ACIT Circle-I, V. Ramesh Chand Prop., Faridabad

ITA 2842/DEL/2008

• Counselvise Citation: 284220114 RSA 2008
• Duration Of Justice: 5 year(s) 10 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 08-07-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 03-09-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARMINDER KAUR
• Assessee Lawyers: J P GULATI
• Keywords: Unexplained investment; Valuation report; Documents seized
• Section: 133A; 69

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. NO.2842 /DEL/2008 & I.T.A.NO. 1678/DEL/2009 ASSESSMENT YEAR : 2005-06 & 2006-07 ACIT, CIRCLE I, VS. SHRI RAMESH CHAND FARIDABAD PROP. RAS TRADERS, MATHURA ROAD, FARIDABAD GIR / PAN: ACTPC7226M C.O. NO.168/DEL/2009 IN I.T.A.NO. 1678/DEL/2009 (ASSESSMENT YEAR 2006-07) SHRI RAMESH CHAND, VS. ACIT, CIRCLE I, PROP. RAS TRADERS, FARIDABAD MATHURA ROAD, FARIDABAD (APPELLANT) (RESPONDENT) DEPARTMENT BY : MS. PARMINDER KAUR, SR. DR ASSESSEE BY : SHRI J.P. GULATI, ADV. ORDER PER T.S. KAPOOR, AM: THESE ARE TWO APPEALS FILED BY THE REVENUE AGAINST SEPARATE ORDERS OF LD. CIT(A) DATED 30.06.2008 AND 23.02.2009 RESPECTI VELY. THE ASSESSES HAS ALSO FILED CROSS OBJECTION IN ASSESSMENT YEAR 2006- 07 AGAINST PARTIAL UPHOLDING OF ADDITION BY LD. CIT(A). ITA NO.2842/DEL/2008 I.T.A.NO. 1678/DEL/2009 C.O.NO.168/DEL/2009 2 2. THE BRIEF FACTS OF THE CASES ARE THAT A SURVEY U /S 133A WAS CONDUCTED ON 26.09.2005 AT THE BUSINESS PREMISES OF THE ASSES SEE AND ON THE BASIS OF SOME INCRIMINATORY DOCUMENTS & ON THE BASIS OF STAT EMENTS RECORDED, THE ASSESSEE HAD SURRENDERED A TOTAL AMOUNT OF RS.70 LA CS WHICH WAS TO BE ADDED IN THE INCOME OF THE ASSESSEE IN ASSESSMENT YEARS 2 005-06 & 2006-07 AS PER THE FOLLOWING DETAILS: ON ACCOUNT OF EXCESS STOCK RS.23.95 LACS ON ACCOUNT OF UNEXPLAINED CONSTRUCTION OF PROPERTY RS.29.95 LACS ON ACCOUNT OF UNEXPLAINED INVESTMENT IN JEWELLERY RS.13.05 LACS ON ACCOUNT OF EXCESS CASH FOUND RS.03.05 LACS TOTAL RS.70.00 LACS 2.1 HOWEVER, THE ABOVE STATEMENT AND SURRENDER WAS RETRACTED VIDE A LETTER WRITTEN TO CIT RECEIVED BY HIS OFFICE ON 03. 10.2005, A COPY OF WHICH IS PLACED AT PAPER BOOK PAGE 10. THE ASSESSING OFFICE R WHILE COMPLETING ASSESSMENT FOR ASSESSMENT YEAR 2005-06 AND 2006-07 HAS MADE THE FOLLOWING ADDITIONS: ASSESSMENT YEAR 2005-06: ON A/C OF PURCHASE OF PLOT RS.17,49,625/- ON A/C OF CASH OF CONSTRUCTION RS.18,74,408/- ASSESSMENT YEAR 2006-07: ADDITION ON A/C OF EXCESS STOCK RS.01,20,000/- ADDITION ON A/C OF INVESTMENT IN JEWELLERY RS.13, 05,000/- ADDITION ON A/C OF EXCESS CASH FOUND RS.03,05,0 00/- 2.2 THE LD. CIT(A) IN RESPONSE TO APPEALS FILED BY THE ASSESSEE, DELETED THE ADDITIONS EXCEPT IN RESPECTS OF PARTIAL UPHOLDI NG OF ADDITION IN RESPECT OF CASH FOUND. 2.3 IN ASSESSMENT YEAR 2005-06, THE REVENUE HAS TAK EN TWO EFFECTIVE GROUNDS OF APPEAL WHEREIN IT HAS CHALLENGED THE DEL ETION OF RS.17,49,625/- ITA NO.2842/DEL/2008 I.T.A.NO. 1678/DEL/2009 C.O.NO.168/DEL/2009 3 MADE BY LD. CIT(A) ON ACCOUNT OF DIFFERENCE IN VALU ATION OF A PLOT AS PER VALUATION REPORT AND AS PER DECLARATION BY THE ASSE SSEE. THE SECOND GRIEVANCE OF THE REVENUE IS DELETION OF ADDITION OF RS.18,74,408/- WHICH THE ASSESSING OFFICER HAD MADE ON ACCOUNT OF UNDISCLOSE D AMOUNT OF CONSTRUCTION ON A BUILDING. DURING THE ASSESSMENT YEAR 2006-07, THE REVENUE IS AGGRIEVED WITH THE ACTION OF LD. CIT(A) BY WHICH HE HAD DELETED THE ADDITION OF RS.13,05,000/- MADE ON ACCOUNT OF U NEXPLAINED INVESTMENT IN PURCHASE OF JEWELLERY. THE REVENUE IS FURTHER A GGRIEVED BY THE ACTION OF LD. CIT(A) BY WHICH HE HAD PARTLY ALLOWED RELIEF TO THE ASSESSEE ON ACCOUNT OF ADDITION OF CASH MADE BY THE ASSESSING OFFICER. IN THE CROSS OBJECTION, THE ASSESSEE IS AGGRIEVED WITH THE ACTION OF LD. CI T(A) IN PARTIAL UPHOLDING OF ADDITION MADE BY ASSESSING OFFICER ON ACCOUNT CA SH FOUND AT THE TIME OF SURVEY. 3. LD. D.R. AT THE OUTSET SUBMITTED THAT ADDITIONS WERE MADE TO THE INCOME OF THE ASSESSEE ON ACCOUNT OF SURRENDER OF T OTAL RS.70 LACS WHICH WAS MADE BY THE ASSESSEE AT THE TIME OF SURVEY. LD. D. R. SUBMITTED THAT AS PER THE GOVERNMENT VALUER, THE PIECE OF PLOT WAS VALUED AT RS.25 LACS WHEREAS THE ASSESSEE HAD DECLARED THE SAME AT RS.7,50,375/- . IT WAS ARGUED THAT THE LAND FOR PURCHASE ON 18.04.2004 FOR RS.7,50,375/- C ANNOT BECOME RS.25 LACS BY THE END OF DECEMBER 2004. THEREFORE, IT IS APPA RENT THAT THE ASSESSEE HAD DECLARED LESSER AMOUNT IN HIS BOOKS OF ACCOUNT AS C OMPARED TO MARKET VALUE AND, THEREFORE THE ASSESSING OFFICER HAD RIGHTLY MA DE THE ADDITION. LD. D.R. FURTHER SUBMITTED THAT THE ASSESSEE HAD ACCEPTED TH E ADDITIONS ON ACCOUNT OF UNDISCLOSED CONSTRUCTION AS PER DETAILS OF MATERIAL AND AMOUNT IN RESPECT OF CONSTRUCTION MATERIAL AND BUILDING WHICH WAS WRITTE N ON A PIECE OF PAPER AND WHICH THE ASSESSEE HAD NOT RECORDED IN HIS BOOK S OF ACCOUNTS. ITA NO.2842/DEL/2008 I.T.A.NO. 1678/DEL/2009 C.O.NO.168/DEL/2009 4 THEREFORE, THE ACTION OF LD. CIT(A) DISREGARDING TH ESE DOCUMENTS, WAS NOT JUSTIFIED. ARGUING THE APPEAL FOR THE ASSESSMENT Y EAR 2006-07, THE LD. D.R. SUBMITTED THAT DURING SURVEY, A PIECE OF PAPER WAS FOUND WHEREIN THE FACT OF HAVING PURCHASED JEWELLERY WORTH RS.13.05 LACS WAS WRITTEN. THE ASSESSEE, DURING HIS STATEMENT RECORDED DURING THE COURSE OF SURVEY, HAD OFFERED THE SAME AS HIS INCOME. THEREFORE LD. CIT(A) HAD WRONG LY DELETED THE ADDITION. ARGUING THE GROUND NO.2, LD. D.R. SUBMIT TED THAT THE CASH FOUND AT THE TIME OF SURVEY WAS ALREADY SURRENDERED BY TH E ASSESSEE DURING THE COURSE OF STATEMENT RECORDED AT THE TIME OF SURVEY PROCEEDINGS IN THE PRESENCE OF HIS ADVOCATE, THEREFORE, THE PART DELET ION WAS NOT JUSTIFIED. 4. LD. A.R. ON THE OTHER HAND SUBMITTED THAT THE AS SESSEE WAS FORCED TO SURRENDER TOTAL AMOUNT OF RS.70 LACS DURING SURVEY ON 26.09.2005 AND WAS MADE TO SIGN THE STATEMENT AND AFFIDAVIT IN THIS RE SPECT. IT WAS SUBMITTED THAT THE ASSESSEE HAD SIGNED THE STATEMENT UNDER PR ESSURE AND, THEREFORE, ON 03.10.2005 ITSELF, THE ASSESSEE RETRACTED FROM HIS STATEMENT AND, THEREFORE THE STATEMENT RECORDED DURING THE SURVEY IS OF NO LEGAL VALUE. REGARDING MERITS OF THE CASE, THE LD. A.R. SUBMITTED THAT 50% OF THE LAND WAS PURCHASED IN THE YEAR UNDER CONSIDERATION AND 50% WAS PURCHASED IN THE PRECEDING YEAR AND, THEREFORE THE ASSESSING OFFICER WRONGLY TOOK T HE VALUE OF THE ENTIRE LAND IN ONE YEAR WHICH ITSELF SHOWS THAT THE ASSESS ING OFFICER DID NOT APPLY HIS MIND WHILE PASSING THE ASSESSMENT ORDER AND SIM PLY RELIED UPON THE DOCUMENTS SEIZED DURING THE SURVEY AND THE STATEMEN T OF THE ASSESSEE WHICH ITSELF WAS RECORDED UNDER PRESSURE. ARGUING THE SE COND GROUND IN ASSESSMENT YEAR 2005-06, THE LD. A.R. SUBMITTED THA T THERE WAS NO INVESTMENT IN THE YEAR UNDER CONSIDERATION AS THE C ERTIFICATE FOR COMPLETION OF PROPERTY WAS APPLIED ON 13.12.2000 ITSELF AS HEL D BY THE ASSESSING ITA NO.2842/DEL/2008 I.T.A.NO. 1678/DEL/2009 C.O.NO.168/DEL/2009 5 OFFICER IN THE ASSESSMENT YEAR 1999-2000 AND AS NOT ED BY LD. CIT(A) IN HIS ORDER AT PAGE 25. THEREFORE, SIMPLY RELYING UPON T HE PIECE OF PAPER TO MAKE THE ADDITION WITHOUT VERIFYING THE ACTUAL FACTS, IS NOT TENABLE IN LAW AND LD. CIT(A) HAS RIGHTLY DELETED THE SAME. REPLYING FOR REVENUES APPEAL IN ASSESSMENT YEAR 2006-07, LD. A.R. SUBMITTED THAT SU RRENDER OF JEWELLERY WAS ALSO MADE ON ACCOUNT OF A PIECE OF PAPER WHEREIN NO ITEMS OF JEWELLERY WERE MENTIONED AND ASSESSEE WAS ONLY FORCED TO SIGN THE SAME. IT WAS ARGUED THAT THE NATURE OF JEWELLERY, FROM WHERE IT WAS PURCHASE D AND ITS RATE WAS NOT MENTIONED ON THE PIECE OF PAPER AND THE ASSESSING O FFICER SIMPLY ON THE BASIS OF A FORCED SURRENDER HAS MADE THE ADDITION. AS REGARDS THE 2 ND GROUND REGARDING CASH, LD. A.R. SUBMITTED THAT LD. CIT(A) HIMSELF IN HIS CONCLUDING REMARKS HAS HELD THAT LIKE OTHER ADDITIO NS, THE CASH FOUND AT THE TIME OF SURVEY WAS ALSO COKED UP STORY AND, THEREFO RE SHOULD HAVE DELETED THE ENTIRE AMOUNT INSTEAD OF GIVING PARTIAL RELIEF. 5. LD. D.R. IN HER REJOINDER AND REPLYING TO CROSS OBJECTIONS SUBMITTED THAT LD. CIT(A) HAS HELD THAT SURRENDER AT THE TIME OF SURVEY WAS TOTALLY A COOKED UP STORY WHICH IS NOT POSSIBLE AS THE ADVOCA TE OF THE ASSESSEE WAS ALSO PRESENT DURING SURVEY AND HIS SIGNATURES WERE ALSO OBTAINED ON THE SURRENDERED AMOUNT. IN THIS RESPECT, SHE SUBMITTED THAT COMPLETE SURVEY FOLDER WAS AVAILABLE FOR INSPECTION WHICH CAN BE EX AMINED. 6. WE HAVE HEARD RIVAL PARTIES AND HAVE GONE THROUG H THE MATERIAL PLACED ON RECORD. WE FIND THAT THE SURVEY WAS CONDUCTED O N 26.09.205 AND WITHIN A PERIOD OF LESS THAN 10 DAYS I.E. ON 03.10.2005, THE ASSESSEE HAD RETRACTED FROM HIS STATEMENT MADE DURING SURVEY PROCEEDINGS. THEREFORE, THE STATEMENT RECORDED DURING SURVEY PROCEEDINGS CANNOT BE SOLELY RELIED UPON FOR MAKING THE ADDITIONS IN THE CASE OF THE ASSESSE E WHERE OTHER ITA NO.2842/DEL/2008 I.T.A.NO. 1678/DEL/2009 C.O.NO.168/DEL/2009 6 CORROBORATING MATERIAL IS NOT THERE. AS REGARDS TH E ADDITION ON ACCOUNT OF VALUE OF LAND DECLARED BY THE ASSESSEE AND AS PER V ALUATION REPORT OBTAINED, WE FIND THAT FIRSTLY, THE LAND AS DECLARED IN THE B OOKS REPRESENT ONLY 50% OF THE LAND. THE ASSESSING OFFICER WITHOUT VERIFYING THIS FACT, HAD MADE THE ADDITION ON ACCOUNT OF MARKET VALUE AS OBTAINED FRO M VALUER WHICH ITSELF DESCRIBES THE NON APPLICATION OF MIND BY THE ASSESS ING OFFICER. MOREOVER, WE FIND THAT THE ADDITION SIMPLY ON ACCOUNT OF DIFF ERENCE IN VALUATION REPORT AND AS PER DECLARED VALUE OF LAND CANTO BE MADE. L D. CIT(A) ON THE BASIS OF SUBMISSIONS OF THE ASSESSEE AND RELYING UPON VARIOU S CASE LAWS HAS HELD AS UNDER: 12.1 I HAVE VERY CAREFULLY GONE THROUGH THE ASSESS MENT ORDER, THE WRITTEN SUBMISSIONS, COUNTER-COMMENTS OF THE AO AND REJOINDER THERETO. IN MY CONSIDERED OPINION, THE AO HAS MISER ABLY FAILED TO BRING ON RECORD ANY WORTHWHILE EVIDENCE OR MATERIAL WHICH MAY SUGGEST THAT THE APPELLANT HAS PAID ANY AMOUNT OVER AND ABOVE THE AMOUNT MENTIONED IN THE SALE DEEDS. SO MUCH SO, THE AO HAS NOT TAKEN CARE TO NOTICE THAT 50% OF THE INVESTMENT IN THE PU RCHASE OF PLOT OF LAND PERTAINED TO A.Y. 2004-05 AND NOT TO THE A.Y. 2005-06. APPARENTLY, THE AO HAS ERRED IN LAW IN HOLDING THAT VALUATION OF PLOT OF LAND, AS PER REPORT DATED 13/1212004 OF THE GOVT . APPROVED VALUER AT RS.25 LAKHS IS THE INVESTMENT AND RELEVANT TO A. Y. 2005-06, WHEN ADMITTEDLY AS PER PURCHASE DEEDS DATED 23/5/2003 AN D 18/6/2004, THE COST INCLUDING STAMP DUTY WAS PAID AT RS.7,50,375/- . THE ONUS LIES ON THE AO TO PROVE THAT THE APPELLANT HAS PAID ANY AMO UNT OVER AND ABOVE THE AMOUNT RECORDED IN THE PURCHASE DEED( S) AND THUS THE ONUS HAS NOT BEEN DISCHARGED, AND NO INQUIRY, WHATSOEVER HAS BEEN MADE BY THE AO FROM THE VENDORS OR ANY PROPERTY DEALER O R FROM ANY OTHER SOURCE. 12.2. THE JURISDICTIONAL HIGH COURT IN CIT V. NITIN KUMAR (2001) 248 ITR 478 ( P& H) HAS HELD THAT ADDITION ON A/C OF UN EXPLAINED INVESTMENT COULD ONLY BE MADE U/S 69 OF THE ACT AND THAT THERE WAS NO MATERIAL EVIDENCE TO ESTABLISH THAT THE APPELLANT M ADE INVESTMENT OVER AND ABOVE THAN RECORDED IN THE SALE DEED AND IN THE ABSENCE OF ANY SUCH EVIDENCE, NO ADDITION COULD BE MADE UNDER SECT ION 69 OF THE ITA NO.2842/DEL/2008 I.T.A.NO. 1678/DEL/2009 C.O.NO.168/DEL/2009 7 INCOME TAX ACT AND THE REVENUE HAS ALSO NOT MADE AN Y ENQUIRIES FROM THE PROPERTY DEALERS, VENDORS, ETC., TO ESTABLISH T HAT THE APPELLANT PAID ANY AMOUNT, OVER AND ABOVE THE APPARENT CONSIDERATI ON IN PURCHASE OF THE SAID PLOTS. THE DELHI HIGH COURT IN CIT V. N ARESH KHATTAR(HUF) 261 ITR 664 (DEL.) RELYING UPON THE RA TIO LAID BY THE SUPREME COURT IN K.P.VARGHESE 131 ITR 59 (SC) HAS A LSO HELD THAT THE STATEMENT OF THE ASSESSEE'S COUNSEL IN CIVIL SU IT WOULD NOT BE SUFFICIENT MATERIAL TO COME TO THE CONCLUSION THAT RS.13 CRORES ODD REPRESENTED ACTUAL INVESTMENT. APPLYING THE RATIO L AID BY THE JURISDICTIONAL HIGH COURT AND IN VIEW OF THE DELHI HIGH'S JUDGEMENT, REFERRED TO ABOVE, AND OTHER CASE-LAWS RELIED UPON BY THE APPELLANT AND DISCUSSED EXTENSIVELY IN THE WRITTEN SUBMISSION S, I FIND THAT SINCE THE AO HAS NOT LED ANY EVIDENCE TO DISCHARGE HIS ON US EITHER AT THE TIME OF ASSESSMENT OR EVEN AT THE STAGE OF APPEAL B EFORE ME TO PROVE THAT THE APPELLANT HAS PAID ANY AMOUNT OVER AND ABO VE THE AMOUNT RECORDED IN THE SALE DEEDS, I HOLD THAT THE AO WAS LEGALLY NOT JUSTIFIED TO MAKE AN ADDITION OF RS.17,49,625/- ON A/C OF ALL EGED UNEXPLAINED INVESTMENT IN THE PURCHASE OF PLOT NO.506/16A. ACCO RDINGLY, THE SAME IS CANCELLED. GROUND NO.L.1 AND 1.2 ARE THUS ALLOWE D. 7. WE FIND NO INFIRMITY IN THE ORDER OF LD. CIT(A) AS REGARDS GROUND NO.1, THEREFORE, GROUND NO.1 IS DISMISSED. 8. THE FINDINGS OF LD. CIT(A) WITH REGARD TO GROUND NO.2 ARE AT PAGE 25 WHERE VIDE PARA 16.1, LD. CIT(A) HAD DELETED THE AD DITION. THE RELEVANT FINDINGS ARE REPRODUCED AS UNDER: I HAVE CAREFULLY GONE THROUGH THE ASSESSMENT ORDER , WRITTEN SUBMISSIONS, AO'S COUNTER COMMENTS AND THE REJOINDE R. IN MY CONSIDERED OPINION, THE AO WAS NOT JUSTIFIED TO REL Y ONLY ON THE JOTTINGS OF RS.29,95,282/- MADE ON A PIECE OF PAPER ALLEGED TO BE FOUND DURING SURVEY AND ADMITTEDLY NOT BEARING DATE /MONTH/YEAR AND NO CORROBORATIVE MATERIAL WAS FOUND DURING SURVEY, AND THE APPELLANT HAD RESCINDED BY FILING AN AFFIDAVIT DATED 03110/20 05 BEFORE THE CIT/ADDL. CITI ITO INCHARGE SURVEY FROM HIS STATEME NT DATED 2610912005, WHEREIN HE HAD AGREED TO THE ADDITION F OR AY. 2006-07. THE AO'S REFERENCE IN THE ASSESSMENT ORDER OF THE A FFIDAVIT OF SHRI J.K.GARG, ADVOCATE, DOES NOT LEAD TO ANY EVIDENCE/C REDIBILITY THAT ITA NO.2842/DEL/2008 I.T.A.NO. 1678/DEL/2009 C.O.NO.168/DEL/2009 8 INVESTMENT IN THE CONSTRUCTION OF H.NO.506/16A AND PROPERTY NO.217/9 WAS RELEVANT TO AY. 2006-07 AT RS.29,95,28 2/- AS AGREED BY THE APPELLANT IN THE STATEMENT RECORDED ON 26/9/200 5. THE CONTENTS OF THE AFFIDAVIT ARE THUS NOT RELEVANT, PARTICULARLY W HEN THE AO HAS ASSESSED INVESTMENT FORH.NO.506116A IN AY. 2005-06 AND AS PER THE ASSESSMENT ORDER OF AY. 1999-2000, COMPLETION CERTI FICATE FOR PROPERTY NO.217/9 WAS APPLIED ON 13.12.2000. IT IS THUS EVIDENT THAT THE AO HAS COMMITTED A GRAVE AND PATENT ERROR IN RE LYING EXCLUSIVELY ON THE JOTTING OF THE FIGURES OF 29,95,282/- THE CR EDIBILITY OF WHICH IS SHAKEN AND NOT SUBSTANTIATED. I ALSO FIND THAT THE AO BY ESTIMATING AN AMOUNT OF RS.L3,24,125/- , PURELY ON IMAGINATIONS, ON ACCOUNT OF ITEMS LEFT OVER IN THE JOTTINGS OF 29,95,282 I.E. ON ACCO UNT OF SARI A, SAND ETC. HAS UNNECESSARILY ADDED ANOTHER IMAGINATIVE FIGURE, INSTEAD OF THRASHING THE ISSUE WITH WISDOM, JUDICIAL AND A RAT IONAL APPROACH. SO MUCH SO, THE AO HAS NOT GIVEN ANY COUNTER-COMMENT O N THE RELEVANT AND VITAL OBJECTIONS RAISED IN PARA 37 OF THE WRITT EN SUBMISSION, DISCUSSED IN PARA 15 SUPRA. IT IS WELL SETTLED PRIN CIPLE OF LAW THAT NO ADDITION CAN BE MADE ON IMAGINATION, GUESS WORK, SU SPICION, SURMISES AND CONJECTURE. I AM THEREFORE, OF THE CONSIDERED O PINION AND HOLD THAT THE AO HAS COMPLETELY ERRED BOTH ON FACTS AND IN LAW IN MAKING AN ADDITION OF RS. 18,74,408/- I.E. DIFFERENCE BETW EEN THE AMOUNTS OF RS.29,95,282 +13,24,125 MINUS 7,20,000 ON A/C OF UN EXPLAINED INVESTMENT IN THE CONSTRUCTION OF HOUSE NO.506116A , WHEREAS THE APPELLANT HAD DECLARED INVESTMENT AT RS.17,25,000/- . WE FIND THAT LD. CIT(A) HAD RIGHTLY DELETED THE ADD ITION AND WE DO NOT FIND ANY INFIRMITY IN THE SAME. THEREFORE, GROUND NO.2 IS ALSO DISMISSED. 9. COMING TO APPEAL IN ASSESSMENT YEAR 2006-07, TH E ADDITION OF RS.13,05,000/- HAS BEEN DELETED BY LD. CIT(A) BY HO LDING AS UNDER: 7.11 THEREFORE, KEEPING IN VIEW THE FACTS OF THE C ASE, EXTRACTED SUPRA, AND THE POSITION OF LAW, STATED ABOVE, I CON SIDER THAT THE AO WAS NOT JUSTIFIED IN MAKING AN ADDITION OF RS.13,05 ,000/- FOR PURCHASE OF JEWELLERY RELYING ONLY ON THE STATEMENT RECORDED DURING SURVEY AND THE STATEMENT DURING SURVEY COULD NOT BEEN RECORDED ON OATH AND THAT SUCH A STATEMENT HAS NO EVIDENTIAL VALUE. HOWEVER, SUCH AN INFORMATION COULD BE USED AGAINST THE ASSESSEE, IF SOME THING POSITIVE ITA NO.2842/DEL/2008 I.T.A.NO. 1678/DEL/2009 C.O.NO.168/DEL/2009 9 HAD BEEN FOUND THAT THE ASSESSEE HAD ACTUALLY PURCH ASED THE JEWELLERY. THE AO HAS NOT BROUGHT ON RECORD DATE/MO NTH/YEAR OF PURCHASE OF JEWELLERY, ITS DESCRIPTION, NAME OF THE JEWELLER AND IS ALSO NOT AWARE IF THE JEWELLERY IN FACT EXISTED OR NOT. IN MY OPINION, THE SURRENDER OF EXTRA INCOME OF RS.13,05,000/-FOR THE ALLEGED PURCHASE OF JEWELLERY IS SIMILAR IN NATURE AS WAS AGREED ON A/C OF UNEXPLAINED INVESTMENT IN SCO 217/9 AND H.NO.506116A, DISCUSSED SUPRA. IT WOULD, HOWEVER, BE RELEVANT TO LOOK INTO THE AFFIDA VIT DATED 03.10.2005 SUBMITTED BY THE ASSESSEE BEFORE THE THE N COMMISSIONER OF 1. TAX, FARIDABAD. IT IS REPRODUCED BELOW:- 'I, RAMESH CHAND SON OF SHRI DHARAM CHAND AGED 60 Y EARS RESIDENT OF H.NO.506, SECTOR 16-A, FARIDABAD AND PROPRIETOR OF M/S RAS TRADERS, MATHURA ROAD, FARIDABAD, DO HEREBY SOLEMNL Y DECLARE AS UNDER.- 1. THAT SHRI N.K.BANSAL, ITO, WARD 1(1), FARIDABAD AND OTHER OFFICERS/ OFFICIALS OF THE 1.T. DEPTT: HAD CONDUCTE D ON 26127.09.2005 SURVEY U/S 133A OF THE 1.T.ACT,1961 AND VERIFIED BO OKS OF ACCOUNTS, DOCUMENTS, STOCK AND CASH FOUND AT THE BUSINESS PRE MISES. 2. THAT THE SURVEY TEAM HAD PREPARED INVENTORY OF S TOCK AND THE ITO INCHARGE CAME TO THE CONCLUSION THAT STOCK WAS EXCE SS BY ABOUT RS.23 LAKHS BUT SHRI N. K. BANSAL ITO COERCED THE ASSESSE E TO MAKE A SURRENDER OF RS.70 LAKHS AS EXTRA INCOME AND ALSO D EVISED THAT IT SHOULD BE DECLARED TO ASSESSMENT YEAR 2006-07 IN TH E FOLLOWING MANNERS:- (I) ACQUISITION OF JEWELLERY AT RS.13.05 LAKHS. (II) CASH IN HAND AT RS.3.14 LAKHS AS AGAINST RS.L4 ,000/- ACTUALLY FOUND. (III) RS.30 LAKHS SPENT ON THE CONSTRUCTION OF HOUS E. (IV) EXCESS STOCK OF RS.23.95 LAKHS. 3. THAT SH. N.K.BANSAL, ITA INSTILLED FEAR BY GIVIN G MULTIFARIOUS THREATS AND THEREBY THE DEPONENT HAD WRITTEN AT HIS INSTANCE THE FOLLOWING PARTICULARS IN A DIARY. SHRI N.K. BANSAL, ITA ALSO KNEW THAT WHAT HE WAS ASKING THE ASSESSEE TO WRITE WAS NOT CO RRECT AND THE SAME WAS FALSE. ITA NO.2842/DEL/2008 I.T.A.NO. 1678/DEL/2009 C.O.NO.168/DEL/2009 10 (I) 'UCHANTI BAIJA 13.05 LACS JEWELLERY PURCHASED' (II) ' MAKKAN 506/217 PAYMENT MADE CONTINUATION TIL L DATE 9/L UCHANTI' WITH IMAGINARY DETAILS FOR THE AMOUNT OF R S.29,95,282/- (III) THAT CASH WAS FOUND AT RS.3,14,420/- AND THE SAME WAS RETURNED BACK. 4. SUBSEQUENTLY, SHRI N.K.BANSAL ITO HAS CALLED THE ASSESSEE TO HIS OFFICE AND HANDED OVER A DRAFT OF THE AFFIDAVIT, WH ICH CONTAIN CONFIRMATION OF THE ABOVE STATED FALSE FACTS. HE HA S DIRECTED THAT THE PROPOSED AFFIDAVIT SHOULD BE FURNISHED AND INCASE O F FAILURE, DIRE CONSEQUENCES WOULD FOLLOW. 5. THAT SINCE THE AFFIDAVIT PROPOSED BY SHRI N. K. BANSAL, ITO DO NOT REPRESENT THE CORRECT FACTS, THE DEPONENT DOES NOT WANT TO COMMIT A SECOND BLUNDER BY GIVING A WRONG AFFIDAVIT, THE FIR ST BEING COMMITTED IN THE STATEMENT GIVEN AT HIS INSTANCE. 6. THAT SIN CE THE EARLIER STATEMENT RECORDED DURING SURVEY FOR SURRENDER OF I NCOME AT RS.70 LAKHS AT THE INSTANCE OF SHRI N.K.BANSAL, ITA WAS G IVEN UNDER THREAT AND FEAR AND BASED ON IMAGINARY WRITINGS, THE SAME IS THUS RESCINDED. SD. DEPONENT. VERIFICATION THE ABOVE MENTIONED DEPONENT HEREBY CONFIRM AND VER IFY THAT WHAT IS STATED ABOVE IS TRUE AND CORRECT TO BE BEST OF MY K NOWLEDGE AND BELIEF AND NOTHING IS FALSE AND NOTHING HAS BEEN CONCEALED . VERIFIED TODAY THE 3RD OCTOBER, 2005 AT FARIDABAD.' SD/- DEPONENT. ATTESTED AS IDENTIFIED. SD/- NOTARY, FARIDABAD(HARYANA) 03 OCT 2005. 7.12. IN VIEW OF THE DETAILED DISCUSSIONS HELD SUPR A, IN MY FIRM OPINION, THE AO WAS NOT JUSTIFIED IN MAKING AN ADDI TION OF RS.13,05,000/- ON THE BASIS OF THE STATEMENT RECORD ED DURING THE SURVEY, PARTICULARLY WHEN THE SAME WAS RESCINDED IM MEDIATELY BY FILING A GRIEVANCE PETITION SUPPORTED WITH AN AFFID AVIT BEFORE THE HIGHER AUTHORITIES. THAT, NO EVIDENCE HAS BEEN BROU GHT ON RECORD IF THE ASSESSEE HAD PURCHASED ANY JEWELLERY IN THE FIN ANCIAL YEAR 2005- 06 RELEVANT TO A.Y. 2006-07. I, THEREFORE, HOLD THA T THE ASSESSEE'S EXPLANATION SUBMITTED BEFORE THE AO RELYING UPON TH E GRIEVANCE ITA NO.2842/DEL/2008 I.T.A.NO. 1678/DEL/2009 C.O.NO.168/DEL/2009 11 PETITION AND AFFIDAVIT SUBMITTED TO THE HIGHER AUTH ORITIES CANNOT BE BRUSHED ASIDE. ACCORDINGLY, THE ADDITION OF RS.13,0 5,000/- IS CANCELLED AND GROUNDS NOS.1.1, 1.2 AND 1.3 ARE ALLO WED. 10. WE FIND THAT LD. CIT(A) HAD ELABORATELY DEALT W ITH THE ISSUE AND HAS RIGHTLY DELETED THE ADDITION AND WE DO NOT FIND ANY INFIRMITY IN THE SAME. 11. AS REGARDS THE ISSUE OF ADDITION OF CASH FOUND DURING THE YEAR LD. CIT(A) HAD PARTLY ALLOWED RELIEF BY HOLDING AS UNDE R: 8.9. I HAVE VERY CAREFULLY GONE THROUGH THE ASSESS MENT ORDER AND CONSIDERED THE APPELLANT'S WRITTEN SUBMISSIONS, GRI EVANCE PETITION AND AFFIDAVIT DATED 03.10.2005, DISCUSSED SUPRA. IN MY OPINION, THE ASSESSEE'S OFFER FOR ADDITIONAL INCOME AGREED AT RS .70 LAKHS, INCLUDING THE ALLEGED UNEXPLAINED CASH OF RS.3,05,0001-STANDS DEMOLISHED, AS PER THE DETAILED DISCUSSION MADE ABOVE. HOWEVER, WH EN I CONSIDER THE DETAILS OF CASH DRAWN AT RS.3,14,420/- AND ITS RETU RN WITNESSETH BY AN ADVOCATE, I AM NOT ABLE TO COMPREHEND AS TO WHY THE ASSESSEE HAD PUT HIS SIGNATURES ON THE DETAILS OF CASH AND WHY SHRI J.K. GARG, ADVOCATE WITNESSETH IT, IF HE WAS NOT HIS COUNSEL A ND NO POWER OF ATTORNEY WAS EXECUTED IN HIS FAVOUR. HOWEVER, IN VI EW OF THE TOTALITY OF FACTS, THOUGH CASH OF RS.3,14,4201- FOUND ALSO SEEM S TO BE A MADE-UP AFFAIR SIMILAR TO THE PURCHASE OF JEWELLERY AND UNE XPLAINED INVESTMENT IN CONSTRUCTION OF H.NO.506116A 1 207/9, YET IN VIE W OF THE DETAILS OF CASH DRAWN AND ITS RETURN ACKNOWLEDGED, I CANNOT SA Y POSITIVELY AS TO WHAT IS/WAS THE TRUTH OF THE MATTER AND THUS, I AM NOT INCLINED TO CANCEL THE WHOLE ADDITION. HOWEVER, I ALLOW BENEFIT OF CASH AT RS.51 ,646/-ON 26.09.2005 ON THE BASIS OF THE CASH BOOK, SINCE THE AO HAS NOT DOUBTED ITS GENUINENESS, EVEN WHEN CASH BOOK WA S NOT WRITTEN AT THE TIME OF SURVEY. I, THEREFORE, GIVE BENEFIT OF R S,51 ,646/-AS AGAINST THE CASH ALLEGEDLY FOUND AT RS.3,14,4201- AND UPHOL D THE ADDITION AT RS.2,62,774/- AND CANCEL THE ADDITION OF RS.51,646/ - [RS.3,14,420 (-) 2,62,774]. GROUND NOS. 2.1 & 2.2 ARE PARTLY ALLOWED . 10. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED GIV ING A RELIEF OF RS.13,56,646/- (RS.13,05,000/- + RS.51,646/-) AND C ONFIRMING THE ADDITION OF RS.2,62,774/- ITA NO.2842/DEL/2008 I.T.A.NO. 1678/DEL/2009 C.O.NO.168/DEL/2009 12 12. LD. CIT(A) IN THIS REGARD HAS PARTLY UPHELD THE ADDITION ON ACCOUNT OF CASH FOUND THOUGH HE OBSERVED THAT IT ALSO LOOKED L IKE A COOKED UP STORY BUT THE FACT OF DENOMINATION OF CASH MENTIONED ON PAPER AND ITS ACKNOWLEDGEMENT OF HAVING RECEIVED BACK FROM SURVEY PARTY IN THE PRESENCE OF ADVOCATE INFLUENCED HIM TO ACCEPT IT TO BE TRUE AND, THEREFORE, HE HAD ALLOWED THE RELIEF ONLY ON ACCOUNT OF CASH BALANCE AS REFLECTED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE AS ON THE DATE OF SURVEY , WHICH UNDER THE PRESENT FACTS AND CIRCUMSTANCES IS A CORRECT APPROACH AND, THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE SAME. 13. IN VIEW OF ABOVE, BOTH THE APPEALS FILED BY THE REVENUE AS WELL AS THE CROSS OBJECTION FILED BY THE ASSESSEE ARE DISMISSED . 14. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH JULY, 2014. SD./- SD./- (I. C. SUDHIR) (T.S. KAP OOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 25 TH JULY, 2014 SP 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).