DCIT Cir. 1(2), Pune V. Shri Sambhaji Patil, Pune

ITA 132/PUN/2004

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2881 (ITAT-PUNE)
• Duration Of Justice: 11 year(s) 11 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 21-07-2015
• Assessment Year: misc
• Appeal Filed On: 22-01-2004
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S K RASTOGI
• Keywords: Unexplained cash credit; Business income; Search and seizure; Salary income; Loose papers; Document seized; Principle of natural justice; Peak credit; Cost of acquisition; Reasonable cause; Block assessment; Documents seized
• Section: 131; 68; 132

Judgement Text

] IQ.KS ] IQ.KS ] IQ.KS ] IQ.KS IQ.KS IQ.KSIQ.KS IQ.KS IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE . . , , ! ' BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.133/PN/2004 BLOCK PERIOD : 1989-90 AND 1999-2000 SHRI SAMBHAJI PATIL, S.NO.89/90, SHIVRAJ CHS, PARAMHANS NAGAR, KOTHRUD, PUNE 411 038 PAN NO.AAUPP 2736J . / APPELLANT V/S JCIT, SPECIAL RANGE-5, PUNE . / RESPONDENT . / ITA NO.132/PN/2004 BLOCK PERIOD : 1989-90 AND 1999-2000 DY.CIT, CIRCLE-1(2), PUNE . / APPELLANT V/S SHRI SAMBHAJI PATIL, S.NO.89/90, SHIVRAJ CHS, PARAMHANS NAGAR, KOTHRUD, PUNE 411 038 PAN NO.AAUPP 2736J . / RESPONDENT / ASSESSEE BY : SHRI M.K.KULKARNI / RESPONDENT BY : SHRI S.K. RASTOGI, CIT / DATE OF HEARING :16.11.2015 / DATE OF PRONOUNCEMENT:15.01.2016 2 ITA NOS.132 & 133/PN/2004 / ORDER PER R.K. PANDA, AM : THESE ARE CROSS APPEALS. THE FIRST ONE IS FILED BY THE A SSESSEE AND THE SECOND ONE FILED BY THE REVENUE AND ARE DIRECTE D AGAINST THE ORDER DATED 03-10-2003 OF THE CIT(A)-I, PUNE RELATIN G TO THE BLOCK PERIOD 1989-1990 TO 1999-2000. 2. THIS APPEAL WAS EARLIER DISMISSED BY THE TRIBUNAL FOR N ON- PROSECUTION. SUBSEQUENTLY, THE TRIBUNAL VIDE M.A.NO.87/PN/2 004 ORDER DATED 18-05-2007 RECALLED ITS EARLIER ORDER. HENC E, THIS IS A RECALLED MATTER. 3. FACTS OF THE CASE, IN BRIEF ARE THAT THE ASSESSEE IS A N INDIVIDUAL AND IS ENGAGED IN THE BUSINESS AS A CABLE OPERAT OR AND LAND DEVELOPER. A SEARCH ACTION U/S.132 OF THE I.T. ACT WA S CONDUCTED ON 16-02-1999 AT THE RESIDENTIAL AND BUSINESS PREMISES OF THE ASSESSEE. DURING THE SAID SEARCH ACTION, CASH OF R S.9,000/- WAS FOUND IN THE PREMISES OF THE ASSESSEE. CERTAIN DOCUMENTS/LOOSE PAPERS WERE ALSO FOUND AND SEIZED IN THE COURSE OF THE SAID SEARCH AND SEIZURE ACTION. THE AO ISSUED NOTICE U/S.158BC TO THE ASSESSEE ON 15-09-1999. SINCE THE AS SESSEE DID NOT FILE THE RETURN OF INCOME, HE WAS ISSUED A QUESTIONNAIRE ALONG WITH REMINDER FOR FILING THE RETURN ON 03-10-2000. SUBSEQU ENTLY, THE AO ISSUED A NOTICE U/S.142(1) TO THE ASSESSEE ON 03- 10-2000 ALONG WITH A DETAILED QUESTIONNAIRE VIDE LETTER DATED 03-10 -2000. THE ASSESSEE THEREAFTER FILED HIS RETURN OF INCOME FOR THE BLOCK PERIOD IN FORM 2B ON 08-12-2000 BY DISCLOSING RS.12 LAKHS AS UNDISCLOSED INCOME FOR THE BLOCK PERIOD. A NOTICE U/S.143( 2) WAS 3 ITA NOS.132 & 133/PN/2004 ISSUED TO THE ASSESSEE ON 29-01-2001. THE ASSESSEE IN RESPONSE TO THE SAID NOTICE APPEARED BEFORE THE AO AND FILED CERTAIN DETAILS. 4. THE AO NOTED THAT THE ASSESSEE IS AN INDIVIDUAL AND R UNNING A CABLE NETWORK AT KOTHRUD, PUNE IN THE NAME OF THE FOLLOWIN G CONCERNS : 1. M/S. SNEHAL COMMUNITATIONS (PROP. OF HIS WIFE SMT. SHAILAJA PATIL. 2. SNEHAL CABLE COMMUNICATIONS PVT. LTD. (WHEREIN TH E ASSESSEE IS THE CHAIRMAN HE NOTED THAT THE ASSESSEE IS ALSO HAVING TWO PROPRIETA RY CONCERNS IN THE NAME OF M/S. SHIVRAJ DEVELOPERS AND M/S. GROUP AS SOCIATES. IN THESE CONCERNS THE ASSESSEE HAS CARRIED OUT SOME MINOR CONTRACT WORKS FOR WHICH SOME INCOME HAS BEEN DISCLOSED IN THE REG ULAR RETURN FILED. THE ASSESSEE IS ALSO TRANSACTING IN LAND AT S URVEY NO.100/3 AND S.NO.100/5/1, CHANDNI CHOWK, KOTHRUD, PUNE. IN THE INITIAL YEARS OF THE BLOCK PERIOD, THE ASSESSEE WAS EMP LOYED WITH TELCO AS AN ELECTRICIAN AND WAS DERIVING SALARY INCOME THER E FROM. THE ASSESSEE IS THE DRIVING FORCE BEHIND THE AFORESAID CABLE NETWORK S AND HAS IMPLEMENTED FIBRE OPTIC NETWORK PROJECT. THE ASS ESSEE IS ALSO THE CHAIRMAN IN A COOPERATIVE SOCIETY IN THE NAME OF SHIVRAJ NAGARI PAT SANSTHA WHICH PROMOTES SAVINGS AMONG ITS MEMBERS. 5. THE AO NOTED THAT DURING THE COURSE OF SEARCH AND SEIZURE OPERATION NO BOOKS OF ACCOUNT OF THE ASSESSEES CONCER NS WERE FOUND. IT WAS NOTICED THAT THE ASSESSEE WAS NOT MAINTA INING REGULAR BOOKS OF ACCOUNT. THE STATEMENT OF THE ASSESSEE WAS R ECORDED DURING THE COURSE OF SEARCH U/S.132(4) ON 16-02-1999. IN REPLY TO QUESTION NO.8 THE ASSESSEE HAD STATED THAT BOOKS OF AC COUNT WERE BEING MAINTAINED ON THE COMPUTER LYING AT HIS OFFICE PREMISE S. WHEN IN QUESTION NO.9 IT WAS CONFRONTED THAT NO SUCH BOO KS OF 4 ITA NOS.132 & 133/PN/2004 ACCOUNT ARE BEING MAINTAINED ON A REGULAR BASIS AND NEITH ER ANYTHING IN THE FORM OF BACK UP NOR PRINT-OUTS WERE FOUND , THE ASSESSEE HAD REPLIED THAT THE BOOKS OF ACCOUNTS ARE DE FINITELY BEING MAINTAINED AND HE COULD BE ABLE TO SHOW THEM IN HIS OFFICE. THE ASSESSEE WAS EXAMINED AND HIS STATEMENT WAS RECORDED U/S.132(4) ON THE NEXT DAY AT HIS OFFICE PREMISES ON 17-02-1999. HE WAS AGAIN ASKED THAT NO BOOKS OF ACCOUNTS ARE FOUND ALTHOUGH AUD IT REPORTS IN THE CASE OF M/S. SNEHAL COMMUNICATIONS AND M/S. SNAHAL CAB LE COMMUNICATION PVT. LTD. WERE FILED ALONG WITH RETURNS OF INCOM E. THE ASSESSEE IN HIS REPLY TO QUESTION NO.14 HAD SUBMITTE D THAT HE HAD NOT MAINTAINED ANY BOOKS OF ACCOUNTS FOR THE TRANS ACTIONS RELATING TO PURCHASE AND SALE OF LAND AT CHANDNI CHOWK, KO THRUD. AGAIN IN HIS REPLY TO QUESTION NO.23 IN THE STATEMENT REC ORDED U/S.132(4) ON 18-02-1999 AT HIS OFFICE PREMISES THE ASSESSE E REPLIED THAT THE BOOKS OF ACCOUNT HAD NOT BEEN FOUND AT HIS RE SIDENCE OR HIS BUSINESS PREMISES. HE HAD ALSO ENQUIRED WITH HIS AUDITORS WHO HAD ADMITTED THAT BOOKS WERE NOT WITH THEM. SINCE HE WAS U NABLE TO PRODUCE THE BOOKS OF ACCOUNT AND WAS NOT AWARE AS TO WHERE THE BOOKS OF ACCOUNTS ARE LYING, THE ASSESSEE IN HIS REPLY T O QUESTION NO.24 STATED THAT THE RETURNS FILED FOR VARIOUS ASSESSMEN T YEARS WERE DONE BY TAKING DATA DIRECTLY FROM THE COMPUTER IN WHICH ALL DATA IN ITS REGULAR COURSE WAS BEING FED. 6. THE ASSESSEE IN HIS SUBSEQUENT REPLY IN THE STATEME NT RECORDED U/S.132(4) ON 26-02-1999 EXPRESSED HIS INABILITY T O PRODUCE THE BOOKS OF ACCOUNTS FOR SNEHAL COMMUNICATIONS AND IN HIS INDIVIDUAL CASE AS WELL. 5 ITA NOS.132 & 133/PN/2004 7. SINCE THE ASSESSEE WAS UNABLE TO PRODUCE THE BOOKS OF ACCOUNT AND THE BOOKS OF ACCOUNT WERE NOT FOUND DURING THE COURSE OF SEARCH THE AO ANALYSED THE VARIOUS DOCUMENTS SEIZED FROM THE PREMISES OF THE ASSESSEE DURING THE COURSE OF SEARCH. A FTER CONSIDERING THE EXPLANATIONS GIVEN BY THE ASSESSEE FROM T IME TO TIME, THE AO DETERMINED THE UNDISCLOSED INCOME OF THE ASSE SSEE FOR THE BLOCK PERIOD AT RS.1,08,82,364/- BEING UNEXPLAINED CASH LOANS, UNEXPLAINED BUSINESS INCOME ON PURCHASE AND SALE OF LAND, UNEXPLAINED CASH CREDITS AND UNEXPLAINED TRANSACTIONS FOR VARIOUS ASSESSMENT YEARS OF THE BLOCK PERIOD. 8. IN APPEAL THE LD.CIT(A), BASED ON THE ARGUMENTS ADVA NCED BY THE ASSESSEE, GAVE PART RELIEF TO THE ASSESSEE. 9. AGGRIEVED WITH SUCH PART RELIEF BY THE CIT(A) THE ASSES SEE AS WELL AS THE REVENUE ARE IN APPEAL BEFORE US. GROUNDS BY ASSESSEE : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD.CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE BLOCK A SSESSMENT IN VIEW OF THE FACT THAT THE ASSESSMENT WAS NOT FRAMED AS PER THE PROVISIONS OF CH.XIVB, THE NOTICE U/S.158-BC(C) HAVING NOT PROPERL Y SERVED, AND THEREFORE, THE WHOLE ASSESSMENT WAS VITIATED IN LAW, CON SIDERING THE JUDICIAL VERDICTS PRONOUNCED SO FAR ELABORATING THE L EGAL POSITION. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AN D IN LAW THE LD.CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE SALE OF LAND TRANSACTIONS AS BUSINESS INCOME AS AGAINST THE CLAIM OF THE ASSESSEE BEIN G THAT OF LONG TERM CAPITAL GAIN AND ENHANCING SUCH BUSINESS IN COME BY RS.4,75,000/-, TREATING AS ON MONEY RECEIVED ON SUCH SALE TRANSACTIONS AS BUSINESS INCOME. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AN D IN LAW IN ANY CASE SALE OF LAND TRANSACTIONS BEING DISCLOSED COU LD NOT BE CONSIDERED AS UNDISCLOSED INCOME FOR THE PURPOSES OF B LOCK ASSESSMENT UNDER CHAPTER XIV-B OF THE ACT. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AN D IN LAW AND ALTERNATIVELY THE LD.CIT(A) OUGHT TO HAVE ACCEPTED THE INCOME WORKED OUT BY THE ASSESSEE OF RS.9,66,232.24 ON THE BASIS OF DOCU MENTARY EVIDENCE WITHOUT ENHANCING THE SAME OF RS.4,75,000/-. 6 ITA NOS.132 & 133/PN/2004 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AN D IN LAW THE LD.CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ASSESSMENT OF UNDISCLOSED INCOME OF RS.1,01,506/- AGAINST MADE BY A.O. OF RS.1, 71,561/- ON ACCOUNT OF LOAN TAKEN ON PLEDGING GOLD ORNAMENTS OF THE WIFE OF THE ASSESSEE AND LD.CIT(A) OUGHT TO HAVE DELETED THE ENTIRE ADDITION OF RS.1,71,561/-. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AN D IN LAW THE LD.CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITIO N OF RS.15,50,000/- OUT OF TOTAL ADDITION MADE BY THE A.O. OF RS.20,50,0 00/- BY TREATING THEM AS LOANS TAKEN ON THE STRENGTH OF BLANK CHEQUES ISSU ED AND SEIZED IN SEARCH ACTION. IN VIEW OF PROPER EXPLANATION OFF ERED THE LD.CIT(A) OUGHT TO HAVE DELETED THE ENTIRE ADDITION OF RS.20,5 0,000/- FROM THE BLOCK ASSESSMENT. 7. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AN D IN LAW AND ON READING THE ENTIRE BLOCK ASSESSMENT IT TRANSPIRES THA T THERE IS DOUBLE ADDITION OF RS.12,00,000/- AND ONE SINGLE ADDITION OF RS.12,00,000/- BE DELETED. 8. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AN D IN LAW THE ASSESSEE DENIES HIS LIABILITY TO PAY INTEREST U/S.158BFA(1) OF THE ACT AND SAME BE DELETED. 9. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AN D IN LAW NO SURCHARGE IS LEVIABLE U/S.113 AND IT BE HELD ACCORDING LY. 10. THE APPELLANT CRAVES TO LEAVE, ADD/AMEND OR ALT ER ANY OF THE ABOVE GROUNDS OF APPEAL. 10. THE ASSESSEE HAS ALSO TAKEN THE FOLLOWING ADDITIONAL GROUND : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE BLOCK ASSESSMENT IS VITIATED IN LAW INASMUCH AS THE STATUTORY AND MANDATORY NOTICE U/S.143(2) WAS NOT SERVED IN ACCORDANCE WITH TH E PROVISO TO THAT SECTION BUT THE SAID NOTICE WAS SERVED PRIOR TO THE FIL ING OF THE RETURN IN F.2B. THE LOWER AUTHORITIES HAVE NOT HELD THE SAID RETURN INVALID. SINCE THE PROVISIONS OF PROVISO TO S.143(2) HAVE BEEN VIOLAT ED THE RESULTANT ASSESSMENT IS BAD IN LAW, WITHOUT JURISDICTION AND BE CAN CELLED. 11. THE LD. COUNSEL FOR THE ASSESSEE REFERRING TO THE AD DITIONAL 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 CORPORA TION OF INDIA LTD. REPORTED IN 187 ITR 688 AND THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF AHMEDABAD ELECTRICITY COMPANY R EPORTED 7 ITA NOS.132 & 133/PN/2004 IN 199 ITR 351 HE SUBMITTED THAT THE ADDITIONAL GROUND R AISED BY THE ASSESSEE SHOULD BE ADMITTED. 12. AFTER CONSIDERING THE ARGUMENTS ADVANCED BY BOTH T HE SIDES AND IN THE LIGHT OF THE DECISIONS CITED ABOVE, THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS ADMITTED FOR ADJUDICATION. 13. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET DID NOT PRESS GROUNDS OF APPEAL NO.7 AND 8 FOR WHICH THE LD. DEPARTMENT AL REPRESENTATIVE HAS NO OBJECTION. ACCORDINGLY, THE ABOVE 2 GROUNDS ARE DISMISSED AS NOT PRESSED. 14. IN GROUND OF APPEAL NO.1 THE ASSESSEE HAS CHALLENGED THE VALIDITY OF THE ASSESSMENT ON THE GROUND THAT THE NOTICE U/S.158BC(C) HAS NOT BEEN PROPERLY SERVED. 15. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE NOTICE U/S.158BC(C) ISSUED ON 15-09-1999 WAS NOT SENT THROUGH REGISTERED POST. FURTHER, NOTICE U/S.143(2) WAS ALSO ISSUED PRIOR TO THE FILING OF THE RETURN. REFERRING TO THE DECISION OF CHENNA I BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS. LAXMI INDUSTRIES AN D VICE VERSA REPORTED IN 7 ITR 495 HE SUBMITTED THAT THE TRIB UNAL IN THE SAID DECISION HAS HELD THAT NOTICE U/S.158BC IS NOT A MERE PROCEDURE. THE AO ACQUIRES JURISDICTION TO INITIATE BLOCK ASSESSMENT ONLY ON ISSUE OF NOTICE AND THE SAID NOTICE H AS TO BE ISSUED BY REGISTERED POST WITH ACKNOWLEDGEMENT DUE. SINC E IN THE INSTANT CASE THE NOTICE WAS NOT ISSUED BY REGISTERED PO ST WITH ACKNOWLEDGEMENT DUE, THEREFORE, THE ENTIRE ASSESSMENT P ROCEEDINGS BECOME VOID AB-INITIO. 8 ITA NOS.132 & 133/PN/2004 16. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND REFERRING TO THE ORDER OF CIT(A) SUBMITTED THAT THE NOTICE IN THE INSTANT CASE HAS BEEN ISSUED THROUGH RPAD. IT WAS DUL Y SERVED ON THE ASSESSEE. AFTER RECEIPT OF THE NOTICE THE ASSESSEE FILED HIS BLOCK RETURN. THEREFORE, NOW HE CANNOT CHALLENGE THE VALIDITY OF THE NOTICE ISSUED U/S.158BC(C). 17. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOT H THE SIDES, PERUSED THE ORDERS OF THE AO AND THE CIT(A) AND T HE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSI DERED THE VARIOUS DECISIONS CITED BEFORE US. THE GRIEVANCE OF THE AS SESSEE IN THE GROUND IS REGARDING VALIDITY OF THE ASSESSMENT PROCEE DINGS IN ABSENCE OF ISSUE OF NOTICE THROUGH RPAD WITH ACKNOWLEDGE MENT DUE. THE CIT(A) HAD GIVEN A CATEGORICAL FINDING THAT THE NO TICE U/S.158BC WAS ISSUED ON 15-09-1999 AND SERVED ON THE ASSESSEE BY REGISTERED POST SENT ON 21-09-1999. IT IS ADDRESSE D TO SHRI SAMBHAJI S. PATIL AS PROPRIETOR OF A CONCERN AND THUS IS IN HIS INDIVIDUAL CAPACITY. AS PER THE SAID NOTICE, THE RETURN OF IN COME WAS TO BE FILED WITHIN 16 DAYS OF THE SERVICE OF THE NOTICE AND THE BLOCK PERIOD MENTIONED IS UPTO 16-02-1999. IN RESPONSE TO THE SAID NOT ICE THE ASSESSEE, IN HIS INDIVIDUAL CAPACITY, HAD FILED A RETURN IN FORM 2B ON 08-12-2000. THUS, THE CIT(A) HAS HELD THAT THE AS SESSEE HAS NOT ONLY DULY RECEIVED THE NOTICE BUT HAS ALSO FILED RETU RN OF UNDISCLOSED INCOME FOR THE RELEVANT BLOCK PERIOD ALTHOUGH T HE SAME WAS BEYOND THE TIME GIVEN IN THE NOTICE U/S.158BC. IN VIE W OF THE ABOVE, HE HELD THAT THE STAND TAKEN BY THE ASSESSEE A BOUT THE CRITERIA OF THE NOTICE U/S.158BC IS NOT ACCEPTABLE. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) ON THIS ISSUE. ONCE THE ASSESSEE HAS BEEN SERVED THE NOTICE AND IN COMPLIANCE T O THE SAME 9 ITA NOS.132 & 133/PN/2004 THE ASSESSEE HAS RESPONDED BY FILING THE RETURN, NOW HE CANNOT TAKE A GROUND THAT THE SERVICE OF NOTICE IS IMPROPER. FURTHE R, THE LD. COUNSEL FOR THE ASSESSEE COULD NOT PROVE THAT THE NOTIC E WAS NOT SERVED BY REGISTERED POST, A FINDING GIVEN BY THE CIT(A). H E HAS NOT ADDRESSED AS TO IN WHICH MANNER THE NOTICE WAS SERVED OTHERWISE THAN BY REGISTERED POST. IN VIEW OF THE ABOVE, THE VARIO US DECISIONS RELIED ON BY THE LD. COUNSEL FOR THE ASSESSEE ARE NOT A PPLICABLE TO THE FACTS OF THE PRESENT CASE. ACCORDINGLY, THE FIRST GRO UND RAISED BY THE ASSESSEE IS DISMISSED. 18. IN GROUNDS OF APPEAL NO. 2 TO 4 THE ASSESSEE HAS C HALLENGED THE ORDER OF THE CIT(A) IN CONFIRMING THE TRANSACTION AND S ALE OF LAND AS BUSINESS INCOME AS AGAINST LONG TERM CAPITAL GAIN CLAIMED BY THE ASSESSEE AND ENHANCING THE BUSINESS INCOME BY RS.4,75,00 0/- ON ACCOUNT OF ON-MONEY RECEIVED. 19. FACTS OF THE CASE, IN BRIEF, ARE THAT DURING THE COURS E OF ASSESSMENT PROCEEDINGS CERTAIN DOCUMENTS WERE SEIZED FR OM THE PREMISES OF THE ASSESSEE ACCORDING TO WHICH THE ASSESSE E HAD PURCHASED THE LAND AT SURVEY NO. 100/3 AND 100/5/1, CH ANDNI CHOWK, KOTHRUD, PUNE FROM THE KUMBRE FAMILY ADMEASURING 3 H 50 RS DURING F.Y. 1988-89 FOR A TOTAL RECORDED CONSIDERATION OF RS.20,40,000/-. THE PAYMENT FOR THIS LAND HAVE BEEN MADE IN CASH, BY CHEQUE AND BY WAY OF EXPENDITURE OF BUILDING BUILT FOR KU MBRE FAMILY. THE AO HAS ANALYSED THE YEAR-WISE BREAK UP OF PAYMENTS AT PARA 4 PAGE 13 AND 14 OF THE ORDER. OUT OF THE AFORESA ID LAND THE ASSESSEE HAS SOLD A PART OF THE LAND DURING F.Y. 1993-94 AND HAS SHOWN LONG TERM CAPITAL LOSS DURING 1994-95 AND 1995-96 WHILE HE HAS DECLARED LONG TERM CAPITAL GAIN DURING 1996-97 AND 19 97-98. THE TRANSACTION IN SALE AND PURCHASE OF THE PLOT OF LAND W ERE NOT 10 ITA NOS.132 & 133/PN/2004 DISCLOSED BY THE ASSESSEE IN HIS REGULAR RETURNS OF INCOME . THE AO CONSIDERED THE VARIOUS ASPECTS OF THE SALE AND PURCHASE TRANSACTIONS AND HELD THAT THE TRANSACTION OF SALE AND PURCHASE OF THOSE LAND IS REQUIRED TO BE CONSIDERED AS BUSINESS INCOM E AND NOT CAPITAL GAIN AS DECLARED BY THE ASSESSEE. SINCE THE ASSE SSEE WAS NOT MAINTAINING ANY REGULAR BOOKS OF ACCOUNT THE AO PASSED T HE ASSESSMENT ORDER ON THE BASIS OF STATEMENT RECORDED D URING THE SEARCH PROCEEDINGS U/S.132(4) AND THE STATEMENT RECORDE D FROM THE ASSESSEE U/S.131. THE AO ACCORDINGLY MADE ADDITION OF RS.27,31,000/- TO THE TOTAL INCOME OF THE ASSESSEE FOR T HE BLOCK PERIOD, (I.E. RS.15,57,000/- FOR A.Y. 2004-05 & RS.11,74,000 FOR A.Y . 1998-99). 20. IN APPEAL THE LD.CIT(A) GAVE CERTAIN RELIEF TO THE ASSE SSEE AND SUSTAINED ADDITION OF RS.4,75,000/- WHICH ARE UNRECORDED BY OBSERVING AS UNDER : 10.3 I HAVE GONE THROUGH THE STATEMENT ON OATH OF T HE APPELLANT U/S.132(4) AND U/S. 131 AS WELL AS PERUSED THE SEIZED PAP ERS WHICH WERE PRODUCED BEFORE ME BY THE ASSESSING OFFICER AND CO PIES OF WHICH ALONG WITH EXPLANATION HAVE BEEN SUBMITTED BY THE AP PELLANT AS WELL. COPIES OF THE EXPLANATION OF THE APPELLANT ALONG WIT H PHOTOCOPIES OF THE RELEVANT SEIZED PAPERS IS GIVEN IN ANNEXURE-3 TO THIS APPELLATE ORDER. AFTER GOING THROUGH ALL THIS INFORMATION ON RECORD, I HAVE TO HOLD THAT THE DECISION ARRIVED AT BY THE ASSESSING OFFICER IN THIS REGARD IS NOT BASED ON PROPER APPRECIATION OF THE FACTS AND THE EVI DENCE AVAILABLE. INFACT, THERE IS NO CIRCUMSTANTIAL EVIDENCE AVAILABLE ON RECORD AND NO ATTEMPT WHATSOEVER HAS BEEN MADE BY THE ASSESSING OFFICE R TO GATHER ANY EVIDENCE FROM MR.JUGAL SONI, MR.SHRIRAM SONI OR KUMBRES OR ANY OTHER PERSON WHO IS MENTIONED IN THE LOOSE PAPERS WHICH ARE BASICALLY ROUGH JOTTINGS ON SMALL PIECES OF PAPERS AND DO NOT LEA D US TO THE TYPE OF CONCLUSION ARRIVED AT BY THE APPELLANT SPECIALLY I N THE LIGHT OF THE DETAILED EXPLANATION GIVEN BY THE APPELLANT. 10.4 AT THIS STAGE ITSELF, IT WOULD ALSO BE RELEVANT TO POINT OUT THAT THE ASSESSING OFFICER HAS, IN THE COMPUTATION OF UNDISCLOSED I NCOME MADE CERTAIN APPARENT DOUBLE ADDITIONS AND THIS ASPECT HAS BEEN POINTED OUT BY THE APPELLANT IN THE SUBMISSION DATED 09.05.2003 A S UNDER: 'THERE IS ANOTHER ADDITION OF UNEXPLAINED CASH LOAN OF RS. 11,74,000/- (RS. 15,00,000- 3,26,000= 1174000/-) ON THE SAME SET OF FACTS WHICH IS CONTESTED IN GROUND OF APPEAL NO. 19. THIS AMOUNT OF RS. 15,0 0,000/- HAS ALREADY BEEN CONSIDERED BY THE A. O. WHEN HE MADE AN ADDITION OF RS. 20,50,000/- (RS. 15,50,000 + 5,00,000 = 20,50,000/-) ON THE SAME SET OF FACTS THAT IS SEIZU RE OF BLANK CHEQUES. ONCE HE MAKES AN ADDITION OF RS. 20, 50,000/- WHERE THERE IS 11 ITA NOS.132 & 133/PN/2004 THE NEED TO MAKE ADDITION OF RS. 11,74,000/- (15,00 ,000-3,26,000= 11,74,000/-) AS UNDISCLOSED INCOME . THE ASSESSEE CONTENDS THAT IN THE ABSENCE OF ANY IN DEPENDENT EVIDENCE IN THE CIRCUMSTANCES WHEN THE ADMISSION WAS BACKTRACKED TH E A. O. WAS NOT JUSTIFIED IN MAKING AN ADDITION OF RS. 20,50,000/- AS UNDISCL OSED INCOME. BUT THIS ONCE HE MAKES ON ADDITION OF RS. 20,50,000 /- THEN HIS ACTION OF MAKING ADDITION OF RS. 11, 74,000/- RESULTS INTO DO UBLE ADDITION. AT LEAST TO THAT EXTENT, ASSUMING BUT NOT ADMITTING , IS REQUIR ED TO BE MODIFIED' FROM PAGE 26 OF THE ASSESSMENT ORDER, IT IS ALSO CLEAR TH AT THE ASSESSING OFFICER HAS ADDED UNEXPLAINED CASH LOAN OF RS.15.57 LA CS IN A.Y. 1994-95 AND THEREAFTER UNEXPLAINED CASH LOAN OF RS.11.74 LACS IN A.Y.1998-99. SUCH DOUBLE ADDITIONS ARE EVIDENTLY REQUIRED TO BE C ONSIDERED ADEQUATELY AND THIS MATTER WILL BE DISCUSSED SPECIFICALL Y IN DIFFERENT GROUNDS OF APPEAL. 10.5 AT THIS STAGE, IT WOULD BE RELEVANT TO REFER TO GROUND NO.29 TAKEN BY THE APPELLANT. IT IS TRUE THAT IN ABSENCE OF ANY O THER MATERIAL AVAILABLE WITH THE DEPARTMENT, THE PURCHASE AND SALE TRANSACTION S ARE TO BE TREATED AS PER THE REGISTERED DOCUMENTS. WHILE THIS MAY HELP THE APPELLANT IN SO FAR AS THE PURCHASE OF PROPERTY IS CONC ERNED AS THE PAPER SEIZED AND REFERRED TO AT THE TIME OF STATEMENT U/S.13 2(4) COULD NOT BE CONSIDERED AS A REASONABLE PIECE OF EVIDENCE IN SUPPORT OF 'ON MONEY PAYMENT' EVIDENCE AGAINST THE APPELLANT FOR PURCHASE OF THE PROPERTY, IN SO FAR AS SALE OF PLOTS IS CONCERNED, THE STATEMENT ON OA TH OF THE APPELLANT, WHICH REFERS TO PERSONAL KNOWLEDGE OF THE APPELLANT AND HAS NOT BEEN REBUTTED BY THE APPELLANT AT LATER STAGE, T HE DETAILS OF UNRECORDED SALE HAS NOT BEEN RECEIVED BY THE APPELLAN T IS REQUIRED TO TAKEN OVER AND ABOVE THE RECORDED CONSIDERATION. IN THE STATEMENT ON OATH U/S. 132(4) DATED 17.02.1999, WHICH WAS RECORDED IN AN ELABORATE MANNER WHEREIN THE APPELLANT HAS ADMITTED THE TOTAL RECEIPTS FROM THE SALE OF PLOTS OF LAND OF RS.25,70,000/-, OUT OF WHICH THE FOLLOWING AMOUNTS ARE UNRECORDED: F.Y.1993-94 RS.1,80,000 F.Y.1994-95 RS. 20,000 F.Y.1995-96 RS.2,75,000 --------------- RS.4,75,000 --------------- THE APPELLANT ALSO ADMITTED THAT THESE MONEY HAS BEEN UTILIZED BY HIM FOR BUSINESS PURPOSES AND TO PAY BACK HIS OUTSTANDING LOAN S. IN THIS MANNER, WHILE THIS ADDITION OF RS.4,75,000/- IS REQU IRED TO BE MADE AS BUSINESS INCOME FROM THE LAND DETAILS, THE APPELLANT W OULD BE GIVEN A TELESCOPIC BENEFIT IN THE LIGHT OF UNEXPLAINED INVEST MENT IN REPAYMENT OF LOANS MADE AS WELL. ALL IN ALL, GROUND NO.29 IS ACC ORDINGLY ONLY PARTLY APPLICABLE IN FAVOUR OF THE APPELLANT AND AS SUCH WIT H THESE OBSERVATIONS NO FURTHER COMMENT IS REQUIRED TO BE MADE ON THE SAME. HOWEVER, THE ADDITION OF RS.15,57,000/- MADE AS UNREC ORDED CONSIDERATION IN PARA 3 OF THE ASSESSMENT ORDER AND THE ADDITION OF RS.11.74 LACS MADE IN PARA 3.1 OF THE ASSESSMENT ORDER AR E DIRECTED TO BE DELETED. 12 ITA NOS.132 & 133/PN/2004 21. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US. 22. AFTER HEARING THE RIVAL ARGUMENTS MADE BOTH THE SIDE S, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A). IT IS AN A DMITTED FACT THAT DURING THE COURSE OF SEARCH THE AUDITED BOOKS OF ACCOUNTS WERE NOT FOUND. THE ASSESSEE IN THE BLOCK RETURN DECLAR ED LONG TERM CAPITAL LOSS FOR FIRST 2 YEARS, I.E. A.YRS. 1994-95 AND 1995-9 6 WHEREAS FOR A.YRS. 1996-97 AND 1997-98 THE ASSESSEE DE CLARED LONG TERM CAPITAL GAIN. THE AO CONSIDERING THE CONTINUOUS PURCH ASE AND SALE OF LAND BY THE ASSESSEE TREATED THE SAME AS ADVEN TURE IN NATURE OF TRADE. THE LD.CIT(A) AFTER CONSIDERING THE FACTS OF THE C ASE AND ON PROPER APPRECIATION OF THE SEIZED DOCUMENTS VIS--VIS REP LY OF THE ASSESSEE FROM TIME TO TIME HAS ENHANCED THE INCOME OF TH E ASSESSEE BY RS.4,75,000/-. WE DO NOT FIND ANY INFIRMITY IN THE ORDER O F THE CIT(A) IN ABSENCE OF ANY MATERIAL BROUGHT TO OUR NOTICE T O TAKE A DIFFERENT VIEW. ACCORDINGLY, THE SAME IS UPHELD AND THE GRO UNDS RAISED BY THE ASSESSEE ON THIS ISSUE ARE DISMISSED. 23. GROUND OF APPEAL NO.9 BY THE ASSESSEE READS AS UNDER : ON THE FACTS AND IN THE CIRCUMSTANCFES OF THE CASE AND IN LAW NO SURCHARGE IS LEVIABLE UNDER SECTION 113 AND IT BE HELD ACCORDINGLY. 24. AFTER HEARING BOTH THE SIDES, WE FIND THE ABOVE ISSUE H AS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE LARGER BENCH OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. VATIK A TOWNSHIP PVT. LTD. REPORTED IN 109 DTR (SC) 33. IT HAS BE EN HELD THAT LEVY OF SURCHARGE U/S.113 AS PER AMENDMENT BY THE FINANCE ACT 2003 IS PROSPECTIVE IN NATURE AND NOT RETROSPECTIVE IN NATURE. 13 ITA NOS.132 & 133/PN/2004 ACCORDINGLY, WE HOLD THAT SURCHARGE IS NOT LEVIABLE. THE G ROUND RAISED BY THE ASSESSEE IS ACCORDINGLY ALLOWED. 25. GROUND OF APPEAL NO.10 BEING GENERAL IN NATURE IS DISMISSED. 26. SO FAR AS THE ADDITIONAL GROUND IS CONCERNED IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT SINCE THE NOTICE ISSUED U/S.143(2) IS PRIOR TO THE DATE OF FILING OF THE RETURN IN FORM 2B, THEREFORE, THE ENTIRE ASSESSMENT PROCEEDINGS IS BAD IN LAW. 27. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE SEARCH TOOK PLACE ON 16-02-1999 U/S.132 OF THE ACT AND THE NO TICE U/S.158BC(C) WAS ISSUED ON 15-09-1999. THE ASSESSEE FILED THE RETURN IN FORM 2B ON 08-12-2000 AND THE NOTICE U/S.142 (1) WAS ISSUED ON 03-10-2000. SUBSEQUENT TO THE ISSUE OF NOTICE U/S.142(1) THE AO ISSUED NOTICE U/S.143(2) ON 23-11-2000 WHICH IS BEFO RE FILING OF THE RETURN. RELYING ON VARIOUS DECISIONS HE SUBMITTE D THAT THE NOTICE U/S.158BC IS NOT A MERE PROCEDURE. THE AO ACQU IRES JURISDICTION TO INITIATE BLOCK ASSESSMENT ONLY ON ISSUE OF NOTICE. FAILURE TO COMPLY WITH THE PROVISIONS OF SECTION 143(2) CANN OT BE TAKEN LIGHTLY AND THE ACTION OF THE AO IN NOT COMPLYING W ITH THE SAID PROVISIONS CANNOT BE JUSTIFIED. HE FURTHER SUBMITTED THAT NOTICE WAS NOT ISSUED THROUGH RPAD. RELYING ON VARIOUS DECISIONS HE SUBMITTED THAT A NOTICE SENT UNDER CERTIFICATE OF POSTING AND NOT BY REGISTERED POST WOULD NOT AMOUNT TO PROPER SERVICE OF N OTICE. HE ACCORDINGLY SUBMITTED THAT SINCE THE NOTICE U/S.143(2) WAS ISSUED PRIOR TO THE FILING OF THE RETURN AND THE MANNER OF SERVIC E OF NOTICE WAS ALSO IMPROPER, THEREFORE, THE ENTIRE ASSESSMENT PRO CEEDINGS SHOULD BE HELD AS VOID AB-INITIO. 14 ITA NOS.132 & 133/PN/2004 28. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND SUBMITTED THAT AFTER THE ASSESSEE FILED THE RETURN IN FOR M 2B ON 08- 12-2000 THE AO ISSUED A FRESH NOTICE U/S.142(1)/143(2) REQU IRING THE ASESSEE FOR COMPLIANCE ON 18-12-2000. AGAIN THE NOT ICE U/S.142(1) WAS ISSUED ON 25-01-2001 AFTER HEARING TOOK PLA CE ON 05-01-2001. THEREFORE, THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE NOTICE WAS ISSUED PRIOR TO FILING OF THE RETURN IS INCORRECT BECAUSE AFTER FILING OF THE RETURN BY THE ASSESS EE THE AO HAS ISSUED FRESH NOTICE U/S.143(2). FURTHER, THE NOTICES U/S.142(1)/143(2) WERE DULY SERVED ON THE ASSESSEE AND T HEREAFTER THE ASSESSEE HAS PARTICIPATED IN THE ASSESSMENT PROCEE DINGS. THEREFORE, THE ADDITIONAL GROUND RAISED BY THE ASSESSEE H AS TO BE DISMISSED. 29. 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 A SEARCH ACTION U/S .132 OF THE I.T. WAS CONDUCTED ON 16-02-1999 AT THE RESIDENTIA L AND BUSINESS PREMISES OF THE ASSESSEE. THE NOTICE U/S.158BC(C) WAS ISSUED TO THE ASSESSEE ON 15-09-1999. SINCE THE ASSES SEE DID NOT FILE THE RETURN OF INCOME, HE WAS ISSUED A QUESTIONNAIRE ALO NG WITH REMINDER FOR FILING THE RETURN OF INCOME ON 03-10-2000. ALTHOUGH NO RETURN WAS FILED BY THE ASSESSEE, HOWEVER, THE AO ISSUED A NOTICE U/S.143(2) ON 23-11-2000. THE ASSESSEE THEREAFTER FILED TH E RETURN IN FORM 2B ON 08-12-2000. AFTER THE RETURN WAS FILED THE AO ISSUED A FRESH NOTICE U/S.143(2) ON 21-01-2001. THEREFORE, EVEN IF THE FIRST NOTICE U/S.143(2) WAS ISSUED PRIOR TO FILING OF THE RETURN, HOW EVER, IT IS A FACT THAT THE AO HAS ISSUED A FRESH NOTICE U/S.143(2 ) ON 29-01-2001 AFTER THE ASSESSEE FILED THE RETURN IN FORM 2 B ON 15 ITA NOS.132 & 133/PN/2004 08-12-2000. THEREFORE, THE ARGUMENT OF THE LD. COUNSEL FO R THE ASSESSEE THAT THE ASSESSMENT PROCEEDINGS SHOULD BE HE LD AS VOID AB-INITIO IN VIEW OF THE ISSUE OF NOTICE U/S.143(2) PRIOR TO TH E DATE OF FILING OF THE RETURN OF INCOME CANNOT BE ACCEPTED. THE AO HAS ISSUED THE NOTICE U/S.143(2) AFTER FILING OF THE RETURN IN FO RM 2B. THE VARIOUS DECISIONS RELIED ON BY THE LD. COUNSEL FOR THE ASSESSEE ARE THEREFORE NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. FIRST OF ALL, THE ASSESSSEE HAS NOT FILED THE RETURN WITHIN THE STAT UTORY PERIOD AFTER THE ISSUE OF NOTICE U/S.158BC. THE AO HAS ALSO ISSU ED A NOTICE U/S.143(2) AFTER THE ASSESSEE FILED THE RETURN IN F ORM 2B. THEREFORE, THE EARLIER NOTICE ISSUED U/S.143(2) MAY BE A PR OCEDURAL MISTAKE BY THE AO, HOWEVER, THE SAME CANNOT MAKE THE E NTIRE ASSESSMENT PROCEEDINGS INVALID SINCE A FRESH NOTICE U/S.143 (2) HAS BEEN ISSUED BY THE AO AFTER FILING OF THE RETURN IN FORM 2B BY THE ASSESSEE. THE NOTICE WAS DULY SERVED ON THE ASSESSEE AND THE ASSESSEE HAD PARTICIPATED IN THE ASSESSMENT PROCEEDINGS . THINGS WOULD HAVE BEEN DIFFERENT HAD THE AO NOT ISSUED A FRESH N OTICE U/S.143(2) AFTER THE RETURN WAS FILED. UNDER THESE CIRCUMST ANCES, THE VARIOUS DECISIONS RELIED ON BY THE LD. COUNSEL FOR THE ASSESSEE ARE NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE AND ARE DISTINGUISHABLE. IN VIEW OF THE PECULIAR FACTS AND CIRCUMSTAN CES OF THE PRESENT CASE THE ADDITIONAL GROUND RAISED BY THE AS SESSEE IS ACCORDINGLY DISMISSED. ITA NO.132/PN/2004 : 30. GROUND OF APPEAL NO.1 BY THE REVENUE READS AS UNDER : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) ERRED IN ADMITTING THE APPEAL FOR THE SECOND TIME WI THOUT APPRECIATING THE FACT THAT THE ASSESSEE HAD FILED THE BLOCK RETURN ON 08-12-2000 AND HAD DELAYED PAYMENT OF UNDISPUTED TAX LIABILITY BY M ORE THAN 2 YEARS WITHOUT ANY REASONABLE CAUSE AND HENCE THERE WAS NO GR OUND WHATSOEVER FOR CONDONATION OF DELAY. 16 ITA NOS.132 & 133/PN/2004 31. AFTER HEARING BOTH THE SIDES WE DO NOT FIND ANY INFIRM ITY IN THE ORDER OF THE CIT(A). WE FIND THE ORIGINAL APPEAL WAS FILED BEFO RE CIT(A) ON 19-03-2001 AGAINST THE ORDER OF THE AO PASSED U/S.158BC(C) ON 28-02-2001. SINCE THE TAX DUE ON THE RE TURNED INCOME WAS NOT PAID BY THE ASSESSEE THE CIT(A) DISMISSED THE APPEA L U/S.249(4)(A) OF THE I.T. ACT. ON FURTHER APPEAL FILED BY THE ASSESSEE, THE TRIBUNAL VIDE ORDER DATED 13-09-2003 HELD THAT SINC E THE ASSESSEE IN THE MEANTIME HAS PAID THE TAX ON THE RETUR NED INCOME, THEREFORE, THE APPELLANT IS FREE TO APPROACH THE CIT(A) AGA IN TO AVAIL RELIEF, IF ANY, AVAILABLE TO HIM IN ACCORDANCE WITH LAW. THE ASS ESSEE IN THE MEANTIME HAD FILED A FRESH APPEAL AFTER THE PAYMENT OF TAX DUE ON 27-02-2002 AND THEREBY HAS COMPLIED WITH THE PR OVISIONS OF SECTION 249(4)(A). IN THE LIGHT OF THE ORDER OF THE TRIBUNAL, T HE CIT(A) CONDONED THE DELAY IN FILING OF THE APPEAL BEFORE HIM. UNDER THESE CIRCUMSTANCES WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF T HE CIT(A) IN ADMITTING THE APPEAL AFTER THE DELAYED PAYMENT OF ADMIT TED TAX LIABILITY BY MORE THAN 2 YEARS. GROUND RAISED BY THE REVE NUE IS ACCORDINGLY DISMISSED. 32. GROUNDS OF APPEAL NO.2 AND 3 BY THE REVENUE READ AS UNDER : 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) ERRED IN DELETING THE ADDITION OF RS.24,24,428/- MAD E ON ACCOUNT OF ADVANCES TO VARIOUS PARTIES. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) ERRED IN DELETING THE ADDITION OF RS.24,24,428/- WIT HOUT APPRECIATING THE FACT THAT THE ADDITION WERE MADE ON THE BASIS OF EVIDENCES OF UNACCOUNTED RECEIPTS ON RECORDS IN THE FORM OF SEIZED MATERIALS AND THAT ASSESSEE COULD NOT EXPLAIN AND RECONCILE THE CASH FLOW. 33. FACTS OF THE CASE, IN BRIEF, ARE THAT THE AO ON THE BASIS OF THE DOCUMENTS SEIZED FROM THE ASSESSEE ASKED HIM TO EXPLAIN THE INVESTMENT WITH RESPECT TO ADVANCE GIVEN TO VARIOUS PAR TIES 17 ITA NOS.132 & 133/PN/2004 AMOUNTING TO RS.24,24,428/-. THE AO NOTED THAT THE ASSE SSEE IN HIS STATEMENT RECORDED U/S.132(4) WAS UNABLE TO GIVE VERIFIA BLE SOURCES FOR THE ADVANCES MADE AND WAS UNABLE TO FURNISH ANY PLAUSIBLE EXPLANATION FOR NOT CONSIDERING THE ADVANCE AS UNDISCLOSED INCOME. HE, THEREFORE, MADE ADDITION OF RS.24,24,4 28/- TO THE TOTAL INCOME OF THE ASSESSEE. 33.1 ON THE BASIS OF THE VARIOUS SUBMISSIONS FILED BY THE AS SESSEE, THE LD.CIT(A) CALLED FOR A REMAND REPORT FROM THE AO. AFTER CONSIDERING THE REMAND REPORT THE LD.CIT(A) DELETED THE ADDITION MADE BY THE AO. WHILE DOING SO, HE NOTED THAT IT IS NOT P OSSIBLE TO WORK OUT FROM THE SEIZED DIARY ABOUT THE FIGURE WHICH TOT AL UP TO RS.24,24,428/- AND THE ONLY BASIS OF ADDITION WAS THE STAT EMENT RECORDED U/S.132(4) OF THE ACT. ALTHOUGH THE AO WAS R EQUIRED TO VERIFY EACH AND EVERY ENTRY MADE IN THE DIARY NUMBERS 38, 39 AND 46 WITH RESPECT TO THE BOOKS OF ACCOUNT AND OTHER CHA RTS RELATING TO CASH FLOW STATEMENT SUBMITTED BY THE ASSESSEE DURING TH E ASSESSMENT PROCEEDINGS AS WELL AS BEFORE THE APPEAL PRO CEEDINGS, THE CIT(A) NOTED THAT THE AO IN THE REMAND REPORT HAS MENTIONED THAT THOSE ENTRIES IN THE DIARIES HAVE BEEN VERIFIED AND FO UND TO BE PROPERLY ENTERED IN THE CASH FLOW STATEMENT WITH CERTAI N MINOR VARIATIONS. THE CIT(A) FURTHER NOTED THAT THE SEIZED DIAR IES NOT ONLY CONTAIN THE LOANS AND DEPOSITS TAKEN OR GIVEN BY THE AS SESSEE BUT ALSO HAVE DETAILS OF OTHER ACTIVITIES OF THE ASSESSEE RELAT ED TO THE BUSINESS OF HIS WIFE AS WELL AS THE PVT. LTD. COMPANY. THE FIG URES WHICH WERE WORKED OUT AT THE TIME OF SEARCH AND THE S TATEMENT U/S.132(4) ARE TREATING THE DIARIES AS IF THEY CONTAIN MAINLY THE BUSINESS ACTIVITIES OF LOANS ETC. BY THE ASSESSEE ONLY IS N OT CORRECT. IN VIEW OF THE ABOVE AND RELYING ON VARIOUS DECISIONS TH E LD.CIT(A) 18 ITA NOS.132 & 133/PN/2004 DELETED THE ADDITION WHICH WAS MADE ON THE BASIS OF THE S TATEMENT U/S.132(4) ONLY. SINCE THE LD.CIT(A) AFTER CONSIDERING THE RE MAND REPORT OF THE AO AND AFTER CONSIDERING THE VARIOUS ENTRIE S FOUND IN THE SEIZED DIARY AS WELL AS THE ENTRIES APPEARING IN THE B OOKS OF ACCOUNT PRODUCED BEFORE HIM HAS DELETED THE ADDITION AND SINCE THE LD. DEPARTMENTAL REPRESENTATIVE COULD NOT CONTROVERT T HE FACTUAL FINDINGS GIVEN BY THE CIT(A), THEREFORE, IN ABSENCE OF ANY CON TRARY MATERIAL BEFORE US WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) ON THIS ISSUE. ACCORDINGLY, THE ABOVE 2 GROUNDS B Y THE REVENUE ARE DISMISSED. 34. GROUNDS OF APPEAL NO.4 AND 5 BY THE REVENUE READ AS UNDER : 4. THE LD.CIT(A) ERRED IN DELETING THE ADDITION OF RS.15,57,000/- MADE ON ACCOUNT OF CONSIDERATION PAID FOR PURCHASE OF LAND WITHOUT REFLECTING THE BOOKS OF ACCOUNTS AND ALSO ADMITTED BY THE ASSESSEE IN STATEMENT RECORDED UNDER THE PROVISIONS OF SECTION 132 (4) OF THE I.T. ACT. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, T HE LD.CIT(A) ERRED IN DELETING THE ADDITION MADE BY THE ASSESSING OF FICER RS.11,74,000/- UNDER THE PROVISIONS OF SECTION 68 BASED ON THE NOTHINGS OF SEIZED MATERIAL. 35. FACTS OF THE CASE, IN BRIEF, ARE THAT THE AO ON THE BASIS OF THE TRANSACTIONS REFLECTED ON PAGE 3 OF BUNDLE NO.2 SEIZED FROM THE OFFICE OF THE ASSESSEE VIDE ANNEXURE A1 ON 16-02-1999 MA DE ADDITION OF RS.15,57,000/- BEING PAYMENT OF UNRECORDED CONSIDERATION OF RS.15,57,000/- FOR THE PURCHASE OF LAND FRO M KUMBRES AT CHANDNI CHOWK, KOTHRUD, PUNE. SIMILARLY, THE A O MADE ADDITION OF RS.11,74,000/- U/S.68 BASED ON THE NOTINGS IN THE SEIZED MATERIAL. IN APPEAL THE LD.CIT(A) DELETED THE ABOVE 2 ADDITIONS. THE RELEVANT OBSERVATION OF LD.CIT(A) ON THIS ISSU E HAS ALREADY BEEN REPRODUCED AT PARA 20 OF THIS ORDER. 19 ITA NOS.132 & 133/PN/2004 36. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVENUE IS IN APPEAL BEFORE US. 37. 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 LD.CIT(A) WHILE DE LETING THE ABOVE 2 ADDITIONS HAS CATEGORICALLY STATED THAT T HE ADDITION MADE BY THE AO IS NOT BASED ON PROPER APPRECIATION OF FA CTS AND THE EVIDENCE AVAILABLE. EVEN THERE IS ALSO NO CIRCUMSTANTIAL EVID ENCE AVAILABLE ON RECORD AND NO ATTEMPT HAS BEEN MADE BY TH E AO TO GATHER ANY EVIDENCE FROM SHRI JUGAL SONI, SHRI SHRIRAM SONI O R THE KUMBRES OR ANY OTHER PERSON AS MENTIONED IN THE LOOSE PAPERS. HE HAS ALSO GIVEN A FINDING THAT THE AO IN THE COMPUTATION OF UNDISCLOSED INCOME HAD MADE CERTAIN APPARENT DOUBLE ADDIT IONS. AFTER CONSIDERING THE VARIOUS SUBMISSIONS MADE BY THE ASS ESSEE AND AFTER CONSIDERING THE REMAND REPORT THE LD.CIT(A) HAS DEL ETED THE ABOVE 2 ADDITIONS. THE LD. DEPARTMENTAL REPRESENTATIVE C OULD NOT CONTROVERT THE FINDINGS GIVEN BY THE CIT(A). THEREFORE, IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT TO OUR NOTICE AGAINST TH E ORDER OF THE CIT(A) WE FIND NO INFIRMITY IN HIS ORDER DELETING THE ABOVE 2 ADDITIONS. ACCORDINGLY, THE ORDER OF THE CIT(A) ON THIS ISS UE IS UPHELD AND THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 38. GROUND OF APPEAL NO.6 BY THE REVENUE READS AS UNDER : 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) ERRED IN HOLDING THAT THE ADDITION OF RS.15.50 LAKHS SUSTAINED BY HIM ON ACCOUNT OF REPAYMENT OF LOANS WOULD TAKE CARE OF THE AMOUNT OF RS.11.74 LAKHS WITHOUT ANY EVIDENCE TO INTERLINK THE TWO TRANSACTIONS. 39. FACTS OF THE CASE, IN BRIEF, ARE THAT THE AO MADE A DDITION OF RS.11.74 LAKHS IN PARA 3.1 OF THE ASSESSMENT ORDER ON THE BASIS OF PAGE 3 OF BUNDLE NO.2 SEIZED FROM THE OFFICE OF THE ASSESSEE VIDE 20 ITA NOS.132 & 133/PN/2004 ANNEXURE A1 ON 16-02-1999. THE AO WHILE MAKING THE ADD ITION HAS ALSO CONSIDERED THE STATEMENT ON OATH U/S.131 AT QUEST ION NO.79/80 OF THE SAME. THE AO MADE THE ADDITION AS UNEXP LAINED CASH LOAN ON THE BASIS OF CERTAIN SEIZED PAPERS. IN APP EAL THE LD.CIT(A) HELD THAT THE SEIZED PAPER REFERRED TO BY THE AO WHICH IS THE BASIS FOR THE ADDITION REVEALED THAT IT IS A ROUGH JOT TING ON WHICH CERTAIN INTEREST COMPUTATION HAS BEEN MADE. AFTER CONSID ERING THE SUBMISSIONS MADE BY THE ASSESSEE THE LD.CIT(A) DELETION TH E ADDITION BY OBSERVING AS UNDER : 16. NOW COMING TO GROUND NOS. 22 TO 26, WHICH ALL R ELATE TO THE ADDITION OF RS.15 LACS (WITH RELIEF OF RS.3,26,000/-) MADE BY THE ASSESSING OFFICER AS UNEXPLAINED CASH LOANS ON THE BASIS OF CERTAIN SEIZED PAPERS, THE ISSUE HAS GENERALLY BEEN DISCUSSED EARLI ER. HOWEVER, COMING TO SPECIFICS, THE ASSESSING OFFICER HAS MADE AN ADD ITION OF RS.11. 74 LACS IN PARA 3.1 OF THE ASSESSMENT ORDER ON THE BASIS O F PAGE 3 OF BUNDLE NO.2 SEIZED FROM THE OFFICE OF THE APPELLANT VIDE ANNEXURE A-1 ON 16.02.1999 AND THE STATEMENT ON OATH U/S. 131 AT QUESTION NO.79 AND 80 OF THE SAME. A COPY OF THESE RELEVANT PAGES IS A LREADY GIVEN IN ANNEXURE TO THIS ORDER. IN THIS CONNECTION, EVEN IF T HE STAND OF THE ASSESSING OFFICER IS ADMITTED TO BE CORRECT, THE ADDITIO N ALREADY SUSTAINED OF RS.15.5 LACS ABOVE WOULD TAKE CARE OF IT A S NO SEPARATE EVIDENCE HAS BEEN FOUND. BESIDES THIS, THE PERUSAL OF TH E SEIZED PAPER REFERRED TO ABOVE REVEALS THAT IT IS A ROUGH JOTTING ON WHICH CERTAIN INTEREST COMPUTATION HAS BEEN MADE. THE SUBMISSION OF TH E APPELLANT IN THIS REGARD HAS BEEN CONSIDERED ALONG WITH THE APPELLA NT'S SUBMISSION DATED 15.07.2003, WHICH IS QUOTED HEREUNDER: 'THE A.O WHEN HE SAYS THAT HE HAD TAKEN A LOAN IN CASH HAS BEEN ACCEPTED BY HIM IN HIS OWN SUBMISSION IS NOT CORRECT. N O CASH LOANS WERE TAKEN FROM SONI'S. THEY WERE BY ACCOUNT PA YEE CHEQUES AND HAVE BEEN ROUTED THROUGH SAVINGS BANK ACCO UNT OF THE ASSESSEE. THE PAYMENT OF RS.3,26,000/- WAS MADE TO SO NIS AS PER ASSESSEE WHICH IS INCLUDED IN THE FIGURE OF RS. 15,57 ,000/-. THE A.O GIVES CREDIT OF RS.3,26,000/- FROM THE AMOUNT OF CASH LOAN OF RS. 15,00,000/- ALLEGED TO HAVE BEEN TAKEN F ROM SONIS AND, THEREFORE, MAKES AN ADDITION OF RS. 11,74,000/- AS 'UNDISCLOSED INCOME'. THE ORIGINAL AMOUNT OF RS. 15 LAKHS TREATED AS CASH LOAN IS ITSELF AN IMAGINATION AND, THER EFORE, GIVING CREDIT OF RS. 3,26,000/- FROM THIS FIGURE AND SUSTAININ G AN ADDITION OF RS. 11,74,000/- ITSELF IS IMAGINARY. ' 16.1 AFTER CONSIDERING THE FACTS OF THE CASE, I HAVE T O HOLD THAT THE ADDITION OF RS.11,74,000/- IS NOT AT ALL JUSTIFIED AND THE SAME IS DIRECTED TO BE DELETED. THE GROUNDS OF APPEAL NOS. 22 TO 26 A RE ACCORDINGLY ALLOWED IN FAVOUR OF THE APPELLANT. 21 ITA NOS.132 & 133/PN/2004 40. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVENUE IS IN APPEAL BEFORE US. 41. AFTER HEARING BOTH THE SIDES WE DO NOT FIND ANY INFIRM ITY IN THE ORDER OF THE CIT(A). THE FACTUAL FINDING GIVEN BY THE LD.CIT(A ) COULD NOT BE CONTROVERTED BY THE LD. DEPARTMENTAL REPRESENT ATIVE. SINCE THE ORDER OF THE CIT(A) IS BASED ON PROPER APPRECIATION OF THE SEIZED DOCUMENTS, THEREFORE, IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT TO OUR NOTICE BY THE LD. DEPARTMENTAL REPRESENTATIVE, WE DO NOT FIND ANY INFIRMITY IN THE SAME. ACCORDINGLY, THE ORDER OF LD.CIT(A) ON THIS ISSUE SAME IS UPHELD AND THE GROUND RAISED BY THE REVEN UE IS DISMISSED. 42. GROUND OF APPEAL NO.7 BY THE REVENUE READS AS UNDER : 7. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) ERRED IN DELETING THE ADDITION OF RS.4 LAKHS RECEIVED IN CASH ALLEGEDLY FROM SHRI P.S. PULSORI IN VARIOUS YEARS. 43. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IN HIS REPLY TO QUESTIONNAIRE ISSUED BY THE AO HAD GIVEN DETAILS OF LOAN TA KEN FROM SHRI P.S. PUSLORI AT POINT NO.7 OF HIS REPLY DATED 07-02-200 1. THE AO NOTED THAT SHRI PUSLORI IS A CLOSE ASSOCIATE OF THE AS SESSEE WITH WHOM HE HAS FORMED AN ARRANGEMENT IN THE NAME AND STY LE OF M/S. SNEHAL KARAN COMMUNICATION. ON BEING QUESTIONED BY THE AO THE ASSESSEE, IN RESPONSE TO QUESTION 90, SUBMITTED THAT HE ONLY MAINTAINED A RUNNING ACCOUNT WITH SHRI PUSLORI WHO WAS COM PETITOR IN CABLE BUSINESS AND NO LOANS OR BUSINESS AS SUCH WAS G IVEN TO HIM. THE AO NOTED THAT THE ABOVE STATEMENT OF THE ASS ESSEE IS CONTRARY TO THE STATEMENT DATED 07-02-2001 WHEREIN H E HAS ADMITTED THAT HE HAD TAKEN LOAN OF RS.4 LAKHS ON DIFFERENT DATES FROM F.Y. 1994-95 TO 1997-98 IN CASH FROM SHRI PUSLORI. TH E AO 22 ITA NOS.132 & 133/PN/2004 NOTED THAT THE FOLLOWING TRANSACTIONS ADMITTED TO BE LOANS RECEIVED IN CASH WERE NOT FOUND TO BE REFLECTED IN THE BOOKS OF AC COUNT OF SHRI PUSLORI : 08-04-2004 RS.1,25,000 IN CASH 31-03-1996 RS.75,000 IN CASH 10-02-1997 RS.60,000 IN CASH 08-07-1997 RS.1,40,000 IN CASH 44. THE AO RECORDED THE STATEMENT U/S.131 OF SHRI PUSLO RI WHO DENIED TO HAVE ANY SUCH PAYMENTS TO THE ASSESSEE. HE ACCORDINGLY MADE ADDITION OF RS.4 LAKHS TO THE TOTAL INCOME OF THE ASSESSEE. 45. BEFORE CIT(A) THE ASSESSEE SUBMITTED THAT NEITHER TH E BOOKS OF ACCOUNTS OF SHRI PUSLORI WERE SHOWN TO THE ASSESSEE NOR SHRI PUSLORI WAS ALLOWED TO BE CROSS EXAMINED BY HIM. THEREFORE, THE OBSERVATION OF THE AO ARE AGAINST THE PRINCIPLES OF NATURA L JUSTICE. IT WAS ARGUED THAT AS PER THE PROVISIONS OF SECTION 68 THE AO WAS DUTY BOUND TO CONFRONT THE ASSESSEE WITH THE INFORMATION IN HIS POSSESSION AND THEREAFTER REACH A CONCLUSION. THIS WAS COMPLETELY OVERLOOKED BY THE AO. THE ASSESSEE FILED A COPY OF ACC OUNT OF SHRI SAMBHAJI S. PATIL IN THE BOOKS OF M/S. KARAN CABLES, A CONCE RN OF SHRI P.S. PUSLORI WHEREIN THE TRANSACTIONS OF LOAN HAVE BEEN REFLECTED. IT WAS SUBMITTED THAT THE AMOUNT OF RS.4 LAKHS TAKEN AS LOAN HAS BEEN RETURNED TO SHRI PUSLORI BY DEMAND DRAFT O F RS.4 LAKHS ON 11-02-1998. CERTIFICATE FROM SHRI GANESH BANK OF KURUNDWAD LTD. KOTHRUD, PUNE WAS ALSO SUBMITTED BY THE ASSESSEE BEFORE THE CIT(A). IT WAS FURTHER SUBMITTED THAT WHEN T HE AO WAS CATEGORICALLY STATING IN THE ASSESSMENT ORDER THAT THE ASSESSEE WAS NOT MAINTAINING ANY BOOKS OF ACCOUNT, THEN IN SUCH A SITU ATION IT WAS NOT POSSIBLE ON HIS PART TO MAKE ADDITION U/S.68. 23 ITA NOS.132 & 133/PN/2004 46. BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE THE LD.CIT(A) DELETED THE ADDITION BY OBSERVING AS UNDER : 12.2 I HAVE EXAMINED THE FACTS OF THE CASE AND THE P OSITION OF LAW IN THIS REGARD. SHRI.P.S.PUSLORI AND THE APPELLANT WERE COMPETITORS AND ADVERSARIES IN THEIR CABLE NETWORK BUSINESS. THE APPELL ANT HAS ADMITTED THAT HE HAD TAKEN LOAN IN CASH FROM SHRI.P.S.PUSLORI AND SHRI.P.S.PUSLORI HAS ADMITTED THE POSITION AS PER THE INFORMATION SUBMIT TED BY THE APPELLANT. THE ASSESSING OFFICER DID NOT CONFRONT THE A PPELLANT WITH THE INFORMATION COLLECTED AT HIS BACK FROM SHRI.P.S.PUSLO RI AND AS SUCH IT IS FATAL DEFECT IN THE DECISION MAKING PROCESS OF THE ASSE SSING OFFICER. THE ADDITIONS MADE ARE, THEREFORE, LIABLE TO BE DELETED. GROUND NOS. 16 AND 17 ARE ALLOWED IN FAVOUR OF THE APPELLANT FOR THE REASONS DISCUSSED AGAINST GROUND NO.11. 47. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVENUE IS IN APPEAL BEFORE US. 48. 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 IN THE INSTANT CASE THE AO MADE ADDITION OF RS.4 LAKHS TO THE TOTAL INCOME OF THE ASSE SSEE U/S.68 ON THE BASIS OF THE STATEMENT RECORDED FROM TH E ASSESSEE THAT HE HAD TAKEN LOAN OF RS.4 LAKHS ON DIFFERENT DATES DU RING F.YRS. 1994-95 TO 1997-98 IN CASH FROM SHRI P.S. PUSLORI. WE FIND T HE CIT(A) DELETED THE ADDITION ON THE GROUND THAT WHILE THE A O HAS RECORDED THE STATEMENT OF SHRI P.S. PUSLORI, HOWEVER, THE A O DID NOT CONFRONT THE SAME TO THE ASSESSEE WHICH WAS UTILIZED AGA INST THE ASSESSEE. THE INFORMATION COLLECTED AT THE BACK OF THE A SSESSEE WHICH WAS UTILIZED AGAINST HIM WAS NOT CONFRONTED TO THE A SSESSEE FOR WHICH THE LD.CIT(A) HELD THAT THE ADDICTION MADE BY THE AO IS INCORRECT. SINCE ADMITTEDLY THE ASSESSEE WAS NOT CONFRO NTED WITH THE ADVERSE FINDINGS COLLECTED BY THE AO AT THE BACK OF THE ASSESSEE, THEREFORE THE PRINCIPLES OF NATURAL JUSTICE HAVE BEEN VIOLAT ED. IN VIEW OF THE DETAILED REASONING GIVEN BY THE LD.CIT(A) AND IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT TO OUR NOTICE AGAINST T HE ORDER OF 24 ITA NOS.132 & 133/PN/2004 THE CIT(A) DELETING THE ADDITION WE FIND NO INFIRMITY IN THE ORD ER OF THE CIT(A). ACCORDINGLY, THE SAME IS UPHELD AND THE GROU ND RAISED BY THE REVENUE IS DISMISSED. 49. GROUND OF APPEAL NO.8 BY THE REVENUE AND GROUND OF APPEAL NO.5 BY THE ASSESSEE ARE AS UNDER : 8. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) ERRED IN RESTRICTING THE ADDITION MADE ON LOANS TAKEN AND THEIR REPAYMENTS TO RS.1,01,506/- AS AGAINST THE AMOUNT OF RS. 1,71,561/-. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AN D IN LAW THE LD.CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ASSESSMENT OF UNDISCLOSED INCOME OF RS.1,01,506/- AGAINST MADE BY A.O. OF RS.1, 71,561/- ON ACCOUNT OF LOAN TAKEN ON PLEDGING GOLD ORNAMENTS OF THE WIFE OF THE ASSESSEE AND LD.CIT(A) OUGHT TO HAVE DELETED THE ENTIRE ADDITION OF RS.1,71,561/-. 50. FACTS OF THE CASE, IN BRIEF, ARE THAT THE AO BASED ON THE STATEMENT RECORDED U/S.132(4) ON 17-02-1999 AND STATEM ENT RECORDED U/S.131 ON 09-02-2001 MADE ADDITION OF RS.1,71,76 1/- ON ACCOUNT OF UNEXPLAINED LOAN AND REPAYMENT THEREOF. IN AP PEAL THE LD.CIT(A) BASED ON THE BASIS OF SUBMISSIONS MADE AND ARGUM ENTS ADVANCED BY THE ASSESSEE DIRECTED THE AO TO DELETE TH E ADDITION OF RS.1,71,761/- MADE U/S.68. HOWEVER, HE DIRECTED THE AO TO MAKE ADDITION OF RS.1,01,506/- U/S.69 OF THE ACT IN ABSENCE OF ANY PLAUSIBLE EXPLANATION GIVEN BY THE ASSESSEE TOWARDS THE R EPAYMENT. THE RELEVANT OBSERVATION OF THE CIT(A) AT PARA 14.1 AND 1 4.2 OF THE ORDER READ AS UNDER : 14.1 THIS ISSUE IS ALSO A SUBJECT MATTER OF QUESTION N O.50 OF THE STATEMENT U/S.131 WHEREIN CERTAIN PAGES OF SEIZED BUNDL E NO.6 HAVE BEEN REFERRED TO BY THE ASSESSING OFFICER AND THE APPEL LANT HAS ONCE AGAIN SUBMITTED THAT THESE REPRESENT LOANS RAISED AGAIN ST THE GOLD ORNAMENTS. THE ASSESSING OFFICER HAS HOWEVER SIMPLY STATED AFTER RECORDING THE STATEMENT ON OATH OF THE APPELLANT U/S. 131 REFUTING THE ADMISSION U/S.132(4) OF THE I.T. ACT, 1961 THAT THE AP PELLANT HAS NOT BEEN ABLE TO SATISFACTORILY PROVE THE GENUINENESS OF TH E LOANS TAKEN AND THEREFORE TREATED AS UNEXPLAINED CASH CREDIT IN TERMS OF SECTION 68 OF THE I.T. ACT, 1961. THE ASSESSING OFFICER HAS ALSO NOT AC CEPTED THE CLAIM 25 ITA NOS.132 & 133/PN/2004 OF THE APPELLANT THAT THE MAXIMUM AMOUNT OF LOAN TA KEN WAS RS.91,000/-. 14.2 FIRST OF ALL, THE ADDITION U/S. 68 IS TECHNICALLY NOT CORRECT AS THE SAME HAS NOT BEEN FOUND TO BE NOT RECORDED IN ANY BOO KS OF ACCOUNTS. SECONDLY, THE JEWELLERY RELATED TO THE PLEDGE HAS BE EN SEIZED AS PER ANNEXURE C DATED 16.02.1999 OF THE PANCHANAMA AT TH E RESIDENCE OF THE APPELLANT AND THIS ASPECT HAS BEEN ADMITTED BY THE ASSESSI NG OFFICER IN THE ASSESSMENT ORDER. IN SUCH A SITUATION, THE CLAIM OF T HE APPELLANT THAT THESE ENTRIES IN THESE PAPERS REFLECT THE LOANS TAKEN DOES GET SATISFACTORY EXPLANATION. HOWEVER, WHILE THE CLAIM OF THE APPELLANT THAT THESE REFLECT TAKING OF LOANS AGAINST GOLD ORNAMENTS IS FOUND TO BE PLAUSIBLE, THE FACT REMAINS THAT THE APPELLANT HAS NOT BEEN ABLE TO GIVE THE SOURCE OF REPAYMENT OF THESE LOANS AND THE INTERE ST THEREUPON AS THE JEWELLERY HAS SINCE BEEN ADMITTEDLY GOT RELEASED B Y THE APPELLANT. THE ADDITION, THEREFORE, IS CALLED FOR IN THE INVESTM ENT OF THE APPELLANT IN THE REPAYMENT OF THE LOANS TAKEN AND THE INTEREST PAID THEREUPON, SOURCE OF WHICH REMAINS UNEXPLAINED. IN THE LIGHT OF THESE ASPECTS, THE ADDITION THAT IS REQUIRED TO BE MADE IS RS.91,000 + 2, 753 + 7,753 = RS.1,01,506/-. THEREFORE, WHILE THE CLAIM OF THE AP PELLANT THAT THE ADDITION U/S.68 IS NOT CALLED FOR AN AMOUNT OF R.1,71 ,761/- IS FOUND TO BE CORRECT, THE ADDITION OF RS.1,01,506/- U/S.69 OF THE I.T. ACT, 1961 IS IRECTED TO BE MADE AS THE SOURCE OF REPAYMENT REMAINS UNEXPLAINED. GROUND NO.19 IS, THEREFORE, ALLOWED PARTLY IN FAVOUR OF THE APPELLANT. (RELIEF OF RS. 70,255/-). 51. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSESSEE AS WELL AS THE REVENUE ARE IN APPEAL BEFORE US. 52. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES. WE FIND THE LD.CIT(A) AFTER PROPER APPRECIATION OF THE FACTS OF THE CASE DIRECTED THE AO NOT TO MAKE ANY ADDITION U/S.6 8 AMOUNTING TO RS.1,71,761/-. HOWEVER, HE DIRECTED THE AO T O MAKE ADDITION OF RS.1,01,506/- U/S.69 OF THE ACT IN ABSENCE OF ANY PLAUSIBLE EXPLANATION GIVEN BY THE ASSESSEE TOWARDS THE R EPAYMENT OF THE ABOVE LOAN. THE LD. COUNSEL FOR THE ASSESSEE BEFO RE US ALSO COULD NOT GIVE ANY PROPER EXPLANATION NOR HE COULD EXPLAIN HOW THE ORDER OF THE CIT(A) IS ERRONEOUS. SINCE THE LD.CIT(A) ON TH E BASIS OF ANALYSIS OF THE SEIZED DOCUMENT AND ON THE BASIS OF THE VARIOUS STATEMENTS RECORDED FROM THE ASSESSEE U/S.132(4) AS WELL AS U/S.131 HAS GIVEN VALID REASONS, THEREFORE, IN ABSENCE OF AN Y CONTRARY MATERIAL BROUGHT TO OUR NOTICE BY EITHER SIDE W E DO NOT FIND 26 ITA NOS.132 & 133/PN/2004 ANY INFIRMITY IN THE ORDER OF THE CIT(A). ACCORDINGLY, THE SA ME IS UPHELD AND THE GROUND RAISED BY THE ASSESSEE AS WELL AS THE REVENUE ARE DISMISSED. 53. GROUND OF APPEAL NO.9 BY THE REVENUE AND GROUND OF APPEAL NO.6 BY THE ASSESSEE ARE AS UNDER : 9. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) ERRED IN GIVING RELIEF OF RS.5 LAKHS OUT OF THE TOTAL ADDITION OF RS.20.50 LAKHS MERELY ON THE GROUND THAT CHEQUE WAS ISSUED IN T HE NAME OF MRS. PATIL WITHOUT APPRECIATING THE FACT THAT THE BUSINE SS WAS BEING HANDLED BY MR. S.S. PATIL AND IGNORING FACT THAT THE ASSESSEE ADMITTED THE SAID UNACCOUNTED AMOUNT IN THE STATEMENT U/S.132(4). 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AN D IN LAW THE LD.CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITIO N OF RS.15,50,000/- OUT OF TOTAL ADDITION MADE BY THE A.O. OF RS.20,50,0 00/- BY TREATING THEM AS LOANS TAKEN ON THE STRENGTH OF BLANK CHEQUES ISSU ED AND SEIZED IN SEARCH ACTION. IN VIEW OF PROPER EXPLANATION OFF ERED THE LD.CIT(A) OUGHT TO HAVE DELETED THE ENTIRE ADDITION OF RS.20,5 0,000/- FROM THE BLOCK ASSESSMENT. 54. IN GROUND OF APPEAL NO.6 THE ASSESSEE HAS CHALLENGED THE ORDER OF THE CIT(A) IN CONFIRMING THE ADDITION OF RS.15,50,000 M ADE BY THE AO OUT OF RS.20,50,000/- MADE BY THE AO. THE R EVENUE HAS CHALLENGED THE DELETION OF RS. 5 LAKHS. 55. FACTS OF THE CASE, IN BRIEF, ARE THAT THE AO ON THE BASIS OF SIGNED BLANK CHEQUES OR POST DATED CHEQUES FOUND DURING THE COURSE OF SEARCH PROCEEDINGS FROM THE PREMISES OF THE AS SESSEE AS WELL AS THE STATEMENT RECORDED U/S.132(4) ON 19-02-1999 MADE ADDITION OF RS.20,50,000/- TO THE TOTAL INCOME OF THE ASSES SEE AS UNDISCLOSED INCOME FOR THE F.Y.1997-98. 56. BEFORE CIT(A) THE ASSESSEE SUBMITTED THAT THERE IS NO INDEPENDENT EVIDENCE AVAILABLE WITH THE AO THAT THE REPAY MENT OF LOAN WAS MADE OUT OF UNDISCLOSED INCOME IN THE BOOKS OF AC COUNT OR RETURN OF INCOME FILED EXCEPT THE ADMISSION OF THE ASSESSEE RECORDED 27 ITA NOS.132 & 133/PN/2004 IN STATEMENT U/S.132(4) OF THE I.T. ACT. IT WAS ARGUED TH AT THERE WAS NO NEED TO ADD THE AMOUNT OF RS.20,50,000/- AS UNDISCLOSED INCOME OF THE ASSESSEE. HOWEVER, THE CIT(A) WAS NOT FULLY CONVIN CED WITH THE EXPLANATION GIVEN BY THE ASSESSEE AND SUSTAINED AN AMOUNT OF RS.5 LAKHS OUT OF RS.20,50,000/- MADE BY THE AO BY OBSERV ING AS UNDER : 15.4 I HAVE EXAMINED THE FACTS OF THE CASE AS WELL AS THE SUBMISSION OF THE APPELLANT DURING THE APPELLANT PROCEEDINGS. WHI LE THE CERTIFICATES ISSUED BY THE SUPPLIERS OF MATERIAL, AS ADDITIONAL EVIDE NCE ARE NOT ADMISSIBLE AT THIS STAGE, THE FACT REMAINS THAT THIS ASPEC T RELATING TO THESE CHEQUES HAVING BEEN ISSUED FOR PURCHASE OF MATERIA LS IS A PART AND PARCEL OF THE REPLY OF THE APPELLANT TO QUESTION NO. 3 OF THE STATEMENT U/S.132(4) DATED 19.02.1999. FURTHERMORE, THE CHEQUE OF RS. 5 LACS BELONGS TO THE PROPRIETARY CONCERN OF M/S.SNEHAL COMM UNICATION, A PROPRIETARY CONCERN OF SMT.S.S.PATIL AND THEREFORE THE ADDITION ON THAT ACCOUNT, IRRESPECTIVE OF THE ADMISSION OF THE APPELLAN T, IS NOT JUSTIFIED IN THE HANDS OF THE APPELLANT. NO DOUBT THE CRUCIAL PIE CE OF EVIDENCE IN THIS CASE IS THE ADMISSION OF THE APPELLANT U/S.132(4), THE E VASIVE REPLY OF THE APPELLANT IN THE STATEMENT U/S.131 IN QUESTION NO S. 45 AND 46 GO AGAINST THE APPELLANT. AFTER CONSIDERING ALL THE FACT S AND CIRCUMSTANCES OF THE CASE, IN THE LIGHT OF THE ADMISSION OF THE APPE LLANT IN THE STATEMENT U/S.132(4) AND FAILURE OF THE APPELLANT TO REBUT THE PRESUMPTION AGAINST HIM BY ANY CREDIBLE EVIDENCE ON T HIS ISSUE, THE ADDITION OF RS.15,50,000/- IS TO BE SUSTAINED OUT OF R S.20,50,000/- (RELIEF OF RS. 5,00,000/-) ON FACTS AS WELL AS IN VIEW OF THE LEGAL POSITION BROUGHT OUT IN LATER PARAGRAPHS. 57. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US. 58. AFTER CONSIDERING THE RIVAL ARGUMENTS MADE BY BOTH TH E SIDES, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) SUST AINING AN AMOUNT OF RS.15,50,000/- OUT OF RS.20,50,000/- MADE BY THE AO. THE LD. COUNSEL FOR THE ASSESSEE COULD NOT CONTROVERT THE FACTUAL FINDINGS GIVEN BY THE CIT(A). THE DECISION OF THE CHENNAI BENC H OF THE TRIBUNAL IN THE CASE OF ACIT VS. M.N. RAJENDRAN REPO RTED IN 33 ITCI 666 RELIED ON BY THE LD. COUNSEL FOR THE ASSESSEE IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. THE LD. DEPA RTMENTAL REPRESENTATIVE ALSO COULD NOT POINT OUT ANY ERROR IN THE ORDER OF 28 ITA NOS.132 & 133/PN/2004 CIT(A) GIVING RELIEF OF RS.5 LAKHS. GROUND RAISED BY THE ASSES SEE AS WELL AS THE REVENUE ARE ACCORDINGLY DISMISSED. 59. GROUND OF APPEAL NO.10 BY THE REVENUE READS AS UNDER : 10. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) ERRED IN DELETING THE ADDITION OF RS.4,94,275/- BEIN G PEAK CREDIT IN THE ACCOUNT OF S.R. KULKARNI. 60. FACTS OF THE CASE, IN BRIEF ARE THAT DURING THE COURS E OF ASSESSMENT PROCEEDINGS THE AO CONFRONTED THE ASSESSEE REGARDING LOOSE PAPER BUNDLE NO.2 SEIZED AS PER ANNEXURE A1 TO TH E PANCHANAMA DATGED 16-02-1999 WHICH WAS SEIZED FROM THE OFFICE PREMISES OF M/S. TOUR SAFE AND THE REPLY OF THE ASSESSEE TO QUES TION NO.2 OF HIS STATEMENT RECORDED U/S.132(4) ON 23-02-1999. HE NOTED THAT THE ASSESSEE AT THE TIME OF RECORDING OF HIS STATEM ENT HAD IDENTIFIED THE TRANSACTIONS AS HAVING OCCURRED BETWEEN M/ S. TOUR SAFE AND SHRI S.R. KULKARINI AND THE ASSESSEE AND HIS FAMILY CONCERNS. IN THESE PAPERS, PAGE NO.12 WAS IDENTIFIED AS COMPUTERIZED SUMMARY OF THE TRANSACTIONS BETWEEN SHRI S .R. KULKARNI AND HIMSELF. THE AMOUNT PAID TO SHRI S.R. KULKARNI WAS OUT OF HIS OWN BUSINESS FUND. THE ASSESSEE HAS FURTHER STATED THAT THESE TRANSACTIONS WERE NOT RECORDED IN HIS REGULAR BOO KS OF ACCOUNT MAINTAINED ON TALLY PACKAGE. HE HAD ALSO CONFIRMED THAT T HESE WERE NOT INCLUDED IN HIS INCOME-TAX RETURNS. THE AO ANALYSED THE DETAILS OF LOANS TAKEN AND REPAYMENT MADE TO SHRI S.R. KULKARNI IN F.YRS. 1996-97, 1997-98 AND 1998-99. HE ALSO ASKED THE ASSES SEE TO OBTAIN THE CONFIRMATIONS FOR ALL THE LOANS TAKEN DURING THE BLOCK PERIOD. AFTER CONFRONTING THE ASSESSEE REGARDING THE TRA NSACTIONS ENTERED INTO BETWEEN HIM AND SHRI S.R. KULKARNI AND IN ABS ENCE OF ANY CONFIRMATION FURNISHED FROM SHRI S.R. KULKARNI REGARDING MONEY LYING WITH THE ASSESSEE OR THE REPAYMENT MADE T HEREOF BY THE 29 ITA NOS.132 & 133/PN/2004 ASSESSEE AND OBSERVING THAT THE ASESSSEE FAILED TO DISCH ARGE THE ONUS OF SUBSTANTIATING THE SOURCE OF SUCH MONEY THE AO MADE ADDITION OF RS.4,94,275/- TO THE TOTAL INCOME OF THE ASSE SSEE BEING THE PEAK CREDIT : FIN. YEAR CASH/CHEQUE RECEIPT PAYMENT BALANCE 1996 - 97 CASH 2,25,000 76,000 1,49,000 1997 - 98 CASH 9,29,100 12,32,375 CHEQUE 37,000 50,000 ( - )1,67,275 1998 - 99 CASH 7,27,500 5,65,000 ( - )5,275 61. BEFORE CIT(A) THE ASSESSEE MADE ELABORATE SUBMISSIONS BASED ON WHICH THE LD.CIT(A) DELETED THE ADDITION BY OBSERVING AS UNDER : 18.2 I HAVE GONE THROUGH THE SUBMISSION OF THE APPEL LANT AND THE RECORDS AVAILABLE AND IT IS FOUND THAT COMPUTATION MA DE BY THE APPELLANT REFLECTED IN THE AFORESAID REPLY IS BORNE O UT BY RECORDS. FOR EXAMPLE, AN AMOUNT OF RS.60,000/- IS REFLECTED IN THE DIARY ON 10.12.1997 AND THIS EXPLANATION WAS GIVEN BY THE APPE LLANT IN HIS SUBMISSION DATED 07.02.2001 BEFORE THE ASSESSING OFFICER. THIS AMOUNT OF RS.60,000/- WAS PAID TO MR.MANKAR ON BEHALF OF MR. S.R.KULKARNI AND HAS BEEN CONFIRMED BY SHRI. S.R.KULKARNI LATER ON. S IMILAR IS THE POSITION OF THE AMOUNTS RECEIVED FROM KARAN CABLE ON 06.08.19 97 AND ADVANCE AGAINST SALE OF LAND REFLECTED THEREIN. IN SUCH A SITUA TION, NO ADDITION ON THIS ACCOUNT IS REQUIRED TO BE MADE ON MERITS. EVEN OT HERWISE, AS HAS BEEN POINTED OUT BY THE APPELLANT, ADDITION ON ACCO UNT OF UNDATED CHEQUES HAVING ALREADY BEEN MADE, SEPARATE ADDITION O N THIS ACCOUNT IS NOT CALLED FOR. IN THIS CONNECTION, IT WOULD BE RELE VANT TO POINT OUT THAT THE ASSESSING OFFICER HAS SOMEHOW NOT PROPERLY CONSIDERED THE SUBMISSIONS OF THE APPELLANT ON RECORD WHILE ARRIVING A T DECISIONS, WHICH HAS BEEN DONE MAINLY ON THE BASIS OF THE STATEMEN T U/S.132(4). THIS IS NOT THE RIGHT METHOD TO BE EMPLOYED IN WORKIN G OUT THE UNDISCLOSED INCOME FOR THE BLOCK PERIOD. THE SHORTCOMI NGS OF THE ASSESSING OFFICER, WHICH HAS BEEN POINTED OUT BY THE APP ELLANT IN HIS SUBMISSION DATED 22.07.2003 ARE AS UNDER AND HAVE BEEN CLOSELY AND MINUTELY EXAMINED BY ME BEFORE ARRIVING AT THE DECI SION AND WHEREVER THE ASSESSING OFFICER HAS TAKEN DUE COGNIZANCE OF THESE A SPECTS OR WHEREVER THE MATTER IS EVIDENT OTHERWISE ON THE BASIS OF THE POSITION OF LAW AND FACTS, DUE ADDITIONS HAVE BEEN SUSTAINED, BUT T HE ASSESSING OFFICER SHOULD TAKE MORE CARE IN FRAMING THE ASSESSMENT ORDER OF THIS NATURE IN FUTURE. 'PG. NO. 3 - A. O. SAYS THAT THE ASSESSEE HAS FILED DOCUMENTARY EVI DENCE FOR DETAILS CALLED FOR VIDE QUESTIONNAIRE. THEREFORE, T HE FOLLOWING EVIDENCES WERE SUBMITTED BEFORE A.O. WHICH HAVE NOT BEEN CONSIDERED BY THE A.O IN BLOCK ASSESSMENT ORDER. 30 ITA NOS.132 & 133/PN/2004 1. Q. NO.1 - DETAILS OF RETURN FILED FOR THE BLOCK PERIOD. 2. Q.NO.4 - LIST OF MOVABLE AND IMMOVABLE PROPERTIES 3. Q.NO.10 - DETAILS OF SOURCES OF VALUABLES FOUND. 4. Q.NO.12 - CASH LOANS TAKEN 5. Q.NO.13 - BANK LOANS 6. Q.NO.15 - DETAILS OF LAND ACQUIRED, COST OF ACQUISITION, MODE OF PAYMENT. 7. Q.NO.17 - DETAILS OF SALE OF LAND 8. COPIES OF AGREEMENTS FOR SALE OF PLOTS AT S.NO. 100 9. Q.NO. 48 - BUNDLE NO.38 - Q.NO.15 RECORDED U/S. 132 ( 4 ) ON 17.02.99 - ADDITION RS. 3,65,850/- 10. Q.NO.49 - BUNDLE NO.39 - Q.NO.18 - 17.02.1999 RECOR DED U/S.132 ( 4) - ADDITION RS.15,33,292/- 11. Q.NO.52 - BUNDLE NO.43 -PG.63 - RS.20,40,000/- CONS IDERATION FOR SALE OF LAND 12. Q.NO.55 - BUNDLE NO.46 - DETAILS OF PAYMENT & RECEIPTS. 13. Q.NO.59 - PG.27 TO 31 - BUNDLE NO.2 - TOURSAFE ACCO UNT, 1,2 & 3 OF BUNDLE NO.5 14. Q.NO.86 BUNDLE NO.1 PG.NO.58 BLANK CHEQUE OF RS.3,50,000/-. 15. Q.NO.88 PG.NO.87 BUNDLE NO.5 TRANSACTIONS BET WEEN S.R. KULKARNI & ASSESSEE. ON PG. NO. 9 - A. O. OBSERVES THAT HIS ATTENTION WA S DRAWN TO REPLY GIVEN ON ITEM NO. 7 DT.07.02.2001 BUT AT PG. NO.5 HE STATES' NO REPLY TO THIS QUESTIONNAIRE AND NOTICE U/S.142(1) WAS RECEIVED TI LL 27.02.2001' ON PG. 8 OF ASSESSMENT ORDER, A.O. MENTIONS, IN PG.NO.2,3,4 OF BUNDLE NO.6, THE ASSESSEE STATED THAT THESE WERE THE LOANS RAISED AG AINST PLEDGE OF GOLD ORNAMENTS. ON VERIFICATION OF PG. 2, 3, 4 OF BUNDLE NO.6 WHICH ARE DATED 18.10.1997 & 29.10.1997 ARE NOT RELATED TO ANY LOANS RAISED. PG. NO.2 OF BUNDLE NO. 12, THERE ARE FIGURES OF LOANS RAISED & INTEREST PAID. THE A. O. HAS MADE THE TOTAL OF RS.1, 71,561/- WHICH INCLUDES THE INTEREST PAID OF RS.728 + RS.404 + RS.2753 + RS.3676 = RS.7,561/-. THE EARLIER LOANS OF RS.28,000/- ( RS. 18,000+RS. 10,000) WERE REPAID BY RAISING A LOAN OF RS.45,000/- WHICH ITSELF WAS ALSO REPAID ON 14.03.1 997. ON 14.03.1997, FRESH LOAN OF RS. 91, 000/- WAS TAKEN WHICH WAS REPAID ON 10.08.1997 BY P AYING INTEREST OF RS.3, 676/- THE A.O. DISBELIEVING THE ASSESSEE'S STATEMENT ADDE D RS.1, 71,561/- AS AN UNDISCLOSED INCOME U/S.68 EVEN THOUGH IT IS T HE FINDING OF THE A. O. THAT NO BOOKS OF ACCOUNT HAVE BEEN MAINTAINED. EXPLANATION DT.07.02.2001, ITEM NO.7 DEALS WITH REG ARDS TO LOANS TAKEN FROM KARAN CABLE 1994-95 TO 1997-98, KISHOR GAYATRI 1996-97 TO 1998-99, S. R. KULKARNI 1996-97 TO 1998-99, BABA SHAIKH 1997-98 TO 1998-99. THE AO. HAS RECORDED HIS FINDINGS THAT BLANK CHEQUE S HAVE BEEN TAKEN BACK AS REPAYMENTS HAVE BEEN MADE. THESE REPAYMENTS HAVE BE EN MADE FROM OUT OF UNDISCLOSED INCOME. KARAN CABLE RS.1,40,000/- ENTIRE ACCOUNT HAS BEEN S QUARED OFF BY REPAYMENT BY CROSSED ACCOUNT PAYEE PAY ORDER NO.14671 OF RS.4, 00,000/-. BUT STILL A O. HAS MADE SEPARATE ADDITION AS UNDISCLOSED INCOME OF RS.4,00,000/- IN HIS PARA NO.8 OF ASSESSMENT ORDER. S.R.KULKAMI - RS.9,29, 100 + RS.37,000 31 ITA NOS.132 & 133/PN/2004 HERE ALSO A O SAYS THAT THE REPAYMENT HAS BEEN MADE IN CASH FRO M OUT OF UNDISCLOSED SOURCES IN LIEU OF BLANK UNSIGNED CHEQUES. THE AO. HAS ALSO MADE RS.4,94,275/- AS PEAK CREDIT OF THIS ACCOUNT. THIS IS ALSO WRONG AS THERE IS NO PEAK CREDIT AS SUCH AS EXPLAINED SEPARATELY. EVEN THOUGH THE CHEQUES ARE UNDATED, THE A O. HAS MADE ADDITION IN A Y. 1998-99 ON PG.NO.12 OF ASSESSMENT ORDER REGARDING BUNDLE NO.12 PG.NO.1 SEI ZED ON 18.02. 1999 THE AO. SAYS THE FIGURE PERTAIN TO PERIOD AROUND 6.02.1997. BUT THIS IS THE DATE WRITTEN ON THE PAPER. AT PG.NO. 13 OF THE ASSESSMENT ORDER, THE AO SAYS THAT THERE IS SUFFICIENT CIRCUMSTANTIAL EVIDENCE TO INFER THAT THE ASSESSEE HAS TAKEN LOAN OF RS.15,00,000/- AS PER BUNDLE NO.12 PG.NO.1 WHICH WAS APPLIED FOR MAKI NG UNRECORDED PAYMENT OF RS. 15,57,000/- AS PER BUNDLE NO.2,PG.NO.1 - THE PAPER SEIZED DT.16.02.1997. THIS RS. 15,57,000/- HA S BEEN SEPARATELY ADDED AS UNDISCLOSED INCOME - UNRECORDED CONSIDERATION FOR L AND. AT THE SAME TIME, THE A. O. SAYS THAT LOAN OF RS. 15,00,000/- HAS BEEN UTILISED FOR MAKING THIS PAYMENT. THIS HAS BEEN SEPARATELY ADDED. IN FACT, T HE AO. MAKES AN ADDITION OF RS.15,57,000+RS.11,74,000 = RS.27,31,000/- (RS.15,00,000/- + RS.15,57,000/- - RS.3,26,000/-) RS.15,57,000/- - ACCEPTING THAT IT WAS CONSIDERATION FOR PAYMENT OF LAND PURCHASE AND WITH THE A O'S OWN ADMISSION AVAILABLE FROM THE TRADING ACCOUNT IN F. Y. 1993-94 ADDITION IS MADE IN A. Y. 1998-99. THE ADDITION OF RS. 15,57,000/- IN A Y. 1994-95 IS AS UNEXPLAINED CASH LOAN WHILE ON PG.NO.13 A. 0. SAYS IT IS AN AMOUNT PAID AS FOR MAKING UNRECORDED CONSIDERATION. ' GROUND NO.28 IS ACCORDINGLY ALLOWED IN FAVOUR OF THE APPELLANT. 62. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVENUE IS IN APPEAL BEFORE US. 63. 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 LD.CIT(A) WHILE D ELETING THE ADDITION MADE BY THE AO HAS CLOSELY AND MINUTELY EX AMINED THE DETAILS FURNISHED BEFORE HIM. THE LD. DEPARTMENTAL REPRESEN TATIVE COULD NOT POINT OUR ANY INFIRMITY IN THE FACTUAL FINDINGS GIVEN BY THE CIT(A). IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT TO O UR NOTICE WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A) DELETING THE ADDITION MADE BY THE AO. ACCORDINGLY, WE UPHOLD THE ORDER OF THE CIT (A) AND THE GROUND RAISED BY THE REVENUE IS DISMISSED. 32 ITA NOS.132 & 133/PN/2004 64. IN THE RESULT, THE APPEAL BY THE ASSESSEE IS PARTLY ALLOWED AND THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 15-01-2016. SD/- SD/- ( VIKAS AWASTHY ) ( R.K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER IQ.KS PUNE ; # DATED : 15 TH JANUARY 2016. LRH'K $ %!' ( / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. CIT (A) - I , PUNE 4. 5. 6. CIT-I, PUNE ' *, *, IQ.KS / DR, ITAT, A PUNE; / GUARD FILE. / BY ORDER , ' //TRUE COPY// / * / SR. PRIVATE SECRETARY *, IQ.KS / ITAT, PUNE