ARUNA SANKHLA, Jaipur V. DCIT, Jaipur

ITA 484/JPR/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1874 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-12-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 05-05-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VARINDER MEHTA CIT DR DHK
• Keywords: Unexplained investment; Loose papers; Document seized; Opportunity of being heard; Principle of natural justice; Peak credit; Notional interest; Documents seized
• Section: 69C; 153A; 131; 132

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES , JAIPUR JH HKKXPUN] YS[KK LNL; ,O JH DQY HKKJR] U;KF;D L NL; DS LE{K BEFORE: SHRI BHAGCHAND, AM & SHRI KUL BHAR AT, JM VK;DJ VIHY LA-@ ITA NO. 484/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR: 2009-10 SMT. ARUNA SANKHLA A-3, MOTI LAL ATAL ROAD, JAIPUR CUKE VS. THE DCIT CENTRAL CIRCLE 1, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AGBPS 3591 D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI RAJEEV SOGANI, CA JKTLO DH VKSJ LS@ REVENUE BY:SHRI VARINDER MEHTA, CIT - DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 07/09/2017 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 1 /12/2017 VKNS'K@ ORDER PER BHAGCHAND, AM THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF THE LD. CIT(A)-4, JAIPUR DATED 30-03-2016 FOR THE ASSESSMEN T YEAR 2005-06 RAISING FOLLOWING GROUNDS. 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE SEARCH PROCEEDINGS CONDUCTED U/S 132 IS PATENTLY ILLEGAL A ND CONSEQUENTLY THE ASSESSMENT MADE U/S 153A IS ILLEGAL, WITHOUT ANY BA SIS AND BEYOND SCOPE. RELIEF MAY PLEASE BE GRANTED BY HOLDING THE SEARCH PROCEEDINGS ILLEGAL AND CONSEQUENTLY QUASHING THE ASSESSMENT PR OCEEDING U/S 153A BEING VOID AND AB INITO. ITA NO. 484/JP/2016 SMT. ARUNA SANKHLA VS DCIT, CENTR AL CIRCLE-1, JAIPUR 2 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 13,00,000/- U/S 69B OF THE I.T. ACT, 1961. THE ACTION OF THE LD. CIT(A) IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND AGAINST THE CASE OF THE ASSESSEE. RELIEF MAY PLEASE BE GRANTED BY DELETING THE SAID ADDITION OF RS. 6,12,500/- 3. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LD. CIT(A) HAS ERRED IN CONFIRMING UNDISCLOSED INCOME F ROM OTHER SOURCES AMOUNTING TO RS. 34,500/- 4. THE LD. CIT(A) HAS ERRED IN UPHOLDING THE ADDITI ON OF RS. 1,38,00,000/-U/S 68 OF THE I.T. ACT, 1961. 2.1 DURING THE COURSE OF HEARING, THE LD.AR OF THE ASSESSEE HAS NOT PRESSED THE GROUND NO. 1.HENCE, THE SAME IS DISMISS ED BEING NOT PRESSED. 3.1 APROPOS GROUND NO. 2 AND 3 OF THE ASSESSEE, THE FACTS AS EMERGES FROM THE ORDER OF THE LD. CIT(A) IS AS UNDER:- 3.3.2 I HAVE DULY CONSIDERED THE ASSESSEES SUBMISSION A ND ALSO CAREFULLY GONE THROUGH THE ASSESSMENT ORDER.I HAVE TAKEN A NOTE OF THE FACTUAL MATRIX OF THE CASE AS WELL AS CASE LAWS RELIED UPON. IN TH IS CASE AO HAS MADE THE ADDITION ON ACCOUNT OF UNDISCLOSED INVESTMENT AMOUNTING TO RS. 13 LACS MADE THROUGH THE FINANCE BROKER SH MANISH TAMBI AND INTEREST THEREOF OF RS. 34,500/-. AO HAS MADE A DETAILED DISCUSSION IN THIS REGARD IN PARA 43 TO 53 PG 13 TO 15 OF THE ASSESSMENT ORDER AND ALSO RELIED ON DECISION OF HONBLE COURT IN CASE OF SUMA TI DAYAL & DURGA PRASAD MORE (SUPRA). SH MANISH TAMBI WAS ALSO COVERED IN SEARCH OPERATION CONDUCTED AGAINST THE SH MAHAVEER SINGH SANKHLA GROUP AND INCRIMINATING D OCUMENTS(NAMELY ANNEXURE A-1 & A-4 ) SEIZED FROM SH TAMBIS PREMISE CONTAIN NAMES OF SH VISHNU MAHARWAL, SMT ARUNA SANKHLA & M/S. KAMAKSHI INTERNATIONAL. SH MANISH TAMBI BEING A FINANCE BROKER, ARRANGES FINANCE BOTH IN CHEQUE AND CASH. L ATE SH BIMAL KR JAIN WAS ALSO COVERED UNDER SEARCH ACTION CONDUCTED AGAINST THIS GROUP AND DURING THE SEARCH OPERATION ON THE BASIS OF ENTRIES MADE IN SEIZED DO CUMENTS FOUND FROM THE PREMISES OF SH MANISH TAMBI HAD MADE A DISCLOSURE OF UNDISCL OSED INVESTMENT OF RS. 68 LACS IN CASH ARRANGED THROUGH SH MANISH TAMBI AND ALSO E ARNED INTEREST ON THE SAID UNDISCLOSED INVESTMENT. IN VIEW OF THESE FACTS AND CIRCUMSTANCES EVIDENCES, AO HAS OBSERVED THAT SMT. ARUNA SANKHLA WHOSE NAME APPEARI NG IN SEIZED MATERIAL ANNEXURE A-1 TO A-4, SEIZED FROM THE RESIDENTIAL CUM BUSINE SS PREMISES OF SH MANISH TAMBI ITA NO. 484/JP/2016 SMT. ARUNA SANKHLA VS DCIT, CENTR AL CIRCLE-1, JAIPUR 3 HAS MADE AN UNDISCLOSED INVESTMENT OF RS. 13 LACS T HROUGH SH MANISH TAMBI AND EARNED INTEREST OF RS. 34,500/- FOR THE INTERVENING PERIOD. IT IS ALSO FACT THAT BEFORE FORMING THIS OPINION, A O HAS ALSO EXAMINED SH VISHNU MAHARWAL U/S 131 OF THE ACT, WHERE, SH VISHNU MAHAR WAL IN THE SWORN STATEMENT RECORDED ON OATH U/S 131 OF THE ACT ON 20.12.2011 H AS DENIED HAVING ANY TRANSACTIONS MADE WITH OR ARRANGED THROUGH TO SH MANISH TAMBI. THE RELEVANT EXTRACT OF HIS SWORN STATEMENT IS REPRODUCED HERE AS UNDER: ---------IZ0 6 ES VKIDKS JH EUH'K RKECH DH IQLRDK SA DS VK/KKJ IJ RS;KJ VKIDS [KKRS DH UDY TKS FD FNU KAD 01-01-2009LS 30-06-2009 LS LECFU/KR GS] FN[KK JGK GWWA BL [KKRS ESA VKIDK ,O A EKS0 DKEK{KH BUVJUSKUY }KJK FD;SA X, UDN YSU NSU DK C;KSJK GSA D`I;K BL E ESA VKIDK D;K DGUK GS \ MRRJ ESJK BL IZDKJ DK DKSBZ UDN YSU NSUK UGHA GQVK GS VKSJ ESJH TKUDKJH ESA HKH UGHA GSA------- FURTHER, SH O. P. VYAS AR OF THE ASSESSEE HAS ALSO DRAWN MY ATTENTION TOWARDS HONBLE ITAT JAIPUR DECISION IN ITA NO. 736, & 737/ 2007-08, 2009-10 & 2010-11 IN CASE OF SH MANISH TAMBI WHERE HONBLE ITAT HAS DIRE CTED THE AO TO TAX ONLY COMMISSION INCOME IN THE HANDS OF SH MANISH TAMBI, RELEVANT EXTRACT OF WHICH IS REPRODUCED AS UNDER: . 736/JP/2013-AY 2007-08 4.1 THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A) DATED 14-08-2012 FOR THE AY 2009-10 WHEREIN FOLLOWI NG GROUNDS HAVE BEEN RAISED. 1. THAT UNDER THE FACTS AND CIRCUMSTANCES THE LD. AO HAS ERRED IN COMPLETING THE ASSESSMENT ON THE BASIS OF DEAF, DUMB AND ROUGH NOT ING WHICH NOTHING MORE THAN ROUGH PAPERS ARE. 2. THE ORDER PASSED BY THE LD. AO U/S 153A/143(3) I S VOID AB-INITIO DESERVES TO BE QUASHED. 3. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 3,21,31,893/- AS INC OME ON THE BASIS OF PEAK CREDITORS CALCULATED BY THEM IGNORING THE SUBMISSIO NS OF THE ASSESSEE AND WITHOUT CONSIDERING THE CONTENTION OF THE ASSESSEE AGAINST DECLARED PEAK OF RS. 52,40,137/- WHICH WAS CALCULATED ON MORE SCIENTIFIC BASIS. 4. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 32,42,597/- AS OWN U NEXPLAINED CASH/CAPITAL ITA NO. 484/JP/2016 SMT. ARUNA SANKHLA VS DCIT, CENTR AL CIRCLE-1, JAIPUR 4 EMPLOYED IN DEBTORS AFTER ADDITION OF RS. 3,21,31,8 93/- WHICH AMOUNT TO DOUBLE ADDITION AND WITHOUT CONSIDERING THE SURRENDER OF R S. 52,40,137/- BY THE ASSESSEE. 5. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 1,24,77,126/- ON ACC OUNT OF INTEREST INCOME WHICH IS NOT THE REAL INCOME OF THE ASSESSEE AND WAS CALCULA TED. 6. THE ASSESSEE PRAYS YOUR INDULGENCE TO ADD, AMEND OR ALTER ALL OR ANY GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. 5.1 DURING THE COURSE OF HEARING, THE LD. AR HAS N OT PRESSED THE GROUND NO. 1 AND 2. HENCE, THE SAME ARE DISMISSED BEING NOT PRESS ED. 6.1 THE GROUND NO. 6 OF THE ASSESSEE IS GENERAL IN NATURE WHICH DOES NOT REQUIRE ANY ADJUDICATION. 7.1 THE GROUND NOS. 3 AND 4 ARE IN CONNECTION WITH ONE ISSUE ONLY. THE FACTS APROPOS TO THIS ISSUE ARE THAT DURING SEARCH CERTAI N LOOSE PAPERS WERE FOUND AND SEIZED FROM THE ASSESSEE. THESE PAPERS CO NTAIN DEBIT AND CREDIT ENTRIES FOR WHICH THE ASSESSEE HAS GOT NO EXPLANATI ON. AS PER THE ASSESSEE, ONLY PEAK CREDIT THEORY IS APPLICABLE IN SUCH CASES. ACCORDING TO THE ASSESSEE, THE ENTRIES SHOULD BE SO ARRANGED IN SERIA L ORDER THAT A CREDIT FOLLOWING A DEBIT ENTRY SHOULD BE TREATED AS REFERABLE TO THE LATTER TO THE EXTENT POSSIBLE AND THAT NOT THE AGGREGATE BUT ONLY T HE PEAK OF THE CREDIT SHOULD BE TREATED AS UNEXPLAINED. THE AO HAS CALCULA TED THE PEAK AMOUNT AND HAS MADE THE IMPUGNED ADDITION. THE DEFENCE OF THE ASSESSEE IS THAT THE PEAK COMPUTED BY THE AO IS NOT CORRECT. THE SEI ZED PAPERS MARKED AS ANNEXURE A-1 TO A-4 IS MENTIONED IN PARA 5 BY THE A O IN HIS ASSESSMENT ORDER, CONTAINING TRANSACTION OF CASH RELATING TO F INANCE BUSINESS. THE ENTRIES DID NOT CONTAIN THE ADDRESSES OF THE CREDIT ORS OR THE DEBTORS. THE ASSESSEE WAS NOT IN A POSITION TO EXPLAIN AND FURNI SH THE SOURCE AND EVIDENCE OF ENTRIES OR ADDRESS THEREOF. THE ASSESSE E OFFERED ALL THE CREDIT AND DEBIT ENTRIES PERTAINING TO HIM INDIVIDUALLY AND AGREED TO PAY TAX ON THE PEAK AMOUNT OF THESE TRANSACTION. AS PER THE AO , THE PEAK FIGURE COMES TO RS. 3,21,31,593/- WHEREAS AS PER THE ASSESSEE TH E PEAK AMOUNT OF CAPITAL EMPLOYED COMES TO RS. 52,40,137/- AND IT IS ONLY TH IS AMOUNT WHICH IS REQUIRED TO BE CONSIDERED AS PEAK AMOUNT. HOWEVER, BO TH THE AUTHORITIES BELOW REJECTED THE ASSESSEES APPEAL. 7.2 . ITA NO. 484/JP/2016 SMT. ARUNA SANKHLA VS DCIT, CENTR AL CIRCLE-1, JAIPUR 5 7.3 . 7.4 AFTER CONSIDERING THE RIVAL SUBMISSIONS AND THE MATERIALS AVAILABLE ON RECORD, WE ARE OF THE CONSIDERED OPINION THAT THE S EIZED PAPERS CANNOT TREATED AS BOOKS OF ACCOUNT. FURTHERMORE, ONLY THE C OMMISSION INCOME CAN BE ASSESSED IN THE HANDS OF THE ASSESSEE @ 0.10% ON A TOTAL OF THE CREDITS OF RS. 91,67,81,272/-. THE ADDITION U/S 68 OF THE ACT CAN BE MADE ONLY IF ANY SUM IS FOUND CREDITED IN THE BOOKS OF THE ASSESSEE. A BOOK MEANS A COLLECTION OF SHEETS OF PAPERS BOUND TOGETHER WITH T HE INTENTION THAT SUCH BINDING SHALL BE PERMANENT AND PAPERS USED ARE KEPT C OLLECTIVELY IN ONE VOLUME. A BOOK WHICH CONTAINS SUCCESSIVE ENTRIES OF ITEMS MAYBE A GOOD MEMORANDUM BOOK BUT UNTIL THOSE ENTRIES ARE TOTALED O R BALANCED OR BOTH AS THE CASE MAY BE, THERE IS NO RECKONING AND NO ACC OUNTS. A BOOK WHICH MERELY CONTAINS ENTRIES OF ITEMS OF WHICH NO ACCOUN T IS MADE AT ANY TIME, IS NOT A BOOK OF ACCOUNT IN A COMMERCIAL SENSE. THUS THE ADDITION MADE U/S 68 IS NOT JUSTIFIED. IT IS NOTICED THAT OVER AND ABO VE THE PEAK CREDIT, THE AO HAS FURTHER MADE AN ADDITION OF RS. 52,40,137/- ON ACCOUNT OF DEBTORS EXCEEDING THE CREDITORS. WE HAVE FOUND THAT THE PEA K DETERMINED BY THE AO IS NOT CORRECT, OTHERWISE ALSO, WHEN ONCE PEAK AMOU NT HAS BEEN ADDED THEN NO SEPARATE ADDITION IS REQUIRED. IT SEEMS THAT TH E AO HAS NOT PROPERLY PREPARED THE LIST OF DEBTORS AND CREDITORS BASED ON A NY LOGIC. THE LD. CIT(A) HAS CONFIRMED THE ADDITION OF RS. 52,40,137/ - UNDER THE PROVISIONS OF SECTION 69B OF THE ACT. THIS SECTION RELATES TO INVESTMENT MADE BY THE ASSESSEE IN THE ACQUISITION OF BULLION/JEWELLERY OR OTHER VALUABLE ARTICLES BUT IT DOES NOT SPEAK ABOUT ANY INVESTMENT IN DEBTORS. MOREOVER, SECTION 69B ALSO STIPULATES THE POSITION WHERE THE INVESTME NT EXCEEDS THE AMOUNT SHOWN IN THE BOOKS OF ACCOUNT. SINCE THE ASSESSEE DO ES NOT MAINTAIN ANY BOOKS OF ACCOUNT WHEREIN THE DEBTORS AND CREDITORS AR E REFLECTED, THEREFORE, THIS ADDITION HAS ALSO BEEN WRONGLY MADE AND UPHELD U/S 69B OF THE ACT. HENCE, IN OUR CONSIDERED OPINION, ONLY COMMISSION I NCOME HAS TO BE DETERMINED IN THIS CASE AND NOTHING MORE. ACCORDING LY, WE REVERSE THE FINDINGS OF THE LD. CIT(A) AND ORDER TO DELETE THE ENTIRE ADDITION SO MADE. THUS GROUND NOS. 3 AND 4 OF THE ASSESSEE ARE ALLOWE D. ITA NO. 484/JP/2016 SMT. ARUNA SANKHLA VS DCIT, CENTR AL CIRCLE-1, JAIPUR 6 8.1 THE NEXT GROUND NO. 5 WHICH PERTAINS TO CONFIRM ATION OF ADDITION OF RS. 1,24,77,126/- MADE ON ACCOUNT OF INTEREST INCOME WH ICH IS NOT THE REAL INCOME OF THE ASSESSEE. 8.2 .. 8.3 AFTER CONSIDERING THE RIVAL SUBMISSIONS AND ON P ERUSAL OF THE MATERIALS AVAILABLE ON RECORD, WE HAVE FOUND THAT THE AO HAS FAILED TO CAUSE ENQUIRY IN RESPECT OF THESE PARTIES,. IN OUR CONSIDERED OPI NION, THE AO HAS WRONGLY CONSIDERED THE ENTIRE CREDITS AND INTEREST ENTRIES IN THE HANDS OF THE ASSESSEE. ACCORDINGLY, WE ARE IN AGREEMENT WITH THE SUBMISSION OF THE LD. AR AND ORDER TO DELETE THE ADDITION OF RS. 1,24,77, 126/- ADDED ON ACCOUNT OF NOTIONAL INTEREST. THUS THE GROUND NO. 5 OF THE ASSESSEE IS ALLOWED. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PART LY ALLOWED. ON CAREFUL PERUSAL OF THE AFOREMENTIONED JUDGMENT, IT IS SEEN THAT HONBLE ITAT BENCH JAIPUR HAS NOT TREATED THE SEIZED DOCUME NT AS A DUMB DOCUMENT AND ASKED THE AO TO TAX ONLY COMMISSION INCOME IN THE H ANDS OF SH MANISH TAMBI BUT NO WHERE HONBLE ITAT HAS MENTIONED THAT TRANSACTIONS IN THE HANDS OF PERSONS WHOSE NAMES ARE APPEARING IN THE SEIZED DOCUMENTS CANNOT BE TAXED. IN FACT IN PG 16 PARA 7.4 HONBLE ITAT BENCH JAIPUR HAS ALSO MENTIONED TH AT WHEN ONCE PEAK AMOUNT IS ADDED THEN NO SEPARATE ADDITION IS REQUIRED BECAUSE AO HAD ADDED OVER AND ABOVE PEAK CREDIT. ACCORDINGLY, THE CASE OF MANISH TAMBI WILL BE ACTUALLY IN FAVOUR OF THE ASSESSEE. IT IS ALSO A FACT THAT ASSESSEE HAS NOT CONTROVERT ED AOS FINDINGS GIVEN IN THE ASSESSMENT ORDER. IN VIEW OF FACTS AND CIRCUMSTANCE S OF THE CASE AND DULY CONSIDERING THE PRINCIPLE OF HUMAN PROBABILITY AS EXPLAINED BY HONBLE APEX COURT IN CASE OF SUMATI DAYAL & DURGA PRASAD MORE(SUPRA), AND ALSO D ULY CONSIDERING CIRCUMSTANTIAL EVIDENCES OF THE CASE, BOTH THE ADDITIONS MADE ON A /C OF UNDISCLOSED INVESTMENT OF RS 13,00,000/= AND INTEREST EARNED THEREOF OF RS. 34,5 00/= FOR THE INTERVENING PERIOD ARE HEREBY CONFIRMED. ASSESSEES APPEAL IN GRS NO 3 & 5 FAIL. ITA NO. 484/JP/2016 SMT. ARUNA SANKHLA VS DCIT, CENTR AL CIRCLE-1, JAIPUR 7 3.2 DURING THE COURSE OF HEARING, THE LD.AR OF THE ASSESSEE PRAYED FOR DELETION OF ADDITION CONFIRMED BY THE LD. CIT(A) FO R WHICH FOLLOWING WRITTEN SUBMISSION HAS BEEN FILED. 3. SUBMISSIONS 3.1 THE ENTIRE ADDITION BY THE LD. AO AND ITS CONFIRMAT ION BY THE LD. CIT(A) IS BASED ON A PRESUMPTION THAT WHATEVER WAS WRITTEN THE NAME OF S MT. ARUNA SANKHLA IN THE DOCUMENTS SEIZED FROM SHRI MANISH TAMBI, WAS OF THE PRESENT A PPELLANT SMT. ARUNA SANKHLA. HOWEVER, FOLLOWING HAVE BEEN IGNORED BY THE LOWER AUTHORITIE S AND THEREFORE THIS CONCLUSION IS NOT TENABLE IN LAW:- 3.1.1 WHATEVER TRANSACTIONS, SMT. ARUNA SANKHLA OR THAT M ATTER M/S KAMAKSHI INTERNATIONAL (SISTER CONCERN), HAD WITH THE FINANC E BROKER SHRI MANISH TAMBI WERE THROUGH BANKING CHANNEL. 3.1.2 M/S KAMAKSHI INTERNATIONAL HAD ALSO BORROWED FUNDS THROUGH SHRI MANISH TAMBI BY WAY OF BANKING CHANNEL. IT IS STRANGE THAT ONE GROU P CONCERN IS BORROWING WHILE THE FAMILY MEMBER OF SAME GROUP IS ALLEGEDLY ADVANCING. 3.1.3 PREMISES OF SMT. ARUNA SANKHLA WAS ALSO SEARCHED AN D NO DOCUMENTS OF HER ADVANCING THE MONEY THROUGH SHRI MANISH TAMBI WERE FOUND OR SEIZED FROM HER PREMISES. IT IS A NORMAL PRACTICE THAT IF MONEY IS LENT, THE ACCEPTED HUNDI OF BORROWER, DULY SIGNED BY THE BORROWER, IS KEPT BY THE LENDER. SUCH DOCUMENT WAS NEITHER FOUND FROM THE PREMISES OF SHRI MANISH TAMBI NOR FROM THE PREMISES OF SMT. ARUNA SANKHLA. WITHOUT SUCH DOCUMENT THE MONEY CANNOT BE RECOVERED AND, THEREFORE, ITS EXISTENCE IS A PRE CONDITION FOR MAKING ANY ADDITIO N. 3.1.4 SHRI MANISH TAMBI HAD NOT ADMITTED THAT THIS TRANSA CTION BELONG TO SMT. ARUNA SANKHLA (PARA 53 PG 15 AO ORDER) . IT IS QUITE POSSIBLE THAT SHRI MANISH TAMBI CIRCULATED HIS OWN BLACK MONEY IN THE NAME OF SMT. ARUNA SANKHLA. SUCH IS A NORMAL PRACTICE WITH FINANCE BROKERS. LD. ASSESSING OFFICE R ALSO HAD THIS POSSIBILITY IN HIS MIND AND, THEREFORE, HE ADDED THE SAID SUM PROTECTI VELY IN THE HANDS OF SHRI MANISH TAMBI. 3.1.5 NEITHER THE SEIZED DOCUMENTS WERE MADE AVAILABLE NO R CROSS EXAMINATION OF SHRI MANISH TAMBI WAS ALLOWED. 3.1.6 LD. CIT(A), AT PAGE 31 & 32 OF HIS ORDER , HAS REPRODUCED THE RELEVANT PORTION OF THE STATEMENTS OF SHRI VISHNU MEHARWAL RECORDED U/S 131 ON 20-12-11 WHERE IN THE SAID SHRI VISHNU MEHARWAL HAD DENIED ANY CASH TRANSACTIO NS OF HIMSELF OR M/S KAMAKSHI INTERNATIONAL WITH SHRI MANISH TAMBI. ITA NO. 484/JP/2016 SMT. ARUNA SANKHLA VS DCIT, CENTR AL CIRCLE-1, JAIPUR 8 3.2 LD. CIT(A) HAS MISPLACED HIS RELIANCE ON THE DECISI ON OF HONBLE ITAT JAIPUR BENCH IN THE CASE OF SHRI MANISH TAMBI (ALTHOUGH AT PAGE 34 OF HIS ORDER LD. CIT(A) HAS MENTIONED THAT THE ORDER OF SHRI MANISH TAMBI IS ACTUALLY IN FAVOR OF THE ASSESSEE). LD. CIT(A) HAS WRONGLY HELD THAT HONBLE ITAT BENCH, JAIPUR HAS NOT TREATE D THE SEIZED DOCUMENT AS A DUMB DOCUMENT. IT IS SUBMITTED THAT, GROUND NO. 1 OF TH E ASSESSEES APPEAL APPEARING AT THE PAGE 6 OF THE ORDER OF HONBLE ITAT , WAS NOT PRESSED AS APPEARING AT PARA 5.1 AT PAGE 7 OF THE ORDER OF HONBLE ITAT . THUS, THE ISSUE OF DOCUMENT BEING DEAF & DUMB WAS NOT ADJUDICATED AND LD. CIT(A) IS WRONG IN DRAWING ANY INFERENCE IN THIS REGARD. MOREOVER, HONBLE ITAT DELETED THE ADDITIONS IN THE HANDS OF SHRI MANISH T AMBI FOR THE TECHNICAL REASONS (PAGE 16 OF THE ORDER OF HONBLE ITAT) THAT LOOSE PAPERS CANNOT BE TERMED AS BOOKS, THERE FORE, NO ADDITION WITH REFERENCE TO LOOSE PAPERS CAN BE MADE U/S 68 OF THE INCOME TAX ACT, 1961. 3.3 LD. AO AT PARA 47 PG 14 OF HIS ORDER HAS MENTIONED THAT SOME PERSONS WHOSE NAMES WERE APPEARING IN THE DOCUMENTS HAVE OWNED THE SAID MONE Y. HOWEVER, LD. AO HAS NOT MENTIONED THE NAMES OF THE PERSONS APPEARING IN THE DOCUMENTS BUT WHO DID NOT OWN UP THE MONEY. MERELY OWNING BY SOME PERSONS CANNOT MAKE THE ENTIR E CONTENTS OF THE DIARY TO BE CORRECT. RELIANCE IS PLACED ON THE JUDICIAL PRONOUNCEMENT OF THE HONBLE SUPREME COURT IN THE CASE OF C.B.I V. V.C. SHUKLA 1998 (3) SCC 410 , WHEREIN IT HAS BEEN HELD THAT MEANING OF ACCOUNTS BOOK WOULD NOT BE DIARY. THE EXTRACT HAS BEEN SET O UT FOR THE SAKE OF YOUR CONVENIENCE. IN SETTING ASIDE THE ORDER OF THE TRIAL COURT, THE HIGH COURT ACCEPTED THE CONTENTION OF THE RESPONDENTS THAT THE DOCUMENTS WERE NOT ADMI SSIBLE IN EVIDENCE UNDER SECTION 34 WITH THE FOLLOWING WORDS: ' AN ACCOUNT PRESUPPOSES THE EXISTENCE OF TWO PERSO NS SUCH AS A SELLER AND A PURCHASER, CREDITOR AND DEBTOR. ADMITTEDLY, THE ALL EGED DIARIES IN THE PRESENT CASE ARE NOT RECORDS OF THE ENTRIES ARISING OUT OF A CON TRACT. THEY DO NOT CONTAIN THE DEBTS AND CREDITS. THEY CAN AT THE MOST BE DESCRIBED AS A MEMORANDUM KEPT BY A PERSON FOR HIS OWN BENEFIT WHICH WILL ENABLE HIM TO LOOK I NTO THE SAME WHENEVER THE NEED ARISED TO DO FOR HIS FUTURE PURPOSE. ADMITTEDLY THE SAID DIARIES WERE NOT BEING MAINTAINED ON DAY-TO DAY BASIS IN HE COURSE OF BUSI NESS. THERE IS NO MENTION OF THE DATES ON WHICH THE ALLEGED PAYMENT WERE MADE. IN FA CT THE ENTRIES THERE IN ARE ON MONTHLY BASIS. EVEN THE NAMES OF THE PERSONS WHOM T HE ALLEGED PAYMENTS WERE MADE DO NOT FIND A MENTION IN FULL. THEY HAVE BEEN SHOWN IN ABREVIATED FORM. ONLY CERTAIN 'LETTERS' HAVE BEEN WRITTEN AGAINST THEIR N AMES WHICH ARE WITHIN THE KNOWLEDGE OF ONLY THE SCRIBE OF THE SAID DIARIES AS TO WHAT THEY STAND FOR AND WHOM THEY REFER TO.' FROM A PLAIN READING OF THE SECTION IT IS MANIFEST THAT TO MAKE AN ENTRY RELEVANT THEREUNDER IT MUST BE SHOWN THAT IT HAS BEEN MADE I N A BOOK, THAT BOOK IS A BOOK OF ACCOUNT AND THAT BOOK OF ACCOUNT HAS BEEN REGULARLY KEPT IN THE COURSE OF BUSINESS. FROM THE ABOVE SECTION IT IS ALSO MANIFEST THAT EVE N IF THE ABOVE REQUIREMENTS ARE FULFILLED AND THE ENTRY BECOMES ADMISSIBLE AS RELEV ANT EVIDENCE, STILL, THE STATEMENT MADE THEREIN SHALL NOT ALONE BE SUFFICIENT EVIDENCE , STILL, THE STATEMENT MADE THEREIN SHALL NOT ALONG BE SUFFICIENT EVIDENCE TO CHARGE AN Y PERSON WITH LIABILITY. IT IS THUS SEEN THAT WHILE THE FIRST PART OF THE SECTION SPEAK S OF THE RELEVANCY OF THE ENTRY AS EVIDENCE, THE SECOND PARK SPEAKS, IN A NEGATIVE WAY , OF ITS EVIDENTIARY VALUE FOR CHARGING A PERSON WITH A LIABILITY. IT WILL, THEREF ORE, BE NECESSARY FOR US TO FIRST ASCERTAIN WHETHER THE ENTRIES IN THE DOCUMENTS, WIT H WHICH WE ARE CONCERNED, FULFIL THE REQUIREMENTS OF THE ABOVE SECTION SO AS TO BE A DMISSIBLE IN EVIDENCE AND IF THIS QUESTION IS ANSWERED IN THE AFFIRMATIVE THEN ONLY I TS PROBATIVE VALUE NEED BE ASSESSED. ITA NO. 484/JP/2016 SMT. ARUNA SANKHLA VS DCIT, CENTR AL CIRCLE-1, JAIPUR 9 'BOOK' ORDINARILY MEANS A COLLECTION OF SHEETS OF P APER OR OTHER MATERIAL, BLANK, WRITTEN, OR PRINTED, FASTENED OR BOUND TOGETHER SO AS TO FORM A MATERIAL WHOLE. LOOSE SHEETS OR SCRAPS OF PAPER CANNOT BE TERMED AS 'BOOK' FOR THEY CAN BE EASILY DETACHED AND REPLACED. IN DEALING WITH THE WORK 'BO OK' APPEARING IN SECTION 34 IN MUKUNDRAM VS. DAYARAM [AIR 1914 NAGPUR 44], A DECIS ION ON WHICH BOTH SIDES HAVE PLACED RELIANCE, THE COURT OBSERVED:- ' IN ITS ORDINARY SENSE IT SIGNIFIES A COLLECTION O F SHEETS OF PAPER BOUND TOGETHER IN A MANNER WHICH CANNOT BE DISTURBED OR ALTERED EXCEPT BY TEARING APART. THE BINDING IS OF A KIND WHICH IS NOT INTENDED TO THE MOVEABLE IN THE SENSE OF BEING UNDONE AND PUT TOGETHER AGAIN. A COLLECTION OF PAPERS IN A PORTFOL IO, OR CLIP, OR STRUNG TOGETHER ON A PIECE OF TWINE WHICH IS INTENDED TO BE UNTIED AT WI LL, WOULD NOT, IN ORDINARY ENGLISH, BE CALLED A BOOK............................... ... .............................I THINK THE TERM 'BOOK ' IN S. 34AFORESAID MAY PROPERLY' BE TAKEN TO SIGNIFY, ORDI NARILY, A COLLECTION OF SHEETS OF PAPER BOUND TOGETHER WITH THE INTENTION THAT SUCH B INDING SHALL BE PERMANENT AND THE PAPERS USED COLLECTIVELY IN ONE VOLUME. IT IS E ASIER HOWEVER TO SAY WHAT IS NOT A BOOK FOR THE PURPOSES OF S. 34, AND I HAVE NO HESIT ATION IN HOLDING THAT UNBOUND SHEETS OF PAPER IN WHATEVER QUANTITY, THOUGH FILLED UP WITH ONE CONTINUOUS ACCOUNT, ARE NOT A BOOK OF ACCOUNT WITHIN THE PURVIEW OF S. 34.' WE MUST OBSERVE THAT THE AFORESAID APPROACH IS IN A CCORD WITH GOOD REASONING AND WE ARE IN FULL AGREEMENT WITH IT. APPLYING THE ABOV E TESTS IT MUST BE HELD THAT THE TWO SPIRAL NOTE BOOKS (MR 68/91 AND 71/91) AND THE TWO SPIRAL PADS (MR 69/91 AND MR 70/91) ARE 'BOOKS' WITHIN THE MEANING OF SECTION 34 , BUT NOT THE LOOSE SHEETS OF PAPERS CONTAINED IN THE TWO FILES (MR 72/91 AND MR 73/91). .. MR. SIBAL, THE LEARNED COUNSEL FOR THE JAINS, DID NOT DISPUTE THAT THE SPIRAL NOTE BOOKS AND THE SMALL PADS ARE 'BOOKS' WITHIN TH E MEANING OF SECTION 34. HE, HOWEVER, STRONGLY DISPUTED THE ADMISSIBILITY OF THO SE BOOKS IN EVIDENCE UNDER THE AFORESAID SECTION ON THE GROUND THAT THEY WERE NEIT HER BOOKS OF ACCOUNT NOR THEY WERE REGULARLY KEPT IN THE COURSE OF BUSINESS. HE S UBMITTED THAT AT BEST IT COULD BE SAID THAT THOSE BOOKS WERE MEMORANDA KEPT BY A PERS ON FOR HIS OWN BENEFIT. ACCORDING TO MR. SIBAL, IN BUSINESS PARLANCE 'ACCOU NT' MEANS A FORMAL STATEMENT OF MONEY TRANSACTIONS BETWEEN PARTIES ARISING OUT OF C ONTRACTUAL OR FIDUCIARY RELATIONSHIP. SINCE THE BOOKS IN QUESTION DID NOT R EFLECT ANY SUCH RELATIONSHIP AND, ON THE CONTRARY, ONLY CONTAINED ENTRIES OF MONIES R ECEIVED FROM ONE SET OF PERSONS AND PAYMENT THEREOF TO ANOTHER SET OF PERSONS IT CO ULD NOT BE SAID, BY ANY STRETCH OF IMAGINATION THAT THEY WERE BOOKS OF ACCOUNT, ARGUED MR. SIBAL. HE NEXT CONTENDED THAT EVEN IF IT WAS ASSUMED FOR ARGUMENT'S SAKE THA T THE ABOVE BOOKS WERE BOOKS OF ACCOUNT RELATING TO A BUSINESS STILL THEY WOULD NOT BE ADMISSIBLE UNDER SECTION 34 AS THEY WERE NOT REGULARLY KEPT. IT WAS URGED BY HIM T HAT THE WORDS 'REGULARLY KEPT' MEAN THAT THE ENTRIES IN THE BOOKS WERE CONTEMPORAN EOUSLY MADE AT THE TIME THE TRANSACTIONS TOOK PLACE BUT A CURSORY GLANCE OF THE BOOKS WOULD SHOW THAT THE ENTRIES WERE MADE THEREIN LONG AFTER THE PURPORTED TRANSACTIONS TOOK PLACE. IN SUPPORT OF HIS CONTENTIONS HE ALSO RELIED UPON THE DICTIONARY MEANINGS OF THE WORDS 'ACCOUNT' AND 'REGULARLY KEPT'. .. IN BENI VS. BISAN DAYAL [ A. I. R 1925 NAGPUR 445] IT WAS OBSERVED TAT ENTRIES IN BOOK S OF ACCOUNT ARE NOT BY THEMSELVES SUFFICIENT TO CHARGE ANY PERSON WITH LIABILITY, THE REASON BEING THAT A MAN CANNOT BE ALLOWED TO MAKE EVIDENCE FOR HIMSELF BY WHAT HE CHOOSES TO WRITE IN HIS OWN BOOK S BEHIND THE BACK OF THE PARTIES. THERE MUST BE INDEPENDENT EVIDENCE OF THE TRANSACTI ON TO WHICH THE ENTRIES RELATE AN ITA NO. 484/JP/2016 SMT. ARUNA SANKHLA VS DCIT, CENTR AL CIRCLE-1, JAIPUR 10 DIN ABSENCE OF SUCH EVIDENCE NO RELIEF CAN BE GIVEN TO THE PARTY WHO RELIES UPON SUCH ENTRIES TO SUPPORT HIS CLAIM AGAINST ANOTHER. IN HIRA LAL VS. RAM RAKHA [ A. I. R. 1953 PEPSU 113] THE HIGH COURT, WHILE NEGATIVING A CONTENTION THAT IT HAVING BEEN PROVED THAT THE BOOKS OF ACCOUNT WERE REGULARL Y KEPT IN THE ORDINARY COURSE OF BUSINESS AND THAT, THEREFORE, ALL ENTRIES THEREIN S HOULD BE CONSIDERED TO BE RELEVANT AND TO HAVE BEEN PROVE, SAID THAT THE RULE AS LAID DOWN IN SECTION 34 OF THE ACT THAT ENTRIES IN THE BOOKS OF ACCOUNT REGULARLY KEPT IN T HE COURSE OF BUSINESS RE RELEVANT WHENEVER THEY REFER TO A MATTER IN WHICH THE COURT HAS TO ENQUIRE WAS SUBJECT TO THE SALIENT PROVISO THAT SUCH ENTRIES SHALL NOT ALONE B E SUFFICIENT EVIDENCE TO CHARGE ANY PERSON WITH LIABILITY. IT IS NOT, THEREFORE, ENOUGH MERELY TO PROVE THAT THE BOOKS HAVE BEEN REGULARLY KEPT IN THE COURSE OF BUSINESS AND T HE ENTRIES THEREIN ARE CORRECT. IT IS FURTHER INCUMBENT UPON THE PERSON RELYING UPON THOS E ENTRIES TO PROVE THAT THE WERE IN ACCORDANCE WITH FACTS. 3.4 HONBLE SUPREME COURT IN THE RECENT CASE OF COMMON CAUSE (A REGISTERED SOCIETY) VS. UNION OF INDIA [2017] 77 TAXMANN.COM 245 (SC) , HAS ALSO RELIED ON THE RATIO LAID DOWN IN THE CASE OF V.C. SHUKLA (SUPRA) AND HAS HELD AS UNDER:- 16. WITH RESPECT TO THE KIND OF MATERIALS WHICH HA VE BEEN PLACED ON RECORD, THIS COURT IN V.C. SHUKLA'S CASE (SUPRA) HAS DEALT WITH THE MATTER THOUGH AT THE STAGE OF DISCHARGE WHEN INVESTIGATION HAD BEEN COMPLETED BUT SAME IS RELEVANT FOR THE PURPOSE OF DECISION OF THIS CASE ALSO. THIS COURT H AS CONSIDERED THE ENTRIES IN JAIN HAWALA DIARIES, NOTE BOOKS AND FILE CONTAINING LOOS E SHEETS OF PAPERS NOT IN THE FORM OF 'BOOKS OF ACCOUNTS' AND HAS HELD THAT SUCH ENTRI ES IN LOOSE PAPERS/SHEETS ARE IRRELEVANT AND NOT ADMISSIBLE UNDER SECTION 34 OF T HE EVIDENCE ACT, AND THAT ONLY WHERE THE ENTRIES ARE IN THE BOOKS OF ACCOUNTS REGU LARLY KEPT, DEPENDING ON THE NATURE OF OCCUPATION, THAT THOSE ARE ADMISSIBLE. 17. IT HAS FURTHER BEEN LAID DOWN IN V.C. SHUKLA (S UPRA) AS TO THE VALUE OF ENTRIES IN THE BOOKS OF ACCOUNT, THAT SUCH STATEMENT SHALL NOT ALONE BE SUFFICIENT EVIDENCE TO CHARGE ANY PERSON WITH LIABILITY, EVEN IF THEY ARE RELEVANT AND ADMISSIBLE, AND THAT THEY ARE ONLY CORROBORATIVE EVIDENCE. IT HAS BEEN H ELD EVEN THEN INDEPENDENT EVIDENCE IS NECESSARY AS TO TRUSTWORTHINESS OF THOS E ENTRIES WHICH IS A REQUIREMENT TO FASTEN THE LIABILITY. THE MATERIALS IN QUESTION ARE NOT ONLY IRRELEVANT B UT ARE ALSO LEGALLY INADMISSIBLE UNDER SECTION 34 OF THE EVIDENCE ACT, MORE SO WITH RESPECT TO THIRD PARTIES AND CONSIDERING THE EXPLANATION WHICH HAVE BEEN MADE BY THE BIRLA GROUP AND SAHARA GROUP, WE ARE OF THE OPINION THAT IT WOU LD NOT BE LEGALLY JUSTIFIED, SAFE, JUST AND PROPER TO DIRECT INVESTIGATION, KEEPING IN VIEW PRINCIPLES LAID DOWN IN THE CASES OF BHAJAN LAL AND V.C. SHUKLA (SUPRA). 3.5 PRESUMPTION, HOWEVER STRONG, CANNOT PARTAKE THE CHA RACTER OF EVIDENCE. 3.6 IN RESPECT OF ADDITIONS U/S 69, THERE IS HEAVY BURD EN ON THE REVENUE TO ESTABLISH THAT THE MONEY BELONGED ASSESSEE, WHICH BURDEN IS NOT DISCHARGED B Y THE DEPARTMENT WHILE MAKING THIS ADDITION. IN VIEW OF THE ABOVE SUBMISSIONS, ADDITIONS OF RS. 13,00,000 MADE BY LD. AO AND CONFIRMED BY LD. CIT(A), AS UNEXPLAINED INVESTMENTS AND INTEREST THEREON OF RS. 34,500, MAY PLEASE BE DELETED. ITA NO. 484/JP/2016 SMT. ARUNA SANKHLA VS DCIT, CENTR AL CIRCLE-1, JAIPUR 11 3.3 ON THE OTHER HAND, THE LD. DR SUPPORTED THE ORDER O F THE LD. CIT(A) ON THE ISSUE IN QUESTION. 3.4 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS PERTINENT TO MENTION THA T SIMILAR ISSUE IN THE CASE OF M/S. KAMAKSHI INTERNATIONAL VS DCIT (ITA NO.327/ JP/2017) HAS BEEN DECIDED AGAINST THE ASSESSEE BY OBSERVING AS UNDER: - 2.4 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. BRIEF FACTS OF THE C ASE ARE THAT A SEARCH U/S 132 OF THE ACT WAS CONDUCTED AT BUSINESS CUM RESIDE NTIAL PREMISES, C-33, SIKAR HOUSE, OUTSIDE CHANDPOLE GATE, JAIPUR OF SHRI MANISH TAMBI AND HIS FAMILY MEMBERS ON 23-7-2009. SHRI MANISH TAMBI AND HIS FAMILY MEMBERS ARE ENGAGED IN THE FIELD OF FINANCE AS BROKER. DURI NG THE COURSE OF SEARCH PROCEEDINGS, BOOKS OF ACCOUNTS OF SHRI MANISH TAMBI WERE FOUND AND SEIZED WHEREIN CASH TRANSACTIONS WERE REFLECTING. I N THIS CASE, IT IS NOTED THAT THE AO MADE THE ADDITION OF RS. 5,79,335/- U/S 69C OF THE ACT IN THE HANDS OF THE ASSESSEE FIRM ON THE BASIS OF A LEDGER, SEIZ ED FROM THE POSSESSION OF SHRI MANISH TAMBI. IN FIRST APPEAL, THE LD. CIT(A) HAS CONFIRMED THE ACTION OF THE AO. IT IS FURTHER NOTED THAT THE ISSUE IN QU ESTION IS COVERED BY THE DECISION DATED 07-03-2014 OF ITAT COORDINATE, JAIPU R BENCH IN ITA NO.737/JP/013 FOR THE ASSESSMENT YEAR 2010-11. THE RELEVANT OBSERVATION OF THE HON'BLE BENCH IS AS UNDER:- 7.4 AFTER CONSIDERING THE RIVAL SUBMISSIONS AND THE MATERIALS AVAILABLE ON RECORD, WE ARE OF THE CONSIDERED OPINI ON THAT THE SEIZED PAPERS CANNOT TREATED AS BOOKS OF ACCOUNT. FURTHERMORE, ON LY THE COMMISSION INCOME CAN BE ASSESSED IN THE HANDS OF THE ASSESSEE @ 0.10 % ON A TOTAL OF THE CREDITS OF RS. 91,67,81,272/-. THE ADDITION U/S 68 OF THE A CT CAN BE MADE ONLY IF ANY SUM IS FOUND CREDITED IN THE BOOKS OF THE ASSESSEE. A BOOK MEANS A COLLECTION OF SHEETS OF PAPERS BOUND TOGETHER WITH THE INTENTI ON THAT SUCH BINDING SHALL BE PERMANENT AND PAPERS USED ARE KEPT COLLECTIVELY IN ONE VOLUME. A BOOK WHICH CONTAINS SUCCESSIVE ENTRIES OF ITEMS MAYBE A GOOD M EMORANDUM BOOK BUT UNTIL THOSE ENTRIES ARE TOTALED OR BALANCED OR BOTH AS TH E CASE MAY BE, THERE IS NO RECKONING AND NO ACCOUNTS. A BOOK WHICH MERELY CONT AINS ENTRIES OF ITEMS OF ITA NO. 484/JP/2016 SMT. ARUNA SANKHLA VS DCIT, CENTR AL CIRCLE-1, JAIPUR 12 WHICH NO ACCOUNT IS MADE AT ANY TIME, IS NOT A BO OK OF ACCOUNT IN A COMMERCIAL SENSE. THUS THE ADDITION MADE U/S 68 IS NOT JUSTIFIED. IT IS NOTICED THAT OVER AND ABOVE THE PEAK CREDIT, THE A.O. HAS F URTHER MADE AN ADDITION OF RS. 52,40,137/- ON ACCOUNT OF DEBTORS EXCEEDING THE CREDITORS. WE HAVE FOUND THAT THE PEAK DETERMINED BY THE A.O. IS NOT CORRECT , OTHERWISE ALSO, WHEN ONCE PEAK AMOUNT HAS BEEN ADDED THEN NO SEPARATE ADDITIO N IS REQUIRED. IT SEEMS THAT THE A.O. HAS NOT PROPERLY PREPARED THE LIST OF DEBTORS AND CREDITORS BASED ON ANY LOGIC. THE LD CIT(A) HAS CONFIRMED THE ADDIT ION OF RS. 52,40,137/- UNDER THE PROVISIONS OF SECTION 69B OF THE ACT. THI S SECTION RELATES TO INVESTMENT MADE BY THE ASSESSEE IN THE ACQUISITION OF BULLION/JEWELLERY OR OTHER VALUABLE ARTICLES BUT IT DOES NOT SPEAK ABOUT ANY INVESTMENT IN DEBTORS. MOREOVER, SECTION 69B ALSO STIPULATES THE POSITION WHERE THE INVESTMENT EXCEEDS THE AMOUNT SHOWN IN THE BOOKS OF ACCOUNT. S INCE THE ASSESSEE DOES NOT MAINTAIN ANY BOOKS OF ACCOUNT WHEREIN THE DEBTORS A ND CREDITORS ARE REFLECTED , THEREFORE, THIS ADDITION HAS ALSO BEEN WRONGLY MA DE AND UPHELD U/S 69B OF THE ACT. HENCE, IN OUR CONSIDERED OPINION, ONLY COMMISSION I NCOME HAS TO BE DETERMINED IN THIS CASE AND NOTHING MORE . ACCORDINGLY, WE REVERSE THE FINDINGS OF THE LD CIT(A) AND ORDER TO DELETE THE E NTIRE ADDITION SO MADE. THUS GROUND NOS. 3 AND 4 OF THE ASSESSEE ARE ALLOWED. IN VIEW OF THE ABOVE FACTS, CIRCUMSTANCES OF THE CA SE AND ALSO THE ORDER OF THE HON'BLE ITAT JAIPUR BENCH (SUPRA), WE FIND NO REASO N TO INTERFERE WITH THE ORDER OF THE LD. CIT(A) ON THE ISSUE IN QUESTION. T HUS THE SOLITARY GROUND OF THE ASSESSEE IS DISMISSED. TAKING INTO CONSIDERATION THE DECISION IN THE CASE OF M/S. KAMAKSHI INTERNATIONAL VS DCIT (SUPRA), WE FIND NO REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A). THUS GROUND NO. 2 AND 3 OF THE ASSESSEE ARE DISMISSED. 4.1 THE GROUND NO. GROUND NO. 4 OF THE ASSESSEE IS REGARDING UPHOLDING THE ADDITION OF RS. 1.38 CRORES U/S 68 OF THE ACT BY THE LD. ITA NO. 484/JP/2016 SMT. ARUNA SANKHLA VS DCIT, CENTR AL CIRCLE-1, JAIPUR 13 CIT(A). THE FACTS AS EMERGES FROM THE ORDER OF THE LD. CIT(A) ARE AS UNDER:- 3.2.2 I HAVE DULY CONSIDERED THE ASSESSEES SUBMISS ION AND ALSO CAREFULLY GONE THROUGH THE ASSESSMENT ORDER. I HAVE TAKEN A NOTE O F FACTUAL MATRIX OF THE CASE AS WELL AS APPLICABLE CASE LAWS RELIED UPON. ASSESSEE HAS SHOWN ADVANCE C ASH RECEIPTS AMOUNTING TO RS. 1.38 CRORES ON ACCOUNT OF ADVANCE AGAINST SALE OF KHATWARA AGRICUL TURAL LAND JAIPUR. THE CASH PAYMENTS OF RS. 65 LAKHS PURPORTED TO HAVE BEEN MADE TO THE ASSESSEE B Y M/S. RAVIK FINANCE & INVESTMENT PVT LTD , MUMBAI AND RS. 73 LAKHS BY M/S MURTI REAL ESTATE PV T LTD NAVI MUMBAI DURING THE YEAR CONSIDERATION. AO TREATED IT AS BOGUS TRANSACTIONS AND GAVE HIS DETAIL REASONING IN PARA 18 TO 33 PG 7 TO 11 OF THE ASSESSMENT ORDER. THE RELEVANT FINDI NGS OF THE AO ARE SUMMARIZED AS UNDER: A) THE TRANSACTIONS WERE MADE IN CASH. THE REASON FOR MAKING SUCH A HUGE TRANSACTIONS WAS NOT VERY CONVINCING. B) A SURVEY OPERATION WAS CONDUCTED ON 23.07.2009 TO V ERIFY THE GENUINENESS OF THE CONCERNS AT THE GIVEN ADDRESS AND IN THE SURVEY OPERATION, M/S. RAVIK FINANCE & INVESTMENT PVT LTD, MUMBAI AND M/S MURTI REAL ESTATE PVT LTD NAVI MUMB AIWERE FOUND TO BE NON -EXISTENT ON THE GIVEN ADDRESSES. C) ACB, GOVT. OF RAJASTHAN, JAIPUR HAS ALSO CONDUCTED SIMILAR ENQUIRIES AGAINST THOSE CONCERNS AND FOUND THEM NON-EXISTENT WHICH FURTHER PROVES TH E FINDING OF THE AO. D) ASSESSEE SAID TO HAVE ENTERED TO THE AGREEMENT WITH THE NEW DIRECTOR SURESH NAVSARE, WHO WAS NOT A DIRECTOR OF M/S. RAVIK FINANCE & INVESTME NT PVT LTD, MUMBAI ON 02.01.2009 AND SH ASHISH VERMA WAS ALSO NOT A DIRECTOR OF M/S MURT I REAL ESTATE PVT LTD NAVI MUMBAI, MEANING THEREBYI.E., THE DATE OF SAID AGREEMENT OF SALE /ON THE DATE OF TRANSACTION. MEANING THEREBY ON THE DATE, HE WAS NOT IN A CAPACITY TO EN TER INTO SUCH AN AGREEMENT OF SALE. E) ON THE DATE OF AGREEMENT SH NAYAN ARVIND SHAH WAS DIRECTOR OF M/S. MURTI REAL ESTATE PVT. LTD. WHO HAS CONFIRMED THAT NO SUCH TRANSACTIONS WE RE PERFORMED BY THE ASSESSEE. SIMILARLY, SH RAVI KEWLANI WHO WAS DIRECTOR OF M/S RAVIK FINAN CE & INVESTMENT PVT LTD HAS ALSO DENIED TO HAVE ENTERED SUCH AGREEMENT WITH THE ASSE SSEE F) ON THE DATE OF AGREEMENT BOTH THE CONCERNS NAMELY, M/S MURTI REAL ESTATE PVT LTD NAVI MUMBAI AND M/S. RAVIK FINANCE & INVESTMENT PVT LTD, MUMBAI WERE NOT HAVING SUFFICIENT CASH BALANCE SO AS TO ADVANCE RS. 73 LAKHS& 65 LAKH S RESPECTIVELY TO THE ASSESSEE. G) ON PERUSAL OF AGREEMENT DT 02.01.2009, AO HAS NOTIC ED THAT WHILE NOTIFYING THE DOCUMENT, THE NOTARY HAS SIMPLY PUT A STAMP ATTESTED AND NOTAR Y, JAIPUR(RAJASTHAN) AND NO REGISTERED NO. OF THE NOTARY IS APPEARING ON THE AGREEMENT WHICH RAISES SERIOUS DOUBT ABOUT GENUINENESS AND AUTHENTICITY OF THIS LEGAL DOCUMENT . ITA NO. 484/JP/2016 SMT. ARUNA SANKHLA VS DCIT, CENTR AL CIRCLE-1, JAIPUR 14 ASSESSEE DURING THE APPELLATE PROCEEDING HAS NOT C ONTROVERTED AOS AFOREMENTIONED FINDINGS. IN VIEW OF THESE FACTS AND CIRCUMSTANCES OF THE CAS E AS DISCUSSED ABOVE, ADDITION MADE BY THE AO OF RS. 1,38,00,000 ON ACCOUNT OF UNEXPLAINED CASH IS H EREBY SUSTAINED. ASSESSEES APPEAL IN GR NO. 2 FAILS . 4.2 DURING THE COURSE OF HEARING, THE LD.AR OF THE ASSESSEE PRAYED FOR DELETION OF ADDITION SUSTAINED BY THE LD. CIT(A) AM OUNTING TO RS. 1.38 CRORES U/S 68 OF THE ACT FOR WHICH THE LD.AR OF THE ASSESSEE FILED THE FOLLOWING WRITTEN SUBMISSION. 3. SUBMISSIONS 3.1 OUR SUBMISSIONS BEFORE LD. CIT(A), REPRODUCED B Y HIM AT PAGES 18 TO 27 OF HIS ORDER, MAY PLEASE BE CONSIDERED IN CORRECT PERSPECTIVE. 3.2 THE FINDINGS OF LD. CIT(A) ARE CONTRARY TO LAW AND FACTS AS SUBMITTED BELOW:- (A) THE TRANSACTIONS WERE MADE IN CASH. THE REASON FOR MAKING SUCH A HUGE TRANSACTIONS WAS NOT VERY CONVINCING. THERE IS NO PROHIBITION UNDER THE LAW TO RECEIVE CA SH AS ADVANCE TOWARDS AGREEMENT TO SELL. THE SAID C ASH WAS DULY RECORDED IN THE CASH BOOK OF THE APPELLANT [PB 18-23] . THE TRANSACTION WAS DULY SUPPORTED BY VALID AGREEMENT BETWEEN THE PARTIES WHICH WAS FOUND AND SEIZED DURING THE COURSE OF SEARCH. MERELY, BECAUSE THE TRANSACTION WAS IN CASH, THE SAME CANNO T BE DOUBTED. (B) A SURVEY OPERATION WAS CONDUCTED ON 23.07.2009 TO VERIFY THE GENUINENESS OF THE CONCERNS AT THE GIVEN ADDRESS AND IN THE SURVEY OPERATION, M/S. RAVIK FIN ANCE & INVESTMENT PVT. LTD, MUMBAI AND M/S MURTI REAL ESTATE PVT. LTD. NAVI MUMBAI WERE FOUND TO BE NON-EXISTENT ON THE GIVEN ADDRESS. THE BUYER COMPANIES WERE INCORPORATED UNDER THE PRO VISIONS OF COMPANIES ACT, 1956. THIS FACT IS NOT DOUBTED. NO EVIDENCE WAS BROUGHT ON RECORD BY THE D EPARTMENT IN SUPPORT OF ITS ALLEGATION THAT THE COMPANIES WERE NOT EXISTENT ON THE GIVEN ADDRESSES. WITHOUT PREJUDICE TO THIS, IT IS SUBMITTED THAT TH E COMPANIES ACT, 1956 ALLOWS COMPANIES TO CHANGE THEI R REGISTERED OFFICE. HOWEVER, ON ANY GIVEN POINT OF TIME, EXACT ADDRESS OF ANY COMPANY CAN BE ASCERTAIN ED FROM THE OFFICE OF REGISTRAR OF COMPANIES. NO SU CH EFFORTS HAVE BEEN MADE EXCEPT MAKING UNSUBSTANTIATE D ALLEGATIONS. (C) ACB, GOVT. OF RAJASTHAN, JAIPUR HAS ALSO CONDUCTED SIMILAR ENQUIRIES AGAINST THOSE CONCERNS AND FOUND THEM NON-EXISTENT WHICH FURTHER PROVES THE FI NDING OF AO. LOWER AUTHORITIES HAVE REFERRED AND RELIED ON THE E NQUIRIES CONDUCTED BY ACB, GOVERNMENT OF RAJASTHAN. HOWEVER, NO SUCH REPORT OF ACB WAS MADE AVAILABLE T O THE ASSESSEE AT ANY STAGE SO AS TO GIVE HER OPPORTUNITY TO REBUT THE SAME. (D) ASSESSEE SAID TO HAVE ENTERED TO THE AGREEMENT WIT H THE NEW DIRECTOR SURESH NAVSARE, WHO WAS NOT A DIRECTOR OF M/S. RAVIK FINANCE & INVESTMENT PVT. LT D, MUMBAI ON 02.01.2009 AND SHRI ASHISH VERMA WAS ALSO NOT A DIRECTOR OF M/S MURTI REAL ESTATE PV T. LTD NAVI MUMBAI, MEANING THEREBY I.E., THE DATE OF SAID AGREEMENT OF SALE/ON THE DATE OF TRANSACTION. MEANING THEREBY ON THE DATE, HE WAS NOT IN A CAPACI TY TO ENTER INTO SUCH AN AGREEMENT OF SALE. THE AGREEMENTS ENTERED INTO BY THE PERSONS ARE ALLE GED BY THE LOWER AUTHORITIES TO BE NOT DIRECTORS ON THE DATES OF ENTERING INTO THE AGREEMENTS. HOWEVER, COM PANIES HAVE NOT REFUTED THE AGREEMENT. NO EVIDENCE HAS ITA NO. 484/JP/2016 SMT. ARUNA SANKHLA VS DCIT, CENTR AL CIRCLE-1, JAIPUR 15 BEEN BROUGHT ON RECORD IN SUPPORT OF THE ALLEGATION THAT THESE PERSONS WERE NOT DIRECTORS OF THESE RES PECTIVE COMPANIES ON THE DATES OF AGREEMENT. HOWEVER, THESE PERSONS WERE, OTHERWISE, DIRECTORS OF THESE COMPAN IES HAVE NOT BEEN DISPUTED OR DOUBTED BY THE LOWER AUTH ORITIES. (E) ON THE DATE OF AGREEMENT SH. NAYAN ARVIND SHAH WAS DIRECTOR OF M/S. MURTI REAL ESTATE PVT. LTD. WHO HAS CONFIRMED THAT NO SUCH TRANSACTIONS WERE PERFOR MED BY THE ASSESSEE. SIMILARLY, SH. RAVI KEWLANI WHO WAS THE DIRECTOR OF M/S RAVIK FINANCE & INVESTM ENT PVT. LTD. HAS ALSO DENIED TO HAVE SUCH AGREEMENT WITH THE ASSESEE. THE ALLEGATION OF DENIAL IS NOT SUBSTANTIATED BY TH E DEPARTMENT BY BRINGING APPROPRIATE MATERIAL ON RE CORD. NEITHER COPIES OF STATEMENTS RECORDED WERE PROVIDED NOR OPPORTUNITIES FOR CROSS EXAMINATIONS WERE GIVE N. (F) ON THE DATE OF AGREEMENT BOTH THE CONCERNS NAMELY, M/S MURTI REAL ESTATE PVT LTD NAVI MUMBAI AND M/S RAVIK FINANCE & INVESTMENT PVT. LTD, MUMBAI WER E NOT HAVING SUFFICIENT CASH BALANCE SO AS TO ADVANCE RS. 73 LAKHS & 65 LAKHS RESPECTIVELY TO THE ASSESSEE. THE ALLEGATION AGAIN IS UNSUBSTANTIATED. ONCE THE A GREEMENT IS SIGNED & CASH HAVING GIVEN IS CONFIRMED , NON-AVAILABILITY OF CASH (UNSUBSTANTIATED ALLEGATIO N) HAS NO RELEVANCE FOR THE ASSESSMENT OF THE APPEL LANT. (G) ON PERUSAL OF AGREEMENT DT 02.01.2009, AO HAS NOTI CED WHILE NOTIFYING THE DOCUMENT, THE NOTARY HAS SIMPLY PUT A STAMP ATTESTED AND NOTARY, JAIPUR ( RAJASTHAN) AND NO REGISTERED NO. OF THE NOTARY IS APPEARING ON THE AGREEMENT WHICH RAISES S ERIOUS DOUBT ABOUT GENUINENESS AND AUTHENTICITY OF THIS LEGAL DOCUMENT. THIS AGREEMENT IS NOTARIZED WHICH FACT IS NOT DISPU TED. SO-CALLED LAPSE ON THE PART OF FUNCTIONING OF NOTARY, IF ANY, HAS NO RELEVANCE FOR THE APPELLANT. MOREOVE R, THERE IS NO DISPUTE THAT AGREEMENT IS SIGNED BY BOTH THE PARTIES AND BOTH ARE OWNING AND ADMITTING THE SAME. ANY FRIVOLOUS MATTER CANNOT NEGATE THE VALIDITY OF THE AGREEMENT. 3.3 IT IS ALSO SUBMITTED THAT NO INCRIMINATING DOCU MENTS, SUGGESTING THIS TRANSACTION TO BE BOGUS, WAS FOUND DURING THE SEARCH OPERATION. HAD IT BEEN A MANAGED TRANSACTION, SOME TRACES OF THE SAME WOULD HAVE BEE N FOUND. BUT NOTHING WAS FOUND SUGGESTING THAT A CONTRARY TRANSA CTION HAD TAKEN PLACE THAN WHAT WAS RECORDED IN THE BOOKS. 3.4 THE CONTENTS OF THE AGREEMENT ARE PRESUMED TO B E TRUE IN VIEW OF THE PROVISIONS OF SECTION 132(4A) . IT IS BINDING ON THE DEPARTMENT. 3.5 RELIANCE IS PLACED ON THE DECISION OF THE HONB LE JURISDICTIONAL HIGH COURT IN THE CASE OF PR. CIT VS SHUBH MINES PVT LTD (D.B. INCOME TAX APPEAL NO. 96/ 15), WHERE EVEN ADDITION IS HELD TO BE UNJUSTIFIED UNLE SS IT IS PROVED THAT MONEY BELONGED TO THE ASSESSEE. RELE VANT PORTION OF THE DECISION IS EXTRACTED BELOW: IN THE CONSIDERED OPINION OF THIS COURT, IN ABSENC E OF ANY COGENT EVIDENCE ON RECORD ESTABLISHING THA T THE MONEY SHOWN TO HAVE RECEIVED AS SHARE APPLICATION M ONEY, WAS AS A MATTER OF FACT, UNACCOUNTED MONEY BELONGING TO THE ASSESSEE COMPANY, THE FINDING ARRI VED AT BY THE AO, WHICH IS BASED ON SUSPICION, HAS RIGHTLY BEEN HELD NOT SUSTAINABLE IN THE EYES OF LA W. IN VIEW OF ABOVE SUBMISSIONS, ADDITION OF RS. 1,38, 00,000 MADE BY LD. AO AND CONFIRMED BY CIT(A), MAY PLEASE BE DELETED. 4.3 ON THE OTHER HAND, THE LD. DR SUPPORTED THE ORD ER OF THE LD. CIT(A). ITA NO. 484/JP/2016 SMT. ARUNA SANKHLA VS DCIT, CENTR AL CIRCLE-1, JAIPUR 16 4.4 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS NOTED THAT THE AO MADE T HE ADDITION OF RS. 1.38 CRORES U/S 68 OF THE ACT TREATING THE AMOUNT AS UNE XPLAINED CASH AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE WITH THE OBSERVATION THAT THE ASSESSEE COULD NOT PROVE THE SOURCE OF ADV ANCES RECEIVED. IN FIRST APPEAL, THE LD. CIT(A) HAS SUSTAINED THE ADDITION M ADE BY THE AO. IT IS NOTED FROM THE AVAILABLE RECORDS THAT DURING THE SE ARCH OPERATION INCRIMINATING DOCUMENTS SHOWING CASH RECEIPTS AMOUN TING TO RS. 1.38 CRORES LACS ON ACCOUNT OF ADVANCE FOR SALE OF KHATW ARA AGRICULTURE LAND. THE ABOVE CASH PAYMENT HAD BEEN MADE BY M/S. RAVIK FINANCE & INVESTMENT PVT. LTD, C-33/1-2 NIVARA CO-OPERATIVE H OUSING SOCIETY, SECTOR-3, SANPADA, NAVI MUMBAI OF RS. 65.00 LACS AN D FROM MISS. MURTI REAL ESTATE PVT. LTD L-33/1-2, NIVARA CO-OPERATIVE HOUSING SOCIETY, SECTOR-3, SANPADA, NAVI MUMBAI OF RS. 73.00 LACS TO TALLLING TO RS. 1.38 CRORES DURING THE YEAR UNDER CONSIDERATION. . IN OR DER TO VERIFY THE GENUINENESS OF THE ABOVE CONCERN, A SURVEY OPERATIO N WAS CONDUCTED ON 28-07-2009 AT THE ADDRESSES OF THE ABOVE MENTIONED CONCERN ALONGWITH THREE OTHER CONCERNS FROM WHOM OTHER FAMILY MEMBERS WERE SAID TO HAVE RECEIVED CASH PAYMENT AGAINST SALE OF CERTAIN PROPE RTIES. THE REVENUES ITA NO. 484/JP/2016 SMT. ARUNA SANKHLA VS DCIT, CENTR AL CIRCLE-1, JAIPUR 17 CLAIM IS THAT DURING THE COURSE OF SURVEY THESE C ONCERNS WERE FOUND TO BE NON-EXISTENT. HOWEVER, THE ASSESSEE CLAIMS THAT THE ABOVE CONCERNS WERE HAVING PAN AND THE NEW ADDRESS COULD HAVE BEEN ASCERTAINED FROM REGISTRAR OF COMPANIES. IT IS ALSO NOTED THAT THE A CB, GOVT. OF RAJASTHAN, JAIPUR HAS CONDUCTED THE SIMILAR ENQUIRIES AGAINST THE CONCERNS AT MUMBAI AND FOUND THE CONCERNS WERE NOT EXISTING ON THE GIVEN REGISTERED OFFICE ADDRESSES. THE LD.AR OF THE ASSESSEE SUBMITT ED THAT LOWER AUTHORITIES HAVE REFERRED AND RELIED ON THE ENQUIRI ES CONDUCTED BY THE ACB, GOVT. OF RAJASTHAN, HOWEVER, NO SUCH REPORT OF ACB WAS MADE AVAILABLE TO THE ASSESSEE AT ANY STAGE. ASSESSEE WA S NOT PROVIDED OPPORTUNITY TO CONTROVERT THE REPORT IF ANY. THERE IS VIOLATION OF NATURAL JUSTICE. LAW DOES NOT ALLOW SUCH ACT. TAKING INTO CONSIDERATION ALL THE ABOVE FACTS, CIRCUMSTANCES OF THE CASE AND ALSO INT O CONSIDERATION THE WRITTEN SUBMISSIONS OF THE ASSESSEE, IT WILL BE IN THE INTEREST OF EQUITY AND JUSTICE TO RESTORE THE ISSUE TO THE FILE OF THE AO TO DECIDE IT AFRESH BY PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IT IS ALSO PERTINENT TO MENTION HERE THAT THE ASSESSEE BE PRO VIDED THE REPORT OF ACB ON THIS ISSUE TO CONTEST ITS CASE APPROPRIATEL Y. THUS THE GROUND NO. 4 OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOS ES. ITA NO. 484/JP/2016 SMT. ARUNA SANKHLA VS DCIT, CENTR AL CIRCLE-1, JAIPUR 18 5.0 IN THE RESULT, THE APPEAL FILED BY THE ASSESSE E IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 1-12-201 7. SD/- SD/- DQY HKKJR HKKXPUN (KUL BHARAT) ( BHAGCHAND) U;KF;D LNL; / JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 1 /12/ 2017 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SMT. ARUNA SANKHLA, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE DCIT, CENTRAL CIRCLE-1 , JAIP UR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 484/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ @ ASSISTANT. REGISTRAR