ACIT, CC- 26, , NEW DELHI V. KRISHAN KUMAR MODI, NEW DELHI

ITA 3951/DEL/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9014 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-07-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2007-2008
• Appeal Filed On: 16-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J K MI SHRA
• Keywords: Unexplained investment; Gift; Double taxation relief; Valuation report; Block assessment; Notional interest; Reassessment proceedings; Set aside
• Section: 271(1)(c); 69C; 143(3); 142(1); 153A; 234B; 250; 69; 132; 15

Judgement Text

ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO.2892/DEL/2017 ASSESSMENT YEAR : 2006-07 ITA NO.2893/DEL/2017 ASSESSMENT YEA R: 2006-07 ITA NO.2894/DEL/2017 ASSESSMENT YEAR : 2012-13 KRISHAN KUMAR MODI, A-1, MAHARANI BAGH, NEW DELHI. (PAN: AANPM0159M) VS ACIT, CENTRAL CIRCLE 2, NEW DELHI. APPELLANT RESPONDENT ITA NO.3951/DEL/2017 ASSESSMENT YEAR : 2007-08 ITA NO.3952/DEL/2017 ASSESSMENT YEAR : 2008-09 ITA NO.3953/DEL/2017 ASSESSMENT Y EAR: 2009-10 ITA NO.3954/DEL/2017 ASSESSMENT YE AR: 2010-11 ITA NO.3955/DEL/2017 ASSESSMENT YEA R: 2011-12 ITA NO.3956/DEL/2017 ASSESSMENT YEAR : 2012-13 ACIT, CENTRAL CIRCLE 26, ROOM NO. 323, E2, ARA CENTRE, JHANDEWALAN EXTN., NEW DELHI110005 VS KRISHAN KUMAR MODI, A-1, MAHARANI BAGH, NEW DELHI-110054 (PAN: AANPM0159M) APPELLANT RESPONDENT ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 2 ASSESSEE BY : SHRI AJAY VOHRA, SR. ADVOCATE SHRI ROHIT JAIN, ADV. MS DEEPASHREE RAO, CA SHRI VIBHU GUPTA, CA DEPARTMENT BY: SHRI J.K. MISHRA, C.I. T. DR DATE OF HEARING : 12.06.2019 DATE OF PRONOUNCEMENT : 05.07.2019 O R D E R PER SUDHANSHU SRIVASTAVA, JM : THESE APPEALS HAVE BEEN PREFERRED BOTH BY THE ASSE SSEE AS WELL AS BY THE DEPARTMENT FOR THE DIFFERENT ASSESSM ENT YEARS UNDER CONSIDERATION. AS THE ISSUES WERE IDENTICAL, THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OF THROUGH TH IS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2.0 BRIEFLY STATED, THE FACTS, AS CULLED OUT FROM THE ORDERS OF THE LOWER AUTHORITIES, ARE THAT A SEARCH AND SEI ZURE OPERATION UNDER SECTION 132 OF THE INCOME TAX ACT, 1961 (HERE INAFTER CALLED THE ACT) WAS CARRIED OUT ON 09.11.2011 AT THE RES IDENTIAL PREMISES OF THE ASSESSEE LOCATED AT A-1, MAHARANI B AGH, NEW DELHI. DURING THE COURSE OF SEARCH, THE ASSESSEE WA S STATED TO HAVE BEEN SHOWN CERTAIN PAPERS WHICH WERE IN THE PO SSESSION OF THE SEARCH TEAM. THE SAID PAPERS HAVE BEEN REPRODUC ED IN THE ASSESSMENT ORDER AND ALSO FORM PART OF PAPER BOOK F ILED BY THE ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 3 ASSESSEE. AS PER THE ASSESSMENT ORDER, THE SAID INF ORMATION RELATED TO THE BANK ACCOUNT OF THE ASSESSEE IN HSBC BANK, GENEVA AND WAS RECEIVED UNDER DTAA/ DTAC BETWEEN IN DIA AND OTHER COUNTRIES. THE INFORMATION, ACCORDING TO THE ASSESSMENT ORDER, WAS THAT CERTAIN PERSONS IN INDIA (INCLUDING THE ASSESSEE) HELD BANK ACCOUNTS IN HSBC PRIVATE BANK (SUISSE), S A, SWITZERLAND. THE STATEMENT OF THE ASSESSEE WAS RECO RDED BY THE SEARCH TEAM ON 9.11.2011, COPY WHEREOF IS PLACED AT PAGES 35-49 OF THE ASSESSEES PAPER BOOK (IN SHORT APB). IN T HE COURSE OF STATEMENT RECORDED UNDER SECTION 132(4) OF THE, THO UGH THE APPELLANT DENIED OWNERSHIP OF ANY SUCH BANK ACCOUNT , THE ASSESSEE AGREED UPON TO OFFER TO TAX INCOME EQUIVAL ENT TO US $11,46,368 TO BUY PEACE AND AVOID LITIGATION. 2.1 ON THE BASIS OF THE AFORESAID STATEMENT, IN T HE RETURN OF INCOME FILED BY THE ASSESSEE ON 28.07.2012 UNDER SECTION 139(1) OF THE ACT FOR ASSESSMENT YEAR 2012-13, THE ASSESSEE OFFERED FOR TAX RS. 5,81,32,321/- AS INCOME UNDER S ECTION 69A OF THE ACT TO COVER THE AFORESAID OFFER OF US$ 11,46,3 58. THE SAID AMOUNT WAS COMPUTED BY APPLYING THE CONVERSION RATE OF RS. 50.71 PER DOLLAR, AS APPLICABLE IN THE RELEVANT ASS ESSMENT YEAR ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 4 2012-13. ALONG WITH THE SAID RETURN, FOLLOWING NOTE WAS ALSO FILED BY THE ASSESSEE: 1.DURING THE COURSE OF SEARCH CARRIED AT THE RESID ENTIAL PREMISES, STATEMENT OF THE ASSESSEE WAS RECORDED ON 09.11.2011 UNDER SECTION 132(4) OF THE INCOME TAX A CT, 1961 (THE ACT ) DURING THE COURSE OF RECORDING OF THE SAID STATEMEN T, THE APPLICANT, ON THE BASIS OF CONTENTS OF A PAPER SHOW N TO HIM FOR THE FIRST TIME, MERELY IN ORDER TO AVOID ENTERI NG INTO PROTRACTED/COSTLY LITIGATION WITH THE TAX DEPARTMEN T, AGREED TO VOLUNTARILY SURRENDER INCOME EQUIVALENT TO US$ 1 1.46 LAKHS MENTIONED THEREIN. THIS VOLUNTARY SURRENDER W AS WITHOUT PREJUDICE TO THE PRIMARY CONTENTION OF THE ASSESSEE THAT THE SAID PAPER DID NOT BELONG/PERTAIN TO THE A SSESSEE. THIS FACT WAS ELABORATELY EXPLAINED IN THE LETTER D ATED 09.02.2012 FILED BEFORE JCIT (OSD), JHANDEWALAN, NE W DELHI, COPY ATTACHED AS ANNEXURE 2. IN VIEW OF THE AFORESAID, THE ASSESSEE HAS, SUO MOT O, OFFERED TO TAX RS.5,81,32,321 IN THE RETURN OF INCOME FOR T HE ASSESSMENT YEAR 2012-13 UNDER SECTION 69A OF THE AC T, TO SPECIFICALLY COVER US$ 11,46,368 SURRENDERED IN THE AFORESAID STATEMENT. FOR THE SAID PURPOSE, THE TT BUYING RATE OF STATE BANK OF INDIA AS ON 31.03.2012 HAS BEEN ADOPTED AS THE APPLICABLE EXCHANGE RATE FOR CONVERSION INTO INDIAN RUPEE AS PER RULE 115 OF THE INCOME TAX RULES, 1962. ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 5 THE AFORESAID PAYMENT OF TAX IS, IT IS REITERATED A T THE COST OF DUPLICITY, IS BEING MADE ONLY IN A SPIRIT OF COOPER ATION AND WITHOUT PREJUDICE TO THE MAIN CONTENTION THAT THE A SSESSEE IS NOT AWARE OF THE NATURE/CONTENTS OF THE PAPER THAT WAS SHOWN TO HIM AT THE TIME OF SEARCH AND THE SAID PAP ER DOES NOT BELONG/PERTAIN TO HIM. 2.2 THE AFORESAID NOTE WAS FILED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER ALONG WITH LETTER DATED 30.11.201 2, THE RELEVANT EXTRACTS WHEREOF ARE ALSO REPRODUCED HEREUNDER: IT MAY ALSO BE PERTINENT TO POINT OUT THAT FOR THE REASONS STATED IN THE STATEMENT RECORDED ON 09.11.2011, TO AVOID ENTERING INTO PROTRACTED/COSTLY LITIGATION AND IN A SPIRIT OF COOPERATION, THE ASSESSEE VOLUNTARILY AND SUOMOTU A GREED TO PAY TAX ON INCOME EQUIVALENT TO US$ 11.46 LAKHS MEN TIONED THEREIN. IT MAY BE MENTIONED THAT SUBSEQUENTLY, IN THE LIGHT OF THE AFORESAID STATEMENT, THE ASSESSEE, IN THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2012-13 OFFERED FOR TAX ADDITIO NAL INCOME OF RS.5,81,32,321 (EQUIVALENT TO US$ 11.46 L ACS BY APPLYING EXCHANGE RATE @RS.50.71 PER DOLLAR) AND PA ID TAX THEREON. A COPY OF THE RETURN FILED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2012-13 ALONG WITH COMPUTATION OF I NCOME IS ATTACHED FOR YOUR KIND PERUSAL AND READY REFEREN CE AS ANNEXURE 4. IT IS AGAIN CLARIFIED THAT SINCE THE DOCUMENT, ON T HE BASIS OF WHICH THE AFORESAID AMOUNT HAS BEEN ADDITIONALLY OF FERED FOR ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 6 TAX, WAS CONFRONTED TO THE ASSESSEE DURING THE COUR SE OF SEARCH FALLING THE PREVIOUS YEAR RELEVANT TO THE AS SESSMENT YEAR 2012-13, THE AMOUNT HAS BEEN OFFERED FOR TAX I N THE SAID ASSESSMENT YEAR 2012-13 UNDER SECTION 69A OF THE AC T [INADVERTENTLY MENTIONED AS ASSESSMENT YEAR 2011-12 IN THE LETTER DATED 9.02.2012] THE AFORESAID ADDITIONAL INCOME/DISCLOSURE HAS BEEN , IT IS REITERATED, MADE AS PART OF STATEMENT UNDER SECTION 132(4) READ WITH EXPLANATION 5A UNDER SECTION 271(1)(C) OF THE ACT, SUBJECT TO THERE BEING NO PENALTY AND/OR PROSECUTIO N UNDER THE PROVISIONS OF THE ACT. 2.3 SUBSEQUENTLY, PURSUANT TO SEARCH UNDER SECTION 132 OF THE ACT, PROCEEDINGS UNDER SECTION 153A OF THE ACT WERE INITIATED BY THE ASSESSING OFFICER VIDE SEPARATE NOTICES DATE D 2.11.2012 FOR ASSESSMENT YEARS 2006-07 TO 2011-12 AND FOR ASSESSM ENT YEAR 2012-13, THE YEAR OF SEARCH, REGULAR ASSESSMENT WAS UNDERTAKEN UNDER SECTION 143(3) OF THE ACT. 2.4 DURING THE COURSE OF PROCEEDINGS UNDER SECTION 153A/143(3) OF THE ACT FOR ASSESSMENT YEAR 2006-07, THE ASSESSING OFFICER, ON THE BASIS OF PAPERS CONFRONTE D TO THE ASSESSEE DURING THE COURSE OF SEARCH, VIDE VARIOUS NOTICES/ QUESTIONNAIRES REQUIRED THE ASSESSEE TO FURNISH INF ORMATION/ DOCUMENTS IN RESPECT OF AN ALLEGED BANK ACCOUNT MAI NTAINED ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 7 WITH HSBC, GENEVA, SWITZERLAND BEARING CODE BUP_SIFIC_PER_ID_5090158251. IN THE ASSESSMENT ORDE R, IT IS MENTIONED THAT THE INFORMATION IS IN THE FORM OF A THREE PAGE DOCUMENT REPRODUCED ON PAGES 3 TO 8 OF THE ASSESSME NT ORDER. IT IS STATED THAT THE DOCUMENT WAS CONFRONTED TO THE A SSESSEE VIDE SHOW-CAUSE NOTICE ISSUED ON 12.02.2015. REFERRING T O THE SAID DOCUMENT AND THE STATEMENT OF THE ASSESSEE RECORDED AT THE TIME OF SEARCH, THE ASSESSEE WAS REQUIRED TO EXPLAIN WHY THE BALANCE SHOWN AS PER THE DOCUMENT THE CREDITS OF RS. 4,90,2 0,749/- (US $11,02,829) AND RS.18,79,579/- (US$ 43,539) APPEARI NG IN THE BANK ACCOUNT MAY NOT BE TREATED AS INCOME UNDER SEC TION 69A OF THE ACT FOR ASSESSMENT YEARS 2006-07 AND 2007-08 RE SPECTIVELY. 2.5 IN RESPONSE THERETO, THE ASSESSEE FILED REPLY DATED 23.02.2015, WHEREIN THE ASSESSEE REPEATEDLY DENIED HAVING MAINTAINED ANY SUCH BANK ACCOUNT WITH HSBC, GENEVA AND CONTENDED THAT NO ADVERSE INFERENCE SHOULD BE DRAWN AGAINST THE ASSESSEE MERELY ON THE BASIS OF SOME LOOSE UNAUTHEN TICATED PIECES OF PAPER IN THE POSSESSION OF THE REVENUE SH OWN TO THE ASSESSEE DURING THE COURSE OF SEARCH, SOURCE WHEREO F WAS ALSO NOT KNOWN/ CREDIBLE. THE ASSESSEE ALTERNATIVELY ALS O TOOK THE STAND THAT THE ASSESSEE HAS, TO AVOID LITIGATION, I N ASSESSMENT ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 8 YEAR 2012-13 ALREADY OFFERED FOR TAX RS.5,81,32,321 /- AS INCOME UNDER SECTION 69A OF THE ACT TO COVER THE ENTIRE AM OUNT OF US$ 11,46,358. THE ASSESSEE SOUGHT TO JUSTIFY THE SAID DISCLOSURE. IT WAS ALTERNATIVELY CONTENTED THAT IN CASE THE ASSESS ING OFFICER WERE TO TAX THE AMOUNT IN ASSESSMENT YEARS 2006-07 AND 2 007-08, THE ASSESSING OFFICER SHOULD EXCLUDE THE AMOUNT DEC LARED IN ASSESSMENT YEAR 2012-13, TO AVOID DOUBLE TAXATION. 2.6 THE ASSESSING OFFICER, IN THE ASSESSMENT ORDER DATED 27.02.2015 UNDER SECTION 153A/ 143(3) OF ACT FOR AS SESSMENT YEAR 2006-07, HOWEVER, DID NOT AGREE WITH THE AFORE SAID CONTENTIONS OF THE ASSESSEE. THE ASSESSING OFFICER HELD THAT THE ASSESSEE HAS BEEN EVASIVE IN HIS REPLIES AND THAT F ROM THE PERSON- PARTICULARS MENTIONED IN THE DOCUMENTS, IT IS CLEAR THAT THE ASSESSEE OPENED AND/OR OPERATED THE ACCOUNT IN HSBC BANK. IT WAS OBSERVED THAT TO VERIFY THE DETAILS, A REFER ENCE HAS BEEN SENT TO COMPETENT AUTHORITIES IN SWITZERLAND AND OT HER COUNTRIES THROUGH FT&TR DIVISION OF THE CBDT AND THE DETAILS ARE AWAITED. THE DENIAL OF THE ASSESSEE WAS HELD TO BE AGAINST H UMAN PROBABILITY AND THE ASSESSING OFFICER PROCEEDED TO TAX THE AFORESAID AMOUNT OF RS. 4,90,20,749/- EQUIVALENT TO ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 9 US$11,02,829 BY APPLYING CONVERSION RATE OF RS.44.4 5 PER DOLLAR AS INCOME OF THE ASSESSEE UNDER SECTION 69 OF THE A CT. 2.7 VIDE SEPARATE BUT IDENTICAL ASSESSMENT ORDER DATED 27.02.2015 UNDER SECTION 153A/ 143(3) OF THE ACT FO R ASSESSMENT YEAR 2007-08, THE ASSESSING OFFICER PROCEEDED TO TA X THE RS. 48,79,578/- EQUIVALENT TO US$43,539 BY APPLYING CON VERSION RATE OF RS.43.17 PER DOLLAR AS INCOME OF THE ASSESSEE UN DER SECTION 69 OF THE ACT. APART FROM THE SAID ADDITION, IN ASSESS MENT YEAR 2007-08, THE ASSESSING OFFICER ALSO MADE ADDITION O N ACCOUNT OF INTEREST THAT THE ASSESSEE, ACCORDING TO THE ASSESS ING OFFICER, WOULD HAVE EARNED ON THE BALANCE IN THE FOREIGN BAN K ACCOUNT. 2.8 IN THE ASSESSMENT FOR ASSESSMENT YEAR 2012-13 COMPLETED BY THE ASSESSING OFFICER UNDER SECTION 14 3(3) OF THE ACT VIDE ORDER DATED 27.02.2015, THE ASSESSMENT YEAR IN WHICH THE ASSESSEE OFFERED THE AMOUNT FOR TAXATION, THE ASSES SING OFFICER ACCEPTED THE OFFER OF THE ASSESSEE AND BROUGHT RS. 5,81,32,321/- TO TAX EQUIVALENT TO US $ 11,46,358 AS DECLARED IN THE RETURN OF INCOME. THIS IS DESPITE THAT FACT THAT IN THE ASSES SMENT ORDERS PASSED UNDER SECTION 153A R.W.S. 143(3) OF THE ACT FOR THE ASSESSMENT YEARS 2006-07 AND 2007-08, ADDITION OF RS. ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 10 4,90,20,749/- AND 18,79,578/- AS DISCUSSED SUPRA, W ERE MADE BY THE ASSESSING OFFICER UNDER SECTION 69 OF THE AC T. 2.9 IN THE AFORESAID BACKGROUND, THE ASSESSEE FILE D APPEALS BEFORE THE LD. CIT (A) FOR ASSESSMENT YEARS 2006-07 AND 2007-08 CHALLENGING THE AFORESAID ADDITION/S MADE BY THE AS SESSING OFFICER. IN THE ALTERNATIVE, THE ASSESSEE CONTENDED BEFORE THE LD. CIT (A) THAT IN CASE THE ADDITIONS MADE BY THE ASSE SSING OFFICER IN ASSESSMENT YEARS 2006-07 AND 2007-08 WERE TO BE AFF IRMED BY THE LD. CIT (A), THEN, TO AVOID DOUBLE ADDITION, TH E AMOUNT ALREADY OFFERED FOR TAX BY THE ASSESSEE IN ASSESSME NT YEAR 2012- 13 SHOULD BE DIRECTED TO BE DELETED. BEFORE, THE LD . CIT (A), THE ASSESSEE ALSO CHALLENGED THE VALIDITY OF THE ASSESS MENT ORDERS ON VARIOUS LEGAL GROUNDS. 2.10 DURING THE FIRST APPELLATE PROCEEDINGS, THE L D. CIT (A) CALLED FOR THE REMAND REPORT OF THE ASSESSING OFFIC ER, PARTICULARLY ON THE ISSUE OF DOUBLE TAXATION OF THE AMOUNT. IN P ARA 9.17 OF THE APPELLATE ORDER FOR ASSESSMENT YEAR 2006-07, THE LD . CIT (A) SPECIFICALLY NOTED THAT NEITHER THE AO NOR THE ADDL . CIT PROVIDED ANY COMMENTS ON THE ISSUE OF DOUBLE TAXATION OF THE SAME INCOME IN TWO DIFFERENT ASSESSMENT YEARS. THE LD. C IT (A) HELD THAT THE DOCUMENT WAS CONFRONTED TO THE ASSESSEE AN D HIS ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 11 STATEMENT WAS RECORDED UNDER SECTION 132(4) OF THE ACT WHEREIN THE ASSESSEE OFFERED THE AMOUNT AS HIS INCOME, WHIC H CONSTITUTES EVIDENCE FOUND DURING THE COURSE OF SEARCH. IN PARA 14.18, THE LD. CIT (A) NOTED THAT IT MAY BE POSSIBLE THAT ONE ARGUMENT IN ISOLATION MAY NOT BE SUFFICIENT TO PROVE THE CASE O F ASSESSING OFFICER (AO), HOWEVER, IF IT IS SEEN IN TOTALITY WI TH ALL THE FACTS AND CIRCUMSTANCES OF THIS CASE TAKEN TOGETHER, IT CAN B E CONCLUDED THAT THE DOCUMENT BELONGS TO THE ASSESSEE. THE LD. CIT (A), WHILE DISPOSING OF THE APPEALS FOR ASSESSMENT YEARS 2006- 07 AND 2007- 08, VIDE SEPARATE ORDERS DATED 27.03.2017, DISMISSE D THE LEGAL OBJECTIONS OF THE ASSESSEE AND UPHELD THE VALIDITY OF THE ASSESSMENT ORDER. THE LD. CIT (A) ALSO UPHELD THE A DDITION MADE BY THE ASSESSING OFFICER ON THE GROUND THAT SINCE T HE ADDITION WAS MADE BY THE ASSESSING OFFICER ON THE BASIS OF DOCUMENT/INFORMATION RECEIVED UNDER DTAA/DTC, WHICH CONTAINED DETAILS OF THE ASSESSEE, SUCH INFORMATION WAS AUTHENTIC. FURTHER, IN SO FAR AS THE ISSUE OF YEAR IN WHICH THE AMOUNT WAS TO BE TAXED, THE LD. CIT (A) HELD THAT T HE DEPOSIT IN FOREIGN BANK ACCOUNT WERE RIGHTLY TAXED BY THE ASSE SSING OFFICER IN THE ASSESSMENT YEARS 2006-07 AND 2007-08.THE ASS ESSING OFFICER HELD THAT SECTION 69 OF THE ACT WOULD BE AP PLICABLE SINCE ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 12 THE ASSESSEE WAS FOUND TO HAVE INVESTED/ DEPOSITED THE MONEY IN THE BANK ACCOUNT AND SECTION 69A OF THE ACT WAS NOT APPLICABLE SINCE THE SAID SECTION ONLY APPLIES TO MONEY, BULLIO N, JEWELLERY OR OTHER VALUABLE ARTICLE WHICH IS IN THE PHYSICAL FOR M WHERE THE YEAR OF ACQUISITION CANNOT BE IDENTIFIED. AS REGARD S THE ALTERNATIVE CONTENTION OF THE ASSESSEE, THE LD. CIT (A), IN SEP ARATE APPELLATE ORDER DATED 27.03.2017 FOR ASSESSMENT YEAR 2012-13, DIRECTED THAT THE ADDITION BE RETAINED ON PROTECTIVE BASIS A S IN ALL LIKELIHOOD THE ASSESSEE MAY NOT ACCEPT THE FINDINGS IN ASSESSMENT YEAR 2006-07 AND 2007-08 AND MAY PREFER SECOND APPEAL. THE ADDITION WAS THUS DIRECTED TO BE RETAIN ED ON PROTECTIVE BASIS, SUBJECT TO THE OUTCOME OF THE FUR THER APPEALS. 2.11 IT IS IN THE AFORESAID BACKGROUND THAT THE PR ESENT APPEALS HAVE BEEN PREFERRED RAISING COMMON GROUNDS OF APPEAL. 2.12 IN GROUNDS OF APPEAL NOS.1 TO 1.2 FOR ASSESSM ENT YEAR 2006-07, THE ASSESSEE HAS CHALLENGED THE ORDER OF T HE LD. CIT (A) UPHOLDING THE VALIDITY OF THE ASSESSMENT ORDER DATE D 27.02.2015, PASSED UNDER SECTION 143(3) R.W.S. 153A OF THE ACT ON THE GROUND THAT THE ASSESSMENT WAS CONCLUDED WITHOUT ISSUANCE AND SERVICE OF STATUTORY NOTICE UNDER SECTION 143(2) OF THE ACT WITHIN THE PRESCRIBED TIME LIMIT AND THAT THE ASSESSMENT HAVIN G BEEN ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 13 COMPLETED DE HORS ANY INCRIMINATING MATERIAL/ DOCUMENT BEING FOUND/ SEIZED DURING THE COURSE OF SEARCH CONDUCTED IN THE CASE OF THE ASSESSEE, THE ASSESSMENT WAS ILLEGAL AND BAD IN LAW. FURTHER, IN GROUNDS OF APPEAL NOS.2 TO 2.3, THE ADD ITION MADE UNDER SECTION 69 OF THE ACT HAS BEEN CHALLENGED ON MERITS. 3.0 BEFORE US, THE LD. SR. COUNSEL VEHEMENTLY CHAL LENGED THE VALIDITY OF THE ASSESSMENT ORDER AND FILED DETA ILED CHART OF ISSUES SUMMARISING THE LEGAL AND FACTUAL SUBMISSION S ON THE AFORESAID GROUNDS. ON THE LEGAL GROUNDS, THE LD. SR . COUNSEL SUBMITTED THAT THE IMPUGNED REASSESSMENT ORDER PASS ED UNDER SECTION 153A R.W.S. 143(3) IS BEYOND JURISDICTION A ND BAD IN LAW FOR THE REASON THAT THE ASSESSING OFFICER FAILED TO ISSUE (LEAVE ASIDE SERVE) THE MANDATORY STATUTORY NOTICE REQUIRE D UNDER SECTION 143(2) OF THE ACT WITHIN THE STIPULATED TIM E PERIOD. IT WAS SUBMITTED THAT NOTICE UNDER SECTION 153A OF THE ACT WAS ISSUED TO THE ASSESSEE ON 02.11.2012, REQUIRING THE ASSESS EE TO FURNISH RETURN OF INCOME FOR THE ASSESSMENT YEAR 2006-07. I N RESPONSE THERETO, THE ASSESSEE VIDE LETTER DATED 21.11.2012, FILED RETURN OF INCOME DECLARING INCOME OF RS.1,09,95,049/- AS DECL ARED IN THE ORIGINAL RETURN. SUBSEQUENTLY, THE ASSESSING OFFICE R ISSUED NOTICE UNDER SECTION 142(1) DATED 15.07.2013, BUT NO NOTIC E WAS ISSUED ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 14 UNDER SECTION 143(2) OF THE I.T. ACT. IT WAS SUBMIT TED THAT NOTICE UNDER SECTION 143(2) OF THE ACT WAS, UNDISPUTEDLY, ISSUED FOR THE FIRST TIME ON 21.10.2013, WHICH WAS SERVED UPON THE ASSESSEE DURING THE COURSE OF REASSESSMENT PROCEEDINGS. IT W AS CONTENDED THAT IN TERMS OF SECTION 143(2) OF THE ACT, NOTICE UNDER THE SAID SECTION SHOULD HAVE BEEN ISSUED AND SERVED UPON THE ASSESSEE WITHIN A PERIOD OF 6 MONTHS FROM THE END OF THE FIN ANCIAL YEAR IN WHICH THE RETURN WAS FURNISHED, THAT IS, ON OR BEFO RE 30.09.2013. HOWEVER, THE NOTICE WAS ISSUED ON 21.10.2013, I.E., BEYOND THE STIPULATED TIME PERIOD AS PROVIDED IN THE SAID SECT ION. HE CONTENDED THAT IN THE ABSENCE OF ISSUANCE OF NOTICE UNDER SECTION 143(2) OF THE ACT, ASSESSMENT UNDER SECTION 143(3) READ WITH SECTION 153A/153C OF THE ACT IS INVALID. HE VEHEMEN TLY RELIED UPON THE DECISION OF THE HONBLE SUPREME COURT IN T HE CASE OF CIT VS. HOTEL BLUE MOON: 321 ITR 362 (SC) AND THE D ELHI HIGH COURT IN THE CASE OF CIT VS. PAWAN GUPTA &ORS.: 223 CTR 487 (DEL), APART FROM VARIOUS OTHER DECISIONS REFERRED IN THE CHART. THE LD. COUNSEL, IN FAIRNESS, SUBMITTED THAT THE AF ORESAID ISSUE IS COVERED AGAINST THE ASSESSEE BY THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF ASHOK CHADDHA VS. I TO: 337 ITR 399 (DEL), THOUGH HE TRIED TO DISTINGUISH THE SAID DECISION. ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 15 3.1 THE SECOND LEGAL ARGUMENT TAKEN BY THE LD. SR. COUNSEL WAS THAT SINCE THE ASSESSMENT UNDER SECTION 153A OF THE IT ACT HAS BEEN COMPLETED AFTER MAKING ADDITIONS DE -HORS ANY INCRIMINATING MATERIAL/ DOCUMENT BEING FOUND/ SEIZE D DURING THE COURSE OF SEARCH, THE ASSESSMENT AS WELL AS THE ADD ITION IS CLEARLY WITHOUT JURISDICTION AND BAD IN LAW AND RELIED UPON THE FOLLOWING DECISIONS OF THE SUPREME COURT AND THE JURISDICTION AL DELHI HIGH COURT: - CIT VS. SINGHAD TECHNICAL EDUCATION SOCIETY: 397 IT R 344 (SC) - PCIT V. MEETAGUTGUTIA [2018] 257 TAXMAN 441 (SC) AFFIRMING THE DECISION OF THE DELHI HIGH COURT IN T HE CASE OF PCIT VS. MEETAGUTGUTIA: 395 ITR 526 (DEL) - CIT VS. KABUL CHAWLA: 234 TAXMAN 300 - CIT VS. CHETAN DAS LACHMAN DAS: 254 CTR 392 (DEL) - CIT VS. ANIL BHATIA: 211 TAXMANN 453 (DEL) - CIT VS. LACHMAN DAS BHATIA: 254 CTR 383 (DEL) - PCIT V. VIKAS GUTGUTIA: 396 ITR 691 (DELHI) 3.2 SPECIFIC RELIANCE WAS PLACED BY THE LD. SR. C OUNSEL ON THE DECISION OF COORDINATE DELHI BENCH OF THE TRIBU NAL IN THE CASE OF ANURAG DALMIA VS. DCIT: ITA 5395 OF 2017, WHEREI N THE TRIBUNAL QUASHED SIMILAR ASSESSMENTS COMPLETED UNDE R SECTION 153A R.W.S. 143(3) OF THE IT ACT FOR MAKING ADDITIO N ON ACCOUNT OF FOREIGN BANK ACCOUNT, ON THE BASIS OF SIMILAR DOCUM ENT . HE FURTHER RELIED UPON THE FOLLOWING DECISIONS, WHERE ASSESSMENTS ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 16 FRAMED UNDER SECTION 153A R.W.S. 143(3) OF THE IT A CT, FOR MAKING ADDITION ON ACCOUNT OF ALLEGED FOREIGN BANK ACCOUNT , MERELY ON THE BASIS OF SOME UNSIGNED/ UNDATED/ UNAUTHENTICATE D PIECE OF PAPER, WHICH WAS NOT FOUND DURING THE COURSE OF SEA RCH WAS QUASHED: - BISHWANATHGARODIA VS. DCIT: 76 TAXMANN.COM 81 (KOL. TRIB) - YAMINI AGARWAL VS. DCIT: 83 TAXMANN.COM 209 (KOL. T RIB) 3.3 ON THE ISSUE OF STATEMENT OF THE ASSESSEE RECO RDED DURING THE COURSE OF SEARCH BEING REGARD AS CONSTIT UTING INCRIMINATING MATERIAL, THE COUNSEL SUBMITTED THAT IT IS UNDISPUTED THAT DURING THE COURSE OF SEARCH PROCEED INGS NO DOCUMENT/INFORMATION, MUCH LESS ANYTHING INCRIMINAT ING, WAS FOUND FROM THE PREMISES OF THE ASSESSEE IN RESPECT OF THE FOREIGN BANK ACCOUNT. IT WAS CONTENDED THAT ON CAREFUL PER USAL OF SECTION 132(4) OF THE IT ACT, IT IS CLEAR THAT THE SAID SECTION REQUIRES THE AUTHORIZED OFFICER TO RECORD STATEMENT OF A PERSON IN WHOSE POSSESSION OR CONTROL ANY BOOKS OF ACCOUNT, DOCUMENTS, MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING IS FOUND AND THEREFORE, IN ORDER TO CONSTITUTE EVIDENC E UNDER SECTION 132(4) OF THE IT ACT, STATEMENT MUST BE OF A PERSON FOUND TO BE IN POSSESSION OR CONTROL OF ANY INCRIMINATING MATERIAL . ON THE OTHER ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 17 HAND, IN THE PRESENT CASE, THE ASSESSEE WAS NOT FOU ND TO BE IN POSSESSION OF THE ALLEGED PAPERS AND THEREFORE, STA TEMENT OF THE ASSESSEE CANNOT BE REGARDED AS SEARCH EVIDENCE IN T ERMS OF SECTION 132(4) OF THE IT ACT. IT WAS CONTENDED THAT EVEN OTHERWISE, STATEMENT CANNOT SIMPLY BE THE BASIS FOR MAKING ADDITION IN THE ABSENCE OF MATERIAL SUCH AS, BOOKS OF ACCOUNT, DOCUMENTS, MONEY, BULLION, JEWELLERY AND THE LIKE B EING FOUND OR DISCOVERED DURING SEARCH. HE RELIED UPON THE DECISI ON OF THE DELHI HIGH COURT IN THE CASE OF PCIT VS. MEETA GUTG UTIA: 395 ITR 526, WHEREIN IT HAS BEEN HELD THATSECTION 153A OF T HE IT ACT IS AN EXTREMELY POTENT POWER WHICH ENABLES THE REVENUE TO RE-OPEN AT LEAST SIX YEARS OF ASSESSMENTS EARLIER TO THE YEAR OF SEARCH AND IS NOT TO BE EXERCISED LIGHTLY. THUS, IT IS ONLY IF DU RING THE COURSE OF SEARCH UNDER SECTION 132 INCRIMINATING MATERIAL JUS TIFYING THE RE- OPENING OF THE ASSESSMENTS FOR SIX PREVIOUS YEARS I S FOUND THAT THE INVOCATION OF SECTION 153A WOULD BE JUSTIFIED. IT WAS SUBMITTED THAT SLP PREFERRED BY THE REVENUE AGAINST THE AFORESAID DECISION HAS BEEN DISMISSED IN 257 TAXMAN 441 (SC). HE FURTHER RELIED UPON THE DECISION OF THE GUJARAT HIGH COURT IN THE CASE OF PCIT VS. SOMAYA CONSTRUCTION PVT. LTD.: 387 ITR 529 AND VARIOUS OTHER DECISIONS. INSOFAR AS THE RELIANC E PLACED BY THE ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 18 CIT(APPEALS) ON THE DECISION OF THE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. RAJKUMAR ARORA: 52 TAXMANN.COM 172 IS CONCERNED, IT WAS SUBMITTED THAT THE DECISION OF TH E JURISDICTIONAL HIGH COURT IN KABUL CHAWLA (SUPRA) IS BINDING, IN P REFERENCE TO THE ORDER OF THE HONBLE ALLAHABAD HIGH COURT. 3.4 IN VIEW OF THE AFORESAID ARGUMENTS, THE LD. CO UNSEL CONTENDED THE ADDITION OF RS.4,90,20,749 MADE BY TH E ASSESSING OFFICER IN ASSESSMENT YEAR 2006-07 DE-HORS ANY MATERIAL/DOCUMENT FOUND DURING THE COURSE OF SEARCH IS CLEARLY OUTSIDE THE SCOPE OF PROCEEDINGS UNDER SECTION 153A OF THE IT ACT AND IS, THEREFORE, ILLEGAL AND BAD IN LAW AND HENCE CALLS FOR BEING DELETED ON THIS PRELIMINARY GROUND ITSELF. HE PRAYE D THAT THE ASSESSMENT ORDER BE ANNULLED ON THIS GROUND. 3.5 ON MERITS, THE LD. SR. COUNSEL CONTENDED THAT THE ASSESSEE REPEATEDLY AND CATEGORICALLY ASSERTED THAT THE ASSESSEE DID NOT MAINTAIN ANY BANK ACCOUNT WITH HSBC, GENEVA . FURTHER, IT WAS ALSO REPEATEDLY SUBMITTED THAT NO ADVERSE IN FERENCE SHOULD BE DRAWN AGAINST THE ASSESSEE MERELY ON THE BASIS O F SOME LOOSE UNAUTHENTICATED PIECES OF PAPER IN THE POSSESSION O F THE REVENUE, WHICH WERE SHOWN TO THE ASSESSEE DURING TH E COURSE OF SEARCH, SOURCE WHEREOF WAS ALSO NOT KNOWN/ CREDIBLE . HE ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 19 SUBMITTED THAT DESPITE THE FACT THAT THE ASSESSEE H AD NO CONCERN/ CONNECTION WITH THE AFORESAID PIECE OF PAP ER SHOWN TO HIM AT THE TIME OF SEARCH, MERELY TO AVOID ENTERING INTO PROTRACTED/ COSTLY LITIGATION WITH THE INCOME TAX D EPARTMENT AND PARTICULARLY HAVING REGARD TO THE FACT THAT THE TAX LIABILITY ON THE BASIS OF THE SAID PAPER WAS INFORMED AT THE TIME OF SEARCH TO BE AROUND RS.2 CRORES, THE ASSESSEE AGREED TO VOLUNTAR ILY OFFER FOR TAX INCOME EQUIVALENT TO US $11.46 LACS. THE SAID O FFER WAS MADE ONLY IN THE SPIRIT OF SETTLEMENT AND TO AVOID LITIG ATION, WITHOUT PREJUDICE TO THE PRIMARY CONTENTION OF THE ASSESSEE THAT THE SAID UNSIGNED/ UNDATED PIECE OF PAPER DID NOT BELONG/ PE RTAIN TO HIM. THE AFORESAID FACTS WERE PLACED ON RECORD VIDE LETT ER DATED 09.02.2012 FILED BEFORE JCIT (OSD), JHANDEWALAN EXT ENSION, NEW DELHI. HE ALSO REFERRED TO THE NOTE APPENDED TO THE RETURN OF INCOME AND LETTER DATED 30.11.2012 FILED WITH THE R ETURN. HE SUBMITTED THAT THE ASSESSING OFFICER, WITHOUT TAKIN G INTO CONSIDERATION THE FACT THAT THE AMOUNT OF US$ 11,46 ,368 WAS OFFERED TO TAX BY THE ASSESSEE IN THE RETURN OF INC OME FILED FOR THE ASSESSMENT YEAR 2012-13, MERELY TO BUY PEACE AND TO AVOID LITIGATION, MADE ONCE AGAIN, ADDITION OF AMOUNT EQU IVALENT TO US $11,02,829 IN THE ASSESSMENT YEAR UNDER CONSIDERATI ON. ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 20 3.6 THE LD. SR. COUNSEL FURTHER SUBMITTED THAT THE ENTIRE CASE OF THE ASSESSING OFFICER IS BASED ON CERTAIN U NSIGNED/ UNDATED/ UNAUTHENTICATED LOOSE PIECES OF PAPERS, WH ICH WAS FOR THE FIRST TIME SHOWN TO THE ASSESSEE AT THE TIME OF SEARCH AND COPY WHEREOF WAS GIVEN SUBSEQUENTLY AT THE TIME OF RECORDING OF STATEMENT ON 11.12.2014. ANALYZING THE SAID DOCUMEN T, IT WAS SUBMITTED THAT EVEN THE CONTENTS OF THE UNSIGNED/ U NDATED/ UNAUTHENTICATED LOOSE PIECES OF PAPERS NOWHERE ESTA BLISH THAT THE SAID PAPERS AND/ OR AMOUNTS MENTIONED THEREIN B ELONGED/ PERTAINED TO THE ASSESSEE. IT WAS SUBMITTED THAT: ( A) THE PAPER NOWHERE REFERS TO THE NAME OF ANY BANK, LEAVE ASIDE CONTAINING COMPLETE PARTICULARS OF THE SO-CALLED BANK IN GENEV A; (B) IN THE ENTIRE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS NOT MENTIONED THE SOURCE WHEREFROM THE AFORESAID UNSIGNED/ UNDATE D/ UNAUTHENTICATED LOOSE PIECES OF PAPERS HAVE BEEN RE CEIVED; (C) IN THE ASSESSMENT ORDER IT IS VAGUELY MENTIONED THAT DOCUMENT HAS BEEN RECEIVED AS A PART OF TAX INFORMATION EXCHANGE TREATY BETWEEN GOVERNMENT OF INDIA AND OTHER COUNTRIES, W ITHOUT EVEN BOTHERING TO MENTION THE NAME OF THE COUNTRY FROM W HICH THE INFORMATION HAS BEEN RECEIVED. HE VEHEMENTLY CONTEN DED THAT THE ASSESSING OFFICER FAILED TO APPRECIATE THAT : (A) THE ASSESSEE ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 21 REPEATEDLY AND CATEGORICALLY ASSERTED THAT THE ALLE GED FOREIGN BANK ACCOUNT DID NOT BELONG TO THE ASSESSEE; (B) NO NE OF THE DEPOSITS, AS ALLEGED, RELATED TO THE ASSESSEE; AND (C) NO TRANSACTION WAS MADE BY THE ASSESSEE, AND THEREFORE , THE QUESTION OF MAKING ANY ADDITION IN THE HANDS OF THE ASSESSEE COULD NOT AT ALL ARISE. HE SUBMITTED THAT THE ASSES SING OFFICER ERRED IN LAW IN DRAWING ADVERSE INFERENCE AGAINST T HE ASSESSEE MERELY ON THE BASIS OF GENERAL PARTICULARS OF THE A SSESSEE (WHICH ARE AVAILABLE IN PUBLIC DOMAIN) APPEARING IN SOME U NSIGNED/ UNDATED/ UNAUTHENTICATED LOOSE PIECES OF PAPERS, MO RE SO WHEN THE ASSESSING OFFICER HAD CATEGORICALLY ADMITTED IN PARA 10 OF THE IMPUGNED ORDER THAT AUTHENTIC INFORMATION/COMMUNIC ATION REGARDING THE ALLEGED FOREIGN BANK ACCOUNT WAS STIL L AWAITED FROM THE SWISS AUTHORITIES. HE STATED THAT EVEN IN THE S TATEMENT OF THE ASSESSEE RECORDED BY THE ASSESSING OFFICER ON 11.12 .2014 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE CATEGORICALLY ASSERTED THAT THE ASSESSEE DID NOT OWN ANY BANK ACC OUNT IN HSBC, GENEVA, SWITZERLAND AND CATEGORICALLY DENIED HAVING ANY CONNECTION WITH THE ALLEGED BANK ACCOUNT. HE THUS S UBMITTED THAT THE ASSESSEE HAS TIME AND AGAIN ASSERTED THAT THE ASSESSEE DOES NOT HAVE ANY BANK ACCOUNT IN HSBC BANK, GENEVA , ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 22 SWITZERLAND AND ALSO STATED THAT THE PAPER DOES NOT APPEAR TO BE PERTAINING TO ANY BANK AS NAME OF THE BANK DOES NO T APPEAR IN THIS DOCUMENT. THE ASSESSEE ALSO CLARIFIED THAT TH E ASSESSEE HAS NEITHER OPENED NOR AUTHORIZED ANYONE TO OPEN ANY BA NK ACCOUNT IN HSBC BANK, GENEVA AND THAT THE ASSESSEE HAD NOTH ING TO DO WITH THE UNSIGNED/ UNAUTHENTICATED PIECES OF PAPER. ON THE NON- FURNISHING OF THE CONSENT/DECLARATION FORM, HE SUBM ITTED THAT THE ASSESSEE HAD REPEATEDLY AND CATEGORICALLY ASSER TED THAT SINCE THE ALLEGED ACCOUNT IN HSBC, GENEVA, SWITZERLAND DI D NOT BELONG/ PERTAIN TO HIM, THE ASSESSEE WAS NOT AT ALL COMPETENT TO SIGN ANY FORM/ DECLARATION IN RELATION TO THE SAME. HE THEN TOOK US THROUGH ASSESSMENT ORDER AND GAVE A PARA-WISE RE BUTTAL OF THE ASSESSMENT ORDER. 3.7 THE LD. COUNSEL STATED THAT THE ADDITION MADE BY THE ASSESSING OFFICER UNDER SECTION 69 OF THE ACT, MERE LY ON THE BASIS OF PRESUMPTION THAT THE ASSESSEE MAINTAINED AN ACCO UNT WITH HSBC BANK, GENEVA IS LEGALLY UNSUSTAINABLE. HE SUBM ITTED THAT THE LOOSE EXTRACT OF PAPER RELIED UPON BY THE ASSES SING OFFICER (ANALYZED SUPRA) ONLY CONTAINS NAME OF THE ASSESSEE , HIS DATE OF BIRTH AND THERE ARE SOME OTHER PARTICULARS LIKE SOM E DATE OF CREATION, PER ID, ETC. INSOFAR AS NAME, DATE OF BI RTH AND ADDRESS ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 23 IS CONCERNED, THE ASSESSEE IS A WELL-KNOWN INDUSTRI ALIST AND HIS PARTICULARS LIKE NAME, ADDRESS AND DATE OF BIRTH AR E AVAILABLE IN THE PUBLIC DOMAIN AND THERE IS NO REASON TO DRAW AN Y ADVERSE INFERENCE SIMPLY BECAUSE SUCH PARTICULARS APPEAR ON SOME UNSIGNED/ UNDATED/ UNAUTHENTICATED PIECE OF PAPER. IT WAS FURTHER SUBMITTED THAT MERELY ON ACCOUNT OF THE SAI D PARTICULARS APPEARING ON THE UNSIGNED/ UNDATED/ UNAUTHENTICATED PIECE OF PAPER, IT CANNOT BE INFERRED/ ASSUMED THAT THE DOCU MENTS PERTAIN/ BELONG TO ASSESSEE. FURTHERMORE, IT IS EMP HATICALLY REITERATED THAT EVEN IN THE STATEMENT RECORDED ON 1 1.12.2014, THE ASSESSEE CLARIFIED THAT HE IS NOT AWARE AS TO HOW H IS PARTICULARS APPEARED ON THE UNSIGNED/ UNDATED/ UNAUTHENTICATED PIECE OF PAPER. HE FURTHER SUBMITTED THAT IT IS TRITE LAW TH AT IF AN ITEM OF INCOME, NOT ADMITTED BY AN ASSESSEE, IS TO BE ASSES SED IN THE HANDS OF THE ASSESSEE, THE BURDEN TO ESTABLISH THAT SUCH INCOME IS CHARGEABLE TO TAX IS ON THE ASSESSING OFFICER. H E SUBMITTED THAT WITH A VIEW TO ASSIST THE ASSESSING OFFICER AND TO REDUCE THE RIGOURS OF THE BURDEN THAT LAY UPON THE ASSESSING O FFICER, PROVISIONS OF SECTIONS 68, 69, 69A TO 69D OF THE IT ACT HAVE PROVIDED FOR CERTAIN DEEMING PROVISIONS, WHERE AN A SSUMPTION OF TAXABLE INCOME IN THE HANDS OF THE ASSESSEE IS RAIS ED IN THE ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 24 ABSENCE OF SATISFACTORY EXPLANATION FROM THE ASSESS EE. AS THESE ARE DEEMING PROVISIONS, THE CONDITIONS PRECEDENT FO R INVOKING SUCH PROVISIONS, ARE REQUIRED TO BE STRICTLY CONSTR UED. THE FACTS AND CIRCUMSTANCES GIVING RISE TO THE PRESUMPTION HA VE TO BE ESTABLISHED WITH REASONABLE CERTAINTY. THE ASSESSIN G OFFICER, IT WAS ARGUED, CANNOT FIRST MAKE CERTAIN ASSUMPTION AN D THEREAFTER APPLY THE DEEMING PROVISIONS BASED ON SUCH ASSUMPTI ON. RELYING UPON VARIOUS JUDICIAL PRECEDENTS, HE SUBMITTED THAT TO INVOKE THE DEEMING FICTION CONTAINED IN SECTIONS 69/ 69A/ 69C OF THE IT ACT, THE CONDITION PRECEDENT IS THAT THE ASSESSEE SHOULD BE FOUND TO HAVE ACTUALLY MADE INVESTMENT/ INCURRED EXPENDITURE BY WAY OF POSITIVE EVIDENCE. UNLESS SUCH CONDITION IS FOUND T O EXIST, THE ASSESSING OFFICER IS NOT PERMITTED TO INVOKE THE LE GAL FICTION OF SECTIONS 69A/ 69C TO MAKE ANY ADDITION IN THE HANDS OF THE ASSESSE. 3.8 THE LD. COUNSEL SUBMITTED THAT IN THE PRESENT CASE, THE ASSESSING OFFICER HAS PROCEEDED TO MAKE ADDITIO N UNDER SECTION 69 MERELY ON THE PRESUMPTION THAT THE ASSES SEE HELD AN ACCOUNT WITH HSBC BANK, GENEVA. IN SO CONCLUDING, T HE ASSESSING OFFICER HAS NOT PLACED ON RECORD ANY INDE PENDENT EVIDENCE GATHERED DURING THE COURSE OF SEARCH/ASSES SMENT TO ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 25 EITHER ESTABLISH THE ASSESSEES OWNERSHIP OF THE AL LEGED BANK ACCOUNT OR THE DEPOSITS MADE THEREIN. HE ALTERNATIV ELY SUBMITTED THAT IN THE INSTANT CASE, THE ALLEGATION OF THE ASS ESSING OFFICER IS THAT THE ASSESSEE MAINTAINED A FOREIGN BANK ACCOUNT , WHICH REPRESENTS NOTHING BUT MONEY IN THE FORM OF A DEP OSIT AND THEREBY ADDITION IF AT ALL, COULD HAVE BEEN MADE UN DER SECTION 69A AS AGAINST SECTION 69 OF THE ACT. HE VEHEMENTLY CONTESTED THE DOUBLE ADDITION MADE IN ASSESSMENT YEARS 2006-0 7 AND 2007-08. HE STATED THAT EVEN AS PER THE LOOSE UNAU THENTICATED PIECES OF PAPER, THE DATE OF CREATION OF THE PROFIL E IN ALLEGED BANK ACCOUNT IS REFLECTED AS 09.01.2001 AND ANOTHER DATE OF CREATION IS MENTIONED AS 30.01.2001 AND FURTHER, THE AMOUNT OF UD$ 11,02,829 IS ONLY REFLECTED AS CARRY FORWARD BALAN CE AND IS NOT A FRESH DEPOSIT THAT HAD BEEN MADE IN THE YEAR UNDER CONSIDERATION. THUS, THE QUESTION OF MAKING ADDITIO N OF SUCH ACCOUNT IN ASSESSMENT YEARS 2006-07 AND 2007-08, TH E YEARS UNDER CONSIDERATION, IN THE ABSENCE OF ANY EVIDENCE TO PROVE THE YEAR OF SUCH DEPOSIT/REMITTANCE, DOES NOT ARISE AT ALL. HE RELIED UPON THE FOLLOWING DECISIONS: - P. SOMAN: 196 TAXMAN 335 (KER) - CIT V. PREMLAL: 330 ITR 499 (P&H) ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 26 - SHANKAR R. MHATRE VS. ACIT: 117 ITD 241 (MUM) - ITO VS. GHANSHYAMDASHASSANAND: 28 TAXMAN 219 - MASOOMKHANSHABBIRKHAN PATHAN VS. DCIT: 7 ITR (T) 443 (MUM) 3.9 IN THE ALTERNATIVE, AND WITHOUT PREJUDICE TO T HE AFORESAID CONTENTIONS, THE LD. COUNSEL SUBMITTED TH AT SINCE THE DOUBLE ADDITION MADE SHOULD BE DIRECTED TO BE DELET ED. HE SUBMITTED THAT IT IS TRITE LAW THAT DOUBLE ADDITION OF THE VERY SAME AMOUNT IN TWO DIFFERENT ASSESSMENT YEARS IS NO T AT ALL PERMISSIBLE IN LAW AND IN CASE THE ASSESSEE OFFERS A PARTICULAR AMOUNT IN ONE ASSESSMENT YEAR AND THE ASSESSING OFF ICER SEEKS TO TAX THE VERY SAME AMOUNT IN A DIFFERENT ASSESSMENT YEAR(S), THEN, THE ASSESSING OFFICER IS DUTY BOUND, AS A NECESSARY CONSEQUENCE, TO EXCLUDE THE AMOUNT OFFERED FOR TAX IN THE FORMER ASSESSMENT YEAR; OTHERWISE THE SAME WOULD RESULT IN DOUBLE TAX ATION, CONTRARY TO LAW. IN THE CONTEXT, HE RELIED UPON DEC ISION OF THE SUPREME COURT IN THE CASE OF BACHUL LAL KAPOOR: 60 ITR 74 (SC) AND LAXMIPAT SINGHANIA VS. CIT: 72 ITR 291 (SC) AND THE DELHI HIGH COURT IN THE CASE OF ACIT VS. PRECISION METAL WORK: 156 ITR 693 (DEL). ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 27 4.0 ON THE OTHER HAND, THE LD. CIT-DR VEHEMENTLY OPPOSED THE AFORESAID CONTENTIONS OF THE ASSESSEE. THE LEARNED CIT-DR CONTENDED THAT THERE IS NO ERROR IN THE ORDE R OF THE ASSESSING OFFICER MAKING ADDITION ON ACCOUNT OF THE AMOUNT DEPOSITED IN HSBC BANK ACCOUNT/GENEVA IN ASSESSMENT YEAR 2006-07 AND ASSESSMENT YEAR 2007-08. IT WAS CONTEND ED THAT THE ASSESSEE HAD IN HIS STATEMENT RECORDED UNDER SE CTION 132(4) OF THE INCOME TAX ACT OFFERED THE SAID AMOUNT FOR T AXATION AND OFFERED THE SAID AMOUNT SUBSEQUENTLY IN THE RETURN OF INCOME FILED FOR THE ASSESSMENT YEAR 2012-13. IT WAS SUBMI TTED BY THE LEARNED CIT-DR THAT THE PROVISIONS OF SECTIONS 153A , 153B AND 153C OF THE INCOME TAX ACT, WHICH HAVE BEEN INTRODU CED WITH EFFECT FROM 01.06.2003 IS DIFFERENT FROM THE EARLIE R SCHEME OF ASSESSMENT OF UNCLOSED INCOME UNDER CHAPTER XIV-B O F THE INCOME TAX ACT. IT WAS CONTENDED THAT THERE IS NO R EQUIREMENT THAT THE ADDITION IN THE ASSESSMENTS UNDER SECTIONS 153A AND 153C MUST BE RESTRICTED TO INCRIMINATING MATERIAL F OUND DURING THE COURSE OF SEARCH. IT WAS SUBMITTED THAT THE PRO VISIONS OF SECTION 153A OF THE IT ACT MAKES NO REFERENCE TO UN DISCLOSED INCOME AS WAS MENTIONED IN THE EARLIER CHAPTER XIV- B RELATING TO ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 28 BLOCK ASSESSMENT. IN SUPPORT OF HIS CONTENTION, THE LEARNED CIT- DR RELIED UPON THE FOLLOWING DECISIONS:- 1. GOPAL LAL BHADRUKA VS. DCIT 27 TAXMANN.COM 167 (AP) 2. MADUGULAVENU VS. DIT 29 TAXMANN.COM 200 (DEL) 3. CIT VS. CHETAN DAS LACHMAN DAS [2012] 25 TAXMANN.CO M 227 (DEL) 4. FILATEX INDIA LTD. 49 TAXMANN.COM 465 (DEL) 5. RAJ KUMAR ARORA, 52 TAXMANN.COM 172 (ALL) 4.1 THE LEARNED CIT-DR FURTHER CONTENDED THAT THOU GH THE AFORESAID DECISIONS OF THE DELHI HIGH COURT IN THE CASE OF ANIL KUMAR BHATIA (SUPRA), CHETAN DAS LACHMAN DAS (SUPRA ) AND FILATEX INDIA LTD (SUPRA) WERE REFERRED TO AND RELI ED UPON BEFORE THE DELHI HIGH COURT IN THE CASE OF KABUL CHAWLA (S UPRA), HOWEVER, THE HIGH COURT APPARENTLY REVERSED ITS EAR LIER DECISION AND HELD THAT THE ADDITION MUST BE RESTRICTED TO IN CRIMINATING MATERIAL. IN SUPPLEMENTARY WRITTEN SUBMISSIONS, THE LEARNED CIT-DR ALSO RELIED UPON THE DECISION OF THE KERALA HIGH COURT IN THE CASE OF DR. A.V. SREEKUMAR V. CIT [2018] 90 TAX MANN.COM 355 (KERALA), WHEREIN THE KERALA HIGH COURT, AFTER CONSIDERING THE DECISION OF THE DELHI HIGH COURT IN THE CASE OF KABUL CHAWLA, UPHELD THE ADDITION MADE IN THE ASSESSMENT COMPLETE D UNDER ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 29 SECTION 153A ON THE BASIS OF THE MATERIAL ALREADY A VAILABLE WITH THE DEPARTMENT IN THE FORM OF TAX REVISION PETITION . RELYING ON THE SAID DECISIONS, THE LEARNED CIT-DR SUBMITTED THAT T HERE IS NO ERROR IN THE ORDER PASSED BY THE ASSESSING OFFICER MAKING ADDITION IN RESPECT OF THE AMOUNT FOUND DEPOSITED I N THE HSBC ACCOUNT/GENEVA IN ASSESSMENT YEAR 2006-07 AND ASSES SMENT YEAR 2007-08. 4.2 ON MERITS, THE LD. CIT-DR PLACED HEAVY RELIANC E UPON THE ASSESSMENT ORDER AND THE ORDER OF THE LD. CIT ( A). HE FURTHER RELIED UPON THE DECISION OF THE COORDINATE BENCH IN THE CASE OF PARAG DALMIA IN ITA NO.5499/ DEL/ 2017 DATED 26.02. 2018 TO CONTEND THAT IN THE WORST SCENARIO THE ASSESSMENT M AY BE SET ASIDE TO THE FILE OF THE ASSESSING OFFICER AND THE ADDITION MADE SHOULD NOT BE DELETED. 5.0 WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISS IONS AND HAVE GONE THROUGH THE RECORDS. WE FIRST DEEM IT APPROPRIATE TO ADJUDICATE GROUNDS OF APPEAL NOS. 2 TO 2.3 WHERE BY THE ASSESSEE HAS CHALLENGED THE ADDITION OF RS. 4,90,20 ,749/- MADE BY THE ASSESSING OFFICER UNDER SECTION 69 OF THE AC T EQUIVALENT TO US $11,02,829. ON CAREFUL PERUSAL OF THE RECORDS, I T IS NOTICED THAT THE ADDITION HAS BEEN MADE ON THE BASIS OF DOC UMENTS ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 30 WHICH WERE AVAILABLE WITH THE REVENUE AND WERE STAT ED TO HAVE BEEN RECEIVED UNDER DTAA ENTERED INTO BY INDIA WITH OTHER COUNTRIES AND CONFRONTED TO THE ASSESSEE AT THE TIM E OF SEARCH. THE SAID DOCUMENTS, CONSISTING OF THREE PAGES, WHIC H WERE IN FOREIGN LANGUAGE ALONG WITH ITS ENGLISH TRANSLATION HAVE BEEN REPRODUCED IN THE ASSESSMENT ORDER AND COPIES THERE OF HAVE BEEN PLACED BY THE ASSESSEE IN THE PAPER BOOK. THE DOCUM ENTS ARE APPARENTLY UNDATED AND UNSIGNED AND DO NOT EVEN CON TAIN REFERENCE TO ANY BANK. IT IS, HOWEVER, THE CASE OF THE REVENUE THAT THE SAID DOCUMENTS PERTAIN THE FOREIGN BANK AC COUNT OF THE ASSESSEE WITH HSBC, GENEVA. ON THE OTHER HAND, THE ASSESSEE CHALLENGED THE AUTHENTICITY OF THE AFORESAID DOCUME NTS AND VEHEMENTLY CONTENDS THAT INDEPENDENT OF THE OFFER M ADE IN THE RETURN, NO ADDITION CAN BE MADE ON THE BASIS OF THE SAID DOCUMENTS. 5.1 IMPORTANTLY, THE ASSESSEE, WHILE DENYING OWNER SHIP OF ANY FOREIGN BANK ACCOUNT, IN HIS INCOME TAX RETURN FOR ASSESSMENT YEAR 2012-13 OFFERED FOR TAX RS. 5,81,32 ,321/- AS AMOUNT EQUIVALENT TO US $11,46,368. ON THE OTHER HA ND, THE ASSESSING OFFICER, APART FROM ACCEPTING THE SAID OF FER IN ASSESSMENT YEAR 2012-13, HAS ALSO BROUGHT TO TAX US $ ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 31 11,02,829 AND US$ 43,539 IN ASSESSMENT YEARS 2006-0 7 AND 2007-08 RESPECTIVELY. IN FACT, BY APPLYING CONVERSI ON RATE OF RS.44.45 PER DOLLAR AND RS.43.17 PER DOLLAR IN ASS ESSMENT YEARS 2006-07 AND 2007-08, THE ASSESSING OFFICER TAXED RS .4,90,20,749 AND RS.18,79,578 IN THE SAID ASSESSMENT YEARS, AGGR EGATING TO RS.5,09,00,327, WHICH IS LESS THAN RS.5,81,32,321 O FFERED FOR TAX BY THE ASSESSEE IN ASSESSMENT YEAR 2012-13. THERE C AN BE NO DISPUTE WITH THE SETTLED LEGAL POSITION THAT THE VE RY SAME AMOUNT CANNOT BE TAXED TWICE IN TWO DIFFERENT ASSESSMENT Y EARS, WHICH CONTENTION HAS ALSO BEEN ACCEPTED BY THE LD. CIT (A ). THEREFORE, THE VERY SAME AMOUNT EQUIVALENT TO US $11,46,368 CA NNOT, IN OUR VIEW, BE TAXED TWICE, ONCE IN ASSESSMENT YEARS 2006-07 AND 2007-08 AND SECONDLY IN ASSESSMENT YEAR 2012-13. 5.2 NOW THE PRIMARY QUESTION WHICH ARISES FOR CONSIDERATION BEFORE US IS IN WHICH YEAR THE AMOUNT EQUIVALENT TO US $11,46,368 SHOULD BE SUBJECTED TO TAX, CONSIDERI NG THAT THE ASSESSEE HAS OFFERED THE AMOUNT FOR TAXATION IN ASS ESSMENT YEAR 2012-13 AND CONTESTED THE TAXABILITY WHEN THE ASSES SING OFFICER SOUGHT TO TAX THE SAID AMOUNT (AS CONVERTED IN INR) IN ASSESSMENT YEARS 2006-07 AND 2007-08. IT IS NOTICED THAT IN ASSESSMENT YEARS 2006-07, THE ASSESSING OFFICER HAS MADE THE ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 32 ADDITION UNDER SECTION 69 OF THE ACT, WHICH IS REPR ODUCED AS UNDER: 69. UNEXPLAINED INVESTMENTS WHERE IN THE FINANCIAL YEAR IMMEDIATELY PRECEDING THE ASSESSMENT YEAR THE ASSESSEE HAS MADE INVESTMENTS W HICH ARE NOT RECORDED IN THE BOOKS OF ACCOUNT, IF ANY, MAINT AINED BY HIM FOR ANY SOURCE OF INCOME, AND THE ASSESSEE OFFERS N O EXPLANATION ABOUT THE NATURE AND SOURCE OF THE INVESTMENTS OR T HE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION O F THE ASSESSING OFFICER, SATISFACTORY, THE VALUE OF THE INVESTMENTS MAY BE DEEMED TO BE THE INCOME OF THE ASSESSEE OF SUCH FIN ANCIAL YEAR. 5.3 AS PER THE AFORESAID PROVISIONS OF SECTION 69, WHERE THE ASSESSEE IS FOUND TO HAVE MADE ANY INVESTMENT NOT R ECORDED IN THE BOOKS OF ACCOUNT IN ANY FINANCIAL YEAR AND THE ASSESSEE IS NOT ABLE TO EXPLAIN ITS SOURCE TO THE SATISFACTION OF T HE ASSESSING OFFICER, THEN, THE VALUE OF THE INVESTMENTS IS DEEM ED TO BE UNEXPLAINED INCOME OF THE ASSESSEE IN FINANCIAL YEA R IN WHICH INVESTMENTS WERE MADE. THEREFORE, FOR SECTION 69 OF THE ACT TO BE APPLIED, THE UNDISCLOSED INVESTMENT MUST BE FOUND T O BE RELATING TO ANY PARTICULAR YEAR AND IN THAT YEAR, IN THE ABS ENCE OF ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 33 SATISFACTORY EXPLANATION OF THE ASSESSEE VALUE OF I NVESTMENTS IS SUBJECTED TO TAX. 5.4 ON THE OTHER HAND, SECTION 69A OF THE I.T. ACT PROVIDES AS UNDER: UNEXPLAINED MONEY, ETC. 69A. WHERE IN ANY FINANCIAL YEAR THE ASSESSEE IS FOUND T O BE THE OWNER OF ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE AND SUCH MONEY, BULLION, JEWELLERY OR VALUA BLE ARTICLE IS NOT RECORDED IN THE BOOKS OF ACCOUNT, IF ANY, MA INTAINED BY HIM FOR ANY SOURCE OF INCOME, AND THE ASSESSEE OFFE RS NO EXPLANATION ABOUT THE NATURE AND SOURCE OF ACQUISIT ION OF THE MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE , OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION O F THE ASSESSING OFFICER, SATISFACTORY, THE MONEY AND THE VALUE OF THE BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE MA Y BE DEEMED TO BE THE INCOME OF THE ASSESSEE FOR SUCH FINANCIAL YEAR. 5.5 THE AFORESAID SECTION PROVIDES THAT WHERE ANY MONEY, VALUE OF BULLION, JEWELLERY OR OTHER VALUABLE ARTIC LE IS FOUND IN THE OWNERSHIP OF THE ASSESSEE WHICH IS NOT RECORDED IN THE BOOKS OF ACCOUNT MAINTAINED BY HIM, THE SAME WILL BE TREATED AS HIS INCOME FOR THE FINANCIAL YEAR IN WHICH HE IS FOUND TO BE ITS OWNER. IN TERMS OF THE SAID SECTION, ALL WHAT IS REQUIRED TO BE PROVED IS ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 34 THAT THE ASSESSEE IS OWNER OF MONEY OR VALUABLE ART ICLE AND IT HAS NOT BEEN RECORDED IN THE BOOKS OF ACCOUNT AND IN TH AT CASE, THE AMOUNT IS DEEMED TO BE THE INCOME OF THAT FINANCIAL YEAR IN WHICH HE IS FOUND TO BE ITS OWNER. THE SAID SECTION , THUS, COVERS A SITUATION WHERE THE ASSESSEE IS, IN ANY PARTICULA R YEAR, FOUND TO BE OWNER OF ANY UNDISCLOSED ASSET, BUT THE YEAR IN WHICH SUCH ASSET IS ACQUIRED IS NOT KNOWN AND BY LEGAL FICTION , THE VALUE OF SUCH UNDISCLOSED ASSET IS BROUGHT TO TAX IN THE YEA R IN WHICH THE ASSESSEE IS FOUND TO ITS OWNER. THE CONTENTION OF T HE CIT(A) THAT THE SAID SECTION ONLY COVERS PHYSICAL ASSET IS, IN OUR VIEW, TOO NARROW INTERPRETATION OF THE SAID SECTION SINCE IN THAT CASE, IF THE ASSESSEE IS FOUND TO HAVE MADE SOME INVESTMENT AND THE YEAR OF INVESTMENT IS NOT KNOWN, THEN, THE SAID INVESTMENT CANNOT BE TAXED AT ALL, NOT EVEN IN THE YEAR IN WHICH THE ASS ESSEE IS FOUND TO BE ITS OWNER. 5.6 IN THE PRESENT CASE, ON PERUSAL OF THE PAPERS RELIED UPON BY THE ASSESSING OFFICER, IT IS SEEN THAT THER E IS REFERENCE TO VARIOUS DATES. THERE IS NO SPECIFIC DATE WHEREFROM THE DATE OF INVESTMENT IN THE SO-CALLED BANK ACCOUNT CAN BE DET ERMINED. AS PER THE ENGLISH TRANSLATION, THE DATE OF CREATION O F THE PROFILE OF THE SO-CALLED BANK ACCOUNT IS REFLECTED AS 09.01.20 01 AND ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 35 ANOTHER DATE OF CREATION IS MENTIONED AS 30.01.2001 AND BOTH THE DATES ARE MUCH PRIOR TO ASSESSMENT YEAR 2006-07 , THE YEAR UNDER CONSIDERATION. MOREOVER, IT IS NOTICED THAT T HE AMOUNTS REFLECTED BALANCES CARRIED FORWARD FROM EARLIER PER IOD AND THERE IS NO REFERENCE TO ANY DEPOSITION BEING MADE IN THE SA ID BANK ACCOUNT WHICH COULD BE RELATED TO ANY OF THE ASSESS MENT YEARS 2006-07 OR 2007-08. OF COURSE, THERE IS REFERENCE T O CERTAIN BALANCES FOR THE PERIOD NOVEMBER, 2005 TO FEBRUARY, 2007, WHICH HAS BEEN RELIED UPON BY THE ASSESSING OFFICER, BUT IT IS NOTICED THAT THE SAID BALANCES ARE MERELY BALANCES AND NOT ANY DEPOSITS. IN THIS CONTEXT, THE LD. SENIOR COUNSEL VEHEMENTLY CONTENDED THAT IF ONE WERE TO STRICTLY CONSTRUE THE DOCUMENT A S IT IS, THEN, NO ADDITION COULD HAVE BEEN MADE IN ANY OF THE ASSE SSMENT YEARS UNDER CONSIDERATION SINCE AS PER THE DOCUMENT THE A CCOUNT WAS CREATED MUCH EARLIER AND THERE IS NO EVIDENCE OF DE POSITION OF ANY AMOUNT IN ANY OF THE ASSESSMENT YEAS BEGINNING WITH ASSESSMENT YEAR 2006-07. IT WAS CONTENDED THAT THE ASSESSEE MERELY OFFERED THE AMOUNT TO TAX IN ASSESSMENT YEAR 2012-13 TO AVOID LITIGATION AND IF AT ALL THE SAID AMOUNT COUL D ONLY BEEN TAXED IN THE SAID YEAR, BEING THE YEAR OF SEARCH, A S PER THE PROVISIONS OF SECTION 69A OF THE ACT. ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 36 5.7 ON THOROUGH AND SERIOUS CONSIDERATION, WE FIND SUBSTANTIAL MERIT IN THE AFORESAID CONTENTION OF TH E LD. SR. COUNSEL THAT IF AT ALL THE AMOUNT ON THE BASIS OF T HE PAPERS RELIED UPON COULD ONLY BE TAXED IN YEAR OF SEARCH, WHEN TH E SAID PAPERS WERE, FOR THE FIRST TIME, CONFRONTED TO THE ASSESSE E. THIS IS FOR THE REASON THAT THE PAPER NOWHERE SHOWS ANY AMOUNT BEIN G DEPOSITED IN ANY OF THE ASSESSMENT YEARS BEGINNING WITH ASSESSMENT YEAR 2006-07. THEREFORE, NEITHER IN ASSE SSMENT YEAR 2006-07 NOR IN ASSESSMENT YEAR 2007-08, THE TWO YEA RS IN WHICH ADDITIONS HAVE BEEN MADE BY THE ASSESSING OFFICER, THE ASSESSEE COULD BE REGARDED AS HAVING MADE ANY INVESTMENT AND THEREFORE, THE PROVISIONS OF SECTION 69 OF THE I.T. ACT CANNOT , IN OUR VIEW, BE APPLIED IN THOSE ASSESSMENT YEARS. FURTHER, THE DOC UMENTS RELIED UPON ACTUALLY REFER TO CREATION OF ACCOUNT IN EARLI ER ASSESSMENT YEAR, MUCH PRIOR TO ASSESSMENT YEAR 2006-07. 5.8 FURTHERMORE, ASSESSMENTS FOR ASSESSMENT YEARS 2006- 07 AND 2007-08 WERE UNDISPUTEDLY MADE UNDER SECTION 153A OF THE ACT IN RESPECT OF NON-ABATED ASSESSMENTS. IN RE SPECT OF NON- ABATED ASSESSMENTS, THE LAW LAID DOWN IN CIT VS. SI NGHAD TECHNICAL EDUCATION SOCIETY: 397 ITR 344 (SC) AND P CIT VS. MEETAGUTGUTIA: 395 ITR 526 (DEL), CIT VS. KABUL CHA WLA: 234 ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 37 TAXMAN 300 (DEL) AND OTHER DECISIONS OF THE JURISDI CTIONAL HIGH COURT IS THAT THE ADDITION SHOULD BE MADE ON THE BA SIS OF ANY INCRIMINATING DOCUMENT FOUND DURING THE COURSE OF S EARCH. IN MEETAGUTGUTIA (SUPRA), THE HIGH COURT FURTHER HELD THAT STATEMENT RECORDED CANNOT BE REGARDED AS INCRIMINAT ING MATERIAL FOUND DURING SEARCH AND CANNOT INDEPENDENTLY BE THE BASIS FOR MAKING ANY ADDITION. IN THE PRESENT CASE, THERE IS NO DISPUTE THAT THE PAPERS RELIED UPON BY THE ASSESSING OFFICER WER E NOT FOUND DURING THE COURSE OF SEARCH AT THE RESIDENTIAL PREM ISES OF THE ASSESSEE AND THEREFORE, STRICTLY SPEAKING, THE SAID PAPERS CANNOT BE THE BASIS FOR MAKING ANY ADDITION IN ASSESSMENT YEARS 2006- 07 AND 2007-08. IN FACT, IN IDENTICAL CIRCUMSTANCES , COORDINATE BENCHES OF THE TRIBUNAL IN THE CASE OF ANURAG DALMI A VS. DCIT: ITA 5395 OF 2017, BISHWANATHGARODIA VS. DCIT: 76 TA XMANN.COM 81 (KOL. TRIB) AND YAMINI AGARWAL VS. DCIT: 83 TAXM ANN.COM 209 (KOL. TRIB), RELIED UPON BY THE ASSESSEE, DELETED S IMILAR ADDITION MADE IN ASSESSMENT COMPLETED SECTION 153A R.W.S. 14 3(3) OF THE ACT. 5.9 ON THE OTHER HAND, THE ASSESSEE OFFERED FOR TA X RS.5,81,32,321/- AS AMOUNT EQUIVALENT TO US $11,46, 368 IN ASSESSMENT YEAR 2012-13 UNDER SECTION 69A OF THE AC T, WHICH ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 38 AMOUNT, AS NOTICED ABOVE, IS MORE THAN RS. 5,09,00, 327/- BROUGHT TO TAX CUMULATIVELY BY THE ASSESSING OFFICE R IN ASSESSMENT YEARS 2006-07 AND 2007-08.IN VIEW THEREO F AND THE ENTIRETY OF CIRCUMSTANCES DISCUSSED IN THE PRECEDIN G PARAGRAPHS, WE ARE OF THE CONSIDERED OPINION THAT THE ADDITION OF RS.4,90,20,749 MADE BY THE ASSESSING OFFICER OFFICE R EQUIVALENT TO US $ 11,02,829 IN ASSESSMENT YEAR 2006-07 UNDER SEC TION 69 OF THE ACT AND SIMILAR ADDITION MADE IN ASSESSMENT YEA R 2007-08, ARE NOT SUSTAINABLE IN LAW AND THE SAME ARE HEREBY DIRECTED TO BE DELETED. WE THEREFORE, HOLD THAT THE ADDITION OF RS .4,90,20,749 IN ASSESSMENT YEAR 2006-07 AND SIMILAR ADDITION OF RS. 18,79,578 IN ASSESSMENT YEAR 2007-08 ARE NOT SUSTAINABLE IN LAW AND ARE HEREBY DIRECTED TO BE DELETED. AS A CONSEQUENCE THE AMOUNT OFFERED FOR TAX BY THE ASSESSEE IN ASSESSMENT YEAR 2012-13, BEING RS.5,81,32,321, WHICH WAS SUSTAINED BY THE LD. CIT( A) ON PROTECTIVE BASIS, IS HEREBY DIRECTED TO BE RESTORED ON SUBSTANTIVE BASIS IN ASSESSMENT YEAR 2012-13.IN THE RESULT, THE GROUNDS OF APPEAL NOS. 2 TO 2.3 RAISED BY THE ASSESSEE IN ASSE SSMENT YEAR 2006-07 ARE ALLOWED. 5.10 FURTHER, IN VIEW OF THE ADDITION MADE BY THE ASSESSING OFFICER HAVING BEEN DELETED ON MERITS, GROUNDS OF A PPEAL NOS. 1 TO ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 39 1.2 CHALLENGING THE VALIDITY OF THE ASSESSMENT ORDE R ARE MERELY RENDERED ACADEMIC IN NATURE AND THE SAME ARE HEREBY DISMISSED AS IN FRUCTUOUS. 5.11 IN GROUND OF APPEAL NO.3, THE ASSESSEE HAS CH ALLENGED THE LEVY OF INTEREST UNDER SECTION 234B OF THE I.T. ACT, WHICH IS MERELY CONSEQUENTIAL IN NATURE. ITA NO. 2893/ DEL /2017 BY ASSESSEE FOR A.Y. 2007-0 8 ITA NO. 3951/ DEL /2017 BY REVENUE FOR A.Y. 2007-08 6.0 ALL THE GROUNDS RAISED IN ASSESSEES APPEAL IN ITA NO. 2893/DEL/2017 ARE IDENTICAL TO THE GROUNDS RAISED I N ASSESSMENT YEAR 2006-07 AND OUR DECISION IN THE SAID APPEAL SH ALL APPLY MUTATIS MUTANDIS IN ASSESSMENT YEAR 2007-08. FOR THE REASONS SUBMITTED WHILE DECIDING APPEAL FOR ASSESSMENT YEAR 2006-07, ADDITION OF RS.18,79,578 MADE BY THE ASSESSING OFFI CER IN ASSESSMENT YEAR 2007-08, THE YEAR UNDER CONSIDERATI ON, IS HEREBY DIRECTED TO BE DELETED. ACCORDINGLY, THE GRO UNDS OF APPEAL NOS.2 TO 2.3 RAISED BY THE ASSESSEE IN ASSESSMENT Y EAR 2007-08 ARE ALLOWED. FURTHER, IN VIEW OF THE ADDITION MADE BY THE ASSESSING OFFICER HAVING BEEN DELETED ON MERITS, GR OUNDS OF ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 40 APPEAL NOS. 1 TO 1.2 CHALLENGING THE VALIDITY OF TH E ASSESSMENT ORDER ARE MERELY RENDERED ACADEMIC IN NATURE AND TH E SAME ARE HEREBY DISMISSED AS INFRUCTUOUS. GROUND OF APPEAL N O.3 CHALLENGING THE LEVY OF INTEREST IS MERELY CONSEQUE NTIAL IN NATURE. 6.1 COMING TO REVENUES APPEAL IN ITA NO. 3951/ DEL /2017, THE DEPARTMENT HAS CHALLENGED THAT THE ACTION OF TH E CIT(A) IN DELETING THE ADDITION OF RS.1,64,962/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNDISCLOSED INTEREST INCOME I N HSBC GENEVA. THE FACTS IN RESPECT OF THE SAID ISSUE ARE THAT IN THE ASSESSMENT ORDER PASSED UNDER SECTION 153A R.W.S. 1 43(3) OF THE IT ACT, THE ASSESSING OFFICER, APART FROM THE ADDIT ION ON ACCOUNT OF THE DEPOSITS/ BALANCES APPEARING IN THE ALLEGED FOREIGN BANK ACCOUNT, MADE FURTHER ADDITION OF RS.1,64,962/- (US $ 3,821.22 @ RS.43.17) UNDER SECTION 69 OF THE IT ACT ON ACCOU NT OF INTEREST CALCULATED @ 4% P.A. ON THE ALLEGED BALA NCE APPEARING IN THE UNDISCLOSED FOREIGN BANK ACCOUNT. 6.2 ON APPEAL, THE LD. CIT (A) DELETED THE ADDITIO N MADE BY THE ASSESSING OFFICER HOLDING THAT SINCE NO CORR OBORATIVE EVIDENCE HAS BEEN BROUGHT OUT BY THE ASSESSING OFFI CER TO SUBSTANTIATE THAT THE ASSESSEE HAS ACTUALLY EARNED ANY INTEREST ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 41 INCOME, THEREFORE, THE ADDITION MADE ONLY ON THE BA SIS OF ESTIMATE AND PRESUMPTION IS NOT SUSTAINABLE. 6.3 IN SUPPORT OF THE AFORESAID GROUND, THE LD. CI T-DR/ DEPARTMENTAL REPRESENTATIVE HEAVILY RELIED ON THE O RDER OF THE ASSESSING OFFICER AND CONTENDED THAT THE ADDITION O F RS. 1,64,962/- MADE ON ACCOUNT OF INTEREST SHOULD BE CO NFIRMED AND THE FINDING OF THE CIT(A) TO THIS EXTENT SHOULD BE REVERSED. IN REBUTTAL, THE LD. SENIOR COUNSEL VEHEMENTLY ARGUED THAT THE ADDITION ON ACCOUNT OF NOTIONAL INTEREST HAS BEEN R IGHTLY DELETED BY LD. CIT (A) SINCE THE SAID ADDITION WAS MADE BY THE ASSESSING OFFICER IN THE ABSENCE OF ANY BANK STATEMENT OR ANY OTHER DOCUMENTS, MERELY ON THE BASIS OF PRESUMPTION THAT INTEREST @4% P.A. WOULD HAVE BEEN CREDITED ON THE BALANCE IN THE ACCOUNT, WITHOUT EVEN FIRST ESTABLISHING THE EXISTE NCE OF THE ALLEGED FOREIGN BANK ACCOUNT IN THE PERIOD UNDER CO NSIDERATION. THE LD. COUNSEL CONTENDED THAT UNDER THE SCHEME OF THE ACT, LIABILITY TO PAY TAX IS ATTRACTED AT TWO POINTS OF TIME, VIZ., THE ACCRUAL OF THE INCOME OR ITS RECEIPT, BUT THE SUBST ANCE OF THE MATTER IS INCOME. THUS, IN THE ABSENCE OF ANY INFOR MATION, EVIDENCE OR RECORD, NOTIONAL INTEREST INCOME CANNOT BE ADDED IN THE ASSESSEES HANDS, MERELY ON HYPOTHESIS, ASSUMPT ION, ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 42 CONJECTURES & SURMISES. FOR THE SAID PROPOSITION RE LIANCE WAS PLACED ON THE FOLLOWING DECISIONS, WHEREIN IT HAS B EEN HELD THAT NO ADDITION ON ACCOUNT OF INTEREST CAN BE MADE WHER E NO INTEREST HAS IN FACT BEEN CHARGED BY THE PARTIES WITHIN THE TERMS OF FUNDS/LOAN ADVANCED. CIT VS. GOYAL M.G. GASES (P) LTD.: 303 ITR 159 (DEL .) B & A PLANTATIONS AND INDUSTRIES VS. CIT: 242 ITR 2 2 (GAU.) KESHRICHANDJAISUKHLAL VS. CIT: 248 ITR 47 (GAU.) HIGHWAYS CONSTRUCTION CO. PVT. LTD VS. CIT: 199 ITR 702 (GAU.) JWALA PRASAD RADHA KRISHNA VS. CIT [1992]: 198 ITR 415 (ALL) CIT VS. PUNJAB FINANCIAL CORPN. LTD.: 295 ITR 510 ( P&H HC) CIT VS. SOUTH INDIA CORPN. (AGENCIES) LTD.: 293 ITR 237 (CHENNAI HC) CIT VS. SANGHI FINANCE AND INVESTMENT LTD.: 190 CTR 207 (MP) ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 43 6.4 WE HAVE CONSIDERED RIVAL SUBMISSIONS AND THE DECISIONS RELIED UPON BY BOTH THE PARTIES. WE HAVE ALREADY DELETED THE ADDITION MADE IN ASSESSMENT YEAR 2006-0 7 AND ALSO IN ASSESSMENT YEAR 2007-08, THEREFORE, ON THIS GROU ND ITSELF THE ADDITION MADE BY THE ASSESSING OFFICER IS LIABLE TO BE DELETED. INDEPENDENT THEREOF, WE NOTE THAT IN THE INSTANT CA SE, THE ADDITION OF RS.1,64,962 HAS BEEN MADE PURELY ON NO TIONAL BASIS ON THE PREMISE THAT THE ASSESSEE: (A) HAD ALLEGED F OREIGN BANK ACCOUNT, WHICH ITSELF IS UNDER SERIOUS CHALLENGE; A ND (B) ON SUCH BANK ACCOUNT, ASSESSEE EARNED INTEREST @ 4%. WE ARE OF THE VIEW THAT THE CASE OF THE ASSESSEE IS ON A MUCH BETTER F OOTING VIS--VIS THE FACTS IN JUDICIAL PRECEDENTS RELIED UPON BY THE LD.COUNSEL INASMUCH AS IN THE AFORESAID CASES THERE WAS AT LEA ST SOME BASIS OF TAXATION OF NOTIONAL AMOUNT/ INTEREST, WHICH WAS NEVER REALIZED/ RECEIVED BY THE ASSESSEE, BUT IN THE CASE OF THE ASSESSEE, THE SO-CALLED AMOUNT OF INTEREST BROUGHT TO TAX IS TOTALLY WITHOUT ANY BASIS AND IS CLEARLY HYPOTHETICAL/ IMAG INARY.SINCE THERE IS NO EVIDENCE THAT THE ASSESSEE ACTUALLY REC EIVED INTEREST ON THE DISPUTED DEPOSIT AND JUST BY FIGMENT OF IMAG INATION IT HAS BEEN CONCLUDED THAT THE ASSESSEE EARNED INTEREST ON SUCH DEPOSITS @ 4% P.A., THE IMPUGNED ADDITION ON ACCOUN T OF NOTIONAL ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 44 INTEREST, HAS, EVEN ON MERITS, BEEN RIGHTLY DELETED BY THE CIT(A). FOR THE SAID CUMULATIVE REASONS, THE REVENUES APPE AL ON THIS GROUND STANDS DISMISSED. ITA NOS. 3952 TO 3956/ DEL /2017 BY REVENUE FOR A.Y . 2008-09 TO 2012-13 7.0 THE ABOVE REVENUES APPEALS IN ITA NOS. 3952 T O 3956/ DEL /2017 FOR ASSESSMENT YEARS 2008-09 TO 201 2-13 RAISE IDENTICAL ISSUE OF TAXABILITY OF INTEREST IN VARIOU S YEARS, WHICH WAS DELETED BY THE LD. CIT(A). FOR THE REASONS STATED I N REVENUES APPEAL IN ITA NO.3951/DEL/2017 FOR ASSESSMENT YEAR 2007-08, THE REVENUES APPEAL ARE DISMISSED AND THE ORDER OF THE LD. CIT (A) DELETING THE ADDITION OF NOTIONAL INTEREST IS U PHELD. ITA NO. 2894/ DEL /2017 BY ASSESSEE FOR A.Y. 2012-1 3 8.0 IN GROUND OF APPEAL NO.1, THE ASSESSEE HAS CHA LLENGED THE PROTECTIVE ADDITION OF RS. 5,81,32,321/- (US$ 1 1,46,368) OFFERED TO TAX BY THE ASSESSEE IN THE RETURN OF INC OME AND SUBSTAINED BY THE LD. CIT(A), DESPITE CONFIRMING AD DITION MADE IN RESPECT OF THE ALLEGED BALANCE IN THE FOREIGN BANK ACCOUNT IN ASSESSMENT YEARS 2006-07 & 2007-08.IN VIEW OF OUR D ETAILED ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 45 FINDING IN ASSESSEES APPEAL FOR ASSESSMENT YEAR 20 06-07 IN ITA NO. 2892/ DEL/ 2017, WE HAVE DELETED THE ADDITION O F RS.4,90,20,749 IN ASSESSMENT YEAR 2006-07 AND SIMIL AR ADDITION OF RS.18,79,578 IN ASSESSMENT YEAR 2007-08 AND AS A CONSEQUENCE THEREOF, THE AMOUNT OFFERED FOR TAX BY THE ASSESSEE IN ASSESSMENT YEAR 2012-13, BEING RS.5,81,32,321/- SUSTAINED BY THE LD. CIT (A) ON PROTECTIVE BASIS IS HEREBY DI RECTED TO BE RESTORED ON SUBSTANTIVE BASIS IN ASSESSMENT YEAR 20 12-13. THIS GROUND OF APPEAL BY THE ASSESSEE IS THEREFORE DISMI SSED. 8.1 IN GROUND OF APPEAL NO.2, THE ASSESSEE HASCHAL LENGED THE ORDER OF THE LD. CIT (A) DIRECTING THE ASSESSIN G OFFICER TO CONSIDER INITIATING PENALTY PROCEEDINGS UNDER SECTI ON 271AAA OF THE ACT, IT WOULD BE OPEN TO THE ASSESSEE TO CHALLE NGE THE PENALTY, IF AT ALL LEVIED, IN THE PENALTY PROCEEDINGS, WHICH ARE SEPARATE AND INDEPENDENT AND CONSEQUENTLY, THE GROUND RAISED IN THE PRESENT APPEAL IS HEREBY DISMISSED AS PREMATURE. 8.2 IN GROUND OF APPEAL NOS. 3 TO 3.4, THE ASSESSE E HAS CHALLENGED THE ACTION OF THE ASSESSING OFFICER IN M AKING ADDITION OF RS.1,12,89,646/- ON ACCOUNT OF ALLEGED UNEXPLAIN ED JEWELLERY FOUND DURING THE COURSE OF SEARCH WHICH HAS BEEN CO NFIRMED IN APPEAL BY THE CIT(APPEALS). THE BRIEF FACTS RESULTI NG IN THE ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 46 AFORESAID ADDITION ARE THAT DURING THE COURSE OF SE ARCH AT THE RESIDENTIAL PREMISES OF THE ASSESSEE ON 8/9.11.2011 AND IN CONTINUATION THEREOF ON 20.12.2011, FOLLOWING JEWEL LERY WAS FOUND/ SEIZED: GROSS WEIGHT (GMS.) VALUE (RS.) REMARKS JEWELLERY FOUND 38,748.28 10,19,95,614 VALUE OF JEWELLERY IS AS ON THE DATE OF SEARCH JEWELLERY SEIZED 6,716.70 1,12,89,646 AS PER ANNEXURE TO PANCHNAMA 8.3 ON BEING CONFRONTED, THE WIFE OF THE ASSESSEE, MRS. BINA MODI, IN HER STATEMENT RECORDED ON 20/21.12.20 11 AND ALSO THE ASSESSEE HAD DURING THE COURSE OF ASSESSMENT PR OCEEDINGS VIDE REPLIES DATED 08.12.2014, 29.12.2014 AND 18.02 .2015, EXPLAINED THAT THE JEWELLERY FOUND DURING THE COURS E OF SEARCH PRIMARILY BELONGED TO THE ASSESSEE, HIS WIFE, MRS. BINA MODI, AND HIS DAUGHTER, MRS. CHARU BHARTIA. FURTHER, IT WAS A LSO EXPLAINED THAT THE TOTAL JEWELLERY DECLARED BY THE ASSESSEE A ND HIS WIFE, MRS. BINA MODI, AND THEIR DAUGHTER, MRS. CHARU BHAR TIA, IN THEIR LAST WEALTH TAX RETURN FOR THE ASSESSMENT YEAR 2011 -12 WAS 46,634.842 GMS, WAS MUCH MORE THAN JEWELLERY WEIGHI NG ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 47 38,748.28 GMS FOUND DURING THE COURSE OF SEARCH. TH E DETAILS OF THE JEWELLERY SO DECLARED, IS TABULATED AS UNDER: GROSS WEIGHT (GMS.) VALUE (RS.) SH. K.K. MODI 1,708.650 65,70,041 MRS. BINAMODI 43,886.392 9,30,51,715 MRS. CHARUBHARTIA 1,039.800 62,55,850 TOTAL 46,634.842 10,58,77,606 8.4 IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER , HELD THAT THE ASSESSEE WAS UNABLE TO PROVIDE AN ITEM WIS E RECONCILIATION OF JEWELLERY TO THE EXTENT OF 6,716. 700 GMS [VALUED AT RS.1,12,89,616/- BY THE DEPARTMENTAL VALUER APPL YING THE RATES PREVAILING ON THE DATE OF SEARCH] AND HELD TH E SAME TO BE TAXABLE AS UNDISCLOSED INCOME OF THE ASSESSEE, WHIC H WAS CONFIRMED IN APPEAL BEFORE THE LD. CIT (APPEALS). 8.5 DURING THE COURSE OF HEARING, THE LD. SENIOR C OUNSEL VEHEMENTLY CONTENDED THAT THE ADDITION DESERVES TO BE DELETED IN ENTIRETY AT THE VERY THRESHOLD ITSELF FOR THE SIMPL E REASON THAT THE ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 48 GROSS WEIGHT OF JEWELLERY DECLARED BY THE ASSESSEE, HIS WIFE AND DAUGHTER FAR EXCEEDED THE GROSS WEIGHT OF JEWELLERY FOUND DURING THE COURSE OF SEARCH AND THUS THERE COULD BE NO ALL EGATION ANY UNDISCLOSED INCOME. IN SUPPORT OF THE AFORESAID PRO POSITION, THE LD. COUNSEL PLACED HEAVY RELIANCE ON THE CBDT INSTR UCTION NO. 1916 DATED 11 TH MAY, 1994, WHEREIN THE CBDT HAS SPECIFIED THE BASIC LIMITS UP TO WHICH THE JEWELLERY FOUND WOULD BE TREATED AS EXPLAINED FOR TAX PURPOSE AND CONSEQUENTLY, THE SAM E COULD NOT BE SUBJECTED TO SEIZURE. THE RELEVANT INSTRUCTION I S RE-PRODUCED AS UNDER: INSTRUCTION NO: 1916 DATE OF ISSUE: 11/5/1994 INSTANCES OF SEIZURE OF JEWELLERY OF SMALL QUANTITY IN THE COURSE OF OPERATIONS UNDER SECTION 132 HAVE COME TO THE NOTICE OF THE BOARD. THE QUESTION OF A COMMON APPRO ACH TO SITUATIONS WHERE SEARCH PARTIES COME ACROSS ITEMS O F JEWELLERY, HAS BEEN EXAMINED BY THE BOARD AND FOLLO WING GUIDELINES ARE ISSUED FOR STRICT COMPLIANCE:- (I) IN THE CASE OF A WEALTH-TAX ASSESSEE, GOLD JEWELLER Y AND ORNAMENTS FOUND IN EXCESS OF THE GROSS WEIGHT DECLA RED IN THE WEALTH-TAX RETURN ONLY NEED BE SEIZED. (II) IN THE CASE OF A PERSON NOT ASSESSED TO WEALTH-TAX, GOLD JEWELLERY AND ORNAMENTS TO THE EXTENT OF 500 GMS. P ER ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 49 MARRIED LADY, 250 GMS. PER UNMARRIED LADY AND 100 GMS. PER MALE MEMBER OF THE FAMILY, NEED NOT BE SEI ZED. (III) THE AUTHORIZED OFFICER MAY, HAVING REGARD TO THE ST ATUS OF THE FAMILY AND THE CUSTOMS AND PRACTICES OF THE COMMUNITY TO WHICH THE FAMILY BELONGS AND OTHER CIRCUMSTANCES OF THE CASE, DECIDE TO EXCLUDE A LARG E QUANTITY OF JEWELLERY AND ORNAMENTS FROM SEIZURE. T HIS SHOULD BE REPORTED TO THE DIRECTOR OF INCOME- TAX/COMMISSIONER AUTHORIZING THE SEARCH AT THE TIME OF FURNISHING THE SEARCH REPORT. (IV) IN ALL CASES, A DETAILED INVENTORY OF THE JEWELLERY AND ORNAMENTS FOUND MUST BE PREPARED TO BE USED FOR ASSESSMENT PURPOSE. 3. THESE GUIDELINES MAY PLEASE BE BROUGHT TO THE NO TICE OF ALL THE OFFICERS IN YOUR REGION. 8.6 ON THE BASIS OF THE ABOVE, IT WAS CONTENDED TH AT THE AFORESAID INSTRUCTION IS SQUARELY APPLICABLE TO THE FACTS OF THE CASE OF THE ASSESSEE SINCE THE GROSS WEIGHT OF JEWE LLERY DECLARED BY THE ASSESSEE AND HIS WIFE EXCEEDS THE GROSS WEIG HT OF JEWELLERY FOUND DURING THE COURSE OF SEARCH AND ACCORDINGLY T HE ENTIRE JEWELLERY WEIGHING 6,716.700 GMS STOOD FULLY DISCLO SED BEFORE THE TAX AUTHORITIES.APART THEREOF, THE LD.COUNSEL ALSO PLACED RELIANCE ON THE FOLLOWING DECISION, WHERE IT HAS BEEN HELD T HAT NO ADDITION ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 50 CAN BE MADE ON ACCOUNT OF JEWELLERY WHICH IS WITHIN THE TOLERABLE LIMIT STIPULATED IN THE AFORESAID CBDT INSTRUCTION: - CIT V. MOHINDER LAL HARYANI: 307 ITR 348 (DEL.) - CIT VS. SATYA NARAINPATNI: 269 CTR 466 (RAJ) - CIT VS. RATANLALVYAPARILAL JAIN: 339 ITR 351 (GUJ) - ACIT VS. GOPI LAL MOR: 21 SOT 29 (JODH) - ACIT VS. RAMESHCHANDRA R. PATEL: 89 ITD 203 (AHD) 8.7 FURTHER, IN SO FAR AS THE ALLEGATION OF THE AS SESSING OFFICER THAT THE JEWELLERY FOUND SHORT DURING THE C OURSE OF SEARCH COULD NOT BE RECONCILED, IT WAS SUBMITTED BY THE LD . COUNSEL THAT SOME OF THE JEWELLERY ITEMS FOUND DURING THE COURSE OF SEARCH DO NOT MATCH WITH THE ITEMS SPECIFIED IN THE VALUATION REPORTS ATTACHED WITH THE WEALTH TAX RETURNS SINCE THE ASSE SSEE HAS A BIG FAMILY, THE ITEMS OF JEWELLERY OF THE FAMILY MEMBER S GETS MIXED AND THEREFORE, IT MAY NOT BE POSSIBLE TO CORRELATE/ MATCH EACH AND EVERY ITEM OF JEWELLERY FOUND WITH THE DESCRIPT ION OF JEWELLERY MENTIONED IN THE VALUATION REPORT ATTACHED WITH THE WEALTH TAX RETURN. FURTHER, IT WAS ALSO EMPHASIZED THAT THE AF ORESAID FACTS/ REASON FOR MISMATCH OF JEWELLERY ITEMS WAS ALSO MEN TIONED BY THE WIFE OF THE ASSESSEE, SMT. BINA MODI, IN HER STATEM ENT DATED 20.12.2011 AND ALSO BY MRS. CHARU BHARTIA IN HER ST ATEMENT DATED 9.11.2011, WHEREIN THEY STATED THAT JEWELLERY ITEMS OF VARIOUS FAMILY MEMBERS GOT MIXED ON VARIOUS OCCASIO NS, PART OF ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 51 JEWELLERY IS BEING USED BY DAUGHTER-IN-LAWS, PART O F JEWELLERY IS ANCESTRAL AND PART OF JEWELLERY HAS BEEN REPROCESSE D. IT WAS ALSO SUBMITTED THAT THE ASSESSEE, TO THE EXTENT AVAILABL E, PROVIDED DETAILS OF JEWELLERY THAT WAS RE-MADE/ CONVERTED IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 2012-13 DURING THE ASSESSMENT PROCEEDINGS AND MOST OF THE ITEMS, STOOD RECONCILED.EVEN WITHOUT CONSIDERING THE ABOVE, THE LD. COUNSEL SUBMITTED ONCE THE JEWELLERY DISCLOSED BY THE ASSES SEE (AND HIS FAMILY MEMBERS) FAR EXCEEDS THE JEWELLERY PHYSICALL Y FOUND DURING THE COURSE OF SEARCH, NO ADDITION COULD HAVE BEEN M ADE MERELY ON THE GROUND THAT THE DESCRIPTION OF SOME OF THE J EWELLERY ITEMS COULD NOT BE MATCHED/ RECONCILED.IN SUPPORT, THE CO UNSEL PLACED RELIANCE ON VARIOUS DECISIONS, SOME OF WHICH ARE AS UNDER: - SMT. KRISHNA WANTI BATRA VS. ASSISTANT COMMISSIONER OF INCOME TAX: 149 TAXMAN 36 (DEL) - GAURISHANKEROMKARMAL VS . ITO: 37 TTJ 353 (AHD.) - DCIT VS. ARJUN DASSKALWANI: 101 ITD 337 (JODH.) - SH. ARVIND AGARWAL AND SH. SUBHASH AGARWAL: I.T.A. NOS. 455, 277, 278 & 443/IND/2013 (INDORE) 8.8 IT WAS FURTHER ARGUED THAT THE BOARD, IN THE I NSTRUCTION ISSUED, HAS EMPHASIZED ON THE GROSS WEIGHT DECLARED IN THE WEALTH-TAX RETURN RATHER THAN THE DESCRIPTION. THIS IS FOR THE ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 52 REASON THAT THE BOARD RECOGNIZED THE ABOVE FACTORS, WHICH NORMALLY LEADS TO DESCRIPTION OF THE JEWELLERY NOT MATCHING WITH THE RETURN AND THAT IN CLAUSE (III) OF THE ABOVE IN STRUCTION, THE BOARD HAS FURTHER CLARIFIED THAT HAVING REGARD TO T HE STATUS OF THE FAMILY, CUSTOMS AND PRACTICES OF THE COMMUNITY TO W HICH THE FAMILY BELONGS, EVEN LARGER QUANTITY OF JEWELLERY M AY BE TREATED AS DISCLOSED. MEANING THEREBY, THAT HAVING REGARD TO T HE STATUS OF THE FAMILY, LARGER QUANTITY OF JEWELLERY, LARGER TH AN THE ONE DECLARED IN THE WEALTH TAX RETURN, MAY NOT BE SEIZE D.THE LD.COUNSEL SUBMITTED THAT THE ASSESSEE BELONGS TO A N AFFLUENT BUSINESS FAMILY AND IS A VETERAN INDUSTRIALIST AND CONTROLS VARIOUS COMPANIES UNDER THE CONTROL/ MANAGEMENT OF KK MODI GROUP WHICH HAS VARIED BUSINESS INTERESTS. IT WAS S UBMITTED THAT THE ASSESSEE IS MORE THAN 70 YEARS OLD AND GOT MARR IED WAY BACK IN THE YEAR 1961 AND THAT THE ASSESSEE AND HIS FAMI LY MEMBERS GIVE/ RECEIVE JEWELLERY AS GIFT ON VARIOUS CEREMONI ES/ OCCASIONS/ FESTIVALS. THUS, HAVING REGARD TO THE AFORESAID FAC TORS RELATING TO THE STATUS OF THE ASSESSEES FAMILY, JEWELLERY WEIG HING 6,716.700 GMS CANNOT BE CONSIDERED AS UNDISCLOSED. 8.9 ON THE BASIS OF THE ABOVE, IT WAS VEHEMENTLY CONTENDED THAT THE CASE OF THE ASSESSEE WAS SQUAREL Y COVERED BY ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 53 THE AFORESAID DECISIONS, IN SO FAR AS THE TOTAL JEW ELLERY (BOTH IN TERMS OF WEIGHT AND VALUE) DECLARED BY THE ASSESSEE AND HIS FAMILY MEMBERS FAR EXCEEDS THE JEWELLERY PHYSICALLY FOUND DURING THE COURSE OF SEARCH AND THEREBY BENEFIT OF SUCH EX CESS JEWELLERY DECLARED SHOULD BE ALLOWED AND ADDITION CANNOT BE M ADE MERELY ON THE GROUND THAT THE ASSESSEE COULD NOT LEAD EVID ENCE FOR CONVERSION OR REMAKING OF THE JEWELLERY. IT WAS ALS O POINTED OUT THAT MOST OF THE JEWELLERY PREDOMINANTLY BELONGED T O MRS. BINA MODI, WIFE OF THE ASSESSEE AND THE ASSESSING OFFICE R HAS MERELY PROCEEDED TO PRESUME THAT THE ENTIRE JEWELLERY FOUN D SHORT BELONGED TO THE ASSESSEE, WITHOUT APPRECIATING THAT JEWELLERY BELONGING TO THE ASSESSEES WIFE AND DAUGHTER ALSO FORMED A PART OF THE JEWELLERY THAT WAS FOUND AND SEIZED DURING T HE COURSE OF SEARCH CONDUCTED IN THE CASE OF THE ASSESSEE AND AC CORDINGLY, THE ADDITION MADE SOLELY IN THE HANDS OF THE ASSESSEE W AS NOT AT ALL JUSTIFIED, MORE SO WHEN THE VALUE OF JEWELLERY DECL ARED BY THE ASSESSEE AND HIS FAMILY MEMBERS IN THE WEALTH TAX R ETURNS FILED FOR ASSESSMENT YEARS 2012-13 AND 2013-14 HAS BEEN C ONSISTENTLY ACCEPTED BY THE ASSESSING OFFICER AFTER DUE APPLICA TION OF MIND AND NO ADDITION HAS BEEN MADE ON ACCOUNT OF UNEXPLA INED JEWELLERY. ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 54 8.10 IN REBUTTAL, THE LD. DEPARTMENTAL REPRESENTAT IVE VEHEMENTLY RELIED ON THE ORDERS OF THE LOWER AUTHOR ITIES. 8.11 WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMIS SIONS AND THE RELEVANT MATERIAL AND RATIO OF THE ORDERS A ND JUDGMENT RELIED BY BOTH THE PARTIES, AT THE VERY OUTSET, WE NOTE THAT UNDISPUTEDLY THE QUANTUM OF JEWELLERY DECLARED IN T HE WEALTH TAX RETURNS OF THE ASSESSEE AND HIS FAMILY MEMBERS WAS MUCH HIGHER THAN THE JEWELLERY FOUND DURING THE COURSE OF SEARC H. CBDT INSTRUCTION DATED 11-5-1994 PROVIDES THAT NO SEIZUR E SHOULD BE MADE IN THE SEARCH FOR THE JEWELLERY HELD BY THE LA DIES AT 500 GMS, GIRLS AT 250 GMS AND MALES AT 100 GMS EACH. TH OUGH THE INSTRUCTION SPEAKS OF NOT SEIZING THE SAME, THE EXT ENDED MEANING OF THE SAME SHOWS THE INTENTION THAT THE JEWELLERY IS TO BE TREATED AS EXPLAINED ONE AND IS NOT TO BE TREATED AS UNEXPL AINED FOR THE PURPOSE OF INCOME-TAX ACT. THIS INSTRUCTION CAME TO BE CONSIDERED BY SEVERAL BENCHES ALL OVER INDIA IN WHI CH IT HAS BEEN HELD THAT IT WOULD BE RELEVANT FOR THE PURPOSES OF MAKING ADDITION AS WELL. THE HONBLE RAJASTHAN HIGH COURT IN THE CASE CIT V. KAILASH CHAND SHARMA 147 TAXMAN 376 HAS UPHELD THIS VIEW. WHEN THIS INSTRUCTION IS APPLIED TO THE FACTS OF THE CASE, WE OBSERVE THAT THE POSSESSION OF GOLD JEWELL ERY OF ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 55 38,748.28GMS, WHICH IS FAR LESS THAN DECLARED JEWEL LERY OF 46,634.842 GMS IT CANNOT BE HELD TO BE UNEXPLAINED. 8.12 FURTHER, IN SO FAR AS THE ALLEGATION OF MISMA TCH OF DESCRIPTION OF JEWELLERY, WE ARE OF THE VIEW THAT I T IS WELL-KNOWN FACT THAT INDIAN LADIES KEEP CHANGING DESIGN OF JEW ELLERY FROM TIME TO TIME. FURTHER, THE SAID FACT WAS ALSO STATE D BY THE ASSESSEES WIFE DURING THE COURSE OF STATEMENT RECO RDED DURING THE COURSE OF SEARCH AND EVIDENCE IN SUPPORT OF SUC H REMAKING/CONVERSION WAS ALSO FILED BEFORE THE ASSES SING OFFICER, WHICH WAS NOT ALL CONSIDERED. HAVING IN MIND DETAI LED EXPLANATION RENDERED BY THE ASSESSEE WE ARE INCLINE D TO TREAT THE ENTIRE JEWELLERY FOUND WITH ASSESSEE AS FULLY EXPLA INED. 8.13 IN SIMILAR CIRCUMSTANCES, THE COORDINATE DELH I BENCH OF THE TRIBUNAL IN THE CASE OF SMT. KRISHNA WANTI B ATRA (SUPRA), DELETED THE ADDITION. IN THAT CASE, PURSUANT TO SEA RCH IN THE PREMISES OF THE ASSESSEE, REVENUE FOUND JEWELLERY W ORTH RS.13,89,530. THE ASSESSEE STATED THAT A PART OF JE WELLERY BELONGED TO HER DAUGHTERS-IN-LAW AND MARRIED DAUGHT ER. THE ASSESSING OFFICER FOUND THE ENTIRE JEWELLERY EXCEPT FOR VALUE OF RS.1,66,348 AS EXPLAINED AND CONSEQUENTLY ADDED THE AFORESAID AMOUNT TO THE INCOME OF ASSESSE. THE ASSESSMENT WAS CONFIRMED ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 56 ON APPEAL BY THE COMMISSIONER (APPEALS). ON FURTHER APPEAL TO THE TRIBUNAL, THE ASSESSEE CONTENDED THAT THE ADDIT ION MADE WAS TOTALLY UNJUSTIFIED AS SHE HAD, IN HER RETURN OF WE ALTH FOR THE ASSESSMENT YEAR 1984-85, FILED ON 13-11-1984, I.E., MUCH BEFORE THE SEARCH, DISCLOSED JEWELLERY HAVING GROSS WEIGHT OF 2,888.8 GMS, WHICH WAS MORE THAN THE TOTAL JEWELLERY FOUND DURING THE COURSE OF SEARCH. IN THIS REGARD, THE TRIBUNAL FURT HER HELD THAT THE ASSESSEE WAS ENTITLED TO BENEFIT OF WEIGHT OF J EWELLERY DISCLOSED IN THE RETURNS AS IT IS A WELL-KNOWN FACT THAT INDIAN LADIES KEEP CHANGING DESIGN OF JEWELLERY FROM TIME TO TIME. ACCORDINGLY, THE TRIBUNAL DIRECTED THE ADDITION MAD E IN THE HANDS OF THE ASSESSEE TO BE DELETED. THE RELEVANT FINDINGS OF THE TRIBUNAL IN THIS REGARD ARE REPRODUCED AS UNDER: .. 4. SHRI R.K. KHIWANI, CA, DURING THE COURSE OF HEAR ING OF APPEAL, SUBMITTED THAT ADDITION MADE IS TOTALLY UNJ USTIFIED AS THE ASSESSEE IN HER RETURN OF WEALTH FOR THE ASSESS MENT YEAR 1984-85 FILED ON 16TH NOV., 1984, I.E., MUCH BEFORE THE SEARCH, HAD DISCLOSED JEWELLERY HAVING GROSS WEIGHT OF 2,888.8 GMS. WHICH WAS MORE THAN TOTAL JEWELLERY FO UND IN THE SEARCH. HOWEVER, INSTEAD OF CONSIDERING AFORESA ID LATEST RETURN OR VALUATION REPORT, THE AO WRONGLY CONSIDER ED VALUATION REPORT FOR ASSESSMENT YEAR 1978-79 AND TH US DID ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 57 NOT GIVE BENEFIT OF ITEM DISCLOSED WHICH HAD SLIGHT VARIATION IN THE DESCRIPTION. THE REVENUE AUTHORITIES SHOULD HAV E GIVEN BENEFIT OF WEIGHT OF JEWELLERY DISCLOSED WHILE DETE RMINING THE JEWELLERY POSSESSED BY THE ASSESSEE AND HER FAMILY MEMBERS. THE LEARNED COUNSEL FOR THE ASSESSEE FURTH ER EXPLAINED THAT THE ASSESSEE HAD 2,888.8 GMS. GROSS AND 2779.300 GMS. NET WEIGHT OF JEWELLERY AS PER HER RE TURN. THE JEWELLERY FOUND AT THE TIME OF SEARCH WAS MUCH LESS AS PER THE FOLLOWING DETAILS: GROSS WEIGHT (IN GMS.) NET WEIGHT (IN GMS.) 1483.000 1428.100 1238.800 1214.400 124.300 124.300 2846.100 2766.800 IT WAS EXPLAINED THAT ABOVE EXPLANATION WAS DULY SU BMITTED BEFORE THE AO BUT WAS NOT OBJECTIVELY CONSIDERED BY HER. THE AO WENT BY ORDER PASSED UNDER SECTION 132(5) WHICH IS ONLY A SUMMARY ASSESSMENT. DETAILED EXPLANATION FILED ON 18TH NOV., 1985, WAS ALSO NOT CONSIDERED. HE DREW MY ATT ENTION TO VALUATION REPORT FILED IN THE CASE OF THE ASSESSEE FOR ASSESSMENT YEAR 1984-85 AS ALSO DETAILED EXPLANATIO N AVAILABLE AT PP. 104 TO 113 OF THE PAPER BOOK. THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON IMPUGNED OR DERS OF THE REVENUE AUTHORITIES. 5. I HAVE GIVEN CAREFUL THOUGHT TO THE RIVAL SUBMIS SIONS OF THE PARTIES ADVANCED BEFORE ME. IT IS WELL KNOWN THAT O RDER UNDER SECTION 132(5) IS TO BE PASSED WITHIN THREE M ONTHS OF ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 58 THE SEIZURE TO DECIDE IN A SUMMARY MANNER WHETHER T HE SEIZED ASSETS ARE TO BE RELEASED OR RETAINED. SUCH AN ORDER HAS LIMITED SCOPE AND IN MOST OF THE CASES, THESE A RE PASSED TO RETAIN THE SEIZED ASSETS. SIMILAR IS THE POSITIO N OF AN ORDER PASSED UNDER SECTIONS 132(11) AND (12) OF THE IT AC T. I AM, THEREFORE, OF THE VIEW THAT REVENUE AUTHORITIES WER E NOT JUSTIFIED IN SUSTAINING ADDITION IN DISPUTE SOLELY ON THE BASIS OF FINDING RECORDED IN ORDERS PASSED UNDER SECTIONS 132(5) AND (12) OF IT ACT. THE DETAILED EXPLANATIONS OF TH E ASSESSEE ARE NOT SHOWN TO BE OBJECTIVELY CONSIDERED BY THE R EVENUE AUTHORITIES. IT IS FURTHER NOT CLEAR FROM RECORD AS TO WHY BENEFIT OF JEWELLERY DISCLOSED BY THE ASSESSEE IN A SSESSMENT YEAR 1984-85 IN THE RETURN OF WEALTH SUBMITTED BEFO RE THE DATE OF SEARCH, WAS NOT ALLOWED. LIKEWISE LIMITED B ENEFIT HAS BEEN ALLOWED TO OTHER FAMILY MEMBERS AND NOT AS CLA IMED BY THEM. 6. IT IS FURTHER CLEAR FROM RECORD THAT JEWELLERY O F VALUE OF RS.13,89,530 WAS FOUND FROM THE PREMISES SUBJECTED TO SEARCH. IT HAS BEEN ADMITTED BY THE REVENUE THAT AB OVE JEWELLERY BELONGED NOT ONLY TO THE ASSESSEE BUT TO HER DAUGHTERS-IN-LAW AND HER UNMARRIED DAUGHTER. JEWELL ERY OF VALUE OF MORE THAN RS.12 LAKHS HAS BEEN ACCEPTED AS EXPLAINED. THE ADDITION IN DISPUTE HAS BEEN MADE ON ACCOUNT OF SLIGHT VARIATION IN DESCRIPTION OF JEWELLERY DIS CLOSED IN THE REPORTS FILED WITH THE RETURN AND REPORTS OF THE DE PARTMENTAL VALUERS PREPARED AT THE TIME OF SEARCH. HERE AGAIN REVENUE AUTHORITIES WENT BACK TO REPORT FOR ASSESSMENT YEAR 1978-79 WITHOUT CONSIDERING LATEST REPORT FOR ASSESSMENT YE AR 1984- ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 59 85. IN MY VIEW ASSESSEES WERE ENTITLED TO BENEFIT O F WEIGHT OF JEWELLERY DISCLOSED IN THE RETURNS AS IT IS WELL-KN OWN FACT THAT INDIAN LADIES KEEP CHANGING DESIGN OF JEWELLERY FRO M TIME TO TIME. HAVING IN MIND DETAILED EXPLANATION RENDERED BY THE ASSESSEE (COPIES AVAILABLE AT PP. 104 TO 113 OF THE PAPER BOOK) I AM INCLINED TO TREAT THE ENTIRE JEWELLERY F OUND WITH ASSESSEE AS FULLY EXPLAINED. THE ADDITION MADE IN T HE HANDS OF THE ASSESSEE FOR UNDISCLOSED INCOME, IS UNJUSTIF IED AND IS DIRECTED TO BE DELETED. 7. IN THE RESULT, THE ASSESSEE'S APPEAL IS ALLOWED. 8.14 IN VIEW OF THE AFORESAID, CONSIDERING THE QUA NTUM OF JEWELLERY DECLARED IN THE WEALTH TAX RETURNS, QUANT UM OF JEWELLERY FOUND AND JEWELLERY MISMATCHED, STATEMENT OF WIFE O F ASSESSEE MRS. BINA MODI AND ALSO THE STATUS OF THE ASSESSEE S FAMILY, WE ARE OF THE VIEW THAT THERE WAS NO WARRANT TO TREAT PART OF THE JEWELLERY AS UNDISCLOSED. ACCORDINGLY, THE ADDITION OF RS.1,12,89,616/- MADE IN THE HANDS OF THE ASSESSEE ON ACCOUNT OF UNDISCLOSED JEWELLERY, IS UNJUSTIFIED AND IS DIR ECTED TO BE DELETED. 9.0 IN THE FINAL RESULT, ASSESSEES APPEALS IN ITA NO. 2892/DEL/2017 FOR A.Y. 2006-07, ITA NO. 2893/ DEL/2 017 FOR A.Y. 2007-08 AND ITA NO. 2894/ DEL /2017 FOR A.Y. 2 012-13 ARE ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 60 PARTLY ALLOWED AND THE REVENUES APPEALS IN ITA NOS . 3951 TO 3956/ DEL /2017 FOR A.Y. 2007-08 TO 2012-13 ARE DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 05.07.2019 . SD/- SD/- (G.D. AGRAWAL) (SUDHANSHU SRIVASTA VA) VICE PRESIDENT JUDICIAL MEMBER DATED: 5 TH JULY, 2019 GS COPY FORWARDED TO: - 1) ASSESSEE 2) RESPONDENT 3) CIT(A) 4) CIT 5) DR BY ORDER ASSTT. REGISTRAR DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS /PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P S/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WE BSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER ITA 2892 TO 2894/D/2017 ITA 3952 TO 3956/D/2017 61 DATE OF DISPATCH OF THE ORDER