ITO, Kolhapur V. Imran Badshah Bagwan, Kolhapur

ITA 1324/PUN/2012

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7584 (ITAT-PUNE)
• Duration Of Justice: 5 year(s) 1 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-08-2017
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 23-02-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 15-06-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Unexplained investment; Search and seizure; Loose papers; Document seized; Principle of natural justice; Corroborative evidences; Competent authority; Block assessment; Notional interest; Reason to believe; Documents seized
• Section: 143(3); 153A; 68; 132; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM SL. NO. ITA/CO NO. NAME OF APPELLANT NAME OF RESPONDENT ASST. YEAR 1 7 1225/PUN/2012 TO 1231/PUN/2012 SHRI BADSHA ALLABAX BAGWAN, BAGWAN HOUSE, NO.499, PARVATI SAH, SANSTHA, NEAR ONKARESHWAR TEMPLE, ICHALKARANJI . PAN: ABFPB9592G THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, KOLHAPUR. 1999 - 2000 2001 - 02 2002 - 03 2003 - 04 2004 - 05 2005 - 06 2006 - 07 8 1238/PUN/2012 SHRI BADSHA ALLABAX BAGWAN, BAGWAN HOUSE, NO.499, PARVATI SAH, SANSTHA, NEAR ONKARESHWAR TEMPLE, ICHALKARANJI. PAN: ABFPB9592G THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, KOLHAPUR 2000 - 01 9 - 16 1312/PUN/2012 TO 131 9 /PUN/2012 THE INCOME TAX OFFICER, (CENTRAL), KOLHAPUR. SHRI BADSHA ALLABAX BAGWAN, BAGWAN HOUSE, NO.499, PARVATI SAH, SANSTHA, NEAR ONKARESHWAR TEMPLE, ICHALKARANJI , KOLHAPUR. PAN: ABFPB9592G 1999 - 20 00 2000 - 01 2001 - 02 2002 - 03 2003 - 04 2004 - 05 2005 - 06 2006 - 07 17 - 23 1195/PUN/2012 TO 1201/PUN/2012 SHRI IMRAN BADSHA BAGWAN, BAGWAN HOUSE, NO.499, PARVATI SAH, ONKARESHWAR TEMPLE, ICHALKARANJI. PAN: AILPB2309N THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, KOLHAPUR 1999 - 2 000 2001 - 02 2002 - 03 2003 - 04 2004 - 05 2005 - 06 2006 - 07 24 - 28 1320/PUN/2012 TO 1324/PUN/2012 THE INCOME TAX OFFICER, (CENTRAL), KOLHAPUR. SHRI IMRAN BADSHAH BAGWAN, BAGWAN HOUSE NO.499, PARVATI SAH, SANSTHA, NEAR ONKARESHWAR TEMPLE, ICHALKARANJI, KOLHAPUR. PAN: AILPB2309N 2002 - 03 2003 - 04 2004 - 05 2005 - 06 2006 - 07 29 1366/PUN/2012 THE INCOME TAX OFFICER, (CENTRAL), KOLHAPUR. SHRI IMRAN BADSHAH BAGWAN, BAGWAN HOUSE NO.499, PARVATI SAH, SANSTHA, NEAR ONKARESHWAR TEMPLE, ICHALKARANJI, KOLHAPUR. PAN: AILPB2309N 2001 - 02 2 ITA NOS.1225 TO 1231/PUN/2012 & ORS 30 - 33 1191/PUN/2012 TO 1194/PUN/2012 SHRI MOHSIN BADSHA BAGWAN, BAGWAN HOUSE, NO.499, PARVATI SAH, SANSTHA, NEAR ONKARESHWAR TEMPLE, ICHALKARANJI. PAN: AILPB2307C THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, KOLHAPUR. 2003 - 04 2004 - 05 2005 - 06 2006 - 07 34 - 37 1357/PUN/2012 TO 1360/PUN/2012 THE INCOME TAX OFFICER, CENTRAL, KOLHAPUR. SHRI MOHSIN BADSHAH BAGWAN, BAGWAN HOUSE NO.499, PARVATI SAH. SANSTHA, NEAR ONKARESHWAR TGEMPLE, ICHALKARANJI, KOLHAPUR . PAN: AILPB2307C 2003 - 04 2004 - 05 2005 - 06 2006 - 07 38 - 45 1217/PUN/2012 TO 1224/PUN/2012 SHRI KHATUNBI BADSHA BAGWAN, BAGWAN HOUSE NO.499, PARVATI SAH.SANSTHA, NEAR ONKARESHWAR TEMPLE, ICHALKARANJI. PAN: AAYPB5128J THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, KOLHAPUR. 1999 - 2000 2000 - 01 2001 - 02 2002 - 03 2003 - 04 2004 - 05 2005 - 06 2006 - 07 46 - 53 1334/PUN/2012 TO 1341/PUN/2012 THE INCOME TAX OFFICER, CENTRAL, KOLHAPUR. SHRI KHATUNBI BADSHA BAGWAN, BAGWAN HOUSE NO.499, PARVATI SAH.SANSTHA, NEAR ONKARESHWAR TEMPLE, ICHALKARANJI. PAN: AAYPB5128J 1999 - 2000 2000 - 01 2001 - 02 2002 - 03 2003 - 04 2004 - 05 2005 - 06 2006 - 07 54 - 59 1232/PUN/2012 TO 1237/PUN/2012 SHRI IRFAN BADSHA BAGWAN, BAGWAN HOUSE NO.499, PARVATI SAH. SANSTHA, NEAR ONKARESHWAR TEMPLE, ICHALKARANJI. PAN: AILPB231 0 H THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, KOLHAPUR. 1999 - 2000 2002 - 03 2003 - 04 2004 - 05 2005 - 06 2006 - 07 60 - 64 1361/PUN/2012 TO 1365/PUN/2012 THE INCOME TAX OFFICER, CENTRAL, KOLHAPUR. SHRI IRFAN BADSHA BAGWAN, BAGWAN HOUSE NO.499, PARVATI SAH. SANSTHA, NEAR ONKARESHWAR TEMPLE, ICHALKARANJI. PAN: AILPB2310H 200 2 - 03 2003 - 04 2004 - 05 2005 - 06 2006 - 07 ASSESSEE BY : SHRI M.K. KULKARNI REVENUE BY : SHRI RAJEEV KUMAR, CIT / DATE OF HEARING: 12.06.2017 / DATE OF PRONOUNCEMENT: 11 . 0 8 .2017 3 ITA NOS.1225 TO 1231/PUN/2012 & ORS / ORDER PER SUSHMA CHOWLA, JM: THE PRESENT BUNCH OF APPEALS FILED BY CONNECTED ASSESSEE ARE AGAINST CONSOLIDATED ORDER OF THE CIT(A) DATED 21.03.2012 IN THE CASE OF EACH OF THE ASSESSEE RELATING TO DIFFERENT ASSESSMENT YEARS FROM ASSESSMENT YEARS 1999 - 2000 TO 2006 - 07 AGAINST ORDERS PASSED UNDER SEC TION 143(3) R.W.S. 153A(B) OF THE INCOME TAX ACT , 1961 (IN SHORT THE ACT) . 2. THE PRESENT BUNCH OF APPEALS RELATING TO CONNECTED ASSESSEE ON SIMILAR ISSUE S WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. HOWEVER, FIRST REFERENCE IS BEING MADE TO THE FACTS AND ISSUES IN ITA NO.1230/PUN/2012 AND ITA NO.131 8 /PUN/2012, RELATING TO ASSESSMENT Y EAR 2005 - 06 TO ADJUDICATE THE ISSUE RAISED IN THE CASE OF SHRI BADSHA ALLABAX BAGWAN . 3 . THE ASSESSEE IN ITA NO.1230/PUN/2012 HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEGAL GROUNDS OF APPEAL WERE RAISED BEFORE LD.CIT(A) THAT THE ASSESSMENT WAS ILLEGAL AND WITHOUT JURISDICTION FRAMED BY A.O. UNDER S. 153A R.W.S. 143(3) AFTER SEARCH AND SEIZURE ACTION UNDER S.132(1) OF THE ACT IN THE ABSENCE OF SERVICE OF MANDATORY NOTICE UNDER S. 143(2) OF THE ACT. THE LD. CIT(A) WAS NOT JUSTIFIED IN REJECTING THIS LEGAL GROUND SUPPORTED BY JUDICIAL PRECEDENTS IN T HE MATTER. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE CHALLENGE TO VALIDITY OF THE ASSESSMENT COMPLETED IN THE ABSENCE OF SERVICE OF MANDATORY NOTICE U/S 143(2) OF THE ACT WAS RAISED BEFORE A.O. ALSO BEFORE PARTICIPATING IN THE ASSESSMEN T PROCEEDINGS AND THEREFORE, PROVISO TO S. 292BB APPLIES AND IN VIEW OF THIS THE PROVISIONS OF S. 292BB BECOME INAPPLICABLE. THE JUDGMENT OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF ASHOK CHADHA V. ITO IS DISTINGUISHABLE IN LAW. THE CAREFUL PERUSAL OF THE PROVISIONS OF S. 153A WOULD 4 ITA NOS.1225 TO 1231/PUN/2012 & ORS REVEAL THAT IT IS SERVED FOR CALLING OF THE RETURN OF INCOME WHERE SEARCH HAS BEEN CONDUCTED. AND THAT IS WHY NON - OBSTENTI CLAUSE IN RESPECT OF S. 139 HAS BEEN ENACTED. THE SECTION DOES NOT TALK OF THE ANY ASSESSMENT OR ASSESSMENT PROCEDURE IN ISOLATION UNDER THAT SECTION. THE RELIANCE OF LD.CIT(A) ON THE DELHI HIGH COURT JUDGMENT (SUPRA) IS MISPLACED. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD.CIT(A) WAS NOT JUSTIFIED IN HOLDING THAT THE PROVISIONS OF S. 143(2) DO NOT APPLY TO A RETURN FILED UNDER S. 153A AND IT CANNOT BE CONSTRUED TO MEAN THAT PROCEDURE FOR COMPLETION OF ASSESSMENT ENACTED UNDER S. 143(3) WOULD ALSO FOLLOW. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD.CIT(A) WAS NOT JUSTIFIED IN HOLDING THAT PROVISIONS OF S. 143 ARE GENERAL IN NTURE AND ARE MEANT FOR REGULAR ASSESSMENT ONLY. THIS IS CONTRARY TO THE PRECEDENT PRONOUNCED BY HON'BLE SUPREME COURT IN HOTEL BLUE MOONS CASE (SUPRA). 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW AND IN VIEW OF GROUNDS OF APPEAL AT 1 TO 4 ABOVE AND CONSIDERING THE DECISION OF THE LD. CIT(A) THAT NO NOTICE UNDER S. 143(2) IS REQUIRED TO BE SERVED THEREFORE IN THE ABSENCE OF PROPER SERVICE OF MANDATORY NOTICE U/S 143(2) OF THE ACT THE ASSESSMENT BE DECLARED AB - INITIO VOLD AND WITHOUT JURISDICTION AND IT BE QUASHED. 6. ON THE FACTS AND CIRCUMSTANCE OF THE CASE AND IN LAW TH E LD. CIT(A) WAS NOT JUSTI FIED IN SUSTAINING THE ADDITION OF RS. 6,40,306/ - OUT OF AGRICULTURAL INCOME DECLARED BY THE ASSESSEE HAVING SUFFICIENT EXTENT OF COMMON AGRICULTURAL HOLDINGS IN THE FAMILY. THE DIFFERENCE SO ARRIVED AT AND MADE TAXABLE IN THE AB SENCE OF ANY SEIZED MATERIAL DISPROVING THE EXTENT OF AGRICULTURAL INCOME DECLARED BY THE ASSESSEE BE DELETED. 7. ON THE FACT AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD.CIT(A) WAS NOT JUSTIFIED IN ESTIMATING NOTIONAL INTEREST @ 1%P.M. RECEIVED ON ADV ANCES PAID OF RS. 6,83,514/ - FOR TAXATION IN THE ABSENCE OF ANY SEIZED MATERIAL IN SEARCH ACTION U/S 132(1) AND THE SAME CANNOT BE MADE TAXABLE WHEN THE LD.CIT(A) HIMSELF HOLDS THAT IT WAS NOTIONAL CHARGE IN NATURE. THE SAME BE QUASHED AS BEING WITHOUT JURISDICTION. 8. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD.CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS.87,069/ - ON ACCOUNT OF NEGATIVE BALANCE IN CASH FLOW. THE SAME BE DELETED. 9. ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS.1,25,000/ - MADE ON ACCOUNT OF UNEXPLAINED CREDITORS. THE ADDITION BE DELETED. 10. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD.CIT(A) WAS UNDER BOUNDEN DUTY TO PASS HIS SPEAKING ORDERS ON THE GROUND RAISED REGARDING INVESTMENT IN LAND AND PLOT OF RS.3,11,749/ - . THE SOURCE OF INVESTMENT HAS BEEN PROVED BY CASH FLOW STATEMENT. IN VIEW OF THIS ADDITION GETS SUSTAINED. IT BE QUASHED. 11. ON THE FACTS AND CIRCU MSTANCES OF THE CASE AND IN LAW THE LD.CIT(A) WAS UNDER BOUNDEN DUTY TO PASS HIS SPEAKING ORDERS ON THE GROUND RAISED REGARDING INVESTMENT IN DARGAWALA COMPLEX OF RS.87,672/ - . THE SOURCE OF INVESTMENT HAS BEEN PROVED BY CASH FLOW STATEMENT. IN VIEW OF TH IS ADDITION GETS SUSTAINED. IT BE QUASHED. 12. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD.CIT(A) WAS 5 ITA NOS.1225 TO 1231/PUN/2012 & ORS UNDER BOUNDEN DUTY TO PASS HIS SPEAKING ORDERS ON THE GROUND RAISED REGARDING INVESTMENT BALAJI ENTERPRISES OF RS. 20,00,000/ - . THE SO URCE OF INVESTMENT HAS BEEN PROVED BY CASH FLOW STATEMENT. IN VIEW OF THIS ADDITION GETS SUSTAINED. IT BE QUASHED. 13. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD.CIT(A) WAS UNDER BOUNDEN DUTY TO PASS HIS SPEAKING ORDERS ON THE GROUND RAISED REGARDING LIC PREMIUM OF RS.5,41,087/ - . THE SOURCE OF INVESTMENT HAS BEEN PROVED BY CASH FLOW STATEMENT. IN VIEW OF THIS ADDITION GETS SUSTAINED. IT BE QUASHED. 14. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD.CIT(A) WAS UNDER BO UNDEN DUTY TO PASS HIS SPEAKING ORDERS ON THE GROUND RAISED REGARDING POST OFFICE DEPOSITS OF RS. 17,22,361/ - . THE SOURCE OF INVESTMENT HAS BEEN PROVED BY CASH FLOW STATEMENT. IN VIEW OF THIS ADDITION GETS SUSTAINED. IT BE QUASHED. 15. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD.CIT(A) WAS UNDER BOUNDEN DUTY TO PASS HIS SPEAKING ORDERS ON THE GROUND RAISED REGARDING INVESTMENT IN KURUNDWAD URBAN FIXED DEPOSIT OF RS.25,00/ - . THE SOURCE OF INVESTMENT HAS BEEN PROVED BY CASH FLOW STATEMEN T. IN VIEW OF THIS ADDITION GETS SUSTAINED. IT BE QUASHED. 16. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEVY OF INTEREST U/S 234A/234B AND 234C IS NOT JUSTIFIED AND IN THE CIRCUMSTANCES IT BE DELETED. 17. THE APPELLANT CRAVES/LEAVE TO ADD, AMEND OR ALTER ANY OF THE ABOVE GROUNDS OF APPEAL. 4 . THE ASSESSEE IN ITA NO.1230/PUN/2012 HAS ALSO RAISED THE FOLLOWING ADDITIONAL GROUNDS OF APPEAL : - 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE SEARCH AND SEIZURE ACTION CONDUCTED AGAINST THIS APPELLANT IS NOT VALID IN THE ABSENCE OF EXISTENCE OF REASON TO BELIEVE ABOUT EXISTENCE OF ONE OR MORE OF THE EVENTUALITIES CATALOGUED IN CLAUSES (A) AND (C) OF SUB - SECTION (1) OF S. 132 WHICH IS THE SINE QUA NON TO ENTITLE THE AUTHO RITY TO MAKE AUTHORIZATION AS REQUIRED BY CL. (A) AND (B)? 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW AND FOR HAVING RECOURSE TO ASSESSMENT FOR BLOCK PERIOD UNDER CHAPTER XIV A VALID SEARCH UNDER S. 132 OF CH. XIII, IS A CONDITION PRECEDENT AND A MERE FACT OF SEARCH IS NOT ENOUGH TO GIVE JURISDICTION TO A.O. HAVE RECOURSE TO PROVISION UNDER CH. XIV OF THE ACT FOR COMPLETION OF ASSESSMENT UNDER SS. 153A TO 153C OF THE ACT? 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW AND FOR HAVING RECOURSE OF BLOCK ASSESSMENT AS PROVIDED IN SS. 153A TO 153C OF THE ACT OF THE AUTHORITY BEFORE ORDERING THE EXTREME STEP OF SEARCH ACTION U/S 132 WAS REQUIRED TO BE SATISFIED IN CONSEQUENCE OF INFORMATION IN HIS POSSESSION ABOUT THE EX ISTENCE OF REASON FOR EVENTUALITIES CATALOGUED IN CL. (A) OF SUB - SECTION (1) OF S. 132 SINCE UNDER CL. (A) THE SPECIFIC DOCUMENT OR BOOKS OF ACCOUNT REQUIRED TO BE PRODUCED ARE MANDATORILY REQUIRED TO BE SPECIFIED ? IF THIS CONDITION IS NOT SATISFIED THE S EARCH WILL NOT BE VALID AND THE CONSEQUENT ASSESSMENTS FRAMED WOULD BE BAD IN LAW AND WITHOUT JURISDICTION? 6 ITA NOS.1225 TO 1231/PUN/2012 & ORS 4. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW AND FOR HAVING RECOURSE TO BLOCK ASSESSMENT AS PROVIDED IN S. 153A TO 153C OF THE A CT THE AUTHORITY, BEFORE ORDERING EXTREME STEP OF SEARCH ACTION U/S 132 WAS REQUIRED TO BE SATISFIED IN CONSEQUENCE OF INFORMATION IN HIS POSSESSION ABOUT EVENTUALITY CATALOGUED IN CL. (B) OF SUB - SECTION (1) OF S. 132, WHICH MANDATES TO RECORD THAT ANY PER SON TO WHOM A SUMMONS OR NOTICE HAS BEEN ISSUED OR MIGHT BE ISSUED WILL NOT, OR WOULD NOT, PRODUCE OR CAUSE TO BE PRODUCED ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS WHICH WILL BE USEFUL FOR, OR RELEVANT TO ANY PROCEEDINGS UNDER THIS ACT? IT IS MANDATORY TO S PECIFY SUCH POSITION IN THE REASONS RECORDED AND IN THE EVENT OF NON - SATISFACTION OF THIS CONDITION THE SEARCH ACTION WILL BE INVALID AND CONSEQUENT ASSESSMENTS ALSO WILL BECOME ILLEGAL AND WITHOUT JURISDICTION? 5. WHETHER ON THE FACTS AND CIRCUMSTANCES O F THE CASE AND IN LAW AND FOR HAVING RECOURSE TO BLOCK ASSESSMENT AS PROVIDED IN S. 153A TO 153C THE AUTHORITY BEFORE ORDERING THE EXTREME STEP OF SEARCH ACTION U/S 132 WAS REQUIRED TO BE SATISFIED ABOUT THE EXISTENCE OF REASONS FOR EVENTUALITY CATALOGUED IN CL. (C) OF SUB - SECTION (1) OF S. 132 SINCE UNDER THE CL. (C) IT IS MANDATORILY REQUIRED TO BE SPECIFIED THAT ANY PERSON IS IN POSSESSION OF ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING AND SUCH MONEY BULLION, JEWELLERY OR OTHER VALU ABLE ARTICLE OR THING REPRESENTS EITHER WHOLLY OR PARTLY INCOME OR PROPERTY WHICH HAS NOT BEEN OR WOULD NOT BE DISCLOSED FOR THE PURPOSES OF ASSESSMENT UNDER THE ACT? IF THIS CONDITION IS NOT SATISFIED THE SEARCH ACTION WILL BECOME INVALID AND THE CONSEQU ENT ASSESSMENTS FRAMED WOULD ALSO BE BAD IN LAW WITHOUT JURISDICTION? A STIFFER BURDEN LIES ON THE AUTHORIZING AUTHORITY TO JUSTIFY THE GROUNDS OF HIS BELIEF UNDER CL. (C) AND HON'BLE TRIBUNAL IS BOUND TO EXAMINE WHETHER THE AUTHORITY HAS DISCHARGED SUCH B URDEN? 6. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE SEARCH ACTION CONDUCTED AGAINST THE PRESENT APPELLANT - ASSESSEE WAS SIMPLY BASED ON SATISFACTION NOTE PREPARED BY THE AUTHORITY IS VALID IN LAW SINCE SATISFACTION NOTE CANNOT C ONSTITUTE INFORMATION? 7. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW AND SINCE THE ASSESSMENT IN THE PRESENT CASE MADE UNDER CHAPTER XIV CONSEQUENT UPON SEARCH ACTION U/S 132 AND HAS BEEN SPECIFICALLY CHALLENGED THAT THE CIRCUMSTANCES CONTEMPLATED UNDER S. 132(1) DID NOT EXIST, THIS IS A MATTER WHICH GOES TO THE ROOT OF THE MATTER ABOUT JURISDICTION OF AUTHORITY TO PROCEED UNDER CH. XIV, THIS HON'BLE TRIBUNAL WOULD BE WITHIN ITS JURISDICTION TO GO INTO THE QUESTION AS TO WHETHER THE SEA RCH WAS CONDUCTED CONSEQUENT UPON THE AUTHORIZATION HAVING BEEN ISSUED, VALIDLY OR NOT. 8. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW AND CONSIDERING THE CONDITION CATALOGUED IN CL. (C) OF SUB - SECTION (1) OF S.132 MERE POSSESSION OF MONEY BULLI ON, JEWELLERY OR SUCH VALUABLE ARTICLE OR THING PER SE WOULD NOT BE SUFFICIENT TO ENABLE THE COMPETENT AUTHORITY TO FORM BELIEF THAT THE SAME HAD NOT BEEN OR WOULD NOT BE DISCLOSED FOR THE PURPOSES OF S. 132(1)(C) OF THE ACT. WHAT IS REQUIRED IS SOME CONC RETE MATERIAL TO ENABLE A REASONABLE PERSON TO FORM SUCH A BELIEF. CLEARLY NO CONDITION UNDER CL. (C) HAS BEEN SATISFIED IN THIS CASE. THE SEARCH BEING NOT VALID THE CONSEQUENT ASSESSMENTS MADE ARE ILLEGAL AND WITHOUT JURISDICTION? 5. IN THE FIRST INS TANCE, IT MAY BE MENTIONED THAT IN THIS BUNCH OF APPEALS, THE ASSESSEE HAD FILED ADDITIONAL GROUNDS OF APPEAL IN ALL THE CASES THAT SEARCH 7 ITA NOS.1225 TO 1231/PUN/2012 & ORS ACTION CONDUCTED AGAINST THE ASSESSEE UNDER SECTION 132(1) OF THE ACT WAS NOT VALID, SINCE THE CONDITIONS LAID DOWN I N THE SAID SECTION WERE NOT SATISFIED. THE ASSESSEE HOWEVER, BY WAY OF LETTER DATED 27.05.2016 HAS DECIDED NOT TO PRESS THE ADDITIONAL GROUNDS OF APPEAL. SIMILAR LETTER HAS BEEN FILED BY EACH OF THE ASSESSEE BEFORE US, WHEREIN THE ADDITIONAL GROUNDS OF A PPEAL RAISED HAVE NOT BEEN PRESSED. IN VIEW THEREOF, WE DISMISS THE ADDITIONAL GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN THE BUNCH OF APPEALS AS NOT PRESSED. 6. THE ASSESSEE DURING THE COURSE OF HEARING HAS FURTHER NOT PRESSED CERTAIN GROUNDS OF APPEAL RAISED IN INDIVIDUAL APPEALS. IN ITA NO.1230/PUN/2012, THE ASSESSEE HAS NOT PRESSED GROUNDS OF APPEAL NO.1 TO 5 AND ALSO GROUNDS OF APPEAL NO.10 TO 15, HENCE THE SAME ARE DISMISSED AS NOT PRESSED. IT MAY BE CLARIFIED HEREIN ITSELF THAT THE GROUNDS OF APPEAL NO.1 TO 5 DEAL WITH JURISDICTIONAL ISSUE OF FRAMING OF ASSESSMENT UNDER SECTION 153A R.W.S. 143(3) OF THE ACT AND ISSUE OF NOTICE UNDER SECTION 143(2) OF THE ACT. IN GROUNDS OF APPEAL NO.10 TO 15, THE ISSUE W AS RAISED AGAINST VARIOUS ADDITIONS MADE IN THE HANDS OF ASSESSEE IN ASSESSMENT YEAR 2005 - 06. 7. THE OTHER ASSESSEE S IN THE BUNCH OF APPEALS IN EACH OF THE YEARS HA VE ALSO NOT PRESSED THE JURISDICTIONAL ISSUE OF INITIATION OF PROCEEDINGS AND COMPLETION OF ASSESSMENT UNDER SECTION 153A R.W .S. 143(3) OF THE ACT. THE SAID ADDITIONAL GROUNDS OF APPEAL ARE NOT PRESSED VIDE SEPARATE LETTERS DATED 27.05.2016 RESPECTIVELY . HENCE, T HE SAID ADDITIONAL GROUNDS OF APPEAL IN THE CASE OF EACH OF THE ASSESSEE ARE THUS, DISMISSED AS NOT PRESSED. SIMILA RLY, THE JURISDICTIONAL ISSUE OF FRAMING THE ASSESSMENT BY WAY OF GROUNDS OF APPEAL NO.1 TO 5 HAVE NOT BEEN PRESSED BY ANY OF THE ASSESSEE IN THE BUNCH OF APPEALS 8 ITA NOS.1225 TO 1231/PUN/2012 & ORS EXCEPT IN ASSESSMENT YEAR 1999 - 2000 IN EACH CASE, IN WHICH IT DOES NOT AR I SE. HENCE, THE SAI D JURISDICTIONAL ISSUE OF FRAMING THE ASSESSMENT UNDER SECTION 153A R.W.S. 143(3) OF THE ACT AND ISSUE OF NOTICE UNDER SECTION 143(2) OF THE ACT IS DISMISSED IN THE WHOLE BUNCH OF APPEALS EXCEPT FOR THE PROCEEDINGS IN ASSESSMENT YEAR 1999 - 2000 WHICH WERE B EYOND SIX YEARS POSTULATED IN SECTION 153A OF THE ACT. 8. NOW, COMING TO THE APPEAL IN ITA NO.1230/PUN/2012 RELATING TO ASSESSMENT YEAR 2005 - 06, WHEREIN THE BALANCE GROUNDS OF APPEAL FOR ADJUDICATION ARE GROUNDS OF APPEAL NO.6 TO 9. 9. THE REVENUE IS ALS O IN APPEAL AGAINST THE PARTIAL RELIED GIVEN BY THE CIT(A), AGAINST WHICH THE ASSESSEE HAS RAISED THE AFORESAID GROUNDS OF APPEAL NO.6 TO 9, WHICH WE SHALL TAKE UP SIMULTANEOUSLY. IT MAY BE POINTED OUT HEREIN ITSELF THAT THOUGH VARIOUS ADDITIONS WERE MADE IN DIFFERENT ASSESSMENT YEARS BUT THE REVENUE HAS FILED COMPOSITE GROUNDS OF APPEAL WHICH RELATE TO THE APPEALS IN ASSESSMENT YEARS 2000 - 01 TO 2006 - 07. FOR ASSESSMENT YEAR 1999 - 2000, THE GROUNDS OF APPEAL FILED BY THE REVENUE ARE AT VARIANCE. FIRST, WE PROCEED TO TAKE UP THE ISSUES RAISED BY THE REVENUE IN ASSESSMENT YEARS 2000 - 01 TO 2006 - 07. 10. THE GROUNDS OF APPEAL RAISED BY THE REVENUE IN ITA NO.1318/PUN/2012, RELATING TO ASSESSMENT YEAR 2005 - 06 READ AS UNDER : - 1. (I) THE LD. CIT(A) ERRED IN NOT CONFIRMING THE ADDITIONS MADE BY THE A.O ON THE ISSUE OF AGRICULTURAL INCOME FROM SALE OF SUGARCANE, VEGETABLES & OTHER - AGRICULTURAL INCOME FROM MANGOS, GRASS ETC IN TOTO DISREGARDING THE EVIDENCES BROUGHT OUT IN THE ASSESSMENT ORDER. (II) (A) THE LD. CIT(A) FAILED TO APPRECIATE THAT THE ASSESSEE SOUGHT TO 9 ITA NOS.1225 TO 1231/PUN/2012 & ORS EXPLAIN THE SOURCE OF THE ASSETS FOUND DURING SEARCH THROUGH AGRICULTURAL INCOME AND THEREFORE ADDITION ON THE ISSUE OF AGRICULTURAL INCOME IS IN ESSENCE ADDITION OF UNEXPLAINED INVESTMENT OF THE ASSESSEE IN VARIOUS ASSETS. (B) THE LD. CIT(A) FAILED TO APPRECIATE THAT ONUS IS ON THE ASSESSEE TO EXPLAIN THE SOURCE OF THE ASSETS AND ASSESSEE FAILED TO DISCHARGE THE ONUS CAST ON HIM THROUGH DOCUMENTARY EVIDENCE. (III) THE LD. CIT(A) FAILED TO APPRECIATE THAT THE ASSESSEE IS A NON - FILER, NO BOOKS OF ACCOUNT HAVE BEEN MAINTAINED AND THE ASSETS HAVE BEEN UNEARTHED ONLY AS A RESULT OF SEARCH ACTION. THEREFORE, ALLOWING CLAIM OF EXEMPT AGRICULTURAL INCOME AS SOURCE OF ASSETS WITHOUT DOCUMENTARY EVIDENCE WOULD BE GIVING UNDUE ADVANTAGE TO THE ASSESSEE VIS - A - VIS LAW ABIDING ASSESSEES. (IV) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) WAS JUSTIFIED IN PARTIALLY DELETING THE ADDITION ON THE ISSUE OF AGRICULTUR AL INCOME IGNORING THE FACT THAT THE SHARE OF 46% OF NET AGRICULTURAL INCOME TO ASSESSEE IN BATAI/ ADHE1ISYSTEM MEANS 46% OF NET AGRICULTURAL INCOME TO FARMER ALSO, WHICH LEAVES ONLY 8% TOWARDS AGRICULTURAL EXPENSES FOR ALL THE ABOVE ASST. YEARS, WHICH IS NOT ACCEPTABLE. 2. (I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) WAS WAS JUSTIFIED IN GIVING RELIEF TO THE ASSESSEE FOR A.Y'S 2000 - 01, 2001 - 02, 2003 - 04 TO 2005 - 06 ON THE ISSUE OF NEGATIVE CASH BALANCE BY REWORKI NG THE CASH FLOW STATEMENTS IGNORING THE EVIDENCES IN RESPECT OF INVESTMENTS AND EXPENSES OF THE ASSESSEE BROUGHT OUT IN THE ASSESSMENT ORDER? (II) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) WAS JUSTIFIED IN HOLD ING THE OPENING BALANCE SHOWN BY THE ASSESSEE AS CORRECT IGNORING THE CASH FLOW STATEMENT WORKED OUT BY THE AO FOR THE ASST. YEAR 1999 - 2000, WHEN ASSESSEE WAS NOT ABLE TO EXPLAIN THE OPENING BALANCE WITH COGENT EVIDENCE. 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) WAS JUSTIFIED IN ALLOWING RELIEF TO THE ASSESSEE ON THE ISSUE OF INVESTMENT IN DARGAWALE COMPLEX FOR THE A.Y'S. 2001 - 02, 2004 - 05 & 2005 - 06 IGNORING THAT THERE IS NO EVIDENCE TO PROVE INVESTMENT OF SMT KH ATUNBI IN THE SAID ASSET? 4. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION MADE FOR ASST. YEAR 05 - 06 IN RESPECT OF LOAN TO SANGLI PARTY NOT REFLECTED IN CASH FLOW STATEMENT IGNORING THE EVIDENCE CONTAINED IN SEIZED COUNTERFOIL OF THE BANK CHALLAN (PAGE NO. 1 OF LOOSE SHEET BUNDLE NO. 16)? 5. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION IN RESPECT O F INVESTMENT IN PANHALA AND ATHANI PROPERTY FOR A.Y. 2005 - 06 IGNORING THE CONTENTS OF THE SEIZED DIARY AND THE EVIDENCES BROUGHT OUT IN THE ASSESSMENT ORDER BY THE A.O? 6. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A ) WAS JUSTIFIED IN DELETING THE ADDITION IN RESPECT OF LOAN TO SHRI 10 ITA NOS.1225 TO 1231/PUN/2012 & ORS VIJAY TODGAL FOR A.Y'S. 2005 - 06 & 2006 - 07 IGNORING THE CONTENTS OF THE SEIZED DOCUMENTS CONTAINED AT INVENTORY NO. 16 AND THE EVIDENCES BROUGHT OUT IN THE ASSESSMENT ORDER BY THE A.O? 7. (I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION TOWARDS HOUSEHOLDS & OTHER PERSONAL EXPENSES FOR AYS 2001 - 02 TO 2006 - 07 IGNORING THE EVIDENCES CONTAINED IN DOCUMENTS SEIZED F ROM THE ASSESSEES PREMISES BROUGHT OUT IN THE ASSESSMENT ORDER BY THE A.O? (II) THE CIT(A) ERRED IN DELETING THE ADDITION OF RS.9,21,064/ - TOWARDS HOUSEHOLD & PERSONAL EXPENSES FOR AY 2004 - 05. 8. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD CIT(A) WAS JUSTIFIED IN GIVING RELIEF TO THE ASSESSEE BY REDUCING THE INTEREST TO 1% IGNORING THE EVIDENCES CONTAINED IN SEIZED RECORDS THAT THE ASSESSEE WAS CHARGING 2% INTEREST ON LOANS FOR ASST. YEARS 2000 - 01 TO 2006 - 07? 9. WHETHE R ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION TOWARDS INVESTMENT IN MONEY LENDING BUSINESS FOR ASST. YEARS 2000 - 01, 2002 - 03, 2003 - 04 & 2006 - 07 IGNORING THE EVIDENCES BROUGHT OUT IN THE ASSESSMENT ORDER BY THE A.O ? 10. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) WAS JUSTIFIED IN DELETING PARTIALLY ADDITION TOWARDS UNEXPLAINED CREDITORS FOR ASST. YEARS 2003 - 04 TO 2005 - 06 IGNORING THE FACT THAT THE ASSESSEE HAS FAILED TO DISCHARGE THE ONUS OF PROVING IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE CREDITORS. 11. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION TOWARDS UNEXPLAINED ADVANCES FOR AY 2005 - 06 IGNORING THE EVIDENCES BROUGHT OUT IN THE ASSESSMENT ORDER BY THE ASSESSING OFFICER? 12 . (I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION TOWARDS INVESTMENT IN BENAMI FDRS AND INTEREST CHARGED THEREON FOR AYS 2000 - 2001 TO 2006 - 07 IGNORING THE FACT THAT ASSESSEE COU LD NOT EXPLAIN SOURCES FOR THE SAID INVESTMENTS? (II) THE ORDER OF LD. CIT(A) DELETING THE ADDITION TOWARDS UNEXPLAINED INVESTMENT MADE BY THE ASSESSEE HOLDING THAT THE SUBSTANTIVE ADDITIONS HAVE BEEN CONFIRMED IN THE HANDS OF RESPECTIVE PATSANSTHAS IS E RRONEOUS AS SUBSTANTIVE ADDITIONS WERE NOT ACTUALLY CONFIRMED IN THE HANDS OF RECIPIENT PATSANSTHAS AS CLAIM OF RESPECTIVE PATSANSTHAS U/S 80P(2)(A)(I) HAS BEEN ALLOWED BY THE CIT(A) BY WHICH ENTIRE ADDITIONS U/S 68 OF THE ACT WERE NULLIFIED. 13. (I) WHE THER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION TOWARDS INVESTMENT IN MONEY LENDING BUSINESS UNDER THE GUISE OF BHISHI AND INTEREST CHARGED THEREON FOR AYS 2005 - 06 & 2006 - 07 IGNORING T HE FACT THAT ASSESSEE COULD NOT EXPLAIN SOURCES FOR' THE SAID INVESTMENTS? (II) THE ORDER OF LD. CIT(A) DELETING THE ADDITION TOWARDS UNEXPLAINED 11 ITA NOS.1225 TO 1231/PUN/2012 & ORS INVESTMENT MADE BY THE ASSESSEE HOLDING THAT THE SUBSTANTIVE ADDITIONS HAVE BEEN CONFIRMED IN THE HAND OF AM AN CHHOTE VYAPARI PAT SANSTHA, ICHALKARANJI, IS ERRONEOUS, AS SUBSTANTIVE ADDITIONS WERE NOT ACTUALLY CONFIRMED IN THE HANDS OF AMAN CHHOTE VYAPARI PAT SANSTHA, ICHALKARANJI AS CLAIM OF THE SAID PATSANSTHA U/S 80P(2)(A)(I) HAS BEEN ALLOWED BY THE CIT(A) BY WHICH ENTIRE ADDITIONS U/S 68 OF THE ACT WERE NULLIFIED. 14. WITHOUT PREJUDICE TO THE ABOVE GROUND LD CIT(A) HAS ERRED IN NOT EXERCISING HIS PLENARY POWERS WHICH ARE CONTERMINOUS WITH THAT OF ASSESSING OFFICER AS PER THE RATIO LAID DOWN BY CIT VS. KANPU R COAL SYNDICATE (1964) 53 ITR 225, 229 (SC). 15. THE APPELLANT PRAYS THAT THE ORDER OF THE LD CIT(A) BE VACATED AND THAT OF THE AO'S ORDER MAY BE RESTORED. 16. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND, MODIFY ANY OF THE ABOVE GROUNDS RAISED, ANY OTHER GROUNDS AT THE TIME OF PROCEEDINGS BEFORE THE HON'BLE TRIBUNAL WHICH MAY PLEASE BE GRANTED. 1 1 . THE ASSESSEE BY WAY OF GROUND OF APPEAL NO.6 IS AGGRIEVED B Y THE ORDER OF CIT(A) IN SUSTAINING THE ADDITION OF RS.6,40,306/ - OUT OF AGRICULTURAL INCOME DECLARED BY THE ASSESSEE. THE ISSUE IN GROUND OF APPEAL NO.7 RAISED BY THE ASSESSEE IS AGAINST ESTIMATION OF NOTIONAL INTEREST @ 11% PER MONTH RECEIVED ON ADVANCE S PAID OF RS.6,83,514/ - AND FURTHER VIDE GROUND OF APPEAL NO.8 AGAINST ADDITION OF RS.87,069/ - ON ACCOUNT OF NEGATIVE BALANCE IN CASH FLOW. THE ASSESSEE IS ALSO AGGRIEVED BY THE ADDITION OF RS.1,25,000/ - ON ACCOUNT OF UNEXPLAINED CREDITORS BY GROUND OF AP PEAL NO.9 . 1 2 . THE REVENUE IS IN APPEAL AGAINST THE ORDER OF CIT(A). THE REVENUE IN ASSESSMENT YEAR 2005 - 06 HAS RAISED THE GROUNDS OF APPEAL NO.1 AND 2 AGAINST ESTIMATION OF NET AGRICULTURAL INCOME IN HANDS OF ASSESSEE. FURTHER, GROUNDS OF APPEAL NO.3 TO 11 ARE RAISED AGAINST VARIOUS ADDITIONS MADE BY THE ASSESSING OFFICER WHICH HAVE BEEN DELETED BY THE CIT(A) INCLUDING ESTIMATION OF HOUSEHOLD EXPENSES. HOWEVER, AS POINTED OUT ABOVE, WE ARE MAKING REFERENCE TO THE FACTS IN ASSESSMENT YEAR 2005 - 06 TO AD JUDICATE THE ISSUE. 12 ITA NOS.1225 TO 1231/PUN/2012 & ORS 13. BRIEFLY, IN THE FACTS OF THE CASE, SEARCH UNDER SECTION 132 OF THE ACT WAS CONDUCTED AT THE RESIDENTIAL AS WELL AS BUSINESS PREMISES OF THE BADSHA BAGWAN GROUP OF ICHALKARANJI ON 18.05.2005. THE ASSESSEE SHRI BADSHA ALLABAX BAGWAN BEING ONE OF THE GROUP WAS ALSO COVERED UNDER SECTION 132 OF THE ACT. THE ASSESSEE HAD NOT FILED HIS RETURN OF INCOME UNDER SECTION 139(1) OF THE ACT. CONSEQUENT TO SEARCH, NOTICE UNDER SECTION 153A(A) OF THE ACT WAS ISSUED AND THE ASSESSEE WAS ASKED TO FURNISH THE RETURN OF INCOME WITHIN 30 DAYS FROM THE DATE OF RECEIPT OF NOTICE. IN RESPONSE THERETO, THE ASSESSEE FILED THE RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 1,89,490/ - AND AGRICULTURAL INCOME OF RS.23,79,093/ - . THE CASE OF ASSESSEE WAS PICK ED UP FOR SCRUTINY. THE ASSESSEE FIRST OBJECTED TO INITIATION OF PROCEEDINGS FOR ASSESSMENT SINCE THE NOTICE UNDER SECTION 143(2) OF THE ACT WAS NOT SERVED WITHIN ONE YEAR FROM FILING THE RETURN OF INCOME. THE ASSESSING OFFICER FIRST DECIDED THE ISSUE AG AINST THE ASSESSEE. IT MAY BE POINTED OUT HEREIN ITSELF THAT THE ASSESSEE HAD RAISED THE SAID GROUND OF APPEAL BUT HAS NOT PRESSED THE GROUND OF APPEAL. HENCE, THE SAME IS DECIDED AGAINST THE ASSESSEE. 14. THE SECOND ISSUE WHICH WAS ADJUDICATED BY THE A SSESSING OFFICER WAS THE QUANTUM OF AGRICULTURAL INCOME TO BE ASSESSED IN THE HANDS OF ASSESSEE. THE ASSESSEE HAD DECLARED INCOME FROM AGRICULTURE ON ACCOUNT OF SUGARCANE, VEGETABLES AND FRUIT TREES. THE DETAILS OF AGRICULTURAL INCOME ARE TABULATED AT PA GE 9 OF THE ASSESSMENT ORDER . THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS OF AGRICULTURAL EXPENSES ALONG WITH BILLS, SALE BILLS OF CROPS, DETAILS OF AGRICULTURAL OPERATIONS, 7/12 EXTRACTS OF AGRICULTURAL LAND OWNED BY THE ASSESSEE, CROP - WISE AREA OF LAN D UNDER CONSIDERATION AND AVERAGE YIELD OF ALL THE CROPS. THE ASSESSEE WAS ALSO ASKED TO FURNISH CHART IN RESPECT OF ALL HIS FAMILY MEMBERS 13 ITA NOS.1225 TO 1231/PUN/2012 & ORS SHOWING CROP - WISE AREA OF LAND UNDER CULTIVATION AS PER 7/12 EXTRACTS. THE ASSESSING OFFICER FROM THE DETAILS SUBM ITTED BY THE ASSESSEE NOTED THAT THE GROSS RECEIPTS FROM VEGETABLES AND EVEN FROM SUGARCANE VARIED IN CASE OF ALL THE FAMILY MEMBERS. THE ASSESSEE SUBMITTED BEFORE THE ASSESSING OFFICER THAT THE AGRICULTURAL LANDS OWNED BY THE FAMILY MEMBERS WERE CULTIVAT ED COLLECTIVELY AND THE CROP RAISED FROM THE LANDS WAS SOLD IN THE NAMES OF FAMILY MEMBERS RANDOMLY AND HE ADMITTED THAT WHERE THERE WAS NO CLEAR - CUT BIFURCATION AS TO CULTIVATION OF CROPS AND ITS SALE AMONGST THE FAMILY MEMBER S, THE ASSESSEE THUS, REQUEST ED TO CONSIDER THE AGRICULTURAL INCOME FOR THE FAMILY AS A WHOLE. THE ASSESSING OFFICER ACCEPTED THE CONTENTION OF ASSESSEE IN THIS REGARD AND AGRICULTURAL INCOME OF FAMILY WAS THUS, CONSIDERED AS A WHOLE AND FURTHER DIVIDED INTO NAMES OF VARIOUS FAMILY M EMBERS ACCORDING TO THEIR AGRICULTURAL LANDHOLDINGS. THE ASSESSING OFFICER THEREAFTER, COMPUTED THE AGRICULTURAL INCOME UNDER EACH OF THE HEAD SEPARATELY. IN RESPECT OF AGRICULTURAL INCOME FROM SUGARCANE, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE GRO UP HAD SHOW THE SALE OF SUGARCANE TO PRIVATE PARTIES BESIDE THE SALE OF SUGARCANE TO FACTORIES. THE SALE OF SUGARCANE TO PRIVATE PARTIES WAS ENTIRELY IN CASH AND NOT SUPPORTED BY ANY SALE BILL OR ANY OTHER EVIDENCE. THE ASSESSEE WAS ASKED TO EXPLAIN AS T O WHY ITS CLAIM OF AGRICULTURAL INCOME SHOULD NOT BE REJECTED. IN RESPONSE, THE ASSESSEE POINTED OUT THAT EVEN IF THE AVERAGE CROP YIELD PER ACRE IS SEEN, THEN, HAVING SUCH SUGARCANE YIELD CANNOT BE RULED OUT. THE ASSESSING OFFICER DID NOT ACCEPT THE CON TENTION OF ASSESSEE THAT JUST BECAUSE SUGARCANE YIELD WAS POSSIBLE, DOES NOT MEAN THAT THE ASSESSEE HAD GROWN THAT MUCH OF SUGARCANE AND SOLD THE SAME ALSO. IN THE ABSENCE OF ANY EVIDENCE OF BOTH THE AGRICULTURAL INPUTS AND OUTPUTS I.E. SALE BILLS ON ACCO UNT OF SALE OF SUGARCANE TO PRIVATE PARTIES, THE CLAIM OF ASSESSEE WAS REJECTED AND THE ASSESSEES RECEIPTS FROM 14 ITA NOS.1225 TO 1231/PUN/2012 & ORS SUGARCANE WERE CONSIDERED AS PER THE AMOUNTS CREDITED IN THE BANK ACCOUNT FROM THE SUGARCANE FACTORIES. ON THAT BASIS, THE AGRICULTURAL INCOME OF THE ASSESSEES FAMILY FROM SUGARCANE CONSIDERING THE AGRICULTURAL EXPENSES, WAS COMPUTED YEAR - WISE IN THE HANDS OF EACH OF THE PERSONS AS TABULATED AT PAGE 10 OF THE ASSESSMENT ORDER. THE ASSESSING OFFICER DIRECTED THAT TOTAL AGRICULTURAL INCOME FROM SUGARCANE AS IN COLUMN 7 WAS TO BE DIVIDED INTO VARIOUS FAMILY MEMBERS ON THE BASIS OF THEIR LANDHOLDING CONSIDERING THE AGRICULTURAL INCOME OF FAMILY AS A WHOLE. 15. IN RESPECT OF AGRIC ULTURAL INCOME FROM VEGETABLES AS SHOWN BY THE ASSESSEE, THE ASSESSING OFFICER NOTED THE FOLLOWING DISCREPANCIES : - A) ALL THE VEGETABLES SALES SHOWN BY THE ASSESSEE WERE IN CASH. B) THE VEGETABLES AS CLAIMED TO HAVE GROWN BY THE ASSESSEE WERE NOT MENTIONE D IN 7/12 EXTRACTS. C) THE ASSESSEE DID NOT FURNISH ANY DETAILS OF AGRICULTURAL INPUTS LIKE EXPENSES ON SEEDS, FERTILIZERS, PESTICIDES, TRANSPORTS EXPENSES, ETC. D) SUMMONS WERE SENT TO THE PERSONS TO WHOM THE ASSESSEE CLAIMED TO HAVE SOLD THE VEGETABLES A ND THEY WERE ASKED TO PRODUCE THE BILLS ISSUED AND THE BOOKS OF ACCOUNT FOR THE RELEVANT PERIOD. IN RESPONSE THERETO, NONE OF THE PERSONS COULD PRODUCE ANY COUNTERFOIL BILL ISSUED TO THE ASSESSEE GROUP OR ANY OTHER RECORD OR BOOKS OF ACCOUNT TO SUBSTANTIA TE ASSESSEES SALE OF VEGETABLES TO THOSE PERSONS. 16. IN VIEW OF THE ABOVE, THE ASSESSING OFFICER WAS OF THE VIEW THAT AGRICULTURAL INCOME SHOWN BY THE ASSESSEE WAS NOT CORRECT AND HE HAD INFLATED 15 ITA NOS.1225 TO 1231/PUN/2012 & ORS HIS AGRICULTURAL INCOME TO EXPLAIN INVESTMENTS IN UNEXPLA INED ASSETS. HOWEVER, CONSIDERING THAT, SOME VEGETABLES WOULD HAVE BEEN GROWN BY THE ASSESSEE AND GIVING CREDIT OF AGRICULTURAL INCOME FROM VEGETABLES TO THE ASSESSEE, NET AGRICULTURAL INCOME OF THE ASSESSEE FROM VEGETABLES WAS CONSIDERED AT RS.5,000/ - PE R ACRE AND THE ASSESSEE WAS SHOW CAUSED. THE ASSESSEE FURNISHED DETAILED REPLY IN RESPONSE THERETO AND QUESTIONED THE BASIS OF ARRIVING AT THE FIGURE OF RS.5,000/ - PER ACRE. IT WAS FURTHER POINTED OUT BY THE ASSESSEE THAT DURING THE COURSE OF SEARCH AT H IS RESIDENTIAL PREMISES, BILLS FOR SALE OF VEGETABLES WERE FOUND AND HE FURTHER STATED THAT ALL THE BILLS , WHO HAD PURCHASED VEGETABLES AT PAR AND CONFIRMED THE PURCHASE OF VEGETABLES FROM THE ASSESSEE GROUP AND SINCE THE ASSESSEE HAD FURNISHED ALL THE BIL LS, THEN THERE WAS NO NEED TO ESTIMATE THE YIELD IN THE HANDS OF ASSESSEE. HE FURTHER STATED THAT ENTRY IN 7/12 EXTRACTS IN RESPECT OF CROPS WERE MADE ONLY ONCE IN YEAR, WHEREAS THERE WERE AS MANY AS 2 - 3 CROPS OF VEGETABLE TAKEN IN A YEAR. CONSEQUENTLY, HE PLEADED THAT SOME OF VEGETABLE CROPS MIGHT HAVE BEEN MENTIONED IN 7/12 EXTRACTS. HE FURTHER PLACED RELIANCE ON CERTIFICATE OF AGRICULTURAL OFFICER FROM KARANATAKA, WHO HAD CERTIFIED THAT THE AVERAGE YIELD OF VEGETABLES GROWN IN BETWEEN SUGARCANE CROP W AS RS.10,000/ - PER ACRE. THE CONTENTIONS RAISED BY THE ASSESSEE WERE REJECTED AS PER PARA 35 AT PAGES 12 AND 13 OF THE ASSESSMENT ORDER. THE ASSESSEE VEHEMENTLY STRESSED THAT THERE WAS NO NEED TO ESTIMATE UNDISCLOSED INCOME ON THIS ACCOUNT SINCE THE FIGU RE OF RS.5,000/ - PER ACRE HAD NO BASIS WHATSOEVER. THE ASSESSING OFFICER REJECT ED THE CLAIM OF ASSESSEE IN THE ABSENCE OF ANY DAILY RECORD OF AGRICULTURAL ACTIVITY BEING MAINTAINED AND NO DETAILS BEING MAINTAINED IN RESPECT OF EXPENSES. SINCE THE ASSESSE E HAD SHOWN THE SALE OF VEGETABLES IN CASH, RECEIPTS COULD NOT BE VERIFIED IN THE ABSENCE OF ANY BANK ENTRIES AND SINCE ONLY SOME OF THE BILLS OF 16 ITA NOS.1225 TO 1231/PUN/2012 & ORS SALES OF VEGETABLE WERE FOUND DURING THE COURSE OF SEARCH, THE CONTENTION OF ASSESSEE TO REFER THE MATTER TO A GRICULTURAL EXPERTS WAS ALSO REFUSED AND THE ASSESSING OFFICER NOTED THAT IN ASSESSMENT YEAR 1999 - 2000, THE ASSESSEE HAD SHOWN GROSS RECEIPTS FROM VEGETABLES AT AROUND RS.6,000/ - PER ACRE WHICH WERE CONSIDERED AT AROUND RS.2400/ - PER ACRE AFTER DEDUCTING 4 0% OF THE EXPENSES THEREON. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE HAD INFLATED HIS AGRICULTURAL RECEIPTS FROM VEGETABLES AND IN THE ABSENCE OF PROPER DETAILS , BUT SINCE THE ASSESSEE WAS HAVING CERTAIN AGRICULTURAL INCOME FROM VEGETABLES, THE ASSESSING OFFICER ESTIMATED THE SAME AT RS.5,000/ - PER ACRE AND IT WORKED OUT TO RS.3,96,800/ - FOR 79.36 ACRES OF LAND SHOWN UNDER JOINT CULTIVATION OF ASSESSEES FAMILY. THE ASSESSING OFFICER FURTHER HELD THAT THE RECEIPTS ALONG WITH RECEIPTS FROM S UGARCANE HAD TO BE DIVIDED IN THE HANDS OF FAMILY MEMBERS ON THE BASIS OF THEIR LANDHOLDING. THE ASSESSING OFFICER FURTHER NOTED THAT THE ASSESSEE HAD SHOWN AGRICULTURAL INCOME FROM MANGOES AT RS.4,590/ - AND NET AGRICULTURAL INCOME FROM GRASS AT RS.8,49,3 00/ - . THE SALE OF BOTH THE MANGOES AND GRASS WAS IN CASH AND AS PER THE ASSESSING OFFICER, WERE NOT SUPPORTED BY SALE BILLS. THE ASSESSING OFFICER SHOW CAUSED THE ASSESSEE IN THIS REGARD. HOWEVER, REJECTING THE CONTENTION OF ASSESSEE SINCE NO EVIDENCE O F ANY AGRICULTURAL INPUTS AND OUTPUTS WITH REGARD TO AGRICULTURAL INCOME OF SALE OF GRASS AND MANGOES WAS FILED, THE CLAIM OF ASSESSEE WAS REJECTED. THE ASSESSING OFFICER THUS, COMPUTED THE AGRICULTURAL INCOME IN THE HANDS OF ASSESSEE ON THE BASIS OF AGRI CULTURAL RECEIPTS FROM SUGARCANE AND VEGETABLES. 17. THE NEXT ASPECT WHICH WAS NOTED BY THE ASSESSING OFFICER WAS ON THE BASIS OF CERTAIN LOOSE PAPERS FOUND DURING THE COURSE OF SEARCH AND FROM THE OFFICE PREMISES OF PATSANSTHA, THE ACCOUNTS OF CERTAIN FARMERS WERE FOUND, 17 ITA NOS.1225 TO 1231/PUN/2012 & ORS WHEREIN DETAILS OF AGRICULTURAL LAND GIVEN ON LEASE TO THE FARM ERS, TOTAL QUANTITY OF SUGARCANE SENT TO THE FACTORY, GROSS RECEIPTS FROM FACTORY, AGRICULTURAL EXPENDITURE AND ENTRY REGARDING GIVING 50% OF THE GROSS AMOUNT TO THE FARMERS WAS MENTIONED. THE ASSESSING OFFICER NOTED FROM THE NOTINGS THAT ON THESE SIX PAGES, IT WAS CLEAR THAT THE ASSESSEE , SHRI BADSHA HAD GIVEN HIS AGRICULTURAL LAND TO THE FARMERS ON LEASE AND WAS PAYING 50% OF THE AGRICULTURAL INCOME TO THE FARMERS, BUT HE WAS SHOWING FULL AMOUNT OF AGRICULTURAL RECEIPTS THROUGH THE CASH FLOW STATEMENT. FURTHER, FROM THE NOTE BOOK AT INVENTORY NO.86 O F ANNEXURE TO PANCHANAMA OF PAT SANSTHA, IT WAS SEEN THAT THE DETAILS OF NAME OF FARMER , H.P. OF MOTOR, DESCRIPTION OF LAND, ELECTRIC METER NUMBER, ELECTRIC BILL NUMBERS, AMOUNT OF BILLS AND DATE OF PAYMENT IN RESPECT OF VARIOUS FARMERS WERE MENTIONED. TH E ASSESSING OFFICER NOTED FROM THE NOTE BOOK IT WAS SEEN THAT SHRI BADSHA WAS PAYING ELECTRIC BILLS OF VARIOUS FARMERS TO WHOM HE HAD GIVEN HIS LAND FOR CULTIVATION. HE THUS, OBSERVED THAT SHRI BADSHA HAD GIVEN HIS AGRICULTURAL LANDS ON LEASE TO VARIOUS F ARMERS AND HE WAS PAYING 50% OF AGRICULTURAL RECEIPTS TO THEM. DURING THE COURSE OF SEARCH, IN REPLY TO ONE QUESTION, SHRI BADSHA HAD STATED THAT HE HAD PURCHASED AGRICULTURAL LANDS FROM TWO PERSONS AND HE HAD PAID ELECTRICITY BILLS OF THESE TWO ACCOUNTS. FURTHER, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, HIS STATEMENT WAS AGAIN RECORDED AND HE STATED THAT HE DOES NOT KNOW ABOUT THE NAMES MENTIONED AND HE HAD NOT PAID ANY ELECTRICITY BILLS. THE ASSESSING OFFICER THUS, SHOW CAUSED THE ASSESSEE AS TO WH Y 50% OF THE AGRICULTURAL RECEIPTS SHOULD NOT BE REDUCED IN THE HANDS OF ASSESSEE. THE ASSESSING OFFICER REJECTING THE EXPLANATION OF ASSESSEE HELD THAT HALF OF AGRICULTURAL INCOME FROM SUGARCANE AND VEGETABLES OF RS.20,05,697/ - WAS CONSIDERED TO BE GIVEN TO FARMERS AND ACCORDINGLY, AGRICULTURAL INCOME OF ASSESSEES FAMILY WAS REDUCED TO RS.10,02,848/ - . BIFURCATING THE AGRICULTURAL 18 ITA NOS.1225 TO 1231/PUN/2012 & ORS INCOME ON THE BASIS OF AGRICULTURAL LANDHOLDING, THE AGRICULTURAL INCOME OF SHRI BADSHA FOR AREA OF 48.44 ACREAS WORKED OUT T O RS.3,54,946/ - AND THE SAID FIGURE WAS ADOPTED IN CASH FLOW STATEMENT TO WORK OUT UNDISCLOSED INCOME OF THE FAMILY. 18. THE NEXT SET OF ADDITIONS MADE IN THE HANDS OF ASSESSEE WERE ON ACCOUNT OF VARIOUS INVESTMENTS, LOANS TO PARTIES AND HOUSEHOLD EXPENSE S AND OTHER EXPENSES MADE IN THE HANDS OF ASSESSEE INCLUDING THE INVESTMENT IN FDRS AND ALSO INTEREST ON CERTAIN LOANS. THE ASSESSING OFFICER COMPUTED VARIOUS ADDITIONS IN THE HANDS OF ASSESSEE AND GAVE THE BENEFIT OF INCOME ASSESSED IN THE HANDS OF ASSES SEE BEING AVAILABLE FROM AGRICULTURAL OPERATIONS AND THE BALANCE INCOME WAS ADDED IN THE HANDS OF ASSESSEE INDIVIDUALLY. 19. WE SHALL DEAL WITH THE SAID ADDITIONS WHILE DECIDING THE INDIVIDUAL GROUNDS OF APPEAL RAISED IN THIS REGARD. THE CASE OF ASSESS EE ON THE OTHER HAND, IN THIS REGARD WAS THAT THE FAMILY HAD SUFFICIENT AGRICULTURAL INCOME AVAILABLE WITH THEM TO MAKE THE AFORESAID INVESTMENTS OR TO INCUR THE EXPENDITURE. HOWEVER, SINCE THE ASSESSING OFFICER HAD NOT ACCEPTED THE AGRICULTURAL INCOME SH OWN TO THE EXTENT AS DECLARED BY THE ASSESSEE AND HENCE, THE DIFFERENCE AND THE ADDITIONS IN THE HANDS OF ASSESSEE ON ACCOUNT OF AFORESAID INVESTMENTS / EXPENDITURE. 20. BEFORE THE CIT(A), THE ASSESSEE RAISED TWO ISSUES; FIRST AGAINST ESTIMATION OF INCOME IN ITS HANDS AND SECOND AGAINST THE ORDER OF ASSESSING OFFICER IN HOLDING THAT THE ENTIRE LAND BELONGING TO THE ASSESSEE WAS GIVEN OUT ON CULTIVATION ON BATAI SYSTEM ; SINCE THE ASSESSING OFFICER ON THE BASIS OF FEW DOCUMENTS FOUND DURING THE COURSE OF SEA RCH I.E. 6 PAPERS PLUS SOME NOTINGS , 19 ITA NOS.1225 TO 1231/PUN/2012 & ORS HAD HELD THAT 50% OF AGRICULTURAL INCOME BELONGED TO OTHER FARM ERS. THE ASSESSEE ALSO RAISED OBJECTIONS TO THE ESTIMATION OF EXPENSES AGAINST AGRICULTURAL OPERATIONS AND POINTED OUT THAT AS PER FORMULA SUPPLIED BY MAHA TMA PHULE KRISHI VIDYAPEETH (HEREINAFTER REFERRED TO AS MPKV) , EXPENSES WORKED OUT TO 42.5% OF THE RECEIPTS. THE ASSESSEE CLAIMED THAT IT HAD SHOWN APPROXIMATELY 45% AS EXPENSES INCURRED ON EARNING INCOME FROM CULTIVATION OF SUGARCANE , THE SAME SHOULD BE ADOPTED AND THE INCOME FROM SALE OF SUGARCANE SHOULD BE DETERMINED WHICH IN TURN, WAS AVAILABLE AS CASH TO THE ASSESSEE TO MAKE THE INVESTMENTS AND INCURR ING THE EXPENDITURE. THE ASSESSING OFFICER HAD ESTIMATED THE EXPENDITURE AGAINST INCOME FROM SALE OF SUGARCANE AT 72.5%. THE CIT(A) ACKNOWLEDGED THAT EVEN THOUGH NO EVIDENCE OR DOCUMENTS OR BILLS WERE MAINTAINED BY THE ASSESSEE BUT THE ASSESSING OFFICER HAD NOT GIVEN ANY REASONS TO INFER THAT 72.5% OF THE RECEIPTS FROM SUGARCANE WERE INCURRED AS EXPENSES . HE FURTHER REFERRED TO THE FIGURES PROVIDED BY MPKV WHICH HAVE BEEN APPLIED IN VARIOUS CASES TO WORK OUT THE AGRICULTURAL INCOME. IN THE ABSENCE OF COMPLETE DETAILS BEING AVAILABLE, THE CIT(A) HELD THAT THE ASSESSEES PROPOSAL TO ACCEPT THE FIGURE OF 4 5% AS EXPENSES INCURRED ON SUGARCANE WAS NOT ACCEPTABLE. 21. THE NEXT OBJECTION OF ASSESSEE WAS AGAINST THE ASSESSING OFFICERS OBSERVATIONS TO CONCLUDE THAT 50% OF RECEIPTS WERE SHARED WITH THE CROPPER. THE CIT(A) HAS REFERRED TO THE CONTENTS OF SEIZED DOCUMENTS UNDER PARA 36 AT PAGES 32 AND 33 OF THE APPELLATE ORDER AND HAS HELD AS UNDER: - 37. FROM THESE PAGES, THE FOLLOWING ASPECTS ARE VERY CLEAR: I ) THE APPELLANT CULTIVATES SUGARCANE BY FOLLOWING THE S HARE CROPPING SYSTEM (BATAI OR ADHALI) II ) EXPENSES RELATED TO WATER, CULTIVATE, LABOUR, SEEDS, ETC. ARE BORNE BY THE CULTIVATOR. III ) EXPENSES RELATED FERTILIZER AND PESTICIDES IS SOMETIMES SHARED 20 ITA NOS.1225 TO 1231/PUN/2012 & ORS EQUALLY BETWEEN THE SHARE CROPPER AND THE LAND OWNER I.E. BADSHAH BAGWAN AND FAMILY. IV ) FROM BOOK NO.86 IT IS EVIDENT THAT THE APPELLANT AND HIS FAMILY MEMBERS HAVE ALSO BORNE THE EXPENSES OF ELECTRICITY, WHICH MAY HAVE BEEN INCURRED FOR AGRICULTURAL PURPOSES. 22. THE CIT(A) THUS, HELD THAT SINCE THE MAXIMUM COST BEING BORNE WORKS OUT TO 58%, WHICH INCLUDES 50% SHARE OF SHARE CROPPER AND THE MINIMUM COST WORKS OUT TO 50% I.E. 50% OF TOTAL RECEIPTS AND SOME EXPENSES TO BE BORNE BY THE ASSESSEE, THE TOTAL EXPENSES COULD BE ESTIMATED AT 54% OF THE RECEIPTS AND 46% OF GROSS RECEIPTS WOULD CONSTITUTE THE ASSESSEES INCOME. THE CIT(A) FURTHER HELD THAT THE SAME WOULD CONSTITUTE THE INCOME OF ASSESSEE AND HIS FAMILY FROM AGRICULTURAL OPERATIONS OF GROWING SUGARCANE. FURTHER, THE PLEA OF ASSESSEE THAT IT COULD NOT BE GENERALIZ ED THAT ALL AGRICULTURAL OPERATIONS WERE PERFORMED IN BATAI SYSTEM WAS DISMISSED BY THE CIT(A), IN VIEW OF EVIDENCES AT PAGE 126 OF INVENTORY NO.6. 23. THE NEXT ASPECT WAS THE INCOME FROM SALE OF VEGETABLES, WHEREIN THE PLEA OF ASSESSEE WAS THAT THE VEGET ABLES WERE GROWN ALONG WITH SUGARCANE CROP AND DID NOT REQUIRE ANY ADDITIONAL EXPENSES ON WATER, FERTILIZERS, LABOUR, ETC. THE CIT(A) NOTED THAT THE ASSESSEE HAS FAILED TO GIVE ACREAGE IN WHICH IT WAS GROWN AND HAD ALSO NOT PROVIDED BREAKUP OF COST INCURR ED ON SEEDS, FERTILIZERS, IRRIGATION, LABOUR, ETC. AND HE ALSO DID NOT ACCEPT THE PLEA OF ASSESSEE THAT VEGETABLES WERE GROWN ALONG WITH SUGARCANE , BECAUSE OF VARIOUS FACTORS . T HEREFORE, HE WAS OF THE VIEW THAT CONSIDERING THE STATEMENTS OF AGRICULTURAL F ARMERS AND WHEREIN THEY THEMSELVES SAY THAT AROUND 35% TO 40% IS TO BE INCURRED AS COST IN GROWING VEGETABLES AND INCLUDING THE COST OF LABOUR , H E WAS OF THE VIEW THAT AVERAGE COST OR EXPENSES IN GROWING VEGETABLES WOULD BE AROUND 21 ITA NOS.1225 TO 1231/PUN/2012 & ORS 50% TO 55%. HE FURTHER NOTED THAT THE SAME WAS QUITE CLOSE TO THE VALUE PROVIDED BY MPKV, WHICH LAYS DOWN 50% AS COST OF PRODUCTION OF VEGETABLES. THE CIT(A) THUS, HELD THAT THE AVERAGE OF 50% SHOULD BE TAKEN AS EXPENSES TOWARDS GROWING VEGETABLES. THE SECOND ASPECT OF THE ISS UE WAS WHAT SHOULD BE THE INCOME FROM GROWING VEGETABLES, WHERE THE ASSESSING OFFICER HAD NOT ACCEPTED THE FIGURES SHOWN BY THE ASSESSEE AS AGRICULTURAL INCOME GIVEN IN THE CHART. THE REASON FOR NOT ACCEPTING THE SAME WAS NON - MENTIONING OF GROWING OF VEGE TABLES IN THE 7/12 EXTRACTS AND ALSO LACK OF RECORDS OF INPUTS AND THE FACT THAT THE VEGETABLES WERE SHOWN TO BE SOLD IN CASH. THE CIT(A) HELD THAT THIS COULD BE THE REASONS FOR QUANTIFYING THE PRODUCTION OF VEGETABLES BUT THE SAME COULD NOT BE UTILIZED T O REJECT THE CLAIM OF RECEIPTS FROM VEGETABLES SALES. THE CIT(A) REFERRED TO THE SALE BILLS WHICH WERE FOUND AND RECOVERED FROM THE ASSESSEES PREMISES DURING THE COURSE OF SEARCH AND ALSO CERTIFICATE GIVEN BY THE AGRICULTURAL OFFICER FROM KARNATAKA, WHER E MOST OF THE LAND OF ASSESSEE WAS SITUATED STATING THAT THE AVERAGE YIELD OF VEGETABLE WAS AROUND RS.10,000/ - . THE CIT(A) ALSO NOTED THAT THE SAME ASSESSING OFFICER HAD ACCEPTED THE GROSS RECEIPTS FROM SALE OF VEGETABLES AT AROUND RS.6,000/ - PER ACRE IN FINANCIAL YEAR 1998 - 99. THE CIT(A) THUS, HELD THAT THERE WAS NO REASON FOR ESTIMATING THE AGRICULTURAL INCOME FROM VEGETABLES AT RS.5,000/ - PER ACRE, FROM WHICH 50% WAS REDUCED. SINCE THE AVERAGE GROSS RECEIPTS PER ACRE WERE BASED ON SALE BILLS FOUND IN THE PREMISES OF ASSESSEE DURING THE COURSE OF SEARCH AND SEIZURE AND SINCE SALE PATTIS WERE RECOVERED FROM THE RESIDENCE OF ASSESSEE, WHICH REVEALED THE BREAKUP OF YIELD OF VEGETABLE PER ACRE IN VALUE , THEN THE SAME HAD TO BE CONSIDERED FOR WORKING OUT THE AGRICULTURAL INCOME THROUGH VEGETABLES IN THE HANDS OF ASSESSEE AND HIS FAMILY. HE ALSO NOTED THAT THE SAID SALE PATTIES REVEALED THAT THE SALES WERE MADE AND SALE PROFITS WERE RECEIVED IN CASH. HE 22 ITA NOS.1225 TO 1231/PUN/2012 & ORS THEREFORE, HELD THAT SALES SHOWN BY THE ASSESSEE BEING BASED ON SEIZED MATERIAL REFLECT THE CORRECT GROSS RECEIPTS FROM SALE OF VEGETABLES, OUT OF WHICH 50% IS TO BE EXCLUDED FOR EXPENDITURE INCURRED ON GROWING VEGETABLES. CERTAIN SALE PATTIES WERE NOT FOUND DURING THE COURSE OF SEARCH AND THE ASSESSEE AND HI S FAMILY MEMBERS ALSO INCLUDED THE FIGURES OF SAID SALE PATTIES. THE CIT(A) NOTED THAT THE FIGURES WHICH WERE MISSING WERE VERY MEAGER EXCEPT IN THE CASE OF KHATUNBI BAGWAN AND HENCE, VARIATION DOES NOT REQUIRE ANY INFERENCE I.E. NO DEDUCTION IS TO BE MAD E FROM THE GROSS TOTAL INCOME SHOWN FROM THE VEGETABLES, EXCEPT IN THE CASE OF KHATUNBI BAGWAN. 24. THE CIT(A) IN RESPECT OF OTHER AGRICULTURAL INCOME NOTED THAT IN 7/12 EXTRACTS, C ROPS WAS MENTIONED AND THE ASSESSEE HAS SHOWN INCOME FROM SALE OF GRASS AN D MANGOES FOR VARIOUS ASSESSMENT YEARS. SINCE NO RECORD WAS FOUND TO SHOW THAT ANY EXPENSES WERE INCURRED ON GROWING GRASS, THEREFORE, THE CIT(A) APPLIED THE SAME RATE OF 50% AS EXPENDITURE TOWARDS GROWING GRASS AS IN THE CASE OF VEGETABLES. IN RESPECT O F OTHER INCOME I.E. FROM SALE OF MANGOES AND COCONUTS, THE INCOME BEING SMALL, THE SAME WAS INCLUDED IN THE HANDS OF ASSESSEE EXCEPT IN FINANCIAL YEAR 2005 - 06 , WHEREIN THE SAME WAS SHOWN AT RS. 3,00,100/ - . THE CIT(A) FURTHER DIRECTED THAT ALL THESE AMOUNTS SHALL BE APPLIED IN CASH FLOW STATEMENT TO WORK OUT THE CASH AVAILABLE IN THE HANDS OF ASSESSEE. THE CIT(A) FURTHER REJECTED THE CLAIM OF ASSESSEE THAT SMALL PORTION OF 3% TO 6% OF THE TOTAL VOLUME OF SUGARCANE WAS SOLD TO PRIVATE PARTIES WHO MANUFACTURE D JAGGERY, IN CASH. THE CIT(A) THUS, COMPUTED THE AVAILABLE CASH IN THE HANDS OF ASSESSEE IN ORDER TO WORK OUT WHETHER THERE WAS ANY NEGATIVE BALANCE. THE TABULATED DETAILS ARE AS UNDER: - 23 ITA NOS.1225 TO 1231/PUN/2012 & ORS PARTICULARS RS. RS. RS. RS. RS. RS. RS. NAME 31.3.00 31.3.01 31.3.02 31.3.03 31.3.04 31.3.05 31.3.06 BADSHAH A.BAGWAN GROSS TOTAL SUGARCANE INCOME 1,204,724 1,279,1 02 1,127,126 1,862,417 1,469,576 1,763,953 345,678 SUGAR CANE (AFTER DEDUCTING 54% AS EXPENSES) 554,173 588,387 518,478 856,712 676,005 811,418 159,012 GROSS TOTAL VEGETABLE INCOME 124,299 464,161 1,067,929 387,639 283,704 783,932 672,052 VEGETABLE PARTY (AFTER DEDUCTING 50% AS EXPENSES) 62,150 232,081 533,965 193,820 141,852 391,966 336,026 MANGOS, COCONUT AND OTHER FRUITS 6,750 4,350 2,340 7,650 4,860 4,590 5,090 GROSS TOTAL INCOME 452,437 496,969 541,500 586,031 684,000 1,061,625 257,925 GRASS (AFTER DEDUCTING 50% AS EXPENSES) 226,219 248,485 270,750 293,016 342,000 530,813 128,963 TOTAL 849,291 1,073,3 02 1,325,532 1,351,197 1,164,717 1,738,787 629,090 25. THE CIT(A) THEREAFTER, DEALT WITH THE OTHER ADDITIONS MADE BY THE ASSESSING OFFICER IN THIS REGARD ON ACCOUNT OF NEGATIVE CASH BALANCE I.E. INVESTMENT IN PROPERTIES, LOANS TO DIFFERENT PEOPLE, INVESTMENTS IN FDR, INTEREST ON FDR, ETC. WHICH WE SHALL DEAL WITH ALONG WITH GROUNDS OF APPEAL RAISED BY THE REVENUE IN THIS REGARD. 26. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A) ON ESTIMATION OF INCOME BY WAY OF GROUND OF APPEAL NO.6. THE REVENUE IS ALSO IN APPEAL AGAINST THE ORDER OF CIT(A) ON THE ISSUE OF ESTIMATION OF AGRICULTURAL INCOME FROM SALE OF SUGARCANE, VEGETABLES AND OTHER AGRICULTURAL INCOME VIDE GROUND OF APPEAL NO.1 27. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT IN RESPECT OF AGRICUL TURAL INCOME FROM SUGARCANE, THE EXPENSES WERE SHOWN BY THE ASSESSEE @ 45% WHICH WERE ESTIMATED BY THE ASSESSING OFFICER AT 72.5% 24 ITA NOS.1225 TO 1231/PUN/2012 & ORS AND HAVE BEEN ESTIMATED BY THE CIT(A) AT 54%. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FURTHER POINTED OUT THAT THE ESTIMATION WAS MADE ON THE BASIS OF SHARE CROPPING, WHEREAS THE ASSESSEE HAD NOT UNDERTAKEN ANY SUCH SHARE CROPPING. HE POINTED OUT THAT SOME PERSONS WERE EXAMINED IN THE CASE OF SH A UKAT BAGWAN GROUP AND NOT IN THE CASE OF ASSESSEE. THE NEXT CONTENT ION RAISED BY THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE WAS THAT MAJORLY THE SALES WERE TO SUGARCANE FACTORIES AND ONLY 3% TO 6% WAS SOLD TO PRIVATE PARTIES. HE REFERRED TO 6 PAGES FOUND DURING THE COURSE OF SEARCH, WHEREIN THERE WERE CERTAIN CALCULATIONS WITH RESPECT TO AGRICULTURAL INCOME FROM SUGARCANE. HE FURTHER POINTED OUT THAT THE ASSESSING OFFICER ANALYZED THE DOCUMENTS AND HELD THE ASSESSEE TO HAVE GIVEN LAND ON BATAI SYSTEM. THE ASSESSING OFFICER ACCORDINGLY, DEDUCTED THE INCOME FR OM SUGARCANE ON ACCOUNT OF BATAI @ 50%. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT EVEN IF THE ORDER OF CIT(A) IS CONSIDERED, THE AGRICULTURAL EXPENSES WERE TO THE TUNE OF 50% TO 58%, WHEREIN THE ASSESSING OFFICER ESTIMATED AF TER TAKING THE RANGE AT 54%. HE STRESSED THAT THE ASSESSEE AND FAMILY OF ASSESSEE OWNS ABOUT 120 ACRES OF LAND AND WERE ENGAGED IN AGRICULTURAL OPERATIONS. HE FURTHER POINTED OUT THAT THE ENTIRE LAND HAD BEEN CLUBBED TOGETHER BY THE ASSESSING OFFICER AND INCOME DISTRIBUTED ON LANDHOLDING BASIS. HE FURTHER AGAIN REFERRED TO THE SEIZED DOCUMENT NUMBERS 6 , WHICH DOCUMENT RELATE TO THE LAND IN KARNATAKA, WHEREAS MAJORLY THE LAND OWNED BY THE ASSESSEE WAS IN MAHARASHTRA ON THE BANKS OF RIVER PANCHGANGA. IN T HIS REGARD, THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THIS GENERALIZATION FOR THE TOTAL PIECE OF LAND WAS MISPLACED. WHERE THE ASSESSEE WAS TRADITIONALLY AN AGRICULTURAL FAMILY AND THE MAIN SOURCE OF INCOME WAS FROM AGRICULTU RE. HE STRESSED THAT THERE IS NO NEED TO GENERALIZE AND APPLY SAME RATE 25 ITA NOS.1225 TO 1231/PUN/2012 & ORS OF BATAI TO ALL HIS LANDHOLDINGS. HE FAIRLY ADMITTED THAT THE ASSESSEE IS NOT MAINTAINING DATE TO DATE ACCOUNTS , SO THERE IS NEED OF ESTIMATION OF EXPENSES AND WHICH SHOULD BE CORRECTLY MADE. HE FURTHER POINTED OUT THAT THE ESTIMATION OF EXPENSES AND THE FINAL DETERMINATION OF AGRICULTURAL INCOME FROM SUGARCANE HAS IMPACT ON THE NEGATIVE CASH FLOW PREPARED IN THE HANDS OF ASSESSEE AND THE INVESTMENTS IN VARIOUS ASSETS. THE LEA RNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE ASSETS WHICH WERE ADDED IN THE HANDS OF ASSESSEE BY THE ORDER OF ASSESSING OFFICER HAVE BEEN COVERED AS EXPENDITURE , AFTER THE CIT(A) ORDER OF ESTIMATING THE EXPENDITURE AT 54% AND ONLY N EGATIVE CASH IN HAND IS ADDED IN ASSESSMENT YEAR 2005 - 06. 28. IN RESPECT OF AGRICULTURAL INCOME FROM VEGETABLES, THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE ISSUE WAS ESTIMATION OF INCOME. HE STRESSED THAT THE ASSESSEE HAD ESTIMATED EXPENSES @ 20%, WHEREAS THE ASSESSING OFFICER HAD TAKEN THE YIELD OF RS.5,000/ - PER ACRE AND BECAUSE OF BATAI, HAD TAKEN THE NET YIELD AT RS.2500/ - PER ACRE. THE CIT(A) HAD HELD THAT NO BATAI EXPENSES TO BE DEDUCTED BUT HAD TAKEN THE EXPENSES A T 50%. IN THIS REGARD, THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE CROP DURATION WAS BETWEEN 3 - 4 MONTHS AND WITHIN A YEAR, THERE WERE ABOUT THREE CROPS OF VEGETABLE PLANTED BY THE ASSESSEE AS AGAINST SUGARCANE WHICH HAD A P ERIOD OF 12 - 14 MONTHS. IN THIS REGARD, THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT IN CASE OF CROPS, THE EXPENSES SHOULD BE ESTIMATED AT A LESSER VALUE. HE FURTHER POINTED OUT THAT THE ENTIRE VEGETABLES PATTIES I.E. RECEIPTS F ROM VEGETABLES WERE FOUND AND WERE ADOPTED BY THE ASSESSEE AND THE CIT(A) HAS ACCEPTED ASSESSEES YIELD AND WHAT REMAINS TO BE ESTIMATED IS THE EXPENSES. HE ADMITTED THAT NO DETAILS OF EXPENSES WERE 26 ITA NOS.1225 TO 1231/PUN/2012 & ORS MAINTAINED AND WERE FOUND, SO ESTIMATION OF EXPENSES IS NEEDED TO BE MADE IN THE HANDS OF ASSESSEE. HE FURTHER POINTED OUT THAT IN ASSESSMENT YEAR 1999 - 2000 , THE ASSESSING OFFICER HAS TAKEN EXPENSES TO BE AT 40% I.E. BY TAKING INCOME AT 100. HE HAD REDUCED 40 AS EXPENDITURE AND OUT OF BALANCE OF 60, 50% FOR B ATAI SHOWN AND BALANCE WAS AVAILABLE AT 30. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE HERE STRESSED THAT NO EVIDENCE OF BATAI FOR GROWING VEGETABLES WAS FOUND, HENCE, THERE IS NO QUESTION OF DEDUCTING 50% ON ACCOUNT OF BATAI . T HE ESTIMATION OF EXPENDITURE BY THE CIT(A) AT 50 % WAS AT HIGHER LEVEL. 29. IN RESPECT OF FRUITS, HE POINTED OUT THAT THE YIELD HAS BEEN ACCEPTED BUT AS AGAINST THE ASSESSEE SHOWING EXPENSES AT 20% , T HE CIT(A) HAS TAKEN THE EXPENSES TO BE 50% WHICH WAS HIGH. 30. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE ON THE OTHER HAND, PLACED RELIANCE ON THE ORDERS OF AUTHORITIES BELOW AND POINTED OUT THAT ESTIMATION OF INCOME BY THE ASSESSING OFFICER ON THE BASIS OF EVIDENCE FOUND SHOULD BE ADOPTED. 31. WE HAVE HEAR D THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE DIFFERENT ASSESSEES BEFORE US ARE MEMBERS OF ONE FAMILY WHOSE MAIN SOURCE OF INCOME IS OUT OF AGRICULTURE. THE ASSESSEE ALONG WITH HIS FAMILY MEMBERS OWNED ABOUT 120 ACRES OF AGRICULTURAL LAND, WHICH IS VERY LARGE. THE CLAIM OF ASSESSEE IS THAT THE SAID AGRICULTURAL LAND S ARE FULLY IRRIGATED AS THE WATER SUPPLY IS FROM THE BANKS OF RIVER PANCHGANGA. IN VIEW OF LANDS BEING ON THE SIDE OF RIVER BANK, THE SAID LANDS ARE FERTILE AND THE ASSESSEE AND HIS FA MILY WE RE DEPENDING ON THE 27 ITA NOS.1225 TO 1231/PUN/2012 & ORS AGRICULTURAL INCOME ARISING FROM THE SAID LAND. SEARCH AND SEIZURE OPERATIONS ON BAGWAN GROUP OF CASES WAS CARRIED OUT AND CERTAIN DOCUMENTS WERE FOUND IN RESPECT OF NOTINGS ABOUT SALE PROCEEDS AND CERTAIN EXPENSES INCURRED. SI X DOCUMENTS WERE SEIZED WHICH SHOW THAT CERTAIN LANDS WERE CULTIVATED BY THE ASSESSEE ON BATAI SYSTEM I.E. 50% OF THE RECEIPTS WERE SHARED WITH THE PERSONS WHO WERE CULTIVATING THE LANDS. THE ASSESSEE HAS A SMALL PORTION OF LAND IN THE STATE OF KARNATAKA AND MAJOR PORTION OF LAND WA S IN THE STATE OF MAHARASHTRA. THE ASSESSEE CLAIMS THAT IT WAS GROWING SUGARCANE ON CERTAIN PORTION OF LAND AND IN ADDITION, IT WAS GROWING VEGETABLES WHICH HAD DURATION OF ABOUT 3 - 4 MONTHS, SO IN A YEAR, ABOUT THREE CROPS WERE GROWN ON THE LAND OWNED BY THE ASSESSEE. IN ADDITION, THE ASSESSEE HAD SHOWN INCOME FROM SALE ON GRASS WHICH WAS GROWN BY THE ASSESSEE ON ITS LAND FOR THE USE OF CATTLE FEED AND CERTAIN SALE OF MANGOES AND COCONUTS. THE ASSESSEE IN RESPECT OF SUGARCANE WAS GROWING THE SAME ON ABOUT 80 ACRES OF LAND DURING THE PERIOD UNDER APPEAL. THE SUGARCANE WAS DELIVERED TO VARIOUS SUGAR MILLS AND THE SAME IS EVIDENCED BY THE PAYMENTS RECEIPTS BY CHEQUES WHICH ARE DEPOSITED INTO RESPECTIVE BANK ACCOUNTS OF THE ASSESS EE AND HIS FAMILY MEMBERS. THE ASSESSEE CLAIMS THAT 3% TO 6% WAS SOLD IN CASH TO INDIVIDUAL CONSUMERS , FOR WHICH THE ASSESSEE HAD NO SUPPORTING EVIDENCE AND HENCE, THIS PLEA OF ASSESSEE WAS NOT ACCEPTED BY THE AUTHORITIES BELOW. THE REVENUE RECEIVED FROM SALE OF SUGARCANE TO THE SUGAR FACTORIES HAS BEEN ACCEPTED AND ADOPTED FOR WORKING OUT THE INCOME IN THE HANDS OF ASSESSEE. THE POINT OF DISPUTE IS THE EXPENDITURE INCURRED BY THE ASSESSEE FOR CULTIVATION OF SUGARCANE. THE ASSESSEE IN THE RETURN OF INCO ME HAD CLAIMED THAT IT HAD INCURRED 20 % OF RECEIPTS AS EXPENDITURE WHICH IN TURN, WAS ESTIMATED BY THE ASSESSING OFFICER AT 72.5%, WHILE ESTIMATING THE SAME AFTER TAKING 50% ON ACCOUNT OF BATAI EXPENSES. THE REASONS FOR ESTIMATING BATAI 28 ITA NOS.1225 TO 1231/PUN/2012 & ORS EXPENSES WERE THE DOCUMENTS SEIZED DURING THE COURSE OF SEARCH. THE TOTAL DOCUMENTS WHICH WERE SEIZED DURING THE COURSE OF SEARCH WERE SIX PAGES WHICH RELATED TO THE LAND IN KARNATAKA. THE ASSESSEE ON THE OTHER HAND, MAJORLY OWNS THE LAND IN MAHARASHTRA WHICH IS O N THE BA NKS OF RIVER PANCHGANGA. SO, IN THE ABSENCE OF ANY DOCUMENTS FOUND RELATING TO THE LAND IN MAHARASHTRA, THERE IS NO MERIT IN ESTIMATING BATAI EXPENSES @ 50% IN RESPECT OF TOTAL SUGARCANE YIELD EARNED BY THE ASSESSEE IN THE RESPECTIVE YEARS IN DIFFERENT HA NDS. ACCORDINGLY, WE FIND NO MERIT IN THE STAND OF ASSESSING OFFICER. 32. THE CIT(A) HAS ESTIMATED EXPENDITURE AT 54%. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE HAS AGREED THAT IN THE ABSENCE OF DETAILS NOT BEING MAINTAINED BY IT IN RESPECT OF EXPENDITURE INCURRED, SOME ESTIMATION HAS TO BE MADE. HOWEVER, HE IS AGGRIEVED BY ESTIMATION BY THE CIT(A) AT 54%. THE CIT(A) HAS ANALYZED THE FACTUM OF EXPENSES INCURRED BY THE ASSESSEE AND VARIOUS DOCUMENTS AND WE HAVE ALREADY PERUSED THE SAME AND WE ARE IN CONFORMITY WITH THE ORDER OF CIT(A) IN NOT CONSIDERING THE BATAI EXPENDITURE AS PART OF EXP ENDITURE FOR COMPUTING THE INCOME FROM SUGARCANE. THE CIT(A) HAS ESTIMATED THE EXPENSES AT 5 4 % OF RECEIPTS. HOWEVER, WE DEEM IT FIT TO ESTIMATE THE SAME AT 50% I.E. 50% OF GROSS RECEIPTS WOULD CONSTITUTE THE ASSESSEES INCOME FROM AGRICULTURAL OPERATIONS OF GROWING SUGARCANE ; WHICH WOULD FORM A PART OF CASH FLOW OF ASSESSEE AND THE ASSESSING OFFICER SHALL WORK OUT THE IMPACT OF NEGATIVE CASH FLOW IN THE HANDS OF ASSESSEE. THE CLAIM OF LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE BEFORE US IS THAT T HE INVESTMENTS IN ASSETS STANDS COVERED AFTER THE ORDER OF CIT(A), WHEREIN HE HAD ESTIMATED THE EXPENSES AT 54% EXCEPT FOR NEGATIVE CASH BALANCE ADDED IN ASSESSMENT YEAR 2005 - 06 AND WE HAVE REDUCED THE SAME TO 50% AND THE ASSESSING OFFICER IS DIRECTED TO V ERIFY AND DECIDE THE CASH POSITION IN ASSESSMENT YEAR 2005 - 06 ACCORDINGLY. 29 ITA NOS.1225 TO 1231/PUN/2012 & ORS 33. NOW, COMING TO THE NEXT ESTIMATION OF INCOME IN THE HANDS OF ASSESSEE I.E. INCOME FROM VEGETABLES CROP. THE ASSESSEE CLAIMS THAT PART OF CROPS WERE GROWN ALONG WITH SUGARCANE A ND THE BALANCES ON THE LAND AVAILABLE I.E. ABOUT 30 - 31 ACREAS WHICH ARE UNDER CULTIVATION OF VEGETABLES, GRASS SCIENTIFICALLY GROWN AS CATTLE FEED AND OTHER CROPS. AS IN THE CASE OF SUGARCANE, THE FIRST ASPECT IS THE PERCENTAGE OF EXPENDITURE INCURRED BY THE ASSESSEE FOR GROWING VEGETABLES ; T HE SECOND ASPECT IS THE INCOME FROM RECEIPTS FROM GROWING VEGETABLES. SINCE THE ASSESSEE HAS NOT MAINTAINED ANY DETAILS IN THIS REGARD AND THE ASSESSING OFFICER HAD POINTED OUT THAT THERE IS NO MENTION IN 7/12 EXTRACT S IN RESPECT OF GROWING OF VEGETABLES. THE ASSESSEE ON THE OTHER HAND, POINTS OUT THAT SINCE VEGETABLES WERE GROWN FOR DURATION OF 3 - 4 MONTHS AND WERE RE PEATEDLY BEING CHANGED DOES NOT FIND MENTION IN 7/12 EXTRACTS. HOWEVER, THE SALE PATTIES WERE RECOVER ED FROM THE RESIDENCE OF ASSESSEE WHICH REVEALED THE YIELD OF VEGETABLES PER ACRE IN VALUE. BOTH THE AUTHORITIES BELOW HAVE ADMITTED THAT EXCEPT FOR FEW SALE PATTIES OF NOMINAL VALUE, MAJORLY THE SALE PATTIES OF VEGETABLES WERE AVAILABLE FROM THE RESIDENC E OF ASSESSEE. IN OTHER WORDS, THERE IS NO DISPUTE IN RESPECT OF RECEIPTS FROM SALE OF VEGETABLES TO BE WORKED OUT IN THE HANDS OF ASSESSEE. THE ONLY DISPUTE REMAINS IS IN RESPECT OF EXPENDITURE ON GROWING OF VEGETABLES. THE ASSESSING OFFICER IN THE HAN DS OF ASSESSEE HAD ESTIMATED THE INCOME AT RS.5,000/ - PER ACRE AND AFTER DEDUCTING ON ACCOUNT OF EXPENDITURE AND BATAI EXPENSES HAD TAKEN THE NET YIELD AT RS.2500/ - PER ACRE. THE ASSESSEE HAD SHOWN THE EXPENSES AT 20% AND THE CIT(A) HAD TAKEN THE EXPENSES AT 50% OF THE RECEIPTS AND HAD NOT DEDUCTED ANY EXPENDITURE ON ACCOUNT OF BATAI. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FAIRLY ADMITTED BEFORE US THAT IN THE ABSENCE OF ANY DETAILS BEING MAINTAINED, EXPENDITURE HAS TO BE ESTIMATED. THE F IRST ASPECT OF THE ISSUE IS THAT IN THE ABSENCE OF ANY EVIDENCE FOUND OF 30 ITA NOS.1225 TO 1231/PUN/2012 & ORS BATAIA EXPENSES FOR GROWING VEGETABLES, THERE IS NO QUESTION OF DEDUCTING 50% ON ACCOUNT OF BATAI EXPENSES. WE UPHOLD THE ORDER OF CIT(A) IN THIS REGARD. THE SECOND ASPECT IS THE PE RCENTAGE OF EXPENSES TO BE ESTIMATED ON ACCOUNT OF CULTIVATION OF VEGETABLES. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT IN ASSESSMENT YEAR 1999 - 2000 , THE ASSESSING OFFICER HAS TAKEN THE ESTIMATED EXPENDITURE AT 40% WHICH WAS HIGH AND THE SAME MAY BE ADOPTED AT 30%. FOLLOWING THE PRINCIPLES OF NATURAL JUSTICE, WE HOLD THAT IN THE ABSENCE OF ANY DETAILS BEING MAINTAINED, IT WOULD BE FAIR T O ESTIMATE THE EXPENDITURE AT 35% FOR GROWING VEGETABLES. THERE IS NO MERIT IN THE ORDER OF CIT(A) IN ESTIMATING THE SAME AT 50% SINCE THE EXPENDITURE FOR THE CROP OF SUGARCANE IS HIGHER AS COMPARED TO THE VEGETABLE CROPS. ACCORDINGLY, WE HOLD SO. 34. THE NEXT AND LAST ISSUE TO BE DECIDED IN RESPECT OF AGRICULTURAL INCOME IS THE ESTIMATION O F INCOME IN RESPECT OF GROWING OF OTHER CROPS I.E. GRASS AND SALE OF MANGOES AND COCONUTS. FOLLOWING THE SAME PARITY OF REASONING, WE ESTIMATE THE SAME AT 35% AS IN THE CASE OF VEGETABLES. ACCORDINGLY, WE HOLD SO. THE ASSESSING OFFICER IS DIRECTED TO IN CLUDE THE INCOME IN THE HANDS OF ASSESSEE IN THE RESPECTIVE YEARS AS PART OF CASH FLOW STATEMENT AND THEREAFTER, DETERMINE THE AVAILABILITY OF CASH IN EACH OF THE YEAR AND ITS UTILIZATION THEREBY IN VARIOUS ASSETS, INVESTMENTS AND OTHER EXPENDITURE WHICH H AS BEEN DETERMINED ON THE BASIS OF VARIOUS EVIDENCES FOUND DURING THE COURSE OF SEARCH. THE GROUND OF APPEAL NO.6 RAISED BY THE ASSESSEE IS THUS, PARTLY ALLOWED AND THE GROUND OF APPEAL NO.1 RAISED BY THE REVENUE IS DISMISSED. 31 ITA NOS.1225 TO 1231/PUN/2012 & ORS 35. THE ISSUE IN GROUND OF APPEAL NO.8 RAISED BY THE ASSESSEE IS AGAINST THE ADDITION ON ACCOUNT OF CASH FLOW DEFICIT AND IF THE INCOME INCREASE S IN THE HANDS OF ASSESSEE, THE CASH FLOW INCREASES AND THE CONSEQUENT EFFECT IS ON THE DEFICIT IN CASH FLOW. WE HA VE ALREADY DIRECTED THE ASSESSING OFFICER TO VERIFY THE SAME AND DETERMINE THE AVAILABILITY OF CASH IN THE HANDS OF ASSESSEE IN THE RESPECTIVE YEARS AND ITS IMPACT ON NEGATIVE CASH DETERMINED IN THE HANDS OF ASSESSEE IN EACH OF THE YEARS. ACCORDINGLY, GRO UND OF APPEAL NO.8 IS ALLOWED FOR STATISTICAL PURPOSES. 36. THE ISSUE IN GROUND OF APPEAL NO.7 RAISED BY THE ASSESSEE IS AGAINST CHARGING OF INTEREST ON ADVANCES MADE TO THE PARTIES. THE ASSESSEE HAD SHOWN CERTAIN ADVANCES IN THE BALANCE SHEET. THE ASSE SSING OFFICER TAXED THE INTEREST ON NOTIONAL BASIS @ 2%. THE ASSESSING OFFICER HAD RELIED ON THE ADVANCES GIVEN BY PAT SANSTHA, WHICH WAS ENGAGED IN MONEY LENDING BUSINESS TO HOLD THAT THE ASSESSEE WOULD HAVE CHARGED INTEREST ON THE SAID ADVANCES. THE CI T(A) THOUGH, ADMITS THAT THERE IS NO EVIDENCE WHICH WOULD STRICTLY IMPLICATE THE ASSESSEE AS NOTHING INCRIMINATING WAS FOUND IN SEARCH OR POST SEARCH PERIOD WHICH WOULD INDICATE THAT THE ASSESSEE WAS CHARGING INTEREST FOR MONEY ADVANCED. HOWEVER, IN THE I NTEREST OF JUSTICE, HE HELD THAT RATE OF 1% SHOULD BE NOTIONALLY CHARGED ON THE ADVANCES GIVEN, WHICH IN TURN, WOULD COMPENSATE FOR THE INTEREST FORGONE BY THE ASSESSEE HAD HE KEPT THESE AMOUNTS IN THE BANK. 37. THE ASSESSEE IS IN APPEAL AGAINST THE SAM E VIDE GROUND OF APPEAL NO.7 AND HAS POINTED OUT THAT THE PRESUMPTION HAS BEEN DRAWN BY THE AUTHORITIES BELOW ON THE GROUND THAT THE ASSESSEE IS CARRYING ON MONEY LENDING BUSINESS. HOWEVER, THE SAID ADVANCES WERE GIVEN FOR THE PURCHASE OF LAND WHICH WERE 32 ITA NOS.1225 TO 1231/PUN/2012 & ORS EVENTUALLY RETURN ED BACK AND IN THE ABSENCE OF ANY EVIDENCE FOUND DURING THE COURSE OF SEARCH OR POST SEARCH PERIOD, WHICH HAS BEEN ACKNOWLEDGED BY THE CIT(A), THERE IS NO MERIT IN CHARGING ANY INTEREST. 38. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE ON THE OTHER HAND, STRESSED THAT THE INTEREST SHOULD BE CHARGED ON THE AFORESAID ADVANCES. 39. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ADVANCES ADMITTEDLY, HAVE BEEN MADE BY THE ASSESSEE AND REFLECTED IN ITS BALANCE SHEET IN THE RESPECTIVE YEARS. THE QUESTION WHICH ARISES IS THE PRESUMPTION DRAWN BY THE AUTHORITIES BELOW THAT THE ASSESSEE HIMSELF HAVE CHARGED INTEREST AND THE RATE OF INTEREST TO BE APPLIED. THE ASSESSING OFFICER IN THIS REGARD, HAD TAXED THE INTEREST @ 2 % WHICH WAS REDUCED BY THE CIT(A) AT 1%. THE CASE OF ASSESSEE ON THE OTHER HAND, IS THAT IT HAS NOT CHARGED ANY INTEREST ON THE SAID ADVANCES WHICH WERE GIVEN FOR PURCHASING CERTAIN LANDS BUT BECAUSE THE DEAL DID NOT GO THROUGH, THE MONEY WAS RETURNED. T HE CIT(A) FAIRLY ADMITS THAT NO INCRIMINATING EVIDENCE WAS FOUND IN SEARCH OR POST SEARCH WHICH WOULD INDICATE THAT THE ASSESSEE WAS CHARGING INTEREST FOR MONEY ADVANCED. IN THE ABSENCE OF THE SAME, WE FIND NO MERIT IN UPHOLDING THE CHARGING OF INTEREST @ 1% IN THE HANDS OF ASSESSEE. ACCORDINGLY, WE DELETE THE ADDITION MADE IN THIS REGARD AND ALLOW THE GROUND OF APPEAL NO.7 RAISED BY THE ASSESSEE. 40. THE LAST ISSUE WHICH HAS BEEN AGITATED BY THE ASSESSEE IS THE GROUND OF APPEAL NO.9 IS IN RESPECT OF CRE DIT OF RS.1,25,000/ - . THE ASSESSEE HAD CLAIMS TO HAVE RECEIVED THE AMOUNT FROM SUNDRY CREDITORS DURING THE YEAR UNDER CONSIDERATION BUT NO CONFIRMATION WAS FILED BY THE ASSESSEE BEFORE THE 33 ITA NOS.1225 TO 1231/PUN/2012 & ORS AUTHORITIES BELOW AND EVEN BEFORE US. HENCE, WE UPHOLD THE ORDER OF CIT(A) IN CONFIRMING THE ADDITION OF RS.1,25,000/ - . THE GROUND OF APPEAL NO.9 RAISED BY THE ASSESSEE IS THUS, DISMISSED. 41. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT IN ALL THE OTHER YEARS THE ISSUE WAS AGAINST ESTIMATIO N OF INCOME AND CHARGING OF INTEREST ON FDRS WHICH STANDS COVERED BY THE ISSUE RAISED IN ASSESSMENT YEAR 2005 - 06. HE FAIRLY ADMITTED THAT GROUNDS OF APPEAL NO.1 TO 5 IN EACH OF THE YEARS STARTING FROM ASSESSMENT YEAR 2000 - 01 TO 2004 - 05 AND GROUND OF APPEA L NO.1 IN ASSESSMENT YEAR 2006 - 07 ALONG WITH GROUNDS OF APPEAL NO.8 AND 9 IN ASSESSMENT YEARS 2001 - 02 AND 8 AND 12 IN ASSESSMENT YEAR 2004 - 05 ARE NOT PRESSED. HENCE, ALL THESE GROUNDS OF APPEAL ARE DISMISSED AS NOT PRESSED. 42. IN RESPECT OF BALANCE GROUNDS OF APPEAL WHICH ARE AGAINST ESTIMATION OF EXPENSES IN RESPECT OF AGRICULTURAL ACTIVITIES UNDERTAKEN BY THE ASSESSEE ON ACCOUNT OF GROWING SUGARCANE, VEGETABLES AND OTHER CROPS, OUR DECISION IN THE PARAS HEREINABOVE SHALL BE AP PLIED BY THE ASSESSING OFFICER TO COMPUTE THE INCOME IN THE HANDS OF ASSESSEE FROM AGRICULTURAL OPERATIONS AND THE AVAILABILITY OF CASH WHICH WOULD BE ADDED TO THE CASH FLOW TO DETERMINE ITS AVAILABILITY OF CASH BALANCE IN THE RESPECTIVE YEARS AND OTHER IN VESTMENTS. THE ASSESSEE HAS FURNISHED THE DETAILS OF ADDITION MADE ON ACCOUNT OF NEGATIVE CASH FLOW FROM ASSESSMENT YEAR 2000 - 01 TO 2001 - 02, 2003 - 04 AND 2005 - 06 AND AFTER THE RELIEF GIVEN BY THE CIT(A), WE FIND THAT THE ONLY ADDITION WHICH REMAINS IS ON A CCOUNT OF NEGATIVE CASH FLOW OF RS.87,069/ - IN ASSESSMENT YEAR 2005 - 06. ON RE - COMPUTATION OF AGRICULTURAL INCOME IN THE HANDS OF ASSESSEE AS PER OUR ORDER , THE ASSESSING OFFICER SHALL VERIFY THE STAND OF LEARNED AUTHORIZED REPRESENTATIVE FOR 34 ITA NOS.1225 TO 1231/PUN/2012 & ORS THE ASSESSEE THAT NO ADDITION ON ACCOUNT OF NEGATIVE CASH FLOW IS TO BE MADE IN ASSESSMENT YEAR 2005 - 06. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER. 43. NOW, COMING TO THE APPEAL OF ASSESSEE IN ASSESSMENT YEAR 1999 - 2000, WHEREIN THE ONLY ISSUE WHICH IS REMAINING FO R ADJUDICATION IS THE COMPUTATION OF AGRICULTURAL INCOME AND THE ASSESSING OFFICER SHALL ACCORDINGLY, COMPUTE THE EXPENDITURE AND THE BALANCE INCOME IN THE HANDS OF ASSESSEE IN ASSESSMENT YEAR 1999 - 2000. 44. NOW, WE PROCEED TO TAKE UP THE APPEAL OF REVENU E WHICH HAS RAISED CONSOLIDATED ISSUES RELATING TO ALL THE YEARS UNDER CONSIDERATION I.E. ASSESSMENT YEARS 2000 - 01 TO 2006 - 07. THE FIRST GROUND OF APPEAL IN RESPECT OF DELETION OF ADDITION ON ACCOUNT OF ESTIMATION OF NET AGRICULTURAL INCOME IS ALREADY DEC IDED BY US ALONG WITH GROUND OF APPEAL NO.6 RAISED BY THE ASSESSEE. HENCE, THIS GROUND OF APPEAL RAISED BY THE REVENUE STANDS DISMISSED. 45. THE ISSUE IN GROUND OF APPEAL NO.2 IS THE RELIEF GIVEN ON ACCOUNT OF ISSUE OF NEGATIVE CASH BALANCE BY RE - WORKING CASH FLOW STATEMENT BY THE CIT(A). WE FIND NO MERIT IN THE SAID GROUND OF APPEAL RAISED BY THE REVENUE, IN VIEW OF OUR DECIDING THE ISSUE VIDE GROUND OF APPEAL NO.6 RAISED BY THE ASSESSEE AND THE SAME IS DISMISSED. 46. THE NEXT ISSUE RAISED BY THE REVEN UE IS IN RESPECT OF INVESTMENT IN DARGAWALE COMPLEX IN ASSESSMENT YEARS 2001 - 02, 2004 - 05 AND 2005 - 06. 47. BRIEF FACTS RELATING TO THE ISSUE ARE THAT, ON VERIFICATION OF SEIZED ENTRY NO.131 SEIZED FROM BUSINESS PREMIS ES OF AMAN CHHOTE VYAPARI PAT SANSTHA, ICHALKARANJI, IT REVEALED CERTAIN NOTINGS REGARDING INVESTMENTS IN DARGAWALE 35 ITA NOS.1225 TO 1231/PUN/2012 & ORS COMPLEX BY THE ASSESSEE. ON LAST PAGE OF THE NOTE BOOK, THE TOTAL INVESTMENTS WORKED OUT TO RS.24,43,685/ - FOR THE PERIOD JUNE 1997 TO MARCH, 2005. FURTHER, FROM THE PAGES 6 TO 10 OF THE NOTE BOOK, CERTAIN INVESTMENTS PERTAINING TO THE PERIOD 27.05.1999 TO 18.12.2004 WERE RECORDED , AGGREGATED TO RS.6,69,030/ - AND THE YEAR - WISE DETAILS ARE REPRODUCED AT PAGE 49 OF THE APPELLATE ORDER. THE ASSESSEE POINTED OUT THAT THE TOTAL INVES TMENTS OF RS.6,69,000/ - WERE DULY CONSIDERED IN THE CASH FLOW STATEMENT. HOWEVER, THE ASSESSING OFFICER RE - DREW THE CASH FLOW STATEMENT DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND INCLUDED SUM OF RS.6,69,030/ - FOR WORKING OUT THE UNDISCLOSED INCOME OF ASSESSEE FOR THE RESPECTIVE ASSESSMENT YEARS. 48. THE FIRST PLEA RAISED BY THE ASSESSEE BEFORE THE CIT(A) WAS THAT THE SAID EXPENDITURE WAS INCURRED JOINTLY BY THE ASSESSEE AND HIS WIFE MRS. KHATUNBI AND THE INVESTM ENT WAS REFLECTED IN THEIR RESPECTIVE CASH FLOW STATEMENTS, WHEREAS THE ASSESSING OFFICER HAD CONSIDERED THE TOTAL INVESTMENTS IN THE HANDS OF ASSESSEE. EVEN THE YEARS IN WHICH THE INVESTMENT WAS MADE WAS WRONGLY ADOPTED BY THE ASSESSING OFFICER. THE CIT (A) HELD THAT WHERE THE ASSESSEE ALONG WITH HIS WIFE WERE 50% OWNERS OF THE LAND ALONG WITH DARGAWALE GROUP AND THEY HAD UNDERTAKEN T O BUILD AND CONSTRUCT THE PROPERTY TOGETHER IN JOINT VENTURE, THEN THE EXPENSES SHOULD BE BIFURCATED BETWEEN THE TWO. 49. THE REVENUE IS IN APPEAL AGAINST THE SAME AND WE FIND NO MERIT IN THE STAND OF REVENUE, WHERE THE INVESTMENT HAS BEEN MADE BY THE ASSESSEE AND HIS WIFE, THEN ONLY 50% OF THE SAME IS TO BE CONSIDERED AS SPENT BY THE ASSESSEE, WHICH IN TURN, HAS TO BE CONSID ERED AS CASH OUTFLOW IN THE HANDS OF ASSESSEE AND THE BALANCE IS TO BE CONSIDERED IN THE HANDS OF HIS WIFE MRS. 36 ITA NOS.1225 TO 1231/PUN/2012 & ORS KHATUNBI. THE ASSESSING OFFICER IS ACCORDINGLY DIRECTED. THE GROUND OF APPEAL NO.3 RAISED BY THE REVENUE IS THUS, DISMISSED. 50. THE NEXT GRO UND OF APPEAL NO.4 IS AGAINST DELETION OF ADDITION MADE ON ACCOUNT OF LOAN TO SANGLI PARTY OF RS.19,60,000/ - . THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF INVESTMENT IN BANK DEPOSIT OF RS.19,60,000/ - MADE IN SBI ON 30.03.2005 AS REFLECTED IN PAGES FROM 1 TO 24, SEIZED DURING THE COURSE OF SEARCH. THE ASSESSEE CONTENTED THAT HE HAD ADVANCED AN AMOUNT OF RS.20 LAKHS TO M/S. BALAJI TRADERS, SANGLI FOR OCTROI COLLECTION CONTRACT. HOWEVER, THE CONTRACT DID NOT MATERIALIZE AND THE AMOUNT WAS REFUNDED BACK T O THE ASSESSEE. HE FURTHER POINTED OUT THAT BOTH THE ENTRIES WERE REFLECTED IN THE RESPECTIVE YEARS IN THE CASH FLOW STATEMENT. THE ASSESSEE ALSO STATED THAT HE HAD ISSUED DD OF RS.20 LAKHS AND THAT WHILE ISSUING THE DD INITIALLY RS.19,60,000/ - WAS DEPOS ITED BY CHEQUE, DEPOSIT SLIP OF WHICH WAS SEIZED AND THE REMAINING RS.40,000/ - WAS DEPOSITED SEPARATELY AND THE ACCORDINGLY, THE DD WAS TAKEN FROM THE BANK. THE ASSESSING OFFICER DID NOT ACCEPT THE PLEA OF ASSESSEE SINCE THE BANK ACCOUNT DID NOT REFLECT S UM OF RS.19,60,000/ - . FURTHER, DD WAS ISSUED ON 12.03.2005, WHEREAS THE DEPOSIT SLIP WAS DATED 31.03.2005. ACCORDINGLY, AN ADDITION OF RS.19,60,000/ - WHICH WAS NOT REFLECTED IN THE CASH FLOW STATEMENT WAS INCLUDED IN THE RE - DRAWN CASH FLOW STATEMENT. 51. THE CIT(A) VIDE PARA 66 HELD AS UNDER: - 66. I HAVE GIVEN CAREFUL CONSIDERATION TO THE SUBMISSIONS OF THE APPELLANT. I HAVE ALSO SEEN THE COPY OF THE COUNTERFOIL ON THE BASIS OF WHICH THIS AMOUNT HAS BEEN CONSIDERED AS OUTFLOW IN THE CASH FLOW STATEME NT PREPARED IN ASSESSMENT. I ALSO FIND THAT THE NAME OF THE APPELLANT IS NOT WRITTEN ON THIS PAPER. THIS IS A PAY - IN - SLIP OF SBI, WHICH SHOWS THAT ONE CHEQUE NO.953949 WAS ISSUED BY AN ACCOUNT IN SBI, WHICH WAS DEPOSITED INTO THE ACCOUNT OF BANK OF MAHAR ASHTRA NO.01010/093012. ALL THESE ACCOUNTS ARE VERIFIABLE. FURTHER, THE ONE ACCOUNT HAS BEEN MENTIONED ON THIS SLIP WHICH IS AN ACCOUNT IN THE STATE BANK OF INDIA. IT APPEARS THAT THE ASSESSING OFFICER HAD ENQUIRED WITH THE CONCERNED BRANCH OF THE STATE BANK DURING THE COURSE OF ASSESSMENT AND THEY HAD ALSO DENIED ANY 37 ITA NOS.1225 TO 1231/PUN/2012 & ORS SUCH TRANSACTIONS THROUGH THEIR BANK. FURTHER, IT IS ALSO NOT THE CASE OF THE ASSESSING OFFICER THAT THIS DEMAND DRAFT WAS PURCHASED FROM AMAN SAHAKARI BANK, ICHALKARANJI. IN VIEW OF THE AFORESAID FACTS, IT IS NOT POSSIBLE TO HOLD THAT THIS AMOUNT OF RS.19.60 LAKHS SHOULD BE INCLUDED IN THE CASH FLOW STATEMENT AS AN OUTFLOW. THE APPELLANT GETS RELIEF ON THIS GROUND. 52. THE REVENUE IS IN APPEAL AGAINST THE ORDER OF CIT(A). 53. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE STRONGLY OPPOSED THE FINDINGS OF CIT(A). HOWEVER, HE HAS FAILED TO CONTROVERT THE SAME. ACCORDINGLY, WE FIND NO MERIT IN THE GROUND OF APPEAL NO.4 RAISED BY THE REVENUE AND THE SAME IS DISMISSED. 5 4. THE ISSUE IN GROUND OF APPEAL NO.5 RAISED BY THE REVENUE IS AGAINST DELETION OF ADDITION MADE IN RESPECT OF INVESTMENT IN PANHALA AND ATHNI PROPERTY FOR ASSESSMENT YEAR 2005 - 06. THE BASIS FOR MAKING THE AFORESAID ADDITION WAS THE NOTINGS ON PAGE 2 BACK SIDE OF SEIZED INVENTORY NO.135 SEIZED FROM THE PREMISES OF PAT SANSTHA, IN WHICH THE ASSESSEE WAS THE DIRECTOR. THE NOTINGS WERE REGARDING PURCHASE OF PROPERTY AT ATHNI FROM SHRI BARGIR AND PROPERTY AT PANHALA . THE TOTAL INVESTMENT FOR PURCHASE OF ATHNI PROPERTY WAS SHOWN AT RS.2,20,000/ - FOR THE PERIOD 28.03.2005 TO 14.04.2005 AND THE INVESTMENT IN PANHALA WAS RS.3,43,000/ - FROM THE PERIOD 11.04.2005 TO 23.04.2005. THE PAYMENTS IN THE NOTE BOOK WERE WRITTEN IN RED INK AND THEY WERE WRITTEN LESS BY ONE DIGIT. THE BACKSIDE OF PAGE NO.1 , WHEREIN, IT WAS WRITTEN THAT AMOUNT PAID FOR PURCHASE OF CYCLE AT RS.170, CONFIRMED THE SAME , AS THE MARKET PRICE OF CYCLE WAS RS.1700/ - TO RS.2000/ - . FURTHER, ON BACKSIDE OF PAGE NO.2, THE PROPERTY OF ATHNI WAS SHOWN TO HAVE PURCHASED FROM SHRI BARGIR, AGAINST EARLIER PAYMENT GIVEN TO SHRI FAROORK, THE AGENT WAS WRITTEN AS TOTAL 22. THE ASSESSING OFFICER THUS, WORKED OUT THE PURCHASE PRICE OF SAID PROPERTY AT RS.22 LAKHS FOR ATHNI AND 38 ITA NOS.1225 TO 1231/PUN/2012 & ORS RS.34,30,000/ - FOR PA NHALA PROPERTY, OUT OF WHICH SUM OF RS.1,55,000/ - FOR ATHNI WAS PAID DURING ASSESSMENT YEAR 2005 - 06 AND THE BALANCE RS.6,50,000/ - FOR ATHNI PROPERTY AND RS.34,30,000/ - FOR PANHALA PROPERTY WAS MADE DURING FINANCIAL YEAR 2006 - 07 . THE ASSESSING OFFICER OBSE RVED THAT THE ASSESSEE IN REPLY TO QUESTION NOS.31 AND 32 OF STATEMENT DATED 24.06.2005, DENIED HAVING MADE ANY SUCH PAYMENTS. HE SIMPLY STATED THAT THE HANDWRITINGS ARE NOT HIS AND THEREFORE, HE COULD NOT EXPLAIN THE SAME. DURING ASSESSMENT PROCEEDINGS, HE REITERATED THAT THE BOOK WAS NOT WRITTEN BY HIM. HE FURTHER CONTENTED THAT HIS SONS IRFAN, IMRAN AND MOHSIN HAD MADE INVESTMENTS IN THE PROPERTY AT PANHALA WHICH WERE REFLECTED IN THEIR RESPECTIVE CASH FLOW STATEMENTS. HE FURTHER POINTED OUT THAT THE ASSESSEE ALONG WITH HIS WIFE HAD PURCHASED THE PROPERTY AT ATHNI WHICH WAS ALSO REFLECTED IN THE CASH FLOW STATEMENT. THE ASSESSEE PRODUCED THE PURCHASE DEEDS BEFORE THE ASSESSING OFFICER AND ALSO FURNISHED YEAR - WISE BREAK - UP OF THE INVESTMENTS IN ATHNI AND PANHALA PROPERTIES WHICH ARE TABULATED AT PAGE 53 OF THE APPELLATE ORDER. THE ASSESSING OFFICER DID NOT ACCEPT THE PLEA OF ASSESSEE. ACCORDINGLY, INVESTMENT IN ATHNI AND PANHALA PROPERTIES WERE CONSIDERED AT RS.15,50,000/ - AND RS.40,38,000/ - FOR ASSE SSMENT YEARS 2004 - 05 AND 2005 - 06, RESPECTIVELY IN THE CASH FLOW STATEMENT RE - DRAWN DURING ASSESSMENT PROCEEDINGS TO WORK OUT THE UNDISCLOSED INCOME OF ASSESSEE AND HIS FAMILY MEMBERS. 55. THE CIT(A) VIDE PARAS 74 AND 75 AT PAGE 55 OF THE APPELLATE ORDER D ELETED THE ADDITION NOT ACCEPTING THE DECODING MADE BY THE ASSESSING OFFICER IN RESPECT OF SAID NOTINGS ON THE SEIZED PAPERS. HE REFERRED TO THE OTHER ENTRIES WHICH WERE THE CLEAR ENTRIES AND DID NOT ACCEPT THE DECODING ANALOGY OF THE ASSESSING OFFICER. 39 ITA NOS.1225 TO 1231/PUN/2012 & ORS 5 6. THE REVENUE IS IN APPEAL AGAINST THE SAME. THE CASE OF REVENUE IS THAT THE VALUE OF PROPERTY HAS NOT BEEN CORRECTLY TAKEN BY THE CIT(A). THE CASE OF ASSESSEE BEFORE US IS THAT THE PROPERTY AT PANHALA DOES NOT BELONG TO THE ASSESSEE BUT BELONGS TO THRE E SONS I.E. IRFAN, IMRAN AND MOHSIN WHO HAD MADE THE SAID INVESTMENTS IN THE SAID PROPERTY AND THE SAME IS REFLECTED IN THEIR RESPECTIVE CASH FLOW STATEMENTS. IN RESPECT OF OTHER PROPERTY I.E. ATHNI, THE ASSESSEE CLAIMS THAT HE ALONG WITH HIS WIFE HAD PURCHASED THE S AME. THE VALUE OF THE SAME HAS BEEN DECLARED IN THEIR CASH FLOW STATEMENTS. THE ASSESSING OFFICER THUS, IS DIRECTED TO VERIFY THE CLAIM OF ASSESSEE IN THIS REGARD AND THE GROUND OF APPEAL NO.5 RAISED BY THE REVENUE IS THUS, ALLOWED FOR STATISTICAL PURPOS ES. 57. THE NEXT GROUND OF APPEAL NO.6 IS IN RELATION TO LOAN TO SHRI VIJAY TO T DGAL , WHICH ADDITION WAS ALSO MADE ON THE BASIS OF SEIZED DOCUMENTS IN ASSESSMENT YEARS 2005 - 06 AND 2006 - 07 . THE ASSESSEE IN HIS STATEMENT CATEGORICALLY STATED THAT THE SAID L EDGER ACCOUNTS WERE WRITTEN BY HIM BUT BELONGED TO BHISHI MANDAL AND HE HAD NOTHING TO DO THE SAID PAPER. HOWEVER, THE ASSESSING OFFICER DID NOT ACCEPT THE SAME AND ADDED AMOUNT OF LOAN AND ALSO THE INTEREST EARNED THEREON AS INCOME OF THE ASSESSEE. 58. THE CIT(A) DELETED THE ADDITION IN THE HANDS OF ASSESSEE ON THE GROUND THAT THE SAID TRANSACTION RELATED TO BHISHI MANDAL AND WERE UNAUTHORIZED MONEY LENDING BY AMAN CHOTE VYAPARI SAHAKARI PAT SANSTHA. IN THIS REGARD, ONCE THE AMOUNTS HAVE BEEN HELD AS P ART OF UNAUTHORIZED MONEY LENDING BUSINESS OF PAT SANSTHA, THERE IS NO MERIT IN MAKING THE ADDITION IN THE HANDS OF ASSESSEE. UPHOLDING THE ORDER OF CIT(A), WE DISMISS THE GROUND OF APPEAL NO.6 RAISED BY THE REVENUE. 40 ITA NOS.1225 TO 1231/PUN/2012 & ORS 59. THE ISSUE IN GROUND OF APPEAL NO.7 RAISED BY THE REVENUE IS AGAINST ESTIMATION OF HOUSEHOLD AND OTHER EXPENSES. DURING THE COURSE OF SEARCH, CERTAIN DOCUMENTS WERE FOUND AGAINST EXPENDITURE ON ACCOUNT OF PERSONAL EXPENSES. THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS POINTED OUT THE SOURCE OF THE SAME TO BE OUT OF HIS AGRICULTURAL INCOME AND FURNISHED CERTAIN DETAILS. THE DETAILS FURNISHED BY THE ASSESSEE WERE AT VARIANCE WITH THE DRAWINGS SHOWN IN THE CASH FLOW STATEMENT AND THE ASSESSING OFFICER REJECTING THE EXPLANATION OF ASSESSEE, MADE ADDITION IN THE RESPECTIVE YEARS ON ACCOUNT OF LOW HOUSEHOLD DRAWINGS FOR THE RESPECTIVE YEARS. 60. THE CIT(A) RE - WORKED THE HOUSEHOLD EXPENSES IN THE RESPECTIVE YEARS IN THE HANDS OF EACH OF THE ASSESSEE BEFORE US. THE SAID HOUSEHOLD EXPENSES ARE SOURCED OUT OF CASH AVAILABILITY WITH THE ASSESSEE ON ACCOUNT OF HIS AGRICULTURAL INCOME . 61. THE REVENUE IS IN APPEAL AGAINST THE ORDER OF CIT(A) IN REDUCING ESTIMATION OF HOUSEHOLD EXPENSES IN THE HANDS OF ASSESSEE IN RESPECTIVE YEARS. THE REVENUE HAS FAILED TO CONTROVERT THE FI NDINGS OF CIT(A) IN THIS REGARD. IN ANY CASE, THE ASSESSEE HAS CLAIMED THAT THE SAID EXPENDITURE IS OUT OF HIS AGRICULTURAL INCOME AND IS PART OF THE CASH FLOW STATEMENT. HENCE, WE DISMISS THE GROUND OF APPEAL NO.7 RAISED BY THE REVENUE. 62. THE ISSUE IN GROUND OF APPEAL NO.8 RAISED BY THE REVENUE IS LINKED TO GROUND OF APPEAL NO.7 RAISED BY THE ASSESSEE AGAINST REDUCTION IN RATE OF INTEREST BY THE CIT(A) ON ADVANCEMENT OF LOANS. WE HAVE ALREADY DELETED THE SAID A DDITION IN THE HANDS OF ASSESSEE. ACCORDINGLY, THE GROUND OF APPEAL NO.8 RAISED BY THE REVENUE IS ALSO DISMISSED. 41 ITA NOS.1225 TO 1231/PUN/2012 & ORS 63. THE ISSUE IN GROUND OF APPEAL NO.9 RAISED BY THE REVENUE IS IN RESPECT OF AMOUNT ADVANCED IN MONEY LENDING BUSINESS. THE ASSESSING OFFIC ER ON THE BASIS OF BALANCE SHEET FOR ASSESSMENT YEAR 2000 - 01 NOTED THAT THE ASSESSEE WAS HAVING OPENING BALANCE OF RS.39,70,000/ - AS ON 01.04.2000 AND DURING THE YEAR, THERE WAS NET INCREASE OF RS.3,70,000/ - . THE ASSESSING OFFICER NOTED THAT THE LOANS DUR ING THE YEAR OF RS.26,70,000/ - WAS GIVEN BEYOND SEARCH PERIOD I.E. LOANS WERE RECEIVED BACK OUT OF OPENING BALANCE OF RS.39,70,000/ - BUT SINCE THE SOURCE OF LOANS I.E. SUM OF RS.39,70,000/ - WAS NEVER OFFERED FOR TAXATION BEFORE THE SEARCH PERIOD , T HE ASSES SING OFFICER HELD THAT THE SOURCE REMAINED UNEXPLAINED AND HENCE, IT HAD TO BE TAXED IN THE RESPECTIVE YEARS IN WHICH THE AMOUNT WAS RECEIVED BACK AS UNEXPLAINED MONEY. HENCE, HE HAD ADDED SUM OF RS.26,70,000/ - IN THE RESPECTIVE ASSESSMENT YEARS. 64. T HE CIT(A) ACCEPTED THE PLEA OF ASSESSEE THAT THE OPENING BALANCE AS ON 01.04.2000 WAS AT RS.39,70,000/ - AND IF ANY ADDITION HAD TO BE MADE IN THE HANDS OF ASSESSEE, IF FOUND TO BE UNEXPLAINED, THEN THE SAME WAS IN ASSESSMENT YEAR 1999 - 2000 . THE ASSESSING OFFICER HAD ACCEPTED THAT INVESTMENT PERTAINED TO THE YEAR PRIOR TO SIX YEARS COVERED UNDER SECTION 153A OF THE ACT AND ALSO THE ASSESSMENT FOR ASSESSMENT YEAR 1999 - 2000 WAS COMPLETED UNDER SECTION 1 43(3) OF THE ACT AND THE ADDITION OF SAI D AMOUNT OF RS.39,70,000/ - WAS NOT MADE IN THE SAID YEAR. WHERE THE CURRENT ASSETS WERE ACCEPTED AS GENUINE IN ASSESSMENT YEAR 1999 - 2000 , THE CIT(A) HELD THAT THE SAME COULD NOT BE ADDED IN THE YEARS WHEN AMOUNTS WERE RECEIVED BACK. 65. THE REVENUE IS IN APPEAL AGAINST THE FINDINGS OF CIT(A) . W E FIND NO MERIT IN THE GROUND OF APPEAL RAISED BY THE REVENUE, WHERE THE AMOUNT OF 42 ITA NOS.1225 TO 1231/PUN/2012 & ORS RS.39,70,000/ - W AS THE OPENING BALANCE AS ON 01.04.2000. HENCE, THE AMOUNT HAVING BEEN ADVANCED IN ASSESSMENT YEAR 1999 - 2000 IN WHICH YEAR THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT IN THE HANDS OF ASSESSEE, BUT NO ADDITION WAS MADE AND CONSEQUENTLY, NO ADDITION IS TO BE MADE IN THE HANDS OF ASSESSEE , WHEN THE AMOUNT IS RECEIVED BACK, AS IT STANDS EXPLAINED . THE GROUND OF APPEAL NO.9 RAISED BY THE REVENUE IS THUS, DISMISSED. 66. THE ISSUE IN GROUNDS OF APPEAL NO.10 AND 11 IS AGAINST UNEXPLAINED CREDITORS AND UNEXPLAINED ADVANCES IN THE RESPECTIVE YEARS. THE BASIS FOR MAKING THE SAID ADDITION ON ACCOUNT OF CREDITORS WAS THE NON - EXPLANATION OF SOURCE OF LOANS RECEIVED IN THE RESPEC TIVE YEARS AND THE ADDITION WAS MADE IN ASSESSMENT YEARS 2003 - 04, 2004 - 05 AND 2005 - 06 OF RS.15,75,000/ - , RS.1,50,000/ - AND RS.12,25,000/ - RESPECTIVELY. THE ASSESSEE IN THE APPELLATE PROCEEDINGS POINTED OUT THAT IT HAD FILED VARIOUS DETAILS LIKE CONFIRMATI ON LETTERS, PAN NUMBERS, BALANCE SHEET AND CASH FLOW STATEMENT DURING ASSESSMENT PROCEEDINGS AND THE CIT(A) NOTED THAT THE ASSESSEE HAD FURNISHED THE LOAN CONFIRMATION FROM THE PARTIES AND HAD ALSO FURNISHED THE OTHER RELEVANT DETAILS . THE ONLY REASONS WH Y THE AMOUNTS WERE ADDED WAS THAT THE ASSESSEE HAD FAILED TO FILE THE RETURNS OF INCOME OF CREDITORS. HOWEVER, THE ADDRESSES OF THE PARTIES WERE FOUND AND PAN NUMBERS OF THE PERSONS WERE AVAILABLE EXCEPT FOR SNEHDEEP SIZER WHICH WAS FILED DURING APPELLATE PROCEEDINGS. ONLY IN RESPECT OF R B DANGE, THE CONFIRMATION COULD NOT BE PRODUCED. THE CIT(A) THUS, DELETED THE ADDITION EXCEPT IN RESPECT OF R B DANGE. FURTHER, IN RESPECT OF ADVANCES RECEIVED OF RS.7 LAKHS FROM SHRI MOHAN SATPUTE, THE ASSESSING OFFIC ER OBSERVED THAT IN THE DETAILS GIVEN , MENTIONED ONLY THE DATE OF RECEIPT OF MONEY BUT NOT THE DATE OF ADVANCE OF THE SAID AMOUNT. THE ASSESSING OFFICER HELD THE ASSESSEE 43 ITA NOS.1225 TO 1231/PUN/2012 & ORS NOT TO HAVE PROVEN THE GENUINENESS OF THE TRANSACTIONS AND CREDITWORTHINESS OF CREDI TORS AND THE SAME WAS TREATED AS INCOME OF ASSESSEE IN ASSESSMENT YEAR 2005 - 06. 67. THE CIT(A) NOTED AS UNDER: - 105. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE APPELLANT. THE ADDITION OF RS.7,00,000/ - IS MADE FROM A STATEMENT PROVIDED BY THE APP ELLANT WHICH IS A LIST OF 19 PERSONS TO WHOM ADVANCES WERE GIVEN ON VARIOUS DATES FROM FINANCIAL YEAR 1998 - 99 ONWARDS AND FROM WHOM THESE ADVANCES WERE RECEIVED BACK ON VARIOUS DATES FROM FINANCIAL YEARS 1998 - 99 TO 2005 - 06. IN THIS CHART, ITEM NO.16 PERTA INS TO MOHAN SATPUTE, AGAINST WHOM AN OPENING DEBIT BALANCE OF RS.2,00,000/ - IS SHOWN AND A REPAYMENT OF RS.7,00,000/ - IS SHOWN ON 12/03/2005. THE APPELLANT STATED THAT THE AMOUNT MENTIONED AGAINST SHRI MOHAN SATPUTE IS INCORRECT. HE PRODUCED THE ACCOUNT EXTRACTS OF SHRI MOHAN SATPUTE SINCE FINANCIAL YEAR 1998 - 99. THE ACCOUNT EXTRACTS SHOW THAT SHRI SATPUTE HAD TAKEN A LOAN OF RS.2,00,000/ - WHICH WAS SHOWN AS OUTSTANDING IN THE BEGINNING OF FINANCIAL YEAR 1999 - 2000. THEREAFTER HE HAD MADE A REPAYMENT OF RS.1,00,000/ - ON 30/03/2002 LEAVING A DEBIT BALANCE OF RS.1,00,000/ - AS 01/04/2002. ON THE SAME DATE, HE BORROWED ANOTHER RS.40,000/ - AND THEREFORE HAD A DEBIT BALANCE OF RS.1,40,000/ - IN THE BOOKS OF BADSHAH BAGWAN. THIS POSITION CONTINUED TILL 31/03/2 005. DURING THE MONTH OF MARCH, 2005, SHRI SATPUTE MADE A PAYMENT OF RS.40,000/ - ON 11/03/2005 AND RS.2,00,000/ - ON 31/03/2005 . THUS, SHRI SATPUTE HAD A CREDIT BALANCE OF RS.1,00,000/ - ON 31/03/2005. IN THE BALANCE SHEET FOR THE FINANCIAL YEAR 2004 - 05, SHRI SATPUTE IS REFLECTED AS A DEBTOR HAVING CREDIT BALANCE ON 31/03/2005. THIS BEING SO, IT APPEARS THAT THE CONTENTION OF THE APPELLANT REGARDING THE STATEMENT GIVEN TO THE ASSESSING OFFICER IN RESPECT OF VARIOUS ADVANCES, CONTAINS ERRONEOUS DATA IN RES PECT OF SHRI MOHAN SATPUTE AND IN ANY CASE, THAT STATEMENT HAS NO EFFECT EITHER ON THE CASH FLOW OR ON THE BALANCE SHEET OF THE APPELLANT. THEREFORE, THE APPELLANTS SUBMISSIONS ARE ACCEPTED AND THIS ADDITION IS DELETED. 68. ON CONSIDERATION OF THE FACT S AND CIRCUMSTANCES AND AFTER HEARING BOTH THE LEARNED AUTHORIZED REPRESENTATIVES, NO ERROR IN THE FINDINGS OF CIT(A) AND CONSEQUENTLY, WE FIND NO MERIT IN THE GROUND OF APPEAL NO.11 RAISED BY THE REVENUE AGAINST DELETION OF ADDITION ON ACCOUNT OF UNEXPLAI NED ADVANCES. THE ASSESSEE HAVING FILED THE LOAN CONFIRMATION AND OTHER DETAILS, WHEREIN THE IDENTITY, CREDIT WORTHINESS AND GENUINENESS OF TRANSACTION HAS BEEN ESTABLISHED, THEN THERE IS NO MERIT IN MAKING ANY ADDITION IN THE HANDS OF ASSESSEE EXCEPT IN THE CASE OF R B DANGE OF RS.1,25,000/ - , SINCE THE ASSESSEE HAS FAILED TO FILE ANY CONFIRMATION IN THIS REGARD. THE ASSESSEE IS IN APPEAL AGAINST THE SAID ADDITION 44 ITA NOS.1225 TO 1231/PUN/2012 & ORS VIDE GROUND OF APPEAL NO.9 AND WE HAVE ALREADY CONFIRMED THE SAME. THE GROUND OF APPEAL NO. 10 RAISED BY THE REVENUE IS THUS, DISMISSED. 69. THE GROUNDS OF APPEAL NO.12 AND 13 RAISED BY THE REVENUE ARE AGAINST PROTECTIVE ADDITION MADE IN THE HANDS OF ASSESSEE ON ACCOUNT OF INVESTMENTS IN BENAMI FDRS AND INTEREST CHARGED THEREON AND INVESTMENT IN BHISHI RESPECTIVELY . THE SUBSTANTIVE ADDITION HAS BEEN MADE IN THE HANDS OF PAT SANSTHA, WHEREIN WE HAVE ALREADY UPHELD THE ADDITION IN THE HANDS OF PAT SANSTHA VIDE ORDER OF EVEN DATE . CONSEQUENTLY, THE ADDITION MADE ON PROTECTIVE BA S IS DOES NOT STAND. 70. THE GROUNDS OF APPEAL RAISED BY THE REVENUE IN ASSESSMENT YEAR 2005 - 06 ARE CONSOLIDATED AND RELATE TO ASSESSMENT YEARS 2000 - 01 TO 2006 - 07 AND ACCORDINGLY, THE APPEALS OF REVENUE IN ALL THE YEARS ARE PARTLY ALLOWED . 71. THE REVENUE IN ITA NO.1312/PUN/2012 RELATING TO ASSESSMENT YEAR 1999 - 2000 HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1 . (I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION TOWARDS INVESTMENT IN B ENAMI FDRS AND INTEREST CHARGED THEREON IGNORING THE FACT THAT ASSESSEE COULD NOT EXPLAIN SOURCES FOR THE SAID INVESTMENTS? (II) THE ORDER OF LD. CIT(A) DELETING THE ADDITION TOWARDS UNEXPLAINED INVESTMENT MADE BY THE ASSESSEE HOLDING THAT THE SUBSTANTIVE ADDITIONS HAVE BEEN CONFIRMED IN THE HANDS OF RESPECTIVE PATSANSTHAS IS ERRONEOUS AS SUBSTANTIVE ADDITIONS WERE NOT ACTUALLY CONFIRMED IN THE HANDS OF RECIPIENT PATSANSTHAS AS CLAIM OF RESPECTIVE PATSANSTHAS U/S 80P(2)(A)(I) HAS BEEN ALLOWED BY THE CIT(A) BY WHICH ENTIRE ADDITIONS U/S 68 OF THE ACT WERE NULLIFIED. 2 . WITHOUT PREJUDICE TO THE ABOVE GROUND LD CIT(A) HAS ERRED IN NOT EXERCISING HIS PLENARY POWERS WHICH ARE CONTERMINOUS WITH THAT OF ASSESSING OFFICER AS PER THE RATIO LAID DOWN BY CIT VS. KANPUR COAL SYNDICATE (1964) 53 ITR 225, 229(SC). 3 . THE APPELLANT PRAYS THAT THE ORDER OF THE LD CIT(A) BE VACATED AND THAT OF THE AOS ORDER MAY BE RESTORED. 45 ITA NOS.1225 TO 1231/PUN/2012 & ORS 72. THE ONLY ISSUE RAISED BY THE REVENUE VIDE GROUND OF APPEAL NO.1 IS AGAINST DELETION OF ADDITION TOWARDS INVESTMENT IN BENAMI FDRS AND INTEREST CHARGED THEREON. THE REVENUE IS IN APPEAL AGAINST THE ORDER OF CIT(A) IN DELETING THE AFORESAID ADDITION ON THE GROUND THAT THE ADDITION TOWARDS UNEXPLAINED INVESTMENTS HAVE BEEN CONFIRMED IN THE HANDS OF RES PECTIVE PAT SANSTHA. SINCE THE INCOME OF PAT SANSTHA WAS HELD TO BE EXEMPT UNDER SECTION 80P(2)(A)(I) OF THE ACT, THEN EFFECT OF ENTIRE ADDITION GETS NULLIFIED. WE FIND NO MERIT IN THE SAID GROUND OF APPEAL RAISED BY THE REVENUE AND UPHOLDING THE ORDER O F CIT(A) IN THIS REGARD THAT ONCE THE ADDITION HAS BEEN MADE IN RESPECT OF BENAMI FDRS AND INTEREST CHARGED THEREON IN THE HANDS OF RESPECTIVE PAT SANSTHA TO WHICH THE SAME PERTAINS, THEN IRRESPECTIVE OF THE FACT THAT THE INCOME OF PAT SANSTHA IS DEDUCTIBL E UNDER SECTION 80P(2)(A)(I) OF THE ACT, THE ADDITION CANNOT BE UPHELD IN THE HANDS OF ASSESSEE. 73. IN RESPECT OF ALL OTHER ASSESSEES, THE ONLY ISSUE WHICH REMAINS IS ESTIMATION OF AGRICULTURAL INCOME IN THE HANDS OF RESPECTIVE ASSESSEES AND CONSEQUENT ADDITION MADE ON ACCOUNT OF NEGATIVE CASH FLOW AND INVESTMENTS. FURTHER, THE ASSESSEE IS ALSO AGGRIEVED BY THE ADDITION SUSTAINED ON ACCOUNT OF VARIOUS INVESTMENTS IN DIFFERENT YEARS IN THE HANDS OF EACH OF THE ASSESSEE. 74. WE HAVE ALREADY DECIDED THE S AID ISSUE IN THE CASE OF BADSHA BAGWAN AND FOLLOWING THE SAME PARITY OF REASONING, WE DIRECT THE ASSESSING OFFICER TO DETERMINE THE AGRICULTURAL INCOME IN THE HANDS OF RESPECTIVE ASSESSEES AS PER OUR ORDER AND IN VIEW OF THEIR LAND SHAREHOLDING AND THEREAF TER, DETERMINE WHETHER ANY ADDITION NEEDS TO BE SUSTAINED ON ACCOUNT OF NEGATIVE CASH FLOW. 46 ITA NOS.1225 TO 1231/PUN/2012 & ORS FURTHER, THE ASSESSING OFFICER IS ALSO DIRECTED TO DETERMINE THE AVAILABILITY OF CASH FOR MAKING RESPECTIVE INVESTMENTS IN DIFFERENT HANDS. 75. VIDE GROUND OF A PPEAL NO.9, THE ASSESSEE SHRI KHATUNBI BADSHA IN ASSESSMENT YEAR 2005 - 06 IS AGGRIEVED BY THE ADDITION OF UNEXPLAINED CREDITOR OF RS.9,25,000/ - . THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT CONFIRMATION AND THE PAN NUMBER OF THE SAID CREDITOR ARE DULY AVAILABLE. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO VERIFY THE SAME AND DECIDE THE ISSUE AFTER AFFORDING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. IN RESPECT OF ADDITION ON ACCOUNT OF INTEREST ON LOAN GIVEN, FOLLOWI NG THE SAME PARITY OF REASONING AS IN SHRI BADSHA BAGWAN, THE SAID ADDITION IS DELETED IN THE HANDS OF ASSESSEE THEREIN. 76. IN THE CASE OF SHRI IRFAN BADSHA BAGWAN, FIRST ADDITION IS ON ACCOUNT OF ESTIMATION OF AGRICULTURAL INCOME, NEGATIVE CASH FLOW AND UNEXPLAINED CASH F O UND, WHICH ARE INTER - LINKED. OUR DECISION IN THE PARAS HEREINABOVE SHALL APPLY TO DETERMINE THE AGRICULTURAL INCOME IN THE HANDS OF THEIR RESPECTIVE FAMILY MEMBERS AS PER THEIR SHAREHOLDING. ACCORDINGLY, WE HOLD SO. SECONDLY, THE ISS UE OF INVESTMENT IN PANHALA PROPERTY HAS ALREADY BEEN DECIDED BY US AND IN CASE OF AVAILABILITY OF CASH, NO ADDITION IS WARRANTED. SIMILAR IS THE DECISION IN THE CASE OF INVESTMENT IN LICENSE, CONSTRUCTION OF PUMP AND STOCK. NOW, COMING TO UNEXPLAINED MO NEY RECEIVED OF RS.1,50,000/ - IN ASSESSMENT YEAR 2003 - 04. THE ASSESSEE HAS FAILED TO FILE ANY CONFIRMATION AND HENCE, THE SAID ADDITION IS CONFIRMED IN THE HANDS OF ASSESSEE. THE LAST ADDITION IS ON ACCOUNT OF INTEREST ON LOAN WHICH WAS CHARGED BY THE AS SESSING OFFICER AT 2% WAS REDUCED BY 1% BY THE CIT(A). WE HAVE ALREADY DECIDED THIS ISSUE IN THE CASE OF SHRI BADSHA 47 ITA NOS.1225 TO 1231/PUN/2012 & ORS BAGWAN AND FOLLOWING THE SAME PARITY OF REASONING, WE DELETE THE ADDITION IN THE HANDS OF ASSESSEE. ACCORDINGLY, THE GROUNDS OF APPEAL RA ISED BY THE ASSESSEE AND THE REVENUE ARE DECIDED. 77. IN THE CASE OF SHRI IMRAN BADSHAH BAGWAN, THE ISSUES ARE SAME AS IN THE CASE OF SHRI IRFAN BADSHA BAGWAN AND FOLLOWING THE SAME PARITY OF REASONING, WE DIRECT THE ASSESSING OFFICER TO DECIDE THE ISSUE. WE CONFIRM THE ADDITION OF RS.1,50,000/ - ON ACCOUNT OF UNEXPLAINED MONEY RECEIVED FOR WHICH THE ASSESSEE HAS FAILED TO FILE ANY CONFIRMATION. 78. SIMILARLY, IN THE CASE OF SHRI MOHSIN BADSHAH BAGWAN, THE OTHER ISSUES ARE AS IN THE CASE OF SHRI IFRAN B ADSHA BAGWAN AND WE DIRECT THE ASSESSING OFFICER TO CARRY OUT THE VERIFICATION EXERCISE IN RESPECT OF UNEXPLAINED MONEY RECEIPT OF RS.1 LAKH AS IN THE EARLIER PARAS. IN THE ABSENCE OF ANY CONFIRMATION, THE SAID ADDITION IS UPHELD IN THE HANDS OF ASSESSEE. 79. IN RESPECT OF ASSESSMENT YEAR 2006 - 07 IN THE CASE OF ALL ASSESSEES BEFORE US, IT MAY BE POINTED OUT THAT IN ALL THE APPEALS, THE ASSESSEE HAS NOT PRESSED THE ISSUE OF ASSESSMENT FRAMED UNDER SECTION 143(3) OF THE ACT. IN RESPECT OF SEARCH YEAR, THE ASSESSEE HAD ALLEGED THAT THE ASSESSMENT SHOULD BE COMPLETED UNDER SECTION 153A R.W.S. 143(3) OF THE ACT. HOWEVER, THE AUTHORITIES BELOW HAVE COMPLETED THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT, SINCE ASSESSMENT YEAR 2006 - 07 WAS SEARCH YEAR. SHRI BA DSHA BAGWAN IN ASSESSMENT YEAR 2006 - 07 HAS RAISED THIS ISSUE VIDE GROUND OF APPEAL NO.1 AND IN THE CASE OF ALL THE OTHER ASSESSEES, THE SAID ISSUE HAS BEEN RAISED BY WAY OF GROUND OF APPEAL NO.3 EXCEPT IN THE CASE OF SHRI MOHSIN BADSHAH BAGWAN, WHERE IT IS GROUND OF 48 ITA NOS.1225 TO 1231/PUN/2012 & ORS APPEAL NO.4. THE SAID GROUND OF APPEAL HAS NOT BEEN PRESSED BY THE RESPECTIVE ASSESSEES AND HENCE, THE SAME IS DISMISSED AS NOT PRESSED. 80. IN THE RESULT, ALL THE APPEALS OF DIFFERENT ASSESSEES AND THE REVENUE FOR DIFFERENT ASSESSMENT YEARS A RE PARTLY ALLOWED. ORDER PRONOUNCED ON THIS 11 TH DAY OF AUGUST , 201 7 . SD/ - SD/ - (ANIL CHATURVEDI) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 11 TH AUGUST , 201 7 . G G C C V V S S R R / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT (A) - I, PUNE ; 4. / THE CIT - I, PUNE ; 5. , , / DR A , ITAT, PUNE; 6. / GUARD FILE. / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE