Sh. Hari Shanker Khemka, New Delhi V. ITO, New Delhi

ITA 4044/DEL/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81989 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 15-10-2014
• Assessment Year: 2001-2002
• Appeal Filed On: 17-07-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Loose papers; Document seized; Reason to believe; Documents seized
• Section: 147; 69; 148; 132; 15

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C : NEW DELHI BEFORE SHRI G. D. AGARWAL, HONBLE VICE PRESIDENT AND SHRI A. T. VARKEY, JUDICIAL MEMBER ITA NO. 4044 /DEL/ 2014 (ASSESSMENT YEAR: 2001 - 02 ) AND ITA NO. 4045 /DEL/ 2014 (ASSESSMENT YEAR: 2003 - 04 ) HARI SHANKAR KHEMKA, 4428, GANESH BAZAR, CLOTH MARKET, NEW DELHI PAN:AAEPK8265B VS. ITO, WARD - 29(1) NEW DELHI (APPELLANT) (RESPONDENT) O R D E R PER A. T. VARKEY, JUDICIAL MEMBER THE SE APPEAL ARISES FROM AN ORDER DATED 19 TH MAY 2014 OF LD CIT(A), XXV, NEW DELHI DATED 19.05.2014. 2. BRIEF FACTS ARE THAT THE APPELLANT H AD BEEN ENGAGED IN THE CLOTHES BUSINESS LOCATED AT CLOTH MARKET, OLD DELHI FOR A LONG PERIOD OF TIME. HE ORIGINALLY FILED ITS RETURN OF INCOME DECLARING AN INCOME OF RS.1 , 63 , 656 / - FOR THE AY 20 01 - 02 AND RS.1 , 66 , 610/ - FOR THE AY 20 02 - 03 WHICH WAS PROCESSED U / S 143( 1 ) OF THE INCOME TAX AC T , 1961 (HEREIN AFTER THE ACT) . THEREAFTER, A SEARCH ACTION WAS CONDUCTED ON 15 .12. 2004 U/S 132 OF THE ACT IN THE CASE OF SH BRIJ MOHAN GUPTA, GALI HING BEG., TILAK BAZAR, DELHI. AS A RESULT OF THE SEARCH , DOCUMENTS HAVING A BEARING ON THE APPELLANT ALONG WITH MANY OTHERS WERE SEIZED BY THE INVESTIGATION WING WHICH LED TO THE INITIATION OF RE - ASSESSMENT PROCEEDINGS U/S 14 7 OF THE ACT A GAINST THE APPELLANT. THE RE - ASSESSMENT PROCEEDINGS U / S 147 OF THE ACT CU LMINATED IN AN ORDER U / S 143(3)/254 OF THE ACT ON 26 . 12 . 2008 D ETERMINING THE TOTAL INCOME OF THE APPELLANT AT RS 29,63,660/ - AS AGAINST RS 1,63.656 / - DECLARED ORIGINALLY WHEREAS, FOR ASSESSMENT YEAR 2002 - 03, INCOME WAS DETERMINED IS AT RS.42,66,610/ - AS AG AINST RS.1,66,610/ - DECLARED ORIGINALLY. THE APPELLANT BY : B.K. TULIAN, FCA RESPONDENT BY : SATPAL SINGH, SR. DR PAGE 2 OF 9 TOTAL INCOME WAS THUS INCREASED BY THE AO BY MAKING AN ADDITION OF RS. 28 LACS IN ASSESSMENT YEAR 2001 - 02 AND RS. 41 LAKHS IN ASSESSMENT YEAR 2002 - 03 U/S 69 OF THE ACT. THE SAID ORDER S ON APPEAL WERE STRUCK DOWN BY THE ID CIT( A) - XXV, NEW DELHI VIDE ORDER DATED 04 . 11 . 2009 WHEREBY THE ADDITION OF RS 28 LACS AND RS. 41 LAKHS WERE DELETED. 3. THE SAID ORDER OF THE LD CIT ( A) - XXV, NEW DELHI WAS CARRIED IN APPEAL TO THE TRIBUNAL AND BY ORDER ITA NO. 175 &176/DEL/20 10 DATED 16 . 11 . 2011 , THE TRIBUNAL RESTORED THE MATTER TO THE FILE OF THE AO FOR FRESH ADJUDICATION. 4. IN PURSUANCE OF THE ABOVE ORDER OF THE ITAT DATED 16 . 11 . 2011 THE AO FRAMED ASSESSMENT ORDER S ON 19 .03. 2013 BY MAKING THE ADDITIONS OF RS 28 LACS IN ASSESSMENT YEAR 2001 - 02 AND RS.41 LAKHS IN ASSESSMENT YEAR 2002 - 03. THE LD CIT(A) HAS CONFIRMED THE ADDITIONS AND HENCE THE APPEALS BEFORE US. 5 . GROUND NO.1, 2 AND 3 IN BOTH THE APPEALS ARE INTER - LINKED & RELATES TO ASSUMPTION OF JURISDICTION U/S 147 OF THE ACT. 6 . THIS GROUND WAS HELD TO BE NOT TENABLE BY THE LD CIT(A) FOR THE REASON STATED BY HIM IN HIS ORDER AND EXTRACTED HERE UNDER : - ON A PERUSAL OF THE ABOVE IT WAS NOTICED THAT THE APPELLANT MADE INCORRECT STATEMENTS OF FACTS. THERE WAS SUFFICIE NT MATERIAL IN EXISTENCE IN THE FORM OF THE STATEMENTS OF SH RAJEEV GUPTA, SH RAM AVATAR SINGHAL, SH RAM AVATAR, SH BRIJ MOHAN GUPTA, REASONS RECORDED ON 18/3/2008 FOR ACTION U/S 148 AND THE LIST OF 300 ENTRIES CONTAINING THE NAMES AND ADDRESSES OF PERSONS , WHO ADVANCED CASH LOANS IN CRORES OF RUPEES. IN ADDITION TO THE ABOVE, ANNEXURES - A5& A - 50 CONTAINING THE DETAILS OF DUBIOUS CLANDESTINE TRANSACTIONS ALSO EXISTED SUGGESTING ESCAPEMENT OF INCOME IN THE CASE OF THE APPELLANT FOR THE IMPUGNED AY. IT HAS BEE N HELD IN A NUMBER OF CASES THAT THE EXISTENCE OF REASONS AND NOT THE SUFFICIENCY OR ADEQUACY THEREOF IS MATERIAL FOR INITIATING U/S 147 OF THE ACT. IN THE INSTANT CASE, THERE WAS JUDICIALLY NOTICEABLE FACTS IN THE FORM OF THE SEIZED DOCUMENTS REFLECTING T HE INVOLVEMENT OF THE APPELLANT. BESIDES, ALL THE CONDITIONS FOR REOPENING AN ASSESSMENT WERE SATISFIED IN THE CASE AT HAND. THE ID.AO FORMED A TENTATIVE OR PRIMA FACIE OPINION ON THE BASIS OF SEIZED MATERIAL CONTAINING IMPUTATIONS AGAINST THE APPELLANT SUGGESTING ESCAPEMENT OF INCOME. ON THE BASIS OF THE SAME HE RECORDED THE OPINION PRIMA FACIE. THE OPINION FORMED WAS OBJECTIVE AND THE REASONS RECORDED SHOWED THAT THE OPINION WAS NOT A MERE SUSPICION. THE REASONS RECORDED AND THE SEIZED DOCUMENTS SHOWED A NEXUS AND THAT IN FACT THEY WERE GERMANE AND RELEVANT TO THE OPINION FORMED BY THE ID.AO REGARDING ESCAPEMENT OF INCOME. PAGE 3 OF 9 THEREFORE, THE ALLEGATION OF THE APPELLANT WHILE ASSAILING THE PROCEEDINGS U/S 147 THAT THERE WAS NO ADVERSE EVIDENCE IS FACTUALLY INCORRECT. AS REGARDS THE GRUDGES OF THE APPELLANT THAT THERE WAS NO JUDICIAL APPLICATION OF MIND AND THE SATISFACTION OF THE ID.AO WAS BORROWED THEY HAVE NO LEG TO STAND ON IN VIEW OF THE FACT THAT THE NATURE OF THE EVIDENCE RECOVERED FROM THE PREMISES OF SH BRIJ MOHAN GUPTA WAS SUCH AS NOT TO PERMIT ANY SECOND OPINION OR ANOTHER VIEW, SINCE THE EVIDENCE PERMITTED ONLY ONE VIEW THERE WAS NO OCCASION FOR THE ID.AO TO INTERPRET AND EXAMINE THE EVIDENCE FROM A DIFFERENT ANGLE. ON THE AVAILABLE FACTS THE ID.AO WAS BOUND TO FORM THE SAME REASON A S WAS DONE BY THE ERSTWHILE OFFICERS AND THE AUTHORITIES OF THE INVESTIGATION WING OF INCOME TAX. IN THE LIGHT OF THE FOREGOING FACTS, THE GROUND OF APPEAL NO. 2 CHALLENGING THE COMPETENCY OF THE ORDER PASSED BY THE ID.AO IS DISMISSED. 7 . BEFORE US, THE LD AR SUBMITTED THAT THE ASSUMPTION OF JURISDICTION IS ILLEGAL AND WAS WITHOUT APPLYING JUDICIAL MIND. THE LD DR SUPPORTED THE ORDER OF THE LD CIT(A). 8 . HAVING CONSIDERED THE FACTS AND MATERIALS PLACED ON RECORD WE FIND THAT IN THE FIRST ROUND THE LD CIT (A), VIDE ORDER DATED 04.11.2009 HAD UPHELD THE REOPENING U/S 147 OF THE ACT ON THE FOLLOWING BASIS: - 4.2. IT IS EVIDENT THAT UPON RECEIPT OF A LETTER FROM DCIT CENTRAL CIRCLE 19 NEW DELHI, THE ASSESSING OFFICER HAD BONAFIDE REASONS TO RE - OPEN THE ASSESSMENT IN THE CASE OF THE APPELLANT BY ISSUE OF A NOTICE U/S 148. BEFORE DOING SO, THE REASONS FOR REOPENING TH E ASSESSMENT WERE RECORDED AND THE APPROVAL FOR THE SAME WAS OBTAINED FROM THE ADDL CIT, RANGE - 29 NEW DELHI. THERE IS NO MERIT IN THE ARGUMENTS OR THE APPELLANT AGAINST RE - OPENING OF THE ASSESSMENT. THE LETTER OF THE DCIT CENTRAL CIRCLE 19, NEW DELHI THAT FORMED THE BASIS FOR RE - OPENING OF THE ASSESSMENT REFERRED TO THE FINDINGS OF THE SEARCH AND MENTION WAS MADE OF THE LOAN TRANSACTIONS ENTERED BY THE APPELLANT THROUGH SH BRIJ MOHAN GUPTA. BASED ON THIS INFORMATION, THE LOAN TRANSACT IONS OF THE APPELLANT WERE WORKED OUT AND IN THE ABSENCE OF THESE APPEARING IN THE RETURNED INCOME, THERE WAS REASON TO BELIEVE THAT INCOME HAD ESCAPED ASSESSMENT AND THEREFORE ACTION U/S 147 WAS INEVITABLE. THEREFORE, PRIMA FACIE THERE WAS SOME MATERIAL ON THE BASIS OF WHICH THE ASSESSMENT COULD BE RE - OPENED. AS HELD IN THE CASE OF RAYMOND WOOLEN MILLS LTD V ITO (1999) 236 ITR 34 (SC), THE CORRECTNESS OR SUFFICIENCY OF THE MATERIAL' IS NOT A THING TO HE CONSIDERED AT THE STAGE OF RE - OPENING THE ASSESSMENT. 4.3. IN CONCLUSIO N, IN VIEW (IF THE FACTS OF THE CASE, THE LEGAL POSITION AND THE INTERPRETATION OF SECTION 147 BY THE HONBLE SUPREME COURT, IT IS BEYOND DOUBT THAT THE ASSESSING OFFICER WAS JUSTIFIED IN LAW IN INITIATING PAGE 4 OF 9 ACTION U/S 147 OF THE INCOME TAX ACT. THEREFORE, G ROUNDS NO.5 AND 6 OF THE APPEAL ARE DISMISSED. 9 . WE FIND THAT NO APPEAL WAS PREFERRED BY THE ASSESSEE CHALLENGING THE ABOVE FINDING BEFORE THE TRIBUNAL. AND THE TRIBUNAL , IN THE EARLIER ORDER, AFTER NOTING THE ABOVE FINDING OF THE LD CIT(A) WHILE DISPOSI NG OFF THE REVENUES APPEAL ON MERITS OF THE ADDITIONS HAD HELD THAT ACTION U/S 147 OF THE ACT WAS INEVITABLE AND HELD AS UNDER: - BASED ON THE INFORMATION GIVEN BY THE DCIT, CENTRAL CIRCLE - 19, NEW DELHI, THE LOAN TRANSACTIONS OF THE ASSESSEE WERE WORKED O UT AND IN THE ABSENCE OF THE SAID TRANSACTION BEING REFLECTED IN THE RETURN OF INCOME OF THE ASSESSEE, THE AO HAD REASON TO BELIEVE THAT INCOME HAD ESCAPED ASSESSMENT, AND THEREFORE, ACTION U/S 147 OF THE ACT WAS INEVITABLE. THE LEARNED CIT(A) HAS, THEREFO RE, TAKEN A VIEW THAT PRIMA FACIE THERE WAS SOME MATERIAL ON THE BASIS OF WHICH THE ASSESSMENT COULD BE REOPENED, THOUGH THE CORRECTNESS OR SUFFICIENCY OF THE MATERIAL IS NOT A THIN TO BE CONSIDERED AT THE STAGE OF REOPENING OF ASSESSMENT. THE LD CIT( A) T HEREFORE, UPHELD THE VALIDITY OF ACTION INITIATED BY THE AO UNDER SEC, 147 OF THE ACT, AGAINST WHICH, THE ASSESSEE HAS NOT FILED ANY APPEAL NOR CROSS OBJECTION. THUS, THE ISSUE THAT THE AO WAS JUSTIFIED IN LAW IN INITIATING ACTION UNDER SEC. 147 OF THE ACT HAS BEEN SETTLED, AND IS NOT IN DISPUTE BEFORE US IN THIS APPEAL. 10 . IN SUCH CIRCUMSTANCES AND HAVING REGARD TO THE ABOVE FACTUAL AND JUDICIAL POSITION WE HOLD THAT THE GROUNDS RAISED ARE MISCONCEIVED AND AS SUCH DISMISSED. 11 . GROUND NO.4 AND 5 RELATE S TO ADDITIONS MADE OF RS.28 LAKHS IN ASSESSMENT YEAR 2001 - 02 AND RS.41 LAKHS IN ASSESSMENT YEAR 2002 - 03 U/S 69 OF THE ACT. 12 . THE RELEVANT FACTS AS STATED BY THE LD CIT(A) WHILE UPHOLDING THE ADDITIONS ARE THAT PURSUANT TO A SEARCH ON SHRI BRIJ MOHAN GU PTA IT WAS FOUND THAT HIS GROUP WAS ENGAGED IN HUNDI BUSINESS WHERE MONEY WAS ARRANGED FROM VARIOUS PARTIES AND ADVANCES TO THE DIFFERENT PARTIES. THE GROUP ACTED AS MEDIATOR/ BROKER IN SUCH FINANCIAL TRANSACTION WHEREIN BROKERAGE WAS CHARGED BY THEM. 13. DURING THE COURSE OF SEARCH OPERATION VARIOUS LOOSE PAPERS/ DIARIES WERE FOUND AND SEIZED WHICH REFLECTS DETAILS OF THE VARIOUS PARTIES ON BEHALF OF WHOM THE GROUP CARRIED OUT HUNDI BUSINESS. IN SOME PLACES FULL DETAILS OF THE PARTIES WERE MENTIONED WHERE AS IN SOME OTHER PAPERS THE DETAILS WERE MENTIONED IN CODED FORM. PAGE 5 OF 9 14. THE CODED ENTRIES WERE WRITTEN BY SH. RAM AVTAR SINGHAL WHO WAS ACCOUNTANT OF THE GROUP. HE HAD DECODED THESE ENTRIES BY GIVING THE CORRECT DETAILS OF TRANSACTIONS AND PARTIES ALONG WIT H CORRESPONDING CODED ENTRIES/ TRANSACTIONS. IN THE STATEMENT RECORDED ON OATH HE HAD EXPLAINED THE COMPLETE MODUS OPERANDI OF THE GROUP WHILE CONDUCTING THE HUNDI BUSINESS/ UNACCOUNTED CASH LOAN TRANSACTIONS. IT WAS ALSO REVEALED THAT SH. RAJIV GUPTA WHO IS SON OF SH. BRIJ MOHAN GUPTA WAS ACTIVELY INVOLVED IN SUCH UNACCOUNTED HUNDI AND CASH LOAN TRANSACTIONS. THE DECODED INFORMATION WAS FURTHER CONFIRMED AND VERIFIED BY SH. RAJIV GUPTA. 15 . THE AO DURING THE REMAND PROCEEDINGS PROVIDED THE FOLLOWING DOCUMENTS ON THE DIRECTION OF THE ITAT: - (I) STATEMENTS OF SH RAJEEV GUPTA (II) STATEMENTS OF SH RAM AVATAR SINGHAL (III) STATEMENTS OF SH RAM AVATAR (IV) STATEMENT OF SH BRIJ MOHAN GUPTA (V) REASONS RECORDED ON 18/3/2008 FOR ACTION U/S 148 (VI) LIST OF 300 ENTRIES CONTAINING THE NAMES AND ADDRESSES OF PERSONS, WHO ADVANCED CASH LOANS IN CRORES OF RUPEES. 16 . FURTHER THE AO NOTED THAT THE SEIZED DOCUMENTS MARKED AS A - 50 AND A - 5 REVEAL THAT ENTRIES AT SERIAL NO.141, 229 AND 281 SHOW ADVANCE S MADE BY THE ASSESSEE. THE DETAILS OF THE ENTRIES ARE AS UNDER: - S NO. NAME ADDRESS PERIOD AMOUNT (IN LACS) 141 HARI SHANKAR CLOTH MARKET, FATEHPURI, DELHI MAY, 2000 28 229 KHEMKA HARI SHANKAR KHEMKA CLOTH MARKET, DELHI MAY, 2001 24 281 HARI HEMKA CLOTH MARKET, FATEHPURI, DELHI AY 2002 - 03 17 17 . HAVING REGARD TO THE ABOVE, THE LD CIT(A), UPHELD THE ADDITION ON THE FOLLOWING BASIS: - I) THE ORAL EVIDENCE IN THE SHAPE OF STATEMENTS OF ALL THE CONCERNED PERSONS CLEARLY ESTABLISHED THE FACT THAT THE APPELLANT HAD ENTERED INTO THE CASH TRANSACTIONS OF RS 28 LACS IN CONNIVANCE WITH SH BRIJ MOHAN GUPTA. PAGE 6 OF 9 II) THE UNDUE EMPHASIS TO PRODUCE SH BR IJ MOHAN GUPTA WHO WAS NO MORE ONLY EXHIBITED THE NON - COOPERATIVE SPIRIT OF THE APPELLANT WITH THE OBJECT TO CAMOUFLAGE THE REALITY OF THE TRANSACTION. EVEN OTHERWISE THE TECHNICALITIES OF THE INDIAN EVIDENCE ACT DO NOT APPLY TO THE INCOME TAX PROCEEDINGS. THE INCOME - TAX OFFICER HAS VERY WIDE POWERS AND IS NOT FETTERED BY TECHNICAL RULES OF EVIDENCE AND PLEADINGS, AND THAT THE ONLY RESTRICTION ON HIS JUDGMENT IS THAT HE MUST ACT HONESTLY ON THE MATERIAL HOWEVER INADEQUATE BEFORE HIM BUT NOT CAPRICIOUSLY OR ARBITRARILY. IN THE INSTANT CASE, THE FAILURE TO PRODUCE THE PERSON CONCERNED FOR CROSS EXAMINATION WAS BECAUSE OF THE SAD DEMISE OF SH. BRIJ MOHAN GUPTA. IN SUCH CIRCUMSTANCES, IT WAS IMPOSSIBLE FOR ANYONE TO PRODUCE A DEAD PERSON FOR CROSS EXAMINATION. I T WAS ONLY A DESIGN OR SYSTEM UNDERLYING SUCH A DEMAND. THE LAW DOES NOT EXPECT ANYONE TO PERFORM THE IMPOSSIBLE. (III) THE INCOME - TAX OFFICER WAS ENTITLED TO REACH THE CONCLUSION FROM THE SEIZED MATERIAL AND EVIDENCE AVAILABLE ON RECORD AGAINST HIM. (IV ) THE STATEMENT WHERE THE APPELLANT'S NAME WAS STATED AS HARI SHANKAR OF NARAYANA BY THE ACCOUNTANT WAS BECAUSE OF THE MISLEADING INFORMATION GIVEN BY THE APPELLANT DELIBERATELY TO CONCEAL HIS REAL IDENTITY AND THEREBY HIS WITNESS AGAINST HIM. (V) THOUG H THE STATEMENT INDICATED THE APPELLANT AS THE HARI SHANKAR NARAYANA, THE SEIZED DOCUMENTS REFLECTED THE CORRECT ADDRESS OF THE APPELLANT. IN THIS CONTEXT, IT IS WORTHWHILE TO ADD THAT IF A PERSON'S DESCRIPTION TALLIES IN ALL MATERIAL RESPECTS THE MINOR DE VIATIONS DESERVE TO BE IGNORED. IN THE INSTANT CASE, THE ORAL EVIDENCE MIGHT BE SUGGESTIVE OF SOME OTHER PERSON, THE DOCUMENTARY EVIDENCE IN THE SHAPE OF SEIZED DOCUMENTS PIN POINTED TO THE APPELLANT IN QUESTION. MOREOVER, IT WAS NEVER CONTRADICTED BY THE PERSON MAKING SUCH A STATEMENT THAT HARI SHANKAR OF NARAYANA WAS NOT THE SAME AS THE APPELLANT IN QUESTION. (VI) THE JOTTINGS ETC WERE SUCCESSFULLY DECIPHERED BY THE AUTHORIZED OFFICERS WHILE RECORDING THE STATEMENT OF SH BRIJ MOHAN GUPTA. IN THE COURSE OF THE STATEMENTS ALL THE ENTRIES MADE IN CODED LANGUAGE WERE DECODED AND CONFRONTED TO SH BRIJ MOHAN GUPTA WHICH RESULTED IN BRINGING TO TASK THE BENEFICIARIES OF CASH LOANS THROUGH HUNDIS NUMBERING 135 AND 313 OTHERS FOR CASH LOANS IN CRARES OF RUPEES. O N THE BASIS OF ABOVE INCRIMINATING INFORMATION SH BRIJ MOHAN GUPTA PAID THE TAXES ON THE ENTIRE AMOUNT DETECTED IN THIS FASHION I.E. IN THE FORM OF JOTTINGS AND DOTTINGS LATER ON EXPANDED WHILE GIVING THE STATEMENTS. (VII) THAT THE PROCEEDINGS WERE NOT B ASED ON JOTTINGS AND DOTTINGS AS ALLEGED BY THE APPELLANT. THE ANNEXURES PROVIDED TO THE APPELLANT DID NOT REVEAL JOTTINGS AND DOTTINGS BUT WERE WRITTEN IN SUCH A FORM WHICH HAD A SCIENTIFIC AND SYSTEMATIC DESIGN WHICH WERE CORROBORATED BY SH RAM AVATAR GU PTA AND SH BRIJ MOHAN GUPTA. (VIII) THE APPELLANT'S EXPLANATION ON THE STATEMENTS OF THE VARIOUS PERSONS, WHOSE COPIES WERE SUPPLIED TO HIM AND THE ANNEXURE A - 5 & A - 50 SEIZED FROM THE SEARCH PREMISES WAS NOT AT ALL CONVINCING. PAGE 7 OF 9 (IX) THERE WAS SUFFICIENT MATERIAL IN THE FORM OF STATEMENTS AND SEIZED DOCUMENTS TOGETHER WITH CIRCUMSTANTIAL EVIDENCE SUGGESTING THE INVOLVEMENT O F THE APPELLANT IN THE ENTRIES SEAMS. 18 . BEFORE US THE LD AR SUBMITTED THAT THE IMPUGNED ADDITION UPHELD BY THE LD CIT(A) IS NOT BASED ON ANY EVIDENCE AND DENYING THE RIGHT OF CROSS - EXAMINATION OF THE WITNESS, THUS VITIATING THE IMPUGNED ADDITION. SO HE PRAYS FOR THE DELETION OF THE SAME. ON THE OTHER HAND LD DR SUPPORTED THE ORDER OF THE AUTHORITIES BELOW . 19 . WE HAVE HEARD THE RIV AL SUBMISSION AND GONE THROUGH THE RECORDS. WE FIND THAT THE AO HAS MADE THE ADDITIONS BY REFERRING TO PG 1 TO 4 OF ANEXXURE - A - 50 AND PAGE 1TO 8 OF ANNEXURE A - 5 AND HAVE BEEN PLACED AT PG 44 TO 47 AND 48 TO 55 OF THE PAPER BOOK. WE HAVE CAREFULLY GONE THRO UGH THE SAID DOCUMENTS, WE FIND THAT THE SAID DOCUMENTS CANNOT BE MADE A SOLE BASIS TO MAKE ADDITIONS IN THE HANDS OF THE ASSESSEE. THESE PAPERS ARE ADMITTEDLY FOUND FROM THIRD PARTY. THERE IS NO NEXUS ESTABLISHED OF SUCH PAPERS WITH THE ASSESSEE. MERE RES EMBLANCE OF NAME IN A LOOS E , UNSIGNED HAND WRITTEN SHEET FOUND AND SEIZED FROM A THIRD PARTY, HAVING NO CONNECTION WITH THE ASSESSEE, CANNOT BE THE BASIS TO FASTEN A BURDEN ON THE ASSESSEE, SO AS TO EXPLAIN THE SOURCE OF SUCH PURPORTED INVESTMENT. THE REVE NUE HAS FAILED TO LEAD ANY COGENT AND DIRECT EVIDENCE TO INCRIMINATE THE ASSESSEE WITH THE SAID ADDITIONS. THE AO HAS ALSO REFERRED TO A TYPED CHART PLACE D IN PB AT PG 57 TO 68 WHICH TOO HAS NOT BEEN ESTABLISHED TO HAVE ANY NEXUS WITH THE ASSESSEE. IN SUM AND SUBSTANCES, THE REVENUE DESPITE TWO ROUND OF PROCEEDINGS HAS NOT BROUGHT ON RECORD AN IOTA OF EVIDENCE SHOWING INVESTMENT BY THE ASSESSEE, SO AS TO MAKE THE IMPUGNED ADDITIONS. AT THIS JUNCTURE, WE CONSIDER IT APPROPRIATE TO EXTRACT THE DIRECTIONS OF T HE TRIBUNAL IN THE ORDER DATED 16.11.2011, WHICH ARE AS UNDER: - 11. WE, THEREFORE, RESTORE THIS MATTER BACK TO THE FILE OF THE ASSESSING OFFICER FOR HIS FRESH ADJUDICATION AFTER PROVIDING THE COPY OF STATEMENTS OF SHRI BRIJ MOHAN GUPTA AND OTHERS TO THE ASSESSEE, COPY OF INFORMATION RECEIVED FROM THE DCIT, CENTRAL CIRCLE - 19, NEW DELHI, COPY OF VARIOUS DOCUMENTS OR PAPERS FOUND DURING THE COURSE OF SEARCH RELATING TO PRESENT ASSESSEE AND AFTER PROVIDING AN OPPORTUNITY TO CROSS - EXAMINE THE PERSONS ON THE BASIS OF WHOSE STATEMENTS THE ADDITION WAS MADE. NEEDLESS TO SAY THAT THE ASSESSEE SHOULD BE GIVEN A REASONABLE OPPORTUNITY TO HAVE HIS SAY AND TO GIVE HIS REPLY AGAINST THE VARIOUS DOCUMENTS AND PAPERS OR THE PAGE 8 OF 9 STATEMENTS, OF THE PERSONS THAT MAY BE RELIED UPON BY THE ASSESSING OFFICER FOR THE ASSESSMENT. THE ASSESSEE SHALL B E AT LIBERTY TO FURNISH OR PRODUCE ANY SUCH OTHER EVIDENCE OR MATERIAL AVAILABLE WITH HIM TO SUPPORT HIS CASE, WHICH SHALL BE EXAMINED AND VERIFIED BY THE AO WHILE DECIDING THE MATTER AFRESH. THE A.O. SHALL PASS A REASONED AND SPEAKING ORDER AFTER ANALYZIN G AND CONSIDERING ALL THE EVIDENCES AND MATERIALS AVAILABLE WITH HIM. 20 . FROM THE ABOVE DIRECTIONS, IT IS EVIDENT THAT THE AO WAS DUTY BOUND TO PROVIDE OPPORTUNITY OF CROSS - EXAMINATION OF THE WITNESS WHO HAVE ALLEGED THAT THERE WAS INVESTMENT BY THE ASSE SSEE. HOWEVER, ADMITTEDLY NO SUCH CROSS - EXAMINATION HAS BEEN PROVIDED TO THE ASSESSEE. MOREOVER, EVEN FROM THE STATEMENT AS SUPPLIED TO THE ASSESSEE (PG 11 TO 43 OF PB) WE FIND THAT THERE IS NOTHING WHICH IMPLICATES THE ASSESSEE. THE ONLY NEXUS AS EMANATIN G FROM THE SAID STATEMENT IS RESTRICTED TO AN OBLIQUE REFERENCE TO ONE HARI SANKER KHEMKA, NARAYANA, IN THE STATEMENT OF SHRI RAM AVTAR GUPTA, ACCOUNTANT OF BM GROUP. THERE IS NOTHING TO ESTABLISH THAT THE SAID PERSON IS THE ASSESSEE, WHO DURING THE ASSES SMENT PROCEEDINGS HAVE DENIED THAT HE IS NOT THE PERSON REFERRED BY RAM AVATAR GUPTA. ADMITTEDLY, THE ASSESSEE IS NOT FROM NARAYANA, BUT FROM CLOTH MARKET DELHI. WE ARE THEREFORE PERSUADED TO CONCLUDE THAT THE REVENUE HAS MADE THE IMPUGNED ADDITION ON THE BASIS OF SURMISES, CONJECTURES AND SUSPICION AND THEREFORE THE SAME ARE DELETED. 21 . ACCORDINGLY THE GROUNDS ARE ALLOWED. 22 . IN THE RESULT THE APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 0 2 . 12 .2014. - S D / - - S D / - ( G. D. AGARWAL) (A. T. VARKEY) VICE PRESIDENT JUDICIAL MEMBER DATED : 0 2 / 12 / 2014 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) PAGE 9 OF 9 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI