ACIT, Central Circle - XX, Kolkata, Kolkata V. M/s. Prem Lal Jain, Kolkata

ITA 1142/KOL/2012

• Counselvise Citation: 114223514 RSA 2012
• Duration Of Justice: 3 year(s) 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2015
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 1994-1995
• Appeal Filed On: 08-08-2012
• Court: TRIBUNAL
• Department Lawyers: UDAY KUMAR SARKAR JCIT LD
• Assessee Lawyers: S M SURANA LD
• Keywords: Unexplained investment; Unexplained expenditure; Business income; Search and seizure; Document seized; Documents seized
• Section: 69; 69C

Judgement Text

IT.A NO.1142/KOL/2012-C_AM M/S. PREM LAL JAIN 1 IN THE INCME TAX APPELLATE TRIBUNAL, C BENCH, KO LKATA BEFORE : SHRI M. BALAGANESH, ACCOUNTANT MEMBER, AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A NO. 1142/KOL/2012 A.Y 1994-95 A.C.I.T, CENTRAL CIRCLE-XX, KOLKATA VS. M/S. PREM LAL JAIN PAN: ACVPJ 2348D (APPELLANT/DEPARTMENT) (RESPONDENT/ASSESSEE) FOR THE APPELLANT: SHRI UDAY KUMAR SARKAR, JCIT, LD.AR FOR THE RESPONDENT : SHRI S.M SURANA, ADVOCATE, LD.AR DATE OF HEARING: 15-10-2015 DATE OF PRONOUNCEMENT: 27 -11 -2015 ORDER SHRI M.BALAGANESH, AM THIS APPEAL OF THE REVENUE ARISES OUT OF THE ORDE R OF THE LEARNED CIT(A), CENTRAL-III, KOLKATA IN APPEAL NO. 219/CC-XX/CIT(A) C-III/2006-07/KOL DATED 31-05- 2012 FOR THE ASST YEAR 1994-95 PASSED AGAINST THE O RDER OF ASSESSMENT FRAMED BY THE LEARNED AO U/S.147/144/254/143(3) OF THE INCOME TA X ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 2. THE FIRST ISSUE TO BE DECIDED IN THIS APPEAL I S THAT WHETHER AN ADDITION IN THE SUM OF RS. 1,95,93,435/- TOWARDS INVESTMENT IN SHARES COU LD BE MADE U/S 69 OF THE ACT IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE BRIEF FACTS ARE THAT THE ASSESSEE IS AN IND IVIDUAL AND WAS SUBJECTED TO SEARCH AND SEIZURE OPERATION IN HIS RESIDENTIAL AND BUSINE SS PREMISES ON 26.7.1994. THERE WAS A FAMILY PARTITION ON 25.1.1991 , PARTITION DEED OF W HICH WAS FOUND IN THE COURSE OF SEARCH IT.A NO.1142/KOL/2012-C_AM M/S. PREM LAL JAIN 2 OF THE ASSESSEES PREMISES AND ANOTHER COPY IN THE PREMISES OF THE ASSESSEES FATHER WHICH WAS ALSO SEARCHED. THIS FACT WAS DULY ACCEPT ED BY THE DEPARTMENT AS MENTIONED IN ASSESSMENT ORDER FOR ASST YEAR 1995-96 WHEREIN IT W AS ALSO MENTIONED THAT THE ASSESSEE RECEIVED THE BUSINESS OF M/S JAIN FINANCE CORPORATI ON (JFC) IN FAMILY PARTITION WHICH HAD SUBSTANTIAL CAPITAL INVESTMENT OF ITS OWN. ACC ORDINGLY, THE ASSESSEE BECAME THE PROPRIETOR OF JFC PURSUANT TO PARTITION. INITIALLY THE ASSESSEE WAS OF THE OPINION THAT THE SAID INCOME FROM JFC WOULD BE TAXED ONLY IN H IS HU F CAPACITY AND NOT AS INDIVIDUAL. LATER ON HE AGREED TO THE CORRECT POSITION OF LAW A ND ACCEPTED TO THE FACT THAT THE INCOME FROM JFC (A PROPRIETARY CONCERN OF ASSESSEE) SHALL BE TAXABLE ONLY IN HIS INDIVIDUAL CAPACITY. M/S JAIN FINANCE CORPORATION IS ENGAGED IN THE BUSINESS OF PROVIDING FINANCE FOR HIRE PURCHASE TRANSACTIONS IN RELATION TO AUTOM OBILE INDUSTRY. THE ASSESSEE CLAIMED THAT THE CAPITAL AT THE BEGINNING OF THE ASST YEAR 1992-93 CAME FROM THE PARTITION AND THE SAME WAS RECORDED IN THE REGULAR BOOKS OF ACCOUNT R ELATED TO ASST YEAR 1992-93 TO ASST YEAR 1995-96 OF JFC, WHICH WERE SEIZED IN THE COURS E OF SEARCH. THE SAID CAPITAL WAS NOT ACCEPTED BY THE LEARNED AO IN THE ASSESSMENT PR OCEEDINGS BUT THE SAME WERE ACCEPTED BY LEARNED CITA IN ASST YEARS 1992-93 ; 19 93-94 AND 1995-96. IT WAS FURTHER CLAIMED THAT THERE ARE NO APPEALS PENDING FOR THESE ASST YEARS AND MATTER HAS REACHED FINALITY. 3.1. THE LEARNED AO MADE AN ADDITION OF RS. 1,95,93 ,435/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN SHARES AND SHARE APPLICATION MONEY DU RING THE ASSESSMENT YEAR UNDER APPEAL. THIS ADDITION WAS PRIMARILY MADE BASED ON THE SEIZED DOCUMENT REFERENCE JFC 14 AND JFC 15 REPRESENTING EXERCISE BOOKS CONTAININ G DETAILS OF INVESTMENT IN SHARES WHICH WAS FURTHER CORROBORATED BY SEIZED DOCUMENTS VIDE PJ 38 AND PJ 43. ON FIRST APPEAL, THE LEARNED CITA DELETED THIS ADDITION APPR ECIATING THE CONTENTIONS OF THE ASSESSEE THAT THE ENTIRE INVESTMENT IN SHARES HAVE BEEN DULY ACCOUNTED FOR IN THE BOOKS OF JAIN FINANCE CORPORATION WHICH IS ALSO PART OF THE SEIZED RECORDS AND WHICH WAS ALSO VERIFIED BY THE LEARNED AO IN REMAND PROCEEDINGS. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUND:- IT.A NO.1142/KOL/2012-C_AM M/S. PREM LAL JAIN 3 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , LD.CIT(A) ERRED IN DELETING THE ADDITION OF RS.1,95,93,435/- MADE BY THE AO U/S. 69 OF THE INCOME TAX ACT TOWARDS INVESTMENT IN SHAR ES WHEN THE ASSESSEE FAILED TO ESTABLISH THE GENUINENESS OF THE TRANSACTIONS REPRESENTING INFLOW OF FUNDS SO INVESTED AND ALSO T HE IDENTITY AND CREDITWORTHINESS OF THE PERSONS PAYING SUCH AMOUN T TO THE ASSESSEE. 3.2. THE LEARNED DR VEHEMENTLY SUPPORTED THE ORDE R OF THE LEARNED AO. IN RESPONSE TO THIS, THE LEARNED AR STATED THAT THE ENTIRE INVE STMENTS IN SHARES WERE DULY ACCOUNTED IN THE BOOKS OF JFC AND WHICH IS ALSO REFLECTED IN THE CASH BOOK, BANK STATEMENTS AND JOURNAL VIDE SEIZED DOCUMENT REFERENCE JFC 1 AND JF C 2 . HE FURTHER ARGUED THAT THE LEARNED AO DESPITE BEING GIVEN ANOTHER OPPORTUNITY TO EXAMINE THE SEIZED DOCUMENTS DURING REMAND PROCEEDINGS ARRIVED AT THE SAME CONCL USION EVEN AFTER VERIFICATION OF THE RELEVANT SEIZED DOCUMENTS WHICH ARE QUITE STARING A ND CONCLUSIVE THAT THE ENTIRE INVESTMENT IN SHARES HAVE BEEN DULY ACCOUNTED IN TH E BOOKS OF JFC. THIS ATTITUDE OF THE LEARNED AO ONLY GOES TO PROVE THAT THE ENTIRE ASSES SMENT HAS BEEN APPROACHED BY THE LEARNED AO WITH A PRECONCEIVED NOTION TO MAKE AN AD DITION SOMEHOW OR OTHER WHICH ONLY REFLECTS THE TOTAL BIASED AND PREJUDICIAL APPR OACH OF THE LEARNED AO. THE LEARNED AR ALSO RELIED ON THE DETAILED GENERAL WRITTEN SUBM ISSIONS MADE BEFORE THE LEARNED CITA IN PAGES 3 TO 5 OF HIS ORDER TO EXPLAIN THE EN TIRE ADDITIONS MADE IN THE ASSESSMENT. 3.3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PER USED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT THE ASSESSEE IS A PROPRIETOR OF M/S JA IN FINANCE CORPORATION AND THAT THE REGULAR BOOKS OF ACCOUNT NAMELY, CASH BOOK AND LED GER FOR ASSESSMENT YEAR 1992-93 TO 1995-96 OF THE CONCERN WERE SEIZED BY THE DEPARTMEN T DURING THE COURSE OF SEARCH AND SEIZURE ACTION. IT WAS SUBMITTED THAT IN HE ORIGIN AL RETURNS FILED BEFORE THE DATE OF SEARCH IN HIS INDIVIDUAL CAPACITY BY THE ASSESSEE, THE INC OME OR THE CAPITAL LYING INVESTED WITH M/S. JAIN FINANCE CORPORATION WAS NOT DISCLOSED IN ANY OF THE ASSESSMENT YEARS I.E IN ASSESSMENT 1992-93 TO 1995-96 NOR THE FIGURES OF C APITAL AND BALANCE SHEET OF JAIN FINANCE CORPORATION WERE INCORPORATED OR ATTACHED. THIS, AS PER THE ASSESSEE, WAS IT.A NO.1142/KOL/2012-C_AM M/S. PREM LAL JAIN 4 BECAUSE JAIN FINANCE CORPORATION WAS EARLIER A FAMI LY BUSINESS AND THE ASSESSEE RECEIVED THE BUSINESS OF JAIN FINANCE CORPORATION AND THE C APITAL THEREIN, ON FAMILY PARTITION DURING THE PERIOD RELEVANT TO THE ASSESSMENT YEAR 9 1-92. IT WAS FURTHER SUBMITTED THAT THE SAID FAMILY PARTITION DEED ALSO SEIZED IN THE COUR SE OF SEARCH AND THAT THE FAMILY PARTITION ON THE BASIS OF THE SAID PARTITION DEED HAS BEEN A CCEPTED BY THE DEPARTMENT IN THE CASE OF SRI K.P. JAIN, BROTHER OF THE ASSESSEE AND ANOTHER MEMBER OF HUF (ASSESSED BY THE SAME AO), WHO ALSO RECEIVED SUBSTANTIAL SUM ON PARTITIO N OF THE HUF IN 1991-92. A COPY OF ITATS ORDER IN THE CASE OF SRI K.P JAIN WAS ALSO FILED IN THAT RESPECT. THE A/R SUBMITTED THAT THE BOOKS OF ACCOUNT OF M/S. JAIN F INANCE CORPORATION FROM ASSESSMENT YEAR 1992-93, AFTER IT WAS TAKEN OVER BY THE ASSES SEE, WERE REGULARLY MAINTAINED BUT SINCE THE ASSESSEE FELT THAT THE INCOME FROM JAIN FINANCE CORPORATION SHALL BE ASSESSABLE IN THE STATUS OF HUF, THE RETURN OF THE SAID HUF HA S TO BE FILED SEPARATELY, THEREFORE, HE DID NOT INCLUDE THE INCOME AND THE CAPITAL IN TH E SAID PROPRIETORSHIP CONCERN IN THE RETURN FILED BY HIM IN INDIVIDUAL CAPACITY. IT WAS SUBMITTED THAT ALL THE REGULAR BOOKS FROM ASSESSMENT YEAR 1992-93 TO 1995-96 WERE SEIZED IN THE COURSE OF SEARCH AND WHEN THE DEPARTMENT ASSESSED THE SAID INCOME IN HIS INDI VIDUAL HANDS ON THE BASIS OF THE SEIZED BOOKS OF ACCOUNT OF JAIN FINANCE CORPORATIO N FROM ASSESSMENT YEAR 92-93, THE ASSESSEE DID NOT OBJECT TO IT. 3.4 THE A/R CONTENDED THAT ADDITIONS ON ACCOUNT OF UNEXPLAINED INVESTMENTS WERE MADE IN ASSESSEES CASE FOR THE ASSESSMENT YEAR 199 2-93 ALSO, HOWEVER, THE CIT(A), IN HIS ORDER DATED 11.4.2002 FOR THAT ASSESSMENT YEAR IN APPEAL NO.53/CCXX/CIT(A)/C- III/98-99, TOOK NOTE OF THE FACT THAT AS ON 01.04.9 1 THE OPENING CAPITAL OF THE ASSESSEE, AS PER THE SEIZED BOOKS OF ACCOUNTS OF JAIN FINANCE CO RPORATION, WAS RS.5,55,51,130/-, HAVING SUBSTANTIAL INVESTMENT THEREIN THOUGH THE O RIGINAL RETURN FILED BEFORE THE DATE OF SEARCH FOR THE ASSESSMENT YEAR 1992-93 WAS WITHOUT INCLUDING THE BUSINESS INCOME AND CAPITAL IN THE BALANCE SHEET OF JAIN FINANCE CORPOR ATION. THE CAPITAL OF THE ASSESSEE, APART FROM THE CAPITAL IN JAIN FINANCE CORPORATION, WAS O NLY RS.3,05,767/- AS ON 31.3.92. IT WAS SUBMITTED THAT WHILE DELETING THE ADDITION IN A SSESSMENT YEAR 1992-93 THE CIT(A) LOOKED INTO THE CASH BOOK FOR THAT YEAR AND ALSO LO OKED INTO THE RECEIPTS AND PAYMENTS OF IT.A NO.1142/KOL/2012-C_AM M/S. PREM LAL JAIN 5 THE BUSINESS JAIN FINANCE CORPORATION IN THE SEIZE D CASH BOOK AND LEDGER. THEREFORE, THE CAPITAL OF THE ASSESSEE IN JAIN FINANCE CORPORATION WAS DULY ACCEPTED BY THE DEPARTMENT IN ASSESSMENT YEAR 92-93. IT WAS, THEREFORE, CONTEN DED THAT SUCH CAPITAL CONTINUED IN THE FOLLOWING YEARS ALSO. IT WAS ALSO SUBMITTED THAT A TRIAL BALANCE FOR THE ASSESSMENT YEAR 1993-94 WAS ALSO PREPARED FROM THE SEIZED BOOKS OF ACCOUNT AND AS PER SUCH TRIAL BALANCE THE CAPITAL OF THE ASSESSEE WAS RS.6,61,96,925/- AS ON 31.3.93. THE SAID TRIAL BALANCE WAS FILED BEFORE THE CIT(A) DURING THE COURSE OF APPELL ATE PROCEEDINGS IN THE FIRST ROUND FOR THE ASSESSMENT YEAR IN QUESTION, AS IS APPARENT FRO M PAGE 5 OF THE CIT(A)S ORDER DATED 14.8.02 IN APPEAL NO.52/CC-XX WHEREIN THE CIT(A) HA S SPECIFICALLY OBSERVED THAT THE OPENING CAPITAL OF THE ASSESSEE AS ON 01.04.93 WAS RS.6,61,96,925/-. IT WAS STATED THAT THE SAID TRIAL BALANCE WAS ALSO FILED BEFORE THE AO ON 28.4.2005 IN THE COURSE OF PRESENT ASSESSMENT PROCEEDINGS AND THE VERACITY AND CORREC TNESS OF THE SAME HAS NOT BEEN DISPUTED BY THE AO. IT WAS, SUBMITTED THAT THE OPEN ING CAPITAL OF THE ASSESSEE, WHICH WAS RS.6,61,96,925/-, REMAINED UNDISPUTED. IT WAS FURTH ER SUBMITTED THAT THE BOOKS OF ACCOUNT, BEING CASH BOOK AND LEDGER FOR THE ASSESSM ENT YEAR 94-95, WERE ALSO LYING SEIZED WITH THE DEPARTMENT AND IT WAS ON EXAMINATIO N OF THOSE BOOKS OF ACCOUNT THAT THE CIT(A) FOUND THAT ALL THE INVESTMENTS, WHICH WERE C ONSIDERED BY THE AO AS UNRECORDED AND UNEXPLAINED, DULY RECORDED IN THE CASH BOOK AND LEDGER FOR THE ASSESSMENT YEAR 1994- 95. THE CIT(A), THEREFORE, DELETED THE ADDITIONS. I T WAS FURTHER SUBMITTED THAT AS PER THE OBSERVATIONS AND DIRECTIONS OF THE ITAT THE ASSESS EE FILED COPIES OF ALL THE PAPERS THAT WERE FILED BEFORE THE CIT(A) EVEN THOUGH THE SAME WERE COPIES OF THE SEIZED PAPERS ONLY WHICH WERE LYING WITH THE AO HIMSELF. IT WAS SUBMIT TED THAT THE DETAILS OF DATE WISE INVESTMENT DULY RECORDED IN THE SEIZED BOOKS OF ACC OUNTS OF JAIN FINANCE CORPORATION WERE ALSO FILED (WHICH INVESTMENTS WERE TREATED BY THE AO AS UNDISCLOSED IN THE ORIGINAL ASSESSMENT AS WELL AS IN THE REASSESSMENT). COPIES OF THE DETAILS OF INVESTMENTS WERE AGAIN FILED IN THE COURSE OF APPELLATE PROCEEDINGS. IT WAS SUBMITTED THAT THE AO HAS REPEATED THE VERY SAME ADDITIONS ON EXACTLY IDENTIC AL GROUNDS THAT THE SOURCE OF THESE INVESTMENTS WERE NOT EXPLAINED. IT WAS SUBMITTED TH AT WHILE DOING SO THE AO HAS IGNORED THE DETAILS FILED BEFORE HIM AS WELL AS THOSE AVAIL ABLE WITH HIM AND DULY RECORDED IN THE IT.A NO.1142/KOL/2012-C_AM M/S. PREM LAL JAIN 6 SEIZED BOOKS OF ACCOUNTS BEING CASH BOOK AND LEDGER . IT WAS SUBMITTED THAT THE AO HAS NOT CONTROVERTED THE CONTENTION OF THE APPELLANT TH AT ALL THESE INVESTMENTS WERE DULY RECORDED IN THE CASH BOOK OF JAIN FINANCE CORPORATI ON. IT WAS SUBMITTED THAT SIMILAR ADDITIONS ON EXACTLY SAME GROUNDS WERE MADE IN ASSE SSMENT FOR ASSESSMENT YEAR 1992-93 AS WELL AS IN ASSESSMENT YEAR 1995-96 AND RELYING O N THE SEIZED CASH BOOKS OF JAIN FINANCE CORPORATION FOR THOSE YEARS, THE CIT(A) DEL ETED THE ADDITIONS AND THE SAID ORDER OF THE LD.CIT(A) WAS CONFIRMED BY THE ITAT. IT WAS SUBMITTED THAT THE CAPITAL OF OVER RS. 6 CRORES WAS ACCEPTED IN ASSESSMENT YEAR 1992-93, 1993-94 AND 1995-96, THEREFORE, THERE WAS NO REASON NOT TO ACCEPT THE SAID CAPITA L IN ASSESSMENT YEAR 1994-95. THE ASSESSEE ALSO FILED DETAILS OF DATE-WISE INVESTMENT S AS RECORDED IN THE SEIZED CASH BOOK AND LEDGER AND SUBMITTED THAT THE AO HAS NOT BROUGH T ON RECORD ANY EVIDENCE TO SHOW THAT THOSE DETAILS, PREPARED FROM THE SEIZED BOOKS AND WHICH WERE ALSO EXAMINED BY THE CIT(A) IN THE FIRST ROUND, WERE INCORRECT EVEN THOU GH THE AO HAD ADEQUATE TIME AND OPPORTUNITY TO EXAMINE AND COMPARE SUCH DETAILS WIT H SEIZED DOCUMENTS AND BOOKS LYING WITH HIM AND FOR WHICH SPECIFIC DIRECTIONS WERE GIV EN BY THE ITAT. 3.5 WE FIND THAT THE LEARNED CIT(A) HAD DELETED THE ADDITION BY MAKING THE FOLLOWING OBSERVATIONS :- AS PER THE ASSESSEE, THE INVESTMENT WERE RECORDED IN THE CASH BOOK MARKED JFC/1, BANK STATEMENT AND JOURNAL MARKED JFC /2 THAT WERE SEIZED BY THE DEPARTMENT DURING THE COURSE OF SEARCH. THE INVESTMENT IN SHARES WAS MADE IN VARIOUS NAMES AND THE ENTIRE FUNDS FOR ACQUISITION OF SHARES AND SHARE APPLICATION MONEY WERE CLAIMED TO BE OUT OF THE FUNDS OF JAIN FINANCE CORPORATION AND RECORDED IN THE REGULAR CA SH BOOK LYING SEIZED WITH THE DEPARTMENT. THE ASSESSEES COUNSEL ARGUED THAT EXAMINATION OF THE ABOVE MENTIONED SEIZED DOCUMENTS AND BOOKS OF A CCOUNT WOULD ESTABLISH THAT SOURCE OF ALL INVESTMENTS MADE IN SH ARES AND THE SHARE APPLICATION MONEY STOOD EXPLAINED, AND THEREFORE, T HE SHARES AND THE SHARE APPLICATION MONEY COULD NOT BE TREATED AS UNEXPLAIN ED INVESTMENT. THE A/R ALSO EXPLAINED THAT HIS OPENING CAPITAL FOR THE REL EVANT YEAR, AS PER THE BALANCE SHEET PREPARED ON THE BASIS OF SEIZED LEDG ER MARKED JFC/3, WAS RS.6,61,96,925/- AND THE RECEIPTS IN THE CASH BOOK REPRESENTED REALIZATION FOR THE DEBTORS WHICH WAS RECEIVED BY WAY OF INSTAL LMENTS IN RESPECT OF THE LOANS GIVEN UNDER HIRE PURCHASE AGREEMENT TO THE D EBTORS. IT WAS ALSO IT.A NO.1142/KOL/2012-C_AM M/S. PREM LAL JAIN 7 CONTENDED THAT AS INVESTMENTS WERE DULY RECORDED IN THE BOOKS AND HAVE BEEN EXPLAINED FROM THE SEIZED BOOKS OF ACCOUNTS, THERE IS NO REASON FOR TREATING THE SAID INVESTMENTS AS UNEXPLAINED INVES TMENT UNDER THE PROVISIONS OF SECTION 69 OR 69B. FROM THE PERUSAL OF THE ASSESSMENT ORDER IT IS OBSE RVED THAT THOUGH THE AO FOUND THE TRANSACTIONS OF INVESTMENT IN SHAR ES AND SHARE APPLICATION MONEY TOTALING TO RS.1,95,93,435/- RECO RDED IN THE BOOKS OF ACCOUNT OF THE ASSESSEES PROPRIETORSHIP CONCERN, V IZ. M/S. JAIN FINANCE CORPORATION , SEIZED DURING THE COURSE OF SEARCH BU T SINCE, NO SPARATE PROFIT AND LOSS ACCOUNT AND BALANCE SHEET OF THAT CONCERN WERE FILED ALONGWITH THE RETURN OF INCOME, HE DEEMED SUCH INVE STMENTS NOT TO HAVE BEEN RECORDED IN THE BOOKS OF ACCOUNT, HENCE, ADDED U/S. 69 OF THE ACT THE AMOUNT OF SUCH INVESTMENTS TO ASSESSEES INCOME FOR THE YEAR UNDER APPEAL. IN THIS REGARD, IT IS PERTINENT TO HAVE A LOOK AT S ECTION 69 OF THE ACT, WHICH READS AS FOLLOWS: SECTION 69-UNEXPLAINED INVESTMENTS. WHERE IN THE FINANCIAL YEAR IMMEDIATELY PRECEDING THE ASSESSMENT YEAR THE ASSESSEE HAS MADE INVESTMENTS WHICH ARE NO T RECORDED IN THE BOOKS OF ACCOUNT, IF ANY, MAINTAINED BY HIM FOR ANY SOURCE OF INCOME, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE OF THE INVESTMENTS OR THE EXPLANATION OFFERED BY HIM IS NO T, IN THE OPINION OF THE ASSESSING OFFICER, SATISFACTORY, THE VALUE OF THE I NVESTMENTS MAY BE DEEMED TO BE THE INCOME OF THE ASSESSEE OF SUCH FINANCIAL YEAR. I FIND THAT SECTION 69 TAKES INTO ITS FOLD THE INVE STMENTS AS UNEXPLAINED WHERE IN A FINANCIAL YEAR THE ASESSEE H AS MADE INVESTMENTS WHICH ARE NOT RECORDED IN THE BOOKS OF ACCOUNT, IF ANY, MAINTAINED BY HIM FOR ANY SOURCE OF INCOME AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND THE SOURCE OF THE INVESTMENT OR THE EX PLANATION OFFERED BY HIM IS NOT, IN THE OPINION OF THE AO SATISFACTORY. AS ALREADY STATED ABOVE, THE SAME ADDITION WAS SUBJ ECT MATTER BEFORE THE CIT(A), VIDE GROUNDS NO.4 & 5, IN THE FI RST ROUND OF APPEAL WHERE THE ASSESSEE HAD CONTESTED THE FIRST ASSESSME NT ORDER DATED 24.03.1998 MADE U/S. 147/144 FOR THE SAME ASSESSMEN T YEAR. AFTER TAKING INTO CONSIDERATION THE FACTS OF THE CASE AND THE S EIZED MATERIAL THE CIT(A) DELETED THE ADDITION MADE BY THE AO. RELEVANT OBSER VATIONS OF THE CIT(A) IN RESPECT OF THIS ISSUE, MADE BY HIM IN HIS ORDER DATED 14.08.2002 IN APPEAL NO.52/CC-XX/CIT(A)C-III/98-99 IN THE FIRST R OUND OF APPEAL IN THIS CASE, ARE FOUND TO BE RELEVANT. THE RELEVANT OBSERV ATIONS OF THE CIT(A) CONTAINED IN PARA 12 ON PAGES 19 OF HIS ORDER ARE R EPRODUCED HEREIN BELOW: IT.A NO.1142/KOL/2012-C_AM M/S. PREM LAL JAIN 8 12. THE ABOVE DETAILS GIVE INFORMATION REGARDING T HE NAME OF SHARES APPLIED FOR BY THE ASSESSEE AND THE DATE ON WHICH THE APPLICATION WAS MADE. THE CHART ALSO GIVES INFORMATION REGARDI NG THE NAME OF THE BANK ON WHICH THE CHEQUE WAS DRAWN AND THE AMOUNT FOR WHICH THE CHEQUE WAS ISSUE. THE PAGE NOS. OF THE JOURNAL AND LEDGER ACCOUNT HAVE ALSO BEEN GIVEN. THE PAGE NO. IN THE ROKAR IS ALSO INDICATED IN THE ABOVE CHART. FURTHER, THE DATE ON WHICH THE CHEQUE CAME F OR CLEARING AND THE AMOUNT AVAILABLE IN THE BANK ACCOUNT AS ON THAT DAT E IS ALSO GIVEN. FURTHER, THE ASSESSEE IS ALSO GIVEN INFORMATION ABOUT THE CH EQUES WHICH WERE RETURNED BY THE BANKS DUE TO INSUFFICIENCY OF FUNDS . THIS HAPPENED IN THE CASE OF SHARES SUCH AS ALFA JEOLI LTD. ALTOS INDIA LTD, BANTOL CHEMICAL LTD, FABWORTH INDIA LTD, FIDILITY INDIA LTD, IPCA LABORA TORIES, JERAY INDIA LTD, NIRMA LTD AND PEARL GLOBAL LTD. FROM THE ABOVE DETA ILS, IT IS EVIDENT THAT THE ASSESSEE HAD FUNDS AVAILABLE TO HIM IN HIS BANK ACCOUNTS WHENEVER THE CHEQUES, WHICH HE HAD ISSUED FOR ACQUISITION OF S HARES OR FOR MAKING SHARE APPLICATION WERE ISSUED. THE MONIES WHICH WE RE DEPOSITED IN THE BANK ACCOUNTS CAME FROM HIS BUSINESS OF FINANCING I N VEHICLES ON HIRE PURCHASE BASIS. SINCE ALL THE TRANSACTIONS DETAILED ABOVE HAVE BEEN RECORDED IN THE ASSESSEES REGULAR BOOKS OF ACCOUNT S, AND THE SOURCE OF INVESTMENT IN SHARES IS EXPLAINED BY RECEIPTS FROM THE BUSINESS, THERE IS NO QUESTION OF MAKING ANY ADDITION U/S. 69(EMPHASIS SU PPLIED). IN PARA 14 ON PAGE 20 OF HIS ORDER DATED 14.08.200 2 THE CIT(A) FURTHER OBSERVED AS FOLLOWS:- 14. IT MAY BE MENTIONED HERE THAT THE INVESTMENTS MADE BY THE ASSESSEE IN THE SHARES HAVE BEEN RECORDED IN THE BO OKS OF ACCOUNTS MAINTAINED BY HIM AND WHICH WERE SEIZED BY THE DEPA RTMENT. THIS PROVES THAT THESE INVESTMENTS CANNOT BE CONSIDERED AS TH OSE INVESTMENTS WHICH WERE NOT DISCLOSED OR WOULD NOT HAVE BEEN DISCLOSED TO THE DEPARTMENT BECAUSE BY MAKING ENTRIES IN THE REGULAR BOOKS OF ACCOUNTS THE ASSESSEE HAS INDICATED ITS INTENTION TO DISCLOSE THESE INV ESTMENTS TO THE DEPARTMENT. FURTHER, THE ASSESSEE HAS ALSO EXPLAINE D THE NATURE AND SOURCE OF THE INVESTMENTS. THE ULTIMATE SOURCE OF T HE INVESTMENT IN ITS BUSINESS CARRIED ON IN THE NAME AND STYLE OF JAIN FINANCE CORPORATION. THE FUNDS GENERATED BY THE BUSINESS ARE DEPOSITE D IN THE BANK ACCOUNT ON WHICH CHEQUES ARE DRAWN FOR INVESTING IN SHARES OR FOR APPLYING FOR SHARES BY SENDING SHARE APPLICATION MONEY TO THE ISSUING C OMPANY. IN VIEW OF THE ABOVE, THE ADDITION MADE OF RS.1,95,93,435/- IS DEL ETED. IN DEPARTMENTS APPEAL AGAINST THE ABOVE REPRODUCE D DECISION OF THE CIT(A), THE ITAT HAD REMANDED THE MATTER BACK T O THE FILE OF THE AO ONLY FOR THE REASON THAT IT WAS OF THE VIEW THAT TH E CIT(A) SHOULD HAVE CALLED FOR REMAND REPORT IN RESPECT OF THE DETAILS AND EXPLANATION FILED BY THE ASSESSEE BEFORE HIM WHILE DECIDING THE ISSUE BE CAUSE IT FELT THAT THE AO SHOULD ALSO HAD AN OPPORTUNITY TO VERIFY THE DETAIL ED DOCUMENTS AND THE IT.A NO.1142/KOL/2012-C_AM M/S. PREM LAL JAIN 9 EXPLANATION RELIED UPON BY HIM. IN THE ASSESSMENT ORDER FRAMED CONSEQUENT TO THE DIRECTIONS OF THE ITAT, WHERE ALL THE DETAILS FILED BEFORE AND RELIED UPON BY THE CIT(A) IN THE FIRST ROUND OF APPEAL WERE BEFORE THE AO, THE ABOVE QUOTED OBSERVATIONS OF THE CIT(A) HAV E NOT BEEN CONTROVERTED BY THE AO. THE BALANCE SHEET AND THE CASH FLOW STATEMENT, RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL, WHICH WERE PREPARED FROM THE BOOKS OF ACCOUNT SEIZED DURING THE COURSE OF SE ARCH IN THIS CASE AND WERE PRODUCED BEFORE THE CIT(A) IN THE FIRST ROUND OF APPEAL, WERE ALSO PRODUCED BEFORE THE AO DURING THE ASSESSMENT PROCEE DINGS, WHICH ARE SUBJECT MATTER OF THIS APPEAL, AND THE SAME HAS NOT BEEN DISCREDITED OR DISPUTED BY THE AO. THE ASSESSEE ALSO BROUGHT FACT TO THE NOTICE OF THE AO THAT THE INVESTMENTS IN SHARES AND SHARE APPLICATIO NS TOTALING TO RS.1,95,93,435/- WERE DULY RECORDED IN THE BOOKS OF ACCOUNT OF M/S. JAIN FINANCE CORPORATION, WHICH WERE SEIZED DURING THE SEARCH AND LYING IN THE AOS POSSESSION. FROM PERUSAL OF THE ASSESSMENT ORDER UNDER APPEAL, IT IS OBSERVED THAT THE AO HAS NOT DISPUTED THE FACT T HAT IN RESPECT OF HIS PROPRIETORSHIP BUSINESS M/S. JAIN FINANCE CORPORATI ON, THE ASSESSEE WAS MAINTAINING BOOKS OF ACCOUNT, WHICH WERE SEIZED DUR ING THE COURSE OF SEARCH AND THAT THE IMPUGNED TRANSACTIONS OF INVES TMENT IN SHARES AND SHARE APPLICATION TOTALING TO RS.1,95,93,435/- WERE RECORDED IN THOSE BOOKS OF ACCOUNT. FURTHER, THE AO HAS NOT CONTROVERTED TH E FINDINGS OF THE CIT(A) IN THE FIRST ROUND OF APPEAL THAT FROM THE ABOVE D ETAILS BEFORE HIM IT WAS EVIDENT THAT THE ASSESSEE HAD FUNDS AVAILABLE TO HI M IN HIS BANK ACCOUNTS WHENEVER THE CHEQUES, WHICH HE HAD ISSUED FOR ACQUI SITION OF SHARES OR FOR MAKING SHARE APPLICATION, WERE ISSUED. THE MONIES WHICH WERE DEPOSITED IN THE BANK ACCOUNTS CAME FROM HIS BUSINESS OF FINA NCING IN VEHICLES ON HIRE PURCHASE BASIS. AS DISCUSSED ABOVE, ALL THE EXPLANATIONS AND DETAIL S CONSIDERED BY THE CIT(A) IN HIS ORDER DATED 14.08.2002 WERE PLAC ED BEFORE THE AO BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS WHICH AR E THE SUBJECT MATTER OF THIS APPEAL AND THE AO HAS NOT CONTROVERTED OR CONT RADICTED THE FACTS NOTED BY THE CIT(A) IN HIS THAT ORDER. THIS IMPLIES THAT THE FACTS OBSERVED AND NOTED BY THE CIT(A) IN HIS ABOVE REFERRED TO ORDER WERE CORRECT AND TRUE. IF THOSE FACTS ARE CORRECT AND TRUE, THEN THE DECISIO N OF THE CIT(A) IN HIS ORDER DATED 14.08.2002 WAS CORRECT. SINCE, THE AO H AS NOT REFUTED THE FACTS MENTIONED BY THE CIT(A) IN HIS ABOVE REFERRED TO OR DER AND HE HAS NOT BROUGHT ANY FRESH FACTS ON RECORD TO PROVE THAT THE INVESTMENT OF RS.1,95,93,435/- MADE BY THE ASSESSEE WAS OUT OF UN EXPLAINED SOURCES, I SEE NO REASON TO DEVIATE FROM THE DECISION TAKEN TH ERE. IN THE LIGHT OF THE UNDISPUTED FINDING GIVEN BY THE CIT(A) IN THAT APP EAL THAT THE MONIES WHICH WERE DEPOSITED IN THE BANK ACCOUNTS CAME FROM HIS BUSINESS OF FINANCING IN VEHICLES ON HIRE PURCHASE BASIS AND T HAT THE IMPUGNED INVESTMENTS WERE DULY RECORDED IN THE BOOKS OF ACCO UNTS OF THE ASSESSEE, IT.A NO.1142/KOL/2012-C_AM M/S. PREM LAL JAIN 10 THE IMPUGNED ADDITION U/S. 69 OF THE ACT MADE BY TH E AO IS FOUND TO BE UNJUSTIFIED AND DESERVES TO BE DELETED. WE FIND FROM THE PAPER BOOK FILED BY THE LEARNED AR BEFORE US CONTAINING VARIOUS APPELLATE ORDERS OF THE ASSESSEE FOR THE EARLIER YE ARS , SUBSEQUENT ASSESSMENT YEAR AND ALSO THE APPELLATE ORDER FOR THE ASST YEAR 1994-95 (I.E THE YEAR UNDER APPEAL) IN THE FIRST ROUND OF APPEAL, WHEREIN THE ASSESSEE HAD FIL ED A DETAILED CHART EXPLAINING EACH AND EVERY INVESTMENT MADE BY HIM IN THE SHARES WITH SPECIFIC REFERENCE TO THE VARIOUS SEIZED DOCUMENTS AND EXPLAINING THE RESPECTIVE SOUR CES THEREON. IT IS NOT IN DISPUTE THAT THESE PAPERS WERE ALSO FILED BEFORE THE LEARNE D AO IN THE SECOND ROUND AS PER DIRECTIONS OF THIS TRIBUNAL. WE FIND THAT THE LEA RNED DR DID NOT CONTROVERT ANY OF THE FINDINGS RECORDED BY THE LEARNED CIT(A) IN HIS ORDE R BEFORE US. WE HOLD THAT THE LEARNED AO HAD NOT PROPERLY APPRECIATED THE CONTENT S AND EXPLANATIONS OF THE SEIZED DOCUMENTS IN PROPER PERSPECTIVE AND RESORTED TO REP EAT THE SAME ADDITION AS WAS MADE IN THE FIRST ROUND OF PROCEEDINGS. IN VIEW OF THE SE FACTS AND CIRCUMSTANCES, WE HOLD THAT THE SOURCES FOR INVESTMENTS IN SHARES ARE EXPL AINED BY THE ASSESSEE BEYOND DOUBT. WE ARE IN AGREEMENT WITH THE ARGUMENTS OF THE LEARN ED AR THAT THE BUSINESS INCOME FROM THE SAID PROPRIETORY CONCERN M/S JAIN FINANCE CORPORATION HAS BEEN ACCEPTED BY THE LEARNED AO AND HENCE THERE IS NO NEED TO DISPUT E THE VARIOUS INVESTMENTS RECORDED IN THE BOOKS OF ACCOUNTS OF THE SAID PROPRIETORY CO NCERN. WE ALSO HOLD THAT NO ADDITION COULD BE MADE U/S 69 OF THE ACT AS THE ENT IRE INVESTMENTS IN SHARES MADE BY THE ASSESSEE HAVE BEEN DULY RECORDED IN THE BOOKS O F ACCOUNTS OF THE ASSESSEE WHICH ARE PART OF THE SEIZED DOCUMENTS AND SOURCES FOR TH E SAME ARE ALSO EXPLAINED FROM THE SAME SEIZED DOCUMENTS AND HENCE WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LEARNED CIT(A) IN THIS REGARD. ACCORDINGLY, THE GR OUND NO.1 RAISED BY THE REVENUE IS DISMISSED. 4. THE NEXT TWO ISSUES TO BE DECIDED IN THIS APPE AL IS THAT WHETHER AN ADDITION IN THE SUM OF RS. 6,19,735/- AND RS. 72,97,613/- TOWARDS I NVESTMENT IN SHARES AND IT.A NO.1142/KOL/2012-C_AM M/S. PREM LAL JAIN 11 INVESTMENT IN FLAT AT BALLYGUNGE CIRCULAR ROAD, KOL KATA RESPECTIVELY, COULD BE MADE U/S 69 OF THE ACT IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 4.1. THE BRIEF FACTS ARE THAT THE LEARNED AO RESORT ED TO MAKE THIS ADDITION BASED ON SEIZED DOCUMENT REFERENCE JFC 3 CONTAINING CERTAIN INVESTMENT IN SHARES TO THE TUNE OF RS. 6,19,735/- AND INVESTMENT IN FLAT AT NO. 24 /1, BALLYGUNGE CIRCULAR ROAD, KOLKATA TO THE TUNE OF RS 72,97,613/- AND PROCEEDED TO MAKE AN ADDITION AS UNEXPLAINED INVESTMENT U/S 69 OF THE ACT. ON FIRST APPEAL, THE LEARNED CIT(A) DELETED THIS ADDITION APPRECIATING THE CONTENTIONS OF THE ASSESS EE THAT THE INVESTMENT IN SHARES AND INVESTMENT IN FLAT HAVE BEEN DULY ACCOUNTED FOR IN THE BOOKS OF JAIN FINANCE CORPORATION WHICH IS ALSO PART OF THE SEIZED RECORD S AND WHICH WAS ALSO VERIFIED BY THE LEARNED AO IN REMAND PROCEEDINGS. AGGRIEVED, THE R EVENUE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUNDS:- 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E, LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.6,19,735/- MAD E BY THE AO U/S. 69 OF THE INCOME TAX ACT TOWARDS INVESTMENT IN SHARES WHEN THE ASSESSEE FAILED TO ESTABLISH THE GENUINENESS OF THE TRANSACT IONS REPRESENTING INFLOW OF FUNDS SO INVESTED AND ALSO THE IDENTITY A ND CREDITWORTHINESS OF THE PERSONS PAYING SUCH AMOUNT TO THE ASSESSEE. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , LD.CIT(A) ERRED IN DELETING THE ADDITION OF RS.72,97,613/- MADE B Y THE AO U/S. 69 OF THE INCOME TAX ACT TOWARDS INVESTMENT IN FLAT WHEN THE ASSESSEE FAILED TO ESTABLISH THE GENUINENESS OF THE TRANSACTIONS R EPRESENTING INFLOW OF FUNDS SO INVESTED AND ALSO THE IDENTITY AND CREDITW ORTHINESS OF THE PERSONS PAYING SUCH AMOUNT TO THE ASSESSEE. 4.2. THE LEARNED DR VEHEMENTLY SUPPORTED THE ORDE R OF THE LEARNED AO. IN RESPONSE TO THIS, THE LEARNED AR STATED THAT THE AR GUMENTS ADVANCED BY HIM FOR THE FIRST ADDITION WOULD EQUALLY HOLD GOOD THAT THE ENT IRE INVESTMENT IN SHARES AND FLAT AT BALLYGUNGE CIRCULAR ROAD HAVE BEEN DULY ACCOUNTED F OR IN THE BOOKS OF ACCOUNTS OF HIS PROPRIETARY CONCERN M/S JAIN FINANCE CORPORATIO N WHICH ARE PART OF THE SEIZED RECORDS AND ALSO STATED THAT THESE FACTS HAVE BEEN CLEARLY LAID OUT IN THE LEARNED IT.A NO.1142/KOL/2012-C_AM M/S. PREM LAL JAIN 12 CIT(A) ORDER IN DETAIL AND ACCORDINGLY PLACED HEAVY RELIANCE ON THE ORDER OF THE LEARNED CIT(A). 4.3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERU SED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT THESE ADDITIONS OF RS. 6,19,7 35/- TOWARDS INVESTMENT IN SHARES AND RS. 72,97,613/- TOWARDS INVESTMENT IN FLAT AT B ALLYGUNGE CIRCULAR ROAD, KOLKATA HAVE BEEN MADE BY THE LEARNED AO BASED ON SEIZED DO CUMENT REFERENCE JFC 3. WE FIND THAT THE LEARNED CITA HAD DELETED THE ADDITION BY MAKING THE FOLLOWING OBSERVATIONS :- THIS ISSUE HAD ALSO COME UP FOR CONSIDERATION OF THE CIT(A() IN THE FIRST ROUND OF APPEAL OF THIS CASE IN APPEAL NO.52/ CC-XX/CIT(A)C- III/98-99. IN THAT APPEAL THE CIT(A) DECIDED THE IS SUE AS FOLLOWS:- THIS GROUND OF APPEAL PERTAINS TO THE ADDITION OF RS.61,91,735/- BEING THE INVESTMENT IN PURCHASE OF SHARES FROM SEC ONDARY MARKET. THE AFORESAID PURCHASE OF SHARES IN THE SECONDARY M ARKET, ACCORDING TO THE ASSESSEE, IS DULY SHOWN AND REFLEC TED IN THE LEDGER MARKED JFC/3. THE ASSESSEE ARGUED THAT AS THE NATUR E AND SOURCE OF THE ACQUISITION OF SHARES FROM THE SECONDARY MARKET STOOD EXPLAINED THERE WAS NO SCOPE FOR MAKING AN ADDITION TO THE AF ORESAID AMOUNT IN HIS HANDS AS UNEXPLAINED INVESTMENT. FOR THE SAME REASON AS ARE GIVEN IN RESPECT OF GROU ND NO.4 & 5, THE ADDITION OF RS.6,19,735/- IS ALSO DELETED. SINCE THE IMPUGNED ADDITION OF RS.6,19,735/- WAS MA DE BY THE AO FOR THE SAME REASONS FOR WHICH HE HAD MADE THE ADDITION OF RS.1,95,93,435/- DEALT WITH IN GROUND NO.5 OF THIS APPEAL, FOR THE REASONS GIVEN IN RESPECT OF THAT GROUND AND ALSO I N THE LIGHT OF THE DECISION OF MY PREDECESSOR IN THE FIRST ROUND OF AP PEAL ( IN APPEAL NO.52/CC-XX/CIT(A)C-III/98-99) IN THIS CASE, THE AD DITION OF RS.6,19,735/- IS DELETED. THESE ISSUES ALSO WERE BEFORE THE CIT(A) IN THE F IRST ROUND OF APPEAL OF THE SAME CASE FOR THE SAME ASSESSMENT YEA R UNDER GROUNDS NO.7,8 AND 15 (APPEAL NO.52/CC-XX/CIT(A)C-III/98-99 ). IN RESPECT OF ADDITION OF RS.72,97,613/-, AFTER CONSIDERING THE F ACTS OF THE CASE, SEIZED DOCUMENTS AND THE EVIDENCES BEFORE HI, THE CIT(A) G AVE HIS FINDINGS AS FOLLOWS IN THAT ORDER:- IT.A NO.1142/KOL/2012-C_AM M/S. PREM LAL JAIN 13 GROUND NO. 7 & 8 17. THESE GROUNDS OF APPEAL PERTAIN TO THE ADDITION OF RS.72,97,613/- IN THE TOTAL INCOME AS PER PAGE 15 OF JFC/3 WHICH IS LEDGER COPY OF SRI BINAY KR. BAFNA. THE ASSESSEE ARGUED THAT ON EXAMIN ATION OF THE PAGE NO.15 OF JFC/3 WOULD SHOW A SUM OF RS.45,30,000/- W AS THE BROUGHT FORWARD BALANCE ADVANCED TO HIM IN THE PRECEDING Y EAR. ACCORDING TO THE ASSESSEE THE AO MADE AN ADDITION OF RS.72,97,613/- ON THE GROUND THAT AS PER PAGE 15 OF JFC/3, HE HAD MADE AN INVESTMENT IN FLAT AT 24/1, BALLYGUNGE CIR. ROAD, KOLKATA, PAYMENT FOR WHICH WA S MADE TO SRI BINAY KUMAR BAFNA, PROMOTER OF THE AFORESAID BUILDING. TH E AO BELIEVED THAT SINCE THE ASSESSEE HAD NOT FURNISHED ANY EXPLANATI ON AS TO THE SOURCE OF THIS INVESTMENT, THE AMOUNT SHOULD BE TREATED AS I NCOME FROM UNDISCLOSED SOURCES AND ADDED TO HIS TOTAL INCOME. THE PAGE 15 OF JFC/3 WAS PRODUCED FOR EXPLANATION AND VERIFICATION. IT WAS S EEN THAT AS ON 1 ST APRIL, 1993 THE OPENING DEBIT BALANCE IN THE ACCOUNT OF S RI BAFNA WAS RS.45,30,000/- HAVING BEEN ADVANCED TO HIM IN THE E ARLIER YEARS. AGAINST THAT, THERE ARE A RECEIPT IN CASH FROM SRI BAFNA ON 11 TH MAY, 1993, 26 TH JULY, 1993, 20 TH AUGUST, 1993 AND 28 TH AUGUST, 1993 OF RS.1,00,000, RS.2,00,000/-, RS.90,000/-, RS.60,000/- RS.1,00,00 0/- AND RS.50,000/- RESPECTIVELY. FRESH CHEQUES WERE ISSUED THROUGH KAT HOLIC SYRIAN BANK OF RS.5,00,000/- EACH ON 13 TH AUGUST, 1993 AND 1 ST SEPTEMBER, 1993 FOLLOWED BY RECEIPTS IN CASH A SUM OF RS.1,00,000/- ON 15 TH SEPTEMBER, 1993, RS.1,00,000/- ON 17 TH SEPT, 1993 AND RS.1,00,000/- ON 24 TH SEPT, 1993. THERE WERE FURTHER PAYMENTS BY CHEQUES OF RS.2,00, 000/-, RS.2,25,875/- AND RS.23,734/- ON 7 TH OCTOBER, 1993 AND 14 TH OCTOBER, 1993 RESPECTIVELY. THE FURTHER CREDIT OF RS.5,00,000/- ON 7 TH FEB 1994 AND RS.3,00,000/- AGAIN ON 7 TH FEB. 1994 AND RS.50,000/- ALSO ON 7 TH FEB, 1994 AND RS.88,000/- AGAIN ON 7 TH FEB. 1994 WERE SEEN FROM THE SAID LEDGER ACCOUNT. THE LEDGER ACCOUNT SHOWED FURTHER RECEIPTS OF CASH AMOUNT OF RS.38,000/- ON 4 TH MARCH, 1994 AND IN JOURNAL THERE IS AN ENTRY OF RS.27,50,000/- ON 25 TH MARCH, 1994. AT THE END OF THE YEAR THERE WAS A DEBIT BALANCE IN THE SAID ACCOUNT OF RS.30,09,613/ -. THERE WERE TWO CONTRA ENTRIES ALSO ON 2 ND DECEMBER, 1993 AND 14 TH DECEMBER, 1993 OF RS.2,00,000/- AND RS.1,00,000/- RESPECTIVELY. ACCOR DING TO THE ASSESSEE, IT WAS EVIDENT FROM THE AFORESAID LEDGER ACCOUNT THAT THE OPENING BALANCE WAS REDUCED BY THE RECEIPTS IN CASH AND THERE WAS PAYMENTS BY CHEQUE, SOURCE OF WHICH NOW STANDS EXPLAINED IN THE JOURNAL MARKED JFC/2. 18. THE ASSESSEE MENTIONED THAT THE FACTS OF THE CA SE WAS THAT IN THE PRECEDING YEARS HE HAD ENTERED INTO AN AGREEMENT WI TH SRI BAFNA FOR THE PURCHASE OF THE FLAT AT 24/1 BALLYGUNE CIR. ROAD, K OLKATA VIDE AN AGREEMENT. THE SAID AGREEMENT THEREAFTER WAS CANC ELLED. THE AMOUNTS WERE ADVANCED PURSUANT TO THE SAID AGREEMENT TO SRI BAFNA IN THE IT.A NO.1142/KOL/2012-C_AM M/S. PREM LAL JAIN 14 PRECEDING YEAR, WHICH WERE OUTSTANDING BALANCE AS ON 1 ST APRIL, 1993. THE SAID AMOUNT THEREAFTER WAS BEING GRADUALLY REF UNDED IN CASH TO THE ASSESSEE AND THE FRESH PAYMENTS BY WAY OF CHEQUES W ERE ACTUALLY IN THE NAME OF YASHAVI TOWERS PVT. LTD, ONE GORKHI TERRACE , KOLKATA FOR THE PURCHASE OF IMMOVABLE PROPERTY AT 39/1, GIRISH MUKH ERJEE ROAD, KOLKATA, BEING THE UNIT NO.5B, AS PER PAGE 2 TO 27, BEING TH E AGREEMENT AND THE PAGE 29 TO 30 BEING THE RECEIPTS OF PJ-24 LYING SEI ZED AS PER PANCHANAMA DATED 26 TH JULY, 1994 AMOUNTING TO RS.7,25,875/- WHICH WILL S HOW THAT THE AFORESAID CHEQUE PAYMENTS ON KATHOLIC SYRIAN BANK DEBITED FROM THE BANK ACCOUNT OF JFC WAS MADE ON 1 ST SEPT, 1993 AND 7 TH OCTOBER, 1993 FOR THE ACQUISITION OF THE AFORESAID PROPERTY. THE SAID BANK ACCOUNT WAS DULY ACCOUNTED FOR AND THE JOURNAL ENTRY TO THIS EFFECT WAS AVAILABLE IN THE SEIZED BOOKS AT PAGE 68 AND 87 OF JFC/3 AND JFC/2 A ND LIKEWISE THE PAYMENT TO SRI BAFNA WAS FOR THE PURCHASE OF THE PR OPERTY AT 39/1, GIRISH MUKHERJEE ROAD, KOLKATA BEING THE UNIT NO.5A AS PER PAGE 2 TO 13 OF THE AGREEMENT AND PAGES 16 AND 17 OF THE RECEIPTS DATED 30 TH AUGUST, 1993 AND 14 TH OCTOBER, 1993 OF PJ-25, WHICH WILL SHOW THAT THE P AYMENTS OF RS.7,03,737/- WAS DULY REFLECTED, BEING THE PAYMENT TO THE KATHOLIC SYRIAN BANK ACCOUNT OF JAIN FINANCE CORPN WHICH WAS DULY D EBITED IN THE BANK ACCOUNT AS ON 1 ST SEPT. 1993 AND 14 TH OCTOBER, 1994 RESPECTIVELY. THE ASSESSEE MENTIONED THAT THE AO MADE A SEPARATE ADDI TION ON THIS ACCOUNT IN THE ASSESSMENT ORDER, WHICH IS TAKEN UP IN ANOTH ER GROUND OF APPEAL (IN THE GROUND NO.15). ALL THE PAYMENTS OF RS.5,00,000/ -, RS.3,00,000/-, RS.50,000/- AND RS.1,88,000/- WERE BY WAY OF ADVANC ES TO SRI BAFNA AND ARE REFLECTED IN THE BANK ACCOUNT AND JOURNAL MARK ED JFC/2 AND PAGES 152 AND 200 FOR, THE AMOUNT HAS BEEN DULY DEBITED I N THE BANK ACCOUNT ACCORDINGLY. THEREFORE, IN THESE FACTS AND CIRCUMST ANCES, NATURE AND SOURCE OF THE SAID PAYMENT CAN BE SAID TO BE DULY DISCLOSED AND EXPLAINED, ACCORDING TO THE ASSESSEE. THE ASSESSEE CONTENDED THAT IN VIEW OF THE AFORESAID POSITION THERE IS NO CASE FOR MAKI NG AN ADDITION OF RS.72,97,613/- MADE BY THE AO IN THE HANDS OF THE A SSESSEE DURING THE RELEVANT ASSESSMENT YEAR AND ALSO THAT OF RS.7,25,8 75/- AND RS.7,03,737/- WHICH ARE COVERED BY GROUND NO.15. 19. THE ENGLISH VERSION OF THE LEDGER ACCOUNT OF BI NAY KR. BAFNA APPEARING IN THE SEIZED BOOK MARKED JFC/3 IS AS FO LLOWS:- DATE PARTICULARS DEBIT (RS.) CREDIT (RS.) 1.4.93 TO OPENING BAL B/D 45,30,000.00 - 11.5.93 BY CASH - 1,00,000.00 26.7.93 BY CASH - 2,00,000.0 17.8.93 BY CASH - 90,000.00 18.8.93 BY CASH - 60,000.00 20.8.93 BY CASH - 1,00,000.00 IT.A NO.1142/KOL/2012-C_AM M/S. PREM LAL JAIN 15 28.8.93 BY CASH - 50,000.00 30.8.93 TO JOURNAL 5,00,000.00 - 1.9.93 TO JOURNAL 5,00,000.00 - 15.9.93 BY CASH - 1,00,000.00 17.9.93 BY CASH - 1,00,000.00 24.9.93 BY CASH - 4,00,000.00 7.10.93 TO JOURNAL 2,25,875.60 - 14.10.93 TO JOURNAL 2,03,737.80 - 2.12.93 TO CASH(WRONG ENTRY) 2,00,000.00 - 2.12.93 BY CASH(WRONG ENTRY) - 2,00,000.00 14.12.93 TO CASH(WRONG ENTRY) 1,00,000.00 - 14.12.93 BY CASH(WRONG ENTRY) - 1,00,000.00 7.2.94 TO JOURNAL 5,00,000.00 - 7.2.94 TO JOURNAL 3,00,000.00 - 7.2.94 TO JOURNAL 50,000.00 - 7.2.94 TO JOURNAL 1,88,000.00 - 4.3.94 BY CASH - 38,000.00 25.3.94 BY JOURNAL - 27,50,000.00 31.3.94 TO BALANCE C/D - 30,09,613.40 72,97,613.40 72,97,613.40 THE TRANSACTIONS HAVE BEEN DULY DISCLOSED IN THE RE GULAR BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE. THE NATURE OF THE TRANSACTIONS HAVE BEEN EXPLAINED BY THE ASSESSEE AND ARE REFLECTED IN THE SAID LEDGER ACCOUNT. THE PURPOSE OF THE TRANSACTIONS CARRIED O N WITH SRI BAFNA HAVE ALSO BEEN EXPLAINED. THE SOURCE OF PAYMENTS MADE AR E REFLECTED IN THE BOOKS OF ACCOUNTS SEIZED BY THE DEPARTMENT WHICH AR E REGULAR BOOKS OF ACCOUNTS OF THE ASSESSEE. IN VIEW OF THE ABOVE AS T HE NATURE AND SOURCE OF THE PAYMENTS HAVE BEEN DULY EXPLAINED, THERE IS NO SCOPE FOR MAKING AN ADDITION OF RS.72,97,615/-. ACCORDINGLY, THIS ADDI TION IS DELETED. THE AO MADE THE SAID ADDITION OF RS.72,92,615/- U/ S. 69 FOR THE SAME REASONS FOR WHICH HE HAD MADE THE ADDITION OF RS.1,95,93,435/- DEALT WITH IN GROUND NO.5 OF THIS APPEAL. IN HIS OR DER DATED 14.08.2002 THE CIT(A) HAD DELETED THE SAID ADDITION HOLDING THAT T HOSE TRANSACTIONS HAD BEEN DULY DISCLOSED IN THE REGULAR BOOKS OF ACCOUN T MAINTAINED BY THE ASSESSEE IN RESPECT OF THE HIS PROPRIETORSHIP BUSI NESS AND THE SOURCE OF PAYMENTS MADE WAS REFLECTED IN THE BOOKS OF ACCOUNT SEIZED BY THE DEPARTMENT WHICH ARE REGULAR BOOKS OF THE ASSESSEE. THE AO HAS NEITHER CONTROVERTED NOR CONTRADICTED THE FACTS NOTED BY T HE CIT(A) IN HIS ORDER DATED 14.08.2002. SINCE, IT STANDS ESTABLISHED THAT THE IMPUGNED INVESTMENTS WERE RECORDED IN THE BOOKS OF ACCOUNT O F THE ASSESSEE, WHICH IT.A NO.1142/KOL/2012-C_AM M/S. PREM LAL JAIN 16 ARE HIS REGULAR BOOKS AND THE SOURCE OF PAYMENTS M ADE FOR THE SAME WAS REFLECTED IN THOSE BOOKS WHICH WERE SEIZED BY THE D EPARTMENT, THE IMPUGNED ADDITION U/S. 69 OF THE ACT MADE BY THE AO IS FOUND TO BE UNJUSTIFIED AND DESERVES TO BE DELETED. FOR THE ABOVE DISCUSSION, THE ADDITION OF RS.72,92 ,615/- MADE BY THE AO IS DELETED. WE HOLD THAT FOR THE SAME EXPLANATION GIVEN BY US F OR THE GROUND NO.1 RAISED BY THE REVENUE HEREINABOVE, WE HOLD THAT THERE IS NO SCOPE FOR MAKING ANY ADDITION TOWARDS UNEXPLAINED INVESTMENT U/S 69 OF THE ACT AS THE ENT IRE INVESTMENTS HAVE BEEN DULY ACCOUNTED FOR IN THE BOOKS OF THE PROPRIETARY CONCE RN OF THE ASSESSEE M/S JAIN FINANCE CORPORATION WHICH ARE PART OF THE SEIZED RECORDS AN D THE LEARNED DR HAD NOT CONTROVERTED ANY OF THE FACTUAL FINDINGS RECORDED B Y THE LEARNED CIT(A) IN THIS REGARD. HENCE WE DO NOT FIND ANY REASON TO INTERFERE WITH T HE DECISION OF THE LEARNED CIT(A) IN RESPECT OF THESE TWO ADDITIONS. ACCORDINGLY, TH E GROUND NOS. 2 & 3 RAISED BY THE REVENUE ARE DISMISSED. 5. THE NEXT ISSUE TO BE DECIDED IN THIS APPEAL IS THAT WHETHER AN ADDITION IN THE SUM OF RS. 4,10,000/- AND RS. 7,03,737/- TOWARDS IN VESTMENT IN THE NAME OF M/S PINKU SONU INVESTMENT & PROPERTIES PVT LTD COULD BE MADE U/S 69 OF THE ACT IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 5.1. THE BRIEF FACTS ARE THAT DURING THE COURSE OF SEARCH, A BOOK MARKED JFC 60 WAS FOUND AND SEIZED WHEREIN AT PAGE 4, IT CONTAINED A HEAD NOTE CALLED ADVANCE STATING THAT DURING 19.1.93 TO 26.3.93 THERE WERE RECEIPTS BY CHEQUE FROM M/S PINKU SONU INVESTMENT PROPERTIES PVT LTD FOR RS. 25,000/- WITH A REVERSE ENTRY THUS TOTALING TO RS. 3,85,000/- IN THE SAID SHEET. THE LEARNED AO MAD E AN ADDITION OF RS. 4,10,000/- IN THE ASSESSMENT. NO CLEAR FACTS HAVE BEEN BROUGHT O N RECORD TO JUSTIFY EVEN HOW THE FIGURE OF RS. 4,10,000/- WAS ARRIVED AT BY HIM. T HE LEARNED AO ALSO MADE AN ADDITION OF RS. 7,03,737/- ON THE BASIS OF SEIZED D OCUMENT REFERENCE PJ 25 AT PAGE 16 IT.A NO.1142/KOL/2012-C_AM M/S. PREM LAL JAIN 17 AND PAGE 16. IT WAS SUBMITTED BY THE ASSESSEE THA T THE SAID TRANSACTIONS HAVE BEEN DULY REFLECTED IN THE BOOKS OF ACCOUNTS OF M/S PINK U SONU INVESTMENT & PROPERTIES PVT LTD AND HENCE THE SAME NEED NOT BE EXAMINED IN THE HANDS OF THE ASSESSEE. IGNORING THIS ARGUMENT, THE ADDITIONS WERE MADE BY THE LEARN ED AO IN THE HANDS OF THE ASSESSEE. ON FIRST APPEAL, THE LEARNED CITA APPRE CIATED THE CONTENTIONS OF THE ASSESSEE THAT THE SEIZED DOCUMENT IN JFC 60 AND PJ 25 BELONGS TO M/S PINKY SONU INVESTMENT PROPERTIES PVT LTD AND NOT TO THE ASSESS EE AND MOREOVER THE YEAR PERTAINS TO ASST YEAR 1993-94 AND NOT TO THE YEAR UNDER APPE AL AS FAR AS THE ADDITION OF RS. 4,10,000/- IS CONCERNED. THE ONLY RELATIONSHIP BE TWEEN THE ASSESSEE AND THE COMPANY TO WHICH THE SEIZED DOCUMENT RELATES IS THAT ASSES SEE IS A DIRECTOR IN THE SAID COMPANY. IT WAS ALSO SUBMITTED BEFORE THE LEARNED CITA THAT THE ADDITION OF RS. 7,03,737/- EFFECTIVELY IS A DUPLICATE ADDITION AS THE SAME IS ALREADY INCLUDED IN THE ADDITION MADE IN THE SUM OF RS. 72,97,613/- BY THE LEARNED AO . IT WAS FURTHER SUBMITTED BEFORE THE LEARNED AO THAT THIS ADDITION WAS MADE BY THE LEARN ED AO ON THE GROUND THAT THERE WERE NO ENOUGH FUNDS OF ITS OWN IN THE HANDS OF M/S PINKU SONU INVESTMENT & PROPERTIES PVT LTD AND MOREOVER IN THE SEIZED PAPER S THE NAME OF THE COMPANY IS MENTIONED AS PINKU SONU INVESTMENT P LTD AND NOT PI NKU SONU INVESTMENT & PROPERTIES P LTD. IT WAS FURTHER EXPLAINED THAT TH E LEARNED AO DOUBTED THE FACT WHETHER THERE ARE TWO DIFFERENT COMPANIES OR ARE TH EY ONE AND THE SAME. HENCE THIS ADDITION WAS MADE ONLY ON SUSPICION OF THE LEARNED AO. THE LEARNED CITA APPRECIATED THE CONTENTION OF THE ASSESSEE THAT THE SAID TRANSACTIONS HAVE BEEN DULY ACCOUNTED IN THE AUDITED ACCOUNTS OF M/S PINKU SONU INVESTMENTS & PROPERTIES PVT LTD AND THE COPY OF THE ASSESSMENT ORDER OF THE SAI D COMPANY WAS ALSO FILED BEFORE HIM. ACCORDINGLY THE ADDITIONS WERE DELETED BY THE LEARNED CITA. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US ON THE FOLLOWING GRO UND:- 4. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E, LD.CIT(A) ERRED IN DELETING THE ADDITION OF RS.4,10,000/- AND RS.7,03,737/- MADE BY THE AO TOWARDS INVESTMENT IN THE NAME OF M /S. PINKU SONU IT.A NO.1142/KOL/2012-C_AM M/S. PREM LAL JAIN 18 INVESTMENT & PROPERTIES LTD WHEN THE IDENTITY OF TH E SAID CONCERN WAS NOT ESTABLISHED. 5.2. THE LEARNED DR VEHEMENTLY SUPPORTED THE ORDE R OF THE LEARNED AO. IN RESPONSE TO THIS, THE LEARNED AR STATED THAT THE SE IZED DOCUMENT BELONGS TO M/S PINKU SONU INVESTMENT & PROPERTIES PVT LTD AND NOT TO TH E ASSESSEE. HE ARGUED THAT WITH REGARD TO THE ADDITION MADE IN THE SUM OF RS. 4,10, 000/- , THE RELEVANT DATES MENTIONED IN THE SEIZED DOCUMENT I.E 19.1.93 TO 26.3.93 PERTA INS TO ASST YEAR 1993-94 AND HENCE EVEN ASSUMING WITHOUT CONCEDING, ANY ADDITION IS TO BE MADE, IT COULD BE MADE ONLY IN ASST YEAR 1993-94 AND NOT IN THE YEAR UNDER APPEAL. HE ARGUED THAT THE ASSESSEE IS ONLY A DIRECTOR IN THE SAID COMPANY. HE STATED TH AT THE SAID COMPANY HAD CONTRIBUTED THE AMOUNT BY WAY OF UNSECURED LOAN AND DISCLOSED I N THEIR BOOKS OF ACCOUNTS. HE ARGUED THAT RS. 3,85,000/- HAS BEEN DULY REFLECTED IN THE AUDITED ACCOUNTS OF M/S PINKU SONU INVESTMENT & PROPERTIES PVT LTD AND A SUM OF RS. 5,000/- WAS RECEIVED FROM MR.S.JAIN WHICH IS ALSO REFLECTED IN THE SAME SEIZE D DOCUMENT REFERENCE JFC 60 AT PAGE 7. WITH REGARD TO THE ADDITION MADE IN THE SUM OF RS. 7,03,737/- , APART FROM REITERATING THE SUBMISSIONS MADE BEFORE THE LEARNED CITA FURTHE R ARGUED THAT THE SEIZED DOCUMENT DOES NOT BELONG TO THE ASSESSEE HEREIN AND INSTEAD BELONGS TO M/S PINKU SONU INVESTMENT & PROPERTIES PVT LTD WHICH FACT IS NOT DISPUTED BY THE LEARNED AO. HENCE ANY ADDITION, IF ANY, ON THIS COUNT , COULD B E CONSIDERED ONLY IN THE HANDS OF THE SAID COMPANY AND NOT THE ASSESSEE HEREIN. 5.3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUS ED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT THESE ADDITIONS OF RS. 4,10,0 00/- AND RS. 7,03,737/- HAVE BEEN MADE BASED ON THE SEIZED DOCUMENT REFERENCE JFC 60 BELONGING TO M/S PINKU SONU INVESTMENT & PROPERTIES PVT LTD. THE LEARNED CITA HAD GIVEN A CATEGORICAL FINDING THAT THESE TRANSACTIONS HAVE BEEN DULY REFLECTED AN D ACCOUNTED IN THE BOOKS OF THE SAID IT.A NO.1142/KOL/2012-C_AM M/S. PREM LAL JAIN 19 COMPANY WHICH WERE DULY AUDITED AND ASSESSMENTS COM PLETED ACCORDINGLY. THE COPY OF ASSESSMENT ORDER OF THE SAID COMPANY WAS ALSO PL ACED BEFORE THE LEARNED CITA. WE HOLD THAT WHEN THE SEIZED DOCUMENT IS IN THE NAM E OF SOME OTHER PERSON AND THE ASSESSEE HAD CATEGORICALLY HAD NOT OWNED UP THE SAM E, THEN THE OBVIOUS INFERENCE IS THAT HE HAS EXERCISED THE POWERS IN TERMS OF SECTIO N 132(4) OF THE ACT BY REBUTTING THE PRESUMPTION AS TO OWNERSHIP OF THE SEIZED DOCUMENT. IN THE INSTANT CASE, THE ASSESSEE HAD GONE A STEP AHEAD BY STATING THAT THE SEIZED DO CUMENT DOES NOT BELONG TO HIM BUT INSTEAD IT BELONGS TO THE COMPANY M/S PINKU SONU IN VESTMENT & PROPERTIES PVT LTD ,A COMPANY IN WHICH HE IS A DIRECTOR, AND FURTHER STAT ED THAT THE CONTENTS IN THE SAID SEIZED DOCUMENT HAVE ALREADY BEEN DULY REFLECTED IN THE AUDITED ACCOUNTS OF THE SAID COMPANY. HENCE WE HOLD THAT THE ASSESSEE HAD FULLY DISCHARGED HIS ONUS IN TERMS OF EXPLAINING THE SEIZED DOCUMENT FOUND IN HIS PREMISE S. WE ALSO FIND THAT ANY ADDITION , IF AT ALL, IN RESPECT OF RS. 4,10,000/- COULD BE MA DE ONLY IN ASST YEAR 1993-94 AND NOT IN ASST YEAR 1994-95 (I.E THE YEAR UNDER APPEAL) AS PER THE DATES MENTIONED IN THE SEIZED DOCUMENT. WE FIND LOT OF FORCE IN THE ARGUM ENTS OF THE LEARNED AR THAT THE SEIZED DOCUMENT BELONGS TO THE SAID COMPANY AND HEN CE IT IS ONLY FOR THE COMPANY TO EXPLAIN THE SAME AND NOT THE ASSESSEE HEREIN. HENC E WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LEARNED CITA IN THIS REGARD. ACCO RDINGLY, THE GROUND NO. 4 RAISED BY THE REVENUE IS DISMISSED. 6. THE NEXT GROUND TO BE DECIDED IN THIS APPEAL I S THAT WHETHER AN ADDITION IN THE SUM OF RS. 7,25,875/- TOWARDS INVESTMENT IN FLAT IN UNI T 5B AT NO. 39/1, GIRISH MUKHERJEE ROAD, KOLKATA AND SUM OF RS. 7,03,737/- TOWARDS INV ESTMENT IN FLAT IN UNIT 5A, 39/1, GIRISH MUKHERJEE ROAD, KOLKATA IN THE FACTS AND CIR CUMSTANCES OF THE CASE. 6.1. THE BRIEF FACTS OF THIS ISSUE IS THAT THE LEAR NED AO DURING THE COURSE OF SEARCH FOUND IN SEIZED DOCUMENT REFERENCE PJ 24 THAT ASSES SEE HAD MADE PAYMENT OF RS. 7,25,875/- TO ONE YESHAVI TOWERS PVT LTD ON 3.9.199 3 AND ON 8.10.1993 TOWARDS PURCHASE OF IMMOVABLE PROPERTY AT UNIT NO. 5B, NO. 39/1, GIRISH MUKHERJEE ROAD, IT.A NO.1142/KOL/2012-C_AM M/S. PREM LAL JAIN 20 KOLKATA 700025. THE SAME SEIZED MATERIAL ALSO SH OWED FURTHER PAYMENT OF RS. 7,03,737/- TO ONE MR.VINAY BAPNA ON 30.8.1993 AND 1 4.10.1993 FOR PURCHASE OF IMMOVABLE PROPERTY AT UNIT NO. 5A, NO. 39/1, GIRISH MUKHERJEE ROAD, KOLKATA 700025. THE LEARNED AO ADDED THE SAME AS TO THE T OTAL INCOME AS NO EXPLANATION WAS OFFERED BY THE ASSESSEE. ON FIRST APPEAL, IT W AS SUBMITTED BEFORE THE LEARNED CITA THAT THE ADDITIONS MADE IN THE SUM OF RS. 7,25 ,875/- AND RS. 7,03,737/- ARE DUPLICATE ADDITIONS AS THE SAME ARE ALREADY PART OF THE ADDITION MADE IN THE SUM OF RS. 72,97,613/- DISCUSSED HEREINABOVE SEPARATELY. ACCO RDINGLY, THE LEARNED CITA DELETED THE ADDITION. AGGRIEVED, THE REVENUE IS IN APPEAL B EFORE US ON THE FOLLOWING GROUNDS:- 5. THAT ON THE FACTS AND CIRCUMSTANCES OF THE C ASE, LD.CIT(A) ERRED IN DELETING THE ADDITION OF RS.7,25,875/- MAD E BY THE AO TOWARDS INVESTMENT IN A FLAT AS THE ASSESSEE FAILED TO OFFER ANY EXPLANATION ON THIS ISSUE EITHER AT THE TIME OF AS SESSMENT OR AT REMAND STAGE. 9. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, LD.CIT(A) ERRED IN DELETING THE ADDITION OF RS.7,03,737/- MAD E ON ACCOUNT OF PAYMENT TO ONE SHRI BINAY BAFNA TOWARDS INVESTMENT IN A FLAT AT GIRISH MUKHERJEE ROAD WHEN THE ASSESSEE FAILED TO O FFER ANY EXPLANATIONTOWARDS THE SAME EITHER AT THE TIME OF ASSESSMENT OR AT REMAND STAGE. 6.2. THE LEARNED DR VEHEMENTLY SUPPORTED THE ORDE R OF THE LEARNED AO. IN RESPONSE TO THIS, THE LEARNED AR HEAVILY RELIED ON THE ORDER OF THE LEARNED CIT(A). 6.3. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND THAT THE LEARNED CITA HAD ONLY DELETED THESE ADDITIONS IN ORDER TO AVOID DOUBLE AD DITIONS AS THE SUBJECT MENTIONED SUMS OF RS. 7,25,875/- AND RS. 7,03,737/- ARE ALREA DY ADDED IN AN INDEPENDENT ADDITION OF RS. 72,97,613/-. WE HAVE ALREADY HELD IN GROUN D NO. 3 HEREINABOVE THAT THE ENTIRE ADDITION OF RS. 72,97,613/- TOWARDS INVESTMENT IN I MMOVABLE PROPERTIES IS NOT WARRANTED AS THE SAME HAS BEEN DULY ACCOUNTED IN TH E BOOKS OF M/S JAIN FINANCE CORPORATION , A PROPRIETORY CONCERN OF THE ASSESSEE AND SOURCES FOR THE SAME ARE DULY IT.A NO.1142/KOL/2012-C_AM M/S. PREM LAL JAIN 21 EXPLAINED FROM THE BOOKS OF ACCOUNTS OF THE SAID CO NCERN AND HENCE THERE IS NO SCOPE FOR MAKING ANY ADDITION TOWARDS UNEXPLAINED INVESTM ENT. THE FINDING GIVEN BY THE LEARNED CIT(A) IN THIS REGARD IS NOT CONTROVERTED B Y THE LEARNED DR BEFORE US. ACCORDINGLY, THE GROUND NOS. 5 & 9 RAISED BY THE R EVENUE ARE DISMISSED. 7. THE NEXT GROUND TO BE DECIDED IN THIS APPEAL IS THAT WHETHER AN ADDITION IN THE SUM OF RS. 12,08,400/- TOWARDS INVESTMENT IN SHARES COU LD BE MADE IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 7.1. THE BRIEF FACTS OF THIS ISSUE IS THAT THE LEA RNED AO DURING THE COURSE OF SEARCH PROCEEDINGS FOUND THAT THE ASSESSEE INVESTED A SUM OF RS. 12,08,400/- IN SHARES DURING THE YEAR UNDER APPEAL OUT OF TOTAL SEIZED SHARES VA LUED AT RS. 41,78,460/- AND AN ORDER U/S 132(5) OF THE ACT WAS PASSED ON THE SAME ON 13. 2.1995 AND SINCE NO SATISFACTORY EXPLANATION WAS GIVEN, THE SAME WAS ADDED TO THE TO TAL INCOME AS UNEXPLAINED INVESTMENT. ON FIRST APPEAL, THE ASSESSEE SUBMITT ED THAT THE ACTUAL INVESTMENT IN SHARES WAS NOT RS. 12,08,400/- BUT WAS RS. 20,17,77 0/-. IT WAS SUBMITTED THAT THESE INVESTMENTS WERE MADE IN VARIOUS NAMES OUT OF THE F UNDS OF M/S JAIN FINANCE CORPORATION, A PROPRIETARY CONCERN OF THE ASSESSEE AND THAT THE INVESTMENTS WERE DULY REFLECTED IN THE JOURNAL AND THE LEDGER OF M/S JAIN FINANCE CORPORATION WHICH WERE SEIZED VIDE IDENTIFICATION MARK NOS. JFC 2 AND JFC 3 BY THE REVENUE. IT WAS ALSO SUBMITTED THAT THE SOURCES FOR THE ABOVEMENTIONED I NVESTMENT BY THE SAID CONCERN IS FROM BUSINESS RECEIPTS FROM THE HIRE PURCHASE BUSIN ESS OF THE CONCERN. THE LEARNED CIT(A) FOUND THAT THE ASSESSEE HAD DULY SUBMITTED T HE DETAILS SUCH AS NAME OF THE COMPANY OF WHICH SHARES WERE ACQUIRED, NUMBER OF SH ARES, AMOUNT INVESTED AND THE PAGE NUMBERS OF THE KHATA IN WHICH THE TRANSACTIONS WERE RECORDED WITH SPECIFIC REFERENCE TO THE SEIZED DOCUMENTS AND THE BOOKS OF M/S JAIN FINANCE CORPORATION WHEREIN THEY WERE ACCOUNTED WITH RESPECTIVE SOURCES AND DELETED THE ADDITION. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US ON TH E FOLLOWING GROUND:- IT.A NO.1142/KOL/2012-C_AM M/S. PREM LAL JAIN 22 6. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , LD.CIT(A) ERRED IN DELETING THE ADDITION OF RS.12,0 8,400/- MADE BY THE AO TOWARDS INVESTMENT IN SHARES WHEN TH E ASSESSEE FAILED TO ESTABLISH THE GENUINENESS OF THE TRANSACTIONS REPRESENTING INFLOW OF FUNDS SO INVES TED AND ALSO THE IDENTITY AND CREDITWROTHINESS OF THE PERSO NS PAYING SUCH AMOUNT TO THE ASSESSEE. 7.2. THE LEARNED DR VEHEMENTLY SUPPORTED THE ORDE R OF THE LEARNED AO. IN RESPONSE TO THIS, THE LEARNED AR HEAVILY RELIED ON THE ORDER OF THE LEARNED CITA. 7.3. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIN D THAT THE LEARNED CITA HAD ONLY DELETED THIS ADDITION AFTER VERIFICATION OF THE FAC T THAT THE SAID INVESTMENT IN SHARES WERE DULY ACCOUNTED IN THE BOOKS OF M/S JAIN FINANC E CORPORATION WHICH WERE ALSO PART OF THE SEIZED DOCUMENTS. THE FINDING GIVEN BY THE LEARNED CITA IN THIS REGARD IS NOT CONTROVERTED BY THE LEARNED DR BEFORE US. I N THESE CIRCUMSTANCES, WE FIND NO INFIRMITY IN THE ORDER OF THE LEARNED CITA IN THIS REGARD. ACCORDINGLY, THE GROUND NO. 6 RAISED BY THE REVENUE IS DISMISSED. 8. THE NEXT GROUND TO BE DECIDED IN THIS APPEAL I S THAT WHETHER THE ADDITION IN THE SUMS OF RS. 28,090/- , RS. 33,800/- , RS. 40,000/- AND RS. 7,936/- TOWARDS UNEXPLAINED EXPENDITURE COULD BE MADE IN THE FACTS AND CIRCUMST ANCES OF THE CASE. 8.1. THE BRIEF FACTS OF THIS ISSUE IS THAT THE LE ARNED AO FOUND DURING THE COURSE OF SEARCH THAT THE FOLLOWING PAYMENTS WERE MADE BY THE ASSESSEE :- RS 28,090/- - PAYMENT TO M/S TARA ENTERPRISES ON A CCOUNT OF SHUTTER, COLLPASIBLE GATE AS PER SEIZED DOCUMENT REFE RENCE PJ 10 AT PAGE 51 RS. 33,880/- PAYMENT FOR PURCHASE OF WATER HEATERS FROM M/S GLOBE ELECTRIC & TRADING CO. AS PER SEIZED DO CUMENT REFERENCE PJ 10 AT PAGE 51 RS. 7,936/- - PAYMENT OF AIRFARE AS PER BILL OF M AHABIR TRADING CO DATED 17.9.93 IT.A NO.1142/KOL/2012-C_AM M/S. PREM LAL JAIN 23 AS PER SEIZED DOCUMENT REFE RENCE PJ 17 AT PAGE 48 THE LEARNED AO CONCLUDED THAT NO SATISFACTORY EXPLA NATION WAS FURNISHED BY THE ASSESSEE FOR INCURRENCE OF AFORESAID EXPENDITURE AN D ACCORDINGLY BROUGHT THE SAME TO TAX U/S 69C OF THE ACT. IN RESPECT OF RS. 40,000/ - REPRESENTING AMOUNT RECEIVED FROM SUMAN GUPTA BY PAY ORDER NO. 758915 DRAWN ON UBI , PILKHANA BRANCH, HOWRAH VIDE SEIZED DOCUMENT REFERENCE PJ 15 AT PAGES 8 AND 10, THE LEARNED AO CONCLUDED THAT NO SATISFACTORY EXPLANATION WAS GIVEN FOR THE SAME AND ACCORDINGLY BROUGHT THE SAME TO TAX AS UNDISCLOSED INCOME OF THE ASSESSEE. ON F IRST APPEAL, IT WAS SUBMITTED BEFORE THE LEARNED CIT(A) THAT ALL THESE TRANSACTIONS WERE DULY REFLECTED IN THE CASH BOOK OF M/S JAIN FINANCE CORPORATION VIDE SEIZED DOCUMENT R EFERENCE JFC 1 AND JFC 2. THIS WAS ACCEPTED BY THE LEARNED CIT(A) WHO IN TURN DELE TED THE ADDITION. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US ON THE FOLLOWING GRO UND:- 7. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E, LD.CIT(A) ERRED IN DELETING THE ADDITION OF RS.28,090/-, RS.3 3,800/-, RS.40,000/- AND RS.7,936/- MADE BY THE AO AS THE AS SESSEE FAILED TO OFFER ANY EXPLANATION ON THIS ISSUE EITHER AT TH E TIME OF ASSESSMENT OR AT REMAND STAGE. 8.2. THE LEARNED DR VEHEMENTLY SUPPORTED THE ORDER OF THE LEARNED AO. IN RESPONSE TO THIS, THE LEARNED AR HEAVILY RELIED ON THE ORDER OF THE LEARNED CIT(A). 8.3. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND THAT THE LEARNED CIT(A) HAD ONLY DELETED THIS ADDITION AFTER VERIFICATION OF THE FAC T THAT THE SAID EXPENDITURES OF RS. 28,090/- , RS. 33,880/- AND RS. 7,936/- AND THE REC EIPT OF RS. 40,000/- FROM SUMAN GUPTA WERE DULY ACCOUNTED IN THE BOOKS OF M/S JAIN FINANCE CORPORATION WHICH WERE ALSO PART OF THE SEIZED DOCUMENTS. THE FINDING GIVE N BY THE LEARNED CIT(A) IN THIS REGARD IS NOT CONTROVERTED BY THE LEARNED DR BEFORE US. IN THESE CIRCUMSTANCES, WE FIND NO INFIRMITY IN THE ORDER OF THE LEARNED CIT(A ) IN THIS REGARD. ACCORDINGLY, THE GROUND NO. 7 RAISED BY THE REVENUE IS DISMISSED. IT.A NO.1142/KOL/2012-C_AM M/S. PREM LAL JAIN 24 9. THE LAST GROUND TO BE DECIDED IN THIS APPEAL I S THAT WHETHER AN ADDITION IN THE SUM OF RS. 47,063/- ON ACCOUNT OF INVESTMENT IN FLAT AT 2 ND FLOOR AT BALLYGUNGE CIRCULAR ROAD COULD BE MADE IN THE FACTS AND CIRCUMSTANCES O F THE CASE. 9.1. THE BRIEF FACTS OF THIS ISSUE IS THAT THE LEA RNED AO FOUND DURING THE COURSE OF SEARCH VIDE SEIZED DOCUMENT REFERENCE PJ 22 AT PAGE 34 FOUND THAT AN AMOUNT OF RS. 47,063/- WAS PAID TO M/S AIR CONSTRUCTION AND CONSU LTANTS PVT LTD FOR EXTRA WORK IN THE FLAT AT NO. 24/1, BALLYGUNGE CIRCULAR ROAD, KOL KATA. THE LEARNED AO FOUND THAT THIS SEIZED DOCUMENT WAS FOUND IN THE PREMISES OF T HE ASSESSEE AND HENCE ADDED THE SAME U/S 69C OF THE ACT. ON FIRST APPEAL, IT WAS SUBMITTED BY THE ASSESSEE THAT THE PAYMENT OF RS. 47,063/- WAS MADE BY M/S AIR CONSTRU CTION AND CONSULTANTS PVT LTD FOR EXTRA WORK DONE ON SECOND FLOOR OF THE FLAT SIT UATED AT NO. 24/1, BALLYGUNGE CIRCULAR ROAD, KOLKATA WHICH BELONGED TO PINKU SONU INVESTMENT PVT LTD WHO WERE OWNERS OF THE SAID PREMISES AND ARGUED THAT THIS EX PENDITURE DOES NOT BELONG TO HIM. ACCORDINGLY, THE LEARNED CITA DELETED THE ADDITION. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUND:- 8. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , LD.CIT(A) ERRED IN DELETING THE ADDITION OF RS.47,063/- U/S. 69C OF THE INCOME TAX ACT ON ACCOUNT OF INVESTMENT IN A FLAT AT 2 ND FLOOR AT BALLYGUNGE CIRCULAR ROAD WHEN THE ASSESSEE FAILED TO OFFER ANY EXPLANATION O N THIS ISSUE AND ALSO TO ESTABLISH THAT THE FLAT IS BELONGED TO SOME OTHE R COMPANY, EITHER AT THE TIME OF ASSESSMENT OR AT REMAND STAGE. 9.2. THE LEARNED DR VEHEMENTLY SUPPORTED THE ORDE R OF THE LEARNED AO. IN RESPONSE TO THIS, THE LEARNED AR HEAVILY RELIED ON THE ORDER OF THE LEARNED CITA. 9.3. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIN D THAT THE LEARNED CITA HAD ONLY DELETED THIS ADDITION ON THE PLEA THAT THE SUBJECT MENTIONED FLAT AT NO. 24/1, BALLYGUNGE CIRCULAR ROAD, KOLKATA DOES NOT BELONG TO ASSESSEE BUT BELONGS TO PINKU IT.A NO.1142/KOL/2012-C_AM M/S. PREM LAL JAIN 25 SONU INVESTMENT PVT LTD. WE FIND THAT WHILE DECIDI NG THE GROUND NO. 3 HEREINABOVE, WE HAVE HELD THAT THIS FLAT BELONGS TO THE ASSESSEE AND THE SOURCES FOR THE SAME HAVE BEEN DULY REFLECTED IN THE ACCOUNTS OF M/S JAIN FIN ANCE CORPORATION , A PROPRIETARY CONCERN OF THE ASSESSEE AND HENCE THERE IS NO SCOPE FOR MAKING ANY ADDITION IN THE SUM OF RS. 72,97,613/- THEREIN. WE FIND THAT THE LEAR NED CIT(A) HAD PROCEEDED TO GRANT RELIEF TO TO THE ASSESSEE ON MISTAKEN UNDERSTANDING OF FACTS. SINCE THE SEIZED DOCUMENT VIDE REFERENCE PJ 22 PAGE 34 WAS FOUND IN THE PREMISES OF THE ASSESSEE, IT IS FOR THE ASSESSEE TO EXPLAIN THE SAME WITH SATISFACT ORY EXPLANATION. WE FIND NO SATISFACTORY EXPLANATION FOR INCURRENCE OF THIS EXP ENDITURE OF RS. 47,063/- WAS GIVEN BY THE ASSESSEE. ACCORDINGLY, THE GROUND NO. 8 RAISED BY THE REVENUE IS ALLOWED. 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS PAR TLY ALLOWED. THIS ORDER IS PRONOUNCED IN OPEN COURT ON 27 /11 /2015 COPY OF THE ORDER FORWARDED TO: 1.. THE APPELLANT/DEPARTMENT: ACIT, CENTRAL CIRCLE -XX, PODDAR COURT, 5 TH FL., 18 RABINDRA SARANI,KOLKATA.. 2 THE RESPONDENT/ASSESSEE: PREM LAL JAIN 1 GANESH CHANDRA AVENUE, 4 TH FL., KOL-13. 3 4.. /THE CIT, / THE CIT(A) 5. DR, KOLKATA BENCH 6. GUARD FILE. TRUE COPY, BY ORDER, ASSTT REGISTRAR ** PRADIP SPS SD/- ( S.S VISWANETHRA RAVI, JUDICIAL MEMBER ) SD/- (M. BALAGANESH, ACCOUNTANT MEMBER) DATE 27 /11/2015