SHRI. S ARPUTHARAJ, COIMBATORE V. DCIT CENTRAL CIRCLE 1, COIMBATORE

ITA 1499/CHNY/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5105 (ITAT-CHENNAI)
• Duration Of Justice: 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2015-2016
• Appeal Filed On: 02-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAILENDRA MAMIDI
• Keywords: Unexplained investment; Business income; Opportunity of being heard; Principle of natural justice
• Section: 201; 13; 22; 20

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI , , BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER & SHRI S.JAYARAMAN , ACCOUNTANT MEMBER I.T.A.NOS.1493,1494,1495,1496,1497,1498 & 1499/CHNY /2018 ASSESSMENT YEARS: 2009-10, 2010-11, 2011-12, 2012-1 3, 2013-14, 2014-15 & 2015-16 SHRI S.ARPUTHARAJ , 5,KRISHNA NAGAR, SOWRIPALAYAM, NEAR ESI DISPENSARY, COIMBATORE 641 028. VS. THE DCIT, CENTRAL CIRCLE-1, COIMBATORE. [PAN ADJPA 9492 L ] ( / APPELLANT) ( /RESPONDENT) / APPELLANT BY : NONE /RESPONDENT BY : MR.SAILENDRA MAMIDI,PCIT,D.R ! / DATE OF HEARING : 13 - 0 6 - 201 8 '#$% ! / DATE OF PRONOUNCEMENT : 13 - 0 6 - 201 8 ! / O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER ITA NOS.1493 TO 1499/CHNY/2018 ARE THE APPEALS FILE D BY THE ASSESSEE AGAINST THE ORDERS OF THE COMMISSIO NER OF INCOME TAX (APPEALS)-18, CHENNAI, IN ITA NO.425 TO 427/16- 17 DATED 19.02.2018 FOR THE ASSESSMENT YEARS 2009-10,2010-1 1, 2011-12 AND IN ITA NO.428 & 429/16-17 DATED 19.02.2018 FOR THE ASSESSMENT YEARS 2012-13 & 2013-14 AND IN ITA NO.43 0 & ITA NOS.1493 TO 1498/CHNY/18 MR.S.ARPUTHARAJ :- 2 -: 431/16-17 DATED 19.02.2018 FOR THE ASSESSMENT YEARS 2014-15 & 2015-16 2. AS ALL THE APPEALS ARE RELATED TO THE SAME ASSE SSEE AND INTER-CONNECTED, ALL APPEALS ARE DISPOSED OFF BY TH IS COMMON ORDER. 3. NONE REPRESENTED ON BEHALF OF THE ASSESSEE AND MR.SAILENDRA MAMIDI REPRESENTED ON BEHALF OF THE REVENUE. WE TOOK UP THE CASE FOR ADJUDICATION AFTER HEARING THE LD.D .R AND PERUSING THE MATERIALS ON RECORD AND MORE SPECIFICALLY IN DUE OB EDIENCE AND COMPLIANCE TO THE ORDER OF THE HONBLE JURISDICITIO NAL HIGH COURT IN W.P. NO.12569 OF 2018 DATED 16.05.2018. 4. THE ASSESSEE HAS PRESENTED THESE APPEALS BEFORE THE TRIBUNAL ON 02.05.2018, WHICH WERE FOUND TO BE DEFE CTIVE AND NOTICE FOR RECTIFICATION OF DEFECTS HAS BEEN ISSUED TO THE ASSESSEE ON 22.05.2018. IN THE MEANTIME, THE ASSESSEE HAD FILE D WRIT PETITIONS BEFORE THE HONBLE JURISDICTIONAL HIGH COURT OF MAD RAS AGAINST A TAX RECOVERY DEMAND NOTICE ISSUED BY THE TAX RECOVERY O FFICER (TRO) DATED 07.05.2018. THE HONBLE JURISDICTIONAL HIGH C OURT OF MADRAS IN W.P.NO.12569 OF 2018 VIDE ITS ORDER DATED 16.05.201 8 HAS DIRECTED THE TRIBUNAL TO CONSIDER THE APPEAL FILED BY THE P ETITIONER, WHICH IS ITA NOS.1493 TO 1498/CHNY/18 MR.S.ARPUTHARAJ :- 3 -: PENDING ON BEFORE THE CHENNAI TRIBUNAL ALONG WITH T HE STAY PETITIONS AND PASS APPROPRIATE ORDERS IN ACCORDANCE WITH LAW WITHIN A PERIOD OF TWO WEEKS FROM THE DATE OF RECEIPT OF A COPY OF THI S ORDER OF THE HONBLE JURISDICTIONAL HIGH COURT OF MADRAS. SUBSEQ UENTLY, ON 30.05.2018, THE TRIBUNAL WAS SERVED WITH A REQUEST FROM THE TRO REQUESTING THE TRIBUNAL TO INTIMATE THE STATUS OF T HE STAY PETITIONS FILED BY THE ASSESSEE. 4.1 HERE, IT MUST BE MENTIONED THAT THE COUNSEL FO R THE ASSESSEE HAS SUBMITTED BEFORE THE HONBLE JURISDICT IONAL HIGH COURT OF MADRAS IN THE WRIT PETITION THAT FOR THE REASONS BEST KNOWN, THE ITAT HAS NOT TAKEN THE APPEAL ALONG WITH THE STAY PETITI ONS ON FIL E. IT MUST ALSO BE MENTIONED HERE THAT THERE ARE NO STAY PETIT IONS FILED BY THE ASSESSEE, WHICH ARE PENDING BEFORE THIS TRIBUNAL. CONSEQUENT TO THE ORDER OF THE HONBLE JURISDICTIONAL HIGH COURT OF M ADRAS IN THE WRIT PETITION, THE APPEALS OF ASSESSEE WERE POSTED FOR H EARING ON 04.06.2018 VIDE THE NOTICE ISSUED TO THE ASSESSEE O N 22.05.2018, WHEREIN THE DEFECTS IN FILING OF THE APPEAL WAS ALS O BROUGHT TO THE NOTICE OF THE ASSESSEE. VIDE LETTER DATED 01.06.201 8, THE COUNSEL ON BEHALF OF THE ASSESSEE RECTIFIED THE DEFECTS ON 04. 06.2018. THE COUNSEL ON BEHALF OF THE ASSESSEE VIDE HIS LETTER D ATED 06.06.2018 SOUGHT AN ADJOURNMENT TO 13.06.2018 SPECIFICALLY SU BMITTING THAT ITA NOS.1493 TO 1498/CHNY/18 MR.S.ARPUTHARAJ :- 4 -: MODIFICATION TO THE ORDER OF THE HONBLE JURISDICTI ONAL HIGH COURT OF MADRAS IN WRIT PETITION NO.12569/2018 WAS BEING SOU GHT. 4.2 TODAY, ON 13.06.2018, THE COUNSEL ON BEHALF OF THE ASSESSEE HAS TAKEN PERMISSION OF THE BENCH TO WITHDRAW HIS V AKALATHS FILED IN RESPECT OF THE ABOVE MENTIONED APPEALS. THE LD.COUN SEL FOR THE ASSESSEE HAS SPECIFICALLY MENTIONED THAT SINCE THE AUTHORISED REPRESENTATIVES REPEATED ATTEMPT OF GETTING INSTRU CTIONS FROM THE ASSESSEE THROUGH THE INSTRUCTING COUNSEL MR.P.J.RIS HIKESH, ADVOCATE FAILED, IT IS REQUESTED THAT ALL FURTHER COMMUNICAT ION IN RELATION TO THE ABOVE APPEALS MAY BE SENT TO THE ASSESSEE DIRECTLY, SUBJECT TO THE FINAL DECISION OF THE BENCH. AS IT IS NOTICED THAT THERE IS A DIRECTION FROM THE HONBLE JURISDICTIONAL HIGH COURT OF MADRA S TO DISPOSE OF THE APPEALS ALONG WITH THE STAY PETITIONS WITHIN TWO WE EKS FROM THE DATE OF RECEIPT OF COPY OF THE ORDER, AND AS THE LAST DA TE IS 14.06.2018, IN DUE COMPLIANCE TO DIRECTION OF THE HONBLE JURISDIC TIONAL HIGH COURT, THESE APPEALS WERE TAKEN UP FOR HEARING. THE FACT THAT SPECIFIC DATE HAS BEEN SOUGHT BY THE COUNSEL ON THE LAST DATE OF HEARING AND TODAY, THE COUNSEL HAS WITHDRAWN HIS VAKALATHS WOULD CLEAR LY SHOW THAT THE ASSESSEE DOES NOT HAVE ANY FURTHER EVIDENCES OR DOC UMENTS TO PRESENT IN HIS CASE AND DESIRES OF GETTING DECISION ON THE BASIS OF THE FACTS AVAILABLE ON RECORD. ITA NOS.1493 TO 1498/CHNY/18 MR.S.ARPUTHARAJ :- 5 -: 4.3 IT MUST ALSO BE MENTIONED HERE THAT UNDER NORMA L CIRCUMSTANCES, AN APPEAL WHICH IS FILED EITHER BY T HE ASSESSEE OR THE DEPARTMENT, IS NOT TAKEN UP FOR HEARING FOR 60 DAYS FROM THE DATE OF FILING OF THE APPEAL, BECAUSE THE REVENUE OR THE AS SESSEE HAS 60 DAYS TIME FROM THE DATE OF RECEIPT OF ORDER OF THE CIT(A PPEALS) TO FILE THE APPEAL BEFORE THE TRIBUNAL, AND ONCE SUCH APPEAL IS FILED AND THE COPY OF THE APPEAL IS SERVED ON THE RESPONDENT. THE RES PONDENT HAS A PERIOD OF 30 DAYS FOR FILING THE CROSS OBJECTIONS, IF ANY. IN THE PRESENT CASE, THE APPEALS HAVE BEEN PRESENTED ON 02.05.2018 , THE SAID 60 DAYS WOULD EXPIRE ONLY ON 02.07.2018. HOWEVER, ON A CCOUNT OF SUBMISSIONS MADE BY THE ASSESSEE BEFORE THE HONBLE JURISDICTIONAL HIGH COURT OF MADRAS, AND ALSO DIRECTIONS GIVEN BY THE JURISDICTIONAL HIGH COURT TO THE TRIBUNAL, THE APPEALS OF ASSESSEE ARE BEING DISPOSED OFF IN LINE WITH THE DIRECTIONS OF THE HONBLE JURI SDICTIONAL HIGH COURT OF MADRAS. 5. THE FACTS OF THE CASE ARE THAT THE ASSESSEE HER EIN IS AN INDIVIDUAL, WHO IS IN THE BUSINESS OF REAL ESTATE, MONEY LENDING AND OTHER SOURCES. THERE WAS A SEARCH U/S.132 OF THE AC T ON THE PREMISES OF THE ASSESSEE ON 26.02.2015. CONSEQUENT TO THE SE ARCH, NOTICE U/S.153A OF THE ACT WAS SERVED ON THE ASSESSEE ON 2 2.07.2015. AS PER THE NOTICE, THE RETURN WAS REQUIRED TO BE FILED WITHIN 15 DAYS FROM THE DATE OF RECEIPT OF THE NOTICE, I.E. 22.07.2015. VIDE SUBSEQUENT ITA NOS.1493 TO 1498/CHNY/18 MR.S.ARPUTHARAJ :- 6 -: LETTERS, THE ASSESSEE HAS SOUGHT FOR VARIOUS DOCUME NTS/PAPERS, PHOTOCOPIES OF SEIZED IMPOUNDED MATERIALS, COPIES O F PANCHNAMA AND SUCH OTHER EVIDENCES AS PER RECORD AVAILABLE WITH T HE REVENUE. THE FINAL PROCESS OF COPING ELECTRONIC DEVICES WAS COMP LETED ON 27.04.2016. IN RESPONSE TO THE PROSECUTION NOTICE, THE ASSESSEE HAD REQUESTED THAT REQUIRED TIME FOR FILING HIS RETURN OF INCOME TILL 30.06.2016, THOUGH THE SAME WAS NOT GRANTED BY THE REVENUE. LASTLY, THE ASSESSEE HAD FILED HIS RETURNS BETWEEN 29.06.20 16 AND 18.09.2016 FOR THE VARIOUS ASSESSMENT YEARS UNDER APPEALS. TH E ASSESSMENTS WERE COMPLETED ON 30.12.2016 WITH CERTAIN ADDITIONS . THE ASSESSEE PREFERRED APPEALS BEFORE THE LD.CIT(A), WHO DISPOSE D OFF THE APPEALS AGAINST THE ASSESSEE. AGGRIEVED WITH THE ORDERS OF THE CIT(APPEALS), NOW THE ASSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL. ITA NO.1493/CHNY/2018 (A.Y 2009-10) 6. THE ASSESSEE IN THIS APPEAL HAS RAISED 22 GROUN DS FOR ADJUDICATION AS FOLLOWS:- 1. THE COMMON ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) 18, CHENNAI 600 034 DATED 19.02.2018 IN I.T.A.NOS.425 TO 427/16-17 IN SO FAR AS THE ISSUES CONTESTED IN T HE PRESENT APPEAL PERTAINING TO THE ABOVE ASSESSMENT YEAR IS CONTRARY TO LAW, FACTS, AND IN THE CIRCUMSTANCES OF THE CASE. 2. THE CIT (APPEALS) ERRED IN SUSTAINING THE RENTAL INCOME AS UNDISCLOSED INCOME BASED ON THE FINDINGS IN PARA 6. 1 OF THE IMPUGNED ORDER WITHOUT ASSIGNING PROPER REASONS AND JUSTIFICATION. ITA NOS.1493 TO 1498/CHNY/18 MR.S.ARPUTHARAJ :- 7 -: 3. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE RELEVANT FACTS WERE COMPLETELY IGNORED DESPITE SUCH FACTS WERE BROUGHT TO THE NOTICE OF THE ASSESSING OFFICER AS WELL AS BEFORE HIM AND FUR THER OUGHT TO HAVE APPRECIATED THAT THE ASSESSMENT OF THE RENTAL INCOM E IN THE HANDS OF THE APPELLANT WAS WRONG AND INCORRECT BOTH ON FACTS AND IN LAW. 4. THE CIT (APPEALS) ERRED IN SUSTAINING THE ASSESS MENT OF THE LOAN TRANSACTION WITH SHRI C.GIRIDHARAN ON REACHING IRRE LEVANT CONCLUSIONS WHILE SUSTAINING SUCH SUM AS UNDISCLOSED INCOME IN THE COMPUTATION OF TAXABLE TOTAL INCOME WITHOUT ASSIGNING PROPER RE ASONS AND JUSTIFICATION. 5. THE CIT (APPEALS) ERRED IN SUSTAINING THE ASSESS MENT OF THE LOAN TRANSACTION WITH SHRI C.HARIHARAN ON REACHING IRREL EVANT CONCLUSIONS WHUE SUSTAINING SUCH SUM AS UNDISCLOSED INCOME IN T HE COMPUTATION OF TAXABLE TOTAL INCOME WITHOUT ASSIGNING PROPER RE ASONS AND JUSTIFICATION. 6. THE CIT (APPEALS) ERRED IN SUSTAINING THE ASSESS MENT OF THE LOAN TRANSACTION WITH SHRI C.R.NARAYANASWAMY ON REACHING IRRELEVANT CONCLUSIONS WHILE SUSTAINING SUCH SUM AS UNDISCLOSE D INCOME IN THE COMPUTATION OF TAXABLE TOTAL INCOME WITHOUT ASSIGNI NG PROPER REASONS AND JUSTIFICATION. 7. THE CIT (APPEALS) ERRED IN SUSTAINING THE ASSESS MENT OF THE LOAN TRANSACTION WITH SHRI N.VENKATRAMAN ON REACHING IRR ELEVANT CONCLUSIONS WHILE SUSTAINING SUCH SUM AS UNDISCLOSE D INCOME IN THE COMPUTATION OF TAXABLE TOTAL INCOME WITHOUT ASSIGNI NG PROPER REASONS AND JUSTIFICATION. 8. THE CIT (APPEALS) ERRED IN SUSTAINING THE ASSESS MENT OF THE LOAN TRANSACTION WITH DR.S.RAMESHKUMAR ON REACHING IRREL EVANT CONCLUSIONS WHILE SUSTAINING SUCH SUM AS UNDISCLOSE D INCOME IN THE COMPUTATION OF TAXABLE TOTAL INCOME WITHOUT ASSIGNI NG PROPER REASONS AND JUSTIFICATION. 9. THE CIT (APPEALS) ERRED IN SUSTAINING THE ASSESS MENT OF THE LOAN TRANSACTION WITH MR.PONNAPPAN ON REACHING IRRELEVAN T CONCLUSIONS WHILE SUSTAINING SUCH SUM AS UNDISCLOSED INCOME IN THE COMPUTATION OF TAXABLE TOTAL INCOME WITHOUT ASSIGNING PROPER RE ASONS AND JUSTIFICATION. 10. THE CIT (APPEALS) ERRED IN SUSTAINING THE ASSES SMENT OF THE LOAN TRANSACTION WITH MR.THANGAVEL ON REACHING IRRELEVAN T CONCLUSIONS WHILE SUSTAINING SUCH SUM AS UNDISCLOSED INCOME IN THE COMPUTATION OF TAXABLE TOTAL INCOME WITHOUT ASSIGNING PROPER RE ASONS AND JUSTIFICATION. ITA NOS.1493 TO 1498/CHNY/18 MR.S.ARPUTHARAJ :- 8 -: 11. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE EXPLANATION OFFERED WITH REGARD TO THE TRANSACTIONS ASSUMED AS CASH LOAN TRANSACTIONS WAS COMPLETELY OVERLOOKED AND BRUSHED ASIDE IN RECORDING PERVERSE FINDINGS OF FACTS IN PARA 6.2 OF THE IMPUGNED ORDER. 12. THE CIT (APPEALS) ERRED IN SUSTAINING THE ADDIT ION RELATING TO THE TRANSACTION OF NANJUNDAPURAM LAND AS UNACCOUNTED IN VESTMENT IN THE COMPUTATION OF TAXABLE TOTAL INCOME WITHOUT ASS IGNING PROPER REASONS AND JUSTIFICATION. 13. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE PRESUMPTION OF EXCESS CASH PAYMENTS WAS WHOLLY UNJUSTIFIED AND OUG HT TO HAVE APPRECIATED THAT IN THE ABSENCE OF DIRECT EVIDENCE, THE SUSTENANCE OF THE SAID ADDITION WAS WRONG, ERRONEOUS, UNJUSTIFIED , INCORRECT AND NOT SUSTAINABLE IN LAW, THEREBY VITIATING THE FINDI NGS IN PARA 6.3 OF THE IMPUGNED ORDER. 14. THE CIT (APPEALS) ERRED IN CONFIRMING THE ASSES SMENT OF THE TRANSACTION WITH M/S KANGAROO IMPEX AS UNDISCLOSED INCOME IN THE COMPUTATION OF TAXABLE TOTAL INCOME WITHOUT ASSIGNI NG PROPER REASONS AND JUSTIFICATION. 15. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE ASSESSMENT OF SUCH QUANTIFIED INCOME BASED ON IRRELEVANT MATERIAL S WAS WHOLLY UNJUSTIFIED AND OUGHT TO HAVE APPRECIATED THAT THE FINDINGS IN PARA 6.4 OF THE IMPUGNED ORDER WERE CRYPTIC AS WELL AS N OT CONSIDERING RELEVANT MATERIALS AND EXPLANATION OFFERED IN RELAT ION THERETO. 16. THE CIT (APPEALS) ERRED IN SUSTAINING THE ASSES SMENT OF INTEREST INCOME FROM THE LOAN TRANSACTIONS WITH M/S KANGAROO IMPEX IN THE COMPUTATION OF TAXABLE TOTAL INCOME WITHOUT ASSIGNI NG PROPER REASONS AND JUSTIFICATION. 17. THE CIT (APPEALS) FAILED TO APPRECIATE THAT HAV ING NOT POINTED OUT ANY MATERIAL FROM THE SEARCH RECORDS, THE ASSES SMENT OF INTEREST INCOME INCLUDING THE PRINCIPAL AMOUNT ADDED WAS WRO NG, ERRONEOUS, UNJUSTIFIED, INCORRECT AND NOT SUSTAINABLE IN LAW. 18. THE CIT (APPEALS) ERRED IN SUSTAINING THE ASSES SMENT OF THE DIFFERENTIAL SUM BETWEEN DISCLOSURE MADE IN SEARCH AND THE RESULTANT RETURNED INCOME IN THE COMPUTATION OF TAXABLE TOTAL INCOME WITHOUT ASSIGNING PROPER REASONS AND JUSTIFICATION. 19. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE ASSESSMENT COMPLETED AFTER SEARCH WAS BAD IN LAW AND IN THE AB SENCE OF DIRECT ITA NOS.1493 TO 1498/CHNY/18 MR.S.ARPUTHARAJ :- 9 -: EVIDENCE COUPLED WITH WRONG INITIATION OF THE PROCE EDINGS WOULD VITIATE THE CONSEQUENTIAL SEARCH ASSESSMENT ON VARI OUS FACETS. 20. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE ISSUES RAISED IN THE ADDITIONAL GROUNDS OF APPEAL WERE NOT ADJUDICAT ED AND OUGHT TO HAVE APPRECIATED THAT THE ISSUES ON FACTS AS WELL A S LEGAL STAND RAISED THEREIN WOULD GO TO THE ROOT OF THE JURISDIC TION OF THE ASSESSING OFFICER IN COMPLETING THE SEARCH ASSESSME NT, THEREBY GROSSLY VIOLATING THE PRINCIPLES OF LEGITIMATE EXPE CTATION. 21. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE RE WAS NO PROPER OPPORTUNITY GIVEN BEFORE PASSING OF THE IMPUGNED OR DER AND ANY ORDER PASSED IN VIOLATION OF THE PRINCIPLES NATURAL JUSTICE WOULD BE NULLITY IN LAW. 22. THE APPELLANT CRAVES LEAVE TO FILE ADDITIONAL G ROUNDS/ARGUMENTS AT THE TIME OF HEARING. 7. IT WAS SUBMITTED BY LD.D.R THAT THERE ARE NO TE CHNICAL GROUNDS AND ALL THE GROUNDS ARE IN RESPECT OF ADDIT IONS MADE IN THE ASSESSMENT ORDER. THE LD.D.R DREW OUR ATTENTION TO PARA-3 AT PAGE-5 OF THE ASSESSMENT ORDER REPRESENTING THE ADDITION I N RESPECT OF THE RENTAL INCOME. IT WAS A SUBMISSION THAT ASSESSEE AL ONG WITH HIS FATHER AND MOTHER OWNED SEVERAL APARTMENTS AND INDIVIDUAL HOUSE IN VARIOUS PLACES IN COIMBATORE. THESE HOUSES HAD BEEN LET OUT ON MONTHLY RENTAL BASIS AND THE INCOME RECEIVED IN CASH BY THE M. IN THE COURSE OF SEARCH, IT WAS FOUND THAT THE ASSESSEE HAS RECEIVED THE RENTAL INCOME FROM THE LET OUT PROPERTIES AND THE RENT RECEIPT OF FERED BY THE ASSESSEE IN HIS RETURN OF INCOME WAS NOT IN ACCORDANCE WITH THE MATERIALS SEIZED FROM THE ASSESSEES PREMISES. CONSEQUENTLY, SHOW-CA USE NOTICE WAS ISSUED TO THE ASSESSEE AND THE ASSESSEE HAD REPLIED THAT THE ASSESSEE ITA NOS.1493 TO 1498/CHNY/18 MR.S.ARPUTHARAJ :- 10 - : AND HIS PARENTS ARE ALL TOGETHER STAYING AT THE SAM E HOUSE AND THE RENTAL INCOME WAS RECEIVED BY EACH OF THEM INDEPEND ENTLY. IT WAS A SUBMISSION THAT THE RENTAL INCOME HAD BEEN OFFERED BY EACH OF THE PERSONS AND THE SAME WAS REFLECTED IN THEIR RETURNS . IT WAS A SUBMISSION THAT THEY HAVE PAID TAXES ON THE RENTAL INCOME RECEIVED. IT WAS A SUBMISSION THAT WHEN THIS WAS VERIFIED, THE S AME WAS FOUND TO BE FALSE AND CONSEQUENTLY, THE RENTAL INCOME RELEVA NT TO EACH OF THE ASSESSMENT YEAR HAD BEEN ASSESSED IN THE HANDS OF T HE ASSESSEE FOR THE RELEVANT ASSESSMENT YEAR. ON A SPECIFIC QUERY F ROM THE BENCH, AS TO WHAT PORTION OF THE RENTAL INCOME RELATED TO THE ASSESSEE AND WHAT PORTION RELATED TO THE PARENTS SEPARATELY. IT WAS A SUBMISSION THAT THE ENTIRE RENTAL INCOME WAS ASSESSED IN THE HANDS OF T HE ASSESSEE AS HE WAS THE OWNER OF ALL THE PROPERTIES. 8. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LD.D. R AND PERUSED THE MATERIALS AVAILABLE ON RECORD. ADMITT EDLY, THE PROPERTIES FROM WHICH THE RENTS HAVE BEEN RECEIVED HAVE BEEN C LAIMED BY THE ASSESSEE TO BELONG TO PERSONS OTHER THAN THE ASSESS EE BEING HIS MOTHER AND FATHER. THIS HAS NOT BEEN DISPROVED BY T HE REVENUE. IN FACT, PARA NO.3.3 OF THE ASSESSMENT ORDER SHOWS THA T THE ASSESSEES FATHER AND MOTHER HAVE ALSO OFFERED RENTAL INCOME A ND HAS ALSO FILED THEIR RETURNS DURING VARIOUS ASSESSMENT YEARS. THIS BEING SO, WE ARE OF THE VIEW THAT THE ISSUE IN THIS APPEAL MUST BE REST ORED TO THE FILE OF LD. ITA NOS.1493 TO 1498/CHNY/18 MR.S.ARPUTHARAJ :- 11 - : ASSESSING OFFICER FOR RE-ADJUDICATION AND ASSESSING THE RENTAL INCOME IN THE HANDS OF RESPECTIVE OWNERS OF THE PROPERTY. THE LD. ASSESSING OFFICER SHALL DETERMINE THE RENT ATTRIBUTABLE TO EA CH OF THE PROPERTIES OWNED BY THE ASSESSEE AS ALSO HIS PARENTS SEPARATEL Y AND ADDITION, IF ANY ON THIS COUNT, CAN BE MADE IN THE HANDS OF ASSE SSEE ONLY TO SUCH EXTENT AS HAS NOT BEEN DISCLOSED BY THE ASSESSEE IN HIS RETURN IN RESPECT OF THE PROPERTIES OWNED BY HIM. TO THE EXT ENT OF THE RENT ATTRIBUTABLE TO PROPERTIES OWNED BY THE PARENTS OF THE ASSESSEE, THE SAME, IF AT ALL CAN BE CONSIDERED IN THE HANDS OF T HE PARENTS AFTER DUE PROCESS OF LAW. 9. THE NEXT ISSUE IS IN RESPECT OF UNACCOUNTED CASH LOANS FOR WHICH THE LD.D.R BROUGHT TO OUR ATTENTION TO PARA-4 AT PAGE-7 OF THE ASSESSMENT ORDER. IT WAS A SUBMISSION THAT THE SEI ZED MATERIALS REVEALED THAT THE ASSESSEE HAD GIVEN CASH LOANS TO VARIOUS PERSONS AND THE SAME WERE NOT ACCOUNTED FOR IN THE ASSESSEE S BOOKS. IT WAS A SUBMISSION THAT SHOW-CAUSE NOTICE HAS BEEN ISSUED T O THE ASSESSEE. IT WAS A SUBMISSION THAT THE REPLY OF ASSESSEE WAS ALS O EXTRACTED IN THE ASSESSMENT ORDER. IT WAS A SUBMISSION THAT THE LOAN TRANSACTIONS HAD BEEN ADMITTED BY THE ASSESSEE IN HIS REPLY. IT WAS A SUBMISSION THAT SOME OF THE TRANSACTIONS WERE BY CHEQUE. IT WAS A SUBMISSION THAT WHEREVER THE PAYMENTS HAVE BEEN MADE BY THE CHEQUE, THE SAME HAD BEEN ACCEPTED. HOWEVER, WHERE THE PAYMENTS WERE BY CASH, AS THE ITA NOS.1493 TO 1498/CHNY/18 MR.S.ARPUTHARAJ :- 12 - : ASSESSEE HAD NOT BEEN ABLE TO PROVIDE THE EXPLANATI ON IN RESPECT OF THE SOURCE OF THE CASH, THE SAME WAS TREATED AS THE UNDISCLOSED INCOME OF ASSESSEE. IT WAS A SUBMISSION THAT NONE OF THE SEIZED MATERIALS HAD BEEN DISPUTED BY THE ASSESSEE AND THE ASSESSEE HAS ALSO GIVEN EXPLANATIONS IN REGARD TO EACH OF THE LO AN TRANSACTIONS AND IT HAS ALSO BEEN ACCEPTED BY THE ASSESSEE. IT WAS A SUBMISSION THAT THE ASSESSEE HOWEVER HAD FAILED TO SHOW THE SOURCE FOR THE SAID CASH TRANSACTION. IT WAS A SUBMISSION THAT CONSEQUENTLY THE LD. ASSESSING OFFICER HAD MADE THE ADDITION, WHICH WAS CONFIRMED BY THE LD.CIT(A). 9.1 WE HAVE CONSIDERED THE SUBMISSIONS OF THE LD.D .R AND PERUSED THE MATERIALS AVAILABLE ON RECORD. A PERUS AL OF THE ASSESSMENT ORDER AND THE REPLY FILED BY THE ASSESSE E, WHICH HAS BEEN EXTRACTED IN THE ASSESSMENT ORDER, CLEARLY SHOWS TH AT MANY OF THE TRANSACTIONS ARE IN RESPECT OF PURCHASE OF IMMOVABL E PROPERTIES AND SOME OF THE TRANSACTIONS ARE IN RESPECT OF LOANS GR ANTED. ADMITTEDLY, THE ASSESSEE HAS ACCEPTED AND EXPLAINED THE TRANSAC TIONS. HOWEVER, ASSESSEE HAS NOT EXPLAINED AS TO FROM WHERE HE HAS GOT THE CASH OR HOW HE HAS GENERATED THE CASH OR FROM WHICH BANK AC COUNT HE HAS WITHDRAWN THE CASH TO MAKE THE PAYMENTS. IT WOULD B E WORTHWHILE TO MENTION HERE THAT THE ASSESSEE HAS ALSO NOT PRODUCE D ANY CASH FLOW STATEMENT TO SHOW THE AVAILABILITY OF CASH IN HIS H ANDS. IN THESE CIRCUMSTANCES, AS TRANSACTIONS HAD BEEN ACCEPTED BY THE ASSESSEE, BUT ITA NOS.1493 TO 1498/CHNY/18 MR.S.ARPUTHARAJ :- 13 - : THE SOURCE FOR THE SAME HAS NOT BEEN PROVED, THE A DDITIONS AS MADE BY THE LD. ASSESSING OFFICER UNDER THE HEAD UNACCO UNTED CASH LOANS AND CONFIRMED BY THE LD.CIT(A), STANDS CONFIRMED. 10. THE NEXT ISSUE IN RESPECT OF UNACCOUNTED INVES TMENT IN NANJUNDAPURAM LAND FOR WHICH THE LD.D.R BROUGHT TO OUR ATTENTION PARA-5 AT PAGE-20 OF THE ASSESSMENT ORDER. IT WAS A SUBMISSION THAT IN JUNE, 2008, THE ASSESSEE HAD ENTERED INTO AN AGR EEMENT WITH SHRI V.MOHAN, MANAGING DIRECTOR OF M/S.MAYFLOWER INNO RE ALTY PRIVATE LTD., COIMBATORE FOR AGGREGATION OF 52 ACRES OF LAND AT N ANJUNDAPURAM AND HAD SAID TO HAVE RECEIVED THE FUNDS FROM THEM. THE SAID LANDS WERE AGGREGATED BY GETTING POWERS OF ATTORNEY IN T HE NAME OF SHRI JOSEPH FROM LAND SELLERS. SHRI JOSEPH WAS SAID TO B E THE ASSESSEES UNCLE AT ERODE. IT WAS A SUBMISSION THAT IN THE CO URSE OF SURVEY ON 10.12.2013, THE ASSESSEE HAD ADMITTED THAT HE HAD PAID AN AMOUNT OF NEARLY ` 24.69 CRORES IN CASH TO THE LAND SELLERS IN RESPECT OF NANJUNDAPURAM LAND. IT WAS A SUBMISSION THAT THE AS SESSEE HAD CLAIMED THAT THE SAME WERE PAID TO THE VARIOUS LAND OWNERS OUT OF AN AN AMOUNT OF ` 49 CRORES GIVEN TO HIM FROM M/S.MAYFLOWER INNO REAL TY PRIVATE LTD. IN RESPONSE TO SHOW-CAUSE NOTICE, ASSE SSEE HAD SUBMITTED THAT ` 24.69 CRORES WAS PAID IN CASH TO THE LAND OWNERS, A NOTHER ` 22 CRORES WAS PAID IN CHEQUE, AND THE SAME WAS OUT OF AN AMOUNT OF ` 49 CRORES RECEIVED FROM M/S.MAYFLOWER INNO REALTY PRIV ATE LTD., AND AN ITA NOS.1493 TO 1498/CHNY/18 MR.S.ARPUTHARAJ :- 14 - : AMOUNT OF ` 1 CRORE WAS RETURNED TO M/S.MAYFLOWER INNO REALTY P RIVATE LTD. IT WAS A SUBMISSION THAT THE LAND SELLERS WERE SUMMONED AND CONFRONTED WITH DIFFERENCE IN THE AMOUNTS RECEIVED BY THEM AND THE AMOUNTS MENTIONED IN THEIR NAME IN THE LOOSE SHEETS IMPOUNDED AND THEY HAD STATED THE AMOUNTS ADMITTED BY THEM AS THE IR OWN RECEIPTS WHEREAS THE BALANCE AMOUNT HAS BEEN ACTUALLY PAID B Y THE ASSESSEE TO THE LAND MEDIATOR AND VARIOUS OTHER PARTIES DURING THE PROCESS OF AGGREGATION OF THE LAND WAS DENIED. IT WAS A SUBMI SSION THAT THOUGH THE ASSESSEE HAS CLAIMED TO HAVE RECEIVED ` 49 CRORES FROM M/S.MAYFLOWER INNO REALTY PRIVATE LTD., THE ASSESSE E HAS BEEN UNABLE TO PROVE THE RECEIPT OF THE SAID AMOUNT FROM M/S.MA YFLOWER INNO REALTY PRIVATE LTD., NOR THE ASSESSEE WAS ABLE TO S HOW HOW HE HAS WITHDRAWN THE CASH AND WHEN HE HAS WITHDRAWN THE CA SH TO MAKE THE PAYMENTS OF ` 24.69 CRORES. IT WAS A SUBMISSION THAT CONSEQUENTLY THE LD. ASSESSING OFFICER HAD MADE THE ADDITION IN RESP ECT OF CASH PAYMENTS MADE IN RESPECT OF PURCHASE OF LAND AT NAN JUNDAPURAM. 10.1. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LD .D.R AND PERUSED THE MATERIALS AVAILABLE ON RECORD. ADMITTE DLY THERE IS AN AGREEMENT BETWEEN THE ASSESSEE AND M/S.MAYFLOWER IN NO REALTY PRIVATE LTD., FOR AGGREGATION OF THE LAND AT NANJUN DAPURAM, COIMBATORE. THE LAND HAS BEEN ACQUIRED BY THE ASS ESSEE FOR SPECIFIC PURPOSES AND THE ASSESSEE HAS SPECIFICALLY CLAIMED THAT CASH PAYMENTS ITA NOS.1493 TO 1498/CHNY/18 MR.S.ARPUTHARAJ :- 15 - : WERE MADE OUT OF THE FUNDS GIVEN BY M/S.MAYFLOWER I NNO REALTY PRIVATE LTD. THIS BEING SO, IN THE INTEREST OF JUS TICE WE ARE OF THE VIEW THAT THE ISSUE IN THIS APPEAL MUST BE RESTORED TO T HE FILE OF LD. ASSESSING OFFICER FOR RE-ADJUDICATION AND GRANTING ADEQUATE OPPORTUNITY TO THE ASSESSEE TO EXPLAIN AS TO WHEN H E HAS RECEIVED MONEY FROM M/S.MAYFLOWER INNO REALTY PRIVATE LTD., HOW HE RECEIVED IT, BY CHEQUE OR BY CASH, IF IT WAS BY THE CHEQUE, HOW AND WHEN IT WAS WITHDRAWN FROM THE BANK ACCOUNT, WHERE IT WAS KEPT AND HOW IT WAS UTILIZED AND THE CASH FLOW IN RESPECT OF THE SAME. WITH THIS DIRECTION, THIS ISSUE IS RESTORED TO THE FILE OF LD. ASSESSING OFFICER FOR RE- ADJUDICATION AFTER GRANTING THE ASSESSEE ADEQUATE O PPORTUNITY OF BEING HEARD. 11. THE NEXT ISSUE IS IN RESPECT OF UNDISCLOSED IN COME BEING LOANS GIVEN TO M/S.KANGAROO IMPEX BY THE ASSESSEE FOR WHICH THE LD.D.R BROUGHT TO OUR ATTENTION PARA-6 AT PAGE-25 O F THE ASSESSMENT ORDER. IT WAS A SUBMISSION THAT IN THE COURSE OF S URVEY ON 10.12.2013, THE ASSESSEE HAD CLAIMED THAT HE HAD ADVANCED LOANS OF ` 16.28 CRORES TO M/S.KANGAROO IMPEX AND ASSESSEE HAD REC EIVED ` 7.67 CRORES ON 19.05.2009. A PERUSAL OF THE LEDGER ACCOU NT OF M/S.KANGAROO IMPEX IN THE BOOKS OF THE ASSESSEE SHOWED CASH TRAN SACTIONS. THE STATEMENT OF THE PARTNERS OF M/S.KANGAROO IMPEX WAS TAKEN WHEREIN M/S.KANGAROO IMPEX HAD CLAIMED TO HAVE REPAID TOTAL AMOUNT OF ` ITA NOS.1493 TO 1498/CHNY/18 MR.S.ARPUTHARAJ :- 16 - : 17.97 CRORES TOWARDS INTEREST AND PRINCIPAL COMPONE NT OF THE LOAN TAKEN FROM THE ASSESSEE DURING THE PERIOD 08.12.200 8 TO 20.12.2009. AS THE ASSESSEE WAS UNABLE TO EXPLAIN THE SOURCE F OR THE ABOVE LOANS, SHOW-CAUSE NOTICE HAS BEEN ISSUED TO THE ASSESSEE. IT WAS A SUBMISSION THAT THE ASSESSEE ADMITTED THE LOANS GIV EN AND HAD EXPLAINED THE TRANSACTIONS WITH M/S.KANGAROO IMPEX, BUT HAD AGAIN FAILED TO SHOW THE SOURCE FOR THE LOAN GIVEN TO M/S .KANGAROO IMPEX. IT WAS A SUBMISSION THAT CONSEQUENTLY THE LD. ASSESSIN G OFFICER MADE ADDITION, WHICH HAS BEEN CONFIRMED BY THE LD.CIT(A) . 11.1 WE HAVE CONSIDERED THE SUBMISSIONS OF THE LD. D.R AND PERUSED THE MATERIALS AVAILABLE ON RECORD, AS ALSO THE REPL Y FILED BY THE ASSESSEE. A PERUSAL OF THE REPLY FILED BY THE A SSESSEE AT PARA 6.5 OF THE ASSESSMENT ORDER, TO SHOW-CAUSE NOTICE ISSUED B Y THE LD. ASSESSING OFFICE, CLEARLY SHOWS THAT THE ASSESSEE HAS ADMITTED AND EXPLAINED THE TRANSACTION WITH M/S.KANGAROO IMPEX. HOWEVER, THE SOURCE FOR THE LOANS HAVE NOT BEEN EXPLAINED BY THE ASSESSEE. THIS BEING SO, WE ARE OF THE VIEW THAT THE ADDITION AS M ADE BY THE LD. ASSESSING OFFICER AND CONFIRMED BY THE LD.CIT(A), I S ON THE RIGHT FOOTING AND DOES NOT CALL FOR ANY INTERFERENCE. ITA NOS.1493 TO 1498/CHNY/18 MR.S.ARPUTHARAJ :- 17 - : 12. THE NEXT ISSUE IS IN RESPECT OF UNDISCLOSED IN TEREST INCOME REPRESENTING THE INTEREST ON THE LOANS GIVEN TO M/S .KANGAROO IMPEX AND KANGAROO FABRICS. IT WAS A SUBMISSION THAT THE ASSESSEE HAS NOT SHOWN THE INTEREST INCOME RECEIVED FROM M/S.KANGARO O IMPEX AND KANGAROO FABRICS IN HIS BOOKS, BUT M/S.KANGAROO IMP EX AND KANGAROO FABRICS HAS ACCOUNTED THE SAME IN ITS BOOKS. CONSE QUENTLY, THE SAME IS TREATED AS UNDISCLOSED INCOME IN THE HANDS OF TH E ASSESSEE UNDER THE HEAD INCOME FROM OTHER SOURCES. 12.1 WE HAVE CONSIDERED THE SUBMISSIONS OF THE LD. D.R AND PERUSED THE MATERIALS AVAILABLE ON RECORD. ADMITT EDLY, THE ASSESSEE HAS NOT BEEN ABLE TO SHOW AS TO WHERE HE HAS DISCLO SED THE INTEREST INCOME RECEIVED ON THE LOANS ADMITTED BY HIM TO BE GIVEN TO M/S.KANGAROO IMPEX AND KANGAROO FABRICS. THIS BEING SO, WE ARE OF THE VIEW THAT THE ADDITION REPRESENTING THE INTERES T IN RESPECT OF LOANS GIVEN BY THE ASSESSEE TO M/S.KANGAROO IMPEX AND KAN GAROO FABRICS HAS BEEN RIGHTLY ADDED. 13. THE NEXT ISSUE IN RESPECT OF DIFFERENCE IN RET URNED INCOME FOR WHICH THE LD.D.R BROUGHT OUR ATTENTION TO PARA-8 AT PAGE-28 OF THE ASSESSMENT ORDER. IT WAS A SUBMISSION THAT ORIGINAL LY, THE ASSESSEE HAD FILED HIS RETURN OF INCOME FOR THE IMPUGNED ASS ESSMENT YEAR DECLARING AN INCOME OF ` 34,24,530/- ON 28.08.2010. SUBSEDQUENTLY, ITA NOS.1493 TO 1498/CHNY/18 MR.S.ARPUTHARAJ :- 18 - : WHEN THE RETURN WAS FILED IN RESPONSE TO THE NOTICE ISSUED U/S.153A OF THE ACT, THE RETURN FILED ON 29.06.2016 SHOWED AN I NCOME OF ` 14,00,740/-. THUS, THE ASSESSEE HAD UNDER-STATED HI S INCOME TO THE TUNE OF ` 20,23,790/-, WHICH HAS BEEN ADDED BY LD. ASSESSING OFFICER AND CONFIRMED BY LD.CIT(A). 13.1 WE HAVE CONSIDERED THE SUBMISSIONS OF THE LD. D.R AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS TRUE THAT THE ASSESSEE IS ENTITLED TO DISCLOSE THE LOWER INCOME IN THE SUB SEQUENT RETURN FILED, IF HE IS ABLE TO SUBSTANTIATE WITH REASONS AS TO WH Y HE DISCLOSED THE LOWER INCOME. IN THE PRESENT CASE, THE ASSESSEE HA S NOT GIVEN ANY EXPLANATION AS TO WHY HE IS DISCLOSING LOWER INCOME IN THE RETURN FILED IN RESPONSE TO NOTICE ISSUED U/S.153A OF THE ACT WH EN COMPARED TO THE RETURN ORIGINALLY FILED BY HIM. THIS BEING SO, THE ADDITION REPRESENTING THE DIFFERENCE BETWEEN THE RETURN ORIGINALLY FILED AND THE RETURN FILED IN RESPONSE TO THE NOTICE U/S.153A OF THE ACT STANDS C ONFIRMED. 14. IN THE RESULT, THE APPEAL OF ASSESSEE IN ITA NO.1493/CHNY/2018 FOR ASSESSMENT YEAR 2009-10 IS PA RTLY ALLOWED FOR STATISTICAL PURPOSES. ITA NO.1494/CHNY/2018 (A.Y 2010-11) 15. THE ASSESSEE IN THIS APPEAL HAS RAISED 21 GROUN DS FOR ADJUDICATION AS FOLLOWS:- ITA NOS.1493 TO 1498/CHNY/18 MR.S.ARPUTHARAJ :- 19 - : 1. THE COMMON ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) 18, CHENNAI 600 034 DATED 19.02.2018 IN I.T.A.NOS.425 TO 427/16-17 IN SO FAR AS THE ISSUES CONTESTED IN T HE PRESENT APPEAL PERTAINING TO THE ABOVE ASSESSMENT YEAR IS CONTRARY TO LAW, FACTS, AND IN THE CIRCUMSTANCES OF THE CASE. 2. THE CIT (APPEALS) ERRED IN SUSTAINING THE RENTAL INCOME AS UNDISCLOSED INCOME BASED ON THE FINDINGS IN PARA 6. 1 OF THE IMPUGNED ORDER WITHOUT ASSIGNING PROPER REASONS AND JUSTIFICATION. 3. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE RELEVANT FACTS WERE COMPLETELY IGNORED DESPITE SUCH FACTS WERE BROUGHT TO THE NOTICE OF THE ASSESSING OFFICER AS WELL AS BEFORE HIM AND FUR THER OUGHT TO HAVE APPRECIATED THAT THE ASSESSMENT OF THE RENTAL INCOM E IN THE HANDS OF THE APPELLANT WAS WRONG AND INCORRECT BOTH ON FACTS AND IN LAW. 4. THE CIT (APPEALS) ERRED IN SUSTAINING THE ASSESS MENT OF THE LOAN TRANSACTION WITH SHRI C.GIRIDHARAN ON REACHING IRRE LEVANT CONCLUSIONS WHILE SUSTAINING SUCH SUM AS UNDISCLOSED INCOME IN THE COMPUTATION OF TAXABLE TOTAL INCOME WITHOUT ASSIGNING PROPER RE ASONS AND JUSTIFICATION. 5. THE CIT (APPEALS) ERRED IN SUSTAINING THE ASSESS MENT OF THE LOAN TRANSACTION WITH SHRI PONNAPPAN ON REACHING IRRELEV ANT CONCLUSIONS WHUE SUSTAINING SUCH SUM AS UNDISCLOSED INCOME IN T HE COMPUTATION OF TAXABLE TOTAL INCOME WITHOUT ASSIGNING PROPER RE ASONS AND JUSTIFICATION. 6. THE CIT (APPEALS) ERRED IN SUSTAINING THE ASSESS MENT OF THE LOAN TRANSACTION WITH SHRI P.SELVAKUMAR ON REACHING IRRE LEVANT CONCLUSIONS WHILE SUSTAINING SUCH SUM AS UNDISCLOSED INCOME IN THE COMPUTATION OF TAXABLE TOTAL INCOME WITHOUT ASSIGNING PROPER RE ASONS AND JUSTIFICATION. 7. THE CIT (APPEALS) ERRED IN SUSTAINING THE ASSESS MENT OF THE LOAN TRANSACTION WITH SHRI S.MURUGANATHAN ON REACHING IR RELEVANT CONCLUSIONS WHILE SUSTAINING SUCH SUM AS UNDISCLOSE D INCOME IN THE COMPUTATION OF TAXABLE TOTAL INCOME WITHOUT ASSIGNI NG PROPER REASONS AND JUSTIFICATION. 8. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE EXPLANATION OFFERED WITH REGARD TO THE TRANSACTIONS ASSUMED AS CASH LOAN TRANSACTIONS WAS COMPLETELY OVERLOOKED AND BRUSHED ASIDE IN RECORDING PERVERSE FINDINGS OF FACTS IN PARA 6.2 OF THE IMPUGNED ORDER. ITA NOS.1493 TO 1498/CHNY/18 MR.S.ARPUTHARAJ :- 20 - : 9. THE CIT (APPEALS) ERRED IN SUSTAINING THE ADDITI ON RELATING TO THE TRANSACTION OF NANJUNDAPURAM LAND AS UNACCOUNTED IN VESTMENT IN THE COMPUTATION OF TAXABLE TOTAL INCOME WITHOUT ASS IGNING PROPER REASONS AND JUSTIFICATION. 10. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE PRESUMPTION OF EXCESS CASH PAYMENTS WAS WHOLLY UNJUSTIFIED AND OUG HT TO HAVE APPRECIATED THAT IN THE ABSENCE OF DIRECT EVIDENCE, THE SUSTENANCE OF THE SAID ADDITION WAS WRONG, ERRONEOUS, UNJUSTIFIED , INCORRECT AND NOT SUSTAINABLE IN LAW, THEREBY VITIATING THE FINDI NGS IN PARA 6.3 OF THE IMPUGNED ORDER. 11. THE CIT (APPEALS) ERRED IN CONFIRMING THE ASSES SMENT OF THE TRANSACTION WITH M/S KANGAROO IMPEX AS UNDISCLOSED INCOME IN THE COMPUTATION OF TAXABLE TOTAL INCOME WITHOUT ASSIGNI NG PROPER REASONS AND JUSTIFICATION. 12. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE ASSESSMENT OF SUCH QUANTIFIED INCOME BASED ON IRRELEVANT MATERIAL S WAS WHOLLY UNJUSTIFIED AND OUGHT TO HAVE APPRECIATED THAT THE FINDINGS IN PARA 6.4 OF THE IMPUGNED ORDER WERE CRYPTIC AS WELL AS N OT CONSIDERING RELEVANT MATERIALS AND EXPLANATION OFFERED IN RELAT ION THERETO. 13. THE CIT (APPEALS) ERRED IN SUSTAINING THE ASSES SMENT OF INTEREST INCOME FROM THE LOAN TRANSACTIONS WITH M/S KANGAROO IMPEX IN THE COMPUTATION OF TAXABLE TOTAL INCOME WITHOUT ASSIGNI NG PROPER REASONS AND JUSTIFICATION. 14. THE CIT (APPEALS) FAILED TO APPRECIATE THAT HAV ING NOT POINTED OUT ANY MATERIAL FROM THE SEARCH RECORDS, THE ASSES SMENT OF INTEREST INCOME INCLUDING THE PRINCIPAL AMOUNT ADDED WAS WRO NG, ERRONEOUS, UNJUSTIFIED, INCORRECT AND NOT SUSTAINABLE IN LAW. 15. THE CIT(A) ERRED IN ADDING BACK RS.16,50,00,000 ON THE CONSIDERATION OF THE TRANSACTION RELATING TO M/S.MA RS EXPORTS AS UNACCOUNTED INVESTMENT IN THE COMPUTATION OF TAXABL E TOTAL INCOME WITHOUT ASSIGNING PROPER REASONS AND JUSTIFICATION. 16. THE LD.CIT(A) WENT WRONG IN RECORDING THE FIN DINGS IN THIS REGARD IN PARA 6.6 OF THE IMPUGNED ORDER WITHOUT AS SIGNING PROPER REASONS AND JUSTIFICATION. 17. THE CIT (APPEALS) ERRED IN SUSTAINING THE ASSES SMENT OF THE DIFFERENTIAL SUM BETWEEN DISCLOSURE MADE IN SEARCH AND THE RESULTANT RETURNED INCOME IN THE COMPUTATION OF TAXABLE TOTAL INCOME WITHOUT ASSIGNING PROPER REASONS AND JUSTIFICATION. ITA NOS.1493 TO 1498/CHNY/18 MR.S.ARPUTHARAJ :- 21 - : 18. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE ASSESSMENT COMPLETED AFTER SEARCH WAS BAD IN LAW AND IN THE AB SENCE OF DIRECT EVIDENCE COUPLED WITH WRONG INITIATION OF THE PROCE EDINGS WOULD VITIATE THE CONSEQUENTIAL SEARCH ASSESSMENT ON VARI OUS FACETS. 19. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE ISSUES RAISED IN THE ADDITIONAL GROUNDS OF APPEAL WERE NOT ADJUDICAT ED AND OUGHT TO HAVE APPRECIATED THAT THE ISSUES ON FACTS AS WELL A S LEGAL STAND RAISED THEREIN WOULD GO TO THE ROOT OF THE JURISDIC TION OF THE ASSESSING OFFICER IN COMPLETING THE SEARCH ASSESSME NT, THEREBY GROSSLY VIOLATING THE PRINCIPLES OF LEGITIMATE EXPE CTATION. 20. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE RE WAS NO PROPER OPPORTUNITY GIVEN BEFORE PASSING OF THE IMPUGNED OR DER AND ANY ORDER PASSED IN VIOLATION OF THE PRINCIPLES NATURAL JUSTICE WOULD BE NULLITY IN LAW. 21. THE APPELLANT CRAVES LEAVE TO FILE ADDITIONAL G ROUNDS/ARGUMENTS AT THE TIME OF HEARING. 16. THE FIRST ISSUE IS RELATED TO RENTAL INCOME TAKEN I N THIS YEAR IS SIMILAR TO THE ISSUE TAKEN IN THE ASSESSMENT YEAR 2 009-10. IN THESE CIRCUMSTANCES, THE ISSUE IN THIS APPEAL MUST BE RESTORED TO THE F ILE OF LD. ASSESSING OFFICER FOR RE-ADJUDICATION AND ASSES SING THE RENTAL INCOME IN THE HANDS OF RESPECTIVE OWNERS OF THE PRO PERTY AS DIRECTED IN ITA NO.1493/CHNY/2018 SUPRA. 17. THE SECOND ISSUE IS RELATED TO UNACCOUNTED CASH LOA NS TAKEN IN THIS YEAR IS SIMILAR TO THE ISSUE TAKEN IN THE A SSESSMENT YEAR 2009- 10. IN THESE CIRCUMSTANCES, AS TRANSACTIONS HAD BEEN ACCEPTED BY THE ASSESSEE, BUT THE SOURCE FOR THE SAME HAS NOT BEEN PROVED, THE ADDITIONS AS MADE BY THE LD. ASSESSING OFFICER UN DER THE HEAD ITA NOS.1493 TO 1498/CHNY/18 MR.S.ARPUTHARAJ :- 22 - : UNACCOUNTED CASH LOANS AND CONFIRMED BY THE LD.CIT( A), STANDS CONFIRMED AS DIRECTED IN ITA NO.1493/CHNY/2018 SUPR A. 18. THE THIRD ISSUE IS RELATED TO UNACCOUNTED INVESTMEN T IN NANJUNDAPURAM LAND, COIMBATORE TAKEN IN THIS YEAR I S SIMILAR TO THE ISSUE TAKEN IN THE ASSESSMENT YEAR 2009-10. IN THE SE CIRCUMSTANCES, THE ISSUE IN THIS APPEAL MUST BE RESTORED TO THE FI LE OF LD. ASSESSING OFFICER FOR RE-ADJUDICATION AFTER GRANTING THE ASSE SSEE ADEQUATE OPPORTUNITY OF BEING HEARD AS DIRECTED IN ITA NO.14 93/CHNY/2018 SUPRA. 19. THE FOURTH ISSUE IS RELATED TO UNDISCLOSED INCOME B EING LOANS GIVEN TO M/S.KANGAROO IMPEX BY THE ASSESSEE FOR WHI CH THE ARGUMENT OF THE LD.D.R ARE IDENTICAL TO THE ASSESSMENT YEAR 2009-10, FINDINGS OF ASSESSMENT YEAR 2009-10 APPLIES TO THIS ISSUE FOR T HE RELEVANT ASSESSMENT YEAR 2010-11. BY FOLLOWING THE DIRECTION GIVEN IN ITA NO.1493/CHNY/2018 SUPRA, WE ARE OF THE VIEW THAT TH E ADDITION AS MADE BY THE LD. ASSESSING OFFICER AND CONFIRMED BY THE LD.CIT(A), IS ON THE RIGHT FOOTING AND DOES NOT CALL FOR ANY INTE RFERENCE. 20. THE FIFTH ISSUE IS RELATED TO UNDISCLOSED INTEREST INCOME REPRESENTING THE INTEREST ON THE LOANS GIVEN TO M/S .KANGAROO IMPEX AND M/S.KANGAROO FABRICS FOR WHICH THE ARGUMENT OF THE LD.D.R ARE IDENTICAL TO THE ASSESSMENT YEAR 2009-10, FINDINGS OF ASSESSMENT YEAR ITA NOS.1493 TO 1498/CHNY/18 MR.S.ARPUTHARAJ :- 23 - : 2009-10 APPLIES TO THIS ISSUE FOR THE RELEVANT ASSE SSMENT YEAR 2010-11 AS DIRECTED IN ITA NO.1493/CHNY/2018 SUPRA WHEREIN THE ORDERS OF LOWER AUTHORITIES WERE UPHELD. 21. THE SIXTH ISSUE IS IN RESPECT OF UNDISCLOSED INVEST MENT RELATING TO M/S.MARS EXPORTS. IT WAS SUBMITTED BY T HE LD.D.R THAT ON 12.11.2009, THE ASSESSEE HAD ENTERED INTO A SALE DE ED WITH THE PROPRIETOR OF M/S.MARS EXPORT IN RESPECT OF THE PAR TICULAR PROPERTY WHEREIN THE ASSESSEE HAD UNDERTAKEN TO SETTLE THE T OTAL LIABILITIES OF M/S.MARS EXPORT TOWARDS ITS CREDITORS AMOUNTING TO ` 11 CRORES, AS ALSO TO KARUR VYSYA BANK LOAN LIABILITY OF M/S.MARS EXPO RT TO ` 5.5 CRORES AND THE SALE DEED VALUE OF THE PROPERTY WAS SHOWN AT ` 3 CRORES AFTER SETTLING THE ABOVE SAID TOTAL LIABILITIES. `11/- CRORES PAID TO THE CREDITORS OF M/S.MARS EXPORT WERE IN CASH AS EVIDENCED BY THE CA SH RECEIPTS. IT WAS A SUBMISSION THAT IN RESPONSE TO T HE SHOW-CAUSE NOTICE, THE ASSESSEE HAD CLAIMED THAT HE HAD SETTLE D THE CREDITORS THROUGH BANK AND THAT THE ASSESSEE HAD SOLD THE LAN D PURCHASED FROM M/S.MARS EXPORT FOR A SUM OF ` 3 CRORES, TO M/S.MARS EXPORT FOR A SUM OF ` 4 CRORES DURING THE ASSESSMENT YEAR 2011-12. IT WA S A SUBMISSION THAT THE ASSESSEE HAS NOWHERE EXPLAINED AS TO HOW H E HAD GENERATED MONEY FOR THE SETTLEMENT OF THE CREDITORS OF M/S.MA RS EXPORT BY PAYING CASH TO AN EXTENT OF ` 11 CRORES NOR HAD HE EXPLAINED THE SOURCE FOR SETTLING THE BANK LOAN OR THE SOURCE FOR THE ` 3 CRORES. IT WAS A ITA NOS.1493 TO 1498/CHNY/18 MR.S.ARPUTHARAJ :- 24 - : SUBMISSION THAT CONSOLIDATED AMOUNT OF THE TRANSACT ION WAS NEARLY ` 19.5 CRORES AND THE ASSESSEE HAVING EXPLAINED ONLY A PART OF IT, THE BALANCE ` 16.5 CRORES REPRESENTING THE CASH SETTLEMENT OF THE CREDITORS WAS ADDED BY THE LD. ASSESSING OFFICER. IT WAS A SU BMISSION THAT THE ASSESSEE HAD NOT BEEN ABLE TO EXPLAIN THE SOURCE FO R THE CASH SETTLEMENT OF THE CREDITORS OF M/S.MARS EXPORT AND CONSEQUENTLY, THE LD. ASSESSING OFFICER HAD MADE THE ADDITION, WHICH WAS CONFIRMED BY THE LD.CIT(A). 21.1 WE HAVE CONSIDERED THE SUBMISSIONS OF THE DEPA RTMENTAL REPRESENTATIVE AND PERUSED THE MATERIALS AVAILABLE ON RECORD. A PERUSAL OF THE ASSESSMENT ORDER, AS ALSO THE REPLY FILED BY THE ASSESSEE EXTRACT THEREIN, CLEARLY SHOWS THAT THE TR ANSACTIONS HAVE BEEN ACCEPTED BY THE ASSESSEE AND IN FACT SUPPORTED BY THE AGREEMENTS. THE SETTLEMENT OF THE CREDITORS IS SUPP ORTED BY THE CASH RECEIPTS FOUND IN THE COURSE OF SEARCH. THIS HAS AL SO NOT BEEN DISPUTED BY THE ASSESSEE. HOWEVER, THE ASSESSEE HAS BEEN UNA BLE TO SHOW HOW OR FROM WHERE HE HAS GENERATED THE FUNDS TO SET TLE THESE CREDITORS OF M/S.MARS EXPORT, THE SORUCE FOR THE SAME AND WHE THER TAXES HAVE BEENPAID ON THE SAME, ARE ALSO NOT SHOWN. THIS BEIN G SO, WE FIND NO REASON TO INTERFERE WITH THE FINDINGS OF THE LD.CIT (A) OR THE LD. ASSESSING OFFICER ON THIS ISSUE AND THE SAME STANDS CONFIRMED. ITA NOS.1493 TO 1498/CHNY/18 MR.S.ARPUTHARAJ :- 25 - : 22. THE SEVENTH ISSUE IS IN RESPECT OF DIFFERENCE IN RE TURNED INCOME FOR WHICH THE ARGUMENT OF THE LD.D.R ARE IDE NTICAL TO THE ASSESSMENT YEAR 2009-10, FINDINGS OF ASSESSMENT YEA R 2009-10 APPLIES TO THIS ISSUE FOR THE RELEVANT ASSESSMENT Y EAR 2010-11 AS DIRECTED IN ITA NO.1493/CHNY/2018 SUPRA WHEREIN THE ADDITION IS CONFIRMED BY THE TRIBUNAL. 23. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTL Y ALLOWED FOR STATISTICAL PURPOSES. ITA NO.1495/CHNY/2018 (A.Y 2011-12) 24. THE ASSESSEE IN THIS APPEAL HAS RAISED 11 GROU NDS FOR ADJUDICATION AS FOLLOWS:- 1. THE COMMON ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) 18, CHENNAI 600 034 DATED 19.02.2018 IN I.T.A.NOS.425 TO 427/16-17 IN SO FAR AS THE ISSUES CONTESTED IN T HE PRESENT APPEAL PERTAINING TO THE ABOVE ASSESSMENT YEAR IS CONTRARY TO LAW, FACTS, AND IN THE CIRCUMSTANCES OF THE CASE. 2. THE CIT (APPEALS) ERRED IN SUSTAINING THE RENTAL INCOME AS UNDISCLOSED INCOME BASED ON THE FINDINGS IN PARA 6. 1 OF THE IMPUGNED ORDER WITHOUT ASSIGNING PROPER REASONS AND JUSTIFICATION. 3. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE RELEVANT FACTS WERE COMPLETELY IGNORED DESPITE SUCH FACTS WERE BROUGHT TO THE NOTICE OF THE ASSESSING OFFICER AS WELL AS BEFORE HIM AND FUR THER OUGHT TO HAVE APPRECIATED THAT THE ASSESSMENT OF THE RENTAL INCOM E IN THE HANDS OF THE APPELLANT WAS WRONG AND INCORRECT BOTH ON FACTS AND IN LAW. 4. THE CIT (APPEALS) ERRED IN SUSTAINING THE ADDIT ION RELATING TO THE TRANSACTION OF NANJUNDAPURAM LAND AS UNACCOUNTED IN VESTMENT IN ITA NOS.1493 TO 1498/CHNY/18 MR.S.ARPUTHARAJ :- 26 - : THE COMPUTATION OF TAXABLE TOTAL INCOME WITHOUT ASS IGNING PROPER REASONS AND JUSTIFICATION. 5. THE CIT (APPEALS) FAILED TO APPRECIATE THAT TH E PRESUMPTION OF EXCESS CASH PAYMENTS WAS WHOLLY UNJUSTIFIED AND OUG HT TO HAVE APPRECIATED THAT IN THE ABSENCE OF DIRECT EVIDENCE, THE SUSTENANCE OF THE SAID ADDITION WAS WRONG, ERRONEOUS, UNJUSTIFIED , INCORRECT AND NOT SUSTAINABLE IN LAW, THEREBY VITIATING THE FINDI NGS IN PARA 6.3 OF THE IMPUGNED ORDER. 6. THE CIT(A) ERRED IN ADDING BACK RS.20 CRORES ON THE CONSIDERATION OF THE TRANSACTION RELATING TO M/S.MARS EXPORTS AS UNACCOUNTED INVESTMENT IN THE COMPUTATION OF TAXABLE TOTAL INCO ME WITHOUT ASSIGNING PROPER REASONS AND JUSTIFICATION. 7. THE LD.CIT(A) WENT WRONG IN RECORDING THE FIND INGS IN THIS REGARD IN PARA 6.6 OF THE IMPUGNED ORDER WITHOUT AS SIGNING PROPER REASONS AND JUSTIFICATION. 8. THE CIT (APPEALS) ERRED IN SUSTAINING THE ASSESS MENT OF THE DIFFERENTIAL SUM BETWEEN DISCLOSURE MADE IN SEARCH AND THE RESULTANT RETURNED INCOME IN THE COMPUTATION OF TAXABLE TOTAL INCOME WITHOUT ASSIGNING PROPER REASONS AND JUSTIFICATION. 9. THE LD.CIT(A) ERRED IN DISMISSING THE GROUND RE LATING TO THE PROTECTIVE ADDITION PERTAINING TO THE TRANSACTION R ELATING TO THE ERSTWHILE STAFF SMT.DHANALAKSHMI IN PARA 6.8 IN THE COMPUTATION OF TAXABLE TOTAL INCOME WITHOUT ASSIGNING PROPER REASO NS AND JUSTIFICATION. 10. THE LD.CIT(A) FAILED TO APPRECIATE THAT THE AS SESSMENT COMPLETED AFTER SEARCH WAS BAD IN LAW AND IN THE AB SENCE OF DIRECT EVIDENCE COUPLED WITH WRONG INITIATION OF THE PROCE EDINGS WOULD VITIATE THE CONSEQUENTIAL SEARCH ASSESSMENT ON VAR IOUS FACETS. 11. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE ISSUES RAISED IN THE ADDITIONAL GROUNDS OF APPEAL WERE NOT ADJUDICAT ED AND OUGHT TO HAVE APPRECIATED THAT THE ISSUES ON FACTS AS WELL A S LEGAL STAND RAISED THEREIN WOULD GO TO THE ROOT OF THE JURISDIC TION OF THE ASSESSING OFFICER IN COMPLETING THE SEARCH ASSESSME NT, THEREBY GROSSLY VIOLATING THE PRINCIPLES OF LEGITIMATE EXPE CTATION. 12. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE RE WAS NO PROPER OPPORTUNITY GIVEN BEFORE PASSING OF THE IMPUGNED OR DER AND ANY ORDER PASSED IN VIOLATION OF THE PRINCIPLES NATURAL JUSTICE WOULD BE NULLITY IN LAW. ITA NOS.1493 TO 1498/CHNY/18 MR.S.ARPUTHARAJ :- 27 - : 13. THE APPELLANT CRAVES LEAVE TO FILE ADDITIONAL G ROUNDS/ARGUMENTS AT THE TIME OF HEARING. 25. THE FIRST ISSUE IS RELATED TO RENTAL INCOME TAKEN I N THIS YEAR IS SIMILAR TO THE ISSUE TAKEN IN THE ASSESSMENT YEAR 2 009-10. IN THESE CIRCUMSTANCES, THE ISSUE IN THIS APPEAL MUST BE RESTORED TO THE F ILE OF LD. ASSESSING OFFICER FOR RE-ADJUDICATION AND ASSES SING THE RENTAL INCOME IN THE HANDS OF RESPECTIVE OWNERS OF THE PRO PERTY AS DIRECTED IN ITA NO.1493/CHNY/2018 SUPRA. 26. THE SECOND ISSUE IS RELATED TO UNACCOUNTED INVESTME NT IN NANJUNDAPURAM LAND, COIMBATORE TAKEN IN THIS YEAR I S SIMILAR TO THE ISSUE TAKEN IN THE ASSESSMENT YEAR 2009-10. IN THE SE CIRCUMSTANCES, THE ISSUE IN THIS APPEAL MUST BE RESTORED TO THE FI LE OF LD. ASSESSING OFFICER FOR RE-ADJUDICATION AFTER GRANTING THE ASSE SSEE ADEQUATE OPPORTUNITY OF BEING HEARD AS DIRECTED IN ITA NO.14 93/CHNY/2018 SUPRA. 27. THE THIRD ISSUE IS RELATED TO UNDISCLOSED BUS INESS INCOME. IT WAS SUBMITTED BY LD.D.R THAT VERIFICATION OF SEIZED MAT ERIALS REVEALED THAT THE ASSESSEES ERSTWHILE STAFF SMT.DHANALAKSHMI HAD SWI NDLED MONEY TO THE EXTENT OF ` 8.30 CRORES DURING VARIOUS ASSESSMENT YEARS. WHEN A SHOW- CAUSE NOTICED DATED 15.12.2016 WAS ISSUED TO THE AS SESSEE, ASSESSEE HAD REPLIED THAT MRS.DHANALAKSHMI WAS WORKING IN M/S.MI LLENIUM MOTORS, WHICH ITA NOS.1493 TO 1498/CHNY/18 MR.S.ARPUTHARAJ :- 28 - : IS A UNIT OF MIRACLE CARS INDIA PVT. LTD., AND MRS. DHANALAKSHMI HAD EMBEZZLED SUBSTANTIAL AMOUNTS BY MANIPULATING SERVI CE RECORDS OF VARIOUS VEHICLES. THE MATTER WAS IN COURT AND THE CHEATING CASE WAS FILED BY THE CBI AND TRIAL WAS PENDING. NO AMOUNT WAS RECOVERED BY T HE ASSESSEE. THE ASSESSEE HAS ALSO STATED THAT IN FUTURE, IF ANY AMO UNT IS RECOVERED, THE COMPANY WOULD UNDERTAKE TO PAY, AND TO DISCLOSE TH AT AS AN INCOME AND PAY TAX ACCORDINGLY. IT WAS A SUBMISSION THAT THE CLAIM OF ASSESSEE WAS NOT ACCEPTABLE AND CONSEQUENTLY, THE LD. ASSESSING OFFI CER HAD ADDED THE SAME PROTECTIVELY IN THE HANDS OF THE ASSESSEE. 27.1 WE HAVE CONSIDERED THE SUBMISSIONS OF LD.D.R AND PERUSED THE MATERIALS AVAILABLE ON RECORD. ADMITTEDLY, MRS.DH ANALAKSHMI WORKED FOR M/S.MILLENIUM MOTORS, WHICH IS AUNIT OF MIRACLE CAR S INDIA PVT LTD. THE EMBEZZLEMENT, IF ANY, HAS TAKEN PLACE IN THE HANDS OF M/S.MILLENIUM MOTORS AND NOT IN THE HANDS OF THE ASSESSEE, THEREFORE, TH E ADDITION IF ANY, CANNOT BE MADE IN THE HANDS OF THE ASSESSEE AS THE AMOUNT BELONGS TO THE COMPANY, M/S.MILLENIUM MOTORS. THIS BEING SO, THE A DDITION AS MADE BY THE LD. ASSESSING OFFICER AND CONFIRMED BY THE LD.CIT(A ) STANDS DELETED. 28. THE FOURTH ISSUE IS IN RESPECT OF UNDISCLOSED INVES TMENT RELATING TO M/S.MARS EXPORTS FOR WHICH THE ARGUMENT OF THE LD.D.R ARE IDENTICAL TO THE ASSESSMENT YEAR 2009-10, FINDINGS OF ASSESSMENT YEAR 2010-11 APPLIES TO THIS ISSUE FOR THE RELEVANT ASSE SSMENT YEAR ITA NOS.1493 TO 1498/CHNY/18 MR.S.ARPUTHARAJ :- 29 - : 2011-12 AS DIRECTED IN ITA NO.1494/CHNY/2018 SUPRA WHEREIN THE ORDERS OF LD. ASSESSING OFFICER AND THE LD.CIT(A) S TANDS CONFIRMED. 29. THE FIFTH ISSUE IS IN RESPECT OF DIFFERENCE IN RETU RNED INCOME FOR WHICH THE ARGUMENT OF THE LD.D.R ARE IDENTICAL TO T HE ASSESSMENT YEAR 2009-10, FINDINGS OF ASSESSMENT YEAR 2009-10 APPLIE S TO THIS ISSUE FOR THE RELEVANT ASSESSMENT YEAR 2011-12 AS DIRECTED IN ITA NO.1493/CHNY/2018 SUPRA WHEREIN THE ADDITION IS CO NFIRMED BY THE TRIBUNAL. 30. IN THE RESULT, THE APPEAL OF ASSESSEE IN ITA N O.1495/CHNY/2018 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ITA NO.1496/CHNY/2018 (A.Y 2012-13) 31. THE ASSESSEE IN THIS APPEAL HAS RAISED 08 GROU NDS FOR ADJUDICATION AS FOLLOWS:- 1. THE COMMON ORDER OF THE COMMISSIONER OF INCOME T AX (APPEALS) 18, CHENNAI 600 034 DATED 19.02.2018 IN I.T.A.NOS .428 TO 429/16-17 IN SO FAR AS THE ISSUES CONTESTED IN THE PRESENT APPEAL PERTAINING TO THE ABOVE ASSESSMENT YEAR IS CONTRARY TO LAW, FACTS, AND IN THE CIRCUMSTANCES OF THE CASE. 2. THE CIT (APPEALS) ERRED IN SUSTAINING THE RENTAL INCOME AS UNDISCLOSED INCOME BASED ON THE FINDINGS IN PARA 6. 1 OF THE IMPUGNED ORDER WITHOUT ASSIGNING PROPER REASONS AND JUSTIFICATION. 3. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE RELEVANT FACTS WERE COMPLETELY IGNORED DESPITE SUCH FACTS WERE BROUGHT TO THE NOTICE OF THE ASSESSING OFFICER AS WELL AS BEFORE HIM AND FUR THER OUGHT TO HAVE ITA NOS.1493 TO 1498/CHNY/18 MR.S.ARPUTHARAJ :- 30 - : APPRECIATED THAT THE ASSESSMENT OF THE RENTAL INCOM E IN THE HANDS OF THE APPELLANT WAS WRONG AND INCORRECT BOTH ON FACTS AND IN LAW. 4. THE LD.CIT(A) ERRED IN DISMISSING THE GROUND REL ATING TO THE PROTECTIVE ADDITION PERTAINING TO THE TRANSACTION R ELATING TO THE ERSTWHILE STAFF SMT.DHANALAKSHMI IN PARA 6.2 IN THE COMPUTATION OF TAXABLE TOTAL INCOME WITHOUT ASSIGNING PROPER REASO NS AND JUSTIFICATION. 5. THE LD.CIT(A) FAILED TO APPRECIATE THAT THE ASS ESSMENT COMPLETED AFTER SEARCH WAS BAD IN LAW AND IN THE AB SENCE OF DIRECT EVIDENCE COUPLED WITH WRONG INITIATION OF THE PROCE EDINGS WOULD VITIATE THE CONSEQUENTIAL SEARCH ASSESSMENT ON VAR IOUS FACETS. 6. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE ISSUES RAISED IN THE ADDITIONAL GROUNDS OF APPEAL WERE NOT ADJUDICATED A ND OUGHT TO HAVE APPRECIATED THAT THE ISSUES ON FACTS AS WELL AS LEG AL STAND RAISED THEREIN WOULD GO TO THE ROOT OF THE JURISDICTION OF THE ASSESSING OFFICER IN COMPLETING THE SEARCH ASSESSMENT, THEREB Y GROSSLY VIOLATING THE PRINCIPLES OF LEGITIMATE EXPECTATION. 7. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THER E WAS NO PROPER OPPORTUNITY GIVEN BEFORE PASSING OF THE IMPUGNED OR DER AND ANY ORDER PASSED IN VIOLATION OF THE PRINCIPLES NATURAL JUSTICE WOULD BE NULLITY IN LAW. 8. THE APPELLANT CRAVES LEAVE TO FILE ADDITIONAL GR OUNDS/ARGUMENTS AT THE TIME OF HEARING. 32. THE FIRST ISSUE IS RELATED TO RENTAL INCOME TAKEN I N THIS YEAR IS SIMILAR TO THE ISSUE TAKEN IN THE ASSESSMENT YEAR 2 009-10. IN THESE CIRCUMSTANCES, THE ISSUE IN THIS APPEAL MUST BE RESTORED TO THE F ILE OF LD. ASSESSING OFFICER FOR RE-ADJUDICATION AND ASSES SING THE RENTAL INCOME IN THE HANDS OF RESPECTIVE OWNERS OF THE PRO PERTY AS DIRECTED IN ITA NO.1493/CHNY/2018 SUPRA. ITA NOS.1493 TO 1498/CHNY/18 MR.S.ARPUTHARAJ :- 31 - : 33. THE SECOND ISSUE IS RELATED TO UNDISCLOSED BUSINESS INCOME TAKEN IN THIS YEAR IS SIMILAR TO THE ISSUE TAKEN IN THE ASSESSMENT YEAR 2011-12. IT WAS SUBMITTED BY LD.D.R THAT VERIFICATION OF SEI ZED MATERIALS REVEALED THAT THE ASSESSEES ERSTWHILE STAFF SMT.DH ANALAKSHMI HAD SWINDLED MONEY TO THE EXTENT OF ` 8.30 CRORES DURING VARIOUS ASSESSMENT YEARS. IN THESE CIRCUMSTANCES, THE ADDITION MADE BY THE LD. ASSESSING OFFICER AS WELL AS BY THE LD.CIT(A) STANDS DELETED AS DIRECTED IN ITA NO.1495/CHNY/2018 SUPRA. 34. IN THE RESULT, THE APPEAL OF ASSESSEE IN ITA NO.1496/CHNY/2018 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ITA NO.1497/CHNY/2018 (A.Y 2013-14) 35. THE ASSESSEE IN THIS APPEAL HAS RAISED 09 GROU NDS FOR ADJUDICATION AS FOLLOWS:- 1. THE COMMON ORDER OF THE COMMISSIONER OF INCOME T AX (APPEALS) 18, CHENNAI 600 034 DATED 19.02.2018 IN I.T.A.NOS .428 TO 429/16-17 IN SO FAR AS THE ISSUES CONTESTED IN THE PRESENT APPEAL PERTAINING TO THE ABOVE ASSESSMENT YEAR IS CONTRARY TO LAW, FACTS, AND IN THE CIRCUMSTANCES OF THE CASE. 2. THE CIT (APPEALS) ERRED IN SUSTAINING THE RENTAL INCOME AS UNDISCLOSED INCOME BASED ON THE FINDINGS IN PARA 6. 1 OF THE IMPUGNED ORDER WITHOUT ASSIGNING PROPER REASONS AND JUSTIFICATION. 3. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE RELEVANT FACTS WERE COMPLETELY IGNORED DESPITE SUCH FACTS WERE BROUGHT TO THE NOTICE OF THE ASSESSING OFFICER AS WELL AS BEFORE HIM AND FUR THER OUGHT TO HAVE APPRECIATED THAT THE ASSESSMENT OF THE RENTAL INCOM E IN THE HANDS OF THE APPELLANT WAS WRONG AND INCORRECT BOTH ON FACTS AND IN LAW. ITA NOS.1493 TO 1498/CHNY/18 MR.S.ARPUTHARAJ :- 32 - : 4. THE LD.CIT(A) ERRED IN DISMISSING THE GROUND REL ATING TO THE PROTECTIVE ADDITION PERTAINING TO THE TRANSACTION R ELATING TO THE ERSTWHILE STAFF SMT.DHANALAKSHMI IN PARA 6.2 IN THE COMPUTATION OF TAXABLE TOTAL INCOME WITHOUT ASSIGNING PROPER REASO NS AND JUSTIFICATION. 5. THE CIT (APPEALS) ERRED IN SUSTAINING THE ASSESS MENT OF THE DIFFERENTIAL SUM BETWEEN DISCLOSURE MADE IN SEARCH AND THE RESULTANT RETURNED INCOME IN THE COMPUTATION OF TAXABLE TOTAL INCOME WITHOUT ASSIGNING PROPER REASONS AND JUSTIFICATION, THEREBY VITIATING THE FINDINGS IN PARA 6.4 OF THE IMPUGNED ORDER. 6. THE LD.CIT(A) FAILED TO APPRECIATE THAT THE ASS ESSMENT COMPLETED AFTER SEARCH WAS BAD IN LAW AND IN THE AB SENCE OF DIRECT EVIDENCE COUPLED WITH WRONG INITIATION OF THE PROCE EDINGS WOULD VITIATE THE CONSEQUENTIAL SEARCH ASSESSMENT ON VAR IOUS FACETS. 7. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE ISSUES RAISED IN THE ADDITIONAL GROUNDS OF APPEAL WERE NOT ADJUDICATED A ND OUGHT TO HAVE APPRECIATED THAT THE ISSUES ON FACTS AS WELL AS LEG AL STAND RAISED THEREIN WOULD GO TO THE ROOT OF THE JURISDICTION OF THE ASSESSING OFFICER IN COMPLETING THE SEARCH ASSESSMENT, THEREB Y GROSSLY VIOLATING THE PRINCIPLES OF LEGITIMATE EXPECTATION. 8. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THER E WAS NO PROPER OPPORTUNITY GIVEN BEFORE PASSING OF THE IMPUGNED OR DER AND ANY ORDER PASSED IN VIOLATION OF THE PRINCIPLES NATURAL JUSTICE WOULD BE NULLITY IN LAW. 9. THE APPELLANT CRAVES LEAVE TO FILE ADDITIONAL GR OUNDS/ARGUMENTS AT THE TIME OF HEARING. 36. THE FIRST ISSUE IS RELATED TO RENTAL INCOME TAKEN I N THIS YEAR IS SIMILAR TO THE ISSUE TAKEN IN THE ASSESSMENT YEAR 2 009-10. IN THESE CIRCUMSTANCES, THE ISSUE IN THIS APPEAL MUST BE RESTORED TO THE F ILE OF LD. ASSESSING OFFICER FOR RE-ADJUDICATION AND ASSES SING THE RENTAL INCOME IN THE HANDS OF RESPECTIVE OWNERS OF THE PRO PERTY AS DIRECTED IN ITA NO.1493/CHNY/2018 SUPRA. ITA NOS.1493 TO 1498/CHNY/18 MR.S.ARPUTHARAJ :- 33 - : 37. THE SECOND ISSUE IS RELATED TO UNDISCLOSED BUSINESS INCOME TAKEN IN THIS YEAR IS SIMILAR TO THE ISSUE TAKEN IN THE ASSESSMENT YEAR 2011-12. IT WAS SUBMITTED BY LD.D.R THAT VERIFICATION OF SEI ZED MATERIALS REVEALED THAT THE ASSESSEES ERSTWHILE STAFF SMT.DH ANALAKSHMI HAD SWINDLED MONEY TO THE EXTENT OF ` 8.30 CRORES DURING VARIOUS ASSESSMENT YEARS. IN THESE CIRCUMSTANCES, THE ADDITION MADE BY THE LD. ASSESSING OFFICER AS WELL AS BY THE LD.CIT(A) STANDS DELETED AS DIRECTED IN ITA NO.1495/CHNY/2018 SUPRA. 38. THE THIRD ISSUE IS IN RESPECT OF DIFFERENCE IN RETU RNED INCOME FOR WHICH THE ARGUMENT OF THE LD.D.R ARE IDENTICAL TO T HE ASSESSMENT YEAR 2009-10, FINDINGS OF ASSESSMENT YEAR 2009-10 APPLIE S TO THIS ISSUE FOR THE RELEVANT ASSESSMENT YEAR 2013-14 AS DIRECTED IN ITA NO.1493/CHNY/2018 SUPRA WHEREIN THE ADDITION IS CON FIRMED BY THE TRIBUNAL. 39. IN THE RESULT, THE APPEAL OF ASSESSEE IN ITA NO .1497/CHNY/2018 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ITA NO.1498/CHNY/2018 (A.Y 2014-15) 35. THE ASSESSEE IN THIS APPEAL HAS RAISED 09 GROU NDS FOR ADJUDICATION AS FOLLOWS:- 1. THE COMMON ORDER OF THE COMMISSIONER OF INCOME T AX (APPEALS) - 18, CHENNAI 600 034 DATED 19.02.2018 IN L.T.A.NOS.430 & 431/16-17 IN SO FAR AS THE ISSUES CONTESTED IN THE PRESENT APPEAL PERTA INING TO THE ABOVE ITA NOS.1493 TO 1498/CHNY/18 MR.S.ARPUTHARAJ :- 34 - : ASSESSMENT YEAR IS CONTRARY TO LAW, FACTS, AND IN T HE CIRCUMSTANCES OF THE CASE. 2. THE CIT (APPEALS) ERRED IN SUSTAINING THE RENTAL INCOME AS UNDISCLOSED INCOME BASED ON THE FINDINGS IN PARA 6.1 OF THE IMP UGNED ORDER WITHOUT ASSIGNING PROPER REASONS AND JUSTIFICATION. 3. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE RELEVANT FACTS WERE COMPLETELY IGNORED DESPITE SUCH FACTS WERE BROUGHT TO THE NOTICE OF THE ASSESSING OFFICER AS WELL AS BEFORE HIM AND FURTHER OUGHT TO HAVE APPRECIATED THAT THE ASSESSMENT OF THE RENTAL INCOM E IN THE HANDS OF THE APPELLANT WAS WRONG AND INCORRECT BOTH ON FACTS AND IN LAW. 4. THE CIT (APPEALS) ERRED IN DISMISSING THE GROUND RELATING TO THE PROTECTIVE ADDITION PERTAINING TO THE TRANSACTION R ELATING TO THE ERSTWHILE STAFF SMT. DHANALAKSHMI IN PARA 6.2 IN THE COMPUTATION OF TAXABLE TOTAL INCOME WITHOUT ASSIGNING PROPER REASONS AND JUSTIFICATION. 5. THE CIT (APPEALS) ERRED IN SUSTAINING THE ASSESS MENT OF UNACCOUNTED SALES FOR THE REASONS STATED IN PARA 6.4 OF THE IMP UGNED ORDER IN THE COMPUTATION OF TAXABLE TOTAL INCOME WITHOUT ASSIGNI NG PROPER REASONS AND JUSTIFICATION. 6. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE EXPLANATION OFFERED WITH REGARD TO THE SEIZED MATERIAL, NAMELY, SALE ABSTRAC T WAS COMPLETELY OVERLOOKED AND BRUSHED ASIDE, THEREBY VITIATING THE FINDINGS IN PARA 6.4 OF THE IMPUGNED ORDER. 7. THE CIT (APPEALS) ERRED IN SUSTAINING THE ASSESS MENT OF THE DIFFERENTIAL SUM BETWEEN DISCLOSURE MADE IN SEARCH AND THE RESUL TANT RETURNED INCOME IN THE COMPUTATION OF TAXABLE TOTAL INCOME WITHOUT ASSIGNING PROPER REASONS AND JUSTIFICATION, THEREBY VITIATING THE FINDINGS I N PARA 65 OF THE IMPUGNED ORDER. 6. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE ASSESSMENT COMPLETED AFTER SEARCH WAS BAD IN LAW AND IN THE ABSENCE OF D IRECT EVIDENCE COUPLED WITH WRONG INITIATION OF THE PROCEEDINGS WOULD VITI ATE THE CONSEQUENTIAL SEARCH ASSESSMENT ON VARIOUS FACETS. ITA NOS.1493 TO 1498/CHNY/18 MR.S.ARPUTHARAJ :- 35 - : 7. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE ISSUES RAISED IN THE ADDITIONAL GROUNDS OF APPEAL WERE NOT ADJUDICATED A ND OUGHT TO HAVE APPRECIATED THAT THE ISSUES ON FACTS AS WELL AS LEG AL STAND RAISED THEREIN WOULD GO TO THE ROOT OF THE JURISDICTION OF THE ASS ESSING OFFICER IN COMPLETING THE SEARCH ASSESSMENT, THEREBY GROSSLY VIOLATING TH E PRINCIPLES OF LEGITIMATE EXPECTATION. 8. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THER E WAS NO PROPER OPPORTUNITY GIVEN BEFORE PASSING OF THE IMPUGNED OR DER AND ANY ORDER PASSED IN VIOLATION OF THE PRINCIPLES NATURAL JUSTI CE WOULD BE NULLITY IN LAW. 9. THE APPELLANT CRAVES LEAVE TO FILE ADDITIONAL GR OUNDS/ARGUMENTS AT THE TIME OF HEARING. 36. THE FIRST ISSUE IS RELATED TO RENTAL INCOME TAKEN I N THIS YEAR IS SIMILAR TO THE ISSUE TAKEN IN THE ASSESSMENT YEAR 2 009-10. IN THESE CIRCUMSTANCES, THE ISSUE IN THIS APPEAL MUST BE RESTORED TO THE F ILE OF LD. ASSESSING OFFICER FOR RE-ADJUDICATION AND ASSES SING THE RENTAL INCOME IN THE HANDS OF RESPECTIVE OWNERS OF THE PRO PERTY AS DIRECTED IN ITA NO.1493/CHNY/2018 SUPRA. 37. THE SECOND ISSUE IS RELATED TO UNDISCLOSED BUSINESS INCOME TAKEN IN THIS YEAR IS SIMILAR TO THE ISSUE TAKEN IN THE A SSESSMENT YEAR 2011-12. IT WAS SUBMITTED BY LD.D.R THAT VERIFICATION OF SEI ZED MATERIALS REVEALED THAT THE ASSESSEES ERSTWHILE STAFF SMT.DH ANALAKSHMI HAD SWINDLED MONEY TO THE EXTENT OF ` 8.30 CRORES DURING VARIOUS ASSESSMENT YEARS. IN THESE CIRCUMSTANCES, THE ADDITION MADE BY THE LD. ASSESSING OFFICER AS WELL AS BY THE LD.CIT(A) STANDS DELETED AS DIRECTED IN ITA NO.1495/CHNY/2018 SUPRA. ITA NOS.1493 TO 1498/CHNY/18 MR.S.ARPUTHARAJ :- 36 - : 38. THE THIRD ISSUE IS RELATED TO UNACCOUNTED SALES. IT WAS SUBMITTED BY LD.D.R THAT ACCOUNTS MAINTAINED BY THE ASSESSEE IN ELECTRONIC FORM, THERE WAS A SALES ABSTRACT, WHICH SHOWED NET SALES OF ` 12.12 CRORES AS AGAINST NET SALES OF ONE CRORE FOR THE PERIOD FROM 01/04/2013 TO 31/03/2014. CONSEQUENTLY, THE LD. ASSESSING OFFICER HAD ISSUED SHOW-CAUSE NOTICE TO THE ASSESSEE WHO HAD EXPLAINED THAT THE SAME WAS SALES ABSTRACT WORKING SHEET WHICH WAS MADE ONLY FOR THE PURPOSE OF TAKING A BAN K LOAN AND IT HAD NOT BEEN SUBSEQUENTLY FOLLOWED UP WITH. IT WAS A SUBMIS SION THAT THE LD. ASSESSING OFFICER DID NOT ACCEPT THE CONTENTION AND HAD MADE ADDITION. 38.1 WE HAVE CONSIDERED THE SUBMISSIONS AND PERUS ED THE MATERIALS AVAILABLE ON RECORD. ADMITTEDLY WHAT HAS BEEN FOUND IN THE ELECTRONIC FORM IS AN ABSTRACT WORKING SHEET, NO EVIDENCE WHATSOEVER S UPPORTING THIS ABSTRACT WORKING SHEET HAS BEEN FOUND IN THE COURSE OF SEARC H. THIS BEING SO, WE ARE OF THE VIEW THAT NO ADDITION ON THIS COUND CAN BE M ADE IN THE HANDS OF THE ASSESSEE. FURTHER, IT IS NOTICED THAT THE SAID WORK ING SHEET IS IN RESPECT OF M/S.ARPUTHARAJ ASSOCIATES IF AT ALL AN ADDITION CAN BE MADE, IT MAY BE CONSIDERED ONLY IN THE CASE OF M/S.ARPUTHARAJ AS SOCIATES AND THAT TOO ONLY IN RESPECT OF GROSS PROFIT IN RESPECT OF SUCH SALES . IN ANY CASE, THE ASSN IS NOT CALLED FOR IN THE HANDS OF ASSESSEE. 39. THE FOURTH ISSUE IS IN RESPECT OF DIFFERENCE IN RET URNED INCOME FOR WHICH THE ARGUMENT OF THE LD.D.R ARE IDENTICAL TO T HE ASSESSMENT YEAR 2009-10, FINDINGS OF ASSESSMENT YEAR 2009-10 APPLIE S TO THIS ISSUE FOR THE RELEVANT ASSESSMENT YEAR 2011-12 AS DIRECTED IN ITA ITA NOS.1493 TO 1498/CHNY/18 MR.S.ARPUTHARAJ :- 37 - : NO.1493/CHNY/2018 SUPRA WHEREIN THE ADDITION IS CON FIRMED BY THE TRIBUNAL. 40. IN THE RESULT, THE APPEAL OF ASSESSEE IN ITA N O.1498/CHNY/2018 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ITA NO.1499/CHNY/2018 (A.Y 2015-16) 41. THE ASSESSEE IN THIS APPEAL HAS RAISED 10 GROU NDS FOR ADJUDICATION AS FOLLOWS:- 1. THE COMMON ORDER OF THE COMMISSIONER OF INCOME T AX (APPEALS) - 18, CHENNAI 600 034 DATED 19.02.2018 IN L.T.A.NOS.430 & 431/16-17 IN SO FAR AS THE ISSUES CONTESTED IN THE PRESENT APPEAL PERTA INING TO THE ABOVE ASSESSMENT YEAR IS CONTRARY TO LAW, FACTS, AND IN T HE CIRCUMSTANCES OF THE CASE. 2. THE CIT (APPEALS) ERRED IN SUSTAINING THE RENTAL INCOME AS UNDISCLOSED INCOME WITHOUT RECORDING FINDINGS IN THE IMPUGNED O RDER AND OUGHT TO HAVE APPRECIATED THAT NON CONSIDERATION OF THE GROUND CH ALLENGING THE SAID ADDITION WOULD GROSSLY VIOLATE THE PRINCIPLES OF LE GITMATE EXPECTATION. 3. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE RELEVANT FACTS WERE COMPLETELY IGNORED DESPITE SUCH FACTS WERE BROUGHT TO THE NOTICE OF THE ASSESSING OFFICER AS WELL AS BEFORE HIM AND FURTHER OUGHT TO HAVE APPRECIATED THAT THE ASSESSMENT OF THE RENTAL INCOM E IN THE HANDS OF THE APPELLANT WAS WRONG AND INCORRECT BOTH ON FACTS AND IN LAW. 4. THE CIT (APPEALS) ERRED IN DISMISSING THE GROUND RELATING TO THE PROTECTIVE ADDITION PERTAINING TO THE TRANSACTION R ELATING TO THE ERSTWHILE STAFF SMT. DHANALAKSHMI IN PARA 6.2 IN THE COMPUTATION OF TAXABLE TOTAL INCOME WITHOUT ASSIGNING PROPER REASONS AND JUSTIFICATION. ITA NOS.1493 TO 1498/CHNY/18 MR.S.ARPUTHARAJ :- 38 - : 5. THE CIT (APPEALS) ERRED IN SUSTAINING THE ASSESS MENT OF UNACCOUNTED SALES FOR THE REASONS STATED IN PARA 6.3 OF THE IMP UGNED ORDER IN THE COMPUTATION OF TAXABLE TOTAL INCOME WITHOUT ASSIGNI NG PROPER REASONS AND JUSTIFICATION. 6. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE EXPLANATION OFFERED WITH REGARD TO THE SEIZED MATERIAL, WAS COMPLETELY OVERL OOKED AND BRUSHED ASIDE, THEREBY VITIATING THE FINDINGS IN PARA 6.3 OF THE I MPUGNED ORDER. 7. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE ASSESSMENT COMPLETED AFTER SEARCH WAS BAD IN LAW AND IN THE ABSENCE OF D IRECT EVIDENCE COUPLED WITH WRONG INITIATION OF THE PROCEEDINGS WOULD VITI ATE THE CONSEQUENTIAL SEARCH ASSESSMENT ON VARIOUS FACETS. 8. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE ISSUES RAISED IN THE ADDITIONAL GROUNDS OF APPEAL WERE NOT ADJUDICATED A ND OUGHT TO HAVE APPRECIATED THAT THE ISSUES ON FACTS AS WELL AS LEG AL STAND RAISED THEREIN WOULD GO TO THE ROOT OF THE JURISDICTION OF THE ASS ESSING OFFICER IN COMPLETING THE SEARCH ASSESSMENT, THEREBY GROSSLY VIOLATING TH E PRINCIPLES OF LEGITIMATE EXPECTATION. 9. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THER E WAS NO PROPER OPPORTUNITY GIVEN BEFORE PASSING OF THE IMPUGNED OR DER AND ANY ORDER PASSED IN VIOLATION OF THE PRINCIPLES NATURAL JUSTI CE WOULD BE NULLITY IN LAW. 10. THE APPELLANT CRAVES LEAVE TO FILE ADDITIONAL G ROUNDS/ARGUMENTS AT THE TIME OF HEARING. 42. THE FIRST ISSUE IS RELATED TO UNDISCLOSED BUSINESS INCOME TAKEN IN THIS YEAR IS SIMILAR TO THE ISSUE TAKEN IN THE ASSE SSMENT YEAR 2011-12. IT WAS SUBMITTED BY LD.D.R THAT VERIFICATION OF SEI ZED MATERIALS REVEALED THAT THE ASSESSEES ERSTWHILE STAFF SMT.DH ANALAKSHMI HAD SWINDLED ITA NOS.1493 TO 1498/CHNY/18 MR.S.ARPUTHARAJ :- 39 - : MONEY TO THE EXTENT OF ` 8.30 CRORES DURING VARIOUS ASSESSMENT YEARS. IN THESE CIRCUMSTANCES, THE ADDITION MADE BY THE LD. ASSESSING OFFICER AS WELL AS BY THE LD.CIT(A) STANDS DELETED AS DIRECTED IN ITA NO.1495/CHNY/2018 SUPRA. 43. THE SECOND ISSUE IS RELATED TO UNACCOUNTED INVESTMENT IN KERALA. IT WAS SUBMITTED BY LD.D.R THAT IN THE COURSE OF S EARCH IT WAS FOUND THAT THE ASSESSEE HAD PURCHASED THREE PROPERTIES IN KERALA O N 4.4.2014 FOR CONSIDERATION OF RS.82.63 CRORES FROM SMT.D.DHANALA KSHMI. IT WAS A SUBMISSION THAT IN RESPONSE TO SHOW-CAUSE NOTICE, THE ASSESSEE HAD SUBMITTED THAT THESE WERE TAKEN AS SECURITY PURPOS E FORM SMT.D.DHANALAKSHMI THROUGH A MEMORANDUM OF UNDERSTA NDING IN RESPECT OF MONEY CHEATED BY HER. IT WAS A SUBMISSION THAT THE LD. ASSESSING OFFICER HAD ADDED THE SUM IN THE HANDS OF THE ASSESSEE. 43.1 WE HAVE CONSIDERED THE SUBMISSIONS. HERE WH AT IS PECULIAR IS SMT.D.DHANALAKSHMI HAD SWINDLED THE MONEY FROM M/S. MILLENUIM MOTORS COMPANY. HOWEVER, THE ASSESSEE HAS IN RESPONSE TO T HE SAME, CLAIMS TO HAVE TAKEN POSSESSION OF THREE OF HER PROPERTIES IN KERALA, THOUGH THE ASSESSEE CLAIMS THE POSSESSION HAS NOT BEEN RECEIVE D BY THE ASSESSEE. THE FACT REMAINS THAT THE REGISTRATION OF THE SAME HAS BEEN DONE IN THE NAME OF THE ASSESSEE. THE ASSESSEE HAVING GOT THE PROPERTY REGISTERED IN HIS NAME, IT IS FOR THE ASSESSEE TO EXPLAIN HOW HE PAID THIS AMOUNT OR HOW HE SOURCED THE MONEY FOR THE PURCHASE OF THE SAID PROPERTY. IF THE PROPERTY WERE IN THE NAME OF A COMPANY, THEN ADMITTEDLY IT COULD HAVE BE EN SAID TO HAVE BEEN ITA NOS.1493 TO 1498/CHNY/18 MR.S.ARPUTHARAJ :- 40 - : TOWARDS THE SETTLEMENT OF THE EMBEZZLEMENT. HERE TH E PROPERTY HAVING BEEN REGISTERED IN THE NAME OF ASSESSEE AS AN INDIVIDUA L AND THE EMBEZZLEMENT HAVE BEEN CLAIMED AS LOSS IN THE HANDS OF THE COMPA NY, WE ARE OF THE VIEW THAT THE ADDITION HAS BEEN RIGHTLY MADE IN THE HAND S OF THE ASSESSEE. 44. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOW ED. 45. THE LD. ASSESSING OFFICER IS ALSO DIRECTED TO CONSIDER THE CLAIM IF ANY, IN RESPECT OF TELESCOPING OF THE INCOME /INVESTMENT , IF THE SAME IS CLAIMED BY THE ASSESSEE AND SUBSTANTIATED WITH CASH FLOW OR SUCH OTHER EVIDENCES AS ARE REQUIRED. 46. TO SUMMARISE THE RESULT, ASSESSEES APPEALS IN ITA NOS.1493 TO 1498/CHNY/18 ARE PARTLY ALLOWED FOR STATISTICAL PU RPOSES AND IN ITA NO.1499/CHNY/2018 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSION OF HEARING ON 13 TH JUNE, 2018, AT CHENNAI. SD/ - SD/ - ( ) (S. JAYARAMAN) ' # /ACCOUNTANT MEMBER ( ) (GEORGE MATHAN) $ # / JUDICIAL MEMBER & / CHENNAI ' / DATED: 13 TH JUNE, 2018. K S SUNDARAM ( ) *+ , +$ / COPY TO: 1 . / APPELLANT 3. ( ( - () / CIT(A) 5. +01 23 / DR 2. / RESPONDENT 4. ( ( - / CIT 6. 145 6 / GF