Appeal Details
Counselvise Citation
547320114 RSA 2010
Assessee PAN
Bench
Appeal Number
Duration Of Justice
4 year(s) 11 month(s) 14 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
17-11-2015
Appeal Filed By
Assessee
Order Result
Partly Allowed
Bench Allotted
H
Next Hearing Date
27-10-2015
Assessment Year
2002-2003
Appeal Filed On
03-12-2010
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : H : NEW DELHI BEFORE SHRI J. SUDHAKAR REDDY, AM AND SHRI SUDHANSHU SRIVASTAVA, JM ITA NOS.5473 TO 5477/DEL/2010 ASSESSMENT YEARS : 2002-03 TO 2007-08 VIJAY KUMAR KATARIA, B-14, GF, GEETANJALI ENCLAVE, MALVIYA NAGAR, NEW DELHI. PAN: AAFPK4146G VS. DCIT, CENTRAL CIRCLE 11, NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI R.S. SINGHVI, ADVOCATE DEPARTMENT BY : SMT. JYOTI KUMARI, CIT, DR DATE OF HEARING : 29.10.2015 DATE OF PRONOUNCEMENT : 17.11.2015 ORDER PER J. SUDHAKAR REDDY, AM: ALL THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGA INST THE SEPARATE ORDERS PASSED BY THE CIT(A)-I, NEW DELHI, WHEREIN T HE ORDERS PASSED BY ITA NOS.5473 TO 5477/DEL/2010 2 THE AO U/S 143(3) READ WITH SECTION 153 OF THE INCO ME-TAX ACT, 1961 WERE CONFIRMED. 2. AS THE ISSUES ARISING FROM ALL THESE APPEALS ARE COMMON, FOR THE SAKE OF CONVENIENCE, THEY WERE HEARD TOGETHER AND A RE BEING DISPOSED OF BY WAY OF THIS COMMON ORDER. 3. THE FACTS IN BRIEF: THE ASSESSEE IS A CIVIL CONT RACTOR. A SEARCH AND SEIZURE OPERATION U/S 132 OF THE ACT WAS CARRIED OU T ON 24.4.2007 ON THE ASSESSEE. THEREFORE, A NOTICE U/S 153A DATED 10.8. 2009 WAS ISSUED TO THE ASSESSEE FOR AY 2002-03, REQUIRING HIM TO FILE THE RETURN WITHIN 15 DAYS OF THE SERVICE OF THE NOTICE. PURSUANT TO THE ABOVE NOTICE, THE ASSESSEE HAS FILED THE RETURN ON 17.9.2009 SUBMITTI NG THE TOTAL INCOME OF RS.14,21,810/- (RS.3,28,774/- FOR AY 2004-05, RS.7, 52,189/- FOR AY 2005-06, RS.17,71,791/- FOR AY 2006-07 AND RS.15,41 ,300/- FOR AY 2007-08) WHICH WAS PROCESSED U/S 143(1) OF THE ACT. THEREAFTER, THE ASSESSMENTS WERE COMPLETED ON 27.12.2009 U/S 143(3) READ WITH SECTION 153A OF THE ACT, MAKING CERTAIN ADDITIONS WHICH ARE IN DISPUTE BEFORE US. ITA NOS.5473 TO 5477/DEL/2010 3 4. WE HAVE HEARD SHRI R.S. SINGHVI, THE LD. COUNSEL FOR THE ASSESSEE AND SMT. JYOTI KUMARI, THE LD. CIT, DR FOR THE REVE NUE. 5. FIRST WE TAKE UP ITA NO.5473/DEL/2010 FOR THE AS SESSMENT YEAR 2002-03. THE GROUNDS OF APPEAL READ AS UNDER:- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , CIT(A) WAS NOT JUSTIFIED IN MAKING AN EXPARTE ORDER WITHOUT PROPER SERVICE OF NOTICE AND PROPER OPPORTUNITY FOR HEARING OF APPEAL. (II) THAT EXPARTE ORDER IS ON ILLEGAL AND ARBITRAR Y BASIS AND APPEAL HAS BEEN DISPOSED OFF ON MECHANICAL BASIS WITHOUT PROPE R ADJUDICATION OF VARIOUS GROUNDS ON MERITS. 2(I). THAT ASSESSMENT BEING U/S. 153A IN THE CONTE XT OF SEARCH U/S. 132(1), THE SAME HAS TO BE ON THE BASIS OF ANY MATE RIAL OR EVIDENCE FOUND AS A RESULT OF SEARCH IN RESPECT OF ANY UNDIS CLOSED INCOME. (II). THAT VARIOUS ADDITIONS IN THE ASSESSMENT U/S . 153(A) ARE WITHOUT JURISDICTION AS SAME ARE NOT ON THE BASIS OF ANY EV IDENCE OR INCRIMINATING MATERIAL FOUND DURING THE COURSE OF S EARCH AND IN TOTAL DISREGARD TO THE FACT THAT ALL THE PARTICULARS OF I NCOME ARE SUPPORTED FROM REGULAR RECORDS. 3(I) THAT LOWER AUTHORITIES HAVE ERRED IN ESTIMATI NG BUSINESS INCOME AT 10% AS AGAINST DECLARED INCOME OF 5.7% EVEN THOU GH THE RETURN INCOME IS SUPPORTED FROM THE BOOKS OF ACCOUNTS AND AUDITED RECORDS AND NO MISTAKE OR IRREGULARITY HAS BEEN FOUND IN TH E SAME. (II) THAT IN THE ABSENCE OF ANY EVIDENCE OR INCRIM INATING MATERIAL FOUND AS A RESULT OF SEARCH IN RESPECT OF TRADING R ESULT SUPPORTED FROM AUDITED BOOKS OF ACCOUNTS, IT IS NOT OPEN TO CONSID ER ANY ADDITION IN AN ILLEGAL AND ARBITRARY MANNER. ITA NOS.5473 TO 5477/DEL/2010 4 (III) THAT THE ESTIMATION OF INCOME AT 10% IS ON P RESUMPTION AND SURMISES AND THERE IS NO VALID BASIS FOR ESTIMATION OF SAME PARTICULARLY WHEN THERE IS NO CASE OF APPLICATION OF PROVISIONS OF SEC. 145 OF THE INCOME TAX ACT, 1961. 4. THAT CIT(A) HAS ERRED IN CONFIRMING ADDITION OF RS. 10 LACS IN RESPECT OF INVESTMENT IN IMMOVABLE PROPERTY AT FARI DABAD. 5. THAT THE ADDITION OF RS. 35 LACS IN RESPECT OF A LLEGED INVESTMENT IN PURCHASE OF SHARES OF M/S. KAVERI INFRASTRUCTURE PVT. LTD. IS FACTUALLY INCORRECT AND BASED ON PRESUMPTION AND SU RMISES AND WITHOUT PROPER APPRECIATION OF FACTS. 6. THAT THE CIT(A) HAS ALSO ERRED IN CONFIRMING ADD ITION OF RS. 4 LACS IN RESPECT OF INVESTMENT IN IMMOVABLE PROPERTY AT PUNE EVEN THOUGH THE INVESTMENT IS SUPPORTED FROM BANK ACCOUN T AND OTHER DETAILS AND THERE IS NO CASE OF ANY UNDISCLOSED INC OME OR INVESTMENT. 7. THAT THE ORDERS OF THE LOWER AUTHORITIES ARE NOT JUSTIFIED ON FACTS AND SAME ARE BAD IN LAW. 6. GROUND NO.1 IS NOT PRESSED. 7. GROUND NO.2 IS TO BE HELD IN FAVOUR OF THE ASSES SEE IN VIEW OF THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CAS E OF CIT, CENTRAL-III VS. KABUL CHAWLA IN ITA NO.707/2014 VIDE JUDGMENT D ATED 20 TH APRIL, 2015, WHEREIN AT PARA 37 AND 38 IT HAS BEEN HELD AS FOLLOWS:- 37. ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT, READ WITH THE PROVISOS THERETO, AND IN THE LIGHT OF THE LAW EXPLA INED IN THE AFOREMENTIONED DECISIONS, THE LEGAL POSITION THAT E MERGES IS AS UNDER: ITA NOS.5473 TO 5477/DEL/2010 5 I. ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF THE ACT, NOTICE UNDER SECTION 153 A (1) WILL HAVE TO BE MANDATORILY ISSUED TO THE PERSON SEARCHED REQUIRING HIM TO FILE RETURNS FOR S IX AYS IMMEDIATELY PRECEDING THE PREVIOUS YEAR RELEVANT TO THE AY IN WHICH THE SEARCH TAKES PLACE. II. ASSESSMENTS AND REASSESSMENTS PENDING ON THE DA TE OF THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH AYS WILL HAV E TO BE COMPUTED BY THE AOS AS A FRESH EXERCISE. III. THE AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RESPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT AY IN WHICH THE SEARCH TAKES PLACE. THE AO HAS THE POWER TO ASSESS AND REASSESS THE 'TO TAL INCOME' OF THE AFOREMENTIONED SIX YEARS IN SEPARATE ASSESSMENT ORD ERS FOR EACH OF THE SIX YEARS. IN OTHER WORDS THERE WILL BE ONLY ON E ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX AYS 'IN WHICH BOTH TH E DISCLOSED AND 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 OF THE SEARCH, OR OTHER POST-SEARCH MATERIAL OR INFORMATIO N AVAILABLE WITH THE AO WHICH CAN BE RELATED TO THE EVIDENCE FOUND, IT DOES NOT MEAN THAT THE ASSESSMENT 'CAN BE ARBITRARY OR MADE WITHO UT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOUSLY AN ASS ESSMENT HAS TO BE MADE UNDER THIS SECTION ONLY ON THE BASIS OF SEIZED MATERIAL.' V. IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE CO MPLETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSM ENT OR REASSESSMENT CAN BE MADE. THE WORD 'ASSESS' IN SECT ION 153 A IS RELATABLE TO ABATED PROCEEDINGS (I.E. THOSE PENDING ON THE DATE OF SEARCH) AND THE WORD 'REASSESS' TO COMPLETED ASSESS MENT PROCEEDINGS. VI. INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, T HE JURISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UND ER SECTION 153A MERGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARATELY FOR EACH AY ON THE BASIS OF THE FINDINGS OF THE SEA RCH AND ANY OTHER MATERIAL EXISTING OR BROUGHT ON THE RECORD OF THE A O. VII. COMPLETED ASSESSMENTS CAN BE INTERFERED WITH B Y THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153 A ONLY ON T HE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE CO URSE OF SEARCH OR REQUISITION OF DOCUMENTS OR UNDISCLOSED INCOME OR P ROPERTY DISCOVERED IN THE COURSE OF SEARCH WHICH WERE NOT P RODUCED OR NOT ITA NOS.5473 TO 5477/DEL/2010 6 ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF OR IGINAL ASSESSMENT. CONCLUSION 38. THE PRESENT APPEALS CONCERN AYS, 2002-03, 2005- 06 AND 2006- 07.ON THE DATE OF THE SEARCH THE SAID ASSESSMENTS A LREADY STOOD COMPLETED. SINCE NO INCRIMINATING MATERIAL WAS UNEA RTHED DURING THE SEARCH, NO ADDITIONS COULD HAVE BEEN MADE TO THE IN COME ALREADY ASSESSED. 8. THE LD. DR VEHEMENTLY CONTENDED THAT THERE WERE CERTAIN MATERIAL FOUND DURING THE COURSE OF SEARCH FOR THE AY 2006-0 7 AND THIS FACT PROVES THAT THE AO IS RIGHT IN MAKING ADDITIONS FOR THE ASSESSMENT YEAR 2002-03 ONWARDS. 9. WE ARE UNABLE TO ACCEPT THIS CONTENTION FOR THE REASON THAT THE ADDITIONS FOR THE IMPUGNED ASSESSMENT YEAR ARE NOT BASED ON ANY MATERIAL FOUND DURING THE COURSE OF SEARCH AND AS T HE ASSESSMENT HAVE NOT ABATED. THE ASSESSEE HAS FILED HIS RETURN OF INCOME AND THE TIME FOR ISSUE OF NOTICE U/SECTION 143(2) HAD EXPIRED AND, UNDER THOSE CIRCUMSTANCES, IT CANNOT BE SAID THAT THE ASSESSMEN TS IN QUESTION HAVE ABATED AS ARGUED BY THE LD. DR. THE DELHI BENCH OF THE ITAT IN THE ITA NOS.5473 TO 5477/DEL/2010 7 CASE OF KUSUM GUPTA VS. CIT IN ITA NO.4873/DEL/2009 AT PARA 6 OF ITS ORDER HAD DISCUSSED THE ISSUE AND CONCLUDED AS FOLL OWS:- IN THE PRESENT CASE, THE ASSESSMENT HAS BEEN COMPL ETED UNDER SUMMARY SCHEME U/S 143(1) AND TIME LIMIT FOR ISSUE OF NOTICE U/S 143(2) HAD EXPIRED ON THE DATE OF SEARCH. THEREFOR E, THERE WAS NO ASSESSMENT PENDING IN THIS CASE AND, AS SUCH, THERE WAS NO QUESTION OF ABATEMENT. 10. RESPECTFULLY FOLLOWING THE CO-ORDINATE BENCH OR DER, WE UPHOLD THE CONTENTION OF THE ASSESSEE ON THIS ISSUE. 11. GROUND NO.3 IS AGAINST THE ESTIMATION OF BUSINE SS INCOME @ 10%. THIS ISSUE IS ADMITTEDLY COVERED BY THE DECISION OF THE BENCH OF THE ITAT IN ITA NO.3105, 3106 AND 3107/DEL/2011 FOR AYS 2002-03, 2003-04 & 2006-07 IN THE CASE OF ACIT VS. MS ASHA K ATARIA VIDE ITS ORDER DATED 20.5.2013, WHEREIN AT PARA 10 AND 11 IT IS HELD AS FOLLOWS:- 10. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS A ND PERUSED THE RECORDS. WE FIND THAT THE ASSESSING OFFICER IN THIS CASE HAS ESTIMATED THE TRADING RESULTS OF THE ASSESSEE @10% OF GROSS PROFITS AS AGAINST 8.03% REFLECTED BY THE ASSESSEE. THE AS SESSEE IN THIS CASE IS EXECUTING SMALL CONTRACTS. THE CONTRACTS ARE OF SAME NATURE AND REGULAR BOOKS ARE MAINTAINED. NO SPECI FIC DEFECT HAS BEEN POINTED OUT IN THE BOOKS MAINTAINED. IT IS FURTHER NOTED THAT ITA NOS.5473 TO 5477/DEL/2010 8 ON SIMILAR FACTS, ASSESSING OFFICER HAS NOT MADE ANY ADDITION IN THE ASSESSMENT ORDER PASSED U/S. 153A FOR A.Y. 2001 -02; 2004-05; 2005-06 & 2006-07. AS SUCH THERE IS A CLEAR CONTRA DICTION IN THE APPROACH OF THE ASSESSING OFFICER. FURTHERMORE, R EFERENCE TO NET PROFIT IN THE CASE OF VIJAY KUMAR KATARIA AND ASSES SEE IN THE PAST IS FACTUALLY INCORRECT, AS PER DETAILS CITED ABOVE. 11. WE FURTHER NOTE THAT THIS IS A CASE OF SEARCH AND ASSESSMENT ORDER WAS PASSED U/S. 153A OF THE I.T. ACT. IT IS NOTED THAT NO INCRIMINATING MATERIAL OR EVIDENCE WAS FOUND OR SEI ZED AT THE TIME OF SEARCH AND THERE IS NO REFERENCE TO THE SAME IN THE ASSESSING OFFICERS ORDER. IN THIS REGARD, WE FURTHER PLACED RELIANCE THE ORDER OF THE SPECIAL BENCH OF THE ITAT IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. VS. DCIT 137 ITD 287. IN THIS CASE WITH REFERENCE TO THE ASSESSMENT U/S. 153A OF THE I.T. ACT, IT WAS HE LD THAT ANY ASSESSMENT THAT ARE ABATED, THE ASSESSING OFFICER RETAINS THE ORIGINAL JURISDICTION AS WELL AS JURISDICTION CONFE RRED ON HIM U/S. 153A FOR WHICH ASSESSMENT SHALL BE MADE FOR EACH AS SESSMENT YEAR SEPARATELY. IN OTHER CASES IN ADDITION TO THE INC OME THAT HAVE ALREADY BEEN ASSESSED, THE ASSESSMENT U/S. 153A WILL BE MADE ON THE BASIS OF INCRIMINATING MATERIAL WHICH IN THE CO NTEXT OF RELEVANT PROVISIONS MEANS (I) BOOKS OF ACCOUNTS, OTHER DOCU MENTS FOUND IN THE COURSE OF SEARCH, BUT NOT PRODUCED IN THE COURS E OF ORIGINAL ASSESSMENT & (II) UNDISCLOSED INCOME OR PROPERTY DI SCOVERED DURING THE COURSE OF SEARCH. ITA NOS.5473 TO 5477/DEL/2010 9 12. RESPECTFULLY FOLLOWING THE SAME, THIS GROUND OF THE ASSESSEE IS ALLOWED. 13. GROUND NO.4 IS AGAINST AN ADDITION OF RS.10 LAC IN RESPECT OF THE INVESTMENT IN MOVEABLE PROPERTY AT FARIDABAD. 14. A PERUSAL OF THE ASSESSMENT ORDER REVEALS THAT THIS ADDITION IS NOT BASED ON ANY MATERIAL FOUND OR SEIZED DURING THE CO URSE OF SEARCH. UNDER SUCH CIRCUMSTANCES, APPLYING THE RATIO OF THE DECISION IN THE CASE OF CIT, CENTRAL-III VS. KABUL CHAWLA (SUPRA), THIS ADDITION HAS TO BE DELETED. 15. GROUND NO.5 IS AGAINST AN ADDITION MADE IN RESP ECT OF ALLEGED INVESTMENT IN PURCHASE OF SHARES OF M/S KAVERI INFR ASTRUCTURE PVT. LTD. THIS ADDITION HAS TO BE DELETED FOR THE REASON THAT IT IS NOT BASED ON ANY MATERIAL FOUND OR SEIZED DURING THE COURSE OF SEARC H. IN ADDITION, THE ASSESSEE DEMONSTRATES THAT THE ADDITION IS FACTUALL Y INCORRECT. FOR THESE REASONS, WE DELETE THE ADDITION MADE. ITA NOS.5473 TO 5477/DEL/2010 10 16. GROUND NO.6 IS AGAINST AN ADDITION OF RS.4 LAC IN RESPECT OF INVESTMENT IN IMMOVEABLE PROPERTY AT PUNE. DURING THE COURSE OF SEARCH, COPIES OF TWO AGREEMENTS EXECUTED ON 6.6.20 01 BY THE ASSESSEE FOR THE PURCHASE OF FLAT NOS.13 AND 16 OF E-4 IN KU MAR GALAXY, PUNE, WERE SEIZED AND MARKED AS M 494/07 AT PAGE NOS.144 TO 147 OF THE SEIZED MATERIAL. THE ASSESSEE HAS NOT OFFERED ANY EXPLANATION AS TO THE SOURCE OF FUNDS FOR MAKING THESE PURCHASES. UNDER T HESE CIRCUMSTANCES, AS THIS ADDITION IS BASED ON SEIZED MATERIAL, AND, AS THE ASSESSEE, DESPITE REPEATED OPPORTUNITIES, HAS FAILED TO DEMONSTRATE T HE SOURCE OF INVESTMENT, WE CONFIRM THE ADDITION AND DISMISS THI S GROUND OF THE ASSESSEE. 17. GROUND NO.7 IS GENERAL IN NATURE. 18. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED IN PART. ITA NO.5474/DEL/2010 (AY : 2004-05) 19. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE RE AD AS UNDER:- ITA NOS.5473 TO 5477/DEL/2010 11 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , CIT(A) WAS NOT JUSTIFIED IN MAKING AN EXPARTE ORDER WITHOUT PROPER SERVICE OF NOTICE AND PROPER OPPORTUNITY FOR HEARING OF APPEAL. (II) THAT EXPARTE ORDER IS ON ILLEGAL AND ARBITRAR Y BASIS AND APPEAL HAS BEEN DISPOSED OFF ON MECHANICAL BASIS WITHOUT PROPE R ADJUDICATION OF VARIOUS GROUNDS ON MERITS. 2(I). THAT ASSESSMENT BEING U/S. 153A IN THE CONTE XT OF SEARCH U/S. 132(1), THE SAME HAS TO BE ON THE BASIS OF ANY MATE RIAL OR EVIDENCE FOUND AS A RESULT OF SEARCH IN RESPECT OF ANY UNDIS CLOSED INCOME. (II). THAT VARIOUS ADDITIONS IN THE ASSESSMENT U/S . 153(A) ARE WITHOUT JURISDICTION AS SAME ARE NOT ON THE BASIS OF ANY EV IDENCE OR INCRIMINATING MATERIAL FOUND DURING THE COURSE OF S EARCH AND IN TOTAL DISREGARD TO THE FACT THAT ALL THE PARTICULARS OF I NCOME ARE SUPPORTED FROM REGULAR RECORDS. 3. THAT CIT(A) HAS ERRED IN CONFIRMING ADDITION OF RS. 63,82,000/- U/S 69 OF THE INCOME TAX ACT, 1961 IN RESPECT OF PU RCHASE OF IMMOVABLE PROPERTY AT GEETANJALI ENCLAVE, NEW DELHI EVEN THOUGH THE INVESTMENT IS SUPPORTED FROM BANK ACCOUNT AND O THER DETAILS AND THERE IS NO CASE OF ANY UNDISCLOSED INCOME OR INVES TMENT. THAT THE ADDITION HAS BEEN MADE MERELY ON THE BASIS OF THE REPORT OF DISTRICT VALUATION OFFICER AND WITHOUT APPRECIATING THE DOCUMENTS AVAILABLE ON RECORDS. 4. THAT THE ORDERS OF THE LOWER AUTHORITIES ARE NOT JUSTIFIED ON FACTS AND SAME ARE BAD IN LAW. 20. GROUND NO.1 IS DISMISSED AS NOT PRESSED. 21. GROUND NO.2 IS DECIDED IN FAVOUR OF THE ASSESSE E CONSISTENT WITH THE VIEW TAKEN BY US ON SIMILAR GROUNDS IN ITA NO.5 473/DEL/2010 FOR ITA NOS.5473 TO 5477/DEL/2010 12 AY 2002-03, WHEREIN WE HAVE APPLIED THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF KABUL CHAWLA (SUPRA). 22. GROUND NO.3 HAS TO BE ALLOWED IN FAVOUR OF THE ASSESSEE BY APPLYING THE DECISION OF THE BENCH OF THE TRIBUN AL IN THE CASE ACIT VS. MRS. ASHA KATARIA, WHEREIN AT PAGE 26 AND 27, P ARA 50 & 51, IT IS HELD AS FOLLOWS:- 50. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS A ND PERUSED THE RECORDS. WE FIND THAT THE VALUE OF THE PROPERTY I N THIS CASE AS REFLECTED IN THE REGISTERED SALE DEED WAS RS. 55,00 ,000/-. REFERENCE U/S. 142A WAS MADE TO THE DVO BY THE ASSESSING OFFI CER. DVO DETERMINED THE VALUE OF THE PROPERTY AT RS. 70,36,7 00/- AS AGAINST RS. 55,00,000/- SHOWN BY THE ASSESSEE. HENCE, THER E WAS DIFFERENCE OF RS. 15,36,000/-. THIS WAS ADDED TO THE INCOME OF THE ASSESSEE. HOWEVER, LD. COMMISSIONER OF INCOME TAX (A) DELETED THE ADDITION AS THERE WAS NO EVIDENCE OF ADVERSE MATERI AL REGARDING PAYMENT OF UNDER HAND CONSIDERATION. SIMILARLY, NO OTHER INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH. IN OUR CONSIDERED OPINION, LD. COMMISSIONER OF INCOME TAX (A) IS CORRECT IN THIS REGARD. ADDITION IN THIS CASE HAS BEEN M ADE PURSUANT TO SEARCH ON THE BASIS OF VALUATION REPORT OF THE DVO. IT HAS BEEN SETTLED THAT IN CASE OF SEARCH IN THE ABSENCE OF AN Y INCRIMINATING MATERIAL FOUND DURING SEARCH, NO ADDITION CAN BE MA DE ON THE BASIS OF REPORT OF THE DVO. IN THIS REGARD, THE CASE LAWS REFERRED BY THE ASSESSEE ARE GERMANE AND SUPPORT THE CASE OF THE AS SESSEE. WE MAY FURTHER REFER TO THE FOLLOWING CASE LAWS:- A) C.I.T. VS. ABHINAV KUMAR MITTAL [2013] 351 ITR 2 0 (DHC) HELD, DISMISSING THE APPEAL, THAT THERE WAS NO MATE RIAL FOUND IN THE SEARCH AND SEIZURE OPERATIONS, WHICH WOULD JUSTI FY THE ASSESSING OFFICERS ACTION IN REFERRING THE MATTER OF THE DIS TRICT VALUATION OFFICER FOR HIS OPINION ON VALUATION OF THE PROPERT IES. THEREFORE, ITA NOS.5473 TO 5477/DEL/2010 13 THE VALUATION ARRIVED AT BY THE DISTRICT VALUATION OFFICER WOULD BE OF NO CONSEQUENCE. IN ANY EVENT, THE TRIBUNAL HAD A LSO, ON FACTS, HELD THAT THE DISTRICT VALUATION OFFICERS VALUATIO N WAS BASED ON INCOMPARABLE SALES, WHICH IS NOT PERMISSIBLE IN LAW . B) C.I.T. VS. MAHESH KUMAR (2011) 196 TAXMAN 415 (D HC) WHERE NO EVIDENCE COULD BE GATHERED THAT ASSESSEE HAD INVESTED MORE THAN VALUE DECLARED IN REGISTERED SALE DEED OF PLOTS PURCHASE AND, COMPARABLE INSTANCES TAKEN BY THE VALUATION OF FICER WERE SITUATED FOR WAY, ADDITION MADE UNDER SECTION 69 O N ACCOUNT OF UNEXPLAINED INVESTMENT WITH RESPECT OF PURCHASE OF SAID PLOTS WAS NOT JUSTIFIED. 51. FROM THE ABOVE, IT IS EVIDENT THAT IN THE ABSEN CE OF ANY EVIDENCE THAT THE ASSESSEE HAS INVESTED MORE THAN V ALUE DECLARED IN THE REGISTERED SALE DEED OF PROPERTY PURCHASED, TH E ADDITION IN THIS REGARD ON THE BASIS OF VALUATION REPORT BY THE DVO IS NOT SUSTAINABLE. 23. CONSISTENT WITH THE VIEW TAKEN THEREIN, WE DELE TE THE ADDITION AS CONFIRMED BY THE LD.CIT(A). 24. GROUND NO.4 IS GENERAL IN NATURE AND NEEDS NO A DJUDICATION. 25. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED IN PART. ITA NO.5475/DEL/2010 (AY : 2005-06) 26. GROUNDS OF APPEAL READS AS UNDER:- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , CIT(A) WAS NOT JUSTIFIED IN MAKING AN EXPARTE ORDER WITHOUT PROPER SERVICE OF NOTICE AND PROPER OPPORTUNITY FOR HEARING OF APPEAL. ITA NOS.5473 TO 5477/DEL/2010 14 (II) THAT EXPARTE ORDER IS ON ILLEGAL AND ARBITRAR Y BASIS AND APPEAL HAS BEEN DISPOSED OFF ON MECHANICAL BASIS WITHOUT PROPE R ADJUDICATION OF VARIOUS GROUNDS ON MERITS. 2(I). THAT ASSESSMENT BEING U/S. 153A IN THE CONTE XT OF SEARCH U/S. 132(1), THE SAME HAS TO BE ON THE BASIS OF ANY MATE RIAL OR EVIDENCE FOUND AS A RESULT OF SEARCH IN RESPECT OF ANY UNDIS CLOSED INCOME. (II). THAT VARIOUS ADDITIONS IN THE ASSESSMENT U/S . 153(A) ARE WITHOUT JURISDICTION AS SAME ARE NOT ON THE BASIS OF ANY EV IDENCE OR INCRIMINATING MATERIAL FOUND DURING THE COURSE OF S EARCH AND IN TOTAL DISREGARD TO THE FACT THAT ALL THE PARTICULARS OF I NCOME ARE SUPPORTED FROM REGULAR RECORDS. 3(I) THE CIT(A) ERRED IN ESTIMATING BUSINESS INCOME AT 10% AS AGAINST DECLARED INCOME OF 5% EVEN THOUGH THE RETUR N INCOME IS SUPPORTED FROM THE BOOKS OF ACCOUNTS AND AUDITED RE CORDS AND NO MISTAKE OR IRREGULARITY HAS BEEN FOUND IN THE SAME. (II) THAT IN THE ABSENCE OF ANY EVIDENCE OR INCRI MINATING MATERIAL FOUND AS A RESULT OF SEARCH IN RESPECT OF TRADING R ESULT SUPPORTED FROM AUDITED BOOKS OF ACCOUNTS, IT IS NOT OPEN TO CONSID ER ANY ADDITION IN AN ILLEGAL AND ARBITRARY MANNER. (III) THAT THE ESTIMATION OF INCOME AT 10% IS ON P RESUMPTION AND SURMISES AND THERE IS NO VALID BASIS FOR ESTIMATION OF SAME PARTICULARLY WHEN THERE IS NO CASE OF APPLICATION OF PROVISIONS OF SEC. 145 OF THE INCOME TAX ACT, 1961. 4. THAT THERE IS NO LEGAL OR FACTUAL BASIS IN ADDIT ION OF RS.45,50,000 IN RESPECT OF ALLEGED INVESTMENT IN PURCHASE OF SHA RES OF M/S KAVERI INFRASTRUCTURE PVT. LTD. 5. THAT THERE IS NO LEGAL OR FACTUAL BASIS IN ADDIT ION OF RS.25,49,900/- IN RESPECT OF SHARE INVESTMENT. 6. THAT THE ORDERS OF THE LOWER AUTHORITIES ARE NOT JUSTIFIED ON FACTS AND SAME ARE BAD IN LAW. ITA NOS.5473 TO 5477/DEL/2010 15 27. GROUND NO.1 IS DISMISSED AS NOT PRESSED. 28. GROUND NO.2 IS TO BE HELD IN FAVOUR OF THE ASSE SSEE IN VIEW OF THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CAS E OF CIT, CENTRAL-III VS. KABUL CHAWLA IN ITA NO.707/2014 VIDE JUDGMENT D ATED 20 TH APRIL, 2015, THE RELEVANT PART OF WHICH I.E., PARAS 37 AND 38 HAVE BEEN REPRODUCED ABOVE WHILE DEALING WITH GROUND NO.2 FOR AY 2002-03. GROUND NO.2 IS, THEREFORE, ALLOWED. 29. GROUND NO.3 IS AGAINST THE ESTIMATION OF BUSINE SS INCOME @ 10%. THIS ISSUE IS ADMITTEDLY COVERED BY THE DECISION OF THE BENCH OF THE ITAT IN ITA NO.3105, 3106 AND 3107/DEL/2011 FOR AYS 2002-03, 2003-04 & 2006-07 IN THE CASE OF ACIT VS. MS ASHA K ATARIA VIDE ITS ORDER DATED 20.5.2013, THE RELEVANT PORTION OF WHIC H VIZ., PARAS 10 AND 11 HAVE BEEN REPRODUCED ABOVE WHILE DEALING WITH GR OUND NO.3 FOR AY 2002-03. CONSISTENT WITH THE VIEW TAKEN THEREIN, TH IS GROUND IS ALLOWED. 30. GROUND NO.4 IS AGAINST AN ADDITION MADE IN RESP ECT OF ALLEGED INVESTMENT IN PURCHASE OF SHARES OF M/S KAVERI INFR ASTRUCTURE PVT. LTD. ITA NOS.5473 TO 5477/DEL/2010 16 THIS ADDITION HAS TO BE DELETED FOR THE REASON THAT IT IS NOT BASED ON ANY MATERIAL FOUND OR SEIZED DURING THE COURSE OF SEARC H. IN ADDITION, THE ASSESSEE DEMONSTRATES THAT THE ADDITION IS FACTUALL Y INCORRECT. FOR THESE REASONS, WE DELETE THE ADDITION MADE 31. GROUND NO.5 IS TO BE DELETED FOR THE REASON THA T THIS IS NOT BASED ON ANY MATERIAL FOUND OR SEIZED DURING THE COURSE OF S EARCH AND ALSO FOR THE REASON THAT FACTUALLY THE ADDITION IS INCORRECT AS DEMONSTRATED BY THE ASSESSEE. THE LD. DR COULD NOT CONTROVERT THESE SU BMISSIONS. THE ASSESSEE HAS FURNISHED A CERTIFICATE FROM M/S WATER FLOW INFRASTRUCTURE PVT. LTD. (FORMERLY KNOWN AS KAVERI INFRASTRUCTURE PVT. LTD.) DATED 22 ND OCTOBER, 2012 CERTIFYING THAT THEY HAVE MADE CERTAI N PAYMENTS ON BEHALF OF MR. VIJAY KUMAR KATARIA DURING THE FINANCIAL YEA R 2005-06 AMOUNTING TO RS.25,20,588/- (APB-7 FOR FY 2006-07). A COPY OF THE ACCOUNT OF MR. VIJAY KUMAR KATARIA IN THE BOOKS OF KAVERI INFRASTRUCTURE PVT. LTD., FOR THE FINANCIAL YEAR 20 05-06 WAS ALSO FURNISHED. ALL THESE ARE DISCLOSED TRANSACTIONS AN D THEY APPEAR IN THE BANK ACCOUNT OF THE ASSESSEE AND ARE RECEIVED IN TH E BOOKS OF ACCOUNT. ITA NOS.5473 TO 5477/DEL/2010 17 THE FINDINGS OF THE AO AT PAGE 3 ARE FACTUALLY INCO RRECT. WHEN WATERFLOW INFRASTRUCTURE PVT. LTD., FORMERLY KNOWN AS KAVERI INFRASTRUCTURE PVT. LTD., HAS CERTIFIED THAT IT HAS MADE THE PAYMENTS ON BEHALF OF MR. VIJAY KUMAR KATARIA, THE QUESTION OF THE ASSESSEE NOT EXPLAINING THE SOURCES OF FUNDS, DOES NOT ARISE. AN YHOW, IN VIEW OF THE PROPOSITION LAID DOWN IN THE CASE OF KABUL CHAWLA, BOTH THESE ADDITIONS DISPUTED IN GROUND NOS.4 AND 5 ARE TO BE DELETED. G ROUND NOS.4 AND 5 ARE, THEREFORE, ALLOWED. 32. GROUND NO.6 IS GENERAL IN NATURE AND DISMISSED AS SUCH. 33. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED IN PART. ITA NO.5476/DEL/2010 (AY: 2006-07 34. GROUNDS OF APPEAL READ AS UNDER:- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , CIT(A) WAS NOT JUSTIFIED IN MAKING AN EXPARTE ORDER WITHOUT PROPER SERVICE OF NOTICE AND PROPER OPPORTUNITY FOR HEARING OF APPEAL. (II) THAT EXPARTE ORDER IS ON ILLEGAL AND ARBITRAR Y BASIS AND APPEAL HAS BEEN DISPOSED OFF ON MECHANICAL BASIS WITHOUT PROPE R ADJUDICATION OF VARIOUS GROUNDS ON MERITS. 2(I). THAT ASSESSMENT BEING U/S. 153A IN THE CONTE XT OF SEARCH U/S. 132(1), THE SAME HAS TO BE ON THE BASIS OF ANY MATE RIAL OR EVIDENCE FOUND AS A RESULT OF SEARCH IN RESPECT OF ANY UNDIS CLOSED INCOME. ITA NOS.5473 TO 5477/DEL/2010 18 (II). THAT VARIOUS ADDITIONS IN THE ASSESSMENT U/S . 153(A) ARE WITHOUT JURISDICTION AS SAME ARE NOT ON THE BASIS OF ANY EV IDENCE OR INCRIMINATING MATERIAL FOUND DURING THE COURSE OF S EARCH AND IN TOTAL DISREGARD TO THE FACT THAT ALL THE PARTICULARS OF I NCOME ARE SUPPORTED FROM REGULAR RECORDS. 3(I) THE CIT(A) ERRED IN ESTIMATING BUSINESS INCOME AT 10% AS AGAINST DECLARED INCOME OF 5% EVEN THOUGH THE RETUR N INCOME IS SUPPORTED FROM THE BOOKS OF ACCOUNTS AND AUDITED RE CORDS AND NO MISTAKE OR IRREGULARITY HAS BEEN FOUND IN THE SAME. (II) THAT IN THE ABSENCE OF ANY EVIDENCE OR INCRI MINATING MATERIAL FOUND AS A RESULT OF SEARCH IN RESPECT OF TRADING R ESULT SUPPORTED FROM AUDITED BOOKS OF ACCOUNTS, IT IS NOT OPEN TO CONSID ER ANY ADDITION IN AN ILLEGAL AND ARBITRARY MANNER. (III) THAT THE ESTIMATION OF INCOME AT 10% IS ON P RESUMPTION AND SURMISES AND THERE IS NO VALID BASIS FOR ESTIMATION OF SAME PARTICULARLY WHEN THERE IS NO CASE OF APPLICATION OF PROVISIONS OF SEC. 145 OF THE INCOME TAX ACT, 1961. 4. THAT CIT(A) HAS ERRED IN CONFIRMING ADDITION OF RS.25,20,588/-IN RESPECT OF UNSECURED LOAN RECEIVED FROM M/S KAVERI INFRASTRUCTURE PVT. LTD. THAT THE AMOUNT WAS RECEIVED THROUGH PAYEE CHEQUE A ND OBSERVATION OF ASSESSING OFFICER IS FACTUALLY INCORRECT AND BAS ED ON PRESUMPTION AND SURMISES AND WITHOUT PROPER APPRECIATION OF FAC TS. 5. THAT CIT(A) HAS ERRED IN CONFIRMING ADDITION OF RS.5 LACS IN RESPECT OF INVESTMENT IN PNB PRINCIPAL JUNIOR CAP F UND. 6. THAT THE CIT(A) HAS ERRED IN CONFIRMING ADDITION OF RS.3 CRORE (US $ 659000) IN RESPECT OF ALLEGED INVESTMENT IN I MMOVABLE PROPERTY AT USA. ITA NOS.5473 TO 5477/DEL/2010 19 7. THAT CIT(A) HAS ALSO ERRED IN CONFIRMING ADDITIO N OF RS.1,13,800/- (US $ 1000+US$ 1500) IN RESPECT OF OP ENING OF BANK ACCOUNT AND REIMBURSEMENT OF EXPENSES. 6. THAT THE ORDERS OF THE LOWER AUTHORITIES ARE NOT JUSTIFIED ON FACTS AND SAME ARE BAD IN LAW. 35. GROUND NO.1 IS DISMISSED AS NOT PRESSED . 36. GROUND NO.2 IS TO BE HELD IN FAVOUR OF THE ASSE SSEE IN VIEW OF THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CAS E OF CIT, CENTRAL-III VS. KABUL CHAWLA IN ITA NO.707/2014 VIDE JUDGMENT D ATED 20 TH APRIL, 2015, THE RELEVANT PART OF WHICH I.E., PARAS 37 AND 38 HAVE BEEN REPRODUCED ABOVE WHILE DEALING WITH GROUND NO.2 FOR AY 2002-03. GROUND NO.2 IS, THEREFORE, ALLOWED. 37. GROUND NO.3 IS AGAINST THE ESTIMATION OF BUSINE SS INCOME @ 10%. THIS ISSUE IS ADMITTEDLY COVERED BY THE DECISION OF THE BENCH OF THE ITAT IN ITA NO.3105, 3106 AND 3107/DEL/2011 FOR AYS 2002-03, 2003-04 & 2006-07 IN THE CASE OF ACIT VS. MS ASHA K ATARIA VIDE ITS ORDER DATED 20.5.2013, THE RELEVANT PORTION OF WHIC H VIZ., PARAS 10 AND ITA NOS.5473 TO 5477/DEL/2010 20 11 HAVE BEEN REPRODUCED ABOVE WHILE DEALING WITH GR OUND NO.3 FOR AY 2002-03. CONSISTENT WITH THE VIEW TAKEN THEREIN, TH IS GROUND IS ALLOWED. 38. GROUND NO.4 IS AGAINST AN ADDITION MADE IN RESP ECT OF ALLEGED INVESTMENT IN PURCHASE OF SHARES OF M/S KAVERI INFR ASTRUCTURE PVT. LTD. THIS ADDITION HAS TO BE DELETED FOR THE REASON THAT IT IS NOT BASED ON ANY MATERIAL FOUND OR SEIZED DURING THE COURSE OF SEARC H. IN ADDITION, THE ASSESSEE DEMONSTRATES THAT THE ADDITION IS FACTUALL Y INCORRECT. FOR THESE REASONS, WE DELETE THE ADDITION MADE 39. GROUND NO.5 IS AGAINST AN ADDITION MADE IN RESP ECT OF ALLEGED INVESTMENT IN PNB PRINCIPAL JUNIOR CAP FUND. THIS ADDITION HAS TO BE DELETED FOR THE REASON THAT IT IS NOT BASED ON ANY MATERIAL FOUND OR SEIZED DURING THE COURSE OF SEARCH. IN ADDITION, THE ASSE SSEE DEMONSTRATES THAT THE ADDITION IS FACTUALLY INCORRECT. FOR THESE REAS ONS, WE DELETE THE ADDITION MADE 40. GROUND NOS.6 AND 7. THE ASSESSEE PLEADS THAT T HESE HAVE TO BE RESTORED TO THE FILE OF THE AO ON THE GROUND OF NAT URAL JUSTICE, AS SUFFICIENT OPPORTUNITY HAS NOT BEEN GIVEN TO THE AS SESSEE. HE SUBMITS ITA NOS.5473 TO 5477/DEL/2010 21 THAT THE AO SOUGHT EXPLANATION FROM THE ASSESSEE ON 18.12.2009 AND WITHIN A PERIOD OF NINE DAYS PASSED THE ASSESSMENT ORDER ON 27.12.2009. THE LD. DR STRONGLY OPPOSED THE CONTENTION AND SUBM ITTED THAT SUFFICIENT OPPORTUNITY HAS BEEN GIVEN TO THE ASSESSEE. SHE FU RTHER SUBMITTED THAT THE ASSESSEE HAD OPPORTUNITY BEFORE THE FIRST APPEL LATE AUTHORITY WHICH HE HAD NOT AVAILED. IN REPLY, THE LD. COUNSEL FOR THE ASSESSEE POINTED OUT THAT THE LD.CIT(A)-I, NEW DELHI HAS PASSED EX PARTE ORDER. 41. AFTER HEARING THE RIVAL CONTENTIONS, WE ARE OF THE CONSIDERED OPINION THAT THESE ISSUES SHOULD BE SET ASIDE TO TH E FILE OF THE AO FOR FRESH ADJUDICATION IN ACCORDANCE WITH THE LAW ON GR OUNDS OF NATURAL JUSTICE. THE AO HAS IN HIS OFFICE LETTER DATED 18. 12.2009, GIVEN A SHOW CAUSE NOTICE TO THE ASSESSEE. THE ASSESSEE DENIED MAKING AN INVESTMENT IN PURCHASE OF PROPERTY IN USA. THE ASSESSEE STATE D THAT THE RELATIVE OF THE ASSESSEE SHRI NAZIR SINGH DHALIWAL HAD MADE THE PAYMENT AND THE BALANCE WAS MADE BY THE BANK OF USA AND THAT THE PR OPERTY WAS SOLD THEREAFTER AND REPAYMENT WAS MADE TO SHRI NAZIR SIN GH DHALIWAL AND BANK. THE FACTUAL SUBMISSIONS OF THE ASSESSEE NEE DS VERIFICATION. TIME ITA NOS.5473 TO 5477/DEL/2010 22 SHOULD HAVE BEEN GIVEN TO THE ASSESSEE TO FURNISH D OCUMENTS IN THIS REGARD. THE AO CAN ALSO MAKE DIRECT INQUIRIES FROM BANK OF USA AND FROM SHRI NAZIR SINGH DHALIWAL. THE LD.CIT(A) HAS PASSED AN EX PARTE ORDER. UNDER THESE CIRCUMSTANCES, GROUND NOS.6 AND 7 ARE RESTORED TO THE FILE OF AO FOR FRESH ADJUDICATION IN ACCORDANCE WITH THE LAW. 42. GROUND NO.8 IS GENERAL IN NATURE. 43. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED IN PART. ITA NO.5477/DEL/2010 (AY : 2007-08) 44. GROUNDS OF APPEAL FILED BY THE ASSESSEE READ AS UNDER:- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , CIT(A) WAS NOT JUSTIFIED IN MAKING AN EXPARTE ORDER WITHOUT PROPER SERVICE OF NOTICE AND PROPER OPPORTUNITY FOR HEARING OF APPEAL. (II) THAT EXPARTE ORDER IS ON ILLEGAL AND ARBITRAR Y BASIS AND APPEAL HAS BEEN DISPOSED OFF ON MECHANICAL BASIS WITHOUT PROPE R ADJUDICATION OF VARIOUS GROUNDS ON MERITS. 2(I). THAT ASSESSMENT BEING U/S. 153A IN THE CONTE XT OF SEARCH U/S. 132(1), THE SAME HAS TO BE ON THE BASIS OF ANY MATE RIAL OR EVIDENCE FOUND AS A RESULT OF SEARCH IN RESPECT OF ANY UNDIS CLOSED INCOME. (II). THAT VARIOUS ADDITIONS IN THE ASSESSMENT U/S . 153(A) ARE WITHOUT JURISDICTION AS SAME ARE NOT ON THE BASIS OF ANY EV IDENCE OR INCRIMINATING MATERIAL FOUND DURING THE COURSE OF S EARCH AND IN TOTAL ITA NOS.5473 TO 5477/DEL/2010 23 DISREGARD TO THE FACT THAT ALL THE PARTICULARS OF I NCOME ARE SUPPORTED FROM REGULAR RECORDS. 3(I) THE CIT(A) ERRED IN ESTIMATING BUSINESS INCOME AT 10% AS AGAINST DECLARED INCOME OF 5% EVEN THOUGH THE RETUR N INCOME IS SUPPORTED FROM THE BOOKS OF ACCOUNTS AND AUDITED RE CORDS AND NO MISTAKE OR IRREGULARITY HAS BEEN FOUND IN THE SAME. (II) THAT IN THE ABSENCE OF ANY EVIDENCE OR INCRI MINATING MATERIAL FOUND AS A RESULT OF SEARCH IN RESPECT OF TRADING R ESULT SUPPORTED FROM AUDITED BOOKS OF ACCOUNTS, IT IS NOT OPEN TO CONSID ER ANY ADDITION IN AN ILLEGAL AND ARBITRARY MANNER. (III) THAT THE ESTIMATION OF INCOME AT 10% IS ON P RESUMPTION AND SURMISES AND THERE IS NO VALID BASIS FOR ESTIMATION OF SAME PARTICULARLY WHEN THERE IS NO CASE OF APPLICATION OF PROVISIONS OF SEC. 145 OF THE INCOME TAX ACT, 1961. 4. THAT THERE IS NO LEGAL OR FACTUAL BASIS IN ADDIT ION OF RS.25,00,000 IN RESPECT OF ALLEGED INVESTMENT IN PURCHASE OF SHA RES OF M/S KAVERI INFRASTRUCTURE PVT. LTD. 5. THAT CIT(A) HAS ERRED IN CONFIRMING ADDITION OF RS.5 LACS IN RESPECT OF INVESTMENT IN MAX NEW YORK EVEN THOUGH T HE INVESTMENT IS SUPPORTED FROM BANK ACCOUNT AND OTHER DETAILS AND T HERE IS NO CASE OF ANY UNDISCLOSED INCOME OR INVESTMENT. 6. THAT THE CIT(A) HAS ERRED IN CONFIRMING ADDITION OF RS.9,00,100/- IN THE INVESTMENT OF SHARES EVEN THOU GH THE INVESTMENT IS SUPPORTED FROM BANK ACCOUNT AND OTHER DETAILS AN D THERE IS NO CASE OF ANY UNDISCLOSED INCOME OR INVESTMENT. 7. THAT THE ORDERS OF THE LOWER AUTHORITIES ARE NOT JUSTIFIED ON FACTS AND SAME ARE BAD IN LAW. 45. GROUND NO.1 IS DISMISSED AS NOT PRESSED . ITA NOS.5473 TO 5477/DEL/2010 24 46. GROUND NO.2 IS TO BE HELD IN FAVOUR OF THE ASSE SSEE IN VIEW OF THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CAS E OF CIT, CENTRAL-III VS. KABUL CHAWLA IN ITA NO.707/2014 VIDE JUDGMENT D ATED 20 TH APRIL, 2015, THE RELEVANT PART OF WHICH I.E., PARAS 37 AND 38 HAVE BEEN REPRODUCED ABOVE WHILE DEALING WITH GROUND NO.2 FOR AY 2002-03. GROUND NO.2 IS, THEREFORE, ALLOWED. 47. GROUND NO.3 IS AGAINST THE ESTIMATION OF BUSINE SS INCOME @ 10%. THIS ISSUE IS ADMITTEDLY COVERED BY THE DECISION OF THE BENCH OF THE ITAT IN ITA NO.3105, 3106 AND 3107/DEL/2011 FOR AYS 2002-03, 2003-04 & 2006-07 IN THE CASE OF ACIT VS. MS ASHA K ATARIA VIDE ITS ORDER DATED 20.5.2013, THE RELEVANT PORTION OF WHIC H VIZ., PARAS 10 AND 11 HAVE BEEN REPRODUCED ABOVE WHILE DEALING WITH GR OUND NO.3 FOR AY 2002-03. CONSISTENT WITH THE VIEW TAKEN THEREIN, TH IS GROUND IS ALLOWED. 48. GROUND NO.4 IS AGAINST AN ADDITION MADE IN RESP ECT OF ALLEGED INVESTMENT IN PURCHASE OF SHARES OF M/S KAVERI INFR ASTRUCTURE PVT. LTD. THIS ADDITION HAS TO BE DELETED FOR THE REASON THAT IT IS NOT BASED ON ANY MATERIAL FOUND OR SEIZED DURING THE COURSE OF SEARC H. IN ADDITION, THE ITA NOS.5473 TO 5477/DEL/2010 25 ASSESSEE DEMONSTRATES THAT THE ADDITION IS FACTUALL Y INCORRECT. FOR THESE REASONS, WE DELETE THE ADDITION MADE 49. GROUND NO.5 IS AN ADDITION OF RS.5 LAC IN RESPE CT OF INVESTMENT IN MAX NEW YORK. THIS ADDITION IS NOT BASED ON ANY SEI ZED MATERIAL. THE ASSESSEE HAS DISCLOSED THIS AMOUNT IN HIS BALANCE S HEET. PAYMENT WAS MADE FROM THE BANK ACCOUNT OF THE ASSESSEE, WHICH I S VERY MUCH IN THE KNOWLEDGE OF THE AO. UNDER THESE CIRCUMSTANCES, TH IS ADDITION IS DIRECTED TO BE DELETED. 50. GROUND NO.6 IS AGAINST THE ADDITION OF RS.9,00, 100/- IN RESPECT OF INVESTMENT IN SHARES. THE FIGURE TAKEN BY THE AO I S A MISTAKE AS THE TOTAL AMOUNT IS RS.9,00,000/- AND NOT RS.9,00,100/- . THIS INCLUDES AN OPENING BALANCE OF 81,00,100/- AND INVESTMENTS DURI NG THE YEAR OF RS.9 LAC. THESE INVESTMENTS WERE MADE THROUGH BANKING C HANNEL AND THE BANK ACCOUNT WAS AN OFFICIAL BANK ACCOUNT IN THE KN OWLEDGE OF THE DEPARTMENT. THE ADDITION IS NOT BASED ON ANY SEIZE D MATERIAL. ALL THE INVESTMENTS ARE DISCLOSED IN THE BALANCE SHEET OF T HE ASSESSEE. THIS ADDITION HAS TO BE DELETED BY APPLYING THE RATIO LA ID DOWN BY THE HONBLE ITA NOS.5473 TO 5477/DEL/2010 26 HIGH COURT IN THE CASE OF KABUL CHAWLA (SUPRA). THI S GROUND IS, THUS, ALLOWED. 51. GROUND NO.7 IS GENERAL IN NATURE. 52. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED IN PART. THE ORDER PRONOUNCED IN THE OPEN COURT ON 17.11.201 5. SD/- SD/- [SUDHANSHU SRIVASTAVA] [J. SUDHAKAR REDDY] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED, 17 TH NOVEMBER, 2015. DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.
