Sri. Eldhose K. Varghese, Muvattupuzha V. TheDCIT, Ernakulam

ITA 261/COCH/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5520 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 12-06-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 13-06-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: SUDHANSHU SHEKHAR
• Keywords: Unexplained cash credit; Unexplained investment; Income from undisclosed sources; Rule of consistency; Retraction; Documents seized
• Section: 143(3); 142(1); 153A; 234B; 147; 263; 132; 15; 139

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI P. K. BANSAL, VICE PRESIDENT AND SHRI GEORGE GEORGE K., JUDICIAL MEMBER ITA NO S.261 TO 267/COCH/2016 ASSESSMENT YEARS:2006-07 TO 2012-13 DY.C.I.T., CENTRAL CIRCLE-1, ERNAKULAM. VS SHRI ELDHOSE K. VARGHESE, KOCHUKUDIYIL HOUSE, MEKKADAMBU P.O. MUVATTUPUZHA. PAN:AAFPE 4655 C (RESPONDENT) (APPELLANT) SHRI T. M. SREEDHARAN APPELLANT BY SHRI SUDHANSHU SHEKHAR, CIT, D.R. RESPONDENT BY 27/09/2017 DATE OF HEARING 04 / 10 /2017 DATE OF PRONOUNCEMENT ORDER PER P. K. BANSAL, V.P. ALL THESE APPEALS HAVE BEEN FILED BY THE ASSESSEE AGAINST THE CONSOLIDATED ORDER OF CIT(A) DATED 31/03/2016. 2. IN THE ASSESSMENT YEAR 2006-07 TO 2010-11 AND 20 11-12 THE ASSESSEE HAS TAKEN THE FOLLOWING COMMON GROUNDS OF APPEAL EXCEPT THE CHANGE IN FIGURES IN GROUND NO. 4 & 6: 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -IV, KOCHI DISMISSING THE APPEAL AGAINST THE ASST. ORDER FOR 2006-07 AS PER COMMON ORDER IN ITA NO.E-75/CIT(A)-IV/14-15 DATED 31.3.2016, IS OPPOSED TO LAW, FACTS AND CIRCUMSTANCES OF THE CASE. 2 2. IT IS SUBMITTED THAT THE ASSESSMENTS MADE U/S.15 3C R.W.S. 153A AND 143(3) IS VOID AND WITHOUT JURISDIC TION. 3. IT IS SUBMITTED THAT THE CONDITIONS REQUIRED TO BE FULFILLED FOR MAKING ASSESSMENT U/S 153C ARE NOT SATISFIED IN THE APPELLANT'S CASE. AS SUCH THE ASSE SSMENT IS INVALID. 4. WITHOUT PREJUDICE, IT IS SUBMITTED THAT THE ADDI TION OF RS.9,20,624/- FOR ALLEGED CASH SHORTAGE, WHICH IS TREATED AS UNEXPLAINED INVESTMENT IS HIGHLY ARBITRA RY AND WITHOUT BASIS. 5. IT IS SUBMITTED THAT THE SOURCES AVAILABLE TO TH E CREDIT OF THE APPELLANT, FULLY EXPLAINED THE INVESTMENT IN LA ND AND OTHER OUTGOINGS. THE ASSESSING OFFICER WAS NOT JUST IFIED IN TREATING ANY PART OF THE INVESTMENT AS NOT EXPLA INED. 6. IT IS SUBMITTED THAT THE ENTIRE ASSESSMENT AND A DDITIONS MADE ARE ARBITRARY AND ILLEGAL AND LIABLE TO BE SET ASIDE. THE ADDITION OF RS.60,000/- REPRESENTING AGRICULTUR AL INCOME, AS UNDISCLOSED INCOME, IS ALSO ARBITRARY. 7. IN THIS CONNECTION, IT IS RESPECTFULLY SUBMITTED THAT THE CIT (A) HAS FAILED TO CONSIDER THE ARGUMENTS PUT FORWARD AT THE TIME OF HEARING AND THE WRITTEN SUBMISSIONS, FAIRLY AND JUDICIOUSLY. THE CONTENTION S TAKEN IN THE ARGUMENT NOTE SUBMITTED BEFORE THE CIT (A), A COPY OF WHICH IS PRODUCED HEREWITH, MAY KIND LY BE TREATED AS PART OF THESE GROUNDS. 8. THE AGRICULTURAL INCOME DECLARED SHOULD HAVE BEE N TREATED AS AN AVAILABLE SOURCE AGAINST THE VARIOUS INVESTMENTS AND OUTGOINGS CONSIDERED IN THE ASST. ORDER. 9. THE LEVY OF INTEREST U/S 234A, 234B & 234C, IS A LSO ILLEGAL AND UNSUSTAINABLE. 2.1 THESE FIGURES BE READ AS UNDER IN PLACE OF RS.9 ,20,624/- AND RS.60,000/- IN GROUND NO. 4 & 6: 3 ASSESSMENT YEAR GROUND NO. 4 GROUND NO. 6 -------------------- ------------------- --------- -------- 2007-08 27,372 60,000 2008-09 * 2,00,000 2009-10 ** 2,00,000 2010-11 10,66,025 2,00,000 2011-12 10,43,928 3,00,000 * IN THE ASSESSMENT YEAR 2008-09 NO GROUND HAS BEEN TAKEN IN RESPECT OF SEIZED CASH TREATED AS UNEXPLAINED I.E. THE GROUND RELATING TO GROUND NO. 4 IN ASSESSMENT YEAR 2006-07 AND ACCORDINGLY THE GROU ND TAKEN IN THOSE ASSESSMENT YEARS HAS BEEN RENUMBERED AND IN GROUND NO. 6, THE FIGURE OF RS.60,000/- BE READ AS RS.2,00,000/-. **IN ASSESSMENT YEAR 2009-10 THERE IS NO GROUND REL ATING TO SHORTAGE OF CASH AMOUNTING TO RS.2,70,658/- BUT GROUND NO. 4 RE ADS AS UNDER: 4. THE ADDITION ON ACCOUNT OF ALLEGED INVESTMENT I N LAND AMOUNTING TO RS.29,30,600/- IS NOT LEGAL OR SUSTAIN ABLE. THE ADDITION IS NOT SUSTAINABLE ON THE GROUND THAT THERE IS NO MATERIAL OR EVIDENCE JUSTIFYING SUCH ADDITION . GROUND NOS. 1, 2 & 3 IN ASSESSMENT YEAR 2006-07 TO 2011-12 ARE COMMON AND RELATE TO THE VALIDITY OF THE ASSESSMENT MADE U NDER SECTION 153C READ WITH SECTION 153A AND 143(3) OF THE ACT. 3. THE FACTS IN THE CASE OF THE ASSESSEE ARE THAT A SEARCH UNDER SECTION 132 WAS CONDUCTED ON 02/11/2011 AT THE RESIDENCE OF THE ASSESSEE IN CONNECTION WITH THE SEARCH WARRANT ISSUED ON SHRI JOHN KURIAKOSE OF M/S DENTACARE GROUP. AT THE TIME OF SEARCH, CERTAIN DO CUMENTS WERE SEIZED, WHICH RELATE TO THE ISSUE OF BLANK CHEQUES BY M/S L OLA N. PARITHRAN AND BLANK STAMP PAPER SIGNED BY HER. THE ASSESSEE SUBM ITTED THE INCOME TAX RETURN EARLIER PRIOR TO THE DATE OF SEARCH FOR THE ASSESSMENT YEAR 2006-07 TO 2010-11. THE ORIGINAL RETURN FILED ALONG WITH I NCOME RETURNED ARE DETAILED AS UNDER: 4 ASSESSMENT YEAR ORIGINAL RETURN FILED ON INCOME RETURNED (RS.) 2006 - 07 31/05/2007 1,22,918 2007 - 08 06/08/2008 1,38,070 2008 - 09 29/01/2010 1,41,514 2009 - 10 29/01/2011 1,73,046 2010 - 11 14/02/2011 1,88,056 ALL THESE RETURNS WERE PROCESSED UNDER SECTION 143( 1) AS THE TIME FOR ISSUING THE NOTICES UNDER SECTION 143(2) HAS EXPIRE D. THE RETURNS FOR THE ASSESSMENT YEAR 2011-12 AND 2012-13 WERE FILED ON 1 5/03/2012 AND 19/11/2013 DECLARING AN INCOME OF RS.5,96,657/- AND RS.7,37,186/- RESPECTIVELY. SUBSEQUENTLY, THE NOTICES UNDER SECT ION 153C READ WITH SECTION 153A WERE ISSUED TO THE ASSESSEE FOR SIX AS SESSMENT YEARS PRECEDING THE YEAR ON 30/08/2012. IN RESPONSE THER ETO, THE ASSESSEE REQUESTED THAT THE RETURN OF INCOME FILED BEFORE TH E INCOME TAX OFFICER MAY BE TREATED AS THE RETURN IN RESPONSE TO NOTICE UNDER SECTION 153C FOR THE ASSESSMENT YEAR 2006-07 TO 2011-12 FOR WHICH TH E NOTICES UNDER SECTION 153C WERE ISSUED. THE ASSESSING OFFICER CO MPLETED THE ASSESSMENT IN EACH OF THE CASES BY MAKING THE ADDIT IONS AS DETAILED BELOW: DESCRIPTION 2006-07 2007-08 2008- 09 2009-10 2010-11 2011-12 2012-13 INCOME DECLARED 122918 138070 141514 173046 188056 596657 737186 ADD: AGRICULTURAL INCOME TREATED AS UNEXPLAINED CASH CREDIT 60000 60000 200000 200000 200000 300000 430000 CASH SHORTAGE TREATED AS UNEXPLAINED INVESTMENT 920624 27372 - 270658 1066025 1043928 - UNDISCLOSED INCOME PURCHASE OF LAND) - - - 2930600 - - 544000 UNDISCLOSED INCOME MONEY RECEIVED FROM SRI KO VARGHESE FATHER) 200000 5 UNDISCLOSED INCOME (MONEY RECEIVED FROM SRI PELEXY K VARGHESE, BROTHER) - - - - - - 1315000 PROFIT ON SALE OF LAND - - - - - - 36000 SECTION 153C (B)&(C) (B)&(C) (B)&(C) (B)&(C) (B)&(C) (B)&(C) INTEREST UNDER SECTION 234A, 234B & 234C (G) (G) (G) (G) (G) (H) TOTAL 1103580 225558 341645 3574477 1454285 1940823 3262273 4. THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A) WH O CONFIRMED THE ASSESSMENT FOR ASSESSMENT YEAR 2006-07 TO 2008-09 B UT PARTLY CONFIRMED THE ASSESSMENT FOR STATISTICAL PURPOSES FOR ASSESSM ENT YEAR 2009-10 TO 2011-12 WHILE THE APPEAL OF THE ASSESSEE FOR THE AS SESSMENT YEAR 2012-13 WAS PARTLY ALLOWED. SO FAR THE ASSESSMENT YEARS 20 06-07 TO 2010-11 ARE CONCERNED, LEARNED A.R. VEHEMENTLY SUBMITTED BEFORE US THAT AS ON THE DATE OF SEARCH THESE ASSESSMENTS WERE COMPLETED BY ACCEPTING THE RETURNS FILED BY THE ASSESSEE UNDER SECTION 143(1) AND NO INCRIMINATING EVIDENCE OR MATERIAL WAS FOUND AT THE TIME OF SEARC H THEREFORE, THE PROVISION OF SECTION 153C READ WITH SECTION 153A CO ULD NOT HAVE BEEN INVOKED. THE ASSESSEE HAS FILED THE RETURN PRIOR T O THE DATE OF SEARCH AND THE ASSESSMENTS HAVE ACQUIRED FINALITY EITHER DUE T O ACCEPTANCE OF THE RETURN UNDER SECTION 143(1) OR THE PERIOD OF LIMITA TION OF ISSUANCE OF NOTICE UNDER SECTION 143(2) HAD EXPIRED. THESE ASSESSMENTS SINCE WERE NOT PENDING WOULD NOT HAVE ABATED UNDER SECTION 153A OF THE ACT. THE ONLY PENDING ASSESSMENTS I.E. THE ASSESSMENTS FOR ASSESS MENT YEAR 2011-12 AND 2012-13 GOT ABATED. SINCE THE ASSESSMENTS WERE NOT ABATED AND NO INCRIMINATING DOCUMENTS WERE FOUND THEREFORE, THE A SSESSMENTS MADE ARE INVALID. IN THIS REGARD HE RELIED ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF CIT-III, PUNE VS. SINHGAD TECHNICAL EDUCATIONAL SOCIETY CIVIL APPEAL NO.11080 OF 2017 DATED 29/08/2017. RE LIANCE WAS ALSO 6 PLACED ON THE FOLLOWING DECISIONS FOR THE PROPOSITI ON OF LAW THAT IF NO INCRIMINATING MATERIAL WAS FOUND RELATING TO THE YE AR, THE ASSESSING OFFICER CANNOT MAKE THE ASSESSMENT (I) PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL)-2 VS . INDEX SECURITIES PRIVATE LIMITED 2017 (9) TMI 585 DELHI HIGH COURT (II) PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) VS. T. S. PULSES PVT. LTD. 2017 (8) TMI 571 DELHI HIGH COUR T (III) CIT VS. PROMY KURIAKOSE [2016] 386 ITR 597 (KER) (IV) PRINCIPAL COMMISSIONER OF INCOME TAX, AHMEDABAD-3 V S. DIPAK JASHVANTLAL PANCHAL [2017] 397 ITR 153 (V) PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL)-2 VS . INDEX SECURITIES PRIVATE LTD., VIDYA SHANKAR INVEST MENT PRIVATE LIMITED 2017(9) TMI 585 DELHI HIGH COURT (VI) PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) VS. T. S. PULSES PVT. LTD. 2017 (8) TMI 571 DELHI HIGH COURT 5. LEARNED D. R., ON THE OTHER HAND, CONTENDED THAT THE INCRIMINATING MATERIAL WAS DULY FOUND. FOR THIS OUR ATTENTION WA S DRAWN TOWARDS THE STATEMENT RECORDED DURING THE COURSE OF THE SEARCH IN WHICH THE ASSESSEE HAS ACCEPTED THE CASH PAYMENT IN REPLY TO QUESTION NO. 4 FOR THE PURCHASE OF LAND. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS, CAREFULLY C ONSIDERED THE SAME ALONG WITH THE ORDERS OF THE TAX AUTHORITIES BELOW. WE HAVE GONE THROUGH THE PROVISIONS OF SECTION 153C AS WELL AS THE CASE LAWS AS RELIED BY LEARNED A.R. NOW THE QUESTION BEFORE US WHETHER THE ASSESS MENT MADE UNDER SECTION 153C IN THE CASE OF THE ASSESSEE FOR THE AS SESSMENT YEAR 2006-07 TO 2010-11 ARE VALID OR NOT, WHETHER ANY ADDITION C AN BE MADE IN ABSENCE OF ANY INCRIMINATING MATERIAL BEING FOUND DURING TH E COURSE OF SEARCH IF THE ASSESSMENT HAS ALREADY BEEN COMPLETED BEFORE THE DA TE OF SEARCH. TO DECIDE THIS ISSUE, WE HAVE TO LOOK INTO THE PROVISI ONS OF THE SECTION 153A UNDER CHAPTER XIV UNDER THE TITLE 'ASSESSMENT IN CA SE OF SEARCH OR REQUISITION'. THE PROVISIONS OF SECTION 153A, 153B & 153C WERE INSERTED BY 7 THE FINANCE ACT, 2003 W.E.F 1.6.2003. ORIGINALLY SE CTION 153A OF THE ACT DID NOT HAVE ANY SUB-SECTION. HOWEVER, SUB-SECTION (2) TO SECTION 153A WAS INSERTED BY THE FINANCE ACT, 2008 W.E.F FROM 1. 6.2003. SECTION 153A PROVIDES FOR AN ASSESSMENT IN CASE OF A PERSON IN W HOSE CASE SEARCH IS INITIATED U/S.132 OF THE ACT OR BOOKS OF ACCOUNT, O THER DOCUMENTS OR ANY ASSETS ARE REQUISITIONED UNDER SECTION 132A AFTER T HE 31ST DAY OF MAY, 2003. SECTION 153B PROVIDES FOR TIME LIMIT FOR COMP LETION OF ASSESSMENT UNDER SECTION 153A AND SECTION 153C OF THE ACT. SEC TION 153C PROVIDES FOR ASSESSMENT OF INCOME OF PERSON OR OTHER THAN PERSON IN RESPECT OF WHOM WARRANT OR AUTHORIZATION IS ISSUED U/S.132 OF THE A CT. SECTION 153A AND SECTION 153C ARE EXTRACTED BELOW: 153A. ASSESSMENT IN CASE OF SEARCH OR REQUISITION (1) NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 1 39, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECT ION 153, IN THE CASE OF A PERSON WHERE A SEARCH IS INITIATED UN DER SECTION 132 OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ANY ASS ETS ARE REQUISITIONED UNDER SECTION 132A AFTER THE 31ST DAY OF MAY, 2003, THE ASSESSING OFFICER SHALL (A) ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO FU RNISH WITHIN SUCH PERIOD, AS MAY BE SPECIFIED IN THE NOTICE, THE RETURN OF INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING W ITHIN SIX ASSESSMENT YEARS REFERRED TO IN CLAUSE (B), IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER AND SETT ING FORTH SUCH OTHER PARTICULARS AS MAY BE PRESCRIBED AND THE PROVISIONS OF THIS ACT SHALL, SO FAR AS MAY BE, APP LY ACCORDINGLY AS IF SUCH RETURN WERE A RETURN REQUIRE D TO BE FURNISHED UNDER SECTION 139 ; (B) ASSESS OR REASSESS THE TOTAL INCOME OF SIX ASSE SSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR REL EVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITION IS MADE : PROVIDED THAT THE ASSESSING OFFICER SHALL ASSESS OR REASSESS THE TOTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SUCH SIX ASSESSMENT YEARS : 8 PROVIDED FURTHER THAT ASSESSMENT OR REASSESSMENT, I F ANY, RELATING TO ANY ASSESSMENT YEAR FALLING WITHIN THE PERIOD OF SIX ASSESSMENT YEARS REFERRED TO IN THIS SUB-SECTION PE NDING ON THE DATE OF INITIATION OF THE SEARCH UNDER SECTION 132 OR MAKING OF REQUISITION UNDER SECTION 132A, AS THE CA SE MAY BE, SHALL ABATE. (2) IF ANY PROCEEDING INITIATED OR ANY ORDER OF ASS ESSMENT OR REASSESSMENT MADE UNDER SUB-SECTION (1) HAS BEEN AN NULLED IN APPEAL OR ANY OTHER LEGAL PROCEEDING, THEN, NOTWITH STANDING ANYTHING CONTAINED IN SUB-SECTION (1) OF SECTION 15 3, THE ASSESSMENT OR REASSESSMENT RELATING TO ANY ASSESSME NT YEAR WHICH HAS ABATED UNDER THE SECOND PROVISO TO SUB-SE CTION (1), SHALL STAND REVIVED WITH EFFECT FROM THE DATE OF RE CEIPT OF THE ORDER OF SUCH ANNULMENT BY THE PRINCIPAL COMMISSION ER OR COMMISSIONER : PROVIDED THAT SUCH REVIVAL SHALL CEASE TO HAVE EFFE CT, IF SUCH ORDER OF ANNULMENT IS SET ASIDE. EXPLANATION FOR THE REMOVAL OF DOUBTS, IT IS HEREBY DECLARED THAT, (I) SAVE AS OTHERWISE PROVIDED IN THIS SECTION, SECTION 153B AND SECTION 153C, ALL OTHER PROVISIONS OF THIS ACT SHALL APPLY TO THE ASSESSMENT MADE UNDER THIS SECTI ON ; (II) (II) IN AN ASSESSMENT OR REASSESSMENT MADE IN RESPE CT OF AN ASSESSMENT YEAR UNDER THIS SECTION, THE TAX S HALL BE CHARGEABLE AT THE RATE OR RATES AS APPLICABLE TO SUCH ASSESSMENT YEAR. 153C ASSESSMENT OF INCOME OF ANY OTHER PERSON (1) NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 1 39, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECT ION 153, WHERE THE ASSESSING OFFICER IS SATISFIED THAT ANY M ONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOO KS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED BELONGS OR BEL ONG TO A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A, THEN THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON AND THAT ASSESSING OFFICER SHALL PROCEED AGAINST EACH SUCH OTHER PERSO N AND ISSUE 9 SUCH OTHER PERSON NOTICE AND ASSESS OR REASSESS INC OME OF SUCH OTHER PERSON IN ACCORDANCE WITH THE PROVISIONS OF S ECTION 153A. PROVIDED THAT IN CASE OF SUCH OTHER PERSON, THE REF ERENCE TO THE DATE OF INITIATION OF THE SEARCH UNDER SECTION 132 OR MAKING OF REQUISITION UNDER SECTION 132A IN THE SEC OND PROVISO TO SUB-SECTION (1) OF SECTION 153A SHALL BE CONSTRUED AS REFERENCE TO THE DATE OF RECEIVING THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED BY THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON. (2) WHERE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS S EIZED OR REQUISITIONED AS REFERRED TO IN SUB-SECTION (1) HAS OR HAVE BEEN RECEIVED BY THE ASSESSING OFFICER HAVING JURISDICTI ON OVER SUCH OTHER PERSON AFTER THE DUE DATE FOR FURNISHING THE RETURN OF INCOME FOR THE ASSESSMENT YEAR RELEVANT TO THE PREV IOUS YEAR IN WHICH SEARCH IS CONDUCTED UNDER SECTION 132 OR REQU ISITION IS MADE UNDER SECTION 132A AND IN RESPECT OF SUCH ASSE SSMENT YEAR (A) NO RETURN OF INCOME HAS BEEN FURNISHED BY SUCH OTHER PERSON AND NO NOTICE UNDER SUB-SECTION (1) OF SECTI ON 142 HAS BEEN ISSUED TO HIM, OR (B) A RETURN OF INCOME HAS BEEN FURNISHED BY SUCH O THER PERSON BUT NO NOTICE UNDER SUB-SECTION (2) OF SECTI ON 143 HAS BEEN SERVED AND LIMITATION OF SERVING THE NOTICE UN DER SUB- SECTION (2) OF SECTION 143 HAS EXPIRED, OR (C) ASSESSMENT OR REASSESSMENT, IF ANY, HAS BEEN MA DE, BEFORE THE DATE OF RECEIVING THE BOOKS OF ACCOUNT O R DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED BY THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON, SUCH ASSESSING OFFICER SHALL ISSUE THE NOTICE AND ASSESS OR REASSESS TOTAL INCOME OF SUCH OTHER PERSON OF SUCH ASSESSMEN T YEAR IN THE MANNER PROVIDED IN SECTION 153A. 6.1 IN OUR OPINION, THE ASSESSING OFFICER ASSUMED J URISDICTION FOR FRAMING THE ASSESSMENT U/S.153C OF THE ACT WHERE TH E ASSESSING OFFICER IS SATISFIED THAT ANY MONEY, BULLION, JEWELLERY OR OTH ER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR RE QUISITIONED BELONGS OR BELONG TO A PERSON OTHER THAN THE PERSON IN WHOSE C ASE SEARCH IS CONDUCTED U/S.132 OF THE ACT. THEREFORE, FOR INITIA TING ACTION U/S.153C OF 10 THE ACT AND FRAMING ASSESSMENT U/S.153A OF THE ACT, THE PRE-REQUISITE IS THAT THE SATISFACTION OF THE ASSESSING OFFICER THAT THE MONEY, DOCUMENTS AND PAPERS, ETC BELONGS TO A PERSON OTHER THAN THE PERSON IN WHOSE CASE SEARCH IS CONDUCTED U/S.132 OF THE ACT. 6.2 IT IS APPARENT FROM THE LANGUAGE OF SECTION THA T THE SECTION DOES NOT REQUIRE THAT THE DOCUMENTS BELONGING TO THE ASSESSE E MUST BE INCRIMINATING DOCUMENTS. SECTION 153C GIVES THE JUR ISDICTION TO THE ASSESSING OFFICER ONCE THE DOCUMENTS BELONGING TO T HE ASSESSEE ARE FOUND IN THE CASE OF THE ASSESSEE IN WHOSE CASE THE SEARC H HAD TAKEN PLACE. IT IS NOT THE SUBMISSION OF LEARNED A. R. THAT DURING THE COURSE OF SEARCH, DOCUMENTS BELONGING TO THE ASSESSEE OR PERTAINING T O THE ASSESSEE WERE NOT FOUND. THE SUBMISSION OF LEARNED A.R. RELATES TO THAT NO INCRIMINATING DOCUMENTS HAVE BEEN FOUND DURING THE ASSESSMENT YEA R 2007-08 TO 2010- 11. WE, THEREFORE, REJECT THE CONTENTION OF LEARNE D A.R. THAT THE ASSESSMENTS FRAMED UNDER SECTION 153C READ WITH SEC TION 143(3) ARE INVALID. 6.3 NOW COMING TO THE SUBMISSION OF LEARNED A.R. WH ETHER ANY ADDITION CAN BE MADE IN THE ASSESSMENT MADE UNDER SECTION 15 3C WHEN NO INCRIMINATING DOCUMENT IS FOUND DURING THE COURSE O F SEARCH. WE NOTED THAT ON THE ISSUE WHETHER ANY ADDITION CAN BE MADE IN THE ASSESSMENT MADE UNDER SECTION 153A, WHEN NO INCRIMINATING DOCU MENTS IS FOUND DURING THE COURSE OF SEARCH, A SPECIAL BENCH WAS CO NSTITUTED IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD VS. DCIT, (2012) 137 ITD 287 (SB) (MUM) ON THE FOLLOWING QUESTION: 'WHETHER, ON THE FACTS AND IN LAW, THE SCOPE OF ASS ESSMENT U/S 153A ENCOMPASSES ADDITIONS, NOT BASED ON ANY INCRIM INATING MATERIAL FOUND DURING THE COURSE OF SEARCH? 11 6.4 BEFORE THE SPECIAL BENCH, LD SR. COUNSEL RELIED ON THE DECISION OF LMG INTERNATIONAL LTD. AS IS APPARENT FROM PARA 16 OF THAT ORDER. WE NOTED THAT IN THE SAID JUDGMENT IN PARA 52 OF ITS ORDER, THE TRIBUNAL HAS HELD THAT SECTION 153A COMES INTO OPERATION IF A SE ARCH OR REQUISITION IS INITIATED AFTER 31.5.2003. ON THE SATISFACTION OF T HIS CONDITION, THE ASSESSING OFFICER IS UNDER OBLIGATION TO ISSUE NOT ICE TO THE PERSONS REQUIRING HIM TO FURNISH THE RETURN OF INCOME OF SI X YEARS IMMEDIATELY PRECEDING THE YEAR OF SEARCH. THIS FINDING IMPLIED THAT THE PROCEEDINGS U/S.153A IS NOT TO BE RESTRICTED TO THE YEARS FOR WHICH INCRIMINATING MATERIAL IS FOUND DURING THE SEARCH. ULTIMATELY, I N RESPECT OF QUESTION REFERRED TO THE SPECIAL BENCH, THE SPECIAL BENCH IN PARA 58 OF ITS ORDER HELD AS UNDER: '58. THUS, QUESTION NO. 1 BEFORE US IS ANSWERED AS UNDER: A) IN ASSESSMENTS THAT ARE ABATED, THE ASSESSING OF FICER RETAINS THE ORIGINAL JURISDICTION AS WELL AS JURISD ICTION CONFERRED ON HIM U/S 153A FOR WHICH ASSESSMENTS SHALL BE MADE FOR EACH OF THE SIX ASSESSMENT YEARS SEPARATELY. B) IN OTHER CASES, IN ADDITION TO THE INCOME THAT H AS ALREADY BEEN ASSESSED, THE ASSESSMENT U/S 153A WILL BE MADE ON THE BASIS OF INCRIMINATING MATERIAL, WHICH IN THE CONTE XT OF RELEVANT PROVISIONS MEANS - (I) BOOKS OF ACCOUNT, O THER DOCUMENTS, FOUND IN THE COURSE OF SEARCH BUT NOT PR ODUCED IN THE COURSE OF ORIGINAL ASSESSMENT, AND; ( II) UNDIS CLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEAR CH'. 6.5 IN VIEW OF THE DECISION OF SPECIAL BENCH IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD., NO DOUBT THE ADDITION IN THE CASE OF THE ASSESSEE CAN BE MADE BY THE ASSESSING OFFICER ONLY ON THE BASIS OF INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH BUT THE ASSESSING OFFICER GOT JURISDICTION FOR INITIATING PROCEEDINGS U/S.153C R. W. SECTION 153A AGAINST THE ASSESSEE IN VIEW OF DOCUMENTS ETC. BELONGING T O THE ASSESSEE ARE 12 FOUND IN THE CASE OF THE PERSON IN WHOSE CASE SEARC H HAD TAKEN PLACE. THUS, THIS DECISION WILL HELP THE ASSESSEE. 6.6 SIMILAR VIEW HAS BEEN TAKEN IN THE CASES DISCUS SED AS UNDER: WE NOTED THAT HON'BLE DELHI HIGH COURT IN THE CASE OF CHETANDAS LAXMANDAS 254 CTR (DEL) 392 HAS TAKEN SIMILAR VIEW. IN PARA 11 OF THIS JUDGEMENT, THE HON'BLE HIGH COURT HELD THAT 'OBVIOU SLY AN ASSESSMENT HAS TO BE MADE UNDER THIS SECTION ONLY ON THE BASIS OF THE SEIZED MATERIAL'. EVEN WE NOTED THAT THE HON'BLE DELHI HIGH COURT IN THE CASE OF ANIL KUMAR BHATIA, 352 ITR 493 (DEL), UNDER PARA 20, IT HAS BE EN OBSERVED AS UNDER: EVEN IF ASSESSMENT ORDER HAD ALREADY BEEN PASSED I N RESPECT OF ONE OR ANY OF THE SIX RELEVANT ASSESSMENT YEARS EITHER UNDER SECTION 143(1)(A) OR 143(3) PRIOR TO THE INIT IATION OF SEARCH, STILL THE ASSESSING OFFICER IS EMPOWERED TO REOPEN THOSE PROCEEDINGS U/S 153A WITHOUT ANY FETTERS AND REASSESS TOTAL INCOME TAKING NOTE OF UNDISCLOSED INCOME, IF ANY, UNEARTHED DURING THE SEARCH. '20. A QUESTION MAY ARISE AS TO HOW THIS IS SOUGHT TO BE ACHIEVED WHERE AN ASSESSMENT ORDER HAD ALREADY BEEN PASSED IN RESPECT OF ALL OR ANY OF THOSE SIX ASSESSMENT YE ARS, EITHER UNDER SECTION 143(1)(A) OR SECTION 143(3) OF THE AC T. IF SUCH AN ORDER IS ALREADY IN EXISTENCE, HAVING OBVIOUSLY BEEN PASSED PRIOR TO THE INITIATION OF THE SEARCH/REQUISITION, THE ASSESSING OFFICER IS EMPOWERED TO REOPEN THOSE PROCEEDINGS AN D REASSESS THE TOTAL INCOME, TAKING NOTE OF THE UNDIS CLOSED INCOME, IF ANY, UNEARTHED DURING THE SEARCH.' THE ABOVE OBSERVATIONS OF HON'BLE HIGH COURT, WHICH ARE THOUGH OBITER DICTA, MAKE IT POINT CLEAR THAT WHERE AN ASSESSMENT ORDER HAS ALREADY BEEN PASSED FOR A YEAR OR YEARS WITHIN THE RELEVANT SIX ASSESSMENT YEARS, THEN THE ASSESSING OFFICER IS DUTY BOUND TO REOPEN THOSE PROCEEDINGS AND REASSESS THE TOTAL INCOME BUT BY TAKING NOTE OF THE UNDISCLOSED INCOME IF ANY, UNEARTHED DURING THE SEARCH. THE EXPRESSION U NEARTHED DURING THE 13 SEARCH IS QUITE SIGNIFICANT TO DENOTE THAT IN RESP ECT OF COMPLETED OR NON- PENDING ASSESSMENT, THE ASSESSING OFFICER ALBEIT DU TY BOUND TO ASSESS OR RESSSESS THE TOTAL INCOME BUT IF THERE IS SCOPE FOR ADDITIONS IN SUCH ASSESSMENT, ON THE BASIS OF INCOME UNEARTHED DURING THE SEARCH, HE CAN MAKE THE ADDITION. IN OTHER WORDS, THE DETERMINATIO N OF TOTAL INCOME IN RESPECT OF THE ASSESSMENT YEARS FOR WHICH THE ASSES SMENTS HAVE BEEN ALREADY COMPLETED ON THE DATE OF SEARCH, SHALL NOT BE INFLUENCED BY THE ITEMS OF INCOME OTHER THAN THOSE BASED ON THE MATER IAL UNEARTHED DURING THE COURSE OF SEARCH. HOWEVER, THE SCOPE OF SUCH DE TERMINATION OF TOTAL INCOME IS DIFFERENT IN RESPECT OF THE YEARS FOR WHI CH THE ASSESSMENTS ARE PENDING VIS-A-VIS THE YEARS FOR WHICH ASSESSMENTS A RE NON-PENDING. THE TOTAL INCOME SHALL BE DETERMINED IN RESPECT OF ASSE SSMENT YEAR FOR WHICH ORIGINAL ASSESSMENTS HAVE ALREADY BEEN COMPLETED ON THE DATE OF SEARCH BY RESTRICTING ADDITIONS ONLY TO THOSE WHICH FLOW F ROM INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. IF NO I NCRIMINATING MATERIAL IS FOUND IN RESPECT OF SUCH COMPLETED ASSESSMENT, THEN THE TOTAL INCOME IN THE PROCEEDINGS U/S 153A SHALL BE COMPUTED BY CONSI DERING THE ORIGINALLY DETERMINED INCOME. IF SOME INCRIMINATING MATERIAL I S FOUND IN RESPECT OF SUCH ASSESSMENT YEARS FOR WHICH THE ASSESSMENT IS N OT PENDING, THEN THE TOTAL INCOME WOULD BE DETERMINED BY CONSIDERING THE ORIGINALLY DETERMINED INCOME PLUS INCOME EMANATING FROM THE INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. IN RESPECT OF ASSESSME NT PENDING ON THE DATE OF SEARCH WHICH GOT ABATED IN TERMS OF SECOND PROVI SO TO SECTION 153A(1), THE TOTAL INCOME SHALL BE COMPUTED AFRESH UNINFLUEN CED BY THE FACT WHETHER OR NOT THERE IS ANY INCRIMINATING MATERIAL. WE NOTED THAT THE DECISION OF SPECIAL BENCH HAS BEEN CONFIRMED BY HON 'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. CONTINENTAL WAREHOUSI NG CORPORATION (NHAVA SHEVA) LTD. [2015] 374 ITR 645 (BOM). WE NO TED THAT HON'BLE KERALA HIGH COURT IN THE CASE OF CIT VS. PROMY KURI AKOSE [2016] 386 ITR 14 597 (KER) WHILE DISCUSSING THE PROVISIONS OF SECTIO N 153C UNDER PARA 10 OBSERVED AS UNDER: 10. A COMPARATIVE ANALYSIS OF THE PROVISIONS CONTA INED IN SECTIONS 153A AND 153C REVEAL THAT JURISDICTION UND ER SECTION 153C CAN BE INVOKED BY THE ASSESSING OFFICER ONLY W HEN MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS ARE SEIZED OR REQUISI TIONED AND IT IS FOUND THAT THE SEIZED OR REQUISITIONED ARTICL ES BELONGS OR BELONG TO A PERSON OTHER THAN THE PERSON REFERRED T O IN SECTION 153A. IN SUCH A CASE, THE ASSESSING OFFICER SHALL H AND OVER THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED TO THE ASSESSING OFFICER HAVING JURIS DICTION OVER SUCH OTHER PERSON. THEREUPON, IT IS FOR THE ASSESSI NG OFFICER HAVING JURISDICTION TO PROCEED AGAINST SUCH OTHER P ERSON BY ISSUING NOTICE AND COMPLETE ASSESSMENTS OR REASSESS MENTS AS THE CASE MAY BE, IN ACCORDANCE WITH SECTION 153A. T HEREFORE, THE FUNDAMENTAL JURISDICTIONAL REQUIREMENT FOR INVO KING THE POWERS UNDER SECTION 153C IS THE SEIZURE OR REQUISI TIONING OF BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS WHICH BELON G TO A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A. OTHERWISE, THE ASSESSING OFFICER HAS NO JURISDICTIO N AT ALL TO PROCEED UNDER SECTION 153C. THEREFORE, THE CONCLUSI ON OF THE TRIBUNAL THAT IN THE ABSENCE OF SEARCH MATERIAL, PR OCEEDINGS UNDER SECTION 153C CANNOT BE INITIATED BY THE ASSES SING OFFICER, WHICH FINDING IS CONSISTENT WITH THE PRECE DENTS REFERRED TO BY THE TRIBUNAL ITSELF, DOES NOT SPELL OUT ANY I LLEGALITY. 6.7 WE HAVE ALSO GONE THROUGH THE RECENT DECISION O F HON'BLE SUPREME COURT DATED 29/08/2017 IN THE CASE OF CIT VS. SINHG AD TECHNICAL EDUCATION SOCIETY, CIVIL APPEAL NO.11080 OF 2017 UN DER PARA 18 HELD AS UNDER: 18. THE ITAT PERMITTED THIS ADDITIONAL GROUND BY G IVING A REASON THAT IT WAS A JURISDICTIONAL ISSUE TAKEN UP ON THE BASIS OF FACTS ALREADY ON THE RECORD AND, THEREFORE, COUL D BE RAISED. IN THIS BEHALF, IT WAS NOTED BY THE ITAT THAT AS PE R THE PROVISIONS OF SECTION 153C OF THE ACT, INCRIMINATING MATERIAL WHICH WAS SEIZED HAD TO PERTAIN TO THE ASSESSMENT Y EARS IN QUESTION AND IT IS AN UNDISPUTED FACT THAT THE DOCU MENTS 15 WHICH WERE SEIZED DID NOT ESTABLISH ANY CO-RELATION , DOCUMENT-WISE, WITH THESE FOUR ASSESSMENT YEARS. SI NCE THIS REQUIREMENT UNDER SECTION 153C OF THE ACT IS ESSENTIAL FOR ASSESSMENT UNDER THAT PROVISION, IT BECOMES A JURIS DICTIONAL FACT. WE FIND THIS REASONING TO BE LOGICAL AND VALI D, HAVING REGARD TO THE PROVISIONS OF SECTION 153C OF THE ACT. PARA 9 OF THE ORDER OF THE ITAT REVEALS THAT THE ITAT HAD SCA NNED THROUGH THE SATISFACTION NOTE AND THE MATERIAL WHIC H WAS DISCLOSED THEREIN WAS CULLED OUT AND IT SHOWED THAT THE SAME BELONGS TO ASSESSMENT YEAR 2004-05 OR THEREAFTER. A FTER TAKING NOTE OF THE MATERIAL IN PARA 9 OF THE ORDER, THE POSITION THAT EMERGES THEREFROM IS DISCUSSED IN PARA 10. IT WAS SPECIFICALLY RECORDED THAT THE COUNSEL FOR THE DEPA RTMENT COULD NOT POINT OUT TO THE CONTRARY. IT IS FOR THIS REASON THE HIGH COURT HAS ALSO GIVEN ITS IMPRIMATUR TO THE AFO RESAID APPROACH OF THE TRIBUNAL. THAT APART, LEARNED SENIO R COUNSEL APPEARING FOR THE RESPONDENT, ARGUED THAT NOTICE IN RESPECT OF ASSESSMENT YEARS 2000-01 AND 2001-02 WAS EVEN TIME BARRED. 6.8. WE HAVE ALSO GONE THROUGH OTHER DECISIONS, COP Y OF WHICH HAS BEEN PLACED ON RECORD BEFORE US. THE PROPOSITIONS OF THE LAW IN ALL THESE DECISIONS ARE THAT IF DURING THE COURSE OF SEARCH, DOCUMENTS PERTAINING TO THE ASSESSEE ARE FOUND, THE ASSESSING OFFICER HAS T HE JURISDICTION UNDER SECTION 153C OF THE ACT BUT THE ADDITION IN RESPECT OF THE ASSESSMENT, WHICH HAS NOT BEEN ABATED, CAN BE MADE ONLY ON THE BASIS OF THE INCRIMINATING MATERIAL FOUND DURING THE COURSE OF S EARCH NOT OTHERWISE. 7. NOW COMING TO ASSESSMENT YEAR 2006-07 TO 2010-11 . WE NOTED THAT NO INCRIMINATING MATERIAL, DURING THE COURSE OF SEA RCH, WAS FOUND IN RESPECT OF THE AGRICULTURAL INCOME TREATED AS UNEXP LAINED CASH CREDIT AS WELL AS CASH SHORTAGE TREATED AS UNEXPLAINED INVEST MENT. THEREFORE, NO ADDITION IN RESPECT OF THESE CAN BE MADE. WE, THER EFORE, DELETE THE ADDITION IN EACH OF THE ASSESSMENT YEARS IN RESPECT OF AGRICULTURAL INCOME TREATED AS UNEXPLAINED CASH CREDIT AND CASH SHORTAG E TREATED AS UNEXPLAINED INVESTMENT. THUS, THE GROUNDS IN EACH OF THESE ASSESSMENT YEARS RELATING TO THESE ADDITIONS STAND ALLOWED. 16 I.T.A.NO.264/COCH/2013 8. NOW COMING TO THE ADDITION OF RS.29,30,600/- AS CONFIRMED BY THE CIT(A) RELATING TO ASSESSMENT YEAR 2009-10, THE FAC TS OF THE CASE, IN BRIEF, ARE THAT DURING THE COURSE OF SEARCH, STATEMENT OF THE ASSESSEE WAS RECORDED. THE RELEVANT QUESTION NO. 4 AND ANSWER T HERETO IN THIS REGARD IS REPRODUCED AS UNDER: Q.4 CAN YOU EXPLAIN THE ASSETS OF YOUR FAMILY ? ANS. NEARLYD FIVE YEARS BACK I HAVE PURCHASED 19 C ENTS OF LAND NEAR MUVATTUPUZHA JUNCTION FOR RS.25,000/- PER CENT. I HAVE ALSO PURCHASED 55 CENTS OF LAND AT NELLIMALA I N PIRAVOM ROAD FOUR YEARS BACK @15,000/- PER CENT. BESIDES T HIS, 1 ACRE 36 CENTS AT PERINGAZA @RS.20,000/- NEARLY FOUR YEARS BACK. IN MUDAVOOR 5 CENTS OF PLOT @RS.18,000/- PER CENT WAS ALSO PURCHASED. ANOTHER 23 CENTS OF LAND AT VAYANA SALAPADY AT KOTHAMANGALAM WAS ALSO PURCHASED 3 YEARS BACK @RS.50,000/- PER CENT. I HAVE ALSO A MARUTHI RITZ CAR. 8.1 THE ASSESSING OFFICER, ON THE BASIS OF THE SAID STATEMENT, WORKED OUT THE INVESTMENT MADE BY THE ASSESSEE OUTSIDE THE BOOKS OF ACCOUNT FOR LAND TRANSACTION AS DETAILED BELOW: S L . NO DATE DOC . NO. DOC. PRICE RS. PRICE PAID RS. OTHER EXP. RS. TOTAL RS. PARTICULARS OF LAND 1 18.06.2008 3724/08 3,00,000 9,81,000 38,000 10,19,000 49.05 CENTS IN SY.NO.491/2/2AGRL. LAND IN ARAKUZHAPANCHAYATH 2 18.06.2008 3725/08 80,000 3,01,400 10,000 3,11,400 15.070 CENTS IN SY. NO.492/2/2 IN ARAKUZHAPANCHAYATH 3 02.07.2008 4096/08 2,20,000 7,00,000 28,000 7,28,000 35 CENTS IN SY. NO.491/2/2 IN THE NAME OF WIFE MINI ELDHOSE AGRL. LAND IN ARAKUZHAPANCHAYATH 17 4 02/07/2008 4095/08 2,20,000 7,29,200 28,000 7,57,000 36,460 CENTS IN SY.NO.491/2/2 IN THE NAME OF FATHER K.O. VARGHESE AGRL. LAND IN ARAKUZHAPANCHAYATH 5 10.07.2008 4267/08 50,000 1,08,000 7,000 1,15,000 6 CENTS IN SY.NO.698/ 5/3 PALPRA PANCHAYAT WHEN THE ASSESSING OFFICER ASKED THE SOURCE OF INVE STMENT THE ASSESSEE EXPLAINED THAT THE PAYMENT FOR ALL THESE INVESTMENT S WAS MADE OUT OF THE LOAN TAKEN BY THE ASSESSEE AS DETAILED BELOW: 04/09/2008 RELIANCE CAPITAL RS. 7,50,000 04/09/2008 STANDARD CHARTERED BANK RS.11,00,000 01/11/2008 BARCLAYS BANK RS.15,00,000 THE ASSESSING OFFICER WAS NOT SATISFIED ABOUT THE S OURCE AS THEY WERE TAKEN IN THE NAME OF M/S WHITELINES MARKETING ASSOC IATES, A PARTNERSHIP FIRM IN WHICH THE ASSESSEE IS THE MANAGING DIRECTOR AND WAS CREDITED IN THE BOOKS OF ACCOUNT OF THE SAID FIRM. THE ASSESSI NG OFFICER NOTED THAT AFTER DEDUCTING THE BANK CHARGES, THE SAID LOAN HAS BEEN CREDITED INTO THE BOOKS OF THE ASSESSEE FIRM. THE LOANS WERE TAKEN S UBSEQUENTLY WHILE ALL FIVE PIECES OF LAND WERE REGISTERED IN THE NAME OF THE ASSESSEE ON 18/06/2008, 02/07/2008 AND 10/07/2008. THE ASSESSI NG OFFICER TOOK THE VIEW THAT NO SELLER WILL REGISTER THE LAND IN FAVOU R OF THE ASSESSEE UNTIL AND UNLESS HE RECEIVED THE ON-MONEY. THE ASSESSING OFF ICER THEREFORE MADE THE ADDITION OF RS.29,30,600/-. WHEN THE MATTER WE NT BEFORE THE CIT(A), THE ASSESSEE SUBMITTED AN AFFIDAVIT BEFORE THE CIT( A), AVAILABLE AT PAGE NO. 57 OF THE PAPER BOOK, RETRACTING THE STATEMENT MADE DURING THE COURSE OF SEARCH. THE AFFIDAVIT IS DATED 09/03/201 6. NO SUCH RETRACTION WAS MADE BEFORE FILING OF THE RETURN OR DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 18 9. WE HAVE HEARD THE RIVAL SUBMISSIONS, CAREFULLY C ONSIDERED THE SAME ALONG WITH THE ORDERS OF THE TAX AUTHORITIES BELOW. LEARNED A.R. VEHEMENTLY CONTENDED BEFORE US THAT THE CIT(A) WAS BOUND TO CONSIDER THE AFFIDAVIT SUBMITTED BY THE ASSESSEE RETRACTING THE STATEMENT MADE UNDER SECTION 132(4) OF THE ACT DURING THE COURSE O F THE SEARCH. THE CIT(A) SINCE HAVE ALL THE POWERS WHAT THE ASSESSING OFFICER HAS IN RESPECT OF THE ISSUE BEFORE HIM THEREFORE, THE AFFIDAVIT FI LED BY THE ASSESSEE MUST BE ACCEPTED. THE CIT(A) WAS BOUND TO EXAMINE THE D EPONENTS BEFORE REJECTING THE AFFIDAVIT FILED BY THE ASSESSEE IN RE SPECT OF THE RETRACTION OF THE STATEMENT GIVEN BY THE ASSESSEE DURING THE COUR SE OF SEARCH. IN THIS REGARD, LEARNED A.R. DRAWN OUR ATTENTION TOWARDS TH E DECISION OF HON'BLE SUPREME COURT IN THE CASE OF MEHTA PARIKH & CO. VS. CIT [1956] 30 ITR 181 (SC) WHICH WE HAVE LOOKED INTO. WE NOTED THAT THE FACTS INVOLVED IN THAT DECISION ARE DIFFERENT FROM THE FACTS INVOLVED IN THE CASE OF THE ASSESSEE. IN THAT CASE THE ASSESSING OFFICER HAS D ULY ACCEPTED THE CASH BOOK AND THE ENTRIES THEREIN, WHICH WERE NOT CHALLE NGED BY THE REVENUE. EVEN NO FURTHER DOCUMENTS AND THE VOUCHERS IN RELAT ION TO THOSE ENTRIES WERE CALL FOR. THE ASSESSEE HAS SUBMITTED THREE AF FIDAVITS. NEITHER THE ASSESSING OFFICER NOR THE CIT(A) CONSIDERED IT NECE SSARY TO CALL FOR THOSE PARTIES IN ORDER TO CROSS EXAMINE THEM WITH REFEREN CE TO THE STATEMENT MADE BY THEM IN THEIR AFFIDAVIT. UNDER THESE CIRCU MSTANCES THE COURT HELD THAT IT WAS NOT OPEN TO THE REVENUE TO CHALLENGE TH E CORRECTNESS OF THE CASH ENTRIES OR THE STATEMENT MADE BY THOSE DEPONEN TS IN THEIR AFFIDAVITS. IN THE CASE BEFORE US, WE NOTED THAT THE ASSESSEE, IN THE STATEMENT RECORDED DURING THE COURSE OF SEARCH, HAS HIMSELF A CCEPTED OF MONEY BEING PAID BY HIM BUT HE NEVER RETRACTED THE SAID S TATEMENT EITHER BEFORE ADI OR BEFORE THE ASSESSING OFFICER. THE STATEMENT WAS RETRACTED ONLY BEFORE THE CIT(A) BY FILING AN AFFIDAVIT DATED 09/0 3/2016 WHILE THE SEARCH HAD TAKEN PLACE ON 02/11/2011. 19 9.1 IT IS SETTLED LAW IN VIEW OF THE DECISION OF IT AT, MUMBAI BENCH IN THE CASE OF HIRALAL MAGANLAL & CO. VS. DCIT [2005] 96 ITD 113 THAT WHERE THE ASSESSEE HAD MADE VOLUNTARY DECLARATION ON OATH UNDER SECTION 132(4) AND INDUCED THE DEPARTMENTAL AUTHORITIES TO ACT UPO N THE SAME AT THE TIME OF SEARCH AND ITS ACCEPTANCE BY THE DEPARTMENT AL AUTHORITIES BUT DEPARTMENTAL AUTHORITIES DID NOT PROCEED FURTHER WI TH THE INVESTIGATION IN ORDER TO LOCATE UNACCOUNTED INCOME, THE ASSESSEE CA NNOT DENY LATER THE TRUTH OR THE CORRECTNESS OF THE DECLARATION MADE AT THE TIME OF SEARCH. WHERE THE RETRACTION WAS NOT SUPPORTED BY ANY INDEP ENDENT OR RELIABLE EVIDENCE TO PROVE INCORRECT NATURE OF FACTS CONFINE D IN THE ORIGINAL STATEMENT, THE ASSESSING OFFICER COULD BE JUSTIFIED IN MAKING IMPUGNED ADDITION ON THE BASIS OF THE STATEMENT AT THE TIME OF SEARCH. WE NOTED THAT IN THE CASE OF CARPENTERS CLASSICS (EXIM) P. L TD. VS. DCIT [2008] 299ITR (A.T.) 124 (ITAT[BANG]), THE TRIBUNAL HAS HE LD THAT WHERE RETRACTION OF ADMISSION OF THE UNDISCLOSED INCOME I S TO BE MADE IS ACCEPTED FROM THE ASSESSEE OR THE PERSON ADMITTING UNDISCLOSED INCOME TO DO SO WITHIN A REASONABLE TIME WHEN THE RETRACTION IS DETAILED AND THERE IS LONG INTERVAL BETWEEN THE ADMISSION AND THE RETRACT ION, BENEFIT OF RETRACTION CANNOT EASILY BE ACCEPTED. WHEN CREDIT ENTRIES ARE FOUND IN THE BOOKS DURING THE COURSE OF SEARCH OR WHERE RECEIPTS WERE ALSO THERE ALONG WITH CHEQUE RECEIPT AND CHEQUE RECEIPTS WERE ADMITT ED TO BE ADDITIONAL JOBWORK RECEIPT AND SUCH ADDITION JOBWORK RECEIPTS IN CASH WERE ADMITTED TO BE UNDISCLOSED INCOME THEN RETRACTION AFTER THRE E MONTHS WITHOUT THERE BEING ANY SUPPORT AND REASONS PARTICULARLY WHEN NO EVIDENCE WAS FOUND, THE RETRACTION WAS NOT TO BE ACCEPTED. THE AFFIDAVIT DOES NOT SUPPORT ANY BOOK ENTRIES BUT HAD ONLY RETRACTED THE STATEMENT MADE BY THE ASSESSEE. THEREFORE, THE DEC ISION OF MEHTA PARIKH & CO. (SUPRA) WILL NOT SUPPORT THE ASSESSEES CASE. HON'BLE SUPREME COURT 20 IN THE CASE OF CIT VS. SUN ENGINEERING WORKS P. LTD . [1992] 198 ITR 297 (SC) FOR THE INTERPRETATION AND APPLICABILITY OF A CASE HELD AS UNDER: IT IS NEITHER DESIRABLE NOR PERMISSIBLE TO PICK OU T A WORD OR A SENTENCE FROM THE JUDGMENT OF THE SUPREME COURT DIV ORCED FROM THE CONTEXT OF THE QUESTION UNDER CONSIDERATIO N AND TREAT IT TO BE THE COMPLETE LAW DECLARED BY THE COU RT. THE JUDGMENT MUST BE READ AS A WHOLE AND THE OBSERVATIO NS FROM THE JUDGMENT HAVE TO BE CONSIDERED IN THE LIGHT OF THE QUESTIONS WHICH WERE BEFORE THE COURT. A DECISION O F THE SUPREME COURT TAKES ITS COLOUR FROM THE QUESTIONS I NVOLVED IN THE CASE IN WHICH IT IS RENDERED AND, WHILE APPLYIN G THE DECISION TO A LATER CASE, COURTS MUST CAREFULLY TRY TO ASCERTAIN THE TRUE PRINCIPLE LAID DOWN BY THE DECISION. IN VIEW OF THE FACTS AND CONTENTS BEING DIFFERENT I N THE CASE OF THE ASSESSEE, WE REJECT THIS PLEA OF LEARNED A.R. 9.2 THE RETRACTION AFTER EXPIRY OF FIVE YEARS CANNO T BE ACCEPTED. NOT ONLY THIS, WE NOTED THAT THE ASSESSEE HIMSELF BEFOR E THE ASSESSING OFFICER TRIED TO EXPLAIN THE SOURCE OF THE INVESTMENTS MADE OUTSIDE THE BOOKS OF ACCOUNT IN THE LAND TRANSACTION TO THE EXTENT OF RS .29,30,600/- BY TAKING THE LOAN FROM RELIANCE CAPITAL, BARCLAYS BANK AND S TANDARD CHARTERED BANK AMOUNTING TO RS.7,50,000/-, RS.11,00,000/- AND RS.15,00,000/- RESPECTIVELY. THESE LOANS WERE TAKEN ON 04/09/2008 , 01/11/2008 AND 04/09/2008 WHILE THE ASSESSEE HAS PURCHASED THE LAN D VIDE SALE DEED REGISTERED ON 18/06/2008, 02/07/2008 AND 10/07/2008 . WE DO AGREE WITH THE CONTENTION OF LEARNED D.R. AND THE FINDING GIVE N BY THE AUTHORITIES BELOW THAT NO SELLER WOULD TRANSFER THE LAND UNTIL AND UNLESS HE RECEIVED THE ON-MONEY AGREED BETWEEN THE TWO. EXPLAINING TH E SOURCE OF ON- MONEY DOES NOT PROVE THAT THE ASSESSEE HAS PAID THE ON-MONEY FOR THE PURCHASE OF LAND. IN VIEW OF THIS FACT, WE DO NOT FIND ANY ILLEGALITY OR INFIRMITY IN THE ORDER OF CIT(A). THIS IS THE SETT LED LAW THAT THE STATEMENT RECORDED DURING THE COURSE OF THE SEARCH WILL BE VA LUABLE EVIDENCE BEING INCRIMINATING DOCUMENT FOUND DURING THE COURSE OF S EARCH. HON'BLE 21 JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. S T. FRANCIS CLAY DCOR TILES [2016] 385 ITR 624 (KER) HAS HELD AS UNDER: 20. ON A PLAIN READING OF SECTION 153A, IT IS CLEA R THAT ONCE SEARCH IS INITIATED UNDER SECTION 132 OR A REQUISIT ION IS MADE UNDER SECTION 132A AFTER THE 31ST DAY OF MAY 2003, THE ASSESSING OFFICER IS EMPOWERED TO ISSUE NOTICE TO S UCH PERSON REQUIRING HIM TO FURNISH RETURN OF INCOME IN RESPEC T OF EACH ASSESSMENT YEAR FOLLOWING WITHIN SIX ASSESSMENT YEA RS REFERRED TO IN CLAUSE (B). IT FURTHER TREATS THE RE TURNS SO FILED AS IF SUCH RETURN WERE A RETURN REQUIRED TO BE FURN ISHED UNDER SECTION 139. SO THAT ON A READING OF SECTION 153A(1 ) IT IS CATEGORICAL AND CLEAR THAT ONCE A NOTICE IS ISSUED AND THE ASSESSING OFFICER HAS REQUIRED THE ASSESSEE TO FURN ISH RETURN FOR A PERIOD OF SIX ASSESSMENT YEARS AS CONTEMPLATE D UNDER CLAUSE (B) THEN THE ASSESSEE HAS TO FURNISH ALL DET AILS WITH RESPECT TO EACH ASSESSMENT YEAR SINCE THE SAME IS T REATED AS A RETURN FILED UNDER SECTION 139. IT IS TRUE THAT A S PER THE FIRST PROVISO, THE ASSESSING OFFICER IS BOUND TO ASSESS O R REASSESS THE TOTAL INCOME WITH RESPECT TO EACH ASSESSMENT YE AR FOLLOWING THE SIX ASSESSMENT YEARS SPECIFIED IN SUB -CLAUSES (A) AND (B) OF SECTION 153A. WE, THEREFORE, DISMISS GROUND NO. 4. THUS, THE AP PEAL FOR ASSESSMENT YEAR 2009-10 IS PARTLY ALLOWED. 10. NOW COMING TO ASSESSMENT YEAR 2011-12. SO FAR GROUND NOS. 1 TO 3 ARE CONCERNED, AS DISCUSSED WHILE DISPOSING GROUND NO. 1 TO 3 IN PRECEDING PARAGRAPH RELATING TO ASSESSMENT YEARS 20 06-07 AND 2010-11, WE DISMISS THE SAID GROUNDS AS IN THIS CASE WE NOTE D THAT THE RETURN FOR THE AFORESAID ASSESSMENT YEAR HAS BEEN FILED BY THE ASSESSEE AFTER THE SEARCH HAD TAKEN PLACE ON 02/11/2011 NOT PRIOR TO T HAT. SINCE THE SEARCH HAD TAKEN PLACE PRIOR TO THAT THEREFORE, THE ASSESS MENT FOR THE IMPUGNED ASSESSMENT YEAR HAS BEEN ABATED BEING PENDING AT TH E TIME OF SEARCH. THUS, GROUND NO. 1 TO 3 STAND DISMISSED. 22 11. GROUND NO. 4 & 5 RELATE TO THE SUSTENANCE OF ADDITION OF RS.10,43,928/- TREATING IT TO BE UNEXPLAINED INVEST MENT. 12. THE FACTS RELATING TO THIS ADDITION ARE THAT TH E ASSESSING OFFICER, DURING THE COURSE OF ASSESSMENT, ASKED THE ASSESSEE TO FURNISH THE CASH FLOW STATEMENT WHICH THE ASSESSEE HAS PRODUCED AS U NDER: SOURCE AMOUNT APPLICATION AMOUNT OPENING BALANCE 4,83,751 INCOME TAX 6,010 CATHOLIC SYRIAN BANK SB A/C NO.0319 INTEREST 238 CATHOLIC SYRIAN BANK SB A/C NO.0319 1,016 CATHOLIC SYRIAN BANK SB A/C NO.0200 INTEREST 41 INCOME - TAX (MINI ELDHOSE) 1,740 OTHER INCOME 5,60,000 PERSONAL EXPENSE 1,20,000 PERSONAL EXPENSE (MINI ELDHOSE) 60,000 AGRICULTURE INCOME 3,00,000 BARCLAYS BANK - PRINCIPAL 3,98,184 AGRICULTURAL INCOME (MINI ELDHOSE) 2,00,000 BARCLAYS BANK - INTEREST 85,680 PROFIT FROM BUSINESS (MINI ELDHOSE) 3,65,000 RELIANCE CAPITAL LOAN REPAYMENT PRINCIPAL 1,79,828 ERNAKULAM DISTRICT CO - OP BANK INT.SB A/C.5245 (MINI ELDHOSE) 450 RELIANCE CAPITAL LOAN REPAYMENT INTEREST 95,248 ERNAKULAM DISTRICT CO - OP BANK INTSB A/C.61 35 (K O VARGHESE) 434 STANDARD CHARTERED BANK LOAN REPAYMENT PRINCIPAL 3,62,722 CATHOLIC SYRIAN BANK SB A/C. NO.0200 INTEREST 98 STANDARD CHARTERED BANK LOAN REPAYMENT INTEREST 1,75,478 23 DRAWING FROM BUSINESS, M/S. WHITE LINE MARKETING ASSOCIATES 5,00,000 ERNAKULAM DISTRICT CO-OP BANK SB A/C NO.5245 (MINI) 450 ERNAKULAM DISTRICT CO-OP BANK SB A/C NO.6135 (VARGHESE) 934 INVESTMENT IN BUSINESS- M/S WHITELINE MARKETING ASSOCIATES 4,00,000 MONEY GIVEN TO BROTHER PELEXY K VARGHESE 5,00,000 TUITION FEE 20,000 CLOSING BALANCE 2,722 2410012 2410012 12.1 THE ASSESSING OFFICER HAS RECASTED THE SAID CA SH FLOW BY TAKING THE OPENING BALANCE TO BE ZERO AS IN THE RECASTED CASH FLOW STATEMENT FOR ASSESSMENT YEAR 2010-11 THE CLOSING BALANCE WAS TAK EN TO BE ZERO. THE ASSESSING OFFICER THEREFORE, MODIFIED THE CASH FLOW STATEMENT AND NOTED THAT THERE WAS A CASH SHORTAGE TO THE EXTENT OF RS. 10,43,928/-. 13. WE HAVE HEARD THE RIVAL SUBMISSIONS, CAREFULLY CONSIDERED THE SAME ALONG WITH THE ORDERS OF THE TAX AUTHORITIES BELOW. SINCE THE ASSESSMENT FOR THE ASSESSMENT YEAR 2010-11 WAS NOT ABATED AND NO MATERIAL WAS FOUND DURING THE COURSE OF SEARCH, ON THE BASIS OF WHICH THE CASH FLOW STATEMENT FOR THE ASSESSMENT YEAR 2010-11 HAS TO BE MODIFIED, THEREFORE, IN OUR VIEW, THE ASSESSEE HAS TO GET THE SET OFF OF OPENING BALANCE OF THE CASH IN HAND AMOUNTING TO RS.4,83,751/-. WE ACCORD INGLY REDUCE THE ADDITION BY THE SAID AMOUNT. WE ALSO NOTED THAT TH E ASSESSEE HAS SHOWN THE PROFIT FROM THE BUSINESS BELONGING TO MINI ELDH OSE AND THE ASSESSEE HAS ALSO CONSIDERED THE EXPENSES AS WELL AS THE DRA WING OF MINI ELDHOSE IN HER CASH FLOW STATEMENT. THEREFORE, IN OUR OPINION , THE ASSESSING OFFICER WAS NOT CORRECT IN LAW EXCLUDING THE SUM OF RS.3,65 ,000/- PROFIT EARNED 24 FROM THE SAID BUSINESS AS THE CASH TO THAT EXTENT M UST HAVE BEEN AVAILABLE WITH THE ASSESSEE DURING THE YEAR. 13.1 THE OTHER DISPUTE, WHY THERE IS SHORTAGE OF TH E CASH, RELATES TO THE AGRICULTURE INCOME AMOUNTING TO RS.2,00,000/- EARNE D BY MINI ELDHOSE. THE ASSESSEE HAS TAKEN IT TO BE ONE OF THE SOURCES OF THE AVAILABLE CASH WHILE THE ASSESSING OFFICER, WHEN RECASTED THE CASH FLOW STATEMENT, IGNORED THE SAID AGRICULTURE INCOME. SINCE THE FAC TS RELATING TO THE AGRICULTURE INCOME EARNED BY MINI ELDHOSE AND HOLDI NG OF THE LAND BY HER ARE NOT BEFORE US, THEREFORE, WE CANNOT DECIDE HOW MUCH AGRICULTURE INCOME WOULD HAVE BEEN EARNED BY MINI ELDHOSE. TO THE EXTENT THE AGRICULTURE INCOME IS EARNED BY HERE, THE SAME WILL BE AVAILABLE AS A SOURCE OF RECEIPT OF THE CASH IN THE HANDS OF THE A SSESSEE. SINCE NEITHER THE ASSESSING OFFICER NOR THE CIT(A) AND EVEN THE A SSESSEE HAS NOT BROUGHT OUT ON RECORD ANY DOCUMENT IN THIS REGARD T HEREFORE, IN THE INTEREST OF JUSTICE AND FAIR PLAY TO BOTH THE PARTI ES, WE SET ASIDE THE ISSUE FOR THE PURPOSE OF DETERMINING THE SHORTAGE OF CASH IN RESPECT OF THE AGRICULTURAL INCOME EARNED BY MINI ELDHOSE TO THE F ILE OF THE ASSESSING OFFICER WITH THE DIRECTION THAT THE ASSESSING OFFIC ER, ON THE BASIS OF THE QUANTUM OF THE LAND OWNED BY MINI ELDHOSE, SHALL ES TIMATE THE AGRICULTURE INCOME AND GIVE THE CREDIT TO THE ASSESSEE IN RESPE CT OF THE SAID INCOME AGAINST THE CASH SHORTAGE. THEREFORE, EXCEPT THE E STIMATION OF THE AGRICULTURE INCOME OF MINI ELDHOSE, WE REDUCE THE A DDITION OF THE CASH SHORTAGE BY RS.4,83,751/- AND RS.3,65,000/-. THUS, THIS GROUND IS PARTLY ALLOWED. 14. GROUND NOS. 6, 7 & 8 RELATE TO TREATING THE AGR ICULTURE INCOME SHOWN BY THE ASSESSEE AT RS.3,00,000/- TO BE THE IN COME FROM OTHER SOURCES. SO FAR THE AVAILABILITY OF SOURCE OF THIS AMOUNT AGAINST THE OUTGOING WHILE ESTIMATING THE CASH SHORTAGE, WE NOT ED THAT THE ASSESSING 25 OFFICER IN THE MODIFIED CASH FLOW STATEMENT HAS TAK EN THE SUM OF RS.3,00,000/- AS INCOME SHOWN BY THE ASSESSEE AS AG RICULTURE INCOME TREATING IT AS UNDISCLOSED INCOME THEREFORE, GROUND NO. 8 TAKEN BY THE ASSESSEE BECOMES INFRUCTUOUS AND STANDS DISMISSED A S SUCH. 14.1 NOW COMING TO THE ESTIMATION OF THE AGRICULTUR E INCOME. WE HAVE HEARD THE RIVAL SUBMISSIONS, CAREFULLY CONSIDERED T HE SAME ALONG WITH THE ORDERS OF THE TAX AUTHORITIES BELOW. WE NOTED THAT DURING THE ASSESSMENT YEAR 2006-07, THE ASSESSEE WAS HAVING 54 CENTS OF THE AGRICULTURAL LAND AND FROM WHICH THE ASSESSEE HAS RETURNED THE AGRICU LTURE INCOME TO THE EXTENT OF RS.60,000/-. DURING THE ASSESSMENT YEAR 2007-08 AND 2008-09 THE ASSESSEE HAS RETURNED THE AGRICULTURE INCOME AT RS.60,000/- AND RS.2,00,000/-. DURING THE ASSESSMENT YEAR 2009-10 ALSO, THE ASSESSEE HAS RETURNED THE AGRICULTURE INCOME AT RS.2,00,000/ -. AT THE END OF THE ASSESSMENT YEAR 2009-10, THE ASSESSEE HAS BOUGHT TH E AGRICULTURAL LAND MEASURING 141.580 CENTS AND SUBSEQUENT TO THAT ALSO THE ASSESSEE HAS BROUGHT 23 CENTS OF AGRICULTURAL LAND AT VAYANASALA PADY AT KOTHAMANGALAM. THIS IS AS PER THE STATEMENT GIVEN BY THE ASSESSEE DURING THE COURSE OF SEARCH IN REPLY TO QUESTION NO . 4. THUS, DURING THE IMPUGNED ASSESSMENT YEAR THE ASSESSEE WAS HAVING AG RICULTURAL LAND TO THE EXTENT OF 218.580 CENTS. DURING THE ASSESSMENT YEAR 2010-11 ALSO THE ASSESSEE HAS RETURNED THE AGRICULTURAL INCOME AT RS .2,00,000/-. THE RETURN FOR THE ASSESSMENT YEAR 2006-07 TO 2010-11 H AS BEEN PROCESSED UNDER SECTION 143(1) AND PRIOR TO THE DATE OF SEARC H. THUS, THE AGRICULTURE INCOME TO THAT EXTENT STAND ACCEPTED BY THE REVENUE . NO ACTION EITHER UNDER SECTION 263 OR UNDER SECTION 147 HAS BEEN TAK EN BY THE REVENUE. THE ASSESSEE DURING THE IMPUGNED ASSESSMENT YEAR IN A BELATED RETURN HAS SHOWN THE AGRICULTURE INCOME AT RS.3,00,000/-. THE ASSESSING OFFICER HAS TREATED THE SAID INCOME NOT TO BE THE AGRICULTU RE INCOME BUT THE INCOME FROM UNDISCLOSED SOURCES. WHEN THE MATTER W ENT BEFORE THE 26 CIT(A), THE CIT(A) UPHELD THE ACTION OF THE ASSESSI NG OFFICER. SINCE IN OUR OPINION NO ADDITION CAN BE MADE IN THE ASSESSMENT Y EAR 2006-07 TO 2010- 11 AS THOSE ASSESSMENTS WERE NOT ABATED AND NO INCR IMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH WHICH MAY PRO VE THAT THE ASSESSEE HAS NOT EARNED THE AGRICULTURE INCOME DURING THOSE YEARS AS RETURNED BY THE ASSESSEE THEREFORE, WE DID NOT UPHOLD THE ACTIO N OF THE ASSESSING OFFICER. IMPLIEDLY THE AGRICULTURE INCOME RETURNED BY THE ASSESSEE STANDS DULY ACCEPTED BY THE REVENUE. THE LEARNED A.R. BEF ORE US EVEN THOUGH VEHEMENTLY CONTENDED THAT THE ASSESSEE WAS HAVING A GRICULTURE INCOME TO THAT EXTENT AND IT IS NOT NECESSARY TO MAINTAIN THE BOOKS OF ACCOUNT AS MENTIONED BY THE ASSESSING OFFICER. WE DO AGREE TH AT IN VIEW OF THE QUANTUM OF THE AGRICULTURE INCOME RETURNED BY THE A SSESSEE, THE ASSESSEE IS NOT REQUIRED TO MAINTAIN THE REGULAR BOOKS OF AC COUNT FOR THE AGRICULTURE INCOME BUT KEEPING IN VIEW THE QUANTUM OF THE LAND HOLDING, THE AGRICULTURE INCOME SHOWN BY THE ASSESSEE IS ON A HI GHER SIDE BUT SINCE IN THE PRECEDING ASSESSMENT YEAR THE INCOME FROM THE S AME LAND HOLDING STAND ACCEPTED BY PROCESSING THE RETURN UNDER SECTI ON 143(1) TO THE EXTENT OF RS.2,00,000/- THEREFORE, WE TREAT THE SUM OF RS.2,00,000/- FOLLOWING PRINCIPLE OF CONSISTENCY, ALTHOUGH IT IS ON HIGHER SIDE FROM THE SAID AGRICULTURE LAND, TO BE THE AGRICULTURE INCOME AND CONFIRM THE ACTION OF THE AUTHORITIES BELOW TREATING THE BALANCE SUM O F RS.1,00,000/- AS INCOME FROM UNDISCLOSED SOURCES. THUS, THIS GROUND TAKEN BY THE ASSESSEE IS PARTLY ALLOWED. 15. GROUND NO. 9 OF THE APPEAL RELATES TO LEVY OF I NTEREST UNDER SECTION 234A, 234B & 234C OF THE ACT. AS AGREED BY BOTH TH E SIDES, THIS ISSUE IS CONSEQUENTIAL IN NATURE. WE ACCORDINGLY DIRECT THE ASSESSING OFFICER TO RECOMPUTE THE INTEREST LEVIED UNDER SECTION 234A, 2 34B & 234C OF THE ACT AFTER GIVING EFFECT TO THIS ORDER. 27 I.T.A.NO.267/COCH/2016 16. GROUND NOS. 1,2,6 AND 8 ARE GENERAL IN NATURE A ND DO NOT REQUIRE ANY ADJUDICATION THEREFORE, THE SAME ARE DISMISSED AS SUCH. 17. GROUND NO. 3 RELATES TO THE SUSTENANCE OF ADDIT ION OF RS.5,44,000/- IN RESPECT OF INVESTMENT MADE IN THE LAND PURCHASE. THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT NOTED THAT DURING T HE IMPUGNED ASSESSMENT YEAR THE ASSESSEE HAS PURCHASED THE LAND ON VARIOUS DATES CONSISTING OF FIVE PIECES OF 10 CENT, 13 CENT, 11.5 CENT, 13 CENT AND 9.5 CENT FOR A SUM OF RS.5,44,000/-, RS.6,85,000/-, RS. 6,15,000/-, RS.6,96,000/- AND RS.24,90,000/- FOR WHICH THE DOCU MENTS PRICE WERE RS.4,50,000/-, RS.3,30,000/-, RS.3,77,000/-, RS.4,2 9,000/- AND RS.4,06,500/-. HE WENT THROUGH THE CASH FLOW STATE MENT FURNISHED BY THE ASSESSEE AND NOTED THAT TWO PLOTS OF THE LAND FOR R S.5,44,000/- AND RS.6,85,000/- WERE PURCHASED ON 06/05/2011 AND 07/0 5/2011 IN HIS NAME AND IN THE NAME OF HIS WIFE MINI ELDHOSE. THE ASSE SSING OFFICER NOTED THAT ON 07/05/2011 THERE WAS A WITHDRAWAL OF RS.6,80,000 /- FROM THE CAPITAL ACCOUNT OF THE ASSESSEE BUT THERE WAS NO WITHDRAWAL FROM THE CAPITAL ACCOUNT OF THE SPOUSE. THE CASH CREDIT IS WITHDRAW N ON THE SAME DATE WHEN THE ASSESSEE GOT THE CASH CREDIT I.E. 19/04/20 11 AND 18/08/2011. THE ASSESSEE CLAIMED THE WITHDRAWAL AS FOR REPAYMEN T AND SAME WAS NOT UTILIZED FOR LAND PURCHASE. THE ASSESSING OFFICER ALSO NOTED THAT IN THE CASH FLOW STATEMENT THE ASSESSEE HAS SHOWN INCOME E ARNED DURING THE YEAR TO BE THE SOURCE OF THE PURCHASE OF LAND. THE ASSESSING OFFICER WAS OF THE VIEW THAT WITHIN ONE MONTH AFTER THE BEGINNI NG OF THE FINANCIAL YEAR THE WHOLE OF THE INCOME OF THE YEAR COULD NOT HAVE BEEN RECEIVED BY THE ASSESSEE THEREFORE, THE ASSESSING OFFICER DID NOT A CCEPT THE SOURCE OF LAND PURCHASE FOR RS.5,44,000/- AND THE MADE THE SAID AD DITION. WHEN THE MATTER WENT BEFORE THE CIT(A), THE CIT(A) DID NOT G IVE ANY FINDING ON THE SAID ADDITION. 28 18. WE HAVE HEARD THE RIVAL SUBMISSIONS, CAREFULLY CONSIDERED THE SAME ALONG WITH THE ORDERS OF THE TAX AUTHORITIES BELOW. WE NOTED THAT THE ASSESSEE HAS TAKEN THE GROUND, BEING GROUND NO. C, BEFORE THE CIT(A) IN RESPECT OF THE SAID ADDITION BUT THE CIT(A) WHILE P ASSING THE ORDER HAS NOT GIVEN ANY FINDING ON THIS BUT IMPLIEDLY THIS ADDITI ON GETS DELETED AS THE CIT(A) HAS ACCEPTED THE SUM OF RS.18,15,000/- BEING RECEIVED BY THE ASSESSEE FROM HIS BROTHER OUT OF WHICH RS.5,00,000/ - WAS DULY ACCEPTED BY THE ASSESSING OFFICER BUT THE ASSESSING OFFICER DID NOT ACCEPT A SUM OF RS.13,15,000/- AND MADE THE ADDITION FOR THE SAME. THE SAID SUM OF WHICH REPRESENTS RS.18,15,000/- WHICH IS THE CASH C REDIT IN THE BANK ACCOUNT OF ELDHOSE K. VARGHESE ON DIFFERENT DATES I .E. RS.8,70,000/- ON 18/08/2011, RS.9,00,000/- ON 19/04/2011 AND RS.45,0 00/- ON 20/04/2011. IT WAS NOTED THAT THE SAID AMOUNT WAS ALSO QUICKLY WITHDRAWN IN CASH AND CREDITED INTO THE ACCOUNTS OF THE ASSESSEES WIFE M INI ELDHOSE RS.9,00,000/- WITHDRAWN ON 19/04/2011 AND RS.8,70,0 00/- ON 18/08/2011. ONCE THE CIT(A) HAS DELETED THE ADDITION OF RS.13,5 0,000/- WHICH INCLUDES THE SUM OF RS.9,00,000/- WITHDRAWN BY THE ASSESSEE ON 19/04/2011 AND GIVEN TO THE ASSESSEES WIFE. THEREFORE, THE CONTE NTION OF LEARNED D. R. THAT THERE WAS NO WITHDRAWAL FOR PAYING THE CONSIDE RATION OF RS.5,44,000/- FROM THE ACCOUNT OF MINI ELDHOSE ON 19/04/2011 AMOU NTING TO RS.9,00,000/-, WHICH IS SUFFICIENT TO COVER UP THE SUM OF RS.5,44,000/- AND THE REVENUE HAS NOT COME IN APPEAL AGAINST THE DELE TION OF RS.13,50,000/- THEREFORE, WE DELETE THE ADDITION OF RS.5,44,000/-. THUS, GROUND NO. 3 STANDS ALLOWED. 19. GROUND NO. 4 RELATES TO THE ESTIMATE OF THE INC OME BY WAY OF PROFIT ON SALE OF LAND AT RS.36,000/-. 20. THE FACTS RELATED TO THIS ISSUE, IN BRIEF, ARE THAT THE ASSESSING OFFICER NOTED FROM THE CASH FLOW STATEMENT SUBMITTED BY THE ASSESSEE THAT THE 29 ASSESSEE HAS SOLD THE LAND DURING THE YEAR FOR A SU M OF RS.7,15,000/- AND RS.5,50,000/- BUT THE ASSESSEE HAS NOT SHOWN ANY PR OFIT ON THE SAID TRANSACTION THEREFORE, HE ADDED THE SAME IN THE INC OME OF THE ASSESSEE. WHEN THE MATTER WENT BEFORE THE CIT(A), THE CIT(A) DID NOT GIVE THE SPECIFIC FINDING, EVEN THOUGH THE ASSESSEE HAS TAKE N THE SAID GROUND BEFORE THE CIT(A). 21. WE HAVE HEARD THE RIVAL SUBMISSIONS, CAREFULLY CONSIDERED THE SAME ALONG WITH THE ORDERS OF THE TAX AUTHORITIES BELOW. WE HAVE ALSO GONE THROUGH THE CASH FLOW STATEMENT SUBMITTED BY THE AS SESSEE BEFORE THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT P ROCEEDINGS IN REPLYTO THE NOTICE ISSUED UNDER SECTION 142(1) WHICH IS APP EARING AT PARA 8 OF THE ASSESSMENT ORDER. FROM PAGE 4 OF THE ASSESSMENT OR DER, WE FIND THAT THE ASSESSEE HAS SHOWN THE SOURCE OF THE SUM OF RS.7,15 ,000/- AND RS.5,50,000/- TO BE THE SALE OF LAND. NATURALLY WH EN THE ASSESSEE HAS SOLD THE LAND THE ASSESSEE MIGHT HAVE EARNED THE PROFIT. THE ASSESSING OFFICER HAS FOUND THAT THE ASSESSEE HAS NOT DISCLOSED THE S AID PROFIT IN THE RETURN FILED BY HIM AND ACCORDINGLY COMPUTED THE SAID PROF IT AT RS.36,000/-. THE PROFIT EARNED ON THE SALE OF THE LAND IS CHARGEABLE TO TAX. IT IS NOT THE CLAIM OF LEARNED A.R. THAT THE ASSESSEE HAS NOT EAR NED THE INCOME OR THE PROFIT SO EARNED IS EXEMPT FROM TAX. WE ACCORDINGL Y DISMISS GROUND NO. 4 OF THE ASSESSEE. 22. GROUND NO. 5 & 7 RELATE TO AGRICULTURE INCOME R ETURNED BY THE ASSESSEE AT RS.4,30,000/-, WHICH WAS TREATED BY THE ASSESSING OFFICER AS UNDISCLOSED INCOME. 23. WE HAVE HEARD THE RIVAL SUBMISSIONS, CAREFULLY CONSIDERED THE SAME ALONG WITH THE ORDERS OF THE TAX AUTHORITIES BELOW. WE NOTED THAT DURING THE IMPUGNED ASSESSMENT YEAR ALTHOUGH THE ASSESSEE HAS INVESTED IN FIVE PIECES OF THE LAND MEASURING 10 CENT, 13 CENT, 11.5 CENT, 13 CENT AND 9.5 30 CENT. OUT OF THESE LANDS, ONE IS RESIDENTIAL BUILD ING MEASURING 9.5 CENT WHILE THE REST ARE THE LAND AND ALL THESE LANDS ARE SITUATED IN THE MUNICIPAL LIMIT OF THE CONCERNED CITY. EXCEPT TWO PIECES LAN DS OF 10 CENT AND 13 CENT, WHICH WERE BOUGHT ON 06/05/2011 AND 07/05/201 1, REST OF THE LANDS WERE BOUGHT IN DECEMBER, 2011. IN THE EARLIER YEAR , THE INCOME FROM AGRICULTURE HAS BEEN ACCEPTED AT RS.2,00,000/- BUT SO FAR THESE LANDS ARE CONCERNED, IN OUR VIEW, THE ONUS LIES ON THE ASSESS EE TO PROVE THAT THE ASSESSEE HAS CULTIVATED THE LAND AND EARNED THE AGR ICULTURE INCOME. NO GOVERNMENT DOCUMENT SHOWING THE CULTIVATION OF THE CROP BY WAY OF REVENUE RECORD WAS PLACED BEFORE US. IT IS NOT DEN IED THAT THE LAND SO PURCHASED ARE IN SMALL PIECES BUT FOLLOWING THE RUL E OF CONSISTENCY, WE DIRECT THE ASSESSING OFFICER TO TREAT THE SUM OF RS .2,00,000/- OUT OF THE SUM OF RS.4,30,000/- TO BE THE AGRICULTURE INCOME E ARNED BY THE ASSESSEE. THUS, GROUND NO. 5 & 7 ARE PARTLY ALLOWED. 24. GROUND NO. 8 & 9 ARE CONSEQUENTIAL IN NATURE RE LATING TO LEVY OF INTEREST UNDER SECTION 234A, 234B AND 234C. WE ACC ORDINGLY DIRECT THE ASSESSING OFFICER TO RECOMPUTE THE INTEREST LEVIED UNDER SECTION 234A, 234B & 234C OF THE ACT AFTER GIVING EFFECT TO THIS ORDER. 25. IN THE RESULT, APPEALS FOR ASSESSMENT YEAR 2006 -07 TO 2008-09 AND 2010-11 ARE ALLOWED WHILE THE APPEALS OF THE ASSESS EE FOR ASSESSMENT YEAR 2009-10, 2011-12 AND 2012-13 ARE PARTLY ALLOWE D. (ORDER PRONOUNCED IN THE OPEN COURT ON 04/10/2017) SD/. SD/. (GEORGE GEORGE K.) (P. K. BANSAL ) JUDICIAL MEMBER VICE PRESIDENT DATED:04/10/2017 *SINGH 31 COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5. D.R., I.T.A.T., COCHIN ASSTT. REGISTRAR