Sh. Santosh Kumar Pandey S/o/, Auraiya V. A.C.I.T.-2, Auraiya

ITA 496/AGR/2012

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9242 (ITAT-AGRA)
• Duration Of Justice: 7 year(s) 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 09-07-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 17-10-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUNIL BAJPAI
• Assessee Lawyers: R C TOMAR
• Keywords: Unexplained investment; Business income; Income from undisclosed sources; Search and seizure; Document seized; Principle of natural justice; Opportunity of cross examination; Third party statement; Non compliance; Onus to prove; Documents seized
• Section: 37(1); 250; 191; 208; 43; 48; 13; 131; 68; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH: AGRA BEFORE SHRI LALIET KUMAR, JUDICIAL MEMBERAND DR. MITHA LAL MEENA, ACCOUNTANT MEMBER I.T.A NO.496/AGRA/2012 (ASSESSMENT YEAR: 2005-06) SANTOSH KUMAR PANDEY, S/O.LATE SHRI BABU RAM PANDEY, JALAUNCHAURAHA, DIST. AURAIYA (UP) PAN: AKWPP0804H (APPELLANT) VS. ACIT-2,AGRA (RESPONDENT) APPELLANT BY SHRI R.C.TOMAR, AR RESPONDENT BY SHRI SUNIL BAJPAI, CIT-DR ORDER PER LALIET KUMAR, J.M.: THIS APPEAL OF ASSESSEE IS DIRECTED AGAINST THE ORD ER OF COMMISSIONER OF INCOME TAX (APPEALS)-1, AGRA, DATED 31-03-2012 F OR THE AY.2005-06. 2. BRIEF FACTS OF THE CASE ARE THAT, IN THIS CASE, ASSESSMENT ORDER HAS BEEN PASSED U/S.143(3) OF THE INCOME TAX ACT [ACT] DT.22 -12-2006, AFTER A SEARCH OPERATION WAS CONDUCTED IN THE PREMISES OF THE ASSE SSEE ON 03-03-2005. AGAINST THE SAID ASSESSMENT ORDER, ASSESSEE FILED A N APPEAL BEFORE THE DATE OF HEARING 06-01-2020 DATE OF PRONOUNCEMENT 08-01-2020 I.T.A NO. 496/AGRA/2012 2 CIT(A), WHO PARTLY ALLOWED THE APPEAL OF ASSESSEE. AGGRIEVED WITH THE ORDER OF THE LD.CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL, BY RAISING VARIOUS GROUNDS. THE GROUND-WISE DISCUSSION IS AS U NDER: 3. GROUND NO.1PERTAINS TO ESTIMATION OF HOUSE HOLD EXPENSES AT RS. 2,50,000.00 AGAINST 1,70,000.00 SHOWN BY ASSESSEE W HEN ASSESSEE IS RESIDING IN VILLAGE AND SUPPLEMENTING HIS EXPENSES BY AGRICULTURE AND ITS BY PRODUCT IS ARBITRARY UNJUST AND EXCESSIVE: THE ASSESSEE IS IN APPEAL AGAINST ADDITION SUSTAINE D AT RS. 80,000/-. 3.1. THE FACTS ARE THAT ASSESSEE IS A SENIOR CITIZE N, RETIRED FROM ARMY AS A SIPAHI. GETTING PENSION DULY DISCLOSED AT 26,793/- IN THE RETURN AND ASSESSED AS SUCHIS BASICALLY AN AGRICULTURIST AND BELONGS TO AGRICULTURIST FAMILY. INCOME FROM AGRICULTURE DULY SHOWN AT 3,40,000/- AN D ACCEPTED BY CIT(A). SUPPLEMENTING HIS LODGING EXPENSES FROM AGRICULTURE E.G., WHEAT CORN PULSES VEGETABLE GHEE AND OIL ETC. BOARDING IS ALSO FREE B ECAUSE HE IS RESIDING WITH HIS WIFE ONLY. THUS, NO EXPENSES ON BOARDING AND LO DGING AND LEADING A SIMPLE LIFE IN VILLAGE. THUS THE WITHDRAWALS FOR PE RSONAL EXPENSES INCLUDING AMOUNT GIVEN TO HIS SONS TO MEET OUT THE LODGING AN D BOARDING AND OTHER DAY TO DAY EXPENSES IS MORE THAN ENOUGH. HE IS NOT A ME MBER OF ANY RECREATION I.T.A NO. 496/AGRA/2012 3 CLUB ETC ALSO. BESIDES HE IS TEETOTALER. FINALLY, LD.COUNSEL FOR THE ASSESSEE ARGUED THAT THE ADDITION SUSTAINED BY CIT (A) AT RS . 80,000/- BY ESTIMATING HIS PERSONAL EXPENSES AT RS. 2,50,000/- AGAINST RS. 1,70,000/- SHOWN BY ASSESSEE WITHOUT BRINGING ANY ADVERSE MATERIAL ON R ECORD TO SUPPORT, THE SAME MAY KINDLY BE DIRECTED TO BE DELETED. 3.2. LD.DR FOR THE REVENUE, OPPOSED THE CONTENTIONS RAISED BY LD.COUNSEL FOR THE ASSESSEE. 3.3. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE MATERIAL AVAILABLE ON RECORD. THOUGH THE ASSESSEE CLAIMS T O BE AN AGRICULTURIST BUT THE CLOSURE SCRUTINY OF THE CASE REVEALS THAT THE A SSESSEE IS CO-OWNER OF 300 BIGHAS OF LAND AND FURTHER, HE IS INTO THE BUSINESS OF MONEY LENDING, CONTRACT BUSINESS, THEREFORE, IN OUR VIEW, THE ORDER PASSED BY THE LD.CIT(A) WAS A REASONABLE ORDER AS IT MERELY RESTRICTED TO RS.2,50 ,000 /-. HENCE, WE DO NOT FIND ANY ERROR IN THE ORDER OF THE LD.CIT(A). HENC E, THIS GROUND IS DISMISSED. I.T.A NO. 496/AGRA/2012 4 4. GROUND NO.2 PERTAINS TO SUSTENANCE OF ADDITION O F RS. 4,50,000/- BEING LOANS RAISED FROM FARMER AND SUPPORTED BY THE IR AFFIDAVITS IS ILLEGAL AND ARBITRARY. 4.1. LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT AS PER WRITTEN SUBMISSION PB - 9 AND THE CASH FLOW STATEMENT SUBMITTED WITH T HE RETURN AND BEFORE CIT(A) (PB - 110) IT WAS MADE CLEAR THAT UNSECURED LOAN OF RS. 5,00,000/- PERTAIN TO AY.2004-05 AND RS. 4,50,000/- WAS TAKEN IN AY. 2005-06. THIS MADE THE TOTAL AT RS. 14,50,000/-AND RS. 5,00,000.0 0 HAS BEEN CONSIDERED IN AY.2004-05.FOR THE LOANS RAISED DURING THE AY.2005- 06 AFFIDAVITS OF INDIVIDUAL FARMERS GIVING COMPLETE ADDRESS, NAME, A MOUNT, DATE OF LOAN DULY NOTARIZED WERE PRODUCED BEFORE CIT(A) AS PER COPY O F PB NO. 84 TO 109. THE AFFIDAVITS ARE AVAILABLE ON CIT(A) AND THE RECO RD OF AO AS WELL. THERE WERE SUBJECTED TO REMAND PROCEEDINGS. 4.2. LD.COUNSEL ALSO SUBMITTED THAT IN THE COURSE O F REMAND PROCEEDINGS BEFORE THE ASSESSING OFFICER U/S.250(4) OF THE ACTI T WAS SUBMITTED (PB - 83) AS UNDER: 'AS REGARDS THE PRODUCTIONS OF THE DEPOSITORS IS CO NCERNED IT MAY KINDLY BE APPRECIATED THAT COMPLETE ADDRESSES OF THE DEPOSITO RS ALONG WITH CONFIRMATION STAND FILES SUPPORTED BY THE DEPOSITIONS MADE THROU GH AFFIDAVIT OF I.T.A NO. 496/AGRA/2012 5 EACH DEPOSITORS. SINCE THE DEPOSITORS ARE RESIDING IN VILLAGE SITUATED MORE THAN 150KM AWAY IT IS REQUESTED THAT THEY MAY KINDLY BE EXAMINE BY ISSUE OF COMMISSIONS OR BY DEPUTING YOUR INSPECTOR OR BY ISS UING SUMMONS TO THEM ON THE ADDRESS WITH THEIR COMPLETE IDENTITY FURNISHED AS P ER AFFIDAVIT' HOWEVER, THE LD.CIT(A) HAS CONFIRMED THE ADDITION O N THE GROUND THAT THESE AFFIDAVITS CANNOT BE ADMITTED AS ADDITIONAL EVIDENC E AS THE CONDITION UNDER RULE 46A HAS NOT BEEN SATISFIED AND ASSESSEE HAS FA ILED TO ESTABLISH IDENTITY AS WELL AS CREDITWORTHINESS. 4.3. FINALLY, LD.COUNSEL ARGUED THAT IT IS SETTLED LAW AS PER HON'BLE ALLAHABAD HIGH COURT DECISION THAT WHERE THE CIT(A) HAS CALLED FOR THE REMAND REPORT FROM THE AO, THE CIT (A) HAS EXERCISE D HIS POWERS MENTIONED IN SECTION 250 (4) AND THERE IS NO VIOLATION OF RUL E 46 A [VIDE REMAND REPORT PARA 3(CIT LUCKNOW VS AKASH CONSTRUCTION (P) LTD ITA NO. 8 OF 2011 DATED 23.01.2012) AND THE ITAT AGRA BENCH DECI SIONS IN THE CASE OF THE DCIT VS. MUKESH KUMAR AGARWAL ITA NO.374/AGRA/2 010 DATED 06.03.2012. THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF L. SOHANLAL GUPTA VS. CIT REPORTED IN 33 ITR 786 HAS HELD AS UNDER: AFTER THE ASSESSEE HAD FILED THE AFFIDAVIT, HE WAS NEITHER CROSS EXAMINE ON THAT POINT NOR WAS HE CALLED UPON TO PRODUCE DOCUMENTARY EVIDENCE, CONSEQUENTLY THE ASSESSEE WAS ENTITLED TO ASSUME THAT THE INCOME TAX AUTHORITIES WERE SATISFIED WITH AFFIDAVITS HAS SUFFICIENT PROOF ON THIS POINT. I.T.A NO. 496/AGRA/2012 6 HON'BLE BOMBAY HIGH COURT IN THE CASE OF SMT PANNA DEVI CHAUDHARY (1994) 208 ITR 849 (BOM) AS HELD THAT 'INCOME FROM UNDISCLOSED SOURCES - BURDEN OF PROOF - RECEIPT OF AMOUNT - BURDEN PROVIN G THAT RECEIPT CONSTITUTE INCOME OF ASSESSEE IS ON REVENUE' SINCE ALL CREDIBLE EVIDENCE WERE FURNISHED ESTABLIS HING THE CASE ON MERIT AND THE AO HAS NOT BEEN ABLE TO DISCREDIT THE EVIDENCE BROUGHT ON RECORD IN REMAND PROCEEDINGS, AND THE AO DID NOT PURSUE THE M ATTER FURTHER, THE ADDITION SUSTAINED BY CIT(A) WITHOUT BRINGING ANY I OTA OF EVIDENCE DISCREDITING THE EVIDENCE FURNISHED BY THE ASSESSEE MERELY BY SAYING THAT ADDITION EVIDENCE IS NOT ACCEPTABLE U/S.4 A OF THE ACT IS ILLEGAL AND ARBITRARY. HON'BLE SUPREME COURT IN THE CASE ORISSA CORPORATIO N (1986) 159 ITR 78 HAS OBSERVED THAT WHEN THE ASSESSEE FURNISHES NAMES AND ADDRESS OF THE ALLEGED CREDITORS, THE BURDEN SHIFTS TO DEPA RTMENT TO ESTABLISH REVENUES CASE AND IN ORDER SUSTAIN THE ADDITION THE REVENUE HAS TO PURSUE THE ENQUIRY AND TO ESTABLISH LACK OF CREDIT WORTHIN ESS AND MERE NON COMPLIANCE OF SUMMONS ISSUED BY THE AO UNDER SECTIO N 131 BY ALLEGED I.T.A NO. 496/AGRA/2012 7 CREDITORS WILL NOT BE SUFFICIENT TO DRAW ANY ADVERS E INFERENCE AGAINST THE ASSESSEE. HON'BLE JURISDICTIONAL ALLAHABAD HIGH COURT IN THE CASE OF CIT VS S. KAMALJEETSINGH (2006) 147 TAXMANN 18 (ALL) ON THE I SSUE OF DISCHARGE OF ASSESSEE'S ONUS IN RELATION TO CASH CREDIT HAS OBSE RVED AND HELD AS UNDER: 'THE ASSESSEE DISCHARGED THE ONUS BY PLACING CONFIR MATION LETTER OF THE CASH CREDITORS, (II) THEIR AFFIDAVIT (HI) THE FULL ADDRE SS AND GIR, IT HAS BEEN FOUND THAT ASSESSEE BURDEN STOOD DISCHARGED AND SO NO ADD ITION TO HIS TOTAL INCOME ON ACCOUNT OF CASH CREDIT WAS CALLED FOR IN THE CASE OF KANAHAIA LAL JANGID VS ACIT (2008) 2 017 CTR (RAJ) 354 WHILE INTERPRETING SECTION 68 MORE SPECIFICALLY THE ISSUE OF BURDEN OF PROOF HAS HELD:- 'WHILE IT WAS THE ASSESSEE'S BURDEN TO FURNISH EXPL ANATION RELATING TO SUCH CASH CREDIT, THE ASSESSEE'S BURDEN DOES NOT EXTEND BEYON D PROVING THE EXISTENCE OF CREDITORS AND FURTHER PROVING THAT SUCH CREDITORS O WN US TO HAVE ADVANCED THE AMOUNT CREDITED IN THE ACCOUNT OF ASSESSEE. THE BUR DEN DOES NOT GO BEYOND TO PUT THE ASSESSEE UNDER ANY OBLIGATION TO FURTHER PROVE THAT WHERE FROM THE CREDITORS HAS GOT OR PROCURED THE MONEY TO ADVANCE TO THE ASS ESSEE. ADDITION UNDER SECTION 68 CANNOT BE MADE UNLESS IT CAN BE SHOWN BY THE DEP ARTMENT THAT THE SOURCE OF SUCH MONEY COMES FROM THE ASSESSEE HIMSELF OR SUCH SOURCE COULD BE TRACED TO THE ASSESSEE ITSELF HON'BLE ALLAHABAD HIGH COURT JUDGMENT IN THE CASE O F NATHU RAM PREM VS. CIT 49 ITR 561 HAS HELD THAT IT IS THE DUTY OF THE INCOME TAX OFFICER TO ENFORCE THEATTENDANCE OF THE WITNESS IF HIS EVIDENC E IS MATERIAL IN EXERCISE OF I.T.A NO. 496/AGRA/2012 8 HIS POWERS U/S 37(1) OF THE ITACT READ WITH ORDER X VL, RULE IO OF THE CIVIL PROCEDURE CODE. THUS, IN VIEW OF THE SUBMISSIONS MADE AS ABOVE AND THE LEGAL POSITION, LD.COUNSEL SUBMITTED THAT THE ADDITION SUSTAINED BY CIT(A) BEING ILLEGAL AND ARBITRARY AND THE SAME MAY KINDLY BE DIRECTED T O BE DELETED. 4.4. LD.DR FOR THE REVENUE, OPPOSED THE CONTENTIONS RAISED BY LD.COUNSEL FOR THE ASSESSEE. 4.5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE IN THE APPELLATE PROCEEDINGS HAD FILED THE AFFIDAVITS OF THE FARMERS AND HAVE GIVEN THE NAME A ND ADDRESSES TO THE LD.CIT(A) FOR THE PURPOSE OF THE VERIFICATION OF TH E AMOUNT. THE LD.CIT(A) HAD SENT THE DOCUMENT ALONG WITH SUBMISSIONS TO THE AO, WHO HAD GIVEN THE REMAND REPORT AND HAD NOT MENTIONED ANYTHING ABOUT THE AFFIDAVITS AND THE LOANS. IN OUR VIEW, IT IS THE DUTY OF THE AO TO EX AMINE THE AFFIDAVITS AND THE DEPONENTS OF THE AFFIDAVITS TO FIND OUT THE TRUTH I N THE SUBMISSIONS MADE IN THE AFFIDAVITS. NOTHING HAD BEEN DONE BY THE AO NO ADVERSE MATERIAL WAS BROUGHT ON RECORD BY THE AO OR BY THE LD.CIT(A) IN THE APPELLATE PROCEEDINGS. IT IS A SETTLED POSITION OF LAW THAT THE ADDITION CANNOT BE MADE I.T.A NO. 496/AGRA/2012 9 ON THE BASIS OF SOME COGENT AND RELIABLE EVIDENCE A ND NOT ON THE BASIS OF CONJECTURES AND SURMISES. ACCORDINGLY, THE GROUND N O.2 OF APPEAL OF ASSESSEE IS ALLOWED. 5. GROUND NO.3 PERTAINS TO THE ADDITION OF RS. 2,00 ,000/- SUSTAINED BY LD.CIT(A) ON THE BASIS OF THIRD PARTY STATEMENTS RE CORDED AT THE BACK OF ASSESSEE CANNOT BE USED AGAINST THE ASSESSEE, IS IL LEGAL AND THE DECISION RELIED UPON BY THE LD.CIT(A) IS DISTINGUISHABLE AND NOT AP PLICABLE. 5.1. LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AO HAS MADE THE ADDITION ON THE GROUND THAT SHRI ALOK TRIPATHI HAD STATED IN HIS STATEMENT ON 02.06.2006 THAT SANTOSH KUMAR PANDEY GAVE SECURITY ON HIS BEHALF IN THE SHAPE OF FDR AND IN VIEW OF STATEMENT THE AMOUNT OF 3,50,000/- IS TREATED AS INCOME OF ASSESSEE. HOWEVER, THE LD.CIT(A) BY SAYING THAT HARNARAYAN TR IPATHI FATHER OF ALOK TRIPATHI HAS ADMITTED TO HAVE CONTRIBUTED RS.1,50,0 00/- WHICH WAS DULY SHOWN IN HIS CAPITAL ACCOUNT. SHRI HARNARAYAN TRIPA THI HAS CONFIRMED THAT CONTRACT WAS TAKEN IN THE NAME OF HIS MINOR SON ALO K TRIPATHI AND OTHER FAMILY MEMBERS. I.T.A NO. 496/AGRA/2012 10 THE LD.CIT(A) WITHOUT APPRECIATING THE FACT THAT SI NCE THE CONTRACT WAS IN THE NAME OF ALOK TRIPATHI SON OF SHRI HARNARAYAN TR IPATHI AND PART OF SECURITY AT RS.1,50,000/- WAS DULY CREDITED IN HIS CAPITAL ACCOUNT THEN WHY NOT RS.2,00,000/- CAN BE TREATED AS CONTRIBUTION MA DE BY HIM FOR THE SOLE REASON THAT CONTRACT WAS IN HIS NAME AND NOT IN THE NAME OF ASSESSEE NOR THE ASSESSEE AT ANY STAGE HAS ADMITTED THAT PART AMOUNT OF RS.2,00,000/- WAS CONTRIBUTED BY HIM. THE SECURITY RAISED WITH THE DE PARTMENT IS IN THE NAME OF ALOK TRIPATHI AND NOT ASSESSEE. LD.COUNSEL ALSO SUBMITTED THAT FURTHER THE CIT(A) W HILE REFERRING TO THE STATEMENT MADE BY HARNARAYAN TRIPATHI HE HAS NO T PROVIDED OPPORTUNITY TO THE ASSESSEE TO CROSS EXAMINE HIM. IT WAS HIS DU TY TO HAVE ALLOWED THE ASSESSEE TO CROSS EXAMINE SUCH A WITNESS.THEHON'BLE APEX COURT IN THE CASE OF UNION OF INDIA VS. TR VERMA REPORTED IN AIR 1957 (SO 882 HAS HELD ' WHEN THE AO RECORDED A STATEMENT BEHIND THE BACK OF THE ASSESSEE, IT WAS HIS DUTY TO HAVE ALLOWED THE ASSESSEE TO CROSS EXAM INE SUCH A WITNESS. STATEMENT OF PERSON CANNOT BE USED AGAINST THE ASSE SSEE. IT WAS NOT FOR THE ASSESSEE TO DEMAND CROSS EXAMINATIONS BUT WAS FOR T HE AO TO ALLOW CROSS EXAMINATIONS IF THE STATEMENT OF THE WITNESS WERE T O BE MADE THE BASIS OF ADDITION. I.T.A NO. 496/AGRA/2012 11 SIMILAR IS THE RATIO LAID DOWN BY THE HON'BLE SUPRE ME COURT IN THE CASE OF SHRI KISHINCHANDCHELLARAM VS CIT (125 ITR 137) MAD WHERE IT HAS BEEN HELD THAT - 'BEFORE THE IT AUTHORITIES COULD RELY UPON A PIECE OF EVIDENCE, THEY WERE BOUND TO PRODUCE IT BEFORE THE ASSESSEE SO THAT ASS ESSEE COULD CONTROVERT THE STATEMENT CONTAINED IN IT. STATEMENT GIVEN AT THE B ACK OF THE ASSESSEE IS IN ADMISSIBLE EVIDENCE. THEREFORE ADDITION MADE BOTH BEING DEVOID OF ANY ME RIT AND AGAINST THE LAW LAID DOWN BY THE HON'BLE SUPREME COURT MAY KINDLY B E DIRECTED TO BE DELETED. AS FOR THE CASE LAW RELIED UPON BY THE CIT(A), IT I S DISTINGUISHABLE IN VIEW OF FACTUAL AND LEGAL POSITION MADE CLEAR BY THE HON 'BLE SUPREME COURT (AIR 1957(SC) 882 (SUPRA). EVEN OTHERWISE THE ASSESSEE HELD 1/6 SHARE IN SHERG RAH BRIDGE THEREFORE THE ADDITION TO THE EXTENT OF 1/6 FALLING TO ASSESSEE S HARE AS DISCUSSED AGAINST GROUND NO.8 WOULD HAVE BEEN JUSTIFIED AGAINST THE A DDITION OF RS. 2,00,000/- SUSTAINED BY THE CIT(A). I.T.A NO. 496/AGRA/2012 12 5.2. LD.DR FOR THE REVENUE, OPPOSED THE CONTENTIONS RAISED BY LD.COUNSEL FOR THE ASSESSEE. 5.3. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE MATERIAL AVAILABLE ON RECORD. THE ADDITIONS OF RS.2,00,000/ - WERE MADE BY THE AO ON THE BASIS OF THE STATEMENT OF MR.ALOKTRIPATI. D ESPITE ASSESSEE ASKING FOR THE STATEMENT FROM THE AO AND ALSO IN THE APPELLATE PROCEEDINGS, NEITHER THE STATEMENT WAS PROVIDED NOR THE OPPORTUNITY TO CROSS -EXAMINE SHRI ALOK TRIPATI WAS GIVEN TO THE ASSESSEE. FURTHER, WE ARE ALSO OF THE OPINION THAT THE ADDITION OF RS.2 LAKHS CANNOT BE MADE MERELY ON THE BASIS OF THE STATEMENT, UNLESS A CORROBORATIVE EVIDENCE/RECORD IS FOUND BY THE AO. FOR THE PURPOSE OF THE CONCLUSION THAT NO SUCH ADDITIONS CAN BE MAD E BASED ON THE STATEMENT GIVEN BY MR.ALOKTRIPATI AS IT WOULD BE VIOLATIVE OF PRINCIPLE OF NATURAL JUSTICE AND RULES OF FAIR AND TRANSPARENT ADJUDICAT ION, WE MAY FRUITFULLY RELY UPON THE DECISION OF THE HONBLE SUPREME COURT IN T HE CASE OFSHRI KISHINCHANDCHELLARAM VS CIT (SUPRA). RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE SUPREME COURT AND IN THE LIGHT OF TH E DISCUSSION MADE HEREIN ABOVE, WE DELETE THE ADDITION OF RS.2 LAKHS. THUS, THE GROUND NO.3 OF THE ASSESSEES APPEAL IS ALLOWED. I.T.A NO. 496/AGRA/2012 13 6. GROUND NO.4 ISCONCERNED, THE CIT(A) HAS ERRED I N SUSTAINING ADDITION OF RS. 4,25,272/- (RS.3,12,700/- PRINCIPAL + RS.1,1 2,572/- INTEREST) ON THE BASIS OF ANNEXURE BK - 15 MADE DURING THE YEAR IGNO RING THE FACT OF RECYCLING OF LOANS IS THE NORMAL PRACTICE IN MONEY LENDING BUSINESS. II. THAT NO INTEREST HAS BEEN FOUND RECORDED IN THE SEIZED DIARY BK-15 AND THE ADDITION SUSTAINED IS IN CONTRAVENTION OF CIT(A ) OWN FINDING GIVEN IN PARA 15.3 PAGE 52 OF HIS ORDER. 6.1. BEFORE US LD.COUNSEL SUBMITTED THAT THE AO HAS MADE THE ADDITION OF RS.3,12,700/- FOR PRINCIPLE AND RS.1,12,572/- FOR I NTEREST TOTALING TO RS.4,25,272/- ON THE GROUND THAT THE ADVANCE WAS MA DE DURING THE YEAR WHEN IN FACT NONE OF THE ADVANCE WAS MADE DURING AY .2005-06 OR ANY ENTRY IS FOUND TO BE RELATING TO AY.2005-06. THE AMOUNT O F 3,12,700/- HAS BEEN TAKEN BY THE AO FROM PAGE 24 OF BK - 15 WHICH REPRE SENT BALANCES BROUGHT FORWARD FROM DIFFERENT PAGES AND RELATES TO THE PER IOD AS MENTIONED BELOW AGAINST EACH: I.T.A NO. 496/AGRA/2012 14 NAME AMOUNT PERIOD PAGE AWASTHI MUNIM 2000/- 31-05-2003 52/ITEM NO. 9 RAGHVENDRAAJITMAL 19,000/- 31-05-2003 52/ITEMNO. 16 MANSHA RAM BIJALPUR 2,000/- 31-05-2003 52/ITEM NO. 18 KAMLESH CHOBEY 12,500/- 15-06-1999 47,46 ITEM NO. 1 GOKARNDADI 6,000/- 31-05-2003 42 ITEM NO. 20 ASHUTOSH 12,000/- 31-05-2003 52/ITEM NO. 23 GUDDU 10,000/- 31-05-2003 527 ITEM NO. 24 RAJU PLOTWALE 2,000/- 02.01.2001 43/ITEM NO .2 MISTRI 200/- 01.04.2003 447 ITEM NO. 44 MUKHRJEE ENGINEER 1,66,000/- 01.04.2003 52/ITEM NO.25 RAJPUR BLOCK PRAMUK 50,000/- 24.06.2003 5 I/ITEM NO. 52 MUNIMAN 500/- 01.04.2003 54/LTEM NO. 57 AT THE OUTSET IT IS SUBMITTED THAT NONE OF THE ENTR IES RECORDED IN SEIZED DIARY BK-15RELATES TO AY.2005-06. AS EXPLAINED ABOVE ALSO NO AMOUNT OF INTEREST WAS FOUND CREDITED. THE SEIZED BK- 15 CONTAINS REPETITION OF ENTRIES AN D RELATES TO PERIOD PRIOR TO 2005-06. A REPLY TO THIS EFFECT WAS ALSO GIVEN BEFORE THE CI T (A) AS PER WRITTEN SUBMISSIONS MADE ON 20.03.2012 (COPY PLACED AS PER PB -112, PB - 114- 116 PB 120-122AND AGAIN MENTIONED ON THE ANNEXURE A - 1 WHICH HAS BEEN PART OF CIT (A) ORDERS. AS PER CIT(A) ORDER PAGE 40 CIT HAS CONFIRMED RS. 4 ,25,272/- ON THE BASIS OF BK-15 PAGE 24 WITHOUT APPRECIATING THE FACT THAT ENTRIES RECORDED ON PAGE I.T.A NO. 496/AGRA/2012 15 24 ALSO APPEAR ON PAGE 52 OF SEIZED DIARY BK - 15 A ND ARE BALANCE DRAWN AS ON 03.05.2003 HENCE DOES NOT RELATE TO AY.2005-06. THEREFORE IN ENTIRETY SINCE NONE OF THE ENTRIES IN SEIZED DIARY RELATE TO AY.2005-06, THE ADDITION SUSTAIN BY CIT (A) AT RS. 4,25,272/- AS PER PAGE 14 IS BEING DEVOID OF ANY MERIT MAY KINDLY BE DIRECTED TO BE DELETED. ON THE SEIZED DIARY WRITING OF ANY NOTE BY THE AO FOR HIS CONVENIENCE IS NOT PERMI SSIBLE BY ANY LAW OF THE LAND AS DONE BY AO ON PAGE 24 BY WRITING 2005-06 LD.COUNSEL REQUESTED THAT IT MAY ALSO KINDLY BE APP RECIATED THAT THE AMOUNT OF PRINCIPAL OF RS. 7,74,890/- AND 83,000/- HAS ALR EADY BEEN ADDED AS UNEXPLAINED PRINCIPAL, THEREFORE ALSO THE AVAILABIL ITY OF PRINCIPAL OF RS. 3,12,700/- IN AY.2005-06, THOUGH NO ADVANCE WAS MAD E DURING THE YEAR, CANNOT BE DENIED AND THE ADDITION OF (RS.3,12,700/- + INTEREST AT RS. 1,12,572/-) PERTAINING TO AY.2005-06 WHICH HAS NOT BEEN FOUND RECORDED IN THE SEIZED DIARY ANY WHERE MAY KINDLY BE DIRECTED T O BE DELETED. FINALLY, LD.COUNSEL ARGUED THAT NO ADDITION ON MERE PRESUMPT ION CAN BE MADE UNLESS SUPPORTED BY DOCUMENTARY EVIDENCE. 6.2. LD.DR FOR THE REVENUE, OPPOSED THE CONTENTIONS RAISED BY LD.COUNSEL FOR THE ASSESSEE. I.T.A NO. 496/AGRA/2012 16 6.3. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE MATERIAL AVAILABLE ON RECORD. THE MATTER IS INITIALLY PARTL Y-HEARD ON 03-01-2020, ON THAT DATE, THE TIME WAS GRANTED TO THE CIT-DR TO VE RIFY FROM THE RECORD WHETHER THE ENTRIES MENTIONED IN BK-1 SUBJECT MATTE R OF THE PRESENT GROUND PERTAINS TO THE ASSESSMENT YEAR UNDER CONSIDERATION OR NOT. THE LD.CIT-DR CLEARLY HAD SUBMITTED THAT THE ENTRI ES WHICH ARE SUBJECT MATTER OF THE GROUND NO.4, DOES NOT PERTAIN TO THE ASSESSMENT YEAR UNDER CONSIDERATION. WE HAVE OURSELVES ALSO EXAMIN ED THE RECORD AND THE PAPER BOOK FILED BY THE ASSESSEE AND WE FOUND THE F ORCE IN THE SUBMISSIONS OF THE ASSESSEE, WHICH WAS SECONDED BY THE LD.DR. AS THE ADDITION SOUGHT TO BE ADDED BY THE AO PERTAINS TO THE EARLIER ASSES SMENT YEAR, THEREFORE, KEEPING IN MIND THE PRINCIPLE OF ACCRUAL AS MENTION ED IN SECTION 4 AND 5 OF THE INCOME TAX ACT, WE ARE OF THE OPINION THAT THES E ADDITIONS CANNOT BE MADE IN THE YEAR UNDER CONSIDERATION. ACCORDINGLY, THE GROUND NO.4 OF THE ASSESSEES APPEAL IS ALLOWED. 7. GROUND NO. 5 IS REGARDING ADDITION OF RS. 17,56,795/- ON THE BASIS OF ANNEXURE BK-15 IN ADDITION OF RS. 4,25,272/- FOR UNEXPLAINED INVESTMENT IN MONEY LANDING IS ILLEGAL. I.T.A NO. 496/AGRA/2012 17 7.1. BEFORE US, LD.COUNSEL SUBMITTED THAT THE AO HA S MADE THE ADDITION OF RS. 44,04,079/- ON THE GROUND THAT ASSESSEE HAS NOT SPECIFIED THE PERIOD TO WHICH THESE ENTRIES RELATE. THE AO WHILE DOING SO H AS NOT LOOKED INTO THE PERIOD MENTIONED ON RELEVANT PAGESAND THE REPETITIO N OF ENTRIES BEING BROUGHT FORWARD ON DIFFERENT PAGES. THE CIT(A) HAS ALSO IGNORED THIS FACT. IN THIS CONNECTION, HE SUBMITTED A COPY OF SEIZED D IARY BK - 15 BEFORE US. IT WOULD BE APPRECIATED THAT NONE OF THE ITEMS OF D OCUMENT SEIZED FOUND NARRATION RELATING TO THE AY.2005-06. ALSO NO AMOUNT OF INTEREST WAS FOUND CREDITED. THE DIARY BK - 15 CONTAINS REPETITION OF ENTRIES RELATING TO PRIOR OF PERIOD 2 005-06. A REPLY TO THIS EFFECT WAS MADE BEFORE THE CIT(A) A S PER WRITTEN SUBMISSION MADE ON 20-03-2012 (COPY PLACED AS PER PB PAGE 112, PB PAGE 114 - 116, PB PAGE 120-122 AND AGAIN MENTIONED ON THE ANNEXURE AL WHICH HAS BEEN PART OF CIT (A) ORDER. SINCE NONE OF THE ENTRY RELATE TO PERIOD 2005-06, L D.COUNSEL REQUESTED THAT THE ADDITION MADE AND SUSTAINED BY CIT(A) BEING ILL EGAL MAY KINDLY BE DIRECTED TO BE DELETED. I.T.A NO. 496/AGRA/2012 18 7.2. LD.DR FOR THE REVENUE, OPPOSED THE CONTENTIONS RAISED BY LD.COUNSEL FOR THE ASSESSEE. 7.3. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE MATERIAL AVAILABLE ON RECORD. THOUGH THE ASSESSEE HAD SUBMI TTED THAT THE ENTRIES DO NOT PERTAINS TO THE YEAR UNDER CONSIDERATION, HOWEV ER, WHEN WE HAVE EXAMINED THE RECORD, THEN WE FOUND THAT NO DATE AGA INST THESE ENTRIES WERE MENTIONED IN THE RECORD. AS PER THE EVIDENCE ACT, T HE PRESUMPTION IS REQUIRED TO BE DRAWN AGAINST THE ASSESSEE AND IT IS FOR THE ASSESSEE TO EXPLAIN THAT THESE ENTRIES DO NOT PERTAIN TO THE YEAR UNDER CONSIDERATION. THE ASSESSEE FAILED TO DISCHARGING THE ONUS OF SATISFYI NG THE CONSCIOUS OF THE AO AS WELL AS OF THE TRIBUNAL THAT THE ENTRIES DO NOT PERTAIN TO THE YEAR UNDER CONSIDERATION. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY MERIT AND ACCORDINGLY, THE GROUND NO.5 OF THE ASSESSEE APPEAL IS DISMISSED. 8. GROUND NO.6 IS THAT CIT(A) HAS ERRED ON FACTS AN D IN LAW IN SUSTAINING THE ADDITION OF RS.8,62,125/- FOR UNEXPLAINED CASH DULY RECORDED IN THE BOOKS OF M/S SURESH KUMAR PANDEY AND BROTHERS BIJAL PUR CORROBORATED BY THE STATEMENT RECEDED U/S.132 OF THE ACT ON 03-03-2 005. I.T.A NO. 496/AGRA/2012 19 8.1. LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AO HAS MADE THE ADDITION IGNORING THE CATEGORICAL STATEMENT MADE U/ S.132(4) BY SANTOSH KUMAR PANDEY THAT CASH RECOVERED BELONGS TO SURESH KUMAR PANDEY AND BROTHERS WITHOUT ASSIGNING ANY REASON AND BY M ENTIONING THAT AT THE TIME OF SEARCH NO SUCH STAND WAS TAKEN WHEREAS AS PER CO PY OF STATEMENT RECORDED U/S 132 (PB PAGE - 80) A DETAILED STATEMENT TO THIS EFFECT WAS MADE U/S.132 (4) OF THE ACT, WHICH IS OF EVIDENTIARY VALUE AND C ANNOT BE IGNORED. HENCE THE ADDITION MADE BY AO IS BASED ON CONJECTURES AND SURMISES EVEN THE CHALLAN FILLED IN THE NAME OF SURESH KUMAR PANDEY A ND BROTHER ACCOMPANYING THE CASH WAS FOUND IN THE SEARCH AT TH E SPOT. DURING THE COURSE OF SUCH STATEMENT OF SHRI SANTOSH KUMAR PANDEY WAS RECORDED ON 03.03.2005, A COPY OF WHICH IS PRAI SED AS PER PB PAGE 80. IN REPLY TO QUESTION NO.2 IT HAS BEEN SPECIFICALLY STATED BY SANTOSH KUMAR PANDEY U/S.132(4) OF THE ACT THAT THE CASH RECOVERE D FROM HIS RESIDENCE RELATES TO THE FIRM M/S SURESH KUMAR PANDEY AND BRO THERS AND WAS KEPT AT HOME FOR MAKING DEPOSIT IN THE ACCOUNT OF GOVERNMEN T OF UP UNDER THE HEAD 0853 FOR THE CONTRACT OF BALU BEING 3 MONTHLY INSTALLMENT. THE AMOUNT WAS AVAILABLE AS RECEIPT FROM MR.SURESH KUMAR PANDE Y AND BROTHERS. I.T.A NO. 496/AGRA/2012 20 THUS IT WAS EXPLAINED THAT IT RELATED TO SURESH KUM AR PANDEY AND BROTHERS. THE TOTAL TURNOVER IN THE CASE OF SURESH KUMAR PAND EY AND BROTHERS HAS BEEN ACCEPTED TO BE OF RS. 2,41,30,000/- AND THE RE TURN IN THE CASE OF SURESH KUMAR PANDEY AND BROTHER WAS FILED DISCLOSING NET P ROFIT AT RS. 32,55,204/- ON BUSINESS RECEIPTS DERIVED AND LICENSE FEE PAID F OR CONTRACT AT RS. 31,35,000/- THEREFORE THE AVAILABILITY OF SUM OF RS .8,62,125/- FOR DEPOSITING QUARTERLY INSTALLMENT CANNOT BE DOUBTED WHEN M/S SU RESH KUMAR PANDEY AND BROTHERS HAS UNDER TAKEN THE CONTRACT, THE RECE IPTS FROM WHICH AT RS. 2,41,30,000/- HAVE BEEN DULY DISCLOSED TO THE DEPAR TMENT AND HAVE BEEN ACCEPTED. NO ADVERSE EVIDENCE HAS BEEN FOUND CONTRA RY TO STATEMENT RECORDED U/S.132(4) OF THE ACT IN THE COURSE OF SUC H THAT CASH AVAILABLE WAS OUT OF TURNOVER OF RS.2.48 CRORE DERIVED DURING THE NORMAL COURSE OF BUSINESS. SINCE THE AVAILABILITY OF CASH WAS DULY E XPLAINED AND NO CONTRARY EVIDENCE HAS BEEN FOUND BY THE AO OR BY THE CIT(A) IN THE COURSE OF APPEAL PROCEEDINGS OR EVEN IN REMAND PROCEEDINGS AS PER RE MAND REPORT PARA 6 (COPY PLACED AS PB-125) THE ADDITION SUSTAINED BY C IT(A) IGNORING THE SPECIFIC STATEMENT MADE BY THE ASSESSEE IS ILLEGAL MAY BE SUBMITTED THAT M/S SURESH KUMAR PANDEY AND BROTHERS IS THE FIRM IN WHI CH ASSESSEE'S YOUNGER BROTHER ARE PARTNER AND THE AMOUNT WAS LEFT BY THE FIRM FOR DEPOSITING THE I.T.A NO. 496/AGRA/2012 21 SAME FOR PAYMENT OF QUARTERLY INSTALLMENT. THE OBSE RVATION OF THE CIT(A) IS WITHOUT ANY BASIS AND WITHOUT APPRECIATING THE FACT S THAT THE AMOUNT FOUND IN THE COURSE OF SEARCH WAS NOT IN ROUND FIGURE BUT IT WAS A SPECIFIC AMOUNT OF RS.8,62,125/- TO BE DEPOSITED AGAINST UP GOVERNM ENT A/C NO. 0853. NO ADVERSE MATERIAL HAS BEEN BROUGHT ON RECORD TO REJE CT THE EXPLANATION MADE UNDER SECTION 132(4) WHICH IS A BINDING. THE STATEM ENT MADE ON OATH UNDER SECTION 132(4) IS OF EVIDENTIARY VALUE AND CANNOT B E IGNORE ON MERE PRESUMPTION IN A ROUTINE MANNER. EVEN THE CHALLAN F OR RS.8,62,125/- ACCOMPANYING THE CASH WAS FOUND AT THE TIME OF SUCH AS PER CATEGORICAL STATEMENT RECORDED (PAGE - 80). HENCE THE AUTHENTIC ITY OF STATEMENT RECORDED ON OATH UNDER SECTION 132 (4) CANNOT BE BRUSHED ASI DE ON ONE GROUND OR THE OTHER IN A GENERAL MANNER. THEREFORE, LD.COUNSEL RE QUESTED THE BENCH THAT THE ADDITION MADE MAY KINDLY BE DIRECTED TO BE DELE TED. 8.2. LD.DR FOR THE REVENUE, OPPOSED THE CONTENTIONS RAISED BY LD.COUNSEL FOR THE ASSESSEE. 8.3. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE MATERIAL AVAILABLE ON RECORD. THE CASH WAS RECOVERED FROM T HE POSSESSION OF THE ASSESSEE AND THE ASSESSEE SOUGHT TO EXPLAIN THE REC OVERY OF THE CASH AS A PAYMENT REQUIRED TO BE PAID BY THE ASSESSEE ON BEHA LF OF ANOTHER FIRM OF HIS I.T.A NO. 496/AGRA/2012 22 BROTHER PERTAINING TO SAND CONTRACT. IT IS DIFFICU LT TO COMPREHEND THAT WHEN THE ASSESSEE WAS NEITHER THE PARTNER NOR THE DIRECT OR NOR THE OWNER OF THE SAID COMPANY THEN HOW THE CASH CAN BE SAID TO BE BELONGI NG TO A THIRD PARTY. IN OUR OPINION, THIS IS A PLEA TAKEN BY THE ASSESSEE J UST TO EXPLAIN THE CASH THE SAID PLEA IS REQUIRED TO BE REJECTED AS THE SAID PL EA HAS BEEN MADE BY THE ASSESSEE TO SERVE HIS OWN PURPOSE WITHOUT ANY BASIS . ACCORDINGLY, GROUND NO.6 OF THE ASSESSEES APPEAL IS DISMISSED. 9. IN GROUND NO.7 THE ASSESSEE SUBMITTED THAT THE C IT (A) ERRED ON FACTS AND IN LAW I CONFIRMING SECURITY DEPOSIT OF RS.3,90 ,000/- AGAINST ADDITION OF RS.3,50,000/- RESULTING IN ENHANCEMENT WITHOUT PROV IDING OPPORTUNITY/SHOW CAUSE (RS. 2,00,000/- AS PER GROUND NO. 7 PAGE 35 + RS. 1,90,000/- AS PER GROUND NO 10 PAGE 48 OF CIT(A) ORDER. (II) THAT THE CIT (A) HAS ERRED ON FACTS AND IN LAW IN CONSIDERING THE SECURITY DEPOSIT OF RS. 3,90,000/- A RESPECT OF TOL L BRIDGE CONTRACT TAKEN BY 6 PERSONS JOINTLY IN THE HANDS OF APPELLANT ALONE WHE N ON THE CONTRARY HE HAD ACCEPTED CONTRACT RECEIPTS @ 1/6 FALLING TO ASSESSE E SHARE. 9.1. LD.COUNSEL SUBMITTED THAT AS DISCUSSED IN GROU ND NO 3 ABOVE (AO PAGE 4 PARA 3), THE AO MADE THE ADDITION OF RS. 3,5 0,000.00 REDUCED BY I.T.A NO. 496/AGRA/2012 23 CIT TO RS. 2,00,000/- ON THE BASIS OF STATEMENT DAT ED 02.06.2006 MADE BY SHRI ALOK TRIPATHI AT THE BACK OF ASSESSEE WHEN NO SUCH STATEMENT CAN BE USED AGAINST THE ASSESSEE UNLESS THE ASSESSEE WAS C ONFRONTED. NO OPPORTUNITY TO CROSS EXAMINE SHRI ALOK TRIPATHI WAS GIVEN. THE ASSESSEE HELD 1/6 SHARE. THEREFORE ALSO THE ADDITION MADE WAS DEVOID OF ANY MERIT. THE FACTUAL POSITION IS THAT SEIZED DIARY BK-3 BK-4 BK-5, BK-6, BK-7, AND BK-8. IT RELATES TO THE BUSINESS OF TOLL COLLECTION OF SH ERGARH AND PUDIN BRIDGE MAINTAINED IN THE NAME OF 6 DIFFERENT PERSONS WHO H AD TAKEN THE TOLL COLLECTION CONTRACT JOINTLY. THE SIX NOTEBOOKS CONTAIN SIMILAR TRANSACTIONS RELA TING TO THE BUSINESS OF TOLL TAX COLLECTIONS OF THE TWO BRIDGES. THE RECEIPTS AND SAVING HAVE BEEN DIVIDED EQUALLY A MONG THE SIX PERSON JOINTLY THAT IS MR.SANTOSH KUMAR PANDEY, SURESH KUM AR PANDEY, SHRIDHAR PANDEY, VIVEK TRIPATHI, PRADEEP SINGH, AND SHAILEND RA THE PAYMENTS MADE TO PWD FOR RUNNING THE CONTRACT H AVE BEEN SHARED EQUALLY. WHEN THE RECEIPTS AND THE PAYMENTS HAVE BEEN SHARED EQUALLY AND SO ALSO THE INCOME DERIVED HAS BEEN WORKED OUT IN EQUAL SHA RE OF 1/6, IT WAS NOT LEGALLY CORRECT TO ADD THE SECURITY DEPOSIT OF RS.3 ,90,000/- (3,50,000.00 I.T.A NO. 496/AGRA/2012 24 ADDED BY AO) IN THE HANDS OF ASSESSEE ALONE. THE CI T (A) HIMSELF ON PAGE 44 HAS NOTED AS UNDER :- PAGE 46 OF CIT (A) ORDER ' I HAVE CONSIDERED ALL THE ABOVE FACTS WITH REGARD T O THE SEIZED DOCUMENTS BK-3 TO BK-8 AS DISCUSSED ABOVE AND I HAVE ALSO GON E THROUGH THESE SEIZED DOCUMENTS AS PRODUCED BEFORE ME ON EXAMINATI ON OF THESE SEIZED DOCUMENTS I HAVE FOUND THAT THEY ARE IN THE FORM OF SIX NOTE BOOKS MAINTAINED IN THE NAME OF 6 DIFFERENT PERSONS RELAT ING TO THE BUSINESS OF TOLL TAX COLLECTION OF SHERGARH BRIDGE AND PUDIN BR IDGE. FROM, THESE SIX NOTE BOOKS, IT IS VERY CLEAR THAT THIS BUSINESS WAS BEING RUN BY THE ASSESSEE JOINTLY WITH OTHER FIVE PERSONS. AFTER EXA MINATION OF ALL THESE SIX NOTE BOOKS RELATING TO THE BUSINESS OF TOLL TAX COL LECTION OF TWO BRIDGES AND THEREFORE I FOUND FORCE IN THE ARGUMENTS OF THE LD AR THAT SINCE SIX PERSONS WERE INVOLVED IN THIS BUSINESS, THE ACCOUNT ANT HAS MAINTAINED SIX SEPARATE NOTE BOOKS, ONE NOT BOOKS FOR EACH PERSONS HOWEVER AS PER THE TRANSACTION RECORDED IN THESE NOTE BOOKS FOLLOWING COMPUTATION OF INCOME HAS BEEN FOUND FROM THE BUSINESS OF TOOL TAX COLLEC TION AS MENTIONED BY THE LD. AR IN HIS WRITTEN SUBMISSION AND THE SAME I S REPRODUCED AS UNDER:- SAVING FROM SHERGARH BRIDGE 2,48,2027- SAVINGFROM PUDIN BRIDGE 47,31 07- TOTAL SAVING FROM SHARGARH AND PUDIN 2,95,5127- AS PER DIARY ADD: INCOME FROM APRIL TO MAY 2004 99,9757- AS PE R DIARY INCOME FROM 21.06.2004 TO 29.06.2004 26,9087- AS PER DIARY TOTAL 4,22,3957- LESS: PAYMENT MADE TO PWD- 1,47,400/- IF THE ABOVE AMOUNT OF SAVING RECEIVED FROM THE BUS INESS OF TOLL TAX COMING AT RS. 2,74,995/- IS DIVIDED AMONG 6 PERSONS, THE A MOUNT RECEIVED BY EACH PERSON WOULD COME TO RS. 45,832/- THEREFORE THE SHA RE OF INCOME OFTHEASSESSEE (APPELLANT) FROM THE ABOVE MENTIONED BUSINESS WOULD AT THE MOST COME TO RS. 45,832/- AS FAR AS THE DECISION OF THE AO THAT SHRI SRIDHAR PANDEY HAS DENIED ANY BUSINESS CONNECTION WITH ALL THE 6 PERSONS MENTIONED I.T.A NO. 496/AGRA/2012 25 IN THIS DIARY IS CONCERNED JUST ON THE BASIS OF HIS DENIAL, IT CANNOT BE CONSIDERED THAT THE ENTIRE TRANSACTION RECORDED IN THESE SIX NOTE BOOKS BELONG TO THE ASSESSEE, (APPELLANT) WHEN APPARENTLY , IT IS VERY CLEAR ON EXAMINATION OF THESE SIX NOTE BOOKS THAT THEY WERE BEING MAINTAINED RELATING TO A BUSINESS OF TOLL TAXCOLLECTION FROM SHERGARH B RIDGE AND PUDIN BRIDGE FOR WHICH EVEN A SUMMARY OF THE SURPLUS INCOME GENERATE D FROM THIS BUSINESS IN EACH NOTE BOOK ARE MERE REPETITION. THEREFORE ON T HE BASIS OF THE SEIZED DOCUMENTS FOUND DURING SEARCH, THE TRANSACTIONS REC ORDED IN SUCH DOCUMENTS SHOULD BE CONSIDERED AS CORRECT UNLESS AN D UNTIL IT IS PROVED THAT THE TRANSACTION RECORDED IN THE SEIZED DOCUMENTS AR E NOT CORRECT. IN FACT THE AO HAS ALSO MADE THE ADDITION IN THE HAND OF SHRI H AR NARAYAN TRIPATHI ON THE BASIS OF THESE SEIZED DOCUMENTS TREATING THAT H E WAS ALSO INVOLVED IN CARRYING ON THE TOLL TAX COLLECTION BUSINESS OF THE ABOVE MENTIONED TWO BRIDGES. THEREFORE NOW AFTER RELYING ON THE STATEME NT OF A THIRD PERSON I.E THE BROTHERS OF THE ASSESSEE (APPELLANT) SHRI SRIDH AR PANDEY, I DO NOT FIND THAT THE AO IS CORRECT IN HOLDING THAT ENTIRE TRANS ACTIONS RECORDED IN TALL THE 6 NOTE BOOKS AMOUNTING TO RS. 38,68,627/- ARE RELAT ED TO THE ASSESSEE (APPELLANT) WHEN MOST OF THE ENTRIES MADE IN THESE 6 NOTE BOOKS ARE MERELY REPETITION RECORDED WITH RESPECT TO EACH PERSON FOR WHOM 6 DIFFERENT NOTE BOOKS WERE BEING MAINTAINED. ON THE BASIS OF MY ABOVE FINDING, I HOLD THAT ONLY THE ADDITION OF RS. 45,832/- CAN BE CONFIRMED IN THE HAND OF THE ASSESS EE ON THE BASIS OF ENTRIES OF SURPLUS EARNED BY THE ASSESSEE ALONG WITH 5 OTHE R PERSONS INVOLVED IN RUNNING OF TOLL TAX COLLECTION BUSINESS OF SHERGARH & PUDIN BRIDGE'. IN VIEW OF FACTS AS CONCEDED BY THE CIT(A) HIMSELF THAT THE AFORE SAID SIX NOTEBOOKS CONTAINS SIMILAR TRANSACTIONS RELATING TO THE BUSINESS OF TOLL TAX COLLECTION OF THE TWO BRIDGES, THE RECEIPTS AND SAV INGS HAVE BEEN DIVIDED EQUALLY FROM THE CONTRACT RUN BY THE SIX PERSONS JO INTLY AS ABOVE INCLUDING THAT BY ASSESSEE AND THE PAYMENTS HAVE BEEN MADE TO PWD EQUALLY AS I.T.A NO. 496/AGRA/2012 26 MENTIONED ABOVE, THERE WAS NO JUSTIFICATION OF ADDI NG SECURITY DEPOSIT PAYMENT IN THE HANDS OF ASSESSEE ALONE. HENCE, TH E ADDITION SUSTAINED BY CIT(A) AT RS. 1,90,000/- +RS. 2,00,000/- = RS.3,90,000/- BEING CONTRARY TO THE FINDING GIVEN BY CIT HIMSELF IS ILL EGAL AND ARBITRARY AND MAY KINDLY BE DIRECTED TO BE TREATED. 10. THE ASSESSEE HAS RAISED IN GROUND NO.8THAT THE CIT(A) HAS ERRED ON FACTS AND IN LAW IN SUSTAINING ADDITION OF RS.2,35, 832/- FOR TOLL BRIDGE CONTRACT IN WHICH ASSESSEE HAD 167 SHARE. 10.1. LD.COUNSEL SUBMITTED THAT THE CIT (A) HAS CON FIRMED ADDITION OF RS. 2,00,000/- AGAINST GROUND NO. 4 IN RESPECT OF SECUR ITY OF SHERGARH BRIDGE IGNORING THE FACT THAT ASSESSEE HAD 1/6 SHARE IN TH E CONTRACT OF SHERGARH BRIDGE AND PUDDIN BRIDGE. A FINDING TO THIS EFFECT HAD BEEN GIVEN BY THE CIT AS MENTIONED ABOVE. BESIDES THIS THE LD.CIT(A) HAS AGAIN CONFIRM RS.1,90,000/- IN RESPECT OF SECURITY CONTRIBUTED FO R PUDDING BRIDGE IN WHICH AS PER CIT FINDING THE ASSESSEE HAD 1/6 SHARE. HENC E THE ADDITION WHICH COULD BE MADE AGAINST GROUND NO 4,7 AND 8 IN RESPEC T OF SECURITY SHERGARH BRIDGE AND PUDDIN BRIDGE COULD BE 1/6 OF ASSESSEE'S SHARE WHICH WORKS OUT TO RS. 65,000/- (2,00,000/- + 1,90,000/- = 3,90,000/- @ 1/6 RS. 65,000/-). THIS I.T.A NO. 496/AGRA/2012 27 IS BESIDES ASSESSEE PROFIT WORKED OUT BY CIT BY TAK ING ASSESSEE SHARE @ L/6' H AT RS. 45,832.00 AS PER PAGE 46 OF CIT (A) ORDER. H ENCE THE ADDITION OF RS. 2,35,832/- AGAINST GROUND NO.8 AND RS. 2,00,000/- A GAINST GROUND NO.7 TOTALING TO RS.4,35,832.00 SUSTAIN BY CIT (A) AGAIN ST RS.45,832/- BEING 1/6 SHARE IN PROFIT AND RS. 65,000/- BEING 1/6 AGAINST SECURITY IS ILLEGAL. THE CIT(A) HAS CONFIRMED THE ADDITION OF RS. 2,35,8 32/- SINCE THE ADDITION SUSTAINED ON ACCOUNT OF SECURITY AT RS.1,9 0,000/- IS ILLEGAL BECAUSE THE ASSESSEE HELD ONLY 1/6 SHARE. AS SUBMITTED AGAI NST GROUND NO.7 IT WOULD BE IN THE INTEREST OF EQUITY AND JUSTICE THAT THE A DDITION WHICH CAN BE MADE OUT OF RS.2,00,000/- + 1,90,000/- SHOULD BE LIMITED TO L/6 TH RS.65,000 /- WHICH IS THE ASSESSEE'S SHARE IN THE TOLL BRIDGE. 11. GROUND NO.9 IS REGARDING THE ADDITION OF RS.6,8 8,876/- SUSTAINED IN THE HANDS OF ASSESSEE FOR THE CONTRACT INCOME EARNE D BY OTHER PERSONS TAHIR ALI , MOHD IDRIS WHOSE ADDRESSES AND COMPLETE IDENT ITY WAS PROVIDED BEFORE THE AUTHORITIES BELOW AND THE ADDITION MADE IN THE HANDS OF ASSESSEE FOR AO FAILURE TO INVOKE PROVISIONS OF SECTION 153C IN RES PECT OF ACTUAL CONTRACTOR IS ARBITRARY, UNJUST AND AGAINST NATURAL JUSTICE. I.T.A NO. 496/AGRA/2012 28 11.1. LD.COUNSEL SUBMITTED THAT THE AO HAS MADE THE ADDITION OF RS. 6,88,876/- ON THE GROUND THAT INVESTMENT MADE BY TA HIR, IDRIS AND PAPPU CHAUHAN AS APPEARING IN BK - 16 DISOWNED BY THE ASS ESSEE IS NOT ACCEPTABLE FOR THE SOLE REASON THAT THESE WERE FOUND AT THE RE SIDENCE OF ASSESSEE. IT WAS EXPLAINED THAT AS PER BK - 16 FROM PAGE 1 TO 64. TH E DETAILS OF TOLL TAX RECEIPTS ARE MENTIONED WHICH HAVE BEEN INCLUDED IN THE TOTAL RECEIPTS DISCLOSED BY THE ASSESSEE AT RS. 6,68,094/- IN AY.2 005-06 ON LAST 4 PAGE OF BK - 16 DETAILS OF CONTRACT RECEI PTS WHICH PERTAIN TO IDRIS AND TAHIR ARE MENTIONED AND THE ASSESSEE HAS DISOWN THE SAME VIDE REPLY DATED 16-01-2006. AS PER REPLY DATED 23-08-2006 IT WAS EXPLAINED THAT DM AURIYA AWARDED CONTRACT OF FISH TO TAHIR AND IDRIS IN SUPP ORT OF WHICH A LETTER FROM DM WAS ALSO SEIZED. THE ASSESSEE HAS NO CONCERN WIT H THE CONTRACT UNDER TAKEN BY THE AFORESAID PERSONS. IT WAS SPECIFICALLY REQUESTED TO AO THAT BOTH THE P ERSONS MAY BE ASKED ABOUT THESE PAPERS. SIMILAR REQUEST WAS MADE IN RESPECT OF SHAILENDRA S INGH CHAUHAN, SHRI SRIDHAR PANDEY THE BROTHER OF THE ASSESSEE WAS EXAM INED ON OATH BY THE AO AND IN THE STATEMENT RECORDED ON 14.11.2006 HE HAS DISOWNED THESE PAPERS I.T.A NO. 496/AGRA/2012 29 WHICH WERE RELATING TO SHAILENDRA SINGH CHAUHAN AND A SPECIFIC REQUEST WAS MADE TO SUMMON AND EXAMINE HIM REGARDING THE CONTEN TS OF PAPER FOUND IN THE NAME OF SHRI SHAILENDRA SINGH CHAUHAN. IT WAS ALSO MADE CLEAR THAT ON PAGE 65 TO 68 NO WHE RE THE NAME OF ASSESSEE APPEAR. THE MATTER WAS SUBJECTED TO REMAND REPORT AND AO IN HIS REPORT WITHOUT MAKING ANY FURTHER INQUIRY TO THE SUBMISSIONS MADE BY ASSESSEE HAS RESTED HIS REMAND REPORT TO WHAT THE AO HAS SAID IN THE AS SESSMENT ORDER (SEE PARA 6 PAGE 2 OF REMAND REPORT PB 125). THE AO HAS SIMPL Y SAID THAT ASSESSEE SUBMISSION WAS CONSIDERED AND WAS NOT FOUND CORRECT . NO REASON TO CONTROVERT THE SUBMISSIONS MADE BY ASSESSEE HAS BEE N GIVEN NOR HAS ANY ADVERSE MATERIAL AS A RESULT OF REMAND PROCEEDINGS BEEN BROUGHT ON RECORD. THE CIT(A) AS ALSO WITHOUT BRINGING ANY ADVERSE MAT ERIAL ON RECORD TO CORRELATE THAT THE PAPER BELONGS TO ASSESSEE'S BUSI NESS HAS CONFIRM THE ADDITION OF RS.6,88,876/-. IT IS SETTLED LAW THAT PRESUMPTION IS REBUTTABLE. N O ADDITION CAN BE MADE UNLESS CORROBORATIVE EVIDENCE IS PLACE ON RECO RD. THE AO FAILED TO BRING ANY ADVERSE MATERIAL TO SUPPORT THE ADDITION BY CONTROVERTING THE SUBMISSIONS MADE BY ASSESSEE DISOWNING THESE PAPERS . THE AO DID NOT TAKE I.T.A NO. 496/AGRA/2012 30 PAINS TO MAKE ANY FURTHER INQUIRY UNDER SECTION 250 (4) THOUGH AN OPPORTUNITY WAS AFFORDED TO HIM TO BRING ON RECORD THE MATERIAL IN SUPPORT TO JUSTIFY THE ADDITION MADE. NO ADDITION CAN BE MADE ON THE BASIS OF NOTING MADE IN THE NAME OF THIRD PARTY UNLESS RELATIVE EVI DENCE IS BROUGHT ON RECORD. HENCE, LD.COUNSEL ARGUED THAT THE ADDITION MADE BY AO AND SUSTAINED BY CIT(A) BEING ARBITRARY MAY KINDLY BE DELETED. ASSES SEE CANNOT BE SADDLED WITH LIABILITY FOR AO FAILURE TO CONDUCT INQUIRY ON THE SUBMISSIONS MADE BY ASSESSEE. PROVISION OF SECTION 153C OF THE ACT IS P ROVIDED IN THE ACT FOR THE PURPOSE. IF THE AO WITHOUT ASSIGNING ANY REASON HAS NOT USED THEM THOUGH LEGALLY ATTRACTIVE, IT WOULD BE UNJUST AND UNFAIR A ND AGAIN THE PRINCIPAL OF JUSTICE TO MAKE ADDITION IN THE HANDS OF ASSESSEE. IN (2010) 322 ITR 191 (DEL) IN THE CASE OF CIT VS A NIL BHALLA, A SEARCH AND SEIZURE CASE IT WAS HELD THAT WHERE NO INDEPENDENT MATERIAL TO SHOW THAT JOTTINGS ON PAPER REPRESENTED UNACCOUNTED TRANSACTI ONS OF THE ASSESSEE, THE ADDITION COULD NOT BE SUSTAINED IN ABSENCE OF ANY C ORROBORATIVE EVIDENCE. 11.2. LD.DR FOR THE REVENUE, OPPOSED THE CONTENTION S RAISED BY LD.COUNSEL FOR THE ASSESSEE. THE LD.DR SUBMITTED T HAT THE GROUND NOS.7, 8 I.T.A NO. 496/AGRA/2012 31 & 9 ARE REQUIRED TO BE DECIDED COLLECTIVELY AS THEY ARE INTERLINKED WITH EACH OTHER. 11.3. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED THE MATERIAL AVAILABLE ON RECORD. AS THE GROUND NOS. 7, 8 & 9 AR E CONNECTED WITH OTHER, THEREFORE WE ARE DECIDING THESE GROUNDS COLLECTIVEL Y. THE AUTHORITIES BELOW HAVE AGREED THAT THE ASSESSEE WAS HAVING 1/6 TH SHARE IN THE CONTRACT. IN VIEW OF THE ABOVE SAID FACT, THE ASSESSEE WAS LIABLE TO BE CHARGED FOR THE 1/6 TH AMOUNT FOUND AS PER THE CLAIM OF THE ASSESSEE WHICH IN THE ESTIMATION WOULD COME TO RS.45,832/-. IN FACT, THE SIMILAR ENTRIES W ERE FOUND IN ALL THE SIX NOTE BOOKS FOUND DURING THE COURSE OF SURVEY PERTAINING TO TOLL TAX COLLECTION OF TWO BRIDGES. IN OUR VIEW, THOUGH THE ASSESSEE CLAIM ED THAT HE WAS ENTITLED FOR 1/6 TH SHARE IN THE TOLL TAX COLLECTION OF THE BRIDGES, B UT WE FAILED TO UNDERSTAND WHY 6 SEPARATE NOTE BOOKS WERE MAINTAINE D BY THE ASSESSEE IN RESPECT TO THE SAME BUSINESS. THE PLAUSIBLE ANSWER WOULD BE IN OUR UNDERSTANDING THAT THE ASSESSEE WAS MAINTAINING SIX SEPARATE NOTE BOOKS WITH A VIEW TO SUPPRESS THE ACTUAL TOLL COLLECTION OR THE SIX NOTE BOOKS WERE MAINTAINED FOR THE INDIVIDUAL SHAREHOLDERS. THE ONU S IS ON THE ASSESSEE TO PROVE THAT SIX NOTE BOOKS WERE MAINTAINED FOR SIX P ARTNERS AND SIMULTANEOUSLY THE ONUS WAS ALSO ON THE REVENUE TO PROVE THAT SIX NOTE I.T.A NO. 496/AGRA/2012 32 BOOKS WERE MAINTAINED FOR SUPPRESSING THE TOLL COLL ECTION. THEREFORE, A GUESS WORK IS REQUIRED TO BE DONE BY THE BENCH AND CONSID ERING THE TOTALITY OF THE CIRCUMSTANCES AND ALSO PECULIAR FACTS OF THE PRESEN T CASE, WE RESTRICT THE ADDITION TO RS.1,90,000/-. THUS, THE ASSESSEE GETS THE RELIEF OF RS.2 LAKHS. HENCE, THE GROUND RAISED BY ASSESSEE IS PARTLY ALLO WED. 12. VIDE GROUND NO.10 THE ASSESSEE RAISED THAT THE CIT(A) HAS ERRED ON FACTS AND IN LAW IN SUSTAINING THE ADDITION OF RS.8 9,975/- MADE BY AO ON THE GROUND THAT INCOME EARNED BY MR.PRADEEP CHAUHAN BEL ONGS TO ASSESSEE. 12.1. LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT TH E AO HAS MADE ADDITION OF RS.89,975/- ON THE GROUND THAT SINCE ASSESSEE WA S REQUIRED TO EXPLAIN AS TO WHY THE INCOME IN THE NAME OF PRADEEP SINGH CHAU DHAN MAY NOT BE INCLUDED IN THE HENCE OF ASSESSEE. SO THE INCOME OF RS. 89,975/- IS ADDED IN THE NAME OF ASSESSEE. THE ADDITION MADE ON THIS VAG UE GROUND IS NOT SUSTAINABLE. NO REASON HAS BEEN GIVEN BY THE AO TO NOT CONSIDER THE WRITTEN SUBMISSION DATED 06.12.2006 MADE BY ASSESSEE BEFORE HIM THE CIT(A) HAS IN PARA 17.03 STATED THAT NO COMMENT S HAS BEEN OFFERED IN THE REMAND REPORT BY AO. SHRI SRIDHAR PANDEY HAS VI DE REPLY DATED 06.12.2006 HAS STATED THAT A STATEMENT ON THE ISSUE WAS RECORDED BY THE AO I.T.A NO. 496/AGRA/2012 33 ON 14.11.2006 AND IT WAS MADE CLEAR THAT SHRI PRADE EP SINGH CHAUHAN HELD 1/6 SHARE IN SHERGARH AND PUDDING TOLL BRIDGE. THE CIT(A) HAS GIVEN AS SPECIFIC FINDING THAT 'I HA VE GONE THROUGH THE SEIZED DOCUMENTS AND I FIND THAT SHARE OF HIS INCOM E HAS BEEN RECORDED. WITH REGARD TO THE BUSINESS I HAVE ALREADY GIVEN MY FINDING IN PARA 14.03 BASED ON THE SEIZED DOCUMENTS BK-3 TO BK-8 THAT THE BUSINESS OF COLLECTION OF TOLL TAX WAS BEING CARRIED ON BY 6 PERSONS JOINT LY AND ASSESS IS ONE OF THEM. THE CIT(A) HAS ALSO HELD THAT THIS NOTE BOOK IS IN THE NAME OF PRADEEP SINGH CHAUHAN WHO IS ALSO ONE OF SIX PERSONS JOINTL Y CARRYING ON THIS BUSINESS. THE CIT HAS CONFIRM THE ADDITION OF RS, 8 9,975/- IN THE HANDS OF ASSESSEE THOUGH SEIZED DOCUMENTS BK-20 WAS FOUND AN D HELD BY HIM TO BE BELONGING TO SHRI PRADEEP SINGH CHAUHAN. HENCE THE ADDITION CONFIRMED BY CIT(A) ON PRESUMPTI ON THAT INCOME OF RS. 89,975/- MIGHT HAVE BEEN EARNED BY THE ASSES SEE ALSO WHEN NO SUCH PAPER HAS BEEN FOUND AND SEIZED IN THE NAME OF ASSE SSEE IN THE COURSE OF SEARCH. HENCE THE ADDITION CONFIRMED BY CIT(A) BEIN G ILLEGAL AND ARBITRARY AND MADE ON THE BASIS OF MERE PRESUMPTION MAY KINDL Y BE DIRECTED TO BE DELETED. I.T.A NO. 496/AGRA/2012 34 12.2. LD.DR FOR THE REVENUE, OPPOSED THE CONTENTION S RAISED BY LD.COUNSEL FOR THE ASSESSEE. 12.3. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED THE MATERIAL AVAILABLE ON RECORD. WE HAVE GONE THROUGH THE ORDER PASSED BY THE LD.CIT(A) AND THE LD.CIT(A) HAD PASSED A REASONED O RDER, DEALING WITH THE CONTENTION NOW RAISED BEFORE US. THEREFORE, THE GR OUND OF THE ASSESSEE IS DISMISSED. 13. VIDE GROUND NOS.11 & 12 THE ASSESSEE URGED T HAT THE ADDITION OF RS. 1,15,000/- SUSTAINED FOR HOUSE HOLD GOODS IS ARBITR ARY UNJUST. 13.1. LD.COUNSEL SUBMITTED THAT THE CIT(A) HAS ACTE D AGAINST PRINCIPLE OF NATURAL JUSTICE IN PRESUMING THAT APPELLANT WHO IS PENSIONER AND CO SHARER OF 300 BIGHAS OF AGRICULTURE LAND AFTER LEADING 40 YEA RS OF ACTIVE LIFE HAD NO CAPACITY IN ACQUIRING HOUSEHOLD GOODS OF RS.1,15,00 0/- PRIOR TO 2005-06. THE AO HAS MADE THE ADDITION OF THE GROUND THAT THE EXPENSES MADE IN AC, TB, VCD, AND COMPUTER SET AND FRIDGE TO THE TUNE OF ABOUT RS. 1,15,000/- REMAIN UNEXPLAINED. HE HAS MADE THE ADDI TION BY SAYING THAT IT IS PRESUMED THE OTHER ITEMS MIGHT HAVE BEEN RECEIVED O R PURCHASE MUCH EARLIER THAN 6 YEARS. I.T.A NO. 496/AGRA/2012 35 THE AO HAS FOUND NO MATERIAL IN THE COURSE OF SUCH THAT THESE ITEMS WERE PURCHASED IN AY.2005-06 WHEN HE HIMSELF SAYS THAT O THER ITEMS MIGHT HAVE BEEN PURCHASED PRIOR TO SIX YEAR. NO DESCRIPTION HA S BEEN GIVEN. THE AFORESAID ITEMS ARE INSTALLED AT THE RESIDENCE MUCH PRIOR TO 1999-2000. MORE OVER SINCE NO PURCHASE VOUCHER OR ANY RELEVANT EVID ENCE WAS FOUND THAT THESE HAVE BEEN NEWLY PURCHASED IN ASSESSMENT YEAR 2005-06 THAT IS THE YEAR OF SEARCH, THE ADDITION MADE BY AO AND CONFIRMED BY CIT(A) IS NOT JUSTIFIED. THE ADDITION HAVE BEEN MADE ON THE GROUN D THAT IN BALANCE SHEET THESE HOUSEHOLD ITEMS ARE NOT MENTIONED. IN THE PRE CEDING ASSESSMENT YEARS SUBSTANTIAL ADDITION HAVE BEEN MADE REGARDING PERSO NAL EXPENSES AND THE LOANS RAISED. IN AY.2004-05 ADDITION OF RS.5,00,000 /- HAS BEEN CONFIRMED U/S.68 OF THE ACT BEING THE INCOME FROM UNEXPLAINED SOURCE. THE ADDITION OF RS.1,15000/- IS COVERED BY THE AFORESAID ADDITIONS. SINCE NO BILLS OR VOUCHER OR CASH MEMO FOR THE PURCHASE OF THE AFORESAID ITEM S IN AY.2005-06 HAVE BEEN FOUND IN THE COURSE OF SEARCH THE ADDITION MAD E ON MERE PRESUMPTION IGNORING THE STATUS OF ASSESSEE IS ILLEGAL. THE ASS ESSEE DURING THE YEAR AS DISCLOSED HIS INCOME IN THE RETURN AT RS.3,40,000/- FROM AGRICULTURE BESIDES BUSINESS AND PENSION INCOME AT RS.1,09,737/- AND TH E INCOME IN THE VICINITY HAS BEEN DISCLOSED RIGHT FROM AY.2001-02 ON WARD. T HE AO EVEN IN THE I.T.A NO. 496/AGRA/2012 36 REMAND REPORT AS HAS BEEN ADMITTED BY CIT(A) THAT T HE AO HAS BROUGHT NO MATERIAL ON RECORD EXCEPT A REFERENCE MADE IN THE A SSESSMENT. THE ADDITION SUSTAINED BY CIT (A) BEING ARBITRARY AND ILLEGAL MA Y KINDLY BE DIRECTED TO BE DELETED. 13.2. LD.DR FOR THE REVENUE, OPPOSED THE CONTENTION S RAISED BY LD.COUNSEL FOR THE ASSESSEE. 13.3. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED THE MATERIAL AVAILABLE ON RECORD. WE HAVE ALREADY MENTIONED ABOU T THE STATUS OF THE ASSESSEE WHILE DEALING WITH GROUND NO.1 OF THE ASSE SSEES APPEAL AND CONCLUDED THAT THE ASSESSEE IS A MAN OF SUFFICIENT MEANS THEREFORE, THE ADDITION MADE BY THE AO AND CONFIRMED BY THE LD.CIT (A) FOR A TUNE OF RS.1,15,000/- IS ON THE LOWER SIDE, HENCE, NEEDS NO INTERFERENCE BY THE TRIBUNAL, ACCORDINGLY, THE GROUND NOS.11 & 12 RAISE D BY THE ASSESSEE ARE DISMISSED. 14. VIDE GROUND NO.13 THE ASSESSEE RAISED T HAT CIT(A) HAS ERRED ON FACTS AND IN LAW IN SUSTAINING THE ADDITION OF RS. 24,98,836/- AS PER ANNEXURE LP-1. I.T.A NO. 496/AGRA/2012 37 14.1. LD.COUNSEL SUBMITTED THAT THE AO HAS MADE THE ADDITION OF RS. 44,98,886/- MAKING A VAGUE REMARKS 'AFTER CONSIDERI NG THE SUBMISSIONS IT IS CONCLUDED THAT THE ASSESSEE COULD NOT EXPLAIN SATIS FACTORY THE TRANSACTIONS ENTERED ON PAGE 1,2, 5,10 TO 13. IT CANNOT BE MADE OUT THAT HOW THE EXPLANATION GIVE N BY THE ASSESSEE IS FOUND TO BE UNEXPLAINED WITHOUT ASSIGNING ANY RE ASON. SUCH AN ADDITION BEING DEVOID OF ANY MERIT DESERVES TO BE STRUCK DOW N INSTANTLY. THE EXPLANATION GIVEN BY ASSESSEE IS THAT ENTRIES O N PAGE 1 MENTIONING RS. 70,000/- IS THE TOTAL OF RS.40,000/- + RS.30,000/- WHICH RELATE TO ROUGH CALCULATION WITHOUT ANY DESCRIPTION . THESE PAPERS ARE RELATED TO M/S SURESH KUMAR PANDEY AND BROTHERS WHERE THE T OTAL TURNOVER HAS BEEN DISCLOSED AT RS. 2,41,30,000/- AND THESE MIGHT HAVE BEEN THE ROUGH JOTTINGS RECORDED BY SOME PERSONS RELATING TO EXPENDITURE IN CURRED OUT OF THE TOTAL RECEIPTS DERIVED AT RS. 2.41 CRORE SINCE THESE ARE DEAF AND DUMB ENTRIES NO ADVERSE INFERENCE CAN BE DRAWN. ALSO NO SUPPORTING MATERIAL HAS BEEN BROUGHT ON RECORD TO SUBSTANTIATE THE ADDITION EVEN IN REMAND PROCEEDINGS REGARDING THE PAGE NO 2 WHICH IS REPRODUCED AS UNDE R: 5,00,000/- SHRI CHOTEY PANDEY RS.2,08,750/-, RS.16,666/- , RS.1,00,000/- , RS.8,25,416/- I.T.A NO. 496/AGRA/2012 38 SHRI CHOTEY PANDEY IS THE PARTNER OF M/S SURESH KUM AR PANDEY AND BROTHERS. THERE IS NO DATE MENTIONED AS TO WHICH PE RIOD OR DATE IT RELATES. IT HAS BEEN EXPLAINED THAT THE ASSESSEE FIRM M/S SURES H KUMAR PANDEY AND BROTHERS IS CARRYING ON BUSINESS OF SAND. THE CONTR ACT OF SAND EXTRACTION IS TAKEN. SHRI CHOTEY PANDEY ALIAS SUESH KUMAR PANDEY IS THE PARTNER IN SURESH KUMAR PANDEY AND BROTHERS. SO THE FIGURES ME NTIONED WHICH IS ROUGH WORKING OF CALCULATION REPRESENT THE ROUGH CA LCULATIONS OF EXPENSES OR RECEIPTS DERIVED FROM BUSINESS OF SAND. AS WOULD AP PEAR THAT RS. 16,03,470/- HAS BEEN EARNED AS A RESULT OF SALE PROCEEDS OF SAN D AS IS APPARENT FROM THE DESCRIPTION MADE CASH, MITIWALA AND DIFFERENT NAMES OF THE PERSONS TO WHOM THE SAND HAS BEEN SOLD. FURTHER RS.15,82,470/- AS M ENTIONED BY THE CIT (A) ON PAGE 66 ITEM NO. 2 FROM BELOW DOES NOT BEAR ANY DATE OR DESCRIPTION. THEREFORE. THIS IS DEAF AND DUMB ENTRY ON WHICH BAS IS NO ADDITION CAN BE MADE LEGALLY. THEREFORE THE ADDITION OF RS.24,98 ,886/- SUSTAINED BY CIT(A) IS ILLEGAL WITHOUT ANY BASIS. IN SUPPORT THA T THE BUSINESS OF EXTRACTION AND SALE OF SAND IS BE DONE BY M/S.SURESH KUMAR PAN DEY AND BROTHERS, THE COPY OF THE BALANCE SHEET OF M/S SURESH KUMAR PANDE Y AND BROTHERS IS ENCLOSED. THE ADDITION SUSTAINED BY CIT(A) IN ABSEN CE OF ANY CORROBORATIVE MATERIAL FOUND IN THE COURSE OF SEARCH OR EVEN IN R EMAND PROCEEDINGS AS PER I.T.A NO. 496/AGRA/2012 39 PAGE 1 TO 25 PARA 9 WHERE THE AO HAS EXCEPT RELYING ON THE AOS VAGUE ORDER HAS BROUGHT NO ADVERSE MATERIAL TO SUPPORT. T HEREFOREALSO THE ADDITION SUSTAINED BY CIT (A) MAY KINDLY BE DIRECTED TO BE D ELETED. 14.2. LD.DR FOR THE REVENUE, OPPOSED THE CONTENTION S RAISED BY LD.COUNSEL FOR THE ASSESSEE. 14.3. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED THE MATERIAL AVAILABLE ON RECORD. SO FAR AS THE AMOUNT OF RS.5, 00,000/-, RS.2,08,750/-, RS.16,666/- AND RS.1,00,000/- TOTALING TO RS.8,25,4 16/- ARE THE PAYMENTS RELATING TO THE EARLIER ASSESSMENT YEARS AND THEREF ORE, THE SAME CANNOT BE ADDED IN THE PRESENT ASSESSMENT YEAR. THIS FACT HA S DULY BEEN VERIFIED BY THE LD.CIT-DR DURING THE COURSE OF ARGUMENT. ACCORDING LY, THE AMOUNT OF RS.8,25,416/- IS DELETED. WITH RESPECT TO THE REMAINING AMOUNT OF RS.16,03,4 70/-, THE BRAKE-UP OF THE SAID AMOUNT WAS GIVEN BY THE AO AND CIT(A) I N THEIR RESPECTIVE ORDERS, REFERRED PG.66 OF THE IMPUGNED ORDER. IN F ACT, BEFORE THE CIT(A), THE ASSESSEE WAS GIVEN AN OPPORTUNITY TO EXPLAIN THE SA ID AMOUNT TO VERIFY HIS CLAIM THAT THE SAID EXPENDITURE BELONGS TO M/S.SURE SH KUMAR PANDEY AND OTHERS. IRONICALLY, THE ASSESSEE FAILED TO PROVE A ND PRODUCE HIS CASE BEFORE THE LOWER AUTHORITIES AND ALSO BEFORE US. DURING T HE COURSE OF PROCEEDINGS I.T.A NO. 496/AGRA/2012 40 BEFORE LOWER AUTHORITIES, IT WAS NOT DISPUTED THAT THESE ENTRIES WERE NOT MENTIONED IN THE RECORD SHEET, RECOVERED FROM THE P OSSESSION OF THE ASSESSEE. THE ONUS IS ALWAYS ON THE ASSESSEE TO PROVE AND DIS CHARGE THAT THE PAYMENTS MADE WERE RELATING TO THE BUSINESS OF SHRI SURESH K UMAR PANDEY AND BROTHERS. IN OUR VIEW, THE AMOUNT PAID ON THE FACE OF IT APPEARS TO HAVE BEEN PAID FOR THE PURPOSES OF EARNING THE INCOME THEREFO RE, THE ASSESSEE IS ENTITLED TO THE CORRESPONDING BENEFIT WHICH HAS BEEN EARNED ON ACCOUNT OF SUCH EXPENDITURE. IN THE ABSENCE OF ANY HELP FROM ANY O F THE PARTIES BEFORE US, WE ARE REQUIRED TO MAKE THE GUESS OF INCOME WHICH C AN BE INCLUDED FOR INCURRING THE EXPENDITURE OF RS.16,03,470/-. IN OUR VIEW, THE OVERALL CIRCUMSTANCES OF THE CASE AND MORE PARTICULARLY THE ASSESSMENT YEAR 2005-06 NO PURPOSE WOULD BE SERVED TO REMAND THE MATTER BAC K TO THE CIT(A) FOR GRANTING A FRESH OPPORTUNITY FOR PRODUCING THE BOOK S OF ACCOUNT OF M/S.SURESH KUMAR PANDEY AND BOTHERS. IT WOULD BE S UFFICIENT IF WE RESTRICT THE ADDITION TO AN AMOUNT OF RS.6,03,470/- THUS, TH E ASSESSEE GETS THE BENEFIT OF RS.10 LAKHS AND THE ADDITIONS OF RS.14,98,886/- ARE DELETED. HENCE, THE GROUNDS IS PARTLY ALLOWED. I.T.A NO. 496/AGRA/2012 41 15. IN GROUND OF APPEAL 14, THE ASSESSEE SUBMITTED THAT CIT (A) HAS ERRED AND FACTS AND IN LAW IN SUSTAINING FOLLOWING ADDITI ON IN THE HANDS OF APPELLANT IRRESPECTIVE OF EVIDENCE FOUND IN THE COU RSE IN THE SUCH AND ADDITION MADE IN CONTRAVENTION OF SEC 153.C ALSO AR E BAD IN LAW. 1. RS. 50,000/- INVESTMENT MADE BY SHAKUNTLADEVI 2. RS. 4,43,747/- INVESTMENT MADE BY SMT RADHA DUB EY 15.1. LD.COUNSEL SUBMITTED THAT THE AO HAS MADE THE ADDITION OF RS.50,000/- ON THE GROUND THAT THE SOURCE OF INVEST MENT IN PURCHASE OF PLOT WITH STAND IN THE NAME OF SHAKUNTLA DEVI HAS NOT BE EN EXPLAINED. THIS FINDING OF THE AO IS VAGUE FOR THE VERY REASON THAT ' ASSESSEE VIDE HIS REPLY REPRODUCED BY CIT(A) AT PAGE 67 IT WAS SUBMITTED TH AT APPELLANT HAD NO CONCERN WITH THE PURCHASE OF PLOT LAND BY SHANKUNTL A W/O SHRI VIKARM SINGH BIJALPUR BECAUSE THESE WERE SOLD BY SOME SHIV KUMAR S/O ISWARSAHAI RESIDENT OF 26 TILAK NAGAR AURIYA. THE IDENTITY AND FULL ADDRESS OF THE PURCHASE AND SELLER WERE AVAILABLE ON THE SALE DEED . IT WAS ALSO SUBMITTED THAT IT CANNOT BE CONSIDERED IN THE HANDS OF APPELL ANT. NO ENQUIRY HAS BEEN CARRIED OUT BY THE AO EVEN IN THE REMAND PROCEEDING S TO BRING THE TRUTH AND TO CONTROVERT THE SUBMISSION MADE BY THE ASSESSEE O N THE ISSUE. SINCE THE PROVISION OF SECTION 153C ARE DISTINCT WHICH THE AO HAS NOT APPLIED FOR THE I.T.A NO. 496/AGRA/2012 42 REASONS BEST KNOWN TO HIM AND THE ASSESSEE CANNOT B E SADDLED WITH THE LIABILITY ON ACCOUNT ON FAILURE ON THE PART OF AO, THE ADDITION WITHOUT BRINGING ANY SUPPORTING MATERIAL ON RECORD THE ADDI TION SUSTAIN BY TAKING SHELTER OF SECTION 132 (4A) IS ILLEGAL. SIMILARLY THE ADDITION OF RS.4,43,747/- WAS MADE ON THE BASIS OF DOCUMENT LP -8 WHICH SHOWED THE DETAILS OF PAYMENT MADE BY RADHA DUBEY THE CIT HAS OBSERVED THAT THE RECEIPT OF PAYM ENT MADE BY SMT RADHA DUBEY AMOUNTING TO RS. 1,16,497/- CASH TO ASHOK LAY LEND FINANCE LIMITED IS APPARENT FROM PAGE NO.66-71 AND ON PAGE NO.68-69 DE TAILS OF DENOMINATIONS OF CURRENCY ARE NOTED AT RS.1,63,625/ -. THE LEARNED AO WAS REQUESTED VIDE LETTER DATED 26.11.2006 TO SUMMON BO TH THE PERSONS. VIDE LETTER DATED 16.11.2006 IT WAS MADE CLEAR TO THE AO VIDE PARA 7 THAT THE PAPERS FOUND IN THE NAME OF RADHA DUBEY W/O K.K. DU BEY RELATE TO PURCHASE OF VEHICLE BY HER AND THE VEHICLE DOES NOT PERTAIN TO APPELLANT HER HUSBAND IS WORKING IN LIC AND FOR THE PURPOSE OF TA KING LIC PREMIUM FROM THE APPELLANT AND HIS FAMILY. HE MIGHT HAVE LEFT TH ESE PAPERS. EVEN IN THE REMAND REPORT AS MENTIONED IN PARA 22.0 3 OF CIT (A) THE AO HAS NOT BROUGHT ANY MATERIAL TO SUPPORT THE ADDITIO N. ALSO THE CIT(A) EXCEPT TAKING SHELTER OF SECTION 132(4A) WITHOUT BRINGING ANY CORROBORATIVE I.T.A NO. 496/AGRA/2012 43 MATERIAL HAS CONFIRMED THE ADDITION UNDER SECTION 1 32 (4A) WHICH IN ABSENCE OF ANY MATERIAL TO SUPPORT, IS ILLEGAL. FINALLY,LD. COUNSEL ARGUED THAT THE ADDITION MADE THEREFORE BEING DEVOID OF ANY MERIT A ND ILLEGAL MAY KINDLY BE DIRECTED TO BE DELETED. 15.2. LD.DR FOR THE REVENUE, OPPOSED THE CONTENTION S RAISED BY LD.COUNSEL FOR THE ASSESSEE. 15.3. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED THE MATERIAL AVAILABLE ON RECORD. THE ADDITIONS WERE MADE BY TH E LOWER AUTHORITIES ON THE BASIS OF THE SALE DOCUMENT FOUND DURING THE COU RSE OF SEARCH. THE DOCUMENTS ON THE FACE CLEARLY GIVES THE NAME AND AD DRESSES OF THE INSTRUMENT SHOWING THE OWNERSHIP IN THE NAME OF SMT . SHAKUNTALA DEVI AND SMT.RADHA DUBEY. NO STEPS WERE TAKEN BY THE AUTHORI TIES TO MAKE THE ADDITIONS IN THEIR NAMES NOR ANY ENQUIRY WAS CONDUC TED BY THE AO IN THE REMAND PROCEEDINGS. MOREOVER, THE LAW IS FAIRLY SE TTLED THAT THE ADDITIONS CAN ONLY BE MADE ON THE BASIS OF SOME COGENT AND CO RROBORATIVE EVIDENCE AND CANNOT BE MADE ON THE BASIS OF MERE ASSUMPTIONS AND SURMISES BY TAKING RECOURSE TO SECTION 132(4A) OF THE ACT. IN THE RESULT, THE GROUND RAISED BY THE ASSESSEE IS ALLOWED. I.T.A NO. 496/AGRA/2012 44 16. VIDE GROUND NO.15 THE ASSESSEE SUBMITTED T HAT THE CIT(A) HAS ERRED ON FACTS IN LAW IN SUSTAINING THE ADDITION OF RS.74 ,400/- FOR PURCHASE OF JEWELLERY DURING THE YEAR OWN ON MERE PRESUMPTION I N THE HANDS OF APPELLANT DESPITE WRITTEN EXPLANATION GIVEN BEFORE AO IS BAD IN LAW AND THE TOTAL POSSESSION OF JEWELLERY DID NOT EXCEED THE NORMAL A CCEPTED LIMIT LAID DOWN BY THE CBDT BY A HINDU MARRIED LADY BEING HER ISTRI DHAN OF MORE THAN 20 YEARS MARRIAGE SPAN AND BELONGING TO ZAMINDAR FAMIL Y OWNING 300 BIGHA OF AGRICULTURE LAND. THE DIARY PAGE ALSO BELONGS TO TH E YEAR 2002. HENCE ALSO IT CANNOT BE PRESUMED TO PERTAINING TO YEAR 2005-06. N O EVIDENCE TO THE EFFECT OF PURCHASE OF JEWELLARY IN ASSESSMENT YEAR 2005-06 WAS FOUND. HENCE IN CANNOT BE PRESUMED TO BE PERTAINING TO YEAR 2005-06 . THE JEWELLARY WAS RECEIPT AT THE TIME OF MARRIAGE OF THE ASSESSEE FRO M HER IN LAWS SITE AND FROM HER PARENTAL SIDES MORE THAN TWENTY YEARS AGO. ALSO THERE IS NO FINDING COMING FROM THE AO THAT THE JEWELLARY WAS PURCHASED DURING THE YEAR 2005- 06 AND IN ABSENCE OF ANY CORROBORATIVE EVIDENCE THE ADDITION MADE ON MERE PRESUMPTION MAY KINDLY BE DIRECTED TO BE DELETED. 16.1. IN THIS CONNECTION, LD.COUNSEL RELIED ON THE DECISION OF THE THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS ANIL BHALLA AS HELD THAT ADDITION IN SEARCH CASE CANNOT BE SUSTAINED IN ABSE NCE OF ANY CORROBORATIVE I.T.A NO. 496/AGRA/2012 45 EVIDENCE AND THAT EACH AND EVERY PAPER FOUND MAY NO T REPRESENT UNDISCLOSED INCOME OR EXPENDITURE . 16.2. LD.DR FOR THE REVENUE, OPPOSED THE CONTENTION S RAISED BY LD.COUNSEL FOR THE ASSESSEE. 16.3. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED THE MATERIAL AVAILABLE ON RECORD. THE ADDITIONS WERE MADE BY TH E AO ON ACCOUNT OF THE JEWELLERY PURCHASE FOR AN AMOUNT OF RS.74,400/-. W E HAD ALREADY DISCUSSED IN DETAIL THE STATUS OF THE ASSESSEE WHILE DEALING WITH GROUND NO.1 AND HAD DECIDED THE ISSUE AGAINST THE ASSESSEE BY UPHOLDING THE ADDITION OF RS.2,50,000/- ON ACCOUNT OF HOUSEHOLD EXPENSES. IN VIEW OF THE ABOVE, THE ADDITION MADE BY THE AO TOWARDS PURCHASE OF JEWELLE RY IS DELETED AS THE SAME BE SUBSUMED IN THE ADDITION CONFIRMED BY US RE GARDING HOUSEHOLD EXPENSES. THIS GROUND OF ASSESSEE IS ALLOWED. 17. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 08-01-2020 SD/- SD /- (DR. M.L. MEENA) (LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER TNMM I.T.A NO. 496/AGRA/2012 46 COPY FORWARDED TO: 1. ASSESSEE 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT SR. PRIVATE SECRETARY ITAT AGRA