Shri.H.J.Siwani, Bangalore V. Deputy Commissioner of Income Tax, Bangalore

ITA 1937/BANG/2016

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 3938 (ITAT-BANGALORE)
• Duration Of Justice: 3 year(s) 11 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 06-08-2020
• Assessment Year: 2010-2011
• Appeal Filed On: 16-11-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MUZAFFAR HUSSAIN
• Assessee Lawyers: V CHANDRASEKHAR
• Keywords: Search and seizure; Opportunity of being heard; Principle of natural justice; Reason to believe; Set aside
• Section: 271(1)(c); 143(3); 153A; 13; 22; 153C; 132

Judgement Text

ITA NOS.1928 TO 1939/BANG/2016 & ITA NOS.511&512/BA NG/2017 SHRI M.J. SIWANI & SHRI H.J. SIWANI, BANGALORE IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: BANGALORE BEFORE SHRI B. R. BASKARAN, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NOS.1928 TO 1933/BANG/2016 & ITA NO.511/BANG/2017 ASSESSMENT YEARS: 2006-07 & 2008-09 TO 2013-14 RESPECTIVELY SHRI M.J. SIWANI H.M. GENEVA HOUSE NO.14, CUNNINGHAM ROAD BANGALORE-560 052 PAN NO : AHWPS5879E VS. DEPUTY COMMISSIONER OF INCOME-TAX CENTRAL RANGE-1(4) BANGALORE APPELLANT RESPONDENT ITA NOS.1934 TO 1939/BANG/2016 & ITA NO.512/BANG/2017 ASSESSMENT YEARS: 2006-07 & 2008-09 TO 2013-14 RESPECTIVELY SHRI H.J. SIWANI H.M. GENEVA HOUSE NO.14, CUNNINGHAM ROAD BANGALORE-560 052 PAN NO : AHWPS5878F VS. DEPUTY COMMISSIONER OF INCOME-TAX CENTRAL RANGE-1(4) BANGALORE APPELLANT RESPONDENT APPELLANT BY : SHRI V. CHANDRA SEKHAR, A.R. RESPONDENT BY : SHRI MUZAFFAR HUSSAIN, D.R. DATE OF HEARING : 06.08.2020 DATE OF PRONOUNCEMENT : 26.10.2020 ITA NOS.1928 TO 1939/BANG/2016 & ITA NOS.511&512/BA NG/2017 SHRI M.J. SIWANI & SHRI H.J. SIWANI, BANGALORE PAGE 2 OF 29 O R D E R PER B.R. BASKARAN, ACCOUNTANT MEMBER: ALL THE APPEALS FILED BY THE ASSESSEES HEREIN ARE DIRECTED AGAINST THE ORDERS PASSED BY LD CIT(A)-11, BANGALOR E IN THEIR RESPECTIVE HANDS AND THEY RELATE TO THE ASSESSMENT YEARS 2006-07 AND 2008-09 TO 2013-14. SINCE COMMON ISSUES ARE UR GED IN ALL THESE APPEALS OF BOTH THE ASSESSEES, THEY WERE HEARD TOGE THER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER, FOR THE SAKE OF C ONVENIENCE. 2. THE FACTS RELATING TO THE ASSESSEES AND IMPU GNED ASSESSMENTS ARE STATED IN BRIEF. SHRI H J SIWANI AND SHRI M.J SIWANI ARE BROTHERS. THEY ARE PARTNERS OF A FIRM NAMED M/S H.M. CONSTRUC TIONS, WHICH IS ENGAGED IN THE BUSINESS OF CONSTRUCTION OF RESIDENT IAL AND COMMERCIAL COMPLEXES. THE REVENUE CARRIED OUT SEARC H AND SEIZURE OPERATIONS U/S 132 OF THE INCOME-TAX ACT,1961 ['THE ACT' FOR SHORT] IN THE GROUP OF M/S H M CONSTRUCTIONS ON 30-06-2011. CONSEQUENTLY, THE ASSESSMENTS FOR ASSESSMENT YEARS 2006-07, 2008- 09 TO 2011-12 WERE COMPLETED U/S 153A R.W.S 143(3) OF THE ACT. T HE ASSESSMENTS OF THE ASSESSMENT YEARS 2012-13 AND 2013-14 WERE CO MPLETED U/S 143(3) OF THE ACT. 3. THE GROUNDS URGED BY BOTH THE ASSESSEES AR E IDENTICAL IN NATURE. IN ASSESSMENT YEARS 2006-07, 2008-09 TO 20 11-12, THE ASSESSEES HAVE RAISED CERTAIN LEGAL ISSUES CHALLENG ING THE VALIDITY OF SEARCH ACTION AND ALSO THE VALIDITY OF NOTICE ISSUE D TO THEM U/S 153A OF THE ACT. 4. WITH REGARD TO THE VALIDITY OF SEARCH PROCE EDINGS, THE LD CIT(A) HAS HELD THAT HE DOES NOT HAVE JURISDICTION TO EXAMINE THE SAID ISSUE. ACCORDINGLY, HE HAS REJECTED THE GROUNDS RA ISED BEFORE IN THIS REGARD. ITA NOS.1928 TO 1939/BANG/2016 & ITA NOS.511&512/BA NG/2017 SHRI M.J. SIWANI & SHRI H.J. SIWANI, BANGALORE PAGE 3 OF 29 5. THE LD A.R, HOWEVER, RAISED A NEW PLEA BEFOR E US. HE SUBMITTED THAT THE VARIOUS ADDITIONS MADE BY THE AO ARE BASED ON THE MATERIALS SEIZED FROM THE PREMISES OF M/S H M CONSTRUCTIONS A ND FROM THE PREMISES OF THE ASSESSEES HEREIN. ACCORDINGLY, HE SUBMITTED THAT THE AO SHOULD HAVE INITIATED PROCEEDINGS U/S 153C OF TH E ACT. HE SUBMITTED THAT THE PROVISIONS OF SEC.153A AND 153C OPERATE ON DIFFERENT PERSONS, WHICH HAVE BEEN EXPLAINED BY HON BLE JURISDICTIONAL KARNATAKA HIGH COURT IN THE CASE OF IBC KNOWLEDGE PARK (385 ITR 346)(KAR) AT PARAGRAPH 49 OF ITS ORDE R, WHICH READS AS UNDER:- 49. ON A CONJOINT READING OF THE AFORESAID PROVIS IONS, IT BECOMES CLEAR THAT A SEARCH CAN TAKE PLACE ONLY WHE N A CONCERNED OFFICER HAS INFORMATION AND REASON TO BELIEVE THAT ANY PERSON IS IN POSSESSION OF ANY VALUABLE ASSETS, WHICH HAS NOT BE EN OR WOULD NOT BE DISCLOSED UNDER THE ACT. IN SUCH A CASE, A S EARCH CAN TAKE PLACE. FOLLOWING THE SEARCH, IF ANY BOOKS OF ACCOUN T, OTHER DOCUMENTS, ANY VALUABLE ASSETS IS OR ARE FOUND IN T HE POSSESSION OR CONTROL OF ANY PERSON IN THE COURSE OF A SEARCH, THEN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR VALUABLE ASSETS CO ULD BE SEIZED. UNDER SECTION 153A, THE SATISFACTION REGARDING AN I NFERENCE OF LIABILITY MUST BE RECORDED. THE ASSESSING OFFICER H AS TO ISSUE NOTICE TO THE ASSESSEE I.E., THE PERSON SEARCHED FO R THE PURPOSE OF ASSESSMENT OR REASSESSMENT OF THE TOTAL INCOME OF S IX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR REL EVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED. SE CTION 153C AS ALREADY NOTED, DEALS WITH ASSESSMENT OF INCOME OF A NY OTHER PERSON, WHEN THE ASSESSING OFFICER IS SATISFIED THA T THE BOOKS OF ACCOUNT OR DOCUMENTS OR VALUABLE ASSETS SEIZED OR R EQUISITIONED HAVE A BEARING ON THE DETERMINATION OF THE TOTAL IN COME OF SUCH OTHER PERSON FOR THE RELEVANT ASSESSMENT YEAR OR YE ARS REFERRED TO UNDER SUB-SECTION(1) OF SECTION 153A OF THE ACT. IN SUCH A CASE, THE ASSESSING OFFICER HAS TO ISSUE NOTICE TO ASSESS OR REASSESS INCOME OF OTHER PERSON UNDER SECTION 153A OF THE AC T. THUS, THE FACT THAT SEARCH HAS BEEN CONDUCTED WOULD NOT JUSTI FY ISSUANCE OF NOTICE UNDER SECTION 153A. IF IT IS ONLY DURING A V ALID SEARCH WHEN CERTAIN INCRIMINATING MATERIALS ARE DETECTED, NOTIC E COULD BE ISSUED. ITA NOS.1928 TO 1939/BANG/2016 & ITA NOS.511&512/BA NG/2017 SHRI M.J. SIWANI & SHRI H.J. SIWANI, BANGALORE PAGE 4 OF 29 THE LD A.R SUBMITTED THAT THE AO DID NOT TAKE ACTIO N U/S 153C OF THE ACT AND HENCE THE ENTIRE ASSESSMENT ORDERS ARE VITIATED. ACCORDINGLY, HE CONTENDED THAT THE IMPUGNED ASSESSM ENT ORDERS FOR AY 2006-07 AND 2008-09 TO 2011-12 SHOULD BE QUASHED . 6. ON THE CONTRARY, THE LD D.R SUBMITTED THAT THE ASSESSEES HAVE ALSO BEEN SUBJECTED TO SEARCH OPERATIONS ALONG WITH THE PREMISES OF M/S H M CONSTRUCTIONS, WHICH IS THE BUSINESS PREMIS ES OF THE ASSESSEES ALSO. ACCORDINGLY, HE SUBMITTED THAT THE QUESTION OF INVOKING PROVISIONS OF SEC.153C OF THE ACT SEPARATE LY DOES NOT ARISE. HE SUBMITTED THAT THE PROCEEDINGS U/S 153A OF THE A CT HAVE BEEN VALIDLY INITIATED IN THE HANDS OF THE ASSESSEES AND ACCORDINGLY, THE AO HAS TO DETERMINE THE TOTAL INCOME OF THE ASSES SEE BY CONSIDERING ALL THE MATERIALS AVAILABLE WITH HIM, AS HELD BY HO NBLE KARNATAKA HIGH COURT IN THE CASE OF CANARA HOUSING DEVELOPMEN T COMPANY (62 TAXMANN.COM 250). 7. WE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORD. FROM THE ASSESSMENT ORDERS, WE NOTICE THAT THE REVENUE HAS C ARRIED OUT SEARCH AND SEIZURE OPERATIONS IN THE HANDS OF M/S H.M. CON STRUCTIONS AND IN THE HANDS OF THE ASSESSEES HEREIN. WE HAVE EARL IER NOTICED THAT BOTH THE ASSESSEES HEREIN ARE PARTNERS OF M/S H M C ONSTRUCTIONS. IT WAS ALSO NOT SHOWN TO US THAT THE ASSESSEES HEREIN HAVE DIFFERENT BUSINESS PREMISES DISTINCT AND SEPARATE FROM THE PR EMISES OF M/S H M CONSTRUCTIONS. HENCE IT CANNOT BE CONCLUSIVELY S AID THAT THE INCRIMINATING DOCUMENTS WERE SEIZED FROM A PERSON O THER THAN THE ASSESSEES HEREIN. THE DETAILS OF SEIZED RECORD ARE GIVEN IN THE TABLE AVAILABLE IN PAGE NO.2 OF THE ASSESSMENT ORDER. A PERUSAL OF THE SAME WOULD SHOW THAT ONE SEIZED RECORD IS NUMBERED AS A- 1/HM/1 AND THE REMAINING RECORDS ARE NUMBERED AS M J SHIVANI/S CANNED FILES 1/DOC. IT IS A KNOWN FACT THAT THE NUMBERING OF SEI ZED DOCUMENTS IS DONE BY SEARCH OFFICIALS IN ORDER TO IDENTIFY THE S EIZED MATERIALS. ITA NOS.1928 TO 1939/BANG/2016 & ITA NOS.511&512/BA NG/2017 SHRI M.J. SIWANI & SHRI H.J. SIWANI, BANGALORE PAGE 5 OF 29 HENCE MERELY BECAUSE THE SEIZED RECORD HAS BEEN NUM BERED AS HM DOES NOT NECESSARILY MEAN THAT THE SAME WAS SEIZED FROM A DIFFERENT PERSON. THOUGH THE ASSESSEE HAS RAISED THIS LEGAL PLEA, NO DOCUMENT WAS PRODUCED TO SUBSTANTIATE THIS CLAIM. ACCORDING LY, FOR THE REASONS DISCUSSED ABOVE, WE DO NOT FIND ANY MERIT I N THE LEGAL CONTENTIONS RAISED BY THE ASSESSEE. ACCORDINGLY, W E REJECT THE SAME. 8. THE NEXT LEGAL ISSUE CONTESTED BY THE ASSESS EE IS THE ASSESSING OFFICER HAS ISSUED NOTICE U/S 153A OF THE ACT, WHER EIN THE EXPRESSION ASSESSEE/REASSESS IS MENTIONED. HE SUBMITTED THA T THE QUESTION OF REASSESSMENT WOULD ARISE ONLY IF THE TOTAL INCOM E OF THAT YEAR HAS ALREADY BEEN ASSESSED EARLIER. ACCORDINGLY HE SUBM ITTED THAT THE ASSESSING OFFICER SHOULD CLEARLY SPECIFY IN THE NOT ICE ISSUED U/S 153A OF THE ACT AS TO WHETHER THE INCOME OF PARTICULAR A SSESSMENT YEAR IS PROPOSED TO BE ASSESSED OR REASSESSED, I.E., HE SHOULD STRIKE OFF INAPPLICABLE PORTION IN THE NOTICE. NON-STRIKING O F THE INAPPLICABLE PORTION WILL SHOW THAT THE ASSESSING OFFICER HAS NO T APPLIED HIS MIND AND HENCE THE ASSESSMENT ORDER IS LIABLE TO BE QUAS HED. IN THIS REGARD, THE LD A.R PLACED HIS RELIANCE ON THE DECIS ION RENDERED BY HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. MANJUNATHA COTTON & GINNING FACTORY (359 ITR 565). 9. THE LD D.R, ON THE CONTRARY, SUBMITTED THAT THE PROVISIONS OF SEC.153A ITSELF USES THE EXPRESSION ASSESS/REASSES S, SINCE THE ASSESSMENT OF SIX ASSESSMENT YEARS ARE RE-OPENED AS PER THE PROVISIONS OF SEC.153A OF THE ACT. IF THE ASSESS MENT OF A PARTICULAR YEAR HAS NOT BEEN COMPLETED EARLIER, THEN THE QUEST ION OF REASSESSMENT DOES NOT ARISE. HOWEVER, IF THE ASSES SMENT OF A PARTICULAR HAS ALREADY BEEN COMPLETED, THEN THE ASS ESSMENT IS DONE SECOND TIME, IT WOULD FALL UNDER THE CATEGORY OF R EASSESSMENT. HENCE THE QUESTION OF APPLICATION OF MIND WOULD NOT ARISE ON THIS MATTER. HE SUBMITTED THAT THE DECISION IN THE CASE OF MANJUNATHA ITA NOS.1928 TO 1939/BANG/2016 & ITA NOS.511&512/BA NG/2017 SHRI M.J. SIWANI & SHRI H.J. SIWANI, BANGALORE PAGE 6 OF 29 COTTON & GINNING FACTORY (SUPRA) HAS BEEN RENDERED IN THE CONTEXT OF SEC.271(1)(C) OF THE ACT AND FURTHER THE CHARGE REFERRED IN SEC.271(1)(C) ARE TWO DIFFERENT CHARGES. ACCORDING LY THE HIGH COURT HELD THAT THE AO SHOULD MAKE IT CLEAR IN THE NOTICE THAT HE SHOULD SPECIFY THE PARTICULAR CHARGE FOR WHICH THE PENALTY PROCEEDINGS WERE INITIATED BY HIM. THE LD D.R, ACCORDINGLY, SUBMITT ED THAT THE ASSESSEE CANNOT TAKE SUPPORT OF THE ABOVE SAID DECI SION. 10. WE HEARD THE PARTIES ON THIS ISSUE AND PERU SED THE RECORD. WE FIND MERIT IN THE CONTENTIONS OF THE LD D.R. THE P ROVISIONS OF SEC.153A OF THE ACT STATES THAT THE ASSESSMENT OF S IX ASSESSMENT YEARS PRECEDING THE YEAR OF SEARCH WOULD GET REOPEN ED. OUT OF THE SIX ASSESSMENT YEARS, ASSESSMENT OF SOME OF THE YEA RS WOULD HAVE BEEN COMPLETED, WHILE SOME OF THE YEARS MIGHT NOT. HENCE THE PROVISIONS OF SEC.153A USES THE EXPRESSION ASSESS/ REASSESS AND THE VERY SAME EXPRESSION HAS BEEN USED IN THE NOTICE IS SUED U/S 153A OF THE ACT. IN BOTH THE CASES, THE TOTAL INCOME SH ALL BE DETERMINED BY THE ASSESSING OFFICER. HENCE THE ASSESSEE WOULD BE KNOWING THAT THE ASSESSMENT OF A PARTICULAR YEAR IS A CASE OF NE W ASSESSMENT OR REASSESSMENT, AS IT DEPENDS UPON FACTS OF EACH ASSE SSMENT YEAR. 11. THE FACTS AVAILABLE IN MANJUNATHA COTTON & GINNING FACTORY (SUPRA) ARE DIFFERENT. IT RELATED TO THE PENALTY L EVIED U/S 271(1)(C) OF THE ACT. PENALTY U/S 271(1)(C) OF THE ACT MAY BE L EVIED EITHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FOR FURN ISHING OF INACCURATE PARTICULARS OF INCOME. SINCE TWO DISTI NCT CHARGES ARE SPECIFIED IN THE PROVISIONS OF SEC.271(1)(C) OF THE ACT, THE HONBLE JURISDICTIONAL KARNATAKA HIGH COURT HELD THAT AO SH OULD CLEARLY SPECIFY THE CHARGE UNDER WHICH THE PENALTY PROCEEDI NGS WERE INITIATED. IN THE NOTICE ISSUED FOR INITIATING PEN ALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT, THE AO SHOULD CLEARLY SPECIFY THE CHARGE. IF BOTH THE CHARGES ARE MENTIONED IN THE NOTICE, THE AO SHO ULD STRIKE OFF ITA NOS.1928 TO 1939/BANG/2016 & ITA NOS.511&512/BA NG/2017 SHRI M.J. SIWANI & SHRI H.J. SIWANI, BANGALORE PAGE 7 OF 29 INAPPLICABLE PORTION. OTHERWISE, IT IS QUITE POSSI BLE THAT THE ASSESSEE DOES NOT KNOW THE CHARGE UNDER WHICH THE PENALTY PR OCEEDINGS WERE INITIATED. ACCORDINGLY, IT WAS HELD THAT NON-STRIK ING OF INAPPLICABLE PORTION WOULD RESULT IN NON-APPLICATION OF MIND BY THE AO AND SINCE IT GOES TO THE ROOT OF THE MATTER, THE PENALTY PROC EEDINGS WOULD GET VITIATED. IN OUR VIEW, THE ASSESSEE CANNOT TAKE S UPPORT OF THIS DECISION AND HENCE THE CONTENTION OF THE ASSESSEE T HAT NON-STRIKING OF INAPPLICABLE PORTION IN THE EXPRESSION ASSESS/R EASSESS WOULD VITIATE THE ASSESSMENT PROCEEDINGS IS LIABLE TO BE REJECTED, AS IT DOES NOT GO TO THE ROOT OF THE MATTER. 12. WE SHALL NOW TAKE UP THE GROUNDS URGED ON ME RITS. WE SHALL FIRST TAKE UP THE APPEALS FILED BY BOTH THE ASSESSE ES IN AY 2006-07. IDENTICAL ADDITIONS HAVE BEEN MADE IN THE HANDS OF BOTH THE PARTIES AND THEY ARE:- (A) ADDITION RELATING TO VITSANDRA (DAS FLOWERS) P ROPERTY RS.5,00,000/- (B) ADDITION RELATING TO RAMAGONDANHALLI PROPERTY RS.11,80,625/- (C) ADDITION RELATING TO WHILE FIELD LAND RS.3, 00,000/-. THE ABOVE SAID ADDITIONS REPRESENT 50% OF THE UNDIS CLOSED AMOUNT. THE VERY SAME AMOUNTS HAVE BEEN ASSESSED IN THE HAN DS OF BOTH THE ASSESSEES, AS THEY HAVE JOINTLY ENTERED INTO ABOVE SAID TRANSACTIONS. 12.1 THE FIRST ISSUE RELATES TO THE ADDITION OF RS.5.00 LAKHS MADE IN RESPECT OF VITSANDRA (DAS FLOWERS) PROPERTY. 12.2 THE FACTS RELATING TO THIS ADDITION ARE S TATED IN BRIEF. DURING THE COURSE OF SEARCH PROCEEDINGS, AN AGREEMENT DATE D 8 TH SEPTEMBER, 2005 WAS SEIZED. THE ASSESSEES HEREIN ALONG WITH TWO OTHER PERSONS NAMED MR. NASEER AHMED AND MR. AMAN JANARDHAN AGARW AL (HEREINAFTER CALLED BUYERS) HAD ENTERED INTO AN A GREEMENT WITH MR. ITA NOS.1928 TO 1939/BANG/2016 & ITA NOS.511&512/BA NG/2017 SHRI M.J. SIWANI & SHRI H.J. SIWANI, BANGALORE PAGE 8 OF 29 R. DEVASHRITHA & OTHERS (HEREINAFTER CALLED SELLER S). AS PER THE AGREEMENT, A SUM OF RS.40.00 LAKHS WAS RECEIVED BY THE SELLERS FROM THE BUYERS. THE ABOVE SAID SUM WAS PAID BY WAY OF CASH OF RS.20.00 LAKHS AND CHEQUE OF RS.20.00 LAKHS. THE SHARE OF E ACH OF THE ASSESSEES HEREIN IN THE ABOVE SAID TRANSACTION WAS 25% AND HENCE THE AO ASSESSED 25% OF RS.40.00 LAKHS, I.E., RS.10. 00 LAKHS EACH IN THE HANDS OF SHRI M J SIWANI AND H J SIWANI. THE L D CIT(A) RESTRICTED THE ADDITION TO RS.5.00 LAKHS, SINCE THE AMOUNT PAID BY WAY OF CASH WAS ONLY RS.20.00 LAKHS AND 25% OF THE SAME WORKS OUT TO RS.5.00 LAKHS. 12.3 THE LD A.R SUBMITTED THAT THE ABOVE SAID AG REEMENT WAS ENTERED ON 8 TH SEPTEMBER, 2005 IN RESPECT OF A PROPERTY LOCATED A T VITSANDARA (DAS FLOWERS). HE SUBMITTED THAT THE CO NVEYANCE DEED HAS ALREADY BEEN REGISTERED IN FAVOUR OF THE BUYERS ON 22.08.2005 AND 6.9.2005. THE ABOVE SAID AGREEMENT WAS ENTERED TO MAKE SOME MORE PAYMENT. THE LD A.R SUBMITTED THAT THE BUYERS HAD AGREED TO PURCHASE THE PROPERTY FOR A SUM OF RS.3.60 CRORES. HOWEVER, THE PROPERTY SUFFERED FROM CERTAIN DISABILITIES AND THE CO-PURCHASERS SHRI NAZEER AHMED AND SHRI AMAN JNARDHAN AGARWAL WANTED TO CANCEL THE DEAL. HOWEVER, THE ASSESSEES HEREIN HAVE PREV AILED UPON THEM AND THE PROPERTY WAS PURCHASED FOR A LOWER CONSIDER ATION OF RS.3.10 CRORES, IN ORDER TO TAKE CARE OF THE DISABILITIES. SUBSEQUENTLY, THE SELLERS DEMANDED ADDITIONAL AMOUNT OF RS.40.00 LAKH S AND ACCORDINGLY, THE IMPUGNED AGREEMENT WAS PREPARED FO R THE AMOUNT OF RS.40.00 LAKHS. HOWEVER, IT CAN BE NOTICED THAT THE IMPUGNED AGREEMENT WAS NOT SIGNED BY THE BUYERS, I.E., THEY DID NOT AGREE FOR PAYMENT OF RS.40.00 LAKHS. AFTER NEGOTIATION, THE ADDITIONAL AMOUNT WAS DETERMINED AT RS.20.00 LAKHS AND THE SAME WAS P AID TO THE SELLERS BY WAY OF CHEQUE. ACCORDINGLY, THE LD A.R SUBMITTED THAT THE CASH PAYMENT OF RS.20.00 LAKHS MENTIONED IN THE AGR EEMENT WAS NOT PAID AT ALL. HE SUBMITTED THAT THE SAID AGREEMENT IS NOT BINDING UPON ITA NOS.1928 TO 1939/BANG/2016 & ITA NOS.511&512/BA NG/2017 SHRI M.J. SIWANI & SHRI H.J. SIWANI, BANGALORE PAGE 9 OF 29 THE ASSESSEES, SINCE IT WAS PREPARED BY THE SELLERS BEFORE THE FINALISATION OF THE DISPUTE AND IT WAS NOT SINGED B Y THE BUYERS. ACCORDINGLY, HE SUBMITTED THAT NO CREDENCE CAN BE G IVEN TO THE SAME AND ACCORDINGLY PRAYED THAT THE ADDITION OF RS.5.00 LAKHS CONFIRMED BY LD CIT(A) SHOULD BE DELETED. 12.4 THE LD D.R, ON THE CONTRARY, THE AGREEMENT IS, IN EFFECT, A RECEIPT BY THE SELLERS ACKNOWLEDGING THE RECEIPT OF RS.40.00 LAKHS. HENCE IT CANNOT BE CONSIDERED TO BE A DUMB DOCUMENT . FURTHER, THE RECITAL IN THE AGREEMENT CLEARLY STATES THAT THE SE LLERS HAVE RECEIVED THE SUM OF RS.40.00 LAKHS IN FULL SATISFACTION OF T HEIR CLAIM. ACCORDINGLY, THE LD D.R SUBMITTED THAT THE SUBMISSI ONS MADE BY THE ASSESSEE WERE RIGHTLY REJECTED BY LD CIT(A). 12.5 WE HEARD THE PARTIES ON THIS ISSUE AND PE RUSED THE RECORD. THE UNDISPUTED FACT REMAINS THAT SALE DEED FOR THE PURCHASE OF VITSANDARA PROPERTY WAS REGISTERED IN FAVOUR OF BUY ERS BY CONVEYANCE DEEDS DATED 22.08.2005 AND 06.09.2005. THE PRESENT DOCUMENT IS TITLED AS AGREEMENT. IT IS MENTIONED IN THE DOCU MENT THAT THE AGREEMENT IS ENTERED ON 8 TH SEPTEMBER, 2005 BETWEEN SELLERS AND BUYERS. THE AGREEMENT MENTIONS ABOUT THAT THE PROP ERTY WAS INITIALLY AGREED TO BE SOLD FOR RS.3.60 CRORES AND LATER SOLD FOR RS.3.10 CRORES. IT ALSO MENTIONS THAT THE SALE DEEDS WERE REGISTERED ON 22.08.2005 AND 06.09.2005. THUS, THE SALE TRANSACT ION IS COMPLETE IN ALL RESPECTS BY 06-09-2005. 12.6 IT HAS SO HAPPENED THAT THE SELLERS DEMANDED ADDITIONAL AMOUNT OF RS.40.00 LAKHS EVEN AFTER COMPLETION OF R EGISTRATION OF SALE DEEDS. IT IS THE SUBMISSION OF THE ASSESSEE THAT T HE BUYERS AGREED TO PAY ADDITIONAL AMOUNT OF RS.20.00 LAKHS ONLY. HOW EVER, THE SELLERS PREPARED THE AGREEMENT FOR RS.40.00 LAKHS AND HENCE THE BUYERS HAVE NOT SIGNED THE AGREEMENT. ACCORDINGLY, IT WAS SUBMITTED THAT ITA NOS.1928 TO 1939/BANG/2016 & ITA NOS.511&512/BA NG/2017 SHRI M.J. SIWANI & SHRI H.J. SIWANI, BANGALORE PAGE 10 OF 29 THE AMOUNT OF RS.20.00 LAKHS MENTIONED IN THE AGREE MENT WAS NOT PAID AT ALL. 12.7 IN THE FACTS AND CIRCUMSTANCES OF THE CASE , WE ARE OF THE VIEW THAT THERE IS MERIT IN THE SUBMISSIONS OF THE ASSES SEE. IT IS AN UNDISPUTED FACT THAT THE AGREEMENT WAS NOT SIGNED BY THE BUYERS, MEANING THEREBY, IT IS ONLY AN INCOMPLETE AGREEMENT . IF THE ADDITIONAL AMOUNT WAS REALLY AGREED TO BE RS.40.00 LAKHS AND ONLY RS.20.00 LAKHS WAS ACCOUNTED IN THE BOOKS OF ACCOUN T, ANY PRUDENT BUSINESS MAN WOULD NOT SHOW THE SAME IN THE AGREEME NT AT ALL. HENCE, THERE IS MERIT IN THE SUBMISSION OF THE ASSE SSEE THAT A SUM OF RS.20.00 LAKHS ONLY WAS PAID AS ADDITIONAL AMOUNT T O THE SELLERS. ACCORDINGLY, WE ARE OF THE VIEW THAT THE ASSESSEES HAVE REBUTTED THE PRESUMPTION WITH REGARD TO THIS EVIDENCE. IT IS AL SO PERTINENT TO NOTE THAT THE ASSESSING OFFICER DID NOT EXAMINE THE SELL ERS TO FIND OUT THE TRUTH. FURTHER, NO OTHER MATERIAL WAS BROUGHT ON R ECORD TO PROVE THAT THE SUM OF RS.20.00 LAKHS WAS PAID BY WAY OF C ASH AND THE SAME HAS NOT BEEN ACCOUNTED IN THE BOOKS OF ACCOUNTS. H ENCE, IN THE ABSENCE OF ANY CONTRARY MATERIAL TO DISPROVE THE SU BMISSION OF THE ASSESSEES, THE EXPLANATIONS GIVEN BY THE ASSESEES H AVE TO BE ACCEPTED. ACCORDINGLY, WE HOLD THAT THE ADDITION O F RS.5.00 LAKHS EACH SUSTAINED BY LD CIT(A) IN THE HANDS OF THE ASS ESSEES HEREIN ARE LIABLE TO BE DELETED. ACCORDINGLY, WE SET ASIDE TH E ORDERS PASSED BY LD CIT(A) ON THIS ISSUE AND DIRECT THE AO TO DELETE THE ADDITION OF RS.5.00 LAKHS EACH MADE IN THE HANDS OF BOTH THE AS SESSEES IN AY 2006-07. 13. THE NEXT ISSUE RELATES TO THE ADDITION OF RS. 11,80,625/- EACH RELATING TO RAMAGONDANAHALLI PROPERTY IN THE HANDS OF BOTH THE ASSESSEES. ITA NOS.1928 TO 1939/BANG/2016 & ITA NOS.511&512/BA NG/2017 SHRI M.J. SIWANI & SHRI H.J. SIWANI, BANGALORE PAGE 11 OF 29 13.1 THE FACTS RELATING TO THIS ADDITION ARE STA TED IN BRIEF. DURING THE COURSE OF SEARCH OPERATIONS, FOLLOWING RECEIPT S EVIDENCING PAYMENTS MADE DURING THE FINANCIAL YEAR 2005-06 REL EVANT TO AY 2006-07 WERE FOUND: - MUNIAMMA PAID ON 17-06-2005 - RS. 5 ,36,250 VENKATAMMA & OTHERS PAID ON 16-06-2005 - RS.12, 15,000 VENKATAMMA & OTHERS - PAID ON 16-06-2005 RS. 6 ,10,000 ------------------ RS.23,61,250 ============ SINCE THE PAYMENTS HAVE BEEN MADE ON 16-06-2005 AND 17-06-2005 AND SINCE THEY HAVE NOT BEEN ACCOUNTED IN THE BOOKS ON THOSE DATES, THE AO PROPOSED TO ASSESS THE ABOVE AMOUNTS AS UNDI SCLOSED INCOME OF THE ASSESSEES. THE ASSESSEES EXPLAINED AS UNDER :- THE PURCHASE OF PROPERTIES MORE FULLY DESCRIBED AB OVE ARE ACCOUNTED BY ME AND MY BROTHER MR. H J SIWANI IN OU R STATEMENT OF AFFAIRS FILED WITH THE INCOME TAX DEPA RTMENT. IT MAY NOT BE OUT OF PLACE TO MENTION THAT THE MONETAR Y CONSIDERATION AS SET OUT IN THE AGREEMENT FOR PURCH ASE OF PROPERTY AT RAMAGONDANAHALLI WAS PAID AS ADVANCE WA Y BACK IN 1995 ITSELF. HOWEVER, AT THAT TIME, THESE PROPE RTIES COULD NOT BE REGISTERED IN OUR NAMES, AS THERE WAS A PROPOSAL BY BANGALORE DEVELOPMENT AUTHORITY TO ACQUIRE THESE LA NDS FOR FORMATION OF A LAYOUT AND THE SAID LANDS WERE NOTIF IED. SUBSEQUENTLY, AFTER A LONG AND PROTRACTED REQUEST B Y THE EFFECTED VILLAGES, THE GOVERNMENT WAS NOT KEEN AND SERIOUS TO GO AHEAD WITH A PROPOSAL AND HENCE IT WAS SOME TIME IN 2002- 06 THAT THE REGISTRATION OF THESE LANDS WERE MADE P OSSIBLE. WE HAD APPLIED TO BDA AUTHORITY UNDER THE RTI ACT TO O BTAIN EXTRACTS OF THE ABOVE PROCEEDINGS AND ARE ENCLOSING THE REPLIES RECEIVED FROM BDA OF THE PENDING PROPOSAL AS EVIDEN CE TO SUBSTANTIATE OUR CLAIM. NO CONSIDERATION WAS PAID IN 2005 AT THE TIME OF REGISTRATION, BUT HOWEVER TO EXPLAIN TH E LONG GAP OF 10 YEARS FROM THE TIME THE ADVANCE WAS PAID TO THE TIME OF ITA NOS.1928 TO 1939/BANG/2016 & ITA NOS.511&512/BA NG/2017 SHRI M.J. SIWANI & SHRI H.J. SIWANI, BANGALORE PAGE 12 OF 29 REGISTRATION IN 2005, A RECEIPT WAS MADE ON THE DAT E OF REGISTRATION TO CONFIRM THE AMOUNT RECEIVED, SO AS TO FACILITATE REGISTRATION OF THE PROPERTY BEFORE THE REVENUE AUT HORITIES. I AM NOT MAINTAINING BOOKS OF ACCOUNTS FOR MY INDIVIDUAL FINANCIAL AFFAIRS AND THEREFORE, THE ADVANCE PAYMENT MADE TO PURCHASE THE PROPERTY AT RAMAGONDANAHALLI IS REFLECTED IN MY STATEMENT OF AFFAIRS AT A VALUE OF RS.47,40,760/-. ACCORDINGLY, IT WAS SUBMITTED THAT ENTIRE PAYMENTS HAVE BEEN MADE FOR PURCHASE OF PROPERTY IN 1995 ITSELF. IT WAS SU BMITTED THAT A RECEIPT WAS OBTAINED IN 2005 FROM THE VENDORS IN OR DER TO FACILITATE REGISTRATION OF SALE DEEDS. 13.2 THE RECEIPTS OBTAINED ON 16-06-2005 AND 17-0 6-2005 MENTIONED THE PAYMENTS AS FULL AND FINAL SETTLEMEN T. THE AO INTERPRETED THE SAME AS FURTHER MONEY OR FINAL S ETTLEMENT OF MONEY. ACCORDINGLY HE OBSERVED THAT THE MONEY WAS PAID IN ADDITION TO WHAT HAS EARLIER BEEN PAID AND WAS PAID AT THE TIME OF REGISTRATION. HE FURTHER OBSERVED THAT THE ASSESSE ES DID NOT PRODUCE ANY EVIDENCE TO SAY THAT THE TRANSACTION FOR PURCHA SE OF LAND AT RAMAGONDANAHALLI HAPPENED MUCH BEFORE THE REGISTRAT ION OF THE PROPERTY. THE RECEIPTS OBTAINED ON 16-06-2005 AND 17-06-2005 BEARS THE SIGNATURE OF WITNESSES AND ALSO NOTARISED . ACCORDINGLY, THE AO REJECTED THE EXPLANATIONS OF THE ASSESSEE. ACCO RDINGLY HE ASSESSED 50% OF RS.23,61,250/-, I.E., RS.11,80,625/ - EACH IN THE HANDS OF THE ASSESSEES HEREIN. THE LD CIT(A) ALSO CONCURRED WITH THE VIEWS TAKEN BY THE AO AND ACCORDINGLY CONFIRMED THE ADDITIONS. 13.3 WE HEARD THE PARTIES AND PERUSED THE RE CORD. THE LD A.R REITERATED CONTENTIONS MADE BEFORE THE AO. THE LD D.R, ON THE CONTRARY, SUBMITTED THAT THE EXPLANATIONS GIVEN BY THE ASSESSEE SHOULD BE AN ACCEPTABLE EXPLANATION AS HELD BY HON BLE SUPREME ITA NOS.1928 TO 1939/BANG/2016 & ITA NOS.511&512/BA NG/2017 SHRI M.J. SIWANI & SHRI H.J. SIWANI, BANGALORE PAGE 13 OF 29 COURT IN THE CASE OF CIT VS. MUSSADILAL RAM BHAROSA (165 ITR 14)(SC). HOWEVER, THE PRESENT EXPLANATIONS OF THE ASSESSEE A RE NOT ACCEPTABLE. THE LD A.R, IN THE REJOINDER, SUBMITTED THAT THE DE CISION IN THE CASE OF MUSSADILAL RAM BHAROSA (SUPRA) HAS BEEN RENDERED IN THE CONTEXT OF PENALTY LEVIED U/S 271(1)(C) OF THE ACT. HE SUB MITTED THAT THE ASSESSEE HAS PRESENTED CORRECT FACTS BEFORE THE AO AND THE ASSESSING OFFICER HAS NOT PROVED THE SAME TO BE INCORRECT. 13.4 WE NOTICE THAT THE REVENUE HAS SEIZED THREE RECEIPTS, WHEREIN THE SELLERS OF RAMAGONDANAHALLI LANDS HAVE ACKNOWLE DGED THE RECEIPT OF PAYMENT IN FULL AND FINAL SETTLEMENT. SINCE THE RECEIPTS ARE DATED 16-06-2005 AND 17-06-2005, THE ASSESSING OFFICER HA S TAKEN THE VIEW THAT THESE PAYMENTS HAVE MADE BY THE ASSESSEES AND ACCORDINGLY ASSESSED THE SAME AS UNDISCLOSED INCOME. THE EXPLA NATIONS OF THE ASSESSEE ARE THAT (A) THESE LANDS WERE PURCHASED WAY BACK IN 1995 AN D THE ENTIRE CONSIDERATION WAS PAID AS ADVANCE IN THOSE Y EARS ALSO. IN SUPPORT OF THIS EXPLANATION, THE ASSESSEES HAVE FILED STATEMENT OF AFFAIRS BEFORE THE AO SHOWING THEREIN THE PAYMENTS MADE TO THE SELLERS OF THE LAND. (B) THE ASSESSEES HAVE EXPLAINED THE REASONS AS T O WHY THE REGISTRATION OF CONVEYANCE DEEDS COULD NOT BE COMPL ETED. THE ASSESSEES HAVE ALSO FURNISHED COPIES OF REPLIES GIV EN BY BANGALORE DEVELOPMENT AUTHORITY TO SUBSTANTIATE THE IR CONTENTIONS THAT THE REGISTRATION COULD NOT BE COMP LETED DUE TO THE PROPOSAL OF BDA TO ACQUIRE THE LANDS. (C) THE ASSESSEES HAVE EXPLAINED THAT THE IMPUGN ED RECEIPTS FOR PAYMENT OF MONEY WERE OBTAINED FOR NAME-SAKE IN ORDER TO COMPLETE THE REGISTRATION OF CONVEYANCE DEEDS. (D) THE LD A.R SUBMITTED THAT THE AO HAS PRESUMED THE IMPUGNED PAYMENTS AS FURTHER MONEY, WHERE AS NO S UCH EXPRESSION WAS USED IN THE RECEIPTS SO OBTAINED. ITA NOS.1928 TO 1939/BANG/2016 & ITA NOS.511&512/BA NG/2017 SHRI M.J. SIWANI & SHRI H.J. SIWANI, BANGALORE PAGE 14 OF 29 (E) IT WAS ALSO EXPLAINED THAT THE VALUE OF PURCH ASE OF LAND WAS REFLECTED IN THE STATEMENT OF AFFAIRS OF THE AS SESSEES AT RS.47,40,760/-. 13.5 WE NOTICE THAT NONE OF THE EXPLANATION GIVE N BY THE ASSESSEES HAVE BEEN EXAMINED BY THE ASSESSING OFFICER. WE NO TICE THAT THE IMPUGNED PAYMENTS ARE COVERED BY THREE RECEIPTS, OU T OF WHICH TWO RECEIPTS MAKE REFERENCE TO THE AGREEMENT TO SALE DA TED MAY, 1995. FOR THE SAKE OF CONVENIENCE, WE EXTRACT BELOW THE R ELEVANT EXPRESSIONS USED IN ONE OF THE RECEIPTS:- .. RECEIVED A SUM OF RS.12,15,000/- (RUPEES TWELV E LAKH FIFTEEN THOUSAND ONLY) BY WAY OF CASH TOWARDS THE S ALE OF LAND BEARING SURVEY NO.94 MEASUING 28 GUNTAS SITUATED AT RAMAGONDANAHALLI VILLAGE VARTHUR HOBLI, BANGALORE SOUTH FROM MR. H J SIWANI AND MR M J SIWANI AS FULL AND F INAL SETTLEMENT TOWARDS THE AGREEMENT OF SALE DATED MAY 1995 AND TOWARDS REGISTRATION OF AGREEMENT OF SALE DATED 16. 06.2005. WE HAVE NO CLAIMS WHATSOEVER. THE RECEIPT MAKES IT CLEAR THAT THERE WAS AN AGREEM ENT OF SALE DATED MAY 1995 AND THIS RECEIPT IS ISSUED TOWARDS REGISTR ATION OF AGREEMENT OF SALE DEED DATED 16-06-2005. THE USAGE OF EXPRESSION IN THE RECEIPT, VIZ., TOWARDS REGISTRATION OF AGREEMENT OF SALE DATED 16-06-2005, IN OUR VIEW, SUPPORTS THE CONTENTIONS OF THE ASSESSEES. HAD IT BEEN ADDITIONAL PAYMENTS, AS PRESUMED BY THE AO, THERE WAS NO NECESSITY TO USE THE ABOVE SAID EXPRESSIONS. AC CORDINGLY, WE ARE OF THE VIEW THAT THERE IS MERIT IN THE SUBMISSIONS OF THE ASSESSEE THAT THESE RECEIPTS WERE PREPARED IN ORDER TO ENABLE REG ISTRATION OF AGREEMENT OF SALE DATED 16.06.2005. 13.6 WE FURTHER NOTICE THAT THE ASSESSEES HAVE F URNISHED STATEMENT OF AFFAIRS IN ORDER TO SHOW THAT THE PAYMENTS HAVE BEEN MADE IN 1995 ITA NOS.1928 TO 1939/BANG/2016 & ITA NOS.511&512/BA NG/2017 SHRI M.J. SIWANI & SHRI H.J. SIWANI, BANGALORE PAGE 15 OF 29 ITSELF. FURTHER, THE ASSESSEES HAVE ALSO FURNISHED COPIES OF REPLIES RECEIVED FROM BANGALORE DEVELOPMENT AUTHORITY IN OR DER TO SUBSTANTIATE THEIR CONTENTIONS THAT THE REGISTRATIO N COULD NOT BE COMPLETED DUE TO THE PROPOSAL OF THE ABOVE SAID AUT HORITY TO ACQUIRE THE IMPUGNED LANDS. ACCORDINGLY, WE ARE OF THE VIE W THAT THE ASSESSEE THERE IS MERIT IN THE EXPLANATIONS GIVEN B Y THE ASSESSEES AND THEY HAVE EFFECTIVELY REBUTTED THE PRESUMPTION REGARDING THE IMPUGNED SEIZED MATERIALS. A PERUSAL OF THE ASSESS MENT ORDER WOULD SHOW THAT THE ASSESSEES HAVE ACCEPTED SOME OF THE U NACCOUNTED PAYMENTS ON THE BASIS OF EVIDENCES SEIZED AT THE TI ME OF SEARCH, MEANING THEREBY, THE ASSESSEES HAVE DISPUTED THE EV IDENCES, WHEN THE FACTS ARE AGAINST THE PRESUMPTIONS DRAWN BY THE AO. WE FURTHER NOTICE THAT THE ASSESSING OFFICER DID NOT MAKE ANY ENQUIRIES FROM THE SELLERS OF THE LAND IN ORDER TO DISPROVE THE EXPLAN ATIONS GIVEN BY THE ASSESSEE. FURTHER, NO OTHER MATERIAL WAS BROUGHT ON RECORD TO PROVE THAT THE IMPUGNED PAYMENTS WERE MADE OUTSIDE THE TH E BOOKS OF ACCOUNTS. HENCE, IN THE ABSENCE OF ANY CONTRARY MA TERIAL TO DISPROVE THE SUBMISSIONS OF THE ASSESSEES, THE EXPLANATIONS GIVEN BY THE ASSESEES HAVE TO BE ACCEPTED. THE SURROUNDING CIRC UMSTANCES AND EVIDENCES, IN OUR VIEW, SUPPORTS THE EXPLANATIONS O F THE ASSESSEES. ACCORDINGLY, WE HOLD THAT THE ADDITION OF RS.11,80, 625/- EACH SUSTAINED BY LD CIT(A) IN THE HANDS OF THE ASSESSEE S HEREIN ARE LIABLE TO BE DELETED. ACCORDINGLY, WE SET ASIDE THE ORDER S PASSED BY LD CIT(A) ON THIS ISSUE AND DIRECT THE AO TO DELETE TH E ABOVE SAID ADDITION MADE IN THE HANDS OF BOTH THE ASSESSEES IN AY 2006-07. 14. THE NEXT ISSUE RELATES TO THE ADDITION OF RS .1,50,000/- RELATING TO PROPERTY LOCATED AT WHITE FILED. 14.1 THE FACTS RELATING TO THE ABOVE SAID ISSUE ARE STATED IN BRIEF. DURING THE COURSE OF SEARCH, THE SEARCH OFFICIALS F OUND A RECEIPT DATED 24.03.2006 SIGNED BY A PERSON NAMED MR. WINFRED NEL SON ON BEHALF ITA NOS.1928 TO 1939/BANG/2016 & ITA NOS.511&512/BA NG/2017 SHRI M.J. SIWANI & SHRI H.J. SIWANI, BANGALORE PAGE 16 OF 29 OF M/S INDO GLOBAL SPICES LTD FOR A SUM OF RS.3.00 LAKHS. WITH REGARD TO THIS RECEIPT, THE ASSESSEES EXPLAINED AS UNDER:- I SUBMIT THAT WE HAD AGREED TO PAY A TOTAL CONSID ERATION OF RS.2.00 CRORES FOR PURCHASE OF AFORESAID PROPERTY. OUT OF THE AFORESAID CONSIDERATION, THE COMPANY WANTED FOR SOM E EMERGENCY PURPOSE A SUM OF RS.3,00,000/- TO BE PAID BY WAY OF CASH AND A RECEIPT WAS PREPARED BY THE MANAGING DIRECTOR MR. WINFRED NELSON AND HE SIGNED THE RECEIPT. AS T HIS PAYMENT WAS SUPPOSED TO BE MADE TO MR. WINFRED NELSON ON BE HALF OF THE COMPANY, WE INSISTED MR. WINFRED NELSON TO GET SIGNATURE OF MR. N G JAIKUMAR, ANOTHER DIRECTOR OF THE COMPAN Y, SO AS TO PREVENT ANY MISAPPROPRIATION OF MONEY BY MR. WIN FRED NELSON IN HIS INDIVIDUAL CAPACITY. MR. WINFRED NELS ON ASSURED THAT HE WILL GET THE SIGNATURE OF MR. N G JAIKUMAR AND REQUESTED US TO KEEP THE RECEIPT WITH US, SO THAT H E COME WITH MR. N G JAIKUMAR AND GET THE RECEIPT SIGNED BY MR. N G JAIKUMAR AND COLLECT THE CASH. HOWEVER, DUE TO REA SONS BEST KNOWN TO HIM, HE WAS UNABLE TO BRING MR. N G JAIKUM AR AND GET THE RECEIPT SIGNED BY HIM AND THEREFORE THIS AM OUNT OF RS.3,00,000/- WAS NOT PAID, AS MR N G JAIKUMAR DID NOT SIGN THE RECEIPT AND THEREFORE, THE RECEIPT IS INCOMPLET E AND IT IS A DUMB DOCUMENT, ON WHICH NO RELEVANCE CAN BE PLACED. THE AO DID NOT ACCEPT THE EXPLANATIONS OF THE ASSES SEE. SINCE THE RECEIPT IS AVAILABLE FOR PAYMENT OF RS.3,00,000/-, THE AO ASSESSED THE SAME EQUALLY @ RS.1,50,000/- IN THE HANDS OF BO TH THE ASSESSEES HEREIN. THE LD CIT(A) ALSO CONFIRMED THE SAME. 14.2 THE LD A.R SUBMITTED THAT THE TOTAL CONSI DERATION FIXED FOR PURCHASE OF PROPERTY LOCATED AT NO.41/42 EPIP, WHIT E FIELD, BANGALORE WAS RS.2.00 CRORES. THE IMPUGNED SUM OF RS.3.00 LAKHS WAS PART OF THE ABOVE SAID TOTAL CONSIDERATION. HE SUBMITTED THAT THE PURPOSE OF PREPARING THE RECEIPT BY MR. WINFRED NEL SON WAS EXPLAINED ITA NOS.1928 TO 1939/BANG/2016 & ITA NOS.511&512/BA NG/2017 SHRI M.J. SIWANI & SHRI H.J. SIWANI, BANGALORE PAGE 17 OF 29 TO THE AO AND FURTHER THE REASONS AS TO WHY THE PAY MENT WAS NOT MADE AS MENTIONED IN THE RECEIPT, WAS ALSO EXPLAINE D. THE RECEIPT HAS NOT BEEN SIGNED BY BOTH THE DIRECTORS OF THE SE LLER COMPANY AND HENCE IT CANNOT BE CONSIDERED TO BE A PROPER RECEIP T. HE SUBMITTED THAT THE ENTIRE PURCHASE CONSIDERATION RELATING TO THE ABOVE SAID PROPERTY HAS BEEN ACCOUNTED FOR IN THE BOOKS OF ACC OUNT. ACCORDINGLY HE SUBMITTED THAT THE AO WAS NOT CORRECT ON FACTS I N PRESUMING THAT THE IMPUGNED SUM OF RS.3.00 LAKHS REPRESENT AMOUNT PAID OVER AND ABOVE THE CONSIDERATION OF RS.2.00 CRORES. ACCORDI NGLY HE PRAYED FOR DELETION OF ADDITION OF RS.1.50 LAKHS EACH MADE IN THE HANDS OF THE ASSESSEES HEREIN. 14.3 THE LD D.R, ON THE CONTRARY, SUBMITTED TH AT THE RECEIPT HAS BEEN SIGNED BY MR. WINFRED NELSON AND NOBODY WILL S IGN THE RECEIPT UNLESS HE RECEIVES MONEY. HE SUBMITTED THAT MR. WIN FRED NELSON MIGHT HAVE SIGNED ON BEHALF OF OTHER DIRECTOR ALSO. 14.4 WE HEARD THE PARTIES ON THIS ISSUE AND PER USED THE RECORD. WE NOTICE THAT THE CONTENTION OF THE ASSESSEE WAS T HAT THE ABOVE SAID AMOUNT OF RS.3.00 LAKHS REPRESENT PART OF TOTAL CON SIDERATION OF RS.2.00 CRORES, I.E., IT IS NOT OVER AND ABOVE THE AGREED CONSIDERATION. THE ASSESSEE HAS EXPLAINED THE CIRCUMSTANCES UNDER WHICH THE ABOVE SAID RECEIPT WAS PREPARED AND THE REASONS AS TO WHY THE PAYMENT OF RS.3.00 LAKHS WAS NOT ACTUALLY MADE. WE NOTICE THAT THE AO HAS NOT EXAMINED THE EXPLANATIONS OF THE ASSESSE E IN ORDER TO FIND OUT WHETHER THE PAYMENT OF RS.3.00 LAKHS IS PA RT OF AGREED CONSIDERATION OR NOT. IF IT IS PART OF AGREED CONS IDERATION, IN OUR VIEW, THEN THE EXPLANATIONS OF THE ASSESSEE NEED TO BE AC CEPTED, SINCE THE SAME REPRESENTS ONLY TIMING DIFFERENCE. WE HAVE EA RLIER NOTICED THAT THE ASSESSEES HAVE ACCEPTED THE ADDITIONS, WHENEVER THE PAYMENTS WERE NOT ACCOUNTED FOR, MEANING THEREBY, THE ASSESS EES HAVE DISPUTED THE EVIDENCES, WHEN THE FACTS ARE AGAINST THE PRESUMPTIONS ITA NOS.1928 TO 1939/BANG/2016 & ITA NOS.511&512/BA NG/2017 SHRI M.J. SIWANI & SHRI H.J. SIWANI, BANGALORE PAGE 18 OF 29 DRAWN BY THE AO. WE FURTHER NOTICE THAT THE ASSESS ING OFFICER DID NOT MAKE ANY ENQUIRIES FROM THE MR. WILFRED NELSON OR M R. N G JAIKUMAR IN ORDER TO DISPROVE THE EXPLANATIONS GIVEN BY THE ASSESSEE. FURTHER, NO OTHER MATERIAL WAS BROUGHT ON RECORD TO PROVE TH AT THE IMPUGNED PAYMENTS WERE MADE OUTSIDE THE BOOKS OF ACCOUNTS. HENCE, IN THE ABSENCE OF ANY CONTRARY MATERIAL TO DISPROVE THE SU BMISSIONS OF THE ASSESSEES, THE EXPLANATIONS GIVEN BY THE ASSESSEES HAVE TO BE ACCEPTED. THE SURROUNDING CIRCUMSTANCES AND EVIDEN CES, IN OUR VIEW, SUPPORTS THE EXPLANATIONS OF THE ASSESSEES. ACCORDINGLY, WE HOLD THAT THE ADDITION OF RS.1,50,000/- EACH SUSTAI NED BY LD CIT(A) IN THE HANDS OF THE ASSESSEES HEREIN ARE LIABLE TO BE DELETED. ACCORDINGLY, WE SET ASIDE THE ORDERS PASSED BY LD C IT(A) ON THIS ISSUE AND DIRECT THE AO TO DELETE THE ABOVE SAID ADDITION MADE IN THE HANDS OF BOTH THE ASSESSEES IN AY 2006-07. 15. WE SHALL NOW TAKE UP THE APPEAL FILED FOR AY 2008-09. THE ONLY ISSUED URGED ON MERITS IN THIS YEAR RELATE TO THE ADDITION OF RS.1,45,000/- EACH MADE IN THE HANDS OF BOTH THE AS SESSEES. 15.1 DURING THE COURSE OF SEARCH PROCEEDINGS, SI X RECEIPTS OF VARIOUS AMOUNTS AGGREGATING TO RS.2,90,000/- EVIDEN CING PAYMENT MADE IN FY 2007-08 RELEVANT TO AY 2008-09 WERE FOUN D. ALL THE RECEIPTS HAVE BEEN SCANNED BY THE AO IN THE ASSESSM ENT ORDER. THE ASSESSEE SUBMITTED THAT THE IMPUGNED RECEIPTS ARE O NLY DRAFTS, WHICH IS EVIDENT FROM THE FACT THAT A LOT OF CORRECTIONS HAVE BEEN MADE IN THE RECEIPTS. ACCORDINGLY, THE ASSESSEE SUBMITTED THAT THE PAYMENTS AS PER THESE RECEIPTS HAVE NOT BEEN MADE. HOWEVER, THE AO DID NOT ACCEPT THE EXPLANATIONS OF THE ASSESSEE. HOWEVER, HE MADE VERY SAME OBSERVATIONS WHICH WERE MADE IN RESPECT OF RAM AGONDANAHALLI PROPERTY IN AY 2006-07 (THE SAID PROPERTY WAS PURCH ASED IN 1995, BUT REGISTRATION TOOK PLACE IN 2005) AND ACCORDINGL Y EXPRESSED THE VIEW THAT THESE PAYMENTS REPRESENT PAYMENTS MADE OV ER AND ABOVE ITA NOS.1928 TO 1939/BANG/2016 & ITA NOS.511&512/BA NG/2017 SHRI M.J. SIWANI & SHRI H.J. SIWANI, BANGALORE PAGE 19 OF 29 THE AGREED CONSIDERATION. THE LD CIT(A) CONFIRMED THE ADDITION BY OBSERVING THAT THE RECEIPTS MENTION THAT PAYMENTS H AVE BEEN MADE. 15.2 THE LD A.R SUBMITTED THAT THESE PAYMENTS INTENDED TO BE MADE THROUGH THESE RECEIPTS ARE PART OF AGREED CONS IDERATIONS AND THE SAME IS EVIDENT FROM THE RECITALS MADE IN THE R ECEIPTS ITSELF. HE SUBMITTED THAT THESE RECEIPTS WERE ONLY DRAFTS, WHI CH IS EVIDENCED BY THE CORRECTIONS FOUND IN THEM. HE SUBMITTED THAT T HE PAYMENTS, AS PER THESE RECEIPTS, HAVE NOT BEEN MADE. ACCORDINGLY HE SUBMITTED THAT THE TAX AUTHORITIES ARE NOT JUSTIFIED IN TREAT ING THE PAYMENTS AS PAYMENTS MADE OUTSIDE BOOKS OF ACCOUNTS. 15.3 THE LD D.R, ON THE CONTRARY, SUBMITTED THA T THESE RECEIPTS MENTION ABOUT THE PAYMENT OF CASH BY THE ASSESSEES. 15.4 WE HEARD THE PARTIES ON THIS ISSUE AND PER USED THE RECORD. AS SUBMITTED BY LD A.R, WE NOTICE FROM THE RECITALS MADE IN THE RECEIPTS THAT THE PAYMENTS INTENDED TO BE MADE THRO UGH THESE RECEIPTS ARE PART OF AGREED SALES CONSIDERATION. WHEN THE PAYMENTS ARE INTENDED TO BE MADE AS PART OF AGREED CONSIDERA TION, THERE IS NO REASON AS TO WHY THE PAYMENTS, IF ANY, ACTUALLY MAD E SHOULD NOT BE ACCOUNTED FOR IN THE BOOKS OF ACCOUNTS. AS POINTED OUT BY LD A.R, THE RECEIPTS CONTAIN A LOT OF CORRECTIONS AND THE R EGULAR RECEIPTS WOULD NOT NORMALLY CONTAIN SUCH TYPES OF CORRECTION S. HENCE THERE MAY BE MERIT IN THE SUBMISSION OF THE ASSESSEE THAT THESE RECEIPTS ARE ONLY DRAFTS AND THE PAYMENTS HAVE NOT BEEN MADE . WE FURTHER NOTICE THAT THE ASSESSING OFFICER HAS NOT TAKEN ANY STEPS TO VERIFY THE AGREED CONSIDERATION, PAYMENTS MADE BY WAY OF CHEQU ES ETC., MENTIONED IN THE RECEIPTS. WITHOUT ESTABLISHING TH AT OTHER INFORMATION AVAILABLE IN THE RECEIPTS ARE CORRECT, IT MAY NOT BE PROPER TO PRESUME THAT THE CASH COMPONENT ALONE HAS BEEN P AID UNDER THESE RECEIPTS. WE HAVE EARLIER NOTICED THAT THE AO HAS MADE THE ITA NOS.1928 TO 1939/BANG/2016 & ITA NOS.511&512/BA NG/2017 SHRI M.J. SIWANI & SHRI H.J. SIWANI, BANGALORE PAGE 20 OF 29 ADDITION BY MAKING OBSERVATIONS RELATING TO SOME OT HER PROPERTY, WHICH FACT WOULD SHOW THAT THE AO HAS MADE THE ADDI TION IN A MECHANICAL MANNER. HENCE, WE ARE OF THE VIEW THAT THE AO AND LD CIT(A) WERE NOT JUSTIFIED IN MAKING THIS ADDITION. ACCORDINGLY, WE SET ASIDE THE ORDERS PASSED BY LD CIT(A) ON THIS ISSUE AND DIRECT THE AO TO DELETE THE ADDITION OF RS.1,45,000/- EACH MADE I N THE HANDS OF BOTH THE ASSESSEES IN AY 2008-09. 16. IN ALL OTHER YEARS, ONE COMMON ISSUE URGED IS RELATED TO DISALLOWANCE OF PART OF AGRICULTURAL INCOME DECLARE D BY THE ASSESSEE AND ASSESSING THE SAME AS INCOME OF THE ASSESSEE FR OM INCOME FROM OTHER SOURCES. BEFORE DEALING WITH THE SAME, WE WO ULD LIKE TO ADJUDICATE THE ADDITION OF RS.20.00 LAKHS EACH MADE IN THE HANDS OF THE ASSESSEES IN AY 2011-12. 16.1 DURING THE COURSE OF SEARCH, THE SEARCH O FFICIALS UNEARTHED TWO RECEIPTS BEARING NUMBERS 1733 & 1735, BOTH DATE D 10-05-2010. THE VOUCHER BEARING NUMBER 1733 MENTIONS (A) PAYMENT OF RS.20.00 LAKHS TO MRS. H S PARVATHI. (B) HEAD OF A/C MRS. VASANTHA LAKSHMI AND MS. VIDH YA LAKSHMI. (C) TO BE DESTROYED AS COLLECTED VOUCHER NO.1735 WI TH VASANTHA SIGNATURE. THE VOUCHER BEARING NUMBER 1735 MENTIONS THAT THE P AYMENT IS MADE TO MRS. VASANTHA LAKSHMI AND MS. VIDHYA LAKSHM I. THE AMOUNT PAID IS RS.20.00 LAKHS. 16.2 WITH REGARD TO THESE VOUCHERS, THE ASSESSEE FURNISHED FOLLOWING EXPLANATIONS:- WITH REGARD TO PAYMENT OF RS.20,00,000/- MADE TO H S PARVATHI ON 10.05.2020, I SUBMIT THAT THE SAME IS C ANCELLED AS EVIDENT FROM THE VOUCHER ITSELF, SINCE IT IS MENTIO NED THAT TO ITA NOS.1928 TO 1939/BANG/2016 & ITA NOS.511&512/BA NG/2017 SHRI M.J. SIWANI & SHRI H.J. SIWANI, BANGALORE PAGE 21 OF 29 BE DESTROYED AS COLLECTED VOUCHER NO.1735 WITH VASA NTHAS SIGNATURE AND IT ALSO SAYS IN THE HEAD OF ACCOUNT THAT THE PROPOSED PAYMENT IS FOR MRS. VASANTHA LAKSHMI AND M RS. VIDHYA LAKSHMI, BUT HOWEVER THE TRANSACTION TO BUY THEIR PROPERTY COULD NOT GO THROUGH, AS LATER ON THEY CHA NGED THEIR MIND TO SELL THE PROPERTY. THE AO DID NOT ACCEPT THE EXPLANATIONS GIVEN BY THE ASSESSEE BY OBSERVING THAT THE EXPLANATIONS ARE NOT ACCEPTABLE ON THE BASIS OF FACTUAL EVIDENCE AND ALSO ON LEGAL PARAMETERS. HE OBSERVED THAT THE RECEIPTS WERE ACKNOWLEDGEMENT OF THE SELLER AND ARE DULY SIGNED. ACCORDINGLY THE AO TOOK THE VIEW THAT THE AMOUNT PA ID UNDER THESE TWO RECEIPTS AGGREGATING TO RS.40.00 LAKHS IS ASSES SABLE AS INCOME IN THE HANDS OF THE ASSESSEES. ACCORDINGLY, HE ASS ESSED RS.20.00 LAKHS EACH IN THE HANDS OF BOTH THE ASSESSEES. THE LD CIT(A) ALSO CONFIRMED THE SAME. 16.3 WE HEARD THE PARTIES ON THIS ISSUE AND PE RUSED THE RECORD. A PERUSAL OF THE RECEIPT NO.1733 WOULD SHOW THAT IS CLEARLY STATED THEREIN THAT THIS RECEIPT IS TO BE DESTROYED, AS AN OTHER VOUCHER NO.1735 HAS BEEN COLLECTED FROM MRS. VASANTHA LAKSH MI. HENCE, WE AGREE WITH THE CONTENTIONS OF THE ASSESSEE THAT THE RECEIPT NO.1733 IS THE TEMPORARY VOUCHER AND THE SAME IS REPLACED B Y VOUCHER NO.1735. ACCORDINGLY, WE ARE OF THE VIEW THAT NO C REDENCE SHOULD BE GIVEN TO VOUCHER NO.1733, I.E., BOTH VOUCHER NO.173 3 AND 1735 RELATES TO THE SAME TRANSACTION AND HENCE ONLY A SU M OF RS.20.00 LAKHS HAS BEEN GIVEN BY THE ASSESSEE TO MRS. VASANT HA LAKSHMI AND MS. VIDHYA LAKSHMI. ACCORDINGLY THE TAX AUTHORITIE S ARE NOT JUSTIFIED IN TAKING THE AMOUNT OF TRANSACTIONS AT RS.40.00 LA KHS. THE VALUE OF TRANSACTIONS UNDER BOTH THE VOUCHERS SHOULD BE TAKE N AS RS.20.00 LAKHS ONLY. ITA NOS.1928 TO 1939/BANG/2016 & ITA NOS.511&512/BA NG/2017 SHRI M.J. SIWANI & SHRI H.J. SIWANI, BANGALORE PAGE 22 OF 29 16.4 WITH REGARD TO THE TRANSACTION AMOUNT O F RS.20.00 LAKHS, IT IS THE SUBMISSION OF THE ASSESSEES THAT THE SAME WAS PAID FOR PURCHASING THEIR PROPERTY, BUT IT DID NOT GO THROUG H. FROM THE EXPLANATIONS GIVEN BY THE ASSESSEE AS WELL AS THE D ISCUSSIONS MADE BY THE TAX AUTHORITIES, IT IS NOT CLEAR AS TO WHETH ER THE ASSESSEE HAS EXPLAINED THE SOURCES FOR PAYMENT OF RS.20.00 LAKHS . IF THE ASSESSEE HAS EXPLAINED THE SOURCES, THEN NO ADDITION IS NOT CALLED FOR. SINCE THERE IS LACK OF CLARITY ON THIS ISSUE, WE RESTORE THIS ISSUE TO THE FILE OF THE AO IN THE CASE OF BOTH THE ASSESSEES FOR EXA MINING THE SAME AFRESH. 17. THE NEXT COMMON ISSUE RELATES TO THE DISAL LOWANCE OF PART OF AGRICULTURAL INCOME DECLARED BY THE ASSESSEES. THI S ISSUE IS BEING URGED BY THE ASSESSEE IN ASSESSMENT YEARS 2009-10 T O 2013-14. 18. THE DETAILS OF AGRICULTURAL INCOME DECLARED BY THE ASSESSEE AND ACCEPTED BY THE AO ARE TABULATED BELOW:- ASSESSMENT YEAR AGRI. INCOME DECLARED BY ASSESSEE AGRI. INCOME ACCEPTED BY THE AO BALANCE INCOME ASSESSED AS INCOME FROM OTHER SOURCES 2009-10 16,20,000 10,00,000 6,20,000 2010 - 11 16,50,000 10,00,000 6,50,000 2011 - 12 28,50,000 10,00,000 18,50,000 2012-13 41,00,000 10,00,000 31,10,000 2013 - 14 65,00,000 14,00,000 51,00,000 18.1 THE FACTS RELATING TO THIS ISSUE ARE DISCUSS ED IN BRIEF. THE ASSESSEES HEREIN ARE JOINTLY HOLDING 21 ACRES AND 290.58 GUNTAS OF AGRICULTURAL LAND AT PLACES NAMED SRIRAMANAHALLI, RAMAGONDANAHALLI, DODDAGUBBI AND HUSKUR. WITH REGA RD TO THE AGRICULTURAL INCOME, THE AO ASKED THE ASSESSEE TO F URNISH COMPLETE DETAILS RELATING TO AGRICULTURAL INCOME LIME, THE C ROPS GROWN, NATURE OF THE CROP, QUANTITY OF PRODUCE, SELLING PRICE, GR OSS SALE PROCEEDS, ITA NOS.1928 TO 1939/BANG/2016 & ITA NOS.511&512/BA NG/2017 SHRI M.J. SIWANI & SHRI H.J. SIWANI, BANGALORE PAGE 23 OF 29 EXPENDITURE INCURRED ON CULTIVATION & MARKETING, NE T AGRICULTURAL INCOME, WHERE IT WAS SOLD, MODE OF RECEIPT OF MONEY , COPIES OF RTC, IRRIGATION FACILITIES AVAILABLE AT THE LAND. 18.2 THE ASSESSEES FURNISHED EVIDENCES OF LAND HO LDING, NATURE OF CROP GROWN IN EACH OF THE LAND. THE ASSESSEES FURNI SHED STATEMENT OF AGRICULTURAL INCOME AND EXPENSES EVERY YEAR. T HE DETAILS OF AGRICULTURAL INCOME, AGRICULTURAL EXPENSES AND NET AGRICULTURAL INCOME DECLARED BY THE ASSESSEES ARE TABULATED BELO W:- ASSESSMENT YEAR SALE VALUE OF AGRICULTURAL PRODUCE EXPENSES NET INCOME 2009 - 10 44,63,267 12,23,270 32,29,997 2010 - 11 45,41,595 12,23,270 33,18,325 2011-12 78,48,273 21,48,279 56,99,994 2012-13 1,12,67,940 30,67,939 82,00,001 2013-14 1,60,74,483 30,74,483 1,30,00,000 THE ASSESSEES HAVE ALSO FURNISHED THE DETAILS OF CR OP RAISED EVERY YEAR IN THE ABOVE SAID STATEMENT. THE ASSESSEES HA S RAISED RAGI, SOPPU (GREEN LEAFS), TARAKARI (VEGETABLES) AND NILG IRIS (EUCALYPTUS). ALL THE TRANSACTIONS WERE CARRIED IN CASH ONLY. IT WAS ALSO STATED THAT THE AGRICULTURAL PRODUCE WERE SOLD TO HOTELS RUNS B Y H M GROUP. 18.3 THE AO WAS OF THE OPINION THAT THE ASSESSE ES HAVE CLAIMED SUBSTANTIAL AGRICULTURAL INCOME. HE FURTHER OPINED THAT THE ASSESSEES COULD NOT FURNISH DETAILS/EVIDENCE WITH R EGARD TO THE EXPENSES INCURRED FOR CULTIVATION. HE ALSO NOTICED THAT THE ASSESSEES HAVE CLAIMED THAT ALL TRANSACTIONS OF SALES AND EXP ENSES HAVE BEEN CARRIED OUT IN CASH. WITH REGARD TO SALE OF PRODUC ES, THE ASSESSEES CLAIMED THAT THE PRODUCES WERE UTILISED IN THE HOTE LS RUN BY THEIR GROUP. THE AO OBSERVED THAT THE ENTITIES FALLING UNDER H M GROUP ARE WELL ESTABLISHED ENTITIES HAVING ACCESS TO BANK ING FACILITIES. ACCORDINGLY HE OBSERVED THAT IT IS NOT CLEAR AS TO WHY GROUP CONCERNS ITA NOS.1928 TO 1939/BANG/2016 & ITA NOS.511&512/BA NG/2017 SHRI M.J. SIWANI & SHRI H.J. SIWANI, BANGALORE PAGE 24 OF 29 ARE MAKING PAYMENTS IN CASH. HE ALSO TOOK THE VIEW THAT THE PRODUCTIVITY SHOWN IN RESPECT OF THE LANDS IS VERY HIGH AND NOT COMPARABLE WITH THE LANDS SITUATED IN THE SURROUNDI NG AREAS. FURTHER, THE NET INCOME FROM AGRICULTURAL ACTIVITIE S HAS ALSO INCREASED MANIFOLD IN A PERIOD OF 2 TO 3 YEARS WITH OUT ANY INCREASE IN THE AREA OF CULTIVATION. ACCORDINGLY, THE AO EX PRESSED THE VIEW THAT THE ASSESSEES MIGHT HAVE USED THE AGRICULTURE ROUTE TO CONVERT BLACK MONEY INTO ACCOUNTED MONEY. 18.4 THE AO NOTICED THAT THE ASSESSEES HAVE EAC H DECLARED AGRICULTURAL INCOME AT RS.7.00 LAKHS IN THE YEARS R ELEVANT TO AY 2006-07 TO 2008-09, WHICH HAS INCREASED TO RS.16.20 LAKHS, 16.50 LAKHS, 28.50 LAKHS, 41.00 LAKHS AND 65.00 LAKHS FRO M AY 2009-10 TO 2013-14 RESPECTIVELY. THE AO TOOK THE VIEW THAT TH E AGRICULTURAL INCOME DECLARED BY THE ASSESSEES IS VERY MUCH ON TH E HIGHER SIDE. ACCORDINGLY, HE RESTRICTED THE AGRICULTURAL INCOME TO RS.10.00 LAKHS FOR EACH OF THE YEARS IN AY 2009-10 TO 2012-13 AND TO RS.14.00 LAKHS IN AY 2013-14. THE AGRICULTURAL INCOME DECLARED BY THE ASSESSEE OVER AND ABOVE THE ESTIMATE SO MADE BY THE AO WAS A SSESSED AS INCOME OF THE ASSESSEE FROM INCOME FROM OTHER SOURC ES. 18.5 BEFORE THE LD CIT(A), THE ASSESSEES CONTE NDED THAT THEY DID NOT CARRY ON REAL ESTATE BUSINESS IN SOME OF THE YE ARS. ACCORDINGLY, IT WAS CONTENDED THAT THE AO WAS NOT RIGHT IN PRESU MING THAT THE ASSESSEES HAVE CONVERTED BLACK MONEY GENERATED FROM REAL ESTATE ACTIVITIES INTO AGRICULTURAL INCOME. THIS CONTENTI ON OF THE ASSESSEE WAS ACCEPTED BY LD CIT(A). WITH REGARD TO OTHER OB SERVATIONS MADE BY THE AO, THE ASSESSEES FURNISHED VARIOUS EXPLANAT IONS. THE OBSERVATION MADE BY LD CIT(A) IN THIS REGARD IN AY 2009-10 IN THE CASE OF SHRI M J SWAMI AND THE DECISION TAKEN BY HI M ARE EXTRACTED BELOW, FOR THE SAKE OF CONVENIENCE:- ITA NOS.1928 TO 1939/BANG/2016 & ITA NOS.511&512/BA NG/2017 SHRI M.J. SIWANI & SHRI H.J. SIWANI, BANGALORE PAGE 25 OF 29 THE LEARNED ASSESSING OFFICER STATED OTHER REASON S FOR DISALLOWING THE AGRICULTURAL INCOME OF RS.6,20,000/- AND THE APPELL ANT SUBMISSION ARE AS FOLLOWS: I. ALL THE SALE PROCEEDS AND EXPENDITURE INCURRED ARE IN CASH. THE APPELLANT SUBMITS THAT THERE IS NO RESTRICTION IN THE INCOME- TAX ACT THAT THE AGRICULTURAL PRODUCE CANNOT BE SOLD FOR CASH AND EXPENDITURE CAN NOT BE INCURRED IN CASH. II. THE AGRICULTURAL PRODUCE WERE SOLD TO THE HOTEL RUN BY M/S. H.M. GROUP FOR CASH PAYMENTS. THE LEARNED ASSESSING OFFICER HAS STATED THAT THE C ASH PAYMENTS HAVE BEEN OBTAINED WHEN THE BANKING FACILITIES ARE AVAILABLE FOR THOSE ENTITIES. IT IS NOT IN DISPUTE THAT THE APPELLANT HAS NOT SOLD THE AGRI CULTURAL PRODUCE TO M/S. H.M. GROUP. THE APPELLANT IS LEGALLY ENTITLED TO R ECEIVE THE CASH PAYMENTS. III. THE PRODUCTIVITY SHOWN IN THE LANDS ON WHICH VEGETA BLES WERE GROWN IS VERY HIGH AND IS NOT COMPARABLE WITH THE LANDS SITUATED IN THE SURROUNDING AREAS: THE APPELLANT SUBMITS THAT THE APPELLANT HAS CULTIV ATED RAGI, NILGIRI PLANTATION ALSO AND NOT ONLY VEGETABLES. THE LEARN ED ASSESSING OFFICER HAS NOT PUT TO THE NOTICE OF THE APPELLANT IN RESPECT O F THE COMPARABLES FOR REPLY BY THE APPELLANT. CONSEQUENTLY THE ASSESSMENT ORDE R PASSED IS IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. IV. IT IS UNLIKELY EVENT THAT THE INCOME HAS INCREASED MANIFOLD IN A PERIOD OF 2 TO 3 YEARS WITHOUT INCREASE IN THE AREA UNDER CULTIVAT ION. THE APPELLANT SUBMITS THAT THE ABOVE REASONING OF T HE LEARNED ASSESSING OFFICER IS NOT CORRECT, SINCE THE AGRICULTURAL INCO ME WILL INCREASE DEPENDING UPON THE INCREASE IN THE VALUE OF THE SALE OF AGRIC ULTURAL PRODUCE AND THE YIELD OF THE AGRICULTURE. IT IS NOT NECESSARY THAT TO HAVE MORE AGRICULTURAL INCOME THE LAND HOLDING OF THE AGRICULTURAL LAND SH OULD ALSO INCREASE. THE FINDING OF THE LEARNED ASSESSING OFFICER IS PERVERS E. THE LEARNED ASSESSING OFFICER IS NOT CORRECT IN LAW IN NOT ACCEPTING THE AGRICULTURAL INCOME OF THE APPELLANT TO THE EXTENT OF RS.6,20,000/-. FURTHER THE APPELLANT DOES NOT HAVE ANY OTHER SOURCE OF INC OME OTHER THAN DECLARED IN THE STATEMENT OF TOTAL INCOME, TO SHOW AS AGRICU LTURAL INCOME. CONSEQUENTLY THE ADDITION MADE AS INCOME FROM OTHER SOURCES TO THE EXTENT OF RS.6,20,000/- IS LIABLE TO BE DELETED UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. ITA NOS.1928 TO 1939/BANG/2016 & ITA NOS.511&512/BA NG/2017 SHRI M.J. SIWANI & SHRI H.J. SIWANI, BANGALORE PAGE 26 OF 29 THE LEARNED ASSESSING OFFICER MADE THE ABOVE ADDITI ONS PURELY ON SUSPICION, SURMISE, ASSUMPTIONS AND PRESUMPTIONS AND CONSEQUEN TLY THE ADDITIONS MADE DESERVES TO BE DELETED ON THE FACTS AND CIRCUM STANCES OF THE CASE. I HAVE GONE THROUGH THE FACTS OF THE CASE, ASSESSME NT ORDER AND WRITTEN SUBMISSIONS OF THE APPELLANT. THE QUESTIONS RAISED BY THE AO HAS STILL NOT BEEN ANSWERED. THE AREA UNDER CULTIVATION HAS NOT INCREASED BUT THERE IS A SUDDEN JUMP IN THE AGRICULTURAL INCOME. THE APPELL ANT HAS NOT BEEN ABLE TO GIVE ANY CONVINCING REPLY ABOUT THE REASON FOR THIS SUDDEN JUMP IN THE AGRICULTURAL INCOME. THE AGRICULTURAL INCOME WAS R S.7 LAKHS FOR A.Y. 06-07, 07-08 AND 08-09 AND SUDDENLY IT HAS JUMPED TO RS.16 ,20,000/-. THE AO HAS RIGHTLY ASKED THE APPELLANT TO EXPLAIN WITH EVIDENC E ABOUT THE SUDDEN INCREASE OF AGRICULTURAL INCOME. THE APPELLANT HAS ONLY MADE COUNTER ARGUMENTS BUT HAS NOT SUBMITTED THE EVIDENCE OF INC URRING EXPENSES FOR AGRICULTURE, THE REASON FOR SUDDEN INCREASE IN AGRI CULTURAL INCOME IN TERMS OF USING BETTER QUALITY SEEDS OR CHANGE IN CROPPING PATTERN OR CHANGE IN THE NATURE OF PRODUCE OR BETTER AGRICULTURAL EQUIPMENTS OR BETTER IRRIGATION FACILITIES. THE CLAIM OF AGRICULTURAL HAS BEEN MAD E BY THE APPELLANT AND HENCE, THE ONUS IS SQUARELY ON THE APPELLANT TO PRO VE TO THE SATISFACTION OF THE AO THAT THE CLAIM IS GENUINE. THERE ARE NO TRA ILS TO BE FOLLOWED AS PURCHASES HAS BEEN MADE IN CASH AND HAS BEEN SOLD T O GROUP CONCERNS IN CASH. IN ABSENCE OF THE CORROBORATIVE EVIDENCE, TH E ADDITION MADE BY THE AO AS INCOME FROM OTHER SOURCES TO AN EXTENT OF RS.6,2 0,000/- IS UPHELD. BY DOING SO THE AO HAS BEEN REASONABLE TO ACCEPT AN IN CREASE FROM 7 LAKH TO 10 LAKH WHICH IN ITSELF IS NOT A SMALL AMOUNT. THE GROUND OF APPEAL IS, ACCORDINGLY, DISMISSED. IN OTHER YEARS ALSO, THE LD CIT(A) CONFIRMED THE DI SALLOWANCE MADE BY THE AO ON ALMOST IDENTICAL REASONING. 18.6 THE LD A.R SUBMITTED THAT THE ASSESSEES HO LD ABOUT 28.25 ACRES OF LAND AND ARE USING MODERN CULTIVATION METH OD AND QUALITY ITA NOS.1928 TO 1939/BANG/2016 & ITA NOS.511&512/BA NG/2017 SHRI M.J. SIWANI & SHRI H.J. SIWANI, BANGALORE PAGE 27 OF 29 SEEDS. HENCE THEY COULD ACHIEVE BETTER PRODUCTIVIT Y. HE SUBMITTED THAT THE ASSESSEES HAVE FURNISHED DETAILS OF AGRICU LTURAL LAND HOLDING AND OTHER DETAILS THAT WERE CALLED FOR BY THE AO. THEY SUBMITTED A STATEMENT SHOWING THE DETAILS OF CROP GROWN IN EACH LAND, GROSS REVENUE GENERATED, THE EXPENSES INCURRED THEREIN AN D NET AGRICULTURAL INCOME. HE SUBMITTED THAT THE ASSESSI NG OFFICER DID NOT PROVE THAT THE DETAILS SO FURNISHED BY THE ASSESSEE ARE WRONG. THOUGH THE AO OBSERVES THAT THE PRODUCTIVITY SHOWN BY THE ASSESSEES IS HIGHER THAN THAT SHOWN IN COMPARABLE C ASES IN SURROUNDING AREAS, YET HE HAS NOT CITED ANY COMPARA BLE INSTANCES IN SUPPORT OF HIS OBSERVATION. HE SUBMITTED THAT THE ASSESSEES HAVE OFFERED PROPER EXPLANATIONS IN RESPECT OF THE EACH OF THE OBSERVATIONS MADE BY THE AO. NONE OF THE EXPLANATION WAS FOUND TO BE INCORRECT. ACCORDINGLY HE SUBMITTED THAT THERE IS NO REASON TO DISBELIEVE THE AGRICULTURAL INCOME DECLARED BY THE ASSESSEE. 18.7 ON THE CONTRARY, THE LD D.R SUBMITTED THAT THE ASSESSEE HAS MERELY FURNISHED A STATEMENT OF INCOME AND EXPENSES . BUT THOSE INCOME AND EXPENSES HAVE NOT BEEN SUBSTANTIATED WIT H EVIDENCES. FURTHER THE PER ACREAGE INCOME DECLARED BY THE ASSE SSEES ARE VERY MUCH HIGHER THAN THE AVERAGE INCOME DECLARED BY OTH ERS. HE SUBMITTED THAT THE AO HAS NOT DISALLOWED ENTIRE AGR ICULTURAL INCOME. CONSIDERING THE LAND HOLDING, PAST INCOME DETAILS A ND AVERAGE INCOME GENERATED IN SURROUNDING AREAS, THE AO HAS O NLY RESTRICTED THE AGRICULTURAL INCOME DECLARED BY THE ASSESSEES. ACCORDINGLY, HE SUBMITTED THAT THERE IS NO REASON TO INTERFERE WITH THE DECISION RENDERED BY LD CIT(A) ON THIS ISSUE IN ALL THE YEAR S UNDER CONSIDERATION. 18.8 WE HAVE HEARD RIVAL CONTENTIONS ON THIS I SSUE AND PERUSED THE RECORD. WE NOTICE THAT THE ASSESSEES HAVE FURN ISHED A STATEMENT SHOWING SALE VALUE OF AGRICULTURAL PRODUCE AND THE EXPENSES IN ITA NOS.1928 TO 1939/BANG/2016 & ITA NOS.511&512/BA NG/2017 SHRI M.J. SIWANI & SHRI H.J. SIWANI, BANGALORE PAGE 28 OF 29 SUPPORT OF THE AGRICULTURAL INCOME DECLARED BY THEM . AS OBSERVED BY THE AO, THE ASSESSEES HAVE NOT FURNISHED VARIOUS DE TAILS CALLED FOR BY THE AO, PARTICULARLY THE DETAILS OF YIELD, QUANTIT Y RAISED, SELLING PRICE ETC. THERE SHOULD NOT BE ANY DOUBT THAT IT IS THE RESPONSIBILITY OF THE ASSESSEES TO PROVE THE AGRICULTURAL YIELD, REALIZAT ION ETC., BY FURNISHING COGENT EVIDENCES. MERE FURNISHING OF ST ATEMENT MAY NOT BE SUFFICIENT. AT THE SAME TIME, THE AO ALSO DID N OT ATTEMPT TO FIND OUT THE AVERAGE YIELD, AVERAGE SELLING PRICE ETC., FROM THE SURROUNDING AREAS OR FROM AGRICULTURAL DEPARTMENT. THUS, THE A O HAS ALSO MADE ESTIMATE WITHOUT ANY BASIS. 18.9 IN VIEW OF THE ABOVE, WE ARE OF THE VIEW T HAT THE ISSUE OF AGRICULTURAL INCOME REQUIRES FRESH EXAMINATION IN A LL THE YEARS. ACCORDINGLY, WE SET ASIDE THE ORDERS PASSED BY LD C IT(A) ON THIS ISSUE IN AY 2009-10 TO 2013-14 AND RESTORE THE SAME TO TH E FILE OF THE AO FOR EXAMINING IT AFRESH. AFTER AFFORDING ADEQUATE OPPORTUNITY OF BEING HEARD, THE ASSESSING OFFICER MAY TAKE APPROPRIATE D ECISION IN ACCORDANCE WITH LAW. 19. IN THE RESULT, ALL THE APPEALS OF THE ASSE SSEE ARE TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH OCT, 2020 SD/- (PAVAN KUMAR GADALE ) JUDICIAL MEMBER SD/- (B.R. BASKARAN) ACCOUNTANT MEMBER BANGALORE, DATED 26 TH OCT, 2020. VG/SPS ITA NOS.1928 TO 1939/BANG/2016 & ITA NOS.511&512/BA NG/2017 SHRI M.J. SIWANI & SHRI H.J. SIWANI, BANGALORE PAGE 29 OF 29 COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, BANGALORE.