Shri N Suryanarayana, Challakere V. The Deputy Commissioner of Income Tax, Central Circle 1(2), Bangalore

ITA 1709/BANG/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7173 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-12-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 21-08-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PALANI KUMAR
• Assessee Lawyers: LOKESH JAIN
• Keywords: Unexplained investment; Document seized; Opportunity of being heard; Source of fund; Block assessment; Documents seized; Reassessment proceedings
• Section: 234B; 147; 132; 10; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC - B BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER IT A NOS. 1708 & 1709/BANG/2017 ASSESSMENT YEAR S : 20 10 - 11 & 2011 - 12 SHRI N. SURYANARAYANA, BANGALORE ROAD, GANDHINAGAR, CHALLAKERE 577 522 CHITRADURGA DT. PAN: AKJPS 8213L VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1 (2), BANGALORE. APPELLANT RESPONDENT ASSESSEE BY : SHRI LOKESH JAIN, CA REVENUE BY : SHRI PALANI KUMAR, ADDL. CIT (DR) DATE OF HEARING : 2 3 . 1 1 .201 7 DATE OF PRONOUNCEMENT : 01 .1 2 .2017 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER; BOTH THESE APPEALS ARE FILED BY THE ASSESSEE WHICH ARE DIRECTED AGAINST TWO SEPARATE ORDERS OF LD. CIT (A), DAVANGERE BOTH DATE D 30.03.2017 FOR ASSESSMENT YEARS 2010-11 AND 2011-12. BOTH THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAK E OF CONVENIENCE. 2. IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT GROU ND NOS. 1, 2 AND 3 IN BOTH YEARS ARE GENERAL AND GROUND NO. 4 IS REGARDING VAL IDITY OF REASSESSMENT PROCEEDINGS. THIS GROUND IS AS UNDER. 4. THE LD. ASSESSING OFFICER ERRED IN CARRYING OUT THE IMPUGNED ASSESSMENT UNDER SECTION 147 OF THE INCOME-TAX ACT AND THE LD. CIT (A) ERRED IN UPHOLDING THE ORDER OF THE LD. ASSESSI NG OFFICER. 3. THE ASSESSEE HAS ALSO RAISED ONE ADDITIONAL GROU ND IN BOTH YEARS WHICH IS AS UNDER. THELD AO ERRED IN CARRYING OUT THE IMPUGNED ASSESSM ENT UNDER SECTION 147 OF THE INCOME TAX ACT INSTEAD OF SECTIO N 153C OF THE INCOME TAX ACT. ITA NOS. 1708 & 1709/BANG/2017 PAGE 2 OF 9 4. REGARDING THE ISSUE INVOLVED IN GROUND NO. 4 AND THE ADDITIONAL GROUND, IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT SEARCH WAS CON DUCTED U/S. 132 OF IT ACT AND IN THE CASE OF M/S. ANANTHA REFINERY PVT. LTD. (ARPL) ON 03.12.2010 AND THE REOPENING IS IN THE BASIS OF MATERIAL FOUND IN THAT SEARCH AND THEREFORE, IN THE FACTS OF THE PRESENT CASE, THE PROVISIONS OF SE CTION 153C ARE APPLICABLE AND NOT OF SECTION 147 AND THEREFORE, REOPENING IS BAD IN LAW. RELIANCE HAS BEEN PLACED BY HIM ON THE TRIBUNAL ORDER RENDERED IN THE CASE OF RAJAT SHUBRA CHATTERJI VS. ACIT IN ITA NO. 2430/DEL/2015 AND ITO VS. SHRI ARUNKUMAR KAPOOR AS REPORTED IN 140 TTJ 0249. THE LD. DR OF REVENUE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. I FIND THAT AS PER THE FIRST TRIBUNAL ORDER RENDERED IN THE CASE OF RAJAT SHUBRA CHATTERJ I VS. ACIT (SUPRA), I FIND THAT THE COPY OF THIS TRIBUNAL ORDER IS NOT MADE AVAILAB LE BY THE LEARNED AR OF THE ASSESSEE BUT THIS TRIBUNAL ORDER IS REPORTED IN CCH 135 (DELHI) TRIBUNAL. IN THAT CASE, THE TRIBUNAL FOLLOWED ANOTHER TRIBUNAL O RDER RENDERED BY AMRITSAR BENCH OF THE TRIBUNAL IN ITO VS. SHRI ARUNKUMAR KAP OOR (SUPRA) AND HENCE, I FIRST CONSIDER THE APPLICABILITY OF THAT TRIBUNAL O RDER OF AMRITSAR BENCH OF THE TRIBUNAL. PARA NOS. 7.2, 8 AND 9 OF THIS TRIBUNAL ORDER ARE RELEVANT FOR THE ISSUE IN DISPUTE BEFORE ME AND THEREFORE, THESE PARAS ARE REPRODUCED HEREIN BELOW FOR READY REFERENCE. THESE PARAS ARE AS UNDER. 7.2 THE UNDISPUTED FACTS ARE THAT A SEARCH WAS COND UCTED UNDER SECTION 132 OF THE ACT IN THE CASE OF M/S. TO DAY HOMES & INFRASTRUCTURE PVT. LTD. ON 28-3-2006, DURING THE C OURSE OF WHICH CERTAIN INCRIMINATING DOCUMENTS WERE ALLEGEDLY SEIZ ED. IT IS ALSO A MATTER OF RECORD THAT THE DCIT, CENTRAL CIRCLE- 22, NEW DELHI INTIMATED THE AO OF THE ASSESSEE ABOUT SEIZURE OF C ERTAIN DOCUMENTS PERTAINING TO THE ASSESSEE DURING SEARCH AND ENCLOS ED COPY OF THOSE DOCUMENTS REQUESTING HIM TO TAKE APPROPRIATE ACTION UNDER SECTION 153C/148 OF THE ACT. IT IS AFTER THAT DURING THE CO URSE OF APPELLATE PROCEEDINGS BEFORE THE CIT (A) THE ASSESSEE TOOK AN ADDITIONAL GROUND OF APPEAL TO THE EFFECT THAT THE REASSESSMENT PROCE EDINGS INITIATED BY THE AO U/S.148 ARE ILLEGAL AND VOID AB INITIO. IN T HE INSTANT CASE, THE LEARNED CIT (A) HAS CORRECTLY OBSERVED THAT THE A.O . SHOULD HAVE ISSUED NOTICE UNDER SECTION 153C OF THE ACT AND SHO ULD HAVE FRAMED THE ASSESSMENT UNDER SECTION 153C READ WITH SECTION 153 OF THE ACT. SECTION 153COF THE ACT READS AS UNDER:- ITA NOS. 1708 & 1709/BANG/2017 PAGE 3 OF 9 '153C. NOTWITHSTANDING ANYTHING CONTAINED IN SECTIO N 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECT ION 153, WHERE THE ASSESSING OFFICER IS SATISFIED THAT ANY MONEY, BULL ION OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS S EIZED OR REQUISITIONED BELONGS OR BELONG TO A PERSON OTHER T HAN THE PERSON REFERRED TO IN SECTION 153A, THEN THE BOOKS OF ACCO UNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON AND THAT ASSESSING OFFICER SHALL PROCEED AGAINST EACH SUCH OTHER PERSO N AND ISSUE SUCH OTHER PERSON NOTICE AND ASSESS OR REASSESS INCOME O F SUCH OTHER PERSON IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A.' 8. ON A PERUSAL OF THE ABOVE PROVISIONS, IT WOULD B E CLEAR THAT THE PROVISIONS OF SECTION 153C OF THE ACT WERE APPLICAB LE, WHICH SUPERSEDES THE APPLICABILITY OF PROVISIONS OF SECTI ONS 147 AND 148 OF THE ACT. AS WE HAVE ALREADY NOTED HEREINABOVE THAT THE DOCUMENTS WERE SEIZED DURING THE SEARCH UNDER SECTION 132 OF THE ACT AND THE SAME WAS SENT TO THE ASSESSEE'S A.O. AT AMRITSAR BY THE OFFICER AT DELHI. IN OUR VIEW, THE LEARNED CIT(A) HAS CORRECTL Y OBSERVED THAT ONLY THE PROVISIONS IN WHICH ANY ASSESSMENT COULD B E MADE AGAINST THE ASSESSEE IN THE INCOME TAX ACT WAS SECTION 153C READ WITH SECTION 153 OF THE ACT. IT IS ALSO APPARENT FROM THE RECORD THAT THE OFFICER AT DELHI HAS MENTIONED IN HIS LETTER THAT THE NECESSAR Y ACTION MAY BE TAKEN AS PER LAW UNDER SECTION 153C/148 OF THE ACT. HENCE, NOTICE ISSUED UNDER SECTION 148 OF THE ACT AND PROCEEDINGS UNDER SECTION 147 OF THE ACT BY THE AO ARE ILLEGAL AND VOID AB IN ITIO. IN VIEW OF THE PROVISIONS OF SECTION 153C OF THE ACT, SECTION 147/ 148 STAND OUSTED. IN THE INSTANT CASE, THE PROCEDURE LAID DOWN UNDER SEC TION 153C HAS NOT BEEN FOLLOWED BY THE A.O. AND, THEREFORE, ASSESSMEN T HAS BECOME INVALID. WE ALSO OBSERVE THAT THE CIT(A) WAS JUSTIF IED IN FOLLOWING THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF MANISH MAHESHWARI VS. ACIT AND ANOTHER, REPORTED IN (2007) 289 ITR 341, WHEREIN IT HAS BEEN HELD THAT IF THE PROCEDURE LAID DOWN IN SECTION 158BD IS NOT FOLLOWED, BLOCK ASSESSMENT PROCEEDINGS WOULD BE ILLEGAL. THE CIT (A) HAS CORRECTLY OBSERVED THAT TH E PROVISIONS OF SECTION 153C ARE EXACTLY SIMILAR TO THE PROVISIO NS OF SECTION 158BD OF THE ACT IN BLOCK ASSESSMENT PROCEEDINGS. T HUS, CONSIDERING THE ENTIRE FACTS AND THE CIRCUMSTANCES OF THE PRESE NT CASE, WE HOLD THAT THE CIT (A) WAS FULLY JUSTIFIED IN QUASHING THE REA SSESSMENT ORDER. WE ALSO DO NOT FIND ANY MERIT IN THE SUBMISSIONS OF TH E LEARNED DR THAT DURING THE COURSE OF SEARCH, IT WAS FOUND AT PREMIS ES OF M/S. TODAY HOMES & INFRASTRUCTURE PVT. LTD. PERTAINING TO M/S. P.R. INFRASTRUCTURE LTD. AND NOT THE ASSESSEE. IN THIS R EGARD, WE MAY POINT OUT THAT THE CONTENTION RAISED BY THE LEARNED D.R. IS FACTUALLY INCORRECT AND CONTRARY TO THE AVAILABLE RECORDS OF SEIZED DOCUMENTS SPECIFICALLY MENTIONED IN THE ASSESSMENT ORDER DATE D 30-12-2008. IN VIEW OF THE ABOVE FACTUAL DISCUSSION, WE DO NOT FIN D ANY MERIT AND SUBSTANCE IN THE CONTENTION OF THE LEARNED D.R. THE REFORE, WE UPHOLD THE ORDER OF THE CIT (A) AND DISMISS THE GROUND NOS .1 TO 4 OF THE APPEAL. ITA NOS. 1708 & 1709/BANG/2017 PAGE 4 OF 9 9. SINCE WE HAVE UPHELD THE ORDER OF THE CIT (A) IN QUASHING THE REASSESSMENT ORDER AND, THEREFORE, WE DO NOT THINK IT NECESSARY TO GO INTO THE MERITS OF THE CASE. 6. IN THE PRESENT CASE ALSO, THIS IS NOTED BY THE A O IN THE ASSESSMENT ORDER THAT DURING THE COURSE OF SEARCH OPERATION CARRIED OUT U /S. 132 OF THE ACT IN THE CASE OF ARPL ON 03.12.2010, SEIZED MATERIAL MARKED AS A/ NSN/1 WAS FOUND WHICH REFLECTED THAT THERE WAS UNEXPLAINED INVESTMENT OF RS. 9,90,145/- MADE BY THE ASSESSEE. ON THE BASIS OF THIS EVIDENCE FOUND IN T HE COURSE OF SEARCH, THE AO INVOKED THE PROVISIONS OF SECTION 147 AFTER DULY RE CORDING THE REASONS FOR REOPENING OF THE ASSESSMENT AND A NOTICE U/S. 148 O F THE ACT WAS ISSUED ON 16.04.2012 WHICH WAS DULY SERVED ON THE ASSESSEE. HENCE IT IS SEEN THAT THE SEARCH IN THE PRESENT CASE WAS CARRIED OUT ON 03.12 .2010 AND THEREFORE, FOR ASSESSMENT YEAR 2010-11, SECTION 153C CAN BE INVOKE D BUT FOR ASSESSMENT YEAR 2011-12 BEING THE YEAR OF SEARCH, SECTION 153C CANNOT BE INVOKED AND THEREFORE, IN RESPECT OF ASSESSMENT YEAR 2010-11,TH ESE TRIBUNAL ORDERS CITED BY LD. AR OF ASSESSEE ARE APPLICABLE AND RESPECTFUL LY FOLLOWING THE SAME, I HOLD THAT THE ASSESSMENT ORDER FRAMED BY THE AO U/S. 147 FOR ASSESSMENT YEAR 2010-11 IS BAD IN LAW BECAUSE THE SAME SHOULD HAVE BEEN MADE BY THE AO U/S. 153C. SINCE IN AY 2010 11, THE ASSESSMENT O RDER ITSELF IS QUASHED, THE ISSUE ON MERIT DO NOT CALL FOR ANY ADJUDICATION. A CCORDINGLY THE ASSESSMENT ORDER IN ASSESSMENT YEAR 2010-11 IS QUASHED. 7. IN THE RESULT, THE APPEAL OF ASSESSEE FOR ASSESS MENT YEAR 2010-11 IS ALLOWED. 8. NOW I TAKE UP THE APPEAL FOR ASSESSMENT YEAR 201 1-12. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. 1. THE ORDER OF THE LEARNED CIT (A) IS OPPOSED TO L AW, FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE ORDER IS PASSED IN HASTE, WITHOUT PROVIDING SUFFICIENT AND REASONABLE OPPORTUNITY OF BEING HEARD. 3.THE ORDER IS PASSED AGAINST THE PRINCIPLE OF NATU RAL JUSTICE AND THUS LIABLE TO BE QUASHED. 4.THE LD. ASSESSING OFFICER ERRED IN CARRYING OUT T HE IMPUGNED ASSESSMENT UNDER SECTION 147 OF THE INCOME-TAX ACT AND THE LD. ITA NOS. 1708 & 1709/BANG/2017 PAGE 5 OF 9 CIT(A) ERRED IN UPHOLDING THE ORDER OF THE LD. ASSE SSING OFFICER. 5.THE LD. ASSESSING OFFICER ERRED IN TREATING THE C APITAL BALANCE OF HUF AS MONEY LENT BY THE APPELLANT IN THE ORDINARY COURSE OF BUSINESS AMOUNTING TO RS. 19,00,000/- AND FURTHER E RRED IN TREATING THE SUM OF RS. 2,28,000/- AS INTEREST EARNED ON THE SAME. FURTHER, HE ERRED IN ADDING A SUM OF RS. 89,000/-, RS. 6,30,000 /- AND RS. 1,53,000/- AS UNEXPLAINED INCOME. THE LD. CIT(A) ER RED IN CONFIRMING THE ORDER OF THE LD. ASSESSING OFFICER. 6. THE LD. CIT(A) FAILED TO NOTE THAT THE LD. AO HA S ERRED IN INTERPOLATING THE PRESUMPTIVE PROVISION OF SECTION 292C OF THE ACT TO BRING THE ABOVE AMOUNTS TO TAX IN THE HANDS OF THE APPELLANT. 7. THE LD. CIT(A) ERRED IN CONFIRMING THE ORDER OF THE LD. AO WHO ERRED IN TREATING THE SCRIBBLING FOUND IN THE SEIZE D DOCUMENTS AS ACTUAL TRANSACTION OF BUSINESS. 8. THE LD. CIT(A) AND THE LD. AO ERRED IN ADDING A SUM OF RS. 1,00,000/- TO THE INCOME OF THE APPELLANT WHICH, IN FACT, WAS A TRANSACTION OF HAND LOAN, THAT DID NOT MATERIALIZE DUE TO INSUFFICIENCY OF FUNDS. 9. THE LD. AO ERRED IN ADDING A SUM OF RS. 1,70,000 /- TO THE INCOME OF THE APPELLANT MERELY ON THE BASIS OF SCRIBBLING MAD E ON ONE OF THE SEIZED MATERIALS. 10. THE LD. CIT(A) AND THE LD. AO FAILED TO APPRECI ATE THAT THE MONEY ADVANCED BY MS. SWETHA, DAUGHTER OF THE APPELLANT, TO M/S. ANANTHA REFINERY PRIVATE LIMITED AND OTHER CONCERNS AMOUNTI NG TO RS. 7,17,000/- WAS IN THE NATURE OF LOAN FOR WHICH LEDGER EXTRACTS WERE FURNISHED DURING THE COURSE OF ASSESSMENT PROCEEDIN GS. 11. THE LD. AO ERRED IN LEVYING INTEREST UNDER SECT ION 234A, 234B & 234C OF THE ACT. THE COMPUTATION THEREOF IS ERRONEO US. 12. THE APPELLANT SEEKS YOUR LEAVE TO ADD, ALTER, A MEND OR DELETE ANY OF THE GROUNDS URGED AT THE TIME OF HEARING. 9. IN THIS YEAR ALSO, GROUND NOS. 1, 2 AND 3 ARE GE NERAL WHICH REQUIRE NO SEPARATE ADJUDICATION AND GROUND NO. 4 AND ADDITIONAL GROUND S IS REJECTED BECAUSE I HAVE ALREADY SEEN THAT THIS BEING THE YEAR OF SEARC H, PROVISIONS OF SECTION 153C ARE NOT APPLICABLE. ITA NOS. 1708 & 1709/BANG/2017 PAGE 6 OF 9 10. REGARDING THE MERIT OF THE ADDITION BEING DISPU TED BY THE ASSESSEE AS PER GROUND NOS. 5 TO 8, IT WAS SUBMITTED BY LD. AR OF A SSESSEE THAT THESE WERE THE SUBMISSIONS OF THE ASSESSEE BEFORE THE AO AS NOTED BY HIM ON PAGE NO. 5 OF THE ASSESSMENT ORDER THAT THE AMOUNT MENTIONED ON P AGE NO. 68 OF THE SEIZED MATERIAL (A/NSN/1) ARE BELONGING TO N. SURNARAYANA (HUF) WHO IS ASSESSED TO TAX BEFORE THE LEARNED ITO, WARD- 1, CHITRADURGA UNDER PAN: AKBHN2752B AND THE ENTIRE CALCULATION IS ABOUT ROUGH ESTIMATE WRITTEN BY THE GRANT DAUGHTER OF THE ASSESSEE ON DICTATION OF THE ASSESSEE OUT OF MEMORY. IT IS SUBMITTED THAT THE FIRST AMOUNT NOTED OF RS. 19 LACS IS OF OPENING CAPITAL BALANCE IN HUF ACCOUNT AS ON 31.03.2009 AND REMAINING AMOUNTS ARE REGARDING INCOMES ACCRUED OVER THE YEARS. IN SUPPO RT OF THIS CONTENTION, HE SUBMITTED ENGLISH VERSION OF THE INFORMATION AS PER SCRIBBLING ON PAGE NO. 68 OF SEIZED MATERIAL AS PER WHICH THE PRINCIPLE AMOUNT W AS RS. 19 LAKHS AND THE INTEREST WAS RS. 2.28 LAKHS AND RS. 0.89 LAKHS TOTA LING RS. 22.17 LAKHS TO WHICH A FURTHER AMOUNT WAS ADDED RS. 6.30 LAKHS BEING IN RESPECT OF SVT PROFITS AND FURTHER INTEREST OF RS. 1.53 LAKHS WAS ADDED MAKING IT RS. 30 LAKHS. IT WAS ALSO SUBMITTED THAT AS PER THE CAPITAL ACCOUNT OF HUF MA DE AVAILABLE AS PER ANNEXURE 4 OF THE APPEAL MEMO/PAPER BOOK, OPENING BALANCE AS ON 01.04.2004 WAS RS. 19,89,470/- WHICH WAS CONSIDERED AT RS. 19 LAKHS BY THE ASSESSEE OUT OF MEMORY AND TO THIS, VARIOUS INCOME FOR ASSESSMENT YEAR 2005-06 TO 2010-11 WERE ADDED MAKING A TOTAL OF RS. 30 LACS. HE SUBMITTED THAT THE OPENING BALANCE AS WELL AS CLOSING BALANCE OF HUF CAPITAL IS TALLYING WITH THE ROUGH ESTIMATE ON THE SEIZED MATERIAL AND THEREFORE, NO ADDITION IS JUSTIFIED ON THE BASIS OF THIS SEIZED MATERIAL. TH E LD. DR OF REVENUE SUPPORTED THE ORDERS OF AUTHORITIES BELOW. 11. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. I FIN D FORCE IN THE SUBMISSIONS OF LD. AR OF ASSESSEE BECAUSE AS PER SEIZED MATERIAL, COPY OF WHICH IS AVAILABLE ON PAGE NO. 27 OF THE PAPER BOOK OF WHICH ENGLISH TRAN SLATION IS MADE AVAILABLE, OPENING BALANCE IS OF RS. 19 LAKHS AND CLOSING BALA NCE AFTER MAKING ADDITION OF VARIOUS AMOUNTS IS RS. 30 LAKHS AND THE NAME MENTIO NED ON TOP IS TATHAIAH. THIS HAS BEEN EXPLAINED THAT IN KANNADA, TATHAIAH IS CALLED TO GRANDFATHER AND IT HAS BEEN EXPLAINED THAT THIS IS IN HAND WRIT ING OF THE GRANDDAUGHTER OF THE ASSESSEE. THE AMOUNTS ARE TALLYING IF IT IS CO NSIDERED THAT THE NOTINGS ARE ITA NOS. 1708 & 1709/BANG/2017 PAGE 7 OF 9 BY WAY OF MEMORY IN ROUND FIGURE. THIS WAS THE CON TENTION RAISED BY THE ASSESSEE SINCE VERY BEGINNING BUT NO REASON HAS BEE N GIVEN IN THE ASSESSMENT ORDER OR IN THE ORDER OF CIT(A) TO REJEC T THIS EXPLANATION OF ASSESSEE. THE AO HAS SIMPLY SAID THAT ASSESSEE DID NOT SATISFY THIS CLAIM. IN THE ORDER OF CIT(A) ALSO, THIS IS ONLY BASIS GIVEN BY CIT(A) TO REJECT THE EXPLANATION OF THE ASSESSEE THAT NO EVIDENCE WAS PL ACED ON RECORD TO JUSTIFY THE EXPLANATION OF THE ASSESSEE. IN MY CONSIDERED OPINION, ASSESSEE HAS TO EXPLAIN THE SEIZED PAPER AND IF THE EXPLANATION OF THE ASSESSEE IS REJECTED, COGENT REASONS SHOULD BE GIVEN FOR SUCH REJECTION. EXPLANATION OF THE ASSESSEE IS REASONABLE THAT THESE ARE ROUGH ESTIMATED FIGURE S NOTED OUT OF MEMORY ABOUT OPENING BALANCE OF CAPITAL OF HUF AND ITS INC OME OVER THE YEARS AND THE SAME IS SUPPORTED BY THE BALANCE SHEET OF HUF EXCEP T ODD FIGURES. UNDER THESE FACTS, I FEEL IT PROPER TO ACCEPT THE EXPLANA TION OF THE ASSESSEE IN THE FACTS OF THE PRESENT CASE, THEREFORE, I DELETE THE ADDITION ON THE BASIS OF THIS SEIZED MATERIAL OF RS. 30 LAKHS. GROUND NOS. 5, 6 AND 7 ARE ALLOWED. 12. REGARDING GROUND NO. 8, IN RESPECT OF ADDITION OF RS. 1,00,000/-, IT WAS EXPLAINED BY THE ASSESSEE BEFORE THE AO, CIT(A) AND BEFORE ME THAT THIS WAS A PROPOSED TRANSACTION WHICH DID NOT MATERIALIZE. TH IS RELEVANT SEIZED MATERIAL IS AVAILABLE ON PAGE NO. 28 OF THE PAPER BOOK AND I FI ND THAT IN THE SAME, AMOUNT OF RS. 1,00,000/- IS MENTIONED WITH ONE NAME BUT TH E DATE MENTIONED HAS BEEN STRUCK DOWN. IN MY CONSIDERED OPINION, THE SEIZED MATERIAL ITSELF SUGGESTS THAT SINCE THE DATE IS STRUCK DOWN, IT MAY BE A CASE OF NON-MATERIALIZATION OF THE TRANSACTION AND THEREFORE, ON THIS ISSUE ALSO, I FI ND FORCE IN THE SUBMISSIONS OF LD. AR OF ASSESSEE AND THEREFORE, THIS ADDITION OF RS. 1,00,000/- IS ALSO DELETED. GROUND NO. 8 IS ALLOWED. 13. REGARDING GROUND NO. 9 IN RESPECT OF ADDITION O F RS. 1,70,000/-, THE SEIZED MATERIAL IS AVAILABLE ON PAGE NO. 29 OF THE PAPER B OOK. REGARDING THIS SEIZED MATERIAL, THIS WAS THE CONTENTION OF THE ASSESSEE T HAT THIS DOCUMENT DOES NOT BELONG TO THE ASSESSEE. HAD THIS DOCUMENT BEEN FOUN D IN THE POSSESSION OF THE ASSESSEE, THE PRESUMPTION WOULD HAVE WORKED AGAINST THE ASSESSEE BUT IN THIS CASE, THE SEARCH IS CARRIED OUT IN THE PREMISES OF ARPL AND NOT IN THE CASE OF THE ASSESSEE AND THEREFORE, THIS EXPLANATION CANNOT BE BRUSHED ASIDE AND IT ITA NOS. 1708 & 1709/BANG/2017 PAGE 8 OF 9 HAS TO BE SEEN THAT WHETHER FROM THE SEIZED MATERIA L, THERE IS ANY INDICATION THAT IT BELONGS TO THE ASSESSEE. FROM THE SEIZED MA TERIAL AVAILABLE ON PAGE NO. 29 OF THE PAPER BOOK, IT IS SEEN THAT THERE IS NOTI NG OF A FEW AMOUNTS ONLY WITHOUT ANY NAME OR DATE. AS PER THE PAGE 8 OF THE ASSESSMENT ORDER ALSO, IT COMES OUT THAT THE AO HAS INVOKED THE PROVISIONS OF SECTION 292C WITHOUT ANY CONCRETE FINDING THAT THIS DOCUMENT HAS ANY RELATIO N WITH THE ASSESSEE. I FIND THAT SECTION 292C COMES INTO OPERATION, IF THE DOCU MENT IN QUESTION IS FOUND IN THE POSSESSION OF THE ASSESSEE ION COURSE OF SEARCH . IN THE PRESENT CASE, SECTION 292CD IS NOT APPLICABLE BECAUSE THE DOCUMEN T IN QUESTION IS NOT FOUND IN THE POSSESSION OF THE ASSESSEE AND IT WAS FOUND IN COURSE OF SEARCH AT THE PREMISES OF ARPL. HENCE, ANY ADDITION ON THE BASIS OF THIS DUMB DOCUMENT IS NOT JUSTIFIED WITHOUT ESTABLISHING ANY CONNECTION W ITH THE ASSESSEE AND THEREFORE, THIS ADDITION OF RS. 1,70,000/- IS ALSO DELETED. GROUND NO. 9 IS ALSO ALLOWED. 14. REGARDING GROUND NO. 10 IN RESPECT OF ADDITION OF RS. 7.17 LAKHS, IT IS THE EXPLANATION OF THE ASSESSEE THAT THIS AMOUNT WAS AD VANCED BY DAUGHTER MS. N S SWETHA TO VARIOUS CONCERNS OF ARPL AND THE SAME I S APPEARING IN THE BOOKS OF ARPL. THE AO IS SAYING ON PAGE NO. 8 OF THE ASS ESSMENT ORDER THAT THE ASSESSEE DID NOT EXPLAIN THE SOURCE OF AMOUNT STATE D TO HAVE BEEN INVESTED BY HIS DAUGHTER IN VARIOUS CONCERNS. BEFORE ME, THE A SSESSEE MADE AVAILABLE COPY OF IT RETURN FILED BY DAUGHTER OF THE ASSESSEE MS. N S SWETHA FOR ASSESSMENT YEAR 2005-06 ON 29.07.2005 AVAILABLE ON PAGES 87 TO 91 OF PAPER BOOK AND THE SAME FOR ASSESSMENT YEAR 2006-07 IS AV AILABLE ON PAGES 92 TO 94 OF PAPER BOOK AND FOR ASSESSMENT YEAR 2007-08 IS AVAILABLE ON PAGES 95 TO 97 OF PAPER BOOK AND THE SAME FOR ASSESSMENT YEAR 2 008-09 IS AVAILABLE ON PAGES 98 TO 100 OF PAPER BOOK AND THE SAME FOR ASSE SSMENT YEAR 2009-10 IS AVAILABLE ON PAGES 101 TO 104 OF PAPER BOOK AND FOR ASSESSMENT YEAR 2010-11 IS AVAILABLE ON PAGES 105 TO 107 OF PAPER BOOK. AS PER THE BALANCE SHEET AS ON 31.03.2010 AVAILABLE ON PAGES 107 OF PAPER BOOK, SWETHA IS SHOWING ADVANCES OF RS. 1.50 LAKHS IN THE NAME OF M/S. ANAN THA SPINNING MILLS PVT. LTD. AND RS. 4.30 LAKHS IN THE NAME OF ARPL APART FROM O THER ASSETS AND THE TOTAL ASSETS IS TOTALING RS. 15,14,720/- AS ON 31.03.2010 AND RETURN OF INCOME FOR ASSESSMENT YEAR 2010-11 WAS FILED ON 30.03.2011 I.E . MUCH BEFORE THE ITA NOS. 1708 & 1709/BANG/2017 PAGE 9 OF 9 REOPENING OF THE ASSESSMENT FOR THIS YEAR AND A. Y. 2010-11. HENCE THESE DOCUMENTS HAVE TO BE ACCEPTED AND AS PER THE SAME, THE SOURCE OF FUND IS PROPERLY EXPLAINED IN THE HANDS OF MS. N S SWETHA D AUGHTER OF THE ASSESSEE AND THEREFORE, THIS ADDITION IS ALSO DELETED. GROU ND NO. 10 IS ALSO ALLOWED. 15. GROUND NO. 11 IS CONSEQUENTIAL BEING REGARDING INTEREST U/S. 234A, 234B AND 234C. 16. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE FOR ASSESSMENT YEAR 2011-12 IS PARTLY ALLOWED. 17. IN THE COMBINED RESULT, THE APPEAL FILED BY THE ASSESSEE FOR ASSESSMENT YEAR 2010-11 IS ALLOWED AND FOR ASSESSMENT YEAR 2011-12 IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- (ARUN KUMAR GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 01 ST DECEMBER, 2017. /MS/ COPY TO: 1. APP ELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.