ACIT, New Delhi V. Sh. Anil Arora, New Delhi

ITA 2293/DEL/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81566 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 16-07-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 06-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNIL BAJPAI
• Keywords: Unexplained investment; Unexplained expenditure; Gift; Business income; Income from undisclosed sources; Search and seizure; Fair market value; Valuation report; Documents seized
• Section: 153A; 131; 69; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F, NEW DELHI) BEFORE SHRI I. C. SUDHIR, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NOS.2293 /DEL/2011 ASSESSMENT YEAR : 2008-09 ACIT, CC-2, VS. ANIL ARORA, NEW DELHI B-4/48, PASCHIM VIHAR, NEW DELHI GIR / PAN:AAAGPA1400L I.T.A.NO. 2295/DEL/2011 (ASSESSMENT YEAR 2008-09) ACIT, CC-2, VS. RAKESH KUMAR ARORA, NEW DELHI B-4/48, PASCHIM VIHAR, NEW DELHI GIR / PAN:AAFPA7076H (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUNIL BAJPAI, CIT DR RESPONDENT BY : SHRI SALIL KAPOOR ADV.& SHRI ANIL JAIN, CA ORDER PER T.S. KAPOOR, AM: THESE ARE TWO APPEALS FILED BY THE REVENUE AGAINST SEPARATE ORDERS OF LD. CIT(A) BOTH DATED 17.02.2011. GROUNDS NO.1, 2 & 3 OF BOTH THE APPEALS ARE SIMILAR IN FACTS AS WELL AS IN AMOUNTS. IN GRO UNDS NO.1 & 2 IN BOTH THE APPEALS, THE REVENUE IS AGGRIEVED WITH THE ACTION O F LD. CIT(A) BY WHICH HE HAD DELETED THE ADDITION OF RS.71,93,200/- MADE BY THE ASSESSING OFFICER U/S 69B OF THE INCOME-TAX ACT, 1961. VIDE GROUND NO.3, THE REVENUE IS ITA NOS.2293 & 2295/DEL/2011 2 AGGRIEVED BY THE ACTION OF LD. CIT(A) BY WHICH HE H AD DELETED THE ADDITION OF RS.79,800/- MADE BY THE ASSESSING OFFICER ON ACC OUNT OF FAIR RENTAL VALUE. VIDE GROUND NO.4 IN I.T.A.NO. 2293/DEL/2011, THE RE VENUE IS AGGRIEVED BY THE ACTION OF LD. CIT(A) BY WHICH HE HAD DELETED TH E ADDITION OF RS.3,22,200/- MADE BY THE ASSESSING OFFICER ON ACCO UNT OF UNEXPLAINED CASH FOUND AT THE RESIDENCE OF THE ASSESSEE DURING THE S EARCH. VIDE GROUND NO.4 IN I.T.A.NO. 2295/DEL/201, THE REVENUE IS AGGRIEVED WITH THE ACTION OF LD. CIT(A) BY WHICH HE HAD DELETED AN ADDITION OF RS.2, 66,667/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED EXPENDI TURE INCURRED DURING FOREIGN TRAVEL. GROUNDS NO.5 & 6 IN BOTH THE APPEA LS ARE GENERAL IN NATURE AND DO NOT REQUIRE ANY ADJUDICATION. 2. THE BRIEF FACTS OF THE CASE ARE THAT SEARCH AND SEIZURE ACTION U/S 132 OF THE INCOME-TAX ACT, 1961 WAS CARRIED OUT IN WINGS P HARMACEUTICALS PVT. LTD. GROUP OF CASES ON 14.02.2008 AND THE ASSESSEES WERE ALSO COVERED UNDER SEARCH AND ACCORDINGLY PROCEEDINGS WERE INITIATED U /S 153A OF THE ACT. DURING ASSESSMENT PROCEEDINGS, BOTH ASSESSEES WERE CONFRONTED WITH THE FOLLOWING SIMILAR QUERIES: 'YOU HAVE PURCHASED A PROPERTY FROM SH. MUNISH SAC HDEVA S/O LATE SH. A.S. SACHDEVA OF 10/78, PUNJABI BAGH ( WEST), NEW DELHI. SALE DEED WAS EXECUTED ON 19.04.2007 FOR RS.90,00,0 00/- ON WHICH STAMP DUTY OF RS.7,20,000/- WAS PAID. THIS IS A PRI ME LOCATION PROPERTY LOCATED IN MOST POSH AREA OF PUNJABI BAGH HAVING MUCH HIGHER MARKET VALUE. THIS PROPERTY IS MEASURING 227 5.92 SQ. YARDS AND YOU ARE OWNER OF 1/4 TH SHARE IN THIS PROPERTY. THOUGH REGISTRATION DEED FOR THIS PROPERTY WAS EXECUTED AFTER ABOUT MOR E THAN THREE MONTHS OF PURCHASE OF PROPERTY BY YOUR CO-OWNERS AN D BROTHERS SH. K.K. ARORA AND R.P. ARORA, FOR RS.1,05,00,000/- EAC H, YET AFTER THREE MONTHS, YOUR REGISTERED DEED VALUE FOR SAME SHARE I N THE SAME PROPERTY HAS BEEN TAKEN ON THE LOWER SIDE THAN THE DEED EXECUTED ON 22.01.2007. DIFFERENCE IN THE VALUE OF REGISTRATION DEED EXECUTED FOR YOUR EQUAL SUCH SHARE WORKS OUT TO RS.15,00,000/- ( RS.1,05,00,000/- ITA NOS.2293 & 2295/DEL/2011 3 RS.90,00,000/-). THIS DIFFERENCE OF RS.15,00,000/- IS FOUND UNEXPLAINED AND APPARENTLY YOUR UNDISCLOSED INVESTM ENT MADE IN THIS PROPERTY. YOU ARE REQUESTED TO PRODUCE YOUR SELLER FOR EXAMINATION, YOU ARE, THEREFORE, REQUESTED TO 'EXPLAIN WHY THE S AME AMOUNT OF RS.15, 00,000/- SHOULD NOT BE ADDED TO YOUR INCOME APART FROM THE INCLUSIVE OF TOTAL SUPPRESSED INVESTMENT MADE BY YO U IN THIS PROPERTY AS MAY BE FOUND BY THE DEPARTMENT DURING COURSE OF THIS PROCEEDING. 3. IN RESPONSE, THE ASSESSEES FURNISHED SIMILAR REP LIES WHICH IS REPRODUCED AS UNDER: 'WE HAVE PURCHASE A UNDIVIDED PROPERTY NO. 10/78, P UNJABI BAGH (WEST) FOR A TOTAL SALES CONSIDERATION OF RS.3,90,0 0,000 FROM SH. S. K. SACHDEVA, DIRECTOR OF M/S. SACHDEVA PROMOTERS & PRO PERTIES PVT. LTD. AND SH. MANISH SACHDEVA. THIS PROPERTY HAD A D ISPUTE SINCE 1987 BETWEEN MIS. SACHDEVA PROMOTERS & PROPERTIES PVT. L TD. AND THE FAMILY OF SH. BHAGWANT SINGH & OTHERS WHO WERE THE OWNERS OF THE SAID PROPERTY AT THAT TIME IN THE YEAR 1987. SH. BH AGWANT SINGH & OTHERS HAD AN AGREEMENT TO SELL WITH M/S. SACHDEVA PROMOTERS & PROPERTIES PVT. LTD. BUT LATER ON THIS DEAL WAS NOT EXECUTED BY THE FAMILY OF SH. BHAGWANT SINGH & OTHERS. IN 1989 MIS. SACHDEVA PROMOTERS & PROPERTIES PVT. LTD. FILED A SUIT IN TH E HONOURABLE DELHI HIGH COURT VIDE SUIT NO. 3061189 THE SAME SUIT WAS PENDING TILL 2002. WE ENTERED IN AN AGREEMENT CUM MOU WITH S. K. SACHD EVA, DIRECTOR OF M/S. SACHDEVA PROMOTERS & PROPERTIES PVT. LTD. F OR THE SETTLEMENT OF THE DISPUTE WITH THE FAMILY OF SH. BHAGWANT SING H & OTHERS. OUR FAMILY HAD AN INFLUENCE ON THE FAMILY OF SH. BHAGWA NT SINGH & OTHERS. MR. MANISH SACHDEVA IS A STEP BROTHER OF MR. S. K. SACHDEVA WAS IN POSSESSION OF THE PROPERTY AND THEY ALSO HAVE A DIS PUTE REGARDING THE OWNERSHIP AND THE POSSESSION. BOTH SACHDEVA BROTHER S WERE GOOD FRIEND OF MINE. IT WAS ALSO MADE AN UNDERSTANDING B ETWEEN THE BOTH BROTHERS AND US, IF WE MADE AN EFFORT TO RESOLVE TH E DISPUTE BY USING MY INFLUENCE. THERE WAS AN AGREEMENT CUM MOU MADE B ETWEEN MYSELF AND MR. S.K. SACHDEVA DIRECTOR OF SACHDEVA P ROMOTERS AND PROPERTIES LTD. FOR SELLING HIS PART OF SHARE PROPE RTY FOR RS. 210 LACS AND DECIDED THAT THE PAYMENT TO BE MADE IF ANY TO M R. MUNISH SACHDEVA WILL BE APART FROM THIS AND SHALL BE MADE BY US DIRECTLY TO MR. MUNISH SACHDEVA. WE MADE A CONSOLIDATED DEAL OF UNDIVIDED ABOVE SAID PROPERTY FROM BOTH THE BROTHERS AT A TOT AL AMOUNT OF RS. ITA NOS.2293 & 2295/DEL/2011 4 3,90,00,000 IN THE YEAR 2003. AFTER OUR EFFORTS A S ETTLEMENT DEED WAS SIGNED BETWEEN TWO BROTHERS ON DT. 20.06.2003. IN L IGHT OF THESES ALL ABOVE EFFORTS FOR RESOLVING ALL THE DISPUTES BETWEE N THE TWO SACHDEVA BROTHERS AND SUBSEQUENTLY IN THE MONTH OF OCTOBER-2 005 WITH THE FAMILY OF SH. BHAGWANT SINGH & OTHERS, IT WAS MUTUA LLY DECIDED BETWEEN THE TWO SACHDEVA BROTHERS THAT M/S. SACHDEV A PROMOTERS & PROPERTIES PVT. LTD. WILL MAKE A PAYMENT OF RS. 1,2 7,50,000 AT THE TIME OF SALE DEED IN FAVOUR OF SACHDEVA BROTHERS BY THE FAMILY OF SH. BHAGWANTI SINGH & OTHERS. MR. MANISH SACHDEVA HAD M ADE A PAYMENT OF RS. 1,00,00,000 AT THE TIME OF REGISTRAT ION OF SALE DEED IN HIS FAVOUR. SUBSEQUENTLY AT THE TIME OF SALE MIS. S ACHDEVA PROMOTERS & PROPERTIES PVT. LTD. WILL RECEIVE RS. 30,00,000 E XTRA THAN MR. MANISH SACHDEVA. THE PORTION OF PLOT IN POSSESSION OF MR. MANISH SACHDEVA ADJOINING TO A PROPERTY NO. 8/78 WHICH IS HAVING MULTIPLE AND MULTISTORY FLATS AND LOCATION IS COMPARATIVELY INFERIOR AS COMPARED TO THE PORTION IN POSSESSION OF M/S. SACHD EVA PROMOTOERS & PROPERTIES PVT. LTD. THAT IS WHY I HAD PAID PROPO RTIONATELY RS. 15 LACS LESS T MR. MANISH SACHDEVA AS A PART OF FULL D EAL. HENCE I HAVE TO STATE THAT I HAVE NOT MADE ANY UNEX PLAINED AND UNDISCLOSED INVESTMENT IN THIS PROPERTY OF RS. 15 L ACS. AS ON TODAY THE SELLER IS NOT IN TOUCH WITH ME AND I DON'T KNOW HIS PRESENT WHERE ABOUT EVEN THAN I WILL TRY ME LEVEL BEST TO PRODUCE HIM BEFORE YOUR GOODSELF. I REQUEST YOUR GOODSELF TO ISSUE SUMMON U /S 131 FOR EXAMINING THE SELLER'. 4. THE ASSESSING OFFICER AFTER CONSIDERING THE SUBM ISSIONS OF THE ASSESSEE, MADE AN ADDITION OF RS.71,93,200/- IN BOT H CASES BY HOLDING AS UNDER: I HAVE CONSIDERED THE FACTS AND CIRCUMSTANCE OF TH E CASE AND REPLY FILE BY THE ASSESSEE. THE CONTENTION OF THE A SSESSEE IS CONTRADICTORY. IN FIRST PART OF THE LETTER IT HAS B EEN STATED BY THE ASSESSEE THAT HE WAS HAVING GOOD RELATIONS AND HAVI NG INFLUENCE ON MR. MUNISH SACHDEVA AND THE OTHER PARTY BHAGWANT SI NGH & OTHER AND ACTED AS ARBITRATOR TO SETTLE THE DISPUTE AMONG THEM. HOWEVER, IN THE CONCLUDING PART, IT HAS BEEN STATED THAT SELLER I.E. MUNISH SACHDEVA IS NOT IN TOUCH WITH THE ASSESSEE AND HIS PRESENT ADDRESS ETC ITA NOS.2293 & 2295/DEL/2011 5 IS NOT KNOWN. FURTHER, IT HAS BEEN CONTENDED THAT T HE PORTION OF PLOT IN POSSESSION OF MUNISH SACHDEVA IS COMPARATIVELY INFE RIOR AND BECAUSE OF WHICH CONSIDERATION OF LESSER AMOUNT IN COMPARIS ON TO OTHER BUYERS WERE MADE BUT IT HAS ALSO BEEN STATED IN THE SAME REPLY THAT MUNISH SACHDEVA WAS IN POSSESSION OF ENTIRE PROPERT Y. THE CONTENTION OF THE ASSESSEE IS CONTRADICTORY AND FULL OF LOOP H OLES. THE ASSESSEE AT HIS OWN CONVENIENCE TRIES TO MOULD THE FACTS TO COV ER-UP THE WHOLE ISSUE BY FABRICATING FACTS WHICH ARE NOT SUPPORTED BY ANY DOCUMENTARY EVIDENCE WHATSOEVER. ACCORDINGLY, THE C ONTENTIONS OF THE ASSESSEE ARE NOT FOUND TO BE JUSTIFIABLE AND THEREF ORE REJECTED. THE PROPERTY IS A PRIME LOCATION PROPERTY LOCATED IN MO ST POSH AREA OF PUNJABI BAGH, NEW DELHI HAVING MUCH HIGHER MARKET V ALUE THAN SHOWN BY THE ASSESSEE. THIS PROPERTY IS MEASURING 2 275.92 SQ. YARDS AND THE ASSESSEE IS THE OWNER OF 1I4TH SHARE IN THI S PROPERTY ALONG WITH HIS THREE BROTHERS WHO ARE OWNING THE REST OF THE PROPERTIES IN EQUAL ONE FOURTH SHARE EACH. 4.2 IT IS FOUND THAT THE ASSESSEE'S CO-OWNERS (BROT HERS) SH. K.K. ARORA AND R.P. ARORA HAD PAID RS.1,05,00,000/- EACH AND THEIR REGISTRATION DEED FOR THIS PROPERTY WAS EXECUTED ON 22.01.2007 FOR THEIR PART OF 1I4TH SHARE. BUT THE ASSESSEE FOR HIS 1/4TH SHARE IN SAME PROPERTY MADE REGISTRATION ON 19.04.2007 AFTER ABOU T MORE THAN THREE MONTHS AT ONLY, RS.90,00,0001- FOR PURCHASE OF EQUA L SHARE IN THIS PROPERTY. DIFFERENCE IN THE DEED AMOUNT EXECUTED ON 22.01.2007 AND 19-04-07, WAS RS 15,00,000/-. THE PERSON WHO SOLD T HE PROPERTY TO THIS ASSESSEE WAS IN POSSESSION OF THE ENTIRE PROPE RTY, AND WAS IN A BETTER POSITION TO DECIDE THE CONSIDERATION. NO PRU DENT PERSON WILL SELL PART OF THE SAME PROPERTY AFTER THREE MONTHS A T SUBSTANTIALLY LOWER PRICE WHICH IS LOWER BY RS.15,00,000/- THAN T HE EARLIER DEED EXECUTED IN JANUARY, 2007. DIFFERENCE IN THE VALUE OF REGISTRATION DEEDS EXECUTED FOR ASSESSEE'S EQUAL 1/4TH SHARE WOR KS OUT TO RS.15,00,0001- (RS.1,05,00,000- RS.90,00,000). THIS DIFFERENCE OF RS.15,00,000/- IS FOUND UNEXPLAINED WHICH IS NOTHIN G BUT THE UNACCOUNTED PAYMENT MADE BY THE ASSESSEE FOR CONSID ERATION OF THIS PROPERTY. THE EXPLANATION OF THE ASSESSEE IN THIS R EGARD IS UNSUBSTANTIATED AND NOT ACCEPTABLE. 4.3 FURTHER, DOCUMENTARY EVIDENCES HAVE BEEN FOUND DURING COURSE OF SEARCH OPERATION IN RESPECT OF UNACCOUNTE D CONSIDERATION ITA NOS.2293 & 2295/DEL/2011 6 DECIDED AND PAID BY THE ASSESSEE IN RESPECT OF THE PROPERTY TRANSACTION DECIDED/EXECUTED BY THE ASSESSEE AND FA MILY AT BADDI HP, WHICH HAS BEEN DISCUSSED SEPARATELY IN THE CASE OF ASSESSEE IN THIS ORDER. HOWEVER THE SAME IS MENTIONED HERE ONLY TO P OINT OUT THAT THE ASSESSEE AND HIS FAMILY MEMBERS ARE FOUND TO HAVE B EEN INVESTING THEIR UNACCOUNTED INCOME IN PROPERTIES. I T WAS ALSO FOUND THAT THE ASSESSEE IS TRANSFERRING THE IMMOVABLE PRO PERTIES FOR UNACCOUNTED CONSIDERATION ALSO. 4.4. IN THIS RESPECT INFORMAL AGREEMENT ENTERED IN TO BY THE ASSESSEE FOR PLOT NO.50 OF KAILASH CO-OP HOUSING BUILDING SO CIETY LTD. KAILASH VIHAR, BADDI AS PER PAGE NO.9 OF ANNEXURE A-3, ANNE XED AS PER ANNEXURE I, IS REPRODUCED AS UNDER: 15 LAC PLOT AT 50 KAILASH VIHAR I IST JANUARY 08 BAYANA 25% 2 FINAL PAYMENT 28 FEB 2008 3 WHITE 4 LAC SD. SIGNED BY SHRI R.K. ARORA (ARVAINDER JEET SINGH) ON 27.12.2007 9815609506 SD./- SD./- (JAPANJEET SINGH) (SATBEER SINGH) 9815608915 921633711 AS PER THIS DOCUMENT THE ASSESSEE HAS DECIDED THE S ALE/PURCHASE CONSIDERATION OF THIS PLOT AT RS.15 LACS WHEREAS TH E ACCOUNTED COMPONENT WAS DECIDED AT RS 4 LACS ONLY ON 27-12-20 07. THE PAPER CLEARLY MENTIONS TOTAL COST AS RS.15 LACS AND 'WHIT E' AS RS.4 LACS. IT IS COMMON KNOWLEDGE THAT 'WHITE' IN ORDINARY BUSINESS COMMUNICATION REFERS TO THE ACCOUNTED TRANSACTIONS. THIS PAPER IS SIGNED BY THE ASSESSEE AND THREE OTHER PERSONS AS APPEARED FROM T HEIR SIGNATURES. THEY ARE SAPAN JEET SINGH, MR. ARWIND JEET SINGH AN D MR SATVEER SINGH. IT IS MENTIONED IN THIS DOCUMENTS THAT THE F INAL PAYMENT WAS TO BE MADE BEFORE 28-02-2008, WHICH MEANS PERIOD OF FI NAL PAYMENTS WAS DECIDED IN TWO MONTHS. ON THE BASIS OF THIS PAPER, ADDITIONS HAVE BEEN MADE IN THE CASE OF THE ASSESSE E IN A Y 2005-06 & 2006-07. ITA NOS.2293 & 2295/DEL/2011 7 4.5 FROM THE SEIZED MATERIAL IN THE CASE OF THE AS SESSEE IT IS FOUND THAT M/S. EMPIRE CASTINGS PVT. LTD., THE COMPANY WA S TAKEN OVER BY THE ASSESSEE AND HIS BROTHERS ON 23.07.2004. AS PER PAGE 4 TO 8 OF ANNEXURE A-4 OF WB-L (COPY ENCLOSED TO THIS ORDER), SEIZED DURING THE COURSE OF SEARCH, THE ASSESSEE HAS DONE VALUATION O F THE SAID COMPANY AT RS.1,15,00,000/- (AT PAGE NO 5). HOWEVER ON THIS PAGE ONLY THE PAYMENT THROUGH CHEQUE WAS MENTIONED AT RS 37,11,00 0/-. FURTHER PAYMENT OF RUPEES ONE LAC HAS ALSO BEEN PAID IN CAS H AS PER PAGE NO. 5 (ENCLOSED AS ANNEXURE II) WHICH IS REPRODUCED AS UNDER: TOTAL VALUE 11500000 LESS PAYMENT BY CHEQUE 3711000 LESS CASH GIVEN 100000 LESS WITHHELD CASH 7689000 THE ASSESSEE HAS ALSO CALCULATED CASH BALANCE GIVEN FOR THE COMPANY AMOUNTING RS.77,89,0001-. IT IS THE FACT THAT THE A SSESSEE HAS ACQUIRED THE SAID COMPANY AND PAID CONSIDERATION FOR THE SAM E OUT OF BOOKS AMOUNTING RS 77,89,000/-. ON THE BASIS OF THIS DOCU MENT, SEPARATE ADDITION HAS BEEN MADE IN THE CASE OF THE ASSESSEE IN A Y 2005-06. 4.6 IN THIS WAY IT IS CLEAR FROM THE ABOVE THAT THE ASSESSEE IS INVESTING HIS UNACCOUNTED INCOME IN THE IMMOVABLE P ROPERTIES AND IS HABITUAL OF USING THE UNACCOUNTED CASH IN SALE/PURC HASE OF IMMOVABLE PROPERTIES AND INVESTMENT. UNDER THE FACTS AND CIRC UMSTANCES AS DISCUSSED IN DETAIL, SURROUNDED FACTS AND DIRECT EV IDENCE FOUND IN THE CASE OF THE ASSESSEE AS DISCUSSED ABOVE THE DIFFERE NCE IN TWO REGISTERED DEEDS AMOUNTING TO RS. 15,00,000/-, IT I S APPARENT THAT THE ASSESSEE HAS MADE HIS UNACCOUNTED INVESTMENT IN THI S PROPERTY OF AT RS.15,00,000/-. 4.7 AS DISCUSSED EARLIER, IT WAS NOTICED THAT L/4TH PART EACH OF THE SAID PROPERTY HAS BEEN REGISTERED IN THE NAMES OF FOUR B ROTHERS. IT WAS OBSERVED THAT THE SAME PROPERTY IN PARTS HAS BEEN T RANSFERRED FOR DIFFERENT VALUES TO THE FOUR BROTHERS, THEREFORE, T O ASCERTAIN THE CORRECT VALUE THE SAID PROPERTY WAS REFERRED TO THE DEPARTM ENTAL VALUATION CELL. A REPORT FROM THE DISTRICT VALUATION OFFICER, LT. DEPARTMENT HAS BEEN RECEIVED VIDE LETTER F.NO.:DVO/NEW DELHI/IT-16 /2009- 10/151 DATED 30/12/2009 DETERMINING THE VALUE OF THE PROPE RTY AT ITA NOS.2293 & 2295/DEL/2011 8 RS.6,47,72,800/- AND ASSESSEE'S SHARE BEING 114 AT RS.1,61,93,2001-. THE ASSESSEE WAS ACCORDED OPPORTUNITY TO SHOW CAUSE AS TO WHY HIS UNACCOUNTED INVESTMENT IN THE SAID PROPERTY IN PUNJ ABI BAGH SHOULD NOT BE ESTIMATED AS PER THIS VALUATION REPORT AS WE LL AS OTHER FACTS AVAILABLE WITH THIS OFFICE. THE COUNSEL OF THE ASSE SSEE SUBMITTED A DETAILED REPLY DATED 30/12/2009. 4.7(I) I HAVE CONSIDERED THE SUBMISSIONS OF THE AS SESSEE. TO SUMMARIZE, THE ASSESSEE HAS CHALLENGED THE REFERENC E OF VALUATION TO DVO AND TERMED IT ILLEGAL AND BAD IN LAW. FURTHER, IT HAS BEEN CONTENDED THAT THE VALUATION MADE BY THE DVO IS ILLEGAL AND WITHOUT JURISDICTION. IT HAS ALSO BEEN CONTENDED THAT THE PROPERTY WAS ACQUIRED AT A CONSI DERATION OF RS.3.90 CRORES BY THE FOUR BROTHERS AS THE PROPERTY WAS UNDER DISPUTE AND ASSESSEE'S BROTHER UTILIZED HIS INFLUENCE AND R ELATION TO SETTLE THE MATTER AMONGST THE PARTIES. ASSESSEE HAS ALSO RELIE D ON THE FACT THAT SIMILAR PROPERTIES SITUATED IN THE NEARBY AREA HAS BEEN REGISTERED AT VALUES LOWER THAN THE PRICE PAID BY THE ASSESSEE, S OME INSTANCES IN SUPPORT ALONG WITH COPY OF DOCUMENTS HAVE BEEN SUBM ITTED. FINALLY, THE ASSESSEE HAS RELIED ON THE JUDGEMENT OF SUPREME COURT IN THE CASE OF K.P. VERGHESE AND CONTENDED THAT NO INFERENCE SH OULD BE DRAWN AS NO DOCUMENT OF ANY PAYMENT OVER AND ABOVE THE DECLA RED PAYMENT PERTAINING TO THIS PROPERTY HAS BEEN SEIZED 1 FOUND DURING THE COURSE OF SEARCH. THE ASSESSEE HAS ALSO CONTENDED THAT OTH ER ALLEGED FACTS HAVE NO RELEVANCE FOR ESTIMATING THE INVESTMENT IN THE PROPERTY. 4.7(II) THE CONTENTION OF THE ASSESSEE THAT THE RE FERENCE TO VALUATION CELL IS ILLEGAL AND BAD IN LAW IS WITHOUT ANY CONTENTION. THE VALUATION WAS MADE AS PER PROVISION OF SECTION 142A OF THE LT. ACT AS THE PROPERTY WAS LYING IN ONE OF THE POSH AREAS OF THE CAPITAL AND THE DECLARED VALUE WAS QUITE LOW IN COMPARISON TO PREVA ILING RATE WHICH HAS BEEN EVIDENCED BY THE VALUATION REPORT. THE VAL UATION MADE BY THE VALUER IN NO WAY CAN BE TERMED AS ILLEGAL AND W ITHOUT JURISDICTION AS SPECIFIC REFERENCE HAS BEEN MADE TO HIM TO VALUE THE PROPERTY AND VALUER IS AN AUTHORIZED OFFICER TO ESTIMATE THE VAL UE OF THE PROPERTY. THE OTHER CONTENTION THAT THE ASSESSEE WAS HAVING I NFLUENCE AND CONTROL OVER THE TWO PARTIES HAS BEEN DISCUSSED AT LENGTH IN PARA 4.1 AND FOR READY REFERENCE IS REPRODUCED HEREUNDER: ITA NOS.2293 & 2295/DEL/2011 9 IN FIRST PART OF THE LETTER IT HAS BEEN STATED BY T HE ASSESSEE THAT HE WAS HAVING GOOD RELATIONS AND HAVING INFLUENCE ON MR. M UNISH SACHDEVA AND THE OTHER PARTY BHAGWANT SINGH & OTHER AND ACTE D AS ARBITRATOR TO SETTLE THE DISPUTE AMONG THEM. HOWEVER, IN THE C ONCLUDING PART, IT HAS BEEN STATED THAT SELLER I.E. MUNISH SACHDEVA IS NOT IN TOUCH WITH THE ASSESSEE AND HIS PRESENT ADDRESS ETC IS NOT KNO WN. FURTHER, IT HAS BEEN CONTENDED THAT THE PORTION OF PLOT IN POSSESSI ON OF MUNISH SACHDEVA IS COMPARATIVELY INFERIOR AND BECAUSE OF W HICH CONSIDERATION OF LESSER AMOUNT IN COMPARISON TO OTH ER BUYERS WERE MADE BUT IT HAS ALSO BEEN STATED IN THE SAME REPLY THAT MUNISH SACHDEVA WAS IN POSSESSION OF ENTIRE PROPERTY. THE CONTENTION OF THE ASSESSEE IS CONTRADICTORY AND FULL OF LOOP HOLES. T HE ASSESSEE AT HIS OWN CONVENIENCE TRIES TO MOULD THE FACTS TO COVER-U P THE WHOLE ISSUE BY FABRICATING FACTS WHICH ARE NOT SUPPORTED BY ANY DOCUMENTARY EVIDENCE WHATSOEVER. THE COMPARABLE RATE QUOTED BY THE ASSESSEE IS IN RE SPECT OF SMALL PLOTS WHEREAS THE PROPERTY IN QUESTION IS A BIG PLO T AND IS NOT COMPARABLE. THE JUDICIAL PRONOUNCEMENTS QUOTED BY T HE ASSESSEE IN NO WAY STOP THE REVENUE TO ARRIVE AT THE TRUE VALUE OF ASSET AS THE CIRCUMSTANCES OF THE CASE POINTS OUT THAT THE MONEY IS PART OF SUCH DEALS AND MONEY CHANGE HANDS WHICH IS A FACT OF COM MON KNOWLEDGE. IT CANNOT BE SAID THAT MERELY BECAUSE SOME PART OF THE CONSIDERATION HAS NOT BEEN RECORDED IN THE REGULAR BOOKS OF THE A SSESSEE OR THAT THE DEPARTMENT HAS NOT FOUND CONCRETE EVIDENCE OF THE A SSESSEE MAKING SUCH PAYMENT OUT OF BOOK, THAT THE ASSESSEE HAS NOT MADE ANY SUCH PAYMENT BECAUSE OUT OF BOOK PAYMENTS BECAUSE OF THE IR NATURE ARE DIFFICULT TO TRACK. THE ASSESSEE HAS NOT BEEN IN A POSITION TO DISPROVE THE FACT THAT OVER AND ABOVE PAYMENT FOR ACQUIRING THIS PROPERTY HAS NOT BEEN PAID WHICH IS EVIDENT FROM VALUATION REPOR T AS WELL AS OTHER DOCUMENTS SEIZED DURING THE COURSE OF SEARCH FROM W HICH IT IS EVIDENT THAT THE ASSESSEE WAS IN THE PRACTICE OF MAKING UNA CCOUNTED FOR ACQUISITION OF PROPERTIES AT BADDI, ACQUISITION OF SHARES OF M/S EMPIRE CASTING PVT. LTD. 4.7(III) IN VIEW OF THE ABOVE FACTS, IT IS CLEAR TH AT THE VALUE ARRIVED AT BY VALUER IS TRUE VALUE OF THE PROPERTY AND AS SUCH THE SAME IS ADOPTED AS INVESTMENT MADE BY THE ASSESSEE FOR THE ACQUISIT ION OF THE ABOVE ITA NOS.2293 & 2295/DEL/2011 10 PROPERTY. ACCORDINGLY, THE DIFFERENCE OF RS.71,93,2 00/- [1,61,93,00 (-) 90,00,000/-] IS TREATED AS UNEXPLAINED INVESTMENT MADE BY THE ASSES SEE U/S 69B OF THE I.T. ACT ADDED TO THE INCOME OF THE ASSESSEE. I AM SATISFIED THAT THE ASSESSEE HAS CONCEALED PARTICULARS OF INCOME HENCE PENALTY PROCEEDINGS U/S 271(1)(C) ARE TREATED AND INITIATED SEPARATELY. ..ADDITION RS.71,93,200/-. 5. THE ASSESSING OFFICER FURTHER OBSERVED THAT IN T HE CASE OF SHRI ANIL ARORA THAT THE ASSESSEE WAS HAVING A SHOP AT BHAGIR ATH PLACE, WHICH WAS REFLECTED AT RS.2.55 LACS & WHICH WAS PURCHASED MAN Y YEARS BACK. THE ASSESSING OFFICER ESTIMATED THE VALUE OF THE SHOP A T RS.19 LACS AND ESTIMATED THE RENTAL INCOME OF RS.79,800/- ON THE B ASIS OF 6% OF RS.19 LACS U/S 23(4)(B) OF THE ACT. THE ASSESSING OFFICER FUR THER MADE AN ADDITION OF RS.3,22,200/- ON ACCOUNT OF CASH FOUND AT THE PREMI SES OF ANIL ARORA ON 14.02.2008. THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF SUCH CASH ON WHICH ASSESSEE SUBMITTED THAT RS.2.50 LACS WAS BELO NGING TO THE COMPANY AND RS.72,200/- WAS OUT OF HIS PAST SAVINGS. THE A SSESSING OFFICER HOWEVER, DID NOT AGREE WITH THE CONTENTION OF THE A SSESSEE AND MADE THE ADDITION OF RS.3,22,200/- BY HOLDING AS UNDER: DURING THE COURSE OF SEARCH OPERATION FROM THE RES IDENTIAL PREMISE OF THE ASSESSEE I.E. 1ST FLOOR, B-4/48, PASCHIM VIH AR, NEW DELHI CASH OF RS.3,22,200/- WAS FOUND ON 14/02/08. THE ASSESSE E WAS ASKED TO EXPLAIN THE SOURCE OF CASH SO FOUND. THE ASSESSEE H AS STATED THAT OUT OF THE CASH SO FOUND, CASH OF RS.2,50,000/- WAS PER TAINING TO THE COMPANY AND BALANCE RS.72,200/- WAS OUT OF MY PAST SAVINGS. CONTENTION OF ASSESSEE IS NOT FOUND ACCEPTABLE. THE FACT WAS FOUND THAT UNACCOUNTED CASH EXPENSES WAS INCURRED BY HIS COMPANY M/S WINGS PHARMACEUTICALS PVT. LTD FOR MEETING EXPENDIT URE ON WAGES WHICH HAS BEEN SUPPRESSED IN ITS BOOKS TO ARRIVE AT HIGHER EXEMPT PROFITS DURING A. Y. 06-07, 07-08 AND 08-09 ESTABLI SHES THAT CASH BALANCE AS CLAIMS OF COMPANY IS UNRELIABLE AND INC ORRECT. BOOKS OF ACCOUNT OF M/S WINGS PHARMACEUTICALS (P) LTD. AR E FOUND ITA NOS.2293 & 2295/DEL/2011 11 UNRELIABLE ON SEVERAL ACCOUNTS. BOOK RESULT OF THIS COMPANY IS PROPOSED TO BE REJECTED. AS SUCH IT LEAVES NO BASIS FOR RELIANCE ON ASSESSEE'S CONTENTION AND TREAT AMOUNT ALLEGED TO B E BELONGING TO M/S WINGS PHARMACEUTICALS PVT. LTD. THE ASSESSEE HAS SHOWN OPENING CASH IN HAND OF RS.5 ,94,344/- WHICH HAS BEEN STATED TO BE PART OF DISCLOSURE MADE UNDER VDIS SCHEME 1997. THE ASSESSEE HAS NOT FILED STATEMENT OF AFFAI RS AND COPY OF BANK ACCOUNT FOR THE PERIOD 1997 TO 2000 TO JUSTIFY THE CLAIM THAT THE CASH DECLARED UNDER VDIS SCHEME REMAINS IN THE SAME FORM . THE EXPLANATION MADE FOR AVAILABILITY OF CASH IS NOT JU STIFIABLE AS NO PRUDENT BUSINESSMAN WILL KEEP THE MONEY DECLARED UN DER VDIS .SCHEME IN THE SAME FORM AND HIDE IN A LOCKER BUT I NVEST THE SAME IN BUSINESS OR DEPOSIT IN A BANK. AS THE ASSESSEE HAS FAILED TO FILE ANY DOCUMENTARY EVIDENCE IN SUPPORT OF THE CONTENTION T HAT THE CASH OF RS.2,50,000/- BELONGS TO THE COMPANY AND AS REGARD TO BALANCE CASH, IT IS SEEN THAT ASSESSEE HAS BEEN DRAWING MINIMAL A MOUNT RANGING TO RS.10,000/- TO 60,000/- IN CASH IN THE PRECEDING YE ARS I.E. A Y 2002-03 TO 2006-07. UNDER THE CIRCUMSTANCES, THE CASH SO FO UND FROM THE RESIDENTIAL PREMISES OF THE ASSESSEE REMAINS UNEXPL AINED AND ADDED TO THE INCOME OF THE ASSESSEE AS PER PROVISION OF S ECTION 69 A OF THE I. T. ACT. I AM SATISFIED THAT THE ASSESSEE HAS FURNIS HED INACCURATE PARTICULARS OF INCOME, HENCE PENALTY PROCEEDINGS U/ S 271(1)(C) ARE ATTRACTED AND INITIATED SEPARATELY. 6. IN THE CASE OF RAKESH KUMAR ARORA, BESIDES THE A DDITION U/S69B AND ON ACCOUNT OF RENTAL VALUE, ANOTHER ADDITION OF RS. 2,60,667/- WAS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED EXP ENDITURE DURING FOREIGN TRAVEL. THE ASSESSING OFFICER HAS MADE THE ADDITIO N BY HOLDING AS UNDER: 6. DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAS UNDERTAKEN FOREIGN TRAVEL TO AUSTRALIA AND NEWZELAN D. THE ASSESSEE WAS ASKED TO FURNISH DETAILS OF SUCH EXPENSES ALONG WITH DETAILS OF COUNTRIES VISITED, PERIOD OF TRAVEL, TICKET EXPENSE S, BOARDING AND LODGING EXPENSES ETC. THE ASSESSEE HAS SUBMITTED AS UNDER: I HAD MADE A FOREIGN TRAVELING TO AUSTRALIA AND NEW ZEALAND IN THE YEAR 2007-08, THROUGH A PACKAGE TOUR NAME BY ADD ON NEW ZEALAND ITA NOS.2293 & 2295/DEL/2011 12 ON AMAZING AUSTRALIA AND AUSTRALIANS SPLENDORS. DET AIL BROCHURE OF GRAND TOUR OF EUROPE OF MIS KUONI INDIA TRAVELS IS ENCLOSED FOR YOUR REFERENCE WHICH IS SELF EXPLANATORY THAT THE P ACKAGE TOUR INCLUDES THE AIR TICKETS, LOCAL TRAVELLING, HOTEL S TAY, BREAKFAST LUNCH AND DINNER. IT WAS A PACKAGE TOUR AND I HAD M ADE AN EXPENDITURE FOR RS. 1555323/- OUT OF WHICH EXPENDIT URE OFRS. 1221611/- BORNE MY WIFE SMT. KIRAN ARORA AND BALANC E RS. 333712/- BORNE BY ME I.E. SH. R.K. ARORA. PHOTO COPY OF THE CHEQUES THROUGH WHICH PAYMENT HAS BEEN MADE AND OTHER DOCUMENTS IS ENCLOSED HEREWITH FOR YOUR KIND REFERENCE. 6.L I HAVE CONSIDERED THE SUBMISSION OF THE ASSESS EE. IN ABSENCE OF DETAILS OF EXPENDITURE INCURRED ON OTHER RELATED AC TIVITIES, SUCH AS PASSPORTS, PLACES VISITED, TICKETS FOR MONUMENTS 1 PARKS 1 MUSEUMS, PERIOD OF STAY, GIFTS/SOUVENIRS, SHOPPING ETC., THE EXPENDITURE SO CLAIMED IS NOT BEING TREATED TO BE ADEQUATE AND ACC ORDINGLY THE SAME IS ESTIMATED AT RS.18,00,000/- OUT OF WHICH RS. 15, 33,323/- HAS BEEN CLAIMED TO HAVE BEEN INCURRED BY THE ASSESSEE AND H IS WIFE. AS SUCH AN ADDITION OF RS 2,66,677/- IS BEING MADE IN THE H ANDS OF THE ASSESSEE BEING EXPENDITURE MADE OUT OF UNDISCLOSED SOURCES. (ADDITION RS.2,66,677/-). 7. AGGRIEVED WITH THE ADDITION, ASSESSEE FILED APPE AL BEFORE LD. CIT(A) AND MADE VARIOUS SUBMISSIONS. LD. CIT(A) HAS DELET ED THE ADDITION MADE BY THE ASSESSING OFFICER BY HOLDING AS UNDER: 5.6 I HAVE CAREFULLY CONSIDERED THE IMPUGNED ORDER OF T HE LD AO A ND T HE SU B MISSI ONS MADE BY THE ASSESSEE. DURING THE Y EAR UNDER CONS I DERA TI O N , T HE A S SE SS E E ALONG WITH H IS THREE BROTHERS PURCHASED THE PR O PER TY S ITU A TED AT 10 / 7 8 PUNJABI B AGH, NEW DELHI FO R A TOTAL SALE CONSIDERATION OF R S. 3 .9 0 C R . F ROM SH . MU N ISH SA C HDEVA AND M I S SACH D EVA PROMOTERS & PROPERTIES LTD . T H E ASSESSEE ALO NG WITH SH. ANIL A RORA P U RCHASED THE SHA RE OF SH. MUNISH SACHDEVA IN THE ABO V E SA I D PROPE R T Y F O R A CONSI D ERATION OF R S 180 LACS. ACCORDING TO AO PURCHASE V ALUE OF THE PROPERT Y W AS A PP AR ENTL Y H I GH LY SUP PRES SED BY THE APPELLANT THEREFORE, THE CASE WAS REFERRED TO THE V A L UAT I ON CE LL U/ SI 42(A) OF THE IT ACT TO DETERMINE THE FMV OF THE PROPE R T Y. THE DVO DETER M I N E D THE FMV OF SHARE OF THE ASSESSEE IN ITA NOS.2293 & 2295/DEL/2011 13 THE COMPLETE PR OPERT Y AT RS. 161 93200 / - . TH E ASSESSEE HAD SHOWN T HE VALUE OF HIS SHARE IN THE ABO V E SAI D PROPERT Y A T R S 9 0,00000 / - IN HIS S A LE DEED AS W ELL AS IN THE BOOKS OF ACCOUNTS . AF T E R G I V IN G THE APPE LL AN T AN OPP OR TU N ITY OF BEING HEARD TH E AO HAS ADDED DIFFERENCE OF R S 7193 2 0 0 / - AS UNDI SCL O SED IN V EST M ENT U N DER SECTION 69 B. IT IS AN UNDISPUTED FACT THAT NO DOCUMENT HAS BEEN FOUND F ROM T HE O FF ICE O F THE C O MPAN Y & RESIDENCE OF THE DIRECTORS WHICH INDICATE THAT AN Y IN V ES T MEN T IN T H IS P R OPERT Y W A S MADE OVER AND ABO V E THE PURCHASE PRICE PAID AND REFLECTED IN THE BOOK S OF A C CO UN TS B Y THE ASSESSEE . IN THE HANDS OF THE SELLER THE SALE CONSIDERAT I ON H A S BE E N A CC E PTED N O ADDITION H A S BEEN MADE. IT IS NOT OPEN TO T H E A5 TO TAKE A DIFFEREN T ST A ND I OR MAKE ANY ADDITION ON INVESTMENT , ON THE BASIS OF ALLEGED V ALU A TION R EPORT , I N THE H AND S O F T HE PURCHASER / ASSESSEE. THE ASSESSEE ALSO PLACED RELIANC E ON T HE JUD G MEN TS G IV E N I N K P V ARGHESE VS ITO 131 ITR 597(SC ) WHICH CLEARL Y S AYS TH A T ONUS O F E S TABLI S H I N G TH AT THE CONDITION OF TAXABILITY ARE FULFILLED IS ALWA Y S ON THE R EV ENUE AN D BURDE N L IE S ON T HE REVENUE TO SHOW THAT THERE IS AN UNDERSTATEMENT OF THE CON S ID E RATION . TH I S PR I NC IP A L HAS BEEN CONSISTENTL Y FOLLOWED B Y THE V ARIOUS HIGH COURT S A N D IT AT BEN CH ES . R E L IA N CE W AS ALSO PLACED ON THE JUDGMENT OF IT AT DELH I BENCH IN T E J PRA TAP S I N G H V S AC IT 307(2008) ITR PAGE 244 & A S HOK SON I VS ITO ( 2006 ) 1 02 TT J 9 6 4. IT HAS AL SO B E E N HELD THAT THE VALUATION REPORT I S AN EX PERT OP I NION A T THE MO ST . I N RE L AT I ON TO THE TRANSACTION OF THE TRANSFER , SUCH REPORT C A NNOT B E T REA T ED TO BE PROO F O F T HE FA CT THA T T HERE IS SOME UNDER HAND DEALING AND CONSIDERATION H A S PA SS ED M ORE T HAN W H A T I S DI SCLOSE D. TH E APPELLANT ALSO PLACED RELIANCE ON THE FOLLO W ING JUDGEMENT S W HERE I N IT H AS B E E N HEL D THAT IT IS SETTLED LA W THAT PRIMARY BURDEN TO PRO V E UNDER ST A TEMENT OR C O NC EA LM E N T O F INCO M E IS ON THE REVENUE AND IT IS ONLY WHEN SUCH BURDEN I S DISCHARGED , I T WO UL D BE PERMISS IB LE TO REL Y UPON THE V ALUATION GIVEN B Y THE DVO . A)CIT VS BAJRA N G LAL B AN S A L IT A 1 82 1 2010 ( D EL H I HIG H CO U RT ) B)CIT V S RAME S H K A KK A R IT A 1 550 / 20 1 0 ( DE LHI HIG H COU R T) C)CIT VS. SHAKUNTALA D E VI 316 ITR 4 6 ( D E L H I HIGH COU RT ) THE DI V ISION BENCH OF HON ' BLE DELHI HI G H COURT I N CI T VS ASHOK KH ET RAP A L 2 9 4 IT R 143 OBSERVED THAT B Y REF E RRING TO THE REPORT OF ITA NOS.2293 & 2295/DEL/2011 14 V ALUATIO N O FFI CER I N THE AB S EN C E OF A N Y I NCRIMINATING DOCUMENTS FOUND IN THE COU R SE O F A SE A R CH N O A D DI T IO N CO U LD BE MADE B Y TREATING INVESTMENT AS UNDISCLOSED ON TH E BASIS O F D VO'S REPO RT . T HE DE CISIO N I N CIT V S MANOJ JAIN 287 ITR 285 IS ALS O TO THE SAME EFFECT . IN VIEW OF THE DISCUSSION MADE ABOVE , A ND THE V I EWS OF D I F F EREN T CO URTS INCL UDI NG TH E JURISDICTIONAL HON'BLE DELHI HIGH COURT I N M Y CONSID ERE D O P I NI ON THE A D DITIO N M A DE B Y ' THE AO , ONL Y ON THE BASIS OF VA LUATION REPORT W ITH O UT H AVING AN Y MAT ER IA L ON RE C ORD ON THE BASIS WHICH REASONABLE IN F ERENCE CA N BE M A DE O F S O M E I N V ESTM E NT O V ER AND A BO V E THE DISCLOSED CONSIDERATION IS NOT TENABLE. THERE FORE TH E APPEAL OF THE APPELLAN T ON THIS GROUND IS ALLOWED AND THE AO IS DIRECTED A CCORD I N G L Y . THE ASSESSING OFFICER HAS ALSO OBSER V ED THAT THE R EG I STE RE D VAL U E OF 1 I4 T H SH ARE I N THE COMPLETE PROPERTY AT 10 / 78 PUNJABI BAGH , D E LHI HAS B E EN SHO W N B Y T H E ASSE S S E E A T LESSER VALUE B Y RS. 15 LACS AS COMPARED TO THE V ALUE S HO W N B Y T HE OTHER T WO BRO T HE RS SH . K . K. ARORA AND SH. R.P. ARORA FOR THEIR EQUAL SHARE IN TH E PROPERT Y. AC C O RD I N G L Y ON T H I S ACCOUNT HE OPINED THAT TH E A S SE S SEE HAS MADE UN A C C OUNTED I N V ESTMENT I N THI S PROP E RT Y O F AT LEAST RS . 15 LACS . IN TH I S RE G ARD ALSO I H AV E CONS I D ERED THE FACTS OF THE CASE AND THE SUBMISSION MADE B Y THE ASSESSEE . THE AO HAS MISSED T H E POI NT THA T T HE P O RT I O N OF THE PLOT PURCHASED B Y THE ASSESSEE I S ADJOININ G TO PROPERT Y N O. 8 /78 WHICH IS H AVING MU L TIPL E AND MULTI STORY FLATS AND THUS I S HAVING COMPARAT IV E I NFER I O R L OC ATION AS C O M PA RED T O T HE PORTION OF THE PLOT PURCHASED B Y THE OTHER TW O BRO T HER S. TH U S T H IS VITAL FA C T C ANNOT BE IGNORED WHICH IS BOUND TO HAVE IMPACT ON THE V A L U E OF THE SA I D PORTION OF T H E PLOT / PROPERT Y PURCHAS E D B Y THE A SSESS E E. ACCORDIN G L Y IN MY CON S IDER E D O P INION T H E A BO V E SAID OBSER V ATION OF THE AO THAT T HE AS SESS EE HAS M A D E U NEX PL A I NE D INVEST M E N T OF AT L E AST RS. 15 LAC S IN THI S PLOT / PROPERT Y I S AL S O NOT CO R RE C T. THUS THE AO IS DIRECTED TO DELETE THE ENTIRE A DDIT IO N OF RS . 7 1, 9 3,200/ - AND THE APPELLANT GETS RELIEF OF RS. 71,93 , 200/- . 6.GROUND OF APPEAL N O. X I ' THAT ON TH E F ACTS A N D T H E CI R CUMSTA N CES OF T H E CASE AND THE PROVISIONS OF THE LAW TH E LD AD HA S E RR E D IN MAKIN G A N ADD I TION OF R S. 7 9 800 / - U / S 23(4)(B) OF THE IT AC T ON A C COU NT O F FAIR RE N TA L VA L UE OF TH E SHOP SITUATED AT 3 RD FLOOR OF ITA NOS.2293 & 2295/DEL/2011 15 B HAGIRATHP LA CE B Y A RBITRARIL Y ES TIMA TI N G T H E MA RK ET PRICE AT R S . 1 9 00000 / - . ON MERE PRESUMPTION AND ASSUMPTION THE ASSESSING O FFICER HAS ESTIMATED THE MARKET VALUE OF THE SHOP SITUATED AT BHAGIRATH PLACE (CHANDNI CHOWK) AT RS.19 LACS AND ALSO DETERMINED R ENTAL VALUE OF THE SHOP AT RS.1,14,000.0. AS THE ASSESSING OFFICER HAS NOT BROUGHT ANYTHING ON RECORD IN THIS REGARD, THERE IS NO JUSTIFICATION FOR MAKING A NY ADDITION ON THIS ACCOUNT. MOREOVER, IT WAS SUBMITTED THAT DURING THE ENTIRE YEAR THE SAID SHOP WAS LYING VACANT. IN VIEW OF THE ABOVE THE ASSESSING OFFICER IS DIRE CTED TO DELETE THE ADDITION OF RS.79,800/- MADE U/S 23(4)(B). 7. GROUND OF APPEAL NO.XII: THAT ON THE FACTS AND THE CIRCUMSTANCES OF HE CASE AND THE PROVISIONS OF THE LAW, THE LEARNED ASSESSING OFFICE R HAS ERRED IN MAKING AN ADDITION OF RS.3,22,200/- U/S 69B AS U NEXPLAINED CASH FOUND AT RESIDENCE AT THE TIME OF THE SEARCH P ROCEEDINGS. DURING THE COURSE OF SEA RCH OP E R A TION F ROM T H E R ESID EN TI AL PR EMI S ES OF TH E ASSESS E E I.E. 1ST FLOOR , B-4 / 48 P AS CHIM VIHA R , NEW D E LH I C ASH O F R S.3 , 22,200 / - WAS FOUND ON 14-0 2 -2008 . THE A S SES S EE WA S ASK ED TO E XP L A IN THE SO U R C E OF CASH SO FO U ND .THE ASSESSEE STATED THAT OUT OF THE C A SH SO FOUND CAS H O F R S . 2, 5 0 , 000 / - WAS P ER TAI N I N G T O TH E COMPAN Y M / S WINGS PHARMAC E U TI CAL S P VT . L TD. A ND B ALA NC E R S . 7 2200/ - WAS OU T OF H IS PAST SAVIN G. THE A SS ESSEE BEI NG TH E DIR E CTO R O F TH E C O MPANY IS LO O KING AF T ER TH E MARKETIN G FUNCTIONS OF THE C O M P A N Y M / S W IN GS P HARMACEUTICALS P V T. LTD. AND TO MEET OUT D AY TO D AY E X PEN S E S O F THE M A RK ET I NG DIV I SION SITUATED AT DELHI THE CASH TO THE TUNE OF S. 2 TO 3 LACS IS NORMALL Y KEP T W ITH THE A S S ESS EE . THUS ON THE DATE OF S E ARCH ALSO O U T OF THE TO TAL CASH FOUND , CASH OF RS . 2 .50 L AC S WAS BELONGING TO THE COMPANY . AS ON 14.02. 2008 TO TA L CA S H O F C OMPA NY AS PER THEI R BOO KS WAS R S. 6 8 6080/ - .THE CO M PANY IN ITS BOO KS OF A CCOUN T HA S AL SO S HOWN CASH OF R S . 6.00 LACS AS CASH SEIZED. MOREOVER THE S E ARCH PROCEEDI N G W A S CARR IED O U T A T A LL THE PREMISES OF THE COMPAN Y AND YOUR KIND H ONOR WILL OBSER V E THAT NO CAS H WA S F OUN D FROM THE PREMISES OF THE COMPANY APART FROM T HE CA S H O F RS. 322 2 00 / - F OUND FR OM THE ASSESSEE AND RS . 4 , 29 , 380 / - FOUND FROM THE RESIDENCE O F MR. R . P . ARORA . O UT OF RS. 3,22 , 200 / - FOUND FROM THE RESIDENCE OF THE ITA NOS.2293 & 2295/DEL/2011 16 ASSESS E E I T W A S STATED THA T THE RE M AINING CASH OF RS . 72200 / - WAS OUT OF HIS PAST ACCUMULA T ED SA V ING W HICH W A S ALS O V E RIFIA B LE FROM THE CASH BOOK OF THE ASSESSEE . A COP Y OF THE SAME ALONG W ITH CONF IRMA T ION B Y M/S W IN GS P HAR M ACEUTICALS PVT. LTD. WAS ALS O PL ACED ON RECORD. I HA V E CONS IDERED THE IM P UGNED ORD E R AND THE SUBMISSIONS OF THE ASSESSEE IT IS AN UNDISPUTED FA CT T H AT M / S WINGS P HAR M ACEUTICALS PVT. LTD. HAS SHOWN CASH OF RS . 6 LACS I N ITS BALANC E SHEET UN D ER THE HEA D OTHER CURRENT ASSETS A S CASH WITH THE INCOME T A X DEPT . AND OUT OF I T R S. 2.50 LA C S PERTA I N S TO T H E CASH FOUND F ROM THE RESIDENCE OF THE ASSESSEE. ACCORD INGLY I N M Y CON S IDE R ED O P I NIO N THE SOURCE OF THIS CASH OF RS . 2.50 LACS IS E X PLAIN ED. WIT H RE G ARD T O BALAN CE CASH OF R S. 72 , 2001 - THE ASSESSEE HAS FILED A COP Y OF THE CA SH BOO K W HER EI N ALSO THE SAME CASH HAS BEEN SHOWN AS OUTSTANDING ON 14.02.20 08 THE D ATE OF T HE SEAR C H. A CCORDIN GL Y O N THIS ACCOUNT ALSO NO ADDITION IS CALLED FOR . THU S, T H E A O IS DIRECTED TO DELETE THE A DD ITI ON OF R S. 3,22,200/ - MADE ON HIS ACCOUNT . 8. FIRST TWO ADDITIONS IN THE CASE OF SHRI RAKESH K UMAR ARORA IN I.T.A.NO. 2295/DEL/2011 WERE DELETED HOLDING THE SA ME OBSERVATIONS AS HELD IN I.T.A.NO. 2293/DEL/2011. HOWEVER, THE ADDIT ION ON ACCOUNT OF FOREIGN TRAVEL EXPENSES WAS DELETED BY HOLDING AS U NDER: GROUND OF APPEAL NO.XII : THAT ON THE FACTS AND THE CIRCUMSTANCES OF THE CAS E AND THE PROVISIONS OF THE LAW, THE LEARNED ASSESSING OFFICE R HAS ERRED IN MAKING AN ADDITION OF RS.2,66,677/- ON ACCOUNT OF F OREIGN TRAVELING. ON MERE PRESUMPTION AND ASSUMPTION THE ASSESSING OF FICER HAS ESTIMATED TOTAL EXPENDITURE ON FOREIGN TRAVELING TO AUSTRALIA & NEW ZEALAND AT RS.18 LACS. AND AS THE ASSESSEE HAS ALR EADY DISCLOSED EXPENDITURE OF RS.1533323/-, THE ASSESSING OFFICER HAS MADE AN ADDITION OF RS.266677/- ON THIS ACCOUNT. IT IS AN UNDISPUTED FACT THAT THE SAID TOUR WAS A P ACKAGE TOUR ARRANGE BY SOTC WHICH INCLUDES ALL THE THINGS I.E. COST OF AIR TICKETS, ACCOMMODATIONS FOODINGS, TRANSFERS, SIGHT SCENE ETC . NO QUESTION OF ANY UNEXPLAINED EXPENDITURE IN THIS REGARD ARISES. THUS IN MY CONSIDERED OPINION THERE IS NO JUSTIFICATION FOR MA KING ANY ADDITION ITA NOS.2293 & 2295/DEL/2011 17 ON THIS ACCOUNT. ACCORDINGLY, ASSESSING OFFICER IS DIRECTED TO DELETE THE ADDITION OF RS.266677/- MADE ON THIS ACCOUNT. 9. AGGRIEVED WITH THE ACTION OF LD. CIT(A), THE REV ENUE IS IN APPEAL BEFORE US. 10. ARGUING FIRST ON APPEAL IN THE CASE OF MR. ANIL ARORA, LD. D.R. INVITED OUR ATTENTION TO PARA 4 ON PAGE 2 OF THE ASSESSMENT ORDER AND SIMILARLY, OUR ATTENTION WAS INVITED TO RELEVANT FINDING OF LD. CI T(A) AND IN VIEW OF THE SAME, IT WAS SUBMITTED THAT LD. CIT(A) HAS MERELY R EJECTED THE ASSESSING OFFICERS FINDINGS. IT WAS SUBMITTED THAT THE ASSE SSING OFFICER HAS CLEARLY HELD THAT IN THE CASE OF BROTHER OF THE ASSESSEE AN D THAT OF THE ASSESSEE THERE WAS DIFFERENCE IN CONSIDERATION AND MOREOVER, ASSES SING OFFICER HAD FOUND VARIOUS DOCUMENTS FROM WHICH IT COULD BE CONCLUDED THAT THE ASSESSEE WAS INDULGING INTO DUBIOUS TRANSACTIONS AND, THEREFORE, THE PROPERTY OF THE ASSESSEE WAS REFERRED TO VALUATION OFFICER AND LD. A.R. OF ASSESSEE HAD NOT POINTED OUT ANY DISCREPANCY IN THE VALUATION REPORT . ARGUING GROUND NO.3, LD. D.R. SUBMITTED THAT HERE ALSO LD. CIT(A) HAD DE LETED THE ADDITION WITHOUT ASSIGNING ANY REASON. FURTHER, ARGUING GRO UND NO.4 REGARDING CASH FOUND AT THE PREMISES, LD. D.R. SUBMITTED THAT LD. CIT(A) HAD SIMPLY ACCEPTED THE CONTENTION OF THE ASSESSEE THAT THE CA SH BELONGED TO THE COMPANY WHICH SHOULD NOT HAVE BEEN ACCEPTED AS THE SAID COMPANY IS A DIFFERENT ASSESSEE AND THE CASH BELONGING TO A DIFF ERENT ASSESSEE CANNOT BE SAID TO BE KEPT AT THE RESIDENCE OF THE DIRECTOR OF THE ASSESSEE COMPANY. IT WAS FURTHER SUBMITTED THAT IF THE CASH BELONGING TO COMPANY WAS WITH THE DIRECTOR, THE ASSESSEE WAS ALSO HIT BY THE PROVISIO NS OF SECTION 269SS AND 269T. ARGUING THE OTHER APPEAL IN I.T.A.NO. 2295/D EL/2011, LD. D.R. SUBMITTED THAT HIS ARGUMENTS ON THE FIRST THREE GRO UNDS WERE THE SAME ITA NOS.2293 & 2295/DEL/2011 18 WHEREAS IN RESPECT OF GROUND NO.4, HE PLACED HEAVY RELIANCE ON THE ORDER OF THE ASSESSING OFFICER. LD. A.R. REPLYING ON THE GR OUNDS NO.1 & 2 IN BOTH THE APPEALS SUBMITTED THAT MR. ANIL ARORA, THE ASSE SSEE IN I.T.A.NO. 2293/DEL/2011 HAD PURCHASED ONE PLOT ALONG WITH HIS BROTHER FOR A TOTAL CONSIDERATION OF RS.1.80 CRORES, SO THE SHARE OF BO TH ASSESSEES CAME TO BE RS.90 LACS EACH. HE FURTHER EXPLAINED THAT THERE W AS ANOTHER PLOT WHICH WAS A SEPARATE PLOT AND WHICH WAS PURCHASED BY OTHER TW O BROTHERS OF THE ASSESSEE NAMELY SHRI R P ARORA AND SHRI K K ARORA F ROM A DIFFERENT PERSON FOR A TOTAL CONSIDERATION OF RS.2.10 CRORES AND THE OTHER BROTHERS HAD PAID RS.1.05 CRORES EACH. HE FURTHER SUBMITTED THAT PLO TS PURCHASED BY BROTHERS OF ASSESSEE HAD A BETTER LOCATION AS THERE WERE SMA LL FLATS IN FRONT OF THE PROPERTY OF ASSESSEES WHEREAS THE PLOT PURCHASED BY BROTHERS OF THE ASSESSEE HAD LARGER PROPERTIES. SO, DUE TO LOCATIONAL ADVAN TAGE, THE BROTHERS OF THE ASSESSEE HAD PAID A DIFFERENT AMOUNT. FURTHER ARGU ING, LD. A.R. SUBMITTED THAT THE DIFFERENCE IN PRICE CAN BE FURTHER PROVED FROM THE FACT THAT THE SELLER OF THESE PLOTS HAD ALSO PURCHASED AT DIFFERENT RATE S AND THE PLOTS PURCHASED BY ASSESSEES WERE PURCHASED BY ITS SELLER FOR A LOW ER PRICE OF RS.1 CRORES AS COMPARED TO RS.1.27 CRORES PAID BY THE SELLERS OF T HE PLOT PURCHASED BY BROTHERS OF THE ASSESSEE. HE FURTHER SUBMITTED THAT DURING THE SEARCH NO DOCUMENTS WERE FOUND TO SHOW THAT THE ASSESSEE HAD PAID EXTRA AMOUNT OTHER THAN THE DECLARED AMOUNT IN THE SALE DEED. LD. A.R . FURTHER SUBMITTED THAT DURING ASSESSMENT PROCEEDINGS, THE ASSESSEE HAD FIL ED SALE DEED WHICH THE ASSESSING OFFICER HAD IGNORED. IN VIEW OF THE ABOV E, IT WAS SUBMITTED THAT LD. CIT(A) HAS VERY ELABORATELY CONSIDERED THE SUBM ISSIONS OF THE ASSESSEE AND HAS PASSED THE ORDER. REGARDING CASH FOUND, LD . A.R. SUBMITTED THAT SINCE THE ASSESSEE WAS DIRECTOR AND THEREFORE, HE W AS IN AN APPROPRIATE ITA NOS.2293 & 2295/DEL/2011 19 POSITION TO KEEP THE CASH BELONGING TO THE COMPANY AND IT WAS NOT A LOAN FROM THE COMPANY, THEREFORE, THE VIOLATION OF THE P ROVISION OF SECTION 269SS AND 269T AS MENTIONED BY LD. D.R. WAS NOT RELEVANT. REGARDING ADDITION ON ACCOUNT OF FAIR RENTAL VALUE AND FOREIGN TRAVEL EXP ENSES THE LD. A.R. RELIED UPON THE ORDER OF LD. CIT(A). THE LD. D.R. IN HIS REJOINDER SUBMITTED THAT THE FACT THAT THE DIFFERENCE WAS DUE TO DIFFERENT P ROPERTIES WAS NOT BEFORE THE ASSESSING OFFICER. THEREFORE, IT WAS ADDITIONAL EVI DENCE WHICH WAS CONSIDERED BY LD. CIT(A) IN VIOLATION OF RULE 46A. HE FURTHER SUBMITTED THAT THE PROPERTY OWNED BY FOUR BROTHERS WAS UNDIVI DED, SO, THEREFORE, DIFFERENT BROTHERS CANNOT MAKE DIFFERENT PAYMENTS. 11. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE T HROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT LD. CIT(A) HAS DELE TED THE ADDITIONS ON ACCOUNT OF DIFFERENCE IN MARKET PRICES OF PROPERTIE S AS COMPARED TO DECLARED VALUES FOLLOWING CERTAIN JUDICIAL PRONOUNCEMENTS AN D BY ELABORATING THE FACTS CLEARLY. THEREFORE, WE DO NOT SEE ANY REASON TO INTERFERE WITH HIS FINDINGS. HIS ORDER ON OTHER ADDITIONS IS ALSO VER Y ELABORATE AND MERITS NO INTERVENTION. 12. IN VIEW OF THE ABOVE, BOTH THE APPEALS FILED BY THE REVENUE ARE DISMISSED. 13. ORDER PRONOUNCED IN THE OPEN COURT ON 08 TH AUG., 2014. SD./- SD./- ( I. C. SUDHIR ) (T.S. KAPOOR ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 08 TH AUG., 2014 SP ITA NOS.2293 & 2295/DEL/2011 20 COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI).