ITO (Central)-I, Nashik V. Shri Anant Keshav Rajegaonkar, Nashik

ITA 1685/PUN/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0873 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-11-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 01-09-2015
• Assessment Year: 2011-2012
• Appeal Filed On: 04-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJEEV MUTHA
• Assessee Lawyers: B C MALAKAR
• Keywords: Unexplained expenditure; Business income; Document seized; Onus to prove; Retraction; Documents seized
• Section: 143(3)

Judgement Text

] IQ.KS ] IQ.KS ] IQ.KS ] IQ.KS IQ.KS IQ.KSIQ.KS IQ.KS IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . . , , ' # BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM . / ITA NOS.1683 TO 1685/PN/2013 '% % / ASSESSMENT YEARS : 2006-07, 07-08 & 11-12 ITO, CENTRAL-1, NASHIK . / APPELLANT V/S SHRI ANANT KESHAV RAJEGAONKAR, G-3, CROWN COMMERCIAL COMPLEX, SHARANPUR ROAD, OPP :RAJIV GANDHI BHAVAN, NASHIK PAN NO. ACPPR9345E . / RESPONDENT / ASSESSEE BY : SHRI SANJEEV MUTHA / RESPONDENT BY : SHRI B.C. MALAKAR / ORDER PER R.K. PANDA, AM : THE ABOVE 3 APPEALS FILED BY THE REVENUE ARE DIRECTED AG AINST THE SEPARATE ORDERS DATED 05-06-2013 OF THE CIT(A)-I, NASHIK RELATING TO ASSESSMENT YEARS 2006-07, 2007-08 & 2011-1 2 RESPECTIVELY. SINCE COMMON GROUNDS HAVE BEEN TAKEN BY THE REVENUE IN ALL THESE APPEALS, THEREFORE, THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. / DATE OF HEARING :08.09.2015 / DATE OF PRONOUNCEMENT:09.11.2015 2 ITA NOS.1683 TO 1685/PN/2013 ITA NO.1683/PN/2013 (A.Y. 2006-07) : 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS A N INDIVIDUAL AND AN ARCHITECT BY PROFESSION. HE ALSO DERIVES OTHER INCOME, I.E. REMUNERATION FROM COMPANIES IN WHICH HE IS A DIRECTOR. HE FILED HIS ORIGINAL RETURN OF INCOME ON 28-09-200 7 DECLARING TOTAL INCOME OF RS.3,26,530/-. A SEARCH ACTION U/S.132(1) OF THE I.T. ACT WAS CONDUCTED IN THE BUSINESS AS WELL AS RESIDENTIAL PREMISES OF THE ASSESSEE ON 17-09-2010. IN RESPONSE T O THE NOTICE U/S.153A OF THE ACT, THE ASSESSEE FILED HIS RETURN OF INCO ME DECLARING TOTAL INCOME OF RS.10,27,530/- BY OFFERING ADDITIONAL INCOME OF RS.7,01,001/-. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO NOTED THAT A RED EXECUTIVE DIARY AS PER ANNEXURE-8 AND A LOO SE PAPER BUNDLE MARKED AS ANNEXURE A/7 WAS FOUND FROM THE RESIDE NTIAL PREMISES OF THE ASSESSEE. AS PER THE ABOVE DOCUMENTS, THE ASSESSEE HAS RECEIVED CASH RECEIPTS AMOUNTING TO RS.19, 00,000/- FROM MR. GULAB & MRS. YOGITA BADGUJAR DURING THE RELEVANT ASSESSMENT YEAR, THE DETAILS OF THE SAID CASH RECEIPTS FO UND & SEIZED ARE AS UNDER : SR. NO. PAGE NO. O F ANN. A/7 DATE NAME AMOUNT (RS. IN LACS) 1 12 03 - 03 - 2006 MR. GULAB & MRS. YOGITA BADGUJAR 9.00 2 10 13 - 02 - 2006 - DO - 10.00 TOTAL 19.00 4. ON BEING QUESTIONED BY THE AO, IT WAS EXPLAINED BY TH E ASSESSEE THAT THE IMPUGNED AMOUNT WAS RECEIVED BY HIM IN HIS CAPACITY AS DIRECTOR OF M/S. SUYOJIT INFRASTRUCTURE LTD. (P RESENTLY KNOWN AS M/S. SUYOJIT INFRASTRUCTURE PVT. LTD.) AND FOR A ND ON 3 ITA NOS.1683 TO 1685/PN/2013 BEHALF OF THE PARTNERSHIP FIRM M/S. SUYOJIT BAUG AS ADVANC E AGAINST SALE OF SHOP NO. L-1 & L-2 IN THE PROPOSED PROJE CT OF M/S. SUYOJIT BAUG, THE CONSTRUCTION OF WHICH WAS NOT YET STAR TED BY THE ASSESSEE OR M/S. SUYOJIT BAUG. IT WAS SUBMITTED THAT T HE AMOUNT OF RS.19 LAKHS IS TOWARDS PART PAYMENT OF TOTAL CONSIDERAT ION OF RS.2,16,00,000/- OF THE AGREED AMOUNT OF THE PROPOSED SALE OF SHOPS. IT WAS SUBMITTED THAT THE SAID AMOUNT HAS BEEN SHOWN AS LIABILITY IN THE BOOKS OF THE FIRM. A COPY OF THE PARTNERSHIP DEED WAS ALSO FILED. 5. HOWEVER, THE AO DID NOT ACCEPT THE EXPLANATION OFFERED BY THE ASSESSEE AND TREATED THE SAID AMOUNT AS UNEXPLAINED CA SH RECEIPTS AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE FOR R EASON THAT M/S. SUYOJIT BAUG HAS NOT FILED ANY INCOME TAX RETURN AN D THE PARTNERSHIP DEED OF THE SAID FIRM WAS ALSO NOT REGISTERED . THE AO FURTHER HELD THAT THE SAID RECEIPTS ARE NOT RECORDED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE AND THE ASSESSEE IN HIS STATEM ENT RECORDED U/S.132(4) HAS OFFERED THE SAME AS ADDITIONAL INCOME ON ACCO UNT OF UNACCOUNTED BUSINESS RECEIPTS BELONGING TO SUYOJIT GROU P. THE ASSESSEE IN HIS STATEMENT RECORDED U/S.132(4) HAS ALSO OFFE RED TOTAL ADDITIONAL INCOME OF RS.2.98 CRORES ON ACCOUNT OF SUCH AMOU NT RECEIVED FROM BADGUJAR FAMILY FROM TIME TO TIME OUT OF WH ICH RS.19,00,000/- WERE RECEIVED DURING THE YEAR UNDER CONSID ERATION. THE AO ACCORDINGLY MADE ADDITION OF RS.19 LAKHS TO THE TO TAL INCOME OF THE ASSESSEE. 6. SIMILAR ADDITIONS WERE MADE DURING A.Y. 2007-08 AMOUNTIN G TO RS.2,02,00,000/- AND A.Y. 2011-12 AMOUNTING TO RS.67 LAKHS. 4 ITA NOS.1683 TO 1685/PN/2013 7. BEFORE CIT(A) IT WAS ARGUED THAT THE AMOUNT OF RS.2.98 CRORES WAS WRONGLY OFFERED AS ADDITIONAL INCOME AND ACCORDINGLY A N AFFIDAVIT DATED 12-11-2010 WAS IMMEDIATELY FILED IN THE OFFICE O F DY. DIRECTOR OF INCOME TAX (INV-I), NASHIK ON 15-11-2010. THE COPY OF THE SAID AFFIDAVIT WAS FILED BEFORE CIT(A). IT WAS ARGUED TH AT THE IMPUGNED AMOUNT IS RECEIVED AGAINST PROPOSED SALE OF SHOP NOS. L- 1 & L-2 OF THE BUILDING SUYOJIT BAUG, THE CONSTRUCTION OF WHICH WAS STILL NOT COMMENCED. IT WAS PLEADED THAT THE IMPUGNED AM OUNT SO RECEIVED IS LIABILITY IN THE HANDS OF M/S. SUYOJIT BAUG, I.E. A PARTNERSHIP FIRM TO WHICH IT RELATES. IT WAS FURTHER SUBMIT TED THAT THE SAID AMOUNT WAS RECEIVED BY THE ASSESSEE ON BEHALF OF M/S. SUYOJIT BAUG AND NOT IN HIS INDIVIDUAL CAPACITY. 8. IT WAS ARGUED THAT A MEMORANDUM OF UNDERSTANDING (M OU) WAS ENTERED ON 30-08-2006 BETWEEN M/S. SUYOJIT BAUG, A PARTNERSHIP FIRM, THROUGH ITS PARTNER M/S. SUYOJIT INFRASTR UCTURE PVT. LTD. AS ONE PART AND M/S. GULAB MAHARU BADGUJAR (H UF) AS OTHER PART OF THE AGREEMENT IN RESPECT OF PROPOSED SALE OF SHOP NOS. L-1 & L-2 TO BE CONSTRUCTED ON SURVEY NOS. 643B, CITY SURVEY NO. 614B, F.P. NO.127, TPS-I. THE TOTAL CONSIDERATION AS PER TH E SAID MOU DATED 30-08-2006 AGAINST THE PROPOSED SALE OF SAID SHOPS WAS RS.2,16,00,000/- AND OUT OF THE SAME RS. 19 LAKHS WERE RECEIVED BY THE ASSESSEE ON BEHALF OF M/S. SUYOJIT BAUG D URING THE YEAR. THE SAID AMOUNT OF RS.19 LAKHS WAS RECEIVED AS ADV ANCE AGAINST SALE OF SHOPS ON BEHALF OF M/S. SUYOJIT BAUG IN THE CAPACITY OF DIRECTOR OF THE COMPANY M/S. SUYOJIT INFRASTRUCTURE PV T. LTD. AND THE COMPANY M/S. M/S. SUYOJIT INFRASTRUCTURE PVT. LTD. IN TURN IS THE PARTNER IN THE SAID PARTNERSHIP FIRM M/S. SUYOJIG BAUG . THE SAID ADVANCE RECEIVED FROM M/S. GULAB MAHARU BADGUJAR H UF WAS 5 ITA NOS.1683 TO 1685/PN/2013 ACCOUNTED IN THE BOOKS OF ACCOUNT OF M/S. SUYOJIT BAUG, T HE PARTNERSHIP FIRM. IT WAS ALSO EXPLAINED TO THE AO THAT SA ID AMOUNT OF ADVANCE RECEIVED FROM GULAB MAHARU BADGUJAR (HUF) DURIN G THE IMPUGNED YEAR IS NOT AN INCOME OF M/S. SUYOJIT BAUG AS W ELL AS THE ASSESSEE AS THE CONSTRUCTION OF SAID PROJECT FOR WHICH T HE SAID ADVANCE WAS RECEIVED IS NOT YET COMMENCED AND THEREFOR E THE SAID AMOUNT RECEIVED FROM GULAB MAHARU BADGUJAR HUF IS A LIABILIT Y IN THE FIRM M/S. SUYOJIT BAUG. 9. BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE THE LD.CIT(A) DELETED THE ADDITION BY OBSERVING AS UNDER : 5.2 I HAVE CAREFULLY CONSIDERED FACTS OF THE CASE, T HE ASSESSMENT ORDER AND THE RIVAL SUBMISSIONS. IT IS UNDISPUTED FACT TH AT THE IMPUGNED TRANSACTION IS RECORDED IN THE BOOKS OF ACCOU NT OF M/S. SUYOJIT BAUG. THE A.O. HAS ERRED IN REJECTING THE CO NTENTION OF THE APPELLANT JUST ON THE GROUND THAT THE SAID FIRM HAS NO T FILED ANY INCOME-TAX RETURN AND THE SAME WAS NOT REGISTERED UNDE R THE PARTNERSHIP ACT, 1932 WHEN THE EXISTENCE OF THE FIRM IS NOT IN DISPUTE. THE APPELLANT HAS ALSO PLACED ON RECORD THE COPY OF A GREEMENT DATED 30/08/2006 ENTERED INTO WITH MR. BADGUJAR ON BEHALF OF THE APPELLANT. THE SAID FIRM IS ALSO EVIDENCED BY THE PARTNERSHIP DEE D DATED 6 TH SEPTEMBER, 2003 AS WELL AS REVISED PARTNERSHIP DEED DA TED 20/07/2006 CONTAINING PARTNERS M/S. SUYOJIT INFRASTR UCTURE LTD. AS WELL AS MR. RAJESH BALWANT LAD. MOREOVER, THE CAPITAL CONTRIBUTION IN THE SAID FIRM BY M/S. SUYOJIT INFRASTRUCTURE LTD. IS AL SO APPEARING IN THE AUDITED BOOKS OF ACCOUNT OF THE SAID COMPANY. THE REA SONS FURNISHED BY APPELLANT FOR NOT FILING OF THE RETURN OF INCOME AS WELL AS NOT GETTING THE FIRM REGISTERED UNDER THE PARTNERSHIP ACT ARE APP EARED TO BE BONAFIDE. THE FACT THAT THE IMPUGNED AMOUNT WAS RECE IVED FROM MR. BADGUJAR AGAINST THE PROPOSED SALE OF SHOP NOS. L-1 & L-2 IN THE BUILDING NAMELY SUYOJIT BAUG, THE CONSTRUCTION OF WH ICH WAS NOT YET STARTED DURING THE YEAR UNDER APPEAL IS NOT IN DISPUTE . IN SUCH CIRCUMSTANCES, THE AMOUNT RECEIVED FROM MR. BADGUJAR IS LIABILITY IN THE BOOKS OF ACCOUNT OF M/S. SUYOJIT BAUG AND THE SAME CANNOT BE TREATED AS INCOME BY ANY STRETCH OF IMAGINATION BECAU SE IF THE SAID RECEIPT OF MONEY IS TREATED AS INCOME DURING THE YEAR UNDER APPEAL, THEN AT THE TIME OF ACTUAL CONSTRUCTION OF THE BUILD ING, THE EXPENSES INCURRED ON THE CONSTRUCTION OF SAID SHOPS WILL HAVE TO DISCLOSE AS LOSSES, WHICH IS ILLOGICAL. 5.3 ON CAREFUL ANALYSIS OF THE STATEMENT RECORDED OF THE APPELLANT, IT DEARLY TRANSPIRES THAT WHAT THE APPELLANT HAS OFFERED IS UNRECORDED RECEIPTS AS INCOME. THE IMPUGNED TRANSACTION IS NOT RE CORDED IN THE BOOKS OF ACCOUNT OF THE APPELLANT BECAUSE THE SAID AMO UNT WAS RECEIVED BY THE APPELLANT ON BEHALF OF M/S. SUYOJIT BAUG AND THE 6 ITA NOS.1683 TO 1685/PN/2013 APPELLANT WAS NOT CONNECTED WITH THE SAID TRANSACTION IN HIS INDIVIDUAL CAPACITY. THE HEAVY RELIANCE OF THE A.O. ON THE DISC LOSURE DURING THE STATEMENT RECORDED OF THE APPELLANT U/S. 132(4) OF TH E IMPUGNED RECEIPTS AS INCOME IS INCORRECT ON THE FACE OF THE TRA NSACTION AND ALSO WHEN THE SAID STATEMENT IS WITHDRAWN BY THE APPELLANT BY WAY OF AN AFFIDAVIT. THE LD. A.R. HAS CORRECTLY POINTED OUT TH AT THERE IS NO ESTOPPEL AGAINST THE STATUTE AND WHAT IS OTHERWISE NOT T AXABLE CANNOT BECOME TAXABLE BECAUSE OF THE ADMISSION OF THE ASSESSEE. THEREFORE, THE A.O. IS NOT JUSTIFIED IN MAKING THE IMPUGNED ADDITION OF RS. 19,00,000/- BEING AMOUNT RECEIVED FROM MR. & MRS. BADGUJAR AS THE SAME IS A LIABILITY AND NOT INCOME PARTICULARLY WHEN T HE SAID TRANSACTION IS DISCLOSED BY MR. & MRS. BADGUJAR IN THEIR RESPECTIVE FINANCIAL STATEMENTS AS ADVANCE GIVEN FOR PURCHASE OF SH OPS IN VIEW OF ABOVE, THE IMPUGNED ADDITION OF RS.19,000/- IS UNJUSTI FIED AND IS DIRECTED TO BE DELETED. THIS GROUND OF APPEAL NO.1 IS ALLOWED. 10. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVENUE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 19,00,000/- MADE BY THE AO ON ACCOUNT OF UNEXPLAINED CASH RECEIPTS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) HAS ERRED IN NOT APPRECIATING THE FACT TH AT THE INCRIMINATING DOCUMENT IN ANNEXURE A-8 WHICH IS A RED DAIRY AND AN NEXURE A-7, LOOSE PAPER BUNDLE WHICH CONTAINS CASH RECEIPTS ISSUED BY THE ASSESSEE IS A DIRECT EVIDENCE. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LD. CIT(A) HAS ERRED IN NOT APPRECIATING THE FACT TH AT THE ASSESSEE, IN HIS STATEMENT RECORDED DURING THE COURSE OF SEARCH U/S 1 32(4) IN REPLY TO SPECIFIC QUESTION NO.37, HAD ACCEPTED THAT THE CASH RECEIPTS HAD BEEN ISSUED AND SIGNED BY HIM AND FURTHER ACCEPTED THE SAME AS UNACCOUNTED BUSINESS RECEIPTS. ASSESSEE SUBSEQUENTLY IN REPLY TO QUESTION NO.6, VOLUNTARILY SURRENDERED RS.2.98 CRORES A S ADDITIONAL INCOME FOR THE CURRENT YEAR 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) HAS ERRED IN NOT APPRECIATING THE FACT T HAT THE DOCUMENTS FOUND DURING THE SEARCH AT THE RESIDENTIAL PREMISES OF THE ASSESSEE, ON THE BASIS OF WHICH THE ALLEGED ADDITION HAS BEEN MADE WERE IN NO WAY CONNECTED WITH M/S. SUYOJIT BAUG. THE MOREOVER THE LINKING OF THE NAME OF ABOVE FIRM AND SUBSEQUENT RETRACTION OF THE A DMITTANCE OF ADDITIONAL INCOME, AFTER SEARCH IS NOTHING BUT AN 'A FTER THOUGHT' TO EVADE TAX. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) WAS NOT JUSTIFIED IN OVERLOOKING THE DIREC T EVIDENCE FOUND DURING THE SEARCH WHICH HAS BEEN RIGHTLY CORRELATED B Y THE AO DURING THE SCRUTINY WITH THE ASSESSEE'S BUSINESS AND THE PARTIES TO THE TRANSACTION, HAVE CONFIRMED THE PAYMENT TO THE ASSESSEE. 7 ITA NOS.1683 TO 1685/PN/2013 6. ON THE FACTS AND THE IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD.CIT(A) HAS FAILED TO APPRECIATE THAT THE ASSESSEE HAS NOT DISCHARGED THE BURDEN OF PROOF CAST UPON HIM WITH REG ARD TO UNEXPLAINED CASH RECEIPTS FOUND DURING THE COURSE OF SE ARCH. 7. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, MODIFY , DELETE, AND AMEND ANY OF THE GROUNDS, AS PER THE CIRCUMSTANCES OF T HE CASE. 8. THE APPELLANT PRAYS LEAVE TO ADDUCE SUCH FURTHER EVIDENCE TO SUBSTANTIATE ITS CASE, AS THE OCCASION MAY DEMAND. 11. THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY CHALLEN GED THE ORDER OF THE CIT(A). HE SUBMITTED THAT DURING THE COURSE OF SEARCH INCRIMINATING DOCUMENTS AS PER ANNEXURE A8 WHICH IS A RED DIARY AND ANNEXURE A7 WHICH IS A LOOSE PAPER BUNDLE WERE FOUND FROM THE RESIDENCE OF THE ASSESSEE. THE LOOSE BUNDLE CONTAINS CASH RECEIPTS ISSUED BY THE ASSESSEE WHICH IS A DIRECT EVIDENC E. THE CASH RECEIPTS WERE ISSUED AND SIGNED BY THE ASSESSEE AND WERE NOT RECORDED IN HIS REGULAR BOOKS OF ACCOUNT. THE CIT(A) IGNOR ED THE EVIDENCE ON RECORD. FURTHER, THE ASSESSEE IN HIS STATEM ENT RECORDED U/S.132(4) OF THE I.T. ACT DURING THE COURSE OF SEARCH IN REPLY TO SPECIFIC QUESTION NO.37 HAS ACCEPTED THAT CASH RECEIPTS HAD BEEN ISSUED AND SIGNED BY HIM AND FURTHER ACCEPTED THE SAME AS UNACCOUNTED BUSINESS RECEIPTS. SUBSEQUENTLY, THE ASSES SEE IN HIS REPLY TO QUESTION NO.6 HAD VOLUNTARILY SURRENDERED RS.2.9 8 CRORES AS ADDITIONAL INCOME FOR THE CURRENT YEAR. SINCE THE RECE IPTS ARE SPECIFIC AND NOT RECORDED IN THE REGULAR BOOKS OF ACCOUN T AND REFLECTS THE ENTIRE TRANSACTIONS OF UNEXPLAINED RECEIPTS, T HEREFORE, THE SUBSEQUENT RETRACTION OF THE ASSESSEE IS NOTHING BU T AN AFTERTHOUGHT. HE ACCORDINGLY SUBMITTED THAT THE ORDER OF THE CIT(A) BE REVERSED AND THAT OF THE AO BE ACCEPTED. 12. THE LD. COUNSEL FOR THE ASSESSEE ON THE OTHER HAND WHILE SUPPORTING THE ORDER OF THE CIT(A) SUBMITTED THAT THE PA RTNERSHIP 8 ITA NOS.1683 TO 1685/PN/2013 DEED IS DATED 06-09-2003 WHICH WAS RECONSTITUTED ON 20 -07-2006. REFERRING TO THE COPY OF THE PANCHANAMA IN THE CASE OF S UYOJIT INFRASTRUCTURE PVT. LTD. AND OTHERS HE DREW THE ATTENT ION OF THE BENCH TO THE LIST OF INVENTORIES/BOOKS ETC. FOUND/SEIZED DU RING THE COURSE OF SEARCH, COPY OF WHICH IS PLACED AT PAGE 11 OF TH E PAPER BOOK NO.2. REFERRING TO THE COPY OF THE AUDITED PROFIT AN D LOSS ACCOUNT OF SUYOJIT INFRASTRUCTURE LTD. DATED 30-08-2008 THE LD. COUNSEL FOR THE ASSESSEE DREW THE ATTENTION OF THE BENC H TO THE ITEM NO.7 OF NOTES FORMING PART OF THE ACCOUNTS AS AT 3 1-03-2008 AT PAGE 28 OF PAPER BOOK NO.2 WHEREIN THE NAME OF SUYOJIT B AUG IS APPEARING UNDER THE HEAD RELATED PARTIES/ASSOCIATE CONC ERNS. REFERRING TO CLAUSE 10 OF THE NOTES FORMING PART OF THE A CCOUNTS AT PAGE 29 OF PAPER BOOK NO.2 THE LD. COUNSEL FOR THE ASSES SEE DREW THE ATTENTION OF THE BENCH TO THE DETAILS OF INVESTMENTS IN PARTNERSHIP FIRM WHEREIN THE NAME OF SUYOJIT BAUG IS APPEA RING. REFERRING TO THE COPY OF THE NOTICE ADDRESSED BY THE AO TO THE MANAGING DIRECTOR OF M/S. SUYOG INFRASTRUCTURE LTD. DURING THE ASSESSMENT PROCEEDINGS U/S.153A A COPY OF WHICH IS PLACED AT PAGES 31 TO 37 OF PAPER BOOK NO.2 THE LD. COUNSEL FOR TH E ASSESSEE DREW THE ATTENTION OF THE BENCH TO QUERY NO.7 WHEREIN T HE AO HAD ASKED REGARDING THE MOU DATED 09-07-2006. HE SUBMITTE D THAT THE ABOVE DOCUMENTS AND THE QUESTIONNAIRE ISSUED BY TH E AO CLEARLY ESTABLISH THE EXISTENCE OF THE PARTNERSHIP FIRM. 13. REFERRING TO THE DECISION OF THE AHMEDABAD BENCH OF T HE TRIBUNAL IN THE CASE OF DCIT VS. M/S. OM DEVELOPERS VIDE IT A NO.314/AHD/2012 AND OTHER CONNECTED APPEALS ORDER DAT ED 08-05- 2015 HE SUBMITTED THAT THE TRIBUNAL IN THE SAID DECISION H AS HELD THAT THE AMOUNT WOULD BE TAXABLE IN THE YEAR IN WHICH TH E SALE 9 ITA NOS.1683 TO 1685/PN/2013 TRANSACTION IS CONCLUDED. THEREFORE, IN A CASE WHERE THE SALE TRANSACTIONS ARE INCOMPLETE, THEN EVEN ON-MONEY RECEIVED PRIOR TO THE DATE OF SALE DEEDS WERE HELD TO BE NON-TAXABLE. REFE RRING TO THE DECISION OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF SAIL DSP VR EMPLOYEES ASSOCIATION 1998 VS. UNION OF INDIA AND OTHER S REPORTED IN 181 CTR 367 THE LD. COUNSEL FOR THE ASSESSE E SUBMITTED THAT THE HONBLE HIGH COURT IN THE SAID DECISION HAS HELD THAT THERE IS NO ESTOPPEL AGAINST STATUTE. WHAT IS NOT OTHERWISE TAXABLE CANNOT BECOME TAXABLE BECAUSE OF ADMISSION OF THE ASSESSEE NOR THERE CAN BE ANY WAIVER OF THE RIGHT OTHE RWISE ADMISSIBLE TO THE ASSESSEE IN LAW. THE CHARGEABILITY IS NOT DEPENDING ON THE ADMISSION OF OR WAIVER BY THE ASSESSEE. CHARGEABILITY IS DEPENDENT ON THE CHARGING SECTION WHICH N EEDS TO BE STRICTLY CONSTRUED. HE ACCORDINGLY SUBMITTED THAT TH E ORDER OF THE CIT(A) BEING IN ACCORDANCE WITH LAW SHOULD BE UPHELD AND THE GROUNDS RAISED BY THE REVENUE SHOULD BE DISMISSED. 14. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOT H THE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE P APER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED TH E VARIOUS DECISIONS CITED BEFORE US. WE FIND IN THE INSTANT C ASE DURING THE COURSE OF SEARCH A DIARY AS PER ANNEXURE A 8 WAS FOUND FROM THE RESIDENTIAL PREMISES OF THE ASSESSEE. SIMILARLY, LOOS E PAPER BUNDLE MARKED AS ANNEXURE A7 WAS ALSO FOUND. THE SEIZED DOCUMENTS CONTAIN THE CASH RECEIPTS ISSUED BY THE ASSE SSEE TO MR. GULAB & MRS. YOGITA BADGUJAR AMOUNTING TO RS.19 LAKHS F OR THE YEAR. IT WAS EXPLAINED BY THE ASSESSEE THAT THE SAID AMOUNT WAS RECEIVED BY HIM IN HIS CAPACITY AS DIRECTOR OF M/S. SUYOJIT INFRASTRUCTURE LTD. ON BEHALF OF THE PARTNERSHIP FIRM M/S. SUYOJIT 10 ITA NOS.1683 TO 1685/PN/2013 BAUG AS ADVANCE AGAINST SALE OF SHOPS L1 AND L2 IN THE PROPOSED PROJECT OF SUYOJIT BAUG. THE CONSTRUCTION OF THE SAID P ROJECT WAS NOT YET STARTED. HOWEVER, WE FIND THE AO DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE FOR THE FOLLOWING REASONS : 1. THE PARTNERSHIP FIRM M/S. SUYOJIT BAUG DID NOT FILE A NY INCOME TAX RETURN AND THE DEED SUBMITTED BY THE ASSESSEE IS NOT REGI STERED. 2. DURING THE RECORDING OF THE STATEMENT OF THE ASSESSEE I N REPLY TO QUESTION NO.37, THE ASSESSEE HAS ACCEPTED THAT THIS CASH RE CEIPTS HAD BEEN ISSUED AND SIGNED BY HIM AND THE SAME ARE UNAC COUNTED BUSINESS RECEIPTS AMOUNTING TO RS.2.98 CRORES. HOWEVER, DURING RECORDING OF ANOTHER STATEMENT OF THE ASSESSEE IN REPLY TO QUESTION NO.6 THE ASSESSEE SUBMITTED THAT ALL THE SAID CASH RECEIP TS SHOWN TO HAVE BEEN RECEIVED FROM SHRI BADGUJAR FAMILY BELONG S TO SUYOJIT GROUP ONLY AND THE ASSESSEE HAS OFFERED RS.2.98 CRORES AS AN ADDITIONAL INCOME. 3. THE RECEIPTS ARE SPECIFIC AND SPEAKING ONE IN AS MUCH A S THEY ARE REFLECTING COMPLETE TRANSACTION WITHOUT INTERPRETATI ON. THEY ARE HAVING EVIDENTIARY VALUE AND THE SAME ARE NOT RECORD ED IN THE REGULAR BOOKS OF ACCOUNT THROUGH THE SAME RELATES TO T HE ASSESSEE. 15. WE FIND IN APPEAL THE LD.CIT(A) DELETED THE ADDITION ON THE GROUND THAT THE AMOUNT RECEIVED FROM MR. GULAB MAHARU BADGUJAR & MRS. BADGUJAR ARE THE LIABILITY OF THE FIRM AND IT IS NOT T HE INCOME OF THE ASSESSEE. ACCORDING TO THE LD.CIT(A) MERELY BEC AUSE THE ASSESSEE HAS ADMITTED IN HIS STATEMENT RECORDED DURING THE COURSE OF SEARCH U/S.132(4) THERE IS NO ESTOPPEL AGAINST THE STAT UTE AND WHAT IS OTHERWISE NOT TAXABLE CANNOT BECOME TAXABLE BEC AUSE OF THE ADMISSION OF THE ASSESSEE. WE DO NOT FIND ANY INFIRMITY IN TH E ORDER OF THE LD.CIT(A). FROM THE COPY OF THE AUDITED ACCO UNTS OF SUYOJIT INFRASTRUCTURE LTD. WHICH WAS SIGNED BY THE AUDIT ORS ON 30- 08-2008 THE NAME OF SUYOJIT BAUG APPEARS UNDER THE HE AD ASSOCIATE CONCERNS IN THE NOTES FORMING PART OF THE ACC OUNTS AS AT 31-03-2008. THE DETAILS OF INVESTMENT IN THE VARIOUS PART NERSHIP FIRMS BY THE COMPANY IS ALSO APPEARING AT CLAUSE 10 OF TH E NOTES FORMING PART OF ACCOUNTS WHICH READ AS UNDER : 11 ITA NOS.1683 TO 1685/PN/2013 NAME OF THE PARTNER PROFIT SHARING RATIO CAPITAL ACCOUNT AS ON MARCH 31, 2008 CAPITAL ACCOUNT AS ON MARCH 31, 2007 SUYOJIT GARDEN 96% 223008728 229039126 SUYOJIT BIOTECH 90% 7816295 2325274 SUYOJIT BAUG 90% 10246768 0 SUYOJIT BOT 96% 2627 3566 26390 TOTAL 267345357 231390790 16. WE FIND THE AO IN THE ASSESSMENT PROCEEDINGS FOR A.Y . 2005- 06 TO 2010-11 U/S.153A R.W.S 143(3) IN THE CASE OF MS. SU YOJIT INFRASTRUCTURE PVT. LTD. HAS ALSO ASKED THE MANAGING DIR ECTOR OF SUYOJIT INFRASTRUCTURE PVT. LTD. REGARDING THE MOU DATE D 09-07- 2006. THE RELEVANT QUERIES RAISED BY THE AO ARE AS UNDER : 7. PAGES 85 TO 87 IS A MOU DATED 09-07-2006 (STAMP P APER NO.06AA 6613165 BETWEEN YOU AND SHRI GULAB M. BADGU JAR. AS PER THIS AGREEMENT YOU HAD AGREED TO TRANSFER ON RENTAL B ASIS OF SHOP NO.G-44 TO G-53, ADMEASURING 4,000 SQ.FT. IN SUYOJIT YEWS COMPLED FOR A SUM OF RS.1.20 CRORES, OUT OF WHICH SUM OF RS.15 LACS WAS RECEIVED BY YOU ON 09-07-2006 AND BALANCE AMOUNT WAS RECEIVAB LE BY MONTHLY INSTALMENTS. PLEASE EXPLAIN WHETHER THE ABOVE TRANSACTION HAS BEEN ACCOUNTED IN YOUR REGULAR BOOKS OF ACCOUNTS. IF YES, FURNISH COPY O F RELEVANT LEDGER ACCOUNT EXTRACT ALONGWITH BOOKS OF ACCOUNTS, FAILING WHICH THE SAME WILL BE ASSESSED AS YOUR UNDISCLOSED INCOME A.Y. 2007-08. 8. PAGE NO.111 TO 113 IS A COPY OF MOU DATED 05-04-2 007 (STAMP PAPER NO.AF559067) BETWEEN SHRI GULAB M. BADGUJAR A ND YOU. AS PER THIS AGREEMENT YOU HAD ENTERED INTO MOU AS PER WHICH FLAT NO.9 TO 12 ON 3 RD FLOOR AND FLAT NO. 13 ON 4 TH FLOOR ADMEASURING 10,000 SQ.FT. AT SUYOJIT BAUG WERE TO BE PURCHASED FROM YOU FOR A SUM OF RS.2 CRORES, OUT OF WHICH YOU HAD RECEIVED RS. 25 LACS FROM SHRI G ULAB M. BADGUJAR ON 01-04-2007 AND BALANCE WAS TO BE PAID IN INSTALMEN TS. PLEASE EXPLAIN WHETHER THE ABOVE TRANSACTION OF SALE OF RS.2 CRORES HAS BEEN ACCOUNTED IN YOUR REGULAR BOOKS OF ACCOUNTS. IF YES, FURNISH COPY OF RELEVANT LEDGER ACCOUNT EXTRACT ALONG WITH BOOKS OF ACCOUNTS, FAILING WHICH THE SAME WILL BE ASSESSED AS YOUR UNDISCLOSED INCOME A.Y. 2008- 09. 17. ALL THE ABOVE THINGS ESTABLISH THE EXISTENCE OF A PAR TNERSHIP FIRM CALLED M/S. SUYOJIT BAUG. THEREFORE, MERELY BECAUSE M/S.SUYOJIT BAUG HAS NOT FILED ANY RETURN OF INCOME OR HA S NOT 12 ITA NOS.1683 TO 1685/PN/2013 BEEN REGISTERED IN OUR OPINION CANNOT BE A GROUND FOR TR EATING THE ADVANCE RECEIVED BY THE SAID FIRM AS INCOME IN THE HAND S OF THE ASSESSEE. 18. WE FIND THE AHMEDABAD BENCH OF THE TRIBUNAL IN THE CA SE OF M/S. OM DEVELOPERS (SUPRA) FOLLOWING THE DECISION OF THE HONB LE GUJARAT HIGH COURT IN THE CASE OF CIT VS. MOTILAL C.PATEL C OMPANY REPORTED IN 173 ITR 666 HAS HELD THAT ON-MONEY CAN BE SUBJECTED TO TAX WHEN SALE DEED IS ACTUALLY EXECUTED. THE AMOUNT WOULD BECOME INCOME FOR THE ASSESSMENT YEAR IN WHICH THE SALE TRANSACTION IS COMPLETED. WHEN THE SALE DEEDS WERE NO T EXECUTED DURING THE YEAR BUT WERE EXECUTED SUBSEQUENT TO THE YEAR IN APPEAL THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN TAXING THE AM OUNT RECEIVED INCLUDING THE ON-MONEY DURING THE YEAR UNDER APPEAL. 19. AS REGARDS THE CONTENTION OF THE LD. DEPARTMENTAL REPRESENTATIVE THAT THE ASSESSEE HAS ADMITTED IN HIS ST ATEMENT RECORDED U/S.132(4) DURING THE COURSE OF SEARCH REGARDIN G THE ADDITIONAL INCOME WE FIND THE SAME IS ALSO WITHOUT ANY BASIS . THERE IS NO ESTOPPEL AGAINST STATUTE. WHAT IS OTHERWISE NOT TAXABLE CANNOT BECOME TAXABLE BECAUSE OF ADMISSION OF THE ASSES SEE. WE FIND THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF SAIL DSP VR EMPLOYEES ASSOCIATION 1998 (SUPRA) AT PARA 17 OF THE ORDE R HAS OBSERVED AS UNDER : 17. THE QUESTION OF ESTOPPEL BECAUSE OF OPTION EXERC ISED WITH EYES OPEN TO THE SUBSEQUENT MODIFICATION CANNOT BE SUSTAINED . WHAT IS NOT OTHERWISE TAXABLE CANNOT BECOME TAXABLE BECAUSE OF AD MISSION OF THE ASSESSEE. NOR THERE CAN BE ANY WAIVER OF THE RIGHT OTHE RWISE ADMISSIBLE TO THE ASSESSEE IN LAW. THE CHARGEABILITY IS NOT DEPENDENT ON THE ADMISSION OF OR WAIVER BY THE ASSESSEE. CHARGEABIL ITY IS DEPENDENT ON THE CHARGING SECTION, WHICH NEEDS TO BE STRICTLY CONSTRUED. REFERRING TO THE DECISION IN CIT V. BHASKAR MITTER (1994) 73 TAXMAN 437 (CAL) AT P. 442 (PARAGRAPH 8), WE HAD OC CASION TO SO HOLD IN THE DECISION IN MAYNAK PODDAR (HUF) V. WTO (IT AP PEAL NO. 84 OF 1998, DATED 24-2-2003). 13 ITA NOS.1683 TO 1685/PN/2013 20. IN VIEW OF THE ABOVE DISCUSSION AND IN VIEW OF THE DET AILED REASONING GIVEN BY THE LD.CIT(A) WE FIND NO INFIRMITY IN HIS OR DER DELETING THE ADDITION OF RS.19 LAKHS IN THE HANDS OF THE ASS ESSEE. THE ORDER OF CIT(A) IS THEREFORE UPHELD. ACCORDINGLY, THE G ROUNDS RAISED BY THE REVENUE ARE DISMISSED. ITA NOS. 1684 AND 1685/PN/2013 (A.YRS. 2007-08 & 201 1-12) : 21. IDENTICAL GROUNDS HAVE BEEN TAKEN BY THE REVENUE IN ITA NO.1684/PN/2013 FOR A.Y. 2007-08 AND FOR A.Y. 2011-12. FOLLOWING THE SAME REASONING THE GROUNDS RAISED BY THE R EVENUE ON THIS ISSUE ARE ACCORDINGLY DISMISSED. 22. THERE IS ONE MORE GROUND IN ITA NO.1685/PN/2013 FO R A.Y. 2011-12 WHEREIN THE REVENUE HAS CHALLENGED THE ORDER O F THE CIT(A) IN DELETING AN AMOUNT OF RS.5,37,500/- ADDED BY THE A O ON ACCOUNT OF UNEXPLAINED EXPENDITURE. 23. FACTS OF THE CASE, IN BRIEF, ARE THAT DURING THE COURS E OF SEARCH ACTION THE SMSS SENT AND RECEIVED BY THE ASSES SEE THROUGH HIS CELL PHONE WERE VERIFIED. THE PRINT OUT OF ALL SMSS WERE TAKEN DURING THE COURSE OF SEARCH ACTION WHICH IS PLACED AT ANN EXURE A4. ON THE BASIS OF SUCH VERIFICATION THE AO ARRIVED AT THE CO NCLUSION THAT SMS ON 21-08-2010 REGARDING PAYMENT OF RS. 2 LAKHS TO SHRI DILIP BHATT AS WELL AS RS.3,37,500/- TO SHRI DWARKA PRASAD AGARWAL ARE NOT ACCOUNTED FOR BY THE ASSESSEE IN HIS B OOKS OF ACCOUNT. THE SUBMISSION OF THE ASSESSEE THAT THE IMPUGN ED TRANSACTIONS ARE RECORDED IN THE BOOKS OF ACCOUNT OF S UYOJIT INFRASTRUCTURE PVT. LTD. WERE REJECTED BY THE AO ON TH E GROUND THAT THERE WAS MISMATCH IN THE DATE OF PAYMENT AS PER SMS A ND BOOKS 14 ITA NOS.1683 TO 1685/PN/2013 OF ACCOUNT OF THE SAID COMPANY. THE AO ACCORDINGLY MAD E ADDITION OF RS.5,37,500/- TO THE TOTAL INCOME OF THE ASSESSEE. 24. BEFORE CIT(A) IT WAS SUBMITTED THAT THE PAYMENT TO S HRI DILIP BHATT WAS MADE TOWARDS THE REFUND OF ADVANCE RECEIVED FROM HIM WHICH IS SUPPORTED BY CANCELLATION DEED. FURTHER, THE AMO UNT PAID TO DWARKA PRASAD AGARWAL, I.E. STAFF MEMBER WAS FOR PAYMEN T OF DEPARTMENTAL LABOUR CHARGES. IT WAS ARGUED THAT ALL THE ABOVE TRANSACTIONS ARE RECORDED IN THE BOOKS OF ACCOUNT OF SU YOJIT INFRASTRUCTURE PVT. LTD. 25. BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE THE LD.CIT(A) DELETED THE ADDITION BY OBSERVING AS UNDER : 6.2 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CA SE, THE ASSESSMENT ORDER AND THE RIVAL SUBMISSIONS. ON THE BASIS OF SMS, TH E A.O. HELD THAT THE PAYMENT OF RS.2,00,000/- MADE BY THE APPELLANT O N 21/08/2010, WHEREAS THE LD A.R. CONTENDED THAT T HE SAID SMS WAS IN THE FORM OF CONFIRMATION OF THE FACT AND IN THE NATURE OF REPOR T. THE LD. A.O. HAS MADE THE IMPUGNED ADDITION WITHOUT BRINGING ON RECO RD THE EXACT NATURE OF PAYMENT AND INTEREST OF THE APPELLANT PART ICULARLY WHEN IT HAS DEMONSTRATED THAT THE IMPUGNED TRANSACTION IS RELAT ED TO M/S, SUYOJIT INFRASTRUCTURE PVT. LTD. AND NOT TO THE APPE LLANT. THE IMPUGNED ADDITION IS MADE BY THE A.O. ON SURMISES THAT THE IMPUG NED PAYMENT IS MADE ON 21/08/2010 WHEN NO SUCH DIRECT MEANING IS ATT RIBUTABLE TO THE SMS. A PLAIN READING OF THE SAID SMS REVEALS THE PAYMENT OF IMPUGNED AMOUNT TO MR. BHATT AND NOWHERE THE SAID SM S CONTAINS THAT THE IMPUGNED PAYMENT IS MADE ON 21/08/2010. FUR THER, THE SMS ALSO DOES NOT CONTAIN ANYTHING ABOUT WHO IS THE PAYEE PARTICULARLY WHEN THE APPELLANT IS A DIRECTOR IN MANY COMPANIES AN D ALSO ACTIVELY INVOLVED IN DAY TO DAY TRANSACTIONS OF OTHER COMPANI ES OR CONCERNS. THEREFORE, THE A.O. IS NOT JUSTIFIED IN MAKING THE IM PUGNED ADDITION WITHOUT BRINGING ON RECORD THAT THE IMPUGNED PAYMEN T WAS MADE ON 21/08/2010 AND THAT TOO BY THE APPELLANT AND IN ABS ENCE OF ANY MATERIAL ON RECORD THE IMPUGNED ADDITION OF RS.2,00, 000/- MADE BY THE A.O. IS UNJUSTIFIED AND IS DIRECTED TO BE DELETED. THIS PART OF GROUND OF APPEAL IS ALLOWED. 6.2.1 AS REGARDS THE ANOTHER SMS OF THE SAME DATE OF R S.3,37,500/- BEING PAID TO D.P., THE SAME IS CLAIMED TO BE PAID T O MR. DWARKA PRASAD AGARWAL, I.E. EMPLOYEE OF M/S. SUYOJIT INFRASTRUCTURE PVT. LTD. FOR MAKING PAYMENT TO DEPARTMENTAL LABOUR. THIS ADDITIO N IS ALSO NOT JUSTIFIED FOR THE SAME REASONS AS MENTIONED HEREINABOVE BECAUSE THE CONTENTIONS OF THE APPELLANT APPEARS TO BE BONAFIDE A S THE IMPUGNED PAYMENT IS GIVEN TO STAFF OF THE SAID COMPANY IN WHICH THE APPELLANT IS A DIRECTOR. THEREFORE, THE A.O. IS ALSO NOT JUSTIFIED IN MAKING THE 15 ITA NOS.1683 TO 1685/PN/2013 IMPUGNED ADDITION WITHOUT BRINGING ON RECORD THAT T HE IMPUGNED PAYMENT WAS MADE ON 21/08/2010 AND THAT TOO BY THE A PPELLANT AND IN THE ABSENCE OF ANY MATERIAL ON RECORD THE IMPUGNE D ADDITION OF RS.3,37,500/- MADE BY THE A.O. IS UNJUSTIFIED AND IS DI RECTED TO BE DELETED. THIS PART OF THE GROUND OF APPEAL IS ALLOWE D. TO SUM UP THE ADDITION OF RS.5,37,500/- IS HEREBY DELETED. THIS GRO UND OF APPEAL IS ALLOWED. 26. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVENUE IS IN APPEAL BEFORE US. 27. THE LD. DEPARTMENTAL REPRESENTATIVE HEAVILY RELIED ON THE ORDER OF THE AO. HE SUBMITTED THAT THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE THE CIT(A) WERE NEVER RAISED EITHER DURIN G THE SEARCH PROCEEDINGS OR BEFORE THE AO. THE ENTIRE SUBMISS ION BEFORE THE CIT(A) WAS AN AFTERTHOUGHT TO EVADE TAX. THE DOCUM ENTS FOUND AND SEIZED WERE EVIDENCES AND THE AO AFTER DECODING TH E CODED MESSAGES CORRELATED THE ABOVE TRANSACTIONS WITH BUSINE SS ACTIVITY OF THE ASSESSEE. THEREFORE, THE ADDITION MADE BY THE AO BEING JUSTIFIED SHOULD BE UPHELD AND THE ORDER OF THE CIT(A) BE REVERSED. 28. THE LD. COUNSEL FOR THE ASSESSEE ON THE OTHER H AND REITERATED THE SAME ARGUMENTS AS MADE BEFORE THE CIT(A ). HE SUBMITTED THAT THE AO HAS NOT APPRECIATED THE FACT TH AT SMS WAS JUST FOR CONFIRMATION OF FACT AND IN THE NATURE OF REPORTING . HE HAS ERRED IN ASSUMING THAT THE DATE OF SMS IS THE DATE OF P AYMENT WHEN NO SUCH ASSERTION IS MADE IN THE SMS THAT THE PAY MENTS AS MENTIONED IN BOTH THE SMS ARE MADE ON 21-08- 2010 I.E. ON THE DATE OF SMS. THE ACCOUNT EXTRACT OF MR. DILIP BHATT S AS APPE ARING IN THE BOOKS OF ACCOUNTS OF THE COMPANY M/S. SUYOJIT INFRAS TRUCTURE PVT. LTD AND CANCELLATION AGREEMENT DATED 29-11-2010 BE TWEEN M/S . SUYOJIT INFRASTRUCTURE PVT. LTD AND MR. DILIP BHATT WAS SUBMITTED TO THE AO. LIKEWISE THE ACCOUNT EXTRACT OF DE PARTMENTAL 16 ITA NOS.1683 TO 1685/PN/2013 CHARGES FOR THE PERIOD 07-09-2010 TO 31-12-2010 WAS S UBMITTED TO THE AO. THE AO HAS ALSO NOT POINTED OUT ANY DEFECT IN TH E SAID ACCOUNT EXTRACT OR AGREEMENT. IT IS UNDISPUTED FACT TH AT BOTH THE PERSONS I.E. MR. DILIP BHATT & MR. DWARKA PRAS AD AGARWAL ARE NOT HAVING ANY FINANCIAL TRANSACTIONS WITH THE ASSESSEE. MR. DILIP BHATT WAS HAVING TRANSACTION WITH ONLY M/S. SUYOJIT INFRASTRUC TURE PVT. LTD AND ALSO MR. DWARKA PRASAD AGARWAL IS EMPLOYEE OF M/S. SUYOJIT BOT. IN SUCH CIRCUMSTANCES THE A.O. IS NOT JUSTIFIED IN ASSESSING THE SAME IN THE HANDS OF ASSESSEE WHEN THE A SSESSEE IS NOT HAVING ANY FINANCIAL TRANSACTIONS WITH THESE PERSONS IN HIS INDIVIDUAL CAPACITY. IT IS ALSO A FACT THAT NO EVIDENCE IS FOU ND DURING THE SEARCH ACTION OR IN THE POST SEARCH INQUIRIES TO SUPPORT THE STAND OF THE A.O. HOWEVER, THE CONTENTIONS OF THE ASSESSEE ARE SUPPORTED BY THE AUDITED BOOKS OF ACCOUNTS OF THE ASSESSEE AS WELL AS AGREEMENT, ETC. 29. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOT H THE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE P APER BOOK FILED ON BEHALF OF THE ASSESSEE. WE FIND THE AO IN THE INSTAN T CASE MADE ADDITION OF RS.5,37,500/- BEING UNEXPLAINED EXPENDITURE ON THE GROUND THAT THERE ARE CERTAIN PAYMENTS AS PER TH E SMSS WHICH WERE NOT RECORDED IN THE BOOKS OF ACCOUNT. EVEN IF CERT AIN AMOUNTS WERE RECORDED IN THE BOOKS OF ACCOUNTS, THE DATES ARE NOT TALLYING, I.E. THERE IS MISMATCH BETWEEN THE DATES OF SMSS AND THE DATES OF RECORDING IN THE BOOKS OF ACCOUNT. WE FIND THE LD.CIT(A) DE LETED THE ADDITION ON THE GROUND THAT THE ASSESSEE HAS DEMO NSTRATED THAT THE AMOUNT OF RS.2 LAKHS RELATED TO M/S. SUYOJIT INFRASTRUCT URE PVT. LTD. AND DOES NOT BELONG TO THE ASSESSEE AND THE ADDITION WAS MADE BY THE AO ON SURMISES. FURTHER, THE SMSS REVEALED THE 17 ITA NOS.1683 TO 1685/PN/2013 PAYMENT OF THE IMPUGNED AMOUNT TO SHRI BHATT AND THE S MSS NOWHERE CONTAIN THAT THE PAYMENT IS MADE ON 21-10-201 0. THERE IS NO MATERIAL BEFORE THE AO TO THE PROPOSITION THAT THE IMP UGNED PAYMENT IS MADE ON 21-10-2010 AND THAT TOO BY THE ASSESSEE. 30. SO FAR AS THE OTHER AMOUNT OF RS.3,37,500/- IS CONCER NED THE CIT(A) DELETED THE SAME ON THE GROUND THAT THE SAME HA S BEEN CLAIMED TO BE PAID TO SHRI DWARKA PRASAD AGARWAL, AN EM PLOYEE OF SUYOJIT INFRASTRUCTURE PVT. LTD. FOR MAKING PAYMENT TO DEPARTMENTAL LABOUR. SINCE THE ASSESSEE WAS A DIRECTOR OF SUYOJIT INFRASTRUCTURE PVT. LTD. AND SUCH ENTRIES WERE ALREADY RECORDED IN THE BOOKS OF ACCOUNT OF THE COMPANY, THEREFORE, ADDITION OF THE SAME IN THE HANDS OF THE ASSESSEE IS NOT JUSTIFIED. THE A BOVE FACTUAL FINDINGS GIVEN BY THE LD.CIT(A) COULD NOT BE CONTROV ERTED BY THE LD. DEPARTMENTAL REPRESENTATIVE. UNDER THESE CIRCUM STANCES AND IN VIEW OF THE DETAILED REASONING GIVEN BY THE CIT(A) W E FIND NO INFIRMITY IN HIS ORDER ON THIS ISSUE. ACCORDINGLY, THE SAME IS UPHELD AND THE GROUNDS RAISED BY THE REVENUE ON THIS IS SUE ARE DISMISSED. 31. IN THE RESULT, ALL THE 3 APPEALS FILED BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 09-11-2015. SD/- SD/- ( VIKAS AWASTHY ) ( R.K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER IQ.KS PUNE ; # DATED : 09 TH NOVEMBER, 2015. LRH'K 18 ITA NOS.1683 TO 1685/PN/2013 ( )'+ , / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. CIT A) - I, NASHIK 4. 5. 6. CIT-I, NASHIK ' *, *, IQ.KS / DR, ITAT, B PUNE; / GUARD FILE. / BY ORDER , ' //TRUE COPY// / * / SR. PRIVATE SECRETARY *, IQ.KS / ITAT, PUNE