Shri Chandarlal Parasaram Chhabriya [ HUF ], Kolhapur V. Dy CIT, Kolhapur

ITA 1066/PUN/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76104 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 8 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 05-11-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 25-05-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P L PATHADE
• Assessee Lawyers: SUSHANT S PHADNIS
• Keywords: Unexplained cash credit; Unexplained investment; Gift; Income from undisclosed sources; Search and seizure; Opportunity of being heard; Additional evidence; Cost of acquisition; Accommodation entries
• Section: 143(3); 234B; 68; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHE A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER ITA NO.1056/PN/2012 (ASSESSMENT YEAR : 2005-06) MEENA CHANDARLAL CHHABRIYA, OM SAI, 235/4 B, TARABAI PARK, DIST. KOLHAPUR. PAN : ACGPC8771L . APPELLANT VS. DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, KOLHAPUR. . RESPONDENT ITA NO.1057/PN/2012 (ASSESSMENT YEAR : 2004-05) SHRI PARASARAM ACHANTRAI CHHABRIYA (HUF), OM SAI, 235/4 B, TARABAI PARK, DIST. KOLHAPUR. PAN : AAAHC4059F . APPELLANT VS. DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, KOLHAPUR. . RESPONDENT ITA NO.1058/PN/2012 (ASSESSMENT YEAR : 2008-09) SHRI PARASARAM ACHANTRAI CHHABRIYA, OM SAI, 235/4 B, TARABAI PARK, DIST. KOLHAPUR. PAN : AALPC1126G . APPELLANT VS. DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, KOLHAPUR. . RESPONDENT ITA NOS.1059 & 1060/PN/2012 (ASSESSMENT YEARS : 2004-05 & 2005-06) JAMANABAI PARASARAM CHHABRIYA, OM SAI, 235/4 B, TARABAI PARK, DIST. KOLHAPUR. PAN : AAGPC8790H . APPELLANT VS. DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, KOLHAPUR. . RESPONDENT ITA NO.1733/PN/2012 A.Y. 2008-09 ITA NOS.1061 & 1062/PN/2012 (ASSESSMENT YEARS : 2004-05 & 2005-06) SHRI LALCHAND PARASARAM CHHABRIYA (HUF), OM SAI, 235/4 B, TARABAI PARK, DIST. KOLHAPUR. PAN : AAAHC4058A . APPELLANT VS. DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, KOLHAPUR. . RESPONDENT ITA NOS.1063 & 1064/PN/2012 (ASSESSMENT YEARS : 2004-05 & 2005-06) SHRI CHANDARLAL PARASARAM CHHABRIYA (HUF), OM SAI, 235/4 A, TARABAI PARK, DIST. KOLHAPUR. PAN : AAAHC3961N . APPELLANT VS. DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, KOLHAPUR. . RESPONDENT ITA NOS.1065 TO 1069/PN/2012 (ASSESSMENT YEARS : 2004-05 TO 2008-09) SHRI CHANDARLAL PARASARAM CHHABRIYA, OM SAI, 235/4 A, TARABAI PARK, DIST. KOLHAPUR. PAN : AASPC4715G . APPELLANT VS. DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, KOLHAPUR. . RESPONDENT APPELLANT BY : MR. SUSHANT S. PHADNIS RESPONDENT BY : MR. P. L. PATHADE DATE OF HEARING : 31-01-2014 DATE OF PRONOUNCEMENT : 31-01-2014 ORDER PER G. S. PANNU, AM THE CAPTIONED APPEALS HAVE BEEN PREFERRED BY DIFFER ENT ASSESSEES BELONGING TO ONE FAMILY AND INVOLVE CERTAIN COMMON ISSUES, WHICH ARE AS A RESULT OF A SEARCH ACTION U/S 132 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) CARRIED OUT BY THE DEPARTMENT ON 18.04.2007 T O 20.04.2007 IN THE ITA NO.1733/PN/2012 A.Y. 2008-09 CAPTIONED GROUP CASES, THEREFORE THE CAPTIONED APPE ALS HAVE BEEN CLUBBED AND HEARD TOGETHER AND A CONSOLIDATED ORDER IS BEIN G PASSED FOR THE SAKE OF CONVENIENCE AND BREVITY. 2. BEFORE WE PROCEED TO ADJUDICATE THE GROUNDS OF A PPEAL RAISED IN THE RESPECTIVE APPEALS, IT WOULD BE APPROPRIATE TO BRIE FLY TOUCH-UPON THE BACKGROUND OF THE IMPUGNED DISPUTES. IT TRANSPIRES THAT THE INVESTIGATION WING OF THE DEPARTMENT, MUMBAI CARRIED OUT CERTAIN ENQUI RIES IN THE CASE OF ONE SHRI SUBHASH BHATIJA. SHRI SUBHASH BHATIJA IN THE COURSE OF HIS STATEMENT DEPOSED BEFORE THE INVESTIGATION WING OF THE DEPART MENT, MUMBAI ON 03.10.2006 CONFESSED THAT HE HAD PROVIDED CERTAIN A CCOMMODATION ENTRIES IN THE FORM OF GIFTS TO MEMBERS OF THE ASSESSEE GROUP AS ALSO CERTAIN OTHER PERSONS. THE SAID PERSON DEPOSED THAT IN LIEU OF P ROVIDING ACCOMMODATION ENTRIES THROUGH BANKING CHANNELS, IN RETURN HE RECE IVED CASH FROM SUCH PERSONS INCLUDING HIS COMMISSION CHARGES FOR PROVID ING SUCH ACCOMMODATION ENTRIES. THE MODUS OPERANDI WAS ALSO EXPLAINED BY HIM BY WAY OF WHICH HE USED TO DEPOSIT THE CASH SO RECEIVED IN HIS BANK AC COUNT AND THEREAFTER A CHEQUE WAS ISSUED IN FAVOUR OF THE CONCERNED PERSON UNDER THE GUISE OF GIFTS. SHRI SUBHASH BHATIJA ALSO CONFIRMED THAT HE CHARGED 3% OF THE AMOUNT AS HIS COMMISSION AND SUCH EARNINGS WERE THEREAFTER DECLAR ED BY HIM IN HIS RETURNS OF INCOME. AS A CONSEQUENCE OF THE AFORESAID ENQUI RIES, THE DEPARTMENT UNDERTOOK A SEARCH ACTION U/S 132 OF THE ACT ON 18. 04.2007 TO 20.04.2007 ON THE ASSESSEE GROUP AS ALSO CERTAIN OTHER GROUPS, NA MELY, LALWANIS AND MEGHANIS, WHO WERE ALSO NAMED BY SHRI SUBHASH BHATI JA. BE THAT AS IT MAY, IN THE COURSE OF THE IMPUGNED SEARCH PROCEEDINGS, M EMBER OF THE ASSESSEE GROUP WERE CONFRONTED WITH THE RESULT OF THE ENQUIR IES MADE BY THE INVESTIGATION WING OF THE DEPARTMENT, MUMBAI. SHRI LALCHAND PARASARAM CHHABRIYA WAS QUESTIONED REGARDING THE ACCOMMODATIO N ENTRIES TAKEN IN THE GARB OF GIFT FROM SHRI SUBHASH BHATIJA. SHRI LALCH AND PARASARAM CHHABRIYA ADMITTED THE MODUS OPERANDI OF INTRODUCING THEIR UNACCOUNTED MONEY INTO THE ITA NO.1733/PN/2012 A.Y. 2008-09 BOOKS OF ACCOUNT UNDER THE GUISE OF GIFT AND ACCORD INGLY THE GIFTS STATED TO HAVE BEEN RECEIVED FROM SHRI SUBHASH BHATIJA IN THE NAMES OF VARIOUS FAMILY MEMBERS WERE ADMITTED AS ADDITIONAL INCOME AND IT W AS FURTHER AGREED THAT THE DUE TAXES ON SUCH ADDITIONAL INCOME SHALL BE DE POSITED. IN THE STATEMENT SO RECORDED U/S 132(4) OF THE ACT, GIFTS TO THE TUN E OF RS.33.25 LACS STATED TO HAVE BEEN RECEIVED FROM SHRI SUBHASH BHATIJA WAS OF FERED AS ADDITIONAL INCOME. SUBSEQUENTLY, THE MEMBERS OF THE ASSESSEE GROUP OFFERED THE SAID AMOUNT IN THE RESPECTIVE HANDS AS THEIR UNACCOUNTED INCOME. IN-FACT, THE MEMBERS OF THE ASSESSEE GROUP OFFERED UNACCOUNTED I NCOME ON THIS SCORE OF RS.43.75 LACS ON ACCOUNT OF GIFT FROM SHRI SUBHASH BHATIJAS FAMILY AS AGAINST THE DECLARATION OF ADDITIONAL INCOME OF RS.33.25 LA CS MADE IN THE COURSE OF DEPOSITION U/S 132(4) OF THE ACT. 3. IN RESPONSE TO NOTICES ISSUED U/S 153A(1)(A) OF THE ACT, RETURNS OF INCOME WERE FURNISHED BY THE MEMBERS OF THE ASSESSE E GROUP IN THE AFORESAID BACKGROUND. IN THE ASSESSMENTS CONCLUDED U/S 153A( 1)(B) OF THE ACT, THE GIFTS DECLARED AS ADDITIONAL INCOME HAVE BEEN ASSES SED ALONGWITH CERTAIN OTHER GIFTS AND CERTAIN OTHER ADDITIONS AND AS A RE SULT THE TOTAL INCOME HAS BEEN ASSESSED IN RESPECT OF HANDS AT AMOUNT HIGHER THAN THOSE RETURNS. SUCH ASSESSMENTS HAVE ALSO BEEN AFFIRMED BY THE CIT(A), AGAINST WHICH THE MEMBERS OF THE ASSESSEE GROUP ARE IN APPEAL BEFORE US. 4. IN THIS BACKGROUND, WE MAY NOW TAKE-UP THE APPEA L IN ITA NO.1065/PN/2012 IN THE CASE OF SHRI CHANDARLAL PARA SARAM CHHABRIYA AS THE LEAD CASE. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), KOLHAPUR DATE D 26.03.2012 WHICH, IN TURN, HAS ARISEN FROM AN ASSESSMENT ORDER DATED 30. 12.2009 PASSED BY THE ASSESSING OFFICER U/S 143(3) R.W.S. 153A(B) OF THE ACT, PERTAINING TO THE ASSESSMENT YEAR 2004-05. ITA NO.1733/PN/2012 A.Y. 2008-09 5. IN THIS APPEAL, THE THREE SUBSTANTIVE GROUNDS OF APPEAL RAISED BY THE ASSESSEE READ AS UNDER :- 1. ON FACTS AND IN CIRCUMSTANCE OF THE CASE THE LE ARNED CIT (A) ERRED IN LAW AND ON MERIT IN CONFIRMING THE ADDITIO N MADE ON ACCOUNT OF GIFT RECEIVED FROM SHRI JAGDISH KHATRI AT RS. 10,00,000/ - WHICH WAS RECEIVED THROUGH HIS NRE ACCOUNT AND WHEN THE ASSESSEE H AD FULFILLED ITS PRIMARY RESPONSIBILITY AT PROVING THE GENUINENESS OF GIFT, IDENTITY OF THE DONOR AS ALSO FINANCIAL CAPACITY OF THE DONOR. 2. ON FACTS AND IN CIRCUMSTANCE OF THE CASE THE LEA RNED CIT (A) ERRED IN LAW AND ON MERIT IN CONFIRMING THE ADDITIO N MADE ON ACCOUNT OF GIFT RECEIVED FROM SHRI BHATIJA AT RS. 13,00,000/- WHEN THE ASSESSEE HAD FULFILLED ITS PRIMARY RESPONSIBILITY AT PROVING THE GENUINENE SS OF GIFT, IDENTITY OF THE DONOR AS ALSO FINANCIAL CAPACITY OF THE DONOR. 3. ON FACTS AND IN CIRCUMSTANCES OF THE CASE THE LE ARNED CIT (A) ERRED IN NOT DIRECTING THE A.O. TO TREAT THE AMOUNT SEIZED AT THE TIME OF SEARCH AS ADVANCE TAX WHEN THE ASSESSEE HAD ON VARIOUS OCC ASION WRITTEN TO THE CONCERNED OFFICER TO APPROPRIATE THE CASH SEIZED AT THE TIME OF SEARCH AGAINST THE TAX PAYABLE BY HIM RESULTING INTO UNJUS TIFIED LEVY OF INTEREST U/S. 234 A, B AND C. 6. IN SO FAR AS THE GROUND OF APPEAL NO.2 IS CONCER NED THE SAME RELATES TO AN INCOME ASSESSED OF RS.13,00,000/- REPRESENTIN G GIFT RECEIVED FROM SHRI SUBHASH BHATIJA. AS NOTICED EARLIER, IN A STATEMEN T RECORDED U/S 132(4) OF THE ACT, THE SAID GIFT RECEIVED FROM SHRI SUBHASH BHATI JA WAS SURRENDERED AND OFFERED AS ADDITIONAL INCOME. IN THE RETURN OF INC OME FILED IN RESPONSE TO NOTICED ISSUED U/S 153A(1)(A) OF THE ACT ON 27.08.2 009 THE AFORESAID AMOUNT OF GIFT WAS ALSO OFFERED AS UNACCOUNTED INCOME. HO WEVER, WHILE OFFERING THE SAID AMOUNT AS INCOME IN THE RETURN AND PAYING TAXE S THEREON, ASSESSEE FURNISHED A NOTE IN THE COMPUTATION OF INCOME WHICH READ AS UNDER :- 3. IT IS ALSO SUBMITTED THAT THE GIFTS RECEIVED FR OM BHATIJA FAMILY ARE DECLARED UNDER PROTEST AND IF AT THE TIME OF AS SESSMENT PROCEEDINGS, I AM ABLE GET CONFIRMATION AND PROVE THE GENUINENESS OF THE GIFTS THE SAME MAY PLEASE BE REDUCED FROM MY UNDISCLOSED INCOME FOR RE LEVANT ASSESSMENT YEARS. 7. IN TERMS OF THE SAID NOTE ANNEXED WITH THE RETUR N OF INCOME, ASSESSEE ASSERTED THAT THE SAID AMOUNT WAS BEING OFFERED AS INCOME UNDER PROTEST AND IF AT THE TIME OF ASSESSMENT PROCEEDINGS, ASSESSEE WAS ABLE TO GET ITA NO.1733/PN/2012 A.Y. 2008-09 CONFIRMATION AND PROVE THE GENUINENESS OF THE GIFT, THEN THE SAME BE REDUCED FROM HIS DECLARED UNDISCLOSED INCOME. 8. HOWEVER, THE ASSESSING OFFICER WAS NOT IMPRESSED WITH THE STAND OF THE ASSESSEE IN THE COURSE OF ASSESSMENT PROCEEDINGS AN D HE FOUND IT EXPEDIENT TO ASSESS THE GIFT CREDITED IN THE BOOKS OF ACCOUNT STATED TO HAVE BEEN RECEIVED FROM SHRI SUBHASH BHATIJA AS AN UNEXPLAINE D CASH CREDIT U/S 68 OF THE ACT AND ACCORDINGLY AFFIRMED THE INCOME SO DECL ARED IN THE RETURN OF INCOME. IN COMING TO SUCH CONCLUSION, ASSESSING OF FICER FOUND NO MERIT IN THE PLEA OF THE ASSESSEE THAT THE ADDITIONAL INCOME ON ACCOUNT OF GIFTS RECEIVED FROM SHRI SUBHASH BHATIJAS FAMILY WAS RETURNED UND ER PROTEST; AND IT HAS BEEN FURTHER HELD THAT ASSESSEE OTHERWISE HAD ALSO FAILED TO ESTABLISH THE GENUINENESS OF THE GIFTS. THE ASSESSING OFFICER CO NCLUDED THAT (I) THE ADMISSION OF ADDITIONAL INCOME MADE IN THE STATEMEN T RECORDED U/S 132(4) OF THE ACT WAS NOT UNDER PROTEST, RATHER ASSESSEE DECL ARED SUCH ADDITIONAL INCOME ON ACCOUNT OF HIS INABILITY TO EXPLAIN THE G IFTS; (II) THE INCOME ADMITTED IN THE STATEMENT U/S 132(4) OF THE ACT WAS DULY OFF ERED IN THE HANDS OF THE RESPECTIVE ASSESSEES IN THE RETURNS OF INCOME FILED ; (III) IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE GENUINENESS OF GIFT COU LD NOT BE SUBSTANTIATED; AND, (IV) THE DONOR WAS NOT PRODUCED FOR VERIFICATI ON, AND RATHER ASSESSEE REQUESTED THE ASSESSING OFFICER TO PROVIDE CROSS-EX AMINATION OF THE DONOR AND THE SUMMONS ISSUED TO THE DONOR AT THE REQUEST OF T HE ASSESSEE REMAINED UNATTENDED. FOR ALL THE ABOVE REASONS, THE ASSESSI NG OFFICER CONCLUDED THAT THE GIFTS STATED TO HAVE BEEN RECEIVED FROM SHRI SU BHASH BHATIJA WAS NOTHING BUT A DEVICE ADOPTED BY THE ASSESSEE TO INTRODUCE U NACCOUNTED CASH UNDER THE GARB OF GIFT, AS DULY ADMITTED BY THE SHRI SUBH ASH BHATIJA BEFORE THE INVESTIGATION WING OF THE DEPARTMENT, MUMBAI. 9. THE AFORESAID STAND OF THE ASSESSING OFFICER HAS ALSO BEEN AFFIRMED BY THE CIT(A). ACCORDING TO THE CIT(A), ASSESSEE HAS NOT SUCCEEDED IN PROVING ITA NO.1733/PN/2012 A.Y. 2008-09 THE GENUINENESS OF THE TRANSACTION AND THAT IT WAS CLEAR THAT THERE WAS NEITHER ANY RELATIONSHIP BETWEEN THE DONOR AND THE ASSESSEE , AND NOR WAS THERE ANY OCCASION TO GIVE THE GIFTS. THE CIT(A) WAS FURTHER NOTICED THAT NEITHER THE DONOR WAS PRODUCED AND NOR HIS FINANCIAL CAPACITY E STABLISHED AND IN THE ABSENCE OF ANY PROOF OF NATURAL LOVE AND AFFECTION THE GENUINENESS OF THE GIFT WAS DOUBTFUL. THE CIT(A) FURTHER NOTICED THAT IN T HE COURSE OF SEARCH AND SEIZURE PROCEEDINGS AS WELL AS POST-SEARCH ENQUIRIE S, THE APPELLANT HAD DULY ADMITTED THE NATURE OF THE GIFTS, BEING MERE ACCOMM ODATION ENTRIES. THE CIT(A) FURTHER NOTICED THAT PERSONS FROM OTHER GROU PS I.E LALWANIS AND MEGHANIS, WHO WERE ALSO PUT TO SEARCH AS A RESULT O F THE DEPOSITIONS OF SHRI SUBHASH BHATIJA HAVE ACCEPTED THE GIFTS AS BOGUS AN D DULY OFFERED THE COMMENSURATE AMOUNTS AS THEIR INCOME. FOR ALL THE ABOVE REASONS, THE CIT(A) HELD THAT THE SO-CALLED GIFTS RECEIVED FROM SHRI SUBHASH BHATIJA WAS NOTHING BUT ACCOMMODATION ENTRIES AND ACCORDINGLY S USTAINED THE ACTION OF THE ASSESSING OFFICER. 10. IN THE ABOVE BACKGROUND, THE LEARNED COUNSEL FO R THE ASSESSEE SUBMITTED THAT ASSESSEE HAD PROVED THE GIFTS RECEIV ED FROM SHRI SUBHASH BHATIJA BEYOND A REASONABLE DOUBT INASMUCH AS ASSES SEE HAD FURNISHED THE GIFT DEED, EXTRACT OF THE BANK ACCOUNT OF SHRI SUBH ASH BHATIJA, BANK CERTIFICATE THAT THE PAY ORDER WAS ISSUED BY DEBIT IN THE ACCOU NT OF SHRI SUBHASH BHATIJA AND ALSO THE COPIES OF RETURN OF INCOME OF SHRI SUB HASH BHATIJA AND HIS FAMILY MEMBERS SHOWING GIFTS TO ASSESSEE AND HIS FAMILY ME MBERS. IT WAS ALSO POINTED OUT THAT INITIALLY AT THE TIME OF ASSESSMEN T U/S 143(3) OF THE ACT, THE CONFIRMATION OF GIFTS BY SHRI SUBHASH BHATIJA WAS A CCEPTED BY THE THEN ASSESSING OFFICER. THE LEARNED COUNSEL SUBMITTED T HAT IN THIS BACKGROUND IF SHRI SUBHASH BHATIJA HAD RETRACTED FROM HIS EARLIER STAND, ASSESSEE CANNOT BE PUT TO A DISADVANTAGE AND THIS CONTEXT IT WAS POINT ED OUT THAT THE ASSESSEE SHOULD HAVE BEEN ALLOWED AN OPPORTUNITY TO CROSS-EX AMINE SHRI SUBHASH BHATIJA. IT WAS THEREFORE CONTENDED THAT THE ADDIT ION SUSTAINED BY THE LOWER ITA NO.1733/PN/2012 A.Y. 2008-09 AUTHORITIES MERELY BECAUSE ASSESSEE HAD ACCEPTED/SU RRENDERED THE IMPUGNED GIFTS IN THE STATEMENT RECORDED U/S 132(4) OF THE A CT AND SUBSEQUENTLY IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE ISSUED U/S 153A(1)(A) OF THE ACT, IS OF NO CONSEQUENCE. 11. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REP RESENTATIVE APPEARING FOR THE REVENUE HAS DEFENDED THE ORDERS OF AUTHORIT IES BELOW BY REFERRING TO THE DISCUSSION MADE IN THE RESPECTIVE ORDERS, WHICH HAVE ALREADY BEEN REFERRED BY US IN THE EARLIER PARAGRAPHS AND THE SA ME ARE NOT BEING REPEATED FOR THE SAKE OF BREVITY. 12. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. THE DISPUTE BEFORE US ESSENTIALLY RELATES TO THE ADDITION MADE BY THE ASSESSING OFFICER IN RESPECT OF FOREIGN GIFT STATED TO HAVE BEEN RECEIVE D BY THE ASSESSEE FROM THE FAMILY OF SHRI SUBHASH BHATIJA. THE GIFTS FROM SHR I SUBHASH BHATIJAS FAMILY HAVE BEEN RECEIVED BY THE ASSESSEE AS WELL AS HIS O THER FAMILY MEMBERS, WHOSE APPEALS ARE ALSO BEFORE US. IN AGGREGATE GIF TS RECEIVED BY THE ASSESSEE AND HIS FAMILY MEMBERS FROM THE SHRI SUBHA SH BHATIJAS FAMILY AMOUNT TO RS.43.75 LACS, WHICH HAVE BEEN DULY OFFER ED AS INCOMES IN THE RESPECTIVE RETURNS OF INCOME, THOUGH UNDER PROTEST. THE ASSESSING OFFICER HAS NOT ACCEPTED THE EXPLANATION OF THE ASSESSEE WI TH REGARD TO THE AMOUNTS CREDITED ON ACCOUNT OF SUCH GIFTS. THERE IS NO DIS PUTE THAT PAYMENTS/REMITTANCES OF GIFTS HAVE BEEN MADE BY SHR I SUBHASH BHATIJAS FAMILY THROUGH BANKING CHANNELS. THERE IS ALSO NO DISPUTE THAT THE GIFTS HAVE BEEN DULY CONFIRMED BY THE SHRI SUBHASH BHATIJAS F AMILY IN TERMS OF THE RESPECTIVE GIFT DEEDS. SO, HOWEVER, THE DISPUTE AR ISES ON ACCOUNT OF A CONFESSION MADE BY SHRI SUBHASH BHATIJA ON 03.10.20 06 IN THE COURSE OF HIS DEPOSITION BEFORE THE INVESTIGATION WIND OF THE DEP ARTMENT, MUMBAI. IN THE COURSE OF SUCH DEPOSITION, THE SAID SHRI SUBHASH BH ATIJA STATED THAT THE GIFTS MADE TO THE ASSESSEE GROUP AND ALSO TO OTHER TWO GR OUPS, NAMELY, LALWANIS ITA NO.1733/PN/2012 A.Y. 2008-09 AND MEGHANIS WERE NOTHING BUT ACCOMMODATION ENTRIES INASMUCH AS THE GIFTS WERE GIVEN THROUGH BANKING CHANNELS IN LIEU OF AMOU NTS RECEIVED BACK IN CASH INCLUDING A REMUNERATION FOR SUCH SERVICES RENDERED TO THE ASSESSEE GROUP AND ALSO TO LALWANIS AND MEGHANIS. IT FURTHER TRAN SPIRES FROM THE ORDER OF THE AUTHORITIES BELOW THAT SHRI SUBHASH BHATIJA CLAIMED THAT HE EARNED COMMISSION @ 3% ON SUCH ACCOMMODATION ENTRIES AND T HAT SUCH INCOME WAS DULY ACKNOWLEDGED AND TAXES PAID THEREON, AS A FOLL OW UP OF HIS DEPOSITION MADE BEFORE THE INVESTIGATION WING OF THE DEPARTMEN T, MUMBAI. IN THIS BACKGROUND, THE ASSESSEE AND HIS FAMILY MEMBERS WER E CONFRONTED ON THE GENUINENESS OF THE GIFTS CREDITED IN THEIR ACCOUNTS AND IN THE COURSE OF A SEARCH ACTION U/S 132 OF THE ACT ON 18.04.2007, THE ASSESSEE ADMITTED THAT THE GIFTS WERE MERE ACCOMMODATION ENTRIES AND OFFER ED THE SAME AS ADDITIONAL INCOME. IN THE RETURNS OF INCOME FILED SUBSEQUENTLY IN RESPONSE TO NOTICE ISSUED U/S 153A(1)(A) OF THE ACT, THE AMOUNT S OF GIFTS SURRENDERED DURING THE COURSE OF SEARCH WERE DULY DECLARED AS A DDITIONAL INCOME AND TAXES PAID. HOWEVER, THE AMOUNT OF GIFTS RECEIVED FROM S HRI SUBHASH BHATIJA AND HIS FAMILY MEMBERS WAS STATED TO BE OFFERED AS ADDI TIONAL INCOME UNDER PROTEST. DUE TO THE AFORESAID ACTION OF THE ASSES SEE, THE IMPUGNED DISPUTE HAS REACHED THE TRIBUNAL BECAUSE THE INCOME-TAX AUT HORITIES HAVE SUSTAINED THE ADDITION TREATING SUCH GIFTS TO BE UNEXPLAINED CREDITS WITHIN THE MEANING OF SECTION 68 OF THE ACT. 13. OSTENSIBLY, SECTION 68 OF THE ACT PRESCRIBES TH AT WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF THE ASSESSEE AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERED BY HIM IS NOT IN THE OPINION OF THE ASSESSING OFFICER SATISFACTORY, THE SUM SO CREDITED MAY BE CHARGED TO INCOME TAX AS INCOME OF THE ASSESSEE OF THE PREVIOUS YEAR. IN THE CONTEXT OF THE CONTROVERSY B EFORE US, THE CLAIM IS THE IMPUGNED CREDITS ARE RECEIVED BY THE ASSESSEE AS GI FTS. THE INCOME-TAX ITA NO.1733/PN/2012 A.Y. 2008-09 AUTHORITIES HAVE NOT ACCEPTED THE NATURE OF THE CRE DITS AS GIFTS AND THEREFORE THE SAME HAVE BEEN ADDED AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. 14. OSTENSIBLY, THE PROVISIONS OF SECTION 68 OF THE ACT CAST AN ONUS ON THE ASSESSEE TO SATISFACTORILY EXPLAIN THE NATURE AND S OURCE OF GIFTS IN QUESTION. IT HAS BEEN JUDICIALLY LAID DOWN THAT THE ONUS CAST ON THE ASSESSEE IN TERMS OF SECTION 68 OF THE ACT CAN BE SAID TO BE DISCHARGED IF ASSESSEE IS ABLE TO EXPLAIN THE IDENTITY OF THE CREDITOR, CREDITWORTHIN ESS OF THE CREDITOR AND ALSO THE GENUINENESS OF THE TRANSACTION. SUCH INGREDIENTS O F SECTION 68 OF THE ACT ARE EQUALLY APPLICABLE A CREDIT WHICH IS CLAIMED TO BE A RECEIPT BY WAY OF GIFTS ALSO, AS HELD BY THE HONBLE SUPREME COURT IN THE C ASE OF CIT VS. P. MOHANAKALA, (2007) 291 ITR 278 (SC). 15. IN THE AFORESAID BACKGROUND, NOW WE MAY EXAMINE AS TO WHETHER HAVING REGARD TO THE MATERIAL AND EVIDENCE ON RECOR D CAN IT BE SAID THAT THE BURDEN CAST ON THE ASSESSEE IN TERMS OF SECTION 68 OF THE ACT HAS BEEN DISCHARGED OR NOT? IN SO FAR AS THE IDENTITY OF TH E PERSONS FROM WHOM THE AMOUNTS HAVE BEEN RECEIVED, THE SAME CANNOT BE DISP UTED BECAUSE OF THE MATERIAL ON RECORD, NAMELY, THE GIFT DEED, PAN NUMB ERS, EVIDENCE OF BANK ACCOUNT BEING MAINTAINED, ETC. . IT IS ALSO NOT IN DISPUTE THAT THE AMOUNTS HAVE TRAVELLED TO THE CREDIT OF THE ASSESSEE OUT OF THE BANK ACCOUNT OF THE DONOR FAMILY I.E. SHRI SUBHASH BHATIJA. SO, HOWEVER, THE MOOT QUESTION IS AS TO WHETHER THE GENUINENESS OF THE TRANSACTION I.E. THE NATURE OF THE RECEIPTS BY WAY OF GIFTS, STANDS PROVED BY THE ASSESSEE OR NOT? IN THIS CONTEXT, ASSESSEE HAS REFERRED TO THE GIFTS DEED AND ALSO THE ASSESSM ENTS MADE ORIGINALLY U/S 143(3) OF THE ACT WHEREIN SUCH GIFTS HAVE BEEN ACCE PTED AS EXPLAINED BY THE ASSESSING OFFICER. SO, HOWEVER, THE AFORESAID ASSE RTIONS OF THE ASSESSEE, IN OUR OPINION, ARE MISPLACED BECAUSE OF THE DEPOSITIO N MADE BY SHRI SUBHASH BHATIJA (I.E. THE DONOR) BEFORE THE INVESTIGATION W IND OF THE DEPARTMENT, MUMBAI, WHICH WE HAVE ALREADY ELUCIDATED IN THE EAR LIER PARAGRAPHS. IN TERMS ITA NO.1733/PN/2012 A.Y. 2008-09 THEREOF, THE NATURE OF THE CREDITS IN QUESTION BECO ME SUSPECT AND THEREFORE ONE HAS TO EXAMINE AS TO WHETHER THE BURDEN HAS BEE N DISCHARGED BY THE ASSESSEE UNDER SUCH CHANGED CIRCUMSTANCES. IN OUR CONSIDERED OPINION, THE ANSWER IS AN EMPHATIC NO. FACTUALLY SPEAKING, THE DEPOSITION OF SHRI SUBHASH BHATIJA BEFORE THE INVESTIGATION WIND OF THE DEPART MENT, MUMBAI WAS FOLLOWED UP BY THE ASSESSEE IN THE COURSE OF SEARCH OPERATIO N U/S 132(1) OF THE ACT WHEREIN IN A STATEMENT RECORDED U/S 132(4) OF THE A CT, ASSESSEE STATED ITS INABILITY TO PRODUCE CONFIRMATIONS OF SUCH GIFTS. IN PARA 10 OF THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS REPRODUCED THE ANS WERS GIVEN BY THE ASSESSEE TO SOME OF THE QUESTIONS PUT TO HIM IN THE STATEMENT RECORDED U/S 132(4) OF THE ACT. THE DEPOSITIONS MADE THEREIN CL EARLY SHOW THAT THE ASSESSEE OFFERED THE IMPUGNED GIFTS AS ADDITIONAL I NCOME ON HIS INABILITY TO PRODUCE THE CONFIRMATION LETTERS AND AFTER BEING CO NFRONTED WITH THE INFORMATION AVAILABLE WITH THE INCOME-TAX DEPARTMEN T, NAMELY THE DEPOSITION OF SHRI SUBHASH BHATIJA MADE BEFORE THE INVESTIGATION WING OF THE DEPARTMENT, MUMBAI. MOREOVER, EVEN DURING THE CONSEQUENT ASSES SMENTS MADE IN PURSUANCE TO THE SEARCH ACTION, IN TERMS OF SECTION 143(3) R.W.S. 153A(1)(B) OF ACT, WE FIND NO MATERIAL LEAD BY THE ASSESSEE TO CO NTROVERT EITHER (I) THE DEPOSITION MADE BY SHRI SUBHASH BHATIJA BEFORE THE INVESTIGATION WING OF THE DEPARTMENT, MUMBAI AND/OR (II) THE ADMISSION OF ADD ITIONAL INCOME BY THE ASSESSEE IN STATEMENT RECORDED U/S 132(4) OF THE AC T ON ACCOUNT OF HIS INABILITY TO EXPLAIN THE GIFTS. THEREFORE, FACTUAL LY SPEAKING, WE FIND THAT THE ASSESSING OFFICER MADE NO MISTAKE IN REJECTING THE PLEA OF THE ASSESSEE OF HAVING RETURNED THE ADDITIONAL INCOME ON ACCOUNT OF IMPUGNED GIFTS FROM SHRI SUBHASH BHATIJAS FAMILY UNDER PROTEST. FOR ALL THE ABOVE SAID REASONS, WE THEREFORE AFFIRM THE ORDER OF THE AUTHORITIES BELOW AND ON THIS ASPECT ASSESSEE FAILS. 16. WITH REGARD TO THE GROUND OF APPEAL NO.1, THE R ELEVANT FACTS ARE AS FOLLOWS. IT WAS NOTICED BY THE ASSESSING OFFICER T HAT ASSESSEE ALONGWITH HIS ITA NO.1733/PN/2012 A.Y. 2008-09 FAMILY MEMBERS HAD RECEIVED GIFTS TOTALING TO RS.60 LACS DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 2004-05 FROM K HATRI FAMILY. IN THE COURSE OF SEARCH PROCEEDINGS, A STATEMENT OF SHRI C HANDARLAL PARASARAM CHHABRIYA WAS RECORDED ON 18.04.2007 WHEREIN A SPEC IFIC QUESTION WAS ASKED WITH REGARD TO SHRI JAGDISH KHATRI FROM WHOM THE ST ATED GIFTS WERE RECEIVED. IN THE COURSE SUCH STATEMENT, THE ASSESSEE COULD NO T PROVE ANY RELATION WHICH SHRI JAGDISH KHATRI AND ALSO COULD NOT PROVIDE HIS PHONE NUMBER OR HIS ADDRESS. THE ONLY POINT MADE BY THE ASSESSEE WAS T HAT HE KNEW ABOUT THE SHRI JAGDISH KHATRI WHEN HE MET HIM AT CERTAIN RELI GIOUS MEETING IN MUMBAI AND THAT SHRI JAGDISH KHATRI WAS FROM DUBAI. THE A SSESSING OFFICER FURTHER NOTICED THAT ON THE DATE ON WHICH THE GIFT DEED WAS EXECUTED BEFORE NOTARY, ASSESSEE WAS NOT IN MUMBAI BUT WAS IN KOLHAPUR. IT WAS ALSO NOTICED THAT THE PERSON WHO HAS WITNESSED THE SAID GIFT WAS ALSO UNK NOWN TO THE ASSESSEE. ON BEING SHOW-CAUSED AS TO WHY THE GIFT RECEIVED FR OM SHRI JAGDISH KHATRI FAMILY BE NOT TREATED AS BOGUS, ASSESSEE REFERRED T O THE GIFT DEED AND THE CONFIRMATION RELATING TO THE GIFTS. ASSESSEE ALSO FURNISHED A COPY OF THE PASSPORT OF SHRI JAGDISH KHATRI AND ALSO A COPY OF THE BANK STATEMENT THROUGH WHICH THE GIFT WAS STATED TO HAVE RECEIVED. ASSESS EE SUBMITTED THAT THE GIFTS WERE RECEIVED FROM SHRI JAGDISH KHATRI AS DIRECT RE MITTANCES FROM UAE, DUBAI FROM HIS NRE ACCOUNT. 17. THE ASSESSING OFFICER HAS NOT ACCEPTED THE PLEA OF THE ASSESSEE. FIRSTLY, ACCORDING TO THE ASSESSING OFFICER, IT WAS IMPROBABLE FOR A PERSON WHO WAS NOT REMOTELY RELATED TO THE ASSESSEE OR HIS FAM ILY MEMBERS TO GIVE THE GIFTS. THE ASSESSING OFFICER NOTICED THAT THE ASSE SSEE WAS NOT EVEN REMEMBERING THE BASIC DETAILS OF SHRI JAGDISH KHATR I AND THEREFORE IT WAS DIFFICULT TO ACCEPT THAT THERE WAS ANY RELATIONSHIP BETWEEN TWO. THE ASSESSING OFFICER FURTHER NOTICED THAT THERE WAS NO OCCASION FOR MAKING THE GIFT, A FACT WHICH IS NOT CHALLENGED BY THE ASSESSEE. THE ASSES SING OFFICER ALSO NOTICED THAT THERE WAS NO RECIPROCITY IN THE GIFTS AND FOR ALL THE ABOVE REASONS, HE HELD ITA NO.1733/PN/2012 A.Y. 2008-09 THAT GIFTS RECEIVED FROM SHRI JAGDISH KHATRI WAS LI ABLE TO BE ASSESSED AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. ACCORDI NGLY, THE ADDITION OF RS.10,00,000/- WAS MADE U/S 68 OF THE ACT IN THE HA NDS OF THE ASSESSEE. FOR THE AFORESAID REASONS AND ALSO THE REASONS TAKEN BY HIM WITH REGARD TO THE GIFTS FROM SHRI SUBHASH BHATIJA, THE CIT(A) HAS SUS TAINED THE ACTION OF THE ASSESSING OFFICER. 18. ON THIS ASPECT THE LEARNED COUNSEL FOR THE ASSE SSEE VEHEMENTLY POINTED OUT THAT THE INCOME-TAX AUTHORITIES HAVE MA DE THE ADDITION ON MERE DOUBTS WHEREAS THE MATERIAL PLACED ON RECORD IN THE SHAPE OF CONFIRMATION OF GIFTS, RECEIPT OF GIFT THROUGH A NRE ACCOUNT, COPY OF PASSPORT OF THE DONOR, ETC. CLEARLY DEMONSTRATE THE GENUINENESS OF THE NAT URE AND SOURCE OF THE GIFTS. ACCORDING TO THE LEARNED COUNSEL, THERE IS NO MATER IAL WITH THE ASSESSING OFFICER TO DISREGARD OR DOUBT THE DOCUMENTARY EVIDE NCE FURNISHED BY THE ASSESSEE AND THE EXPLANATION OF THE ASSESSEE HAS BE EN REJECTED ON MERE CONJECTURES AND SURMISES. FURTHER, THE LEARNED COU NSEL SUBMITTED THAT SUBSEQUENT TO THE ORDER OF THE CIT(A), THE SAID DON OR CONFIRMED THE FACTUM OF ADVANCING GIFT TO THE ASSESSEE IN THE MONTH OF APRI L, 2013. A COPY OF THE SAID COMMUNICATION WAS PLACED ON RECORD AND AN APPLICATI ON HAS BEEN FURNISHED IN TERMS OF RULE 29 OF THE INCOME TAX RULES, 1962 (IN SHORT THE RULES) FOR ADMISSION OF SUCH ADDITIONAL EVIDENCE. 19. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REP RESENTATIVE HAS RELIED ON THE ORDERS OF THE AUTHORITIES BELOW IN SUPPORT O F THE CASE OF THE REVENUE. 20. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. AT THE OUTSET, WE MAY STATE THAT ON THE ASPECT OF THE ONUS CAST ON TH E ASSESSEE IN TERMS OF SECTION 68 OF THE ACT, WE HAVE ALREADY DISCUSSED IN THE EARLIER PARAGRAPHS WHILE ADJUDICATING THE ADDITIONS ON ACCOUNT OF GIFT S FROM SHRI SUBHASH BHATIJAS FAMILY. IN-PRINCIPLE, THE LEGAL POSITION OUTLINED THEREIN BY US APPLIES IN ITA NO.1733/PN/2012 A.Y. 2008-09 THE PRESENT CASE ALSO. SO, HOWEVER, ONE HAS TO FAC TUALLY EXAMINE AS TO WHETHER OR NOT ASSESSEE HAS DISCHARGED THE BURDEN C AST ON HIM U/S 68 OF THE ACT IN RESPECT OF THE IMPUGNED TRANSACTION. 21. NOTABLY, EVEN WITH REGARD TO THE GIFTS RECEIVED FROM SHRI JAGDISH KHATRI FAMILY, THE ASSESSEE WAS PUT TO QUESTION IN THE COU RSE OF A STATEMENT RECORDED U/S 132(4) OF THE ACT AT THE TIME OF SEARCH. AT TH E TIME OF SEARCH, NO ADMISSION WAS MADE BY THE ASSESSEE WITH REGARD TO THE GIFTS F ROM SHRI JAGDISH KHATRI FAMILY THOUGH QUESTIONS WERE PUT TO HIM. IN THE RE TURNS OF INCOME FILED SUBSEQUENT TO THE SEARCH ALSO, ASSESSEE DID NOT ADM IT OR SURRENDER INCOME IN RELATION TO THE GIFTS FROM SHRI JAGDISH KHATRI FAMI LY. IN THE COURSE OF ASSESSMENT PROCEEDINGS, ASSESSEE REFERRED TO THE GI FT DEED, THE CONFIRMATION OF THE GIFTS, COPY OF PASSPORT OF THE DONOR, COPY O F THE BANK STATEMENT, THROUGH WHICH THE GIFT WAS RECEIVED, ETC. TO PROVE THE INGREDIENTS OF SECTION 68 OF THE ACT. THE ASSESSING OFFICER WAS NOT SATISFIE D PRIMARILY ON THE GROUND THAT ASSESSEE WAS NOT ABLE TO ESTABLISH THE GENUINE NESS OF THE TRANSACTION FOR VARIOUS INFIRMITIES NOTED BY HIM WHEN ASSESSEE WAS QUESTIONED ABOUT THE RELATIONSHIP, OCCASION OF THE GIFT AND OTHER DETAIL S OF THE DONOR. 22. IN OUR CONSIDERED OPINION, A PERUSAL OF THE ORD ERS OF THE AUTHORITIES BELOW REVEAL THAT THE INCOME-TAX AUTHORITIES HAVE B EEN OVERTLY INFLUENCED BY THE FACT THAT GIFTS RECEIVED FROM SHRI SUBHASH BHAT IJAS FAMILY HAVE BEEN FOUND TO BE LACKING IN BONAFIDES. IN-FACT, THE SAI D APPROACH IS NOT MERITED INASMUCH AS WHAT IS REQUIRED IS TO INDEPENDENTLY AP PRAISE THE MATERIAL AND EVIDENCE ON RECORD SO AS TO TEST THE EFFICACY OF TH E EXPLANATIONS FURNISHED BY THE ASSESSEE WITH RESPECT TO THE IMPUGNED GIFTS. P ERTINENTLY, THERE IS NO MATERIAL BROUGHT OUT BY THE REVENUE TO ESTABLISH TH AT GIFTS RECEIVED FROM SHRI JAGDISH KHATRI HAVE ALSO BEEN RECEIVED AS A DEVICE TO ACCOUNT FOR THE UNACCOUNTED INCOMES, AS WAS THE CASE WITH RESPECT T O GIFTS RECEIVED FROM SHRI SUBHASH BHATIJA. WE MAY ALSO POINT OUT HERE T HAT SO FAR AS THE GIFTS FROM ITA NO.1733/PN/2012 A.Y. 2008-09 SHRI SUBHASH BHATIJAS FAMILY IS CONCERNED THE DONO R CONFESSED THE DUBIOUS NATURE OF THE GIFTS WHILE WITH REGARD TO THE IMPUGN ED GIFTS FROM SHRI JAGDISH KHATRI FAMILY THERE IS NO SUCH EVIDENCE. EVEN IN T HE COURSE OF EXAMINATION OF THE ASSESSEE AT THE TIME OF SEARCH THERE IS NOTHING TO SUGGEST THAT ASSESSEE ACCEPTED THE GIFT FROM SHRI JAGDISH KHATRI FAMILY A S BEING DUBIOUS. THEREFORE, IN OUR CONSIDERED OPINION, IT WOULD MEET THE ENDS O F THE JUSTICE THAT THE IMPUGNED ISSUE IS REVISITED BY THE ASSESSING OFFICE R AS PER THE MATERIAL AND EVIDENCE WHICH THE ASSESSEE MAY SEEK TO FURNISH IN SUPPORT OF HIS RETURN OF INCOME, AS PER LAW. WE MAY HASTEN TO ADD HERE THAT OUR ACTION OF REMITTING THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER IS NO REFLECTION ON THE MERITS OF THE RIVAL STANDS AND THE ASSESSING OFFICER SHALL RE-APPRAISE THE ISSUE AFRESH UNINFLUENCED BY ANY OF OUR OBSERVATIONS AND AS PER LAW. OF COURSE, THE ASSESSING OFFICER SHALL ALLOW THE ASSESSEE A REASON ABLE OPPORTUNITY TO PUT- FORTH THE MATERIAL AND EVIDENCE IN SUPPORT OF HIS S TAND AND THEREAFTER THE ASSESSING OFFICER SHALL PASS AN ORDER AFRESH ON THI S ASPECT, AS PER LAW. 23. THUS, ON THIS ASPECT, ASSESSEE SUCCEEDS FOR STA TISTICAL PURPOSES. 24. IN THE LAST GROUND, THE PLEA OF THE ASSESSEE IS THAT THE LOWER AUTHORITIES HAVE ERRED IN NOT ALLOWING THE CREDIT FOR THE CASH SEIZED AT THE TIME OF SEARCH AS APPROPRIATION TOWARDS ADVANCE TAX LIABILITY AND COMPUTING THE INTEREST PAYABLE U/S 234A, 234B AND 234C OF THE ACT, UNJUSTL Y. 25. ON THIS ASPECT, THE LEARNED COUNSEL FOR THE ASS ESSEE PREFERRED TO THE PAPER BOOK WHEREIN IS PLACED CORRESPONDENCES WITH T HE INCOME-TAX AUTHORITIES WHEREBY ASSESSEE HAD REQUESTED FOR ADJU STMENT OF THE CASH SEIZED DURING THE SEARCH AGAINST THE TAX LIABILITY. THE L EARNED COUNSEL POINTED OUT THAT THE TAX LIABILITY U/S 234A, 234B AND 234C OF T HE ACT HAS BEEN COMPUTED WITHOUT ALLOWING THE REQUEST OF THE ASSESSEE FOR AP PROPRIATION OF CASH SEIZED AGAINST TAX LIABILITY. IN THIS CONTEXT, IT HAS BEE N POINTED OUT THAT A SIMILAR ISSUE ITA NO.1733/PN/2012 A.Y. 2008-09 WAS CONSIDERED BY THE TRIBUNAL IN THE CASE OF PUSPH ENDRA SUBHASHCHANDRA VS. ACIT VIDE ITA NO.1077/PN/2012 DATED 26.08.2013 WHEREBY SUCH PLEA OF THE ASSESSEE HAS BEEN ALLOWED. 26. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REP RESENTATIVE APPEARING FOR THE REVENUE HAS DEFENDED THE ACTION OF THE LOWE R AUTHORITIES BY POINTING OUT THAT THE ISSUE OF GRANTING CREDIT FOR CASH SEIZ ED AGAINST TAX LIABILITY IS AN ADMINISTRATION FUNCTION AND THE ASSESSEE MAY APPROA CH THE ADMINISTRATIVE AUTHORITIES. 27. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. ON THIS ASPECT, IT IS QUITE CLEAR THAT SIMILAR CONTROVERSY HAS BEEN CO NSIDERED BY PUNE BENCH OF THE TRIBUNAL IN THE CASE OF PUSPHENDRA SUBHASHCHAND RA (SUPRA) AND THE RELEVANT PORTION OF THE ORDER IS REPRODUCED HEREINA FTER :- 4. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTI ES AND PERUSED THE RECORD. THE FACTS ARE NOT IN DISPUTE. THE LEARNED COUNSEL PLACED HIS RELIANCE ON THE FOLLOWING TWO DECISIONS OF THE HON'BLE HIGH COURT OF BOMBAY (I) CIT, CENTRAL-I, MUMBAI VS. SHRI JYOTINDR A B. MODY IN INCOME TAX APPEAL NO. 3741 OF 2010 JUDGMENT DATED 21 ST SEPTEMBER, 2011 AND (II) CIT, CENTRAL-I, MUMBAI VS. JAFFERALI KASAMLAI RATTONSEY IN INCOME TAX APPEAL NO. 2059 OF 2011 JUDGMENT DATED 18 TH FEBRUARY, 2013. HE SUBMITS THAT THE ISSUE STANDS IN FAVOUR OF THE ASSESSEE BY THE ABOVE TWO D ECISIONS, MORE PARTICULARLY IN THE CASE OF MR. JAFFERALI KASAMLAI RATTONSEY (SU PRA). THE FACTS IN SAID CASE ARE IDENTICAL WITH THE ASSESSEES CASE. 5. WE HAVE ALSO HEARD THE LD. DR. HE RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. IN THE PRESENT CASE, THE CASH W AS SEIZED BY ISSUING THE REQUISITION WARRANT WHICH WAS ADMITTED BY THE ASSES SEE AS HIS INCOME IN THE STATEMENT RECORDED U/S. 132(4) AND IN THE SAID STAT EMENT THE ASSESSEE REQUESTED THE REVENUE AUTHORITIES TO ADJUST THE SAI D CASH AGAINST HIS TAX LIABILITY FOR THE A.Y. 2009-10. WE FURTHER FIND TH AT THE REQUISITION WARRANT WAS ISSUED ON 08-08-2008 AND CASH WAS SEIZED BY THE RPF WHICH WAS IN THEIR CUSTODY. THE SAID DATE IS ADMITTEDLY BEFORE THE FI RST DATE OF THE PAYMENT OF THE INSTALLMENT OF THE ADVANCE TAX FOR THE A.Y. 200 9-10 I.E. 15 TH SEPTEMBER, 2008. WE FIND THAT THE ONLY REASON GIVEN BY THE LD . CIT(A) IS THAT NO SPECIFIC APPLICATION WAS MADE AND HENCE, MERELY REQUESTING I N THE STATEMENT RECORDED U/S. 132 (4) IS NOT SUFFICIENT. 6. IN THE CASE OF SHRI JYOTINDRA B. MODY (SUPRA) TH E IDENTICAL ISSUE IS CONSIDERED BY THEIR LORDSHIPS. IN THE SAID CASE , IN THE SEARCH AND SEIZURE ACTION CASH AMOUNTING TO RS.18 LACS WAS TO BE SEIZE D. THE ASSESSEE ALSO PAID SUM OF RS.1.98 CRORES BY PAY ORDER DATED 31-03 -2007. THE ASSESSEE REQUESTED THAT THE CASH SEIZED OF RS.18 LACS AND PA Y ORDER AMOUNTING TO RS.1.98 CRORES PAID BY THE ASSESSEE BE ADJUSTED TOW ARDS THE ADVANCE TAX PAYABLE ON THE ADDITIONAL INCOME DECLARED BY THE AS SESSEE. DURING THE ITA NO.1733/PN/2012 A.Y. 2008-09 COURSE OF SEARCH IN THE SAID CASE ALSO THE ADDITION AL INCOME OFFERED BY THE ASSESSEE HAS BEEN ACCEPTED BUT WITHOUT GIVING THE B ENEFIT OF RS.18 LACS SEIZED DURING THE COURSE OF SEARCH AND RS.1.98 CROR E PAID BY THE ASSESSEE TOWARDS THE ADVANCE TAX. THE INTEREST WAS CHARGED U/S. 234A, 234B AND 234C OF THE INCOME-TAX ACT. THE TRIBUNAL DELETED T HE SAID INTEREST. THE REVENUE HAS CARRIED THE MATTER BEFORE THE HON'BLE H IGH COURT AND THE HON'BLE HIGH COURT DISMISSED THE APPEAL FILED BY THE REVENU E. THE OPERATIVE PART OF THE DECISION IS AS UNDER: WE SEE NO MERIT IN THE ABOVE CONTENTION, BECAUSE, ONCE THE ASSESSEE OFFERS TO TAX THE UNDISCLOSED INCOME INCLU DING THE AMOUNT SEIZED DURING THE SEARCH, THEN THE LIABILITY TO PAY ADVANCE TAX IN RESPECT OF THAT AMOUNT ARISES EVEN BEFORE THE COMPL ETION OF THE ASSESSMENT. SECTION 132B(1) (I) OF THE ACT DOES NO T PROHIBIT UTILIZATION OF THE AMOUNT SEIZED DURING THE COURSE OF SEARCH TO WARDS THE ADVANCE TAX PAYABLE ON THE AMOUNT OF UNDISCLOSED INCOME DEC LARED DURING THE COURSE OF SEARCH. IN THE PRESENT CASE, THE ASSESSE E, PRIOR TO THE LAST DATE FOR PAYMENT OF LAST INSTALLMENT OF ADVANCE TAX , HAD IN FACT BY HIS LETTER DATED 14 TH MARCH, 2007 REQUESTED THE ASSESSING OFFICER TO ADJ UST THE AMOUNTS TOWARDS THE EXISTING ADVANCE TAX LIABIL ITY. SINCE ADVANCE TAX LIABILITY IS TO BE COMPUTED AND PAID IN ACCORDA NCE WITH THE PROVISIONS OF THE ACT EVEN BEFORE THE COMPLETION OF THE ASSESSMENT, NO FAULT CAN BE FOUND WITH THE DECISIONS OF THE ITAT I N HOLDING THAT IN THE FACTS OF THE PRESENT CASE, THE AMOUNTS IN QUESTION WERE LIABLE TO BE ADJUSTED TOWARDS THE EXISTING ADVANCE TAX LIABILITY . 7. IN THE CASE OF JAFFERALI KASAMLAI RATTONSEY (SUP RA) RS.41 LACS WERE SEIZED. THE ASSESSEE GAVE THE STATEMENT ON 27 -07-2006 IN WHICH HE CATEGORICALLY STATED THAT THE SEIZED CASH MAY BE AD JUSTED AGAINST THE TAX LIABILITY ARISING OUT OF THE DISCLOSURE. THE ASSES SEE WAS LEVIED THE INTEREST U/S. 234A, 234B AND 234C DISCARDING THE REQUEST MADE BY HIM. THE MATTER WAS CARRIED TO THE TRIBUNAL AND THE TRIBUNAL DELETED TH E INTEREST LEVIED. THE DEPARTMENT CARRIED THE MATTER FURTHER BEFORE THE HO N'BLE HIGH COURT AND THE HON'BLE HIGH COURT CONFIRMED THE ORDER OF THE TRIBU NAL DELETING THE INTEREST LEVIED BY THE ASSESSING OFFICER TO THE EXTENT OF CA SH SEIZED RS.42 LACS. IN OUR OPINION, THE ASSESSEES CASE IS SQUARELY COVERED BY THE DECISION CITED (SUPRA). AS PER THE ASSESSMENT ORDER WE FIND THAT TOTAL INCOME TAX PAYABLE AS PER THE ASSESSMENT ORDER IS TO THE EXTENT OF RS.39, 53,215/- WHICH IS MORE LESS THAN THE AMOUNT OF CASH SEIZED BY THE DEPARTMENT. WE, ACCORDINGLY, ALLOW THE GROUNDS TAKEN BY THE ASSESSEE. 28. A PERUSAL OF THE AFORESAID WOULD REVEAL THAT AF TER CONSIDERING THE JUDGMENTS OF THE HONBLE BOMBAY HIGH COURT IN THE C ASE OF SHRI JYOTINDRA B. MODY (SUPRA) AND JAFFERALI KASAMLAI RATTONSEY (SUPR A) THE TRIBUNAL HELD THAT ASSESSEE WAS ENTITLED TO THE BENEFIT OF CASH SEIZED DURING THE COURSE OF SEARCH. IN THE PRESENT CASE, IT IS NOT DISPUTED BY THE DEPARTMENT THAT ASSESSEE MADE REQUEST TO THE ASSESSING OFFICER FOR ALLOWING CREDIT OF THE CASH SEIZED AGAINST THE TAX LIABILITY AND THEREFORE, IN OUR VIEW, FOLLOWING THE PRECEDENT IN THE CASE OF PUSPHENDRA SUBHASHCHANDRA (SUPRA), PLEA OF THE ASSESSEE IS JUSTIFIED. ITA NO.1733/PN/2012 A.Y. 2008-09 29. THE ARGUMENT OF THE LEARNED DEPARTMENTAL REPRES ENTATIVE THAT THE ASSESSEE OUGHT TO HAVE BEEN APPROACHED THE ADMINIST RATIVE AUTHORITIES BELOW, IN OUR VIEW, IS OF NO CONSEQUENCE INASMUCH A S THE PRIMARY PLEA OF THE ASSESSEE IS OF DENYING ITS LIABILITY TOWARDS PAYMEN TS OF INTEREST U/S 234A, 234B AND 234C OF THE ACT, WHICH CAN BE AGITATED IN APPELLATE PROCEEDINGS. IN COMING TO SUCH CONCLUSION, WE THEREFORE FOLLOW THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF PUSPHENDRA SUBHASHCH ANDRA (SUPRA) AND DIRECT THE ASSESSING OFFICER TO ALLOW APPROPRIATE RELIEF T O THE ASSESSEE. THE ASSESSING OFFICER SHALL ALLOW THE ASSESSEE A REASON ABLE OPPORTUNITY OF BEING HEARD AND THEREAFTER PASS AN ORDER AFRESH AS PER LA W ON THIS ASPECT. THUS, ON THIS GROUND ASSESSEE SUCCEEDS FOR STATISTICAL PURPO SES. 30. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO .1065/PN/2012 FOR ASSESSMENT YEAR 2004-05 IN THE CASE OF SHRI CHANDAR LAL PARASARAM CHHABRIYA IS PARTLY ALLOWED. 31. THE ISSUES ADJUDICATED BY US IN ABOVE APPEAL IN THE CASE OF SHRI CHANDARLAL PARASARAM CHHABRIYA IN ITA NO.1065/PN/20 12 FOR ASSESSMENT YEAR 2004-05, SUBSTANTIALLY COVERS THE ISSUES RAISE D IN OTHER APPEALS EXCEPT IN ITA NO. 1058/PN/2012, ITA NO.1068/PN/2012 AND ITA N O.1069/PN/2012 WHEREIN CERTAIN OTHER ISSUES HAVE ALSO BEEN RAISED WHICH WE PROCEEDED TO ADJUDICATE SEPARATELY. IN SO FAR AS THE ISSUES RAI SED IN OTHER APPEALS WERE SIMILAR TO THOSE CONSIDERED BY US IN ITA NO.1065/PN /2012 IN THE CASE OF SHRI CHANDARLAL PARASARAM CHHABRIYA FOR ASSESSMENT YEAR 2004-05 OUR DECISION IN THE AFORESAID APPEAL WOULD APPLY MUTATIS MUTANDIS IN OTHER APPEALS ALSO. 32. ITA NO.1058/PN/2012 : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEAL S), KOLHAPUR DATED 22.03.2012 WHICH, IN TURN, HAS ARISEN FROM AN ASSES SMENT ORDER DATED ITA NO.1733/PN/2012 A.Y. 2008-09 30.12.2009 PASSED BY THE ASSESSING OFFICER U/S 143( 3) OF THE ACT, PERTAINING TO THE ASSESSMENT YEAR 2008-09. 33. IN THIS APPEAL, THE ONLY ISSUE NOT COVERED BY O UR DECISION IN ITA NO.1065/PN/2012 IN THE CASE OF SHRI CHANDARLAL PARA SARAM CHHABRIYA FOR ASSESSMENT YEAR 2004-05 IS WITH REGARD TO AN ADDITI ON OF RS.94,100/- MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN IMMOVABLE PROP ERTY MADE U/S 69B OF THE ACT. IT EMERGES THAT THE ADDITION HAS BEEN MADE ON ACCOUNT OF DIFFERENCE IN VALUATION OF PROPERTY AS PER THE REPORT OF THE DEPA RTMENTAL VALUATION OFFICER (DVO) AND THE ACTUAL COST OF ACQUISITION DECLARED B Y THE ASSESSEE IN ITS BOOKS OF ACCOUNT. 34. IN THIS CONTEXT, WE FIND THAT THERE IS NO REFER ENCE TO ANY INCRIMINATING MATERIAL FOUND BY THE REVENUE AT THE TIME OF SEARCH WHICH WOULD NEGATE ANY INVESTMENT IN ACQUISITION OF PROPERTIES, NAMELY, GA T NO.132, FOR RS.1,13,500/- AND 15,000/- RESPECTIVELY. FURTHER IN THE ABSENCE OF BOOKS OF ACCOUNT HAVING BEEN REJECTED, THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF SARGAM CINEMA VS. CIT, (2010) 328 ITR 513 (SC) SUPP ORTS THE PLEA OF THE ASSESSEE THAT THE IMPUGNED ADDITION IS NOT WARRANTE D. 35. IN-FACT, IN THE ABSENCE OF ANY INCRIMINATING MA TERIAL DURING THE COURSE OF SEARCH, THE IMPUGNED ADDITION MADE MERELY ON THE BA SIS OF REPORT OF THE DVO WOULD NOT REFLECT ANY INVESTMENT BY THE ASSESSEE OV ER AND ABOVE THE STATED CONSIDERATION, AS HELD BY THE HONBLE DELHI HIGH CO URT IN THE FOLLOWING CASES : (I) CIT VS. ABHINAV KUMAR MITTAL (2012) 30 TAXMANN. COM 357 (DELHI); (II) CIT VS. SADHNA GUPTA (2013) 32 TAXMANN.COM 185 (DELHI); AND, (III) CIT VS. DINESH JAIN HUF (2012) 25 TAXMANN.COM 550 (DELHI). ITA NO.1733/PN/2012 A.Y. 2008-09 36. FOLLOWING THE AFORESAID DISCUSSION, WE THEREFOR E DIRECT THE ASSESSING OFFICER TO DELETE THE IMPUGNED ADDITION. ON THIS GR OUND ASSESSEE SUCCEEDS. 37. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO .1058/PN/2012 FOR ASSESSMENT YEAR 2008-09 IN THE CASE OF SHRI PARASAR AM ACHANTRAI CHHABRIYA IS PARTLY ALLOWED. 38. ITA NOS.1068 & 1069/PN/2012 : BOTH THE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), KOLHAPUR DATED 26.03.2012 WHICH, IN TURN, HAS ARISE N FROM RESPECTIVE ASSESSMENT ORDERS DATED 30.12.2009 PASSED BY THE AS SESSING OFFICER U/S 143(3) R.W.S. 153A(B) OF THE ACT, PERTAINING TO THE ASSESSMENT YEARS 2007-08 AND 2008-09. 39. IN BOTH THE APPEALS, THE ONLY OTHER ISSUE NOT C OVERED BY OUR DECISION IN ITA NO.1065/PN/2012 IN THE CASE OF SHRI CHANDARLAL PARASARAM CHHABRIYA FOR ASSESSMENT YEAR 2004-05 IS WITH REGARD TO ADDITIONS OF RS.1,05,197/- AND RS.1,32,817/- RESPECTIVELY ON ACCOUNT OF GROSS PROF IT ON UNRECORDED SALES. THE SAID ADDITION HAS PRIMARILY BEEN MADE ON ACCOUN T OF UNDISCLOSED INCOME DISCLOSED IN THE STATEMENT U/S 132(4) OF THE ACT ON ACCOUNT OF UNRECORDED SALES OF M/S REGAL WINES, WHICH IS A PROPRIETARY CO NCERN OF THE ASSESSEE CARRYING ON LIQUOR BUSINESS. 40. IN ASSESSMENT YEAR 2007-08, IT WAS NOTICED THAT A DIARY WAS SEIZED WHICH INDICATED UNRECORDED SALES OF RS.9,39,905/- F OR THE PERIOD 03.10.2006 TO 31.03.2007 AND ASSESSEE ADMITTED TO THE SAID UNRECO RDED SALES AND PROFIT ON SUCH SALES WAS DETERMINED @ 7.8% I.E. RS. 73,035/-. FURTHER, AN AMOUNT OF 5,000/- WAS CONSIDERED AS SEED CAPITAL FOR THE SAID UNRECORDED SALES. ACCORDINGLY, AN AMOUNT OF RS.78,035/- WAS ADMITTED AS UNEXPLAINED INCOME IN THE STATEMENT RECORDED U/S 132(4) OF THE ACT AND TH E SAME WAS ALSO OFFERED IN ITA NO.1733/PN/2012 A.Y. 2008-09 THE RETURN OF INCOME FILED. THE ASSESSING OFFICER WAS NOT SATISFIED, AS ACCORDING TO HIM, ASSESSEE WOULD HAVE MADE UNRECORD ED SALES EVEN FOR THE BALANCE PERIOD OF THE YEAR, THOUGH THE DIARY SEIZED DID NOT SHOW SUCH UNRECORDED SALES. THE ASSESSING OFFICER MADE A FUR THER ADDITION OF RS.1,94,313/- ON THIS ASPECT APPLYING A GROSS PROFI T RATE OF 15%. THE CIT(A) SUSTAINED THE ADDITION IN-PRINCIPLE BUT SCALED IT D OWN TO RS.1,05,197/- BY TAKING GROSS PROFIT RATE @ 10%. IN OUR CONSIDERATION OPIN ION, THERE IS NO JUSTIFICATION FOR THE IMPUGNED ADDITION INASMUCH THERE IS NO MATE RIAL FOUND IN THE COURSE OF SEARCH TO SHOW THAT ANY UNRECORDED SALES WERE MADE BY THE ASSESSEE FOR A PERIOD OTHER THAN 03.10.2006 TO 31.03.2007. THEREF ORE, IN OUR VIEW, THE AFORESAID ADDITION IS UNWARRANTED AND IS HEREBY DIR ECTED TO BE DELETED. THUS, THE APPEAL OF THE ASSESSEE IN ITA NO.1068/PN/2012 F OR ASSESSMENT YEAR 2007-08 IS PARTLY ALLOWED. 41. IN ASSESSMENT YEAR 2008-09, A SIMILAR ADDITION WAS WORKED OUT WHICH ALSO DESERVES TO BE DELETED HAVING REGARD TO OUR DE CISION IN ASSESSMENT YEAR 2007-08 IN THE ABOVE PARAGRAPH. THUS, THE APPEAL O F THE ASSESSEE IN ITA NO.1069/PN/2012 FOR ASSESSMENT YEAR 2008-08 IS PART LY ALLOWED. 42. RESULTANTLY, THE CAPTIONED APPEALS OF THE ASSES SEE ARE PARTLY ALLOWED, AS ABOVE. THE ABOVE DECISION WAS PRONOUNCED IN THE OPEN COURT AT THE CONCLUSION OF THE HEARING IN THE PRESENCE OF BOTH T HE PARTIES ON 31 ST JANUARY, 2014. SD/- SD/- (SHAILENDRA KUMAR YADAV) (G . S. PANNU) JUDICIAL MEMBER ACCOUNT ANT MEMBER PUNE, DATED : 31 ST JANUARY, 2014 SUJEET ITA NO.1733/PN/2012 A.Y. 2008-09 COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A), KOLHAPUR; 4) THE CIT, KOLHAPUR; 5) THE DR, A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// SR. PRIVATE SECRETARY I.T.A.T., PUNE