Jagannath Eknath Lahoti (HUF), Pune V. ITO, Wd 1(1), Pune, Pune

ITA 453/PUN/2012

• Counselvise Citation: 45324514 RSA 2012
• Duration Of Justice: 1 year(s) 11 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 12-11-2013
• Assessment Year: 2000-2001
• Appeal Filed On: 05-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S P WALIMBE
• Assessee Lawyers: SUNIL PATHAK
• Keywords: Unexplained investment; Search and seizure; Loose papers; Document seized; Principle of natural justice; Opportunity of cross examination; Documents seized
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI R.S. PADVEKAR, JUDICIAL MEMBER, AND SHRI R.K. PANDA, ACCOUNTANT MEMBER. ITA.NO.453/PN/2012 (ASSESSMENT YEAR 2000-01) JAGANNATH EKNATH LAHOTI (HUF), 1189, KASBA PETH, PUNE 411011 PAN NO.AAAHL6037Q .. APPELLANT VS. ITO, WARD-1(1), PUNE .. RESPONDENT ASSESSEE BY : SHRI SUNIL PATHAK REVENUE BY : SHRI S.P. WALIMBE DATE OF HEARING : 03-02-2014 DATE OF PRONOUNCEMENT : 11-02-2014 ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER DATED 01-09-2011 OF THE CIT(A)-I, PUNE RELATING TO ASSESS MENT YEAR 2000-01. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS AN HUF AND DERIVES INCOME FROM MONEY LENDING. THE ASSESSING OFFICER I SSUED NOTICE U/S.148 TO THE ASSESSEE ON THE BASIS OF A SEARCH OPERATION IN THE CASE OF SHRI SHRIRAM H. SONI DURING WHICH CERTAIN PAPERS WERE IMPOUNDED IN WHICH THE NAME OF THE ASSESSEE WAS APPEARING ACCORDING TO WHICH THE A SSESSEE HAS INVESTED AT LEAST AN AMOUNT OF RS.15 LAKHS IN MONEY LENDING AS ON 31-03-2000. THE ASSESSEE REPLIED THAT THE ORIGINAL RETURN FILED ON 13-03-2001 VIDE ACKNOWLEDGEMENT NO.1217 MAY BE TREATED AS RETURN FI LED IN RESPONSE TO NOTICE U/S.148 UNDER PROTEST. THEREAFTER, THE ASSE SSING OFFICER SUPPLIED THE REASONS RECORDED FOR ISSUE OF NOTICE U/S.148 TO WHI CH THE ASSESSEE OBJECTED. 2 AFTER DISPOSING OF THE OBJECTIONS THE ASSESSING OFF ICER PROCEEDED TO COMPLETE THE ASSESSMENT. 2.1 THE ASSESSING OFFICER NOTED THAT DURING THE COU RSE OF THE SEARCH OPERATION U/S.132 IN THE CASE OF SHRI SHRIRAM H. SO NI ON 29.07.2003, A LARGE NUMBER OF SEIZED DOCUMENTS, BOOKS OF ACCOUNTS HAVE BEEN SEIZED, RELATING TO THE FINANCE / FINANCE BROKERAGE BUSINESS OF SHRI SONI. SHRI SONI IS ENGAGED IN FINANCE BROKING AND ALSO MONEY LENDING. APART FROM THE REGULAR TRANSACTIONS, RELATING TO THE FINANCE BROKERAGE, IN CRIMINATING DOCUMENTS RELATING TO THE ADVANCE OF CASH LOANS RUNNING INTO SEVERAL CRORES OF RUPEES, HAVE BEEN FOUND AND SEIZED. THESE DOCUMENTS ARE MOS TLY IN THE FORM OF BLANK PROMISSORY NOTES (DULY SIGNED BY THE BORROWER S) AND BLANK UNDATED CHEQUES DULY SIGNED BY THE BORROWERS (WITH AMOUNTS OF LOAN MENTIONED). BESIDES, THE ENTRIES IN THE CASH BOOK (OF PART PERI OD 01.09.2000 TO 30.06.2001) (VIDE B.NO.100 / PANCHANAMA DATED 2.8.2 003), CHECKLIST OF THE BORROWERS INDICATING THE DUE DATES OF PAYMENT OF IN TEREST AND BROKERAGE TO SHRI. SONI, HAVE BEEN FOUND (FOR THE PERIOD 1.1.200 0 TO 31.12.2002, WITH BROKEN PERIODS) (B.NO.98 AND 99 OF THE PANCHANAMA D ATED 2.8.2003). 2.2 THE AO OBSERVED THAT THE METHOD FOLLOWED BY SHR I SONI, IS THAT THE CASH LOAN IS NORMALLY ADVANCED FOR 90 DAYS, AND THE LOAN AMOUNT IS ADVANCED IN CASH, AFTER DEDUCTING THE INTEREST AMOU NT (VARYING FROM 1.5% TO 2% P.M.) AND THE BROKERAGE AMOUNT (BETWEEN 0.25% TO 0.50% P.M.). THUS, FOR A LOAN OF RS. 1 LAKH, THE BORROWER RECEIVES ONL Y RS.94,750/- (AFTER DEDUCTING INTEREST OF RS.4,500/- @ 1.5% P.M. FOR TH REE MONTHS), AND BROKERAGE OF RS.750/- @ 0.25% P.M. FOR THREE MONTHS ). AT THE TIME OF BORROWING THE CASH LOANS, THE BORROWER HANDS OVER T HE BLANK CHEQUE (OF THE 3 FULL AMOUNT BORROWED) AND PROMISSORY NOTE TO SHRI S ONI. ANOTHER PROMISSORY NOTE (FOR 1% OF THE AMOUNT BORROWED), CL AIMED AS ADDITIONAL SECURITY (FOR FUTURE CONTINGENCIES SUCH AS LEGAL EX PENSES IN CASE OF DEFAULT) IS ALSO OBTAINED FROM THE BORROWERS. THIS ADDITIONA L PRO NOTE IS USED MAINLY TO KEEP TRACK OF THE INTEREST PAYMENT ON DUE DATES BY THE BORROWER, WHICH IS RECORDED. THE PROMISSORY NOTES AS ABOVE ALSO CONTAI N THE NAMES OF THE INVESTORS / MONEY LENDERS, (IN ABBREVIATED / ENCRYP TED / MIS-SPELT FORM) WHO ADVANCED CASH LOANS AND RECEIVED INTEREST IN CASH. 2.3 IN ORDER TO FINANCE HIS BUSINESS, AND TO REDUCE THE RISK OF LOSS, SHRI SONI TOGETHER WITH SHRIKANT H. SONI, HIS YOUNGER BR OTHER, ALSO OBTAINED FUNDS FROM KNOWN PEOPLE WITH READY CASH, WITH THE P ROMISE TO PAY INTEREST RANGING FROM 1.30% TO 1.50% PAID UPFRONT I.E. AT T HE TIME OF ADVANCING THE CASH LOANS TO / THROUGH SHRI SONI. THUS, IN MOST CA SES AND OCCASIONS, SUCH CASH AMOUNTS RECEIVED FROM THE INVESTORS, ARE RECEI VED BY SHRI SONI AFTER THE INTEREST HAS ALREADY BEEN DEDUCTED. SUCH ADVANC ES REMAIN IN THE BUSINESS, TILL THE INVESTOR / DEPOSITOR DESIRES. TH E INVESTOR KEEPS RECEIVING THE INTEREST, ON THE LOAN AMOUNTS TILL REDEEMED IN A CYCLE OF 90 DAYS. 2.4 THE AO OBSERVED THAT THE DOCUMENTS AT BN. 98 AN D 99 SHOW THE AMOUNT, (TO BE READ AS MULTIPLES OF 1000 OF THE FIG URE MENTIONED THEREIN) ADVANCED/ INVESTED AND OUTSTANDING ON A GIVEN DATE BY THE ASSESSEE AND RATE OF INTEREST (PER MONTH) PAYABLE BY THE BORROWERS, W HOSE NAMES ARE ALSO INDICATED. THESE ADVANCES ARE UNACCOUNTED AND UNDIS CLOSED INVESTMENT OF THE ASSESSEE WHICH MAY BE TAXED. THE HAND-WRITTEN E NTRIES ' I/P ' AND DATE INDICATES THE EVENT OF INTEREST PAYMENT ON SUCH DAT ES TO SHRI JAGANNATH E. 4 LAHOTI, WHICH WILL HAVE TO BE WORKED OUT FOR DETERM INING THE UNDISCLOSED INTEREST INCOME ON SUCH UNACCOUNTED INVESTMENTS. 2.5 THE AO OBSERVED THAT THE ASSESSEES NAME APPEAR S IN THE SEIZED DOCUMENTS IN ABBREVIATED AND/ OR DISTORTED FORM (JA GUSHETH LATI OR J.R. LATI, JAGANNATH LAHOTI), WHICH WAS INTENDED TO CONC EAL THE IDENTITY OF SUCH PERSONS. SHRI SONI HAS DECLINED TO IDENTIFY SUCH I NVESTORS/PERSONS, AND SUCH CREDITS WAS ADDED AS UNEXPLAINED, ON A PROTECTIVE B ASIS, IN HIS HANDS. HOWEVER, THERE ARE PLENTY OF DIRECT AND INDIRECT EV IDENCES IN THE FORM OF LOOSE PAPERS, SUGGESTING THE IDENTITY AND ACTUAL TR ANSACTIONS BY SUCH PERSONS. 2.6 THE AO NOTED THAT FROM THE SEIZED DOCUMENTS THA T RS.15 LAKHS WAS INVESTED BY SHRI LAHOTI IN MONEY LENDING TO FOLLOWI NG PERSONS, AS ON 31- 03-2000, AS DETAILED BELOW & WHICH IS UNACCOUNTED : 2.7 CERTAIN LOOSE PAPERS FOUND DURING THE COURSE OF SEARCH OPERATION IN THE CASE OF SHRI SONI BEAR SIGNATURE OF THE ASSESSE E. 2.8 THE ASSESSING OFFICER ACCORDINGLY ASKED THE ASS ESSEE TO EXPLAIN AS TO WHY AN AMOUNT OF RS.15 LAKHS SHOULD NOT BE ADDED TO THE TOTAL INCOME AS UNEXPLAINED INVESTMENT U/S.69 OF THE ACT., RS.71,25 0/- ON ACCOUNT OF INTEREST ACCRUED AND RS.3,750/- U/S.69C TOWARDS UNE XPLAINED EXPENDITURE ON ACCOUNT OF BROKERAGE. THE ASSESSEE FILED A REPLY O N 28-02-2007 THE CONTENTS OF WHICH HAS BEEN REPRODUCED BY THE ASSESS ING OFFICER IN THE BODY OF THE ORDER AND WHICH READS AS UNDER : SR.NO. NAME DATE AMOUNT 1 RAJLAXMI AGARWAL 20-01-2000 5,00,000 2 B. MANIKSHET 03-01-2000 5,00,000 3 ASHOK RAJUSHET 13-02-2000 5,00,000 5 1. AT THE OUTSET IT IS SUBMITTED THAT THE NOTICE U/S.1 48 IS WITHOUT JURISDICTION, BAD IN LAW AND VOID AB-INITIO AND THER EFORE ALL SUBSEQUENT PROCEEDINGS ARE BAD IN LAW AND VOID AB-INITIO. 2. IN PARA 2 OF YOUR LETTER YOU HAVE REFERRED TO SO ME INFORMATION AVAILABLE WITH YOUR OFFICE. IN THE INTEREST OF FAIR PLAY AND CONSIDERING THE PRINCIPLES OF NATURAL JUSTICE YOU ARE REQUESTED TO GI VE COMPLETE DETAILS OF SO CALLED INFORMATION AVAILABLE WITH YOU. IF IT IS IN FORM OF SOME DOCUMENTS YOU ARE REQUESTED TO GIVE COPIES OF DOCUMENTS AVAILABLE WI TH YOU. IF IT IS IN FORM OF STATEMENT YOU ARE REQUESTED TO GIVE COPY OF STATEME NT AND ALSO GIVE A FAIR REASONABLE AND PROPER OPPORTUNITY TO CROSS EXAMINE THE SAID PERSON. 3. SUBJECT TO ABOVE IT IS SUBMITTED THAT I HAVE GIV EN FOLLOWING LOANS TO THESE PERSONS IN THE FINANCIAL YEAR 1999-00. THE COP Y OF ACCOUNT OF ALL THESE PARTIES AND INTEREST RECEIVED THEREON IS PROPERLY ACCO UNTED FOR IN THE REGULAR BOOKS OF ACCOUNTS. 4. IT IS SUBMITTED THAT APART FROM ABOVE I HAVE NOT GIVEN ANY LOAN TO THESE PERSONS. 5. IN VIEW OF ABOVE IT IS SUBMITTED THAT THERE IS NO QUESTION OF MAKING ANY ADDITION IN MY HANDS EITHER U/S.69 ON ACCOUNT OF ALLEGED UNEXPLAINED INVESTMENTS AND/ OR ALLEGED UNACCOUNTED INTEREST RECEI VED. 6. AS REGARD BROKERAGE IT IS SUBMITTED THE BROKERAGE IS ALWAYS PAID BY THE BORROWER AND NOT BY THE INVESTORS AND THEREFORE T HERE IS NO QUESTION OF MAKING ANY ADDITIONS U/S.69C IN MY HANDS. 3. HOWEVER, THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSEE. HE OBSERVED THA T SUFFICIENT OPPORTUNITY HAD BEEN GIVEN TO THE ASSESSEE BY PROVIDING ALL THE RELEVANT DOCUMENTS/INFORMATIONS. THE CASH BOOK SEIZED FROM THE PREMISES OF MR.SHRIRAM H.SONI DURING THE SEARCH OPERATION CLEAR LY REVEALS NAME OF THE ASSESSEE ENLISTED AMONG THE NAME OF THE BORROWERS A ND LENDERS. THE EVIDENCE FOUND DURING THE COURSE OF SEARCH OPERATIO N IN THE CASE OF MR. SONI PROVES THAT THE ASSESSEE HAS INVESTED CASH THR OUGH MR. SHRIRAM SONI. REJECTING THE VARIOUS EXPLANATIONS GIVEN BY THE ASS ESSEE AND RELYING ON THE DECISIONS OF THE HONBLE SUPREME COURT IN THE CASE OF SUMATI DAYAL VS. CIT REPORTED IN 214 ITR 801 AND CIT VS. DURGA PRASA D MORE REPORTED IN 82 ITR 540 THE ASSESSING OFFICER MADE ADDITION OF R S.15 LAKHS TO THE TOTAL INCOME OF THE ASSESSEE U/S.69 OF THE ACT. HE ALSO ADDED RS 71,250/- BEING 6 INTEREST THEREON @ 1.5% PER MONTH WHICH WAS NOT DIS CLOSED BY THE ASSESSEE U/S.56 OF THE I.T. ACT AND AN AMOUNT OF RS.3,750/- BEING BROKERAGE PAID TO SHRIRAM SONI @ 0.25% U/S.69C OF THE I.T. ACT. 4. BEFORE THE CIT(A) THE ASSESSEE REITERATED SAME S UBMISSIONS AS MADE BEFORE THE ASSESSING OFFICER. IT WAS SUBMITTED THA T THE ADDITION MADE IN THE HANDS OF THE ASSESSEE ON THE BASIS OF DOCUMENTS/BOO KS OF ACCOUNT IMPOUNDED DURING THE COURSE OF SEARCH ACTION OF MR. SONI IS NOT JUSTIFIED. IT WAS ARGUED THAT IT IS THE RESPONSIBILITY OF MR. SON I TO EXPLAIN CREDITS APPEARING IN HIS BOOKS OF ACCOUNT IMPOUNDED DURING THE SEARCH ACTION WHICH BELONGS TO HIM IN TERMS OF SECTION 132(4A). M R. SONI HAS NEITHER IDENTIFIED THE ASSESSEE AS THE PERSON WHO HAS ADVAN CED LOAN TO HIM NOR GAVE THE IDENTITY, GENUINENESS OR CREDIT WORTHINESS OF T HE LOAN CREDITORS. HE HAS FAILED TO EXPLAIN THE SUMS CREDITED IN HIS BOOKS OF ACCOUNT AND THEREFORE THE SAME SHOULD HAVE BEEN ADDED IN HIS HANDS AND NOT IN THE HANDS OF THE ASSESSEE. THE ADDITION HAS BEEN MADE WITHOUT GIVIN G ANY OPPORTUNITY OF CROSS EXAMINATION OF MR. SONI. RELYING ON VARIOUS D ECISIONS IT WAS SUBMITTED THAT THE ADDITION, IF ANY, HAS TO BE MADE IN THE HANDS OF MR. SONI AND NOT IN THE HANDS OF THE ASSESSEE. 4.1 HOWEVER, THE LD.CIT(A) WAS NOT SATISFIED WITH T HE EXPLANATION GIVEN BY THE ASSESSEE AND UPHELD THE ADDITION MADE BY THE ASSESSING OFFICER. WHILE DOING SO, HE OBSERVED THAT NAME OF THE ASSESS EE WAS APPEARING IN THE BOOKS OF MR. SHRIRAM SONI AS INVESTOR EITHER IN FUL L FORM OR IN ABBREVIATED FORM. HE OBSERVED THAT MR. SHRIRAM SONI HAS ACCEPT ED THAT HE WAS ENGAGED IN THE BUSINESS OF FINANCE BROKING IN WHICH HE WAS ARRANGING FINANCE FOR OPERATORS FROM DIFFERENT INVESTORS AND THERE WAS A PARTICULAR MODUS 7 OPERANDI BEING FOLLOWED FOR THE SAME BUT REFUSED TO IDENTIFY EACH NAME SEPARATELY. ALL THESE FACTS HAVE BEEN DISCUSSED IN THE CASE OF THE ASSESSEE AS WELL AS IN THE CASE OF MR. SHRIRAM SONI. HE OBS ERVED THAT EVEN AFTER ADMITTING THE CORRECTNESS OF THE DIARIES SEIZED MR. SHRIRAM SONI REFUSED TO SPECIFICALLY IDENTIFY EACH AND EVERY INVESTOR/EACH OPERATOR IN THE STATEMENT RECORDED U/S.132(4A)/131. IN VIEW OF THIS HE NOTED THAT HIS PREDECESSOR WHILE DECIDING THE APPEAL OF MR. SHRIRAM SONI HAS R EVERSED THE FINDING GIVEN BY THE ASSESSING OFFICER AND HELD THAT THE CR EDITS APPEARING IN THE SEIZED DIARIES IN THE NAME OF DIFFERENT INVESTOR H AS TO BE TREATED AS UNDISCLOSED INCOME OF MR. SHRIRAM SONI AS HE HAS RE FUSED TO IDENTIFY EACH AND EVERY NAME IN THE STATEMENT OF OATH. HOWEVER, THE PUNE BENCH OF THE TRIBUNAL WHILE DECIDING THE CASE OF MR. SHRIRAM SON I HAS HELD THAT THE PERSONS ARE IDENTIFIABLE AND ALL THE MATERIALS AVAI LABLE CLEARLY SHOW THAT MR. SHRIRAM SONI HAS ONLY EARNED COMMISSION. BASED ON T HE ORDER OF THE TRIBUNAL IN THE CASE OF MR. SHRIRAM SONI AND OBSERV ING THAT THE NAME OF THE ASSESSEE MR.JAGANNATH EKNATH LAHOTI CLEARLY APPEAR IN THE SEIZED DOCUMENTS AND THE ASSESSING OFFICER HAS ESTABLISHED THIS RELATIONSHIP WITH THE TRANSACTIONS WHICH HAVE BEEN FOUND TO BE RELATI NG TO HIM, THE LD.CIT(A) UPHELD THE ADDITION MADE BY THE ASSESSING OFFICER. 5. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSE SSEE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : ON FACTS AND IN LAW, 1. THE LD.CIT(A) ERRED IN HOLDING THAT THE REASST. U /S.147 WAS VALID IN LAW. 2. THE LD.CIT(A) FAILED TO APPRECIATE THAT THE PRO VISIONS OF SECTION 147 WERE NOT APPLICABLE AT ALL AND FOR MAKING SUCH AN AD DITION, THE PROVISIONS OF SECTION 153C WERE ONLY APPLICABLE AND HENCE, THE ASST. IS BAD IN LAW. 8 3. THE LD.CIT(A) ERRED IN CONFIRMING THE FOLLOWING ADDITIONS: (A) OF RS.15 LAKHS U/S.69 AS THE ALLEGED AMOUNT GIVEN T O SHRI SONI ON INTEREST. (B) OF RS.71,250/- ON ACCOUNT OF THE ALLEGED UNACCOU NTED INTEREST INCOME. 4. THE LD.CIT(A) WAS NOT JUSTIFIED IN HOLDING THAT TH E PARTICULARS OF THE NOTINGS REGARDING THE FUNDS TAKEN BY SHRI S.H. SONI O F RS.15 LAKHS IN THE SEIZED PAPERS FOUND WITH HIM PERTAINED TO THE APPELLA NT. 5. THE LD.CIT(A) FAILED TO APPRECIATE THAT (A) ON THE BASIS OF THE NOTINGS IN THE SEIZED PAPERS FOU ND WITH SHRI S.H. SONI, THE CONCLUSION COULD NOT BE DRAWN AG AINST THE APPELLANT THAT THE FUNDS OF RS.15 LAKHS WERE PROVIDED BY HIM AND HE EARNED THE INTEREST OF RS.71,250/- THEREON. (B) THE ABOVE PRESUMPTION IS NOT JUSTIFIED WITHOUT ANY CONCRETE EVIDENCE. (C) EVEN SHRI SONI HAS NOT ADMITTED IN ANY OF HIS STAT EMENTS THAT THE IMPUGNED ENTRIES IN THE SEIZED PAPERS PERTAINED TO THE APPELLANT OR THAT THE APPELLANT HAD PROVIDED ABOVE FUNDS TO H IM AND HENCE, THE QUESTION OF MAKING ANY ADDITION IN THE HANDS OF THE A PPELLANT DID NOT ARISE. (D) THE OPPORTUNITY TO CROSS EXAMINE SHRI SONI WAS AL SO NOT GIVEN TO THE APPELLANT. (H) THE PRESUMPTION U/S.132(4A) DID NOT APPLY IN THE CASE OF THE APPELLANT AS THE PAPERS WERE SEIZED FROM SHRI SONI AND NOT FROM THE APPELLANT. 5. THE LD.CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION IS ON ACCOUNT OF THE ALLEGED LOAN AND THE INTEREST THEREO N ON PRESUMPTION AND SURMISES. 6. THE LD. COUNSEL FOR THE ASSESSEE STRONGLY OPPOSE D THE ORDER OF THE CIT(A). REFERRING TO PAGES 153 TO 155 OF THE PAPER BOOK HE SUBMITTED THAT THE ADDITION HAS BEEN MADE ON THE BASIS OF THE NAME JAGUSETH LATI WHEREAS THE NAME OF THE ASSESSEE IS JAGANNATH EKNA TH LAHOTI. HE SUBMITTED THAT NOTICE HAS BEEN ISSUED BY THE ASSESS ING OFFICER ON THE BASIS OF NAMES APPEARING IN THE TELEPHONE DIRECTORY OF PU NE. REFERRING TO A COPY OF THE TELEPHONE DIRECTORY HE SUBMITTED THAT T HERE ARE VARIOUS NAMES APPEARING UNDER THE SURNAME LAHOTI AND LATI. H E SUBMITTED THAT IN THE INSTANT CASE SHRIRAM SONI FROM WHOSE PREMISES THE D OCUMENTS WERE SEIZED 9 HAS NOT IDENTIFIED THAT THE ENTRIES BELONG TO THE A SSESSEE. REFERRING TO THE ORDER OF THE TRIBUNAL IN THE CASE OF SHRIRAM SONI H E SUBMITTED THAT THE ADDITION IN THE HANDS OF SHRIRAM SONI WAS DELETED B Y THE TRIBUNAL. REFERRING TO THE REPLY GIVEN BY THE ASSESSEE TO THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS HE SUBMITTED T HAT THE ASSESSEE HAS CATEGORICALLY STATED THAT HE IS NOT THE SAME PERSON AS APPEARING IN THE SEIZED DOCUMENTS. STILL THE ASSESSING OFFICER PROCEEDED A GAINST THE ASSESSEE ON THE BASIS OF NAMES APPEARING IN THE TELEPHONE DIREC TORY WITHOUT ANY FURTHER CORROBORATIVE EVIDENCE. HE SUBMITTED THAT NO PROMISSORY NOTE OR SECURITY IN THE NAME OF THE ASSESSEE WAS FOUND FROM THE PREMISES OF SHRIRAM SONI. NO CONFIRMATION OR ANY OTHER DOCUMEN T WAS FOUNDFROM THE PREMISES OF MR. SONI SO AS TO CONFIRM THAT THE NAME APPEARING IN THE SEIZED DOCUMENT INFACT BELONG TO THE ASSESSEE. UNDER THES E FACTS AND CIRCUMSTANCES, IT IS VERY DIFFICULT FOR THE DEPARTM ENT TO ACCUSE THE ASSESSEE THAT HE IS THE SAME PERSON. REFERRING TO PAGE 120 TO 122 AND VARIOUS OTHER PAGES OF THE PAPER BOOK HE SUBMITTED THAT THE ASSES SING OFFICER HAS NOT MADE ANY ADDITION WHERE THE NAME OF JAGANNATH EKNA TH LAHOTI HAS BEEN CLEARLY MENTIONED. 6.1 REFERRING TO THE COPY OF THE ORDER OF THE TRIBU NAL IN THE CASE OF ITO VS. ASHOK KESHVLAL OSWAL VIDE ITA NO.307/PN/2012 OR DER DATED 30-09- 2012 FOR A.Y. 2001-02 HE SUBMITTED THAT UNDER IDENT ICAL FACTS AND CIRCUMSTANCES THE ADDITION MADE BY THE ASSESSING OF FICER AMOUNTING TO RS.22,02,2000/- ON THE BASIS OF SEARCH CONDUCTED AT THE PREMISES OF MR. SHRIRAM H. SONI WAS DELETED BY THE CIT(A) AND THE T RIBUNAL DISMISSED THE APPEAL FILED BY THE REVENUE. HE SUBMITTED THAT SIN CE THE FACTS IN THE INSTANT CASE ARE IDENTICAL TO THE FACTS IN THE CASE DECIDED BY THE TRIBUNAL IN THE CASE 10 OF ASHOK KESHVLAL OSWAL, THEREFORE, THE ADDITION MA DE BY THE ASSESSING OFFICER AND SUSTAINED BY THE CIT(A) SHOULD BE DELET ED. THE LD. COUNSEL FOR THE ASSESSEE REFERRING TO PAGE 120 OF THE PAPER BOOK FURTHER SUBMITTED THAT NO ADDITION HAS BEEN MADE BY REOPENING THE ASS ESSMENT OF THE SUBSEQUENT YEAR ALTHOUGH THE NAME OF THE ASSESSEE W AS CLEARLY APPEARING WHICH OTHERWISE INDICATES THAT THE DEPARTMENT ITSEL F HAS ACCEPTED THAT JAGANNATH E. LAHOTI IS DIFFERENT FROM JAGUSHETH LATI. 7. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND HEAVILY RELIED ON THE ORDER OF THE CIT(A). HE SUBMITTED TH AT THE NAME OF THE ASSESSEE IS APPEARING IN ABBREVIATED FORM/CODED FOR M SO AS TO HIDE THE IDENTITY. THE LD.CIT(A) HAS VERY ELABORATELY DISCU SSED THE ISSUE AND HAS GIVEN COGENT REASONS WHILE UPHOLDING THE ADDITION M ADE BY THE ASSESSING OFFICER. HE ACCORDINGLY SUBMITTED THAT THE ORDER O F THE CIT(A) BEING JUST AND PROPER SHOULD BE UPHELD. 8. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALS O CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. WE FIND THE ASSESSING O FFICER IN THE INSTANT CASE MADE ADDITION OF RS.15 LAKHS AND CORRESPONDING INTE REST AS WELL AS BROKERAGE ON THE SAME ON THE BASIS OF CERTAIN DOCUM ENTS SEIZED FROM THE PREMISES OF MR. SHRIRAM H. SONI. IT IS AN ADMITTED FACT THAT DURING THE COURSE OF SEARCH IN THE PREMISES OF MR. SHRIRAM H. SONI HIS STATEMENT WAS RECORDED U/S.132(4) AND HE HAD REFUSED SPECIFICALLY TO IDENTIFY EACH AND EVERY INVESTOR/OPERATOR. ALTHOUGH CREDITS APPEARIN G IN THE SEIZED DIARIES IN THE NAME OF DIFFERENT INVESTORS WAS TREATED AS UNDI SCLOSED INCOME OF MR. 11 SHRIRAM H. SONI BY THE CIT(A), HOWEVER, THE TRIBUNA L VIDE ORDER DATED 17- 06-2010 HAS REVERSED THE SAME BY HOLDING THAT PERSO NS ARE IDENTIFIABLE AND ALL THE MATERIALS AVAILABLE CLEARLY SHOW THAT MR. S HRIRAM H. SONI HAS ONLY EARNED COMMISSION. BE THAT AS IT MAY BE, MR. SHRIR AM H. SONI HAD REFUSED TO IDENTIFY EACH AND EVERY PERSON. WE FIND THE SEI ZED DIARIES/PAPERS CLEARLY SHOW DIFFERENT NAMES SUCH AS JAGANNATH LAHOTI AND JAGUSETH LATI. HOWEVER, WE FIND NO ADDITION HAS BEEN MADE ON ACCOU NT OF ENTRIES APPEARING IN THE NAME OF THE ASSESSEE, I.E. JAGANNA TH LAHOTI. EVEN THE ENTRIES APPEARING IN THE NAME OF THE ASSESSEE FOR S UBSEQUENT YEARS HAS ALSO NOT BEEN BROUGHT TO TAX BY REOPENING THE ASSESSMENT , A STATEMENT MADE BY LD. AUTHORISED REPRESENTATIVE AND NOT CONTROVERTED BY THE LD. DEPARTMENTAL REPRESENTATIVE. WE, THEREFORE, FIND M ERIT IN THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE DEPART MENT BY NOT REOPENING THE ASSESSMENT IN THE SUBSEQUENT YEAR HAS ACCEPTED THAT JAGANNATH LAHOTI IS DIFFERENT FROM JAGUSETH LATI. FURTHER, THE AS SESSEE FROM THE VERY BEGINNING WAS DENYING THAT HE IS THE SAME PERSON. WE FIND NEITHER ANY PROMISSORY NOTE NOR ANY SECURITY IN THE NAME OF THE ASSESSEE NOR ANY CONFIRMATION OR ANY OTHER CORROBORATIVE EVIDENCE WA S FOUND FROM THE PREMISES OF MR. SHRIRAM H. SONI SO AS TO PROVE THAT THE ASSESSEE IS THE SAME PERSON ESPECIALLY WHEN MR. SHRIRAM H. SONI IN HIS S TATEMENT RECORDED U/S.132(4) HAS REFUSED TO IDENTIFY EACH AND EVERY I NVESTOR. 8.1 WE FIND UNDER SIMILAR FACTS THE COORDINATE BENC H OF THE TRIBUNAL IN THE CASE OF ASHOK KESHVLAL OSWAL (SUPRA) HAS DISMIS SED THE APPEAL FILED BY THE REVENUE WHEREIN THE CIT(A) HAS DELETED THE ADDI TION OF RS.22,02,2000/- MADE BY THE ASSESSING OFFICER ON AC COUNT OF ADDITIONS MADE ON THE BASIS OF DOCUMENTS FOUND FROM THE RESID ENCE OF SHRIRAM SONI 12 DURING THE COURSE OF SEARCH AND SEIZURE OPERATION. THE RELEVANT OBSERVATION OF THE TRIBUNAL READS AS UNDER : 5. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTIES A ND PERUSED THE RECORD. THE FIRST ISSUE WE HAVE TO DECIDE IS WHETHER T HE IDENTITY OF THE ASSESSEE IS PROVED THAT HE IS THE SAME OSWAL ASHOK OR OSWA L ASK. AS PER THE REMAND REPORT GIVEN BY THE ASSESSING OFFICER, NO PR OMISSORY NOTE OR BLANK CHEQUES ON THE NAMES OF THE ASSESSEE WERE FOUND. O N PERUSAL OF THE REMAND REPORT, WE FIND THAT ASSESSING OFFICER HIMSELF HA S EXAMINED MANY PERSONS ON SUSPICION, WHOSE NAMES WERE ASHOK OSWAL AND TH E MIDDLE NAME WAS DIFFERENT. ADMITTEDLY, IN THE SEIZED DOCUME NT, THERE IS NO MIDDLE NAME. THE ASSESSEE FILED THE SPECIFIC AFFIDAVIT DENYING HAVING ANY RELATION WITH SHRIRAM H. SONI. IN THE REMAND PROCEEDINGS, TH E AO EXAMINED BANK ACCOUNT AND HAS REPORTED THAT NO TRANSACTION WAS FOUND BETWEEN SHRIRAM H. SONI AND THE ASSESSEE. IT IS VERY MUCH INTERESTING THAT WHEN THE AO HIMSELF IS NOT SURE ABOUT THE IDENTITY OF OSWAL ASHOK, THE N AME WHICH IS FOUND IN THE SEIZED DOCUMENT, HOW THE ASSESSEE CAN BE FASTENED WIT H THE LIABILITY OF UNACCOUNTED TRANSACTIONS. WE FIND THAT THE AO HIMSELF ADMITS THAT THE ASSESSEE HAS SPECIFICALLY DENIED. LAW IS WELL SETTLED THA T BURDEN IS ON THE REVENUE TO ESTABLISH THE IDENTITY IF ANY PERSON IS TO B E CHARGED UNDER THE ACT. THE ACTION OF THE AO EXAMINING THE DIFFERENT PERSONS HAVING THE SAME NAME PRIMA-FACIE ESTABLISHES THAT ASSESSING OFFICER HIMSELF IS NOT SURE THAT THE ASSESSEE IS THE SAME PERSON WHOSE NAME WAS FOUND NOTED IN THE SEIZED DOCUMENT. MOREOVER, NOTHING IS ON RECORD TO SHOW THA T SHRIRAM H. SONI HAS STATED ABOUT THE ASSESSEE THAT WHATEVER THE NOTINGS FOUND WERE IN RESPECT OF THE ASSESSEE. NO CORROBORATIVE MATERIAL IS FOUND. IN O UR OPINION, THE LD.CIT(A) HAS RIGHTLY DELETED THE ENTIRE ADDITION AS THERE IS NO EVIDENCE AGAINST THE ASSESSEE. WE FIND NO MERIT IN THE APPEAL FI LED BY THE REVENUE. ACCORDINGLY, THE SAME IS DISMISSED. 8.2 SINCE IDENTITY OF THE ASSESSEE WAS NOT PROVED B Y MR. SHRIRAM H. SONI AT ANY POINT OF TIME NOR ANY CORROBORATIVE EVIDENCE WAS FOUND FROM THE RESIDENCE OF MR.SHRIRAM H. SONI SO AS TO PROVE THAT THE ASSESSEE IS THE SAME PERSON AS PER THE NAME APPEARING IN THE SEIZED DOCU MENT, THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINA TE BENCH OF THE TRIBUNAL IN THE CASE OF ASHOK KESHVLAL OSWAL (SUPRA) AND IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT TO OUR NOTICE, WE SET-ASIDE THE OR DER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION . 9. SINCE WE HAVE DELETED THE ADDITION MADE BY THE A SSESSING OFFICER AND UPHELD BY THE CIT(A), THEREFORE, THE GROUND REL ATING TO THE VALIDITY OF 13 THE RE-ASSESSMENT PROCEEDINGS U/S.147 AND APPLICABI LITY OF SECTION 153C BECOME ACADEMIC IN NATURE AND THEREFORE IS NOT BEI NG ADJUDICATED. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 11-02-2014. SD/- SD/- (R.S.PADVEKAR ) ( R. K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER SATISH PUNE, DATED 11 TH FEBRUARY 2014 COPY OF THE ORDER IS FORWARDED TO: 1. THE ASSESSEE 2. THE DEPARTMENT 3. THE CIT(A)-I, PUNE 4. THE CIT-I, PUNE 5. THE DR B BENCH, PUNE. 6. GUARD FILE BY ORDER // TRUE COPY // SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, PUNE