(Smt.) Anju Singh, Lucknow V. Asstt. Commissioner of Income Tax, Lucknow

ITA 391/LKW/2014

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 2478 (ITAT-LUCKNOW)
• Duration Of Justice: 4 year(s) 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-03-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2004-2005
• Appeal Filed On: 16-05-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K MADHUK
• Keywords: Unexplained investment; Capital asset; Gift; Search and seizure; Charitable institution; Opportunity of being heard; Bonafide belief; Source of fund; Cost of acquisition; Valuation report; Set aside
• Section: 271(1)(c); 69C; 133A; 153A; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCHA, LUCKNOW BEFORE SHRI. A. D. JAIN, VICE PRESIDENT AND SHRI. T.S. KAPOOR, ACCOUNTANT MEMBER ITA NO. 390 TO 396/LKW/2014 ASSESSMENT YEAR: 2003 - 04 TO 2009 - 10 SMT. ANJU SINGH 105, GAURA BAGH, KURSI ROAD LUCKNOW ACIT CENTRAL CIRCLE 1 LUCKNOW T AN /PAN : AMNPS2089Q (APP ELL ANT) (RESPONDENT) APPELLANT BY: SHRI RAKESH GARG, ADVOCATE MS. SWETA MITTAL, FCA RESPONDENT BY: SHRI S. K. MADHUK, CIT (DR) DATE OF HEARING: 07 02 2019 DATE OF PRONOUNCEMENT: 08 0 3 2019 O R D E R PER BENCH: THIS IS A GROUP OF SEVEN APPEALS FILED BY THE ASSE SSEE AGAINST THE CONSOLIDATED ORDER OF THE LD. CIT(A) DATED 30/1 2/2011. THE ASSESSEE ORIGINALLY HAD TAKEN A NUMBER OF LEGAL GRO UNDS ALONG WITH GROUNDS ON MERITS, HOWEVER, WHICH WERE LATER ON SIM PLIFIED AND CONCISE/REVISED GROUNDS OF APPEALS WERE FILED VIDE LETTER DATED 2/5/2018. ALL THE APPEALS EXCEPT APPEAL IN ASSESSM ENT YEAR 2009- 10INVOLVE SIMILAR ISSUES AND THESE WERE HEARD TOGET HER, THEREFORE, FOR THE SAKE OF CONVENIENCE, A COMMON AND CONSOLIDATED ORDER IS BEING PASSED. FOR THE SAKE OF CONVENIENCE CONCISE/REVISE D GROUNDS OF APPEAL TAKEN BY THE ASSESSEE IN ASSESSMENT YEAR 2003-04 AR E REPRODUCED BELOW:- ITA NO.390 TO 396/LKW/2014 PAGE 2 OF 40 1. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS IN PASSING THE ORDER WHICH IS I LLEGAL, IMPROPER AND AGAINST THE PRINCIPLES OF NATURAL JUST ICE. 2. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS IN PASSING THE ORDER WITHOUT GI VING ADEQUATE OPPORTUNITY OF BEING HEARD. 3. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)HAS ERRED IN LAW AND ON FACTS IN SUSTAINING THE ADDITION U/S 69 OF INCOME-TAX ACT ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE FOLLOWING PROPERTIES ON THE BASIS OF REPORT LD. VAL UATION OFFICER, WHICH ITSELF SUFFERS FROM VARIOUS INFIRMIT IES: I. PLOT NO. 28, 29, 30 &31, GAURA BAGH, LUC KNOW. II. PLOT NO. 37 & 38, GAURA BAGH, LUCKNOW III. PLOT NO. 25 & 26 GAURA BAGH, LUCKNOW IV. PLOT NO. 35, 45, 46 & KHASRA NO.45 SITUAT ED AT GAURABAGH, KURSI ROAD, LUCKNOW (1/2 SHARE, OTHER 1 /2 SHARE BELONGING TO SHRI MAHESH SINGH PATEL). 4. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS IN NOT GIVING FULL BENEFIT OF A MOUNT SURRENDERED BY SHRI K. N. SINGH PATEL, 5. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS IN NOT GRANTING RELIEF SOUGHT B Y THE APPELLANT IN APPEAL. 6. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER OR WITHDRAW ANY GROUND OF APPEAL OR RAISE ANY NEW GROU ND OF APPEAL DURING THE PENDENCY OF APPEAL. 2. BESIDES ABOVE GROUNDS TAKEN IN ASSESSMENT YEAR 2003 -04, THE ASSESSEE HAS TAKEN A FURTHER GROUND BEING GROUND NO .5 IN ASSESSMENT YEARS 2004-05ND 2005-06, CHALLENGING THE ORDER OF T HE LD. CIT(A) IN SUSTAINING FURTHER ADDITIONS. SUCH GROUND OF APPEA L IN THESE YEARS READS AS UNDER:- ITA NO.390 TO 396/LKW/2014 PAGE 3 OF 40 ASSESSMENT YEAR 2004-05: 5. THE LD. CIT(A) HAS ERRED IN LAW AND ON FATS IN S USTAINING THE ADDITION OF RS.8,06,600/- UNDER SECTION 69 OF T HE ACT ON ACCOUNT OF UNDISCLOSED INVESTMENT IN PURCHASE OF PL OTS OR LAND. ASSESSMENT YEAR 2005-06: 5. THE LD. A.R. OF THE ASSESSEE HAS ERRED IN LAW AN D ON FACTS IN SUSTAINING THE ADDITION OF RS.2,86,500/- UNDER S ECTION 69 OF THE ACT ON ACCOUNT OF UNDISCLOSED INVESTMENT IN PURCHASE OF PLOTS OR LAND. 3. THE APPEAL IN ASSESSMENT YEAR 2009-10 INVOLVE ONLY ONE GROUND CHALLENGING THE ORDER OF THE LD. CIT(A) IN U PHOLDING THE ADDITION OF RS.2.50 LAKHS MADE BY THE ASSESSING OFFICER ON A CCOUNT OF LOW HOUSEHOLD EXPENSES. 4. THE BRIEF FACTS AS NOTED IN THE ASSESSMENT ORDER IN VARIOUS YEARS ARE THAT A SEARCH AND SEIZURE OPERATION UNDER SECTION 132A OF THE ACT WAS CARRIED OUT ON HARSINGAR GUTKHA/PATEL GROUP OF CASES ON 19/11/2008 AND SEVERAL COMMERCIAL AND RESIDENTIAL P REMISES OF THE ASSESSEE WERE COVERED UNDER THIS OPERATION. SIMULT ANEOUSLY, SURVEY PROCEEDINGS UNDER SECTION 133A OF THE ACT WERE ALSO CARRIED OUT AT MANY PLACES BELONGING TO THE ASSESSEE GROUP AND ITS BUSINESS ASSOCIATES. AS A RESULT OF SEARCH/SURVEY OPERATION S, VARIOUS DOCUMENTS WERE SEIZED/IMPOUNDED, RESULTANT TO WHICH THE GROUP AS A WHOLE AGREED TO SURRENDER A SUM OF RS.10 CRORES AS UNDISCLOSED I NCOME/INVESTMENT. THE DECLARATION TO THIS EFFECT WAS ORIGINALLY MADE BY SHRI O. N. SINGH PATEL, SHRI MAHESH SINGH PATEL, SMT. ANJU SINGH AND SMT. ANITA SINGH. SUBSEQUENTLY, ON 25/2/2009 AN AFFIDAVIT WAS FILED B Y SHRI. K. N. SINGH PATEL, WHO IS THE HEAD OF THE FAMILY, SHOWING THERE IN DETAILED DECLARATION AND HEAD-WISE AMOUNT OF UNDISCLOSED INC OME/INVESTMENT. ITA NO.390 TO 396/LKW/2014 PAGE 4 OF 40 IN THE AFFIDAVIT, SHRI. K. N. SINGH PATEL OWNED UP THE WHOLE SURRENDER OF RS.10 CRORES AND FURNISHED DETAILS OF ASSETS/INVEST MENTS WHICH WERE MADE BY HIM DURING SEVERAL YEARS IN THE NAME OF HIS FAMILY MEMBERS, NAMELY, SMT. ANJU SINGH, SHRI MAHESH SINGH, SMT. RA JNI PATEL, ETC. THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS IN THE CASE OF THE ASSESSEE, REQUIRED THE ASSESSEE TO PROVE AND DEMONS TRATE THE SOURCE OF FUNDS FOR MAKING INVESTMENT IN VARIOUS IMMOVEABLE A SSETS AND IN REPLY THE ASSESSEE SUBMITTED THAT THE PLOTS WERE PURCHASE D BY HER IN VARIOUS YEARS AND CONSTRUCTION WAS DONE BY HER FATHER-IN-LA W AND THE CONSTRUCTION COST WAS DULY COVERED BY THE DECLARATI ON OF SURRENDER MADE BY HER FATHER-IN-LAW SHRI. K. N. SINGH PATEL. THE REPLY OF THE ASSESSEE TO THIS EFFECT AS REPRODUCED BY THE ASSESSING OFFICER AT PAGE 17 OF HIS ORDER IS REPRODUCED BELOW:- 1. PLOT NO. 25 AT GAURABAGH, KURSI ROAD, LUCKNO W. PURCHASED ON 03.07.2007 FOR RS.2,29,760/- IN CASH. 2. PLOT NO. 26 AT GAURABAGH, KURSI ROAD, LUCKNOW. PURCHASED ON 02.06.2003 FOR RS.1,51,800/- VIDE DEMA ND DRAFT NO. 181040 DATED 30.05,2003 FOR RS.1,28,000/- AND BALANCE IN CASH. IT HAS FURTHER BEEN STATED BY ASSESSEE THAT CONSTRU CTION ON BOTH THE ABOVE PLOTS 25 & 26 WAS DONE BY FATHER-IN- LAW OF ASSESSEE SHRI K.N. SINGH PATEL IN THE FINANCIAL YEA R 2007-08. THE COST OF CONSTRUCTION HAS BEEN INCLUDED BY HIM I N THE SURRENDERED AMOUNT OF RS.90 LACS IN THAT YEAR. 3. PLOT NO, 28-29 AT GAURABAGH, KURSI ROAD, LUCKNO W. PURCHASED ON 30.05.2003 FOR RS.3,03,600/- VIDE DEMA ND DRAFT NO. 181010 DATED 24.05.2003 FOR RS.2,56,000/- AND BALANCE IN CASH. 4. PLOT NO.30 AT GAURABAGH, KURSI ROAD, LUCKNOW . PURCHASED ON 30.05.2003 FOR RS.1,51,800/- VIDE DEMA ND DRAFT NO. 181010 DATED 24.05.2003 FOR RS.1,28,000/- AND BALANCE IN CASH. ITA NO.390 TO 396/LKW/2014 PAGE 5 OF 40 5. PLOT NO. 31 AT GAURABAGH, KURSI ROAD, LUCKNOW . PURCHASED ON 02.06.2003 FOR RS.1,51,800/- VIDE DEMA ND DRAFT NO. 181009 DATED 24.05.2003 FOR RS.1,28,000/- AND BALANCE IN CASH. IT HAS FURTHER BEEN STATED BY ASSESSEE THAT CONSTRU CTION ON THE ABOVE PLOTS NOS. 28, 29, 30 AND 31 WAS DONE BY FATHER- IN-LAW OF ASSESSEE, SHRI K.N. SINGH PATEL IN THE FI NANCIAL YEAR 2008-09. THE COST OF CONSTRUCTION HAS BEEN INCLUDED BY HIM IN THE SURRENDERED AMOUNT OF RS.125 LACS IN THAT YE AR. 6. PLOT NO. 37 AT GAURABAGH, KURSI ROAD, LUCKNOW . PURCHASED ON 30.05.2001 FOR RS.96,200/-. 7. PLOT NO. 38 AT GAURABAGH, KURSI ROAD, LUCKN OW. PURCHASED ON 30.05.2001 FOR RS.1,00,200/-. IT HAS FURTHER BEEN STATED BY ASSESSEE THAT CONSTRU CTION ON THE ABOVE PLOTS 37 AND 38 WAS DONE BY FATHER-IN-LAW OF ASSESSEE SHRI K.N. SINGH PATEL IN THE FINANCIAL YEA R 2002-03. THE COST OF CONSTRUCTION HAS BEEN INCLUDED BY HIM I N THE SURRENDERED AMOUNT OF RS.75 LACS IN THAT YEAR. 8. PLOT NO. 45 AT GAURABAGH, KURSI ROAD, LUC KNOW PURCHASED ON 14.06.2001 FOR RS.93,200/-. IT HAS FURTHER BEEN STATED BY ASSESSEE THAT CONSTRU CTION ON THE ABOVE PLOT ALONGWITH OTHER ADJOINING PLOTS IN T HE NAME OF SHRI MAHESH SINGH PATEL WAS DONE BY FATHER-IN-LA W OF ASSESSEE SHRI K.N. SINGH PATEL IN THE FINANCIAL YEA RS FROM 1999 TO 2002-03 AND APPROXIMATELY RS.22 LACS WAS TH E COST OF CONSTRUCTION WHICH HAS BEEN BORNE BY SHRI K.N. S INGH PATEL. 9. PLOT NO. 418 AND 420 AT MAHONA, BAKSHI KA TALAB , LUCKNOW. PURCHASED ON 18.02.2005 FOR RS.2,86,500/- VIDE DEMAND DRAFT NO. 197331 DATED 11.02.2005 AND BALANC E IN CASH. 5. THE ASSESSING OFFICER REFERRED THE MATTER RELATI NG TO INVESTMENT IN CONSTRUCTION IN VARIOUS PROPERTIES TO THE VALUATION OFFICER. IN THE ITA NO.390 TO 396/LKW/2014 PAGE 6 OF 40 VALUATION REPORT SUBMITTED BY THE VALUATION OFFICER AND IN THOSE ESTIMATED INVESTMENTS DECLARED BY THE ASSESSEE, THE RE WERE CERTAIN DIFFERENCES AND, THEREFORE, THE ASSESSING OFFICER H ELD THAT THE VALUATION AS DONE BY THE VALUATION OFFICER WILL HAVE TO BE TA KEN INTO ACCOUNT AND, THEREFORE, HE ADDED THE DIFFERENCE IN COST OF CONST RUCTION BETWEEN THE COST OF CONSTRUCTION DECLARED BY THE ASSESSEE AND E STIMATED BY THE VALUATION OFFICER. WHEN THE VALUATION REPORTS WERE CONFRONTED TO THE ASSESSEE, THE ASSESSEE SUBMITTED THAT THE INVESTMEN T MADE IN ASSESSMENT YEAR 2002-03 CANNOT BE TAKEN INTO ACCOUN T, AS THE SAME WAS BEYOND THE PERIOD COVERED UNDER SEARCH. HOWEVE R, THE ASSESSING OFFICER DID NOT ACCEPT THE CONTENTION OF THE ASSESS EE AND INSTEAD HE DIVIDED THE AMOUNT OF INVESTMENT IN ASSESSMENT YEAR 2002-03 INTO SIX YEARS AND ADDED BACK THE PROPORTIONATE AMOUNT FROM ASSESSMENT YEARS 2003-04 TO 2008-09. AFTER TAKING INTO ACCOUNT ALL THESE FACTORS, THE ASSESSING OFFICER HELD THAT THE ASSESSEE HAD MADE T OTAL INVESTMENTS IN VARIOUS YEARS AS UNDER:- A.Y. TOTAL INVESTMENT DURING THE YEAR 2003-04 99,77,772/- 2004-05 3,13,331/- 2005-06 71,02,423/- 2006-07 65,25,577/- 2007-08 48,97,496/- 2008-09 53,98,482/- 2009-10 12,65,195/- TOTAL RS.3,54,80,276/- 6. THE ASSESSING OFFICER AFTER NOTING DOWN THE INVE STMENTS MADE BY THE ASSESSEE ON THE BASIS OF DVOS REPORT AND OTHER ADJUSTMENTS, ALLOWED THE BENEFIT OF DECLARATION MADE BY SHRI. K. N. SINGH PATEL DURING ITA NO.390 TO 396/LKW/2014 PAGE 7 OF 40 THE RESPECTIVE ASSESSMENT YEARS. THE RESPECTIVE AS SESSMENT YEARS FOR WHICH SHRI. K. N. SINGH PATEL HAD MADE SURRENDER IN THE NAME OF THE ASSESSEE AND AS CONSIDERED BY THE ASSESSING OFFICER ARE AS UNDER:- (I) IN ASSESSMENT YEAR 2003-04, THE ASSESSING OFFICER H AS HELD THE INVESTMENT TO THE TUNE OF RS.99,77,772/-, OUT O F WHICH HE ALLOWED THE RELIEF ON ACCOUNT OF SURRENDER MADE BY SHRI. K. N. SINGH PATEL TO THE EXTENT OF RS.86,00,000/- A ND, THEREFORE, MADE A NET ADDITION OF RS.13,77,772/-. (II) SIMILARLY, IN ASSESSMENT YEAR 2005-06, THE ASSESSIN G OFFICER MADE AN ADDITION OF RS.3,13,331/- AND DID NOT ALLOW ANY RELIEF ON ACCOUNT OF DECLARATION MADE BY SHRI. K. N . SINGH PATEL, AS HE HELD THAT THE AMOUNT DECLARED BY SHRI. K. N. SINGH PATEL IN THIS YEAR WAS NIL. (III) SIMILAR IS THE FINDING IN ASSESSMENT YEAR 2005-06 W HEREIN AGAINST THE INVESTMENT OF RS.71,02,423/-, THE ASSES SING OFFICER DID NOT ALLOW ANY RELIEF ON ACCOUNT OF SURR ENDER MADE BY SHRI. K. N. SINGH PATEL BY HOLDING THAT THE AMOU NT SURRENDERED BY SHRI K.N. SINGH PATEL IN THIS YEAR I N THE NAME OF ANJU SINGH WAS NIL. (IV) DURING ASSESSMENT YEAR 2006-07, AGAIN THE ASSESSING OFFICER DID NOT ALLOW ANY RELIEF ON THE SAME GROUND . (V) SAME WAS THE POSITION IN ASSESSMENT YEAR 2007-08. (VI) HOWEVER, DURING ASSESSMENT YEAR 2008-09, THE ASSESS ING OFFICER HELD THAT THE INVESTMENT DISCLOSED BY THE A SSESSEE WAS RS.53,98,482/- AGAINST WHICH SHRI. K. N. SINGH PATEL HAD SURRENDERED AN AMOUNT OF RS.90,00,000/-, THEREFORE, HE DID NOT MAKE ANY ADDITION DURING THIS YEAR. ITA NO.390 TO 396/LKW/2014 PAGE 8 OF 40 (VII) DURING THE ASSESSMENT YEAR 2009-10, AGAIN THE ASSES SING OFFICER DID NOT MAKE ANY ADDITION BY HOLDING THAT T HE SURRENDER MADE BY SHRI. K. N. SINGH PATEL WAS MORE THAN THE AMOUNT OF INVESTMENT ASSESSED IN THE HANDS OF T HE ASSESSEE. DURING THIS YEAR AGAINST THE INVESTMENT OF RS.12,65,195/-, SHRI K. N. SINGH PATEL HAD SURRENDE RED AN AMOUNT OF RS.1,25,00,000/- 7. ALL THESE FACTS NOTED TOGETHER REFLECT THAT THE ASSESSING OFFICER DURING THESE YEARS THOUGH GAVE CREDIT FOR THE SURRE NDER MADE BY SHRI. K. N. SINGH PATEL WHEREIN THE SURRENDERED AMOUNT WA S MORE THAN THE INVESTMENT MADE BY THE ASSESSEE, BUT, IN THE PROCES S, HE IGNORED THE EXCESS SURRENDER MADE BY SHRI. K. N. SINGH PATEL FO R THESE YEARS. ON THE OTHER HAND, WHEREVER AS PER VALUATION REPORT, T HE ASSESSEE HAD MADE INVESTMENT IN A PARTICULAR YEAR WHICH WAS NOT COVERED BY THE SURRENDER OF SHRI K.N. SINGH IN THAT YEAR HE MADE T HE ADDITION. THIS IS WHAT THE GRIEVANCE OF THE ASSESSEE IS WHEREBY IT IS AGGRIEVED THAT THE ASSESSING OFFICER AND THE LD. CIT(A) SHOULD HAVE TA KEN A HOLISTIC VIEW OF THE ISSUE AND SHOULD HAVE CONSIDERED THE ENTIRE SUR RENDER AMOUNT WITH RESPECT TO THE DECLARATION MADE BY SHRI K. N. SINGH IN THE CASE OF ASSESSEE IRRESPECTIVE OF DIFFERENCE IN YEARS. 8. ON APPEAL BEFORE THE LD. CIT(A), THE LD. CIT(A) DELETED PART ADDITIONS MADE BY THE ASSESSING OFFICER WHICH WERE MADE BY THE ASSESSING OFFICER IN VARIOUS SIX YEARS STARTING FRO M ASSESSMENT YEAR 2003-04 AND WHICH WAS BASED ON THE INVESTMENTS MADE BEFORE ASSESSMENT YEAR 2002-03 BY HOLDING THAT THE INVESTM ENT MADE BEFORE ASSESSMENT YEAR 2002-03 WERE NOT COVERED BY THE SEA RCH PERIOD AND, THEREFORE, THE ACTION OF THE ASSESSING OFFICER IN D IVIDING THE INVESTMENT OF ASSESSMENT YEAR 2002-03 INTO SIX PARTS AND ALLOC ATING THE SAME TO SIX ASSESSMENT YEARS WAS NOT JUSTIFIED AND, THEREFORE, HE DELETED THE SAME. ITA NO.390 TO 396/LKW/2014 PAGE 9 OF 40 THE LD. CIT(A) ALSO ALLOWED RELIEF TO THE ASSESSEE BY IGNORING THE VALUATION REPORT ESTIMATES AS THE DIFFERENCE BETWEE N DECLARED VALUE AND VALUATION REPORT WAS LESS THAN 15%. 9. FOR THE SAKE OF CONVENIENCE, THE YEAR-WISE FINDI NGS OF THE LD. CIT(A) ARE REPRODUCED BELOW:- ASSESSMENT YEAR 2003-04: 3.7.3. I HAVE CONSIDERED THE SUBMISSION MADE. THE ASSESSEE WAS FOUND TO HAVE INVESTED IN LAND FROM MAY 2001 ON WARDS, AND IN THE PROPERTIES UNDER REFERENCE, INVESTMENT IN LA ND WAS MADE IN AUGUST 1999 IN 'PLOT NO. 46 BY SHRI MAHESH SINGH PA TEL AND IN PLOTS NO. 31 AND 38 IN MAY 2001 BY THE APPELLANT. T HUS, IT CANNOT BE OUTRIGHTLY REJECTED THAT 'NO CONSTRUCTION WAS MA DE IN THE EARLIER YEARS, MORE SO WHEN IN RESPECT OF ALL OTHER YEARS, THE ASSESSING OFFICER HAS ACCEPTED THE VERSION OF THE A SSESSEE REGARDING INVESTMENT BEING MADE, SUBJECT TO THE REP ORT OF THE DVO. THE ASSESSEE HAS SHOWN INVESTMENT IN VARIOUS Y EARS AND EVEN IN THE ASSESSMENT YEAR 2008-09 INVESTMENT IN B UILDING AT PLOT NO. 35, 45 & 46, KHASRA NO, 45, GAURA BAGH, KU RSI ROAD, LUCKNOW HAS BEEN SHOWN AT RS.3578200 BY THE ASSESSE E HERSELF. NO EVIDENCE WAS APPARENTLY FOUND IN THE COURSE OF T HE SEARCH THAT THE CONSTRUCTION HAD NOT TAKEN PLACE IN THE EA RLIER YEARS AS CLAIMED, BUT TOOK PLACE IN THE SUBSEQUENT YEARS. EV EN THE CLAIM OF INVESTMENT MADE IN ALL THE OTHER YEARS HAS BEEN ACC EPTED BY THE ASSESSING OFFICER SUBJECT TO VARIATION AS PER THE V ALUATION REPORT. EVEN THE DVO HAS ESTIMATED THE VALUE IN THE YEARS A S CLAIMED BY THE ASSESSEE WITHOUT GIVING ANY CONTRARY FINDING AN D THE ASSESSING OFFICER HAS ADOPTED THE VALUE AS ESTIMATE D BY THE VALUATION OFFICER. ONCE THE ASSESSING OFFICER HAS A CCEPTED THE VALUE ESTIMATED BY THE VALUATION OFFICER IN VARIOUS YEARS AND HAS ALSO ACCEPTED THE INVESTMENT MADE BY THE ASSESSEE I N THE YEARS RELEVANT TO THE ASSESSMENT YEARS FOR WHICH THE PROC EEDINGS WERE PENDING BEFORE HIM, THERE DOES NOT APPEAR ANY JUSTI FICATION, FOR NOT ACCEPTING THE INVESTMENT MADE IN THE EARLIER YE ARS AS NO EVIDENCE HAS BEEN BROUGHT ON RECORD IN SUPPORT OF T HE CLAIM THAT NO INVESTMENT WAS MADE IN THE ASSESSMENT YEARS PRIO R TO ITA NO.390 TO 396/LKW/2014 PAGE 10 OF 40 ASSESSMENT YEAR 2003-04 AS CLAIMED BY THE ASSESSEE. THUS, SPREADING OVER THE INVESTMENT OF EARLIER YEARS BY T HE ASSESSING OFFICER IN RESPECT OF PROPERTIES BEING BUILDING AT PLOT NO, 35, 45 & 46, KHASRA NO. 45, GAURA BAGH, KURSI ROAD, LUCKNOW AND BUILDING AT PLOTS NO. 37 & 38, GAURA BAGH, KURSI ROAD, LUCKN OW IS NOT JUSTIFIED AND THE UNEXPLAINED INVESTMENT IN VARIOUS YEAR SHALL BE ESTIMATED BY CONSIDERING THE VALUATION AS MADE BY T HE VALUATION OFFICER IN THE RESPECTIVE YEARS. FURTHER, IT HAS BE EN HELD IN INCOME-TAX OFFICER V. RAM NATH AGGARWAL [2004] 2 SO T 471 (ITAT ASR. BENCH) (SMC) THAT THE VALUATION OF AN AS SET IS NOT AN EXACT SCIENCE. MATHEMATICAL CALCULATION 'IS NOT PO SSIBLE. THE VALUATION OF THE IMMOVABLE PROPERTY IS ALSO ESTIMAT ED ON THE BASIS OF THE FACTS AND CIRCUMSTANCES. THEREFORE, IT COULD NOT BE SAID THAT WHATEVER THE VALUATION OFFICER HAD STATED WAS FINAL WORD IN THE MATTER. THE WORD 'ESTIMATE' ITSELF SUGGESTS THA T THERE IS ALWAYS POSSIBILITY OF SOME AMOUNT OF INACCURACY AND UNCERTAINTY. IT WAS, THEREFORE, OBVIOUS THAT REPORT OF THE 'VALU ATION OFFICER COULD NOT BE HELD AS TRUE AND CORRECT. THERE IS ALW AYS A ROOM FOR ERROR OR OMISSION. THE COMMISSIONER (APPEALS) WAS J USTIFIED IN ALLOWING 10 PER CENT RELIEF ON ACCOUNT OF DIFFERENC E OF OPINION. KEEPING IN VIEW THE ENTIRE FACTS OF THE PRESENT CAS E, THE COMMISSIONER (APPEALS) HAD CORRECTLY DECIDED THE IS SUE AND, THEREFORE, THERE WAS NO REASON TO INTERFERE WITH HI S ORDER. IN THE RESULT, THE APPEAL WAS TO BE DISMISSED. 3.7.4. IN THE CASE OF BIMLA SINGH V. CIT [2009] 308 ITR 71/222 CTR (PAT.) 404 DURING SEARCH IT WAS FOUND THAT THE ASSESSEE HAD MADE HUGE INVESTMENT IN HOUSE PROPERTY. ACCORDING TO THE ASSESSEE THEY HAD INVESTED A SUM OF RS.11,15,000 IN CONSTRUCTION OF THE HOUSE BUT ACCORDING TO THE REPORT OF THE VAL UER, COST OF CONSTRUCTION WAS RS.12,99,700. IT WAS HELD THAT IN VALUATION OF THE HOUSE PROPERTY BONA FIDE DIFFERENCE IS BOUND TO OCCUR. IN THE ABSENCE OF ANY STATUTORY PROVISION, NO HARD AND FAS T RULE CAN BE LAID DOWN IN REGARD TO THE PERCENTAGE OF DIFFERENCE WHICH CAN BE IGNORED. THE DIFFERENCE BETWEEN THE ASSESSEE AND T HE VALUER WAS LESS THAN 15 PER CENT. NOT ONLY THIS, THE CONSTRUC TION OF THE HOUSE WAS SPREAD OVER A PERIOD OF 7 YEARS. IN THE FACTS OF THE PRESENT CASE THE DIFFERENCE BETWEEN THE PLEA OF THE ASSESSE E ON THE ISSUE ITA NO.390 TO 396/LKW/2014 PAGE 11 OF 40 ON INVESTMENT ON HOUSE PROPERTY AND VALUERS REPORT WAS SO MEAGER THAT ONE WOULD ASSUME IT TO BE BONA FIDE DIF FERENCE FIT TO BE IGNORED. 3.7.5. HENCE, AS THE DIFFERENCE IN THE REVISED ESTI MATE MADE BY THE VALUATION OFFICER AND THAT CLAIMED BY THE ASSES SEE WORKS OUT TO LESS THAN 15% IN RESPECT OF THE THREE BUILDINGS, AND VALUATION IS ONLY AN ESTIMATE, THEREFORE, IN VIEW OF THE DECISIO NS RELIED UPON BY THE APPELLANT AND THOSE MENTIONED ABOVE, THE SAM E SHALL BE IGNORED FOR COMPUTING THE UNEXPLAINED INVESTMENT AN D THE INVESTMENT SHOWN BY THE ASSESSEE IN RESPECT OF BUIL DING AT PLOTS NO. 28, 29, 30 & 31, GAURI BAGH, KURSI ROAD, LUCKNO W (DIFFERENCE OF 7.77%) AND BUILDING AT PLOTS NO. 37 & 38, GAURA BAGH, KURSI ROAD, LUCKNOW (DIFFERENCE OF 8.22%) SHALL BE ADOPTE D FOR VARIOUS YEARS IN PLACE OF ESTIMATE MADE BY THE ASSESSING OF FICER. IN THE YEARS IN WHICH THE CREDIT CAN BE GIVEN FOR INVESTME NT MADE BY SHRI K. N. SINGH PATEL, AS DONE BY THE ASSESSING OF FICER, THE REQUIRED CREDIT SHALL BE GIVEN. HENCE, THE INVESTME NT MADE BY THE ASSESSEE DURING VARIOUS YEARS (IN RS.) IS RECOMPUTE D AS UNDER:- TABLE-A A.Y INVESTMENT IN VALUE OF PROPERTY AT: TOTAL PLOTS NO. 28,29, 30 & 31 GAURA BAGH (AS SHOWN BY THE ASSESSEE) PLOTS NO. 37 & 38, GAURA BAGH, KURSI ROAD, LUCKNBW (AS SHOWN BY THE ASSESSEE) PLOTS NO. 25 & 26, GAURA BAGH, KURSI ROAD, LUCKNOW (AS ESTIMATED BY THE VALUATION OFFICER) INVESTMENT DURING THE YEAR. 2002 - 03 5552400 5552400 2003 - 04 2485258 2485258 2004 - 05 0 2005 - 06 2332200 4286242 6618442 2006 - 07 3543900 2394017 5937917 2007 - 08 2318200 2113458 4431658 ITA NO.390 TO 396/LKW/2014 PAGE 12 OF 40 2008 - 09 2141300 959090 3100390 2009 - 10 1174400 0 1174400 2010 - 11 2606599 260659& 2011 - 12 0 TOTAL 1,151,0,000 80,37,658 1,23,59,406 2,93,00,465 3.7.6 SIMILARLY, THE SHARE OF THE ASSESSEE IN THE B UILDING AT PLOT NO. 35, 45 & 46, KHASRA NO. 45, GAURA BAGH, KURSI R OAD, LUCKNOW IS TAKEN AS THAT SHOWN BY THE ASSESSEE HIMSELF AND ASSUMING 50% SHARE OF THE APPELLANT AS THE DIFFERENCE IN THE ESTIMATE OF THE DVO AND THE INVESTMENT SHOWN BY THE ASSESSES WO RKS OUT TO 10.22% AND CAN BE IGNORED: TABLE-B A.Y. TOTAL INVESTMENT AS SHOWN BY THE ASSESSEE SHARE OF SMT. ANJU SINGH PATEL 2202-03 1750000 875000 2003-04 2030000 1015000 2004-05 276800 138400 2005-06 258000 129000 2006-07 257000 137500 2007-08 225000 112500 2008-09 3578200 1789100 TOTAL 8393000 4196500 3.7.7 THE TOTAL INVESTMENT (IN RS.) IN VARIOUS YE ARS ACCORDINGLY WORKS OUT AS UNDER:- ITA NO.390 TO 396/LKW/2014 PAGE 13 OF 40 TABLE-C A.Y. I NVESTMENT AS PER TABLE- A INVESTMENT AS PER TABLE-B TOTAL INVESTMENT DURING THE YEAR 2002 - 03 5552400 875000 6427400 2003 - 04 2485258 1015000 3500258 2004 - 05 0 138400 138400 2005 - 06 6618442 129000 6747442 2006 - 07 5937917 137500 6075417 2007 - 08 4431658 112500 4544158 2008 - 09 3100390 1789100 4889490 2009 - 10 1174400 NIL 1174400 FOR THE YEAR UNDER CONSIDERATION, THE TOTAL INVESTM ENT IS RECOMPUTED AT RS.3500258 IN PLACE OF RS.9977772 COM PUTED BY THE ASSESSING OFFICER AND AFTER ALLOWING CREDIT FOR A SUM OF RS.8600000 FOR THE DISCLOSURE MADE BY SHRI K. N. SI NGH PATEL AS DONE BY THE ASSESSING OFFICER, NO ADDITION IS LIABL E TO BE MADE FOR THE A.Y. 2003-04 RESULTING INTO CONSEQUENTIAL RELIE F OF RS.1377772. HENCE, GROUNDS NO, 5 AND 6 ARE PARTLY ALLOWED WHILE GROUND NO. 7 IS ALLOWED. 10. IN ASSESSMENT YEAR 2004-05, THE LD. CIT(A) ALLO WED PART RELIEF BY HOLDING AS UNDER:- 4.1 GROUNDS NO. 1, 2, 3 AND 4 ARE REJEPTE4 IN VIE W OF THE FINDINGS MADE IN PARA 3.3, 3.4.1, 3.5 AND 3.6 IN RE SPECT OF THESE GROUNDS OF APPEAL IN THE APPEAL FOR A.Y. 2003-04. ITA NO.390 TO 396/LKW/2014 PAGE 14 OF 40 4.2 GROUNDS NO. 5 AND 6 ARE PARTLY ALLOWED IN VIEW OF THE FINDING IN PARAS,3.7 TO 3.7.7 AND THE ADDITION IS REDUCED T O RS.138400 IN PLACE OF RS.313331 MADE BY THE ASSESSING OFFICER RE SULTING INTO CONSEQUENTIAL RELIEF. GROUND NO. 7 IS REJECTED AS N O AMOUNT HAD BEEN OFFERED AS UNDISCLOSED INVESTMENT BY SHRI K. N . SINGH PATEL FOR THE YEAR UNDER CONSIDERATION AS INVESTMENT MADE ON BEHALF OF THE APPELLANT. 4.3 GROUNDS NO. 8 AND 9 ARE AGAINST THE ADDITION OF RS.806600 MADE BY THE ASSESSING OFFICER BY OBSERVING AS UNDER :- THE POSITION OF UNDISCLOSED INVESTMENT IN RESPECT O F ABOVE REFERRED PROPERTIES WITH REGARD TO COST OF ACQUISIT ION IS AS UNDER:- (I) PLOT NO. 26 PURCHASED FOR RS.1,28,000/- BY THE WAY OF DEMAND DRAFT AND STAMP DUTY AMOUNTING TO RS.23,800/ -. IT HAS NOT BEEN MADE CLEAR AS TO FROM WHICH BANK ACCOUNT T HIS AMOUNT HAS BEEN WITHDRAWN. IN THE AVAILABLE BANK AC COUNTS, NO SUCH ENTRY IS SEEN. THIS AMOUNT HAS, THEREFORE, BEEN PAID OUT OF THE UNDISCLOSED INCOME OF THE ASSESSEE AND I S, THEREFORE, ADDED TO HIS TOTAL INCOME U/S 69 OF THE I. T. ACT, 1961. (II) PLOT NO. 28, 29 PURCHASED FOR RS.3,03,600/- BY THE WAY OF DEMAND DRAFT AND STAMP DUTY AMOUNTING TO RS.47,600/ -. IT HAS NOT BEEN MADE CLEAR AS TO FROM WHICH BANK ACCOUNT T HIS AMOUNT HAS BEEN WITHDRAWN. IN THE AVAILABLE BANK AC COUNTS, NO SUCH ENTRY IS SEEN. THIS AMOUNT HAS, THEREFORE, BEEN PAID- OUT OF THE UNDISCLOSED INCOME OF THE ASSESSEE AND I S, THEREFORE, ADDED TO HIS TOTAL INCOME U/S 69 OF THE I.T. ACT, 1961. (III) PLOT NO. 30 PURCHASED FOR RS.1,28,000/- BY TH E WAY OF DEMAND DRAFT AND STAMP DUTY AMOUNTING TO RS,23,800/ -. IT HAS NOT BEEN MADE CLEAR AS TO FROM WHICH BANK ACCOUNT T HIS AMOUNT HAS BEEN WITHDRAWN. IN THE AVAILABLE BANK AC COUNTS, NO SUCH ENTRY IS SEEN. THIS AMOUNT HAS, THEREFORE, BEEN PAID OUT OF THE UNDISCLOSED INCOME OF THE ASSESSEE AND I S, ITA NO.390 TO 396/LKW/2014 PAGE 15 OF 40 THEREFORE, ADDED TO HIS TOTAL INCOME U/S 69 OF THE IT, ACT, 1961. (IV) PLOT NO. 31 PURCHASED FOR RS.1,28,000/- BY THE WAY OF DEMAND DRAFT ANA1 STAMP DUTY AMOUNTING TO RS.23,800 /-. IT HAS NOT BEEN MADE CLEAR AS TO FROM 'WHICH BANK ACCO UNT THIS AMOUNT HAS BEEN WITHDRAWN. IN THE AVAILABLE BANK AC COUNTS, NO SUCH ENTRY IS SEEN. THIS AMOUNT HAS, THEREFORE, BEEN PAID OUT OF THE UNDISCLOSED INCOME OF THE ASSESSEE AND I S, THEREFORE, ADDED TO HIS TOTAL INCOME U/S. 69 OF THE I. T. ACT, 1961. THEREFORE, THE TOTAL UNDISCLOSED INVESTMENT IN RESP ECT OF COST OF ACQUISITION OF PROPERTIES IS RS.8,06,600/- WHICH IS BEING ADDED TO THE TOTAL INCOME OF THE ASSESSEE U/S 69 OF THE LT. ACT, 1961. SATISFACTION IS RECORDED THAT THE ASSESS EE HAS FURNISHED INACCURATE PARTICULARS OF HIS INCOME AND, THEREFORE, PENALTY PROCEEDINGS U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961 ARE BEING INITIATED SEPARATELY FOR THIS DEFAULT (ADDITION, RS.8,06,600/') 4.3.1. DURING THE COURSE OF THE APPEAL, THE APPELLA NT HAS SUBMITTED AS UNDER:- III PURCHASE OF OTHER PROPERTIES, AGGREGATING RS. 13,22,860 40. THE SAID ADDITION WINCH PERTAINS TO DIFFEREN T ASSESSMENT YEARS, IS WHOLLY INCONSISTENT WITH THE F ACTS OF THE CASE AND MATERIAL AND INFORMATION AVAILABLE ON RECORD, AS MAY BE SEEN FROM TILE DETAILS FURNISHED BELOW:- A). ADDITION OF RS.8,06,000 IN THE ASSESSMENT YEAR 2004-05: A DETAILED EXPLANATION WAS GIVEN VIDE LETTER DATED 26.08.2010 AND THE SAID EXPLANATION STANDS FULLY SU PPORTED BY THE SEIZED MATERIAL IN THE FORM OF LEDGER ACCOUN T OF CAPITAL ACCOUNT AS APPEARING IN THE BOOKS OF ANJU A GENCIES, PROPRIETARY CONCERN OF THE APPELLANT. THE SAID LEDG ER ACCOUNT COVERS THE INVESTMENT TO THE EXTENT OF RS.6 ,40,000 AND THE BALANCE OF RS.1,66.600 IS COVERED BY THE DI SCLOSURE OF RS.3,00,000 AS MADE BY SRI K.N. SINGH PATEL UNDE R THE HEAD 'OTHER UNEXPLAINED INVESTMENT /EXPENDITURE ETC .' ITA NO.390 TO 396/LKW/2014 PAGE 16 OF 40 PHOTOCOPY OF THE LETTER DATED 26.08.2010 AND COPY O F LEDGER OF CAPITAL ACCOUNT IS ENCLOSED AT PAGES 55 T O 58 OF THIS SUBMISSION. 4.3.2 1 HAVE CONSIDERED THE SUBMISSION MADE. THE AP PELLANT HAS ENCLOSED THE COPY OF CAPITAL ACCOUNT! IN THE LE DGER OF ANJU AGENCIES FOR A.Y. 2004-05 IN WHICH WITHDRAWALS OF R S.512000 AND RS.128000 ARE MADE ON 22.05.2003 AND 30.05.2003 FOR PURCHASE OF LAND VIDE CHEQUES NO. 15397 AND 153979 RESPECTIVELY. HOWEVER, THE DETAILS OF BALANCE AMOUN T OF RS.166600 ARE NOT MENTIONED IN THE STATEMENT OF SHR I K.. N. SINGH PATEL. HENCE, THE ADDITION IS REDUCED TO RS.1 66600 AS THE APPELLANT HAS NOT FILED ANY EVIDENCE TO EXPLAIN THE SOURCE OF EXPENDITURE INCURRED AND GROUNDS NO. 8 AND 9 ARE PARTLY ALLOWED. GROUND NO. 10 IS REJECTED AS THE ASSESSING OFFICER HAD ALLOWED ADEQUATE OPPORTUNITY OF BEING HEARD .TO THE APPELLANT. 4.4 GROUNDS NO. 11 AND 12 ARE GENERAL IN NATUR E AND DO NOT REQUIRE ANY SEPARATE ADJUDICATION. 4.5 IN THE RESULT, THE APPEAL FOR A.Y. 2004-05 IS PARTLY ALLOWED. 11. IN ASSESSMENT YEAR 2005-06, THE LD. CIT(A) ALLO WED PART RELIEF BY HOLDING AS UNDER:- 5.1 GROUNDS NO. 1, 2. 3, AND 4 ARE REJECTED IN VIE W OF THE FINDINGS MADE IN PARAS, 3.3, 3.4.1, 3.5 AND 3.6 IN RESPECT OF THESE GROUNDS OF APPEAL IN THE APPEAL FOR A.Y. 2003-04. 5.2 GROUNDS NO. 5 AND 6 ARE PARTLY ALLOWED IN VIEW OF THE FINDING IN PARAS 3.7 TO 3.7.7 AND THE ADDITION IS REDUCED T O RS.6747442 IN PLACE OF RS.7102423 MADE BY THE ASSESSING OFFICER R ESULTING INTO CONSEQUENTIAL RELIEF. GROUND NO. 7 IS REJECTED AS F OR THE YEAR UNDER CONSIDERATION, NO AMOUNT HAD BEEN OFFERED AS UNDISCLOSED INVESTMENT BY SHRI K. N. SINGH PATEL RELATING TO TH E INVESTMENT MADE BY THE APPELLANT. 5.3 GROUNDS NO. 8 AND 9 ARE AGAINST THE ADDITION OF RS.286500 MADE BY THE .ASSESSING OFFICER BY OBSERVING AS UNDE R:- ITA NO.390 TO 396/LKW/2014 PAGE 17 OF 40 THE POSITION OF UNDISCLOSED INVESTMENT IN RESPECT OF ABOVE REFERRED PROPERTIES WITH REGARD TO COST OF ACQUISIT ION IS AS UNDER:- (I) PLOT NO. 418 &420 AT MAHONA, BAKSHI KA TALAB PU RCHASED FOR RS.2,00,000/- BY THE WAY OF DEMAND DRAFT AND ST AMP DUTY AMOUNTING TO RS.86,500/-. IT HAS NOT BEEN MADE CLEA R AS TO FROM WHICH BANK ACCOUNT THIS AMOUNT HAS BEEN WITHDR AWN. IN THE AVAILABLE BANK ACCOUNTS, NO SUCH ENTRY IS SEEN. THIS AMOUNT HAS, THEREFORE, BEEN PAID OUT OF THE UNDISCL OSED INCOME OF THE ASSESSEE AND IS, THEREFORE, ADDED TO HIS TOTAL INCOME U/S 69 OF THE I. T. ACT, 1961. THEREFORE, THE TOTAL UNDISCLOSED INVESTMENT IN RESP ECT OF COST OF ACQUISITION OF PROPERTIES IS RS,2,86,500/- WHICH IS BEING ADDED TO THE TOTAL INCOME OF THE ASSESSEE U/S 69 OF THE I.T. ACT, 1961, SATISFACTION IS RECORDED THAT THE ASSESS EE HAS FURNISHED INACCURATE PARTICULARS OF HIS INCOME AND, THEREFORE, PENALTY PROCEEDINGS U/S 271(1)(C) OF THE I.T. ACT, 1961 ARE BEING INITIATED SEPARATELY FOR THIS DEFAULT. (ADDIT ION RS.2,86,500/-) 5.3.1 DURING THE COURSE OF THE APPEAL, THE APPEL LANT HAS SUBMITTED AS UNDER: B) ASSESSMENT YEAR 2005-06: THE ADDITION OF RS.2,86 ,500 HAS BEEN MADE ON ACCOUNT OF PROPERTY PURCHASED ON 18.02 .2005, THE EXPLANATION LETTER DATED 26.08.2010 AS REFERRED TO ABOVE ALSO COVERS FULLY THE SAID INVESTMENT. THE ACIT HAS REJECTED THE SAID EXPLANATION MERELY BY SAYING THAT NAME OF THE BANK HAS NOT BEEN GIVEN WHEREAS THE FACT REMAINS THAT TH E NAME OF THE BANK I.E. ALLAHABAD BANK HAS BEEN GIVEN IN THE SAID EXPLANATION. PHOTOCOPY OF THE LETTER DATED 26.08.20 10 IS PLACED AT PAGES 59 TO 61 OF THIS SUBMISSION. 5.3.2 NO FURTHER EVIDENCE HAS BEEN FILED IN THIS RE GARD. HENCE, BOTH THESE GROUNDS OF APPEAL ARE REJECTED AS NO EVI DENCE HAS BEEN FILED TO EXPLAIN THE SOURCE OF INVESTMENT IN P LOTS AND THE ADDITION OF T286500 MADE IS HEREBY CONFIRMED. ITA NO.390 TO 396/LKW/2014 PAGE 18 OF 40 5.4 GROUND NO. 10 IS ALSO REJECTED AS THE ASSESSIN G OFFICER HAD PROVIDED ADEQUATE OPPORTUNITY OF BEING HEARD. 5.5 GROUNDS NO. 11 AND 12 ARE GENERAL IN NATURE AN D DO NOT REQUIRE ANY SEPARATE ADJUDICATION. 5.7 IN THE RESULT, THE APPEAL FOR A.Y. 2005-06 IS P ARTLY ALLOWED. 12. IN ASSESSMENT YEAR 2006-07, THE LD. CIT(A) ALLO WED PART RELIEF BY HOLDING AS UNDER:- 6.1 GROUNDS NO, 1, 2, 3 AND 4 ARE REJECTED IN VIEW OF THE FINDINGS MADE IN PARAS 3.3, 3.4.1, 3.5 AND 3.6 IN R ESPECT OF THESE GROUNDS OF APPEAL IN THE APPEAL FOR A.Y. 2003-04. 6.2 GROUNDS NO. 5 AND 6 ARE PARTLY ALLOWED IN VIEW OF THE FINDING IN PARAS 3.7 TO 3.7.7 AND THE ADDITION IS REDUCED T O RS.60754I7 IN PLACE OF RS.6525577 MADE BY THE ASSESSING OFFICER R ESULTING INTO CONSEQUENTIAL RELIEF. GROUND NO. 7 IS REJECTED AS F OR THE YEAR UNDER CONSIDERATION, NO AMOUNT HAD AS UNDISCLOSED I NVESTMENT BY SHRI K. N. SINGH PATEL RELATING TO THE INVESTMENT M ADE BY THE APPELLANT. 6.3 GROUNDS NO.8 & 9 ARE GENERAL IN NATURE AND DO N OT REQUIRE ANY SEPARATE ADJUDICATION. 6.5 IN THE RESULT, THE APPEAL FOR A.Y. 2006-07 IS PARTL Y ALLOWED. 13. IN ASSESSMENT YEAR 2007-08, THE LD. CIT(A) ALLO WED PART RELIEF BY HOLDING AS UNDER:- 7.1 GROUNDS NO. 1, 2. 3 AND 4 ARE REJECTED IN VIEW OF THE FINDINGS MADE IN PARAS 3.3, 3.4.1, 3.5 AND 3.6 IN RESPECT OF THESE GROUNDS OF APPEAL IN THE APPEAL FOR A.Y. 2003-04. 7.2 GROUNDS NO. 5 AND 6 ARE PARTLY ALLOWED, IN VIEW OF THE FINDING IN PARAS 3.7 TO 3.7.7 AND THE ADDITION IS REDUCED T O RS.4544158 IN PLACE OF RS.4897496 MADE BY THE ASSESSING OFFICER R ESULTING INTO CONSEQUENTIAL RELIEF. GROUND NO. 7 IS REJECTED AS F OR THE YEAR UNDER CONSIDERATION, NO AMOUNT HAD BEEN OFFERED AS UNDISCLOSED ITA NO.390 TO 396/LKW/2014 PAGE 19 OF 40 INVESTMENT BY SHRI K. N. SINGH PATEL RELATING TO TH E INVESTMENT MADE BY THE APPELLANT. . 7.3 GROUNDS NO. 8 AND 9 ARE GENERAL IN NATURE AND DO NOT REQUIRE ANY SEPARATE ADJUDICATION. 7.4 IN THE RESULT, THE APPEAL FOR A.Y. 2007-08 IS PARTLY ALLOWED. 14. IN ASSESSMENT YEAR 2008-09, THE LD. CIT(A) ALLO WED PART RELIEF BY HOLDING AS UNDER:- 8.1 GROUNDS NO. 1, 2, 3 AND 4 ARE REJECTED IN VIEW OF THE FINDINGS MADE IN PARAS 3.3, 3.4.1, 3.5 AND 3.6 IN RESPECT OF THESE GROUNDS OF APPEAL IN THE APPEAL FOR A.Y. 2003-04. 8.2. GROUNDS NO. 5 IS PARTLY ALLOWED IN VIEW OF THE FINDING IN PARAS 3.7 TO 3.7.7 AND THE INVESTMENT WORKED OUT IS REDUC ED TO RS.4889490 IN PLACE OF RS.5398482 MADE BY THE ASSES SING OFFICER. THE ASSESSING OFFICER HAS NOT MADE ANY ADD ITION ON ACCOUNT OF UNEXPLAINED INVESTMENT IN CONSTRUCTION A S A SUM OF RS.9000000 HAD BEEN OFFERED AS UNDISCLOSED INVESTME NT BY SHRI K. N. SINGH PATEL RELATING TO THE INVESTMENT MADE B Y THE APPELLANT WHILE THE TOTAL INVESTMENT DURING THE YEAR WORKED O UT TO RS.5398482 AS PER THE ASSESSING OFFICER IN BUILDING S. THE ASSESSING OFFICER HAS ALSO ADDED A SUM OF RS.229760 AS UNEXPLAINED INVESTMENT IN PURCHASE OF PLOTS. HOWEVE R, IN VIEW OF THE SUM OF RS.90000000 OFFERED FOR TAX BY SHRI K. N . SINGH PATEL ON ACCOUNT OF INVESTMENT MADE BY SMT. ANJU SINGH, T HIS ADDITION OF RS.229760 IS ALSO NOT WARRANTED AS THE SAME ALON G WITH UNEXPLAINED INVESTMENT IN CONSTRUCTION WORKED OUT I S LESS THAN THE TOTAL AMOUNT OF DISCLOSURE MADE AND THE ADDITIO N OF RS.229760 IS ALSO DELETED. HOWEVER, GROUND NO. 6 IS REJECTED AS NO EVIDENCE FOR THE WITHDRAWALS MADE DURING THE YEA R FROM THE PROPRIETARY CONCERN IN THIS REGARD HAS BEEN FIELD I N THE COURSE OF THE APPEAL. FURTHER, GROUND NO. 7 IS ALSO REJECTED AS THE ASSESSING OFFICER HAD PROVIDED ADEQUATE OPPORTUNITY OF BEING HEARD. 8.3. GROUNDS NO.8 AND 9 ARE GENERAL IN NATURE AND D O NOT REQUIRE ANY SEPARATE ADJUDICATION. ITA NO.390 TO 396/LKW/2014 PAGE 20 OF 40 8.4 IN THE RESULT, THE APPEAL FOR A.Y. 2008-09 IS PA RTLY ALLOWED. 15. IN ASSESSMENT YEAR 2009-10, THE LD. CIT(A) DISM ISSED THE APPEAL BY HOLDING AS UNDER:- 9.2.2. I HAVE CONSIDERED THE REPLY AND THE ADDIT ION MADE. AS NO SPECIFIC DETAILS WITH REGARD TO THE AMOUNT CONSI DERED UNDER SECTION 69C WERE FURNISHED, THEREFORE, THE BENEFIT OF THE SO CALLED SURRENDER MADE BY SHRI K.N. SINGH PATEL CANNOT BE A LLOWED AND THE ADDITION OF RS.2,50,000/- MADE IS HEREBY CONFIR MED, AS NO EVIDENCE FOR THE SOURCE OF ACQUISITION OF THESE HOU SEHOLD GOODS WAS FURNISHED AND THE ASSETS HAVE BEEN VALUED AT RS .10,00,000/- AND HAVE BEEN EQUALLY CONSIDERED IN THE HANDS OF AL L THE FOUR FAMILY MEMBERS. HENCE, BOTH THESE GROUNDS OF APPEAL ARE REJECTED. 9.3 GROUND NO. 4 IS REJECTED AS THE ASSESSING OFFIC ER HAD PROVIDED ADEQUATE OPPORTUNITY TO THE APPELLANT BEFORE MAKING THE ASSESSMENT. 9.4 GROUNDS NO. 5 AND 6 (INADVERTENTLY MENTIONED AS GROUNDS NO. 8 AND 9) ARE GENERAL IN NATURE AND DO NOT REQUIRE A NY SEPARATE ADJUDICATION. 9.5 IN THE RESULT, THE APPEAL FOR A.Y. 2009-10 IS H EREBY DISMISSED. 16. AT THE OUTSET, THE LD. A.R. OF THE ASSESSEE INV ITED OUR ATTENTION TO THE FINDINGS OF THE ASSESSING OFFICER AND THE LD. C IT(A), BY WHICH THEY HAVE NOT ALLOWED SET OFF TO THE ASSESSEE FOR INVEST MENTS MADE BY HER IN THE YEARS IN WHICH DECLARATION OF SURRENDER MADE BY SHRI K. N. SINGH WAS MORE THAN THE INVESTMENT DECLARED BY THE ASSESS EE; WHEREAS, ON THE OTHER HAND, THE AUTHORITIES BELOW HAD MADE ADDI TIONS WHERE THE INVESTMENTS MADE BY THE ASSESSEE WAS MORE THAN THE AMOUNT DECLARED BY SHRI K. N. SINGH IN THAT PARTICULAR YEAR. THE L D. A.R. OF THE ASSESSEE SUBMITTED THAT THIS ACTION OF THE AUTHORITIES BELOW IS NOT JUSTIFIED AT ALL, ITA NO.390 TO 396/LKW/2014 PAGE 21 OF 40 AS THE UNDISPUTED FACT IS THAT THE PROPERTIES IN AL L THE YEARS REMAINED THE SAME AND THE SURRENDER BY K. N. SINGH PATEL WAS MADE AGAINST SAME PROPERTIES. IT WAS ARGUED THAT THE AUTHORITIE S BELOW SHOULD HAVE CONSIDERED TOTAL VALUE OF VARIOUS PROPERTIES WITH T HE SURRENDER AMOUNT OF SHRI K. N. SINGH AND SHOULD NOT HAVE CONSIDERED THE COMPARISON ON YEAR-TO-YEAR BASIS. IT WAS FURTHER ARGUED THAT EVE N IF THE INVESTMENT IS TO BE CONSIDERED YEAR-WISE, THEN IN THOSE YEARS WHE RE THE AMOUNT OF SURRENDER WAS MORE THAN THE INVESTMENT, THE SAME SH OULD HAVE BEEN CARRIED FORWARD FOR ADJUSTMENT IN THE NEXT YEAR. T HE LD. A.R. OF THE ASSESSEE FURTHER ARGUED THAT IN ALL THE YEARS, THE LD. CIT(A) HAS IGNORED THE VALUATION ARRIVED AT BY THE VALUATION OFFICER B Y HOLDING THAT THE DIFFERENCE BETWEEN THE DECLARED VALUE AND THOSE EST IMATED BY THE VALUATION OFFICER WAS LESS THAN 15% AND THE LD. CIT (A) HAS ACCEPTED THE VALUATION DECLARED BY THE ASSESSEE. THEREFORE, IT WAS ARGUED THAT WHEN LD. CIT(A) HAS IGNORED THE VALUATION REPORTS, THE F INDINGS OF VALUATION OFFICER WITH RESPECT TO YEAR-WISE INVESTMENTS SHOUL D ALSO BE IGNORED. IT WAS FURTHER ARGUED THAT IT WILL AMOUNT TO DOUBLE TA XATION OF THE SAME INVESTMENT DECLARED AND SURRENDERED BY SHRI K. N. S INGH AS SHRI K. N. SINGH HAS ALREADY SURRENDERED AN AMOUNT OF RS.10 CR ORES WHICH REPRESENTED INVESTMENT MADE IN THE NAME OF VARIOUS RELATIVES WHICH INCLUDED THE ASSESSEE ALSO. IT WAS SUBMITTED THAT IN THE CASE OF THE ASSESSEE, SHRI K. N. SINGH HAD SURRENDERED AN AMOUN T OF RS.3,01,00,000/- WHEREAS THE VALUE OF ALL THE PROPE RTIES AS DECLARED BY THE ASSESSEE FROM ASSESSMENT YEAR 2003-04 ONWARDS W AS RS.2,47,96,758/- AND IN THIS RESPECT OUR ATTENTION WAS INVITED TO A CHART SHOWING THE VALUE OF INVESTMENT IN VARIOUS PROPERTI ES AS DECLARED BY THE ASSESSEE AND THE AMOUNT OF SURRENDER MADE BY SHRI K . N. SINGH IN THE NAME OF THE ASSESSEE. OUR SPECIFIC ATTENTION WAS I NVITED TO THE ORDER OF THE LD. CIT(A) IN ASSESSMENT YEAR 2003-04 WHERE AFT ER ANALYZING THE ENTIRE FACTS, THE LD. CIT(A) HAD REDUCED THE AMOUNT OF ADDITION TO NIL BY ITA NO.390 TO 396/LKW/2014 PAGE 22 OF 40 HOLDING THAT THE VALUE OF INVESTMENT IN THAT YEAR W AS RS.35,00,258/- WHEREAS SHRI K. N. SINGH HAD SURRENDERED RS.86,00,0 00/- IN THIS YEAR. IT WAS SUBMITTED THAT WHILE RS.86,00,000/- AS SURRE NDERED IN ASSESSMENT YEAR 2003-04 WAS ACCEPTED; WHEREAS SET O FF IN THE NAME OF THE ASSESSEE WAS ALLOWED ONLY TO THE EXTENT OF RS.3 5,00,358/- WHICH WAS HIGHLY UNJUSTIFIED. 17. ARGUING GROUND NO.5 OF THE APPEAL IN ASSESSMENT YEAR 2004-05 REGARDING ADDITION OF RS.8,06,600/- IN RESPECT OF U NDISCLOSED INVESTMENTS MADE BY THE ASSESSEE, THE LD. A.R. OF T HE ASSESSEE SUBMITTED THAT THE LD. CIT(A) HAS REDUCED THE ADDIT ION TO RS.1,66,600/- BY HOLDING THAT SUCH AMOUNT REMAINED TO BE UNEXPLAI NED. THE LD. A.R. OF THE ASSESSEE IN THIS RESPECT SUBMITTED THAT DELE TION MADE BY THE LD. CIT(A) IN THIS RESPECT WAS SUPPORTED BY WITHDRAWALS IN CAPITAL ACCOUNT WHICH THE LD. CIT(A) HAS NOTED IN PARA 4.3.2 OF HIS ORDER AND THE BALANCE AMOUNT OF RS.1,66,600/- SHOULD HAVE BEEN CO NSIDERED AS PART OF SURRENDER MADE BY SHRI K. N. SINGH. 18. ARGUING GROUND NO.5 IN ASSESSMENT YEAR 2005-06, THE LD. A.R. OF THE ASSESSEE SUBMITTED THAT THIS ADDITION WAS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF PROPERTY PURCHASED ON 18/2/20 05 AND EXPLANATION WAS SUBMITTED VIDE LETTER DATED 26/8/2010 WHICH THE ASSESSING OFFICER HAS REJECTED MERELY BY SAYING THAT THE NAME OF THE BANK HAS NOT BEEN GIVEN; WHEREAS THE NAME OF THE BANK I.E. ALLAHABAD BANK WAS MENTIONED IN THE SAID LETTER. THE LD. A.R. OF THE ASSESSEE SUBMITTED THAT THOUGH INVESTMENT WAS COVERED BY EXPLANATION IN LET TER DATED 26/8/2010, BUT STILL ADDITION CAN BE SET OFF AGAINS T THE SURRENDER OF SHRI K. N. SINGH. 19. ARGUING THE ONLY GROUND NO.5 OF APPEAL IN ASSES SMENT YEAR 2009- 10, THE LD. A.R. OF THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER HAD ITA NO.390 TO 396/LKW/2014 PAGE 23 OF 40 MADE ADDITION ON ACCOUNT OF LOW HOUSEHOLD EXPENSES TO THE TUNE OF RS.2.50 LAKHS WHICH WAS NOT BASED UPON ANY INCRIMIN ATING MATERIAL AND THE ADDITION WAS MADE ARBITRARILY, THEREFORE, IT NE EDS TO BE DELETED. 20. THE LD. D.R., ON THE OTHER HAND, PLACED RELIANC E ON THE ORDERS OF THE LD. CIT(A) AND SUBMITTED THAT LD. CIT(A) HAS AL LOWED SUBSTANTIAL RELIEF TO THE ASSESSEE WHEREVER THE YEAR OF INVESTM ENT AND YEAR OF SURRENDER WAS SAME. IT WAS SUBMITTED THAT INVESTME NT MADE BY ASSESSEE IN EARLIER YEARS CANNOT BE COVERED BY SURR ENDER OF SHRI K. N. SINGH IN SUCCEEDING YEARS. 21. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE T HROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT THE MAIN D ISPUTE BETWEEN THE PARTIES IS THAT THE DECLARATION OF SURRENDER MADE B Y SHRI K. N. SINGH, HEAD OF THE FAMILY SHOULD BE COMPLETELY SET OFF AGA INST THE INVESTMENTS MADE BY THE ASSESSEE IN VARIOUS YEARS. THIS GRIEVA NCE HAS BEEN TAKEN BY THE ASSESSEE IN GROUND NO.4 IN ALL THE APPEALS. THEREFORE, WE FIRST TAKE UP THIS GROUND FOR ADJUDICATION. THE REVENUE HAS NOT ALLOWED COMPLETE SET OFF OF SURRENDER AGAINST THE INVESTMEN T, AS THERE WAS DIFFERENCE IN THE YEARS OF INVESTMENT ESTIMATED BY THE ASSESSEE AND THE YEARS IN WHICH SHRI K. N. SINGH HAD MADE SURRENDER. FROM THE RECORDS IT IS APPARENT THAT SHRI K. N. SINGH HAD MADE TOTAL SURRENDER OF RS.3,01,00,000/- FOR THE CONSTRUCTION MADE BY SMT. ANJU SINGH IN VARIOUS PROPERTIES AND THE SURRENDER WAS MADE AND I N THE AFFIDAVIT SHRI K. N. SINGH HAD MENTIONED THAT SUCH AMOUNT OF RS.3, 01,00,000/- WAS INVESTED BY HIM IN THE NAME OF SMT. ANJU SINGH. TH E YEAR-WISE AMOUNT OF SURRENDER MADE BY SHRI K. N. SINGH IN THE NAME O F SMT. ANJU SINGH IS AS UNDER:- (1) ASSESSMENT YEAR 2003-04 : RS.86,00,000/- (2) ASSESSMENT YEAR 2008-09 : RS.90,00,000/- ITA NO.390 TO 396/LKW/2014 PAGE 24 OF 40 (3) ASSESSMENT YEAR 2009-10 : RS.1,25,00,000/- TOTAL : RS.3,01,00,000/- 22. WE FURTHER FIND THAT SHRI K. N. SINGH IN THE AF FIDAVIT HAD AFFIRMED AS UNDER:- 8. THAT DURING THE COURSE OF SAID SEARCH AND SEIZ URE ACTION, SHRI MAHESH SINGH PATEL ELDER SON OF THE DEPONENT GAVE A STATEMENT WHEREBY AN ADDITIONAL INCOME OF RS. 10 CRORES. (TEN CRORES) WAS AGREED TO BE DISCLOSED ON BEHALF OF VARIOUS PERSONS . A COPY OF THE SAID STATEMENT DATED 19.11.2008 IS ENCLOSED AND THE SAME HAS BEEN MARKED AS ANNEXURE 1 HERETO. 9. THAT THE AUTHORIZED OFFICERS SOUGHT FOR RATIFIC ATION OF THE SAID STATEMENT, FROM OTHER FAMILY MEMBERS ALSO NAMELY (I ) SHRI OM NARAIN SINGH PATEL (SECOND SON OF THE DEPONENT) (II ) SMT. ANITA SINGH WIFE OF SHRI MAHESH SINGH PATEL AND (III) SMT . ANJU SINGH WIFE OF SHRI OM NARAIN SINGH PATEL. COPIES OF THE S AID STATEMENTS ARE ENCLOSED AND THE SAME HAVE BEEN MARKED AS ANNEX URE II, III, & IV HERETO. 10. THAT IT IS CLARIFIED AND SUBMITTED THAT ALL THE STATEMENTS REFERRED TO ABOVE I.E. THE STATEMENTS GIVEN BY (I) SHRI MAHESH SINGH PATEL, (II) SHRI OM NARAIN SINGH PATEL, (III) SMT. ANITA SINGH AND (IV) SMT. ANJU SINGH PERTAIN TO THE DISCLOSURE OF CONSOLIDATED SUM OF RS. 10 CRORES (TEN CRORES), AS ADDITIONAL IN COME. 11. THAT LOOKING TO THE FACT THAT THE DEPONENT HIMS ELF HAS BEEN INSTRUMENTAL IN SETTING UP VARIOUS 'BUSINESS ENTITI ES' AND/OR CREATING VARIOUS 'SOURCE OF INCOME' ACQUISITION OF CAPITAL ASSETS ETC, AND HE HIMSELF HAS BEEN PLAYING A PIVOTAL ROLE IN RUNNING AND MANAGING SUCH 'BUSINESS ENTITIES/'SOURCE OF INCOME ' AND 'INVESTMENTS' APPEARING IN THE NAMES OF VARIOUS BUS INESS AND OTHER ENTITIES, 'INDIVIDUALS', 'GROUPS OF INDIVIDUA LS', AND IN KEEPING WITH LETTER AND SPIRIT OF THE STATEMENTS RE FERRED TO IN PARAS 8, 9 & 10 HEREINFORE, THE DEPONENT HIMSELF HA S OWNED THE SAID DISCLOSURE OF INCOME OF RS.10 CRORES (TEN CROR ES) AND HE UNDERTAKES AND AGREES TO PAY TAXES AS ARE PAYABLE W ITH REFERENCE TO THE SAME. ITA NO.390 TO 396/LKW/2014 PAGE 25 OF 40 12. THAT, IN THIS RESPECT, IT IS CLARIFIED THAT PUR SUANCE OF THE SAID UNDERTAKING, THE DEPONENT HIMSELF HAD ALREADY ARRAN GED FOR PAYMENT OF TAXES AGGREGATING RS. 1 CRORES, THROUGH FOUR SEPARATE CHEQUES, AS PER PARTICULARS GIVEN BELOW:- S L . NO. CHEQUE NO. DATE AMOUNT (RS.) (I ) 836761 15/12/2008 25,00,000 (II) 836763 25/12/2008 25,00,000 (III) 836762 05/01/2009 25,00,000 (IV) 836764 25/01/2009 25,00,000 WHICH HAVE BEEN DRAWN ON HIS OWN BANK ACCOUNT NO. 2410000100132967 AT PUNJAB NATIONAL BANK, RAKABGANJ . 13. THAT THE PRESENT STATEMENT IS BEING GIVEN UN DER SECTION 132(4) OF THE ACT AND IS OF CLARIFICATORY IN NATURE OF THE STATEMENTS/ RECTIFICATION REFERRED IN PARAS 9, 10 & 11 AND THE SAID STATEMENTS RECTIFICATIONS SHOULD BE DEEMED TO HAVE BEEN TELESCOPED IN THE PRESENT STATEMENT. 14. THAT AS FAR AS THE 'MANNER' IN WHICH THE SAID INCOME AGGREGATING RS.10 CRORES (TEN CRORES) HAS BEEN EARN ED, IS GIVEN HEREUNDER:- (I) THE DEPONENT HAILS FROM DISTRICT KANNAUJ AND WHILE LIVING IN THAT AREA, HE HAD DEVELOPED STRONG LINKAGE WITH THE RURAL CLASS AND ALSO WITH THE SMALL TIME PERFUMERS OPERATING IN THAT REGION; (II) DURING THE COURSE OF HIS ASSOCIATION WITH SUCH CLASS OF PEOPLE, HE HAS BEEN RENDERING ASSISTANCE TO THEM IN SELLING THEIR PRODUCTS AT 'FAIR PRICE'. ALTHOUGH SUCH SERVICES WE RE BEING RENDERED ON HUMANITARIAN GROUND AND OUT OF CONCERN FOR UPLIFTMENT OF THE BACKWARD CLASS OF THE SOCIETY AS A WHOLE, WITHOUT THERE BEING ANY COMMERCIAL ANGLE INVOLVED I N THE SAME, THE DEPONENT HAS BEEN OCCASIONALLY GETTING GIFTS IN CASH AND/OR IN KIND FROM THE PERSONS OF THAT STARTA, OUT OF THEIR SENSE OF GRATITUDE FOR THE DEPONENT; ITA NO.390 TO 396/LKW/2014 PAGE 26 OF 40 (III) AT THAT STAGE, HE HAD AN OPPORTUNITY TO I NTERACT WITH SMALL TIME PERFUMERS AND ON ACCOUNT OF SUCH AN 'INTERACTI ON' HE HAD DEVELOPED A VERY STRONG SENSE FOR PROCESSING OF HER BS, BLENDING, MIXING AND RE-MIXING OF PERFUMES AND PERFUMERY PROD UCTS AND IN ORDER TO TRY HIS LUCK IN THIS LARGER FIELD, HE SHIF TED TO LUCKNOW IN EARLY 1980'S AND CONTINUED THE ACTIVITIES THAT WERE BEING CARRIED ON BY HIM WHILE AT KANNAUJ, THIS TIME IN A MUCH WID ER AREA AND DIVERSIFIED FIELD. (IV) AFTER HE GOT SETTLED AT LUCKNOW, HE CONTIN UED TO ASSIST THE INHABITANTS OF HIS NATIVE PLACE IN THE MANNER MENTI ONED ABOVE AND HI LIEU NUMBER OF THE PERSONS WHO FELT BENEFITE D, BOTH SOCIALLY AS WELL AS ECONOMICALLY BY THE ADVICE AND ASSISTANC E RENDERED BY THE DEPONENT. ALL THESE SOURCES TAKEN TOGETHER CONSTITUTE THE ''M ANNER' IN WHICH THE DEPONENT GOT ENRICHED TO THE EXTENT OF THE DISC LOSURE OF RS.10 CRORES (TEN) AS MADE DURING THE COURSE OF SEARCH TH AT HAD COMMENCED OH 19.11.2008. 15. THAT THE SUMS SO COLLECTED BY THE DEPONENT FROM TIME AND OVER A PERIOD OF YEARS, REMAINED INVESTED ON THE DA TE OF SEARCH AS PER DETAILS GIVEN BELOW:- (A) FINANCIAL YEAR 2002-03 SI. NO. NAME. HEAD OF EXPENDITURE/INVESTMENT ETC. RS. (I) ANJU SINGH CONSTRUCTION & ACQUISITION OF CAPITAL ASSESTS AT GAURA BAGH, KURSI ROAD, LUCKNOW 75,00,000 (II) ANJU SINGH & MAHESH SINGH CONSTRUCTION & ACQUISITION OF CAPITAL ASSESTS AT GAURA BAGH, KURSI ROAD, LUCKNOW 22,00,000 (III) OTHER UNEXPLAINED INVESTMENT/ EXPENDITURE ETC. 2,00,000 TOTAL 99,00,000 (B) FINANCIAL YEAR 2003-04 SI. NO. NAME HEAD OF EXPENDITUREANVESTMENT ETC. RS. ITA NO.390 TO 396/LKW/2014 PAGE 27 OF 40 (I) MAHESH SINGH CONSTRUCTION & ACQUISITION OF CAPITAL ASSETS AT FARM HOUSE CHANDRIKA DEVI ROAD 70,00,000 (II) OTHER UNEXPLAINED INVESTMENTS/ EXPENDITURE ETC 3,005000 TOTAL 73,00,000 (C) FINANCIAL YEAR 2004-05 SI. NO. NAME HEAD OF EXPENDITURE/INVESTMENT ETC. RS. (I) OTHER UNEXPLAINED INVESTMENTS/ EXPENDITURE ETC. 5,00,000 TOTAL 5,00,000 (D) FINANCIAL YEAR 2005-06 SI. NO NAME HEAD OF EXPENDITURE/INVESTMENT ETC. RS. ( I) SMT. RAJNI PATEL CONSTRUCTION & ACQUISITION OF CAPITAL ASSESTS AT GAURA BAGH, KURSI ROAD, LUCKNOW 30,00,000 (II) ANJU SINGH LAND AT AADAR KHERA BKT 3,00,000 MEGHA WORKSHOP 2,00,000 (III) SANATAN COLD STORAGE LTD. LOAN TO FARMERS 75,00,000 (IV) OTHER UNEXPLAINED INVESTMENTS/ EXPENDITURE ETC. 3,00,000 TOTAL 1,13,00,000 FINANCIAL YEAR 2006-07 SI. NO NAME HEAD OF EXPENDITURE/INVESTMENT ETC. RS. ITA NO.390 TO 396/LKW/2014 PAGE 28 OF 40 (I) OM NARAIN SINGH LAND OF FARM HOUSE IIM ROAD 2,00,000 (II) PANKAJ VERMA LAND AT AMRAPALI ROAD, HARDOI ROAD 5,00,000 (III) OTHER UNEXPLAINED INVESTMENTS/ EXPENDITURE ETC. 3,00,000 TOTAL 10,00,000 FINANCIAL YEAR 2007-08 SL. NO. NAME HEAD OF EXPENDITURE/INVESTMENT ETC. RS. (I) ANJU SINGH CONSTRUCTION & ACQUISITION OF CAPITAL ASSETS AT GAURA BAGH, KURSI ROAD, LUCFCNOW 90,00,000 (II) MAHESH PATEL & ANITA SINGH CONSTRUCTION & ACQUISITION OF CAPITAL ASSETS AT FAIZABAD ROAD, LUCKNOW 50,00,000 (III) OTHER UNEXPLAINED INVESTMENT/EXPENDITURE ETC. 10,00,000 TOTAL 1,50,00,000 FINANCIAL YEAR 2008-09 SI. NO NAME HEAD OF EXPENDITURE/INVESTMENT ETC. RS. (I) ANJU SINGH CONSTRUCTION & ACQUISITION OF CAPITAL ASSETS AT GAURA BAGH, KURSI ROAD, LUCKNOW 1,25,00,000 (II) MAHESH SINGH CONSTRUCTION & ACQUISITION OF CAPITAL ASSETS AT GAURA BAGH, KURSI ROAD, LUCKNOW 1,75,00,000 (III) OM NARAIN SINGH FARM HOUSE, IIM ROAD (LAND ONLY) 30,00,000 (IV) PPPL EXCESS STOCK 60,00,000 (V) BAIJNATH CHARITABLE & EDUCATIONAL TRUST CONSTRUCTION & ACQUISITION OF CAPITAL ASSETS 40,00,000 ITA NO.390 TO 396/LKW/2014 PAGE 29 OF 40 (VI) SANATAN COLD STORAGE LTD. CONSTRUCTION & ACQUISITION OF CAPITAL ASSETS 25,00,000 (VII) CASH SEIUZED AT VARIOUS PLACES 25,00,000 (VIII) MAA SHARDA BUILDTECH PVT. LTD. CONSTRUCTION OF BUILDING 50,00,000 (IX) OTHER UNEXPLAINED MVESTMENT/EXPENDITURE ETC 20,00,000 5,50,00,000 10,00,00,000 16. THAT INCOME AGGREGATING RS.10 CRORES (TEN) AS S PREAD OVER IN DIFFERENT FINANCIAL YEARS AND AS STOOD REFLECTED AT THE 'RELEVANT TIME' IN THE ACQUISITION OF CAPITAL ASSET/OTHER INV ESTMENT AND EXPENDITURE ETC. REMAINED UNDISCLOSED EARLIER, AS T HE DEPONENT HAS ALL ALONG BEEN UNDER A BONAFIDE BELIEF THAT THE SUMS (WHICH COME TO BE INVESTED IN THE AFORESAID MANNER) WERE N OT OF TAXABLE NATURE., AS THE RECEIPTS WERE BY WAY OF GIFTS ONLY NOR LIABLE FOR TAXATION. 17. THAT FOR THE REASON THAT WITH THE PASSAGE OF TI ME, THE DEPONENT DOES NOT HAVE IN THE POSSESSION ALL THE RE LEVANT DETAILS AND EVIDENCES IN SUPPORT OF THE SAME, WHICH MAY REA CH THE LEVEL OF ACCEPTABILITY BY DIE INCOME TAX DEPARTMENT, THE DEPONENT HAS BEEN ADVISED TO SURRENDER THE SAME AS ADDITIONAL IN COME FOR BEING TAXED SOLELY IN HIS HANDS, IRRESPECTIVE OF TH E NAMES IN WHICH THE INVESTMENT/EXPENDITURE ETC STANDS/INCURRED. 18. THAT THE DISCLOSURE IS BEING MADE BY THE DEPONE NT IN A BONAFIDE MANNER AND WITH A VIEW TO EXTEND ALL THE C OOPERATION TO THE INCOME TAX DEPARTMENT, SO AS TO AVOID LITIGATIO N AND TO BUY MENTAL PEACE FOR THE DEPONENT HIMSELF AND HIS FAMIL Y MEMBERS, AND FOR THE SAKE OF EXPEDITIOUS COMPLETION OF ASSES SMENT AND/OR OTHER RELATED PROCEEDINGS. ITA NO.390 TO 396/LKW/2014 PAGE 30 OF 40 19. THAT THE ADDITIONAL INCOME AS AFORESAID, HAS BE EN SURRENDERED ON THE STIPULATIONS THAT: - (I) THE STATEMENTS THAT IS BEING GIVEN IN TER MS OF THE PRESENT SWORN STATEMENT SHOULD BE TREATED AS STATEMENT GIVE N BY THE DEPONENT UNDER SECTION 132(4) READ WITH EXPLANATION 5 TO SECTION 271(1)(C). (II) THE INCOME SO DISCLOSED BY THE DEPONENT S HOULD BE TREATED TO COVER THE EFFECT OF ALL SUCH MATERIAL/ INFORMATI ON, IN WHATEVER FORM, THAT HAD BEEN FOUND DURING THE COURSE OF SEAR CH/ SURVEY AND/OR THAT MAY BE FOUND TO BE SO RELATED LATER TO THE SAID SEARCH/SURVEY IN *PATEL GROUP* AS A WHOLE, THAT HAD COMMENCED ON 19.11.2008. (III) ENTIRE INCOME AS AFORESAID SHALL BE ASSES SED IN THE HANDS OF THE DEPONENT ONLY, WITHOUT AFFECTING THE ASSESSM ENTS OF ANY OTHER 'BUSINESS ENTITIES' 'OTHER ENTITIES' 'INDIVID UALS' AND OR 'GROUP OF INDIVIDUALS' FORMING THE 'PATEL GROUP' ET C. (IV) THE ADDITIONAL INCOME SO SURRENDERED BY TH E DEPONENT SHALL BE ALLOWED TO BE ACCOUNTED FOR IN THE BOOKS OF ACCO UNT AND OTHER RELEVANT RECORDS RELATED TO THE 'PERSONS' CONCERNED , IN THE NAME OF THE DEPONENT HIMSELF. (V) ALL TAXES AS ARE PAYABLE ON SUCH ADD ITIONAL SHALL BE BORNE EXCLUSIVELY BY THE DEPONENT HIMSELF AND HE HI MSELF SHALL BE HELD LIABLE TO PAY AND DISCHARGE 'THE SAME; (VI) COMPLETE WAIVER FROM INTEREST IF ANY, FOU ND TO BE PAYABLE UNDER ANY PROVISIONS OF THE 'ACT' SHALL BE CONSIDER ED SYMPATHETICALLY. (VII) IMMUNITY FROM PENALTY UNDER SECTION 271(1 )(C) AND/OR ANY OTHER PENAL PROVISIONS UNDER THE ACT SHALL BE GRANT ED NOT ONLY TO THE DEPONENT BUT ALSO TO OTHER 'PERSONS' FORMING PA RT OF 'PATEL GROUP* AS A WHOLE, WHEREVER THE ADDITIONAL INCOME A ND/ OR PART THEREOF IS ACCOUNTED FOR OR DEEMED TO HAVE BEEN ACC OUNTED FOR/ACCOUNTED; ITA NO.390 TO 396/LKW/2014 PAGE 31 OF 40 (VIII) COMPLETE IMMUNITY FROM PROSECUTION AND /OR OTHER SUCH PROVISIONS SHALL BE GRANTED IN THE CASE OF THE DEPO NENT AND/OR OTHER PERSON(S) FORMING 'PATEL GROUP' WHO ARE FOUND /HELD TO BE AFFECTED BY THE SAID DISCLOSURES; AND (IX) THE CONDUCT OF THE DEPONENT, THE MATTER OF DISCLOSURE OF INCOME SHALL BE DULY RECIPROCATED BY THE INCOME-TAX DEPARTMENT AND NEITHER HE HIMSELF NOR ANY OTHER PERSON OR PERS ONS BELONGING TO PATEL GROUP SHALL BE SUBJECTED TO ANY HARASSMENT AND THEIR ASSESSMENT SHALL BE COMPLETED EXPEDITIOUSLY; 20. THAT IT IS FURTHER STATED THAT THE DEPONENT IS AGGREGATING TO ALL SUCH ADJUSTMENTS AS TO THE YEAR OF TAXABILITY OF TH E ADDITIONAL INCOME AGGREGATING RS.10 CRORES (TEN CRORES) OR PAR T THEREOF AS MAY BE FOUND TO BE PERTINENT AT THE STAGE OF COMPLE TION OF ASSESSMENT. 23. FROM THE ABOVE CONTENTS OF THE AFFIDAVIT ALONG WITH FACTS ABOUT SURRENDER OF SHRI K. N. SINGH, IT IS APPARENT THAT AT THE TIME OF SURRENDER, SHRI K. N. SINGH HAD OWNED UP THE INVEST MENTS MADE IN THE NAME OF VARIOUS FAMILY MEMBERS INCLUDING THE ASSESS EE. THERE IS NO DISPUTE REGARDING IDENTIFICATION OF PROPERTY, AS UN DISPUTEDLY THE PROPERTIES DECLARED BY SHRI K. N. SINGH IN THE NAME OF THE ASSESSEE REMAINED THE SAME. AGAINST THE TOTAL SURRENDER OF RS.3,01,00,000/- FOR INVESTMENTS IN THE NAME OF ASSESSEE, THE AMOUNT OF ADDITION, AS SUSTAINED BY THE LD. CIT(A) IS AS FOLLOWS:- ASSESSMENT YEAR 2003-04 RS.35,00,258/- ASSESSMENT YEAR 2004-05 RS.1,38,400/- ASSESSMENT YEAR 2005-06 RS.67,47,442/- ASSESSMENT YEAR 2006-07 RS.60,75,417/- ASSESSMENT YEAR 2007-08 RS.45,44,158/- ITA NO.390 TO 396/LKW/2014 PAGE 32 OF 40 ASSESSMENT YEAR 2008-09 RS.48,89,490/- ASSESSMENT YEAR 2009-10 NIL TOTAL RS.2,58,95,165/- 24. AGAINST THE ABOVE YEAR-WISE SUSTAINED ADDITION, THE LD. CIT(A) ALLOWED RELIEF TO THE ASSESSEE ON ACCOUNT OF HIS SU RRENDER IN VARIOUS YEARS AND UPHELD THE ADDITION FOR BALANCE WHILE HE IGNORED THE EXCESS SURRENDER DURING SOME YEARS. THE WORKING OF SUCH A DDITION IS AS PER TABLE BELOW:- ASSESSMENT YEAR ADDITION SUSTAINED BY LD. CIT(A) RELIEF ALLOWED ON ACCOUNT OF SURRENDER NET ADDITION EXCESS SURRENDER IGNORED 2003-04 RS.35,00,258 RS.86,00,000/- NIL RS.50,99,742/- 2004-05 RS.1,38,400/- NIL RS.1,38,400/- NIL 2005-06 RS.67,47,442/- NIL RS.67,47,442/- NIL 2006-07 RS.60,75,417/- RS.60,75,417/- NIL 2007-08 RS.45,44,158/- NIL RS.45,44,158/- NIL 2008-09 RS.48,89,490/- RS.90,00,000/- NIL RS.41,10,510/- 2009-10 - RS.1,25,00,000/- NIL RS.1,25,00,000/- TOTAL RS.2,58,95,165/- RS.3,01,00,000/- 2,17,10,252/- 25. THESE ALL FACTS INDICATE THAT MR. K. N. SINGH H AS BEEN SUBJECTED TO TAX FOR HIS SURRENDER WHICH WAS REPRESENTED BY INVE STMENTS IN VARIOUS PROPERTIES IN THE NAME OF VARIOUS PERSONS. IN THE NAME OF PERSONS THE SAME INVESTMENT HAS BEEN SUBJECTED TO TAX WHEREVER THE AMOUNT OF SURRENDER IN A PARTICULAR YEAR WAS LESS THAN INVEST MENT IN THAT YEAR AND ON THE OTHER HAND NO BENEFIT HAS BEEN GIVEN FOR THE EXCESS OF SURRENDER ITA NO.390 TO 396/LKW/2014 PAGE 33 OF 40 OVER THE AMOUNT OF INVESTMENT. IN THESE CIRCUMSTAN CES, WE ARE OF THE OPINION THAT THE REVENUE SHOULD HAVE TAKEN A HOLIST IC VIEW OF THE POSITION AND TOTAL INVESTMENT IN A PROPERTY DURING THE PERIOD UNDER SEARCH SHOULD HAVE BEEN COMPARED WITH THE TOTAL SUR RENDER TOWARDS THAT PARTICULAR PROPERTY. THE ASSESSEE IN HER REPLY TO ASSESSING OFFICER, REPRODUCED BY US IN EARLIER PART OF THIS ORDER, HAD ALSO CONFIRMED THAT SURRENDER WAS MADE BY SHRI K. N. SINGH PATEL ON ACC OUNT OF CONSTRUCTION IN VARIOUS PROPERTIES AND THERE IS NO MENTION OF YE ARWISE CONSTRUCTION. WE FURTHER FIND THAT IN THE ASSESSMENT OF SHRI K. N . PATEL IN VARIOUS YEARS THE ASSESSING OFFICER HIMSELF HAS COMPLETED T HE ASSESSMENT AFTER HOLDING THAT THE TOTAL SURRENDERED AMOUNT HAS TO BE COMPARED WITH TOTAL COST OF CONSTRUCTION ESTIMATED BY THE VALUATION WIN G. THE RELEVANT FINDINGS OF ASSESSING OFFICER IN THE CASE OF SHRI K . N. PATEL ARE REPRODUCED BELOW:- SEVERAL OF THE IMMOVABLE PROPERTIES OWNED BY THE FAMILY MEMBERS OF THE ASSESSEE WERE REFERRED TO THE VALUAT ION WING OF THE DEPARTMENT AND THE ESTIMATE OF COST OF CONSTRUC TION WAS OBTAINED. AS A RESULT, THE VALUE OF INVESTMENT IN ALMOST ALL THE PROPERTIES HAS BEEN ESTIMATED ON THE HIGHER SIDE BY THE VALUATION WING. THE ASSESSEES WERE CONFRONTED WITH THE VALUAT ION REPORT AND THEIR COMMENTS AND COUNTER COMMENTS OF THE VALU ATION WING WERE OBTAINED. THEREAFTER, THE FINAL COMMENTS OF TH E ASSESSEE WERE ONCE AGAIN OBTAINED. VIDE REPLY DATED 30.12.2010, THE ASSESSEE HAS SUBM ITTED AS UNDER: 'WITH REFERENCE TO THE ABOVE CIED SUBJECT AND REGAR DING EXPLANATION FOR CONSTRUCTION IN THE FOLLOWING BUILD ING BEFORE 01.04.2002: 1. CONSTRUCTION AT PLOT NO. 32, 49, 50, 52, 53 AND KHASRA NO.46, GAURA BAGH, KURSI ROAD, LUCKNOW. 2. CONSTRUCTION AT PLOT 37, 38, GAURABAGH, KURSI RO AD, LUCKNOW. 3. CONSTRUCTION AT PLOT NO. 35, 45, 46, GAURABAGH, KURSI ROAD, LUCKNOW. ITA NO.390 TO 396/LKW/2014 PAGE 34 OF 40 WE ARE HERE TO SUBMIT THAT AS THE SOME CONSTRUCTION WAS DONE BEFORE 01.04.2002 AS ALREADY MENTIONED IN THE REPORT SUBMITTED BY THE DVO AND IN SUPPORT TO WHICH AFFIDA VIT OF THE ASSESSEE, BEFORE YOUR HONOUR IS BEING ENCLOSED AT ANNEXURE-A, B AND C RESPECTIVELY. IN ADDITION TO ABOVE WE ARE ENCLOSING THE COMPARISO N AT ANNEXURE-D, BETWEEN THE AMOUNT SURRENDERED BY THE ASSESSEE IN VARIOUS PROPERTIES AND VALUATION DONE B Y THE DVO OF INCOME TAX DEPARTMENT. YOUR HONOUR WILL APPRECIATE THAT EVEN IF NO LEVERAG E OF VARIATION OF 15% IS CONSIDERED THE AMOUNT SURRENDER ED IS MUCH MORE THAN THE VALUATION DONE BY THE VALUATION OFFICER RS.73,23,639.59 TO BE PRECISE. IT IS HEREBY REQUESTED TO CONSIDERED THE ABOVE FACT S BEFORE THE FINALIZING THE ASSESSMENT AND LET US KNOW IF AN Y OTHER EXPLANATION/CLARIFICATION IS REQUIRED BY YOUR HONOU R IN THIS REGARD.' A RECONCILIATION CHART OF VALUATION AND SURRENDER H AS BEEN SUBMITTED BY THE ASSESSEE WHICH IS AS UNDER: 1. TOTAL VALUE AS PER VALUATION OFFICER 213,262,452.55 2. LESS:EXPENSES PRIOR TO FY 02-03 AS -19,914,044.14 PER VALUATION REPORT 3. LESS:EXPENSES INCURRED AFTER FY08-09 -71,093,822.0 0 4. REMAINING VALUATION FOR THE PERIOD 122,254,586.41 BETWEEN FY 02-03 TO 08-09 5. OUT OF ABOVE, EXPENSES DIRECTLY INCURRED AND RECORDED IN THE RESPECTIVE BOOKS OF ACCOUNTS -BY MAA SHARDA BUILDTECH -10,041,204.00 -BY BAIJNATH CHARITABLE TRUST -28,372,502.00 -BY MAHESH SINGH FOR MEGHA BAJAJ, -13,964,520.00 FAIZABAD ROAD ------------------- 6. AMOUNT TO BE COVERED UNDER THE 69,876,360.41 SURRENDER OF K.N. SINGH 7. AMOUNT ACTUALLY SURRENDERED BY K.N. -77,200,000.00 SINGH AGAINST CONSTRUCTION (AS PER SHEET ENCLOSED) 8. NET DIFFERENCE -7,323,639.59 ITA NO.390 TO 396/LKW/2014 PAGE 35 OF 40 ALONGWITH THE ABOVE CHART, THE ASSESSEE HAS FURNISH ED DETAILS OF AMOUNT SURRENDERED BY SHRI K.N. SINGH PATEL AGAINST CONSTRUCTION AND THESE ARE AS UNDER: F.Y. PARTICULARS AMOUNT AMOUNT 2002-03 CONSTRUCTION OF ANJU SINGH 7500000 CONSTRUCTION OF ANJU SINGH & 2200000 9700000 MAHESH SINGH 2003-04 CONSTRUCTION OF MAHESH SINGH 7000000 2005-06 CONSTRUCTION OF RAJNI PATEL 3000000 2007-08 CONSTRUCTION OF ANJU SINGH 9000000 OUT OF UNEXPLAINED INVESTMENT/ 500000 EXPENDITURE FOR VIKAS NAGAR MEGHA BAJAJ 5000000 14500000 2008-09 CONSTRUCTION OF ANJU SINGH 125000 00 CONSTRUCTION OF MAHESH SINGH 17500000 CONSTRUCTION OF OM NARAIN SINGH 3000000 CONSTRUCTION OF BAIJNATH CHARITABLE 4000000 TRUST CONSTRUCTION OF MAA SHARDA 5000000 BUILDTECH PVT. LTD. OUT OF UNEXPLAINED INVESTMENT/ 1000000 EXPENDITURE FOR VIKAS NAGAR 43000000 77200000 THE ABOVE RECONCILIATION SUBMITTED BY THE ASSESSEE IS NOT ACCEPTABLE BECAUSE THE AMOUNT WAS SURRENDERED AS A WHOLE AGAINST VARIOUS PROPERTIES AND THERE IS NO JUSTIFIC ATION FOR EXCLUDING THE COST OF CONSTRUCTION PRIOR TO F.Y. 20 02-03. IT HAS ALREADY BEEN ADMITTED BY THE ASSESSEE VIDE LETTER D ATED 13.12.2010 THAT THE YEAR WISE AND PROPERTY WISE DET AILS OF INVESTMENT WERE NOT KNOWN TO HIM AT THE TIME OF SUR RENDER. HOWEVER, THE DESCRIPTION OF PROPERTY IS ALSO NOT ME NTIONED IN THE AFFIDAVIT AND IT IS NOT ASCERTAINABLE AS TO AGAINST PROPERTY WHAT AMOUNT HAS BEEN SURRENDERED. THEREFORE, THE AMOUNT HAS TO BE COMPARED WITH THE TOTAL COST OF CONSTRUCTION AS EST IMATED BY THE VALUATION WING. IT IS ALSO NOTEWORTHY THAT THE VALU ATION OFFICER HAS ESTIMATED ONLY THE COST OF CONSTRUCTION OF THE PROP ERTIES AND THE COST OF ACQUISITION OF LAND HAS NOT BEEN CONSIDERED BY HIM. WHEREAS, IN THE TOTAL AMOUNT OF SURRENDER THE COST OF ACQUISITION AS WELL AS THE COST OF CONSTRUCTION BOTH ARE INCLUD ED BY SHRI K.N. SINGH PATEL. AS HAS BEEN SEEN ABOVE, THE TOTAL SURRENDERED AMOUN T AGAINST CONSTRUCTION AND ACQUISITION OF CAPITAL ASSETS IS R S.7,72,00,000/- AS PER THE AFFIDAVIT. THE VALUATION OFFICER HAS EST IMATED THE COST OF CONSTRUCTION AT RS.21,32,62,452/-. OUT OF THIS, THE AMOUNT INCURRED AFTER F.Y. 2008-09 IS RS.7,10,93,822/- AND THE AMOUNT ITA NO.390 TO 396/LKW/2014 PAGE 36 OF 40 INVESTED BY VARIOUS ASSESSEES AS PER BOOKS IS RS.5, 23,78,226/-. THE BALANCE AMOUNT LEFT, THEREFORE, IS RS.8,97,90,4 04/- AND THIS DOES NOT INCLUDE THE COST OF ACQUISITION OF VARIOUS PROPERTIES. THEREFORE, THE ACTUAL NET DIFFERENCE IN THE COST OF CONSTRUCTION AS ESTIMATED BY THE VALUATION WING AND AS SURRENDERED BY SHRI K.N. SINGH PATEL IS ACTUALLY MUCH MORE THAN BEING CLAIME D BY THE ASSESSEE NOW. THE BENEFIT OF SURRENDER MADE BY SHRI K.N. SINGH PA TEL IS, THEREFORE, BEING RESTRICTED IN RESPECTIVE HANDS ONL Y TO THE EXTENT OF SURRENDERED AMOUNT WHICH INCLUDES THE COST OF AC QUISITION OF ASSETS. THE DIFFERENCE IN COST OF CONSTRUCTION THAT REMAINS AFTER ALLOWING THE BENEFIT OF SURRENDERED AMOUNT IS THERE FORE, BEING ADDED IN THE RESPECTIVE HANDS WITH RESPECT TO VARIO US PROPERTIES IN VARIOUS YEARS. AS FAR AS THE COMMENTS ON THE THREE AFFIDAVITS BEIN G SUBMITTED NOW, IT WILL BE SUFFICIENT TO STATE THAT NO SUPPORT ING EVIDENCES HAVE BEEN ENCLOSED TO SUBSTANTIATE THE CLAIM MADE I N THE AFFIDAVITS. THEREFORE, THESE CANNOT BE TAKEN TO BE TRUE. IN THIS REGARD, REFERENCE IS AGAIN DRAWN TOWARDS THE CASE O F SRI KRISHNA VS CIT, KANPUR & OTHERS REPORTED IN 142 ITR 618 (AL LD.),. THIS IS A JUDGMENT DELIVERED BY THE JURISDICTIONAL HIGH COURT AND THE RATIO LAID DOWN BY THIS JUDGMENT IS AS UNDER:- 'IT IS NEITHER A RULE OF PRUDENCE NOR A RULE OF LAW THAT THE STATEMENTS MADE IN AN AFFIDAVIT WHICH REMAINS UNCONTROVERTED, MUST INVARIABLY BE ACCEPTED AS TRUE AND RELIABLE. ORDINARILY, IN THE ABSENCE OF DENIAL, THE STATEMENTS MAY BE ACCEPTED AS TRUE BUT IF THERE ARE CIRCUMSTAN CES WHICH SUGGEST THAT THE STATEMENTS ON AFFIDAVIT SHOU LD NOT BE ACCEPTED AS TRUE, THE ABSENCE OF DENIAL BY THE O THER SIDE, WOULD NOT BY ITSELF BE SUFFICIENT TO CLOTHE T HE STATEMENTS .ON .AFFIDAVIT. WITH TRUTHFULNESS AND RE LIABILITY.' IN VIEW OF ABOVE FACTS, ALL THE ARGUMENTS MADE BY T HE ASSESSEE E AGAIN DISPOSED OFF AND REJECTED. THE VARIOUS DETAILS AND DOCUMENTS SUBMITTED BY THE COUNSEL OF ASSESSEE HAVE BEEN EXAMINED. AFTER EXAMINATION OF A LL DETAILS AND DOCUMENTS, INCLUDING THE SEIZED/IMPOUNDED DOCUMENTS , THE ASSESSMENT IN THE CASE OF ASSESSEE FOR THIS YEAR IS COMPLETED ON TOTAL INCOME OF RS.1,00,94,010/-. ITA NO.390 TO 396/LKW/2014 PAGE 37 OF 40 26. IN THE ABOVE ASSESSMENTS OF SHRI K. N. SINGH, T HE ASSESSING OFFICER HAS NOT MADE ANY ADDITION AND HAS ACCEPTED THE RETURNS FILED BY HIM U/S 153A OF THE ACT WHICH MEANS THAT HE HAS ACC EPTED THE DECLARATION OF SURRENDER MADE BY SHRI K. N. SINGH I N THE RESPECTIVE YEARS OF SURRENDER. THEREFORE, KEEPING IN VIEW ALL THE FACTS AND CIRCUMSTANCES, WE SET ASIDE THE ORDER OF LEARNED CI T(A) ON THIS ACCOUNT AND REMIT THE MATTER BACK TO THE OFFICE OF THE ASSE SSING OFFICER TO RECALCULATE THE ADDITION, IF ANY, AFTER TAKING INTO ACCOUNT THE TOTAL AMOUNT OF SURRENDER IN VARIOUS YEARS WITH RESPECT T O THE TOTAL INVESTMENTS IN VARIOUS PROPERTIES, IRRESPECTIVE OF THE YEAR OF INVESTMENT. THOUGH THE REVENUE HAS NOT CHALLENGED THE ACTION OF LEARNED CIT(A) IN REJECTING THE VALUATION DONE BY VALUER WHERE THE DI FFERENCE WAS LESS THAN 15% BUT IN THIS CASE, WE DEEM IT APPROPRIATE T HAT ASSESSING OFFICER SHOULD CONSIDER VALUATION OFFICERS VALUATION OF V ARIOUS PROPERTIES IRRESPECTIVE OF YEAR OF INVESTMENT. WHILE DOING SO , THE ASSESSING OFFICER SHOULD COMPARE THE TOTAL INVESTMENT DURING SEARCH P ERIOD AS VALUED BY REGISTERED VALUER TOWARDS VARIOUS PROPERTIES. FOR THE PURPOSE OF COMPARISON, THE CONSTRUCTION DONE BEFORE AND AFTER THE SEARCH PERIOD HAS TO BE IGNORED. IF THE DIFFERENCE BETWEEN SUCH VALUATION OF PROPERTY IN THE SEARCH PERIOD EXCEEDS THE SURRENDER AMOUNT F OR THAT PROPERTY, THE DIFFERENCE HAS TO BE ASSESSED AS INCOME OF THE ASSESSEE. IN VIEW OF THE ABOVE, GROUND NO. 4 IN ALL THE APPEALS RELATING TO ASSESSMENT YEAR 2003-04 TO 2008-09 IS ALLOWED FOR STATISTICAL PURPO SES. 27. NOW COMING TO GROUND NO. 5 IN ASSESSMENT YEA R 2004-05, WE FIND THAT ASSESSING OFFICER HAD MADE ADDITION OF RS .8,06,600/- WHICH THE LEARNED CIT(A) HAS REDUCED TO RS.1,66,600/-. THE L EARNED CIT(A) HAS ALLOWED PART RELIEF BY HOLDING THAT THE ASSESSEE HA D MADE WITHDRAWALS OF RS.5,12,000/- AND RS.1,08,000/- FOR PURCHASE OF LAND VIDE TWO DIFFERENT CHEQUES. THE BALANCE OF RS.1,66,600/- HA S BEEN UPHELD AND ITA NO.390 TO 396/LKW/2014 PAGE 38 OF 40 LEARNED CIT(A) HELD THAT NO EVIDENCE WAS FILED TO E XPLAIN THE SOURCE OF EXPENDITURE. LEARNED A. R., BEFORE US, HAS ARGUED THAT THE BALANCE AMOUNT OF RS.1,66,600/- SHOULD HAVE BEEN CONSIDERED AS PART OF SURRENDER MADE BY SHRI K. N. SINGH. WE FIND THAT T HE ADDITION OF RS.8,06,600/- WAS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF ACQUISITION OF VARIOUS PROPERTIES AS MENTIONED BY H IM IN HIS ORDER AT PAGE NO. 20 AND THE UNDISCLOSED INVESTMENT, SUSTAIN ED BY LEARNED CIT(A), CANNOT BE SET OFF BY THE SURRENDER OF SHRI K. N. SINGH AS THE SURRENDER WAS MADE FOR CONSTRUCTION ONLY. THE LEAR NED CIT(A) HAS ALREADY ALLOWED APPROPRIATE RELIEF THEREFORE, WE DO NOT INTEND TO INTERFERE IN HIS FINDINGS AND IN VIEW OF THE ABOVE, GROUND NO. 5 IN ASSESSMENT YEAR 2004-05 IS DISMISSED. 28. NOW COMING TO GROUND NO. 5 IN ASSESSMENT YEAR 2 005-06, WE FIND THAT LEARNED CIT(A) HAS CONFIRMED THE ADDITION ON A CCOUNT OF PROPERTY PURCHASED ON 17/02/2005. THE LEARNED CIT(A) HAS NO TED IN HIS ORDER THAT THE ASSESSING OFFICER HAD REJECTED THE EXPLANA TION BY SAYING THAT NAME OF THE BANK WAS NOT MENTIONED. THE LEARNED CI T(A) HAS HELD THAT NO FURTHER EVIDENCE WAS FILED BEFORE HIM ALSO AND B EFORE US ALSO NO FURTHER EVIDENCE HAS BEEN FILED THEREFORE, GROUND N O. 5 IN ASSESSMENT YEAR 2005-06 IS DISMISSED. 29. NOW COMING TO ONLY GROUND OF APPEAL IN ASSESSME NT YEAR 2009- 10, WE FIND THAT THE ASSESSING OFFICER HAD MADE ADD ITION OF RS.2,50,000/- ON ACCOUNT OF LOW HOUSE HOLD EXPENSES . THE LEARNED CIT(A) HAS HELD THAT BENEFIT OF SURRENDER MADE BY S HRI K. N. SINGH CANNOT BE ALLOWED AS NO EVIDENCE OF SOURCE OF ACQUI SITION OF VARIOUS HOUSE HOLD GOODS, PRESENT IN THE HOUSE, WAS FURNISH ED. WE FURTHER FIND THAT ASSESSING OFFICER HAD MADE A TOTAL ADDITION OF RS.10,00,000/- ON ACCOUNT OF VARIOUS HOUSE HOLD GOODS AVAILABLE IN TH E HOUSE AT THE TIME OF SEARCH FOR WHICH NO EVIDENCE WAS FILED AND THE T OTAL OF SUCH ASSETS ITA NO.390 TO 396/LKW/2014 PAGE 39 OF 40 WAS TAKEN AT RS.10,00,000/-. AS THE AMOUNT OF RS.1 0,00,000/- WAS DISTRIBUTED AMONG FOUR MEMBERS OF THE FAMILY AND TH E SHARE OF ASSESSEE, OUT OF SUCH SUM, WAS RS.2,50,000/-. WE F IND THAT LEARNED CIT(A) HAS RIGHTLY UPHELD THE ADDITION BY REJECTING THE CONTENTION OF THE ASSESSEE THAT THIS AMOUNT WAS TO BE ADJUSTED AGAINS T THE SURRENDER OF SHRI K. N. SINGH. THEREFORE, THE ONLY GROUND TAKEN IN ASSESSMENT YEAR 2009-10 IS DISMISSED. 30. IN THE RESULT, THE APPEALS FOR ASSESSMENT YEAR 2003-04 TO 2008-09 ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES AND PAR TLY DISMISSED WHEREAS THE APPEAL IN ASSESSMENT YEAR 2009-10 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 08/02/2019. SD/. SD/. [A. D. JAIN] [ T.S. KAPOOR ] VICE PRESIDENT ACCOUNTANT MEMBER DATED:08/03/2019 JJ/SINGH COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER ASSISTANT REGISTRAR ITA NO.390 TO 396/LKW/2014 PAGE 40 OF 40 1. DATE OF DICTATION 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR . P.S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S 6.DATE OF UPLOADING, IF NOT, REASON FOR NOT UPLOADI NG 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 8. DATE ON WHICH ORDER GOES FOR XEROX AND ENDORSEME NT 9. DATE ON WHICH THE FILE GOES TO THE O.S 10. THE DATE ON WHICH THE FILE GOES TO THE ASSISTAN T REGISTRAR FOR SIGNATURE ON THE ORDER 11.DATE ON WHICH FILES GOES TO DESPATCH SECTION FOR DESPATCH 12. DATE OF DISPATCH OF THE ORDER