M/s Surya Developers, JAMNAGAR V. The Dy. Commr. of Income Tax, Cen. Cir.-2, RAJKOT-GUJARAT

ITA 468/RJT/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1299 (ITAT-RAJKOT)
• Duration Of Justice: 6 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-04-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 29-02-2016
• Assessment Year: 2012-2013
• Appeal Filed On: 09-10-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: YOGESH PANDEY
• Assessee Lawyers: HARISH RANPURA
• Keywords: Unexplained cash credit; Unexplained investment; Unexplained expenditure; Income from undisclosed sources; Search and seizure; Loose papers; Document seized; Source of fund; Additional evidence; Corroborative evidences; Onus to prove; Documents seized
• Section: 69C; 40A(3); 143(3); 142(1); 153A; 68; 69; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH , RAJKOT BEFORE: S H RI PRAMOD KUMAR , ACCOUNTANT MEMBER AND SHR I S. S. GODARA , JUDICIAL MEMBER [CONDUCTED THROUGH E - C OURT AT AHMEDABAD] M/S. SURYA DEVELOPERS, 6 - A. MODERN MARKET, P.N. MARG, NEAR AMBER CINEMA, JAMNAGAR PAN: ABOFS2838K (APPELLANT) VS THE DCIT, CENTRAL CIRCLE - 2, RAJ KOT (RESPONDENT) REVENUE BY : S H RI YOGESH PANDEY , CIT - D . R. ASSESSEE BY: S H RI HARISH RANPURA , A.R. DATE OF HEARING : 2 9 - 02 - 2 016 DATE OF PRONOUNCEMENT : 22 - 04 - 2 016 / ORDER P ER : S. S. GODARA , JUDICIAL MEMBER : - THESE FOUR ASSESSEE S APPEAL S FOR A.Y. 2009 - 10 TO 2012 - 13 , AR ISE FROM SEPARATE ORDER S OF THE CIT(A) - 11, AHMEDABAD DATED 2 8 - 07 - 2015 IN FIRST THREE CASES AND 30 - 07 - 2015 IN THE FOURTH ONE, IN APPEAL NO S. CIT(A) - 11/646 - R/RJT/CC - 2/2014 - 15, CIT(A) - 11/647 - I T A NO S . 457,466 TO 468 / RJT /20 15 A SSESSMENT YEAR 200 9 - 10 TO 2012 - 13 I.T.A NO. 4 57 , 466 TO 468 /RJT /20 15 A.Y. 2009 - 10 TO 2012 - 13 PAGE NO M/S. SURYA DEVELOPE RS VS. DCIT 2 R/RJT/CC - 2/2014 - 15, CIT(A) - 11/648 - R/RJT/CC - 2/2014 - 15 AND CIT(A) - 11/649 - R/RJT/CC - 2/2014 - 15 RESPECTIVELY. THE RELEVANT PROCEEDINGS ARE UNDER SECTION 15 3 C R.W.S. 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT TH E ACT IN FIRST THREE ASSESSMENT YEARS AND U/S. 143(3) OF THE ACT IN THE LAST ONE . 2. WE COME TO ASSESSMENT YEAR - WISE PLEADINGS. THE ASSESSEE RAISES THREE SUBSTANTIVE GROUNDS IN ASSESSMENT YEAR 2009 - 10 INTER ALIA CHALLENGING VALIDITY OF SECTION 153C PR OCEEDINGS BY RAISING LEGAL PLEA FOLLOWED BY ITS GRIEVANCE ON MERITS THAT THE CIT(A) HAS ERRED IN CONFIRMING ASSESSING OFFICER S ACTION MAKING SECTION 69C UNEXPLAINED EXPENDITURE AND SECTION 68 UNEXPLAINED CASH CREDIT ADDITIONS OF RS. 12 LACS AND RS. 39, 44 ,000/ - ; RESPECTIVELY. N EXT ASSESSMENT YEAR 2010 - 11 RAI SES FIRST LEGAL PLEA AS IN THE PRECEDING ASSESSMENT YEAR. LA TTER SUBSTANTI VE GROUND IS AGAINST SECTION 69C UNEXPLAINED EXPENDITURE ADDITION OF RS. 24 LACS. THIRD ASSESSMENT Y EAR 2011 - 12 INVOLVES THRE E SUBSTANTIVE GROUNDS INTER ALIA OF SECTION 153C PROCEEDINGS LEGALITY FOLLOWED BY SECTION 69C ADDITION OF UNEXPLAINED EXPENDITURE AMOUNTING TO RS. 24 LACS AND UNEXP LAINED CASH CREDIT ADDITION OF RS. 14,74,000/ - . LAST ASSESSMENT YEA R 2012 - 13 COMPRISES OF T WO SUBST A NTIV E GROUNDS OF SECTION 69C ADDITION OF RS. 50,31,998/ - AND SECTION 68 ADDITION OF RS. 50 LACS RESPECTIVELY . BOTH THE LD . REPRESENTATIVES ARE AD - IDEM THAT ALL THE FOUR CASES ARISE FROM A COMMON FACTUAL BACKGROUND. THERE IS NO ARGUMENT RAISED AT THE ASSESSEE S BEHEST IN SUPPORT OF ITS COMMON LEGAL I.T.A NO. 4 57 , 466 TO 468 /RJT /20 15 A.Y. 2009 - 10 TO 2012 - 13 PAGE NO M/S. SURYA DEVELOPE RS VS. DCIT 3 GROUND CHALLENGING VALIDITY OF THE IMPUGNED SECTION 153C PROCEEDINGS IN THE FIRST THREE ASSESSMENT YEARS 2009 - 10 TO 2011 - 12. THE SAME IS ACCORDINGLY REJECTED . WE COME TO THE REMAINING TWO ISSUES CO MMON IN ALL CASES OF SECTION 69C AND SECTION 68 STATED HEREINABOVE. 3 . THE ASSESSEE - FIRM DEALS IN REAL ESTATE AND CONSTRUCTION BUSINESS. IT DEVELOPED A COMMERCIAL PROJECT SURYA TOWER AT JAMNAGAR. THE DEPARTMENT CARRIED OUT A SEARCH ACTION DATED 25 - 08 - 2011 IN CASE OF ONE OF ITS PARTNERS SHRI PANKAJ V. PATEL. IT SEIZED A DIARY COMPRISING OF PAGES 1 TO 22 BELONGING TO THE ASSESSEE. SHRI PATEL GOT RECOR D ED HIS STATEMENT STATING THAT HE WAS A PARTNER IN MANY FIRMS INCLUDING ASSESSEE. IT HAD DEVELOPED THE ABOVE STATED COMMERCIAL COMPLEX. THERE WERE FOUR OTHER PARTNERS IN ASSE SSEE - FIRM. ONE OF THEM SHRI SA NATH K. MEHTA LOOKED AFTER ITS AFFAIRS. THE DEPARTMENT AUTHORITIES SEIZED / INVENTORIED THE ABOVE STATED DIARY AS ANNEXURE A - 3. SHRI PATEL CLAIMED HIMSELF TO HAVE SCRIBED ALL THE ENTRIES T HEREIN. HE STATED THAT LEFT SIDE ENTRIES COMPRISED OF THE AMOUNTS RECEIVED IN CASH AND CHEQUE FROM ASSESSEE S MEMBERS. AND THOSE ON THE RIGHT SIDE WERE THE PROJECT EXPENSES INCURRED IN CASH NOT RECORDED IN BOOKS. THIS MADE TH E ASSESSING OFFICER TO INITIATE SECTION 153C PROCEEDING VIDE NOTICES DATED 24 - 01 - 2014 IN FIRST THREE ASSESSMENT YEARS. THE ASSESSEE FILED ITS FOUR RETURNS OF INCOME ON 21 - 02 - 2014 STATING NIL INCOME, RS. 28,000/ - AND RS. 1,25,000/ - IN THE SAI D THREE ASSESSMENT YEARS. ITS REGULAR RETURN FILED FOR ASSESSMENT YEAR 2012 - 13 OFFERED INCOME OF RS. 4,96,750/ - . I.T.A NO. 4 57 , 466 TO 468 /RJT /20 15 A.Y. 2009 - 10 TO 2012 - 13 PAGE NO M/S. SURYA DEVELOPE RS VS. DCIT 4 4 . WE COME TO THE FIRST COMMON ISSUE INVOLVED IN ALL THE FOUR IMPUGNED ASSESSMENT YEARS REGARDING CORRECTNESS OF SECTION 69C UNEXPLAINED EXP ENDITURE ADDITION OF RS. 12 LACS IN FIRST ASSESSMENT YEAR, RS. 24 LACS EACH IN SECOND AND THIRD ASSESSMENT YEARS AND RS. 50,31,998/ - IN THE LAST ASSESSMENT YEAR; RESPECTIVELY. THE ASSESSING OFFICER TOOK UP SCRUTINY IN ALL FOUR ASSESSMENT YEARS. HE SOUGHT TO VE RIF Y THE ASSESSEE S AGGREGATE CASH EXPENSES OF RS. 1,10,31,998/ - AS BIFURCATED HEREINABOVE IN THE RELEVANT FOUR ASSESSMENT YEARS. HE ASKED THE ASSESSEE TO PRODUCE THE RELEVANT CASH VOUCHERS. THE ASSESSEE S JUSTIFICATION SUPPORTED ITS CASH EXPENDITU RE TO BE BASED ON MEMORY ONLY IN ABSENCE ANY SPECIFIC YEAR - WISE DATA. THE ASSESSING OFFICER THEREAFTER SOUGHT TO TREAT THE SAME AS UNEXPLAINED EXPENDITURE U/S. 69C OF THE ACT. 5 . THE ASSESSEE FILED ITS IDENTICAL REPLY IN ALL FOUR CASES ON 11 - 03 - 2014. IT INTER ALIA PLEADED THAT THE RELEVANT NOTING IN SEIZED MATERIAL SPECIFICALLY MENTIONED THE IMPUGNED EXPENDITURE, SHRI PATEL S STATEMENT HAD ALREADY DEPOSED ABOUT THE IMPUGNED SUMS BEING INCURRED ON ITS COMMERCIAL PROJECT AND THE NATURE THEREOF STOOD INDI CATED AND ALSO THAT THE SEIZED MATERIAL DULY CONTAINED RELEVANT ENTRIES QUA SOURCE OF FUNDS. IT EMPHASIZED THAT ITS SEIZED NOTEBOOK CLARIFY NATURE OF RECEIPTS/EXPENSES WHICH COULD NOT BE TREATED AS UNEXPLAINED U/S. 69C OF THE ACT. ITS CASE ACCORDINGLY WA S THAT ITS IMPUGNED OR SOURCE THEREOF WAS NOT IN DISPUTE SO AS TO INVITE SECTION 69C APPLICATION. LASTLY CAME ASSESSEE S REPLY TO THE ASSESSING OFFICER S SPECIFIC QUERY ABOUT THE IMPUGNED EXPENDITURE BEING I.T.A NO. 4 57 , 466 TO 468 /RJT /20 15 A.Y. 2009 - 10 TO 2012 - 13 PAGE NO M/S. SURYA DEVELOPE RS VS. DCIT 5 BROUGHT IN BOOKS WITHOUT SUPPORTING EVIDENCE. IT SUBMITTED THAT THE SAME HAD TO BE ALLOWED AGAINST THE PROJECT RECEIPTS. THE ASSESSEE STRESSED ITS POINT THAT CONTENTS OF THE SEIZED MATERIAL HAD TO BE CONSIDERED IN ENTI RETY AND NOT IN PIECEMEAL. IT ASSERTED THAT NO PROJECT CAN BE EXECUTED WITHOUT I NCUR RING ANY CORRESPONDING EXPENDITURE. 6 . WE FIND THAT THE ASSESSING OFFICER DID NOT GET IMPRESSED WITH THE ABOVE STATED EXPLANATION. HE OBSERVED THAT ASSESSEE S EXPENDITURE IN QUESTION WAS NOT MADE OUT OF ANY EXPLAINED SOURCE. NOR DID IT MAINTAIN ANY RE GULAR BOOKS OF ACCOUNTS OR VOUCHERS. HE WAS OF THE VIEW THAT SOURCE OF NOTING MADE IN THE SEIZED MATERIAL WERE SILENT. AND ALSO THAT ASSESSEE S DETAILS OF CASH EXPENDITURE HAD NOT BEEN SUBMITTED. THE ASSESSING OFFICER OPINED THAT MOST OF THE EXPENSES EX CEEDED RS. 20,000/ - AND DESERVED TO BE DISALLOWED U/S. 40A(3) OF THE ACT. HE ACCORDINGLY INVOKED SECTION 69C TO DISALLOW THE IMPUGNED SUMS OF RS. 12 LACS IN FIRST ASSESSMENT YEAR, RS. 24 LACS EACH IN SECOND AND THIRD ASSESSMENT YEARS AND RS. 50,31,998/ - I N THE LAST ASSESSMENT YEAR UNDER CHALLENGE. WE REPEAT THAT THESE SUMS FIGURED ON THE RIGHT SIDE OF THE SEIZED MATERIAL (SUPRA) NOTED AS EXPENDITURE AGGREGATING TO RS. 1,10,31,998/ - . 7 . WE PAU SE HERE FOR A SECOND ON THIS SECTION 69C ISSUE. IT TRANS PIRED THAT SECOND ISSUE OF SECTION 68 UNEXPLAINED CASH CREDIT ADDITION OF RS. 39,44,000/ - , RS. 14,74,000/ - AND RS. 50 LACS IN ASSESSMENT YEAR 2009 - 10, 2011 - 12 AND 2012 - 13 RESPECTIVELY HAS I.T.A NO. 4 57 , 466 TO 468 /RJT /20 15 A.Y. 2009 - 10 TO 2012 - 13 PAGE NO M/S. SURYA DEVELOPE RS VS. DCIT 6 BEEN MADE QUA VARIOUS ENTRIES APPEARING ON THE LEFT SIDE OF THE SEIZ ED DIARY. THE ASSESSEE STATED THE SAME TO HAVE BEEN RECEIVED FROM ITS PARTNER SHRI SANATH K. MEHTA IN THE NATURE OF LAND AND BUILDING CONTRIBUTION IN EARLY 2004 TREATED AS OPENING BALANCE. ITS CASE WAS THAT THIS WAS BEYOND THE PURVIEW OF SECTION 153C P ROCEEDINGS SINCE THE SAID ASSESSMENT YEAR DID NOT COME WITHIN SIX ASSESSMENT YEARS PRECEDING THE SEARCH OF DATE CRITERIA. IT RELIED UPON SEIZED MATERIAL NOTING SUPPORTING 2004 CAPITAL CONTRIBUTION PLEA. THE ASSESSING OFFICER REFERRED TO THE SEIZED MATERI AL TO OBSERVE THAT THERE WAS A CHEQUE RECEIPT OF RS. 2.80 LACS FROM KANKHARA STORES AS PER P & L ACCOUNT FOR ASSESSMENT YEAR 2010 - 11 AND SHRI MEHTA S CONTRIBUTION SUCCEEDED THE SAME AS HAWALO LIMBDA LINE . HE WENT STRICTLY BY THIS YEAR - WISE SEQUENCE. TH E ASSESSING OFFICER FURTHER REFERRED TO PARTNERSHIP TREAT CLAUSE AS WELL TO HOLD THAT THIS CONTRIBUTION OF RS. 39,44,000/ - WAS NOWHERE MENTIONED THEREIN. ALL THIS RESULTED IN THE IMPUGNED SECTION 68 ADDITION IN ASSESSMENT YEAR 2009 - 10. SIMILAR ADDITION W AS M ADE IN ASSESSMENT YEAR 2011 - 12 OF RS. 14,74,000/ - AFTER REJECTING ASSESSEE S EXPLANATION ATTRIBUTING THE SAME AS RECEIVED FROM SMT. JYOTIBEN KISHOREBHAI FOR WANT OF CONFIRMATION. WE PROCEED FURTHER AND FIND THAT THE LAST ASSESSMENT YEAR 2012 - 13 INVOL VES AN IDENTICAL SECTION 68 ADDITION OF RS. 50 LACS. THE ASSESSEE EXPRESSED ITS INABILITY TO PRODUCE THE SOURCE/ CONFIRMATION THEREOF RECEIVED AS ADVANCE. THE ASSESSING OFFICER ADOPTED SIMILAR REASONING FOR ADDING THIS FIGURE AS WELL. I.T.A NO. 4 57 , 466 TO 468 /RJT /20 15 A.Y. 2009 - 10 TO 2012 - 13 PAGE NO M/S. SURYA DEVELOPE RS VS. DCIT 7 8 . THE ASSESSEE INST ITUTED FOUR SEPARATE APPEAL S CHALLENGING THE ABOVE STATED ADDITIONS. IT REITERATED ITS VARIOUS PLEAS ADOPTED IN THE COURSE OF ASSESSMENT. THE ONLY EXCEPTION IS ASSESSMENT YEAR 2012 - 13. THE ASSESSEE ATTRIBUTED SOURCE OF ITS CASH CREDITS AMOUNTING TO RS. 5 0 LACS AS ADVANCE BOOKING RECEIVED FROM CUSTOMERS IN THIS LAST A SSESSMENT Y EAR . IT CONTENDED THAT THESE BOOKINGS WERE CANCELLED AND THE CORRESPONDING ADVANCE MONEY STOOD REFUNDED IN FINANCIAL YEAR 2012 - 13. THE ASSESSEE FILED CONFIRMATION OF ITS FOUR CUSTOMERS ACCOUNTS AS WELL. THE CIT(A) UPHOLDS ASSESSING OFFICER S ACTION MAKING THE TWO IMPUGNED ADDITIONS U/S. 69C AND SECTION 68 IN QUESTION. HE DOUBTS GENUINENESS OF ASSESSEE S EXPLANATION IN ASSESSMENT YEAR 2012 - 13 INTER ALIA BY OBSERVING THAT THESE NAMES DO NOT APPEAR IN BOOKS, M ODE OF PAYMENT IS ALSO NOT SPECIFIED SO AS TO SATISFY ESSENTIAL INGREDIENTS OF RULE 46A OF THE INCOME TAX RULES. IT IS IN THIS BACKDROP OF FACTS THAT THE ASSESSEE HAS FILED INSTANT FOUR APPEALS CHALLENGING THE TWO ADDITIONS IN QUESTION. 9 . WE HAVE ANAL YZED THE ABOVE NARRATION OF FACTS INVOLVED. THERE IS HARDLY ANY DISPUTE THAT THE ASSESSING OFFICER HAS ADDED CASH INFLOWS OF RS. 1,04,18,000/ - COMPRISING OF RS. 39,44,000/ - , RS. 14,74,000/ - AND RS. 50 LACS IN ASSESSMENT YEAR 2009 - 10, 2011 - 12 AND 2012 - 13; RESPECTIVELY AS APPEARING IN THE LEFT SIDE OF THE SEIZED MATERIAL ANNEXURE A - 3 PAGE 01 BY INVOKING SECTION 68 OF THE ACT UNDER THE HEAD UNEXPLAINED CASH CREDIT. HE ADOPTS A SIMILAR COURSE OF ACTION FOR MAKING SECTION 69C ADDITION AGGREGATING TO RS. 1,10,3 1,998/ - AS APPEARING ON THE RIGHT SIDE OF THE SAME DOCUMENT TO I.T.A NO. 4 57 , 466 TO 468 /RJT /20 15 A.Y. 2009 - 10 TO 2012 - 13 PAGE NO M/S. SURYA DEVELOPE RS VS. DCIT 8 THE TUNE OF RS. 12 LACS IN ASSESSMENT YEAR 2009 - 10, RS. 24 LACS EACH IN ASSESSMENT YEAR 2010 - 11 AND 2011 - 12 FOLLOWED BY THE REMAINING SUMS OF RS. 50,31,998/ - . BOTH SIDES CLARIFY IN THE COURSE OF HEARING THAT THE IMPUGNED ADDITIONS HAVE BEEN MADE BY ADDING THE CASH INFLOW AS WELL OUTFLOW AFTER TREATING THEM AS UNEXPLAINED. THE ASSESSEE STATES THAT THE AUTHORITIES HAVE WRONGLY ADOPTED THIS LINE OF ACTION AS THESE TWO SIDES CANNOT BE SIMULTANEOU SLY ADDED SINCE IT CAN BE SAFELY INFERRED BY ADOPTING TELESCOPING BENEFIT THAT ITS INVESTMENTS AS BIFURCATED IN FOUR ASSESSMENT YEARS OWE THEIR SOURCE TO THE CORRESPONDING CREDIT INFLOW IN THE LEFT SIDE. THE REVENUE DOES NOT DISPUTE THIS FACTUAL POSITION . WE OBSERVE IN THESE FACTS AND CIRCUMSTANCES THAT WE HAVE FIRST OF ALL DECIDE CORRECTNESS OF SECTION 68 ADDITIONS UNDER CHALLENGE. 10. THE ASSESSEE FILES COPY OF SEIZED DIARY ANNEXURE A - 3 I.E. CASH INFLOW CHART IN QUESTION AS UNDER: - AMOUNT P ARTICULARS DATE REF. 2,35,000/ - EMLO - (A) 99,000/ - KANTI BAJRANG - (E) 4,00,000/ - KALUBHAI 14.02.2004 (B) 2,00,000/ - KALUBHAI 14.02.2004 (B) 2,44,000/ - SANATBHAI MEHTA 12.03.2004 (D) 2,00,000/ - SANATBHAI MEHTA 18 .03.2004 (D) 2,80,000/ - KANKHARA STO RES CHEQUE - (C) 1,00,000/ - KANTI BAJRANG - FOR SHOP ADV. - (E) 30,00,000/ - SANATBHAI MEHTA (HAVALO - LIMDA LINE 30.03.2004) (OLD BOOKING 30.03.2004 (D) I.T.A NO. 4 57 , 466 TO 468 /RJT /20 15 A.Y. 2009 - 10 TO 2012 - 13 PAGE NO M/S. SURYA DEVELOPE RS VS. DCIT 9 HAVALA) 47,58,000/ - 2,00,000/ - KANTI BAJRANG - FOR SHOP ADV. - (E) 5,00,000/ - HAVALO SANTBHAI (HAVALO LIMDA LINE) (D) 54,58,000/ - 2,00,000/ - KANTIBAJRANG - HAPTA CASH 10.12.2010 (E) 4,00,000/ - KANTIBAJRANG - HAPTA CASH - (E) 60,58,000/ - LD. DEPARTMENT REPRESENTATIVE IS FAIR ENOUGH IN NOT CHALLENGING CORRECTNESS THEREOF. PHOTOCOPY OF THIS O RIGINAL PAGE ALSO F ORMS PART OF CASE FILE. THE ASSESSEE PLEADS THAT BOTH THE AUTHORITIES BELOW HAVE INTER ALIA ERRED IN ADOPTING A PICK AND CHOOSE METHOD IN ACCEPTING AND REJECTING THE ABOVE EXTRACTED 13 CASH INFLOW TRANSACTIONS. THOSE ADDED ARE D ENTRIES IN THE NAME OF SHRI SANATH K. MEHTA AGGREGATING TO RS. 39,44,000/ - IN ASSESSMENT YEAR 2009 - 10 AND RS. 9,99,000/ - IN E ENTRIES IN ASSESSMENT YEAR 2010 - 11 WHEREAS ENTRIES AT A, B AND C STAND ACCEPTED. LD. AR SUBMITS THAT THE OLDEST EMLO ENTRIES OF RS. 2,35,000/ - HAS A CCEPTED. THE ASSESSEE INTER ALIA ARGUES IN THE COURSE OF HEARING THAT THE ASSESSING OFFICER OUGHT TO HAVE READ CONTENTS OF THE SEIZED MATERIAL AS IT IS, HE WAS REQUIRED TO TREAT THE RELEVANT AMOUNT IN THE CORRESPONDING ASSESSMENT YEAR AND THE LAST ARGUMEN T IS THAT SHRI KALUBHAI S ENTRIES AS RECEIVED IN FINANCIAL YEAR 2003 - 04 ARE ACCEPTED, THERE IS NO JUSTIFICATION TO TREAT SHRI MEHTA S CONTRIBUTION IN A DIFFERENT MANNER. LD. DR APPEARING AT I.T.A NO. 4 57 , 466 TO 468 /RJT /20 15 A.Y. 2009 - 10 TO 2012 - 13 PAGE NO M/S. SURYA DEVELOPE RS VS. DCIT 10 REVENUE S BEHEST STRONGLY REITERATE S BOTH THE LOWER AUTHORITIES O RDER AS PER REASONING GIVEN THEREIN. 11. WE HAVE HEARD RIVAL CONTENTION S . RELEVANT FACTS NARRATED HEREINABOVE ARE NOT REPEATED FOR THE SAKE OF BREVITY. THERE IS HARDLY ANY DISPUTE ABOUT THE FACT THAT THE ASSESSING OFFICER HAS PARTLY REJECTED CREDITS A PPEARING IN THE LEFT SIDE OF ASSESSEE S CASH INFLOW STATEMENT. WE FIND THAT THERE ARE 13 INFLOW INSTANCES. BOTH THE AUTHORITIES BELOW ADD 7 OF THEM IN ASSESSMENT YEARS 2009 - 10 AND 2011 - 12 TO THE TUNE OF RS. 39,44,000/ - AND RS. 9,99,000/ - . THERE IS NO RE ASON FORTHCOMING FROM THE LOWER AUTHORITIES ORDERS FOR ACCEPTING THE REMAINING SIX INFLOW TRANSACTIONS . A CO - ORDINATE BENCH OF THE TRIBUNAL IN 88 TAXMANN 65 (GHANSHYAM R. THAKKAR S CASE) DEALS WITH SUCH A SEARCH/SURVEY STATEMENT TO HOLD THAT THE SAME HAS TO BE CONSIDERED IN ENTIRETY AND NOT IN PIECEMEAL. WE REPEAT THAT ASSESSEE S PARTNER SHRI PATEL HAD STATED DURING THE COURSE OF SEARCH ITSELF THAT THESE INFLOWS RELATE TO ASSESSEE S MEMBERS PAYMENTS BY CASH AND CHEQUES. WE FURTHER NOTICE THAT A CO - ORDI NATE BENCH DECISION OF THE TRIBUNAL IN VIVEK KUMAR KATHOTI A VS. DCIT IT(SS)A NO. 1 TO 4/KOL/2011 DECIDED ON 29 - 07 - 2011DEALS WITH A SIMILAR SITUATION WHEREIN THE REVENUE AUTHORITIES ADOPTED AN IDENTICAL PICK AND CHOOSE METHOD BY ADDING OUTFLOWS AS UNEXPLAIN ED INVESTMENTS WITHOUT ANY SOURCE AND ACCEPTED CASH QUANTUM . THE LD. CO - ORDINATE BENCH REJECTS THIS APPROACH BY INVOKING SECTION 292C OF THE ACT AS UNDER: - 11. WE FIND THAT THE ASSESSING OFFICER HAS MADE ADDITIONS FOR THESE THREE ASSESSMENT YEARS ON THE BASIS OF PICK A ND CHOOSE BASIS OF ENTRIES OF RM - 1 AND RM - 2 AND BY REJECTING SOURCE EXPLAINING ENTRIES I.T.A NO. 4 57 , 466 TO 468 /RJT /20 15 A.Y. 2009 - 10 TO 2012 - 13 PAGE NO M/S. SURYA DEVELOPE RS VS. DCIT 11 OF INVESTMENT. ASSESSING OFFICER ACCEPTED THE QUANTUM OF CASH IN RM - I AND RM - 2 BUT REJECTED THE NATURE EXPLAINING THE SOURCE AND ALSO ACCEPTED ENTRIES BEL ONGING TO UNACCOUNTED INVESTMENTS IN PROPERTY AND SHARES REFLECTED IN RM - 1 AND RM - 2. THE ASSESSING OFFICER MADE ADDITION WHERE SALE PROCEEDS OF PAINTINGS, GOLD AND DIAMONDS HAS REFLECTED IN RM - 1 AND RM - 2 EXCEEDS UNACCOUNTED INVESTMENTS BUT MADE ADDITION ON ACCOUNT OF UNEXPLAINED CASH RECEIVED IN THESE TWO ASSESSMENT ORDERS. FURTHER, ASSESSING OFFICER ALSO MADE ADDITION ON ACCOUNT OF UNACCOUNTED INVESTMENT REFLECTED IN RM - 1 AND RM - 2, WHERE EXCEEDED INFLOW OF CASH BY TREATING THE SAME AS DEFICIT AND UNEXPLAIN ED INVESTMENTS. BUT CIT(A) REJECTED THE SEIZED DOCUMENTS RM - 1 AND RM - 2 IN TOTO AND ALSO REJECTED THE REVISED ACCOUNTS PREPARED ON THE BASIS OF ENTRIES IN RM - 1 AND RM - 2. THE CIT(A) SINCE REJECTED RM - 1 AND RM - 2, INFLOW, OUTFLOW OF CASH, SHOWN THEREIN WAS ALS O REJECTED. HE MADE FRESH ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PROPERTY MADE ON THE BASIS OF ENTRIES IN GB - 12 FOUND FROM THE BUSINESS PREMISES OF THE ASSESSEE AND ON ACCOUNT OF INVESTMENT MADE IN SHARES OF DIFFERENT COMPANIES AS NARRATED ABOVE EVEN FROM THE AUDITED BALANCE SHEET OF SUCH COMPANIES. HERE, WE WANT TO MENTION ONE IMPORTANT ASPECT THAT THE ASSESSING OFFICER MADE ADDITIONS WHICH WERE DELETED BY THE CIT(A), APART FROM CHALLENGING THE DELETION OF RS.35 LACS, BALANCE ADDITIONS ARE NOT SU BJECT MATTER OF CHALLENGE BY REVENUE BEFORE US. 1 2. WE FIND THAT REVENUE DURING THE COURSE OF SEARCH ON THE RESIDENTIAL PREMISES OF ASSESSEE ON 28.2.2008, U/S. 132 OF THE ACT, FOUND AND INVENTORISED DOCUMENTS AS RM - 1 AND RM - 2. WHETHER THESE DOCUMENTS ARE TO BE TREATED AS TRUE OR NOT IS NOW TO BE DECIDED FIRST. WE FIND THAT CIT(A) AS WELL AS ASSESSING OFFICER HAS INVOKED PROVISION OF SECTION 292C OF THE ACT FOR NOT ACCEPTING THESE DOCUMENTS RM - 1 AND RM - 2. THE MAIN CONTENTION OF THE REVENUE AUTHORITIES IS TH AT U/S. 292C OF THE ACT THE WORDS USED BY LEGISLATOR WERE 'MAY PRESUME' AND HENCE IT WAS AT THE DISCRETION OF THE COURT TO MAKE OR NOT TO MAKE PRESUMPTION ACCORDING TO THE FACTS AND CIRCUMSTANCES OF THE CASE. THE REVENUE AUTHORITIES IN SUPPORT HAS RELIED O N THE JUDGMENT OF HON'BLE APEX COURT IN THE CASE OF P.R. METRANI VS. CIT (2006) 287 ITR 209 (SC). HE THUS CONCLUDED THAT SECTION 292C OF THE ACT WAS NOT FOR THE BENEFIT OF THE ASSESSEE AND HE COULD NOT ESCAPE THE LEGAL RESPONSIBILITY TO EXPLAIN WITH DOCUME NTS AND WITHOUT ANY EVIDENCE FOR THE CLAIM OF EXPENDITURE OR DEDUCTION OR INVESTMENT SHOWN IN THE RETURN OF INCOME FILED U/S. 153A OF THE ACT. ACCORDING TO CIT(A), ONUS WAS ON THE ASSESSEE TO I.T.A NO. 4 57 , 466 TO 468 /RJT /20 15 A.Y. 2009 - 10 TO 2012 - 13 PAGE NO M/S. SURYA DEVELOPE RS VS. DCIT 12 PROVE THAT WHAT WAS STATED IN SEIZED DOCUMENT IS TRUE AND IN THE PRESENT CASE SINCE THE ASSESSEE FAILED TO PRODUCE EVIDENCE IN SUPPORT OF TRANSACTIONS PERTAINING TO SALE OF GOLD, DIAMONDS AND PAINTINGS RECORDED IN SEIZED DOCUMENTS INVENTORISED AS RM - 1 AND RM - 2 AND HENCE, REJECTED BY CIT(A). FIRST, ALL WE HAVE TO GO THR OUGH THE PROVISIONS OF SECTION 292C OF THE ACT. '292C. [(1 )] WHERE ANY BOOKS OF ACCOUNT, OTHER DOCUMENTS, MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING ARE OR IS FOUND IN THE POSSESSION OR CONTROL OF ANY PERSON IN THE COURSE OF A SEARCH UND ER SECTION 132 [OR SURVEY UNDER SECTION 1 33A], IT MAY, IN ANY PROCEEDING UNDER THIS ACT, BE PRESUMED (I)THAT SUCH BOOKS OF ACCOUNT, OTHER DOCUMENTS, MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING BELONG OR BELONGS TO SUCH PERSON; (IT) THAT THE CONTENTS OF SUCH BOOKS OF ACCOUNT AND OTHER DOCUMENTS ARE TRUE; AND (III)THAT THE SIGNATURE AND EVERY OTHER PART OF SUCH BOOKS OF ACCOUNT AND OTHER DOCUMENTS WHICH PURPORT TO BE IN THE HANDWRITING OF ANY PARTICULAR PERSON OR WHICH MAY REASONABLY BE ASS UMED TO HAVE BEEN SIGNED BY, OR TO BE IN THE HANDWRITING OF, ANY PARTICULAR PERSON, ARE IN THAT PERSON'S HANDWRITING, AND IN THE CASE OF A DOCUMENT STAMPED, EXECUTED OR ATTESTED, THAT IT WAS DULY STAMPED AND EXECUTED OR ATTESTED BY THE PERSON BY WHOM IT PU RPORTS TO HAVE BEEN SO EXECUTED OR ATTESTED.] {(2) WHERE ANY BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ASSETS HAVE BEEN DELIVERED TO THE REQUISITIONING OFFICER IN ACCORDANCE WITH THE PROVISIONS OF SECTION J32A THEN, THE PROVISIONS OF SUB - SECTION (I) SHALL APPLY AS IF SUCH BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ASSETS WHICH HAD BEEN TAKEN INTO CUSTODY FROM THE PERSON REFERRED TO IN CLAUSE (A) OR CLAUSE (B) OR CLAUSE (C), AS THE CASE MAY BE, OF SUB - SECTION (1) OF SECTION 1 32A, HAD BEEN FOUND IN THE POSSESSION OR CON TROL OF THAT PERSON IN THE COURSE OF A SEARCH UNDER SECTION 13. WE FIND THAT IN THE INSTANT CASE SEARCH AND SEIZURE OPERATION U/S. 132(1) OF THE ACT WAS CONDUCTED IN THE FORT GROUP OF CASES, INCLUDING ASSESSEE ON 28.2.2008 AND FROM THE RESIDENTIAL PREMISE S OF THE ASSESSEE I.E. BALLYGUNGE PARK, KOLKATA - 19, CASH, JEWELLERY, SILVER UTENSILS AND VARIOUS DOCUMENTS MARKED AS ANNEXURE RM - 1 TO RM - 5 WAS FOUND AND SEIZED. ON THE BASIS OF THESE SEIZED DOCUMENTS MARKED AS RM - 1 TO RM - 5, ASSESSEE WAS ASKED TO MAKE DISCL OSURE OF RS.9.02 CR. IN RESPECT TO ON MONEY RECEIPTS OF FORT I.T.A NO. 4 57 , 466 TO 468 /RJT /20 15 A.Y. 2009 - 10 TO 2012 - 13 PAGE NO M/S. SURYA DEVELOPE RS VS. DCIT 13 PROJECTS PVT. LTD., A PRIVATE LIMITED COMPANY IN WHICH ASSESSEE IS ONE OF THE DIRECTOR. WE FIND THAT THE ASSESSEE'S STATEMENT DURING THE COURSE OF SEARCH, IN RESPECT OF NOTING IN VARIOUS SEIZED D OCUMENTS RECORDED WERE ACCEPTED U/S. 132(4) OF THE ACT. IN THE COURSE OF STATEMENT RECORDED U/S. 132(4) OF THE ACT ON 14.3.2008, ASSESSEE MADE DISCLOSURE OF RS.7.70 CR. ON THE BASIS OF NOTING IN RM - 1 ON ACCOUNT OF CAPITAL GAIN ARISING ON SALE OF DIAMONDS A ND GOLD IN ASSESSMENT YEAR 2008 - 09. WE HAVE PERUSED COPIES OF STATEMENT OF ASSESSEE RECORDED DURING THE COURSE OF SEARCH, WHICH ARE ENCLOSED IN ASSESSEE'S PAPER BOOK AT PAGES 82 TO 111. THE MAIN ISSUE IN THE PRESENT APPEALS REVOLVES AROUND NOTING MADE IN S EIZED DOCUMENTS MARKED RM - 1 AND RM - 2 WHICH ARE COMPUT ER PRINT OUT IN RESPECT OF ASSESSEE'S UNACCOUNTED INVESTMENT IN GOLD, DIAMONDS AND PAINTINGS ETC. UP TO 23.2.2008. RM - 1 IS A NOTE BOOK IN HAND WRITING OF ASSESSEE'S RECORDING ENTRIES UP TO 20.2.2008 AND A LL THESE ENTRIES ARE COMPLETELY REFLECTED IN RM - 1, IF WE COMPARE THESE TWO. WE FIND THAT ASSESSING OFFICER DISBELIEVED PART OF NOTING IN SEIZED DOCUMENTS AND MADE ADDITION IN RESPECT OF NOTING IN DOCUMENT RM - 1 AND RM - 2 OF SALE OF GOLD, DIAMONDS AND PAINTIN GS BY STATING THAT ACTUALLY IT IS INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES. THE ASSESSING OFFICER NOTED THAT ASSESSEE WAS IN REAL ESTATE BUSINESS WHERE ON MONEY RECEIPTS WERE RAMPANT AND THESE RECEIPTS WERE NOTHING BUT ON MONEY NOTED AS SALE CONSIDE RATION OF GOLD AND DIAMONDS AND TO EXPLAIN AWAY UNRECORDED CASH PAYMENTS TOWARDS INVESTMENT. THE C1T(A) ALSO CONFIRMED THE ACTION OF ASSESSING OFFICER BUT ENTIRELY ON DIFFERENT GROUND BY APPLYING THE PROVISIONS OF SECTION 292C AS WELL AS DECISION OF HON'BL E APEX COURT IN THE CASE OF P. R. METRANI (SUPRA). FIRST OF ALL IT IS TO BE NOTED THAT THE DECISION OF HON'BLE APEX COURT IN THE CASE OF P. R. METRANI (SUPRA) HAS DISCUSSED THE ISSUE OF PRESUMPTION U/S. 132(4A) OF THE ACT, AND ACCORDING TO HON'BLE APEX COU RT THIS WAS A REBUTTABLE PRESUMPTION. THE HON'BLE APEX COURT IN THE CASE OF P. R. METRANI (SUPRA) HAS DISCUSSED THE FACTS AS UNDER: 'P. R. METRANI AND Y. R. METRANI WERE TWO BROTHERS AND ARE THE MEMBERS OF THE JOINT HINDU FAMILY. P. R. METRANI (HUF) ASSESS EE WAS A PARTNER IN A FIRM CALLED A/A. R. N. METRANI AND SONS. Y. R. METRANI WAS ALSO A PARTNER IN THIS FIRM. P. R. METRANI AS WELL AS Y. R. METRANI HAVE DIED DURING THE PENDENCY OF THESE CASES. A SEARCH OF THE RESIDENTIAL PREMISES RANGANATHA NI/AYA WAX CO NDUCTED BY THE INCOME - TAX, CENTRAL EXCISE AND CUSTOMS DEPARTMENTS ON JUNE 30, 1982 AND JULY 1, 1982, AND AS WELL I.T.A NO. 4 57 , 466 TO 468 /RJT /20 15 A.Y. 2009 - 10 TO 2012 - 13 PAGE NO M/S. SURYA DEVELOPE RS VS. DCIT 14 AS THE BUSINESS PREMISES WHERE THE BUSINESS OF THE FIRM WAS BEING CONDUCTED.THE RESIDENTIAL PREMISES OF J. J. BAKALE, NEPHEW OF P. R. METRANI W ERE ALSO SEARCHED. THE SEARCH BROUGHT TO SURFACE UNACCOUNTED MONEY, GOLD BISCUITS, GOLD JEWELLERY, SILVER ETC. BESIDES SOME IMPORTANT DOCUMENTS. FOR THE PURPOSE OF ASSESSMENT FOR THE ASSESSMENT YEARS 1981 - 82 AND 1982 - 83 THREE DOCUMENTS WERE FOUND TO BE REL EVANT BY THE ASSESSING OFFICER AND THEY WERE MARKED AS PRM - 1, PRM - 7 AND PRM - 13 AT THE TIME OF SEARCH AND SEIZURE, WHICH WERE SEIZED FROM THE RESIDENTIAL PREMISES NAMELY, 'RANGANATHA NILAYA'. THE STATEMENT OF J. J. BAKALE WAS RECORDED AT THE TIME OF SEARCH. P. R. METRANI WAS AWAY TO RAJASTHAN ON A BUSINESS TOUR. HE WAS EXAMINED AFTER HIS RETURN TO HUBLI ON JULY 13, 1982. HE DENIED THE POSSESSION OF PRM - 1, PRM - 13 AND PRM - 14. HE ALSO DENIED THAT THESE PAPERS CONTAIN ANY WRITING MADE BY HIM. THE ASSESSING AUTHO RITY MADE A SUMMARY ADJUDICATION ORDER UNDER SECTION 132(5) OF THE INCOME - TAX ACT, 1961 (FOR SHORT 'THE ACT'). HE MADE CERTAIN ADDITIONS AND RETAINED THE ASSETS SEIZED. NOTICE UNDER SECTION 139(2) DATED SEPTEMBER 17, 1982 FOR THE ASSESSMENT YEAR 1982 - 83 W AS SERVED ON THE ASSESSEE ON SEPTEMBER 21, 1982. THE APPELLANT DECLARED A TOTAL INCOME OF RS. 46,200 AND A NET AGRICULTURAL INCOME OF RS. 6,000. NOTICES UNDER SECTIONS 143(2) AND 142(1) WERE ISSUED ON SEVERAL DATES. THE APPELLANT APPEARED BEFORE THE AUTHOR ITIES ON SEVERAL DATES AND ASSESSMENT CAME TO BE COMPLETED. THE FOLLOWING ADDITIONS WERE MADE IN RESPECT OF THE ASSESSMENT YEAR 1982 - 83 : - (I) INCOME FROM UNDISCLOSED SOURCES AS DISCUSSED IN PARA. 3.2 AS PER PRM - 1 AND PRM - 7 RS. 28,67, 920 (II) INCOME FROM UNDISCLOSED SOURCES AS DISCUSSED IN PARA. 3.3 I.E., PRMI3 RS. 6,66,690 (II I) INVESTMENT IN DURGADABAILU BUILDING AT HUBLI AS PER PARA 5 BEING 50% OF RS. 5,24,200 RS. 2,62 ,100 (IV) UNEXPLAINED EXPENDITURE UNDER SECTION 69C RS. 8,33,525 THE ASSESSMENT FOR THE YEAR 1981 - 82 WAS COMPLETED AFTER MAKING AN ADDITION OF RS. 19,93, 117. I.T.A NO. 4 57 , 466 TO 468 /RJT /20 15 A.Y. 2009 - 10 TO 2012 - 13 PAGE NO M/S. SURYA DEVELOPE RS VS. DCIT 15 THE ASSESSING AUTHO RITY MADE AN ASSESSMENT FOR THE CONSTRUCTION OF A COMMERCIAL COMPLEX IN DURGADABAILU, THE INVESTMENT FOR WHICH WAS DECLARED AT RS. 5,55,000 FOR THE ENTIRE BUILDING. HALF OF THE BUILDING BELONGED TO P. R. METRANI AND OTHER HALF TO Y. R. METRANI. THE DEPARTM ENT HAD SENT THE VALUATION OFFICER FOR ENQUIRY REGARDING THE COST OF BUILDING AND IT WAS FIXED BY THE DEPARTMENT VALUATION OFFICER AT RS. 5,83,000. THE ASSESSING AUTHORITY HOWEVER DID NOT ACCEPT THE VALUATION MADE BY THE VALUATION OFFICER AND HELD THAT THE TOTAL INVESTMENT ON THE BUILDING WAS RS.6,45,809. A SOURCE TO THE EXTENT OF RS. 1,21,627 WAS ACCEPTED. THE BALANCE WAS ROUNDED OFF TO RS.5,24,200. HALF OF THIS WAS ADDED TO THE ASSESSMENT OF P. R. METRANI (HUF) AND OTHER HALF WAS ADDED IN THE ASSESSMENT O F Y. R. METRANI. THE APPELLANT BEING AGGRIEVED FILED APPEALS BEFORE THE COMMISSIONER (APPEALS). THE COMMISSIONER (APPEALS) BY SEPARATE ORDER DISPOSED OF THE APPEALS RELATING TO THE ASSESSMENT YEARS 1981 - 82 AND 1982 - 83. HE EXAMINED THE ISSUE INCLUDING CERT AIN CREDITS, AND, ON SEPTEMBER 19, 1988 CONFIRMED THE ADDITIONS BARRING THE SUM OF RS. 36,000 FOR THE ASSESSMENT YEAR 1982 - 83. THE ORDERS OF THE ASSESSING AUTHORITY AS WELL AS THE COMMISSIONER (APPEALS) ARE BASED ON THE PRESUMPTIONS IN TERMS OF SECTION 132 (4A) OF THE ACT. IT WAS HELD THAT THE PRESUMPTIONS UNDER SECTION 132(4A) WERE NOT CONFINED TO THE ORDERS PASSED UNDER SECTION 132 ONLY, BUT, WERE AVAILABLE FOR FRAMING THE REGULAR ASSESSMENTS AS WELL. THE ASSESSEE BEING AGGRIEVED FILED A FURTHER APPEAL BE FORE THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE (FOR SHORT 'THE TRIBUNAL'). THE TRIBUNAL RELYING UPON THE JUDGMENT OF THE ALLAHABAD HIGH COURT IN THE CASE OF PUSHKAR NARAIN SARRAFV. CIT [1990] 183 ITR 388, ON THE SCOPE OF SECTION 132(4A) HELD THAT THE PR ESUMPTIONS UNDER SECTION 132(4A) ARE CONFINED TO THE FRAMING OF THE ORDER UNDER SECTION 132(5) ONLY AND ARE NOT AVAILABLE FOR FRAMING THE REGULAR ASSESSMENT. THE TRIBUNAL ACCEPTED THE APPEALS, SET ASIDE THE ORDERS PASSED BY THE COMMISSIONER (APPEALS) AS WE LL AS THE ASSESSING AUTHORITY EXCEPT TO THE EXTENT OF ADDITION OF RS.2,62,100. AT THE INSTANCE OF THE REVENUE, THE TRIBUNAL REFERRED THE FOLLOWING TWO QUESTIONS FOR BOTH THE ASSESSMENT YEARS 1981 - 82 AND 1982 - 83 FOR THE OPINION OF THE HIGH COURT (PAGE 247): I.T.A NO. 4 57 , 466 TO 468 /RJT /20 15 A.Y. 2009 - 10 TO 2012 - 13 PAGE NO M/S. SURYA DEVELOPE RS VS. DCIT 16 '(1 ) WHETHER THE INCOME - TAX. APPELLATE TRIBUNAL WAS CORRECT IN LAW IN HOLDING THAT THE PRESUMPTION UNDER SUB - SECTION (4A) OF SECTION 132 OF THE INCOME - TAX ACT, 1961, IS ONLY FOR THE LIMITED PURPOSE OF PASSING AN ORDER UNDER SUB - SECTION (5) OF THE SAID SEC TION ? (2) WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE INCOME - TAX APPELLATE TRIBUNAL WAS RIGHT IN LAW IN HOLDING THAT THE DOCUMENTS SEIZED FROM THE RESIDENTIAL PREMISES OF THE ASSESSEE HINDU UNDIVIDED FAMILY WERE NOT OF THE SAID HINDU U NDIVIDED FAMILY AND THE ENTRIES THEREIN DID NOT PERTAIN TO IT, PARTICULARLY WHEN THE INCOME - TAX APPELLATE TRIBUNAL ITSELF HAS ACCEPTED THAT THE ENTRIES IN THE SAID DOCUMENTS CULMINATING IN. ADDITION OF RS. 2,62,100 IN THE ASSESSMENT FOR THE ASSESSMENT YEAR 1982 - 83 PERTAINED TO THE ASSESSEE - HINDU UNDIVIDED FAMILY AND UPHELD THE SAID ADDITION ? ' AT THE INSTANCE OF THE ASSESSEE, THE TRIBUNAL REFERRED THE FOLLOWING TWO QUESTIONS FOR THE OPINION OF THE HIGH COURT (PAGE 249): '(1 ) WHETHER ON THE FACTS THE TRIBUN AL WAS JUSTIFIED IN HOLDING THAT THE APPLICANT HUF WAS LIABLE TO BE TAXED IN RESPECT OF RS. 2,62,100 BEING ALLEGED UNEXPLAINED INVESTMENT IN THE PROPERTY INVOKING THE PROVISIONS OF SECTION 69 OF THE ACT ? (2) ON THE FACTS WHETHER THE TRIBUNAL WAS JUSTIFIED IN HOLDING THAT THE PART OF THE ENTRIES IN THE SEIZED DOCUMENTS COULD BE ATTRIBUTED TO THE APPLICANT HUF WHEN THE APPLICANT HAD DENIED THE KNOWLEDGE OR OWNERSHIP OF THE DOCUMENT?' THE HIGH COURT ANSWERED ALL THE FOUR QUESTIONS IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE. ON QUESTION NO. 1 REGARDING PRESUMPTION UNDER SUB - SECTION (4A) OF SECTION 132 OF THE ACT, IT HAS BEEN HELD THAT THE SAME IS NOT LIMITED TO THE PASSING OF AN ORDER UNDER SUBSECTION (5) OF SECTION 132 ONLY ; THE SAME PRESUMPTION CAN BE RAISED FOR FRAMING THE REGULAR ASSESSMENT AS WELL. THE BENCH HAS RECORDED ITS DISSENT WITH THE VIEW TAKEN BY THE ALLAHABAD HIGH COURT IN PUSHKAR NARAIN SARRAF[/990] 183 ITR 388. ' I.T.A NO. 4 57 , 466 TO 468 /RJT /20 15 A.Y. 2009 - 10 TO 2012 - 13 PAGE NO M/S. SURYA DEVELOPE RS VS. DCIT 17 14. THE HON'BLE APEX COURT HAS FINALLY CONCLUDED AS UNDER: 'SEARCH A ND SEIZURE UNDER SECTION 132 IS A SERIOUS INVASION INTO THE PRIVACY OF A CITIZEN, THEREFORE, IT HAS TO BE CONSTRUED STRICTLY. SUB - SECTION (4A) WAS INSERTED BY THE TAXATION LAWS (AMENDMENT) ACT, 1975, WITH EFFECT FROM OCTOBER I, 1975 TO PERMIT A PRESUMPTION TO BE RAISED IN THE CIRCUMSTANCES MENTIONED THEREIN. BEFORE THE INSERTION OF SUB - SECTION (4A) THE ONUS OF PROVING THAT THE BOOKS OF ACCOUNT, OTHER DOCUMENTS, MONEY, BULLION, JEWELLERY ETC., FOUND IN THE POSSESSION OR CONTROL OF A PERSON IN THE COURSE OF A SEARCH BELONGED TO THAT PERSON WAS ON THE INCOME - TAX DEPARTMENT. SUB SECTION (4A) ENABLES AN ASSESSING AUTHORITY TO RAISE A REBUTTABLE PRESUMPTION THAT SUCH BOOKS OF ACCOUNT, MONEY, BULLION, ETC. BELONGED TO SUCH PERSON ; THAT THE CONTENTS OF SUCH BOOKS O F ACCOUNT AND OTHER DOCUMENTS ARE TRUE, AND, THAT THE SIGNATURES AND EVERY OTHER PART OF SUCH BOOKS OF ACCOUNT AND OTHER DOCUMENTS ARE SIGNED BY SUCH PERSON OR ARE IN THE HANDWRITING OF THAT PARTICULAR PERSON. RAISING OF SUCH PRESUMPTION HAS BEEN ENACTED, BY THE LEGISLATURE TO ENABLE THE ASSESSING AUTHORITY TO MAKE A PROVISIONAL ADJUDICATION WITHIN THE TIME FRAME PRESCRIBED UNDER SECTION 132. OTHERWISE IT MAY NOT BE POSSIBLE TO DO SO. THE OBJECT OF INTRODUCTION OF SECTION 132 IS TO PREVENT THE EVASION OF T AX, I.E., TO UNEARTH HIDDEN OR UNDISCLOSED INCOME OR PROPERTY AND BRING IT TO ASSESSMENT. IT IS NOT MERELY AN INFORMATION OF UNDISCLOSED INCOME BUT ALSO TO SEIZE MONEY, BULLION, ETC., REPRESENTING THE UNDISCLOSED INCOME AND TO RETAIN THEM FOR THE PURPOSES OF REALIZATION OF TAXES, PENALTIES ETC. SEARCH AND SEIZURE IS A SERIOUS INVASION INTO THE PRIVACY OF THE PERSON. SECTION 132 WHICH IS A COMPLETE CODE B \ ITSELF PROVIDES THAT THE MONEY, BULLION OR THE BOOKS OF ACCOUNT ETC. SHOULD NOT BE RETAINED UNNECESSARI LY AND THAT THE PROVISIONAL ASSESSMENT MADE UNDER SECTION 132 FOR THE PURPOSE OF RETENTION OF THE BOOKS IS PASSED WITHIN A SPECIFIED TIME IN ACCORDANCE WITH LAW. IT PROVIDES THAT THE BOOKS OF ACCOUNT, MONEY AND BULLION WHICH ARE NOT REQUIRED ARE NOT RETAIN ED UNNECESSARILY THEREBY CAUSING HARASSMENT TO THE PERSON CONCERNED. IN ORDER TO SEE THAT THE ASSESSMENT ORDER IS FRAMED WITHIN THE TIME FRAME PROVIDED UNDER SECTION 132, THE LEGISLATURE PROVIDED FOR A REBUTTABLE PRESUMPTION TO BE RAISED I.T.A NO. 4 57 , 466 TO 468 /RJT /20 15 A.Y. 2009 - 10 TO 2012 - 13 PAGE NO M/S. SURYA DEVELOPE RS VS. DCIT 18 AGAINST THE PERSON FROM WHOSE POSSESSION AND CONTROL THE BOOKS OF ACCOUNT, MONEY, BULLION, ETC. ARE SEIZED SO THAT THE ORDER CAN BE PASSED WITHIN THE TIME FRAME PROVIDED UNDER SECTION 132. A PRESUMPTION IS AN INFERENCE OF FACT DRAWN FROM OTHER KNOWN OR PROVED FACTS. IT IS A RULE OF LAW UNDER WHICH COURTS ARE AUTHORIZED TO DRAW A PARTICULAR INFERENCE FROM A PARTICULAR FACT. IT IS OF THREE TYPES, (I) 'MAY PRESUME', (II) 'SHALL PRESUME' AND (HI) 'CONCLUSIVE PROOF'. 'MAY PRESUME' LEAVES IT TO THE DISCRETION OF THE COURT TO MAKE THE PRESUMPTION ACCORDING TO THE CIRCUMSTANCES OF THE CASE. 'SHALL PRESUME ' LEAVES NO OPTION WITH THE COURT NOT TO MAKE THE PRESUMPTION. THE COURT IS BOUND TO TAKE THE FACT AS PROVED UNTIL EVIDENCE IS GIVEN TO DISPROVE IT. IN THIS SENSE SUCH PRESUMPTION IS ALSO REBUTTABLE. 'CONCLUSIVE PROOF' GIVES AN ARTIFICIAL PROBATIVE EFFECT BY THE LAW TO CERTAIN FACTS. NO EVIDENCE IS ALLOWED TO HE PRODUCED WITH A VIEW TO COMBATTING THAT EFFECT. IN THIS SENSE, THIS IS AN IRREBUTTABLE PRESUMPTION. THE WORDS IN SUB - SECT ION (4A) ARE 'MAY BE PRESUMED'. THE PRESUMPTION UNDER SUB SECTION (4A), THEREFORE, IS A REBUTTABLE PRESUMPTION. THE FINDING RECORDED BY THE HIGH COURT IN THE IMPUGNED JUDGMENT THAT THE PRESUMPTION UNDER SUB - SECTION (4A) IS AN IRREBUTTABLE PRESUMPTION IN SO FAR AS IT RELATES TO THE PASSING OF AN ORDER UNDER SUB SECTION (5) OF SECTION 132 AND A REBUTTABLE PRESUMPTION FOR THE PURPOSE OF FRAMING A REGULAR ASSESSMENT IS NOT CORRECT. THERE IS NOTHING EITHER IN SECTION 132 OR ANY OTHER PROVISIONS OF THE ACT WHICH COULD WARRANT SUCH AN INFERENCE OR FINDING. THE PRESUMPTION, UNDER SUB - SECTION (4A) WOULD NOT BE AVAILABLE FOR THE PURPOSE OF FRAMING A REGULAR ASSESSMENT. THERE IS NOTHING EITHER IN SECTION 132 OR ANY OTHER PROVISION OF THE ACT TO INDICATE THAT THE PRESU MPTION PROVIDED UNDER SECTION 132 WHICH IS A SELF - CONTAINED CODE FOR SEARCH AND SEIZURE AND RETENTION OF BOOKS, ETC. CAN BE RAISED FOR THE PURPOSES OF FRAMING OF THE REGULAR ASSESSMENT AS WELL. WHEREVER THE LEGISLATURE INTENDED THE PRESUMPTION TO CONTINUE, IT HAS PROVIDED SO. REFERENCE MAY MADE TO SECTION 278D OF THE ACT WHICH PROVIDES THAT WHERE DURING THE COURSE OF ANY SEARCH UNDER SECTION 132, ANY MONEY, BULLION, JEWELLERY I.T.A NO. 4 57 , 466 TO 468 /RJT /20 15 A.Y. 2009 - 10 TO 2012 - 13 PAGE NO M/S. SURYA DEVELOPE RS VS. DCIT 19 OR OTHER VALUABLE ARTICLES OR THINGS OR ANY BOOKS OF ACCOUNT ETC. ARE TENDERED BY THE PROSECUTION IN EVIDENCE AGAINST THE PERSON CONCERNED, THEN THE PROVISIONS OF SUB - SECTION (4A) OF SECTION 132 SHALL, SO FAR AS MAY BE, APPLY IN RELATION TO SUCH ASSETS OR BOOKS OF ACCOUNT OR OTHER DOCUMENTS. THIS CLEARLY SPELLS OUT THE INTENTION OF THE LEGISLATURE THAT WHEREVER THE LEGISLATURE INTENDED TO CONTINUE THE PRESUMPTION UNDER SUB - SECTION (4A) OF SECTION 132, IT HAS PROVIDED SO. IT HAS NOT BEEN PROVIDED THAT THE PRESUMPTION AVAILABLE UNDER SECTION 132 (4A) WOULD BE AVAILABLE FOR FRAMING THE REGU LAR ASSESSMENT UNDER SECTION 143 AS WELL. THIS IS ALSO EVIDENT FROM THE FACT THAT WHEREAS THE LEGISLATURE UNDER SECTION 132(4) HAS PROVIDED THAT THE BOOKS OF ACCOUNT, MONEY, BULLION, JEWELLERY AND OTHER VALUABLE ARTICLES OR THINGS AND ANY STATEMENT MADE B V SUCH PERSON DURING EXAMINATION MAY THEREAFTER BE USED AS EVIDENCE IN ANY OTHER PROCEEDINGS UNDER THE ACT IT HAS NOT PROVIDED SO UNDER SUB - SECTION (4A) OF SECTION 132. IT DOES NOT PROVIDE THAT THE PRESUMPTION UNDER SECTION 132(4A) WOULD BE AVAILABLE WHILE FRAMING THE REGULAR ASSESSMENT OR FOR THAT MATTER UNDER ANY OTHER PROCEEDING UNDER THE ACT EXCEPT UNDER SECTION 278D. SECTION 132 BEING A COMPLETE CODE IN ITSELF CANNOT INTRUDE INTO ANY OTHER PROVISION OF THE ACT. SIMILARLY, OTHER PROVISIONS OF THE ACT CA NNOT INTERFERE WITH THE SCHEME OR THE WORKING OF SECTION 132 OR ITS PROVISIONS. THE PRESUMPTION UNDER SECTION 132(4A) IS AVAILABLE ONLY IN REGARD TO THE PROCEEDINGS FOR SEARCH AND SEIZURE AND FOR THE PURPOSE OF RETAINING THE ASSETS UNDER SECTION 132(5) AN D THEIR APPLICATION UNDER SECTION 132B. IT IS NOT AVAILABLE FOR ANY OTHER PROCEEDING EXCEPT WHERE IT IS PROVIDED THAT THE PRESUMPTION UNDER SECTION 132(4A) WOULD BE AVAILABLE. ' 15. WE FIND THAT THE TERM 'USED' IN THE PROVISION OF SECTION 292C OF THE ACT 'MAY BE PRESUMED' IS DISCUSSED, BUT IN THE CONTEXT OF SECTION 132(4) OF THE ACT, BY HON'BLE APEX COURT IN THE CASE OF P. R. METRANI (SUPRA) AND SAID TERM IMPLIES THAT THE PRESUMPTION IS REBUTTABLE. THE TERM 'REBUT' MEANS TO DISPROVE. IN OTHER WORDS, UNLESS CONTRARY IS PROVED, WHAT IS STATED IN THE SEIZED DOCUMENTS HAS TO BE PRESUMED TO BE TRUE AND THUS, THE PROVISIONS OF SECTION 292C OF THE ACT DOES NOT CONFER DISCRETIONARY POWER ON THE I.T.A NO. 4 57 , 466 TO 468 /RJT /20 15 A.Y. 2009 - 10 TO 2012 - 13 PAGE NO M/S. SURYA DEVELOPE RS VS. DCIT 20 DEPARTMENT TO PRESUME OR NOT TO PRESUME THE CORRECTNESS OF SEIZED DOCUM ENTS HELD BY CIT(A). WE FIND THAT CIT(A) OBSERVED THAT SECTION 292C OF THE ACT IS NOT FOR THE BENEFIT OF THE ASSESSEE BUT IT IS FOR BENEFIT OF DEPARTMENT. WE ARE OF THE VIEW THAT THE PROVISION WILL EQUALLY APPLY TO BOTH ASSESSEE AS WELL AS DEPARTMENT AND S ECTION 292C OF THE ACT ONLY CREATES A LEGAL FICTION, WHEREBY IN CASE OF SEARCH AND SEIZURE, CONTENTS OF SEIZED MATERIAL ARE PRESUMED TO BE TRUE UNLESS REBUTTED BY THE PARTY CLAIMING CONTRARY. NOW, WE ARE OF THE VIEW THAT ONUS OF REBUTTING THE PRESUMPTION U /S. 292C OF THE ACT IS ON THE PARTY CLAIMING OTHERWISE, BE IT ASSESSEE OR REVENUE. IN THE PRESENT CASE BEFORE US, THE SEIZED DOCUMENTS RM - 1 AND RM - 2 WERE FOUND FROM THE POSSESSION AND CONTROL OF THE ASSESSEE. IN PRESENT CASE, SINCE SEIZED DOCUMENTS RM/1 & RM/2 WERE FOUND FROM POSSESSION AND CONTROL OF THE ASSESSEE DURING THE COURSE OF SEARCH IN HIS CASE AND BY LEGAL FICTION, A PRESUMPTION U/S 292C HAD TO BE DRAWN THAT THE SAID DOCUMENTS BELONGED TO THE ASSESSEE AND THE CONTENTS THEREOF WERE TRUE UNLESS DISP ROVED BY COGENT EVIDENCE. THE ONUS TO PROVE THAT WHAT WAS APPARENT FROM THESE BOOKS WAS NOT REAL WAS ON THE PARTY WHICH CLAIMED IT TO B E SO. THE DEPARTMENT CLAIMED THAT THE CONTENTS OF RM/ 1 & RM/2 FOUND FROM THE POSSESSION AND CONTROL OF THE ASSESSEE IN CO URSE OF SEARCH WERE INCORRECT. THUS, THE ONUS WAS ON THE DEPARTMENT, TO BRING ON RECORD SOME ACCEPTABLE EVIDENCE TO PROVE THAT WHAT WAS STATED IN THE SEIZED DOCUMENTS DID NOT DEPICT THE ACTUAL STATE OF AFFAIRS. THE AO AND CIT(A) FAILED TO DISCHARGE SUCH ON US BY BRINGING ON RECORD SOME COGENT EVIDENCE TO DISPROVE NOTING IN THE SEIZED PAPERS. ON THE CONTRARY, CIT(A) AND AO TRIED TO SHIFT ONUS OF PROVING ENTRIES IN SEIZED BOOKS/ PAPERS ON THE ASSESSEE IN CONTRADICTION TO PROVISIONS OF SECTION 292C OF THE ACT. WE ARE OF THE VIEW THAT SEIZED DOCUMENTS RM/ 1 & RM/2 CLEARLY DEPICTING THE PURCHASE AND SALE OF GOLD, DIAMONDS AND PAINTINGS AND INVESTMENT OF THE SALE PROCEEDS IN PROPERTY AND SHARES HAD TO BE ACCEPTED AS SUCH UNLESS SOME EVIDENCE OR MATERIAL WAS BROUGHT ON RECORD BY THE REVENUE TO SHOW THAT WHAT WAS STATED IN THE SEIZED DOCUMENTS WAS NOT CORRECT. CIT(A)'S OPINION THAT ONUS WAS ON THE ASSESSEE TO PROVE THAT WHAT WAS STATED IN THE SEIZED DOCUMENT WAS TRUE. SUCH AN INTERPRETATION WOULD RENDER THE DEEMING PR OVISIONS OF SECTION 292C OTIOSE AND PRESUMPTION AS TO THE CORRECTNESS OF SEIZED DOCUMENTS IS AUTOMATIC UNDER SECTION 292C OF THE ACT UNLESS THE CONTRARY IS PROVED AND AS SUCH, THE ASSESSEE WAS NOT LEGALLY REQUIRED TO SUBSTANTIATE THE SEIZED DOCUMENTS WITH SUPPORTING EVIDENCE. WHERE THE STATUTE PROVIDES A DEEMING PROVISION, WHAT IS PRESCRIBED IS TO BE DEEMED I.T.A NO. 4 57 , 466 TO 468 /RJT /20 15 A.Y. 2009 - 10 TO 2012 - 13 PAGE NO M/S. SURYA DEVELOPE RS VS. DCIT 21 WITHOUT SEEKING CORROBORATIVE EVIDENCE. WE FIND FROM A BARE PERUSAL OF RM/ 1 & RM/2, WHICH WOULD REVEAL THAT SEIZED DOCUMENTS HAVE BEEN MAINTAINED IN CO NSIDERABLE DETAILS SUCH AS EXACT CARATAGE OF DIAMONDS, THE WEIGHT OF GOLD AND THE RATES OF PURCHASES AND SALES, THE DATES OF PURCHASE AND SALES HAVE BEEN MENTIONED. FURTHER, IN RESPECT OF PAINTINGS, MINUTE DETAILS SUCH AS THE EXACT SIZE OF THE PAINTINGS AN D THE NAMES OF THE ARTISTS HAVE ALSO BEEN MENTIONED IN THE SEIZED DOCUMENTS. THUS, THESE ARE SPEAKING DOCUMENTS AND NOT DUMB DOCUMENTS. A DUMB DOCUMENT IS A DOCUMENT WHICH DOES'NT SPEAK FOR ITSELF AND NOT A SELF EXPLANATORY AND DETAILED DOCUMENT LIKE PRESE NT ONE. FURTHER, GOING THROUGH THESE DOCUMENTS IT IS REVEALED THAT THESE DOCUMENTS ALSO RECORD SEVERAL REGULAR TRANSACTIONS OF THE ASSESSEE WHICH STAND DULY DISCLOSED IN REGULAR BOOKS OF ACCOUNT. THE ASSESSEE HAS CITED FEW EXAMPLES IN HIS WRITTEN SUBMISSIO NS OF TRANSACTIONS OF DISCLOSED/ REGULAR NATURE FOUND RECORDED IN RM/ 1 ARE AS UNDER: DATE PARTICULARS OF TRANSACTIONS 02.12.2002 PAYMENT OF RS. 12,65,322/ - IN THE BOOKS OF RAMANI PROJECTS ON ACCOUNT OF REGISTRATION, STAMP DUTY ETC. TO REGISTRY OFFICE 15.02.2002 PAYMENT OF RS. 11,15,514/ - IN THE BOOKS OF RAMANI PROJECTS TO KMC 30.03.2006 CASH WITHDRAWN OF RS. 16,00,000/ - AND RS. 25,00,000/ - FROM ANDHRA BANK BELONGING TO SALASAR MAHANIRMAN PVT. LTD SIMILARLY SEVERAL OTHER NOTING PERTAINING TO WITHDR AWAL OF CASH FROM THE REGULAR BANK ACCOUNTS OF VARIOUS COMPANIES, PAYMENT OF CASH ON ACCOUNT OF VARIOUS PROPERTIES ACQUIRED BY VARIOUS COMPANIES DULY RECORDED IN THE BOOKS OF THOSE COMPANIES ETC. WERE ALSO RECORDED IN RM/ 1 & RM/2. ALL THESE ENTRIES WERE V ERIFIED FROM REGULAR BOOKS OF ACCOUNT AND FOUND TO BE CORRECT AND ACCEPTED AS SUCH BY THE DEPARTMENT. THIS ALSO FORTIFIES THE FACT THAT RM/ 1 & RM/2 CONTAINED GENUINE ENTRIES OF THE APPELLANT AND WERE NOT DUMB DOCUMENTS. 16. WE FURTHER FIND THAT REVENUE D ID NOT MAKE ANY EFFORT TO CONTROVERT THE CORRECTNESS OF THE NOTING IN THE SEIZED DOCUMENTS. REVENUE, BOTH AUTHORITIES BELOW, DID NOT DOUBT THE RATES AT WHICH GOLD, I.T.A NO. 4 57 , 466 TO 468 /RJT /20 15 A.Y. 2009 - 10 TO 2012 - 13 PAGE NO M/S. SURYA DEVELOPE RS VS. DCIT 22 DIAMONDS AND PAINTINGS WERE PURCHASED AND SOLD BY THE ASSESSEE AND WERE NOT PROVED TO BE UNF EASIBLE OR IMPRACTICABLE. LOWER AUTHORITIES FAILED TO PROVE A SINGLE INSTANCE WHERE SALE PROCEEDS OF DIAMONDS, GOLD OR PAINTINGS ACTUALLY REPRESENTED 'ON - MONEY' OR SOME OTHER FORM OF UNDISCLOSED RECEIPT AND IN THE ABSENCE OF COGENT EVIDENCE EXPRESS NOTING IN THE SEIZED DOCUMENTS COULD NOT BE ARBITRARILY DISREGARDED AND NO ADDITIONS COULD BE MADE SOLELY ON THE BASIS OF SURMISES AND CONJECTURES. EVEN SEIZED DOCUMENTS COULD NOT BE OUT - RIGHTLY REJECTED AS DUMB DOCUMENTS WITHOUT DISPROVING THE SAME. IT IS ALSO A FACT THAT SEIZED PAPERS WERE FINDINGS OF SEARCH OPERATIONS CARRIED OUT BY THE DEPARTMENT AND NOT PAPERS SUBMITTED BY THE ASSESSEE SUO MOTO IN COURSE OF NORMAL ASSESSMENT WHICH REQUIRED SUBSTANTIATION. THESE PAPERS WERE PART OF DEPARTMENT'S EVIDENCE UNEART HED AS A RESULT OF SEARCH CARRIED OUT BY THE DEPARTMENT, AND THUS, THE SAME WERE TO BE TAKEN AT FACE VALUE UNLESS CONTRARY IS PROVED. THE SAID PAPERS WERE NOT MEANT FOR PRODUCTION BEFORE THE DEPARTMENT BUT FOR PERSONAL INFORMATION OF THE ASSESSEE AND AS SU CH, COULD NOT HAVE BEEN UNTRUE OR FABRICATED. THEREFORE, IT WAS HIGHLY ILLOGICAL ON THE PART OF THE DEPARTMENT TO ASSUME THAT THE SAID PAPERS HAD BEEN PURPOSELY PREPARED BY THE ASSESSEE TO DEFRAUD THE DEPARTMENT. AS REGARDS CIT(A)'S CONTENTION THAT NO STOC K OF GOLD, DIAMONDS OR PAINTINGS WERE FOUND IN COURSE OF SEARCH AT THE RESIDENTIAL PREMISES WE ARE OF THE VIEW THAT MOST OF THE GOLD, DIAMONDS AND PAINTINGS WERE SOLD PRIOR TO SEARCH ACTION AND AS SUCH CONSIDERABLE STOCK OF AFORESAID ITEMS WERE NOT REMAINI NG AT THE TIME OF SEARCH. EVEN DURING THE COURSE OF SEARCH THE ASSESSEE IN REPLY TO QUESTION NO. 8 OF HIS STATEMENT RECORDED ON OATH U/S 132(4) ON 14.03.2008, PAGES 101 TO 102 OF ASSESSEE'S PAPER BOOK REFERRED BY LD. COUNSEL, WHEREIN HE STATED THAT THE GOL D AFTER PURCHASE WAS KEPT AT VARIOUS LOCATION AND THIS EXPLAINS THE REASON WHY THE REMAINING 2 KGS OF GOLD WAS NOT FOUND IN COURSE OF SEARCH AT THE RESIDENTIAL PREMISE OF THE ASSESSEE. EVEN DURING THE COURSE OF SEARCH, IN REGARDS PAINTINGS, ASSESSEE ADMITT ED VIDE QUESTION NO. 15 ON THE DATE OF SEARCH THAT THE SAME WERE ON DISPLAY AT HIS RESIDENCE AND THE SAME QUESTION NO. 15, PAGES 104 - 105 OF ASSESSEE'S PAPER BOOK, IS REPRODUCED AS UNDER: 'ANS 15. I AM FOND OF PAINTINGS AND HAVE BEEN COLLECTING THEM FOR MY PERSONAL PURPOSE TO DISPLAY IN MY RESIDENCE FROM YEAR 1993. I GOT BORED OF HAVING THE SAME PAINTINGS IN THE HOUSE FOR SO LONG AND THEREFORE DECIDED TO SELL THE OLD ONES AND I.T.A NO. 4 57 , 466 TO 468 /RJT /20 15 A.Y. 2009 - 10 TO 2012 - 13 PAGE NO M/S. SURYA DEVELOPE RS VS. DCIT 23 PURCHASED NEW ONES TO DISPLAY IN THE RESIDENCE WHICH WERE ALSO ON DISPLAY IN THE R ESIDENCE ON THE DATE OF SEARCH IN VIEW OF THESE FACTS, WE ARE OF THE OPINION THAT RM/1 AND RM/2 WAS A DAY TO DAY ACCOUNT PREPARED BY ASSESSEE AND DISCOVERED AS A RESULT OF SEARCH AND THE CONTENTS THEREIN HAD TO BE PRESUMED TO BE TRUE U/S 292C UNLESS PROVE D OTHERWISE. THE CIT(A) REJECTED THE CLAIM OF THE ASSESSEE THAT THIS IS NOT A AUTHENTICATED DOCUMENT BUT RELIED ON DOCUMENTS MARKED GB/ 12 IMPOUNDED IN COURSE OF SURVEY IN THE PREMISES OF M/S. FORT PROJECTS (P) LTD AND THE SAID SEIZED DOCUMENTS CONTAINED C ERTAIN DETAILS OF UNRECORDED CASH PAYMENT ON ACCOUNT OF ACQUISITION OF SALT LAKE PROPERTY. SINCE RM/ 1 & RM/2 EXPLAINING THE SOURCE OF ACQUISITION OF SUCH PROPERTY AND ACCOUNTS PREPARED ON THE BASIS OF THE SAME WERE REJECTED BY CIT(A), WE ARE OF THE CONSID ERED OPINION THAT NOTING IN GB - 12 ONLY SUBSTANTIATE/ CONFIRM THE ENTRIES PERTAINING TO INVESTMENT IN PROPERTY AT SALT LAKE NOTED IN RM/ 1 & RM/2. THUS, GB - 12 ONLY FORTIFIES THE CORRECTNESS OF RM/ 1 & RM/2 AND CIT(A) FAILED TO EXPLAIN THE LOGIC BEHIND RELYI NG ON ONE SET OF SEIZED DOCUMENTS MARKED GB - 12 CONTAINING DETAILS OF UNACCOUNTED INVESTMENT IN PROPERTY AND REJECTING THE OTHER SET OF SEIZED DOCUMENTS MARKED RM/ 1 & RM/2 CONTAINING BOTH THE DETAILS OF INVESTMENT IN PROPERTY AS WELL AS EXPLAINING THE SOUR CE THEREOF. CIT(A) FAILED TO APPRECIATE THAT SINCE RM/ 1 & RM/2 WERE FOUND FROM THE POSSESSION AND CONTROL OF THE APPELLANT IN COURSE OF SEARCH CONDUCTED IN THE ASSESSEE'S OWN CASE, PRESUMPTION U/S 292C COULD MORE APTLY BE DRAWN IN RESPECT OF RM/ 1 & RM/2 RATHER THAN DOCUMENTS IMPOUNDED IN COURSE OF SURVEY IN GROUP CASE, I.E. GB - 12. 17. IN VIEW OF ABOVE FACTS, IT IS CLEAR THAT THE DOCUMENTS SEIZED DURING THE COURSE OF SEARCH FROM THE POSSESSION OF ASSESSEE ARE TRUE TILL IT IS PROVED OTHERWISE BY COGENT EVI DENCE. THE ONUS TO PROVE THAT THE APPARENT IS NOT THE REAL IS ON THE PARTY WHO CLAIMS IT TO BE SO. HERE, IN THE PRESENT CASE, DEPARTMENT CLAIMED THAT DOCUMENTS INVENTORISED RM - 1 TO RM - 4 ARE DUMB DOCUMENTS AND FOR THIS REVENUE HAS NO BASIS WHATSOEVER. TO GI VE A FINDING THAT THE DOCUMENTS ARE DUMB AND SUCH A FINDING CAN BE REVIEWED ON THE GROUND THAT THERE IS NO EVIDENCE TO SUPPORT IT OR IT IS PERVERSE. FURTHER, WHEN A CONCLUSION HAS BEEN REACHED ON AN APPRECIATION OF A NUMBER OF FACTS, WHETHER THAT IS SOUND OR NOT MUST BE DETERMINED, NOT BY CONSIDERING THE WEIGHT TO BE ATTACHED TO EACH SINGLE FACT IN ISOLATION, BUT BY ASSESSING THE CUMULATIVE EFFECT OF ALL THE FACTS IN THEIR SETTING AS A WHOLE. WHEN A COURT OF FACTS ACTS ON MATERIAL PARTLY I.T.A NO. 4 57 , 466 TO 468 /RJT /20 15 A.Y. 2009 - 10 TO 2012 - 13 PAGE NO M/S. SURYA DEVELOPE RS VS. DCIT 24 RELEVANT AND PARTLY IRRELEVANT, IT IS IMPOSSIBLE TO SAY TO WHAT EXTENT THE MIND OF THE COURT WAS AFFECTED BY THE IRRELEVANT MATERIAL USED BY IT IN ARRIVING AT ITS FINDING. SUCH A FINDING IS VITIATED BECAUSE OF USE OF INADMISSIBLE MATERIAL AND HENCE DECISION IN SUCH SITUATION IS BASED ON CONJECTURES, SURMISES AND SUSPICION. HENCE, WE CONSIDER DOCUMENTS FOUND FROM THE POSSESSION OF THE ASSESSEE DURING THE COURSE OF SEARCH WAS REAL AND DECLARATION MADE BY ASSESSEE ON THE BASIS OF ENTRY RECORDED IN THESE DOCUMENTS OF LONG TERM CA PITAL GAIN ON ACCOUNT OF SALE OF GOLD AND DIAMOND AND ALSO RECEIPTS ON ACCOUNT OF SALE OF PAINTINGS ARE TRUE AND THERE IS NO BASIS NOT TO ACCEPT THE SAME. ACCORDINGLY, WE DELETE THE ADDITION MADE BY CIT(A) OF RS.6.009 CR. AND RS.90 LACS FOR AY 2006 - 07 AND 2007 - 08. THIS INTER - CONNECTED ISSUE OF THE ASSESSEE'S APPEALS IS ALLOWED. 12. IT FURTHER TRANSPIRES FROM A PERUSAL OF LOWER AUTHORITIES ORDER THAT THE ASSESSING OFFICER HAS SIMPLY GONE BY SEQUENCE OF ASSESSEE S CASH INFLOW FROM M/S KANAK HAR AND THE ONE RELATING TO SHRI SANATH K. ME HTA . HE HAS NOT CONDUCTED ANY INQUIRY NOR ASKED THE ASSESSEE TO PRODUCE ITS PARTNERS ACCOUNTS FOR THE PURPOSE OF VERIFICATION. WE OBSERVE IN THIS FACTUAL AND LEGAL POSITION THAT THE ASSESSIN G OFFICER S ACTION IN ADOPTING THE ABOVE STATED PICK AND CHOOSE METHOD FOR THE PURPOSE OF ADDING 7OUT OF 13 CASH INFLOW INSTANCES IN ASSESSMENT YEAR 2009 - 10 AND 2011 - 12 IS NOT LIABLE TO BE SUSTAINED. SECTION 68 ADDITION S UNDER CHALLENGE IN THESE TWO IMPUGNED ASSESSMENT YEARS ARE ACCORDINGL Y DELETED. 13. THIS LEAVES WITH THE REMAINING SECTION 68 ADDITION OF RS. 50 LACS IN ASSESSMENT YEAR 2012 - 13 (SUPRA). THERE IS NO DISPUTE THAT THE ASSESSE PLEADED ITS INABILITY TO PRODUCE ITS CUSTOMERS STATED TO HAVE PAID THE IMPUGNED SUMS AS ADVANCE MO NEY IN THE COURSE OF ASSESSMENT PROCEEDINGS. IT HAS ALREADY COME ON RECORD THAT THE I.T.A NO. 4 57 , 466 TO 468 /RJT /20 15 A.Y. 2009 - 10 TO 2012 - 13 PAGE NO M/S. SURYA DEVELOPE RS VS. DCIT 25 ASSESSEE FILED CONFIRMATION ACCOUNTS FOUR OF ITS CUSTOMERS TO BUTTRESS ITS ADVANCE PLEA. THE CIT (A) HAS SUMMARILY REJECTED THE SAME BY HOLDING THAT THE ESSENTIAL CONDITI ON OF RULE 46A OF THE INCOME TAX RULES ENVISAGING PRODUCTION OF ADDITIONAL HAVE NOT BEEN SATISFIED. HE HAS NOT EVEN LOOKED INTO THE ABOVE STATED EVIDENCE. BOTH THE LD. REPRESENTATIVES REITE RATE THEIR RESPECTIVE STANDS IN THE COURSE OF HEARING. WE OBSERV E IN THESE PECULIAR FACTS AND CIRCUMSTANCES THAT THE LD. CIT(A) HAS ADOPTED A VERY MUCH TECHNICAL APPROACH INSTEAD OF SPECIFICALLY DEALING WITH THE ADDITIONAL EVIDENCE SOUGHT TO BE PRODUCED. WE ARE OF THE OPINION THAT THE ASSESSEE S ACT IN EXPRESSING INAB ILITY TO PRODUCE ITS CUSTOMERS DURING SCRUTINY AT THE VERY FIRST INSTANCE FOLLOWED BY ITS PRODUCTION OF ADDITIONAL EVIDENCE CONSTITUTES SUFFICIENT GROUND IN EXPLAINING THE REASONS OF NON - PRODUCTION THEREOF AT THE EARLIEST STAGE TO BE BEYOND ITS CONTROL. W E ACCORDINGLY REMIT THIS ISSUE OF SECTION 68 ADDITION OF RS. 50 LACS IN ASSESSMENT YEAR 2012 - 20 1 3 BACK TO THE ASSESSING OFFICER FOR DECISION AFRESH AS PER LAW AFTER AFFORDING ADEQUATE OPPORTUNITY TO THE ASSESSEE WHO IS DIRECTED TO CO - OPERATE. THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 14. THIS LEAVES US WITH THE REMAINING ISSUE SECTION 69C ADDITION OF UNEXPLAINED EXPENDITURE OF RS. 12 LACS, RS. 24 LACS AND RS. 50 ,31,998/ - AS RELEVANT FOR ASSESSMENT YEAR 2009 - 10, SECOND FIGURE CORRESPONDING TO ASSESSMENT YE AR 2010 - 11 AND 2011 - 12 EACH AND ASSESSMENT YEAR 2012 - 13 RESPECTIVELY. THERE CAN HARDLY BE ANY ISSUE THAT THIS STATUTORY PROVISION APPLIES IN CASE IT IS FOUND THAT AN I.T.A NO. 4 57 , 466 TO 468 /RJT /20 15 A.Y. 2009 - 10 TO 2012 - 13 PAGE NO M/S. SURYA DEVELOPE RS VS. DCIT 26 ASSESSEE INCURS ANY EXPENDITURE AND OFFERS NO OR UNSATISFACTORY EXPLANATION ABOUT SOURCE THEREOF. WE MAKE IT CLEAR THAT WE HAVE ALREADY ACCEPTED ASSESSEE S CASH INFLOW OF RS. 60,58,000/ - APPEARING ON THE LEFT SIDE OF THE ABOVE EXTRACTED SEIZED DOCUMENT AS CORRECT SO AS TO DEL E TE SECTION 68 ADDITION IN PRECEDING PARAGRAPH. A NATURAL COROLLARY IS THAT THE SAME HAVE TO BE MADE AS SOURCE OF IMPUGNED EXPENDITURE FORMING SUBJECT MATTER THE IMPUGNED SECTION 69C ADDITIONS IN FIRST THREE ASSESSMENT YEARS FROM 2009 - 10 TO 2011 - 12. THIS IS ALSO NOT THE REVENUE S CASE THAT THESE EXPENSES CLAIMED AS CASH OUTFLOW ON THE RIGHT IN ANY CASE EXCEED THE CORRESPONDING SUMS APPEARING ON THE LEFT SIDE. WE ARE OF THE OPINION THAT THESE EXPENSES CAN NO MORE BE TREATED AS UNEXPLAINED OR WITHOUT SOURCE . WE ARE CONSCIOUS OF THE FACT THAT ASSESSING OFFICER ALSO QUOTED SECTION 40A(3) IN THE BODY OF THE ASSESSMENT ORDER(S). HOWEVER, THERE IS NO CONCLUSION ABOUT ANY EXPENDITURE IN RESPECT OF WHICH A PAYMENT OR AGGREGATE OF PAYMENTS MADE TO A PERSON IN A DAY AS PROVIDED IN THE ST ATUTORY PROVISION. THEREFORE, WE CONCLUDE THAT THIS DISALLOWANCE PROVISION IS NOT APPLICABLE. THE IMPUGNED SECTION 69C ADDITIONS FORMING SUBJECT MATTER OF OUR ADJUDICATION IN FIRST THREE ASSESSMENT YEARS ARE ACCORDINGLY DELETED. 15. WE ARE NOW LEFT WITH THE LAST ASSESSMENT YEAR 2012 - 13 INVOLVI NG SECTION 69C ADDITIONS OF RS. 50,31,998/ - . WE REITERATE THAT THE CORRESPONDING LEFT SIDE CASH INFLOW/CREDIT AMOUNT OF RS. 50 LACS ADDED BY BOTH AUTHORITIES U/S. 68 OF THE ACT HAS BEEN REMITTED BACK TO THE ASSESSING AUTHORITY HEREINABOVE. WE ARE OF THE VIEW THAT THIS I.T.A NO. 4 57 , 466 TO 468 /RJT /20 15 A.Y. 2009 - 10 TO 2012 - 13 PAGE NO M/S. SURYA DEVELOPE RS VS. DCIT 27 ISSUE IS ONLY A COROLLARY OF THAT ONE. IN OTHER WORDS, IF ASSESSEE SUCCEEDS ON SECTION 68 ISSUE, IT CAN BE SAFELY INFERRED THAT TH E SAME FORMS SOURCE OF THE IMPUGNED INVESTMENT ADDITION OF RS. 50,31,998/ - . THE ONLY EXCEPTION IS DIFFERENTIA L SUM OF RS. 31,998/ - BETWEEN THE TWO FIGURES. WE AFFIRM THE IMPUGNED ADDITION TO THIS MUCH SUM ONLY. THE REMAINING PART OF THE ADDITION AMOUNTING TO RS. 50 LACS IS REMITTED BACK TO THE ASSESSING OFFICER TO BE DECIDED WITH THE CORRESPONDING SECTION 68 IS SUE. THIS GROUND IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDERED ACCORDINGLY. 16. THE ASSESSEE S FIRST THREE APPEALS ITAS 457, 466 AND 467/RJT/2015 ARE PARTLY ALLOWED AND ITA 468/RJT/2015 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. O RDER PR ONOUNCED IN THE OPEN C OUR T ON 22 - 04 - 201 6 SD/ - SD/ - (PRAMOD KUMAR ) ( S. S. GODARA ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 22 /04 /2016 AK / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, I.T.A NO. 4 57 , 466 TO 468 /RJT /20 15 A.Y. 2009 - 10 TO 2012 - 13 PAGE NO M/S. SURYA DEVELOPE RS VS. DCIT 28 ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, RAJKOT