M/S Chandra Awas Pvt. Ltd., Jsr. V. ACIT, C.C.-1, Jsr.

CO 7/RAN/2020

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 4416 (ITAT-RANCHI)
• Duration Of Justice: 2 month(s) 18 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 08-05-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2017-2018
• Appeal Filed On: 20-02-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Search and seizure; Loose papers; Document seized; Principle of natural justice; Documents seized
• Section: 143(3); 153A; 250; 13

Judgement Text

1 IT(SS)A Nos. 16 & 17/Ran/2020 & C.O. Nos. 06 & 07/Ran/2020 Chandra Awas Pvt. Ltd. AYs. 2012-13 & 2017-18 IN THE INCOME TAX APPELLATE TRIBUNAL RANCHI BENCH, (VIRTUAL HEARING AT KOLKATA) [Before Shri Rajpal Yadav, Vice President & Shri Girish Agrawal, Accountant Member] I.T(SS).A. Nos. 16 & 17/Ran/2020 Assessment Years: 2012-13 & 2017-18 Assistant Commissioner of Income-tax, Central Circle-1, Office Road, Bistupur, Jamshedpur Vs. M/s. Chandra Awas Pvt. Ltd. (PAN: AACCC8427C) Appellant Respondent & C.O. Nos.06 & 07/Ran/2020 In I.T(SS).A. Nos. 16 & 17/Ran/2020 Assessment Years: 2012-13 & 2017-18 M/s. Chandra Awas Pvt. Ltd. (PAN: AACCC8427C) Vs. Assistant Commissioner of Income-tax, Central Circle-1, Office Road, Bistupur, Jamshedpur Appellant Respondent Date of Hearing 24.02.2022 Date of Pronouncement 09.05.2022 For the Revenue Shri Sanjay Mukherjee, CIT, DR For the Assessee Shri Devesh Poddar, Advocate ORDER Per Girish Agrawal, Accountant Member: Both these appeals and the Cross Objections preferred by the revenue and assessee against the common orders of Ld. CIT(A), Patna-3 for AYs 2012-11 and 2017-18 in Appeal No. ITBL/APL/S/250/2019-20/102686483 dated 23-03-2020 u/s 250 of the Income- tax Act, 1961 (hereinafter referred to as the ‘Act’) respectively against the assessment order passed by ACIT, Central Circle, Jamshedpur u/s. 153A r.w.s. 143(3) and 143(3) of the Act respectively, both dated 26.12.2018. 2. The appeals by the revenue and the Cross Objections of the assessee are essentially cross appeals on the same issues wherein for AY 2012-13, the revenue has challenged the 2 IT(SS)A Nos. 16 & 17/Ran/2020 & C.O. Nos. 06 & 07/Ran/2020 Chandra Awas Pvt. Ltd. AYs. 2012-13 & 2017-18 deletion of Rs. 5,34,87,087/- in respect of addition made by the Ld. AO towards unexplained and undisclosed investment in immovable property by admitting fresh evidence and violating the provisions of Rule 46A of the Income-tax Rules, 1962 (hereinafter referred to as the “Rules”). For AY 2017-18, the revenue has challenged the deletion of Rs. 5,51,96,811/- in respect of addition made by the Ld. AO towards undisclosed income from sale of flats by treating the seized documents as dumb documents and also in respect of deletion of Rs. 1,56,000/- on account of undisclosed rental income. 3. Brief facts as culled out from the records are that a search and seizure operation u/s. 132(1) of the Act was carried out on 16.12.2016 in “Chandra Group of Cases” which included the business premises of the assessee also. Assessment year 2012-13 is an unabated assessment year comprised within the six years referred in section 153A of the Act. Assessment Year 2017-18 is the year of search. 3.1 For the AY 2012-13, return of income against the notice issued u/s. 153A of the Act was filed on 17.04.2018 reporting a total income as a loss (-) Rs. 49,55,031/-. In the course of assessment proceedings, the Ld. AO took note of certain seized documents marked as “CPO-05” which contained a copy of anticipatory bail application along with related documents filed by the directors of the assessee company Shri Hare Ram Singh and Shri Harish Kumar Singh. The Ld. AO also referred to certain other seized documents named “CPO-10” which contained agreement to sell in respect of purchase of piece of land located at Mouza Tamulia, P.S. Chandil, Thana No. 333, District Seraikela, Kharsawan (referred to as Tamulia Land) from Shri Natwarlal Vakharia and his family members. From the said agreement to sell, Ld. AO noted that an advance payment of Rs. 2,00,00,000/- has been made by the assessee. Ld. AO also noted from the seized documents that expenses were incurred by the assessee towards construction of boundary wall on the said piece of land for which total expenditure incurred was of Rs. 3,34,87,078/-. Ld. AO made addition totaling to Rs. 5,34,87,078/- by holding that these were not disclosed and accounted in the books of accounts of the assessee company. 3 IT(SS)A Nos. 16 & 17/Ran/2020 & C.O. Nos. 06 & 07/Ran/2020 Chandra Awas Pvt. Ltd. AYs. 2012-13 & 2017-18 3.2 In respect of assessment year 2017-18, return of income was filed on 31.10.2017 reporting a total income of Rs. 4,92,040/-. In the course of assessment proceedings, the Ld. AO took note of various hand written noting/jottings from the seized documents marked as “CPO-01”. From the perusal of these hand written noting/jottings, Ld. AO arrived at a conclusion that certain figures/amounts stated therein represented sale of flats by the assessee which were not disclosed in its books of accounts. Since the income from sale of these flats remained unexplained and undisclosed, Ld. AO made an addition of Rs. 5,51,96,811/- in this respect as unexplained and undisclosed income of the assessee. The other addition of Rs. 1,56,000/- was made towards rental income from an apartment named “Chandra Kunj” located at New Baradwari, Sakchi, Jamshedpur, for which Ld. AO noted that one flat located at the top floor was rented regularly @ Rs. 13,000/- per month. 3.3 Aggrieved by the additions in both the years, assessee went in appeal before the Ld. CIT(A), who passed a common order for both the years and deleted the additions made by the Ld. AO. Aggrieved by the relief granted by Ld. CIT(A), the revenue is in appeal before the Tribunal. As noted above, assessee has filed Cross Objections which are cross appeals on the grounds taken by the revenue. 4. Shri Devesh Poddar, Advocate represented the assessee and revenue was represented by Shri Sanjay Mukherjee, CIT(DR). 4.1 Ld. CIT(DR) argued the matter and placed reliance on the order of the Ld. AO. 4.2 The Ld. Counsel for the assessee referred his written submission filed along with the paper book for both the years. Ld. Counsel for the assessee submitted that the Chandra Group is mainly engaged in the business of real estate and construction. 4.3 For AY 2012-13, he referred to the detailed submission made before the Ld. CIT(A) as reproduced in the impugned order. The relevant extract in the form of table is reproduced for ready reference: 4 IT(SS)A Nos. 16 & 17/Ran/2020 & C.O. Nos. 06 & 07/Ran/2020 Chandra Awas Pvt. Ltd. AYs. 2012-13 & 2017-18 AY Nature of Documents Amount (Rs.) Brief nature Broad contention 2012-13 Court documents 2 Crores Bail documents filed by Hare Ram Singh and Harish Singh, Directors of Chandra Awas in court. These are documents for anticipatory bail because they feel they may be charged for grabbing land. In their defense, the petitioners submitted that they have no possession of land and had rather been fooled by the prospective sellers. To this they referred to a counter case filed by them wherein they refer to advance paid (2 cr.) by them and construction of Boundary wall (3.34 cr.) at the instruction of owners. (i) The same have been accounted for in the books of accounts. ii) Have been subjected to double taxation as added in hands of Hare Ram Singh in AY 2012-13 & 15-16. 2012-13 Court documents 3.34 Crores - Do - i)The same have been accounted for in books of accounts. ii)Such assessment lies beyond the scope of 153A assessment and is time barred. 4.4 In respect of addition of Rs. 2 Cr., Ld. Counsel submitted that it was an advance payment made to five persons for purchase of Tamulia land. This addition was made referring to certain seized documents which were court papers for anticipatory bail application along with its supporting material. The counsel submitted that an agreement to sell dated 26.02.2013 was also seized in the course of search wherein the payment of advance of Rs. 2 Cr. was noted. This payment was made through banking channel and was duly reflected in the audited books of accounts of the assessee. He submitted that since there was a legal dispute between the assessee and the sellers of the impugned land, the court papers were found and seized in the course of search. The Ld. Counsel emphasized on the fact that books of accounts, bank statement and ledger of the sellers, all formed part of the seized material found during the course of search, which were before the Ld. AO in the course of the assessment proceedings. It was contended that Ld. CIT(A) took cognizance of 5 IT(SS)A Nos. 16 & 17/Ran/2020 & C.O. Nos. 06 & 07/Ran/2020 Chandra Awas Pvt. Ltd. AYs. 2012-13 & 2017-18 the same set of audited books of account, bank statements and ledgers while adjudicating on the appeal of the assessee and granted the relief. It was strongly submitted that once the advance paid by the assessee is reflected in the audited books of account, there was no basis for making an addition by the Ld. AO by placing reliance on court papers relating to legal dispute for the purchase of impugned land. From the paper book, the Ld. Counsel apprised the bench through the audited financial statements and also the ‘Group Summary of Loans and Advances (Assets)’ and the individual ledger account of the sellers from its books of account. The Ld. Counsel corroborated these transactions from the bank statements to demonstrate that all these payments were made through banking channel and were duly accounted and reported in the audited financial statement of the assessee in the impugned year. 4.5 In respect of addition of Rs. 3,34,87,087/- towards expenses incurred by the assessee on construction of boundary wall on the impugned land and security and management expenses thereon, Ld. Counsel submitted that Ld. AO himself in the impugned order at para 4(i) has noted by referring to the seized documents that the assessee had started the boundary wall construction work in April, 2008 which was completed in March, 2011 and the year under consideration is FY 2011-12 relating to AY 2012-13. The period during which the expenses were incurred by the assessee is April, 2008 to March, 2011 which is prior to the impugned year under consideration. Thus, the Ld. Counsel strongly submitted that no addition is called for in the year under consideration when all these expenses have been incurred prior to the impugned order. The Ld. Counsel further submitted that complete details of these expenses were furnished before the AO. It was contended that payments for these expenses were made through banking channel which Ld. AO failed to consider and proceeded to make addition to the total income of the assessee. Thus, Ld. Counsel argued and submitted that these payments for the expenses incurred on construction of boundary wall on Tamulia land have been made through banking channel and do not pertain to the year under consideration and, therefore, the addition made by the Ld. AO has been rightfully deleted by the Ld. CIT(A). 6 IT(SS)A Nos. 16 & 17/Ran/2020 & C.O. Nos. 06 & 07/Ran/2020 Chandra Awas Pvt. Ltd. AYs. 2012-13 & 2017-18 4.6 In respect of assessment year 2017-18 for the addition of Rs. 5,51,90,811/-, Ld. Counsel submitted that this addition has been made on the basis of seized documents marked as CPO-01 which was a rough loose diary maintained by one of the employees of the assessee. The details of page wise addition as mentioned in the assessment order are depicted below: Sl. No. Seized Document Page No. Paper Book Page No. Amount of addition (Rs.) 1. 16 4 45,00,000/- 2. 17 5 80,00,000/- 3. 18 6 1,34,50,000/- 4. 18 6 1,68,00,000/- 5. 30 to 31 7-8 1,24,46,811/- Total 5,51,96,811/- 4.7 Ld. Counsel apprised the bench through the seized material placed in the paper book and pointed from page 3 that it is titles as ‘Personal Memorandum’ in which against ‘Name’ it is written as ‘Harendra Kumar’ and against ‘Mobile No.’ it is written as ‘9204553334’. Also, there are certain noting/jottings which contains the name as ‘Harendra’. It was submitted by the Ld. Counsel that Mr. Harendra Kumar was a marketing employee of the assessee who worked for certain months and made certain noting/jottings in the said diary while performing his marketing function. Ld. Counsel further submitted that the noting/jottings in the said loose diary were not in the hands of directors of the company. These have been written by the sales executive during the course of his discussion with prospective customers as it can be noted and verified from the diary itself which contains names of various persons, mobiles numbers, rough estimation for fittings and appliances, size of flats, certain values, calculations etc. It was submitted that whenever these discussions with prospective customers resulted into actual execution of sale deed, the same was duly recorded in the books of accounts. He submitted that Ld. AO failed to carry out any independent enquiry to corroborate and demonstrate that the rough jottings and noting in the said loose diary relate to transactions which has yielded undisclosed and unexplained income to the assessee. The Ld. Counsel also submitted that no addition is called for in the hands of the assessee in terms of provisions of section 292C of the Act. 7 IT(SS)A Nos. 16 & 17/Ran/2020 & C.O. Nos. 06 & 07/Ran/2020 Chandra Awas Pvt. Ltd. AYs. 2012-13 & 2017-18 4.8 In respect of addition of Rs.1,56,000/- towards rental income, Ld. Counsel pointed out that this addition has been made without specifying the flat of the apartment “Chandra Kunj” and to whom it was given on rent. There are no corroborative evidence which have been brought on record by the Ld. AO and the addition has been made which is vague and on estimate, without conducting proper enquiry. The enquiry, if any, conducted by the Ld. AO, was had behind the back of the assessee and no opportunity for cross examination or verification was made available to the assessee in the course of the assessment proceedings and, therefore, Ld. CIT(A) has rightfully granted relief by deleting the addition so made. 5. We have heard rival contentions and perused the material available on record. We first take up the appeal for AY 2012-13. In respect of addition of Rs. 2 Cr. made by the Ld. AO towards advance payment made by the assessee to five persons for purchase of Tamulia land (supra), we note that Ld. AO has made an addition by simply narrating the facts without their verification and observing that these transactions have not been recorded in the books of account of the assessee and thereby holding that the source of payment of Rs. 2 Cr. is found to be unexplained and undisclosed. From the perusal of the documents enclosed in the paper book placed on record, we note that the assessee has accounted the payment of advance to five persons which has been reflected in its audited balance sheet for the year under consideration in Note No. 10 titled as “Loans & Advances & Deposits”. To corroborate this, Group Summary of loans and advances (assets) from the books of account of the assessee for the impugned year is also placed on record. From this Group Summary, Ld. Counsel pointed out the five persons to whom these advance payments were made. Further, individual ledger accounts of the five sellers depicting the payments made to each of them through banking channel and cheque details are also placed on record. All these payments through banking channel have further been corroborated with the bank statements of the assessee, placed on record. We observe that Ld. AO has taken an adverse view by taking certain noting from the seized documents relating to anticipatory bail application in respect of legal dispute between the assessee and the sellers of the impugned land. The fact remains that Ld. CIT(A) took cognizance of the seized documents vis-à-vis the audited 8 IT(SS)A Nos. 16 & 17/Ran/2020 & C.O. Nos. 06 & 07/Ran/2020 Chandra Awas Pvt. Ltd. AYs. 2012-13 & 2017-18 books of accounts, ledgers of the sellers and the bank statement and arrived a factual finding to delete the addition and granted relief to the assessee. The factual findings given by the Ld. CIT(A) in Para 4.3.3 of his order are reproduced hereunder for ready reference: “4.3.3. On a careful consideration I find merit in the submission of the appellant. It is an undisputed fact that the appellant through its directors entered in to an agreement for purchase of a piece of land situated at Tamuliya from Shri Natwarlal Vakharia and his family members for a total consideration of Rs.5,00,00,000/-. It is also a fact that the appellant gave advance of Rs.2,00,00,000/- through banking channels as is evident from Page N0.51 to 59 of paper book and also duly accounted and reflected in the balance sheet for the year ending 31.03.2012. With regard to expenditure incurred of Rs.3,34,87,078/- for construction of boundary wall on the said land; it is a fact on record that the construction of boundary wall commenced from April, 2008 and completed in March, 2011 and therefore the said expenditure cannot be taxed in the assessment year under appeal. Moreover, I have also perused the seized documents and ledger accounts of various expenses and found that the same were properly accounted in respective years and most of the payments were also made through banking channels. In fact as is evident from the assessment order the AO has not given any opportunity to the assessee to explain its case. Accordingly, I hold that the expenditure of Rs.3,34,87,078/- and Investment/advance of Rs.2,00,00,000/- were properly accounted in the books of accounts and therefore the AO is directed to delete the addition made of Rs.5,34,87,078/-.” 5.1 Revenue has taken the ground that fresh evidence have been filed before the Ld. CIT(A) who has not given opportunity to the Ld. AO to examine such evidence and is in violation of Rule 46A of the Rules. In respect of this issue raised by the revenue on fresh evidence filed by the assessee, we note that the documents furnished in the paper book placed on record are clarificatory in nature. We further note that when assessee has already submitted evidence before the Ld. AO and Ld. CIT(A) took decision on the basis of those documents, there is nothing new which has been brought on record by the Ld. AO. It is always open for the parties to bring on record evidences to clarify the submissions already made. Such clarificatory evidences can be furnished under the following circumstances, like – (i) to remove the doubts arisen in the mind of Ld. CIT(A) from the documents on record or (ii) to support the case already made by the assessee or (iii) to make the argument more explicit or (iv) to remove mistakes bonafidely committed. 9 IT(SS)A Nos. 16 & 17/Ran/2020 & C.O. Nos. 06 & 07/Ran/2020 Chandra Awas Pvt. Ltd. AYs. 2012-13 & 2017-18 The ledger accounts, group summary from the books of account which formed part of the seized material are evidences, clarificatory in nature. 5.2 Under section 250(4) of the Act, the CIT(A) has power while deciding an appeal to make a further enquiry himself or to direct the AO to make a further enquiry and make a report to him. Ld. CIT(A) made the enquiry/examination/verification himself. To our mind, the question of remanding the case to the Ld. AO did not really arise because there is a choice of procedure and the two procedures cannot be mixed up, more particularly when there was nothing new which was brought on record except being clarificatory in nature. Further, it is a settled position of law that the scope of powers of CIT(A) in disposing an appeal are coterminous with that of an AO. CIT(A) can do what the AO can do and also direct him to do what he has failed to do. Useful reference may be made to order of Hon’ble Apex Court’s decision in the case of CIT v. Kanpur Coal Syndicate [1964] 53 ITR 225 (SC) in which it was held that AAC has plenary powers in disposing off an appeal; that the scope of his power is co-terminus with that of the ITO, that he can do what the ITO can do and also direct him to do what he failed to do. 5.3 Further, we note that AY 2012-13 is an unabated year within the meaning of section 153A of the Act and the assessment has been completed u/s. 143(3) read with section 153A of the Act. The transaction in respect of which the Ld. AO has made an addition by noting certain information from court papers relating to dispute which have been found to be duly recorded and reported in the audited books of accounts of the assessee. Thus, there being no incriminating material in respect of the addition made by the Ld. AO and which the Ld. CIT(A) has duly verified and examined, calls for no interference from our side on the factual findings given by the Ld. CIT(A) in granting relief to the assessee by way of deleting the addition of Rs. 2,00,00,000/-. 5.4 In respect of addition made by the Ld. AO of Rs. 3,34,87,078/- in respect of expenses incurred by the assessee for construction of boundary wall on the impugned land and other expenses, we note that Ld. AO has acknowledged the fact in the assessment order 10 IT(SS)A Nos. 16 & 17/Ran/2020 & C.O. Nos. 06 & 07/Ran/2020 Chandra Awas Pvt. Ltd. AYs. 2012-13 & 2017-18 itself that these expenses were incurred by the assessee during the period April, 2008 to March, 2011, as found by the Ld. AO from the noting in the seized documents. It is also noted that details of all these expenses incurred during the period of April, 2008 to March, 2011 was placed on record forming part of paper book. From a perusal of these documents, it found that almost all the payments have been made through banking channel and these documents formed part of the court papers relating to the legal dispute between the assessee and the sellers of the land. The Ld. CIT(A) after verification of the same, has rightfully held that expenses for construction of boundary wall were incurred during the period from April, 2008 to March, 2011 and, therefore, the said expenditure could not be taxed in the assessment year under appeal before us. We find no reason to interfere with the factual finding given by the Ld. CIT(A). Accordingly, for AY 2012-13, we dismiss the grounds of appeal of the revenue and allow the grounds of the Cross Objection of the assessee. 6. In respect of AY 2017-18, from the order of Ld. CIT(A) we note that the assessee had submitted the details as reproduced therein. The same is extracted herein below for ready reference – 11 IT(SS)A Nos. 16 & 17/Ran/2020 & C.O. Nos. 06 & 07/Ran/2020 Chandra Awas Pvt. Ltd. AYs. 2012-13 & 2017-18 6.1 We note that for the impugned addition of Rs. 5,51,96,811/-, Ld. AO has referred to one loose diary forming part of seized documents wherein certain hand written entries were made suggesting that assessee has sold flats which were not disclosed in its books of accounts. In the course of hearing, Ld. Counsel apprised the bench through the seized diary placed in the paper book. We find that Ld. CIT(A) has also himself examined the seized documents and recorded his factual findings based on such examination and verification. The observations and findings of the Ld. CIT(A) in this respect are reproduced herein below for ready reference: “8.3.3 On a careful consideration, I find considerable force in the submission of the appellant. I have personally perused the seized diary marked as CPO-01 placed at Page No.9 to 44 of paper book and tried to correlate whether any of the noting suggests any undisclosed income on account of sale of property as contemplated by the AO. On perusal, it is observed that the notings are written in a haphazard and in coherent way and mostly without dates. On further perusal it is seen that names of some persons and mobile numbers are written. It is also seen that certain rough calculations were made either with regard to some dimensions, cost of certain materials, quotations etc. Most importantly it is observed that in none of the pages no mention of any flat number against which any cash or cheque received are noted. Moreover, the directors of the appellant company disowned the hand writing and the AO also failed to carry out any worthwhile investigation to corroborate the so called incriminating notings. Under these circumstances I hold that the documents relied upon by the AO are mere dumb documents and therefore no addition can be made based on such dumb document. In support of the same reliance is placed on the following decisions.” 6.2 Perusal of seized material suggests that the diary belonged to one Shri Harendra Kumar and the submissions made by the assessee explained the circumstances under which its employees’ maintained these documents. The Ld. AO could not show that these documents represented information from which a reasonable inference as to their representing ‘transaction’ could be drawn. These factors did not clearly reveal that the assessee had earned income, much less undisclosed income. We find force in the findings given by the Ld. CIT(A) which are based on his verification and examination of the seized diary marked as CPO-01 by holding it to be dumb document. Ld. CIT(A) has placed reliance on several decisions including that of coordinate bench of ITAT, Delhi in the case of Ashwani Kumar Vs. ITO [1991] 39 ITD 183 (Del) which held that – “when a dumb document, like the present slip, was recovered and the revenue wanted to make use of it, it was the duty of the revenue to collect necessary evidence which might provide an 12 IT(SS)A Nos. 16 & 17/Ran/2020 & C.O. Nos. 06 & 07/Ran/2020 Chandra Awas Pvt. Ltd. AYs. 2012-13 & 2017-18 acceptable narration to the various entries. The evidence collected should be such that any reasonable man would accept the hypothesis advanced by the revenue that the figures written on the right side of the slip represented incomes earned by the assessee. No such evidence was produced by the revenue, and, therefore, the Commissioner (Appeals) was not justified in upholding the addition in question.” 6.3 Further reliance was placed by the Ld. CIT(A) on the decision of Hon’ble Calcutta High Court in the case of Pr. CIT Vs. Ajanta Footcare (India) P. Ltd. [2017] 84 taxmann.com 106 (Cal) wherein it is held that - In the instant case, the appellate authorities have exercised their discretion against the revenue and in favour of the assessee. The reason for exercising such discretion is that no stock discrepancy could be demonstrated and there was no corroboration of the figures forming the basis of addition to the Income of the assessee as was directed by the Assessing Officer. No question about the said document was put to the Director of the assessee in course of search. This factor was also taken into consideration by the appellate bodies. The appellate authorities doubted the inherent probative value or quality of the above document upon applying their mind on it. In substance, the said authorities found no reason to draw presumption against the assessee on the basis of scribbled figures appearing on the document. This is how two fact finding bodies chose to deal with that document. Even without proper explanation from the assessee, when the mandate of law is that authorities may presume certain facts under section 292C to come to a conclusion in favour of revenue, the nature of information contained in or revealed by such document would have to be examined to link such document to undisclosed income of the assessee. Both the Commissioner (Appeals) and the Tribunal found no linking factor. Both these authorities rejected the reasoning of the Assessing Officer on this basis of which the latter came to his finding that the figures appearing on the said document could be computed to arrive at undisclosed income of the assessee. The findings of the appellate authorities cannot be held to be perverse or based on no evidence. The appellate authorities had examined the said document and found that the same could not be connected with assessee's transactions for the relevant assessment year.” 13 IT(SS)A Nos. 16 & 17/Ran/2020 & C.O. Nos. 06 & 07/Ran/2020 Chandra Awas Pvt. Ltd. AYs. 2012-13 & 2017-18 6.4 Considering the facts on record and the judicial precedents noted above, we find no merit in interfering with the decision taken by the Ld. CIT(A) in deleting the addition and granting relief to the assessee. Further, our observations and findings in Para 5.2 above applies with equal force for appeal relating to AY 2017-18 also. Accordingly, this ground of appeal by the revenue is dismissed and the ground of the assessee in its cross objection is allowed. 6.5 In respect of addition made towards rental income of Rs.1,56,000/-, we note that Ld. AO has made addition without referring to the specific flat in the apartment and to whom it was given on rent. The Ld. AO is not even sure of the property which he was referring to as he stated that “one flat located at the top floor” of “Chandra Kunj”. The addition made by the Ld. AO is vague and on estimate basis. Further, we observe that Ld. AO carried out certain enquiries behind the back of the assessee as also noted by the Ld. CIT(A), for which no opportunity was granted to it for the rebuttal, violating the principles of natural justice. The findings given by the Ld. CIT(A) in Para 9.3 are reproduced hereunder for ease of reference: “The AO in the assessment order· stated that an enquiry of the Apartment named Chandra Kunj, located at New Baradwari, Sakchi, Jamshedpur was made on 13.12.2018 and it was found that one flat located at the top floor is being rented regularly at the rate of Rs. 13,000/- per month. Accordingly, the AO computed the annual rental income at Rs.1,56,000/- and added to the total income as undisclosed income. On the other hand the appellant submitted that the AO carried the enquiry behind the back of the assessee and no opportunity was provided to counter the findings of the AO. Accordingly, the appellant submitted that since the principle of natural justice was not followed, the addition made in violation of the same is fit to be deleted. On a careful consideration I find that the AO has grossly violated the principle of natural Justice in making the addition. The AO is not even sure of the property which he was referring to as he stated that "one flat located at the top floor" of Chandrakunj. Even in the so called enquiry the AO failed to collect basic details such as tenant income, duration of his/her stay, any rental agreement, mode of payment of rent etc. Further, the enquiry conducted behind the back of the appellant was not even confronted with the assessee. Hence, such frivolous additions by violating the principles of natural justice cannot find any support of any appellate authorities. Accordingly, the AO is directed to delete the same.” 6.6 Considering the facts on record and the findings given by the Ld. CIT(A), we do not find any reason to interfere with the same and uphold the decision of the Ld. CIT(A), 14 IT(SS)A Nos. 16 & 17/Ran/2020 & C.O. Nos. 06 & 07/Ran/2020 Chandra Awas Pvt. Ltd. AYs. 2012-13 & 2017-18 dismissing the grounds of appeal of the revenue and allowing the grounds of cross objection of the assessee. 7. In the result, both the appeals of revenue are dismissed and the two cross objections of the assessee are allowed. Order is pronounced in the open court on 9 th May, 2022. Sd/- Sd/- (Rajpal Yadav) (Girish Agrawal) Vice President Accountant Member Dated: 9 th May, 2022 JD, Sr. PS Copy of the order forwarded to: 1. Appellant– ACIT, Central Circle-1-Office Road, Bistupur, Jamshedpur-831001 2. Respondent – M/s. Chandra Awas Pvt. Ltd.,Chandra Centre, 1B, Kalimati Road, Sakchi, Jamshedpur-831001 3. CIT(A), Ranchi. 4. CIT , 5. DR, ITAT, Ranchi. True Copy By Order Assistant Registrar, ITAT, Kolkata Bench, Kolkata