A PLAIN AND ISOLATED READING OF A SOLITARY LETTER AND WITHO UT GIVING WEIGHTAGE TO THE OTHER LETTERS AND OTHER SEI ZED MATERIAL ON RECORD AND THE TO THE CONDUCT OF THE GR OUP IN THE MATTER OF USE OF THE WORD CASH AS CLEARLY EMERGING FROM THE SEIZED MATERIAL. THE SAID FIGURE OF RS.20 CRORES DOES NOT REPRESENT ANY CASH TRANSACTIO N AS PRESUMED BY THE ASSESSING OFFICER. 50. AS THE BASIC ISSUES INVOLVED IN THE IMPUGNED APPEAL ARE COMMON AS DELIBERATED AND DECIDED BY US HEREINABOVE IN O UR ORDER WHILE ADJUDICATING THE DEPARTMENT APPEAL IN ITA NO. 3767/M UM/2013 AT LENGTH AND FOLLOWING THE SAME DECIDED ANOTHER FOUR APPE ALS HEARD ON 10.11.2014 OF THE DEPARTMENT IN ITAS NO. 3777/MUM/201 3, ITA 3765/MUM/2013, 3766/MUM/2013 & 3764/MUM/2013. THE RELEVANT CONCLUSIVE PARAS OF OUR ORDER READ AS UNDER: 20. WE HAVE PERUSED THE ARGUMENTS FROM EITHER SIDE AND HAVE ALSO PERUSED THE MATERIAL PLACED BEFORE US ALONG WITH THE ORDERS OF THE REVENUE AUTHORITIES. 21. THE FOLLOWING ABBREVIATIONS, ARE USED IN THE SEIZED PAPERS: S.NO. NAME ABBREVIATION 1 MR. CHIMANLAL KHIMCHAND MEHTA CKM 2 MR. DEEPAK CHIMANLAL MEHTA DCM 3 MR. SAILESH CHIMANLAL MEHTA SCM 4 MR. AJAY CHIMANLAL MEHTA ACM 5 M/S. DEEPAK FERTILIZERS & PETROCHEMICALS CORPORATION LTD. DFPCL 6 M/S. DEEPAK NITRATE LTD DNL 7 M/S. YERROWADA INVESTMENTS LTD YIL 22. THE FACT THAT PAPERS AND CDS WERE SEIZED AT THE TIME OF SEARCH ON 21.07.2007, IS EVIDENCED FROM THE PANCHNAMA (APB VOL 3, PG. 912). IT IS ALSO A FACT T HAT THE HARD COPIES OF PRINT OUT WHICH WERE UNDATED WERE FO UND IN THE LOOSE PAPERS, WHICH, WHEN EXAMINED BY RUNNIN G THE CDS WERE FOUND TO BE PERTAINING TO 23.03.2003 A ND 28.03.2003, PERIOD PRIOR TO THE PERIOD FOR 153A PROCEEDINGS. 23. ON EXAMINATION OF THE SEIZED PRINT OUT, IT IS S EEN THAT THE IMPUGNED CDS SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 52 WAS IN FACT CREATED ON 28.03.2003. THIS MEANS THAT SEIZED HARD COPIES WAS NOTHING BUT THE PRINT OUT OF THE CD PREPARED ON 28.03.2003, THEREFORE, THE ASSUMPTIO N OF THE AO THAT SINCE THE PAPERS WERE UNDATED, AND THEREFORE, THEY HAVE TO BE PRESUMED TO BE PERTAININ G TO THE FINANCIAL YEAR, IN WHICH THEY WERE FOUND, LOSSE S ITS LEGS AND THIS ASSUMPTION FALLS. HENCE ADDITION CAN BE SUSTAINED ON THIS ARGUMENTS. 24. ON THE OTHER HAND, THE SUBMISSIONS OF THE AR CA NNOT BE IGNORED THAT ALL THE ASSETS AND LIABILITIES WERE DISTRIBUTED AS PER THE FAMILY ARRANGEMENT IMMEDIATE LY THEREAFTER AND WHEREVER NECESSARY, CAPITAL GAINS HA D BEEN PAID. 25. BEFORE US THOUGH THE AR PLACED RELIANCE ON THE DECISIONS OF IN THE CASE OF P R METRANI VS CIT- 287 ITR 209 (SC) IN THE CASE OF SURENDRA M KHANDHAR VS ACIT 321 ITR 254 (BOM) IN OUR VIEW BOTH THESE DECISIONS MAY NOT BE NECESSA RY, BECAUSE, THE QUESTION OF REBUTTAL ON THE PROPOSED ADDITION HAS NOT BEEN OCCASIONED BECAUSE THE ADDITI ONS MADE BY THE AO, HAVE BEEN BASED ON NOTINGS ON THE C DS PREPARED ON 28.03.2003, WHICH WE HAVE HELD CANNOT B E SUSTAINED. 26. WE ALSO REJECT THE GOA NO. 6, WHEREIN THE DEPARTMENT HAS SOUGHT RESTORATION OF THE CASE TO TH E FILE OF THE AO, BECAUSE OF NON ALLOWANCE OF PROPER OPPORTUNITY UNDER RULE 46A. THIS HAS BEEN CATEGORIC ALLY REJECTED BY THE CIT(A), WHEREIN HE HAS HELD THAT TH E ASSESSEE HAS NOT PRODUCED/SUBMITTED ANYTHING OR ANY EVIDENCE, WHICH WAS NOT BEFORE THE AO OR WAS NOT IN THE SEIZED MATERIAL. 27. WE, THEREFORE, REJECT THE GROUNDS AS RAISED BY THE DEPARTMENT AND CONSEQUENTIALLY DISMISS THE APPEAL A S FILED BY THE DEPARTMENT. 28. IN THE RESULT, DEPARTMENTAL APPEAL, AS FILED BY THE REVENUE STANDS DISMISSED. 51. FOLLOWING THE ABOVE SAID PARAS, WE DISMISS THE GROUNDS INVOLVED IN DEPARTMENTS APPEAL IN ITA NO. 3778/MUM/2013. ACCORDIN GLY, DEPARTMENTS APPEAL STANDS DISMISSED. SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 53 ITA NO. : 3779/MUM/2013 : DEPARTMENT APPEAL : AY 2009-10 : 52. THE DEPARTMENT HAS RAISED THE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS . 20,00,00,000/- ON ACCOUNT OF UNACCOUNTED RECEIPTS D UE TO FAMILY ARRANGEMENT IGNORING THE PRESUMPTIONS WITH R EGARD TO THE ENTRIES FOUND IN SIZED MATERIAL AS PER PROVISIO NS OF SECTION 292C R.W.S. 132(4A) OF I.T. ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) ERRED IN ADMITTING THE ADDITIONAL EV IDENCE IN VIOLATION OF RULE 46A OF THE I.T. RULES 1962 WITHOU T PROVIDING THE AO OPPORTUNITY TO COMMENT ON MERITS. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFI CER BE RESTORED. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GR OUND AND/OR ADD NEW GROUNDS WHICH MAY BE NECESSARY A COPY OF THE ORDER OF THE CIT(A), MUMBAI WAS RECEI VED IN THIS OFFICE ON 15.03.2013. THE LIMITATION DATE FOR FILIN G OF APPEAL U/S 253(2) IS 13.5.2013. HOWEVER, THE APPEAL SHOULD BE FILED IMMEDIATELY. 53. AS THE BASIC ISSUES INVOLVED IN THE IMPUGNED APPEAL ARE COMMON AS DELIBERATED AND DECIDED BY US HEREINABOVE IN O UR ORDER WHILE ADJUDICATING THE DEPARTMENT APPEAL IN ITA NO. 3767/M UM/2013 AT LENGTH AND FOLLOWING THE SAME DECIDED ANOTHER FIVE APPE ALS HEARD ON 10.11.2014 OF THE DEPARTMENT IN ITAS NO. 3777/MUM/2013, I TA 3765/MUM/2013, 3766/MUM/2013, 3764/MUM/2013 & 3778/MUM/2013. THE RELEVANT CONCLUSIVE PARAS OF OUR ORD ER READ AS UNDER: 20. WE HAVE PERUSED THE ARGUMENTS FROM EITHER SIDE AND HAVE ALSO PERUSED THE MATERIAL PLACED BEFORE US ALONG WITH THE ORDERS OF THE REVENUE AUTHORITIES. 21. THE FOLLOWING ABBREVIATIONS, ARE USED IN THE SEIZED PAPERS: S.NO. NAME ABBREVIATION 1 MR. CHIM ANLAL KHIMCHAND MEHTA CKM 2 MR. DEEPAK CHIMANLAL MEHTA DCM 3 MR. SAILESH CHIMANLAL MEHTA SCM 4 MR. AJAY CHIMANLAL MEHTA ACM 5 M/S. DEEPAK FERTILIZERS & PETROCHEMICALS CORPORATION LTD. DFPCL SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 54 6 M/S. DEEPAK NITRATE LTD DNL 7 M/S. YERROWADA INVESTMENTS LTD YIL 22. THE FACT THAT PAPERS AND CDS WERE SEIZED AT THE TIME OF SEARCH ON 21.07.2007, IS EVIDENCED FROM THE PANCHNAMA (APB VOL 3, PG. 912). IT IS ALSO A FACT T HAT THE HARD COPIES OF PRINT OUT WHICH WERE UNDATED WERE FO UND IN THE LOOSE PAPERS, WHICH, WHEN EXAMINED BY RUNNIN G THE CDS WERE FOUND TO BE PERTAINING TO 23.03.2003 A ND 28.03.2003, PERIOD PRIOR TO THE PERIOD FOR 153A PROCEEDINGS. 23. ON EXAMINATION OF THE SEIZED PRINT OUT, IT IS S EEN THAT THE IMPUGNED CDS WAS IN FACT CREATED ON 28.03.2003. THIS MEANS THAT SEIZED HARD COPIES WAS NOTHING BUT THE PRINT OUT OF THE CD PREPARED ON 28.03.2003, THEREFORE, THE ASSUMPTIO N OF THE AO THAT SINCE THE PAPERS WERE UNDATED, AND THEREFORE, THEY HAVE TO BE PRESUMED TO BE PERTAININ G TO THE FINANCIAL YEAR, IN WHICH THEY WERE FOUND, LOSSE S ITS LEGS AND THIS ASSUMPTION FALLS. HENCE ADDITION CAN BE SUSTAINED ON THIS ARGUMENTS. 24. ON THE OTHER HAND, THE SUBMISSIONS OF THE AR CA NNOT BE IGNORED THAT ALL THE ASSETS AND LIABILITIES WERE DISTRIBUTED AS PER THE FAMILY ARRANGEMENT IMMEDIATE LY THEREAFTER AND WHEREVER NECESSARY, CAPITAL GAINS HA D BEEN PAID. 25. BEFORE US THOUGH THE AR PLACED RELIANCE ON THE DECISIONS OF IN THE CASE OF P R METRANI VS CIT- 287 ITR 209 (SC) IN THE CASE OF SURENDRA M KHANDHAR VS ACIT 321 ITR 254 (BOM) IN OUR VIEW BOTH THESE DECISIONS MAY NOT BE NECESSA RY, BECAUSE, THE QUESTION OF REBUTTAL ON THE PROPOSED ADDITION HAS NOT BEEN OCCASIONED BECAUSE THE ADDITI ONS MADE BY THE AO, HAVE BEEN BASED ON NOTINGS ON THE C DS PREPARED ON 28.03.2003, WHICH WE HAVE HELD CANNOT B E SUSTAINED. 26. WE ALSO REJECT THE GOA NO. 6, WHEREIN THE DEPARTMENT HAS SOUGHT RESTORATION OF THE CASE TO TH E FILE OF THE AO, BECAUSE OF NON ALLOWANCE OF PROPER OPPORTUNITY UNDER RULE 46A. THIS HAS BEEN CATEGORIC ALLY REJECTED BY THE CIT(A), WHEREIN HE HAS HELD THAT TH E ASSESSEE HAS NOT PRODUCED/SUBMITTED ANYTHING OR ANY SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 55 EVIDENCE, WHICH WAS NOT BEFORE THE AO OR WAS NOT IN THE SEIZED MATERIAL. 27. WE, THEREFORE, REJECT THE GROUNDS AS RAISED BY THE DEPARTMENT AND CONSEQUENTIALLY DISMISS THE APPEAL A S FILED BY THE DEPARTMENT. 28. IN THE RESULT, DEPARTMENTAL APPEAL, AS FILED BY THE REVENUE STANDS DISMISSED. 54. FOLLOWING THE ABOVE SAID PARAS, WE DISMISS THE GROUNDS INVOLVED IN DEPARTMENTS APPEAL IN ITA NO. 3778/MUM/2013. ACCORDIN GLY, DEPARTMENTS APPEAL STANDS DISMISSED. ISSUE OF LIMITATION IS NOT ADJUDICATED SINCE ON MERITS, ADDITION HAS BEEN DELETED WHILE DECIDING GROUND NOS. 5 & 6. THEREFORE, ADDITION OF RS. 20 CRORES ON THIS COUNT IS HEREBY DELETED. HENCE, THESE GROUNDS OF APPEAL ARE HEREBY ALLOWED. 55. NOW, WE SHALL DEAL WITH THE CROSS OBJECTIONS FILED BY THE ASSESSEE GROUP, ONE-BY-ONE FOR ASSESSMENT YEARS 2010- 11 & 2009-10 RESPECTIVELY. CO NO. 148/MUM/2014 : BY ASSESSEE : ARISING OUT OF ITA 3767/MUM/2013 : 56. FOLLOWING GROUNDS HAVE BEEN RAISED IN THE CROSS OBJECTION: 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE RESPONDENT OBJECTS TO THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) -36, MUMBAI (THE LEARNED CIT(A )) NOT ACCEPTING THE CONTENTION OF THE RESPONDENT THAT THE ASSESSMENT ORDER WAS BAD IN LAW AND ON FACTS. 1.1)ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE RESPONDENT OBJECTS TO THE LEARNED CIT(A) R EJECTING THE CONTENTION OF THE RESPONDENT BEFORE HIM THAT EI THER NO APPROVAL OF THE ADDITIONAL COMMISSIONER U/S 153D WA S AT ALL OBTAINED OR THAT THE SAID APPROVAL WAS NON EST AS IT SUFFERED FROM SEVERE INADEQUACIES AND FOR THAT REAS ON ALSO THE IMPUGNED ASSESSMENT ORDER WAS BAD IN LAW. ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND I N LAW, THE RESPONDENT OBJECTS TO THE LEARNED CIT(A) HOLDING TH AT THE ASSESSMENT ORDER WAS PASSED BY THE LEARNED AO AFTER GIVING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE RESP ONDENT AND THAT THE ORDER IS NOT CONTRARY TO THE PRINCIPLE S OF NATURAL JUSTICE. 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE RESPONDENT OBJECTS TO THE LEARNED CIT(A) HOLDIN G THAT CHALLENGE TO VALIDITY OF THE SEARCH U/S 132 COULD N OT BE RAISED BEFORE HIM AND THEREFORE REJECTING THE CONTE NTION OF THE RESPONDENT THAT THE ASSESSMENT ORDER, PASSED BY THE LEARNED AO IS BAD IN LAW IN AS MUCH AS THE SEARCH U /S 132 OF THE INCOME TAX ACT, 1961 WAS ILLEGAL AND VOID. SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 56 3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE RESPONDENT OBJECTS TO THE LEARNED CIT(A) NOT AD JUDICATING GROUNDS NOS. 7 TO 12 RAISED IN THE APPEAL MEMO FILE D BEFORE HIM FOR THE REASON THAT THESE GROUNDS DO NOT SURVIV E AS HE HAD ANNULLED THE ASSESSMENT: 4) THE APPELLANT CRAVES LEAVE TO ADD TO, ALTER, DEL ETE OR MODIFY ANY OF THE ABOVE OBJECTIONS. 57. AFTER DUE DELIBERATIONS WE HAVE CONCLUSIVELY DISMISSED T HE DEPARTMENT APPEAL IN ITA NO. 3767/MUM/2013 ON QUANTUM AND ON FACTS. THE INSTANT CO FILED BY THE ASSESSEE IS PRIMARILY ON LEGAL ISSUES INVOLVED, WHICH ACCORDING TO US, WOULD NOW BECOME INFRUCTUO US. WE, THEREFORE, REJECT THE GROUNDS RAISED IN THE CO. 58. AS A RESULT, THE CO, AS FILED BY THE ASSESSEE IS DISMISSED. CO NO. 150/MUM/2014 : BY ASSESSEE : ARISING OUT OF ITA 3777/MUM/2013 : 59. FOLLOWING GROUNDS HAVE BEEN RAISED IN THE CROSS OBJECTION: 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE RESPONDENT OBJECTS TO THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 36, MUMBAI (THE LEARNED CIT( A)) NOT ACCEPTING THE CONTENTION OF THE RESPONDENT THAT THE ASSESSMENT ORDER WAS BAD IN LAW AND ON FACTS. 1.1)ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE RESPONDENT OBJECTS TO THE LEARNED CIT(A) R EJECTING THE CONTENTION OF THE RESPONDENT BEFORE HIM THAT EI THER NO APPROVAL OF THE ADDITIONAL COMMISSIONER U/S 153D WA S AT ALL OBTAINED OR THAT THE SAID APPROVAL WAS NON EST AS IT SUFFERED FROM SEVERE INADEQUACIES AND FOR THAT REAS ON ALSO THE IMPUGNED ASSESSMENT ORDER WAS BAD IN LAW. 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE RESPONDENT OBJECTS TO THE LEARNED CIT(A) HOLDIN G THAT CHALLENGE TO VALIDITY OF THE SEARCH U/S 132 COULD N OT BE RAISED BEFORE HIM AND THEREFORE REJECTING THE CONTE NTION OF THE RESPONDENT THAT THE ASSESSMENT ORDER, PASSED BY THE LEARNED AO IS BAD IN LAW IN AS MUCH AS THE SEARCH U /S 132 OF THE INCOME TAX ACT, 1961 WAS ILLEGAL AND VOID. 3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE RESPONDENT OBJECTS TO THE LEARNED CIT(A) NOT AD JUDICATING GROUNDS NOS. 7 TO 11 RAISED IN THE APPEAL MEMO FILE D BEFORE HIM FOR THE REASON THAT THESE GROUNDS DO NOT SURVIV E AS HE HAD ANNULLED THE ASSESSMENT: 4) THE APPELLANT CRAVES LEAVE TO ADD TO, ALTER, DEL ETE OR MODIFY ANY OF THE ABOVE OBJECTIONS. 60. AFTER DUE DELIBERATIONS WE HAVE CONCLUSIVELY DISMISSED T HE DEPARTMENT APPEAL IN ITA NO. 3767/MUM/2013. ON QUANTUM AND ON SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 57 FACTS. THE INSTANT CO FILED BY THE ASSESSEE IS PRIMARILY ON LEGAL ISSUES INVOLVED, WHICH ACCORDING TO US, WOULD NOW BECOME INFRUCTUOU S. WE, THEREFORE, REJECT THE GROUNDS RAISED IN THE CO. 61. AS A RESULT, THE CO, AS FILED BY THE ASSESSEE IS DISMISSED. CO NO. 149/MUM/2014 : BY ASSESSEE : ARISING OUT OF ITA 3765/MUM/2013 : 62. FOLLOWING GROUNDS HAVE BEEN RAISED IN THE CROSS OBJECTION: 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE RESPONDENT OBJECTS TO THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) -36, MUMBAI (THE LEARNED CIT(A )) NOT ACCEPTING THE CONTENTION OF THE RESPONDENT THAT THE ASSESSMENT ORDER WAS BAD IN LAW AND ON FACTS. 1.1)ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE RESPONDENT OBJECTS TO THE LEARNED CIT(A) R EJECTING THE CONTENTION OF THE RESPONDENT BEFORE HIM THAT EI THER NO APPROVAL OF THE ADDITIONAL COMMISSIONER U/S 153D WA S AT ALL OBTAINED OR THAT THE SAID APPROVAL WAS NON EST AS IT SUFFERED FROM SEVERE INADEQUACIES AND FOR THAT REAS ON ALSO THE IMPUGNED ASSESSMENT ORDER WAS BAD IN LAW. ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND I N LAW, THE RESPONDENT OBJECTS TO THE LEARNED CIT(A) HOLDING TH AT THE ASSESSMENT ORDER WAS PASSED BY THE LEARNED AO AFTER GIVING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE RESP ONDENT AND THAT THE ORDER IS NOT CONTRARY TO THE PRINCIPLE S OF NATURAL JUSTICE. 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE RESPONDENT OBJECTS TO THE LEARNED CIT(A) HOLDIN G THAT CHALLENGE TO VALIDITY OF THE SEARCH U/S 132 COULD N OT BE RAISED BEFORE HIM AND THEREFORE REJECTING THE CONTE NTION OF THE RESPONDENT THAT THE ASSESSMENT ORDER, PASSED BY THE LEARNED AO IS BAD IN LAW IN AS MUCH AS THE SEARCH U /S 132 OF THE INCOME TAX ACT, 1961 WAS ILLEGAL AND VOID. 3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE RESPONDENT OBJECTS TO THE LEARNED CIT(A) NOT AD JUDICATING GROUNDS NOS. 7 TO 12 RAISED IN THE APPEAL MEMO FILE D BEFORE HIM FOR THE REASON THAT THESE GROUNDS DO NOT SURVIV E AS HE HAD ANNULLED THE ASSESSMENT: 4) THE APPELLANT CRAVES LEAVE TO ADD TO, ALTER, DEL ETE OR MODIFY ANY OF THE ABOVE OBJECTIONS. 63. AFTER DUE DELIBERATIONS WE HAVE CONCLUSIVELY DISMISSED T HE DEPARTMENT APPEAL IN ITA NO. 3767/MUM/2013. ON QUANTUM AND ON FACTS. THE INSTANT CO FILED BY THE ASSESSEE IS PRIMARILY ON LEGAL ISSUES INVOLVED, WHICH ACCORDING TO US, WOULD NOW BECOME INFRUCTUOU S. WE, THEREFORE, REJECT THE GROUNDS RAISED IN THE CO. SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 58 64. AS A RESULT, THE CO, AS FILED BY THE ASSESSEE IS DISMISSED. CO NO. 159/MUM/2014 : BY ASSESSEE : ARISING OUT OF ITA 3766/MUM/2013 : 66. FOLLOWING GROUNDS HAVE BEEN RAISED IN THE CROSS OBJECTION: 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE RESPONDENT OBJECTS TO THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) -36, MUMBAI (THE LEARNED CIT(A )) NOT ACCEPTING THE CONTENTION OF THE RESPONDENT THAT THE ASSESSMENT ORDER WAS BAD IN LAW AND ON FACTS. 1.1)ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE RESPONDENT OBJECTS TO THE LEARNED CIT(A) R EJECTING THE CONTENTION OF THE RESPONDENT BEFORE HIM THAT EI THER NO APPROVAL OF THE ADDITIONAL COMMISSIONER U/S 135D WA S AT ALL OBTAINED OR THAT THE SAID APPROVAL WAS NON EST AS IT SUFFERED FROM SEVERE INADEQUACIES AND FOR THAT REAS ON ALSO THE IMPUGNED ASSESSMENT ORDER WAS BAD IN LAW. ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND I N LAW, THE RESPONDENT OBJECTS TO THE LEARNED CIT(A) HOLDING TH AT THE ASSESSMENT ORDER WAS PASSED BY THE LEARNED AO AFTER GIVING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE RESP ONDENT AND THAT THE ORDER IS NOT CONTRARY TO THE PRINCIPLE S OF NATURAL JUSTICE. 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE RESPONDENT OBJECTS TO THE LEARNED CIT(A) HOLDIN G THAT CHALLENGE TO VALIDITY OF THE SEARCH U/S 132 COULD N OT BE RAISED BEFORE HIM AND THEREFORE REJECTING THE CONTE NTION OF THE RESPONDENT THAT THE ASSESSMENT ORDER, PASSED BY THE LEARNED AO IS BAD IN LAW IN AS MUCH AS THE SEARCH U /S 132 OF THE INCOME TAX ACT, 1961 WAS ILLEGAL AND VOID. 3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE RESPONDENT OBJECTS TO THE LEARNED CIT(A) NOT AD JUDICATING GROUNDS NOS. 7 TO 12 RAISED IN THE APPEAL MEMO FILE D BEFORE HIM FOR THE REASON THAT THESE GROUNDS DO NOT SURVIV E AS HE HAD ANNULLED THE ASSESSMENT: 4) THE APPELLANT CRAVES LEAVE TO ADD TO, ALTER, DEL ETE OR MODIFY ANY OF THE ABOVE OBJECTIONS. 67. AFTER DUE DELIBERATIONS WE HAVE CONCLUSIVELY DISMISSED T HE DEPARTMENT APPEAL IN ITA NO. 3767/MUM/2013. ON QUANTUM AND ON FACTS. THE INSTANT CO FILED BY THE ASSESSEE IS PRIMARILY ON LEGAL ISSUES INVOLVED, WHICH ACCORDING TO US, WOULD NOW BECOME INFRUCTUOU S. WE, THEREFORE, REJECT THE GROUNDS RAISED IN THE CO. 68. AS A RESULT, THE CO, AS FILED BY THE ASSESSEE IS DISMISSED. SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 59 CO NO. 146/MUM/2014 : BY ASSESSEE : ARISING OUT OF ITA 3764/MUM/2013 : 69. FOLLOWING GROUNDS HAVE BEEN RAISED IN THE CROSS OBJECTION: 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE RESPONDENT OBJECTS TO THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) -36, MUMBAI (THE LEARNED CIT(A )) NOT ACCEPTING THE CONTENTION OF THE RESPONDENT THAT THE ASSESSMENT ORDER WAS BAD IN LAW AND ON FACTS. 1.1)ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE RESPONDENT OBJECTS TO THE LEARNED CIT(A) R EJECTING THE CONTENTION OF THE RESPONDENT BEFORE HIM THAT EI THER NO APPROVAL OF THE ADDITIONAL COMMISSIONER U/S 153D WA S AT ALL OBTAINED OR THAT THE SAID APPROVAL WAS NON EST AS IT SUFFERED FROM SEVERE INADEQUACIES AND FOR THAT REAS ON ALSO THE IMPUGNED ASSESSMENT ORDER WAS BAD IN LAW. ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND I N LAW, THE RESPONDENT OBJECTS TO THE LEARNED CIT(A) HOLDING TH AT THE ASSESSMENT ORDER WAS PASSED BY THE LEARNED AO AFTER GIVING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE RESP ONDENT AND THAT THE ORDER IS NOT CONTRARY TO THE PRINCIPLE S OF NATURAL JUSTICE. 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE RESPONDENT OBJECTS TO THE LEARNED CIT(A) HOLDIN G THAT CHALLENGE TO VALIDITY OF THE SEARCH U/S 132 COULD N OT BE RAISED BEFORE HIM AND THEREFORE REJECTING THE CONTE NTION OF THE RESPONDENT THAT THE ASSESSMENT ORDER, PASSED BY THE LEARNED AO IS BAD IN LAW IN AS MUCH AS THE SEARCH U /S 132 OF THE INCOME TAX ACT, 1961 WAS ILLEGAL AND VOID. 3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE RESPONDENT OBJECTS TO THE LEARNED CIT(A) NOT AD JUDICATING GROUNDS NOS. 7 TO 12 RAISED IN THE APPEAL MEMO FILE D BEFORE HIM FOR THE REASON THAT THESE GROUNDS DO NOT SURVIV E AS HE HAD ANNULLED THE ASSESSMENT: 4) THE APPELLANT CRAVES LEAVE TO ADD TO, ALTER, DEL ETE OR MODIFY ANY OF THE ABOVE OBJECTIONS. 70. AFTER DUE DELIBERATIONS WE HAVE CONCLUSIVELY DISMISSED T HE DEPARTMENT APPEAL IN ITA NO. 3767/MUM/2013. ON QUANTUM AND ON FACTS. THE INSTANT CO FILED BY THE ASSESSEE IS PRIMARILY ON LEGAL ISSUES INVOLVED, WHICH ACCORDING TO US, WOULD NOW BECOME INFRUCTUOU S. WE, THEREFORE, REJECT THE GROUNDS RAISED IN THE CO. 71. AS A RESULT, THE CO, AS FILED BY THE ASSESSEE IS DISMISSED. CO NO. 147/MUM/2014 : BY ASSESSEE : ARISING OUT OF ITA 3778/MUM/2013 : AY 2009-10 : SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 60 72. FOLLOWING GROUNDS HAVE BEEN RAISED IN THE CROSS OBJECTION: 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE RESPONDENT OBJECTS TO THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) -36, MUMBAI (THE LEARNED CIT(A )) NOT ACCEPTING THE CONTENTION OF THE RESPONDENT THAT THE ASSESSMENT ORDER WAS BAD IN LAW AND ON FACTS. 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE RESPONDENT OBJECTS TO THE LEARNED CIT(A) HOLDIN G THAT THE ASSESSMENT ORDER WAS PASSED BY THE LEARNED AO AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE RESPO NDENT AND THAT THE ORDER IS NOT CONTRARY TO THE PRINCIPLES OF NATURAL JUSTICE. 3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE RESPONDENT OBJECTS TO THE LEARNED CIT(A) HOLDIN G THAT CHALLENGE TO VALIDITY OF THE SEARCH U/S 132 COULD N OT BE RAISED BEFORE HIM AND THEREFORE REJECTING THE CONTE NTION OF THE RESPONDENT THAT THE ASSESSMENT ORDER, PASSED BY THE LEARNED AO IS BAD IN LAW IN AS MUCH AS THE SEARCH U /S 132 OF THE INCOME TAX ACT,1961 WAS ILLEGAL AND VOID. 4) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE RESPONDENT OBJECTS TO THE LEARNED CIT(A) NOT AN NULLING THE ASSESSMENT AS THE ALLEGED UNACCOUNTED CASH RELATE S TO A FAMILY ARRANGEMENT MADE BEFORE 31/03/2003, WHICH FA LLS BEYOND THE SIX YEARS PERIOD OF LIMITATION LAID DOWN BY LAW. 5) THE APPELLANT CRAVES LEAVE TO ADD TO, ALTER, DEL ETE OR MODIFY ANY OF THE ABOVE OBJECTIONS. 73. AFTER DUE DELIBERATIONS WE HAVE CONCLUSIVELY DISMISSED T HE DEPARTMENT APPEAL IN ITA NO. 3767/MUM/2013. ON QUANTUM AND ON FACTS. THE INSTANT CO FILED BY THE ASSESSEE IS PRIMARILY ON LEGAL ISSUES INVOLVED, WHICH ACCORDING TO US, WOULD NOW BECOME INFRUCTUOU S. WE, THEREFORE, REJECT THE GROUNDS RAISED IN THE CO. 74. AS A RESULT, THE CO, AS FILED BY THE ASSESSEE IS DISMISSED. CO NO. 145/MUM/2014 : BY ASSESSEE : ARISING OUT OF ITA 3779/MUM/2013 : AY 2009-10 : 75. FOLLOWING GROUNDS HAVE BEEN RAISED IN THE CROSS OBJECTION: 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE RESPONDENT OBJECTS TO THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) -36, MUMBAI (THE LEARNED CIT(A )) NOT ACCEPTING THE CONTENTION OF THE RESPONDENT THAT THE ASSESSMENT ORDER WAS BAD IN LAW AND ON FACTS. 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE RESPONDENT OBJECTS TO THE LEARNED CIT(A) HOLDIN G THAT THE ASSESSMENT ORDER WAS PASSED BY THE LEARNED AO AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE RESPO NDENT AND THAT THE ORDER IS NOT CONTRARY TO THE PRINCIPLES OF NATURAL JUSTICE. SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 61 3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE RESPONDENT OBJECTS TO THE LEARNED CIT(A) HOLDIN G THAT CHALLENGE TO VALIDITY OF THE SEARCH U/S 132 COULD N OT BE RAISED BEFORE HIM AND THEREFORE REJECTING THE CONTE NTION OF THE RESPONDENT THAT THE ASSESSMENT ORDER, PASSED BY THE LEARNED AO IS BAD IN LAW IN AS MUCH AS THE SEARCH U /S 132 OF THE INCOME TAX ACT,1961 WAS ILLEGAL AND VOID. 4) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE RESPONDENT OBJECTS TO THE LEARNED CIT(A) NOT AN NULLING THE ASSESSMENT AS THE ALLEGED UNACCOUNTED CASH RELATE S TO A FAMILY ARRANGEMENT MADE BEFORE 31/03/2003, WHICH FA LLS BEYOND THE SIX YEARS PERIOD OF LIMITATION LAID DOWN BY LAW. 5) THE APPELLANT CRAVES LEAVE TO ADD TO, ALTER, DEL ETE OR MODIFY ANY OF THE ABOVE OBJECTIONS. 76. AFTER DUE DELIBERATIONS WE HAVE CONCLUSIVELY DISMISSED T HE DEPARTMENT APPEAL IN ITA NO. 3767/MUM/2013 ON QUANTUM AND ON FACTS. IN THE CORRESPONDING CO NO. 148/MUM/2014 FILED BY THE ASSESSEE IS PRIMARILY ON LEGAL ISSUES INVOLVED, WHICH ACCORDIN G TO US, WOULD NOW BECOME INFRUCTUOUS. WE, THEREFORE, REJECT THE GR OUNDS RAISED IN THE CO. 77. THUS, THE CO, AS FILED BY THE ASSESSEE IS DISMISSED. 72. ALL THE APPEALS CAPTIONED AT THE HEAD OF THE ORDER, AN D CONNECTED TO THE LEAD CASE AS FILED BY THE DEPARTMENT A RE DISMISSED. CORRESPONDING COS AS FILED BY THE ASSESSEES ARE HELD TO BE INFRUCTU OUS AND ARE DISMISSED. TO SUM-UP: DEPARTMENT APPEAL IN, ITA NO. 3767/MUM/2013 STANDS DISMISSED ITA NO. 3777/MUM/2013 STANDS DISMISSED ITA NO. 3765/MUM/2013 STANDS DISMISSED ITA NO. 3766/MUM/2013 STANDS DISMISSED ITA NO. 3764/MUM/2013 STANDS DISMISSED ITA NO. 3778/MUM/2013 STANDS DISMISSED ITA NO. 3779/MUM/2013 STANDS DISMISSED. ASSESSEES CO IN, CO NO. 148/MUM/2014 STANDS DISMISSED CO NO. 150/MUM/2014 STANDS DISMISSED SHRI CHIMANLAL K MEHTA ITA NO. 3767/MUM/2013 CO 148/MUM/2014 & SIX GROUP COMPRISING (06 ITAS & 06 COS)=TOTAL-14 62 CO NO. 149/MUM/2014 STANDS DISMISSED CO NO. 159/MUM/2014 STANDS DISMISSED CO NO. 146/MUM/2014 STANDS DISMISSED CO NO. 147/MUM/2014 STANDS DISMISSED. CO NO. 145/MUM/2014 STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH DECEMBER, 2014. SD/- SD/- ( . . . . . . . . ) ( ) $ $ $ $ (R C SHARMA) (VIVEK VARMA) ACCOUNTANT MEMBER J UDICIAL MEMBER MUMBAI, DATE : 26 TH DECEMBER, 2014 &/ COPY TO:- 1) / THE APPELLANT/APPLICANT-CROSS OBJECTOR. 2) ! / THE RESPONDENT. 3) THE CIT(A)-36, MUMBAI. 4) THE CIT(C) IV/CONCERNED ______, MUMBAI 5) /0
G, 1* , '2$ / THE DR G BENCH ITAT, MUMBAI. 6) 03 4$ COPY TO GUARD FILE. ,#' / BY ORDER / / TRUE COPY / / 5 / 6 7 1* , '2$ DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI *9:6# .#. * CHAVAN, SR.PS