Kothakota Rama Rao, Rayagada V. ACIT, Central Circle-1, Bhubaneswar

ITA 386/CTK/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 7560 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 10 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 15-07-2020
• Assessment Year: 2016-2017
• Appeal Filed On: 22-10-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M K GAUTAM
• Keywords: Unexplained investment; Gift; Business income; Search and seizure; Loose papers; Document seized; Opportunity of being heard; Period of limitation; Source of fund; Assessment record; Block assessment; Time period of passing order; Documents seized; Set aside
• Section: 147; 131; 148; 143(3); 153A; 234B; 250; 201; 143(2); 43; 48; 73; 72; 13; 153; 22; 153C; 101; 20

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK BEFORE SHRI C.M. GARG, JM & SHRI L.P. SAHU, AM ( ) . / ITA NO. 132 /CTK/20 18 ( / ASSESSMENT YEAR : 20 1 3 - 201 4 ) KOTHAKOTA RAMA RAO, KOTHAPETA, RAYAGADA, DISTRICT - RAYAGADA VS. ACIT, CENTRAL CIRCLE - 1, BHUBANESWAR PAN NO. : A EPPK 1600 P AND . / ITA NO S . 19&20 /CTK/20 1 9 & ITA NO.386/CTK/2018 ( / ASSESSMENT YEAR :201 4 - 1 5, 2015 - 16 & 2016 - 17 ) KOTHAKOTA RAMA RAO, KOTHAPETA, RAYAGADA, DISTRICT - RAYAGADA VS. ACIT, CENTRAL CIRCLE - 1, BHUBANESWAR PAN NO. : AEPPK 1600 P ( / APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI P.K.MISHRA, ADVOCATE /REVENUE BY : SHRI M.K.GAUTAM, CITDR / DATE OF HEARING : 15 / 0 7 /20 20 / DATE OF PRONOUNCEMENT : 31 / 0 8 /20 20 / O R D E R PER L.P.SAHU , A M : TH E SE ARE THE APPEALS FILED BY THE ASSESSEE AGAINST THE SEPARATE ORDER S OF CIT(A) - 2 , BHU BANESWAR , DATED 11.09.2018 AND 29.08.2018 FOR ASSESSMENT YEARS 2013 - 2014, 2014 - 2015, 2015 - 2016 & 2016 - 2017. 2. SINCE, SIMILAR ISSUES HAVE BEEN RAISED IN ALL THE APPEALS, THEREFORE, FOR THE SAKE OF CONVENIENCE AND BREVITY, WE SHALL DECIDE THE APPEAL OF THE ASSESSEE FOR A.Y.2013 - 2014 IN IT(SS)A NO.132/CTK/2018 AFTER TAKING INTO CONSIDERATION THE GROUNDS AND FACTS MENTIONED IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 2 THEREIN AND THE OUTCOME OF THE SAME SHALL BE APPLIED MUTATIS MUTANDIS TO THE OTHER APPEALS OF THE ASSESSEE ALSO. 3. THE ASSESSEE IN THE AP PEAL FOR A.Y.2013 - 2014 [IT(SS)A NO.132/CTK/2018 HAS RAISED THE FOLLOWING GROUNDS : - 1. THAT THE ORDER OF THE LEARNED CIT(APPEALS) IS UNJUST AND NOT IN REFERENCE TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THAT THE ADDITION OF RS.75,00,000/ - AS ALLEGE D ON ACCOUNT OF ADVANCE GIVEN TO J.SIVA SAI IS UNJUST AS THERE IS NO SUCH ADVANCE. 3. THAT THE ADDITION OF RS.6,25,000/ - AS ALLEGED THAT THE APPELLANT HAS RECEIVED INTEREST ON SUPRA IS UNJUST BECAUSE THERE IS NO ADVANCE HENCE THERE IS NO INTEREST. 4. F OR THAT THE CALCULATION OF INTEREST U/S 234 A , 234 B & 234 C ARE NOT AS PER THE PROVISIONS OF THE I.T.ACT 1961. 5. THAT THE ORDER ASSESSMENT IS BANNED BY LIMITATION BECAUSE THE ORDERS WERE PASSED ON 29/12/2017 AND SERVED ON THE ASSESSEE ON 15.01.2018. T HE MATTER WAS ALREADY DECIDED BY THE HONOURABLE BENCH, ITAT, CUTTACK IN THE MATTER OF NIDAN VIDE ITA NO M/S. N ID A N., I.T. (SS). APPEAL NOS. 32TO37/CTK/2018. (ANNEXURE - VI.) 6. FOR THESE AND OTHER REASONS TO BE ADDUCED AT THE TIME OF HEARING THE APPELLAN T PRAYS YOUR HONOUR TO REDUCE THE INCOME TO THE RETURNED FIGURES. FOR WHICH ACT OF KINDNESS THE APPELLANT SHALL EVER PRAY. 4. FURTHER THE ASSESSEE VIDE LETTER DATED 16.12.2019 HAS FILED AN APPLICATION FOR ACCEPTING THE ADDITIONAL GROUNDS, WHICH READS AS U NDER: - 1. THAT, FOR ASSESSMENT YEAR 2013 - 14, ASSESSMENT WAS COMPLETED BY THE LEARNED A.O. U/S.153A READ WITH SECTION 143(3) OF THE I.T. ACT, 1961 BY MAKING ADDITIONS OF UNDISCLOSED INCOME. BEING AGGRIEVED WITH THESE ADDITIONS, THE ASSESSEE PREFERRED APPEAL BEFORE THE LEARNED C.I.T.(A) AND THE SAME WAS ALREADY ADJUDICATED UPON. SINCE, THE LEARNED C.I.T.(A) DID NOT ALLOW THE APPEAL, BEING HIGHLY AGGRIEVED AND SERIOUSLY PREJUDICED, THE APPELLANT/ASSESSEE PREFERRED THIS PRESENT APPEAL BEFORE YOUR HONOUR. 2. TH AT, THE IMPUGNED ORDER SO PASSED AND CONSEQUENTIAL ADDITIONS MADE THEREIN ARE WITHOUT JURISDICTION AND WITHOUT THE AUTHORITY OF LAW, BUT WHILE DRAFTING THE GROUNDS OF APPEAL BEFORE IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 3 THE LEARNED C.I.T(A) AS WELL AS BEFORE THIS HON'BLE TRIBUNAL, THE APPELLANT DUE TO LACK OF KNOWLEDGE, COULD NOT TAKE LEGAL GROUNDS. SINCE, HE HIMSELF HAS FILED THE APPEAL, HAVING NO KNOWLEDGE ON INCOME TAX LAW, COULD NOT TAKE THESE LEGAL GROUND. LEGAL GROUNDS THAT, THE APPELLANT PROPOSED TO TAKE HERE ARE AS SUCH; 1. THAT, THE IMPUGNED ORDER OF ASSESSMENT IS NOT SUSTAINABLE IN THE EYE OF LAW IN VIEW OF THE FACT THAT DUE PROCEDURE OF LAW AND STATUTORY REQUIREMENT HAS NOT BEEN FOLLOWED BY THE LEARNED AUTHORITIES BELOW WHILE GRANTING APPROVAL U / S .153D OF THE ACT. IT BEING MANDATORY IN THE EYE OF LAW IN ABSENCE OF IT, THE ORDER OF ASSESSMENT NEEDS TO BE QUASHED IN THE INTEREST OF JUSTICE. 2. FOR THAT, IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPLETED ASSESSMENT CANNOT BE DISTURBED, AS SUCH, THE CONSEQUENTIAL ADDITIONS SO MAD E, BEING WITHOUT JURISDICTION AND WITHOUT THE AUTHORITY OF LAW IS LIABLE TO BE QUASHED IN THE INTEREST OF JUSTICE . THAT, IT MAY BE RESPECTFULLY SUBMITTED HERE THAT, IT BEING JURISDICTIONAL GROUND AND GOES TO THE ROOT OF THE CASE, IT NEEDS TO BE ADMITTED FOR HEARING IN THE INTEREST OF JUSTICE. IF THIS LEGAL GROUND IS NOT ADMITTED AND NOT ADJUDICATED, THE APPELLANT/ASSESSEE WILL SUFFER FROM IRREPARABLE LOSS AND INJURY, HENCE THE; PR A YER UNDER THE FACTS AND IN THE CIRCUMSTANCES STATED ABOVE, IT IS THEREFO RE RESPECTFULLY PRAYED THAT, THIS HON'BLE TRIBUNAL SHALL BE GRACIOUSLY PLEASED TO CONSIDER THE GENUINE DIFFICULTIES FACED BY THE ASSESSEE AND BE FURTHER PLEASED TO ACCEPT THESE ADDITIONAL LEGAL GROUND TAKEN HERE IN THE REVISED GROUNDS OF APPEAL FOR ADJUDIC ATION IN THE INTEREST OF JUSTICE. AND FOR THIS ACT OF KINDNESS, THE APPELLANT/ASSESSEE AS IN DUTY BOUND SHALL EVER PRAY. 5 . BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL DERIVING AN INCOME FROM INTEREST ON CAPITAL AND REMUNERATION FROM A PARTNERSHIP FIRM, NAMELY, M/S JAGANNATH MILLS, KOTHAPETA, RAYAGADA. A SEARCH AND SEIZURE OPERATION U/S.132 OF THE INCOME TAX ACT, 1961 WAS CONDUCTED AGAINST THE ASSESSEE ON AND FROM 12.02.2016. IN PURSUANT TO IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 4 THE SEARCH AND SEIZURE OPERATION, THE ASSESSE E WAS ASKED TO FILE RETURN U/S.153A OF THE ACT. IN RESPONSE TO THE SAID NOTICE, THE ASSESSEE STATED THAT THE RETURN FILED U/S.139 OF THE ACT ON 31.03.2014 DECLARING TOTAL INCOME OF RS.2,67,510/ - MAY BE TREATED AS RETURN FILED. SUBSEQUENTLY, OTHER STATUTORY NOTICES WERE ISSUED TO THE ASSESSEE. IN RESPONSE TO THE SAID NOTICE, LD. AR OF THE ASSESSEE FILED DETAILED WRITTEN SUBMISSIONS WHICH HAVE BEEN INCORPORATED BY THE AO IN HIS ORDER. THE SEARCH U/S.132 OF THE ACT WAS CONDUCTED IN CASE OF SHRI N. TRINATH RAO, SHRI N.ANANDA RAO AND SHRI JAMI RAMESH & GROUP ON 12.02.2016. SHRI N.TRINATH RAO AND SHRI N.ANANDA RAO BOTH ARE BROTHERS AND QUALIFIED CHARTERED ACCOUNTANTS AND PRACTICISING. THE ASSESSEE SHRI KOTHAKOTA RAMA RAO WAS FATHER - IN - LAW OF SHRI N.ANANDA RAO. SHR I JAMI RAMESH AND SHRI JAMI SIVA SAI ARE BROTHER - IN - LAWS OF SHRI N. TRINATH RAO. DURING THE SEARCH PROCEEDINGS IN THE RESIDENTIAL PREMISES OF SHRI JAMI SIVA SAI INCRIMINATING DOCUMENTS IN THE FORM OF LOOSE PAPERS, NOTE BOOKS, DIARIES ETC. WERE FOUND. THE D OCUMENTS WHICH ARE FOUND AND ANNEXURED AS JRR - 45, JRR - 37 & JRR - 26 WHICH ARE CONTAINING DETAILS OF AMOUNTS ADVANCED BY THE ASSESSEE TO SHRI JAMI SIVA SAI WAS FOUND AND THE SAME WAS CONFRONTED TO THE ASSESSEE AS PER QUESTIONNAIRE DATED 19.06.2017. DURING TH E CONFRONTATION OF THESE DOCUMENTS THE LD. AR OF THE ASSESSEE DENIED TO GIVE ANY SUCH LOANS AND ADVANCES TO JAMI SHIVA IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 5 SAI OF RS.75 LAKHS. FURTHER DURING THE COURSE OF POST SEARCH ENQUIRY, THE ABOVE DOCUMENTS WERE ALSO CONFRONTED TO JAMI SIVA SAI ON 12.04. 2016, WHEREIN HE WAS ALSO FAILED TO OFFER ANY CONVINCING EXPLANATION S . FROM THE STATEMENTS, THE AO NOTICED THAT SHRI JAMI SIVA SAI COULD NOT FURNISH THE DETAILS OF RS.50 LAKHS RECEIVED FROM DORB AND RS.25 LAKHS RECEIVED FROM SHRI GANDHI THAKUR DAS, SURAT. FOR THE SAKE OF CONVENIENCE, WE ARE REPRODUCING THE QUESTIONS ANSWERS, STATEMENTS AND FINDINGS OF AO IN THIS REGARD, WHICH READ AS UNDER : - 6. DURING THE COURSE O F SEARCH AND SEIZURE OPERATION AT THE RESIDENTIAL PREMISES OJ SRI JAMI SIVA SAI, JEYPORE ON 12 .02.2016, THE F OLLOWING DOCUMENTS WERE SEIZED. SI. NO. DOCUMENTS SEIZED INDENTIFIED AS 01. ONE DIARY JRR - 45 02. ONE NOTE BOOK JRR - 37 03. ONE ROUGH CASH BOOK JRR - 26 PAGE NO.84 OF JRR - 45 SHOWS THE DETAILS O F HAND LOAN AMOUNTING TO RS.75,00,000/ - GI VEN BY YOU TO SRI JAMI SIVA SAI DURING THE F INANCIAL YEAR 2012 - 13. THE ABSTRACT O F THE SEIZED DOCUMENT JRR - 45 PAGE NO. 84 IS REPRODUCED BELOW: - K.RAMA RAO, RYD. 26/6/12 BY CASH(P) 50,00,000 12/11/12 BY CASH(I) 625000 06/12/12 BY CASH(P) 25,00,000 75,0 0,000 THE PAGE NO. 90 OF JRR - 37 SHOWS RECEIPT OF INTEREST @1.25% PER MONTH ON HAND LOAN. SIMILARLY, PAGE NO.86 OF JRR - 37 SHOWS INTEREST RECEIVED BY YOU ON 12.11.12 IS RS.6,25,000/ - . IN VIEW OF THE ABOVE, PLEASE EXPLAIN THE SOURCE OF RS.75,00,000/ - HAND LOAN GIVEN TO SRI JAMI SIVA SAI . FURTHER, EXPLAIN WHY THE INCOME OF INTEREST OF RS.6,25,000/ - ON HAND LOAN WILL NOT TREATED AS UNDISCLOSED INCOME AND ADDED TO YOUR TOTAL INCOME DURING THE FINANCIAL YEAR. FOR THE PURPOSE OF MAKING COMPLIANCE TO T HIS QUESTIONNAIRE, A NOTICE U/S.142(1) OF THE ACT IS ENCLOSED.' IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 6 IN RESPONSE TO THE ABOVE QUESTIONNAIRE, THE ASSESSEE'S A.R SHIR N. ANANDA RAO, F.C.A FILED HIS REPLY ON 25/07/2017. THE SAME HAS BEEN REPRODUCED BELOW; THE ASSESSEE HAS FILED THE RETUR N OF INCOME FOR THE ASSESSMENT YEAR 2013 - 14 ON 31 - 03 - 2014. THE COPY OF THE ACKNOWLEDGEMENT AND THE CALCULATION SHEET ENCLOSED HEREWITH FOR YOUR KIND PERUSAL. THERE ARE NO INVESTMENTS MADE DURING THE YEAR. YOUR HONOUR HAS MENTIONED IN THE NOTICE THAT THE AS SESS E E HAD GIVEN LOAD TO JAMI SIVA SAI AS PER THE NOTING OF DIARY, NOT - BOOK AND ROUGH CASH BOOK ON 26 - 06 - 12 AND ON 06 - 12 - 12 OFRS.50 LAKHS AND RS.25 LAKHS RESPECTIVELY. IN THIS REGARD I AM TO SAY THAT I HAVE NOT GIVEN ANY LOAN TO JAMI SIVA SAI AND I AM NOT AWARE OF THE SAME TRANSACTIONS. DURING THE INVESTIGATION ALSO I HAVE TOLD THAT SAME FACT. THERE IS NO RECEIPT OF INTEREST TO THE EXTENT OF RS.6,25,000/ - ON 12 - 11 - 2012. NO DOCUMENTS WERE ALSO OBTAINED FROM OUR PREMISES DURING THE SEARCH OPERATIONS. I HAVE NO DEALINGS WITH JAMI SIVA SAI AND I DO NOT KNOW WHY HE HAS MENTIONED K. RAMA RAO. IT MAY BELONG TO SOME OTHER PERSON. THERE ARE MANY IN THE NAME OF K. RAMA RAO AND HENCE IT CANNOT BE TREATED AS UNDISCLOSED INCOME. AS SUCH THE SAME CANNOT BE ADDED TO THE RETURNED INCOME. 04. DURING THE COURSE OF POST SEARCH ENQUIRY, THE ABOVE FACTS WERE CONFRONTED ] TO SHRI JAMI SIVA SAI IN HIS STATEMENT RECORDED ON 12.04.2016 WHERE IN HE WAS FAILED TO OFFER ANY CONVINCING EXPLANATION THE RELEVANT PORTION OF HIS STATEM ENT RECORDED U/S. 131 IN VERBATIM IS REPRODUCED BELOW: - 'Q. 85 PLEASE GO THROUGH PAGE NO. 152 OF THE BOOKS SEIZED FROM YOUR RESIDENCE, IDENTIFIED AS JRR - 26. ON THIS PAGE, THERE IS AN ENTRY VIZ: ' BY K. RAMA RAO(P) - RS.25,00,000/ - '. PLEASE FURNISH THE COMP LETE SURNAME FOR THE INITIALS 'K', COMPLETE POSTAL ADDRESS AND TELEPHONE NUMBER OF SHRI K. RAMA RAO AND ALSO EXPLAIN TH E TRANSACTION. ANS - IN FACT, HE IS Y. RAMA RAO AND NOT K. RAMA RAO WHO IS A SALES AGENT OF SRI SAI CASHEWS AND HE COLLECTED THE AMOUNT F ROM SRI GANDHI THAKUR DAS, SURAT WHO IS A DEBTOR. SRI Y. RAMA RAO IS RESIDING AT KHAL SAHI, ARVIND NAGAR, JEYPORE AND HIS PHONE NUMBER IS 7682801171. Q.86 AS YOU SAID, IT IS NOT WRITTEN AS 'Y' IT IS ACTUALLY 'K'. ANOTHER ENTRY AT PAGE NO.332 OF JRR - 26 CLEARLY SHOWS THAT IT IS ACTUALLY 'K' PLEASE OFFER YOUR COMMENT. ANS - WE CALL HIM AS RAMA RAO AND WE ARE NOT SURE ABOUT HIS INITIALS. Q.87 TO SUBSTANTIATE MY ARGUMENT I AM SHOWING YOU ANOTHER ENTRY AT PAGE - 84 OF SEIZED DOCUMENTS IDENTIFIED AS JRR - 45. ON THIS PAGE, THERE ARE SOME ENTRIES AS UNDER: 'BY K. RAMA RAO, RYD' 26.06.2011 BY CASH(P) 50,00,000/ - 12.11.2012 TO CASH(I) 6,25,000/ - 06.12.2012 BY CASH(P) 25,00,000/ - 75,00,000/ - , IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 7 PLEAS E EXPLAIN THE INITIALS(P) AND (I) FURNISH THE COMPLETE POSTAL ADDRESS OF SRI K. RAMA RAO ALONGWITH TELEPHONE NUMBER. ANS - AS I SAID EARLIER, HE IS NOT K. RAMA RAO AND HE IS Y. RAMA RAO AND HE COLLECTED CASH OF RS.50,00,000/ - FROM DORB PARTIES. (P) STANDS FOR 'PARTY' AND (I)STANDS FOR 'INVESTMENT' AND THE ADDRESS OF Y. RAMA RAO HAS ALREADY BEEN SUBMITTED ABOVE. Q.88 AS YOU SAID ABOVE, WHERE YOU HAVE INVESTED RS.6,25,000/ - AND SOURCE THEREOF? ANS - THE INVESTMENT OF RS. 6,25,000/ - HAS BEEN MADE IN CASHEW HOME AND HAS BEEN REFLECTED IN THE BOOKS OF ACCOUNT. Q.89 I AM SHOWING YOU PAGE - 88 OF SEIZED DOCUMENTS IDENTIFIED AS JRR - 37. ON THIS PAGE, THERE ARE SOME ENTRIES AS UNDER: - P.95 LAKHS 12.11.12 6,25,000 OB: 50 21.05.13 5,00,000 6/12/12 25 22.05.13 62,500 23/04/14 20 30.10.13 4,68,750 95 06.02.14 4,68,750 07.07.14 6,37,5 00 - 9 MONTHS PAY 30.12.14 4,00,000 PLEASE EXPLAIN THE ABOVE. ARTS - AS EXPLAINED ABOVE, RS,50 LAKHS WAS RECEIVED FROM DORB CUSTOMERS AND RS.25 LAKHS RECEIVED FROM SRI GANDHI THAKUR DAS, SURAT. Q.90 I AM SHOWING YOU PAGES - 89 TO 91 OF SEIZED DOCUMENTS IDENTIFIED AS JRR - 37 WHICH CLEARLY SHOW PAYMENT OF INTEREST MADE BY YOU AS DETAILED BELOW. 5X75X1.25 468750 5MONTHSX75 LAKHSXI.25% = RS.4,68,750/ - . THAT MEANS YOU HAVE PAID INTEREST OF RS.4,68,750/ - @ 1.25% INTEREST ON RS .75,00,000/ - OF LOAN AVAILED. PLEASE OFFER YOUR COMMENTS. ANS. I CANNOT EXPLAIN THE SAME.' 05. FROM THE ABOVE, IT IS CLEAR THAT SHRI JAMI SIVA SAI EXCEPT STATING THAT AN AMOUNT OF RS.50,00,000/ - WAS RECEIVED FROM DORB AND RS.25,00,000/ - RECEIVED FRO M SHRI GANDHI THAKUR DAS, SURAT, HE HAS FAILED TO FURNISH THE ANY SUPPORTING DOCUMENTS SUCH AS LEDGER EXTRACTS OF THE PARTIES FROM WHOM DORB PAYMENTS > WERE RECEIVED AND LEDGER EXTRACTS IN THE CASE OF SHRI GANDHI THAKUR DAS, SURAT ALSO. DURING THE COURSE OF ASSESSMENT PROCEEDING ALSO HE HAS NOT PRODUCED ANY EVIDENCE IN SUPPORT HIS CLAIM. AGAIN, A FINAL SHOW CAUSE LETTER WAS ISSUED TO THE ASSESSEE ON 30/10/2017. IN RESPONSE TO THIS ALSO THE ASSESSEE ALSO DENIED TO HAVE.ADVANCED ANY AMOUNTS TO SHRI JAM I SIVA SAI. IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 8 06. IT IS PERTINENT TO MENTIONED HERE THAT DURING THE COURSE OF SEARCH PROCEEDINGS IN HIS RESIDENCE, EVIDENCE REGARDING MONEY - LENDING BUSINESS CARRIED ON BY THE ASSESSEE WERE FOUND. FOR EXAMPLE DURING THE FINANCIAL YEAR 2015 - 16, SHRI K RAMA RAO ADVANCED AN AMOUNT OF RS.31,00,000/ - TO SHRI B RAM PRASAD RAO, CHAIRMAN OF M/S. GANDHI INSTITUTE OF ADVANCED COMPUTER & RESEARCH WERE FOUND. THE ORIGINAL RECEIPTS BEARING THE SIGNATURE OF SHRI B RAM PRASAD RAO WERE FOUND AND INVENTORIZED AS PER ANNEXURE - K KR - 01. WHEN THE SAME WAS CONFRONTED TO THE ASSESSEE IN THIS INSTANCE ALSO HE HAS DENIED HAVE ADVANCED TO ANY AMOUNTS TO THE ABOVE PERSONS. FR OM THE ABOVE, IT IS CLEAR THAT THE ASSESSEE WAS DENYING TO ACCEPT ANY EVIDENCE GATHERED IN - HIS OWN HOUSE. 07. SIN CE, BOTH SHRI JAMI SIVA SAI AND THE ASSESSEE FAILED TO FURNISH ANY COGENT EVIDENCE IN SUPPORT OF THEIR DENYING HABIT, I HAVE NO OPTION EXCEPT TO ADD THE SAME AS UNDISCLOSED INCOME OF THE ASSESSEE TO PROTECT THE INTEREST OF THE REVENUE ON SUBSTANTIVE BASIS. ADDITION: RS.75,00,000/ - FROM THE ABOVE FACTS, THE AO WAS NOT CONVINCED AND ADDED THE TOTAL RS.75 LAKHS IN THE HANDS OF THE ASSESSEE AND COMPLETED THE ASSESSMENT ON SUBSTANTIVE BASIS ALONG WITH THE INTEREST OF RS.6,25,000/ - AND IN CASE OF JAMI SIVA SAI, THE SAME WAS ADDED ON PROTECTIVE BASIS. HOWEVER, IN APPEAL FILED BY THE ASSESSEE, THE CIT(A) DELETED THE ADDITION MADE IN THE HANDS OF JAMI SIVA SAI ON PROTECTIVE BASIS HOLDING THAT THE SAME AMOUNT HAS BEEN CONFIRMED IN THE HANDS OF THE ASSESSEE KOTHAKOTA RAMA RAO VIDE ORDER DATED 28.09.2018 IN I . T . APPEAL NO. 0414/2017 - 18 . 6 . FEELING AGGRIEVED FROM THE ADDITION MADE BY THE AO, THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A) ALONG WITH ADDITIONAL LEGAL GROUND. LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF T HE ASSESSEE DISMISSED THE LEGAL GROUNDS RAISED BY THE ASSESSEE AND DECIDED THE APPEAL OF THE ASSESSEE ON MERITS. IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 9 7 . FURTHER AGGRIEVED FROM THE ORDER OF CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE INCOME TAX APPELLATE TRIBUNAL. 8 . AT THE OUTSET, LD. AR FI LED PAPER BOOK CONTAINING PAGES 1 TO 47 AND ALSO FILED HIS WRITTEN SYNOPSIS AS UNDER : - THAT, A SEARCH AND SEIZURE OPERATION U/S.132 OF THE I.T. ACT, 1961 WAS CONDUCTED IN THE RESIDENTIAL PREMISES OF THE ASSESSEE ON 12.02.2016. CONSEQUENT TO SEARCH, AS SESSMENT PROCEEDING U / S .153A HAS BEEN INITIATED AGAINST THE ASSESSEE FROM ASSESSMENT YEARS 2010 - 11 TO 2015 - 16 AND REGULAR ASSESSMENT U/S. 143(3) OF THE ACT, HAS BEEN INITIATED FOR ASSESSMENT YEAR:2016 - 17. WHILE COMPLETING ASSESSMENT, THE LEARNED A.O ACCEPTED RETURNED INCOME OF THE APPELLANT/ASSESSEE FOR ASSESSMENT YEARS:2010 - LL,2011 - 12 AND 2012 - 13, BUT MADE ADDITIONS FOR ASSESSMENT YEARS:2013 - 14 TO 2016 - 17. AGAINST THE ADDITIONS MADE, FOR ASSESSMENT YEARS:2013 - 14 TO 2016 - 17, THE APPELLANT PREFERRED APPEALS BEFORE CIT(A) - 2, BHUBANESWAR. WHILE ADJUDICATING APPEALS OF THE APPELLANT, THE LEARNED CIT(A) DELETED ADDITIONS FOR ASSESSMENT YEAR: 2014 - 15 AND 2015 - 16, HOWEVER ALLOWED ONLY RELIEF OF RS.9,73,821.00 FOR ASSESSMENT YEAR: 2016 - 17. BEING AGGRIEVED WITH ADDITIONS CONFIRMED BY THE LEARNED CIT(A), THE APPELLANT KNOCKS DOOR OF THIS HON'BLE TRIBUNAL FOR JUSTICE. THE APPELLANT SUBMITS HEREWITH DETAILS , FOR BETTER APPRECIATION OF FACTS; ASST.YEAR RETURNED INCOME ASSESSED IN COME ADDITION IN DISPUTE RELIEF BY CIT(A) 2010 - 11 RS.1,89,771.00 RS. 1,89,771.00 N I L NO APPEAL 2011 - 12 RS.2,52,115.00 RS. 2,52,115.00 N I L NO APPEAL 2012 - 13 RS.2,63,040.00 RS. 2,63,040.00 N I L NO APPEAL 2013 - 14 RS.2,67,510.00 RS. 83,92,510.00 RS. 81,25,000.00 N I L 2014 - 15 RS.2,68,220.00 RS. 17,68,220.00 RS. 15,00,000.00 RS.15,00,000.00 2015 - 16 RS.3,19,320.00 RS. 33,56,820.00 RS. 30,37,500.00 R.S.30,37,500.00 2016 - 17 RS.3,28,800.00 RS.1,29,55,340.00 RS.1,26,26,535.00 R S. 9,73,821.00 THAT, FOUR APPEALS ARE PENDING BEFORE THIS HON'BLE TRIBUNAL FOR ADJUDICATION I.E. FOR ASSESSMENT YEARS:2013 - 14, 2014 - 15, 2015 - 16 AND 2016 - 17. OUT OF FOUR APPEALS, FOR ASSESSMENT YEARS: 2014 - 15 AND 2015 - 16 ADDITIONS HAVE BEEN DELETED BY CI T(A) IN ABSENCE OF ANY INCRIMINATING MATERIALS, HOWEVER DISMISSED THE LEGAL ISSUE. THEREFORE, FOR THESE TWO ASSESSMENT YEARS, APPEALS ARE PENDING FOR ADJUDICATION OF LEGAL ISSUE ONLY. SO FAR AS THE KNOWLEDGE OF THE ASSESSEE GOES, DEPARTMENT HAS NOT PREFERR ED ANY APPEAL AGAINST THE RELIEF ALLOWED BY CIT(A) FOR ASSESSMENT YEARS: 2013 - 14 AND 2016 - 17, THE APPELLANT CHALLENGED ORDERS PASSED BY FORUMS BELOW BOTH ON LEGAL ISSUE AS WELL AS ON MERIT. IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 10 THAT, IN ADDITION TO LEGAL ISSUES RAISED IN THE ORIGINAL GROUNDS O F APPEAL, THE APPELLANT HAS FILED AN APPLICATION FOR ACCEPTANCE AND ADJUDICATION OF OTHER LEGAL ISSUES WHICH GOES TO THE ROOT OF THE CASE, THEREFORE PRAYS, BEFORE THIS HON'BLE TRIBUNAL TO ACCEPT THESE NEW LEGAL GROUNDS IN ADDITION TO ANOTHER LEGAL GROUND TAKEN IN THE APPEAL MEMO FOR HEARING IN THE INTEREST OF JUSTICE. LEGAL ISSUES: 4.1 THE, APPELLANT CHALLENGES THE VALIDITY AND SUSTAINABILITY OF THE IMPUGNED ORDER OF ASSESSMENTS AND CONSEQUENTIAL ADDITIONS MADE THEREIN ON THE FOLLOWING LEGAL GROUNDS SUCH AS; 1. THAT, THE IMPUGNED ORDER OF ASSESSMENTS ARE NOT SUSTAINABLE IN THE EYE OF LAW IN VIEW OF THE FACT THAT DUE PROCEDURE OF LAW AND STATUTORY REQUIREMENT HAS NOT BEEN FOLLOWED BY THE LEARNED AUTHORITIES BELOW WHILE GRANTING APPROVAL U / S .153D OF T HE ACT. IT BEING MANDATORY IN THE EYE OF LAW IN ABSENCE OF IT, THE ORDER OF ASSESSMENT NEEDS TO BE QUASHED IN THE INTEREST OF JUSTICE. 2. THAT, IN ABSENCE OF ANY INCRIMINATING MATERIALS, THE LEARNED A.O IS NOT JUSTIFIED UNDER THE LAW TO DISTURB THE C OMPLETED, ASSESSMENT, AS SUCH THE IMPUGNED ORDER OF ASSESSMENT FOR ASSESSMENT YEARS: 2013 - 14 TO 2015 - 16 ARE WITHOUT JURISDICTION AND WITHOUT THE AUTHORITY OF LAW, HENCE ADDITIONS MADE NEEDS TO BE DELETED IN THE INTEREST OF JUSTICE. 3. THE IMPUGNED OR DERS OF ASSESSMENTS RE ANTE - DATED AND ARE BARRED BY LIMITATION AS SUCH ARE NOT SUSTAINABLE IN THE EYE OF LAW, HENCE NEEDS TO BE QUASHED IN THE INTEREST OF JUSTICE. LEGAL GROUND NO.L. 1A. THAT, AS HAS BEEN OBSERVED BY THE LEARNED C.I.T (A) IN PARA - 7.2 AT PA GE 6 OF HIS ORDER THAT WHILE COMPLETING ASSESSMENT, THE LEARNED A.O HAS SENT THE DRAFT ORDER FOR APPROVAL OF THE LEARNED JOINT COMMISSIONER OF INCOME TAX ON 29.12.2017 VIDE HIS F. NO. ACIT /CC - L/BHUBANESWAR/153D/2017 - 18 AND THE LEARNED JOINT COMMISSIONER O F INCOME TAX ACCORDED HIS APPROVAL VIDE LETTER NO.F.NO.JCIT (CENTRAL)/BHUBANESWAR/153D/CC - L/BHUBANESWAR/ 2017 - 18/3633 ON 29.12.2017, THEREAFTER THE ASSESSING OFFICER HAS ISSUED THE SAME ORDER ON 29.12.2017 AND THESE ARE UNDISPUTED FACTS. FROM THESE FACTS, IT IS PROVED WITHOUT ANY IOTA OF DOUBT THAT THE ON 29.12.2017, ITSELF DRAFT ASSESSMENT ORDER FOR SEVEN YEARS OF THIS ASSESSEE WERE SENT FOR APPROVAL AND ON THE SAME DAY IT WERE APPROVED AND THEREAFTER FILES WERE SENT TO THE LEARNED A.O AND THE LEARNED A.O PASSED THE ASSESSMENT ORDER. 1 B. THAT, IT WILL BE NOTE WORTHY TO SUBMIT HERE THAT, NOT ONLY IN THIS CASE IN CASE OF OTHER ASSESSEE'S ALSO LIKE N. ROJA, SHRI SHIVA SAI JAMI, SHRI JAMI RAMESH, M/S. SAIRAMESWAR SOLVENTS PVT. LTD, SAI SWADHIN COMMERCIALS PVT. LTD, SAI CASHEWS, JAGATJANANI CASHEW INDUSTRIES, N. ANAND RAO, N. ASHARANI AND ALSO IN THE CASE OF JAMI NIRMALA TOTAL 75 DRAFT ASSESSMENT ORDERS WERE SENT FOR APPROVAL ON 29.12.2017 AND IN ALL CASES APPROVAL WERE ACCORDED ON 29.12.2017 AND ASSESSMENT ORDER S WERE PASSED ON 29.12.2017. IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 11 1 C. THAT, FROM THIS FACT AND FROM THE FINDINGS OF LEARNED C.I.T(A), IT IS AMPLY CLEAR THAT, THE LEARNED JOT ACCORDED HIS APPROVAL IN MECHANICAL MANNER WITHOUT APPLYING HIS JUDICIAL MIND AND WITHOUT VERIFYING SEARCHED MATERIALS AS HE DID NOT HAVE SUFFICIENT TIME IN HIS HAND TO VERIFY ALL DOCUMENTS. IT IS THE DUTY OF THE APPROVING AUTHORITY TO ACT IN ACCORDANCE WITH THE MANDATE AND PROVISIONS OF LAW WHILE GRANTING APPROVAL AND DISCHARGING STATUTORY FUNCTION LAY ON HIS SHOULDER BY FOLLOWING PROPER PROCEDURE AND ALSO BY APPLYING JUDICIOUS AND CAUTIOUS MIND TO THE RELEVANT ASSESSMENT FOLDERS / FILES AND DRAFT ASSESSMENT ORDERS WHILE GRANTING APPROVAL U/S.153D OF THE ACT, THIS IS NOT A FORMALITY BUT A STATUTORY DUTY OF THE APPROVING A UTHORITY WITH A CORRESPONDING OBLIGATION ON HIM TO EXAMINE RELEVANT RECORD AND ASSESSMENT ORDERS AND THEREAFTER GRANT THE APPROVAL. IN THE CASE IN HAND, THE LEARNED C.I.T.(A) IN HIS APPEAL ORDER HAS CATEGORICALLY MENTIONED THAT ONLY DRAFT ASSESSMENT ORDERS WERE SENT FOR APPROVAL, FROM THIS FACT, IT GOES ON SAYING WITHOUT ANY IOTA OF DOUBT THAT APPROVALS WERE ACCORDED WITHOUT VERIFYING THE ASSESSMENT RECORD AND SEIZED MATERIALS. SINCE, THE LEARNED 3CIT HAD NOT APPLIED HIS JUDICIOUS MIND, THE SAID APPROVAL AC CORDED BY HIM IS NOT SUSTAINABLE IN THE EYE OF LAW AS SUCH THE CONSEQUENTIAL ASSESSMENT ORDER SO PASSED IS ALSO NOT SUSTAINABLE IN THE EYE OF LAW AS SUCH ARE LIABLE TO BE QUASHED IN THE INTEREST OF JUSTICE. 1D. THAT LAW IN THIS ISSUE IS WELL SETTLED BY TH E HON'BLE BOMBAY HIGH COURT IN THE CASE OF SMT. SHREELEKHA DAMANI(SUPRA) REPORTED IN (2019) 307 CTR 218 . THAT WHILE GRANTING APPROVAL, IF THE APPROVING AUTHORITY DID NOT HAVE ENOUGH TIME TO ANALYSE THE ISSUES ARISING OUT OF THE DRAFT ASSESSMENT ORDERS, THE N CLEARLY THIS WAS A CASE IN WHICH THE HIGHER AUTHORITY HAD GRANTED THE APPROVAL WITHOUT CONSIDERATION OF RELEVANT ISSUES. THEIR LORDSHIPS HELD THAT THE QUESTION OF VALIDITY OF APPROVAL GOES TO THE ROOT OF THE MATTER AND COULD HAVE BEEN RAISED AT ANY TIME AND THE TRIBUNAL WAS JUSTIFIED IN HOLDING THAT THERE WAS NO APPLICATION OF MIND ON THE PART OF THE AUTHORITY GRANTING APPROVAL AND THEREFORE APPROVAL WAS INVALID. THE APPELLANT ALSO RELIES ON FOLLOWING JUDICIAL PRONOUNCEMENTS SUCH AS; 1. DILLIP CONSTRUCT IONS PVT. LTD - VS. - ACIT, IT (SS)A NOS.66 TO 71/CTK/2018 2. M3M INDIA HOLDINGS - VS - DCIT, IN ITA NO.2691/DEL/2018 3.GEETARANI PANDA &ORS. - VERSUS - ACIT(2018) 32 TTJ 703(CTK) 1E. THAT, IN VIEW OF ABOVE JUDICIAL PRONOUNCEMENT AND SETTLED PRINCIPLES OF LAW, IT IS RESPECTFULLY SUBMITTED HERE THAT SINCE THE LEARNED JOT HAS ACCORDED APPROVAL WITHOUT VERIFYING THE ASSESSMENT RECORDS AND SEIZED MATERIALS AND IN A VERY MECHANICAL AND HASTY MANNER, THE SAME IS NOT SUSTAINABLE IN THE EYE OF LAW, AS SUCH IMPUGNED ASS ESSMENT ORDERS BEING ILLEGAL AND VOID ARE LIABLE TO BE QUASHED IN THE INTEREST OF JUSTICE. IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 12 LEGAL GROUND NO. 2 2A. THAT, FOR ASSESSMENT YEARS: 2013 - 14 TO 2015 - 16, NO ADDITION HAVE BEEN MADE ON THE BASIS OF ANY INCRIMINATING MATERIAL FOUND AND SEIZED FROM THE ASSESSEE. HOWEVER ADDITIONS HAVE BEEN MADE ON THE BASIS OF DOCUMENTS SEIZED FROM A THIRD PARTY NAMELY JAMI SHIVA SAI. LEARNED CIT(A) DELETED ADDITIONS ON THE SAME SET OF FACTS FOR ASSESSMENT YEAR:2014 - 15 AND 2015 - 16, BUT CONFIRMED ADDITION FOR ASSESSM ENT YEAR:2013 - 14. SINCE, ISSUE IS SIMILAR TO ALL THESE THREE YEARS FOR CONVENIENCE AND BETTER APPRECIATION, THE APPELLANT SUBMITS HERE DETAILS IN ASSESSMENT YEAR: 2013 - 14 AND PRAYS TO ACCEPT THIS ARGUMENT FOR REST OF THE TWO ASSESSMENT YEARS . (ASSESSMENT YEAR: 2013 - 14) THAT, DURING COURSE OF SEARCH, THOUGH CERTAIN DOCUMENTS WERE SEIZED AS PER PANCHANAMA, BUT DURING SEARCH AS WELL AS IN POST SEARCH INQUIRY, THE APPELLANT EXPLAINED EACH OF THE SEIZED MATERIALS AND NO ADDITION HAS BEEN MADE ON THE BASIS OF DOCUMENTS SEIZED AND MENTIONED IN PANCHANAMA TO SUBSTANTIATE, THE CLAIM. THE APPELLANT WANTS TO DRAW, KIND ATTENTION OF THIS HON'BLE TRIBUNAL TO PAGE NO.L TO 9 (ANNEXURE - 1) OF THE PAPER BOOK. THE LEARNED A.O MADE ADDITION OF RS.75,00,000.00 AND RS.6,25,000 .00 IN THE HAND OF THE ASSESSEE TREATING IT AS UNDISCLOSED INCOME ON THE BASIS OF DOCUMENT SEIZED FROM THIRD PARTY NAMELY SHRI SHIVA SAI JAMI, PARTICULARLY WHEN, THE ASSESSEE HAD NO RELATIONSHIP WITH SRI SHIVA SAI JAMI AND THE DOCUMENTS SEIZED WERE MENTION ED IN THE PANCHANAMA RECORDED IN THE NAME OF SHIVA SAI JAMI AND IN HIS PACHANAMA THE NAME OF THE ASSESSEE IS NOT INCLUDED. SINCE, SHRI SHIVA SAI JAMI IS A DIFFERENT PERSON AND SEPARATE SEARCH WARRANT AND SEPARATE PANCHANAMA WAS DRAWN IN HIS CASE, DOCUMENTS SEIZED FROM HIS RESIDENCE CANNOT BE APPLIED AGAINST THE PRESENT APPELLANT TO MAKE ADDITION IN A PROCEEDING INITIATED U / S .153A OF THE ACT, PARTICULARLY WHEN, HE CATEGORICALLY DENIED THAT THIS DOCUMENT HAD NO RELATION WITH THE PRESENT APPELLANT. THAT, LAW IN THIS ASPECT IS WELL SETTLED BY THE HON'BLE ITAT, DELHI BENCH IN THE CASE OF TRILOK CHAND CHAUDHURY - VRS - ACIT, CENTRAL CIRCLE NEW DELHI IN ITA NO.5870/DEL/2017 THAT, EVEN IF SEARCH HAPPENS IN THE CASE OF THE ASSESSEE, A.O CANNOT INITIATE PROCEEDING U/S. 153A, IF INCRIMINATING MATERIAL IS FOUND DURING SEARCH OF OTHER PERSON. SINCE, FACTS OF THE PRESENT CASE IS SIMILAR TO THE FACTS IN THE CASE OF TRILOK CHAND CHAUDHURY. IN VIEW OF SETTLED PRINCIPLES OF LAW, THE ASSESSMENT SO MADE U/S.153A AND CONSEQUENTIAL ADDITIONS SO MADE THEREIN FOR ASSESSMENT YEARS:2013 - 14, 2014 - 15 AND 2015 - 16 BEING NOT SUSTAINABLE IN THE EYE OF LAW ARE LIABLE TO BE QUASHED IN THE INTEREST OF JUSTICE. 2D. THAT, WHEN THE LEARNED A.O HAS NO INCRIMINATING MATERIAL IN HIS HAND FOR ASSESSMEN T YEARS: 2013 - 14 TO 2015 - 16 AND NO ADDITION HAS BEEN MADE ON THE BASIS OF DOCUMENTS SEIZED, HE IS NOT AUTHORISED UNDER IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 1 3 THE LAW TO DISTURB THE COMPLETED ASSESSMENT. LAW ON THIS ISSUE IS WELL SETTLED BY THE HON'BLE ITAT, DELHI - F BENCH IN THE CASE OF SMT. SUN ITA BHAGCHANDKA - VS - ACIT IN ITA NO.3447/DEL/2016 THAT, WHEN DOCUMENTS SEIZED DURING SEARCH HAS NO REVENUE IMPLICATION AND DOES NOT INDICATE ANY UNDISCLOSED INCOME, IT CANNOT BE CONSTRUED AS INCRIMINATING MATERIAL, SO AS TO ATTRACT SECTION 153A OF THE ACT TO DISTURB COMPLETED ASSESSMENT. LAW IN THIS ASPECT IS WELL SETTLED BY THE HON'BLE ITAT, DELHI BENCH IN THE CASE OF DCIT - VERSUS - DHARAMPAL SATYAPAL LTD., THAT, IN CASE OF PROCEEDING U/S.153A ADDITION, IF ANY, TO BE MADE HAS TO BE MADE STRICTLY ON THE BASIS OF SEIZED DOCUMENTS. SINCE, NO INCRIMINATING MATERIAL EXISTS FOR THESE THREE YEARS, NO ADDITION CAN BE MADE. IN VIEW OF ABOVE JUDICIAL PRONOUNCEMENTS ADDITION OF RS.75,00,000.00 AND RS.6,25,000.00 MADE FOR ASSESSMENT YEAR:2013 - 14, TREATING AS UNDISCLOSED I NCOME AND CONFIRMED BY LEARNED CIT(A) BEING NOT SUSTAINABLE IN THE EYE OF LAW IS LIABLE TO BE DELETED IN THE INTEREST OF JUSTICE. LEGAL AROUND NO.3: 3A. THAT, THE IMPUGNED ORDER OF ASSESSMENTS WERE PASSED MUCH AFTER THE DATE OF LIMITATION. IN THE CASE IN HAND, ASSESSMENT ORDERS WERE TO BE PASSED BY 31.12.2017. THOUGH, IT IS MENTIONED IN THE FACE OF THE ASSESSMENT ORDER THAT, IT WAS PASSED ON 29.12.2017 BUT ACTUALLY IT WERE PASSED MUCH AFTER THE DATE OF LIMITATION. IF AT ALL, IT WERE PASSED ON 29.12.2017 , THEN WHAT WAS THE REASON FOR WHICH THE LEARNED A.O KEPT IT WITH HIM FOR 11 DAYS AND DESPATCHED IT MUCH AFTER THE DATE OF LIMITATION I.E. ON 08.01.2018 WHICH WAS SERVED ON THE ASSESSEE ON 15.01.2018. THE AUTHORITIES BELOW GROSSLY FAILED TO JUSTIFY WITH SU FFICIENT REASON REGARDING DELAY IN DESPATCH AND SERVICE OF ASSESSMENT ORDER. SINCE, THE AUTHORITIES BELOW HAVE NO REASON TO JUSTIFY THE DELAY, IT CANNOT BE SAID THAT THE IMPUGNED ORDER OF ASSESSMENT WERE PASSED ON 29.12.2017 I.E. WITHIN THE PERI OD OF LIMITATION. THE IMPUGNED ACTION OF THE AUTHORITIES BELOW CLEARLY JUSTIFIES THE FACT THAT, ASSESSMENT ORDERS WERE PASSED MUCH AFTER THE DATE OF LIMITATION, HENCE ARE BARRED BY LIMITATION. LAW IN THIS ASPECT IS WELL SETTLED THAT, IF THE AUTHORITIES BE LOW COULD NOT EXPLAIN THE DELAY IN SERVICE OF ASSESSMENT ORDER AFTER THE DATE OF LIMITATION, THE IMPUGNED ORDER OF ASSESSMENT SO PASSED ARE BARRED BY LIMITATION, HENCE ARE NOT SUSTAINABLE IN THE EYE OF LAW. (REFERENCE MAY BE DRAWN TO PAGE NO.144 AND 145 OF THE PAPER BOOK.) - IN SUPPORT OF THIS CONTENTION, THE APPELLANT MOST RESPECTFULLY RELIES ON FOLLOWING JUDICIAL PRONOUNCEMENTS SUCH AS; L. C.IT. & D.C.I.T. - VERSUS - BJ.N. HOTELS LTD., IN ITA NO.239/2009 (KARNATKA HIGH COURT). 2. NIDAN - VER SUS - ACIT ITAT CUTTACK IN ITA NO.32 TO 37/CTK/2018 3. PANKAJ SHARMA - VERSUS - DCIT IN ITA NO.3556 TO 3557/ DEL/2015 4. HON'BLE ORISSA HIGH COURT IN THE CASE OF DELHI FOOT WEAR - VS - SALES TAX OFFICER IN W.P.(C) NO.2971 OF 2009. IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 14 SUBMISSION ON MERIT OF A DDITIONS MADE OF RS.75,00,000.00 AND RS.6,25,000.00 FOR ASSESSMENT VEAR:2013 - 14 FOR THAT, WHILE EXAMINING DOCUMENTS SEIZED FROM SHRI SIVA SAI JAMI, THE LEARNED A.O. TREATED AS IF, THE APPELLANT/ASSESSEE HAS GIVEN RS.75,00,000.00 AS LOAN AND HAS EARNED RS. 6,25,000.00 AS INTEREST INCOME, FOR WHICH, WHILE COMPLETING ASSESSMENT U/S.153A, THE LEARNED A.O MADE ADDITION OF RS.75,00,000.00, TREATING IT AS UNDISCLOSED INCOME ON SUBSTANTIVE BASIS AND FURTHER, CALCULATED INTEREST AND MADE ADDITION OF RS.6,25,000.00, TREATING IT AS UNDISCLOSED INCOME FROM OTHER SOURCES AND TAXED ACCORDINGLY U/S.115BBE OF THE ACT. TO MAKE THESE ADDITIONS, HE TOOK HELP OF DOCUMENTS SEIZED FROM THE PREMISES OF SHRI SHIVA SAI JAMI. THE LEARNED A.O REFERRED TO PAGE NO.84 OF JRR - 26. (REFEREN CE MAY BE DRAWN TO PAGE NO.26, ANNEXURE - 4 AND PAGE NO.42, ANNEXURE - 5 OF THE PAPER BOOK.) DURING COURSE OF SEARCH, POST SEARCH INQUIRY AS WELL AS DURING COURSE OF ASSESSMENT PROCEEDING, SHRI SHIVA SAI JAMI HAS CATEGORICALLY AND REPEATEDLY EXPLAINED THE FACT THAT, THE FIGURES MENTIONED AT PAGE 84 OF JRR - 26 DOES NOT RELATE TO THE PRESENT APPELLANT KOTHAKOTA RAMA RAO AND HAS PROVIDED DETAILS OF THE PERSONS TO WHOM IT REPRESENTS. IT WAS ALSO EXPLAINED BY HIM THAT, HE HAS NEVER TAKEN ANY LOAN FROM THE APPELLANT A ND NO SUCH INTEREST WAS EVER PAID TO THE APPELLANT. FURTHER, NO CORRESPONDING EVIDENCE TO SUPPORT THE FINDINGS OF THE LEARNED A.O WAS RECOVERED FROM THE APPELLANT. THE APPELLANT ALSO DENIED OF HAVING ANY FINANCIAL TRANSACTION WITH JAMI SHIVA SAI. WHEN BOTH PARTIES DENIED OF HAVING ANY FINANCIAL TRANSACTION AND WHEN THE PERSON WHO IS IN POSSESSION OF SEIZED DOCUMENTS HAVE CATEGORICALLY AND REPEATEDLY EXPLAINED THAT, THE FACTS MENTION AT PAGE NO.84 DID NOT RELATE TO THE APPELLANT AND WHEN, THERE IS NO PROOF O F ANY ACTUAL FINANCIAL TRANSACTION FOUND EITHER DURING SEARCH OR EVEN POST SEARCH ENQUIRY, THE LEARNED A.O SHOULD NOT HAVE MADE ADDITION AND THE LEARNED C.I.T.(A) SHOULD NOT HAVE CONFIRMED THE ADDITION. THE IMPUGNED ADDITIONS BEING ILLEGAL AND WITHOUT ANY BASIS IS NOT SUSTAINABLE, AS SUCH NEEDS TO BE DELETED IN THE INTEREST OF JUSTICE . 2. THAT, IN VIEW OF PROVISIONS OF SECTION 132(4A), IT MAY BE SUBMITTED HERE THAT, THE DOCUMENTS SEIZED CAN BE PRESUMED TO BE TRUE, GENUINE AND CORRECT IN THE CASE OF THE PERSON SEARCHED I.E. SHIVA SAI JAMI AND HE HAS ADMITTED THAT, PAPERS BELONG TO HIM. ON THE BASIS OF PAPER FOUND WITH SOME THIRD PARTY, ADDITION CANNOT BE MADE IN THE HAND OF THE APPELLANT, PARTICULARLY WHEN, THERE IS NO BUSINESS CONNECTION BETWEEN THE APPE LLANT AND THAT THIRD PARTY. FURTHER, MERE ENTRIES IN THE DIARY REGARDING PAYMENT WERE NOT SUFFICIENT AS THERE WAS NO GUARANTEE THAT, THE ENTRIES WERE GENUINE IN ABSENCE OF ANY CORROBORATIVE EVIDENCE. LAW IN THIS ASPECT IS WELL SETTLED BY HON'BLE ITAT, HON' BLE HIGH COURTS AND HON'BLE SUPREME COURT THAT, IN ABSENCE OF ANY CORROBORATIVE EVIDENCE OF HAVING ANY ACTUAL FINANCIAL TRANSACTION AND WHEN, BOTH THE PARTIES HAVE DENIED EITHER TO HAVE RECEIVED/PAID ANY SUCH PAYMENT, NO ADDITION CAN BE MADE IN THE HAND OF THE APPELLANT. THE APPELLANT MOST RESPECTFULLY RELIES ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS; IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 15 1. SHRI VINIT RANAWAT - VRS - ACIT CENTRAL CIRCLE - L(L) ITAT PUNE(B) BENCH [ REFERENCE MAY BE DRAWN TO PARA - 55, PAGE 55 ] 2. ADDL. CIT - VRS - LATA MANGESKAR [97 ITR 696] BOMBAY HIGH COURT. 3. STRAPTEX(INDIA) P. LTD. - VRS - DCIT [84 ITD 320] MUMBAI. 4. CBI - VRS - V.C. SHUKLA [3SCC 410] SC. 5. PRARTHANA CONSTRUCTION (P) LTD. - VRS - DCIT [118 TAXMAN 112] AHD. 6. UNIQUE ORGANISERS & DEVELOPERS (P) LTD. - V S - DCIT[118 TAXMAN 147] AHD. IN VIEW OF THE ABOVE JUDICIAL PRONOUNCEMENTS, IT IS RESPECTFULLY PRAYED THAT, THE ADDITIONS SO MADE BEING NOT SUSTAINABLE IN THE EYE OF LAW NEEDS TO BE DELETED IN THE INTEREST OF JUSTICE. IN ADDITION TO THE ABOVE WRITTEN SUBMI SSIONS, THE LD. AR OF THE ASSESSEE SUBMITTED THAT THE AO SENT THE DRAFT ASSESSMENT ORDER BEFORE THE JCIT FOR TAKING APPROVAL U/S.153D OF THE ACT OF NEAR ABOUT 75 CASES ON 29TH DECEMBER, 2017 AND THE LD. JCIT APPROVED THE DRAFT ASSESSMENT ORDER ON THE SAME DATE, WHICH IS IMPOSSIBLE AND THE SAME IMPLIES THAT THE JCIT HAS NOT APPLIED HIS MIND PROPERLY BEFORE GIVING APPROVAL. HE ALSO SUBMITTED THAT THERE WAS NO ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. HOWEVER, THE AO HAS COMPLETED THE ASSES SMENT RELYING ON THE DOCUMENTS FOUND IN THE NAME OF JAMI SIVA SAI, WHO IS OTHER THAN SEARCHED PERSON, THEREFORE, THE ENTIRE ASSESSMENT MADE U/S.153A OF THE ACT IS NOT SUSTAINABLE IN THE EYES OF LAW. 9 . ON THE OTHER HAND, LD. DR HAS RELIED ON THE ORDERS OF LOWER AUTHORITIES AND FILED HIS WRITTEN SYNOPSIS WHICH READS AS UNDER : - ASSESSEE'S FIRST LEGAL GROUND: IT PERTAINS TO NON - APPLICATION OF MIND OF JOINT CIT, CENTRAL RANGE, BHUBANESHWAR WHILE ACCORDING APPROVAL U/S. IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 16 153D OF THE INCOME TAX ACT. IT MAY BE N OTED THAT NO SUCH GROUND WAS TAKEN UP BY THE ASSESSEE BEFORE THE CIT(A). I.) IT IS CLEAR FROM THE PLAIN LANGUAGE OF SECTION 153D THAT THE A.O. IS ONLY REQUIRED TO TAKE PRIOR APPROVAL OF SUPERVISORY OFFICER (ADDL./JT. CIT) BEFORE PASSING OF ASSESSMENT ORDER U/S. 153A R.W.S. 143(3)/144. THIS REQUIREMENT HAS BEEN FULFILLED IN THE PRESENT CASE. II.) WHEN THE WORDS OF A STATUTE ARE CLEAR, PLAIN AND UNAMBIGUOUS, THEN THE COURTS ARE BOUND TO GIVE EFFECT TO THAT MEANING IRRESPECTIVE OF THE CONSEQUENCES. IT IS SAID THAT THE WORDS THEMSELVES BEST DECLARE THE INTENTION OF THE LAW GIVER. (HON'BLE SUPREME COURT IN THE CASE OF UNION OF INDIA V. TATA CHEMICALS LTD. (363 ITR 658) (PARA - 22). III.) THE APPROVAL GRANTED UNDER SECTION 153D OF THE ACT BY THE SUPERVISORY OFFICER (ADDITIONAL/JT. CIT) IS MERELY AN ADMINISTRATIVE ORDER AND NO CIVIL OR PENALTY CONSEQUENCES FLOW FROM SUCH AN ORDER AGAINST THE ASSESSEE. THE APPROVAL OF SUPERVISORY OFFICER IS TOTALLY DISTINCT FROM THE ASSESSMENT ORDER AND NOT REQUIRED TO BE COMMUNICATED . THE APPROVAL GRANTED BY THE SUPERVISORY OFFICER (ADDITIONAL/JT. CIT) IS NOT JUSTICIABLE IN LAW. IV.) ONCE THE SUPERVISORY OFFICER IS AGREEING TO THE FINDING OF THE A.O. THEN HE IS NOT REQUIRED TO RECORD THE REASONS FOR SO AGREEING. IT IS FURTHER SUBMITT ED THAT THE RECORDING OF SANCTION OR APPROVAL IS NOT REQUIRED TO BE MADE IN A PARTICULAR MANNER. WHAT COULD BE CHALLENGED BEFORE THE TRIBUNAL IS WANT OF SANCTION AND NOT THE MANNER OF APPROVAL. V.) THE JUDGEMENT BY THE HONBLE MUMBAI TRIBUNAL RELIED UPON BY THE ASSESSEE IN THE CASE OF SMT. SHREELEKHA DAMANI (88 TAXMANN.COM 383) IS DISTINGUISHABLE ON FACTS. IN PARA - 10 OF THE DECISION (ON PAGE - 3), IT HAS BEEN MENTIONED THAT THE ADDL. CIT, CENTRAL RANGE - 7 HAD ASKED THE A.O. TO SUBMIT THE DRAFT ORDERS FOR APP ROVAL U/S. 153D ON OR BEFORE 24.12.2010. HOWEVER THE DRAFT ORDER WAS SUBMITTED ON 31.12.2010 THEREBY HE WAS LEFT WITH NO TIME TO ANALYSE THE ISSUES OF DRAFT ORDER ON ORDER. WITH THESE COMMENTS, THE DRAFT ORDER WAS APPROVED AS IT WAS SUBMITTED. THEREFORE IN SAID CONTEXT , IT WAS HELD BY THE HON'BLE MUMBAI ITAT THAT THE ADDL. CIT HAD NOT APPLIED HIS MIND WHILE GRANTING APPROVAL U/S. 153D. THUS THERE WAS DISAGREEMENT BETWEEN THE A.O. AND HIS SUPERVISORY OFFICER. HOWEVER IN THE PRESENT CASE, NO SUCH COMMENTS HAV E BEEN MENTIONED BY THE JOINT CIT, CENTRAL RANGE, BHUVANESHWAR WHILE ACCORDING APPROVAL ON 29.12.2017. IN THE PRESENT CASE, THE JOINT CIT, CENTRAL RANGE, BHUVANESHWAR HAS CONFIRMED & CONSENTED TO THE ACT OF THE A.O. AND SANCTIONED THE SAME. VI.) THE JUDGE MENT OF THE HONBLE CUTTACK TRIBUNAL RELIED UPON BY THE ASSESSEE IN THE CASE OF SMT. GEETARANI PANDA VS. ACIT (IT (SS)A NO.01/CTK/2017 DATED 05.07.2018 IS DISTINGUISHABLE ON FACTS. IN PARA - 11 OF THE DECISION (ON PAGE - 13), IT HAS BEEN MENTIONED THAT THE ADD L. CIT, CENTRAL RANGE - 1 HAD GIVEN A REMINDER TO THE A.O. TO SUBMIT THE DRAFT ORDERS FOR APPROVAL U/S. 153D ON OR BEFORE 23.03.2015. HOWEVER THE DRAFT ORDER WAS SUBMITTED ON 26.03.2015 THEREBY HE WAS LEFT WITH NO IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 17 TIME TO ENSURE THAT ALL THE POINTS IN THE AP PRAISAL REPORT, THE APPELLATE PROCEEDINGS, AUDIT INSPECTION ETC. HAD BEEN DULY TAKEN INTO ACCOUNT AND THE ENQUIRIES/INVESTIGATIONS REQUIRED TO BE MADE, WERE ACTUALLY MADE BY THE A.O. IN THE END, HE ALSO MENTIONED THAT THESE CASES WERE NEVER DISCUSSED WITH HIM. WITH THESE COMMENTS, THE DRAFT ORDER WAS APPROVED AS REQUIRED UNDER THE STATUTE U/S. 153D. THUS THERE WAS DISAGREEMENT BETWEEN THE A.O. AND HIS SUPERVISORY OFFICER. THEREFORE IN SAID CONTEXT, IT WAS HELD BY THE HON'BLE CUTTACK ITAT THAT THE ADDL. CIT HAD NOT APPLIED HIS MIND WHILE GRANTING MECHANICAL APPROVAL U/S. 153D (PARA - 25 ON PAGE - 24). HOWEVER IN THE PRESENT CASE, NO SUCH COMMENTS HAVE BEEN MENTIONED BY THE JOINT CIT, CENTRAL RANGE, BHUBANESHWAR WHILE ACCORDING APPROVAL. FURTHER IN THE CASE OF SMT . GEETARANI PANDA, THE A.O. WAS ASKED TO EXAMINE THE OPENING CASH - IN - HAND BEFORE DETERMINING TOTAL INCOME OF THE ASSESSEE. THIS ISSUE HAS BEEN DEALT BY THE HON'BLE CUTTACK TRIBUNAL IN PARA - 26 (ON PAGE - 25) OF THE APPELLATE ORDER. IN SAID CASE, THE A.O. HAD NOT COMMUNICATED HIS FINDINGS TO THE SUPERVISORY OFFICER REGARDING FURTHER ENQUIRIES MADE BY HIM. THEREFORE APPROVAL OF THE SUPERVISORY OFFICER U/S. 153D WAS HELD TO BE WITHOUT APPLICATION OF MIND. IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES, THE FIRST LEGAL GROUND TAKEN BY THE AR OF THE ASSESSEE IS REQUIRED TO BE REJECTED. ASSESSEE'S SECOND LEGAL GROUND: IT HAS BEEN ALLEGED THAT NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH THEREFORE THE AO COULD NOT HAVE INTERFERED WITH THE COMPLETED ASSES SMENTS. IT MAY BE NOTED THAT NO SUCH GROUND WAS TAKEN UP BY THE ASSESSEE BEFORE THE CIT(A). I.) KINDLY REFER TO PAGE 15 OF PAPER - BOOK DATED 22.07.2019 FILED BY THE AR OF THE ASSESSEE. IN REPLY TO QUESTION NO.14 OF STATEMENT U/S.132(4) RECORDED ON OATH, THE ASSESSEE HAD CATEGORICALLY ADMITTED THAT HE HAS GIVEN FRIENDLY HAND LOANS AS WELL AS TAKEN HAND LOANS WHICH WERE NOT RECORDED IN THE BOOKS OF ACCOUNT. COUPLED WITH THIS STATEMENT, ONE HAS TO ANALYZE THE ENTRIES FOUND IN JRR - 45, JRR - 37 & JRR - 26 I.E. DOCUME NTS SEIZED FROM THE RESIDENCE OF SHRI JAMI SIVA SAI. FURTHER SHRI JAMI SIVA SAI IS A FAMILY MEMBER OF THE ASSESSEE AS WELL RELATED TO HIM. THE RELATIONSHIP BETWEEN THE ASSESSEE AND SHRI JAMI SIVA SAI HAS BEEN DISCUSSED IN PARA - 2 ON PAGE - 2 OF THE ORDER OF C IT(A). RELIANCE IS PLACED ON THE DECISION OF HONBLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF RAKESH MAHAJAN VS. CIT (214 CTR 218) WHEREIN IT WAS HELD THAT 'IT IS A WELL SETTLED LAW THAT ADMISSION CONSTITUTES BEST PIECE OF EVIDENCE BECAUSE ADMISSION IS SELF - HARMING STATEMENT MADE BY THE MAKER BELIEVING IT TO BE BASED ON TRUTH. IT IS WELL KNOWN THAT NO ONE WILL TELL A LIE ESPECIALLY HARMING ONE'S OWN INTEREST UNLESS SUCH A STATEMENT IS TRUE'. II.) RELIANCE IS PLACED ON THE ORDER OF HON'BLE CUTTACK ITAT I N THE GROUP CASE I.E. SMT. N. ROJA FOR AY 2010 - 11 TO AY 2014 - 15 & AY 2016 - 17 IN IT(SS) A NOS. 101 - 106/CTK/2018 DATED 04.06.2020. ON PAGES 16 & 17 OF SAID ORDER DATED 04.06.2020, THE HON'BLE MEMBERS OF ITAT HAVE ANALYZED CLAUSE (VII) OF PARA - 37 RELATING TO THE DECISION OF IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 18 HON'BLE DELHI HIGH COURT IN THE CASE OF KABUL CHAWLA (380 ITR 573). FROM THE SAME, IT IS CLEAR THAT THE AO CAN INTERFERE WITH THE COMPLETED ASSESSMENTS IF THERE IS EITHER AN INCRIMINATING MATERIAL FOUND AT THE TIME OF SEARCH OR UNDISCLOSED INCOME OR PROPERTY IS DISCOVERED IN THE COURSE OF SEARCH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT. ON GOING THROUGH THE RECORDS, IT IS PALPABLE THAT CASH LOANS OF RS.75 LAKHS ARE NOT RECORDED IN T HE BOOKS OF ACCOUNT OF THE ASSESSEE. THE SOURCES OF SUCH LOANS HAVE REMAINED UNEXPLAINED. FURTHER THE INTEREST INCOME OF RS.6.25 LAKHS HAD NOT BEEN RECORDED IN THE BOOKS OF ACCOUNT AND WAS ALSO NOT OFFERED TO TAX. HENCE THE CASE OF ASSESSEE CLEARLY FALLS WITHIN THE AMBIT OF THE OBSERVATIONS OF THE HON'BLE DELHI HIGH COURT IN PARA - 37 OF SAID DECISION TOWARDS 'UNDISCLOSED INCOME'. III.) THE FACTS OF THE CASE FOR AY 2014 - 15 AND AY 2015 - 16 ARE TOTALLY DIFFERENT. KINDLY REFER TO PARA 5.2 ON PAGE 3 OF CIT(A)'S ORDER. IT IS CLEAR THAT THE CIT(A) ALLOWED RELIEF TO THE ASSESSEE SINCE HIS NAME DID NOT APPEAR IN THE SEIZED DOCUMENTS RELIED UPON BY THE AO. HENCE IT COULD NOT BE SAID THAT THE ASSESSEE HAD GIVEN HAND LOANS OR RECEIVED INTEREST INCOME IN THESE ASSESSMENT YEARS. IV.) IT WAS HELD BY THE HON'BLE DELHI HIGH COURT IN THE CASE OF SMT. DAYAWANTI VS CIT (75 TAXMANN.COM 308) THAT STATEMENTS RECORDED DURING THE SEARCH OPERATIONS COULD BE RELIED UPON TO MAKE ADDITION TO ASSESSEE'S INCOME. IT WAS HELD THAT WHERE INFE RENCE DRAWN IN RESPECT OF UNDECLARED INCOME WERE PREMISED ON MATERIALS FOUND AS WELL AS STATEMENTS RECORDED BY THE ASSESSEE'S SON, THE ADDITION SO MADE WAS JUSTIFIED. IV.) THE DOCUMENTS SEIZED FROM THE THIRD PARTY CAN BE USED AGAINST THE PERSON TO WHOM THE SE BELONG AS HELD BY HON'BLE PUNE ITAT IN THE CASE OF DHUNJIBHOY STUD & AGRICULTURAL FARM VS. DCIT (82 ITD 0018) (TM PUNE ITAT). IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES, THE SECOND LEGAL GROUND TAKEN BY THE AR OF THE ASSESSEE IS REQUIRED TO BE REJECTED. A SSESSEE'S THIRD LEGAL GROUND: IT HAS BEEN ARGUED THAT THE ASSESSMENT ORDER U/S.153A WAS PASSED ON 29.12.2017 BUT IT WAS DISPATCHED ON 08.01.2018 AND SERVED ON THE ASSESSEE ON 15.01.2018. HENCE IT WAS BARRED BY LIMITATION OF TIME. I.) THIS ISSUE HAS BEEN D ISCUSSED AT LENGTH BY THE CIT(A) IN PARAS 7.2 TO 7.9 ON PAGES 6 TO 13 OF THE APPELLATE ORDER FOR AY 2013 - 14. STRONG RELIANCE IS PLACED ON THE DISCUSSION AND FINDINGS OF CIT(A). II.) FURTHER THE HON'BLE CUTTACK ITAT VIDE ORDER DATED 10.06.2013 IN THE CASE O F SOPHIA STUDY CIRCLE VS. ITO IN ITA NO.286/CTK/2012 HAS HELD THAT THE ASSESSING OFFICER IS REQUIRED TO MAKE THE ASSESSMENT ORDER BEFORE THE TIME BARRING DATE AND NOT REQUIRED TO SERVE THE ORDER BEFORE THE TIME BARRING DATE. (PARA 6) THIS DECISION WAS NOT PLACED BEFORE THE HON'BLE JURISDICTIONAL ITAT DURING THE HEARING IN THE CASE OF M/S. NIDAN. THEREFORE AS SUCH, THE DECISION IN THE CASE OF M/S. NIDAN IS PER INCURIAM. IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 19 III.) THE OFFICIAL RECORDS DO NOT SHOW THAT THE ASSESSMENT ORDER WAS PASSED BY THE A.O. B EYOND THE LIMITATION PERIOD I.E. 31.12.2017. THE LEGISLATIVE INTENT SPECIFIED IN SECTIONS 143(2)/148 AND OTHER SECTIONS IS CLEAR WHEREIN WHICH IT IS STATED THAT THE A.O. SHOULD SERVE ON THE ASSESSEE' AS COMPARED TO THE LANGUAGE USED IN SECTION 153(1). THE LEGISLATURE IN ITS WISDOM HAS NOT USED THE TERM 'SHALL BE SERVED ON THE ASSESSEE' U/S. 153(1) FOR ANY ASSESSMENT ORDER OR DEMAND NOTICE. THE DECISION OF THE HON'BLE ANDHRA PRADESH HIGH COURT IN THE CASE OF KODICASU APPALASWAMY & SURYANARAYANA VS. COMMISSI ONER OF INCOME TAX (46 ITR 735) IS PERTINENT IN WHICH THEIR LORDSHIPS HELD THAT WHERE AN ORDER OF ASSESSMENT HAD BEEN PASSED WITHIN THE PERIOD OF LIMITATION THEN THE DATE ON WHICH ORDER OF ASSESSMENT AND DEMAND NOTICE WERE SERVED, WAS NOT RELEVANT. THE HON 'BLE GAUHATI HIGH COURT IN THE CASE OF RAMANAND AGARWALLA VS. COMMISSIONER OF INCOME - TAX (151 ITR 216) HELD THAT AS PER SUB - SECTION 1 OF SECTION 153 OF THE INCOME TAX ACT, 1961, THE A.O. IS REQUIRED TO PASS AN ORDER OF ASSESSMENT WITHIN THE LIMITATION PERI OD, IT DOES NOT REQUIRE THAT THE DEMAND NOTICE AND ASSESSMENT ORDER SHOULD ALSO BE ISSUED WITHIN THAT LIMITATION PERIOD. IN THE CASE OF K.U. SRINIVASA RAO VS. COMMISSIONER OF WEALTH - TAX (152 ITR 128), THE HON'BLE ANDHRA PRADESH HIGH COURT HELD THAT A N ORDE R OF ASSESSMENT WAS NOT AN ADMINISTRATIVE ORDER BUT A QUASI - JUDICIAL ORDER. SECTION 17A(1)(A) OF THE INCOME TAX ACT, 1957, REQUIRES THAT AN ORDER OF ASSESSMENT SHOULD BE MADE WITHIN THE PRESCRIBED PERIOD. IT DOES NOT FURTHER REQUIRE THAT IT SHOULD BE COMMU NICATED WITHIN THE PRESCRIBED PERIOD. AN ORDER MUST BE DEEMED TO HAVE BEEN MADE ON THE DATE ON WHICH IT IS PURPORTED TO HAVE BEEN MADE. THEREFORE, AN ASSESSMENT ORDER PURPORTING TO HAVE BEEN MADE ON 31ST MARCH, 1979, BUT SERVED ON THE ASSESSEE ON 20TH APRI L, 1979, IS DEEMED TO HAVE BEEN PASSED IN THE EYE OF LAW ON 31ST MARCH, 1979 AND NOT BARRED BY LIMITATION UNDER SECTION 17A(1)(A). IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES, THE THIRD LEGAL GROUND TAKEN BY THE AR OF THE ASSESSEE IS REQUIRED TO BE REJECTED. ASSESSEE'S GROUND RELATING TO ADDITION OF RS.75 LAKHS AND RS.6.25 LAKHS MADE FOR AY 2013 - 14 I.) THIS ISSUE HAS BEEN DISCUSSED BY THE A.O. IN PARA 6 ON PAGE 3 OF THE ASSESSMENT ORDER. THE STATEMENT OF SHRI JAMI SIVA SAI IN RELATION TO SEIZED DOCUMENTS IS R EPRODUCED BY THE A.O. IN PARA 4 ON PAGES 4 TO 6 OF THE ASSESSMENT ORDER. IT IS CLEAR THAT SHRI JAMI SIVA SAI FAILED TO EXPLAIN AS TO HOW THE ENTRIES ON JRR - 26, JRR - 45 AND JRR - 37 WERE RELATED TO SHRI Y. RAMA RAO IN SPITE OF THE FACT THAT NAME OF THE ASSESSE E WAS CLEARLY MENTIONED THEREIN. FURTHER 'RYD' REFERS TO PLACE RAYAGADA WHERE THE ASSESSEE WAS RESIDING. MOREOVER THE INITIALS (P) AND (I) STOOD FOR PRINCIPAL AMOUNT AND INTEREST AND NOT PARTY AND INVESTMENT RESPECTIVELY AS STATED BY HIM. SHRI JAMI SIVA SA I COULD NOT FURNISH ANY CORROBORATIVE EVIDENCE FOR HIS ASSERTION THAT AMOUNT OF RS.50 LAKHS WERE RECEIVED FROM DORB CUSTOMERS AND RS.25 LAKHS WAS RECEIVED FROM SHRI GANDHI THAKUR DAS, SURAT. THERE WAS NO PLAUSIBLE EXPLANATION AS TO WHY THE NAMES OF DORB CU STOMERS AND SHRI GANDHI THAKUR DAS, SURAT IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 20 DID NOT APPEAR IN SEIZED DOCUMENTS IF THE VERSION OF SHRI JAMI SIVA SAI WAS CORRECT. THE LEDGER EXTRACT OF DORB CUSTOMERS AND SHRI GANDHI THAKUR DAS WERE ALSO NOT PRODUCED BEFORE THE A.O. AS REGARDS THE QUESTION NO .90 (PAGE 6 OF THE ASSESSMENT ORDER) IN RELATION TO WORKING OF INTEREST @ 1,25% ON 75 LAKHS FOR 5 MONTHS (PAGES 89 TO 91 OF JRR - 37), SHRI JAMI SIVA SAI COULD NOT FURNISH ANY EXPLANATION FOR THE SAME. HE EXPRESSED HIS INABILITY TO EXPLAIN THE ENTRIES RELATI NG TO INTEREST WORKING WHICH WAS PAID TO THE ASSESSEE. II.) THIS ISSUE WAS DISCUSSED BY THE CIT(A) IN PARAS 5.5 TO 5.7 ON PAGES 4 & 5 OF THE APPELLATE ORDER. IT IS CLEAR THAT THESE DOCUMENTS WERE BOUND BOOKS IN THICK COVER AND COULD NOT BE REGARDED AS LOO SE SHEETS OF PAPER. THE ASSESSEE WAS REGULARLY ADVANCING CASH LOANS AS EVIDENCED BY DOCUMENTS SEIZED FROM HIS RESIDENCE. IN AY 2016 - 17, THE ASSESSEE HAD ADVANCED CASH LOANS TO SHRI B. RAM PRASAD (DIRECTOR OF GANDHI INSTITUTE OF ADVANCED COMPUTER & RESEARCH ) AMOUNTING TO RS. 31 LAKHS AS PER SEIZED CASH RECEIPTS. THUS DENIAL BY SHRI JAMI SIVA SAI WAS COLLUSIVE IN NATURE. III.) THE DOCUMENTS SEIZED FROM THE THIRD PARTY CAN BE USED AGAINST THE PERSON TO WHOM THESE BELONG AS HELD BY HON'BLE PUNE ITAT IN THE CASE OF DHUNJIBHOY STUD & AGRICULTURAL FARM VS. DCIT (82 ITD 0018) (TM PUNE ITAT). IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES, THIS GROUND TAKEN BY THE AR OF THE ASSESSEE IS REQUIRED TO BE REJECTED. IN ADDITION TO THE ABOVE WRITTEN SYNOPSIS, THE LD. D R SUBMITTED THAT DURING THE COURSE OF SEARCH AND SEIZURE PROCEEDINGS, DOCUMENTS FOUND INDICATE CLEARLY THAT THE ASSESSEE WAS ENGAGED IN MONEY LAUNDERING BUSINESS AND HE HAS USED CODE WORDS TO THE NAME OF THE BORROWERS. DURING THE SEARCH AND SEIZURE PROCEEDINGS AND PO ST SEARCH ENQUIRY, THE ASSESSEE AS WELL AS JAMI SIVA SAI COULD NOT GIVE CORRECT ANSWER IN RESPECT OF AMOUNT OF RS.75 LAKHS AS NOTED IN THE NOTE BOOK / DIARY. HE ALSO STATED THAT THE JCIT HAS RIGHTLY GIVEN THE APPROVAL U/S.153D OF THE ACT AND ONE COPY OF THE SEIZED DOCUMENTS WERE ALSO KEPT LYING WITH THE JCIT FOR HIS STUDY/WORKING PURPOSE, SO THAT H E CAN GIVE DIRECTIONS OR APPROVAL WITHOUT ANY UNNECESSARY DELAY. HE ALSO STATED THAT IN THE IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 21 INCOME TAX ACT U/S.153A/153B OF THE ACT, THE TIME LIMIT FOR PASSING THE ORDER HAS BEEN SPECIFIED WITHIN THE STIPULATED DATE BUT NO SERVICE OF THE ORDER TO THE ASSESSEE, WHICH HAS CLEARLY BEEN APPLIED BY THE AO AND HAS PASSED THE ORDER BEFORE THE END OF THE TIME PERIOD, THEREFORE, IT CANNOT BE SAID THAT THE ORDER PASSED BY THE AO IS BARRED BY LIMITATION. HE FURTHER SUBMITTED THAT THE LD. CIT(A) HAS RIGHTLY DEALT WITH THE ISSUE ON LEGAL GROUNDS IN WHICH HE HAS INCLUDED THE DETAILED JUDGMENTS OF THE VARIOUS COURTS IN FAVOUR OF THE REVENUE WHICH ARE CLEARLY APPLY IN THIS CASE. IN S UPPORT OF HIS CONTENTION, LD. DR RELIED ON THE FOLLOWING JUDGMENT : - I) N.ROJA, IT(SS)A NOS.101 - 106/CTK/2018 FURTHER THE LD. DR SUBMITTED THAT THE CASE LAWS RELIED ON BY THE LD. AR OF THE ASSESSEE ARE NOT APPLICABLE IN THE PRESENT CASE. 10 . AFTER HEARING B OTH THE SIDES AND PERUSING THE ENTIRE MATERIAL AVAILABLE ON RECORD AND THE ORDERS OF THE AUTHORITIES BELOW, WE FIND THAT THE LD. AR HAS TAKEN LEGAL GROUNDS THAT THE ORDER PASSED BY THE AO IS BARRED BY LIMITATION AS PRESCRIBED U/S.153D OF THE ACT. THIS ISSU E HAS RIGHTLY BEEN DEALT BY THE CIT(A), WHICH READS AS UNDER : - 5.5 I HAVE CAREFULLY EXAMINED THE ASSESSMENT ORDER AND SUBMISSIONS OF THE APPELLANT. I HAVE ALSO PERUSED THE SEIZED MATERIAL REFERRED TO BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. I FIND THAT JRR - 45 IS A DIARY. ON PAGE 84 OF THE DIARY THE NAME OF K. RAMA RAO FROM RAYAGADA IS CLEARLY MENTIONED. SIMILARLY, THE DATE OF WHICH THE CASH LOAN OF RS.75,00,000/ - AND OF RS.25,00,000/ - IS CLEARLY MENTIONED. ALSO INTEREST IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 22 PAID OF RS.6,25,000/ - ON 12.11.2012 IS ALSO CLEARLY MENTIONED. THE ALPHABETS 'P' & T REFER TO PRINCIPAL & INTEREST. 5.6 SIMILARLY, JRR - 26 IS A BOUND LEDGER BOOK. AGAIN ON PAGE 152 THE NAME OF K. RAMA RAO IS CLEARLY MENTIONED AND ALSO THAT THE LOAN OF RS.25,00,000/ - ON 0 6.12.2012 IS ALSO CLEARLY MENTIONED. 5.7 BOTH OF THE SEIZED DOCUMENTS ARE BOUND BOOKS IN THICK COVER AND CANNOT BE REGARDED AS LOOSE SHEETS OF PAPER. THERE IS NO DOUBT THAT K. RAMA RAO OF RAYAGADA IS THE APPELLANT, ON WHOSE RESIDENCE ALSO A SEARCH WAS CON DUCTED. IN THAT SEARCH, MONEY RECEIPTS ISSUED BY B. RAM PRASAD RAO, DIRECTOR OF M/S. GANDHI INSTITUTE OF ADVANCED COMPUTER AND RESEARCH (GIACR) AMOUNTING TO RS.31,00,000/ - WERE FOUND AND SEIZED. THIS CLEARLY SUGGESTS THAT THE APPELLANT IS REGULARLY PRACTIS ING IN THE MONEY LENDING BUSINESS AND ADVANCES CASH LOANS. THE MATERIAL SEIZED DURING THE COURSE OF SEARCH SPEAKS FOR ITSELF. JAMI SIVA SAI HAS STATED THAT OF RS.50,00,000/ - WAS RECEIVED FROM DORB CUSTOMERS BUT NO SUCH EVIDENCE WAS GIVEN EITHER OF THE TIME OF ASSESSMENT OR AT THE APPELLATE STAGE. MOREOVER, NAMES OF THE DORB CUSTOMERS ARE NOT MENTIONED ANYWHERE. SIMILARLY, JAMI SIVA SAI HAS STATED THAT OF RS.25,00,000/ - WAS RECEIVED FROM GANDHI THAKUR DAS OF SURAT. BUT HIS NAME DOES NOT APPEAR IN THE SEIZED MATERIAL. NAME OF K. RAMA RAO OF RAYAGADA APPEARS ON THE SEIZED MATERIAL. THE DENIAL ON ADVANCING OF LOAN AND OF INTEREST BY THE APPELLANT AS WELL AS JAMI SIVA SAI IS NOTHING BUT COLLUSIVE ACTION BETWEEN TWO OF THEM. THE APPELLANT HAS RELIED UPON CERTAIN C ASE LAWS, BUT THE FACTS OF THE CASE OF THE APPELLANT ARE DIFFERENT IN AS MUCH AS THE SEIZED MATERIAL IS THICKLY BOUND DIARY AND THE LEDGER BOOK WHICH CANNOT BE CALLED AS LOOSE SHEETS. CONSIDERING THESE ASPECTS, THE ADDITIONS MADE BY THE ASSESSING OFFICER O N ACCOUNT OF UNEXPLAINED LOAN OF R.S.75,00,000/ - AND ON ACCOUNT OF UNDISCLOSED INTEREST INCOME OF RS.6,25,000/ - ARE CONFIRMED AND THE GROUNDS OF APPEAL ARE DISMISSED. 6. GROUND NO. 4: - CHARGING OF INTEREST U/S.234A, 234B & 234C OF THE INCOME TAX A CT, 1961, MANDATORY, COMPENSATORY AND CONSEQUENTIAL IN NATURE. THE GROUND OF APPEAL IS DISMISSED. 7. ADDITIONAL GROUND: 7.1 IN THIS GROUND, THE APPELLANT HAS CONTESTED THAT THE EVEN THOUGH THE ASSESSING OFFICER HAS MADE THE ORDER ON 29.12.2017, THE ORDER HAS BEEN RECEIVED BY HIM ON 15.01.2018 AND THEREFORE THE ASSESSMENT ORDER IS BARRED BY LIMITATION OF TIME. IN THIS REGARD THE APPELLANT HAS RELIED UPON THE FOLLOWING JUDGMENTS: A. SHANTI LAI GODAWAT& OTHERS VS. ACIT (2009) 126 TTJ 135 (TNB.JODHPUR ). B. GOVERNMENT WOOD WORKS VS. STATE OF KERALA (1987) 69 STC 62 (KER) IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 23 C. MAHARAJA SHOPPING COMPLEX VS. DCIT CITATION NOT GIVEN. D. M/S. NIDAN, BERHAMPUR VS. ACIT, ITA NO. 109/CTK - 2018 (TRIB. CUTTACK) E. CIT VS. VEGETABLE PRODUCTS LTD.88 ITR 1 92 (SC) 7.2 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE APPELLANT. IT IS IMPORTANT TO NOTE HERE THAT THIS IS A SEARCH AND SEIZURE CASE IN WHICH STATUTORY APPROVAL U/S.!53D OF THE INCOME TAX ACT, 1961 OF JT. COMMISSIONER OF INCOME TAX IS REQUI RED. IT IS SEEN FROM THE ASSESSMENT RECORD THAT THE ASSESSING OFFICER HAS SENT THE DRAFT ORDER FOR APPROVAL TO JT. COMMISSIONER OF INCOME TAX ON 29.12.2017 VIDE HIS F. NO. ACIT/CC - 1/BHUBANESWAR/153D/2017 - 18, DATED 29.12.2017. THE JT. COMMISSIONER OF INCOME TAX ACCORDED HIS APPROVAL VIDE LETTER NO. F. NO. JCIT (CENTRAL)/ BHUBANESWAR/153D/CC - L/BHUBANESWAR/2017 - 18/3633, DATED 29.12.2017. THEREAFTER, THE ASSESSING OFFICER HAS ISSUED THE SAME ORDER ON 29.12.2017. THESE ARE UNDISPUTED FACTS, WHICH CLEARLY INDICAT E THAT THE ASSESSMENT WAS COMPLETED BEFORE THE TIME BARRING DATE. 7.3 IN ALL THE DECISIONS QUOTED BY THE APPELLANT, IT HAS BEEN HELD THAT THE ASSESSMENT ORDER HAS TO BE BEYOND THE POWER THE ASSESSING AUTHORITY, OTHERWISE, THERE IS LIKELIHOOD OF CHAN GES BEING MADE IS THE ASSESSMENT ORDER. IN THIS CASE, IT IS NOT THE CONTENTION OF THE APPELLANT THAT THE ORDER HAS BEEN CHANGED FROM THE TIME WHEN IT WAS MADE TO THE TIME WHEN IT WAS SERVED ON THE APPELLANT. WHEN THE ASSESSING OFFICER SENDS THE DRAFT ORDER TO JT. COMMISSIONER OF INCOME TAX, FOR STATUTORY APPROVAL U/S.L53D OF THE INCOME TAX ACT, 1961, THE ORDER IS BEYOND HIS POWER, AS AFTER THE APPROVAL, THE ASSESSING OFFICER, .HAS TO ISSUE THE SAME ORDER. 7.4 AS PER THE PROVISIONS OF THE SECTIONL53B O F THE INCOME TAX ACT, 1961, THE ASSESSING OFFICER HAS TO MAKE THE ORDER AND NOT SERVE THE ORDER ON THE APPELLANT, BEFORE THE TIME BARRING DATE. I AM SUPPORTED IN THIS REGARD BY THE DECISION OF HON'BLE HIGH COURT AT CALCUTTA IN THE CASE OF CIT VS BINANI IND USTRIES LTD REPORTED IN (2015) 59 TAXMANN.COM 389 CAL.). THE HEAD NOTES ARE AS BELOW: - 'SECTION 143, READ WITH SECTION 153, OF THE INCOME - TAX ACT, 1961 - ASSESSMENT GENERAL (ASSESSMENT BARRED BY LIMITATION) - ASSESSMENT YE AR 2002 - 03 - ASSESSING OFFICER PASSED ASSESSMENT ORDER ON 31 - 3 - 2005 WHICH WAS RECEIVED BY ASSESSEE ON 13 - 4 - 2005 - ASSESSEE CONTENDED THAT SAME WAS BARRED BY LIMITATION AND AS SUCH PERVERSE - IT WAS FOUND THAT REPRESENTATIVE OF ASSESSEE, VISITED OFFICE OF D EPARTMENT AND FOUND ASSESSMENT ORDER WAS READY TO BE SERVED UPON HIM - THERE WAS ALSO NO INDICATION THAT ASSESSING OFFICER REVISED HIS ASSESSMENT ORDER. FURTHER, PROBABILITY OF ORDER BEING MADE AND READY TO BE COLLECTED BY REPRESENTATIVE OF ASSESSEE AS ON 1 - 04 - 2005, COULD NOT BE RULED OUT WHETHER, THEREFORE, ASSESSMENT ORDER COULD NOT BE TREATED AS BARRED BY LIMITATION HELD, YES [PARA 9] [IN FAVOUR OF REVENUE].' IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 24 IN THE CASE OF BINANI INDUSTRIES LTD (SUPRA), THE IMPORTANT CONSIDERATION BEFORE THE HON'BLE HI GH COURT WAS THAT WHETHER THE ASSESSING OFFICER REVISITED THE SAID ORDER AFTER 31.12.2005. IN THIS CASE, IT IS NOT THE CONTENTION OF THE APPELLANT THAT THE ASSESSING OFFICER HAS REVISITED THE ORDER AFTER 31.12.2016. 7.5 FURTHER, IN THE FOLLOWING CASES, TH E HON'BLE HIGH COURTS HAVE HELD THAT THE ASSESSING OFFICER IS REQUIRED TO COMPLETE THE ASSESSMENT BEFORE THE TIME BARRING DATE AND HE IS NOT REQUIRED TO SERVE THE ASSESSMENT ORDER BEFORE THE TIME BARRING DATE. THE HEAD NOTES IN THESE CASES ARE BELOW: A. E STHURI ASWATHIAH VS. COMMISSIONER OF INCOME - TAX [1963] 50 ITR 764 (MYSORE) SECTION 34(3) OF THE INDIAN INCOME - TAX ACT, 1922 - ASSESSMENT - TIME LIMIT FOR COMPLETION OF - ASSESSMENT YEAR 1955 - 56 - ASSESSMENT WAS MADE ON 29 - 2 - 1960 AND ASSESSMENT ORDER SERVED ON ASSESSEE ON 4 - 4 - 1960 - WHETHER SECTION 34(3) ONLY REQUIRES THAT NO ORDER OF ASSESSMENT SHOULD BE MADE AFTER EXPIRY OF FOUR YEARS FROM YEAR IN WHICH INCOME WAS FIRST ASSESSABLE AND, THEREFORE, ORDER MADE WITHIN FOUR YEARS WOULD NOT BE TIME BARRED UNDER SECTION 34(3) EVEN THOUGH IT WAS COMMUNICATED TO ASSESSEE AFTER EXPIRY OF FOUR YEARS - HELD, YES. B. RAMANAND AGARWALLA VS. COMMISSIONER OF INCOME - TAX [1984] 17 TAXMAN 305 (GAUHATI) SECTION 153(L)(A)(I) OF THE INCOME - TAX ACT, 1961 ASSESSMENT TIME LIMIT FOR COMPLETION OF FOR ASSESSMENT YEAR 1963 - 64, ITO MADE ASSESSMENT ON 16 - 3 - 1968 RELEVANT DEMAND NOTICE DATED 20 - 3 - 1968 WAS ISSUED BY ITO ON 30 - 3 - 1968 AND SERVED ON ASSESSEE ON 13 - 4 - 1968 WHETHER, ASSESSMENT WAS COMPLETED ON 16 - 3 - 1968 AND AS SUCH WAS N OT BARRED BY LIMITATION HELD, ON FADS, YES. C. INDIA FERRO ALLOY INDUSTRY (P.) LTD. VS. COMMISSIONER OF INCOME - TAX [1993] 202ITR 671 (CAL.J WHAT IS REQUIRED FOR COMPLETION OF THE ASSESSMENT IS THE DETERMINATION OF THE TAX LIABILITY AND ISSUE OF DEMAN D NOTICE BUT CERTAINLY NOT THE SERVICE OF THE SAME ON THE ASSESSEE. ACCORDINGLY, IT SHOULD, THEREFORE, BE TAKEN THAT THE ASSESSMENT WAS COMPLETED ON 15 - 10 - 1980. D. COMMISSIONER OF INCOME - TAX (CENTRAL), COCHIN VS. T.O. ABRAHAM & CO. [2011] 12 TAXMANN.COM 433 (KERALA) THE REQUIREMENT OF SECTION 158BE IS SATISFIED IF THE DEPARTMENT ESTABLISHES THAT THE BLOCK ASSESSMENT IS COMPLETED BEFORE THE LAST DATE PROVIDED FOR COMPLETION OF ASSESSMENT UNDER SECTION 158BE WHICH IN THE IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 25 IN STANT CASE WAS 31 - 5 - 1997. IT IS THE SETTLED POSITION PARTICULARLY THROUGH THE DECISION OF THE SUPREME COURT IN B. J. SHELAT V. STATE OF GUJARAT AIR 1978 SC1109 THAT FOR VALIDITY OF THE ASSESSMENT THERE IS NO NEED FOR THE DEPARTMENT TO SERVE THE ASSESSMENT ORDER ON THE ASSESSEE BEFORE THE PRESCRIBED PERIOD OF LIMITATION PROVIDED FOR COMPLETION OF ASSESSMENT. THE TEST LAID DOWN BY THE SUPREME COURT IN THE ABOVE CASE IS THAT IN ORDER TO ESTABLISH THAT THE ASSESSMENT HAS BEEN COMPLETED WITHIN TIME, THE DEPARTME NT SHOULD HAVE COMPLETED THE PROCEEDING AND DISPATCHED IT SO THAT THE PROCEEDING IS OUT OF THE CONTROL OF THE OFFICER ISSUING IT. IN THE INSTANT CASE, ADMITTEDLY, THE ASSESSMENT WAS APPROVED BY THE COMMISSIONER BY PROCEEDINGS DATED 23 - 5 - 1997 AS REQUIRED UN DER SECTION 158BG. THE OFFICE OF THE ASSESSING OFFICER ALSO DISPATCHED COPY OF THE ASSESSMENT ORDER ALONG WITH SIGNED COPY OF NOTICE OF DEMAND. EVEN THOUGH THE COPY OF THE ASSESSMENT ORDER SENT TO THE ASSESSEE WAS NOT SIGNED BY THE OFFICER, COPY OF THE ASS ESSMENT ORDER SO DISPATCHED ALONG WITH NOTICE OF DEMAND SIGNED BY THE ASSESSING OFFICER ON 30 - 5 - 1997 WAS RECEIVED BY THE ASSESSEE ON 2 - 6 - 1997. IN FACT, A MODIFIED COPY OF THE ASSESSMENT ORDER WAS SENT BY THE ASSESSING OFFICER ON 2 - 6 - 1997 WHEREIN THE APPROV AL OF DRAFT ASSESSMENT BY THE COMMISSIONER, WHICH IS THE REQUIREMENT OF SECTION 158BG, WAS ALSO STATED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. THE ASSESSMENT WAS A VERY ELABORATE ORDER AND IT CONTAINED SIXTY PAGES. THE ASSESSEE DID NOT DENY THE A PPROVAL OF THE DRAFT OF THE ASSESSMENT ORDER BY THE COMMISSIONER ON 23 - 5 - 1997, WHICH WAS, IN FACT, DONE AFTER HEARING THE ASSESSEE ON THAT DATE. THEREFORE, THERE WAS NO DISPUTE ON THE FINALISATION OF THE DRAFT ASSESSMENT BY THE ASSESSING OFFICER WITH THE A PPROVAL OF THE COMMISSIONER ON 23 - 5 - 1997 WHICH WAS EIGHT DAYS PRIOR TO THE LAST DATE PROVIDED FOR COMPLETION OF ASSESSMENT. ADMITTEDLY, THE ASSESSING OFFICER DISPATCHED THE SIGNED NOTICE OF DEMAND ALONG WITH AN UNSIGNED COPY OF THE ASSESSMENT ORDER TO THE ASSESSEE ON 30 - 5 - 1997, WHICH WAS RECEIVED B Y THE ASSESSEE ON 2 - 6 - 1997. THE SIGNED COPY OF NOTICE OF DEMAND WAS DISPATCHED TO THE ASSESSEE BY THE DEPARTMENT BEFORE THE LAST DATE FOR COMPLETION OF ASSESSMENT AND IT CONTAINED TAX DEMAND WHICH WAS THE SAME AMO UNT CONTAINED IN THE SIGNED ASSESSMENT ORDER DISPATCHED BY THE ASSESSING OFFICER ON 2 - 6 - 1997. GOING BY THE NATURE OF ASSESSMENT, WHICH WAS A VOLUMINOUS DOCUMENT WITH FULL FACTS AND FIGURES, NOBODY COULD HAVE A DOUBT THAT IT COULD NOT HAVE BEEN PREPARED WIT HIN A PERIOD OF ONE OR TWO DAYS AFTER SENDING NOTICE OF DEMAND. THE MERE FACT THAT THE FIRST COPY OF THE ASSESSMENT ORDER SENT TO THE ASSESSEE DID NOT CONTAIN THE SIGNATURE OF THE ASSESSING OFFICER DID NOT GIVE RISE TO A PRESUMPTION THAT THE ORIGINAL ASSES SMENT ORDER WAS NOT SIGNED BY THE ASSESSING OFFICER. ADMITTEDLY, THE ASSESSMENT WAS MADE IN SEVERAL COPIES AND ONE OF THE COPIES WAS SENT TO THE ASSESSEE ALONG WITH COPY OF DEMAND NOTICE. IT MAY SO HAPPEN THAT THE DISPATCH SECTION WITHOUT NOTICING THE OMIS SION WOULD HAVE SENT AN EXTRA COPY OF ASSESSMENT ORDER WHICH WAS NOT SIGNED. HOWEVER, THE SAME DID NOT MEAN THAT THE ORIGINAL ASSESSMENT WAS NOT SIGNED BY THE ASSESSING OFFICER WITH REFERENCE TO WHICH ONLY HE PREPARED THE NOTICE OF DEMAND WHICH WAS ADMITTE DLY SIGNED AND DISPATCHED TO THE ASSESSEE WITHIN THE PERIOD OF LIMITATION. THE ADDITIONAL FEATURE THAT IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 26 SUPPORTED THE CASE OF THE DEPARTMENT WAS THAT THE DRAFT ASSESSMENT PREPARED AND FINALIZED BY THE ASSESSING OFFICER WAS APPROVED BY THE COMMISSIONER AFTER GIVING A HEARING TO THE ASSESSEE ON 23 - 5 - 1997 AND, SO MUCH SO THE ASSESSEE COULD NOT EVEN CONTEND THAT A DRAFT ASSESSMENT WAS NOT FINALIZED WITHIN THE PERIOD OF LIMITATION. EVEN THOUGH RECORDS WERE PRODUCED BEFORE THE TRIBUNAL AND VERIFIED BY THE TRIBUNAL , THERE WAS NO FINDING THAT THE ASSESSMENT ORDER SIGNED ON 27 - 5 - 1997 WAS NOT AVAILABLE ON FILE. IT COULD NOT ALSO BE ASSUMED THAT THE ASSESSING OFFICER PRE DATED THE ASSESSMENT ORDER BECAUSE THE DRAFT ASSESSMENT WAS ALREADY APPROVED BY THE COMMISSIONER ON 23 - 5 - 1997 AFTER HEARING THE ASSESSEE AND THERE WAS NO CASE OF ANY DEVIATION - MADEFROM THE APPROVED DRAFT WHILE ISSIDNG THE FINAL ORDER. FURTHER, THE NOTICE OF DEMAND WHICH WAS ISSUED BASED ON THE TAX DETERMINED ON THE ASSESSMENT ORDER WAS DISPATCHED TO THE ASSESSEE ON 30 - 5 - 1997 WELL BEFORE THE LAST DATE FOR COMPLETION OF THE ASSESSMENT. [PARA 5] THE WHOLE PURPOSE OF SECTION 292B IS NOT TO DEFEAT ON TECHNICALITIES THE OBJECT OF THE STATUTE, THAT IS, TO ASSESS AND COLLECT THE TAX LEGITIMATELY DUE UNDER THE AC T. THE INSTANT CASE WAS A CASE WHERE ELABORATE EVIDENCE WAS COLLECTED IN THE COURSE OF SEARCH AND THE PROCESSING OF THE DOCUMENT TOOK SEVERAL MONTHS BEFORE COMPLETION OF THE BLOCK ASSESSMENT. THE ACCOUNTANT MEMBER RIGHTLY HELD THAT ON HYPER TECHNICALITY A PROPER ASSESSMENT COMPLETED STRICTLY OBSERVING THE PROVISIONS OF THE ACT SHOULD NOT BE HELD INVALID. THE EVIDENCE ON RECORD ESTABLISHED BEYOND DOUBT THAT A DRAFT ASSESSMENT WAS APPROVED BY THE COMMISSIONER UNDER SECTION 158BG ON 23 - 5 - 1997 AND THE ASSESSMEN T WAS, IN FACT, .FINALIZED BY THE ASSESSING OFFICER ON 27 - 5 - 1997 AS BORNE OUT BY THE RECORDS. THE FACT THAT THE FIRST COPY OF THE ASSESSMENT ORDER SENT TO THE ASSESSEE ON 30 - 5 - 1997 ALONG WITH SIGNED VALID NOTICE OF DEMAND ISSUED UNDER SECTION 156 DID NOT C ONTAIN THE SIGNATURE OF THE ASSESSING OFFICER DID NOT INVALIDATE THE ASSESSMENT WHICH WAS VALIDLY COMPLETED ON 27 - 5 - 1997 WITHIN THE PERIOD OF LIMITATION PROVIDED UNDER SECTION 158BE. THEREFORE, THE APPEAL WAS TO BE ALLOWED BY REVERSING THE ORDER OF THE TRI BUNAL. [PARA 6]. 7.6 FURTHER, HON'BLE JURISDICTIONAL TRIBUNAL, IN THEIR ORDER DTD. 10.06.2013 IN THE CASE OF SOPHIA STUDY CIRCLE VS. ITO IN ITA NO.286/CTK/2012 HAS HELD THAT THE ASSESSING OFFICER IS REQUIRED TO MAKE THE ASSESSMENT ORDER BEFORE THE TI ME BARRING DATE AND IS NOT REQUIRED TO SERVE THE ORDER BEFORE THE TIME BARRING DATE. THE RELEVANT PORTION OF THE DECISION IS AS BELOW: 'WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AT THE OUTSET, A PERUSAL OF THE PROVISIONS OF SECTION 153 OF THE ACT SHOWS T HAT THE WORD USED IN THE SAID SECTION 'MAKE'. SIMILARLY, A PERUSAL OF THE PROVISO TO SECTION 147 OF THE ACT SHOWS THAT THE WORD USED AS 'NO ACTION SHALL BE TAKEN'. SIMILARLY, IN THE PROVISIONS OF SECTION 148 OF THE ACT, THE WORDS USED ARE 'SHALL SERVE ON T HE ASSESSEE'. SIMILARLY, IN THE PROVISIONS OF SECTION 149 OF THE ACT, THE WORDS USED ARE 'ISSUE TO THE ASSESSEE. THUS, EACH WORD USED IN IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 27 EACH SECTION HAS A DIFFERENT PURPOSE AND DIFFERENT MEANING. 'MADE' CANNOT BE TREATED ON THE SAME FOOTING AS SERVED. TH E FACT THAT THE WORD USED IS 'MADE' IN SECTION 153 SHOWS THAT THE ASSESSMENT ORDER SHOULD BE MADE ON OR BEFORE THE SAID DATE. IT DOES NOT MEAN THAT IT SHOULD BE SERVED. ON THIS GROUND ITSELF AS WE FIND THAT THE DECISION OF THE COORDINATE BENCH HAS ERRONEOU SLY LAID DOWN THE LAW ON THIS ISSUE IF THE WORD 'MADE' IS GIVEN THE MEANING SERVED THEN THE SECTION ITSELF WOULD BECOME UNWORKABLE AND IT WOULD MAKE ALL ASSESSMENT ORDERS MADE ON THE LAST DAY ILLEGAL. IN THE CIRCUMSTANCES, RESPECTFULLY FOLLOWING THE PRINCI PLES AND THE RATIO LAID DOWN BY THE HON'BLE MADRAS HIGH COURT IN THE CASE OF CIT VS. HI - TECH ARAL LTD. (2010) 321ITR 477, WE DIFFER FROM THE DECISION TAKEN BY THE COORDINATE BENCH IN THE CASE OF DURGA CONDEV PVT. LTD. (SUPRA) AS ALSO THE DECISION OF SHANTI LAI GODAWAT & ORS. VS. ACIT (2009) 126 TTJ (JODH) 135. HERE, WE MAY SPECIFICALLY MENTION THAT IN THE CASE OF DURGA CONDEV PVT. LTD. (SUPRA), THOUGH ONE OF US IS CO SIGNATORY IN THAT ORDER STILL WE DIFFER FROM THE SAID ORDER AS THERE IS NO BRAVERY IN PERP ETUATING AN ERROR IN LAW. THE FACT THAT THE ASSESSMENT ORDER IS DATED 31.12.2010 AND THERE IS NO EVIDENCE AVAILABLE TO SHOW THAT THIS ORDER WAS NOT PASSED ON 31.12.2010 MAKES THIS ORDER SUSTAINABLE IN LAW AS UNDER THE PROVISIONS OF THE GENERAL CLAUSES ACT A GOVERNMENT DOCUMENT CANNOT BE QUESTIONED UNLESS AND UNTIL SUBSTANTIAL EVIDENCE HAS BEEN PRODUCED TO DISLODGE THE VERACITY OF THE SAME. UNDER THESE CIRCUMSTANCES, AS IT IS NOTICED THAT THE ASSESSMENT ORDER IS DATED 31.12.2010 AND AS NO EVIDENCE HAS BEEN PRODUCED TO SHOW OR TO PROVE THE ALLEGATION THAT THE ORDER WAS BACK DATED, THE TECHNICAL GROUND RAISED BY THE ASSESSEE STANDS REJECTED.' IT APPEARS THAT, THE DECISION OF HON'BLE JURISDICTIONAL TRIBUNAL IN THE CASE OF SOPHIA STUDY CIRCLE WAS NOT PLACED BEF ORE THE HON'BLE TRIBUNAL, DURING THE HEARING IN THE CASE OF M/S.NIDAN. THEREFORE, AS SUCH, THE DECISION IN THE CASE OF M/S.NIDAN IS PER INCURIAM. 7.7 FURTHER, THE PLAIN READING OF SECTION 153B OF INCOME TAX ACT, 1961 CLEARLY INDICATES THAT THE ASSESS ING OFFICE IS REQUIRED TO MAKE THE ORDER BEFORE THE TIME BARRING DATE. WHEN THE LANGUAGE OF A STATUTE IS CLEAR AND UNAMBIGUOUS, THE COURTS ARE TO INTERPRET THE SAME IN ITS LITERAL SENSE AND NOT TO GIVE A MEANING WHICH WOULD CAUSE VIOLENCE TO THE PROVISIONS OF THE STATUTE, AS HELD IN BRITANIA INDUSTRIES LTD. VS. C.I.T. (2005) 278 - ITR - 546 AT 547 (SC). IT IS A WELL SETTLED PRINCIPLE OF LAW THAT THE COURT CANNOT READ ANYTHING INTO A STATUTORY PROVISION OR STIPULATE A CONDITION, WHICH IS PLAIN AND UNAMBIGUOUS. A STATUTE IS AN EDICT OF THE LEGISLATURE. THE LANGUAGE EMPLOYED IN A STATUTE IS THE DETERMINATIVE FACTOR OF LEGISLATIVE INTENTION. WHILE INTERPRETING A PROVISION THE COURT ONLY INTERPRETS THE LAW AND CANNOT LEGISLATE IT. IF A PROVISION OF LAW IS INCORRECT, IT IS FOR THE LEGISLATURE TO AMEND, MODIFY OR REPEAL IT, IF DEEMED NECESSARY. LEGISLATIVE CASUS OMISSUS CANNOT BE SUPPLIED BY JUDICIAL INTERPRETATIVE PROCESS. WHEN THE PROVISIONS OF THE ACT ARE CLEAR AND UNAMBIGUOUS, THE DECISION OF HON'BLE SUPREME COURT I N THE CASE OF VEGETABLE PRODUCTS LTD. WILL NOT APPLY, AS HELD BY HON'BLE SUPREME IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 28 COURT IN THE CASE OF BIMAL KISHORE PALIWAL'VS. CWT (2017) 87 TAXMANN.COM 40 (SC). THE RELEVANT PORTION OF THE JUDGMENT IS REPRODUCED BELOW: 'LEARNED COUNSEL FOR THE APPELLANTS HAS FURTHER SUBMITTED THAT IN THE EVENT THERE ARE MORE THAN ONE METHODS OF VALUATION OF AN ASSET OF AN ASSESSEE, THE METHOD UNDER WHICH THE VALUATION IS IN FAVOUR OF ASSESSEE HAS TO BE ACCEPTED. HE HAS RELIED ON THE JUDG MENT OF THIS COURT IN CIT V. VEGETABLE PRODUCTS LTD 1197 3J 88 ITR 192. THIS COURT IN PARAGRAPH 6 OF THE JUDGMENT HAS LAID DOWN THE FOLLOWING: THERE IS NO DOUBT THAT THE ACCEPTANCE OF ONE OR THE OTHER INTERPRETATION SOUGHT TO BE PLACED ON SECTION 271(1)(A )(I) BY THE PARTIES WOULD LEAD TO SOME INCONVENIENT RESULT, BUT THE DUTY OF THE COURT IS TO READ THE SECTION, UNDERSTAND ITS LANGUAGE AND GIVE EFFECT TO THE SAME. IF THE LANGUAGE IS PLAIN, THE FACT THAT THE CONSEQUENCE OF GIVING EFFECT TO IT MAY LEAD TO SO ME ABSURD RESULT IS NOT A FACTOR TO BE TAKEN INTO ACCOUNT IN INTERPRETING A PROVISION. IT IS FOR THE LEGISLATURE TO STEP IN AND REMOVE THE ABSURDITY. ON THE OTHER HAND, IF TWO REASONABLE CONSTRUCTIONS OF A TAXING PROVISION ARE POSSIBLE THAT CONSTRUCTION WH ICH FAVOURS THE ASSESSEE MUST BE ADOPTED. THIS IS A WELL ACCEPTED RULE OF CONSTRUCTION RECOGNISED BY THIS COURT IN SEVERAL OF ITS DECISIONS. HENCE ALL THAT WE HAVE TO SEE IS, WHAT IS THE TRUE EFFECT OF HE LANGUAGE EMPLOYED IN SECTION 271(L)(A)(I). IF WE FI ND THAT LANGUAGE TO BE AMBIGUOUS OR CAPABLE OF MORE MEANINGS THAN ONE, THEN WE HAVE TO ADOPT THAT INTERPRETATION WHICH FAVOURS THE ASSESSEE, MORE PARTICULARLY SO BECAUSE THE PROVISION RELATES TO IMPOSITION OF PENALTY. ' THE PROPOSITION WHICH WAS LAID DOWN BY THIS COURT WAS THAT IF TWO REASONABLE CONSTRUCTIONS OF TAXING STATUTE ARE POSSIBLE, THAT CONSTRUCTION WHICH FAVOURS THE ASSESSEE MUST BE ADOPTED. THE ABOVE PROPOSITION CANNOT BE READ TO MEAN THAT UNDER TWO METHODS OF VALUATION IF THE VALUE WHICH IS FAV OURABLE TO ASSESSEE 'MOULD BE ADOPTED. HERE IN THE PRESENT CASE, THE PROVISIONS OF SECTION 7 ARE NEITHER UNAMBIGUOUS NOR LEAD TO TWO CONSTRUCTIONS. THE CONSTRUCTION OF SECTION 7 IS CLEAR AS HAS ALREADY BEEN ELABORATELY CONSIDERED BY THIS COURT IN THE JUDGM ENT OF THIS COURT IN JUGGI LAI KAMLAPAT BANKERS (SUPRA) 7.8 FURTHER, HON'BLE SUPREME COURT HAS GIVEN TWO LANDMARK JUDGEMENTS ON RULES OF CONSTRUCTION. IN THE CASE OF ADDL.CIT VRS SURAT ART SILK CLOTH MANUFACTURERS ASSOCIATION REPORTED IN 121 ITR 1 (SC) (PARAGRAPH 12), IT HAS BEEN HELD THAT WHERE THE MEANING OF STATUTORY PROVISION IS PLAIN, THE SAID MEANING MUST BE GIVEN EFFECT TO. WHERE THE LANGUAGE OF STATUTORY PROVISION IS AMBIGUOUS AND CAPABLE OF MORE THAN ONE CONSTRUCTIONS, THAT CONSTRUCTION MUS T BE ADOPTED WHICH WILL GIVE MEANING AND EFFECT TO ALL THE OTHER PROVISIONS OF ENACTMENT RATHER THAN WHICH WILL MAKE ONE OR MORE OF THE PROVISIONS 'OTIOSE'. FURTHER, IN THE CASE OF CIT VRS J.H. GOTTA (1985) 156 ITR 323 (SC), HON'BLE SUPREME COURT HAS HELD THAT WHERE THE PLANE LITERAL INTERPRETATION OF A STATUTORY PROVISION PRODUCED A MANIFESTLY UNJUST RESULT WHICH COULD NEVER HAVE BEEN INTENDED BY THE LEGISLATURE, THE COURT MIGHT MODIFY THE LANGUAGE IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 29 USED BY THE LEGISLATURE SO AS TO ACHIEVE THE INTENTION OF THE LEGISLATURE AND PRODUCE A RATIONAL CONSTRUCTION. THE INTENTION OF THE LEGISLATURE HAS ALWAYS BEEN THAT THE ASSESSMENT ORDER SHOULD BE MADE BEFORE THE TIME BARRING DATE. 7.9 AS PER THE PROVISIONS OF SECTION 153B OF THE INCOME TAX ACT, 1961, THE A SSESSING OFFICER GETS TIME TO MAKE THE ORDER UP TO THE MIDNIGHT OF 31.12.2017, M THIS CASE. IF HE IS ASKED TO SERVE OR EVEN DISPATCH THE ORDER BEFORE 31.12.2017, THE PROVISIONS OF SECTION 153B OF THE INCOME TAX ACT, 1961 WILL BECOME UNWORKABLE. IT IS A SET TLED PROPOSITION T H AT ANY INTERPRETATION WHICH MAKES THE PROVISION UNWORKABLE SHOULD NOT BE ACCEPTED. 7.10 CONSIDERING THE ABOVE MENTIONED DISCUSSION AND DECISIONS IN FAVOUR OF REVENUE, IT IS HELD THAT THE ORDER OF THE ASSESSING OFFICER IS VALID. THE G ROUND OF APPEAL IS DISMISSED. 8. IN THE RESULT, THE APPEAL IS DISMISSED. 11 . ON CAREFUL PERUSAL OF THE ABOVE OBSERVATIONS OF THE CIT(A), WE DO NOT FIND ANY INTERFERENCE IS CALLED FOR ON THE LEGAL GROUNDS DECIDED BY THE CIT(A). THE PROVISION OF SEC TION 153D OF THE ACT STATES REGARDING MAKING OF THE ORDER WITHIN THE STIPULATED PERIOD . FURTHER FROM THE READING OF THE PROVISIONS OF SECTION 153D OF THE ACT, IT IS CLEAR THAT THERE IS NO MENTION ABOUT THE SERVICE OF THE ORDER, HOWEVER, IT IS ONLY MENTIO NED THAT THE ORDER SHALL BE MADE. WITH REGARD TO SERVICE IT HAS CLEARLY BEEN DEFINED IN THE SECTION 143(2) OF THE INCOME TAX ACT BUT IN SECTION 153D OF THE ACT NOWHERE ABOUT SERVICE OF ORDER HAS BEEN MENTIONED. THE CASE LAWS RELIED ON BY THE LD. AR OF THE ASSESSEE IN THE CASE OF DILIP CONSTRUCTION S PVT. LTD. (SUPRA) IS NOT APPLICABLE IN THE PRESENT FACTS OF THE CASE. ACCORDINGLY, WE DISMISS THE LEGAL GROUNDS TAKEN BY THE ASSESSEE. IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 30 12 . NOW, COMING TO THE GROUND RAISED BY THE ASSESSEE WITH REGARD TO THE AD DITION MADE BY THE AO AND CONFIRMED BY THE CIT(A) OF RS.75,00,000/ - ON ACCOUNT OF ADVANCE GIVEN TO JAMI SIVA SAI AND THE INTEREST OF RS.6,25,000/ - RECEIVED THEREON, WE ON PERUSAL OF THE ASSESSMENT ORDER, FOUND THAT THE AO HAS MADE ADDITION ON THE DOCUMENTS FOUND IN THE PREMISES OF JAMI SIVA SAI DURING THE COURSE OF SEARCH PROCEEDINGS WHICH HAVE BEEN MARKED AS JRR - 45, JRR - 37 AND JRR - 36 , DETAILS OF WHICH NOTED BY THE AO IN HIS ORDER, READ AS UNDER : - SI. NO. DOCUMENTS SEIZED INDENTIFIED AS 01. ONE DIARY JRR - 45 02. ONE NOTE BOOK JRR - 37 03. ONE ROUGH CASH BOOK JRR - 26 THESE DOCUMENTS WERE NOT FOUND IN THE PREMISES OF THE ASSESSEE. IF ANY ADDITIONS HAVE BEEN MADE BY THE AO ON THE BASIS OF DOCUMENTS WHICH HAVE BEEN FOUND IN THE CASE OF OTHER PERSONS DURING THE COURSE OF SEARCH PROCEEDINGS, THE AO SHOULD HAVE RECORDED THE SATISFACTION NOTE AS PRESCRIBED U/S.153C OF THE ACT. THEREAFTER THESE DOCUMENTS CAN BE RELIED ON FOR MAKING ADDITIONS IN THE HANDS OF THE ASSESSEE. THIS ISSUE HAS ALREADY BEEN SETTLED BY VARIOU S COURTS IN THE CASE OF DOCUMENTS FOUND OF OTHERS BUT IN THE IMPUGNED ASSESSMENT ORDER, THERE IS NO WHISPER REGARDING OF ANY SATISFACTION NOTES. THE CIT(A) HAS ALSO DID NOT TAKE ANY COGNIZANCE IN THIS REGARD. THE LD. AR OF THE ASSESSEE HAS RELIED ON THE JU DGMENT OF THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 31 MR. TRILOK CHAND CHAUDHARY, ITA NO.5870/DEL/2017, ORDER DATED 20.08.2019 , WHEREIN THE TRIBUNAL IN PARA 5.2 TO 5.10, OBSERVED AS UNDER : - 5.2 BEFORE US, THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT FOR MAKING ADDITION ON THE BASIS OF ANY MATERIAL INCLUDING DOCUMENT FOUND DURING THE COURSE OF SEARCH AT THE PREMISES OF THE THIRD PARTY, THE PROCEDURE LAID DOWN UNDER SECTION 153C OF THE ACT IS TO BE FOLLOWED. ACCORDING TO LEARNED COUNSEL IN THE INS TANT CASE, SAID PROCEDURE OF LAW HAS NOT BEEN FOLLOWED BY THE ASSESSING OFFICER AND, THEREFORE, THE ADDITION CANNOT BE LEGALLY SUSTAINED. THE LD. COUNSEL WAS ASKED TO FILE A COPY OF THE PANCHNAMA UNDER WHICH THE RELEVANT DOCUMENT CONTAINING LIST OF THE ITE M WAS SEIZED, WHICH HE FILED. THE LD. COUNSEL IN SUPPORT OF HIS CONTENTION THAT NO ADDITION COULD HAVE BEEN MADE UNDER SECTION 153A OF THE ACT IN THE CASE OF THE ASSESSEE IN RESPECT OF INCRIMINATING MATERIAL FOUND FROM THE COURSE OF SEARCH AT THE PREMISE O F THE THIRD PARTIES, RELIED ON FOLLOWING DECISIONS: DCIT VS. SMT. SHIVANI MAHAJAN [ITA NO.5585/DEL/2015](PRONOUNCED ON 19.03.2019) DCIT VS. VIKAS JAIN [ITA NO.4075/DEL/2014] (PRONOUNCED ON 19.03.2019) PAVITRA REALCON (P) LTD. VS. ACIT [2017] 87 TAXMA NN.COM 142 (DEL. TRIB.) KRISHNA KUMAR SINGHANIA VS. DCIT [2017] 88 TAXMANN.COM 259 (KOLTRIB) CIT VS. PINAKI MISRA [2017] 88 TAXMANN.COM 521 (DELHI - HC) 5.3 BEFORE US, THE LD. DR RELIED ON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF SH. VINOD KUMAR GUPTA IN ITA NO. 1003/2017, WHEREIN ADDITION ON THE BASIS OF STATEMENT OF THE THIRD PARTY DURING THE COURSE OF SUCH WAS HELD AS VALIDLY MADE. 5.4 WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTIES AND ALSO PERUSED COPY OF PANCHNAMA THROUGH WH ICH THE DOCUMENT IN DISPUTE WAS SEIZED. ON PERUSAL OF THE PUNCHNAMA, WE FIND THAT THE SAID SEARCH WARRANT WAS ISSUED IN THE CASE OF SHRI ASHOK CHAUDHRI AND THE PANCHNAMA IS NOT CONTAINING NAME OF THE ASSESSEE. THEREFORE, IT IS EVIDENT THAT THE MATERIAL REL IED UPON FOR MAKING ADDITION WAS NOT FOUND FROM THE PREMISES OF THE ASSESSEE. 5.5 WE ALSO FIND THAT DURING RELEVANT PERIOD, I.E., FY: 2014 - 15, FOR USING ANY MATERIAL FOUND FROM THE PREMISES OF THE THIRD PARTY DURING THE COURSE OF THE SEARCH IN ASSESSMENT P ROCEEDING OF THE ASSESSEE, THE ASSESSING OFFICER OF THE THIRD PARTY WAS REQUIRED TO RECORD SATISFACTION AS THE MATERIAL BELONG TO THE ASSESSEE IN TERMS OF SECTION 153C OF THE ACT AND THEN WAS REQUIRED TO PROCEED AS PER THE PROVISIONS OF SECTION 153C OF THE ACT. IN THE INSTANT CASE, IT IS EVIDENT IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 32 THAT ADDITION IN DISPUTE HAS BEEN MADE IN THE ASSESSMENT COMPLETED UNDER SECTION 153A OF THE ACT. THE ASSESSEE RAISED THIS ISSUE BEFORE THE LD. CIT(A), HOWEVER, THE LD. CIT(A) REJECTED THE ARGUMENTS OF THE ASSESSEE OBSERVING AS UNDER: 6.3 ANOTHER ARGUMENT OF THE APPELLANT, IF UNDERSTOOD CORRECTLY, IS THAT IN REFERENCE TO THE DOCUMENT UNDER CONSIDERATION, THE AO OUGHT TO HAVE INITIATED PROCEEDINGS U/S 153C AND THAT IN NO CASE THIS CAN BE CONSIDERED U/S 153A. THIS A RGUMENT HAS NO LEGS TO STAND FOR THE SIMPLE REASON THAT IT IS PATENTLY ABSURD. UNDISPUTEDLY, A SEARCH U/S 132 WAS CONDUCTED IN THE APPELLANTS CASE AND THEREFORE, THE ASSESSMENT WAS TO BE COMPLETED U/S 153A AND THE LD. AO WAS UNDER A STATUTORY OBLIGATION T O CONSIDER ENTIRE MATERIAL IRRESPECTIVE OF THE PLACE FROM WHERE IT WAS FOUND (I.E. APPELLANTS OWN PLACE OR SOME OTHER PLACE). THERE CANNOT BE TWO ASSESSMENT ONE U/S 153A AND OTHER U/S 153C. IN SHORT, THE ARGUMENT OF THE APPELLANT THAT DOCUMENT SEIZED FROM THE PREMISES OF SH. ASHOK CHAUDHARY CANNOT BE CONSIDERED U/S 153A IS ABSURD AND IS ACCORDINGLY REJECTED. 5.6 IN OUR OPINION, THE FINDING OF THE LD. CIT(A) IS NOT BASED ON CORRECT APPRECIATION OF LAW. THE REASONING OF THE LD. CIT(A) IS THAT THERE CANNOT BE TWO SIMULTANEOUS ASSESSMENT UNDER SECTION 153A AND OTHER UNDER SECTION 153C OF THE ACT. THIS REASONING IS FAULTY. THE ASSESSMENT UNDER SECTION 153C COULD HAVE BEEN MADE AFTER COMPLETION OF THE ASSESSMENT UNDER SECTION 153A OF THE ACT. THE ACT HAS PROVID ED SEPARATE PROVISIONS FOR MAKING ASSESSMENT IN CASE OF MATERIAL FOUND IN THE COURSE OF THE SEARCH FROM THE PREMISES OF THE ASSESSEE AS WELL AS THE MATERIAL FOUND IN THE COURSE OF SEARCH AT THE PREMISES OF THE THIRD PARTY. THE ASSESSING OFFICER IS REQUIRED TO FOLLOW THE PROCEDURE LAID DOWN IN THE ACT FOR MAKING THE ASSESSMENT AND HE CANNOT DEVISE HIS OWN PROCEDURE FOR SHORTCUT METHODS. IN OUR CONSIDERED OPINION, WHEN THE CASE OF THE ASSESSEE IS COVERED UNDER THE PROVISION OF SECTION 153 OF THE ACT AND IF RE LIANCE IS PLACED ON THE INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH OF THIRD - PARTY, THEN PROVISION OF SECTION 153C OF THE ACT WOULD BE APPLICABLE AND HAVE TO BE ADHERED TO. THUS, IN THE INSTANT CASE, THE ASSESSING OFFICER WAS REQUIRED TO FIRST COMPLETE THE PROCEEDINGS UNDER SECTION 153A IN HAND, WHICH WERE INITIATED BY WAY OF NOTICE DATED 30/06/2014 AND THEREAFTER, HE WAS AT LIBERTY TO TAKE ACTION UNDER SECTION 153C OF THE ACT FOR BRINGING THE MATERIAL FOUND FROM THE PREMISE OF SH. ASHOK CHAUDH RI TO TAX IN THE HANDS OF THE ASSESSEE. 5.7 IN THE CASE OF SHIVANI MAHAJAN(SUPRA), IDENTICAL QUESTION WAS RAISED BEFORE THE TRIBUNAL AS UNDER: 9. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BOTH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. A FTER CONSIDERING THE FACTS OF THE CASE AND THE RIVAL SUBMISSIONS, WE FIND THAT IN THESE APPEALS, FOLLOWING TWO QUESTIONS ARISE FOR OUR CONSIDERATION: IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 33 (I) WHETHER ANY MATERIAL FOUND IN THE SEARCH OF ANY OTHER PERSON THAN THE ASSESSEE IN APPEAL CAN BE CONSI DERED IN THE ASSESSMENT UNDER 153A OF THE ASSESSEE. 5.8 THE TRIBUNAL AFTER CONSIDERING ARGUMENTS OF THE PARTIES HELD AS UNDER: 14. FROM A READING OF THE ABOVE DECISIONS OF HON'BLE JURISDICTIONAL HIGH COURT, IT IS EVIDENT THAT COMPLETED ASSESSMENT CAN BE INTERFERED WITH BY THE ASSESSING OFFICER ON THE BASIS OF ANY INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH. IF IN RELATION TO ANY ASSESSMENT YEAR NO INCRIMINATING MATERIAL IS FOUND, NO ADDITION OR DISALLOWANCE CAN BE MADE IN RELATION TO T HAT YEAR IN EXERCISE OF POWER UNDER SECTION 153 OF THE ACT. OBVIOUSLY, THE REFERENCE TO THE INCRIMINATING MATERIAL IN THE ABOVE DECISIONS OF HON'BLE JURISDICTIONAL HIGH COURT IS IN REGARD TO INCRIMINATING MATERIAL FOUND AS A RESULT OF SEARCH OF THE ASSESSE E'S PREMISES AND NOT OF ANY OTHER ASSESSEE. THE LEGISLATURE HAS PROVIDED SECTION 153C BY INVOKING THE SAME THE REVENUE CAN UTILIZE THE INCRIMINATING MATERIAL FOUND IN THE CASE OF SEARCH OF ANY OTHER PERSON TO THE DIFFERENT ASSESSEE. SECTION 153C IS REPRODU CED BELOW FOR READY REFERENCE: 'ASSESSMENT OF INCOME OF ANY OTHER PERSON. 153C.[C][NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECTION 153, WHERE THE ASSESSING OFFICER IS SATISFIED THAT, - (A ) ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING, SEIZED OR REQUISITIONED, BELONGS TO; OR (B) ANY BOOKS OF ACCOUNT OR DOCUMENTS, SEIZED OR REQUISITIONED, PERTAINS OR PERTAIN TO, OR ANY INFORMATION CONTAINED THEREIN, RELATES TO, A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A, THEN, THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS, SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON] [AND THAT ASSESSING OFFICER SHALL PROCE ED AGAINST EACH SUCH OTHER PERSON AND ISSUE NOTICE AND ASSESS OR REASSESS THE INCOME OF THE OTHER PERSON IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A, IF, THAT ASSESSING OFFICER IS SATISFIED THAT THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR R EQUISITIONED HAVE A BEARING ON THE DETERMINATION OF THE TOTAL INCOME OF SUCH OTHER PERSON [FOR SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SEARCH IS CONDUCTED OR REQUISITION IS MADE AND] FOR THE REL EVANT ASSESSMENT YEAR OR YEARS REFERRED TO IN SUBSECTION (1) OF SECTION 153A]:]. 15. THUS, WHEN DURING THE COURSE OF SEARCH OF AN ASSESSEE ANY BOOKS, DOCUMENT OR MONEY, BULLION, JEWELLERY ETC. IS FOUND WHICH IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 34 RELATES TO A PERSON OTHER THAN THE PERSON SEARC HED, THEN THE ASSESSING OFFICER OF THE PERSON SEARCHED SHALL HAND OVER SUCH BOOKS OF ACCOUNT, DOCUMENTS, OR VALUABLES TO THE ASSESSING OFFICER OF SUCH OTHER PERSON AND THEREAFTER, THE ASSESSING OFFICER OF SUCH OTHER PERSON CAN PROCEED AGAINST SUCH OTHER PE RSON. HOWEVER, IN THE CASE UNDER APPEAL BEFORE US, ADMITTEDLY, SECTION 153C IS NOT INVOKED IN THE CASE OF THE ASSESSEE AND THE ASSESSMENT IS FRAMED UNDER SECTION 153A. WE, RESPECTFULLY FOLLOWING THE ABOVE DECISIONS OF HON'BLE JURISDICTIONAL HIGH COURT, HOL D THAT DURING THE COURSE OF ASSESSMENT UNDER SECTION 153A, THE INCRIMINATING MATERIAL, IF ANY, FOUND DURING THE COURSE OF SEARCH OF THE ASSESSEE ONLY CAN BE UTILIZED AND NOT THE MATERIAL FOUND IN THE SEARCH OF ANY OTHER PERSON. 5.9 THE FACTS OF THE CASE OF VINOD KUMAR GUPTA (SUPRA) ARE DISTINGUISHABLE WITH THE FACTS OF THE INSTANT CASE. IN THE CASE OF VINOD KUMAR GUPTA (SUPRA) MATERIAL FOUND FROM SH. S.K. GUPTA WAS USED IN ASSESSMENT PROCEEDING UNDER SECTION 153A OF THE ACT IN THE CASE OF SH. VINOD KUMAR GUPTA. BUT IN THAT CASE WARRANT IN FACT WAS ISSUED IN THE NAME OF SH. SK GUPTA, GAURAV GUPTA, SH. VINOD KUMAR GUPTA, MS. VEENA GUPTA, SH. VIKAS GUPTA, AND MS. MADHU GUPTA. THE PANCHNAMA DRAWN WAS ALSO SIGNED BY BOTH THE ASSESSEE (SH. VINOD KUMAR GUPTA) AN D SK GUPTA. THE STATEMENTS OF BOTH SH. S.K. GUPTA AND SH. VINOD GUPTA WERE RECORDED ON THE SAME DATE. THE HONBLE HIGH COURT HELD THAT AS SEARCH AND SEIZURE WAS CONDUCTED THROUGH ONE AUTHORIZATION, THERE WAS NO REQUIREMENT OF ISSUING SEPARATE NOTICE UNDER SECTION 153C OF THE ACT AND FOLLOWING SEPARATE PROCEDURE UNDER SECTION 153C OF THE ACT. BUT IN THE INSTANT CASE, SEPARATE SEARCH WARRANT HAS BEEN ISSUED IN THE CASE OF THE ASSESSEE AS WELL IN THE CASE OF SH. ASHOK CHOWDHARY AND THE ASSESSING OFFICER HAS US ED THE MATERIAL FOUND IN THE COURSE OF SEARCH AT THE PREMISE OF SH. ASHOK CHOWDHARY, WHICH IS NOT PERMITTED IN VIEW OF THE EXPRESS PROVISION OF THE LAW. 5.10 THE ADDITION MADE BY THE ASSESSING OFFICER IN VIOLATION OF THE PROCEDURE PROVIDED IN THE ACT IS B AD IN LAW AND VOID - AB - INITIO AND CANNOT BE SUSTAINED. ACCORDINGLY, THE ADDITION OF RS.3.3 CRORE, MADE PROTECTIVELY ON THE BASIS OF THE DOCUMENTS FOUND FROM THE PREMISES OF THE THIRD PARTY, BY THE ASSESSING OFFICER AND UPHELD BY THE LD. CIT(A) ON SUBSTANTIV E BASIS, IS DELETED. THE GROUND NO. 6.2 OF THE APPEAL IS ACCORDINGLY ALLOWED. 13. FURTHER THE LD. AR PLACED RELIANCE ON THE ORDER OF PUNE BENCH OF THE TRIBUNAL IN THE CASE OF SHRI VINIT RANAWAT, ITA NOS.1105&1106/PN/2013, ORDER DATED 12.06.2015, WHEREIN THE TRIBUNAL IN PARA 24 AND 55 OBSERVED AS UNDER : - IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 35 24. REFERRING TO THE PROVISIONS OF SECTION 132(4A) HE SUBMITTED THAT THESE PAPERS CAN BE PRESUMED TO BE TRUE, GENUINE AND CORRECT IN THE CASE OF THE PERSON SEARCHED, I.E. SHRI SOHAN RAJ MEHTA AND HE HAS ADMITTED THAT THE PAPERS BELONG TO HIM. ON THE BASIS OF THE PAPERS FOUND WITH SOME THIRD PARTIES ADDITION CANNOT BE MADE IN THE HANDS OF THE ASSESSEE PARTICULARLY WHEN THERE IS NO BUSINESS CONNECTION BETWEEN THE ASSESSEE AND THAT PARTY. FOR THE ABOVE PROPO SITION THE LD. COUNSEL FOR THE ASSESSEE REFERRED TO THE FOLLOWING DECISIONS : A. BOMBAY H.C. LATA MANGESHKAR [97 ITR 696] B. STRAPTEX (INDIA) P. LTD. V. DCIT [84 ITD 320 (MUM)] C. CBI V. V. C. SHUKLA [3 SCC 410 (SC)] D. PRARTHANA CONSTRUCTION P. L TD. V. DCIT [118 TAXMAN 112 (AHD.)] E. UNIQUE ORGANIZERS & DEVELOPERS P. LTD. V. DCIT [118 TAXMAN 147 (AHD.)] * * * * * * * 55. SINCE IN THE INSTANT CASE THE ASSESSEE FROM THE VERY BEGINNING HAS DENIED TO HAVE RECEIVED ANY SUCH PAYMENT FROM M/S. DHARIWAL GROUP THROUGH MR. SOHAN RAJ MEHTA AND SINCE NO INCRIMINATING MATERIAL WAS FOUND FROM THE RESIDENCE OF THE ASSESSEE DURING THE COURSE OF SEARCH AND SINCE THE ASSESSEE IS NOT DEALING WITH M/S. DHARIWAL GROUP IN HIS INDIVIDUAL CAPACITY, THEREFORE, RESPECTFUL LY FOLLOWING THE DECISIONS CITED ABOVE AND IN VIEW OF OUR REASONINGS GIVEN EARLIER, WE ARE OF THE CONSIDERED OPINION NO ADDITION IN THE HANDS OF THE ASSESSEE CAN BE MADE. SINCE IT IS HELD THAT THE ASSESSEE HAS NOT RECEIVED ANY AMOUNT, THEREFORE, THE QUESTI ON OF TAXING THE SAME U/S.56(2)(VI) AS HELD BY CIT(A) DOES NOT ARISE. IN THIS VIEW OF THE MATTER, WE SET ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION OF RS.1 CRORE FOR A.Y. 2006 - 07 AND RS. 20 CRORES FOR A.Y. 2007 - 08 . GROUNDS RAISED BY THE ASSESSEE ON THIS ISSUE ARE ACCORDINGLY ALLOWED. 14 . ON THE BASIS OF OUR FINDINGS RECORDED ABOVE AND THE JUDICIAL PRONOUNCEMENTS DISCUSSED SUPRA, WE ARE OF THE VIEW THAT THE AO IS NOT JUSTIFIED IN MAKING THE ADDITION IN THE HANDS O F THE ASSESSEE OF RS.75 LAKHS . THE AO DID NOT FOLLOW THE PRESCRIBED PROCEDURES, WHICH OUGHT TO HAVE BEEN FOLLOWED IN CASED OF DOCUMENTS WHICH WAS FOUND IN THE CASE OF OTHER PERSONS AS PRESCRIBED U/S.153C OF THE ACT. THEREFORE, THE ENTIRE ADDITION MADE BY THE AO ALONG WITH THE INTEREST MADE THEREON IS NOT CORRECT. ACCORDINGLY, WE DELETE THE ADDITION OF RS.75,00,000/ - AND IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 36 INTEREST CHARGED THEREON OF RS.6,25,000/ - TOTALING TO RS.81,25,000/ - . WITH REGARD TO GROUND NO.4 : SINCE WE HAVE DELETED THE ENTIRE ADDITI ON MADE BY THE AO AND DECIDED THE APPEAL OF THE ASSESSEE ON MERITS OF THE CASE, THEREFORE, THIS GROUND IS CONSEQUENTIAL IN NATURE . THUS, THE GROUND TAKEN BY THE ASSESSEE ON MERITS IS ALLOWED. 15 . IN THE RESULT, APPEAL OF THE ASSESSEE FOR A.Y.2013 - 2014 (I.E . IT(SS)A NO.132/CTK/2018 IS PARTLY ALLOWED. 16 . NOW, WE SHALL TAKE THE APPEALS OF THE ASSESSEE FOR A.Y.2014 - 2015 & 2015 - 2016, WHEREIN THE ASSESSEE HAS TAKEN THE FOLLOWING LEGAL GROUNDS OF APPEAL , HOWEVER, ON THE MERITS OF THE CASE THE CIT(A) HAS GIVEN REL IEF TO THE ASSESSEE : - 1. THAT, FOR ASSESSMENT YEAR 2014 - 15, ASSESSMENT WAS COMPLETED BY THE LEARNED A.O U/S.153A READ WITH SECTION 143(3) OF THE IT. ACT, 1961 BY MAKING ADDITIONS OF UNDISCLOSED INCOME. BEING AGGRIEVED WITH THESE ADDITIONS, THE ASSESSEE PR EFERRED APPEAL BEFORE THE LEARNED C.I.T.(A) AND THE SAME WAS ALREADY ADJUDICATED UPON. SINCE, THE LEARNED C.I.T.(A) DID NOT ALLOW THE APPEAL, BEING HIGHLY AGGRIEVED AND SERIOUSLY PREJUDICED, THE APPELLANT/ASSESSEE PREFERRED THIS PRESENT APPEAL BEFORE YOUR HONOUR. 2. THAT, THE IMPUGNED ORDER SO PASSED AND CONSEQUENTIAL ADDITIONS MADE THEREIN ARE WITHOUT JURISDICTION AND WITHOUT THE AUTHORITY OF LAW, BUT WHILE DRAFTING THE GROUNDS OF APPEAL BEFORE THE LEARNED C.I.T(A) AS WELL AS BEFORE THIS HON'BLE TRIBUNAL, THE APPELLANT DUE TO LACK OF KNOWLEDGE, COULD NOT TAKE LEGAL GROUNDS. SINCE, HE HIMSELF HAS FILED THE APPEAL, HAVING NO KNOWLEDGE ON INCOME TAX LAW, COULD NOT TAKE THESE LEGAL GROUND. LEGAL GROUNDS THAT, THE APPELLANT PROPOSED TO TAKE HERE ARE AS SUCH; 1 . THAT, THE IMPUGNED ORDER OF ASSESSMENT IS NOT SUSTAINABLE IN THE EYE OF LAW IN VIEW OF THE FACT THAT DUE PROCEDURE OF LAW AND STATUTORY REQUIREMENT HAS NOT BEEN FOLLOWED BY THE LEARNED AUTHORITIES BELOW WHILE GRANTING APPROVAL U / S .153D OF THE ACT. IT BEI NG MANDATORY IN THE EYE OF LAW IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 37 IN ABSENCE OF IT, THE ORDER OF ASSESSMENT NEEDS TO BE QUASHED IN THE INTEREST OF JUSTICE. 2. FOR THAT, IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPLETED ASSESSMENT CANNOT BE DISTURBED, AS SUCH, THE CONSEQUENTIAL ADDITI ONS SO MADE, BEING WITHOUT JURISDICTION AND WITHOUT THE AUTHORITY OF LAW IS LIABLE TO BE QUASHED IN THE INTEREST OF JUSTICE . 3. THAT, IT MAY BE RESPECTFULLY SUBMITTED HERE THAT, IT BEING JURISDICTIONAL GROUND AND GOES TO THE ROOT OF THE CASE, IT NEEDS TO BE ADMITTED FOR HEARING IN THE INTEREST OF JUSTICE. IF THIS LEGAL GROUND IS NOT ADMITTED AND NOT ADJUDICATED, THE APPELLANT/ASSESSEE WILL SUFFER FROM IRREPARABLE LOSS AND INJURY, HENCE THE; PRAYE R UNDER THE FACTS AND IN THE CIRCUMSTANCES STATED ABOVE, I T IS THEREFORE RESPECTFULLY PRAYED THAT, THIS HON'BLE TRIBUNAL SHALL BE GRACIOUSLY PLEASED TO CONSIDER THE GENUINE DIFFICULTIES FACED BY THE ASSESSEE AND BE FURTHER PLEASED TO ACCEPT THESE ADDITIONAL LEGAL GROUND TAKEN HERE IN THE REVISED GROUNDS OF APPEAL FOR ADJUDICATION IN THE INTEREST OF JUSTICE. AND FOR THIS ACT OF KINDNESS, THE APPELLANT/ASSESSEE AS IN DUTY BOUND SHALL EVER PRAY. 17 . SINCE WE HAVE ALREADY DECIDED THE SIMILAR AND IDENTICAL LEGAL GROUNDS RAISED BY THE ASSESSEE IN THE APPEAL FOR A.Y.20 13 - 2014, THEREFORE, OUR OBSERVATIONS MADE IN THE SAID APPEAL SHALL ALSO APPLY MUTATIS MUTANDIS TO THESE TWO APPEALS OF THE ASSESSEE FOR A.Y.2014 - 2015 & 2015 - 2016 ALSO. THUS, THE LEGAL GROUNDS RAISED BY THE ASSESSEE IN BOTH THE APPEALS ARE DISMISSED. 18. IN THE RESULT, BOTH THE APPEALS I.E. ITA NO.19&20/CTK/2019 ARE DISMISSED. 19 . NOW, WE SHALL TAKE UP THE APPEAL OF THE ASSESSEE FOR A.Y.2016 - 2017 AND THE GROUNDS RAISED THEREIN ARE READ AS UNDER : - 1. FOR THAT THE ORDER OF THE LEARNED CIT(APPEALS) IS UNJUST AND NOT IN REFERENCE TO THE FACTS AND CIRCUMSTANCES OF THE CASE. IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 38 2. THAT THE ADDITION OF RS.31,00,000/ - IS UNJUS T BECAUSE THE DOCUMENTS ARE DUMB DOCUMENTS AND THEY ARE NOT EXECUTED HENCE IT CAN'T BE CONSTRUED AS ADVANCE TO GIACR (GANDHI INSTITUTE OF ADV ANCE COMPUTER & RESEARCH). 3. THAT THE ADDITION OF RS.27,36,300/ - BEING THE CASH FOUND ON THE DATE OF SEARCH IS UNJUST TREATING THE SAME AS INCOME OF THE APPELLANT OR THAT YEAR EVEN THOUGH THE APPELLANT HAS EXPLAINED AND THE RETURNS OF INCOME WERE ACCEPT ED U/S 153 A READ WITH SECTION 143 (3) OF THE I.T.ACT. THE APPELLANT IS FILLING THE RETURNS IN CAPACITY OF HUF & INDIVIDUAL AND ACCUMULATION IS TERM THE DECLARED SOURCES OF INCOME INCLUDING AGRICULTURAL INCOME. 4. THAT THE LEARNED CIT (APPEALS) ERRED IN MENTIONING THAT THE RETURN OF INCOME FOR THE YEAR 2015 - 16 & 2016 - 17 WERE NOT EVIDENCED BECAUSE THE ASSESSMENT IS MADE ON THE BASIS OF RETURNS AND THE COPIES WERE FILED DURING APPEAL PROCEEDINGS HENCE ALLEGATION IS NOT TENABLE. 5. THAT THE LCIT (APPEALS ) HAS NOT GONE THROUGH THE EVIDENCES FILED FOR PURCHASE OF GOLD, RECEIPT OF GOLD AT THE TIME OF MARRIAGE AND RECEIPT OF THE GOLD AT THE TIME OF PARTITION WHICH IS UNJUST. HENCE TREATING THE ADDITION OF RS.58,16,414/ - AS UN EXPLAINED IS UNJUST. 6. THAT THE LEARNED CIT (APPEALS) WITHOUT CONSIDERING THE SUBMISSION AND CASE LAWS, PASSED THE ORDERS WHICH ARE UNJUST AND NOT TENABLE IN THE COURT OF LAW. 7. THAT THE ORDER ASSESSMENT IS BANNED BY LIMITATION BECAUSE THE ORDERS WERE PASSED ON 29/12/2017 AND SERVED ON THE ASSESSEE ON 15.01.2.018. THE MATTER WAS ALREADY DECIDED BY THE HONOURABLE BENCH, 1TAT, CUTTACK IN THE MATTER OF NIDAN VIDE ITA NO M/S. NIDAN, I.T. (SS). APPEAL NOS. 32TO37/CTK/2018. (ANNEXURE - VI.) 8. ALL THE EVIDENCE WERE FILED DURING THE ASSESSME NT PROCEEDINGS AND APPEAL PROCEEDINGS WHICH WERE NOT AT ALL SEEN WHICH IS UNJUST. 9. FOR THAT THE CALCULATION OF INTEREST U/S 234 A , 234 B & 234 C ARE NOT AS PER THE PROVISIONS OF THE I.T.ACT 1961. 10. FOR THESE AND OTHER REASONS TO BE ADDUCED AT THE T IME OF HEARING THE APPELLANT PRAYS YOUR HONOUR TO REDUCE THE INCOME TO THE RETURNED FIGURES. FOR WHICH ACT OF KINDNESS THE APPELLANT SHALL EVER PRAY. 20 . FIRST, WE SHALL CONSIDER THE LEGAL GROUNDS RAISED BY THE ASSESSEE WHICH READ AS UNDER : - 1. THAT, FOR ASSESSMENT YEAR 2016 - 17, ASSESSMENT WAS COMPLETED BY THE LEARNED A.O U/S. 143(3) OF THE I.T. ACT, 1961 BY MAKING ADDITIONS OF UNDISCLOSED INCOME. BEING AGGRIEVED WITH THESE ADDITIONS, THE ASSESSEE PREFERRED APPEAL BEFORE THE LEARNED C.I.T.(A) AND THE SAME WAS ALREADY ADJUDICATED UPON. SINCE, THE LEARNED C.I.T.(A) ALLOWED THE APPEAL OF THE APPELLANT IN PART, BEING HIGHLY AGGRIEVED AND SERIOUSLY PREJUDICED, THE IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 39 APPELLANT/ASSESSEE PREFERRED THIS PRESENT APPEAL BEFORE YOUR HONOUR. 2 . THAT, THE IMPUGNED ORDER SO PASSED AND CONSEQUENTIAL ADDITIONS MADE THEREIN ARE WITHOUT JURISDICTION AND WITHOUT THE AUTHORITY OF LAW, BUT WHILE DRAFTING THE GROUNDS OF APPEAL BEFORE THE LEARNED C.I.T(A) AS WELL AS BEFORE THIS HON'BLE TRIBUNAL, THE APPELLANT DUE TO LACK OF KNOWLED GE, COULD NOT TAKE LEGAL GROUND. SINCE, HE HIMSELF HAS FILED THE APPEAL, HAVING NO KNOWLEDGE ON INCOME TAX LAW, COULD NOT TAKE THIS LEGAL GROUND. LEGAL GROUND THAT, THE APPELLANT PROPOSED TO TAKE ARE AS SUCH; THAT, THE IMPUGNED ORDER OF ASSESSMENT IS NOT S USTAINABLE IN THE EYE OF LAW IN VIEW OF THE FACT THAT DUE PROCEDURE OF LAW AND STATUTORY REQUIREMENT HAS NOT BEEN FOLLOWED BY THE LEARNED AUTHORITIES BELOW WHILE GRANTING APPROVAL U / S .153D OF THE ACT. IT BEING MANDATORY IN THE EYE OF LAW IN ABSENCE OF IT, THE ORDER OF ASSESSMENT NEEDS TO BE QUASHED IN THE INTEREST OF JUSTICE.' 3. THAT, IT MAY BE RESPECTFULLY SUBMITTED HERE THAT, IT BEING A JURISDICTIONAL GROUND AND GOES TO THE ROOT OF THE CASE, IT NEEDS TO BE ADMITTED FOR HEARING IN THE INTEREST OF JUSTICE. IF THIS LEGAL GROUND IS NOT ADMITTED AND NOT ADJUDICATED, THE APPELLANT/ASSESSEE WILL SUFFER FROM IRREPARABLE LOSS AND INJURY, HENCE THE; PRAYER UNDER THE FACTS AND IN THE CIRCUMSTANCES STATED ABOVE, IT IS THEREFORE RESPECTFULLY PRAYED THAT, THIS HON'BLE TRIBUNAL SHALL BE GRACIOUSLY PLEASED TO CONSIDER THE GENUINE DIFFICULTIES FACED BY THE ASSESSEE AND BE FURTHER PLEASED TO ACCEPT THE ADDITIONAL LEGAL GROUND TAKEN HERE FOR ADJUDICATION IN THE INTEREST OF JUSTICE. AND FOR THIS ACT OF KINDNESS, THE APPELLANT /ASSESSEE AS IN DUTY BOUND SHALL EVER PRAY. SINCE WE HAVE ALREADY DECIDED THE SIMILAR AND IDENTICAL LEGAL GROUNDS RAISED BY THE ASSESSEE IN THE APPEAL FOR A.Y.2013 - 2014, THEREFORE, OUR OBSERVATIONS MADE IN THE SAID APPEAL SHALL ALSO APPLY MUTATIS MUTANDI S TO TH IS APPEAL OF THE ASSESSEE FOR A.Y.201 6 - 2017 ALSO. THUS, THE LEGAL GROUNDS RAISED BY THE ASSESSEE IN THIS APPEAL ARE DISMISSED. 21 . NOW, WE SHALL PROCEED TO DECIDE THE MERITS OF THE CASE FOR THE ASSESSMENT YEAR UNDER CONSIDERATION . O N PERUSAL OF THE ASSESSMENT ORDER, WE FIND THAT DURING THE COURSE OF SEARCH AND SEIZURE IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 40 PROCEEDINGS, IN CASE OF ASSESSEE, SOME LOOSE SHEETS CONTAINING 81 WRITTEN PAGES IDENTIFIED AS KRR - 01 WERE SEIZED. OUT OF WHICH PAGE NOS.29 TO 32 ARE ORIGINAL CASH RECEIPTS LETTER HEADS FOR CASH TRANSACTION MADE BETWEEN SRI K.RAMA RAO AND GANDHI INSTITUTE OF ADVANCED COMPUTER & RESEARCH (GIACR) UNDER THE ORIGINAL SIGNATURE OF THE CHAIRMAN OF SAID INSTITUTION SRI B RAM PRASAD RAO. THE DETAILS OF SUCH TRANSACTIONS ARE AS UNDER : - IDENTIFICA TION NO. OF SEIZED DOCUMENTS DATE OF TRANSACTIONS AMOUNT IN RS. RATE OF INTEREST CASH RECEIVED BY KKR - 01, PAGE NO.29 22.06.2015 15,00,000 4.5% PER MONTH SRI B RAM PRASAD RAO, CHAIRMAN OF GIACR KKR - 01, PAGE NO. 30 23.0 7.2015 5,00,000 KKR - 01, PAGE NO. 31 25.07.2015 5,00,000 KKR - 01, PAGE NO.32 31,08.2015 6,00,000 TOTAL 31,00,000 22. THE ABOVE FACTS WERE ASKED TO THE ASSESSEE FOR EXPLANATION BY ISSUING QUESTIONNAIRE U/S.142(1). THE ASSESSEE REPLI ED THAT THERE WAS NO ANY INVESTMENTS MADE ON THE SAID INSTITUTIONS AND HE STATED THAT HE IS A PARTNER OF JAGANNATH MILLS AND THE REMUNERATION AND INTEREST ON CAPITAL IS SHOWN IN THE RETURN OF INCOME. THE ASSESSEE ALSO STATED THAT THE SAID TRANSACTION HAS N OT BEEN OCCURRED. THE ASSESSEE AND THE CHAIRMAN SRI B.RAM PRASAD RAO HAVE CATEGORICALLY DENIED THAT THESE TRANSACTIONS HAVE NOT BEEN OCCURRED AND IT CAN BE CROSS VERIFIED FROM THE BOOKS OF ACCOUNTS. THE AO TOOK THE VIEW THAT THE DOCUMENTS WERE IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 41 FOUND IN THE RESIDENCE OF THE ASSESSEE. THEREFORE, IT WAS THE RESPONSIBILITY OF THE ASSESSEE TO JUSTIFY WITH SUFFICIENT EVIDENCE BUT HE COULD NOT SUBSTANTIATE THE SAME. THEREFORE, HE MADE THE ADDITION IN THE HANDS OF THE ASSESSEE. 23 . IN THIS REGARD, LD. AR OF THE ASS ESSEE DREW OUR ATTENTION TO HIS WRITTEN SUBMISSIONS AT PAGE 12 ONWARDS, WHICH READS AS UNDER : - ASSESSMENT YEAR: 2016 - 17 . SUBMISSIONS ON MERIT : 1. THAT, WHILE COMPLETING ASSESSMENT FOR ASSESSMENT YEAR 2016 - 17, THE LEARNED A.O. HAS MADE FOLLOWING THREE ADDI TIONS SUCH AS; HEADS OF ADDITION AMOUNT RELIEF BV CIT(A ) UNDISCLOSED INCOME RS.31,00,000.00 NIL UNEXPLAINED MONEY U/S.69 RS.27,36,300.00 NIL GOLD JEW ELLERY AND BULLION ADDED AS UNEXPLAINED INVESTMENTS RS.67,90,235.00 RS.9,73,821.00 2. THAT, THE APPELLANT SUBMITS HEREWITH ISSUE - WISE SUBMISSIONS FOR BETTER APPRECIATION OF FACT; UNDISCLOSED INCOME OF RS.31, 00,OOP.OO : 2.1. THAT, DURING COURSE OF SEARCH, SOME ORIGINAL CHEQUES OF INSTITUTE OF ADVANCE COMPUTER AND RESEARCH (IACR) AND CERTAIN MONEY RECEIPTS WAS FOUND FROM THE RESIDENCE OF THE APPELLANT. DURING COURSE OF SEARCH, POST SEARCH INQUIRY AS WELL AS DU RING ASSESSMENT PROCEEDING, THE APPELLANT HAS EXPLAINED THAT, THE SAID INSTITUTE REQUESTED THE APPELLANT TO PROVIDE THEM FINANCIAL ASSISTANCE WHICH WILL BE REPAID AND ACCORDINGLY, POST DATED CHEQUES WERE ALSO ISSUED BY THEM, BUT DUE TO LACK OF FUND, IT COU LD NOT BE EFFECTED AND NO SUCH ACTUAL FINANCIAL TRANSACTION WAS EVER MADE WITH THAT INSTITUTE, THEREFORE THE POST DATED CHEQUES REMAINED AS SUCH UNUTILISED AND FOUND DURING SEARCH. ON THE BASIS OF THE STATEMENT OF THE APPELLANT AND DOCUMENT SEIZED, THE SAM E LEARNED A.O. INITIATED REGULAR ASSESSMENT PROCEEDING OF GIACR. DURING COURSE OF ASSESSMENT, GIACR ALSO DENIED OF HAVING ANY ACTUAL FINANCIAL TRANSACTION WITH THE APPELLANT. AFTER DUE EXAMINATION OF THEIR BOOKS OF ACCOUNT, WHEN THE LEARNED A.O. DID NOT FI ND PROOF OF ANY FINANCIAL TRANSACTION WITH THE APPELLANT, COMPLETED ASSESSMENT OF THE SAID INSTITUTE (GIACR A UNIT OF RABINDRANATH EDUCATIONAL TRUST) BY ACCEPTING THE RETURN OF INCOME FOR ASSESSMENT YEAR 2016 - 17. HOWEVER, MADE ADDITION IN THE HAND OF THE A PPELLANT, TREATING IT AS UNDISCLOSED INCOME. ON BEING APPEAL, THE LEARNED C.I.T(A) CONFIRMED THE SAID ADDITION. (REFERENCE MAY BE DRAWN TO PAGE 72 TO 78 OF PAPER BOOK.) 2.2 THAT, WHEN BOTH APPELLANT AND THE DIRECTOR OF GIACR HAVE DENIED OF HAVING ANY ACTUA L FINANCIAL TRANSACTION AND THERE IS NO PROOF OF EITHER PAYMENT OR RECEIPT OF MONEY IS FOUND EITHER FROM THE APPELLANT IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 42 OR FROM THE SAID INSTITUTE, BOTH THE AUTHORITIES BELOW HAVE COMMITTED GROSS ERROR OF LAW BY TREATING IT AS UNDISCLOSED INCOME IN THE HAND OF THE APPELLANT ON THE BASIS OF LOOSE SHEETS FOUND DURING SEARCH. FURTHER, IMPUGNED ADDITION IS MADE WITHOUT MAKING ANY FURTHER ENQUIRY AND WITHOUT HAVING ANY CORROBORATIVE EVIDENCE TO JUSTIFY THAT THE ASSESSEE HAS ACTUALLY PAID. 2.3 THAT, IT MAY BE SUBM ITTED HERE THAT, IT IS NOT THE CASE OF THE DEPARTMENT THAT, THE ASSESSEE HAD RECEIVED ANY MONEY FROM GIACR, SO THAT, IT CAN BE CONSTRUED AS INCOME IN THE HAND OF THE ASSESSEE, RATHER FROM THE LOOSE SHEETS, THE LEARNED A.O PRESUMED THAT, THE ASSESSEE MIGHT HAVE PAID IT. FURTHER, BOTH AUTHORITIES BELOW NEVER ASKED THE ASSESSEE TO JUSTIFY ITS SOURCE. IMPUGNED ADDITION HAS BEEN MADE ONLY ON THE BASIS OF PRESUMPTION WHICH IS NOT SUSTAINABLE IN THE EYE OF LAW, PARTICULARLY IN SEARCH PROCEEDING. AUTHORITIES BELOW DREW PRESUMPTION ON THE BASIS OF ADDITION MADE IN THE ASSESSMENT YEAR:2013 - 14 ( RECORDING IN THE DAIRY OF SHIVA SAI JAMI). THE VIEW OF THE AUTHORITIES BELOW IS THAT, SINCE APPELLANT HAS GIVEN LOAN TO SHIVA SAI JAMI, THEREFORE HE HAS BEEN ENGAGED IN THE BUS INESS OF PROVIDING LOANS. THIS PRESUMPTION MADE BY THE AUTHORITIES BELOW IS NOT BACKED BY ANY COGENT EVIDENCE. NO SUCH PROOF OF HAVING ANY RECORDED FINANCIAL TRANSACTIONS WAS EVER FOUND FROM THE APPELLANT DURING SEARCH. THEREFORE, THIS PRESUMPTION CANNOT B E A BASIS FOR MAKING ANY SUCH ADDITION. 2.4 THAT, THE IMPUGNED ADDITION HAS BEEN MADE BY THE LEARNED A.O. ON THE GROUND THAT, JUST BECAUSE BOTH PARTIES DENIED, WILL NOT ABSOLVE THE APPELLANT FROM PROVING THAT, THE TRANSACTION WAS NOT HAPPENED AND IT IS THE RESPONSIBILITY OF THE APPELLANT TO FURNISH SUFFICIENT EVIDENCE, SINCE THE APPELLANT FAILED, THE IMPUGNED ADDITION HAS BEEN MADE. THE LEARNED C.I.T.(A) CONFIRMED THE ADDITION BY HOLDING THAT, THE CONTENTION OF THE APPELLANT THAT, THE TRANSACTION DID NOT T AKE PLACE IS INCORRECT, PARTICULARLY WHEN, HE HAS NO CONTRARY EVIDENCE TO PROVE THE CONTENTION OF THE APPELLANT AS WRONG. (REF: PAGE 6 SECOND PARAGRAPH OF ASSESSMENT ORDER AND PARA - 6.4 OF PAGE4 OF CIT(A) ORDER.) THAT, WHEN, NO SUCH TRANSACTION ACTUALLY TOO K PLACE, IT IS NOT UNDERSTOOD HOW THE AUTHORITIES BELOW CAN DIRECT THE APPELLANT TO PROVE A NON - EXISTING FACT. THAT APART, IF TRANSACTION WOULD HAVE TAKEN PLACE, THEN CERTAINLY CHEQUES WOULD HAVE BEEN UTILISED, BUT ORIGINAL CHEQUES WERE FOUND DURING SEARCH AND ARE OUT DATED. THEREFORE IN ABSENCE OF ANY CONCRETE EVIDENCE OF ACTUAL FINANCIAL TRANSACTION AND WHEN BOTH PARTIES DENIED OF HAVING ANY TRANSACTION, NO ADDITION CAN BE MADE ON THE BASIS OF OUTDATED CHEQUES, AS SUCH ADDITION MADE OF RS.31,00,000.00 BY THE LEARNED A.O AND CONFIRMED BY C.I.T.(A) NEEDS TO BE DELETED IN THE INTEREST OF JUSTICE. UNEXPLAINED MONEY U/S.69 RS.27,36,300.00: 2.6 THAT DURING COURSE OF SEARCH, CASH OF RS.27,36,300.00 WAS FOUND FROM THE BEDROOM OF THE APPELLANT AND CASH OF RS.37,598 .00 WAS FOUND FROM THE ROOM OCCUPIED BY THE DAUGHTER. ON BEING ASKED ABOUT SOURCE, IT WAS EXPLAINED BY THE ASSESSEE THAT, OUT OF TOTAL CASH FOUND RS.24.75 LAKHS BELONG TO HUF AND RS.2,61,300.00 BELONG TO HIM. IT WAS ALSO EXPLAINED DURING POST SEARCH INQUIR Y, DETAIL CAPITAL ACCOUNT AND BALANCE IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 43 SHEET WERE FILED WHILE EXPLAINING THE CASH AVAILABILITY. HOWEVER THE LEARNED A.O MADE ADDITION TREATING IT AS UNEXPLAINED MONEY BY HOLDING THAT SINCE SAID CAPITAL ACCOUNTS AND BALANCE SHEETS WERE NOT FILED ALONG WITH T HE RETURN OF INCOME FILED, THEREFORE NOT ACCEPTABLE. ON APPEAL, THE LEARNED CIT(A) CONFIRMED THE ADDITION BY HOLDING THAT CAPITAL ACCOUNT AND BALANCE SHEET WERE PREPARED TO JUSTIFY THE AVAILABILITY OF CASH HENCE NOT ACCEPTABLE. 2.7. THAT FINDING OF LEARN ED CIT(A) IN PARA - 7.5 OF HIS ORDER THAT, IF THE APPELLANT HAD FILED CONSOLIDATED BALANCE SHEET FOR 8 YEARS BEFORE THE DDIT(INV.), BHUBANESWAR, WHY THERE WERE NOT FILED BEFORE THE ASSESSING OFFICER IS NOT KNOWN IS COMPLETELY WRONG AND CONTRARY TO THE FACTS ON RECORD. THE APPELLANT/ASSESSEE HAD FILED IT BEFORE THE DDIT(INV.) DURING POST SEARCH ENQUIRY AS WELL AS BEFORE THE LEARNED A.O DURING COURSE OF ASSESSMENT ALSO 2.8. THAT, FURTHER THE LEARNED CIT(A) OBSERVED THAT THE DRAWINGS ARE VERY LOW AND SO FAR AS AGRICULTURAL INCOME IS CONCERNED NO SUCH DECLARATION WAS GIVEN APART FROM ASSESSMENT YEAR:2013 - 14 AND 2014 - 15. THIS FINDING OF THE EARNED CIT(A) IS ALSO WRONG. IN EVERY YEAR RETURN OF INCOME BOTH IN THE CASE OF THE ASSESSEE AS WELL AS IN THE CASE OF THE H UF AGRICULTURAL INCOME IS DECLARED AND HAS BEEN ACCEPTED BY THE DEPARTMENT. THE LEARNED CIT(A) IGNORED THE RETURN OF INCOME FOR OTHER ASSESSMENT YEARS AND MADE THIS WRONG OBSERVATION. FURTHER THE ASSESSEE HAS BEEN STAYING IN HIS VILLAGE WHICH IS THE MOST R EMOTE AREA OF RAYGADA DISTRICT AND THERE IS NO BANKING FACILITY AVAILABLE TILL TODAY AND HIS FAMILY MOSTLY DEPENDS ON AGRICULTURE DRAWING OF RS.1,00,000.00 TO 5,00,000.00 IS SUFFICIENT ENOUGH FOR SURVIVAL. FURTHER THE APPELLANT WANTS TO DRAW, KIND ATTENTIO N OF THIS HON'BLE TRIBUNAL TO PAGE 11 OF THE PAPER BOOK. IN HIS STATEMENT DURING SEARCH, THE AUTHORITIES HAVE FOUND 22.4 ACRES O AGRICULTURAL LAND OWNED BY THE ASSESSEE. SINCE, FINDINGS OF THE LEARNED C.I.T(A) ARE WRONG AND CONTRARY TO THE FACTS ON RECORD, THE SAME BEING NOT SUSTAINABLE ARE LIABLE TO BE REJECTED. 2.9. THAT, WHEN AUTHORITIES BELOW COULD NOT POINT OUT ANY SPECIFIC DEFECT IN THE CASH FLOW AND BALANCE SHEET, MERELY BECAUSE IT WERE NOT FILED WITH THE RETURN OF INCOME, SAME CANNOT BE IGNORED WITH OUT JUSTIFYING WITH SUFFICIENT REASON AS TO WHY THE SAME ARE NOT ACCEPTABLE, WHEN, IT WERE CAPABLE TO EXPLAIN THE SOURCE OF AVAILABILITY OF CASH. THE CASH FLOW AND BALANCE SHEET BEING PERSONAL BALANCE SHEET, THERE IS NO SCOPE OF FILLING IT IN THE RETURN FO RM, AS THERE IS NO SUCH PROFORMA PROVIDED IN THE RETURN FORM FOR FILING UP PERSONAL BALANCE SHEET. THAT APART, THE RETURNS ARE BEING UPLOADED ELECTRONICALLY AND ARE ANNEXURE LESS, THERE IS NO SCOPE ON THE ASSESSEE TO ATTACH PERSONAL BALANCE SHEET AND CASH FLOW THEREFORE, THIS OBSERVATION OF AUTHORITIES BELOW ARE NOT SUSTAINABLE IN THE EYE OF LAW. 2.10 THAT, THESE CASH FLOW BALANCE SHEET ARE ACCEPTED BY THE LEARNED A.O AS WELL AS BY THE LEARNED C.I.T(A) UP TO ASSESSMENT YEAR:2015 - 16, THEREFORE THERE IS NO OC CASION LEFT WITH THE AUTHORITIES BELOW IN NOT ACCEPTING THE OPENING BALANCE AND AVAILABILITY OF CASH FOR ASSESSMENT YEAR:2016 - 17 IN CASE OF THE APPELLANT AND HUF. WHEN, FROM DURING SEARCH, THE APPELLANT HAS BEEN CATEGORICALLY SUBMITTING THAT, OUT OF TOTAL IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 44 CASH FOUND OF RS.24,75,000.00 BELONGS TO THE HUF. WITHOUT OBJECTING IT AND WITHOUT UTTERING A SINGLE WORD AND WITHOUT EXAMINING THE RETURN OF HUF, THE AUTHORITIES BELOW CANNOT TREAT IT AS UNEXPLAINED INCOME OF THE APPELLANT. THE APPELLANT WANTS TO DRAW KI ND ATTENTION OF THIS HON'BLE TRIBUNAL TO ANNEXURE - 7 AND 8 FROM PAGE NO.LLL TO 129 OF THE PAPER BOOK. THESE EVIDENCES CLEARLY JUSTIFIES AVAILABILITY OF CASH. IN VIEW OF THE ABOVE FACTS, IT IS MOST RESPECTFULLY SUBMITTED HERE THAT, THE IMPUGNED ADDITION OF R .S.27,36,300.00 BEING NOT SUSTAINABLE IN THE EYE OF LAW IS LIABLE TO BE DELETED IN THE INTEREST OF JUSTICE. UNEXPLAINED INVESTMENT: 2.11. THAT THE FAMILY OF THE ASSESSEE CONSISTS OF THE FOLLOWING PERSONS, SUCH AS; 1. KOTHAKOTA RAMA RAO ASSESSEE 2 . K.DAMAYANTI WIFE 3. K. SRIDHAR SON 4. K. CHANDRIKA DAUGHTER IN LAW - HAVING ONE DAUGHTER 5. G. LEELA RANI MARRIED DAUGHTER - HAVING SON AND DAUGHTER 6. G. SA TYANARAYAN SON IN LAW 2.12. THAT, DURING COURSE OF SEARCH GOLD AND JEWELLERY WERE FOUND FROM ROOM OF THE FOLLOWING PERSONS SUCH AS; 1. K.RAM RAO 1,003.58 GRAMS 2. K. CHANDRIKA 272.87 GRAMS 3. K. DAMAYANTI 1,632.19 GRAMS 4. G. LEELARANI 1,581.34 GRAMS TOTAL JEWELLERY FOUND DURING SEARCH WAS OF 4,489.980 GRAMS, OUT OF WHICH LEARNED A.O ALLOWED OF 2,050.00 GRAMS AND LEARNED C.I.T(A) ALLOWED FURTHER 350 GRAMS. SO TOTAL DISALLOWANCE UNDER DISPUTE IS 2,089.98 GRAMS. 2.13. THAT , THE AUTHORITIES BELOW DID NOT CONSIDER, THE EXPLANATION OF THE ASSESSEE THAT GOLD JEWELLERY WEIGHING OF 1500 GRAMS EACH WERE RECEIVED DURING PARTITION OF FAMILY AND DURING MARRIAGE OF THE ASSESSEE WITH K. DAMAYANTI. EVEN THOUGH, THE APPELLANT PRODUCED TH ESE EVIDENCES REPEATEDLY BEFORE LOWER AUTHORITIES WITHOUT UTTERING A SINGLE OBJECTION, AUTHORITIES BELOW SIMPLY IGNORED THESE EVIDENCES WITH AN INTENSION TO MAKE ADDITION. MARRIAGE OF THE ASSESSEE TOOK PLACE IN THE YEAR: 1963 AND DURING MARRIAGE BOTH HUSBA ND AND WIFE RECEIVED 1,500 GRAM GOLD AND JEWELLERY. FURTHER, DURING FAMILY PARTITION IN THE YEAR: 1969, THE APPELLANT HAS RECEIVED HIS SHARE OF GOLD AND JEWELLERY OF 1,500 GRAMS. SINCE, THE DOCUMENTS WERE IN TELGU LANGUAGE AND IT'S ENGLISH TRANSLATED COPIE S WERE NOT AVAILABLE, IT COULD NOT BE FILED IN FIRST PAPER BOOK, HOWEVER THE APPELLANT SUBMITTED IT IN THE SECOND PAPER BOOK. THESE TWO DOCUMENTS WERE FILED IN POST SEARCH ENQUIRY IN ASSESSMENT PROCEEDING AS WELL AS BEFORE C.I.T.(A), AS SUCH, ARE NOT NEW D OCUMENTS. 2.14. THAT, THE APPELLANT WANTS TO DRAW KIND ATTENTION OF THIS HON'BLE TRIBUNAL TO PAGE NO. 130 OF PAPER BOOK IN ANNEXURE - 9. ON PERUSAL OF THIS DOCUMENT, IT WILL BE CLEAR THAT OUT OF 3,000 GRAMS RECEIVED AT THE TIME OF MARRIAGE AND PARTITION, THE APPELLANT HAD SPENT GOLD AND JEWELLERY OF 1,526.420 GRAMS ON DIFFERENT OCCASIONS. BALANCE GOLD JEWELLERY AVAILABLE WITH THE ASSESSEE WAS OF 1,473.580 GRAMS, FURTHER DURING THE ASSESSMENT YEAR:2015 - 16, THE APPELLANT PURCHASED GOLD BAR IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 45 OF SIX NUMBER WEIGHIN G 616.4 GRAMS WHICH WERE DISCLOSED IN THE CAPITAL ACCOUNT AND BALANCE SHEET FOR ASSESSMENT YEAR:2015 - 16 AND HAS NOT BEEN DISPUTED BY THE AUTHORITIES BELOW. (REFERENCE TO PAGE NO. 140 TO 142 OF PAPER BOOK) WHEN PURCHASE SLIPS WERE RECOVERED DURING SEARCH AND FORMED PART OF SEIZED MATERIALS MARKED AS KRR - 11, AND RELATES TO ASSESSMENT YEAR: 2015 - 16, THE OBSERVATION OF THE LEARNED CIT(A) THAT THE ASSESSEE FAILED TO EXPLAIN SOURCE OF 616.400 GRAMS IS NOT CORRECT AT ALL. FURTHER, INVESTMENT MADE IN PREVIOUS ASSESS MENT YEAR CANNOT BE TAXED IN SUBSEQUENT ASSESSMENT YEAR. THE APPELLANT SUBMITS HERE WITH DETAIL CALCULATION FOR BETTER APPRECIATION OF FACT. SUCH AS; 1. GOLD JEWELLERY AVAILABLE WITH ASSESSEE 1,473.580 GRAMS 2. GOLD BAR PURCHASED IN A.Y: 2015 - 16 616.400 GRAMS 3. AS PER CBDT CIRCULAR ENTITLEMENT OF FAMILY MEMBERS INCLUDING APPELLANT 2,400.000 GRAMS TOTAL G OLD FOUND 4,489.980 GRAMS 2.15. THAT SINCE, GOLD AND JEWELLERY POSSESSED BY THE ASSESSEE ARE O UT OF VALID SOURCES, THE AUTHORITIES BELOW SHOULD NOT HAVE IGNORED EVIDENCES PRODUCED BEFORE THEM AND SHOULD NOT HAVE MADE ADDITION OF 2089.980 GRAMS VALUED AT RS.58,16,414.00 TREATING AS UNEXPLAINED INVESTMENT. IN VIEW OF THIS, IT MAY BE RESPECTFULLY SUBM ITTED HERE THAT, IMPUGNED ADDITION OF RS.58,16,414.00 SUSTAINED BY THE LEARNED C.I.T(A) BEING NOT JUSTIFIED IS LIABLE TO BE DELETED IN THE INTEREST OF JUSTICE. 2.16.THAT WITHOUT PREJUDICE TO THE ABOVE SUBMISSION, IT MAY BE FURTHER SUBMITTED THAT, DURING SE ARCH, JEWELLERIES WERE FUND FROM DIFFERENT ROOMS OF THE FAMILY MEMBERS AND ALL ARE ADDED IN THE HAND OF THE ASSESSEE. WHEN, GOLD AND JEWELLERY WERE FOUND FROM ROOM OF FOUR ADULT MEMBERS, CERTAINLY TOTAL JEWELLERIES WERE NOT IN POSSESSION OF THE APPELLANT, THEREFORE THE APPELLANT CANNOT BE HELD RESPONSIBLE TO EXPLAIN AND NO ADDITION CAN BE MADE IN THE HAND OF THE ASSESSEE/APPELLANT. IMPUGNED ADDITION WAS MADE IN THE HAND OF THE APPELLANT BY APPLYING SECTION 69 OF THE ACT, WHICH HAS NO APPLICATION AT ALL. WHE N DURING SEARCH, IT IS FOUND THAT THE ASSESSEE IS IN POSSESSION OF 1,003.580 GRAMS ONLY, THE AUTHORITIES BELOW HAVE COMMITTED GROSS ERROR OF LAW IN DIRECTING THE ASSESSEE TO EXPLAIN SOURCE OF ACQUISITION OF TOTAL GOLD AND JEWELLERY OF 4, 489.980 GRAMS, AND IN MAKING ADDITION OF VALUE OF JEWELLERY OF 2,089.98 GRAMS. THE IMPUGNED ADDITION THUS WAS MADE ON GROSS VIOLATION OF PRINCIPLES OF LAW, HENCE NOT SUSTAINABLE IN THE EYE OF LAW AS SUCH IS LIABLE TO BE DELETED IN THE INTEREST OF JUSTICE. IN ADDITION TO THE ABOVE, LD. AR FURTHER SUBMITTED THAT MERELY THE DOCUMENTS FOUND IN THE HANDS OF THE ASSESSEE COULD NOT BE ADDED IN THE HANDS OF THE ASSESSEE BECAUSE THE TRANSACTION WAS NOT OCCURRED AND HE FURTHER STATED THAT M/S RAVINDRA NATH EDUCATION AL TRUST WAS SELECTED IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 46 FOR SCRUTINY AND ORDER HAS BEEN COMPLETED U/S.143(3) OF THE ACT ON 29.12.2017 BY THE SAME AO IN WHICH THERE IS NO ANY ADDITION IN THIS REGARD AND NOTICE WAS ALSO ISSUED U/S.153C OF THE ACT ON 21.02.2017 TO THE RAVINDRA NATH EDUCATION AL TRUST. 24 . ON THE OTHER HAND, LD. DR RELIED ON THE ORDER OF AUTHORITIES BELOW AND SUBMITTED THAT THESE DOCUMENTS WERE FOUND IN THE POSSESSION OF THE ASSESSEE, THEREFORE, ACTION SHOULD BE TAKEN AGAINST THE ASSESSEE. DURING THE COURSE OF SEARCH PROCEEDING S VARIOUS DOCUMENTS WERE FOUND WHICH CLEARLY SHOWS THAT THE ASSESSEE WAS ENGAGED IN LOAN/ADVANCE AND MONEY LENDING BUSINESS, THEREFORE, IT CAN BE CLEARLY ESTABLISHED THAT THERE WAS A TRANSACTION BETWEEN THE PARTIES IN CASH. IT WAS ALSO CONTENDED BY THE LD. DR THAT THE IMPOUNDED DOCUMENT CLEARLY ESTABLISHED THAT MONEY WAS RECEIVED BY THE CHAIRMAN. 25 . AFTER HEARING BOTH THE SIDES AND PERUSING THE ENTIRE MATERIAL AVAILABLE ON RECORD AND THE ORDER OF THE AUTHORITIES BELOW, WE NOTED IN THIS REGARD THAT THERE W AS A DOCUMENT FOUND IN WHICH CLEARLY STATED THAT THE MONEY HAS BEEN RECEIVED BY THE DIRECTOR OF GIACR. ON PERUSAL OF PAPER BOOK, WE NOTICED THAT THE RECEIPTS HAVE BEEN ISSUED BY THE CHAIRMAN OF THE INSTITUTE OF ADVANCE COMPUTER , RAYAGADA, WHICH IS MANAGED BY RABINDRANATH EDUCATION TRUST, RAYAGADA AND IT IS ALSO FOUND THAT THE BLANK CHEQUE ISSUED BY THE AUTHORISED SIGNATORY OF IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 47 INSTITUTE OF ADVANCE COMPUTER AND RESEARCH(ICAR) AND ON FURTHER PERUSAL OF PAGE NO.76, 77 & 78, IT IS CLEARLY STATED THAT THE GIACR IS MANAGED BY RABINDRANATH EDUCATION TRUST, RAYAGADA. THE CASE OF RABINDRANATH EDUCATION TRUST HAS BEEN SCRUTINIZED U/S.143(3) OF THE ACT IN WHICH THERE IS NO ANY ADDITION MADE BY THE AO IN THIS REGARD WHICH SHOWS THAT THERE WAS NO ANY TRANSACTION OCCURRED BETWEEN THE PARTIES. MERELY FOUND THE DOCUMENTS AND IF THERE IS NO TRANSACTION IT CANNOT BE SAID THAT THE ASSESSEE HAS DONE THE TRANSACTIONS OUTSIDE HIS BOOKS OF ACCOUNTS OR MERELY FOUND THE DOCUMENTS IN THE NAME OF ANYBODY CANNOT BE SAID THAT THE TRANSAC TIONS HAVE BEEN OCCURRED UNLESS AND UNTIL IT IS NOT ESTABLISHED BY CONFIRMATION FROM BOTH THE PARTIES. THEREFORE, THIS ADDITION MADE BY THE AO IS DELETED AND T HIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 2 6 . GROUND NO S . 3 & 4 ARE RELATING TO ADDITION O F RS.27,36,300/ - MADE BY THE AO U/S.69 OF THE ACT AS UNEXPLAINED MONEY. 27 . DURING THE COURSE OF SEARCH OPERATION , THERE WAS A TOTAL AMOUNT OF RS.27,36,300/ - FOUND FROM THE BEDROOM OF SHRI KOTHAKOTA RAMA RAO AND RS.37,590/ - WAS FOUND FROM THE ROOM OCCUPIED BY SMT. G.LEELA RANI, DAUGHTER OF THE ASSESSEE. IN RESPONSE TO THIS QUERY, THE ASSESSEE SUBMITTED THAT RS.24.75 LAKHS BELONGS TO HUF AND RS. 2.60 BELONGS TO INDIVIDUAL STATUS OF THE ASSESSEE. IN SUPPORT OF THE JUSTIFICATION OF THE IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 48 CASH, THE ASSESSEE SUBMIT TED THE STATEMENT OF AFFAIRS OF HINDU UNDIVIDED FAMILY(HUF) BUT THE LD. AO DID NOT ACCEPT THE SUBMISSIONS AND REJECTED THE CAPITAL ACCOUNTS STATEMENT OF AFFAIRS SHOWING THE ACCUMULATION OF CASH ALONG WITH THE INCOME TAX RETURN FILED BY THE ASSESSEE OF HUF AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE OF RS.27,36,300/ - WHICH HAVE BEEN CONFIRMED BY THE CIT(A) . LD. AR SUBMITTED THAT THE CASH AMOUNT OF RS.24.75 LAKHS BELONGS TO HUF AND HE IS FILING REGULARLY INCOME TAX RETURN. HE ALSO REFERRED TO THE PAPER BOOK PAGE NO.129 IN WHICH HE HAS SHOWN THE BALANCE SHEET OF KOTHAKOTA RAMA RAO (HUF) AND TRIED TO JUSTIFY THE FIGURES SHOWN IN THE STATEMENT OF AFFAIRS. 29. ON THE OTHER HAND, LD. DR RELIED ON THE ORDER OF LOWER AUTHORITIES AND HE SUBMITTED THAT THERE IS NO A NY PROOF OF THE INCOME SHOWN BY THE ASSESSEE IN THE STATEMENT OF AFFAIRS AS PLACED IN THE PAPER BOOK AT PAGE NO.129 AND THE ASSESSEE HAS FAILED TO SUBSTANTIATE THE AGRICULTURE INCOME SHOWN IN THE INCOME TAX RETURN. THERE IS NO PROOF OF ANY LAND OWNED BY HU F. THEREFORE, THE INCOME SHOWN IN THE STATEMENT OF AFFAIRS ARE NOT CORRECT. HE ALSO SUBMITTED THAT IN THE INCOME TAX RETURN FILED BY THE ASSESSEE THERE IS NO ANY STATEMENT OF AFFAIRS SUBMITTED AND NO CASH BALANCE WAS MENTIONED IN THE INCOME TAX RETURN FORM , THEREFORE, ACCUMULATION OF CASH SHOWING BY THE ASSESSEE SHOULD BE REJECTED. IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 49 30. AFTER HEARING BOTH THE SIDES AND PERUSING THE ENTIRE MATERIAL AVAILABLE ON RECORD AND THE ORDERS OF AUTHORITIES BELOW, WE FIND THAT DURING THE COURSE OF SEARCH PROCEEDINGS, THERE WAS A CASH FOUND IN THE BEDROOM OF SHRI KOTHAKOTA RAMA RAO AND RS.37,590/ - WAS FOUND FROM THE ROOM OCCUPIED BY SMT. G.LEELA RANI, DAUGHTER OF THE ASSESSEE. FROM THE ABOVE CASH HE SUBMITTED THAT THE CASH OF RS.24.75 LAKHS BELONGS TO KOTHAKOTA RAMA RAO (HUF). IN SUPPORT OF THIS, HE SUBMITTED A BALANCE SHEET/STATEMENT OF AFFAIRS OF KOTHAKOTA RAMA RAO (HUF), WHICH IS PLACED AT PAPER BOOK PAGE NO.129 IN WHICH HE HAS SHOWN HIS AGRICULTURAL INCOME ALONG WITH OTHER INCOMES, DETAILS OF WHICH ARE AS UNDER : - K. RAMA RAO (HUF) BALANCE SHEET RS.IN LAKHS 31.03.09 31.03.10 31.03.1 1 31.03.12 31.03.13 31.03.14 31.03.15 12.02.2016 31.03.2016 1ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR 6TH YEAR 7TH YEAR 8TH YEAR 9TH YEAR LIABILITIES CAPITAL OPENING BALANCE 2.00 5.00 8.10 11.30 14.50 18.25 24.05 30.15 30.15 ADD INCOME 2.00 2.10 1.90 1.90 2.05 2.10 2.60 2.60 2.70 BUSINESS INCOME AGRICULTURE INCOME ., 2.00 2.00 2.50 2.50 3.00 5.00 5.00 5.00 5.00 6.00 9.10 12.50 15.70 19 .55 25.35 31.65 37.75 37.85 LESS: DRAWINGS 1.00 1.00 1.20 1.20 1.30 1.30 1.50 2.50 2.50 JAGANNATH MILLS 5.00 5.00 TOTAL 5.00 8.10 11.30 14.50 18.25 24.05 30.15 _ 40.25 40.35 HOUSE CONSTRUCTIONS 3.50 3.50 3.50 3.50 HOUSE REPAIRS 1.50 1 .50 1.50 1.50 ASSETS GOLD BARS(2) - - - - - - 5.49 5.49 5.49 SUNDRY DEBTORS 5.00 5.00 CASH BALANCE 5.00 8.10 11.30 14.50 18.25 19.05 19.66 24.76 24.86 5.00 | 8.10 11.30 14.50 18.25 24.05 30.15 40.25 40.35 NOTE : OLD GOLD GIFTED TO SON K.SRIDHAR AT THE TIME OF MARRIAGE 500 GMS ON 16/02/1997 IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 50 HOWEVER, HE HAS NOT FILED ANY SUPPORTING DOCUMENTS FOR AGRICULTURAL INCOME SO THAT THE AGRICULTURAL INCOME CAN BE JUSTIFIED. WE ALSO OBSERVED THAT THE FIGURES OF AGRICULTURAL INCOME IS VERY ZIG - ZAG. THEREFORE, AS PER OUR CONSIDERED OPINION, THIS ISSUE SHOULD GO BACK TO THE FILE OF AO FOR VERIFICATION OF ACCUMULATION OF CASH AS STATED ABOVE AND THE ASSESSEE IS DIRECTED TO PROVE THE SOURCE OF INCOME SHOWN AS ABOVE. THE ASSESSEE WILL ALSO COOPERATE WITH THE AO FOR ABOVE PURPOSE WITHOUT SEEKING ANY UNNECESSARY ADJOURNMENTS. NEEDLESS TO SAY, THE ASSESSEE SHALL BE PROVIDED REASONABLE OPPORTUNITY OF BEING HEARD TO SUBSTANTIATE HIS CLAIMS. THUS, THIS GROUND OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 3 1 . GROUND NO.5 IS RELATING TO CONFIRMATION OF ADDITION OF RS.58,16,414/ - MADE BY THE AO ON ACCOUNT OF UNEXPLAINED INVESTMENT IN GOLD ORNAMENTS. 32. DURING THE SEARCH AND SEIZURE OPERATION CONDUCTED U/S.132 OF THE ACT, FOLLOWING GOLD WERE FOUND FROM THE RESIDENTIAL PREMISES OF THE ASSESSEE WHICH IS AS UNDER : - SI. NO. TOTAL NET WEIGHT OF JEWELLERY FOUND NAME VALUE 1 1003.580 GRAMS K. RAMA RAO 28,84,806 2 272.870 GRAMS K. CHANDRIKA 7,42,890 3 1632.190 GRAMS K. DAMAYANTI 4 4,87,990 4 1581.340 GRAMS K. LILA RANI 43,79,507 TOTAL 4489.980 GRAMS 1,24,95,193 IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 51 DURING THE COURSE OF ASSESSMENT, IT WAS ASKED TO THE ASSESSEE TO JUSTIFY THE ABOVE GOLD AND JEWELLERY. DURING THE COURSE OF SEARCH PROCEEDINGS, HE ALSO STATED THAT THESE GOLD ORNAMENTS WORTH OF RS.16,22,000/ - IN THE F.Y.2014 - 2015 AND 2015 - 2016 WAS PURCHASED AND REST GOLD WERE RECEIVED FROM INHERITED OR RECEIVED FROM RELATIVES ON CEREMONIAL OCCASIONS. DURING THE COURSE OF ASSESSMENT, THE AO ASKED TO JUSTIFY THE ABOVE GOLD F OUND DURING THE COURSE OF SEARCH AND SEIZURE PROCEEDINGS. IN THIS REGARD, THE ASSESSEE COULD NOT SUBSTANTIATE WITH SUPPORTING DOCUMENTS BUT THE AO CONSIDERED THE STATUS OF THE ASSESSEE AND HAILING FROM TRADING COMMUNITY AND BEING A SENIOR CITIZEN AND MARRI ED DURING THE YEAR 1963 AND THE SPECIAL FUNCTION CEREMONIES INHERITANCE AND CUSTOM OF INDIAN TRADITIONS. THE AO ALLOWED THE FOLLOWING GOLD JEWELLERY WHICH WAS TOTAL 2050 GRAMS WHICH READS AS UNDER : - SL.N O. NAME OF THE PERSON DESCRIPTION QUANTITY OF GOLD J EWELLERY ALLOWED 1 SRI K RAMA RAO SINCE, HE HAS CLAIMED THAT OUT OF 616 GMS ACQUIRED DURING THE F.Y.2014 - 15 OUT OF WHICH100 GMS IS ATTRIBUTABLE TO HIM AND 500 GMS BELONGS TO HER DAUGHTER - IN - LAW. 100 GRAMS 2 SMT. CHANDRIKA AS CLAIMED BY THE ASSESSEE TO BE ATTRIBUTABLE TO THE DAUGHTER - IN - LAW 500 GMS WAS ALLOWED. 500 GMS 3 SMT. K DAMAYANTI WIFE OF THE ASSESSEE WHICH HE HAS CLAIMED THAT HE HAS MARRIED IN 1963 AND SHE WAS PROCESSING 1632.190 GMS BUT NO EVIDENCE WAS FURNISHED. 500 GMS 4 SMT. G LEELA RANI DAUG HTER OF THE ASSESSEE AND STAYING ALONG WITH THE ASSESSEE AND HER HUSBAND WAS A PARTNER IN THE FIRM M/S JAGANNATH MILLS WHICH IS MANAGED BY THE ASSESSEE 500 GMS 5 MS K NANDITA GRANDDAUGHTER OF THE ASSESSEE. SINCE, SHE WAS STAYING WITH THE ASSESSEE AND UNMA RRIED GRANDDAUGHTER CONSIDERING THE TRADING BACK GROUND OF THE ASSESSEE. 250 GMS 6 K. SRIDHAR SON OF THE ASSESSEE AND STAYING WITH THE 100 GMS IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 52 ASSESSEE 7 G.SATYANARAYAN SON - IN - LAW OF THE ASSESSEE WHO IS STAYING WITH ASSESSEE AND WHO IS ALSO PARTNER IN M/ S JAGANNATH MILLS WHICH IS MANAGED BY THE ASSESSEE. 100 GMS TOTAL 2050 GMS BUT HE DID NOT ALLOW 616 GRAMS OF GOLD PURCHASED IN THE FINANCIAL YEAR 2014 - 2015 & 2015 - 2016 AND DISALLOWED BALANCE GOLD JEWELLERY AND BULLION WEIGHING 2439.80 GMS (4489.980 2020) VALUED AT RS.67,90,235/ - AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. 33. AGGRIEVED FROM THE ORDER OF AO, THE ASSESSEE APPEALED BEFORE THE CIT(A) AND THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, HE PARTLY ALLOWED THE APPE AL OF THE ASSESSEE. THE CIT(A) DID NOT ACCEPT 616.400 GMS OF GOLD JEWELLERY STATED TO BE PURCHASED BY HIM FOR WANT OF PURCHASE BILLS AND TREATED IT AS UNEXPLAINED. THE CIT(A) ALSO AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE THAT IN CASE OF G.SINDHU AN D G.RAHUL, ALLOWED 350 GRAMS GOLD, RESULTANTLY THERE WAS A TOTAL UNEXPLAINED GOLD JEWELLERY OF 2089.98 GRAMS (1473.580+616.400) VALUED AT RS.58,16,414/ - . 34. AGGRIEVED FROM THE ABOVE ORDER OF CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE INCOME TAX APPELLAT E TRIBUNAL. 35. LD. AR REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND SUBMITTED THAT GOLD WAS PURCHASED FROM THE ACCOUNT OF HUF WHICH IS CLEARLY SHOWING IN THE STATEMENT OF AFFAIRS WHICH IS KEPT AT PAPER BOOK PAGE NO.129 AND IN PAPER BOOK PAGE NO.130, THE DETAILS OF IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 53 RECONCILIATION OF GOLD WERE PRODUCED BEFORE THE CIT(A) BUT HE DID NOT ACCEPT THE RETURN OF INCOME OF HUF WERE ALSO FILED BEFORE THE CIT(A) FOR PRECEDING TWO ASSESSMENT YEARS AND HE ALSO REFERRED TO PAPER BOOK NO.2 PAGES 13 TO 7 0 REGARDING MARRIAGE, DATE OF DIVISION OF PROPERTY, WHICH IS PLACED ON RECORD. 36. ON THE OTHER HAND, LD. DR RELIED ON THE ORDERS OF AUTHORITIES BELOW AND CONTESTED BY WAY OF HIS WRITTEN SUBMISSIONS WHICH HAS BEEN REPRODUCED AS ABOVE. HE FURTHER SUBMITTED THAT THE DOCUMENTS SUBMITTED BY WAY OF PAPER BOOK IN PAPER BOOK NO.2 PAGE NOS.13 TO 17 CANNOT BE RELIED BECAUSE IT WAS NOT PRODUCED BEFORE THE AUTHORITIES BELOW. THE ASSESSEE WAS UNABLE TO PRODUCE THE COPY OF PURCHASE BILLS OF 616.400 GRAMS OF GOLD. THE CI T(A) AFTER CONSIDERING ALL THE DETAILED SUBMISSIONS, HE HAS RIGHTLY PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. THEREFORE, THE ORDER OF THE CIT(A) SHOULD BE RESTORED. 37. AFTER HEARING BOTH THE SIDES AND PERUSING THE ENTIRE MATERIAL AVAILABLE ON RECORD AN D THE ORDERS OF AUTHORITIES BELOW WE FIND THAT THE CIT(A) HAS ALLOWED 350 GRAMS OF GOLD ORNAMENTS. DURING THE COURSE OF SEARCH PROCEEDINGS, TOTAL GOLD WERE FOUND AT 4489.980 GRAMS OUT OF WHICH THE AUTHORITIES BELOW HAVE ALLOWED 2400 GRAMS AND REMAINING GOL D 1473.580+616.400 = 2089.980 WERE DISALLOWED. AFTER GOING THROUGH THE RECORDS OF THE AUTHORITIES BELOW, WE NOTED FROM THE PARA 9 IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 54 OF THE ASSESSMENT ORDER , THAT THE ASSESSEE HAD FILED CONFIRMATION LETTER OF THE PERSONS WHOSE NAME AS STATED ABOVE BUT THESE CONFIRMATIONS HAVE NOT BEEN DISREGARDED BY THE AO AS WELL AS IT HAS NOT BEEN CONSIDERED BY THE CIT(A). FURTHER , WE NOTICED FROM THE AOS ORDER AT PAGE NO.8 TOPSIDE IN QUESTION NO. 1 4, THE DETAILS OF JEWELLERY FOUND IN THE NAME HAS BEEN MENTIONED. THIS TA BLE HAS BEEN REPRODUCED AS EARLIER, IS ALSO REPRODUCED HEREUNDER FOR MORE CLARITY : - SI. NO. TOTAL NET WEIGHT OF JEWELLERY FOUND NAME VALUE 1 1003.580 GRAMS K. RAMA RAO 28,84,806 2 272.870 GRAMS K. CHANDRIKA 7,42,890 3 1632.190 GRAMS K. DAMAYANTI 44,87,990 4 1581.340 GRAMS K. LILA RANI 43,79,507 TOTAL 4489.980 GRAMS 1,24,95,193 FROM THE ABOVE TABLE IT IS CLEAR THAT ONLY 1003.80 GRAMS BELONGS TO THE ASSESSEE AND REST JEWELLERY BELONGS TO THE RESPECTIVE NAMES AS MENTIONED AB OVE. THIS FACT HAS NOT BEEN CONTROVERTED BY ANY OF THE AUTHORITIES BELOW. THEREFORE, THE REMAINING JEWELLERY SHOULD BE TAXED IN THE HANDS OF THE RESPECTIVE NAMES/OWNERS. THE ASSESSEE IS REQUIRED TO EXPLAIN ONLY 1003.580 GRAMS. SINCE THE ASSESSEE IS A MALE PERSON SO HE IS ENTITLED FOR AS PER CBDT INSTRUCTION NO. 1916 OF 1994 A ND HE IS ENTITLED FOR 100 GRAMS OF JEWELLERY . FURTHER, CONSIDERING THE STATUS OF THE ASSESSEE, BEING A SENIOR CITIZEN OF 73 YEARS OLD, WHO BELONGS TO WELL - ESTABLISHED FAMILY AND LOOKING TO THE RELIGIOUS FUNCTIONS AND MARRIAGE IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 55 CEREMONIES IN THE FAMILY OF THE ASSESSEE , WE DEEM IT PROPER TO ALLOW 200 GRAMS GOLD OUT OF 903.580 (1003.580 - 100) GRAMS. NOW, GOLD REMAINED TO BE EXPLAINED BY THE ASSESSEE OF 703.580 GRAMS, OUT OF WHICH 616.400 GRAMS GOLD WERE PURCHASED FROM THE HUFS FUND AS CLAIMED BY THE ASSESSEE . THUS, IF THE ASSESSEE WOULD BE ABLE TO JUSTIFY THE CASH AVAILABILITY IN THE HANDS OF THE HUF BEFORE THE AO AND IT WOULD BE ABLE TO NULLIFY THE OBSERVATION OF THE CIT(A) I.E. PRODUCTION OF PURCHASE BILL, THEN THE ASSESSEE WILL GET RELIEF OF 6 16.400 GRAMS OR TO THE EXTENT POSSIBLE AND THE REST QUANTITY IS HEREBY DISALLOWED. ACCORDINGLY, WE RESTORE THIS ISSUE TO THE FILE OF AO TO CONSIDER THE CLAIM OF THE ASSESSEE AS PER OUR ABOVE OBSERVATION S. THIS GROUND OF APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 38 . IN THE RESULT, APPEALS OF THE ASSESSEE I.E. IT(SS)A NO.132/CTK/2018 IS PARTLY ALLOWED, ITA NOS.19&20/CTK/2019 ARE DISMISSED AND ITA NO.386/CTK/2018 IS PARTLY ALLOWED F OR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 31 / 0 8 / 20 20 . S D/ - ( C.M.GARG ) SD/ - (L.P.SAHU) / JUDICIAL MEMBER / ACCOUNTANT MEMBER CUTTACK ; DATED 31 / 0 8 /20 20 PRAKASH KUMAR MISHRA, SR.P.S. IT (SS) A NO. 132 /CTK/2018 ITA NOS.19&20/CTK/2019 ITA NO.386/CTK/2018 56 / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( SENIOR PRIVATE SECRETARY ) , /ITAT, CUTTACK 1. / THE APPELLANT - KOTHAKOTA RAM A RAO, KOTHAPETA, RAYAGADA, DISTRICT - RAYAGADA 2. / THE RESPONDENT - ACIT, CENTRAL CIRCLE - 1, BHUBANESWAR 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, CUTTACK 6. / GUARD FILE. //TRUE COPY//