Omprakash M. Maheshwari, JAMNAGAR V. The Assistant Commissioner of Income Tax, Central Circle-1, RAJKOT-GUJARAT

ITA 215/RJT/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6676 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 9 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 18-05-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: KAMLESH RATHOD
• Keywords: Unexplained expenditure; Loose papers; Peak credit; Corroborative evidences

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT [ CONDUCTED THROUGH E-COURT AT AHMEDABAD ] BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER (1). . / I.T.A. NO.215/RJT/2015 (2). . / I.T.A. NO.262/RJT/2015 ( / ASSESSMENT YEAR : 2006-07) (1).SHRI OMPRAKASH M. MAHESHWARI, PROP. OF MS. MONARK METAL AGENCIES, K-1/79-4,GIDC, UDYOGNAGAR, JAMNAGAR(GUJARAT) (2).ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIR-1, RAJKOT / VS. (1).ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIR-1, 3 RD FLOOR, AMRUTA ESTATE RAJKOT (2) SHRI OM PRAKASH MAHESHWARI, JAMNAGAR. ./ ./ PAN/GIR NO. : ACFPM 2743 R ( / APPELLANTS ) .. ( / RESPONDENTS ) ASSESSEE BY : SHRI. KAMLESH RATHOD, A.R. REVENUE BY : SHRI. YOGESH PANDEY, CIT-D.R. ! ' # $ / DATE OF HEARING 30/11/2016 %& # $ / DATE OF PRONOUNCEMENT 28/02/2017 '( / O R D E R PER SHRI MAHAVIR PRASAD, JUDICIAL MEMBER : THESE CROSS APPEALS HAVE BEEN FILED BY THE APPEL LANT-ASSESSEE AND THE DEPARTMENT IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF ITA NOS.215 & 262/RJ T/2015 ACIT VS. SH.OM PRAKASH MAHESHWARI ASST.YEARS 2006-07 - 2 - INCOME TAX(APPEALS)-II, AHMEDABAD, DATED 12/03/2015 FOR THE ASSESSMENT YEAR (AY)2006-07. FOR THE SAKE OF CONVEN IENCE, WE WOULD LIKE TO DISPOSE ALTOGETHER BECAUSE SAME RELATED TO SIMILAR FACTS. 2. FIRST WE TAKE UP THE ASSESSEES APPEAL IN ITA NO.215/AHD/2015 FOR THE A.Y.2006-07. THE ASSESSEE HAS TAKEN FOLLOWI NG GROUNDS OF APPEAL:- (I) THE LD.CIT(A)- 11, AHMEDABAD HAS ERRED IN LAW AS W ELL AS ON FACTS WHILE MAKING ADDITION AMOUNTING TO RS.2,61,932/- WH ICH WAS EQUIVALENT TO PEAK WORKING OF USD 5,953/- ON THEN PREVAILING RATE AT RS.44/PER USD. (II) THE LD.CIT(A)- 11, AHMEDABAD HAS ERRED IN LAW AS WELL AS ON FACTS WHILE NOT CONSIDERING THE FACT THAT THE APPELLANT I S HAVING ONLY COMMISSION INCOME AS HE WAS ACTING AS COMMISSION AGENT. IN SPI TE OF THE FACT THAT DURING THE BLOCK PERIOD ALSO THE LEARNED ASSESSING OFFICER HAS ADDED THE COMMISSION INCOME TO THE INCOME OF THE APPELLANT. (III) THE LD.ACIT, CENTRAL CIRCLE-1, AS WELL AS THE CIT(A)-11 HAS ERRED IN LAW AS WELL AS ON FACTS IN NOT APPRECIATING THE FAC T THAT IF THE APPELLANT IS NOT ABLE TO EXPLAIN THE ENTRIES THEN ALSO THE PORTION O F THE COMMISSION INCOME IS REQUIRED TO BE ADDED AND NOT THE PEAK BALANCE OF AL L THE ENTRIES WHICH ARE UNEXPLAINED CAN BE ADDED AS INCOME OF THE APPELLANT . (IV) THE LD.ACIT, CENTRAL CIRCLE-1 AS WELL AS THE C IT(A)-11 HAS ERRED IN LAW AS WELL AS ON FACTS WHILE NOT APPRECIATING THE FACT THAT WORKING MADE ON PAGE IS IN COMPUTER SYSTEM AND IN USD AND APPELLANT IS ILLITERATE REGARDING USE OF COMPUTER AND HE TRANSACT IN INDIAN RUPEES AN D THUS ANY ADDITION WHICH IS NOT RELATED TO BUSINESS OF THE ASSESSEE ADDITION CANNOT BE MADE. 3. FACTS OF THE CASE IS THAT, DURING THE COURSE OF SEARCH OF THE RESIDENTIAL PREMISES OF THE ASSESSEE ON 23.08.2012, ONE ANNEXURE INVENTORIED AS ANNEXURE A-2 WAS FOUND AND SEIZED. P AGE NOS.111 AND 112 OF THIS ANNEXURE CONTAINED DETAILS OF VARIOUS C ASH TRANSACTIONS, WHICH ARE RECORDED IN US DOLLARS. THESE TRANSACTIONS WERE NOT RECORDED IN THE ITA NOS.215 & 262/RJ T/2015 ACIT VS. SH.OM PRAKASH MAHESHWARI ASST.YEARS 2006-07 - 3 - ASSESSEES BOOKS OF ACCOUNTS, AND HENCE, THE CASE O F THE ASSESSEE WAS REOPENED. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE LD.AR OF THE ASSESSEE SUBMITTED THAT THE PAPERS (IN QUESTION VIZ ., PAGE NO. 111 AND 112) ARE ACCOUNT OF ASSESSEES OVERSEAS SUPPLIER WH O HAD LEFT THEM AT HIS PLACE WHEN HE HAD COME TO MEET THE ASSESSEE, WHICH WAS FOUND FROM YOUR RESIDENCE DURING SEARCH. THE ASSESSEE ALSO SUB MITTED THAT, THEY PERTAIN TO TRANSACTIONS CARRIED OUT BY ONE M/S. AGA RWAL EXPORT A PARTNERSHIP FIRM (WHEREIN THE ASSESSEE WAS A PARTNE R) AND TRANSACTIONS OF HIS BROTHERS CONCERN M/S. DUDANI METAL AGENCIES. I N SUPPORT OF THE TRANSACTIONS PERTAINING TO THESE TWO ENTITIES, THE ASSESSEE PRODUCED PAYMENT ADVISE IN WHICH THE US DOLLAR AMOUNT GETS T ALLIED WITH THE NOTINGS MENTIONED ON THE SEIZED PAPERS. THE ASSESSE E ALSO PRODUCED COPY OF LEDGER ACCOUNT OF M/S. AGARWAL EXPORTS, ALONG WI TH A COPY OF BANK STATEMENT WHEREIN THE SAID EXPORT PROCEEDS ARE APPE ARING. FOR THOSE TRANSACTIONS WHICH ARE NOT REFLECTED IN THE BOOKS O F EITHER AGARWAL EXPORTS AND DUDANI METAL AGENCIES, THE ASSESSEE SUB MITTED THAT, THE SAME COULD NOT BE EXPLAINED AS SOME OVERSEAS SUPPLI ER HAD LEFT THIS PAPER AT THE RESIDENCE OF THE ASSESSEE. THE ASSESSEE ALSO TOOK THE PLEA THAT, THE PAPER IS COMPUTERIZED AND HAS BEEN PREPARED IN FORM OF US DOLLAR CURRENCY AND THAT IT IS AN ACCOUNT OF CREDIT AND DE BIT OF A BUSINESS DONE BE FOR SUPPLIER WITH THAT OF OTHER PARTIES AND THAT , AS PER HIS MEMORY THE ITA NOS.215 & 262/RJ T/2015 ACIT VS. SH.OM PRAKASH MAHESHWARI ASST.YEARS 2006-07 - 4 - PAPER PERTAINS TO S SUPPLIER/AGENTS WHO HAVE LEFT T HIS ACCOUNT WITH THE ASSESSEE. 5. THE REPLIES SUBMITTED BY THE ASSESSEE WAS NOT AC CEPTABLE BECAUSE, THE SSESSEE HAD CO-RELATED MOST OF THE TRANSACTIONS ON THE SAID PAPER TO TRANSACTIONS OF AGARWAL EXPORTS (A FIRM IN WHICH HE WAS A PARTNER) AND M/S. DUDANI METAL AGENCIES (A CONCERN OWNED BY HIS BROTHER). THEREFORE, IT IS CLEAR THAT THIS IS NOT A DUMB DOCU MENT. THE ASSESSEE HAD EXPLAINED ALL THE ENTRIES AS PER THESE PAPERS, EXCEPT CASH PAYMENT / EXPENDITURE. IF SOME TRANSACTIONS ON THIS PAPER ARE EXPLAINED, FOR THE REST OF THE TRANSACTIONS IT CANNOT BE SAID THAT THEY ARE ACCOUNTS OF SOME FOREIGN SUPPLIER, MISTAKENLY LEFT BEHIND. THE SEIZE D DOCUMENT/PAPER HAS TO BE READ AS A WHOLE AND NOT CONTEXTUALLY. THE ONU S IS UPON THE ASSESSEE TO EXPLAIN THE ENTIRE TRANSACTIONS, AS THE SAME WAS FOUND FROM HIS POSSESSION. THE TRANSACTIONS MENTIONED ON PAGE NO 1 11 AND 112 OF ANNEXURE A-2 CO-RELATES WITH THE TRANSACTIONS ON PA GE NO 6 OF THIS ANNEXURE. HENCE, THE NOTINGS ARE SEEN AT MORE THAN ONE PLACE. THEREFORE, THE ASSESSEE'S CONTENTION THAT THE PAPER BELONGED T TO SOME SUPPLIER, WHO MIGHT HAVE LEFT IT INADVERTENTLY AT YOUR PLACE, LAC KS CREDENCE. HENCE, VIDE THIS OFFICE SHOW CAUSE NOTICE DATED 7.3.2014, THE A SSESSEE WAS ASKED TO SHOW CAUSE AS TO WHY THE TOTAL OF TRANSACTIONS AMOU NTING TO USD L,L7,199/- SHOULD NOT BE TREATED AS UNEXPLAINED IN HIS HANDS AND ACCORDINGLY ADDED TO HIS TOTAL INCOME. ITA NOS.215 & 262/RJ T/2015 ACIT VS. SH.OM PRAKASH MAHESHWARI ASST.YEARS 2006-07 - 5 - 6. IN RESPONSE TO THE SHOW CAUSE NOTICE, THE ASSESS EE SUBMITTED TWO REPLIES THE GIST OF FIRST REPLY DATED 11.3.2014 IS AS UNDER:- A. VIDE PARA 2 AND 3 THE ASSESSEE EXPRESSED IGNORANCE AS TO HOW THE TOTAL OF USD 1,17,119/- WAS ARRIVED AT. ACCORDING T O THE ASSESSEE IT WAS USD 1,17,129/- AND THUS THERE IS TOTALING MISTA KE TO THE EXTENT OF USD 70. B. VIDE PARA 4 THE ASSESSEE CONTENDED THAT, THE EN TRY OF USD 1,00,000/-WAS INWARD REMITTANCE OF M/S. AGARWAL EXP ORTS, WHICH IS THROUGH NORMAL BANKING CHANNEL, IN SUPPORT OF WH ICH THE ASSESSEE PRODUCED A COPY OF BANK STATEMENT OF M/S. AGARWAL EXPORTS. C. VIDE PARA 5 AND 6, THE ASSESSEE CONTENDED THAT, THE NOTINGS ON THE SEIZED PAGES CONTAINS DEBIT AND CREDIT ENTRIES AND THEREFORE, AFTER DEDUCTING THE AMOUNT OF USD 1,00,000/- (BEING INWAR D REMITTANCE OF AGARWAL EXPORTS AS STATED SUPRA), THE PEAK OF THE BALANCE ENTRIES SHOULD BE WORKED OUT. THE ASSESSEE ALSO WORKED OUT THE PEAK OF SUCH ENTRIES OF BOTH THE SIDES AND CONTENDED THAT, ONLY USD 5,953/- SHOULD BE TREATED AS UNEXPLAINED. 7. THE GIST OF FIRST REPLY DATED 19.3.2014 IS AS U NDER:- A. VIDE PARA 2 THE ASSESSEE CONTENDED THAT, HE HAD TRI ED TO EXPLAIN MANY ENTRIES APPEARING ON THE SEIZED PAGES AND THE REMAINING ENTRIES DO NOT PERTAIN TO ANY OF HIS BUSINESS CONCE RNS. B. VIDE PARA 3, THE ASSESSEE CONTENDED THAT, WHEREVER THE WORD 'AGARWAL' OR 'DUDANI' IS MENTIONED, THESE TRANSACTI ONS ARE EXPLAINED WITH CORRESPONDING RECORDINGS IN THEIR RE SPECTIVE BOOKS OF ACCOUNTS, BANK STATEMENTS, PAYMENT ADVICE AND LE DGER ACCOUNTS. IT IS THEREFORE HIS CONTENTION THAT, WHATEVER REMAI NS TO BE EXPLAINED DOES NOT PERTAIN TO HIM. C. VIDE PARA 4 THE ASSESSEE CONTENDS THAT, THE RECORD INGS ARE NOT IN HIS HANDWRITING BUT THEY ARE COMPUTER PRINT OUTS. S INCE HE IS ILLITERATE IN OPERATING COMPUTERS, THEY DO NOT PERT AIN TO HIM. HE FURTHER SUBMITS THAT, HE IS DEALING ONLY IN INDIAN RUPEES AND ITA NOS.215 & 262/RJ T/2015 ACIT VS. SH.OM PRAKASH MAHESHWARI ASST.YEARS 2006-07 - 6 - THEREFORE THE RECORDING ON THESE TRANSACTIONS ARE I N USD AND HENCE, IT DOES NOT BELONG TO HIM. D. VIDE PARA 5 THE ASSESSEE SUBMITTED THAT, WHATEVER W ORKING IS MENTIONED ON THESE PAGES, THEY WERE LEFT BEHIND INA DVERTENTLY BY SOME FOREIGN SUPPLIER. 8. THE REPLY OF THE ASSESSEE HAS BEEN CAREFUL LY PERUSED BUT THE SAME IS NOT ACCEPTABLE DUE TO FOLLOWING REASONS. 9. IN ORDER TO PLACE THINGS IN ITS RIGHT PERSPECT IVE, COPIES OF PAGE NO 111, 112 AND 6 OF ANNEXURE A-2 ARE SCANNED AND PLAC ED HEREUNDER AS THE ENTRIES ARE ALMOST SIMILAR FIRSTLY, THE ASSESSEE HA D CO-RELATED MOST OF THE TRANSACTIONS ON THE SAID PAPER. THAT IS, THOSE TRAN SACTIONS CONTAINING THE WORD 'AGARWAL' OR 'DUDANI' HAS BEEN EXPLAINED SATIS FACTORILY WITH SUPPORTING EVIDENCED IN THE FORM OF LEDGERS, BANK S TATEMENTS, ETC. SUCH TRANSACTIONS PERTAINED TO AGARWAL EXPORTS (A FIRM I N WHICH THE ASSESSEE IS A PARTNER) AND M/S. DUDANI METAL AGENCIES (A CONCER N OWNED BY HIS BROTHER). THEREFORE, IT IS VERY CLEAR THAT THE ASSE SSEE'S CONTENTION THAT IT IS SOME WORKING LEFT BEHIND BY A FOREIGN SUPPLIER, IS NOT CORRECT. IT IS ALSO VERY CLEAR THAT THESE PAGES ARE NOT DUMB DOCUMENTS BUT THESE ARE ACTUAL TRANSACTIONS AND THE ASSESSEE IS HAVING FULL AND CO MPLETE KNOWLEDGE OF THESE TRANSACTIONS. BUT HE DELIBERATELY CHOSE NOT T O EXPLAIN THE SAME. IN FACT, HIS INITIAL PLEA WAS THAT THESE TRANSACTIONS WERE NOT AT ALL KNOW TO HIM. ONLY DURING THE COURSE OF ASSESSMENT PROCEEDIN GS, WHEN THE ENTRIES WITH NAMES OF 'AGARWAL EXPORTS' AND 'DUDANI' WERE A SKED, DID THE ASSESSEE COME FORWARD TO EXPLAIN THOSE ENTRIES PERT AINING TO THEM. FOR ITA NOS.215 & 262/RJ T/2015 ACIT VS. SH.OM PRAKASH MAHESHWARI ASST.YEARS 2006-07 - 7 - THE REMAINING ENTRIES, IT IS THE CONTENTION OF THE ASSESSEE THAT THEY DO NOT BELONG TO HIM. ANY PAPER HAS TO BE READ AS A WHOLE AND NOT CONTEXTUALLY, SUITING THE BENEFIT OF THE ASSESSEE. HERE, THE ASSE SSEE IS EXPLAINING MOST OF THE ENTRIES AND FOR THE BALANCE, HE IS MERELY FE IGNING IGNORANCE. THIS IS NOTHING A SIMPLE EVASIVE TACTIC DEPLOYED BY THE ASS ESSEE. 10. SECONDLY, THE ASSESSEE HAD EXPLAINED ALL THE EN TRIES AS PER THESE PAPERS, EXCEPT CASH PAYMENT / EXPENDITURE. THE ONUS IS UPON THE ASSESSEE TO EXPLAIN THE ENTIRE TRANSACTIONS, AS THE SAME WAS FOUND FROM HIS POSSESSION. IN FACT, THE TRANSACTIONS MENTIONED ON PAGE NO 111 AND 112 OF ANNEXURE A-2 CO-RELATES WITH THE TRANSACTIONS ON PAGE NO 6 OF THIS SAME ANNEXURE. HENCE, THE NETTINGS ARE SEEN AT MORE THAN ONE PLACE. IT CANNOT BE A COINCIDENCE THAT THE FOREIGN SUPPLIER H AS LEFT BEHIND HIS PAPER ON TWO OCCASIONS. IN FACT, VARIOUS OTHER PAPERS OF THIS ANNEXURE A-2 RESEMBLE SIMILAR TYPE OF ENTRIES. THEREFORE, IT CAN NOT BE SAID THAT THIS IS 'INADVERTENTLY LEFT OVER PAPER'. 11. THE ASSESSEE'S EXPLANATION FOR ENTRY OF USD 1,0 0,OOO/- IS NOT MATERIAL AS IT DOES NOT PERTAIN TO THE YEAR UNDER C ONSIDERATION. 12. THE ASSESSEE'S CONTENTION OF PEAK IS ALSO NOT ACCEPTABLE. THE ASSESSEE HAD ON HIS OWN, WORKED OUT THE PEAK OF USD 5953/-. HOWEVER, THE CONTENTION OF PEAK IS NOT ACCEPTABLE BECAUSE, T HERE IS CLEAR MENTION OF CASH OUTFLOW. THE NATURE OF ENTRIES APPEARING ON TH ESE PAPERS ALSO PRIMA ITA NOS.215 & 262/RJ T/2015 ACIT VS. SH.OM PRAKASH MAHESHWARI ASST.YEARS 2006-07 - 8 - FACIE REVEALS THAT THESE MAY NOT BE LEGAL OUTGOINGS , MADE THROUGH THE NORMAL RBI'S MANDATED CHANNELS. THEREFORE, WHEN THE NATURE OF EXPENSES AND VERIFICATION AS TO WHETHER THEY ARE LEGAL OR NO T, IS NOT CLEAR, SET OFF OF THE SAME AGAINST THE INCOMINGS, IS NOT POSSIBLE. HE NCE, THE ASSESSEE'S CONTENTION OF ADDING THE PEAK IS NOT ACCEPTABLE. 13. THE ASSESSEE CONTENDS THAT THE RECORDINGS ARE NOT IN HIS HANDWRITING BUT THEY ARE COMPUTER PRINT OUTS AND SI NCE HE IS ILLITERATE IN OPERATING COMPUTERS, THEY DO NOT PERTAIN TO HIM. HE FURTHER CONTENDS THAT, HE IS DEALING ONLY IN INDIAN RUPEES AND THEREFORE T HE RECORDING ON THESE TRANSACTIONS ARE IN USD AND HENCE, IT DOES NOT BELO NG TO HIM. THESE CONTENTIONS ARE NOT CORRECT BECAUSE, MANY PAGES OF THE SEIZED M ATERIALS ARE OF SIMILAR NATURE AND ARE COMPUTER PRINT OUTS O NLY. 14. IN VIEW OF THE ABOVE, IT IS HELD THAT THE CASH ENTRIES MENTIONED ON PAGE NO 111 AND 112 ARE ASSESSEE'S OWN TRANSACTIONS . ON THE BASIS OF SUPPORTING EVIDENCES GIVEN BY THE ASSESSEE IN RESPE CT OF CERTAIN TRANSACTIONS, IT IS CLEAR THAT THE ENTRIES ON THE L EFT HAND SIDE ARE INWARD REMITTANCES AND THE ENTRIES ON THE RIGHT HAND SIDE ARE OUTWARD PAYMENTS. THE ENTRIES ON THE RIGHT HAND SIDE, AS APPEARING ON PAGE NO. 111 ARE OUTWARD REMITTANCES PAID IN CASH. THE ENTRIES OF CA SH ON THE RIGHT HAND SIDE OF PAGE NO. 112 AND THAT OF CASH ON PAGE NO. 1 11 ARE SAME. THERE ARE SIX ENTRIES OF CASH OUTWARDS ON RIGHT HAND SIDE OF PAGE NO. 111. ONE IS MADE THROUGH BANK TITLED AS 'BANK T T SHREE 25-01' WHICH IS TREATED ITA NOS.215 & 262/RJ T/2015 ACIT VS. SH.OM PRAKASH MAHESHWARI ASST.YEARS 2006-07 - 9 - AS EXPLAINED. THE REMAINING FIVE ENTRIES OF 'CASH _T.T ARE UNEXPLAINED. THE TOTAL OF THE SAME COMES TO USD 37840. THESE ARE TREATED AS UNEXPLAINED EXPENDITURE IN THE HANDS OF THE ASSESSE E AND ADDED TO HIS TOTAL INCOME. THE EXCHANGE RATE OF USD PREVAILING A T THAT TIME WAS IN THE RANGE OF RS 44/USD. THEREFORE, THE EQUIVALENT OF US D 37840 IN INR WORKS OUT TO RS 16,64,960/-, WHICH IS ADDED TO THE ASSESSEE'S TOTAL INCOME. SINCE THE ASSESSEE HAS CONCEALED THE PARTICULARS OF HIS INCOME, PENALTY PROCEEDINGS U/S. 271(L)(C) ARE IN ITIATED. 15. ACCORDINGLY, TOTAL INCOME OR RS.1,66,64,960/- W HICH IS ACCORDING TO USD 37840 WAS ASSESSED BY THE AO. 16. AGAINST THE SAID ORDER ASSESSEE PREFERRED FIRST STATUTORY APPEAL BEFORE THE CIT(A) BUT LD.CIT(A) PARTLY ALLOWED THE APPEAL OF THE APPELLANT WITH FOLLOWING OBSERVATION THAT APPELLANT WAS NOT SURE ABOUT THE NATURE OF THE NOTINGS. HOWEVER, IN VIEW OF THE OVERALL FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO THE ALTERNATIVE SUBMISSION OF THE ASSESSEE TO ADOPT THEORY OF PEAK. IT WOULD BE IN TH E INTEREST OF JUSTICE TO RESTRICT DISALLOWANCE TO RS.2,61,932/- WHICH WAS EQ UIVALENT TO PEAK WORKING OF USD 5953/- ON THEN PREVAILING RATE AT RS .44/-. THUS, THE ASSESSEE GOT PART RELIEF. 17. AGAINST THE SAID ORDER OF THIS APPEAL BEFORE US IT IS ANTICIPATED FACT THAT A NOTING IN SEIZED PAPER WERE RELATED EXPLAINE D BY THE ASSESSEE WERE ITA NOS.215 & 262/RJ T/2015 ACIT VS. SH.OM PRAKASH MAHESHWARI ASST.YEARS 2006-07 - 10 - LEFT AT THE RESIDENCE BY THE SUPPLIER WHO CAME TO M EET THE ASSESSEE AND IT WAS FURTHER SUBMITTED THAT THE MAJORITY OF THE TRAN SACTIONS WERE CARRIED OUT BY THE M/S. AGARWAL. THE ASSESSEE WAS ALSO A PA RTNER AND OTHER BUSINESS CONCERN I.E. DUDANI METAL AGENCIES A PROPE RTY CONCERN OF HIS REAL PAPER AND RELATING OTHER NOTING WHICH WAS MENT IONED IN THE PAPER USD ASSESSEE EXPLAINED THAT IT WAS A CREDIT AND DEB IT ACCOUNT OF BUSINESS WITH OTHER PARTIES AND THE TRANSACTIONS PERTAINING TO THE ABOVE MENTION CONCERN BELONG TO THEM, THEREFORE, FULLY REFLECTED IN THE PEAKS OF THE ACCOUNT. HOWEVER, THE ASSESSEE HAS PARTLY OWNED UP THE PAPER BY EXPLAINING THE SEIZED DOCUMENT AND HAS EXPRESSED IN ABILITY TO EXPLAIN THE REST OF SEIZED DOCUMENT SUCH AN APPROACH IS NOT PER MISSIBLE IN LAW. 18. SIMILARLY MATTER WAS ADJUDICATED FRIENDS OVERSE AS PVT. LTD. VS. COMMISSIONER OF INCOME-TAX ITR NO.269 & ITR NO.268 WAS DEALT BY THE HONBLE DELHI HIGH COURT. IN THIS CASE THE ASSE SSEE WAS ENGAGED IN THE EXPORT OF HANDICRAFTS GOODS. IN SEARCH AND SEIZ URE OPERATIONS CONDUCTED IN THE BUSINESS PREMISES OF THE ASSESSEE AND RESIDENTIAL PREMISES OF ITS DIRECTORS ONE OF THE DOCUMENTS CONT AINING DETAILS OF CERTAIN CASH TRANSACTIONS WAS FOUND AND SEIZED. THE REFORE, THE ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 158BC OF THE IN COME-TAX ACT, 1961, DIRECTING IT TO FILE ITS RETURN FOR THE BLOCK PERIO D ENDING NOVEMBER 17, 1995. DURING THE COURSE OF THE ASSESSMENT PROCEEDIN GS, THE ASSESSEE WAS ASKED TO EXPLAIN THE ENTRIES REGARDING THE CASH TRA NSACTIONS REFLECTED IN THE SAID DOCUMENT. NOT BEING SATISFIED WITH THE EXP LANATION FURNISHED BY ITA NOS.215 & 262/RJ T/2015 ACIT VS. SH.OM PRAKASH MAHESHWARI ASST.YEARS 2006-07 - 11 - THE ASSESSEE, THE ASSESSING OFFICER ADDED THE ENTIR E AMOUNT OF RS.14,88,754/- REFLECTED IN THE SAID DOCUMENT IN RE SPECT OF CERTAIN TRANSACTIONS AS THE UNDISCLOSED INCOME OF THE ASSES SEE. THE TRIBUNAL DISMISSED THE APPEAL FILED BY THE ASSESSEE ON APPEA L BEFORE HONBLE JURISDICTIONAL HIGH COURT, IT WAS HELD THAT THE FIN DINGS OF THE TRIBUNAL WERE THAT IT WAS NOT THE CASE OF THE ASSESSEE THAT THE DOCUMENT WAS NOT RECOVERED FROM ITS BUSINESS PREMISES OR THAT IT DID NOT BELONG TO IT OR THAT THE ENTRIES WERE NOT MADE BY ITS EMPLOYEE. THE ASSE SSEE HAD CATEGORICALLY ACCEPTED THAT THE ENTRIES WERE MADE B Y ITS ACCOUNTANT FOR SOME OTHER PURPOSE. THE ASSESSEE HAD ALSO FILED AN AFFIDAVIT OF THE ACCOUNTANT WHEREIN IT WAS STATED THAT THE FIGURES M ENTIONED ON THE DOCUMENT WERE IMAGINARY FIGURES. THIS EXPLANATION W AS AGAIN RETRACTED AND ONE G WAS PRODUCED TO OWN THE ENTRIES WHICH ACC ORDING TO G WERE AGAIN TYPED BY THE ASSESSEES ACCOUNTANT. THE TRIBU NAL FOUND THAT THE ASSESSEE HAD KNOWINGLY AND ADMITTEDLY GIVEN DIFFERE NT EXPLANATIONS IN RELATION TO THE SAME DOCUMENT. THE ASSESSEE HAD NOT ONLY OWNED UP THE DOCUMENT BUT HAD ALSO EXPLAINED THE CHEQUE TRANSACT IONS REFLECTED IN THE LOWER PORTION OF THE VERY SAME DOCUMENT. THEREFORE, THE TRIBUNAL HAD RIGHTLY INVOKED SECTION 158BC IN THE CASE OF THE AS SESSEE AND ITS VIEW WAS BASED ON CLEAR PROVISIONS OF LAW. 19. WE ARE JUST FAILED TO UNDERSTAND THAT THERE WER E PAPERS SEIZED AND APPELLANT/ASSESSEE IS ACCEPTING ITS ENTRIES IN PART S AND ASSESSEE WAS NOT ACCEPTING THE ENTRIES IN TOTALITY. IN OUR OPINION, IT IS NOT A JUSTIFIABLE AND ITA NOS.215 & 262/RJ T/2015 ACIT VS. SH.OM PRAKASH MAHESHWARI ASST.YEARS 2006-07 - 12 - ACCEPTABLE EXPLANATION GIVEN BY THE ASSESSEE/APPELL ANT. THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY THE L D.CIT. FOLLOWING THE RATIO OF THE FRIENDS OVERSEAS PVT. LTD.(SUPRA) WE A RE NOT INCLINED TO INTERFERE IN THE ORDER PASSED BY THE LD.CIT(A). 20. IN THE RESULT THE PRESENT APPEAL IS DISMISSED. 21. NOW WE TAKE UP THE REVENUES APPEAL IN ITA NO. 262/AHD/2015 FOR ASSESSMENT YEAR 2006-2007. THE REVENUE HAS TAKE N THE FOLLOWING GROUNDS. (I) LD.CIT(A) HAS ERRED ON FACTS AND CIRCUMSTANCES OF T HE CASE IN DELETING THE UNEXPLAINED PAYMENTS. (II) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD.CIT(A) HAS OUGHT TO HAVE UPHELD THE ORDER OF THE AO. 22. NO SPECIFIC ARGUMENTS ARE ADVANCED BEFORE US A S TO HOW PEAK THEORY IS NOT APPLICABLE ON THE FACTS OF THIS CASE. AS LD. CIT(A) RIGHTLY NOTES, TO TAKE INTO ACCOUNT SEIZED PAPER IN TOTALIT Y, PEAK AMOUNT IS REQUIRED TO BE ADDED BACK. ONCE WE DO SO TO THAT EX TENT, UNEXPLAINED PAYMENTS STAND REDUCED FROM THE UNEXPLAINED RECEIPT S. WE UPHOLD THIS APPROACH AND DECLINE TO INTERFERE IN THE MATTER. ITA NOS.215 & 262/RJ T/2015 ACIT VS. SH.OM PRAKASH MAHESHWARI ASST.YEARS 2006-07 - 13 - 23. IN THE RESULT APPEAL OF THE DEPARTMENT IS ALSO DISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 28/02/2017 SD/- SD/- (PRAMOD KUMAR) ( MAHAVIR PRASAD ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 28/02/2017 PRITI YADAV, SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ) $ *$ / CONCERNED CIT 4. *$ ( ) / THE CIT(A)-II, AHMEDABAD. 5. +!, - .$. , , / DR, ITAT, RAJKOT 6. - /0 1 ' / GUARD FILE. / BY ORDER, +$ .$ //TRUE COPY// / ! '#$ ( DY./ASSTT.REGISTRAR) ! $%! & , / ITAT, RAJKOT TRUE COPY