M/s Lal Chand Naresh Chand (HUF), Panchkula V. DCIT, Chandigarh

ITA 537/CHANDI/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5238 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 11-02-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 19-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: N K SAINI
• Keywords: Gift; Document seized; Deemed to accrue or arise in india; Question of law; Tangible material; Onus to prove; Documents seized
• Section: 142(1); 153A; 68; 132; 15; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI C.M. GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO.537/CHD/2015 (ASSESSMENT YEAR : 2009-10) LAL CHAND NARESH CHAND(HUF), VS. THE D.C.I.T., H.NO.212, SECTOR 6, CENTRAL CIRCLE-II, PANCHKULA. CHANDIIGARH. PAN: AAAHL7887G (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI N.K. SAINI RESPONDENT BY : SHRI SUSHIL KUMAR, CIT DR DATE OF HEARING : 23.01.2017 DATE OF PRONOUNCEMENT : 03.04.2017 O R D E R PER ANNAPURNA GUPTA, A.M . : THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (OS D), GURGAON DATED 12.03.2015, RELATING TO ASSESSMENT YE AR 2009-10. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER PASSED BY THE LEARNED CIT (A) IS CONTRARY T O LAW & FACTS OF THE CASE 2. THE LEARNED CIT (A) HAS ERRED IN LAW IN UPHOLDIN G THE ADDITION OF RS.49,50,000/- MADE BY THE ASSESSING OF FICER WITHOUT CONSIDERING THE FACT THAT ASSESSING OFFICER HAS 2 COMPLETED THE ASSESSMENT HURRIEDLY AND WITHOUT CONDUCTING ANY ENQUIRY ALTHOUGH FACTS WERE SUBMITTED BEFORE THE AO AS WELL AS BEFORE THE LEARNED CIT (A). 3. THE LEARNED CIT(A) HAS ERRED IN LAW AND FACTS IN UPHOLDING THE ADDITION OF RS.49,50.000/- MADE BY ASSESSING OFFICER WITHOUT CONSIDERING THE FACT THAT ASSESSEE HAD FILED EVIDENCE TO PROVE EVEN THE SOURC E OF MAKING PAYMENT OF RS.49,50,000/- BY BALWANT RAI REHAWAR, BY FURNISHING CONFIRMATIONS FROM FOUR PERSONS WHO HAD MADE PAYMENT TO BALWANT RAI ON ACCOUNT OF PURCHASE OF TIMBER ETC., FROM HIM BUT THE LEARNED AO AS WELL AS LEARNED CIT(A) HAD IGNORED THE SAME CONVENIENTLY WITHOUT MAKING ANY ENQUIRY AND WITHOUT CONSIDERING THE SUBMISSION. 4. THE LEARNED CIT(A) HAS ERRED IN LAW AND FACTS IN UPHOLDING THE ADDITION OF RS.49,50,000/- MADE BY ASSESSING OFFICER WITHOUT CONSIDERING THE ASSESSEE PLEA AND REJECTING THE SAME THAT 'CONFIRMATIONS OF SAL E OF TIMBER TO FOUR PARTIES ARE UNDATED, SIGNATURES WITH NO NAMES, AND CASH CONSIDERATION IN LUMP SUM EVEN THOUGH THE CLAIM OF REPAYMENT WAS IN INSTALLMENT'. THE LEARNED CIT(A) HAS VERY CONVENIENTLY IGNORED THE COPIES OF ACCOUNT OF BALWANT SINGH REHAWAR FILED IN THE BOOKS OF ACCOUNT OF THESE FOUR PARTIES FOR THE PERIOD 1.4.2008 TO 31.3. 2009 WITHOUT CONSIDERING THE SAME. 5. THE LEARNED CIT (A) HAS ERRED IN LAW AND FACTS IN UPHOLDING THE ADDITION OF RS.49,50,000/- MADE BY ASSESSING OFFICER WITHOUT CONSIDERING THE ASSESSEE PLEA THAT RECEIPT OF ASSESSEE'S OWN MONEY WHICH WAS ADVANCED IN EARLIER YEARS FOR PURCHASE OF PROPERTY WITH NO STRETCH OF IMAGINATION CAN BE TREATED AS CAS H 3 CREDIT UNDER SECTION 68 OF IT ACT 1961 IN THE HANDS OF ASSESSEE. 6. THE LEARNED CIT(A) HAS ERRED IN LAW AND FACTS IN UPHOLDING THE ADDITION OF RS.49,50,000/- MADE BY ASSESSING OFFICER BY REJECTING THE BEHAMI FAISLA WITHOUT EXAMINING THE PERSONS PRODUCED WHO WERE SIGNATORIES (NUMBERDARS OF VILLAGE) OF THE BEHAMI FAIS LA AND THE PERSON WHO HAD WRITTEN THE BEHAMI FAISLA ON THE GROUND THAT BEHAMI FAISLA WAS NOT REGISTERED AN D AUTHENTICATED BY PANCHAYAT. 3. AT THE OUTSET, IT MAY ME STATED THAT DURING THE COURSE OF HEARING THE ASSESSEE FILED AN APPLICATION , DATED 11.4.2016,FOR RAISING ADDITIONAL GROUNDS OF APPEAL WHICH READ AS UNDER: ADDITIONAL GROUND NO. 1: THE LEARNED ASSESSING OFFICER HAS ERRED IN LAW AND FA CTS IN ISSUING NOTICE UNDER SECTION 153C IN THE CASE OF TH E ASSESSEE WHEN NO INCRIMINATING DOCUMENT WAS FOUND DURING THE SEARCH OF THE THIRD PARTY. ADDITIONAL GROUND NO. 2: WHETHER THE ADDITION MADE TO THE INCOME OF THE ASSES SEE OF RS. 49,50,000/- FOR THE AY 2009-10 UNDER SECTION 68 OF T HE INCOME TAX ACT, 1961 ('ACT'), WAS NOT SUSTAINABLE BECAU SE NO INCRIMINATING MATERIAL CONCERNING SUCH ADDITION WAS FO UND DURING THE COURSE OF SEARCH AND FURTHER NO ASSESSME NTS FOR SUCH YEAR WAS PENDING ON THE DATE OF SEARCH? 4. FURTHER THE ASSESSEE ARGUED THAT THE SAME SHOULD BE ADMITTED FOR ADJUDICATION SINCE THEY WERE LEGAL GROUNDS CHALLENGING THE ISSUE OF NOTICE U/S 153C OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) AND ADDIT ION 4 MADE THERE-UNDER IN THE ABSENCE OF ANY INCRIMINATIN G MATERIAL FOUND DURING SEARCH. 5. BRIEF FACTS RELATING TO THE CASE ARE THAT SEARC H AND SEIZURE OPERATION U/S 132(1) OF THE ACT WAS CON DUCTED ON 17.11.2010 IN DR.NARESH MITTAL GROUP OF CASES. THE ASSESSEE HAD FILED RETURN U/S 139 OF THE ACT ON 27 .7.2009 SHOWING TOTAL INCOME OF RS.4,50,750/-. IN PURSUANC E TO THE SEARCH CONDUCTED AT DR.NARESH MITTAL GROUP OF C ASES, NOTICE U/S 153C R.W.S. 153A OF THE ACT DATED 17.8.2 012 WAS ISSUED TO THE ASSESSEE CALLING FOR RETURN OF IN COME OF SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WH ICH SEARCH TOOK PLACE. IN RESPONSE TO THE SAME, THE AS SESSEE FIELD ITS RETURN OF INCOME ON 8.2.2013, DECLARING I NCOME OF RS.4,50,750/-. THEREBY, STATUTORY NOTICE U/S 143(2) AND QUESTIONNAIRE IN TERMS OF SECTION 142(1) OF THE ACT WERE ISSUED TO THE ASSESSEE AND ASSESSMENT FRAMED MAKING AN ADDITION OF RS.49,50,000/- U/S 68 OF THE ACT ON ACC OUNT OF UNEXPLAINED CASH RECEIPTS. 6. BEFORE THE LD. CIT (APPEALS), THE ASSESSEE RAIS ED SEVERAL GROUNDS BOTH LEGAL, CHALLENGING THE VALIDIT Y OF THE ORDER PASSED U/S 153C OF THE ACT, AND ALSO ON THE M ERITS AGAINST THE ADDITION MADE. THE LD. CIT (APPEALS) R EJECTED ALL THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE. 5 7. AGGRIEVED BY THE SAME, THE ASSESSEE HAS NOW COME UP IN APPEAL BEFORE US RAISING THE ABOVE GROUN DS OF APPEAL. 8. WE SHALL FIRST BE TAKING UP THE ADDITIONAL GROUNDS RAISED. IN THE ADDITIONAL GROUNDS RAISED BEFORE US, THE ASSESSEE HAS CHALLENGED THE ISSUANCE OF NOT ICE U/S 153C OF THE ACT AS ALSO THE ADDITION MADE U/S 68 OF THE ACT IN THE ABSENCE OF ANY INCRIMINATING DOCUMENTS O R MATERIAL FOUND DURING THE COURSE OF SEARCH . SINCE THE GROUNDS RAISED ARE LEGAL THE SAME ARE BEING ADMITTE D FOR ADJUDICATION. 9. DURING THE COURSE OF ARGUMENTS BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THE ADD ITION MADE WAS UNWARRANTED SINCE NO INCRIMINATING MATERIA L PERTAINING TO THE ADDITION MADE OF UNEXPLAINED CASH OR RELATING TO THE IMPUGNED YEAR, WAS FOUND DURING THE COURSE OF SEARCH CONDUCTED IN DR.NARESH MITTAL GROU P OF CASES. THE LD. COUNSEL FOR THE ASSESSEE STATED THA T ONLY A CASH BOOK WAS SEIZED AND EVEN THAT DID NOT PERTAIN TO THE IMPUGNED ASSESSMENT YEAR AND RELATED ONLY TO THE PRECEDING ASSESSMENT YEAR SINCE IT SHOWED CASH ENTR IES FROM APRIL, 2007 TO JANUARY, 2008 AND, THEREFORE, PERTAINED TO ASSESSMENT YEAR 2008-09 WHILE THE IMPU GNED ASSESSMENT YEAR WAS ASSESSMENT YEAR 2009-10. THE L D. COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO THE COPY OF 6 SEIZED ANNEXURE A-7 PLACED AT PAPER BOOK PAGE NOS.9 4 TO 104 IN THIS REGARD. THE LD. COUNSEL FOR THE ASSESS EE THEREAFTER STATED THAT IN ANY CASE THE ADDITION MAD E IN THE IMPUGNED YEAR IS ON THE BASIS OF CASH ENTRIES FOUND IN THE BOOKS OF THE ASSESSEE PERTAINING TO CASH RECEIVED F ROM ONE SHRI BALWANT RAI REHAWAR AMOUNTING TO RS.49,50,000/ -. THE SAID ENTRY, LD. COUNSEL FOR THE ASSESSEE POINTE D OUT, IS NOT REFLECTED IN ANNEXURE A-7, SEIZED DURING THE COURSE OF SEARCH. THUS, THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT NO INCRIMINATING MATERIAL PERTAININ G TO THE IMPUGNED ASSESSMENT YEAR WAS AVAILABLE WITH THE ASSESSING OFFICER AND FURTHER SINCE THE ASSESSMENT OF THE ASSESSEE WAS COMPLETED AS THE TIME PERIOD FOR ISSUI NG NOTICE U/S 143(2) FOR THE IMPUGNED YEAR I.E A.Y 200 9-10 HAD EXPIRED ON 30-09-10,BEFORE THE DATE OF SEARCH ON 17- 11-10, THE COMPLETED ASSESSMENT COULD NOT HAVE BEEN DISTURBED. THE LD. COUNSEL FOR THE ASSESSEE RELIED UPON FOLLOWING DECISIONS IN THIS REGARD: 1) M/S MALA BUILDERS PVT. LTD. VS. ACIT ITA NOS.433 TO 437/CHD/2014(ITAT, CHANDIGARH BENCH). 2) CIT VS. RRJ SECURITIES, 380 ITR 612 (DEL.HC). 3) CIT VS. IBC KNOWLEDGE PARK (P) LTD. 95 CCH 0253 (KAR HC). 4) CIT VS. IBC KNOWLEDGE PARK (P) LTD. 95 CCH 0225 (KAR HC). 10. THE LD. DR, ON THE OTHER HAND, CONTENDED THAT PROCEEDINGS HAD BEEN RIGHTLY INITIATED U/S 153A AND ASSESSMENT CORRECTLY MADE U/S 153C, SINCE UNDOUBTED LY 7 CERTAIN DOCUMENTS BELONGING TO THE ASSESSEE WERE FO UND AND INVENTORIZED AS ANNEXURE A-7 AND WHICH WERE THE HANDWRITTEN CASH BOOKS FOR THE PERIOD APRIL, 2007 T O JANUARY, 2008 AND THAT THE ASSESSING OFFICER OF THE SEARCHED PERSON WAS SATISFIED THAT THE PROCEEDINGS U/S 153C OF THE ACT WAS REQUIRED TO BE INITIATED IN THE CASE OF THE ASSESSEE AND WHOSE SATISFACTION IS ALSO PLACED ON RECORD. THE LD. DR RELIED UPON THE DECISION OF THE DELHI HIGH COURT IN THE CASE OF SSP AVIATION LTD. VS. DC IT (2012) 20 TAXMANN.COM 214 (DEL) IN THIS REGARD. 11. WE HAVE HEARD CONTENTIONS OF BOTH THE PARTIES. THE UNDISPUTED FACTS RELATING TO THE PRESENT ISSUE ARE THAT SEARCH WAS CONDUCTED ON 17.11.2010 IN DR.NARESH MIT TAL GROUP OF CASES. THAT CERTAIN DOCUMENTS RELATING TO THE ASSESSEE WERE FOUND DURING THE COURSE OF SEARCH MENTIONED AS ANNEXURE A-7 AND WHICH UNDISPUTEDLY IS A HANDWRITTEN CASH BOOK PERTAINING TO THE ASSESSEE AN D RELATING TO THE PERIOD APRIL, 2007 TO JANUARY, 2008 . THE ASSESSMENT IN THE PRESENT CASE HAS BEEN FRAMED U/S 153C OF THE ACT R.W.S. 153A OF THE ACT. IT IS ALSO NOT DISPUTED THAT THE ADDITION MADE IN THE IMPUGNED ASSESSMENT Y EAR AMOUNTING TO RS.49,50,000/- FINDS NO MENTION IN THE SEIZED DOCUMENT I.E. HANDWRITTEN CASH BOOK AND HAS BEEN MADE SOLELY ON THE BASIS OF CASH BOOK ACTUALLY MAIN TAINED BY THE ASSESSEE. TO PUT IT BRIEFLY, IT IS NOT DISPU TED THAT THE ADDITION MADE IN THE PRESENT CASE IS NOT BASED ON ANY INCRIMINATING DOCUMENTS OR MATERIAL PERTAINING TO THE 8 ASSESSEE WHICH WAS FOUND DURING THE COURSE OF SEARC H CONDUCTED AT DR.NARESH MITTAL GROUP OF CASES. 12. THE ISSUE RAISED IN THE PRESENT APPEAL IS WHETHER IN THE ABSENCE OF ANY INCRIMINATING DOCUMEN TS FOUND, THE ASSESSING OFFICER WAS WITHIN HIS POWERS TO ISSUE NOTICE U/S 153C OF THE ACT AND THEREAFTER FRA ME ASSESSMENT MAKING ADDITION OF AN AMOUNT WHICH WAS N OT BASED ON ANY INCRIMINATING MATERIAL FOUND DURING SE ARCH. 13. WE FIND MERIT IN THE CONTENTION OF THE ASSESS EE. IDENTICAL ISSUE, WE FIND, HAS BEEN DEALT BY THE HON ,BLE DELHI HIGH COURT IN FAVOUR OF THE ASSESSE, IN THE C ASE OF RRJ SECURITIES (SUPRA) RELIED UPON BY THE ASSESSEE. ON GOING THROUGH THE ORDER OF THE DELHI HIGH COURT IN THE CASE OF RRJ SECURITIES LTD. (SUPRA) WE FIND THAT T HE FACTS IN THE SAID CASE WERE THAT THE SEARCH WAS UNDERTAKE N IN THE CASE OF ONE SHRI B.K. DHINGRA, SMT.POONAM DHIN GRA AND M/S MADHUSUDAN BUILDCON PVT. LTD. AND CERTAIN DOCUMENTS BELONGING TO THE ASSESSEE I.E. RRJ SECURI TIES LTD. (SUPRA) WERE SEIZED DURING THE COURSE OF SEARC H. THE ASSESSING OFFICER OF THE SEARCHED PERSON RECORDED SATISFACTION NOTE THAT THE DOCUMENTS BELONGED TO TH E ASSESSEE AND ON THIS BASIS PROCEEDINGS U/S 153C OF THE ACT WERE INITIATED. THEREAFTER ASSESSMENT FOR SIX YEARS WAS COMPLETED ON THE ASSESSEE. ONE OF THE ISSUES R AISED IN THE SAID CASE WAS THAT THE DOCUMENTS FOUND DURIN G THE 9 COURSE OF SEARCH PERTAINING TO THE ASSESSEE HAD NO RELEVANCE WITH THE ASSESSMENT YEARS IN QUESTION AND FURTHER NO ADDITION ON ACCOUNT OF THE DOCUMENTS FOU ND WAS MADE. THE QUESTION OF LAW FRAMED BEFORE THE HO N'BLE HIGH COURT IN THE SAID CASE WAS WHETHER THE ASSESSI NG OFFICER HAD JURISDICTION TO ASSESS AND RE-ASSESS IN COME OF THE ASSESSEE U/S 153C OF THE ACT IN RESPECT OF THE SAID ASSESSMENT YEARS. THE HON'BLE HIGH COURT, ON THE I SSUE OF ADDITION BEING MADE IN THE ABSENCE OF ANY INCRIMINATING MATERIAL, HELD THAT ONCE THE ASSESSME NT OF A THIRD PERSON HAS BEEN PROCEEDED WITH BY THE ASSESSI NG OFFICER OF THE THIRD PERSON ON RECEIVING THE DOCUME NTS BELONGING TO THE THIRD PERSON FROM THE ASSESSING OF FICER OF THE SEARCHED PERSON, THE PROCEEDINGS OF ASSESSMENT OR RE- ASSESSMENT HAS TO BE IN ACCORDANCE WITH SECTION 153A.THEREAFTER, THE HON'BLE HIGH COURT HELD, THAT THE PROVISIONS OF SECTION 153A HAD BEEN INTERPRETED BY THE DELHI HIGH COURT IN THE CASE OF CIT (CENTRAL)-III VS. KABUL CHAWLA IN ITA NO.707/2014 TO MEAN THAT COMPLE TED ASSESSMENTS CAN ONLY BE INTERFERED WITH BY THE ASSE SSING OFFICER ON THE BASIS OF ANY INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH. THE HON'BLE HIGH COURT WENT ON TO STATE THAT THE PRINCIPLES RELATING TO ASSESSMENT U/S 153A WOULD BE EQUALLY APPLICABLE TO PROCEEDINGS INITIATED U/S 153C OF THE ACT, SINCE S ECTION 153C OF THE ACT EXPRESSLY PROVIDES THAT THE ASSESSM ENT OR RE-ASSESSMENT UNDER THE SAID SECTION IS TO BE PROCE EDED IN ACCORDANCE WITH PROVISIONS OF SECTION 153A OF THE A CT. 10 THE RELEVANT FINDINGS OF THE HON'BLE HIGH COURT AT PARAS 21 AND 22 OF THE ORDER ARE AS FOLLOWS: 21. AS DISCUSSED HEREINBEFORE, ONCE THE AO OF THE SEARCHED PERSON IS SATISFIED THAT THE SEIZED ASSETS/DOCUMENTS BELONG T O ANOTHER PERSON AND THE SAID ASSETS/DOCUMENTS HAVE BEEN TRANSFERRED TO THE AO OF SUCH OTHER PERSON, THE PROCEEDINGS FOR ASSESSMENT/REASSESSMENT OF INCOME OF THE OTHER PERSON HAS TO PROCEED IN ACCORDANCE WITH PROV ISIONS OF SECTION 153A OF THE ACT. SECTION 153A REQUIRES THAT WHERE A SEARCH HAS BEEN INITIATED UNDER SECTION 132 OF THE ACT, THE AO IS REQUIRED TO ISSUE NOTICE REQUIRING THE NOTICEE TO FURNISH RETURNS OF INCOME IN RESPECT OF SIX ASSESSMENT YEARS RELEVANT TO THE SIX PREVIOUS YEARS PRECEDING THE PREVIOUS YEAR IN WHICH THE SEARCH IS CONDUCTED. AS DISCUSSED HEREINBEFORE, BY VIRTUE OF SECOND PROVISO TO SECTION 153A , THE ASSESSMENT/REASSESSMENT PENDING ON THE DATE OF INITIATION OF SEARCH ABATE. IN THE CONTEXT OF PROCEEDINGS UNDER SECTION 153C OF THE ACT, THE REFERENCE TO THE DATE OF INITIATION OF THE SEARCH IN THE SECOND PROVISO TO SECTION 153A HAS TO BE CONSTRUED AS THE DATE ON WHICH THE AO RECEIVES THE DOCUMENTS OR ASSETS FROM THE AO OF THE SEARCHED PERSON. THUS, BY VIRTUE OF SECOND PROVISO TO SECTION 153A OF THE ACT AS IT APPLIES TO PROCEEDINGS UNDER SECTION 153C OF THE ACT, THE ASSESSMENT/REASSESSMENT PENDING ON THE DATE ON WHICH THE ASSETS/DOCUMENTS ARE RECEIVED BY THE AO WOULD ABATE . IN RESPECT OF SUCH ASSESSMENTS WHICH HAVE ABATED, THE AO WOULD HAVE TH E JURISDICTION TO PROCEED AND MAKE AN ASSESSMENT. HOWEVER, IN RESPECT OF CONCLUDED ASSESSMENTS, THE AO WOULD ASSUME JURISDICTION TO RE ASSESS PROVIDED THAT THE ASSETS/DOCUMENTS RECEIVED BY THE AO REPRESENT O R INDICATE ANY UNDISCLOSED INCOME OR POSSIBILITY OF ANY INCOME THA T MAY HAVE REMAINED UNDISCLOSED IN THE RELEVANT ASSESSMENT YEARS. THIS COURT IN COMMISSIONER OF INCOME TAX (CENTRAL)-III V. KABUL CHAWLA : ITA 707/2014, DECIDED ON 28TH AUGUST, 2015 HAS HELD THAT COMPLETED ASSESSMEN TS COULD ONLY BE INTERFERED WITH BY THE AO ON THE BASIS OF ANY INCRI MINATING MATERIAL UNEARTHED DURING THE COURSE OF THE SEARCH OR REQUIS ITION OF THE DOCUMENTS. IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE AO DO ES NOT HAVE ANY JURISDICTION TO INTERFERE IN CONCLUDED ASSESSMENTS. THIS COURT HAD SUMMARIZED THE LEGAL POSITION IN RESPECT OF SECTION 153A OF THE ACT AS UNDER:- '37. ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT, READ WITH THE PROVISOS THERETO, AND IN THE LIGHT OF THE LAW EXPLAINED IN T HE AFOREMENTIONED DECISIONS, THE LEGAL POSITION THAT EMERGES IS AS UN DER: I. ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF THE ACT, NOTICE UNDER SECTION 153 A (1) WILL HAVE TO BE MANDATORILY ISSUE D TO THE PERSON SEARCHED REQUIRING HIM TO FILE RETURNS FOR SIX AYS IMMEDIATELY PRECEDING THE PREVIOUS YEAR RELEVANT TO THE AY IN WHICH THE S EARCH TAKES PLACE. II. ASSESSMENTS AND REASSESSMENTS PENDING ON THE DA TE OF THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH AYS WILL HAVE TO B E COMPUTED BY THE AOS AS A FRESH EXERCISE. 11 III. THE AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RESPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT AY IN WHICH THE SEAR CH TAKES PLACE. THE AO HAS THE POWER TO ASSESS AND REASSESS THE 'TOTAL INC OME' OF THE AFOREMENTIONED SIX YEARS IN SEPARATE ASSESSMENT ORD ERS FOR EACH OF THE SIX YEARS. IN OTHER WORDS THERE WILL BE ONLY ONE ASSESS MENT ORDER IN RESPECT OF EACH OF THE SIX AYS 'IN WHICH BOTH THE DISCLOSED AN D THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX'. IV. ALTHOUGH SECTION 153 A DOES NOT SAY THAT ADDITI ONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE O F THE SEARCH, OR OTHER POST-SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE AO WHICH CAN BE RELATED TO THE EVIDENCE FOUND, IT DOES NOT MEAN THA T THE ASSESSMENT 'CAN BE ARBITRARY OR MADE WITHOUT ANY RELEVANCE OR NEXUS WI TH THE SEIZED MATERIAL. OBVIOUSLY AN ASSESSMENT HAS TO BE MADE UNDER THIS S ECTION ONLY ON THE BASIS OF SEIZED MATERIAL.' V. IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE CO MPLETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESS MENT CAN BE MADE. THE WORD 'ASSESS' IN SECTION 153 A IS RELATABLE TO ABAT ED PROCEEDINGS (I.E. THOSE PENDING ON THE DATE OF SEARCH) AND THE WORD ' REASSESS' TO COMPLETED ASSESSMENT PROCEEDINGS. VI. INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, T HE JURISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UNDER SECTION 153A MERGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARAT ELY FOR EACH AY ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER M ATERIAL EXISTING OR BROUGHT ON THE RECORD OF THE AO. VII.COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153 A ONLY ON THE BASI S OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS OR UNDISCLOSED INCOME OR P ROPERTY DISCOVERED IN THE COURSE OF SEARCH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT.' 22. THE AFORESAID PRINCIPLES WOULD BE EQUALLY APPLI CABLE TO PROCEEDINGS INITIATED UNDER SECTION 153C OF THE ACT AS SECTION 153C(1) OF THE ACT EXPRESSLY PROVIDES THAT ONCE THE AO HAS RECEIVED 'M ONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLES OR THING OR BO OKS OF ACCOUNT OR DOCUMENTS SEIZED' FROM THE AO OF THE SEARCHED PERSO N, HE WOULD PROCEED TO ASSESS OR REASSESS THE INCOME OF THE PERSON TO W HOM SUCH ASSETS/BOOKS BELONG IN ACCORDANCE WITH SECTION 153A OF THE ACT. 14. THE HON'BLE COURT THEREAFTER HELD THAT IN THE ABSENCE OF DOCUMENTS SEIZED HAVING ANY RELEVANCE OR BEARING TO THE INCOME OF THE ASSESSEE FOR THE RELEV ANT ASSESSMENT YEARS, THE ASSESSING OFFICER HAD NO JURISDICTION TO MAKE ASSESSMENT U/S 153C OF THE ACT . THE 12 FINDINGS OF THE HON'BLE HIGH COURT AT PARAS 37 AND 38 OF THE ORDER ARE AS FOLLOWS: 37. AS EXPRESSLY INDICATED UNDER SECTION 153C OF THE ACT THE ASSESSMENT OR REASSESSMENT OF INCOME OF A PERSON OT HER THAN A SEARCHED PERSON WOULD PROCEED IN ACCORDANCE WITH TH E PROVISIONS OF SECTION 153A OF THE ACT. THE CONCLUDED ASSESSMENTS CANNOT BE INTERFERED WITH UNDER SECTION 153A OF THE ACT UNLESS THE INCRIMINATING MATERIAL BELONGING TO T HE ASSESSEE HAS BEEN SEIZED. 38. AS INDICATED ABOVE, IN THE PRESENT CASE, THE DOCUM ENTS SEIZED HAD NO RELEVANCE OR BEARING ON THE INCOME OF THE ASSESSEE FOR THE RELEVANT ASSESSMENT YEARS AND COULD NOT POSSIBLY REFLECT ANY UNDISCLOSED INCOME. THIS BEING TH E UNDISPUTED POSITION, NO INVESTIGATION WAS NECESSARY. THUS, THE PROVISIONS OF SECTION 153C , WHICH ARE TO ENABLE AN INVESTIGATION IN RESPECT OF THE SEIZED ASSET, COULD N OT BE RESORTED TO; THE AO HAD NO JURISDICTION TO MAKE THE REASSESSMENT UNDER SECTION 153C OF THE ACT. 15. AS PER THE AFORESAID DECISION, IT IS CLEAR THA T THE PRINCIPLES ENUNCIATED FOR SECTION 153A OF THE ACT, IN THE CASE OF COMPLETED ASSESSMENTS, TO BE BASED SOLELY AND ON THE BASIS OF INCRIMINATING MATERIAL FOUND DURING TH E COURSE OF SEARCH, APPLIES TO ASSESSMENT FRAMED U/S 153C OF THE ACT ALSO. NO DIVERGENT VIEW OF ANY HIGH COU RT IN THIS REGARD WAS POINTED OUT BY THE LD. DR TO US. T HE LD. DR, WE FIND HAS MERELY RELIED UPON THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF SSP AVIATIO N LTD. (SUPRA). THIS DECISION, WE FIND HAS BEEN DEALT WIT H BY THE HON'BLE DELHI HIGH COURT IN THE CASE OF RRJ SECURIT IES (SUPRA) AND DISTINGUISHED ALSO. THE HON'BLE DELHI HIGH COURT IN THE CASE OF RRJ SECURITIES (SUPRA) STATED THAT THE DECISION IN SSP AVIATION LTD. (SUPRA) CANNOT BE UNDERSTOOD TO MEAN THAT THE ASSESSEE HAS JURISDICTI ON TO MAKE ASSESSMENT IN EVERY CASE WHERE SEIZED ASSETS O R 13 DOCUMENTS WERE HANDED OVER TO THE ASSESSING OFFICER AND IN FACT, THE DECISION OF THE HON'BLE DELHI HIGH COU RT IN SSP AVIATION LTD. (SUPRA) STATES THAT IT IS ONLY WH ERE THE SEIZED DOCUMENTS OR ASSETS REFLECT ANY UNDISCLOSED INCOME OF THE ASSESSEE FOR THE RELEVANT ASSESSMENT YEARS, FURTHER ENQUIRY WOULD BE WARRANTED IN RESPECT OF THOSE YEAR S. THE RELEVANT PORTION OF THE ORDER AT PRA 34-37 IS AS UN DER: 34. IN SSP AVIATION (SUPRA), THIS COURT HAD NOTED THE DIFFERENCE BETWEEN THE PROVISIONS OF SECTION 158BD OF THE ACT AND THE PROVISIONS OF SECTION 153C. WHEREAS SECTION 158BD REFERRED TO THE SATISFACTION OF AN AO WITH REGARD TO ANY UNDISCLOSED INCOME BELONGING TO A PERSON OTHER THAN THE SEARCHED PERSON, SECTION 153C(1) OF THE ACT IN CONTRA ST REFERRED MERELY TO THE AO BEING SATISFIED THAT ASSETS/DOCUMENTS SEIZED DURING A SEARCH BELONGED TO A PERSON OTHER THAN ONE SEARCHED. IT IS, THUS, CLEAR THAT IT WAS NOT NECESSARY FOR THE AO, AT THE STAGE OF RECORDING THE SATISFACTION UNDER SECTION 153C TO COME TO A CONCLUS ION THAT SEIZED ASSETS WHICH BELONG TO ANOTHER PERSON REPRESE NT ANY UNDISCLOSED INCOME. IF THE AO OF A SEARCHED PERSON I S SATISFIED THAT AN ASSET/DOCUMENTS SEIZED BELONG TO A NOTHER PERSON, HE HAS A DUTY TO FORWARD THE DOCUMENTS OR TH E VALUABLE ASSETS SEIZED TO THE AO OF THE PERSON CONCER NED; APART FROM DOING SO, THE AO CAN DO NOTHING MORE. 35. THE AO OF THE PERSON OTHER THAN THE ONE SEARCHED ALSO, IS NOT, AT THE STAGE OF ISSUING NOTICE UNDER SECTION 15 3C/153A OF THE ACT, REQUIRED TO CONCLUDE THAT THE ASSETS/DOCUME NTS HANDED OVER TO HIM BY THE AO OF THE SEARCHED PERSON REPRESENT OR INDICATE ANY UNDISCLOSED INCOME OF THE ASSESSEE UNDER HIS JURISDICTION. AS EXPLAINED IN SSP AVIATION (SUPRA), SECTION 153C ONLY ENABLES THE AO OF A PERSON OTHER TH AN THE ONE SEARCHED, TO INVESTIGATE INTO THE DOCUMENTS SEI ZED AND/OR THE ASSETS SEIZED AND ASCERTAIN THAT THE SAME DO NO T REFLECT ANY UNDISCLOSED INCOME OF THE ASSESSEE (I.E A PERSON OTHER THAN THE ONE SEARCHED) FOR THE RELEVANT ASSESSMENT Y EARS. IF THE SEIZED MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING SEIZED AS HANDED OVER TO THE AO OF THE ASSESS EE, ARE DULY DISCLOSED AND REFLECTED IN THE RETURNS FILED BY TH E ASSESSEE, NO FURTHER INTERFERENCE WOULD BE CALLED FOR. SIMILARLY, IF THE BOOKS OF ACCOUNTS/DOCUMENTS SEIZED DO NOT REFLECT ANY UNDISCLOSED INCOME, THE ASSESSMENTS ALREAD Y MADE CANNOT BE INTERFERED WITH. MERELY BECAUSE VALUAB LE ARTICLES AND/OR DOCUMENTS BELONGING TO THE ASSESSEE H AVE BEEN SEIZED AND HANDED OVER TO THE AO OF THE ASSESS EE WOULD NOT NECESSARILY REQUIRE THE AO TO REOPEN THE CONCLUD ED ASSESSMENTS AND REASSESS THE INCOME OF THE ASSESSEE. 14 36. THE DECISION IN SSP AVIATION (SUPRA) CANNOT BE UNDERSTOOD TO MEAN THAT THE AO HAS THE JURISDICTION TO MAKE A REASSEMENT IN EVERY CASE, WHERE SEIZED ASSETS OR DO CUMENTS ARE HANDED OVER TO THE AO. THE QUESTION WHETHER THE DOCUMENTS/ASSETS SEIZED COULD POSSIBLY REFLECT ANY UNDISCLOSED INCOME HAS TO BE CONSIDERED BY THE AO AF TER EXAMINING THE SEIZED ASSETS/DOCUMENTS HANDED OVER T O HIM. IT IS ONLY IN CASES WHERE THE SEIZED DOCUMENTS/ASSETS COULD POSSIBLY REFLECT ANY UNDISCLOSED INCOME OF THE ASSESS EE FOR THE RELEVANT ASSESSMENT YEARS, THAT FURTHER ENQUIRY W OULD BE WARRANTED IN RESPECT OF THOSE YEARS. WHILST, IT IS NOT NECES SARY FOR THE AO TO BE SATISFIED THAT THE ASSETS/DOCUMENT S SEIZED DURING SEARCH OF ANOTHER PERSON REFLECT UNDISCLOSED I NCOME OF AN ASSESSEE BEFORE COMMENCING AN ENQUIRY UNDER SECT ION 153C OF THE ACT, IT WOULD BE IMPERMISSIBLE FOR HIM TO COMMENCE SUCH ENQUIRY IF IT IS APPARENT THAT THE DOCUMENTS/ASSETS IN QUESTION HAVE NO BEARING ON THE INCOME OF THE ASSESSEE FOR THE RELEVANT ASSESSMENT YEARS. 37. AS EXPRESSLY INDICATED UNDER SECTION 153C OF THE ACT THE ASSESSMENT OR REASSESSMENT OF INCOME OF A PERSON OT HER THAN A SEARCHED PERSON WOULD PROCEED IN ACCORDANCE WITH TH E PROVISIONS OF SECTION 153A OF THE ACT. THE CONCLUDED ASSESSMENTS CANNOT BE INTERFERED WITH UNDER SECTION 153A OF THE ACT UNLESS THE INCRIMINATING MATERIAL BELONGING TO T HE ASSESSEE HAS BEEN SEIZED. 16. HAVING SAID SO, WE FIND THAT THE FACTS IN THE PRESENT CASE DEMONSTRATE THAT THE SEIZED DOCUMENTS UNDISPUTEDLY DID NOT PERTAIN TO THE IMPUGNED ASSESS MENT YEAR SINCE THE HANDWRITTEN BOOK WAS FROM APRIL, 200 7 TO JANUARY, 2008 AND THUS PERTAINED TO A.Y 2008-09. FURTHER IT IS NOT DISPUTED THAT THE ADDITION MADE I N THE IMPUGNED CASE, RELATING TO CASH RECEIPTS OF RS.49,50,000/-, WAS NOT REFLECTED IN THE SAID CASH BOOK, NOR WAS DEMONSTRATED TO HAVE EMANATED FROM ANY DOCUMENT FOUND DURING THE COURSE OF SEARCH. CLEARL Y, THEREFORE, NEITHER THE SEIZED DOCUMENTS PERTAINED T O THE IMPUGNED ASSESSMENT YEAR, NOR ANY OTHER DOCUMENT WA S FOUND, WHICH REFLECTED THE ADDITION MADE IN THE CAS E OF 15 THE ASSESSEE. THEREFORE, THERE WAS NO INCRIMINATIN G MATERIAL AVAILABLE WITH THE ASSESSING OFFICER WHICH PERTAINED TO THE IMPUGNED ASSESSMENT YEAR AND WHICH COULD HAVE LED TO THE ADDITION MADE IN THE PRESENT CASE. FURTHER IT IS NOT DENIED THAT THE ASSESSMENT IN THE PRESENT CASE WAS COMPLETED ON THE DATE OF SEARCH, S INCE THE TIME LIMITATION FOR ISSUE OF NOTICE U/S 143(2) HAD EXPIRED ON 30-09-10 WHILE SEARCH WAS CONDUCTED ON 1 7- 11-10. THE FACTS OF THE PRESENT CASE AND THE ISSUE IN THE PRESENT CASE, WE FIND IS, THEREFORE, SQUARELY COVER ED BY THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF RRJ SECURITIES (SUPRA). 17. RESPECTFULLY FOLLOWING THE SAME WE HOLD THAT T HE AO HAD NO JURISDICTION TO INTERFERE IN THE COMPLETE D ASSESSMENT IN THE PRESENT CASE AND FRAME THE ASSESS MENT U/S 153C MAKING ADDITION THEREIN TO THE TUNE OF RS.49,50,000/- IN THE ABSENCE OF ANY INCRIMINATING MATERIAL. 18. THE ADDITIONAL GROUNDS OF APPEAL NO.1 AND 2 RAISED BY THE ASSESSEE ARE, THEREFORE, ALLOWED IN A BOVE TERMS. 19. IN GROUND NOS.1 TO 6 OF THE APPEAL RAISED BY T HE ASSESSEE, THE ASSESSEE HAS CHALLENGED THE ACTION OF THE LD. CIT (APPEALS) IN UPHOLDING THE ADDITION MADE U/ S 68 OF RS.49,50,000/-. 16 20. BRIEF FACTS RELEVANT TO THE ISSUE ARE THAT THE ASSESSEE HAD SHOWN CASH RECEIPTS OF RS.49,50,000/- ON VARIOUS DATES FROM ON SHRI BALWANT RAI REHAWAR. ON BEING ASKED TO EXPLAIN THE SAME, THE ASSESSEE SUBMI TTED THAT IT PERTAINED TO THE AMOUNT RETURNED BY LATE SH RI BALWANT RAI REHAWAR, WHICH HAD BEEN ORIGINALLY GIVE N TO HIM BY LATE SMT.LUXMI DEVI MITTAL, MOTHER OF DR.NAR ESH MITTAL, IN RELATION TO A LAND DEAL WHICH DID NOT FR UCTIFY. AS EVIDENCE, THE ASSESSEE FILED AFFIDAVIT OF THE SO N OF LATE SHRI BALWANT RAI REHAWAR SHRI SUKHDEV RAJ, COPY OF BEHAMI FAISLA DEPICTING THE PAYMENT OF RS.50 LACS BY LATE SMT.LUXMI DEVI MITTAL TO LATE SHRI BALWANT RAI REHAWAR AND FINAL SETTLEMENT THEREOF AND DEATH CERT IFICATE OF LATE SHRI BALWANT RAI REHAWAR. THE ASSESSEE ALS O SUBMITTED THAT LATE SHRI BALWANT RAI REHAWAR HAD RE PAID THE AMOUNT OUT OF SALE OF AGRICULTURAL PRODUCE GROW N BY HIM. THE ASSESSING OFFICER REJECTED ASSESSEES CON TENTION SINCE HE FOUND ALL DOCUMENTS TO BE UNREGISTERED AND ONLY SELF SERVING. HE, THEREFORE, HELD THAT THE ASSESSE E HAD FAILED TO DISCHARGE ITS ONUS U/S 68 OF THE ACT AND MADE ADDITION OF THE CASH RECEIVED OF RS.49,50,000/- TO THE INCOME OF THE ASSESSEE U/S 68 OF THE ACT. 21. AGGRIEVED BY THE SAME, THE ASSESSEE CARRIED TH E MATTER IN APPEAL BEFORE THE LD. CIT (APPEALS), WHO IN TURN CONCURRED WITH THE FINDINGS OF THE ASSESSING OFFICE R AND UPHELD THE ADDITION MADE. 17 22. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT IT HAD DISCHARGED ITS ONUS OF SATISF ACTORILY EXPLAINING THE NATURE AND SOURCE OF THE CASH RECEIP TS. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE EXPLANATION MADE BEFORE THE LOWER AUTHORITIES THAT THE CASH RECEIVED WAS ON ACCOUNT OF REPAYMENT OF ADVANC E GIVEN BY LATE SMT.LUXMI DEVI MITTAL TO LATE SHRI BA LWANT RAI REHAWAR ON ACCOUNT OF LAND DEAL WHICH DID NOT FRUCTIFY. TO SUBSTANTIATE ITS SUBMISSIONS, THE LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO THE FOLLOWIN G DOCUMENTS/EVIDENCES PLACED BEFORE THE LOWER AUTHORI TIES: A) BEHAMI FAISLA BEING THE DOCUMENT OF FINAL SETTLEMENT OF AMOUNT GIVEN BY THE MOTHER OF THE ASSESSEE AND EVIDENCING THE PAYMENT OF RS.50 LACS B Y HER TO LATE SHRI BALWANT RAI REHAWAR WHICH WAS ULTIMATELY RETURNED IN CONSEQUENCE TO THE FINAL SETTLEMENT. (PB-18). B) COPY OF FORM NO.34A APPLIED FOR BY LATE SMT.LUXMI DEVI MITTAL IN 1999, TO THE INCOME TAX DEPARTMENT, BEING APPLICATION FOR ISSUE OF CERTIFIC ATE ON SALE OF IMMOVABLE PROPERTY, TO EVIDENCE THE SOUR CE OF PAYMENT OF RS.50 LACS BY LATE SMT.LUXMI DEVI MITTAL TO LATE SHRI BALWANT RAI REHAWAR. (PB-10 & 11). C) AFFIDAVIT OF SON OF LATE SHRI BALWANT RAI REHAWA R I.E. SHRI SUKHDEV RAJ. (PB-15 16 & 24). D) DRIVING LICENCE OF SHRI SUKHDEV RAJ. 18 (PB-17 ). E) DEATH CERTIFICATE OF LATE SHRI BALWANT RAI REHAWAR. (PB-14). F) AFFIDAVITS OF NAMBERDAR IN WHOSE PRESENCE THE BEHAMI FAISLA (MUTUAL AGREEMENT OR COMMUNITY COMPROMISE) WAS WRITTEN AND AFFIDAVIT OF SHRI RAM KARAN S/O SHRI JANAK RAJ, NAMBERDAR IN WHOSE WRITING IT WAS WRITTEN. (PB-23) G) CONFIRMATORY LETTERS FROM FOUR TIMBER MERCHANTS OF JAGADHRI WHO HAS PURCHASED TIMBER FROM SHRI BALWANT RAI REHAWAR AMOUNTING TO RS.48,80,200/- WHICH HAD BEEN UTILIZED BY SHRI BALWANT RAI REHAWAR FOR MAKING REPAYMENT. (PB-19 TO 22). H) BALANCE SHEETS OF THE ASSESSEE HUF FROM 2004- 05 TO 2008-09, REFLECTING THE ADVANCE GIVEN IN THE NAME OF SHRI BALWANT RAI REHAWAR OF RS.49,50,000/-. 23. THE LD. COUNSEL FOR THE ASSESSEE ALSO CONTENDE D THAT SHRI SUKHDEV RAJ S/O SHRI BALWANT RAI REHAWAR, SHRI RAM KARAN S/O JANAK RAJ, NAMBERDAR, WHO HAD WRITTEN BEHAMI FAISLA AND SHRI JANAK RAJ, NAMBERDAR WHO WAS THE WITNESS TO THE BENAMI FAISLA, WERE ALSO PRODU CED BEFORE THE ASSESSING OFFICER FOR EXAMINATION BUT TH E ASSESSING OFFICER CHOSE NOT TO EXAMINE THEM. THE L D. COUNSEL FOR THE ASSESSEE THUS CONTENDED THAT BY VIR TUE OF HIS ABOVE EXPLANATION, SUBSTANTIATED BY VARIOUS DOCUMENTS AS STATED ABOVE AND BY HIS ACT OF PRODUCI NG WITNESSES BEFORE THE ASSESSING OFFICER FOR EXAMINAT ION, HE HAD DISCHARGED HIS ONUS OF PROVING IDENTITY, GENUIN ENESS AND CREDITWORTHINESS OF THE TRANSACTIONS AND, THERE FORE, 19 THE ADDITION MADE UNDER SECTION 68 OF THE ACT WAS T OTALLY UNWARRANTED AND UNCALLED FOR. 24. THE LEARNED D.R., ON THE OTHER HAND, RELIED UP ON THE ORDER OF THE LEARNED CIT (APPEALS) AND STATED T HAT NONE OF THE DOCUMENTS PRODUCED BY THE ASSESSEE WERE ORIGINAL AND FURTHER THAT THEY WERE ALL UNREGISTERE D. HE, THEREFORE, CONTENDED THAT THE ASSESSEE HAD FAILED T O DISCHARGE ITS ONUS AS PER THE PROVISIONS OF SECTION 68 OF THE ACT. 25. WE HAVE HEARD BOTH THE PARTIES. WE FIND MERIT IN THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESS EE. ON GOING THROUGH VARIOUS DOCUMENTS FILED BY THE ASSESS EE BEFORE US AND AFTER HAVING HEARD BOTH THE PARTIES, WE FIND THAT THE ASSESSEE HAD INDEED DISCHARGED ITS ONUS OF SATISFACTORILY EXPLAINING THE NATURE AND SOURCE OF CASH RECEIPTS. THE ASSESSEE HAD CONTENDED THAT THE AMOU NT HAD BEEN RECEIVED FROM ONE SHRI BALWANT RAI REHAWAR WHO HE CLAIMED HAD EXPIRED IN THE MEANWHILE. HIS IDENT ITY WAS PROVED BY THE ASSESSEE BY PLACING HIS DEATH CERTIFICATE AND ALSO BY THE AFFIDAVIT OF HIS SON SH RI SUKHDEV RAJ, WHOSE IDENTITY IN TURN WAS PROVED BY H IS DRIVING LICENCE. THE ASSESSEE HAD FURTHER CLAIMED THAT THE CASH WAS PAID BY SHRI BALWANT RAI REHAWAR BY WA Y OF REPAYMENT OF ADVANCE GIVEN BY SMT.LUXMI DEVI MITTAL ON ACCOUNT OF LAND DEAL. THIS EXPLANATION HAS BEEN SUBSTANTIATED BY WAY OF BEHAMI FAISLA, WHICH UNDISPUTEDLY MENTIONS THE ADVANCE OF RS.50 LACS BY 20 SMT.LUXMI DEVI MITTAL TO SHRI BALWANT RAI REHAWAR I N 1999 AND ITS ULTIMATE SETTLEMENT IN CASE THE DISPUT E IN RELATION TO THE IMPUGNED LAND IS NOT SETTLED BY 200 8. WE FIND THAT THIS ADVANCE HAS BEEN REFLECTED IN THE BA LANCE SHEET OF THE ASSESSEE HUF FROM 2004-05 TO 2008-09 CONFIRMING THE AFORESAID TRANSACTIONS. THE SAID B EHAMI FAISLA WAS WRITTEN BY A NAMBERDAR SHRI RAM KARAN S /O SHRI JANAK RAJ AND WITNESSED BY TWO NAMBERDARS. TH E ASSESSEE HAD FILED AFFIDAVIT OF SHRI SUKHDEV RAJ S/ O SHRI BALWANT RAI REHAWAR TO FURTHER SUBSTANTIATE HIS EXPLANATION AND ALSO AFFIDAVIT OF THE WRITER OF THE BEHAMI FAISLA SHRI RAM KARAN AND WITNESS OF BEHAMI FAISL A SHRI JANAK RAJ. THE CREDITWORTHINESS OF SHRI BALWA NT RAI REHAWAR IN MAKING THE IMPUGNED CASH PAYMENT WAS PROVED BY WAY OF THE LETTERS OF CONFIRMATIONS OF TI MBER MERCHANTS WHO HAS PURCHASED TIMBER FROM HIM AND PAI D RS.48,80,200/- IN RETURN FOR THE SAME, WHICH WAS EXPLAINED BY THE ASSESSEE AS THE SOURCE OF PAYMENT OF THE IMPUGNED AMOUNT OF RS.49,50,000/-. THE ASSESSEE TO FURTHER SUBSTANTIATE ITS EXPLANATION PRODUCE SHRI S UKHDEV RAJ S/O SHRI BALWANT RAI REHAWAR, SHRI RAM KARAN, WRITER OF THE BEHAMI FAISLA AND SHRI JANAK RAJ, O NE OF THE WITNESSES TO THE BEHAMI FAISLA BEFORE THE ASS ESSING OFFICER FOR CROSS EXAMINATION BUT THE ASSESSING OFF ICER DID NOT CROSS EXAMINE THEM. ALL THE ABOVE FACTS HAVE N OT BEEN DISPUTED BY THE REVENUE. THE ONLY CONTENTION OF TH E REVENUE IS THAT THE BEHAMI FAISLA WAS NOT REGISTE RED OR AUTHENTICATED BY THE GRAM PANCHAYAT, WAS NOT IN ORI GINAL 21 AND , THEREFORE, WERE SELF SERVING DOCUMENTS. WE D O NOT FIND MERIT IN THIS CONTENTION CONSIDERING THE FACT THAT THE ASSESSEE HAS TRIED TO SUBSTANTIATE ITS EXPLANATION NOT ONLY BY WAY OF THE DOCUMENTS BUT BY PRODUCING KEY WITNES SES TO THE AFORESAID TRANSACTIONS I.E. THE SON OF THE P AYER, THE WRITER OF THE BEHAMI FAISLA AND WITNESS OF THE B EHAMI FAISLA TO SUBSTANTIATE ITS ARGUMENTS. THEREFORE, THE DOCUMENTS PRODUCED BY THE ASSESSEE HAVE NOT TO BE L OOKED INTO IN ISOLATION BUT ALSO ALONGWITH THE FACT THAT THE WITNESSES WERE ALSO PRODUCED BEFORE THE ASSESSING O FFICER FOR EXAMINATION. THE ASSESSEE, WE FIND HAD PRODUCE D ALL THE POSSIBLE EVIDENCES TO SUBSTANTIATE ITS CLAIM AN D DULY DISCHARGED ITS ONUS CAST UPON IT AS PER SECTION 68 OF THE ACT. IF THE ASSESSING OFFICER FOR ANY REASON DID N OT BELIEVE THE CONTENTION OF THE ASSESSEE AND CONSIDER ED THE DOCUMENTS TO BE SUSPECT, HE COULD HAVE GONE FORWARD AND EXAMINED THE WITNESSES PRODUCED BEFORE HIM TO COME TO A CONCLUSIVE FINDING THAT THE EXPLANATION OF THE ASSE SSEE WAS FALSE .THE REVENUE HAS ALSO CONTENDED THAT THE CONFIRMATION OF TIMBER MERCHANTS WAS UNDATED AND WE RE SIGNED WITH NO NAMES. A PERUSAL OF THE SAID CONFIRMATIONS PLACED AT PAPER BOOK PAGE NO.19-22 RE VEALS THAT IT WAS ON THE LETTER HEAD OF THE MERCHANTS WHI CH MENTIONED THEIR ADDRESSES AND TELEPHONE NUMBERS AND WE ALSO FIND THAT THE PAN NUMBER OF THE MERCHANTS WAS MENTIONED IN THE CONFIRMATIONS FILED. THE NON-MENTI ONING OF NAMES OF SIGNATORIES MERELY RAISES DOUBTS ABOUT THE VERACITY OF THE CONFIRMATIONS, WHICH IT WAS THE DUT Y OF THE 22 AO TO INVESTIGATE ON THE BASIS OF INFORMATION PROV IDED IN THE CONFIRMATIONS AND ARRIVE AT A CONCLUSIVE FINDIN G THAT THEY WERE FALSE BEFORE MAKING ANY ADDITION U/S 68 O F THE ACT. THE ASSESSEE HAVING DISCHARGED HIS ONUS BY PRO VIDING A CREDIBLE EXPLANATION, THE ONUS TO PROVE THE FALSI TY IN THE ASSESSEES EXPLANATION NOW RESTED WITH THE AO. HAVI NG FAILED TO DO SO AND HAVING NOT AVAILED OF THE OPPOR TUNITY TO EXAMINE THE WITNESSES, WHICH WAS PRESENTED TO HI M BY THE ASSESSEE HIMSELF, THE REVENUE NOW CANNOT MAKE T HE ADDITION UNDER SECTION 68 OF THE ACT. THE HONBLE PUNJAB AND HARYANA HIGH COURT HAS DEALT AT LENGTH ON THE I SSUE OF ONUS UNDER THE DEEMING PROVISIONS OF THE ACT SUC H AS SECTION 69A , IN THE CASE OF CIT LUDHIANA VS SH. JAWAHAR LAL OSWAL IN GTA NO.5/CHANDI/99 DATED 29.1.2016. THE HONBLE HIGH COURT HAS HELD THAT IF THE ASSESSEE FAILS TO GIVE A CREDIBLE EXPLANATION THE A O CAN DRAW INFERENCE AGAINST THE ASSESSEE, BUT IF THE ASS ESSEE GIVES A CREDIBLE EXPLANATION AND DISCHARGES THE ONU S CAST UPON IT UNDER THE DEEMING PROVISIONS, THE ONUS REVE RTS TO THE REVENUE TO PROVE THE FALSITY IN THE FACTS AND W ITHOUT DOING SO IT CANNOT DRAW INFERENCE MERELY ON SUSPICI ONS AND DOUBTS. THE QUESTION OF LAW BEFORE THE HONBLE HIGH COURT IN THE SAID CASE WAS; IN MY VIEW, THE FOLLOWING POINTS OF LAW NEED DETER MINATION BY THE COURT:- (I) WHETHER THE ASSESSEE HAD DISCHARGED THE ONUS OF EST ABLISHING THAT GIFTS OF $200,000 MADE IN FAVOUR OF MS MONICA OSWAL AND MS RUCHIKA OSWAL THROUGH HIM BY SHRI O.S.GILL AND SHRI B.P. BH ARDWAJ WERE VALID? 23 (II) WHETHER THE AMOUNTS GIFTED BY SHRI O.S.GILL AND SH RI B.P.BHARDWAJ TO MISS MONICA OSWAL AND MISS RUCHIKA OSWAL ARE TO BE TR EATED AS THE INCOME OF THE ASSESSEE UNDER SECTION 69A OF THE ACT ?' 26. THE RELEVANT OBSERVATIONS OF THE HONBLE HIG H COURT ARE AS UNDER; BEFORE ANSWERING THE QUESTIONS POSED, IT WOULD BE A PPROPRIATE TO RECORD THAT SUSPICION AND DOUBT MAY BE THE STARTING POINT OF AN INVESTIGATION BUT CAN NOT, AT THE FINAL STAGE OF AS SESSMENT, TAKE THE PLACE OF RELEVANT FACTS, PARTICULARLY WHERE A DEEMI NG PROVISION IS SOUGHT TO BE INVOKED. THE PRINCIPLE THAT GOVERNS A DEEMING PROVISION IS THAT THE INITIAL ONUS LIES UPON THE REVENUE TO R AISE A PRIMA FACIE DOUBT ON THE BASIS OF CREDIBLE MATERIAL. THE ONUS, THEREAFTER, SHIFTS TO THE ASSESSEE TO PROVE THAT THE GIFT IS GENUINE AND IF THE ASSESSEE IS UNABLE TO PROFFER A CREDIBLE EXPLANATION, THE ASSES SING OFFICER MAY LEGITIMATELY RAISE AN INFERENCE AGAINST THE ASSESSE E. IF, HOWEVER, THE ASSESSEE FURNISHES ALL RELEVANT FACTS WITHIN HIS KN OWLEDGE AND OFFERS A CREDIBLE EXPLANATION, THE ONUS REVERTS TO THE REVEN UE TO PROVE THAT THESE FACTS ARE NOT CORRECT. THE REVENUE CANNOT DRA W AN INFERENCE BASED UPON SUSPICION OR DOUBT OR PERCEPTIONS OF CUL PABILITY OR ON THE QUANTUM OF THE AMOUNT, INVOLVED. ANY AMBIGUITY OR A NY IFS AND BUTS IN THE MATERIAL COLLECTED BY THE ASSESSING OFFICER MUS T NECESSARILY BE READ IN FAVOUR OF THE ASSESSEE, PARTICULARLY WHEN T HE QUESTION IS ONE OF TAXATION, UNDER A DEEMING PROVISION. THUS, NEITHER SUSPICION/DOUBT, NOR THE QUANTUM SHALL DETERMINE THE EXERCISE OF JUR ISDICTION BY THE ASSESSING OFFICER. THE ABOVE EXPOSITION SHALL NOT B E MISCONSTRUED TO RESTRICT THE POWER OF THE REVENUE TO RAISE AN INFER ENCE AS TO THE EFFICACY OF MATERIAL PRODUCED BY OR BEFORE THE ASSE SSING OFFICER. . . . . A QUESTION MAY, HOWEVER, LEGITIMATELY ARISE THAT SU CH A LARGE AMOUNT COULD NOT BE GIVEN AS A GIFT ON THE MARRIAGE OF THE ASSESSEE'S DAUGHTER BUT THIS QUESTION IS SPECULATIVE AND CANNOT FORM TH E BASIS FOR RAISING AN INFERENCE AGAINST AN ASSESSEE. THE ASSESSING OFF ICER WAS APPARENTLY OVER-AWED BY THE AMOUNT OF THE GIFT AND, THEREFORE, PROCEEDED TO BASE HIS OPINION ON HIS PERCEPTION THA T NO ONE WOULD GIFT SUCH A LARGE AMOUNT. A DEEMING PROVISION REQUIRES T HE ASSESSING OFFICER TO COLLECT RELEVANT FACTS AND THEN CONFRONT THE ASSESSEE, WHO IS 24 THEREAFTER, REQUIRED TO EXPLAIN INCRIMINATING FACTS AND IN CASE HE FAILS TO PROFFER A CREDIBLE INFORMATION, THE ASSESSING OF FICER MAY VALIDLY RAISE AN INFERENCE OF DEEMED INCOME UNDER SECTION 6 9-A OF THE ACT. AS ALREADY HELD, IF THE ASSESSEE PROFFERS AN EXPLANATI ON AND DISCLOSES ALL RELEVANT FACTS WITHIN HIS KNOWLEDGE, THE ONUS REVER TS TO THE REVENUE TO ADDUCE EVIDENCE AND ONLY THEREAFTER, MAY AN INFEREN CE BE RAISED, BASED UPON RELEVANT FACTS, BY INVOKING THE DEEMING PROVISIONS OF SECTION 69-A OF THE ACT. IT IS TRUE THAT INFERENCES AND PRESUMPTIONS ARE INTEGRAL TO AN ADJUDICATORY PROCESS BUT CANNOT BY THEMSELVES BE RAISED TO THE STATUS OF SUBSTANTIAL EVIDENCE OR EVI DENCE SUFFICIENT TO RAISE AN INFERENCE. A DEEMING PROVISION, THUS, ENAB LES THE REVENUE TO RAISE AN INFERENCE AGAINST AN ASSESSEE ON THE BASIS OF TANGIBLE MATERIAL AND NOT ON MERE SUSPICION, CONJECTURES OR PERCEPTIONS. IT WOULD ALSO BE NECESSARY TO REITERATE THAT IT IS NOT PERCEPTIONS BUT CONCRETE FACTS THAT UNDERLINE QUASI JUDICIAL DETERM INATIONS AND WHERE CONCRETE FACTS ARE NOT AVAILABLE, RELEVANT FACTS, A S WOULD RAISE A CREDIBLE INFERENCE OF CULPABILITY REQUIRING AN ASSE SSEE TO REBUT THE INFERENCE SO RAISED. MORE OFTEN THAN NOT, REVENUE AU THORITIES, FOR WANT OF RELEVANT MATERIAL, INSTITUTE 'INQUISITIONS', AS OPPOSED TO INQUIRIES AND BY ADDRESSING QUESTIONS THAT THE MORE INCULPATO RY IN NATURE, SEEK TO BUILD THEIR CASE, FROM ANSWERS PROFFERED BY AN A SSESSEE. THE FINDINGS OF FACT RECORDED BY THE CIT (A) AND THE TR IBUNAL REGARDING THE GIFT MADE BY DR. O.S.GILL ARE PLAUSIBLE, THOUGH DEB ATABLE, DO NOT CALL FOR INTERFERENCE. THE FIRST QUESTION OF LAW IS, THU S, ANSWERED AGAINST THE REVENUE AS REGARDS THE GIFT MADE BY DR. O.S.GIL L. 27. IN THE PRESENT CASE WE HOLD THAT THE ASSESSEE HAD GIVEN A CREDIBLE EXPLANATION THAT THE AMOUNT RE CEIVED IN CASH OF RS.49,50,000/- WAS MONEY REFUNDED BY ONE SH. BALWANT RAI REHAWAR GIVEN TO HIM ON ACCOUNT OF A LA ND DEAL AND REFUNDED SINCE THE DEAL DID NOT MATURE. TH E EXPLANATION WAS DULY SUBSTANTIATED BY THE VARIOUS DOCUMENTS PRODUCED. THE ONUS NOW RESTED WITH THE ASSESSING OFFICER TO PROVE THAT THE EXPLANATION OF THE ASSESSEE WAS FALSE. THE AO HAVING FAILED TO DISCHAR GE THIS ONUS, HAS MADE THE ADDITION MERELY ON THE BASIS OF 25 SUSPICION WHICH IS NOT PERMISSIBLE AS HELD BY THE JURISDICTIONAL HIGH COURT. 28. IN VIEW OF THE ABOVE, WE SET ASIDE THE ORDER O F THE LEARNED CIT (APPEALS) AND HOLD THAT SUM OF RS.49,50,000/- RECEIVED BY THE ASSESSEE HAVING BEEN DULY EXPLAINED BY HIM, NO ADDITION UNDER SECTION 68 OF T HE ACT IS CALLED FOR. THE ADDITION MADE, THEREFORE, IS DE LETED AND GROUND NOS.1 TO 6 RAISED BY THE ASSESSEE ARE ALLOWE D. 29. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (C.M. GARG) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 3 RD APRIL, 2017 *RATI* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH