Appeal details
Counselvise Citation
[2018] 126 COUNSELVISE.COM (IT) 1983 (ITAT-JAIPUR)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
10 month(s) 6 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
28-03-2018
Appeal Filed By
Assessee
Order Result
Partly Allowed
Bench Allotted
A
Assessment Year
2009-2010
Appeal Filed On
22-05-2017
Judgement Text
VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKWO] U;KF;D LNL; ,OA JH FOE FLAG ;K NO ] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM AND SHRI VIKRAM SING H YADAV, AM VK;DJ VIHY LA-@ ITA NO. 293, 408, 294 & 295/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2007-08, 09-10, 10-11 & 11-12. SHRI RAJENDRA KUMAR JAIN, D 23-25, PREM BHAWAN, LAL BAHADUR NAGAR, J.L.N. MARG, JAIPUR. CUKE VS. THE ACIT, CENTRAL CIRCLE-2, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AATPJ 5294 N VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 519, 520 & 521/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2007-08, 09-10 & 10-11. THE ACIT, CENTRAL CIRCLE-2, JAIPUR. CUKE VS. SHRI RAJENDRA KUMAR JAIN, D 23-25, PREM BHAWAN, LAL BAHADUR NAGAR, J.L.N. MARG, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AATPJ 5294 N VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI S.L. PODDAR (ADVOCATE) JKTLO DH VKSJ LS@ REVENUE BY : SHRI VARINDER MEHTA (CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 22.02.2018 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 28/03.2018. VKNS'K@ ORDER PER BENCH : THESE ARE THREE SETS OF CROSS APPEALS BY THE ASSESS EE AND REVENUE FOR THE ASSESSMENT YEARS 2007-08, 2009-10 AND 2010-11 AND A PPEAL BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2011-12 ARE DIRECTED AGAINST THE FO UR SEPARATE ORDERS OF LD. CIT (A), JAIPUR ALL DATED 31 ST MARCH, 2017. ALL THESE APPEALS WERE CLUBBED TOGET HER FOR HEARING AND FOR THE SAKE OF CONVENIENCE ARE BEING D ISPOSED OFF BY THIS COMPOSITE 2 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. ORDER. FIRST, WE WILL TAKE UP THE APPEAL FOR THE A SSESSMENT YEAR 2007-08. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN ITA NO . 293/JP/2017 :- 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED ASSESSING OFFICER HAS ERRED IN PASSING THE ORDER U/ S 147/143(3) OF THE INCOME TAX ACT, 1961. 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE TH E LEARNED ASSESSING OFFICER HAS ERRED IN REOPENING THE ASSESS MENT OF THE ASSESSEE WHEN THERE IS NO RELATION WITH THE ALLEGED LAND TRANSACTION OF THE ASSESSEE. 3. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE TH E LEARNED ASSESSING OFFICER HAS ERRED IN ENHANCING THE ADDITI ON TO RS. 1,13,00,000/- ON SUBSTANTIVE BASIS FROM RS. 1,24,99 ,000/- MADE BY THE LEARNED ASSESSING OFFICER ON PROTECTIVE BASI S WITHOUT BRINGING ANY MATERIAL ON RECORD ONLY ON THE BASIS O F STATEMENT OF SHRI MADAN MOHAN GUPTA WHICH WAS GIVEN ONLY TO S AVE HIMSELF FROM THE TAX LIABILITY. 4. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE TH E LEARNED ASSESSING OFFICER HAS ERRED IN GIVING THE FINDING T HAT THE LAND DEAL WAS MADE BY SHRI RAJENDRA KUMAR JAIN AND HE IS THE PERSON WHO PURCHASED THE LAND AND SOLD TO NAVRATAN KOTHARI AND VIMAL CHAND SURANA AND SHRI MADAN MOHAN GUPTA W AS ONLY NAME LENDER. 5. THE ASSESSEE CRAVES YOUR INDULGENCE TO ADD, AMEN D OR ALTER ALL OR ANY GROUNDS OF APPEAL BEFORE OR AT THE TIME OF H EARING. GROUND NOS. 1 & 2 ARE REGARDING VALIDITY OF REOPENI NG OF ASSESSMENT. 2. THE ASSESSEE IS AN INDIVIDUAL AND FILED HIS RETU RN OF INCOME ON 31.10.2007 DECLARING TOTAL INCOME OF RS. 29,04,041/-. SUBSEQU ENTLY, A SEARCH AND SEIZURE OPERATION UNDER SECTION 132 OF THE I.T. ACT WAS CON DUCTED ON RAJENDRA KUMAR JAIN GROUP AND HIS ASSOCIATE GROUP MEMBERS ON 23 RD MAY, 2013. DURING THE COURSE OF SEARCH AND SEIZURE OPERATION VARIOUS INCRIMINATING DOCUMENTS WERE FOUND AND SEIZED 3 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. WHICH WERE INVENTORIZED AS EXHIBIT-1 TO 5 OF ANNEXU RE-AS. THESE DOCUMENTS WERE SEIZED FROM THE RESIDENCE AND BUSINESS PREMISES OF ONE SHRI MADAN MOHAN GUPTA STATED TO BE AN ASSOCIATE OF SHRI RAJENDRA KUMAR JA IN. AS PER THE SEIZED DOCUMENTS EXHIBIT-1, 2 & 5, LAND TRANSACTIONS WERE FOUND IN R ESPECT OF LAND AT VILLAGE CHAINPURA, BEHIND EP LAND. THE STATEMENT OF SHRI MA DAN MOHAN GUPTA WAS RECORDED UNDER SECTION 132(4) WHEREIN HE HAS STATED THAT A S UM OF RS. 96,00,000/- HAS BEEN GIVEN BY THE ASSESSEE BY CHEQUE AND FURTHER AMOUNT OF RS. 3-4 CRORES IN CASH FOR PURCHASE OF THE SAID LAND DURING THE PERIOD AUGUST, 2006 TO NOVEMBER, 2006 PERTAINING TO THE ASSESSMENT YEAR 2007-08. THE AO NOTED THAT AS PER THE SEIZED DOCUMENTS, A SUM OF RS. 6,59,00,000/- IS SHOWN TO H AVE BEEN RECEIVED BY SHRI MADAN MOHAN GUPTA FROM THE ASSESSEE AS WELL AS A SU M OF RS. 5,00,00,000/- HAS BEEN SHOWN AS RECEIVED BY THE ASSESSEE FROM CERTAIN PERSONS. SINCE THE ASSESSMENT YEAR 2007-08 IS BEYOND 6 YEARS FROM THE DATE OF SEARCH AND, THEREFORE, THE AO APART FROM INITIATING THE PROCEEDINGS UNDER SECTION 153A IN RESPECT OF OTHER ASSESSMENT YEARS HAS PROPOSED TO REOPEN THE ASSESSM ENT FOR THE ASSESSMENT YEAR 2007-08 BY ISSUING NOTICE UNDER SECTION 148 ON 25 TH MARCH, 2014. THE ASSESSEE RAISED OBJECTION AGAINST THE NOTICE ISSUED UNDER SE CTION 148 VIDE LETTER DATED 8.12.2014. THE AO DISPOSED OFF THE OBJECTIONS OF T HE ASSESSEE VIDE ORDER DATED 05.01.2015 AND THEREAFTER COMPLETED THE REASSESSMEN T UNDER SECTION 147 READ WITH SECTION 143(3) ON 30.03.2015. THE ASSESSEE CHALLEN GED THE ACTION OF THE AO BEFORE LD. CIT (A) AND RAISED THE OBJECTION AGAINST THE RE OPENING OF THE ASSESSMENT BUT COULD NOT SUCCEED. 3. BEFORE US, THE LD. A/R OF THE ASSESSEE HAS SUBMI TTED THAT THE REASONS RECORDED BY THE AO FOR REOPENING OF THE ASSESSMENT ARE VAGUE, BASELESS AND 4 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. WITHOUT ANY CREDIBLE TANGIBLE EVIDENCE OR MATERIAL TO FORM THE BELIEF THAT INCOME OF RS. 11.59 CRORES HAS ESCAPED ASSESSMENT. HE HAS FU RTHER SUBMITTED THAT THE REASONS RECORDED BY THE AO ARE BASED ON PRESUMPTION AND SURMISES AND THE AO HAS FINALLY MADE ADDITION OF RS. 1,24,99,000/- ON PROTE CTIVE BASIS WHICH SHOWS THAT THERE WAS NO MATERIAL TO ARRIVE AT A DEFINITE BELIEF THAT THE INCOME OF RS. 11.59 CRORES HAS ESCAPED ASSESSMENT. THE LD. A/R HAS FURTHER SUBMIT TED THAT THOUGH THE LD. CIT (A) HAS CONVERTED PROTECTIVE ASSESSMENT INTO SUBSTANTIV E BUT TO THE EXTENT OF RS. 1,13,00,000/-. THEREFORE, THE AO WAS HAVING NO REA SON TO BELIEVE THAT AN INCOME OF RS. 11.59 CRORES HAS ESCAPED ASSESSMENT. THE LD. A /R HAS FURTHER SUBMITTED THAT THE LAND TRANSACTION ALLEGED BY THE AO HAS NO CONNE CTION WITH THE ASSESSEE AS THERE WAS NO SUCH TRANSACTION BETWEEN THE ASSESSEE AND SH RI MADAN MOHAN GUPTA OR THROUGH SHRI MADAN MOHAN GUPTA. THE SEIZED MATERIA L AS REFERRED BY THE AO DOES NOT SHOW ANY SUCH TRANSACTION BETWEEN THE ASSESSEE AND SHRI MADAN MOHAN GUPTA OR ANY TRANSACTION OF PURCHASE OF LAND BY THE ASSES SEE OTHERWISE. THE AO HAS MADE ADDITION ON PROTECTIVE BASIS WHICH HAS NO RELEVANCE WITH THE REASONS RECORDED FOR REOPENING OF THE ASSESSMENT. THUS WHEN NO ADDITION WAS MADE WITH REFERENCE TO THE REASONS RECORDED, THEN THE AO IS PRECLUDED IN M AKING ANY OTHER ADDITION WHILE FRAMING THE REASSESSMENT. IN SUPPORT OF HIS CONTENT ION HE HAS RELIED UPON THE DECISION OF HONBLE MADRAS HIGH COURT IN CASE OF MA RTECH PERIPHERALS PVT. LTD. VS. DCIT (2017) 151 DTR 313 (MADRAS) AND SUBMITTED THAT THE REASSESSMENT IS NOT VALID WHEN NO ADDITION IS MADE ON THE REASONS RECOR DED BY THE AO. HE HAS ALSO RELIED UPON THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. RAM SINGH 220 CTR 629 (RAJ.). THE LD. A/R HAS REFE RRED TO THE OBJECTIONS RAISED AGAINST THE NOTICE ISSUED UNDER SECTION 148 AND SUB MITTED THAT THE ASSESSEE HAS 5 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. RAISED SPECIFIC OBJECTION THAT THE LAND IN QUESTION WAS PURCHASED IN THE NAME OF M/S. KALYAN BUILDMART PVT. LTD. THROUGH ITS DIRECTOR SHR I MADAN MOHAN GUPTA, WHO IS THE PROMOTER, DIRECTOR AND SHAREHOLDER OF THE COMPANY A LONG WITH HIS WIFE SMT. SHASHI KALA GUPTA. THEREFORE, THE ASSESSEE HAS NOTHING TO DO WITH THE SAID COMPANY OR THE TRANSACTION OF PURCHASE OF CHAINPURA LAND AS THE SA ME WAS PURCHASED BY THE COMPANY M/S. KALYAN BUILDMART PVT. LTD. EVEN THEREA FTER THE SAID COMPANY WAS TRANSFERRED TO SHRI NAVRATAN KOTHARI AND SHRI PRAKA SH CHAND KOTHARI BY TRANSFER OF SHARES BY SHRI MADAN MOHAN GUPTA AND HIS WIFE. THE REFORE, AT NO POINT OF TIME THE ASSESSEE HAS ANY INTEREST IN THE SAID COMPANY EITHE R BEFORE PURCHASE OF LAND OR AFTER PURCHASE OF LAND. THE STATEMENT OF SHRI MADAN MOHAN GUPTA WAS CONTRARY TO THE ACTUAL FACTS OF TRANSACTION OF PURCHASE AND SAL E OF LAND AND THE SAME WAS MADE ONLY TO SAVE HIMSELF AND TO PROTECT HIS OWN BLACK M ONEY FOR THE PURCHASE AND SALE OF LAND THROUGH M/S. KALYAN BUILDMART PVT. LTD. WHI CH WAS FINALLY TRANSFERRED TO KOTHARI BROTHERS. THE LD. A/R HAS REFERRED TO THE SEIZED MATERIALS AT PAGES 16-21 OF THE PAPER BOOK AND SUBMITTED THAT THE DATE OF TRANS ACTION AS PER THE SEIZED DOCUMENTS DO NOT FALL IN THIS ASSESSMENT YEAR AND, THEREFORE, EVEN AS PER THE SEIZED MATERIALS THE TRANSACTION DO NOT PERTAIN TO THE YEA R UNDER CONSIDERATION AND HENCE THE REOPENING IS WITHOUT ANY BASIS BUT MERELY ON TH E BASIS OF PRESUMPTION AND ASSUMPTION BY THE AO RELYING ON THE STATEMENT OF SH RI MADAN MOHAN GUPTA. EVEN OTHERWISE THE SEIZED MATERIALS DO NOT SPECIFY ANY E NTRY RELATING TO THE ASSESSEE AND PERTAINS TO THE YEAR UNDER CONSIDERATION. NO ENQUI RY WAS CONDUCTED BY THE AO PRIOR TO ISSUING THE NOTICE UNDER SECTION 148 OR INITIATI NG THE PROCEEDINGS FOR REOPENING OF THE ASSESSMENT. FURTHER, THE ADDITION ON PROTECTIV E BASIS BY THE AO WHICH CORROBORATES THE FACT THAT THE SEIZED MATERIALS DO NOT DISCHARGE ANY INCOME ESCAPED 6 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. ASSESSMENT IN THE HANDS OF THE ASSESSEE. IN SUPPOR T OF HIS CONTENTION, HE HAS RELIED UPON THE DECISION OF HONBLE SUPREME COURT IN THE C ASE OF GANGA SARAN & SONS PVT. LTD. VS. ITO, 130 ITR 1 (SC) AND SUBMITTED THAT THE HONBLE SUPREME COURT HAS HELD THAT ACTION UNDER SECTION 148 IS NOT WARRANTED ON M ERE SUSPICION OR RUMOR. SIMILARLY IN THE CASE OF PHOOLCHAND BAJRANG LAL VS. CIT, 203 ITR 456 (SC), THE HONBLE SUPREME COURT HAS HELD THAT IT IS OPEN TO THE ASSES SEE TO ESTABLISH THAT THERE IN FACT EXISTED NO BELIEF AND THE BELIEF WAS NOT BONAFIDE O NE OR BASED ON VAGUE, IRRELEVANT AND NO SPECIFIC INFORMATION. HENCE, THE LD. A/R HA S SUBMITTED THAT THE AO WAS UNABLE TO SUBSTANTIATE INFORMATION/BELIEF OF ESCAPE MENT OF INCOME OF RS.11.59 CRORES AS IN THE REASSESSMENT PROCEEDINGS HE HAS MA DE AN ADDITION OF RS. 1.47 CRORE ON PROTECTIVE BASIS. IN SUPPORT OF HIS CONTE NTION, HE HAS RELIED UPON THE DECISION OF BANGALORE BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS. BULLION INVESTMENTS & FINANCIAL SERVICES PVT. LTD. 29 DTR 3 25 AS WELL AS DECISION IN THE CASE OF SMT. FARZANA F. DESAI VS. ACIT, 14 DTR 552 AND S UBMITTED THAT WHEN THE AO HAS FINALLY MADE THE ASSESSMENT ON PROTECTIVE BASIS THE N IN THE ABSENCE OF ANY POSITIVE OR SUBSTANTIVE SATISFACTION, THE REOPENING OF THE A SSESSMENT IS BAD. 3.1. ON THE OTHER HAND, THE LD. D/R HAS SUBMITTED T HAT THE AO HAS ANALYZED THE SEIZED MATERIALS AS PER ANNEXURE-AS AND ALSO CONSID ERED THE STATEMENT OF SHRI MADAN MOHAN GUPTA WHEREIN IT WAS STATED THAT THE TR ANSACTIONS RECORDED IN THE SEIZED MATERIALS ARE LAND TRANSACTION AT VILLAGE CH AINPURA BEHIND EP, JAIPUR ON BEHALF OF THE ASSESSEE AND THE ASSESSEE HAS PROVIDED THE M ONEY FOR THE TRANSACTION. SHRI MADAN MOHAN GUPTA HAS SPECIFICALLY STATED THAT THE DEAL WAS FINALIZED AT RS. 12,43,27,000/-, OUT OF WHICH DISCOUNT OF 1% WAS ALL OWED FOR REGISTRATION OF LAND. 7 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. THEREFORE, RS. 12,30,84,000/- WERE NET PAYABLE TO T HE SELLER AND THE DETAILS OF THE SAME HAVE BEEN RECORDED ON PAGES 15-18 OF EXHIBIT-1 OF ANNEXURE-A FOUND AND SEIZED FROM THE RESIDENCE OF SHRI MADAN MOHAN GUPTA . THIS LAND WAS PURCHASED DURING THE ASSESSMENT YEAR 2006-07 AND SUBSEQUENTLY SOLD TO SHRI NAVRATAN KOTHARI AND SHRI VIMAL CHAND SURANA IN THE MONTH OF MARCH, 2007. THE DETAILS OF THE TRANSACTION HAS BEEN RECORDED AT PAGES 27 & 28 OF E XHIBIT OF ANNEXURE-A. IN THE LIGHT OF THE STATEMENT OF SHRI MADAN MOHAN GUPTA, S TATEMENT OF THE ASSESSEE WERE ALSO RECORDED ON OATH ON 16.08.2013 AND THE ASSESSE E WAS CONFRONTED WITH THE SEIZED MATERIALS PARTICULARLY PAGES 15 TO 20 OF EXH IBIT-1 OF ANNEXURE-A. THEREFORE, THE AO CONDUCTED THE ENQUIRY BEFORE ISSUING THE NOT ICE UNDER SECTION 148. THE LD. D/R HAS FURTHER CONTENDED THAT TO ACQUIRE THE LAND IN QUESTION, A COMPANY WAS FORMED ON BEHALF OF THE ASSESSEE AND ENTIRE PURCHAS E CONSIDERATION WAS PAID BY THE ASSESSEE. THERE IS NO DISPUTE ABOUT THE AMOUNT PAID BY THE ASSESSEE THROUGH CHEQUE THROUGH SHRI MADAN MOHAN GUPTA. HOWEVER, TH E ONLY DISPUTE IS REGARDING THE CASH PAYMENT FOR THE SAID LAND TRANSACTION. TH US THE LD. D/R HAS SUBMITTED THAT AT THE TIME OF INITIATING THE PROCEEDINGS FOR REOPE NING OF THE ASSESSMENT WHAT IS REQUIRED IS TO FORM A BELIEF ON PRIMA FACIE BASIS T HAT THE INCOME ASSESSABLE TO TAX HAS ESCAPED ASSESSMENT AND THE AO IS NOT REQUIRED T O PROVE THE CORRECTNESS OF THE REASONS AND MATERIAL ON THE BASIS OF WHICH HE HAS F ORMED THE BELIEF. HE HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 8 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD. THE AO HAS CONSIDERED THE SEIZED MATERIAL, THE DETAILS OF WHICH ARE AS UNDER :- SR. ANNEXURE NO. & EXHIBIT NO. PAGE NO. FOUND/SEIZED FROM 1. ANNEXURE A EXHIBIT -1 15 TO 24, 27, 28, 43, 44 AND 69 TO 74 RESIDENTIAL PREMISES 2. ANNEXURE - A EXHIBIT-2 47 AND BACK SIDE OF 48, 50 TO 54 RESIDENTIAL PREMISES 3. ANNEXURE - A EXHIBIT-5 1 TO 77 RESIDENTIAL PREMISES 4. ANNEXURE0 AS EXHIBIT-1 1 TO 3, 7, 9, 10 OFFICE PREMISES DURING THE SEARCH AND SEIZURE ACTION UNDER SECTION 132 OF THE ACT CARRIED ON 23 RD MAY, 2013 STATEMENT OF SHRI MADAN MOHAN GUPTA WAS R ECORDED WHEREIN HE HAS EXPLAINED THE TRANSACTIONS AS FOUND IN THE SEIZED M ATERIAL WHICH IS A DIARY MAINTAINED BY SHRI MADAN MOHAN GUPTA. HE HAS STATE D THAT THE TRANSACTIONS AS PER THESE ENTRIES RECORDED IN THE SEIZED MATERIAL PERTA IN TO THE LAND DEAL AT VILLAGE CHAINPURA BEHIND EP JAIPUR WHICH WAS PURCHASED BY T HE ASSESSEE THROUGH SHRI MADAN MOHAN GUPTA. THUS SHRI MADAN MOHAN GUPTA HAS STATED IN THE STATEMENT THAT THE ENTIRE PURCHASE CONSIDERATION WAS GIVEN BY THE ASSESSEE TO HIM FOR PURCHASE OF THE SAID LAND. THE AO ACCORDINGLY PROPO SED TO REOPEN THE ASSESSMENT BY RECORDING REASONS AS UNDER :- 9 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. DURING THE COURSE SEARCH AND SEIZURE OPERATION IN THE CASE OF RAJENDRE JAIN GROUP DOS 23-05-2013 CERTAIN INCREMEN TING DOCUMENT WERE FOUND AND SEIZED WHICH WERE INVENTORIES AS EXH IBIT 1 TO 5 OF ANNEXURE AS. CERTAIN PAGES OF EXHIBIT 1, 2 & 5 SEI ZED FROM THE RESIDENTIAL AND OFFICE PREMISE ARE RELATED A LAND T RANSACTION AT CHAINPURA BEHIND EP. IN RESPECT OF SUCH LAND TRANS ACTION, SHRI MADAN MOHAN GUPTA A CLOSE ASSOCIATE OF THE ASSESSEE HAS G IVEN A STATEMENT ON RECORD THAT A SUM OF RS. 96 LACS HAD BEEN GIVEN BY THE ASSESSEE BY CHEQUE AND FURTHER AMOUNT OF RS. 3-4 CRORES IN CASH FOR PURCHASE OF THE SAID LAND DURING THE PERIOD AUGUST 2006 TO NOV 2006 PERTAINING TO AY 2007-08. FURTHER AS PER THE SEIZED DOCUMENTS IT IS SEEN THAT A SUM OF RS. 6,59,00,000/- IS SHOWN TO HAVE BEEN RECEIVED FROM THE ASSESSEE BY SHRI MADAN MOHAN GUPTA. IN ADDITION TO THIS, A S UM OF RS. 5,00,00,000/- HAS BEEN SHOWN AS RECEIVED BY THE ASS ESSEE FROM CERTAIN PERSONS. IN THE SURRENDER OF INCOME MADE BY THE ASSESSEE SUCH AMOUNT HAVE NOT BEEN INCLUDED. I HAVE THUS REASON TO BELIEVE THAT INCOME TO THE EXTENT OF RS. 11,59,00,000/- HAS ESCA PED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE I.T. ACT, 1961. THUS THE AO HAS RECORDED THE REASONS THAT AS PER TH E SEIZED MATERIAL EXHIBIT 1-5 OF ANNEXURE-AS AND PARTICULARLY PAGES OF EXHIBIT 1-5 S EIZED FROM THE RESIDENTIAL AND OFFICE PREMISES OF SHRI MADAN MOHAN GUPTA, A LAND T RANSACTION AT VILLAGE CHAINPURA BEHIND EP WAS FOUND AS PURCHASED BY THE ASSESSEE TH ROUGH SHRI MADAN MOHAN GUPTA. THE AO HAS GIVEN THE DETAILS OF THE AMOUNT AS FOUND RECORDED IN THE SEIZED 10 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. MATERIAL AND FORMED THE BELIEF THAT THE INCOME OF R S. 11.59 CRORES HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE ACT. THERE IS NO DISPUTE THAT AT THE TIME OF INITIATION OF PROCEEDINGS UNDER SECT ION 147/148 WHAT IS REQUIRED IS A PRIMA FACIE REASON TO BELIEVE THAT AN INCOME HAS ES CAPED ASSESSMENT AND THE AO IS NOT REQUIRED TO ESTABLISH THE CORRECTNESS OF THE RE ASONS AT THAT STAGE. HOWEVER, THE REASON TO BELIEF MUST BE BASED ON SOME TANGIBLE MAT ERIAL OR INFORMATION WHICH HAS A DIRECT AND LIVE CONNECTION WITH THE INCOME WHICH HA S ESCAPED ASSESSMENT. THE WHOLE REASON TO BELIEF THAT INCOME HAS ESCAPED ASSE SSMENT TO THE EXTENT OF RS. 11.59 CRORES IS BASED ON THE SEIZED MATERIAL AS PER PAGES OF EXHIBIT-1, 2 & 5 AND STATEMENT OF SHRI MADAN MOHAN GUPTA. THUS IT IS RE LEVANT TO SEE WHETHER THE SEIZED MATERIAL HAS A DIRECT CONNECTION TO INDICATE THAT A N INCOME ASSESSABLE TO TAX HAS ESCAPED ASSESSMENT. THE DOCUMENTS AS REFERRED BY T HE AO IN THE REASONS RECORDED ARE THE PAGES OF THE DIARY IN WHICH VARIOUS TRANSAC TIONS ARE RECORDED IN THE NAME OF DIFFERENT PERSONS AND AGAINST SPECIFIC DATES. THE RELEVANT PAGES AS REFERRED BY THE AO ARE PLACED AT PAGES 16 TO 21 OF THE PAPER BOOK W HICH ARE AS UNDER :- 11 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. 12 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. 13 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. 14 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. 15 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. 16 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. 17 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. IT IS EVIDENT FROM THE ENTRIES RECORDED IN THE SEIZ ED MATERIAL THAT ALL THESE ENTRIES ARE STARTED FROM 31 ST DECEMBER, 2007 ONWARDS AND SUBSEQUENT ENTRIES IN T HE YEAR 2008, 2009 AND 2010. IN MOST OF THE ENTRIES SPECI FIC NAME THOUGH THE INITIALS WERE MENTIONED AND, THEREFORE, THESE ARE NOT IN THE NAME OF THE ASSESSEE. THUS FROM THE SEIZED MATERIAL WHICH IS REFERRED BY THE AO IN THE REASONS RECORDED, THERE IS NOTHING TO DISCLOSE ANY ENTRY OF PAYMENT OF MONEY BY THE AS SESSEE TO SHRI MADAN MOHAN GUPTA DURING THE YEAR UNDER CONSIDERATION. ONCE TH E ENTRIES RECORDED IN THE SEIZED MATERIAL DO NOT PERTAIN TO THE YEAR UNDER CONSIDERA TION THEN THE STATEMENT OF SHRI MADAN MOHAN GUPTA CANNOT BE RELIED UPON WITHOUT ANY CORROBORATING EVIDENCE AND SPECIFICALLY WHEN THE TRANSACTION OF LAND IS OTHERW ISE NOT IN DISPUTE AS IT WAS FINALLY PURCHASED BY SHRI MADAN MOHAN GUPTA THROUGH HIS COM PANY, NAMELY M/S. KALYAN BUILTMART PVT. LTD. THIS FACT IS DULY ACKNOWLEDGED BY THE AO EVEN IN THE ASSESSMENT ORDER. IT IS PERTINENT TO NOTE THAT AFTER THE SAID LAND TRANSACTION AT VILLAGE CHAINPURA, TEHSIL SANGANER, BEHIND EP PURCHASED IN THE NAME OF M/S. KALYAN BUILTMART PVT. LTD., SHRI MADAN MOHAN GUPTA AND HIS WIFE SMT. SHASHI GUPTA SOLD THE SHARES OF THE SAID COMPANY TO SHRI NAVRATAN KOT HARI, SHRI VIMAL CHAND SURANA HUF AND SHRI KAUSHAL CHAND SURANA ON 24.8.2006. TH EREFORE, THE ENTRIES RECORDED IN THE SEIZED MATERIAL DO NOT MATCH WITH THE TRANSA CTION OF PURCHASE WITH THE LAND IN QUESTION THOUGH IN THE NAME OF M/S. KALYAN BUILTMAR T PVT. LTD. AS ALL THESE ENTRIES ARE IN THE SUBSEQUENT YEARS WHEREAS THE TRANSACTION OF PURCHASE OF THE SAID LAND IN THE NAME OF M/S. KALYAN BUILTMART PVT. LTD., THE SH ARES OF THE SAID COMPANY WAS SUBSEQUENTLY SOLD TO SHRI NAVRATAN KOTHARI, SHRI VI MAL CHAND SURANA HUF AND SHRI KAUSHAL CHAND SURANA. THE TRANSACTION OF PURCHASE OF THE LAND IN QUESTION BY M/S. 18 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. KALYAN BUILTMART PVT. LTD. AND SUBSEQUENT SALE OF T HE SAID COMPANY WERE COMPLETED MUCH PRIOR TO THE ALLEGED TRANSACTION AS RECORDED I N THE SEIZED MATERIAL. THEREFORE, WITHOUT GOING INTO THE ISSUE WHETHER THESE TRANSACT IONS ARE IN THE NAME OF THE ASSESSEE OR NOT AS RECORDED IN THE SEIZED MATERIAL, WHEN THESE TRANSACTIONS DO NOT MATCH WITH THE TRANSACTION OF PURCHASE AND SALE OF LAND AND FURTHER DO NOT PERTAIN TO THE YEAR UNDER CONSIDERATION THEN THERE WAS NO T ANGIBLE MATERIAL, RATHER THE REASON TO BELIEF THAT AN INCOME OF RS. 11.59 CRORES ESCAPED ASSESSMENT IS CONTRARY AND INCONSISTENT TO THE DETAILS AS RECORDED IN THE SEIZED MATERIAL. THE AO PRIOR TO ISSUING NOTICE UNDER SECTION 148 HAS RECORDED THE S TATEMENT OF THE ASSESSEE AND AS PER PARA 6 OF THE ASSESSMENT ORDER THE AO HAS GIVEN THE BASIS OF THE STATEMENT OF THE ASSESSEE WHEREIN THE ASSESSEE HAS SPECIFICALLY DENIED ANY LAND TRANSACTION AS ALLEGED BY THE AO. THE ASSESSEE HAS ALSO DENIED AN Y RELATION WITH M/S. KALYAN BUILTMART PVT. LTD. OR HAS GIVEN ANY MONEY OR LOAN TO THE SAID COMPANY. THE AMOUNT PAID THROUGH CHEQUE TO SHRI MADAN MOHAN GUPTA ALSO DOES NOT PERTAIN TO THE YEAR UNDER CONSIDERATION AND, THEREFORE, WHEN THE PAYMEN T THROUGH CHEQUE WAS AT DIFFERENT POINT OF TIME AND IS NOT A PAYMENT MADE T O THE LAND OWNERS THEN ON THE BASIS OF MATERIAL WHICH WAS AVAILABLE BEFORE THE AO , IT CANNOT BE SAID THAT AN INCOME OF RS. 11.59 CRORES HAS ESCAPED ASSESSMENT F OR THE YEAR UNDER CONSIDERATION. FURTHER, THE AO WHILE FRAMING THE A SSESSMENT HAS MADE AN ADDITION OF RS. 1,24,99,000/- ON PROTECTIVE BASIS WHICH ITSE LF MANIFEST AND ESTABLISHED THE FACT THAT THE REASONS TO FORM THE BELIEF BY THE AO FOR REOPENING OF THE ASSESSMENT IS NOT BASED ON ANY TANGIBLE MATERIAL TO SHOW THAT THE INCOME ASSESSABLE TO TAX HAS ESCAPED ASSESSMENT. THUS IT IS CLEAR THAT THE AO H AS FORMED THE BELIEF ONLY ON PRESUMPTION AND NOT ON THE BASIS OF MATERIAL AS REF ERRED IN THE REASONS. THEREFORE, 19 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. THE REOPENING OF THE ASSESSMENT MERELY ON THE BASIS OF SUSPICION AND PRESUMPTION WHICH IS NOT SUPPORTED BY EVEN THE MATERIAL AS REFE RRED IN THE REASONS RECORDED AND AVAILABLE WITH THE AO THEN THE REOPENING OF THE ASS ESSMENT IS NOT VALID AND LIABLE TO BE QUASHED. WE ACCORDINGLY QUASH THE REOPENING OF T HE ASSESSMENT AS INVALID AND CONSEQUENTLY THE REASSESSMENT FRAMED IS ALSO SET AS IDE BEING NOT SUSTAINABLE. SINCE WE HAVE QUASHED THE REOPENING OF THE ASSESSMENT BEI NG NOT VALID, THEREFORE, THE OTHER GROUNDS RAISED BY THE ASSESSEE AS WELL AS THE CROSS APPEAL OF THE REVENUE HAVE BECOME INFRUCTUOUS AND ARE DISMISSED. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED AND APPEAL OF THE REVENUE IS DISMISSED. ITA NO. 408/JP/2017 (ASSESSEE) ITA NO. 520/JP/2017 (REVENUE) 6. THE ASSESSEE AS WELL AS THE REVENUE HAVE RAISED THE FOLLOWING GROUNDS : ITA NO. 408/JP/2017 (ASSESSEE): 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT (A) HAS ERRED IN CONFIRMING THE ACTION OF THE LEARN ED ASSESSING OFFICER IN PASSING THE ORDER U/S 143(3)/153A OF THE INCOME TAX ACT, 1961 WHICH IS VOID AB-INITIO DESERVES TO BE QU ASHED. 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE TH E LEARNED CIT (A) HAS ERRED IN MAKING A SEPARATE ADDITION TO RS. 50,00,000/- U/S 68 OF THE INCOME TAX ACT, 1961 ON SUBSTANTIVE B ASIS ON THE BASIS OF SAME PAPERS ON WHICH EARLIER PROTECTIVE AD DITION WAS MADE. 3. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE TH E LEARNED CIT (A) HAS ERRED IN GIVING THE FINDING THAT THE LAND D EAL WAS MADE BY SHRI RAJENDRA KUMAR JAIN AND HE IS THE PERSON WH O PURCHASED THE LAND AND SOLD TO NAVRATAN KOTHARI AND VIMAL 20 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. CHAND SURANA AND SHRI MADAN MOHAN GUPTA WAS ONLY NA ME LENDER. 4. THE ASSESSEE CRAVES YOUR INDULGENCE TO ADD, AMEN D OR ALTER ALL OR ANY GROUNDS OF APPEAL BEFORE OR AT THE TIME OF H EARING. ITA NO. 520/JP/2017 (REVENUE): 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT (A) WAS RIGHT IN NOT SUSTAINING THE ADDITION OF RS. 7,19,50,000/- MADE BY THE AO ON PROTECTIVE BASIS OR , ADDITION OF RS. 5,55,84,000/- ON SUBSTANTIVE BASIS AS RECOMM ENDED BY THE AO IN THE SUBSEQUENT REMAND REPORT. 2. THE APPELLANT CRAVE, LEAVE OR RESERVES THE RIGHT TO AMEND MODIFY, ALTER, ADD OR FOREGO ANY GROUND(S) OF APPEA L AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. GROUND NO. 1 OF ASSESSEES APPEAL IS REGARDING VALI DITY OF ASSESSMENT FRAMED UNDER SECTION 153A READ WITH SECT ION 143(3) OF THE IT ACT. 7. PURSUANT TO THE SEARCH UNDER SECTION 132 IN CASE OF ASSESSEE AND ITS ASSOCIATE GROUP ON 23 RD MAY, 2013, THE AO ISSUED NOTICE UNDER SECTION 153A ON 30 TH SEPTEMBER, 2014. IN RESPONSE TO THE NOTICE ISSUED UNDER SECTION 153A, THE ASSESSEE FILED HIS RETURN OF INCOME ON 15.11.2014 D ECLARING TOTAL INCOME OF RS. 2,53,87,070/- WHICH IS THE SAME AS DECLARED IN THE ORIGINAL RETURN OF INCOME FILED UNDER SECTION 139 ON 24.12.2009. THE AO STATED IN THE ORDER THAT DURING THE SEARCH AND SEIZURE ACTION ON 23 RD MAY, 2013 INCRIMINATING MATERIALS WERE FOUND IN TH E SHAPE OF PAPERS/BILLS/VOUCHERS/DIARY/REGISTER WHICH WERE SEIZED AND ANNEXED AS ANNEXURE A EXHIBIT 1-8. THE AO FURTHER NOTED THA T AS PER THE TRANSACTIONS RECORDED IN THE SEIZED PAPERS TO THE TUNE OF RS. 12,30,84,00 0/-, A SUM OF RS. 7,19,50,000/- 21 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. RELATES TO THE ASSESSMENT YEAR 2009-10 AND RS. 3,86 ,35,000/- RELATED TO ASSESSMENT YEAR 2010-11. SINCE THESE TRANSACTIONS WERE NOT RE CORDED IN THE BOOKS OF THE ASSESSEE BUT FOUND IN THE PAPERS AND SEIZED MATERIA L, THEREFORE, THE AO ISSUED A SHOW CAUSE TO THE ASSESSEE AS TO WHY THE AMOUNT OF RS. 7,19,50,000/- SHOULD NOT BE TREATED AS INCOME FOR THE ASSESSMENT YEAR 2009-1 0. THE ASSESSEE FILED HIS REPLY AND OBJECTED TO THE ADDITION. THE ASSESSEE DENIED H AVING ANY CONNECTION WITH THE ALLEGED LAND TRANSACTION AS FOUND RECORDED IN THE D IARY SEIZED FROM THE PREMISES OF SHRI MADAN MOHAN GUPTA. ACCORDINGLY, THE AO AFTER CONSIDERING THE FACTS, SUBSTANTIVE ADDITION OF THE AMOUNT HAS BEEN MADE IN THE HANDS OF SHRI MADAN MOHAN GUPTA AND PROTECTIVE ADDITION WAS MADE IN THE HANDS OF THE ASSESSEE. ON APPEAL, THE LD. CIT (A) HAS CONVERTED THE PROTECTIV E ADDITION INTO SUBSTANTIVE ADDITION IN THE HANDS OF THE ASSESSEE. 8. BEFORE US, THE LD. A/R OF THE ASSESSEE HAS SUBMI TTED THAT NO INCRIMINATING MATERIAL/DOCUMENT WAS FOUND DURING THE SEARCH FROM THE ASSESSEE OR HIS PREMISES. THE ALLEGED SEIZED MATERIAL WAS FOUND FROM THE RESI DENTIAL PREMISES OF SHRI MADAN MOHAN GUPTA AND, THEREFORE, THE SAME CANNOT BE A BA SIS FOR MAKING THE REASSESSMENT UNDER SECTION 153A. HE HAS FURTHER CO NTENDED THAT THERE IS NO SATISFACTION RECORDED EITHER BY THE AO HAVING JURIS DICTION OVER SHRI MADAN MOHAN GUPTA OR BY THE AO OF THE ASSESSEE FOR INITIATING T HE PROCEEDINGS UNDER SECTION 153A. THUS THE LD. A/R HAS SUBMITTED THAT THE ASSE SSMENT FRAMED UNDER SECTION 153A IS INVALID WHEN THERE WAS NO MATERIAL EITHER F OUND OR SEIZED FROM THE POSSESSION OF THE ASSESSEE AND THE MATERIAL FOUND A ND SEIZED FROM THE POSSESSION OF SHRI MADAN MOHAN GUPTA IS NOT RELATED TO THE ASSESS EE OR DISCLOSED ANY UNDISCLOSED INCOME BELONGING TO THE ASSESSEE. THIS FACT IS COR ROBORATED BY THE FINDING OF THE AO 22 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. IN THE ASSESSMENT ORDER WHEN ONLY A PROTECTIVE ADDI TION WAS MADE IN THE HANDS OF THE ASSESSEE. THE LD. A/R HAS FURTHER SUBMITTED TH AT THE ASSESSMENT FOR THE YEAR UNDER CONSIDERATION WAS NOT PENDING AS ON THE DATE OF SEARCH AND THEREFORE, IN THE ABSENCE OF ANY INCRIMINATING MATERIAL, NO ADDITION CAN BE MADE IN THE REASSESSMENT PROCEEDINGS UNDER SECTION 153A OF THE ACT. THE LD. A/R HAS FURTHER POINTED OUT THAT THOUGH THE LD. CIT (A) IN HIS ORDER FINALLY DECIDED THE APPEAL OF THE ASSESSEE AND DELETED THE PROTECTIVE ADDITION MADE BY THE AO OF R S. 7,19,50,000/-, HOWEVER, THE LD. CIT (A) HAS FINALLY SUSTAINED THE ADDITION OF R S. 50,00,000/- ON SUBSTANTIVE BASIS WHICH HAS NO BASIS WHEN THE ADDITION MADE BY THE AO WAS NOT FOUND TO BE SUSTAINABLE. THUS THE LD. A/R HAS SUBMITTED THAT TH E ASSESSMENT ORDER COMPLETED UNDER SECTION 153A IS NOT SUSTAINABLE IN LAW AND IS LIABLE TO BE QUASHED. 8.1. ON THE OTHER HAND, THE LD. D/R HAS VEHEMENTLY OPPOSED THE CONTENTION OF THE ASSESSEE AND SUBMITTED THAT ONCE A SEARCH IS CARRIE D OUT IN THE CASE OF THE ASSESSEE UNDER SECTION 132 OF THE ACT, THE AO IS BOUND TO AS SESS OR REASSESS THE INCOME OF THE ASSESSEE FOR 6 ASSESSMENT YEARS IMMEDIATELY PRE CEDING TO THE YEAR IN WHICH SEARCH IS CARRIED OUT. HE HAS FURTHER CONTENDED THA T WHEN THE AO HAS REFERRED VARIOUS SEIZED DOCUMENTS AND PARTICULARLY EXHIBITS AND ANNEXURES AS REFERRED IN THE ASSESSMENT ORDER THEN IT IS NOT THE CASE OF INCRIMI NATING MATERIAL FOUND OR SEIZED DURING THE SEARCH AND SEIZURE ACTION. HE HAS RELIE D UPON THE ORDER OF THE AO. HE HAS FURTHER SUBMITTED THAT THE LD. CIT (A) IS NOT J USTIFIED IN DELETING THE ADDITION MADE BY THE AO AND SUSTAINING ONLY RS. 50,00,000/-. HE HAS FURTHER SUBMITTED THAT IN THE REMAND REPORT, THE AO HAS CLEARLY MADE OUT A N ADDITION OF RS. 5,55,84,000/- AND RECOMMENDED THE SAME FOR SUBSTANTIVE BASIS. 23 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THERE IS NO DISPUTE THAT A SEARCH AND SEIZU RE ACTION UNDER SECTION 132 WAS CARRIED OUT IN THE CASE OF THE ASSESSEE AND GROUP/A SSOCIATES OF THE ASSESSEE. THEREFORE, WHEN THE SEARCH ACTION WAS TAKEN IN THE CASE OF THE ASSESSEE, THEN AS PER THE PROVISIONS OF SECTION 153A THE AO IS BOUND TO ASSESS OR REASSESS THE INCOME OF THE ASSESSEE FOR 6 ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SEARCH WAS C ONDUCTED OR REQUISITION WAS MADE. THERE IS NO DISPUTE THAT THE ASSESSMENT YEAR UNDER CONSIDERATION IS FALLING WITHIN THE 6 ASSESSMENT YEARS AS PROVIDED UNDER SEC TION 153A AND, THEREFORE, THE INITIATION OF PROCEEDINGS UNDER SECTION 153A ARE VA LID AND PROPER. HOWEVER, THE QUESTION ARISES WHETHER THE AO IS JUSTIFIED IN MAKI NG THE ADDITION IN THE REASSESSMENT PROCEEDINGS IN THE ABSENCE OF ANY INCR IMINATING MATERIAL. WE HAVE DISCUSSED THIS ISSUE OF NATURE OF INCRIMINATING MAT ERIAL AS ALLEGED BY THE AO WHILE DECIDING THE CROSS APPEALS FOR THE ASSESSMENT YEAR 2007-08 AND FOUND THAT THE ENTIRE MATERIAL FOUND AND SEIZED FROM THE RESIDENTI AL AND BUSINESS PREMISES OF SHRI MADAN MOHAN GUPTA DOES NOT REVEAL ANY TRANSACTION B Y THE ASSESSEE FOR PURCHASE OF LAND IN QUESTION. FURTHER THE TRANSACTION AS RE CORDED IN THE SEIZED MATERIAL CLEARLY REVEALS THAT THERE IS NO CONNECTION OF THES E ENTRIES MADE IN THE DIARY FOUND AND SEIZED DURING THE COURSE OF SEARCH AND SEIZURE ACTION AND THE ACTUAL TRANSACTION OF PURCHASE OF LAND IN THE NAME OF SHRI KALYAN BUIL DMART PVT. LTD. OWNED BY SHRI MADAN MOHAN GUPTA AND HIS WIFE SMT. SHASHI KALA GUP TA. WHILE DECIDING THESE APPEALS FOR THE ASSESSMENT YEAR 2007-08, WE HAVE CO NSIDERED ALL THESE DETAILS AND FACTS AS EMERGING FROM THE RECORD AS WELL AS FROM T HE SEIZED MATERIAL AND FOUND THAT THERE IS NO DIRECT CONNECTION BETWEEN THE TRANSACTI ONS FOUND IN THE SEIZED DIARY AND 24 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. THE TRANSACTION OF PURCHASE AND SALE OF THE LAND AT VILLAGE CHAINPURA BEHIND EP, TEHSIL SANGANER, JAIPUR. EVEN THE SAID COMPANY SHR I KALYAN BUILDMART PVT. LTD. WAS SUBSEQUENTLY PURCHASED BY SHRI NAVRATAN KOTHARI, SH RI VIMAL CHAND SURANA HUF AND SHRI KAUSHAL CHAND SURANA BY WAY OF TRANSFER OF SHA RES BY SHRI MADAN MOHAN GUPTA AND HIS WIFE. THEREFORE, FROM THE SEIZED MATERIAL THERE IS NOTHING TO INDICATE OR DISCLOSE ANY INVOLVEMENT OF THE ASSESSEE DIRECTLY O R INDIRECTLY IN THE TRANSACTION OF PURCHASE OF THE LAND IN QUESTION AND SUBSEQUENTLY T HE COMPANY SHRI KALYAN BUILDMART PVT. LTD. WAS TRANSFERRED TO SHRI NAVRATA N KOTHARI, SHRI VIMAL CHAND SURANA HUF AND SHRI KAUSHAL CHAND SURANA. THE OWNE RSHIP OF THE SAID COMPANY WAS NOT DISPUTED AS OWNED BY SHRI MADAN MOHAN GUPTA AND HIS WIFE AND SUBSEQUENTLY WAS TRANSFERRED TO THESE PERSONS, NAME LY, SHRI NAVRATAN KOTHARI AND OTHERS. EVEN IN THE TRANSACTION OF TRANSFER OF THE SAID COMPANY, THE ROLE OF THE ASSESSEE WAS NOT VISIBLE AND FOUND MUCH LESS THE PU RCHASE AND SALE OF THE LAND IN QUESTION. THEREFORE, IN THE ABSENCE OF ANY INCRIMI NATING MATERIAL WHICH LED TO DISCLOSURE OF ANY UNDISCLOSED INCOME BELONGING TO T HE ASSESSEE, THE AO CANNOT REASSESS THE INCOME OF THE ASSESSEE MORE THAN THE I NCOME WHICH WAS ASSESSED ON THE ORIGINAL RETURN OF INCOME. ACCORDINGLY, WE WIL L DEAL WITH THIS ISSUE WHILE CONSIDERING THE GROUND NO. 2 OF THE ASSESSEES APPE AL AND THE GROUND RAISED BY THE REVENUE IN THE CROSS APPEAL. 10. GROUND NO. 2 & 3 OF THE ASSESSEE AND GROUND OF THE REVENUE ARE REGA RDING THE ADDITION OF RS. 50,00,000/- SUSTAINED BY LD. CI T (A) UNDER SECTION 68 OF THE IT ACT. THIS GROUND IS COMMON AS THE REVENUE HAS ALSO CHALLENGED THE IMPUGNED ORDER OF THE LD. CIT (A) TO THE EXTENT OF THE ADDITION DE LETED BY LD. CIT (A). THE LD. A/R OF THE ASSESSEE HAS SUBMITTED THAT THE ADDITIONS SUSTA INED BY LD. CIT (A) IS BASED ON 25 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. THE WRONG PRESUMPTION AND ASSUMPTION OF THE FACT AS THERE WAS NO SUCH ADDITION MADE BY THE AO IN THE ASSESSMENT ORDER WHEREAS THE ADDITION MADE BY THE AO ON PROTECTIVE BASIS HAS BEEN DELETED BY THE LD. CIT (A ) AND, THEREFORE, THE SUBSEQUENT ADDITION OF RS. 50,00,000/- IS NOT SUSTAINABLE AS I T IS NOT BASED ON ANY MATERIAL OR EVIDENCE. THE LD. CIT (A) IN THE DETAILED DISCUSSI ON WHILE DECIDING THE ISSUE HAS GIVEN THE FINDING IN FAVOUR OF THE ASSESSEE WHEREAS ONLY IN A TABLE AS AT PAGE NO. 63 OF THE IMPUGNED ORDER THE LD. CIT (A) HAS SUSTAINED AN ADDITION OF RS. 50,00,000/- UNDER SECTION 68. THUS THE LD. A/R HAS SUBMITTED TH AT THE ASSESSMENT FRAMED UNDER SECTION 153A IN THE ABSENCE OF ANY INCRIMINATING MA TERIAL IS NOT SUSTAINABLE WHEN THE ADDITION MADE BY THE LD. CIT (A) IS NOT SUPPORT ED OR SUBSTANTIATED BY ANY INCRIMINATING MATERIAL. 10.1. ON THE OTHER HAND, THE LD. D/R HAS RELIED UPO N THE ORDER OF THE AO AS WELL AS THE REMAND REPORT OF THE AO AND SUBMITTED THAT THE AO HAS CLEARLY MADE OUT A CASE OF ADDITION OF RS. 5,55,84,000/- ON SUBSTANTIVE BAS IS IN THE HANDS OF THE ASSESSEE. 11. AT THE OUTSET, WE NOTE THAT THE LD. CIT (A) HAS CONSIDERED AND DECIDED THIS ISSUE IN PARA 3.2.3 AT PAGE 85 & 86 AS UNDER :- 3.2.3. I HAVE DULY CONSIDERED ASSESSEES SUBMISSI ON AND CAREFULLY GONE THROUGH ASSESSMENT ORDER. I HAVE ALS O TAKEN A NOTE OF FACTUAL MATRIX OF THE CASE AS WELL AS APPLICABLE CA SE LAWS RELIED UPON. ON PERUSAL OF ASSESSMENT ORDER, IT IS SEEN THAT AO HAS MADE PROTECTIVE ADDITION OF RS. 7,19,50,000/- ON THE BASIS OF NOTIN GS OF FOLLOWING IMPUGNED SEIZED DOCUMENTS PERTAINING TO CHAINPURA L AND DEALINGS AND THEY WERE SEIZED/IMPOUNDED FROM THE POSSESSION OF S H. MADAN MOHAN GUPTA : DETAILS OF INCRIMINATING DOCUMENTS: LAND TRANSACTIO N OF CHAINPURA BEHIND EP JAIPUR. 26 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. S.NO. ANNEXURE AND EXHIBIT NO. PG NO. OF THE SEIZED DOCUMENT FOUND/SEIZED FROM/IMPOUNDED 1. ANNEX - A EXHIBIT - 1 15 TO 24, 27, 28, 43, 44, 69 TO 74 RESIDENTIAL PREMISE 2. ANNEX - A EXHIBIT - 2 47 AND BACK SIDE OF 48, 50 TO 54 RESIDENTIAL PREMISE 3. ANNEX - A EXHIBIT - 5 1 TO 77 RESIDENTIAL PREMISE 4. ANNEX - AS EXHIBIT - 1 1 TO 3, 7, 9, 10 IMPOUNDED FROM OFFICE PREMISE DURING SURVEY OPERATION. FURTHER, IT IS PERTINENT TO NOTE THAT ON THE BASIS OF NOTINGS RECORDED IN THE AFOREMENTIONED SEIZED DOCUMENTS, AO HAS MADE SU BSTANTIVE ADDITION OF RS. 7,19,50,000/- IN THE HANDS OF SH MA DAN MOHAN GUPTA. IN THIS GROUP CASE, AO U/S 250(4) OF THE ACT HAS BE EN DIRECTED TO CARRY OUT INQUIRY/INVESTIGATION AND AO SUBMITTED A DETAILED REMAND REPORT ON 20.03.2017. PURSUANT TO THE RECEIPT OF RE MAND REPORT A DETAILED SHOW CAUSE LETTER DT. 21.03.2017 & ENHANCE MENT NOTICE U/S 251(2) OF THE ACT VIDE LETTER DT. 22.03.2017 HAVE B EEN GIVEN TO THE ASSESSEE. IN COMPLIANCE ASSESSEE FILED HIS DETAILE D REPLY WHICH HAVE BEEN DULY CONSIDERED. ON PERUSAL OF ASSESSMENT ORD ER IT IS SEEN THAT THE SAID PROTECTIVE ADDITION MADE BY THE AO, PERTAI NS TO LAND DEALINGS OF CHAINPURA BEHIND EP. AS PER WORKING GIVEN IN PA RA NO. 2.1.8.5, FOLLOWING ADDITIONS ARE REQUIRED TO BE MADE IN CASE OF FOLLOWINGS IN AYS AS UNDER : AY NAME ADDITION REQUIRED TO BE MADE UNDER SEC./NATURE OF ADDITION 2008 - 09 NAVRATTAN KOTHARI RS. 15,87,19,309/ - UNDISCLOSED INVESTMENT MADE IN CASH U/S 68 2008 - 09 VIMAL CHAND SURANA HUF RS. 2,64,66,445/ - UNDISCLOSED INVESTMENT MADE IN CASH U/S 68 2008 - 09 KAUSHAL CHAND SURANA* RS. 1,32,13,382/ - UNDISCLOSED INVESTMENT MADE IN CASH U/S 68 2008 - 09 RAJE NDRA KR JAIN* RS. 3,20,00,000/ - UNDISCLOSED INVESTMENT MADE IN CASH U/S 68 2008 - 09 RAJENDRA KR. JAIN* RS. 8,32,55,232/ - UNDISCLOSED BUSINESS PROFIT. 2007 - 08 RAJENDRA KR JAIN RS. 1,13,00,000/ - UNDISCLOSED INVESTMENT MADE IN CASH U/S 68 (DIRECTION FOR AO U/S 150(1) OF THE ACT TO RE-OPEN U/S 147 OF THE OF THE CASE FOR SH. RAJENDRA KR. JAIN AND SH KAUSHAL CHAND SURA NA FOR AY 08-09) 27 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. IN CASE OF CHAINPURA LAND DEALINGS, NO ADDITION EI THER ON SUBSTANTIVE BASIS OF PROTECTIVE BASIS HAS BEEN PROPOSED IN THE HANDS OF SH MADAN MOHAN GUPTA & M/S. SHRI KALYAN BUILDMART PVT. LTD. FURTHE R, IT IS ALSO PERTINENT TO MENTION HERE THAT, NO PROTECTIVE ADDITION OF RS. 7, 19,50,000/- HAS BEEN PROPOSED IN THE REMAND REPORT. FURTHER, AS PER DET AILED WORKING GIVEN IN PARA NO. 2.1.8.5 FOR ISSUE NO. 1, 2, 3 & 4 WHERE NO SEPARATE ADDITION OF RS. 7,19,50,000/- FOR THE AY 2009-10 ON PROTECTIVE BASI S IN ASSESSEE HANDS HAS BEEN PROPOSED ACCORDINGLY, THE SAME IS DELETED. AS SESSEE GETS RELIEF IN GR NO. 2. THUS IT IS CLEAR THAT THE LD. CIT (A) HAS GIVEN THE FINDING THAT THE AO HAS MADE PROTECTIVE ADDITION OF RS. 7,19,50,000/- ON THE BAS IS OF NOTINGS IN THE DIARY PERTAINING TO THE CHAINPURA LAND DEALING AND THE SU BSTANTIVE ADDITION OF THE SAID AMOUNT WAS MADE IN THE HANDS OF SHRI MADAN MOHAN GU PTA. THE LD. CIT (A) HAS SINCE DELETED THE ADDITION MADE ON SUBSTANTIVE BASI S IN THE HANDS OF SHRI MADAN MOHAN GUPTA AND M/S. SHRI KALYAN BUILDMART PVT. LTD ., CONSEQUENTLY THE PROTECTIVE ADDITION MADE IN THE HANDS OF THE ASSESSEE IS DELET ED. HOWEVER, THE LD. CIT (A) HAS FURTHER PROCEEDED TO ENHANCE THE ASSESSMENT ON THE BASIS OF THE REMAND REPORT OF THE AO. IT IS PERTINENT TO NOTE THAT UNDISPUTEDLY THE ORIGINAL ASSESSMENT IN THE CASE OF THE ASSESSEE WAS COMPLETED UNDER SECTION 143(3) PRIOR TO THE DATE OF SEARCH AND, THEREFORE, THE ASSESSMENT WAS NOT PENDING AS ON THE DATE OF SEARCH. HENCE NO ADDITION CAN BE MADE IN THE PROCEEDINGS UNDER SECTI ON 153A IN THE ABSENCE OF ANY INCRIMINATING MATERIAL FOUND AND SEIZED DURING THE SEARCH AND SEIZURE ACTION UNDER SECTION 132. THE ADDITION PROPOSED BY THE LD. CIT (A) AS ON THE BASIS OF THE REMAND REPORT IN VIEW OF THE FACT THAT THE LD. CIT (A) HIM SELF HAS NOT ACCEPTED THE SEIZED MATERIAL WHICH WAS THE BASIS OF THE PROTECTIVE ADDI TION, THE ADDITION PROPOSED BY THE LD. CIT (A) IN THE APPELLATE PROCEEDINGS IS NOT PER MISSIBLE UNDER THE PROVISIONS OF LAW. THE HONBLE DELHI HIGH COURT IN THE CASE OF C IT VS. KABUL CHAWLA, 281 CTR 45 28 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. (DELHI) AS WELL AS THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF JAI STEEL (INDIA) VS. ACIT 259 CTR 281 (RAJ.) HAS CONSIDERED THIS ISS UE OF REASSESSMENT OF INCOME UNDER SECTION 153A IN THE ABSENCE OF INCRIMINATING MATERIAL. THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF M/S. GORBANDH MARBL ES PVT. LTD. VS. DCIT IN ITA NO.605/JP/2017 VIDE ORDER DATED 27.12.2017 HAS CONS IDERED AND DECIDED AN IDENTICAL ISSUE IN PARA 5 AS UNDER :- 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS W ELL AS RELEVANT MATERIAL ON RECORD. THE ASSESSEE FILED ITS RETURN O F INCOME FOR THE YEAR UNDER CONSIDERATION ON 24.09.2010 AND THEREFORE, UN DISPUTEDLY THE TIME LIMIT FOR ISSUING THE NOTICE U/S 143(2) ON THE RETURN OF INCOME FILED U/S 139(1) EXPIRED ON 30.09.2011. A SEARCH IN THE C ASE OF THE ASSESSEE WAS CONDUCTED ON 17.07.2013 AND AS ON THE DATE OF S EARCH THE ASSESSMENT FOR THE YEAR UNDER CONSIDERATION WAS NOT PENDING. THUS, IT IS CLEAR THAT THE NOTICE ISSUED BY THE AO U/S 153A CONSEQUENT TO THE SEARCH CARRIED OUT U/S 132 IS FOR REASSESSMENT OF I NCOME OF THE ASSESSEE. WE FURTHER NOTE THAT IN THE COURSE OF ASS ESSMENT PROCEEDINGS THE ASSESSING OFFICER HAS ACCEPTED THE INCOME DECLARED BY THE ASSESSEE IN THE ORIGINAL RETURN OF INCOME EXCEP T A DISALLOWANCE OF RS. 26,183/- ON ACCOUNT OF EMPLOYEES CONTRIBUTION T O ESI AND PF. THE ENTIRE ASSESSMENT ORDER IS SILENT ABOUT ANY OF THE INCRIMINATING DOCUMENT FOUND OR SEIZED DURING THE COURSE OF SEARC H AND SEIZURE ACTION AND THEREFORE, IT IS CLEAR THAT THE ASSESSME NT FRAMED BY THE ASSESSING OFFICER U/S 153A FOR THE ASSESSMENT YEAR UNDER CONSIDERATION IS NOT BASED ON ANY DOCUMENT FOUND OR SEIZED DURING THE COURSE OF SEARCH OR REQUISITION MADE. THIS FACT HAS NOT BEEN DISPUTED BY THE REVENUE THAT THE ASSESSMENT FOR THE YEAR UND ER CONSIDERATION U/S 153A R.W.S. 143(3) IS NOT BASED ON ANY INCRIMIN ATING DOCUMENT FOUND DURING THE COURSE OF SEARCH. THIS ISSUE HAS B EEN CONSIDERED IN A SERIES OF DECISIONS OF THE HONBLE HIGH COURTS AS R ELIED UPON BY THE 29 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. ASSESSEE. IN THE LATEST DECISION IN CASE OF PR. CIT VS. MEETA GUTGUTIA (SUPRA) THE HONBLE DELHI HIGH COURT HAS AGAIN CON SIDERED AND ANALYZED THE RELEVANT PROVISIONS OF THE ACT AS WELL ALL THE DECISIONS ON THIS POINT IN PARA 57 TO 72 AS UNDER:- 57. THE QUESTION WHETHER UNEARTHING OF INCRIMINATING M ATERIAL RELATING TO ANY ONE OF THE AYS COULD JUSTIFY THE RE -OPENING OF THE ASSESSMENT FOR ALL THE EARLIER AYS WAS CONSIDERED B OTH IN ANIL KUMAR BHATIA (SUPRA) AND CHETAN DAS LACHMAN DAS (SUPRA). INCIDENTALLY, BOTH THESE DECISIONS WERE DISCUSSED THREADBARE IN T HE DECISION OF THIS COURT IN KABUL CHAWLA (SUPRA). AS FAR AS ANIL KUMAR BHATIA (SUPRA) WAS CONCERNED, THE COURT IN PARAGRAPH 24 OF THAT DECISI ON NOTED THAT 'WE ARE NOT CONCERNED WITH A CASE WHERE NO INCRIMINATIN G MATERIAL WAS FOUND DURING THE SEARCH CONDUCTED UNDER SECTION 132 OF THE ACT. WE THEREFORE EXPRESS NO OPINION AS TO WHETHER SECTION 153A CAN BE INVOKED EVEN UNDER SUCH SITUATION'. THAT QUESTION W AS, THEREFORE, LEFT OPEN. AS FAR AS CHETAN DAS LACHMAN DAS (SUPRA) IS C ONCERNED, IN PARA 11 OF THE DECISION IT WAS OBSERVED: '11. SECTION 153A (1) (B) PROVIDES FOR THE ASSESSME NT OR REASSESSMENT OF THE TOTAL INCOME OF THE SIX ASSESSMENT YEARS IMM EDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR I N WHICH THE SEARCH TOOK PLACE. TO REPEAT, THERE IS NO CONDITION IN THI S SECTION THAT ADDITIONS SHOULD BE STRICTLY MADE ON THE BASIS OF E VIDENCE FOUND IN THE COURSE OF THE SEARCH OR OTHER POST-SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE ASSESSING OFFICER WHICH CAN BE R ELATED TO THE EVIDENCE FOUND. THIS, HOWEVER, DOES NOT MEAN THAT T HE ASSESSMENT UNDER SECTION 153A CAN BE ARBITRARY OR MADE WITHOUT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOUSLY AN ASSESS MENT HAS TO BE MADE UNDER THIS SECTION ONLY ON THE BASIS OF SEIZED MATERIAL.' 58. IN KABUL CHAWLA (SUPRA), THE COURT DISCUSSED THE D ECISION IN FILATEX INDIA LTD. (SUPRA) AS WELL AS THE ABOVE TWO DECISIO NS AND OBSERVED AS UNDER: '31. WHAT DISTINGUISHES THE DECISIONS BOTH IN CIT V . CHETAN DAS LACHMAN DAS (SUPRA), AND FILATEX INDIA LTD. V. CIT-IV (SUPR A) IN THEIR APPLICATION TO THE PRESENT CASE IS THAT IN BOTH THE SAID CASES THE RE WAS SOME MATERIAL UNEARTHED DURING THE SEARCH, WHEREAS IN THE PRESENT CASE THERE ADMITTEDLY WAS NONE. SECONDLY, IT IS PLAIN FROM A CAREFUL READ ING OF THE SAID TWO . DECISIONS THAT THEY DO NOT HOLD THAT ADDITIONS CAN BE VALIDLY MADE TO INCOME FORMING THE SUBJECT MATTER OF COMPLETED ASSE SSMENTS PRIOR TO THE 30 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. SEARCH EVEN IF NO INCRIMINATING MATERIAL WHATSOEVER WAS UNEARTHED DURING THE SEARCH. 32. RECENTLY BY ITS ORDER DATED 6TH JULY 2015 IN IT A NO. 369 OF 2015 (PR. COMMISSIONER OF INCOME TAX V. KURELE PAPER MILLS P. LTD.), THIS COURT DECLINED TO FRAME A QUESTION OF LAW IN A CASE WHERE, IN THE ABSENCE OF ANY INCRIMINATING MATERIAL BEING FOUND DURING THE SEARC H UNDER SECTION 132 OF THE ACT, THE REVENUE SOUGHT TO JUSTIFY INITIATION OF PR OCEEDINGS UNDER SECTION 153A OF THE ACT AND MAKE AN ADDITION UNDER SECTION 68 OF THE ACT ON BOGUS SHARE CAPITAL GAIN. THE ORDER OF THE CIT (A), AFFIR MED BY THE ITAT, DELETING THE ADDITION, WAS NOT INTERFERED WITH.' 59. IN KABUL CHAWLA (SUPRA), THE COURT REFERRED TO THE DECISION OF THE RAJASTHAN HIGH COURT IN JAI STEEL (INDIA) V. ASSTT. CIT [2013] 36 TAXMANN.COM 523/219 TAXMAN 223 . THE SAID PART OF THE DECISION IN KABUL CHAWLA (SU PRA) IN PARAS 33 AND 34 READS AS UNDER: '33. THE DECISION OF THE RAJASTHAN HIGH COURT IN JA I STEEL (INDIA), JODHPUR V. ACIT (SUPRA) INVOLVED A CASE WHERE CERTA IN BOOKS OF ACCOUNTS AND OTHER DOCUMENTS THAT HAD NOT BEEN PRODUCED IN THE C OURSE OF ORIGINAL ASSESSMENT WERE FOUND IN THE COURSE OF SEARCH. IT W AS HELD WHERE UNDISCLOSED INCOME OR UNDISCLOSED PROPERTY HAS BEEN FOUND AS A CONSEQUENCE OF THE SEARCH, THE SAME WOULD ALSO BE TAKEN INTO CO NSIDERATION WHILE COMPUTING THE TOTAL INCOME UNDER SECTION 153A OF TH E ACT. THE COURT THEN EXPLAINED AS UNDER: '22. IN THE FIRM OPINION OF THIS COURT FROM A PLAIN READING OF THE PROVISION ALONG WITH THE PURPOSE AND PURPORT OF THE SAID PROV ISION, WHICH IS INTRICATELY LINKED WITH SEARCH AND REQUISITION UNDER SECTIONS 1 32 AND 132A OF THE ACT, IT IS APPARENT THAT: (A ) THE ASSESSMENTS OR REASSESSMENTS, WHICH STAND ABATE D IN TERMS OF II PROVISO TO SECTION 153A OF THE ACT, THE AO ACTS UNDER HIS O RIGINAL JURISDICTION, FOR WHICH, ASSESSMENTS HAVE TO BE MADE; (B ) REGARDING OTHER CASES, THE ADDITION TO THE INCOME T HAT HAS ALREADY BEEN ASSESSED, THE ASSESSMENT WILL BE MADE ON THE BASIS OF INCRIMINATING MATERIAL; AND (C ) IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPL ETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMEN T CAN BE MADE.' 31 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. 34. THE ARGUMENT OF THE REVENUE THAT THE AO WAS FRE E TO DISTURB INCOME DE HORS THE INCRIMINATING MATERIAL WHILE MAKING ASSESS MENT UNDER SECTION 153A OF THE ACT WAS SPECIFICALLY REJECTED BY THE COURT O N THE GROUND THAT IT WAS 'NOT BORNE OUT FROM THE SCHEME OF THE SAID PROVISIO N' WHICH WAS IN THE CONTEXT OF SEARCH AND/OR REQUISITION. THE COURT ALS O EXPLAINED THE PURPORT OF THE WORDS 'ASSESS' AND 'REASSESS', WHICH HAVE BEEN FOUND AT MORE THAN ONE PLACE IN SECTION 153A OF THE ACT AS UNDER: '26. THE PLEA RAISED ON BEHALF OF THE ASSESSEE THAT AS THE FIRST PROVISO PROVIDES FOR ASSESSMENT OR REASSESSMENT OF THE TOTA L INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN THE SIX ASSE SSMENT YEARS, IS MERELY READING THE SAID PROVISION IN ISOLATION AND NOT IN THE CONTEXT OF THE ENTIRE SECTION. THE WORDS 'ASSESS' OR 'REASSESS '-HAVE BEEN USED AT MORE THAN ONE PLACE IN THE SECTION AND A HARMONIOUS CONSTRUCTION OF THE ENTIRE PROVISION WOULD LEAD TO AN IRRESISTIBLE CONCLUSION THAT THE WORD ASSESS HAS BEEN USED IN THE CONTEXT OF AN ABAT ED PROCEEDINGS AND REASSESS HAS BEEN USED FOR COMPLETED ASSESSMENT PROCEEDINGS, WHICH WOULD NOT ABATE AS THEY ARE NOT PENDING ON TH E DATE OF INITIATION OF THE SEARCH OR MAKING OF REQUISITION AND WHICH WO ULD ALSO NECESSARILY SUPPORT THE INTERPRETATION THAT FOR THE COMPLETED A SSESSMENTS, THE SAME CAN BE TINKERED ONLY BASED ON THE INCRIMINATIN G MATERIAL FOUND DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUM ENTS.'' 60. IN KABUL CHAWLA (SUPRA), THE COURT ALSO TOOK NOTE OF THE DECISION OF THE BOMBAY HIGH COURT IN CIT V. CONTINENTAL WAREHOUSING CORPN (NHAVA SHEVA) LTD. [2015] 58 TAXMANN.COM 78/232 TAXMAN 270/374 ITR 645 (BOM.) WHICH ACCEPTED THE PLEA THAT IF NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH IN RESPECT OF AN ISSUE, THEN NO AD DITIONS IN RESPECT OF ANY ISSUE CAN BE MADE TO THE ASSESSMENT UNDER SECTION 1 53A AND 153C OF THE ACT. THE LEGAL POSITION WAS THEREAFTER SUMMARIZED I N KABUL CHAWLA (SUPRA) AS UNDER: '37. ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT, READ WITH THE PROVISOS THERETO, AND IN THE LIGHT OF THE LAW EXPLAINED IN T HE AFOREMENTIONED DECISIONS, THE LEGAL POSITION THAT EMERGES IS AS UN DER: I. ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF THE ACT, NOTICE UNDER SECTION 153 A (1) WILL HAVE TO BE MANDATORILY ISSUED TO THE PERSON SEARCHED REQUIRING HIM TO FILE RETURNS FOR SIX AYS IMMEDIATELY PRECEDI NG THE PREVIOUS YEAR RELEVANT TO THE AY IN WHICH THE SEARCH TAKES PLACE. 32 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. II. ASSESSMENTS AND REASSESSMENTS PENDING ON THE DATE O F THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH AYS WILL HAVE TO BE COMPU TED BY THE AOS AS A FRESH EXERCISE. III. THE AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RESPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT AY IN WHICH THE SEARCH TAK ES PLACE. THE AO HAS THE POWER TO ASSESS AND REASSESS THE 'TOTAL INCOME' OF THE. AFOREMENTIONED SIX YEARS IN SEPARATE ASSESSMENT ORDERS FOR EACH OF THE SIX YEA RS. IN OTHER WORDS THERE WILL BE ONLY ONE ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX AYS 'IN WHICH BOTH THE DISCLOSED AND THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX'. IV. ALTHOUGH SECTION 153 A DOES NOT SAY THAT ADDITIONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF THE SE ARCH, OR OTHER POST- SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE AO WHICH CAN BE RELATED TO THE EVIDENCE FOUND, IT DOES NOT MEAN THAT THE ASSESSMEN T 'CAN BE ARBITRARY OR MADE WITHOUT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOUSLY AN ASSESSMENT HAS TO BE MADE UNDER THIS SECTION ONLY O N THE BASIS OF SEIZED MATERIAL.' V. IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPL ETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMENT CAN BE MADE. THE WORD 'ASSESS' IN SECTION 153 A IS RELATABLE TO ABATED PR OCEEDINGS (I.E. THOSE PENDING ON THE DATE OF SEARCH) AND THE WORD 'REASSESS' TO C OMPLETED ASSESSMENT PROCEEDINGS. VI. INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, THE JURISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UNDER SECTIO N 153A MERGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARATELY FOR EA CH AY ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER MATERIAL EXIST ING OR BROUGHT ON THE RECOR D OF THE AO. VII. COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153 A ONLY ON THE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR R EQUISITION OF DOCUMENTS OR UNDISCLOSED IN COME OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT.' 33 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. 61. IT APPEARS THAT A NUMBER OF HIGH COURTS HAVE CONCU RRED WITH THE DECISION OF THIS COURT IN KABUL CHAWLA (SUPRA) BEGINNING WIT H THE GUJARAT HIGH COURT IN SAUMYA CONSTRUCTION (P.) LTD. (SUPRA). THERE, A SEARCH AND SEIZURE OPERATION WAS CARRIED OUT ON 7TH OCTOBER, 2009 AND AN ASSESSMENT CAME TO BE FRAMED UNDER SECTION 143(3) READ WITH SECTION 15 3A(1)(B) IN DETERMINING THE TOTAL INCOME OF THE ASSESSEE OF RS. 14.5 CRORES AGAINST DECLARED INCOME OF RS. 3.44 CRORES. THE ITAT DELETED THE ADDITIONS ON THE GROUND THAT IT WAS NOT BASED ON ANY INCRIMINATING MATERIAL FOUND DURIN G THE COURSE OF THE SEARCH IN RESPECT OF AYS UNDER CONSIDERATION I.E., AY 2006 -07. THE GUJARAT HIGH COURT REFERRED TO THE DECISION IN KABUL CHAWLA(SUPR A), OF THE RAJASTHAN HIGH COURT IN JAI STEEL (INDIA) (SUPRA) AND ONE EARLIER DECISION OF THE GUJARAT HIGH COURT ITSELF. IT EXPLAINED IN PARA 15 AND 16 AS UND ER: '15. ON A PLAIN READING OF SECTION 153A OF THE ACT, IT IS EVIDENT THAT THE TRIGGER POINT FOR EXERCISE OF POWERS THEREUNDER IS A SEARCH UNDER SECTION 132 OR A REQUISITION UNDER SECTION 132A OF THE ACT. ONCE A SEARCH OR REQUISITION IS MADE, A MANDATE IS CAST UPON THE ASS ESSING OFFICER TO ISSUE NOTICE UNDER SECTION 153A OF THE ACT TO THE PERSON, REQUIRING HIM TO FURNISH THE RETURN OF INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSME NT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITION IS MADE AND ASSESS OR REASSESS THE SAME. SINCE THE ASSESSME NT UNDER SECTION 153A OF THE ACT IS LINKED WITH SEARCH AND REQUISITION UN DER SECTIONS 132 AND 132A OF THE ACT, IT IS EVIDENT THAT THE OBJECT OF T HE SECTION IS TO BRING TO TAX THE UNDISCLOSED INCOME WHICH IS FOUND DURING THE CO URSE OF OR PURSUANT TO THE SEARCH OR REQUISITION. HOWEVER, INSTEAD OF THE EARLIER REGIME OF BLOCK ASSESSMENT WHEREBY, IT WAS ONLY THE UNDISCLOSED INC OME OF THE BLOCK PERIOD THAT WAS ASSESSED, SECTION 153A OF THE ACT S EEKS TO ASSESS THE TOTAL INCOME FOR THE ASSESSMENT YEAR, WHICH IS CLEAR FROM THE FIRST PROVISO THERETO WHICH PROVIDES THAT THE ASSESSING OFFICER S HALL ASSESS OR REASSESS THE TOTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SUCH SIX ASSESSMENT YEARS. THE SECOND PROVISO MAKES THE INTE NTION OF THE LEGISLATURE CLEAR AS THE SAME PROVIDES THAT ASSESSM ENT OR REASSESSMENT, IF ANY, RELATING TO THE SIX ASSESSMENT YEARS REFERRED TO IN THE SUB-SECTION PENDING ON THE DATE OF INITIATION OF SEARCH UNDER S ECTION 132 OR REQUISITION UNDER SECTION 132A, AS THE CASE MAY BE, SHALL ABATE . SUB-SECTION (2) OF SECTION 153A OF THE ACT PROVIDES THAT IF ANY PROCEE DING OR ANY ORDER OF ASSESSMENT OR REASSESSMENT MADE UNDER SUB-SECTION ( 1) IS ANNULLED IN APPEAL OR ANY OTHER LEGAL PROVISION, THEN THE ASSES SMENT OR REASSESSMENT RELATING TO ANY ASSESSMENT YEAR WHICH HAD ABATED UN DER THE SECOND PROVISO WOULD STAND REVIVED. THE PROVISO THERETO SA YS THAT SUCH REVIVAL 34 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. SHALL CEASE TO HAVE EFFECT IF SUCH ORDER OF ANNULME NT IS SET ASIDE. THUS, ANY PROCEEDING OF ASSESSMENT OR REASSESSMENT FALLING WI THIN THE SIX ASSESSMENT YEARS PRIOR TO THE SEARCH OR REQUISITION STANDS ABA TED AND THE TOTAL INCOME OF THE ASSESSEE IS REQUIRED TO BE DETERMINED UNDER SECTION 153A OF THE ACT. SIMILARLY, SUB-SECTION (2) PROVIDES FOR REVIVAL OF ANY ASSESSMENT OR REASSESSMENT WHICH STOOD ABATED, IF ANY PROCEEDING OR ANY ORDER OF ASSESSMENT OR REASSESSMENT MADE UNDER SECTION 153A OF THE ACT IS ANNULLED IN APPEAL OR ANY OTHER PROCEEDING. 16. SECTION 153A BEARS THE HEADING 'ASSESSMENT IN C ASE OF SEARCH OR REQUISITION'. IT IS 'WELL SETTLED AS HELD BY THE SU PREME COURT IN A CATENA OF DECISIONS THAT THE HEADING OR THE SECTION CAN BE RE GARDED AS A KEY TO THE INTERPRETATION OF THE OPERATIVE PORTION OF THE SECT ION AND IF THERE IS NO AMBIGUITY IN THE LANGUAGE OR IF IT IS PLAIN AND CLE AR, THEN THE HEADING USED IN THE SECTION STRENGTHENS THAT MEANING. FROM THE HEAD ING OF SECTION 153. THE INTENTION OF THE LEGISLATURE IS CLEAR, VIZ., TO PRO VIDE FOR ASSESSMENT IN CASE OF SEARCH AND REQUISITION. WHEN THE VERY PURPOSE OF TH E PROVISION IS TO MAKE ASSESSMENT IN CASE OF SEARCH OR REQUISITION, IT GOE S WITHOUT SAYING THAT THE ASSESSMENT HAS TO HAVE RELATION TO THE SEARCH OR RE QUISITION, IN OTHER WORDS, THE ASSESSMENT SHOULD CONNECTED WITH SOMETHING ROUN D DURING THE SEARCH OR REQUISITION VIZ., INCRIMINATING MATERIAL WHICH REVE ALS UNDISCLOSED INCOME. THUS, WHILE IN VIEW OF THE MANDATE OF SUB-SECTION ( 1) OF SECTION 153A OF THE ACT, IN EVERY CASE WHERE THERE IS A SEARCH OR REQUI SITION, THE ASSESSING OFFICER IS OBLIGED TO ISSUE NOTICE TO SUCH PERSON TO FURNIS H RETURNS OF INCOME FOR THE SIX YEARS PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE SEARCH IS CONDUCTED OR REQUISITION IS MAD E, ANY ADDITION' OR DISALLOWANCE CAN BE MADE ONLY ON THE BASIS OF MATER IAL COLLECTED DURING THE SEARCH OR REQUISITION, IN CASE NO INCRIMINATING MAT ERIAL IS FOUND, AS HELD BY THE RAJASTHAN HIGH COURT IN THE CASE OF JAI STEEL (INDI A) V. ASST. CIT (SUPRA), THE EARLIER ASSESSMENT WOULD HAVE TO BE REITERATED, IN CASE WHERE PENDING ASSESSMENTS HAVE ABATED, THE ASSESSING OFFICER CAN PASS ASSESSMENT ORDERS FOR EACH OF THE SIX YEARS DETERMINING THE TOTAL INC OME OF THE ASSESSEE WHICH WOULD INCLUDE INCOME DECLARED IN THE RETURNS, IF AN Y, FURNISHED BY THE ASSESSEE AS WELL AS UNDISCLOSED INCOME, IF ANY, UNE ARTHED DURING THE SEARCH OR REQUISITION. IN CASE WHERE A PENDING REASSESSMEN T UNDER SECTION 147 OF THE ACT HAS ABATED, NEEDLESS TO STATE THAT THE SCOP E AND AMBIT OF THE ASSESSMENT WOULD INCLUDE ANY ORDER WHICH THE ASSESS ING OFFICER COULD HAVE PASSED UNDER SECTION 147 OF THE ACT AS WELL AS UNDE R SECTION 153A OF THE ACT. ** ** ** 35 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. 19. ON BEHALF OF THE APPELLANT, IT HAS BEEN CONTEND ED THAT IF ANY INCRIMINATING MATERIAL IS FOUND, NOTWITHSTANDING THAT IN RELATION TO THE YEAR UNDER CONSIDERATION, NO INCRIMINATING MATERIAL IS FOUND, IT WOULD BE PERMISSIBLE TO MAKE ADDITIONS AND DISALLOWANCE IN RESPECT OF AN TH E SIX ASSESSMENT YEARS. IN THE OPINION OF THIS COURT, THE SAID CONTENTION DOES NOT MERIT ACCEPTANCE, INASMUCH AS. THE ASSESSMENT IN RESPECT OF EACH OF T HE SIX ASSESSMENT YEARS IS A SEPARATE AND DISTINCT ASSESSMENT. UNDER SECTION 1 53A OF THE ACT, ASSESSMENT HAS TO BE MADE IN RELATION TO THE SEARCH OR REQUISITION, NAMELY, IN RELATION TO MATERIAL DISCLOSED DURING THE SEARCH OR REQUISITION. IF IN RELATION TO ANY ASSESSMENT YEAR, NO INCRIMINATING MATERIAL IS F OUND, NO ADDITION OR DISALLOWANCE CAN BE MADE IN RELATION TO THAT ASSESS MENT YEAR IN EXERCISE OF POWERS UNDER SECTION 153A OF THE ACT AND THE EARLIE R ASSESSMENT SHALL HAVE TO BE REITERATED. IN THIS REGARD, THIS COURT IS IN COMPLETE AGREEMENT WITH THE VIEW ADOPTED BY THE RAJASTHAN HIGH COURT IN THE CAS E OF JAI STEEL (INDIA) V. ASST. CIT (SUPRA). BESIDES, AS RIGHTLY P OINTED OUT BY THE LEARNED COUNSEL FOR THE RESPONDENT, THE CONTROVERSY INVOLVE D IN THE PRESENT CASE STANDS CONCLUDED BY THE DECISION OF THIS COURT IN T HE CASE OF CIT V. JAYABEN RATILAL SORATHIA (SUPRA) WHEREIN IT HAS BEEN HELD T HAT WHILE IT CANNOT BE DISPUTED THAT CONSIDERING SECTION 153A OF THE ACT, THE ASSESSING OFFICER CAN REOPEN AND/OR ASSESS THE RETURN WITH RESPECT TO SIX PRECEDING YEARS ; HOWEVER, THERE MUST BE SOME INCRIMINATING MATERIAL AVAILABLE WITH THE ASSESSING OFFICER WITH RESPECT TO THE SALE TRANSACT IONS IN THE PARTICULAR ASSESSMENT YEAR.' 62. SUBSEQUENTLY, IN DEVANGI ALIAS RUPA (SUPRA), ANOTH ER BENCH OF THE GUJARAT HIGH COURT REITERATED THE ABOVE LEGAL POSIT ION FOLLOWING ITS EARLIER DECISION IN SAUMYA CONSTRUCTION (P.) LTD. (SUPRA) A ND OF THIS COURT IN KABUL CHAWLA (SUPRA). AS FAR AS KARNATAKA HIGH COURT IS C ONCERNED, IT HAS IN IBC KNOWLEDGE PARK (P.) LTD. (SUPRA) FOLLOWED THE DECIS ION OF THIS COURT IN KABUL CHAWLA (SUPRA) AND HELD THAT THERE HAD TO BE INCRIM INATING MATERIAL QUA EACH OF THE AYS IN WHICH ADDITIONS WERE SOUGHT TO BE MAD E PURSUANT TO SEARCH AND SEIZURE OPERATION. THE CALCUTTA HIGH COURT IN SALAS AR STOCK BROKING LTD. (SUPRA), TOO, FOLLOWED THE DECISION OF THIS CO URT IN KABUL CHAWLA (SUPRA). IN GURINDER SINGH BAWA (SUPRA), THE BOMBAY HIGH COU RT HELD THAT: '6. . . . . . ONCE AN ASSESSMENT HAS ATTAINED FINAL ITY FOR A PARTICULAR YEAR, I.E., IT IS NOT PENDING THEN THE SAME CANNOT BE SUB JECT TO TAX IN PROCEEDINGS UNDER SECTION 153A OF THE ACT. THIS OF COURSE WOULD NOT APPLY IF INCRIMINATING MATERIALS ARE GATHERED IN THE COUR SE OF SEARCH OR DURING PROCEEDINGS UNDER SECTION 153A OF THE ACT WHICH ARE CONTRARY TO AND/OR NOT DISCLOSED DURING THE REGULAR ASSESSMENT PROCEEDINGS .' 36 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. 63. EVEN THIS COURT HAS IN MAHESH KUMAR GUPTA (SUPRA) AND RAM AVTAR VERMA (SUPRA) FOLLOWED THE DECISION IN KABUL CHAWLA (SUPRA). THE DECISION OF THIS COURT IN KURELE PAPER MILLS (P.) LTD. (SUPRA) WHICH WAS REFERRED TO IN KABUL CHAWLA (SUPRA) HAS BEEN AFFIRMED BY THE SU PREME COURT BY THE DISMISSAL OF THE REVENUE'S SLP ON 7TH DECEMBER, 201 5. THE DECISION IN DAYAWANTI GUPTA 64. THAT BRINGS US TO THE DECISION IN SMT. DAYAWANTI G UPTA (SUPRA). AS RIGHTLY POINTED OUT BY MR. KAUSHIK, LEARNED COUNSEL APPEARI NG FOR THE RESPONDENT, THAT THERE ARE SEVERAL DISTINGUISHING FEATURES IN T HAT CASE WHICH MAKES ITS RATIO INAPPLICABLE TO THE FACTS OF THE PRESENT CASE . IN THE FIRST PLACE, THE ASSESSEES THERE WERE ENGAGED IN THE BUSINESS OF PAN MASALA AND GUTKHA ETC. THE ANSWERS GIVEN TO QUESTIONS POSED TO THE ASSESSE E IN THE COURSE OF SEARCH AND SURVEY PROCEEDINGS IN THAT CASE BRING OUT THE P OINTS OF DISTINCTION. IN THE FIRST PLACE, IT WAS STATED THAT THE STATEMENT RECOR DED WAS UNDER SECTION 132(4) AND NOT UNDER SECTION 133A. IT WAS A STATEME NT BY THE ASSESSEE HIMSELF. IN RESPONSE TO QUESTION NO. 7 WHETHER ALL THE PURCHASES MADE BY THE FAMILY FIRMS, WERE ENTERED IN THE REGULAR BOOKS OF ACCOUNT, THE ANSWER WAS: 'WE AND OUR FAMILY FIRMS NAMELY M/S. ASSAM SUPARI T RADERS AND M/S. BALAJI PERFUMES GENERALLY TRY TO RECORD THE TRANSAC TIONS MADE IN RESPECT OF PURCHASE, MANUFACTURING AND SALES IN OUR REGULAR BOOKS OF ACCOUNTS BUT IT IS ALSO FACT THAT SOME TIME DUE TO SOME FACTORS LIKE INABILITY OF ACCOUNTANT, OUR BUSY SCHEDULE AND SOME FAMILY PROBLEMS, VARIOUS PURCHASES AND SALES OF SUPARI, GUTKA AND OT HER ITEMS DEALT BY OUR FIRMS IS NOT ENTERED AND SHOWN IN THE REGULAR B OOKS OF ACCOUNTS MAINTAINED BY OUR FIRMS.' 65. THEREFORE, THERE WAS A CLEAR ADMISSION BY THE ASSE SSEES IN SMT. DAYAWANTI GUPTA (SUPRA) THERE THAT THEY WERE NOT MA INTAINING REGULAR BOOKS OF ACCOUNTS AND THE TRANSACTIONS WERE NOT RECORDED THEREIN. 66. FURTHER, IN ANSWER TO QUESTION NO. 11, THE ASSESSE E IN SMT. DAYAWANTI GUPTA (SUPRA) WAS CONFRONTED WITH CERTAIN DOCUMENTS SEIZED DURING THE SEARCH. THE ANSWER WAS CATEGORICAL AND READS THUS: 'ANS:- I HEREBY ADMIT THAT THESE PAPERS ALSO CONTEN D DETAILS OF VARIOUS TRANSACTIONS INCLUDE PURCHASE/SALES/MANUFACTURING T RADING OF GUTKHA, SUPARI MADE IN CASH OUTSIDE BOOKS OF ACCOUNTS AND T HESE ARE ACTUALLY UNACCOUNTED TRANSACTIONS MADE BY OUR TWO FIRMS NAME LY M/S. ASOM TRADING AND M/S. BALAJI PERFUMES.' 37 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. 67. BY CONTRAST, THERE IS NO SUCH STATEMENT IN THE PRE SENT CASE WHICH CAN BE SAID TO CONSTITUTE AN ADMISSION BY THE ASSESSEE OF A FAILURE TO RECORD ANY TRANSACTION IN THE ACCOUNTS OF THE ASSESSEE FOR THE AYS IN QUESTION. ON THE CONTRARY, THE ASSESSEE HEREIN STATED THAT, HE IS RE GULARLY MAINTAINING THE BOOKS OF ACCOUNTS. THE DISCLOSURE MADE IN THE SUM O F RS. 1.10 CRORES WAS ONLY FOR THE YEAR OF SEARCH AND NOT FOR THE EARLIER YEARS. AS ALREADY NOTICED, THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE IN THE PRESENT CASE HAVE BEEN ACCEPTED BY THE AO. IN RESPONSE TO QUESTION NO . 16 POSED TO MR. PAWAN GADIA, HE STATED THAT THERE WAS NO POSSIBILITY OF M ANIPULATION OF THE ACCOUNTS. IN SMT. DAYAWANTI GUPTA (SUPRA), BY CONTRAST, THERE WAS A CHART PREPARED CONFIRMING THAT THERE HAD BEEN A YEAR-WISE NON-RECO RDING OF TRANSACTIONS. IN SMT. DAYAWANTI GUPTA (SUPRA), ON THE BASIS OF MA TERIAL RECOVERED DURING SEARCH, THE ADDITIONS WHICH WERE MADE FOR ALL THE Y EARS WHEREAS ADDITIONS IN THE PRESENT CASE WERE MADE BY THE AO ONLY FOR AY 20 04-05 AND NOT ANY OF THE OTHER YEARS. EVEN THE ADDITIONS MADE FOR AYS 20 04-05 WERE SUBSEQUENTLY DELETED BY THE CIT (A), WHICH ORDER WAS AFFIRMED BY THE ITAT. EVEN THE REVENUE HAS CHALLENGED ONLY TWO OF SUCH DELETIONS I N ITA NO. 306/2017. 68. IN PARA 23 OF THE DECISION IN SMT. DAYAWANTI GUPTA (SUPRA), IT WAS OBSERVED AS UNDER: '23. THIS COURT IS OF OPINION THAT THE ITAT'S FINDI NGS DO NOT REVEAL ANY FUNDAMENTAL ERROR, CALLING FOR CORRECTION. THE INFE RENCES DRAWN IN RESPECT OF UNDECLARED INCOME WERE PREMISED ON THE M ATERIALS FOUND AS WELL AS THE STATEMENTS RECORDED BY THE ASSESSEES. T HESE ADDITIONS THEREFORE WERE NOT BASELESS. GIVEN THAT THE ASSESSI NG AUTHORITIES IN SUCH CASES HAVE TO DRAW INFERENCES, BECAUSE OF THE NATURE OF THE MATERIALS - SINCE THEY COULD BE SCANTY (AS ONE HABI TUALLY CONCEALING INCOME OR INDULGING IN CLANDESTINE OPERATIONS CAN H ARDLY BE EXPECTED TO MAINTAIN METICULOUS BOOKS OR RECORDS FOR LONG AN D IN ALL PROBABILITY BE ANXIOUS TO DO AWAY WITH SUCH EVIDENCE AT THE SHO RTEST POSSIBILITY) THE ELEMENT OF GUESS WORK IS TO HAVE SOME REASONABL E NEXUS WITH THE STATEMENTS RECORDED AND DOCUMENTS SEIZED. IN TILLS CASE, THE DIFFERENCES OF OPINION BETWEEN THE CIT (A) ON THE O NE HAND AND THE AO AND ITAT ON THE OTHER CANNOT BE THE SOLE BASIS F OR DISAGREEING WITH WHAT IS ESSENTIALLY A FACTUAL SURMISE THAT IS LOGIC AL AND PLAUSIBLE. THESE FINDINGS DO NOT CALL FOR INTERFERENCE. THE SECOND Q UESTION OF LAW IS ANSWERED AGAIN IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE.' 69. WHAT WEIGHED WITH THE COURT IN THE ABOVE DECISION WAS THE 'HABITUAL CONCEALING OF INCOME AND INDULGING IN CLANDESTINE O PERATIONS' AND THAT A PERSON INDULGING IN SUCH ACTIVITIES 'CAN HARDLY BE ACCEPTED TO MAINTAIN 38 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. METICULOUS BOOKS OR RECORDS FOR LONG.' THESE FACTOR S ARE ABSENT IN THE PRESENT CASE. THERE WAS NO JUSTIFICATION AT ALL FOR THE AO TO PROCEED ON SURMISES AND ESTIMATES WITHOUT THERE BEING ANY INCRIMINATING MAT ERIAL QUA THE AY FOR WHICH HE SOUGHT TO MAKE ADDITIONS OF FRANCHISEE COMMISSIO N. 70. THE ABOVE DISTINGUISHING FACTORS IN SMT. DAYAWANTI GUPTA (SUPRA), THEREFORE, DO NOT DETRACT FROM THE SETTLED LEGAL PO SITION IN KABUL CHAWLA(SUPRA) WHICH HAS BEEN FOLLOWED NOT ONLY BY T HIS COURT IN ITS SUBSEQUENT DECISIONS BUT ALSO BY SEVERAL OTHER HIGH COURTS. 71. FOR ALL OF THE AFOREMENTIONED REASONS, THE COURT I S OF THE VIEW THAT THE ITAT WAS JUSTIFIED IN HOLDING THAT THE INVOCATION O F SECTION 153A BY THE REVENUE FOR THE AYS 2000-01 TO 2003-04 WAS WITHOUT ANY LEGAL BASIS AS THERE WAS NO INCRIMINATING MATERIAL QUA EACH OF THOSE AYS . CONCLUSION 72. TO CONCLUDE: (I ) QUESTION (I) IS ANSWERED IN THE NEGATIVE I.E., IN F AVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. IT IS HELD THAT IN THE FACTS A ND CIRCUMSTANCES, THE REVENUE WAS NOT JUSTIFIED IN INVOKING SECTION 153A OF THE ACT AGAINST THE ASSESSEE IN RELATION TO AYS 2000-01 TO AYS 2003-04? (II ) QUESTION (II) IS ANSWERED IN THE AFFIRMATIVE I.E., IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. IT IS HELD THAT WITH REFERENCE TO AY 2004- 05, THE ITAT WAS CORRECT IN CONFIRMING THE ORDERS OF THE CIT (A) TO THE EXTENT IT DELETED THE ADDITIONS MADE BY THE AO TO THE TAXABLE INCOME OF T HE ASSESSEE OF FRANCHISE COMMISSION IN THE SUM OF RS. 88 LAKHS AND REN T PAYMENT FOR THE SUM OF RS. 13.79 LAKHS? ACCORDINGLY, IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE THAT THE ASSESSMENT IN QUESTION WAS FRAMED U/S 153A IS NOT B ASED ON ANY INCRIMINATING MATERIAL FOUND OR SEIZED AND THEREFO RE, THE ADDITION MADE BY THE AO OF RS. 26,183/- ON ACCOUNT OF EMPLOYEES CONT RIBUTION TO ESI AND PF IS NOT JUSTIFIED AND THE SAME IS DELETED BY FOLLOWING DECISIONS OF DELHI HIGH COURT IN CASE PR. CIT VS. MEETA GUTGUTIA (SUPRA). 39 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. THEREFORE, WHEN THE ADDITION IS NOT BASED ON THE SE IZED MATERIAL THEN THE LD. CIT (A) HAS NO JURISDICTION EVEN HAVING CONCURRENCE POWER O F THE AO TO MAKE ANY ADDITION IN THE ASSESSMENT FRAMED UNDER SECTION 153A. ACCORD INGLY, THE ADDITION MADE BY THE LD. CIT (A) OF RS. 50,00,000/- IS NOT SUSTAINABLE A ND ACCORDING DELETED. 12. AS REGARDS THE ISSUE RAISED BY THE REVENUE IN T HE CROSS APPEAL, THERE IS NO DISPUTE THAT THE AO MADE ONLY A PROTECTIVE ADDITION IN THE HANDS OF THE ASSESSEE AND, THEREFORE, THE AO CANNOT GO BEYOND THE ASSESSM ENT ORDER. THE REVENUE IS SEEKING THE ADDITION ON THE BASIS OF THE REMAND REP ORT WHICH IS NOT THE CASE OF THE AO IN THE ASSESSMENT PASSED UNDER SECTION 153A. THE REFORE, APPLYING THE SAME PRINCIPLE OF ADDITION WITHOUT ANY INCRIMINATING MAT ERIAL DISCLOSING THE INCOME OF THE ASSESSEE, WE DO NOT FIND ANY MERIT OR SUBSTANCE IN THE APPEAL FILED BY THE REVENUE. THE SAME IS DISMISSED. 13. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED AND APPEAL OF THE REVENUE IS DISMISSED. ITA NO. 294/JP/2017 (ASSESSEE) ITA NO. 521/JP/2017 (REVENUE) 14. THE ASSESSEE AND THE REVENUE HAS RAISED THE RES PECTIVE GROUNDS AS UNDER :- ITA NO. 294/JP/2017 (ASSESSEE) 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT (A) HAS ERRED CONFIRMING THE ORDER PASSED BY THE LEARNED AS SESSING OFFICER U/S 143(3)/153A OF THE INCOME TAX ACT, 1961 WHICH IS VO ID AB-INITIO DESERVES TO BE QUASHED. 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE TH E LEARNED CIT (A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 1,01,99,728 /- (SUBSTANTIVE BASIS) ON THE BASIS OF PAGE NO. 57 PERTAINS TO JAMN A VIHAR, TEELAWALA PROPERTY SEIZED FROM RESIDENTIAL PREMISES OF SHRI M ADAN MOHAN GUPTA WHEREAS THE PROPERTY BELONGS TO M/S. HEMANG CONSTRU CTION PVT. LTYD. 40 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. 3. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE TH E LEARNED CIT (A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 9,00,000/ ( SUBSTANTIVE BASIS) ON THE BASIS OF PAGE NO. 64 OF ANNEXURE-A EXHIBIT-1 PE RTAINS TO JAMNA VIHAR, TEELAWALA PROPERTY SEIZED FROM RESIDENTIAL P REMISES OF SHRI MADAN MOHAN GUPTA. 4. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE TH E LEARNED CIT (A) HAS ERRED IN GIVING THE FINDING THAT THE LAND DEAL WAS MADE BY SHRI RAJENDRA KUMAR JAIN AND HE IS THE PERSON WHO PURCHA SED THE LAND AND SOLD TO NAVRATAN KOTHARI AND VIMAL CHAND SURANA AND SHRI MADAN MOHAN GUPTA WAS ONLY NAME LENDER. 5. THE ASSESSEE CRAVES YOUR INDULGENCE TO ADD, AMEN D OR ALTER ALL OR ANY GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. ITA NO. 521/JP/2017 (REVENUE) : 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT (A) WAS RIGHT IN DELETING THE PROTECTIVE ADDITI ON OF RS. 3,86,35,000/- MADE BY THE AO ON ACCOUNT OF UNDISCLO SED INVESTMENT QUANTIFIED ON THE BASIS OF SEIZED DOCUME NTS WHEN THE SUBSTANTIVE ADDITION MADE IN THE HANDS OF SH MA DAN MOHAN GUPTA HAS ALSO BEEN DELETED BY THE LD. CIT (A) IN A SEPARATE ORDER. 2. THE APPELLANT CRAVE, LEAVE OR RESERVES THE RIGHT TO AMEND MODIFY, ALTER, ADD OR FOREGO ANY GROUND(S) OF APPEA L AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 15. GROUND NO. 1 IS REGARDING VALIDITY OF ASSESSMENT PASSED UNDER S ECTION 153A READ WITH SECTION 143(3). THIS ISSUE IS COMMON AS R AISED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2009-10. IN VIEW OF OUR FINDING ON THIS ISSUE FOR THE ASSESSMENT YEAR 2009-10, THE SAME STANDS DISPOSED OFF IN TERMS OF OUR FINDING FOR THE ASSESSMENT YEAR 2009-10. 16. GROUND NO. 2 IS REGARDING THE ADDITION OF RS. 1,01,99,728/- SUS TAINED BY LD. CIT (A). THE AO IN THE ASSESSMENT FRAMED UNDER SEC TION 153A READ WITH SECTION 41 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. 143(3) HAS MADE AN ADDITION OF RS. 1,01,99,728/- WI TH REFERENCE TO PAGES NO. 55 TO 58 OF EXHIBIT-1 FOUND AND SEIZED FROM THE RESIDENTI AL PREMISES OF SHRI MADAN MOHAN GUPTA DURING THE SEARCH CARRIED ON 23 RD MAY, 2013. SHRI MADAN MOHAN GUPTA IN HIS STATEMENT RECORDED DURING THE SEARCH AND SEIZURE AC TION HAS EXPLAINED THAT THESE PAGES CONTAIN ACCOUNTS OF PLOTS OF SHRI RAJENDRA KU MAR JAIN, THE ASSESSEE BEFORE US, WHICH WAS PURCHASED THROUGH HIM. ACCORDINGLY THE AO BY CONSIDERING THE AMOUNTS RECORDED IN PAGES 55-58 OF EXHIBIT-1 AND EXPLANATIO N GIVEN BY SHRI MADAN MOHAN GUPTA TREATED THE SAME AS UNDISCLOSED INCOME OF THE ASSESSEE AND MADE THE ADDITION OF THE SAID AMOUNT OF RS. 1,01,99,728/-. T HE ASSESSEE CHALLENGED THE ACTION OF THE AO BEFORE THE LD. CIT (A) AND SUBMITTED THAT THESE SEIZED MATERIAL AND PARTICULARLY PAGES 55-58 OF ANNEXURE-1 DO NOT DISCL OSE ANY TRANSACTION RELATED TO THE ASSESSEE. THE AO HAS NOT MADE ANY REFERENCE OF CONT ENTS OF THESE SEIZED MATERIALS AND HAS MADE THE ADDITION ONLY WITH REFERENCE TO PA GE NO. 57 OF ANNEXURE-1 OF THE SEIZED MATERIAL. THUS THE ASSESSEE CONTENDED THAT EVEN THE NAME OF THE ASSESSEE DOES NOT APPEAR IN ANY OF THE SEIZED MATERIAL AND, THEREFORE, THE SEIZED DOCUMENTS DO NOT DISCLOSE ANY INCOME OR ANY CONNECTION OF THE SE TRANSACTIONS WITH THE ASSESSEE. THE ORDER OF THE AO IS BASED ON THE STAT EMENT OF SHRI MADAN MOHAN GUPTA WHO HAS MADE THE SAME AS SELF SERVING STATEME NT TO PROTECT HIMSELF. THE LD. CIT (A) ISSUED A REMAND ORDER AND AFTER RECEIVING T HE REMAND REPORT FROM THE AO HAS SUSTAINED THE ADDITION MADE BY THE AO. 17. BEFORE US, THE LD. A/R OF THE ASSESSEE HAS SUBM ITTED THAT THERE IS NOTHING IN THE SEIZED MATERIAL AS REFERRED BY THE AO WHICH REL ATES TO THE TRANSACTION OF PURCHASE OF PLOT BY THE ASSESSEE. FURTHER, THERE I S NO NAME, DATE AGAINST ANY OF THE TRANSACTIONS AND, THEREFORE, IT IS NOT CLEAR FROM T HE SEIZED MATERIAL THAT WHICH YEAR 42 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. THIS TRANSACTION PERTAINS TO. THE SEIZED MATERIAL WAS FOUND FROM THE POSSESSION OF SHRI MADAN MOHAN GUPTA AND THE SAME CAN BE CONSIDER ED FOR ASSESSING THE UNDISCLOSED INCOME OF SHRI MADAN MOHAN GUPTA AND NO T IN THE HANDS OF THE ASSESSEE. THESE DOCUMENTS ARE DUMB WITHOUT MENTION ING DATES, NAMES OR NATURE OF TRANSACTION. THEREFORE, THE SAME CANNOT BE A BAS IS FOR MAKING THE ADDITION. IN SUPPORT OF HIS CONTENTION, HE HAS RELIED UPON THE D ECISION OF THIS TRIBUNAL IN THE CASE OF SHRI MOOLCHAND KUMAWAT & SONS VS. DCIT DATED 20 TH FEBRUARY, 2009 IN MA NO. 93/JP/2008 ARISING OUT OF ITSSA NO. 24/JP/2005. TH E AO HAS NOT MADE OUT THE CASE OF LINKING THESE TRANSACTIONS WITH THE BUSINESS AFF AIRS OF THE ASSESSEE, THUS THE AO HAS FAILED TO DISCHARGE HIS DUTY AND MAKING THE ADD ITION IN THE HANDS OF THE ASSESSEE. SOME OF THE TRANSACTIONS ARE HAVING THE DATES WHICH PERTAIN TO FINANCIAL YEAR 2008-09 AND, THEREFORE, ARE NOT RELATED TO THE ASSESSMENT YEAR UNDER CONSIDERATION. THE LD. A/R HAS REFERRED TO ANNEXURE -A PAGE 55 OF THE SEIZED DOCUMENT AND SUBMITTED THAT THE TRANSACTIONS FROM D ATE 30 TH JULY, 2008 TO 7 TH FEBRUARY, 2009 DO NOT PERTAIN TO THE ASSESSMENT YEA R UNDER CONSIDERATION AND, THEREFORE, THE AO HAS COMMITTED A GROSS ERROR IN TA KING ALL THE AMOUNTS AGAINST THIS TRANSACTION AS INCOME OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. FURTHER, EXCEPT THE STATEMENT OF SHRI MADAN MOHAN GUPTA, THE RE IS NOTHING IN THE SEIZED MATERIAL THAT THESE TRANSACTIONS ARE RELATED TO THE ASSESSEE. THE LD. A/R HAS FURTHER SUBMITTED THAT THE ADDITION IS BASED ON THE STATEME NT OF SHRI MADAN MOHAN GUPTA WHEREAS THE ASSESSEE WAS NOT ALLOWED TO CROSS EXAMI NE SHRI MADAN MOHAN GUPTA AND, THEREFORE, THE ASSESSMENT ORDER BASED ON THE S TATEMENT WITHOUT GIVING THE OPPORTUNITY OF CROSS EXAMINATION IS NOT SUSTAINABLE IN LAW. IN SUPPORT OF HIS CONTENTION, HE HAS RELIED UPON THE DECISION OF HON BLE SUPREME COURT IN THE CASE OF 43 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. ANDAMAN TIMBER INDUSTRIES VS. COMMISSION OF CENTRAL EXCISE, 281 CTR 241 (SC) AND SUBMITTED THAT THE HONBLE SUPREME COURT HAS HELD T HAT NOT ALLOWING ASSESSEE TO CROSS EXAMINE THE WITNESS IS A SERIOUS FLAW WHICH M AKES THE ORDER NULLITY IN AS MUCH AS IT AMOUNTED TO VIOLATION OF PRINCIPLES OF NATURA L JUSTICE. THE LD. A/R HAS ALSO RELIED UPON THE DECISION OF HONBLE ORISSA HIGH COU RT IN THE CASE OF CIT VS. BIJU PATNAIK, 190 ITR 396 (ORI.) AND SUBMITTED THAT IF A N ORDER IS PASSED WITHOUT GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE TO REBUT THE STATEMENT OF THE WITNESS, IT IS IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. THE LD. A/R HAS ALSO RELIED UPON VARIOUS DECISIONS ON THIS POINT. IN SUPPORT OF HIS CONTENT ION THAT THE DOCUMENT AS RELIED UPON BY THE AO FOR MAKING THE ADDITION ARE DUMB, NO T EXPLAINING ANY SPECIFIC TRANSACTION OR TIME OF THE TRANSACTION THEN NO ADDI TION IS REQUIRED TO BE MADE ON THE BASIS OF SUCH ROUGH AND DUMB PAPERS. HE HAS RELIE D UPON THE DECISION OF DELHI BENCH OF THE TRIBUNAL IN THE CASE OF MAHAAN FOODS L TD. VS. DCIT, 27 DTR 185 AS WELL AS THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF JAYANTI LAL PATEL VS. ACIT, 233 ITR 588 (RAJ.). 17.1. ON THE OTHER HAND, THE LD. D/R HAS SUBMITTED THAT THE ASSESSEE IS DIRECTOR OF THE COMPANY AND ON MONEY WAS PAID FOR PURCHASE OF L AND. IN THE STATEMENT RECORDED UNDER SECTION 131, THE ASSESSEE HAS ADMITT ED THAT SHRI MADAN MOHAN GUPTA WAS APPOINTED AS DIRECTOR OF M/S. HEMANG CONS TRUCTION PVT. LTD. ALL THE 12 PLOTS WERE ADJOINING TO THE EXISTING PLOT OF M/S. H EMANG CONSTRUCTION PVT. LTD WHICH DOES NOT HAVE ANY EXCESS TO THE ROAD. THIS FACT HAS BEEN EXPLAINED BY SHRI MADAN MOHAN GUPTA THAT THESE PLOTS WERE PURCHASED ON BEHA LF OF THE ASSESSEE AND PARTICULARLY ON BEHALF OF THE COMPANY M/S. HEMANG C ONSTRUCTION PVT. LTD. HE HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 44 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. 18. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WEL L AS RELEVANT MATERIAL ON RECORD. AS PER THE PAGES 55-58 OF ANNEXURE-1 OF SEI ZED MATERIAL, THE AO NOTED THAT THERE ARE TOTAL 18 PLOTS PURCHASED BY M/S. HEMANG C ONSTRUCTION PVT. LTD. THROUGH THE DIRECTOR SHRI RAJENDRA KUMAR JAIN, THE ASSESSEE . THE SAID ACTION OF PURCHASE OF LAND COMPLETED IN THE MONTHS OF MAY AND JUNE, 2009. THE AO FURTHER NOTED THAT AS PER THE DETAILS OF THE PLOTS GIVEN IN THE SALE DEED , 12 PLOTS ARE MATCHING AS FOUND IN PAGE 57. HOWEVER, IN THE SALE DEED, NUMBERS WERE N OT MENTIONED IN RESPECT OF 2 PLOTS. THEREFORE, THE AO HAS TAKEN ALL THE 12 PLOT S FOUND RECORDED AT PAGE 57 OF THE SEIZED MATERIAL AS THE TRANSACTION IN WHICH ON MONE Y OF RS. 1,01,99,728/- WAS PAID BY THE ASSESSEE. THE RELEVANT DETAILS OF PLOTS AND FINDING OF THE AO ARE GIVEN IN PARA 6.6.4 AND 6.6.5 AS UNDER :- 6.6.4. ON GOING THROUGH THE PAGE NO. 57 AS WELL AS DETAILS PRODUCED BY THE ASSESSEE, IT IS GATHERED THAT THERE IS A VIT AL DIFFERENCE BETWEEN SALE PRICE MENTIONED IN THE REGISTRIES AND THE DETAILS M ENTIONED ON THIS PAGE. THE SAME IS SUMMARIZED AS UNDER :- S. NO. PLO T NO . AREA (SQ.YDS) RATE (PER SQ.YDS.) AS MENTIONED ON PAGE NO. 57. TOTAL AMOUNT AS PER DETAILS MENTIONED ON PAGE NO. 57. SALE CONSIDERATION SHOWN IN SALE DEED DIFFERENCE 1 16 260.00 5800 15,08,000 5,43,456 9,65,535 2 17 260.00 4900 12,74,000 5,43,465 7,30,535 3 29 216.66 5800 12,56,628 4,52,873 8,03,755 4 32 216.66 5800 12,56,628 4,52,850 8,03,755 5 52 200.00 5100 10,20,000 4,18,050 6,01,950 6 53 200.00 5800 11,60,000 4,18,050 7,41,950 7 79 260.00 5800 15,08,000 5,43,465 9,64,535 8 80 260.00 5800 15,08,000 5,43,465 9,64,535 9 81 260.00 5800 15,08,000 5,43,465 9,64,535 45 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. 10 82 260.00 4900 12,74,000 5,43,465 7,30,535 11 83 260.00 5800 15,08,000 5,43,465 9,65,535 12 84 260.00 5800 15,08,000 5,43,450 9,64,550 TOTAL : 1,62,89,256 60,89,528 1,01,99,728 6.6.5. FROM THE ABOVE DISCUSSION, IT IS VERY MUCH CLEAR THAT THERE IS SUBSTANTIAL DIFFERENCE OF RS. 1,01,99,728/- BETWEEN THE TRANSACTIONS RECORDED IN THE BOOKS OF ACCOUNTS AND THE DETAILS MENTIONED ON PAGE NO. 57 AND THE SAME IS TO BE TREATED AS UNDISCLOSED INCOME OF THE ASSESSEE WHICH HE HAS INVESTED FOR PURCHASE OF PLOTS AT JAMNA VIHAR, TEEL AWALA IN THE NAME OF HIS COMPANY M/S. HEMANG CONSTRUCTION PVT. LTD. TO PROTE CT THE INTEREST OF REVENUE, PROTECTIVE ADDITION IN THE HANDS OF M/S. H EMANG CONSTRUCTION PVT. LTD. IS ALSO BEING MADE AS THE PURCHASES HAVE BEEN MADE IN ITS NAME. FURTHER, TO PROTECT THE INTEREST OF REVENUE, PROTEC TIVE ADDITION OF THIS AMOUNT OF RS. 1,01,99,728/- IS BEING MADE IN THE CASE OF S HRI MADAN MOHAN GUPTA ALSO FOR THIS ASSESSMENT YEAR BECAUSE THESE PAPERS WERE FOUND FROM THE PREMISES OF HIM AND HE IS LIABLE TO EXPLAIN THESE P APERS AS PER THE PROVISIONS OF SECTION 292C OF THE ACT. THUS, SUBSTANTIVE ADDIT ION OF RS. 1,01,99,728/- IS HEREBY MADE IN THE TOTAL INCOME OF THE ASSESSEE AS UNACCOUNTED INVESTMENT IN PURCHASE OF PLOTS. THEREFORE, PENALTY PROCEEDING S U/S 271(1)(C) OF THE ACT FOR CONCEALMENT OF INCOME/FOR FURNISHING INACCURATE PARTICULARS OF INCOME ARE BEING INITIATED SEPARATELY. THE AO HAS ADMITTED THIS FACT AND IT IS ALSO A MATT ER OF UNDISPUTED FACT THAT THESE PLOTS OF LAND WERE PURCHASED BY M/S. HEMANG CONSTRU CTION PVT. LTD. AND ASSESSEE AS WELL AS SHRI MADAN MOHAN GUPTA WERE THE DIRECTOR S OF THE SAID COMPANY. THE DETAILS FOUND RECORDED AT PAGE 57 OF THE ANNEXURE-1 OF SEIZED MATERIAL SHOWS THE DIFFERENCE BETWEEN THE AMOUNTS OF PURCHASE CONSIDER ATION SHOWN IN THE SALE DEED AND THE ACTUAL SALE CONSIDERATION PAID IN RESPECT O F THESE PLOTS. WITHOUT GOING INTO THE CONTROVERSY WHETHER THESE TWO AMOUNTS AS FOUND IN THE SEIZED MATERIAL REPRESENT THE ON-MONEY FOR PURCHASE OF THE PLOT OF LAND, WE NOTE THAT THE TRANSACTION OF PURCHASE IS IN THE NAME OF M/S. HEMA NG CONSTRUCTION PVT. LTD. AND NOT IN THE NAME OF THE ASSESSEE. THUS THE AO HAS PR ESUMED THAT ON MONEY HAS 46 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. BEEN PAID BY THE ASSESSEE FROM HIS UNDISCLOSED INCO ME ON THE BASIS OF STATEMENT OF SHRI MADAN MOHAN GUPTA WHO HAS EXPLAINED THE DIFFER ENCE AMOUNT AS THE CASH CONSIDERATION WHICH WAS PAID TO THE SELLER AFTER RE CEIVING THE SAME FROM THE ASSESSEE. PRIMA FACIE IF A TRANSACTION IS CARRIED OUT BETWEEN TWO PARTIES THEN ANY ON MONEY RECEIVED IN THE SAID TRANSACTION HAS TO BE CO NSIDERED AS PAID BY THE PURCHASER. IN THE CASE IN HAND WHEN THE LAND IN QUE STION WAS PURCHASED BY M/S. HEMANG CONSTRUCTION PVT. LTD. AND NOT IN THE PERSON AL NAME OF THE ASSESSEE THEN IN THE ABSENCE OF ANY MATERIAL TO SHOW THAT THE DIFFER ENCE AMOUNT WAS PAID BY THE ASSESSEE FROM UNACCOUNTED OR UNDISCLOSED INCOME OF THE ASSESSEE, THE SAME CANNOT BE CONSIDERED AS THE UNDISCLOSED INCOME OF THE ASSE SSEE. FURTHER, THE AO HAS RELIED UPON THE STATEMENT OF SHRI MADAN MOHAN GUPTA WITHOU T ALLOWING THE ASSESSEE TO CROSS EXAMINE SHRI MADAN MOHAN GUPTA. THE AO HAS R EPRODUCED THE REPLY OF THE ASSESSEE IN PARA 6.5 AND IN THE LAST PART OF THE RE PLY WHEREBY THE ASSESSEE HAS CLEARLY DEMANDED CROSS EXAMINATION OF SHRI MADAN MO HAN GUPTA AS UNDER :- CROSS EXAMINATION OF SHRI MADAN MOHAN GUPTA : IT IS FURTHER SUBMITTED THAT BEFORE COMPLETION OF A SSESSMENT YOU ARE REQUESTED TO PROVIDE OPPORTUNITY TO CROSS EXAMINE O F SHRI MADAN MOHAN GUPTA WITH RESPECT TO PAGE NO. 57 FOUND AND S EIZED FROM HIM. KINDLY ALSO FURNISH A COPY OF PAGE NO. 57. WE TOTAL LY DENY REGARDING THE CONTENTS OF THE PAGE NO. 57. THEREFORE, IT IS MANIFEST FROM THE ASSESSMENT ORDER THAT THE ASSESSEE DEMANDED THE CROSS EXAMINATION OF SHRI MADAN MOHAN GUPTA AS WELL AS A COPY OF PAGE 57 OF THE SEIZED DOCUMENT. HOWEVER, THE AO HAS NOT ALLOWED T HE ASSESSEE CROSS EXAMINATION 47 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. OF SHRI MADAN MOHAN GUPTA. IT IS SETTLED POSITION OF LAW THAT IF THE ASSESSMENT ORDER IS BASED ON A STATEMENT OF A WITNESS WITHOUT GIVING AN OPPORTUNITY TO THE ASSESSEE TO CROSS EXAMINE THEN THE SAID ORDER SUFFE RS FROM A SERIOUS FLAW AND IS INVALID. THE HONBLE SUPREME COURT IN THE CASE OF A NDAMAN TIMBER INDUSTRIES VS. CCE (SUPRA) HAS HELD IN PARA 6 AS UNDER :- 6. ACCORDING TO US, NOT ALLOWING THE ASSESSEE TO C ROSS-EXAMINE THE WITNESSES BY THE ADJUDICATING AUTHORITY THOUGH THE STATEMENTS OF THOSE WITNESSES WERE MADE THE BASIS OF THE IMPUGNED ORDER IS A SERIOUS FLAW WHICH MAKES THE ORDER NULLITY INASMUCH AS IT AMOUNTED TO VIOLATION OF PRINCIPLES OF NATURAL JUSTICE BECAUSE OF WHICH THE ASSESSEE WAS ADVERSELY AFFECTED. IT IS TO BE BORNE IN MIND T HAT THE ORDER OF THE COMMISSIONER WAS BASED UPON THE STATEMENTS GIVEN BY THE AFORESAID TWO WITNESSES. EVEN WHEN THE ASSESSEE DISPUTED THE CORRECTNESS OF THE STATEMENTS AND WANTED TO CROSS-EXAMINE, THE ADJ UDICATING AUTHORITY DID NOT GRANT THIS OPPORTUNITY TO THE ASS ESSEE. IT WOULD BE PERTINENT TO NOTE THAT IN THE IMPUGNED ORDER PASSED BY THE ADJUDICATING AUTHORITY HE HAS SPECIFICALLY MENTIONE D THAT SUCH AN OPPORTUNITY WAS SOUGHT BY THE ASSESSEE. HOWEVER, NO SUCH OPPORTUNITY WAS GRANTED AND THE AFORESAID PLEA IS NOT EVEN DEAL T WITH BY THE ADJUDICATING AUTHORITY. AS FAR AS THE TRIBUNAL IS C ONCERNED, WE FIND THAT REJECTION OF THIS PLEA IS TOTALLY UNTENABLE. T HE TRIBUNAL HAS SIMPLY STATED THAT CROSS-EXAMINATION OF THE SAID DEALERS C OULD NOT HAVE BROUGHT OUT ANY MATERIAL WHICH WOULD NOT BE IN POSS ESSION OF THE APPELLANT THEMSELVES TO EXPLAIN AS TO WHY THEIR EX- FACTORY PRICES REMAIN STATIC. IT WAS NOT FOR THE TRIBUNAL TO HAVE GUESS WORK AS TO FOR WHAT PURPOSES THE APPELLANT WANTED TO CROSS-EXAMINE THOSE DEALERS AND WHAT EXTRACTION THE APPELLANT WANTED FROM THEM. THUS IT IS CLEAR THAT IF AN ORDER IS MADE ON THE BA SIS OF THE STATEMENT OF AN WITNESS WITHOUT GIVING AN OPPORTUNITY OF CROSS EXAMINATIO N THEN THE SAID ORDER SUFFERS FROM SERIOUS FLAW WHICH RENDERS THE ORDER NULLITY I N AS MUCH AS IT AMOUNTS TO VIOLATION OF PRINCIPLES OF NATURAL JUSTICE AND ADVE RSELY AFFECTING THE ASSESSEE. IN THE 48 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. CASE IN HAND THE TRANSACTIONS RECORDED IN THE SEIZE D DOCUMENTS CLEARLY PERTAINS TO THE PURCHASE OF LAND IN THE NAME OF THE COMPANY AND , THEREFORE, THE SEIZED DOCUMENTS DO NOT REVEAL WHO HAS PAID ON MONEY IN TH E SAID TRANSACTION. THE AO HAS HELD THAT THE ON MONEY IS PAID BY THE ASSESSEE WHEREAS THE TRANSACTION WAS IN THE NAME OF THE COMPANY M/S. HEMANG CONSTRUCTION PV T. LTD. FURTHER, WHEN ASSESSEE AS WELL AS SHRI MADAN MOHAN GUPTA BOTH WER E THE DIRECTORS OF THE SAID COMPANY THEN EXCEPT THE STATEMENT OF SHRI MADAN MOH AN GUPTA THERE WAS NO OTHER MATERIAL OR RECORD TO ESTABLISH THAT THE SAID ON MO NEY WAS PAID ONLY BY THE ASSESSEE AND NOT BY SHRI MADAN MOHAN GUPTA OR BY BOTH OR BY THE COMPANY. THEREFORE, THIS DECISION OF THE AO THAT THE ON MONEY WAS PAID BY TH E ASSESSEE IS ABSOLUTELY BASED ON THE STATEMENT OF SHRI MADAN MOHAN GUPTA AND SINC E SHRI MADAN MOHAN GUPTA WAS ONE OF THE DIRECTORS OF THE SAID COMPANY, THERE FORE, THE POSSIBILITY OF MAKING A SELF SERVING STATEMENT CANNOT BE RULED OUT. ACCORD INGLY, IN THE ABSENCE OF GIVING AN OPPORTUNITY TO THE ASSESSEE TO CROSS EXAMINE SHRI M ADAN MOHAN GUPTA, THE SAID FINDING OF THE AO IS NOT SUSTAINABLE IN LAW AND IN VIEW OF THE ABOVE DISCUSSION WE HOLD THAT THE ADDITION MADE BY THE AO IS NOT JUSTIF IED AND THE SAME IS DELETED. 19. GROUND NO. 3 IS REGARDING ADDITION OF RS. 9,00,000/- BEING ON M ONEY PAID IN RESPECT OF THE LAND AT JAMNA VIHAR, TEELAWALA. THE AO HAS NOTED THAT AS PER PAGE 64 OF EXHIBIT -1 WHICH WAS FOUND AND SEIZED FROM TH E RESIDENTIAL PREMISES OF SHRI MADAN MOHAN GUPTA DURING THE COURSE OF SEARCH, ON M ONEY OF RS. 9,00,000/- WAS PAID IN RESPECT OF THE LAND TRANSACTION AT JAMNA VI HAR, TEELAWALA. THE AO NOTED THAT THE TOTAL AMOUNT AS RECORDED AT PAGE 64 OF ANN EXURE-A EXHIBIT-1 IS RS. 49 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. 14,50,000/-, OUT OF WHICH RS. 9,00,000/- RELATES TO THE ASSESSMENT YEAR 2010-11 AND BALANCE RS. 5,50,000/- RELATES TO ASSESSMENT YEAR 2 011-12. THE AO ACCORDINGLY ISSUED A SHOW CAUSE FOR MAKING THE ADDITION OF RS. 9,00,000/-. IN REPLY, THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS NO CONNECT ION WITH THE SAID PAYMENT AS RECORDED IN THE SEIZED DOCUMENT TO SHRI MOOL CHAND. IT WAS FURTHER CONTENDED THAT ASSESSEE HAS NOT PURCHASED ANYTHING FROM SHRI MOOL CHAND. HOWEVER, THE AO FINALLY MADE THE ADDITION OF RS. 9,00,000/- IN THE HANDS OF THE ASSESSEE AND A PROTECTIVE ADDITION WAS MADE IN THE HANDS OF SHRI M ADAN MOHAN GUPTA. THE ASSESSEE CHALLENGED THE ACTION OF THE AO BEFORE LD. CIT (A) BUT COULD NOT SUCCEED. 20. WE HAVE HEARD THE LD. A/R AS WELL AS THE LD. D/ R AND HAS CONSIDERED THE RELEVANT MATERIAL ON RECORD. THE PAGE 64 OF ANNEXU RE-A EXHIBITG-1 OF THE SEIZED MATERIAL HAS BEEN SCANNED BY THE AO AT PAGE 17 OF H IS ORDER AS UNDER :- 50 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. 51 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. THUS IT IS CLEAR THAT THESE NOTINGS OF THE AMOUNT H AS BEEN MADE ON SPECIFIC DATES AND IN THE NAME OF SHRI MOOL CHAND. THE AO HAS TRE ATED THE SAID PAYMENT AS MADE BY THE ASSESSEE TO SHRI MOOL CHAND ON THE BASIS THA T IN THE PAST A GROUP COMPANY OF THE ASSESSEE NAMELY M/S. MOONSTONE APARTMENTS PVT. LTD. HAS PURCHASED LAND FROM SHRI MOOL CHAND. HOWEVER, THE SAID TRANSACTION OF PURCHASE OF LAND HAPPENED ON 3 RD JUNE, 2005. HOWEVER, THE AO HAS NOT BROUGHT ON RE CORD ANYTHING TO SHOW THAT THERE WAS ANY OTHER TRANSACTION OF PURCHASE OF LAND BY THE ASSESSEE OR ANY GROUP CONCERN OF THE ASSESSEE DURING THE YEAR 2010 AND, T HEREFORE, THESE NOTINGS IN THE DIARY CAN BE RELATED TO THE SAID TRANSACTION OF PUR CHASE OF LAND. THE AO HAS CONSIDERED THIS PAYMENT AS THE PAYMENT MADE BY THE ASSESSEE FOR PURCHASE OF LAND AS HELD IN PARA 7.6.3 AS UNDER :- 7.6.3. IN VIEW OF THE ABOVE, THE CASH PAYMENT OF RS.9,00,000/- FOUND RECORDED AS PAID TO MOOLCHAND DURING THIS AY ARE TO BE TREATED AS UNDISCLOSED INCOME OF THE ASSESSEE WHICH HE HAS INVESTED FOR PURCHASE OF PLOTS AT JAMNA VIHAR, TEELAWALA IN THE NAME OF HIS COMPANIES. HOWEVER, TO PROTECT THE INTEREST OF REVE NUE, PROTECTIVE ADDITION OF AN AMOUNT OF RS. 9,00,000/- HAS BEEN MA DE IN THE CASE OF SHRI MADAN MOHAN GUPTA FOR THIS ASSESSMENT YEAR BEC AUSE THESE PAPERS WERE FOUND FROM THE PREMISES OF HIM AND HE I S LIABLE TO EXPLAIN THESE PAPERS AS PER THE PROVISIONS OF SECTION 292C OF THE ACT. THUS, ADDITION OF RS. 9 LACS IS HEREBY MADE IN THE TOTAL INCOME OF THE ASSESSEE AS UNACCOUNTED INVESTMENT IN PURCHASE OF P LOTS. THEREFORE, PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT FOR CO NCEALMENT OF INCOME/FOR FURNISHING INACCURATE PARTICULARS OF INC OME ARE BEING INITIATED SEPARATELY. 52 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. THE ASSESSEE DENIED TO HAVE ENTERED ANY TRANSACTION OF PURCHASE OF LAND FROM SHRI MOOL CHAND. HOWEVER, THE AO WITHOUT BRINGING ANYTHI NG ON RECORD TO DISCLOSE ANY TRANSACTION OF PURCHASE OF LAND AS ALLEGED EITHER B Y THE ASSESSEE OR BY ANY GROUP COMPANY OF THE ASSESSEE HAS MADE THE ADDITION ONLY ON THE PRESUMPTION THAT WHEN A GROUP CONCERN OF THE ASSESSEE HAS PURCHASED LAND IN THE PAST THEN THIS PAYMENT MUST HAVE BEEN MADE BY THE ASSESSEE FOR PURCHASE OF LAND. IT IS PERTINENT TO NOTE THAT WHEN THE AO HAS TREATED THIS AS A PAYMENT MADE BY THE ASSESSEE FOR PURCHASE OF LAND THEN IN THE ABSENCE OF ACTUAL TRANSACTION O F PURCHASE OF LAND DURING THE YEAR UNDER CONSIDERATION OR EVEN IN THE SUBSEQUENT YEARS OR IN THE IMMEDIATELY PRECEDING YEAR, THE ADDITION MADE BY THE AO IS ABSOLUTELY BAS ED ON ASSUMPTION OF FACTS WITHOUT ANY MATERIAL DISCLOSING ANY TRANSACTION OF PURCHASE OF LAND OR PAYMENT MADE BY THE ASSESSEE. THEREFORE, WHEN THE DOCUMENT ITSELF DOES NOT REVEAL THE TRANSACTION OF PAYMENT BY THE ASSESSEE THEN THE PRE SUMPTION OF THIS FACT BASED ON THE STATEMENT OF SHRI MADAN MOHAN GUPTA WITHOUT AFF ORDING AN OPPORTUNITY TO THE ASSESSEE TO CROSS EXAMINE SHRI MADAN MOHAN GUPTA, T HE SAID ADDITION MADE BY THE AO IS NOT SUSTAINABLE. WE HAVE DISCUSSED THIS ISSU E OF VALIDITY OF DECISION OF THE AO BASED ON THE STATEMENT WITHOUT ALLOWING THE ASSESSE E TO CROSS EXAMINE WHILE DECIDING THE ISSUE IN GROUND NO. 2. ACCORDINGLY TH E ADDITION MADE BY THE AO IS NOT SUSTAINABLE AND THE SAME IS DELETED. 21. IN THE CROSS APPEAL THE REVENUE HAS CHALLENGED THE ORDER OF THE LD. CIT (A) WHEREBY THE PROTECTIVE ADDITION OF RS. 3,86,35,000/ - MADE BY THE AO WAS DELETED BY THE LD. CIT (A). THIS ISSUE IS COMMON AS THE IS SUE RAISED BY THE REVENUE FOR THE ASSESSMENT YEAR 2009-10. ACCORDINGLY, IN VIEW OF O UR FINDING FOR THE ASSESSMENT 53 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. YEAR 2009-10, WE DO NOT FIND ANY MERIT OR SUBSTANCE IN THE APPEAL OF THE REVENUE. THE SAME IS DISMISSED. ITA NO. 295/JP/2017 (ASSESSEE) : A.Y. 2011-12 : 22. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS : - 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT (A) HAS ERRED IN CONFIRMING THE ACTION OF THE LEARN ED ASSESSING OFFICER IN PASSING THE ORDER U/S 143(3)/153A OF THE INCOME TAX ACT, 1961 WHICH IS VOID AB INITIO DESERVES TO BE QU ASHED. 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE TH E LEARNED CIT (A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 5,5 0,000/- ON ACCOUNT OF UNACCOUNTED INVESTMENT IN PURCHASE OF PL OT/ON THE BASIS OF PAPERS SEIZED FROM RESIDENTIAL PREMISES OF SHRI MADAN MOHAN GUPTA WITHOUT BRINGING ANY NEW FACTS ON RECOR D. 3. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE TH E LEARNED CIT (A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 8,4 0,227/- U/S 50C OF THE INCOME TAX ACT, 1961 WITHOUT COMPARING T HE DLC RATE, WHEREAS THE PROPERTY HAS NO DLC RATE. 4. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE TH E LEARNED CIT (A) HAS ERRED IN GIVING THE FINDING THAT THE PAYMEN T MADE TO MOOLCHAND HAS BEEN MADE OUT OF BOOKS ON THE BASIS O F DOCUMENTS SEIZED FROM THIRD PARTY WITHOUT EXAMINING SHRI MOOLCHAND. 5. THE ASSESSEE CRAVES YOUR INDULGENCE TO ADD, AMEN D OR ALTER ALL OR ANY GROUNDS OF APPEAL BEFORE OR AT THE TIME OF H EARING. 23. GROUND NO. 1 IS REGARDING VALIDITY OF ORDER PASSED UNDER SECTIO N 153A READ WITH SECTION 143(3) OF THE ACT. 24. WE HAVE HEARD THE LD. A/R AS WELL AS THE LD. D/ R AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. SINCE THE ASSESSMENT PROCEEDIN GS FOR THE ASSESSMENT YEAR 54 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. UNDER CONSIDERATION WERE NOT CONCLUDED BUT PENDING AS ON THE DATE OF SEARCH, THEREFORE, THE SAME GOT ABATED BY VIRTUE OF SEARCH AND SEIZURE ACTION U/S 132. THIS ISSUE IS COMMON AS RAISED BY THE ASSESSEE FOR THE A SSESSMENT YEAR 2010-11. ACCORDINGLY AS FAR AS INITIATION OF PROCEEDINGS FOR REASSESSMENT U/S 153A IS CONCERNED, THE SAME WAS VALID. THE ADDITION MADE B Y THE AO WHILE FRAMING THE ASSESSMENT ARE TO BE DEALT WITH SEPARATELY IN OTHER GROUNDS OF APPEAL ACCORDINGLY, THIS GROUND IS DECIDED AGAINST THE ASSESSEE. 25. GROUND NO. 2 IS REGARDING THE ADDITION OF RS. 5,50,000/- ON ACC OUNT OF UNACCOUNTED INVESTMENT IN PURCHASE OF PLOT. THE AO HAS MADE AN ADDITION OF RS. 5,50,000/- ON ACCOUNT OF UNDISCLOSED INVESTMENT IN PURCHASE OF PLOT FROM ONE SHRI MOOLCHAND. THIS ADDITION IS BASED ON PAGE 64 OF EXH IBIT-1 WHEREIN THE TOTAL TRANSACTION RECORDED OF RS. 14,50,000/-, OUT OF WHI CH RS. 9,00,000/- WAS ADDED FOR THE ASSESSMENT YEAR 2010-11 AND BALANCE OF RS. 5,50 ,000/- WAS ADDED FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. THUS THIS ISS UE IS COMMON TO THE ISSUE RAISED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2010-11. 26. WE HAVE HEARD THE LD. A/R AS WELL AS THE LD. D/ R AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. AN IDENTICAL ISSUE OF ADDITION OF RS. 9,00,000/- ON ACCOUNT OF UNACCOUNTED INVESTMENT IN PURCHASE OF PLOT AS PER P AGE 64 OF EXHIBIT-1 HAS BEEN CONSIDERED BY US FOR THE ASSESSMENT YEAR 2010-11. A CCORDINGLY IN VIEW OF OUR FINDING ON THIS ISSUE FOR THE ASSESSMENT YEAR 2010-11, THE GROUND NO. 2 STANDS ADJUDICATED IN FAVOUR OF THE ASSESSEE. THE ADDITION MADE BY THE AO IS ACCORDINGLY DELETED. 27. GROUND NO. 3 IS REGARDING AN ADDITION OF RS.8,40,227/- BY INVOK ING THE PROVISIONS OF SECTION 50C OF THE IT ACT. THE ASSES SEE SOLD A PLOT NO. D-10, KESAV VIHAR, JAIPUR ON 21 ST APRIL, 2010 FOR A SUM OF RS. 6,25,000/- AND PAID C APITAL GAIN 55 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. TAX. THE AO IN THE ASSESSMENT COMPLETED UNDER SECT ION 153A HAS ADOPTED THE FULL VALUE CONSIDERATION AT RS. 14,65,227/- ON THE BASIS OF A REPORT OF SUB-REGISTRAR STAMPS, JAIPUR. THE ASSESSEE CHALLENGED THE ACTION OF THE AO BEFORE THE LD. CIT (A) AND CONTENDED THAT WHEN DLC RATES WERE NOT AVAILABL E FOR THE AREA IN WHICH THE PLOT OF LAND IN QUESTION IS SITUATED, WAS SOLD BY THE AS SESSEE THEN THE PROVISIONS OF SECTION 50C CANNOT BE APPLIED. FURTHER, THE VALUE ADOPTED BY THE AO IS NOT BASED ON THE STAMP VALUATION FOR THE PLOT IN QUESTION BUT THE SUB-REGISTRAR STAMPS HAS GIVEN THE DLC RATES OF SIDDHARTH NAGAR A BLOCK AN D HAS CLEARLY STATED THAT DLC RATES FOR KESAV VIHAR WERE NOT FIXED BY THE AUTHORI TIES. THE LD. CIT (A) DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE AND CONFIRMED THE ADDITION MADE BY THE AO. 28. BEFORE US, THE LD. A/R OF THE ASSESSEE HAS SUBM ITTED THAT THE AO HAS ADOPTED A SHORT CUT METHOD FOR MAKING THE ADDITION ON THIS ACCOUNT ON THE BASIS OF A LETTER FROM THE SUB REGISTRAR STAMPS WHICH HAS CLEARLY STA TED THAT THE DLC RATES FOR KESAV VIHAR ARE NOT FIXED. HE HAS FURTHER SUBMITTED THAT NO OPPORTUNITY WAS PROVIDED TO THE ASSESSEE BEFORE THE DLC RATES OF ANOTHER AREA W AS ADOPTED BY THE AO. HENCE, THE ADDITION MADE BY THE AO IS NOT SUSTAINABLE. TH E LD. A/R HAS SUBMITTED THAT WHEN THE DLC RATES WERE NOT AVAILABLE THEN IN THE A BSENCE OF ANY VALUATION BY DVO, THE AO IS NOT JUSTIFIED TO ADOPT THE RATES OF ANOTH ER AREA. 28.1. ON THE OTHER HAND, THE LD. D/R HAS RELIED UPO N THE ORDERS OF THE AUTHORITIES BELOW. 29. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WEL L AS RELEVANT MATERIAL ON RECORD. AT THE OUTSET, WE NOTE THAT DESPITE THE OB JECTIONS RAISED BY THE ASSESSEE AGAINST THE ADOPTION OF THE DLC RATES OF ADJOINING AREA, NAMELY, SIDDHARTH NAGAR, THE LD. CIT (A) HAS CONFIRMED THE ACTION OF THE AO IN PARA 3.3.2. AS UNDER :- 56 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. 3.3.2. I HAVE DULY CONSIDERED ASSESSEES SUBMISSI ON AND CAREFULLY GONE THROUGH ASSESSMENT ORDER. I HAVE AL SO TAKEN A NOTE OF FACTUAL MATRIX OF THE CASE AS WELL AS APPLICABLE CA SE LAWS RELIED UPON. THE ADDITION OF RS. 8,40,227/- ON A/C PERTAINS TO S TCG ON SALE OF PROPERTY AT PLOT D-10 KESHAV VIHAR JAIPUR ON THE BA SIS OF INFORMATION CALLED U/S 133(6) OF THE ACT FROM SUB-REGISTRAR STA MPS JAIPUR-1 DT. 26.03.2016. ON PERUSAL OF ASSESSMENT ORDER PG 5, IT IS SEEN THAT AO HAS GIVEN THE REFERENCE OF INFORMATION RECEIVED FRO M SUB-REGISTRAR STAMPS-1 JAIPUR ON PG 5 OF THE ASSESSMENT ORDER WHI CH IS VERY RELEVANT ALSO FOR TAKING VALUE U/S 56C FOR THE ACT FOR THE COMPUTATION OF STCG. ASSESSEE HAS FAILED TO CONTROVERT THIS FI NDING. ACCORDINGLY, IN VIEW OF FACTS & CIRCUMSTANCES OF THE CASE, ADDITION MADE OF RS. 8,40,227/- IS HEREBY SUSTAINED. ASSESSEES FAILS IN GR NO. 3. SINCE UNDISPUTEDLY THE DLC RATES FOR THE KESHAV VIH AR, JAIPUR WERE NOT FIXED AND, THEREFORE, NOT AVAILABLE FOR THE PURPOSE OF ADOPTIN G THE SAME AS FULL VALUE CONSIDERATION UNDER SECTION 50C OF THE ACT, THEREFO RE, THE AO HAS ADOPTED THE DLC RATES OF ADJOINING AREA, NAMELY, SIDDHARTH NAGAR WI THOUT GIVING THE ASSESSEE AN OPPORTUNITY OF HEARING AND DEFEND ITS CASE AGAINST SUCH ADOPTION OF FULL VALUE CONSIDERATION. ONCE THE ASSESSEE HAS RAISED THE OB JECTION AGAINST THE ADOPTION OF THE DLC RATES OF AN ADJOINING AREA INSTEAD OF THE A REA IN WHICH THE PLOT IN QUESTION SITUATED, THE AO AND LD. CIT (A) OUGHT TO HAVE REFE RRED THE MATTER TO THE DVO FOR DETERMINATION OF FAIR MARKET VALUE OF THE PLOT IN Q UESTION WHICH COULD BE TAKEN AS FULL VALUE CONSIDERATION. ACCORDINGLY, IN THE FACT S AND CIRCUMSTANCES OF THE CASE, WE SET ASIDE THE ISSUE TO THE RECORD OF THE AO FOR RE- ADJUDICATION OF THE SAME AFTER MAKING THE REFERENCE TO THE DVO REGARDING DETERMINA TION OF FAIR MARKET VALUE OF THE 57 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR. PLOT IN QUESTION AND THEREAFTER AFTER CONSIDERING T HE OBJECTION, IF ANY, OF THE ASSESSEE TO DECIDE THE ISSUE AS PER LAW. APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 30. IN THE RESULT, APPEALS OF THE ASSESSEE IN ITA N O. 293/JP/2017 IS ALLOWED, ITA NO. 408/JP/2017, 294/JP/2017 AND 295/JP/2017 ARE PA RTLY ALLOWED AND APPEALS OF THE REVENUE IN ITA NO. 519/JP/2017, 520/JP/2017 & 5 21/JP/2017 ARE DISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 28/03/20 18. SD/- SD/- ( FOE FLAG ;KNO ) ( FOT; IKY JKWO (VIKRAM SINGH YADAV ) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 28/03/2018. DAS/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- SHRI RAJENDRA KUMAR JAIN, JAIPUR. 2. THE RESPONDENT THE ACIT, CENTRAL CIRCLE-1, JAIP UR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 293(7) /JP/2017) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 58 ITA NOS. 293(7)/JP/2017 SHRI RAJENDRA KUMAR JAIN, JAIPUR.
