Appeal Details
Counselvise Citation
[2016] 131 COUNSELVISE.COM (IT) 0379 (ITAT-PUNE)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
3 year(s) 5 month(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
25-11-2016
Appeal Filed By
Assessee
Order Result
Partly Allowed
Bench Allotted
A
Next Hearing Date
04-10-2016
Assessment Year
2010-2011
Appeal Filed On
25-06-2013
Judgement Text
, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE . . , , ' # BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM . / ITA NOS.1311, 1313, 1315 TO 1317/PN/2013 '% % / ASSESSMENT YEARS : 2004-05, 2006-07 & 2008-09 TO 2010-11 SHRI BALKRISHNAN SHANMUGAM CHETTIAR ALIAS S. BALAN, 1133/5, NIRANKAR, FERGUSSION COLLEGE ROAD, SHIVAJINAGAR, PUNE 411 016 PAN : AALPC5158J . / APPELLANT V/S ACIT, CENTRAL CIRCLE-1(1), PUNE . /RESPONDENT . / ITA NOS.1306 & 1307/PN/2013 '% % / ASSESSMENT YEARS : 2009-10 & 2010-11 ACIT, CENTRAL CIRCLE - 1(1), PUNE . / APPELLANT V/S SHRI BALKRISHNAN SHANMUGAM CHETTIAR ALIAS S. BALAN, 1133/5, NIRANKAR, FERGUSSION COLLEGE ROAD, SHIVAJINAGAR, PUNE 411 016 PAN : AALPC5158J . /RESPONDENT / APPELLANT BY : SHRI PRAYAG JHA/ SHRI M.R. BHAGWAT / RESPONDENT BY : SHRI SUHAS S. KULKARNI / ORDER PER R.K.PANDA, AM : ITA NO.1311,1313,1315/PN/2013 FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE SEPARATE ORDERS DATED 28-02-2013 OF THE CIT(A)- II, PUNE RELATING TO ASSESSMENT YEARS 2004-05, 2006-07 & 2008-09 RESPECTIVELY. ITA NO.1316/PN/2013 FILED BY THE ASSESSEE AND ITA / DATE OF HEARING :05.10.2016 / DATE OF PRONOUNCEMENT: 25.11.2016 2 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 NO.1306/PN/2013 FILED BY THE REVENUE ARE CROSS APPEALS FO R A.Y. 2009-10. ITA NO.1317/PN/2013 FILED BY THE ASSESSEE AND ITA NO.1307/PN/2013 FILED BY THE REVENUE ARE CROSS APPEALS FO R A.Y.2010-11. ALL THE ABOVE CROSS APPEALS ARE DIRECTED AGA INST THE SEPARATE ORDERS DATED 28-02-2013 OF THE CIT(A)-II, PU NE. FOR THE SAKE OF CONVENIENCE ALL THESE APPEALS WERE HEARD TOGETHE R AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. ITA NO.1311/PN/2013 (A.Y. 2004-05) (BY ASSESSEE) : 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS AN INDIVIDUAL. A SEARCH ACTION U/S.132 OF THE I.T. ACT WAS CO NDUCTED IN THE RMD GUTKHA GROUP OF CASES ON 20-01-2010. WARRANT OF AUTHORIZATION U/S.132(1) OF THE I.T. ACT WAS EXECUTED IN TH E CASE OF THE ASSESSEE. IN RESPONSE TO NOTICE U/S.153A OF THE I. T. ACT THE ASSESSEE FILED HIS RETURN OF INCOME ON 31-12-2010 DISCLOSING TOTAL INCOME OF RS.1,13,88,080/- WHICH IS THE INCOME AS PER THE OR IGINAL RETURN OF INCOME FILED ON 01-11-2004. IN RESPONSE TO NO TICE U/S.143(2) AND NOTICE U/S.142(1) OF THE I.T. ACT THE ASSESS EE FILED VARIOUS DETAILS. IT MAY BE PERTINENT TO MENTION HERE THA T THE ASSESSMENT ORDER U/S.143(3) OF THE I.T. ACT WAS PASSED O N 15-12-2006 ACCEPTING THE RETURNED INCOME OF THE ASSES SEE AT RS.1,13,88,080/-. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO O BSERVED THAT THE ASSESSEE HAS CLAIMED DIVIDEND INCOME AS EXEMPT IN ACCORDANCE WITH THE PROVISIONS OF SECTION 10 OF THE I.T. ACT. SINCE TH E ASSESSEE HAS NOT ATTRIBUTED ANY EXPENDITURE TOWARDS E ARNING OF SUCH EXEMPT INCOME AND CONSIDERING THE FACT THAT THERE IS ALW AYS AN ELEMENT OF INDIRECT EXPENDITURE FOR EARNING SUCH EXEMPT INC OME 3 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 WHICH THE ASSESSEE HAS NEITHER IDENTIFIED NOR OFFERED TO TA X THE AO WAS OF THE OPINION THAT ASSESSEE HAS NOT MADE ADEQUATE DISALLOWANCE AS MANDATED U/S.14A OF THE ACT. HE, THEREFORE, ASKED THE ASSESSEE TO EXPLAIN AS TO WHY SUCH EXPENDITURE RELATABLE TO EXEMPT IN COME SHOULD NOT BE DISALLOWED UNDER THE PROVISIONS OF SECTION 1 4A R.W. RULE 8D OF THE I.T. RULES. REJECTING THE VARIOUS EXPLANAT IONS GIVEN BY THE ASSESSEE AND OBSERVING THAT THE AVERAGE INVEST MENT OF THE ASSESSEE DURING THE YEAR WAS AT RS.2.56 CRORES THE AO DISALLOWED AN AMOUNT OF RS.4,37,039/- U/S.14A OF THE I.T. ACT READ WITH RULE 8D. 4. THE AO FURTHER NOTED THAT DURING THE COURSE OF SEARCH ACTION A T THE RESIDENTIAL PREMISES OF SHRI MITHULAL AT BANGALORE ON 09-10-2009 A LARGE NUMBER OF INCRIMINATING DOCUMENTS WERE FOUND AND SEIZED. THESE DOCUMENTS WERE BELONGING TO M/S.DHARI WAL INDUSTRIES LTD. (IN SHORT M/S.DIL) AND WERE MAINTAINED B Y ONE SHRI SOHAN RAJ MEHTA, C&F AGENT OF M/S. DHARIWAL INDUSTRIES LTD., ON BEHALF OF M/S.DIL. WHEN CONFRONTED ON THIS ISSUE SHRI SOHAN RAJ MEHTA HAD CATEGORICALLY STATED IN HIS STATEMENT RECORD ED ON OATH U/S.132(4) THAT HE WAS EFFECTING UNACCOUNTED SALE OF GUTKHA ON BEHALF OF M/S. DIL AND THE SALE PROCEEDS WERE DEPLOYED AS PER THE DIRECTIONS OF SRI RASIKLAL M. DHARIWAL/SRI PRAKASH R. DHARIWAL. AMONG THE RECIPIENTS OF THE UNACCOUNTED SALE PROCEEDS, A SSESSEES NAME FIGURES PROMINENTLY AT SEVERAL PLACES. THE AO OBSER VED THAT AS PER THE SEIZED DETAILS BELONGING TO BUNDLE NO. A/M/08 SEI ZED VIDE PANCHANAMA DATED 09-10-2009 THE ASSESSEE HAD RECEIVE D AN AMOUNT OF RS.14,35,00,000/- FROM M/S. DHARIWAL INDUSTRIES LTD. THRO UGH SHRI SOHAN RAJ MEHTA, THE DETAILS OF WHICH ARE AS UNDER : 4 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 PAGE NO OF BUNDLE NO A/M/08 MONTH OF RECEIPT AMOUNT RECEIVED (RS.) ASSESSME NT YEAR (AY) AY - WISE AMOUNT RECEIVED (RS.) 42 54 SEP 2003 35 ,00,000 200 4 - 05 35 ,00,000 54 FEB 2006 2,00,00,000 2006 - 07 2,00,00,000 56 AUG 2007 5,00,00,000 2008-09 12,00,00,000 56 OCT 2007 7 ,00,00,000 TOTAL AMOUNT RECEIVED 14,35,00,000 5. HE NOTED THAT SHRI SOHAN RAJ MEHTA VIDE HIS STATEME NT U/S.132(4) OF THE I.T. ACT AS WELL AS THROUGH SUBSEQUENT S TATEMENTS DATED 15-10-2009, 21-10-2009 AND 10-08-2011 HAS CATE GORICALLY EXPLAINED THE MODUS OPERANDI OF UNACCOUNTED CASH GENERA TION AND DEPLOYMENT OF THE SAID UNACCOUNTED CASH WHICH IS CORROB ORATIVE OF AND IS CORROBORATED BY THE INNUMERABLE EVIDENCES CONTA INED IN THE SAID SEIZED DOCUMENTS SEIZED VIDE PANCHANAMA DATED 09- 10-2009. HE, THEREFORE, WAS OF THE OPINION THAT IN VIEW OF THE CATEGO RICAL ADMISSION BY SHRI SOHAN RAJ MEHTA WHILE EXPLAINING THE SAID DOCUMENTS THE ABOVE AMOUNT OF RS.14,35,00,000/- AS MENTIO NED IN THE SEIZED DOCUMENT WAS PAID BY M/S. DHARIWAL TO THE AS SESSEE THROUGH HIM AS PER THE INSTRUCTIONS RECEIVED FROM SRI RAS IKLAL M. DHARIWAL/SRI PRAKASH R. DHARIWAL. IN VIEW OF THE ABOVE F ACTS, THE AO ISSUED A SHOW CAUSE NOTICE ASKING THE ASSESSEE TO E XPLAIN AS TO WHY THE UNACCOUNTED CASH RECEIPTS OF RS. 35 LAKHS FOR THE YEAR UND ER CONSIDERATION FROM M/S. DHARIWAL INDUSTRIES LTD. THROUGH MR. SOHAN RAJ MEHTA SHOULD NOT BE TREATED AS HIS UNDISCLOSE D INCOME. THE RELEVANT SHOW CAUSE NOTICE DATED 09-12-2011 BY TH E AO READS AS UNDER : VIDE QUESTION NO.5 OF QUESTIONNAIRE DATED 12/09/2011 DULY SERVED UPON YOU ON 16/09/2011, YOU WERE ASKED TO CONFIRM AN D EXPLAIN THE DETAILS OF RECEIPT OF THE SAID AMOUNT. IN RESPONSE TO T HE QUERY RAISED VIDE SAID QUESTIONNAIRE, IT IS SUBMITTED BY YOU THAT YOU HA VE NOT RECEIVED ANY MONEY FROM M/S. DHARIWAL INDUSTRIES LTD. (DIL) THROUGH SHRI SOHAN RAJ 5 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 MEHTA, HOWEVER, FROM THE INQUIRIES AND THE DETAILS SU BMITTED BY YOU IN RESPONSE TO THE QUESTIONNAIRE, IT IS SEEN THAT YOU ARE A CLOSE FAMILY FRIEND AND A CLOSE BUSINESS ASSOCIATE OF SHRI RASIKLAL M. DHARIWA L, CHAIRMAN OF M/S DHARIWAL INDUSTRIES LTD. OVER MANY YEARS AND YOU HA VE TRANSACTED WITH M/S DIL DURING THE SAID PERIOD OF 2003 TO 2008. FURTHER, SHRI SOHAN RAJ MEHTA HAS ACCEPTED TO HAVE CARRIED OUT UNACCOUNT ED SALE OF GUTKA ON BEHALF OF M/S DIL BETWEEN THE PERIOD 2003 TO 2008 AS DEPICTED IN THE DOCUMENTS SEIZED (29 BUNDLES MARKED AS EXHIBIT A/M/01 T O A/M/29 SEIZED VIDE PANCHANAMA DATED 09/10/2009) SEIZED BY I NVESTIGATION WING OF BANGALORE. AS PER DETAILED ENQUIRY AND EVIDENCES G ATHERED BY THE DEPARTMENT DURING SEARCH, POST SEARCH ENQUIRIES AND DUR ING THE ASSESSMENT PROCEEDINGS, IT IS ESTABLISHED BEYOND REASONABLE DOUBT THAT THE ABOVE MENTIONED DOCUMENTS SEIZED FROM BANGALORE A RE ACTUAL DETAILS OF UNACCOUNTED SALES OF GUTKA BY M/S DHARIWAL INDUSTRIE S LTD. WHICH IT HAS CARRIED OUT THROUGH SHRI SOHAN RAJ MEHTA AND THA T, SHRI SOHAN RAJ MEHTA HAS MAINTAINED ALL THE DETAILS OF THESE UNACCOUN TED SALES, UNACCOUNTED SALE PROCEEDS GENERATED IN CASH AND THE U TILIZATION OF THE SAID CASH GENERATED. SHRI SOHAN RAJ MEHTA HAS ALSO ADM ITTED THAT HE HAS EARNED COMMISSION ON THIS UNACCOUNTED SALE OF GUTKA EFF ECTED BY HIM ON BEHALF OF M/S DIL AND HE HAS OFFERED THE SAID COMMISSION INCOME TO TAX WHILE FILING 153A RETURNS IN HIS CASE. 3. THEREFORE, IT IS CLEARLY ESTABLISHED THAT THE DOCU MENTS-FOUND AT BANGALORE ARE NOT DUMB DOCUMENTS AND THEY ARE AUTHEN TIC ACCOUNTS OF CASH GENERATION AND DEPLOYMENT OF CASH GENERATED OUT OF UNACCOUNTED SALE PROCEEDS OF RS. 345.75 CRS, BETWEEN THE YEAR 2003 TO 2008, WHICH WERE MAINTAINED BY SHRI SOHAN MEHTA ON BEHALF OF M/ S DIL. 4. IN VIEW OF THE FOREGOING FACTS, THE INCOME ARISIN G OUT OF THE UNACCOUNTED SALE TRANSACTIONS OF RS.345.75 CRS IS BEING TAXED IN THE HANDS OF M/S DIL FOR RESPECTIVE YEARS AND THE PAYMENT OF RS. 14,35,00,000/- CLEARLY REFLECTS THE CASH PAID TO YOU BY M/S.DHARIWAL INDUSTRIES LTD. (DIL) THROUGH SHRI SOHAN RAJ MEHTA . THIS IS A REVENUE RECEIPT WITHOUT CORRESPONDING LIABIL ITY AND HENCE, THE SAID AMOUNT OF RS. 14,35,00,000/- IS LIABLE FOR TAX. 5. THEREFORE, KEEPING IN VIEW THE PROVISIONS OF SECTIO N 132(4A) OF THE IT ACT AND IN VIEW OF THE ABOVE FACTS, AN AMOUNT OF 14, 35,00,000/- IS PROPOSED TO BE TAXED IN YOUR HANDS AS YOUR UNACCOUNTED INCOME FOR THE ASSESSMENT YEARS AS UNDER: ASSESSMENT YEAR AMOUNT (REPRESENTING YOUR UN DISCLOSED INCOME) PROPOSED TO BE TAXED (RS.) 2004 - 05 35 ,00,000/ - 2006 - 07 2,00,00,000/ - 2008 - 09 12,00,00,000/ - TOTAL 14,35,00,000/ - 6 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 6. KINDLY STATE THROUGH COGENT EVIDENCES, IF ANY EXPE NDITURE IS INCURRED BY YOU FOR EARNING THE SAID UNDISCLOSED INCOME OF RS.14 ,35,00,000/- , SO THAT SET OFF OF EXPENDITURE, IF ANY, AND IF PERMISSIBL E BY LAW, COULD BE GIVEN TO ARRIVE AT ACTUAL QUANTUM OF YOUR UNDISCLOSE D INCOME. . . . . . . . . . . 9. THEREFORE, YOU ARE REQUESTED TO SUBMIT YOUR SAY BY 16/12/2011 IN THE MATTER SO THAT THE SAME CAN BE CONSIDERED BY M E WHILE FINALIZING YOUR ASSESSMENT. KINDLY NOTE THAT THE MATTER IS TIME BAR RING AND GRANTING FURTHER TIME MAY NOT BE POSSIBLE. IF NOTHING IS HEARD FROM YOUR SIDE BY 16/12/2011, KINDLY NOTE THAT I MAY TAX THE E NTIRE AMOUNTS AS STATED ABOVE, AS YOUR UNDISCLOSED INCOME FOR THE RESPECT IVE YEAR (S) AND DISALLOW THE CLAIM OF DEDUCTION U/S.80IA(4)(III) OF T HE I.T. ACT FOR A.Y. 2009-10 AND A.Y. 2010-11. 10. SUCH AN ACT ON MY PART THOUGH JUDICIOUS AND AS PER THE PROVISIONS OF INCOME TAX ACT, 1961, MAY BE HIGHLY PREJUDICIAL TO YOUR INTERESTS. THEREFORE IT IS MY HUMBLE REQUEST THAT YOU FURNISH YOU R SAY SO THAT I CAN CONSIDER THE SAME BEFORE FINALIZING THE ASSESSMENT IN YOU R CASE. ACCORDINGLY, THIS LETTER MAY KINDLY TREATED AS LAST AN D FINAL OPPORTUNITY / FINAL SHOW CAUSE NOTICE IN THE MATTER INVOLVED. A FOR MAL NOTICE U/S 142(1) OF THE I. T. ACT IS ENCLOSED HEREWITH'. 6. THE ASSESSEE IN RESPONSE TO THE ABOVE QUESTIONNAIRE FLATLY DENIED TO HAVE RECEIVED ANY SUCH AMOUNT FROM M/S. DHARI WAL INDUSTRIES LTD. THROUGH SHRI SOHAN RAJ MEHTA. IT WAS SU BMITTED THAT HE IS NOT EVEN REMOTELY CONCERNED WITH ANY SUCH AMOUN T NOR RECEIVED ANY SUCH AMOUNT EITHER FROM SHRI SOHAN RAJ MEH TA OR FROM ANY OTHER PERSON. IT WAS SUBMITTED THAT HE HAS NOT S EEN, MET OR EVEN TALKED TO THE SAID SHRI SOHAN RAJ MEHTA SINCE LAST MORE THAN SIX YEARS. THEREFORE, THE QUESTION OF RECEIVING ANY AMOUN T FROM HIM ON THE ALLEGED INSTRUCTIONS OF THE PERSONS NAMED THEREIN DOES NOT ARISE. IT WAS ARGUED THAT MERELY BECAUSE HE IS HAVING FAMILY RELATIONSHIP WITH THE PERSONS NAMED SHRI RASIKLAL M. DHARIWA L AND PRAKASH M. DHARIWAL IS NEITHER SUFFICIENT NOR VALID IN LAW TO E STABLISH ANY CONNECTION WITH THE ALLEGED ENTRY IN THE STATEMENT O F ACCOUNT ALLEGEDLY MAINTAINED BY THE SAID SHRI SOHAN RAJ MEHTA. IT WAS SUBMITTED THAT NEITHER THE ALLEGED STATEMENT OF SAID SHRI SOHAN RAJ 7 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 MEHTA NOR THE ALLEGED ENTRY IN THE BOOKS ALLEGEDLY MAINTAINED BY SHR I SOHAN RAJ MEHTA CAN STAND SCRUTINY OF LAW. THE RELEV ANT REPLY OF THE ASSESSEE TO THE ASSESSING OFFICER WHICH HAS BEEN REPRODU CED BY THE ASSESSING OFFICER IN THE BODY OF THE ASSESSMENT ORDER READS AS UNDER : MY SUBMISSIONS RELATING TO THE SAID AMOUNT OF RS. 14,3 5,00,000/- (FOURTEEN CRORE THIRTY FIVE LAKH ONLY) ARE AS FOLLOWS: A. I AM NOT EVEN REMOTELY CONCERNED WITH ANY SUCH AMOUNT, N OR I RECEIVED ANY SUCH AMOUNT EITHER FROM SAID SOHAN RAJ MEHTA OR FROM ANY OTHER PERSON. I HAVE NOT SEEN, MET OR EVEN TALKED T O SAID MEHTA SINCE LAST MORE THAN 6 (SIX) YEARS. THE QUESTION HENCE, OF MY RECEIVING ANY AMOUNT FROM HIM ON THE ALLEGED INSTRUCTIONS OF THE PERSONS NAMED THEREIN, DOES NOT ARISE. B. THE GROUND OF I HAVING FAMILY RELATIONS WITH THE PERSONS NAMED RM DHARIWAL OR PRAKASH DHARIWAL IS NEITHER SUFFICIENT NOR VALID IN LAW TO ESTABLISH ANY CONNECTION WITH THE ALLEGED ENTRY IN THE STATEMENT OR ACCOUNT ALLEGEDLY MAINTAINED BY SAID MEHTA. C. NEITHER THE ALLEGED STATEMENT OF SAID MEHTA NOR THE ALLEGED ENTRY IN THE BOOKS ALLEGEDLY MAINTAINED BY SAID MEHTA CAN ST AND SCRUTINY OF LAW RELATING TO EVIDENCE. SUCH FLIMSY, UNSUBSTANTIATED AND UNCORROBORATED STATEMENT CANNOT BE USED IN LAW TO FASTEN ANY LIABI LITY OF ME. IT IS IMPERMISSIBLE IN LAW. D . THERE NEVER WAS ANY TRANSACTION RELATING TO GUT KHA BY AND BETWEEN MYSELF AND DHARIWAL INDUSTRIES LIMITED. I D ID NOT SELL ANY GOODS TO SAID MEHTA OR HIS PRINCIPALS NOR OFFERED ANY SERVIC ES. IT IS HENCE, FAR FETCHED TO CONNECT ME WITH THE SAID AMOUNT ON THE SOLITARY, UNSUBSTANTIAT ED, UNCORROBORATED AND FALSE STATEMENT OF SAID MEHTA. E. DURING THE SEARCH TAKEN PLACE AT MY RESIDENTIAL PREMISES BY INCOME TAX DEPARTMENT, NOTHING INCRIMINATING OF THE NATURE CONNECTING ME TO THE SAID AMOUNT COULD BE FOUND. F. I DENY THAT ANY SUCH AMOUNT WAS EVER RECEIVED B Y ME FROM SAID MEHTA AT ANYBODY'S INSTRUCTION. THE SAID AMOUNT HEN CE, CANNOT BE ADDED TO MY INCOME FOR THE PURPOSES OF LEVYING TAX. THE SAME IS ILLEGAL. G. THE RELIANCE ON THE ALLEGED STATEMENT AND THE AL LEGED ENTRY IN THE BOOKS OF SAID MEHTA TO CONNECT ME WITH THE SAID AMOUNT, IS ILLEGAL AND CONTRARY TO LAW RELATING TO EVIDENCE. ANY COPY OF SAID MEHTA'S STATEMENT ON OATH HAS NOT BEEN FURNISHED TO ME. MOREOVER, THE SA ID STATEMENT CANNOT BE TAKEN INTO ACCOUNT, AS NO OPPORTUNITY TO HIS CROSS EXAMINATION HAS BEEN GIVEN TO ME WHICH IS A SINE QUA NON. SUCH STATEMENTS THEREFORE, CANNOT BE LOOKED INTO BY THIS AUTHORITY (SEE AIR 1957 SC 882, HARTWELL V/S UTTAR PRADESH). H. IT IS THEREFORE, REQUESTED THAT (I) A COPY OF THE ALLEGED STATEMENT TAKEN ON OATH OF SAID SOHAN RAJ MEHTA BE SUPPLIED TO ME, AND (II) OPPORTUNITY TO CROSS EXAMINE SAID SOHAN RAJ MEHTA B E GRANTED TO ME. THIS IS A 'MUST' IN LAW. 8 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 I. THE SAID NOTICE ALSO CALLS UPON ME TO SUBMIT EXPENDITURE INCURRED FOR ALLEGEDLY EARNING THE SAID AMOUNT OF RS. 14,35,00,000/- (FOURTEEN CRORE THIRTY FIVE LAKH ONLY). HOWEVER, AS I DID NOT EARN OR RECEIVE ANY SUCH AMOUNT FROM SAID MEHTA, THE QUESTION OF INCURRING ANY EXPENDITURE BY ME THEREON, DOES NOT ARISE. THE SAID STATEMENT IS PRESUMPTIVE, AND IS DENIED BY ME. J. I AM NOT NOR WAS A RECIPIENT OF THE ALLEGED AMOUNT, AND THE SAME CANNOT BE ADDED TO MY INCOME, AND IF DONE, THE SAME WOULD BE ILLEGAL. 3. THE PROPOSAL TO ADD THE AMOUNTS MENTIONED IN THE SAID SHOW CAUSE NOTICE IS BASELESS ON FACTS, EVIDENCE AND IN LAW. I STRONGLY OBJECT TO ADDITION OF ANY SUCH AMOUNT. 4. THIS HAS BEEN FILED, WITHOUT PREJUDICE TO MY RIGHTS TO ADDUCE SUCH EVIDENCE AND SUBMISSIONS AS MAY BE FOUND NECESSARY. I ALSO RESERVE MY RIGHTS TO CROSS-EXAMINE THE WITNESS SOHAN MEHTA.' FURTHER, VIDE HIS LETTER DATED 17/12/2011, ASSESSEE SUBMITTED AS UNDER : 1. PLEASE REFER TO YOUR SHOW CAUSE NOTICE DATED 09- 12-2011 WHEREIN IT WAS STATED THAT I HAVE RECEIVED AN AMOUNT OF RS.14.35 CR. FROM DHARIWAL INDUSTRIES LTD,.THROUGH MR. SOHANRAJ MEHTA. 2. IN RESPONSE TO THIS NOTICE I HAVE ALREADY SUBMIT TED MY REPLY ON 16- 12-2011 TO YOU. 3. IN THE SAID NOTICE THERE IS A MENTION REGARDING THE STATEMENT OF MR. SOHANRAJ MEHTA RECORDED ON OATH. ON MY REQUEST MADE IN MY REPLY DATED 16. 12.2011, YOUR OFFICE SUPPLIED WITH THE COPIES OF THE STATEMENTS OF MR SOHANRAJ MEHTA. ON PERUSAL OF THE SAID STATEMENTS OF MR. SOHANRAJ MEHTA FOLLOWING FACTS ARE REVEALED. (A) SIX STATEMENTS OF MR SOHANRAJ MEHTA WERE RECORDED ON DA TES 9-10-09, 15-10- 09, 21-10-09,7-11-09,7-12-09 AND ON 10-8-2011. (B) IN THE STATEMENT RECORDED ON 10-8-2011 BEFORE DCIT, CENTRAL CIRCLE 2(2), BANGALORE, MR. MEHTA STATED IN ANSWER TO QUES TION NO.4, 'MR SANTHURAMAPPA, M/S TEJASWINI BUILDERS, MIS MANTRI D EVELOPERS AND OTHERS ARE THE PARTIES WITH WHICH M/S DIL OR ITS DI RECTORS HAD TRANSACTIONS . ... ' (C) MR. SOHANRAJ MEHTA DID NOT EVEN ONCE MENTIONED MY NAME IN ANY OF HIS STATEMENTS RECORDED IN THE YEAR 2009 & 2011. MY NAME DID NOT APPEAR ANYWHERE IN THE SAID STATEMENTS OF MR SOHANRAJ MEHT A. (D) I THEREFORE, ONCE AGAIN MAINTAIN THAT I WAS NE VER CONNECTED OR ASSOCIATED WITH THE GUTHKA BUSINESS OF DHARIWALLNDU STRIES LTD,.OR WITH MR SOHANRAJ MEHTA. I WAS NOT PARTY TO THE SALES EFF ECTED BY MR SOHANRAJ MEHTA. I DID NOT PROVIDE ANY SERVICES OR SOLD ANY G OODS TO M/S DHARIWAL INDUSTRIES LTD,. UNDER THE CIRCUMSTANCES MR. SOHANR AJ MEHTA PAYING ME SUCH A HUGE AMOUNT OF RS 14.35 CRORE DOES NOT ARISE AT ALL. (E) MOREOVER, THERE WAS NEVER ANY CAUSE OR OCCASION FOR SAID MR. MEHTA FOR ME TO HAVE RECEIVED ANY SUCH AMOUNT, MUCH LESS RS.1 4.35 CRORES FROM 9 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 DHARIWAL INDUSTRIES LIMITED THROUGH SAID MR. MEHTA. (F) UNDER THE CIRCUMSTANCES THE PROPOSAL TO TAX SU CH ALLEGED RECEIPT OF RS 14.35 CR, IN MY HAND AS UNACCOUNTED INCOME IS WITHOUT ANY BASIS AND ILLEGAL, L STRONGLY OPPOSE SUCH ACTION ON YOUR PART AND AGAIN REQUEST YOU NOT TO ADD SUCH AMOUNT AS UNACCOUNTED INCOME. 4. IN VIEW OF ABOVE, IT IS SUBMITTED THAT NO AMOUNT EI THER AS PROPOSED IN THE IMPUGNED SHOW CAUSE NOTICE OR OTHERWISE, BE ADDED T O MY INCOME. ' 7. HOWEVER, THE AO WAS NOT SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSEE. HE OBSERVED THAT THE EVIDENCES SEIZE D DURING THE SEARCH ACTION U/S.132 ARE SPEAKING DOCUMENTS AND PROVE D BEYOND REASONABLE DOUBT ABOUT THE ENTIRE UNACCOUNTED BUSINESS CHAIN OF M/S. DHARIWAL INDUSTRIES LIMITED REGARDING UNACCOUNTED PU RCHASE, UNACCOUNTED MANUFACTURE, UNACCOUNTED PACKING, UNACCOUNT ED PRINTING, CLANDESTINE REMOVAL OF GOODS, UNACCOUNTED SALE AND UTILISATION OF THE SALE PROCEEDS. THE ASSESSING OFFICER FURTH ER NOTED THAT ON THE BASIS OF THE IRREFUTABLE STRENGTH OF THE EVIDE NCES AS CONTAINED IN THE SAID SEIZED PAGES, AN ADDITION OF RS.205.70 CRORES HAS BEEN MADE IN THE CASE OF M/S. DHARIWAL INDUSTRIES LI MITED FOR A.Y. 2004-05 TO A.Y. 2008-09, AFTER ELABORATELY DISCUSSING A LL THE RELEVANT ISSUES. THE AO REPRODUCED IN THE ASSESSMENT OR DER, THE FINDINGS IN THE CASE OF M/S. DHARIWAL INDUSTRIES LIMITED WHE RE ADDITION OF RS.40.88 CRORES HAS BEEN MADE IN A.Y. 2004-05. HE OBSERVED THAT THE IRREFUTABLE EVIDENCE IN THE FORM OF SEIZE D DOCUMENTS FOUND AT THE PREMISES OF SHRI MITTULAL OF BANGALOR E COULD NOT BE NEGATED BY THE ASSESSEE. 8. AS REGARDS THE CONTENTION OF THE ASSESSEE THAT THE SEIZED DOCUMENTS WERE NOT SEIZED FROM HIM AND HE HAS NOTHING T O DO WITH SHRI SOHAN RAJ MEHTA AND THEREFORE, THE SEIZED DOCUMEN TS CANNOT BE TREATED AS EVIDENCE AGAINST HIM BEING A THIRD PARTY E VIDENCE IS 10 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 CONCERNED, THE AO NOTED THAT IF SUCH ARGUMENT OF THE AS SESSEE IS ACCEPTED THEN THE PROVISION OF EVIDENCE ACT AND SECTION 147, 158BD, 153C OF THE INCOME TAX ACT BECOME REDUNDANT. HE OBS ERVED THAT ALTHOUGH IT IS TRUE THAT THE STRICT RULES OF EVIDENCE ARE INAPPLICABLE TO THE PROCEEDINGS UNDER THE INCOME TAX ACT, 1961, HOWEVE R, THAT DOES NOT MEAN THAT PRINCIPLES OF EVIDENCE ACT ARE INAPPLICABLE T O THE PROCEEDINGS UNDER THE INCOME TAX ACT. RELYING ON THE PROVISION OF SECTION 110 OF INDIAN EVIDENCE ACT AND THE DECISION OF HO NBLE SUPREME COURT IN THE CASE OF CHUHARMAL VS. CIT REPORT ED IN 172 ITR 230 (SC) THE AO HELD THAT THIRD PARTY EVIDENCE HAS EVIDENTIARY VALUE AND THEREFORE THE SAME CAN BE USED IF CORROBORAT ED BY OTHER CIRCUMSTANTIAL EVIDENCE. SINCE IN THE INSTANT CASE THE EV IDENCE NOT ONLY PROVES THE AUTHENTICITY OF THE SAID SEIZED DOCUMENT BUT ALSO PROVES BEYOND REASONABLE DOUBT REGARDING ASSESSEES R OLE IN THE ENTIRE DESIGN, THE AO HELD THAT THE ASSESSEE HAS TO NEC ESSARILY FACE THE LAWFUL CONSEQUENCES OF HIS UNLAWFUL ACT IN THE FORM OF DEPLOYMENT OF UNACCOUNTED CASH OUTSIDE THE BOOKS. 9. SO FAR AS RELIANCE ON THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF LATA MANGESHKAR REPORTED IN 97 IT R 696 IS CONCERNED, THE AO OBSERVED THAT THE TRIBUNAL IN THE CASE OF LATA MANGESHKAR HAD OBSERVED THAT ON THE BASIS OF THE LEDGE R, WHICH CONTAINED PAYMENTS TO LATA MANGESHKAR, THERE WERE NO CORRESPONDING ENTRIES IN THE DAY BOOK. VASU FILMS ITSELF DID NOT RELY ON THE LEDGER IN THE COURSE OF ITS OWN ASSESSMENT PROCE EDINGS. FURTHERMORE, THE TESTIMONY OF TWO WITNESSES WAS FOUND UNRELIAB LE. IT IS UNDER THESE PECULIAR CIRCUMSTANCES THE SAID DECISION HA D BEEN RENDERED BY THE TRIBUNAL. WHEN DEPARTMENT FILED AN APPEA L AGAINST THE ORDER OF THE TRIBUNAL THE HONBLE BOMBAY HIGH COURT DISMISSED 11 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 THE APPEAL OF THE DEPARTMENT ON THE GROUND THAT NO SU BSTANTIAL QUESTION OF LAW WAS INVOLVED. HE ACCORDINGLY HELD THAT THE ABOVE DECISION RELIED ON BY THE ASSESSEE IS DISTINGUISHABLE AND NO T APPLICABLE TO THE FACTS OF THE PRESENT CASE. 10. THE AO FURTHER NOTED THAT ONE OF THE RAW MATERIAL S UPPLIER SHRI MALLIKARJUNA OF SHIMOGA IN HIS STATEMENT RECORDED U/S.132(4 ) ON THE DATE OF SEARCH HAS ACCEPTED TO HAVE SUPPLIED THE RAW M ATERIAL OUTSIDE THE BOOKS TO M/S.DIL AND CONFIRMED THE CONTENTS OF SEIZED DOCUMENTS. HIS STATEMENT HAS EVIDENTIARY VALUE AS IT WA S RECORDED U/S.132(4) THOUGH SUBSEQUENTLY HE HAS RETRACTED HIS STA TEMENT U/S.132(4). HE OBSERVED THAT THE SAID RETRACTION WAS IN LETTER ONLY AND NOT IN SPIRIT. ACCORDING TO THE AO SUCH RETRACTION IS SUPERFICIAL AND IS NOT BASED ON ANY EVIDENCE WHATSOEVER. HE OBSERVED THAT T HERE WAS NO PROOF OF ANY THREAT OR COERCION WHILE RECORDING T HE STATEMENT. THEREFORE, HE CONCLUDED THAT THE RETRACTION WAS AT THE BEHEST OF M/S. DIL ON WHICH THE ASSESSEE IS DEPENDANT. HE FURTHER NOT ED THAT THE ASSESSEE WHO IS ONE OF THE PROMINENT RECIPIENTS OF UNACCO UNTED SALE PROCEEDS OF M/S. DIL, IS A CLOSE FAMILY FRIEND AND BUSINESS ASSOCIATE OF SHRI RASIKLAL M. DHARIWAL, CHAIRMAN OF M/S. DIL. THE ASSES SEE HAD ADMITTED ON 20-01-2010 VIDE HIS STATEMENT RECORDED ON OATH THAT HE WAS A CUSTODIAN OF ABOUT RS.14 CRORES OF MONEY OF DHARIWAL AND THE SAID SEIZED DOCUMENT ALSO DEPICT THAT ABOUT RS.1 4.35 CRORES MONEY WAS HANDED OVER BY SHRI SOHAN RAJ MEHTA TO SHR I S. BALAN/HIS REPRESENTATIVES ON THE DIRECTIONS OF SHRI RASIKLAL M. DHARIWAL/SHRI PRAKASH R. DHARIWAL. 11. THE AO OBSERVED THAT ALTHOUGH THE ASSESSEE HAS RE TRACTED THE ABOVE STATEMENT IN NOVEMBER 2011 BY FILING AN AFFIDAVIT STA TING THAT 12 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 THE ADMISSION MADE BY HIM DURING SEARCH ACTION WAS NOT ACTUALLY MADE BY HIM AND HE HAS NOT STATED ANY SUCH FACT DURING THE SEARCH, HOWEVER, SHRI BALAN HAS ADMITTED THAT THE SAID STATEMENT BEARS HIS SIGNATURE. MOREOVER THE RETRACTION OF THE ASSESSEE IS N OT MADE IMMEDIATELY AFTER THE SEARCH AND IT WAS MADE ALMOST AFTER 22 MONTHS AFTER THE SEARCH. FURTHER THE ASSESSEE COULD NOT PROV E ANY ELEMENT OF THREAT OR COERCION WHILE RECORDING THE STATEMENT U/S.1 32(4). THE AO FURTHER NOTED THAT THE SAID RETRACTION OF THE ASSESS EE HAS COME ONLY IN NOVEMBER 2011., M/. DIL COULD INTUITIVELY ANTICIPATE AND COULD QUOTE THE SAID RETRACTION IN ITS WRITTEN SUBMISSIONS AS EARLY AS 01-09-2011. THIS ACCORDING TO THE AO PROVES THAT THE SAID RETRACTION WAS MADE BY THE ASSESSEE ONLY AT THE BEHEST OF M/S. D IL, AWAY FROM THE IRREFUTABLE EVIDENCES CONTAINED IN THE SAID SEIZED DOCU MENTS AND TRY TO SAVE HIMSELF AND M/S. DIL FROM THE LAWFUL CONSEQUENCES OF THIS UNLAWFUL ACT. RELYING ON THE DECISIONS OF THE HONBLE SUPRE ME COURT IN THE CASE OF CIT VS. DURGA PRASAD MORE REPORTED IN 82 ITR 540, SUMATI DAYAL VS.CIT REPORTED IN 214 ITR 801 AND CIT VS . MOHAN KALA REPORTED IN 291 ITR 278, THE AO MADE ADDITION OF RS.3 5 LAKHS AS UNDISCLOSED INCOME OF THE ASSESSEE FOR THE IMPUGNED AS SESSMENT YEAR. SIMILARLY AN AMOUNT OF RS.2 CRORES WAS MADE IN A.Y. 2 006-07 AND RS.12 CRORES WAS MADE IN A.Y. 2008-09. 12. BEFORE CIT(A) IT WAS ARGUED THAT THE ASSESSMENT ORDE R WAS RECEIVED ON 03-01-2012 WHEREAS THE SEARCH TOOK PLACE ON 20-01-2010. IT WAS ARGUED THAT AS PER SECTION 153B T HE AO SHALL MAKE AN ORDER OF ASSESSMENT WITHIN A PERIOD OF 21 MONTH S FROM THE END OF THE FINANCIAL YEAR IN WHICH THE LAST OF THE AUTHORISA TION FOR SEARCH U/S.132 WAS EXECUTED. IN VIEW OF THE SAID PROVISION, THE ORDE R SHOULD HAVE BEEN SERVED ON THE ASSESSEE BEFORE 31-12-2011. 13 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 13. THE DISALLOWANCE U/S.14A WAS ALSO CHALLENGED ON THE GRO UND THAT THE AO HAS MADE THE DISALLOWANCE BY INVOKING PROVIS IONS OF RULE 8D WHICH WAS NOT ON THE STATUTE BOOK IN A.Y. 2004-0 5. THEREFORE, THE ADDITION IS UNTENABLE IN LAW. EVEN OTHERWISE ALSO, IT IS EXCESSIVE BECAUSE EXPENDITURE OF SUCH MAGNITUDE IS NOT R EQUIRED TO BE INCURRED FOR EARNING DIVIDENDS WHICH ARE DIRECTLY CRED ITED IN ASSESSEES BANK ACCOUNT BY ECS. IT WAS ALSO ARGUED T HAT THE AO HAD NOT PROVED ANY NEXUS BETWEEN THE TAX FREE INCOME AND THE EXPENDITURE INCURRED BY THE ASSESSEE. RELYING ON THE D ECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF GODREJ & BOYCE MANUFACTURING COMPANY LTD. VS. DCIT REPORTED IN 328 ITR 81 AND VARIOUS OTHER DECISIONS IT WAS SUBMITTED THAT RULE 8D CAN NOT BE APPLIED TO THE IMPUGNED ASSESSMENT YEAR. THE ASSESSEE WITHOUT PREJUDICE RELYING ON THE DECISION OF KOLKATA BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS. PHILLIPS CARBON BLACK LTD. REPORTED IN 133 ITD 189 (KOL.)(TM) ARGUED THAT THE TRIBUNAL IN THE SAID DECISION HAS HELD THAT 1% OF THE INCOME CAN BE CONSIDERED AS REASONABLE D ISALLOWANCE U/S.14A. 14. SO FAR AS ADDITION OF RS.35 LAKHS AS UNDISCLOSED INCOME IS CONCERNED IT WAS ARGUED THAT THE ADDITION ON THIS ACCOU NT WAS AGAINST THE PRINCIPLES OF NATURAL JUSTICE AS THE COPY OF T HE STATEMENT U/S.132(4) RECORDED OF SHRI SOHAN RAJ MEHTA WAS NOT SUPP LIED TO THE ASSESSEE AND OPPORTUNITY TO CROSS EXAMINE SHRI SOHAN R AJ MEHTA WAS ALSO NOT GIVEN. IT WAS ARGUED THAT THE AO IS PRES UMING THE RECEIPT MERELY BECAUSE THE ASSESSEES NAME FIGURES IN THE LOOSE PAPERS. HOWEVER, NOT A SHRED OF EVIDENCE THAT THE AMOUN T WAS ACTUALLY PAID TO THE ASSESSEE IN THE FORM OF ANY IDENTIFICAT ION RELATING 14 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 TO HIM OR ANY EXPRESS OR IMPLIED ACKNOWLEDGEMENT OF RECEIP T OF THE IMPUGNED MONEY WAS FOUND. IT WAS ARGUED THAT THE LOOSE PAPERS SHOW THAT THE ALLEGED PAYMENTS ARE NOT DIRECTLY MADE T O THE ASSESSEE BUT TO SOME OTHER PERSON LIKE NAGRAJ OR MR. RAJA DATTA RECEIVING ON BEHALF OF THE ASSESSEE. THE ASSESSING OFFICER HAS NOT RECO RDED THEIR STATEMENTS NOR INVESTIGATED TO VERIFY THE CORRECTNESS OR OTHERWISE OF THE ASSERTIONS IN THE SEIZED PAPER. THE RELATIONSHIP BETW EEN THE PERSONS AND THE ASSESSEE HAS NOT BEEN BROUGHT ON RE CORD. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE HIMSELF HAS BEEN SUB JECTED TO SIMULTANEOUS SEARCH AND NO EVIDENCE OF SUCH HUGE SUM OF MONEY WAS FOUND. IT WAS CONTENDED THAT THE AOS RELIANCE ON THE ASSESSEES STATEMENT ABOUT HIM BEING CUSTODIAN OF THE MONEY BELONGIN G TO DHARIWAL GROUP IS MISCONCEIVED AS THAT STATEMENT WAS RE CORDED U/S.133A IN THE CASE OF A SURVEY ACTION AGAINST SAI CONST RUCTION PVT. LTD. AND IT IS WELL SETTLED THAT A STATEMENT U/S 133A UNLIKE 132(4) DOES NOT BIND THE ASSESSEE AND CAN BE RETRACTED BY H IM AT ANY TIME. IT WAS ARGUED THAT THE ASSESSEE IN HIS AFFIDAVIT HAS CLAR IFIED THE RETRACTION. IT WAS SUBMITTED THAT THE ASSESSEE DOES N OT UNDERSTAND ENGLISH LANGUAGE VERY WELL IN WHICH THE STATEMENT WAS RECO RDED. THE ASSESSEE ALSO TRIED TO EXPLAIN THAT HAD HE RECEIVED SUCH HUGE AMOUNT OF MONEY TOTALLING TO RS. 14.35 CRORES, THE SAME WOULD HA VE BEEN UTILISED IN SOME FORM OR OTHER AND THE SAME WOULD HAVE SU RFACED IN THE SEARCH ACTION CONDUCTED IN HIS CASE. HOWEVER, NO UN EXPLAINED ASSET, INVESTMENT OR EXPENDITURE WAS FOUND AS EVIDENCED BY THE ASSESSMENT ORDER PASSED U/S 153A. THERE WAS NO ADDITION ON SUCH ACCOUNT EXCEPT CASH OF RS. 33 LAKHS. THE ASSESSEE ALSO S UBMITTED THAT HE HAD CATEGORICALLY DENIED ANY BUSINESS RELATIONSHIP WITH DHARIWAL GROUP IN HIS STATEMENT RECORDED U/S 132(4) ON 2 0-01-2010 15 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 AND THAT HE DID NOT KNOW MR. SOHAN RAJ MEHTA. THE ASSE SSEE FURTHER STATED THAT THE CONSPIRACY THEORY IS TOTALLY A FIGMENT OF THE ASSESSING OFFICER'S IMAGINATION. REGARDING THE ASSESSING OFFICER'S ACTION OF TAXING THE RECEIPTS, THE ASSESSEE STATED THAT IT IS NOT TO BE BASED ON PRESUMPTION AND GUESS WORK AND HAS TO BE BASED ON CO NCRETE EVIDENCE . THE ASSESSEE ALSO STATED THAT THE ENTIRE ADDITION IS BA SED UPON THE STATEMENT OF A THIRD PARTY WHICH TOTALLY LACKS CREDIBILITY A ND THAT TOO AGAINST THE PRINCIPLES OF NATURAL JUSTICE OF NOT ALLOWING CROSS EXAMINATION OF SOHAN RAJ MEHTA. WITHOUT PREJUDICE TO THE ABOVE, THE ASSESSEE SUBMITTED THAT THE MONEY RECEIVED DOES NOT C ONSTITUTE HIS INCOME AS INCOME REQUIRES A SOURCE AND MERE RECEIPT CAN NEVER CONSTITUTE INCOME. 15. HOWEVER, THE CIT(A) ALSO WAS NOT SATISFIED WITH THE EXPLA NATION GIVEN BY THE ASSESSEE. SO FAR AS THE VALIDITY OF THE ASSE SSMENT U/S.153A IS CONCERNED THE LD.CIT(A) RELYING ON VARIOUS DEC ISIONS DISMISSED THE CONTENTION OF THE ASSESSEE ON THE GROUND THAT SEARCH ACTION AGAINST THE ASSESSEE WAS CARRIED OUT ON 20-01-2 010 AND THE ASSESSMENT ORDER HAS BEEN PASSED ON 30-12-2011. THE RETURN IN RESPONSE TO NOTICE U/S.153A DATED 14-09-2010 WAS FILED O N 31-12-2010 WHICH MEANS THAT THE ORDER HAS BEEN MADE PRIOR TO THE END OF 21 MONTHS PERIOD AS ENVISAGED IN SECTION 153(1)(A) O F THE ACT. HE OBSERVED THAT THE ASSESSEE FAILED TO DEMONSTRATE DU RING THE APPEAL PROCEEDINGS THAT THE SAID ASSESSMENT ORDER HAS NOT BEEN MADE PRIOR TO 30-12-2011 AS NO CONCRETE EVIDENCE IN TH IS REGARD WAS BROUGHT ON RECORD TO PROVE THE GROUND RAISED BY THE ASSESSEE. THE ASSESSEE ALSO COULD NOT PROVE ANY SUCH MATERIAL ON RECO RD SO AS TO JUSTIFY THE DESPATCH OF THE ORDER TO HAVE BEEN MADE AFTER 30-12-2 011. 16 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 16. AS REGARDS THE VALIDITY OF ASSESSMENT U/S.153A IN ABSE NCE OF ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARC H IS CONCERNED HE HELD THAT THE REQUIREMENT OF MAKING ASSESSMENT/REASSESSMENT U/S.153A HAS NO RELATION WITH T HE NATURE OF INCRIMINATING MATERIAL FOUND OR NOT FOUND IN THE COURSE OF SEARCH. ACCORDING TO HIM THE PROVISIONS OF SECTION 153A REQUIRES T OTAL INCOME FOR PRECEEDING SIX YEARS TO BE ASSESSED OR REASSESSED IN PURSUANCE TO NOTICE U/S.153A. TOTAL INCOME WILL INCLUDE ANY KIND OF INCOME A ND IT CANNOT BE RESTRICTED TO UNDISCLOSED INCOME OR ESCAPED IN COME. IN VIEW OF THE ABOVE, HE DISMISSED THE ABOVE CONTENTION OF TH E ASSESSEE AS MISPLACED AND NOT TENABLE. 17. SO FAR AS THE MERIT OF THE CASE IS CONCERNED HE ALSO DISMISSED THE SAME AND UPHELD THE ADDITION MADE BY THE AO. WHILE D OING SO, HE OBSERVED THAT SHRI SOHAN RAJ MEHTA, C&F AGENT OF M/ S. DHARIWAL INDUSTRIES LTD. IN HIS STATEMENT U/S.132(4) HAS EXPLAINED TH E ENTIRE MODUS OPERANDI OF UNACCOUNTED GENERATION OF CASH AND ALS O REGARDING ITS DEPLOYMENT WHICH IS CORROBORATIVE AND ALSO CORROBORATED BY INNUMERABLE EVIDENCE CONTAINED IN THE SE IZED DOCUMENTS. FURTHER AFTER DECODING OF THE SEIZED DOCUMEN T BY SHRI SOHAN RAJ MEHTA IT HAS BEEN EXPLAINED THAT ON THE BAS IS OF THE SIGNED CHITS EITHER BY SHRI RASIKLAL M. DHARIWAL/SHRI PRAKASH M. DHARIWAL, SHRI SOHAN RAJ MEHTA USED TO MAKE PAYMENTS T O THE PARTIES WHOSE NAMES WERE MENTIONED ON THE CHITS. THE A O HAS POINTED OUT TO THE SIGNED CHIT DATED 14-08-2007 BY SH RI PRAKASH M. DHARIWAL WHICH APPEARS ON PAGE 44 OF THE LOOSE PAPER BU NDLE NO.A/M/29 WHERE THE AMOUNT MENTIONED IS RS.5 LAKHS FOR W HICH DECODING HAS BEEN EXPLAINED BY SHRI SOHAN RAJ MEHTA AS RS. 5 CRORES AND THE PAYMENTS RELATED TO THE SAID INSTRUCTION S ON THE CHITS 17 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 HAVE BEEN MADE BY WAY OF NUMBER OF INSTALMENTS ON DIFFEREN T DATES. THE AO HAS ALSO FOUND AND NOTED THAT THE ASSESSEE HA S BEEN ASSOCIATED WITH M/S. DHARIWAL INDUSTRIES LTD FOR A LONG TIM E AND THE ASSESSEES NAME APPEARING IN THE SEIZED DOCUMENT TALLIED WITH THE REGULAR BUSINESS ASSOCIATION WITH M/S. DHARIWAL INDUSTRIES LTD. AND IF TEST OF HUMAN PROBABILITIES IS APPLIED TO THE FACTS OF THE C ASE IT BECOMES EVIDENT THAT ASSESSEE WAS PART OF THE ENTIRE S CHEME OF UNACCOUNTED BUSINESS CHAIN OF M/S. DHARIWAL INDUSTRIES L TD. WHILE UPHOLDING THE ADDITION MADE BY THE AO, THE LD.CIT(A) FROM P ARA 5.7 OF HIS ORDER OBSERVED AS UNDER : 5.7 IT IS AN UND I SPUTED FACT THAT THE SEIZED DOCUMENTS AND THE LOOSE PAPERS NO 34 AS CONTAINED IN BUNDLE A/M/8, A/M/29 FOUND AND SEIZED DURING THE COURSE OF SEARCH AND SEIZURE ACTION CARRIED OUT IN THE CASE OF SOHANRAJ MEHTA C & F OF DHARIWAL GROUP CONTAINED TH E DETAILS OF THE PAYMENTS OF UNACCOUNTED MONEY TO THE PERSONS WHOSE NAME S ARE APPEARING ON THE SAID DOCUMENT . THE NAME OF THE ASSESSEE APPEARS IN THE DOCUMENTS SEIZED DURING THE SEARCH ACTION . THE SEIZED DOCUMENT GIVES A VERY DETAILED AND MINUTE NOTINGS OF THE TRANSA CTIONS ENTERED INTO BY THE DHARIWAL GROUP I . E . M/S DIL IN THE ENTIRE KARNATAKA REGION, THIS BEING SO, BECAUSE SHRI . SOHANRAJ MEHTA WAS THE C & F OF THE RMD GUTKA GROUP , CERTAINLY ONE OF THE MOST IMPORTANT PERSONS RELATED TO THE MARKETING OF THE PRODUCT OF THE DHARIWAL GROUP. THE SAID PERSON HAVING ADMITTED TO HAVE WRITTEN THE AFORESAID DOCUMENT IN H IS OWN HANDWRITING LENDS CREDIBILITY WHEREBY THE DOCUMENT SEIZED ASSUMES A MUCH GREATER VALUE THAN WHAT IT WOULD HAVE BEEN OTHERWISE. THUS , THE ADMISSION OF SHRI . MEHTA OF HAVING PAID THE UNACCOUNTED AMOUNT OF RS. 35 , 00 , 000/- CRORES TO THE ASSESSEE DURING THE YEAR UNDER CONSIDERATI ON CANNOT BE W I SHED AWAY L IGHTLY . THE ASSESSEE AND THE DHARIWAL GROUP BOTH ARE BASED AT PUNE AND BOTH ARE KNOWN AND R EPUTED BUSINESS PERSONS IN THE AREA. IN FACT IN THE COURSE OF THE STATEMENT U/S 131 O F SHR I . RMD ON 23-1- 2010 , IT WAS STATED I N ANS . TO Q . NO 7 THAT MANIKCHAND GROUP (DIL) WAS IN PARTNERSHIP WITH SHRI . S . BALAN , THE ASSESSEE WITH RESPECT TO PROJECT ' SAI RADHE ' AT RAJA BAHADUR MILLS COMPOUND, KENNEDY ROAD , PUNE AND ALSO FOR A PURCHASE OF PLOT AT BALEWADI WHICH CLEARLY ESTA BLISH A LINK OF THE ASSESSEE WITH THE DHARIWAL GROUP . THE ASSESSEE HAS BEEN HARPING ON THE FACT THAT APART FROM THE DOCUMENTS SEIZED DURING SEARC H NO OTHER PAPER/EVIDENCE HAD BEEN FOUND WHICH COULD SHOW THAT THE ASSESSEE HAD RECEIVED THE MONEY . THIS ALONE IS NOT RELEVANT IN THE PRESENT CONTEXT . THIS IS BECAUSE THE SEIZED DOCUMENT ITSELF AND MORE SO BE CAUSE OF THE NATURE OF THE ENTRIES CONTAINED THEREIN DOES NOT MAKE IT AS A ' DUMB DOCUMENT '. THE AUTHOR OF THE SAID SEIZED DOCUMENTS SHRI SOHAN R AJ MEHTA , C&F AGENT OF THE DHAR I WAL GROUP AT BANGALORE HAS ADMI T TED TO HAVE WR I TTEN THE SAID DOCUME N T IN H I S OWN HANDWR I T I NG A N D ALSO EXPLAINED THAT MOST OF THE PAGES TO HAVE BEEN WRITTEN IN ' MARWADI ' LANGUAGE MATCHING W I TH THE STATEMEN T AND THE WOR DI NGS ON THE SEIZED 18 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 DOCUMENT . IT WAS ALSO ADMITTED THAT THEY REP R ESENTED PU RC H ASE AND SALES OF RMD GUTKHA DURING FINANCIAL YEARS 2003-04 TO FEBR UARY 2008. SO FAR AS THE NOTINGS ON PAGE 34 IS CONCERNED , SHRI MEHTA HAD SPECIFICALLY STATED THAT IT WAS CONSOLIDATED WORKING OF STOCK OF RMD GUTKHA RECEIVED FROM THE COMPANY M/S DHARIWAL INDUSTRIES LTD. , WHOSE FACTORY WAS AT SINGSANDRA , BANGALORE FOR THE PERIOD APRIL 2003 TO AUGUST 2006. THE C & F AGENT OF THE DHARIWAL G R OUP , SHRI MEHTA ALSO EXPLAINED THAT THE FIGURES MENTIONED ON THE LEFT SIDE OF THE PAGE 34 REPRESENTE D THE STOCK OF RMD GUTKHA BOXES RECEIVED FROM THE COMPANY AND ITS VA L UE WAS ALSO MENT I ONED THERE I N. I T WAS FURTHER EXP L AINED BY SHRI MEHTA THA T THE TOTA L O F SUCH STOCK RECEIVED FROM THE COMPANY AS PER THE SHEET W ORKED OUT TO RS. 2 , 18 , 00 , 91 , 198/- . IT WAS ALSO STATED DURING THE 132(4) STATEMENT RECORDED ON 10- 1 0-2009 THAT THE PAYMENTS RECEIVED FROM VARIOUS DISTR I BUTORS , WHOLESALERS AND RETA I LERS FOR THE SUPPLY OF RMD GUTKHA STOCK AND THEIR NAMES AND THE AMOUNTS RECE I VED D U RING APRIL 2003 TO AUGUST 2006 WERE MENTIONED. SHRI MEHTA ALSO STATED REG ARDING THE NOTINGS ON PAGE 34 AND OTHER DOCUMENTS THAT THE VARIO US EXPENDITURE INCURRED IN CONNECTION WITH THE BUSINESS WAS ALSO WRITTE N AND ALSO ADMITTED THAT THE MONEY SO RECEIVED HAD BEEN SENT TO HIS 'SETH' FROM TIME TO TIME AND THE MONEY WAS HANDED OVER TO THE PE RSONS AS PER THE DIRECTIONS OF MR . RASIKLAL MANIKCHAND DHARIWAL AND HIS SON MR. PRAKASH, WHOM HE REFERRED TO AS 'SETH'. THE C&F AGENT, SHRI M EHTA REGARDING THE ENTRY MENTIONED ON THE LOWER LEFT SIDE OF THE PAGE 3 4 BEGINNING WITH '31.08.2006' STATED THAT HE HAD PREPARED THE STATEMEN T AS ON 31.08.2006 TO SUBMIT THE ACCOUNT FOR THE 'SETH SAHEB' . HE CLARIFIED FURTHER THAT THE PERSONS REFERRED TO AS 'SETH SAHEB' WERE MR . RASIKLAL MANIKCHAND DHARIWAL OF DHARIWAL INDUSTRIES LTD. AND HIS SON MR. P RAKASH R . DHARIWAL AND THAT THE AFORESAID ACCOUNT ON PAGE 34 W AS SUBMITTED TO MR. PRAKASH . IN THE DETAILED STATEMENT, SHRI MEHTA HAS CLEARLY OUT LINED THE ENTIRE MODUS OPERANDI OF THE BUSINESS AND THE MANNE R IN WHICH THE INSTRUCTIONS WERE RECEIVED BY HIM FROM THE DHARIWALS F ATHER AND SON DUO WHEREIN IT WAS STATED THAT THEY SENT HIM A SLIP OF PAPER OR CHIT INDICATING THE AMOUNT AND THE NAME OF THE PERSON TO WHOM THE AMOUNT NEEDED TO BE PAID IRRESPECTIVE OF THE FACT WHETHER S HRI MEHTA KNEW THE PERSON PERSONALLY OR NOT AS PER THE STANDING INSTRUCTION S FROM MR . RASIKLAL AND HIS SON MR . PRAKASH R . DHARIWAL TO HANDOVER THE MONEY TO THE BEARER OF THE SLIP AND THE MONEY WAS PAID OUT OF THE COLLECTIONS RECEIVED FROM THE DISTRIBUTORS TOWARDS UNACCOUNTED SALE S . IN THE STATEMENT U/S 132(4) A SUM OF RS. 2 CRORES WAS OFFERED AS INCOME AS COMMISSION ON THE UNACCOUNTED TURNOVER OF RMD GUTKA O F M/S DIL BY SHRI MEHTA. THE AFORESAID FACTS WERE AGAIN CONFIRMED BY SHRI SOHANRAJ MEHTA IN HIS STATEMENT RECORDED U/S 131 ON 15.10 . 2009 AND 21.10.2009, WITH RESPECT TO THE NOTINGS MADE ON PAGE 34 OF THE EX HIBIT A/M/8 AND OTHER RELATED DOCUMENTS. THUS, THE PAYMENT MADE TO TH E APPELLANT HAS BEEN CONFIRMED BY SHRI MEHTA TIME AND AGAIN DURING THE COURSE OF THE STATEMENT RECORDED BOTH DURING THE PRE AND POST SEARCH ACTION. THE INFERENCE THUS DRAWN BY THE ASSESSING OFFICER IN TAXING THE AMOUNT IN THE HANDS OF THE APPELLANT IS, THEREFORE, BASED ON A SO UND FOOTING AND, MOREOVER, IN SUCH SITUATION WHERE THE ENTIRE DEALING ITSELF IS UNDISCLOSED, THE BOOKS OF ACCOUNT AND OTHER RELATED DOCUMENTS ARE GENERALLY NOT MAINTAINED AND CORROBORATIVE EVIDENCES HAS TO BE SEEN WITHIN THE MATERIALS FOUND AND SEIZED AND THE INFERENCE DRAWN B ASED ON THE STATEMENT RECORDED. THE C & F AGENT SHRI SOHANRAJ MEHTA HAD A LONG ASSOCIATION WITH THE DHARIWALS AND BECAUSE OF SUCH CLOSE ASSOCIATION THE ENTIRE C & F OF RMD GUTKA FOR KARNATAKA REGION WAS G IVEN TO HIM. MOREOVER, THE MAGNITUDE OF THE TRANSACTION WHICH WAS HANDLED BY SHRI 19 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 MEHTA AND THE AMOUNT OF COMMISSION EARNED AND ALSO D I SCLOSED AS INCOME ON SUCH TRANSACTION CLEARLY INDICATES THAT THE STATEMENT GIVEN WERE NOT UNTRUE AND THE SAME COULD BE BELIEVED. THE CONTENTION OF THE ASSESSEE THAT THERE BEING NO EVIDENCE THAT THE DHARIWAL GROUP HAD PAID MONEY TO THE ASSESSEE THUS GETS ANSWERED . THE RECORDS OF SUCH UNDISCLOSED ACTIVITY ARE MAINTAINED IN THE MANNER IN WHICH THE DOCUMENT AND LOOSE PAPERS HAVE BEEN FOUND AND SEIZED I N THE PRESENT CASE AND NO REGULAR BOOKS OF ACCOUNTS ARE MAINTAINED F OR SUCH ACTIVITY. THE DETAILED STATEMENT GIVEN BY SHRI MEHTA EXPLAININ G THE ENTRIES OF THE DOCUMENT SEIZED MAKES THE DOCUMENT A SPEAKING ONE AND , THEREFORE , THE INFERENCE DRAWN BY THE ASSESSING OFFICER IN TAXING THE AMOUNT PRIMA FACIE APPEAR TO HAVE BEEN RIGHTLY DONE. 5.8 THE CONTENTION OF THE APPELLANT THAT THE ADDITI ON MADE BY T H E ASSESSING OFFICER CANNOT BE SAID TO BE MADE IN ACCORDANC E WITH LAW I S NOT COR R EC T AS THE ADDITION MADE IS BASED NOT ON A MEANINGLESS AN D USELESS PIECE OF PAPER AS EVIDENT FROM THE DISCUSS I ON MADE ABOVE WITH RESPECT TO THE NOTINGS MADE AND T HE SAID DOCUMENT CAN BE FACTUALLY LINKED TO THE STATEMENTS GIVEN BY A CLOSE CON FI DANTE OF THE DHARIWAL GROUP . LOOSE PAPERS UNLIKE BOUND BOOKS GENERALLY CANNOT BE A BASIS FOR READY REFERENCE OF CONCEALMENT OF FIGURES FOUND IN T HEM, BUT IT CANNOT BE SAID THAT THEY ARE TOTALLY IRRELEVANT, IF THEY HAVE SOMETHING TO CONNECT THEM WITH ASSESSEE ' S BUSINESS . THE INFERENCE HAS TO BE ON FACT . THE CONTENTS FOUND ON THE SEIZED DOCUMENTS AND PAPERS WHERE APPELLANT'S NAME APPEARS, RAISES A PRESUMPTION OF LEGALITY OF DOCUMENTS FOUND AND THAT WOULD MEAN THAT THEY CA N NOT BE IGNORED TO ARR I VE AT A CONCLUSION . THE AU T HOR OF THE SA I D 'PAPERS ' HAS ALREADY ADMITTED IN CLEAR TERMS THAT SAID DOCUMENT WAS I N HIS OWN HANDWRITING AND THE SAID PERSON IS ALSO ONE OF THE PARTIES TO THE TR ANSACTION THROUGH WHOM THE PAYMENTS WERE MADE T O SEVERAL PERSONS . THESE FACTS ARE UND I SPUTED. THEREFORE , THE SAID DOCUMENT IS OF GREAT EVIDENTIARY VALUE AND THE ASSESSING OFFICER HAS RIGHTLY MADE IT AS A BASIS FO R MAKING ADDITION DURING THE ASSESSMENT PROCEEDINGS. THE ASSESSING OF FICER IS AUTHORIZED TO ASSUME ALL THE CONTENTS OF THE PIECE OF PAPER FOUND IN THE COURSE OF SEARCH AND SEIZURE ACTION ARE TRUE AND CORR ECT AND THAT SUCH POWER OF ASSUMPTION CAN BE EXERCISED NOT ONLY IN SEARCH ACTION U/S 132 BUT ALSO UNDER SURVEY ACTION U/S 133A . THE FINANCE ACT, 2008 HAS BROUGHT IN SEC. 292C BRINGING THE SAME CREDIBILITY O N MATERIALS FOUND DURING SURVEY AT PAR WITH MATERIALS FOUND DURING SEARC H AS REGARDS PRESUMPTION OF OWNERSHIP AND TRUTH OF THE DOCUMENTS F OUND. THUS THE CONTENTION RAISED BY THE APPELLANT THAT STATEMENT REC ORDED DURING SURVEY DOES NOT BIND THE APPELLANT AND CAN BE RETRACT ED IS NOT ACCEPTABLE. MOREOVER, THE RETRACTION HAS COME AFTER A LONG GAP OF NEARLY ELEVEN MONTHS AND IS NOT BACKED BY ANY PROOF OR EVID ENCE TO ITS CONTENTION RAISED. 5.8.1 IN THE CASE OF DR . S . C. GUPTA VS CIT (2001) 248 ITR 782 (ALL), IT WAS HELD THAT THE STATEMENT MADE VOLUNTARILY CAN FORM BA SIS OF ASSESSMENT . RETRACTION WOULD NOT MAKE IT NON-ACCEPTABLE. BURDEN OF PROOF LIES ON THE ASSESSEE THAT THE STATEMENT WAS WRONG. ADDITION MADE ON T HE BASIS OF STATEMENT DURING SURVEY - BURDEN LAY ON ASSESSEE TO PROVE THAT EARLIER STATEMENT WAS GIVEN UNDER DURESS . IN THE CASE OF VIDEO MASTER VS JCIT (2003) 78 TTJ 264 (MUM), IT WAS HELD THAT RETRACTION AFTER ONE MONTH HAS TO BE REJECTED AS BURDEN OF PROVING THAT THE STATE MENT WAS OBTAINED BY COERCION AND BY DURESS NOT DISCHARGED BY THE ASSESSEE . 20 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 5.8.2 THE AHMEDABAD ITAT IN THE CASE OF M.K. CHOKSI V S ACIT HELD THAT STATEMENT IS DECISIVE UNLESS SUCCESSFULLY WITHDRAWN OR PROV ED ERRONEOUS. BY RETRACTION ASSESSEE MADE HIMSELF UNTRUSTWORT HY AND UNRELIABLE IN THE EYES OF LAW. WHAT IS ADMITTED BY ASSE SSEE AS TRUE MUST BE PRESUMED TO BE TRUE UNLESS CONTRARY IS KNOWN. THE PU NE ITAT IN THE CASE OF HOTEL KIRAN VS ACIT (2002) 82 ITD 453 (PUNE) HELD THAT STATEMENT CAN ONLY BE RETRACTED IF INVOLUNTARY OR CO ERCION AND GIVEN UNDER MISTAKEN BELIEF EITHER ON FACT OR LAW, BOTH OF WHICH FACTS - THE ASSESSEE HAS TO PROVE. THE APEX COURT IN THE CASE OF SURJ EET SINGH CHABBRA VS UOI (1977) 508 SCC (SC) HELD THAT CONFESSIO N THOUGH RETRACTED IS AN ADMISSION AND BINDS THE PERSON. MOREOVER , THE PRESENT ASSESSMENT HAS BEEN COMPLETED NOT ONLY ON THE BASIS OF A ST ATEMENT BUT ON A DOCUMENT WHOSE CONTENTS ARE APPEARING IN SEVERAL OTHER SEIZED DOCUMENTS AND , THEREFORE, THE PRESUMPTION DRAWN IS BASED ON A DOCUMENT HAVING EVIDENTIARY VALUE AND ALONG WITH TH E STATEMENT RECORDED U/S 132 AND ALSO U/S 131 OF THE I . T . ACT . ADMISSION IS ONE IMPORTANT PIECE OF EVIDENCE BUT IT CANNOT BE SAID T HAT IT IS CONCLUSIVE. IT IS REBUTTABLE . IT IS OPEN TO THE ASSESSEE WHO MADE ADMISSION TO ESTABLISH THAT CONFESSION WAS INVOLUNTARY AND THE SAME WAS EXTRACT ED UNDER DURESS AND COERCION AND THE BURDEN OF PROVING THAT TH E STATEMENT WAS OBTAINED BY COERCION OR INTIMIDATION LIES UPON THE A SSESSEE. WHERE THE ASSESSEE CLAIMS THAT HE MADE THE STATEMENTS UNDER THE MISTA KEN BELIEF OF FACT OR LAW, HE SHOULD HAVE APPLIED FOR RECTIFICA TION TO THE AUTHORITY WHO PASSED THE ORDER BASED UPON HIS STATEMENT . THE RETRACTION SHOULD BE MADE AT THE EARLIEST OPPORTUNITY AND THE SAME SHOUL D BE ESTABLISHED BY PRODUCING ANY CONTEMPORANEOUS RECORD OR EVIDENCE, ORAL OR DOCUMENTARY, TO SUBSTANTIATE THE ALLEGATION THAT HE W AS FORCED TO MAKE THE STATEMENT IN QUESTION INVOLUNTARILY. IT WAS SO HELD IN THE CASE OF ACIT VS HUKUMCHAND JAIN (2010) 191 TAXMANN 319 (CHHATISGAR H). THUS THE RETRACTION OF STATEMENT SHOULD BE BASED UPON SOUND REASO NING AND CORROBORATIVE EVIDENCES . MERE DENIAL OF STATEMENT IS NOT ENOUGH AS THE APPELLANT HAS DONE IN THE PRESENT CASE. 5.9 FURTHER, THE CONTENTION RAISED BY THE APPELLANT THAT NO EVIDENCE HAS BEEN FOUND TO SHOW THAT THE ASSESSEE HAD ACTUALLY RECEIV ED THE SAID AMOUNT OR THAT THE ASSESSEE HAD ENTERED INTO ANY TRANSA CTION WITH THE DHARIWAL GROUP AND THAT THE A . O. HAS ASSUMED THE AMOUNTS REFLECTED TO BE THE INCOME OF THE ASSESSEE IS NOT ACCEPTABLE IN VIEW OF THE CLEAR NOTINGS AND ADMISSION OF ITS AUTHOR EXPLAINING EACH AND EVERY NOTING RECORDED ON THE SEIZED DOCUMENTS AND ALSO EXPLAINING T HE MODUS OPERANDI OF THE BUSINESS AND THE MANNER IN WHICH THE A MOUNTS WERE GIVEN TO THE PERSONS INCLUDING THE APPELLANT CANNOT B E REGARDED AS A DUMB DOCUMENTS AND THE SAME HAS RIGHTLY BEEN ACTED UPO N BY THE A.O. NO ADDITION COULD BE MADE ON THE BASIS OF DUMB DOCUME NT . DUMB DOCUMENTS ARE THOSE DOCUMENTS WHICH ARE FOUND DURING THE COURSE OF SEARCH OR SURVEY AND DO NOT INDICATE WHETHER THE FIG URES MENTIONED THEREIN REFERS TO ANYTHING MEANINGFUL OR CORROBORATI VE WITH THE AFFAIRS OF THE ASSESSEE. THE COURTS HAVE HELD THAT NO ADDITION CAN BE MADE ON THE BASIS OF DUMB DOCUMENTS. HOWEVER , IN THE PRESENT CASE DOCUMENT FOUND AND SEIZED ARE NOT DUMB DOCUMENTS AS THEY CONFIRM SPECI FIC DETAILS OF THE SALES MADE BY SHRI SOHANRAJ MEHTA C & F AGENT OF THE DHARIWAL GROUP AND ALSO DEPLOYMENT OF MONEY AS PER THE INSTRUCTION OF SHRI RMD AND HIS SON SHRI PRD. THE WORDS USED UNDER THE PROVISIONS ARE 'P OSSESSION OR CONTROL'. THE POSSESSION MAY WITH ONE PERSON AND THE CON TROL WITH ANOTHER PERSON WITH RESPECT TO THE SAME ITEM. FOR EXAM PLE, DOCUMENTS RELATING TO UNACCOUNTED SALES ARE FOUND FROM THE POSSESSI ON OF AN 21 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 EMPLOYEE OF THE COMPANY BUT THE CONTROL OF THE SAME WOULD LIE UPON THE OWNER OR MANAGEMENT OF THE COMPANY AND IT CAN'T BE SAID TO BE UNACCOUNTED INCOME OF THE EMPLOYEE BUT IT WOULD REL ATE TO THE COMPANY WITH WHOM THE CONTROL LIES. 5.9.1 POSSESSION OR CONTROL MAY BE DIFFERENT FROM OWNER SHIP AND IT IS THE PERSON WHO OWNS THE ASSETS WILL ULTIMATELY BE LIABLE TO BE TAXED. IT IS THE RESPONSIBILITY OF THE PERSON FROM WHOSE POSSESSION OR CONTR OL DOCUMENTS OR ASSETS ARE FOUND TO EXPLAIN ABOUT THE OWNE RSHIP OF THE SAME. COURIER CARRYING UNACCOUNTED CASH IS IN POSSESSION O R CONTROL OF THE ASSET BUT THE OWNER OF THE ASSET IS THE PERSON OR CO MPANY ON WHOSE BEHALF HE IS CARRYING THE CASH. THE INCOME IS ULTIMATE LY LIABLE TO BE ASSESSED IN THE HANDS OF OWNER, BUT THE ONUS WOULD LIE UP ON THE COURIER TO PROVE AS TO WHO IS THE OWNER OF THE ASSET IN QUESTION . IN THE CASE OF SHRAVAN KUMAR GURJAR (2010) 230 CTR 539 (DEL), THE DELHI HIGH COURT HAVE HELD THAT ASSESSEE WHO ONLY ACTED AS A BOOKING AGEN T COULD NOT BE PRESUMED TO BE THE OWNER OF VALUABLE DETECTED IN SEAR CH OPERATIONS BY POLICE WHERE IT WAS ESTABLISHED THAT THE SEIZED GOODS B ELONGED TO ANGARIA ' WHO HAD BOOKED THE GOODS WITH THE ASSESSEE. THUS A CLEAR DISTINCTION WAS MADE BETWEEN POSSESSION / CONTROL ON THE ONE HAND AND OWNERSHIP ON THE OTHER HAND. MOREOVER , IN THE PRESENT CASE THE APPELLANT HIMSELF HAD ADMITTED TO HAVE BEEN THE CUSTO DIAN OF THE MONEY RECEIVED FROM DHARIWAL GROUP DURING THE COURSE OF HI S STATEMENT RECORDED DURING THE SURVEY ACTION U/S 133A . IN THE CASE OF KHOPADE KISANRAO MANIKRAO VS ACIT (2000) 74 ITD 25 (PUNE) TM WITH RESPECT TO THE COMPUTATION OF UNDISCLOSED INCOME THE PROVISIONS OF SEC. 143(3) HAS BEEN DISCUSSED. IT WAS HELD THAT IN MAKING THE ASSESSMENT, PROVISION OF SEC. 143(3) HAVE BEEN SPECIFICALLY MADE AVAILABLE TO THE ASSESSING OFFICER . SEC . 143(3) EMPOWERS THE ASSESSING OFFICER TO MAKE AN ASSESSMENT OF INCOME ON THE BASIS OF THE MATERIAL WHICH H AS BEEN GATHERED BY HIM . THE LANGUAGE OF SEC. 143(3) MAKES IT ABUNDANTLY CLEA R THAT THE ASSESSMENT TO BE MADE BY THE ASSESSING OFFICER SHOU LD BE BASED ON EVIDENCE BEFORE THE OFFICER. THE WORD 'EVIDENCE' HAS TO BE CONSTRUED IN A COMPREHENSIVE SENSE AND IT INCLUDES CIRCUMSTANTIAL EVIDENCE . IT IS WELL SETTLED PRINCIPLE OF LAW THAT THE MATERIAL OR E VIDENCE ON WHICH THE TAXING AUTHORITIES MAY BASE THE ASSESSMENT IS NOT CONFINED TO DIRECT TESTIMONY BY WITNESSES . IT MAY BE REITERATED THAT THE WORD USED IN SEC . 143 IS EVIDENCE . HOWEVER , IN MAKING ASSESSMENT THE ASSESSING OFFICER DOES NOT ACT MERELY ON WHAT IS TECHNICALLY DESCRIBED AS EVIDENCE IN THE INDIAN EVIDENCE ACT . IT IS OBSERVED FROM SEC. 143(3) THAT THE ASSESSING OFFICER CAN BASE HIS ASSESSMENT NOT ONLY ON THE EVIDENCE FOUND BUT ALSO ON THE MATERIAL GATHERED BY HIM . IT IS NOW WELL SETTLED THAT THE ASSESSING OFFICER IS NOT FALTERED BY TECHNICAL RULES OF EVIDEN CE AND THE LIKE AND THAT HE MAY ACT ON MATERIAL WHICH MAY NOT STRICTLY SPEAKIN G BE ACCEPTED AS EVIDENCE IN A COURT OF LAW . SUCH EVIDENCE NEED NOT NECESSARILY BE DIRECT EVIDENCE, IT MAY BE CIRCUMSTANTIAL EVIDENCE OR ASSESSMEN T BASED ON PREPONDERANCE OF PROBABILITIES JUDGED BY HUMAN CONDU CT . IF THERE IS MATERIAL ON RECORD TO ESTABLISH THAT THE ASSESSEE HAS CHA RGED ' ON MONEY' IN REGARD TO LAND DEALS WHICH IS NOT RECORDED IN THE REGULAR BOOKS OF ACCOUNT, I T IS PERMISSIBLE FOR THE ASSESSING OFFICER TO MAKE AN ASSESSMENT ON THE BASIS OF SUCH MATERIAL . 5.10 IN THE PRESENT CASE ALSO THE ASSESSING OFFICER HAS BA SED THE ASSESSMENT ON THE MATERIAL FOUND DURING THE COURSE OF SEA RCH ACTION AND WHICH HAS ALSO BEEN ADMITTED BY THE AUTHOR TO BE WRI TTEN IN HIS OWN 22 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 HANDWRITING AND ALSO ADMITTED BY THE APPELLANT TO HA VE BEEN RECEIVED BY HIM. APPARENT IS REAL UNLESS CONTRARY IS PROVED . IN THIS CASE , THE MONEY RECEIVED BY THE APPELLANT WAS RECORDED ON THE LOOSE P APERS AND SEIZED DOCUMENT AND THE CONSIDERATION RECEIVED WAS APPARENT AND IT WAS, THEREFORE, FOR THE ASSESSING OFFICER TO ESTABLISH THE CO NTRARY. FURTHER, ON THE BASIS OF MATERIAL FOUND DURING THE COURSE OF SEARCH ACTION U/S 132, IT HAS BEEN ESTABLISHED THAT WHAT IS APPARENT DOES NOT REFL ECT THE TRUE STATE OF AFFAIRS . THEREFORE, THE BURDEN THAT RESTED WITH THE ASSESSING OFF ICER STANDS DISCHARGED AND THE ONUS HAS SHIFTED TO THE APPELLA NT . IN THE CASE OF DHANVARSHA BUILDERS AND DEVELOPERS (P) LTD VS DCIT (2006) 102 ITD 375 (PUNE) THE ASSESSEE WAS FOUND IN POSSESSION OF RECORD R EGARDING MONIES RECEIVED IN RESPECT OF VARIOUS GODOWNS AND SHOPS TO BE CONSTRUCTED BY IT, THE BENCH HELD THAT AS 'THE DOCUME NT SPEAKS OF RECEIPT IN CASH AS ALSO RECEIPT BY WAY OF CHEQUES ON DECODING, TALLYING WITH THE BOOKS OF ACCOUNT OF THE ASSESSEE, IT CANNOT BE SAID THAT THE DOCUMENT IS A DUMB DOCUMENT EVEN THOUGH IT DOES NOT CONTAIN ASSESSEE'S NAME. IT WAS FURTHER HELD BY THE BENCH THAT AS PER THE COUNSEL OF THE ASSESSEE THE IMPUGNED DOCUMENT IS A DUMB DOCUMENT AND, THEREFORE, IT CANNOT BE RELIED UPON FOR THE PURPOSE OF ASSESSMENT . IT IS NOT POSSIBLE TO AGREE WITH THE COUNSEL IN EITHER OF THE MATTERS. THE REASON IS THAT THE AUTHORITY OF NAMES AND DECODING OF AMOUNTS RECEIVED BY WAY OF CHEQUES LEAD TO ESTABLISHMENT OF THE FACT THAT THE DOCUMENT BELONGS TO THE ASSESSEE AND VARIOUS AMOUNT ENTERED THEREIN ARE CORRECT IF THREE ZEROS ARE SUPPLIED. THE ABSENCE OF THE NAMES OF THE ASSESSEE THUS GETS FULLY CO RROBORATED ON THE BASIS OF AFORESAID INTERPRETATION OF THE DOCUMENT . THE DOCUMENT SPEAKS OF RECEIPT IN CASH AND ALSO RECEIPT BY WAY OF CH EQUES . THE RECEIPTS BY WAY OF CHEQUES TALLY WITH THE BOOKS OF ACC OUNT . THEREFORE, IT IS A NATURAL CONSEQUENCE THAT THE RECEIPT BY WAY OF C ASH HAS ALSO TO BE MADE. ACCORDINGLY, THE DOCUMENT IS NOT A DUMB DOCUME NT BUT IT IS A SPEAKING DOCUMENT AND IT PERTAINS TO THE BUSINESS TRANSAC TIONS OF THE ASSESSEE.' 5.11 IN THE CASE OF DHUNJIBHOY STUD AND AGRICULTURAL FARM VS DC IT (2002) 82 ITD 0018 (PUNE) TM, THE BENCH HELD THAT T HERE CANNOT BE ANY DIRECT EVIDENCE FOR RECEIPT OF ON-MONEY. OBVIOUSLY N O SANE PERSON WOULD ADMIT THAT HE IS RECEIVING ON- MONEY . IN THE CASE OF P R PATEL VS DCIT (2001) 78 ITD 57 (MUM), IT WAS HELD THAT THE SEIZED P APERS CANNOT BE CALLED DUMB BECAUSE THEY INDICATE THE DATE, AMOUNT A ND ALSO CALCULATION OF INTEREST . THUS IN THE GIVEN SET OF FACTS AND CIRCUMSTANCES OF THE CASE AND HAVING CONSIDERED THE FACTUAL POSITION INCLUDING THE SUBMISSION OF THE APPELLANT, SEIZED DOCUMENTS AND VARIOUS STATEMENTS R ELIED DURING THE TWO SEARCHES , IT IS DIFFICULT TO ACCEPT THE ARGUMENT OF THE APPELL ANT THAT NO ADDITION COULD BE MADE. THE SEIZED DOCUMENT DO SHOW LINK BETWEEN M/S DIL AND THE APPELLANT AND THE ENTIRE MO DUS OPERANDI OF OUT OF BOOKS SALES OF M/S DIL HAS BEEN EXPLAINED BY SHR I SOHANRAJ MEHTA, WHICH ALSO GETS CORROBORATED BY THE SEIZED DOCUMENTS . THESE DOCUMENTS AND THE ACCOUNTING RECORDS ARE NOT DUMB DOCUMENT RAT HER ARE TRUE STATEMENT OF ACTUAL STATE OF AFFAIRS AMONG VARIOUS PAR TIES INCLUDING THE APPELLANT . THEREFORE, IT CANNOT BE SAID THAT NO ADDITIONS ARE CA LLED FOR ON THE LOOSE PAPERS FOUND AT THE RESIDENCE OF MITHULAL JA IN AT BANGALORE. I, THEREFORE, HOLD THAT ENTRIES INDICATING TO THE APPEL LANT CAN LEAD TO ADDITION IN THE HANDS OF THE APPELLANT . THESE SEIZED DOCUMENTS AND STATEMENT OF SHRI MEHTA CANNOT BE IGNORED BUT ARE VE RY MUCH RELEVANT AND, THEREFORE, THE ENTRIES RELATED TO THE APPELLANT CAN LEAD TO ADDITION IN THE HANDS OF THE APPELLANT . 23 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 5.12 UNDER THE DEEMING PROVISIONS OF THE I . T. ACT, 1961, THE POSITION IS THAT THE MERE EXISTENCE OF A CREDIT ENTRY IS SUFFICIE NT TO ATTRACT THE PROVISIONS AND ONCE THE APPELLANT'S EXPLANATION IS NOT SATISFACTORY, THE CASH CREDITS ARE TO BE CHARGED TO TAX IN AN EXCEPTION ABLE MANNER . IT WAS SO HELD IN ONE OF THE MOST LANDMARK CASES OF THE HON'BL E SUPREME COURT OF SUMATI DAYAL (1995) 214 ITR 801 (SC). FROM ' A PLAIN READING OF THE REQUISITE SECTIONS IT IS EVIDENT THAT WHEN THE ASSESSEE OFF ERS NO EXPLANATION ABOUT THE NATURE AND SOURCE OF THE CREDI TS, ITS VALUE COULD BE DEEMED INCOME OF THE ASSESSEE. AN EXPLANATION OFFERED, IF NOT ACCEPTED IS NO EXPLANATION IN LAW AND NOT ONLY THIS THE LEGISLATU RE WHILE ENACTING THE DEEMING PROVISIONS OF THE I . T . ACT FALLING UNDER SECTIONS 68, 69 TO 69D OF THE I . T. ACT, 1961, HAS CLARIFIED THAT IN CASE THE EXPLANAT ION OFFERED IS NOT SATISFACTORY THE VALUE OF THE UNEXPLAINED DEPOSITS SHALL BE DEEMED TO BE THE INCOME OF THE ASSESSEE. THERE CAN BE NO GENERAL PRO POSITION OF LAW APPLICABLE TO ALL CASES IRRESPECTIVE OF THE FACTS AND C IRCUMSTANCES THEREOF. ONE THING WHICH CAN BE SAID WITHOUT MUCH HE SITATION IS THAT THE BURDEN IS ALWAYS ON THE ASSESSEE, IF AN EXPLANATION IS ASK ED FOR BY THE TAXING AUTHORITIES TO INDICATE THE SOURCE OF ACQUISITI ON OF A PARTICULAR ASSET ADMITTEDLY OWNED BY THE PERSON CONCERNED. THE BU RDEN CAST UPON THE APPELLANT HAS NOT BEEN DISCHARGED EITHER AT THE STAGE OF ASSESSMENT OR DURING THE APPELLATE PROCEEDINGS BY FURNISHING ANY ACCEPTABLE EXPLANATION. 5.12.1 IT WAS ALSO HELD THAT THE TAX AUTHORITIES WERE ENTITLE D TO LOOK INTO THE SURROUNDING CIRCUMSTANCES TO FIND OUT THE REALITY , AND THE MATTER HAS TO BE CONSIDERED BY APPLYING THE TEST OF HUMAN PROBAB ILITIES. IN THIS DECISION, THE HON'BLE APEX COURT ALSO RELIED UPON THE RATIO OF THE EARLIER JUDGEMENT IN THE CASE OF DURGA PRASAD MORE, 82 ITR 54 0 (S.C). IN MY CONSIDERED OPINION, THERE ARE ENOUGH CIRCUMSTANTIAL E VIDENCES AND PREPONDERANCE OF PROBABILITIES IN THIS CASE, WHICH LEA D TO THE INFERENCE THAT THE DECISION OF THE ASSESSING OFFICER WAS ON A SOUND BASIS . IT MAY BE RELEVANT TO QUOTE THE ABOVE REFERRED DECISION OF THE APEX COURT IN THE CASE OF CIT VS . DURGA PRASAD MORE, 82 ITR 540 WHEREIN IT IS HELD AS UNDER : ' IT IS TRUE THAT AN APPARENT MUST BE CONSIDERED REAL UN TIL IT IS SHOWN THAT THERE ARE REASONS TO BELIEVE THAT THE APPARENT I S NOT REAL. ' THE OWNERSHIP OF THE DOCUMENTS OR THE LOOSE PAPERS IS NO T UNDER DISPUTE AS THE SAME HAS BEEN ADMITTEDLY STATED TO BE IN THE HANDWRITING OF ONE OF CLOSE ASSOCIATE OF THE DHARIWALS . THE DOCUMENT CLEARLY REVEALS THE ENTIRE MODUS OPERANDI , DEFINITELY CONCEALED AND RECEIPT IN CASH AND WHICH HAS ALSO BEEN CORROBORATED BY STATEMENTS GIVEN BY ITS AUTHOR WHICH CLEARLY CONNECTS THEM WITH THE DHARIWAL GROUP AND, THEREFORE, IT CANNOT BE SAID TO BE IRRELEVANT AND JUST A PIECE OF P APER . FROM THE VARIOUS MATERIAL BROUGHT ON RECORD, THERE WAS NOTHIN G IMPROPER ON THE PART OF THE ASSESSING OFFICER IN RELYING ON CIRCUMSTANTI AL EVIDENCE IN SUCH CASES FOR ARRIVING AT THE FINDING . THE ASSESSING OFFICER IS ALSO ENTITLED TO TAKE INTO CONSIDERATION THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE AND TO DRAW HIS / HER OWN INFERENCE ON TH E BASIS THEREOF, CIRCUMSTANTIAL EVIDENCE IN SUCH CASES IS NOT IMPERMISSIBLE . ON SIMILAR FACTS THE BOMBAY HIGH COURT IN THE CASE OF SMT . VASANTIBAI N. SHAH VS. CIT (1995) 213 ITR 805 (BOM) HELD THAT IN SUCH CASES ONLY CIRCUMSTANTIAL EVIDENCE WILL BE AVAILABLE . NO DIRECT EVIDENCE CAN BE EXPECTED. IN THE CASE OF GREEN VALLEY BUILDERS VS CIT (2008) 296 ITR 225 24 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 (KER) , THERE WERE MATERIALS CONSTITUTING CIRCUMSTANTIAL EVIDE NCE TO PROVE THAT LAND IN QUESTION HAD BEEN SOLD BY THE ASSESSEE AT A HIGHER PRICE THAN THAT CLAIMED BY IT AND HENCE ADDITION ON ACCOUNT OF UNACCOUNTED INCOME WAS JUSTIFIED . 5.12.2 THE NOTINGS MADE ON THE SEIZED DOCUMENT INDICA TING PAYMENTS MADE BY THE DHARIWAL GROUP I . E. SHRI RASIKLAL M. DHARIWAL AND HIS SON SHRI PRAKASH R . DHARIWAL TO THE APPELLANT THROUGH SHRI SOHANRAJ MEH TA, THE C&F AGENT OF RMD GROUP FOR KARNATAKA REGION IS A N UNDISPUTED FACT AND HAVING HELD THAT THE SAID SEIZED DOCUMENT REFLECT PAYMENTS MADE TO THE APPELLANT, THE QUESTION WHICH NOW ARISES IS WHETHER IT CAN BE TAXED IN THE HANDS OF THE APPELLANT . THE DEEMING PART OF SECTION 69A COMES INTO PLAY IF THE FOLLOWING TWO CONDITIONS ARE SATISFIE D: 1) THE ASSESSEE IS FOUND TO BE OWNER OF ANY MONEY 2) SUCH MONEY IS NOT RECORDED IN THE BOOKS OF ACCOUNT . THE APEX COURT IN CHUHARMAL VS CIT (1988) 72 ITR 250 (SC) HELD THAT THE EXPRESSION INCOME AS USED IN THIS SECTION HAS A WIDE M EANING WHICH MEANT ANYTHING WHICH CAME IN OR RESULTED IN GAIN. TH E SEIZED DOCUMENT CLEARLY REVEALED THAT THE MONEY HAD PASSED HANDS AND H AD COME INTO THE POSSESSION OF THE APPELLANT, A FACT WHICH HAS ALSO BEEN ADMITTED BY THE APPELLANT, THOUGH SUBSEQUENTLY RETRACTED. THEREFORE, I DO NOT HAVE ANY DOUBT IN MY MIND OR RATHER I AM CONVINCED THAT THE ENTIRE SUM OF MONEY RECEIVED BY THE APPELLANT IS LIABLE TO BE TAXED U/S 69A OF THE ACT . THE APPELLANT THUS HAS BEEN FOUND TO BE THE OWNER OF THE SAID AMOUNT OF CASH AND THIS FACT HAS ALREADY BEEN ESTABLISHED MORE SO B ECAUSE OF THE APPELLANT'S OWN ADMISSION AND THE APPELLANT HAS FAILED TO PROVE THAT CASH DID NOT BELONG TO HIM. IT IS SETTLED THAT POSSESSION IS EVIDENCE OF OWNERSHIP AND THE STRENGTH OF PRESUMPTION OF OWNERSHIP ARISING FROM THE FACT OF POSSESSION DEPENDS ON THE NATURE OF PROPERTY INVOLVED. THIS PRESUMPTION IS ONE OF THE STRONGEST IN THE CASE OF CASH F OUND IN POSSESSION OF A PERSON SINCE CASH IS ONE OF THE PROPERTIES O F WHICH TITLE IS TRANSFERABLE BY MERE DELIVERY OF POSSESSION. THE APPEL LANT IN THE PRESENT CASE HAS ADMITTEDLY RECEIVED THE CASH AMOUNTING TO RS. 14.35 CRORES OVER A PERIOD OF TIME AND RS. 35,00,000/- DURING THE YEAR UNDER CONSIDERATION AND HAS FAILED TO PROVE THAT CASH DID NO T BELONG TO HIM AND AS HE FAILED TO DISCHARGE THE BURDEN OF PROOF IT HAS RIGHTLY BEEN HELD THAT THE SUM WAS LIABLE TO BE INCLUDED AS INCOME OF AP PELLANT F R OM OTHER SOURCES . IN SUCH A SITUATION , UNLESS ANY COGENT EXPLANATION IS GIVEN BY THE PERSON IN POSSESSION OF THE CASH TO SHOW THAT SOMEONE ELSE WAS THE OWNER OF THAT AMOUNT OF MONEY, IT IS REASONABLE TO ASSU ME THAT THE CASH BELONGED TO THE APPELLANT FROM WHOSE POSSESSION IT WAS FO UND. THE REASONING GIVEN BY THE A . O. IS ACCEPTABLE AS THERE IS NO LIABILITY AGAINST THE RECEIPT HENCE IT BECOMES THE INCOME OF THE APPEL LANT . THE SEIZED DOCUMENT AND THE STATEMENT RECORDED CLEARLY SUGGEST TH AT THE PAYMENT WAS MADE TO THE APPELLANT AND IN V I EW THEREOF THE LIABILITY WHICH IS NOT PAYABLE WOULD BECOME INCOME OF THE APPELLANT I . E . WHEN ONE OF THE LIMB IS CERTAIN THE OTHER LIMB IF DENIED BECOMES THE INCOM E. 5 . 12.3 THUS , THE ASSESSING OFFICER HAS BROUGHT ON RECORD AND DISCUSSE D I N DETAIL THE ENTIRE SCHEME OF UNACCOUNTED BUSINESS TRAN SACTIONS OF M/S DIL . CONSIDERING THE ENORMITY OF THE TRANSACTION WHICH WAS SPREAD OVER SEVERAL ASSESSMENT YEARS IT COULD NOT HAVE BEEN EXPECTED THAT THE ASSESSEE WOULD KEEP DETAILS OF EACH AND EVERY TRANSACTION CONNECTED 25 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 WITH THE ACTIVITY . OBVIOUSLY THESE COULD FIND PLACE IN A MANNER WHICH WERE DISCOVERED BY THE INVESTIGATION WING DURING THE SEARCH ACTION. THE EFFORTS OF THE ASSESS I NG OFFICER IN LINKING UP THESE TRANSACTIONS WITH THE EVIDENCES OF M/S DIL WITH OTHERS, ON THIS BASIS NEEDS TO BE APPRECIATED. ANY DOCUMENT HAS TO BE NECESSARILY READ, AS A WHOLE. AP PLY I NG THIS PRINCIPLE THE GENUINENESS OF THE SEIZED DOCUMENT AND A COROLLARY, THE APPELLANT'S INVOLVEMENT IN THE UNACCOUNTED BUSINESS CHA IN GETS ESTABLISHED BEYOND ANY DOUBT . THE SEIZED DOCUMENT DO SHOW LINK BETWEEN THE APPELLANT AND M/S DIL . THE SEIZED DOCUMENT AND THE RECORD OF THE ACCOUNT ARE NOT DUMB DOCUMENTS RATHER ARE TRU E STATEMENT OF THE ACTUAL STATE OF AFFAIRS AMONGST VARIOUS PARTIES INCLUDIN G THE APPELLANT . I FIND IT DIFFICULT IN THE GIVEN FACTS AND CIRCUMSTANCE S, TO ACCEPT THE ARGUMENTS OF THE APPELLANT THAT NO ADDITION ON ACCOU NT OF THE RECEIPT OF MONEY COULD BE MADE. THEREFORE, I HOLD THAT ENTRIES RELATED TO THE APPELLANT CAN LEAD TO ADDITION IN THE HANDS OF THE A PPELLANT . 5.13 THE APPELLANT HAS ALSO RAISED THE ISSUE OF NOT SUPPL YING THE STATEMENT OF SHRI SOHANRAJ MEHTA RECORDED U/S 132(4) ON THE BASIS OF WHICH THE UNDISCLOSED INCOME ADDITION WAS MADE NOR OPP ORTUNITY TO CROSS EXAMINE HIM WAS AFFORDED WHICH WAS AGAINST THE PRI NCIPLES OF NATURAL JUSTICE . IT I S RELEVANT TO POINT OUT THAT THE SEARCH AND SEIZURE ACTION U/S 132 TOOK PLACE IN THE CASE OF SHRI SOHANRAJ MEHTA , C&F AGENT OF RMD GUTKHA GROUP ON 10 . 10 . 2009 WHEREAS THAT ON THE DHARIWAL GROUP AND THE APPELLANT TOOK PLACE ON 20 . 01 . 2010 . DURING THE COURSE OF SEARCH AND SURVEY ACTION CARRIED OUT IN THE CASE OF TH E APPELLANT, THE APPELLANT WAS CONFRONTED ON THE FINDINGS OF THE STATEM ENT GIVEN BY SHRI MEHTA WHEREIN HE HAD STATED THAT RS. 14,35,00,000/- WAS GIVEN TO THE APPELLANT ON DIFFERENT DATES AS PER THE INSTRUCTIONS OF SHRI RASIKLAL M . OHARIWAL AND HIS SON SHRI PRAKASH R. DHARIWAL . THE APPELLANT IN HIS STATEMENT DURING SURVEY U/S 133A HAD ADMITTED TO HAVE RECEIVED A SUM OF RS . 14,00,00,000/- FROM THE DHARIWALS. THE APPELLANT HAS BEEN A FAMILY FRIEND AND A CLOSE BUSINESS ASSOCIATE OF SHRI RASI KLAL M. DHARIWAL , CHAIRMAN OF THE DHARIWAL INDUSTRIES LTD. (DIL FOR SHO RT), OVER MANY YEARS. THUS THE APPELLANT WAS ALWAYS IN KNOWLEDGE OF TH E ENTIRE TRANSACTION AND ADMITTED TO HAVE RECEIVED THE SAID SUM OF MONEY. THE SEARCH ACTION HAD CLEARLY REVEALED THAT THE SE I ZED DOCUMENTS WERE NOT DUMB DOCUMENTS AND PROVED BEYOND REASONABLE DOUBT THE ENTIRE UNACCOUNTED BUSINESS CHAIN OF M/S DIL . THE APPELLANT THOUGH SUBSEQUENTLY AFTER NEARLY 22 MONTHS HAD RETRACTED THE ADMISSION MADE EARLIER OF BEING THE CUSTODIAN OF ABOUT 14 CRORES OF MONEY OF DHARIWAL WAS WITHOUT ANY VALID EVIDENCE . THE MATERIAL ON RECORD CLEARLY INDICATED THAT THE SAID RETRACTION WAS MADE AT THE BEHEST OF M/ S DIL . IN THE GIVEN CIRCUMSTANCES OF THE CASE, THE APPELLANT ' S GROUND OF APPEAL OF NOT PROVIDING CROSS EXAMINATION OF SHRI SOHANRAJ MEHTA AN D NOT PROVIDING THE COPIES OF STATEMENT U/S 132(4) IS NOT A VALID GROUND. IT IS NOTICED THAT THE ASSESSING OFFICER HAD PROVIDED THE COPIES OF THE STAT EMENT OF SHRI SOHANRAJ MEHTA TO THE APPELLANT DURING THE ASSESSMENT P ROCEEDINGS AND WHICH HAS ALSO BEEN ADMITTED BY THE APPELLANT IN THE SUBMISSION FILED DURING THE APPELLANT PROCEEDINGS . EVEN AFTER THAT IT IS NOT UNDERSTANDABLE AS TO WHY THE APPELLANT I S INSISTING ON THE CROSS EXAMINATION OF SHRI MEHTA WHEN HE HIMSELF ADMITTED T O HAVE RECE I VED RS . 14 CRORES FROM SHRI SOHANRAJ MEHTA, EITHER BY SELF OR TH ROUGH HIS REPRESENTATIVES ON THE DIRECTIONS OF SHRI RMD AND SHRI PRD. 26 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 5.13.1 AFTER ALL , THE PURPOSE BEHIND ALLOWING CROSS EXAMINATION IS TO BRING OUT THE TRUTH AND IN THE PROCESS FOLLOW THE PRI NCIPLES OF NATURAL JUSTICE. THAT TO ME, HAVE BEEN ADEQUATELY TAKEN CARE OF WHILE FINALIZING THE ASSESSMENT PROCEEDINGS. IN THAT CONTEXT, THE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF CIT VS K.D. BALI (2011) 10 TAXMANN.COM 215 (P & H) HAS HELD NO DOUBT, ANY QUASI JUDICIAL AUTHORITY HAS TO FOLL OW PRINCIPLES OF NATURAL JUSTICE WHICH INCLUDES OPPORT UNITY TO CROSS EXAMINE THE WITNESS WHOSE STATEMENT IS RELIED UPON BUT THE PRINCIPLES OF NATURAL JUSTICE ARE NOT FIXED PRINCIP LES. THE SAME CAN VARY DEPENDING UPON THE NATURE OF INQUIRY. IN THE I NSTANT CASE THE PERSON FROM WHOM THE AMOUNT WAS RECEIVED INITIALLY, STATED THAT THE AMOUNT BELONGED TO THE ASSESSEE. THEY WERE NOT SHOW N TO HAVE ANY EXTRANEOUS REASON TO GIVE SUCH A VERSION THESE CIRCUMSTANCES COULD BE IGNORED BY THE CIT (APPEALS) AND THE TRIBUNAL FO R SETTING ASIDE THE ASSESSMENT ORDER ON THE GROUND THAT SAID WITNESSES WERE NOT PRODUCED FOR CROSS EXAMINATION ..... ' IN THE CONTEXT OF TAX ASSESSMENT IT WAS OBSERVED IN STATE OF KERALA VS K.T. SHAUDULI GROCE RY DEALERS ETC. (1977) 1977 CTR (SC) 260 : 'IT IS TRUE THAT THE WORDS 'OPPORTUNITY OF BEING HE ARD' ARE OF VERY WIDE AMPLITUDE BUT IN THE CONTEXT OF THE SALES-TAX PROCE EDINGS WHICH ARE QUASIJUDICIAL PROCEEDINGS, ALL THAT THE COURT HAS T O SEE IS WHETHER THE ASSESSEE HAS BEEN GIVEN A FAIR HEARING. WHETHER THE HEARING WOULD EXTEND TO THE RIGHT OF DEMANDING CROSS-EXAMINATION OF WITNESSES OR NOT , WOULD NATURALLY DEPEND UPON THE NATURE OF THE MATER IALS RELIED UPON BY THE SALES-TAX AUTHORITIES, THE MANNER IN WHICH THE ASSESSEE CAN REBUT THOSE MATERIALS AND THE FACTS AND CIRCUMSTANCES OF EACH CASE. IT IS DIFFICULT TO LAY DOWN ANY HARD AND FAST RULE OF UNI VERSAL APPLICATION. ' 5.14 IN VIEW OF THE ABOVE FACTS, THE CONTENTION RA ISED BY THE APPELLANT REGARDING PRINCIPLE OF NATURAL JUSTICE IS NOT TENABLE AND IS LIABLE TO BE DISMISSED. 5.15 ACCORDING TO THE ASSESSING OFFICER, FROM THE PLAIN READING OF SECTION 69A , IT IS EVIDENT THAT WHEN THE ASSESSEE OFFERS NO EXPLANATI ON ABOUT THE NATURE AND SOURCE OF ACQUISITION OF THE MON EY, BULLION, JEWELLERY OR OTHER VALUABLE A R TICLES IN VALUE WOULD BE DEEMED INCOME OF THE ASSESSEE. AN EXPLANATION OFFERED , IF NOT ACCEPTED IS NO EXPLANATION IN LAW AND NOT ONLY THIS, THE LEGISLATURE WHILE ENACTING SECTION 69A HAS CLARIFIED THAT IN CASE THE EXPLANATION OFFERED IS NOT SATISFACTORY THE VALUE OF THE VALUABLE ARTICLES SHALL BE DEEMED TO BE THE INCOME OF THE ASSESSEE . 5.15.1 SECTION 110 OF THE EVIDENCE ACT IS MATERIAL I N THIS RESPECT WHICH STIPULATES THAT WHEN THE QUESTION IS WHETHER ANY PERSON IS OWNER OF ANYTHING OF WHICH HE IS SHOWN TO BE IN POSSESSION, THE ONUS OF PROVING THAT HE IS NOT THE OWNER, IS ON THE PERSON WHO AFFIRMS THAT HE IS NOT THE OWNER. IN OTHER WORDS, IT FOLLOWS FROM WE L L SETTLED PRINCIPLE OF LAW THAT NORMALLY, UNLESS CONTRARY IS ESTABLISHED , TITLE ALWAYS FOLLOWS POSSESSION. CHUHARMAL VS CIT (1988) 172 ITR 250 (SC ). DOCUMENTARY EVIDENCE PLAYS AN IMPORTANT PART IN LAW . THE COURTS ATTACH GREAT VALUE FOR DOCUMENTARY EVIDENCE . THE PUNJAB & HARYANA HIGH COURT IN THE CASE OF PARAMJIT SINGH VS ITO (2010) 323 ITR 588 (P & H) POINTED OUT THAT ORAL EVIDENCE IS NOT CONCLUSIVE AS AGAINST DOCUME NTARY EVIDENCE UNDER SECTIONS 91 AND 92 OF THE INDIAN EVIDENCE ACT , 1872 . 27 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 5.16 TO SUM UP , ON CAREFUL CONSIDERAT I ON OF ALL THE EVIDENCES AND FACTS CUMULAT I VELY AND ALSO THE SUBMISSION OF THE APPELLANT , IN MY CONSIDERED OP I N I O N , THE DECISION OF THE ASSESSING OFFICER IN MAK I NG THE ADDIT I ON OF RS . 35 , 00 , 000/- WAS O N A SOUND FACTS AND ON LEGAL BASIS AND HENCE LIABLE TO BE UPHELD AND THE GROUNDS OF APPEAL NO . 4 AND 5 RAISED BY THE APPELLANT ARE, THEREFORE , LIABLE TO BE DISMISSED. 18. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 1.(I) THE LD CIT(A) ERRED IN SUSTAINING THE VALIDITY OF THE ASSESSMENT ORDER PASSED UNDER SECTION 153A EVEN THOUGH THE ORDER WAS SERVED ON THE ASSESSEE BEYOND THE PERIOD OF LIMITATION. (II) THE LD CIT(A) ERRED IN NOT APPRECIATING THAT T HE IMPUGNED ORDER PASSED WITHOUT ALLOWING REASONABLE OPPORTUNITY OF BEIN G HEARD IS ILLEGAL AND DESERVES TO BE CANCELLED. (III) THE LD CIT(A) UTTERLY FAILED TO APPRECIATE TH AT THE LD AO HAD UTILIZED THE THIRD PARTY EVIDENCE WITHOUT ALLOWING THE APPEL LANT AN OPPORTUNITY TO CROSS-EXAMINE SUCH PARTY AND HENCE THE IMPUGNED OR DER PASSED IN CONTRAVENTION OF THE PRINCIPLE OF NATURAL JUSTICE IS ILLEGAL AND DESERVES TO BE QUASHED. (IV) THE LD CIT(A) FAILED TO APPRECIATE THAT THE LD AO ARRIVED AT CONCLUSIONS WITHOUT ADOPTING JUST, FAIR AND REASONABLE PROCEDURE IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND .THEREFORE, THE IMPUGNED ASSESSMENT ORDER DESERVES TO BE QUASHED. 2. THE LD CIT (A) ERRED IN SUSTAINING A DISALLOWANCE O F RS.1,00,000/- UNDER SECTION L4A. 3. (I) THE LD CIT(A) HAS ERRED IN HOLDING THAT TRANSA CTION OF RS. 14.35CRORES ALLEGED TO BE NOTED BY MR. SOHANRAJ MEHT A IN HIS DIARY RELATED TO THE APPELLANT WITHOUT APPRECIATING THAT THE APPELLANT HAD NOT MET SHRI MEHTA IN THE PAST. (II)THE LD CIT(A) HAS ERRED IN HOLDING THAT THE APP ELLANT WAS A CO- CONSPIRATOR IN TAX EVASION WITH M/S DHARIWAL INDUSTRIES LTD WITHOUT APPRECIATING THAT THE APPELLANT HAD NO CONNECTION W ITH THIS COMPANY ENGAGED IN GUTKA BUSINESS. (III)THE LD CIT(A) HAS ERRED IN RELYING ON THE NOTIN GS ALLEGEDLY MADE BY MR. SOHANRAJ MEHTA IGNORING THE FACT THAT THE APPEL LANT HAD NO CONNECTION WITH MR MEHTA AND NO PAPERS OR DOCUMENTS W ERE FOUND IN THE APPELLANT'S POSSESSION IN THIS REGARD AND NEITHER TH E APPELLANT HAD GIVEN ANY RECEIPT AGAINST THE ALLEGED PAYMENTS. (IV) THE LD CIT (A) HAS GROSSLY ERRED IN INVOKING THE PROVISIONS OF SECTION 68 OF THE I.T.ACT IGNORING THE FACT THAT NO CREDIT ENTRY HAS BEEN FOUND IN THE APPELLANT'S BOOKS OF ACCOUNT AND THE PRO VISIONS OF SEC. 68 HAD NO APPLICATION TO THE FACTS OF THIS APPELLANT'S CA SE. 28 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 (V) THE LD CIT (A) FURTHER ERRED IN RELYING ON PROV ISIONS OF SECTIONS 69 AND 69A OF THE IT ACT THOUGH THE AMOUNT ADDED BY TH E LD AO WAS NOT FOUND IN THE APPELLANT'S POSSESSION AND, THEREFORE, HE W AS NOT REQUIRED TO EXPLAIN THE SOURCE THEREOF. (VI)THE LD CIT (A) HAS GROSSLY ERRED IN SUSTAINING THE ADDITION OF RS. 35,00,000/- MADE BY THE LD AO WHICH IS NOT BASED ON A NY CONCRETE MATERIAL BUT ONLY ON PRESUMPTION AND GUESSWORK AND HEN CE IT IS ILLEGAL. 4. WITHOUT PREJUDICE TO THE ABOVE GROUNDS THE ALLEGE D AMOUNT HAS NO FEATURES OF INCOME TO BE TAXED IN THE HANDS OF THE AP PELLANT. 5. FURTHER, WITHOUT PREJUDICE TO THE ABOVE GROUNDS, ASSUMING WITHOUT ADMITTING THAT A PARCEL RECEIVED BY THE APPELLANT'S SECURITY STAFF AT THE RECEPTION OF THE BUILDING WHICH REMAINED IN TEMPORA RY CUSTODY OF THE SUCH SECURITY STAFF DOES NOT BECOME INCOME CHARGEABLE T O TAX IN THE HANDS OF THE OWNER OF THE BUILDING. 6. THE ABOVE GROUNDS OF APPEAL ARE WITHOUT PREJUDICE TO ONE ANOTHER. 7. THE APPELLANT CRAVES LEAVE TO REVISE, MODIFY, ALT ER OR DELETE ANY OF THE ABOVE GROUNDS OF APPEAL OR TO ADD NEW GROUNDS OF APPE AL. 19. THE ASSESSEE HAS ALSO RAISED AN ADDITIONAL GROUND WH ICH READS AS UNDER : ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. COMMISSIONER (APPEALS) ERRED IN UPHOLDING THE VALIDITY OF THE SEARCH ASSESSMENT ORDER PASSED U/S.153A OF THE ACT FOR A.Y. 2004 -05 EVEN THOUGH NO INCRIMINATING MATERIAL PERTAINING THERETO WERE FOUND BY THE INCOME TAX AUTHORITIES IN THEIR SEARCH ACTION IN MY C ASE. 20. THE LD. COUNSEL FOR THE ASSESSEE REFERRING TO THE ADD ITIONAL GROUND SUBMITTED THAT THE SAID GROUND IS PURELY A LEGAL GROUND AND NO FRESH FACTS ARE REQUIRED TO BE INVESTIGATED. RELYING O N THE DECISIONS OF HONBLE SUPREME COURT IN THE CASE OF NTPC LT D. REPORTED IN 229 ITR 383 AND IN THE CASE OF JUTE CORPORATION OF IND IA LTD. REPORTED IN 187 ITR 688 AND THE DECISION OF HONBLE BOM BAY HIGH COURT IN THE CASE OF AHMEDABAD ELECTRICITY COMPANY REPOR TED IN 199 ITR 351 HE SUBMITTED THAT THE ADDITIONAL GROUND RAISED B Y THE ASSESSEE SHOULD BE ADMITTED. 29 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 21. AFTER HEARING BOTH THE SIDES AND CONSIDERING THE ADDIT IONAL GROUND RAISED BY THE ASSESSEE BEING PURELY LEGAL IN NATU RE, THE SAME IS ADMITTED FOR ADJUDICATION. 22. BEFORE PROCEEDING TO DECIDE THE OTHER GROUNDS WE FIRS T ADJUDICATE THE ADDITIONAL GROUND. IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT NO INCRIMINATING MATERIAL WA S FOUND, THEREFORE, THE ORDER PASSED U/S.153A IS INVALID. HE RELIED ON THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. GURINDER SINGH BAWA REPORTED IN 386 ITR 483 (BOM.). 23. AFTER HEARING BOTH THE SIDES, WE FIND FROM THE COPY OF T HE PANCHNAMA DATED 20-01-2010 THAT LOT OF LOOSE PAPERS MA RKED AS PER BUNDLE NO.1 CONTAINING 1 TO 78 PAGES WERE FOUND FROM THE PREMISES OF THE ASSESSEE. APART FROM THE ABOVE A PENDRIVE WAS A LSO FOUND. THEREFORE, IT CANNOT BE SAID THAT NO INCRIMINATING DOCUMENT S WERE FOUND DURING THE COURSE OF SEARCH. THE LD. COUNSEL FOR TH E ASSESSEE ALSO COULD NOT JUSTIFY THAT NO INCRIMINATING DOCUMENTS WER E FOUND. SO FAR AS THE DECISION RELIED ON BY THE LD. COUNSEL FOR THE ASSESSEE IN THE CASE OF GURINDER SINGH BAWA (SUPRA) IS CONCERNED, THE SAME IN OUR OPINION, IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. AS MENTIONED EARLIER, CERTAIN LOOSE PAPERS WERE FOUND DURING T HE COURSE OF SEARCH AS PER BUNDLE NO.1 CONTAINING 78 PAGES. UNDER THESE CIRCUMSTANCES, WE FIND NO MERIT IN THE ADDITIONAL GROUND RA ISED BY THE ASSESSEE. ACCORDINGLY, THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS DISMISSED. 24. GROUNDS OF APPEAL NO. 1 (I) TO (IV) BY THE ASSESSEE RELATE S TO THE VALIDITY OF THE ASSESSMENT ORDER PASSED U/S.153A ON THE GROUND THAT THE SAME WAS SERVED ON THE ASSESSEE BEYOND THE PERIOD OF LIMITATION . 30 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 25. AFTER HEARING BOTH THE SIDES, WE FIND THE LD.CIT(A) WHILE ADJUDICATING THIS ISSUE AT PARA 3.2 OF THE ORDER HAS OBSE RVED THAT SEARCH ACTION U/S.132 AGAINST THE ASSESSEE WAS CONDUCT ED ON 20-01-2010 AND THE ASSESSMENT ORDER HAS BEEN PASSED ON 30-12-2011. THE ASSESSEE HAS FILED RETURN IN RESPONSE T O NOTICE U/S.153A DATED 14-09-2010 ON 31-12-2010. HE HAS ALSO GIVEN A FINDING THAT THE ORDER HAS BEEN MADE PRIOR TO THE END O F 21 MONTHS PERIOD AS ENVISAGED IN SECTION 153(1)(A) OF THE I.T. ACT. TH E ASSESSEE HAS FAILED TO DEMONSTRATE DURING THE APPEAL PROCEEDINGS THAT THE S AID ASSESSMENT ORDER HAS NOT BEEN MADE PRIOR TO 30-12-20 11. NO CONCRETE EVIDENCE IN THIS REGARD WAS PRODUCED BEFORE T HE CIT(A) TO JUSTIFY THAT THE DESPATCH OF THE ORDER HAVE BEEN MADE AFTER 30-12-2011. NOTHING WAS BROUGHT BEFORE US TO TAKE A C ONTRARY VIEW THAN THE VIEW TAKEN BY THE LD.CIT(A) WHILE DISMISSING THE GR OUND RAISED BY THE ASSESSEE ON THIS ISSUE. UNDER THESE CIRC UMSTANCES WE FIND NO MERIT IN THE ABOVE GROUND RAISED BY THE ASSESSEE . ACCORDINGLY, THE SAME IS DISMISSED. 26. IDENTICAL GROUNDS HAVE BEEN TAKEN IN ITA NO.1313/PN /2013 FOR A.Y. 2006-07 AND ITA NO.1315/PN/2013 FOR A.Y. 2008-09. FOLLOWING THE SAME REASONING GROUND OF APPEAL NO.1 BY THE ASSESSEE FOR THE ABOVE ASSESSMENT YEARS ARE ALSO DISMISSED. 27. GROUND OF APPEAL NO.2 BY THE ASSESSEE RELATES TO TH E ORDER OF THE CIT(A) IN SUSTAINING DISALLOWANCE OF RS.1 LAKH U/S.14A. 28. THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS THE ABOVE GROUND FOR WHICH THE LD. DEPARTMENTAL REPRESENTATIVE HAS NO 31 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 OBJECTION. ACCORDINGLY, THIS GROUND BY THE ASSESSEE IS D ISMISSED AS NOT PRESSED. 29. IDENTICAL GROUNDS HAVE BEEN TAKEN BY THE ASSESSEE IN ITA NO.1313/PN/2013 FOR A.Y. 2006-07 FOR RS.30,000/- AND IN ITA NO.1315/PN/2013 FOR A.Y. 2008-09 FOR RS.1,23,286/-. SINCE THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS THE ABOVE GROUN DS, THEREFORE, THE GROUNDS FOR THE ABOVE YEARS ARE DISMISSED. 30. IN GROUNDS OF APPEAL NO.3 TO 5 THE ASSESSEE HAS CH ALLENGED THE ORDER OF THE CIT(A) IN SUSTAINING THE ADDITION OF RS.35 LAKHS MADE BY THE ASSESSING OFFICER. 31. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SAME SUBMISSIONS AS MADE BEFORE THE ASSESSING OFFICER AND THE CIT(A). HE SUBMITTED THAT THERE IS NO BUSINESS CONNECTION BETWEEN THE ASSESSEE AND SHRI PRAKASH R. DHARIWAL AND SHRI RASIKLAL M. DHARIWAL SO FAR AS THE GUTKHA BUSINESS IS CONCERNED. FURTHER, NEITHER T HE ASSESSEE KNOWS NOR HAS EVER MET SHRI SOHAN RAJ MEHTA. FURTHER, SHRI SOHAN RAJ MEHTA HAD NEVER STATED THAT HE MET THE ASSESSEE AND GAVE THE MONEY TO HIM. EVEN THOUGH THE ASSESSEE HAD SPECIFICALLY ASKED FOR CROSS EXAMINATION OF SHRI SOHAN RAJ MEHTA THE SAME WAS NEVER GRANTED. THE LD. COUNSEL FOR THE ASSESSEE REFERRING TO P AGE 9 OF THE ASSESSMENT ORDER DREW THE ATTENTION OF THE BENCH TO T HE REPLY GIVEN BY THE ASSESSEE VIDE LETTER DATED 16-12-2011 WHERE HE HAD SPECIFICALLY REQUESTED THE ASSESSING OFFICER TO PROVIDE A C OPY OF THE ALLEGED STATEMENT TAKEN ON OATH OF SHRI SOHAN RAJ MEHTA AND GRANT AN OPPORTUNITY TO CROSS EXAMINE SHRI SOHAN RAJ MEHTA. REFERRING TO PAGE 18 AND 19 OF THE ASSESSMENT ORDER THE LD. COUNS EL FOR THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO THE OBSERVATIONS MAD E BY 32 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 THE ASSESSING OFFICER WHERE HE HAS DISCUSSED THE EVIDENTIA RY VALUE OF THIRD PARTY EVIDENCE. HE SUBMITTED THAT THE ASSESSING O FFICER IN THE INSTANT CASE HAS GONE ON MERE PRESUMPTIONS WITHOUT BRIN GING ANY COGENT MATERIAL OR EVIDENCE. SO FAR AS THE APPLICATION OF P ROVISIONS OF SECTION 68, 69 AND 69A TO 69D ARE CONCERNED HE SUBMIT TED THAT THESE PROVISIONS ARE NOT APPLICABLE TO THE ASSESSEE. 32. SO FAR AS THE APPLICATION OF PROVISIONS OF SECTION 68 IS CONCERNED HE SUBMITTED THAT THE SAME APPLIES TO ANY SU M FOUND CREDITED IN THE BOOKS OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATUR E AND SOURCE THEREOF OR THE EXPLANATION OFFERED BY HIM IS NOT SATISFACTORY ACCORDING TO THE ASSESSING OFFICER, THEN THE SUM SO CREDITED MAY B E CHARGED TO INCOME TAX ON THE INCOME OF THE ASSESSEE OF THAT PREVIOU S YEAR. HOWEVER, NO SUCH CREDIT IN THE BOOKS OF THE ASSESSEE WA S FOUND. THEREFORE, THIS PROVISIONS IS NOT APPLICABLE. 33. SO FAR AS THE APPLICATION OF PROVISIONS OF SECTION 69 IS CONCERNED THE SAME RELATES TO UNEXPLAINED INVESTMENT. THERE IS NO SUCH INVESTMENT EITHER MADE BY THE ASSESSEE NOR FOUND DURING THE COURSE OF SEARCH. THEREFORE, SECTION 69 IS ALSO NOT APPLICAB LE. SO FAR AS APPLICATION OF PROVISIONS OF SECTION 69A TO 69D ARE CONC ERNED THE SAME APPLIES TO UNEXPLAINED MONEY, AMOUNT OF INVESTMENTS E TC. NOT FULLY DISCLOSED IN BOOKS OF ACCOUNT, UNEXPLAINED EXPENDITURE OR AMOUNT BORROWED OR REPAID ON HUNDI. NONE OF THE ABOVE PROVISIONS ARE APPLICABLE TO THE ASSESSEE SINCE NEITHER ANY HUGE AM OUNT WAS FOUND NOR WAS THERE ANY SUCH HUGE UNEXPLAINED INVESTMEN T OR UNEXPLAINED EXPENDITURE ETC. FOUND DURING THE COURSE OF SE ARCH. THEREFORE, THE ABOVE PROVISIONS ARE ALSO NOT APPLICABLE. 33 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 34. REFERRING TO THE DECISION OF THE PUNE BENCH OF THE T RIBUNAL IN THE CASE OF SHRI VINIT RANAWAT VS. ACIT VIDE ITA NOS. 1105 & 1106/PN/2013 ORDER DATED 12-06-2015 HE SUBMITTED THA T IDENTICAL ISSUE WAS DECIDED BY THE TRIBUNAL BY FOLLOWING THE DECISIONS OF VARIOUS BENCHES OF THE TRIBUNAL AND THE ADDITION MADE IN THE HANDS OF THE ASSESSEE ON THE BASIS OF THE SEARCH CONDUCTED A T THE PREMISES OF SHRI MITHULAL AT BANGALORE ON 09-10-2009 WAS DELETED. TH EREFORE, THIS BEING A COVERED MATTER THE GROUND RAISED BY THE A SSESSEE SHOULD BE ALLOWED. 35. REFERRING TO THE DECISION OF THE COORDINATE BENCH OF T HE TRIBUNAL IN THE CASE OF DHARIWAL INDUSTRIAL LTD. VS. ACIT HE SUBMITTED THAT THE ADDITION MADE IN HIS HANDS ON ACCOUNT OF UNDISCLOSED INCOME BASED ON THE PAPERS FOUND WITH SHRI MIT HULAL JAIN HAS BEEN DELETED. REFERRING TO QUESTION NO.24 OF THE S TATEMENT RECORDED U/S.132(4) OF SHRI RASIKLAL M. DHARIWAL, THE LD. COUN SEL FOR THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO THE FO LLOWING REPLY GIVEN BY SHRI RASIKLAL M. DHARIWAL : ANS : I ACCEPT THAT AN AGGREGATE AMOUNT OF RS.12 LAK HS HAS BEEN GIVEN BY ME TO SHRI S. BALAN, ONE CHIT OF RS.7 LAKHS HAS BEEN SI GNED BY ME AND ANOTHER CHIT OF RS.5 LAKHS HAS BEEN SIGNED BY MY SON. H OWEVER, THE SUPPORTING EVIDENCES IN RESPECT OF THIS IS NOT AVAILABLE WITH ME AT PRESENT. BUT AS REGARDS THE CLAIM THAT THIS AMOUNT OF RS.12 LAKHS IS ACTUALLY RS.12 CRORES IS NOT ACCEPTABLE. MY BUSINESS EXP EDIENCIES REQUIRE THAT I HAVE TO INCUR A NUMBER OF EXPENSES FOR GETTING SANCTIONS ETC. AND FOR WHICH I CANNOT DISCLOSE THE PURPOSES, NAME OF RECIPIENTS ETC. HE ALSO RELIED ON THE FOLLOWING DECISIONS : 1. ACIT VS. MISS LATA MANGESHKAR REPORTED IN 97 ITR 696 (B OM.) 2. KISHINCHAND CHELLARAM VS. CIT REPORTED IN 4 TAXMANN 2 9 (SC) 36. REFERRING TO THE DECISION OF THE ITAT, AHMEDABAD BENCH IN THE CASE OF SHRI MUSHTAFAMIA SHEIKH HE SUBMITTED THAT SHRI SOH AN RAJ 34 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 MEHTA HAD RETRACTED FROM THE STATEMENT. HE SUBMITTED THAT ALTHOUGH THE ASSESSEE DOES NOT HAVE SUCH RETRACTION S TATEMENT, HOWEVER, IN VIEW OF THE DECISION OF THE AHMEDABAD BENCH O F THE TRIBUNAL IT HAS TO BE HELD THAT WHEN THE SAME PERSON HA S RETRACTED FROM HIS STATEMENT, HIS ORIGINAL STATEMENT CANNOT BE USED AGAINST THE ASSESSEE. FURTHER, IF SUCH UNACCOUNTED MONEY WAS RECEIVED FR OM DHARIWAL GROUP THEN DURING THE COURSE OF SEARCH ON THE ASSESSEE, SOME EVIDENCE WOULD HAVE BEEN FOUND IN THE FORM OF LOOSE PAPERS OR UNACCOUNTED ASSETS, ETC. HOWEVER, NO SUCH THINGS WERE FO UND. THIS CLEARLY INDICATES THAT THERE IS NO JUSTIFICATION TO HOLD THA T THE ASSESSEE HAS RECEIVED THE PAYMENTS FROM DHARIWAL GROUP. 37. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE PAPERS WERE FOUND FROM ONE MR. MITHULAL OF BANGALORE WHICH WERE MAINTAINED BY SHRI SOHAN RAJ MEHTA, C&F AGENT OF M/S. DHA RIWAL INDUSTRIES LTD. REFERRING TO THE PROVISIONS OF SECTION 132 (4A) HE SUBMITTED THAT THESE PAPERS CAN BE PRESUMED TO BE TR UE, GENUINE AND CORRECT IN THE CASE OF THE PERSON SEARCHED, I.E. SHRI SOHAN RAJ MEHTA AND HE HAS ADMITTED THAT THE PAPERS BELONG TO H IM. ON THE BASIS OF THE PAPERS FOUND WITH SOME THIRD PARTIES ADDITION CANNOT BE MADE IN THE HANDS OF THE ASSESSEE PARTICULARLY WHEN THE RE IS NO BUSINESS CONNECTION BETWEEN THE ASSESSEE AND THAT PAR TY. FOR THE ABOVE PROPOSITION THE LD. COUNSEL FOR THE ASSESSEE REFERR ED TO THE FOLLOWING DECISIONS : A. BOMBAY H.C. LATA MANGESHKAR [97 ITR 696] B. STRAPTEX (INDIA) P. LTD. V. DCIT [84 ITD 320 (MU M)] C. CBI V. V. C. SHUKLA [3 SCC 410 (SC)] D. PRARTHANA CONSTRUCTION P. LTD. V. DCIT [118 TAXMAN 112 (AHD.)] E. UNIQUE ORGANIZERS & DEVELOPERS P. LTD. V. D CIT [118 TAXMAN 147 (AHD.)] 35 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 38. REFERRING TO THE STATEMENT OF SHRI SOHAN RAJ MEHTA R ECORDED DURING THE COURSE OF SEARCH PROCEEDINGS U/S.132, A COPY OF WHICH IS PLACED AT PAGES 100 TO 147 OF THE PAPER BOOK, THE LD. C OUNSEL FOR THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO QUESTION N O.33 PUT TO MR. MEHTA. REFERRING TO THE REPLY GIVEN BY MR. MEHTA THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT MR. MEHTA HAS CLARIFIED TH AT HE HAS GIVEN THE ADVANCES AS PER THE INSTRUCTIONS OF SHRI DHA RIWAL TO THE BEARER OF THE CHITS. HE HAS NEVER IDENTIFIED THE ASSESSEE . HE SUBMITTED THAT WHEN THE PERSONS WERE GIVEN THE MONEY ON THE BASIS OF CHITS IN THAT CASE THE SAME MIGHT HAVE BEEN GIVEN TO SOME OTHER PERSON. THEREFORE IT DOES NOT MEAN THAT THE ASSESSEE HAS RECEIVED THE AMOUNT FROM MR. MEHTA. HE ALSO RELIED ON VARIOUS DE CISIONS FILED IN THE LEGAL COMPUTATION. 39. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER H AND STRONGLY SUPPORTED THE ORDER OF THE CIT(A). HE SUBMITTE D THAT THE PAPERS FOUND FROM THE RESIDENCE OF MR. MITTULAL WHICH WAS MIN UTELY MAINTAINED BY SHRI SOHAN RAJ MEHTA CLEARLY INDICATES THA T ASSESSEE HAS RECEIVED AN AMOUNT OF RS. 14.35 CRORES FROM THE DHA RIWAL GROUP. ALL THESE THINGS ARE WITHIN THE EXCLUSIVE KNOWLEDGE OF THE A SSESSEE, SHRI SOHAN RAJ MEHTA, SHRI RASIKLAL M.DHARIWAL AND SHRI PRAK ASH MANIKCHAND DHARIWAL OF M/S. DHARIWAL INDUSTRIES LTD. RE FERRING TO PAGES 249 TO 326 OF THE PAPER BOOK CONTAINING THE CO PIES OF VARIOUS CHITS FOUND FROM MR. SOHAN RAJ MEHTA, THE LD. DEPARTMENTA L REPRESENTATIVE SUBMITTED THAT THE SAME CONTAINS THE NA ME OF THE ASSESSEE WITH VARIOUS AMOUNTS AGAINST HIS NAME. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT A THOROUGH DISCUSSION WAS MADE IN THE SAID ASSESSMENT ORDER CONTAINING THE MO DUS 36 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 OPERANDI AND ADDITIONS HAVE BEEN MADE IN THE CASE OF D HARIWAL INDUSTRIES LTD. 40. REFERRING TO THE COPY OF STATEMENT OF SHRI SOHAN RAJ MEHTA RECORDED U/S.132(4) ON 10-10-2009 AND HIS STATEMENT REC ORDED U/S.131 ON DIFFERENT DATES, COPIES OF WHICH ARE PLACED AT PA GES 100 TO 147 HE SUBMITTED THAT MR. MEHTA HAD CATEGORICALLY ST ATED THAT ON THE BASIS OF INSTRUCTIONS GIVEN BY SHRI RASIKLAL M. DHARIWAL/ SHRI PRAKASH M. DHARIWAL CASH HAS BEEN HANDED OVER TO THE BEARERS OF THE SLIPS. THEREFORE, UNDER THESE CIRCUMSTANCES, WHEN THIN GS ARE CLEAR THAT MONEY HAS BEEN GIVEN BY DHARIWAL GROUP TO T HE ASSESSEE AMOUNTING TO RS. 35 LAKHS FOR A.Y. 2004-05, RS.2 CRORES FOR A.Y.2006-07 AND RS.12 CRORES FOR A.Y. 2008-09, THE ASSESS ING OFFICER WAS JUSTIFIED IN MAKING THE ADDITION AND THE LD.CIT(A) WAS JU STIFIED IN CONFIRMING THE ADDITION. HE SUBMITTED THAT THE VARIOUS D ECISIONS RELIED ON BY THE LD. COUNSEL FOR THE ASSESSEE ARE NOT AP PLICABLE TO THE FACTS OF THE PRESENT CASE AND ARE DISTINGUISHABLE. HE AC CORDINGLY SUBMITTED THAT THE ORDER OF THE CIT(A) BE UPHELD. 41. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND TH E CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. WE FIND IN THE INSTANT CASE A SEARCH U/S.132 OF THE I.T. ACT WAS CONDU CTED AT THE PREMISES OF MR. MITTULAL AT BANGALORE ON 09-10-2009 WHEREI N CERTAIN INCRIMINATING DOCUMENTS WERE FOUND BELONGING TO THE DHARIW AL GROUP. THOSE DOCUMENTS WERE MAINTAINED BY ONE SHRI SOH AN RAJ MEHTA, C&F AGENT OF M/S. DHARIWAL INDUSTRIES LTD. IN HIS STATEMENT RECORDED U/S.132(4) MR. MEHTA HAD STATED THAT HE WAS EFFE CTING 37 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 UNACCOUNTED SALES OF GUTKHA OF DHARIWAL INDUSTRIES LTD. A ND THE SALE PROCEEDS WERE DEPLOYED AS PER THE INSTRUCTIONS OF S HRI RASIKLAL M. DHARIWAL AND HIS SON SHRI PRAKASH M. DHARIWAL. IN SOM E OF THE SEIZED PAPERS NAME OF CERTAIN PERSONS ARE APPEARING. ON THE BASIS OF THOSE NAMES AND ENTRIES AGAINST SAID NAMES, THE ASSESSIN G OFFICER DECIPHERED THE AMOUNT AS RS. 35 LAKHS FOR A.Y. 2004-05, RS .2 CRORES FOR A.Y. 2006-07 AND RS.12 CRORES FOR A.Y. 2008-09 AS RECEIVED BY THE ASSESSEE. ALTHOUGH MR. MEHTA IN HIS STATEMENT RECORDED U/S.132(4) HAS STATED THAT THIS AMOUNT WAS PAID BY DHARIWAL INDUS TRIES TO THE ASSESSEE THROUGH HIM, HOWEVER, THE STATEMENT APPEARS T O HAVE BEEN RETRACTED AS PER THE FINDINGS GIVEN BY THE AHMEDABAD BE NCH OF THE TRIBUNAL IN THE CASE OF MUSTAFAMIYA H. SHEIKH. 42. IT IS THE CASE OF THE ASSESSING OFFICER THAT THE ASSES SEE WAS ASSOCIATED WITH DHARIWAL GROUP FOR A LONG TIME AND THE A SSESSEES NAME APPEARING IN THE SEIZED DOCUMENT TALLY WITH THE REG ULAR BUSINESS ASSOCIATION WITH M/S. DHARIWAL INDUSTRIES LTD. AN D IF TEST OF HUMAN PROBABILITY IS APPLIED TO THE FACTS OF THE CASE IT BEC OMES EVIDENT THAT ASSESSEE WAS PART OF THE ENTIRE SCHEME OF UNACCOUNTED BUSINESS CHAIN OF M/S. DHARIWAL INDUSTRIES LTD. THE ROLE O F THE ASSESSEE WAS THAT OF A CO-CONSPIRATOR. DURING THE COUR SE OF SEARCH AND POST SEARCH PROCEEDINGS MR. SOHAN RAJ MEHTA HAD S TATED THAT THE SEIZED BOOKS OF ACCOUNT, LOOSE SHEETS AND OTHER DO CUMENTS, I.E. A/M/01 AND A/M/29 WERE ACTUALLY BELONGING TO THE C&F B USINESS OF M/S. DHARIWAL INDUSTRIES LTD. HE HAD CATEGORICALLY STATED THAT PAGE 34 OF A/M/08 AND OTHER RELATED DOCUMENTS WERE WRITTEN BY HIM AND MOST OF THE PAGES WERE IN MARWADI LANGUAGE. THE STATEME NT OF MR. MEHTA CLEARLY EXPLAINS THE ENTIRE UNACCOUNTED BUSINESS CHAIN AND UNACCOUNTED BUSINESS TRANSACTIONS OF M/S. DHARIWAL INDUS TRIES LTD. 38 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 MR. SOHAN RAJ MEHTA, THE AUTHOR OF THE SEIZED DOCUMENT IN HIS STATEMENT U/S.132(4) HAS EXPLAINED TRUE IMPACT OF THE CONT ENTS OF THE SEIZED DOCUMENTS AND HAS ALSO ACKNOWLEDGED AND SUB STANTIATED THE FACT THAT THE SEIZED DOCUMENTS BELONG TO M/S. DHARI WAL INDUSTRIES LTD. AND THEREFORE HIS STATEMENT HAS IMMENSE EVIDENTIARY VALUE. BASED ON THE ABOVE AND ON THE BASIS OF VARIOUS O THER OBSERVATIONS IN THE ASSESSMENT ORDER THE ASSESSING OFFICE R MADE ADDITION OF RS. 35 LAKHS IN A.Y. 2004-05, RS.2 CRORES IN A.Y. 2 006-07 AND RS.12 CRORES IN A.Y. 2008-09 AS UNDISCLOSED INCOME OF THE ASSESSEE WHICH HAS BEEN UPHELD BY THE CIT(A). 43. IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSES SEE THAT FROM THE VERY BEGINNING THE ASSESSEE WAS DENYING TO HAV E RECEIVED ANY SUCH AMOUNT FROM MR. SOHAN RAJ MEHTA. ACCORDING TO HIM, NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE ON TH E BASIS OF PAPERS FOUND IN THE PREMISES OF THIRD PARTY. FURTHER, THE ASSESSEE BEING A SMALL TAXPAYER, SOME EVIDENCE SHOULD HAVE BEEN FOU ND FROM THE OFFICE OR RESIDENCE OF THE ASSESSEE TO SHOW THAT IN FA CT HE HAS RECEIVED SUCH HUGE AMOUNT. SIMILARLY, THE STATEMENT OF MR . RASIKLAL M. DHARIWAL IS CONTRARY TO THE FINDING OF THE DEPARTMENT. IT IS ALSO THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT D IFFERENT BENCHES OF THE TRIBUNAL UNDER IDENTICAL FACTS AND CIRCUMST ANCES HAVE DELETED THE ADDITION MADE BY THE ASSESSING OFFICER ON THE BASIS OF NOTINGS FOUND FROM THE PREMISES OF MR. SOHAN RAJ MEHTA. 44. WE FIND SOME FORCE IN THE ARGUMENT OF THE LD. COUNS EL FOR THE ASSESSEE. WE FIND IDENTICAL ISSUE HAD COME UP BEFORE THE T RIBUNAL IN THE CASE OF SHRI VINIT RANAWAT. THE TRIBUNAL IN ITA NOS. 1 105 & 1106/PN/2013 ORDER DATED 12-06-2015 FOR A.YRS. 2006-07 & 2007- 39 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 08 DELETED THE ADDITION OF RS.1 LAKH IN A.Y. 2006-07 AND R S.20 CRORES IN A.Y. 2007-08 BY OBSERVING AS UNDER : 37. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A ) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSI DERED THE VARIOUS DECISIONS CITED BEFORE US. WE FIND IN THE INSTA NT CASE A SEARCH U/S.132 OF THE I.T. ACT WAS CONDUCTED AT THE PREMISES O F MR. MITTULAL AT BANGALORE ON 09-10-2009 WHEREIN CERTAIN INCRIMINATI NG DOCUMENTS WERE FOUND BELONGING TO THE DHARIWAL GROUP. THOSE D OCUMENTS WERE MAINTAINED BY ONE SHRI SOHAN RAJ MEHTA, C&F AGENT O F M/S. DHARIWAL INDUSTRIES LTD. IN HIS STATEMENT RECORDED U/S.132(4) M R. MEHTA HAD STATED THAT HE WAS EFFECTING UNACCOUNTED SALES OF GUTKH A OF DHARIWAL INDUSTRIES LTD. AND THE SALE PROCEEDS WERE DEPLOYED AS P ER THE INSTRUCTIONS OF SHRI RASIKLAL M. DHARIWAL AND HIS SON SH RI PRAKASH M. DHARIWAL. IN SOME OF THE SEIZED PAPERS NAME OF CERTAI N PERSONS ARE APPEARING WHICH CONTAIN THE NAME EITHER VINIT OR VINIT RANAWAT. ON THE BASIS OF THOSE NAMES AND ENTRIES AGAINST SAID NAMES, TH E ASSESSING OFFICER DECIPHERED THE AMOUNT AS RS. 1 CRORE FOR A.Y. 2006-07 AND RS.20 CRORES FOR A.Y. 2007-08 AS RECEIVED BY THE ASSESSEE SHRI VINIT RANAWAT. ALTHOUGH MR. MEHTA IN HIS STATEMENT RECORDED U/S.132(4 ) HAS STATED THAT THIS AMOUNT WAS PAID BY DHARIWAL INDUSTRIES TO SHRI VIN IT RANAWAT THROUGH HIM, HOWEVER, THE STATEMENT APPEARS TO HAVE B EEN RETRACTED AS PER THE FINDINGS GIVEN BY THE AHMEDABAD BENCH OF THE TRIBUNAL IN THE CASE OF MUSTAFAMIYA H. SHEIKH. 38. IT IS THE CASE OF THE ASSESSING OFFICER THAT THE ASSESSE E WAS ASSOCIATED WITH DHARIWAL GROUP FOR A LONG TIME AND TH E ASSESSEES NAME APPEARING IN THE SEIZED DOCUMENT TALLY WITH THE REGU LAR BUSINESS ASSOCIATION WITH M/S. DHARIWAL INDUSTRIES LTD. AND IF TE ST OF HUMAN PROBABILITY IS APPLIED TO THE FACTS OF THE CASE IT BE COMES EVIDENT THAT ASSESSEE WAS PART OF THE ENTIRE SCHEME OF UNACCOUNTED BUSI NESS CHAIN OF M/S. DHARIWAL INDUSTRIES LTD. THE ROLE OF THE ASSESSEE WA S THAT OF A CO- CONSPIRATOR. DURING THE COURSE OF SEARCH AND POST SEARC H PROCEEDINGS MR. SOHAN RAJ MEHTA HAD STATED THAT THE SEIZED BOOKS O F ACCOUNT, LOOSE SHEETS AND OTHER DOCUMENTS, I.E. A/M/01 AND A/M/29 WER E ACTUALLY BELONGING TO THE C&F BUSINESS OF M/S. DHARIWAL INDUSTRIE S LTD. HE HAD CATEGORICALLY STATED THAT PAGE 34 OF A/M/08 AND OTHE R RELATED DOCUMENTS WERE WRITTEN BY HIM AND MOST OF THE PAGES WE RE IN MARWADI LANGUAGE. THE STATEMENT OF MR. MEHTA CLEARLY EXPLA INS THE ENTIRE UNACCOUNTED BUSINESS CHAIN AND UNACCOUNTED BUSINESS TRANSA CTIONS OF M/S. DHARIWAL INDUSTRIES LTD. MR. SOHAN RAJ MEHTA, THE AUTHOR OF THE SEIZED DOCUMENT IN HIS STATEMENT U/S.132(4) HAS EXPLAINE D TRUE IMPACT OF THE CONTENTS OF THE SEIZED DOCUMENTS AND HAS ALSO A CKNOWLEDGED AND SUBSTANTIATED THE FACT THAT THE SEIZED DOCUMENTS BELONG TO M/S. DHARIWAL INDUSTRIES LTD. AND THEREFORE HIS STATEMENT HAS IMMENSE E VIDENTIARY VALUE. BASED ON THE ABOVE AND ON THE BASIS OF VARIOUS OTHER OBSERVATIONS IN THE ASSESSMENT ORDER THE ASSESSING OFFICER MADE ADDITIO N OF RS. 1 CRORE FOR A.Y. 2006-07 AND RS.20 CRORES FOR A.Y. 2007 -08 AS UNDISCLOSED INCOME OF THE ASSESSEE WHICH HAS BEEN UPHELD BY THE CIT( A). 39. IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT FROM THE VERY BEGINNING THE ASSESSEE WAS DENYING TO HAVE RECE IVED ANY SUCH AMOUNT FROM MR. SOHAN RAJ MEHTA. ACCORDING TO HIM, NO ADDITION CAN BE 40 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 MADE IN THE HANDS OF THE ASSESSEE ON THE BASIS OF PAPERS F OUND IN THE PREMISES OF THIRD PARTY. FURTHER, THE ASSESSEE BEING A SMALL TAXPAYER, SOME EVIDENCE SHOULD HAVE BEEN FOUND FROM THE RESIDENC E OF THE ASSESSEE TO SHOW THAT IN FACT HE HAS RECEIVED SUCH HUGE A MOUNT. IT IS ALSO THE CASE OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE DEP ARTMENT ITSELF IS TREATING THIS AS SHORT TERM ADVANCE DURING THE COURSE OF SEARCH ACTION. SIMILARLY, THE STATEMENT OF MR. RASIKLAL M. DHARIWAL IS CONTRARY TO THE FINDING OF THE DEPARTMENT. IT IS ALSO THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT DIFFERENT BENCHES OF THE TRIBUNAL UNDER IDENTICAL FACTS AND CIRCUMSTANCES HAVE DELETED THE ADDITION MADE BY THE ASSESSING OFFICER ON THE BASIS OF NOTINGS FOUND FROM THE PREMISES OF MR. SOHAN RAJ MEHTA. 40. WE FIND SOME FORCE IN THE SUBMISSION OF THE LD. COU NSEL FOR THE ASSESSEE. THE ASSESSEE IN THE INSTANT CASE IS AN INDIVIDUAL A ND PROPRIETOR OF M/S. S. CHAINS WHICH IS ENGAGED IN THE BUSINESS OF JOB WORK IN GOLD ORNAMENTS. M/S. S.D.D. AGENCIES IS THE C&F AGENT OF M/ S. DHARIWAL INDUSTRIES LTD. IN THE STATE OF MAHARASHTRA FOR THEIR GUTKHA AND PAN MASALA BUSINESS. A SEARCH AND SEIZURE ACTION ON THE PREM ISES OF MR. MITTULAL AT BANGALORE WAS CARRIED ON 09-10-2009 WHER EIN DOCUMENTS MAINTAINED BY MR. SOHAN RAJ MEHTA, C&F AGENT OF M/S. DHARIWAL INDUSTRIES LTD WERE FOUND. THE ASSESSEES PREMISES WAS ALSO SE ARCHED ON 20-01-2010, I.E. AFTER A PERIOD OF ABOUT 3 MONTH S AND 10 DAYS. DURING THE COURSE OF SEARCH AT THE PREMISES OF THE ASSESSEE HE WAS QUESTIONED ABOUT THE DOCUMENTS FOUND FROM THE PREMISES OF MR. MIT TULAL WHICH CONTAIN DOCUMENTS MAINTAINED BY MR. SOHAN RAJ MEHTA. THE ASSESSEE AT THE TIME OF SEARCH HAD COMPLETELY DENIED TO HAVE REC EIVED ANY SUCH AMOUNT FROM MR. SOHAN RAJ MEHTA. RELEVANT QUESTION AND ANSWER OF THE ASSESSEE RECORDED DURING THE COURSE OF SEARCH U/S.132(4) A RE AS UNDER (PAPER BOOK PAGE 41 AND 42) : Q.33 A SEARCH ACTION U/S.132 WAS CARRIED OUT ON 0-10- 2009 IN THE CASE OF SHRI MITTULAL BY INVESTIGATION WING OF BANGALORE. IN COURSE OF THE SEARCH ACTION CERTAIN INCRIMINATING DOCUMENTS RELATED TO SHRI SOHANRAJ MEHTA WERE FOUND IN CONNECTION WITH C&F AGENCY OF R MD GROUP OF PAN MASALA AND GUTKHA PRODUCTS. SHRI SOHANRAJ MEHTA WAS A LSO COVERED BY THE INVESTIGATION WING OF BANGALORE AND ON BEING CON FRONTED WITH THESE INCRIMINATING DOCUMENTS, SHRI SOHANRAJ STATED THAT TH E SAID PAGES INTERALIA CONTAIN THE NOTINGS REGARDING HANDING OVER OF RS.21.22 CRORES TO SHRI VINIT RANAWAT OF MUMBAI WHICH IS C&F AGENT O F RMD GROUP. SHRI SOHANRAJ ALSO STATED THAT THE SAID PAYMENTS IN CASH WERE MADE AS PER THE DIRECTION OF SHRI R.M. DHARIWAL AND SHRI PRAKASH DHA RIWAL. PLEASE STATE WHETHER THE SAID CASH OF RS.21.22 CR RECEIVED FROM SHR I SOHANRAJ MEHTA ON ACCOUNT OF RMD GROUP ARE REFLECTED IN YOUR BOOKS OF ACCOUNTS. A.33 I HAVE GONE THROUGH THE DOCUMENTS SHOWN TO ME AN D SAY THAT I HAVE NEVER RECEIVED THIS AMOUNT FROM SHRI SOHANRAJ M EHTA. HENCE, THE SAID PAYMENTS ARE NOT REFLECTED IN MY BOOKS OF ACCOUNT . Q.34 A SEARCH ACTION U/S.132 WAS CARRIED OUT ON 26-1-2 010 IN THE CASE OF DHARIWAL GROUP. IN THE COURSE OF STATEMENT RECORD ED U/S.132(4) SHRI PRAKASH DHARIWAL HAS EXPLICITLY STATED THAT THE ABOVE REFERRED PAYMENTS HAVE BEEN MADE BY SHRI SOHANRAJ MEHTA AT THE INSTRUC TION OF MY FATHER SHRI RASIKLAL DHARIWAL AS SHORT TERM ADVANCE. I AM SH OWING YOU THE RELEVANT PORTION OF THE SAID STATEMENT. PLEASE GO THR OUGH THE SAME AND STATE WHETHER THE PAYMENTS IN CASH RECEIVED FROM SOHAN RAJ MEHTA AT THE DISCRETION OF SHRI R.M. DHARIWAL ARE RECORDED IN YOU R BOOKS OF ACCOUNT. 41 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 A.34 I HAVE GONE THROUGH THE STATEMENT SHOWN TO ME OF SHRI PRAKASH DHARIWAL RECORDED ON 20-01-2010, HOWEVER, I HAVE NE VER RECORDED THE AMOUNT MENTIONED FROM SHRI SOHANRAJ MEHTA HENCE THE SAID PAYMENT ARE NOT RECORDED IN MY BOOKS. Q.35 THE STATEMENT OF SHRI SOHANRAJ MEHTA RECORDED U /S.132(4) ON 09- 10-2009 HAS BEEN CONFIRMED BY SHRI PRAKASH DHARIWAL I N THE STATEMENT RECORDED U/S.132(4) ON 20-01-2010. THUS, BOTH SHRI S OHANRAJ MEHTA AND SHRI PRAKASH R. DHARIWAL HAVE STATED ON OATH THAT PAYMENTS IN CASH OF RS.21.22 CR HAS BEEN MADE TO YOU AT THE DIRECTION OF SHRI RASIKLAL DHARIWAL BY SHRI SOHANRAJ MEHTA. AS THE STATEMENTS HA VE BEEN GIVEN BY THEM ON OATH, YOU ARE THEREFORE ONCE AGAIN REQUESTED TO GO THROUGH THE ABOVE REFERRED DOCUMENTS/STATEMENT AND STATE WHETHER THE SAID CASH RECEIPTS ARE REFLECTED AND RECORDED IN YOUR REGULAR BOOKS OF ACCOUNTS. A.35 AS ALREADY STATED EARLIER, I HAVE NEVER RECEIVED ANY CASH FROM SOHANRAJ MEHTA AT THE INSTANT OF SHRI RASIKLAL DHARIW AL OR PRAKASH DHARIWAL. HENCE, NO SUCH CASH IS RECORDED IN MY REGUL AR BOOKS OF ACCOUNTS. 41. IT IS ALSO PERTINENT TO NOTE HERE THAT THE SEARCH PARTY DURING THE COURSE OF SEARCH AT THE PREMISES OF THE ASSESSEE HAS NOT FOU ND ANY EVIDENCE WHATSOEVER TO SUBSTANTIATE THAT THE ASSESSEE HAS I N FACT RECEIVED ANY AMOUNT EITHER FROM MR. SOHAN RAJ MEHTA OR FROM MR. RASIKLAL MANIKCHAND DHARIWAL/MR. PRAKASH M. DHARIWAL OR M/S. DHARIWAL INDUSTRIES LTD. NO UNACCOUNTED ASSET, INVESTM ENT OR LOOSE PAPER EVIDENCING SUCH HUGE RECEIPT HAS BEEN FOUND. F URTHER, WE FIND FROM THE QUERY RAISED DURING THE COURSE OF SEARCH THAT THE AUTHORISED OFFICER HAS TREATED THE SAME AS SHORT TERM ADVANCE GI VEN TO THE ASSESSEE. THEREFORE, WE FIND SOME FORCE IN THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT IF THE AMOUNT IS A SHORT TER M ADVANCE THE QUESTION OF THE SAME CONSTITUTING INCOME IN THE HANDS O F THE ASSESSEE DOES NOT ARISE. WE FIND FROM THE STATEMENT OF MR. SOH AN RAJ MEHTA RECORDED DURING THE COURSE OF SEARCH PROCEEDINGS U/S.13 2 ON 09-10- 2009 WHERE MR. SOHAN RAJ MEHTA IN HIS ANSWER TO QUESTI ION NO.31 HAS REPLIED AS UNDER : Q.31 PLEASE STATE HOW THESE TRANSACTIONS ARE UNACCOUN TED? ANS: M/S DHARIWAL INDUSTRIES LTD HAS A MANUFACTURING UNIT IN SINGSANDRA, BANGALORE. OUR FIRM M/S MEHTA ASSOCIATES IS A SOLE C & F AGENT OF THE COMPANY FOR THEIR PRODUCT RMD GUTKA SIN CE 1994-95. I HAVE VERY LONG BUSINESS AND PERSONAL ASSOCIATION WITH MR. RASK ILAL MANIKCHAND DHARIWAL. HE CONSIDERS ME AS CLOSE CONFIDENT . AS PER THE REQUIREMENT OF THE DISTRIBUTORS, I PLACE ORDER FOR DI SPATCH OF STOCK EITHER WITH MR. PRASHANT BAFNA OR MR. JEEVAN SANCHETI, WHO ARE INCHARGE OF THE FACTORY AT BANGALORE. TO SEND A DISPATCH WITH BILL OR WITHOUT BILL IS DECIDED AS PER THEIR CHOICE AND THE STOCK OF GUTKA I S SENT BY MATADOR VAN TO THIS OFFICE. THE STOCK THAT COMES WITHOUT BILL IS IMMEDIATELY DISPATCHED TO OUR CUSTOMERS. WE KEEP ONLY THE STOCK THA T COMES WITH BILL IN OUR OFFICE. THE STOCK THAT COMES WITHOUT BILL IS DI SPATCHED IMMEDIATELY TO OUR CUSTOMERS. I HAVE BEEN INVOLVED IN THESE TRANSAC TIONS FOR LONGTIME AND I AM RESPONSIBLE FOR ALL THE DESPATCHES AND ALSO FOR THE COLLECTIONS FROM OUR CUSTOMERS; NORMALLY, WE EXTEND CREDIT OF 7-1 0 DAYS TO OUR CUSTOMERS. THEY REMIT CONSIDERATION FOR THE GUNTKA STOC K RECEIVED BY 42 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 THEM. PERIODICALLY, I SEND THESE COLLECTIONS TO MR. RA SIKLAL OR HIS SON MR. PRASHANT AS PER THEIR INSTRUCTIONS. 42. SIMILARLY, IN HIS ANSWER TO QUESTION NOS. 33 AND 34 HE HAS REPLIED AS UNDER : Q.33 I AM SHOWING YOU EXHIBIT MARKED AS A/M/29, SEI ZED FROM THE RESIDENCE OF MR. MITULAL, NO. 219, 68 TH , CROSS, 5 TH BLOCK, RAJAJI NAGAR, BANGALORE. PLEASE GO THROUGH THESE LOOSE SHEETS SERIALLY NUMBERED 1-61 AND STATE THE CONTENTS WRITTEN OVER THESE LOOSE SHEETS? ANS : I HAVE GONE THROUGH THE EXHIBIT MARKED A/M/2 9. I HAVE PLACED MY SIGNATURE ON PAGE HO. 24 OF THIS EXHIBIT IN CONFIR MATION OF HAVING SEEN IT. THIS EXHIBIT CONTAINS LOOSE SLIPS SERIALLY NUMBER 1-61. SLIPS MARKED AS SL.NO. 4 TO 8, 49 TO 50, 58 ARID 59 CONTAI N THE NOTINGS OF MR.RASKILAL MANIKCHAND DHARIWAL AND HIS SON MR; MR. PR AKASH. THE NOTINGS ON THESE SLIPS CONTAIN THEIR DIRECTIONS TO ME TO HANDOVER THE AMOUNT MENTIONED IN THE SLIP TO THE PERSON WHO BRINGS THE SLIP. SOMETIMES, THEY DO NOT WRITE ANY NAME ON THE SLIP, I HAVE TO HANDOVER THE MONEY MENTIONED IN THE SLIP TO THE BEARER OF THE SLIPS. MOST OF THE TIMES, I MAY NOT KNOW THE PERSON BUT STILL I MAKE PAYM ENT TO THEM AS I HAVE STANDING INSTRUCTIONS FROM MR.RASKILAL MANIKCHAND DHARIWAL AND HIS SON MR. PRAKASH TO HANDOVER THE MONEY TO THE BEARE R OF THE SLIP. THE MONEY IS PAID OUT OF THE COLLECTIONS RECEIVED FROM TH E DISTRIBUTORS TOWARDS UNACCOUNTED SALES. Q.34 DO YOU OBTAIN ANY RECEIPT FROM THE PARTIES TO WHOM YOU HAND OVER CASH AS PER THE INSTRUCTIONS OF MR.RASKILAL MANIKCHAND D HARIWAL AND HIS SON MR. PRAKASH ANS : NO. IT IS NOT REQUIRED. AFTER RECEIPT OF CASH, THEY LEAVE THE SLIP WITH ME. THAT IS CONSIDERED AS EVIDENCE. 43. FROM THE ABOVE IT IS SEEN THAT MR. SOHAN RAJ MEH TA HAS NEVER IDENTIFIED THE ASSESSEE. IT IS ALSO AN ADMITTED FACT THA T THE REQUEST OF THE ASSESSEE TO CROSS EXAMINE MR. SOHAN RAJ MEHTA WAS NOT GRAN TED ON THE GROUND THAT THE SAME WILL NOT SERVE ANY PURPOSE. 44. WE FURTHER FIND MR. RASIKLAL MANIKCHAND DHARIWAL IN HIS STATEMENT RECORDED U/S.132(4) ON 21-01-2010 IN REPLY TO QUESTION NO. 9, 11 AND 12 HAS ANSWERED AS UNDER (PAGE 124 OF PAPER BO OK FILED BY LD. DR) : Q9. SIMILARLY, I AM SHOWING YOU PAGE NO.34 OF BUNDL E NO.A/M/29 SEIZED ON 9/10/2009. KINDLY GO THROUGH THE CONTENTS A ND PLEASE EXPLAIN. ANS. THIS IS A SIGNED CHIT IN MY HANDWRITING DT.20/2/20 07 WHEREIN I HAVE INSTRUCTED SHRI VINIT RANAWAT TO HAND OVER AN A MOUNT OF RS.500000-00 (FIVE LAKHS). Q11. SIMILARLY, I AM SHOWING YOU PAGE NO.24 OF BUNDL E NO.A/M/29 SEIZED ON 9/10/2009. KINDLY GO THROUGH THE CONTENTS AND PLEASE EXPLAIN. ANS. THIS IS A SIGNED CHIT IN MY HANDWRITING DT.10/11/2 006 WHEREIN I HAVE INSTRUCTED SHRI VINIT RANAWAT TO HAND OVER AN A MOUNT OF RS.500000-00 (FIVE LAKHS). 43 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 Q.12 SIMILARLY, I AM SHOWING YOU PAGE NO.22 OF BUNDL E NO.A/M/29 SEIZED ON 9/10/2009. KINDLY GO THROUGH THE CONTENTS AND PLEASE EXPLAIN. ANS. THIS IS A SIGNED CHIT IN MY HANDWRITING WHEREIN I HAVE INSTRUCTED SHRI VINIT RANAWAT TO HAND OVER AN AMOUNT OF RS.5000 0-00 (FIFTY THOUSAND). 45. FROM THE ABOVE, IT IS SEEN THAT AT ONE PLACE THE DEPARTMENT IS TREATING THE AMOUNT AS SHORT TERM ADVANCE BY MR. RAS IKLAL MANIKCHAND DHARIWAL TO THE ASSESSEE (QUESTION NO.34 TO ASSESSEE U/S.132 (4) ON 20- 01-2010). SIMILARLY, MR. RASIKLAL MANIKCHAND DHARIW AL IN HIS REPLY TO QUESTION NOS. 9, 11 AND 12 RECORDED U/S.132(4) OF THE I.T. ACT HAS STATED THAT HE HAS INSTRUCTED MR. VINIT RANAWAT TO HAND OVER THE VARIOUS AMOUNTS. THEREFORE, IT IS NOT CLEAR AS TO WHETHER THE ASSESSING OFFICER IS CORRECT OR THE INVESTIGATION WING AT THE TIME OF EXA MINING THE ASSESSEE ARE CORRECT OR THE ANSWER OF MR. RASIKLAL MANIKCHAND DHARIWAL IS CORRECT. 46. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF AZI ENDE COLORI NAZIONALI AFFINI, ITALY (SUPRA) HAS HELD THAT THE AG REEMENT HAD TO BE CONSIDERED AS A WHOLE AND THAT THE DIFFERENT CLAUSES IN THE AGREEMENT COULD NOT BE CONSIDERED SEPARATELY. THEREFORE, WHEN THE DEPARTMENT ITSELF IS TREATING THE SAME AT ONE PLACE AS SHORT TERM ADVANCE, THEREFORE, THE QUESTION OF TREATING THE SAME AS INCOME OF THE ASSESSE E DOES NOT ARISE. IT IS ALSO AN ADMITTED FACT THAT THE PAPERS WER E FOUND WITH MR. SOHAN RAJ MEHTA AT BANGALORE. THEREFORE U/S.132(4A) THEY CAN BE PRESUMED TO BE TRUE, GENUINE AND CORRECT ONLY IN THE CASE OF THE SEARCHED PERSON, I.E. MR. SOHAN RAJ MEHTA WHO HAS ADMI TTED THAT THE PAPERS BELONG TO HIM. THEREFORE, WE FIND FORCE IN T HE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT ON THE BASIS OF THE PAP ERS FOUND WITH SOME THIRD PARTY ADDITION CANNOT BE MADE IN THE HAND S OF THE ASSESSEE PARTICULARLY WHEN THERE IS NO BUSINESS CONNECTION BETWE EN THE ASSESSEE AND THAT PARTY. 47. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF ADD L.CIT VS. LATA MANGESHKAR REPORTED IN 97 ITR 696 HAS HELD THAT MERE ENTRIES IN THE ACCOUNTS REGARDING PAYMENT TO THE ASSESSEE WAS NOT SUFFICI ENT AS THERE WAS NO GUARANTEE THAT THE ENTRIES WERE GENUINE IN ABSE NCE OF ANY CORROBORATIVE EVIDENCE. IN THAT CASE, THE INCOME-TA X AUTHORITIES SOUGHT TO ASSESSEE CERTAIN INCOME AS INCOME FROM UNDISCLOSED SOURC ES RECEIVED BY THE ASSESSEE ON THE BASIS OF STATEMENT BY 2 PERSONS THAT THEY HAD PAID MONEY IN BLACK TO THE ASSESSEE AND ENTRIES IN BOOKS BELON GING TO THEM REGARDING ALLEGED PAYMENT TO THE ASSESSEE. THE TRIBUNA L EXAMINED THE STATEMENT MADE BY THE 2 PERSONS AND FOUND THAT THE EVI DENCE TENDERED BY THEM SUFFERED FROM SERIOUS INFIRMITIES. IT HELD THA T MERE ENTRIES IN THE ACCOUNTS REGARDING PAYMENTS TO THE ASSESSEE WAS NOT SU FFICIENT AS THERE WAS NO GUARANTEE THAT THE ENTRIES WERE GENUINE. THE TRIBUNAL THEREFORE HELD THAT THERE WAS NO PROOF THAT THE AMOU NT IN QUESTION REPRESENTED INCOME FROM UNDISCLOSED SOURCES BELONGING TO THE ASSESSEE. ON FURTHER APPEAL BY THE REVENUE, THE HONBLE HIGH COURT HELD THAT THE CONCLUSION OF THE TRIBUNAL HAD BEEN REACHED BY IT ON A PROPER APPRECIATION OF THE EVIDENCE. THIS WAS FINDING OF F ACT BY THE TRIBUNAL AND NO QUESTION OF LAW AROSE AND NO REFERENCE WOULD L IE FROM THE DECISION OF THE TRIBUNAL. ACCORDINGLY, THE APPEAL FILED BY THE REVENUE WAS DISMISSED. 44 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 48. THE HONBLE SUPREME COURT IN THE CASE OF CBI VS. SHRI V. C. SHUKLA REPORTED IN 3 SCC 410 HAS OBSERVED AS UNDER : THE RATIONALE BEHIND ADMISSIBILITY OF PARTIES' BOOKS O F ACCOUNT AS EVIDENCE IS THAT THE REGULARITY OF HABIT, THE DIFFIC ULTY OF FALSIFICATION AND THE FAIR CERTAINTY OF ULTIMATE DETECTION GIVE THEM IN A SUFFICIENT DEGREE A PROBABILITY OF TRUSTWORTHINESS (WIGMORE ON EVIDENCE $ 1546). SINCE, HOWEVER, AN ELEMENT OF SELF INTEREST AND PARTISANSHIP O F THE ENTRANT TO MAKE A PERSON - BEHIND WHOSE BACK AND WITHOUT WHOSE KN OWLEDGE THE ENTRY IS MADE - LIABLE CANNOT BE RULED OUT THE ADDIT IONAL SAFEGUARD OF INSISTENCE UPON OTHER INDEPENDENT EVIDENCE TO FASTEN H IM WITH SUCH LIABILITY, HAS BEEN PROVIDED FOR IN SECTION 34 BY IN CORPORATING THE WORDS SUCH STATEMENTS SHALL NOT ALONE BE SUFFICIENT TO CHARGE ANY PERSON WITH LIABILITY. THE PROBATIVE VALUE OF THE LIABILITY CREATED BY AN ENTRY IN BOOKS OF ACCOUNT CAME UP FOR CONSIDERATION IN CHANDRADHAR VS. GAUHATI BANK [1967 (1) S. C. R. 898]. THAT CASE AROSE OUT OF A SUI T FILED BY GAUHATI BANK AGAINST CHANDRADHAR (THE APPELLANT THEREIN ) FO R RECOVERY OF A LOAN OF RS. 40,000/- . IN DEFENCE HE CONTENDED, INTER ALI A, THAT NO LOAN WAS TAKEN. TO SUBSTANTIATE THEIR CLAIM THE BANK SOLELY RE LIED UPON CERTIFIED COPY OF THE ACCOUNTS MAINTAINED BY THEM UNDER SECTIO N 4 OF THE BANKERS' BOOK EVIDENCE ACT, 1891 AND CONTENDED THAT CERTIFIE D COPIES BECAME PRIMA FACIE EVIDENCE OF THE EXISTENCE OF THE ORIGINA L ENTRIES IN THE ACCOUNTS AND WERE ADMISSIBLE TO PROVE THE PAYMENT OF L OAN GIVEN. THE SUIT WAS DECREED BY THE TRIAL COURT AND THE APPEAL PR EFERRED AGAINST IT WAS DISMISSED BY THE HIGH COURT. IN SETTING ASIDE THE DEC REE THIS COURT OBSERVED THAT IN THE FACE OF THE POSITIVE CASE MADE OU T BY CHANDRADHAR THAT HE DID NOT EVER BORROW ANY SUM FROM THE BANK, T HE BANK HAD TO PROVE THAT FACT OF SUCH PAYMENT AND COULD NOT RELY O N MERE ENTRIES IN THE BOOKS OF ACCOUNT EVEN IF THEY WERE REGULARLY KEPT IN THE COURSE OF BUSINESS IN VIEW OF THE CLEAR LANGUAGE OF SECTION 34 O F THE ACT. THIS COURT FURTHER OBSERVED THAT WHERE THE ENTRIES WERE NOT ADMI TTED IT WAS THE DUTY OF THE BANK, IF IT RELIED ON SUCH ENTRIES TO CHA RGE ANY PERSON WITH LIABILITY, TO PRODUCE EVIDENCE IN SUPPORT OF THE ENT RIES TO SHOW THAT THE MONEY WAS ADVANCED AS INDICATED THEREIN AND THEREAFTE R THE ENTRIES WOULD BE OF USE AS CORROBORATIVE EVIDENCE. THE SAME QUESTION CAME UP FOR CONSIDERATION BEFORE DIF FERENT HIGH COURT ON A NUMBER OF OCCASIONS BUT TO ESCHEW PROLIXITY WE WOULD CONFINE OUR ATTENTION TO SOME OF THE JUDGEMENTS ON WH ICH MR. SIBAL RELIED. IN YESUVADIYAN VS. SUBBA NAICKER [A. I. R. 19 19 MADRAS 132] ONE OF THE LEARNED JUDGES CONSTITUTING THE BENCH HAD THIS TO SAY: S.34, EVIDENCE ACT, LAYS DOWN THAT THE ENTRIES IN BOO KS OF ACCOUNT, REGULARLY KEPT IN THE COURSE OF BUSINESS ARE RELEVANT, BUT SUCH A STATEMENT WILL NOT ALONE E BE SUFFICIENT TO CHARGE AN Y PERSON WITH LIABILITY. THAT MERELY MEANS THAT THE PLAINTIFF CANN OT OBTAIN A DECREE BY MERELY PROVING THE EXISTENCE OF CERTAIN ENTRIES IN HI S BOOKS OF ACCOUNT EVEN THOUGH THOSE BOOKS ARE SHOWN TO BE KEPT IN THE RE GULAR COURSE OF BUSINESS. HE WILL HAVE TO SHOW FURTHER BY SOME INDEPENDE NT EVIDENCE THAT THE ENTIRES REPRESENT REAL AND HONEST TRANSACTIONS AND THAT THE MONEYS WERE PAID IN ACCORDANCE WITH THOSE ENTRIES. THE LEGISLATURE HOWEVER DOES NOT REQUIRE ANY PARTICULAR FORM OR KIND OF EVIDENCE IN ADDITION TO ENTRIES IN BOOKS OF ACCOUNT, AND I TAKE I T THAT ANY RELEVANT FACT 45 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 S WHICH CAN BE TREATED AS EVIDENCE WITHIN THE MEANING OF THE EVIDENCE ACT WOULD BE SUFFICIENT CORROBORATION OF THE EVIDENC E FURNISHED BY ENTRIES IN BOOKS OF ACCOUNT IF TRUE.' WHILE CONCURRING WITH THE ABOVE OBSERVATIONS THE OTHE R LEARNED JUDGE STATED AS UNDER: ' IF NO OTHER EVIDENCE BESIDES THE ACCOUNTS WERE GI VEN, HOWEVER STRONGLY THOSE ACCOUNTS MAY BE SUPPORTED BY THE PROBABILITIE S, AND HOWEVER STRONG MAY BE THE EVIDENCE AS TO THE HONESTY OF THO SE WHO KEPT THEM, SUCH CONSIDERATION COULD NOT ALONE WITH REFERENCE T O S.34, EVIDENCE ACT, BE THE BASIS OF A DECREE.'(EMPHASIS SUPPLIED) IN BENI VS. BISAN DAYAL [ A. I. R 1925 NAGPUR 445] IT WAS OBSERVED TAT ENTRIES IN BOOK S OF ACCOUNT ARE NOT BY THEMSELVES SUFFI CIENT TO CHARGE ANY PERSON WITH LIABILITY, THE REASON BEING THAT A MA N CANNOT BE ALLOWED TO MAKE EVIDENCE FOR HIMSELF BY WHAT HE CHOOSES TO WRI TE IN HIS OWN BOOKS BEHIND THE BACK OF THE PARTIES. THERE MUST BE I NDEPENDENT EVIDENCE OF THE TRANSACTION TO WHICH THE ENTRIES RELA TE AND IN ABSENCE OF SUCH EVIDENCE NO RELIEF CAN BE GIVEN TO THE PARTY WH O RELIES UPON SUCH ENTRIES TO SUPPORT HIS CLAIM AGAINST ANOTHER. IN HIRA L AL VS. RAM RAKHA [ A. I. R. 1953 PEPSU 113] THE HIGH COURT, WHILE NEGAT IVING A CONTENTION THAT IT HAVING BEEN PROVED THAT THE BOOKS OF ACCOUNT WERE REGULARLY KEPT IN THE ORDINARY COURSE OF BUSINESS AND THAT, THEREFORE, ALL ENTRIES THEREIN SHOULD BE CONSIDERED TO BE RELEVANT AND TO HAVE BEEN PROVE, SAID THAT THE RULE AS LAID DOWN IN SECTION 34 OF THE ACT THAT ENTR IES IN THE BOOKS OF ACCOUNT REGULARLY KEPT IN THE COURSE OF BUSINESS RE REL EVANT WHENEVER THEY REFER TO A MATTER IN WHICH THE COURT HAS TO ENQ UIRE WAS SUBJECT TO THE SALIENT PROVISO THAT SUCH ENTRIES SHALL NOT ALONE BE SUFFICIENT EVIDENCE TO CHARGE ANY PERSON WITH LIABILITY. IT IS N OT, THEREFORE, ENOUGH MERELY TO PROVE THAT THE BOOKS HAVE BEEN REGULARLY K EPT IN THE COURSE OF BUSINESS AND THE ENTRIES THEREIN ARE CORRECT. IT IS FURT HER INCUMBENT UPON THE PERSON RELYING UPON THOSE ENTRIES TO PROVE THAT TH E WERE IN ACCORDANCE WITH FACTS. THE EVIDENTIARY VALUE OF ENTRIES RELEVANT UNDER SECT ION 34 WAS ALSO CONSIDERED IN HIRALAL MAHABIR PERSHAD (SUPRA ) I.D. DU A, ]. (AS HE THEN WAS) SPEAKING FOR THE COURT OBSERVED THAT SUCH ENTRIES T HOUGH RELEVANT WERE ONLY CORROBORATIVE EVIDENCE AND IT IS TO BE SHO WN FURTHER BY SOME INDEPENDENT EVIDENCE THAT THE ENTRIES REPRESENT HONE ST AND REAL TRANSACTIONS AND THAT MONIES WERE PAID IN ACCORDANCE W ITH THOSE ENTRIES. A CONSPECTUS OF THE ABOVE DECISIONS MAKES IT EVIDENT TH AT EVEN CORRECT AND AUTHENTIC ENTRIES IN BOOKS OF ACCOUNT CANNOT WITH OUT INDEPENDENT EVIDENCE OF THEIR TRUSTWORTHINESS, FIX A LIABILITY UPO N A PERSON. KEEPING IN VIEW THE ABOVE PRINCIPLES, EVEN IF WE PROCEED ON THE ASSUMPTION THAT THE ENTRIES MADE IN MR 71/91 ARE CORRECT AND THE ENT RIES IN THE OTHER BOOKS AND LOOSE SHEETS WHICH WE HAVE ALREADY FOUND TO B E NOT ADMISSIBLE IN EVIDENCE UNDER SECTION 34) ARE ADMISSIBLE UNDER SECTION 9 OF THE ACT TO SUPPORT AN INFERENCE ABOUT THE FORMERS' CORRECTNESS STILL THOSE ENTRIES WOULD NOT BE SUFFICIENT TO CHARGE SHRI A DVANI AND SHRI SHUKLA WITH THE ACCUSATIONS LEVELLED AGAINST THEM FOR THERE IS NOT AN IOTA OF INDEPENDENT EVIDENCE IN SUPPORT THEREOF. IN THAT VIEW OF THE MATTER WE NEED NOT DISCUSS, DELVE INTO OR DECIDE UPON THE CON TENTION RAISED BY MR. ALTAF AHMED IN THIS REGARD. SUFFICE IT TO SAY THA T THE STATEMENTS OF THE 46 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 FOUR WITNESSES, WHO HAVE ADMITTED RECEIPTS OF THE PAYME NTS AS SHOWN AGAINST THEM IN MR 71/91, CAN AT BEST BE PROOF OF REL IABILITY OF THE ENTRIES SO FAR THEY ARE CONCERNED AND NOT OTHERS. IN O THER WORDS, THE STATEMENTS OF THE ABOVE WITNESSES CANNOT BE INDEPENDENT EVIDENCE UNDER SECTION 34 AS AGAINST THE ABOVE TWO RESPONDENTS. SO FAR AS SHRI ADVANI IS CONCERNED SECTION 34 WOULD NOT COME IN AID OF THE PROSECUTION FOR ANOTHER REASON ALSO. ACCORDING TO THE PROSECUTION CASE ITSELF HIS NAME FINDS PLACE ONLY IN ONE OF THE LOOSE SHEETS (SHEET NO. 8) AND NOT IN MR 71/91. RESULTANTLY, IN VIEW OF OUR EARLIER DISCUSSIO N, SECTION 34 CANNOT AT ALL BE PRESSED INTO SERVICE AGAINST HIM. (UNDERLINE PROVIDED BY US) 49. WE FURTHER FIND IDENTICAL ISSUE HAD COME UP BEFOR E VARIOUS BENCHES OF THE TRIBUNAL ON THE BASIS OF THE NOTINGS OF MR.SOHAN RAJ MEHTA FOUND DURING THE COURSE OF SEARCH. WE FIND THE AHMEDABAD BENCH OF THE TRIBUNAL IN THE CASE OF SHRI MUSTAFAMIYA H. SH EIKH (SUPRA) HAS OBSERVED AS UNDER: 7. ON A PERUSAL OF THE SEIZED MATERIALS RECEIVED FRO M THE INVESTIGATION WING, PUNE, THE AO HAD NOTICED THAT PA GE 34 WAS A SUMMARY OF THE CASH PAYMENT MADE BY SHRI SOHANRAJ MEH TA FOR THE PERIOD FROM APRIL 2003 - AUGUST 2006 AS PER THE DIREC TION OF RMD GROUP. AS PER THIS VERSION, AN AMOUNT OF RS.57.50 LAKHS PERTAIN ED TO SHRI SHEIKH MUSTAFMIYA HUSSAINMIYA OF AHMEDABAD AND PAGE 47 WAS TH E MONTHLY SUMMARY FOR THE MONTH OF JANUARY - MARCH 2004 OF THE UNACCOUNTED TRANSACTION CARRIED OUT BY SHRI SOHANRAJ MEHTA C & F OF KARNATAKA REGION OF RMD GROUP. AFTER ANALYZING THE ISSUE EXHAUST IVELY AS DETAILED IN THE ASSESSMENT ORDER AS WELL AS IN THE APPELLATE ORDER UNDER DISPUTE, A SUM OF RS.57.5 LAKHS IN CASH AS EVIDENCED BY THE SEIZED D OCUMENTS WAS TREATED AS UNACCOUNTED RECEIPT IN THE HANDS OF THE ASSE SSEE AND, ACCORDINGLY, ADDED TO THE INCOME OF THE ASSESSEE FOR T HE PERIOD UNDER CONSIDERATION BY THE AO WHICH HAS BEEN SUBSEQUENTLY SUSTA INED BY THE LEARNED CIT (A) FOR THE DETAILED REASONS RECORDED IN HIS APPELLATE ORDER WHICH IS UNDER SCRUTINY. 7.1. ADMITTEDLY, THE WHOLE PROCEEDINGS WERE INITIAT ED ON THE STRENGTH OF A STATEMENT OF A THIRD PARTY (SHRI SOHANRAJ MEHTA ). THE PURPORTED SEIZURE OF SLIPS, LOOSE SHEETS ETC. AT THE PREMISES OF A TH IRD PARTY CONTAINED ONLY THE NAMES, BUT, NOT OTHER DETAILS SUCH AS THEIR IDENTITY, ADDRESSES, CONTACT NUMBERS ETC. ON A PERUSAL OF THE STATE MENT, IT IS CLEAR THAT THE PAYMENTS MADE WERE TO THE PERSONS WHOSE NAMES WERE APPEARING ON THE RIGHT SIDE OF THE PAPERS (SHEETS) WHIC H WERE PAID TO THOSE PERSONS ON THE INSTRUCTIONS OF PRD & RD. MOREOVER, AGAINST THE NAMES OF MUSTUFA & TAUFIK, IT WAS SPECIFICALLY WRITTEN AS (PRD) EXPENDITURE IN RESPECT OF PRD WAS GIVEN BY SHRI SOHAN RAJ MEHTA AS PER THE TELEPHONIC AND WRITTEN INSTRUCTION OF PRAKASH RASI KAL DHASRIWAL AND RASIKLAL MANIKCHAND DHARIWAL AS PER THE STATEMENT OF SRI SOHANRAJ MEHTA DATED 21.10.2009 [REFER: PAGE 99 OF PB AR]. T O A QUESTION NO.14 EXHIBIT A/M/8/DATED 9.10.2009 WHICH CONTAINED A BUN CH OF LOOSE SHEETS SERIALLY NUMBERED FROM 01 TO 58 TO EXPLAIN THE CONTE NTS, SHRI SOHANRAJ MEHTA ANSWERED THUS - 'PAGE 34 RECORDS RECEIPT OF GUTKHA CONSIGNMENT FROM DHARIWAL INDUSTRIES LTD., DURING APRIL 2003 TO JAN. 2006 TOTAL ING TO RS.218,00,91,198/- (WHICH IS RECORDED ON THE LEFT HAN D SIDE OF THE PAGE). 47 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 ON THE RIGHT HAND SIDE OF THE PAGE, PARTIES TO WHOM C ASH PAYMENTS WERE MADE HAVE BEEN RECORDED, ON INSTRUCTIONS FROM DHARIWA L INDUSTRIES LTD., THE INSTRUCTIONS WERE IN THE FORM OF SLIPS OF PAPER AND THEY CONTAIN THE SIGNATURES OF MR. RASHIKLAL MANIKCHAND DHARIWAL AND H IS SON MR. PRAKASH DHARIWAL. SUCH PAYMENTS TOTALING TO RS.206,76, 54,463/- WERE MADE IN 2003-2006. THE BALANCE OF RS.11,24,36,739/- WAS SETTLED BY ME SUBSEQUENTLY OVER A PERIOD OF TIME.' 7.2. CONSIDERING THE STATEMENT OF THE SAID PERSON, THE RE IS STRONG FORCE IN THE CONTENTION OF THE ASSESSEE THAT EVEN ASSUMIN G THAT THE RECEIPT OF SUCH AMOUNT WAS MERELY A COLLECTION FOR ON BEHALF OF THE COMPANY AND SUCH AMOUNT CANNOT PAR TAKE THE CHARACTE R OF INCOME IN THE HANDS OF THOSE PERSONS. 7.3. MOREOVER, ACCORDING TO THE ASSESSEE, THE SEARCHED PERSON BEING A THIRD PARTY HAD RETRACTED ALL THE STATEMENTS RECORDED DURING THE SEARCH PROCEEDINGS IN THE FOLLOWING WORDS: '1. I REFERRED MY AFORESAID STATEMENT RECORDED BY DE PUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE 2(2), BANGALORE ON 10 .8.2011. 2. IN THIS STATEMENT DATED 10.8.2011 SENSE CONVEYS THAT MY DETAILED LETTER DT.23.12.2009 FILED WITH THE ASST. DIRECTOR OF INCOME-TAX (INVESTIGATION) UNIT 2(1), BANGALORE IS NEGATED WHICH IS INCORRECT AND UNTRUE. 3. TODAY ON 3.12.2011, SATURDAY I DEPOSE IN THE NAME OF ALMIGHTY GOD THAT UNDER WRONG PROMISES, MISTAKEN BELIEFS, INADEQUATE GUIDANCE AND IMPROPER ADVISE, I SIGNED THE LETTER DT. 10.8.2011 I N THE INCOME-TAX DEPARTMENT, BANGALORE WHICH IS ABSOLUTELY WRONG AND N OT THE CORRECT VERSION OF WHAT I WANTED TO CONVEY TO THE INCOME-TAX DEPARTMENT AT THAT POINT OF TIME. 4. WITH MY THIS LETTER SPECIFICALLY ADDRESSED TO YOU, I ONCE AGAIN STATE THAT ALL MY STATEMENTS RECORDED DURING THE SEARCH PROC EEDINGS ON 10.9.2009 AND MY STATEMENT DATED 10.8.2011 RECORDED AT BANGALORE BEFORE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIR CLE 2(2), BANGALORE IS RETRACTED UN- CONDITIONALLY BY ME, IT B EING IMPROPER.'[REFER: PAGES 225 - 27 OF THE ASSESSEE'S SUBMISS ION DT.12.12.2012]. 7.4. THUS, THERE IS FORCE IN THE ASSESSEE'S CONTENTION TH AT HE SHOULD HAVE BEEN AFFORDED AN OPPORTUNITY TO CROSS-EXAMINE T HE THIRD PARTY [ SHRI SHOHANRAJ MEHTA] SINCE HIS STATEMENTS ON OATH WERE COUPLED WITH INCONSISTENCY, HE RETRACTED HIS EARLIER STATEMENTS AND, THUS, NOT ABOVE THE BOARD. 7.5. MOREOVER, THE ASSESSEE'S PLEA FOR PERMISSION TO CROSS EXAMINE SHRI SOHANRAJ MEHTA AT THE ASSESSMENT STAGE WAS NOT CONCE DED BY THE AO ON THE GROUND THAT - '[ON PAGE 9 CIT (A)] 2.8........................... ................................................ CO MMENTS OF THE AO: (II) OPPORTUNITY OF CROSS EXAMINATION OF SHRI SOHANRA J MEHTA: 'THE ASSESSEE WAS PROVIDED WITH THE COPY OF THE STATEMENT OF SHRI SOHANRAJ 48 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 MEHTA RECORDED BY THE ADIT (INV), PUNE, ALONG WITH DOCUMENTS ON WHICH HIS STATEMENT WAS RECORDED. DUE TO PAUCITY OF TIME THE CROSS EXAMINATION COULD NOT BE GRANTED.' 7.6. THE CIT (A) HAD ALSO TURNED DOWN THE ASSESSEE'S REQU EST FOR CROSS- EXAMINATION ON THE GROUND THAT - '(ON PAGE 53) 2.25................IT HAS ALSO BEEN IN DICATED, AS BORNE OUT ON RECORDS, THAT THE APPELLANT HAD ASKED FOR CROSS EXAMIN ATION OF THE PARTY FOR THE FIRST TIME ONLY ON 14.12.2011. THE APPELLANT WAS ALSO FULLY AWARE THAT THE LIMITATION TO PASS REASSESSMENT ORDER IN THE CASE EXPIRES ON 31.12.2011. THUS, BETWEEN 29.3.2011 TILL 14.12.2011, THE APPELLANT DID NOT MAKE ANY REQUEST TO THE AO THAT AN OPPORTUNITY O F CROSS EXAMINATION IS REQUIRED BY HIM. FULLY KNOWING THAT IT WOULD NOT BE POSSIBLE FOR THE AO TO CALL A PARTY FROM DISTANT BANGALORE AND AFFORD THE FACILITY OF CROSS EXAMINATION DURING A SHORT PERIOD OF JUST 12 WORKING DAYS, THE APPELLANT MAKES REQUEST FOR CROSS EXAMINATION. THERE IS NO DENYI NG THE FACT THAT CROSS EXAMINATION IS AN INALIENABLE RIGHT OF AN AGREED PARTY BUT IT IS ALSO TRUE THAT THERE HAS TO BE A JUSTIFIABLE TIME FRAME IN WHICH SUCH RIGHT CAN BE EXERCISED. IT IS AS SETTLED PRINCIPLE OF LAW THAT RI GHTS AND DUTIES UNDER A STATUTE GO HAND IN HAND AND CANNOT BE EXERCISED IN ISOLATION. THE APPELLANT TRULY HAD THE RIGHT TO CROSS EXAMINATION BU T AT THE SAME TIME HAD THE DUTY TO ASK FOR IT WITHIN A REASONABLE TIME F RAME. A RIGHT EXERCISED WITH ULTERIOR MOTIVES DOES NOT POSSESS THE SANCTI ON OF LAW. FACTS OF THE CASE CLEARLY INDICATE THAT THE APPELLANT HAD PURPOSEFULLY DEMANDED CROSS EXAMINATION AT A TIME WHEN IT WAS CONSI DERED IMPRACTICAL AND UNFEASIBLE.....' 7.7. IN ESSENCE, THE PRINCIPLES OF NATURAL JUSTICE ON THE LEGITIMATE REQUEST OF THE ASSESSEE, TO CROSS EXAMINE THE THIRD PARTY ON THE BASIS OF WHOSE STATEMENT THE IMPUGNED ADDITION SOUGHT TO BE ADD ED TO HIS INCOME, HAS BEEN DENIED ON FLIMSY GROUNDS. 7.8. AT THIS POINT OF TIME, WE SHALL ANALYZE THE JUD ICIAL PRONOUNCEMENTS ON A SIMILAR ISSUE, AS UNDER (PB -184): (I) THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF DCIT V. MAHENDRA AMBALAL PATEL REPORTED IN (2010) 40 DTR (GUJ) 243 H AD HELD AS UNDER: 'FROM THE FINDINGS RECORDED BY THE TRIBUNAL IT IS APP ARENT THAT THOUGH IT IS THE CASE OF REVENUE THAT THE LAND HAS BEEN SOLD BY THE ASSESSEE TO GC THROUGH MV, THERE IS NO MATERIAL ON RECORD TO INDICA TE THAT THE SAID LAND IN FACT BELONGS TO THE ASSESSEE. THOUGH THE AO HAS PLACED RELIANCE UPON THE STATEMENTS OF MV AND GC FOR THE PURPOSE OF TAXING THE AMOUNT IN THE HANDS OF THE ASSESSEE, DESPITE SPECIFIC REQUEST BEING MADE BY THE ASSESSEE FOR CROSS- EXAMINING BOTH THE SAID PERSONS, THE AO HAS NOT PERMITTED THE ASSESSEE TO CROSS-EXAMINE THEM. IN THE CIR CUMSTANCES, NO RELIANCE COULD BE PLACED UPON THE STATEMENTS OF THE SAID PERSONS AS THE ASSESSEE HAD NO OPPORTUNITY TO CROSS-EXAMINE THEM. THE ST ATEMENTS MADE BY THE AFORESAID PERSONS WOULD HAVE NO EVIDENTIAR Y VALUE AND AS SUCH, WOULD NOT BE ADMISSIBLE IN EVIDENCE. FURTHER, TH OUGH THE SAID MV HAS STATED THAT HE HAS PAID RS.60 LAKHS TO THE ASSESSEE ON B EHALF OF ONE GC, THE SAID AMOUNT HAS NOT BEEN TAXED IN THE HANDS O F GC. MOREOVER, NO EVIDENCE HAS BEEN ADDUCED TO INDICATE THAT ANY TRANSA CTION IN RELATION TO THE LAND IN QUESTION HAS ACTUALLY TAKEN PLACE. THE TR IBUNAL HAS RIGHTLY FOUND THAT THE BASIS FOR MAKING THE ADDITION IN THE C ASE OF THE ASSESSEE IS 49 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 MERELY A BALD STATEMENT OF MV, WHICH IS NOT CORROBORA TED WITH ANY DOCUMENTARY EVIDENCE FOUND AT THE TIME OF SEARCH, EI THER IN THE CASE OF S OR MV OR THE ASSESSEE. NO PLEA TO THE EFFECT THAT THE I MPUGNED ORDER OF THE TRIBUNAL SUFFERS FROM ANY PERVERSITY HAS BEEN RAISED . THE TRIBUNAL HAVING BASED ITS CONCLUSION ON FINDINGS OF FACT RECORDE D BY IT AFTER APPRECIATION OF THE EVIDENCE ON RECORD, IT CANNOT B E STATED THAT THE IMPUGNED ORDER OF THE TRIBUNAL SUFFERS FROM ANY LEGAL INFIRMITY............' (II) DURING THE COURSE OF HEARING OF A REFERENCE AP PLICATION OF THE REVENUE IN THE CASE OF DCIT (ASST) V. PRARTHANA CONSTRU CTION PVT. LTD [TAX APPEAL NO.79 OF 2000 DATED 25.3.2001] BEFORE T HE HON'BLE JURISDICTIONAL HIGH COURT, THE LEARNED COUNSEL FOR TH E ASSESSEE SUBMITTED THAT THE DOCUMENTS IN QUESTION HAVE BEEN FOUND FROM T HE PREMISES OF A THIRD PARTY. THE LOOSE PAPERS CANNOT BE STATED TO BE BOOKS OF ACCOUNT IN THE LIGHT OF THE DECISION OF THE SUPREME COURT IN TH E CASE OF CBI V. V.C. SHUKLA AND OTHERS (1998) 3 SCC 410 AS OBSERVED BY THE TRIBUNAL AND SUBMITTED THAT THE TRIBUNAL HAS BASED ITS CONCLUSIONS ON THE FINDINGS OF FACT RECORDED BY IT UPON APPRECIATION OF THE EVIDEN CE ON RECORD; THAT THE TRIBUNAL HAD EXAMINED THE FACTS AND CIRCUMSTANCES OF T HE CASE AND HAD COME TO THE CONCLUSION THAT THE REVENUE HAD NOT BEEN ABLE TO ESTABLISH ITS CASE AGAINST THE ASSESSEE AND AS SUCH, THE ORDER OF TH E TRIBUNAL BEING BASED UPON FINDINGS OF FACT RECORDED BY IT, DOES NOT G IVE RISE TO ANY QUESTION OF LAW. IT WAS, FURTHER, SUBMITTED ON BEHALF OF THE ASSESSEE THAT THE ENTIRE CASE OF THE REVENUE WAS BASED UPON DOCUMENT S RECOVERED DURING THE COURSE OF SEARCH FROM THE PREMISES OF THIRD PARTIES AND THE STATEMENTS OF THE THIRD PARTIES AND THAT THE ASSESSEE WA S NOT GRANTED AN OPPORTUNITY TO CROSS EXAMINE THE THIRD PARTIES AND AS SU CH THEIR STATEMENTS HAVE NO EVIDENTIARY VALUE. AFTER DUE CONSIDERATION OF RIVAL SUBMISSIONS AND ALSO TAK ING INTO ACCOUNT THE RELIANCE PLACED BY THE ASSESSEE'S COUNSEL IN THE CASES OF (I) KISHINCHAND CHELLARAM V. CIT (1980) 125 ITR 713 (SC) & (II) CIT V. S.C. SETHI (2007) 295 ITR 351 (RAJ), THE HON'BLE COURT HAD HE LD THUS: '[PB - 174] 16. THUS, IT IS APPARENT THAT THE CONCLUSI ONS ARRIVED BY THE TRIBUNAL ARE BASED UPON THE AFORESAID FINDINGS OF FACT RECORDED BY IT UPON APPRECIATION OF THE EVIDENCE ON RECORD. ON BEH ALF OF THE REVENUE NOTHING IS POINTED OUT TO SHOW THAT THE FINDINGS RECOR DED BY THE TRIBUNAL ARE IN ANY MANNER PERVERSE, NOR IS IT THE CASE OF THE REVENUE THAT THE TRIBUNAL HAS TAKEN INTO CONSIDERATION ANY IRRELEVANT MATERIAL OR THAT ANY RELEVANT MATERIAL HAS BEEN IGNORED. THE CONCLUSION AR RIVED AT BY THE TRIBUNAL ON THE BASIS OF THE FINDINGS OF FACT RECORDED BY IT CANNOT IN ANY MANNER BE SAID TO BE UNREASONABLE. IN THE AFORESAID PR EMISES, THE IMPUGNED ORDER OF THE TRIBUNAL BEING BASED UPON FIND INGS OF FACT RECORDED BY IT UPON APPRECIATION OF THE EVIDENCE ON RECORD, WHICH FINDINGS HAVE NOT BEEN DISLODGED BY THE REVENUE BY PO INTING OUT ANY EVIDENCE TO THE CONTRARY, THEREFORE, DOES NOT WARRAN T ANY INTERFERENCE.' 7.9. TAKING INTO ACCOUNT THE SUBMISSIONS OF THE ASSESSEE, THE STAND OF THE AO, REASONING OF THE CIT (A) IN SUSTAINING THE ACT ION OF THE AO AND ALSO IN CONFORMITY WITH THE RULINGS OF THE HON'BLE J URISDICTIONAL HIGH COURT (SUPRA), WE ARE OF THE CONSIDERED VIEW THAT THA T LEARNED CIT (A) WAS NOT JUSTIFIED IN SUSTAINING THE ADDITION OF RS.57.5 LAKHS MADE BY THE AO IN THE HANDS OF THE ASSESSEE FOR THE FOLLOWING REASONS: 50 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 (I) THAT THE LEARNED AO HAD SOLELY DEPENDED UPON THE INFORMATION RECEIVED FROM THE INVESTIGATION WING OF PUNE; (II) THAT THE AO HAD FAILED TO SUBSTANTIATE THE SAME W ITH ANY CREDIBLE DOCUMENTARY EVIDENCE TO THE EFFECT THAT THE ASSESSEE HA D INDEED RECEIVED THE ALLEGED CASH PAYMENT OF RS.57.5 LAKHS FRO M SHRI SOHANRAJ MEHTA AS THE ASSESSEE HAD CATEGORICALLY PLEADED BEFORE T HE AO THAT HE WAS MAKING PURCHASES THROUGH AMBIKA DISTRIBUTORS WHO WER E THE C & F AGENTS FOR GUJARAT REGION; (III) THAT THE TOTAL UNACCOUNTED SALES EFFECTED BY SH RI SOHANRAJ MEHTA C & F OF RMD GUTKHA ON BEHALF OF DHARIWAL INDUSTRIES LIMI TED FOR THE PERIOD OF APRIL 2003 TO FEB 2008 WAS RS.345.72 CRORES (APPROX ). THE UNACCOUNTED INCOME FOR THE AY 2004-05 WAS ARRIVED AT RS.40,88,32,514/-, THE SAME WAS ADDED SUBSTANTIVELY IN THE CASE OF M/S. DHARIVAL INDUSTRIES LIMITED AND CONCLUDED THE ASSESSMENT FOR THE AY 2004-05 U/S 153A R.W.S. 143 (3) OF THE ACT, DATED 29. 12.2011 BY THE ACIT, C.C. 1(1), PUNE [COURTESY: P 231 - 238 OF PB A R]; (IV) THAT ONCE THE ALLEGED SUM OF RS.57.5 LAKHS WAS SUBJ ECTED TO TAX IN THE HANDS OF DHARIWAL INDUSTRIES LIMITED, THE SAME CANNOT B E SUBJECTED TO SUFFER FURTHER TAX. THIS VIEW HAS BEEN FAIRLY CONCEDED BY THE CIT (A) '(ON PAGE 54) 2.27.......THE APPELLANT IS RIGHT TO THE EX TENT THAT NO INCOME CAN BE TAXED TWICE......' (V) THAT THE AO HAD CANDIDLY ADMITTED THAT DURING T HE COURSE OF ASSESSMENT PROCEEDING ITSELF THE ASSESSEE HAD SOUGHT PERMISSI ON TO CROSS EXAMINE SHRI SOHANRAJ MEHTA WHICH WAS SUMMARILY R EJECTED BY TAKING REFUGE '.....DUE TO PAUCITY OF TIME, THE CRO SS EXAMINATION COULD NOT BE GRANTED' [REFER: PARA 2.8 (PAGE 10) OF THE CIT (A)'S ORDER]. THIS STAND OF THE AO, TO VIEW IT MILDLY, IS AGAINST THE SPIRIT OF JUDICIAL PRONOUNCEMENTS; (VI) THAT THE AO HAD MERELY COME TO A CONCLUSION BASE D ON A STATEMENT OF A THIRD PARTY, WITHOUT BRINGING ANY CREDIBLE DOCUME NTARY EVIDENCE TO THE CONTRARY ON RECORD TO NAIL THE ASSESSEE; & (VII) NO RELIANCE CAN BE PLACED ON THE STATEMENTS OF A THIRD PERSON WHOSE PREMISES WERE SUBJECTED TO A SEARCH SINCE HE HAD RETRACT ED HIS OWN STATEMENT MADE EARLIER ON OATH AND PRECISELY THE ASSESSEE HAS BEEN DENIED TO CROSS-EXAMINE HIM TO BRING OUT THE TRUTH. 7.9.1 FOR THE ABOVE SAID REASONS, WE HEREBY HOLD THAT THE ADDITION MADE FOR RS.57,50,000/- BY THE LEARNED AO ON ACCOUNT OF UNDISCLOSED INCOME, WHICH WAS FURTHER SUSTAINED BY THE LEARNED CIT (A) REQUIRES TO BE DELETED AND ACCORDINGLY, WE HEREBY DIRECT THE RE VENUE TO DELETE THE SAME. THUS, GROUND NO.1 RAISED BY THE ASSESSEE WITH RESPEC T TO REOPENING OF THE ASSESSMENT U/S 148 OF THE ACT IS DISMISSE D AND GROUND NO.2 WITH RESPECT TO ADDITION ON ACCOUNT OF UNDISCLOSE D INCOME IS ALLOWED IN FAVOUR OF THE ASSESSEE. 51 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 50. WE FIND THE BANGALORE BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS. H.S. CHANDRAMOULI (SUPRA) HAD ALSO AN OCCASION TO DECIDE AN IDENTICAL ISSUE AND DELETED THE ADDITION BY OBSERVING AS UNDER : 13. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LEARNED DR. IT IS SEEN THAT THE DOCUMENT IN QUESTION WAS SEIZED FROM THE POSSESS ION OF ONE MR. SOHANRAJ MEHTA. THE SEIZED DOCUMENT MAKES A REFERENCE TO THE NAME OF THE ASSESSEE AND A FIGURE OF RS.22.75 LAKHS APPEARS AGAINST HIS NAME. AS TO WHETHER THIS DOCUMENT EVIDENCES PAYMENT OF RS.22.7 5 LAKHS TO THE ASSESSEE IS A MOOT QUESTION. THERE IS NO BASIS SET OUT IN THE ORDER OF THE AO FOR COMING TO THE CONCLUSION THAT THE SEIZED DOCUM ENT EVIDENCES RECEIPT OF MONEY BY THE ASSESSEE FROM SOHANRAJ MEHTA. T HE PRESUMPTION U/S. 292C OF THE ACT IS ONLY WITH REFERENCE TO THE PE RSON SEARCHED AND IT CANNOT BE EXTENDED TO THE ASSESSEE. THERE IS NO CORROBOR ATIVE EVIDENCE OR STATEMENT OF SOHANRAJ MEHTA RELIED UPON BY THE AO , TO THE EFFECT THAT A SUM OF RS.22.75 LAKHS WAS PAID TO THE ASSESSEE. THE ASSESSEE H AS CATEGORICALLY DENIED HAVING RECEIVED ANY PAYMENT FR OM SOHANRAJ MEHTA. EVEN IN THE PROCEEDINGS BEFORE THE AO, WHEN THE ASSESSEE WAS EXAMINED, HE HAD TAKEN THE SAME STAND. THE DETAILS CALLED FOR IN THE SCRUTINY ASSESSMENT DID NOT CALL FOR ANY SPECIFIC DETAILS ON THE SE IZED DOCUMENT OR RECEIPT OF CASH BASED ON THE SEIZED DOCUMENT. 14. IN THE LIGHT OF THESE CIRCUMSTANCES, THE CIT(APPE ALS) WAS JUSTIFIED IN COMING TO THE CONCLUSION THAT NO EVIDENCE HAS BEEN BROUGHT ON RECORD TO PROVE THAT THE ASSESSEE RECEIVED THE SUM OF RS.22.75 L AKHS FROM SOHANRAJ MEHTA. THE ADDITION MADE BY THE AO WAS THER EFORE RIGHTLY DELETED BY THE CIT(A). WE DO NOT FIND ANY GROUND TO INTERFERE WITH THE ORDER OF THE CIT(APPEALS). 51. WE FIND THE LUCKNOW BENCH OF THE TRIBUNAL IN TH E CASE OF M/S. MOHD. AYUB MOHD. YAKUB PERFUMERS PVT. LTD., (SUPRA) WHILE DELETING THE ADDITION UNDER IDENTICAL FACTS AND CIRCUMSTANCES AS HEL D AS UNDER : 2. THE FACTS IN BRIEF BORNE OUT FROM THE RECORD AR E THAT DURING THE COURSE OF SEARCH CONDUCTED UPON SHRI. SOHANRAJ MEHTA, C&F OF RMD GUTKHA GROUP IN BANGALORE, STATEMENT OF ACCOUNT WAS SE IZED IN WHICH THERE WAS AN ENTRY OF RS.50 LAKHS IN THE NAME OF MALIK KANNAUJ. THIS ENTRY WAS INTERPRETED BY THE REVENUE AS THIS AMOUNT WA S GIVEN TO SHRI. ABDUL MALIK, MD OF THE ASSESSEE-COMPANY. ON THE BASIS OF SEIZED DOCUMENTS, THE ASSESSING OFFICER HAS FORMED A BELIEF IN T HE ASSESSEE'S CASE THAT THE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSE SSMENT, AS THIS AMOUNT WAS NOT SHOWN BY THE ASSESSEE IN ITS BOOKS OF ACCOUN T. ACCORDINGLY A NOTICE UNDER SECTION 148 OF THE INCOME -TAX ACT, 1961 (HEREINAFTER CALLED IN SHORT 'THE ACT') WAS ISSUED AN D ASSESSMENT WAS COMPLETED UNDER SECTION 147 OF THE ACT READ WITH SECT ION 144 OF THE ACT IN THE HANDS OF THE ASSESSEE, RESULTING INTO AN ADDITION OF RS.10.48 LAKHS AS PROFIT ON THIS UNACCOUNTED SALE OF RS.50 LAKHS. 3. AN APPEAL WAS PREFERRED BEFORE THE LD. CIT(A) WI TH THE SUBMISSION THAT NO DOCUMENT INDICATING PAYMENT OF RS.50 LAKHS TO THE ASSESSEE- COMPANY WAS FOUND DURING THE COURSE OF SEARCH. O NLY DUMB DOCUMENTS WERE FOUND IN WHICH THERE WAS A DEBIT ENTRY OF RS.50 LAKHKS IN THE NAME OF MALIK KANNAUJ. EVEN IN THE STATEMENT OF SHRI. SOHANRAJ GUPTA, THERE WAS NO MENTION OF THE DIRECTOR OF THE A SSESSEE-COMPANY, SHRI. ABDUL MALIK. THEREFORE, THE LD. CIT(A) CAME T O THE CONCLUSION THAT IN THE ABSENCE OF ANY EVIDENCE INVOLVING THE ASSESSEE TO TH E ALLEGED RECEIPT 52 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 OF RS.50 LAKHS, REOPENING IN THE HANDS OF THE ASSESSEE UND ER SECTION 147 OF THE ACT IS NOT PROPER AND HE ACCORDINGLY ANNULLED THE ASSESSMENT. 4. AGGRIEVED THE REVENUE HAS PREFERRED AN APPEAL BE FORE THE TRIBUNAL AND REITERATED ITS CONTENTIONS. DURING THE C OURSE OF HEARING, A SPECIFIC QUERY WAS RAISED FROM THE LD. D.R. AS TO WHAT EVIDENCE THEY HAVE COLLECTED DURING THE COURSE OF SEARCH OR THEREAFTER, ON THE BASIS OF WHICH THE ASSESSING OFFICER HAS FORMED A BELIEF THAT THE INCOM E CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT IN THE HANDS OF THE ASSESSEE. NO SAT ISFACTORY ANSWER WAS FURNISHED BY THE LD. D.R. WE HAVE ALSO CAREF ULLY PERUSED THE SEIZED DOCUMENTS AND WE FIND THAT THERE IS A DEBIT ENT RY OF RS.50 LAKHS IN THE NAME OF MLIK KANNAUJ, BUT THIS ENTRY DOES NOT IND ICATE THAT THE AMOUNT OF RS.50 LAKHS WAS GIVEN TO THE MANAGING DIRECT OR OF THE ASSESSEE. THERE MAY BE HUNDRED OF MALIK IN KANNAUJ BUT ON THE BASIS OF THIS DUMB DOCUMENT, THE REOPENING OF ASSESSMENT IN THE HANDS OF THE ASSESSEE IS NOT PERMISSIBLE. MOREOVER, THE SEARCHED PARTY H AS ALSO EXAMINED SHRI. SOHANRAJ GUPTA AND THE STATEMENT IS AL SO PLACED ON RECORD AND AT NOWHERE SHRI. SOHANRAJ GUPTA HAS DEPOSE D ABOUT PAYMENT OF RS.50 LAKHS TO THE ASSESSEE. IN THE ABSENCE OF ANY RELE VANT MATERIAL, THE REOPENING OF ASSESSMENT IN THE HANDS OF THE ASSESSEE IS NOT PROPER. THE LD. CIT(A) HAS GIVEN VALID REASONS WHILE HOLDING T HAT THE REOPENING IS BAD. THE RELEVANT OBSERVATIONS OF THE LD. CIT(A) AR E EXTRACTED HEREUNDER:- '5.1.6 FROM ALL THE AFORESAID CORRESPONDENCE, IT IS O BVIOUS THAT THERE IS NO CLUE AS TO HOW THE IDENTITY OF 'MALIK KANNAUJ' AS APPEARING IN THE SEIZED DOCUMENT (SUPRA) WAS INTERPRETED AS SHRI ABDUL M ALIK, MD OF THE APPELLANT COMPANY. IN THE STATEMENT GIVEN BY SHRI SO HANRAJ GUPTA, THERE IS NO MENTION OF ANY MALIK. FURTHER, IN HIS STATEMENT UNDER OATH BEFORE THE ADIT(LNV), KANPUR, SHRI ABDUL MALIK, THE M.D. O F THE APPELLANT COMPANY HAD DENIED SUCH TRANSACTION. IN THESE CIRCUMST ANCES, I FAIL TO UNDERSTAND AS TO HOW, THE A.O. FORMED THE BELIEF THAT THE ENTRY IN THE NAME OF 'MALIK KANNAUJ' (AS APPEARING IN THE SEIZED DOCUMENT) REFERRED TO SHRI 'MALIK, M.D. OF THE APPELLANT COMPANY. FURT HER, EVEN FOR ARGUMENT SAKE IF 'MALIK KANNAUJ' INDEED REFERRED TO SHRI ABDU L MALIK, THE M.D. OF THE APPELLANT COMPANY, THERE WAS NO EVIDENCE/MATERIA L ON RECORD WHICH COULD LINK THAT PAYMENT TO THE ASSESSEE COMPANY. JUST BE CAUSE THE ADIT (INV), KANPUR HAD INFORMED THE A.O. THAT THE ENTRY OF PAYMEN OF RS. 50 LAKHS (AS MENTIONED IN THE SEIZED DOCUMENT) TO ONE 'MA LIK KANNAUJ' RELATED TO THE APPELLANT COMPANY (WITHOUT ANY SUPPOR TING IN THIS REGARD), TO SAME COULD NOT HAVE BEEN THE BASIS FOR TH E A.O. TO INITIATE THE REASSESSMENT PROCEEDINGS IN THE CASE OF THE APPELLANT CO MPANY. IT IS A TRITE LAW THAT THE 'REASONS TO BELIEVE' FOR REOPENIN G THE CASE SHOULD BE THAT OF THE A.O. ALONE AND COULD NOT BE FORMED AT T HE DICTATES OF OTHERS OR ON SUSPICION, CONJECTURES OR SURMISES. 5.1.7 IN THE INSTANT CASE, IN MY CONSIDERED VIEW, THE A.O. HAD NO MATERIAL BEFORE HIM WHICH COULD LINK THE SAID PAYMEN T TO THE APPELLANT COMPANY. THE 'REASONS TO BELIEVE' IN THE CASE HAVE BE EN RECORDED ON IRRELEVANT MATERIAL. ON THE BASIS OF SUCH MATERIAL, N O PRUDENT MAN COULD HAVE FORMED THE BELIEF THAT INCOME HAD ESCAPED ASSTT. IN THE HANDS OF THE APPELLANT COMPANY. ACCORDINGLY, I HOLD THAT THE VER Y ASSUMPTION OF JURISDICTION BY THE A.O. UNDER SECTION 147 OF THE ACT WAS ILLEGAL AND, THEREFORE, ANY ASSTT. FRAMED PURSUANT TO SUCH ILLEGALI TY CANNOT BE SUSTAINED. THUS, THE WHOLE ASSTT. FRAMED U/S 147 IS HEREBY ANNULLED, WHILE TAKING THIS VIEW, I AM FORTIFIED BY THE DECISIO NS OF THE HON'BLE 53 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 APEX COURT IN FIE CASE OF CIT VS DAULAT RAM RAWAT MUL L (87 ITR 349) WHEREIN, IT WAS HELD: 'THERE SHOULD, IN OUR OPINION, BE SOME DIRECT NEXUS BE TWEEN THE CONCLUSION OF FACT ARRIVED AT BY THE AUTHORITY CONCE RNED AND THE PRIMARY FACTS UPON WHICH THE CONCLUSION IS BASED. THE USE OF EXT RANEOUS AND IRRELEVANT MATERIAL IN ARRIVING AT THAT CONCLUSION W OULD VITIATE THE CONCLUSION OF FACTS..............................' IN THE RESULT, THE APPEAL IS ALLOWED.' 5. SINCE WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A), WE CONFIRM HIS ORDER. 52. SIMILARLY THE LUCKNOW BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS. PAWAN KUMAR AGARWAL (SUPRA) HAS HELD AS UNDER : 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND TH AT THE ISSUE IN DISPUTE WAS DECIDED BY LEARNED CIT(A) AS PER PARA 7 & 7.1 OF HIS ORDER, WHICH IS REPRODUCED BELOW FOR THE SAKE OF READY REFER ENCE:- 7. THAT VIDE GROUNDS NO. 3 TO 7, ASSESSEE HAS CHALLENGED THE ADDITIONS OF RS.1,13,40,000/- MADE ON ACCOUNT OF ALLEGED UNDISCLOSE D INCOME. I HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED TH E MATERIAL ON RECORD. I HAVE ALSO GONE THROUGH THE ORDER OF THE A. O. IT WAS CONTENDED BY THE LEARNED AR BEFORE ME THAT MERE JOTTINGS AND N OTINGS SHOULD NOT BE THE BASIS FOR MAKING ANY ADDITION IN THE RETURNED INCOME, MORE PARTICULARLY WHEN A.O HAS NOT ALLOWED THE OPPORTUNIT Y OF CROSS EXAMINATION OF MR. SHOBHAN RAJ MEHTA. THE MATERIAL PROVIDED/GATHERED BY THE DEPARTMENT HAS ALSO BEEN PRODUCED BEFORE ME. I N THIS PAPER, IT IS SEEN THAT NAME OF ASSESSEE IS APPEARING. IT WAS VEHEMENT LY ARGUED BEFORE ME THAT HOW THE DEPARTMENT COMES INTO CONCLUSI ON THAT NAME PAWAN AGARWAL AS APPEARING IN THE SEIZED MATERIAL IS A PPELLANT. THE NAME OF APPELLANT IS VERY COMMON AND IT IS POSSIBLE TO BE SOME OTHER PAWAN AGARWAL INSTEAD OF APPELLANT. THE SUBMISSIONS OF T HE APPELLANT ARE CONSIDERED. ON EXAMINATION OF THE ASSESSMENT RECORD IT IS SEEN THAT THE APPELLANT CATEGORICALLY DENIED HAVING ANY FINAN CIAL OR BUSINESS TRANSACTION WITH SH.SHOBHAN RAJ MEHTA. A REQUEST WAS A LSO MADE TO PROVIDE COMPLETE STATEMENTS ON THE BASIS OF WHICH ADDIT ION WAS BEING CONTEMPLATED BY THE ASSESSING OFFICER. HOWEVER, THE ASSESSI NG OFFICER DID NOT PROVIDE THE COPIES OF THOSE STATEMENTS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER DID NOT THROW ANY LIGHT ON ANY INQUIRY/ INVESTIGATION CARRIED OUT BY HIM THAT C OULD JUSTIFY THE ADDITIONS MADE BY HIM. THAT ASSESSEE HAS VEHEMENTLY STATED THAT THE DEPARTMENT HAS NOT PROVED THAT THE IDENTITY OF SHRI PAWAN AGARWAL WITH THE ASSESSEE AND NO SLIP, LETTER, DOCUMENT ETC. SHOWING A NY RELATIONSHIP OF ASSESSEE WITH SHRI SHOBHAN RAJ MEHTA WERE NOT FOUND FROM THE POSSESSION OF SHRI SHOBHAN RAJ METHA. THE A.O HAS REQUIR ED ASSESSEE'S COPY OF ACCOUNTS IN THE BOOKS OF M/S. DHARIWAL INDUSTRI ES, PUNE AND THIS WAS FOUND VERIFIED FROM THE ASSESSEE'S BOOKS OF A/C. IT IS CLEAR THAT THE ASSESSEE HAS BUSINESS RELATIONSHIP WITH M/S. DHARIWAL INDUST RIES, PUNE AND NOT WITH THE SHOBHAN RAJ MEHTA. THEREFORE, IT I S CLEAR THAT THE ADDITION MADE BY THE ASSESSING OFFICER PURELY BASED ON G UESS WORK WITHOUT ANY EVIDENCE, THEREFORE THIS ADDITION DESERVE S TO BE DELETED. 7.1 FROM THE FACTS ENUMERATED ABOVE, IT IS CLEAR THAT THE ASSESSING OFFICER FAILED TO ESTABLISH ANY CASE AGAINST THE APPELLANT. FUR THER INQUIRY/ 54 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 INVESTIGATION WAS REQUIRED TO BE CARRIED OUT ON THE I NFORMATION PASSED BY THE ADIT(INV.)- III, KANPUR BUT EVIDENCES ARE NOT COLLECTED OR PLACED. COPIES OF THE STATEMENTS, ON THE BASIS OF WHICH ADDITION S HAS BEEN MADE, WERE NOT PROVIDED NOR WAS THE OPPORTUNITY OF CROSS- E XAMINATION GIVEN TO THE APPELLANT. THE ASSESSING OFFICER MERELY SUMMARIZE D THE SALIENT FEATURES OF THE REPORT OF THE ADIT (INV.)-III, KANPU R AND THEREAFTER SUMMARILY REJECTED THE REPLY OF THE APPELLANT AS NOT SATISFACTORY. LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, CON TENDS THAT NEITHER THE SAID SHRI SHOBHAN RAJ MEHTA WAS ALLOWED TO BE CROSS- EXAMINED NOR A COPY OF HIS STATEMENT WAS GIVEN DESPITE SEVERAL REQUESTS. THE AO'S CONTENTION TO THE EFFECT THAT THE C ONTENTS OF THE STATEMENT WERE MADE KNOWN TO THE ASSESSEE, IS NOT A COMPL IANCE OF MANDATORY REQUIREMENT TO PROVIDE THE ASSESSEE INCRIMIN ATING MATERIAL TO DEFEND ITS OWN CASE AND THEREFORE IT CAN CATEGORIC ALLY BE HELD THAT: (I) STATEMENT OF SHRI SHOBHAN RAJ MEHTA WAS NOT GIVE N TO THE ASSESSEE. (II) BEYOND THE BELIEF OF PRESUMPTION ON THE INFORMA TION SUPPLIED BY THE ADIT(INV.)-III, KANPUR, FURTHER EVIDENCES ARE NOT FO UND TO CORROBORATE THE ADDITIONS. (III) CROSS-EXAMINATION OF SHRI SHOBHAN RAJ MEHTA WA S NOT ALLOWED. (IV) THE ASSESSEE FIRM HAD STRONGLY DENIED HAVING ANY FI NANCIAL AND BUSINESS TRANSACTIONS WITH MR. SHOBHAN RAJ MEHTA. IN VIEW OF THESE FACTUAL EXIGENCIES, IT IS HELD THAT T HE ADDITION MADE BY THE AO, WITHOUT ANY CORROBORATIVE EVIDENCE, WAS UNJU STIFIED AND ACCORDINGLY DELETED. ACCORDINGLY, GROUND NO. 3 TO 7 RAISED BY APPELLANT ARE ALLOWED. 5.1 FROM THE ABOVE PARA FROM THE ORDER OF CIT(A), W E FIND THAT A CATEGORICAL FINDING HAS BEEN GIVEN BY HIM THAT STATEM ENT OF SHRI SHOBHAN RAJ MEHTA WAS NOT GIVEN TO THE ASSESSEE AND BEYOND THE B ELIEF OF PRESUMPTION ON THE INFORMATION SUPPLIED BY THE ADIT(I NV.)-III, KANPUR, FURTHER EVIDENCES ARE NOT FOUND TO CORROBORATE THE A DDITIONS. HE HAS ALSO GIVEN A FINDING THAT CROSS-EXAMINATION OF SHRI SHOBH AN RAJ MEHTA WAS NOT ALLOWED AND THE ASSESSEE FIRM HAD STRONGLY DENIED HA VING ANY FINANCIAL AND BUSINESS TRANSACTIONS WITH MR. SHOBHAN RAJ MEHTA. THESE FINDINGS OF CIT(A) COULD NOT BE CONTROVERTED BY LEAR NED D.R. OF THE REVENUE AND MOREOVER, THE NAME OF THE ASSESSEE I.E. PAW AN KUMAR AGARWAL IS VERY COMMON NAME AND MERELY BECAUSE THIS NA ME IS MENTIONED IN A SEIZED PAPER FOUND DURING THE COURSE O F SEARCH AT BANGALORE AT THE PREMISES OF SHRI SHOBHAN RAJ MEHTA, WITH WHOM THE ASSESSEE WAS NOT HAVING ANY DIRECT TRANSACTION, IT CANNOT BE SAID THAT THE SAID PAWAN KUMAR AGARWAL, OF WHOM THE NAME WAS MENTIO NED IN THE SEIZED PAPER IS THE ASSESSEE. WITHOUT ESTABLISHING THIS AS PECT THAT THE NAME MENTIONED IN THE SEIZED PAPER IS THAT OF THE ASSESSE E, NO ADDITION CAN BE MADE IN THE HANDS OF THE PRESENT ASSESSEE ON THE B ASIS OF SUCH SEIZED PAPER. CONSIDERING THESE FACTS, WE DO NOT FIND A NY REASON TO INTERFERE IN THE ORDER OF CIT(A). 53. WE FIND THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF M/S. BHOLA NATH RADHA KRISHAN (SUPRA) WHILE DELETING AN IDENTIC AL ISSUE HAS OBSERVED AS UNDER : 55 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 7. AFTER CONSIDERING THE ARGUMENTS OF BOTH THE SIDES AND THE FACTS OF THE CASE, WE DO NOT FIND ANY INFIRMITY IN THE ABOVE ORDER OF LEARNED 7 ITA-5149/DEL/2012 CIT(A). THE ADDITION HAS BEEN MADE ON THE BASIS OF CERTAIN CHITS FOUND FROM SHRI SOHAN RAJ MEHTA AND HI S STATEMENT. ADMITTEDLY, THE ASSESSEE HAS NO DEALING WITH SHRI SOHAN RAJ MEHTA. THE ASSESSEE IS SUPPLYING GOODS (SUPARI) TO RMD GROUP WHO ARE MANUFACTURING GUTKHA. SHRI SOHAN RAJ MEHTA IS C&F A GENT FOR KARNATAKA REGION OF RMD GROUP. THE SEARCH HAD TAKEN PLACE AT T HE ASSESSEE'S BUSINESS PREMISES AS WELL AS AT THE BUSINESS PREMISES OF RMD GR OUP. NO EVIDENCE OF ANY UNRECORDED SALE BY THE ASSESSEE OR UNREC ORDED PURCHASE BY RMD GROUP WAS FOUND. THUS, WHEN, DESPITE SEARCH AT T HE PREMISES OF SELLER AND BUYER, NO EVIDENCE OF ANY UNRECORDED SALE OR PURCHASE IS FOUND, IN OUR OPINION, MERELY BECAUSE IN THE CHITS FO UND AT THE PREMISES OF SOME THIRD PARTY WITH WHOM THE ASSESSEE HAS NO BUSINESS D EALING, IT CANNOT BE PRESUMED THAT THE ASSESSEE IS MAKING SALES OUTSI DE BOOKS. MOREOVER, AS PER CHITS FOUND FROM SHRI SOHAN RAJ MEHT A, THE PAYMENT MADE TO THE ASSESSEE IS ONLY `9 LAKHS AND NOT `9 CRORES. THE DEPARTMENT HAS ALSO RELIED UPON THE STATEMENT OF SHRI SOHAN RAJ MEHTA. IT WAS POINTED OUT BY THE LEARNED COUNSEL THAT SHRI SOHAN R AJ MEHTA RETRACTED HIS STATEMENT. HOWEVER, AS PER REVENUE, SHRI SOHAN RAJ MEHTA HAS RETRACTED HIS RETRACTION AFFIRMING THE ORIGINAL STATE MENT. ON THESE FACTS, THE LEARNED CIT(A) HAS COME TO THE CONCLUSION THAT TH E STATEMENT OF SHRI SOHAN RAJ MEHTA CANNOT BE RELIED UPON BECAUSE HE IS FREQUENTLY RETRACTING HIS STATEMENT. MOREOVER, A STATEMENT OF A T HIRD PARTY CANNOT BE USED AGAINST THE ASSESSEE UNLESS THE ASSESSEE IS ALLOWED AN OPPORTUNITY TO CROSS-EXAMINE HIM. NOW, WE FIND THAT DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE SPECIFICALLY REQUESTED FO R ALLOWING OPPORTUNITY TO CROSS-EXAMINE SHRI SOHAN RAJ MEHTA AL SO AND REQUESTED THE ASSESSING OFFICER TO SUPPLY THE COPY OF RETRACTION O F HIS STATEMENT. THE ASSESSING OFFICER HAS REPRODUCED THE ASSESSEE'S LETTER, PARAGRAPH NO.11 OF WHICH, READS AS UNDER:- '11. THE ASSESSEE HAD REQUESTED YOUR GOOD SELF TO PROVIDE THE FOLLOWING DOCUMENTS: (A) COPY OF THE SWORN STATEMENT OF SH. SOHANRAJ ME HTA. (B) COPY OF WRITTEN STATEMENTS OR AFFIDAVITS OBTAINED FROM SH. MEHTA WHEREIN HE HAS MENTIONED THAT RS.9 CRORE WAS PAYABLE T O THE ASSESSEE. (C) COPY OF SUBSEQUENT RETRACTION OF THE STATEMENTS MA DE AT THE TIME OF SEARCH OPERATION, IF ANY. (D) COPY OF RECEIPTS OBTAINED FROM THE ASSESSEE BY SH. SOHANRAJ MEHTA ON PAYMENT TO THE ASSESSEE, IF ANY. THE ASSESSEE HAS BEEN PROVIDED STATEMENT OF SH.SOHAN RAJ MEHTA. HOWEVER, IT IS FURTHER SUBMITTED THAT THE ASSESSEE SHOULD BE GIVEN THE OPPORTUNITY TO CROSS EXAMINE THE GENUINENESS OF THE STA TEMENTS OF SH. SOHAN RAJ MEHTA AND SHOULD BE GIVEN REASONABLE OPPOR TUNITY TO VERIFY THE CLAIMS MADE BY HIM. IN THE CASE OF KISHAN CHAND CH ELARAM (125 ITR) IT HAS BEEN HELD BY THE HON'BLE SUPREME COURT OF IND IA THAT BEFORE TAKING A DECISION THE ASSESSEE HAS TO BE ALLOWED A CHANCE OR AN OPPORTUNITY OF REBUTTAL WITH RESPECT TO THE DOCUMENTS WHICH ARE TO B E USED AGAINST THE ASSESSEE. THE ASSESSEE HAS GONE THROUGH THE ENTIRE STATEMENT S OF SH. SOHAN RAJ MEHTA RECORDED UNDER SECTION 132(4) OF THE INCOME TAX ACT. NOWHERE THERE IS ANY MENTION OF BHOLA NATH RADHA KISH AN OR ANY OF ITS PARTNER IN THE SAID STATEMENT. THE ASSESSEE CANNOT BE HEL D LIABLE FOR ANY 56 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 ACT OF THE OMISSION OR COMMISSION DONE BY HIM. MR. SOHA N RAJ MEHTA'S STATEMENT REGARDING DECODING OF FIGURES IS ALSO NOT APP LICABLE ON THE ASSESSEE SINCE THIS HAS NO BEARING OR NEXUS OF CONNECTION W ITH THE ASSESSEE FIRM OR ITS BUSINESS TRANSACTION. NO ADDITION OR ADVERSE DECISIONS CAN BE TAKEN ON THE B ASIS OF SURMISES AND/OR CONJECTURES. THERE HAS TO BE SPECIFIC MENTION O F M/S BHOLA NATH RADHA KISHAN, 6377, NAYA BANS, KAHRI BAOLI, NEW DELHI IN ORDER TO LINK ANY PAYMENT TO IT FROM MR. SOHAN RAJ MEHTA OR ANYBO DY ELSE...........' (EMPHASIS BY UNDERLINING SUPPLIED BY US) 8. THE ASSESSING OFFICER HAS DEALT WITH THIS LETTER BUT HE HAS NOT GIVEN ANY REASON FOR NOT ALLOWING THE ASSESSEE AN OPPORT UNITY TO CROSS- EXAMINE SHRI SOHAN RAJ MEHTA. SIMILARLY, HE HAS NEIT HER SUPPLIED THE COPY OF RETRACTION OF HIS STATEMENT NOR DEALT WITH TH E RETRACTION IN THE 9 ITA-5149/DEL/2012 ASSESSMENT ORDER. IT IS ONLY IN THE REMAND REPORT HE HAS MENTIONED THAT SHRI SOHAN RAJ MEHTA HAS RETRACTED HIS RETRACTION ALSO. CONSIDERING THE TOTALITY OF ABOVE FACTS, WE ENTI RELY AGREE WITH THE LEARNED CIT(A) THAT THE STATEMENT OF SHRI SOHAN RAJ MEHTA CANNOT BE USED AGAINST THE ASSESSEE AND, SIMILARLY, THE CHITS FOUND FROM THE THIRD PARTY, WITH WHICH THE ASSESSEE HAS NO DEALING, CANNOT B E USED AGAINST THE ASSESSEE IN THE ABSENCE OF ANY CORROBORATIVE EVIDENCE. T HAT MERELY BECAUSE SOME EXCESS STOCK WAS FOUND IN THE SURVEY FOR WH ICH SEPARATE ADDITION HAS ALREADY BEEN MADE, IT CANNOT BE FURTHER PRESUMED THAT THE ASSESSEE MADE SALES OUTSIDE THE BOOKS, SPECIALLY WHEN THE SUR VEY WAS FOLLOWED BY THE SEARCH AND NEITHER DURING THE COURSE OF SURVEY NOR DURING THE COURSE OF SEARCH, ANY EVIDENCE OF SALE OUT SIDE THE BOOKS WAS FOUND. IN VIEW OF THE TOTALITY OF ABOVE FACTS, WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDER OF LEARNED CIT(A). THE SAME IS SUSTAINED. 54. WE FIND THE PUNE BENCH OF THE TRIBUNAL IN THE C ASE OF PRADEEP AMRUTLAL RUNWAL REPORTED IN 149 ITR 548 WHILE DELET ING ADDITION UNDER IDENTICAL FACTS AND CIRCUMSTANCES HAS OBSERVED AS UNDER : 5. AFTER GOING THROUGH THE RIVAL SUBMISSIONS AND MATE RIAL ON RECORD, WE FIND THAT THE ISSUE BEFORE US IS REGARDING THE ADDIT ION OF 5,10,00,000/-. AS STATED EARLIER, DURING THE SEARCH P ROCEEDINGS IN THE CASE OF DHARIWAL GROUP, SOME LOOSE PAPERS WERE SEIZED WH EREIN CERTAIN AMOUNTS WERE WRITTEN AGAINST THE NAME OF 'PRADEEP RUN WAL'. HENCE, THE CASE OF THE ASSESSEE WAS REOPENED U/S 148 OF THE INCOME TA X ACT. IT WAS EXPLAINED TO THE LEARNED ASSESSING OFFICER THAT THE ASSESSE E HAD NOT EARNED ANY SUCH INCOME OF 5.10 CRS. AND THEREFORE, NO ADDITION SHOULD BE MADE. HOWEVER, THE ASSESSING OFFICER HAS NOT ACCEPTED THE CONTENTION OF THE ASSESSEE. 5.1 THE ASSESSING OFFICER HAS STATED THAT THE PAPERS WERE SEIZED FROM DHARIWAL GROUP. THE SAID PAPERS WERE SEIZED FROM THE RESIDENCE OF SHRI SOHANRAJ MEHTA. ACCORDING TO THE ASSESSING OFFICER , THE ASSESSEE COULD NOT DISOWN THE EXISTENCE OF SUCH DOCUMENTS. THE A SSESSING OFFICER OBSERVED THAT THE MONEY HAS BEEN PASSED ON BY DHARIWAL GROUP THROUGH THEIR STAFF. HENCE, THE ASSESSEE MUST HAVE RECEIVED THE A MOUNT NOTED ON THE SEIZED PAPERS. THE ASSESSING OFFICER HAS PROCEEDED TO MAKE THE ADDITION OF RS. 5.10 CRS. BY STATING THAT AS PER SECTION 114 OF THE IN DIAN EVIDENCE ACT, IT IS AN ACCEPTED RULE OF EVIDENCE THA T IF A PERSON 57 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 POSSESSING AN EVIDENCE DOES NOT PRODUCE IT, THE INFERENC E IS THAT SUCH EVIDENCE IF PRODUCED IS DETRIMENTAL TO HIM. ACCORDIN GLY, THE ASSESSING OFFICER HELD THAT THE SAID RECEIPTS WERE THE INCOME O F THE ASSESSEE. 5.2 THE ASSESSING OFFICER HAS FURTHER HELD THAT ACCORDI NG TO THE PROVISIONS OF SECTION 80 OF THE INDIAN EVIDENCE ACT, T HERE IS A PRESUMPTION AS TO THE DOCUMENTS PRODUCED AS RECORD OF E VIDENCE ARE GENUINE. HENCE, HE HAS HELD THAT THE DOCUMENTS SEIZED FROM DHARIWAL GROUP COULD BE RELIED UPON FOR MAKING ADDITION IN T HE HANDS OF THE ASSESSEE. THE ASSESSING OFFICER HAS PLACED RELIANCE ON THE D ECISIONS OF SUMATI DAYAL VS. CIT [(1995) 214 ITR 801(SC)], CIT V S. DURGA PRASAD MORE [(1969)72 ITR 807(SC], HIMMATRAM LAXMINARAIN V S. CIT [(1986)161 ITR 7(P&H)], CIT VS. GANAPATHI MUDALIAR [ (1964)53 ITR 623(SC)] AND CIT VS. LACCHMAN DASS OSWAL [(1980)126 ITR 446(P&H)]. 5.3 ACCORDING TO US, THE ADDITIONS MADE BY THE ASSESSIN G OFFICER WERE NOT JUSTIFIED IN THE FACTS AND CIRCUMSTANCES VIS--VIS OF THE ASSESSEE. AS DISCUSSED EARLIER, DURING THE COURSE OF SEARCH IN THE CA SE OF DHARIWAL GROUP, THE ONLY DOCUMENTS FOUND ON THE BASIS OF WHICH THE ADDITION U/S 69A HAS BEEN MADE IN THE CASE OF THE ASSESSEE ARE IN THE FORM OF TWO LOOSE PAPERS WHEREIN AMOUNTS OF 4.80 CRORES AND 30 LACS WERE NOTED AGAINST THE NAME 'MR. PRADEEP RUNWAL'. APART F ROM THIS, NO EVIDENCE HAS BEEN FOUND TO SUGGEST THAT THE ASSESSEE HAD A CTUALLY RECEIVED THE SAID AMOUNT OR THAT THE ASSESSEE HAD ENTER ED INTO ANY TRANSACTION WITH DHARIWAL GROUP. THERE IS NO EVIDENCE ON RECORD TO SUGGEST THAT THE ASSESSEE HAS PREVIOUS BUSINESS RELATIONS WITH THE DHARIWAL GROUP. IN THE ABSENCE OF ANY DOCUMENTARY EV IDENCE TO SUGGEST THE SAME, IT COULD NOT BE PRESUMED THAT THE AMOUNTS RE FLECTED IN THE LOOSE PAPERS WERE THE INCOME OF THE ASSESSEE RECEIVED FRO M DHARIWAL GROUP. IT HAS BEEN THE CONSISTENT STAND OF THE ASSESSEE THA T THERE MAY BE MANY PERSONS OF THE NAME PRADEEP RUNWAL IN PUNE AND T HERE WAS NO SPECIFIC EVIDENCE TO SUGGEST THAT THE SAID NOTINGS PERT AINED TO THE ASSESSEE. HENCE, IT WAS NOT JUSTIFIED AS TO HOW, IN THE AB SENCE OF ANY OTHER CORROBORATIVE DETAILS, THE ASSESSING OFFICER HAS ASSU MED THAT THE AMOUNTS REFLECTED THE INCOME OF THE ASSESSEE HIMSELF, WH ILE THE ASSESSEE HAS NO BUSINESS DEALINGS OF HIS WITH DHARIWAL GROUP. THE ASSESSING OFFICER HAS NOT BROUGHT ON RECORD ANY EVIDENCE TO SU GGEST THAT DHARIWAL GROUP HAS ADMITTED THAT THE AMOUNTS WERE PAID TO THE ASSESSEE. HENCE, SIMPLY BECAUSE THE NAME OF THE ASSESSEE IS NOTED ON THE SEI ZED PAPERS DOES NOT MEAN THAT THE ADDITION COULD BE MADE IN THE HANDS OF THE ASSESSEE. SINCE NO EVIDENCE WAS FOUND RELATING TO THE EX ISTENCE OF ANY TRANSACTION BETWEEN THE ASSESSEE AND DHARIWAL GROUP AND IN THE ABSENCE OF ANY CORROBORATIVE EVIDENCE TO SUGGEST THAT THE ASSESSEE HAD ACTUALLY RECEIVED THE SAID AMOUNT, NO ADDITION COULD BE MADE MERELY ON THE BASIS OF NOTING IN LOOSE PAPERS FOUND DURING THE SEA RCH PROCEEDINGS IN THE CASE OF DHARIWAL GROUP AGAINST THE NAME OF THE ASSESSEE. 5.4 THE PRESUMPTION U/S 132(4A) IS AVAILABLE ONLY IN RESPECT OF THE PERSON FROM WHOM THE PAPER IS SEIZED. IT COULD NOT BE APPLIED AGAINST A THIRD PARTY AND HENCE, NO ADDITION COULD BE MADE ON THE BASIS OF THE EVIDENCE FOUND WITH THIRD PARTY. THE PRESUMPTION U/S. 132(4A) COULD BE USED ONLY AGAINST THE PERSON FROM WHOSE PREMISES THE DOCU MENTS ARE FOUND AND NOT AGAINST THE PERSON WHOSE NAME APPEARS IN THE SEIZED PAPERS. 58 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 5.5 IN THIS CASE, THE ADDITION HAS BEEN MADE ON THE B ASIS OF THE DOCUMENTS FOUND WITH DHARIWAL GROUP AND THUS, THE PR ESUMPTION U/S. 132(4A) COULD NOT BE USED AGAINST THE ASSESSEE SINCE NO I NCRIMINATING DOCUMENTS WERE FOUND WITH IT. IN THE CASE OF ACIT VS. LATA MANGESHKAR (MISS) (1974) 97 ITR 696 (BOM), THE ADDITION WAS MADE IN THE HANDS OF THE ASSESSEE ON THE BASIS OF THE ENTRIES IN THE BOOKS OF T HIRD PERSONS. HON'BLE BOMBAY HIGH COURT HELD THAT SUCH ADDITION C OULD NOT BE MADE ONLY ON THE BASIS OF THE NOTINGS IN THE BOOKS OF THIRD PERSONS. THE FACTS OF THE PRESENT CASE ARE COVERED BY THE DECISION OF LATA M ANGESHKAR (SUPRA). IT IS A SETTLED LEGAL POSITION THAT THE DECISION OF JUR ISDICTIONAL HIGH COURT IS BINDING ON ALL AUTHORITIES BELOW IT. THUS, THE RELI ANCE PLACED BY THE ASSESSING OFFICER ON THE LOOSE PAPERS IS NOT JUSTIFIED AT A LL. THEREFORE, THE QUESTION OF MAKING ANY ADDITION IS NOT JUSTIFIED IN TH E ABSENCE OF OTHER CORROBORATIVE EVIDENCE TO THAT EFFECT. 5.6 WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED AU THORIZED REPRESENTATIVE SUBMITTED THAT THE ASSESSING OFFICER WAS NO T JUSTIFIED IN MAKING THE ADDITIONS BY RELYING ON THE PROVISIONS OF SE CTION 114 OF THE INDIAN EVIDENCE ACT. THE CONCERNED ASSESSING OFFICER HA S REFERRED THE AFORESAID SECTION WHICH STATES THAT THE COURT MAY PRESUM E THAT THE EVIDENCE WHICH COULD BE AND IS NOT PRODUCED WOULD, I F PRODUCED BE UNFAVOURABLE TO THE PERSON WHO WITHHOLDS IT. IT IS PER TINENT TO MENTION THIS RULE APPLIES TO THE CASES WHEREIN IT IS EVIDENT OR AN ESTABLISHED FACT THAT A PARTICULAR EVIDENCE OR DOCUMENT WAS IN POSSESSION OF THE ASSESSEE. FOR EXAMPLE, AN OWNER OF A LAND MAY WELL BE E XPECTED TO BE IN POSSESSION OF A 7/12 EXTRACT OF THE SAID LAND IN ORDER T O CHECK WHETHER THE SAID LAND WAS USED FOR AGRICULTURAL PURPOSES. IN TH E PRESENT CASE, THE PROVISIONS RELIED BY THE ASSESSING OFFICER ARE NOT APPLIC ABLE, THE ASSESSEE IS NOT WITHHOLDING ANY DOCUMENTS. THE CASE OF DEP ARTMENT IS THAT THE AMOUNT MENTIONED ON THE SEIZED PAPER FOUND WITH THE DHARIWAL GROUP INDICATES THAT THE ASSESSEE HAS RECEIVED THE AMOUNT , THEREFORE, THE BURDEN WAS ON THE ASSESSING OFFICER TO ESTABLISH THE SAME . THE RELIANCE PLACED ON THE PROVISIONS OF SECTION 114 OF INDIAN EVID ENCE ACT IS MISPLACED. 5.7 AS STATED ABOVE, IT HAS BEEN CONSISTENT STAND OF TH E ASSESSEE THAT THE ASSESSEE HAS HAD NO BUSINESS RELATIONS WHATSOEVER WITH T HE DHARIWAL GROUP. FURTHER, APART FROM THE NOTING ON P APER WITH THE NAME 'PRADEEP RUNWAL, THERE IS NO CORROBORATIVE EVIDENCE IN THIS REGARD AGAINST THE ASSESSEE. IN SUCH CIRCUMSTANCES, WHERE THE ASSESSEE HAS NOT ENTERED INTO ANY TRANSACTION WITH THE DHARIWAL GROU P, ONE CERTAINLY COULD NOT EXPECT THE ASSESSEE TO BE IN POSSESSION OF ANY EV IDENCE TO SUGGEST THAT IT HAS NOT ENTERED INTO ANY SUCH TRANSACTIO N EXCEPT FOR HIS BOOKS OF ACCOUNT WHICH HAVE ALREADY BEEN VERIFIED BY THE CONCERNED ASSESSING OFFICER. HENCE, THE ASSESSING OFFICER WAS NOT JU STIFIED IN PLACING RELIANCE ON THE PROVISION OF SECTION 114 OF T HE INDIAN EVIDENCE ACT. 5.8 IT WAS FURTHER SUBMITTED ON BEHALF OF ASSESSEE THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING THE ADDITION BY R ELYING ON THE PROVISIONS OF SECTION 80 OF THE INDIAN EVIDENCE ACT WH ICH STATES THAT THERE IS A PRESUMPTION THAT THE DOCUMENTS PRODUCED BEF ORE THE COURT AS RECORD OF EVIDENCE ARE GENUINE. IN THIS REGARD, THE STAND OF THE ASSESSEE IS THAT IN THE CASE OF ASSESSEE, DOCUMENT PRODUCED WAS ME RELY IN THE FORM OF A ROUGH NOTING WHEREIN CERTAIN AMOUNTS WERE WRITTEN AGAINST THE NAME 'PRADEEP RUNWAL'. AS DISCUSSED EARLIER, THERE MAY BE MANY 59 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 PEOPLE OF THAT NAME IN PUNE AND IN THE ABSENCE OF AN Y OTHER CORROBORATIVE EVIDENCE TO THAT EFFECT. IN SUCH A SITU ATION, IT CANNOT BE INFERRED THAT IT BELONGS TO THE ASSESSEE. 5.9 WHILE MAKING THE ADDITION OF 5.10 CRORES AS STATED ABOVE, THE CIT(A) RELIED ON THE FOLLOWING DECISIONS OF SUMATI DA YAL VS. CIT [(1995) 214 ITR 801(SC)], CIT VS. DURGA PRASAD MORE [(1969)72 ITR 807(SC], HIMMATRAM LAXMINARAIN VS. CIT [(1986)161 ITR 7(P&H)] , CIT VS. GANAPATHI MUDALIAR [(1964)53 ITR 623(SC)] AND CIT V S. LACCHMAN DASS OSWAL [(1980)126 ITR 446(P&H)]. IN THIS REGARD, THE STAND OF THE ASSESSEE HAS BEEN THAT THE CASE LAWS RELIED BY THE ASSESSING O FFICER ARE DIFFERENTIABLE ON FACTS AND HENCE, THE SAME ARE NOT A PPLICABLE TO THE CASE OF THE ASSESSEE. IN ALL THE CASES RELIED BY THE ASSESSING OF FICER, THE FACT THAT THE ASSESSEE HAD ACTUALLY EARNED INCOME OR RECEIVE D AMOUNTS BY WAY OF CASH CREDITS, UNEXPLAINED INVESTMENT ETC. WAS NO T UNDER DISPUTE. THE ISSUE RELATED TO WHETHER THE RECEIPTS WERE RECEIV ED FROM GENUINE LENDERS OR WHETHER THE INVESTMENTS OR RECEIPTS WERE A P ART OF THE DISCLOSED SOURCES OF INCOME OF THE ASSESSEE. WE FIND THAT I N THE PRESENT CASE, THE ISSUE IN QUESTION ITSELF IS WHETHER ROUGH NOTIN G ON LOOSE PAPER FOUND IN THE COURSE OF SEARCH AT THE PREMISES OF THIRD PERSON COULD BE ASSUMED THE INCOME FROM THE ASSESSEE AS IN THE CASES RELI ED BY THE ASSESSING OFFICER. THIS FACT HAS NOT BEEN ESTABLISHED IN THE CASE OF ASSESSEE, THEREFORE, THE CASE LAWS RELIED BY THE ASSESSING OF FICER ARE CLEARLY DISTINGUISHABLE ON FACTS AND HENCE, NOT APPLIC ABLE TO THE CASE OF THE ASSESSEE. 5.10 ACCORDING TO CIT(A), THE NAME OF THE ASSESSEE AP PEARS ON THE SEIZED PAPERS AND SEIZED DOCUMENTS GIVE A DETAILED AND MINUTE NOTING OF THE TRANSACTIONS OF DHARIWAL GROUP. HE HAS STATED THAT SHRI SOHANRAJ MEHTA HAS ADMITTED THAT THE DOCUMENTS WERE WRITTEN BY HIM AND MOST OF THE PAPERS WERE WRITTEN IN MARWADI LANGUAGE. THE CIT (A) REFERRED TO THE FACT THAT SHRI MEHTA HAD ADMITTED THAT THE PAPERS BE LONGED TO DHARIWAL GROUP. IN PARA 4.3, THE CIT(A) STATES THAT WHEN THE A UTHOR OF THE PAPER HAS ACCEPTED THE NOTINGS MADE BY HIM, IN THAT EVENT, THE DOCUMENT IS HAVING GREAT EVIDENTIARY VALUE AND COULD NOT BE REJ ECTED. AS REGARDS, THE OBJECTION OF THE ASSESSEE THAT NO EVIDENCE WAS FOUND TO INDICATE THAT THE ASSESSEE HAD RECEIVED THE AMOUNT, THE CIT(A) REFERRED T O THE FACT OF ACCEPTANCE OF THE PAPER BY SHRI MEHTA AND CONSIDERIN G THE FACT THAT THE MODUS OPERANDI WAS CLARIFIED BY SHRI MEHTA, THE ADDIT ION WAS RIGHTLY MADE BY THE ASSESSING OFFICER, HAS BEEN HELD BY CIT(A). HE HAS REFERRED TO VARIOUS DECISIONS IN SUPPORT OF THE ADDITION MADE. F IRSTLY, HE HAS RELIED UPON THE DECISION OF ITAT THIRD MEMBER IN THE CASE OF KHOPADE KISANRAO MANIKRAO [74 ITD 25]. IN THIS REGARD, THE ST AND OF ASSESSEE IS THAT THE DECISION IN THE CASE BEFORE THIRD MEMBER WAS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. IN THE SAID CASE, THE ASSESSE E WAS SEARCHED AND DOCUMENTS WERE FOUND INDICATING ON MONEY RECEIVE D ON SALE OF PLOTS. ON THE BASIS OF THE DOCUMENTS FOUND, THE ASSESSING OFFICER ESTIMATED THE INCOME FROM ON MONEY WHICH WAS HELD TO BE VALID. IN THAT CASE, THE ISSUE THAT NO ADDITION COULD BE MADE ON THE BASIS OF DOCUMENTS FOUND WITH THIRD PARTY WAS NEITHER RAISED NOR APPLICA BLE. THUS, ACCORDING TO US, THE SAID DECISION HAS NO APPLICATION T O THE FACTS OF THE ASSESSEE'S CASE. 5.11 THE CIT(A) IN PARA 2.5 HAS PLACED RELIANCE UPO N ITAT, PUNE DECISION IN THE CASE OF DHANVARSHA BUILDERS AND DEVELOP ERS PVT. LTD. [102 ITD 375]. IN THE SAID CASE, THE ASSESSEE WAS SEARCHED AND 60 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 DOCUMENTS WERE FOUND INDICATING ON MONEY RECEIVED BY THE ASSESSEE. IT WAS HELD THAT THE DOCUMENT WAS FOUND WITH THE ASSESSEE AN D THEREFORE, THE A.O. WAS JUSTIFIED IN MAKING THE ADDITION. EVEN I N THIS CASE, THE ISSUE OF NO ADDITION CAN BE MADE ON THE BASIS OF DOCUMENTS F OUND WITH THIRD PARTY WAS NOT RAISED. THE CIT(A) HAS FURTHER REFERRED TO THE DECISION OF ITAT, MUMBAI IN THE CASE OF P. R. PATEL VS. DCIT [(20 01) 78 ITD 51 (MUM)] FOR THE PROPOSITION THAT SEIZED PAPERS CANNOT B E CALLED DUMB PAPER BECAUSE THEY INDICATE DATE, AMOUNT AND CALCULA TION. THERE IS NO DISPUTE WITH THE ABOVE PROPOSITION. THE PAPERS ARE FOU ND PERTAINING TO DHARIWAL GROUP AS ADMITTED BY SHRI MEHTA AND THEREFO RE, THESE DOCUMENTS MAY BE RELEVANT FOR DECIDING THE ISSUE IN TH E CASE OF DHARIWAL GROUP. HOWEVER, IN THE ABSENCE OF ANY CORROBORATIVE EVIDENCE, THE ADDITION COULD NOT BE MADE IN THE HANDS OF THE ASSESSEE ON THE BASIS OF THE SAID PAPERS. 5.12 THE CIT(A) HAS FURTHER RELIED UPON ITAT THIRD MEMBER DECISION IN THE CASE OF DHUNJIBHOY STUD AND AGRICULTURAL FARM VS. DCIT [(2002) 82 ITD 18 (PUNE)(TM)], IN THIS CASE, THE ASSESSEE WAS A BU ILDER AND HAD SOLD FLAT TO ONE MR. TANNA. THERE WAS SEARCH ON MR. TA NNA WHEREIN A DOCUMENT WAS FOUND INDICATING FLAT PURCHASED FROM TH E ASSESSEE FIRM AND THE AMOUNT OF CHEQUE AND CASH PAID. THE AMOUNT O F CHEQUE PAID WAS TALLYING WITH THE BOOKS AND THEREFORE, IT WAS HELD T HAT CASH WAS PAID AS NOTED ON THE PAPER. MR. TANNA HAD ALSO ACCEPTED THE FACT THAT CASH WAS PAID TO THE ASSESSEE. IN THESE FACTS, ITAT HELD THAT SINCE THERE WAS TRANSACTION BETWEEN ASSESSEE AND SHRI TANNA AND ALSO THE FACT THAT THE AMOUNTS PAID BY CHEQUE TALLIED, THE ADDITION WAS RIGH TLY MADE. THE ASSESSEE RIGHTLY SUBMITTED THAT THE SAID DECISION IS NOT AP PLICABLE TO THE FACTS OF THE PRESENT CASE. FIRSTLY, THERE IS NO TRANSACTI ON BETWEEN THE ASSESSEE AND DHARIWAL GROUP. SECONDLY, THERE IS NO CORRO BORATIVE EVIDENCE FOUND WHICH COULD SUGGEST THAT THE ASSESSEE HAD RECEIVED ANY AMOUNT. THE ASSESSING OFFICER AND CIT(A) HAVE ALSO NOT B ROUGHT ON RECORD ANY EVIDENCE TO SUGGEST THAT THE PAYMENT WAS MA DE TO THE ASSESSEE. ACCORDINGLY, CONSIDERING THE FACTUAL POSITION, THE DECISION IN THE CASE OF DHUNJIBHOY STUD AND AGRICULTURAL FARM IS NOT APPLICABLE IN THE CASE OF ASSESSEE. 5.13 THE CIT(A) HAS RELIED ON THE DECISION IN THE CA SE OF VASANTIBAI N. SHAH VS. CIT [(1995) 213 ITR 805 (BOM)]. IN THIS CASE, THE ISSUE WAS REGARDING VALIDITY OF REASSESSMENT PROCEEDINGS. THE ASSESSEE HAD MADE A FALSE DISCLOSURE. SUBSEQUENTLY, THE CASE WAS REOPENED. HON'BLE HIGH COURT HELD THAT THE REOPENING WAS VALID SINCE THE ASSESSE E HERSELF HAD MADE A FALSE DISCLOSURE. THUS, THE FACTS ARE TOTALLY DI FFERENT FROM THE PRESENT CASE AND HENCE, THE RATIO OF VASANTIBAI N. SHA H (SUPRA) IS NOT APPLICABLE TO THE ASSESSEE'S CASE. THE CIT(A) FURTHER RE LIED ON THE DECISION IN THE CASE OF GREEN VALLEY BUILDER V. CIT [ (2008) 296 ITR 225 (KER)]. IN THE SAID CASE, THE ASSESSEE WAS ENGAGED IN REAL ESTATE BUSINESS AND IT HAD SOLD CERTAIN PLOTS. THE ASSESSEE STATED THAT THE PLOTS WERE SOLD AT RS.1750/- PER CENT WHILE THE ASSESSING OFFICER ON THE BASIS OF EVIDENCES HELD THAT ACTUALLY THE LANDS WERE SOLD AT RS. 4,000/- PER CENT. HON'BLE HIGH COURT HELD THAT THE ADDITIONS MADE WERE CORRECT. THE SAID DECISION IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. THE CIT(A) HAS FURTHER RELIED UPON THE DECISION IN THE CASE OF CHUHA RMAL VS. CIT [(1988) 172 ITR 250 (SC)] FOR THE PROPOSITION THAT DOCUMENTA RY EVIDENCE PLAYS AN IMPORTANT PART. THERE IS NO DISPUTE TO THE SAID PRO POSITION BUT IN THE ABSENCE OF ANY CORROBORATIVE EVIDENCE NO ADDITION CO ULD BE MADE IN THE HANDS OF THE THIRD PARTY. 61 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 5.14 WE FIND THAT IN THAKKAR DEVELOPERS LTD. [ITA NO . 581/PN/08], ITAT IN PARAS 3 AND 4 HELD AS UNDER:- 'THE ABOVE SAID SHRI KOLHE WAS EXAMINED, CROSS EXAMINED AND RE- EXAMINED AND NO EVIDENCE WAS GATHERED FROM HIM TO EST ABLISH THAT THE CONTENTS OF THE SEIZED DOCUMENTS WERE CORRECT AND TRUE . THUS, IN THE ABSENCE OF ANY CORROBORATIVE EVIDENCE IN THE PRESENT CASE, THE SAID SEIZED DOCUMENT HAS TO BE TREATED AS A DUMB DOCUMENT A S RIGHTLY OBSERVED BY THE CIT(A). THE A.O. DISMISSED THE RETRACTI ON OF THE STATEMENT DATED 29.03.2003 BY FILING AN AFFIDAVIT AS AN AFTER THOUGHT AND SELF SERVING. THE A.O. CONCLUDED THAT THE FACTS MENTIO NED IN THE SEIZED DOCUMENTS CLEARLY INDICATED THAT THE STATEMENT GIVEN ON 29.03.2003 WAS TRUE AND CORRECT. THE A.O. HAS NOT BROUGHT ON RECORD ANY MATERIAL OR CORROBORATIVE EVIDENCES TO COME TO THESE CONCLUSIONS. THE REASONS GIVEN BY THE A.O. IN THIS REGARD ARE WITHOUT ANY BASIS AND SU PPORT. THE AFFIDAVIT FILED BY SHRI KOLHE REMAINED UNCONTROVERTED AND WHI CH IS AGAINST THE SETTLED LEGAL POSITION ON THE ISSUE THAT THE CONTENTS OF THE AFFIDAVIT BE REJECTED BY CONFRONTING THE SAME TO THE DEPONENT WHI CH IS MISSING IN THIS CASE. NOTHING WAS SHOWN BY THE A.O. THAT THERE WA S ANY OTHER MATERIAL CO RELATED TO THE SEIZED DOCUMENTS. THE A.O. WAS NOT JUSTIFIED IN REJECTING THE CONTENTS OF THE AFFIDAVIT AS MENTIONED ABOVE. THE A.O. FURTHER RELIED ON THE PRESUMPTIONS U/S 132(4A) OF THE ACT ON THE GROUND THAT THIS SECTION WAS VERY CLEAR THAT THE CONTENTS OF B OOK OF ACCOUNT AND OTHER DOCUMENTS MAY BE PRESUMED TO BE TRUE AND PRESUMP TION CAN BE DRAWN EVEN ON THE THIRD PERSON WHO WAS NOT SEARCHED U/ S 132 OF THE ACT. THE A.O. FURTHER REJECTED THE SUBMISSIONS GIVEN BY THE ASSESSEE IN HIS PAPER BOOK DATED 28.12.2007 REITERATING THE SAME STAND. THE A.O. HAS DRAWN INFERENCES AND PRESUPPOSES RELYING ON SURMISES AND CONJECTURES. THE ITAT MUMBAI BENCH IN THEIR DECISION IN THE CASE OF STRAPTEX (INDIA) PVT. LTD. [84 ITD 320 (MUM), CLEAR LY HELD THAT THE PRESUMPTION U/S 132(4A) IS APPLICABLE ONLY AGAINST THE PERSON FROM WHOM POSSESSION THE BOOKS OF ACCOUNTS OR OTHER DOCUMENTAR Y WERE FOUND AND NOT AGAINST ANY OTHER PERSON. IT IS HELD TH AT AS PER SECTION 132(4A) WHERE ANY BOOKS OF ACCOUNT OR DOCUMENT IS FOU ND IN THE POSSESSION AND CONTROL OF ANY PERSON IN THE COURSE OF THE SEARCH, IT IS TO BE PRESUMED THAT THEY BELONG TO ' SUCH PERSON'. THUS, C LEARLY THE PRESUMPTION IS IN RESPECT OF THE PERSON FROM WHOM THEY WERE FOUND. THE USE OF THE WORD 'TO SUCH PERSON' IN THE SAID SECTIO N MEANS THE PERSON FROM WHOM THE BOOKS OF ACCOUNT OR DOCUMENTS WER E FOUND. CLAUSE (II) OF SECTION 132 (4A) PROVIDES THAT THE CON TENTS OF SUCH BOOKS OF ACCOUNT OR DOCUMENTS ARE TRUE. THIS PRESUMPTION CAN BE APPLIED ONLY AGAINST THE PERSON FROM WHOSE POSSESSION THE BOOKS OF ACCOU NT OR THE DOCUMENT WERE FOUND. THEREFORE, THE A.O. WAS NOT JU STIFIED IN APPLYING THE PROVISIONS OF SECTION 132(4'A) TO THE ASSESSEE IN TH E PRESENT CASE WHO WAS NOT SEARCHED U/S 132 OF THE ACT NOR THE DOCUME NT WAS FOUND AND SEIZED FROM, THEIR POSSESSION. EVEN, OTHERWISE, SUCH P RESUMPTION U/S 132(4A) OF THE ACT IS NOT CONCLUSIVE AND REBUTTABL E ONE'. 6. SIMILAR VIEW HAS BEEN TAKEN BY ITAT, PUNE IN AMI T D IRSHID [ITA NO.988/PN/11] THAT PRESUMPTION U/S. 134(4A) IS AVAILAB LE ONLY AGAINST THE PERSON FROM WHOSE POSSESSION THE DOCUMENT IS FOUND AN D NOT AGAINST THE THIRD PERSON. IN THE ABSENCE OF CLINCHING EVIDENCE AGAINST THE THIRD PERSON AS STATED ABOVE, NO ACTION COULD BE TAKEN AGAINST HIM. IN SUCH A SITUATION, THE ASSESSING OFFICER WAS NOT JUSTIFIED TO MAKE ADDITION IN QUESTION IN ASSESSEE'S CASE. IN VIEW OF ABOVE, WE ARE O F THE VIEW THAT THE ADDITION MADE BY THE ASSESSING OFFICER IS NOT JUSTIFI ED AND THE SAME 62 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 IS DIRECTED TO BE DELETED. IT IS PERTINENT TO MENTION HERE THAT THIS CASE IS BEING DECIDED IN ITS FACTS AND CIRCUMSTANCES; IT CANNOT BE APPLIED TO OTHER CASES AS SUCH. 7. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED . 55. SINCE IN THE INSTANT CASE THE ASSESSEE FROM THE VER Y BEGINNING HAS DENIED TO HAVE RECEIVED ANY SUCH PAYMENT FROM M/S. D HARIWAL GROUP THROUGH MR. SOHAN RAJ MEHTA AND SINCE NO INCRIMINATI NG MATERIAL WAS FOUND FROM THE RESIDENCE OF THE ASSESSEE DURING THE COUR SE OF SEARCH AND SINCE THE ASSESSEE IS NOT DEALING WITH M/S. DHARIWAL GROU P IN HIS INDIVIDUAL CAPACITY, THEREFORE, RESPECTFULLY FOLLOWI NG THE DECISIONS CITED ABOVE AND IN VIEW OF OUR REASONINGS GIVEN EARLIER, WE ARE OF THE CONSIDERED OPINION NO ADDITION IN THE HANDS OF THE ASSE SSEE CAN BE MADE. SINCE IT IS HELD THAT THE ASSESSEE HAS NOT RECEIVE D ANY AMOUNT, THEREFORE, THE QUESTION OF TAXING THE SAME U/S.56(2)(V I) AS HELD BY CIT(A) DOES NOT ARISE. IN THIS VIEW OF THE MATTER, WE SET ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICER TO DELET E THE ADDITION OF RS.1 CRORE FOR A.Y. 2006-07 AND RS. 20 CRORES FOR A.Y. 2007-08. GROUNDS RAISED BY THE ASSESSEE ON THIS ISSUE ARE ACCORDINGLY ALLOWE D. 56. SINCE THE ASSESSEE SUCCEEDS ON MERIT, THEREFORE, THE GROUND RELATING TO VALIDITY OF ASSESSMENT U/S.143(3) R.W.S. 153A BECOME ACADEMIC IN NATURE AND THEREFORE THE SAME IS NOT BEIN G ADJUDICATED. 45. SINCE THE FACTS OF THE INSTANT CASE ARE IDENTICAL TO THE FACTS OF THE CASE DECIDED BY THE TRIBUNAL IN THE CASE OF SHRI VINIT RANAWAT (SUPRA), THEREFORE, FOLLOWING THE AFORESAID DECISION AND IN ABS ENCE OF ANY CONTRARY MATERIAL OR DISTINGUISHABLE FEATURE BROUGHT T O OUR NOTICE AGAINST THE SAID ORDER, WE ARE OF THE CONSIDERED OPINION THAT THE CIT(A) IS NOT JUSTIFIED IN SUSTAINING THE ADDITION OF RS.35 LAKHS IN THE HANDS OF THE ASSESSEE FOR A.Y. 2004-05. ACCORDINGLY, THE ORDER OF THE CIT(A) IS SET ASIDE AND THE GROUNDS RAISED BY THE A SSESSEE ARE ALLOWED. 46. IDENTICAL GROUNDS HAVE BEEN TAKEN IN ITA NO.1313/PN /2013 FOR A.Y. 2006-07 (AT RS.2 CRORES) AND IN ITA NO.1315/PN/20 13 FOR A.Y.2008-09 (AT RS.12 CRORES). FOLLOWING THE SAME REASONIN GS, THE GROUNDS FOR THE ABOVE ASSESSMENT YEARS ARE ALLOWED. 63 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 47. GROUNDS OF APPEAL NO.6 AND 7 BEING GENERAL IN NATURE ARE DISMISSED. 48. THERE IS ONE MORE GROUND FOR A.Y. 2006-07 AS PER GR OUNDS OF APPEAL NO.3 WHEREIN THE ASSESSEE HAS CHALLENGED THE ORD ER OF THE CIT(A) IN SUSTAINING DISALLOWANCE OF RS.1,79,633/- ON ACCOUNT O F INTEREST PAID ON BORROWINGS. 49. THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS THE ABOVE GROUND FOR WHICH THE LD. DEPARTMENTAL REPRESENTATIVE HAS NO OBJECTION. ACCORDINGLY, THIS GROUND BY THE ASSESSEE IS DISMISSED. ITA NO.1316/PN/2013 (A.Y.2009-10) (BY ASSESSEE) : 50. GROUND OF APPEAL NO.1 BY THE ASSESSEE READS AS UNDER : 1. THE LD.CIT(A) ERRED IN SUSTAINING THE VALIDITY OF THE ASSESSMENT ORDER PASSED U/S.153A EVEN THOUGH THE ORDER WAS SERVED O N THE APPELLANT BEYOND THE PERIOD OF LIMITATION. 51. AFTER HEARING BOTH THE SIDES, WE FIND THE ABOVE GROUN D IS IDENTICAL TO GROUND OF APPEAL NO.1 IN ITA NO.1311/PN/2013. W E HAVE ALREADY DECIDED THE ISSUE AND THE GROUND RAISED BY THE ASSESSEE HAS BEEN DISMISSED. FOLLOWING THE SAME REASONING THIS GROUND B Y THE ASSESSEE IS DISMISSED. 52. THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS GROU ND OF APPEAL NO.2 CHALLENGING THE ADDITION OF RS.1,18,326/- U/S.14A. THE LD. DEPARTMENTAL REPRESENTATIVE HAS NO OBJECTION. ACCOR DINGLY, THE GROUND OF APPEAL NO.2 IS DISMISSED AS NOT PRESSED. 53. GROUNDS OF APPEAL NO.3 AND 4 BEING GENERAL IN NATURE ARE DISMISSED. 64 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 ITA NO.1306/PN/2013 (A.Y.2009-10) (BY REVENUE): 54. GROUND OF APPEAL NO.1 BY THE ASSESSEE READS AS UNDER : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE CIT(A) HAS ERRED IN DELETING THE ADDITION MADE TO INCOME FROM HOUSE PROPERTY (NEAR MAHABALESHWAR) AT RS.1,80,000/- AS AGAINST RS.25,0 00/- DISCLOSED IN THE RETURN. 55. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSING O FFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS OBSERVED THAT TH E ASSESSEE HAS SHOWN INCOME OF RS.47,59,252/- AS INCOME FROM HOUSE PROPER TY. FROM THE VARIOUS DETAILS FURNISHED BY THE ASSESSEE HE NO TED THAT ASSESSEE HAS TAKEN ANNUAL VALUE OF HOUSE PROPERTY AT MAHABALESHWAR AT RS.25,000/- AND AFTER CLAIMING MUNICIPAL TAX ES AT RS.8,000/- AND 30% DEDUCTION OF REPAIRS AT RS.5,100/-, THE ASSESSEE HAS SHOWN THE TOTAL INCOME FROM MAHABALESHWAR PROPERTY AT RS.11,900/-. THE ASSESSING OFFICER, THEREFORE, ASKED THE AS SESSEE TO EXPLAIN AS TO WHY THE ESTIMATION OF ANNUAL VALUE OF THE HOU SE AT MABALESHWAR AT RS.1,80,000/- AS ADOPTED BY THE ASSESSIN G OFFICER WHILE FINALISING THE ASSESSMENT ORDER FOR A.Y. 2008-09 SHOULD NOT BE ADOPTED. THE ASSESSEE SUBMITTED THAT THE ESTIMATION AD OPTED BY THE ASSESSING OFFICER IS NOT CORRECT AND THE ANNUAL VALUE AS D ISCLOSED IN THE COMPUTATION OF INCOME IS BASED ON FACTS. HOWEVER, T HE ASSESSING OFFICER DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE IN ABSENCE OF ANY SUPPORTING EVIDENCE AND DETERMINED THE ANNUAL VALUE OF MAHABALESHWAR PROPERTY AT RS.1,80,000/-. AFTER ALLOWING DED UCTION OF 30% ON REPAIRS U/S.24 AND MUNICIPAL TAXES OF RS.8,0000/- THE ASSESSING OFFICER DETERMINED THE ANNUAL VALUE AT RS.1,20,400/-. 56. IN APPEAL THE LD.CIT(A) FOLLOWING HIS ORDER FOR A.Y. 2005-0 6 VIDE APPEAL NO. PN/CIT(A)-II/ADDL.CIT R-3/778/08-08 DATED 28-03- 65 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 2012 DELETED THE ADDITION MADE BY THE ASSESSING OFFICER AN D ALLOWED THE GROUND RAISED BY THE ASSESSEE. 57. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVENUE IS IN APPEAL BEFORE US. 58. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOT H THE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE P APER BOOK FILED ON BEHALF OF THE ASSESSEE. WE FIND THE ASSESSING OFFICER , BASED ON HIS FINDINGS IN THE ORIGINAL ASSESSMENT ORDER, TOOK ANNUA L VALUE OF THE HOUSE PROPERTY AT MAHABALESHWAR AT RS.1,80,000/-. AFTER CLAIMING THE STATUTORY REPAIRS U/S.24 AND MUNICIPAL TAXES O F RS.8,000/- HE DETERMINED THE ANNUAL VALUE OF THE MAHABALES HWAR HOUSE PROPERTY AT RS.1,20,400/-. WE FIND THE LD.CIT(A) FOLLOWIN G HIS ORDER FOR A.Y.2005-06 DELETED THE ADDITION MADE BY THE A SSESSING OFFICER AND THEREBY ALLOWED THE GROUND RAISED BY THE ASSE SSEE DETERMINING THE ANNUAL VALUE AT RS.25,000/-. SINCE THE LD. CIT(A) WHILE DECIDING THE ISSUE HAS FOLLOWED HIS ORDER FOR A.Y. 2005- 06 ON THE VERY SAME PROPERTY AND SINCE NOTHING CONTRARY WAS BROUGHT TO OUR NOTICE AGAINST THE ORDER OF THE CIT(A) FOR A.Y. 2005-0 6. THEREFORE, WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A) ON THIS ISSUE. ACCORDINGLY, THE SAME IS UPHELD AND THE GROUND RA ISED BY THE ASSESSEE IS DISMISSED. 59. GROUNDS OF APPEAL NO.2 TO 5 BY THE REVENUE READ AS UNDER : 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE CIT(A) HAS ERRED IN ALLOWING DEDUCTION U/S. 80IA(4) OF THE ACT IN RESPECT OF THE ASSESSEE PROJECT 'SAI TRINITY' IGNORING THE FACT THAT T HE ASSESSEE ADMITTED TO WITHDRAWN THE CLAIM DURING SEARCH ACTION. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE TH E CIT(A) HAS ERRED IN ALLOWING DEDUCTION U/S. 80IA(4) ALTHOUGH ASSE SSEE HAS NOT FULFILLED THE PRECONDITIONS FOR CLAIMING DEDUCTION U NDER INDUSTRIAL PARK SCHEME 2002. 66 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE TH E CIT(A) HAS ERRED IN ALLOWING DEDUCTION U/S. 80IA(4) ALTHOUGH TH E IPS 2002 SCHEME TALKS ABOUT INDUSTRIAL PARK AS A WHOLE NOT INDUSTRIAL U NITS. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE TH E CIT(A) HAS ERRED IN ALLOWING DEDUCTION U/S. 80IA(4) ALTHOUGH AP PLICATION FOR APPROVAL WAS FILED AFTER 31.3.2006, WHICH IS BEYOND T HE TIME LIMIT AND NO FRESH APPROVAL WAS TAKEN AFTER REJECTION OF ASSESSEE'S CLA IM AS THE PROJECT WAS NOT COMMENCED WITHIN STIPULATED TIME. 60. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSING OFFIC ER DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOUND THAT THE AS SESSEE HAD CLAIMED DEDUCTION U/S 80IA(4)(III) OF THE ACT TO THE TUNE OF RS. 3,70,52,575/- FOR ITS SAI TRINITY PROJECT SITUATED AT S.NO 146, HISSSA NO. 2/1A+2B/1 +2/1 B, PASHAN PUNE. DURING THE COURSE OF SURVEY ACTION U/S 133A AT THE OFFICE PREMISES OF M/S SAI CONSTRUCTIONS PVT. LTD AT 604,605, SAI CHAMBERS, WAKDEWADI PUNE ON 20-1-201 0, CERTAIN LOOSE PAPERS, DOCUMENTS WERE IMPOUNDED WHEREIN PAGE NO 102 OF BUNDLE NO. B WAS A COPY OF LETTER DATED 4-3-2009 FROM UNDER SECRETARY, MINISTRY OF COMMERCE AND INDUSTRY, GOVT. OF IND IA TO THE ASSESSEE WHICH STATED THAT ON THE BASIS OF STATE GOVT' S REPORT DATED 23-4-2008, THE BUILDING IN WHICH INDUSTRIAL PARK IS BEING DEVE LOPED BY THE ASSESSEE'S PROPRIETARY CONCERN M/S. S BALAN DID NOT PERTAIN TO INDIVIDUAL BUT BELONGED TO A PARTNERSHIP FIRM M/S S. BALAN & CO. FURTHER THE SAID LETTER MENTIONED THAT THE BUILDING IS DIVI DED INTO THREE DIFFERENT WINGS AND ONLY A PART OF THAT BUILDING (CENT RAL WING) IS BEING DEVELOPED AS INDUSTRIAL PARK AND THUS IT CANNOT BE SAID THAT THE INDUSTRIAL PARK IS BEING DEVELOPED AS A WHOLE AND ACC ORDINGLY IT INFORMED THAT THE CASE OF THE ASSESSEE WAS NOT ELIGIBLE UN DER THE INDUSTRIAL PARK SCHEME, 2002. DURING THE COURSE OF SURVEY ACTION IN THE STATEMENT RECORDED ON 20-1-2010, THE ASSESSEE ST ATED THAT HE WAS WITHDRAWING THE CLAIM OF DEDUCTION U/S 80LA SUBJECT TO THE 67 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 OUTCOME OF THE REVIEW APPLICATION FILED BEFORE THE MINISTRY O F COMMERCE. 61. THE ASSESSING OFFICER, HOWEVER, FOUND THAT DURING THE R ETURN FILED U/S 153A FOR A.Y. 2009-10 AND THAT OF A.Y. 2010-11 THE ASSESSEE HAD CLAIMED DEDUCTION U/S 80LA(4)(III). THE ASSESSING OFFICER SOUGHT THE EXPLANATION OF THE ASSESSEE AND FOUND THE EXPLANATION TO BE NOT ACCEPTABLE BECAUSE ON THE BASIS OF THE LETTER FROM THE U NDER SECRETARY, MINISTRY OF COMMERCE & INDUSTRY THE ASSESSEE WAS NOT ELIGIBLE FOR THE SAID CLAIM OF DEDUCTION. THE ASSESSING OFFICER A LSO FOUND AND HAS NOTED THAT THE PENDENCY OF THE REVIEW PE TITION OF THE ASSESSEE BEFORE THE CONCERNED AUTHORITY DID NOT MAKE T HE ASSESSEE ELIGIBLE FOR THE SAID CLAIM OF DEDUCTION RATHER SUPPORTED THE FINDING THAT THE ASSESSEE IS NOT ELIGIBLE. THE ASSESSING OFFICER ALSO NOTED THAT THE ASSESSEE HAD RETRACTED HIS STATEMENT DATED 20-01 -2010 BY FILING AN AFFIDAVIT DATED 25-11-2011 STATING THAT THE ADMISSION M ADE WAS NOT MADE BY HIM. HOWEVER, THE ASSESSING OFFICER HELD THAT T HOUGH THE ASSESSEE HAD RETRACTED THE STATEMENT, HOWEVER, TH E STATEMENT BORE HIS SIGNATURE AND THAT THE RETRACTION WAS NOT MAD E IMMEDIATELY AFTER THE SEARCH RATHER AFTER 22 MONTHS AND THE ASSES SEE COULD NOT PROVE ANY THREAT OR COERCION WHILE RECORDING THE STATEM ENT ON 20-1-2012. IN VIEW OF THE ABOVE FACT THE ASSESSING OFFICER DISALLOWED THE CLAIM OF DEDUCTION U/S.80IA(4) MADE BY THE APPELLANT. 62. BEFORE CIT(A) IT WAS SUBMITTED THAT THE DISALLOWANCE OF T HE CLAIM OF DEDUCTION U/S 80LA(4) WAS MADE ON THE BASIS OF A LETTER FROM SECRETARY, MINISTRY OF COMMERCE AND INDUSTRY WHICH WAS FOU ND DURING THE SURVEY PROCEEDINGS AND AS PER THE SAID LETTE R, THE ASSESSEE'S CLAIM FOR DEVELOPING THE 'INDUSTRIAL PARK' WAS DISQUALIFIED 68 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 AS THE COMPETENT AUTHORITY FELT THAT THE INDUSTRIAL PARK WAS NOT BEING DEVELOPED AS A WHOLE AND, THEREFORE, THE ASSESSEE'S ELIGIBILIT Y UNDER THE IPS 2002 WAS DENIED. THE ASSESSEE FURTHER SUBMITTED THAT H E HAD CHALLENGED THE DECISION OF THE EMPOWERED COMMITTEE OF MINIS TRY CONCERNED AND THE SAID COMMITTEE VIDE ITS ORDER DATED 1 1-06-2012 AFTER RECONSIDERING THE ISSUE GRANTED APPROVAL TO THE AS SESSEE'S PROJECT. THE ASSESSEE FILED THE LETTER DATED 12-5-2012 R ECEIVED FROM THE MINISTRY OF COMMERCE AND INDUSTRY, UNDER RULE 46A(1)(C ) WITH A PRAYER FOR ADMISSION OF THE SAME AS ADDITIONAL EVIDENCE STA TING THAT THE SAID LETTER COULD NOT BE PRODUCED BEFORE THE ASSESS ING OFFICER FOR THE OBVIOUS REASONS THAT THE DECISION WAS NOT RENDERED BY THAT TIME. THE SAID ADDITIONAL EVIDENCE FILED U/R 46A WAS FORWARDED BY THE CIT(A) TO THE ASSESSING OFFICER FOR OPPORTUNITY AND REBUTT AL WITH RESPECT TO THE CLAIM OF DEDUCTION U/S.80IA(4) FOR AY. 2009- 10 AND 2010-11. THE ASSESSING OFFICER FORWARDED HIS REMAND REPORT WHICH WAS CONTROVERTED TO THE ASSESSEE. 63. THE ASSESSEE IN ITS REPLY TO THE REMAND REPORT SU BMITTED THAT THE OBSERVATION OF THE ASSESSING OFFICER THAT THE ASSESSE E HAS NOT COMPLETED THE INDUSTRIAL PARK EVEN UPTO THE DATE OF SCR UTINY ASSESSMENT IS FACTUALLY NOT CORRECT AS THE ASSESSEE ST ARTED EARNING INCOME FROM THE INDUSTRIAL PARK FROM F.Y. 2006-07 RELEVANT T O AY. 2007-08 BUT DUE TO LOSSES INCURRED DID NOT HAVE POSITIVE GROSS TOTAL INCOME FOR AY. 2007-08 AND 2008-09 DUE TO WHICH THE SA ID CLAIM WAS NOT TAKEN AND THE ASSESSEE TOOK THE CLAIM FOR THE FIRST TIME IN A.Y. 2009-10 WHEN POSITIVE GROSS TOTAL INCOME WAS THERE. AS REGARDS THE OBJECTION OF THE ASSESSING OFFICER THAT THE INDUSTRIAL PARK IS' BEING DEVELOPED BY THE ASSESSEE'S PROPRIETARY CONCERN DOES NOT PERTAIN TO INDIVIDUAL BUT BELONGS TO THE PARTNERSHIP FIRM M/S. S 69 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 BALAN & CO. IS CONCERNED IT WAS ARGUED THAT THE SAME IS FACTUALLY NOT CORRECT. IT WAS STATED THAT THE SAI TRINITY BUILDING ORIGIN ALLY COMPLETED THE BARE SHELL', I.E. THE RCC FRAME, BRICK WORK AND ONE PLASTER WITHOUT ANY INTERNAL AMENITIES AND, THEREAFTER, THE WINGS B & C OF THE BUILDING WERE TAKEN OVER BY THE PARTNER S. BALAN FROM THE FIRM AND IN HIS INDIVIDUAL CAPACITY INCURRED THE ENTIRE COST OF COMPLETION OF THE BUILDING AND THE SAID INDUSTRIAL PARK IS SIT UATED IN THESE TWO WINGS ONLY WHICH BELONG TO S. BALAN, INDIVIDUAL AND NOT THE FIRM. AS REGARDS THE OBJECTION OF THE ASSESSING OFFICER THAT THE FRESH APPROVAL HAS TO BE TAKEN AS REQUIRED UNDER THE I PS 2002 IS CONCERNED IT WAS SUBMITTED THAT THE PARK HAD BECOME O PERATIONAL WITHIN THE EXTENDED PERIOD OF ONE YEAR AVAILABLE UPTO 21-9 -2006 AND THE ASSESSEE HAD ALREADY STARTED OFFERING INCOME FROM THE 'INDUSTRIAL PARK' SINCE F.Y. 2006-07 RELEVANT TO A.Y. 2007-08 ONWARDS . THE ASSESSEE ALSO CITED THE DECISION OF THE JURISDICTIONAL BOMBA Y HIGH COURT IN THE CASE OF SILVER LAND DEVELOPERS (P) LTD. AND OT HERS VS EMPOWERED COMMITTEE (2012) 343 ITR 439 (BOM). 64. BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE THE LD.CIT(A) ALLOWED THE CLAIM OF DEDUCTION BY OBSERVING AS UNDER : 6.2 THE SUBMISSION MADE BY THE APPELLANT AND MATERIAL ON RECORD HAS BEEN PERUSED SO ALSO THE REMAND REPORT AND THE REPLY O F THE APPELLANT HAS ALSO BEEN CONSIDERED. THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS HAS DISALLOWED THE CLAIM OF DEDUCTION U/S 80IA(4)(III) PRIMARILY ON THE BASIS OF THE LETTER DATED 4-3-2009 FROM THE UNDER SECRETARY, MINISTRY OF COMMERCE AND INDUSTRY AND THE A PPELLANT'S ADMISSION OF THE AFORESAID FACT DURING THE STATEMENT RE CORDED DURING THE SURVEY ACTION U/S. 133A. THE AFORESAID LETTER HAS REFERRED TO THE REGISTRATION NO 63/S1A/IP/2006 DATED 12-5-2006 AND N OTED THAT ON THE BASIS OF THE STATE GOVERNMENT'S REPORTED DATED 23-4-200 8 THE BUILDING IN WHICH INDUSTRIAL PARK WAS LOCATED BELONGED TO A PARTN ERSHIP FIRM S. BALAN & CO AND NOT TO AN INDIVIDUAL AND THAT THE 'I NDUSTRIAL PARK' WAS NOT DEVELOPED AS A WHOLE AS ONLY A PART OF THE BUILDING W AS BEING DEVELOPED AND HENCE NOT ELIGIBLE UNDER THE IPS 2002 SCHEME. IT IS SEEN FROM THE STATEMENT OF THE APPELLANT RECORDED DURING THE SURVEY ACTION THAT THE APPELLANT HAD ALSO STATED THAT THE REVIEW PETITION FI LED EARLIER WAS 70 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 PENDING WITH THE MINISTRY OF COMMERCE AND SUBJECT TO THAT THE APPELLANT HAD STATED THAT THE CLAIM WAS BEING WITHDRAWN. HOWEVE R, SUBSEQUENTLY THE APPELLANT HAD FILED AN AFFIDAVIT DENYING TO SAID CLAIM BEING WITHDRAWN AS THE MATTER WAS SUBJUDICE BEFORE THE EMPOW ERED COMMITTEE. IT IS ALSO SEEN THAT THE APPELLANT HAS FULFI LLED THE CONDITIONS SPECIFIED U/S 80IA(4)(III) AS PER THE PROVISION OF SEC 80IA(5), 80IA (7) AND 801A(10). THE CONDITIONS SPECIFIED BY SECTION 80IA (4)(III) ARE: (1) THE ASESSEE DEVELOPS, DEVELOPS AND OPERATES OR MAINT AINS AND OPERATES AN INDUSTRIAL PARK. (2) THE INDUSTRIAL PARK SHOULD BE NOTICED BY THE CENT RAL GOVERNMENT. (3) THE NOTIFICATION SHOULD BE IN ACCORDANCE WITH TH E SCHEME FRAMED AND NOTIFIED BY THE GOVERNMENT FOR THE SPECIFIED PER IOD. SEC 80IA(4)(III) THUS PROVIDES FOR A DEDUCTION OF THE PROFIT DERIVED BY THE ASSESSEE FROM DEVELOPED OR DEVELOPMENT AND OPERATION OF AN INDUSTRIAL PARK NOTIFIED BY THE CENTRAL GOVT. THE ELIGIBILITY PERIOD OF DEVELOPMENT OF SUCH AN INDUSTRIAL PARK WAS INITIALLY BETWEEN 1ST APRIL 1997 TO 31ST MARCH 2006. HOWEVER, THE FINANCE ACT 2006 HAS EXTEND ED THE PERIOD TO 31 ST MARCH 2011. THUS IT IS APPARENT THAT THE RESPONSIBILIT Y OF VERIFYING THE AUTHENTICITY OF THE APPELLANT'S CLAIM VESTS IN THE CONCERNED MINISTRY OF CENTRAL GOVT. AND THE ROLE OF THE ASSESSING OFFICER IN THAT REGARD IS LIMITED. THE IPS SCHEME AS NOTIFIED FROM TIME TO TIME BY THE CENTRAL GOVT. IS A CODE IN ITSELF AND IT LAYS DOWN THE CRITERIA OF ELIGIBILITY, PROCEDURE OF APPROVAL, CONDITION TO BE SATISFIED BY THE DEVELOPER ETC. AND ONCE THE DECISION OF THE CONCERNED MINISTRY IN ITS WISDOM GRANTS THE APPROVAL, IT IS INCUMBENT ON THE PART OF THE ASSESSING OFFICER TO GRA NT THE DEDUCTION. THE ASSESSING OFFICER MAY, HOWEVER, LOOK INTO THE OTHER TECHNICAL REQUIREMENTS OF THE PROVISIONS CONTAINED IN SECTION 80L A I.E. - (1) THE DEDUCTION TO BE COMPUTED AS IF THE ELIGIBLE BUSINESS I.E. THE INDUSTRIAL PARK IS THE ONLY SOURCE OF INCOME FOR THE A SSESSEE. (2) THE ASSESSEE MUST SUBMIT AUDIT REPORT. (3) INCOME FROM ELIGIBLE BUSINESS IF ARISING FROM CONNE CTED PARTIES, AO CAN REWORK THE DEDUCTION THE ELIGIBLE BUSINESS AS PER SECTION 80IA(5) I.E. THE I NDUSTRIAL PARK IS THE ONLY SOURCE OF INCOME FOR THE ASSESSEE: SECTION 80IA(7) I .E. THE ASSESSEE MUST SUBMIT AUDIT REPORT WHICH THE APPELLANT HAS SUBMIT TED, AND SEC 80IA(10) I.E. INCOME OF ELIGIBLE BUSINESS IF ARISING FR OM CONNECTED PARTIES ASSESSING OFFICER CAN REWORK THE DEDUCTION, AND THE ASSESSING OFFICER HAS NOT DISPUTED THESE ASPECTS AS IS EVIDENT FROM THE ASSESSMENT ORDER. IN THE LIGHT OF THE ABOVE FACT, THE LETTER O F APPROVAL DT. 11TH JUNE 2012 FILED BY THE APPELLANT U/R 46A ASSUMES IMPORTANCE WHEREBY THE EMPOWERED COMMITTEE HAS ACCEPTED THE REPRESENTATION M ADE BY THE APPELLANT AND APPROVED THE PROJECT AS AN INDUSTRIAL PARK WHICH PRIMA FACIE ENTITLES THE APPELLANT FOR THE DEDUCTION. 6.3 THE A.O. IN THE REMAND REPORT HAS STATED THAT THE REQUEST OF THE APPELLANT REGARDING ADMISSION OF THE ADDITIONAL EVIDE NCE MAY NOT BE ENTERTAINED. IT IS TRITE LAW THAT THE POWERS OF THE C IT (APPEALS) ARE 71 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 COTERMINOUS WITH THE POWERS OF 'A.O. IN THE CASE OF SM T. PRABHAVATI S. SHAH VS CIT (1998) 231 ITR 1 (MUM) IT WAS HELD THAT SU B-RULE (4) OF RULE 46A SPECIFICALLY RESTORE POWER OF APPELLATE AUTH ORITY TO CALL FOR PRODUCTION OF ANY DOCUMENT TO ENABLE HIM TO DISPOSE A PPEAL. SUB- SECTION (4) OF SECTION 250 EMPOWERS THE APPELLATE AUTH ORITY TO TAKE ADDITIONAL EVIDENCE. SCOPE OF POWER IS COTERMINOUS WI TH ITO. CONJOINT READING OF SECTION 250 AND RULE 46A SHOWS THAT RESTRICT ION ON THE APPELLANT DO NOT AFFECT THE' POWERS OF THE APPELLATE AUTHORITY FOR THE PURPOSE OF RULE 46A APPEARS TO BE T O ENSURE THAT EVIDENCE IS PRIMARILY LED BEFORE THE ASSESSING OFFICER. SECTION 250(4) BEING A QUASI-JUDICIAL POWERS, IT IS INCUMBENT ON CIT (APPEALS) TO EXERCISE THE SAME IF THE FACTS AND CIRCUMSTANCES JUSTIFY. IT APPEARS THAT DUE TO SOME GENUINE REASONS THE SUBMISSIONS COULD NOT BE P RODUCED DURING THE ASSESSMENT PROCEEDINGS, THEREFORE, THE EVIDEN CE PRODUCED BY THE APPELLANT IS BEING TAKEN INTO CONSIDERATION FOR D ECIDING THE ISSUE AND IS ACCORDINGLY ADMITTED FOR ADJUDICATION. THE APPELL ANT'S PRAYER FOR THE ADMISSION OF ADDITIONAL EVIDENCE U/R. 46A(1)(C) IS, TH EREFORE, ADMITTED FOR A.Y. 2009-10. 6.4 THE EMPOWERED COMMITTEE HAS RECONSIDERED THE EARL IER REJECTION AND GRANTED APPROVAL FOR THESE UNITS ON 11TH JUNE 201 2 WITH REFERENCE TO THE DATE OF APPLICATION 12.5.2006 AS IS EVIDENT FR OM THE SAID LETTER. THE APPELLANT HAS ALSO CLARIFIED THE ISSUE REGARDING THE DE VELOPMENT OF THE INDUSTRIAL PARK BY AN INDIVIDUAL AND NOT BY THE PART NERSHIP FIRM AS IS ALSO EVIDENT FROM THE APPROVAL GRANTED BY THE MINISTRY OF COMMERCE. IT IS SEEN FROM THE RECORD THAT THE APPELLANT APPLIED FOR APPROVAL OF THE 'INDUSTRIAL PARK' IN SAI TRINITY BUILDING UNDER 'NON AUTOMATIC' APPROVAL ROUTE ON 08.12.2005 AND RECEIVED APPROVAL ON 09.12.2005. THE APPELLANT HAS, THEREAFTER, APPLIED FOR REDUCTION IN NUMBER OF UNITS ON 26.04.2006. THE 'INDUSTRIAL PARK' WAS COMMISSIONED IN SEPTEMBER 200 6. THE MATERIAL ON RECORD INDICATES THAT ON THE BASIS OF AN E RRONEOUS. STATE GOVERNMENT REPORT ABOUT THE OWNERSHIP OF PROPERTY IN WHICH INDUSTRIAL PARK WAS SITUATED, THE MINISTRY OF COMMERCE & INDUSTRY REJECTED APPROVAL VIDE ITS LETTER DATED 04.03.2009 AND IT WAS THE SAME LETTER WHICH WAS FOUND DURING THE SURVEY ACTION AND ON THE B ASIS OF WHICH THE CLAIM OF DEDUCTION MADE BY THE APPELLANT WAS REJECTE D BY THE ASSESSING OFFICER. HOWEVER, THE APPELLANT PRIOR TO THE SEARCH AND SURVEY ACTION HAD APPLIED FOR A REVIEW OF THE REJECTION TO THE EMPOWE RED COMMITTEE ON 24.04.2009 AS IS EVIDENT FROM THE DOCUMENTS FILED BY T HE APPELLANT. THE EMPOWERED COMMITTEE AFTER RECONSIDERATION OF THE EAR LIER REJECTION HAS GRANTED APPROVAL FOR THREE UNITS ON 11TH JUNE 2002 T O SHRI S. BALAN, THE APPELLANT WHICH IS EFFECTIVE FROM 12.05.2006. THE AP PELLANT HAS ALSO FULFILLED THE OTHER CONDITIONS AS ENVISAGED U/S 80IA AND WHICH IS ALSO NOT DISPUTED BY THE ASSESSING OFFICER. THE OBJECTION OF THE ASSESSING OFFICER THAT THE INDUSTRIAL PARK IS BEING DEVELOPED BY THE PA RTNERSHIP FIRM IS ALSO NOT FACTUALLY CORRECT IN VIEW OF THE EXPLANATIO N FURNISHED BY THE APPELLANT AND ALSO THE LETTER ISSUED BY THE COMPETENT AUTHORITY. THUS TAKING THE ENTIRE FACT IN TOTALITY IT IS APPARENT TH AT THE ENTIRE RESPONSIBILITY OF THE ASSESSEE ABOUT SETTING UP, DEVELOPIN G AND OPERATING THE INDUSTRIAL PARK VESTS WITH THE MINISTRY OF COMMERC E & INDUSTRY OF THE CENTRAL GOVERNMENT AND THUS THE A.O. DOES NOT HAV E ANY ROLE IN IT. THE INDUSTRIAL PARK SCHEME IS A CODE IN ITSELF WHEREIN IT LAYS DOWN THE CRITERIA OF ELIGIBILITY, PROCEDURE OF APPROVAL, CON DITION TO BE SATISFIED AND ONCE THE CENTRAL GOVERNMENT IN ITS WISDOM GRANTS THE A PPROVAL IT IS INCUMBENT ON THE PART OF THE ASSESSING AUTHORITY TO GRA NT THE CLAIM OF DEDUCTION. IT IS ONLY THE TECHNICAL REQUIREMENT OF SE CTION 80IA(3), 80LA 72 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 (5), 80IA(7) AND 80IA(10), WHICH COULD BE EXAMINED AND VERIFIED BY THE ASSESSING OFFICER. IN THE CASE CITED BY THE APPELLANT OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF SILVER LAND DEVELOPERS & OT HERS VS EMPOWERED COMMITTEE (2012) 343 ITR 439 (BOM), THE E MPOWERED COMMITTEE HAD REFUSED APPROVAL TO THE ASSESSEE UNDER THE INDUSTRIAL PARK SCHEME AND THE COURT HELD THAT SECTION 80IA(4)( III) DOES NOT CONTAIN A SPECIFIC REQUIREMENT THAT THE INDUSTRIAL PA RK HAS TO BE DEVELOPED IN ACCORDANCE WITH THE SCHEME FRAMED BY TH E CENTRAL GOVERNMENT. IN THE CASE OF PRIMAL PROJECTS (P) LTD. V S DCIT (2011) 56 DTR 291 (BANG), THE BANGALORE ITAT HELD THAT ONCE T HE PROJECTS ARE APPROVED AND NOTIFICATIONS ARE MADE BY THE APPROPRIA TE AUTHORITIES, THE APPROVAL AND NOTIFICATION RUN BACK TO THE DATE OF C OMMENCEMENT OF THE ACTIVITIES. 65. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVENUE IS IN APPEAL BEFORE US. 66. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOT H THE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE P APER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED TH E VARIOUS DECISIONS CITED BEFORE US. WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A). WE FIND THE ASSESSING OFFICER DISALLOWED THE CLAIM OF DEDUCTION U/S.80IA(4)(III) ON THE BASIS OF THE LETTER DATED 04-03-2009 FROM THE UNDER SECRETARY IN THE MINISTRY OF COMMERCE AND INDUSTRY THAT THE ASSESSEE WAS NOT ELIGIBLE FOR DEDU CTION U/S.80IA(4). FURTHER IN THE STATEMENT RECORDED DURING TH E COURSE OF SURVEY ACTION U/S.133A THE ASSESSEE HAD WITHDRAWN SUCH CLAIM MADE U/S.80IA(4). ACCORDING TO THE ASSESSING OFFICER PENDEN CY OF THE REVIEW PETITION BEFORE THE CONCERNED AUTHORITY DID NO T MAKE THE ASSESSEE ELIGIBLE FOR THE SAID DEDUCTION. WE FIND IN APPEAL TH E LD.CIT(A) AFTER OBTAINING A REMAND REPORT FROM THE ASSESS ING OFFICER AND CONSIDERING THE COMMENTS OF THE ASSESSEE TO SUCH R EMAND REPORT ALLOWED THE CLAIM OF DEDUCTION U/S.80IA(4), THE REASON S OF WHICH ARE ALREADY REPRODUCED IN THE PRECEDING PARAGRAPHS. 73 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 67. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) O N THIS ISSUE. WE FIND IDENTICAL ISSUE HAD COME UP BEFORE THE TRIBUN AL IN THE CASE OF M/S. KOLTE PATIL DEVELOPERS LTD. VS. DCIT AND VICE VERSA VIDE ITA NOS. 1411 TO 1415/PN/2013 AND ITA NOS. 1478 T O 1483/PN/2013 FOR A.YRS. 2004-05 TO 2009-10. THE TRIBUNAL AFTER ELABORATELY CONSIDERING IDENTICAL ISSUE HAD DECIDED THE ISS UE IN FAVOUR OF THE ASSESSEE BY OBSERVING AS UNDER : 37. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS. FACTUALLY SPEAKING, THE INDUSTRIAL PARK GIGA SPACE DEVELOPED BY THE ASSESSEE IS NOTIFIED BY THE CENTRAL GOVERNMENT IN ACCORDANCE WI TH THE IPS, 2008. THERE IS ALSO NO DENYING THE FACT THAT THE INDUSTRIAL PARK GIGA SPACE APPROVED UNDER THE IPS, 2008 HAS BEEN FOUND TO BE EL IGIBLE FOR DEDUCTION U/S 80-IA(4)(III) OF THE ACT IN THE SUBSEQUENT ASSESSMENT YEARS. IN THE SUBSEQUENT ASSESSMENT YEARS, THE PROFITS DERIVED FROM THE D EVELOPMENT OF INDUSTRIAL PARK GIGA SPACE HAVE BEEN CONSIDERED FOR DEDUCTION U/S 80-IA(4)(III) OF THE ACT BY THE ASSESSING OFFICER. I N THE INSTANT ASSESSMENT YEAR 2007-08, WHICH IS THE FIRST YEAR OF CLAIM BY THE ASSESSEE, THE ASSESSING OFFICER AS WELL AS THE CIT(A) HAVE REJECTE D THE CLAIM. THE GROUNDS ON WHICH THE SAID CLAIM HAS BEEN DENIED, HAVE ALREADY BEEN ENUMERATED BY US IN THE EARLIER PART OF THIS ORDER. 38. BEFORE WE PROCEED TO ADDRESS THE CONTROVERSY SURRO UNDING THE OBJECTIONS RAISED BY THE REVENUE, IT WOULD BE APPROPR IATE TO BRIEFLY TOUCH-UPON THE RELEVANT PROVISIONS OF THE ACT AND THE CLAUSES OF THE IPS, 2008 IN QUESTION. SECTION 80-IA OF THE ACT PRESCRIBE S FOR DEDUCTION IN RESPECT OF PROFITS AND GAINS FROM INDUSTRIAL UNDERTAKIN GS OR ENTERPRISES ENGAGED IN INFRASTRUCTURE DEVELOPMENT, ETC.. SUB-SEC TION (1) OF SECTION 80-IA PRESCRIBES THAT WHERE THE GROSS TOTAL INCOME OF A SSESSEE INCLUDES ANY PROFITS AND GAINS DERIVED BY AN UNDERTAKING OR AN ENTERPRISE FROM ANY BUSINESS REFERRED TO IN SUB-SECTION (4), THERE SHALL BEEN ALLOWED IN COMPUTING THE TOTAL INCOME OF THE ASSESSEE A DEDUCTION OF AN AMOUNT EQUAL TO HUNDRED PER CENT OF THE PROFITS AND GAINS DE RIVED FROM SUCH BUSINESS FOR TEN CONSECUTIVE ASSESSMENT YEARS IN ACCORDANCE WITH AND SUBJECT TO THE PROVISIONS OF THE SECTION. SUB-SECTION ( 2) OF SECTION 80-IA PRESCRIBES THAT THE DEDUCTION SPECIFIED IN SUB-SECTION ( 1) MAY, AT THE OPTION OF THE ASSESSEE, BE CLAIMED FOR ANY TEN CONSECUTI VE ASSESSMENT YEARS OUT OF FIFTEEN YEARS BEGINNING FROM THE YEAR IN WHICH THE UNDERTAKING OR THE ENTERPRISE DEVELOPS AND BEGINS TO O PERATE ANY INFRASTRUCTURE FACILITY OR STARTS PROVIDING TELECOMMUN ICATION SERVICES OR DEVELOPS AN INDUSTRIAL PARK OR DEVELOPS A SPECIAL ECON OMIC ZONE OR GENERATES POWER OR COMMENCES TRANSMISSION OR DISTRIBUTION OF POWER OR UNDERTAKES SUBSTANTIAL RENOVATION AND MODERNIZATION OF THE EXISTING TRANSMISSION OR DISTRIBUTION LINES. SHORN OF OTHER DET AILS, WE MAY NOW COME TO SUB-SECTION (4) OF SECTION 80-IA, WHICH ENUMER ATES THE VARIOUS BUSINESSES TO WHICH THE PROVISIONS OF SECTION 80-IA OF THE ACT ARE APPLICABLE, SUCH BUSINESS BEING REFERRED TO AS THE ELI GIBLE BUSINESS. FOR THE PURPOSE OF THE PRESENT CONTROVERSY, WE ARE CONCER NED WITH THE SUB- 74 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 CLAUSE (III) OF SUB-SECTION (4) TO SECTION 80-IA OF THE ACT, WHOSE RELEVANT PORTION READS AS UNDER :- (III) ANY UNDERTAKING WHICH DEVELOPS, DEVELOPS AND OPERATES OR MAINTAINS AND OPERATES AN INDUSTRIAL PARK [OR SPECI AL ECONOMIC ZONE] NOTIFIED BY THE CENTRAL GOVERNMENT IN ACCORDANCE WI TH THE SCHEME FRAMED AND NOTIFIED BY THAT GOVERNMENT FOR THE PERIOD BEGI NNING ON THE 1 ST DAY OF APRIL, 1997 AND ENDING ON THE 31ST DAY OF MARCH, [2 006] : [ PROVIDED THAT . .. [ PROVIDED FURTHER THAT IN THE CASE OF ANY UNDERTAKING WHICH DEVELOPS, DEVELOPS AND OPERATES OR MAINTAINS AND OPERATES AN INDUSTRIAL PARK, THE PROVISIONS OF THIS CLAUSE SHALL HAVE EFFECT AS IF F OR THE FIGURES, LETTERS AND WORDS 31ST DAY OF MARCH, 2006, THE FIGURES, LETTE RS AND WORDS 31ST DAY OF MARCH, 2011' HAD BEEN SUBSTITUTED;] 39. IN TERMS OF THE AFORESAID, ANY UNDERTAKING WHICH IS ENGAGED IN (I) DEVELOPING; (II) DEVELOPING AND OPERATING; OR (III) MAINTAINING AND OPERATING AN INDUSTRIAL PARK NOTIFIED BY THE CENTRAL GOVERNMENT IN ACCORDANCE WITH THE SCHEME FRAMED BY THE CENTRAL GOV ERNMENT FOR THE PERIOD BEGINNING ON 1 ST DAY OF APRIL, 1997 AND ENDING ON 31 ST MARCH, 2006 SHALL BE ELIGIBLE FOR THE BENEFIT OF SECTION 80- IA OF THE ACT. IT MAY BE NOTED THAT BY THE FINANCE (NO.2) ACT, 2006, THE APPLICABILITY OF SUB- CLAUSE (III) WAS EXTENDED FROM 31.03.2006 TO 31.03.20 09. IN OTHER WORDS, ANY UNDERTAKING WHICH WAS ENGAGED IN (I) DEVEL OPING; (II) DEVELOPING AND OPERATING; OR (III) MAINTAINING AND OPERATING AN INDUSTRIAL PARK SHALL BE ELIGIBLE FOR DEDUCTION FOR T HE PERIOD BEGINNING ON 1 ST DAY OF APRIL, 1997 AND ENDING ON 31 ST MARCH, 2009. 40. NOTABLY, FOR THE PERIOD UNDER CONSIDERATION BEFO RE US, THE CENTRAL GOVERNMENT FORMULATED A SCHEME IN EXERCISE OF THE PO WERS UNDER CLAUSE (III) OF SUB-SECTION (4) OF SECTION 80-IA OF THE ACT A ND IT WAS CALLED INDUSTRIAL PARK SCHEME, 2008. THE SAID SCHEME DEFI NES INDUSTRIAL PARK IN CLAUSE 2(H) AS UNDER :- 2(H) INDUSTRIAL PARK MEANS A PROJECT IN WHICH PL OTS OF DEVELOPED SPACE OR BUILT UP SPACE OR A COMBINATION, WITH COMMON FAC ILITIES AND QUALITY INFRASTRUCTURE FACILITIES, IS DEVELOPED AND MADE AV AILABLE TO THE UNITS FOR THE PURPOSES OF INDUSTRIAL ACTIVITIES OR COMMERCIAL ACTIVITIES IN ACCORDANCE WITH THIS SCHEME. 41. SIMILARLY, CLAUSE 2(I) OF THE SCHEME DEFINES INF RASTRUCTURE FACILITY AS UNDER :- 2(I) INFRASTRUCTURE FACILITY MEANS FACILITIES RE QUIRED FOR DEVELOPMENT OPERATION AND MAINTENANCE OF THE INDUSTRIAL PARK AN D INCLUDE ROADS (INCLUDING APPROACH ROADS), WATER SUPPLY, SEWERAGE AND EFFLUENT TREATMENT FACILITIES, SOLID WASTE MANAGEMENT FACILI TIES, TELECOM NETWORK, GENERATION AND DISTRIBUTION OF POWER, AIR CONDITION ING. 42. CLAUSE 2(F) OF THE SCHEME DEFINES THE TERM DATE OF COMMENCEMENT AS UNDER :- 75 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 2(F) DATE OF COMMENCEMENT MEANS THE DATE OF OBTA INING THE COMPLETION CERTIFICATE OR OCCUPATION CERTIFICATE, A S THE CASE MAY BE, FROM THE RELEVANT LOCAL AUTHORITY, CERTIFYING THEREBY TH AT ALL THE REQUIRED DEVELOPMENT ACTIVITIES FOR THE PROJECT HAVE BEEN CO MPLETED. 43. CLAUSE 3 OF THE SCHEME PROVIDES FOR THE PROCEDURE FOR APPROVAL, WHICH READS AS UNDER :- (1) ANY UNDERTAKING WHICH DEVELOPS, DEVELOPS AND O PERATES OR MAINTAINS AND OPERATES AN INDUSTRIAL PARK MAY MAKE AN APPLICATION FOR NOTIFICATION UNDER CLAUSE (III) OF SUB-SECTION (4) OF SECTION 80-IA OF THE ACT, IN THE PRESCRIBED FORM, IPS-I, TO THE SECRETARY (IT A-I SECTION), CENTRAL BOARD OF DIRECT TAXES, DEPARTMENT OF REVENUE, MINIS TRY OF FINANCE, NORTH BLOCK, NEW DELHI. (2) THE CENTRAL BOARD OF DIRECT TAXES SHALL PROCESS THE APPLICATION FOR APPROVAL AND NOTIFICATION BY THE CENTRAL GOVERNMENT AND FOR THIS PURPOSE IT MAY CALL FOR REPORTS FROM OTHER DEPARTMENTS OR A GENCIES, AS IT MAY DEEM FIT. 44. CLAUSE 4 OF THE SCHEME PROVIDES THE CRITERIA FOR APPROVAL, WHICH READS AS UNDER :- 4. AN UNDERTAKING SHALL BE CONSIDERED FOR NOTIFICA TION UNDER CLAUSE (III) OF SUB-SECTION (4) OF SECTION 80-IA OF THE AC T, IF IT FULFILS ALL OF THE FOLLOWING CONDITIONS, NAMELY :- (1) THE DATE OF COMMENCEMENT OF THE INDUSTRIAL PARK SHOULD BE ON OR AFTER THE 1 ST DAY OF APRIL, 2006 AND NOT LATER THAN 31 ST OF MARCH, [2011]; (2) THE ARE ALLOCATED OR TO BE ALLOCATED TO INDUSTR IAL UNITS SHALL NOT BE LESS THAN SEVENTY-FIVE PER CENT OF THE ALLOCABLE AREA; (2A) THE AREA ALLOCATED OR TO BE ALLOCATED FOR COMM ERCIAL ACTIVITY SHALL NOT BE MORE THAN TEN PER CENT OF THE ALLOCABLE AREA; (3) THERE SHALL BE A MINIMUM OF THIRTY INDUSTRIAL U NITS LOCATED IN AN INDUSTRIAL PARK; (4) FOR THE PURPOSE OF COMPUTING THE MINIMUM NUMBER OF INDUSTRIAL UNITS; ALL UNITS OF A PERSON AND HIS ASSOCIATED ENTERPRISES WILL BE TREATED AS A SINGLE UNIT; (5) THE MINIMUM CONSTRUCTED FLOOR AREA SHALL NOT BE LESS THAN 15,000 SQUARE METERS; (6) NO INDUSTRIAL UNIT, ALONG WITH THE UNITS OF AN ASSOCIATED ENTERPRISE, SHALL OCCUPY MORE THAN TWENTY-FIVE PER CENT OF THE ALLOCABLE AREA; (7) THE INDUSTRIAL PARK SHOULD BE OWNED BY ONLY ONE UNDERTAKING; AND, (8) INDUSTRIAL UNITS SHALL ONLY UNDERTAKE ACTIVITIE S DEFINED IN CLAUSE (J) OF PARA (2). 76 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 45. CLAUSES 5 AND 6 OF THE SCHEME PERTAIN TO GENERAL CONDITIONS AND WITHDRAWAL OF APPROVAL WHICH READ AS UNDER :- GENERAL CONDITIONS. 5. (1) THE INDUSTRIAL PARK SHALL BE CONSTRUCTED AS DEVELOPED ON THE DATE OF COMMENCEMENT. (2) TAX BENEFITS UNDER THE ACT WILL BE AVAILABLE TO THE UNDERTAKING ONLY AFTER MINIMUM NUMBER OF THIRTY UNITS ARE LOCATED IN THE INDUSTRIAL PARK. (3) THE TAX BENEFITS UNDER THE ACT WILL BE AVAILABL E TO THE UNDERTAKING ONLY IF THE UNDERTAKING AND THE INDUSTRIAL PARK HAV E BEEN NOTIFIED BY CENTRAL BOARD OF DIRECT TAXES UNDER SECTION 80-IA O F THE ACT. (4) THE TAX BENEFITS UNDER THE ACT WILL BE AVAILABL E ONLY TO THE UNDERTAKING NOTIFIED BY THE CENTRAL GOVERNMENT AND NOT TO ANY OTHER PERSON WHO MAY SUBSEQUENTLY DEVELOP, DEVELOPS AND O PERATES OR MAINTAINS AND OPERATES THE NOTIFIED INDUSTRIAL PARK, FOR ANY PERSON. (5) THE UNDERTAKING MUST KEEP SEPARATE BOOKS OF ACC OUNT FOR THE INDUSTRIAL PARK AND MUST FILE ITS INCOME-TAX RETURN S BY THE DUE DATE TO THE INCOME-TAX DEPARTMENT. (6) AN INDUSTRIAL PARK APPROVED UNDER INDUSTRIAL PA RK SCHEME, 2002 WILL CONTINUE TO BE GOVERNED BY THE PROVISIONS OF T HAT SCHEME TO THE EXTENT IT IS NOT IN CONTRAVENTION WITH THE PROVISIONS OF A CT, AS AMENDED FROM TIME TO TIME. (7) THE UNDERTAKING SHALL ELECTRONICALLY FURNISH AN ANNUAL REPORT TO THE CENTRAL BOARD OF DIRECT TAXES IN FORM IPS-II. WITHDRAWAL APPROVAL. 6. THE CENTRAL GOVERNMENT MAY WITHDRAW THE APPROVA L GIVEN TO AN UNDERTAKING UNDER THIS SCHEME IF THE UNDERTAKING FA ILS TO COMPLY WITH ANY OF THE CONDITIONS LISTED IN PARAGRAPHS 4 AND 5 OF T HIS SCHEME : PROVIDED THAT BEFORE WITHDRAWAL OF APPROVAL, THE UNDERTAKIN G SHALL BE GIVEN AN OPPORTUNITY OF BEING HEARD BY THE CENTRAL GOVERNMENT. 46. HAVING TAKEN NOTE OF THE PROVISIONS OF THE SCHEME, WE MAY ALSO REFER TO RULE 18C OF THE INCOME TAX RULES, 1962 (IN SHORT THE RULES) WHICH DEALS WITH THE ELIGIBILITY OF AN INDUSTRIAL PAR K FOR BENEFITS OF SECTION 80-IA(4)(III) OF THE ACT. RULE 18C OF THE R ULES, AS APPLICABLE FOR THE ASSESSMENT YEAR UNDER CONSIDERATION READS AS UNDER :- ELIGIBILITY OF INDUSTRIAL PARKS FOR BENEFITS UNDER SE CTION 80-IA(4)(III). 18C. (1) THE UNDERTAKING SHALL BEGIN TO DEVELOP, DE VELOP AND OPERATE OR MAINTAIN AND OPERATE AN INDUSTRIAL PARK ANY TIME DURING THE PERIOD BEGINNING ON THE 1 ST DAY OF APRIL, 2006, AND ENDING ON THE 31 ST DAY OF MARCH, [2011]. (2) THE UNDERTAKING AND THE INDUSTRIAL PARK SHALL B E NOTIFIED BY THE CENTRAL GOVERNMENT UNDER THE INDUSTRIAL PARK SCHEME , 2008. (3) THE UNDERTAKING SHALL CONTINUE TO FULFILL THE C ONDITIONS ENVISAGED IN THE INDUSTRIAL PARK SCHEME, 2008. 77 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 47. FROM A PERUSAL OF THE AFORESAID RELEVANT PROVISION S OF THE ACT, RULES AND SCHEME, IT IS NOTICED AS FOLLOWS. THAN AN UN DERTAKING WHICH IS ENGAGED IN (I) DEVELOPING; (II) DEVELOPING AND OPER ATING; OR (III) MAINTAINING AND OPERATING AN INDUSTRIAL PARK NOTIFIE D BY THE CENTRAL GOVERNMENT IN ACCORDANCE WITH THE SCHEME SHALL BE ELI GIBLE FOR THE BENEFITS OF SECTION 80-IA(4)(III) OF THE ACT. THE AF ORESAID THREE CATEGORIES ARE DISTINCT AND SO FAR AS THE ASSESSEE IS CONCER NED, IT HAS CLAIMED APPROVAL UNDER THE SCHEME ON THE STRENGTH OF IT BEING ENGAGED IN DEVELOPING OF AN INDUSTRIAL PARK. THEREFORE, IT IS IN THE AFORESAID CONTEXT THAT ONE HAS TO DETERMINE THE REQUIREMENTS WH ICH THE ASSESSEE IS CALLED UPON TO FULFILL IN ORDER TO CLAIM DEDUCTIO N U/S 80-IA(4)(III) OF THE ACT. 48. UNDER THE SCHEME, ASSESSEE WAS ELIGIBLE TO BE CONSID ERED FOR NOTIFICATION UNDER CLAUSE (III) OF SUB-SECTION (4) OF SECTION 80-IA OF THE ACT, IF IT FULFILLED THE CRITERIA LAID DOWN IN CLAU SE 4 OF THE SCHEME, WHICH WE HAVE REPRODUCED ABOVE. THE FOREMOST REQUIREMENT WAS THAT THE DATE OF COMMENCEMENT OF THE INDUSTRIAL PARK SHOULD BE ON O R AFTER THE 1 ST DAY OF APRIL, 2006 AND NOT LATER THAN 31 ST MARCH, 2009. CLAUSE 4 OF THE SCHEME HAS SEVEN OTHER CRITERION FOR APPROVAL WHICH W E ARE NOT DEALING INDIVIDUALLY, AS UNDISPUTEDLY THE INDUSTRIAL PARK OF T HE ASSESSEE FULFILLS ALL THE CRITERIA PRESCRIBED IN CLAUSE 4 OF THE SCHEME FOR OBTAINING THE NOTIFICATION UNDER CLAUSE (III) OF SUB-SECTION (4) OF SECTION 80-IA OF THE ACT. WE SAY SO FOR THE REASON THAT THE REVENUE DOES NO T DISPUTE THAT THE UNDERTAKING OF THE ASSESSEE HAS BEEN APPROVED UNDER THE SCHEME AND FOR THE SUBSEQUENT ASSESSMENT YEARS THE CLAIM OF DEDUCTION U/S 80-IA OF THE ACT STANDS ALLOWED BY THE ASSESSING OFFICER. SECONDL Y, THE GENERAL CONDITIONS PRESCRIBED IN CLAUSE 5 OF THE SCHEME HAVE B EEN FULFILLED BY THE ASSESSEE AND IN-FACT THERE IS NO CASE MADE OUT BY THE REVENUE THAT THE CENTRAL GOVERNMENT HAS INVOKED CLAUSE 6 OF THE SC HEME, WHICH PERMITS THE CENTRAL GOVERNMENT TO WITHDRAW THE APPRO VAL GIVEN TO THE UNDERTAKING UNDER THE SCHEME IF IT FAILS TO COMPLY W ITH ANY OF THE CONDITIONS LISTED IN CLAUSES 4 AND 5 OF THE SCHEME. BE THAT AS IT MAY, IT WOULD BE APPROPRIATE TO INFER THAT SO FAR AS THE COMP LIANCE OF ASSESSEES UNDERTAKING TO THE REQUIREMENTS OF THE SCHEME ARE CO NCERNED, THERE IS NO DISPUTE. 49. NOW, THE CLAIM OF THE ASSESSEE IS THAT IT STARTED TH E PROCESS OF DEVELOPMENT OF THE INDUSTRIAL PARK SOMEWHERE IN OCTOB ER, 2004 AND THE CONSTRUCTION WAS SPREAD OVER A NUMBER OF YEARS. AS AND WHEN THE INDIVIDUAL UNITS WERE BEING COMPLETED, ASSESSEE SOLD IT TO THE CLIENTS. THE ASSESSEE WAS OFFERING AND RECOGNIZING INCOME ON SUCH SALES IN THE RESPECTIVE YEARS, AND THE INCOME UNDER CONSIDERATION T HIS YEAR IS FROM THE SALE OF UNITS. DURING THE YEAR UNDER CONSIDERATI ON, ASSESSING OFFICER HAS NOTED THAT ONLY 21 UNITS WERE LOCATED IN THE INDU STRIAL PARK. IN OTHER WORDS, ONLY 21 UNITS WERE OPERATIONAL AND NOT THE COM PLETE 30 UNITS, I.E. THE TOTAL NUMBER OF UNITS WHICH WERE TO BE DEVELOPED IN THE INDUSTRIAL PARK. THE ASSESSING OFFICER HAS REFERRED TO CLAUSE 2(F) OF THE SCHEME TO SAY THAT THE DATE OF COMMENCEMENT OF INDUSTRIAL PAR K IS THE DATE ON WHICH THE COMPLETION CERTIFICATE WAS OBTAINED FROM T HE LOCAL AUTHORITY CERTIFYING THEREBY THAT ALL THE REQUIRED DEVELOPMEN T ACTIVITIES OF THE PROJECT HAS BEEN COMPLETED. AS PER THE ASSESSING OFFICER , IN THIS CASE, THE CERTIFICATE FROM THE LOCAL AUTHORITY HAS BEEN OB TAINED ON 09.05.2007 AND THEREFORE IN TERMS OF THE SCHEME, THE DATE OF CO MMENCEMENT OF THE INDUSTRIAL PARK IS TO BE UNDERSTOOD AS 09.05.2007 WHIC H FALLS BEYOND THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSI DERATION. ON 78 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 THIS BASIS, IT IS SAID THAT THE INDUSTRIAL PARK OF THE ASSE SSEE WAS NOT COMPLETE AS ON 31.03.2007, AND THUS DEDUCTION U/S 80- IA OF THE ACT COULD NOT BE ALLOWED FOR ASSESSMENT YEAR 2007-08. 50. IT IS TO BE APPRECIATED THAT CLAUSE 2(F) OF THE S CHEME DEFINING THE EXPRESSION DATE OF COMMENCEMENT IS RELEVANT IN THE C ONTEXT OF CONDITION (1) OF CLAUSE 4 OF THE SCHEME WHICH PRESCRI BES THE CRITERIA FOR APPROVAL OF AN INDUSTRIAL PARK. CONDITION (1) OF CL AUSE 4 OF THE SCHEME PRESCRIBES THAT AN UNDERTAKING SHALL BE CONSIDERED FOR NOTIFICATION UNDER CLAUSE (III) OF SUB-SECTION (4) OF SECTION 80-IA OF THE ACT IF THE DATE OF COMMENCEMENT OF THE INDUSTRIAL PARK IS ON OR AFTER 0 1.04.2006 AND NOT LATER THAN 31.03.2009. IN THIS CASE, DATE OF COMMENC EMENT OF 09.05.2007 DETERMINED IN ACCORDANCE WITH CLAUSE 2(F) OF THE SCHEME FULFILLS THE CONDITION (1) OF CLAUSE 4 OF THE SCHEME. PERTINENTLY, THE MEANING OF THE EXPRESSION DATE OF COMMENCEMENT CON TAINED IN CLAUSE 2(F) OF THE SCHEME IS TO BE UNDERSTOOD IN THE CONTEXT OF THE SCHEME. THE QUESTION IS AS TO WHETHER THE DATE OF COMMENCEMENT I N CLAUSE 2(F) OF THE SCHEME CAN BE USED TO DENY A CLAIM OF DEDUCTION U/S 80-IA(4) OF THE ACT, ESPECIALLY IN THE FACE OF AN UNDISPUTED FACT-SITU ATION THAT THE UNDERTAKING OF THE ASSESSEE CONTAINS TO BE APPROVED/NOTI FIED UNDER THE SCHEME. IF A CONDITION PRESCRIBED IN THE SCHEME IS F OUND TO FULFILLED FOR THE PURPOSES OF NOTIFICATION OF THE SCHEME U/S 80-IA(4 )(III) OF THE ACT, CAN IT BE SIMULTANEOUSLY SAID THAT THE SAME CONDITION I S NOT FULFILLED IN THE CONTEXT OF APPLICATION OF SECTION 80-IA(4)(III) OF THE ACT R.W. RULE 18C OF THE RULES; AND, THE ANSWER, IN OUR VIEW, IS OBVIOUSL Y NO. 51. AT THIS POINT, WE MAY ALSO REFER TO RULE 18C OF T HE RULES WHICH PRESCRIBES THE ELIGIBILITY OF AN INDUSTRIAL PARK FOR B ENEFITS OF SECTION 80- IA(4)(III) OF THE ACT. THE PROVISIONS OF THE RULE AS APPLICABLE FOR THE YEAR UNDER CONSIDERATION HAVE BEEN REPRODUCED BY US IN THE EARLIER PARAGRAPHS. SUB-RULE (1) OF RULE 18C OF THE RULES SAY S THAT THE UNDERTAKING OUGHT TO BEGIN TO DEVELOP, DEVELOP AND OPERATE OR MAINTAIN AND OPERATE AN INDUSTRIAL PARK AT ANY TIME DURING TH E PERIOD BEGINNING ON 01.04.2006 AND ENDING ON 31.03.2009. SUB-RULE ( 2) OF RULE 18C OF THE RULES SAYS THAT THE UNDERTAKING OF AN INDUSTRIAL PARK SH ALL BE NOTIFIED BY THE CENTRAL GOVERNMENT UNDER THE IPS, 2008. SUB-RU LE (3) OF RULE 18C OF THE RULES SAYS THAT THE UNDERTAKING SHALL CONTINUE TO F ULFILL THE CONDITIONS ENVISAGED THE IPS, 2008. NOTABLY, THERE IS NO DISPUTE THAT THE UNDERTAKING OF THE ASSESSEE I.E. INDUSTRIAL PARK GIGA SPACE IS DULY NOTIFIED BY THE CENTRAL GOVERNMENT UNDER THE IPS, 2 008 AND IT CONTINUES TO FULFILL THE CONDITIONS ENVISAGED IN THE IPS, 2008 INASMUCH AS THERE IS NO WITHDRAWAL OF APPROVAL BY THE CENTRAL GOVERNMENT , AS PROVIDED FOR IN CLAUSE 6 OF THE SCHEME. THEREFORE, TO SAY ON THE STRE NGTH OF CLAUSE 2(F) OF THE SCHEME THAT THE ASSESSEE HAS NOT COMPLIED WITH THE REQUIREMENTS OF THE SCHEME FOR STAKING CLAIM U/S 80-IA(4)(III) OF THE ACT IN THE FACE OF THE FACT THAT THE UNDERTAKING I.E. THE AN INDUSTRIAL PAR K CONTINUES TO BE NOTIFIED BY THE CENTRAL GOVERNMENT, IS UNJUSTIFIED AN D UNCALLED FOR. 52. THE REVENUE HAS EMPHASIZED THAT THE DEVELOPMENT E NVISAGED IN THE APPROVAL OUGHT TO HAVE BEEN COMPLETED BY THE ASSE SSEE BEFORE 31.03.2007 ITSELF I.E. WITHIN THE PREVIOUS YEAR RELEV ANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION, BEFORE IT COULD CLAIM THE BENEFITS OF SECTION 80-IA(4)(III) OF THE ACT. THERE IS NO DISPUTE THAT T HE UNDERTAKING OF THE ASSESSEE IS NOTIFIED BY THE CENTRAL GOVERNMENT IN ACCORD ANCE WITH THE IPS, 2008 FOR THE PURPOSES OF CLAUSE (III) OF SECTION 80-IA(4) OF THE ACT. MOREOVER, THE ELIGIBILITY CONDITIONS PRESCRIBED IN RU LE 18C OF THE RULES, 79 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 WHICH WE HAVE REPRODUCED IN THE EARLIER PARAS AND WH ICH IS RELEVANT FOR THE YEAR UNDER CONSIDERATION, BELIES THE STAND OF THE REVENUE. THE OPENING SENTENCE IN SUB-RULE (1) OF RULE 18C OF THE R ULES SAYS THAT THE UNDERTAKING SHALL BEGIN TO DEVELOP; DEVELOP AND OP ERATE; AND, MAINTAIN AND OPERATE . THE AFORESAID WORDINGS SHOW THAT THE INDUSTRIAL PARK IN QUESTION IS ELIGIBLE FOR THE BENEFIT OF SECTI ON 80-IA(4)(III) OF THE ACT IN THE INSTANT YEAR ALSO. QUITE CLEARLY, AN UNDE RTAKING WHICH BEGINS TO DEVELOP IS ALSO ELIGIBLE FOR THE BENEFIT OF SECTIO N 80-IA(4)(III) OF THE ACT. IN THIS CASE, IN THE INSTANT ASSESSMENT YEAR, ASSESSEE HAS DEVELOPED AND SOLD 21 UNITS OUT OF THE TOTAL 30 UNITS ENVISAGED IN THE APPROVAL AND IT HAS OBTAINED THE COMPLETION CERTIFICATE ON 09.05. 2007 AFTER COMPLETING THE BALANCE UNITS. THE UNITS SOLD BY THE ASSESSEE HAVE YI ELDED PROFITS DURING THE YEAR UNDER CONSIDERATION WHICH THE ASSESSEE H AS DECLARED IN ITS PROFIT & LOSS ACCOUNT. THUS, GOING BY THE ELIGIBIL ITY CONDITIONS CONTAINED IN RULE 18C OF THE RULES, THE UNDERTAKING OF THE ASSESSEE WHICH STANDS NOTIFIED FOR THE PURPOSES OF SECTION 80-IA(4)(III ) OF THE ACT, IS ENTITLED TO THE BENEFITS OF SECTION 80-IA(4)(III) OF THE ACT QUA THE PROFITS FROM SUCH DEVELOPMENT WHICH HAVE BEEN DECLARED BY TH E ASSESSEE IN ITS BOOKS OF ACCOUNT FOR THE YEAR UNDER CONSIDERATION. T HE STAND OF THE REVENUE THAT THE CLAIM OF DEDUCTION CAN BE AVAILED ONLY AFTER THE PARK IS DEVELOPED I.E. ONLY AFTER ISSUANCE OF COMPLETION CERT IFICATE BY THE LOCAL AUTHORITY DOES NOT EMERGE FROM THE READING OF SECTIO N 80-IA(4)(III) OF THE ACT R.W. RULE 18C OF THE RULES, AS IT STANDS FOR TH E PERIOD UNDER CONSIDERATION. 53. AT THIS STAGE, WE MAY ALSO REFER TO THE STAND OF TH E REVENUE BASED ON THE CLAUSE 5 OF SCHEME. AS PER THE CONDITION (2) OF CLAUSE 5, IT IS PRESCRIBED THAT THE TAX BENEFITS UNDER THE ACT WILL BE AVAILABLE TO THE UNDERTAKING ONLY AFTER MINIMUM NUMBER OF THIRTY UNI TS ARE LOCATED IN THE INDUSTRIAL PARK. ON THE STRENGTH OF THIS, IT IS P OINTED OUT THAT AS ON 31.03.2007 I.E. BEFORE THE CLOSE OF THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION, THE MINIMUM NUMBER OF THIRTY UNITS ARE NOT LOCATED IN THE INDUSTRIAL PARK; AND, TH US AS PER THE REVENUE ASSESSEE IS NOT ENTITLED TO THE CLAIM OF DEDUCTION IN TH IS ASSESSMENT YEAR. THE AFORESAID CONDITION CONTAINED IN CLAUSE 5(2) OF T HE SCHEME HAVE TO BE UNDERSTOOD IN THE CONTEXT OF CONDITION (3) OF CLA USE 4 OF THE SCHEME. THE CONDITION (3) OF CLAUSE 4 OF THE SCHEME PRESCRIBE S THAT FOR OBTAINING APPROVAL, THE INDUSTRIAL PARK SHOULD HAVE A MINIMUM O F THIRTY INDUSTRIAL UNITS LOCATED IN IT. THE GENERAL CONDITION CONTAINE D IN CLAUSE 5(2) ONLY ECHOES THE CRITERIA FOR APPROVAL PRESCRIBED IN CLAUSE 4 OF THE SCHEME. HOWEVER, THE CONDITIONS PRESCRIBED IN THE SCHEME ARE FOR THE PURPOSES OF ENABLING THE CENTRAL GOVERNMENT TO CONSIDER AN UN DERTAKING FIT FOR NOTIFICATION FOR THE PURPOSES OF SECTION 80-IA(4)(III) OF THE ACT. THE APPROVAL GRANTED TO THE INDUSTRIAL PARK OF THE ASSESSEE UNDER THE SCHEME CONTINUES TO HOLD THE FIELD AND THERE IS NO CA SE OF THE REVENUE THAT IT HAS BEEN WITHDRAWN IN TERMS OF CLAUSE 6 OF THE SCHEME. THUS, IT IS SAFE TO DEDUCE THAT THE INDUSTRIAL PARK OF THE ASSESSEE H AS COMPLIED WITH THE PROVISIONS PRESCRIBED IN CLAUSE 5 OF THE SCHEME. 54. MOREOVER, EVEN IF ONE HAS TO APPRECIATE THE COND ITION (2) OF CLAUSE 5 OF THE SCHEME WHICH USES THE WORDS TAX BENEFITS .. WILL BE AVAILABLE . ONLY AFTER MINIMUM NUMBER O F THIRTY UNITS ARE LOCATED .. . THE IMPLICATION OF THE SAID CONDITION, AS UNDERSTOO D BY THE REVENUE, IS THAT A MINIMUM NUMBER OF THIRTY UNIT S SHOULD BE LOCATED BEFORE THE END OF THE FINANCIAL YEAR FOR WHICH THE DEDUCTION IS BEING CLAIMED. QUITE CLEARLY, THE AFORESAID CONDITION IN CLAUSE 5 OF THE SCHEME 80 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 DOES NOT PRESCRIBE THAT THE COMPLIANCE FOR THE LOCATI ON OF MINIMUM NUMBER OF THIRTY UNITS IN THE INDUSTRIAL PARK IS TO B E SEEN IN THE CONTEXT OF EVERY ASSESSMENT YEAR IN WHICH THE ASSESSEE IS CLAIMING D EDUCTION U/S 80-IA OF THE ACT. THE COMPLIANCE HAS TO BE SEEN IN THE CONTEXT OF THE PERIOD PERMISSIBLE UNDER THE SCHEME FOR DEVELOPMENT O F THE INDUSTRIAL PARK. OSTENSIBLY, THE PERIOD PERMISSIBLE IN THE SCHEME FOR LOCATION OF MINIMUM THIRTY UNITS HAS BEEN COMPLIED WITH BY THE ASSE SSEE AS ITS DATE OF COMPLETION IS 09.05.2007 I.E. MUCH EARLIER THAN T HE OUTER LIMIT OF 31.03.2009 PRESCRIBED BY THE SCHEME. ON THIS ASPECT, THE LD. REPRESENTATIVE FOR THE ASSESSEE HAS POINTED OUT THAT CLA USE 5(2) OF THE SCHEME MERELY IMPLIES THAT WHEN THE CLAIM OF DEDUCT ION IS BEFORE AN INCOME-TAX AUTHORITIES, IT SHOULD BE SEEN THAT THE MIN IMUM NUMBER OF THIRTY UNITS ARE LOCATED IN THE INDUSTRIAL PARK. IT IS POINTED OUT THAT EVEN THE OUTER LIMIT FOR AVAILMENT OF BENEFIT OF SECTION 80-IA(4)(III) OF THE ACT IN THE PRESENT CASE IS 31.03.2009; AND, WHEN THE ASSESSMEN T ORDER WAS PASSED BY THE ASSESSING OFFICER IN THIS CASE ON 31.03.2010, THE ONLY POINT OF SCRUTINY WAS TO ENQUIRE WHETHER OR NOT THIRTY UNIT S HAVE BEEN LOCATED IN THE INDUSTRIAL PARK ? IN THE PRESENT CASE, IT IS PO INTED OUT THAT IT IS UNDISPUTED THAT THE MINIMUM THIRTY UNITS HAVE BEEN LO CATED IN THE INDUSTRIAL PARK BEFORE THE DATE SPECIFIED IN THE SCHE ME AS WELL AS THE ACT AND THEREFORE THE SAID CONDITION HAS BEEN FULFILLED. 55. WE FIND ENOUGH MERIT IN THE INTERPRETATION PUT- FORTH BY THE ASSESSEE. OSTENSIBLY, THE CONDITIONS IN THE SCHEME HAVE B EEN INSERTED WITH AN OBJECTIVE THAT ONCE AN UNDERTAKING IS CONSIDE RED FOR NOTIFICATION U/S 80-IA(4)(III) OF THE ACT, THERE IS A MECHANISM AV AILABLE TO CHECK AS TO WHETHER THE CONDITIONS PRESCRIBED IN THE SCHEME HAVE BEEN COMPLIED WITH. IN OTHER WORDS, IN THE CONTEXT OF THE PRESENT CONTROVERSY VIS--VIS CLAUSE 5(2) OF THE SCHEME THE OBJECTIVE IS TO ENSURE T HAT THE ASSESSEE DOES NOT CLAIM DEDUCTION WITHOUT PUTTING THE PARK TO USE FOR MINIMUM 30 INDUSTRIAL UNITS IN ACCORDANCE WITH THE SCHEME APP ROVED BUT IT DOES NOT ENVISAGE THAT THE LOCATION OF MINIMUM 30 INDUSTRI AL UNITS BE SEEN FOR EVERY ASSESSMENT YEAR FOR WHICH THE CLAIM IS LODGED, MOR ESO, WHEN THE PROFITS ARE DECLARED BY AN ASSESSEE BASED ON ITS NORMAL ME THOD OF INCOME RECOGNITION. IT MAY BE POINTED OUT THAT THE PROVISIONS OF SECTION 80-IA(4)(III) OF THE ACT ITSELF ENVISAGES DEDUCTION IN CASE OF AN UNDERTAKING WHICH DEVELOPS, DEVELOPS AND OPERATES OR MAINTAINS AND OPERATES AN INDUSTRIAL PARK FOR THE PERIOD BEGINNING ON THE 1 ST APRIL, 2006 AND ENDING ON OR BEFORE 31 ST MARCH, 2009. SIMILARLY, THE SCHEME ALSO ENVISAGES THAT THE DATE OF COMMENCEMENT OF AN IND USTRIAL PARK SHOULD BE ON OR AFTER 01.04.2006 BUT NOT LATER THAN 31.03.2009. WHERE THE PROJECTS INVOLVE A PERIOD OF GESTATION IN ITS CON STRUCTION, THE PERIOD OF DEVELOPMENT MAY EXTEND BEYOND ONE ASSESSMENT YEAR. THEREFORE, ASSESSEE WOULD BE ELIGIBLE TO CLAIM DEDUCTION WITH RESPE CT TO THE PROFITS FROM INDUSTRIAL PARK OVER MULTIPLE ASSESSMENT YEARS SO LON G AS THE DATES PRESCRIBED IN THE ACT AS WELL AS IN THE SCHEME FOR DEV ELOPMENT OF THE INDUSTRIAL PARK ARE ADHERED TO. THE ASSESSEE WOULD DECL ARE PROFITS ON THE BASIS OF ITS METHOD OF ACCOUNTING AND IN OUR VIEW, IN RESPECT OF THE RELEVANT ASSESSMENT YEARS, ANY PROFITS DERIVED FROM THE E LIGIBLE BUSINESS CATEGORIZED IN SECTION 80-IA(4)(III) OF THE ACT SHALL BE ENTITLED FOR A DEDUCTION U/S 80-IA(4)(III) OF THE ACT. IN OUR VIEW , SO LONG AS THE PROFITS ARE DERIVED FROM THE ELIGIBLE BUSINESS AND THE BUSINESS OF THE UNDERTAKING HAS BEEN DEVELOPED IN ACCORDANCE WITH TH E SCHEME IN WHICH IT IS NOTIFIED, THEN ASSESSEE SHALL BE ELIGIBLE FOR THE BENEFIT OF SECTION 80-IA(4)(III) OF THE ACT. 81 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 56. IN THIS CONTEXT, WE MAY MENTION THAT A SIMILAR CO NTROVERSY HAD ARISEN IN THE CONTEXT OF THE CLAIM OF DEDUCTION U/S 8 0-IB(10) OF THE ACT, WHEREIN AN ASSESSEE CAN CLAIM DEDUCTION IN THE YEARS WH EN IT SELLS SOME OF THE RESIDENTIAL UNITS ALTHOUGH THE HOUSING PROJECT IS STILL UNDER CONSTRUCTION PERIOD AS STIPULATED IN SECTION 80-IB(10) OF THE ACT. THE CBDT VIDE INSTRUCTION NO.4 OF 2009 DATED 30.06.2009 CLARIFIED THAT THE DEDUCTION U/S 80-IB(10) OF THE ACT CAN BE CLAIMED ON A YEAR TO YEAR BASIS WHERE AN ASSESSEE WAS SHOWING PROFITS FROM PARTIAL COMPLE TION OF THE PROJECT IN EVERY YEAR. IT HAS ALSO BEEN CLARIFIED BY THE CBDT THAT ON A LATER DATE, IF IT IS FOUND THAT THE CONDITION OF THE COMPLETION OF PROJECT WITHIN THE STIPULATED TIME IS NOT FULFILLED BY THE ASSE SSEE THEN THE ASSESSING OFFICER CAN WITHDRAW THE DEDUCTION ALLOWED T O THE ASSESSEE IN EARLIER YEARS. IN OUR CONSIDERED OPINION, A SIMILAR A NALOGY HAS TO BE APPLIED IN THE PRESENT CASE TO UNDERSTAND THE IMPORT A ND MEANING OF CONDITION (2) OF CLAUSE 5 OF THE SCHEME. IN OUR CON SIDERED OPINION, THE LOWER AUTHORITIES ARE NOT JUSTIFIED IN DISALLOWING THE DEDUCTION CLAIMED BY THE ASSESSEE U/S 80-IA(4)(III) OF THE ACT MERELY BECA USE THE MINIMUM NUMBER OF THIRTY UNITS ARE NOT LOCATED IN THE INDUSTR IAL PARK BEFORE 31.03.2007 WHEN OTHERWISE IT IS FACTUALLY TRUE THAT T HE MINIMUM NUMBER OF UNITS HAVE BEEN LOCATED IN INDUSTRIAL PARK IN COMPLIANCE WITH PERIOD STIPULATED AND APPROVED IN THE SCHEME. THERE FORE, ON THIS ASPECT, WE FIND NO REASON TO UPHOLD THE OBJECTION OF THE REV ENUE. 57. IN-FACT, THE CONTROVERSY BEFORE US IN RELATION TO THE CLAIM OF DEDUCTION U/S 80-IA(4)(III) OF THE ACT PERTAINING TO THE INSTANT ASSESSMENT YEAR IS SIMILAR TO WHAT WAS CONSIDERED BY THE M UMBAI BENCH OF THE TRIBUNAL IN THE CASE OF FERANI HOTELS PVT. LT D. VS. DCIT, VIDE ITA NOS.1828 & 1829/MUM/2009 DATED 24.02.2012 PERTAINING TO ASSESSMENT YEARS 2004-05 AND 2005-06. THE AFORESAID DECI SION WAS RELIED UPON BY THE ASSESSEE IN THE COURSE OF HEARING. I N THE CASE BEFORE THE MUMBAI BENCH OF THE TRIBUNAL, ASSESSEE HAD CLAIMED DEDUCTION U/S 80-IA(4)(III) OF THE ACT IN RESPECT OF PROFITS FROM D EVELOPMENT OF AN INDUSTRIAL PARK. THE CLAIM WAS DISPUTED BY THE REVENU E FOR ASSESSMENT YEARS 2004-05 AND 2005-06. THE OBJECTION OF THE REV ENUE WAS THAT THE NOTIFICATION ISSUED BY THE CENTRAL GOVERNMENT NOTIFYI NG THE INDUSTRIAL PARK WAS DATED 12.07.2006. IT WAS ALSO THE CASE OF TH E REVENUE THAT AS ON THE LAST DAY OF THE RELEVANT ASSESSMENT YEARS I.E. 200 4-05 AND 2005- 06, ALL THE 33 UNITS APPROVED IN THE SCHEME WERE NOT DEVELOPED IN THE INDUSTRIAL PARK. AS PER THE REVENUE, THE NOTIFICATIO N WAS ALSO ISSUED BY THE CENTRAL GOVERNMENT ON 12.07.2006, WHICH WAS POSTE RIOR TO THE ASSESSMENT YEARS 2004-05 AND 2005-06. THE CLAIM OF THE ASSESSEE WAS THAT IT WAS FOLLOWING PERCENTAGE COMPLETION METHOD O F ACCOUNTING AND WAS OFFERING INCOME ON THE BASIS OF THE PERCENTAGE OF CONSTRUCTION COMPLETED. THUS, THE PROFITS FROM THE INDUSTRIAL PARK WERE ALSO OFFERED FOR ASSESSMENT YEARS 2004-05 AND 2005-06 ON WHICH CLAIM FOR DEDUCTION U/S 80-IA(4)(III) OF THE ACT WAS MADE. ASSESSE E ALSO SUBMITTED THAT ULTIMATELY ALL THE CONDITIONS PRESCRIBE D FOR DEDUCTION U/S 80-IA(4)(III) OF THE ACT WERE COMPLIED WITH AND THA T IN THE SUBSEQUENT ASSESSMENT YEAR 2006-07 ASSESSEE WAS INDEED ALLOWED THE DEDU CTION BY THE ASSESSING OFFICER. THE TRIBUNAL HELD THAT THE DEN IAL OF DEDUCTION ON THE AFORESAID GROUNDS IN ASSESSMENT YEAS 2004-05 AND 2005- 06 WAS NOT JUSTIFIED. IT WAS SPECIFICALLY NOTED THAT BECAUSE IN T HE FIRST TWO YEARS THE MINIMUM NUMBER OF UNITS WERE NOT LOCATED IN THE INDU STRIAL PARK WAS NOT A VALID GROUND FOR DISALLOWING THE CLAIM ESPECIAL LY WHEN IN THE ULTIMATE ANALYSIS THE INDUSTRIAL PARK WAS DEVELOPED IN ACCORDANCE WITH 82 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 THE APPROVAL GRANTED BY THE CENTRAL GOVERNMENT. TH E FOLLOWING DISCUSSION IN THE ORDER OF THE TRIBUNAL WORTHY OF NOTI CE :- 25. FROM THE REASONS ASSIGNED BY THE REVENUE AUTHO RITIES FOR REJECTING THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S.80-IA(4 )(III) OF THE ACT, IT IS CLEAR THAT AN ASSESSEE WHO ADOPTS THE PERCENTAGE CO MPLETION METHOD OF ACCOUNTING OF INCOME FROM DEVELOPING INDUSTRIAL PAR K CAN GET DEDUCTION OF ONLY THAT PART OF THE PROFITS THAT ARE OFFERED TO T AX IN THE YEAR IN WHICH THE NOTIFICATION IS RECEIVED. HAD THE ASSESSEE IN THE P RESENT CASE FOLLOWED PROJECT COMPLETION OF METHOD OF ACCOUNTING OF INCOM E FROM DEVELOPING INDUSTRIAL PARK, THE ASSESSEE WOULD HAVE GOT THE BE NEFIT OF DEDUCTION OF THE ENTIRE PROFITS FROM THE DEVELOPMENT OF INDUSTRIAL P ARK. IT WILL RESULT IN A SITUATION WHERE THE METHOD OF ACCOUNTING FOLLOWED B Y THE ASSESSEE (SUCH AS THE ONE IN THE PRESENT CASE) WILL DENY THE BENEF IT AVAILABLE UNDER THE LAW. THE METHOD OF ACCOUNTING IS SUCH THAT THE ASSE SSEE CAN NEVER GET THE BENEFIT EVEN IN A LATER YEAR. IT IS NO DOUBT TRUE T HAT THE SATISFACTION OF THE CONDITIONS FOR GRANT OF DEDUCTION AS ON THE LAST DA TE OF THE PREVIOUS YEAR IS NECESSARY. IF DUE TO SUBSEQUENT EVENTS THAT TAKE PL ACE AFTER THE LAST DATE OF THE PREVIOUS YEAR, CONDITIONS FOR GRANT OF DEDUCTIO N ARE SATISFIED, THEN THE ASSESSING OFFICER CAN TAKE COGNIZANCE OF THE SAME. THE CBDT IN INSTRUCTION NO.4/2009 DT. 30.06.2009 CLARIFIED THE POSITION WITH REGARD TO ALLOWING DEDUCTION U/S.80-18(10) OF THE ACT. U/S.80 -IB(10) OF THE ACT, DEDUCTION OF 100% PROFITS DERIVED FROM DEVELOPING A ND BUILDING HOUSING PROJECTS IS ALLOWED. ONE OF THE CONDITIONS TO BE SA TISFIED FOR CLAIMING SUCH DEDUCTION WAS THAT THE HOUSING PROJECT SHOULD HAVE COMMENCED CONSTRUCTION ON OR AFTER 1.10.1998 AND COMPLETED TH E CONSTRUCTION WITHIN 4 YEARS FROM THE FINANCIAL YEAR IN WHICH THE HOUSIN G PROJECT IS APPROVED BY THE LOCAL AUTHORITY. THE QUESTION AROSE WHETHER THE DEDUCTION CAN BE CLAIMED BY ASSESSEES WHO FOLLOW PERCENTAGE COMPLETI ON METHOD OF ACCOUNTING BY SHOWING PART OF THE PROFITS OR THE DE DUCTION WOULD BE AVAILABLE ONLY IN THE YEAR OF COMPLETION OF THE PRO JECT U/S.80-IB(10) OF THE ACT. THE CBDT CLARIFIED THAT DEDUCTION CAN BE CLAIM ED ON A YEAR TO YEAR BASIS WHERE THE ASSESSEE IS SHOWING PROFIT FROM PAR TIAL COMPLETION OF THE PROJECT EVERY YEAR. IT FURTHER CLARIFIED THAT IF TH E CONDITION FOR COMPLETION OF THE PROJECT WITHIN THE SPECIFIED TIME LIMIT IS N OT SATISFIED, THE DEDUCTION GRANTED TO AN ASSESSEE IN EARLIER YEARS CAN BE WITH DRAWN. WE ARE OF THE VIEW THAT THERE IS NO REASON WHY SIMILAR BENEFIT SH OULD NOT BE EXTENDED TO ASSESSEE CLAIMING BENEFIT U/S.80-IA(4)(III) OF THE ACT WHEN THE CONDITIONS FOR GRANT OF DEDUCTION WERE SATISFIED BY THE ASSESS EE EVEN BEFORE THE AO PASSED THE ORDER OF ASSESSMENT. THE FACTS OF THE PR ESENT CASE JUSTIFY CONSIDERING THE PLEA OF THE ASSESSEE FOR GRANT OF D EDUCTION U/S.80-IA(4)(III) OF THE ACT IN RESPECT OF PROFITS DECLARED IN AY 04- 05 AND 05-06 AND ALLOWING THE SAME AS ADMITTEDLY THE CONDITIONS FOR GRANT OF SUCH DEDUCTION WERE SATISFIED THOUGH AT A LATER POINT OF TIME BUT NEVER THELESS BEFORE COMPLETION OF ASSESSMENT FOR THOSE ASSESSMENT YEARS. WE DIREC T ACCORDINGLY. THE APPEALS OF THE ASSESSEE ARE ACCORDINGLY ALLOWED. 58. THE AFORESAID DECISION OF THE TRIBUNAL IN THE CASE OF FERANI HOTELS PVT. LTD. (SUPRA), IN OUR VIEW, FULLY COVERS THE CONT ROVERSY BEFORE US. IN THE PRESENT CASE ALSO IT IS NOT IN DISPUTE THAT THE ASSESSEE HAS DEVELOPED AND LOCATED THE MINIMUM NUMBER OF 30 INDUSTRIAL UNIT S IN THE INDUSTRIAL PARK WITHIN THE PERIOD SPECIFIED IN THE SCHEME AS WEL L AS THE PROVISIONS OF SECTION 80-IA(4)(III) OF THE ACT. IT IS ALSO NOT I N DISPUTE THAT IN THE SUBSEQUENT ASSESSMENT YEARS, THE ASSESSING OFFICER HAS ALLOWED THE DEDUCTION U/S 80-IA(4)(III) OF THE ACT. IN THE INSTA NT ASSESSMENT YEAR, ASSESSEE HAS OPERATIONALISED 21 INDUSTRIAL UNITS OUT OF TH E MINIMUM 30 83 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 REQUIRED TO BE DEVELOPED. THE BALANCE OF THE 9 UNI TS HAVE BEEN COMPLETED ON 09.05.2007 I.E. THE DATE ON WHICH ASSESSEE HAS OBTAINED THE COMPLETION CERTIFICATE FROM THE PUNE MUNICIPAL CORPORATION. HYPOTHETICALLY SPEAKING, IF THE ASSESSEE HAD NOT RECOGNI ZED THE PROFITS ON THE 21 UNITS SOLD DURING THE YEAR UNDER CONSIDERATI ON BUT WOULD HAVE WAITED RECOGNITION OF INCOME AFTER THE COMPLETION O F THE COMPLETE 30 UNITS, THEN SUCH PROFITS WOULD HAVE BEEN OFFERED BY TH E ASSESSEE TO TAX IN THE SUBSEQUENT ASSESSMENT YEAR, WHEREIN IN ANY CASE THE A SSESSING OFFICER HAS HELD THE ASSESSEE ENTITLED FOR THE DEDUCTIO N U/S 80-IA(4)(III) OF THE ACT. HOWEVER, ASSESSEE HAS DECLARED INCOME FROM THE SALE OF UNITS ON A PROGRESSIVE BASIS I.E. IN THE YEAR IN WHICH THE PA RTICULAR INDUSTRIAL UNITS HAVE BEEN SOLD. THIS HAS LEAD TO A CONFLICT BETW EEN THE ASSESSEE AND THE REVENUE WITH REGARD TO THE ASSESSEES CLAIM FOR DEDUCTION U/S 80-IA(4)(III) OF THE ACT. THE MOOT QUESTION IS CAN THE METHOD OF ACCOUNTING FOLLOWED BY THE ASSESSEE BE DETERMINATIVE OF ASSESSEES CLAIM FOR DEDUCTION U/S 80-IA(4)(III) OF THE ACT ESPECIALLY IN A SITUATION WHERE ASSESSEE IS OTHERWISE SAID TO HAVE COMPLIED WITH THE REQU IREMENTS OF SECTION 80-IA(4)(III) OF THE ACT READ ALONG WITH THE PROVISIONS OF THE IPS, 2008 UNDER WHICH THE INDUSTRIAL PARK OF THE ASSESSEE HAS BEEN NOTIFIED. IN-FACT, IF THE STAND OF THE REVENUE IS TO BE ACCEPTE D, WHAT WOULD HAPPEN IS THAT ASSESSEES CLAIM FOR DEDUCTION U/S 80-IA(4)(III) OF THE ACT SHALL BE DENIED IN THE INSTANT YEAR AND IN THE SUBSEQUENT YEARS ALSO ASSESSEE WOULD NOT BE ABLE TO CLAIM THE BENEFIT BECAUSE THE I MPUGNED PROFITS WOULD NOT HAVE BEEN ACCOUNTED FOR BY THE ASSESSEE IN T HE SUBSEQUENT YEARS. THAT WOULD MEAN THAT THE ASSESSEE WOULD NEVER GE T THE BENEFIT OF SECTION 80-IA(4)(III) OF THE ACT QUA THE IMPUGNED PR OFITS DERIVED FROM THE DEVELOPMENT OF THE INDUSTRIAL PARK MERELY BECAUSE OF THE METHOD OF ACCOUNTING FOLLOWED. IN-FACT, THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF FERANI HOTELS PVT. LTD. (SUPRA) OBSERVED THAT T HE REVENUE DESERVES TO BE SATISFIED THAT THE CONDITIONS FOR GRANT O F DEDUCTION ARE FULFILLED ON THE LAST DAY OF THE PREVIOUS YEAR, SO HOW EVER, IF THE SUBSEQUENT EVENTS AFTER THE LAST DATE OF THE PREVIOUS Y EAR SHOW THAT THE CONDITIONS FOR GRANT OF DEDUCTION ARE FULFILLED, THE N THE ASSESSING OFFICER OUGHT TO TAKE COGNIZANCE OF THE SAME AND ALLOW THE C LAIM OF THE ASSESSEE. FOLLOWING THE AFORESAID PARITY OF REASONING, IN OUR V IEW, IN THE PRESENT CASE TOO IT IS UNDENIABLE THAT ASSESSEE HAS COMPLIED WITH THE REQUIREMENT OF LOCATING MINIMUM OF 30 INDUSTRIAL UNI TS IN THE INDUSTRIAL PARK WITHIN THE PERIOD PRESCRIBED IN THE SCHEME, AND THEREFORE ITS CLAIM FOR ASSESSMENT YEAR 2007-08 WAS UNJUSTLY DISALLOWED. 59. BEFORE PARTING, WE MAY ALSO REFER TO THE DECISION OF THE HONBLE THIRD MEMBER OF THE TRIBUNAL IN THE CASE OF MARIGOLD PREMISES PVT. LTD. (SUPRA) RELIED UPON BY THE REVENUE BEFORE US. THE ISSU E IN THE CASE OF MARIGOLD PREMISES PVT. LTD. (SUPRA) WAS THE CLAIM OF DE DUCTION U/S 80- IA(4)(III) OF THE ACT IN THE CONTEXT OF THE INDUSTRI AL PARK SCHEME, 2002. IN THE CASE BEFORE THE HONBLE THIRD MEMBER OF THE T RIBUNAL, ASSESSEE HAD UNDERTAKEN CONSTRUCTION OF AN INDUSTRIAL PARK APP ROVED UNDER THE IPS, 2002. ASSESSEE CLAIMED DEDUCTION FOR ASSESSMENT YEAR 2003-04 WHICH WAS DENIED BY THE ASSESSING OFFICER ON THE GROUND THAT AS PER THE APPROVAL UNDER THE IPS, 2002 ASSESSEE HAD TO LOCATE 30 UNITS IN THE INDUSTRIAL PARK WHILE ASSESSEE WAS ABLE TO LOCATE ONLY 6 UNITS BY 31.03.2003. THE HONBLE THIRD MEMBER OF THE TRIBUN AL HELD THAT THE DEDUCTION U/S 80-IA(4)(III) OF THE ACT COULD AVAILED BY THE ASSESSEE ONLY WHEN THE UNDERTAKING BEGINS TO OPERATE AN INDUSTRIAL PARK AND SUCH A CONCLUSION WAS ARRIVED AT BY THE HONBLE THIRD MEMBER OF THE TRIBUNAL ON THE BASIS OF THE PROVISIONS OF SECTION 80-IA(4)(III) OF THE ACT READ WITH 84 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 THE THEN APPLICABLE RULE 18C OF THE RULES. THE RELE VANT DISCUSSION IN THE ORDER OF THE HONBLE THIRD MEMBER OF THE TRIBUNAL R EADS AS UNDER :- 31. IN MY HUMBLE OPINION THE LEGISLATURE HAS CONSC IOUSLY USED THE EXPRESSION 'DEVELOPS AN INDUSTRIAL PARK' INSTEAD OF USING THE EXPRESSION 'UNDERTAKES TO DEVELOP AN INDUSTRIAL PARK'. WHEREVER LEGISLATURE INTENDED TO EXTEND THE BENEFIT OF DEDUC TION TO AN UNDERTAKING WHICH HAS TO MERELY COMMENCE ITS ACTIVITY, WI THOUT COMPLETING MINIMUM STIPULATED PHASE, IT WAS SPECIFIED IN THE R ELEVANT PROVISIONS. FOR EXAMPLE, IN SECTION 80IC(2) IT WAS STATED THAT IF A N UNDERTAKING BEGINS TO MANUFACTURE OR PRODUCE ANY ARTICLE OR THING IT BECO MES AN ELIGIBLE UNDERTAKING. ON THE CONTRARY, SECTION 80IA OF THE A CT SPECIFIES THAT AN ASSESSEE SHALL BE ELIGIBLE TO CLAIM DEDUCTION 'IN ACCORDANCE WITH AND SUBJECT TO THE PROVISIONS OF THIS SECTION'. AS STATED EARLIER, SUB-CLAUSE (2) THEREOF USED THE EXPRESSION 'DEVELOPS' INSTEAD OF THE EXPRESSION 'TO DEVELOP'. SECTION 80IA (4) (III) (WHICH WAS REFER RED TO IN SECTION 80IA(2)4 SPECIFIES THAT AN UNDERTAKING WHICH DEVELOPS AN INDUSTRIAL PARK NOTIFIED BY THE CENTRAL GOVERNMENT IN ACCORDANCE WITH THE SCHEME FRAMED AND NOTIFIED BY THE GOVE RNMENT IS ELIGIBLE FOR DEDUCTION. IT IS RELEVANT TO NOTICE HERE THAT IN SE CTION 80(4) (III) LEGISLATURE HAS NOT USED THE EXPRESSION SUCH AS 'AN UNDERTAKING WHICH BEGINS TO DEVELOP'. RULE 18C OF THE I.T. RULES PRESCRIBES T HE PROCEDURE TO BE FOLLOWED BY AN INDUSTRIAL PARK TO AVAIL THE BENEFIT S UNDER SECTION 80IA(4)(III) OF THE ACT. RULE 18C, AS IT E XISTED AT THE RELEVANT POINT OF TIME, READS AS UNDER : '18C, ELIGIBILITY OF INDUSTRIAL PARK AND SPECIAL EC ONOMIC ZONES FOR BENEFITS UNDER SECTION 80-IA(4)(III) - (1) TH E UNDERTAKING SHALL BEGIN TO OPERATE AN INDUSTRIAL PARK DURING THE PERIOD BEGINNING ON THE 1 ST DAY OF APRIL, 1997, AND. ERODING ON THE 31 SI DAY OF MARCH, 2002. (1A) THE UNDERTAKING SHALL BEGIN TO DEVELOP OR DEVE LOP AND OPERATE OR MAINTAIN AND OPERATE A SPECIAL ECONOMIC ZONE ANY TIME DURING THE PERIOD BEGINNING ON THE 1 ST DAY OF APRIL, 2001 AND ENDING ON 31 ST DAY OF MARCH, 2006. (2) THE UNDERTAKING SHALL BE DULY APPROVE D BY THE MINISTRY OF COMMERCE AND INDUSTRY IN THE CENTRAL GOVERNMENT UNDER THE SCHEME FOR INDUSTRIAL PARK OR SPECIAL ECONOMI C ZONES NOTIFIED BY THAT MINISTRY. (3) THE UNDERTAKING SHALL CONTINUE TO FULFILL THE CONDI TIONS ENVISAGED IN THE SCHEME. (4) ON APPROVAL UNDER SUB-RULE (2), THE CENTRAL BOARD O F DIRECT TAXES, SHALL NOTIFY INDUSTRIAL PARKS FOR BENEFITS UNDER SECTION 80- IA.' 31.1 AS COULD BE NOTICED FROM THE AFOREMENTIO NED RULE, IN ORDER TO AVAIL BENEFIT UNDER SECTION 80IA, AN INDUSTRIAL PAR K HAS TO BEGIN ITS OPERATIONS WHICH CAN ONLY BE A SUBSEQUENT EVENT I.E ., AFTER IT HAS DEVELOPED TO AN EXTENT WHERE IT FULFILLS THE MINIMUM CRITERIA TO BE TREATED AS AN INDUSTRIAL PARK. HOWEVER, SUB-RULE (1A), WHICH REF ERS TO AN UNDERTAKING SET UP IN A SPECIAL ECONOMIC ZONE, US ED THE EXPRESSION 'SHALL BEGIN TO DEVELOP'; IF THE INTENTION WAS TO GIVE THE SAME TREATMENT TO AN UNDERTAKING WHICH DEVELOPS AN INDUSTRIAL PARK, THE SAME COULD HAVE BEEN MENTIONED IN SUB-RULE (1) OR IT COULD HAVE BEEN INC LUDED IN SUB-RULE (1A). 85 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 RULE MAKING AUTHORITY, IN EXERCISE OF ITS DELEGATED LEGISLATION, APPEARS TO HAVE CONSCIOUSLY MAINTAINED A DISTINCTION BETWEEN A N INDUSTRIAL PARK AND AN UNDERTAKING SET UP IN A SPECIAL ECONOMIC ZONE WH EREBY AN INDUSTRIAL PARK GETS ELIGIBILITY TO CLAIM DEDUCTION ONLY AF TER IT BEGINS TO OPERATE THE PARK AND NOT BEFORE. DURING THE DEV ELOPMENTAL STAGE, PARTICULARLY WHEN THE MINIMUM DEVELOPMENT IS NOT ACHIEVED, IT CANNOT BE SAID THAT IF: WAS OPERATING AN INDUSTRIAL PARK S INCE THE SCHEME, TO WHICH A REFERENCE IS MADE IN THE SUBSEQUENT PARAGRAPHS, I MPOSES MINIMUM CONDITIONS TO BE FULFILLED TO BE CONSIDERED AS AN I NDUSTRIAL PARK. IN THE INSTANT CASE, ASSESSEE HAS CONSTRUCTED ONLY SIX UNI TS AND AT THIS STAGE IT IS DIFFICULT TO HOLD THAT THE ASSESSEE HAS FULFILLED T HE STIPULATED CONDITION OF NOT ONLY CONSTRUCTION OF SPECIFIED UNITS BUT ALSO A LLOCATION OF FLOOR AREA TO DIFFERENT ENTREPRENEURS AS PER THE SCHEME. RULE 18 C WAS AMENDED W.E.F. 8.1.2008 WHEREBY AN UNDERTAKING WHICH BEGINS TO DEV ELOP AN INDUSTRIAL PARK ANY TIME DURING THE PERIOD BEGINNING ON THE 1 ST DAY OF APRIL, 2006 AND ENDING ON 31 ST DAY OF MARCH, 2011 WAS MADE ELIGIBLE TO CLAIM DEDU CTION. ADMITTEDLY, IT IS NOT THE ASSESSEES CASE THAT IT H AS COMMENCED THE PROCESS OF DEVELOPMENT AFTER 1 ST DAY OF APRIL, 2006 AND THUS SUBSEQUENT RULE HAS NOT APPLICATION TO THE INSTANT CASE. 60. THE AFORESAID DISCUSSION WOULD SHOW THAT THE HONBLE THIRD MEMBER WAS GUIDED BY THE THEN RELEVANT PROVISIONS OF R ULE 18C OF THE RULES WHICH HAVE SINCE BEEN AMENDED QUA THE ASSESSMENT YE AR BEFORE US. IN THE PREVIOUSLY WORDED RULE 18C OF THE RULES, T HE WORDINGS WERE THAT THE UNDERTAKING SHALL BEGIN TO OPERATE AN INDUSTRIAL P ARK . . HOWEVER, THE RULE 18C(1) OF THE RULES, WHICH HAS SINCE BEEN AMENDED AND WHICH IS RELEVANT FOR THE YEAR UNDER CONSIDERATIO N READS TO SAY THAT UNDERTAKING SHALL BEGIN TO DEVELOP, DEVELOP AND OP ERATE OR MAINTAIN AND OPERATE AN INDUSTRIAL PARK . THIS DISTINCTION HAS BEEN NOTICED BY THE HONBLE THIRD MEMBER HIMSELF IN THE ABOVE DISCUSSIO N. RULE 18C OF THE RULES PROVIDES THE ELIGIBILITY OF INDUSTRIAL PARKS FOR THE BENEFITS U/S 80-IA(4)(III) OF THE ACT AND EVEN AN UNDERTAKING WH ICH BEGINS TO DEVELOP IS ALSO ELIGIBLE FOR THE CLAIM OF DEDUCTION PROVIDED THAT IT TAKES PLACE DURING THE PERIOD BEGINNING ON 01.04.2006 AND BEFOR E 31.03.2009 AND FULFILLS THE CONDITIONS ENVISAGED IN THE IPS, 2008. T HE AFORESAID ASPECT FULLY COVERS THE CONTROVERSY BEFORE US EVEN IF IT IS A SSUMED THAT THE OBJECTION OF THE ASSESSING OFFICER OF LOCATING 30 UNIT S IS REQUIRED TO BE SEEN AS ON 31.03.2007 ALSO. UNDENIABLY, ASSESSEE HAS OPER ATIONALIZED 21 INDUSTRIAL UNITS IN THE INSTANT ASSESSMENT YEAR WHICH SIGNI FIES THAT ITS ACTIVITIES ARE COVERED WITHIN THE EXPRESSION BEGIN TO DEVELOP CONTAINED IN RULE 18C(1) OF THE RULES. THEREFORE, THE DECISION OF THE THIRD MEMBER IN THE CASE OF MARIGOLD PREMISES PVT. LTD. (SUPRA) DOES NOT HELP THE CASE OF THE REVENUE QUA THE INSTANT ASSESSEE. MOREOVER, THE CLAIM BEFORE THE HONBLE THIRD MEMBER WAS WITH RESPECT TO AN INDUSTRIAL PARK WHICH WAS APPROVED UNDER THE INDUSTRIAL PARK SCHEME, 2002 WHER EAS ASSESSEES CASE IS COVERED BY THE INDUSTRIAL PARK SCHEME, 2008. 61. THEREFORE, CONSIDERING THE AMENDMENT OF RULE 18C OF THE RULES MADE W.E.F. 01.08.2008 WHERE AN UNDERTAKING BEGINS T O DEVELOP AN INDUSTRIAL PARK IS ALSO ELIGIBLE FOR THE DEDUCTION SO L ONG AS THE DEVELOPMENT IS OTHERWISE COMPLETE WITHIN THE PERIOD SP ECIFIED IN THE SCHEME AS WELL AS IT FULFILLS THE CONDITIONS ENVISAGED I N THE SCHEME. THE DECISION IN THE CASE OF MARIGOLD PREMISES PVT. LTD. (SUP RA) WENT AGAINST THE ASSESSEE BECAUSE AT THE RELEVANT POINT OF TIME RULE 18C OF THE RULES MANDATED THAT THE DEDUCTION WAS AVAILABLE TO THE ASSE SSEE WHEN THE ASSESSEE BEGAN TO OPERATE AN INDUSTRIAL PARK WHEREAS IN T HE 86 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 SUBSEQUENTLY AMENDED RULE 18C OF THE RULES, WHICH IS AP PLICABLE TO THE CASE BEFORE US, IT IS DIFFERENTLY WORDED. THE AFORESAI D DIFFERENCE HAS ALSO BEEN APPRECIATED BY THE HONBLE THIRD MEMBER IN ITS DECISION IN THE CASE OF MARIGOLD PREMISES PVT. LTD. (SUPRA). THEREFORE, IN OUR VIEW, THERE IS NO JUSTIFICATION FOR THE DENIAL OF DEDUCTION NU/S 80- IA(4)(III) OF THE ACT IN THE INSTANT ASSESSMENT YEAR WITH REGARD TO THE PROFITS EA RNED BY THE ASSESSEE FROM INDUSTRIAL PARK GIGA SPACE OF RS.33,59,56 ,749/-. 62. IN THE RESULT, ON THIS ASPECT WE SET-ASIDE THE ORDE R OF THE CIT(A) AND DIRECT THE ASSESSING OFFICER TO ALLOW THE DEDUCTION MADE U/S 80- IA(4)(III) OF THE ACT OF RS.33,59,56,749/-. THUS, ON THIS ASPECT ASSESSEE SUCCEEDS. 68. SINCE THE ORDER OF THE CIT(A) ON THIS ISSUE IS IN CONS ONANCE WITH THE ISSUE DECIDED BY THE TRIBUNAL UNDER IDENTICAL CIRCUMSTANCES, THEREFORE, IN ABSENCE OF ANY CONTRARY MATE RIAL BROUGHT TO OUR NOTICE, WE DO NOT FIND ANY INFIRMITY IN HIS DE TAILED ORDER ON THIS ISSUE. ACCORDINGLY, THE SAME IS UPHELD AND THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 69. GROUNDS OF APPEAL NO.6 AND 7 BEING GENERAL IN NATURE ARE DISMISSED. ITA NO.1317/PN/2013 (A.Y. 2010-11) : 70. THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS GROU ND OF APPEAL NO.1 FOR WHICH THE LD. DEPARTMENTAL REPRESENTATIVE HAS NO OBJECTION. ACCORDINGLY, THE SAME IS DISMISSED. 71. GROUND OF APPEAL NO.2 BY THE ASSESSEE READS AS UNDER : 2. THE LD.CIT(A) ERRED IN SUSTAINING THE ADDITION OF RS.33,000/- ON ACCOUNT OF CASH SEIZED FROM THE APPELLANT IGNORING TH E FACT THAT THE LD.AO HAD REJECTED THE APPELLANTS SWORN AFFIDAVIT EXPLAIN ING THE SOURCE OF RS.22,00,000/- AND THE EVIDENCE SUPPORTING WITHDRAWAL OF RS.10,24,000/- FROM HIS BANK ACCOUNT SUMMARILY. THE A DDITION OF RS.33,00,000/- BE DELETED. 87 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 72. FACTS OF THE CASE, IN BRIEF, ARE THAT DURING THE COURS E OF SEARCH ACTION U/S.132 AT THE ASSESSEES RESIDENTIAL PREMISES AT 1121 & 1121A SAI SHRADDHA, MODEL COLONY PUNE ON 20-01-2010, CAS H OF RS.29,02,670/- WAS FOUND OUT OF WHICH RS.28,00,000/- WAS SEIZ ED AND, THEREAFTER RS.5,00,000/- WAS SEIZED FROM THE ASSESSEE S LOCKER NO.73 WITH PUNE PEOPLES COOPERATIVE BANK LTD. ON 15-03- 2010. DURING THE COURSE OF SEARCH ACTION THE ASSESSEE COULD N OT EXPLAIN THE SOURCES OF THE CASH FOUND AND HAD SUBMITTED THAT THE S AME WILL BE EXPLAINED LATER ON AFTER VERIFYING THE BOOKS OF ACCOUNT. 73. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASS ESSEE EXPLAINED THE SOURCE OF THE SAME AS UNDER : CASH BALANCE OF SADGURU DATTA DHARMIK TRUST RS,22,00,000/ - CASH WITHDRAWALS FROM COSMOS CO - OPERATIVE BANK LIMITED, BANGALORE RS.10,24,000/ - CASH WITH MYSELF AND MY FAMILY MEMBERS, DULY ACCOUNTED FOR RS.74,000/ - 74. HOWEVER, THE ASSESSING OFFICER REJECTED THE CLAIM OF TH E ASSESSEE THAT CASH AMOUNTING TO RS.22,00,000/- WAS THE CASH BALANCE ENTRUSTED TO HIM BY THE SADGURU DATTA DHARMES H TRUST, A CHARITABLE TRUST TO BE DEPOSITED IN ITS ACCOUNT AT PUNE PEOPLE'S CO- OPERATIVE BANK LTD AS THE ASSESSEE WAS IN CHARGE OFFICER OF THE SAID TRUST. HE NOTED THAT THE TRUST HAD FILED A PETITION BEFO RE THE CIT (CENTRAL), PUNE ON 19-8-2011 REQUESTING RELEASE OF THE SEIZ ED AMOUNT. IN THE ORDER PASSED U/S 132B DATED 26-9-2011 , THE CLAIM OF THE ASSESSEE THAT CASH OF RS. 22 LAKHS BELONGED TO THE TRUST WAS REJECTED ON THE GROUND THAT THE SAME WAS AN 'AFTERTH OUGHT' OF THE ASSESSEE IN VIEW OF THE FACT THAT NO EXPLANATION WAS FURN ISHED DURING THE 132(4) STATEMENT RECORDED DURING THE SEARCH ACTION. HE ALSO REJECTED THE CLAIM OF CASH WITHDRAWAL FROM COSMOS CO-OPER ATIVE 88 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 BANK AND CASH WITH SELF AND FAMILY MEMBERS IN ABSENCE OF A NY COGENT EVIDENCE. 75. BEFORE CIT(A) THE ASSESSEE REITERATED THE SAME SUBMISSION AS MADE BEFORE THE ASSESSING OFFICER REGARDING THE CASH SEIZE D. IT WAS CONTENDED THAT THE ASSESSING OFFICER HAS NOT APPLIED HIS M IND AT ALL TO THE SUBMISSIONS MADE BEFORE HIM AND IS SILENT ABOUT THE CASH WITHDRAWN FROM COSMOS BANK AND CASH IN HAND AS PER BOO KS OF ACCOUNT . THE ASSESSEE REGARDING THE 22 LAKHS BELONGING TO THE TR UST HAD STATED THAT THE ASSESSING OFFICER HAD NOT GONE INTO IT S MERITS AND DOUBTED IT TO BE AN AFTERTHOUGHT. 76. HOWEVER, THE LD.CIT(A) WAS ALSO NOT SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSEE AND UPHELD THE ACTION OF THE ASSESSING OFFICER BY OBSERVING AS UNDER : 7.1 I HAVE CONSIDERED THE SUBMISSION MADE BY THE APPELL ANT AND PERUSED MATERIAL ON RECORD. SECTION 132 PRESUMES THAT THE B OOKS OF ACCOUNT, DOCUMENT, MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THINGS FOUND IN POSSESSION AND CONTROL OF ANY PERSON IN THE SEARCHED PREMISES BELONG TO SUCH PERSON AND THAT THEIR CONTENTS ARE TRUE. IN THE ABSENCE OF SAT ISFACTORY EXPLANATION THEY MAY BE TREATED AS ACQUIRED ON THAT DATE. THESE ARE NO DOUBT PRESUMPTIONS BUT WOULD PLACE HEAVY RESPONSIBILITY ON THE PERSON IN P OSSESSION. THE APPELLANT DURING THE SEARCH ACTION HAD NOT FURNISHED ANY EXPL ANATION WHATSOEVER FOR THE CASH FOUND AND SEIZED OF RS. 28 LACS FROM THE RESID ENTIAL PREMISES ON 20-1- 2010 AND RS. 5 LACS FROM THE BANK LOCKER ON 15.03.2 010. THE EXPLANATION FOR THE SEIZED CASH HAS COME ONLY AFTER A SUBSTANTIAL G AP OF NEARLY EIGHT MONTHS WHICH PRIMA FACIE APPEARS TO BE AN 'AFTERTHOUGHT' W HICH IS DIFFICULT TO BE BELIEVED AND ACCEPTED. A PERSON FOUND IN POSSESSION OF CASH WILL BE PRESUMED OWNER UNLESS HE ESTABLISHES THAT HE IS NOT THE OWNE R BY FURNISHING COGENT EVIDENCE. THE APPELLANT IT APPEARS FROM THE ASSESSM ENT ORDER HAD ALSO FILED AN AFFIDAVIT IN THIS REGARD DURING THE ASSESSMENT PROC EEDINGS BEFORE THE ASSESSING OFFICER AND THE ASSESSING OFFICER AFTER CONSIDERING THE MATERIALS FILED BY THE APPELLANT HAD HELD THE CASH TO BE UNACCOUNTED AND U NEXPLAINED. THE APPELLANT HAS NOT FILED ANY SUCH EVIDENCE OR BROUGHT ON RECOR D ANY SUCH MATERIAL WHICH COULD JUSTIFY ITS CLAIM. IN THE CASE OF ASHOK KUMAR VS CIT (1986) 160 ITR 497 (M.P) IT WAS HELD THAT THE PRESUMPTION OF OWNERSHIP IN CASE OF CASH FOUND IN POSSESSION OF PERSON IS VIABLE BECAUSE CASH IS ONE OF THE PROPERTIES OF WHICH TITLE IS TRANSFERABLE MERELY BY DELIVERY OF POSSESS ION. THEREFORE, UNLESS ANY CONTRADICTORY EXPLANATION IS GIVEN BY THE PERSON IN POSSESSION, THE PRESUMPTION IS JUSTIFIED. THE APPELLANT'S CONTENTIO N THAT HIS AGE, LACK OF FORMAL EDUCATION AND MENTAL STRESS FOR NOT REMEMBERING THE SOURCE OF CASH IS NOT TENABLE AS THE EXPLANATION HAS COME AT A MUCH LATER DATE AND AFTER A LONG GAP OF NEARLY EIGHT MONTHS. IT IS ALSO NOTICED THAT THE CA SH BALANCE OF RS. 22 LACS CLAIMED TO BE BELONGING TO SADGURU DATTA DHARMIK TR UST WAS ALSO SUBJECT TO EXAMINATION DURING THE 132B PROCEEDINGS AND THE CLA IM OF THE APPELLANT HAD BEEN SUBJECTED TO SCRUTINY AND FOR DETAILED REASONS RECORDED IN THE SAID ORDER 89 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 DATED 26.09.2011 THE APPELLANT'S CLAIM WAS REJECTED . MOREOVER, THE CLAIM OF THE CASH WITHDRAWAL MADE FROM COSMOS BANK, BANGALORE TO EXPLAIN RS. 10.74 LACS WITHOUT ESTABLISHING ANY NEXUS WITH THE WITHDRAWAL MADE IS DIFFICULT TO BE ACCEPTED. FURTHER THE AMOUNT OF RS. 74,000/- CLAIME D TO BE BELONGING TO THE APPELLANT AND HIS FAMILY MEMBERS, IT IS SEEN THAT D URING THE SEARCH ACTION MORE THAN RS. 1 LAC WAS NOT SEIZED AS THE TOTAL AMOUNT F OUND WAS RS.29,02,670/- AND THE SEIZED AMOUNT WAS RS.28 LACS OUT OF THE ABOVE A MOUNT, WHICH GOES ON TO EXPLAIN THE SAID AMOUNT. THE LAW IS WELL SETTLED T HAT THE ONUS OF PROVIDING THE SOURCE OF A SUM OF MONEY FOUND IS ON THE APPELLANT AND THE APPELLANT DID NOT DISPUTE THE LIABILITY TO TAX DURING THE COURSE OF S EARCH ACTION AND HENCE IN THE ABSENCE OF THE SAME THE ASSESSING OFFICER HAS RIGHT LY HELD IT AS UNDISCLOSED AND UNEXPLAINED INCOME. 7.2 IN VIEW OF THE ABOVE FACTS THE GROUND OF APPEAL NO.5 RAISED BY THE APPELLANT IS LIABLE TO BE DISMISSED. 77. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US. 78. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE P APER BOOK FILED ON BEHALF OF THE ASSESSEE. ADMITTEDLY, DURING THE COU RSE OF SEARCH AT THE PREMISES OF THE ASSESSEE AN AMOUNT OF R S.29,02,670/- WAS FOUND OUT OF WHICH AN AMOUNT OF RS. 28 LAKHS WAS SEIZ ED AND THEREAFTER ANOTHER RS.5 LAKHS WAS SEIZED FROM THE LOCKER MAINTAINED WITH PUNE PEOPLES COOPERATIVE BANK LTD. IT IS ALSO AN A DMITTED FACT THAT DURING THE COURSE OF SEARCH ACTION ASSESSEE COULD NOT EXPLAIN THE SOURCE OF THE CASH FOUND AND MERELY SUBMITTED THAT IT WILL BE EXPLAINED LATER ON AFTER VERIFYING THE BOOKS. WE FIND DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS SUBMITTED BEFORE THE ASSESSING OFFICER THAT CASH AMOUNTING TO RS.22 LAKHS WAS THE CASH BALANCE ENTRUSTED TO HIM BY SADGURU DATTA DHARMESH CH ARITABLE TRUST TO BE DEPOSITED IN ITS ACCOUNT AT PUNE PEOPLES C OOPERATIVE BANK LTD. IT WAS EXPLAINED THAT THE ASSESSEE WAS INCHAR GE OFFICER OF THE SAID TRUST. WE FIND ALTHOUGH THE SEARCH TOOK PLACE O N 20-01-2010 THE TRUST MADE A REQUEST TO THE CIT CENT RAL, PUNE VIDE LETTER DATED 19-08-2011 REQUESTING TO RELEASE OF THE SE IZED AMOUNT. 90 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 THE LD.CIT REJECTED THE CLAIM OF THE ASSESSEE TRUST ON THE GROUND THAT THE SAME WAS AN AFTERTHOUGHT SINCE NO EXPLANATIO N WAS FURNISHED DURING 132(4) STATEMENT. NOTHING PLAUSIBLE WAS BROUGHT TO OUR NOTICE TO SUBSTANTIATE WITH THE SOURCE OF RS.33 LAKHS SO AS TO TAKE A CONTRARY VIEW THAN THE VIEW TAKEN BY THE CIT(A). THE ASSESSEE IN OUR OPINION HAS MISERABLY FAILED TO SUBSTANTIATE WITH COG ENT EVIDENCE THAT THE AMOUNT OF RS.22 LAKHS BELONG TO THE TR UST AND THE AMOUNT OF RS.10,24,000/- DRAWN FROM THE COSMOS BANK ACCOUNT WAS AVAILABLE WITH HIM. SIMILARLY, NOTHING WAS BROUGHT TO OUR NOT ICE TO SUBSTANTIATE THE AVAILABILITY OF RS.74,000/- WITH THE ASSESSE E AND HIS FAMILY MEMBERS. WE FIND THE LD.CIT(A) HAS GIVEN VALID AND COGE NT REASONS WHILE DISMISSING THE GROUND RAISED BY THE ASSESSE E ON THIS ISSUE. UNDER THESE CIRCUMSTANCES AND IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT TO OUR NOTICE, WE DO NOT FIND ANY INFIRMI TY IN HIS ORDER ON THIS ISSUE. ACCORDINGLY, THE SAME IS UPHELD AND THE GROUND RAISED BY THE ASSESSEE IS DISMISSED. 79. GROUNDS OF APPEAL NO. 3 AND 4 BEING GENERAL IN NATURE ARE DISMISSED. ITA NO.1307/PN/2013 (A.Y.2010-11) (BY REVENUE): 80. GROUND OF APPEAL NO.1 BY THE ASSESSEE READS AS UNDER : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE CIT(A) HAS ERRED IN DELETING THE ADDITION MADE TO INCOME FROM HOUSE PROPERTY (NEAR MAHABALESHWAR) AT RS.1,80,000/- AS AGAINST RS.25,0 00/- DISCLOSED IN THE RETURN. 81. AFTER HEARING BOTH THE SIDES, WE FIND THE ABOVE GROUND IS IDENTICAL TO THE GROUND OF APPEAL NO.1 IN ITA NO.1306/PN/20 13 FOR A.Y. 2009-10. WE HAVE ALREADY DECIDED THE ISSUE AND THE G ROUND 91 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 RAISED BY THE REVENUE HAS BEEN DISMISSED. FOLLOWING THE S AME REASONINGS, THIS GROUND BY THE REVENUE IS DISMISSED. 82. GROUNDS OF APPEAL NO.2 TO 5 BY THE REVENUE READ AS UNDER : 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE CIT(A) HAS ERRED IN ALLOWING DEDUCTION U/S. 80IA(4) OF THE ACT IN RESPECT OF THE ASSESSEE PROJECT 'SAI TRINITY' IGNORING THE FACT THAT T HE ASSESSEE ADMITTED TO WITHDRAWN THE CLAIM DURING SEARCH ACTION. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE TH E CIT(A) HAS ERRED IN ALLOWING DEDUCTION U/S. 80IA(4) ALTHOUGH ASSE SSEE HAS NOT FULFILLED THE PRECONDITIONS FOR CLAIMING DEDUCTION U NDER INDUSTRIAL PARK SCHEME 2002. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE TH E CIT(A) HAS ERRED IN ALLOWING DEDUCTION U/S. 80IA(4) ALTHOUGH TH E IPS 2002 SCHEME TALKS ABOUT INDUSTRIAL PARK AS A WHOLE NOT INDUSTRIAL U NITS. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE TH E CIT(A) HAS ERRED IN ALLOWING DEDUCTION U/S. 80IA(4) ALTHOUGH AP PLICATION FOR APPROVAL WAS FILED AFTER 31.3.2006, WHICH IS BEYOND T HE TIME LIMIT AND NO FRESH APPROVAL WAS TAKEN AFTER REJECTION OF ASSESSEE'S CLA IM AS THE PROJECT WAS NOT COMMENCED WITHIN STIPULATED TIME. 83. AFTER HEARING BOTH THE SIDES, WE FIND THE ABOVE GROUND S ARE IDENTICAL TO THE GROUNDS OF APPEAL NO. 2 TO 5 IN ITA NO.1306/PN/2013 FOR A.Y. 2009-10. WE HAVE ALREADY DECIDED THE ISSUE AND THE GROUNDS RAISED BY THE REVENUE HAVE BEEN DISMISSED. FOLLOWING THE SAME REASONINGS, THE ABOVE GROUNDS BY THE REVENUE AR E DISMISSED. 84. IN THE RESULT, THE APPEALS FILED BY THE ASSESSEE ARE P ARTLY ALLOWED AND THE APPEALS FILED BY THE REVENUE ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 25-11-2016. SD/- SD/- (VIKAS AWASTHY) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE; ' DATED : 25 TH NOVEMBER, 2016. 92 ITA NO.1311, 1313,1315 TO 1317 & 1306 & 1307/PN/2013 ( )'+ , / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. THE CIT(A) - I I , PUNE THE CIT- II, PUNE 5. $ ''( , ( , / DR, ITAT, A PUNE; 6 . + / GUARD FILE. / BY ORDER, // $ ' //TRUE COPY // -. ' ( / SR. PRIVATE SECRETARY ( , / ITAT, PUNE
Other Referred Cases
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Laws Referred To
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1:1 Consultation on SME Listing
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1:1 Consultation on Business Valuations
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Consultation on Entity Formation
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Contractor Indemnity Agreement
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Startup Valuation Certificate
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