Udai Pratap Singh, Pratapgarh V. Asstt. Commissioner of Income Tax, Lucknow

ITA 116/LKW/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1083 (ITAT-LUCKNOW)
• Duration Of Justice: 3 year(s) 1 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 21-03-2018
• Assessment Year: misc
• Appeal Filed On: 11-02-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: J S MINHAS
• Keywords: Unexplained investment; Search and seizure; Retrospective amendment; Block assessment; Reason to believe
• Section: 143(3); 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A , LUCKNOW BEFORE SHRI. T.S. KAPOOR, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER ITA NO. 116/LKW/2015 BLOCK PERIOD : 1/4/1996 TO 16/12/2002 UDAI PRATAP SINGH BHADRI PRATAP GARH V. ACIT CENTRAL CIRCLE II LUCKNOW T AN /PAN : AVYPS0381D (APP ELL ANT) (RESPONDENT) ITA NO. 109/ ALLD /2015 BLOCK PERIOD : 1/4/1996 TO 16/12/2002 ACIT CENTRAL CIRCLE LUCKNOW V. UDAI PRATAP SINGH BHADRI PRATAPGARH T AN /PAN : AVYPS0381D (APP ELL ANT) (RESPONDENT) ASSESSEE BY: SHRI RAKESH GARG, ADVOCATE DEPARTMENT BY: SHRI J. S . MINHAS, CIT (DR) DATE OF HEARING: 21 0 3 201 8 DATE OF PRONOUNCEMENT: 23 0 3 201 8 O R D E R PER P ARTHA SARATHI CHAUDHURY, J.M : THE PRESENT CROSS - APPEALS PREFERRED BY THE REVENUE A S WELL AS THE ASSESSEE EMANATES FROM THE ORDER OF THE LD. CIT(A) - III, LUCKNOW DATED 10/11/2014 PASSED PURSUANT TO THE ORDER OF ITAT DATED 19/5/2010. 2 . THE BRIEF SYNOPSIS IN THIS CASE ARE THAT THE CASE RELATES TO THE BLOCK ASSESSMENT PERIOD ENDING ON 16/12/2002 AND BLOCK ASSESSMENT ORDER PASSED UNDER SECTION 158BC OF THE ACT ON 31/12/2004. THEREAFTER ITA NO.116 & 109 /LKW/2015 PAGE 2 OF 22 THE LD. CIT(A) BY ORDER DATED 15/2/2005 HAD DISMISSED THE APPEAL. THEREAFTER ITAT VIDE ORDER DATED 13/7/2007 IN THE FIRST ROUND, SET ASIDE IT TO THE LD . CIT(A). THE LD. CIT(A) THEREAFTER VIDE ORDER DATED 31/3/2008 IN THE SECOND ROUND OF THE CASE PROVIDED PART RELIEF. THE ITAT THEREAFTER IN THE SECOND ROUND VIDE ORDER DATED 19/5/2010 SET ASIDE THE MATTER TO THE LD. CIT(A) TO DECIDE THE MATTER ON MERITS AND THE PRESENT MATTER BEFORE US ARISES FROM THE SAID ORDER OF THE LD. CIT(A) SO FAR AS REVENUES APPEAL IS CONCERNED. 3 . THE ASSESSEE HAS PREFERRED A CROSS - APPEAL AGAINST THE SAME ORDER OF THE LD. CIT(A). THESE APPEALS WERE HEARD TOGETHER AND SINCE THE ISSU ES INVOLVED AND THE FACTS ARE SIMILAR, THESE ARE BEING DISPOSED TOGETHER IN THIS CONSOLIDATED ORDER. 4 . FIRST WE TAKE UP THE APPEAL OF THE REVENUE IN ITA NO.109/ ALLD /2015. GROUNDS NO.1, 2 AND 3 RELATES TO THE FACT THAT THE LD. CIT(A) HAS DELETED THE ADDITION S OF RS.24,70,000/ - ; RS.45,00,000/ - ; RS.99,22,950/ - AND RS.1,63,16,892/ - BEING INVESTMENT IN FDRS ON THE PREMISE THAT INVESTMENTS IN THE SAME HAVE BEEN MADE OUT OF AGRICULTURAL INCOME. THE GRIEVANCE OF THE REVENUE PERT AINS TO THE FACT THAT NO DETAIL OF AG RICULTURAL LAND WAS PRODUCED BY THE ASSESSEE. 5 . THE AO IN HIS REMAND REPORT DATED 30.09.2014 HAS ALSO MENTIONED THAT THE ASSESSEE HAS FAILED TO ESTABLISH THE DETAILS OF THE LAND HOLDINGS. IT IS THE CASE OF THE ASSESSEE THAT AS REGARDS THE DETAILS OF AGRI CU LTURAL HOLDINGS AND ITS PROOF, T HE SAME WERE FURNISHED BEFORE THE CIT(A) AS WELL AS BEFORE THE ASSESSING OFFICER FOR HIS COMMENTS DURING THE APPELLATE PROCEEDINGS . THE LD. CIT(A) IN HIS ORDER HAS DISCUSSED THIS ISSUE AT PAGES 96 ONWARDS WHEREIN COMPLETE FA CTS OF THE AGRICULTURAL HOLDINGS AND INCOME YEAR - WISE HAS BEEN PROVIDED WITH SUPPORT OF THE ASSESSMENT ORDERS AND APPELLATE ORDERS IN THE CASE OF THE ITA NO.116 & 109 /LKW/2015 PAGE 3 OF 22 ASSESSEE. REGARDING DELETION OF ADDITION OF RS.24,70,000/ - , THE FINDINGS OF THE LD. CIT(A) ARE AS FOLLOWS : - I HAVE PERUSED THE FACTS STATED IN THE ASSESSMENT ORDER, REMAND REPORTS, CIT(A)'S ORDER DATED 31 - 03 - 2008 AND 1TAT ORDER DATED.14 - 06 - 2010 AND AS WELL AS FACTS STATED IN THE ASSESSEE'S SUBMISSIONS AND REJOINDER DATED 30 - 10 - 2014. THE CIT (A) ERRED ON FACT S AND IN LAW IN NOT ALLOWING CREDIT FOR RS. 2470000 / - WITHDRAWN FROM DC BANK SADAR SB A/C NO. 6034 IGN O RING THE FAC T THAT THE ASSESSING OFFICER HAD CONSIDERED BANK ACCOUNTS IN MAK ING ADDITION OF RS. 2,91,22,970/ - . THE FOLLOWING SPECIFIC DEBITS IN THE SAV INGS BANK ACCOUNT HAVE BEEN CONSIDERED BY THE ASSESSING OFFICER WHICH EXPLAINS THE SOURCE OF INVESTMENT TO THE EXTENT OF RS.24,70,000 / - NAME OF BANK SB A/C DATE AMOUNT PARA FDR NO. DATE AMOUNT DCB SADAR 6034 02.08.96 70,000/ - 10(I) 351 02 .08.96 70,000/ - DCB SADAR 6034 10.04.00 5,00,000 10(III) 2040 10.04.00 1,00,000/ - 2041 10.04.00 1,00,000/ - 2042 10.04.00 1,00,000/ - 2043 10.04.00 1,00,000/ - 2044 10.04.00 1,00,000/ - DCB SA DAR 6034 01.05.00 18,30,000 10 (III) 892 01.05.00 6,30,000/ - 893 01.05.00 5,00,000/ - 894 01.05.00 5,00,000/ - 895 01.05.00 5,00,000/ - 6034 10.08.02 70,000 10(VI) 2909 10.08.02 70,000/ - 24,70, 000/ - 27,70,000/ - HENCE FROM THE ABOVE IT IS SEEN THAT THE AMOUNT INVESTED IN FDR IS OF RS. 27,70,000/ - WHEREAS WITHDRAWALS IS OF RS. 24,70,000/ - ITA NO.116 & 109 /LKW/2015 PAGE 4 OF 22 THEREFORE THE DIFFERENCE OF RS. 3,00,000/ - IS TO BE ADDED AS UNEXPLAINED. NOW REGARDING THE SOU RCE OF DEPOSITS IN THE BANK ACCOUNT WHICH IN THIS CASE IS RS.24,70,000/ - IT IS A FACT THAT THE ABOVE DEPOSITS IN THE BANK A/C HAVE BEEN MADE FROM THE AGRICULTURAL INCOME AND OTHER INCOME LIKE TEH BAZARI, HOUSE RENT ETC. THIS FACT HAS BEEN STATED BY THE APP ELLANT IN PAGE 6 OF THIS ORDER THAT RETURNS WERE ALSO FILED IN THE HUF AND INDIVIDUAL STATUS FOR A.Y. 2001 - 2002 AND 2002 - 2003 ON 21 - 03 - 2003 AND ALONG WITH THE RETURN FOR ASSESSMENT YEAR 2001 - 02 THE FOLLOWING DETAILS WERE ALSO FILED - : A.Y. 1989 - 90 TO 1996 - 97 1 - STATEMENT OF INCOME 2 - CAPITAL ACCOUNT A.Y. 1997 TO 2002 - 03 1 - STATEMENT OF INCOME 2 - CAPITAL ACCOUNT 3 - STATEMENT OF AFFAIRS 4 - DETAIL OF INCOME FROM INTEREST ON SAVING BANK A/C, MIP INCOME, INDIRA VIKAS PATRA AND INTEREST ON BANK FDRS FOR T HE INCOME TAX RETURN FOR A.Y.2001 - 02 THE ASSESSING OFFICER HAD PASSED THE ORDER U/S 143(3)ON DATED.17 - 03 - 2004 OF A.Y. 2001 - 02 (HUF), IN THE CASE OF THE APPELLANT, THE ASSESSING OFFICER HAS STATED. HOWEVER FOR SAFEGUARD THE INTEREST OF THE REVENUE THE ASSES SMENT IS MADE ON PR OTECTIVE BASIS ON INCOME OF RS. 27,19,450/ - AND AGRICULTURAL INCOME OF RS. 14,46,870/ - . ISSUE NOTICE OF DEMAND AND CHALLAN. A.Y. 2001 - 02 (INDL), IN THE CASE OF THE APPELLANT, THE ASSESSING OFFICER HAS STATED. ITA NO.116 & 109 /LKW/2015 PAGE 5 OF 22 HOWEVER FOR SAFEGUARD THE INT EREST OF THE REVENUE THE ASSESSMENT IS MADE ON PROTECTIVE BASIS ON INCOME OF RS.3,18,960/ - AND AGRICULTURAL INCOME OF RS.6,48,970/ - , ISSUE NOTICE OF DEMAND AND CHALLAN. AND IN BOTH THE HUF AND INDIVIDUAL CASES OF THE APPELLANT THE AGRICULTURAL INCOME WAS A CCEPTED BY HIM : FOR A.Y.2002 - 03 (IND.) CASE OF THE APPELLANT, THE ASSESSING OFFICER HAS STATED - . SUBJECT TO ABOVE REMARKS ASSESSMENT IS C OMPLETED ON TOTAL INCOME OF RS. 3,05,270/ - AND AGRICULTURAL INCOME OF RS.5,47,340/ - ..... FOR THE A. Y. 2002 - 03 OF (HUF .) IN THE CASE OF THE APPELLANT THE ASSESSING OFFICER HAS STATED ... ... RETURN AS FILED IS BEING ACCEPTED AND NO DEMAND IS BEING RAISED AS THIS STAGE SINCE DEMAND AT THE HIGHER RATE UNDER SECTION 158BC/144 FOR THIS PERIODS HAS ALREADY BEEN RAISED SEPARAT ELY.... THAT BHADRI ESTATE IS VERY OLD ESTATE OF UTTAR PRADESH. THE ASSESSEE RECEIVED AND SUCCEEDED ASSETS FROM HIS FATHER LATE RAJA TRILOCHAN PRATAP SINGH WHO DIED IN THE YEAR 1965. RAJA TRILOCHAN PRATAP SINGH HAD RECEIVED THESE ASSETS ON PARTITION BETWEE N HIS AND HIS BROTHERS RAJA BAJRANG BHADHUR SINGH AND BHADRESHWAR PRASAD SINGH. ON THE DEATH OF BHADRESHWAR PRASAD/SINGH, WHO DIED ISSUELESS HIS ESTATES VESTED IN HIS BROTHER RAJA BAJRANG BHADUR SINGH. THE ONLY SURVIVING CO - PARCENER AND AS SUCH HE HAS SUCC EEDED ALL THE PROPERTIES AS KARTA OF HIS HUF'... .. SUBJECT TO ABOVE REMARKS ASSESSMENT IS COMPLETED ON TOTAL INCOME OF RS.24,54,76./ - AND AGRICULTURAL INCOME OF RS.14,60,374/ - ..... AND ALSO IN CIT (A)'S ORDER FOR A.Y. 2003 - 04, VIDE ITA N0.69/DCIT /CC - IL// LKO.06 - 07 DATED 30 - 11 - 2007 IT HAS BEEN MENTIONED BY THE CIT(A) IN PARA 4 THAT: ITA NO.116 & 109 /LKW/2015 PAGE 6 OF 22 .....I HAVE PERUSED THE FACTS OF THE CASE. THE ASSESSEE HAS SHOWN AGRICULTURE INCOME OF RS.12,60,000/ - . THE ASSESSEE CLAIMS TO BE OWNER OF 1432 BIGHAS LAND INCLUDING 599 BIGHAS IN BENAMI NAMES. THE AGRICULTURE HOLDINGS OF THE ASESSEEE ARE THEREFORE VERY SUBSTANTIAL. EVEN IF MINIMUM INCOME OF RS. 5,000/ - IS TAKEN PER BLGHA EVEN THEN THE INCOME DISCLOSED BY THE ASSESSEE FORM 1432 BIGHA IS REASONABLE AT RS.1260000/ - IN VIEW OF THE H OLDINGS OF THE ASSESSEE AND ALSO IN VIEW OF THE FACT SIMILAR INCOME HAS BEEN ACCEPTED IN THE PREVIOUS YEAR, THE A.O. IS DIRECTED TO TREAT THE INCOME OF RS. 12,60,000/ - AS AGRICULTURE INCOME.... THE ASSESSING OFFICER SHRI RAJESH YADAV, DCIT, SULTANPUR, ORDE R DATED 27 - 02 - 2014 FOR A.Y. 2010 - 1 (HUF) IN THE APPELLANT CASE HAS ALSO ACCEPTED THAT: ....THE ASSESSEE ENJOYS INCOME MAINLY FROM AGRICULTURE. BESIDES AGRICULTURAL INCOME THE ASSESSEE ALSO ENJOYS INCOME FROM TEH BAZARI AND RENT INCOME. THE ASSESSEE PRODUCE D THE DOCUMENTARY EVIDENCES IN SUPPORT TO ITS CLAIM. THE DOCUMENTS WERE EXAMINED. NO ADVERSE INFERENCE IS DRAWN AND THE INCOME RETURN IS ACCEPTED.... ...ASSESSED ACCORDINGLY ON A T OTAL INCOME OF RS. 13,04,570/ - AND AGRICULTURAL INCOME OF RS. 24,50,000/ - IS T O BE TAKEN FOR THE RATE PURPOSES.. ISSUE NOTICE OF DEMAND AND CHALTLAN.. CHARGE INTEREST U/S 234A, 234B, & 234C AS PER RULES... DURING THE COURSE OF THE APPELLATE PROCEEDING THE COPY OF YEAR - WISE LEDGER A/C AND YEAR - WISE AGRICULTURAL INCOME 96 - 97 O NWARDS SHOWING DETAILS LIKE AGRICULTURAL PRODUCE AND TO WHOM THE AGRICULTURAL PRODUCE WAS SOLD ETC. ALONGWITH THE EVIDENCES OF IDENTITY OF PERSONS WERE SENT TO THE ASSESSING OFFICER SHRI RAJESH YADAV, DCIT FOR REMAND AND IN HIS REMAND REPORT DATED 30 - 0 9 - 2014 NO CONTRARY REMARKS REGARDING THE IDENTITY OF THESE PERSONS AND AGRICULTURAL PRODUCE HAS BEEN GIVEN BY THE ASSESSING OFFICER. RATHER SHRI RAJESH YADAV IN A.Y. 2010 - 11 HAD ACCEPTED THE AGRICULTURAL INCOME AND OTHER INCOME FROM TEH ITA NO.116 & 109 /LKW/2015 PAGE 7 OF 22 BAZARI AND INCOME FROM HOUSE RENT IN THE APPELLANT'S HUF CASE. HENCE, AFTER CONSIDERING THE ABOVE STATED FACTS I HOLD THAT THE SOURCE OF ALL THE DEPOSITS IN THE BANK A/C IS THE AGRICULTURAL INCOME AND ALSO INCOME EARNED FROM TEH BA ZARI, HOUSE RENT ETC. HENCE RS. 24,70,000/ - IS DELETED AND EXCESS WHICH IS RS. 3,00,000/ - IS CONFIRMED, THIS ISSUE IS PARTLY ALLOWED. 6 . WITH REGARD TO THE DELETION OF ADDITION OF RS.45,00,000/ - , THE FINDINGS OF THE LD. CIT(A) ARE AS FOLLOWS: - I HAVE PERUSED THE FACTS STATED IN THE ASSESSM ENT ORDER, REMAND REPORTS, CIT(A)'S ORDER 'DATED 31 - 03 - 2008 AND ITAT ORDER DATED. 14 - 06 - 2010 AND AS WELL AS FACTS STATED IN THE ASSESSEE'S SUBMISSION AND REJOINDER DATED 30 - 10 - 2014. THE CIT (A) ERRED ON FACTS AND IN LAW I S NOT ALLOWING DEDUCTION OF RS. 45,0 0,000 FOR THE INVESTMENT IN THE FDRS OF NUCB, KUNDA BRANCH WHICH WAS WITHDRAWN FROM SB A/C NO. 4765 OF DISTT. COOP. BANK LTD. KUNDA, WHICH BANK A/C WAS CONSIDERED FOR MAKING ADDITION OF RS. 2,91,22,970/ - IN RESPECT OF SB A/C., IN THE ASSESSMENT ORDER ON PA GE 20, THE FOLLOWING AMOUNTS OF THE SAVINGS BANK A/C NO. 4765 OF DISTT. COOP. BANK, KUNDA WAS INCLUDED IN ASSESSMENT: - 1996 - 97 25,35,696 1997 - 98 3,445 1998 - 99 84,36,790 1999 - 00 3,65,217 2000 - 01 68,676 2001 - 02 31,30,104 2002 - 03 11,408 1,45,51,336 FROM THIS BANK A/C ASSESSEE VID E CHEQUE NO. 130127 DATED 01 - 05 - 2000, HAS WITHDRAWN RS. 45,00,000/ - AND ON THE SAME DAY 9 ITA NO.116 & 109 /LKW/2015 PAGE 8 OF 22 FDRS OF RS .5,00,000/ - EACH TOTALLING RS. 45,00,000/ - WAS INVESTED IN FDR NO. 26 TO 34 DATED 01.05.2000. NUCB KUNDA 1 - 5 - 2 000 26 5,00,000 1 1 - 5 - 2000 27 5,00,000 2 1 - 5 - 2000 28 5,00,000 3 1 - 5 - 2000 29 5,00,000 4 1 - 5 - 2000 30 5,00,000 3 1 - 5 - 2000 31 5,00,000 6 1 - 5 - 2000 32 5,00,000 7 1 - 5 - 2000 33 5,00,000 8 1 - 5 - 2000 34 5,00,00 0 9 VIDE CIT(A) ORDER PARA 20 THE SAID FDRS WERE AFTER MATURITY HAVE BECOME AS UNDER: 1. FD 104 01.08.200 5,93,000 15.03.20 6,67,303 2 FD 105 01.08.200 5,93,000 15.03.20 6,67,303 3 FD 106 01.08.200 5,93,000 15.03. 20 6,67,303 4. FD 107 01.08.200 5,93,000 15.03.20 6,67,303 5 FD 108 01.08.200 5,93,000 15.03.20 6,67,303 6. FD 109 01.08.200 5,93,000 15.03.20 6,67,303 7. FD 110 01.08.200 5,93,000 15.03.20 6,67,303 8. FD 111 01.08.200 5,93,000 15.03.20 6,67,303 9. FD 112 01.08.200 5,93,000 15.03.20 6,67,303 MY PREDECESSOR CIT(A) - II I , LKO, DID NOT ALLOW THE CREDIT OF RS. 45,00,000/ - BUT AFTER CONSIDERING ALL THE FACTS OF THE CA SE IT IS SEEN THAT THE ORIGINAL INVESTMENT WAS OF RS. 5,00,000/ - AND O N ITA NO.116 & 109 /LKW/2015 PAGE 9 OF 22 CONVERSION IT HAD BECOMES RS. 5,93,000/ - AS PER THE BANK RECORD, I ALSO HOLD THAT THE SOURCE OF ALL THE DEPOSITS ARE AGRICULTURAL INCOME AND INCOME FROM TEH BAZARI AND HOUSE RENT AS STAT ED BY ME IN MY FINDING FOR ISSUE NO. 1. HENCE, AFTER CONSIDERING THE WITHDRAWALS FROM SB A/C IT HAS BEEN PROVED THAT FDRS HAS BEEN MADE OUT OF THE WITHDRAWALS FROM THE BANK ACCOUNT AND THE INTEREST PORTION ON THIS FDRS HAS BEEN ADDED HENCE RS. 45,00,000/ - I S HEREBY DELETED BUT THE INTERE ST FROM SBI, KUNDA BRANCH OF RS. 9,90,255/ - IS TO BE ADDED THEREFORE, THESE ISSUES ARE PARTLY ALLOWED. 7 . WITH REGARD TO THE DELETION OF ADDITION AND RELIEF OF RS.99,22,950/ - , THE FINDINGS OF THE LD. CIT(A) ARE AS UNDER: - I HAV E PERUSED THE FACTS STATED IN THE ASSESSMENT ORDER, REMAND REPORTS, CIT(A)'S ORDER TED 31 - 03 - 2008 AND IT AT ORDER DATED. 14 - 06 - 2010 AND AS WELL AS FACTS STATED IN THE ASSESSEE'S SUBMISSION AND REJOINDER DATED 30 - 10 - 20 1 4. REGARDING THIS ISSUE MY PREDECESSO R THE THEN CI T(A) - I II , IN HIS ORDER DATED 31 - 03 - 2008 HAD GRANTED RELIEF BY STATING THAT THE VALID WARRANT WAS NOT ISSUED. HE OBSERVED IN PARA 24 THAT: .....SHRI G.N. SRIVASTAVA, COUNSEL FOR THE ASSESSEE SUBMITTED THAT AS PER HIS INFORMATION THERE WAS NO WA RRANT ISSUED ON BANK OF BARODA ACCOUNT NO. 5941, THEREFORE, NO INVESTMENT THEREIN COULD BE ADDED AS UNDISCLOSED INCOME IN THE HANDS OF THE ASSESSEE. THERE IS NO DISPUTE THAT A VALID SEARCH WITH VALID WARRANTS IS (HE VERY BASIS FOR INITIATION OF PROCEEDINGS U/S 158BC OF THE ACT AND WHERE THE ASSESSES PRIMA FACIE DISPUTES THAT NO WARRANT OR NO VALID WARRANT HAS BEEN ISSUED AND IF THE SAME IS FOUND TO BE CORRECT THEN THE VERY ADDITION IS WITHOUT JURISDICTION AND HAS TO BE DELETED AND ACCORDINGLY THE A. O. IS D IRECTED TO VERIFY AND PLACED ON RECORD COPY OF THE SEARCH WARRANT REGARDING BANK OF BARODA A/C NO. 5941 AND IF THE CONTENTION OF THE ASSESSES IS FOUND CORRECT AND NO SEARCH WARRANT HAS BEEN ISSUED OR HAS BEEN ISSUED BY ADDL . DIT THEN ITA NO.116 & 109 /LKW/2015 PAGE 10 OF 22 IN SUC H CIRCUMSTANCES ADDITION OF RS. 99,22,950/ - RELATING TO ABOVE MENTIONED ACCOUNT WOULD BE DEL ETED. ACCORDINGLY AMOUNT OF RS. 99,22,950 / - ARE DELETED SUBJECT TO VERIFICATION THAT THERE EXIST NO WARRANT IN THE NAME OF BANK OF BARODA A/C NO. 5941..... IT IS IMPORTANT TO SEE SEC TION 132 OF THE I.T. ACT SEARCH AND SEIZURE SECTION 132 HAS STATED THA T ......(L) WHERE THE [DIRECTOR GENERAL OR DIRECTOR] OR THE CHI EF COMMISSIONER OR COMMISSIONER] [ OR ADDITIONAL DIRE CTOR OR ADDITIONAL COMMISSIONER] [ OR JOINT DIRECTOR OR JOINT COMMISSION ER ] INCONSEQUENCE OF INFORMATION IN HIS POSSESSION ,HAS REASON TO BELIEVE THAT... (A).... (B).... (C)..... THEN (A).... OR (B) SUCH (ADDITIONAL DIRECTOR OR ADDITIONAL COMMISSIONER OR] [JOINT DI RECTOR] OR [JOINT COMMISSIONER ], AS THE CASE MAY BE , MAY AUTH ORISE ANY [ ASSISTANT DIRECTOR [OR DEPUTY DIRECTOR], [ASSISTANT COMMISSIONER [ OR DEPUTY COMMISSIONER] OR INCOME TAX OFFICER... THIS HAS BEEN INSERTED BY FINANCE (NO - 2) ACT 2009 WITH RETROSPECTIVE EFFECT FROM 1 - 06 - 1994 HENCE IN VIEW OF THE ABOVE RETROSPECTIV E AMENDMENT IN I.T. ACT THE WARRANT ISSUED BY THE ADDL.DIT IS A VALID WARRANT AND THE SEARCH IS VALID SEARCH . THE INTEREST IN BANK OF BARODA, KUN DA IN SB A/C NO. 5941 IS OF RS. 7,25,029/ - IS HEREBY ADDED AND CONFIRMED. THIS ISSUE IS ITA NO.116 & 109 /LKW/2015 PAGE 11 OF 22 DISMISSE D. REGARDING TH E DEPOSIT OF RS. 99,22,950 / - I HOLD THAT THE SOURCE OF DEPOSIT IS AGRICULTURAL INCOME AND OTHER INCOME LIKE TEH BAZARI, HOUSE RENT ETC. AS STATED IN MY FINDING FOR ISSUE NO. 1 ABOVE. 8 . WITH REGARD TO DELETION OF ADDITION OF RS.1,63,16,892/ - , THE FINDINGS OF T HE LD. CIT(A) ARE AS UNDER: - I HAVE PERUSED THE FACTS STATED IN THE ASSESSMENT ORDER, REMAND REPORTS, CIT(A)'S ORDER 31 - 03 - 2008 AND ITAT ORDER DATED. 14 - 06 - 2010 AND AS WELL AS FACTS STATED IN THE ASSESSEE'S SUBMISSION AND REJOINDER DATED 30 - 10 - 2014.THE CI T (A) IS NOT CONSIDERING THAT THE VARIOUS INVESTMENTS WERE FULLY COVERED BY INCOME DERIVED FROM AGRICULTURE OF RS. 16316892/ - , RS. 21582 00/ - , 1450053/ - , 1974659/ - , RS.5752000/ - AND RS. 761319/ - ARE NOT AT ALL JUSTIFIED AS THEY HAVE BEEN MADE OUT OF SUCH AGRI CULTURAL INCOME EITHER OF EARLIER YEARS ACCUMULATION OR AMOUNT OF SUCH AGRICULTURAL INCOME FOR THE YEAR: U.P. SINGH (BLOCK ASSESSMENT) THE POSITION IS SUMMARIZED BELOW - (FDR'S AS PER REMAND REPORT) I, NUCB SADAR BRANCH TOTAL OF ALL FDRS 1,63,16,892 COV ERED BY WITHDRAWALS 1,33,05,000 UNEXPLAINED 30,11,892 CHILBILA BRANCH TOTAL OF ALL FDRS 19,74,659 LESS REINVESTMENT 2,89,659 NET 16,85,000 COVERED BY WITHDRAWALS 16,85,000 UNEXPLAINED NIL KU NDA BRANCH TOTAL OF ALL FDRS 57,92,000 DEDUCT INTEREST INCLUDED IN FIGURES 8,37,000 NET 49,55,000 ITA NO.116 & 109 /LKW/2015 PAGE 12 OF 22 COVERED BY WITHDRAWALS 49,55,000 UNEXPLAINED NIL THE DCIT, SULTANPUR IN HIS REMAND REPORT DATED 31 - 10 - 2007 HAD VERIFIED THE FDRS FROM THE BANK R ECORDS AND HAD GIVEN A DETAILS ANALYSIS OF THE ORIGINAL INVESTMENT AND FURTHER CONVERSION AND ACCORDING TO HIM THE ORIGINAL INVESTMENT COMES TO RS. 16316892/ - AND THE INTEREST PORTION IS OF RS. 50,85,806/ - AND BASED ON HIS VERIFICATION FROM BANK RECORDS INTE REST IN OTHER ACCOUNTS HAS ALSO BEEN COMPUTED. THIS HAS ALSO BEEN MENTIONED BY THEN CIT(A) IN HIS APPEAL ORDER DATED 31 - 03 - 2008. IN VIEW OF MY FINDING AS IN ISSUES NO. 1, 3, 4 AND 5 IT HAS ALREADY BEEN HELD THAT THE SOURCE OF DEPOSITS/INVESTMENT IS THE AGR ICULTURAL INCOME AND INCOME FROM TEH BAZARI AND HOUSE RENT ETC. HENCE THE INVESTMENT OF RS. 16316892/ - IS HEREBY DELETED AND THE INTEREST OF RS. 50,85,806/ - IS CONFIRMED . 9 . BEING FURTHER AGGRIEVED, THE REVENUE HAS PREFERRED THIS APPEAL BEFORE US AND ON THIS ISSUE, THE PREMISE AND CRUX OF THE ARGUMENT OF THE REVENUE IS THAT EVIDENCE AND DETAILS OF AGRICULTURAL LAND WERE NOT PRODUCED BY THE ASSESSEE. THE LD. D.R. VEHEMENTLY SUPPORTED THE FINDINGS OF THE ASSESSING OFFICER AND STATED THAT IN THE ABSENCE OF PROOF THAT INCOME IS FROM AGRICULTURAL LAND, THE INVESTMENTS SO MADE ARE ATTRACTED TO TAX. 10 . THE LD. A.R. OF THE ASSESSEE, ON THE OTHER HAND, REFUTED THE CONTENTIONS OF THE LD. D.R. AND REITERATED THE SUBMISSIONS MADE BEFORE THE LD. CIT(A) AS WELL AS THE ASSESSIN G OFFICER AND SUBMITTED BEFORE US THAT ALL THE DETAILS OF AGRICULTURAL HOLDINGS ALONG WITH ITS PROOF HAVE BEEN PLACED BEFORE THE ASSESSING OFFICER AS WELL AS THE LD. CIT(A) AND EVIDENCE IS ALSO PLACED BEFORE US IN THE PAPER BOOK FOR OUR PERUSAL. 11 . WE HAVE PE RUSED THE CASE RECORDS, HEARD THE RIVAL CONTENTIONS AND WE FIND THAT IN THE WRITTEN SUBMISSIONS OF THE ASSESSEE PLACED ITA NO.116 & 109 /LKW/2015 PAGE 13 OF 22 BEFORE THE LD. CIT(A), THE ENTIRE DETAILS OF AGRICULTURAL LAND HOLDINGS HAVE BEEN PLACED. IT IS STATED THAT ABOVE EXTENT OF AGRICULTURA L LAND CAN BE SEEN FROM THE LIST ENCLOSED HEREWITH FOR YOUR KIND CONSIDERATIONS WHICH WERE SUBJECT MATTER OF WRIT PETITION NO.2244/1985 (CEILING) IN ORDER TO PROVE THE AGRICULTURAL INCOME EARNED SINCE 1956 AND 1971 RESPECTIVELY. WE ASKED THE LD. A.R. OF THE ASSESSEE TO SUBSTANTIATE THIS PARTICULAR STATEMENT THROUGH EVIDENCE AS TO HOW THE LAND HOLDING OF THE ASSESSEE IS PROVED. THE LD. A.R. OF THE ASSESSEE INVITED OUR ATTENTION TO PAGES 208,209, 210 AND 211 OF THE PAPER BOOK WHEREIN THE COPY OF WRIT PETIT ION REFERRED TO ABOVE IS THERE AND DOCUMENTS ANNEXED PROVES THE LAND HOLDING OF THE ASSESSEE WHICH ARE MADE AS PART OF THIS ORDER AS ANNEXURE A, ANNEXURE B, ANNEXURE C AND ANNEXURE D . 12 . WE ALSO FIND ANNEXED IN THE PAPER BOOK THE COPY OF ASSESSMENT OR DER PASSED BY THE ASSESSING OFFICER , CENTRAL CIRCLE - 2 , LUCKNOW UNDER SECTION 143(1) OF THE ACT FOR ASSESSMENT YEAR 2001 - 02, ORDER DATED 12/1/2004 ASSESSING THE AGRICULTURAL INCOME AT RS.6,48,970/ - . WE ALSO FIND COPY OF THE ASSESSMENT ORDER PASSED BY ASSES SING OFFICER, CENTRAL CIRCLE - 2, LUCKNOW, UNDER SECTION 143(1) FOR ASSESSMENT YEAR 2001 - 02 (HUF STATUS) DATED 12.01.2004 ASSESSING AGRICULTURE INCOME AT RS.14,46,810/ - . WE ALSO FIND IN THE PAPER BOOK ANNEXED THE COPY OF THE ASSESSMENT ORDER PASSED BY ASSES SING OFFICER, CENTRAL CIRCLE - 2, LUCKNOW, UNDER SECTION 143(3) FOR ASSESSMENT YEAR 2002 - 03 (IND.) DATED 18.03.2005 ASSESSING AGRICULTURE INCOME AT RS.5,47,340/ - . THERE IS ALSO C OPY OF THE ASSESSMENT ORDER PASSED BY ASSESSING OFFICER , CENTRAL CIRCLE - 2, LUCK NOW, UNDER SECTION 143(3) FOR ASSESSMENT YEAR 2002 - 03 (HUF) DATED 18.03.2005 ASSESSING AGRICULTURE INCOME AT RS.14,60,374/ - . WE ALSO FIND C OPY OF THE APPEAL ORDER PASSED BY CIT(A) - 3, LUCKNOW, DATED 30.11.2007 FOR ASSESSMENT YEAR 2003 - 04 ACCEPTING 1432 BIG HAS OF LAND AND AGRICULTURE INCOME AT RS.12,60,000/ - . WE ALSO FIND COPY OF THE ASSESSMENT ORDERS PASSED FOR A.Y. 2004 - 05 ITA NO.116 & 109 /LKW/2015 PAGE 14 OF 22 BOTH (HUF) AND (INDIVIDUAL) CAPACITY WHEREIN ARISES INCOME AS AGRICULTURAL INCOME AND ITS ACCEPTED BY THE DEPARTMENT. THERE IS ALSO C OPY OF THE ASSESSMENT ORDER PASSED BY ASSESSING OFFICER UNDER SECTION 143(3) FOR ASSESSMENT YEAR 2011 - 12 (HUF) ASSESSING AGRICULTURE INCOME AT RS.24,50,000/ - AND ALSO SIMILAR FOR ASSESSMENT YEAR 2013 - 14 ASSESSING AGRICULTURE INCOME AT RS.20,50,000/ - . 13 . THE P APER BOOK FILED BEFORE US ALSO CONTAINS THE COPY OF KHASRA KHATAUNI REGARDING AGRICULTURE HOLDINGS. WE ALSO FIND ANNEXED IN THE PAPER BOOK ASSESSMENT ORDER PASSED BY ASSESSING OFFICER, CENTRAL CIRCLE - 2, LUCKNOW, UNDER SECTION 147/143(3) FOR ASSESSMENT YEA R 2002 - 03 (IND.) ASSESSING AGRICULTURE INCOME AT RS.5,47,340/ - . THERE IS ALSO ASSESSMENT ORDER PASSED BY ASSESSING OFFICER UNDER SECTION 147/143(3) FOR A.Y. 2003 - 04 (IND.) ASSESSING AGRICULTURE INCOME AT RS.5,10,400/ - . 14 . THEREFORE, ALL THESE EVIDENCES WER E FILED BEFORE THE DEPARTMENT AND IN THE FORM OF PAPER BOOK HAS ALSO BEEN PLACED BEFOR E US AND ON PERUSAL OF THE SAME IT IS ABSOLUTELY CLEAR THAT INCOME DERIVED ARE IN THE NATURE OF AGRICULTURAL INCOME. THE LD. CIT(A) ON ALL THE ISSUES DISCUSSED HEREINABO VE HAVE ANALYSED THE FACT THAT DEPARTMENT HAD SOME POINT OR THE OTHER EITHER PRIOR TO THE BLOCK ASSESSMENT PERIOD OR EVEN AFTER IN THE SUCCEEDING ASSESSMENT YEAR HAVE TAKEN A VIEW THAT ASSESSEE IS HAVING AGRICULTURAL INCOME AND, THEREFORE, FINDINGS OF THE LD. CIT(A) IS CORRECT THAT ALL DEPOSITS IN THE BANK ACCOUNT ARE FROM AGRICULTURAL INCOME. WE WOULD ALSO LIKE TO REFLECT AT THIS MOMENT ON THE REMAND REPORT OF THE ASSESSING OFFICER WHEREIN HE HAS DENIED THE FACT THAT ASSESSEE HAS PRODUCED ALL THE DOCUMENT S AS PROOF OF AGRICULTURAL INCOME WHEREAS IN THE CONTRARY , THE RECORDS ITSELF SPEAK THAT ALL THE EVIDENCES REGARDING AGRICULTURAL INCOME WERE PRODUCE BEFORE THE DEPARTMENT. IT IS ALSO PERTINENT TO NOTE THAT THE SAME ASSESSING OFFICER , WHO HAS REFUSED THE CLAIM OF THE ASSESSEE AS AGRICULTURAL ITA NO.116 & 109 /LKW/2015 PAGE 15 OF 22 INCOME IN THE REMAND REPORT , HAS ACCEPTED ASSESSEES CLAIM OF AGRICULTURAL INCOME IN THE LATER YEAR. WE, THEREFORE, FIND NO INFIRMITY WITH THE FINDINGS OF THE LD. CIT(A) AND GROUNDS NO.1 TO 3 OF THE REVENUES APPEAL A RE DISMISSED AND THE RELIEF GIVEN BY THE LD. CIT(A) TO THE ASSESSEE SUSTAINED. ACCORDINGLY, GROUNDS NO.1 TO 3 ARE DISMISSED. 15 . WITH REGARD TO GROUND NO.4, THE ISSUE IS DEALT WITH BY THE LD. CIT(A) AT PAGES 106 TO 108 OF HIS ORDER. THIS GROUND IS GENERAL IN NATURE AND WE HAVE PERUSED THE ISSUE AND WE FIND THAT TOTAL UNDISCLOSED INCOME ASSESSED BY THE ASSESSING OFFICER IN BLOCK ASSESSMENT ORDER WAS RS.14,97,51,700/ - . THE SAME WAS ON ACCOUNT OF UNDISCLOSED INVESTMENT IN BANK FDRS AND INTEREST ACCRUED, SAVING BANK AND AGRICULTURAL RECEIPTS. THE LD. CIT(A) HAS REDUCED THE SAME TO RS.1,29,52,434/ - . IT WAS EXPLAINED BEFORE THE ASSESSING OFFICER AS WELL AS THE LD. CIT(A) THAT ALL DEPOSITS IN FDRS WERE OUT OF AGRICULTURAL INCOME. ONCE AGRICULTURAL INCOME HAS BEEN ACCEPTED, QUESTION OF MAKING ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT DOES NOT ARISE. THE LD. CIT(A) HAS DEALT WITH THE DEPOSITS IN FDRS AND INTEREST ACCRUED SEPARATELY. OUT OF TOTAL ADDITION MADE , THE AMOUNT TO THE EXTENT OF RS.1,29,52,434/ - HAS B EEN FOUND TO BE UNEXPLAINED TO THE SATISFACTION OF THE LD. CIT(A) AND THAT TOO UNDER DIFFERENT HEADS. WE DO NOT FIND ANY INFIRMITY WITH THE FINDINGS GIVEN BY THE LD. CIT(A), THEREFORE, GROUND NO.4 OF THE APPEAL OF THE REVENUE IS DISMISSED. 16 . REGARDING GROUN DS NO.5 AND 6 OF THE REVENUES APPEAL, IT RELATES TO ADDITION MADE APPEARING IN THE NAME OF SHRI RAGHURAJ PRATAP SINGH. THE ADDITION REFERRED TO IN THIS GROUND OF APPEAL HAS BEEN MADE ON PROTECTIVE BASIS IN THE HANDS OF THE ASSESSEE. SINCE THE SAME ADDIT ION HAS BEEN MADE ON SUBSTANTIVE BASIS IN THE HANDS OF RAGHURAJ PRATAP SINGH AND THE ORDER IN HIS CASE HAS BECOME FINAL, QUESTION OF ITA NO.116 & 109 /LKW/2015 PAGE 16 OF 22 MAKING SEPARATE ADDITION AGAIN IN THE HANDS OF THE ASSESSEE DOES NOT ARISE. WE, THEREFORE, DISMISS THESE GROUNDS OF APPEAL . 17 . WITH REGARD TO GROUND NO.7, IT WAS STATED BY THE LD. A.R. OF THE ASSESSEE THAT APPEAL EFFECT HAS BEEN GIVEN BY THE ASSESSING OFFICER HIMSELF AFTER CONSIDERING THE RELIEF GIVEN BY THE LD. CIT(A) AND THE ADDITIONS WERE CONFIRMED. THE ENTIRE REVISED DEMAND HAS BEEN DEPOSITED. 18 . THE LD. D.R. DID NOT HAVE ANY OBJECTION. ONCE THIS IS THE FACT, WE DO NOT FIND ANYTHING TO ADJUDICATE THIS GROUND. THEREFORE, THIS GROUND IS ALSO DISMISSED. 19 . GROUND NO.8 OF THE APPEAL IS GENERAL IN NATURE WHICH NEEDS NO ADJUDICATION. 20 . ACCORDINGLY , APPEAL OF THE REVENUE IS DISMISSED. 21 . NO WE TAKE UP ASSESSEES APPEAL IN ITA NO.116/LKW/2015. THE ASSESSEE HAS PREFERRED THE FOLLOWING GROUNDS OF APPEAL: - 1. THAT THE LEARNED CIT (A) ERRED ON FACTS AND IN LAW IN UPH OLDING THE FOLLOWING AD DITIO NS: - A) INCOME FROM TEHBAZARI AND RENT OF HUF RS.7,03,846 / - B) UNEXPLAINED DEPOSIT PAGE 83 OF ORDER RS.30,11,892 / - C) UNEXPLAINED DEPOSIT PAGE 97 OF ORDER RS.3,00,000 / - D) UNEXPLAINED DEPOSIT PAGE 83 OF ORDER RS.50,000 / - 2. THAT THE ORDER PASSED BY THE CIT(A) IS ERRONEOUS AND BAD IN LAW AND ON FACTS AND DESERVES TO BE QUASHED.. 3. THE APPELLANT RESERVES ITS RIGHTS TO ADD, MODIFY OR DELETE ANY OTHER LEGAL OR FACTUAL GROUND/GROUNDS AS MAY BE NECESSARY IN THE INTEREST OF JUSTICE BEFORE OR DURI NG THE PENDENCY OR HEARING OF THE PRESENT APPEAL. ITA NO.116 & 109 /LKW/2015 PAGE 17 OF 22 22 . WITH REGARD TO THE ADDITION WHICH WAS UPHELD BY THE LD. CIT(A) REGARDING INCOME FROM THE BAZARI AND RENT OF HUF OF RS. 7,03,846/ - , WE FIND THAT SO FAR AS ASSESSEES APPEAL IS CONCERNED, IT IS WITH RESPECT TO THE QUANTUM OF ADDITION CONFIRMED. AS REGARDS ADDITION OF RS.7,03,846/ - , THE SAME BELONGS TO HUF OF THE ASSESSEE. THE SAME SHOULD NOT HAVE BEEN ASSESSED IN THE INDIVIDUAL ASSESSMENT. 23 . WE HAVE PERUSED THE CASE RECORDS AND FROM THE ORDER OF THE LD. CIT(A ) IT IS ABSOLUTELY CLEAR THAT THIS ADDITION OF RS.7,03,846/ - BELONGS TO HUF AND IT HAS TO BE ASSE SSE D IN THE HANDS OF HUF AND THEREFORE THE SAME SHOULD NOT HAVE BEEN ASSESSED IN INDIVIDUAL ASSESSMENT. WE, THEREFORE, DIRECT DELETION OF THIS AMOUNT. 24 . WITH RE GARD TO ADDITION WITH RESPECT TO UNEXPLAINED DEPOSIT OF RS.30,11,892/ - ; RS.3,00,000/ - AND RS.50,000/ - , IT WAS VEHEMENTLY ARGUED BY THE LD. A.R. OF THE ASSESSEE THAT THEY WERE EXCESSIVE IN NATURE. WE ARE NOT CONVINCED WITH THE CONTENTIONS OF THE LD. A.R. O F THE ASSESSEE AND THEREFORE, WE DISMISS THESE GROUNDS. 25 . GROUNDS NO.2 AND 3 OF THE ASSESSEES APPEAL ARE GENERAL IN NATURE, HENCE NEEDS NO ADJUDICATION. 26 . ACCORDINGLY, ASSESSEES APPEAL IS PARTLY ALLOWED. 27 . IN THE RESULT, REVENUES APPEAL IN ITA NO.109/ALLD/201 5 IS DISMISSED AND ASSESSEES APPEAL IN ITA NO.116/LKW/2015 IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 23 / 0 3 / 201 8 . SD/ - SD/ - [ T.S. KAPOOR ] [PARTHA SARATHI CHAUDHURY ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 23 RD MARCH , 201 8 JJ: 2103 ITA NO.116 & 109 /LKW/2015 PAGE 18 OF 22 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ITA NO.116 & 109 /LKW/2015 PAGE 19 OF 22 ANNEXURE A ITA NO.116 & 109 /LKW/2015 PAGE 20 OF 22 ANNEXURE B ITA NO.116 & 109 /LKW/2015 PAGE 21 OF 22 ANNEXURE C ITA NO.116 & 109 /LKW/2015 PAGE 22 OF 22 ANNEXURE D