Shri Murlidhar Sharma, JODHPUR V. ACIT, JODHPUR

ITA 215/JODH/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70235 (ITAT-JODHPUR)
• Duration Of Justice: 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 17-09-2013
• Assessment Year: 2010-2011
• Appeal Filed On: 05-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DEEPAK SEHGAL
• Keywords: Unexplained investment; Search and seizure; Document seized; Valuation report; Documents seized
• Section: 132

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL: JODHPUR BENCH : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NOS. 213 TO 215/JU/2013 [A.YS. 2005-06, 2006-07 & 2010-2011] SHRI MURLIDHAR SHARMA VS. THE ACIT [ASSTT] 101, BABU RAJENDRA MARG CENTRAL CIRCLE - 2 MASURIA, JODHPUR JODHPUR PAN NO. : AOLPS 6649 J ITA NOS. 259 TO 260/JU/2013 [A.YS. 2006-07 & 2010-2011] THE ACIT [ASSTT] VS. SHRI MURLIDHAR SHARMA CENTRAL CIRCLE 2 101, BABU RAJENDRA MARG JODHPUR MASURIA, JODHPUR PAN NO. : AOLPS 6649 J (APPELLANT ) (RESPONDENT) ASSESSEE BY : SHRI AMIT KOTHARI DEPARTMENT BY : SHRI DEEPAK SEHGAL DATE OF HEARING : 17/09/2013. DATE OF PRONOUNCEMENT : 24/09/2013. PER BENCH:- THIS IS A BUNCH OF FIVE APPEALS THREE BY THE ASS ESSEE FOR THE A.YS. 2005-06, 2006-07 & 2010-2011 AND TWO BY THE DEPARTMENT PERTAINING TO A.YS. 2006-07 AND 2010-201 1 RELATING TO THE SAME ASSESSEE. THESE APPEALS WERE HEARD 2 TOGETHER, THEREFORE, FOR THE SAKE OF CONVENIENCE AN D BREVITY, THESE ARE BEING DECIDED BY A COMMON ORDER. ITA NO. 213/JODH/2013. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE FOR THE A.Y. 2005-06 FILED HIS RETURN OF I NCOME [ROI] U/S 139(1) ON 4.1.2007 DECLARING INCOME OF RS. 2,58 ,158/-. SEARCH AND SEIZURE OPERATION WAS CONDUCTED U/S 132 OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'T HE ACT', FOR SHORT] AT THE RESIDENCE AND BUSINESS PREMISES OF TH E ASSESSEE AND HIS FAMILY MEMBERS, ON 15 TH AND 16 TH DECEMBER, 2009. CERTAIN DOCUMENTS AND ASSETS BELONGING TO THE ASSES SEE WERE FOUND AND INVENTORISED AND SEIZED. A NOTICE U/S 153 A DATED 14.10.2010 WAS ISSUED WHICH WAS SERVED ON THE ASSES SEE ON 18.10.2010. IN RESPONSE TO THE NOTICE, THE ASSESSE E FILED A RETURN ON 15.3.2011 DECLARING TOTAL INCOME OF RS. 1 5,11,135/- AN ORDER U/S 153B R.W.S 153A/143(3) WAS PASSED ON 30.12.2011 DETERMINING THE INCOME OF THE ASSESSEE A T RS. 1,06,99,770/-. VARIOUS ADDITIONS WERE MADE AGAINST WHICH THE ASSESSEE PREFERRED APPEAL AND THE LD. CIT(A) HA S GIVEN 3 PART RELIEF TO THE ASSESSEE. BUT STILL THE ASSESSEE IS NOT SATISFIED AND HAS COME IN APPEAL BEFORE THE TRIBUNA L. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE CAR EFULLY PERUSED THE ENTIRE MATERIAL ON RECORD. GROUND NO. 1 WAS NOT PRESSED BY THE LD. A.R. AT THE TIME OF HEARING. TH EREFORE, THIS GROUND STANDS DISMISSED. GROUND NO. 6 IS GENER AL IN NATURE AND DOES NOT REQUIRE ANY SPECIFIC ADJUDICATI ON. GROUND NO. 5 PERTAINS TO CHARGING OF INTEREST. GROU ND NO. 4 DOES NOT RAISE ANY SPECIFIC ISSUE BUT SIMPLY IS AN ARGUMENTATIVE GROUND, WHICH DOES NOT REQUIRE ANY SE PARATE DECISION. 4. GROUND NO 2 RELATES TO THE ADDITION OF RS. 1,20, 38,693/- ON ACCOUNT OF RAM NAGAR SCHEME. 4.1 BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE THE AO OBSERVED IN HIS ORDER THAT ON GOING THROUGH THE STATEMENTS AND OTHER PROCEEDINGS DURING THE COURSE OF SEARCH AND SUBSEQUENTLY, IT WAS NOTICED THAT THE BOOKS OF ACCO UNTS WERE NOT MAINTAINED BY THE ASSESSEE. THE ASSESSEE HAD ALSO A CCEPTED THAT HE 4 HAD NOT MAINTAINED REGULAR BOOKS OF ACCOUNTS NOR WE RE REGULAR BOOKS OF ACCOUNTS FOUND ON COMPUTER OR OTHERWISE DURING T HE SEARCH PROCEEDINGS. THEREFORE, THE SUBMISSIONS MADE BY THE ASSESSEE COULD NOT BE VERIFIED FROM ANY BOOKS OF ACCOUNTS OR SUPPO RTING EVIDENCE. IT WAS FURTHER MENTIONED THAT DURING THE COURSE OF HIS STATEMENTS DURING THE SEARCH AND SEIZURE OPERATIONS, SHRI MOHAN LAI S UTHAR STATED ON 15/12/2009 IN REPLY TO QUESTION NO. 27 TO 29 PERTAI NING TO ANNEXURE AS-1, PAGE 20, THAT THIS PAPER PERTAINED TO TRANSAC TIONS RELATING TO 47 BIGHAS OF LAND IN RAM NAGAR AND PROJECT DEVELOPED B Y HIM AND HIS PARTNERS. IT WAS ADMITTED BY HIM THAT THE COST OF P URCHASE OF THIS LAND WAS RS.4,81,54,774/- IN F.Y. 2004-05 AND BY F.Y. 20 05-06 ALL THE PLOTS WERE SOLD FOR A TOTAL SALE CONSIDERATION OF RS.5,32 ,21,764/-. IT WAS ADMITTED BY THE ASSESSEE THAT HE WAS WORKING ALONG WITH MR. MOHAN LAL SUTHAR FOR GETTING THE NECESSARY APP ROVALS FROM THE MUNICIPAL CORPORATION/UTI AND GETTING THE NECESSARY 'PATTA' AND CLEARANCES. THUS, HE CANNOT CLAIM THAT HE DID NOT K NOW ABOUT THIS SCHEME. AS FOR THE SUBMISSIONS THAT NO INVESTMENT W AS MADE ON PURCHASE OF LAND AND THE PAYMENTS TO THE SELLERS WE RE MADE FROM THE ADVANCES RECEIVED FROM THE BUYERS OF LAND, THE A.O. FOUND IT TO BE UN- ACCEPTABLE. HE FURTHER OBSERVED THAT FIRSTLY, THE ASSESSEE HAS FAILED TO FURNISH ANY SUPPORTIVE EVIDENCE REGARDING THIS CLAI M. NO DETAILS OR 5 EVIDENCE WERE FOUND DURING THE COURSE OF SEARCH AND SEIZURE OPERATIONS REGARDING THE DETAILS OF ANY ADVANCES HA VING BEEN RECEIVED PRIOR TO THE PAYMENTS MADE TO THE SELLERS OF THIS L AND. SECONDLY, IT WAS VERY UNLIKELY THAT ANY PURCHASER WOULD INVEST ANY A MOUNT OF MONEY IN LAND EVEN BEFORE THE NECESSARY CONVERSION ETC. OF T HE USE OF LAND HAD BEEN MADE FOR RESIDENTIAL USE, NOR COULD THE AGRICU LTURAL LAND HAVE BEEN CUT INTO PLOTS BEFORE THIS CONVERSION. THE SU BMISSION THAT SINCE HE HAD DECLARED/SURRENDERED HIS PORTION OF THE PROF ITS FROM THE SCHEME IN A.Y. 2006-07, NO ADDITIONS SHOULD BE MADE IN HIS HANDS ON ACCOUNT OF INVESTMENT MADE IN THIS LAND WAS ALSO NO T ACCEPTED BY THE A.O. AS REGARDS TO THIS SUBMISSION THAT INVESTMENTS WERE SEPARATE FROM NET PROFITS, THE INVESTMENT IN THIS LAND WAS MADE P RIOR TO THE PROFITS EARNED, WHILE A SET OFF OF ROTATION OF THE NET PROF IT EARNED FROM THIS SCHEME IN A.Y. 2006-07 CAN BE GIVEN FOR INVESTMENT MADE IN LAND SUBSEQUENT TO THAT A.Y., THE A.O. OBSERVED THAT IT WAS NOT UNDERSTOOD HOW THE BENEFIT OF SET OFF CAN BE GIVEN AGAINST INV ESTMENT WHICH WAS MADE BEFORE THE NET PROFIT WAS REALIZED ON THE SALE OF THIS LAND. FOLLOWING THE SAME REASONING, THE LD. CIT(A) HAS AL SO CONFIRMED THE ADDITION OF RS. 1,20,38,693/-. THE ASSESSEE IS FUR THER AGGRIEVED. 6 4.2 BEFORE US, SIMILAR ARGUMENTS WERE REITERATED FR OM BOTH THE SIDES. WE HAVE CAREFULLY GONE THROUGH THE MATERIAL PLACE AT PAGE 68 OF THE ASSESSEES PAPER BOOK WHICH WAS FOUND FROM THE POSSESSION OF THIRD PARTY DURING SEARCH CONDUCTED IN HIS CASE. AS PER THIS PAPER, THE ASSESSEE HAS ALREADY SURRENDERED FOR TAXATION A SUM OF RS. 13 LAKHS, WHICH FELL TO HIS PORTION AS PROFIT FROM THIS TRANS ACTION. IT IS A FACT THAT THIS DOCUMENT WAS NOT FOUND FROM THE POSSESSION OF THIS ASSESSEE. NO EVIDENCE OF ANY INVESTMENT IN LAND WORTH THE NAME W AS FOUND IN SEARCH FROM THE POSSESSION OF THIRD PARTY. THE A.O . HAS NOT EVEN MADE ANY INVESTIGATION REGARDING INVESTMENT MADE IN THE PURCHASES OF LAND. IT IS COMMON PRACTICE IN SUCH TYPE OF BUSINESS WHER E LAND OF ANOTHER OWNER IS TRANSACTED SO THAT AFTER SOME DEVELOPMENT, LAND IS DIVIDED INTO PLOTS AND PROSPECTIVE BUYERS ARE ATTRACTED. T HE PLOTS ARE SOLD ONE BY ONE AND OUT OF THOSE SALE PROCEEDS, THE OWNER OF LAND AS WELL AS THE INTERMEDIARY PERSONS GET THEIR SHARES, AS SETTLED B ETWEEN THEM WHEN LAND IS DIRECTLY TRANSFERRED AND SOLD BY THE OWNER OF THE LAND TO THE PROSPECTIVE BUYERS OF THE LAND. THERE IS NOTHING U NNATURAL IN THIS CLAIM OF THE ASSESSEE. THE ASSESSEE HAS ALREADY OF FERED FOR TAXATION HIS PROFIT, RATHER TO SAY, MORE THAN WHAT HAS BEEN CALCULATED, WHICH IS EVIDENT FROM PAGE 68 OF THE PB, A COPY OF DOCUMENT FOUND FROM SHRI MOHAN LAL SUTHAR WHEREIN HE HAS SUFFERED TAX THEREO N IN A.Y. 2006-07. 7 WE DO NOT SEE ANY REASON TO MAKE ANY ADDITION ON AC COUNT OF INVESTMENT IN THE LAND BEING 1/4 TH OF THE TOTAL PRICE ESTIMATED BY THE A.O. AS PER THIS PAGE. THIS ADDITION IS TOTALLY BA SELESS AND DESERVES TO BE DELETED. ACCORDINGLY, ADDITION OF RS. 1,20,38,6 93/- IS HEREBY DELETED AND GROUND NO. 2 OF THIS APPEAL IS ALLOWED. 5. GROUND NO. 3 OF THIS APPEAL RELATES TO ADDITION OF RS. 3,00,240/- MADE ON ACCOUNT OF EXPENSES SHOWN IN THE BOOKS OF A CCOUNT/BALANCE SHEET ON ACCOUNT OF HOUSE/FARM HOUSE. 5.1 FACTS OF THIS GROUND ARE THAT THE ASSESSEE HAD INCURRED EXPENDITURE ON CONSTRUCTION IN PROPERTY. THE MATTE R HAD BEEN REFERRED TO THE DVO AND THE ASSESSEE HAD NOT F URNISHED ANY DETAILS BEFORE HIM EITHER. THE ASSESSEE WAS NO T MAINTAINING ANY BOOKS OF ACCOUNT SO IT WAS NOT POSS IBLE TO VERIFY WHETHER THE EXPENDITURE ON CONSTRUCTION WAS MADE FROM THE DECLARED INCOME DURING THE A.Y. THEREFORE , THE A.O. MADE ADDITION OF RS. 3,00,240/- ON ACCOUNT OF UNDECLARED EXPENDITURE ON FARM HOUSE. THE LD. CIT(A ) UPHELD THE SAME. AGGRIEVED THE ASSESSEE IS IN APPEAL. 8 5.2 WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE CA REFULLY PERUSED THE ENTIRE MATERIAL ON RECORD. THIS ADDITIO N PERTAINS TO AN INVESTMENT ALREADY SHOWN IN HOUSE/FARM IN HIS FINAL ACCOUNT AND BOOKS OF ACCOUNT PERTAINING TO THIS A.Y . NO INCRIMINATING EVIDENCE WAS FOUND IN THIS REGARD DUR ING SEARCH IN THE THIRD PARTY. THEREFORE, THIS AMOUNT CANNOT BE TREATED AS UNEXPLAINED INVESTMENT BY ANY MEANS AND BY SIMPL Y OBSERVING THAT PROPER BOOKS WERE NOT MAINTAINED. TH E INVESTMENT OF RS. 3,00,024/- REPRESENTS PURCHASE OF LAND ON WHICH HOUSE WAS CONSTRUCTED. THE ASSESSEE HAD SUBM ITTED COPY OF REGISTERED SALE DEED IN SUPPORT OF THE INVE STMENT. THE SAID LAND WAS PURCHASED IN THE JOINT NAME OF TH E ASSESSEE AND HIS BROTHER SHRI GAUTAM SHARMA. THE INVESTMENT IS VERIFIABLE FROM THE SALE DEED ALSO. COPIES OF LEDGER FROM BOOKS OF ACCOUNT WHERE THIS INVESTMENT HAS BEEN SHOWN, AND COPY OF CASH BOOK WERE ALSO DULY SUBMITT ED. SOURCE OF INVESTMENT IS NOT AT ALL IN DISPUTE AND I N SUCH A SITUATION, THE ADDITION SO MADE IS WHOLLY UNCALLED FOR AND DESERVES TO BE DELETED. ACCORDINGLY, WE ORDER THE DELETION OF ADDITION AND ALLOW GROUND NO 3 OF THIS APPEAL. 9 6. GROUND NOS. 4 AND 6 ARE GENERAL IN NATURE. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ITA NOS. 214 AND 259/JODH/2013. 8. THESE ARE CROSS APPEALS FILED AGAINST THE ORDER OF THE LD. CIT(A) DATED 22.2.2013 PERTAINING TO A.Y. 2006-07. 9. IN ASSESSEES APPEAL GROUND NO. 1 WAS NOT PRESSE D AND HENCE IT IS DISMISSED AS NOT PRESSED. GROUND NOS. 5, 6 & 8 ARE FORMAL GROUNDS WHICH DO NOT REQUIRE ANY SPECIFIC ADJUDICATION. GR OUND NO. 7 IS REGARDING CHARGING OF INTEREST. 10. GROUND NO. 2 OF THIS APPEAL RELATES TO SUSTENAN CE OF ADDITION OF RS. 7,66,746/- AS INCOME DERIVED FROM RAM NAGAR SCH EME SUSTAINED OUT OF ADDITION OF RS. 12,66,747/- MADE BY THE A.O. 10.1 EXCEPT FOR THE AMOUNTS, FACTS, REASONS, ARGUME NTS ON THIS ISSUE ARE MUTATIS MUTANDIS SIMILAR TO GROUND NO. 2 IN A.Y . 2005-06. THEREFORE, WITH SIMILAR REASONING, WE ALLOW THIS GR OUND AND ORDER TO DELETE THE IMPUGNED ADDITION. 10 11. GROUND NO. 3 PERTAINS TO INVALIDITY OF THE ADDI TION OF RS. 70,556/- SUSTAINED ON ACCOUNT OF ALLEGED UNEXPLAINED HOUSE H OLD EXPENSES. 11.1 BRIEFLY STATED, THE FACTS OF THIS ISSUE ARE TH AT VARIOUS MEMBERS OF THE FAMILY MADE WITHDRAWALS AMOUNTING TO RS. 2,89,4 44/- WHICH HAS BEEN TREATED BY THE A.O. AS INADEQUATE FOR MEETING THE HOUSE HOLD EXPENSES. THIS ESTIMATION OF THE A.O. IS BASED ON NO EVIDENCE. THEREFORE, SUCH ADDITION CANNOT BE ENCOURAGED AND H AS TO BE OUT RIGHTLY REJECTED. WE ORDER TO DELETE THE SUSTAINED ADDITION OF RS. 70,556/- AND ALLOW GROUND NO. 3 OF THIS APPEAL. 12. GROUND NO. 4 PERTAINS TO ADDITION OF RS. 19,41, 689/- ON ACCOUNT OF EXPENSES SHOWN IN THE BOOKS OF ACCOUNT/BALANCE S HEET ON ACCOUNT OF HOUSE/FARM HOUSE. GROUND NO. 1 OF REVENUES APP EAL IS CONNECTED WITH THIS GROUND. 12.1 FACTS OF THIS GROUND ARE THAT THE ASSESSEE HAD INCURRED EXPENDITURE ON CONSTRUCTION IN PROPERTY. THE MATTE R HAD BEEN REFERRED TO THE DVO AND THE ASSESSEE HAD NOT F URNISHED ANY DETAILS BEFORE HIM EITHER. THE ASSESSEE WAS NO T MAINTAINING ANY BOOKS OF ACCOUNT SO IT WAS NOT POSS IBLE TO 11 VERIFY WHETHER THE EXPENDITURE ON CONSTRUCTION WAS MADE FROM THE DECLARED INCOME DURING THE A.Y. THEREFORE , THE A.O. MADE ADDITION OF RS. 19,41,689/- ON ACCOUNT OF UNDECLARED EXPENDITURE ON FARM HOUSE. THE LD. CIT(A ) UPHELD THE SAME. AGGRIEVED THE ASSESSEE IS IN APPEAL. 12.2 WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE C AREFULLY PERUSED THE ENTIRE MATERIAL ON RECORD. THIS ADDITIO N PERTAINS TO AN INVESTMENT ALREADY SHOWN IN HOUSE/FARM IN HIS FINAL ACCOUNT AND BOOKS OF ACCOUNT PERTAINING TO THIS A.Y . NO INCRIMINATING EVIDENCE WAS FOUND IN THIS REGARD DUR ING SEARCH IN THE THIRD PARTY. THEREFORE, THIS AMOUNT CANNOT BE TREATED AS UNEXPLAINED INVESTMENT BY ANY MEANS AND BY SIMPL Y OBSERVING THAT PROPER BOOKS WERE NOT MAINTAINED. TH E INVESTMENT OF RS. 19,41,689/- REPRESENTS PURCHASE O F LAND ON WHICH HOUSE WAS CONSTRUCTED. THE ASSESSEE HAD SUBM ITTED COPY OF REGISTERED SALE DEED IN SUPPORT OF THE INVE STMENT COPIES OF LEDGER FROM BOOKS OF ACCOUNT WHERE THIS I NVESTMENT HAS BEEN SHOWN, AND COPY OF CASH BOOK WERE ALSO DUL Y SUBMITTED. SOURCE OF INVESTMENT IS NOT AT ALL IN D ISPUTE AND IN SUCH A SITUATION, THE ADDITION SO MADE IS WHOLLY UNCALLED 12 FOR AND DESERVES TO BE DELETED. THE A.O. HAS NOT G IVEN ANY REASON FOR NOT ACCEPTING THIS INVESTMENT SHOWN IN T HE REGULAR RECORDS. ACCORDINGLY, WE ORDER THE DELETION OF ADD ITION AND ALLOW GROUND NO 4 OF THIS APPEAL. 12.3 DEPARTMENTS GROUND NO. 1 IS NOT RELATED TO TH IS A.Y. THEREFORE, THIS GROUND IS DISMISSED IN LIMINE AS THIS GROUND D OES NOT ARISE FROM THE APPELLATE ORDER. 13. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED AND THAT OF THE REVENUE IS DISMISSED. ITA NO. 215/JU/2013 & 260/JU/2013 [A.Y. 2010-11] 14. THESE ARE CROSS APPEALS FILED AGAINST THE ORDER OF THE LD. CIT(A) DATED 22.2.2013 PERTAINING TO A.Y. 2010-11. 15. IN ASSESSEES APPEAL GROUND NO. 1 WAS NOT PRESS ED AND HENCE IT IS DISMISSED AS NOT PRESSED. GROUND NOS. 5, 6 & 8 ARE FORMAL GROUNDS WHICH DO NOT REQUIRE ANY SPECIFIC ADJUDICATION. GR OUND NO. 7 IS REGARDING CHARGING OF INTEREST. 13 16. GROUND NO. 2 OF THIS APPEAL RELATES TO CONFIRMA TION OF ADDITION OF RS. 1,65,400/- ON ACCOUNT OF ALLEGED UNEXPLAINED CA SH FOUND DURING SEARCH. 16.1 FACTS PERTAINING TO THIS GROUND ARE THAT CASH AMOUNTING TO RS. 1,65,400/- WAS FOUND, INVENTORISED AND RS. 1,25,000 /- WAS SEIZED FROM THE RESIDENTIAL PREMISES OF THE ASSESSEE. DURING T HE COURSE OF SEARCH PROCEEDINGS ON 15.12.2009, CASH AMOUNTING TO RS. 1, 65,400/- WAS FOUND OUT OF WHICH RS. 1,25,000/- WAS SEIZED. IT W AS STATED FROM THE SIDE OF THE ASSESSEE FAMILY THAT THIS AMOUNT IS VER IFIABLE FROM REGULAR BOOKS OF ACCOUNT BUT THE A.O. OBSERVED THAT DURING THE COURSE OF SEARCH THE ASSESSEE WAS NOT ABLE TO EXPLAIN THIS CA SH AND REGULAR BOOKS OF ACCOUNT WERE FOUND TO BE NOT PROPERLY AND REGULA RLY MAINTAINED. THEREFORE, HE HAS MADE IMPUGNED ADDITION OF RS. 1,6 5,400/-. THE LD. CIT(A) HAS ALSO CONFIRMED THIS ADDITION MORE OR LES S ON THE SAME REASONING. 16.2 BEFORE US, BOTH THE RIVAL REPRESENTATIVES REIT ERATED THEIR EARLIER STAND. AFTER CONSIDERING THE RIVAL SUBMISSIONS IN THE LIGHT OF OBTAINING FACTS, WE HAVE FOUND THAT COPY OF CASH BOOK FROM 11 .12.2009 TO 16.12.2009 HAD BEEN FILED BY THE ASSESSEE AS PART O F PAPER BOOK. NONE 14 OF THE ENTRIES WERE VERIFIABLE, NO EVIDENCE HAD BEE N GIVEN REGARDING THE TRANSACTIONS RECORDED IN THIS CASH BOOK. THE S TATEMENTS TAKEN DURING THE COURSE OF SEARCH AND SEIZURE OPERATION W ERE ALSO PERUSED. BALANCE ON THE DATE OF SEARCH WAS RS. 1,65,400/-. ALL THE ENTRIES ARE FOUND TO BE ON ACCOUNT OF PROFESSIONAL FEES RECEIVE D BY THE ASSESSEE. IN OUR CONSIDERED OPINION, CREDIT OF SUCH ENTRIES H AS TO BE GIVEN. ALL THE FAMILY MEMBERS OF THE ASSESSEE ARE ASSESSED TO TAX IN THEIR INDIVIDUAL CAPACITY. THE FAMILY OF THE ASSESSEE CO NSISTS OF HIMSELF, HIS WIFE, MOTHER AND CHILDREN AND FAMILY OF HIS BROTHER . IN SUCH CIRCUMSTANCES WE ARE SATISFIED THAT THE MEAGER SUM OF RS. 1,65,400/- FOUND AS CASH IS VERILY EXPLAINED. ACCORDINGLY, WE ORDER TO DELETE THIS ADDITION. 17. GROUND NO. 3 RELATES TO ADDITION OF RS. 35 LAKH S SUSTAINED IN RESPECT OF ALLEGED UNDISCLOSED INVESTMENT IN THE CO NSTRUCTION OF HOUSE PROPERTY. 17.1 FACTS RELATING TO THIS GROUND ARE THAT ON PERU SAL OF STATEMENTS AND OTHER DOCUMENTS SEIZED, THE A.O. FOUND THAT THE BOOKS OF ACCOUNT WERE NOT MAINTAINED ON A REGULAR BASIS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ALL THE RELEVANT DOCUMENTS W ERE ONCE AGAIN 15 SHOWED TO THE ASSESSEE AND SPECIFIC EXPLANATION WAS ASKED FOR REGARDING THIS EVIDENCE GATHERED DURING THE COURSE OF SEARCH. THE ASSESSEE FAILED TO OFFER ANY SPECIFIC EXPLANATION S UBSTANTIATED BY EVIDENCE REGARDING THE UNDISCLOSED INCOME REFLECTED IN THESE DOCUMENTS. SINCE HE DID NOT SURRENDER THE INVESTMEN T/INCOME AS PER THESE DOCUMENTS WHILE FILING THE RETURN THE A.O. MA DE ADDITION OF RS. 1,29,00,000/-. AS AGAINST THE ABOVE, THE ASSESSEE WENT IN APPEAL AND THE LD. CIT(A) HAS ALSO CONFIRMED THE SAME. 17.2 AFTER HEARING BOTH THE SIDES IN THE LIGHT OF A VAILABLE MATERIAL ON RECORD, WE HAVE FOUND THAT THE DETAILS OF ADDITION MADE BY THE A.O. TOTALING TO RS. 1,29,00,000/- IS AS UNDER: PARTICULARS AMOUN T [RS.] PURCHASE OF BUILDING MATERIAL FOR CONSTRUCTION OF RESIDENTIAL HOUSE JOINTLY OWNED WITH BROTHER 35,00,000/ - PURCHSE OF BUILDING MATERIAL FOR COMMERCIAL COMPLEX 35,00,000/ - CONSTRUCTION OF FARM HOUSE 25,00,000/ - SALE OF SHOPS IN KULDEEP VIHAR 4, 00,000/ - ADVANCE GIVEN FOR PURCHASE OF 15 BIGHA LAND 30,00,000/ - TOTAL 1,29,00,000/- 16 THUS FROM THE PERUSAL OF THE ABOVE DETAILS, IT BECO MES EVIDENTLY CLEAR THAT THE ASSESSEE HAS NOT RETRACTED THE SURRENDER. HOWEVER, CONTENTION OF THE ASSESSEE IS THAT THE CALCULATION OF SURRENDERED AMOUNT HAS NOT BEEN PROPERLY MADE BECAUSE SURRENDER HAS BEEN TAKEN IN RELATION TO INCOME EARNED BY THE ASSESSEE AND SE PARATE SURRENDER IN RELATION TO INVESTMENT/EXPENDITURE MADE HAS ALSO BE EN TAKEN. IT WAS ONLY CONTENDED THAT THE CORRECT WORKING OF UNDISCLO SED INCOME IS THEREFORE REQUIRED TO BE MADE BECAUSE THE CREDIT FO R THE INCOME DECLARED HAS TO BE GIVEN AGAINST THE INVESTMENT MAD E. THE ASSESSEE HAS SURRENDERED AN INCOME OF RS. 20 LAKHS IN A.Y. 2 007-08, RS. 13 LAKHS IN A.Y. 2005-06 AND 2006-07, RS. 30 LAKHS IN A.Y. 2 008-09 AND RS. 50 LAKHS IN A.Y. 2009-2010. BESIDES THE ABOVE, THE AS SESSEE HAS ALSO SURRENDERED INCOME IN EACH OF THE PRECEDING YEARS. THE ASSESSEE HAS DULY SHOWN RS. 35 LAKHS IN CONSTRUCTION OF HOUSE, R S. 35 LAKHS IN CONSTRUCTION OF COMPLEX AND RS. 25 LAKHS IN FARM HO USE AND HAD ONLY CLAIMED CREDIT OF THE INCOME AVAILABLE WITH HIM ON ACCOUNT OF VARIOUS INCOME SURRENDERED BY HIM IN THE VARIOUS YEARS PRIO R TO SEARCH. THIS CLAIM OF THE ASSESSEE IS QUITE JUSTIFIED AND AS PER LAW. THE ASSESSEE PRODUCED COMPLETE BOOKS OF ACCOUNT ALONGWITH FUND F LOW STATEMENT TO INDICATE THE AVAILABILITY OF FUND TO MAKE VARIOUS I NVESTMENTS AS SHOWN ABOVE. THE OBSERVATION OF THE A.O. AND SUSTENANCE OF PROTECTIVE 17 ADDITION IN THE HANDS OF THE ASSESSEE AND SUBSTANTI VE ADDITION IN THE HANDS OF THE FIRM M/S AYUSHI BUILDERS & DEVELOPERS IS NOT CORRECT. UNDISCLOSED INCOME WAS EARNED BY THE ASSESSEE AND U TILIZED IN THE INVESTMENT IN CONSTRUCTION AND SUCH INCOME DOES NOT RELATE TO THE FIRM. FUNDS ARE AVAILABLE WITH THE PARTNERS AND TH E CREDIT OF THE SAME IS SHOWN BY THEM TOWARDS INVESTMENT. SEPARATE ADDIT ION CANNOT BE MADE ON SUCH EXPENDITURE. FUNDS WHICH HAVE BEEN EA RNED BY PARTNERS IS FOUND TO BE NOT UTILIZED ELSEWHERE AND THEREFORE , CLAIM OF TELESCOPY CANNOT BE DENIED. SINCE ENTIRE SOURCE OF INVESTMEN T, CASH FLOW STATEMENT ETC. IS AVAILABLE, THERE CANNOT BE DOUBLE ADDITION. THIS IS SIMPLY AN UTILIZATION OF SUCH INCOME TOWARDS ACQUIS ITION OF NEW ASSETS AND UNDISCLOSED INCOME WOULD ALWAYS BE REPRESENTED BY SOME CASH, AS IT CANNOT VANISH IN AIR. THE ENTIRE ADDITION THERE FORE, DESERVES TO BE DELETED. WE ORDER TO DELETE THE SAME. 17.3 THE LD. A.R. HAS RELIED ON VARIOUS DECISIONS C ONTAINED IN WRITTEN SUBMISSIONS AND WE ALSO DRAW SUPPORT THEREFROM. IN CASE THE DEPARTMENT WANTS TO ESTIMATE THE INCOME OF THE ASSE SSEE ON THE BASIS OF SEIZED DOCUMENTS, THEN SUCH INCOME WOULD BE AVAI LABLE FOR MAKING INVESTMENT WHICH ARE ALSO ESTIMATED ON THE BASIS OF SOME SEIZED DOCUMENTS. THE ASSESSEE HAS ALREADY SURRENDERED RS . 2,31,22,799/- AS 18 UNDISCLOSED INCOME AGAINST THE ABOVE INCOME WHICH T RULY AND CORRECTLY COVERS THE MAXIMUM POSSIBLE INCOME WHICH THE ASSESS EE HAD EARNED IN THE VARIOUS YEARS UNDER CONSIDERATION RELATED TO SE ARCH ASSESSMENT. THERE IS NO REASON FOR THE INCOME DECLARED BY THE A SSESSEE IN VARIOUS YEARS SHOULD NOT BE ACCEPTED. THE IMPUGNED ADDITIO N HAS BEEN MADE SIMPLY ON THE GROUND THAT THERE WAS SEPARATE SURREN DER IN RELATION TO DIFFERENT ITEMS AT THE TIME OF SEARCH PROCEEDINGS. THE ASSESSEE WOULD NOT DISPUTE THESE INVESTMENTS. VARIOUS JUDICIAL PR ONOUNCEMENTS SUPPORT THE CASE OF THE ASSESSEE. ACCORDINGLY, WE ALLOW THIS GROUND OF APPEAL. 18. GROUND NO. 4 RELATING TO ADDITION OF RS. 1,75,4 29 SUSTAINED OUT OF ADDITION FOR HOUSEHOLD EXPENSES MADE BY THE A.O. AT RS. 3,90,634/- IS ALLOWED IN THE SAME MANNER AS WE ALLOWED IN THE EAR LIER YEAR OF THIS ASSESSEE AND ORDER TO DELETE THE IMPUGNED ADDITION. 19. GROUND NO. 5 STANDS DECIDED ALONGWITH GROUND NO . 3 OF THIS APPEAL AND IS PARTLY ALLOWED. 19 20. IN REVENUES APPEAL GROUND NO. 1 RELATES TO PAR T DELETION OF ADDITION OF RS. 2,08,853/- BEING THE TOTAL VALUE OF SILVER ARTICLES FOUND OUT OF TOTAL JEWELLERY OF RS. 11,06,079/- FOUND DUR ING SEARCH. TO THAT EXTENT, THE ASSESSEE COULD FURNISH DETAILS AND THE LD. CIT(A) DELETED THE ADDITION BY RELYING ON BOARD INSTRUCTION NO. 19 16 WHICH SPEAKS ABOUT GOLD ARTICLES AND NOT SILVER ARTICLES. 21. AFTER CONSIDERING THE RIVAL SUBMISSIONS, THIS S MALL QUANTITY OF SILVER CANNOT BE RULED OUT AS EXPENDITURE, WHICH WE RE FOUND FROM THE FAMILY OF SUCH A BIG MEANS. HOWEVER, THE RELIANCE O F THE LD. CIT(A) ON INSTRUCTION NO. 1916 MAY NOT BE CORRECT IN LAW. HO WEVER, THE SPIRIT OF THIS INSTRUCTION SHOULD BE GIVEN REGARD TO. ACCORD INGLY, WE DO NOT FIND ANY MERIT IN THIS GROUND AND DISMISS THE SAME. GROU ND NO. 1 STANDS DISMISSED. 22. GROUND NOS. 2 AND 3 ALREADY STAND DECIDED ALONG WITH THE GROUNDS OF ASSESSEE. IN THE SAME MANNER, THESE GRO UNDS STAND DISMISSED. 20 23. GROUND NO. 4 IS REGARDING DELETION OF ADDITION OF RS. 9,51,465/- MADE ON THE BASIS OF DIFFERENCE OF COST OF CONSTRUC TION. 23.1 THE LD. CIT(A) DELETED THE ADDITION OF RS. 9,5 1,465/- MADE ON ACCOUNT OF DIFFERENCE IN COST OF CONSTRUCTION ESTIM ATED IN THE VALUATION REPORT AS SHOWN BY THE ASSESSEE GROUP ON THE GROUND THAT THE SAME SHOULD BE TREATED AS SELF-SUPERVISION CHARGES IGNOR ING THE FACT THAT THE ASSESSEE HAD FAILED TO FILE ANY DETAILS OR EVIDENCE REGARDING CONSTRUCTION ACTIVITIES AND EXPENDITURE MADE RELATI NG TO THAT BEFORE THE A.O. AS WELL AS BEFORE THE DVO. 23.2 AFTER CONSIDERING THE RIVAL SUBMISSIONS WE HAV E FOUND THAT THE ASSESSEE IS ENGAGED IN CONSTRUCTION BUSINESS ONLY A ND THEREFORE, DEDUCTION FOR SELF SUPERVISION SHOULD BE ALLOWED TO THE ASSESSEE IN VIEW OF VARIOUS JUDICIAL PRONOUNCEMENTS IN THIS REG ARD. CONSIDERING THE FACT THAT NO EVIDENCE WAS FOUND DURING THE COURSE O F SEARCH PROCEEDINGS REGARDING SUPERVISION OF CONSTRUCTION O F THESE PROPERTIES HAVING BEEN OUTSOURCED, WE FIND NO FOLLY IN THE FIN DING OF THE LD. CIT(A) AND ACCORDINGLY DISMISS THIS GROUND OF THE A SSESSEE. 21 24. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED WHEREAS THE APPEAL OF THE DEPARTMENT ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH SEPTEMBER, 2013. SD/- SD/- [N.K. SAINI] [HARI OM MARATHA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 24 TH SEPTEMBER, 2013. VL/ COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ASSISTANT REGISTRAR