Dev Bhoomi Apartments (AOP), Solan V. ACIT, Chandigarh

ITA 179/CHANDI/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8980 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-11-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 02-11-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 20-02-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: SUMIT GOY ALCAS
• Keywords: Unexplained expenditure; Depreciation; Income from undisclosed sources; Loose papers; Document seized; Additional evidence; Documents seized
• Section: 69C; 69; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS.ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NOS. 179 & 180/CHD/2014 & ITA NO. 584/CHD/2013 A.YS : 2006-07, 2007-08 & 2009-10 M/S DEV BHOOMI APARTMENTS(AOP), VS THE DCIT, KALKA SHIMLA ROAD, CIRCLE 6(1), DEONGHAT, MOHALI. DISTT. SOLAN (HP). PAN: AAAAD5685P (APPELLANT) (RESPONDENT) APPELLANT BY : S/SHRI RAJ KUMAR & SUMIT GOY AL,CAS RESPONDENT BY : SHRI SUSHIL KUMAR,CIT-DR DATE OF HEARING : 08.11.2016 DATE OF PRONOUNCEMENT : 11.11.2016 O R D E R PER BHAVNESH SAINI,JM ALL THE APPEALS BY THE SAME ASSESSEE ARE DIRECTED AGAINST DIFFERENT ORDERS OF LD. CIT(APPEALS), CENTR AL GURGAON 26.12.2013 FOR ASSESSMENT YEARS 2006-07 AND 2007-08 AND DATED 30.03.2013 FOR ASSESSMENT YEAR 2009-10. 2. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PARTIES, PERUSED THE FINDINGS OF AUTHORITIES BELOW AND CONSIDERED THE MATERIAL AVAILABLE ON RECORD. THE AP PEALS ARE DECIDED AS UNDER. 2 ASSESSMENT YEAR : 2006-07 3. ON GROUND NO. 1, ASSESSEE CHALLENGED THE ADDITIO N OF RS. 8,11,490/- UNDER SECTION 69C OF THE ACT AS UNEXPLAINED EXPENDITURE AND CHALLENGED THE ORDER OF LD. CIT(APPEALS) IN NOT ADMITTING THE ADDITIONAL EVIDEN CE UNDER RULE 46A OF THE IT RULES. 4. BRIEF FACTS ARE THAT SEARCH OPERATION UNDER SECT ION 132(1) OF THE INCOME TAX ACT WAS CARRIED OUT AT THE RESIDENTIAL/BUSINESS PREMISES OF SAHNI GROUP OF CAS ES INCLUDING THE ASSESSEE BY THE INVESTIGATION WING, CHANDIGARH ON 11.09.2009. THE COPIES OF THE SEIZED DOCUMENTS WERE PROVIDED TO THE ASSESSEE AND SAME WA S CONFIRMED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS. THE ASSESSING OFFICER REFERRED TO THE DOCUMENT A-3 (PAGE 21) (PARTY-B-4 IMPOUNDED FROM TH E BUSINESS PREMISES OF THE ASSESSEE) AND NOTED THAT T HESE DOCUMENTS ARE HAND WRITTEN PAGES AND CONTAIN THE DETAILS OF PAYMENT RECEIVED ON VARIOUS DATES. SCAN NED COPY OF THESE DOCUMENTS ARE REPRODUCED IN THE ASSESSMENT ORDER IN PARA 4. THE EXPENSES RECORDED ON THESE DOCUMENTS ARE AS FOLLOWS : I) RS. 7,65,695/- ON THE FRONT SIDE OF PAGE 21 FINANCIAL YEAR 2006-07 RELEVANT TO ASSESSMENT YEAR 2007-08) II) RS. 8,11,490/- ON BACK SIDE OF PAGE 21 FINANCIAL YEAR 2005-06 RELEVANT TO ASSESSMENT YEAR 2006-07) 3 5. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO FURNISH FOLLOWING INFORMATION : A) PLEASE FURNISH THE NAMES AND ADDRESS OF THE PERSONS FROM WHOM THE PAYMENT AS MENTIONED IN THE DOCUMENT SCANNED ABOVE, HAS BEEN RECEIVED. B) PLEASE MENTION THE NATURE OF RECEIPT AS WELL AS MODE OF RECEIPTS. C) PLEASE PRODUCE REGULAR BOOKS OF ACCOUNT TO RECONCILE THESE ENTRIES. 5(I) THE ASSESSEE IN HIS REPLY BEFORE ASSESSING OFF ICER SUBMITTED THAT THOUGH THE SEIZED PAPER HAVE NOT BEE N WRITTEN BY THE MEMBERS OR THE EMPLOYEES, HOWEVER, F ROM THE CONTENTS OF THE PAPERS, IT APPEARS THAT THE SAM E RELATE TO SOME FRUIT/VEGETABLE COMMISSION AGENT AS IN FEW CASES, TRADE MARK SUCH AS G.S.M., B.C.S., R.H.S ., J.P.B., B.L.S. ETC. HAVE BEEN MENTIONED BY THE WRIT ER OF THE DOCUMENT. THE ASSESSEE HAS NO CONCERN WITH THE DOCUMENT IN QUESTION. THE ASSESSING OFFICER CONSID ERED THE REPLY OF THE ASSESSEE AND NOTED THAT THE ASSESS EE HAS MERELY STATED THAT SAID DOCUMENT DID NOT BELONG TO HIM. THE ASSESSEE HAS NOT BROUGHT ANY MATERIAL ON RECORD IN SUPPORT OF THE CONTENTION. THE ASSESSEE WAS ASKED TO EXPLAIN WHY THE EXPENSES RECORDED ON THE S AID PAGE SHOULD NOT BE TREATED AS ITS UNEXPLAINED EXPENDITURE UNDER SECTION 69C OF THE ACT. NO EXPLANATION WAS FILED BY THE ASSESSEE. THE ASSESSI NG 4 OFFICER, THEREFORE, TREATED THE SAME TO BE UNEXPLAI NED EXPENDITURE UNDER SECTION 69C OF THE ACT AND MADE T HE ADDITION OF RS. 8,11,490/-. 6. THE ADDITION WAS CHALLENGED BEFORE LD. CIT(APPEALS). THE SUBMISSIONS OF THE ASSESSEE ARE REPRODUCED IN THE IMPUGNED ORDER IN WHICH ASSESSEE REITERATED THE SAME SUBMISSIONS AND ALSO SUBMITTED THAT THE SEIZED DOCUMENT DID NOT BELONG TO THE ASSE SSEE. THE ASSESSEE RELIED UPON DECISION OF ITAT CHANDIGAR H BENCH IN THE CASE OF JAGDAMBA RICE MILLS VS ACIT 67 TTJ 838 IN WHICH IT WAS HELD THAT, DOCUMENTS SEIZED DURING SEARCH NOT BEARING CLEAR AS TO WHETHER ITEMS WERE PAYMENTS OR RECEIPTS OR SOME OTHER CALCULATIONS, NO ADDITION COULD BE MADE ON THE BASIS OF SUCH DUMB DOCUMENTS. THE ASSESSEE ALSO EXPLAINED THAT THE PAPERS MAY RELATE TO SOME FRUIT/VEGETABLE COMMISSIO N AGENT. THE ASSESSEE FILED ADDITIONAL EVIDENCE UNDE R RULE 46A WHICH IS CERTIFICATE FROM SECRETARY OF AGRICULTURE MARKET PRODUCE COMMITTEE, SOLAN IN WHIC H IT HAS BEEN CERTIFIED THAT THE ABOVE TRADE MARKS AR E USED FOR IDENTIFICATION OF FIRMS IN THE SABJI MANDI MARKET. 7. THE LD. CIT(APPEALS), HOWEVER, DID NOT ACCEPT CONTENTION OF THE ASSESSEE. THE LD. CIT(APPEALS) N OTED THAT ASSESSEE HAS FAILED TO SATISFY THE CONDITIONS OF RULE 46A OF INCOME TAX RULES AND NO EVIDENCE HAVE BEEN 5 PRODUCED DESPITE GIVING OPPORTUNITY AT ASSESSMENT STAGE, THEREFORE, ADDITIONAL EVIDENCE WAS REJECTED. THE LD. CIT(APPEALS) ON MERIT ALSO CONFIRMED THE ADDITI ON. 8. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PARTIES. THE LD. COUNSEL FOR THE ASSESSEE REITERAT ED THE SUBMISSIONS MADE BEFORE AUTHORITIES BELOW AND SUBMITTED THAT ASSESSING OFFICER HAS CONSIDERED THE DETAILS CONTAINED IN THE SEIZED PAPER AS PAYMENTS RECEIVED ON VARIOUS DATES AND ALSO GIVEN NOTICE TO THE ASSESSEE CONSIDERING THE SAME TO BE THE PAYMENTS RECEIVED BY THE ASSESSEE. HOWEVER, HE HAS MADE ADDITION ON ACCOUNT OF UNEXPLAINED EXPENDITURE UNDE R SECTION 69C OF THE ACT, THEREFORE, ADDITION MAY BE DELETED. HE HAS SUBMITTED THAT LD. CIT(APPEALS) SH OULD HAVE ADMITTED THE ADDITIONAL EVIDENCE WHICH IS IN T HE FORM OF CERTIFICATE FROM AGRICULTURE PRODUCE MARKET COMMITTEE, SOLAN AND RELIED UPON DECISION OF HON'BL E SUPREME COURT IN THE CASE OF TEK RAM VS CIT 262 CTR 118 IN WHICH THE ASSESSEE HAVING FILED CERTAIN DOCUMENTS BEFORE SUPREME COURT FOR THE FIRST TIME WHICH ARE OF SOME RELEVANCE AND REQUIRED TO BE LOOK ED INTO BY THE HIGH COURT. THEREFORE, MATTER WAS REMA NDED TO THE HIGH COURT FOR FRESH DISPOSAL AFTER ACCEPTIN G THE DOCUMENTS FILED BY THE ASSESSEE. 8(I) ON THE OTHER HAND, LD. DR SUBMITTED THAT SEIZE D DOCUMENTS WERE SUPPLIED TO THE ASSESSEE WHICH HAVE 6 BEEN SCRUTINIZED BY THE ASSESSEE BUT NO EXPLANATION WAS FILED BEFORE THE AUTHORITIES BELOW. SECTION 292C W ILL APPLY AGAINST THE ASSESSEE. 9. AFTER CONSIDERING RIVAL SUBMISSIONS, WE ARE OF T HE VIEW ADDITION IS WHOLLY UNJUSTIFIED. THE ASSESSING OFFICER BY REFERRING TO ABOVE SEIZED DOCUMENT HAS MENTIONED THAT THESE DOCUMENTS ARE HAND WRITTEN PAG ES AND CONTAIN THE DETAILS OF PAYMENTS RECEIVED ON VAR IOUS DATES. THE ASSESSING OFFICER ISSUED SHOW CAUSE NOT ICE TO THE ASSESSEE TO EXPLAIN THE NAME AND ADDRESS OF THE PERSONS FROM WHOM THE PAYMENTS MENTIONED IN THE SEIZED DOCUMENT HAVE BEEN RECEIVED AND ALSO TO EXPL AIN NATURE OF RECEIPT AS WELL AS MODE OF RECEIPTS. THE ASSESSING OFFICER, THEREFORE, WAS OF THE VIEW THAT IT IS UNACCOUNTED MONEY RECEIVED BY THE ASSESSEE FROM THI RD PARTY, AS SUCH IT IS UNACCOUNTED INCOME OF THE ASSE SSEE. HOWEVER, THE ASSESSING OFFICER WHILE CONCLUDING THE ISSUE HAS CONSIDERED IT TO BE A CASE OF UNEXPLAINED EXPENDITURE INCURRED BY ASSESSEE UNDER SECTION 69C OF THE ACT. THE WHOLE FINDING OF THE ASSESSING OFFICER THUS, CLEARLY SHOWS THAT ASSESSING OFFICER HAS PASSED A CONTRADICTORY ORDER WITHOUT ANALYZING THE ISSUE IN PROPER PERSPECTIVE. THERE CANNOT BE UNACCOUNTED EXPENDITURE INCURRED BY THE ASSESSEE AS PER FINDING OF THE ASSESSING OFFICER BECAUSE ASSESSING OFFICER HAS GIVEN SHOW CAUSE NOTICE CONSIDERING THE CONTENTS OF SEIZED DOCUMENTS THAT ASSESSEE RECEIVED UNACCOUNTED 7 INCOME FROM THIRD PARTY. IT WOULD SHOW THAT ASSESS ING OFFICER WAS NOT AWARE OF THE CONTENTS OF THE DOCUME NT ITSELF WHETHER IT IS A RECEIPT OR PAYMENT BY ASSESS EE. ON THIS REASON ITSELF, THE ADDITION IS WHOLLY UNJUS TIFIED AND NO ADDITION CAN BE MADE ON THE BASIS OF SUCH A DUMB DOCUMENT. HOWEVER, WE ARE OF THE VIEW THAT ADDITIONAL EVIDENCE SUBMITTED BEFORE LD. CIT(APPEAL S) WAS RIGHTLY REJECTED BY THE LD. CIT(APPEALS). THE ASSESSEE HAS FAILED TO EXPLAIN AS TO HOW ITS CASE W OULD FALL WITHIN THE PARAMETERS OF RULE 46A OF THE IT RU LES BECAUSE ASSESSEE HAS FAILED TO PROVE THAT ASSESSING OFFICER HAS REFUSED TO ADMIT EVIDENCE WHICH SHOULD HAVE BEEN ADMITTED BY HIM OR THAT ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING DOCUMENTS BEFORE ASSESSING OFFICER. THE ASSESSING OFFICER HAS GIVEN AMPLE OPPORTUNITY TO THE ASSESSEE TO EXPLAIN THIS I SSUE BUT NO EVIDENCE WAS FILED BEFORE ASSESSING OFFICER AT ASSESSMENT STAGE. THE ASSESSEE ALSO FAILED TO EXPL AIN THE RELEVANCE OF THE ADDITIONAL EVIDENCE BECAUSE IN THE CERTIFICATE OF SECRETARY, AGRICULTURE MARKET PRODUC E COMMITTEE, SOLAN, IT IS NOWHERE CLARIFIED AS TO HOW THE CONTENTS OF THE SAME WERE RELEVANT TO THE MATTER IN ISSUE. IT MERELY EXPLAINS THE IDENTIFICATION OF FI RMS NAMES INSTEAD OF WRITING FULL NAME. SINCE ASSESSEE FAILED TO EXPLAIN AS TO HOW THE ADDITIONAL EVIDENCE WAS RELEVANT TO THE MATTER IN ISSUE, WE ARE OF THE VIEW LD. CIT(APPEALS) CORRECTLY REFUSED TO ADMIT THE SAME AT APPELLATE STAGE. HOWEVER, CONSIDERING THE TOTALITY OF THE 8 ABOVE FINDINGS, IT IS CLEAR THAT ADDITION IS WHOLLY UNJUSTIFIED IN THE MATTER. WE, THEREFORE, SET ASID E THE ORDERS OF AUTHORITIES BELOW AND DELETE THE ADDITION OF RS. 8,11,490/-. THIS GROUND OF APPEAL OF THE ASSES SEE TO THAT EXTENT IS ALLOWED. 10. ON GROUND NO. 2, ASSESSEE CHALLENGED THE ADDITI ON OF RS. 78,577/- UNDER SECTION 69C OF THE ACT AND AL SO CHALLENGED THE ORDER OF LD. CIT(APPEALS) IN NOT ADM ITTING ADDITIONAL EVIDENCE UNDER RULE 46A OF IT RULES. TH E ASSESSING OFFICER HAS REFERRED TO DOCUMENT A-2 ( PA GE 9 AND 12) (PARTYB-4 IMPOUNDED FROM THE BUSINESS PREMISES OF THE ASSESSEE). THE ASSESSING OFFICER N OTED THAT THE SEIZED DOCUMENTS ARE HAND WRITTEN PAGES AN D CONTAINED DETAILS OF CONSTRUCTION MATERIAL PURCHASE D ON 30.02.2006 AND 30.04.2006 AND PAYMENTS MADE BY THE ASSESSEE. THE SCANNED COPY REPRODUCED IN PARA 5 OF THE ASSESSMENT ORDER. THE ASSESSING OFFICER ASKED THE ASSESSEE TO FILE THE INFORMATION AS TO WHO HAS WRIT TEN THESE PAGES, TO WHICH CONCERN/PROJECTS THESE DOCUME NTS ARE RELATED, TO RECONCILE THE ENTRIES RECORDED IN T HESE DOCUMENTS WITH REGULAR BOOKS OF ACCOUNT AND FURNISH THE DETAILS OF CASH PAYMENT MADE BY HIM AS MENTIONE D IN THE SEIZED PAPERS ALONGWITH SOURCE. THE ASSESSE E IN ITS REPLY BEFORE ASSESSING OFFICER SUBMITTED THAT T HE SCRUTINY OF THE SEIZED PAPER SHOWS THAT SAME RELATE TO PURCHASE OF MATERIAL IN RESPECT OF FURNISHING OF SO ME HOUSE. THE PROJECTS OF THE ASSESSEE ARE STILL IN I NITIAL 9 STAGE AND NO ADDITIONAL CONSTRUCTION IS MADE. THE PAPERS HAVE BEEN MADE IN THE NAME OF MICKY, SOLAN A ND ASSESSEE HAS NO CONCERN IN RESPECT OF THAT PAPER. 10(I) THE ASSESSING OFFICER NOTED THAT ASSESSEE HAS DISOWNED THE DOCUMENT THOUGH THE DOCUMENTS HAVE BEEN FOUND FROM THE POSSESSION OF THE ASSESSEE. THE ASSESSING OFFICER REFERRED TO PROVISIONS OF SECTION 292C AND NOTED THAT SINCE SEIZED DOCUMENTS HAVE BEEN FOU ND FROM THE POSSESSION OF THE ASSESSEE AND THE SAID DOCUMENTS RELATE TO PURCHASE OF CONSTRUCTION MATERI AL WHICH ARE USED BY THE ASSESSEE IN ITS BUSINESS OF CONSTRUCTION, THEREFORE, MERE DISOWNING THE DOCUMEN T WOULD NOT ABSOLVE THE ASSESSEE FROM RESPONSIBILITY AND GAVE NOTICE TO THE ASSESSEE AS TO WHY THE SAME BE N OT CONSIDERED AS UNEXPLAINED EXPENDITURE UNDER SECTION 69C OF THE ACT. THE ASSESSEE, HOWEVER, DID NOT FIL E ANY REPLY. THE ASSESSING OFFICER TREATED THE SAME TO B E UNEXPLAINED EXPENDITURE AND MADE THE ADDITION OF RS . 78,577/-. 11. THE ADDITION WAS CHALLENGED BEFORE LD. CIT(APPEALS). THE ASSESSEE REITERATED SAME SUBMISS IONS BEFORE LD. CIT(APPEALS) AND SUBMITTED THAT SAME DOCUMENT DID NOT BELONG TO THE ASSESSEE. IT WAS AL SO SUBMITTED THAT NOW THE ASSESSEE COULD TRACE ONE SHR I JAVED AKHTAR TO WHOM THESE PURCHASES BELONG AND H AS 10 FILED HIS DETAILED AFFIDAVIT, COPY OF WHICH IS FILE D AT PAGE 5-6 OF THE PAPER BOOK IN WHICH HE HAS OWNED UP THE SEIZED PAPERS AND SUBMITTED THAT THESE DOCUMENTS WE RE INADVERTENTLY LEFT IN PREMISES OF THE ASSESSEE. TH E ASSESSEE REQUESTED THAT AFFIDAVIT OF SHRI JAVED AKH TAR MAY BE ADMITTED AS ADDITIONAL EVIDENCE. 12. THE LD. CIT(APPEALS) NOTED THAT THE SEIZED PAPE RS ARE HAND WRITTEN AND CONTAINED THE DETAILS OF CONSTRUCTION MATERIAL PURCHASED BUT NO REPLY HAVE B EEN FILED BEFORE ASSESSING OFFICER. AFFIDAVIT OF SHRI JAVED AKHTAR IS FILED WHO CLAIMS TO BE CONTRACTOR, HOWEVE R, NO INFORMATION OF MICKY OF SOLAN HAVE BEEN GIVEN. T HERE IS A CHANGE IN ADDRESS GIVEN IN THE AFFIDAVIT THERE FORE, SAME COULD NOT BE ADMITTED FOR LACK OF AUTHENTICITY . THE LD. CIT(APPEALS), ON MERIT ALSO CONFIRMED THE ADDITION. 13. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE AUTHORITIES BELOW. ON THE OTHER HAND, LD. DR SUBMITTED THAT AFFIDAVIT IS SELF SERVING AND CANNOT BE CONSIDERED AS ADDITIONAL EVIDENCE. 14. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE D O NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE OR DERS OF AUTHORITIES BELOW. IT IS NOT IN DISPUTE THAT SEIZE D PAPER WAS RECOVERED FROM POSSESSION OF THE ASSESSEE. THE ASSESSING OFFICER NOTED THAT THE SEIZED PAPER CONTA INS 11 THE DETAILS OF CONSTRUCTION MATERIAL PURCHASED WHIC H IS CONNECTED WITH THE BUSINESS ACTIVITY OF THE ASSESSE E. THE ASSESSEE DID NOT FILE ANY REPLY BEFORE ASSESSIN G OFFICER IN RESPONSE TO SHOW CAUSE NOTICE AS TO WHY THE SAME BE NOT TREATED AS UNEXPLAINED EXPENDITURE UNDE R SECTION 69C OF THE ACT. SECTION 292C OF THE ACT IS APPLICABLE IN THE CASE OF THE ASSESSEE. IT PROVIDES THAT, HERE ANY BOOKS OF ACCOUNT, OTHER DOCUMENTS, MONEY BULLION, JEWELLERY OR WOTHER VALUABLE ARTICLES OR T HINGS ARE OR IS FOUND IN POSSESSION OR CONTROL OF ANY PER SON IN THE COURSE OF SEARCH UNDER SECTION 132 OF INCOME TA X ACT, IT MAY, IN ANY PROCEEDING UNDER THIS ACT, BE PRESUMED THAT SUCH BOOKS OF ACCOUNT, OTHER DOCUMENT S, MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE S OR THINGS BELONG OR BELONGS TO SUCH PERSON, THE CONTEN TS OF SUCH BOOKS OF ACCOUNT AND OTHER DOCUMENTS ARE TRUE AND THAT THE SIGNATURE ON EVERY DOCUMENT TO BE IN H AND WRITING OF SUCH PARTICULAR PERSON. THE PRESUMPTIO N UNDER SECTION 292C IS, HOWEVER, REBUTTABLE. IT IS, THEREFORE, PROVED ON RECORD THAT WHEN SEIZED DOCUME NT WAS FOUND DURING THE COURSE OF SEARCH FROM POSSESSI ON OF THE ASSESSEE, THAT SEIZED DOCUMENT BELONG TO THE ASSESSEE AND THAT THE CONTENTS OF THE DOCUMENTS ARE TRUE AND ARE IN THE HAND WRITING OF THE ASSESSEE. THE ASSESSEE DID NOT FILE ANY EVIDENCE OR MATERIAL OR S PECIFIC EXPLANATION BEFORE ASSESSING OFFICER AT ASSESSMENT STAGE, THEREFORE, THE ASSESSEE FAILED TO REBUT THE PRESUMPTION UNDER SECTION 292C, AS SUCH THE SEIZED 12 DOCUMENTS ARE ADMISSIBLE IN EVIDENCE AGAINST THE ASSESSEE. THE ASSESSEE, FOR THE FIRST TIME HAS COM E UP WITH ANOTHER PLEA THAT THE SEIZED PAPER BELONG TO S HRI JAVED AKHTAR AND FILED HIS AFFIDAVIT DATED 13.02.20 13 BEFORE LD. CIT(APPEALS). HOWEVER, ASSESSEE FAILED TO EXPLAIN AS TO HOW HE REMAINED SILENT IN EXPLAINING THE ISSUE FROM THE DATE OF SEARCH I.E. 11.09.2009 TILL 13.02.2013. NO REASONS HAVE BEEN GIVEN AS TO WHY T HE AFFIDAVIT WAS NOT OBTAINED EARLIER AND HOW SUDDENLY SHRI JAVED AKHTAR HAS COME INTO THE PICTURE. HIS NAME W AS NEVER EXPLAINED BEFORE THE AUTHORITIES BELOW. THE ASSESSEE HAS NOT SATISFIED THE CONDITIONS OF RULE 4 6A OF THE IT RULES BEFORE LD. CIT(APPEALS). THE AFFIDAVI T OF SHRI JAVED AKHTAR IS THEREFORE, SELF SERVING AND CL EARLY AFTER THOUGHT. THE ASSESSEE HAS FAILED TO EXPLAIN AS TO WHY THE NAME OF SHRI JAVED AKHTAR WAS NEVER MENTION ED BEFORE AUTHORITIES BELOW. THE ASSESSEE HAS ALSO FA ILED TO PRODUCE PANCHNAMA BEFORE THE TRIBUNAL TO EXPLA IN THE PORTION OF PLACE OF RECOVERY OF THE SEIZED DOCU MENT FROM THE POSSESSION OF THE ASSESSEE. THE AFFIDAVIT OF SHRI JAVED AKHTAR IS MERELY AN AFTER THOUGHT EXPLANATION WHICH WAS NEVER EXPLAINED BY THE ASSESS EE BEFORE AUTHORITIES BELOW. THEREFORE, THE SAME WOUL D NOT BE RELEVANT TO THE MATTER IN ISSUE AND IS CLEARLY F ILED TO AVOID THE PAYMENTS OF LEGITIMATE TAXES. THE LD. CIT(APPEALS), THEREFORE, RIGHTLY REJECTED THE ADMIS SION OF THE AFFIDAVIT AT THE APPELLATE STAGE. 13 15. CONSIDERING THE ABOVE DISCUSSION IN THE LIGHT O F PROVISIONS OF SECTION 292C, IT IS CLEAR THAT ASSESS EE HAS MADE PURCHASES OF CONSTRUCTION MATERIAL WHICH BELON G TO THE BUSINESS OF THE ASSESSEE AND IN THE ABSENCE OF ANY PLAUSIBLE EXPLANATION, THE AUTHORITIES BELOW WE RE JUSTIFIED IN MAKING THE ADDITION UNDER SECTION 69C OF THE ACT. NO INFIRMITY HAVE BEEN POINTED OUT IN THE ORDERS OF AUTHORITIES BELOW. WE, THEREFORE, DO NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE ASSESSEE. SAME IS ACCORDINGLY, DISMISSED. 16. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ASSESSMENT YEAR : 2007-08 17. ON GROUND NO. 1, ASSESSEE CHALLENGED THE ADDITI ON OF RS. 7,65,695/- UNDER SECTION 69C OF THE ACT AND CHALLENGED THE ORDER OF LD. CIT(APPEALS) IN NOT ADM ITTING ADDITIONAL EVIDENCE UNDER RULE 46A OF IT RULES WHIC H IS CERTIFICATE OF THE SECRETARY OF AGRICULTURE PRODUCE MARKET COMMITTEE, SOLAN. THE LD. CIT(APPEALS) NOTE D THAT ISSUE IS SAME AS HAS BEEN CONSIDERED IN ASSESS MENT YEAR 2006-07 AND ACCORDINGLY, DISMISSED THIS GROUND OF APPEAL OF THE ASSESSEE. 18. LD. REPRESENTATIVES OF BOTH THE PARTIES SUBMITT ED THAT THIS GROUND IS SAME AS HAS BEEN CONSIDERED IN ASSESSMENT YEAR 2006-07 ON GROUND NO. 1 ON THE BASI S 14 OF SAME SEIZED DOCUMENT (A-3). FOLLOWING REASONS F OR DECISION IN ASSESSMENT YEAR 2006-07, WE SET ASIDE T HE ORDERS OF AUTHORITIES BELOW AND DELETE THE ADDITION OF RS. 7,65,695/-. HOWEVER, REJECTION OF ADDITIONAL EVIDENCE BY LD. CIT(APPEALS) IS CONFIRMED. THIS GR OUND IS PARTLY ALLOWED. 19. ON GROUND NO. 2, ASSESSEE CHALLENGED THE ADDITI ON OF RS. 16,240/- UNDER SECTION 69C OF THE ACT AND IN NOT ADMITTING ADDITIONAL EVIDENCE UNDER RULE 46A OF IT RULE. THE LD. CIT(APPEALS) FOUND THAT THIS ISSUE IS SAME AS HAS BEEN CONSIDERED IN ASSESSMENT YEAR 2006-07 AND ADDITIONAL EVIDENCE IS AFFIDAVIT OF SHRI JAVED AKHT AR. THE LD. CIT(APPEALS), ACCORDINGLY, DISMISSED THIS G ROUND OF APPEAL OF THE ASSESSEE. 19(I) LD. REPRESENTATIVES OF BOTH THE PARTIES SUBMI TTED THAT THIS GROUND IS SAME AS HAS BEEN CONSIDERED IN ASSESSMENT YEAR 2006-07 ON GROUND NO. 2 IN WHICH WE HAVE DISMISSED THE APPEAL OF THE ASSESSEE. FOLLOWI NG REASONS FOR DECISION FOR ASSESSMENT YEAR 2006-07, W E DISMISS THIS GROUND OF APPEAL OF THE ASSESSEE. 20. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ASSESSMENT YEAR : 2009-10 21. THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS GROUND NO. 1, SAME IS DISMISSED AS NOT PRESSED. 15 22. ON GROUND NO. 2, ASSESSEE CHALLENGED THE ADDITI ON OF RS. 3,26,390/- UNDER SECTION 69C OF THE ACT AND IN REFUSING TO ADMIT ADDITIONAL EVIDENCE UNDER RULE 46 A OF THE IT RULES. THE ASSESSING OFFICER REFERRED TO DOCUMENT A-3 (PAGE 29) ( PARTY B-4 IMPOUNDED FROM BUSINESS PREMISES OF THE ASSESSEE). THE ASSESSING OFFICER NOTED THAT THIS DOCUMENT IS HAND WRITTEN PA GE AND CONTAINED DETAILS OF PURCHASES OF RS. 3,26,390/ - MADE BY THE ASSESSEE AND FOR WHICH RS. 50,000/- WAS PAID IN CASH ON 05.11.2008 AND SUBSEQUENTLY RS. 2,76,390/- WAS ALSO PAID IN CASH. THE SAME IS REPRODUCED IN PARA 6 OF THE ASSESSMENT ORDER. THE ASSESSING OFFICER ASKED FOR THE INFORMATION FROM TH E ASSESSEE AS TO WHO HAS WRITTEN THIS PAGE, NATURE OF EXPENSES AND PURPOSE OF EXPENSES AND NAME AND ADDRESS OF PERSON TO WHOM PAYMENT IN CASH HAS BEEN MADE AND EXPLAIN THE SOURCE. THE ASSESSEE SUBMITTE D BEFORE ASSESSING OFFICER THAT THIS DOCUMENT DID NOT BELONG TO THE ASSESSEE AND FROM THE CONTENTS OF THE DOCUMENT, IT APPEARS THAT SAME RELATE TO PURCHASE O F DRY FRUITS AND OTHER ITEMS SUCH AS PRESS, INDUCTION COOKER ETC. THE SAME DID NOT BELONG TO THE ASSESSE E. THE ASSESSING OFFICER, HOWEVER, NOTED THAT ASSESSEE HAS MERELY DENIED THAT DOCUMENT DID NOT BELONG TO HIM B UT THE SAME CANNOT DISCHARGE HIS RESPONSIBILITY. THE ASSESSEE HAS NOT BROUGHT ANY MATERIAL ON RECORD TO EXPLAIN THE SEIZED DOCUMENT IN RESPONSE TO THE SHOW CAUSE NOTICE ISSUED FOR MAKING ADDITION UNDER SECTI ON 16 69 OF THE ACT. THE ASSESSEE DID NOT FILE ANY EXPLA NATION BEFORE ASSESSING OFFICER. THEREFORE, ADDITION WAS M ADE UNDER SECTION 69C OF THE ACT. 23. THE ASSESSEE REITERATED SAME SUBMISSIONS BEFORE LD. CIT(APPEALS) AND ALSO FILED AFFIDAVIT UNDER RUL E 46A OF THE ACT OF SHRI JOGINDER BEHAL, COPY OF WHICH IS FILED AT PAGE 7 OF PAPER BOOK IN WHICH HE OWNED THE CONTE NTS OF THE SEIZED DOCUMENT AND EXPLAINED THAT INADVERTE NTLY HE HAS LEFT THE SEIZED PAPER AT THE PREMISES OF THE ASSESSEE. THE LD. CIT(APPEALS), HOWEVER, DID NOT A CCEPT ADMISSION OF THE ADDITIONAL EVIDENCE AND EVEN ON ME RIT, CONFIRMED THE ADDITION. 24. LD. REPRESENTATIVES OF BOTH THE PARTIES SUBMITT ED THAT THIS ISSUE IS SAME AS HAVE BEEN CONSIDERED ON GROUND NO. 2 IN ASSESSMENT YEAR 2006-07 AND 2007-08 . FOLLOWING REASONS FOR DECISION ON GROUND NO. 2 IN ASSESSMENT YEAR 2006-07 AND 2007-08 (SUPRA), WE DISMISS THIS GROUND OF APPEAL OF THE ASSESSEE. 25. ON GROUND NO.3, ASSESSEE CHALLENGED THE ADDITIO N OF RS. 18,77,319/- ON ACCOUNT OF ESTIMATION OF NET PROFIT. BRIEFLY THE FACTS OF THE CASE ARE THAT ASS ESSING OFFICER NOTED NP CHART OF THE ASSESSEE FOR THE ASSESSMENT YEARS 2007-08 TO 2010-11 IN ASSESSMENT ORDER AND FOUND THAT THE NET PROFIT RATE OF THE ASS ESSEE FOR ASSESSMENT YEAR 2010-11 AND 2009-10 (AFTER EXCLUDING THE SURRENDER INCOME OF RS. 25 LACS) COME S TO 17 1.80% AND 1.60% RESPECTIVELY WHICH IS ON LOWER SIDE AS COMPARED TO NP RATES OF THE EARLIER YEARS. THE NP RATE FOR ASSESSMENT YEAR 2007-08 AND 2008-09 ARE 8.65% AND 3.14% RESPECTIVELY. THEREFORE, CLAIM OF THE ASSESSEE THAT HE HAS NOT CLAIMED ANY EXPENSES AGAIN ST THE SURRENDERED INCOME IS NOT CORRECT. THE ASSESSIN G OFFICER ASKED THE ASSESSEE AS TO WHY ITS NET PROFIT RESULT SHOULD NOT BE RE-CASTED BY REJECTING PROFIT & LOSS ACCOUNT TO THE EXTENT OF NET PROFIT RATIO. THE SUBMISSION OF THE ASSESSEE IS REPRODUCED IN THE ASSESSMENT ORDER IN WHICH THE ASSESSEE EXPLAINED TH AT IT HAS COMMENCED ITS COMMERCIAL ACTIVITIES DURING T HE FINANCIAL YEAR 2006-07 AND THE COMPARISON OF SALES AND NET PROFIT FOR FINANCIAL YEAR 2006-07 TO 2009-10 WA S EXPLAINED. IT WAS EXPLAINED THAT THE NET PROFIT RA TE FOR THE FINANCIAL YEAR 2006-07 IS 8.65%, FOR FINANCIAL YEAR 2007-08 IS 3.15%, FINANCIAL YEAR 2008-09 IS 1.67% A ND FOR THE FINANCIAL YEAR 2009-10, IT IS 1.80%. THE R EASONS FOR HIGH NET PROFIT RATIO IN THE FINANCIAL YEAR 200 6-07 WAS DUE TO THE FACT THAT THIS WAS THE INITIAL YEAR OF THE COMMERCIAL OPERATION AND THE FIXED EXPENSES SUCH AS STAFF SALARY OF THE ASSESSEE QUITE LOW AND NO DEPRECIATION HAS BEEN CLAIMED BY THE ASSESSEE ON FI XED ASSETS. IT WAS ALSO EXPLAINED THAT THE MAIN REASON FOR LOW NET PROFIT PERCENTAGE IN FINANCIAL YEAR 2008-09 AND 2009-10 AS COMPARED TO EARLIER YEARS WAS DUE TO THE FACT THAT ASSESSEE HAS NOT CLAIMED ANY DEPRECIATION ON FIXED ASSETS IN FINANCIAL YEAR 2006-07 AND 2007-08. THE 18 ASSESSEE HAS CLAIMED DEPRECIATION TO THE TUNE OF RS . 4,92,375/- DURING FINANCIAL YEAR 2008-09 AND RS. 3,35,188/- DURING FINANCIAL YEAR 2009-10. THIS HAS RESULTED IN LESS NET PROFIT RATE IN FINANCIAL YEAR 2008-09 AND 2009-10. IN THE ABSENCE OF DEPRECIATION IN FINANCIAL YEAR 2008-09 AND 2009-10, THE NET PROFIT RATIO WOULD HAVE BEEN 2.78% AND 4.85% RESPECTIVELY WHICH IS ALMOST SAME AS IN EARLIER YEARS. 25(I) IT WAS FURTHER SUBMITTED THAT LATER ON PROJ ECTS OF THE ASSESSEE WERE AT PARTIAL COMPLETION STAGE AND S ALES HAVE BEEN BOOKED AND THE FIXED EXPENSES SUCH AS STA FF SALARY, ELECTRICITY EXPENSES ETC. CANNOT BE AVOIDED AS THEY OCCUR THROUGH OUT THE YEAR. THEREFORE, NET PR OFIT SHOWN BY THE ASSESSEE IS CORRECT. THE ASSESSING OFF ICER, HOWEVER, DID NOT ACCEPT EXPLANATION OF THE ASSESSEE AND NOTED THAT NP RATE REMAINED HIGH IN EARLIER YEAR IS NOT ACCEPTABLE AND BY REJECTING THE PROFIT & LOSS ACCOU NT, RECASTED THE PROFIT AND BY APPLYING AVERAGE NET PRO FIT RATE OF TWO YEARS, MADE ABOVE ADDITION OF RS. 18,77,319/-. 26. THE LD. CIT(APPEALS) ALSO CONFIRMED THE ADDITI ON AND DISMISSED THIS GROUND OF APPEAL OF THE ASSESSEE . 27. AFTER CONSIDERING RIVAL SUBMISSIONS, WE ARE OF THE VIEW ADDITION IS WHOLLY UNJUSTIFIED. THE LD. COUNS EL FOR THE ASSESSEE CONTENDED THAT ASSESSING OFFICER HAS N OT REJECTED THE BOOKS OF ACCOUNT AND NO SPECIFIC DEFEC TS IN 19 MAINTENANCE OF THE BOOKS OF ACCOUNT HAVE BEEN FOUND . HE HAS, HOWEVER, ADMITTED THAT DURING THE COURSE OF SEARCH, ASSESSEE SURRENDERED RS. 25 LACS IN ASSESSM ENT YEAR UNDER APPEAL. IT WOULD SHOW THAT THE BOOK RES ULTS DECLARED BY THE ASSESSEE WERE NOT CORRECT, OTHERWIS E, THERE WAS NO REASON FOR THE ASSESSEE TO HAVE DECLARE/SURRENDER THE ADDITIONAL INCOME OF RS. 25 L ACS. HOWEVER, ASSESSING OFFICER MERELY ON COMPARISON OF THE NP RATE OF ASSESSEE FROM EARLIER YEARS, MADE ADDITI ON BY REJECTING THE PROFIT & LOSS ACCOUNT TO THAT EXTENT. THE ASSESSING OFFICER HAS NOT INVESTIGATED AND ENQUIRED INTO THE EXPLANATION OF THE ASSESSEE GIVEN AT ASSESSMENT STAGE THAT THERE WAS HIGHER EXPENSES CLAIMED IN ASSESSMENT YEAR UNDER APPEAL AS COMPARED TO EARLIER YEARS. NO OTHER REASONS HAVE BEEN GIVEN BY THE ASSESSING OFFICER FOR RE-CASTING THE PROFIT DECLARE D BY THE ASSESSEE. 28. HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS K.S.BHATIA 269 ITR 577 HELD THAT, MERE FACT THAT THE PROFITS WERE LOW COMPARED TO THE EARLIER Y EARS WAS NOT A CIRCUMSTANCE OR MATERIAL WHICH COULD JUST IFY AN ESTIMATE IN THE CIRCUMSTANCES OF THE CASE. AS NOTED ABOVE, SINCE THE ASSESSEE HAS ALREADY SURRENDERED ADDITIONAL INCOME OF RS. 25 LACS IN ASSESSMENT YEAR UNDER APPEAL AND NO OTHER REASONS HAVE BEEN GIVEN B Y THE ASSESSING OFFICER FOR ESTIMATING HIGHER PROFIT RATE. THEREFORE, MERE LOW NP RATE SHOWN IN ASSESSMENT YEA R 20 UNDER APPEAL BY ITSELF IS NO GROUND TO MAKE ADDITIO N OF THIS NATURE AGAINST THE ASSESSEE. WE, THEREFORE, D O NOT JUSTIFY THE ORDERS OF AUTHORITIES BELOW IN MAKING A ND UPHOLDING THIS ADDITION. WE, ACCORDINGLY, SET ASID E THE ORDERS OF AUTHORITIES BELOW AND DELETE THE ADDITION OF RS. 18,77,319/-. THIS GROUND OF APPEAL OF THE ASSE SSEE IS ALLOWED. 29. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 30. IN THE RESULT, ALL APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- ( ANNAPURNA GUPTA) (BHAVNESH SAINI ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 11 TH NOVEMBER,2016. POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT,DR ASSISTANT REGISTRAR, ITAT/CHD