RHEEMA HASSAN ALI KHAN, MUMBAI V. DCIT CEN CIR 2, MUMBAI

ITA 4163/MUM/2010

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3493 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 9 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-02-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 07-07-2015
• Assessment Year: 2001-2002
• Appeal Filed On: 21-05-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained investment; Unexplained expenditure; Gift; Business income; Principle of natural justice; Deemed to accrue or arise in india; Additional evidence; Corroborative evidences; Onus to prove; Surrender of tenancy right
• Section: 69C; 153A; 131; 68; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI . , , BEFORE SHRI D. MANMOHAN, VP AND SHRI SANJAY ARORA, AM SR.NO. ITA NO S . APPELLAN T RESPONDENT A.Y S . 1. 4163 - 4169/M/10 RHEEMA HASSAN ALI KHAN 39C, ANAND DARSHAN, 13, PEDDAR ROAD, MUMBAI - 400 026 PAN NO. AOMPK 8156 M DY. CIT, CENTRAL CIRCLE - 2, OLD CGO ANNEX BLD.G, M. K. ROAD, MUMBAI 2001 - 02 TO 2007 - 08 / APPELLANT B Y : NONE (W RITTEN SUBMISSIONS ) / RESPONDENT BY : SHRI GIRISH DAVE & MS.KADAMBARI DAVE / DATE OF HEARING : 1 7 .0 2 .201 6 / DATE OF PRONOUNCEMENT : 29 . 0 2 .201 6 / O R D E R PER SANJAY ARORA, A. M.: THE INSTANT APPEALS, AGITATING SEPARATE ORDERS BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 36, MUMBAI ('CIT(A)') OF EVEN DATE (05/3/2010), DISMISSING THE ASSESSEES' APPEALS CONTESTING H ER ASSESSMENTS UNDER SECTION 153A READ WITH SECTION 143 (3) OF THE IN COME TAX ACT, 1961 ( THE ACT ) FOR ASSESSMENT YEARS (A.YS.) 2001 - 02 TO 2007 - 08 DATED 31.12.2008 . THE APPEALS RAISING COMMON ISSUES, WERE TAKEN UP FOR HEARING AND, ACCORDINGLY, HEARD TOGETHER. 2. 1 NONE APPEARED ON BEHALF OF THE ASSESSEE WHEN THE APPEALS WE RE CALLED OUT FOR HEARING, THOUGH VAKALATNAMA/S (DATED 09.12.2011) IN FAVOUR OF SHRI NAND KISHORE AND MS. RASHMI CHAUDHARY (OF HSA ADVOCATES) ARE ON RECORD. NO ADJOURNMENT APPLICATION HAS ALSO BEEN MADE. IN FACT, DESPITE SEVERAL ATTEMPTS, NO SERVICE OF NOT ICE 2 ITA NOS. 4163 - 4169/M/10 (A.YS. 2001 - 02 TO 2007 - 08) RHEEMA HASSAN ALI KHAN VS. DY. CIT OF HEARING COULD BE AFFECTED ON THE ASSESSEE. UNDER THE CIRCUMSTANCES, THE MATTERS BEING PENDING FOR LONG, THE HEARING WAS PROCEEDED WITH EX PARTE QUA THE ASSESSEE, SO AS TO DISPOSE THE APPEALS AFTER HEARING THE PARTY BEFORE US. HOWEVER, AS SUBSEQUENTL Y SOME CLARIFICATIONS WERE REQUIRED, THE APPEALS (ALONG WITH THE CONNECTED MATTERS) WERE POSTED FOR 17.2.2016. A JUNIOR COUNSEL, SHRI RAMANATH PRABHU, FOR HSA ADVOCATES, APPEARED, AND SOUGHT ADJOURNMENT. NO VAKALATNAMA IN HIS FAVOUR STANDS FILED. IT DESERV ES TO BE NOTED THAT THE HEARING IN THESE MATTERS, ALONG WITH THE OTHER CONNECTED MATTERS, TOOK PLACE IN PARALLEL OVER A PERIOD OF THREE MONTHS, WHEREIN COUNSELS FROM BOTH THE SIDES APPEARED AND MADE REPRESENTATIONS. IT WAS, ACCORDINGLY, CONVEYED THAT IT WA S NOT POSSIBLE TO GRANT ADJOURNMENT AT THIS STAGE, EVEN AS THE COURT WAS PREPARED TO HEAR THE PARTIES ON A DAY TO DAY BASIS. TIME WAS SOUGHT FOR FILING WRITTEN SUBMISSIONS, WHICH WAS GRANTED. WRITTEN SUBMISSIONS WERE ACCORDINGLY FILED ON 22.2.2016 (COPY ON RECORD), WITH THE COPY TO THE OTHER SIDE. ASSTT. YEAR 2001 - 02 3. VIDE GROUND 1 , FOR ALL THE YEARS , THE ASSESSEE IMP UGNS TH E ASSESSMENT AS VOID AB INITIO AS THE NOTICE UNDER SECTION 143(2) OF THE ACT WAS NOT SERVED ON HE R, AS REQUIRED BY LAW , WITHIN 1 2 MONTHS OF THE END OF THE MONTH IN WHICH THE RETURN OF INCOME FOR THE R ELEVANT YEAR STANDS FILED. THE RETURN S OF INCOME FOR ALL THE YEARS UNDER REFERENCE WERE FILED ON 23.05.2007 . THE NOTICE UNDER SECTION 143(2), THUS, TAKING ITS SERVICE A S MANDATORY , I S TO BE BY 31.05.2008 . NOTICE UNDER SECTION 143(2) FOR ALL THE YEARS HAS BEEN ISSUED ON 04.10.2007. THE ASSESSEE SEEKS TO DISPUTE THE SERVICE OF THE SAID NOTICE S I N TIME , WITHOUT BRINGING ON RECORD THE ACTUAL DATE OF THEIR SERVICE, EVEN AS MUCH AS N OT STAT ING THE SAID DATE /S . AS IT APPEARS, THE CONTROVERSY HAS ARISEN ; RATHER, SOUGHT TO BE RAISED IN THE MATTER , AS THE ASSESSMENT ORDER MENTION S THE DATE OF ISSUE OF NOTICE UNDER SECTION 143( 2) AS 04.10.2008. THE I MPUGNED ORDER /S, HOWEVER, CLARIFIES THE SAID DA TE AS , AS IN THE CASE OF THE ASSESSEES HUSBAND , HA S SAN ALI KHAN (HAK) , AS 04.10.2007 , ON THE BASIS OF THE ANNEXURE TO THE ASSESS MENT ORDER (REFER PARA 11 OF THE IMPUGNED ORDER/S). IN FACT , NOTICE S U /S. 143(2) FOR THE RELEVANT YEARS (AYS. 2001 - 02 TO 3 ITA NOS. 4163 - 4169/M/10 (A.YS. 2001 - 02 TO 2007 - 08) RHEEMA HASSAN ALI KHAN VS. DY. CIT 2007 - 0 8) IN THE CASE OF HAK , AT THEIR PUNE ADDRESS , BEING ALSO THE ADDRESS TO WHICH THE NOTICE S IN THE INSTANT CASE WERE MARKED , WERE RECEIVED ONLY BY THE ASSESSEE , ON 09.10.2007 (REFER PARA 4 OF THE TRIBUNAL S ORDER IN HAK (SUPRA) . T HAT, IN FACT, IS ALSO THE PR ESUMPTION IN LAW , I.E. , OF THE SERV ICE BY THE POSTAL AUTHORITIES IN THE REGULAR COURSE OF ITS BUSINESS (REFER : MILAN PODDAR V/S CIT [2013] 357 ITR 619 (JH . ) ) , ALSO REFER RED TO IN THE CASE OF HAK (SUPRA). THIS IS IN FACT ALSO APP AREN T FROM THE ISSUE OF QUES TIONNAIRE S TO THE ASSESSEE , FOR ALL THE YEARS, AS F A R BACK AS ON MARCH 5, 17, 19, 2008 AND APRIL, 9 2008 ( REFER PARAS 5 AND 11 OF THE IMPUGNED ORDER ) . THO UGH THE LD . CIT(A) ALSO ADV ERTS TO SECTION 292 BB OF THE ACT, STATING THAT THIS ISSUE COULD NOT BE VAL ID LY RAISED BY THE ASSESSEE AS THE SAME WAS NOT DIS PUTED IN ASSESSMENT, WE FIND THE SAME AS NOT RELEVANT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS IT IS N O BODYS CASE THAT WHILE NOTICES UNDER SECTION 143(2) DATED 04. 1 0.2007 IN THE CASE OF HAK WERE RECE IVED BY THE ASSESSEE , FOR ON AND BEHALF OF HAK , AS CLEARLY STATED THEREIN, ON 09/10/2007, THAT OF EVEN DATE IN HE R OWN CASE W ERE NOT , AND EVEN BY 31.05.2008 AND , FURTHER, WITHOUT BRINGING ANY MATERIAL ON RECORD TO EXHIBIT THE ACTUAL DATE /S OF SERVICE - THE NOTICE /S HAVING BEEN NOT RETURNED BACK U N - SERVED. SECTION 292 - BB WOULD COME INTO PLAY ONLY WHERE THE ASSESSEE MAKES OUT A CASE ON FACTS , WHICH THE LAW , PER S . 292BB , PREVENTS HIM FROM IN - AS - MUCH AS IT HAS NOT BEEN SO BEFORE THE ASSESSING OFFICER (AO). THE LOGIC OF THE PROVISION, MANIFEST THERE I N , IS SOUND: WHERE THE ASSESSEE PARTICIPATE S IN THE PROCEEDINGS BEFORE THE AO , IT IS NOT O PE N FOR HIM TO CONTEND LATER THAT THE NOTICE , REQUIRED TO BE SERV ED ON HIM, HAS NOT BEEN OR WA S NOT IN THE PROPER MANNER OR TI ME, UNLESS OF COURSE SUCH OBJECTION STANDS TAK EN BEFORE THE AO. WHY, W H ERE SO , THE AO MAY IMMEDIATELY CAUSE THE SAID SERVICE DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS ITSELF . BEFORE PARTING, THE ASSESSEES CLAIM IS EVEN OTHERWISE LEGALLY SUSTAINAB LE IN - AS - MUCH AS NOTICE U/S.143(2) IS NOT A PREREQUISITE FOR FRAMING AN ASSESSMENT U/S. 153A, WHICH PROVISION ITSELF CONFERS JURISDICTION TO FRAME THE ASSESSMENT OF THE TOTAL INCOME FOR EACH OF THE RELEVANT YEARS. NOTICE U/S. 143(2), CLEARLY PROCEDURAL, WA S CONSIDERED BY THE HONBLE APEX COURT AS MANDATORY IN CIT V. HOTEL BLUE MOON [2010] 321 ITR 4 ITA NOS. 4163 - 4169/M/10 (A.YS. 2001 - 02 TO 2007 - 08) RHEEMA HASSAN ALI KHAN VS. DY. CIT 362 (SC) ONLY ON ACCOUNT OF IT ASSUMING A JURISDICTIONAL CHARACTER. THE VIEW IN THIS RESPECT, EXPRESSED BY THE HONBLE DELHI HIGH COURT IN ASHOK CHADDHA VS. ITO [2 011] 337 ITR 399 (DEL), RENDERED CONSIDERING THE DECISION IN HOTEL BLUE MOON (SUPRA), HAS SINCE BEEN ADOPTED BY THE TRIBUNAL IN SUMANLATA BANSAL VS. ASST. CIT (IN ITA NOS. 525 - 530/MUM/2008 DATED 20.5.2015 - REPORTED AT 2015 - TIOL - 1053 - ITAT - MUM - TM). 4. GRO UND 2, AGAIN, CO MMON FOR ALL THE YEARS, ASSAILS THE SAID IMPUGNED ORDER/S ON THE GROUND BY NO N - ALLOWANCE OF EFFECTIVE, REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE AND, THEREBY , V IOLATION OF THE PRINCIPLES OF NATURAL JUSTICE. APART FROM FILING THE GRO UND OF APPEAL , THE ASSESSEE HAS NOT LED ANY EVIDENCE IN SUPPORT OF HER CASE. IN FACT, BEFORE THE LD . CIT(A) A S IMILAR GROUND, I.E. , AS T O N ON - ALLOWANCE OF PROPER OPPORTUNITY BY THE AO WAS ASS UMED, AND WHO HAS DIS CUSSED THE SAME AT SOME LENGTH VIDE PARA 11 OF HIS ORDER/S ( FOR ALL THE YEARS ) . THE ASSESSEE , BEFORE US , HAS N OT CONTESTED THIS FINDING BY THE CIT(A) , BUT IS AGGRIEVED FOR THE NON - GRANT OF OPPORTUNITY BY THE LD . CIT(A) , I.E. , BEFORE HIM. 5. WE HAVE HEARD THE PARTY BEFORE US AND PERUSED THE MATERIA L ON RECORD. IN THIS REGARD, WE OBSERVE THAT THE LD . CIT(A) HAS DEV OTED A SEPARATE PARA ( # 6 ) OF HIS ORDER TO THIS ASPECT, TITL ING IT AS H EARING S . PARA 6 TABULATES 10 DIFFEREN T DATES FOR WHICH NOTICE S OF HEARING WERE ISSUED TO THE ASSESSEE, BEING FROM 16 .03.2009 (FOR 06. 4.2009) TO THAT DATED 22.02.2010 (FOR 05. 3 .2010). THIS IS FOLLOWED BY PARA S 7 TO 9 , WHICH DEAL WITH THE ASSESSEE S CONDUCT /CASE BEFORE HIM . N ONE ATTENDED , EXCE PT ON 05. 3 .2010 , THE DATE FIXED ON 2 2.02.2010 . THAT APART , THE ASSESSEE FILED A LETTER DATED 25.01.2010 ON 28.01.2010 - THE DATE OF HEARING FIXED VIDE NOTICE DATED 18.12.2009 , AND WHICH CONTAINED SUBMISSIONS , DEALT WITH BY HIM, FURTHER STATING THAT GROUND - WISE SUBMISSIONS THE SUBMISSIONS BEING CATEGORISED IN FOUR PARTS, STAND CONSID ERED WHILE DECIDING THE CORRESPONDING GROUND /S . THE ASSESSEES CASE FOR NON - GR ANT OF OPPORTUNITY BY THE LD . CIT(A), TH U S, APART FROM BEING UNSUBSTANTIATED , STAND S COMPLETELY 5 ITA NOS. 4163 - 4169/M/10 (A.YS. 2001 - 02 TO 2007 - 08) RHEEMA HASSAN ALI KHAN VS. DY. CIT CONTRADICTED , IF NOT DISPROVED. T HE ASSESSEE S CASE IS THUS WITHOUT MERIT , AND HER GROUND , ACCORDINGLY, DIS MISSED. 6. GROUND 3 IS GENERAL IN NATURE , WARRANTING NO ADJUDICATION. 7. GROUND 4 IS QUA AN ADDITION TOWARD PURCHASE OF A HORSE S ALS A D ANCER ON 10.03.2001 , AS FOUND ON THE BASIS OF INFORMATION FROM ROYAL W ESTERN INDIA TURF C LU B (RWITC) AND OTHER STUD FARMS IN MUMBAI /PUNE. THE ASSESSEES ONLY CASE, MADE BEFORE THE LD. CIT(A), IS BY PRODUCING A JOURNAL V OUCHER DATED 21.03.2001, WHEREBY THE RAC E HORSE ACCOUNT IS DEBITED AND APPELLANTS ACCOUNT IS CRED ITED. THE VOUCHER CON TAINING NO DE TAILS AS TO THE S ELLER, RECIPIENT , ETC. , THE ADDITION WAS CONFIRMED. THE SAME, IF ANYTHING, ONLY CONFIRM S TH E PURCHASE OF A HORSE AT RS.1 LAC, THE VALUE ASCRIBED TO THE PURCHASE BY THE AO. IT IS THUS AN ADMISSION OF THE PURCHASE OF A RAC E HORSE FOR R S.1 LAC . THE ADDITION IS TOWARD THE SOURCE OF THIS AMOUNT , EXP EN D ED O N THE ( ADMITTED ) PURCHASE O F THE HORSE. THE SAME REMAINS UNEXPLAINED, WITH THE ASSESSEE CREDITING HER CAPITAL ACCOUNT O N 21.03.2001 . I T THUS B ECOMES A CASE OF EXP LANATION B EING REQUIRED T O F UR N ISHED , BOTH UNDER SECTION S 6 9 A & 6 8 , AS TO THE SOURCE OF THE AMOUNT EXPENDED/CREDITED, WHICH CONTINUES NOT TO BE . THE A DDITION IS ACCORDINGLY CONFIRMED. 8. GROUND 5 IS TOWARD INVESTMENT IN T W O C ARS , AT RS.11 , 69 , 491 / - , SINCE CONFIRMED. THE ASSESSEE C LAIMED BEFORE THE FIRST APPELLATE AUTHORITY THAT BOTH THE CARS BEING P URCHASED BEFORE 0 1/4/2000, I.E., THE FIRST DAY OF THE RELEVANT PREVIOUS YEAR , NO ADDITION COULD BE MADE FOR THE RELEVANT YEAR . THE LD. CIT(A), HOWEVER, FOUND THAT P AYMENT OF THE HONDA CI TY C AR WAS MADE DURING THE YEAR. AS REGARD S MARUTI C AR, CLAIM ED TO BE P URCHASED O N 18.08.1999 (AT RS.4.95 LACS), THE SAME I S NOT SUPPORT ED BY A N Y MATERIAL, VIZ. INVOICE, RC, ETC. ACCORDINGLY, HE CONFIRMED THE ADDITION , SO THAT T HE ASSESSEE IS IN SECOND APP EAL BEFORE US. 9. WE HAVE HEARD THE PARTY BEFORE US AND PERUSED THE MATERIAL ON RECORD . T HE MARUTI C AR STANDS REFLECTED IN THE ASSESSEES BALANCE SHEET, HER CAPITAL PER WHICH 6 ITA NOS. 4163 - 4169/M/10 (A.YS. 2001 - 02 TO 2007 - 08) RHEEMA HASSAN ALI KHAN VS. DY. CIT STANDS CONFIRMED FOR ADDITION FOR A.Y. 2000 - 2001 (REFER PARA 5 OF THE ORDER IN ITA NO.3571/MUM/2009 DATED 29.02.2016 ). THE CLAIM OF THE SAME BEING PURCHASED IN AUGUST, 1999 , STANDS THUS VALID ATED . ADDITION IN ITS RESPECT C OULD THOUGH BE MADE FOR THE AMOUNT OF LOAN (FROM MARUTI COUNTRY W IDE FINANCE) REP AID DURING THE CURRENT YEAR ; THE AD DITION FOR THE PRECEDING YEAR BEING LIMITED TO HE R O W N CAPITAL INVEST ED THEREIN (UP TO 31.03.2000) . AS REGARD S HONDA CITY C AR, THE SAME IS CLAIMED AS P URCHASED FROM BAFNA AUTO C A R S DURING THE YEAR, FOR RS.1 0 ,66,864/ - , MAKING PAYMENTS AS UNDER (REFER PARA 1 7 OF THE IMPUGNED ORDER) : - DATE AMOUNT (RS.) FROM / BY 29.08.2000 2,00,000 ABN AMBRO BANK 21. 1 1.2000 2,00,000 BOMBAY MERCANTILE BANK 21. 1 1.2000 1,37,652 BOMBAY MERCANTILE BANK 01.0 4 .2007 7,29,212 CASH T OTAL 12,66,864 THE TOTAL PAYMENT OF RS.12.67 LACS EXCEEDS THE COST. HOW CAN THAT BE , UNLESS THE SAME INCLUDES INTEREST O N LOAN ASS UME D TO (PART) FINANCE THE CAR ? THE PA TTERN OF PAYMENT IS ALSO N OT UNDERS TOOD, AS THE PAYMENT FOR CAR IS GENERALLY MADE UPFRONT, PRIOR TO OR AT THE TIME OF ITS DE LIVERY , AND TO T HE EXTENT (BANK) FINANCED , REPAID IN EQUATED MONTHLY INSTALMENT S OR AS PER THE TERMS OF THE LOAN AGREEMENT. THEN, AGAIN, HOW IS IT THAT THERE IS NO REPAYMENT FROM 22.11.200 0 TO 31.03.2007? THE PATTERN OF PAYMENT, IN VIEW OF THE AFORE - STATED, IS NO T UNDERSTOOD, EVEN IF, AS APPEARS TO BE, THE CASH PAYMENT IS ON 01.4.2001 (AND NOT 01.4.2007), IN WHICH CASE THERE WOULD BE HARDLY ANY INTEREST COMPONENT . THEN, AGAIN, WHAT IS THE SOURCE OF CASH? THE ADDITION, IF ANY , C OULD ONLY BE ON THE UNEXPLAINED (CAPI TAL) INVEST ED I N CAR , I.E. , IN THE FIRST INSTANCE AND/OR UPON REPAYMENT OF BANK FINANCE AVAILED FOR PURCHASE THEREOF DURING THE RELEVANT YEAR. WE, ACCORDINGLY, ONLY CONSIDER IT PROPER TO RESTORE THE MATTER BACK TO THE FILE OF THE AO TO RE - ADJUDICATE THE AD DITION QUA INVESTMENT I N BOTH CARS AFRESH , ISSUING CLEAR FINDINGS UPON ALLOWING THE ASSESSEE A N OPPORTUNITY TO EXPLAIN HE R CASE OF THE SAME BEING ACCO UNTED FOR , I.E. , BY THE CASH GENERATED FROM THE HORSE RACING 7 ITA NOS. 4163 - 4169/M/10 (A.YS. 2001 - 02 TO 2007 - 08) RHEEMA HASSAN ALI KHAN VS. DY. CIT INCOME , ALSO ADDRESSING THE VARIOUS ISSUES RA ISED IN THE MATTER BY US. WE DECIDE ACCORDINGLY. 10. GROUND 6 IS QUA ADDITION TOWARD LIVING AND LIFESTYLE EXPENSES . T HE SAME IS BASED ON THE STATEMENT OF THE ASSESSEE S HUSBAND, HASSAN ALI KHAN (HAK) , U/S. 132(4) DATED 05.01.2007, ADMITT ING HIS ANNUAL INC OME, AND THAT OF HIS WIFE, THE ASSESSEE , AT RS. 30 LACS AND RS. 3 LACS P.A. , C OUPLED WITH THE FACT OF THE COUPLE LEADING A LAVISH LIFESTYLE, THROWING PARTIES ; O WNIN G AND MAINTAINING EXPENS IVE CARS AND GADGETS ; F REQUEN T TRAVEL ABROAD, ETC. THE ASSESSEE HAD FURTHER DECLARED AN INCOME OF RS.66.14 LACS FOR A.Y. 2007 - 08 ; H ER AVERAGE INCOME FOR AY S . 200 1 - 0 2 TO 2007 - 08 BEING 26 LACS , ENDORSING THE HAK S STATEMENT . THE ASSESSEE HAD STAG G E RE D THE DISCLOSURE OF HER INCOME TO THE LATER YEARS TO AVOID LEVY OF INTEREST U/S S . 234 A/B/C . A CCORDINGLY, HER INCOME WAS TAKEN AT RS. 3 LACS , ALLOWING CRE DIT FOR THE INCOME RETURNED ( RS. 1 , 32 , 580 / - ) , SO THAT THE B ALANCE RS.1,6 7 ,420 / - WAS BROUGHT TO TAX , AND CONFIRMED ON THE SAME BASIS. 11. WE HAVE HEARD THE PARTY BEFORE US AND P ERUSED THE MATERIAL ON RECORD. WHAT L AV I S H LIFESTYLE, WE WONDER, COULD SHE MAINTAIN WITH AN ANNUAL INCOME OF RS. 3 LACS. FURTHER, ON WHAT BASIS, IS THE SAME , MADE U/S. 6 9C , APPROPRIATED BETWEEN THE ASSESSEE AND HER HUSBAND ? THE ALLOWANCE OF CREDIT AGAINST T HE INCOME RETURNED IS , AGAIN, IN CORRECT IN - AS - MUCH AS THE SAME COULD ONLY BE AGAINST THE DISCLOSED INCOME APPROPRIATED TOWARD PERSONAL/HOUSE - HOLD EXPENDITURE . THE ADDITION IN ITS RE SPECT BEING ALREADY MADE BY THE REVENUE IN THE HAND S OF HER HUSBAND , WHICH HAVE CONFIRMED FOR MOST APART , ON THE BASIS THAT THE ANNUAL EXPENDITURE STANDS CORRECTLY ASSESSED AT RS.30 LACS , N O FURTHER ADDITION IN THE ASSESSEE - WIFE S HAND IS CALLED FOR . WE DECIDE ACCORDINGLY. 12. GROUND 7 : INFORMATION FROM THE DIRECTORATE OF ENFOR CEMENT (THE AGENCY OF THE GOVERNMENT OF INDIA (GOI) THAT INVESTIGATES THE ECONOMIC OFFENCES IN INDIA) REVEALED CREDIT IN THE ASSESSEES BANK ACCOUNT (# 18.5749905 - 01) WITH STANDARD 8 ITA NOS. 4163 - 4169/M/10 (A.YS. 2001 - 02 TO 2007 - 08) RHEEMA HASSAN ALI KHAN VS. DY. CIT CHARTERED BANK, DUBAI FOR USD 10 MILLION ON 12.3.2001 (PAGE 9 34 OF APB - 5 IN THE CASE OF KASHINATH TAPURIAH (KT)). THE SAME, BEING UNEXPLAINED, WAS ACCORDINGLY ASSESSED AS INCOME, CONVERTING THE SAME AT RS. 46.58 PER DOLLAR , RESULTING IN THE IMPUGNED ADDITION FOR RS.4658 LACS. THE DOCUMENT, STATED TO BE ENCLOSED BY WAY OF ANNEXURE A1 TO THE ASSESSMENT ORDER, ON BEING NOT FOUND THEREAT, WAS POINTED OUT BY THE LD. DR DURING HEARING AS BEING THE SAME AS ENCLOSED AT PAGE 934 OF PAPER BOOK 5 IN THE CASE OF KT (I.E., PG. 934 OF APB 5/KT). THE ASSESSEES CASE, AS GATHERED FROM THE READIN G OF THE ORDERS BY THE AUTHORITIES BELOW , IS THAT OF TOTAL DENIAL, NOT ACKNOWLEDGING THE EXISTENCE OF THE BANK ACCOUNT, SO THAT THE QUESTION OF TRANSFER THERETO DOES NOT ARISE. FURTHER, THE DOCUMENT WAS NOT FOUND DURING SEARCH AND, THUS, THE PRESUMPTION OF SECTIONS 132(4A) AND 292C, WHICH IN ANY CASE RAISES A REBUTTAL PRESUMPTION, SHALL NOT APPLY. THE SAME WAS FOUND GENERAL IN NATURE, NOT ADDRESSING THE SPECIFIC ISSUES RAISED OR ARISING IN VIEW OF THE SPECIFIC DOCUMENTS FOU ND AND, ACCORDINGLY, TO NO AVAIL, SO THAT THE ADDITION STOOD MADE AND CONFIRMED (REFER PARAS 15 AND 12 - 14 OF THE ASSESSMENT AND THE IMPUGNED ORDER RESPECTIVELY). 13. WE HAVE HEARD THE PARTY BEFORE US AND PERUSED THE MATERIAL ON RECORD. THE CASE OF BOTH THE PARTIES REMAINS THE SAME AS IN THE CASE OF HAK, THE ASSESSEES HUSBAND, WHEREIN THE SAME STANDS DISCUSSED IN EXTENSO PER THE TRIBUNALS ORDER SUPRA DECIDING HIS APPEALS FOR A.YS. 2001 - 02 TO 2007 - 08, I.E., IN THE CONTEXT OF THE SEVERAL ADDITIONS MADE BASED ON TRANSFER INSTRUCTIONS (TIS) . R EFERENCE IN THIS REGARD MAY BE MADE TO PARAS 9 - 12, 15, 25, 30, 49, 65A AND 109 OF THE SAID ORDER. WE SEE NO REASON TO TAKE ANY DIFFERENT VIEW IN THE MATTER. ACCORDINGLY, FOR THE REASONS AS INFORM OUR DECISION IN THE CASE OF HAK ( SUPRA ) , WE RESTORE THE MA TTER TO THE FILE OF THE A.O. WITH LIKE DIRECTIONS. WE DECIDE ACCORDINGLY. 14. GROUND 8 IMPUGNS THE NON - GRANT OF THE TELESCOPING BENEFIT. NO SUCH CASE WAS MADE OUT BEFORE THE AUTHORITIES BELOW. HOW COULD THEN THE ASSESSEE BE AGGRIEVED? THE PLEA COULD IN F ACT BE AVAILABLE ONLY WHERE THE ASSESSEE ACCEPTS AN ADDITION, 9 ITA NOS. 4163 - 4169/M/10 (A.YS. 2001 - 02 TO 2007 - 08) RHEEMA HASSAN ALI KHAN VS. DY. CIT CLAIMING A DOUBLE ADDITION, LEADING TO A DOUBLE JEOPARDY. BE THAT AS IT MAY, WE HAVE ALREADY RESTORED THE ASSESSMENT /S ON SOME GROUNDS, WHILE CONFIRMING SOME ADDITIONS (FOR THIS SET OF APPEALS) . THE PRINCIPLES OF TELESCOPING ARE WELL LAID OUT BY THE HONBLE APEX COURT, AS IN THE CASE OF ANANTHARAM VEERASINGHAIAH & CO. V. CIT [1980] 123 ITR 457 (SC). THE AO SHALL, IN THE SET ASIDE PROCEEDINGS, CONSIDER THE ASSESSEES CASE IN THIS RESPECT, WHERE ON E IS MADE OUT, IN ACCORDANCE WITH LAW. THIS DISPOSES THE ASSESSEES SAID GROUND, AS WELL AS SIMILAR GROUND/S FOR OTHER YEARS AS WELL, WHERE WE OBSERVE THE ASSESSEE CONTENDS OF AN ADDITION AS HAVING BEEN ALREADY RETURNED, I.E., FORMING PART OF H ER RETURNED INCOME. THE AO SHALL ALLOW CREDIT ON THE BASIS OF VERIFIABLE CASH FLOWS, ASSUMING ANNUALIZED INCOME/EXPENDITURE ON A UNIFORM BASIS, WHILE TAKING OTHERS ON THE BASIS OF ACTUAL DATE S (OF INVESTMENT, EXPENDITURE, ETC.), ALSO ACCOUNTING FOR THE PAYMENT OF TAX, AGAIN, ON DEFINED DATE / S. WE DECIDE ACCORDINGLY. 15 . GROUND 9 : THE SAME CHALLENGES THE CHARGE OF INTEREST U/SS. 234A/B OF THE ACT, WITHOUT SHOWING AS TO WHY IT SHOULD NOT BE LEVIED. THE CHARGE IS COMPENSATORY AND MANDATORY. THERE IS NO CLAIM FOR AN EXCE SS LEVY . THE GROUND IS ACCORDINGLY DISMISSED. THIS ALSO DISPOSES SIMILAR GROUNDS FOR OTHER YEARS AS WELL. 1 6 . GROUNDS 10 & 11 ARE GENERAL IN NATURE, WARRANTING NO ADJUDICATION. ASSTT. YEAR 2002 - 03 17. GROUNDS 1 AND 2 ARE COMMON TO THAT FOR A.Y. 2001 - 02 AND, ACCORDINGLY, STAND DISPOSED OF VIDE PARAS 3 AND 5 OF THIS ORDER RESPECTIVELY. PARAS 5 THROUGH 8 OF THE ASSESSMENT ORDER, WE MAY ADD, CONTAIN DETAILED DISCUSSION ON THE PROVISION OF DUE AND ADEQUATE OPPORTUNITY TO THE ASSESSEE. GROUND 3 IS GENERAL IN NATURE, WARRANTING NO ADJUDICATION. GROUND 4 AGITATES THE PRINCIPAL ISSUE IN APPEAL FOR THIS YEAR, I.E., TOWARD ADDITION FOR CASH DEPOSIT IN THE ASSESSEES BANK ACCOUNT WITH UBS AG, ZURICH, BEING FOR USD 61,031.30 (RS.29,87,026) ON 15.8.2001, CONVERTED AT THE OBTAINING RATE, AND QUA WHICH WE OBSERVE NO DISPUTE. 10 ITA NOS. 4163 - 4169/M/10 (A.YS. 2001 - 02 TO 2007 - 08) RHEEMA HASSAN ALI KHAN VS. DY. CIT 18. WE HAVE HEARD THE PARTY BEFORE US AND PERUSED THE MATERIAL ON RECORD. THE CASE OF THE ASSESSEE - APPELLANT AS WELL AS THE REVENUE IS THE SAME AS IN THE CASE OF HASSAN ALI KHAN (HAK), HER HUSBAND. IN FACT, WE FIND NO REPRESENTATION BY THE ASSESSEE, AND WHO HAS THUS NOT ISSUED ANY EXPLANATION WHATSOEVER TOWARD THE IMPUGNED CREDIT IN HER BANK ACCOUNT. THE EXISTENCE OF THE BANK ACCOUNT (# 206 - 794786), AS WELL AS THE DEPOSIT THEREIN, WHICH IS IN CASH, IS IN FACT CONFIRMED BY THE BANK ITSELF, ON THE BASIS OF ITS REPORT DATED 30.10.2007, AND WHICH HAS BEEN, ACCEPTING THE APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE (AE) BY HAK, SINCE ADMITTED IN EVIDENCE BY US (REFER PARA 3.3 OF THE TRIBUNALS ORDER IN ITA NOS. 4156 TO 4162/MUM/2012 DATED 29. 0 2 .2016 ). FURTHER, REFERENCE TOWARD THIS CONFIRMATION BY THE BANK MAY BE MADE TO PARAS 3 OF THE SAID REPORT, FORMING PART OF THE TRIBUNALS RECORD, AND WHICH WOULD RATHER ALSO REVEAL HAK TO HAVE PERSONALLY VISITE D THE BANK ON 15.8.2001, I.E., THE DATE OF THE DEPOSIT. WE, IN ANY CASE, THE SAME BEING PERTINENT, REPRODUCE THE RELEVANT PART OF THE REPORT AS UNDER (REFER PG.15 OF THE AE (AT PG. 2 OF THE 4 PAGE REPORT BY THE BANK)): 3. ACCOUNT DETAILS THE DETAILS OF T HESE THREE ACCOUNTS ARE AS FOLLOWS: 3.1 ACCOUNT 206 - 794786/ACCOUNT HOLDER: RHEEMA ABBAS/ POWER OF ATTORNEY: HASSAN ALI KHAN THIS ACCOUNT WAS OPENED WITH UBS ZURICH ON 30 JULY 2001. IT WAS CLOSED SHORTLY AFTERWARDS ON 17 OCTOBER, 2001. IT WAS FUNDED WITH USD 61031.30 (CASH) ON 15 AUGUST 2001. OF THIS AMOUNT, USD 600700 WAS TRANSFERRED OUT BY WIRE TRANSFER TO A THIRD PARTY INDIVIDUAL (I.E. NOT MR. KHAN OR HIS FAMILY MEMBERS) TO AN ACCOUNT AT A BANK IN THE UNITED ARAB EMIRATES ON THE SAME DAY. BY WAY OF F URTHER BACKGROUND TO THIS TRANSACTION, WE BELIEVE THAT MR. KHAD HAD BEEN IN NEGOTIATIONS TO PURCHASE A PROPERTY IN SWITZERLAND AND HAD OBTAINED APPROX $60,000 FROM THE VENDORS THOUGH WE NOW ASSUME THIS TO HAVE BEEN A KIND OF ADVANCE FEE FRAUD TRANSACTION . AS MENTIONED ABOVE THE MONEY WAS DEPOSITED INTO THE ACCOUNT AND IMMEDIATELY WIRED OUT ON THE INSTRUCTION OF HAK, SO THAT THE OWNERS OF THE PROPERTY COULD NOT RECOVER THE SUMS. THE OWNERS SUBSEQUENTLY CONTACTED UBS IN AN ATTEMPT TO RECOVER THE FUNDS AND O NLY AT THIS TIME DID UBS BECOME AWARE OF THE SUSPECT NATURE OF THE TRANSACTION AND OF MR. KHAN. THERE WERE NO OTHER TRANSACTIONS ON THIS ACCOUNT (INCLUDING NO BOOKED OR REMITTED BOND OR OTHER SECURITIES TRANSACTIONS). 11 ITA NOS. 4163 - 4169/M/10 (A.YS. 2001 - 02 TO 2007 - 08) RHEEMA HASSAN ALI KHAN VS. DY. CIT AS IT TRANSPIRES, THEREFORE, THE FA CT OF THE CASH DEPOSIT IN THE ASSESSEES ACCOUNT IS ESTABLISHED BEYOND DOUBT, AND WHICH REMAINS TOTALLY UNEXPLAINED. THE SAME WOULD BE BY HER OR BY HER HUSBAND (HAK) ON HER BEHALF. RATHER, HOW DOES SHE, A HOUSE LADY, WHO CLAIMS TO BE ALSO INVOLVED IN HORSE RACING ACTIVITY A PROFESSION REQUIRING RIGOROUS TRAINING, IN WHICH HER HUSBAND IS ALSO SUPPOSEDLY ENGAGED IN, CAME IN POSSESSION OF THE CASH IN FOREIGN EXCHANGE, AND TO THAT EXTENT AND, FURTHER, TO WHAT END AND PURPOSE A FOREIGN BANK ACCOUNT STANDS OPEN ED, IS ITSELF SURPRISING AND NOT UNDERSTOOD. THE MATTER, THUS, WOULD HAVE DIFFERENT ASPECTS TO IT, ALL OF WHICH REMAIN TOTALLY UNANSWERED; IN FACT, A MYSTERY. WE ACCORDINGLY HAVE NO HESITATION IN CONFIRMING THE ADDITION OF THE IMPUGNED SUM. WE DECIDE ACCOR DINGLY. 19. GROUND 5 IS IN RESPECT OF CLAIM FOR LOSS OF RS.3,23,230/ - , SET OFF AGAINST THE INCOME OFFERED BY THE ASSESSEE FOR THE YEAR PER HER RETURN OF INCOME. THE SAME STANDS DISALLOWED IN THE ABSENCE OF ANY SUPPORTING EVIDENCE EITHER TOWARD PRIZE MONE Y INCOME, OR EXPENDITURE IN ITS RESPECT, BEING PRODUCED. THE LD. CIT(A) HAS DISCUSSED THIS GROUND AT PARAS 16, 17 OF HIS ORDER. IN SUM, HE HOLDS THE FINAL ACCOUNTS AS SUBMITTED BEING NEITHER AUTHENTICATED BY THE AUDITORS, OR EVEN VERIFIED BY THE ASSESSEE H ERSELF, SO THAT THE SAME COULD NOT BE RELIED UPON. THE EXPENSES ARE NOT VOUCHED, WITH THE ACCOUNT REFLECTING AN INCOME OF RS.13,12,340/ - ON ACCOUNT OF HORSE BETTING INCOME, AND WHICH HAD NOT BEEN DISCLOSED PER THE RETURN OF INCOME. 20. WE HAVE HEARD THE P ARTY BEFORE US. WE FIND THE REVENUES ARGUMENT AS STRANGE. IF THE ASSESSEES BOOKS OF ACCOUNT, ON WHICH SHE RELIES, ITSELF REFLECT AN INCOME NOT DECLARED PER HER RETURN FOR THE YEAR, THE PROPER COURSE WOULD HAVE BEEN TO SHOW CAUSE THE ASSESSEE IN THE MATTE R, AND DOES NOT MAKE FOR A GROUND FOR OR JUSTIFY THE DISALLOWANCE OF THE LOSS. THE REVENUE CAN EITHER CHOOSE TO GO BY THE ASSESSEES BOOKS OR REJECT THEM (AS UNRELIABLE). TRUE, THE EXPENSES ARE UN - VOUCHED, BUT SO IS THE INCOME. IN FACT, INCOME BY DEFINITIO N IS ONLY BY NET OF EXPENDITURE. THE IMPUGNED SUM APPEARS TO BE BY WAY OF LOSS, IMPLYING IT TO BE ON A DIFFERENT ACTIVITY, I.E., REPRESENTS A LOSS SUFFERED FOR THE YEAR THEREIN. WHAT IS THAT ACTIVITY? WE SAY SO AS THE 12 ITA NOS. 4163 - 4169/M/10 (A.YS. 2001 - 02 TO 2007 - 08) RHEEMA HASSAN ALI KHAN VS. DY. CIT SAME DOES NOT APPEAR TO BE HORSE BETTI NG, FOR WHICH THE LD. CIT(A) STATES OF AN UNRETURNED INCOME FOR RS.13.12 LACS, WHILE THE ACTIVITY OF OWNING AND MAINTAINING RACE HORSES HAS RESULTED IN A POSITIVE (NET) INCOME. WE MAY HERE ALSO CLARIFY THAT HORSE BETTING IS TO BE REGARDED AS SEPARATE ACTIV ITY, AND THE LOSS THEREIN, IF ANY, CANNOT BE ADJUSTED AGAINST INCOME FROM ANY OTHER ACTIVITY, INCLUDING THE ACTIVITY OF OWNING AND MAINTAINING HORSES. FURTHER, WE ALSO OBSERVE THAT WHILE THE A.O. STATES OF THE ASSESSEE RETURNING THE INCOME OF RS.9,89,120/ - FOR THE YEAR (REFER PARAS 4 AND 12 OF HIS ORDER), HE ADOPTS THE FIGURE OF RS.15,42,980/ - TOWARD THE SAME AT PARA 14 OF HIS ORDER. UNDER THE CIRCUMSTANCES, WE ONLY CONSIDER IT FIT AND PROPER TO RESTORE THE ASSESSMENT ON THIS GROUND BACK TO THE FILE OF TH E A.O. FOR FRESH ADJUDICATION, IN ACCORDANCE WITH THE LAW, ISSUING DEFINITE FINDINGS AND AFTER ALLOWING THE ASSESSEE AN OPPORTUNITY TO STATE HER CASE. REFERENCE IN THIS REGARD MAY ALSO BE MADE TO PARAS 55, 69 AND 111 OF THE ORDER IN THE CASE OF HAK (SUPRA) . WE DECIDE ACCORDINGLY. THIS ALSO DECIDES GD. 8 FOR A.Y. 2006 - 07. 21. GROUNDS 6 AND 7 STAND ALREADY DECIDED VIDE PARAS 14 AND 15 OF THIS ORDER RESPECTIVELY, DISPOSING GROUNDS 8 AND 9 RESPECTIVELY FOR A.Y. 2001 - 02, EVEN AS HELD IN THE SAID PARAS, TO WHI CH REFERENCE IS DRAWN. GROUNDS 8 AND 9 ARE GENERAL IN NATURE, WARRANTING NO ADJUDICATION. WE DECIDE ACCORDINGLY. ASSTT. YEAR 2003 - 04 22. GROUNDS 1 AND 2 ARE COMMON TO THAT FOR A.Y. 2001 - 02 AND, ACCORDINGLY, STAND DISPOSED OF VIDE PARAS 3 AND 5 OF THIS O RDER RESPECTIVELY. PARAS 5 THROUGH 8 OF THE ASSESSMENT ORDER, WE MAY ADD, CONTAIN DETAILED DISCUSSION ON THE PROVISION OF DUE AND ADEQUATE OPPORTUNITY TO THE ASSESSEE. GROUND 3 IS GENERAL IN NATURE, WARRANTING NO ADJUDICATION. GROUND 4 IS TOWARD THE ADDITI ON IN THE SUM OF RS.2.50 LACS, BEING THE ALLEGED PAYMENT TOWARDS THE PURCHASE OF CAR/CAR LOAN. THE ASSESSEE WAS DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOUND TO HAVE AVAILED A CAR LOAN TOWARD A CAR 13 ITA NOS. 4163 - 4169/M/10 (A.YS. 2001 - 02 TO 2007 - 08) RHEEMA HASSAN ALI KHAN VS. DY. CIT (REGISTRATION NO. MH 12BJ 786), MAKING REPAYMENT TO CI TI FINANCIALS FROM 20.3.2003 TO 31.12.2006, AS UNDER (REFER PARA 10 OF THE ASSESSMENT ORDER): A.Y. AMOUNT (RS.) 2003 - 04 2,50,000 2004 - 05 7,73,800 2005 - 06 8,80,800 2006 - 07 9,87,060 2007 - 08 41,800 29,33,460 THE ADDITION WAS, ACCORDINGLY, PROPOSED FO R THE AMOUNT/S PAID FOR EACH OF THE YEARS. THE ASSESSEE NOT FURNISHING ANY SUBSTANTIVE REPLY TO THE SHOW CAUSE NOTICE DATED 24.11.2008 IN ITS RESPECT, THE SAME CAME TO BE ASSESSED AS INCOME. IN APPEAL, THE ASSESSEE SUBMITTED THAT THE IMPUGNED SUM WAS NOT P AID BY HER BUT BY THE CAR DEALER, M/S. KOTHARI CARS PVT. LTD. THE LD. CIT(A) FOUND THAT THE CAR WAS BOOKED ON 28.3.2003, AND THE CAR LOAN WAS IN THE ASSESSEES NAME, WITH RS.2.50 LACS REPRESENTING THE MARGIN MONEY TOWARD THE SAME. THE SAID AMOUNT WAS RECEI VED BY CITI FINANCIAL CONSUMER FINANCE INDIA LTD. (CCFIL) FROM THE DEALER, AND WHO WOULD HAVE ONLY RECOVERED THE SAME FROM THE ASSESSEE, IN WHOSE NAME THE CAR WAS BOOKED. THE ADDITION BEING CONFIRMED THUS, THE ASSESSEE IS IN SECOND APPEAL. 23. WE HAVE HEA RD THE PARTY BEFORE US AND PERUSED THE MATERIAL ON RECORD. THE CAR HAS BEEN PURCHASED ON 28.3.2003, PAYING RS.2.50 LACS (TO CCFIL) TOWARD MARGIN MONEY FOR THE CAR LOAN AVAILED FOR THE SAID PURCHASE, WHICH STANDS THUS COMPLETED ON THE PAYMENT OF THE PURCHAS E PRICE (BY THE FINANCING INSTITUTION) DURING THE RELEVANT PREVIOUS YEAR ITSELF. THE PAYMENT OF THE MARGIN MONEY (FOR THE CAR LOAN) BY THE DEALER, WHERE SO, COULD ONLY BE FOR AND ON BEHALF OF THE ASSESSEE. RATHER, IN ALL PROBABILITY, IT WOULD HAVE ONLY TRA NSMITTED THE AMOUNT ALREADY RECEIVED FROM THE ASSESSEE, THE PURCHASER OF THE CAR, AND TO WHOM THE LOAN HAS BEEN GIVEN. WHY, PRAY, WOULD THE DEALER PAY THE PURCHASE PRICE, IN WHOLE OR IN PART AND, THUS, THE SAID AMOUNT, FROM HIS OWN POCKET AND, EVEN SO, NO T RECOVER THE SAME FROM THE ASSESSEE, MAKING THUS A GIFT TO THE ASSESSEE FOR THE SAID AMOUNT. IT MAY BE ARGUED THAT THE 14 ITA NOS. 4163 - 4169/M/10 (A.YS. 2001 - 02 TO 2007 - 08) RHEEMA HASSAN ALI KHAN VS. DY. CIT REVENUE HAS NOT DIRECT PROOF OF PAYMENT BY THE ASSESSEE IN REBUTTAL OF HER CASE. ON THE CONTRARY, IN OUR VIEW, TO ACCEPT THE ASSESSEES STAND, I.E., OF THE DEALER BEARING THE (OR A PART OF THE) PURCHASE PRICE, IS RIDICULOUS, CALLING FOR A COMPLETE AND WILLING SUSPENSION OF THE SENSE OF THE REALITY OF THE TRANSACTION, MORE SO IN THE ABSENCE OF ANY DIRECT EVIDENCE TOWARD THE SAME. ALL THAT T HE ASSESSEE WAS REQUIRED TO, TO ESTABLISH HER CASE, DO WAS TO PRODUCE A CONFIRMATION FROM, OR A COPY OF THE ASSESSEES ACCOUNT IN THE BOOKS OF THE SAID DEALER. THIS WOULD ALSO REVEAL IF THE ASSESSEE HAD REIMBURSED WHERE SO, THE DEALER SUBSEQUENT TO 31.3. 2003, IN WHICH CASE THE SAME WOULD NOT STAND TO BE ASSESSED FOR THE CURRENT YEAR. THE BURDEN OF PROOF TO ESTABLISH THE EXISTENCE OF MONEY (AND/OR PAYMENT) U/S. 69A IS ON THE REVENUE, BUT THE SAME CAN BE DISCHARGED BY IT BY ESTABLISHING FACTS AND CIRCUMSTAN CES FROM WHICH A REASONABLE INFERENCE TOWARD THE SAME CAN BE DRAWN ( C. K. SUDHAKARAN VS. ITO [2005] 279 ITR 533 (KER)). WE, ACCORDINGLY, FIND NO MERIT IN THE ASSESSEES CASE, AND UPHOLD THAT OF THE REVENUE. THIS ALSO DECIDES GROUNDS 4, 6, 5 AND 10 FOR A.YS . 2004 - 05 TO 2007 - 08 RESPECTIVELY. 24. VIDE HER GROUND 5, THE ASSESSEE DISPUTES AN ADDITION FOR RS.6,82,500/ - . THE ASSESSEES SAVINGS BANK WITH ABN AMRO BANK (# 949548), WHICH WAS FOUND TO HAVE A BALANCE OF RS.64,84,900/ - ON 05.01.2007, THE DATE OF SEARC H, WAS FURTHER OBSERVED TO BEAR CASH DEPOSITS, ON DIFFERENT DATES, AT A TOTAL OF RS.6,82,500/ - DURING THE RELEVANT PREVIOUS YEAR (REFER PARA 11 OF THE ASSESSMENT ORDER). THE ASSESSEE ADMITTING, VIDE STATEMENT U/S. 131 DATED 03.5.2007, TO THE SOURCE THEREOF AS BEING OUT OF HER HORSE RACING INCOME, THE SAME WAS ASSESSED AS INCOME. THE ASSESSEE FILED A CHART IN THE APPELLATE PROCEEDINGS, EXHIBITING THE SOURCE OF THE ADMITTED CASH DEPOSITS IN HER BANK ACCOUNT AS BEING OUT OF CASH - IN - HAND (RS.23,000) AND THE BAL ANCE (RS.6,59,500/ - ) FROM SUNDRY TAXABLE INCOME WHATEVER THAT MAY MEAN. THE SOURCE OF THE CASH - IN - HAND WAS AGAIN STATED TO BE HORSE RACING INCOME (TAXABLE). NO BOOKS OF ACCOUNT, INCLUDING CASH BOOK, WERE HOWEVER PRODUCED. HOW COULD THEN IT BE SAID THAT T HE AMOUNT WAS DISCLOSED ? THE ADDITION WAS ACCORDINGLY CONFIRMED, SO THAT THE ASSESSEE IS IN SECOND APPEAL. 15 ITA NOS. 4163 - 4169/M/10 (A.YS. 2001 - 02 TO 2007 - 08) RHEEMA HASSAN ALI KHAN VS. DY. CIT 25. WE HAVE HEARD THE PARTY BEFORE US AND PERUSED THE MATERIAL ON RECORD. THE ONLY ISSUE IS IF THE AMOUNT DEPOSITED, ADMITTEDLY ONLY OUT OF THE ASS ESSEES TAXABLE INCOME, HAS BEEN ALREADY RETURNED, I.E., PER THE ASSESSEES RETURN OF INCOME FOR THE YEAR, FILED ON 23.5.2007, DECLARING AN INCOME OF RS.49.28 LACS. IT IS ONLY THE ASSESSEES BOOKS OF ACCOUNT THAT CAN ESTABLISH THE SAME IN - AS - MUCH AS THEY W OULD REVEAL THE APPLICATION OF THE INCOME FOR THE YEAR AND/OR ALSO OF THAT BROUGHT FORWARD IN BOOKS FROM AN EARLIER YEAR, I.E., IN THE FORM OF CASH OR (SAY) A DEBT, SINCE REALISED. THE ONUS FOR THE SAME; SHE CLAIMING IN EFFECT A DOUBLE ADDITION, IS ONLY ON THE ASSESSEE. WE, ACCORDINGLY, ONLY CONSIDER IT FIT AND PROPER UNDER THE CIRCUMSTANCES TO RESTORE THIS ISSUE BACK TO THE FILE OF THE A.O., TO DECIDE AFRESH IN ACCORDANCE WITH THE LAW, AFTER ALLOWING THE ASSESSEE AN OPPORTUNITY TO SUBSTANTIATE HER CLAIM/S. THE ASSESSEE, WE MAY ADD, HAS TAKEN A GROUND, IN FACT FOR EACH YEAR, TOWARD TELESCOPING BENEFIT, AND ITS CASE QUA THIS GROUND COULD ALSO BE CONSIDERED AS FALLING UNDER THE SAID GROUND. WE DECIDE ACCORDINGLY. THIS ALSO DECIDES GROUNDS 5, 5, 6 AND 7 FOR A.Y S. 2004 - 05 TO 2007 - 08 RESPECTIVELY. 26. GROUND 6 IS QUA AN ADDITION FOR RS.4 LACS AT A.Y. 2003 - 04 TOWARD PURCHASE OF FOUR HORSES ON DIFFERENT DATES DURING THE YEAR, AS FOUND BY THE REVENUE ON AN ENQUIRY WITH RWITC, MUMBAI, AND OTHER STUD FARMS AT PUNE, ADOPTING AS IN THE ASSESSEES OWN CASE (REFER PARA 7 OF THIS ORDER), AS WELL AS THAT OF HAK (IN ITA NOS. 4156 - 4162/MUM/2010 DATED 29.02.2016 ), THE PURCHASE PRICE OF RS.1 LAC EACH. THE SAME WAS CONFIRMED AS THE ASSESSEE COULD NOT FURNISH SATISFACTORY EXPL ANATION AS TO THE SOURCE OF THE PURCHASE OF HORSES, REFLECTED AT RS.5.54 LACS, IN THE ASSESSEES BOOKS (REFER PARA 20 OF THE IMPUGNED ORDER). AGGRIEVED, THE ASSESSEE IS IN SECOND APPEAL. 27. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATERIAL ON RECORD. T HE PURCHASE OF HORSES SIX IN NUMBER AS REFLECTED IN THE ASSESSEES BOOKS IS, SAVE ONE (I.E., ON 28.11.2002) FOR DATES DIFFERENT FROM THAT ON WHICH THE FOUR HORSES WERE FOUND AS PURCHASED BY THE REVENUE. IN FACT, EVEN THE PURCHASE OF 28.11.2002 COULD BE O F A DIFFERENT HORSES AND IT WOULD STAND TO BE ASCERTAINED ONLY UPON EXAMINING THE RELEVANT 16 ITA NOS. 4163 - 4169/M/10 (A.YS. 2001 - 02 TO 2007 - 08) RHEEMA HASSAN ALI KHAN VS. DY. CIT DETAILS. THE REVENUE HAS IN MANY CASES, RESTRICTED THE ADDITION TO THE SOURCE OF THE PURCHASE OF FOUR HORSES ONLY. IN FACT, THE SAID REFLECTION WOULD BE OF NO AVAIL AS THE SAME IS ONLY BY WAY OF A JOURNAL VOUCHER, CREDITING THE PURCHASE PRICE TO THE APPELLANTS CAPITAL ACCOUNT, AS IN THE ASSESSEES CASE FOR A.Y. 2001 - 02, SO THAT THE SOURCE OF THE PURCHASE AMOUNT, WHICH TRANSLATE INTO THE SOURCE OF THE CREDIT (IN VIEW OF THE JOURNAL VOUCHER) REMAINS UNEXPLAINED. THE SAME WOULD, THUS, NOT ASSIST THE ASSESSEES CASE IN ANY MANNER. WE, ACCORDINGLY, AS IN THE CASE OF THE ASSESSEES APPEAL FOR A.Y. 2001 - 02 (REFER PARA 7 OF THIS ORDER) , F I ND NO MERIT IN THE ASSESSEES CASE. W E DECIDE ACCORDINGLY, DISMISSING THE RELEVANT GROUND. THIS ALSO DECIDES GROUNDS 7, 8 AND 10 FOR A.YS. 2004 - 05, 2005 - 06 AND 2006 - 07 RESPECTIVELY. 28. GROUND 7 IS TOWARD SET OF LOSS OF RS.1,21,271/ - AGAINST THE INCOME DECLARED. WE FIND THAT THE CASE OF THE PARTIES IS THE SAME AS IN RESPECT OF GROUND 5 FOR A.Y. 2002 - 03, DISCUSSED AND DECIDED PER PARAS 19 - 20 OF THIS ORDER. FOR THE REASONS THAT INFORM THE SAME, WE DECIDE ACCORDINGLY. 29. GROUND 8 IS QUA AN ADDITION FOR RS.1,42,50,000/ - TOWARD UNEXPLAINED IN VESTMENT IN HOUSE PROPERTY, I.E., 39 - C, ANAND DARSHAN, 13 - PEDDAR ROAD, MUMBAI - 400 026. THE SAID PROPERTY, A RESIDENTIAL FLAT, IS ADMITTEDLY PURCHASED BY THE ASSESSEE DURING THE RELEVANT YEAR AT A CONSIDERATION OF RS.142.50 LACS. THE SOURCE OF THE INVESTMEN T WAS EXPLAINED AS BY WAY OF A LOAN FOR RS.140 LACS FROM FAISAL ABBAS, HER BROTHER. MR. ABBAS, ON BEING QUESTIONED IN THE MATTER, ACCEPTED HAVING TRANSFERRED SUMS AT RS.140 LACS TO HIS SISTERS BANK ACCOUNT WITH ABN AMRO BANK, AS UNDER: DATE OF RECEIPT AMO UNT (IN RS.) 17.02.2003 10,00,000 17.02.2003 15,00,000 17.02.2003 15,00,000 17.02.2003 10,00,000 22.02.2003 50,00,000 24.02.2003 40,00,000 TOTAL 1,40,00,000 17 ITA NOS. 4163 - 4169/M/10 (A.YS. 2001 - 02 TO 2007 - 08) RHEEMA HASSAN ALI KHAN VS. DY. CIT AS REGARDS THE SOURCE THEREOF, HE ADMITTED, VIDE STATEMENT U/S. 131 OF THE ACT DATED 20.3. 2007, AS WELL AS SUBSEQUENT LETTERS DATED 10.12.2008 AND 16.12.2008, TO HAVE RAISED A LOAN FOR LIKE AMOUNT FROM ONE, M/S. DHANSHREE FINCAPS LTD. (DFL) GOREGAON (EARLIER KNOWN AS M/S. STEEL UDYOG.COM (I) LTD.), TRANSFERRING THE FUNDS SO RECEIVED TO HIS SIST ERS BANK ACCOUNT. THIS, HE EXPLAINED, WAS DONE TO HELP HIS SISTER, WHO, AS WELL AS HER HUSBAND (HAK), DID NOT HAVE PAN AT THE RELEVANT TIME. THAT THE BORROWER SHOULD BE AN INCOME - TAX ASSESSEE WAS ONE OF THE CONDITIONS FOR THE LOAN, THE OTHER BEING THAT TH E PROPERTY DOCUMENTS SHALL REMAIN WITH THE LENDER. THE SAME, HOWEVER, DID NOT FIND FAVOUR WITH THE REVENUE. THERE WAS NO CONFIRMATION FROM DFL, WHICH CONCERN WAS ON AN ENQUIRY NOT FOUND BY THE REVENUE. THE GENUINENESS OF THE TRANSACTION WAS IN SERIOUS DOUB T. THE ASSESSEE COULD NOT BE, UNDER THE CIRCUMSTANCES, CONSIDERED TO HAVE SATISFACTORILY EXPLAINED THE SOURCE (FUNDING) OF THE INVESTMENT IN HER PEDDAR ROAD RESIDENCE, THE OSTENSIBLE SOURCE, THE LENDER, FAISAL ABBAS, ADMITTING TO HAVE MERELY ROUTED THE FUN DS THROUGH HIS ACCOUNT (REFER PARAS 14 AND 24 OF THE ASSESSMENT AND THE IMPUGNED ORDER RESPECTIVELY). THE AMOUNT WAS ACCORDINGLY BROUGHT TO TAX IN THE HANDS OF THE ASSESSEE, THE BENEFICIARY OF THE LOAN ACCOUNT AS WELL AS THE OWNER OF THE PROPERTY. AGGRIEVE D, THE ASSESSEE IS IN SECOND APPEAL. 30. WE HAVE HEARD THE PARTY BEFORE US AND PERUSED THE MATERIAL ON RECORD. THE ADMITTED FACTS ARE THAT THE ASSESSEE, THROUGH HER BANK ACCOUNT, RECEIVED SUMS, STATED TO BE BY WAY OF LOAN/S, IN AN AGGREGATE OF RS.140 LACS (FROM 17.2.2003 TO 24.2.2003) FROM HER BROTHER, FAISAL ABBAS, FOR / TOWARD THE PEDDAR ROAD FLAT PURCHASED BY HER (FOR RS.142.50 LACS), AND WHO, IN TURN, RECEIVED THE SAME BY WAY OF LOAN FROM A COMPANY BY THE NAME, DFL, GOREGOAN. THE STATED NATURE OF THE AMO UNT/S RECEIVED, CREDITED TO THE ACCOUNT OF FAISAL ABBAS IN THE ASSESSEES BOOKS, IS THUS A BORROWING AND THE SOURCE THEREOF IS DFL; FAISAL ABBAS BEING ADMITTEDLY AN INTERMEDIARY, WHO DID NOT HAVE EITHER THE CAPITAL OR RESOURCES, TO LEND TO HIS SISTER, SO T HAT THE QUESTION OF GIFT TO HER, WHICH CAN ONLY BE OF ONES (OWN) PROPERTY, DOES NOT ARISE. THE CONFIRMATION FROM DFL, FROM WHOM THE LOAN IS STATED TO HAVE BEEN RAISED (BY FAISAL 18 ITA NOS. 4163 - 4169/M/10 (A.YS. 2001 - 02 TO 2007 - 08) RHEEMA HASSAN ALI KHAN VS. DY. CIT ABBAS FOR AND ON BEHALF OF HIS SISTER, THE ASSESSEE), IS CONSPICUOUS BY ITS A BSENCE. ON WHAT BASIS THEN CAN IT BE SAID TO BE SOURCED FROM DFL? NO SUCH CONCERN WAS FOUND BY THE REVENUE ON ENQUIRY . EVEN SO, IT CAN BE SAID TO BE A SOURCE ONLY WHERE IT OWNS A TRANSACTION, LENDING THE MONEY TO THE ASSESSEE (OR EVEN TO MR. ABBAS) IN ITS OWN RIGHT, ASSUMING THE RISK AND REWARD THEREOF. FOR ALL WE KNOW, THE SAID CONCERN, EVEN IF IT EXISTS, MAY ITSELF BE AN INTERMEDIARY. THEN, AGAIN, WHAT ARE THE TERMS AND CONDITIONS OF LOAN? NO AGREEMENT TOWARD THE SAME HAS BEEN PRODUCED AT ANY STAGE. A LOAN, AND OF THIS SCALE, WITHOUT A WRITTEN AGREEMENT, BINDING THE PARTIES AND REDUCING THE UNCERTAINTY ATTENDING A VERBAL AGREEMENT, IS INCOMPREHENSIBLE. WHAT IS THE REPAYMENT CAPACITY, EVEN IF IT IS A LOAN TRANSACTION, OF EITHER THE ASSESSEE, ITS BENEF ICIARY, OR EVEN FAISAL ABBAS, THE ADMITTED INTERMEDIARY, WHICH IS WHAT ANY LENDER SHALL LOOK AT. WHAT ARE THE CREDENTIALS OF ABBAS, FOR THE LENDER TO HAVE LENDED HIM? WHAT IS THE STIPULATED END USE OF THE LOAN, WHICH ANY LOAN AGREEMENT ALSO SPECIFIES? WITH OUT THE AGREEMENT, HOW COULD IT BE SAID THAT THE LOAN, WHICH WAS GIVEN TO FAISAL ABBAS, WAS TOWARD THE PURCHASE OF THE STATED HOUSE PROPERTY BY THE ASSESSEE, OR EVEN FOR THE PURCHASE OF A HOUSE? WHAT IS STIPULATION WITH REGARD TO THE REPAYMENT, WHICH ALONG WITH THE INTEREST WOULD BE THE CONSIDERATION FOR THE LOAN? IN FACT, NO INTEREST IS BEING PAID AND, THUS, INFERABLY, NOT CHARGED. WHY? WE COULD GO ON, I.E., ON TO THE FURTHER ASPECTS OF THE MATTER, ALL OF WHICH RAISE SUBSTANTIAL DOUBTS AS REGARDS THE TRUTH OF THE EXPLANATION. THE EXPLANATION IS COMPLETELY UNSUBSTANTIATED, IF NOT FANCIFUL. BOTH THE NATURE AND SOURCE OF THE SAID CREDIT/S, WHICHEVER WAY ONE MAY LOOK AT IT, IS COMPLETELY UNPROVED. THERE IS FURTHER NO EXPLANATION WITH REGARD TO THE BALANCE COMPO NENT OF RS.2.50 LACS, NOR EVEN ANY FINDING ON THE SAID AMOUNT, WHICH APPEARS TO HAVE BEEN INVESTED BY THE ASSESSEE OUT OF HER OWN SOURCES; HER ACCOUNTS REFLECTING INVESTMENT (IN HOUSE PROPERTY) AT RS.142.50 LACS. WE, ACCORDINGLY, HAVE NO HESITATION IN UPH OLDING THE IMPUGNED ASSESSMENT OF THE IMPUGNED INVESTMENT IN PROPERTY (OR , RATHER, THE CREDIT TO THE ACCOUNT OF FAISAL ABBAS) TO THE EXTENT OF RS.140 LACS. FOR THE BALANCE RS.2.50 LACS, IT MAY WELL BE THAT 19 ITA NOS. 4163 - 4169/M/10 (A.YS. 2001 - 02 TO 2007 - 08) RHEEMA HASSAN ALI KHAN VS. DY. CIT THE SOURCE THEREOF IS THE ASSESSEES WHO HAS RET URNED REASONABLE INCOME FOR BOTH THE IMMEDIATE PRECEDING AS WELL AS THE CURRENT YEAR, CAPITAL, SO THAT THERE IS NO FRESH CREDIT FOR THE SAID AMOUNT IN HER BOOKS OF ACCOUNT. THE A.O., BEFORE WHOM THE SAME WERE NOT PRODUCED, SHALL, WHILE GIVING THE APPEAL EF FECT, ALLOW THE ASSESSEE AN OPPORTUNITY TO PROVE THE SOURCE TO THE EXTENT OF RS.2.50 LACS, TO WHICH LIMITED EXTENT THE ASSESSMENT IS THUS SET ASIDE. WE DECIDE ACCORDINGLY. 31. GROUND 9 IS IN RESPECT OF AN ADDITION FOR RS.1 LAC ON THE GROUND THAT THE ASSES SEE DECLARED THE SAID AMOUNT AS HER ADDITIONAL INCOME FOR THE YEAR BEFORE THE HONBLE SETTLEMENT COMMISSION. THE ASSESSEE DID NOT RAISE ANY GROUND IN RESPECT OF THE SAID ADDITION BEFORE THE FIRST APPELLATE AUTHORITY AND, RESULTANTLY, THE SAME IS NOT SUBJEC T TO HIS FINDINGS/ADJUDICATION. THAT IS, IT DOES NOT ARISE OUT OF THE IMPUGNED ORDER. NO APPLICATION FOR THE ADMISSION FOR ADDITIONAL GROUND HAS ALSO BEEN MADE. THE SAME IS ACCORDINGLY NOT MAINTAINABLE. THE DECLARATION BEFORE THE SETTLEMENT COMMISSION IS A CCOMPANIED BY VERIFICATION BY THE APPLICANT, AFFIRMING IT TO BE A TRUE AND CORRECT DISCLOSURE. WE, ACCORDINGLY, CONFIRM THE ASSESSMENT. HOWEVER, IN - AS - MUCH AS AND TO THE EXTENT THE DECLARATION IS NOT TOWARD ANY SPECIFIC EXPENDITURE/INVESTMENT, ETC., THE A. O. SHALL CONSIDER THE SAID INCOME AS AVAILABLE TOWARD APPLICATION FOR ANY OTHER PURPOSE, AS EXPLAINED WHILE DISPOSING GROUND # 5 ABOVE, AS WELL AS GDS. # 4 AND 7 FOR A.Y. 2006 - 07 (INFRA). FURTHER, THE INCOME, FOR THE PURPOSE OF RECKONING THE GENERATION OF CASH, SHALL BE CONSIDERED AS ACCRUING PROPORTIONATELY (EVENLY) DURING THE YEAR. WE DECIDE ACCORDINGLY. THIS ALSO DECIDES GROUNDS 9, 9, 11 AND 13 FOR A.YS. 2004 - 05 TO 2007 - 08 RESPECTIVELY; THE RESPECTIVE CASES OF THE PARTIES BEING THE SAME. 32. GROUNDS 10 AND 11 STAND ALREADY DECIDED VIDE PARAS 14 AND 15 OF THIS ORDER RESPECTIVELY, DISPOSING GROUNDS 8 AND 9 RESPECTIVELY FOR A.Y. 2001 - 02, EVEN AS HELD IN THE SAID PARAS, TO WHICH REFERENCE IS DRAWN. GROUNDS 12 AND 13 ARE GENERAL IN NATURE, WARRANTING NO ADJU DICATION. WE DECIDE ACCORDINGLY. 20 ITA NOS. 4163 - 4169/M/10 (A.YS. 2001 - 02 TO 2007 - 08) RHEEMA HASSAN ALI KHAN VS. DY. CIT ASSTT. YEAR 2004 - 05 33. GROUNDS 1 AND 2 ARE COMMON TO THAT FOR A.Y. 2001 - 02 AND, ACCORDINGLY, STAND DISPOSED OF VIDE PARAS 3 AND 5 OF THIS ORDER RESPECTIVELY. PARAS 5 THROUGH 8 OF THE ASSESSMENT ORDER, WE MAY ADD, CONTA IN DETAILED DISCUSSION ON THE PROVISION OF DUE AND ADEQUATE OPPORTUNITY TO THE ASSESSEE. GROUND 3 IS GENERAL IN NATURE, WARRANTING NO ADJUDICATION. GROUND 4 IS IN RESPECT OF REPAYMENT OF CAR LOAN FOR RS.7,73,800/ - . THE SAME GETS DECIDED VIDE PARA S 22 - 23 OF THIS ORDER, DECIDING GROUND 4 FOR A.Y. 2003 - 04, THE RESPECTIVE CASE OF THE PARTIES BEING THE SAME (REFER PARAS 10 AND 18 - 19 OF THE ASSESSMENT AND THE IMPUGNED ORDER RESPECTIVELY). 34. GROUND # 5 IS IN RESPECT OF AN ADDITION FOR RS.17,45,500 TOWARDS CASH DEPOSITS IN HER BANK ACCOUNT WITH ABN AMRO BANK DURING THE YEAR. THE SAME GETS DECIDED VIDE PARAS 24 - 25 OF THIS ORDER, DECIDING GROUND 5 FOR A.Y. 2003 - 04; THE RESPECTIVE CASES OF THE PARTIES BEING THE SAME (REFER PARAS 11 AND 24 - 25 OF THE ASSESSMENT AND T HE IMPUGNED ORDER RESPECTIVELY). 35. GROUND # 6 IS IN RESPECT OF UNPROVED REPAYMENT AT RS.35 LACS FOR THE YEAR OF LOAN OF RS.140 LACS BY THE ASSESSEE FROM M/S. DHANSHREE FINCAPS LTD. (DFL), THROUGH FAISAL ABBAS. THE SAME STANDS CLAIMED TO HAVE BEEN REP AID TO THE EXTENT OF RS.90 LACS, AS UNDER, WITH THE BALANCE RS.50 LACS STATED AS OUTSTANDING: A.Y. AMOUNT (IN RS.) 2004 - 05 35 LACS 2005 - 06 10 LACS 2006 - 07 45 LACS THE POSITION CONTINUED TO OBTAIN BEFORE THE LD. CIT(A) AND, IN FACT, EVEN BEFORE US IN - AS - MUCH AS THERE IS NOTHING STATED IN ITS RESPECT, SO THAT THE ADDITION STAND CONFIRMED. 36. WE HAVE ALREADY FOUND THE LOAN AS UNPROVED, CONFIRMING THE ADDITION TO THAT EXTENT (RS.140 LACS), WHILE RESTORING THAT QUA THE BALANCE AMOUNT OF RS.2.50 LACS T HE STATED PURCHASE PRICE OF THE HOUSE PROPERTY BEING RS.142.50 LACS, BACK TO THE FILE OF 21 ITA NOS. 4163 - 4169/M/10 (A.YS. 2001 - 02 TO 2007 - 08) RHEEMA HASSAN ALI KHAN VS. DY. CIT THE A.O. IN - AS - MUCH AS IT APPEARED THAT SHE HAD INVESTED THE BALANCE FROM HER OWN, ACCOUNTED SOURCES. THE CREDIT HAVING NOT BEEN FOUND AS A GENUINE CREDIT, WHICH FORMS THE BASIS FOR IT BEING CONSIDERED AS ASSESSEES DEEMED INCOME, THERE IS NO QUESTION OF ITS REPAYMENT, OR FOR A CONSIDERATION OF A CLAIM IN ITS RESPECT. THERE CAN EQUALLY BE NO FURTHER ADDITION, EVEN WHERE THE REPAYMENT IS NOT SATISFACTORILY PROVED QUA I TS SOURCE. THAT IS, THERE CAN BE NO QUESTION OF IT BEING ADDED AGAIN, AND THE REVENUES ACTION IN BRINGING THE REPAYMENT AMOUNT TO TAX, CAN, UNDER THE CIRCUMSTANCES, ONLY BE CONSIDERED AS PROTECTIVE. WE, ACCORDINGLY, DELETE THE ADDITION, WHICH SHALL SURVIV E (AND STAND RESTRICTED) FOR CONSIDERATION, WHERE AND TO THE EXTENT THE ADDITION FOR RS.140 LACS, IN RESPECT OF THE LOAN, CONFIRMED BY US FOR A.Y. 2003 - 04 (REFER PARA 30 OF THIS ORDER) STANDS DELETED, I.E., TOWARD PROVING THE SOURCE OF REPAYMENT OF THE LOA N, WHICH WOULD IN THAT CASE BE CONSIDERED AS A GENUINE CREDIT BY WAY OF LOAN FROM DFL. WE HAVE, THOUGH, IN THIS CONTEXT, TWO OBSERVATIONS. FIRSTLY, THE REPAYMENT OF LOAN HAS BEEN CLAIMED TO FAISAL ABBAS, WHO IS ADMITTEDLY ONLY AN INTERMEDIARY. THE FURTHER REPAYMENT TO DFL WOULD REQUIRE BEING EXAMINED AND, ACCORDINGLY, SUBJECT TO A FINDING. SECONDLY, THE ASSESSEE STATES OF HAVING FUNDED THE REPAYMENT OUT OF HER HORSE RACE WINNINGS, DULY RETURNED. THIS ASPECT, WHICH THE REVENUE STATES OF BEING NOT PROVED IN T HE ABSENCE OF ANY EVIDENCE, WOULD REQUIRE BEING VERIFIED AS TO ITS VERACITY AND, FURTHER, GIVEN EFFECT TO. IF THE LOAN IS, AS HELD BY US, NOT GENUINE, THERE IS NO QUESTION OF ITS REPAYMENT, RELEASING CASH, IF ANY, EXPENDED TOWARD THE SAME IN THE BOOKS. I N FACT, CASH IS ALSO STATED TO BE SOURCED FROM HAK (AT RS.25 LACS FOR A.Y. 2006 - 07), AND FROM CASH - IN - HAND (AT RS.5 LACS), ALSO ALSO FOR THAT YEAR. IN THE EVENT, HOWEVER, OF THE LOAN BEING CONSIDERED GENUINE, THE SOURCE OF REPAYMENT AS WELL AS ITS APPLICAT ION, IN EXAMINATION OF THE ASSESSEES CLAIM IN ITS RESPECT, WOULD MERIT DETERMINATION, ALSO TAKING INTO ACCOUNT THE OBSERVATIONS BY THE LD. CIT(A) (REFER PARA 6 OF THE IMPUGNED ORDER). WE DECIDE ACCORDINGLY. THIS ALSO DECIDES GROUNDS 7 AND 9 FOR A.YS. 2005 - 06 AND 2006 - 07, WHEREAT THE REPAYMENTS (OF LOAN) HAVE BEEN CLAIMED AT RS.10 LACS AND RS.45 LACS RESPECTIVELY. 22 ITA NOS. 4163 - 4169/M/10 (A.YS. 2001 - 02 TO 2007 - 08) RHEEMA HASSAN ALI KHAN VS. DY. CIT 37. GROUND # 7 CONTESTS AN ADDITION FOR RS.7 LACS TOWARD UNEXPLAINED INVESTMENT IN HORSES. THE SAME GETS DECIDED VIDE PARA 27 OF THIS ORDER, D EC IDING GROUND 6 FOR A.Y. 2003 - 04; THE RESPECTIVE CASE OF THE PARTIES BEING THE SAME (REFER PARAS 13 AND 21 OF THE ASSESSMENT AND THE IMPUGNED ORDER RESPECTIVELY). 38. GROUND # 8 IS TOWARD AN ADDITION FOR RS.4,10,600/ - , BEING THE VALUATION OF AN OPAL CAR (REGISTRATION NO. MH 12 BV 4589) PURCHASED BY THE ASSESSEE, THE SOURCE OF WHICH IS STATED TO BE A LOAN FROM HDFC BANK. THE SAME THOUGH CAME TO BE ADDED IN THE ABSENCE OF ANY SUBSTANTIVE REPLY BY THE ASSESSEE ON BEING SHOW CAUSED IN THE MATTER VIDE NOTICE DATED 24.11.2008. IN APPEAL, THE ASSESSEE CLAIMED TO HAVE TAKEN LOAN FROM HDFC BANK FOR RS.3,99,000/ - , REPAYING RS.76,980/ - DURING THE YEAR. THE SAME WAS, HOWEVER, NOT ACCEPTED, AS NOTHING TO EVIDENCE THE SAME, OR ITS REPAYMENT, WAS PRODUCED. AGGRIEVED, TH E ASSESSEE IS IN SECOND APPEAL. 39. WE HAVE HEARD THE PARTY BEFORE US AND PERUSED THE MATERIAL ON RECORD. THE ASSESSEE HAS NOT IMPROVED HER CASE IN ANY MANNER. THE PURCHASE OF THE CAR IS ADMITTED. ALL THAT WAS REQUIRED OF THE ASSESSEE WAS TO PRODUCE THE L OAN ACCOUNT FROM THE BANK, SO THAT IT IS ONLY THE MARGIN MONEY TOWARD THE PURCHASE OF CAR, OR THE AMOUNT REPAID DURING THE YEAR, WHERE UNPROVED AS TO ITS SOURCE, WHICH COULD BE ADDED. UNDER THE CIRCUMSTANCES, WE CONFIRM THE ADDITION, DECIDING ACCORDINGLY. 40. GROUND 9 IS IN RESPECT OF AN ADDITION FOR RS.2 LACS, BEING THE AMOUNT OFFERED AS ADDITIONAL INCOME BY THE ASSESSEE PER HER APPLICATION BEFORE THE HONBLE SETTLEMENT COMMISSION. THIS ISSUE HAS NOT BEEN AGITATED BY THE APPELLANT BEFORE THE FIRST APPEL LATE AUTHORITY. WE HAVE, HOWEVER, VIDE PARA 31 OF THIS ORDER, CONSIDERING THE MATTER HOLISTICALLY, WHILE CONFIRMING THE ADDITION ON QUANTUM BEING ONLY VOLUNTARILY RETURNED BY THE ASSESSEE UNDER AFFIRMATION, OPINED FOR HER BEING ALLOWED CREDIT IN ITS RESP ECT IN THE FORM OF CASH, OF - COURSE SUBJECT TO THE SAID INCOME BEING NOT TOWARD ANY SPECIFIC INVESTMENT/EXPENDITURE. THE INCOME, FOR THE PURPOSE OF CASH, SHALL BE CONSIDERED AS ACCRUING FROM PROPORTIONATELY DURING THE YEAR. WE DECIDE ACCORDINGLY. 23 ITA NOS. 4163 - 4169/M/10 (A.YS. 2001 - 02 TO 2007 - 08) RHEEMA HASSAN ALI KHAN VS. DY. CIT 41. GROUN D 10 AND 11 STAND ALREADY DECIDED VIDE PARAS 14 AND 15 OF THIS ORDER RESPECTIVELY, DISPOSING GROUNDS 8 AND 9 RESPECTIVELY FOR A.Y. 2001 - 02, EVEN AS HELD IN THE SAID PARAS, TO WHICH REFERENCE IS DRAWN. GROUNDS 12 AND 13 ARE GENERAL IN NATURE, WARRANTING NO ADJUDICATION. WE DECIDE ACCORDINGLY. ASSTT. YEAR 2005 - 06 42. GROUNDS 1 AND 2 ARE COMMON TO THAT FOR A.Y. 2001 - 02 AND, ACCORDINGLY, STAND DISPOSED OF VIDE PARAS 3 AND 5 OF THIS ORDER RESPECTIVELY. PARAS 5 THROUGH 8 OF THE ASSESSMENT ORDER, WE MAY ADD, C ONTAIN DETAILED DISCUSSION ON THE PROVISION OF DUE AND ADEQUATE OPPORTUNITY TO THE ASSESSEE. GROUND 3 IS GENERAL IN NATURE, WARRANTING NO ADJUDICATION. GROUND 4 IS TOWARD THE ADDITION FOR RS.1,35,000/ - BEING ALLEGED REPAYMENT OF LOAN TO MUSLIM CO - OPERATIVE BANK. WE FIND THAT THE GROUND DOES NOT ARISE OUT OF THE IMPUGNED ORDER, BEING IN FACT NOT AGITATED BY THE ASSESSEE BEFORE THE LD. CIT(A). THE SAME IS, THEREFORE, NOT MAINTAINABLE BEFORE US. IN FACT, SIMILAR GROUND, TAKEN BEFORE THE TRIBUNAL IN THE CASE OF HAK, THE ASSESSEES HUSBAND, WAS DECIDED AGAINST THE ASSESSEE; IT FINDING NO MERIT IN THE ASSESSEES CASE. WE DECIDE ACCORDINGLY. THIS ALSO DECIDES GROUND 7 FOR A.Y. 2006 - 07. 43. GROUND # 5 IS IN RESPECT OF AN ADDITION FOR RS.12,77,000 TOWARDS CASH DEPO SITS IN HER BANK ACCOUNT WITH ABN AMRO BANK DURING THE YEAR. THE SAME GETS DECIDED VIDE PARAS 24 - 25 OF THIS ORDER, DECIDING GROUND 5 FOR A.Y. 2003 - 04; THE RESPECTIVE CASES OF THE PARTIES BEING THE SAME (REFER PARAS 12(I) AND 23 - 24 OF THE ASSESSMENT AND THE IMPUGNED ORDER RESPECTIVELY). 44. GROUND 6 IS IN RESPECT OF REPAYMENT OF CAR LOAN FOR RS.8,80,800/ - . THE SAME GETS DECIDED VIDE PARA S 22 - 23 OF THIS ORDER, DECIDING GROUND 4 FOR A.Y. 2003 - 04, THE RESPECTIVE CASE OF THE PARTIES BEING THE SAME (REFER PARAS 9 AND 18 - 20 OF THE ASSESSMENT AND THE IMPUGNED ORDER RESPECTIVELY). 45. GROUND # 7 IS IN RESPECT OF AN ADDITION OF RS.10 LACS TOWARDS REPAYMENT OF LOAN TO FAISAL ABBAS, THE ASSESSEES BROTHER. THE SAME GETS DECIDED VIDE PARA 36 OF THIS 24 ITA NOS. 4163 - 4169/M/10 (A.YS. 2001 - 02 TO 2007 - 08) RHEEMA HASSAN ALI KHAN VS. DY. CIT ORDER, DECIDING G ROUND 6 FOR A.Y. 2004 - 05 ; THE RESPECTIVE CASE OF THE PARTIES BEING THE SAME (REFER PARA 13 AND 17 OF THE ASSESSMENT AND THE IMPUGNED ORDER RESPECTIVELY). 46. GROUND # 8 IS TOWARDS UNEXPLAINED INVESTMENT IN PURCHASE OF HORSES FOR RS.5 LACS. THE SAME GETS DECIDED VIDE PARA 27 OF THIS ORDER, DECIDING GROUND 6 FOR A.Y. 2003 - 04, THE RESPECTIVE CASE OF THE PARTIES BEING THE SAME (REFER PARAS 14 AND 22 OF THE ASSESSMENT AND THE IMPUGNED ORDER RESPECTIVELY). 47. GROUND # 9: REFER PARA 31 OF THIS ORDER; THE AMOU NT UNDER REFERENCE BEING RS.3 LACS. 48. GROUND 10 AND 11 STAND ALREADY DECIDED VIDE PARAS 14 AND 15 OF THIS ORDER RESPECTIVELY, DISPOSING GROUNDS 8 AND 9 RESPECTIVELY FOR A.Y. 2001 - 02, EVEN AS HELD IN THE SAID PARAS, TO WHICH REFERENCE IS DRAWN. GROUNDS 12 AND 13 ARE GENERAL IN NATURE, WARRANTING NO ADJUDICATION. WE DECIDE ACCORDINGLY. ASSTT. YEAR 2006 - 07 49. GROUNDS 1 AND 2 ARE COMMON TO THAT FOR A.Y. 2001 - 02 AND, ACCORDINGLY, STAND DISPOSED OF VIDE PARAS 3 AND 5 OF THIS ORDER RESPECTIVELY. PARAS 5 THROUGH 8 OF THE ASSESSMENT ORDER, WE MAY ADD, CONTAIN DETAILED DISCUSSION ON THE PROVISION OF DUE AND ADEQUATE OPPORTUNITY TO THE ASSESSEE. GROUND 3 IS GENERAL IN NATURE, WARRANTING NO ADJUDICATION. GROUND 4 IS IN RESPECT OF AN ADDITION FOR RS.25,200/ - TO WARD CASH PAID TO TULIP CO - OPERATIVE HOUSING SOCIETY, PUNE, AS FOUND FROM THE CASH RECEIPT DATED 22.7.2005 ISSUED TO THE ASSESSEE BY THE SAID SOCIETY. THE SAME CAME TO BE ADDED AND CONFIRMED AS INCOME BY WAY OF UNEXPLAINED EXPENDITURE AS THE ASSESSEE COULD NOT, AS CLAIMED, EXHIBIT THE SAME BEING REFLECTED IN HER ACCOUNTS. NO IMPROVEMENT IN HER CASE STANDS MADE BEFORE US. THE ADDITION FOR LIVING AND LIFE STYLE EXPENSES HAS BEEN DELETED; THE SAME HAVING BEEN CONFIRMED IN THE HANDS OF HER HUSBAND , HAK. CLEARLY , IF ANY PART THEREOF STANDS DEBITED TO HER CAPITAL ACCOUNT AS DRAWINGS, AS CLAIMED, SO THAT CASH TO THAT EXTENT GETS APPLIED FOR PERSONAL PURPOSES, NO ADDITION COULD OBTAIN. 25 ITA NOS. 4163 - 4169/M/10 (A.YS. 2001 - 02 TO 2007 - 08) RHEEMA HASSAN ALI KHAN VS. DY. CIT THE MATTER ESSENTIALLY BOILS DOWN TO THE AVAILABILITY OF CASH IN BOOKS ON THE REL EVANT DATE/S. THE ASSESSEE ALSO CLAIMS BENEFIT OF TELESCOPING, QUA WHICH WE HAVE RESTORED THE MATTER BACK TO THE FILE OF A.O. WE DECIDE LIKE - WISE. THE ONUS TO ESTABLISH HER CLAIM/S WOULD BE ON THE ASSESSEE, WHO MAY FILE CASH FLOW STATEMENTS ON THE BASIS OF CONFIRMED INCOMES/EXPENDITURE, AVAILING BENEFIT OF CASH (ALSO REFER PARAS 25, 31 AND 36 OF THIS ORDER). WE DECIDE ACCORDINGLY. 50. GROUND 5 IS IN RESPECT OF REPAYMENT OF CAR LOAN FOR RS. 9,87,060/ - . THE SAME GETS DECIDED VIDE PARA S 22 - 23 OF THIS ORDER, DECIDING GROUND 4 FOR A.Y. 2003 - 04; THE RESPECTIVE CASE OF THE PARTIES BEING THE SAME (REFER PARAS 11(II) AND 14 - 15 OF THE ASSESSMENT AND THE IMPUGNED ORDER RESPECTIVELY). 51. GROUND # 6 IS IN RESPECT OF AN ADDITION FOR RS.26,49,900/ - TOWARDS CASH DEPOSI TS IN HER BANK ACCOUNT WITH ABN AMRO BANK DURING THE YEAR. THE SAME GETS DECIDED VIDE PARAS 24 - 25 OF THIS ORDER, DECIDING GROUND 5 FOR A.Y. 2003 - 04; THE RESPECTIVE CASES OF THE PARTIES BEING THE SAME (REFER PARAS 1 2 AND 16 - 17 OF THE ASSESSMENT AND THE IMPU GNED ORDER RESPECTIVELY). 52. GROUND # 7 FOR A.Y. 2006 - 07 IS ON ACCOUNT OF REPAYMENT OF LOAN TO MUSLIM CO - OPERATIVE BANK. THE REPAYMENT IS ADMITTED, SO THAT THE QUESTION IS OF ESTABLISHING THE SOURCE OF REPAYMENT, WHICH IS CLAIMED TO BE OUT OF HER HORSE RACING INCOME, WHICH WAS NOT DISCLOSED TO THE REVENUE, AS ADMITTED VIDE HIS STATEMENT ON OATH DATED 26.4.2007 BY HAK. THE ASSESSEE HAS, HOWEVER, RETURNED AN INCOME OF RS.48.56 LACS FOR THE CURRENT YEAR, COMPRISING HORSE RACING INCOME IN THE MAIN. THE ISSUE ACCORDINGLY BOILS DOWN TO THE AVAILABILITY OF CASH; THE ASSESSEE ALSO CLAIMING TELESCOPING BENEFIT. THE MATTER, ACCORDINGLY, AS IN THE CASE OF HAK, IS R ESTORED TO THE FILE OF THE ASSESSING OFFICER (A.O.) TO COMPUTE THE QUANTUM OF THE TWO ADDITIONS ON THE BASIS OF THE SHORT FALL IN THE AVAILABILITY OF CASH, WHICH ACCORDINGLY HAS TO BE WORKED OUT WITH REFERENCE TO DIFFERENT DATES. THE UTILISATION OF CASH FOR HOUSEHOLD/PERSONAL PURPOSES IS TO BE TAKEN ON A UNIFORM BASIS OVER THE YEAR, WHILE 26 ITA NOS. 4163 - 4169/M/10 (A.YS. 2001 - 02 TO 2007 - 08) RHEEMA HASSAN ALI KHAN VS. DY. CIT THAT TOWARD INCOME - TAX PAID, ON THE DEFINITE DATES. SIMILARLY, THE BUSINESS INCOME (FROM HORSE RACING) WOULD BE TAKEN PROPORTIONATELY DURING THE YEAR, AT (SAY) EACH MONTH - END. THE ASSESSEE SHALL FURNISH THE RELEVANT DATA. 53. GROUND # 8 IS IN RESPECT OF THE CLAIM FOR SET OFF OF LOSS FOR RS.1,94,854/ - AGAINST THE RETURNED INCOME. THE SAME GETS DECIDED VIDE PARAS 19 - 20 OF THIS ORDER, DECIDING GROUND 5 FOR A.Y. 2003 - 04; THE RESPECTIVE CASES OF THE PARTIES BEING THE SAME (REFER PARA 14 AND 27 - 28 OF THE ASSESSMENT AND THE IMPUG NED ORDER RESPECTIVELY). 54. GROUND # 9 IS IN RESPECT OF REPAYMENT OF LOAN TO FAISAL ABBAS IN THE SUM OF RS.45 LACS (WRONGLY WRITTEN AS RS.15,00,000 IN THE GD.) . THE SAME GETS DECIDED VIDE PARAS 35 - 36 OF THIS ORDER, DECIDING GROUND 6 FOR A.Y. 2004 - 05, THE RESPECTIVE CASE OF THE PARTIES BEING THE SAME (REFER PARAS 15 AND 24 - 25 OF THE ASSESSMENT AND THE IMPUGNED ORDER RESPECTIVELY). 55. GROUND # 10 IS IN RESPECT OF INVESTMENT IN HORSES OF RS.2 LACS. THE SAME GETS DECIDED VIDE PARA 27 OF THIS ORDER, DECI DING G ROUND 6 FOR A.Y. 2003 - 04, THE RESPECTIVE CASE OF THE PARTIES BEING THE SAME (REFER PARAS 15 AND 25 - 26 OF THE ASSESSMENT AND THE IMPUGNED ORDER RESPECTIVELY). 56. GROUND # 11: REFER PARA 31 OF THIS ORDER; THE AMOUNT UNDER REFERENCE BEING RS.6 LACS. 57. GROUNDS 12 AND 13 STAND ALREADY DECIDED VIDE PARAS 14 AND 15 OF THIS ORDER RESPECTIVELY, DISPOSING GROUNDS 8 AND 9 RESPECTIVELY FOR A.Y. 2001 - 02, EVEN AS HELD IN THE SAID PARAS, TO WHICH REFERENCE IS DRAWN. GROUNDS 14 AND 15 ARE GENERAL IN NATURE, WAR RANTING NO ADJUDICATION. WE DECIDE ACCORDINGLY. ASSTT. YEAR 2007 - 08 58. GROUNDS 1 AND 2 ARE COMMON TO THAT FOR A.Y. 2001 - 02 AND, ACCORDINGLY, STAND DISPOSED OF VIDE PARAS 3 AND 5 OF THIS ORDER RESPECTIVELY. PARAS 5 THROUGH 8 OF THE 27 ITA NOS. 4163 - 4169/M/10 (A.YS. 2001 - 02 TO 2007 - 08) RHEEMA HASSAN ALI KHAN VS. DY. CIT ASSESSMENT ORDER, WE MAY ADD, CONTAIN DETAILED DISCUSSION ON THE PROVISION OF DUE AND ADEQUATE OPPORTUNITY TO THE ASSESSEE. GROUND 3 IS GENERAL IN NATURE, WARRANTING NO ADJUDICATION. GROUND 4 IS TOWARD UNEXPLAINED EXPENDITURE OF RS.12,400/ - FOUND AND INCURRED ON THE BASIS OF THE ASSESSEES CREDIT CASH STATEMENT (OF ICICI BANK) DATED 09.6.2006. THE CASE OF PARTIES IS THE SAME AS FOR GROUND 4 OF A.Y. 2006 - 07 (REFER PARA 49 OF THIS ORDER). WE, ACCORDINGLY, FOR THE REASON STATED THEREIN, DECIDE LIKEWISE. 59. GROUND # 5 IS IN RES PECT OF ADDITION FOR RS.7.50 LACS QUA FOREIGN TRAVEL. THE SAME REPRESENTS COST OF TRAVEL OF THREE PERSONS, I.E., THE ASSESSEE, HER MOTHER (NASREEN ABBAS) AND ONE NEDA SALEEM HAJI TO MIDDLESEX, LONDON, ON 26.9.2006 AND BACK ON THE BASIS OF THE MATERIAL FOUN D DURING SEARCH (PAGES 9 - 13 OF BUNDLE 2 OF ANNEXURE A DATED 05.1.2007 TO PUNCHANAMA DATED 06.1.2007, CONTAINING 55 PAGES, BEING RELATED TO CARRIAGE OF THE PERSONAL EFFECTS OF THESE PERSONS FROM MIDDLESEX. THE COST OF ONE WAY TRAVEL (BUSINESS CLASS) WAS FO UND TO BE RS.1,25,000/ - , SO THAT THE TWO - WAY TRAVEL WOULD COST RS.2.5 LACS EACH. THE ASSESSEE BEING UNABLE TO, DESPITE REPEATED OPPORTUNITY, EXHIBIT THE SOURCE, STATED TO BE DRAWINGS, THE SAME WAS DEEMED AS INCOME BY WAY OF UNEXPLAINED EXPENDITURE. IN APPE AL, THE ASSESSEE CLAIMED TO HAVE TRAVELLED ECONOMIC CLASS, PAID FOR IN CASH, ALSO CLAIMING THAT SHE HAD NOT PAID FOR THE TICKET OF NASREEN ABBAS AND NEDA ABBAS. NO EVIDENCE IN RESPECT OF THE CLAIM BEING LED, THE ADDITION WAS CONFIRMED (REFER PARAS 9.1 AND 18 - 19 OF THE ASSESSMENT AND THE IMPUGNED ORDER RESPECTIVELY). AGGRIEVED, THE ASSESSEE IS IN SECOND APPEAL. 60. WE HAVE HEARD THE PARTY BEFORE US AND PERUSED THE MATERIAL ON RECORD. THE FACT OF TRAVEL TO LONDON AND BACK BY THE NAMED LADIES, TOGETHER, WITH THE TICKET BEING PAID FOR IN CASH, IS ADMITTED. APART FROM THE ASSESSEE, THE OTHER, I.E., NASREEN ABBAS AND NEDA SALEEM HAJI, ARE HER MOTHER AND SIST ER - IN - L AW (SISTER OF HER HUSBAND - HAK). THERE IS NO CONTENTION BY THE ASSESSEES MOTHER AND SISTER - IN - LAW, MUCH LESS, EVIDENCE, OF THE COST OF THEIR TRAVEL BEING BORNE BY THEM. THERE IS ALSO NO AVERMENT WITH REGARD TO THEIR INCOME, OR ITS SOURCE, SO THAT THEY ARE INFERABLY NOT ASSESSEE ON THE RECORDS OF THE DEPARTMENT, AS IN FACT CONFIRMED BY THE A.O. IN RESPE CT OF NASREEN 28 ITA NOS. 4163 - 4169/M/10 (A.YS. 2001 - 02 TO 2007 - 08) RHEEMA HASSAN ALI KHAN VS. DY. CIT ABBAS (REFER PARA 61 OF THIS ORDER). UNDER THE CIRCUMSTANCES, IT IS ONLY REASONABLE FOR THE REVENUE TO PRESUME THAT THE COST OF TRAVEL STANDS BORNE BY THE ASSESSEE, FROM WHOSE RESIDENCE THE MATERIAL IN RELATION TO THE UNDERTAKING OF THE JOINT TRAVEL WAS FOUND DURING SEARCH. AGAIN, THERE IS NO EVIDENCE OF THE SAID EXPENDITURE, TO ANY EXTENT, HAVING BEEN ACCOUNTED FOR, OR OTHERWISE MET THROUGH DRAWINGS BOOKED IN ACCOUNTS, EVEN AS THE TICKETS ARE BOOKED FROM KOLKATA (THROUGH M/S. TRAVEL HUB), THE REGULAR TRAVEL AGENTS FOR HAK AND KT. THE INFERENCE AS TO TRAVEL BY BUSINESS CLASS, HOWEVER, IS PRESUMPTUOUS. TRUE, IT MAY BE, RATHER, IS MORE LIKELY TO BE THE CASE GIVEN THE INCOME LEVEL OF THE ASSESSEE AT RS.58.14 LACS FOR THE CURRENT YEAR, AND HER HUSBAND, AS WELL AS MORE SO CONSIDERING THERE OSTENTATION LIFE STYLE, THAT THE TRAVEL WAS BY BUSINESS CLASS. HOWEVER, IN THE ABSENCE OF ANY MATERIAL TO SUPPORT THE SAME, IT MAY NOT BE CORRECT TO PRESUME THE SAME. THE COST OF FOREIGN TRAVEL IS, ACCORDINGLY, CONFIRMED FOR ECONOMY CLASS TRAVEL FROM MUMBAI TO LONDON AND BACK. THE ASSESSEE GETS PART RELIEF. WE DECIDE ACCORDINGLY. 61. GROUND # 6 IS AGAIN TOWARD COST OF FOREIGN TRAVEL (RS.8 LACS) AND COST OF STAY ABROAD (RS.2 LACS) (REFER PARAS 10(II) AND 20 - 21 O F THE ASSESSMENT AND THE IMPUGNED ORDER RESPECTIVELY). THE TRAVEL ABROAD, WHICH IS, CLEARLY, MULTIPLE TIMES, IS TO SWITZERLAND, CANADA AND UK AND THUS THAT OF STAY ABROAD, GATHERED FROM THE ASSESSEES PASSPORT (NO. F - 1152213 DATED 03.12.2004 FROM PUNE) IS NOT DENIED. THE COST OF TRAVEL, WHICH IS THE SAME AS THAT ADOPTED IN THE CASE OF HAK, WHO ALSO TRAVELLED SEVERAL TIMES TO THESE DESTINATIONS DURING THE RELEVANT YEAR (THOUGH THE DATES OF THE TRAVEL ARE FOR MOST PART NOT IN AGREEMENT) IS, AS IN THAT CASE, N OT DISPUTED. THE ASSESSEES CONTENTION OF HAVING NOT INCURRED TRAVELLING EXPENDITURE AS SHE WAS TRAVELLING WITH HER HUSBAND, CANNOT BE COUNTENANCED. IN FACT, HAK CONTENDS (IN HIS ASSESSMENT), AGAIN, WITHOUT BASIS, OF KT INCURRING THE TRAVEL EXPENDITURE, AN D WHICH THEREFORE HAS NOT BEEN ACCEPTED BY US (REFER PARAAS 124 - 125 OF THE TRIBUNALS ORDER IN HAK (SUPRA). WE, THEREFORE, FOR THE SAME REASONS AS INFORMED THE SAID DECISION, AS WELL AS QUA THE ADDITION FOR RS.7.50 LACS ON FOREIGN TRAVEL, THE SUBJECT MATTE R OF 29 ITA NOS. 4163 - 4169/M/10 (A.YS. 2001 - 02 TO 2007 - 08) RHEEMA HASSAN ALI KHAN VS. DY. CIT GROUND 5 OF THE INSTANT APPEAL, CONFIRM THE ASSESSMENT OF THE IMPUGNED SUM AS DEEMED INCOME U/S. 69C OF THE ACT. 62. GROUND # 7 IS IN RESPECT OF AN ADDITION FOR RS. 1,30,000/ - TOWARDS CASH DEPOSITS IN HER BANK ACCOUNT WITH ABN AMRO BANK DURING THE Y EAR. THE SAME GETS DECIDED VIDE PARAS 24 - 25 OF THIS ORDER, DECIDING GROUND 5 FOR A.Y. 2003 - 04; THE RESPECTIVE CASES OF THE PARTIES BEING THE SAME (REFER PARAS 11(I) AND 22 - 23 OF THE ASSESSMENT AND THE IMPUGNED ORDER RESPECTIVELY). 63. GROUND # 8 IS IN RE SPECT OF ADDITION FOR RS.133 LAC TOWARDS UNEXPLAINED INVESTMENT IN HOUSE PROPERTY/S AT PUNE. THE ASSESSEE WAS FOUND TO OWN THE FOLLOWING PROPERTIES, WHICH ALONG WITH THE STATED CONSIDERATION (VIDE DIFFERENT AGREEMENTS DATED 04.11.2006), ARE AS UNDER: SR. NO. FLATS OWNER RECORDED CONSIDERATION (IN RS.) SOURCES 1 FLAT AT PUNE, TULIP, 1 ST FLOOR, NO. 01 AND 102 RHEEMA KHAN 25,00,000 AND 30,00,000 GIFTED/TENANTED FLAT CONVERTED INTO OWNERSHIP FLAT 2 FLAT AT PUNE, TULIP, 2 ND FLOOR, NO. 201 AND 202 RHEEMA KHAN 24,00,000 EACH OWN FUNDS AND BORROWED FUNDS FROM DIFFERENT PEOPLE THROUGH FRIENDS AND RELATIVES AND TRUSTED PEOPLE AGAINST SECURITY OF PROPERTIES/MORTGAGE OF PROPERTIES 3 FLAT AT PUNE 1, TULIP, GR. FLOOR, MOTHER GIFTED RECEIVED IN LIEU OF TENANCY RIGHT TOTAL RS.1,03,00,000 THE ASSESSEE EXPLAIN ED THE SOURCE OF ACQUISITION AS BY WAY OF GIFT FROM HER MOTHER NASREEN ABBAS, AS PERMANENT ALTERNATE ACCOMMODATION IN VIEW OF SURRENDER OF TENANCY RIGHTS, AS WELL AS THROUGH LOANS , RAISED AT RS.100 LACS , TO FIN ANCE THE 30 ITA NOS. 4163 - 4169/M/10 (A.YS. 2001 - 02 TO 2007 - 08) RHEEMA HASSAN ALI KHAN VS. DY. CIT PURCHASE CONSIDERATION (RS.103 LACS) . NO EVIDENCE IN SUPPORT BEING FURNISHED DESPITE SUFFICIENT OPPORTUNITY, THE ENTIRE AMOUNT OF RS.133 LACS CAME TO BE ASSESSED AS INCOME BY WAY OF UNEXPLAINED INVESTMENT THEREIN. IN APPEAL, THE ASSESSEE FILED LOA N CONFIRMATIONS FROM AS MANY AS 37 PERSONS, FURTHER STATING THAT THE TOTAL PAYMENT, MADE FROM HER ABN AMBRO BANK ACCOUNT, WAS FOR RS.1,27,01,095/ - , AND NOT RS.133 LACS AS STATED BY A.O. THE LOAN AMOUNTS, THOUGH STATED TO BE RECEIVED BY CHEQUE, WERE NOT FOU ND BY THE LD. CIT(A) ON THE PERUSAL OF THE COPY OF THE BANK BOOK SUBMITTED. THERE WAS ALSO NO MENTION OF THE INTEREST RATE/S AT WHICH THE LOANS WERE RAISED. TH E AGREEMENTS WITH THE D EVELOPER SHOWED THEM TO BE BETWEEN THE ASSESSEE AND THE BUILD ER DIRECTLY, SO THAT IT WAS NOT A CASE OF GIFT/S. THE ASSESSEES ENTIRE CASE WAS CONSIDERED BY HIM AS AN AFTER - THOUGHT, TO SOMEHOW EXPLAIN THE TRANSACTION (REFER PARAS 11(II) AND PARAS 24 - 26 OF THE ASSESSMENT AND THE IMPUGNED ORDER RESPECTIVELY). THE ADDI TION BEING CON FIRMED THUS, THE ASSESSEE IS IN SECOND APPEAL. 64. WE HAVE HEARD THE PARTY BEFORE US AND PERUSED THE MATERIAL ON RECORD, EXAMIN ING THE ASSESSEES EXPLANATION TOWARD THE NATURE AND SOURCE OF THE ACQUISITION OF THE PROPERTY, BEING FLATS AT THE GROUND, FIRST AND SECOND FLOOR OF A BUILDING AT PUNE. WHILE THE NATURE OF THE ACQUISITION I S OWNERSHIP, DULY EVIDENCED BY A GREEMENTS, THE STATED SOURCE IS BY WAY OF GIFT AND LOANS. THE REVENUE HAS, IN VIEW OF THE AGREEMENTS, WHICH ARE DIRECTLY BETWEEN THE ASSESSEE AND THE BUILDER (M/S. AHURA BUILDERS) , REGARDED IT AS A CASE OF PURCHASE. THE INVESTMENT IN THE GROUND FLOOR HAS ACCORDINGLY BEEN VALUED BY IT AT RS.30 LACS, MAKING A TOTAL ADDITION FOR RS.133 LACS. OUR FIRST OBSERVATION IN THE MATTER IS THAT WHILE THE ASSESS EE STATES OF HAVING PAID RS.127.01 LACS TOWARD THE PURCHASE PRICE, THE STATED CONSIDERATION AS PER THE AGREEMENTS, AS TAKEN INTO ACCOUNT BY THE A.O. ( NOTED AT PARA 11(II) OF THE ASSESSMENT ORDER ), IS AT RS.103 LACS. HOW COULD THAT BE, WITH, RATHER, THE ASS ESSEE BEING AGGRIEVED FOR A HIGHER SUM THAN THAT PAID, BEING DEEMED AS INCOME, EVEN AS THE TWO SUMS ARE NOT COMPARABLE AS THE ASSESSED INCOME INCLUDES RS.30 LACS BY WAY OF VALUE OF GROUND FLOOR QUA WHICH THE STATED CONSIDERATION IS NIL. OUR SECOND OBSERV ATION IN THE MATTER IS THE ABSENCE OF ANY FINDING BY THE A.O., OR EVEN THE LD. CIT(A), AS REGARDS THE SOURCE 31 ITA NOS. 4163 - 4169/M/10 (A.YS. 2001 - 02 TO 2007 - 08) RHEEMA HASSAN ALI KHAN VS. DY. CIT OF RS.3 LACS, I.E., THE EXCESS OF THE STATED CONSIDERATION OVER THE LOAN AMOUNT. THE SAID EXCESS WOULD IN FACT, IN VIEW OF THE ADMITTED PAYMENT, TR ANSLATE INTO A SUM OF RS.27.01 LACS (RS.127.01 LACS RS.100 LACS). AS REGARDS LOANS, WHO ARE THE CREDITORS? HOW DOES THE ASSESSEE KNOW THEM, FOR THEM TO HAVE T RUSTED THE ASSESSEE WITH THEIR HARD EARNED MONEY , EVEN AS MUCH AS NOT STIPULATING OR CHARGING A NY INTEREST? IN THE ABSENCE OF THE IDENTITY BEING PROVED, WHICH COULD ONLY BE ON THE BASIS OF SOME DEFINITE PROOF AS TO IDENTITY, WHICH IS ABSENT, THESE ARE NO MORE THAN MERE NAMES. WHY, A COPY THEIR BANK ACCOUNT/S, THE AMOUNTS BEING CLAIMED TO BE TRANSFER RED THROUGH CHEQUE/S, WOULD BE THE MOST DIRECT PROOF OF IDENTITY, BESIDES ESTABLISHING THE MODE OF RECEIPT. THESE EVIDENCE S COULD IN FACT BE EASILY COLLECTED, EVEN IF THE LOANS WERE RAISED THROUGH THE AGENCY OF THE MONEY BROKER/S, TOWARD WHICH , AGAIN, THER E IS NO CLAIM OR EVIDENCE, WITH THE LOANS BEING IN FACT WITHOUT ANY INTEREST OBLIGATION, WHICH IS ITSELF QUIZZICAL. THOUGH CLAIMED TO BE SECURED BY WAY OF MORTGAGE, NO EVIDENCE TO WARD THE SAME HAS BEEN PRODUCED AT ANY STAGE, SO THAT THE LOANS, BEING NOT BA CKED BY ANY SECURITY, ARE WHOLLY UNSECURED . THERE IS FURTHER NO CLAIM AS TO REPAYMENT, MUCH LESS EVIDENCE TOWARD THE SAME. CLEARLY, THE EXERCISE IS TO SOMEHOW JUSTIFY THE PAYMENT OF THE RECORDED CONSIDERATION, TO WHICH EXTENT THE ADDITION HAS BEEN RESTRICT ED BY THE REVENUE, CONJURING UP LOANS, TOWARD WHICH THERE IS NO RELIABLE EVIDENCE. THE SAME ACCORDINGLY REMAIN UNPROVED ON ALL THE THREE PARAMETERS, VIZ. IDENTITY AND CAPACITY OF THE CREDITOR AND THE GENUINENESS OF THE TRANSACTION. THE INVESTMENT IN FLATS IS ACCORDINGLY UNPROVED AS TO ITS SOURCE TO THE EXTENT OF RS.100 LACS, I.E., AS STATED TO BE SOURCED BY WAY OF AND ATTRIBUTED TO LOANS. IN FACT, SIMILARLY, LOANS (FOR RS.100 LACS) ARE ALSO CLAIMED IN THE CASE OF ASSESSEES HUS BAND (HAK) AS WELL, AND WHICH WERE AGAIN FOUND AS COMPLETELY UNPROVED , AND TOWARD WHICH REFERENCE MAY BE MADE TO PARAS 122, 123 OF THE SAID ORDER (SUPRA). ADDITION FOR THE LOAN AMOUNT OF THE INVESTMENT (RS.100 LACS) IS ACCORDINGLY CONFIRMED. FOR THE BALANCE INVESTMENT, FOR WHICH THE R EVENUE HAS ADOPTED THE STATED CONSIDERATION, WHICH WOULD INCLUDE STAMP DUTY AND REGISTRATION CHARGES, IF ANY , AS 32 ITA NOS. 4163 - 4169/M/10 (A.YS. 2001 - 02 TO 2007 - 08) RHEEMA HASSAN ALI KHAN VS. DY. CIT WELL, WE CONSIDER THE MATTER AS FACTUALLY INDETERMINATE. THIS SHALL ALSO INCLUDE THE NATURE AND SOURCE OF THE INVESTMENT IN THE GROUND FLOOR. T HE MATTER, ACCORDINGLY, IS RESTORED BACK TO THE FILE OF THE A.O. FOR FRESH ADJUDICATION AFTER HEARING THE ASSESSEE AND ISSUING DEFINITE FINDINGS OF FACT, IN ACCORDANCE WITH LAW. WE DECIDE ACCORDINGLY. 65. GROUND # 9 IS TOWARD UNEXPLAINED EXPENDITURE, AT RS.3,750/ - , INCURRED BY THE ASSESSEE, BEING IN RESPECT OF PAYMENT DUE ON HER CREDIT CARD (PAGES 19 AND 20 OF BUNDLE 4 OF ANNEXURE 5 DATED 05.1.2007 (SUPRA)). THE SAME WAS ADDED AND CONFIRMED FOR WANT OF CORRELATION OF THE WITHDRAWAL FOR THE SAID AMOUNT. B OTH THE EXPLANATION AS WELL AS ITS PAYMENT IN CASH IS ADMITTED. IF THE ASSESSEES ACCOUNTS SHE HAVING HORSE RACING INCOME FOR THE CURRENT AND THE PRECEDING YEAR, REFLECT GENERATION OF CASH, DULY WITHDRAWN (THROUGH HER CAPITAL ACCOUNT), WE SEE NO REAS ON TO CONSIDER THE SAME AS UNEXPLAINED, HAVING IN FACT ALREADY DELETED THE ADDITION TOWARD HOUSE HOLD EXPENDITURE, SO THAT THE CASH WITHDRAWN (IN ACCOUNTS) TOWARD THE SAME, WOULD ALSO BE AVAILABLE FOR PERSONAL PURPOSES. WE, ACCORDINGLY, AND PARTICULARLY CO NSIDERING THE NOMINALITY OF THE AMOUNT, DELETE THE ADDITION. 66. GROUND # 10 IS IN RESPECT OF AN ADDITION FOR RS.41,800/ - BEING TOWARDS REPAYMENT OF CAR LOAN. THE SAME GETS DECIDED VIDE PARA S 22 - 23 OF THIS ORDER, DECIDING GROUND 4 FOR A.Y. 2003 - 04, THE RE SPECTIVE CASE OF THE PARTIES BEING THE SAME (REFER PARAS 12(II) AND 29 - 30 OF THE ASSESSMENT AND THE IMPUGNED ORDER RESPECTIVELY). 67. GROUND # 11 IS TOWARD UNEXPLAINED INVESTMENT IN FURNITURE, AT RS.10 LACS. THE ASSESSEE ADMITTEDLY BOUGHT FURNITURE FOR H ER PUNE RESIDENCE DURING THE YEAR, ENTERING INTO AGREEMENT DATED 17.10.2006 WITH M/S. ELPRO INTERNATIONAL LTD., EVEN AS ADMITTED BY HAK VIDE HIS STATEMENT U/S. 131 OF THE ACT DATED 19.12.2007. THE PAYMENT, MADE BY CHEQUE, IS STATED AS SOURCED FROM FRIENDS, WAS FOUND NOT PROVED BY THE A.O. AGGRIEVED, THE ASSESSEE IS IN SECOND APPEAL. 68. WE HAVE HEARD THE PARTY BEFORE US AND PERUSED THE MATERIAL ON RECORD. 33 ITA NOS. 4163 - 4169/M/10 (A.YS. 2001 - 02 TO 2007 - 08) RHEEMA HASSAN ALI KHAN VS. DY. CIT BEFORE THE LD. CIT(A), THE ASSESSEE CHANGING TACK, CLAIMED THAT M/S. ELPRO INTERNATIONAL LTD. WAIVED PAYMENT, SO THAT NO PAYMENT WAS MADE THERETO. THE ASSESSEES CLAIMS ARE FANCIFUL, BORDERING ON THE LUDICROUS. WHEN SHE COULD NOT PROVE THE SOURCE OF THE ADMITTED PAYMENT, STATED TO BE FUNDS RAISED FROM FRIENDS, SHE STATES OF THE PAYMENT ITSELF HAVING BEEN WAIVED, WITHOUT OF - COURSE SHOWING WHAT LED TO THE EARLIER CLAIM AND, TWO, ADDUCING EVIDENCE TOWARD THE CHANGED POSITION, WITH EVEN AS MUCH AS THE CONFIRMATION FROM M/S. ELPRO INTERNATIONAL LTD. BEING NOT FILED. THE ASSESSEES CASE STANDS RIGHTLY DISMISSED BY THE LD. CIT(A). WE DECIDE ACCORDINGLY. 69. GROUND # 12 IS TOWARD THE DENIAL OF THE CLAIM OF LOSS FOR RS.2,21,282/ - SET OFF AGAINST THE RETURNED INCOME. THE SAME GETS DECIDED VIDE PARAS 19 - 20 OF THIS ORDER. 70. GROUND # 13: REFER PARA 31 OF THIS ORDER ; THE AMOUNT UNDER REFERENCE BEING RS.8 LACS. 71. GROUNDS 14 AND 15 STAND ALREADY DECIDED VIDE PARAS 14 AND 15 OF THIS ORDER RESPECTIVELY, DISPOSING GROUNDS 11 AND 12 RESPECTIVELY FOR A.Y. 2001 - 02, EVEN AS HELD IN THE SAID PARAS, TO WHICH REFERENCE IS DR AWN. GROUNDS 16 AND 17 ARE GENERAL IN NATURE, WARRANTING NO ADJUDICATION. WE DECIDE ACCORDINGLY. 7 2 . WRITTEN SUBMISSIONS, ALLOWED TO BE FILED FOR THE YEARS (APPEALS) FOR WHICH AUTHORISATION IS ON RECORD, WERE FILED ON 22.2.2016, WHICH BEAR REFERENCE TO THIS APPEAL (NUMBER) AS WELL. THE SAME STAND THOUGH PERUSED, TO FIND NO REF ERENCE TO THE MATTER/S IN ISSUE, SAVE GROUND # 7 FOR A.Y. 2001 - 02, BEING IN RELATION TO THE ASSESSEES FOREIGN BANK ACCOUNT AT DUBAI. THE ASSESSEE CLAIMS THE REVENUES ACTION IN FRA MING THE ASSESSMENT AS BEING PREMATURE AND, IN ANY CASE, BAD IN LAW IN - AS - MUCH AS THE PROCEEDINGS UNDER T HE PREVENTION OF MONEY LAUNDERING ACT, 2002 (PMLA), ARE NOT FINALIZED , AND SHALL EVEN OTHERWISE PREVAIL. THERE IS F IRSTLY NO EVIDENCE OF THE PROCEEDING S UNDER THE SAID ACT ON THE ASSESSEE , ON RECORD . TWO, THE SAID ARGUMENT, ALSO ASSUMED IN THE CASE OF HAK (SUPRA), STANDS CONSIDERED BY US AT PARAS 11.2, 12 34 ITA NOS. 4163 - 4169/M/10 (A.YS. 2001 - 02 TO 2007 - 08) RHEEMA HASSAN ALI KHAN VS. DY. CIT AND 128 OF THE TRIBUNALS ORDER IN HIS CASE FOR THE RELEVANT YEARS, TO FIND IT AS WITHOUT MERIT AND WHICH SHALL EQUALLY APPLY IN THE PRESENT CASE. ACCORDINGLY, THE PLEA FAILS. 7 3 . IN THE RESULT, THE ASSESSEES APPEALS ARE PARTLY ALLOWED AND PARTLY ALLOWED FOR STATISTICAL PURPOSES, EXCEPT FOR A.Y. 2003 - 04, FOR WHICH IT IS PARTLY ALLOWED FOR STAT ISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON FEBRUARY 29 , 2016 SD/ - SD/ - (D. MANMOHAN) (SANJAY ARORA) / VICE PRESIDENT / ACC OUNTANT MEMBER MUMBAI ; DATED : 29 .0 2 .2016 . . ./ ROSHANI , SR. PS , NEELAM, PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI