CHHAYA P GANGER, MUMBAI V. D,C,I.T.33, MUMBAI

ITA 1753/MUM/2011

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1952 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2015
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 04-02-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 03-03-2011
• Court: TRIBUNAL
• Assessee Lawyers: HARSHAD J SHAH
• Keywords: Unexplained investment; Gift; Search and seizure; Loose papers; Document seized; Source of fund; Valuation report; Condonation of delay; Documents seized
• Section: 69C; 143(3); 153A; 14A; 68; 132; 2

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES C, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO.1753/MUM/2011 ASSESSMENT YEAR: 2003-04 M S. CHHAYA P. GANGAR, 1201, STARDEEP, NEAR CHAMUNDA CIRCLE, BORIVALI (W), MUMBAI -400092 / VS. DCIT, CIRCLE - 33, GR. FLR, AAYAKAR BHAVAN, MUMBAI 400020 (ASSESSEE ) (REVE NUE) P.A. NO. AEHPG9964J ITA NO.163/MUM/2012 ASSESSMENT YEAR: 2005-06 ACIT, CIRCLE - 33, GR. FLR, AAYAKAR BHAVAN, MUMBAI 400020 / VS. M S. CHHAYA P. GANGAR, 1201, STARDEEP, NEAR CHAMUNDA CIRCLE, BORIVALI (W), MUMBAI -400092 (REVENUE) (RESPONDENT ) P.A. NO. AEHPG9964J CO. NO.34/MUM/2013 (ARISING OUT OF ITA NO.163/MUM/2013) ASSESSMENT YEAR: 2005-06 CHHAYA P. GANGAR 2 M S. CHHAYA P. GANGAR, 1201, STARDEEP, NEAR CHAMUNDA CIRCLE, BORIVALI (W), MUMBAI -400092 / VS. ACIT, CIRCLE - 33, GR. FLR, AAYAKAR BHAVAN, MUMBAI 400020 (ASSESSEE ) (REVENUE) P.A. NO. AEHPG9964J ITA NO.164/MUM/2012 ASSESSMENT YEAR: 2006-07 ACIT, CIRCLE - 33, GR. FLR, AAYAKAR BHAVAN, MUMBAI 400020 / VS. M S. CHHAYA P. GANGAR, 1201, STARDEEP, NEAR CHAMUNDA CIRCLE, BORIVALI (W), MUMBAI -400092 (REVENUE) (RESPONDENT ) P.A. NO. AEHPG9964J CO. NO.35/MUM/2013 (ARISING OUT OF ITA NO.164/MUM/2012) ASSESSMENT YEAR: 2006-07 M S. C HHAYA P. GANGAR, 1201, STARDEEP, NEAR CHAMUNDA CIRCLE, BORIVALI (W), MUMBAI -400092 / VS. ACIT, CIRCLE - 33, GR. FLR, AAYAKAR BHAVAN, MUMBAI 400020 (ASSESSEE ) (REVENUE) P.A. NO. AEHPG9964J ITA NO.159/MUM/2012 ASSESSMENT YEAR: 2005-06 ACIT, CIRCLE - 33, GR. FLR, AAYAKAR BHAVAN, MUMBAI 400020 / VS. MR . PANKAJ J. GANGAR, 1201, STARDEEP, NEAR CHAMUNDA CIRCLE, BORIVALI (W), MUMBAI -400092 (REVENUE) (RESPONDENT ) P.A. NO. AACPS762M CHHAYA P. GANGAR 3 CO. NO.36/MUM/2013 (ARISING OUT OF ITA NO.159/MUM/2012) ASSESSMENT YEAR: 2005-06 MR . PANKAJ J.GANGAR, 1201, STARDEEP, NEAR CHAMUNDA CIRCLE, BORIVALI (W), MUMBAI -400092 / VS. ACIT, CIRCLE - 33, GR. FLR, AAYAKAR BHAVAN, MUMBAI 400020 (ASSESSEE ) (REVENUE) P.A. NO. AACPS762M ITA NO.160/MUM/2012 ASSESSMENT YEAR: 2006-07 ACIT, CIRCLE - 33, GR. FLR, AAYAKAR BHAVAN, MUMBAI 400020 / VS. MR . PANKAJ J. GANGAR, 1201, STARDEEP, NEAR CHAMUNDA CIRCLE, BORIVALI (W), MUMBAI -400092 (REVENUE) (RESPONDENT ) P.A. NO. AACPS762M CO. NO.37/MUM/2012 (ARISING OUT OF ITA NO.160/MUM/2012) ASSESSMENT YEAR: 2006-07 M R . PANKAJ J.GANGAR, 1201, STARDEEP, NEAR CHAMUNDA CIRCLE, BORIVALI (W), MUMBAI -400092 / VS. ACIT, CIRCLE - 33, GR. FLR, AAYAKAR BHAVAN, MUMBAI 400020 (ASSESSEE ) (REVENUE) P.A. NO. AACPS762M ITA NO.1784/MUM/2011 ASSESSMENT YEAR: 2007-08 ACIT, CIRCLE - 33, GR. FLR, AAYAKAR BHAVAN, MUMBAI 400020 / VS. MR . PANKAJ J. GANGAR, 1201, STARDEEP, NEAR CHAMUNDA CIRCLE, BORIVALI (W),MUMBAI -400092 (REVENUE) (RESPONDENT ) P.A. NO. AACPS762M CHHAYA P. GANGAR 4 ITA NO.1782/MUM/2011 ASSESSMENT YEAR: 2008-09 ACIT, CIRCLE - 33, GR. FLR, AAYAKAR BHAVAN, MUMBAI 400020 / VS. MR . PANKAJ J. GANGAR, 1201, STARDEEP, NEAR CHAMUNDA CIRCLE, BORIVALI (W), MUMBAI -400092 (REVENUE) (RESPONDENT ) P.A. NO. AACPS762M ITA NO.1754/MUM/2011 ASSESSMENT YEAR: 2008-09 MR . PRAKAS H H. SAVLA, G-1/2, MANGAL KUNJ, S.V. RD, OPP, JAMBLI GULLY, JAIN TAMPLE, BORIVALI(W), MUMBAI -400092 / VS. DCIT, CIRCLE - 33, GR. FLR, AAYAKAR BHAVAN, MUMBAI 400020 (ASSESSEE ) (REVENUE) P.A. NO. AACPS7628E ITA NO.1781/MUM/2011 ASSESSMENT YEAR: 2008-09 ACIT, CIRCLE - 33, GR. FLR, AAYAKAR BHAVAN, MUMBAI 400020 / VS. MR . PRAKASH H. SAVLA, G-1/2, MANGAL KUNJ, S.V. RD, OPP, JAMBLI GULLY, JAIN TAMPLE, BORIVALI(W), MUMBAI -400092 (REVENUE) (RESPONDENT ) P.A. NO. AACPS7628E !' / ASSESSEE BY SHRI HARSHAD J. SHAH, & SHRI ASHOK KUMAR SUTHAR (AR) / REVENUE BY SHRI L.K. S. DAHIA ( CIT - DR) CHHAYA P. GANGAR 5 # $ % & / DATE OF HEARING : 16/11/2015 % & / DATE OF ORDER: 18/12/2015 / O R D E R PER BENCH: THESE APPEALS ARISE AS A RESULT ORDERS PASSED IN PURSUANCE TO SEARCH AND SEIZURE OPERATION U/S 132 O F THE ACT, CONDUCTED IN THE CASE OF SHRI PRAKASH H. SAVLA, ON 17.01.2008. SINCE COMMON ISSUES ARE INVOLVED THEREF ORE, THESE APPEALS HAVE BEEN DECIDED TOGETHER. FIRST, WE SHALL TAKE UP APPEALS PERTAINING TO MS. C HHAYA P. GANGAR: ITA NO.1753/MUM/2011 FOR A.Y. 2003-04 (ASSESSEES APPEAL): FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESSEE IN APPEAL MEMO: 1.THE CIT(A) ERRED IN UPHOLDING THE ASSESSING OFFIC ER ORDER DATED U/S.153(C) NOT TO BE BAD IN LAW, WITHOUT JURISDICTIONS AND VOID AB- INITIO. 2. THE CIT(A) ERRED IN UPHOLDING THE ASSESSING OFFI CER ORDER OF TREATING GIFT OF RS.2,00,000/- AS UNEXPLAI NED CASH CREDIT, AS NO MATERIAL WAS FOUND DURING THE SEARCH FOR SUCH ADDITION AND UNDER THE FACT & CIRCUMSTANCES OF THE CASE. CHHAYA P. GANGAR 6 2 . DURING THE COURSE OF HEARING, SHRI HARSHAD J. SHA H, & SHRI ASHOK KUMAR SUTHAR, LD COUNSEL ON BEHALF OF THE ASSESSEE AND SHRI L.K. S. DAHIA, DEPARTMENTAL REPRESENTATIVE (LD. CIT-DR) ON BEHALF OF THE REVENUE, ARGUED THE C ASE. 3. DURING THE COURSE OF HEARING, IT HAS BEEN ARGUED B Y THE LD. COUNSEL APPEARING ON BEHALF OF THE ASSESSEE THAT IN THIS CASE NO JURISDICTION AS PER LAW COULD HAVE BEEN ASSUMED U/S 153C, BECAUSE NOTHING INCRIMINATING WAS FOUND AGAINST THE ASSESSEE, IN THE CASE OF SEARCH CARRIED OUT AT THE PREMISES OF SHRI PRAKASH H. SAVLA. IT HAS BEEN SUBMITTED THAT I N ANY CASE ADDITIONS MADE IN THE ASSESSMENT ORDER ARE ILLEGAL ON THE GROUND THAT THESE HAVE BEEN MADE WITHOUT THERE BEIN G ANY INCRIMINATING MATERIAL. THUS, ADDITIONS ARE WITHOUT ANY BASIS AND WITHOUT THERE BEING ANY ADVERSE MATERIAL AGAINS T THE ASSESSEE, AND THUS, THE ADDITION MADE BY THE AO IS NOT ONLY BEYOND JURISDICTION BUT CONTRARY TO LAW AND FACTS O N MERITS ALSO. 3.1. IN SUPPORT OF HIS CLAIM, LD. COUNSEL HAS PLACED CO PY OF JUDGMENT IN THE CASE OF SHRI VIMAL KUMAR RATHI IN I TA NO.3094-3096/MUM/2013 ORDER DATED 16.10.2015 PASSED BY THE HONBLE MUMBAI BENCH OF ITAT. HE HAS ALSO PLACE D RELIANCE ON VARIOUS JUDGMENTS WHICH HAVE BEEN RELIE D UPON IN THE CASE OF SHRI VIMAL KUMAR RATHI (SUPRA). RELIANC E HAS ALSO BEEN PLACED ON THE JUDGMENT OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. CONTINENT WAREHOUSING CORPORATI ON 232 TAXMAN 270 (BOM) FOR THE PROPOSITION THAT NO ADDITI ON CAN BE CHHAYA P. GANGAR 7 MADE U/S 153A IN ABSENCE OF ANY INCRIMINATING MATER IAL. DETAILED ARGUMENTS HAVE BEEN MADE BY THE LD. COUNSE L ON THE MERITS OF THE ADDITION ALSO BY CONTENDING THAT THE ASSESSEE HAS DISCHARGED ITS ONUS IN EXPLAINING IDENTITY, CREDITW ORTHINESS AND GENUINENESS OF THE GIFT OF RS.2,00,000/- RECEIV ED BY THE ASSESSEE, WHICH HAS BEEN ADDED BY THE AO IN THE ASS ESSMENT ORDER. IT WAS LASTLY SUBMITTED BY HIM THAT NO ASSES SMENT OR APPEAL WAS PENDING AS ON THE DATE OF SEARCH, AND TH EREFORE NO ASSESSMENT/APPEAL HAS ABATED AS A RESULT OF SEARCH ACTION, AND THEREFORE, NEITHER ACTION U/S 153C WAS JUSTIFIE D NOR THE ADDITION MADE IN THE ASSESSMENT ORDER WITHIN THE PE RIPHERY OF JURISDICTION ASSIGNED BY THE LEGISLATURE UPON THE A O. 3.2. ON THE OTHER HAND, LD. CIT-DR DREW OUR ATTENTION O N THE SURRENDER MADE BY ASSESSEE ADMITTING UNDISCLOSED IN COME, AND CONTENDED THAT JURISDICTION HAS BEEN RIGHTLY AS SUMED BY THE AO U/S 153C. IT HAS BEEN SUBMITTED BY HIM THAT WHEN THE ASSESSEE HERSELF HAS ADMITTED EARNING OF UNDISCLOSE D INCOME AND THESE FACTS WERE RE-CONFIRMED BY HER BY INCLUDI NG THE OFFERED INCOME IN THE RETURN OF INCOME FILED BY T HE ASSESSEE, AND THEREFORE, UNDER THESE CIRCUMSTANCES, IT CANNOT BE SAID THAT NOTHING WAS FOUND AGAINST THE ASSESSEE. IN RES PONSE TO THE QUERY OF THE BENCH THAT WHETHER THE ADDITIONS M ADE IN THE ASSESSMENT ORDER WERE BASED UPON ANY INCRIMINATING MATERIAL, THE RESPONSE OF THE LD. CIT-DR WAS VERY FAIR. IT WA S CLARIFIED THAT ADDITIONS WERE NOT BASED UPON ANY INCRIMINATIN G MATERIAL. BUT HE ARGUED THAT IT IS NOT NECESSARY TH AT IN THE ASSESSMENT ORDER FRAMED U/S 153C ADDITIONS COULD BE MADE CHHAYA P. GANGAR 8 ONLY QUA INCRIMINATING MATERIAL. ACCORDING TO HIM, THESE PROCEEDINGS ARE AKIN TO THE PROCEEDINGS CARRIED OUT U/S 147, WHEREIN THE AO IS PERMITTED TO MAKE ADDITIONS/DISAL LOWANCES IN THE REASSESSMENT EVEN BEYOND THE SCOPE OF REASON S RECORDED BY HIM FOR REOPENING OF THE CASE. IN NUTSH ELL, HE JUSTIFIED THE ACTION OF LOWER AUTHORITIES IN FRAMIN G THE ASSESSMENT AND MAKING THE IMPUGNED ADDITIONS. 3.3. WE HAVE HEARD BOTH THE SIDES VERY CAREFULLY AND GO NE THROUGH THE MATERIAL PLACED, ORDERS OF LOWER AUTHOR ITIES AS WELL AS JUDGMENTS RELIED UPON BEFORE US. THE BRIEF FACTS AS CULLED OUT FROM THE ORDERS OF THE LOWER AUTHORITIES ARE TH AT DURING THE SEARCH CONDUCTED AT THE RESIDENCE OF SHRI PRAKASH H . SAVLA, DOCUMENTS RELATED TO FIRM M/S. MAHAVIR BUILDERS WER E FOUND AND SEIZED. SUBSEQUENTLY, SHRI PRAKASH H. SAVLA AND SHRI PANKAJ GANGAR (HUSBAND OF THE ASSESSEE) GAVE SOME DECLARATIONS OFFERING UNDISCLOSED INCOME OF SOME CO NNECTED PERSONS INCLUDING THE ASSESSEE, AS PER THE CHART GI VEN IN THE ORDER OF LD. CIT(A), WHEREIN AN AMOUNT OF RS. 24.30 LAKHS HAS BEEN OFFERED IN THE NAME OF THE ASSESSEE FOR ASSESS MENT YEAR 2007-08 ON ACCOUNT OF SOME UNDISCLOSED SHARE PURCHA SE TRANSACTIONS. SUBSEQUENTLY, NOTICES WERE ISSUED TO THE ASSESSEE BY THE AO U/S 153C, IN PURSUANCE TO WHICH THE ASSESSEE FILED THE RETURN ON 28.08.2009. IN THE RET URN FILED FOR IMPUGNED ASSESSMENT YEAR, NO DISCLOSURE WAS MADE BY THE ASSESSEE, AS THE SAME WAS MADE ONLY FOR A.Y. 2007-0 8. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO MADE AD DITIONS OF RS. 2,00,000/- ON ACCOUNT OF GIFT RECEIVED BY TH E ASSESSEE. CHHAYA P. GANGAR 9 THE ADMITTED FACTS ON RECORD ARE THAT THE ADDITION HAS BEEN MADE IN ABSENCE OF ANY SEIZED DOCUMENTS. IT IS NOTE D THAT THE DECLARATION WAS MADE BY THE ASSESSEE ONLY FOR A.Y. 2007-08, AND HAS BEEN ACCEPTED AS SUCH BY THE DEPARTMENT. TH E FACTS ON RECORD SUGGEST THAT NOTHING INCRIMINATING HAS BE EN FOUND INDICATING ANY UNDISCLOSED INCOME FOR THE YEAR UNDE R CONSIDERATION. THUS, THE PRIMARY ISSUE TO BE DECIDE D HERE BY US IS THAT WHETHER AN ADDITION COULD BE MADE UNDER THE LAW BY THE AO IN ABSENCE OF, OR UNCONNECTED TO, ANY MATERI AL FOUND DURING THE COURSE OF SEARCH. IT IS NOTED BY US THAT THIS ISSUE IS NO MORE RES-INTEGRA. 3.4. LD. COUNSEL HAS PLACED BEFORE US COPY OF JUDGMENT OF HONBLE COORDINATE BENCH IN THE CASE OF SHRI VIMAL KUMAR RATHI, (SUPRA) WHEREIN IT HAS BEEN HELD THAT NO ADDITION C AN BE MADE IN ABSENCE OF ANY ADVERSE MATERIAL FOUND DU RING THE SEARCH. WE ARE REPRODUCING HEREUNDER RELEVANT PARAS OF THIS JUDGMENT: 9. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE CITED DEC ISION OF THE TRIBUNAL IN THE CASE OF SHRI GOVIND AGARWAL V. ACIT BEING ITA NO: 3389/MUM/2011 DATED 10.01.2014 (SUPRA ); ALL CARGO GLOBAL LOGISTICS V. ADDL.CIT (SUPRA); SKS ISPAT AND POWER LIMITED VS. DCIT CC 45 (ITA 8746/M/12 AND ITA 8747/M/12) (SUPRA) AS WELL AS THE JUDGMENT OF T HE HON BLE BOMBAY HIGH COURT IN THE CASES OF CIT V. ALL CARGO GLOBAL LOGISTIC (374 ITR 645) (SUPRA), COPIES OF WHICH ARE PLACED ON RECORD. ON PERUSAL OF THE SAID CHHAYA P. GANGAR 10 DECISIONS, WE FIND THEY ARE RELEVANT FOR THE PROPOS ITION THAT WHEN NO ASSESSMENT HAS ABATED, THE QUESTION OF MAK ING ANY ADDITION OR MAKING DISALLOWANCE WHICH ARE NOT B ASED ON ONLY MATERIAL FOUND DURING THE SEARCH IS BAD IN LAW. IN THIS REGARD, WE FIND IT RELEVANT TO EXTRACT THE REL EVANT PARAS FROM THE DECISION OF THE TRIBUNAL IN THE CASE OF SHRI GOVIND AGARWAL (SUPRA) AND THE SAME IS AS FOLLOWS: 12. WE HAVE HEARD THE PARTIES AND THEIR DIVERGENT STANDS ON THE LEGAL ISSUE AND THE VALIDITY OF THE INSTANT ASSESSMENT/REASSESSMENT WITH THE ROUTINE ADDITIONS U/S 68 AND SECTION 14A OF THE ACT BASED ON THE ACCOUNTED TRANSACTIONS. THE INSTANT CASE FOR THE AY 2002-03 D EALS WITH THE CASE OF DISTURBING THE COMPLETED ASSESSME NT . EARLIER THE ASSESSMENT WAS COMPLETED U/S 143(1) OF THE ACT. COMPLETENESS OF THE SUMMARY ASSESSMENT IS CONSIDERED AND HELD IN FAVOUR OF THE ASSESSEE VIDE MANY JUDGMENTS CITED ABOVE. IN THE ASSESSMENT U/S 153A, THE AO MADE (I) ADDITION U/S 68 ON ACCOUNT OF ARTIFICIALLY INFLATED INVESTMENT IN HOUSE DULY DISCLOSED IN THE BALANCE SHEET OF THE ASSESSEE RS.31,33,070/-; AND (II) DISALLOWANCE U/S 14A: RS. 23,31,469/-. ADMITTEDLY, THERE IS NO INCRIMINATING MATERIAL BEFORE THE AO TO SUPPO RT THE ABOVE ADDITIONS. THE VALUATION REPORT, WHICH IS GAR NERED BY THE AUTHORITIES, CONSTITUTES MERE ESTIMATES AND THE PROVISIONS OF SECTION 132 IS NOT REQUIRED TO OBTAIN SUCH REPORT FROM THE DVO. AS SUCH, FOR MAKING AFORESAID ADDITIONS OF RS.31,33,070/-, AO HAS NOT USED EVEN T HE SAID VALUATION REPORT AND THE AO DISALLOWED WHAT IS CHHAYA P. GANGAR 11 REPORTED IN THE BOOKS. SIMILAR IS THE CASE WITH THE ADDITIONS U/S 14A OF THE ACT. THEREFORE, UNDISPUTED LY, THE IMPUGNED QUANTUM ADDITIONS ARE MADE MERELY BASED ON THE ENTRIES IN THE ACCOUNTED BOOKS AND CERTAINLY NO T BASED ON EITHER THE UNACCOUNTED BOOKS OF ACCOUNTS OF THE ASSESSEE OR BOOKS NOT PRODUCED TO THE AO EARLIER OR THE INCRIMINATING MATERIAL GATHERED BY THE INVESTIGATIO N WING OF THE REVENUE. CONSIDERING THE LEGAL PROPOSITIONS PLACE BEFORE US BY THE ASSESSEE S COUNSEL, WE ARE OF THE OPINION, SUCH ASSESSMENTS OR ADDITIONS ARE UNSUSTAINABLE IN LAW. 13. FOR THE SAKE COMPLETENESS, WE INSERT HERE SOME OF THE EXTRACTS FROM RELEVANT JUDGMENTS AND THEY ARE: A. [2013 36 TAXMANN.COM 523 (RAJASTHAN) IN THE CASE OF JAI STEEL (INDIA) VS. ACIT - FROM HELD PORT ION: .THE REQUIREMENT OF ASSESSMENT OR REASSESSMENT UND ER THE SAID SECTION HAS TO BE READ IN THE CONTEXT OF S ECTIONS 132 OR 132A, INASMUCH AS, IN CASE NOTHING INCRIMINATING IS FOUND ON ACCOUNT OF SUCH SEARCH OR REQUISITION, THEN THE QUESTION OF REASSESSMENT OF T HE CONCLUDED ASSESSMENTS DOES NOT ARISE , WHICH WOULD REQUIRE MORE REITERATION AND IT IS ONLY IN THE CONTEXT OF THE ABATED ASSESSMENT UNDER SECOND PROVISO WHICH IS REQUIRED TO BE ASSESSED. ....... ....... PARA 26 OF THE JUDGMENT: THE PLEA RAISED ON BEHALF OF THE ASSESSEE THAT AS THE FIRST PROVISO PROVIDES FOR ASSESSMENT OR REASSESSMENT OF THE TOTAL INCOME IN R ESPECT CHHAYA P. GANGAR 12 OF EACH ASSESSMENT YEAR FALLING WITHIN THE SIX ASSE SSMENT YEARS, IS MERELY READING THE SAID PROVISION IN ISOL ATION AND NOT IN THE CONTEXT OF THE ENTIRE SECTION. THE WORDS 'ASSESS' OR 'REASSESS' HAVE BEEN USED AT MORE THAN ONE PLACE IN THE SECTION AND A HARMONIOUS CONSTRUCTION OF THE ENTIRE PROVISION WOULD LEAD TO AN IRRESISTIBLE CONCLUSION THAT THE WORD 'ASSESS' HAS BEEN USED IN THE CONTEXT OF AN AB ATED PROCEEDINGS AND REASSESS HAS BEEN USED FOR COMPLETE D ASSESSMENT PROCEEDINGS, WHICH WOULD NOT ABATE AS TH EY ARE NOT PENDING ON THE DATE OF INITIATION OF THE SE ARCH OR MAKING OF REQUISITION AND WHICH WOULD ALSO NECESSAR ILY SUPPORT THE INTERPRETATION THAT FOR THE COMPLETED ASSESSMENTS, THE SAME CAN BE TINKERED ONLY BASED ON THE INCRIMINATING MATERIAL FOUND DURING THE COURSE OF S EARCH OR REQUISITION OF DOCUMENTS. B. 28 TAXMANN.COM 328 (MUMBAI TRIB.) IN THE CASE OF GURINDER SINGH BAVA VS. DCIT . WHETHER SINCE ASSESSMENT UNDER SECTION 153A WAS PASSED BY ASSESSING OFFICER ON BASIS OF MATERIAL AV AILABLE IN RETURN OF INCOME AND THERE WAS NO REFERENCE TO A NY INCRIMINATING MATERIAL FOUND DURING SEARCH AND SINC E NO ASSESSMENT WAS ABATED, ASSESSMENT UNDER SECTION 153 A WAS TO BE QUASHED BEING MADE WITHOUT JURISDICTION AVAILABLE UNDER SECTION 153A - HELD, YES [PARA 6.2] [IN FAVOUR OF ASSESSEE] PARA 6.1 OF THE ORDER: THE SPECIAL BENCH IN THE CASE OF ALCARGO GLOBAL LOGISTICS LTD. (SUPRA), HAS HELD THA T PROVISIONS OF SECTION 153A COME INTO OPERATION IF A SEARCH CHHAYA P. GANGAR 13 OR REQUISITION IS INITIATED AFTER 31.5.2003 AND ON SATISFACTION OF THIS CONDITION, THE AO IS UNDER OBL IGATION TO ISSUE NOTICE TO THE PERSON REQUIRING HIM TO FURNISH THE RETURN OF INCOME FOR SIX YEARS IMMEDIATELY PRECEDIN G THE YEAR OF SEARCH. THE SPECIAL BENCH FURTHER HELD THAT IN CASE ASSESSMENT HAS ABATED, THE AO RETAINS THE ORIGINAL JURISDICTION AS WELL AS JURISDICTION UNDER SECTION 153A FOR WHICH ASSESSMENT SHALL BE MADE FOR EACH ASSESSMENT YEAR SEPARATELY. THUS IN CASE WHERE ASSESSMENT HAS ABATED THE AO CAN MAKE ADDITIONS IN THE ASSESSMENT, EVEN IF NO INCRIMINATING MATERIAL HAS BEEN FOUND. B UT IN OTHER CASES THE SPECIAL BENCH HELD THAT THE ASSESSM ENT UNDER SECTION 153A CAN BE MADE ON THE BASIS OF INCRIMINATING MATERIAL WHICH IN THE CONTEXT OF RELE VANT PROVISIONS MEANS BOOKS OF ACCOUNT AND OTHER DOCUMEN TS FOUND IN THE COURSE OF SEARCH BUT NOT PRODUCED IN T HE COURSE OF ORIGINAL ASSESSMENT AND UNDISCLOSED INCOM E OR PROPERTY DISCLOSED DURING THE COURSE OF SEARCH. IN THE PRESENT CASE, THE ASSESSMENT HAD BEEN COMPLETED UND ER SUMMARY SCHEME UNDER SECTION 143(1) AND TIME LIMIT FOR ISSUE OF NOTICE UNDER SECTION 143(2) HAD EXPIRED ON THE DATE OF SEARCH. THEREFORE, THERE WAS NO ASSESSMENT PENDING IN THIS CASE AND IN SUCH A CASE THERE WAS N O QUESTION OF ABATEMENT. THEREFORE, ADDITION COULD BE MADE ONLY ON THE BASIS OF INCRIMINATING MATERIAL FOUND D URING SEARCH. CHHAYA P. GANGAR 14 B. ALL CARGO GLOBAL LOGISTICS LTD. V. DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-44 [2012 ] 23 TAXMANN.COM 103 (MUM.) (SB) PARA 58 OF SB DECISION: THUS, QUESTION NO.1 BEFORE US IS ANSWERED AS UNDER: (A) IN ASSESSMENTS THAT ARE ABATED, THE AO RETAINS THE ORIGINAL JURISDICTION AS WELL AS JURISDICTION CONFE RRED ON HIM U/S 153A FOR WHICH ASSESSMENTS SHALL BE MADE FO R EACH OF THE SIX ASSESSMENT YEARS SEPARATELY; (B) IN OTHER CASES, IN ADDITION TO THE INCOME THAT HAS ALREADY BEEN ASSESSED, THE ASSESSMENT U/S 153A WILL BE MADE ON THE BASIS OF INCRIMINATING MATERIAL , WHICH IN THE CONTEXT OF RELEVANT PROVISIONS MEANS - (I) BOOK S OF ACCOUNT, OTHER DOCUMENTS, FOUND IN THE COURSE OF SE ARCH BUT NOT PRODUCED IN THE COURSE OF ORIGINAL ASSESSME NT, AND (II) UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN T HE COURSE OF SEARCH. 14. THUS, IN CASE OF THE COMPLETED ASSESSMENTS EITH ER U/S 143(1) OR 143(3), THE ABOVE EXTRACTS ARE UNIFORM IN ADVOCATING AGAINST MAKING ADDITIONS IN ROUTINE MANN ER IN THE ASSESSMENTS MADE U/S 153A OF THE ACT WHEN THERE IS NO INCRIMINATING MATERIAL GATHERED IN THE SEARCH AC TION. STATUTORY NOTICE U/S 153A OF THE ACT CAN ALSO BE IS SUED TO REITERATE THE RETURNED INCOME OR FOR MAKING ADDITIO NS BASED ON THE INCRIMINATING MATERIAL OR UNPRODUCED B OOKS OF ACCOUNT. OTHERWISE, ADDITIONS MADE IN ROUTINE MA TTER AS IN THE PRESENT APPEAL ARE NOT SUSTAINABLE. FURTHER, FOR THE SAKE COMPLETENESS OF THE ORDER, WE HAVE PERUSED THE CHHAYA P. GANGAR 15 ORDERS/JUDGMENTS RELIED UPON BY LD DR FOR THE REVEN UE AND FOUND THEY ARE DISTINGUISHABLE ON FACTS FOR ONE REASON OR OTHER. TO START WITH, WE HAVE PERUSED THE JUDGME NT OF HONBLE HON BLE DELHI HIGH COURT IN THE CASE OF MADUGULA VENU (SUPRA) AND FIND THAT, THOUGH EXPLAINED THE PROVISIONS IN PLAIN LANGUAGE, IT DOES NOT DEALT WIT H THE RELEVANCE OR FACTUM OF INCRIMINATING MATERIAL. FURT HER, THE JUDGMENT OF ANDHRA PRADESH HIGH COURT IN THE CASE O F GOPAL LAL BHADRUKA (SUPRA) IS NOT ON THE NOTICES ISSUED U/S 153A OF THE ACT AND THE SAME IS PRONOUNCED IN T HE CONTEXT OF THE NOTICE U/S 153C OF THE ACT. FURTHER, ALSO, THE COORDINATE BENCH DECISION IN THE CASE OF SCOPE (P) LTD (SUPRA) HAS GRANTED RELIEF TO THE ASSESSEE THOUGH T HE NOTICE ISSUED U/S 153A OF THE ACT WAS UPHELD. HOWEVER, THI S ORDER HAS NOT CONSIDERED THE THEN EXISTING DECISION OF THE COORDINATE BENCH DECISION IN THE CASE OF PRATIBHA INDUSTRIES LTD (SUPRA) WHICH IS RELEVANT FOR THE PR OPOSITION THAT THE COMPLETED ASSESSMENT MAY NOT BE DISTURBED IN THE ABSENCE OF ANY INCRIMINATING MATERIAL SPECIFIC TO THE ASSESSEE. IN FACT, ALL THESE JUDGMENTS TAKE SPIRIT FROM THE SPECIAL BENCH DECISION IN THE CASE OF ALL CARGO GLO BAL LOGISTICS LTD (SUPRA), WHICH IS RELEVANT FOR THE PROPOSITION THAT THE ASSESSMENT U/S 153A WILL BE MADE ON THE BA SIS OF INCRIMINATING MATERIAL SUCH AS BOOKS OF ACCOUNTS , OTHER DOCUMENTS FOUND IN THE SEARCH BUT NOT PRODUCED IN T HE COURSE OF ORIGINAL ASSESSMENT AND UNDISCLOSED INCOM E OR PROPERTY DISCOVERED IN THE COURSE OF THE SEARCH. 15. ....... CHHAYA P. GANGAR 16 16. IN THESE CIRCUMSTANCES, WE HAVE NO DOUBT ABOUT THE ABSENCE OF ANY SEIZED MATERIAL WHICH ARE INCRIMINAT ING IN NATURE TO BACK THE ADDITIONS U/S 68 OR 14A OF THE A CT MADE IN THE ASSESSMENT MADE U/S 153A OF THE ACT FOR THE AY UNDER CONSIDERATION. REGARDING THE DVO S REPORT GATHERED DURING THE SEARCH ACTION, WE FIND THAT THE REPORT SUFFERS FROM CERTAIN DEFICIENCIES QUA COST OF CONST RUCTION OF RESIDENTIAL PROPERTY AND THE LAND OBTAINED THERETO. THE SAID REPORT CONSTITUTES AN OPINION OF THE THIRD PAR TY WHICH CANNOT BE USED BY THE AO FOR MAKING ADDITIONS AND S UCH ADDITIONS, IF ANY, CANNOT BE SUSTAINED LEGALLY. AS SUCH, WE FIND THAT THE AO HAS NOT USED THE SAID REPORT OF TH E DVO ALSO FOR MAKING ADDITIONS OF RS. 31,33,007/-, THE DIFFERENCE BETWEEN ACCOUNTED AMOUNT OF RS. 46,13,00 7/-, CLAIMED AS THE AMOUNT SPENT ON CONSTRUCTION OF HOUS E AND ACQUISITION OF LAND AS ON 31.3.2002 MINUS RS. RS. 1 4.8 LAKHS, THE INVESTMENT MADE ON THE LAND PLOTS. AO MA DE ADDITION FOR ASSESSEE S FAILURE TO PROVIDE EVIDENCES / BILLS IN SUPPORT OF THE CLAIM OF EXPENDITURE ON THE CONST RUCTION. IT THE PRESUMPTION OF THE AO THAT THE PLOTS SINCE A CQUIRED ONLY BY JULY 2001, THE ASSESSEE WOULD NOT HAVE SPEN D RS. 31,33,007/- BY 31.3.2002. THIS IS MERELY A PRESUMPT ION RATHER CONCLUSION BASED ON ANY EVIDENCES. SUCH ADDI TIONS ARE UNSUSTAINABLE IN LAW IN THE ASSESSMENTS MADE U/ S 153A R.W.S 143(3) OF THE ACT. 17 . RAJASTHAN HIGH COURT JUDGMENT IN THE CASE OF JAI ST EEL (INDIA) (SUPRA), VIDE PARA 18, IT IS CATEGORICALLY MENTIONED THAT THE REQUIREMENT OF ASSESSMENT OR REASSESSMENT CHHAYA P. GANGAR 17 UNDER THE SAID SECTION (153A) HAS TO BE READ IN THE CONTEXT OF SECTIONS 132 OR 132A OF THE ACT, INASMUCH AS, IN CASE NOTHING INCRIMINATING IS FOUND ON ACCOUNT OF SEARCH OR REQUISITION, THEN THE QUESTION OF REASSESSMENT OF T HE CONCLUDED ASSESSMENTS DOES NOT ARISE, WHICH WOULD M ORE REITERATION.. THUS, THE JUDGMENT OF HON BLE HIGH COURT IN THE CASE OF JAI STEEL LTD, SUPRA AND ABOVE DECISIONS OF THE TRIBUNAL ARE CATEGORICAL IN CONCLU DING THAT, IN CASE OF THE CONCLUDED ASSESSMENTS LIKE THE PRESE NT ONE, THE ADDITIONS ARE MADE ONLY BASED ON THE INCRIMINAT ING MATERIAL DISCOVERED DURING THE SEARCH ACTION. THE F ACTS OF THE JAI STEEL LTD (SUPRA) ARE IDENTICAL TO THE PRES ENT ONE IE AO MADE ADDITIONS BY REASSESSING U/S 153A ON THE COMPLETED ASSESSMENT U/S 143(1) OF THE ACT. THUS, CONSIDERING THE JUDGMENT IN THE CASE OF THE JAI STE EL LTD (SUPRA), THE ARGUMENTS ON THE LEGAL ISSUE RAISED BE FORE US STANDS COVERED. THEREFORE, CONSIDERING THE RAJASTHA N HIGH COURT S JUDGMENT IN THE CASE OF JAI STEELS LTD, SUPRA, WE HAVE NO DIFFICULTY IN (I) UPHOLDING THE ISSUE OF NO TICE U/S 153A OF THE ACT AND (2) IN DISAPPROVING THE MAKING OF THE IMPUGNED ADDITIONS U/S 68 AND 14A OF THE ACT, WHICH ARE NOT BACKED BY THE INCRIMINATING MATERIALS. IN THE A BSENCE OF INCRIMINATING MATERIAL, THE ROLE OF THE AO IS ON LY TO REITERATE THE RETURNED INCOME FILED IN RESPONSE TO THE NOTICE U/S 153A OF THE ACT. ACCORDINGLY, IN SUBSTANCE, THE COMMON LEGAL ISSUE RAISED IN THE GROUNDS FOR BOTH T HE APPEALS OF THE ASSESSEE (ITA NO 3389&3390/M/2011) I S ALLOWED. CHHAYA P. GANGAR 18 18. FURTHER, IN THE RECENT PAST, SIMILAR ISSUE WAS ADJUDICATED BY THE HON BLE DELHI HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWLA VIDE ITA NOS. 707/2014 AND OTHERS, DATED 28.8.2015, WHEREIN THE HON BLE DELHI HIGH COURT HAS REITERATED THE ABOVE SETTLED LEGAL PROPOSITION THAT SINCE NO INCRIMINATING MATERIAL WAS UNEARTHED DURIN G THE SEARCH, NO ADDITIONS COULD HAVE BEEN MADE TO THE IN COME ALREADY ASSESSED. IN THIS CASE IT WAS HELD THAT . SINCE NO INCRIMINATING MATERIAL WAS UNEARTHED DURING THE SEARCH, NO ADDITIONS COULD HAVE BEEN MADE TO THE INCOME ALREADY ASSESSED. 11. FURTHER, WE FIND IT RELEVANT TO MENTION HERE TH AT ON PERUSAL OF THE PAPER BOOK FILED BEFORE US, PAGE 23 OF THE SAID PAPER BOOKS SHOWS THE ACCOUNTED NATURE OF THE TRANSACTIONS IN RESPECT OF THE DISPUTED GIFT AMOUNT OF RS. 4 CRORES. IT IS ALSO NOTED THAT THE ADDITIONS WERE MA DE NOT ON ACCOUNT OF GIFTS BUT ON ACCOUNT OF SOURCE OF FUNDS FOR REPAYMENT OF LOANS . IN THIS REGARD, WE FIND THE SAID LOANS ARE REPAID THROUGH JOURNAL ENTRIES. THEREFORE, REVE NUE AUTHORITIES ARE NOT SUPPOSED TO MAKE SUCH ADDITIONS IN THE ASSESSMENT. CONSIDERING THE FACTUAL MATRIX OF THE C ASE AS WELL CONSIDERING THE ABOVE SETTLED LEGAL POSITION O F THE ISSUE THAT IN THE ABSENCE OF ANY INCRIMINATING MATE RIAL FOUND DURING SEARCH, ADDITIONS MADE ON THE ASSESSED INCOME ARE UNSUSTAINABLE IN LAW, WE ARE OF THE CONS IDERED OPINION THAT THE ADDITIONS MADE IN THE INSTANT CASE ARE NOT CHHAYA P. GANGAR 19 SUSTAINABLE AND ACCORDINGLY, WE DELETE THE SAME. CONSIDERING OUR DECISION ON THE LEGAL ISSUE IN FAVO UR OF THE ASSESSEE, THE OTHER GROUNDS DEMAND NO SPECIFIC ADJUDICATION. THUS, ON THE LEGAL GROUND THE ASSESSE E SUCCEEDS AND REST OF THE GROUNDS ARE DISMISSED AS ACADEMIC. 3.5. HONBLE DELHI HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX (CENTRAL)-III V. KABUL CHAWLA: ITA 707/2 014, DECIDED ON 28TH AUGUST, 2015 HAS HELD THAT COMPLETED ASSESSMENTS COULD ONLY BE INTERFERED WITH BY THE AO ON THE BASIS OF ANY INCRIMINATING MATERIAL UNEARTHED DURIN G THE COURSE OF THE SEARCH OR REQUISITION OF THE DOCUMENT S. IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE AO DOES NOT HAVE ANY JURISDICTION TO INTERFERE IN CONCLUDED ASSESSME NTS. HONBLE COURT HAS SUMMARIZED THE LEGAL POSITION IN RESPECT OF SECTION 153A OF THE ACT AS UNDER:- ' 37. ON A CONSPECTUS OF SECTION 153A (1) OF THE ACT, READ WITH THE PROVISOS THERETO, AND IN THE LIGHT OF THE LAW E XPLAINED IN THE AFOREMENTIONED DECISIONS, THE LEGAL POSITION THAT E MERGES IS AS UNDER: I. ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF THE ACT, NOTICE UNDER SECTION 153 A (1) WILL HAVE TO BE MAND ATORILY ISSUED TO THE PERSON SEARCHED REQUIRING HIM TO FILE RETURNS FOR SIX AYS IMMEDIATELY PRECEDING THE PREVIOUS YEAR REL EVANT TO THE AY IN WHICH THE SEARCH TAKES PLACE. II. ASSESSMENTS AND REASSESSMENTS PENDING ON THE DATE O F THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH AYS W ILL HAVE TO BE COMPUTED BY THE AOS AS A FRESH EXERCISE. III. THE AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RE SPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT AY IN WHICH THE SEARCH TAKES PLACE. THE AO HAS THE POWER TO ASSESS AND REA SSESS CHHAYA P. GANGAR 20 THE 'TOTAL INCOME' OF THE AFORE MENTIONED SIX YEARS IN SEPARATE ASSESSMENT ORDERS FOR EACH OF THE SIX YEARS. IN OTH ER WORDS THERE WILL BE ONLY ONE ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX AYS 'IN WHICH BOTH THE DISCLOSED AND THE UN DISCLOSED INCOME WOULD BE BROUGHT TO TAX'. IV. ALTHOUGH SECTION 153 A DOES NOT SAY THAT ADDITIONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF THE SEARCH, OR OTHER POST- SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE AO WHICH CAN BE RELATED TO THE E VIDENCE FOUND, IT DOES NO T MEAN THAT THE ASSESSMENT 'CAN BE ARBITRARY OR MADE WITHOUT ANY RELEVANCE OR NEXUS WI TH THE SEIZED MATERIAL. OBVIOUSLY AN ASSESSMENT HAS TO BE MADE UNDER THIS SECTION ONLY ON THE BASIS OF SEIZED MATERIAL. ' V. IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPLETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSM ENT OR REASSESSMENT CAN BE MADE. THE WORD 'ASSESS' IN SECT ION 153 A IS RELATABLE TO ABATED PROCEEDINGS (I.E. THOSE PE NDING ON THE DATE OF SEARCH) AND THE WORD 'REASSESS' TO COMP LETED ASSESSMENT PROCEEDINGS. VI. IN SO FAR AS PENDING ASSESSMENTS ARE CONCERNED, THE JURISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND TH E ASSESSMENT UNDER SECTION 153A MERGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARATELY FOR EACH AY ON THE BASIS OF THE FIN DINGS OF THE SEARCH AND ANY OTHER MATERIAL EXISTING OR BROUGHT ON THE RECORD OF THE AO. VII. COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153 A ONLY ON THE BASIS OF SOME INCRIMINATING MATERIAL UNEARTH ED DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT.' 3.6. SIMILAR VIEW HAS BEEN TAKEN BY HONBLE DELHI HIGH COURT IN A VERY RECENT JUDGMENT PASSED IN THE CASE OF CIT VS RRJ SECURITIES LTD. 62 TAXMANN.COM 391 (DELHI) (ORDER D T 30 TH CHHAYA P. GANGAR 21 OCTOBER, 2015) . RELEVANT PORTION OF THE ORDER IS REPRODUCED AS UNDER: 36. THE DECISION IN SSP AVIATION (SUPRA) CANNOT BE UND ERSTOOD TO MEAN THAT THE AO HAS THE JURISDICTION TO MAKE A REASSEMENT IN EVERY CASE, WHERE SEIZED ASSETS OR DOCUMENTS ARE HANDED OVER TO THE AO. THE QUESTION WHETHER THE DOCUMENTS/ ASSETS SEIZED COULD POSSIBLY REFLECT ANY UNDISCLOSED INCOM E HAS TO BE CONSIDERED BY THE AO AFTER EXAMINING THE SEIZED ASSETS/DOCUMENTS HANDED OVER TO HIM. IT IS ONLY IN CASES WHERE THE SEIZED DOCUMENTS/ASSETS COULD POSSIBLY REFLECT ANY UNDISCLOSED INCOME OF THE ASSESSEE FOR THE RELEVANT ASSESSMENT YEARS, THAT FURTHER ENQUIRY WOULD BE WARRANTED IN R ESPECT OF THOSE YEARS. WHILST, IT IS NOT NECESSARY FOR THE AO TO BE SATISFIED THAT THE ASSETS/DOCUMENTS SEIZED DURING SEARCH OF A NOTHER PERSON REFLECT UNDISCLOSED INCOME OF AN ASSESSEE BE FORE COMMENCING AN ENQUIRY UNDER SECTION 153C OF THE ACT , IT WOULD BE IMPERMISSIBLE FOR HIM TO COMMENCE SUCH ENQUIRY I F IT IS APPARENT THAT THE DOCUMENTS/ASSETS IN QUESTION HAVE NO BEARING ON THE INCOME OF THE ASSESSEE FOR THE RELEV ANT ASSESSMENT YEARS. 37. AS EXPRESSLY INDICATED UNDER SECTION 153C OF THE A CT THE ASSESSMENT OR REASSESSMENT OF INCOME OF A PERSON OT HER THAN A SEARCHED PERSON WOULD PROCEED IN ACCORDANCE WITH TH E PROVISIONS OF SECTION 153A OF THE ACT. THE CONCLUDED ASSESSMENTS CANNOT BE INTERFERED WITH UNDER SECTION 153A OF THE ACT UNLESS THE INCRIMINATING MATERIAL BELONGING TO THE ASSESSEE HAS BEEN SEIZED. 3.5. COMING BACK TO THE FACTS OF THE CASE, IT IS NOTED THAT UNDISPUTED FACTS ARE THAT THE IMPUGNED ADDITION HAS BEEN MADE IN ABSENCE OF ANY ADVERSE MATERIAL. UNDER THES E CIRCUMSTANCES WE HAVE NO OTHER OPTION BUT TO RESPEC TFULLY FOLLOW THE AFORESAID JUDGMENTS RELIED UPON BY THE L D. COUNSEL. NO CONTRARY JUDGMENTS HAVE BEEN BROUGHT TO OUR NOTI CE BY OTHER SIDE. THUS, RESPECTFULLY FOLLOWING THE AFORES AID CHHAYA P. GANGAR 22 JUDGMENTS WE HOLD THAT THE ADDITION MADE IN THE ASS ESSMENT ORDER ON ACCOUNT OF GIFT OF RS.2,00,000/- IS ILLEGA L AND DESERVES TO BE DELETED AND THEREFORE WE DELETE THE SAME. SINCE, THIS ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESS EE ON PRIMARY LEGAL GROUND, WE FIND THAT OTHER GROUNDS DO NOT REQUIRE ADJUDICATION AT THIS STAGE. THUS, THESE ARE TREATED AS INFRUCTUOUS. 4. ACCORDINGLY, APPEAL OF THE ASSESSEE IS PARTLY ALLO WED. MS. CHHAYA GANGAR: ITA NO.163/MUM/2012 (REVENUES APPEAL) AND C.O. NO.34/MUM/2013 FOR A.Y. 2005-06: 5. IN THIS CASE THERE IS DELAY OF 54 DAYS IN FILING T HE CROSS OBJECTIONS BY THE ASSESSEE BEFORE THE TRIBUNAL. IN THE PETITION FOR SEEKING CONDONATION OF DELAY FOR FILING OF CROS S OBJECTIONS, THE ASSESSEE HAS INTER-ALIA EXPLAINED FOLLOWING REASONS FOR EXPLAINING DELAY:- IT IS SUBMITTED THAT THE RESPONDENT/ CROSS OBJECTO R BRIEFED THAT COUNSEL ABOUT THE FILING OF THE APPEAL BY THE DEPARTMENT AS AGAINST THE ORDER OF THE LEARNED CIT( A) WHICH WAS FAR BEYOND THE DUE DATE FOR FILING THE CR OSS OBJECTION. THEN THE COUNSEL OPINED THAT A CROSS OBJ ECTION BE FILED AND INSTRUCTED THE RESPONDENT/ CROSS OBJEC TOR TO DO SO. SOON AFTER OBTAINING THE PROFESSIONAL ADVICE FROM THE COUNSEL THE RESPONDENT/ CROSS OBJECTOR HAS WITH IN CHHAYA P. GANGAR 23 REASONABLE TIME FILED THIS CROSS OBJECTION BEFORE T HIS HONBLE TRIBUNAL. IT IS SUBMITTED THAT RESPONDENT/ CROSS OBJECTOR, INADVERTENTLY, DUE TO LACK OF PROPER PROFESSIONAL A DVICE ON THIS ISSUE, COULD NOT FILED THE CROSS OBJECTIONS BE FORE THIS HONBLE TRIBUNAL WELL IN TIME I.E. ON OR BEFORE 26. 12.2012 AND BY THE TIME THE RESPONDENT/CROSS OBJECTOR SOUGH T THE COUNSELS ADVICE, THERE AROSE 54 DAYS DELAY IN FILI NG THE CROSS OBJECTION BEFORE THE HONBLE TRIBUNAL. 5.1. THE AFORESAID PETITION IS ALSO SUPPORTED WITH AN A FFIDAVIT FROM THE ASSESSEE. WE HAVE HEARD THE LD. COUNSEL AS WELL AS LD. CIT-DR. AFTER TAKING NO OBJECTION FROM THE LD. CIT-DR WE FIND IT APPROPRIATE TO CONDONE THE DELAY IN FILING OF GROSS OBJECTIONS, IN THE INTEREST OF JUSTICE. THEREFORE, THE CO IS ADMITTED FOR ADJUDICATION. 5.2. IT IS NOTED BY US THAT THE PRIMARY LEGAL ISSUE RAI SED BY THE ASSESSEE IS SAME IN THIS YEAR ALSO. THE ASSESSEE HA S FILED REVISED AND CONCISE GROUNDS OF APPEAL WITH ITS CROS S OBJECTIONS: GROUND NOS. 4 & 5 OF C.O. READ AS UNDER: 4. THE ADDITIONS DELETED BY THE LD. CIT(A) IS JUST AND PROPER UNDER THE FACTS AND CIRCUMSTANCES OF THE CAS E. 5. WITHOUT PREJUDICE THE ADDITIONS MADE IN A 153C PROCEEDINGS SHOULD BE BASED ONLY UPON SEIZED MATERI AL AND IN THE INSTANT CASE THESE IMPUGNED ADDITIONS WH ICH STANDS DELETED BY THE LD. CIT(A) BASED ON FACTS ARE IN CHHAYA P. GANGAR 24 VIOLATION OF THE PROVISIONS OF SECTION 153C IN AS M UCH AS THE SAID IMPUGNED ADDITIONS DELETED BY CIT(A) DO NO T CONSTITUTED PAR OF SEIZED MATERIAL FOUND AT THE TIM E OF SEARCH UNDER THE FACTS AND CIRCUMSTANCES OF THE CAS E. 5.3. IT IS NOTED THAT IN THE ASSESSMENT ORDER THE ADDIT ION HAS BEEN MADE BY THE AO BY TREATING THE LONG TERM CAPIT AL GAIN EARNED BY THE ASSESSEE ON THE SALE OF SHARES AS INC OME FROM OTHER SOURCES. THE FACTS INVOLVED ARE IDENTICAL IN THE SENSE THAT THE IMPUGNED ADDITION HAS BEEN MADE IN ABSENCE OF ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF S EARCH. THUS, FOLLOWING OUR ORDER FOR A.Y. 2003-04 (SUPRA), WE FIND THAT ADDITIONS ARE NOT SUSTAINABLE. ACCORDINGLY, TH E SAME ARE HEREBY DIRECTED TO BE DELETED. THUS, GROUND NOS. 4 & 5 OF THE C.O. ARE ALLOWED. 5.4. SINCE, WE HAVE FOUND THAT ADDITIONS ARE NOT SUSTAI NABLE ON THE JURISDICTIONAL GROUND, THEREFORE, WE ARE NOT DECIDING THIS ISSUE ON MERITS, AND THEREFORE APPEAL OF THE R EVENUE BECOME INFRUCTUOUS. 6. AS A RESULT, CROSS OBJECTION FILED BY THE ASSESSEE IS PARTLY ALLOWED AND APPEAL FILED BY THE REVENUE IS DISMISSE D AS INFRUCTUOUS. MS. CHHAYA GANGAR: ITA NO.164/MUM/2012 (REVENUES APPEAL) AND CROSS OBJECTION NO.35/MUM/2013 FOR A.Y. 2006-07: CHHAYA P. GANGAR 25 7. WE NOTE THAT THE FACTS INVOLVED IN THIS YEAR ARE I DENTICAL TO THE FACTS OF A.Y. 2005-06. ACCORDINGLY, FOLLOWING O UR ORDER, THE DELAY IN FILING OF THE CROSS OBJECTION IS CONDONED, AND CO IS ADMITTED FOR ADJUDICATION, AND GROUND NOS.4 & 5 OF THE C.O. OF A.Y. 2006-07 ARE ALLOWED. THEREFORE, APPEAL OF THE REVENUE BECOMES INFRUCTUOUS. 8. AS A RESULT, CROSS OBJECTION FILED BY THE ASSESSEE IS PARTLY ALLOWED AND APPEAL FILED BY THE REVENUE IS DISMISSE D. APPEALS IN THE CASE OF MR PANKAJ GANGAR: ITA NO.159/MUM/2012 (REVENUES APPEAL) AND CO NO.36/MUM/2013 FOR A.Y. 2005-06 9. IN THESE APPEALS ALSO THERE IS A DELAY OF 54 DAYS IN FILING CROSS OBJECTION BEFORE THE TRIBUNAL BY THE ASSESSEE . THE FACTS ARE IDENTICAL TO THAT OF MS. CHHAYA GANGAR FOR A.Y. 2005-06 ABOVE, THUS FOLLOWING OUR ORDER, THE DELAY IS CONDO NED AND C.O. IS ADMITTED FOR ADJUDICATION. 9.1. IT IS FURTHER NOTED THAT GROUND NOS. 4 AND 5 OF TH E C.O. ARE IDENTICAL TO THE CASE OF MS. CHHAYA GANGAR AND THEREFORE THESE ARE ALLOWED. THE CO IS TREATED AS PARTLY ALLO WED. 9.2. IN THE REVENUES APPEAL, GROUNDS NO. 1, 2, 3 DEAL WITH THE ACTION OF AO IN TREATING THE AMOUNT OF CAPITAL GAIN EARNED BY THE ASSESSEE AS A RESULT OF SALE OF SHARES, AS INC OME FROM OTHER SOURCES. THIS ADDITION HAS BEEN MADE WITHOUT ANY CHHAYA P. GANGAR 26 INCRIMINATING MATERIAL AND THEREFORE FACTS BEING ID ENTICAL WITH THE CASE OF M/S. CHHAYA GANGAR FOR A.Y. 2005-06, FO LLOWING OUR ORDER, WE HOLD THAT THE ADDITION WAS BEYOND JUR ISDICTION, AND THEREFORE THE SAME IS HEREBY DELETED. 10. IN GROUND NO.4 OF REVENUES APPEAL, THE AO IS AGGR IEVED WITH THE ACTION OF LD. CIT(A) IN DELETING THE ADDIT ION OF RS.1,50,000/- MADE ON ACCOUNT OF UNEXPLAINED CASH R ECEIPTS BY HOLDING THAT THESE CANNOT BE RENTAL RECEIPTS WHE N THE AO HAD NEVER HELD THAT THESE RECEIPTS WERE RENTAL RECE IPTS. 10.1. BRIEF FACTS ARE THAT THE AO FOUND THAT SOME OF THE DOCUMENTS FOUND DURING THE COURSE OF SEARCH WERE RE LATING TO M/S VIVIDHAM SWEETS & SNACKS SHOP, BORIVALI (W), AN D HELD ON THE BASIS OF THESE DOCUMENTS THAT THE ASSESSEE H AD EARNED A RENT OF RS.50,000/- PER MONTH FROM JANUARY 2005 T O DECEMBER 2007, AND ACCORDINGLY HE MADE ADDITION IN FOUR YEARS AS FOLLOWS. A.Y. AMOUNT OF ADDITION 2005-06 1,50,000/- 2006-07 6,00,000/- 2007-08 6,00,000/- 2008-09 4,50,000/- 10.2. DURING THE COURSE OF HEARING BEFORE THE LD. CIT(A) , IT WAS EXPLAINED BY THE ASSESSEE THAT THE IMPUGNED DOC UMENTS HAVE ALREADY BEEN CONSIDERED WHILE MAKING OFFER OF INCOME OF RS.30,00,000/- BY THE ASSESSEE AND THE SAME HAS BEE N CHHAYA P. GANGAR 27 INCLUDED IN THE RETURN OF INCOME FOR A.Y. 2007-08, AND HAS BEEN ACCEPTED AS SUCH BY THE DEPARTMENT, AND THEREF ORE NO FURTHER ADDITION WAS CALLED FOR. 10.3. LD. CIT(A) CONSIDERED SUBMISSIONS OF THE ASSESSEE IN DETAIL, AND AFTER CONSIDERING ENTIRE INCRIMINATING MATERIAL AND DETAILS OF SURRENDER MADE BY THE ASSESSEE, IT WAS C ONCLUDED BY HIM THAT ENTRIES CONTAINED IN THESE DOCUMENTS HAVE BEEN MISUNDERSTOOD BY THE AO, AND IN ANY CASE SAME HAS B EEN COVERED IN THE SURRENDER MADE BY ASSESSEES FIRM. T HE FINDING RECORDED BY THE LD. CIT(A) ARE REPRODUCED HEREIN BE LOW FOR SAKE OF READY REFERENCE : 3.4 FROM THE PERUSAL OF THESE ENTRIES, IT IS NOTICE D THAT THE ENTRIES ARE RELATING TO PAYMENT AND RECEIPT AND BAL ANCE AMOUNT SHOWN BY THE APPELLANT WITH VIVIDHAM SWEETS & SNACKS SHOP. THE ENTRIES OF RS. 50,000/- GIVEN AT P AGE NO. 25 OF JULY 05 AND PAGE NO. 32 OF MARCH 2006 AGAINST WHICH EXPENSE OF RS.14,169/- AND RS. 73,670/- HAS BEEN MENTIONED AND BALANCE OF RS.35,831/- AND MINUS RS.23,670/- HAS BEEN GIVEN. SIMILARLY OTHER ENTRIES ARE MENTIONED ON VARIOUS DA TES AND THE TOTAL AMOUNTS OF RS.1,88,555/- AGAINST WHIC H THE EXPENSE OF RS.1,32,135/- AND BALANCE OF RS. 56,420/ - HAS BEEN SHOWN. THE INTERPRETATION OF THESE ENTRIES SHO WS THAT THE ASSESSEE HAS MADE PAYMENT OF RS. 1,88,555/- AGA INST THE EXPENSES OF RS.1,32,135/- AND BALANCE OF RS. 56,420/- DUE FROM M/S. VIVIDHAM SWEETS & SNACKS SHO P. IT IS ALSO MENTIONED THAT THE SEIZED MATERIAL NOTIN GS ARE CHHAYA P. GANGAR 28 RELATED WEDDING OF DAUGHTER OF SHRI PRAKASH SAVLA A ND THE DECLARATION HAS BEEN MADE U/S.132(4) IN THE HAN DS OF THE PARTNERSHIP FIRM WHERE SHRI PRAKASH SAVLA AND T HE APPELLANT IS A PARTNER. THE EXPENDITURE INCURRED SH OWN ON THESE LOOSE PAPERS HAVE BEEN OFFERED TO TAX IN T HE HANDS OF THE PARTNERSHIP FIRM AND DUE TAX HAVE BEEN PAID ON THIS AMOUNT. ON THE OTHER HAND, THE AO HAS ASSUMED THAT VIVIDHAM SWEETS & SNACKS SHOP IS BELONGING TO THE ASSESSEE AND THE ASSESSEE HAS RECEIVED RENT OF RS. 50,000/- FROM M/S. VIVIDHAM SWEETS & SNACKS SHOP AND TREATED IT UNEXPLAINED REN T RECEIVED BY THE ASSESSEE AND TREATED IT AS UNEXPLAI NED INCOME FOR THE A.YS. 2005-06 TO 2008-09. THE AO HAS NOT MADE ANY ENQUIRY FROM VIVIDHAM SWEETS & SNACKS SHOP THAT WHETHER THE SHOP IS BELONGING TO THE APPELLANT NOR ANY OTHER CORROBORATIVE EVIDENCE FOUND AND SEIZED D URING THE COURSE OF SEARCH TO PROVE THIS FACT THAT THE EN TRIES OF RS. 50,000/- IS REPRESENTING THE RENTAL INCOME NOT SHOWN BY THE A5SESSEE. THE PERUSAL OF THE SEIZED DOCUMENT ENTRIES AS STATED ABOVE CLEARLY SHOWS THAT IT IS AN ACCOUNT OF VIVIDHAM SWEETS & SNACKS SHOP WHERE THE RECEIPT, PAYMENT OF EXPENSES AND BALANCE AMOUNT HAS BEEN MENTIONED ON THESE PAGES WHICH WAS DULY DECLARED BY THE APPELLANT IN THE CASE OF THE FIRM AND DUE TAX H AVE BEEN PAID ON THIS AMOUNT. THE PRESUMPTION OF THE AO THAT IT WAS A RENTAL INCOME IS NOT BASED ON ANY COGENT REAS ON OR DOCUMENTARY EVIDENCE. THE INTERPRETATION MADE BY TH E AO IS BASED ON PRESUMPTION AND CONJUNCTURES ONLY CHHAYA P. GANGAR 29 WHICH CANNOT BE SUSTAINED AS PER THE PROVISIONS OF ACT. KEEPING IN VIEW ALL THESE FACTS AND CIRCUMSTANCES THAT THERE WAS NOT EVEN ANY IOTA OF EVIDENCE TO PROVE THAT THE ASSESSEE HAS RECEIVED RENTAL INCOME OF RS. 50,000/- FROM VIVIDHAM SWEETS & SNACKS SHOP, THEREFORE, THE ADDITION MADE BY THE AO ON ACCOUNT OF RENTAL INCOME FOR THE YEAR UNDER CONSIDE RATION IS NOT SUSTAINABLE, HENCE DELETED. GROUND OF APPEAL IS ALLOWED. 10.4. WE HAVE CAREFULLY GONE THROUGH THE SUBMISSION MADE BY THE LD. CIT-DR VIS--VIS AFORESAID FINDINGS, AND NO TE THAT THE FINDINGS RECORDED BY THE LD. CIT(A) ARE WELL REASON ED. AFTER ANALYZING THE FACTS IT HAS BEEN RIGHTLY HELD BY THE LD. CIT(A) THAT THE ENTRIES CONTAINED IN THE SEIZED DOCUMENTS CLEARLY SHOWS THAT IT IS AN ACCOUNT OF VIVIDHAM SWEETS & SN ACKS SHOP WHEREIN RECEIPTS, PAYMENT OF EXPENSES AND BALA NCE AMOUNT HAS BEEN MENTIONED ON THESE PAGES WHICH HAVE BEEN DULY DECLARED BY THE ASSESSEE IN THE CASE OF PARTNE RSHIP FIRM OF WHICH THE ASSESSEE IS A PARTNER AND DUE TAX HAS BEEN PAID ON THIS AMOUNT. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD. CIT(A), AND NOTHING WRONG COULD BE POINTED OUT BY LD. CIT-DR IN THE DETAILED FACTUAL FINDINGS OF LD. CIT( A), AND THEREFORE, WE UPHOLD THE SAME. ACCORDINGLY, GROUND NO.4 OF DEPARTMENTS APPEAL IS DISMISSED. 11. AS A RESULT, CROSS OBJECTION FILED BY THE ASSESSEE IS PARTLY ALLOWED AND APPEAL FILED BY THE REVENUE IS DISMISSE D. CHHAYA P. GANGAR 30 ITA NO.160/MUM/2012 (REVENUES APPEAL) AND C.O. NO.37/MUM/2013 FOR A.Y. 2006-07 12. IT IS NOTED THAT IN THIS YEAR ALSO THE FACTS ARE IDENTICAL AND THEREFORE C.O. IS ADMITTED FOR ADJUDICATION CONDONI NG THE DELAY, FOLLOWING OUR ORDER FOR A.Y. 2005-06. 12.1 FURTHER, IN CONSISTENCY WITH OUR ORDER FOR A.Y. 20 05-06, GROUND NOS. 4 & 5 OF THE REVISED AND CONCISE GROUND S OF CROSS OBJECTIONS FILED BY THE ASSESSEE ARE ALLOWED. 13. GROUNDS NOS. 1, 2, 3, OF REVENUES APPEAL ARE IDEN TICAL TO GROUNDS NOS. 1, 2, & 3 OF A.Y. 2005-06, AND THEREFO RE, FOLLOWING OUR ORDER, THESE GROUNDS ARE DISMISSED. 14. GROUND NO. 4 IS IDENTICAL TO GROUND NO. 4 OF A.Y. 2005-06 AND THEREFORE, FOLLOWING OUR ORDER THIS GROUND IS A LSO DISMISSED. 15. IN GROUND NO.5, THE REVENUE HAS CHALLENGED THE ACT ION OF LD. CIT(A) IN DELETING THE ADDITION OF RS.3,75,000/ - MADE U/S 68 OF THE ACT. 15.1. THE BRIEF FACTS ARE THAT DURING THE COURSE OF ASSE SSMENT PROCEEDINGS, THE AO FOUND THAT THE ASSESSEE HAS REC EIVED LOAN OF RS.4,25,000/-, AND THE SAME WAS ADDED U/S 68 OF THE ACT. LD. CIT(A) DELETED IT ON THE GROUND THAT THE ASSESS EE HAS DISCHARGED ITS ONUS U/S 68 OF THE ACT. CHHAYA P. GANGAR 31 15.2. BEING AGGRIEVED, THE REVENUE HAS FILED AN APPEAL B EFORE THE TRIBUNAL. 15.3. IT IS NOTED BY US THAT THIS ADDITION HAS BEEN MADE IN ABSENCE OF ANY INCRIMINATING MATERIAL. WE HAVE ALRE ADY HELD IN EARLIER PART OF THIS ORDER NO ADDITION COULD HAVE B EEN MADE UNDER THE LAW IN ABSENCE OF INCRIMINATING MATERIAL. THEREFORE, THE IMPUGNED ADDITION WAS BEYOND JURISDICTION. THUS , RESPECTFULLY FOLLOWING OUR ORDER, WE FIND THAT LD. CIT(A) IS RIGHTLY DELETED THIS ADDITION. THEREFORE, THIS GROU ND OF THE REVENUES APPEAL IS DISMISSED. 16. AS A RESULT, CROSS OBJECTION FILED BY THE ASSESSEE IS PARTLY ALLOWED AND APPEAL FILED BY THE REVENUE IS DISMISSE D. REVENUES APPEAL IN ITA NO.1784/MUM /2011 FOR A.Y. 2007-08: 17. IN GROUND NO.1, THE REVENUE HAS CHALLENGED THE ACT ION OF LD. CIT(A) IN DELETING THE ADDITION OF RS.6,00,000/ - MADE BY THE AO ON ACCOUNT OF RENT RECEIVED FROM M/S. VIVIDH AM SWEETS & SNACKS SHOP. IT IS NOTED BY US THAT THIS G ROUND IS IDENTICAL TO GROUND NO. 4 OF REVENUES APPEAL FOR A .Y. 2005- 06, AND THEREFORE RESPECTFULLY FOLLOWING OUR ORDER FOR A.Y. 2005-06, WE DISMISS GROUND NO.1 RAISED BY THE REVEN UE. 18. GROUND NO.2: IN THIS GROUND, THE REVENUE HAS CHALL ENGED THE ACTION OF LD. CIT(A) IN GRANTING TELESCOPING OF THE CHHAYA P. GANGAR 32 UNACCOUNTED BROKERAGE AND COMMISSION INCOME AGAINST THE AMOUNT OFFERED IN THE RETURN BY THE ASSESSEE. 18.1. BRIEF FACTS ARE THAT DURING THE COURSE OF ASSESSME NT PROCEEDINGS IT WAS NOTED BY THE AO THAT DURING THE COURSE OF SEARCH CERTAIN PRINT OUT FROM ACCOUNTING SOFTWARE W ERE FOUND AND SEIZED, SHOWING THAT IN THE LEDGER ACCOUNT UNDE R THE NAME OF COMMISSION AND BROKERAGE, THERE WAS AN ENTR Y OF CASH RECEIVED OF RS. 6,00,000/- ON 31.03.2007 IN TH E BOOKS OF ACCOUNTS OF THE ASSESSEE. THE ASSESSEE SUBMITTED THAT THIS ENTRY HAS ALREADY BEEN CONSIDERED IN THE OFFER OF I NCOME MADE BY THE ASSESSEE FOR AN AGGREGATE AMOUNT OF RS.30,00,000/- LAKHS, AND THEREFORE, IT SHOULD BE A DJUSTED WITH THAT. BEING NOT SATISFIED, THE AO MADE THE ADD ITION. IN THE APPEAL BEFORE LD. CIT(A) DETAILED ARGUMENTS WER E MADE WHEREIN THE ASSESSEE REITERATED ITS STAND AND REQUE STED FOR TELESCOPING OF THIS AMOUNT AGAINST THE INCOME OFFER ED. 18.2. IN THE ORDER PASSED BY THE LD. CIT(A), HE ACCEPTED THE CLAIM OF THE ASSESSEE AND GRANTED THE BENEFIT OF TE LESCOPING. 18.3. BEING AGGRIEVED, THE REVENUE FILED AN APPEAL BEFOR E THE TRIBUNAL. IT HAS BEEN ARGUED BY THE LD. CIT-DR THAT THERE WERE NO BASIS WITH THE LD. CIT(A) TO GRANT BENEFIT OF TELESCOPING. 18.4. WE HAVE CAREFULLY GONE THROUGH THE ORDER OF LD. CI T(A). IT IS NOTED BY US THAT IN THE ASSESSMENT PROCEEDING S BEFORE CHHAYA P. GANGAR 33 THE AO, THE ASSESSEE CLAIMED THAT THE ENTRY OF COMM ISSION AND BROKERAGE OF RS.6,00,000/- RECEIVED IN CASH IS COVERED IN THE DECLARATION MADE ON ACCOUNT OF AMOUNT SPENT OF RENOVATION OF HOUSE OF THE ASSESSEE. THIS CLAIM WAS NOT ACCEPTED BY THE AO ON THE GROUND THAT NO CO-RELATIO N COULD BE SHOWN BETWEEN THE TWO BY THE ASSESSEE. BUT LD. C IT(A) ACCEPTED IT AND GRANTED THE BENEFIT OF TELESCOPING. IT IS NOTED BY US THAT NO REASONING HAS BEEN GIVEN BY LD. CIT(A ) AS TO HOW AND IN WHAT MANNER THE AMOUNT OF RS.6,00,000/- EARNED ON ACCOUNT OF SOME BROKERAGE AND COMMISSION INCOME IS COVERED WITHIN THE OFFER OF RS. 30 LAKHS MADE BY THE ASSESSEE. LD. CIT(A) HAS DISCUSSED IN DETAIL EN TIRE LAW ON TELESCOPING BUT FAILED TO DISCUSS THAT HOW AND IN W HAT MANNER, IMPUGNED AMOUNT WAS COVERED IN THE INCOME O FFERED BY THE ASSESSEE. WE FIND THAT GRIEVANCE OF THE REVE NUE THAT THE ASSESSEE WAS NOT ABLE TO ESTABLISH ANY NEXUS BE TWEEN THE TWO AMOUNTS IS JUSTIFIED. WE FURTHER FIND THAT NO P ROPER REASONING ON FACTS HAS BEEN GIVEN BY THE LD. CIT(A) WHILE GIVING BENEFIT OF TELESCOPING. THUS, THE ACTION OF LD. CIT(A) IN DELETING THIS ADDITION IS REVERSED AND ADDITION MAD E BY THE LD. AO ON THIS GROUND IS UPHELD. 19. AS A RESULT, APPEAL FILED BY THE REVENUE IS PARTLY ALLOWED. ITA NO.1782/MUM/2011 (REVENUES APPEAL) FOR A.Y. 20 08- 09: 20. GROUND NO.1: THIS GROUND IS IDENTICAL TO GROUND NO.1 OF REVENUES APPEAL OF A.Y. 2007-08, AND THEREFORE FOL LOWING OUR ORDER, THIS GROUND IS DISMISSED. CHHAYA P. GANGAR 34 21. GROUND NO. 2: IT IS IDENTICAL TO THE GROUND NO.2 OF A.Y. 2007-08 AND THEREFORE FOLLOWING OUR ORDER WE ALLOW THIS GROUND. 22. AS A RESULT, APPEAL OF THE REVENUE IS PARTLY ALLOW ED. NOW, WE TAKE UP APPEALS OF MR. PRAKASH H. SAVLA (ASSESSEES APPEAL) ITA NO.1754/MUM/2011 FOR A.Y. 2008- 09: 23. GROUND NO.1: IN THIS GROUND THE ASSESSEE HAS CHALLENGED THE ACTION OF LD. CIT IN MAKING ADDITION OF SUM OF RS. 2,58,000/- BEING UNDISCLOSED EXPENDITURE U/S 69C ON THE BASIS OF JOTTINGS IN SEIZED MATERIAL. 24. THE BRIEF FACTS ARE THAT DURING THE COURSE OF ASSE SSMENT PROCEEDINGS THE AO FOUND THAT THERE WAS JOTTING ON A DOCUMENT FOUND DURING THE COURSE OF SEARCH PAGE I.E . NO.16 OF ANNEXURE GS4/A2. THE ASSESSEE EXPLAINED THAT HE DID NOT KNOW MR. ARUN BHAI WHOSE NAME WAS MENTIONED IN THE SEIZED DOCUMENT, AND THAT HE HAD NOTHING TO DO WITH THIS D OCUMENT. BUT THE AO MADE ADDITION OF THE SAME. 24.1. BEING AGGRIEVED, THE ASSESSEE CONTESTED THE MATTER BEFORE LD. CIT(A) WHEREIN ASSESSEE MADE DETAILED SU BMISSIONS REITERATING ITS STAND BUT LD. CIT(A) DID NOT AGREE WITH THE SUBMISSION OF THE ASSESSEE ON THE GROUND THAT ASSES SEE FAILED CHHAYA P. GANGAR 35 TO PRODUCE MR. ARUNBHAI BEFORE THE AO FOR HIS EXAMI NATION AND ALSO FAILED TO SUBMIT ANY DOCUMENTARY EVIDENCES TO EXPLAIN THIS ENTRY, AND ACCORDINGLY HE CONFIRMED TH E ADDITION. 24.2. BEFORE US, LD. COUNSEL HAS VEHEMENTLY ARGUED THAT THERE IS NO EVIDENCE TO SHOW THAT THE IMPUGNED DOCU MENT BELONGS TO THE ASSESSEE AND IT WAS NOT CLEAR THAT W HETHER THE AMOUNT REPRESENTS INCOME OR EXPENDITURE, AND THAT I T WAS MERELY A NOTING, AND THEREFORE NOTHING MORE COULD B E PROVED FROM IT. THE ALTERNATIVE ARGUMENT OF THE LD. COUNSE L WAS THAT IT SHOULD BE TELESCOPED AGAINST THE INCOME OFFERED. 24.3. ON THE OTHER HAND, LD. CIT-DR HAS OPPOSED THE SUBMISSIONS MADE BY THE LD. COUNSEL AND SUBMITTED T HAT THE ASSESSEE DID NOT BRING ON RECORD ANY EVIDENCE IN SU PPORT OF ITS CLAIM AND HE PLACED RELIANCE ON THE ORDERS OF LOWER AUTHORITIES. 24.4. WE HAVE HEARD BOTH THE SIDES AND GONE THROUGH THE MATERIAL PLACED BEFORE US. IT IS NOTED BY US THAT F OLLOWING SCRIBBLING HAS BEEN MADE ON PAGE NO.16 OF THE AFORE SAID ANNEXURE GS4-A2: ARUNBHAI- 9967437348 5,58,000/- 24.5. IT IS NOTED FROM THE ABOVE THAT THIS DOCUMENT IS H ALF A DUMB AND HALF A SPEAKING DOCUMENT. BEFORE IT COULD BE USED FOR MAKING ADDITION IN THE HANDS OF THE ASSESSEE, T HERE WAS A LEGAL OBLIGATION ON THE SHOULDERS OF THE AO, TO MAK E IT AS FULLY SPEAKING DOCUMENT, SINCE HE WANTED TO MAKE ADDITION ON THE CHHAYA P. GANGAR 36 BASIS OF THIS DOCUMENT. THERE ARE NO INDICATIONS OR OBSERVATIONS THE ASSESSMENT ORDER SHOWING THAT WHET HER AO MADE ANY EFFORTS TO CONTRACT MR. ARUNBHAI. IT HAS N OT EVEN BEEN MENTIONED IN THE ASSESSMENT ORDER THAT WHETHER HE ASKED THE ASSESSEE TO PRODUCE MR. ARUNBHAI. IT IS N OT EVEN COMING OUT THAT WHETHER THIS AMOUNT HAS BEEN RECEIV ED OR GIVEN OR WHETHER THIS AMOUNT SHALL BE RECEIVED OR S HALL BE GIVEN. WHETHER IT IS INCOME OR EXPENSE? NOTHING IS COMING OUT FROM THE PERUSAL OF THIS DOCUMENT, AND THEREFORE IN OUR CONSIDERED VIEW, NO ADDITION COULD HAVE BEEN MADE S IMPLY RELYING ON THE BASIS OF THIS DOCUMENT THAT TOO WITH OUT BRINGING ANY MATERIAL ON RECORD TO EXPLAIN AND SUBSTANTIATE THIS DOCUMENT. THEREFORE, ADDITION WAS WRONGLY MADE BY T HE AO, AND THEREFORE, SAME IS HEREBY DELETED. 25. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. ITA NO.1781/MUM/2011 (REVENUES APPEAL) FOR A.Y. 20 08- 09: 26. GROUND NO.1: THIS GROUND IS WITH REGARD TO ACTION OF LD. CIT(A) IN DELETING THE ADDITION ON ACCOUNT OF UNSEC URED LOAN OF RS. 50,000/-. 26.1. BRIEF FACTS ARE THAT DURING THE COURSE OF ASSESSME NT PROCEEDINGS IT WAS NOTED THAT THE ASSESSEE HAS RECE IVED VARIOUS LOANS IN DIFFERENT YEAR INCLUDING A LOAN OF RS.50,000/- RECEIVED IN THE IMPUGNED YEAR FROM MR. DHARA M BAHU VA. THE CHHAYA P. GANGAR 37 ASSESSEE SUBMITTED A COPY OF BANK PASS BOOK IN SUPP ORT OF IDENTITY AND FINANCIAL CAPACITY AND GENUINENESS OF THE LOAN. THE AO WAS NOT SATISFIED AND THEREFORE ADDITION WAS MADE. BEFORE THE LD. CIT(A), THE ASSESSEE MADE DETAILED S UBMISSIONS. THE CIT HAS DELETED THIS ADDITION BY RECORDING DETA ILED FINDINGS WHICH ARE REPRODUCED HEREUNDER: I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT , ORDER OF THE AO AND FACTS OF THE CASE CAREFULLY, IT IS NOTICED THAT THE APPELLANT HAS RECEIVED LOANS AND ADVANCES IN THE YEAR UNDER CONSIDERATION. THE AO HAS ASKED TO SUBMIT THE CONFIRMATIONS OF THE CREDITORS TO PROVE THE GENUINENESS OF THE TRANSACTIONS. THE CONFIRMATIONS AND BANK PASS BOOK OF THE CREDITORS WAS FILED BEFORE THE AO BUT I T WAS NOT ACCEPTED WITH THE ARGUMENT THAT THE CREDITORS WERE NOT HAVING PAN NUMBER BECAUSE THEY WERE NOT INCOME-TAX ASSESSEES. ON THE OTHER HAND, THE A.R. OF THE APPELLANT HAS SUBMITTED THAT THE LOANS RECEIVED WERE DISCLOSED IN THE INCOME- TAX RETURNS FILED BEFORE THE SEARCH OPERATION. NO INCRIMINATING DOCUMENT WAS FOUND AND SEIZED DURING THE COURSE OF SEARCH TO ESTABLISH THAT THE LOANS WERE BOGUS. THE LOANS WERE RECEIVED THROUGH CHEQUE AND THE BANK PASS BOOK OF THE CREDITORS WAS SUBMITTED BEFORE THE A.O. REGARDING THE LOAN OF RS. 50,000/- RECEIVED FROM SHRI DHARA M. BAHUVA THE APPELLANT SUBMITTED THAT CONFIRMATION AND BANK PASS BOOK OF THE CREDITOR WAS FURNISHED CHHAYA P. GANGAR 38 BEFORE THE A.O. I HAVE PERUSED THE CONFIRMATION AND BANK PASS BOOK AND NOTICED THAT LOAN OF RS. 50,000/- WAS GIVEN THROUGH CHEQUE DEBITED IN THIS ACCOUNT. ONLY ARGUMENT OF THE AG THAT THE CREDITOR IS NOT INCOME-TAX ASSESSEE AND HAVING NO PAN NUMBER CANNOT BE TAKEN THE SINGLE CRITERIA FOR MAKING DISALLOWANCE. KEEPING IN VIEW THESE FACTS AND CIRCUMSTANCES, IT IS HELD THAT THE AG HAS ERRED IN MAKING DISALLOWANCE OF RS. 50,000/. THUS THE ADDITION MADE IS DELETED AND GROUND OF APPEAL IS AL LOWED. 26.2. IT IS NOTED THAT LD. CIT(A) HAS GIVEN PROPER REASO NING WHILE DELETING THIS ADDITION. IN OUR CONSIDERED VIE W, THE ASSESSEE HAS DISCHARGED ITS ONUS U/S 68. EVEN OTHER WISE, THE IMPUGNED ADDITION WAS MADE IN ABSENCE OF INCRIMINAT ING MATERIAL, AND KEEPING IN VIEW ALL THE FACTS AND CIR CUMSTANCES OF THE CASE, THE ADDITION BEING ILLEGAL, HAS RIGHTL Y BEEN DELETED BY LD. CIT(A). GROUND NO.1 OF REVENUES APPEAL IS D ISMISSED. 27 . GROUND NOS. 2 & 3:- THESE GROUNDS DEAL WITH THE ADDITION WITH REGARD TO UNEXPLAINED JEWELLERY OF RS.16,58,750/- AS UNEXPLAINED INVESTMENT. 27.1. THE BRIEF FACTS ARE THAT DURING THE COURSE OF SEAR CH, JEWELLERY WORTH RS.31,29,480/- WAS FOUND AS PER ANNEXURE '3' OF THE PANCHNAMA. OUT OF THIS, DIAMOND JEWELLERY OF RS. 16,58,750/- WAS SEIZED. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE SUBMITTED THAT CHHAYA P. GANGAR 39 THE DIAMOND JEWELLERY WHICH WAS FOUND DURING THE COURSE OF SEARCH WAS FULLY DISCLOSED IN THE RETURN AND EVEN THE ADDITIONAL DECLARATION OF RS. 31.50 LAKHS ON THIS ACCOUNT HAS DULY COVERED THE AMOUNT OF DIAMOND JEWELLERY FOUND AND SEIZED. AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE, THE AO TREATED IT AS UNSATISFACTORY BECAUSE THE ASSESSEE COULD NOT GIVE ITEM-WISE TALLY OF THE DIAMOND JEWELLERY WORTH RS. 16,58,750/-, HENCE IT WAS TREATED AS UNEXPLAINED INVESTMENT U/S 69B OF THE I.T. ACT AND ADDED BACK T O THE TAXABLE INCOME. 27.2. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER B EFORE THE LD. CIT(A) AND FILED DETAILED SUBMISSION. THE L D. CIT(A) WAS SATISFIED WITH THE SUBMISSIONS OF THE ASSESSEE AND ACCORDINGLY HE DELETED THE ADDITION AFTER RECORDING THE FOLLOWING DETAILED FINDINGS: I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT, ORDER OF THE A.O. AND FACTS OF THE CASE CAREFULLY, IT IS NOTICED THAT DURING THE COURSE OF SEARCH JEWELLERY OF RS.31,29,480/- WAS FOUND OUT OF WHICH THE DIAMOND JEWELLERY OF RS. 16,58,750/- WAS SEIZED. THE A.O. HAS GIVEN OPPORTUNITY TO THE ASSESSEE TO EXPLAIN THE SOURCE OF JEWELLERY. THE APPELLANT HAS SUBMITTED THAT AS PER THE SEIZED DOCUMENTS, THE DIAMOND JEWELLERY OF RS. 31,50,000/- WAS MENTIONED AND PAYMENT OF RS. 10,00,000/- EACH WAS SHOWN AS MADE AND BALANCE OF RS. 11,50,000/- WAS PENDING. THE APPELLANT HAS ACCEPTED THE PAYMENT OF RS. 20 LAKHS AND ALSO TO AVOID LITIGATION THE DIAMOND JEWELLERY WORTH OF RS. 31,50,000/-WAS DECLARED U/S. 132(4) WHICH COVERS CHHAYA P. GANGAR 40 THE DIAMOND JEWELLERY WORTH OF RS. 16,58,750/- FOUND AND SEIZED DURING THE COURSE OF SEARCH. THIS AMOUNT WAS DULY DECLARED IN THE RETURN OF INCOME AND TAX WAS PAID ON IT. THIS EXPLANATION WAS SUBMITTED BEFORE THE A.O. WHICH WAS NOT ACCEPTED WITH THE ARGUMENT THAT ASSESSEE COULD NOT SUBMIT ITEM-WISE TALLY OF DIAMOND JEWELLERY WORTH OF RS. 16,58,750/- FOUND AND SEIZED DURING THE SEARCH OPERATION. I HAVE PERUSED THE SEIZED DOCUMENTS AND DECLARATION MADE BY THE APPELLANT U/S. 132(4) OF RS.31,50,000/- ON ACCOUNT OF DIAMOND JEWELLERY ON THE BASIS OF SEIZED DOCUMENTS. IT IS NOTICED THA T THE APPELLANT HAS DECLARED AN AMOUNT OF RS. 31,50,000/- ON ACCOUNT OF DIAMOND JEWELLERY MENTIONED ON THE SEIZED PAPER AND CLAIMED THAT THE DIAMOND JEWELLERY FOUND AND SEIZED DURING THE COURSE OF SEARCH AMOUNTING TO RS. 16,58,750/- WAS FULLY COVERED BY THE DECLARATION MADE OF RS. 31,50,000/-. SINCE THE APPELLANT HAS DECLARED RS. 31,50,000/- ON ACCOUNT OF DIAMOND JEWELLERY BASED ON THE SEIZED PAPERS AND TAKEN THE ARGUMENT THAT THE DIAMOND JEWELLERY FOUND AND SEIZED OF RS. 16,58,750/- IS FULLY COVERED BY THIS DISCLOSURE HAS TO BE ACCEPTED AS THERE WAS NO OTHER DIAMOND JEWELLERY FOUND AND SEIZED DURING THE COURSE OF SEARCH. THE ARGUMENT TAKEN BY THE A.O. THAT IT WAS NOT TALLIED ITEM-WISE CANNOT BE TREATED AS LOGICAL CONCLUSION BECAUSE DATE-WISE AND VALUATION WISE THE APPELLANT HAS DECLARED RS. 31,50,000/- ON ACCOUNT OF DIAMOND AND JEWELLERY OUT OF WHICH RS. 16,58,750/- WAS FOUND AND SEIZED. KEEPING IN VIEW THESE FACTS AND CIRCUMSTANCES, IT I S HELD THAT THE DIAMOND JEWELLERY OF RS.16,58,750/- I S COVERED BY THE DISCLOSURE MADE OF RS. 31,50,000/- U/S. 132(4). THEREFORE, THE ADDITION MADE ON THIS ACCOUNT IS NOT SUSTAINABLE, HENCE DELETED. GROUND O F APPEAL IS ALLOWED. CHHAYA P. GANGAR 41 27.3. WE HAVE CONSIDERED THE SUBMISSIONS MADE AND MATERI AL PLACED BEFORE US AND ALSO GONE THROUGH THE AFORESAI D FINDINGS OF LD. CIT(A). THE LD. CIT(A) HAS GIVEN DETAILED FI NDINGS ACCEPTING THE CLAIM OF THE ASSESSEE THAT THE IMPUGN ED INVESTMENT IN JEWELLERY IS COVERED UNDER THE OFFER MADE BY THE ASSESSEE U/S 132(4) OF RS. 31,50,000/- ON ACCOUNT O F DIAMOND JEWELLERY ON THE BASIS OF SEIZED DOCUMENTS. THE LD. CIT(A) HAS TAKEN HOLISTIC VIEW OF THE MATTER WHILE ACCEPTING T HE CLAIM OF THE ASSESSEE. BEFORE US NOTHING CONTRARY COULD BE B ROUGHT ON RECORD BY THE LD. CIT-DR, AND THE REASONS/FINDINGS GIVEN BY THE LD. CIT(A) COULD NOT BE CONTROVERTED. THEREFORE KEEPING IN VIEW ALL THE FACTS AND CIRCUMSTANCES OF THE CASE, W E FIND THAT THE ORDER OF LD. CIT(A) IS IN ACCORDANCE WITH LAW A ND FACTS, AND THEREFORE NO INTERFERENCE IS CALLED THEREIN, AND TH E SAME IS UPHELD. GROUND NOS. 2 & 3 OF REVENUES APPEAL ARE D ISMISSED. 24. AS A RESULT APPEAL OF THE REVENUES APPEAL IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH DECEMBER, 2015. SD/- (JOGINDER SINGH) SD/- (ASHWANI TANEJA) '# / JUDICIAL MEMBER $# / ACCOUNTANT MEMBER # $ MUMBAI; ( DATED ;18/12/2015 CTX? P.S/. .. CHHAYA P. GANGAR 42 %'&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. *+, / THE APPELLANT 2. -.+, / THE RESPONDENT. 3. / / # 0 ( * ) / THE CIT, MUMBAI. 4. / / # 0 / CIT(A)- , MUMBAI 5. 34 - , / *& 5 , # $ / DR, ITAT, MUMBAI 6. 6! 7$ / GUARD FILE. / BY ORDER, .3* - //TRUE COPY// / (DY./ASSTT. REGISTRAR) , # $ / ITAT, MUMBAI