ACIT, Chandigarh V. Shri Gurjit Singh, Mohali

ITA 1189/CHANDI/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77182 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 23-06-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 12-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Unexplained cash credit; Gift; Business income; Income from undisclosed sources; Document seized; Opportunity of being heard; Peak credit; Additional evidence; Documents seized
• Section: 143(3); 133(6); 131; 148; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B, CHANDIGARH BEFORE SHRI T.R. SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO. 1169 & 1170/CHD/2012 ASSESSMENT YEARS : 2006-07 & 2007-08 GURJIT SINGH V D.C.I.T. CENTRAL CIRCLE I H NO. 748, PH 3B-I CHANDIGARH MOHALI ANEPS 7778 N ITA NO. 1189 & 1190/CHD/2012 ASSESSMENT YEARS : 2006-07 & 2007-08 A.C.I.T. CENTRAL CIRCLE I V GURJIT SINGH CHANDIGARH H NO. 748, PH 3B-I MOHALI ANEPS 7778 N (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI ROHIT GOEL DEPARTMENT BY: SHRI M ANJIT SINGH DATE OF HEARING 25.6.2014 DATE OF PRONOUNCEMENT 15.7.2014 O R D E R PER T.R. SOOD, A.M THESE ARE CROSS APPEALS AND ARE DIRECTED AGAINST TH E ORDERS DATED 13.9.2012 OF THE LD CIT(A), GURGAON. S OME ISSUES ARE COMMON IN THEE APPEALS AND THESE WERE HE ARD TOGETHER SO THEY ARE DISPOSED OFF BY THIS COMMON OR DER FOR THE SAKE OF CONVENIENCE. ITA NO. 1169/CHD/2012 GURJIT SINGH 2. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLO WING GROUNDS: 1. THAT AUTHORITIES BELOW HAS ERRED IN LAW AND FACT S IN FRAMING THE ASSESSMENT WITHOUT AFFORDING PROPER OPPORTUNITY OF BEING HEARD TO THE APPELLANT. 2. THAT AUTHORITIES BELOW HAS ERRED IN LAW AND FACT S TO APPOINT SPECIAL AUDITOR IN AN AUTOMATIC MANNER WITHOUT CONS IDERING THE FACTS OF THE CASE AND CONSEQUENTLY THE APPOINTMENT OF THE AU DITOR IS BAD IN LAW. 2 3 THAT THE APPOINTMENT OF SPECIAL AUDITOR IS BAD IN LAW AND IS NOT IN ACCORDANCE WITH THE SPIRIT OF LAW UNDER THE PROVISI ON OF SECTION 142(2A) OF THE ACT BUT ONLY TO GAIN TIME FOR COMPLETING THE ASSESSMENT WHICH IS BARRED BY LIMITATION. 4 THAT LD. CIT(A) HAS ERRED IN LAW AND FACTS IN CON FIRMING AN ADDITION OF RS. 10,00,000/- U/S 69 ON ACCOUNT OF AL LEGED TO BE PAID AS PER PAGE 69 OF A1 SEIZED FROM 748, PH 3B-1, MOHALI FOR PURCHASE OF PLOT IN LUDHIANA AT PARK PLAZA. 5 THAT LD. CIT(A) HAS ERRED IN LAW AND FACTS IN CON FIRMING AN ADDITION OF RS. 35,00,000/- U/S 69 ON ACCOUNT OF AM OUNT ALLEGED TO BE PAID TO SHRI K.D. SHARMA COMPRISING RS. 8,00,000/- & RS. 25,00,000/- AND RS. 2,00,000/- ON ACCOUNT OF DIFFERENCE IN TOTA LING. 6 THAT LD. CIT(A) HAS ERRED IN LAW AND FACTS IN CON FIRMING AN ADDITION OF RS. 1,53,61,019/- U/S 69 ON ACCOUNT OF AMOUNT ALLEGED TO BE PAID AS PER PAGES 109 TO 113 OF A5 SEIZED FROM 717, PH 3B-1, MOHALI. 7 THAT LD. CIT(A) HAS ERRED IN LAW AND FACTS IN CON FIRMING AN ADDITION OF RS. 9,25,000/- U/S 69 ON ACCOUNT OF AM OUNT ALLEGED TO BE PAID AS PER PAGE 65 OF A1 SEIZED FROM 748, PH 3B-1, MOHALI FOR PURCHASE OF UCO BANK BUILDING. 8 THAT LD. CIT(A) HAS ERRED IN LAW AND FACTS IN CON FIRMING AN ADDITION OF RS. 8,12,621/- U/S 68 ON ACCOUNT OF AL LEGED UNEXPLAINED CASH CREDITS COMPRISING RS. 12621/- RECEIVED FROM M OHINDER PAL SINGH VIDE DD NO. 672204 DRAWN ON OBC BANK AND RS. 8,00,0 00/- RECEIVED FROM K.D. SHARMA VIDE CHEQUE NO. 6607 DATED 3.2.200 6. 9. THAT CIT(A) HAS ERRED IN LAW AND FACTS IN CONFIR MING THE ADDITIONS OF RS. 4,41,902/- UNDER SECTION 68 ON ACCOUNT OF AL LEGED UNEXPLAINED CASH CREDITS COMPRISING RS. 441902/- PAID TO AGGARW AL STONE PUBLISHING INDIA. 10. THAT CIT(A) HAS ERRED IN LAW AND FACTS IN CONFI RMING THE ADDITIONS OF RS. 11,50,000/- ON ACCOUNT OF PAYMENTS ALLEGED T O BE NOT RECORDED IN THE BOOKS IN RESPECT OF PAYMENTS OF RS. 8,00,000/- TO A SUPREME COURT ADVOCATE & RS. 3,50,000/- TO LD. D.R. FOR THE REVEN UE. S. PRADHAN. 11. THAT CIT(A) HAS ERRED IN LAW AND FACTS IN CONFI RMING THE ADDITIONS OF RS. 65,65,022/- AS UNEXPLAINED RECEIPTS AS PER P AGES 121-122 OF ANNEXURE A-5 SEIZED FROM 717, PHASE 3- B-1 MOHALI R ELATING TO AN ACCOUNT OF R.N. HIGHWAYS PRIVATE LIMITED. 12. THAT LEARNED CIT(A) HAS ERRED IN LAW AND FACTS IN NOT TAKING RELIANCE OF ENTRIES RECORDED IN SUPPLEMENTARY CASH BOOK PRODUCED BEFORE THE CIT(A) AFTER ADMITTING THE SAME U/S 46A( 1)(D) AND DESPITE THE FACT THAT ASSESSING OFFICER HAS CONFIRMED THE VERI FICATION OF DEBIT/CREDIT ENTRIES RECORDED IN THE SUPPLEMENTARY CASH BOOK. 3 OUT OF ABOVE, GROUNDS NO. 1 TO 3 ARE NOT PRESSED BEFORE US, THEREFORE SAME ARE DISMISSED AS NOT PRESSED. 4 GROUND NO. 4 AFTER HEARING BOTH THE PARTIES WE FIND THAT DURING SEARCH PG 69 MARKED AS ANNEXURE A WAS FOUND AND SEIZED. THIS DOCUMENT SHOWS INVESTMENT IN VARIOUS PROPERTIE S TO THE EXTENT OF RS. 237.50 LAKHS. IT WAS POINTED OUT THAT PAYMEN T TO THE EXTENT OF RS. 227.5 LAKHS IN RESPECT OF VARIOUS PROPERTIES HA VE ALREADY BEEN CONSIDERED SEPARATELY. FOR THE LAST ITEM OF RS. 10 LAKHS IT WHICH WAS INVESTMENT IN A PLOT IN LUDHIANA AT PARK PLAZA, RS. 5 LAKHS IN 3 CHEQUE WAS SHOWN. THE ASSESSEE WAS REQUESTED TO G IVE EXPLANATION FOR THE SOURCES OF THIS PROPERTY. IN R ESPONSE IT WAS EXPLAINED THAT THE ASSESSEE WAS PLANNING TO PURCHAS E THIS PROPERTY BUT ULTIMATELY NO TRANSACTION HAD TAKEN PLACE. SINC E NO DOCUMENTARY EVIDENCE WAS FURNISHED THE ASSESSING OFFICER ADDED A SUM OF RS.10 LAKHS TO THE INCOME OF THE ASSESSEE. 5 ON APPEAL CERTAIN DETAILS WERE FILED WHICH WERE S ENT FOR VERIFICATION IN REMAND PROCEEDINGS BY THE LD. CIT(A ). THE COMMENTS OF THE ASSESSING OFFICER AND THE ASSESSEE HAVE BEEN REPRODUCED BY THE LD. CIT(A) AS UNDER: DCIT IN HIS COMMENTS HAS STATED AS UNDER : ASSESSEE HAS CONTENTED THAT HE HAS ENTERED INTO A V ERBAL AGREEMENT WITH MR. VIJAY PAL SINGH FOR BUYING A PLOT IN LUDHI ANA, NEAR PARK PLAZA. ASSESSEE HAS PAID A SUM OF RS. 5,00,000/- ON 19.01. 2006 IN CASH AND RS. 5,00,000/- THROUGH CHEQUE NO. 567305 DATED 19.0 1.2006 DRAWN OR ANDHRA BANK 429. THE CHEQUE OF RS. 5,00,000/- WAS N OT ENCASHED BY THE SELLER VIJAY PAL SINGH. HOWEVER , THIS DEAL WAS CAN CELLED AND AMOUNT OF RS. 5,00,000/- ADVANCED TO VIJAY PAL SINGH WAS ADJU STED IN HIS ACCOUNT WITH ASSESSEE. ASSESSEE FURTHER CONTENDED THAT PAYM ENT OF RS. 5,00,000/- WAS REFLECTED IN THE SUPPLEMENTARY CASH FLOW STATEMENT. WITH REGARD TO PAYMENT OF RS. 5,00,000/- CLAIMED TO HAVE BEEN PAID OUT OF FUNDS AVAILABLE AS RECORDED IN SUPPLEMENTARY CAS H BOOK, THE ENTRIES OF RS. 5,00,000/- IS DEBITED IN THE SUPPLEMENTARY C ASH BOOKS, THE DEBIT / CREDIT ENTRIES IN THIS CASH BOOK IS VERIFIED. HOWEV ER, THE SUPPLEMENTARY CASH BOOK NOW FILED BY ASSESSEE IS IN CONTRAVENTION TO RULE 46A OF THE I.T. RULES, 1962 AND THE SAME MAY NOT BE ADMITTED A S TANTAMOUNT TO ADDITIONAL EVIDENCE. THESE PAYMENTS WERE NOT RECORD ED IN THE BOOKS PRODUCED BEFORE SPECIAL AUDITOR AND THEREFORE THESE AMOUNTS HAVE BEEN RIGHTLY ADDED BACK AS UNEXPLAINED INCOMES OF THE AS SESSEE U/S 69 OF THE I.T. ACT, 1961. ASSESSEE IN HIS COUNTER COMMENTS HAS STATED THE AD DITION COMPRISE RS. 5,00,000/- IN CASH AND RS. 5,00,000/- THROUGH CHEQU E NO. 567305 DATED 19.01.2006 DRAWN ON ANDHRA BANK 429.THE LEARNED DCI T HAS ACCEPTED THE CONTENTION OF ASSESSEE TO THE EXTENT OF RS. 5,0 0,000/- PAID THROUGH CHEQUE WHICH WAS NOT ENCASHED. THE LEARNED DCIT HAS VERIFIED THE TRANSACTION O RS. 5,00,000/- PAID IN CASH AND ALL D EBIT AND CREDIT ENTRIES IN SUPPLEMENTARY CASH BOOK, HOWEVER THE LEARNED OFF ICER HAD OBJECTED THE ADMISSION OF SUPPLEMENTARY CASH BOOK U/R 46 A O F THE I.T. RULES 1962. THAT ON THE ISSUE OF ADMISSION OF ADDITIONAL DOCUMENTS FILED FOR THE FIRST TIME IN APPEAL A DETAILED COMMENTS HAS AL READY BEEN MADE UNDER APPLICATION U/S 46 A OF THE I.T. RULES 1962. THAT ON THE ISSUE OF ADMISSION OF ADDITIONAL DOCUMENTS FILED FOR THE FIR ST TIME IN APPEAL A DETAILED COMMENTS HAS ALREADY BEEN MADE UNDER APPLI CATION U/S 46 A AND JUSTIFICATION HAS BEEN GIVEN BY ASSESSEE THERE WAS NO SUFFICIENT TIME AFFORDED BY AO TO REPLY THE ABOVE TRANSACTION. THE SOURCE OF PAYMENT HAS SINCE BEEN EXPLAINED AND VERIFIED BY LEARNED DC IT AS SUCH THERE IS NO JUSTIFICATION IN ANY ADDITION. 4 THE LD. CIT(A) AGREED WITH THE COMMENTS OF THE ASSE SSING OFFICER AND OBSERVED THAT SINCE SUPPLEMENTARY CASH BOOK WAS NOT ADMITTED AND ACCORDINGLY ADDITION OF RS. 10 LAKHS WAS CONFI RMED. 6 BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE MAINL Y SUBMITTED THAT THE ASSESSEE WAS PLANNING TO PURCHASE A PLOT I N LUDHIANA NEAR PARK PLAZA AND ACCORDINGLY A SUM OF RS. 5 LAKHS VI DE CHEQUE DRAWN ON ANDHRA BANK WAS GIVEN TO ONE SHRI VIJAYPAL SINGH AND FURTHER A SUM OF RS. 5 LAKHS IN CASH WAS ALSO PAID WHICH WAS DULY REFLECTED IN THE SUPPLEMENTARY CASH FLOW STATEMENT. IN THIS REG ARD TO THE DETAILED DISCUSSION WHICH WAS MADE IN THIS GROUP OF CASES WHICH HAVE BEEN ADJUDICATED BY THE TRIBUNAL IN ITAS NO. 1 166 TO 1168/CHD/2012. HE ALSO SUBMITTED THAT A SUPPLEMENT ARY CASH BOOK WAS ALREADY VERIFIED BY THE ASSESSING OFFICER WHERE IN A SUM OF RS. 5 LAKHS PAID TO SHRI VIJAYPAL SINGH WHICH HAS BEEN ADJUSTED LATER ON. 7 ON THE OTHER HAND, THE LD. D.R FOR THE REVENUE S TRONGLY SUPPORTED THE ORDER OF THE LD. CIT(A). 8 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFULL Y. SOME OF THE APPEALS IN THIS GROUP UNDER THE TITLE LATE SHRI PRITAM SINGH V DCIT AND SHRI GURJIT SINGH V DCIT IN ITAS NO. 1173 TO 1177/CHD/2012 AND OTHERS WERE ADJUDICATED EARLIER. THERE IT WAS SEEN BECAUSE OF SPECIAL AUDIT REPORT WHICH WAS AVAI LABLE VERY LATE AND PRACTICALLY ONLY ONE MONTHS TIME WAS AVAILABLE TO THE ASSESSEE TO REPLY TO VARIOUS QUERIES WHICH WAS NOT SUFFICIEN T AND THEREFORE MOST OF THE EVIDENCES AND EXPLANATION WERE FILED BE FORE THE LD. CIT(A). MOST OF THE ADDITIONAL EVIDENCE WAS ADMITT ED AND SENT FOR VERIFICATION TO THE ASSESSING OFFICER. IT WOULD BE PERTINENT TO REFER PARA 5.6 OF THE IMPUGNED ORDER WHEREIN ADDITIONAL E VIDENCE WAS ADMITTED. THE PARA READS AS UNDER: THEREFORE CONSIDERING THE FACTS AND CIRCUMSTANCES O F THE CASE, AND IN ALL FAIRNESS, I HOLD THAT THE REQUEST FOR ADMISSION OF ADDITIONAL EVIDENCE 5 FILED U/RULE 46A(1)(D) DESERVES TO BE ACCEDED TO, B EING NECESSARY FOR DISPOSAL OF THE APPEAL(S) ON MERITS. HOWEVER, THE N ATURE OF THE EVIDENCE IN RESPECT OF EACH OF THE ISSUES CONCERNED IS DISCU SSED RESPECTIVELY THEREUNDER. AS SUCH, THE ADDITIONAL EVIDENCE IS ALL OWED TO BE ADMITTED AT THIS JUNCTURE AND THE APPEAL OF THE ASSESSEE IS DIS POSED ON MERITS OF THE CASE. THE ABOVE CLEARLY SHOWS THAT THE LD. CIT(A) HAS ADM ITTED ADDITIONAL EVIDENCE. FURTHER CERTAIN ENTRIES WERE NOT INCORPO RATED BY THE SPECIAL AUDITOR PARTICULARLY IN RESPECT OF CASH TRA NSACTIONS WHICH WAS INCORPORATED LATER ON IN A SUPPLEMENTARY CASH B OOK WHICH WAS FILED BEFORE THE LD. CIT(A) AND WAS ALSO REMANDED T O THE FILE OF ASSESSING OFFICER FOR VERIFICATION. IN THIS REGARD IT WOULD BE PERTINENT TO SEE THE COMMENTS OF ASSESSING OFFICER WHICH HAVE GIVEN VIDE REPORT DATED 11.6.2012 (COPY OF WHICH IS AVAILABLE AT PG 125 TO 146 OF PAPER BOOK). REGARDING THIS TRANSACT ION OF RS. 10 LAKHS THE ASSESSING OFFICER HAS MADE FOLLOWING COMM ENTS: ASSESSEE HAS CONTENDED THAT HE HAS ENTERED INTO A VERBAL AGREEMENT WITH MR. VIJAY PAL SINGH FOR BUYING A PLOT IN LUDHI ANA, NEAR PARK PLAZA. ASSESSEE HAS PAID A SUM OF RS. 5,00,000/- ON 19.1.2 006 IN CASH AND RS. 5,00,000/- THROUGH CHEQUE NO. 567305 DATED 19.1 .2006 DRAWN OF ANDHRA BANK 429. THE CHEQUE OF RS. 5,00,000/- WAS NOT ENCASHED BY THE SELLER VIJAY PAL SINGH. HOWEVER, THIS DEAL WAS CANCELLED AND AMOUNT OF RS. 5,00,000/- ADVANCED TO VIJAY PAL SINGH WAS A DJUSTED IN HIS ACCOUNT WITH ASSESSEE. ASSESSEE FURTHER CONTENDED THAT PAYMENT OF RS. 5,00,000/- WAS REFLECTED IN THE SUPPLEMENTARY CASH FLOW STATEMENT. WITH REGARD TO PAYMENT OF RS. 5,00,000/- CLAIMED TO HAVE BEEN PAID OUT OF FUNDS AVAILABLE AS RECORDED IN SUPPLEMENTARY CASH BOOK, THE ENTRIES OF RS. 5,00,000/- IS DEBITED IN THE SUPPLEM ENTARY CASH BOOKS, THE DEBIT/CREDIT ENTRIES IN THIS CASH BOOK IS VERIF IED. HOWEVER, THE SUPPLEMENTARY CASH BOOK NOW FILED BY ASSESSEE IS IN CONTRAVENTION TO RULE 46A OF THE I.T. RULES, 1962 AND THE SAME MA Y NOT BE ADMITTED AS TANTAMOUNT TO ADDITIONAL EVIDENCE. THESE PAYMENT S WERE NOT RECORDED IN THE BOOKS PRODUCED BEFORE SPECIAL AUDIT OR AND THEREFORE THESE AMOUNTS HAVE BEEN RIGHTLY ADDED BACK AS UNEXP LAINED INCOMES OF THE ASSESSEE U/S 69 OF THE I.T. ACT, 196 1. THE HIGHLIGHTED PORTION OF ABOVE REPORT CLEARLY SHO W THAT ENTRY REGARDING CASH PAYMENT OF RS 5 LAKH RECORDED IN THE SUPPLEMENTARY CASH BOOK WAS VERIFIED BY THE ASSESSING OFFICER. A FTER THIS VERIFICATION THE ASSESSING OFFICER COULD HAVE MADE FURTHER ENQUIRY BUT IN THE ABSENCE OF SUCH ENQUIRY HE COULD NOT HAV E SIMPLY BRUSHED ASIDE THE SAME BY STATING THAT SUPPLEMENTARY CASH B OOK HAS BEEN 6 FILED IN CONTRAVENTION OF RULE 46A. IF THE CHEQUE OF RS. 5 LAKHS IS NOT ENCASHED BY THE PARTY AND RS. 5 LAKHS CASH PAID TO THAT PARTY AND ADJUSTED LATER ON AND THE SOURCE OF CASH IS REC ORDED IN THE SUPPLEMENTARY CASH BOOK THEN IT CANNOT BE SAID THAT THIS INVESTMENT HAS NOT BEEN EXPLAINED. THEREFORE WE SET ASIDE THE ORDER OF THE CIT(A) AND DELETE THIS ADDITION. 9 GROUND NO. 5 - AFTER HEARING BOTH THE PARTIES WE FIND THAT DURING SEARCH PAGES 114 TO 120 WERE FOUND AND SEIZE D WHICH WAS MARKED ANNEXURE A5. THESE DOCUMENTS CONTAIN TH E REPLY FILED BY THE ASSESSEE AGAINST THE COMPLAINT OF K.D. SHARMA. IT WAS NOTICED BY THE ASSESSING OFFICER THAT AT PAGE 1 15 IN PARA 6, THE ASSESSEE HAD STATED THAT COMPLAINANT ISSUED TWO CHEQUES FOR RS. 8 LAKHS AND RS. 25 LAKHS FOR THE SH ORT TIME DASTI LOAN TAKEN BY K.D. SHARMA. THEREFORE THE ASS ESSEE WAS REQUESTED TO STATE HOW LOAN OF RS. 33 LAKHS WAS GIV EN TO K.D. SHARMA INCLUDING THE EXPLANATION REGARDING SOURCES. IN RESPONSE IT WAS MAINLY STATED THAT IT WAS ONLY A RO UGH REPLY GIVEN AGAINST THE COMPLAINT FILED BY K.D. SHARMA.IT WAS ALSO STATED THAT NO SUCH LOAN WAS GIVEN WHICH WOULD BE C LEAR FROM THE STATEMENT OF AFFAIRS AND THAT IS WHY SAME WAS N OT REFLECTED IN THE STATEMENT OF AFFAIRS. THE ASSESSING OFFICER DID NOT ACCEPT THIS SUBMISSION AND ADDED A SUM OF RS. 35 LA KHS (ACTUAL FIGURE SHOULD BE RS. 33 LAKHS) TO THE INCOME OF THE ASSESSEE. 10 ON APPEAL FIRST OF ALL IT WAS SUBMITTED ADDITIO N SHOULD BE FOR RS. 33 LAKHS BECAUSE TWO CHEQUES INVOLVED A SUM OF RS. 8 LAKHS AND RS. 25 LAKHS. SECONDLY THE SUBMISSIONS M ADE BEFORE THE ASSESSING OFFICER WERE REITERATED THAT IT WAS A CASE OF DRAFT REPLY AND IT CANNOT BE RELIED FOR MAKING ADDITION A ND SOME CASE LAW WAS ALSO RELIED FOR THIS PURPOSE. 7 11 THE LD. CIT(A) AFTER EXAMINING THE SUBMISSIONS R EFERRED TO THE COMMENTS OF THE ASSESSING OFFICER AS WELL AS THE ASSESSEE AND FINALLY DECIDED THE ISSUE VIDE PARA 14 .2 WHICH IS AS UNDER: I HAVE GONE THROUGH THE ARGUMENTS OF THE ASSESSING OFFICER AND THE COUNTER COMMENTS OF THE ASSESSEE. IT IS ARGUED THAT SHRI KD SHARMA MADE NO ADVERSE STATEMENT TO THE POLICE OR T HE COURT. A STATEMENT EITHER WISE, BEFORE THE POLICE HAS NO LEG AL VALIDITY AS SUCH. HOWEVER, THE STATEMENT BEFORE THE COURT HAS TO BE GIVEN THE SERIOUSNESS IT DESERVES. IN THE CASED IN HAND, IT IS OBSERVED THAT THE STATEMENT OF SHRI KD SHARMA BEFORE THE COU RT HAS NOT BEEN FILED BEFORE THE INCOME-TAX AUTHORITIES. THIS ARTICULATION THEREFORE CANNOT BE TAKEN SERIOUSLY. THUS THE PRES UMPTION DRAWN BY THE ASSESSING OFFICER U/S 292C WOULD HAVE TO BE GIVEN CREDENCE. THE ADDITION MADE BY THE ASSESSING OFFIC ER IS THEREFORE CORRECT AND OUGHT TO BE SUSTAINED. THE ASSESSEE FA ILS IN THIS GROUND OF APPEAL. 12 BEFORE US. THE LD. COUNSEL FOR THE ASSESSEE SUBM ITTED THAT IN FACT K.D. SHARMA HAD MADE CERTAIN INVESTMEN TS ALONG WITH THE ASSESSEE AND ULTIMATELY HE HAD FILED A COM PLAINT THAT HE HAS LOANED /INVESTED AN AMOUNT OF RS. 14 CRORES WITH THE ASSESSEE AND HIS LATE FATHER SHRI PRITAM SINGH. IN THIS REGARD AFTER SEARCH ON THE PREMISES OF THE ASSESSEE WHEN C ERTAIN DOCUMENTS WERE FOUND WITH REFERENCE TO K.D. SHARMA, CASES WERE ALSO REOPENED IN CASE OF SHRI K.D.SHARMA AND U LTIMATELY K.D. SHARMA SURRENDERED RS. 12 CRORES BEFORE THE SE TTLEMENT COMMISSION. IN FACT WHEN THE COMPLAINT WAS FILED TH E ASSESSEE JUST MADE A REPLY WHICH IS ONLY A DRAFT REPLY (COPY OF WHICH IS AVAILABLE AT PAGE 32 TO 38 OF PAPER BOOK). NO EVID ENCE REGARDING GIVING OF LOAN AT DUBAI WAS FOUND AT THE TIME OF SEARCH. THEREFORE ADDITION COULD NOT BE MADE MEREL Y ON THE BASIS OF A DRAFT REPLY. 13 ON THE OTHER HAND, THE LD. D.R. FOR THE REVENUE SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND TH E LD. CIT(A). 14 AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND THAT ADDITION SHOULD HAVE BEEN MADE FOR RS. 33 LAKHS BEC AUSE TWO 8 CHEQUESS OF RS. 8 LAKHS AND RS. 25 LAKHS ARE MENTIO NED IN THE DRAFT REPLY. FURTHER ISSUE RELATING TO INVESTMEN TS ETC. MADE BY K.D. SHARMA HAS COME UP FOR CONSIDERATION OF THE TRIBUNAL IN THE CASES OF LATE SHRI PRITAM SINGH AND SHRI GUR JIT SINGH (SUPRA). IT WAS NOTED IN PARA 76 THAT K.D. SHARMA H AD FILED A FIR AGAINST THE ASSESSEE GROUP ALLEGING INVESTMENT TO THE EXTENT OF RS. 13.8 CRORES. IN FACT K.D. SHARMA HAS SURRENDERED A SUM OF RS. 12 CRORES WHEN HIS CASES WERE TAKEN UP BEFORE THE SETTLEMENT COMMISSION. THEREFORE AT BEST K.D. S HARMA HAD GIVEN SOME LOAN AND IN CRIMINAL PROCEEDINGS THE ASS ESSEE WAS TRYING TO AVOID CRIMINAL LIABILITY BY TAKING VARIOU S PLEAS. THEREFORE IT CANNOT BE TAKEN AS AN EVIDENCE FOR ASS ESSEE HAVING GIVEN A LOAN. IN THIS BACKGROUND WE FIND TH AT THERE IS NO MERIT FOR ADDITION AND ACCORDINGLY WE SET ASIDE THE ORDER OF THE CIT(A) AND DELETE THE ADDITION. 15 GROUND NO. 6 - AFTER HEARING BOTH THE PARTIES WE FIND THAT PAGE 109 TO 113 OF ANNEXURE A WERE FOUND AND SEIZED DURING SEARCH. PERUSAL OF PAGE 113 OF DOCUMENT SHOWED THA T THE ASSESSEE HAS RECEIVED A SUM OF RS. 15406372/- AND T OTAL PAYMENTS MADE WERE SHOWN AT RS. 15361019/-. THE PA YMENTS WERE MADE TO DISTT REVENUE OFFICER AND STAMP DUTY ETC. THE DOCUMENTS BASICALLY DEPICTED THE TRANSACTION WITH R EGARD TO PURCHASE OF LAND. SINCE THESE INVESTMENT WERE NOT REFLECTED IN THE FINAL STATEMENT OF AFFAIRS, THE ASSESSEE WAS AS KED TO FURNISH THE SOURCES OF THESE INVESTMENTS. IN RESPON SE IT WAS MAINLY STATED THAT DOCUMENTS PERTAIN TO M/S RADIANT EMPIRE PVT LTD. SINCE NO EVIDENCE WAS FILED TO SHOW THAT THE DOCUMENTS PERTAIN TO THE ASSESSEE, THE ASSESSING OFFICER INVO KED THE PRESUMPTION U/S 292C AND ADDED THE SUM TO THE INCOM E OF THE ASSESSEE. 9 16 ON APPEAL BEFORE THE LD. CIT(A), THE SUBMISSIONS MADE BEFORE THE ASSESSING OFFICER WERE REITERATED. CONFI RMATION FROM RADIANT EMPIRE PVT LTD WAS ALSO FILED. THE LD. CIT (A) DID NOT FIND FORCE IN THE SAME AND REJECTED THE CLAIM OF TH E ASSESSEE BY FOLLOWING OBSERVATIONS: BE THAT AS IT MAY, I FIND THAT THE CONFIRMATION, E NCLOSED WITH ASSESSEES WRITTEN SUBMISSION IS SIGNED BY RANJIT KAUR, DIRECT OR AND WIFE OF THE ASSESSEE, IS UNDATED, UNSTAMPED AND NOT EVEN ON THE LETTER HEAD OF THE COMPANY. IT IS NOT EVEN AN AFFIDAVIT. MOREOVER, THE DOCUMENTS ENCLOSED WITH THE CONFIRMATION ARE LOOSE SHEETS OF CERTAIN A CCOUNTS SIGNED BY THE DIRECTOR, WITHOUT ANY DATES NOR STAMPED. THE CORREC TNESS AND AUTHENTICITY OF THE OSTENSIBLE SUPPORTING DOCUMENTS IS THEREFORE DISPUTABLE. I AM THEREFORE PERSUADED TO HOLD THAT T HERE WAS NOTHING THEN NOR NOW TO HAVE PREVENTED THE ASSESSEE FRO FILING D OCUMENTS WHICH COULD HAVE STOOD THE TEST OF SCRUTINY. THUS, THE ADDITION MADE BY THE LD. ASSESSING OFFICER ON THIS ISSUE IN THE HANDS OF THE ASSESSEE STANDS CONFIRMED. ACCORDINGLY, THIS GROUND OF APPEAL GOES AGAINST THE ASSESSEE. 17 BEFORE US. THE LD. COUNSEL FOR THE ASSESSEE SUBM ITTED THAT THESE PAPERS WERE FOUND FROM THE PREMISES OF T HE ASSESSEE. IN FACT SMT. RANJIT KAUR WHO IS THE WIFE OF THE ASSESSEE, IS THE DIRECTOR OF RADIANT EMPIRE PVT LT D AND THAT IS WHY THE PAPERS WERE KEPT BY HER. THE PAPERS DEPICT ED VARIOUS ADVANCES MADE TO THE EXTENT OF RS. 15361019/- AND C LEARLY PERTAINED TO RADIANT EMPIRE PVT LTD. IN THIS REGAR D CONFIRMATION OF RADIANT EMPIRE PVT LTD WAS ALSO FUR NISHED BEFORE THE ASSESSING OFFICER (COPY OF WHICH IS AVAI LABLE FROM PAGES 66 TO 73 OF THE PAPER BOOK). DESPITE THIS FA CT ADDITIONS HAVE BEEN MADE IN THE HANDS OF THE ASSESSEE. WHEN THE PAPERS DO NOT BELONG TO THE ASSESSEE, NO ADDITION S HOULD HAVE BEEN MADE IN THE HANDS OF THE ASSESSEE. 18 ON THE OTHER HAND, THE LD. D.R. FOR THE REVENUE SUPPORTED THE ORDER OF THE LD. CIT(A). 19 AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND THAT THE CONFIRMATION WAS FILED BEFORE THE ASSESSING OFFICER STATING THAT PAGES 109 TO 113 OF ANNEXURE A5 WERE FOUND FROM THE PREMISES OF SMT. RANJIT KAUR WHO IS THE DIRECTOR OF RADIANT EMPIRE PVT 10 LTD. IN FACT PAGES HAVE BEEN AUTHENTICATED. IN OU R OPINION, THE ASSESSING OFFICER SHOULD HAVE MADE ENQUIRIES FR OM RADIANT EMPIRE PVT LTD WHETHER THEY HAVE SHOWN THESE TRANSA CTION IN THEIR BOOKS AND WHETHER THE SAME HAVE NO RELATION W ITH THE ASSESSEE. THIS HAS NOT BEEN DONE. THEREFORE WE SET ASIDE THE ORDER OF THE CIT(A) AND REMIT THIS ISSUE BACK TO TH E FILE OF ASSESSING OFFICER FOR REEXAMINATION OF THE ISSUE AF TER MAKING ENQUIRIES FROM RADIANT EMPIRE PVT LTD AND THEN DECI DE THE ISSUE IN ACCORDANCE WITH LAW. 20 GROUND NO. 7 - AFTER HEARING BOTH THE PARTIES WE FIND THAT PAGE NO. 65 OF ANN A1 WAS SIZED FROM THE PREMISES OF THE ASSESSEE. THE DOCUMENT SHOWED CERTAIN DETAILS WHIC H HAVE BEEN NOTED BY THE ASSESSING OFFICER AS UNDER: THE ABOVE DOCUMENT SHOWS THE FOLLOWING DETAILS A/C 3060-20D-04-03.06 216- TOTAL GURJIT 50% 28+60+45 = 133 NIMRAT 25% 14+27 = 41 DIMPY 25% 14+27 =41 = 216 SD/- (VIJAY PAL SINGH) A/C UCO BANK, NO. 3, SEC.22 362 TOTAL DIMPY 37 % -37 GURJIT 37 % -37% 1,00,00,000 PAID NIMRAT 25 % -25 SHRI GURJIT SINGH 2006-07 THE DOCUMENT WAS SHOWN TO THE ASSESSEE AND CERTAIN QUESTIONS WERE RAISED AND RELEVANT QUESTIONS AND A NSWERS HAVE BEEN REPRODUCED BY THE ASSESSING OFFICER AS UN DER: Q 21 I AM SHOWING YOU PAGE NO. 65 OF ANN A! OF T HE DOCUMENTS SEIZED FROM YOUR RESIDENCE. ARE THESE WRITTEN IN Y OUR HAND? PLEASE EXPLAIN THE CONTENTS? ANSWER THE FIRST SET OF CALCULATIONS REFERS TO H NO. 3060, SEC 20D, CHANDIGARH. IT WAS WRITTEN BY VIJAY PAL SINGH AND IT ALSO CONTAINS MY SIGNATURES AND SIGNATURE OF NIMRANDEEP SINGH. THIS DOCUMENT WAS WRITTEN ON 4.3.2006. ALL OF US BOUGHT THIS HOUSE FOR 2.16 CRORES. OUT OF THIS MY SHARE WAS 50% AND I PA ID RS. 1.33 CRORES. I WILL CHECK THE SOURCE OF THIS PAYMENT A ND LET YOU KNOW. THE NEXT SET OF CALCULATIONS REFERS TO PROPERTY NO . 3 AT SEC 22, CHANDIGARH. ALL THREE OF US BOUGHT THIS PROPER TY FOR RS. 3.62 CRORES. OUT OF THIS MY SHRE WAS 37.5%. I WILL CHE CK TH SORUCE OF SHARE AND LET YOU KNOW. 11 FURTHER STATEMENT OF VIJAY PAL SINGH S/O LATE SARD AR AMRIT SINGH R/O 3478, S 38-D, CHANDIGARH WAS RECORDED ON 7.7.2008 AT AAYKAR BHAWAN, SEC 2, PANCHKULA ON OATH U/S 131 OF THE ACT. THE ABOVE DOCUMENT WAS SHOWN TO HIM. THE RELEVANT EXTR ACT HIS STATEMENTS IS REPRODUCED BELOW. QUESTION 3 I AM SHOWING YOU PAGE NO. 65 OF ANN A1 OF DOCUMENTS SEIZED FROM THE RESIDENCE OF GURJIT SINGH DURING THE COURSE OF SEARCH AT HIS RESIDENCE ON 11.6.2008. PL EXPLAIN THE SAME? ANSWER I HAVE WRITTEN THIS DOCUMENT. IT SHOWS TH E AMOUNTS PAID BY ME, GURJIT SINGH AND NIMRATDEEP SINGH FOR PURCHA E OF TWO PROPERTIES AS BELOW: (I) 3060, SEC 20D, CHANDIGARH BOUGHT FOR RS. 2.16 C RORES. I PAID RS. 41.5 LAKHS OUT OF THIS. (II) SHOWROOM NO. 3, SEC 22, CHANDIGARH BOUGHT FOR RS. 3,62 CRORES, OUT OF WHICH I HAVE PAID RS. 37.5 LAKHS. T HESE AMOUNTS WERE PAID DURING FY 2006-07. QUESTION 4 PL STATE THE SOURCES FOR THEE PAYMENTS ? ANSWER I WISH TO DECLARE THESE SUMS (RS. 41.5 LAK HS + RS. 37.5 LAKHS = 79 LAKHS) AS UNACCOUNTED INCOME FOR THE ASS ESSMENT YEAR 2006-07. THE DECLARATIONS SUBJECT TO NO PENALTY AN D PROSECUTION TO BE IMPOSED UPON ME. I WILL REVISE THE RETURN OF INCOME FOR THE YEAR AND SUBMIT IT SHORTLY. ON FURTHER ENQUIRY IT WAS EXPLAINED BY THE ASSESSEE THAT THE PAPERS RELATED TO PROPERTY NO. 3060, SEC 20D, CHAND IGARH AND THE LEGAL OWNER OF THE PROPERTY WAS LATE SHRI PRITA M SINGH WHO HAD 50% SHARE IN THE PROPERTY. THE ASSESSING OFFIC ER NOTED THAT THE STATEMENT RECORDED U/S 131 SHOWED THAT PAY MENT OF RS. 133 LAKHS WAS MADE BY THE ASSESSEE. FURTHER PER USAL OF THE STATEMENT OF AFFAIRS OF SHRI PRITAM SINGH SHOWE D THAT AN AMOUNT OF RS. 139 LAKHS WAS REFLECTED. FURTHER THERE WAS ANOTHER PROPERTY NO. SCF 3, SEC 22D, CHANDIGARH (UCO BANK BUILDING). IT WAS STATED THAT PROPERTY WAS IN ADVERSE POSSESSION OF UCO BANK AND OTHER PER SONS AND REGISTRATION DEED WAS NOT EXECUTED. THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAD ADMITTED IN THE STATEME NT RECORDED U/S 131 ON 16.6.2008 THAT PAYMENT OF RS. 1 35.75 LAKHS WAS MADE. THAT STATEMENT WAS NOT RETRACTED. HOWEVER, FINAL STATEMENT SHOWED THE INVESTMENT OF RS. 126,50 ,000. 12 THEREFORE BALANCE OF RS. 925,000 FOR WHICH NO SOURC ES WAS EXPLAINED, WAS ADDED TO THE INCOME OF THE ASSESSEE. 21 ON APPEAL SOME ISSUES WERE REFERRED BACK TO THE FILE OF ASSESSING OFFICER IN THE ASSESSMENT PROCEEDINGS. I N THE REMAND PROCEEDINGS IT WAS CONTENDED THAT BALANCE P AYMENT OF RS. 925,000/- WAS TO BE MADE AT THE TIME OF REGISTR ATION OF SALE DEED. IN THE MEANTIME THE SELLER HAD BACKED OUT FR OM THIS DEED AND NOW THE MATTER IS PENDING BEFORE THE DISTR ICT COURT, CHANDIGARH FOR SPECIFIC PERFORMANCE. 22 THE LD. CIT(A) AFTER EXAMINING THE SUBMISSIONS D ECIDED THE ISSUE VIDE PARA 11.2 WHICH IS AS UNDER: I HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS A S WELL AS THE IMPUGNED ASSESSMENT ORDER. NO DOUBT WHILE RECORDING THE STATEMENT U/S 131, THE ASSESSEE HAD STATED THAT HE WOULD INTIMATE THE SOURCE OF SHARE, WHILE ADMITTING THE % OF SHARE IN THE PROPERTY / TR ANSACTION. HOWEVER THE ASSESSEE HAS NOT DONE SO EVEN AT THE REMAND STAGE N OR BEFORE THE APPELLATE PROCEEDINGS WHEREIN THE CONTENTION IS THA T NO SUCH AMOUNT HAD BEEN PAID AS THE SELLER HAD BACKED OUT LEADING TO A SSESSEE FILING A CASE FOR SPECIFIC PERFORMANCE OF AGREEMENT IN TH COURT O F CIVIL JUDGE, SENIOR DIVISION, UT CHANDIGARH. HOWEVER ON GOING THROUGH T HE COPY OF THE SUITABLE, IT IS SEEN THAT THE SAME IS UNSIGNED AND THERE IS NO MENTION OF THE CIVIL SUIT NO, WHICH IS OSTENSIBLY DATED 13.1.2 009. THUS THE SAME CANNOT BE SAID TO BE AUTHENTIC. FURTHER ON ONE HAND THE ASSESSEE STATES THAT ACTUAL AMOUNT PAID WAS RS. 166.50 LAKHS AND BA LANCE OF RS. 9.25 LAKH WAS NOT PAID, WHILE U/S 131 THE AMOUNT IS RS. 135.75 LAKHS AND IN ITS EARLIER SUBMISSION DATED 9.4.2012 WHICH WAS REM ANDED, RS. 126.5 LAKHS IS STATED TO HAVE BEEN PAID. THESE ARE CONTRA DICTIONS APPARENT FROM RECORDS AND BESIDES NO CREDENCE CAN BE GIVEN T O THE COPY OF THE SUITABLE FILED IN SUPPORT OF ITS CLAIM OF NOM-FULFI LLING OF THE AGREEMENT. THUS, ON THE FACTS OF THE CASE, I CONFIRM THE ACTIO N OF THE LD. AO. ASSESSEE FAILS IN THIS GROUND OF APPEAL. 23 BEFORE US. THE LD. COUNSEL FOR THE ASSESSEE REFE RRED TO THE DOCUMENT SEIZED DURING SEARCH WHICH IS PLACED A T PAGE 74 OF THE PAPER BOOK. HE POINTED OUT THAT DOCUMENT MENTIONED THAT TOTAL SUM OF RS. 1,00,00,000/- WAS P AID AND AMOUNT PAID BY GURJIT SINGH WAS RS. 37.5 LAKHS. IN FACT TOTAL PROPERTY BEARING NO. SCF 3, SEC 22D, CHANDIGA RH WAS PURCHASED FOR TOTAL CONSIDERATION OF RS. 3.62 C RORES AND THE SHARE OF THE ASSESSEE WAS 37.5% WHICH IS CL EARLY MENTIONED IN THE DOCUMENT ITSELF. THE ASSESSEE HAD PAID A SUM OF RS. 1265,0000/- REFLECTED IN THE STATEMENT OF AF FAIRS AND BALANCE OF RS. 925,000/- WAS STILL TO BE PAID AT THE 13 TIME OF REGISTRATION OF SALE DEED. HE SUBMITTED TH AT ASSESSEE HAS ALREADY FILED FOR SPECIFIC PERFORMANCE SUIT (CO PY OF WHICH IS AVAILABLE AT PAGE 75 TO 100 OF PAPER BOOK). FURTHER THE LD. CIT(A) NEVER QUESTIONED THIS FACT DURING VARIOUS HE ARINGS. 24 ON THE OTHER HAND, THE LD. D.R. FOR THE REVENUE SUPPORTED THE ORDER OF THE LD. CIT(A). 25 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFUL LY AND FIND FORCE IN THE SUBMISSIONS OF THE LD. COUNSEL FO R THE ASSESSEE. THE PERUSAL OF SUITE FILED FOR SPECIFIC PERFORMANCE SHOWS THAT AT PARA 5, THE ASSESSEE HAS CLAIMED PAYM ENT ONLY AT RS. 126.5 LAKHS WHICH TALLIES WITH THE PAYMENT W HICH HAS BEEN EXPLAINED BEFORE THE ASSESSING OFFICER. WHEN T HE REGISTRATION HAS NOT BEEN DONE FOR THE PROPERTY IT IS OBVIOUS THAT SOME AMOUNT WAS TO BE PAID AT THE TIME OF REGI STRATION AND ASSESSEE HAS ALREADY FILED A SUITE FOR SPECIFIC PER FORMANCE. THEREFORE THIS PLEA SHOULD HAVE BEEN ACCEPTED. IN THESE CIRCUMSTANCES WE SET ASIDE THE ORDER OF THE CIT(A) AND DELETE THE ADDITION. 26 GROUNDS NO. 8 & 9 - AFTER HEARING BOTH THE PARTI ES WE FIND THAT DURING ASSESSMENT PROCEEDINGS THE ASSESSING OF FICER NOTICED THAT THERE WERE VARIOUS CREDITS FOR WHICH C ONFIRMATION WERE NOT FILED AS DEMANDED BY SPECIAL AUDITOR AND T HEREFORE SHOW CAUSE NOTICE WAS ISSUED THAT WHY THESE AMOUNTS SHOULD NOT BE ADDED TO THE INCOME OF THE ASSESSEE. THE DE TAILS OF THE VARIOUS CREDITS IS AS UNDER: GURJIT SINGH 2005-06 CREDITS DEBITS BALANCE RADIANT EMPIRE LTD. 3200000 - 3200000 RN HIGHWAYS PVT. LTD. 2498005 5200000 - GURIKBAL S. BHULLAR 1000000 1000000 SH. KD 2400000 800000 1600000 14 SHARMA MOHINDER PAL SINGH 12621 0 12621 APEX EXPORT AMRIT KAUR APEX EXPORTS BARBIL 10000 10000 BIKAS DEV 5000000 0 5000000 GURIQBAL SINGH 1500000 0 1500000 JOGINDER SINGH PATIALA 1000000 0 1000000 MATCHLESS ASSOCIATES 425000 0 425000 PRITAM SINGH OBEROI 3000000 458777.25 2541222 R N HIGHWAYS PVT LTD 500000 500000 0 SURYA PVC PRODUCT 3600000 0 3600000 HITKARI TRADERS 4200000 4200000 0 PORT TRUST 200000 200000 0 AGGARWAL STONE POLISHING IND 441902 0 441902 AIRPARK INTERNATIONAL TRAVEL AGENT 225000 225000 0 M/S APEX INTERNATIONAL CONSTRUCTION (PROP. GURJIT SINGH RN HIGHWAYS LTD 268530 0 268530 M/S PRITAM SINGH & SONS (PROP GURJIT SINGH) PRITAM SINGH 208800 525610 TOTAL 29689858 20589275 SINCE NO DOCUMENTARY EVIDENCE TO PROVE THE GENUINEN ESS OF ABOVE CREDITS WAS FURNISHED, EVEN BEFORE THE ASSESS ING OFFICER A SUM OF RS. 20589275/- WAS ADDED TO THE INCOME OF THE ASSESSEE U/S 68 OF THE ACT. 27 ON APPEAL BEFORE THE LD. CIT(A) VARIOUS DOCUMENT S AND EXPLANATIONS WERE FILED WHICH WERE SENT FOR REMAND REPORT. AFTER CONSIDERING THE SAME THE LD. CIT(A) DELETED V ARIOUS ADDITIONS AND CONFIRMED THE FOLLOWING ADDITIONS : S/SHRI K.D. SHARMA RS. 8 LAKHS MOHINDERPAL SINGH RS. 12621/- 15 AGGARWAL STONE POLISHING INDUSTRIES RS. 441902/- THE REVENUE HAS NOT FILED ANY APPEAL AGAINST DELETI ON OF ADDITION IN RESPECT OF OTHER ITEMS AND THEREFORE WE ARE NOT GIVING DETAILS OF THOSE ADDITIONS. 28 AS FAR AS THE ADDITION ON ACCOUNT OF K.D. SHARMA AND MOHINDERPAL SINGH ARE CONCERNED, THE LD. CIT(A) CON FIRMED THE SAME BY FOLLOWING PARAS: IN VIEW OF THE FINDINGS OF THE ASSESSING OFFICER A T REMAND STAGE, RS. 8 LAKHS BEING A DOUBLE ADDITION, ,THE SAME IS D ELETED. AS REGARDS THE BALANCE RS. 8 LAKHS, THE EXPLANATION OF THE ASSESSEE IS TOO FAR FETCHED. I DO NOT UNDERSTAND THE PRUDEN CY OF SUCH INTER WINED TRANSACTION WHILED THERE APPEARS TO BE NO DOU BT ABOUT THE IDENTITY OF SHRI K.D. SHARMA THE GENUINENESS AND CR EDITWORTHINESS OF THE TRANSACTION IS IN DOUBT. ONUS WAS ON THE AS SESSEE TO PROVE THE SAME. HENCE THE ADDITION IS SST TO THE EXTENT O F RS. 8 LAKHS. HAVING SEEN THE FACTS AND CIRCUMSTANCES , I UPHOL D THE STAND OF THE ASSESSING OFFICER AS THE DOCUMENTS FIL ED IS A COPY OF THE LEDGER ACCOUNT WITH A PHOTO COPY OF THE DD. WHILE THE IDENTITY, THE GENUINENESS AND CREDIT WORT HINESS OF MOHINDER PAL SINGH, REMAIN UNPROVED THE ASSESSEE HA S ALSO NOT COME UP WITH ANY COGENT CLARIFICATIONS. THE AD DITION IS CONFIRMED. 29 BEFORE US. IN RESPECT OF SHRI K.D. SHARMA THE AR GUMENTS MADE IN RESPECT OF GROUND NO. 5 WERE REITERATED. IT WAS FURTHER POINTED OUT THAT TWO CHEQUES WERE RECEIVED FROM K.D . SHARMA OUT OF WHICH ONE CHEQUE WAS ALREADY ADDED ALONG WIT H ADDITION OF RS. 35 LAKHS (ACTUAL FIGURE WAS RS. 33 LAKHS WHI CH HAS BEEN AGITATED THROUGH GROUND NO. 3) AND WHICH WAS DELETE D BY THE LD. CIT(A) BEING DOUBLE ADDITION. IN RESPECT OF RE MAINING RS. 8 LAKHS CONTENTION RAISED IN RESPECT OF GROUND NO. 5 WERE REITERATED. IN RESPECT OF ADDITION OF RS. 12621/- IT WAS MAINLY SUBMITTED THAT THIS AMOUNT WAS RECEIVED AS ADVANCE AND ASSESSING OFFICER HAD MADE CERTAIN ENQUIRIES AND TH E ASSESSEE HAS CONFIRMED THIS AMOUNT BEFORE THE ASSESSING OFF ICER AND COPY OF THESE DOCUMENTS IS AVAILABLE AT PAGE 101 TO 105 OF PAPER BOOK. 16 30 ON THE OTHER HAND, THE LD. D.R. FOR THE REVENU E STRONGLY SUPPORTED THE ORDER OF LD. CIT(A). 31 AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND THAT AS FAR AS ADDITION OF RS. 8 LAKHS ON ACCOUNT OF SHRI K.D. SHARMA IS CONCERNED, THE SAME PRINCIPLE IS APPLICABLE WHICH W E HAVE ADJUDICATED IN RESPECT OF GROUND NO. 5 BECAUSE K.D. SHARMA HAS FILED FIR AGAINST THE ASSESSEE CLAIMING THAT A SUM OF RS. 13.85 CRORES WAS ADVANCED TO THE ASSESSEE AND HIS F AMILY AND HAS ALSO SURRENDERED A SUM OF RS. 12 CRORES BEFORE THE SETTLEMENT COMMISSION AND THEREFORE THIS ADDITION I S BEING DELETED ON THE SAME PRINCIPLE AS DECIDED BY US WHIL E DECIDING GROUND NO. 5. AS FAR AS ADDITION OF RS. 12621/- IS CONCERNED, FROM THE DOCUMENTS FILED IN PAPER BOOK IT BECOMES C LEAR THAT THE ASSESSING OFFICER HAS MADE ENQUIRIES U/S 133(6) FROM THIS PERSON AND IN RESPONSE HE HAS FILED CONFIRMATION AS WELL AS COPY OF ACCOUNT AND AGREEMENT SHOWING THAT HE HAS P URCHASED CERTAIN PROPERTIES JOINTLY. MOHINDERPAL SINGH HAS G IVEN HIS PAN ALSO THEREFORE FULL EXPLANATION WAS AVAILABLE WITH THE ASSESSING OFFICER AND IN CASE HE WAS NOT SATISFIED THEN THE A SSESSING OFFICER SHOULD HAVE MADE FURTHER ENQUIRIES AND ADDI TION COULD NOT BE MADE BY BRUSHING ASIDE THE EVIDENCE FILED BE FORE HIM WITHOUT CONDUCTING FURTHER ENQUIRIES FOR ADDITION O F RS. 812621/- IN GROUND NO. 8 IS DELETED. 32 IN RESPECT OF GROUND NO. 9 IT WAS SUBMITTED BY T HE LD. COUNSEL FOR THE ASSESSEE THAT CERTAIN BILLS WERE FO UND IN THE NAME OF AGGARWAL STONE POLISHING INDUSTRIES. IN FAC T THESE PURCHASES WERE MADE THROUGH CASH MEMOS BY PAYING CA SH BUT THEY WERE WRONGLY ENTERED BY THE SPECIAL AUDITOR AS CREDIT BILLS. THESE ENTRIES WERE LATER ON REFLECTED IN THE SUPPLE MENTARY 17 CASH BOOK WHICH WAS VERIFIED BY THE ASSESSING OFFIC ER, THEREFORE THESE ADDITIONS COULD NOT HAVE BEEN MADE. 33 ON THE OTHER HAND, THE LD. D.R FOR THE REVENUE STRONGLY SUPPORTED THE ORDER OF THE LD. CIT(A). 34 AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND THAT DEBIT ENTRY FOR PAYMENT OF CASH TO AGGARWAL STONE POLISHI NG INDUSTRIES WAS INCORPORATED AND THE SUPPLEMENTARY C ASH BOOK AND HAS BEEN VERIFIED BY THE ASSESSING OFFICER. REL EVANT PORTION OF THE REMAND REPORT IS AT PAGE 144 OF THE PAPER BOOK AND READS AS UNDER: WITH REGARD TO PAYMENT OFRS. 441902/- CLAIMED TO H AVE BEEN PAID OUT OF FUNDS AVAILABLE AS RECORDED IN SUPPLEMENTARY CASH BOOK, THE ENTRIES OF RS. 441902/- IS DEBITED IN THE SUPPLEMEN TARY CASH BOOK, THE DEBIT / CREDIT ENTRIES IN THIS CASH BOOK IS VER IFIED. HOWEVER, THE SUPPLEMENTARY CASH BOOK NOW FILED BY ASSESSEE I S IN CONTRAVENTION TO RULE 46A OF IT RULES, 1962 AND THE SAME MAY NOT BE ADMITTED AS TANTAMOUNT TO ADDITIONAL EVIDENCE. THESE PAYMENTS WERE NOT RECORDED IN THE BOOKS PRODUCED BE FORE SPECIAL AUDITOR AND THEREFORE THESE AMOUNTS HAVE BEEN RIGHT LY ADDED BACK AS UNEXPLAINED INCOMES OF THE ASSESSEE U/S 69 OF IT ACT. THE ABOVE CLEARLY SHOWS THAT THE AMOUNT HAS BEEN SH OWN AS CASH PAYMENT WHICH HAS BEEN VERIFIED BY THE ASSESSI NG OFFICER. ONCE THE ADDITIONAL EVIDENCE WAS ADMITTED BY THE LD. CIT(A) AND WAS VERIFIED BYTHE ASSESSING OFFICER THE N THE SAME CANNOT BE REJECTED AFTER VERIFICATION, THEREFORE WE FIND NO MERIT IN THIS ADDITION AND DELETE THE SAME. 35 GROUND NO. 10 - AFTER HEARING BOTH THE PARTIES W E FIND THAT PAGES 224 & 72 - 88 OF A3 AND PAGES 99, 1 01 & 102 OF A6 SEIZED FROM H NO. 748, PH. 3B1, MOHALI. ACCORDI NG TO THE ASSESSING OFFICER THESE DOCUMENTS CLEARLY INDICATE THAT PAYMENT OF CERTAIN SUMS AND DETAILS HAVE BEEN EXTRA CTED BY HIM AS UNDER: . SL. NO. NAME AMOUNT 1 SUPREME COURT ADVOCATE 8,00,000 2 SIDDESHWAR MINERALS 10,00,000 3 SERAZZUDIN & CO. 54,87,000 18 4 DR. S. PRADHAN 42,50,000 5 SHRI HARI INDUSTRIES PVT. LTD. 26,00,000 6 JOGINDER SINGH 10,00,000 7 MAHAVIR PACKERS 20,00,000 TOTAL 1,71,37,000 OUT OF ABOVE ACCORDING TO SPECIAL AUDITOR FOLLOWIN G PAYMENTS WERE NOT ENTERED IN THE BOOKS OF ACCOUNT. SL.NO NAME AMOUNT 1 SUPREME COURT ADVOCATE 8,00,000 2 DR. S. PRADHAN 42,50,000 3 MAHAVIR PACKERS 20,00,000 TOTAL 70,50,000 IT WAS ALSO NOTICED THAT AS PER THESE DOCUMENTS INV ESTMENT OF RS. 26 LAKHS WAS MADE IN M/S SHREE HARI INDUSRI ES LTD. SINCE THE ASSESSEE DID NOT FILE ANY DOCUMENTARY EVI DENCE AN AMOUNT OF RS. 96,50,000/- (RS. 70,50,000 + RS. 26 L AKH) WAS ADDED TO THE INCOME OF THE ASSESSEE. 36 VARIOUS DOCUMENTS AND DETAILS WERE FILED BEFORET HE LD. CIT(A) AND IN TURN THE LD. CIT(A) SENT THE SAME FOR REMAND VERIFICATION. AFTER EXAMINING THE REMAND REPORT ET C. THE LD. CIT(A) DELETED VARIOUS ADDITIONS AND CONFIRMED ONLY ADDITION OF RS. 8 LAKH PAID TO SUPREME COURT, ADVOCATE AND RS. 3,50,000/- IN CASH PAID TO SHRI S. PRADHAN. SINCE THE REVENUE HAS NOT FILED ANY APPEAL AGAINST THE DELETION, THEREFORE WE ARE NOT DISCUSSING THEM IN DETAIL. 37 AS FAR AS ADDITION OF RS. 8 LAKHS PAID TO SUPRE ME COURT, ADVOCATE, THE LD. COUNSEL FOR THE ASSESSEE CONTENDE D THAT THIS AMOUNT WAS PAID TO ADVOCATE IN RELATION TO MATERS O F APEX EXPORTS, GURJIT SINGH, SURINDERPAL SINGH, K.D. SHAR MA ETC. THIS AMOUNT WAS ALSO INCORPORATED IN SUPPLEMENTARY CASH BOOK 19 WHICH WAS VERIFIED DURING REMAND PROCEEDINGS BY THE ASSESSING OFFICER AND RELEVANT PORTION OF THE REMAN D REPORT IS PLACED AT PAGE 130. SIMILARLY PAYMENTS TO DR. S. PRADHAN TOTALLED TO RS. 42,50,000/- WAS PAID OUT OF WHICH A SUM OF RS. 39 LAKHS WAS PAID BY CHEQUES AND WAS DELETED BY THE LD. CIT(A). BALANCE OF RS. 3,50,000/- WAS PAID IN CASH AND INCORPORATED IN THE SUPPLEMENTARY CASH BOOK WHICH W AS VERIFIED BY THE ASSESSING OFFICER AND THE RELEVANT PORTION IS AT PAGE 131 OF PAPER BOOK. HE SUBMITTED ONCE HAVING A DMITTED THE ADDITIONAL EVIDENCE SAME CANNOT BE REJECTED LAT ER ON AFTER VERIFICATION. 38 ON THE OTHER HAND, THE LD. D.R FOR THE REVENUE STRONGLY SUPPORTED THE ORDER OF THE LD. CIT(A). 39 AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND FORCE IN THE SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE . PAYMENT OF RS. 8 LAKHS WAS VERIFIED BY THE ASSESSING OFFICE R AND THE RELEVANT PORTION AT PAGE 130 READS AS UNDER: WITH REGARD TO PAYMENT OF RS, 8,00,000/- CLAIMED T O HAVE BEEN PAID OUT OF FUNDS AVAILABLE AS RECORDED IN SUPPLEMENTARY CAS H BOOK, THE ENTRIES OF RS. 8,00,000/- IS DEBITED IN THE SUPPLEMENTARY C ASH BOOKS, THE DEBIT/CREDIT ENTRIES IN THIS CASH BOOK IS VERIFIED. HOWEVER, THE SUPPLEMENTARY CASH BOOK NOW FILED BY ASSESSEE IS IN CONTRAVENTION TO RULE 46A OF THE I.T. RULES, 1962 AND THE SAME MAY N OT BE ADMITTED AS TANTAMOUNT TO ADDITIONAL EVIDENCE. THESE PAYMENTS W ERE NOT RECORDED IN THE BOOKS PRODUCED BEFORE SPECIAL AUDITOR AND THERE FORE THESE AMOUNTS HAVE BEEN RIGHTLY ADDED BACK AS UNEXPLAINED INCOMES OF THE ASSESSEE U/S 69 OF THE I.T. ACT, 1961. SIMILARLY ISSUE OF RS. 3,50,000/- WAS VERIFIED BY T HE ASSESSING OFFICER AND THE RELEVANT PORTION OF REMAND REPORT A T PAGE 131 READS AS UNDER: WITH REGARD TO PAYMENT OF RS. 3,50,000/- CLAIMED T O HAVE BEEN PAID OUT OF FUNDS AVAILABLE AS RECORDED IN SUPPLEMENTARY CAS H BOOK, THE ENTRIES OF RS . 3,50,000/- IS DEBITED IN THE SUPPLEMENTARY CASH BOOKS, THE DEBIT / CREDIT ENTRIES IN THIS CASH BOOK IS VERIFIED. HOWEV ER, THE SUPPLEMENTARY CASH BOOK NOW FILED BY ASSESSEE IS IN CONTRAVENTION TO RULE 46 A OF THE I.T. RULES, 1962 AND THE SAME MAY NOT BE ADMITTED A S TANTAMOUNT TO ADDITIONAL EVIDENCE. THESE PAYMENTS WERE NOT RECORD ED IN THE BOOKS PRODUCED BEFORE SPECIAL AUDITOR AND THEREFORE THESE AMOUNTS HAVE BEEN RIGHTLY ADDED BACK AS UNEXPLAINED INCOMES OF THE AS SESSEE U/S 69 OF THE I.T. ACT, 1961. 20 ADDITIONAL EVIDENCE WAS INITIALLY ADMITTED BY THE L D. CIT(A) AND WAS SENT FOR VERIFICATION. THE ASSESSING OFFICER H AS VERIFIED THESE ENTRIES. AFTER VERIFICATION THIS EVIDENCE CAN NOT BE REJECTED, THEREFORE ACCORDINGLY WE SET ASIDE THE OR DER OF THE CIT(A) AND DELETE THIS ADDITION. 40 GROUND NO. 11 AFTER HEARING BOTH THE PARTIES W E FIND THAT PAGE 121 AND 122 OF ANNEXURE A5 WERE LOOSE PAP ERS SHOWING VARIOUS RECEIPTS AND PAYMENTS. TOTAL OF TH ESE RECEIPTS WAS RS. 14245125/-. ON ENQUIRY IT WAS STA TED THAT THE ASSESSEE WAS ONE OF THE DIRECTORS OF R.N. HIGHWAY P VT LTD. AND THE PAPERS DID NOT RELATE TO THE ASSESSEE IN TH E INDEPENDENT CAPACITY AND RELATE TO THAT ORGANIZATIO N. SINCE NO DOCUMENTARY EVIDENCE WAS FILED TO EXPLAIN THESE ENT RIES A SUM OF RS. 14364022/- WAS ADDED TO THE INCOME OF THE AS SESSEE. 41 ON APPEAL VARIOUS DOCUMENTS AND EXPLANATIONS WER E FILED WHICH WAS SENT FOR VERIFICATION. AFTER CONSIDERING REMAND REPORT AND THE EXPLANATIONS THE LD. CIT(A) DELETED THE ADDITIO N OF RS. 78 LAKHS ON ACCOUNT OF R.N. HIGHWAYS PVT LTD. AGAINST THIS DELETION THE REVENUE HAS NOT FILED ANY APPEAL THEREFORE WE ARE NOT GOING INTO THE DETAILS. THE BALANCE AMOUNT OF RS. 6565022/- WAS S TATED TO HAVE BEEN PAID OUT OF SUPPLEMENTARY CASH BOOK. THIS WAS CONFIRMED BY THE LD. CIT(A) BY OBSERVING THAT SUPPLEMENTARY CASH BOOK IS AN AFTER THOUGHT. 42 BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE SUBM ITTED THAT NOT ONLY CERTAIN RECEIPTS HAVE BEEN RECEIVED BUT SOME P AYMENTS HAVE ALSO BEEN MADE. SINCE PAPERS DID NOT BELONG TO THE ASSESSEE, AT BEST ONLY PEAK CREDIT COULD HAVE BEEN ADDED. 43 ON THE OTHER HAND, THE LD. D.R FOR THE REVENUE STRONGLY SUPPORTED THE ORDER OF ASSESSING OFFICER. 21 44 AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND THAT THE DOCUMENTS PERTAINED TO R.N. HIGHWAYS PVT LTD. AND T HE LD. CIT(A) HAS ALREADY ACCEPTED THE ENTRIES UPTO RS. 78 LAKHS THEN IN RESPECT OF BALANCE TRANSACTIONS ONLY PEAK CREDIT COULD HAVE BEEN ADDED. COPY OF THE ACCOUNT HAS BEEN PLACED A T PAGE 29 TO 31 OF THE PAPER BOOK AND SHOWS VARIOUS RECEIPTS AND PAYMENTS. THERE FORE WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND REMIT THE MAT TER BACK TO THE FILE OF ASSESSING OFFICER WITH A DIRECTION TO EXAMI NE THE ACCOUNT OF R.N. HIGHWAYS PVT LTD AND MAKE ADDITION ON THE PEAK THEORY BASIS. 45 GROUND NO. 12 BOTH THE PARTIES WERE HEARD. 46 AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND THAT THAT THIS ISSUE WAS ALSO RAISED IN OTHER GROUP OF CASES IN CA SE OF LATE SHRI PRITAM SINGH AND SHRI GURJIT SINGH (SUPRA). THIS I SSUE WAS ADJUDICATED VIDE PARA 18 WHICH H READS AS UNDER: AFTER CONSIDERING THE RIVAL SUBMISSIONS AND THE MAT ERIAL ON RECORD, WE WOULD LIKE TO POINT OUT THAT AFTER VERIFICATION OF SUPPLEMENTARY CASH BOOK ASSESSING OFFICER SHOULD HAVE GIVEN EFFEC T TO CONSEQUENTIAL FACTS. HOWEVER, IN ANY CASE SINCE W E HAVE ALREADY ACCEPTED THE THEORY AND THIS GROUND HAS BECOME INFR UCTUOUS AND WE DECLINE TO ADJUDICATE THIS GROUND IN DETAIL. FOLLOWING THE ABOVE WE ARE OF THE OPINION THAT NO D ISCUSSION IS REQUIRED TO BE MADE IN RESPECT OF THIS GROUND. 47 IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO. 1169/CHD/2012 IS PARTLY ALLOWED. ITA NO. 1170/CHD/2012 GURJIT SINGH 48 IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLO WING GROUNDS: 1 THAT AUTHORITIES BELOW HAS ERRED IN LAW AND FACTS I N FRAMING THE ASSESSMENT WITHOUT AFFORDING PROPER OPPORTUNITY OF BEING HEARD TO THE APPELLANT. 2. THAT AUTHORITIES BELOW HAS ERRED IN LAW AND FACT S TO APPOINT SPECIAL AUDITOR IN AN AUTOMATIC MANNER WITHOUT CONS IDERING THE FACTS OF THE CASE AND CONSEQUENTLY THE APPOINTMENT OF THE AU DITOR IS BAD IN LAW. 3 THAT THE APPOINTMENT OF SPECIAL AUDITOR IS BAD IN LAW AND IS NOT IN ACCORDANCE WITH THE SPIRIT OF LAW UNDER THE PROVISI ON OF SECTION 142(2A) OF THE ACT BUT ONLY TO GAIN TIME FOR COMPLETING THE ASSESSMENT WHICH IS BARRED BY LIMITATION. 22 4 THAT LD. CIT(A) HAS ERRED IN LAW AND FACTS IN CON FIRMING THE ADDITION OF RS. 60,00,000/- U/S 68 ON ACCOUNT OF AL LEGED UNEXPLAINED CASH CREDITS RECEIVED FROM K.D. SHARMA. 5 THAT LD. CIT(A) HAS ERRED IN LAW AND FACTS IN CON FIRMING THE ADDITION OF RS. 56,00,000/- U/S 68 ON ACCOUNT OF AL LEGED UNEXPLAINED CASH CREDITS RECEIVED FROM M/S TRN LAND DEVELOPERS PVT LTD. 6 THAT LD. CIT(A) HAS ERRED IN LAW AND FACTS IN MAK ING AN ADDITION BY TREATING INVESTMENT IN INDL SHED NO. 101 & 102, BADDI OF RS. 5,00,000/- AS UNEXPLAINED. 7 THAT LD. CIT(A) HAS ERRED IN LAW AND FACTS IN MAK ING AN ADDITION OF RS. 9,46,043/- AS EXCESS PROFIT ON RECEIPTS OF R S. 14640171/- FROM APEX INTERNATIONAL (DUBAI) AND BHUSHAN POWER LTD BA SED UPON THE INCOMPLETE STATEMENT OF ACCOUNTS. 8 THAT LD. CIT(A) HAS ERRED IN LAW AND FACTS IN MAK ING AN ADDITION OF RS. 10,00,000/- AS UNEXPLAINED INCOME ON ACCOUNT OF INVESTMENT NOT SHOWN IN BOOKS IN RESPECT OF INVESTMENT IN SHREE HA RI INDUSTRIES PVT LTD AS PER PAGES 36-37 OF ANNEXURE A1 AND PAGE 63-65 OF ANNEXURE 2 SEIZED FROM 748, PH 3B-1, MOHALI. 9. THAT CIT(A) HAS ERRED IN LAW AND FACTS IN NOT TA KING RELIANCE OF ENTRIES RECORDED IN SUPPLEMENTARY CASH BOOK PRODUCE D BEFORE THE LD. CIT(A) AFTER ADMITTING THE SAME U/S 46A(1)(D) AND D ESPITE THE FACT THAT ASSESSING OFFICER HAS CONFIRMED THE VERIFICATION OF DEBIT/CREDIT ENTRIES RECORDED IN THE SUPPLEMENTARY CASH BOOK. 49 OUT OF ABOVE, GROUNDS NO. 1 TO 3 WERE NOT PRESSE D THEREFORE WE DISMISS THE SAME AS NOT PRESSED. 50 GROUNDS NO. 4 & 5 AFTER HEARING BOTH THE PARTI ES WE FIND THAT DURING ASSESSMENT PROCEEDINGS THE AO NOTICED THAT S PECIAL AUDITOR HAS OBSERVED THAT CERTAIN AMOUNTS WERE RECEIVED BY THE ASSESSEE ON VARIOUS DATES. CONFIRMATIONS WERE NOT FILED. T HE DETAILS OF THE AMOUNT IS AS UNDER: APPEX EXPORT IDCOL FEROCROME & ALLOYS LTD. 2500000 2500000 0 JASUPDESH SINGH 2700000 2700000 0 MATHCLESS ASSOCIATES 1170000 0 117000 PRITAM SINGH OBEROI 2000000 1374075 625925 R.N. HIGHWAYS PVT. LTD. 1603110 60000 1543110 SH. SURINDER PAL SINGH 5380000 0 5380000 TRN LAND DEVELOPERS PVT. LTD. 5600000 0 5600000 HARISH CHANDER 1325000 1325000 0 ELECTRICITY SECURITY (MD NESCO) 667564 0 667564 K D SHARMA 1000000 1110000 0 SERAJUDDIN & CO. 12482400 12482400 0 SIDDESHWAR MINERALS PVT. LTD. 1000000 1000000 0 APEX INTT (DUBAI) 1340171 1340171 0 23 BHUSHAN POWER LTD. 13300000 13300000 0 SAROJINI PRADHAN 3541396 3900000 0 M/S APEX INTERNATIONAL CONSTRUCTION (PROP. GURJIT SINGH) JASUPDESH SINGH 2000000 2000000 0 K.D. SHARMA 6000000 0 6000000 R.N. HIGHWAYS LTD. 3056000 2932384 392146 SARITA DEVI 2000000 2000000 0 M/S SURINDER PAL SINGH OBEROI (PROP. GURJIT SINGH) R.N. HIGHWAYS PVT. LTD. 1300000 0 1300000 M/S PRITAM SINGH & SONS (PROP. GURJIT SINGH) PRITAM SINGH 34800 0 34800 TOTAL 79675111 21660545 IN RESPONSE TO THE QUERY BY ASSESSING OFFICER IT WA S STATED THAT SPECIAL AUDITOR HAS CONSIDERED ONLY CREDIT AMOUNTS BUT HAS NOT GIVEN ANY BENEFIT AGAINST THE DEBIT AMOUNT. THE AS SESSING OFFICER OBSERVED THAT SINCE THE ASSESSEE HAS FAILED TO FILE ANY DOCUMENTARY EVIDENCE TO PROVE THE GENUINENESS OF THESE TRANSACT ION AND THEREFORE A SUM OF RS. 216,60,545/- WAS ADDED TO TH E INCOME OF THE ASSESSEE. 51 BEFORE THE LD. CIT(A), CERTAIN DOCUMENTS AND EXP LANATIONS WERE FILED WHICH WERE SENT FOR VERIFICATION IN THE REMAND PROCEEDINGS. AFTER CONSIDERING REMAND REPORT AND E XPLANATIONS THE LD. CIT(A) DELETED VARIOUS ADDITIONS. THE LD. CIT(A ) CONFIRMED THE ADDITION ONLY IN RESPECT OF K.D. SHARMA RS. 60 LA KHS AND TRN LAND DEVELOPMENT PVT LTD RS. 50 LAKHS. 52 BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE MADE IDENTICAL ARGUMENTS AS WERE MADE IN CASE OF OTHER GROUP OF AP PEALS IN CASE OF LATE SHRI PRITAM SINGH AND GURJIT SINGH (SUPRA) AS WELL AS OTHER GROUNDS IN ASSESSMENT YEAR 2006-07 IN RESPECT OF K.D. SHARMA. 24 53 ON THE OTHER HAND, THE LD. D.R FOR THE REVENUE STRONGLY SUPPORTED THE ORDER OF ASSESSING OFFICER. 54 AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND THAT THAT ISSUE REGARDING ADDITION ON ACCOUNT OF TRN LAND DEVELOPM ENT PVT LTD WAS ADJUDICATED VIDE PARA 76 OF ITA NO. 1173/CHD/20 12 WHICH IS AS UNDER: AS FAR AS ADDITION ON ACCOUNT OF TRN IS CONCERNED WE FIND FORCE IN THE SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSES SEE. IN RESPONSE TO THE ENQUIRY MADE DURING ASSESSMENT PROC EEDINGS TRN HAS STATED VIDE LETTER DATED 11.6.2012 AS UNDER: DATED: 11.06.2012 TO, DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE I CHANDIGARH SIR, SUB: INFORMATION U/S. 133(6) OF THE INCOME TAX ACT IN THE CASE OF PRITAM SINGH PLEASE REFER TO YOUR LETTER DATED 1-6-2012 WHEREIN YOU HAVE STATED THAT PRITAM SINGH HAS CLAIMED TRANSACTION WI TH OUR COMPANY. THE FOLLOWING DESIRED INFORMATION IS GIVEN FOR YOUR PURPOSE: 1. THE TRANSACTION WITH PRITAM SINGH WHEREIN A SUM OF RS. 1,02,97,500/- WAS PAID TO PRITAM SINGH IS CONFIRMED AND A CONFIRMED COPY OF ACCOUNT IS ATTACHED. 2. THAT IN FACT OUR COMPANY HAS RECEIVED A SUM OF R S. 2,05,00,000/- FROM MR. K. D. SHARMA OF ORISSA AS AD VANCE AND OUT OF THIS A SUM OF RS. 1,02,97,500/- WAS PAID TO PRIT AM SINGH AND HIS BUSINESS ASSOCIATES AS TEMPORARY ADVANCE. IN FA CT, THE AMOUNT WAS RECOVERABLE BY PRITAM SINGH AND HIS SON GURJIT SINGH FROM OTHER BUSINESS CONCERNS OF K.D. SHARMA ETC. TH E AMOUNT WAS GIVEN AS TEMPORARY ADVANCE TO GURJIT SINGH ON T HE DIRECTIONS OF K.D. SHARMA WHO HAS DEPOSITED FUNDS WITH THE SAI D COMPANY TILL THE ACCOUNTS OF GURJIT SINGH ARE SETTLED AND R EPAID BY K.D. SHARMA FROM THE RESPECTIVE CONCERNS WHERE THE AMOUN T WAS PAYABLE TO GURJIT SINGH. THAT IN THE MEAN TIME, A D ISPUTE HAS ARISEN AMONGST K.D. SHARMA HIS BUSINESS CONCERNS AN D GURJIT SINGH AND HIS FAMILY MEMBERS AND TRN LAND DEVELOPER S P LTD. AN FIR WAS LODGED BY K.D. SHARMA AGAINST GURJEET SI NGH AND HIS FAMILY MEMBERS, WHERE KD SHARMA HAD CLAIMED THAT TH E AMOUNT DEPOSITED WITH TRN WAS AMOUNT PAID TO FAMILY MEMBER S OF GURJIT SINGH. THE MATTER IS PENDING IN THE COURT OF CIVIL JUDGE SENIOR DIVISION CHANDIGARH. IT IS FURTHER RELEVANT TO MENTION THAT NO BUSINESS WAS TRANSACTED IN TRN LAND DEVELOPERS PVT LTD. EXCEPT FOR RECEIPT OF FUNDS FROM K.D. SHARMA AND TRANSFER OF FUNDS IN FAVOUR OF GURJ IT SINGH AND HIS FAMILY MEMBERS. 3. THE COMPANY IS HAVING PAN AACCT5001D. NO INCOME TAX RETURN WAS FILED AS A DISPUTE HAS ARISEN AMONGST TH E SHAREHOLDERS AND DIRECTORS OF THE COMPANY AND SUIT IS PENDING IN COURTS. A COPY OF BALANCE SHEET IS ATTACHED FOR YOUR KIND PERUSAL. 25 THANKING YOU, YOURS TRULY, FORM TRN LAND DDEVELOPERS PRIVATE LIMITED SD/- DIRECTOR ABOVE CLEARLY SHOW THAT TRN HAD CONFIRMED THE FACT OF GIVING ADVANCE TO PRITAM SINGH I.E. THE ASSESSEE. SOURCE IN THE HANDS OF THE TRN WAS BY WAY OF DEPOSITS RECEIVED FROM K.D. S HARMA WHO HAS LODGED AN FIR AGAINST THE ASSESSEE GROUP ALLEGI NG THAT THE INVESTMENT TO THE EXTENT OF RS. 13,85 CRORES WERE M ADE WITH ASSESSEE GROUP. IN FACT K.D. SHARMA HAD SURRENDERE D A SUM OF RS. 12 CRORE AND THEREFORE SOURCES IN THE HAND OF T HE TRN STAND EXPLAINED. ONCE THE SOURCE OF INVESTMENT AND PAN WA S AVAILABLE AND IF THE ASSESSING OFFICER STILL HAD DOUBT THEN HE SHOULD HAVE ASKED THE ASSESSEE OR THAT PARTY TO FURNISH FURTHER PAPERS. THE DETAILED EVIDENCE CANNOT BE BRUSHED ASIDE PARTICULA RLY BECAUSE OF THE FACT THAT THE DEPOSITOR HAD ALREADY PAID TAXES AND SOURCES STAND EXPLAINED IN THE HANDS OF THE ASSESSEE. THER EFORE WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND DELETE THE AD DITION OF RS. 10297500/-. THEREFORE FOLLOWING THE SAME LOGIC WE DELETE THIS A DDITION. SIMILARLY ADDITION ON ACCOUNT OF K.D. SHARMA IS DELETED BECAU SE HE HAS ALREADY SURRENDERED RS. 12 CRORES AND HAS FILED FIR AGAINST THE ASSESSEE STATING THAT HE HAS ADVANCED A SUM OF RS. 13.85 CRORES TO THE ASSESSEE AND HIS FAMILY MEMBERS AND THEREFORE S OURCES STAND EXPLAINED. ACCORDINGLY WE SET ASIDE THE ORDER OF T HE CIT(A) AND DELETE THESE TWO ADDITIONS. 55 GROUND NO. 6 AFTER HEARING BOTH THE PARTIES WE FIND THAT DURING ASSESSMENT PROCEEDINGS THE AO NOTICED THAT A SSESSEE HAS PURCHASED A PROPERTY BEING SHED NO. 101-102 AT BADD I AND FOLLOWING PAYMENTS WERE MADE: PAGE 7,PARA 12 OF THE IMPUGNED ASSESSMENT ORDER DE ALS WITH PURCHASE OF THE PROPERTY FOR WHICH AN AMOUNT OF RS. 76,50,00 0/- WAS PAID ON VARIOUS DATE, WHICH INCLUDES AN AMOUNT OF RS. 5,00, 000/- PAID IN CASH WHICH WAS AS PER SEIZED MATERIAL, CONTAINING NO DAT E. THE ASSESSING OFFICER PROCEEDED TO ADD BACK RS. 5 LAKHS AS UNEXPL AINED AS THE OTHER AMOUNTS WERE FOUND REFLECTED IN THE FINANCIAL STATE MENTS OF THE ASSESSEE. THE SUBMISSIONS OF THE ASSESSEE DURING A PPEAL WAS REMANDED TO THE ASSESSING OFFICER. THE ASSESSEE HAS SHOWN INVESTMENT IN RESPECT OF THI S PROPERTY AT RS. 71,50,000/-. SPECIAL AUDITOR HAD OBSERVED THAT NO SOURCES HAVE BEEN EXPLAINED FOR BALANCE PAYMENT. THE ASSESSING OFFICER FURTHER 26 OBSERVED THAT SINCE ASSESSEE HAS NOT BEEN ABLE TO E XPLAIN THE SOURCES OF BALANCE PAYMENT OF RS. 5 LAKHS, THEREFOR E THIS SUM WAS ADDED TO THE INCOME OF THE ASSESSEE. 56 ON APPEAL, THE ADDITION WAS CONFIRMED BY THE LD. CIT(A) VIDE PARA 8.2 WHICH IS AS UNDER: I HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS. IT IS UNDISPUTED THAT THE SEIZED DOCUMENT CONTAINED DETAILS OF PAYMENT OF RS. 76.5 LAKHS INVESTED IN INDL SHED NO. 101 AND 102. THOUGH ASSE SSEE HAS FURNISHED ONLY ONE AGREEMENT TO SELL IN RESPECT OF PLOT NO. 1 01 INCLUDING THE FULL AND FINAL PAYMENT VIDE AGREEMENT MADE ON 27.11.2007 FOR RS. 40 LAKHS THE SAME IS IN CONTRADICTION WITH THE SEIZED MATERI AL WHICH REFLECTS THE INVESTMENT FOR THE YEAR ENDING 31.3.2007 WHICH INC LUDES THE INVESTMENT IN SHED NO. 102. THE ASSESSEE HAS NOW COME UP WITH THE EXPLANATION AS REGARD THE ADDITION OF RS. 5 LAKHS, AS BEING THE DI FFERENCE BETWEEN THE SUM REFLECTED IN THE FINANCIAL STATEMENT VIZ-A-VIZ TH SEIZED MATERIAL THAT THE SELLER HAS BACKED OUT OF THE DEAL. HOWEVER, TH E COPY OF THE CIVIL SUIT FILED IN SUPPORT OF ITS CLAIM HAS CERTAIN SHORT COM INGS IN SO FAR AS IT DOES NOT MENTION THE CIVIL SIT NO NOR ANY SIGNATURE THOU GH THE DOCUMENT IS OSTENSIBLY DATED 2.7.2010. IN FACT IT IS ALSO NOT EVIDENT IF THE SUIT IF FILED HAS BEEN ADMITTED. IN VIEW OF THE SHORT COMINGS EL UCIDATED NO CREDENCE CAN BE GIVEN TO THE SAME. FURTHER THE RELIANCE IN THE CASE OF VED PRAKASH CHAUDHARY DOES NOT HOLD EITHER AS THE FACTS IS DISTINGUISHABLE . HENCE CONSIDERING THE FACTS AND CIRCUMSTANCES THE I SSUE AT HAND, THE ADDITION OF RS. 5 LAKHS IS CONFIRMED. 57 BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE SUBM ITTED THAT THE ISSUE IS IDENTICAL TO THE SAME ISSUE RAISED IN ASSE SSMENT YEAR 2006- 07 IN RESPECT OF GROUND NO. 7. IN FACT BALANCE PAY MENT WAS STILL TO BE MADE BECAUSE THE PROPERTY HAS NOT BEEN REGISTERE D IN THE NAME OF THE ASSESSEE AND THE ASSESSEE HAD ALREADY FILED SUITE FOR SPECIFIC PERFORMANCE (COPY OF WHICH IS AVAILABLE AT PAGE 51 TO 56 OF PAPER BOOK). 58 ON THE OTHER HAND, THE LD. D.R FOR THE REVENUE STRONGLY SUPPORTED THE ORDER OF THE LD. CIT(A). 59 AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND THAT IF REGISTRATION OF THE PROPERTY HAS NOT TAKEN PLACE AN D SOME AMOUNT IS STILL SHOWN TO BE PAYABLE THEN THAT AMOUNT CANNOT B E ADDED. THEREFORE FOLLOWING OUR DECISION IN PARA NO. 25 FOR ASSESSMENT YEAR 2006-07, WE DELETE THIS ADDITION. 60 GROUND NO. 7 AFTER HEARING BOTH THE PARTIES WE FIND THAT DURING ASSESSMENT PROCEEDINGS THE AO NOTICED THAT T HE ASSESSEE HAD SHOWN RECEIPTS OF RS. 14640171/- FROM APEX INTE RNATIONAL DUBAI 27 AND BHUSHAN POWER LTD IN THE BOOKS. IT WAS FURTHE R NOTED THT THE ASSESSEE CLAIMED THAT THESE RECEIPTS PERTAIN TO ASS ESSMENT YEAR 2006-07 BUT WERE SHOWN IN ASSESSMENT YEAR 2007-08. THEREFORE SAME WERE CONSIDERED IN ASSESSMENT YEAR 2007-08 ON LY. SINCE THE ASSESSEE HAD SHOWN EXPENDITURE OF RS. 12962119/- TH EREFORE PROFIT WAS ASSESSED AT RS. 1678052/-. 61 ON APPEAL CERTAIN EXPLANATION AND DOCUMENTS WERE FILED WHICH WERE SENT FOR VERIFICATION IN REMAND PROCEEDINGS. THE COMMENTS OF THE ASSESSING OFFICER AND COUNTER COMMENTS OF THE A SSESSEE HAVE BEEN REPRODUCED BY THE LD. CIT(A) AS UNDER: REMAND REPORT ON THE ISSUE IS AS BELOW ASSESSEE HAS CONTENDED THAT TOTAL TURNOVER OF RS. 1 ,46,40,171/- RELATES TO THE YEAR UNDER CONSIDERATION AND BY MISTAKE THE SAME WAS INCLUDED IN THE INCOME AT THE TIME OF FILING OF RETURN FOR ASSE SSMENT YEAR 2006-07. ASSESSEE HAS INCLUDED A FLAT NET PROFIT OF 5% AND I NCOME AT RS. 7,32,009/- WAS RETURNED IN ASSESSMENT YEAR 2006-07 WHICH IS MORE THAN ACTUAL PROFIT EARNED AGAINST THIS SALE TURNOVER. ASSESSEE HAS FURTHER CONTENTED THAT HE DOES NOT HAV E ANY OBJECTION IF PROFIT DISCLOSED IN ASSESSMENT YEAR 2006-07 AMOUNT ING TO RS. 7,32,009/- IS REDUCED FROM THE PROFITS FOR AY 2006- 07 AND INCLUDED IN INCOME OF ASSESSMENT YEAR 2007-08. ASSESSEE HAS FURTHER CONTENDED THAT AS PER STATEMEN T OF ACCOUNTS COMPLETE EXPENDITURES WERE NOT DEBITED AND AS SUCH PROFIT AS PER THAT PROFIT AND LOSS ACCOUNT WAS APPEARING AT RS. 16,78, 052/-. HE FURTHER CONTENDED THAT DIFFERENCE OF RS. 946,043/- IN THE P ROFIT DECLARED IN AY 2006-07 AND INCOME DETERMINED IN AY 2007-08 IS DEBI TED IN THE SUPPLEMENTARY CASH FLOW STATEMENT. IN THIS REGARD IT IS SUBMITTED THAT ASSESSEE HAS SH OWN 5% PROFIT ON RS. 1,46,40,171/- AMOUNTING TO RS. 732009/- IN ASSESSME NT YEAR 2006-07. THE RECEIPT OF RS. 14640171/- PERTAINS TO ASSESSME NT YEAR 2007-08 AS SUCH THE PROFIT IS TO BE ASSESSED IN AY 2007-08 ONL Y. IN SO FAR AS THE CONTENTION OF THE ASSESSEE THAT DI FFERENCE OF RS. 9,46,043/- (RS. 16,78,052/- 7,32,009/-) IN THE PROF IT DECLARED IN AY 2006- 07 AND INCOME DETERMINED IN AY 2007-08 IS DEBITED I N THE SUPPLEMENTARY CASH FLOW STATEMENT IS NOT ACCEPTABLE AS THE EXPENS ES OF RS. 1,29,62,119/- WAS FOUND TO BE DEBITED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. WITH REGARD TO PAYMENT OF EXPENDITURE OF RS. 9,46,043 CLAIMED TO HAVE BEEN PAID OUT OF FUNDS AVAILABLE AS RECORDED IN SUPPLEMENTARY CASH BOOK, THE ENTRIES OF RS. 8,46,04 3/- IS DEBITED IN THE SUPPLEMENTARY CASH BOOKS, THE DEBIT/ CREDIT ENTRIES IN THIS CASH BOOK IS VERIFIED. HOWEVER, THE SUPPLEMENTARY CASH BOOK NOW FILED BY ASSESSEE IS IN CONTRAVENTION TO RULE 46A OF THE I.T. RULES, 1962 AND THE SAME MAY NOT BE ADMITTED AS TANTAMOUNT TO ADDITIONAL EVIDENC E. THESE PAYMENTS WERE NOT RECORDED IN THE BOOKS PRODUCED BEFORE SPEC IAL AUDITOR AND THEREFORE THESE AMOUNTS HAVE BEEN RIGHTLY ADDED BAC K AS UNEXPLAINED INCOMES OF THE ASSESSEE U/S 69 OF THE I.T. ACT. 196 1. ASSESSEE IN HIS COUNTER COMMENTS HAS CONTENDED THAT OUT OF RS. 16,78,052/- A SUM OF RS. 7,32,009/- WAS INCLUDED IN ASSESSMENT YEAR 2006-07 BY ASSESSEE AND THE SAME WAS ACCEPTED BY LE ARNED DCIT. 28 WITH REFERENCE TO BALANCE THE LEARNED DCIT HAS VERI FIED THE PAYMENTS PAID IN CASH AND ROUTED THROUGH SUPPLEMENTARY CASH BOOK ALONG WITH ALL DEBIT AND CREDIT ENTRIES IN SUPPLEMENTARY CASH BOOK , HOWEVER THE LEARNED OFFICER HAD OBJECTED THE ADMISSION OF SUPPL EMENTARY CASH BOOK U/R 46A OF THE I.T. RULES 1962. THAT ON THE ISSUE O F ADMISSION OF ADDITIONAL DOCUMENTS FILED FOR THE FIRST TIME IN AP PEAL A DETAILED COMMENTS HAS ALREADY BEEN MADE UNDER APPLICATION U/ S 46A AND JUSTIFICATION HAS BEEN GIVEN BY ASSESSEE THERE WAS NO SUFFICIENT TIME AFFORDED BY ASSESSING OFFICER TO REPLY THE ABOVE TR ANSACTION. THE SOURCE OF PAYMENT HAS SINCE BEEN EXPLAINED AND VERIFIED BY LEARNED DCIT AS SUCH THERE IS NO JUSTIFICATION IN ANY ADDITION. 62 THE LD. CIT(A) THEREAFTER OBSERVED THAT IN ASSES SMENT YEAR 2006-07 THE ASSESSEE HAD RAISED ADDITIONAL GROUND I N RESPECT OF THESE RECEIPTS CLAIMING THAT PROFIT BELONG TO ASSES SMENT YEAR 2007- 08 AND THE SAID ADDITIONAL GROUND WAS ADMITTED AND ADDITION OF RS. 732009/- WAS DELETED IN ASSESSMENT YEAR 2006-07 TH EREFORE INCOME HAS TO BE ENHANCED ACCORDINGLY. THE CONTENTION THAT THE ADDITIONAL EXPENDITURE WAS CLAIMED IN SUPPLEMENTARY CASH BOOK AND WAS REJECTED BY OBSERVING THAT IT WAS AN AFTER THOUGHT. 63 BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE SUBM ITTED THAT ADDITIONAL EXPENDITURE WAS SHOWN IN THE SUPPLEMENTA RY CASH BOOK WHICH HAS BEEN ACCEPTED BY THE ASSESSING OFFICER DU RING REMAND PROCEEDINGS ON VERIFICATION OF SUPPLEMENTARY CASH B OOK. THEREFORE AT BEST REASONABLE PROFIT CAN BE ASSESSED ON THESE RECEIPTS. 64 ON THE OTHER HAND, THE LD. D.R FOR THE REVENUE STRONGLY SUPPORTED THE ORDER OF LD. CIT(A). 65 AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND FORCE IN THE SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE. O NCE ADDITIONAL EVIDENCE HAS BEEN ADMITTED AND SUPPLEMENTARY CASH B OOK HAS BEEN VERIFIED THEN SAME CANNOT BE REJECTED WITHOUT POINT ING OUT FURTHER DEFECT. THEREFORE WE SET ASIDE THE ORDER OF THE CIT (A) AND DIRECT THE ASSESSING OFFICER TO ASSESS PROFIT @ 8% ON THE RECE IPTS OF RS. 14640171/-. 66 GROUND NO. 8 AFTER HEARING BOTH THE PARTIES WE FIND THAT DURING ASSESSMENT PROCEEDINGS THE AO NOTICED THAT P ERUSAL OF 29 ANNEXURE A2 PAGES 63 TO 65 SHOWS EXPENDITURE FOR IN STALLATION OF CRUSHED AMOUNTING TO RS. 26719372/-. IN THE STATEM ENT THE ASSESSEE ADMITTED THAT 50% OF THIS CRUSHER BEING RU N UNDER THE NAME AND STYLE OF SHREE HARI INDUSTRIES PVT LTD BEL ONG TO THE ASSESSEE AND THE ASSESSEE HAS INCURRED 50% OF THE EXPENDITURE. IT WAS FURTHER ADMITTED THAT TOTAL EXPENDITURE BY THE ASSESSEE ON THIS CRUSHER WAS RS. 16,451,000/-. HOWEVER, PERUSAL O F TRIAL BALANCE AND BALANCE SHEET OF APEX (PROPRIETARY CONCERN OF T HE ASSESSEE) REVEALED THAT UPTO THE YEAR ENDING 31.3.2008 THE AS SESSEE HAS SHOWN INVESTMENT ONLY TO RS. 15,451,000/-. SINCE T HE ASSESSEE HAD SHOWN RS. 10 LAKHS LESS INVESTMENT THIS WAS ADDED T O THE INCOME OF THE ASSESSEE. 67 ON APPEAL CERTAIN EXPLANATION/DOCUMENTS WERE FIL ED BEFORE THE LD. CIT(A). AFTER VERIFICATION OF REMAND REPORT TH OUGH THE ASSESSING OFFICER VERIFIED THE EXPENDITURE BUT OBSERVED THAT SUPPLEMENTARY CASH BOOK FILED NOW IS AN AFTER THOUGHT AND REFUSED TO ACCEPT THE SAME. THE LD. CIT(A) ON THE BASIS OF THIS COMMENT, CONFIRMED THE ADDITION. 68 BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE REIT ERATED THE SUBMISSIONS WHICH WERE MADE IN RESPECT OF OTHER ISS UES WHEREIN SUPPLEMENTARY CASH BOOK WAS VERIFIED BY THE ASSESSI NG OFFICER. HE REFERRED TO PAGE 100 WHERE IN THE REMAND REPORT THE ASSESSING OFFICER HAS CLEARLY VERIFIED THIS EXPENDITURE. 69 ON THE OTHER HAND, THE LD. D.R FOR THE REVENUE STRONGLY SUPPORTED THE ORDER OF THE LD. CIT(A). 70 AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND THAT IN THE REMAND REPORT RELEVANT OBSERVATIONS OF THE SAME IS AVAILABLE AT PAGE 100 WHICH READS AS UNDER: WITH REGARD TO PAYMENT OF RS. 10,00,000/- CLAIMED T O HAVE BEEN PAID OUT OF FUNDS AVAILABLE AS RECORDED IN SUPPLEMENTARY CASH BOOK, THE ENTRIES OF RS. 10,00,000/- IS DEBITED IN THE SUPPLE MENTARY CASH BOOK THE DEBIT / CREDIT ENTRIES IN THIS CASH BOOK IS VERIFIE D. HOWEVER, THE 30 SUPPLEMENTARY CASH BOOK NOW FILED BY ASSESSEE IS IN CONTRAVENTION TO RULE 46A OF THE IT RULES, 1962 AND THE SAME MAY NOT BE ADMITTED AS TANTAMOUNT TO ADDITIONAL EVIDENCE. THESE PAYMENTS WERE NOT RECORDED IN THE BOOKS PRODUCED BEFORE SPECIAL AUDITOR AND TH EREFORE THESE AMOUNTS HAVE BEEN RIGHTLY ADDED BACK AS UNEXPLAINED INCOMES OF THE ASSESSEE U/S 69 OF IT ACT, 1961. THE ABOVE CLEARLY SHOWS THAT THE ASSESSING OFFICER HAS VERIFIED ONLY RS. 10 LAKHS. IN OUR OPINION, AFTER HAVING ADMITTE D ADDITIONAL EVIDENCE AND AFTER HAVING VERIFIED THE PARTICULAR E NTRIES, THE REVENUE CANNOT TAKE STAND THAT FILING OF SUPPLEMENTARY CASH BOOK WAS AN AFTER THOUGHT. THEREFORE IN OUR OPINION, THIS ADDI TION DESERVES TO BE DELETED AND ACCORDINGLY WE SET ASIDE THE ORDER OF T HE CIT(A) AND DELETE THIS ADDITION. 71 GROUND NO. 9 - AFTER CONSIDERING THE RIVAL SUBMI SSIONS WE FIND THAT THAT THIS ISSUE WAS ALSO RAISED IN OTHER GROUP OF CASES IN CASE OF LATE SHRI PRITAM SINGH AND SHRI GURJIT SINGH. T HIS ISSUE WAS ADJUDICATED VIDE PARA 18 WHICH H READS AS UNDER: AFTER CONSIDERING THE RIVAL SUBMISSIONS AND THE MAT ERIAL ON RECORD, WE WOULD LIKE TO POINT OUT THAT AFTER VERIFICATION OF SUPPLEMENTARY CASH BOOK ASSESSING OFFICER SHOULD HAVE GIVEN EFFEC T TO CONSEQUENTIAL FACTS. HOWEVER, IN ANY CASE SINCE W E HAVE ALREADY ACCEPTED THE THEORY AND THIS GROUND HAS BECOME INFR UCTUOUS AND WE DECLINE TO ADJUDICATE THIS GROUND IN DETAIL. FOLLOWING THE ABOVE WE ARE OF THE OPINION THAT NO D ISCUSSION IS REQUIRED TO BE MADE IN RESPECT OF THIS GROUND. 72 IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO . 1170/CHD/2012 IS PARTLY ALLOWED. ITA NO. 1189/CHD/2012 REVENUE APPEAL 73 IN THIS APPEAL THE REVENUE HAS RAISED THE FOLLOW ING GROUNDS: 1 WHETHER THE LD. CIT(A) IS JUSTIFIED IN LAW AND O N FACTS IN DELETING THE ADDITION OF RS. 30,50,597/- ON ACCOUNT OF GIFT RECEIVED FROM S.P. SINGH WHEN ASSESSEE FAILED TO PR OVE THE GENUINENESS OF THE GIFT? 2 WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) WAS JUSTIFIED IN ACCEPTING THE GENUINENESS O F A GIFT FROM NON RESIDENT INDIAN (NRI) BROTHER OF THE ASSESSEE, IN TOTAL DISREGARD TO THE RATIO LAID DOWN BY THE HON'BLE SUP REME COURT IN THE CASE OF CIT V P.R. GANAPATHY, (2012-TIOL-76-SC -IT) THAT THE ASSESSEE HAS TO SHOW ADEQUACY OF FUNDS IN THE HAND OF FOREIGN DONOR FOR AFORESAID GIFT DONATION? 31 3 WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CAS E ADVERSE AND REBUTTABLE PRESUMPTION SHOULD HAVE BEEN DRAWN A BOUT GENUINENESS OF THE GIFT WHEN THE ASSESSEE OVER A PE RIOD OF SEVEN ASSESSMENT YEARS HAS RECEIVED TOTAL SUM OF RS. 4864 8199/- CRORES AS GIFT AND ANOTHER SUM OF RS. 9480000/- AS LOAN? 4 WHETHER THE LD. CIT(A) ON THE FACTS AND CIRCUMSTA NCES OF THIS IS JUSTIFIED IN LAW AND FACTS IN DELETING THE DISALLOWANCE OF RS. 209503/- ON ACCOUNT OF EXPENSE ON INTEREST PAID ON LOAN AGAINST FDR CLAIMED AGAINST INTEREST INCOME FROM OTHER SOUR CES IN VIOLATION OF SECTION 57(III)? 74 GROUNDS NO. 1 TO 3 AFTER HEARING BOTH THE PART IES WE FIND THAT DURING ASSESSMENT PROCEEDINGS THE AO NOTI CED THAT THE ASSESSEE HAS RECEIVED GIFTS OF VARIOUS SUMS TOT ALING TO RS. 3050597/- FROM SHRI S.P. SINGH. ON ENQUIRY COPY OF THE CONFIRMATION FROM ASSESSEES BROTHER SHRI S.P. OBER OI STATING THAT THESE AMOUNTS WERE GIVEN AS GIFTS, WERE FILED. HOWEVER, HE REJECTED THE CLAIM BECAUSE THE SOURCE ETC. WAS N OT PROPERTY PROVED BY THE ASSESSEE. 75 ON APPEAL THE LD. CIT(A) DELETED THE ADDITION VI DE PARA 16.2 WHICH IS AS UNDER: I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE ASSESSEE, THE REMAND REPORT AND THE IMPUGNED ASSESSMENT ORDER. C ERTAIN FACTS ARE FOUND UNDISPUTED VIZ. THAT SHRI SP SINGH IS THE BROTHER OF THE ASSESSEE AND IS AN NRI, BASED IN DUBAI, THAT THE AM OUNTS WERE RECEIVED FROM SP SINGH AS REVEALED FROM THE BANK AC COUNTS AND ARE REFLECTED IN THE TRIAL BALANCE AND BALANCE SHEE T OF THE A E. IMPORTANTLY THE CREDITWORTHINESS AS WELL AS THE IDE NTITY OF THE PERSON HAS NOT BEEN DISPUTED EITHER. THE ONLY APPA RENT DOUBT IN THE MIND OF THE ASSESSING OFFICER IS THE GENUINENES S OF THE TRANSACTION CLAIMED BY THE ASSESSEE AND HIS BROTHER AS GIFTS, BESIDES THE NON-FILING OF FIRCS. IN CONNECTION WIT H THE NATURE OF THE RECEIPTS, THE ASSESSEE HAS IN HIS SUBMISSIONS S TATED THAT IN THE ASSESSMENT PROCEEDINGS FOR ASSESSMENT YEAR 20 09-10, THE DCIT, INTERNATIONAL TAXATION, CHANDIGARH HAS ACCEPT ED THE GIFT AS GENUINE. THE ASSESSING OFFICER IS SILENT ON THIS M ATTER EXCEPT STATING THAT THE CERTIFICATION OBTAINED FROM DUBAI AS WELL AS AVAILABILITY OF SUFFICIENT FUNDS WITH SURINDER PAL SINGH DOES NOT PROVE THE PURPOSE OF REMITTANCE. BE THAT AS IT MAY, AS REGARDS THE NATURE OF THE REMITTANCE, IT IS CLEAR THAT THE INCOME-TAX AUTHORITIES CANNOT TAKE TWO STANDS FOR THE SAME TRA NSACTION. ONCE THE GIFT HAS BEEN HELD TO BE GENUINE, THERE CA N BE NO DISPUTE THAT THE SAME WILL HAVE TO BE ACCEPTED AS G ENUINE THERE CAN BE NO DISPUTE THAT THE SAME WILL HAVE TO BE ACCEPTED AS GENUINE IN THE HANDS OF THE ASSESSEE. THE ASSES SEE FURTHER HAS DISCHARGED HIS ONUS CAST UPON HIM BY PRODUCING THE ORDER OF ASSESSMENT OF SHRI SP SINGH DATED 30.12.2011 FOR ASSESSMENT YEAR 2009-10 PASSED BY THE DDIT, INTERN ATIONAL TAXATION, CHANDIGARH. THUS I ACCEPT THE CONTENTION OF THE ASSESSEE AND THE GROUND OF APPEAL IS ALLOWED. 76 BOTH THE PARTIES WERE HEARD. 77 AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND THAT THAT THIS ISSUE IS IDENTICAL TO THE ISSUE RAISED BY THE REVENUE IN ITA 32 NO. 1193/CHD/2012 IN CASE OF LATE SHRI PRITAM SINGH AND GURJIT SINGH (SUPRA) WHICH IS OF THE SAME GROUP. BOTH THE PARTIES AGREED THAT THE ISSUE IS IDENTICAL TO THE ISSUE AGI TATED IN REVENUES APPEAL IN ITA NO. 1193/CHD/2012. WE FIND THAT THIS ISSUE WAS ADJUDICATED VIDE PARA 109 TO 110 WHICH AR E AS UNDER: 109 WE HAVE GONE THROUGH THE RIVAL SUBMISSIONS CARE FULLY AND FIND THAT THE LD. CIT(A) HAS DECIDED THIS ISSUE VID E PARA 8.1 WHICH IS AS UNDER: I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE ASSESSEE, THE REMAND REPORT AND THE IMPUGNED ASSESSMENT ORDER. CE RTAIN FACTS ARE FOUND UNDISPUTED VIZ. THAT SHRI SP SINGH IS THE SON OF THE ASSESSEE AND IS AN NRI, BASED IN DUBAI; THAT THE AMOUNTS WERE RE CEIVED FROM SP SINGH AS REVEALED FROM THE BANK ACCOUNTS AND ARE RE FLECTED IN THE TRIAL BALANCE AND BALANCE SHEET OF THE ASSESSEE. IMPORTAN TLY, THE CREDITWORTHINESS AS WELL AS THE IDENTITY OF THE PER SON HAS NOT BEEN DISPUTED EITHER. THE ONLY APPARENT DOUBT IN THE MIN D OF THE LD. AO IS THE GENUINENESS OF THE TRANSACTIONS CLAIMED BY THE ASSE SSEE AND HIS SON AS GIFTS, BESIDES THE NON-FILING OF FIRCS. IN CONNECTI ON WITH THE NATURE OF THE RECEIPT, THE ASSESSEE HAS IN HIS SUBMISSIONS ST ATED THAT IN THE ASSESSMENT PROCEEDINGS FOR AY 2009-10, THE DCIT, IN TERNATIONAL TAXATION, CHANDIGARH HAS ACCEPTED THE GIFT AS GENUI NE. THE LD AO IS SILENT ON THIS MATTER EXCEPT STATING THAT THE CERTI FICATE OBTAINED FROM DUBAI AS WELL AS AVAILABILITY OF SUFFICIENT FUNDS W ITH SURINDER PAL SINGH DOES NOT PROVE THE PURPOSE OF REMITTANCE. BE THAT A S IT MAY, AS REGARDS THE NATURE OF THE REMITTANCE, IT IS CLEAR THAT THE INCOME-TAX AUTHORITIES CANNOT TAKE TWO STANDS FOR THE SAME TRANSACTION. ON CE THE GIFT HAS BEEN HELD TO BE GENUINE, THERE CAN BE NO DISPUTE THAT TH E SAME WILL HAVE TO BE ACCEPTED AS GENUINE IN THE HAND OF THE ASSESSEE. TH E ASSESSEE FURTHER HAS DISCHARGED HIS ONUS CAST UPON HIM BY PRODUCING THE ORDER OF ASSESSMENT OF SHRI. S.P. SINGH DATED 30.12.2011 FOR AY 2009-10 PASSED BY THE DDIT, INTERNATIONAL TAXATION, CHANDIGARH. TH US, I ACCEPT THE CONTENTION OF THE ASSESSEE AND THE GROUND OF APPEAL IS ALLOWED. THUS FROM ABOVE IT BECOMES CLEAR THAT THE REVENUE H AS ALREADY ACCEPTED THE FACT OF GIVING GIFTS BY SHRI SURINDERP AL SINGH. WE HAVE ALREADY ADMITTED THE APPLICATION FOR ADDITIONA L EVIDENCE IN ITA NO. 1174/CHD/2012 IN CASE OF ASSESSEE. RELEVANT PORTION OF REASONS RECORDED FOR REOPENING OF THE ASSESSMENT RE ADS AS UNDER: THE ASSESSEE S.P. SINGH HAS GIVEN GIFTS OF RS. 421 6458/- TO HIS FATHER SHRI PRITAM SINGH AND RS. 1490000/- TO HIS B ROTHER, GURJIT SINGH DURING THE YEAR. THE ASSESSEE HAS NOT FIELD INCOME TAX RETURN FOR ASSESSMENT YEAR 2005-06. ENTIRE AMOUNT HAS BEEN REMITTED BY HIM FROM UAE. THUS THE SOURCE OF GIFT OF RS. 5706458/- (RS. 4216458 + RS. 1490000) MADE BY THE A SSESSEE NEEDS TO BE VERIFIED WITH RESPECT TO THE CAPACITY T O MAKE SUCH HUGE GIFTS AND THIS EXPENDITURE REMAINS UNEXPLAINED . AS A RESULT I HAVE REASON TO THAT THIS INCOME OF RS. 5706458/- HA S ESCAPED TAXATION AND THE CASE NEEDS TO BE OPENED U/S 147. 110 AFTER ISSUING NOTICE U/S 148 ON THE BASIS OF AB OVE NOTED REASONS THE ASSESSMENT WAS ULTIMATELY COMPLETED U/S 143(3) R.W.S. 148 IN CASE OF SHRI SURINDERPAL SINGH VIDE ORDER DA TED 28.2.2013 FOR ASSESSMENT YEAR 2005-06 IN WHICH IT IS CLEARLY MENTIONED THAT THE GIFTS GIVEN BY SURINDERPAL SINGH TO PRITAM SING H AND GURJIT SINGH WERE VERIFIED. IT IS ALSO ACCEPTED IN THE AS SESSMENT ORDER THAT SURINDERPAL SINGH IS AN NRI AND RUNNING MANY B USINESS ORGANIZATIONS AND ASSESSABLE INCOME IN INDIA WAS NI L. THEREFORE IT BECOMES CLEAR THAT SOURCE OF GIFTS STAND EXPLAINED. THEREFORE REASONING GIVEN BY THE LD. CIT(A) FOR DELETING THIS ADDITION, IS 33 TOTALLY CORRECT AND ACCORDINGLY WE CONFIRM THE ORDE R OF THE LD. CIT(A). FOLLOWING THE ABOVE WE DECIDE THIS ISSUE AGAINST TH E REVENUE. 78 GROUND NO. 4 AFTER HEARING BOTH THE PARTIES WE FIND THAT THE ASSESSEE HAS CLAIMED INTEREST EXPENSES AMOUNTIN G TO RS. 209503/- AGAINST THE INCOME FROM INTEREST ON FDRS. HE DID NOT ALLOW THIS EXPENDITURE BECAUSE INTEREST WAS NOT PAI D FOR EARNING INTEREST. 79 ON APPEAL THE ADDITION WAS DELETED BY THE LD. CI T(A) BY OBSERVING THAT FDRS WERE PURCHASED FROM BUSINESS FU NDS AND IN THE EARLIER YEARS AND NO FDR WAS PURCHASED DURIN G THE YEAR. IN THIS RESPECT SHE FOLLOWED THE DECISION OF HON'BL E SUPREME COURT IN CASE OF ACG ASSOCIATED CAPSULES PVT LTD V CIT, 343 ITR 89. 80 BOTH THE PARTIES WERE HEARD. 81 AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND THAT THAT IDENTICAL CASE CAME UP FOR IN ASSESSEES CASE IN AP PEAL FILED BY THE REVENUE IN ITA NO. 1187/CHD/2012 WHICH HAS B EEN ADJUDICATED THROUGH CONSOLIDATED ORDER IN CASE OF L ATE SHRI PRITAM SINGH AND GURJIT SINGH (SUPRA) VIDE ORDER DA TED 6.6.2014. THIS ISSUE WAS CONSIDERED AND DECIDED VI DE PARA 196-197 WHICH ARE AS UNDER: 196 BEFORE US, THE SUBMISSIONS MADE BEFORE THE LD. CIT(A) WERE REITERATED. IT WAS FURTHER SUBMITTED THAT INCOME W AS RETURNED AS BUSINESS INCOME AND IN THIS REGARD REFERENCE WAS MA DE TO COMPUTATION OF INCOME (COPY PLACED AT PAGE 14 & 15 OF PAPER BOOK). HE ALSO REFERRED TO PG 48 TO 61 AND POINTED OUT THAT IN THIS YEAR THERE WAS NO BUSINESS WHICH BECOME CLEAR FROM COPY OF PROFIT AND LOSS ACCOUNT (PG 48 OF PAPER BOOK). THE TOTAL FDR WERE FOR RS. 41.63 LAKHS AND LOANS FROM FDR IS 26.05 LAKHS. ASSESSEES OWN CAPITAL WAS RS. 27.25 LAKHS. ALL THE FDRS ARE MADE FROM EARLIER YEARS. THESE FDRS WERE PURCHASED FOR COMME RCIAL PURPOSES I.E. FOR OBTAINING BANK GUARANTEE ETC. AND THE LOAN AGAINST FDRS WAS USED FOR CONSTRUCTION BUSINESS. T HUS CLEARLY THE INTEREST ON FDRS WAS BUSINESS INCOME AGAINST WH ICH INTEREST PAID, IF ANY, HAS TO BE ALLOWED IN THE ABSENCE OF A NY BUSINESS RECEIPTS DURING THE YEAR. HE AGAIN RELIED ON THE D ECISION OF ACG ASSOCIATED CAPSULES PVT LTD. VS. CIT (SUPRA) AND CI T VS. SHRI RAM HONDA POWER EQUIP, 289 ITR 475 (DELHI). 197 WE HAVE GONE THROUGH THE RIVAL SUBMISSIONS CAR EFULLY AND FIND THAT ADMITTEDLY THE INCOME FROM INTEREST ON FD R WAS RETURNED AS INCOME FROM BUSINESS AND HAS ALSO BEEN ASSESSED AS INCOME 34 FROM BUSINESS. FURTHER FDRS WERE PURCHASED FOR THE PURPOSE OF OBTAINING BANK GUARANTEE ETC. FOR CONSTRUCTION BUSI NESS I.E. AGAINST BUSINESS PURPOSES. IF ANY LOAN HAS BEEN TA KEN AGAINST THESE FDRS FOR BUSINESS PURPOSES THEN SUCH EXPENDIT URE HAS TO BE ALLOWED. SINCE THERE WERE NO BUSINESS RECEIPTS IN THIS PARTICULAR YEAR I.E. WHY THE ASSESSING OFFICER HAS NOT ACCEPTE D THIS CONTENTION. BUT WE ARE OF THE OPINION THAT LOAN WAS OBTAINED FOR BUSINESS PURPOSES SUCH INTEREST HAS TO BE ALLOWED. ACCORDINGLY WE CONFIRM THE ORDER OF THE LD. CIT(A). FOLLOWING ABOVE WE DECIDE THIS ISSUE AGAINST THE RE VENUE. 82 IN THE RESULT, APPEAL OF THE REVENUE IN ITA NO. 1189/CHD/2012 IS DISMISSED. ITA NO. 1190/CHD/2012 REVENUE APPEAL 83 IN THIS APPEAL THE REVENUE HAS RAISED THE FOLLOW ING GROUNDS: 1 WHETHER THE LD. CIT(A) IS JUSTIFIED IN LAW AND ON F ACTS IN DELETING THE ADDITION OF RS. 17113602/- ON ACCOUNT OF GIFT RECEIVED FROM S.P. SINGH WHEN ASSESSEE FAILED TO PR OVE THE GENUINENESS OF THE GIFT? 2 WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) WAS JUSTIFIED IN ACCEPTING THE GENUINENESS O F A GIFT FROM NON RESIDENT INDIAN (NRI) BROTHER OF THE ASSESSEE, IN TOTAL DISREGARD TO THE RATIO LAID DOWN BY THE HON'BLE SUP REME COURT IN THE CASE OF CIT V P.R. GANAPATHY, (2012-TIOL-76-SC -IT) THAT THE ASSESSEE HAS TO SHOW ADEQUACY OF FUNDS IN THE HAND OF FOREIGN DONOR FOR AFORESAID GIFT DONATION? 3 WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CAS E ADVERSE AND REBUTTABLE PRESUMPTION SHOULD HAVE BEEN DRAWN A BOUT GENUINENESS OF THE GIFT WHEN THE ASSESSEE OVER A PE RIOD OF SEVEN ASSESSMENT YEARS HAS RECEIVED TOTAL SUM OF RS. 4864 8199/- CRORES AS GIFT AND ANOTHER SUM OF RS. 9480000/- AS LOAN? 4 WHETHER THE LD. CIT(A) ON THE FACTS AND CIRCUMSTA NCES OF THIS IS JUSTIFIED IN LAW AND ON FACTS IN DELETING T HE ADDITION OF RS. 5380,000/- U/S 68 ON ACCOUNT OF ALLEGED UNEXPLAINE D CASH CREDIT FROM SURINDER PAL SINGH? 5 WHETHER THE LD. CIT(A) IS JUSTIFIED IN LAW AND FA CTS IN DELETING THE DISALLOWANCE OF RS. 170889/- ON ACCOUN T OF EXPENSE ON IT PAID ON LOAN AGAINST FDR CLAIMED AGAINST INTE REST INCOME FROM OTHER SOURCES IN VIOLATION OF SECTION 57(III)? 84 GROUND NO. 1 TO 4 THIS ISSUE IS IDENTICAL TO T HE ISSUE RAISED BY THE REVENUE IN ASSESSMENT YEAR 2006-07 A S WELL AS EARLIER YEARS WHICH HAS BEEN DECIDED ABOVE IN PARA NO.77. FOLLOWING THE SAME WE DECIDE THIS ISSUE AGAINST THE REVENUE. 85 GROUND NO. 5 THIS ISSUE OF ALLOWING THE EXPEND ITURE OF INTEREST BY THE LD. CIT(A) IS IDENTICAL TO THE ISSU E RAISED IN GROUND NO. 4 OF ITA NO. 1189/CHD/2012 WHICH HAS BEE N 35 DECIDED BY ABOVE PARA NO. 81. FOLLOWING THE SAME W E DISMISS THE APPEAL OF THE REVENUE. 86 IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED AND BOTH THE APPEALS OF THE REVENUE ARE DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 15.7.2014 SD/- SD/- (SUSHMA CHOWLA) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 15.7.2014 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/THE DR