Pawan Kumar Bansal, New Delhi V. DCIT, New Delhi

ITA 5201/DEL/2010

• Counselvise Citation: 520120114 RSA 2010
• Duration Of Justice: 3 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 16-09-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 23-11-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: GUNJAN PRASHAD
• Assessee Lawyers: DR RAM SAMUJH
• Keywords: Search and seizure; Loose papers; Initiation of penalty proceedings; Retraction
• Section: 132; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH E EE E : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE BEFORE SHRI G.D. AGRAWAL, VICE BEFORE SHRI G.D. AGRAWAL, VICE BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND PRESIDENT AND PRESIDENT AND PRESIDENT AND SHRI SHRI SHRI SHRI CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG, JUDICIAL , JUDICIAL , JUDICIAL , JUDICIAL MEMBER MEMBER MEMBER MEMBER ITA NO ITA NO ITA NO ITA NO . .. . 5201/DEL/2010 5201/DEL/2010 5201/DEL/2010 5201/DEL/2010 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2007 2007 2007 2007 - -- - 08 0808 08 SHRI PAWAN KUMAR BANSAL, SHRI PAWAN KUMAR BANSAL, SHRI PAWAN KUMAR BANSAL, SHRI PAWAN KUMAR BANSAL, A AA A- -- -156, FIRST FLOOR, 156, FIRST FLOOR, 156, FIRST FLOOR, 156, FIRST FLOOR, NEW FRI NEW FRI NEW FRI NEW FRIENDS COLONY, ENDS COLONY, ENDS COLONY, ENDS COLONY, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 019. 110 019. 110 019. 110 019. PAN : AAMPB1879C. PAN : AAMPB1879C. PAN : AAMPB1879C. PAN : AAMPB1879C. VS. VS. VS. VS. DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -16, 16, 16, 16, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) ITA NO ITA NO ITA NO ITA NO .5375/DEL/2010 .5375/DEL/2010 .5375/DEL/2010 .5375/DEL/2010 ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : 2007 2007 2007 2007 - -- - 08 0808 08 ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CENTRAL CI CENTRAL CI CENTRAL CI CENTRAL CIRCLE RCLE RCLE RCLE- -- -16, 16, 16, 16, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. VS. VS. VS. VS. SHRI PAWAN KUMAR BANSAL, SHRI PAWAN KUMAR BANSAL, SHRI PAWAN KUMAR BANSAL, SHRI PAWAN KUMAR BANSAL, A AA A- -- -156, FIRST FLOOR, 156, FIRST FLOOR, 156, FIRST FLOOR, 156, FIRST FLOOR, NEW FRIENDS COLONY, NEW FRIENDS COLONY, NEW FRIENDS COLONY, NEW FRIENDS COLONY, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 019. 110 019. 110 019. 110 019. PAN : AAMPB1879C. PAN : AAMPB1879C. PAN : AAMPB1879C. PAN : AAMPB1879C. (APPELLANT) (RESPONDENT) ITA NO ITA NO ITA NO ITA NO .5374/DEL/2010 .5374/DEL/2010 .5374/DEL/2010 .5374/DEL/2010 ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : 2007 2007 2007 2007 - -- - 08 0808 08 ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF INCOME T INCOME T INCOME T INCOME TAX, AX, AX, AX, CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE- -- -16, 16, 16, 16, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. VS. VS. VS. VS. SHRI MAHESH KUMAR GUPTA, SHRI MAHESH KUMAR GUPTA, SHRI MAHESH KUMAR GUPTA, SHRI MAHESH KUMAR GUPTA, 85, RAJDHANI ENCLAVE, 85, RAJDHANI ENCLAVE, 85, RAJDHANI ENCLAVE, 85, RAJDHANI ENCLAVE, DELHI DELHI DELHI DELHI 110 092. 110 092. 110 092. 110 092. PAN : AAAPG8231D. PAN : AAAPG8231D. PAN : AAAPG8231D. PAN : AAAPG8231D. (APPELLANT) (RESPONDENT) ASSESSEES BY : DR. RAM SAMUJH, ADVOCATE. REVENUE BY : SHRI GUNJAN PRASHAD, CIT - DR. ORDER ORDER ORDER ORDER PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP : :: : ITA NOS.5201/DEL/2010 & 5375/DEL/2010 ITA NOS.5201/DEL/2010 & 5375/DEL/2010 ITA NOS.5201/DEL/2010 & 5375/DEL/2010 ITA NOS.5201/DEL/2010 & 5375/DEL/2010 CROSS APPEALS IN THE CASE OF CROSS APPEALS IN THE CASE OF CROSS APPEALS IN THE CASE OF CROSS APPEALS IN THE CASE OF SHRI PAWAN KUMAR BANSAL SHRI PAWAN KUMAR BANSAL SHRI PAWAN KUMAR BANSAL SHRI PAWAN KUMAR BANSAL :- THESE CROSS APPEALS ARE DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)-II, DELHI DATED 23 RD SEPTEMBER, 2010 FOR THE AY 2007-08. ITA-5201/DEL/2010 & 2 OTHERS 2 2. IN ASSESSEES APPEAL I.E. ITA NO.5201/DEL/2010, FOLLOWING GROUNDS HAVE BEEN RAISED:- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD.CIT(APPEALS) HAD ERRED IN LAW AND ON FACTS B Y NOT ALLOWING THE FULL RELIEF FOR WHICH APPELLANT WAS LE GALLY ENTITLED. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD.CIT(APPEALS) HAD ERRED IN LAW AND ON FACTS B Y UPHOLDING THE ADDITION OF RS.27.58 LACS (47.58-20 L ACS DISCLOSED) ON ADHOC BASIS BY IGNORING THE FACT THAT IT WAS PROVED BEFORE HIM THAT IN LOOSE PAPERS ANNEXURE S A-6 AND 16 TOTALING TO RS.47.58 LACS NO NATURE OF PAYMENT AND RELATION WITH APPELLANT WAS MENTIONED. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD.CIT(APPEALS) HAD ERRED IN LAW AS WELL AS ON FACTS BY UPHOLDING THE ADDITION OF RS.27.58 LACS BY IGNOR ING THE FACTS THAT IT WAS PROVED BEFORE HIM THAT THE DA TES OF PAYMENTS MENTIONED IN LOOSE PAPERS OF ANNEXURES 6 AND 16 WERE 13.5.2005, 12.5.2005, 10.5.2005 AND 14.5.2005 WHICH PERTAINED TO A.Y. 2006-07. HENCE, THE LD.CIT(APPEALS) DECISION FOR UPHOLDING THE ADDITION OF RS.27.58 LACS BASED ON SUCH LOOSE PAPERS IN A.Y. 20 07- 08 IS TOTALLY ILLEGAL. 4. THE ASSESSEE PRAYS LEAVE TO ADD, ALTER, AMEND, MODIFY OR DELETE ALL OR ANY OF THE GROUNDS OF APPEA L ON OR BEFORE THE DATE OF HEARING OF APPEAL. 3. IN THE REVENUES APPEAL, I.E. ITA NO.5375/DEL/20 10, FOLLOWING GROUNDS HAVE BEEN RAISED:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.3,07,00,000/- ON ACCOUNT OF UNDISCLOSED INCOME ADMITTED BY SHRI PAWAN KUMAR BANSAL IN HIS STATEMEN T RECORDED DURING THE COURSE OF SEARCH. 2. THE CIT(A) HAS ERRED IN LAW IN DELETING THE ADDI TION OF RS.3,45,00,000/- MADE ON PROTECTIVE BASIS IN HIS HAND ON ACCOUNT OF SHRI MAHESH KUMAR GUPTA AND ALSO ITA-5201/DEL/2010 & 2 OTHERS 3 DELETED THE ADDITION OF RS.3,45,00,000/- MADE SUBSTANTIVE IN THE HANDS OF SHRI MAHESH KUMAR GUPTA . 3. THE CIT(A) HAS ERRED IN LAW IN NOT CONFIRMING TH E ADDITION IN ANY HANDS. 4. (A) THE ORDER OF THE CIT(A) IS ERRONEOUS AND NOT TENABLE IN LAW AND ON FACTS. (B) THE APPELLANT CRAVES TO ADD, ALTER OR AMEND ANY /ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURS E OF THE HEARING OF THE APPEAL. 4. AT THE TIME OF HEARING BEFORE US, IT IS SUBMITTE D BY THE LEARNED CIT-DR THAT THERE WAS SEARCH AND SEIZURE OPERATION UNDER SECTION 132 OF THE INCOME-TAX ACT, 1961 IN THE CASE OF M/S CAPI TAL METER GROUP OF CASES. THE ASSESSEE BELONGED TO THE SAID GROUP. T HE SEARCH HAD TAKEN PLACE AT THE ASSESSEES PREMISES ON 26 TH JUNE, 2006. THAT ON 1 ST SEPTEMBER, 2006, A LETTER WAS FILED DULY SIGNED BY THE ASSESSEE IN WHICH AN INCOME OF `7 CRORES WAS DISCLOSED. SUCH L ETTER IS AT PAGE 59 OF THE PAPER BOOK. THE LETTER IS ON THE LETTER HEA D OF THE COMPANY IN WHICH ASSESSEE IS A DIRECTOR. THE LETTER FILED BY THE ASSESSEE IS A VOLUNTARY ACT BY WHICH THE ADDITIONAL INCOME OF `7 CRORES WAS DISCLOSED BY THE ASSESSEE. THAT IN THE CASE OF A S URRENDER BY WAY OF FILING THE LETTER, IT CANNOT BE CLAIMED BY THE ASSE SSEE THAT THE SURRENDER WAS OBTAINED UNDER COERCION, PRESSURE OR INDUCEMENT BECAUSE THE SUBMISSION OF THE LETTER IS PURELY A VO LUNTARY ACT OF THE ASSESSEE. THAT ON 8 TH SEPTEMBER, 2006, THE STATEMENT OF THE ASSESSEE WAS RECORDED IN WHICH HE REITERATED THE SURRENDER M ADE VIDE LETTER DATED 1 ST SEPTEMBER, 2006. AGAIN, THE STATEMENT WAS RECORDE D ON 12 TH SEPTEMBER, 2006 IN WHICH AGAIN THE ASSESSEE REITERA TED AND AFFIRMED THE VOLUNTARY DISCLOSURE AND ALSO FURNISHED THE BRE AKUP OF THE DISCLOSURE IN TWO NAMES PARTLY IN THE NAME OF THE A SSESSEE AND PARTLY IN THE CASE OF MAHESH KUMAR GUPTA. THUS, THE SURRE NDER OF INCOME WAS BY VOLUNTARY FILING OF A LETTER AND WHICH WAS R EAFFIRMED IN TWO CONSECUTIVE STATEMENTS. THE ASSESSEE AND SHRI MAHE SH KUMAR GUPTA ITA-5201/DEL/2010 & 2 OTHERS 4 FILED THE RETURN OF INCOME. IN THE RETURN OF INCOM E, THE ASSESSEE DISCLOSED AN ADDITIONAL INCOME OF ONLY `20 LAKHS WH ICH WAS IN FACT FOR UNEXPLAINED CASH. NO ADDITIONAL INCOME WAS DISCLOS ED BY SHRI MAHESH KUMAR GUPTA. NO SATISFACTORY EXPLANATION WAS GIVEN BY THE ASSESSEE FOR NON-DISCLOSURE OF THE INCOME AS PER SURRENDER M ADE. THEREFORE, THE ASSESSING OFFICER MADE AN ADDITION OF `3,35,00, 000/-(`3,55,00,000 DISCLOSED AS PER STATEMENT DATED 12 TH SEPTEMBER, 2006 MINUS `20,00,000/- DISCLOSED IN THE RETURN OF INCOME). T HE ASSESSING OFFICER ALSO ADDED `3,45,00,000/- ON PROTECTIVE BASIS IN TH E HANDS OF THE ASSESSEE FOR THE INCOME OF `3,45,00,000/- DISCLOSED BY THE ASSESSEE IN THE STATEMENT DATED 12 TH SEPTEMBER, 2006 IN THE NAME OF SHRI MAHESH KUMAR GUPTA. IN THE ASSESSMENT OF SHRI MAHESH KUMA R GUPTA, THE SUM OF `3,45,00,000/- WAS ADDED ON SUBSTANTIVE BASI S. HE SUBMITTED THAT THE CIT(A), WITHOUT PROPERLY CONSIDERING THE F ACTS OF THE CASE AND THE LEGAL POSITION, SUSTAINED THE ADDITION AT `27.5 8 LAKHS BEING THE INCOME AS PER ANNEXURE A-6 TO A-16 FOUND AND SEIZED AT THE TIME OF SEARCH. ACCORDINGLY, HE ALLOWED THE RELIEF OF `3,0 7,42,000/- TO THE ASSESSEE. HE ALSO DELETED THE ADDITION OF `3,45,00 ,000/- MADE IN THE HANDS OF THE ASSESSEE ON PROTECTIVE BASIS. THE ADD ITION MADE IN THE CASE OF SHRI MAHESH KUMAR GUPTA ON SUBSTANTIVE BASI S WAS ALSO DELETED BY THE CIT(A). 5. IT IS SUBMITTED BY THE LEARNED CIT-DR THAT THERE WAS NO FORMAL RETRACTION OF THE DISCLOSURE OF THE INCOME BY THE A SSESSEE BUT IMPLIEDLY, BY NOT DISCLOSING THE INCOME IN THE RETU RN OF INCOME, THE DISCLOSURE WAS RETRACTED. HE SUBMITTED THAT THE FI LING OF THE RETURN WAS ALMOST AFTER TWO YEARS OF THE SURRENDER MADE BY THE ASSESSEE AND, THEREFORE, THE RETRACTION AFTER SUCH A HUGE TIME GA P CANNOT BE AND SHOULD NOT BE ACCEPTED AS A PROPER RETRACTION OF TH E STATEMENT GIVEN AT THE TIME OF SEARCH. IN SUPPORT OF THIS CONTENTI ON, HE RELIED UPON THE FOLLOWING DECISIONS:- ITA-5201/DEL/2010 & 2 OTHERS 5 1. CARPENTERS CLASSICS (EXIM) (P.) LTD. VS. DCIT [ 2007] 108 ITD 142 (BANG.). 2. DCIT, CIRCLE-2(1) VS. BHOGILAL MULCHAND [2005] 96 ITD 344 (AHD.). 3. HIRALAL MAGANLAL & CO. VS. DCIT [2005] 96 ITD 1 13 (MUM.). 4. GREENVIEW RESTAURANT VS. ACIT [2003] 263 ITR 16 9 (GAUHATI). 5. V. KUNHAMBU AND SONS VS. CIT [1996] 219 ITR 235 (KERALA). 6. MDLR RESORTS (P) LTD. & ORS. VS. CIT & ORS. [20 14] 265 CTR (DEL) 356. 6. HE FURTHER SUBMITTED THAT THE REVENUE IS NOT REQ UIRED TO BRING THE EVIDENCE FOR CORROBORATING THE INCOME SURRENDER ED BY THE ASSESSEE IN THE STATEMENT RECORDED AT THE TIME OF S EARCH. HE, THEREFORE, SUBMITTED THAT THE ORDER OF LEARNED CIT( A) SHOULD BE REVERSED AND THAT OF THE ASSESSING OFFICER MAY BE R ESTORED. 7. LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTHER H AND, STATED THAT THE SEARCH HAD TAKEN PLACE AT THE ASSESSEES PREMIS ES ON 26.07.2006 AND THE PANCHNAMA WAS DRAWN. HOWEVER, THE SEARCH W AS NOT COMPLETED AND ONE BANK LOCKER WAS SEALED. THE DEPA RTMENT WAS NOT CONCLUDING THE SEARCH AND WAS PRESSURIZING THE ASSE SSEE COMPANY TO DISCLOSE HUGE INCOME. THAT SHRI PAWAN KUMAR BANSAL IN HIS CAPACITY AS CEO OF CAPITAL POWER SYSTEMS LTD. FILED A LETTER DATED 1 ST SEPTEMBER, 2006 SURRENDERING THE ADDITIONAL INCOME OF `7 CRORES TO AVOID LITIGATION AND BUY PEACE OF MIND SUBJECT TO N ON-INITIATION OF PENALTY PROCEEDINGS OR PROSECUTION. THEREAFTER, TH E STATEMENT WAS RECORDED IN WHICH ALSO, THE ASSESSEE CLARIFIED THAT THE INCOME IS BEING SURRENDERED ON BEHALF OF CAPITAL GROUP OF COMPANIES . IN THE FINAL STATEMENT DATED 12 TH SEPTEMBER, 2006, THE BIFURCATION OF THE INCOME WAS GIVEN AS SHRI PAWAN KUMAR BANSAL - `3,55,00,000 /- AND SHRI MAHESH KUMAR GUPTA - `3,45,00,000/-. THEREAFTER, I MMEDIATELY ON NEXT DAY, THE BANK LOCKER WAS OPENED AND THE SEARCH WAS FORMALLY ITA-5201/DEL/2010 & 2 OTHERS 6 CONCLUDED. THAT THOUGH THE ASSESSEE DOES NOT HAVE ANY DIRECT EVIDENCE OF COERCION OR PRESSURE FOR DISCLOSURE OF INCOME BUT THE FACT THAT THE INITIAL SEARCH TOOK PLACE ON 26 TH JULY, 2006 AND THE SAME WAS NOT CONCLUDED TILL THE ASSESSEE MADE THE SURRENDER OF THE INCOME, IT GIVES SUFFICIENT CIRCUMSTANTIAL EVIDENCE THAT THERE WAS PRESSURE ON THE ASSESSEE TO DISCLOSE THE INCOME. HE FURTHER SUBMIT TED THAT WHEN THE ASSESSEE CONSULTED HIS COUNSEL WHILE FILING THE RET URN OF INCOME, IT CAME TO THE KNOWLEDGE OF THE ASSESSEE THAT THE SURR ENDER MADE BY HIM ON BEHALF OF THE COMPANY IS NOT BINDING ON HIM BECAUSE IT WAS NEITHER A VOLUNTARY SURRENDER OF INCOME BY THE ASSE SSEE NOR IT WAS DURING THE COURSE OF STATEMENT RECORDED UNDER SECTI ON 132(4). MOREOVER, SINCE THE ASSESSEE WAS NOT CARRYING ON AN Y BUSINESS IN HIS INDIVIDUAL CAPACITY, THERE WAS NO INCOME BELONGING TO THE ASSESSEE. HE, THEREFORE, DID NOT DISCLOSE ANY ADDITIONAL INCO ME IN HIS RETURN OF INCOME EXCEPT THE SUM OF `20 LAKHS WHICH WAS ON ACC OUNT OF CASH FOUND AT THE RESIDENCE OF VIKRAM BANSAL AMOUNTING T O `20 LAKHS. HE, THEREFORE, SUBMITTED THAT THE ADDITION MADE BY THE ASSESSING OFFICER ON THE BASIS OF STATEMENT DATED 12 TH SEPTEMBER, 2006 WAS RIGHTLY DELETED BY THE CIT(A). TO THAT EXTENT, THE ORDER O F LEARNED CIT(A) SHOULD BE SUSTAINED. 8. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF BOTH THE SIDES AND PERUSED RELEVANT MATERIAL PLACED BEFORE US. TH E UNDISPUTED FACTS ARE THAT THERE WAS SEARCH AND SEIZURE OPERATION UND ER SECTION 132 OF THE ACT IN THE CASE OF CAPITAL METER GROUP. THE AS SESSEE IS A DIRECTOR AND CEO OF CAPITAL POWER SYSTEMS LTD., ONE OF THE C OMPANIES IN CAPITAL METER GROUP. IT IS STATED BY THE LEARNED C OUNSEL THAT SUBSTANTIALLY, THE SEARCH WAS CONCLUDED THE VERY DA Y AND PANCHNAMA WAS ALSO DRAWN. THAT A RESTRAINT ORDER WAS ISSUED ON THE SAID DAY I.E. 26 TH JULY, 2006 IN RESPECT OF LOCKER NO.133 MAINTAINED WITH STATE BANK OF PATIALA, NEW FRIENDS COLONY, NEW DELHI IN THE NA ME OF SMT. MADHURI BANSAL. THE SAID LOCKER WAS OPENED ON 13 TH SEPTEMBER, 2006 AND THE ITA-5201/DEL/2010 & 2 OTHERS 7 PANCHNAMA WAS DRAWN AND RESTRAINT ORDER WAS ALSO VA CATED. THAT THE SURRENDER OF `7 CRORES WAS MADE BY A LETTER DATED 1 ST SEPTEMBER, 2006, COPY OF WHICH IS PLACED AT PAGE 59 OF THE ASSESSEE S PAPER BOOK. SINCE THE ENTIRE BASIS OF THE DISPUTED ADDITION BEFORE US IS THIS LETTER DATED 1 ST SEPTEMBER, 2006, THE SAME IS REPRODUCED BELOW FOR READY REFERENCE:- CAPITAL POWER SYSTEMS LTD. CORPORATE OFFICE & WORKS : B-40, SECTOR-IV, NOIDA 201301 (U.P.) INDIA, PH : 0120- 2542904/5/6/7 FAX : [phone] CPS/IT/GENERAL/2006-07 1 ST SEPTEMBER, 2006 THE ADDITIONAL DIRECTOR OF INCOME TAX (INVESTIGATIO N), UNIT-II, ARA CENTRE, JHANDEWALAN, NEW DELHI. SUB : SURRENDER OF INCOME. DEAR SIR, WITH REFERENCE TO SEARCH ON 26 TH & 27 TH JULY WHICH IS YET TO BE CONCLUDED AT OUR VARIOUS PREMISES, WE CAPITAL POWER SYSTEMS LIMITED HEREBY AGREE TO VOLUNTARILY SURRENDER ADDIT IONAL INCOME OF RS.7,00,00,000.00 (RS. SEVEN CRORES ONLY) TO AVOID LITIGATION AND BUY PEACE OF MIND SUBJECT TO NON-INITIATION OF PENA LTY OR PROSECUTION OR OTHER COERCIVE ACTIONS AS PER PROVIS IONS OF LAW, ON BEHALF OF THE COMPANY, ITS DIRECTORS, SENIOR EXECUT IVES, THEIR SPOUSE, FAMILY MEMBERS AND RELATIVES INCLUDING OTHE R COMPANIES, FIRMS IN WHICH SUCH PERSONS ARE PARTNERS, DIRECTORS OR INTERESTED. THE DETAILED LETTER AND SPECIFIC ASSESSEE-WISE DETA ILS SHALL BE SUBMITTED TO YOUR GOODSELF AFTER GOING THROUGH SEIZ ED MATERIAL. THANKING YOU, YOURS TRULY, FOR CAPITAL POWER SYSTEMS LTD. SD/- (PAWAN KUMAR BANSAL) C.E.O. 9. FROM THE ABOVE LETTER, IT IS EVIDENT THAT THE LETTE R WAS WRITTEN ON THE LETTER HEAD OF CAPITAL POWER SYSTEMS LTD. IN T HE BODY OF THE LETTER, IT IS MENTIONED WE CAPITAL POWER SYSTEMS LIMITED HEREBY AGREE TO VOLUNTARILY SURRENDER ADDITIONAL INCOME OF RS.7,00, 00,000/- . THE LETTER ITA-5201/DEL/2010 & 2 OTHERS 8 IS SIGNED BY SHRI PAWAN KUMAR BANSAL AS CEO OF CAPI TAL POWER SYSTEMS LTD. THUS, THE DISCLOSURE OF `7 CRORES WAS BY CAPITAL POWER SYSTEMS LTD. AND NOT BY SHRI PAWAN KUMAR BANSAL IN HIS INDIVIDUAL CAPACITY. THAT ON 8 TH SEPTEMBER, 2006, THE STATEMENT OF SHRI PAWAN KUMAR BANSAL WAS RECORDED. THE ENTIRE STATEMENT IS RELATED TO THE DISCLOSURE OF `7 CRORES, THEREFORE, THE SAME IS REP RODUCED BELOW:- Q-1: PLEASE IDENTIFY YOURSELF? ANS. I PAWAN KUMAR BANSAL S/O SH. NIHAL CHAND KEJRI WAL R/O A-156, NEW FRIENDS COLONY, NEW DELHI. Q-2: DURING THE COURSE OF SEARCH PROCEEDINGS IN THE CAPITAL GROUP OF CASES ON 26-7-2006, A NUMBER OF INCRIMINATING DOCUMENTS/DIARIES/PAPERS HAVE BEEN FOUND AND SEIZED, WHICH INDICATE THAT YOU HAVE UNDISCLOSED INCOME, WHICH IS NOT RECORDED IN THE REGULAR BOOK OF A/CS. DO YOU WANT TO OFFER ANY EXPLANATION REGARDING THESE DOCUMENTS AND THE TRANSACTIONS ENUMERATED THEREIN? ANS. I HAVE ALREADY FILED A LETTER DATED 1-9-06 VID E, WHICH I ON BEHALF OF THE CAPITAL GROUP OF COMPANIES HAS VOLUNTARILY OFFERED AN ADDITIONAL INCOME OF RS.7 (S EVEN) CRORES. AS THE SEARCH PROCEEDINGS IN OUR GROUP OF CASES ARE YET TO BE CONCLUDED AS A NUMBER OF RESTRAINTS A RE YET TO BE LIFTED AND THIS STATEMENT BEING RECORDED U/S 132(4) OF THE I.T. ACT 1961, I WOULD LIKE TO TAKE T HE BENEFIT OF EXPLANATION 5 TO SECTION 271C AND I ONCE AGAIN REITERATE MY EARLIER STATEMENT MADE VIDE LETT ER DATED 1-9-06 AND VOLUNTARILY OFFERED AN ADDITIONAL INCOME OF RS.7 CRORE (SEVEN CRORES) TO AVOID LITIGA TION AND BUY PEACE OF MIND SUBJECT TO NON INITIATION OF PENALTY OR PROSECUTION OR OTHER COERCIVE ACTIONS AS PER PROVISION OF LAW, ON BEHALF OF THE COMPANY, ITS DIR ECTORS, SENIOR EXECUTIVES, THEIR SPOUSE, FAMILY MEMBERS AND RELATIVES INCLUDING OTHER COMPANIES, FIRM IN WHICH SUCH PERSONS ARE PARTNERS, DIRECTORS OR INTERESTED. Q-3: KINDLY GIVE THE ASSESSEE WISE DETAILS OF THIS DISCLOSURE? ANS: THE SAME WILL BE PROVIDED AFTER GO THROUGH THE SEIZED MATERIAL. Q-4: KINDLY GIVE THE SOURCE OF GENERATION OF THIS R S.7 CRORES OF ADDITIONAL INCOME? ITA-5201/DEL/2010 & 2 OTHERS 9 ANS: THE DETAILED EXPLANATION REGARDING THE SOURCE OF THIS ADDITIONAL INCOME OF RS.7 CRORE WILL BE SUBMIT TED LATER ON AFTER GOING THROUGH THE SEIZED MATERIAL. IN GENERAL THIS ADDITIONAL INCOME OF RS.7 CRORES HAVE BEEN GENERATED THROUGH DIFFERENT TRANSACTIONS CONDUCTED OUTSIDE THE REGULAR BOOKS OF ACCOUNTS. Q-5: DO YOU WANT TO SAY ANYTHING ELSE? ANS: NO. THE ABOVE STATEMENT HAS BEEN GIVEN BY ME VOLUNTARIL Y OUT OF MY FREE WILL WITHOUT ANY PRESSURE, FORCE, COERCION, UNDUE INFLUENCE. I HAVE READ OVER THE AB OVE STATEMENT AND FOUND THAT IT IS CORRECTLY RECORDED A ND I STAND BY THE ABOVE STATEMENT. 10. FROM THE ABOVE, IT IS EVIDENT THAT IN RESPONSE TO QUESTION NO.2, IT HAS BEEN STATED BY THE ASSESSEE THAT SHRI PAWAN KUM AR BANSAL DISCLOSED THE INCOME ON BEHALF OF CAPITAL GROUP OF COMPANIES. IN RESPONSE TO QUESTION NO.8, IT WAS ALSO MENTIONED TH AT THE DETAILS OF THE DISCLOSURE CAN BE GIVEN BY THE ASSESSEE ONLY AFTER GOING THROUGH THE SEIZED MATERIAL. THE SAME WAS REITERATED IN RESPON SE TO QUESTION NO.4 ALSO. THUS, FROM THE ENTIRE STATEMENT, IT IS EVIDE NT THAT THE DISCLOSURE WAS MADE BY SHRI PAWAN KUMAR BANSAL FOR AN ON BEHAL F OF THE CAPITAL GROUP OF COMPANIES DUE TO UNDISCLOSED INCOME AS MAY BE REPRESENTED BY THE SEIZED MATERIAL. AS PER THIS STATEMENT ALSO , THE DISCLOSURE IS NOT IN THE INDIVIDUAL CAPACITY OF SHRI PAWAN KUMAR BANS AL. AGAIN, THE STATEMENT OF SHRI PAWAN KUMAR BANSAL WAS RECORDED O N 12 TH SEPTEMBER, 2006. THIS STATEMENT IS ALSO REPRODUCED BELOW FOR READY REFERENCE:- Q-1: PLEASE IDENTIFY YOURSELF? ANS: I PAWAN KUMAR BANSAL S/O SH. NIHAL CHAND KEJRIW AL AGED ABOUT 45 YEARS AND R/O A-156, NEW FRIENDS COLONY, N EW DELHI. Q-2: DURING THE COURSE OF SEARCH ACTION U/S 132(1) O F THE I.T. ACT 1961, ON 26-7-2006, AT YOUR BUSINESS AS WELL AS RES IDENTIAL PREMISES, A NUMBER OF DOCUMENTS/LOOSE PAPERS ETC. H AVE BEEN SEIZED. THESE DOCUMENTS ARE BEING DULY PERUSED BY YOU. YOU ARE HEREBY GIVEN AN OPPORTUNITY TO DESCRIBE AND EXPLAIN THE CONTENTS PERTAINING TO THE UNDISCLOSED INCOME OF THE GROUP? ITA-5201/DEL/2010 & 2 OTHERS 10 ANS: YES, I HAVE GONE THROUGH VERY CAREFULLY ALL TH E SEIZED PAPERS AND DOCUMENTS. I REITERATE MY EARLIER SUBMI SSION STATED VIDE LETTER DATED 1.9.2006 AND THE STATEMENT SUBSEQ UENTLY GIVEN U/S 132(4) ON 8.9.06 AND VOLUNTARILY AFTER AN ADDITI ONAL INCOME OF RS.7,00,00,000/- (RS. SEVEN CRORES). Q-3: GIVE THE DETAILS OF THESE ADDITIONAL INCOME OF RS.7,00,00,000/- (RS. SEVEN CRORES), I.E. THE DETAI LS OF THE SOURCE OF THIS MONEY AND THE DETAILS OF ITS INVESTMENT? ANS: THIS ADDITIONAL INCOME OF RS.7 CRORES WAS GENE RATED IN DIFFERENT YEARS DURING THE BLOCK PERIOD FROM UNDISC LOSED/OR UNACCOUNTED DEALINGS IN VARIOUS PROPERTY TRANSACTIO NS AND THE SAID INCOME OF RS.7 CRORES HAS BEEN EARNED BY ME AND SH. MAHESH KUMAR GUPTA (DIRECTOR-CAPITAL POWER SYSTEMS LTD.). THE BIFURCATION IS AS UNDER:- NAME UNDISCLOSED INCOME 1. SH. PAWAN KUMAR BANSAL RS.3,55,000,00/- 2. SH. MAHESH KUMAR GUPTA RS.3,45,000,00/- TOTAL RS.7,00,000,00/- THE ABOVE MONEY OF RS.7 CRORES, RECEIVED ON ACCOUNT OF UNDISCLOSED INCOME FROM UNACCOUNTED PROPERTY DEALIN GS HAVE BEEN INVESTED IN SHARE CAPITAL/CASH FOUND. THE INVESTMEN T HAVE BEEN MADE BY ME AND SH. MAHESH KUMAR GUPTA AND THE DETAI LS ARE AS FOLLOWS:- NAME UNDISCLOSED INVESTMENT 1. SH. PAWAN KUMAR BANSAL A. CASH FOUND AT THE RES IDENCE OF SH. VIKRAM BANSAL AMOUNTING TO RS.20,000,00/-. B. INVESTMENT IN SHARE CAPITAL OF VARIOUS COMPANIES AMOUNTING TO RS.3,35,000,00/- --------------------------------------------- -- RS.3,55,000,00/- 2. SH. MAHESH KUMAR GUPTA INVESTMENT IN SHARE CAPI TAL OF VARIOUS COMPANIES AMOUNTING TO RS.3,45,000,00/- -------------------------------------------- ----- TOTAL RS.3,45,000,00/- TOTAL OF 1 AND 2 = RS.7,00,000,00/- Q-4: DO YOU WANT TO SAY ANYTHING ELSE? ANS: THIS STATEMENT GIVEN BY ME IS FINAL AND I UNDE RSTAND THAT NO PENALTY OR PROSECUTION PROCEEDINGS AGAINST ME AN D THE GROUP WILL BE INITIATED IN RELATION TO THE AFORE STATED V OLUNTARILY DISCLOSURE OF ADDITIONAL INCOME OF RS.7 CRORES. THE ABOVE STATEMENT HAS BEEN GIVEN BY ME VOLUNTARIL Y OUT OF MY FREE WILL WITHOUT ANY PRESSURE, FORCE, COERCION, UN DUE INFLUENCE. I HAVE READ OVER THE ABOVE STATEMENT AND FOUND THAT I T IS CORRECTLY RECORDED AND I STAND BY THE ABOVE STATEMENT. ITA-5201/DEL/2010 & 2 OTHERS 11 11. IN RESPONSE TO QUESTION NO.2, SHRI PAWAN KUMAR BANS AL STATED I REITERATE MY EARLIER SUBMISSION STATED VIDE LETTER DATED 1.9.2006 AND THE STATEMENT SUBSEQUENTLY GIVEN U/S 132(4) ON 8.9. 06. IN RESPONSE TO QUESTION NO.3, HE SUBMITTED THAT THE ADDITIONAL INCOME OF SEVERAL YEARS WAS GENERATED IN DIFFERENT YEARS IN VARIOUS P ROPERTY TRANSACTIONS AND THE SAID INCOME OF `7 CRORES HAS BEEN EARNED BY HIM AND SHRI MAHESH KUMAR GUPTA. THE BIFURCATION IS GIVEN AT `3 ,55,00,000/- IN THE NAME OF SHRI PAWAN KUMAR BANSAL AND `3,45,00,000/- IN THE NAME OF SHRI MAHESH KUMAR GUPTA. THUS, THE INCOME IN THE I NDIVIDUAL CAPACITY OF SHRI PAWAN KUMAR BANSAL IS DISCLOSED FOR THE FIR ST TIME BY THE STATEMENT DATED 12 TH SEPTEMBER, 2006. IN THIS STATEMENT ALSO, HE DOES NOT SAY THAT THE INCOME OF `3,55,00,000/- IS THE IN COME OF AY 2007-08 BUT SAYS THAT IT IS THE ADDITIONAL INCOME OF DIFFER ENT YEARS DURING THE BLOCK PERIOD. FURTHER, IN PARAGRAPH 2, HE HAD STAT ED THAT HE REITERATED HIS EARLIER STATEMENT STATED VIDE LETTER DATED 1 ST SEPTEMBER, 2006 AND STATEMENT GIVEN ON 8 TH SEPTEMBER, 2006. THEREFORE, THE CUMULATIVE EFFECT OF THE LETTER DATED 1.9.2006 AND STATEMENTS DATED 8.9.2006 AND 12.9.2006 IS TO BE SEEN AND WHETHER AS PER THE CUMU LATIVE EFFECT OF ALL THE ABOVE THREE DOCUMENTS CAN IT BE SAID THAT THE U NDISCLOSED INCOME OF `7 CRORES IS REQUIRED TO BE ASSESSED IN THE HAND S OF THE ASSESSEE I.E. SHRI PAWAN KUMAR BANSAL FOR AY 2007-08. AS WE HAVE ALREADY STATED THAT THE ORIGINAL DISCLOSURE OF INCOME WAS BY LETTE R DATED 1 ST SEPTEMBER, 2006. FROM A PERUSAL OF THE ABOVE LETTE R, THE ONLY INFERENCE THAT CAN BE DRAWN IS THAT THE INCOME OF ` 7 CRORES WAS DISCLOSED BY CAPITAL POWER SYSTEMS LTD. IN THE FIR ST STATEMENT DATED 8 TH SEPTEMBER, 2006, SHRI PAWAN KUMAR BANSAL AFFIRMED HIS LETTER DATED 1 ST SEPTEMBER, 2006 WITH THE LITTLE MODIFICATION THAT INSTEAD OF DECLARING THE ENTIRE INCOME OF `7 CRORES IN THE HAN DS OF CAPITAL POWER SYSTEMS LTD., HE STATED THAT THE DISCLOSURE OF `7 C RORES WAS ON BEHALF OF CAPITAL GROUP OF COMPANIES. IN ANOTHER STATEMEN T DATED 12 TH SEPTEMBER, 2006, HE REITERATED HIS LETTER DATED 1 ST SEPTEMBER, 2006. ITA-5201/DEL/2010 & 2 OTHERS 12 HOWEVER, WHILE GIVING BIFURCATION, HE DISCLOSED THE INCOME PARTLY IN HIS HANDS AND PARTLY IN THE HANDS OF SHRI MAHESH KUMAR GUPTA. IN OUR OPINION, AFTER TAKING INTO ACCOUNT THE LETTER DATED 1 ST SEPTEMBER, 2006 AND THE TWO STATEMENTS RECORDED BY THE REVENUE, IT CANNOT BE SAID THAT THE INCOME OF `7 CRORES IS LIABLE TO BE ASSESS ED IN THE HANDS OF THE ASSESSEE FOR THE ASSESSMENT YEAR UNDER APPEAL. ON THESE FACTS, IN OUR OPINION, LEARNED CIT(A) ADOPTED THE RIGHT COURSE OF ACTION I.E., TO DETERMINE THE UNDISCLOSED INCOME ON THE BASIS OF LO OSE PAPERS FOUND AND SEIZED FROM THE ASSESSEES PREMISES. WHEN THE INCOME OF `7 CRORES WAS NOT DISCLOSED BY THE ASSESSEE IN HIS IND IVIDUAL CAPACITY IN THE YEAR UNDER APPEAL, THEREFORE, IN OUR OPINION, T HE ASSESSING OFFICER WAS WHOLLY UNJUSTIFIED IN RELYING UPON ONLY THE LAS T PORTION OF THE SECOND STATEMENT I.E. 12 TH SEPTEMBER, 2006 IGNORING THE LETTER DATED 1 ST SEPTEMBER, 2006, FIRST STATEMENT DATED 8 TH SEPTEMBER, 2006 AND REPLY TO QUESTION NO.2 OF THE STATEMENT DATED 12 TH SEPTEMBER, 2006 AND EVEN THE FIRST PORTION OF THE REPLY OF QUESTION NO.3 IN THE STATEMENT DATED 12 TH SEPTEMBER, 2006. WHEN WE SEE THE CUMULATIVE EFFECT OF ALL THE FACTS AS WELL AS THE STATEMENTS, FOLLOWING POSITION EMERGES:- 12. SHRI PAWAN KUMAR BANSAL IS AN INDIVIDUAL WHO IS NOT CARRYING ON ANY BUSINESS IN HIS INDIVIDUAL CAPACITY. THE BUSIN ESS IS CARRIED ON BY CAPITAL GROUP OF COMPANIES INCLUDING CAPITAL POWER SYSTEMS LTD. WHOSE CEO IS SHRI PAWAN KUMAR BANSAL, I.E., THE ASS ESSEE. THE ORIGINAL DISCLOSURE MADE VIDE LETTER DATED 1 ST SEPTEMBER, 2006 WAS FOR AND ON BEHALF OF CAPITAL POWER SYTEMS LTD. THE ASS ESSEE SIGNED THE ABOVE LETTER IN HIS CAPACITY AS CEO OF THE SAID COM PANY. IN THE STATEMENT DATED 8 TH SEPTEMBER, 2006, HE DEPOSED BEFORE THE REVENUE AUTHORITIES IN WHICH HE AFFIRMED THE VOLUNTARY DISC LOSURE OF ADDITIONAL INCOME OF `7 CRORES ON BEHALF OF CAPITAL GROUP OF C OMPANIES. THUS, EVEN IN THE STATEMENT DATED 8 TH SEPTEMBER, 2006, THERE WAS NO DISCLOSURE IN THE INDIVIDUAL CAPACITY OF SHRI PAWAN KUMAR BANSAL. IN ITA-5201/DEL/2010 & 2 OTHERS 13 ANOTHER STATEMENT DATED 12 TH SEPTEMBER, 2006, HE REITERATED HIS EARLIER STATEMENT VIDE LETTER DATED 1 ST SEPTEMBER, 2006 AND STATEMENT DATED 8 TH SEPTEMBER, 2006. THUS, THE DISCLOSURE OF INCOME W AS BY CAPITAL GROUP OF COMPANIES. HOWEVER, IN REPLY TO A NOTHER QUESTION IN HIS STATEMENT DATED 12 TH SEPTEMBER, 2006, HE DISCLOSED THE INCOME OF `3,55,00,000/- IN HIS INDIVIDUAL CAPACITY AND THE I NCOME OF `3,45,00,000/- IN THE NAME OF SHRI MAHESH KUMAR GUP TA. THE REVENUE AUTHORITIES WHO RECORDED THE STATEMENT DID NOT BOTH ER TO POINT OUT THE CONTRADICTION BETWEEN THE REPLY TO QUESTION NO.2 AN D QUESTION NO.4. IN REPLY TO QUESTION NO.2, HE REITERATED HIS LETTER DA TED 1 ST SEPTEMBER, 2006 AND STATEMENT DATED 8 TH SEPTEMBER, 2006 WHEREIN NO INCOME WAS DISCLOSED IN THE INDIVIDUAL NAMES OF SHRI PAWAN KUMAR BANSAL AND SHRI MAHESH KUMAR GUPTA. BUT, IN REPLY TO QUESTION NO.3, THE INCOME WAS DISCLOSED IN THE INDIVIDUAL NAMES. IT IS A SET TLED LAW THAT THE STATEMENT HAS TO BE CONSIDERED AS A WHOLE AND REVEN UE CANNOT CHOSE TO RELY UPON ONLY ONE PART OF THE STATEMENT IGNORIN G THE OTHER STATEMENTS. MOREOVER, STATEMENT DATED 12 TH SEPTEMBER, 2006 IS NOT THE ONLY STATEMENT BUT IT IS ONLY ONE PART OF THE S ERIES OF LETTER/STATEMENTS. IN THE STATEMENT DATED 8 TH SEPTEMBER, 2006, SHRI PAWAN KUMAR BANSAL HAS STATED THAT THE DETAILS OF T HE DISCLOSURE WOULD BE GIVEN AFTER GOING THROUGH THE SEIZED MATERIAL. THEREFORE, THE STATEMENT HAS A RELEVANCE WITH THE SEIZED MATERIAL AND STATEMENT IS MADE BY HIM TO DISCLOSE THE INCOME AS REPRESENTED B Y THE SEIZED MATERIAL. NO OTHER CORROBORATIVE EVIDENCE TO SUPPO RT THE INCOME OF `7 CRORES IN THE HANDS OF THE ASSESSEE AND SHRI MAHESH KUMAR GUPTA IS FOUND. IN THE ABOVE CIRCUMSTANCES, AFTER CONSIDERI NG THE CUMULATIVE EFFECT OF THE LETTER DATED 1 ST SEPTEMBER, 2006 AND BOTH THE STATEMENTS, THE PROPER COURSE WOULD BE TO DETERMINE THE UNDISCL OSED INCOME ON THE BASIS OF LOOSE PAPERS FOUND AND SEIZED AT THE T IME OF SEARCH. THE CIT(A) DID THE SAME. ITA-5201/DEL/2010 & 2 OTHERS 14 13. WE, THEREFORE, UPHOLD THE ORDER OF LEARNED CIT( A) TO THE EXTENT WHEREIN HE HELD THAT THE INCOME OF THE ASSESSEE I.E . SHRI PAWAN KUMAR BANSAL IS TO BE DETERMINED ON THE BASIS OF UNDISCLO SED INCOME AS PER THE NOTING ON THE LOOSE PAPERS. WITH THIS REMARK, THE REVENUES APPEAL VIDE ITA NO.5375/DEL/2010 IS DISMISSED. HOW EVER, THE ASSESSEE IN HIS APPEAL VIDE ITA NO.5201/DEL/2010 HA S ALSO DISPUTED THE CORRECTNESS OF THE INCOME DETERMINED ON THE BAS IS OF THE LOOSE PAPERS. THE BRIEF DESCRIPTION OF THE TRANSACTIONS OF VARIOUS PAGES OF SEIZED MATERIAL IS GIVEN BY THE ASSESSING OFFICER A T PAGE 4 OF THE ASSESSMENT ORDER WHICH READS AS UNDER:- ANNEXURE A-6: PAGE 77 DETAILS OF DIFFERENT FIGURES IN DIFFERENT NAMES SHOWING RS.7.90 LACS, AND THE BACK SIDE IS SHARE TRANSACTION DETAILS OF G.S. CONTROL PVT.LTD. PAGE 80 SLIP CONTAINS THE DETAILS OF NAMES AND PAYMENTS OF RS.7 LACS MADE ON 12.05.05. PAGE 81 SLIP CONTAINS THE DETAILS OF NAMES AND PAYMENTS OF RS.9 LACS MADE ON 10.12.05. PAGE 82 SLIP CONTAINS THE DETAILS OF NAMES AND PAYMENTS OF RS.8.40 LACS MADE ON 14.05.05. ANNEXURE A-16 PAGE 143 DETAILS OF INDORE & JABALPUR REGARDING CAS H SECURITY DEPOSIT OF RS.8,78,000/- AND OTHER MONETAR Y DETAILS AND BACK SIDE IS NAME AND ADDRESS. 14. FROM THE ABOVE, IT IS EVIDENT THAT PAGES 80, 81 & 82 DO NOT BELONG TO THE YEAR UNDER APPEAL. THE ACCOUNTING YE AR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION IS 1.4.2006 TO 31.3.2007 WHILE ALL THE THREE DOCUMENTS I.E., PAGES 80, 81 & 82 PERTAIN TO THE ACCOUNTING YEAR 1.4.2005 TO 31.3.2006. THEREFORE, THE ADDITIO N SUSTAINED BY THE LEARNED CIT(A) VIDE PAGES 80, 81 & 82 IS DIRECTED T O BE DELETED. ITA-5201/DEL/2010 & 2 OTHERS 15 15. SO FAR AS PAGE 77 IS CONCERNED, THE ASSESSING O FFICER HAS NOT GIVEN THE DATE OF THE SAID TRANSACTION. HOWEVER, T HE COPY OF THE LOOSE PAPER IS GIVEN AT PAGE 46 OF THE ASSESSEES PAPER B OOK FROM WHICH WE FIND THAT VARIOUS NAMES ARE WRITTEN, AMOUNT IS WRIT TEN AND NO DATE IS GIVEN ON ANY OF THE TRANSACTIONS. THE TOTAL OF SUC H TRANSACTIONS WAS `7,90,000/-. NO EXPLANATION RELATING TO NATURE OF THOSE TRANSACTIONS IS GIVEN BY THE ASSESSEES COUNSEL AT THE TIME OF HEAR ING BEFORE US. THEREFORE, IN OUR OPINION, THE ADDITION OF `7,90,00 0/- IN THE HANDS OF ASSESSEE DUE TO VARIOUS TRANSACTIONS RECORDED AT PA GE 77 OF ANNEXURE A-6 IS REQUIRED TO BE MADE. 16. PAGE 143 OF ANNEXURE A-16 IS GIVEN AT PAGE 52 O F THE ASSESSEES PAPER BOOK. THE RELEVANT PORTION OF THE PAGE WHERE THE SUM OF `8,78,000/- IS MENTIONED READS AS UNDER:- I JABALPUR (EZ) (1) PO NO :- CMD/EZ/P-II/39 DTD 24/12/03 PO COMPLETED RS.8,78,000 = RECD. TOWARDS SECURITY DEPOSIT IN CAS H RELEASE OF THIS AMOUNT TO BE PURSUED. 17. FROM THE ABOVE, IT IS EVIDENT THAT THE ABOVE EN TRY RELATES TO SOME TRANSACTION DATED 24 TH DECEMBER, 2003. THEREFORE, THIS TRANSACTION CANNOT BE SAID TO BE PERTAINING TO THE ACCOUNTING YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION . IN VIEW OF THE ABOVE, IN OUR OPINION, THE ONLY ADDITION WHICH CAN BE SUSTAINED ON THE BASIS OF LOOSE PAPERS FOUND AND SEIZED DURING THE C OURSE OF SEARCH IS `7,90,000/-. WE, THEREFORE, SUSTAIN THE ADDITION O F `7,90,000/- IN THE CASE OF THE ASSESSEE I.E. SHRI PAWAN KUMAR BANSAL AND PARTLY ALLOW THE ASSESSEES APPEAL. ITA NO.5374/DEL/2010 REVENUES APPEAL IN THE CASE OF SHRI MAHESH KUMAR GUPTA:- ITA-5201/DEL/2010 & 2 OTHERS 16 18. IN THIS APPEAL BY THE REVENUE, FOLLOWING GROUND S HAVE BEEN RAISED:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.3,07,00,000/- ON ACCOUNT OF UNDISCLOSED INCOME ADMITTED BY SHRI PAWAN KUMAR BANSAL IN HIS STATEMEN T RECORDED DURING THE COURSE OF SEARCH. 2. THE CIT(A) HAS ERRED IN LAW IN DELETING THE ADDI TION OF RS.3,45,00,000/- MADE ON PROTECTIVE BASIS IN HIS HAND ON ACCOUNT OF SHRI MAHESH KUMAR GUPTA AND ALSO DELETED THE ADDITION OF RS.3,45,00,000/- MADE SUBSTANTIVE IN THE HANDS OF SHRI MAHESH KUMAR GUPTA . 19. SO FAR AS GROUND NO.1 IS CONCERNED, THE SAME IS MISCONCEIVED BECAUSE THE ONLY ADDITION MADE BY THE ASSESSING OFF ICER IN THE CASE OF THE ASSESSEE WAS THE ADDITION OF `3,45,00,000/-. N O ADDITION OF `3,07,00,000/- WAS MADE IN THE HANDS OF THE ASSESSE E AND THEREFORE, THE QUESTION OF ANY DELETION OF SUCH ADDITION BY TH E CIT(A) DOES NOT ARISE. ACCORDINGLY, GROUND NO.1 OF THE REVENUES A PPEAL IS REJECTED BEING CONCEIVED. 20. SO FAR AS GROUND NO.2 IS CONCERNED, WE HAVE ALR EADY DISCUSSED THIS ISSUE AT LENGTH WHILE DECIDING THE SIMILAR ADD ITION IN THE CASE OF SHRI PAWAN KUMAR BANSAL AND HAVE ARRIVED AT THE CON CLUSION THAT FROM THE CUMULATIVE EFFECT OF THE LETTER DATED 1 ST SEPTEMBER, 2006 AND TWO STATEMENTS OF SHRI PAWAN KUMAR BANSAL, IT CANNOT BE ACCEPTED THAT THE INCOME OF `7 CRORES HAS BEEN DISCLOSED IN THE INDIV IDUAL NAME OF SHRI PAWAN KUMAR BANSAL AND SHRI MAHESH KUMAR GUPTA FOR AY 2007-08. WE HAVE FURTHER HELD THAT ON THE FACTS OF THE ASSES SEES CASE, THE RIGHT COURSE IS TO MAKE THE ADDITION AS PER THE TRANSACTI ONS RECORDED IN THE LOOSE PAPERS FOUND AND SEIZED AT THE TIME OF SEARCH AND WE HAVE ALREADY MADE THE ADDITION IN RESPECT OF THE LOOSE P APER IN THE HANDS OF SHRI PAWAN KUMAR BANSAL. SO FAR AS SHRI MAHESH KUM AR GUPTA IS CONCERNED, ADMITTEDLY, THERE IS NO STATEMENT BY HIM OR THERE IS NO ITA-5201/DEL/2010 & 2 OTHERS 17 LOOSE PAPER FOUND OR SEIZED FROM HIS PREMISES. THE REFORE, IN ADDITION TO WHATEVER HAS BEEN DISCUSSED IN PARAGRAPH NOS.8 T O 14 WHILE DECIDING THE APPEAL OF SHRI PAWAN KUMAR BANSAL, SHR I MAHESH KUMAR GUPTA IS NOT BOUND BY ANY STATEMENT GIVEN BY SHRI P AWAN KUMAR BANSAL. THEREFORE, EVEN IF WHILE GIVING BIFURCATIO N, SHRI PAWAN KUMAR BANSAL HAS BIFURCATED THE INCOME OF `3,45,00,000/- IN THE NAME OF SHRI MAHESH KUMAR GUPTA, SHRI MAHESH KUMAR GUPTA CANNOT BE MADE LIABLE TO PAY THE TAX THEREON. ADMITTEDLY, AT THE TIME OF SEARCH AND DURING POST-SEARCH ENQUIRY, NO STATEMENT OF SHRI MA HESH KUMAR GUPTA WAS RECORDED. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LEARNED CIT(A) WHEREIN HE HAS DELETED THE ADDITION OF `3,45,00,000/- MADE BY THE ASSESSING OFFICER ON ACC OUNT OF ALLEGED DISCLOSURE OF INCOME IN HIS NAME BY SHRI PAWAN KUMA R BANSAL. 21. IN THE RESULT, THE APPEALS OF THE REVENUE ARE D ISMISSED WHILE THE APPEAL OF THE ASSESSEE IN THE CASE OF SHRI PAWAN KU MAR BANSAL IS PARTLY ALLOWED. DECISION PRONOUNCED IN THE OPEN COURT ON 30 TH SEPTEMBER, 2014. SD/- SD/- ( (( ( CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG ) )) ) (G.D. AGRAWAL (G.D. AGRAWAL (G.D. AGRAWAL (G.D. AGRAWAL ) )) ) JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 30.09.2014 VK. COPY FORWARDED TO: - 1. APPELLANT : SHRI PAWAN KUMAR BANSAL, SHRI PAWAN KUMAR BANSAL, SHRI PAWAN KUMAR BANSAL, SHRI PAWAN KUMAR BANSAL, A AA A- -- -156, FIRST FLOOR, NEW FRIENDS COLONY, 156, FIRST FLOOR, NEW FRIENDS COLONY, 156, FIRST FLOOR, NEW FRIENDS COLONY, 156, FIRST FLOOR, NEW FRIENDS COLONY, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 019. AND 110 019. AND 110 019. AND 110 019. AND SHRI MAHESH KUMAR GUPTA, SHRI MAHESH KUMAR GUPTA, SHRI MAHESH KUMAR GUPTA, SHRI MAHESH KUMAR GUPTA, 85, RAJDHANI ENCLAVE, DELHI 85, RAJDHANI ENCLAVE, DELHI 85, RAJDHANI ENCLAVE, DELHI 85, RAJDHANI ENCLAVE, DELHI 110 092. 110 092. 110 092. 110 092. 2. REVENUE : ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE- -- -16, NEW DELHI. 16, NEW DELHI. 16, NEW DELHI. 16, NEW DELHI. ITA-5201/DEL/2010 & 2 OTHERS 18 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR