Shri Sanjeev Kumar Saboo, L/R of Late Shri Basant Kumar Saboo, Kolkata V. DCIT, C.C. - XIII, Kolkata, Kolkata

ITA 1662/KOL/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 54599 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2011
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2002-2003
• Appeal Filed On: 23-08-2010
• Court: TRIBUNAL
• Department Lawyers: UJJAL KUMAR; P S DUTTA
• Assessee Lawyers: S L KOCHAR
• Keywords: Gift; Business income; Search and seizure; Document seized; Capital receipt; Documents seized
• Section: 153A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA () BEFORE , /AND , . !' . ) [BEFORE SRI MAHAVIR SINGH, JM & SHRI C. D. RAO, AM] # # # # / I.T.A NO. 1662/KOL/2010 $% &' $% &' $% &' $% &'/ // / ASSESSMENT YEAR : 2002-03 SRI SANJEEV KUMAR SABOO, L/R OF SRI VS. DEPUTY CO MMISSIONER OF INCOME-TAX, BASANT KUMAR SABOO (PAN: AKWPS 2443 K) CENTRAL CIRC LE-XIII, KOLKATA ()* /APPELLANT ) (+,)*/ RESPONDENT ) & # # # # / I.T.A NO. 1828/KOL/2010 $% &' $% &' $% &' $% &'/ // / ASSESSMENT YEAR : 2002-03 DEPUTY COMMISSIONER OF INCOME-TAX, VS. SHRI SANJE EV SABOO CENTRAL CIRCLE-XIII, KOLKATA. (PAN:AKKPS 6217 K ) ()* /APPELLANT ) (+,)*/ RESPONDENT ) & # # # # / I.T.A NO. 1831/KOL/2010 $% &' $% &' $% &' $% &'/ // / ASSESSMENT YEAR : 2002-03 DEPUTY COMMISSIONER OF INCOME-TAX, VS. SHRI SANJE EV SABOO, L/H OF LATE BASANT CENTRAL CIRCLE-XIII, KOLKATA. KR. SABOO ()* /APPELLANT ) (+,)*/ RESPONDENT ) DATE OF HEARING: 13.10.2011 DATE OF PRONOUNCEMENT: 21.10.2011 FOR THE ASSESSEE: SHRI S. L. KOCHAR FOR THE REVENUE: SHRI UJJAL KUMAR, CIT & S HRI P. S. DUTTA, SR. DR. - / ORDER PER MAHAVIR SINGH, JM ( , , , , ) ALL THESE THREE APPEALS ONE BY ASSESSEE AND TWO BY REVENUE ARE ARISING OUT OF ORDER OF CIT(A), CENTRAL - II, KOLKATA IN APPEAL NO 231& 238 /CC-XIII/CIT(A)-C-II/KOL/08-09 DATED 23.06.2010. ASSESSMENTS WERE FRAMED BY DCIT, CC-XII , KOLKATA U/S. 143(3)/153C OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS T HE ACT) FOR ASSESSMENT YEAR 2002-03 VIDE DIFFERENT ORDERS DATED 30.12.2008 AND 31.12.2008. 2. THE FIRST COMMON AND INTERCONNECTED ISSUE IN TH ESE THREE APPEALS, TWO BY REVENUE AND ONE BY ASSESSEE IS AGAINST ORDER OF CIT(A). REVENUE IS IN APPEAL IN ITA NO.1828/K/2010 IN THE CASE OF SHRI SANJEEV SABOO AGAINST DELETION OF ADD ITION OF RS.25 LACS ADDED BY ASSESSING 2 ITA 1828, 1662 & 1831/K/2010 SHRI SANJEEV SABOO., A.Y.2002-03 OFFICER ON THE BASIS OF SEIZED DOCUMENTS PAGES 7 AN D 9 OF ID MARK AKS-35 ON THE BASIS OF MOU DATED 31.01.2001. IN ITA NO.1831/K/2010 IN THE CASE OF LATE BASANT KR. SABOO THROUGH LEGAL HEIR SHRI SANJEEV SABOO CIT(A) DELETING ADDIT ION OF RS.30 LACS MADE ON THE BASIS OF SEIZED DOCUMENTS PAGES 8 AND 9 ID MARK AKS-35 ON TH E BASIS OF MOU DATED 31.01.2001. THE REVENUE IN ITA NO.1828/K/2010 HAS RAISED FOLLOWING THREE EFFECTIVE GROUNDS: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.25,00,000/- MA DE ON THE BASIS OF SEIZED DOCUMENT PAGES NO. 8 & 9 OF ID MARK AKS-35 WITHOUT APPRECIAT ING THE EVIDENTIARY VALUE OF THE MOU DATED 31 .01 .2001 ACCORDING TO WHICH THE LATE BASANT KUMAR SABOO, THE FATHER OF THE ASSESSEE HIMSELF CATEGORICALLY ADMITTED THAT HI S SON SANJEEV RAISED RS.25,00,000/- FROM THE MARKET AND SHRI ASHOK KUMAR SABOO, THE KEY MEMBER OF OTHER SABOO FAMILY, WILL GRADUALLY MAKE REPAYMENT OF THE SAID LOAN. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE LOAN OF RS.25,00,000/- TA KEN BY THE ASSESSEE IS CONSIDERED DEBT OF M/S. HIGH RISE ROLLER FLOUR MILLS PVT. LTD.(HRRFM) OR FAMILY BUSINESS CREATED AT THE INSTANCE OF THE ASSESSEE BEFORE SEPARATION OF THE A SSESSEE AND HIS FATHER FROM FAMILY BUSINESS AND ALSO HOLDING THAT THE REPAYMENT OF SUC H DEBTS DID NOT AMOUNT TO ANY BENEFIT TO THE DECEASED FATHER AS WELL AS ASSESSEE AND CANN OT BE INCLUDED IN THE INCOME OF EITHER OF THEM WHEREAS NEITHER OF THEM HAS DECLARED SUCH R ECEIPT AS INCOME. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.25,00,000/- BY RELYING UPON THE SUBMISSIONS OF THIRD PARTIES. SIMILARLY, REVENUE IN ITA NO.1831/K/2010 RAISED FOL LOWING THREE EFFECTIVE GROUNDS: 1. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 30,00,000/- MADE ON TH E BASIS OF SEIZED DOCUMENT PAGES NO. 8 & 9 OF ID MARK AKS-35 WITHOUT APPRECIATING THE EVID ENTIARY VALUE OF THE MOU DATED 31.01.2001 ACCORDING TO WHICH THE DECEASED ASSESSEE HIMSELF RAISED RS. 30,00,000/- FROM THE MARKET THE REPAYMENT OF WHICH WAS NOT ENFORCED IN THE MOU UPON RESIGNATION OF THE ASSESSEE FROM THE DIRECTORSHIP OF THE COMPANY NAMEL Y MIS HIGH RISE ROLLER FLOUR MILLS PVT. LTD. 2. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE LOAN OF RS. 30,00,000/- TAKEN BY T HE ASSESSEE WAS SUPPORTED TO THE EXTENT OF RS. 14.19 LAKHS BY THE DOCUMENTS SEIZED FROM THE OTHER GROUP OF SABOO FAMILY, PARTICULARLY WHEN THE ASSESSEE HAS HIMSELF CATEGORI CALLY ADMITTED IN THE NAME OF M/S HIGH RISE ROLLER FLOUR MILLS PVT. LTD. AND THE LD. CIT(A ) HAS ERRED IN HOLDING THAT THE PAYMENT WOULD BE OF CAPITAL IN NATURE. 3. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 30,00,000/- BY RELYING UPON THE SUBMISSIONS OF THIRD PARTIES. SIMILARLY, ASSESSEE IN ITA NO.1662/K/2010 IN THE CA SE OF SHRI SANJEEV SABOO CHALLENGED THE ORDER OF CIT(A) CONFIRMING ADDITION OF RS.20 LACS B Y INVOKING PROVISIONS OF SECTION 28(II)(A) OF THE ACT. FOR THIS, ASSESSEE HAS RAISED FOLLOWIN G FOUR GROUNDS: 1. FOR THAT THE LD. CIT (A) ERRED IN CONFIRMING AD DITION OF RS.20,00,000/- AS THE INCOME OF THE APPELLANT ON THE ALLEGED GROUNDS. 2. FOR THAT IN VIEW OF THE FACT THAT RELEVANT MOU W ITH REFERENCE TO WHICH THE ASSESSING OFFICER HAD PROCEEDED TO MAKE ADDITION OF RS.20,00, 000/- AS THE INCOME OF THE APPELLANT 3 ITA 1828, 1662 & 1831/K/2010 SHRI SANJEEV SABOO., A.Y.2002-03 HAD NOT BEEN ACTED UPON AND IN THAT VIEW OF THE MAT TER THE ADDITION OF RS.20,00,000/- MADE BY THE A.O. OUGHT TO HAVE BEEN DELETED BY THE CIT (A). 3. FOR THAT THE LD. CIT(A) OUGHT TO HAVE ACCEPTED T HE EXPLANATIONS SUBMITTED AND CONTENTIONS RAISED BY THE APPELLANT AND OUGHT TO HA VE DELETED THE ADDITION OF RS.20,00,000/-. 4. FOR THAT THE LD. CIT(A) ERRED IN APPLYING THE PR OVISIONS OF SEC.28 (II)(A) AND IN HOLDING THAT THE AMOUNT OF. RS.20,00,000/- WAS TAXABLE AS I NCOME OF THE APPELLANT. 3. BRIEFLY STATED FACTS ARE THAT SEARCH AND SEIZURE OPERATION U/S. 132 OF THE ACT WAS CONDUCTED ON SABOO GROUP OF CASES ON 16.05.2006 BY INVESTIGATION WING OF THE INCOME-TAX DEPARTMENT, INCLUDING ASSESSEE SHRI SANJEEV SABOO. DURING THE COURSE OF SEARCH, CERTAIN DOCUMENTS WERE FOUND AND SEIZED BELONGING TO THE AS SESSEE AND ON THE BASIS OF THE SAME, NOTICE U/S. 153C OF THE ACT WAS ISSUED AND SERVED UPON ASS ESSEE. THE ASSESSEE IN THE RELEVANT AY 2002-03 FILED HIS ORIGINAL RETURN OF INCOME U/S. 13 9(1) ON 28.03.2003 DECLARING TOTAL INCOME AT RS.5,436/- AND AFTER SEARCH SHRI SANJEEV KR. SABOO FOR HIMSELF FILED RETURN OF INCOME U/S. 153A AT A TOTAL INCOME OF RS.5,436/- REPEATING THE ORIGINAL RETURN OF INCOME FILED U/S. 139(1) OF THE ACT ON 30.03.2006. SIMILARLY, IN THE CASE OF B ASANT KUMAR SABOO THROUGH LEGAL HEIR SHRI SANJEEV KUMAR SABOO REPEATED THE SAME RETURN FILED ON 28.03.2003 U/S. 139(1) OF THE ACT. IN THE CASE OF SHRI SANJEEV KUMAR SABOO, ASSESSMENT WA S COMPLETED ON 31.12.2008 AT A TOTAL INCOME OF RS.25,85,040/- INCLUDING ADDITIONAL INCOM E AS UNDISCLOSED INCOME OF RS.25,00,000/- BEING THE AMOUNT RECEIVED AS PER MOU DATED 31.02.20 01. SIMILARLY, IN THE CASE OF LATE BASANT KUMAR SABOO, ASSESSMENT WAS COMPLETED ON 31.12.2008 AT A TOTAL INCOME OF RS.50,57,440/- INCLUDING UNDISCLOSED INCOME OF RS.30,00,000/- BEIN G AMOUNT RECEIVED ON ACCOUNT OF RESIGNATION FROM DIRECTORSHIP OF THE COMPANY HIGH R ISE ROLLER FLOUR MILLS PVT. LTD. (HRRFM) AND FURTHER UNDISCLOSED INCOME OF RS.20,00,000/- RE CEIVED FROM SHRI ASHOK KUMAR SABOO TO RUN BUSINESS OF WASTE PAPER, AATA AND MAIDA AS PER MOU DATED 31.01.2002. 4. IN THE CASE OF SHRI SANJEEV KR. SABOO, CIT(A) AL LOWED THE APPEAL OF THE ASSESSEE BY DELETING THE ADDITION OF RS.25,00,000/- BY GIVING F OLLOWING FINDING IN PARA 4 OF HIS APPELLATE ORDER: 4. 1 HAVE GONE THROUGH THE ASSESSMENT ORDER AND SU BMISSIONS OF APPELLANT. I HAVE DISCUSSED THIS ISSUE IN MY ORDER IN CASE OF THE DEC EASED FATHER OF THE APPELLANT IN APPEAL NO 231/CC-XILL/CIT(A)-C-II/KOL./08-09 FOR ASSESSMEN T YEAR 2002-03. IT WAS FOUND IN THE APPELLATE PROCEEDINGS OF THE DECEASED FATHER OF THE APPELLANT THAT THE OTHER GROUP OF SABOO FAMILY WHICH INCLUDED ASHOK KUMAR SABOO, HIS FATHER HANUMAN PRASAD SABOO AND OTHERS HAD FILED AN APPLICATION BEFORE THE HBL E SETTLEMENT COMMISSION DISCLOSING THE INCOME OF THEIR FAMILY BUSINESS AND PERSONAL IN COMES BEFORE HBLE SETTLEMENT COMMISSION. THE TRANSACTIONS IN RESPECT OF LOANS OB TAINED BY THE DECEASED FATHER OF THE APPELLANT FOR SUCH FAMILY BUSINESS IN JANUARY 1999 TO APRIL 1999 WERE ALSO INCORPORATED IN THIS DISCLOSURE IN THE FORM OF CASH FLOW STATEMENT AND THE SAME WAS ACCEPTED BY HBLE SETTLEMENT COMMISSION. IN THIS CA SH FLOW STATEMENT, REGULAR PAYMENTS FROM THE OTHER GROUP OF SABOO FAMILY TO AND ON BEHA LF OF THE DECEASED FATHER OF THE APPELLANT WERE SHOWN FROM MAY 2001 TO DECEMBER 2005 . HBLE SETTLEMENT COMMISSION 4 ITA 1828, 1662 & 1831/K/2010 SHRI SANJEEV SABOO., A.Y.2002-03 IN THEIR ORDER DATED 28.08.2009 IN CASE OF THE OTH ER GROUP OF SABBO FAMILY INCLUDING ASHOK SABOO HAD DECIDED THAT THE MOUS MAY BE CONSID ERED AS GIVEN EFFECT TO ONLY TO THE EXTENT THEY WERE APPEARING IN THIS CASH FLOW ST ATEMENT. ALL THE ABOVE TRANSACTIONS APPEARING IN THE CASH FLOW STATEMENT SUBMITTED BEFO RE THE HBLE SETTLEMENT COMMISSION HAVE BEEN DISCUSSED IN THE APPELLATE ORDER IN CASE OF THE DECEASED FATHER OF THE APPELLANT SHRI BASANT KUMAR SABOO IN APPEAL NO 23L/ CC-XL1I/CIT(A)-C-1I/KOL./08-09 FOR ASSESSMENT YEAR 2002-03. AFTER DISCUSSING THE M OU DATED 31.01.2002 VIS--VIS IN THAT ORDER, I HAD DECIDED IN PARA 6.4 UNDER GROUND 5, 6 AND 7OF THAT APPEAL AS UNDER: 6.4. THE MOU DATED 31.01.2002 STIPULATED THAT ASHOK KUMAR SABOO (SON OF HANUMAN PRASAD SABOO AND NEPHEW OF DECEASED ASSESSEE) WOU LD GRADUALLY PAY RS.25,00,000/- TOWARDS THE LOAN TAKEN AND THE LIABILITY CREATED ON ACCOUNT OF GOODS PURCHASED AT THE INSTANCE OF THE SON OF DECEASED ASSESSEE, SHRI SANJ EEV KUNWR SABOO. THE SON OF THE DECEASED ASSESSEE, SHRI SANJEEV KUMAR SABOO HAD SUB MITTED A CLARIFICATION BEFORE THE ASSESSING OFFICER BY FILING AN AFFIDAVIT AND THE AF FIDAVIT IS NARRATED AT PAGE 3 OF THE ASSESSMENT ORDER. IN THIS AFFIDAVIT, SHRI SANJEEV KUMAR SABOO HAS CLARIFIED THAT RS. 25 LAKH DEBT IN MOU DATED 31.01.2002 REFERS TO DEBTS W HICH WERE CREATED IN THE BOOKS OF HRRFM UNDER HIS CREDENTIALS. SINCE HIS FATHER, THE DECEASED ASSESSEE, HAD RESIGNED FROM THE DIRECTORSHIP OF HRRFM, THEY WERE AFRAID T HAT THE OTHER GROUP OF SABOO FAMILY MAY NOT REPAY THESE DEBTS AND THEREFORE TO SAFEGUA RD THEMSELVES AGAINST ANY SUCH EVENTUALITY THEY HAD SPECIFICALLY MENTIONED THAT AS HOK KUMAR SABOO WILL REPAY SUCH DEBTS. ASSESSING OFFICER HAS NOT FOUND ANY DEFAULT IN THE AFFIDAVIT OF SHRI SANJEEV KUMAR SABOO BY EITHER EXAMINING THE BOOKS OF HRRFM OR OTH ERWISE AND HAS SIMPLY REJECTED THE AFFIDAVIT. IN ABSENCE OF ANY CONTRARY EVIDENCE , AND THE FACT, THAT THE MOU DATED 31.01.2002 IS SEPARATELY STIPULATING THE MONETARY COMPENSATION OF RS 20,00,000/- BY ASHOK KUMAR SABOO TO THE DECEASED ASSESSEE AND SANJ EEV SABOO IN THEIR BUSINESS OF WASTE PAPERS AND ATA/MAIDA, THE REPAYMENT OF DE BT OF RS 25,00,000/- MAY BE WITH REFERENCE TO THE DEBTS CREATED IN THE BOOKS OF HRRF M OR THE OTHER FAMILY BUSINESS BEFORE THE SEPARATION,AT THE INSTANCE OF SANJEEV KW NAR SABOO; AND WILL NOT FORM PART OF THE PAYMENTS MADE BY OTHER GROUP OF SABOO FAMILY TO THE DECEASED ASSESSEE UNDER DRAWING-BKS ACCOUNT. THIS DEBT MAY BE A DEBT CRE ATED IN HRRFM OR OTHER FAMILY BUSINESS EARLIER AT THE INSTANCE OF THE SON OF THE DECEASED ASSESSEE, FROM WHERE THE DECEASED ASSESSEE HAD LATER SEPARATED, HOWEVER, SUC H DEBTS WILL REMAIN IN THOSE BUSINESSES AND WILL NOT BECOME INCOME OF THE DECEAS ED ASSESSEE OR HIS SON ON THEIR SEPARATION FROM SUCH BUSINESS. THE OTHER GROUP OF S ABOO FAMILY HAS SEPARATELY DISCLOSED THEIR AND THEIR FAMILY BUSINESS INCOME B EFORE HBLE SETTLEMENT COMMISSION. THE CONTENTION OF THE SON OF THE DECEASED ASSESSEE THAT THE MENTIONING OF REPAYMENT OF SUCH DEBTS WHILE SEPARATING FROM THE FAMILY BUSINES S WAS ONLY A REMINDER TO THE OTHER GROUP OF SABOO FAMILY APPEARS TO BE CORRECT IN VIEW OF THE FACTS AND FIGURES AVAILABLE AS EVIDENCE AND THEREFORE THERE DOES NOT APPEAR ANY POSSIBILITY OF SUCH AMOUNT BEING RECEIVED IN THE DRAWING-BKS ACCOUNT OF THE CASH F LOW STATEMENT SUBMITTED BY THE OTHER GROUP OF SABOO FAMILY BEFORE THE H BLE SETTL EMENT COMMISSION. OTHERWISE ALSO, REPAYMENT OF ANY DEBT IS A CAPITAL RECEIPT. THIS AMOUNT OF RS 25,00,000/-, AS MENTIONED IN THE MOU DATED 31.01.2002 IS THEREFORE CONSIDERED AS DEBTS OF HRRFM OR FAMILY BUSINESS CRE ATED AT THE INSTANCE OF APPELLANT BEFORE THE SEPARATION OF APPELLANT AND HIS FATHER F ROM SUCH JOINT FAMILY BUSINESS. THE REMINDER OF REPAYMENT OF SUCH DEBTS IN THE MOU DATE D 31.01.2002 BY THE DECEASED FATHER OF APPELLANT DOES NOT AMOUNT TO ANY BENEFIT ARISING TO EITHER THE DECEASED FATHER OF APPELLANT OR TO THE APPELLANT AND CANNOT BE INCL UDED IN THE INCOME OF EITHER OF THEM. THE AMOUNTS SHOWN AS PAID AND RECEIVED BY OR ON ACC OUNT OF THE LATE FATHER OF THE APPELLANT AND AS APPEARING IN THE CASH FLOW STATEME NT APPROVED BY HBLE SETTLEMENT COMMISSION ARE ALREADY CONSIDERED FOR TAXATION TO T HE EXTENT REQUIRED IN THE HANDS OF LEGAL HEIRS OF THE LATE FATHER OF THE APPELLANT AND THEREFORE THE AMOUNT OF RS 25,00,000/- CONSIDERED BY THE ASSESSING OFFICER AS UNDISCLOSED INCOME OF APPELLANT IS DIRECTED TO BE DELETED AND REDUCED FROM THE TOTAL INCOME OF THE AP PELLANT. 5 ITA 1828, 1662 & 1831/K/2010 SHRI SANJEEV SABOO., A.Y.2002-03 5. IN THE CASE OF LATE BASANT KUMAR SABOO THROUGH L EGAL HEIR SHRI SANJEEV KUMAR SABOO, THE CIT(A) IN RESPECT OF ADDITION OF RS.30,00,000/- WAS DELETED VIDE PARA 6.3 OF HIS APPELLATE ORDER AS UNDER: 6.3. IN THE MOU DATED 31.01.2002 THE DECEASED ASS ESSEE HAD STATED THAT HE IS RESIGNING FROM HRRFM BECAUSE HE HAD TAKEN RS 30 LAKH FROM MAR KET IN THE NAME OF HRRFM AND THE LIST OF SUCH LIABILITY WAS WITH HIM. THOUGH THE MOU DATED 31.01.2002 DOES NOT REFER TO ANY PAYMENT OF RS.30,00,000/- BY THE OTHER GROUP OF SABOO FAMILY TO THE DECEASED ASSESSEE, STILL BY SAYING THAT THE DECEASED ASSESSE E WOULD HAVE NOTHING TO TAKE OR GIVE TO HRRFM AFTER RESIGNING FROM HRRFM , THE LIABILITY OF RS 30,00,000/- TO THE MARKET IS THE LIABILITY OF THE BUSINESS OF THE OTHER GROUP OF SAB BO FAMILY AND NOT THE LIABILITY OF THE DECEASED ASSESSEE. THE AMOUNT OF RS 30,00,000/- REC EIVED FROM MARKET HAS NOT BEEN CONSIDERED AS A PERSONAL LIABILITY OF THE DECEASED ASSESSEE IN THE MOU BECAUSE IT WAS OBTAINED ON BEHALF OF THE FAMILY BUSINESS OR THE CO MPANY, THOUGH IT BECAME A REASON FOR THE DECEASED ASSESSEE TO RESIGN. LOANS OF RS 14.19 LAKH, BROUGHT IN BY THE DECEASED ASSESSEE IN JANUARY TO APRIL 1999 FOR THE FAMILY BU SINESS BEFORE THE SEPARATION ON 31.01.2002 ARE APPEARING IN THE CASH FLOW STATEMENT SUBMITTED BEFORE THE HBLE SETTLEMENT COMMISSION BY THE OTHER GROUP OF SABOO F AMILY. THESE ENTRIES ALSO SUGGEST THAT LOANS BROUGHT IN BY THE DECEASED ASSESSEE WERE APPL IED IN THE FAMILY BUSINESS AND REPAYMENT OF SUCH LOANS TO EITHER DECEASED ASSESSEE OR TO THE MARKET PARTIES ON HIS BEHALF BY THE OTHER GROUP OF SABOO FAMILY CANNOT BE TREATE D AS INCOME OF THE DECEASED ASSESSEE. HOWEVER, KEEPING THE DECISION OF HBLE SETTLEMENT C OMMISSION IN CASE OF THE OTHER GROUP OF SABOO FAMILY IN RESPECT OF THE COMMON MOUS IN MI ND, SUCH REPAYMENT OF LOAN RECEIVED BY THE DECEASED ASSESSEE DURING THE ASSESSMENT YEAR UNDER APPEAL AND IN SUBSEQUENT ASSESSMENT YEARS ARE RESTRICTED TO THE EXTENT OF RS 14.19 LAKH ONLY, I.E, THE EXTENT TO WHICH IT IS EVIDENCED BY THE CASH FLOW STATEMENT SUBMITTE D BY THE OTHER GROUP OF SABOO FAMILY BEFORE THE HBLE SETTLEMENT COMMISSION. THEREFORE I HOLD THAT RS 30,00,000/- OF LOANS, TAKEN BY THE DECEASED ASSESSEE FOR THE FAMILY BUSIN ESS BEFORE THE SEPARATION ON 31.01. 2002, ARE AT MOST SUPPORTED BY THE DOCUMENTS SEIZED FROM THE OTHER GROUP OF SABOO FAMILY TO THE EXTENT OF RS 14.19 LAKH BETWEEN JANUARY 1999 TO APRIL 1999 AND CANNOT BE ADDED TO THE TOTAL INCOME EVEN AS THE UNEXPLAINED RECEIPTS F OR THE ASSESSMENT YEAR UNDER APPEAL. THE PAYMENT TO THE EXTENT OF RS 14.19 LAKH FROM THE OTHER GROUP OF SABOO FAMILY TO THE DECEASED ASSESSEE OR TO THE MARKET PARTIES ON BEHAL F OF THE DECEASED ASSESSEE DURING THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR UNDE R APPEAL IS ONLY THE REPAYMENT OF SUCH LOANS AND A CAPITAL RECEIPT WHICH CANNOT BE CO NSIDERED AS THE INCOME OF APPELLANT OF THE ASSESSMENT YEAR UNDER APPEAL. ASSESSING OFFICER IS DIRECTED TO DELETE THE ADDITION OF RS.30,00,000/- MADE BY HIM TO THE TOTAL INCOME OF T HE DECEASED ASSESSEE AND REDUCE THE TOTAL INCOME ACCORDINGLY. BUT RETAINED THE ADDITION OF RS.20,00,000/- BY GIVI NG FOLLOWING FINDING IN PARA 6.9 OF HIS APPELLATE ORDER AS UNDER: 6.9. THE AMOUNT OF RS 20,00,000/- HAS BEEN RECEIV ED BY THE DECEASED ASSESSEE FROM THE OTHER GROUP OF SABOO FAMILY FOR RUNNING THE BUS INESSES OF WASTE PAPER AND ATA/MAIDA SMOOTHLY AS PER THE MOU DATED 31.01.200 2 AND AS EVIDENCED BY THE CASH FLOW STATEMENT OF THE OTHER GROUP OF SABOO FAM ILY SUBMITTED BEFORE HBLE SETTLEMENT COMMISSION AND AS DISCUSSED ABOVE. THIS AMOUNT HAS BEEN RECEIVED BY THE DECEASED ASSESSEE FOR THE BENEFIT OF THE BUSINESSES OF WASTE PAPER AND ATA/ MAIDA, WHICH HAS NOT BEEN DISCLOSED IN THE BOOKS O F THE DECEASED ASSESSEE. THE BUSINESS OF WASTE PAPER AND ATA/MAIDA OF THE DECEAS ED ASSESSEE WAS ALREADY IN EXISTENCE AND THE MOU DATED 31.01.2002 CLEARLY STAT ED THAT RS 20 LAKH IS TO BE PAID BY ASHOK KUMAR SABOO TO THE DECEASED ASSESSEE FOR R UNNING THESE BUSINESSES SMOOTHLY. THIS BENEFIT RECEIVED FOR THE BUSINESS OF THE DECEASED ASSESSEE DOES NOT APPEAR TO BE IN THE NATURE OF A PERSONAL GIFT. THIS IS SO, BECAUSE DECEASED ASSESSEE HAD RESIGNED FROM THE DIRECTORSHIP OF HRRFM AND WAS REQUIRED TO BE COMPENSATED FOR THE LOSS OF HIS SERVICES IN HRRFM. I HAVE ALREA DY STATED ABOVE THAT EXCEPT FOR THE 6 ITA 1828, 1662 & 1831/K/2010 SHRI SANJEEV SABOO., A.Y.2002-03 AMOUNT OF RS 20 LAKH RECEIVED BY APPELLANT FROM THE OTHER GROUP OF SABOO FAMILY, ALL OTHER AMOUNTS MENTIONED IN MOU ARE EITHER REPAYMENT OF EARLIER ADVANCED LOANS, LIABILITIES OF OTHER BUSINESS CONCERNS OR PERSONAL ASSISTANCE OUT OF MORAL AND FAMILY OBLIGATION AND CANNOT BE CONSIDERED AS COMPENSATION TO THE DECEASED, ASSESSEE FOR RESIGNING FROM THE DIRECTORSHIP OF HRRFM. HOWEVER, THE AMOUNT OF RS 20 IAKH AS MENTIONED IN THE MOU, IS THE ONLY AMOUNT WHICH APPE ARS TO BE IN THE NATURE OF COMPENSATION RECEIVED BY THE APPELLANT FOR RESIGNIN G FROM THE DIRECTORSHIP OF HRRFM. IT IS A FACT THAT THE DECEASED ASSESSEE RESI GNED FROM HRRFM AS STIPULATED IN THE MOU AND IT IS ALSO A FACT THAT THE DECEASED ASS ESSEE SUBSEQUENTLY RECEIVED RS 20 LAKH FROM THE OTHER GROUP OF SABOO FAMILY AS EVIDEN CED BY THE CASH FLOW STATEMENT SUBMITTED BY THEM BEFORE HBLE SETTLEMENT COMMISSIO N. THE AMOUNT OF RS 20 LAKH IN THE FORM OF COMPENSATION FOR RESIGNING AS THE DIREC TOR OF HRRFM BECAME DUE TO THE DECEASED ASSESSEE ON 31.01.2002 WHEN THE MOU WAS DR AWN AND SIGNED BY THE DECEASED ASSESSEE AND OTHER FAMILY MEMBERS. THE ACT IVITIES OF THE DECEASED ASSESSEE IN THE COMPANY HRRFM SUCH AS TAKING LOAN FROM MARKE T OF RS 30 LAKH OR TAKING DEBTS OF RS 25 LAKH IN THE COMPANY AT THE INSTANCE OF HIS SON AS NARRATED IN THE MOU, CLEARLY SHOW THAT THE DECEASED ASSESSEE WAS SUBSTAN TIALLY MANAGING THE AFFAIRS OF HRRFM TILL HIS RESIGNATION. SUCH COMPENSATION OF R S 20 LAKH IS THEREFORE TAXABLE U/S 28(II)(A) OF THE 1.T.ACT ON DUE BASIS. THIS AMOUNT HAS NOT BEEN DISCLOSED BY THE DECEASED ASSESSEE IN HIS TOTAL INCOME AND THEREFORE 1 CONFIRM TILE ADDITION OF RS 20,00,000/- MADE BY THE ASSESSING OFFICER TO THE TO TAL INCOME. 6. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE RE FERRED TO THE ORDER OF INCOME-TAX SETTLEMENT COMMISSION DATED 28.08.2009 IN THE CASE OF HANUMAN PRASAD SABOO GROUP OF CASES WHEREIN MOUS IN DISPUTE HAVE BEEN CONSIDERED BY SETTLEMENT COMMISSION AND FOUND THAT THESE MOUS WERE ACTUALLY NOT ACTED UPON. INCOME TAX SETTLEMENT COMMISSION, ADDITIONAL BENCH OF KOLKATA PASSED ORDER U/S. 245D(4) OF THE ACT VIDE O RDER DATED 28.08.2009 IN THE SABOO GROUP OF CASES IN ENDORSEMENT NO. WB/KC-II/2007-08/30/IT/ 310-16. HE REFERRED TO RELEVANT FINDING OF SETTLEMENT COMMISSION AT PAGES 10 TO 12 OF THE O RDER, WHICH READS AS UNDER: (C) MEMORANDA OF UNDERSTANDING (MOUS): IN THE SEARCH, 12 MEMORANDA OF UNDERSTANDING (MOUS ) (AS PER PAGE 3387 OF THE PAPER BOOK) WERE SEIZED. THESE RELATE TO (A) SEPARA TION BETWEEN HANUMAN PRASAD SABOO AND BASANT KUMAR SABOO; AND (B) SEPARATION BETWEEN SONS OF HANUMAN PRASAD SABOO & ASHOK KUMAR SABOO AND KISHORE KUMAR SABOO & SUBODH KUMAR SABOO. C1T, IN HIS RULE 9 REPORT, HAS REFERRED TO THESE MOUS IN THE CASES O F FOLLOWING APPLICANTS: A) ASHOK KUMAR SABOO B) KISHORE KUMAR SABOO C) HIGH RISE ROLLER FLOUR MILLS PVT. LTD. D) SUBODH KUMAR SABOO, HUF E) HANUMAN PRASAD SABOO, HUF F) HANUMAN PRASAD SABOO IN THE PAPER BOOKS SUBMITTED BY THE APPLICANTS, DE TAILS OF ALL THE MOUS HAVE BEEN GIVEN. IT IS SEEN THAT THESE ARE IN THE NATURE OF F AMILY SETTLEMENTS ARRIVED AT DIFFERENT TIMES BY SOME OF THE FAMILY MEMBERS. ON THE STRENGTH OF S OME OF THE MOUS, LIKE (KKS-6), THE CIT HAS MENTIONED ABOUT THE CURRENT VALUATION OF A HOUSE AT HASTINGS IN KOLKATA AND OF AN APART MENT IN MUMBAI AT RS 69,60,000 AND RS 2,25 ,00,000 RESPECTIVELY. HE HAS, HOWEVER, NOT DRAWN ANY CONCLUSION THEREFROM. 7 ITA 1828, 1662 & 1831/K/2010 SHRI SANJEEV SABOO., A.Y.2002-03 THE CIT HAS ALSO REFERRED TO THE SEIZED DOCUMENTS AKS-11, AKS-16, AKS-30, AKS-35 AND AKS-39 TO CONTRADICT THE CLAIM OF THE AP PLICANTS IN THE SOF TO THE EFFECT THAT THE MOUS HAD NO IMPLICATION ON COMPUTATION OF UNDIS CLOSED INCOME AND ALSO THAT THE MOUS MENTIONED IN THE SEIZED DOCUMENT AKS-11 HAD SU BSTITUTED ALL OTHER MOUS. THE LD. AR HAS EXPLAINED THAT THE MOUS WERE PREPAR ED BY A FEW OF THE FAMILY MEMBERS SEVERAL TIMES WITH A RESULT THAT AN M0U, ON CE ARRIVED AT, GOT SUBSTITUTED BY ANOTHER MOU. IT WAS EMPHASIZED THAT NONE OF THE MOU S FOUND DURING THE SEARCH WERE ACTUALLY ACTED UPON. THE SABOO FAMILY WAS VERY BIG AND WERE LIVINQ TOGETHER. THERE WERE INNER DISPUTES. THIS LED TO DRAWING OF MOU FOR ONE FAMILY AND MEMBER, THEN CANCELLING IT AND SUBSTITUTING IT WITH ANOTHER MOU. HENCE, CONTEN TS OF THE SUBSTITUTED OR CANCELLED MOUS DID NOT HAVE ANY SIGNIFICANCE. TO SUPPORT THIS ARGUMENT, HE HAS RELIED UPON PAGE NO. 10 OF AKS-11 WHICH HAS BEEN SIGNED BY SANJEEV S ABOO AND SUDHA SABOO ON 08-01- 2006 AND WHICH NARRATES THAT THEY HAVE FORMED (DES TROYED) FAMILY SETTLEMENT PAPERS SIGNED BY US. IT IS STATED THAT SUCH NARRATION ABO UT DESTROYING THE FAMILY SETTLEMENT PAPERS WOULD MEAN THAT MOU HAD NO IMPLICATION ON TH E COMPUTATION OF UNDISCLOSED INCOME. THE LD. AR HAS ALSO REFERRED TO OBSERVATION OF CIT IN RESPECT OF LAKS-35. THIS DOCUMENT SPEAKS ABOUT SOME ARRANGEMENTS MADE ON 31- 01-2002. CIT OPINES THAT THIS DOCUMENT SHOWS PAYMENT OF RS. 30,00,000 TO BASANT K UMAR SABOO FOR HIS RESIGNATION FROM M/S. HIGH RISE ROLLER FLOUR MILLS PVT. LTD.; P AYMENT OF RS. 25,00,000 TO SANJEEV SABOO; PAYMENT OF RS. 20,00,000 TO LATE BASARNT KUM AR SABOO AND SANJEEV SABOO; PAYMENT OF RS. 20,000 PER MONTH FOR HOUSEHOLD EXPEN SES FOR THREE YEARS (TOTALLING TO RS.7,20,000) BY HANUMAN SABOO. IN OTHER WORDS, CIT HAS STATED THAT THIS DOCUMENT CERTAINLY SHOWS PAYMENTS TO THE EXTENT OF RS. 82,20 ,000 TO DIFFERENT PERSONS. THE LD. AR HAS REPLIED THAT THIS MOU WAS ALSO NOT ACTED UPON. IN ANY CASE, ASSUMING THAT SUCH PAYMENTS HAD BEEN MADE, THE PAYMENTS INDICATED FROM THE SEIZED DOCUMENT CAN BE ONLY OF RS. 7,20,000 BY HANUMAN PRASAD SABOO, AS OTHER AMOU NTS WERE NEVER PAID TO ANY PERSON. THE PAYMENT OF RS. 7,20,000 IN THREE YEARS IS OTHER WISE EXPLAINABLE THROUGH THE DRAWINGS OF BASANT KUMAR SABOOL. THE CIT HAS ALSO REFERRED T O A NUMBER OF PROPERTIES REFLECTED IN SUCH MOUS. THEY CONSIST OF RESIDENCES, LAND, SHOPS, GODOWNS, IN ALL TOTALLING 11 IN NUMBER. THE A.R. HAS REFERRED TO PAGE 144 OF PAPER BOOK, VOL. 17 WHERE A DETAILED CHART HAS BEEN GIVEN SHOWING THE DATE-WISE ACQUISITION OF THOSE PROPERTIES, THE NAMES OF THE PURCHASERS, CONSIDERATION PAID WITH REFERENCE TO TH E RESPECTIVE INCOME-TAX FILES. IT IS POINTED OUT THAT THESE PROPERTIES ARE DULY REFLECTE D IN THE REGULAR BOOKS. ALL BUT ONE PROPERTY WAS ACQUIRED IN YEARS EARLIER TO THE PERIO D OF APPLICATION. THE ONE PROPERTY AT SUNNY PARK WAS PURCHASED IN F.Y. 2003-04, IN THE NA ME OF SMT. MAMTA SABOO AND IT IS ALSO REFLECTED IN HER REGULAR BALANCE SHEET. HOWEVE R, AGAINST THIS PROPERTY, AN ON-MONEY OF RS. 34,00,000 HAD BEEN PAID AND THIS AMOUNT, IT IS STATED, HAS BEEN SHOWN IN THE COMPOSITE CASH- FLOW STATEMENT AS CASH OUT-FLOW. APART FROM THE ABOVE, CERTAIN OTHER REFERENCES ABO UT INVESTMENTS IN SHARES, UNACCOUNTED EXPENSES AND RECEIPTS AND WORKING CAPIT AL HAVE BEEN MADE BY THE CIT. LD. A.R. HAS IN THIS REGARD REFERRED TO THE EVIDENCES F URNISHED IN THE PAPER BOOK, VOL. 17. WE HAVE CONSIDERED CONTENTIONS OF BOTH THE SIDES A ND THE EXPLANATIONS PLACED ON BEHALF OF THE APPLICANTS. THERE IS NO MATERIAL TO S UBSTANTIATE THE FACT THAT ALL OR ANY OF THE MOU WAS ACTUALLY ACTED UPON, AND ANY DIVISION OR DI STRIBUTION OF ASSETS ACTUALLY TOOK PLACE ON THAT BASIS. REGULAR BALANCE SHEETS OF DIFF ERENT YEARS SHOW THAT THERE HAS BEEN NO SUCH DIVISION OR DISTRIBUTION. THERE ARE A FEW INST ANCES WHERE SOME PAYMENTS COULD HAVE ACTUALLY BEEN MADE ON THE BASIS OF A MOU. SUCH PAYM ENTS HAVE ALSO BEEN EXPLAINED THROUGH THE CASH-FLOW STATEMENT. WE ARE, THEREFORE , OF THE OPINION THAT THE UN-EXECUTED MOUS HAVE NO BEARING ON THE UNDISCLOSED INCOME OF T HE APPLICANTS. DECISION IN ITA NO. 1831/K/2010 OF REVENUES APPEAL IN THE CASE OF LATE SHRI BASANT KUMAR SABOO. 8 ITA 1828, 1662 & 1831/K/2010 SHRI SANJEEV SABOO., A.Y.2002-03 7. WE FIND FROM THE ABOVE ORDER OF SETTLEMENT COMMI SSION WHEREBY IT IS HELD THAT THERE IS NO MATERIAL TO SUBSTANTIATE THE FACT THAT ALL OR AN Y OF THE MOU WAS ACTUALLY ACTED UPON AND ANY DIVISION OR DISTRIBUTION OF ASSET ACTUALLY TOOK PLA CE ON THAT BASIS. IT IS ALSO A FINDING BY SETTLEMENT COMMISSION THAT EVEN FROM REGULAR BALANC E SHEETS IT IS CLEAR THAT THERE IS NO SUCH DIVISION OR DISTRIBUTION. BUT THERE ARE FEW INSTAN CES WHERE SOME PAYMENTS COULD HAVE ACTUALLY BEEN MADE ON THE BASIS OF THESE MOUS BUT THE PAYMEN TS HAVE BEEN EXPLAINED THROUGH CASH FLOW STATEMENT. IN VIEW OF THE ABOVE FINDINGS, WE FIND THAT IN THE MOU DATED 31.01.2002 DECEASED ASSESSEE HAD STATED THAT HE IS RESIGNING F ROM HRRFM BECAUSE HE HAD TAKEN RS 30 LAKH FROM MARKET IN THE NAME OF HRRFM BUT SAID MOU DOES NOT REFER TO ANY PAYMENT OF RS.30 LACS BY OTHER GROUP OF SABOO FAMILY TO DECEAS ED ASSESSEE, STILL BY SAYING THAT DECEASED ASSESSEE WOULD HAVE NOTHING TO TAKE OR GIVE TO HRRF M AFTER RESIGNING FROM HRRFM, THE LIABILITY OF RS 30 LACS TO THE MARKET IS THE LIABIL ITY OF THE BUSINESS OF THE OTHER GROUP OF SABBO FAMILY AND NOT THE LIABILITY OF THE DECEASED ASSESS EE. THE AMOUNT OF RS 30 LACS RECEIVED FROM MARKET HAS NOT BEEN CONSIDERED AS A PERSONAL LIABIL ITY OF THE DECEASED ASSESSEE IN THE MOU BECAUSE IT WAS OBTAINED ON BEHALF OF THE FAMILY BUS INESS OR THE COMPANY, THOUGH IT BECAME A REASON FOR THE DECEASED ASSESSEE TO RESIGN. LOANS O F RS 14.19 LAKH, BROUGHT IN BY THE DECEASED ASSESSEE IN JANUARY TO APRIL 1999 FOR THE FAMILY BU SINESS BEFORE THE SEPARATION ON 31.01.2002 ARE APPEARING IN THE CASH FLOW STATEMENT SUBMITTED BEFORE SETTLEMENT COMMISSION BY THE OTHER GROUP OF SABOO FAMILY. THESE ENTRIES ALSO SUGGEST T HAT LOANS BROUGHT IN BY THE DECEASED ASSESSEE WERE APPLIED IN THE FAMILY BUSINESS AND RE PAYMENT OF SUCH LOANS TO EITHER DECEASED ASSESSEE OR TO THE MARKET PARTIES ON HIS BEHALF BY THE OTHER GROUP OF SABOO FAMILY CANNOT BE TREATED AS INCOME OF THE DECEASED ASSESSEE. ONCE I T IS A FACT ESTABLISHED THAT THIS AMOUNT OF RS.30 LACS WAS FOR THE BUSINESS OF THE FAMILY BEFOR E SEPARATION ON 31.01.2002 AND ALSO APPEARING IN THE CASH FLOW STATEMENT FILED BEFORE S ETTLEMENT COMMISSION AND ACCEPTED, NOW IT CANNOT BE SAID THAT THIS AMOUNT BELONGS TO ASSESSEE AS HIS INCOME. ACCORDINGLY, WE CONFIRM THE ORDER OF CIT(A) AND THIS ISSUE OF REVENUES APPEAL IS DISMISSED. DECISION IN THE CASE OF ITA NO.1828/K/2010 IN THE C ASE OF SANJEEV SABOO 8. SINCE, THE FACTS ARE EXACTLY IDENTICAL IN THE PR ESENT CASE WHAT WAS IN THE CASE OF LATE SHRI BASANT KUMAR SABOO IN ITA NO.1831/K/2010, TAKI NG A CONSISTENT VIEW, AS THE CIT(A) HAS DECIDED THIS ISSUE EXACTLY ON SIMILAR FACTS AND ON THE BASIS OF DECISION OF SETTLEMENT COMMISSION IN THE CASE OF SABOO GROUP OF CASES (SUP RA), WE DISMISS THIS ISSUE OF REVENUES APPEAL. COMING TO ASSESSEES APPEAL IN ITA NO. 1662/K/2010 IN THE CASE OF LATE BASANT KUMAR SABOO THROUGH LEGAL HEIR SANJEEV SABOO. 9 ITA 1828, 1662 & 1831/K/2010 SHRI SANJEEV SABOO., A.Y.2002-03 9. WE FIND THAT THE AO AS WELL AS CIT(A) HAS CONFIR MED THIS ADDITION ON THE BASIS OF MOU DATED 31.12.2002, WHEREIN, ACCORDING TO THEM, IT IS STIPULATED THAT A PAYMENT OF RS.20 LACS FROM ASHOK KUMAR SABOO TO THE DECEASED ASSESSEE HAS PAID OVER A PERIOD OF TIME TO HELP HIM IN RUNNING HIS BUSINESS OF WASTE PAPER AND IN RUNNING THE BUSINESS OF HIS SON SANJEEV SABOO OF ATTA/MAIDA. ACCORDING TO CIT(A), THIS IS A DIRECT PAYMENT TO THE DECEASED ASSESSEE WHICH IS IN THE NATURE OF COMPENSATION RECEIVED FOR RESIGNING F ROM THE DIRECTORSHIP OF HRRFM. ACCORDING TO CIT(A), SUCH COMPENSATION, IS THEREFORE, TAXABLE U/S. 28(II)(A) OF THE ACT ON DUE BASIS. ACCORDINGLY, CIT(A) CONFIRMED THE ACTION OF AO. WE FIND THAT THE AO HAS MADE ADDITION ON THE BASIS OF FOLLOWING NOTINGS IN MOU: . ISKE LABYA WASTE PAPER AWING ATA MAIDA KA KAM S ANJEEV KA YAPAS SUCHARU RUPSE CHALANE KE LIYA KARIB RS.20 LAKH RUPAYA KI JO DARKE R LAGAGI WOHA ASHOK MUJHA DEGA. WE ARE OF THE VIEW THAT THE AO HAS SIMPLY UNDERSTOO D THAT SHRI BASANT KUMAR SABOO HAS RECEIVED THIS AMOUNT OF RS.20 LAKHS FROM ASHOK KUMA R SABOO TO SMOOTHLY RUN THE BUSINESS OF WASTE PAPER AND THE BUSINESS OF ATA AND MAIDA RUN B Y SHRI SANJEEV SABOO. BUT THE CONTENTS OF THE ABOVE MOU DATED 31.01.2002 EXPLAINS THE THING I N A DIFFERENT WAY THAT SHRI ASHOK KUMAR SABOO WILL GIVE A SUM OF RS.20 LAKH FOR THE BUSINES S OF WASTE PAPER RUN BY ASSESSEE AND ALSO THE BUSINESS OF ATA/MAIDA RUN BY SANJEEV, WHENEVER REQUIRED. HOWEVER, THE ASSESSEE COULD NOT EXPLAIN THE MEANING OF ABOVE NOTINGS AND AO COU LD NOT UNDERSTAND THE REAL MEANING OR INTERPRETATION OF THE ABOVE NOTINGS IN MOU DATED 31 .01.2002, ON THE BASIS OF WHICH ADDITION IS MADE, THE ADDITION CANNOT BE SUSTAINED B Y INVOKING THE PROVISIONS OF SECTION 28(II)(A) OF THE ACT AS DONE BY CIT(A). IN THIS CASE, IT IS CLEAR F ROM THE ABOVE NOTING THAT IT IS NOT THE CASE THAT ASSESSEE HAS RECEIVED THIS AMOUNT RATHER IT WAS A P ROMISE TO GIVE THIS AMOUNT FOR HELP, IT IS NOT CLEAR WHEN AND HOW. ACCORDINGLY, ON THE BASIS OF S URMISES AND CONJECTURES, THIS ADDITION CANNOT BE SUSTAINED. WE DELETE ACCORDINGLY. 10. THE NEXT ISSUE IN ITA NO. 1831/K/2010 IN THE CA SE OF LATE SHRI BASANT KUMAR SABOO THROUGH LEGAL HEIR SHRI SANJEEV SABOO, IN REVENUES APPEAL, IS AS REGARDS TO THE ORDER OF CIT(A) DELETING THE ADDITION OF HOUSEHOLD EXPENSES OF RS.5 0,000/- (WRONGLY NOTED IN THE GROUND OF APPEAL OF REVENUE AS RS.50 LACS). FOR THIS, REVENU E HAS RAISED FOLLOWING GROUND NO.4. 4. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE LOAN OF RS. 50,00,000/- MADE ON A CCOUNT OF HOUSE HOLD EXPENSES ON THE BASIS OF SEIZED DOCUMENT PAGES NO. 8&9 OF ID MARK AKS-35 WITHOUT APPRECIATING THE FACTS EVALUATED IN THE ASSESSMENT ORDER. 11. AFTER HEARING RIVAL SUBMISSIONS AND GOING THROU GH FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE SOURCE OF HOUSEHOLD EXPENDITURE IS WELL EXPLAINED BY THE PIN MONEY OF PERSONAL ASSISTANCE ABOUT RS.13.5 LAKH PROVIDED BY SHRI HANUMAN PRASAD SABOO TO THE 10 ITA 1828, 1662 & 1831/K/2010 SHRI SANJEEV SABOO., A.Y.2002-03 DECEASED ASSESSEE AND IS ALSO COVERED IN THE TOTAL PAYMENT OF ABOUT RS.61 LAKHS SHOWN IN THE ACCOUNT DRAWING BKS IN THE CASH FLOW STATEMENT OF THE OTHER GROUP OF SABOO FAMILY SUBMITTED BEFORE SETTLEMENT COMMISSION. THE PIN MON EY PROVIDED BY SHRI HANUMAN PRASAD SABOO TO THE DECEASED ASSESSEE IS ABOUT RS.30,000/- MONTH X 45 MONTHS = ABOUT RS.13.5 LAKH. HENCE, THE ADDITION ON ACCOUNT OF HOUSEHOLD EXPENDI TURE SO MADE BY ASSESSING OFFICER IS UNCALLED FOR. ACCORDINGLY, THE DIRECTION OF CIT(A) TO DELETE THE SAME IS UPHELD. THIS GROUND OF REVENUES APPEAL IS DISMISSED. 12. IN THE RESULT, APPEALS OF THE REVENUE ARE DISMI SSED AND THAT OF ASSESSEE IS ALLOWED. 13. ORDER PRONOUNCED IN OPEN COURT ON 21.10.2011. SD/- SD/- . !' !'!' !' . , (C. D. RAO) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( ' ' ' ' ) )) ) DATED : 21ST OCTOBER, 2011 ./ $01 2 JD.(SR.P.S.) - 3 +4 54&6- COPY OF THE ORDER FORWARDED TO: 1 . )* / APPELLANT SHRI SANJEEV SABOO, SHRI SANJEEV KUMAR SABOO L/R OF LATE SHRI BASANT KUMAR SABOO AND SHRI SANJE EV KUMAR SABOO, L/H OF LATE BASANT KR. SABOO, C/O S. L. KOCHAR, ADVOCAT E, 86, CANNING STREET, KOLKATA-700 001. 2 +,)* / RESPONDENT, DCIT, C.C. XIII, KOLKATA. 3 . -$ ( )/ THE CIT(A), KOLKATA 4. -$ / CIT, KOLKATA 5 . => +$ / DR, KOLKATA BENCHES, KOLKATA ,4 +/ TRUE COPY, -$?/ BY ORDER, 1 /ASSTT. REGISTRAR .