DCIT, New Delhi V. M/s. Ramprastha Builders Pvt. Ltd., New Delhi

ITA 3238/DEL/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6820 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 8 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-02-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 18-11-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 22-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NANDITA KANCHAN
• Assessee Lawyers: VED JAIN RAJESH JAIN CAS
• Keywords: Unexplained investment; Income from undisclosed sources; Search and seizure; Document seized; Question of law; Notional interest; Commercial expediency; Onus to prove; Retraction; Documents seized; Revenue expenditure
• Section: 40A(3); 133A; 131; 132; 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO. 3238/DEL/2013 AY: 20 10-11 DCIT, VS M/S RAMPRASTHA BUILDERS PVT. LTD., CENTRAL CIRCLE-14, B-23-25, KAILASH COLONY, NEW DELHI. NEW DELHI. (PAN: AADCR3877N) ITA NO. 3239/DEL/2013 AY: 20 10-11 DCIT, VS RAMPRASTHA GREENS (P) LTD., CENTRAL CIRCLE-14, C-10, C-BLOCK MARKET, NEW DELHI. VASANT VIHAR, NEW DELHI. (PAN: AADCR3868F) ITA NO. 3240/DEL/2013 & 3241/DEL/2013 AY: 20 10-11, 2009-10 DCIT, VS M/S RAMPRASTHA PROMOTERS & D EVELOPERS PVT. LTD., CENTRAL CIRCLE-14, C-10, C-BLOCK MARKET, NEW DELHI. VASANT VIHAR, NEW DELHI. (PAN: AADCR6481J) (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. NANDITA KANCHAN, CIT (DR) RESPONDENT BY : S/ SHRI VED JAIN, RAJESH JAIN, CAS ORDER PER BENCH ALL THESE FOUR APPEALS ARE PREFERRED BY THE DEPART MENT. ALL THE APPEALS PERTAIN TO RAMPRASTHA GROUP OF COMPANIE S. 2. IN I.T.A. NO. 3238 THE ASSESSEE IS RAMPRASTHA BU ILDERS (PVT.) LTD. AND IT PERTAINS TO ASSESSMENT YEAR 2010-11.IT HAS BEEN FILED AGAINST THE ORDER DATED 20.02.2013 PASSED BY THE LD . CIT(A)-XXXIII, I.T.A. 3238, 3239, 3240, 3241/DEL/2013 ASSESSMENT YEARS: 20009-10,2010-11 2 NEW DELHI. THE MAIN ISSUE IN DISPUTE IS DELETION O F THE ADDITION OF RS.12 CRORES BY THE LD. CIT (A) BASED ON ALLEGED RE TRACTION OF SURRENDER STATEMENT BY THE CHAIRMAN OF THE GROUP. 3. I.T.A. NO. 3239 ALSO PERTAINS TO ASSESSMENT YEAR 2010-11 AND RELATES TO ANOTHER ASSESSEE RAMPRASTHA GREENS (P) L TD. IN THE SAME GROUP. THE IMPUGNED ORDER IS DATED 20.2.2013 AND H AS BEEN PASSED BY THE LD. CIT (A)-XXXIII, NEW DELHI. IN THIS APPE AL, THE DEPARTMENT HAS CHALLENGED THE DELETION OF ADDITION OF RS. 2 CR ORES, AGAIN ON THE BASIS OF ALLEGED RETRACTION OF STATEMENT. 4. I.T.A. NO. 3240 PERTAINS TO YET ANOTHER ASSESSE E RAMPRASTHA PROMOTERS & DEVELOPERS PVT. LTD. IN THE RAMPRASTHA GROUP OF COMPANIES. THE IMPUGNED ORDER IS DATED 20.2.2013 A ND HAS BEEN PASSED BY THE LD. CIT (A)-XXXIII, NEW DELHI. IN TH IS APPEAL FOR ASSESSMENT YEAR 2010-11, THE DEPARTMENT IS AGITATIN G THE DELETION OF RS.14 CRORES BASED ON ALLEGED RETRACTION OF STAT EMENT BY THE CHAIRMAN OF THE GROUP. ANOTHER DISPUTE IN THIS APP EAL IS REGARDING THE DELETION OF ADDITION OF RS. 7,31,89,263/- ON AC COUNT OF PRO RATE NOTIONAL INTEREST ON INTEREST FREE ADVANCES GIVEN T O ASSOCIATED CONCERNS. 5. I.T.A. 3241 PERTAINS TO ASSESSMENT YEAR 2009-1 0 AND THE I.T.A. 3238, 3239, 3240, 3241/DEL/2013 ASSESSMENT YEARS: 20009-10,2010-11 3 ASSESSEE IS RAMPRASTHA PROMOTERS & DEVELOPERS PVT. LTD. THIS APPEAL HAS BEEN PREFERRED AGAINST THE ORDER DATED 2 0.2.2013 PASSED BY THE LD. CIT(A)-XXXIII, NEW DELHI. THE ISSUES IN DISPUTE IN THIS APPEAL ARE DELETION OF ADDITION OF RS. 55 CRORES (A DDED U/S 40A (3) OF THE INCOME TAX ACT, 1961 AND DELETION OF RS. 5,10,3 8764/- BEING NOTIONAL INTEREST ON INTEREST FREE ADVANCES GIVEN T O ASSOCIATED CONCERNS. 6. AS THE ISSUES INVOLVED IN ALL THE FOUR APPEA LS ARE COMMON AND RELATED, ALL THE APPEALS ARE BEING DISPOSED OF BY T HIS COMMON ORDER. 6.1 THE FACTS, IN BRIEF, COMMON TO ALL APPEALS ARE THAT SEARCH/SURVEY OPERATION WAS CONDUCTED BY THE DEPART MENT AT THE BUSINESS PREMISES OF RAMPRASTHA GROUP COMPANIES AS WELL AS ON THE RESIDENTIAL PREMISES OF THE DIRECTORS OF GROUP COMPANIES. AT THE TIME OF SEARCH SH. BALWANT SINGH, CHAIRMAN OF RAMPR ASTHA GROUP OF COMPANIES, SURRENDERED AN AMOUNT OF RS. 52 CRORE S U/S 132(4) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED 'THE A CT') FOR DIFFERENT COMPANIES IN THE RAMPRASTHA GROUP. DURING THE COUR SE OF SEARCH, VARIOUS DOCUMENTS WERE FOUND AND SEIZED FRO M PLOT NO. 114, SECTOR-44, GURGAON WHICH IS THE OFFICE PREMISES OF THE GROUP. THE STATEMENT OF SHRI BALWANT SINGH, CHAIRMAN OF RAMPRA STHA GROUP OF COMPANIES WAS RECORDED U/S 132 OF THE ACT ON 31.7.2 009 AND I.T.A. 3238, 3239, 3240, 3241/DEL/2013 ASSESSMENT YEARS: 20009-10,2010-11 4 VARIOUS DOCUMENTS, INTER-ALIA, CONTAINED IN ANNEXURES A-2 T O A-27 WERE CONFRONTED TO HIM. THE RELEVANT QUESTIONS AND ANSWERS IN HIS STATEMENT RECORDED U/S 132(4) OF THE ACT ON 31.7.20 09 ARE REPRODUCED AS UNDER: - ' Q1 I AM SHOWING YOU ANNEXURE A-2 TO A-27 FOUND AND SEIZED DURING THE COURSE OF SEARCH AT PREMISES 114, SECTO R 44, GURGAON TODAY I.E. 31.7.2009. PLEASE EXPLAIN THE CONTENTS OF THESE PAGES. ANS : THESE PAGES AND ANNEXURE RELATE TO FINANCIALS OF VARIOUS GROUP COMPANIES OF RAMPRASTHA GROUP. THE PE N DRIVE AND THE HARD DISKS MENTIONED AS ANNEXURE CONT AIN DETAILS OF THE BUSINESS OF RAMPRASTHA GROUP. THE DE TAILED EXPLANATION OF THESE ANNEXURE OF LOOSE PAGES/HARD DISKS/PEN DRIVE WOULD BE SUBMITTED BY ME LATER. MOS T OF THE TRANSACTIONS MENTIONED IN THESE ANNEXURE ARE REFLECTED IN THE BOOKS OF ACCOUNTS OF VARIOUS COMPANIES OF RAMPR ASTHA GROUP. HOWEVER, AFTER PRIMA FACIE GOING THROUGH THESE DOCUMENTS, I ADMIT THAT SOME OF THE TRANSACTIONS ARE NOT REFLECTED AND RECORDED IN THE BOOKS OF ACCOUNTS OF VARIOUS COMPANIES OF RAMPRASTHA GROUP. ON ACCOUNT OF NON- RECORDING/NON-REFLECTION OF THESE TRANSACTIONS, I H EREBY VOLUNTARILY ADMIT FOLLOWING ADDITIONAL INCOME FOR T AXATION: I.T.A. 3238, 3239, 3240, 3241/DEL/2013 ASSESSMENT YEARS: 20009-10,2010-11 5 SL.NO. NAME OF THE CONCERN ASSTT.YEAR AMOUNT (IN RS.) HEAD 1. CORPORATE EXIM PVT. LTD. 2007%08 3,60,87,765 (AS PER PAGE 1 & 2 OF THE STATEMENT) DISALLOWANCE U/S 40A(3)(1) 2. EXCELLENT ADVERTISING & MARKETING (P) LTD. 2007%08 4,71,56,625 (%DO%) %DO% 3. RAMPRASTHA BUILDER (P) LTD. 2007%08 2,00,320 %DO% %DO% 4. KAMLA VALLABH DEVELOPERS (P) LTD. 2007%08 2,00,000 %DO% %DO% 5. CORPORATE EXIM PVT. LTD. 2008%09 1,74,90,400 AS PER PAGE 2 & 3 OF THE STATEMENT %DO% 6. RAMPRASTHA SARE LAND HOLDING CO. PVT. LTD. 2008%09 27,94,000 %DO% %DO% 7. RAMPRASTHA GREENS PVT. LTD. 2008%09 2,76,000 %DO% %DO% 8. SA PROPCON PVT. LTD. 2008%09 15,000 %DO% %DO% 9. RAMPRASTHA BUILDERS PVT. LTD. 2009%10 4,00,00,00 0 UNEXPLAINED INVESTMENT IN I.T.A. 3238, 3239, 3240, 3241/DEL/2013 ASSESSMENT YEARS: 20009-10,2010-11 6 STOCK I.E. WORK IN PROGRESS 10. MAHAMAYA GENERAL FINANCE CO. PVT. LTD. 2009%10 1,00,00,000 UNACCOUNTED RECEIPTS 11. RAMPRASTHA BUILDERS PVT. LTD. 2010%11 12,00,00, 000 UNEXPLAINED INVESTMENT IN STOCK I.E. WORK IN PROGRESS 12. RAMPRASTHA GREENS PVT. LTD. 2010%11 2,00,00,000 UNEXPLAINED INVESTMENT IN STOCK I.E. WORK IN PROGRESS 13. RAMPRASTHA PROMOTERS & DEVELOPERS PVT. LTD. 2010%11 14,00,00,000 UNEXPLAINED INVESTMENT IN STOCK I.E. WORK IN PROGRESS 14. CH. BALWANT SINGH YADAV 2010%11 1,20,00,00 UNAC COUNTED TRADE ADVANCE TO JAGBIR SON OF HARSINGH, GARAULI KALAN, DISTT. GURGAON 15. CH. BALWANT SINGH YADAV 2010%11 1,00,00,000 UNA CCOUTNED TRADE ADVANCE TO ABHAY SON OF ARJUN, MEVK DISTT. GURGAON 16. SANDEEP YADAV 2010%11 1,00,00,000 UNACCOUNTED TRADE ADVANCE TO RAVINDER SON OF I.T.A. 3238, 3239, 3240, 3241/DEL/2013 ASSESSMENT YEARS: 20009-10,2010-11 7 HUKAMCHAND RESIDENT OF KEDIPUR GURGAON. 17. SANDEEP YADAV 2010%11 60,00,000 UNACCOUNTED TRADE ADVANCE TO NARENDRA SON OF BIHARI LAL MEWKE, GURGAON 18. ARVIND WALIA 2010%11 90,00,000 UNACCOUNTED TRADE ADVANCE TO LAL CHAND SON OF RAI SINGH, WAZIRPUR, GURGAON 19. ARVIND WALIA 2010%11 80,00,000 UNACCOUNTED TRADE ADVANCE TO SATVIR SON OF RAM KUMAR HARSAROOP, GURGAON. 20. OTHER DISCREPANCIES TO BE ACCOUNTED FOR IN THE HANDS OF VARIOUS PERSONS OF THE ASSESSEE GROUP 2010%11 3,08,00,000 %%%%% TOTAL ADMITTED ADDITIONAL INCOME RS. 52,00,00,000/- ONLY * Q. NO. 2 PLEASE STATE HOW WILL YOU PAY TAX ON THIS VOLUNTARILY ADMITTED ADDITIONAL INCOME OF RS. 52,00,00,000/- IN THE HANDS OF PERSONS MENTIONED AB OVE I.T.A. 3238, 3239, 3240, 3241/DEL/2013 ASSESSMENT YEARS: 20009-10,2010-11 8 BY YOU? ANS.2 THE TAXES ON THIS ADMITTED ADDITIONAL INCOME OF RS.52,00,00,000/-ADMITTED BY ME ON BEHALF OF VARIOU S PERSONS MENTIONED ABOVE WOULD BE PAID OUT OF SALE PROCEEDS OF OUR VARIOUS BUSINESS PROJECTS. I ASSURE YOU THAT THE TAXES WOULD BE PAID AS DUE, AS FAR AS POSSIBLE, ON THIS INCOME.' 6.2 AGAIN, DURING THE COURSE OF POST SEARCH ENQUI RIES, THE ADIT (INV.) UNIT V (2) NEW DELHI RECORDED THE STATEMENT OF SHRI BALWANT SINGH UNDER SECTION 131 OF THE INCOME-TAX ACT, 1961 ON 17 .9.2009. THE RELEVANT PORTION OF HIS STATEMENT IS REPRODUCED AS UNDER: - 'Q1 DURING THE COURSE OF SEARCH AND SEIZURE OPERATION O N THE RAMPRASTHA GROUP ON 30.7.2009, YOU, ON BEHALF O F THE VARIOUS COMPANIES AND INDIVIDUALS SURRENDERED RS. 5 2 CRORE UNDER VARIOUS HEADS. PLEASE AGAIN EXPLAIN THE SAME? A1 AS I CORRECTLY REMEMBER, THE TOTAL SURRENDER AMOUNT WAS AROUND RS. 52 CRORES. I AM NOT REMEMBERING EXACTLY VARIOUS HEADS AND MODE OF SURRENDER FOR VARIOUS, GROUP COMP ANIES AND DIRECTORS. HOWEVER, THE DETAILS ARE FULLY AVAIL ABLE IN MY STATEMENT RECORDED ON THE DAY OF SEARCH. Q2 HOW MUCH TAX YOU HAVE PAID ON THE SURRENDERED AMOUNT? HOW DO YOU INTEND TO STRUCTURE THE FUTURE TAX PAYMENTS? I.T.A. 3238, 3239, 3240, 3241/DEL/2013 ASSESSMENT YEARS: 20009-10,2010-11 9 A2 THE GROUP HAS ALREADY PAID RS. 1 CRORE AND THE BALANCE AMOUNT PAYABLE IN SEPTEMBER, 2009 AMOUNTING TO RS. 2 CRORE WILL BE PAID BY 30 TH SEPTEMBER, 2009. THE REMAINING TAX ON THE ADDITIONAL INCOME SURRENDERED OF RS.52 CRORE, WILL BE PAID ON DUE DATES AS PER LAW A ND AS COMMITTED EARLIER. Q3 MORE YOU ANYTHING ELSE TO SAY? A3 NO THANKS. I HAVE READ ABOVE OVER HAD (SIC.) OVER ABOVE SAID STATEMENT AND FOUND IT CORRECTLY RECORDED. I HAVE GIVEN THIS STATEMENT WITHOUT ANY FEAR, THREAT, PRESSURE O R COERCION. 6.3 DURING POST SEARCH INVESTIGATIONS, WHEN THE A SSESSEES WERE ASKED TO EXPLAIN THE ENTRIES APPEARING IN VARIOUS S EIZED DOCUMENTS, THE AR OF THE ASSESSEE VIDE HIS LETTERS DATED 30.10 .2009, INTER ALIA, SUBMITTED AS UNDER:- WITHOUT PREJUDICE TO THE ABOVE, IT IS FURTHER SUBM ITTED THAT THERE IS A TOTAL SURRENDER OF RS.52 CRORES IN VARIO US ENTITIES IN TERMS OF STATEMENT OF SHRI BALWANT SINGH U/S 132(4) OF THE ACT AT THE TIME OF SEARCH AND THE SURRENDER WAS MADE BY THE GROUP WITHOUT PINPOINTING ANY DOCUMENTS SEIZED BY THE SEA RCH PARTY AND THE SAME WAS IN THE TOTALITY OF THE FACTS AND C IRCUMSTANCES OF THE CASE AS CONVEYED TO SHRI BALWANT SINGH DURIN G THE I.T.A. 3238, 3239, 3240, 3241/DEL/2013 ASSESSMENT YEARS: 20009-10,2010-11 10 COURSE OF SEARCH AND THEREFORE, EVEN THOUGH, THE CO NTENTS OF THE DOCUMENTS REFERRED TO US, NOT BELONGING TO THE GROU P BUT OTHERWISE CANNOT BE CONSIDERED SEPARATELY FROM THE SURRENDER OF AMOUNT OF RS.52 CRORE WHICH WAS LARGELY ON ACCOU NT OF CERTAIN INVESTMENTS/EXPENDITURE/WORK IN PROGRESS WH ICH IS OUTFLOW OF INCOME AND AS SUCH, WITHOUT ADMITTING TH E CONTENTS OF THE DOCUMENTS REFERRED TO US, CANNOT BE READ IN ISOLATION AND CAN BE TREATED AS DIFFERENT UNDISCLOSED RECEIPTS LI ABLE FOR TAX SEPARATELY DUE TO THE SIMPLE LOGIC THAT EVERY UNDIS CLOSED EXPENDITURE, IF ANY, MUST CORRESPOND WITH UNDISCLOS ED RECEIPTS. THEREFORE, UNDISCLOSED EXPENDITURE ALREADY OFFERED FOR TAX SHALL TAKE CARE OF THE AMOUNT OF UNDISCLOSED RECEIPTS, IF ANY, EMANATING FROM THE DOCUMENTS SEIZED FROM THE RESIDENCE OF THE DIRECTORS/OFFICES OF VARIOUS GROUP COMPANIES.' AGAIN, THE AUTHORISED REPRESENTATIVE OF THIS ASSESS EE VIDE LETTER DATED 13.11.2009 FILED BEFORE THE INVESTIGATION WING, SUB MITTED, INTER-ALIA, AS UNDER: THIS IS ALSO AGAIN EMPHASIZED, IN CONTINUATION OF STATEMENT GIVEN BY CH. BALWANT SINGH DURING THE COURSE OF SEARCH THAT SURRENDER OF INCOME MADE BY HIM IS SUBJECT TO THE CONDITION THAT NO PENALTY OR ANY- OTHER ADVERSE PROCEEDINGS SHALL BE INITIATED AGAINST ANY OF THE GROUP COMPANIES AND THEIR DIRECTORS BY THE INCOME-TAX DEPARTMENT. THE SURRENDER OF INCOME MADE BY HIM IS CONTINGENT TO THE SAID CONDITION. THE AFORESAID CONDITION WAS ALS O I.T.A. 3238, 3239, 3240, 3241/DEL/2013 ASSESSMENT YEARS: 20009-10,2010-11 11 ASSERTED BY HIM BEFORE THE AUTHORISED OFFICER.' 6.4 IN RESPONSE, THE ASSESSEE WAS INFORMED VIDE INVESTI GATION WING'S LETTER DATED 25.11.2009 AS UNDER: 'PLEASE REFER TO THE LETTER OF YOUR AUTHORISED REPRESENTATIVE RAJESH JAIN & ASSOCIATES DATED 30 TH OCTOBER,2009 ON THE ABOVE CITED SUBJECT. IT HAS BEE N STATED IN THE LETTER THAT 'WITHOUT PREJUDICE TO THE ABOVE, IT IS FURTHER SUBMITTED THAT THERE IS A TOTA L SURRENDER OF RS. 52 CRORES IN VARIOUS ENTITIES IN TERMS OF STATEMENT OF SHRI BALWANT SINGH U/S 132(4) OF THE ACT AT THE TIME OF SEARCH AND THE SURRENDER WAS MADE BY THE GROUP WITHOUT PINPOINTING ANY DOCUMENTS SEIZED BY THE SEARCH PARTY.IN THIS CONNECTION IT IS STATED THAT AT THE VARIOUS RESIDENTIAL AND BUSINESS PREMISES OF THE RAMPRASTHA GROUP A NUMBER OF DOCUMENTS HAD BEEN SEIZED/IMPOUNDED WHICH WERE CONFRONTED TO THE DIRECTORS AND OTHER CONCERNED PERSONS OF GROUP COMPANIES, INCLUDING THE CHAIRMAN OF THE GROUP, SHRI BALWANT SINGH. IN THE LIGHT OF THIS FACT IT IS INCORRECT TO SAY THAT THE SURRENDER WAS MADE WITHOUT PINPOINTING ANY DOCUMENTS.' SINCE IN THE RETURNS OF INCOME FILED, ALL THE THREE ASSESSEES DID NOT DECLARE THE SURRENDERED AMOUNT AS PER THE STATE MENT OF SHRI BALWANT SINGH, SHOW CAUSE NOTICES WERE ISSUED TO THE I.T.A. 3238, 3239, 3240, 3241/DEL/2013 ASSESSMENT YEARS: 20009-10,2010-11 12 THREE ASSESSEES AND IT WAS POINTED OUT THAT THAT IN THE RETURN FILED BY IT IN THE ADDITIONAL INCOME AS SURRENDERED DURING THE COURSE OF SEARCH U/S 132(4) OF THE ACT, HAD NOT BEE N DECLARED. 7. ALL THE THREE ASSESSEES FILED VARIOUS OBJECTIO NS AGAINST RECORDING OF STATEMENT AND THE SURRENDER MADE BY TH E SHRI BALWANT SINGH. THE MAIN OBJECTIONS WERE THAT THE S TATEMENT OF SHRI BALWANT SINGH RECORDED U/S 132(4) OF THE ACT WAS NOT VOLUNTARY RECORDED STATEMENT AS IT WAS RECORDED UND ER COERCION, THREAT AND COMPULSION AND HE WAS COMPELLE D TO SIGN THE SAID STATEMENT AS BEING VOLUNTARY. ANOTHER OBJE CTION WAS THAT SHRI BALWANT SINGH HAD MADE THE SURRENDER ON B EHALF OF 10 PERSONS (WHICH WERE DIFFERENT ENTITIES) WHEREAS ONE PERSON COULD NOT MAKE SURRENDER ON BEHALF OF THE OTHER AND FASTEN THE LATTER WITH THE LIABILITY. THE THREE ASSESSEES ALSO OBJECTED BY SUBMITTING THAT THESE TYPES OF STATEMENTS WERE USUA LLY PREPARED IN ALL SEARCH ACTIONS BY INVESTIGATION WIN G TO SHOW THEIR OUTPUT ALTHOUGH THE CBDT DID NOT APPRECIATE S UCH SURRENDERS. I.T.A. 3238, 3239, 3240, 3241/DEL/2013 ASSESSMENT YEARS: 20009-10,2010-11 13 7.1 IN THREE CASES VIZ. I.T.A. NOS. 3238, 3239 AN D 3240, THE ASSESSING OFFICER PROCEEDED TO CONTEND THAT THE SAI D STATEMENT OF SHRI BALWANT SINGH WAS VOLUNTARY AND WAS GIVEN WITH OUT ANY FORCE, PRESSURE OR COERCION. HE ALSO NOTED THAT SH RI BALWANT SINGH HAD REITERATED HIS STATEMENT DURING THE POST SEARCH INQUIRY. THE ASSESSING OFFICER ALSO NOTED THAT AT THE END OF THE STATEMENT, SHRI BALWANT SINGH HAD RECORDED THAT THE STATEMENT WAS VOLUNTARY, WITHOUT ANY THREAT, FORCE OR COERCIO N. REGARDING EVIDENCE IN SUPPORT OF THE SURRENDER, THE ASSESSING OFFICER MENTIONED THAT DURING THE COURSE OF SEARCH AS PER A O-4 (ANNEXURE 5, PAGES 1 TO 15) WERE LETTER HEADS OF DI FFERENT CONTRACTORS DULY SIGNED WHICH COULD BE USED TO WRIT E OUT BILLS TO SUITE THE REQUIREMENTS OF THE ASSESSEE. THE ASSESS ING OFFICER ALSO CONTENDED THAT THE SURRENDER WAS MADE BY SHRI BALWANT SINGH AFTER THE PERUSAL OF THE SEIZED DOCUMENTS. 7.2 ALL THE THREE ASSESSEES IN THEIR APPEALS BEFO RE THE FIRST APPELLATE AUTHORITY CHALLENGED THE ADDITIONS MADE O N THE BASIS OF STATEMENT OF SHRI BALWANT SINGH. THE LD. CIT(A) IN THE APPEALS OF ALL THE THREE ASSESSEES WHILE ALLOWING THEIR APPEAL S HAS GIVEN ALMOST A SIMILAR FINDING THAT NEITHER THE INVESTIGA TION WING NOR THE ASSESSING OFFICER HAD CORRELATED ANY SEIZED DOC UMENT WITH I.T.A. 3238, 3239, 3240, 3241/DEL/2013 ASSESSMENT YEARS: 20009-10,2010-11 14 THE SURRENDER OF STOCK OR WORK-IN-PROGRESS. THE LD . CIT (A) WAS OF THE VIEW THAT SHRI BALWANT SINGH WAS NEVER CONFR ONTED WITH THE SEIZED DOCUMENTS SO AS TO ESTABLISH THEIR INCRI MINATING NATURE. AS FAR AS THE BLANK LETTER HEADS WERE CONC ERNED, THE LD. CIT (A) WAS OF THE VIEW THAT SUCH BLANK LETTER HEAD S WILL IN NO WAY PROVE UNACCOUNTED PAYMENT TO THE CONTRACTORS SPECIA LLY SINCE THE VARIOUS CONTRACTORS OF THE RAMPRASTHA GROUP HAD BEE N SURVEYED SIMULTANEOUSLY AND NO DOCUMENT OF UNRECORDED RECEIP TS WERE FOUND AND NO ADDITION WAS MADE IN THE HAND OF THE C ONTRACTORS ON THIS ISSUE WHEREAS THE ENTIRE CONSTRUCTION WAS D ONE THROUGH THE CONTRACTORS. THE LD. CIT (A), ACCORDINGLY, HELD THAT THE ENTIRE ADDITION WAS MADE ONLY ON THE BASIS OF THE STATEMEN T OF SHRI BALWANT SINGH. THE LD. CIT (A) ALSO NOTED THAT IN THE POST-SEARCH PROCEEDINGS, THE ASSESSEES HAD INFORMED THE INVESTI GATION WING TWICE THAT THE SURRENDER ON ACCOUNT OF WORK-IN-PROG RESS WAS MADE WITHOUT PIN-POINTING ANY SEIZED MATERIAL. THE LD. CIT (A) WAS ALSO OF THE VIEW THAT THE ASSESSING OFFICER DID NOT TAKE ANY ACTION EVEN AFTER THE STATEMENT WAS, IN EFFECT, RET RACTED. THE LD. CIT (A) ALSO HELD THAT THE SURRENDER WAS ON MISTAKE N FACTS BECAUSE AS PER THE STATEMENT OF SHRI BALWANT SINGH, CASH PAYMENTS FOR ACQUIRING LAND WERE DEBITED IN THE BOO KS OF ACCOUNT I.T.A. 3238, 3239, 3240, 3241/DEL/2013 ASSESSMENT YEARS: 20009-10,2010-11 15 WHEREAS AS PER RECORDS, RAMPRASTHA GROUP OF COMPANI ES HAD MADE PAYMENTS ONLY THROUGH CHEQUES TO DHARAM RAJ CONSTRUCTION AND INFRASTRUCTURE (P) LTD. WHO IN TUR N HAS MADE CASH PAYMENTS TO THE SELLERS OF LAND. THE LD. CIT (A), IN THE RESULT, PROCEEDED TO HOLD THAT ADDITIONS BASED ON R ETRACTED STATEMENT ALONE AND THAT TOO BASED ON MISTAKEN FACT S COULD NOT BE SUSTAINED. HENCE, THE APPEALS OF THE THREE ASSE SSEES VIZ. RAMPRASTHA BUILDERS PVT. LTD., RAMPRASTHA GREENS PV T. LTD. AND RAMPRASTHA PROMOTERS & BUILDERS (P) LTD. FOR ASSESS MENT YEAR 2010-11 WERE ALLOWED BY THE LD. CIT (A) THROUGH A SOMEWHAT SIMILARLY WORDED ORDER ON A SIMILAR SET OF FACTS. 8. NOW, THE DEPARTMENT IS BEFORE US IN APPEAL AND I S CONTESTING THE DELETIONS MADE BY THE LD. CIT (A). L D. D.R. SUBMITTED THAT A STATEMENT RECORDED ON OATH IS PRES UMED TO BE CARRYING FORCE OF TRUTH. THE STATEMENT RECORDED ON OATH CANNOT BE DISMISSED LIGHTLY. THE STATEMENT MADE ON OATH BINDS THE MAKER OF THE STATEMENT AND IN THE ABSENCE OF ANY DENIAL OR A DEQUATE EXPLANATION THEREOF, ADMISSION IS ALMOST CONCLUSIVE REGARDING THE FACTS CONTAINED THEREIN. ALTHOUGH THERE IS NOTHING SPECIFIC IN THE INCOME TAX ACT OR INDIAN EVIDENCE ACT TO MAKE ADMIS SION AS CONCLUSIVE PROOF OR ALWAYS BINDING ON THE MAKER, YE T IT IS SETTLED I.T.A. 3238, 3239, 3240, 3241/DEL/2013 ASSESSMENT YEARS: 20009-10,2010-11 16 POSITION BY WAY OF JUDICIAL PRONOUNCEMENTS THAT IN THE ABSENCE OF ANY REBUTTAL OR RETRACTION, THE EARLIER STATED FACT S WILL BE CONCLUSIVE AND CAN BE RELIED UPON. THE LD. DR SUBMI TTED THAT SPECIFIC PROVISIONS OF THE INCOME TAX ACT ITSELF AS CONTAINED UNDER SECTION 132(4), 133A (5) ETC. PROVIDE THAT A STATEM ENT RECORDED IN THE INCOME TAX PROCEEDINGS HAS AN EVIDENTIARY VALUE . THE HONBLE SUPREME COURT IN THE CASE OF AVADH KISHORE DAS VS. RAM GOPAL AIR 1979 PAGE 61 HAS HELD THAT THE ADMISSION IS BES T EVIDENCE THAT THE OPPOSITE PARTY CAN RELY UPON. HE SUBMITTED THAT ALTHOUGH IT IS NOT CONCLUSIVE PROOF OF THE FACTS AD MITTED, BUT IT DOES RAISE AN ESTOPPEL AND SHIFTS THE BURDEN OF PRO OF ON THE PERSON MAKING THE STATEMENT. HE SUBMITTED THAT THE HONBLE SUPREME COURT HAS FURTHER HELD THAT UNLESS SHOWN OR EXPLAINED TO BE WRONG, A STATEMENT IS EFFICACIOUS PROOF OF TH E FACTS ADMITTED. ON THE ISSUE OF RETRACTION OF STATEMENT RECORDED U/ S 132(4), THE COURTS HAVE TAKEN THE VIEW THAT STATEMENT U/S 132(4 ) OF THE INCOME TAX ACT IS A PIECE OF EVIDENCE AGAINST THE A SSESSEE. HOWEVER, THE SAME IS NOT CONCLUSIVE AND IF THE ASSE SSEE WANTS TO RETRACT FROM SUCH STATEMENT/ADMISSION, THE BURDEN L IES ON HIM TO PROVE THAT THE STATEMENT WAS OBTAINED UNDER COERCIO N, THREAT DURESS, UNDUE INFLUENCE, UNDER MISTAKEN BELIEF OF F ACTS AND LAW. I.T.A. 3238, 3239, 3240, 3241/DEL/2013 ASSESSMENT YEARS: 20009-10,2010-11 17 THE LD. DR EMPHASIZED THAT THE COURTS HAVE TAKEN TH E VIEW THAT THE RETRACTION IS TO BE SUPPORTED BY THE PERSON MAK ING RETRACTION WITH SUPPORTIVE EVIDENCE/MATERIAL AND HE HAS TO EST ABLISH THAT THE STATEMENT WAS GIVEN UNDER SUCH MISTAKEN BELIEF EITHER OF FACT OR OF LAW. ANY BALD RETRACTION IS NOT PERMISSIBLE. A PERSON RETRACTING FROM THE STATEMENT HAS TO ESTABLISH THAT THE STATEMENT WAS NOT CORRECT IN VIEW OF THE FACTS OR MATERIAL/EV IDENCE ON RECORD OR SUCH OTHER FACTS OR MATERIAL/EVIDENCE WHICH CAME TO LIGHT AT A LATER STAGE. THUS A FAILURE ON THE PART OF THE MAKE R OF THE STATEMENT TO PROVE THAT THE FACTS EARLIER STATED IN THE EARLIER STATEMENTS WERE WRONG IS SUFFICIENT TO CONCLUDE THE MATTER. THE LD. DR SUBMITTED THAT FOR ANY RETRACTION TO BE SUCC ESSFUL IN THE EYES OF LAW, THE MAKER OF THE STATEMENT HAS TO SHO W AS TO HOW THE STATEMENT RECORDED EARLIER DOES NOT STATE THE T RUE FACTS OR THAT THERE WAS COERCION, UNDUE INFLUENCE OR THREAT WHILE RECORDING HIS EARLIER STATEMENT. THE LD. DR FURTHER SUBMITTED THA T THE COURTS HAVE ACCORDED IMPORTANCE TO THE STATEMENT RECORDED U/S 132(4) BY OBSERVING THAT SURRENDER MADE IN THE COURSE OF S EARCH BY WAY OF A STATEMENT U/S 132(4) HAS GOT EVIDENTIARY VALUE AND IT COULD NOT BE USED TO SIDETRACK THE ATTENTION OF THE DEPAR TMENT FROM MAKING DEEPER INVESTIGATION IN THE MATTER. THE LD. DR SUBMITTED I.T.A. 3238, 3239, 3240, 3241/DEL/2013 ASSESSMENT YEARS: 20009-10,2010-11 18 THAT IN THE CASE OF RABINDRA D. TRIVEDI VS. CIT 200 8 215 CTR 313 (RAJ.), THE HONBLE RAJASTHAN HIGH COURT UPHELD THE ADDITION OF RS. 3 LACS REPRESENTING DISCREPANCIES IN THE STOCK ADMITTED BY THE ASSESSEE IN THE STATEMENT U/S 132 (4) BY HOLDING TH AT DURING THE SEARCH THE ASSESSEE HAD ACCEPTED THE DISCREPANCIES AND HAD MADE DISCLOSURE BY WAY OF CALCULATED ATTEMPT TO SID ETRACK THE ATTENTION OF THE SEARCH PARTY AND, THEREFORE, SIDET RACK THE INVESTIGATIONS OF THE DISCREPANCIES. BUT ON A LATER DATE, THE ASSESSEE DID NOT DISCLOSE THE ADMITTED INCOME IN TH E RETURN OF INCOME. IN THESE CIRCUMSTANCES, THE RETRACTION WAS NOT ALLOWED AND THE ADDITION-WAS UPHELD. RELIANCE WAS ALSO PLAC ED ON THE FOLLOWING DECISIONS - (A) KANTILAL C.SHAH VS ACIT CIRCLE-3, AHMEDABAD (ITAT AHD. BENCH), (B) NARAYAN BHAGWANT RAO GOSAVI BALAJIWALE VS GOPAL VINAYAK GOSAVI & ORS. ( AIR 1960 100 SC), (C) T.S. KAMARASAMY VS ACIT (65 ITD 189) (ITAT MAD.), (D) RAKESH MAHAJAN VS. CIT 214 CTR 218 (P&H) 9. THE LD. DR SUBMITTED THAT THE ASSESSEES HAVE C LAIMED THAT THE STATEMENT OF SH. BALWANT SINGH U/S 132(4) OF TH E INCOME TAX ACT WAS NOT VOLUNTARY AND WAS RECORDED UNDER COERCION, THREAT AND COMPULSION. HE SUBMITTED THAT THIS ALLEGATION I S ONLY AN AFTERTHOUGHT AND AN ATTEMPT TO WRIGGLE OUT OF THE SITUATION. IT IS I.T.A. 3238, 3239, 3240, 3241/DEL/2013 ASSESSMENT YEARS: 20009-10,2010-11 19 ALSO CONTRARY TO THE MATERIAL ON RECORD AND IS NOT BACKED BY ANY DOCUMENTARY EVIDENCE. APART FROM THE STATEMENT OF SH. BALWANT SINGH RECORDED ON 31.07.2009 ADMITTING ADDITIONAL INCOME OF RS. 52 CRORES, SH. BALWANT SINGH REITERATED THE TOTAL SURRENDER OF RS. 52 CRORES IN HIS STATEMENT RECORDED BY THE INVESTIGATION WING ON 17.09.2011. THUS THE DISCLOSURE OF ADDITIONAL INCOME WAS NOT ONLY MADE DURING THE SEARCH BUT THE SAME WAS REITER ATED DURING THE COURSE OF POST SEARCH INVESTIGATION. THEREFORE, IT IS INCORRECT TO SAY THAT THE STATEMENT OF SH. BALWANT RECORDED ON 31.07.2009 WAS UNDER COERCION, THREAT AND COMPULSION. THE LD. DR SUBMITTED THAT IN PARA 6 OF THE PANCHNAMA AT THE RESIDENCE OF SH. BALWANT SINGH, IT HAS CLEARLY BEEN MENTIONED THAT NO PRESSURE WAS PUT ON THE VARIOUS PERSONS WHOSE STATEMENTS WERE RECORDED DURING THE SEARCH. THE P ANCHNAMA HAS DULY BEEN SIGNED BY SHRI BALWANT SINGH, THE AUTHORISED OFFICERS AND TWO INDEPENDENT WITNESSES. A PERUSAL OF THE STATEMENT O F SH. BALWANT SINGH RECORDED U/S 132(4) ON 31.07.2009 SHO WS THAT HE HIMSELF HAS RECORDED AT THE END OF THE STATEMENT TH AT THE STATEMENT HAS BEEN GIVEN BY HIM VOLUNTARILY WITHOUT ANY FEAR, THREAT, PRESSURE OR COERCION. FURTHER, THE RETRACTI ON OF THE STATEMENT HAS NOT BEEN SUPPORTED BY ANY EVIDENCE. THE I.T.A. 3238, 3239, 3240, 3241/DEL/2013 ASSESSMENT YEARS: 20009-10,2010-11 20 ASSESSEES HAVE NOT DEMONSTRATED BY PLACING EVIDENCE ON RECORD THAT THE STATEMENT RECORDED EARLIER WAS INCORRECT. 10. THE LD. DR FURTHER SUBMITTED THAT AS REGARDS THE ASSESSEES CONTENTION THAT SHRI BALWANT SINGH HAD MADE THE SUR RENDER ON BEHALF OF 10 PERSONS FOR WHICH HE WAS NOT AUTHORIZE D, THE SAME IS NOT RELEVANT BECAUSE SH. BALWANT SINGH IS ON THE BO ARD OF DIRECTORS OF THESE COMPANIES AND, THEREFORE, HE WAS FULLY COMPETENT TO MAKE A DECLARATION OF ADDITIONAL INCOM E IN THE HANDS OF ASSESSEE COMPANIES. THE LD. DR ALSO SUBMIT TED THAT ALTHOUGH THERE IS NO CONCEPT OF ON-SPOT ASSESSMENT AT THE TIME OF SEARCH BUT THE SURRENDER OF ADDITIONAL INCOME WAS M ADE BY SH. BALWANT SINGH AFTER PROPER THOUGHT AND AFTER HE WAS CONFRONTED WITH THE VARIOUS BOOKS OF ACCOUNTS/DOCUMENTS SEIZED DURING THE COURSE OF SEARCH. THEREFORE, IT CANNOT BE SAID THAT THE DISCLOSURE WAS AT THE SPUR OF THE MOMENT AND THAT NO THINKING HAD GONE INTO IT BEFORE MAKING DISCLOSURE OF ADDITIONAL INCO ME. 11. IN RESPONSE, THE LD. AR SUBMITTED THAT IT IS ON THE BASIS OF SEIZED DOCUMENTS THAT SH. BALWANT SINGH WAS MADE TO BELIEV E THAT THERE WERE HUGE DISCREPANCIES AND THAT HE HAD NO OPTION BUT TO SURR ENDER THE INCOME. ON THIS BASIS, MR. BALWANT SINGH MADE THE SURRENDER OF THE SUM OF RS. 52 CRORES. POST SEARCH, ON VERIFICATION OF FACTS AND S EIZED DOCUMENTS, THE I.T.A. 3238, 3239, 3240, 3241/DEL/2013 ASSESSMENT YEARS: 20009-10,2010-11 21 ASSESSEES REALIZED THAT THERE IS NO DISCREPANCY AND ALL THE TRANSACTIONS STATED IN THE SEIZED DOCUMENTS WERE RECORDED IN THE BOOKS OF ACCOUNTS AND HENCE WHILE FILING THE RETURNS, INCOME WAS COMPUTED ON TH E BASIS OF BOOKS OF ACCOUNTS. THE LD. AR SUBMITTED THAT THE AO, DURING THE COURSE OF ASSESSMENT, RAISED THE ISSUE OF SURRENDER. DETAILED REPLIES DATED 5.12.2011 WERE FILED. THE AO IGNORING THE FACTS AND THE REPLI ES AS GIVEN BY THE ASSESSEES MADE THE ADDITIONS ON THE GROUND THAT SURRENDER IS VALID PIECE OF EVIDENCE. THE LD. AR SUBMITTED THAT THE ORDERS PASSED BY THE CIT (APPEALS) ARE REASONED ORDERS AND THE ADDITIONS MADE BY THE AO HA VE BEEN RIGHTLY DELETED. THE LD. AR EMPHASIZED THAT THE AO HAS HEAVILY RELIE D UPON THE STATEMENT OF SH. BALWANT SINGH RECORDED ON THE DATE OF SEARCH WI THOUT ANALYSING THE STATEMENT AND WITHOUT APPRECIATING THE FACTS STATED THEREIN. HE DREW OUR ATTENTION TO THE AOS ORDER WHEREIN IN QUESTION NO. 1 OF THE STATEMENT QUOTED ON PG. 2 PARA 3 OF THE AOS ORDER, SHRI BALWANT SINGH WAS SHOWN THE SEIZED DOCUMENTS A-2 TO A-27. THE LD. AR POINTED OU T THAT IN RESPONSE THERETO SHRI BALWANT SINGH HAD CATEGORICAL LY STATED AS UNDER: THESE PAGES AND ANNEXURE RELATE TO FINANCIALS OF V ARIOUS GROUP COMPANIES OF RAMPRASTHA GROUP. THE PEN DRIVE AND THE HARD DISKS MENTIONED AS ANNEXURE CONTAIN DETAILS OF THE BUSINESS OF RAMPRASTHA GROUP. THE DETAILED EXPLANAT ION OF THESE ANNEXURES OF LOOSE PAGES/HARD DISK/PEN DRIVE WOULD BE SUBMITTED BY ME LATER, MOST OF THE TRANSACTIONS MENTIONED IN THESE ANNEXURES ARE REFLECTED IN THE BOOKS OF AC COUNTS OF I.T.A. 3238, 3239, 3240, 3241/DEL/2013 ASSESSMENT YEARS: 20009-10,2010-11 22 VARIOUS COMPANIES OF RAMPRASTHA GROUP. HOWEVER, AFT ER PRIME FACIE GOING THROUGH THESE DOCUMENTS, I ADMIT THAT SOME OF THE TRANSACTIONS ARE NOT REFLECTED AND RECORDED IN THE BOOKS OF ACCOUNTS OF VARIOUS COMPANIES OF RAMPRASTH A GROUP. ON ACCOUNT OF NON RECORDING/NON- REFLECTION OF THESE TRANSACTIONS, I HEREBY VOLUNTARILY ADMIT FOLLOWING ADDITIONAL INCOME FOR TAXATION. 11.1 THE LD. AR SUBMITTED THAT THE ABOVE ANSWER C LEARLY SHOWS THAT DETAILED EXPLANATION WAS YET TO BE SUBMITTED. FURTHER THE REPLY WAS PRELIMINARY REPLY AND NOT A CONCLUSIVE RE PLY. THE LD. AR ALSO SUBMITTED THAT IF, LATER ON, THE ASSESSEES AFTER GOING THROUGH THE SEIZED DOCUMENTS AND BOOKS OF ACCOUNTS FOUND THAT THE TRANSACTIONS WERE REFLECTED IN THE BOOKS OF ACC OUNTS THEN THE ASSESSEES WERE WELL WITHIN THEIR RIGHTS TO CORRECT THE AMOUNT. HE FURTHER SUBMITTED THAT THE LAW IS TO STATE THE C ORRECT INCOME. THE LAW IS NOT THAT INCOME TO BE DECLARED IN THE RE TURN SHOULD BE HIGHER OF THE TWO I.E., INCOME STATED IN THE STATEM ENT AND INCOME AS PER THE SEIZED DOCUMENTS. THE LD. AR ALSO SUBMIT TED THAT THE AO HAS REFERRED TO THE STATEMENTS DATED 17.9.2009 T O SUPPORT HIS CASE. HOWEVER, THIS STATEMENT IS IN THE CONTINUATIO N OF THE STATEMENT DATED 31.7.2009 AND IS A SIMPLY REITERATI ON. THE LD. AR SUBMITTED THAT THE ASSESSEES CAN COMPUTE THE COR RECT INCOME I.T.A. 3238, 3239, 3240, 3241/DEL/2013 ASSESSMENT YEARS: 20009-10,2010-11 23 ONLY AFTER GETTING SEIZED DOCUMENTS AND VERIFICATIO N THEREOF WITH THE BOOKS OF ACCOUNTS. HE FURTHER SUBMITTED THAT TH E AO HAS REFERRED TO LETTERS DATED 30.10.2009 WHEREBY IT HAS BEEN CATEGORICALLY STATED WITHOUT PREJUDICE TO THE ABOVE . THE USE OF THESE WORDS CLEARLY SHOWS THAT THE SURRENDER IS WIT HOUT PREJUDICE TO THE EXPLANATION REGARDING THE SEIZED DOCUMENTS. THE LD. AR SUBMITTED THAT IT HAS ALSO BEEN STATED THAT SURREND ER WAS MADE WITHOUT PINPOINTING ANY ERROR IN THE SEIZED DOCUMEN T. THE LD. AR FURTHER POINTED OUT THAT THEREAFTER DURING THE COUR SE OF ASSESSMENT PROCEEDINGS A DETAILED EXPLANATION VIDE LETTER DATED 05.12.2011 WAS FILED. HOWEVER, THE AO INSTEAD OF DE ALING WITH THE ISSUE TRIED TO MEET THE OBJECTIONS RAISED BY REFERR ING TO CASE LAWS. 11.2 THE LD. AR ALSO SUBMITTED THAT THE SURRENDER WAS MADE ON THE BASIS OF SEIZED DOCUMENTS AS SHRI BALWANT SINGH WAS MADE TO BELIEVE THAT THE TRANSACTION WERE NOT REFLECTED AND RECORDED IN THE BOOKS OF ACCOUNTS. HOWEVER, LATER ON, IT WAS FO UND THAT THE TRANSACTIONS WERE REFLECTED AND RECORDED. THE LD. A R FURTHER POINTED OUT THAT IF THE AO WAS DISPUTING THESE EXPL ANATIONS THEN THE AO HAD TO REFER TO THE SEIZED DOCUMENTS. THESE WERE NOT DOCUMENTS WHICH WERE FOUND AND RELEASED TO THE ASSE SSEE SO AS TO RAISE A DOUBT ABOUT THE AUTHENTICITY OF SUCH DOC UMENTS. THESE I.T.A. 3238, 3239, 3240, 3241/DEL/2013 ASSESSMENT YEARS: 20009-10,2010-11 24 WERE THE DOCUMENTS FOUND AND SEIZED AND WERE WITH T HE AO AND THE AO COULD HAVE EASILY CROSS VERIFIED THESE DOCUM ENTS WITH THE BOOKS OF ACCOUNTS OF THE ASSESSEES TO ENSURE WHETHE R THE SAME WERE REFLECTED AND RECORDED OR NOT IN THE BOOKS OF ACCOUNTS. HE FURTHER SUBMITTED THAT THE AO DURING THE COURSE OF ASSESSMENT HAD SOUGHT EXPLANATIONS TO SEIZED DOCUMENTS AND EAC H OF THE SEIZED DOCUMENTS WAS DULY EXPLAINED AND IT IS NOT TH E CASE OF THE AO THAT THE ASSESSEES HAD FAILED TO EXPLAIN THE SEI ZED DOCUMENTS. THUS IT IS EVIDENT THAT THE AO HAD MADE THE ADDITIO NS MERELY ON THE BASIS OF THE STATEMENT. THE LD. AR ALSO SUBMITT ED THAT THE JUDGMENTS RELIED ON BY THE DEPARTMENT ARE NOT APPLI CABLE TO THE FACTS OF THE CASE AND DISTINGUISHABLE. THE LD. AR ALSO PLACED RELIANCE ON THE DIRECTION GIVEN BY THE CBDT VIDE IN STRUCTION LETTER NO. 286/2/2003-IT (INV) DATED 10.3.2003 ON CONFESSION ON ADDITIONAL INCOME DURING THE COURSE OF SEARCH AND S EIZURE AND SURVEY OPERATION. RELIANCE WAS ALSO PLACED ON INSTR UCTION NO. F. NO. 286/57/2002-IT), DT. 3RD JULY, 2002. THE LD. AR SUBMITTED THAT IN THE PRESENT CASES, THE AO HAS NOT BEEN ABLE TO BRING ANY MATERIAL OR EVIDENCE TO SUBSTANTIATE THE ADDITIONS. THE AO HAS IGNORED THE FACT THAT AN ADDITION CAN BE MADE ONLY WHEN THERE IS MATERIAL. IN CASE THE ADDITION IS TO BE BASED SOLEL Y ON THE I.T.A. 3238, 3239, 3240, 3241/DEL/2013 ASSESSMENT YEARS: 20009-10,2010-11 25 STATEMENT THEN THERE HAS TO BE CORROBORATION. IN TH E ABSENCE OF ANY CORROBORATION ADDITION CANNOT BE MADE. 12. AS FAR AS THE ISSUE OF DISALLOWANCE OF PROPORTI ONATE INTEREST IS CONCERNED IN I.T.A. NOS. 3240 & 3241 IN THE CASE OF RAMPRASTHA PROMOTERS & DEVELOPERS (P) LTD., THE LD. DR SUBMITTED THAT DU RING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAD NOTICED THAT THE ASSESSEE COMPANY HAD RAISED INTEREST BEARING LOANS IN THE FORM OF CO MPULSORY CONVERTIBLE DEBENTURES (CCDS). THE ASSESSEE HAD DEBITED INTER EST TO PROFIT/LOSS ACCOUNT IN RESPECT OF LOANS TAKEN AND CCDS. HOWEVER, THE A SSESSING OFFICER ALSO NOTICED THAT THE ASSESSEE HAD GIVEN INTEREST FREE L OANS/ADVANCES TO GROUP COMPANIES. LD. DR FURTHER SUBMITTED THAT THE ASS ESSEE COMPANY HAD FAILED TO DISCHARGE THE ONUS TO PROVE THAT THE FUND BORROW ED, ON WHICH THE INTEREST WAS PAID, WAS USED FOR THE PURPOSE OF BUSINESS. HE SUBMITTED THAT THE ASSESSEE HAD FAILED TO BRING ANY EVIDENCE ON RECORD TO PROVE THAT THE ADVANCES GIVEN TO SISTER CONCERNS WERE GIVEN IN FUR THERANCE OF THE BUSINESS OBJECTS OF THE ASSESSEE AND, THEREFORE, THE ASSESSI NG OFFICER HAD RIGHTLY HELD THAT THE INTEREST RELATABLE TO THE AMOUNT ADVANCED TO ITS SISTER CONCERN COULD NOT BE ALLOWED AS A DEDUCTION U/S 36(1)(III) OF THE ACT. LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE LD. CIT (A) HAS W RONGLY DELETED THE DISALLOWANCE AND PRAYED THAT THE ORDER OF THE ASSES SING OFFICER SHOULD BE RESTORED. I.T.A. 3238, 3239, 3240, 3241/DEL/2013 ASSESSMENT YEARS: 20009-10,2010-11 26 12.1 IN RESPONSE THE LD. AR SUBMITTED THAT AS PER S ECTION 36(1)(III) OF THE ACT ANY AMOUNT OF INTEREST PAID I N RESPECT OF CAPITAL BORROWED FOR THE PURPOSE OF BUSINESS AND PR OFESSION HAS TO BE ALLOWED AS DEDUCTION IN COMPUTING INCOME U/S 28 OF THE ACT. HE SUBMITTED THAT THE AO IGNORED THE EXPLANATI ONS GIVEN BY THE ASSESSEE AND WITHOUT ANY JUSTIFICATION CONSIDER ED THE TRANSACTIONS AS NOT FOR THE BUSINESS PURPOSE AND MA DE THE ADDITION IN THE HANDS OF THE ASSESSEE. HE SUBMITTED THAT THE AO DID NOT POINT OUT ANY ADVERSE FINDING IN RESPECT TH E DOCUMENTS PRODUCED BY THE ASSESSEE. HE RELIED ON THE FOLLOWIN G JUDGMENTS: 1. S.A. BUILDERS LTD VS. CIT 268 ITR 1(SC)(2006) , 2. ACIT & OTHERS VERSUS GILLETE DIVERSIFIED OPERATION P LTD & OTHERS 2015(4) TMI 49, 3. MADHAV PRASAD JATIA VS CIT (118 ITR 0200) SC. 13. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITT ED THAT THE LAST ISSUE IN THIS BUNCH OF APPEALS RELATES TO ITA NO. 3241 AND PERTAINS TO THE DISALLOWANCE OF RS.55 LACS PAID IN CASH FOR PAYMENT TOWARDS PURCHASE OF LAND AND DISALLOWED BY THE ASSESSING OFFICER U/S 40A(3) OF THE ACT. LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE MEAN ING OF EXPENDITURE AND CONSTITUTIONAL VALIDITY OF SECTION 40A (3) HAS BEEN DISCUSSED BY THE HON'BLE APEX COURT IN THE CASE OF ATTAR SINGH GURMU KH SINGH VS CIT 191 ITR 667 (SC) WHERE THE HON'BLE APEX COURT HAS HELD THAT ALL OUTGOINGS I.T.A. 3238, 3239, 3240, 3241/DEL/2013 ASSESSMENT YEARS: 20009-10,2010-11 27 INCLUDING PURCHASE FOR STOCK IN TRADE ARE COVERED U /S 40A (3) OF THE ACT. HE SUBMITTED THAT IN VIEW OF THIS JUDGMENT, THE LD. CI T(A) HAS ERRED IN DELETING THE ADDITION AND PRAYED THAT THE ORDER OF THE AO SH OULD BE RESTORED. 13.1 IN RESPONSE THE LD. AR SUBMITTED THAT SECTIO N 40(A)(3) OF THE ACT PROVIDES FOR DISALLOWANCE OF AN EXPENDITURE IN RESPECT OF WHICH PAYMENT IN A SUM EXCEEDING THE SPECIFIED LIMI T IS MADE OTHERWISE THAN BY A CROSSED CHEQUE AND CROSSED BANK DRAFT UNLESS THE CASE FALLS WITHIN THE EXCEPTIONS SPECIFI ED IN RULE 6DD. HE SUBMITTED THAT THE EXCEPTIONS PROVIDED IN RULE 6 DD ARE NOT EXHAUSTIVE AND THEREFORE THE PROVISION OF SECTION 4 0A (3) SHALL NOT BE ATTRACTED IF THE PARTIES ARE IDENTIFIED AND THER E IS NOT MATERIAL ON RECORD TO DOUBT THE GENUINENESS OF THE PAYMENT. HE SUBMITTED THAT THE FIRST PROVISO OF SECTION 40A (3) CLEARLY P ROVIDES THE EXCEPTIONS (AS PRESCRIBED BY THE BOARD IN RULES), B UT THE RULES ARE REQUIRED TO BE FRAMED KEEPING IN VIEW THE LEGIS LATIVE INTENTION AS PRESCRIBED IN THE MAIN SECTION AND IT CLEARLY PR ESCRIBED THAT THE CONSIDERATION OF BUSINESS CONSISTENCY AND OTHER RELEVANT FACTOR ARE REQUIRED TO BE CONSIDERED BEFORE INVOKIN G THE PROVISION OF SECTION 40A (3). HE SUBMITTED THAT THE ASSESSEE HAS NOT CLAIMED ANY EXPENDITURE FOR PURCHASE OF LAND IN THE PROFIT AND LOSS ACCOUNT AND THEREFORE DID NOT REDUCE ITS INCOM E AND AS SUCH I.T.A. 3238, 3239, 3240, 3241/DEL/2013 ASSESSMENT YEARS: 20009-10,2010-11 28 THE PROVISIONS OF SECTION 40A (3) CANNOT BE INVOKED IN A MERE TECHNICAL MANNER. HE SUBMITTED THAT IF THE CONTENTI ON OF THE ASSESSING OFFICER TAKEN AS CORRECT AN ARTIFICIAL IN COME WILL BE ASSESSED. HE FURTHER SUBMITTED THAT OTHERWISE ALSO , THE HONORABLE SUPREME COURT IN ATTAR SINGH GURUMUKH SIN GH VS ITO 191 ITR 667 HAS CLEARLY OBSERVED THAT THE PURPO SE OF SECTION 40A(3) IS TO DISALLOW BOGUS CASH PAYMENT FOR INCREA SING THE EXPENDITURE FOR ARTIFICIALLY REDUCING ASSESSABLE IN COME ONLY BUT NOT TO DISALLOW GENUINE EXPENDITURE THOUGH INCURRED IN CASH DUE TO BUSINESS EXIGENCIES. HE FURTHER SUBMITTED THAT T HE LATEST JUDGMENT OF VARIOUS HIGH COURT AND TRIBUNALS AFTER CONSIDERING THE JUDGMENT OF ATTAR SINGH GURUMUKH SINGH VS ITO AFTER CONSIDERING THE GENUINENESS OF THE PAYMENT, IDENTIT Y OF THE PAYEE AND COMPELLING AND MITIGATING CIRCUMSTANCES HAS TAK EN A VIEW FAVORABLE TO THE TAX PAYER .HE SUBMITTED THAT IN TH E PRESENT CASE, THE ASSESSEE IS ENGAGED IN THE BUSINESS OF REAL EST ATE, IT PURCHASED AGRICULTURAL LAND IN VILLAGE SURROUNDING GURGOAN VIDE REGISTERED SALE DEED AND THE PURCHASER HAS ADMITTED BEFORE THE SUB REGISTRAR HAVING RECEIVED THE ENTIRE CONSIDERAT ION. THIS CLEARLY PROVES THAT THE PAYMENT AND THE IDENTITY OF THE PAYEE IS NOT DOUBTED. FURTHER THE ASSESSEE WOULD NOT BE ABLE TO PURCHASE I.T.A. 3238, 3239, 3240, 3241/DEL/2013 ASSESSMENT YEARS: 20009-10,2010-11 29 LAND IF THE CASH PAYMENT WOULD NOT HAVE BEEN PAID A ND THE BUSINESS OF THE ASSESSEE WOULD HAVE SUFFERED AND TH EREFORE EXCEPTION AS PROVIDED IN RULE 6DD WILL COME TO BE I NVOKED. HE PLACED RELIANCE ON RC GOEL VS. CIT 84 DTR 0432(DEL) , SRI LAXMI STAYANARAYANA OIL MILLS VS. CIT 367 ITR 0200(AP), S MT. HARSHILA CHORDIA VS. ITO 208 CTR 0208 (RAJ.), ANUPAM TELE SE RVICES VS. ITO 366 ITR 122 (GUJ.), WALFORD TRANSPORT (EASTERN INDIA) LTD. VS. CIT 240 ITR 0902 (GAUHATI). HE SUBMITTED THAT T HE LD. CIT HAS PASSED A REASONED ORDER ON THE FACTS OF THE CAS E AND AS SUCH THE SAME SHOULD BE UPHELD. 14. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE PE RUSED THE MATERIAL ON RECORD. FIRST AND FOREMOST ISSUE IS THE ISSUE WITH REGARD TO ADDITIONS MADE ON THE BASIS OF THE SURREN DER STATEMENT OF SHRI BALWANT SINGH. THE SAID SURRENDER IS HIGHLI GHTED IN ANSWER TO QUESTION NO. 5 OF IMPUGNED STATEMENT OF S HRI BALWANT SINGH, INTER ALIA STATING THAT '...THE DETAILED EXPLANATION OF THESE ANNEXURE OF LOOSE PAGES/HARD DISKS/PEN DRIVE WOULD BE SUBMITTED BY ME LATER. MOST OF THE TRANSACTIONS IN THESE ANNE XURE ARE REFLECTED IN THE BOOKS OF ACCOUNTS OF VARIOUS COMPA NIES OF RAMPRASTHA GROUP. HOWEVER, AFTER PRIMA FACIE GOING THROUGH THESE DOCUMENTS, I ADMIT THAT SOME OF THE TRANSACTIONS AR E NOT REFLECTED I.T.A. 3238, 3239, 3240, 3241/DEL/2013 ASSESSMENT YEARS: 20009-10,2010-11 30 AND RECORDED IN THE BOOKS OF ACCOUNTS OF VARIOUS CO MPANIES OF RAMPRASTHA GROUP. ON ACCOUNT OF NON RECORDED/NON RE FLECTION OF THESE TRANSACTIONS, I HEREBY VOLUNTARILY ADMIT FOLL OWING ADDITIONAL INCOME FOR TAXATION... IT IS FURTHER EXPLAINED IN ANSWER TO QUESTION NO. 15, 16 WHEREIN IT IS STATED INTER ALIA THAT I HAVE VOLUNTARILY ADMITTED ADDITIONAL INCOME OF RS 52 CRO RES OVER AND ABOVE REGULAR INCOME IN THE HANDS OF VARIOUS PERSON S BELONGING TO THE GROUP. WE FIND THAT THERE IS A GROSS LACK OF CLARITY AND T OTAL VAGUENESS IN AFORESAID STATEMENT OF SHRI BALWANT SI NGH SO AS TO LEAD TO ANY CONCLUSION, MUCH LESS ADVERSE CONCLUSIO N, TO FASTEN ANY TAX LIABILITY. IT IS A WELL LAID DOWN LAW THAT THERE IS NO CONCEPT OF 'ON THE SPOT ASSESSMENT AT THE TIME OF SEARCH U /S 132 OF THE ACT. DURING POST SEARCH ENQUIRIES SHRI BALWANT SING H AGAIN REPEATED HIS SURRENDER STATEMENT. THE RECORDING OF THE STATEMENT AGAIN BY THE INVESTIGATION WING UNDER THE AFORESAID CIRCUMSTANCES IS NOTHING BUT TECHNICALLY REPEATING THE SAME EXERCISE. WE ALSO FIND FORCE IN THE ARGUMENTS OF TH E LD. AR THAT MERE ONE PERSON NOT AUTHORIZED BY OTHER PERSONS (HE RE ASSESSEE COMPANIES AND INDIVIDUAL) BEING INDEPENDENT AND SEP ARATE ASSESSEES CANNOT FASTEN ANY LIABILITY ON OTHERS. SHRI BALWANT SINGH I.T.A. 3238, 3239, 3240, 3241/DEL/2013 ASSESSMENT YEARS: 20009-10,2010-11 31 CANNOT BE TREATED AS SPOKESPERSON FOR OTHERS WHO HA VE NOT ADOPTED HIS STATEMENT IN WRITING. FURTHER, KNOWLEDG E AND CAPACITY OF A SINGLE PERSON WHO IS NOT HAVING FULL AND COMPLETE KNOWLEDGE OF FINANCIAL AFFAIRS OF EVERYBODY CONNECT ED TO SEARCH OPERATIONS, NEEDS TO BE APPRECIATED. 15. THE HONBLE HIGH COURT OF KERALA IN THE CASE OF COMMISSIONER OF INCOME TAX, 'KERALA-11 VS. A.P. PAR UKUTTY MOOPPILLAMMA AND OTHERS, 149 ITR 131 HELD THAT, AN ASSESSMENT IS TO BE MADE, NOT SOLELY BASED ON THE A DMISSION OF A PERSON AND THIS VIEW OF LAW WHICH HE TAKES. A PROPE R ORDER OF ASSESSMENT SHOULD BE MADE ON THE BASIS OF ALL FACTS AND CIRCUMSTANCES AND ON A CORRECT APPRECIATION OF THE RELEVANT PROVISION OF THE LAW. IT IS TRITE LAW THAT INCOME TAX NEEDS TO BE ASSESSED ON INCOME ACTUALLY EARNED AND NOT ON SOMET HING WHICH IS NOTIONAL AND HYPOTHETICAL AND BASED ON A GLOBAL SURRENDER LIKE THE PRESENT ONE. 16. THE MUMBAI BENCH OF ITAT IN THE CASE OF SHRI HA RESH P. DADIA (ITA NOS. 484, 1067 & 1194/MUM./2009) HELD TH AT, THE JUDGMENT IN MEGHRAJ S. JAIN (SUPRA), RELIED UPON BY THE LEARNED DEPARTMENTAL REPRESENTATIVE, DOES NOT COME TO THE R ESCUE OF THE REVENUE FOR THE REASON THAT THE HIGH COURT HELD THA T, A RETRACTED I.T.A. 3238, 3239, 3240, 3241/DEL/2013 ASSESSMENT YEARS: 20009-10,2010-11 32 CONFESSION CAN BE ACTED UPON ONLY WHEN THERE IS COR ROBORATIVE EVIDENCE GATHERED BY THE AUTHORITIES. IN THIS CASE, THERE IS NO CORROBORATIVE EVIDENCE. THE ASSESSING OFFICER HAS N OT DONE ANY INVESTIGATION OR COLLECTED ANY EVIDENCE. ON THE OTH ER HAND, CBDT HAS, IN ITS CIRCULAR, DIRECTED THEIR OFFICERS TO BA SE THEIR ASSESSMENTS ON THE EVIDENCE COLLECTED DURING THE CO URSE OF SEARCH AND. DURING THE COURSE OF ASSESSMENT PROCEEDINGS. I T WAS SPECIFICALLY DIRECTED THAT NO ADDITION SHOULD BE BA SED SOLELY ON CONFESSION OR DISCLOSURES MADE AT THE TIME OF SEARC H. THE HONBLE GUJARAT HIGH COURT IN KAILASHBEN MANHARLAL CHOKSHI (SUPRA), HAS HELD THAT A STATEMENT RECORDED AT MIDNIGHT NEED NOT BE GIVEN ANY CREDIT AS THE PERSON MAY NOT BE IN A POSITION TO MA KE ANY C 0 RRECT OR CONSCIOUS DISCLOSURE IN A STATEMENT, IF SUCH STATEM ENT IS RECORDED AT SUCH ODD H 0 URS. IN VIEW OF THE ABOVE AND ALSO IN VIEW OF THE F ACT THAT THE ASSESSEE HAS NEVER, AT ANY, GIVEN POINT OF TIME, STATED OR AGREED THAT THE PURCHASE AND SALE OF SHARES WERE NO T GENUINE, WE ARE OF THE OPINION THAT THE ASSESSING OFFICER WAS W RONG IN BASING HIS ENTIRE ASSESSMENT ORDER ON THIS ONE ANSWER GIVE N BY THE ASSESSEE AT THE TIME OF SEARCH, THAT TOO, WITHOUT I NVESTIGATION, SUBSEQUENT TO A RETRACTION. COMING TO THE VARIATION IN STATEMENT RECORDED UNDER SECTION 131 OF THE ACT DURING THE CO URSE OF I.T.A. 3238, 3239, 3240, 3241/DEL/2013 ASSESSMENT YEARS: 20009-10,2010-11 33 ASSESSMENT PROCEEDINGS, WE DO NOT FIND ANY MERIT IN THE CONCLUSIONS DRAWN BY THE ASSESSING OFFICER WHICH AR E PRESUMABLY, BASED ON THE PURPORTED VARIATIONS IN THE REPLIES TO QUESTIONS, ESPECIALLY WHEN THE ASSESSEE HAS FURNISHED EVIDENCE TO SHOW THAT HE HAD, IN FACT, PURCHASED AND SOLD SHARES OF M/S. BOLTEN PROPERTIES LTD.. 16.1 IT WILL NOT BE OUT OF PLACE TO REFER TO THE JUDGMENT OF THE HONBLE HIGH COURT OF MADRAS IN M.NARAYANAN & BROS. VS. ASST COMMISSIONER OF INCOME TAX TAX CASE (APPEAL) 81 OF 2005 WHEREIN THE HONBLE MADRAS HIGH COURT HAS HELD THAT , IT IS SEEN FROM THE CIRCULAR DATED 10TH MARCH, 2003, WHICH HAS BEEN EXTRACTED IN THE DECISION REPORTED IN (2008) 300 IT R 157 (MAD) (COMMISSIONER OF INCOME TAX V. S. KAHDER KHAN SON) THAT THE BOARD EMPHASIZED THE NEED TO HAVE A FOCUS ON THE CO LLECTION OF EVIDENCE, SEARCH AND SEIZURE AND SURVEY OPERATIONS, WHICH LEADS TO AN INFORMATION AS REGARDS THE UNDISCLOSED INCOME . THE BOARD VIEWED THAT CONFESSIONS RECORDED DURING THE COURSE OF SEARCH AND SEIZURE AND SURVEY OPERATIONS DID NOT SERVE ANY USE FUL PURPOSE. THE BOARD ALSO INSISTED THAT WHILE RECORDING STATEM ENTS DURING SEARCH AND SEIZURE AND SURVEY OPERATIONS, NO ATTEMP T SHOULD BE MODE TO OBTAIN CONFESSION STATEMENT AS TO THE UNDIS CLOSED INCOME. I.T.A. 3238, 3239, 3240, 3241/DEL/2013 ASSESSMENT YEARS: 20009-10,2010-11 34 IT WAS ALSO STATED THAT ANY ACTION ON THE CONTRARY, SHALL BE VIEWED SERIOUSLY AND THE SAID CIRCULAR HAS TO BE APPLIED T O ALL PENDING ASSESSMENTS. THUS THE BOARD INSISTED THE ASSESSING OFFICER TO RELY UPON THE EVIDENCES/MATERIALS GATHERED DURING SEARCH OPERATION AND THAT THE ASSESSMENT COULD NOT REST SIMPLY ON TH E CONFESSION STATEMENTS MADE. THUS GOING BY THE SAID DECISION OF THE SUPREME COURT, AS WELL AS THE LAW DECLARED IN THE DECISION REPORTED IN (1973) 91 ITR 18 (PULLANGODE RUBBER PRODUCE CO. LTD . V. STATE OF KERALA AND ANOTHER) THAT IT IS ALWAYS OPEN TO A PER SON WHO MADE THE ADMISSION, TO SHOW THAT THE STATEMENT TO OFFER INCOME IS INCORRECT AND HAD MATERIAL TO SUBSTANTIATE SO, WE H OLD THAT THE TRIBUNAL IS NOT JUSTIFIED IN PLACING UNDUE EMPHASIS ON THE CONFESSION STATEMENTS MADE BY THE ASSESSEE. AS RIG HTLY POINTED OUT BY THE LEARNED COUNSEL APPEARING FOR THE ASSESS EE WHEN THE ASSESSEE HAD EXPLAINED THE STATEMENT MADE ON THE SE COND DAY OF THE SEARCH WITH MATERIALS, THAT THE AMOUNTS OFFERED WERE THE LOANS TAKEN FROM THE RELATIVES WHO WERE ALREADY ASSESSED ON THE SAID AMOUNT; APART FROM THIS, EVEN OTHERWISE, THE TRANSA CTIONS RELATING TO PAWN BROKING, RELATED TO YEARS PRIOR TO THE DATE OF ASSESSMENT AND HAD NO RELEVANCE TO THE YEAR UNDER CONSIDERATIO N, RIGHTLY THE COMMISSIONER OF INCOME TAX (APPEALS) ACCEPTED THE C ASE OF I.T.A. 3238, 3239, 3240, 3241/DEL/2013 ASSESSMENT YEARS: 20009-10,2010-11 35 ASSESSEE TO CANCEL THE ASSESSMENT ON RS.4.00 LAKHS. THUS WHEN THE ASSESSEE HAD EXPLAINED HIS STATEMENT AS NOT COR RECT IN THE CONTEXT OF THE MATERIALS PRODUCED, AS HELD BY THE A PEX COURT IN THE DECISION REPORTED IN (1973) 91 ITR 18 (PULLANGODE R UBBER PRODUCE CO. LTD. V. STATE OF KERALA AND ANOTHER), WE DO NOT THINK THAT THE TRIBUNAL WOULD BE JUSTIFIED IN ITS CONCLUSION THAT THE STATEMENT MADE WOULD CLOTHE THE ASSESSMENT WITH LEGALITY. QUI TE APART FROM THAT, THE CASE OF THE ASSESSEE ALSO STANDS SUPPORTE D BY THE CIRCULAR DATED 10TH MARCH, 2003 OF THE CENTRAL BOAR D OF DIRECT TAXES, WHICH HAS GIVEN CATEGORICAL DIRECTIONS TO TH E OFFICERS, WHO ARE ENTRUSTED WITH THE JOB OF ASSESSMENT THAT UNDUE EMPHASIS SHOULD NOT BE PLACED ON THE STATEMENTS RECORDED IN FACT, IT HAD GIVEN A MANDATE NOT TO OBTAIN CONFESSION AS TO THE UNDISCLOSED INCOME. THUS APPLYING THE CIRCULAR DATED 10TH MARCH , 2003 TO THE FACTS OF THE CASE, WHICH IS BINDING ON THE REVENUE, WE HAVE NO HESITATION IN SETTING ASIDE THE ORDER OF THE TRIBUN AL. . 16.2 THE HONBLE DELHI HIGH COURT IN THE CASE OF DHINGRA METAL WORKS (ITA NO. 1111 OF 2010) HAS HELD THAT, THE WORD MAY USED IN SECTION 133A(3)(III) OF THE ACT CLARIFIES BEYOND DOUBT THAT THE MATERIAL COLLECTED AND THE STATEMENT RECORDED DURIN G THE SURVEY IS NOT A CONCLUSIVE PIECE OF EVIDENCE BY ITSELF. IN AN Y EVENT, IT IS I.T.A. 3238, 3239, 3240, 3241/DEL/2013 ASSESSMENT YEARS: 20009-10,2010-11 36 SETTLED LAW THAT THOUGH AN ADMISSION IS EXTREMELY I MPORTANT PIECE OF EVIDENCE, IT CANNOT BE SAID TO BE CONCLUSIVE AND IT IS OPEN TO THE PERSON WHO HAS MADE THE ADMISSION TO SHOW THAT IT I S INCORRECT. SINCE IN THE PRESENT CASE, THE RESPONDENT-ASSESSEE HAS BEEN ABLE TO EXPLAIN THE DISCREPANCY IN THE STOCK FOUND DURIN G THE COURSE OF SURVEY BY PRODUCTION OF RELEVANT RECORD INCLUDING T HE EXCISE REGISTER OF ITS ASSOCIATE COMPANY, NAMELY, M/S. D.M W.P. LTD., WE ARE OF THE OPINION THAT THE AO COULD, NOT HAVE MADE THE AFORESAID ADDITION SOLELY ON THE BASIS OF THE STATEMENT MADE ON BEHALF OF THE RESPONDENT-ASSESSEE DURING THE COURSE OF SURVEY. 16.3 IT IS TRITE LAW THAT A STATEMENT HAS ITS VALU E IN THE EYES OF LAW IF IT IS CORROBORATED BY CONNECTED EVIDENCE. AS FAR AS THE STATEMENTS BEING RECORDED UNDER THE ACT ARE CONCERN ED, THERE ARE TWO SITUATIONS I.E. SOMETIMES STATEMENT IS RECORDED U/S 133A OF THE ACT AT THE TIME OF SURVEY. THE COURTS HAVE C LEARLY HELD THAT THERE IS NO EVIDENTIARY VALUE IN RESPECT OF A STATE MENT U/S 133A UNLESS IT IS SUPPORTED BY SOME MATERIAL. SECOND SIT UATION IS THAT THE ACT HAS EMPOWERED THE REVENUE TO RECORD THE STA TEMENT DURING THE COURSE OF SEARCH AND STATEMENT IS RECORD ED U/S.132 (4) OF THE ACT. HOWEVER, MERELY ON THE BASIS OF A S TATEMENT RECORDED U/S 132(4), NO ADDITION CAN BE MADE UNTIL SOME I.T.A. 3238, 3239, 3240, 3241/DEL/2013 ASSESSMENT YEARS: 20009-10,2010-11 37 CORROBORATIVE EVIDENCE WAS FOUND IN SUPPORT OF SUCH ADMISSION. AS FAR AS THE GENERAL PRINCIPLE IS CONCERNED, AN AD MISSION CAN BE SAID TO BE AN EXTREMELY IMPORTANT PIECE OF EVIDENCE , IF MADE AS PER THE PRESCRIBED LAW. BUT SUCH AN ADMISSION CANNO T BE SAID TO BE CONCLUSIVE. IT IS OPEN FOR THE ASSESSEE TO SH OW THAT THE SAID ADMISSION WAS INCORRECT AND THE ONUS IS ON THAT PER SON TO ESTABLISH THAT THE IMPUGNED ADMISSION WAS INCORRECT . HE HAS TO PLACE CONVINCING REASON OR EVIDENCE TO SHOW THAT TH E EARLIER ADMISSION WAS NOT THE CORRECT POSITION OF FACT. IN THE CASE OF S. KHADER KHAN & SON (SUPRA) THE SCOPE OF SECTION 133A WAS IN DISPUTE, HOWEVER, THE FINDING WAS THAT SOLELY ON TH E BASIS OF THE STATEMENT GIVEN BY ONE OF THE PARTNERS, IT IS NOT L AWFUL TO ASSESS AN INCOME. THE HON'BLE APEX COURT HAD OCCASION TO D EAL WITH THE ISSUE OF ADMISSION IN THE CASE OF CHIKKAM KOTESWARA RAO V . CHIKKAM SUBARAO AIR (1971) (SC) 1542, WHEREIN THE H ON'BLE APEX COURT HAS STATED THAT AN ADMISSION, HOWEVER, B INDS THE PERSON MAKING IT ONLY IN SO FAR AS FACTS ARE CONCER NED BUT AN ADMISSION IS NOT A CONCLUSIVE PROOF OF THE MATTER ADMITTED, THOUGH IT MAY, IN CERTAIN CIRCUMSTANCES, OPERATE AS ESTOPPEL. BUT IN SUCH CASES, THERE SHOULD BE NO DOUBT OR AMBIGUIT Y ABOUT THE ALLEGED ADMISSION. HOWEVER, AN ADMISSION OR ACQUIES CENCE ON I.T.A. 3238, 3239, 3240, 3241/DEL/2013 ASSESSMENT YEARS: 20009-10,2010-11 38 THE PART OF THE ASSESSEE CANNOT BE THE FOUNDATION O F ASSESSMENT, WHERE THE INCOME IS RETURNED UNDER AN ERRONEOUS IMP RESSION OR MISCONCEPTION OF LAW. IT IS ALWAYS OPEN TO THE ASSE SSEE TO DEMONSTRATE AND SATISFY THE AUTHORITY CONCERNED THA T A PARTICULAR INCOME WAS NOT TAXABLE IN HIS HANDS AND THAT IT WAS RETURNED UNDER ERRONEOUS IMPRESSION. IN THE PRESENT CASE BEFORE US, THE ASSESSEE HAS PROVED THAT THE DISCLOSURE MAD E WAS NEITHER THE UNDISCLOSED / UNACCOUNTED INCOME OF THE ASSESSE E-COMPANY AND NOT EVEN A SINGLE PIECE OF INCRIMINATING PAPER OR DOCUMENT OR EVIDENCE OF ANY NATURE WERE FOUND FROM THE IMPOU NDED MATERIALS. EVEN THE AO HAS MADE ADDITION JUST ON THE BASIS STATEMENT RECORDED. THERE IS NO IOTA OF EVIDENCE, W HICH SUGGEST THAT THERE IS UNACCOUNTED / UNDISCLOSED INCOME EMER GING OUT OF THE INCRIMINATING SEIZED DURING THE COURSE OF SEARC H. THUS, CONSIDERING THE ENTIRE FACTUAL MATRIX WE FIND THAT THE AO HAS NOT BEEN ABLE TO DEMONSTRATE OR GIVE EVEN AN EXAMPLE OF ANY DOCUMENT SEIZED WHICH HAS NOT BEEN REFLECTED IN THE BOOKS OF ACCOUNTS. THE ADVERSE INFERENCE DRAWN BY THE AO ON THE BASIS OF THE LETTERHEADS OF DIFFERENT CONTRACTORS FOUND DURI NG THE SEARCH IS WRONG AND IN FACT CONTRADICTORY. FIRSTLY, THE LETTE RHEADS OF THE DIFFERENT CONTRACTORS PER SE DID NOT ESTABLISH THAT ASSESSEE HAS I.T.A. 3238, 3239, 3240, 3241/DEL/2013 ASSESSMENT YEARS: 20009-10,2010-11 39 DONE SOMETHING WRONG. THE AO HAS NOT EVEN REFERRED TO ANY EXPENDITURE OR DEDUCTION DEBITED OR CLAIMED IN THE BOOKS OF ACCOUNT WHICH IS NOT GENUINE. UNDER THE LAW THE AS SESSEE IS SUPPOSED TO STATE THE CORRECT INCOME. THE CORRECT I NCOME WILL MEAN INCOME WHICH IS NOT LESS THAN THE INCOME EARNE D AND NOT MORE THAN THE INCOME ACTUALLY EARNED. THUS THE ASSE SSEE HAS OFFERED THE CORRECT INCOME IN ITS RETURN OF INCOME AND AO HAS NOT BEEN ABLE TO POINT OUT OR GIVE ANY INSTANCE OF ANY ERROR OR DISCREPANCY IN THE INCOME OFFERED. HAVING CONSIDERE D THE ENTIRE FACTS AND ARGUMENTS, WE FIND THAT THE NEITHER THE I NVESTIGATION WING NOR THE ASSESSING OFFICER HAS CORRELATED ANY S EIZED DOCUMENT WITH THE SURRENDER OF UNACCOUNTED STOCK OR WORK-IN- PROGRESS. AT THE TIME OF PUTTING THE QUESTION LEADI NG TO SURRENDER OF INCOME SOME SEIZED DOCUMENT WAS REFERRED, NAMELY , A-2 TO A- 27. EXACT INCRIMINATING NATURE OF DOCUMENT WAS NEVE R CONFRONTED EITHER BY INVESTIGATION WING OR THE ASSE SSING OFFICER TO SH. BALWANT SINGH. THE ONLY SEIZED DOCUMENT DISC USSED BY THE ASSESSING OFFICER IS SIGNED BLANK LETTER HEADS OF CONTRACTORS IN SUPPORT OF UNACCOUNTED WORK-IN-PROGRESS. THESE B LANK LETTER HEADS IN NO WAY PROVE UNACCOUNTED PAYMENT TO THE CO NTRACTORS, SPECIALLY UNDER THE CIRCUMSTANCES THAT VARIOUS CONT RACTORS OF THE I.T.A. 3238, 3239, 3240, 3241/DEL/2013 ASSESSMENT YEARS: 20009-10,2010-11 40 RAMPRASTHA GROUP WERE SURVEYED SIMULTANEOUSLY AND N O DOCUMENTS OF UNRECORDED RECEIPTS WERE FOUND AND NO ADDITION WAS MADE IN THE HANDS OF CONTRACTORS ON THIS ISSUE. THIS FACTOR IS VERY IMPORTANT WHEN ENTIRE CONSTRUCTION IS DONE THR OUGH THE CONTRACTORS. THEREFORE, IT IS OBVIOUS THAT ENTIRE A DDITIONS HAVE BEEN MADE ON THE BASIS OF STATEMENT U/S 132(4) OF S H. BALWANT SINGH. WE HAVE CONSIDERED THE CONTENTS OF STATEMENT UNDER SECTION 132(4) OF SH. BALWANT SINGH. HE HAS MADE D ISCLOSURE OF ADDITIONAL INCOME ON BEHALF OF VARIOUS COMPANIES OF RAMPRASTHA GROUP AND OTHER PERSONS. IN THE SUBSTANTIVE PART OF ANSWER, SH. BALWANT SINGH HAS STATED THAT MOSTLY THE TRANSACTIO NS ARE RECORDED IN BOOKS OF ACCOUNTS AND SOME PARTS ARE UN ACCOUNTED. LD. AR HAS ARGUED THAT ENTIRE SEIZED DOCUMENT WAS E XAMINED DURING POST SEARCH AND ASSESSMENT PROCEEDING AND NO INCRIMINATING MATERIAL WAS FOUND. SUBSEQUENT STATEM ENTS WERE RECORDED BY THE INVESTIGATION WING AS MENTIONED IN THE ASSESSMENT ORDER. HOWEVER NO QUESTION WAS ASKED IN FURTHERANCE OF THE STATEMENT REGARDING THE CONTENTS OF THE SEIZ ED DOCUMENT. DURING ORIGINAL STATEMENT ALSO SUBSEQUENT DETAILS O F WORK-IN- PROGRESS, SUCH AS ADDRESS, QUANTUM OF WORK DONE, AC COUNTED WORK-IN-PROGRESS AND UNDISCLOSED WORK IN PROGRESS W ERE NOT I.T.A. 3238, 3239, 3240, 3241/DEL/2013 ASSESSMENT YEARS: 20009-10,2010-11 41 ASKED FOR. THE ASSESSEE COMPANIES DURING POST SEARC H PROCEEDINGS HAD TWICE INFORMED THE INVESTIGATION WI NG THAT THE SURRENDER OF WORK- IN-PROGRESS HAS BEEN MADE WITHOU T PINPOINTING ANY SEIZED MATERIAL. NO ACTION WAS APPA RENTLY TAKEN EVEN BY THE ASSESSING OFFICER, WHEN EFFECTIVELY THE STATEMENT GOT RETRACTED. AFTER CONSIDERING ENTIRE FACTS AND CIRCU MSTANCES OF THE CASE AND JUDICIAL PRONOUNCEMENTS REFERRED TO HEREIN ABOVE, WE ARE OF THE CONSIDERED OPINION THAT THE ADDITIONS BA SED ON THE STATEMENT OF SHRI BALWANT SINGH ALONE, CANNOT BE SU STAINED. ACCORDINGLY, THE ACTION OF THE LD. CIT (A) IN DELET ING THE ADDITION OF RS. 12 CRORES PERTAINING TO ITA NO 3238, RS. 2 C RORES PERTAINING TO ITA NO 3239 AND RS. 14 CRORES PERTAIN ING TO ITA NO 3240 BASED ON THE SURRENDER STATEMENT OF SHRI BALWA NT SINGH IS UPHELD AND THE GROUNDS OF APPEAL OF THE DEPARTMENT ON THIS ISSUE ARE DISMISSED. 17. AS FAR AS THE ISSUE OF DISALLOWANCE OF INTERE ST AMOUNTING TO RS. 7,31,89,263/- IN ITA NO. 3240 AND RS. 5,10, 38, 764/- IN ITA NO. 3241 IS CONCERNED, WE FIND THAT THE LD. CIT(A) HAS GIVEN A CATEGORICAL FINDING IN HIS ORDER THAT THE ADVANCES GIVEN TO THE VARIOUS SISTER CONCERNS WAS FOR BUSINESS PURPOSES. THE REVENUE HAS NOT BEEN ABLE TO CONTRADICT THIS FINDING BEFORE US ALSO. THE I.T.A. 3238, 3239, 3240, 3241/DEL/2013 ASSESSMENT YEARS: 20009-10,2010-11 42 HONBLE APEX COURT HAS HELD IN THE CASE OF SA BUILD ERS LTD VS. CIT (SUPRA), WE AGREE WITH THE VIEW TAKEN BY THE DELHI HIGH COURT IN CIT V. DALMIA CEMENT (BHARAT) LTD. [200212 54 ITR 377 THAT ONCE IT IS ESTABLISHED THAT THERE WAS NEXUS BE TWEEN THE EXPENDITURE AND THE PURPOSE OF THE BUSINESS (WHICH NEED NOT NECESSARILY BE THE BUSINESS OF THE ASSESSEE ITSELF) , THE REVENUE CANNOT JUSTIFIABLY CLAIM TO PUT ITSELF IN THE ARM-C HAIR OF THE BUSINESSMAN OR IN THE POSITION OF THE BOARD OF DIRE CTORS AND ASSUME THE ROLE TO DECIDE HOW MUCH IS REASONABLE EX PENDITURE HAVING REGARD TO THE CIRCUMSTANCES OF THE CASE. NO BUSINESSMAN CAN BE COMPELLED TO MAXIMIZE ITS PROFIT. THE INCOME TAX AUTHORITIES MUST PUT THEMSELVES IN THE SHOES OF THE ASSESSEE AN D SEE HOW A PRUDENT BUSINESSMAN WOULD ACT. THE AUTHORITIES MUST NOT LOOK AT THE MATTER FROM THEIR OWN VIEW POINT BUT THAT OF A PRUDENT BUSINESSMAN. AS ALREADY STATED ABOVE, WE HAVE TO SEE THE TRANSFER OF THE BORROWED FUNDS TO A SISTER CONCERN FROM THE POINT OF VIEW OF COMMERCIAL EXPEDIENCY AND NOT FROM THE POIN T OF VIEW WHETHER THE AMOUNT WAS ADVANCED FOR EARNING PROFITS . . RESPECTFULLY FOLLOWING THE RATIO OF THE DECISION OF THE HONBLE APEX COURT, WE HOLD THAT ON THE FACTS AND CIRCUMSTA NCES OF THE CASE, THE INTEREST AMOUNT OF RS. 7,31,89,263/- IN I TA NO. 3240 I.T.A. 3238, 3239, 3240, 3241/DEL/2013 ASSESSMENT YEARS: 20009-10,2010-11 43 AND RS. 5,10, 38,764/- IN ITA NO. 3241 HAS BEEN INC ORRECTLY DISALLOWED AND WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) ON THIS ISSUE ALSO. ACCORDINGLY, THE GROUNDS OF APP EAL PERTAINING TO THIS ISSUE ARE ALSO DISMISSED. 17.1 AS FAR AS THE ISSUE OF DISALLOWANCE OF RS. 55 CRORES IN ITA NO. 3241 IS CONCERNED, AFTER GOING THROUGH ALL THE RELEVANT RECORDS AND AFTER GIVING A CAREFUL CONSIDERATION TO THE RIVAL SUBMISSIONS, IT IS SEEN THAT THE FACT REMAINS UNASS AILED ON RECORD THAT THE EXPENDITURE DISALLOWED BY THE AO, W HICH HAS BEEN UPHELD BY THE LD. CIT (A), WAS NEVER CLAIMED A S AN EXPENSE BY THE ASSESSEE. SECTION 40A STARTS WITH THE NON-O BSTANTE CLAUSE SETTING OUT THAT THE PROVISIONS OF THIS SECTION SHA LL HAVE EFFECT NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN ANY OTHER PROVISIONS OF THE ACT RELATING TO THE COMPUTATION O F INCOME UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSI ON. SUB- SECTION (3) OF SECTION 40A IS AN EXCEPTION TO THE D EDUCTIBILITY OF EXPENDITURE UNDER THE COMPUTATION PROVISIONS OF PR OFITS AND GAINS OF BUSINESS OR PROFESSION. THUS CONSEQUENTL Y WHAT DOES NOT FALL WITHIN THE COMPUTATION OF INCOME WILL NOT ATTRACT THE PROVISIONS OF SECTION 40A (3). ON THIS ISSUE THE JU DGEMENT OF THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF MOTILAL KHATRI (2008) I.T.A. 3238, 3239, 3240, 3241/DEL/2013 ASSESSMENT YEARS: 20009-10,2010-11 44 218 CTR 602 (RAJ.) IS VERY CLEAR. THEIR LORDSHIPS BEFORE ARRIVING AT THEIR DECISION CATEGORICALLY TOOK NOTE OF THE FA CT THAT THE PROVISIONS OF SECTION 40A (3) HAD BEEN LOOKED AT AN D THEREAFTER THE POSITION IS VERY CLEAR IN AS MUCH AS WHEN THE A SSESSEE HAS NOT CLAIMED ANY DEDUCTION OF ANY EXPENDITURE THE QU ESTION OF NOT ALLOWING ANY PART OF THAT EXPENDITURE AS DEDUCTION DOES NOT ARISE. FOR READY-REFERENCE, WE EXTRACT THE RELEVAN T FINDING OF THEIR LORDSHIPS FROM THE SAID JUDGEMENT:- IN OUR VIEW, A BARE READING OF THE LANGUAGE OF THI S SUB- SECTION IS ENOUGH TO SHOW, THAT IN THE CIRCUMSTANCE S OF THE CASE, PROVISIONS OF S.40A(3) ARE NOT ATTRACTED WITH RESPECT TO EITHER OF THE TRANSACTIONS; OBVIOUSLY BECAUSE IT ON LY PROHIBITS ALLOWING OF DEDUCTION AS EXPENDITURE. EX PENDITURE OBVIOUSLY MEANS EXPENDITURE ADMISSIBLE TO BE DEDUCT ED FROM OUT OF THE INCOME, WHICH MAY INCLUDE THE EXPEN DITURE ON PURCHASE AND THE LIKE, AND THE SUB-SECTION PROVI DES THAT IF ANY SUCH EXPENDITURE IS INCURRED AFTER SPECIFIED DATE, IN A SPECIFIED MANNER, THEN 20 PER CENT OF SUCH EXPENDIT URE SHALL NOT BE ALLOWED AS A DEDUCTION. IN THE PRESEN T CASE THE ASSESSEE HAS NOT CLAIMED ANY DEDUCTION OF ANY EXPEN DITURE OF RS.3,88,000 OR RS.7,35,000 AND THEREFORE, THERE IS NO QUESTION OF NOT ALLOWING ANY PART OF THAT EXPENDITU RE, AS DEDUCTION. THUS, THE FINDING ARRIVED AT IN THIS RE GARD, BY THE LEARNED CIT (A), AND THE LEARNED TRIBUNAL CANNO T BE SAID TO BE WRONG. QUESTION NO.2 IS ACCORDINGLY ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 17.2 SIMILARLY, IT IS SEEN THAT THE JUDGEMENT OF T HE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS A LPHA TOYO LTD. (2008) 174 TAXMANN 427 (P & H) ALSO FULLY SUPP ORTS THE VIEW I.T.A. 3238, 3239, 3240, 3241/DEL/2013 ASSESSMENT YEARS: 20009-10,2010-11 45 TAKEN. FOR READY-REFERENCE, WE REPRODUCE PARAS 6 & 7 OF THE SAID JUDGEMENT:- WE HAVE HEARD LEARNED COUNSEL FOR THE REVENUE. TH E TRIBUNAL HAS FOUND AS A FACT THAT THE ANNUAL REPORT S FOR THE ASSESSMENT YEAR 1989-90 OF THE ASSESSEE CLEARLY SHO WS THE OUTSTANDING LOANS TO THE THREE PARTIES AS ON 1-4-19 89. COPIES OF THE LOAN ACCOUNT OF THE THREE PARTIES FOR THE PERIO D COMPRISING THE PREVIOUS YEAR ARE ALSO AVAILABLE ON THE RECORD. TH E PLEA OF THE ASSESSEE THAT THE PAYMENTS WERE MADE IN RESPECT OF THE CAPITAL ACCOUNT HAVE BEEN RIGHTLY ACCEPTED BY THE COMMISSIO NER OF INCOME TAX (APPEALS).THE ASSESSING OFFICER WITHOUT GIVING ANY FINDING ON THE ISSUE HAS MERELY GONE ON THE PRESUMPTION THAT T HE BOOKS OF ACCOUNT HAVE BEEN MANIPULATED. THE ASSESSING OFFICER HAS ALSO NOT GIVEN A FINDING THAT THE SUM IN QUESTION W AS ACTUALLY REVENUE EXPENDITURE WHICH WERE CLAIMED AS DEDUCTION IN PROFIT AND LOSS ACCOUNT. (EMPHASIS SUPPLIED). IN VIEW OF THE ABOVE FINDING OF FACTS, THE TRIBUNAL HA S RIGHTLY CONCLUDED THAT THE PAYMENT IN QUESTION WERE MADE ON ACCOUNT OF CAPITAL ACCOUNT, THEREFORE, PROVISIONS OF SECTION 4 0A(3) OF THE ACT WERE NOT ATTRACTED. THUS, WE DO NOT FIND ANY MERIT IN THIS APPEAL AND NO SUBSTANTIAL QUESTION OF LAW ARISES FOR DETER MINATION OF THIS COURT. HENCE THIS APPEAL IS DISMISSED. I.T.A. 3238, 3239, 3240, 3241/DEL/2013 ASSESSMENT YEARS: 20009-10,2010-11 46 18. ACCORDINGLY ON A CONSIDERATION OF THE FACTS A ND CIRCUMSTANCES OF THE CASE AND CONSIDERING THE RELEV ANT PROVISION OF THE ACT NAMELY SECTION 40A(3), WE HOLD FOR THE D ETAILED REASONS GIVEN HEREINABOVE THAT SECTION 40A(3) OF THE ACT HA S BEEN WRONGLY INVOKED AS ADMITTEDLY NO EXPENSES RELATABLE TO THE ADDITION HAS BEEN CLAIMED. ACCORDINGLY, THIS GROUND OF THE DEPARTMENT IS ALSO DISMISSED. 19. ALL OTHER REMAINING GROUNDS ARE DISMISSED AS NOT PRESSED. 20. IN THE RESULT, ALL THE FOUR APPEALS OF THE DEP ARTMENT ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH FEBRUARY, 2016. SD/- SD/- ( G.D. AGRAWAL) (SUDHANSHU SRIVASTAVA) VICE PRESIDENT JUDICIAL MEMBER DT. 16TH FEBRUARY, 2016 GS COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4.CIT(A) 4. DR BY ORDER ASST T. REGISTRAR