SHANKAR LAL KAHANDELWAL, Jaipur V. ACIT, Jaipur

ITA 155/JPR/2011

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 7196 (ITAT-JAIPUR)
• Duration Of Justice: 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 24-02-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: K L MOOLCHANDAN I; R K KHUTETA
• Keywords: Unexplained investment; Depreciation; Loose papers; Transactions in derivatives; Additional evidence; Speculation loss
• Section: 40A(3); 153A; 43(5); 68; 144

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH A JAIPUR (BEFORE SHRI R.K.GUPTA AND SHRI N.L.KALRA) ITA NO.155/ JP/2011 ASSESSMENT YEAR 2006-07 PAN: ADRPK 5003 F SHRI SHANKAR LAL KHANDELWAL VS. THE ACIT A-2, RANA PRATAP NAGAR CENTRAL CIRCLE- 1 JHOTWARA, JAIPUR JAIPUR (APPELLANT ) (RESPONDENT) ITA NO.229/ JP/2011 ASSESSMENT YEAR 2006-07 PAN: ADRPK 5003 F THE ACIT VS. SHRI SHANKAR LAL KHANDELWAL CENTRAL CIRCLE- 1 A-2, RANA PRATAP NAGAR JAIPUR JHOTWARA, JAIPUR (APPELLANT ) (RESPONDENT) ASSESSEE BY : SHRI K.L. MOOLCHANDANI & SHRI R.K. KHUTETA DEPARTMENT BY : SHRI SUNIL MATHUR DATE OF HEARING: 20-07-2011 DATE OF PRONOUNCEMENT: 12-08-2011 ORDER PER N.L. KALRA, AM:- THE ASSESSEE AS WELL AS REVENUE HAVE FILED THE A PPEALS AGAINST THE ORDER OF THE LD. CIT(A), CENTRAL, JAIPUR DATED 30 -12-2010 FOR THE ASSESSMENT YEARS 2006-07. 2 2.1 THE FIRST GROUND OF APPEAL OF THE ASSESSEE IS T HAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE AT 15% ON CONS TRUCTION AND WORK IN PROGRESS EXPENSES TOTALING TO RS. 1,15,34,557/- OUT OF DISALLOWANCE OF RS. 50.00 LACS MADE BY THE AO. 2.2 THE FIRST GROUND OF APPEAL OF THE REVENUE IS T HAT THE LD. CIT(A) HAS ERRED IN REDUCING THE ADDITION TO RS. 17,30,184/- A S AGAINST RS. 50.00 LACS MADE BY THE AO. 2.3 THE ASSESSEE CLAIMED THE FOLLOWING EXPENSES. 1.TOTAL BUILDING CONSTRUCTION EXPENSES RS. 96,05, 955/- 2. TOTAL WIP EXPENSES RS. 19,28,604/- TOTAL RS. 1,15,34,557 /- THE AO HAS DISALLOWED THE EXPENSES TO THE EXTENT OF RS. 50.00 LACS ON THE SAME BASIS AS PER HIS FINDINGS GIVEN FOR THE ASSESS MENT YEAR 2008-09. 2.4 BEFORE THE LD. CIT(A), THE ASSESSEE HAS MADE TH E SAME SUBMISSIONS WHICH HAVE BEEN MADE DURING THE COURSE OF APPELLATE PROCEEDINGS FOR THE ASSESSMENT YEAR 2008-09. SUCH SUBMISSIONS HAVE BEE N REPRODUCED IN THE APPELLATE ORDER FOR THE ASSESSMENT YEAR 2008-09. TH E LD. CIT(A) RESTRICTED THE DISALLOWANCE TO THE EXTENT OF 15% OF THE EXPENS ES CLAIMED. IN ASSESSMENT YEAR 2008-09 ALSO, THE LD. CIT(A) HAS CO NFIRMED THE DISALLOWANCE OF 15% OF THE EXPENSES. 3 2.5 BEFORE US, THE LD. AR HAS SUBMITTED THAT IN CAS E THE ADDITION OF RS. 50.00 LACS AS MADE BY THE AO IS CONSIDERED THEN GRO SS PROFIT RATE WILL BE TO THE EXTENT OF 43.35%. THE ASSESSEE HAS SHOWN THE PR OFIT OF 10.68% OF THE TURNOVER . 2.6 WE HAVE HEARD BOTH THE PARTIES. THE ISSUE BEFOR E US IS SIMILAR TO THE ISSUE DECIDED AS DECIDED IN THE CASE OF THE ASSESSE E FOR THE ASSESSMENT YEAR 2008-09 AND 2007-08. FOLLOWING OUR FINDING FOR THE ASSESSMENT YEAR 2008- 09 AND 2007-08, WE FEEL THAT IT WILL BE FAIR AND RE ASONABLE TO APPLY THE GROSS PROFIT RATE OF 12% AS AGAINST 10.68% DISCLOSED BY T HE ASSESSEE. 3.1 THE SECOND GROUND OF APPEAL OF THE ASSESSEE IS THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF RS. 7,39,15 6/- BY APPLYING THE PROVISIONS OF SECTION 40A(3) OF THE ACT. 3.2 THE ISSUE HAS BEEN CONSIDERED BY THE AO AT PAGE S 5 TO 7 OF THE ASSESSMENT ORDER. THE LD. CIT(A) NOTICED THAT THE D ISALLOWANCE WHICH IS REQUIRED TO BE MADE FOR THE ASSESSMENT YEAR UNDER C ONSIDERATION IS RS. 7,39,156/-. THE REVENUE IS NOT AGGRIEVED AGAINST TH E RELIEF ALLOWED BY THE LD. CIT(A). 3.3 WE HAVE HEARD BOTH THE PARTIES. THE ISSUE OF DI SALLOWANCE U/S 40A(3) HAS BEEN CONSIDERED BY US WHILE DISPOSING OFF THE APPEALS FOR THE ASSESSMENT YEAR 2008-09 AND 2007-08. FOLLOWING OUR FINDING FOR BOTH THE 4 ASSESSMENT YEARS, WE HOLD THAT NO DISALLOWANCE IS R EQUIRED TO BE MADE AS THE BOOKS OF ACCOUNTS ARE BEING REJECTED AND THE PROFIT RATE IS BEING APPLIED. HENCE, THE ADDITION OF RS. 7,39,156/- IS DELETED. 4.1 THE THIRD GROUND OF APPEAL OF THE ASSESSEE IS T HAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 33.00 LACS MADE BY THE AO ON ACCOUNT OF ALLEGED UNDISCLOSED INVESTMENT MADE BY THE ASSESSEE FOR PURCHASE OF PROPERTY NO. 120, 121 AND 122 AT BAL VI HAR COLONY. 4.2 THE AO HAS REFERRED TO ANNEXURE A-9 WHICH CONTA INS THE DETAILS IN RESPECT OF PURCHASE OF PLOT NO.120, 121 AND 122 AT BAL VIHAR COLONY. PAGE NO. 10 OF THIS ANNEXURE SHOWS THE RECEIPT OF CASH O F RS. 33.00 LACS AND CHEQUES OF RS. 30.00 LACS ON 19-08-2005 FOR PURCHAS E OF PLOT NO. 119, 120 AND 121 AT BAL VIHAR COLONY. SUCH PROPERTIES HAVE B EEN PURCHASED FROM SMT. SUMITRA TAMBI AND SHRI RAKESH TAMBI. THE ASSES SEE HAS FAILED TO BRING ON RECORD THE EVIDENCE/ DOCUMENTS TO PROVE TH E CASH PAYMENT FOR PURCHASE OF THE PROPERTIES. THUS THE AMOUNT OF RS. 33.00 LACS WAS ADDED TO THE INCOME OF THE ASSESSEE AS UNDISCLOSED INVESTMEN T FOR PURCHASE OF PLOT NO. 120, 121 AND 122 AT BAL VIHAR COLONY. 4.3 BEFORE THE LD. CIT(A), LD. AR HAS MADE THE FOLL OWING SUBMISSIONS. 4.2 THE A.R OF THE APPELLANT HAS SUBMITTED AS UN DER:- 1) THE ASSESSEE HAS MADE CASH PAYMENT FOR THE PURCHASE S OF THE IMPUGNED PLOTS AS UNDER:- 5 AMOUNT RECORDED IN CASH BOOK S.NO NAME OF SELLER DESCRIPTION OF PLOT AMOUNT PAID IN CASH DATE AMOUNT 1 RUPESH TAMBI PLOT NO 109 TO 111 BAL VIHAR 1015000 28/10/2005 (PB PAGE 27) 1015000 2 SUMITRA TAMBI PLOT NO 117 TO 119 BAL VIHAR 1180000 17/09/2005 (PB PAGE 25) 1180000 3 JAGDISH TAMBI PLOT NO 120 TO 122 BAL VIHAR 1130000 19/08/2005 (PB PAGE 24) 1130000 THE LD AO REJECTED THE EXPLANATION OF THE ASSESSE E WITHOUT PINPOINTING WHICH INCOMING (RECEIPTS) IS BOGUS OR OVERSTATED OR WHICH OUTGOING (PAYMENTS) ARE UNDERSTATED. THE CASH BALANCE CAN BE CREATED EITHER BY OVERSTATE MENT OF RECEIPTS OR UNDERSTATEMENT OF OUTGOINGS. THE CASH BOOK IS NOTHING BUT RECORDING O F THE ENTRIES OF RECEIPT AND PAYMENT IN CHRONOLOGICAL ORDER. THE CASH PAYMENTS AGAINST T HE ABOVE PLOTS ARE DULY RECORDED IN THE CASH BOOK PRODUCED BEFORE THE AO, THEREFORE, TH E INVESTMENT CANNOT BE TREATED AS UNEXPLAINED INVESTMENT. 2) IN RAJENDRA KUMAR KEDIA V/S. DCIT (JP) REPORT IN 22 TW PAGE 506, THE ITAT, JAIPUR BENCH HAS HELD THAT BOOKS OF ACCOUNTS OF ASS ESSEE, WHICH ARE NOT PROPERLY MAINTAINED, CAN BE SUBSEQUENTLY PREPARED AND RECAST ED ON THE BASIS OF BANK STATEMENTS, & OTHER RELATED DOCUMENTS OF SALE, PURCHASE. AFTER T HE SEARCH THE ASSESSEE, PREPARED THE BOOKS OF ACCOUNT ON THE BASIS OF BANK STATEMENTS, A ND OTHER DOCUMENTS. THE FINDINGS OF THE LD AO IN THE ASSESSMENT WOULD FURTHER INCREASE THE AVAILABILITY OF CASH IN THE HANDS OF THE ASSESSEE WHICH MAY BE SEEN AS UNDER:- A) DISALLOWANCE OF CONSTRUCTION EXPENSES:- THIS FINDING OF THE AO WOULD RESULT FURTHER INCREAS E CASH BALANCE IN THE HANDS OF ASSESSEE. B) INCREASE IN PROFIT FROM TAXI OPERATION THESE FINDINGS OF THE AO WOULD RESULT FURTHER INCRE ASE CASH BALANCE IN THE HANDS OF ASSESSEE. C) SUPPRESSION OF SALE VALUE OF PLOTS THESE FINDINGS OF THE AO WOULD RESULT FURTHER INCRE ASE CASH BALANCE IN THE HANDS OF ASSESSEE. D) ADDITION U/S 68 THE RECEIPTS WHATEVER THE AO CONSIDERED BOGUS/UNEXP LAINED, THE LD AO HAS MADE SEPARATE ADDITION, AND THEREFORE, THE CASH AGAINST THESE ENTRIES WOULD BE AVAILABLE WITH THE ASSESSEE FOR INVESTMENT. 3) THE LEARNED AO IS MAKING ADDITION BOTH FOR THE ASSE TS/EXPENSES AND INCOME. THE INCOME SHOULD EITHER BE COMPUTED BY APPLYING ASSET EXPENDITURE THEORY OR INCOME THEORY. IF BOTH ARE TREATED AS INCOME, THAN IT WOUL D RESULT THE DOUBLE ADDITION AS THE INCOME IS ALWAYS UTILIZED IN INVESTMENT OR EXPENSES . THE LD AO HAS NOT FOUND OTHERWISE UTILIZATION OF CASH BALANCE AVAILABLE WITH THE ASSE SSEE. THE DEPARTMENT HAS CARRIED OUT INTENSIVE SEARCH AND HAS NOT FOUND ANY UNDISCLOSED PERSONAL EXPENSES OF THE ASSESSEE. FURTHER, THERE IS NO FINDING OF THE AO THAT THE AVA ILABILITY OF CASH SHOWN BY THE CASH BOOK 6 WAS WIPED OUT BY THE ASSESSEE IN UNSCRUPULOUS ACTIV ITIES. THEREFORE, THE BENEFIT OF CASH AVAILABLE IN THE RECASTED BOOKS OF ACCOUNT SHOULD B E GIVEN. 4) BENEFIT OF TELESCOPING OF ADDITION MADE THE LEARNED AO MADE TRADING ADDITION (DISALLOWANCE OF EXPENSES, SUPPRESSION OF SALES, INCREASE IN TAXI INCOME ETC) AS WELL AS AGAINST UNE XPLAINED INVESTMENT. THE TRADING ADDITIONS MADE BY THE AO CONSTITUTES A FUND AND TEL ESCOPING THEREOF SHOULD BE ALLOWED AGAINST THE ADDITION MADE FOR UNEXPLAINED INVESTMEN T. 4.4 THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSION S OF THE ASSESSEE UPHELD THE ADDITION OF RS. 33.00 LACS AFTER OBSERVI NG AS UNDER:- 4.3. I HAVE CONSIDERED THE SUBMISSION OF LD. A.R AND HAVE PERUSED THE MATERIAL ON RECORD. TH E CASH PAYMENT OF RS. 33 LAKHS OVER AND ABOVE THE CHEQUE P AYMENT OF RS. 30 LAKHS FOR PURCHASE OF PLOT NO.120, 121 AND 1 22 IN BAL VIHAR COLONY IS UNDISPUTED. THE A.O. HAS REJECTED T HE EXPLANATION OF THESE CASH PAYMENTS BEING EXPLAINED FROM FLOW STATEMENT, THE APPELLANT HAS NOT BROUGHT ON RECORD ANY EVIDENCE INDICATING ACCRETION OF CASH FOR ENABLING CASH PAYMENT. THE CASH FLOW STATEMENT SO FURNISHED BEFOR E THE A.O WIDE QUITE SKETCHY AND WITHOUT SUPPORTING DETAILS. ACCORDINGLY ARGUMENT OF THE APPELLANT IN THIS REGARD IS REJECTE D AND PAYMENT SO MADE IS HELD TO BE UNACCOUNTED. THEREFOR E THE ADDITION IS CONFIRMED. HOWEVER, THE OTHER REQUEST/A RGUMENT OF THE APPELLANT THAT THE AVAILABILITY OF THE CASH WIT H APPELLANT HAS ALREADY INCREASED ON ACCOUNT OF VARIOUS ADDITIONS B Y INCREASING THE INCOME OR MAKING THE DISALLOWANCE OU T OF EXPENDITURE, AND ACCORDINGLY TELESCOPING MAY BE GIV EN, WILL BE CONSIDERED SUBSEQUENTLY IN THE PRESENT ORDER. 4.5 DURING THE COURSE OF PROCEEDINGS BEFORE US, LD. AR HAS FILED THE FOLLOWING SUBMISSIONS. 7 ON CAREFUL STUDY OF THE EX A-9 (PAGE NO. 10 ON THE BASIS OF WHICH ADDITION HAD BEEN MADE) AND THE CHART OF THE CASH PAYMENTS AS DRAWN BY THE LD AO HIMSELF AT PAGE NO.5 FOR THE PURPOSE OF MAKING DISALLOWANCE U/S 40 A (3) IN RESPECT OF VARIOUS PROPERTIES IT WOULD BE NOTED THAT THAT THE FINDINGS AS ARRIVED AT BY THE AUTHORITIES BELOW ARE NOT ONLY FACTUALLY INCORRECT BUT SELF-CONTRADICTORY AS DISCUSSED HEREUNDER POINT- WISE: (I) IT IS INCORRECT TO SAY THAT CASH PAYMENT OF RS.33 L AC WAS MADE IN RESPECT OF THESE PROPERTIES OVER AND OBOVE RS. 3 0 LAC PAID BY CHEQUE (AS PER FINDINGS OF THE LD CIT (A) AT PAGE N O. 10 & 11 OF THE APPEAL ORDER. IN FACT RS. 33 LAC WERE PAID IN C ASH IN RESPECT OF VARIOUS PROPERTIES (WHICH INCLUDED PLOT NO. 109 TO 111 & 117 TO 119 & 120 TO 122) AND NOT IN RESPECT OF THESE T HREE PROPERTIES ONLY AS ALLEGED BY THE AO & CIT (A). THI S FACT IS SELF EXPLAINED & EVIDENT FROM THE CHART AS DRAWN BY THE AO HIMSELF AT PAGE NO. 5 OF THE ORDER. ON PERUSAL OF T HIS CHART, YOUR HONORS WOULD APPRECIATE THAT ONLY RS. 11,30,000/- W ERE PAID IN CASH IN RESPECT OF THE ABOVE THREE PROPERTIES AND NOT RS. 33 LAC AS ALLEGED BY THE AUTHORITIES BELOW. THUS THESE FIN DINGS ARE FACTUALLY INCORRECT AND SELF CONTRADICTORY. FOR ARR IVING AT SUCH FAULTY CONCLUSIONS, THEY DID NOT CONSIDER THE SUBMI SSIONS OF THE AR. OF THE APPELLANT IN RIGHT PERSPECTIVE AND MISCO NSTRUED THE CONTENTS OF THE SAID SUBMISSIONS. (II) LEGALLY ALSO, THE CONCLUSIONS AS ARRIVED AT ON THE POINT ARE DEVOID OF MERIT AND SELF CONTRADICTORY . ON THE ONE HAND, THEY HAVE REJECTED THE BOOKS OF ACCOUNT AND MADE ADDITIO N OF RS.33 LAC ON THE PLEA THAT THESE BOOKS WERE NOT RELIABLE IN ABSENCE OF SUPPORTING VOUCHERS ETC, ON THE OTHER HAND ON THE BASIS OF SAME BOOKS OF ACCOUNT (REJECTED BY THEM FOR MAKING ADDIT ION ON ACCOUNT OF UNDISCLOSED INVESTMENT), THEY HAD TAKEN COGNIZANCE OF THE DEFAULT WITHIN THE MEANING OF SECTION 40 A ( 3) OF THE ACT AND HAD MADE ADDITION IN RESPECT OF THE SAME CASH PAYMENTS WHICH WERE BEING TAKEN AS UN-EXPLAINED FOR THE PUR POSE OF INVESTMENT IN THE PROPERTIES. THUS BOTH THE VIEWS A RE SELF CONTRADICTORY AND BAD IN LAW. 8 (III) AGAIN FOR MAKING SUCH ADDITION, NO SECTION WHAT SO EVER OF ACT WAS QUOTED INDICATING THE STATE OF MIND. IN FACT TH E AUTHORITIES BELOW WERE NOT CERTAIN ABOUT THEIR FINDINGS AND CON CLUSIONS AND FOR SUCH WAVERING FRAME OF MIND, THEY DID NOT M ENTION ANY SECTION OF THE ACT WHICH CALLED FOR SUCH ADDITION. (IV) AGAIN IT IS A SETTLED LAW THAT IN ABSENCE OF ANY SP ECIFIC DEFECT OR DEFICIENCY, THE BOOKS SO PREPARED ON THE BASIS O F BANK STATEMENTS AND OTHER DOCUMENTARY EVIDENCES COULD NO T BE BRUSHED ASIDE SUMMARILY AS DONE BY THE AUTHORITIES BELOW. (KINDLY REFER TO THE JUDICIAL CITATION IN THE CASE OF SHRI RAJINDER KEDIA AND OTHERS AS RELIED UPON BY THE HONORABLE ME MBERS OF ITAT, JAIPUR BENCH, JAIPUR). 4.6 BEFORE US, THE LD. DR FILED THE COPY OF PAGE 10 OF ANNEXURE A-9. OUR ATTENTION WAS DRAWN TOWARDS PAGE 10 OF ANNEXURE A-9 WHICH IS WRITTEN ON THE LETTER HEAD OF SHRI JAGDISH PRASAD TAMBI. FROM THIS PAPER, THE LD. DR STATED THAT THE ASSESSEE HAS MADE THE CASH PAYMENT FOR PURCHASE OF THE PLOTS. IT WAS THEREFORE, SUBMITTED THAT THE LD. CIT(A) WAS JUSTIFIED IN CONFIRMING THE ADDITION OF RS. 33.00 LACS. 4.7 WE HAVE HEARD BOTH THE PARTIES. PAGE 10 OF ANNE XURE A-9 SHOWS THE PAYMENTS OF RS. 15.00 LACS THROUGH THREE CHEQUES DA TED 30-08-05 AND IT SHOWS THE PAYMENT OF RS. 13.00 LACS IN CASE THE PLO TS MENTIONED ARE 118, 119 AND 120. AT PAGE 8 OF THE ASSESSMENT ORDER, THE AO HAS REFERRED TO CASH PAYMENTS IN RESPECT OF PLOT NO. 120, 121 AND 122. THE TOTAL PAYMENTS IN RESPECT OF THESE THREE PLOTS AS PER PAGE 10 OF ANN EXURE A-9 AS PER AO ORDER ARE RS. 33 LACS IN CASH AND RS. 30 LACS IN CHEQUE D ATED 19-08-2005. 9 HOWEVER, THE COPY OF PAGE 10 OF ANNEXURE A-9 DO NOT SHOW CASH PAYMENT OF RS. 33 LACS. HENCE, THERE WAS NO NEED OF MAKING ADDITION OF RS. 33.00 LACS. THUS THE ADDITION OF RS. 33.00 LACS IS DELETE D. 5.1 THE FOURTH GROUND OF APPEAL OF THE ASSESSEE IS THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 16.09 LACS OUT OF RS. 36.64 LACS MADE BY THE AO ON ACCOUNT OF ALLEGED UNACCOUNTED PROFIT ON SALE OF 05 PLOTS AT GANESH NAGAR ON THE BASIS OF PAPER MARKED AS ANNEXU RE A-1 BY REJECTING THE ASSESSEE'S CONTENTION THAT THE SEIZED PAPER IS DUMB, MUTE, AMBIGUOUS, SPECIFIC AND ROUGH. 5.2 THE AO HAS CONFRONTED PAGE 1 OF ANNEXURE A-1 TO THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDING AS THIS PAPER SHOWS CASH RECEIPT OF RS. 21.70 LACS AND RS. 14.94 LACS TOTALING TO R S. 36.64 LACS. THE ASSESSEE STATED THAT THESE ARE THE ROUGH CALCULATIONS. ACCOR DING TO THE AO, THE FIGURES MENTIONED REPRESENT THE CASH ADVANCE RECEIVED FOR F IVE PLOTS AT GANESH NAGAR. PAGE 25 OF ANNEXURE A-1 CONTAINS THE DETAILS OF SALES IN RESPECT OF FIVE PLOTS AT GANESH NAGAR AND IT HAS BEEN MENTIONE D AT PAGE 24 OF ANNEXURE A-15 AS 13 X 5 = 65. THE AO THEREFORE, HEL D THAT THE ASSESSEE HAS RECEIVED THE SUM OF RS. 36.64 LACS AS CASH ADVANCE FOR SALE OF PLOTS. THEREFORE, THE SAME HAS BEEN TREATED AS INCOME OF T HE ASSESSEE. 10 5.3 BEFORE THE LD. CIT(A), THE ASSESSEE HAS MADE TH E FOLLOWING SUBMISSIONS. 5.2 THE A.R OF THE APPELLANT HAS SUBMITTED AS UNDER :- 1) SUBJECT PAPER IS MUTE, AMBIGUOUS, UNSPECIFIC A ND ROUGH THE PAGE NO 1 OF ANNEXURE A-1 ( PB PAGE 51) IS OF SUCH A NATURE THAT NO CONCLUSION CAN BE DERIVED OUT OF IT. IT IS A DUMB P APER. VITAL INFORMATION SUCH AS NAME OF PARTY, DATE OF RECEIPTS/PAYMENTS, W HETHER THE FIGURES REPRESENTS TO RECEIPT OR PAYMENT IS MISSING ON THIS PAPER. ONLY SOME FIGURE WORK/CALCULATION WORK IS AVAILABLE ON THIS P APER. ON LEFT HAND SIDE AND RIGHT HAND SIDE SOME FIGURES ARE WRITTEN. THE F IGURES OF LHS TOTALED AT RS. 2170000/- AND FIGURES OF RHS TOTALED AT RS. 14, 34,500/-. THEN 1434500/- WAS DEDUCTED FROM 2170000/- AND BALANCE F IGURE ARRIVED AT 675500/- AND THIS FIGURE IS MARKED AS EXTRA. BELOW TO THE ABOVE FIGURES, 1166500 MENTIONED AND THEN FIGURE 675500/- WAS DEDU CTED FROM 11, 66,500/- BALANCE CALCULATED AT 491000/-; THIS BALAN CE ADDED TO 21,00,000 AND TOTAL FIGURE MENTIONED 25,91,000. FROM THE ABOVE ENTRIES IT CANNOT BE VISUALIZED THA T THE ASSESSEE HAS RECEIVED 2170000+1494000= 3664000/- AS ADVANCE. IF SO THAN 1494500 CANNOT BE DEDUCTED FROM 2170000/- BUT IT SHOULD BE ADDED TO 2170000/-. THERE IS NOTHING ON DOCUMENT TO VISUALIZE THAT THE ASSESSEE HAS RECEIVED ADVANCE OF RS. 3664000/-. FURTHER THE LD AO HAS HELD THAT THE ASSESSEE HAS R ECEIVED ADVANCE AGAINST 5 PLOTS OF GANESH NAGAR. THE ASSESSEE HAS N O STOCK OF 5 PLOTS IN GANESH NAGAR. THE ASSESSEE HAS TWO PLOTS IN GANESH NAGAR EXTENSION AS OPENING STOCK, WHICH WERE CARRIED TO NEXT YEAR AS C LOSING STOCK. THE ASSESSEE PURCHASED ONE PLOT AND SHOP IN GANESH NAGA R WHICH WAS SOLD DURING THE YEAR. THEREFORE, NO ADDITION CAN BE MADE ONLY ON THE BAS IS OF DEAF AND DUMB DOCUMENT. RELIANCE IS PLACED ON FOLLOWING DECISION S:- (A) JAYANTILAL PATEL VS. ACIT AND OTHERS/ DR BAL BIR SINGH TOMAR VS ACIT & OTHERS (RAJASTHAN HIGH COURT) 233 I TR 588. / 244 ITR 500 (DEPARTMENTAL APPEAL IN DB) HONBLE RAJASTHAN HIGH COURT OBSERVED THAT ADDITION ON THE BASIS OF NOTING ON A PIECE OF PAPER CANNOT BE SUSTAINED WHEN IT IS NOT IN ASSESSEES OWN HAND-WRI TING. (B) HISSARIA BROS VS ACIT (ITA NO. 179/JDPR/1998 ) 22 TAXWORLD 684 ITAT JAIPUR IT WAS HELD THAT ADDITION CANNOT BE MADE ON 11 THE BASIS OF VAGUE FIGURES FOUND NOTED ON SEIZED LO OSE PAPER WITHOUT PROVING THAT THE ALLEGED AMOUNT ARE RECEIPTS AND IN COME OF THE ASSESSEE. (C) ITO VS MANNALAL JHALANI (ITA NO. 250 TO 260/JP/1998) 22 TAXWORLD 551 ITAT JAIPUR. IT WAS HELD THAT ADDITION CANNOT BE MADE SIMPLY RECOVERY OF SOME PAPERS FOUND AND SEIZED DURING THE COURSE OF SEARCH WITHOUT MAKING NECESSARY VERIF ICATION AND EXAMINATION. (D) ASHWANI KUMAR BHARDWAJ VS DCIT 21 TAXWORLD 3 58 ITAT JAIPUR. IT WAS HELD IN PARA 29.6 THAT NO ADDITION CAN BE MA DE ON THE BASIS OF DEAF AND DUMB DOCUMENTS. (E) MOHD. ILLIAS CHOUDHARY VS DCIT 25 TAX WORLD 394 ITAT JAIPUR. IT WAS HELD THAT THE ADDITION CANNOT BE JUSTIFIABLY BE MADE AS UNDISCLOSED INCOME ON THE BASIS OF CERTAIN ENTRI ES FOUND RECORDED ON A SEIZED PAPER WITHOUT MAKING ANY INQUIRY AND INVESTI GATION AND WITHOUT EXAMINING THE ASSESSEE. (F) ASWANI KUMAR VS ITO 39 ITD 183 DEL. IT WAS HELD THAT NO ADDITION CAN BE MADE ON THE BASIS OF DUMB DOCUME NTS. (G) MOONGA METALS PVT. LTD., VS. ACIT (ALL.) 67 TTJ 247 BURDEN IS ON THE REVENUE TO ESTABLISH THAT FIGURES APPEARING ON LOOSE PAPERS FOUND REPRESENT UNDISCLOSED INVESTMENT OF TH E ASSESSEE. (H) JAGDAMBA RICE MILLS VS. ACIT (CHD.) 67 TTJ 8 38 IT WAS HELD THAT NO ADDITION CAN BE MADE ON A DUMB DOCUMENT. 5.4 THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSION S OF THE ASSESSEE RESTRICTED THE ADDITION TO RS. 16.09 LACS AFTER OBS ERVING AS UNDER:- 5.3. I HAVE CONSIDERED THE SUBMISSION OF LD. A.R AND HAVE PERUSED THE MATERIAL ON RECORD. THE ARGUME NT REGARDING SUBJECT PAPER BEING, MUTE, AMBIGUOUS AND ROUGH HAS ALREADY BEEN CONSIDERED AND DECIDED AGAINST THE APP ELLANT WHILE CONSIDERING PAGE 23 AND 25 OF ANN. A-25. ON P ERUSAL OF IMPUGNED PAGE NO. 1 OF ANN. A-1, IT IS SEEN THAT NA ME GANESH NAGAR PLOT HAS BEEN SPECIFICALLY WRITTEN AND DETAIL S OF VARIOUS PAYMENTS IS ALSO MENTIONED ON THE LEFT SIDE. TOTAL OF THIS CASH RECEIPTS COMES TO RS. 21,70,000/- ON RIGHT HAND SID E, VARIOUS 12 ITEMS ALONGWITH AMOUNT ARE MENTIONED, TOTAL OF WHIC H IS RS. 14,94,500/-. THIS AMOUNT OF RS. 14,94,500/- HAS BEE N CARRIED OVER TO THE LEFT SIDE AND DEDUCTED OUT OF RS. 21,70 ,000/-. BALANCE HAS BEEN ARRIVED AT RS. 6,75,500/- AND AGAI NST IT WORD EXTRA IS MENTIONED. IN VIEW OF IT I AGREE WITH T HE ARGUMENT OF THE A.R THAT RS. 21,70,000/- + RS. 14,94,000/- = R S. 36,64,000/- CAN ONLY BE THE AMOUNT OF ADVANCE, AS STATED BY A.O. (OR FOR THAT MATTER NOT EVEN RS. 36,64,500/- ). HOWEVER, ON CAREFUL PERUSAL OF THE PAGE, IT IS SEEN THAT ON RIGHT HAND SIDE, ANOTHER SET OF ENTRIES ARE ALSO MENTIONED. ON CONJO INT READING OF THESE ENTRIES, IT IS SEEN THAT RS. 21,70,000/- + RS. 21,00,000/- IS RECEIVED FOR RECEIVABLE AGAINST THE GANESH NAGAR PLOT. RS. 14,94,500/- ARE THE OUTGOINGS FOR EXPENDITURE AND R S. 11,66,500/- IS AMOUNT INCURRED ON WORKS MAKING THE TOTAL OUT GOING AMOUNT OF RS. 26,61,000/-. THUS THERE IS PROF IT OF RS. 16,09,000/- ON SALE OF GANESH NAGAR PLOT. THIS SALE OF GANESH NAGAR PLOT IS DIFFERENT FROM THE SALE OF GANESH NA GAR PLOT AND THE SHOP REFLECTED IN THE BOOKS OF ACCOUNTS AS IN T HOSE CASES CONSTRUCTION WORK HAS NOT BEEN DONE, WHEREAS THIS P APER REFLECT THE GANESH NAGAR PLOT SOLD AFTER CONSTRUCTION. HENC E, THE AMOUNT OF RS. 16,09,000/- IS HELD TO BE UNACCOUNTE D PROFIT OF GANESH NAGAR PLOT AND THE ADDITION SO MADE BY THE A .O. OF RS. 36,64,000/- IS MODIFIED AS ABOVE AND RESTRICTED TO RS. 16,09,000/-. 5.5 THE REVENUE VIDE GROUND OF APPEAL NO. 2 IS AGGR IEVED AGAINST THE REDUCTION OF ADDITION TO RS. 16.09 LACS AS AGAINST RS. 33.64 LACS MADE BY THE AO. 5.6 BEFORE US, THE LD. AR HAS FILED THE FOLLOWING S UBMISSIONS. IN APPEAL, THE FINDINGS OF THE LD. AO WERE ASSAIL ED VEHEMENTLY. ON CAREFUL STUDY OF THE SAID EXHIBIT IT WOULD BE OBSERVED THAT NO WHERE IT CONTAINED THE DETAILS OF RS. 36,64,000/ - AND AGAIN THERE WAS NO MENTION AT ALL REGARDING 5 PLOTS OF GANESH NAGAR. IN THE CIRCUMSTANCES, IT IS NOT UNDER-STOOD AS TO HOW THE LD. AO COULD CO-RELATE EX.A-1(PAGE NO.1) WITH EX. A-15 (PAGE NO.25). WHILE APPRECIATING THESE FACTS, THE LD. CIT (A) ALLOWED THE APPEAL ON THIS POINT PARTLY HOL DING THAT SUCH PAPER 13 COULD NOT BE TAKEN AS DEAF AND DUMB PAPER AS IT CON TAINED JOTTINGS AND WORKINGS. HE WAS HOWEVER IN THE AGREEMENT OF THE A. R THAT THERE WAS NO MENTION OF THE FIGURES OF RS.36,64,000/- ANY WHERE ON THE SAID PAPER BUT FROM THE FIGURES AS ADDED AND SUBTRACTED THE NET AD VANCE MONEY AGAINST THE SALE OF THE PLOTS OF GANESH NAGAR COULD BE TAKE N AT RS.16,09,000/- AS UNRECORDED CASH RECEIPTS AND ACCORDINGLY CONFIRMED ADDITION TO THIS EXTENT. THE LD. CIT (A) HAD DISCUSSED THIS ADDITION AT PAGE NO.13 OF THE APPEAL ORDER. THE FINDINGS OF THE LD. CIT (A) ARE A LSO FACTUALLY AND LEGALLY INCORRECT FOR THE FOLLOWING REASONS: (I) ON CAREFUL STUDY OF THE EXHIBIT UNDER CONSIDERATION (COPY LYING IN PB PAGE NO.28) YOUR HONORS WOULD NOTE THAT THERE IS NO MENTION OF 5 PLOTS OF GANESH NAGAR ANY WHERE ON SUCH SHEET. IN ABSENCE OF SUCH MENTION, HOW THE AUTHORITIES BELOW COULD CONCLUDE THAT THESE FIG URES RELATED TO THE SALE CONSIDERATION OF 5 PLOTS OF GANESH NAGAR, PARTICULA RLY WHEN THE APPELLANT DID NEVER OWNED SO MANY PLOTS IN THE SAID NAGAR. (II) AGAIN ON CAREFUL STUDY OF THE SAID PAPER, IT WOULD BE NOTED THAT NO WHERE THERE IS MENTION OF THE FIGURES OF RS36,64,000/-. IT IS NOT CLEAR ON WHAT BASIS THE LD. AO ADDED THE FIGURES OF 14,94,000/- I N THE FIGURES OF 21,70,000/- THUS SUCH WORKING IS WITHOUT ANY BASIS. SIMILARLY THE WORKING OF THE CIT (A) TO WORK-OUT INCOMINGS OF RS .21,70,000 + RS.21,00,000/- AND OUT GOINGS OF RS.14,94,500/- RS. 11,66,500/- IS ALSO WITHOUT ANY BASIS. IT IS PURELY GUESS WORK AND JUGG LERY OF THE FIGURES DONE BY THE LEARNED CIT (A) ON SURMISES AND CONJECTURES. (III) AGAIN THE LD.CIT (A) HAD OPINED THAT SUCH WORKING R ELATED TO PLOTS OF GANESH NAGAR. SUCH FINDINGS OF THE LD. CIT (A) ARE ALSO BASELESS. THE CIT (A) HAD PROCEEDED TO CONCLUDE THIS FACT ON THE BASI S OF THE FINDINGS OF LD. AO WITHOUT APPRECIATING THE FACT AS TO HOW EX.A-1(P AGE NO.1) COULD BE CO-RELATED WITH EX.A-15 (PAGE NO.25). IN ABSENCE OF ANY MATERIAL ON RECORD, RELATING THESE EXHIBITS WITH EACH OTHER WAS ILLOGICAL AND UN- REASONABLE AND DOES NOT HOLD GOOD. (IV) HERE IT WOULD ALSO BE WORTH-MENTIONING THAT AT THE TIME OF SEARCH OPERATIONS, THE APPELLANT WAS CONFRONTED WITH REGAR D TO THIS EXHIBIT SPECIFICALLY AND CATEGORICALLY. IN THE DEPOSITION V IDE REPLY TO QUESTIONS NO. 26 TO 28 THE APPELLANT HAD INFORMED POINT BLANK TH AT THESE WERE ROUGH WORKING ONLY RELATING TO PLOT NO.117, GANESH NAGAR WHICH CONVEYED NO MEANING AT ALL. FURTHER IT WAS INFORMED THAT EXCEPT THIS PLOT, HE OWNED NO OTHER PLOT IN GANESH NAGAR. THE RELEVANT EXTRACT FR OM HIS STATEMENT ARE RE- PRODUCED HERE-UNDER FOR READY REFERENCE: IZ'U 26 & ESA VKIDS ;GKA LS IZKIR DKXTKR DK ANN A-1 FN[KK JGK GWA FTLESA DQY N I`'B GS D`IK;K BLDS IST & 1 DKS NS[KDJ CRK;S FD BLE SA FY[KS TRANSACTION FDL CKCR GS A MRRJ & ;G FGLKC 117] X.KSK UXJ] >KSVOKMK] IJ FLFKR GEKJS EDKU DK GS A ;G JQ ;G JQ ;G JQ ;G JQ FGLKC GS FGLKC GS FGLKC GS FGLKC GS A FTLDK LI'VHDJ.K ESA VHKH UGHA NS IK JGK GWA A 14 IZU 27 & D`IK;K CRK;S FD X.KSK UXJ ESA VKIDK VU; DKSBZ IYKV GS ;K IGYS DHKH JGK GKS A MRRJ & TH UGHA IZU 28 & D`IK;K CRK;S FD 117 X.KSK UXJ] FLFKR PLOT IJ D;K VKIUS DKSBZ FUEKZ.K DJOK;K GS A ;FN GKW RKS CRK;S FDRUK [KPKZ GQVKA MRRJ & ESAUS X.KSK UXJ FLFKR PLOT IJ DKSBZ FUEKZ.K UGHA DJOK;K GS IGYS ESJS }KJK CRK; H XBZ VPY LEIFRR;KSA ESA ESAUS ;G IYKV VKIDKS UGHA CRK ;K FKK A IN VIEW OF ABOVE FACTS, IT IS AN ESTABLISHED FACT T HAT THE APPELLANT DID NOT OWN SO MANY PLOTS IN GANESH NAGAR SO THE QUESTION O F RECEIVING CASH FUNDS IN RESPECT OF THE ALLEDGED 5 PLOTS OF GANESH NAGAR DID NOT ARISE. THUS THE FINDINGS OF THE AUTHORITIES BELOW IN THIS REGARD ARE FACTUALLY INCORRECT AND THE ADDITION SO CONFIRMED ON THE BASI S OF SUCH INCORRECT FACTS DESERVES TO BE DELETED SUMMARILY 5.7 ON THE OTHER HAND, THE LD. DR HAS SUPPORTED THE ORDER OF THE AO. 5.8 WE HAVE HEARD BOTH THE PARTIES. PAGE NO. 1 OF A NNEXURE A-1 IS AVAILABLE AT PAGE 28 OF THE PAPER BOOK FILED BY THE LD. AR. THE LD. CIT(A) HAS REFERRED TO THE FIGURES MENTIONED AT PAGE 1 OF ANNEXURE A-1. THE SUM OF RS. 14,94,500/- HAS BEEN REDUCED FROM THE FIGURE OF RS. 21.70 LACS AND THE BALANCE HAS BEEN MENTIONED AT RS. 6,75,500/- WHILE THE AO ADDED THE FIGURE OF RS. 21.70 LACS AND RS. 14.94 LACS. THUS THE FIGU RES WHICH HAVE BEEN TAKEN BY THE AO IN HIS ORDER IS NOT AT ALL VERIFIABLE FRO M PAGE 1 OF ANNEXURE A-1. BEFORE US, THE LD. AR HAS DRAWN OUR ATTENTION TO TH E STATEMENT RECORDED AT THE TIME OF SEARCH. THE ASSESSEE HAS CLEARLY STATED THAT NO CONSTRUCTION HAS BEEN DONE AT PLOT NO. 117, GANESH NAGAAR, JHOTWARA. THE LD. CIT(A) HAS DRAWN THE CONCLUSION THAT THE ASSESSEE HAS SOLD GAN ESH NAGAR PLOT AFTER THE CONSTRUCTION. THE AO HAS ADDED THE INCOME BY HOLDIN G THAT THE AMOUNTS REPRESENTED AS CASH ADVANCE. AT PAGE 12 OF THE ASSE SSMENT ORDER, THE AO HAS 15 GIVEN THE DETAILS OF THE PROPERTIES WHICH HAVE BEEN SOLD DURING THE ASSESSMENT YEAR 2006-07. THESE ARE THE PROPERTIES M ENTIONED AT SERIAL NO. 12 TO 18 OF THE CHART PREPARED AT PAGE 12 OF THE ASSES SMENT ORDER. THERE IS NO MENTION OF ANY SALE OF PLOTS IN PAGES NO. 23 AND 25 OF ANNEXURE A-25 BECAUSE THE PLOTS ARE REFERRED TO THE PLOTS IN GAN ESH NAGAR VISTHAR. AFTER CONSIDERING THE FACTS ON RECORD, WE FEEL THAT THE L D. CIT(A) WAS NOT JUSTIFIED IN RESTRICTING THE ADDITION TO RS. 16.09 LACS. THE ADDITION CONFIRMED BY THE LD. CIT(A) IS DELETED. HENCE, THE GROUND NO. 4 OF T HE ASSESSEE IS ALLOWED AND GROUND NO. 2 OF THE REVENUE IS DISMISSED. 6.1 THE FIFTH GROUND OF APPEAL OF THE ASSESSEE IS T HAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 1,15,712/- MADE BY THE AO ON ACCOUNT OF ALLEGED UNDISCLOSED PROFIT ON SALE OF S HARES. 6.2 THE AO AS PER PAGES 2 AND 3 OF ANNEXURE A-1 NOT ICED THAT THE ASSESSEE HAS RECEIVED THE PROFIT ON SALE/PURCHASE O F SHARES TO THE EXTENT OF RS. 1,15,712/- DURING THE FINANCIAL YEAR 2005-06 AN D THEREFORE, THE SAME WAS ADDED TO THE INCOME OF THE ASSESSEE. 6.3 BEFORE THE LD. CIT(A), IT WAS SUBMITTED THAT THE ASSESSEE HAS INCURRED LOSS IN SHARES OF RS. 18,190 IN DELIVERY TRANSACTIO NS AND LOSS OF RS. 3,46,339/- IN DERIVATIVES TRANSACTIONS. ACCORDING T O THE LD. CIT(A), THE ASSESSEE HAS NOT BEEN ABLE TO PROVE EITHER BEFORE T HE AO OR BEFORE THE LD. 16 CIT(A) THAT PROFIT ON SALE OF SHARES REFLECTED IN T HE SEIZED PAPER IS ALREADY ACCOUNTED OR INCLUDED IN THE RECORDED TRANSACTIONS. THE LD. CIT(A) THEREFORE, CONFIRMED THE ADDITION. 6.4 BEFORE US, THE LD. AR HAS SUBMITTED THAT ALL TH E SHARES TRADING HAVE BEEN CARRIED OUT THROUGH D-MAT ACCOUNT. THE SALES A ND PURCHASES OF THE SHARES AS RECORDED IN SUCH SHEETS WERE PART OF THE SHARE TRADING AS CARRIED OUT BY THE ASSESSEE DURING THE YEAR FOR WHICH DETAILED P & L A/C WAS FURNISHED SHOWING THEREIN NET LOSS OF RS. 3,46,339/-. 6.5 WE HAVE HEARD BOTH THE PARTIES. WE ARE NOT HAVI NG THE BENEFIT OF THE DETAILS OF THE TRADING ACCOUNT OF SHARES OR COPY OF THE D-MAT ACCOUNT. WE HAVE NOT BEEN MADE AVAILABLE PAGE NO. 2 AND 3 OF ANNEXURE A-1. SUB- CLAUSE (D) OF PROVISO TO SECTION 43(5) HAS BEEN INS ERTED BY FINANCE ACT 2005 W.E.F. 1-04-2006 AND ACCORDING TO THIS THE PROFIT O R LOSS ON DERIVATIVE IS NOT TO BE CONSIDERED AS SPECULATIVE. THUS THE ISSUE OF ADDITION OF RS. 1,15,712/- IS RESTORED BACK ON THE FILE OF THE AO. THE AO WILL TREAT LOSSES IN DERIVATES AS BUSINESS LOSS. BEFORE US, THE ASSESSEE IS AGGRIE VED ONLY AGAINST ADDITION AND THEREFORE, THE LOSS IN RESPECT OF DERIVATIVE T O THE EXTENT OF PROFIT IN SHARES WILL BE ALLOWED TO BE SET OFF WITHOUT CONSID ERING THAT LOSS AS SPECULATIVE LOSS. THUS THE ISSUE OF ADDITION OF RS. 1,15,712/- IS RESTORED BACK ON THE FILE OF THE AO. 17 7.1 THE SIXTH GROUND OF APPEAL OF THE ASSESSEE IS T HAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 59.50 LACS. 7.2 DURING THE YEAR UNDER REFERENCE, THE ASSESSEE H AS SOLD 07 PROPERTIES AT PAGE 12 OF THE ASSESSMENT ORDER. ON THE BASIS OF P AGES 25 AND 23 OF ANNEXURE A-25, THE AO ADOPTED THE SALE CONSIDERATIO N AS REFLECTED IN SUCH PAGES AND EXCESS OF CONSIDERATION SHOWN IN THE SALE HAVE BEEN CONSIDERED AS UNDISCLOSED INCOME. HENCE, THE ADDITION OF RS. 59.5 0 LACS HAS BEEN MADE. 7.3 BEFORE THE LD. CIT(A), THE ASSESSEE HAS STATED THAT THE PAPERS MENTIONED AS PAGE 23 AND 25 OF ANNEXURE A-25 ARE DU MB DOCUMENTS. THE GENERAL EXPLANATIONS ARE THE SAME AS HAVE BEEN GIVE N DURING THE COURSE OF APPELLATE PROCEEDINGS FOR THE ASSESSMENT YEAR 2008- 09. HENCE, SUCH CONTENTIONS ARE NOT BEING REPRODUCED. WE WILL ONLY CONSIDER THE SPECIFIC SUBMISSIONS IN RESPECT OF DIFFERENT PROPERTIES. THE SUBMISSIONS GIVEN BEFORE THE LD. CIT(A) ARE AS UNDER:- A) 66, SHRI RAM NAGAR ALLEGED SALE FOR RS. 21,00,00 0/- AS AGAINST DECLARED SALES AT RS. 9,00,000/- B) 65, SHRI RAM NAGAR ALLEGED SALE FOR RS. 21,00 ,000/- AS AGAINST DECLARED SALES AT RS. 5,00,000/- (I) THE LD AO TOOK THE FIGURE OF DECLARED SALE C ONSIDERATION RS. 5,00,000/- IN RESPECT OF 65 SHRI RAM NAGAR WHER EAS THE PLOT WAS SOLD TO KRISHNA DEVI KHANDELWAL AND PLOT TO ASHA DEVI. TH E TOTAL SALE CONSIDERATION RECEIVED BY THE ASSESSEE WAS 5,00,000+5,00,000= RS. 10,00,000/- AGAINST WHICH THE LD AO TOOK THE DECLARED SALES AT RS. 5,00,000/- (II) THE SEIZED PAPER SHOWS THE ROUGH WORKING IN RESPECT OF RAM NAGAR PLOT AS UNDER:- 18 RAM NAGAR 21 X 2 SOLD RAM NAGAR 21 X 1 THEREFORE THERE IS NO ENTRY ON THE SEIZED PAPER I N RESPECT OF PLOT NO. 65 AND 66 SHREE RAM NAGAR. FIGURE 21 DENOTES TH E ESTIMATED VALUE OF THE COMPLETELY FINISHED CONSTRUCTED HOUSE. IN THIS CASE , THE ASSESSEE SOLD THE PLOT UNFINISHED HOUSE. THE FLOORING, PLASTER, DOORS & WI NDOWS AND PAINT WORK WAS NOT DONE BY THE ASSESSEE. FURTHER, THE LD AO FAILED TO APPRECIATE THAT THE WORD SOLD IS MENTIONED AGAINST ONLY ONE PLOT. THEREFORE, ADDI TION ON ACCOUNT OF SUPPRESSED SALE IN RESPECT OF THE PLOT NO 65 & 66 RAM NAGAR WA S MADE ON SURMISES AND CONJECTURES. C) A-386, TARA NAGAR ALLEGED SALE FOR RS. 18,00, 000/- AS AGAINST DECLARED SALES AT RS. 8,50,000/- (I) THE LD AO TOOK THE FIGURE OF DECLARED SALE C ONSIDERATION RS. 8,00,000/- IN RESPECT OF A-386 TARA NAGAR WHERE AS THIS PLOT WAS SOLD TO THREE PARTIES NAMELY AS UNDER:- (I) RISHAB GUPTA 850000.00 (II) PAPPU SINGH 900000.00 (III) SURENDRA SHARMA 900000.00 ======= TOTAL SALE CONSIDERATION RECEIVED 26,50,000 ======= (PB PAGE 14 & 18) THIS SHOWS THAT ONLY ROUGH ESTIMATED FIGURE IS ME NTIONED ON THE IMPUGNED SEIZED DOCUMENT. THE ACTUAL SALE CONSIDERA TION OF THE PLOT WAS 26,50,000/- AS AGAINST SO CALLED SALE CONSIDERATION OF RS. 18,00,000/- RECORDED ON THIS SEIZED PAPER. D) 123, BAL VIHAR ALLEGED SALE FOR RS. 11,00,000/ - AS AGAINST DECLARED SALES AT RS. 5,00,000/- (I) THE LD AO TOOK THE FIGURE OF DECLARED SALE C ONSIDERATION RS. 5,00,000/- IN RESPECT OF 123 BAL VIHAR WHEREAS THE ASSESSEE SOLD PLOT TO PURSHOTTAM GHYA AND PLOT TO PUSPA DEVI. THE TOTAL SALE CONSIDERATION RECEIVED BY THE ASSESSEE WAS 5,00,000+ 3,50,000= RS. 8,50,00 0/- AGAINST WHICH THE LD AO TOOK THE DECLARED SALES AT RS. 5,00,000/- FURTHER FIGURE 11 DENOTES THE ESTIMATED VALUE OF THE COMPLETELY FINISHED CONSTRUCTED HOUSE. IN THIS CASE, THE ASSES SEE SOLD THE PLOT UNFINISHED HOUSE. THE WORK RELATING TO DOORS & WINDOWS AND PAI NT WAS NOT DONE BY THE ASSESSEE. THEREFORE, ADDITION ON ACCOUNT OF SUPPRES SED SALE WAS MADE ON SURMISES AND CONJECTURES. E) 207, SHYAMPURI ALLEGED SALE FOR RS. 35,00,000 /- AS AGAINST DECLARED SALES AT RS. 25,00,000/- 19 FURTHER FIGURE 35 DENOTES THE ESTIMATED VALUE OF T HE COMPLETELY FINISHED CONSTRUCTED HOUSE. IN THIS CASE, THE ASSESSEE SOLD THE PLOT UNFINISHED HOUSE. THEREFORE, ADDITION ON ACCOUNT OF SUPPRESSED SALE W AS MADE ON SURMISES AND CONJECTURES. F) 122, BAL VIHAR ALLEGED SALE FOR RS. 11,00,00 0/- AS AGAINST DECLARED SALES AT RS. 8,00,000/- (I) THE LD AO TOOK THE FIGURE OF DECLARED SALE C ONSIDERATION RS. 8,00,000/- IN RESPECT OF 122 BAL VIHAR WHEREAS THE ASSESSEE SOLD PART OF THE PLOT TO OM PRAKASH BUMB. THE TOTAL AREA OF THE PLOT WAS 350 SY AND THE ASSESSEE SOLD ONLY 155.55 SY TO SHRI OM PRAKASH BUMB. THE TO TAL COST OF THE PLOT WAS 884780/- FOR 350 SY LAND. THE ASSESSEE APPORTIONED THE COST OF LAND RS. 393221/- FOR 155.55 SY LAND AGAINST THIS SALE. THEREFORE, TH E LAND COSTING TO RS. 4,91,559/- WAS IN STOCK OF THE ASSESSEE. FURTHER FIGURE 11 DENOTES THE ESTIMATED VALUE OF THE COMPLETELY FINISHED CONSTRUCTED HOUSE. THE ASSESSEE SOLD PART OF THE LA ND WITH CONSTRUCTION 900 SQ FT AREA. THEREFORE, NO ADDITION ON ACCOUNT OF SUPPRESS ED SALE CAN BE MADE. G) 121, BAL VIHAR ALLEGED SALE FOR RS. 11,00,000/ - AS AGAINST DECLARED SALES AT RS. 8,00,000/- (I) THE LD AO TOOK THE FIGURE OF DECLARED SALE CO NSIDERATION RS. 8,00,000/- IN RESPECT OF 121 BAL VIHAR WHEREAS THE ASSESSEE SOLD PART OF THE PLOT TO VIMAL KHANDELWAL. THE TOTAL AREA OF THE PLOT WAS 3 50 SY AND THE ASSESSEE SOLD ONLY 155.55 SY TO SHRI OM PRAKASH BUMB. THE TOTAL C OST OF THE PLOT WAS 884780/- FOR 350 SY LAND. THE ASSESSEE APPORTIONED THE COST OF LAND RS. 393221/- FOR 155.55 SY LAND AGAINST THIS SALE. THEREFORE, TH E LAND COSTING TO RS. 4,91,559/- WAS IN STOCK OF THE ASSESSEE. FURTHER FIGURE 11 DENOTES THE ESTIMATED VALUE OF THE COMPLETELY FINISHED CONSTRUCTED HOUSE. THE ASSESSEE SOLD PART OF THE LA ND WITH CONSTRUCTION 900 SQ FT AREA. THEREFORE, NO ADDITION ON ACCOUNT OF SUPPRESS ED SALE CAN BE MADE. OTHER LEGAL SUBMISSIONS ARE TAKEN ON SIMILAR LINES AS TAKEN IN APPEAL FOR A.Y 2005-06. 7.4 THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSION S UPHELD THE ADDITION OF RS. 59.50 LACS AFTER OBSERVING AS UNDER:- 8.3 I HAVE CONSIDERED THE ARGUMENT OF THE A.R AND HAVE PERUSED THE ASSESSMENT ORDER AND RELEV ANT RECORD . 20 THE ISSUE OF ADDITION ON ACCOUNT OF SUPPRESSED SALE AS EVIDENT FROM PAGE 23 AND 25 OF ANN.A-25 HAS BEEN DISCUSSED IN DE TAIL IN A.Y 2005-06 IN APPEAL NO. 570/09-10 IN ORDER DATED 29.1 2.2010. AS ALREADY DISCUSSED IN DETAIL IN THE APPEAL ORDER FOR A.Y 2005-06 IN APPEAL NO. 570/09-10 IN THE CASE OF APPELLANT HIMSE LF, THE SUBJECT PAPER NAMELY PAGE 23 & 25 OF ANN.A-25 ARE NOT AT AL L MUTE OR AMBIGUOUS OR ROUGH DOCUMENT. IT IS NOT DUMB DOCUMEN T. THE SUBJECT PAPERS ARE LOUDLY SPEAKING ABOUT THE VARIOUS PLOTS OF THE APPELLANT IN VARIOUS COLONIES . THE AMOUNT OF SALE VALUE IS ALSO MENTIONED IN CODED FORM. THE WORD SOLD HAS ALSO BEEN MENTIONED AGAINST MANY PLOTS , REFLECTING THAT THOSE PLOTS HAVE ALREADY BEEN SOL D EARLIER TO THE DAY WHEN THESE JOTTINGS WERE MADE ON PAGE 23 AND PAGE 25 OF ANNEXURE A-25. IT IS EVIDENT THAT BOTH THESE PAGES HAVE BEEN WRITTEN AT DIFFERENT POINT OF TIME. I T HAS BEEN HELD IN THE APPEAL ORDER FOR A.Y 2005-06 THAT THESE DOCUMENTS CLEARLY REFLECT THE SALE VALUE OF THE VARIOUS PLOTS HELD BY THE VARIOUS FAMI LY MEMBERS OF THE APPELLANT GROUP. FOR THE REASONS DISCUSSED IN DETAI L IN THE APPEAL ORDER FOR A.Y 2005-06, IT IS HELD THAT THESE TWO DOCUMENT S REFLECTS THE ACTUAL SALE VALUE OF THE VARIOUS PLOTS, AS AGAINST THE APPARENT CONSIDERATION SHOWN BY THE APPELLANT IN ITS PREPARE D BOOKS OF ACCOUNTS. THE SPECIFIC DISCUSSION ABOUT VARIOUS PLO TS IS AS UNDER:- I) THE A.O. HAS RIGHTLY TAKEN SHREE RAM NAGAR PLOT AT RS. 21 LAKHS AS REFLECTED IN PAGE 25 OF ANN. A-2 5, WHICH IS AS BELOW:- RAM NAGAR - 21X2 SHREE RAM NAGAR HAS BEEN WRITTEN IN SHORT ON THIS LOOSE PAPER AS RAM NAGAR. MOREOVER, IT IS EVIDENT THAT THE AP PELLANT HAS SOLD SHREE RAM NAGAR PLOT DURING THE YEAR AND HENCE NON- MENTION OF WORD SOLD AGAINST THIS ENTRY IS NOT OF MUCH RELEVANCE. I N ANY CASE, THERE IS ONE MORE ENTRY ON SAME PAGE, WHICH IS AS BELOW:- SOLD RAM NAGAR = 21X1 II) REGARDING TARA NAGAR D COLONY, THE ENTRY ON THE PAGE REFLECTS AS BELOW TARA NAGAR D - 26X 2 21 THE ARGUMENT OF THE A.R THAT THIS PLOT HAS BEEN SO LD TO THREE PARTIES AND TOTAL SALE CONSIDERATION IS RS. 26.50 L AKHS IS LACKING ANY MERIT, AS IT IS EVIDENT THAT THE APPELLANT HAS CONS TRUCTED THREE UNITS ON SAME PLOT AND HAS SOLD EACH UNIT FOR RS. 18 LAKHS, WHICH IS QUITE EVIDENT FROM PAGE 25 OF ANN. A-25 III) IN RESPECT OF 123, BAL VIHAR, THE A.O. IS JU STIFIED IN TAKING THE VALUE OF HALF PLOT AND THE CONSTRUCTION OVER IT AT RS. 11 LAKHS AND ARGUMENT OF THE A.R. IN THIS REGARD IS RE JECTED THAT THE RECORDED SALE VALUE OF TOTAL PLOT BEING RS. 8.5 LAK HS BE CONSIDERED. SIMILARLY A.O. IS JUSTIFIED IN TAKING SALE VALUE OF PART OF 122 BAL VIHAR PLOT AND PART OF 121 BAL VIHAR PLOT AT RS. 11 LAKHS EACH AGAINST THE DECLARED SALE OF RS. 8 LAKHS EACH AND ARGUMENT OF T HE A.R IS REJECTED. IV) COMING TO PLOT NO. 207, SHYAMPURI, THIS ENTRY IS MENTIONED ON 4 TH WRITTEN LINE ON PAGE 25 OF ANN. A-25, WHICH IS AS BELOW:- SOLD SHYAMPURI 207 = 35 IN VIEW OF THE CLEAR CUT NARRATION, A.O IS JUSTIF IED IN TAKING THE SALE VALUE OF RS. 35 LAKH AGAINST DECLAR ED SALE AT RS. 25 LAKH. 8.4 IN TOTALITY, ENTIRE ADDITION OF RS. 59,50,00 0/- SO MADE BY THE A.O ON ACCOUNT OF SUPPRESSED/ UNACCOUNT ED SALE CONSIDERATION IS HEREBY SUSTAINED. 7.5 BEFORE US, THE LD. AR HAS FILED THE FOLLOWING S UBMISSIONS IN RESPECT OF DIFFERENT SPECIFIC PROPERTIES. (I) 66, SHRI RAM NAGAR; RS.12,00,000/- ON CAREFUL STUDY OF THE JOTTINGS ON THESE PAPERS, YOUR HONORS WOULD NOTE TH AT THERE IS NO SPECIFIC MENTION OF ANY SUCH PROPERTY KNOWN AS 66, SHRI RAM NAGAR IN SUCH JOTTINGS. IN ABSENCE OF SPECIFIC MENTION O F PLOT NO.66, NO ADVERSE INFERENCE COULD BE DRAWN ON THE B ASIS OF SUCH GENERAL MENTION OF SHRI RAM NAGAR WITH PRE-FIX DIGI T OF 64 AND 22 SUFFIX DIGIT OF 50. APPARENTLY THE DIGITS MENTIONE D ON THE PRE- FIX AND SUFFIX OF THE SCHEME CONVEYED NO MEANING AT ALL. IT IS NOT UNDERSTOOD AS TO HOW THE AUTHORITIES BELOW COUL D CONCLUDE ON THE BASIS OF SUCH DIGITS THAT SALES TO THE EXTENT OF RS. 12 LAC WERE SUPPRESSED. AGAIN AT TWO MORE PLACES, RAM NAGAR IS MENTIONED WHICH COULD NOT BE CONNECTED WITH SHRI RAM NAGAR. AGAINST SUCH SCHEMES THERE IS FOLLOWING MENTION: RAM NAGAR- 21X2 AND AT SECOND PLACE IT IS SOLD-RAM NAGAR- 21X1=15X4. FROM THE ABOVE NARRATION, IT WOULD NOTED AT FIRST P LACE THERE IS NO MENTION OF SOLD WHEREAS AT SECOND PLACE SOLD WORD IS MENTIONED. THUS ALL THESE DIGITS ARE AMBIGUOUS CONVEYING NO ME ANING AT ALL. IN FACT THIS PLOT WAS PURCHASED IN APRIL, 2004 FOR RS. 3,00,000/- AND WAS SOLD IN APRIL. 2005 FOR RS. 9,00,000/- AFTE R CONSTRUCTION. NOW IT IS FOR CONSIDERATION AS TO WHETHER, A PLOT P URCHASED FOR RS. 3,00,000/- ABOUT ONE YEARS BACK COULD FETCH THE PRI CE OF RS. 21 LAC AS TAKEN BY THE AO. OBVIOUSLY, THE FIGURES AS TAKEN BY THE AO ARE INCORRECT AND WITHOUT ANY BASIS ON THE FACE OF SUCH DOCUMENTED EVIDENCES (II) 65, SHRI RAM NAGAR; RS.12,00,000/- ON CAREFUL STUDY OF THE JOTTINGS ON THESE PAPERS, YOUR HONORS WOULD NOTE TH AT THERE IS NO SPECIFIC MENTION OF ANY SUCH PROPERTY KNOWN AS 65, SHRI RAM NAGAR IN SUCH JOTTINGS. IN ABSENCE OF SPECIFIC MENTION O F PLOT NO.65, NO ADVERSE INFERENCE COULD BE DRAWN ON THE B ASIS OF SUCH GENERAL MENTION OF SHRI RAM NAGAR WITH PRE-FIX DIGI T OF 64 AND SUFFIX DIGIT OF 50. APPARENTLY THE DIGITS MENTIONE D ON THE PRE- FIX AND SUFFIX OF THE SCHEME CONVEYED NO MEANING AT ALL. IT IS NOT UNDERSTOOD AS TO HOW THE AUTHORITIES BELOW COUL D CONCLUDE ON THE BASIS OF SUCH DIGITS THAT SALES TO THE EXTENT OF RS. 12 LAC WERE SUPPRESSED. AGAIN AT TWO MORE PLACES, RAM NAGAR IS MENTIONED WHICH COULD NOT BE CONNECTED WITH SHRI RAM NAGAR. AGAINST SUCH SCHEMES THERE IS FOLLOWING MENTION: RAM NAGAR- 21X2 AND AT SECOND PLACE IT IS SOLD-RAM NAGAR- 21X1=15X4. FROM THE ABOVE NARRATION, IT WOULD NOTED AT FIRST P LACE THERE IS NO MENTION OF SOLD WHEREAS AT SECOND PLACE SOLD WORD IS MENTIONED. THUS ALL THESE DIGITS ARE AMBIGUOUS CONVEYING NO ME ANING AT ALL. IN FACT THIS PLOT WAS PURCHASED IN APRIL, 2004 FOR RS. 3,00,000/- AND WAS SUB-DIVIDED IN TWO PARTS. ONE PART WAS SOLD FOR RS. 5,00,000/- IN MAY, 2005 AND SECOND PART WAS SOLD FO R RS. 5,00,000/- IN SEPTEMBER, 2005 AFTER CONSTRUCTION. F URTHER THE LEARNED AO HAD ALSO COMMITTED A TACTICAL MISTAKE BY TAKING ONLY ONE PART OF THE SAID PLOT INTO ACCOUNT TO WORK-OUT THE SUPPRESSED SALES OF RS.16,00,000/- AND IGNORED THE SALE OF SEC OND PART. THUS THE AMOUNT OF SUPPRESSED SALE AS TAKEN BY AO IS ON WRONG 23 WORKING. NOW IT IS FOR CONSIDERATION AS TO WHETHER, A PLOT PURCHASED FOR RS. 3,00,000/- ABOUT ONE YEARS BACK C OULD FETCH THE PRICE OF RS. 21 LAC AS TAKEN BY THE AO. OBVIOUSLY, THE FIGURES AS TAKEN BY THE AO ARE INCORRECT AND WITHOUT ANY BASIS ON THE FACE OF SUCH DOCUMENTED EVIDENCES. (III) A-386,TARANAGAR; RS.9,50,000/- ON CAREFUL STUDY OF THE JOTTINGS ON THESE PAPERS, YOUR HONORS WOULD NOTE THAT THERE IS NO SPECIFIC MENTION OF ANY SUCH PROPERTY KNOWN AS A-386,TARANAGAR IN SUCH JOTTINGS. IN ABSENCE OF ANY SPECIFIC MENTION OF THE PROPERTY, NO ADVERSE INFERENCE COULD BE DRAWN. FURTHER IT WOULD BE NOTED THAT THERE IS MENTION OF TARANAGAR : WITH THE DIGITS OF 18X4. IN THIS REGARD, IT MAY BE POINTED OUT THAT APPELLANT DID NO W OWN 4 PLOTS IN TARANAGAR SCHEME. THUS THE DIGITS AS MENTIONED AGAI NST SUCH SCHEME ARE APPARENTLY INCORRECT. IN FACT THE SAID PLOT WAS PURCHASED IN AUGUST, 2004 FOR RS. 4,00,000/- AND WAS SUB- DIVIDED IN THREE PARTS . ONE PART WAS SOLD FOR RS. 8,50,000/- IN MAY, 2005. SECOND PART WAS SO LD FOR RS. 9,00,000/- IN MAY, 2005 AND THIRD PART WAS SOLD FOR RS. 9,00,000/- IN JUNE, 2005 AFTER CONSTRUCTION OF HOUSES. TOTAL S ALES CONSIDERATION OF THIS PLOT WAS RS. 26,50,000/- AND NOT RS. 8,50,000/- AS TAKEN BY THE AO. FURTHER THE LEARNED AO HAD ALSO COMMITTED A TACTICAL MISTAKE BY TAKING ONLY ONE PART OF THE SAID PLOT (WHICH WAS SOLD FOR RS. 8,50,000/-) INTO ACCOU NT TO WORK-OUT THE SUPPRESSED SALES OF RS.9,50,000/- AND IGNORED T HE SALE OF SECOND AND THIRD PART. THUS THE AMOUNT OF SUPPRESSE D SALE AS TAKEN BY AO IS ON WRONG WORKING. ACTUALLY THERE WERE NO S UPPRESSED SALES AT ALL AS THE PLOT WAS SOLD MORE THAN THE PRI CE TAKEN BY THE AO. ON THE FACE OF SUCH DOCUMENTARY EVIDENCES, THE WORKING OF THE SUPPRESSED SALES IS APPARENTLY INCORRECT AND DE SERVES TO BE DELETED SUMMARILY. (IV) 123, BAL VIHAR; RS.6,00,000/- AGAIN THERE IS NO SPECIFIC MENTION OF THIS PROPERTY ON THE SAID SHEETS. IN ABSENCE OF SPECIFIC MENTION OF THIS PROPERTY I.E. 123 NO ADVERSE INFERENCE IS CALLED FOR. THERE IS MENTION OF THE WORD BAL VIHAR COLONY AT ONE P LACE ON SHEET OF 2006 WITH THE FOLLOWING NARRATION 11X4.WHICH CON VEYED NO MEANING AT ALL AS THE APPELLANT DID NEVER OWN 4 PLO TS IN THE SAID NAGAR .. THE AO HAD RELATED THIS JOTTING TO PLOT NO. 123 TO WORK OUT THE SUPPRESSION OF SALES WITHOUT ANY BASIS AND REAS ON. IN FACT PLOT NO. 123 IN THE SAID COLONY WAS PURCH ASED IN MAY, 2005 AND SUBDIVIDED IN TWO EQUAL PARTS;. ONE PART WAS SOLD BY THE APPELLANT FOR RS.5,00,000/- AND THE SECOND PART WA S SOLD FOR RS. 3,50,000/- IN THE MONTH NOV.2005 I.E. AFTER 5 MONTH S. HOWEVER, 24 THE LD. AO HAD OVER-LOOKED THE FACT OF SUB-DIVISION AND MADE ADDITION OF RS. 6 LAC BY TAKING THE RECORDED SALE C ONSIDERATION AT RS. 5 LAC. FACTUALLY SUCH FIGURES ARE INCORRECT AS THE RECORDE D SALE CONSIDERATION SHOWN FOR THIS PLOT IS RS.8,50,0 00/- AND NOT RS.5,00,000/- AS TAKEN BY THE AO TO WORK OUT THE SUPPRESSED SALE S. THUS FACTUALLY ALSO SUCH WORKING IS INCORRECT. ON T HE FACE OF SUCH DOCUMENTARY EVIDENCES, THE WORKING OF THE SUPPRESSE D SALES IS APPARENTLY INCORRECT AND DESERVES TO BE DELETED SUM MARILY. (V) 207, SHYAMPURI: RS.10,00,000/-: APPARENTLY THE JOTTING AS APPEARING IS IRRELEVANT AND IMMATERIAL AS THERE WAS NO LOGIC OR REASON FOR THE APPELLANT TO MAKE SUCH JOTTING ON TH E COMPUTERIZED SHEETS OF F.Y. 2006 & 2007 WHEN THE PROPERTY UND ER CONSIDERATION WAS SOLD LONG BACK. THUS THE JOTTING REGARDING THIS PLOT DOES NOT HOLD GOOD BEING IRRELEVANT AND IMMATE RIAL. (VI) 122,BAL VIHAR : RS.3,00,000 /-: AGAIN THERE IS NO SPECIFIC MENTION OF THIS PROPERTY ON THE SAID SHEETS. IN ABSENCE OF SPECIFIC MENTION OF THIS PROPERTY I.E. 122 NO ADVERSE INFERENCE IS CALLED FOR. THERE IS MENTION OF THE WORD BAL VIHAR COLONY AT ONE P LACE ON SHEET OF 2006 WITH THE FOLLOWING NARRATION 11X4.WHICH CON VEYED NO MEANING AT ALL AS THE APPELLANT DID NEVER OWN 4 PLO TS IN THE SAID NAGAR .. THE AO HAD RELATED THIS JOTTING TO PLOT NO. 122 TO WORK OUT THE SUPPRESSION OF SALES WITHOUT ANY BASIS AND REAS ON. IN FACT PLOT NO. 122 IN THE SAID COLONY WAS SUBDIVIDED IN TWO PARTS. ONE PART MEASURING 155.55 SQ YARDS OUT OF TOTAL AREA OF 350 SQ. YARDS WAS SOLD BY THE APPELLANT FOR RS.8,00,000/- DURING THE YEAR AND THE REMAINING PART OF 194.45 SQ. YARDS IS LYING IN THE CLOSING STOCKS. HOWEVER, THE LD. AO HAD OVER-LOOKED THE FACT OF SUB-DIVISION AND MADE ADDITION OF RS. 3 LAC TAKING THE PART SALE OF THE PLOT AS SALE OF THE FULL PLOT MEASURING 350 SQ. YARDS. THUS WORKING OF THE FIGURES OF THE SUPPRESSED SALE IS FACTUALLY INCORRECT. ON T HE FACE OF SUCH DOCUMENTARY EVIDENCES, THE WORKING OF THE SUPPRESSE D SALES IS APPARENTLY INCORRECT AND DESERVES TO BE DELETED SUM MARILY. (VII) 121, BAL VIHAR: RS.3,00,000/-: AGAIN THERE IS NO SPECIFIC MENTION OF THIS PROPERTY ON THE SAID SHEETS. IN ABSENCE OF SPECIFIC MENTION OF THIS PROPERTY I.E. 121 NO ADVERSE INFERENCE IS CALLED FOR. THERE IS MENTION OF THE WORD BAL VIHAR COLONY AT ONE P LACE ON SHEET OF 2006 WITH THE FOLLOWING NARRATION 11X4.WHICH CON VEYED NO MEANING AT ALL AS THE APPELLANT DID NEVER OWN 4 PLO TS IN THE SAID NAGAR .. THE AO HAD RELATED THIS JOTTING TO PLOT NO. 122 TO WORK OUT THE SUPPRESSION OF SALES WITHOUT ANY BASIS AND REAS ON. IN FACT PLOT NO. 121 IN THE SAID COLONY WAS SUBDIVIDED IN TWO PARTS. ONE PART MEASURING 155.55 SQ YARDS OUT OF TOTAL AREA OF 350 SQ. YARDS WAS SOLD BY THE APPELLANT FOR RS.8,00,000/- DURING THE YEAR AND THE 25 REMAINING PART OF 194.45 SQ. YARDS IS LYING IN THE CLOSING STOCKS. HOWEVER, THE LD. AO HAD OVER-LOOKED THE FACT OF SUB-DIVISION AND MADE ADDITION OF RS. 3 LAC TAKING THE PART SALE OF THE PLOT AS SALE OF THE FULL PLOT MEASURING 350 SQ. YARDS. THUS WORKING OF THE FIGURES OF THE SUPPRESSED SALE IS FACTUALLY INCORRECT. ON T HE FACE OF SUCH DOCUMENTARY EVIDENCES, THE WORKING OF THE SUPPRESSE D SALES IS APPARENTLY INCORRECT AND DESERVES TO BE DELETED SUM MARILY. 7.6 IN ADDITION TO THIS SPECIFIC CONTENTIONS IN RES PECT OF DIFFERENT PROPERTIES, THE LD. AR HAS REITERATED THE GENERAL C ONTENTIONS AS RAISED DURING THE COURSE OF APPELLATE PROCEEDINGS FOR THE ASSESSM ENT YEAR 2008-09 AND STATED THAT THESE PAPERS ARE THE DUMB DOCUMENTS AND NO ADDITION CAN BE MADE ON THE BASIS OF SUCH DUMB DOCUMENTS. 7.7 ON THE OTHER HAND, THE LD. DR REITERATED THE CO NTENTIONS WHICH HAVE BEEN RAISED BY HIM WHILE ARGUING THE APPEALS FOR TH E ASSESSMENT YEARS 2008- 09 AND 2007-08. 7.8 WE HAVE HEARD BOTH THE PARTIES. THE AO HAS ADOP TED THE SALE CONSIDERATION OF RS. 21.00 LACS EACH FOR PROPERTIES AT 65 SHRI RAM NAGAR AND 66 SHRI RAM NAGAR. IT IS TRUE THAT AT PAGE 25 OF AN NEXURE A-25, THE FOLLOWING NOTE IS MENTIONED. RAM NAGAR 21 X 2 THE WORD SOLD HAS NOT BEEN MENTIONED AGAINST THE NOTING MENTIONED ABOVE. IT ALSO DOES NOT CONTAIN THAT THE ASSESSEE H AS RECEIVED A SUM OF RS. 21.00 LACS EACH FOR TWO PLOTS NAMELY 65 SHRI RAM NA GAR AND 66 SHRI RAM 26 NAGA. THE PROPERTIES HAVE BEEN SOLD THROUGH REGISTE RED SALE DEED. THE ONUS WAS HEAVILY ON THE REVENUE TO ESTABLISH THAT THE AS SESSEE HAS RECEIVED THE CONSIDERATION IN EXCESS OF THE CONSIDERATION SHOWN IN THE SALE DEED. THE ASSESSEE HAS GIVEN AN EXPLANATION THAT THE WORD 21 IS MENTIONED FOR THE SALE OF FINISHED HOUSE WHILE THE ASSESSEE HAS NOT S OLD THE FINISHED HOUSE . ONCE THE ASSESSEE HAS GIVEN AN EXPLANATION THEN IT WAS THE DUTY OF THE AO TO HAVE EXAMINED IT. THE AO SHOULD HAVE COLLECTED THE EVIDENCE FOR MAKING THE ADDITION. HENCE, THE ADDITION ON ACCOUNT OF DI FFERENCE IN SALE CONSIDERATION TO THE EXTENT OF RS. 28.00 LACS IN RE SPECT OF THESE PLOTS IS DELETED. 7.9 THE NEXT PROPERTY IS A-386, TARA NAGAR. AGAIN O N PAGE 25 OF ANNEXURE A-25, THE NOTING IS AS UNDER:- TARA NAGAR 26 X 2 THE WORD SOLD IS ALSO NOT MENTIONED. AT PAGE 25 OF ANNEXURE A-25, FOLLOWING NOTING IS ALSO THERE. SOLD TARA NAGAR 18 X 4 THE ASSESSEE HAS GIVEN THE EXPLANATION THAT THE PLO T PURCHASED IN TARA NAGAR WAS SUBDIVIDED IN THREE PARTS AND THESE THREE PLOTS WERE SOLD FOR RS. 26.50 LACS. THE AO HAS ADOPTED THE SALE CONSIDERATION AT RS. 18.00 LACS AS AGAINST 27 CONSIDERATION OF RS. 8.50 LACS. IT MEANS THAT THERE HAS BEEN NO SUPPRESSED SALE IN RESPECT OF THE PLOT. HENCE, THE ADDITION O F RS. 9.50 LACS IS DELETED. 7.10 THE ASSESSEE HAS SOLD THE PROPERTY AT 123 BAL VIHAR. THE AO HAS ADOPTED THE SALE CONSIDERATION AT RS. 11.00 LACS AS AGAINST RS. 5.00 LACS SHOWN IN THE SALE CONSIDERATION. THERE IS NO MENTI ON OF THIS PROPERTY AT PAGES 23 AND 25 OF ANNEXURE A-25. THE ASSESSEE IN H IS EXPLANATION HAS CONTENDED THAT PLOT WAS SUBDIVIDED IN TWO EQUAL PAR TS. THE SALE CONSIDERATION FOR BOTH THE PLOTS IS RS. 8.50 LACS A ND NOT RS. 5.00 LACS. SINCE THIS PROPERTY IS NOT MENTIONED IN PAGES 23 AND 25 O F ANNEXURE A-25, THEREFORE, IT WAS NOT A CASE OF MAKING ADDITION. HE NCE THE ADDITION OF RS. 6.00 IS DELETED. 7.11 THE ASSESSEE HAS SOLD THE PROPERTY AT 207. SHY AMPURI AND THE AO HAS ADOPTED THE SALE CONSIDERATION AT RS. 35.00 LACS AS AGAINST RS. 25.00 LACS SHOWN IN THE SALE DEED. IT IS TRUE THAT FOLLOWING N OTING IS AVAILABLE AT PAGE 25 OF ANNEXURE A-25. SOLD SHYAMPURI 207 = 35 THE NOTING IS NOT A CONCLUSIVE EVIDENCE TO HOLD THA T THE CONSIDERATION RECEIVED WAS RS. 35.00 LACS. THE AO HAS NOT COLLECT ED ANY EVIDENCE TO ESTABLISH THAT THE ASSESSEE HAS RECEIVED THE CONSID ERATION OVER AND ABOVE THE CONSIDERATION SHOWN IN THE SALE DEED. WE HAVE ALREA DY HELD WHILE DISPOSING 28 OF THE APPEAL FOR THE ASSESSMENT YEAR 2008-09 THAT THE ADDITION IN EXCESS OF SALE CONSIDERATION SHOWN IS TO BE ESTABLISHED BY TH E AO. THE AO HAS NOT COLLECTED ANY EVIDENCE. THUS THE AO WAS NOT JUSTIFI ED IN MAKING THE ADDITION OF RS. 10.00 LACS. THUS THE ADDITION OF RS . 10.00 LACS IS DELETED. 7.12 THE ASSESSEE HAS SOLD TWO PLOTS AT 122 AND 121 BAL VIHAR AND THE CONSIDERATION AS ADOPTED BY THE AO IS AT RS. 11.00 LACS EACH AS AGAINST RS. 8.00 LACS SHOWN IN THE SALE DEED. THE ASSESSEE HAS SUBMITTED THAT THE PLOT NO. 122 WAS SUBDIVIDED INTO TWO PARTS. ONE PART MEASURI NG 155.5 SQ. YARD, OUT OF TOTAL AREA OF 350 SQ. YARD, HAS BEEN SOLD FOR RS . 8.00 LACS. THE BALANCE WAS LYING IN THE CLOSING STOCK. ACCORDING TO THE AS SESSEE , THE AO HAS OVERLOOKED THE FACT OF SUB-DIVISION. SIMILAR IS TH E POSITION IN RESPECT OF PLOT AT 121 BAL VIHAR. PAGE 25 OF ANNEXURE A-25, CONTAIN ING THE COMPUTER SHEET WHICH SHOWED THE PROPERTY OF 350 SQ. YARD AS ON 31- 03-06. THE PLOT NO. 122A BAL VIHAR IS SHOWN AT 155.55 SQ. YARD. THERE I S NO NOTING IN RESPECT OF BAL VIHAR BELOW THE COMPUTER SHEET WHICH CONTAI NS THE ENTRY IN THE HANDWRITING. THUS THERE IS NO EVIDENCE OF ADDITION MADE BY THE AO IN RESPECT OF THE PROPERTIES AT BAL VIHAR. WE THEREFO RE, HOLD THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS. 59.50 LACS. 8.1 THE SEVENTH GROUND OF APPEAL OF THE ASSESSEE IS THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 4,27,400/- OUT OF ADDITION OF RS. 29 69.17 LACS MADE BY THE AO ON ACCOUNT OF UNEXPLAINE D CASH CREDIT FROM VARIOUS PERSONS BY APPLYING THE PROVISIONS OF SECTI ON 68 OF THE ACT. 8.2 THE REVENUE IN GROUND NO. 4 IS ALSO AGGRIEVED A GAINST DELETION OF ADDITION OF RS. 92,14, 242/- OUT OF ADDITION OF RS. 96,41,642/-. 8.3 THE AO HAS MADE THE ADDITION OF RS. 69,17,400/- U/S 68 OF THE ACT. 8.4 BEFORE THE LD. CIT(A), THE ASSESSEE HAS FILED A DDITIONAL EVIDENCE. AFTER CONSIDERING THE ADDITIONAL EVIDENCE THE LD. C IT(A) HAS REDUCED THE ADDITION TO RS. 4,27 400/-. HENCE THE LD. CIT(A) HA S RIGHTLY REDUCED THE ADDITION ON THE BASIS OF ADDITIONAL EVIDENCES. 8.5 WE HAVE HEARD BOTH THE PARTIES. THE FACTS IN TH IS CASE ARE SIMILAR TO THE FACTS AS CONSIDERED BY US WHILE DECIDING THE AP PEAL IN THE CASE OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2008-08. FOLLOWING OUR FINDING, WE HOLD THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS. 4,27,400/-. 9.1 IN GROUND NO. 6, THE REVENUE IS AGGRIEVED AGAIN ST ADMISSION OF ADDITIONAL EVIDENCE. 9.2 WE HAD ALREADY HELD WHILE DECIDING THE APPEALS OF THE ASSESSEE FOR THE ASSESSMENT YEAR2008-09 AND 2008-07 THAT THE LD. CIT (A) WAS JUSTIFIED IN ACCEPTING THE ADDITIONAL EVIDENCE. HENCE, GROUND NO S. 4 AND 6 OF THE REVENUE ARE DISMISSED WHILE GROUND NO. 7 OF THE ASS ESSEE IS ALLOWED. 30 10.1 THE 8 TH GROUND OF APPEAL OF THE ASSESSEE IS THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF RS. 20,000/ - OUT OF ADDITION OF RS. 58,100/- MADE BY THE AO ON ACCOUNT OF PROFIT ON SA LE OF ELECTRONIC ITEMS. 10.2 THE REVENUE IN GROUND NO. 5 IS AGGRIEVED IN RE DUCING THE ADDITION TO RS. 20,000/- AS AGAINST RS. 58,100/- MADE BY THE AO . 10.3 THE AO IN HIS ORDER HAS MENTIONED THAT THE ASS ESSEE HAS SHOWN INCOME FROM SALE OF ELECTRONIC ITEMS. NO DETAILS HA VE BEEN FILED. THEREFORE, THE INCOME WAS ASSESSED AT RS. 58,100/-. 10.4 THE LD. AR OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS INCOME OF RS. 8,100/- FROM SALE OF ELECTRONIC ITEMS. AGAINST THIS INCOME THE AO HAS ESTIMATED THE INCOME OF RS. 58,100/-. 10.5 THE LD. CIT(A) NOTICED THAT THE AO HAS SIMPLY REJECTED THE ASSESSEE'S FIGURE AND SUBSTITUTED HIS OWN FIGURE. THE ASSESSEE HAS ALSO FAILED TO FURNISH THE DETAILS OF THE EXPENSE AND THE EXPENSES ARE ALS O NOT PROPERLY VOUCHED. THEREFORE, THE LD. CIT(A) ESTIMATED THE DISALLOWANC E OF EXPENSES AT RS. 20,000/-. 10.6 WE HAVE HEARD BOTH THE PARTIES. IN ABSENCE OF ANY DETAILS, THE REVENUE AUTHORITIES WERE LEFT WITH NO OPTION BUT TO ESTIMAT E THE DISALLOWANCE OF EXPENSES, WE FEEL THAT THE ESTIMATE MADE BY THE LD. CIT(A) IS REASONABLE. 31 HENCE, THE DISALLOWANCE MADE BY THE LD. CIT(A) IS C ONFIRMED. THUS GROUND NO. 8 OF THE ASSESSEE AND GROUND NO. 5 OF THE REVEN UE ARE DISMISSED. 11.1 THE 9TH GROUND OF APPEAL OF THE ASSESSEE IS TH AT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OUT OF TAXI EX PENSES TO THE EXTENT OF RS. 20% AS AGAINST 1/3 RD OF TAXI EXPENSES MADE BY THE AO. 11.2 THE 10 TH GROUND OF APPEAL OF THE ASSESSEE IS THAT THE LD. C IT(A) HAS ERRED IN RESTRICTING THE CLAIM OF DEPRECIATION ON T AXIES TO THE EXTENT OF POSITIVE INCOME FROM TAXIES. 11.3 THE AO NOTICED THAT THE ASSESSEE HAS SHOWN GRO SS RECEIPTS OF RS. 22,40,323/- AND CLAIMED TAXI RUNNING EXPENSES AT RS . 18,93,048/-. THE NET INCOME WAS ASSESSED AT RS. 3,47,275/-. THE AO DISAL LOWED 1/3 RD OF THE EXPENSES AND HAS NOT ALLOWED DEPRECIATION ON TAXIES . 11.4 WE HAVE HEARD BOTH THE PARTIES. DURING THE PRE VIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESS EE WAS HAVING 04 TAXIES FOR ENTIRE YEAR. OTHER FOUR TAXIES HAVE REMAINED WI TH THE ASSESSEE DURING PREVIOUS YEAR FOR THE NUMBER OF DAYS VARYING FROM 0 5 TO 243 DAYS. LOOKING TO THE NUMBER OF TAXIES PLIED DURING WHOLE OF THE Y EAR AND THE NUMBER OF TAXIES WHICH HAVE BEEN PLIED FOR PART OF THE YEAR, WE FEEL THAT IT WILL BE FAIR AND REASONABLE TO ESTIMATE THE INCOME FROM TOURS AN D TRAVELS TO THE EXTENT OF 32 RS. 1.00 LAC AFTER ALLOWING DEPRECIATION. ACCORDING LY THE AO WILL CONSIDER THE INCOME FROM TOURS AND TRAVELS AT RS. 1.00 LAC A FTER ALLOWING DEPARTMENT. 12.1 THE REVENUE IN GROUND NO. 3 IS AGGRIEVED AGAINST REDUCING THE ADDITION OF TAXI EXPENSES AND ALLOWING DEPRECIATION . 12.2 THE ALLOWING OF DEPRECIATION IS DECIDED AGAINS T THE REVENUE WHILE DISALLOWANCE OF EXPENSES IS PARTLY ALLOWED BY ESTIM ATING THE INCOME FROM TAXI AT RS. 1.00 LAC. 13.1 THE GROUND NO. 11 OF THE ASSESSEE IS IN RESPEC T OF ALLOWING TELESCOPING OF ADDITION MADE ON ACCOUNT OF SUPPRES SED SALES AS AGAINST EXPENSES OF THE AMOUNT PAID OVER AND ABOVE THE CONS IDERATION. 13.2 WE HAVE HEARD BOTH THE PARTIES. WE FIND THAT N O SPECIFIC ISSUE IS RAISED BEFORE US IN RESPECT OF TELESCOPING. HENCE, GROUND NO. 11 OF THE ASSESSEE IS DISMISSED. 14.1 GROUND NO. 12 OF THE ASSESSEE IS THAT THE AO H AS PASSED THE ORDER U/S 153A READ WITH SECTION 144 OF THE ACT AND THE LD. C IT(A) HAS ERRED IN NOT ANNULLING THE ASSESSMENT ORDER. 14.2 WE HAVE HEARD BOTH THE PARTIES. THE POWERS OF THE LD. CIT(A) ARE COTERMINOUS WITH THE POWERS OF THE AO AND THE ASSES SEE HAS BEEN PROVIDED ADEQUATE OPPORTUNITY BEFORE THE LD. CIT(A). HENCE, THE LD. CIT(A) WAS 33 JUSTIFIED IN NOT ANNULLING THE ASSESSMENT ORDER. TH US GROUND NO. 12 OF THE ASSESSEE IS DISMISSED. 15.1 THE GROUND NO. 7 TH OF THE REVENUE IS THAT THE LD. CIT(A) HAS ERRED IN DIRECTING THE AO TO GIVE SET OFF FOR THE UNACCOUNTE D/ SUPPRESSED SALE CONSIDERATION AS SUCH SUPPRESSED SALE CONSIDERATION IS AVAILABLE FOR MAKING THE UNEXPLAINED EXPENSES OR CONSIDERATION. 15.2 NO SPECIFIC CASE HAS BEEN POINTED OUT BY THE R EVENUE. HENCE, THIS GROUND OF APPEAL IS ACADEMIC. 16 IN THE RESULT, THE APPEALS OF THE ASSESSEE AS WE LL AS OF THE REVENUE ARE PARTLY ALLOWED THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 12-08 -2011. SD/- SD/- (R.K. GUPTA) (N.L. KALRA) JUDICIAL MEMBER ACCOUNTANT MEMBER JAIPUR DATED; 12/08/2011 *MISHRA COPY FORWARDED TO :- 1. SHRI SHAKAR LAL KHANDELWAL, JAIPUR 2. THE ACIT, CENTRAL CIRCLE- 1, JAIPUR 3 THE LD. CIT BY ORDER 4. THE LD. CIT(A) 5 THE LD.DR 6 THE GUARD FILE (ITA NO.155/JP /11) A.R, ITAT, JAIPUR 34