M/s AG8 Ventures Limited, Bhopal V. The ACIT, 1(1), Bhopal

ITA 272/IND/2012

• Counselvise Citation: 27222714 RSA 2012
• Duration Of Justice: 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 07-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K K SINGH
• Assessee Lawyers: ASHISH GOEL
• Keywords: Loose papers; Additional evidence; Documents seized
• Section: 69C; 133A; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARM A, A.M. PAN NO. : AADCA1214E I.T.A.NO. 269 TO 272 /IND/201 2 . A.Y S . : 2004 - 05 TO 2007 - 08 AG8 VENTURES LIMITED, ACIT, (OLD NAME M/S. AAKRITI DWELLING PVT.LTD), VS 1(1), BHOPAL F - 11,206, SHRISHTI COMPLEX, ZONE 1, M.P.NAGAR, BHOPAL. APPELLANT RESPONDENT PAN NO. : AADCA1214F I.T.A.NO. 391 & 392/IND/2012. A.YS. : 2005-06 & 2007-08 ACIT, 1(2), M/S. AAKRITI DWELLING PVT.LTD), BHOPAL VS F - 11,206, SHRISHTI COMPLEX, ZONE 1, M.P.NAGAR, BHOPAL. APPELLANT RESPONDENT ASSESSEE BY : SHRI ASHISH GOEL, C. A. DEPARTMENT BY : SHRI K.K. SINGH, CIT DR -: 2: - 2 DATE OF HEARING : 19 . 1 2 .2012 DATE OF PRONOUNCEMENT : 31 . 1 2 .201 2 O R D E R PER R. C. SHARMA, A.M. THESE ARE THE CROSS APPEALS FILED BY THE ASSESSEE A ND REVENUE AGAINST THE ORDER OF CIT(A) FOR THE ASSESSM ENT YEARS 2004-05, 2005-06, 2006-07 AND 2007-08. 2. COMMON GROUNDS HAVE BEEN TAKEN BY THE ASSESSEE AND REVENUE IN ALL THE YEARS, THEREFORE, ALL THE AP PEALS WERE HEARD TOGETHER AND ARE NOW DISPOSED OF BY THIS CONS OLIDATED ORDER. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. FACTS IN BRIEF ARE THAT THE ASSESSEE IS EN GAGED IN BUSINESS OF CONSTRUCTION AND DEVELOPMENT OF HOUSING PROJECT. DEDUCTION WAS CLAIMED U/S 80IB(10), WHICH WAS DECLI NED BY THE ASSESSING OFFICER ON THE PLEA THAT THE ASSESSEE IS NOT THE OWNER OF LAND AND ACTED AS A CONTRACTOR AND NO INVE STMENT WAS MADE BY THE ASSESSEE. THE ASSESSING OFFICER ALS O ALLEGED THAT APPROVED MAP OF THE PROJECT WAS NOT IN THE NAM E OF THE -: 3: - 3 ASSESSEE COMPANY AND THAT PROJECT COMPLETION CERTIF ICATE WAS NOT FILED. IN AN APPEAL FILED BEFORE THE CIT(A), TH E CIT(A) HAS DECIDED FIRST FOUR ISSUES IN FAVOUR OF THE ASSESSEE HOLDING THAT REASONING GIVEN BY THE ASSESSING OFFICER WERE NOT C ORRECT. ASSESSING OFFICERS ACTION FOR DECLINE OF CLAIM OF DEDUCTION U/S 80IB(10) WAS CONFIRMED BY CIT(A) ONLY ON THE PLEA O F NON SUBMITTING OF PROJECT COMPLETION CERTIFICATE. HOWEV ER, THE ASSESSEE HAS CHALLENGED THE DECLINE OF DEDUCTION U/ S 80IB(10) BY CIT(A) ON THE PLEA OF NON OBTAINING THE PROJECT COMPLETION CERTIFICATE BY THE ASSESSEE. WITH REGARD TO THE ASS ESSING OFFICERS OBJECTION REGARDING COMPLETION CERTIFICAT E, THE ASSESSEE HAS FILED ADDITIONAL EVIDENCE BEFORE THE C IT(A). HOWEVER, THE CIT(A) DECLINED TO ENTERTAIN ADDITIONA L EVIDENCE HOLDING THAT ASSESSING OFFICER HAD GIVEN ADEQUATE O PPORTUNITY TO THE ASSESSEE, BUT THE ASSESSEE HAS NOT PRODUCED THE EVIDENCE BEFORE HIM. CONTENTION OF LD. AUTHORIZED REPRESENTATIVE WAS THAT THE ASSESSEE HAS APPLIED FO R COMPLETION CERTIFICATE ON 21.2.2007, WHICH WAS PLAC ED AT PAPER BOOK PAGE NOS. 70 TO 71. OUR ATTENTION WAS AL SO INVITED TO THE ORDER OF THE HON'BLE HIGH COURT AND HON'BLE SUPREME -: 4: - 4 COURT AS WELL AS LETTER RECEIVED FROM MUNICIPAL COR PORATION TO THE EFFECT THAT COMPLETION CERTIFICATE COULD NOT BE ISSUED, BECAUSE THE HON'BLE SUPREME COURT HAS GRANTED STAY IN RESPECT OF SOME PART OF THE LAND ON WHICH ASSESSEE HAS CONSTRUCTED THE HOUSING PROJECT. AS PER LD. AUTHORI ZED REPRESENTATIVE, THE EVIDENCE AND LETTER ISSUED BY M UNICIPAL CORPORATION ARE CLINCHING EVIDENCE, WHICH INDICATE THAT BECAUSE OF THE STAY ORDER PASSED BY THE HON'BLE SUP REME COURT, THE COMPLETION CERTIFICATE COULD NOT BE ISSU ED. FOR JUSTIFYING ADMISSION OF ADDITIONAL EVIDENCE, THE LD . AUTHORIZED REPRESENTATIVE RELIED ON JUDICIAL PRONOUNCEMENTS R EPORTED IN 143 ITR 486, 179 ITR 239, 232 ITR 900 THAT COMPLET ION. 4. THE LD. AUTHORIZED REPRESENTATIVE ALSO RELIED ON T HE DECISION OF THE COORDINATE BENCH IN THE CASE OF C. I. BUILDERS, 20 ITD 495, IN SUPPORT OF THE PROPOSITION THAT THE REQUIREMENT OF COMPLETION CERTIFICATE SHALL BE APPLICABLE FROM ASSESSMENT YEAR 2005-06. THUS, AS PER LD. AUTHORIZED REPRESENT ATIVE FOR THE ASSESSMENT YEAR 2004-05, THERE WAS NO REQUIREME NT FOR OBTAINING COMPLETION CERTIFICATE. -: 5: - 5 5. ON THE OTHER HAND, THE LD. CIT DR CONTENDED THAT CIT(A) WAS JUSTIFIED IN NOT ACCEPTING THE ADDITION AL EVIDENCE IN SO FAR AS ASSESSING OFFICER HAD ALREADY GIVEN SUFFI CIENT OPPORTUNITY TO THE ASSESSEE, BUT THE ASSESSEE FAILE D TO PRODUCE THE SAME. 6. WE HAVE CONSIDERED THE RIVAL CONTENTIONS OF BOTH TH E PARTIES WITH REGARD TO THE ASSESSEES CLAIM FOR DED UCTION U/S 80IB(10). OUT OF VARIOUS OBJECTIONS RAISED BY THE A SSESSING OFFICER FOR DECLINE OF CLAIM OF DEDUCTION U/S 80IB( 10), WE FIND THAT FIRST FOUR OBJECTIONS HAVE BEEN DECIDED BY THE LD.CIT(A) IN FAVOUR OF THE ASSESSEE HOLDING THAT REASONINGS GIVE N BY THE ASSESSING OFFICER WAS NOT CORRECT. AGAINST THIS DEC ISION OF CIT(A), THE REVENUE IS NOT IN FURTHER APPEAL BEFORE US. THUS, THE ONLY GROUND LEFT FOR DECLINE OF DEDUCTION U/S 8 0IB(10) IS NON FURNISHING OF PROJECT COMPUTATION CERTIFICATE. IN THIS REGARD, WE FOUND THAT THERE WAS SOME DISPUTE WITH R EGARD TO A PORTION OF LAND ON WHICH ASSESSEE HAS CONSTRUCTED T HE HOUSING PROJECT. THE OWNERSHIP OF THE LAND WAS DISPUTED BY BSNL AND OTHERS AND HON'BLE M.P. HIGH COURT GRANTED STAY AND ASKED THE PARTIES TO MAINTAIN STATUS QUO WITH REGARD TO T HE AFORESAID -: 6: - 6 LAND. SUBSEQUENTLY, HON'BLE HIGH COURT DECIDED THE MATTER IN FAVOUR OF THE ASSESSEE VIDE ORDER DATED 19.4.2010, IN AN S.L.P. FILED BEFORE THE HON'BLE SUPREME COURT. HON'BLE SUP REME COURT STAYED ON THE OPERATION OF M. P. HIGH COURTS ORDER ON 27.8.2010. WE FOUND THAT THE MATTER IS SUB JUDICE A ND STILL PENDING BEFORE THE HON'BLE SUPREME COURT, UNDER THE SE FACTS AND CIRCUMSTANCES, THE LETTER ISSUED BY THE MUNICIP AL CORPORATION TO THE EFFECT THAT COMPLETION CERTIFICA TE COULD NOT BE ISSUED, GOES TO THE ROOT OF THE ISSUE. WHEN THE THINGS ARE BEYOND THE CONTROL OF ASSESSEE AND MUNICIPAL CORPOR ATION BOTH, IT CAN NOT BE INFERRED THAT THE ASSESSEE SHOU LD HAVE FILED THE COMPLETION CERTIFICATE EVEN WHEN THERE WAS A ST AY BY HON'BLE HIGH COURT AND HON'BLE SUPREME COURT WITH R ESPECT TO THE VERY SAME LAND ON WHICH THE ASSESSEE HAS CON STRUCTED THE HOUSING PROJECT. THE ORDER OF HON'BLE SUPREME C OURT IS BINDING ON ALL THE AUTHORITIES, ACCORDINGLY, WE DO NOT FIND ANY JUSTIFICATION ON THIS PART OF THE ORDER OF CIT(A) F OR NOT ACCEPTING THE ADDITIONAL EVIDENCE FILED BEFORE HIM. WE FOUND THAT THESE EVIDENCES AND THE LETTERS BY MUNICIPAL CORPORATION ARE CLINCHING EVIDENCES, WHICH HAVE NO ROOM OF DOUBT BE CAUSE OF -: 7: - 7 THE STAY ORDER PASSED BY THE HON'BLE SUPREME COURT AND BECAUSE OF WHICH COMPLETION CERTIFICATE COULD NOT B E ISSUED. SINCE THESE EVIDENCES HAVE MATERIAL BEARING ON THE ALLOWABILITY OF CLAIM OF DEDUCTION U/S 80IB(10), WE RESTORE THE MATTER BACK TO THE FILE OF ASSESSING OFFICER FOR THE ASSESSMENT YEAR 2005-06 TO 2007-08 WITH A DIRECTION TO ACCEPT THE ADDITIONA L EVIDENCES AND TO DECIDE THE ISSUE AFRESH AFTER RECEIVING FINA L VERDICT OF THE HON'BLE SUPREME COURT IN THIS REGARD. WE DIRECT ACCORDINGLY. 7. WITH REGARD TO CONDITION OF OBTAINING COMPLETION CERTIFICATE IN THE ASSESSMENT YEAR 2004-05, WE FOUN D THAT THE ISSUE IS COVERED BY THE DECISION OF THE COORDINATE BENCH IN THE CASE OF C.I. BUILDERS (SUPRA), WHEREIN IT WAS HELD THAT AMENDMENT BROUGHT IN WITH REGARD TO REQUIREMENT OF COMPLETION CERTIFICATE WILL BE APPLICABLE FROM ASSE SSMENT YEAR 2005-06. RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH, WE DIRECT THE ASSESSING OFFICER TO ALLOW ASS ESSEES CLAIM OF DEDUCTION U/S 80IB(10) IN THE ASSESSMENT Y EAR 2004- 05. -: 8: - 8 8. THE ASSESSEE HAS CHALLENGED THE ADDITION OF PAYMENT REFLECTED IN THE LOOSE PAPERS IN THE ASSESSMENT YEA RS 2004-05, 2005-06 AND 2006-07, WHICH WAS FOUND IN THE COURSE OF SURVEY. THE REVENUE HAS ALSO CHALLENGED THE DELETIO N OF SIMILAR ADDITION IN THE ASSESSMENT YEAR 2007-08 BY THE LD.CIT(A). 9. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. FROM THE RECORD, WE FOUND THAT A SURVEY WA S CONDUCTED AT THE PREMISES OF THE ASSESSEE. VARIOUS LOOSE PAPERS AND COMPUTER SHEETS WERE FOUND DURING THE CO URSE OF SURVEY SHOWING ALLEGEDLY ON MONEY PAYMENTS BY THE A SSESSEE FOR PURCHASE OF LAND. COMPUTER PRINT OUTS WERE ALSO TAKEN WHICH INDICATED ON MONEY RECEIPTS ON SALE OF FLATS. DURING SURVEY, STATEMENT OF SHRI HEMANT SONI, MANAGING DIR ECTOR OF THE COMPANY WAS RECORDED. A SPECIFIC QUESTION WAS A SKED WITH REGARD TO THE LOOSE PAPERS IMPOUNDED FROM THE BUSIN ESS PREMISES INDICATING ON MONEY PAYMENT FOR PURCHASE O F LAND AND ALSO RECEIPT OF ON MONEY FROM THE SALE OF FLAT. IN RESPECT OF ALL THESE LOOSE DOCUMENTS AND COMPUTER PRINT OUTS, THE ASSESSEE HAS SURRENDERED ADDITIONAL INCOME OF RS. 3 CRORES. -: 9: - 9 HOWEVER, THIS MONEY EVEN THOUGH BELONGED TO THE VAR IOUS DOCUMENTS PERTAINING TO VARIOUS YEARS, BUT WAS SURR ENDERED IN THE YEAR OF SURVEY. DURING COURSE OF ASSESSMENT, THE ASSESSING OFFICER REFERRED LOOSE PAPERS LPS-33 PAGE 51, WHICH WAS FOUND DURING SURVEY. THESE PAPERS SHOWED PURCHA SE OF LAND BY THE ASSESSEE FROM TULSIRAM AT BAWADIA KALAM FOR THE NEW PROJECT AKRITI ECHO CITY. THESE PAPERS SHEET IN DICATED THAT PAYMENTS WERE IN TWO PARTS, ONE WAS IN CASH PAYMENT AND OTHER WAS THROUGH CHEQUE. AS PER THESE DOCUMENTS, T HE LAND WAS PURCHASED FOR RS. 2,06,60,000/- FOR WHICH RS. 1,09,10,000/- WAS PAID IN CASH AND RS. 97,50,000/- WAS PAID BY CHEQUE. YEAR-WISE DETAILS OF CASH PAYMENT ARE ME NTIONED IN THE REMAND REPORT, WHICH READS AS UNDER :- A.Y. PAYMENT REFLECTED IN LOOSE PAPER RS. ADDED BY LD. ASSESSING OFFICER RS. SUSTAINED BY LD. CIT(A) AFTER ENHANCEMENT RS. 2004-05 5,00,000 5,00,000 2005-06 37,02,000 37,02,000 20006-07 40,58,000 40,58,000 40,58,000 2007 - 08 26,50,000 26,50,000 -: 10: - 10 THE ASSESSEE HAS SURRENDERED RS. 3 CRORES DURING SU RVEY TO COVER THE ON MONEY RECEIVED ON SALE OF FLATS AND ON MONEY PAYMENTS MADE FOR PURCHASE OF LAND. THE QUESTION DU RING SURVEY MENTIONED THE NAME OF MR. TULSIRAM TO WHOM A BOVE UNACCOUNTED PAYMENT WAS MADE DURING THE FINANCIAL Y EAR 2003-04 TO 2006-07 RELEVANT TO ASSESSMENT YEAR 2004 -05 TO 2007-08 AND CONSEQUENT SURRENDER OF RS. 3 CRORES. H OWEVER, WHILE FRAMING ASSESSMENT, THE ASSESSING OFFICER DID NOT ACCEPT THE ASSESSEES CONTENTION OF SURRENDER FOR SUCH UNA CCOUNTED PAYMENTS. ACCORDINGLY, ADDITION WAS MADE BY ASSESSI NG OFFICER IN THE ASSESSMENT YEAR 2006-07 AND 2007-08 ON ACCOUNT OF ON MONEY PAID FOR PURCHASE OF LAND. AS NO ADDITION WAS MADE BY ASSESSING OFFICER IN ASSESSMEN T YEAR 2004-05 AND 2005-06, THE CIT(A) ENHANCED THE ASSESS MENT IN THESE YEARS. CONTENTION OF ASSESSEE WAS THAT THE AM OUNT HAD BEEN SURRENDERED DURING SURVEY FOR EXCESS PAYMENT T O MR. TULSIRAM AND TAX HAS BEEN PAID THEREON IN FINANCIAL YEAR 2006-07, ADDING THE SAME IN DIFFERENT YEARS AGAIN W OULD AMOUNT TO DOUBLE ADDITION. BY THE IMPUGNED ORDER, T HE CIT(A) SUSTAINED/ENHANCED THE ADDITION IN THE ASSESSMENT Y EAR -: 11: - 11 2004-05 TO 2006-07, WHEREAS CIT(A) HAS DELETED THE ADDITION MADE BY THE ASSESSING OFFICER IN ASSESSMENT YEAR 20 07-08. BOTH THE ASSESSEE AND REVENUE ARE IN APPEAL BEFORE US. IT WAS CONTENDED BY THE LD. AUTHORIZED REPRESENTATIVE THA T SURRENDER WAS MADE WITH REFERENCE TO PAYMENTS MADE AS PER THE LOOSE DOCUMENTS INDICATING PAYMENT OF ON MONEY TO TULSIRAM FOR PURCHASE OF LAND, WHICH FOUND PLACE IN THE STATEMENT RECORDED DURING SURVEY. AS THE ASSESSEE H AS ALREADY SURRENDERED THE CASH PAYMENT MADE TO TULSIRAM AND T HE TAX HAS ALREADY BEEN PAID THEREON IN THE YEAR OF SURVEY , THERE WAS NO REASON FOR ADDING THE SAME AMOUNT IN EARLIER YEA R TO WHICH SUCH PAYMENT RELATES. AS PER LD. AUTHORIZED REPRESE NTATIVE , IT AMOUNTS TO DOUBLE ADDITION, WHICH IS NOT PERMISSIBL E IN LAW AND FOR THIS PURPOSE, RELIANCE WAS PLACED ON THE DE CISION OF HON'BLE SUPREME COURT IN THE CASE OF LAXMIPAT SINGH ANIA, 72 ITR 291 ( S. C. ), RAM SHANKER PRASAD, 45 TAXMAN 28 2 (KOL). SURAT COTTON SPINNING AND WVG. MILLS, 202 ITR 932, AND S. RADHA KRISHNAN AND TWO OTHERS, 254 ITR 561. 10. ON THE OTHER HAND, IT WAS ARGUED BY LD. CIT DR THAT ADDITION WAS CORRECTLY MADE BY THE LOWER AUTHORITIE S IN THE -: 12: - 12 YEAR TO WHICH SUCH CASH PAYMENT RELATED AND THE FAC T THAT THE ASSESSEE HAS SURRENDERED THE ENTIRE AMOUNT PERTAINI NG TO THESE PAYMENTS IN THE YEAR OF SURVEY WOULD NOT STOP THE ASSESSING OFFICER TO MAKE ADDITION IN THE RESPECTIV E YEARS. 11. RIVAL CONTENTIONS HAVE BEEN CONSIDERED AND RECORD PERUSED. WE HAVE ALSO GONE THROUGH THE STATEMENT OF SHRI HEMANT KUMAR SONI, MANAGING DIRECTOR OF THE ASSESSE E COMPANY U/S 133A ON 28.2.2007. IN THE STATEMENT SO RECORDED, PRECISE QUESTION NO. 12 WAS ASKED WHEREIN THE ASSESSEE WAS DIRECTED TO EXPLAIN THE ENTRIES IN THE LOOSE SHEETS INDICATING PAYMENTS RECEIVED WHICH WERE NOT ENTERED IN THE BOOKS OF ACCOUNT AS WELL AS CASH PAYMENT MADE TO VA RIOUS PERSONS INCLUDING SHRI TULSIRAM FOR PURCHASE OF LAN D WHICH WAS ALSO NOT ACCOUNTED FOR IN THE BOOKS OF ACCOUNT. AS PER THE NOTINGS IN THE LOOSE SHEETS INDICATING PAYMENT AND RECEIPT OF UNACCOUNTED CASH ON ACCOUNT OF PURCHASE OF LAND AND SALE OF FLATS, THE ASSESSEE AGREED TO SURRENDER A SUM OF RS . 3 CRORES. IT WAS CLEARLY STATED IN THE QUESTIONNAIRE REGARDIN G CASH PAYMENTS MADE TO SHRI TULSIRAM AND OTHERS FOR ACQUI SITION OF LAND AND WHICH WAS NOT ACCOUNTED FOR IN THE BOOKS OF -: 13: - 13 ACCOUNT. THE ASSESSEE SURRENDERED A SUM OF RS. 3 C RORES IN THE YEAR OF SURVEY IN RESPECT OF ALL THESE ENTRIES IN THE LOOSE DOCUMENTS. THIS SURRENDER OF RS. 3 CRORES WAS NOT ONLY RELATING TO THIS YEAR BUT WAS PERTAINING TO VARIOUS ENTRIES FOUND IN THE LOOSE PAPERS IN RESPECT OF CASH PAYMEN TS MADE TO VARIOUS PERSONS INCLUDING SHRI TULSIRAM FOR PURCHAS E OF LAND. SUCH PAYMENT WAS MADE TO SHRI TULSIRAM IN F.Y. 2003 -04 RS. 5 LACS, F.Y. 2004-05 RS. 37,02,000/-, F.Y. 2005-06 RS. 40,58,000/- AND F.Y. 2006-07 RS. 26,50,000/-. SIN CE THE SURRENDER OF RS. 3 CRORES WAS ALSO IN RESPECT OF CA SH PAYMENT TO SHRI TULSIRAM AS INDICATED ABOVE, THERE IS NO RE ASON FOR ADDING THE SAME AMOUNT IN THE PARTICULAR YEAR TO WH ICH SUCH PAYMENT RELATES. ADDING THE SAME AMOUNT IN THE RES PECTIVE YEAR TO WHICH IT PERTAINS, AMOUNTS TO DOUBLE ADDITI ON INSOFAR AS THE ENTIRE AMOUNT OF RS. 3 CRORES WAS SURRENDERE D AND ADDED DURING THE F.Y. 2006-07 AND ON WHICH THE TAXE S WERE ALSO PAID BY THE ASSESSEE. SINCE THE PAYMENT MADE TO SHRI TULSIRAM WAS NOT ACCOUNTED FOR, THE SAME WAS SURREN DERED DURING THE YEAR OF SURVEY. IT IS PERTINENT TO MENT ION HERE THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HI MSELF HAS -: 14: - 14 ACCEPTED SUCH PAYMENT OF RS. 26,50,000/- IN THE F.Y . 2006-07 RELATING TO THE A.Y. 2007-08 AND DELETED THE ADDITI ON MADE BY THE ASSESSING OFFICER IN THIS REGARD. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO TREAT THE AMOUNT OF SURRENDER IN THE RESPECTIVE YEARS I.E. .Y. 2003-04 RS. 5 LACS, F.Y. 2004-05 RS. 37,02,000/-, F.Y. 2005-06 RS. 40,58,000/- AND BALAN CE IN F.Y. 2006-07 RS. 2,17,40,000/-. WE DIRECT ACCORDING LY. 12. IN THE RESULT, THE GROUND TAKEN BY THE ASSESSEE IS ALLOWED IN TERMS INDICATED ABOVE WHEREAS THE GROUND TAKEN BY THE REVENUE IS DISMISSED. 13. THE DEPARTMENT IS ALSO AGGRIEVED FOR DELETION OF ADDITION MADE ON ACCOUNT OF INTEREST PAYMENT TO SHR I K.K. SINGH CHAUHAN. IN THIS RESPECT, WE FOUND THAT THE A DDITION WAS MADE BY THE ASSESSING OFFICER ON THE PLEA THAT INTEREST PAYMENT WAS MADE TO SHRI K.K. SINGH CHAUHAN OUTSIDE THE BOOKS OF ACCOUNT. AS PER ASSESSING OFFICER, THE ASS ESSEE HAD PAID INTEREST TO SHRI K.K. SINGH CHAUHAN AMOUNTING TO RS. 2,79,321/- IN THE ASSESSMENT YEAR 2005-06. HOWEVER, IN THE ASSESSMENT YEAR 2007-08, THE ASSESSING OFFICER HAS REFERRED TO -: 15: - 15 LPS-3 PAGE 39 TO 42 TO SEE THAT THE ASSESSEE HAS PA ID INTEREST TO SHRI K.K.SINGH CHAUHAN ON PRINCIPAL OF RS. 1 CRO RE. 14. THE OBSERVATION OF THE CIT(A) WITH REGARD TO THIS ADDITION WAS AS UNDER :- AS REGARDS THIS ADDITION DURING THE APPELLATE PROCEEDINGS IT WAS SUBMITTED THAT THE ASSESSING OFFICER HAS MADE THE ABOVE SAID DISALLOWANCE ON THE BASIS OF LOOSE PAPERS 39 TO 42 OF LPS-3 SEIZED FROM THE RESIDENCE OF MR. K.K. SINGH CHAUHAN DURING THE COURSE OF SEARCH IN HIS CASE. IT IS FURTHER STATED THAT IN THE CASE OF SEARCH AGAINST MR. K. K. SINGH CHAUHAN, STATEMENT OF SHRI HEMANT SONI MD OF THE APPELLANT COMPANY WAS RECORDED AND HE HAS STATED THAT NO SUCH AMOUNT ARE PAYABLE OR PAID BY THE APPELLANT COMPANY WAS RECORDED AND HE HAS STATED THAT THE APPELLANT HAS NOT CLAIMED ANY DEDUCTION TOWARDS THE INTEREST PAYMENT TO MR. K.K. SINGH. IT IS CLAIMED THAT THESE LOOSE PAPERS WERE SEIZED FROM TH E RESIDENCE OF MR. K.K. SINGH CHAUHAN AND THEY -: 16: - 16 CANNOT BE TREATED AS THE EVIDENCES AGAINST THE APPELLANT WITHOUT ANY CORROBORATIVE EVIDENCE. 15. BY THE IMPUGNED ORDER, AFTER RECORDING FOLLOWING FINDING, THE CIT(A) DELETED THE ADDITION :- I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE APPELLANT AND FINDINGS OF THE ASSESSING OFFICER IN ASSESSMENT ORDER. IT IS NOTED THAT THE APPELLANT CA SE IS THAT THE ADDITION WAS MADE ON BASIS OF DOCUMENTS SEIZED FROM THE PREMISES OF ONE MR. K.K.SINGH DURING SEARCH ACTION. DURING THE APPELLAT E PROCEEDINGS CERTIFIED XEROX COPIES OF SUCH DOCUMENT S WERE CALLED FOR FROM THE ASSESSING OFFICER AND COPIES OF DOCUMENTS IMPOUNDED BY THE ASSESSING OFFICER DURING THE SURVEY PROCEEDINGS WERE FILED LPS-3 PAGES 39 TO 42. DURING THE PRESENT APPELLAT E PROCEEDINGS THE PRESENT ASSESSING OFFICER AND THE ASSESSING OFFICER WHO COMPLETED THE ASSESSMENT WERE CALLED FOR AND THEY WERE REQUIRED TO CLARIFY A S TO ON THE BASIS OF WHICH DOCUMENTS THE ADDITION WAS MADE. AS THE COPIES OF DOCUMENTS IMPOUNDED -: 17: - 17 DURING THE SURVEY WAS FILED THEREFORE IT WAS STATED THAT SUCH ADDITION WAS ALSO MADE ON THE BASIS OF THESE DOCUMENTS. XEROX CERTIFIED COPIES OF THESE DOCUMENTS (PAGE 39 TO 42) WERE PERUSED BY ME AND ALSO BROUGHT TO THE NOTICE OF THE ASSESSING OFFICER . IN THESE DOCUMENTS THERE IS NO REFERENCE OF INTEREST PAYMENT AMOUNTING TO RS. 2,79,321/- AND RS. 13.50 LAKHS IN RESPECT OF ASSESSMENT YEAR 2006-07 AND 2007-08 AND 2007-08 RESPECTIVELY. THERE IS NEITHER ANY MENTION OF RATE OF INTEREST. IN FACT BOTH THE AMOUNTS OF RS. 13.50 LAKHS AND RS. 2,79,321/- ARE VERY SPECIFIC AND ON THE PERUSAL OF THESE DOCUMENTS NO SUCH INFERENCE CAN BE DRAWN THAT THE APPELLANT HAS PAID INTEREST FOR SUCH AMOUNT TO MR. K.K. SINGH . MOREOVER, IF THE ASSESSING OFFICER CONSIDERED THAT SUCH EXPENSES ON ACCOUNT OF INTEREST PAYMENT WERE INCURRED AND TO BE ADDED IN U/S 69C OF INCOME-TAX ACT, 1961, THE ONUS WAS UPON THE ASSESSING OFFICER TO PROVE DOCUMENTARY OR CORROBORATIVELY THAT SUCH UNDISCLOSED INCOME WAS INCURRED. IN THESE -: 18: - 18 CIRCUMSTANCES, THERE APPEARS TO BE NO BASIS IN SUCH ADDITIONS. THE ADDITION MADE BY THE ASSESSING OFFICER AMOUNTING TO RS. 2,79,321/- IN ASSESSMENT YEAR 2006-07 AND RS. 13.50 LAKHS IN ASSESSMENT YEAR 2007-08 ARE DELETED. 16. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND FOUN D FROM RECORD THAT THE ADDITION WAS MADE BY THE ASSES SING OFFICER BY REFERRING TO THE DOCUMENTS SEIZED FROM T HE PREMISES OF SHRI K.K. SINGH DURING SEARCH ACTION AGAINST HIM . DURING COURSE OF APPELLATE PROCEEDINGS, THE CIT(A) CALLED THE ASSESSING OFFICER AND THEY WERE REQUIRED TO CLARIFY AS TO ON THE BASIS OF WHICH DOCUMENT, AN ADDITION WAS MADE. AFTE R CONSIDERING THE XEROX COPY OF THESE DOCUMENTS, THE LD. CIT(A) RECORDED A FINDING THAT THERE IS NO MENTION OF INTE REST PAYMENT AMOUNTING TO RS. 2,79,321/- AND RS. 13.50 LAKHS IN RESPECT OF ASSESSMENT YEAR 2006-07 AND 2007-08 RESPECTIVELY IN THESE DOCUMENTS. FURTHER FINDING WAS RECORDED BY THE LD.C IT(A) TO THE EFFECT THAT NEITHER THERE WAS ANY MENTION OF RA TE OF INTEREST OR THE AMOUNT OF INTEREST IN ABSOLUTE TERMS, SO AS TO INFER THAT THE ASSESSEE HAS ACTUALLY PAID ANY SUCH INTEREST TO MR. -: 19: - 19 K.K.SINGH. PRECISE FINDING RECORDED BY THE LD.CIT(A ) IS AS PER MATERIAL ON RECORD AND WHICH HAS NOT BEEN CONTROVER TED BY THE DEPARTMENT BY BRINGING ANY POSITIVE MATERIAL ON REC ORD. ACCORDINGLY, WE DO NOT FIND ANY REASON TO INTERFERE IN THE FINDINGS RECORDED BY THE LD.CIT(A) RESULTING IN DEL ETION OF ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT O F PAYMENT OF INTEREST TO K.K. SINGH. 17. IN THE RESULT, THE APPEALS ARE ALLOWED IN PART. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 31 ST DECEMBER, 2012. SD/ - SD/ - (JOGINDER SINGH) (R. C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 31 ST DECEMBER, 2012. CPU* 26.12.31.12