Appeal Details
Counselvise Citation
[2010] 136 COUNSELVISE.COM (IT) 0121 (ITAT-AHMEDABAD)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
1 year(s) 4 month(s) 23 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
01-09-2010
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
A
Next Hearing Date
12-08-2010
Assessment Year
2005-2006
Appeal Filed On
08-04-2009
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL, AHMEDABAD A BENCH, BEFORE SHRI BHAVNESH SAINI, J.M. AND SHRI N. S. SAI NI, A.M . ITA NO.1078/AHD/2009 A. Y.: 2005-06 M/S. TRIDENT CREATION PVT. LTD., UPPER FLOOR, SATKAR BUILDING, C. G. ROAD, ELLISBRIDGE, AHMEDABAD VS THE D. C. I. T., CENTRAL CIRCLE 1(1), AHMEDABAD PA NO. AAACT 7979 Q (APPELLANT) (RESPONDENT) FOR ASSESSEE: SHRI SUNIL H. TALATI, AR FOR DEPARTMENT: SHRI ANIL KUMAR, CIT DR O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF T HE LEARNED CIT (A) I, AHMEDABAD DATED 27-02-2009 FOR ASSESSMENT YEAR 2005-06 ON THE FOLLOWING GROUNDS: 1. THE LEARNED C. I. T. (APPEALS) HAS ERRED IN CONFIRMING THE ADDITION OF RS.1,03,88,000/- ON ACCO UNT OF UNEXPLAINED INVESTMENT AS PER THE PROVISIONS OF SEC TION 69-B OF THE I. T. ACT. IT IS SUBMITTED THAT THE ADD ITION IS TOTALLY UNJUSTIFIED ON FACTS AND CIRCUMSTANCES OF T HE CASE AND THE SAME BE DELETED. 1.1 WITHOUT PREJUDICE TO THE ABOVE THE LEARNED C. I . T. (APPEALS) HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER RELYING ON VARIOUS EVIDENCES AND CASES ITA NO.1078/AHD/2009 M/S. TRIDENT CREATION PVT. LTD. VS DCIT, CC- 1(1), AHMEDABAD. 2 OF THE OTHER PERSONS, WHICH ARE NOT AT ALL APPLICAB LE TO THE APPELLANTS FACTS AND CASE, THERE IS NO EVIDENCE TO SHOW THAT THE APPELLANT COMPANY HAS PAID ANY UNACCOUNTED AMOUNT. IN VIEW OF THESE FACTS THE ADDITION MADE AN D CONFIRMED IS NOT AT ALL JUSTIFIED, ILLEGAL AND THE SAME BE DELETED. 1.2 IT IS SUBMITTED THAT, THE APPELLANT COMPANY HAS DENIED OF HAVING MAKING ANY CASH PAYMENTS FOR BOOKI NG OF OFFICES/SHOPS AND HAS STATED THAT THE AMOUNT PAI D THROUGH CHEQUE BASED ON MOU IS ONLY THE CORRECT AND TRUE PRICE FOR PURCHASE OF THE SAID OFFICES/SHOPS. IT IS SUBMITTED THAT ON THE BASIS OF THESE EVIDENCES WHIC H ARE FINAL AND UNCHALLENGEABLE, NO ADDITION CAN BE MADE BY RELYING ONLY ON CERTAIN LOOSE PAPERS WHICH ARE AGAI N NOT RELEVANT TO ANY UNEXPLAINED PAYMENT OR TRANSACTION. IN VIEW OF THESE FACTS AND EVIDENCES THE ADDITION MADE BE DELETED. 2. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CONSIDER ED THE MATERIAL AVAILABLE ON RECORD. 3. BRIEFLY, THE FACTS OF THE CASE AS PER ASSESSMENT ORDER ARE THAT THE ASSESSEE, WHICH IS A PRIVATE LIMITED COMPANY, F ILED ITS RETURN OF INCOME ON 31-07-2005 DECLARING TOTAL INCOME AT RS.3 8,51,940/-. THE CASE WAS TAKEN UP FOR SCRUTINY. THE A O NOTICED THA T CONSEQUENT UPON SEARCH U/S 132 OF THE IT ACT IN DHARMADEV BUIL DERS GROUP, THE RESIDENTIAL HOUSE OF SHRI DEEPAK A. THAKKAR, PARTNE R OF M/S. DEV ENTERPRISE, WAS ALSO COVERED ON 09-02-2005. DURING THE COURSE OF SEARCH, TWO LOOSE PAPER FILES/ NOTE BOOK MARKED AS ANNEXURE A-10 AND A 11 TO THE PANCHNAMA WERE SEIZED. ON PERUSIN G OF NOTING ON PAGE 25 & 26 OF A-10 AND PAGE 30 OF A-11, IT WAS NO TICED BY THE A O THAT THE ASSESSEE HAD PURCHASED SHOPS/OFFICE NOS. 1 , 2 AND 3 AT FIRST ITA NO.1078/AHD/2009 M/S. TRIDENT CREATION PVT. LTD. VS DCIT, CC- 1(1), AHMEDABAD. 3 FLOOR OF DEV COMPLEX, NEAR PARIMAL GARDEN ON C. G. ROAD, AHMEDABAD. THIS FACT HAS ALSO BEEN ADMITTED BY SHRI JATIN G. PAREKH, MANAGING DIRECTOR OF THE COMPANY, IN HIS ST ATEMENT U/S 131 RECORDED ON 18-02-2005. FURTHER, THE SEIZED PAPERS REFLECTED THAT FOR BOOKING/PURCHASE OF THE SAID SHOPS/OFFICES, FOLLOWI NG PAYMENTS WERE MADE: S.NO . ANN. PG PROPERTY NAME DATE CASH CHEQUE 1 A-10 25 FF-1,2,3 JATIN PAREKH/TRIDENT INDIA 26-2-04 100000 0 2 A-10 25 FF-1,2,3 JATIN PAREKH/TRIDENT INDIA 10-3-04 1500000 0 3 A-10 25 FF-1,2,3 JATIN PAREKH/TRIDENT INDIA 10-3-04 1000000 0 4 A-10 25 FF-1,2,3 JATIN PAREKH/TRIDENT INDIA 10-3-04 500000 0 5 A-10 25 FF-1,2,3 JATIN PAREKH/TRIDENT INDIA 29-3-04 500000 0 6 A-10 25 FF-1,2,3 JATIN PAREKH/TRIDENT INDIA 15-4-04 500000 0 7 A-10 25 FF-1,2,3 JATIN PAREKH/TRIDENT INDIA 19-4-04 0 1500000 8 A-10 25 FF-1,2,3 JATIN PAREKH/TRIDENT INDIA 20-4-04 500000 0 9 A-10 25 FF-1,2,3 JATIN PAREKH/TRIDENT INDIA 26-4-04 300000 0 10 A-10 25 FF-1,2,3 JATIN PAREKH/TRIDENT INDIA 27-4-04 1000000 0 11 A-10 25 FF-1,2,3 JATIN PAREKH/TRIDENT INDIA 5-5-04 2000000 0 12 A-10 25 FF-1,2,3 JATIN PAREKH/TRIDENT INDIA 6-5-04 300000 0 13 A-10 25 FF-1,2,3 JATIN PAREKH/TRIDENT INDIA 6-5-04 300000 0 14 A-10 25 FF-1,2,3 JATIN PAREKH/TRIDENT INDIA 13-5-04 400000 0 15 A-10 25 FF-1,2,3 JATIN PAREKH/TRIDENT INDIA 15-5-04 0 1000000 16 A-11 30 FF-1,2,3 JATIN PAREKH/TRIDENT INDIA 16-5-04 0 1000000 ITA NO.1078/AHD/2009 M/S. TRIDENT CREATION PVT. LTD. VS DCIT, CC- 1(1), AHMEDABAD. 4 17 A-10 25 FF-1,2,3 JATIN PAREKH/TRIDENT INDIA 21-5-04 0 600000 18 A-11 30 FF-1,2,3 JATIN PAREKH/TRIDENT INDIA 9-6-04 0 500000 19 A-10 26 FF-1,2,3 JATIN PAREKH/TRIDENT INDIA 14-6-04 100000 0 20 A-10 26 FF-1,2,3 JATIN PAREKH/TRIDENT INDIA 30-6-04 500000 0 21 A-10 26 FF-1,2,3 JATIN PAREKH/TRIDENT INDIA 21-7-04 3388000 0 22 A-10 26 FF-1,2,3 JATIN PAREKH/TRIDENT INDIA 26-7-04 200000 0 23 A-11 30 FF-1,2,3 JATIN PAREKH/TRIDENT INDIA 26-10-04 0 500000 TOTAL 13088000 5100000 THE A O NOTICED THAT PAGE NOS. 24 AND 26 OF ANNEXUR E A-10 RECORDED NOTINGS OF THE CASH PAYMENTS OF RS.1,30,88 ,000/-. THE SAME WERE RECORDED AGAIN AT PAGE NO.25 OF ANNEXURE A-10. THE A O ALSO NOTICED THAT ON PAGE NOS. 24 TO 26 OF ANNEXURE A-10, NOTINGS OF PRIMARY TRANSACTIONS WERE MADE AND FROM THESE PAPER S, POSTINGS WERE MADE IN LEDGER ACCOUNTS OF DIFFERENT PURCHASER S MAINTAINED ON DIFFERENT PAGES OF ANNEXURE A-11. THE ASSESSEES LE DGER ACCOUNT PREPARED AT PAGE NO.30 OF ANNEXURE A-11. AFTER CORR ELATING THE ENTRIES AT PAGES 24 TO 26 OF ANNEXURE A-10 AND PAGE 30 OF ANNEXURE-11, THE A O FOUND THAT THE ASSESSEE HAD MA DE IN ALL CASH PAYMENT OF RS.1,30,88,000/- ON DIFFERENT DATES AS P ER THE CHART ABOVE. THE A O, THEREFORE, ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE TO EXPLAIN THE SOURCE OF INVESTMENT OF THIS CASH PA YMENT AND THE ACCOUNTING TREATMENT OF THESE TRANSACTIONS IN THE B OOKS OF ACCOUNT. IN REPLY, THE ASSESSEE COMPANY DENIED HAVING MADE ANY CASH PAYMENT AND FILED WRITTEN SUBMISSION ON 18-12-2006, WHICH H AS BEEN REPRODUCED BY THE A O IN PARA 2.1 OF THE ASSESSMENT ORDER ON PAGE ITA NO.1078/AHD/2009 M/S. TRIDENT CREATION PVT. LTD. VS DCIT, CC- 1(1), AHMEDABAD. 5 3 TO 5. THE A O, AFTER CONSIDERING THE SUBMISSION A ND SEIZED MATERIAL CAME TO THE CONCLUSION THAT THE ASSESSEE HAD MADE C ASH PAYMENT OF RS.1,30,88,000/- FOR PURCHASE OF SHOP NOS. 1, 2 AND 3 AND ADDED THE SAME AS INCOME OF THE ASSESSEE CONSIDERING IT AS UN EXPLAINED INVESTMENT U/S 69B OF THE IT ACT. WHILE MAKING THE ADDITION, THE A O HAS HELD THAT THE DOCUMENTS IN THE FORM OF ANNEXURE A-10 AND A-11 ARE IMPORTANT PIECE OF EVIDENCE FOR MAKING THE ADDI TION IN THE HANDS OF THE ASSESSEE. THE A O HAS ALSO BROUGHT ON RECORD COMPARABLE CASES OF OTHER PURCHASERS OF SHOPS/OFFICES IN THE S AME COMPLEX, WHO HAVE ADMITTED TO HAVE GIVEN CASH PAYMENTS. THE A O RELIED ON THE ADMISSION MADE BY OTHER OWNERS/INVESTORS IN THIS PR EMISES, WHO HAD PURCHASED SHOPS AND CAME TO THE CONCLUSION THAT WHE N THESE OTHER PERSONS HAVE ADMITTED ABOUT HAVING MADE CASH PAYMEN T AND HAVE ALSO OFFERED SUCH AMOUNT FOR TAXATION IN THEIR INCO ME TAX RETURNS, THE SAME TREATMENT SHOULD EQUALLY APPLY TO THE ASSESSEE S CASE ALSO. THE A O HAS ALSO STATED THAT PREVAILING PRACTICE OF PAYING ON MONEY SHOULD BE CONSIDERED EVEN IF THE PURCHASER DENIES S UCH PAYMENT. RELYING ON CERTAIN JUDGMENT MENTIONED ON PAGES 7 AN D 8 OF THE ASSESSMENT ORDER, THE A O HAS CONCLUDED THAT AS LOO SE PAPERS WERE FOUND OUT FROM THE BUILDER/SELLER OF THE PROPERTY, IT WAS SUFFICIENT EVIDENCE TO ADD THE SAME AS UNEXPLAINED INVESTMENT OF THE ASSESSEE. 4. THE ASSESSEE CHALLENGED THE ADDITION BEFORE THE LEARNED CIT (A) AND IT WAS ARGUED THAT NO SUCH CASH PAYMENT OR ANY ON MONEY OF ANY NATURE WHATSOEVER HAS BEEN PAID. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO FILED DETAILED WRITTEN SUBMISSIONS WH ICH HAVE BEEN ITA NO.1078/AHD/2009 M/S. TRIDENT CREATION PVT. LTD. VS DCIT, CC- 1(1), AHMEDABAD. 6 PLACED ON FILE AND THAT PERUSAL OF THE SAME SHOWS T HAT THE ASSESSEE HAS RAISED ALL THOSE POINTS ONCE AGAIN WHICH HAVE B EEN SUBMITTED BY IT BEFORE THE A O AS INCORPORATED IN PARA 2.1 OF TH E ASSESSMENT ORDER. IN BRIEF, THE ASSESSEE HAS OBJECTED TO THE ADDITION ON THE BASIS OF THE FOLLOWING POINTS: (A) THE APPELLANT COMPANY HAS DENIED OF HAVING MADE ANY CASH PAYMENTS FOR BOOKING OF OFFICES/SHOPS AND THAT AMOUNT PAID THROUGH CHEQUE BASED ON AGREEMENT IS ONLY THE CORRECT AND TRUE PRICE FOR PURCHASES OF THE SAID OFFICES/SHOPS. (B) THE LOOSE PAPERS, ON THE BASIS OF WHICH THE ADD ITION HAS BEEN MADE, DO NOT MENTION ON MONEY HAVING BEEN PAID BY TRIDENT CREATION PVT. LTD, THE APPELLA NT COMPANY. (C) THE COPY OF JANTRI (COPY OF INDEX) FROM THE R EGISTRAR OF STAMP AUTHORITY AS FILED BY THE APPELLANT SHOWS PREVAILING MARKET RATE OF SUCH OFFICES FACILITY AT RS.1500/- PER SQ. FT. IN MAY 2006 (1293 PER SQ. FT. FOR SHOP TO RS.1,847/- PER SQ. FT. FOR SHOP ON GROUND FLOOR). AS AGAINST THIS, AS EARLY AS 5 TH MAY, 2004 I.E. TWO YEARS BEFORE, THE APPELLANT PURCHASED THE SHOPS @ 1450 PER SQ. FT. THE SHOP IS IN THE FIRST FLOOR, WHERE THE PRICES ARE LESSER BY 30% VIS A VIS THE SHOPS SITUATED IN THE GROUND FLOOR. (D) THE MOU DATED 5/5/04 CLEARLY MENTIONS THAT ALL THESE PROPERTIES WERE PURCHASED AT RS.60.40 LAKHS AND THEREFORE THERE IS NO QUESTION OF CASH PAYMENT. (E) ONE-SIDED CONFIRMATION OF RECEIPT OF ON MONEY CANNOT BE THE BASIS FOR MAKING ADDITION UNTIL AND UNLESS T HERE IS CORROBORATING EVIDENCES. ITA NO.1078/AHD/2009 M/S. TRIDENT CREATION PVT. LTD. VS DCIT, CC- 1(1), AHMEDABAD. 7 (F) SHRI JATIN PARIKH THE MNG. DIRECTOR OF THE COMP ANY, IN HIS STATEMENT RECORDED U/S. 131 ON 18/2/05 HAS STAT ED THAT NO CASH PAYMENT HAS BEEN MADE TO M/S. DEV ENTERPRISE OR TO ANY THAKKAR BROS. WHATSOEVER FOR BOOKING OF OFFICES/SHOPS. (G) THE MOU WAS SIGNED WITH SHRI SANJARY THAKKAR AN D NOT WITH SHRI DIPAK THAKKAR, FROM WHOSE PREMISES TH E LOOSE PAPERS HAVE BEEN FOUND. (H) MR. DEEPAK THAKKAR HAS NOT CONFIRMED IN ANY STATEMENT BEFORE ANY INCOME TAX AUTHORITY THAT HE H AS RECEIVED ANY CASH PAYMENT FROM THE APPELLANT COMPANY. EVEN I. T. DEPARTMENT HAS NOT GIVEN THE APPELLANT ANY COPY OF THE STATEMENT RECORDED OF MR. DEEPAK THAKKAR SUGGESTING SUCH CASH PAYMENT. WITHOUT ANY CONFIRMING STATEMENT OR CROSS-EXAMINATI ON NO BLIND RELIANCE CAN BE PLACED ON SUCH LOOSE NOTIN G. (I) NOWHERE THE SIGNATURES, CHITTY OR ANY NOTING HA S BEEN FOUND OUT MENTIONING ANY CASH PAYMENT HAVING BEEN MADE BY THE APPELLANT. (J) ENTIRE TRANSACTION OF PURCHASE OF PROPERTY HAS BEEN ENTERED INTO WITH TRIDENT CREATION PVT. LTD. ONLY. TRIDENT (INDIA) LTD. HAS NOT BEEN INVOLVED AT ALL E XCEPT INITIAL PAYMENT, WHICH HAVE BEEN PAID BACK. FINAL POSSESSION LETTER, ALLOTMENT LETTER AND SHARE CERTI FICATES ARE IN THE NAME OF TRIDENT CREATION PVT. LTD. ONLY. (K) THE DEPARTMENT HAS TAKEN IMMEDIATE ACTION OF SU RVEY AT THE BUSINESS PREMISES OF THE APPELLANT COMPANY, WHEREIN ALSO THE SURVEY PARTY THOROUGHLY VERIFIED ASSESSEES PREMISES AND RECORDS. NO RECEIPTS OR NO PROMISSORY NOTES OR ANY DOCUMENT SHOWING CASH PAYMENT WAS FOUND OUT. (L) IT HAS NOT BEEN MENTIONED IN THE SAID NOTING IN THE LOOSE PAPER THAT ACTUALLY CASH IS RECEIVED BY THE DEVELOPER. IT IS ONLY A COLUMN CASH DRAWN BY MR. ITA NO.1078/AHD/2009 M/S. TRIDENT CREATION PVT. LTD. VS DCIT, CC- 1(1), AHMEDABAD. 8 DEEPAK THAKKAR OR HIS FIRM ON HIS OWN WITHOUT INSTRUCTION OR KNOWLEDGE OR CONFIRMATION OF THE APPELLANT. IT MAY BE HIS PLAN OR DESIRE TO ASK FROM THE CONCERNED PARTIES MONEY TO BE RECEIVED IN CASH. HE MAY HAVE DEMANDED SUCH PAYMENTS FROM SOME PARTIES OR FROM ASSESSEE COMPANY; BUT THERE IS NO NOTING AS SUCH SPECIFICALLY STATING THAT CASH PAYME NT HAS BEEN MADE BY THE APPELLANT OR SO MUCH CASH HAS BEEN ACTUALLY RECEIVED BY THE DEVELOPER. (M) WHILE DEALING WITH THE OBSERVATION OF THE ASSES SING OFFICER THAT ON-MONEY PAYMENT IS A NORMAL PRACTICE, THE A. R. ARGUED THAT THIS MAY BE HEARSAY THAT ON- MONEY PAYMENT IS A NORMAL PRACTICE IN SOME AREA, SOME CITY OR SOME BUILDINGS OR SOME BUILDERS BUT TH IS IS NOT ALWAYS TRUE AS A UNIVERSAL FACT. THERE ARE BUILDINGS, WHO ARE PUBLISHING THE RATE IN NEWSPAPER S AND IN THEIR BROACHERS. AS FOR THE APPELLANT COMPAN Y, IT WAS THE FIRST BUYER WHEN THE SCHEME WAS LAUNCHED AND OBVIOUSLY, AS THE INITIAL SALE, THE SELLER WOUL D CHARGE LESSER PRICE THAN THE OTHERS. THIS ASPECT AN D FACTOR SHOULD ALSO BE KEPT IN MIND WHILE COMPARING THE CASES OF OTHERS, WHO HAVE DISCLOSED THE INCOME WHIC H COULD BE FOR VARIOUS OTHER REASONS ALSO, BEST KNOWN TO EACH SUCH INDIVIDUAL ASSESSEE. (N) IT HAS BEEN SUBMITTED THAT MERELY BECAUSE OUT O F SO MANY, ONLY A FEW OF THEM HAVE DISCLOSED THE CASH PAYMENT AS THEIR UNDISCLOSED INCOME, IT DOES NOT AUTOMATICALLY BECOME THE FACT THAT THE ASSESSEE ALS O HAS PAID CASH AS PER THE AMOUNT MENTIONED BY THE BUILDER IN HIS RECORD. 4.1 THE ASSESSEE HAS ALSO EXPLAINED THE SEQUENCE OF THE EVENTS AND DEVELOPMENTS IN THE CASE AS UNDER: (A) INITIALLY TRIDENT (INDIA) LTD. ENTERED INTO AN AGREEMENT WITH DEV ENTERPRISE AND THAT TOO WITH MR. SANJAY THAKKAR AND NOT WITH MR. DEEPAK ITA NO.1078/AHD/2009 M/S. TRIDENT CREATION PVT. LTD. VS DCIT, CC- 1(1), AHMEDABAD. 9 THAKKER, CLEARLY AGREEING IN WRITING THAT THE COMPANY HAS AGREED TO PURCHASE SHOP/OFFICE NO.1, 2 AND 3, ADMEASURING 4902 SQ. F. SUPER BUILT UP AREA (4167 SQ. FT. CARPET AREA) AT TOTAL RS.60,40,302/- WHICH COMES TO RS.1,450/- PER SQ. FT. OF CARPET AREA. THIS AGREEMENT WAS ENTERED AS EARLY AS IN 5 TH MAY, 2004. EVEN NOW THE EXISTING RATE OF OFFICE ON C. G. ROAD IS IN THE VICINITY OF RS.1,500/- PER SQ. FT., WHICH CAN BE VERIFIED FROM A REGISTERED VALUER OR FROM ANY OTHER DEVELOPER. THE AGREEMENT MENTIONS THAT THIS AMOUNT DOES NOT INCLUDE RS.100/- PER SQ. FT. TO BE PAID TO AEC/MAINTENANCE ADDITIONALLY. THE AGREEMENT FURTHER MENTIONS VARIOUS OTHER CLAUSES STATING THE EXPENDITURE TO BE INCURRED, POSSESSION TO BE GIVEN AT WHAT TIME ETC. (B) HOWEVER, BEFORE THE FINAL PAYMENT OF ANOTHER RS.19.40 LAKHS COULD BE MADE, THE DEVELOPER MR. SANJAY THAKKAR REQUESTED THE ASSESSEE COMPANY THAT THEY HAVE CHANGED THEIR STATURE AND NOW THE SALE WILL NOT BE FROM DEV ENTERPRISE BUT FROM AADARSH INDUSTRIES & INVESTMENT PVT. LTD. THE SAID FACT ALSO STATED BY STATEMENT RECORDED U/S 131 ON 18/2/2005 OF SHRI JATIN G. PAREKH. DUE TO THIS A REVISED M. O. U. WAS EXECUTED BETWEEN THE NEW SELLER, NAMELY AADARSH INDUSTRIES & INVESTMENT PVT. LTD. AND TRIDENT CREATIONS PVT. LTD. BEING NEW AND CORRECT BUYER. (C) EFFECTIVELY BOTH THE BUYER AND SELLER AS SUCH G OT CHANGED BUT THE M. O. U. REMAINED UNTOUCHED AND UNCHANGED ON RATE AND ON AREA. THIS WAS ALSO CONFIRMED BY MR. JATIN PAREKH BEFORE THE A. D. I. I N THE POST-SEARCH ENQUIRY. COMPLETE DETAILS OF PAYMENTS MADE INITIALLY BY TRIDENT (INDIA) LTD., ON ALTERATION OF THE UNDERSTANDING OF THE SELLER AND BUYER, AMOUNTS RETURNED BACK THROUGH CHEQUES FORM DEV ENTERPRISE TO TRIDENT (INDIA) LTD. FRESH CHEQUES PAID BY TRIDENT CREATIONS PVT. LTD. TO NEW ITA NO.1078/AHD/2009 M/S. TRIDENT CREATION PVT. LTD. VS DCIT, CC- 1(1), AHMEDABAD. 10 SELLER AADARSH INDUSTRIES & INVESTMENT PVT. LTD. HAVE BEEN DULY FILED BEFORE THE A. O.. THE ASSESSEE RELIED ON THE FOLLOWING DECISIONS: (1) ADDL. CIT VS. LATA MANGESHKAR 97 ITR 696 (2) CIT VS. M. K. BROTHERS 53 CTR 228 (163 ITR 249) (3) ACIT VS PRABHAT OIL MILL 52 TTJ 533 (4) CBI VS V. C. SHUKLA 3 SCC 410 THE ASSESSEE FURTHER ARGUED THAT IN ALL THESE CASES , IT HAS BEEN HELD THAT MAINLY BECAUSE SOME LOOSE PAPERS OR NOTING FOU ND OUT FROM THE THIRD PARTY MENTIONED THE NAME OF THE ASSESSEE, AD DITIONS CANNOT BE MADE UNLESS THERE ARE CONCRETE CORROBORATIVE EVIDEN CE AVAILABLE SHOWING THE ASSESSEE HAVING MADE SUCH INVESTMENT OR RECEIVED SUCH UNACCOUNTED INCOME. IT HAS BEEN HELD IN ALL TH ESE CASES THAT THE A O MUST BRING ON RECORD SOME CORROBORATIVE MATERIA L TO PROVE THAT THE ASSESSEE HAD ACTUALLY MADE SUCH UNEXPLAINED INV ESTMENT. 4.2 FURTHER, VIDE ORDER SHEET ENTRY DATED 29-07-200 8, THE ASSESSEE WAS ASKED TO FILE ITS CLARIFICATION ON THE FOLLOWIN G POINTS VIZ: (A) DETAILS ABOUT THE CHANGE OF PARTIES FOR SALE A ND PURCHASE. (B) THE CONNECTION BETWEEN TRIDENT (INDIA) LTD. AND TRIDENT CREATION PVT. LTD. (C) THE LOOSE PAPERS MENTION THE NAME OF TRIDENT (INDIA) LTD. AGAINST THE PAYMENTS, INCLUDING THE CHEQUE PAYMENTS. IN CASE THESE CHEQUE PAYMENTS HAVE BEEN MADE BY TRIDENT CREATION PVT. LTD., AS ITA NO.1078/AHD/2009 M/S. TRIDENT CREATION PVT. LTD. VS DCIT, CC- 1(1), AHMEDABAD. 11 THE APPELLANT CLAIMS, THEN WHY THE NAME OF TRIDENT (INDIA) LTD. APPEARS IN THE LOOSE PAPERS. (D) THE COMMENTS OF THE APPELLANT ON THE COMPARABLE CASES GIVEN BY THE A O AND TO WORK OUT THE RATE OF PURCHASE IN THOSE CASES. (E) THE SUBMISSIONS MADE BY THE APPELLANT ARE THE SAME AS HAS PUT FORTH BEFORE THE A O. IT SHOULD, THEREFORE, PINPOINT SPECIFICALLY THE OBJECTION IT H AS WITH REGARD TO THE ASSESSMENT ORDER. (F) TO INFORM ABOUT THE FAMILY AND BUSINESS RELATIO N BETWEEN SHRI SANJAY THAKKAR AND SHRI DEEPAK THAKKAR. (G) TO FURNISH THE DETAILS ABOUT PAYMENT AND REFUND BACK OF THE CONSIDERATION BETWEEN TRIDENT (INDIA) LTD. AND M/S. DEV ENTERPRISE AND THEREAFTER THE PAYMENT OF AMOUNT BY8 TRIDENT CREATIONS PVT. LTD. TO ADARSH INDUSTRIES & ENTERPRISE PVT. LTD. AS THE APPELLANT CLAIMS. IN COMPLIANCE OF THE SAID SHOW CAUSE NOTICE, THE AS SESSEE FILED ITS REPLY ON 21-08-2008 AS UNDER: THIS IS IN CONNECTION WITH THE LAST HEARING BEFORE YOUR HONOUR ON 29 TH JULY, 2008 WHEREIN THE ASSESSEE WAS ASKED TO BURNISH FOLLOWING DETAILS AND EXPLANATION. BASED ON THAT WE HAVE TO RESPECTFULLY SUBMIT AS UNDER: (1) CHANGE OF PARTNERS COMPANY FOR SALE & PURCHAS E EARLIER THE BOOKING OF OFFICE PREMISES WAS DONE BY OUR SISTER CONCERN TRIDENT (INDIA) LTD. AND BOOKING DEP OSIT WAS GIVEN TO M/S. DEV ENTERPRISE. THE PARTNERS OF M /S. DEV ENTERPRISE ARE AS UNDER: ITA NO.1078/AHD/2009 M/S. TRIDENT CREATION PVT. LTD. VS DCIT, CC- 1(1), AHMEDABAD. 12 (1) MR. SANJAY H. THAKKAR, HUF (2) MR. DIPAK A. THAKKER (3) SMT. RITABEN S. THAKKAR (4) MR. KAMLESH D. THAKKAR SO FAR AS OUR COMPANY IS CONCERNED, AS EXPLAINED EA RLIER WE, SAME FAMILY MEMBERS WERE COMMON DIRECTORS BUT THE COMPANY TRIDENT (INDIA) WAS DISTINCT ENTITY DOI NG BUSINESS OF SALE AND PURCHASE OF EXPORT/IMPORT INSTRUMENTS. WE WANTED THIS INVESTMENT AND OTHER BUSINESS IN A SEPARATE COMPANY DOING AND PLANNING T O DO RETAIL BUSINESS. SO, WE CHANGED THE BOOKING IN NAME OF THIS COMPANY, VIZ TRIDENT CREATION PVT. LTD. THE PARTNERSHIP FIRM M/S. DEV ENTERPRISE THEREAFTER DECIDED TO CHANGE THE ENTIRE PROJECT IN THE NAME OF AADARSH INDUSTRIES & INVESTMENT PVT. LTD. DUE TO TH EIR REASONS. NAMES OF THE DIRECTORS OF THE COMPANY ARE AS UNDER: MR. SANJAY H. THAKKAR MR. DIPAK A. THAKKAR WHY THE PROJECT IS CHANGED FROM M/S. DEV ENTERPRISE TO AADARSH INDUSTRIES & INVESTMENT PVT. LTD. IS NOT KN OWN TO US AS WE ARE IN NO WAY CONNECTED WITH THEM. AS ASKE D WE HAVE TO STATE THAT NONE OF THE DIRECTORS OF OUR COMPANY ARE OR WERE IN ANY WAY CONNECTED TO M/S. DE V ENTERPRISE OR ANY OF THE DIRECTORS OF AADARSH INDUS TRIES & INVESTMENT PVT. LTD. THIS WAS PURELY A FIRST TRANS ACTION OF BOOKING PREMISES WITH THEM BY US. (2) INITIALLY THE CHEQUES FOR BOOKING THE PREMISES WERE GIVEN BY TRIDENT (INDIA) LTD. TO M/S. DEV ENTERPRIS ES. COPY OF THE SAME IS AS PER PAGE 1. THEREAFTER, M/ S. DEV ENTERPRISE RETURNED THE CHEQUE TO TRIDENT (INDI A) LTD. DEALS OF WHICH ARE AS PER PAGE-2. AS WE DECIDED TO ITA NO.1078/AHD/2009 M/S. TRIDENT CREATION PVT. LTD. VS DCIT, CC- 1(1), AHMEDABAD. 13 CHANGE OUR NAME, WE PAID THE CHEQUES FROM TRIDENT CREATIONS PVT. LTD. TO AADARSH INDUSTRIES AND INVES TMENT PVT. LTD. AS PER PAGE (3) ENCLOSED. (3) COMING TO YOUR NEXT POINT WITH REGARD TO THE RA TE OF OFFICE PER SQ. FT. WORKED OUT BY THE ASSESSING OFFI CER, WE HAVE TO SUBMIT THAT THE ASSESSING OFFICER DID NOT P ROVIDE US WITH ANY OF THE DETAILS AS MENTIONED IN HIS ORDE R, NOR WE WERE INFORMED ABOUT THREE PERSONS, WHO HAD AGREED/SURRENDERED CASH PAYMENTS IN THEIR RETURN OF INCOME. WE DO NOT KNOW FOR WHAT PURPOSE OR REASONS AND UNDER WHAT CIRCUMSTANCE THEY HAVE DISCLOSED SUCH PAYMENTS. WHETHER THEY HAVE DISCLOSED TOWARDS COST OF ACQUIRING SUCH PREMISES OR IN ANY OTHER MANNER IS A LSO NOT KNOWN TO US. THEREFORE, WE ARE UNABLE TO COMMEN T THEREOF. HOWEVER, THOSE INVESTORS ARE OF THE GROUND FLOOR SHOPS, WHICH ARE IN NO WAY COMPARABLE TO FIRST AND SECOND FLOOR OF THE OFFICE PREMISES. WE CAN ONLY TE LL THAT 8075 SQ. FT. OF OFFICE PREMISES WAS PURCHASED BY ON E TODI FAMILY FOR RS. 1 CRORE AND HE HAS NOT MADE ANY DISCLOSURE AND SEEMS TO HAVE NOT MADE ANY CASH PAYMENT LIKE US AS NO NOTINGS IN HIS NAME WAS FOUND AND NO ACTIONS BY INCOME TAX DEPARTMENT ARE INITIATED AGAINST HIM FOR IDENTICAL BOOKING. THE RATE WORKED OUT AT RS.1,238/- PER SQ. FT. IS FULLY ACCEPTED BY INCOME TAX DEPARTMENT. OUR RATE FOR 4902 SQ. FT. OF OFFICE PRE MISES ON FIRST FLOOR ON THE PAYMENT OF RS.60,40,302/- COM ES TO RS.1,232/- PER SQ. FT. WHICH MUST BE ACCEPTED BY TH E INCOME TAX DEPARTMENT TO THE SAME EXTENT AND IN LIK E MANNER. THIS IS NOTWITHSTANDING THE FACT, AS STATED ABOVE, WE WERE THE FIRST PARTY TO BOOK IN THIS PROJECT, WH ERE TODI AND OTHERS WERE QUITE LATER AND THEREFORE, THE RATE OF OURS WOULD BE CERTAINLY LESS. (4) COMING TO OUR NEXT POINT WITH REGARD TO THE CAS H PAYMENT ACCEPTED BY ASHISH ZAVERI OF RS.23 LAKHS, TAKWANI FAMILY OF RS.20.51 LAKHS AND RAKESH SHAH OF RS. 11 LAKHS, WE DO NOT KNOW THE TOTAL AREA PURCHAS ED BY THEM AND FOR WHAT PURPOSE AND REASONS THEY ACCEPTED SUCH CASH PAYMENT AS THESE DETAILS WERE NEVER FURNI SHED ITA NO.1078/AHD/2009 M/S. TRIDENT CREATION PVT. LTD. VS DCIT, CC- 1(1), AHMEDABAD. 14 TO US. EXCEPT THESE THREE CASES, ACCORDING TO US AN D A. O. THERE ARE MORE THAN 10 OTHER PARTIES, WHO HAV E PURCHASED THE PREMISES IN THE SAID PROJECT AND NOBO DY HAS ACCEPTED SUCH CASH PAYMENTS AT THE RATE AS WORK ED OUT BY THE ASSESSING OFFICER. IN VIEW OF THIS IT IS NOT POSSIBLE TO WORK OUT WHAT IS THE RATE PER SQ. FT. I F CASH PAYMENT IN THE ABOVE THREE CASES. (5) WITH REGARD TO THE RELATIONS BETWEEN DEEPAK THAKKAR AND SANJAY THAKKAR, THEY ARE COUSIN BROTHER S AND THEY ARE DOING THE PROJECTS OF CONSTRUCTION TOG ETHER. EXCEPT THIS, WE ARE NOT AWARE OF ANY FURTHER INTRIC ATE RELATIONS BETWEEN THEM. (6) WITH REGARD TO OUR GROUND THAT WE WERE NOT ALLO WED TO CROSS EXAMINE, WE HAVE TO SUBMIT THAT WE WERE NOT G IVEN OPPORTUNITY OF CROSS-EXAMINATION EITHER DIPAK THAKE R OR SANJAY THAKKAR, WHO HAD SOLD PROPERTIES TO US AND T O WHOM WE HAVE NOT PAID CASH. WE WANTED TO CROSS- EXAMINE THEM TO UNDERSTAND FOR WHAT PURPOSE SUCH CA SH COLUMN WAS WRITTEN BY THEM AND WHY THE NAME OF JATI N PAREKH AND TRIDENT INDIA WAS MENTIONED. THIS OPPORT UNITY WAS NEVER AFFORDED TO US AND THEREFORE, REAL TRUTH COULD NEVER COME OUT AND THEREFORE, THE ADDITIONS WERE MA DE ON ASSUMPTION AND PRESUMPTION. MOREOVER, WE WERE NO T ALLOWED TO CROSS-EXAMINE THE THREE PARTIES. WE WOUL D HAVE CROSS-EXAMINED THEM TO FIND OUT WHY THEY HAVE SURRENDERED AND TOWARDS WHAT. IN FACT THIS WHOLE PA RA OF THESE PARTIES CAME TO OUR KNOWLEDGE ONLY WHEN ASSESSING OFFICER WAS RECEIVED AND NOT PRIOR TO IT. (7) THE DETAILS OF CHEQUE PAYMENTS MADE AND RECEIVE D BACK AND FRESH CHEQUES ISSUED AS ASKED BY YOU ARE ALREADY EXPLAINED AND GIVEN IN PAGES 1, 2 AND 3 AS PER PARA-2 ABOVE. (8) WITH REGARD TO THE COPY OF STAMP DOCUMENTS FILE D BY US DURING LAST HEARING (INCLUDING ENGLISH TRANSL ATION) WE HAVE TO REPEAT THAT DOCUMENT IS AT THE SAME PRIC E OF ITA NO.1078/AHD/2009 M/S. TRIDENT CREATION PVT. LTD. VS DCIT, CC- 1(1), AHMEDABAD. 15 RS.60.40 LAKHS, I.E. CHEQUE PAYMENTS ONLY AND NO CA SH PAYMENT WHATSOEVER. (9)COMING TO THE LAST POINT WITH REGARD TO YOUR QUE RY AS TO WHAT IS THAT WE HAVE STATED BEFORE THE ASSESSING OF FICER AND, WHICH HAS NOT BEEN ACCEPTED BY HIM IS THAT THE MAIN AND FUNDAMENTAL POINT OF OUR SUBMISSION IS NOT BEIN G ACCEPTED AND WAS BRUSHED ASIDE. THE A. O. HAS RELIE D ON WHAT IS FOUND OUT FROM THE PREMISES, WHERE SEARCH T OOK PLACE, I.E. AADARSH INDUSTRIES AND INVESTMENT PVT. LTD. TO SUMMARISE, THE ASSESSING OFFICER DID NOT ACCEPT OUR SUBMISSIONS AS UNDER: (I) NO LOOSE PAPERS OR DIARY WAS FOUND OUT FROM OUR/ASSESSEES PREMISES. THEREFORE, PURELY ON OUTSIDE PARTYS EVIDENCE ADDITIONS CANNOT BE MADE AS HELD IN SO MANY JUDGMENTS WAS NOT ACCEPTED. (II) EXCEPT THE HANDWRITTEN PAPER FOUND OUT BY THE SEARCH PARTY FROM THE PREMISES OF AADARSH INDUSTRIES & INVESTMENT PVT. LTD., THERE WAS NO NOTING OR SIGNATURE OF OURS OR ASSESSEE WAS FOUND OUT. (III) NO OTHER PROMISSORY NOTE OR RECORD WAS FOUND OUT WHEN SAME SEARCH PARTY SURVEYED OUR PREMISES AND VERIFIED OUR BOOKS WHEREIN NO CASH PAYMENT OR ANY ENTRY WAS NOTICED. THE ASSESSING OFFICER ALSO NOT ACCEPTED THE FACT THAT LAW IS VERY CLEAR THAT SUCH ADDITIONS CAN BE MADE, ONLY WHEN SOME CORROBORATIVE OR SUPPORTING DOCUMENTS OR EVIDENCES ARE FOUND OUT FROM THE PERSON IN WHOSE CASE ADDITIONS ARE BEING MADE. VARIOUS JUDGEMENTS FILED AND CITED WERE ALSO SHOWN TO THE ASSESSING OFFICER, WHICH HAVE BEEN BRUSHED ASIDE BY HIM. ITA NO.1078/AHD/2009 M/S. TRIDENT CREATION PVT. LTD. VS DCIT, CC- 1(1), AHMEDABAD. 16 (IV) AS CAN BE SEEN FROM THE ENTIRE ORDER RUNNING IN TO 8 PAGES, THE ONE AND ONLY POINT OF ASSESSING OFFICER IS FULL AND COMPLETE DETAILS OF THE LOOSE PAPER FOUND OUT, WHEREIN CASH AMOUNT IS MENTIONED. IT HAS BEEN REPEATED AT VARIOUS PLACES. OTHERWISE THE ASSESSING OFFICER HAS REPRODUCED OUR ARGUMENTS ON PAGES 3 TO 5, ON PAGE 6 HE HAS REPEATED THE FINDING OF THE LOOSE PAPERS AND ANNEXURE AND ON PAGE 7 HE HAS MENTIONED ABOUT THREE PARTIES DISCLOSING CASH, WHICH WAS NEVER TOLD TO US. (V) ON PAGE 8, THE ASSESSING OFFICER IS RELYING ON 2 DECISIONS WHICH ARE NOT RELEVANT TO OUR CASE (COPY ENCLOSED). (VI) NOW BEFORE YOUR HONOUR WE ARE SUBMITTING ALL THESE DETAILS TO CONCLUSIVELY PROVE THAT THE RATE AT WHICH OFFICE HAS BEEN PURCHASED BY US IS ONLY ON AMOUNT OF CHEQUES PAID AND THAT IS THE TRUE AND CORRECT MARKET VALUE, ACCEPTED BY STAMP AUTHORITIES (SEC. 50 APPLIES IN SPIRIT) AND NO OTHER NOTE OR DIARY OR PROMISSORY NOTE WERE FOUND OUT FROM THE BUILDERS PREMISES OR FROM OUR PREMISES. THERE IS NO OTHER MATERIAL EXCEPT A PRESUMPTION, AND THAT TOO WITHOUT ANY MATERIAL THAT IN SUCH PURCHASE OF REAL ESTATE INVOLVEMENT OF SOME CASH PAYMENT COULD BE THERE. THIS IS NO BASIS FOR ADDITION AS CLEARLY HELD BY THE AHMEDABAD TRIBUNAL AND GUJARAT HIGH COURT IN VARIOUS CASES ALREADY FILED. IN VIEW OF THIS, WE ONCE AGAIN VEHEMENTLY SUBMIT, RELY ON OUR TWO EARLIER WRITTEN SUBMISSIONS AND PRA Y THAT THE ADDITION SO MADE WITHOUT ANY EVIDENCE AND PROOF BE DELETED. ITA NO.1078/AHD/2009 M/S. TRIDENT CREATION PVT. LTD. VS DCIT, CC- 1(1), AHMEDABAD. 17 4.3 ALL THE WRITTEN SUBMISSIONS MADE BY THE ASSESSEE, I NCLUDING THE REPLY DATED 21/8/08 WERE SENT TO THE A. O. FOR FILI NG HIS COMMENTS/REPORTS OF THE SAME. THE REPLY TO THE SAME WAS FILED BY THE DCIT.CC.1(1), AHMEDABAD 17/11/08 WHICH READS AS UNDER: 2. AS DIRECTED, THE SUBMISSIONS FILED BY THE ASSESSEE BEFORE YOUR KINDSELF ON 21/8/2008 HAS BEEN GONE THROUGH. IT IS HUMBLY SUBMITTED THAT, FRO M THE ASSESSEES OWN SUBMISSION, IT IS CLEAR THAT MR. DIPAK THAKAKR (FROM WHOSE PREMISES DOCUMENTS MARKED A-10, A-11 WERE FOUND) WAS A PARTNER IN EARLIER M/S. DEV ENTERPRISE AS WELL AS A DIRECTOR I N ADARSH INDUSTRIES & INVESTMENTS (P) LTD. THESE TWO CONCERNS WERE INVOLVED IN THE BOOKING/SALE OF PROPERTY UNDER REFERENCE. BEING ONE OF THE MAIN PERSONS, HE WAS SUPPOSED TO BE IN KNOWLEDGE OF RELEVANT DETAILS AND THUS IT IS QUITE LOGICAL THAT DETAILS OF TRANSACTIONS RELATED TO SALE OF RELEVANT PROPERTY TO TRIDENT INDIA LTD./TRIDENT CREATION (P) LTD. AS WELL AS SALE TRANSACTIONS RELATED TO OTHER PERSONS WERE FOUND FROM HIS PREMISES. 3. THE ASSESSEE CLAIMED THAT THE DOCUMENT FOUND FROM ANOTHER PREMISE HAS NOT EVIDENTIARY VALUE AND THE FIGURE WRITTEN BY SHRI DEEPAK THAKAKAR COULD BE HIS PLANNING/DESIRE ETC. HOWEVER, THE SAID DOCUMENT HAS EVIDENTIARY8 VALUE AS DISCUSSED BY ASSESSING OFFICER IN HIS ORDER AND THE UNDERSIGNED RELIES ON THE SAME. FURTHER MORE THE EVIDENTIARY VALUE OF THE SEIZED DOCUMENT A-10, A-11 WHICH CONTAINS DETAILS OF ON MONEY TRANSACTIONS OF DIFFERENT UNITS OF T4HE SAID PROPER TY IS CLEAR AS PAYMENT OF ON-MONEY FOR PURCHASE OF DIFFERENT UNITS IN THE SAID PROPERTY HAS BEEN ACCEPTED BY VARIOUS PERSONS SUBSEQUENT TO EVIDENCES BEING DETECTED IN THE COURSE OF SEARCH. ITA NO.1078/AHD/2009 M/S. TRIDENT CREATION PVT. LTD. VS DCIT, CC- 1(1), AHMEDABAD. 18 THIS ITSELF IMPLIES THAT THE CORRECTNESS OF THE CONTENTS OF THE SEIZED DOCUMENT. 4. IN THIS REGARD, ASSESSEE HAS NAMED CERTAIN PERSON TO STATE THAT RATE/SQUARE FEET PAID BY HIM H AS BEEN ACCEPTED BY INCOME-TAX DEPARTMENT. THE SAID CLAIM OF THE ASSESSEE HAS NOT BEEN VERIFIED BY THE UNDERSIGNED . HOWEVER, IT IS CLARIFIED THAT ACTION HAS BEEN TAKEN IN THOSE CASES WHERE DIRECT EVIDENCE OF PAYMENT OF ON-MONEY FOR PURCHASE OF PROPERTY WERE FOUND IN SEIZED DOCUMENTS AND/OR EVIDENCES WERE DETECTED IN COURSE OF SEARCH OPERATION/POST SEARCH ENQUIRY. AS PER LEGAL NORMS, NO EXTRAPOLATION WAS MADE TO ALL PURCHASERS OF PROPERTY UNDER REFERENCE, IF DIRECT EVIDENCE OF PAYMENT OF ON-MONEY WAS NOT FOUND. 5. THE SUBMISSION OF JANTRI PRICE/STAMP AUTHORITY DETAILS BY THE ASSESSEE IS ONLY RELEVANT FOR CHEQUE PORTION. ON-MONEY TRANSACTION IN PROPERTY ARE A REALITY AND IT IS HUMBLY SUBMITTED THAT THE O N- MONEY DETAILS WOULD NOT BE FOUND IN CONVEYANCE DEED/SALE DEED ETC. 6. IN VIEW OF THE ABOVE, IT IS HUMBLY SUBMITTED THAT THE ADDITION HAS BEEN MADE ON FACTS AS ENUMERATED IN DETAIL IN THE ASSESSMENT ORDER AND NOT ON PRESUMPTIONS AS ALLEGED BY THE APPELLANT. THE UNDERSIGNED FULLY RELIES ON THE CASE LAWS AND FACTUAL POSITION AS CITED BY THE ASSESSING OFFICER IN THIS REGARD. 4.4 A COPY OF THE REMAND REPORT WAS SENT TO THE ASS ESSEE FOR FILING ITS COMMENTS WHICH IF FILED ON 05-01-2009 VIDE HIS LETTER DATED 02-01-2009, WHICH READS AS UNDER: WE ARE IN RECEIPT OF YOUR LETTER NO.CIT(A)-I/TOL/2 008-09 DATED 20 TH DECEMBER, 2008 ENCLOSING THE COPY OF LETTER ITA NO.1078/AHD/2009 M/S. TRIDENT CREATION PVT. LTD. VS DCIT, CC- 1(1), AHMEDABAD. 19 DATED 18-11-2008 AND A REMAND REPORT DATED 17-11- 2008 IN CONTINUATION OF THE PROCEEDINGS OF THE APP EAL FOR ASSTT. YEAR 2005-06. IN THIS CONNECTION WE HAVE TO SUBMIT AS UNDER: 1. PARA 1 AND 2 ARE MERE STATEMENT OF FACTS AND NEE D NO COMMENTS. 2. WITH REGARD TO PARA-3, THE ASSESSING OFFICER HAS ONLY STATED THAT DOCUMENT FOUND FROM THE PREMISES OF DEEPAK THAKKAR HAS EVIDENTIARY VALUE AS DISCUSSED B Y THE ASSESSING OFFICER IN THE ORDER. IN THE REMAND REPORT DY. C. I. T. HAS MERELY RELIED ON THE SAME A ND HAS NO FURTHER COMMENTS TO OFFER AS AGAINST SO MANY POINTS RAISED BY THE APPELLANT. MOREOVER, HE HAS EMPHASIZED ON THE EVIDENTIARY VALUE OF THE SEIZED DOCUMENTS CONTAINING DETAILS OF ON MONEY TRANSACTIO N OF DIFFERENT UNITS OF THE SAID PROPERTY STATING THA T VARIOUS OTHER PERSONS HAVE ACCEPT4ED THE ON MONEY. THIS IS NOT CORRECT AND FAR FROM TRUTH. WE ARE AWAR E THAT NONE OF THEM HAS DISCLOSED ADDITIONAL INCOME O N THE GROUND THAT THEY HAVE PAID ON MONEY TO SAID BUILDER. IN ONE OF THE CASES THE PERSON HAS DISCLOS ED ADDITIONAL INCOME JUST TO BUY PEACE CLEARLY8 MENTIONING IN THE RETURN OF INCOME THAT NO ON MONEY PAYMENT HAS BEEN MADE. COPY OF THE SAME IS ENCLOSED AND WE REQUEST YOUR HONOUR TO CALL FILE OF ALL SUCH PERSONS, WHO HAVE DISCLOSED ADDITIONAL INCOME, NOT AS AN ON MONEY PAID TO THE BUILDER BUT INCOME FROM OTHER SOURCES TO BUY PEACE. THEREFORE, THE ASSESSING OFFICERS CONTENTION THAT DECLARATION OF INCOME BY OTHER SOME PARTIES IMPLIES THE CORRECTNES S OF THE CONTENTS OF THE SEIZED DOCUMENTS IS NOT AT A LL CORRECT. 3. WITH REGARD TO PARA-4, THE RATE PER SQ. FT. ETC. , THE ASSESSING OFFICER HAS SAID THAT THE CLAIM HAS NOT B EEN VERIFIED AND HAS MERELY REPEATED WHAT HAS BEEN STAT ED BY THE ASSESSING OFFICER. ITA NO.1078/AHD/2009 M/S. TRIDENT CREATION PVT. LTD. VS DCIT, CC- 1(1), AHMEDABAD. 20 4. IN PARA-5, THE ASSESSING OFFICER HAS NO COMMENTS TO OFFER ON THE FACT THAT SOME AUTHORITIES HAVE ACCEPT ED THE VALUE AS PER CHEQUE PAYMENT AND HAS ONLY STATED THAT ON MONEY TRANSACTION IN PROPERTY ARE THE REA LITY. SUCH PRESUMPTIONS CANNOT BE MADE AS THERE ARE SO MANY SUCH REALTIES LIKE CONDUCT AND BEHAVIOUR OF MA NY OFFICERS IN MANY DEPARTMENTS OF GOVERNMENT OR OTHER ENTERPRISES. SUCH ALLEGATIONS CANNOT BE GENERALIZED AND NEED BE SUPPORTED WITH STRONG REBUTTABLE EVIDENCES, WHICH, WITH RESPECT, THE LEARNED ASSESSI NG OFFICER HAS NOT BEEN ABLE TO DO. 5. IN PARA-6, THE ASSESSING OFFICER HAS MERELY RELI ED ON THE ADDITIONS MADE AND THE FINDING ON THE ASSESSMEN T ORDER, WHICH HAS BEEN CHALLENGED BY US HEAVILY BY PUTTING NUMBER OF ARGUMENTS ON FACTS AND DECISIONS ON LAW. AFTER RECEIPT OF THE SAME, THE ASSESSEE WAS GIVEN F URTHER OPPORTUNITY OF FINAL HEARING ON 18-02-2009. DURING THE HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE HAD FILED A DOCUMENT WHICH HE HAS CLAIMED TO BE THE COPY OF THE NOTES FORMING PART OF THE INC OME TAX RETURN OF THE BLOCK ASSESSMENT OF ONE MR. T. K. TEKWANI, CA W HOSE NAME WAS ALSO FOUND IN THE SAID SEARCH IN THE SAME MANNER. A CCORDING TO THE LEARNED COUNSEL FOR THE ASSESSEE, IN THE SAID CASE, MR. T. K. TEKWANI HAD ALSO STATED THAT HE HAD NOT MADE ANY CASH PAYME NT TO THE SELLER AND HE OFFERED TH4E INCOME OF THE CASH AMOUNT STATE D TO HAVE BEEN NOTED BY THE SELLER, TO BUY PEACE AND AVOID LENGTHY AND COSTLY LITIGATION. IT WAS, ACCORDINGLY, ARGUED THAT NO BUY ER OF THE OFFICE PREMISES OR SHOP OF SAID PREMISES HAVE ACCEPTED ANY CASH PAYMENT TO THE SELLER. HE FURTHER SUBMITTED THAT IT IS THE SETTLED LAW THAT CONTRARY TO THE PROVISIONS OF SEC. 68 WERE ONUS IS ON THE ASSESSEE, ITA NO.1078/AHD/2009 M/S. TRIDENT CREATION PVT. LTD. VS DCIT, CC- 1(1), AHMEDABAD. 21 THE ONUS IS HEAVILY OR FULLY ON THE DEPARTMENT WHIL E MAKING ADDITION U/S 69B, TO PROVE THAT THE ASSESSEE HAS MADE SUCH U NACCOUNTED INVESTMENT OUTSIDE THE BOOKS. THE ASSESSING OFFICER HAVING FAILED TO DO THAT, MERELY RELYING ON THE LOOSE PAPERS FOUND O UT FROM SOMEONE ELSES PREMISES CANNOT BE A BASIS FOR MAKING ADDITI ON. 5. THE LEARNED CIT(A) CONSIDERING THE SUBMISSIONS O F THE ASSESSEE AND THE MATERIAL ON RECORD CONFIRMED THE A DDITION AND DISMISSED THE APPEAL OF THE ASSESSEE. HIS FINDINGS IN PARA 9.1 TO 9.9 ARE REPRODUCED AS UNDER: 9.1 I HAVE CAREFULLY CONSIDERED THE CASE RECORDS, THE SUBMISSION MADE BY THE APPELLANT, THE REMAND RE PORT AND THE REPLY OF THE APPELLANT ON THIS. I HAVE ALSO GONE THROUGH THE CASE LAWS RELIED UPON BY THE APPELLANT. THE MOOT POINT THAT IS TO BE DECIDED IN THE CASE IS WHE THER CASH PAYMENT OF THE TOTAL AMOUNT MENTIONED IN THE L OOSE PAPERS FOUND OUT AT THE PREMISES OF THE BUILDER DEV ENTERPRISE AND NOW M/S. ADARSH INDUSTRIES & INVESTM ENTS PVT. LTD. SHOULD BE CONSIDERED AS ACTUAL AMOUNT PA ID BY THE APPELLANT OR NOT, AND CONSEQUENTLY WHETHER A PRESUMPTION CAN BE MADE AGAINST THE ASSESSEE THAT S UCH KIND OF ON-MONEY PAYMENT IS A PREVALENT PRACTICE IN REAL ESTATE TRANSACTION, AND, THEREFORE, AN ADVERSE PRESUMPTION BE MADE AGAINST THE ASSESSEE. 9.2 THE PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT THE ADDITION OF RS.1,30,88,000/- HAS BEEN MADE BY THE AO ON THE BASIS OF THE LOOSE PAPERS FOUND AND S EIZED DURING THE COURSE OF SEARCH PROCEEDINGS ON SHRI DEE PAK THAKKAR. THE LOOSE PAPERS SHOW PAYMENT OF RS.1,30,88,000/- AS CASH AND RS.51,00,000/-BY CHEQU ES ON DIFFERENT DATES. HOWEVER, AFTER VERIFICATION, TH E A.O. HAS NOTED THAT PAYMENT OF RS. 10 LAKHS ON 15/5/04 H AS BEEN WRONGLY WRITTEN, THEREFORE THE TOTAL CHEQUES ITA NO.1078/AHD/2009 M/S. TRIDENT CREATION PVT. LTD. VS DCIT, CC- 1(1), AHMEDABAD. 22 PAYMENT IS 4,10,000/- TILL 26/10/04. WITH REGARD TO THE OTHER CHEQUE AMOUNTS AND THE DATE OF PAYMENT THEREO F, AS GI0VENI IN THE LOOSE PAPER, THE APPELLANT HAS NO OBJECTION MEANING THEREBY THAT THEY HAVE CORRECTLY BEEN RECORDED. THE APPELLANTS OBJECTION IS WITH REGARD TO THE CASH PAYMENT OF RS.1,30,88,000/- REFLECTED THEREIN WHICH, ACCORDING TO THE APPELLANT, IS ONLY A COLUMN AND TH AT ITS VERACITY SHOULD NOT BE ACCEPTED AS THERE IS NO MENT ION OF THE AMOUNT HAVING BEEN PAID. WHEN THE APPELLANT ACCEPTS THE VERACITY OF THE COLUMN REFLECTING THE C HEQUE PAYMENTS ABOUT WHICH ALSO NO REFERENCE OF THESE PAYMENT HAVING BEEN MADE IS THERE, HIS CONTENTION O F BRUSHING ASIDE THE RECORDING ABOUT CASH PAYMENTS CA NNOT BE ACCEPTED. 9.3 FURTHER, THESE PAPERS MENTION THE NAME OF M/S. TRIDENT INDIA AS THE PARTY HAVING MADE THE PAY MENTS AND THEREFORE, THE APPELLANT CO. I. E. TRIDENT CREA TIONS PVT. LTD. HAS OBJECTED TO THE ADDITION IN ITS HAND. HOWEVER, THE INFORMATION FURNISHED BY THE APPELLANT SHOWS THAT BOTH THESE PARTIES ARE SISTER CONCERNS. THE APPELLANT HAS STATED THAT THE FIRST MOU WAS DRAWN F OR THE PURCHASE OF THESE SHOPS IN THE NAME OF TRIDENT (IND IA) LTD. BUT, AFTER PART PAYMENT BY TRIDENT (INDIA) LTD ., THEY DECIDED TO BIFURCATE THE BUSINESS SO THAT THE BUSIN ESS OF EXPORT/IMPORT OF INSTRUMENTS IS EXCLUSIVELY DONE BY TRIDENT (INDIA) LTD. AND THIS INVESTMENT AND OTHER BUSINESS BY THE APPELLANT CO. AND BECAUSE OF WHICH THEY MADE THE APPELLANT AS THE PURCHASER OF THE IMPUGNED PROPERTIES AND ACCORDINGLY, THE SECOND MOU WAS DRAW N. THIS GOES TO SHOW THAT A COMMON PERSON IS RUNNING T HE SHOW OF BOTH CONCERNS. THEREFORE, CHANGING OF PURCH ASE PARTIES IS NOTHING BUT A PART OF THEIR BUSINESS PLA NNING. ALSO PAYMENT OF CHEQUES BY FIRST PARTY, THEN THEIR RETURN AND AGAIN PAYMENT OF CHEQUES BY T HE CHANGED PURCHASER PARTY IS NOTHING BUT THEIR OWN GAME PLAN, WHICH IN NO WAY HELPS THE CASE OF THE APPELLANT. THE ON-M ONEY IS ALWAYS PAID OUTSIDE THE BOOKS. THE CHANGE OF PAR TIES CAN BE SHOWN ONLY WITH THE HELP OF CHEQUE PAYMENT. OTHERWISE, AS HAS BEEN STATED BY THE APPELLANT, THE RE ITA NO.1078/AHD/2009 M/S. TRIDENT CREATION PVT. LTD. VS DCIT, CC- 1(1), AHMEDABAD. 23 WAS NO CHANGE IN THE FIRST AND SUBSEQUENT MOUS DRAW N FOR THIS PURPOSE. THE SAME ADJUSTMENT CAN BE MADE W ITH REGARD TO THE ON-MONEY PAYMENTS TOO. 9.4 THE APPELLANTS PLEA THAT IT SI0GNED THE PURCHASE AGREEMENT WITH SANJAY S. THAKKAR AND NOT DIPAK A THAKKAR FROM WHOSE PREMISES, THE LOOSE PAPE RS WERE FOUND AND SEIZED, ALSO DOES NOT SUPPORT THE APPELLANTS CASE. BECAUSE, AS HAS BEEN SUBMITTED BY THE APPELLANT ITSELF, BOTH DIPAK THAKAKR AND SANJAY S. THAKKAR ARE COUSINS HAVING COMMON BUSINESS. BOTH TH E SELLER PARTIES I.E. M/S. DEV ENTERPRISE AND THEN M/ S. AADARSH INDUSTRIES & INVESTMENT PVT. LTD. ALSO PERT AIN TO THESE TWO PERSONS. 9.5 THE AO HAS GIVEN A NUMBER OF COMPARABLE CASES WHERE THOSE PARTIES HAVE PURCHASED THE SHOPS/OFFICES IN THE SAME COMPLEX AND HAVE ADMITTED TO HAVE PAID CASH PAYMENTS AS ON-MONEY. THE PARTIES REFERRED TO BY THE AO ARE SHRI ASHISH ZAVERY AND JA YSHRI ZAVERI, TEKWANI AND MANSHANI FAMILY, RAKESH SHAH HUF, AND SHRI KIRTI SHAH, ALL OF WHOM HAVE ADMITTED CASH PAYMENT OVER AND ABOVE THE DECLARED CONSIDERATION A S ON MONEY FOR THE PURCHASE OF RESPECTIVE SHOPS BY TH EM IN DEV COMPLEX. THE AO HAS RELIED ON THE CASE OF ROHIN I RAMNATH LELE 117 CTR 208 (MUM/TM) WHEREIN IT IS HEL D THAT PREVAILING PRACTISE OF PAYING ON-MONEY SHOULD BE CONSIDERED EVEN IF THE PURCHASER DENIES. HE HAS ALS O RELIED ON THE CASE OF GREEN VALLEY BUILDERS 149 TAX MAN 671 (KER.), WHEREIN IT IS HELD THAT IF HIGHER PRICE WAS PAID FOR PURCHASE OF LAND, ADDITION CAN BE MADE. HE HAS ALSO QUOTED THE CASE OF SUMATI DAYAL 214 ITR 801 (SC) WHEREIN IT IS HELD THAT TEST OF HUMAN PROBABILITIES AND PREPONDERANCE OF PROBABILITIES SHOULD BE APPLIED TO DECIDE THE ISSUE IN T HE ABSENCE OF DIRECT EVIDENCE . THE APPELLANT HAS PLEADED THAT SINCE IT WAS THE FIRST PURCHASER, HENCE, CONSIDERATION IN ITS CASE WAS LES SER THAN IN OTHER CASES. HOWEVER, THIS PLEA CANNOT JUST IFY THE ON-MONEY AMOUNT TO THE EXTENT OF RS.1.30,88,000/- REFLECTED IN THE LOSE PAPERS VIS A VIS THE CHEQUE P AYMENT ITA NO.1078/AHD/2009 M/S. TRIDENT CREATION PVT. LTD. VS DCIT, CC- 1(1), AHMEDABAD. 24 TO THE TUNE OF RS.60.40 LACS ONLY AS ADMITTED BY TH E APPELLANT. THIS GETS PROVED IN THIS CASE BY THE ADM ISSION OF THE PARTIES QUOTED BY THE A. O. IN THE ASSESSMEN T ORDER THAT THEY HAVE PAID ON MONEY FOR THE PURCHASE OF SHOPS/OFFICES IN THE SAME COMPLEX. UNDER THE CIRCUMSTANCES, THE PURCHASE RATE WORKED OUT BY THE APPELLANT AND THE SUPPORT OF JANTRI (COPY OF INDE X) IT HAS TAKEN, CANNOT BE GIVEN MUCH CREDENCE BECAUSE THEY A RE BASED ON THE RECORDED CONSIDERATION PASSED AND DO N OT TAKE INTO ACCOUNT THE ON-MONEY PAID OVER AND ABOVE THAT. PASSING OF ON-MONEY IN PROPERTY DEALINGS IS A PREVA LENT PRACTICE AND THAT IT WAS RESORTED TO BY SHRI DEEPAK THAKKAR IN THE SALE OF SHOPS IN DEV COMPLEX GETS PR OVED BY THE CASES REFERRED TO BY THE AO. THEREFORE, CONSIDERING THE LOWER CONSIDERATION FOR THE PROPERT Y SHOWN BY THE APPELLANT VIS A VIS THE HIGHER COST/PU RCHASE PRICE ADMITTED BY COMPARABLE PARTIES, THE AO RIGHTL Y APPLIED THE RULE OF PREPONDERANCE OF PROBABILITY IN THIS REGARD IN ABSENCE OF DIRECT EVIDENCE. THE DOCUMENTS FOUND AND SEIZED FROM THE HOUSE OF SHRI DIPAK THAKK AR DID HAVE EVIDENTIARY VALUE WHEN SUCH RECORDINGS IN THE CASE OF THE OTHER PURCHASER PARTIES HAVE BEEN ADMIT TED BY THEM. THE APPELLANT HAS REFERRED THE CASE OF TEK WANI THAT HE SURRENDERED TH4 AMOUNT ONLY TO BUY PEACE. I T HAS ALSO CITED THE CASE OF ONE TODI WHO; AS PER THE APP ELLANT, HAS NOT MADE ANY DISCLOSURE AND SEEMS TO HAVE NOT MADE ANY CASH PAYMENT. IN THIS REBUTTAL IN THE REMA ND REPORT IN THIS REGARD, THE AO HAS STAT ED THAT ACTI ON HAS BEEN TAKEN ONLY IN THOSE CASES WHERE DIRECT EVIDENC E OF PAYMENT OF ON-MONEY FOR PURCHASE OF PROPERTY WERE FOUND AND THAT NO EXTRAPOLATION WAS MADE TO ALL PURCHASERS OF PROPERTY UNDER REFERENCE, IF DIRECT E VIDENCE OF PAYMENT OF ON-MONEY WAS NOT FOUND. UNDER THE FA CTS AND CIRCUMSTANCES OF THE CASE AS DISCUSSED ABOVE, THEREFORE, THERE IS NO REASON NOT TO ACCEPT THAT IN THE CASE OF THE APPELLANT TOO, THE ON-MONEY PAYMENT OF RS.1,30,88,000/-, AS FIND RECORDED IN THE LOOSE PAP ERS, HAS PASSED. THIS IS IN-CONSONANCE WITH THE PRACTICE WHICH HAS BEEN FOLLOWED IN THE CASE OF OTHER SALES IN THI S VERY ITA NO.1078/AHD/2009 M/S. TRIDENT CREATION PVT. LTD. VS DCIT, CC- 1(1), AHMEDABAD. 25 BUILDING, WHICH HAVE ALSO BEEN ACCEPTED BY THESE OT HER PURCHASERS. 9.6 I HAVE GONE THROUGH THE CASE LAWS RELIED UPON BY THE APPELLANT VIDE WHICH IS HAS BEEN PLEADED THA T ADDITION ON THE BASIS OF LOOSE PAPERS FOUND FROM TH IRD PARTY SHOULD NOT BE MADE WITHOUT CORROBORATIVE EVID ENCE. BUT, I AM OF THE CONSIDERED VIEW THAT AS PER THE DISCUSSIONS ABOVE, AMPLE CORROBORATIVE EVIDENCE HAS BEEN BROUGHT ON RECORD BY THE A. O. IN THE FORM OF THE COMPARATIVE CASES AS ALSO THE APPELLANT NOT BEING A BLE TO EXPLAIN WITH EVIDENCE AS TO WHY HIS PURCHASE CONSIDERATION WAS SO LOW VIS--VIS THOSE OF THE OTH ER PURCHASERS. IT IS AN ESTABLISHED PREPOSITION THAT T HE PRINCIPLES OF EVIDENCE ACT CAN NOT BE RIGOROUSLY FO LLOWED IN THE CASE OF INCOME TAX PROCEEDINGS. THE PRINCIPL E OF PREPONDERANCE OF PROBABILITY IS VERY MUCH APPLICABL E FOR DECIDING INCOME TAX MATTERS. WHEN OTHER PROPERTIES IN THE SAME PREMISES WERE SOLD AT A HIGHER COST AND TH ESE OTHER PURCHASERS ADMITTED TO HAVE GIVEN ON-MONEY FO R SUCH PURCHASE, IT CAN SAFELY BE CONCLUDED THAT THE SAME APPLIED TO THE CASE OF THE APPELLANT TOO. 9.7.1 THE APPELLANT HAS OBJECTED NOT HAVING BEEN GIVEN THE OPPORTUNITY OF CROSS-EXAMINATION. NATURAL JUSTICE ENTAILS THAT IF ANY MATERIAL IS COLLECTED AT THE BA CK OF THE ASSESSEE, HE HAS TO BE GIVEN AN OPPORTUNITY OF BEIN G HEARD BEFORE IT IS UTILISED AGAINST HIM. IN OTHER W ORDS, HE MUST KNOW WHAT IS BEING USED AGAINST HIM AND HE SHO ULD BE GIVEN AN OPPORTUNITY TO PUT FORTH HIS POINT IN T HIS REGARD. HOWEVER, THE PROVISIONS OF INDIAN EVIDENCE ACT ARE NOT STRICTLY APPLICABLE TO THE PROCEEDING UNDER THE INCOME-TAX ACT, ONLY THE BROAD PRINCIPLES OF LAW OF EVIDENCE APPLY TO SUCH PROCEEDINGS. HOW THIS IS MET , DEPENDS UPON THE FACTS AND CIRCUMSTANCES OF THE CAS E. THEREFORE, THE OPPORTUNITY OF CROSS EXAMINATION MAY 8 NOT NECESSARILY BE A PERSONAL EXAMINATION, IT CAN ALSO BE IN THE FORM OF SUPPLYING THE DOCUMENTS IN WRITING AND ASKING FOR THE COMMENTS/REBUTTAL OF THE AFFECTED PARTY. ITA NO.1078/AHD/2009 M/S. TRIDENT CREATION PVT. LTD. VS DCIT, CC- 1(1), AHMEDABAD. 26 9.7.2 A PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT THE COPIES OF THE RELEVANT SEIZED PAPERS WERE DULY8 GIVEN TO THE APPELLANT AND IT WAS ASKED TO SHOW CAUSE AS TO WHY THE CASH ENTRIES RECORDED T HEREIN BE NOT TAKEN AS EXPENDITURE MET FROM UNDISCLOSED SOURCES. IT WAS HE LD BY THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF ANUPAM AGENCIES V/S STATE OF PUNJAB (98 STC 338) TH AT TAXING AUTHORITIES ENTRUSTED WITH THE POWERS TO MAK E ASSESSMENT FOR TAXES DISCHARGE QUASI JUDICIAL FUNCT IONS AND THEY ARE BOUND TO OBSERVE THE PRINCIPLES OF NAT URAL JUSTICE IN REACHING THEIR CONCLUSIONS. IT IS TRUE T HAT THE ASSESSING AUTHORITY IS NOT FETTERED BY TECHNICAL RU LES OF EVIDENCE AND PLEADINGS AND IS ENTITLED TO ACT ON MA TERIAL WHICH MAY NOT BE ACCEPTED AS EVIDENCE IN A COURT OF LAW BUT THAT DOES NOT ABSOLVE IT FROM THE OBLIGATION TO COMPLY WITH THE PRINCIPLES OF NATURAL JUSTICE. THE RULES O F NATURAL JUSTICE ARE NOT INFLEXIBLE HAVING A FIXED CONNOTATI ON. THEY VARY WITH THE FACTS AND CIRCUMSTANCES OF EACH CASE. IT IS, THEREFORE, NOT POSSIBLE TO SAY THAT IN EVERY CASE T HEY REQUIRE A PARTICULAR PROCEDURE TO BE FOLLOWED. IT M AY BE THAT IN A GIVEN CASE THE RULES OF NATURAL JUSTICE M AY REQUIRE THAT A PERSON WHOSE AFFIDAVIT IS SOUGHT TO BE RELIED UPON BY THE ASSESSING AUTHORITY SHOULD BE PERMITTED TO BE CROSS EXAMINED BY THE AFFECTED PARTY WHILE IN SOME OTHER CASE IT MAY NOT BE NECESSARY. IT WAS FURTHER HELD B Y HONBLE ANDHRA PRADESH HIGH COURT IN THE CASE OF NAGULAKONDA VENKATA SUBBA RAO V/S (31 ITR 781) THAT WHEN THE ASSESSING OFFICER PROPOSES TO MAKE AN ASSESSMENT IN DISREGARD TO THE ASSESSEES ACCOUNT B OOKS AND THE EVIDENCE PRODUCED BY HIM, NATURAL JUSTICE DEMANDS THAT HE SHOULD DRAW THE ASSESSEES ATTENTIO N TO IT AND GIVE THE ASSESSEE AN OPPORTUNITY TO PRODUCE EVIDENCE IN REBUTTAL OF THE MATERIAL ON WHICH HE PR OPOSES TO BASE HIS JUDGMENT. AT THE SAME TIME, THE DECISIO N OF THE HONBLE SUPREME COURT IN THE CASE OF SHADULI (3 9 STC 478) CANNOT BE UNDERSTOOD AS RECOGNIZING A RIGH T OF CROSS EXAMINATION AS AN INVARIABLE ATTRIBUTE OF THE REQUIREMENT OF REASONABLE OPPORTUNITY. THE SUPREME COURT HAS STATED THE RULE WITH SUFFICIENT ELASTICIT Y AND AMPLITUDE AS TO MAKE THE RIGHT DEPEND ON THE TERMS OF THE ITA NO.1078/AHD/2009 M/S. TRIDENT CREATION PVT. LTD. VS DCIT, CC- 1(1), AHMEDABAD. 27 STATUTE, THE NATURE OF THE PROCEEDINGS OR OF THE FU NCTION EXERCISED, THE CONDUCT OF THE PARTY AND THE CIRCUMS TANCES OF THE CASE. IT WAS FURTHER HELD IN THIS CASE THAT THE RULE OF AUDIT ALTERAM PARTEM MAY IMPORT A REQUIREMENT THAT WITNESSES WHOSE STATEMENTS ARE SOUGHT TO BE RELIED UPON BY THE AUTHORITY HOLDING THE ENQUIRY SHOULD BE PERM ITTED TO BE CROSS EXAMINED BY THE PARTY AFFECTED WHILE IN OTHER CASE IT MAY NOT. IT WAS HELD BY HONBLE CALCUTTA HI GH COURT IN THE CASE OF MANINDRA NATH CHATTERJEE V/S COLLECTOR OF CENTRAL EXCISE (TAX LR 1754) THAT WHET HER IN A PARTICULAR CASE A PARTICULAR PARTY SHOULD HAVE TH E RIGHT TO CROSS EXAMINE OR NOT DEPENDS UPON THE FACTS AND CIRCUMSTANCES OF A PARTICULAR CASE. THIS IS SO BECA USE THE RIGHT TO CROSS EXAMINE IS NOT NECESSARILY A PART OF REASONABLE OPPORTUNITY. IT WAS HELD BY THE HONBLE SUPREME COURT IN CASE OF STATE OF J & K V/S BAKSHI GULAM MOHAMMAD (AIR 1967 122-SC) THAT RIGHT OF HEARING DOES NOT INCLUDE A RIGHT TO CROSS EXAMINE. THE RIGHT TO CROSS EXAMINE MUST DEPEND UPON THE CIRCUMSTANCES OF EACH CASE AND ALSO ON THE STATE CONCERNED. 9.7.3. IN THE PRESENT CASE, THE FACTS NARRATED ABO VE SHOW THAT THE APPELLANT WAS GIVEN DUE OPPORTUNITY T O REBUT THE DOCUMENTS RELIED UPON. THUS, NO MATERIAL HAS BEEN USED AGAINST THE APPELLANT WITHOUT CONFRONTING THE SAME TO IT AND ADEQUATE OPPORTUNITY OF BEING HEARD HAS BEEN GIVEN TO IT, WHICH MEETS THE REQUIREMENT OF TH E NATURAL JUSTICE. KEEPING IN VIEW THE ABOVE FACTS AN D CIRCUMSTANCES OF THE CASE, I DONT FIND ANY INFIRMI TY IN THE ASSESSMENT ORDER WITH REGARD TO CROSS EXAMINATION A S IS CONTENDED BY THE APPELLANT. 9.8.1. THE APPELLANTS OBJECTION WITH REGARD TO APPLICABILITY OF 69B IS ALSO NOT ACCEPTABLE. SECTIO N 69B IS A DEEMING PROVISION WITH REGARD TO AMOUNT OF INVEST MENT ETC. NOT FULLY DISCLOSED IN THE BOOKS OF ACCOUNT. I T READS AS UNDER: ITA NO.1078/AHD/2009 M/S. TRIDENT CREATION PVT. LTD. VS DCIT, CC- 1(1), AHMEDABAD. 28 WHERE IN ANY FINANCIAL YEAR THE ASSESSEE HAS MADE INVESTMENTS OR IS FOUND TO BE THE OWNER OF ANY BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE, AND THE [ASSESSING] OFFICER FINDS THAT THE AMOUNT EXPENDED ON MAKING SUCH INVESTMENTS OR IN ACQUIRING SUCH BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE EXCEEDS THE AMOUNT RECORDED IN THIS BEHALF IN THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE FOR ANY SOURCE OF INCOME, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT SUCH EXCESS AMOUNT OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION OF THE [ASSESSING] OFFICER, SATISFACTORY, THE EXCESS AMOUNT MAY BE DEEMED TO BE THE INCOME OF THE ASSESSEE FOR SUCH FINANCIAL YEAR.] A PLAIN READING OF THE SECTION 69B SHOWS THAT THE FOLLOWING CONDITION NEED TO BE CUMULATIVELY SATISFI ED BEFORE SECTION 69B CAN BE INVOKED: (A) IT MUST BE ESTABLISHED THAT IN ANY FINANCIAL YEAR THE ASSESSEE HAS MADE INVESTMENT OR IS FOUND TO BE THE OWNER OF ANY BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE; (B) THE ASSESSING OFFICER MUST ESTABLISH THAT THE AMOUNT EXPENDED ON MAKING SUCH INVESTMENTS OR IN ACQUIRING ANY SUCH BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE EXCEEDS THE AMOUNT RECORDED IN THIS BEHALF IN THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE FOR ANY SOURCE OF INCOME; ( C) THE ASSESSEE OFFERS NO EXPLANATION ABOUT SUCH EXCESS AMOUNT OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE ITA NO.1078/AHD/2009 M/S. TRIDENT CREATION PVT. LTD. VS DCIT, CC- 1(1), AHMEDABAD. 29 OPINION OF THE ASSESSING OFFICER, SATISFACTORY. WHEN THE ABOVE THREE CONDITIONS ARE SATISFIED, THEN THE EXCESS AMOUNT MAY BE ADDED TO THE INCOME OF THE ASSESSEE FOR SUCH FINANCIAL YEAR U/S 69B. 9.8.2. IN THIS CASE, THE INVESTMENT HAS BEEN FOUND TO BE MORE THAN WHAT IS RECORDED IN THE BOOKS OF ACCOU NT WHICH HAS NOT BEEN EXPLAINED BY THE APPELLANT. THE APPELLANT HAS NOT EXPLAINED SATISFACTORILY AS TO HO W THE COST OF THE SHOPS/OFFICES PURCHASED BY IT IS LESS T HAN THE COST OF SIMILAR PROPERTIES IN THE SAME BUILDING. IT HAS BEEN HELD IN THE CASE OF AMARKUMARI SURANA V. CIT [1997 226 ITR 344 (RAJ)] THAT THE ADDITION U/S. 69B, IN THE CIRCUMSTANCES OF THE CASE, COULD NOT BE INTERFERE W ITH WHERE NO EVIDENCES HAS BEEN ADDUCED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER AS TO WHY THE PLOT OF LAND HAS BEEN SOLD TO THE ASSESSEE FOR ROUGHLY AT HALF O F THE RATE THEN THE PREVALENT MARKET RATE. IN VIEW OF THE DISCUSSION ABOVE, I AM OF THE CONSIDERED VIEW THAT THE SECTION HAS RIGHTLY BEEN APPLIED BY THE A. O. IN TH E CASE OF THE APPELLANT. 9.9 IN VIEW OF DISCUSSION ABOVE, I AM OF THE CONSID ERED VIEW THAT NO INTERFERENCE IS CALLED FOR WITH REGARD TO THE ADDITION OF RS.1,30,88,000/- MADE BY THE A. O. IN T HE INCOME OF THE APPELLANT AS UNEXPLAINED INVESTMENT U /S. 69B OF THE I. T. ACT. THIS GROUND OF APPEAL, THEREF ORE, STANDS DISMISSED. 6. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW. HE H AS SUBMITTED THAT SHOPS AND OFFICE COMPLEX WERE ORIGINALLY BOOK ED IN THE NAME OF M/S. TRIDENT (INDIA) PVT. LTD. BUT LATER ON IT WAS DECIDED THAT THE SAID PROPERTY BE PURCHASED BY THE ASSESSEE M/S. TRIDENT CREATION PVT. LTD. THEREFORE, THE BUILDER RETURNED THE PAYMENT AL READY MADE TO ITA NO.1078/AHD/2009 M/S. TRIDENT CREATION PVT. LTD. VS DCIT, CC- 1(1), AHMEDABAD. 30 M/S. TRIDENT (INDIA) LTD. THE REVENUE DEPARTMENT CO NSIDERING THE DENIAL BY THE ASSESSEE COMPANY THAT NO ON MONEY W AS PAID CONDUCTED A SURVEY IN THE PREMISES OF THE ASSESSEE BUT NOTHING WAS FOUND AGAINST THE ASSESSEE. THE ASSESSEE ALWAYS DEN IED ANY PAYMENT OF ON MONEY IN CASH TO THE BUILDER. FURTH ER, AS PER MOU SIGNED BY THE SELLER WITH THE ASSESSEE COMPANY, IT IS CLEARLY MENTIONED THE SALE OF ALL THE PROPERTIES AT RS.60.4 0 LACS. THEN ON THE SAME DAY ON 05-05-2004 THERE CANNOT BE A QUESTION O F CASH PAYMENT SO AS BIG AS AN AMOUNT OF RS.20 LACS AS PER WRITING IN CASH COLUMN. THE MOU CLEARLY MENTIONED THE SALE CONSIDERATION AT RS.60.40 LACS. THEREFORE, THERE IS NO QUESTION OF MAKING SUBSEQUEN T PAYMENT IN CASH ON OR AFTER 5 TH MAY, 2004 (COPIES OF THE SAME ARE FILED IN THE PAPER BOOK TO SHOW CONSIDERATION OF RS.60.40 LACS). THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT SEARCH WAS CONDUCTED IN THE RESIDENTIAL PREMISES OF SHRI DEEPAK THAKKAR, PARTNE R OF M/S. DEV ENTERPRISES WHO IS NOT CONNECTED WITH THE ASSESSEE COMPANY. HE HAS REFERRED TO SEIZED DOCUMENTS REPRODUCED IN THE IMPUGNED ORDERS AND COPIES OF THE SAME ARE FILED IN THE PAPER BOOK AT PAGES 53 TO 60 WITH TRANSLATION AND SUBMITTED THAT THESE ARE DUMB PAPERS. SHRI JATIN PARIKH, DIRECTOR OF THE ASSESSEE COMPANY HAS DENIED MAKING ANY PAYMENT TO THE BUILDER OVER AND ABOVE THE AMOUNT ME NTIONED IN THE SAID DEED (PB- 46). IN THE SEIZED PAPERS CASH AND C HEQUE IS MENTIONED WHICH IS THE ONLY DOCUMENT FOUND IN SEARC H BUT NO EVIDENCE OF ACTUAL CASH PAYMENT WAS FOUND. NO HAND- WRITING OF ANY DIRECTOR WAS FOUND ON THE SEIZED PAPERS. THE A O RE LIED UPON COMPARABLE CASES WHO HAVE ALLEGEDLY MADE CASH PAYME NT OVER AND ABOVE THE SALE CONSIDERATION WERE NEVER CONFRONTED TO THE ASSESSEE. ITA NO.1078/AHD/2009 M/S. TRIDENT CREATION PVT. LTD. VS DCIT, CC- 1(1), AHMEDABAD. 31 EVEN IF, THESE PERSONS ACCEPTED CASH PAYMENT, NO AD DITION COULD BE MADE AGAINST THE ASSESSEE BECAUSE NO CORROBORATING EVIDENCE WAS FOUND AGAINST THE ASSESSEE. HE HAS SUBMITTED THAT S INCE NO SEARCH IS CONDUCTED IN THE CASE OF THE ASSESSEE AND SURVEY WA S CONDUCTED ONLY ON 18-02-2005 IN WHICH ALSO NO EVIDENCE, LOOSE PAPER AND INCRIMINATING EVIDENCE OF MAKING CASH PAYMENT WAS F OUND AGAINST THE ASSESSEE, THEREFORE, THERE IS NO INCRIMINATING EVIDENCE FOUND AGAINST THE ASSESSEE FOR THE PURPOSE OF MAKING THE ABOVE ADDITION. THE STATEMENT OF THE SELLER/BUILDER HAS NOT BEEN RE CORDED IN RESPECT OF THE SEIZED LOOSE PAPERS. THE ASSESSEE SOUGHT CRO SS EXAMINATION OF THE BUILDER AS WAS EXPLAINED BEFORE THE LEARNED CIT (A) AS WELL AS OTHER PERSONS BUT IT WAS NOT GRANTED. IN THE SEIZED PAPERS ONLY CASH IS MENTIONED BUT IT IS NOT MENTIONED IF CASH IS ACT UALLY PAID TO THE BUILDER. PB 71 IS THE COPY OF THE NOTE FILED IN T HE RETURN IN THE CASE OF ONE OF THE COMPARABLE CASE OF SHRI T. K. TEKWANI WHO SURRENDERED THE AMOUNT TO BUY PEACE AND AVOID LITIGATION. SUCH A STATEMENT WOULD NOT PROVE ANY ADMISSION OF PAYMENT OF ON MONEY TO THE BUILDER. PB 19 AND 20 ARE TRANSLATED COPY OF THE JANTRI AND W OULD ALSO SHOW ACTUAL MARKET RATE FOR PURCHASE OF SIMILAR PROPERTY WHICH TALLY WITH THE SALE CONSIDERATION IN THE CASE OF THE ASSESSEE. THE LOOSE PAPERS ARE NOT IN A SYSTEMATIC MANNER, THEREFORE, ARE THE DUMB DOCUMENT. SINCE THE STATEMENTS OF THE PERSONS OF THE BUILDER HAVE N OT BEEN RECORDED, THEREFORE, NO CASE IS MADE OUT FOR PAYMENT OF ANY ON MONEY TO THEM. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT THERE WERE 17 BUYERS OF THE FLATS BUT EXCEPT 4 PERS ONS NONE OTHER HAVE MADE ANY SURRENDER, SO THE RULE OF PROBABILITY WOULD TURN IN FAVOUR OF THE ASSESSEE THAT ASSESSEE HAS ALSO NOT M ADE ANY ITA NO.1078/AHD/2009 M/S. TRIDENT CREATION PVT. LTD. VS DCIT, CC- 1(1), AHMEDABAD. 32 PAYMENT OF ON MONEY. THE LEARNED COUNSEL FOR THE ASSESSEE FILED COPIES OF THE SALE DEEDS DATED 10-04-2008 TO SHOW T HAT AMOUNT OF RS.60.40 LACS HAVE BEEN PAID IN RESPECT OF THE PROP ERTY PURCHASED FROM THE BUILDERS THROUGH MOU. NO CASH IS PAID OVER AND ABOVE THE SALE CONSIDERATION MENTIONED IN THE SALE DEEDS AND MOU. HE HAS SUBMITTED THAT LOOSE PAPERS CONTAINED THE NAME OF T RIDENT (INDIA) WHICH IS NOT THE NAME OF THE ASSESSEE. THEREFORE, S UCH A LOOS PAPER CANNOT BE USED AGAINST THE ASSESSEE. THE LEARNED CO UNSEL FOR THE ASSESSEE SUBMITTED THAT COURTS HAVE BEEN CONSISTENT IN HOLDING THAT WHILE MAKING THE ADDITION U/S 69 OF THE IT ACT, REL IANCE ON THE ENTRIES OR NOTINGS OF OTHER PARTIES ARE NOT SUFFICIENT AT A LL. HE HAS SUBMITTED THAT IT IS ALSO SETTLED LAW THAT A O CANNOT MAKE AD DITION ON THE BASIS OF A STATEMENT OF THIRD PARTY UNLESS THERE IS A MAT ERIAL TO CORROBORATE SUCH STATEMENT. 6.1 HE HAS RELIED UPON THE FOLLOWING DECISIONS (COP IES FILED): 1) ORDER OF ITAT AHMEDABAD BENCH IN THE CASE OF IT O VS RAMESH CHANDRA H. PRAJAPATI ITA NO.827/AHD/1999 DAT ED 22-07- 2005 IN WHICH IT WAS HELD IT EMERGES FROM THE RECO RD THAT EXCEPT THE DISCLOSURE BY THE BUILDER, NO OTHER COGENT MATERIAL INDICATING THE ASSESSEE WAS PRESENT, THEREFORE, THE DELETION OF AD DITION BY THE CIT (APPEAL) CANNOT BE FOUND FAULT WITH. 2) ORDER OF ITAT AHMEDABAD BENCH IN THE CASE OF SM T. KAMLABEN A. PARIKH VS ITO ITA NO.436 AND 437/AHD/20 00 DATED 31- 10-2000 IN WHICH IT WAS HELD THAT THE TRIBUNAL CONS IDERING THE ENTIRE EVIDENCES I.E. STATEMENT OF THE DEVELOPERS AND OTHE R RELEVANT MATERIAL ON RECORD HELD THAT CASE OF UNEXPLAINED IN VESTMENT BY THE ASSESSEE WAS NOT ESTABLISHED. 3) DECISION OF BOMBAY HIGH COURT IN THE CASE OF MS. LATAMANGESHKAR 97 ITR 696 IN WHICH IT WAS HELD TRI BUNALS FINDING ITA NO.1078/AHD/2009 M/S. TRIDENT CREATION PVT. LTD. VS DCIT, CC- 1(1), AHMEDABAD. 33 OR APPRECIATION OF EVIDENCE ON RECORD, THAT ENTRIES IN THE LEDGER OF A FIRM WILL NOT REPRESENT ASSESSEES INCOME FROM UNDI SCLOSED SOURCES, ARE FINDING OF FACT NOT GIVING RISE TO ANY REFERABL E QUESTION. 4) DECISION OF GUJARAT HIGH COURT IN THE CASE OF C IT VS M. K. BROTHERS 163 ITR 249 IN WHICH IT WAS HELD AMOUN TS REPRESENTING PURCHASES COULD NOT BE ADDED AS INCOME, AS THERE WA S NO EVIDENCE TO CONCLUDE THAT TRANSACTION WAS BOGUS. 5) ORDER OF ITAT AHMEDABAD BENCH IN THE CASE OF AC IT VS PRABHAT OIL MILLS 52 TTJ 533 IN WHICH IT WAS HELD DAIRY SEIZED FROM A THIRD PARTY H INDICATED THE ALLEGED UNRECORDED SALE S TO THAT PARTY. MERE ENTRY IN THE ACCOUNT OF H WAS NOT SUFFICIENT T O PROVE THAT ASSESSEE INDULGED IN SUCH TRANSACTIONS WITHOUT BRIN GING ANY CORROBORATIVE MATERIAL AGAINST THE ASSESSEE. 6) ORDER OF ITAT AHMEDABAD BENCH IN THE CASE OF SHANKARLAL NEBHUMAL HUF VS DCIT 2 SOT 671 IN WHICH IT WAS HELD IN THE ABSENCE OF ANY MATERIAL ON RECORD TO INDICA TE THAT THE ASSESSEE WHO BELONG TO ONE FAMILY WHICH IS HAVING 5 0% SHARE IN THE VENDOR FIRM HAVE IN FACT PAID ANY ON MONEY TO IT IN RESPECT OF THE SHOPS PURCHASED BY THEM, ADDITION MADE ON ACCOUNT O F ALLEGED UNEXPLAINED INVESTMENTS IN THE PURCHASE OF SHOPS CA NNOT BE SUSTAINED, NOTWITHSTANDING THE ADMISSION BY THE SAI D FIRM THAT IT DID CHARGED ON MONEY FROM THE CUSTOMERS WHILE SELLING T HE SHOPS. 7) ORDER OF ITAT JODHPUR BENCH IN THE CASE OF J. R . C. BHANDARI VS ACIT 79 TTJ 1 IN WHICH IT WAS HELD A M ERE ENTRY IN A LOOSE SHEET FOUND IN THE POSSESSION OF ANOTHER THIR D PERSON, BY ITSELF, WITHOUT ANY SUPPORTIVE EVIDENCE OR THE SWORN STATEM ENT OF THE SAID PERSON HAS HARDLY ANY EVIDENTIARY VALUE. ADDITION I N THE HANDS OF THE ASSESSEE ON THE BASIS OF LOOSE SHEET NOT LEGALLY SU STAINABLE. 7. ON THE OTHER HAND, LEARNED D R RELIED UPON ORDER S OF THE AUTHORITIES BELOW. HE HAS SUBMITTED THAT WHEN CHEQU ES WERE RECEIVED BY THE BUILDER FROM THE ASSESSEE, CASH IS ALSO RECEIVED ON THE SAME TRANSACTION. CHEQUES HAVE BEEN NOTED BY TH E BUILDER, SO ON ITA NO.1078/AHD/2009 M/S. TRIDENT CREATION PVT. LTD. VS DCIT, CC- 1(1), AHMEDABAD. 34 PRINCIPLE OF PREPONDERANCE OF PROBABILITIES, IT IS PROVED CASH IS ALSO PAID BY THE ASSESSEE TO THE BUILDER. LEARNED D R S UBMITTED THAT EVEN IF MOU IS DATED 05-05-2004, BUT CASH IS ALWAYS PAID AS PER MUTUAL UNDERSTANDING OF THE PARTIES FOR WHICH NO RE CEIPTS ARE GIVEN. LEARNED D R SUBMITTED THAT COMPARABLE CASES WERE BR OUGHT ON RECORD WHO HAVE ADMITTED PAYMENTS OF ON MONEY IN CASH IN RESPECT OF THE SAME PROPERTY IN QUESTION TO THE SAME BUILDE R, THEREFORE, IT IS PROVED THAT ON MONEY WAS PAID FOR PURCHASE OF THE SHOPS/OFFICES. THE LEARNED D R SUBMITTED THAT SAME PAYMENTS ARE RE CORDED IN THE SEIZED PAPERS A-10 11. IF EVERYTHING IS TRUE IN T HE CASES OF OTHER COMPARABLE CASES, IT IS TRUE IN THE CASE OF THE ASS ESSEE ALSO. THE CASES RELIED UPON BY THE ASSESSEE ARE DISTINGUISHAB LE ON FACTS. LEARNED D R SUBMITTED THAT WHEN THE ASSESSEE FILED REPLY BEFORE THE LEARNED CIT (A) WOULD SHOW THAT THE COMPARABLE CASE S WERE CONFRONTED TO THE ASSESSEE. SINCE, ENTIRE MATERIAL WAS FOUND AGAINST THE ASSESSEE AND CONFRONTED TO THE ASSESSEE, THEREF ORE, THE A O DISCHARGED THE ONUS UPON HIM TO PROVE HIS CASE U/S 69 B OF THE IT ACT. THE ASSESSEE DID NOT SATISFACTORILY EXPLAINED THE ISSUE BEFORE THE AUTHORITIES BELOW AS TO HOW THE COST OF THE SHO PS/OFFICES PURCHASED WAS LESS AS COMPARED TO THE OTHER SIMILAR CASES IN THE SAME PROPERTY IN QUESTION. THEREFORE, THE DETAILED CONTAINED IN THE LOOSE PAPER IS CLEARLY AGAINST THE ASSESSEE TO PROV E THAT ASSESSEE PAID ON MONEY IN CASH TO THE BUILDER OVER AND ABO VE THE AMOUNT MENTIONED IN THE SALE DEEDS. LEARNED D R FILED COPY OF THE LETTER DATED 16-08-2010 ISSUED BY ACIT, CC-1 (1), AHMEDABA D WHEREIN 4 COMPARABLE PARTIES ACCEPTED PAYMENT IN CASH OVER AN D ABOVE THE AMOUNT OF CHEQUE TO THE SAME BUILDER (A-11). LEARNE D D R SUBMITTED ITA NO.1078/AHD/2009 M/S. TRIDENT CREATION PVT. LTD. VS DCIT, CC- 1(1), AHMEDABAD. 35 THAT THE ABOVE FACTS SUFFICIENTLY PROVE THE CASE AG AINST THE ASSESSEE THAT ASSESSEE PAID CASH AS WELL. LEARNED D R HOWEVE R, ADMITTED THAT A O HAS NOT RELIED UPON STATEMENT OF THE BUILDERS A GAINST THE ASSESSEE AND THAT NO SUCH COPIES HAVE BEEN RECEIVED BY HIM. LEARNED D R SUBMITTED THAT THE LOOSE PAPERS ARE IN SYSTEMATIC MANNER AND THAT THE NAME OF TRIDENT (INDIA) MENTION ED IN THE LOOSE PAPER IS OF THE SISTER CONCERN OF THE ASSESSEE. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSION AND MATE RIALS AVAILABLE ON RECORD. DURING THE COURSE OF HEARING O F THE APPEAL, ASSESSEE WAS DIRECTED TO FILE COPIES OF THE SALE DE EDS IN QUESTION WHICH HAVE BEEN FILED ON RECORD WHICH SHOW THE DATE OF DOCUMENTS 10-04-2008 AND THE TOTAL SALE CONSIDERATION PAID FO R PURCHASE OF PROPERTY BY THE ASSESSEE IS MENTIONED AT RS.60,40,2 97/-. SIMILARLY, THE LEARNED D R WAS DIRECTED TO INTIMATE ABOUT PROC EEDINGS AGAINST THE PERSON IN WHOSE CASE SEARCH WAS CONDUCTED AND I F ANY STATEMENTS OF COMPARABLE CASES HAVE BEEN RECORDED. LEARNED D R FILED COPY OF THE ASSESSMENT ORDER IN THE CASE OF F IRM M/S. DEV ENTERPRISES U/S 143 (3) OF THE IT ACT DATED 29-12-2 006 IN WHICH SHRI DEEPAK THAKKAR WAS THE PARTNER IN WHOSE CASE SEARCH WAS CONDUCTED. LEARNED D R SUBMITTED THAT NO ADDITION I S MADE ON ACCOUNT OF LOOSE ANNEXURE A-10 AND A-11, BUT THE SA ID FIRM MADE DISCLOSURE OF RS.74,44,290/- IN THE RETURN FILED ON 30-06-2006. IN THE CASE OF THE FIRM FURTHER ADDITION OF RS.5,51,000/- IS MADE. THE LEARNED D R ADMITTED THAT NO STATEMENT OF THE BUILDER HAS B EEN RELIED UPON BY THE A O AND THAT HE HAS NOT RECEIVED ANY COPY OF TH EIR STATEMENT IF ANY. AS REGARDS THE STATEMENT, IF ANY RECORDED IN T HE CASE OF ITA NO.1078/AHD/2009 M/S. TRIDENT CREATION PVT. LTD. VS DCIT, CC- 1(1), AHMEDABAD. 36 COMPARABLE CASES, LEARNED D R FILED COPY OF THE LET TER DATED 16-08- 2010 (SUPRA) IN WHICH IT IS NOWHERE MENTIONED IF ST ATEMENTS IN THE CASES OF COMPARABLE CASES HAVE BEEN RECORDED BY THE REVENUE DEPARTMENT. CONSIDERING THE FACTS OF THE CASE IN TH E LIGHT OF THE SUBMISSIONS OF THE PARTIES, WE MAY NOTE THAT THE A O IN THE ASSESSMENT ORDER IN THE CASE OF FIRM M/S. DEV ENTER PRISES IN WHICH SHRI DEEPAK THAKKAR AND SHRI SANJAY THAKKAR ARE PAR TNERS HAVE CONSIDERED SEIZED PAPER A-10 AND A-11 REGARDING PAY MENT OF ON MONEY BUT FINALLY MADE THE ADDITION OF RS.5,51,000/ - ONLY AFTER SATISFYING FROM THE RECONCILIATION STATEMENT. NO SI MILAR ADDITION HAS BEEN MADE AS HAS BEEN MADE IN THE CASE OF THE ASSES SEE. IT MAY ALSO BE NOTED THAT IN THE CASE OF THE FIRM DESPITE RECOVERY OF THE LOOSE PAPERS, THEY HAVE DENIED THEIR HAND-WRITING IN THE SEIZED PAPERS AND HAVE NOT ACCEPTED RECEIPT OF ANY ON MONEY FROM THE ASSESSEE. IT, THEREFORE, FOLLOWS THAT RECIPIENT AND PAYEE BOTH HA VE DENIED RECEIPT AND PAYMENT OF ALLEGED ON MONEY IN CASH. THE ABOV E FACTS NOTED IN THE ASSESSMENT ORDER IN THE CASE OF THE FIRM M/S. D EV ENTERPRISES PROVE THAT THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN MAKING THE HUGE ADDITION AGAINST THE ASSESSEE. AS PER THE SEIZED PA PERS THE AMOUNT OF SALE CONSIDERATION THROUGH CHEQUES PAID IS RS.51 LACS, BUT ACCORDING TO THE MOU AND SALE DEEDS FILED ON RECORD THE TOTAL CONSIDERATION OF RS.60,40,297/- HAVE BEEN SETTLED A ND PAID BY THE ASSESSEE COMPANY AND NOT BY TRIDENT (INDIA) WHOSE N AME IS MENTIONED IN THE SEIZED PAPERS. IT CONTRADICTS AND CREATES DOUBT IN THE AUTHENTICITY OF THE SEIZED PAPERS. IT IS UNDISP UTED FACT THAT THE MOU WAS SIGNED BY THE SELLER ON 05-05-2004 WHICH CL EARLY MENTIONS THE SALE OF ALL THE PROPERTIES AT RS.60.40 LACS, TH EREFORE, ON THE SAME ITA NO.1078/AHD/2009 M/S. TRIDENT CREATION PVT. LTD. VS DCIT, CC- 1(1), AHMEDABAD. 37 DAY THERE IS NO QUESTION OF MAKING CASH PAYMENT OF RS.20 LACS AS PER THE WRITINGS MENTIONED IN THE SEIZED PAPERS IN CASH COLUMN. FURTHER, WHEN THE ASSESSEE COMPANY HAVE DULY SIGNED ENFORCEA BLE MOU, STATING THEREIN THAT THE SELLER SHALL HAVE TO SELL THE PROPERTY AT RS.60.40 LACS, THERE IS NO QUESTION OF MAKING SUBSE QUENT PAYMENTS IN CASH ON VARIOUS DATES AS MENTIONED IN THE LOOSE PAPERS. THE ABOVE DETAILS CONTAINED IN LOOSE SEIZED PAPERS AR E AGAINST HUMAN PROBABILITY. IT MAY ALSO BE NOTED HERE THAT SINCE N O SEARCH WAS CONDUCTED IN THE CASE OF THE ASSESSEE AND NO EVIDEN CE WAS FOUND DURING THE COURSE OF SURVEY AGAINST THE ASSESSEE, T HEREFORE, THE PRESUMPTIONS U/S 132 (4A) AND SECTION 292 C COULD N OT BE DRAWN AGAINST THE ASSESSEE. THE FINDINGS OF THE A O WOULD SHOW THAT A O HAS ASSUMED CERTAIN FACTS WHICH ARE NOT ON RECORD O F THE A O OR THAT THE SAME ARE NOT SUPPORTED BY ANY MATERIAL ON RECOR D. A O HAS NOT BROUGHT SUFFICIENT AND COGENT MATERIAL/EVIDENCE AGA INST THE ASSESSEE TO PROVE THAT ASSESSEE MADE PAYMENT OF ON MONEY I N CASH OVER AND ABOVE THE CONSIDERATION SHOWN IN THE MOU AND SA LE DEEDS. NO STATEMENT OF ANY PERSON HAS BEEN RECORDED IN WHOSE CASE LOOSE PAPERS WERE RECOVERED TO EXPLAIN THE ENTRIES CONTAI NED THEREIN. LEARNED D R ADMITTED THAT A O HAS NOT RELIED UPON A NY STATEMENT OF THE BUILDER AGAINST THE ASSESSEE AND THAT NO SUCH C OPY HAS BEEN RECEIVED BY HIM. SIMILARLY, NO STATEMENT IN THE COM PARABLE CASES HAS BEEN PRODUCED BEFORE US. IT WOULD PROVE THAT EVEN I N THE COMPARABLE CASES NO STATEMENT IS RECORDED AGAINST THE INTEREST OF THE ASSESSEE. THE SURRENDER MADE IN 4 COMPARABLE CASES HAS NOT BE EN CONFRONTED TO THE ASSESSEE. LEARNED COUNSEL FOR THE ASSESSEE F ILED COPY OF THE NOTE ATTACHED WITH THE RETURN OF INCOME IN THE CASE OF SHRI T. K. ITA NO.1078/AHD/2009 M/S. TRIDENT CREATION PVT. LTD. VS DCIT, CC- 1(1), AHMEDABAD. 38 TEKWANI IN WHICH IT WAS MENTIONED THAT HE HAS SURRE NDERED THE AMOUNT TO BUY PEACE TO AVOID LITIGATION. SUCH A STA TEMENT CANNOT BE SAID TO BE INCRIMINATING IN NATURE AGAINST THE INTE REST OF THE ASSESSEE. HOW ADMISSION IN COMPARABLE CASES FOR PAYMENT OF O N MONEY IN THEIR CASES IS ADMISSIBLE AGAINST THE ASSESSEE IS N OT KNOWN IN LAW BECAUSE THEY HAVE NEVER ADMITTED THAT ASSESSEE PAID ANY ON MONEY IN CASH. THE RATES OF ASSESSEE AS COMPARED W ITH OTHERS AT GROUND FLOOR HAVE NOT BEEN DISPUTED. RATES OF THE A SSESSEE ARE HIGHER AT FIRST FLOOR. A O IN THE REMAND REPORT (PA RA 4 OF REMAND REPORT NOTED AT PAGE 18 OF THIS ORDER) ADMITTED THAT HE HA S NOT VERIFIED THE RATES, THEREFORE, NO ADVERSE INFERENCE CAN BE DRAWN AGAINST THE ASSESSEE. THE ABOVE FACTS PROVE THAT THERE IS NO EV IDENCE ON RECORD THAT THE SEIZED PAPER IS CONNECTED WITH THE ASSESSE E OR THAT ASSESSEE HAS IN FACT MADE THE CASH PAYMENT TO THE B UILDERS OVER AND ABOVE THE AMOUNT MENTIONED IN THE DOCUMENTS. NO EVI DENCE OF ACTUAL PAYMENT OF CASH WAS FOUND. NO EVIDENCE OF EX CESS AMOUNT PAID WAS FOUND. NO HAND-WRITING OF THE ASSESSEES D IRECTOR OR CONNECTED PERSON WAS FOUND ON THE SEIZED PAPERS. TH E DIRECTOR OF THE ASSESSEE COMPANY NEVER ADMITTED PAYMENT OF ON M ONEY IN CASH IN HIS STATEMENT. SINCE, ASSESSEE IS A PURCHASER, T HEREFORE, SECTION 50 C OF THE IT ACT WOULD ALSO NOT APPLY IN ITS CAS E AS IS HELD IN THE CASE OF ITO VS VENU PROTEINS INDUSTRIES REPORTED IN 4 ITR (TRIBUNAL) 602 (AHMEDABAD). IT MAY ALSO BE NOTED HERE THAT IN THE SEIZED PAPERS THE NAMES OF SHRI JATIN PARIKH/ TRIDENT (INDIA) IS MENTIONED BUT THE NAME OF THE ASSESSEE IS M/S. TRID ENT CREATIONS PVT. LTD., WHICH IS NOT MENTIONED IN THE SEIZED PAP ERS WOULD PROVE THAT THE SEIZED PAPERS DO NOT BELONG TO THE ASSESSE E. THERE IS ALSO ITA NO.1078/AHD/2009 M/S. TRIDENT CREATION PVT. LTD. VS DCIT, CC- 1(1), AHMEDABAD. 39 NO MENTION IN THE LOOSE PAPERS IF ANY CASH PAYMENT IS MADE BY THE ASSESSEE COMPANY TO THE BUILDERS. THE BUILDERS/SELL ERS FROM WHOSE POSSESSION SEIZED PAPERS HAVE BEEN RECOVERED HAVE N OT MADE ANY STATEMENT AGAINST THE ASSESSEE, THEREFORE, THE ENTR IES OR NOTINGS CONTAINED IN THE LOOSE PAPERS FOUND FROM THE POSSES SION OF THE BUILDERS ARE NOT SUFFICIENT TO MAKE THE ADDITION AG AINST THE ASSESSEE. THERE IS NO OTHER CORROBORATIVE MATERIAL OR INDEPEN DENT EVIDENCE AVAILABLE ON RECORD AGAINST THE ASSESSEE. THE SUBMI SSIONS OF THE LEARNED D R ARE BASED UPON ASSUMPTION ONLY THAT SIN CE 4 PARTIES MADE PAYMENT OF ON MONEY TO THE BUILDER, THEREFOR E, THERE IS A PRESUMPTION AGAINST THE ASSESSEE THAT ASSESSEE ALSO PAID ON MONEY IN CASH . BUT, EQUALLY OTHER BUYERS HAVE NOT PAID ANY ON MONEY TO THE BUILDERS. SINCE THE SEIZED PAPERS ARE NOT IN THE NAME OF THE ASSESSEE AND IS ALSO HAVING DIFFERENT AMOUNT OF CHEQUE AS AGAINST THE SALE CONSIDERATION SHOWN IN THE MOU AND THE SALE DEEDS, THEREFORE, THE PRINCIPLE OF PREPONDERANCE OF PROBAB ILITY WOULD ALSO NOT APPLY AGAINST THE ASSESSEE. SINCE, THE A O WANTED T O TAX THE ALLEGED PAYMENT OF ON MONEY IN THE CASE OF THE ASSESSEE; THEREFORE, BURDEN WAS UPON THE A O TO PROVE THAT ASSESSEE MADE PAYMENT OF ON MONEY FROM UNDISCLOSED SOURCES, WHICH HAS NOT BEEN DISCHARGED IN THIS CASE. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT THE A O HAS NOT B ROUGHT SUFFICIENT MATERIAL AGAINST THE ASSESSEE TO MAKE THE ABOVE ADD ITION. THE A O MADE ADDITION MERELY ON SUSPICION AND ASSUMPTION OF FACTS, WHICH CANNOT TAKE PLACE OF LEGAL PROOF. IT IS THUS A CAS E OF NO EVIDENCE FOR MAKING THE ADDITION. WE ARE, THEREFORE, OF THE VIEW THAT THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN MAKING THE ADDITION AGA INST THE ASSESSEE. ITA NO.1078/AHD/2009 M/S. TRIDENT CREATION PVT. LTD. VS DCIT, CC- 1(1), AHMEDABAD. 40 WE ACCORDINGLY, SET ASIDE THE ORDERS OF THE AUTHORI TIES BELOW AND DELETE THE ENTIRE ADDITION. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED ON 01-09-2010. SD/- SD/- (N. S. SAINI) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 01/09/2010 LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, 6. GUARD FILE BY ORDER //TRUE COPY// DY.R/AR, I TAT, AHMEDABAD
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