ACIT, New Delhi V. Shri Anil Khandelwal, New Delhi

ITA 5517/DEL/2012

• Counselvise Citation: 551720114 RSA 2012
• Duration Of Justice: 1 year(s) 8 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 12-05-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 01-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A MISRA
• Keywords: Unexplained cash credit; Search and seizure; Loose papers; Document seized; Principle of natural justice; Accommodation entries; Documents seized
• Section: 143(3); 153A; 132; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: A NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER AND SHRI T.S.KAPOOR, ACCOUNTANT MEMBER I.T.A .NOS.-5516 & 5517/DEL/2012 (ASSESSMENT YEARS-2006-07 & 20 07-08) ACIT, CENTRAL CIRCLE-09, ARA CENTRE, JHANDEWALAN EXTN., NEW DELHI (APPELLANT) VS ANIL KHANDELWAL, G-40, SAKET, NEW DELHI. PAN-AAKPK8113G (RESPONDENT) APPELLANT BY: SMT. A.MISRA, CIT DR RESPONDENT BY: SH. VED JAIN, CA ORDER PER DIVA SINGH, JM THESE ARE TWO APPEALS FILED BY THE REVENUE AGAINST THE ORDER DATED 28.03.2013 OF CIT(A)-XXVIII, NEW DELHI PERTAINING T O 2006-07 & 2007-08 ASSESSMENT YEARS. BOTH THESE APPEALS ARE BEING DEC IDED BY A COMMON ORDER AS IT WAS A COMMON STAND OF THE PARTIES BEFORE THE BENCH THAT IDENTICAL GROUNDS HAVE BEEN RAISED BY THE REVENUE IN BOTH THE YEARS AND THE FACTS, CIRCUMSTANCES AND THE ARGUMENTS ARE IDENTICAL EXCEPT FOR THE DIFFERE NCE IN THE AMOUNTS. ACCORDINGLY THE JOINT STAND OF THE PARTIES HAS BEEN THAT THE ARGUMENTS ADVANCED BY BOTH THE SIDES IN ITA NO-5516/DEL/2012 FOR 2006- 07 ASSESSMENT YEAR WOULD COVER BOTH THE YEARS. 2. THE GROUNDS RAISED IN ITA NO-5516/DEL/2012 ARE R EPRODUCED HEREUNDER FOR READY-REFERENCE:- 1. THAT THE COMMISSIONER OF INCOME TAX (APPEALS) E RRED IN LAW AND ON FACTS OF THE CASE IN DELETING THE ADDITION OF RS.27 ,00,000/- (IN ITA NO- 5517/DEL/2012 THE AMOUNT IS RS.1,14,80,000/-) MADE ON ACCOUNT OF PEAK AMOUNT OF UNEXPLAINED CASH. 2 I.T.A .NO.-5516 & 5517/DEL/2012 2(A) THE ORDER OF THE CIT(A) IS ERRONEOUS AND NOT T ENABLE IN LAW AND ON FACTS. (B) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AME ND ANY/ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF TH E HEARING OF THE APPEAL. 2.1. THE RELEVANT FACTS OF THE CASE AS BORNE OUT FR OM THE ASSESSMENT ORDER ARE THAT THE SEARCH & SEIZURE ACTION WAS CONDUCTED ON 1 2.12.2006 AT THE BUSINESS AND RESIDENTIAL PREMISES OF SHRI. S.K.GUPTA ALONGWITH V ARIOUS CONCERNS IN WHICH HE AND HIS FAMILY MEMBERS WERE INTERESTED. SIMILARLY ACTION U/S 132 OF I.T. ACT, 1961 IS STATED TO HAVE BEEN CONDUCTED IN THE CASE O F VARIOUS COMPANIES OWNED OR CONTROLLED BY HIM AND ALSO IN THE CASE OF DIFFERENT INDIVIDUALS CONNECTED WITH THE SAID COMPANIES. THE PRESENT ASSESSEE AS PER THE AS SESSMENT ORDER IS ONE OF THESE COMPANIES COVERED UNDER SEARCH & SEIZURE ACTION. 2.2. CONSEQUENT TO THE SEARCH ACTION, NOTICE U/S 15 3A OF THE INCOME TAX ACT, 1961 WAS ISSUED TO THE ASSESSEE ON 24.10.2008. A P ERUSAL OF THE ASSESSMENT ORDER SHOWS THAT THE AO RECORDS THAT THE ASSESSEE IS AN INDIVIDUAL WHO HAD FILED RETURN OF INCOME IN RESPONSE TO NOTICE U/S 153A OF THE INCOME TAX ACT, 1961 ON 05.11.2008 AT RS.1,54,343/-. HE REQUIRED THE ASSESS EE IN THE COURSE OF THE ASSESSMENT PROCEEDINGS U/S 143(3) R.W.S 153(A) TO GIVE INFORMATION AS PER QUESTION NO.10.2 & 10.3 OF THE QUESTIONNAIRE DATED 07.11.2008 IN REGARD TO THE TRANSACTIONS OF THE ASSESSEE AND THE FAMILY COMPANI ES/CONCERNS RELATABLE TO THE DOCUMENTS SEIZED DURING THE COURSE OF SEARCH IN S.K .GUPTA GROUP OF CASES. HE SPECIFICALLY CONFRONTED THE ASSESSEE WITH THE EXT RACT OF PAGE 25 OF ANNEXURE A-1 OF PARTY A-5 SEIZED DURING THE COURSE OF SEARCH AND SEIZURE OPERATION IN S.K.GUPTA GROUP OF CASES AT H-108, 2 ND FLOOR, NEW ASIATIC BUILDING, CONNAUGHT PLACE, NEW DELHI. THE REPLY OF THE ASSESSEE THERET O HOWEVER WAS NOT ACCEPTED BY THE AO WHICH RESULTED IN THE ADDITION OF RS. 27, 00,000/-. 2.3. SIMILARLY IN 2007-08 A.YEAR PURSUANT TO A SIMI LAR NOTICE U/S 153A RETURN DECLARING AN INCOME OF RS.1,82,556/- WAS FILED BY T HE ASSESSEE. THE AO AFTER 3 I.T.A .NO.-5516 & 5517/DEL/2012 ISSUANCE OF NOTICE ETC. CONFRONTED THE ASSESSEE WIT H QUESTION NO.10.1 REQUIRING HIM TO EXPLAIN THE ENTRIES IN THE SEIZED DOCUMENTS IN S.K.GUPTA GROUP OF CASES WHERE THE ASSESSEES NAME APPEARED. THE DOC UMENTS DESCRIBED AS PARTY PAGE -5 ANNEXURE A-33 IS EXTRACTED IN THE ASSESSMEN T ORDER. HEREIN ALSO THE REPLY OF THE ASSESSEE WAS NOT ACCEPTED BY THE AO WH O PROCEEDED TO MAKE THE ADDITION. 3. AGGRIEVED BY THIS THE ASSESSEE WENT IN APPEAL B EFORE THE CIT(A) IN BOTH THE YEARS. THE CIT(A) CONSIDERING THE SUBMISSIONS ADVANCED ON BEHALF OF THE ASSESSEE DELETED THE ADDITIONS MADE IN BOTH THE YEA RS. AGGRIEVED BY THIS, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL ON THE AFO RE-MENTIONED GROUND IN BOTH THE YEARS. 4. THE LD. CIT DR INVITING ATTENTION TO THE ASSESSM ENT ORDER REFERRING TO THE OBSERVATION MADE THEREIN SUBMITTED THAT SH.S.K.GUPT A HAS ADMITTED THAT HE WAS A ENTRY PROVIDER AS A RESULT OF WHICH THE AO VIDE PAR A 3.2 HAS PROCEEDED TO MAKE THE ADDITION. THE EXTRACT OF HAND LEDGER ACCOUNT OF SH. ANIL KHANDELWAL I.E THE ASSESSEE AVAILABLE AT PAGES 30-33 OF ANNEXURE A-31 OF PARTY A-5 WHICH WAS SEIZED DURING THE COURSE OF THE SEARCH AND SEIZURE OPERATION IN S.K.GUPTA GROUP OF CASES IT WAS SUBMITTED HAS BEEN EXTRACTED IN THE ASSESSMENT ORDER. IT WAS SUBMITTED THAT THE REPLY THERETO OF THE ASSESSEE HA S BEEN CONSIDERED BY THE ASSESSING OFFICER AND DESPITE THIS FACT THE ADDITIO N MADE HAS BEEN DELETED BY THE CIT(A), ACCEPTING THE ARGUMENTS ADVANCED ON BEHALF OF THE ASSESSEE AND CROSS- EXAMINATION REFERRED TO BY THE CIT(A). 4.1. REFERRING TO THE SAME IT WAS HER SUBMISSION TH AT THE QUESTIONS PUT FORTH WERE VERY VAGUE AND FULL FACTS HAVE NOT COME OUT I N THE ORDER AS SUCH IT WAS HER SUBMISSION THAT THE ISSUE SHOULD BE RESTORED TO THE AO AND THE IMPUGNED ORDER BE SET ASIDE. IN ORDER TO SUPPORT HER ASSERTION THAT ANSWERS TO VAGUE QUESTIONS HAVE BEEN CONSIDERED, ATTENTION WAS INVITED TO PAGE 16 O F THE IMPUGNED ORDER WHEREIN 4 I.T.A .NO.-5516 & 5517/DEL/2012 VAGUE RESPONSES TO VAGUE QUESTIONS OF SH. S.K.GUPTA HAVE BEEN RELIED UPON IN THE CROSS-EXAMINATION. SPECIFIC ATTENTION WAS INVI TED THE RESPONSE GIVEN TO QUESTION NO.-14 & 15. ACCORDINGLY ON THE BASIS OF THE SAME IT WAS HER SUBMISSION THAT INFACT THE ADDITION MADE BY THE AO DESERVES TO BE UPHELD AS THE REASONING TAKEN INTO CONSIDERATION FOR DELETING THE ADDITION ARE NOT RELEVANT. IT WAS ALSO HER SUBMISSION THAT SINCE THE REASONS FOR MAKING THE ADDITION AND DELETING THE ADDITION IN 2007-08 ARE IDENTICAL THE ARGUMENTS ADVANCED IN 2006-07 ASSESSMENT YEAR WOULD FULLY APPLY IN EQUAL FORCE TO 2007-08 A.YEAR ALSO AND NO SEPARATE ARGUMENTS ARE REQUIRED TO BE MADE. 5. THE LD. AR ON THE OTHER HAND HEAVILY RELIED UPON THE IMPUGNED ORDER. SUPPORTING THE SAME IT WAS HIS SUBMISSION THAT IN T HE FACTS OF THE PRESENT CASE THERE IS NO ALLEGATION THAT EITHER FUNDS HAVE BEEN MOVED FROM THE ASSESSEE TO SH.S.K.GUPTA GROUP OF COMPANIES WHO HAS ISSUED CHE QUES TO THE ASSESSEE NOR IS THERE ANY EVIDENCE THAT ANY CASH WAS PAID TO THE AS SESSEE BY SH.S.K.GUPTA. REFERRING TO THE CROSS-EXAMINATION OF SH.S.K.GUPTA IT WAS HIS SUBMISSION THAT THE CROSS-EXAMINATION AS THE IMPUGNED ORDER WOULD SHOW WAS IN THE PRESENCE OF THE AO AND TILL DATE THERE IS NO STATEMENT BY SH.S.K.GU PTA THAT HE HAS EVER RECEIVED ANY CASH OR PAID ANY CASH TO THE ASSESSEE. THE MER E ARGUMENT THAT HE IS AN ENTRY PROVIDER WITHOUT ANY EVIDENCE WAS ASSAILED. REFER RING TO THE SPECIFIC QUESTIONS 14 & 15 TO WHICH THE LD. CIT DR DREW ATTENTION IT WAS HIS SUBMISSION THAT INFACT THIS IS AN EXTRACT FROM THE STATEMENT OF SH. S.K.GUPTA WHICH WAS MADE AT THE TIME OF SEARCH RECORDED ON 13.12.2006 AND IS NO T A PART OF THE QUESTIONS PUT IN THE CROSS EXAMINATION. ACCORDINGLY IT WAS HIS PRAY ER THAT SINCE APART FROM MAKING GENERAL AND VAGUE SUBMISSION NOT BORNE OUT F ROM THE RECORD, THERE IS NO CONCRETE ARGUMENT ASSAILING THE IMPUGNED ORDER, TH E DEPARTMENTAL APPEALS IN THE ABSENCE OF ANY CONTRARY FACT OR EVIDENCE DESERVES T O BE DISMISSED. 5 I.T.A .NO.-5516 & 5517/DEL/2012 5.1. IT WAS FURTHER SUBMITTED BY HIM THAT ALTHOUGH THE ISSUE IS PURELY FACTUAL AND RELIEF IS WARRANTED ON FACTS ALONE HE WOULD STI LL IN ORDER TO SUPPORT THE IMPUGNED ORDER RELY UPON THE JUDGEMENT OF BOMBAY HI GH COURT IN THE CASE OF ACIT VS LATA MANGESHKAR 97 ITR 696. SPECIFIC ATTEN TION WAS INVITED TO PARA 6 THEREOF FOR THE PROPOSITION THAT THE COURT EVEN WHE RE THERE WAS A STATEMENT OF A MANAGING PARTNER THAT HE HAD MADE PAYMENTS TO THE S INGER IN BLACK EVEN IN SUCH A SITUATION, IT WAS HELD BY THE HONBLE HIGH C OURT THAT SUSPICION CANNOT TAKE THE PLACE OF PROOF. 5.2. RELIANCE WAS ALSO PLACED UPON THE DECISION OF THE DELHI BENCH IN THE CASE OF DCIT VS YASHPAL NARENDER KUMAR IN ITA NO-5340 T O 5342/DEL/2012 WHEREIN BY THEIR ORDER DATED 07.02.2013, IT WAS HE LD BY THE BENCH THAT ADDITION ON THE BASIS OF STATEMENT OF THE THIRD PARTY WITHOU T ANY CORROBORATIVE EVIDENCE IS NOT TENABLE. COPY OF THE SAID ORDER WAS ALSO FILED IN THE COURT. IT WAS ARGUED THAT THE DEPARTMENT HAVING USED THE ULTIMATE WEAPON NAMELY SEARCH AND HAVING FAILED TO FIND ANY EVIDENCE AGAINST THE ASSESSEE IN THE CIRCUMSTANCES, IT WAS CONTENDED THAT THE ARGUMENTS MADE WITHOUT ANY EVI DENCE HAVE NO RELEVANCE. A PERUSAL OF THE SAME SHOWS THAT IT WAS EMPHASIZED TH AT IT HAS BEEN HELD THEREIN THAT PRESUMPTION U/S 132(4A) IS ONLY AGAINST THE PE RSON IN WHOSE POSSESSION THE SEARCH MATERIAL IS FOUND AND NOT AGAINST ANY OTHER THIRD PERSON. CONSIDERING THE JUDICIAL PRECEDENT IT WAS HELD THAT THE PRESUMPTI ON IS REBUTTABLE AND NOT CONCLUSIVE AND IT CANNOT BE APPLIED TO THE THIRD PA RTY IN THE ABSENCE OF CORROBORATIVE EVIDENCE AS IT GOES WITHOUT SAYING TH AT THE PRESUMPTION AVAILABLE U/S 132(4A) CAN BE DRAWN ONLY AGAINST THE PERSON IN WHOSE CASE SEARCH IS AUTHORIZED AND FROM WHOM AND FROM WHOSE POSSESSION OR CONTROL BOOKS OF ACCOUNTS DAIRY OR DOCUMENTS ARE FOUND AND PRESUMPTI ON REGARDING CORRECTNESS OF THE CONTENTS OF THE BOOKS OF ACCOUNTS ETC CANNOT BE RAISED AGAINST THE THIRD PARTY. 6 I.T.A .NO.-5516 & 5517/DEL/2012 5.3. RELIANCE WAS ALSO PLACED UPON CIT VS VED PRAKA SH CHAUDHARY REPORTED IN 305 ITR 245 (DELHI). ATTENTION WAS INVITED TO PARA S 12 & 13 THEREOF SO AS TO CONTEND THAT IN THE FACTS OF THE PRESENT CASE ALSO NO CASE HAD BEEN MADE OUT TO SHOW THAT THERE WAS A TRANSFER OF MONEY BETWEEN THE ASSESSEE AND S.K.GUPTA GROUP OF COMPANIES. THE SAID JUDGEMENT OF THE DELH I HIGH COURT IT WAS SUBMITTED WAS CONFIRMED BY THE SUPREME COURT AS SL P FILED AGAINST THE SAID JUDGEMENT WAS DISMISSED NOT ONLY ON GROUNDS OF DELA Y BUT ALSO ON MERIT. COPY OF THE DISMISSAL DATED 09.01.2009 WAS FILED. ACCOR DINGLY ON THE BASIS OF THIS FACT IT WAS HIS SUBMISSION THAT THE IMPUGNED ORDER DESER VES TO BE UPHELD. 5.4. THE LD. CIT DR IN REPLY REITERATES THAT THE IS SUE IS FACTUAL AND FULL FACTS ARE NOT COMING OUT. REFERRING TO PAGE 15 OF THE IMPU GNED ORDER WHICH CONTAINS AN EXTRACT FROM THE STATEMENT OF SH.S.K.GUPTA. IT WAS HER REQUEST THAT THE ISSUE MAY BE RESTORED. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. BEFORE ADDRESSING THE ISSUES IT WOULD BE AP PROPRIATE TO REFER TO THE SPECIFIC OBSERVATIONS MADE IN THE ASSESSMENT ORDER WHICH LED TO THE ADDITION BEING MADE ON WHICH HEAVY RELIANCE HAS BEEN PLACED BY THE LD. CIT DR:- 3. TRANSACTIONS OF THE ASSESSEE AND HIS FAMILY COM PANIES/CONCERNS AS PER THE DOCUMENTS SEIZED DURING THE COURSE OF SEARC H IN S.K.GUPTA GROUP OF CASES:- IN THIS CONNECTION, THE ASSESSEE WAS ASKED TO GIVE INFORMATION AS PER QUESTION NO.10.2 & 10.3 OF THE QUESTIONNAIRE DATED 07.11.2008 AS UNDER :- 10.2. DURING THE COURSE OF SEARCH AND SEIZURE OPERA TION IN S.K.GUPTA GROUP OF CASES AT H-108, 2 ND FLOOR, NES ASIATIC BUILDING, CONNAUGHT PLACE, NEW DELHI, A HAND LEDGER HAS BEEN SEIZED AS PER ANN EXURE A-31, IN WHICH YOUR ACCOUNT IS REFLECTED AT PAGE 30 TO 33 OF THE S AID ANNEXURE. THE EXTRACT OF THE SAME IS REPRODUCED HEREUNDER FOR YOUR EXPLAN ATION AND GIVING NATURE, DETAILS AND SOURCE OF THE ENTRIES MENTIONED THEREIN . IT IS WORTH MENTIONING THAT NAME OF CERTAIN COMPANIES IN WHICH YOU, YOUR F AMILY MEMBERS AND YOUR RELATIVES ARE INTERESTED, ARE APPEARING IN THIS ACC OUNT. 7 I.T.A .NO.-5516 & 5517/DEL/2012 EXTRACT OF HAND LEDGER ACCOUNT OF SHRI ANIL KHANDEL WAL IN PAGE 30-33 OF ANNEXURE-A-31 OF PARTY, A-5, SEIZED DURING THE COUR SE OF SEARCH AND SEIZURE OF OPERATION IN S.K.GUPTA GROUP OF CASES AT H-108, 2 ND FLOOR, NEW ASIATIC BUILDING, CONNAUGHT PLACE, NEW DELHI. PAGE-30 DATE PARTICULARS DEBIT CREDIT BALANCE 28-7-05 CASH RECEIVED 100000 100000 28-7-05 NORTH-SNG 361473 PO (HDFC 500000 500000 29-7-05 CASH RECEIVED 70000 700000 30-7-05 HI-SNG (PO) 226953 450000 250000 30-7-05 HAMARA-SNG (PO) 257803 250000 0 30-7-05 CASH RECEIVED 190000 190000 1/8/2005 BT (SCB)-SNG- 200000 10000 1/8/2005 CASH RECEIVED 10000 10000 11/8/2005 CASH RECEIVED 1000000 1000000 12/8/2005 CASH RECEIVED 500000 1500000 13-8-05 SPG-SNG-002577UTI (PO) 600000 700000 13-8-05 SWEN SNG-153999 700000 0 13-8-05 CASH RECEIVED 484000 484000 13-8-05 SWEN 1+ 80285488 + 579231 180000 180000 13-8-05 SWEN 080252 180000 844000 13-8-05 SWEN-716417 96000 940000 PAGE-31 17-8-05 SWEN-SWG-160110 500000 440000 19-8-05 ERA-PBN-SNG (PO)-535102 250000 190000 19-8-05 SPG (HDFC)-SNG-160554 250000 60000 20-8-05 GODDE-SWEN-094622 96000 36000 20-8-05 V.K.GADDE SWEN 0495804 96000 132000 20-8-05 SWEN-773190 96000 228000 44XA.5 CHAS 71000 3/9/2005 CASH RECEIVED 250000 1/9/2005 CASH PAID 3860 8 I.T.A .NO.-5516 & 5517/DEL/2012 2/9/2005 T&G ABG BONDWELL (948929) 150000 1.5 LACS X2% 3000 3/9/2005 SWEN BOND 160361 150000 5/9/20005 BONDWELL SPG 100000 CASH PAID 140 2/9/2005 DD OF LINGYAS 500000 2/9/2005 LINGYAS 1038399 900000 2/9/2005 LINGYAS 038700 900000 2/9/2005 LINGYAS 387010 900000 2/9/2005 LINGYAS 038707 900000 2/9/2005 LINGYAS 038073 900000 PAGE-32 2/9/2005 LINGYAS 038704 900000 5/9/2005 CASH RECEIVED 100000 6/9/2005 BOND-SPG TR 300000 6/9/2005 CASH RECEIVED 100000 7/9/2005 CASH RECEIVED 650000 7/9/2005 CASH RECEIVED 650000 8/9/2005 CASH RECEIVED 685000 8/9/2005 CASH RECEIVED 515000 SWEN 21600 SWEN 21600 SWEN (21600X7) 151200 SWEN (21600X4) 86400 19-9-05 DD CHARGES OF 50 LAC 75000 19-9-05 CASH PAID 205800 19-9-05 SWEN-443167 21600 19-9-05 SWEN-623626 21600 19-9-05 SWEN-425371 21600 19-9-05 SWEN-464062 21600 9 I.T.A .NO.-5516 & 5517/DEL/2012 19-9-05 SWEN-396798 21600 20-9-5 CASH RECEIVED 400000 20-9-05 CASH PAID 108000 21-9-05 SWEN PERT 167292 400000 26-9-05 CASH RECEIVED 500000 26-9-05 HI BON FIN 545463 500000 28-9-05 CASH RECEIVED 1000000 30-9-05 SPG BOND FINAN 165711 500000 3/10/2005 SPG BOND FINAN 165712 500000 3/10/2005 DMC BOND 709349 500000 4/10/2005 CASH PAID 500000 5/10/2005 BOND FINAN NORTH 43678 450000 7/10/2005 SWEN BOND 171180 600000 10/10/2005 BOND SWEN 600000 10.3. DURING THE COURSE OF SEARCH AND SEIZURE OPERA TION IN S.K.GUPTA GROUP OF CASES AT H-108, 2 ND FLOOR, NEW ASIATIC BUILDING, CONNAUGHT PLACE, NEW DELHI, A DOCUMENT HAS BEEN SEIZED AS PER PAGE 2 5 OF ANNEXURE A-1, IN WHICH INVESTMENT ENTRIES OF COMPANIES CONTROLLED BY SHRI. S.K.GUPTA IS MENTIONED. THE EXTRACT OF THE SAME IS REPRODUCED H EREUNDER FOR YOUR EXPLANATION AND GIVING NATURE, DETAILS AND SOURCE O F THE ENTRIES MENTIONED THEREIN. IT IS WORTH MENTIONING THAT NAME OF CERTA IN COMPANIES IN WHICH YOU, YOUR FAMILY MEMBERS AND YOUR RELATIVES ARE INTEREST ED, ARE APPEARING IN THIS ACCOUNT. EXTRACT OF PAGE 25 OF ANNEXURE A-1 OF PARTY A-5, SE IZED DURING THE COURSE OF SEARCH AND SEIZURE OPERATION IN S.K.GUPTA GROUP OF CASES AT H-108, 2 ND FLOOR, NEW ASIATIC BUILDING, CONNAUGHT PLACE, NEW D ELHI. SR. NO. DATE COMPANY NAME CHEQ. NO. AMOUNT 1 15-01-2005 ERA ADVERTISING & MARK. CO. 470221 250 000 2. 19-01-2005 HIGHTECH COMVISION LIMITED 190634 250 000 3. 15-01-2005 NORTH INDIA SECURITIES PVT. LTD. 8207 08 250000 4. 15-01-2005 P.G. TRAVELS 184215 250000 5. 03-04-2005 GLOVEXTECH 401442 800000 6. 03.04.2005 FLOVEXTECH 401443 500000 7. 03-08-2005 CELL CELL TECHNOLOGY 449110 1200000 8. 03-11-2005 POWER GOLD ELECTRONICS 685071 1200000 9. 19-03-05 BOLNI EXPENSES 561557 750000 10. 19-03-05 POWER GOLD ELECTRONICS 685073 1500000 11. 10-03-2005 S.K.GUPTA JI 165712 500000 12. 10-03-2005 S.K.GUPTA JI 709349 500000 7950000 10 I.T.A .NO.-5516 & 5517/DEL/2012 BONDWELL INSURANCE BROKERS 1 30-04-05 T.G. QUALITY & MAMT. CONSULTANTS 596133 300000 2 04-10-2005 S.K.GUPTA 319711 226000 3. 31-03-05 ERA ADVERTISING & MKT. PVT. LTD. 472796 500000 1026000 E-SYNERGY INFOSYSTEM PVT. LTD. 1 17-01-05 HITECH COMPUTECH PVT. LTD. 190631 250000 2 17-01-05 NORTH INDIA SECURITIES PVT. LTD. 820707 250000 3. 26-09-05 S.K.GUPTAJI 500000 1000000 PARADIGM ADVERTISING 1 22-01-05 P.G.TRAVELS PVT. LTD. QUALITY & MAMT. CONSULTANTS 184218 250000 2 22-01-05 ADVERTISING MARKETING PVT. LTD. 470222 2 50000 500000 YOU ARE REQUESTED TO EXPLAIN YOUR CONNECTION WITH T HE INVESTING COMPANIES AND INVESTEE COMPANIES(YOUR COMPANIES), WITH REFERE NCE TO THE BOOKS OF ACCOUNT AND OTHER DOCUMENTS. 3.1 IN RESPONSE THERETO, THE ASSESSEE HAS SUBMITTE D FOLLOWING REPLY VIDE LETTER DATED 23.12.2008 : 10.2) THE ASSESSEE HAS ALREADY SUBMITTED THAT THE S AID PAGE 30-33 OF ANNEXURE A-31 OF PARTY A-5 FOUND AND SEIZED FROM TH E PREMISES OF SH. S.K. GUPTA DO NOT BELONG TO THE ASSESSEE OR HIS FAMILY M EMBERS AND CONCERN. THE ASSESSEE HAS NO CONCERN WHAT SO EVER IN THE ENT RIES RECORDED IN THE SAID PAGE 30-33 OF ANNEXURE-A-31 OF PARTY A-5 FOUND AND SEIZED FROM THE PREMISES OF SH. SK. GUPTA. IT IS SUBMITTED FURTHER THAT SEARCH WAS ALSO CARRIED OUT AT THE ASSESSEE 'S RESIDENCE AND OFFICE PREMISES. THESE ENTRIES DO NOT CORROBORATE WITH ANY DOCUMENTS SEIZED OR BOOKS OF ACCOUNTS FOUND FROM THE ASSESSEE'S RESIDENTIAL OR OFFICE PREMISES SEARC HED BY INCOME TAX DEPARTMENT. SIR, IT WILL BE OF GREAT HELP IN IDENTI FYING AND EXPLAINING THE ENTRIES IF THE AUTHOR OF THIS DOCUMENTS IS SUMMONED FOR THE CROSS EXAMINATION. (EMPHASIS PROVIDED BY THE BENCH) 10.3) THE ASSESSEE HAS ALREADY SUBMITTED THAT THE S AID PAGE 25 OF ANNEXURE- A-1 FOUND AND SEIZED FROM THE PREMISES OF SH. SK. GUPTA DO NOT BELONG TO THE ASSESSEE OR HIS FAMILY MEMBERS AND CONCERN. THE ASSESSEE HAS NO CONCERN WHAT SO EVER IN THE ENTRIES RECORDED IN THE SAID PAGE 25 OF ANNEXURE-A-L OF PARTY A-5 FOUND AND SEIZED FROM THE PREMISES OF SH. S.K. GUPTA. IT IS SUBMITTED FURTHER THAT SEARCH WAS ALSO CARRIED OUT AT THE ASSESSEE 'S RESIDENCE AND OFFICE PREMISES. THESES E NTRIES DO NOT CORROBORATE WITH ANY DOCUMENTS SEIZED OR BOOKS OF ACCOUNTS FOUN D FROM THE ASSESSEE'S RESIDENTIAL OR OFFICE PREMISES SEARCHED BY INCOME T AX DEPARTMENT. SIR, IT 11 I.T.A .NO.-5516 & 5517/DEL/2012 WILL BE OF GREAT HELP IN IDENTIFYING AND EXPLAINING THE ENTRIES OF THE AUTHOR OF THIS DOCUMENTS IS SUMMONED FOR THE CROSS EXAMINATIO N. (EMPHASIS PROVIDED BY THE BENCH) 3.2 THE ASSESSEE'S SUBMISSIONS MADE IN RESPONSE TO THE SPECIFIC QUESTIONS ASKED ON THE BASIS OF SEIZED DOCUMENTS FOUND DURING COURSE OF SEARCH IN SH. S.K. GUPTA GROUP OF CASES, IS NOTHING BUT AN EVASIV E REPLY FOR THE FOLLOWING REASONS: (I) THE ASSESSEE HAS CLAIMED TO BE A FRIEND OF SH. S.K. GUPTA, DURING THE COURSE OF STATEMENTS. (II) THE ASSESSEE BEING A CHARTERED ACCOUNTANT IS AUDITOR OF VARIOUS COMPANIES OF THE CONCERNS OF SH. S.K. GUPTA. (III) THE DESCRIPTION OF THE ENTRIES ON THE SEIZED DOCUMENTS AS REFERRED TO IN QUESTION NO. 10.3, VERY WELL INDICATES THE SPECIFIC NAMES LIKE BONDWEL L INSURANCE BROKERS, E- SYNERGY INFOSYSTEMS PVT. LTD. AND PARADIGM ADVERTISING, WHICH ARE THE COMPANIES/CONCERNS, IN W HICH ASSESSEE'S FAMILY MEMBERS OR RELATIVES ARE INTERESTED. (IV) SO FAR AS THE ENTRIES AS PER DOCUMENTS REFERRE D TO IN QUESTION NO. 10.2,, IS CONCERNED, THE SAME HAVE BEEN MENTIONED IN THE LEDG ER ACCOUNT IN THE NAME OF SH. ANIL KHANDELWAL, ASSESSEE AND IT BEARS THE N AME OF BONDWELL ON DIFFERENT DATES. IT ALSO HAS PAY ORDER (P.O.) NOS. CLEARLY MENTIONED AGAINST THE NAME OF COMPANIES LIKE SWEN, ERA, HITECH, DMC, SPG ETC, WHICH FORMS THE PART OF SH. S.K. GUPTA GROUP OF CASES, SO THE ASSES SEE'S CLAIM THAT IT HAS NOTHING TO DO THAT THIS DOCUMENT IS INCORRECT. (V) IN FACT THE ASSESSEE, HAS TAKEN ACCOMMODATION E NTRIES FOR HIS FAMILY CONCERNS/COMPANIES FROM TIE CONCERNS/COMPANIES OF S H. S.K. GUPTA GROUP OF CASES. FOR THIS PURPOSE ASSESSEE HAS MADE CASH PAYM ENTS AND ALSO PAID COMMISSION @ 2% WHICH IS VERY MUCH EVIDENT FROM THE ENTRY DATED 02.09.2005 AT PAGE 31 OF ANNEXURE A-31 OF PARTY A-5 SEIZED DURING THE COURSE OF SEARCH AND SEIZURE OPERATION IN SH.S.K.GUPTA GRO UP OF CASES. (VI) THE ASSESSEE HAS MADE CASH PAYMENTS ON VARIOUS DATES AGAINST WHICH THE GROUP COMPANIES OF SH. S.K.GUPTA HAS ISSUED PAY ORDERS, OBVIOUSLY ACCOMMODATION ENTRIES OF INVESTMENT. EVEN IF IT IS CONSIDERED THAT ASSESSEE HAS ACTED AS CONDUIT FOR GETTING ACCOMMODATION ENTR IES FOR HIS GROUP OF COMPANIES BY ROTATING THE CASH FUNDS, THE PEAK CASH AMOUNT IS WORKED OUT ON 08.09.2005 AT RS.27,00,000/- (RS. 1,00,000/- + RS.1 ,00,000/- + RS.6,50,000/- + RS.6,50,000 + RS.6,85,000/- + RS.5,15,000/-) SINC E ASSESSEE HAS FAILED TO GIVE ANY SPECIFIC INFORMATION ALONGWITH CONFIRMATIO N FROM HIS GROUP COMPANIES/CONCERNS WHO HAVE TAKEN ACCOMMODATION ENT RIES FROM THE GROUP COMPANIES/CONCERNS OF SH.S.K.GUPTA, THIS PEAK AMOUN T OF RS.27,00,000/- IS ADDED TO ASSESSEES INCOME AS UNEXPLAINED CASH IN T HE HANDS OF THE ASSESSEE. 12 I.T.A .NO.-5516 & 5517/DEL/2012 ADDITION RS.27,00,000/- 6.1. IT IS SEEN THAT THE ARGUMENTS ADVANCED BY THE ASSESSEE IN APPEAL BEFORE THE CIT(A) ARE SET OUT IN THE PARA 2.2 OF THE IMPUGNED ORDER ON A CONSIDERATION OF WHICH THE CLAIM OF THE ASSESSEE HAS BEEN ALLOWED W HICH HAS BEEN ASSAILED BY THE LD. CIT DR AS NOT RELEVANT. THE SUBMISSIONS ARE EX TRACTED HEREUNDER FOR READY- REFERENCE :- 2.2. AS AGAINST THE ABOVE ACTION OF THE AO, THE AP PELLANT MADE DETAILED SUBMISSIONS WHICH ARE SUMMARIZED HEREUNDER:- 1. IT IS SUBMITTED ON BEHALF OF THE APPELLANT THAT , W HILE REJECTING THE EXPLANATION OF THE APPELLANT, THE AO HAS MADE ADDIT ION BASED PURELY ON DOUBTS, SUSPICION, CONJECTURES AND SURMISES, AND WI THOUT BRINGING IN ANY COGENT MATERIAL ON RECORD. THE AO ALLEGED IN THE IM PUGNED ORDER THAT THE APPELLANT HAS MADE CASH PAYMENTS ON VARIOUS DATES A GAINST WHICH THE GROUP COMPANIES OF SH. S.K. GUPTA HAS ISSUED PAY ORDERS, OBVIOUSLY ACCOMMODATION ENTRIES OF INVESTMENT AND HAS ADDED THE PEAK AMOUNT OF RS. 27,00,000/- IT IS QUITE EVIDENT THAT THE AO HAS TREATED THE ALLEGED C ASH PAYMENTS APPEARING ON PAGE 32 OF ANNEXURE - A - 31 ON 08.09.2005 AS UNEXP LAINED CASH IN THE HANDS OF THE APPELLANT AND REBUTTED THE CONTENTIONS RAISE D BY THE APPELLANT ON THE BASIS THAT THE APPELLANT CLAIMED TO BE A FRIEND OF SHRI S. K. GUPTA AND THAT THE APPELLANT BEING A CHARTERED ACCOUNTANT WAS THE AUDITOR OF VARIOUS COMPANIES OF SHRI S.K.GUPTA. THE OTHER TWO REASONS ARE THAT THE SEIZED DOCUMENTS MENTIONED SPECIFIC NAMES LIKE BONDWELL IN SURANCE BROKERS, E- SYNERGY INFOSYSTEMS PVT. LTD. AND PARADIGM ADVERTIS ING, WHICH ARE THE COMPANIES / CONCERNS IN WHICH ASSESSEE'S FAMILY MEMBERS OR RELA TIVE ARE INTERESTED AND THAT THE SEIZED DOCUMENT REFLECTS LE DGER ACCOUNT IN THE NAME OF ANIL KHANDELWAL AND BONDWELL ON DIFFERENT DATES AND ALSO SHOWS NUMBERS OF PAY ORDERS ISSUED BY SWEN GROUP OF CASES. 2. IT IS CONTENDED BY THE APPELLANT THAT THE APPELL ANT IS A PRACTICING CHARTERED ACCOUNTANT AND SHRI S.K. GUPTA IS ALSO A CHARTERED ACCOUNTANT BY PROFESSION. SO, FRIENDSHIP BETWEEN THE TWO PROFESSIONALS CAN BE POSSIBLE. BUT MERE FRIENDSHIP BETWEEN THE TWO CHARTERED ACCOUNTANTS CA NNOT BE BASIS OF PRESUMPTION THAT THE SAID PAGES 30 TO 33 OF ANNEXUR E - A - 31 AND PAGE 25 OF ANNEXURE - A - 1 SEIZED FROM THE PREMISES OF S.K. G UPTA BELONGED TO THE APPELLANT AND SUM APPEARING ON THE SAID PAGES WERE GIVEN BY THE APPELLANT FOR TAKING ACCOMMODATION ENTRIES. 3. IT IS ALSO CONTENDED THAT THE ALLEGATION MADE BY THE AD THAT THE APPELLANT BEING CHARTERED ACCOUNTANT IS AUDITOR OF VARIOUS CO MPANIES OF THE CONCERNS OF SHRI S.K. GUPTA IS NOT FACTUALLY CORRECT. THE APPEL LANT IN HIS SUBMISSION CATEGORICALLY STATED THAT HE HAD NOT CARRIED OUT AN Y AUDIT FOR SHRI S.K. GUPTA 13 I.T.A .NO.-5516 & 5517/DEL/2012 IN HIS PERSONAL CAPACITY. NO COGENT EVIDENCE HAS BE EN BROUGHT ON RECORD THAT THE APPELLANT IS THE AUDITOR OF THE COMPANIES/ CONCERNS OF SHRI S.K. GUPTA. 4. IT IS FURTHER CONTENDED THAT THE APPELLANT AND H IS FAMILY MEMBERS OR RELATIVES ARE NOT INTERESTED IN THE SAID CONCERNS E XCEPT E - SYNERGY INFOSYSTEMS PRIVATE LIMITED. HOWEVER, IT IS PERTINE NT TO NOTE THAT M/S E - SYNERGY INFOSYSTEMS PRIVATE LIMITED IS A SEPARATE T AXABLE ENTITY AND ANY TRANSACTIONS MENTIONED ON CERTAIN PAGES ABOUT THE S AID COMPANY CANNOT BE TREATED AS UNEXPLAINED CASH OF THE APPELLANT. IF AN Y TRANSACTIONS RELATED TO THE SAID COMPANY AND ANY OTHER CONCERN WERE FOUND RECOR DED IN THE DOCUMENTS SEIZED FROM SHRI S.K. GUPTA, THE SAME CANNOT BE ADD ED TO THE INCOME OF APPELLANT MERELY ON THE BASIS THAT APPELLANT AND HI S FAMILY MEMBERS OR RELATIVES ARE INTERESTED IN THOSE COMPANIES / CONCERNS. 5. IT IS FURTHER CONTENDED THAT THE AO HIMSELF ALLE GED IN THE IMPUGNED ORDER THAT TRANSACTIONS ARE RELATED TO BONDWELL INSURANCE BROKERS, E - SYNERGY INFOSYSTEMS PRIVATE LIMITED AND PARADIGM ADVERTISIN G. HENCE, THE SAID TRANSACTIONS ARE NOT RELATED TO THE APPELLANT AND T HAT CAN NEVER BE CONSIDERED AS EVIDENCE THAT. THE APPELLANT IS TAKING ACCOMMODA TION ENTRIES IN THE SAID COMPANIES / CONCERNS. IF THE SAID COMPANIES / CONCERNS HAVE TAKEN ACCOMMODATION ENTRIES, THE SAME CAN BE ADDED IN THE IR RESPECTIVE HANDS BY INITIATING ASSESSMENT PROCEEDINGS UNDER SECTION 153 C OF THE INCOME TAX ACT, 1961 AS UNEXPLAINED CASH CREDIT AND NOT IN THE HAND S OF THE APPELLANT. INSTEAD OF DOING THAT THE AO ERRED IN LAW BY MAKING ADDITIO N IN THE HANDS OF APPELLANT IN RESPECT OF TRANSACTIONS RELATED TO OTHER ASSESSA BLE PERSONS INSTEAD OR INVOKING PROVISION OF SECTION 153C OF THE INCOME TA X ACT, 1961. 6. IT IS FURTHER CONTENDED THAT THE APPELLANT HAD C ATEGORICALLY REQUESTED FOR PHOTOCOPIES OF THE PAGES 31 TO 33 OF ANNEXURE - A - 31 AND A - 25 OF ANNEXURE - A - 1 SEIZED FROM THE PREMISES OF SHRI S.K. GUPTA DURING THE COURSE OF SEARCH AND SEIZURE OPERATION. HOWEVER, AO DID NOT P ROVIDE THE SAME AND MADE THE IMPUGNED ADDITION IN VIOLATION OF PRINCIPL ES OF NATURAL JUSTICE. 7. IT IS ALSO CONTENDED THAT COPIES OF THE SAID DOC UMENTS AND STATEMENT OF SHRI S.K.GUPTA WAS PROVIDED BY THE AO DURING APPELL ATE PROCEEDINGS IN MARCH 2011 FROM WHICH IT IS SEEN THAT THE DOCUMENTS FOUND AND SEIZED FROM THE PREMISES OF SHRI S.K. GUPTA DID NOT HAVE SUCH C LEAR CUT EVIDENCE FOR MAKING ADDITION IN THE CASE OF THE APPELLANT AND EV IDENCE RELIED UPON WAS VAGUE AND AMBIGUOUS. THE ALLEGED EVIDENCES ARE NOT RELATED TO THE APPELLANT AS THE LEARNED ASSESSING OFFICER ALSO FAILED TO BRI NG ANY EVIDENCE ON RECORD THAT SHRI S.K. GUPTA OR OTHER PERSON HAS GIVEN STAT EMENT OR FILED WRITTEN SUBMISSION THAT THE SAID PAGES ARE RELATED TO TRANS ACTIONS WITH SHRI ANIL KHANDELWAL, THE APPELLANT. SINCE, THE SAID PAGES WERE NEITHER ACCEPTED BY THE APPELLANT TO BE BELONGED TO HIM NOR SHRI S.K. G UPTA ACCEPTED THAT THE SAID TRANSACTION BELONGED TO THE APPELLANT; THE ALLEGATI ON MADE BY THE LEARNED ASSESSING OFFICER DID NOT HAVE ANY BASIS EXCEPT DOU BT, SUSPICION, CONJECTURE AND SURMISES. IT IS ALSO PERTINENT TO NOTE THAT THE CASES OF SHRI S.K. GUPTA 14 I.T.A .NO.-5516 & 5517/DEL/2012 GROUP WERE ALSO ASSESSED BY THE LEARNED ASSESSING O FFICER, BUT HE FAILED TO CONFIRM THE SAID FACTS FROM SHRI S.K. GUPTA DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 8. IT IS ALSO CONTENDED THAT THE RIGHT OF NATURAL J USTICE IS SO FUNDAMENTAL THAT THE FAILURE TO OBSERVE THE PRINCIPLES OF NATURAL JU STICE .CANNOT BE MADE GOOD IN APPEAL AND LACK OF OPPORTUNITY BEFORE THE ASSESSING OFFICER CANNOT BE RECTIFIED BY THE APPELLATE AUTHORITY BY GIVING SUCH OPPORTUNITY. RELIANCE WAS PLACED ON THE FOLLOWING DECISIONS RENDERED BY HON'B LE SUPREME COURT : (I) SHREERAM DURGA PRASAD [RB VS. SETTLEMENT COMMIS SION (1989) 176 ITR 169 (SC)] (II) NAWAABKHAN VS. STATE OF GUJARAT AIR 1974 SC 14 71 (III) CWT VS. JAGDISH PRASAD CHOUDHARY (1995) 211 I TR 472 (PATNA) [F.B.] (IV) APPROPRIATE AUTHORITY VS. VIJAY KUMAR SHARMA ( 2001) 249 ITR 554 (SC) (V) TIN BOX CO. VS. CIT (2001) 249 ITR 216 (SC). 6.2. THE RECORD SHOWS THAT THESE SUBMISSIONS WERE FORWARDED BY THE CIT(A) TO THE AO AS IS EVIDENT FROM PAGE 10-13 OF THE ORDE R UNDER CHALLENGE WHEREIN THE REMAND REPORT RECEIVED BY THE CIT(A) FROM THE AO HA S BEEN EXTRACTED. FOR READY-REFERENCE, THE SAME IS ALSO REPRODUCED HEREU NDER :- 2.2. THE APPELLANTS SUBMISSIONS WERE FORWARDED TO THE AO FOR ELICITING HIS COMMENTS OR REBUTTAL, IF ANY AND THE AO SUBMITT ED HIS REPORT DATED 13/03/2012 REITERATING THE ARGUMENTS CONTAINED IN T HE ASSESSMENT ORDER . RELEVANT PORTIONS OF HIS REMAND REPORT IS EXTRACTED HEREUNDER: 'DURING THE ASSESSMENT PROCEEDING, THE ASSESSEE, VI DE QUESTION NO. 10.2 AND 10.3 OF THE QUESTIONNAIRE DATED 07.11.2008, WAS ASK ED TO EXPLAIN THE CONNECTION WITH INVESTING COMPANIES AND INVESTEE CO MPANIES, WITH REFERENCE TO THE BOOKS OF ACCOUNT AND OTHER DOCUMENTS AS PER PAGES 30-33 OF ANNEXURE- A-31 AND PAGE 25 OF ANNEXURE A-1 FOUND AND SEIZED F ROM S.K. GUPTA GROUP OF CASES AT H-108, 2 ND FLOOR, NEW ASIATIC BUILDING, CONNAUGHT PLACE, NEW DELHI DURING THE COURSE OF SEARCH AND SEIZURE OPERA TION UNDER SECTION 132 OF THE INCOME TAX ACT, 1961. THE ASSESSEE SUBMITTED MERELY EVASIVE REPLIES DEVOI D OF ANY MERITS. THE ASSESSEE FAILED TO FURNISH ANY EVIDENCE TO ESTABLIS H HIS CONTENTION THAT THESE TRANSACTIONS DOES NOT BELONG TO THE' ASSESSEE. IT I S WORTH MENTIONING THAT THE NAMES OF THE COMPANIES OF THE ASSESSEE CLEARLY FIGU RE IN THE SEIZED DOCUMENTS THAT WERE RELIED UPON BY THE ASSESSING OFFICER. FUR THER, THE ASSESSEE FAILED TO ESTABLISH ANY BUSINESS CONNECTION WITH THE COMPANIE S OF SHRI S.K. GUPTA. AS FAR AS THE ENTRIES AS PER DOCUMENTS REFERRED TO IN QUESTION NO. 10.2, IS 15 I.T.A .NO.-5516 & 5517/DEL/2012 CONCERNED, THE SAME HAVE BEEN MENTIONED IN THE LEDG ER ACCOUNT IN THE NAME OF SHRI ANIL KHANDELWAL, ASSESSEE AND IT BEARS THE NAME OF BONDWELL ON DIFFERENT DATES. IT ALSO HAS PAY ORDER (P.O.) NOS. CLEARLY MENTIONED AGAINST THE NAME OF COMPANIES LIKE SWEN, ERA, HIIECH, DMC, SPG ETC. WHICH FORMS PART OF SHRI S. K GUPTA GROUP OF CASES. SO THE ASSE SSEE'S CLAIM, THAT IT HAS NOTHING TO DO WITH THIS DOCUMENT, IS INCORRECT. THE DESCRIPTION OF THE ENTRIES ON SEIZED DOCUMENTS REFERRED TO IN QUESTION NO. 10. 3, VERY WELL INDICATES THE SPECIFIC NAMES LIKE BONDWELL INSURANCE BROKERS, E-S YNERGY INFOSYSTEMS PVT. LTD. AND PARADIGM ADVERTISING WHICH ARE THE COMPANI ES/CONCERNS IN WHICH ASSESSEE'S FAMILY MEMBERS OR RELATIVE ARE INTERESTE D. REGARDING OPPORTUNITY TO CROSS EXAMINE THE AUTHOR O F THESE DOCUMENTS (PAGES 30-33 OF ANNEXURE-A-31 AND PAGE 25 OF ANNEXU RE-A-1 FOUND AND SEIZED FROM S.K. GUPTA GROUP OF CASES AT H-108, 2 ND FLOOR, NEW ASIATIC BUILDING, CONNAUGHT PLACE, NEW DELHI), IT IS STATED THAT THERE IS NO MATERIAL TO SHOW THAT THE ASSESSEE WAS PROVIDED ANY SUCH OPP ORTUNITY. THE SUBMISSION OF THE APPELLANT THAT A SEARCH AND S EIZURE OPERATION WAS ALSO CARRIED OUT IN THE CASE OF THE APPELLANT HIMSE LF AND NO CORROBORATIVE EVIDENCE WAS FOUND FROM HIS BUSINESS AND RESIDENTIA L PREMISES, NEED NOT BE GIVEN ANY IMPORTANCE AS IT IS A MATTER OF COMMON SE NSE THAT EVIDENCES THAT CAN ESTABLISH UNACCOUNTED MONEY (OR MONEY'S WORTH 1 ) ARE KEPT TO THE MINIMUM, IN LEAST NUMBER OF HANDS/PLACE AND THAT TO O FOR THE LEAST POSSIBLE TIME. THEREFORE, ONCE EVIDENCES TO ESTABLISH THE PA YMENT OF CASH FOR OBTAINING ACCOMMODATION ENTRY HAVE BEEN FOUND AT ONE PLACE CO VERED UNDER SEARCH, NON FINDING OF THE SAME FROM ANY OTHER PLACE IS IMM ATERIAL. THE SUBMISSION OF THE APPELLANT THAT NO OTHER CORRO BORATIVE EVIDENCES WERE FOUND, IS INCORRECT IN THE LIGHT OF THE FOLLOWING:- A) IT HAS BEEN ESTABLISHED THAT SHRI. S.K. GUPTA WAS PROVIDING ACCOMMODATION ENTRIES WITH THE HELP OF HIS COMPANIE S AND ENTITIES. B) THE EVIDENCES RELIED UPON WERE FOUND FROM T HE PREMISES OF SHRI. S.K. GUPTA. (C) THE EVIDENCE RELIED UPON MENTION THE NAMES OF COMPA NIES OF SHRI. S.K. GUPTA WHICH HAS BEEN ESTABLISHED TO BE BOGUS/PAPER COMPANIES HAVING NO REAL BUSINESS ACTIVITY AND BEING MAINTAINED ONLY FOR THE PURPOSE OF PROVIDING ACCOMMODATION ENTRIES. D) THE ASSESSEE FAILED TO ESTABLISH ANY BUSINE SS CONNECTION WITH THE COMPANIES OF SHRI S.K. GUPTA NOR COULD THE ASSESSEE FILE ANY EVIDENCE TO EXPLAIN AS TO WHY THE NAME OF HIS COMPANIES APPEAR IN THE DOCUMENTS MAINTAINED BY SHRI S.K. GUPTA WHO WAS, ADMITTEDLY, AN ENTRY PROVIDER. THE CONTENTION OF THE ASSESSEE THAT HE, IN HIS INDI VIDUAL CAPACITY, HAD NOT 16 I.T.A .NO.-5516 & 5517/DEL/2012 CARRIED OUT ANY AUDIT FOR SHRI S.K. GUPTA OR COMPAN IES CONTROLLED BY HIM IS INCORRECT, EVASIVE AND CONCEALS THE FACT WHETHER M/ S ANIL KHANDELWAL AND ASSOCIATES HAD CARRIED OUT SUCH AUDIT OF EITHER SHR I S.K. GUPTA OR ANY OF HIS COMPANIES/ENTITIES. THE ASSESSEE HAS ADMITTED TO BE CARRYING OUT THE PROFESSION OF CHARTERED ACCOUNTANT UNDER THIS NAME. THERE IS NO MATERIAL ON RECORD TO SHOW THAT M/S ANIL KHANDELWAL AND ASSOCIA TES IS A SEPARATE PERSON IN THE EYES OF THE LAW. THE NAME SUGGESTS THAT IT I S A PARTNERSHIP FIRM IN WHICH PARTNERS HAVE JOINT AND SEVERAL LIABILITY. THE CONTENTION OF THE ASSESSEE THAT THE ADDITION OF UNACCOUNTED CASH WAS MADE ONLY THE BASIS THAT ASSESSEE WAS A PROFESSIONA L FRIEND OF SHRI S.K. GUPTA. IS INCORRECT. SEVERAL EVIDENCES WERE GATHERE D DURING THE SEARCH TO ESTABLISH THAT THE NEXUS BETWEEN SHRI S.K. GUPTA AN D THE ASSESSEE GOES BEYOND A PROFESSIONAL FRIENDSHIP. NOTWITHSTANDING T HE CLOSE NEXUS, THE ADDITION OF UNACCOUNTED CASH WAS NOT MADE ON ACCOUN T OF THE NEXUS BETWEEN THE ASSESSEE AND SHRI S.K GUPTA, RATHER, IT WAS THE BASIS OF CONCRETE EVIDENCES DEPICTING TRANSFER OF AMOUNTS FROM BOGUS ENTITIES/COMPANIES OF SHRI S.K. GUPTA WHO WAS AN ENTRY PROVIDER. IN FACT THE ASSESSEE HAS TAKEN ACCOMMODATION ENTRIE S FOR HIS FAMILY CONCERNS FROM COMPANIES OF SHTI. S.K. GUPTA GROUP OF CASES. FOR THIS PURPOSE, ASSESSEE HAS MADE CASH PAYMENTS AND ALSO P AID COMMISSION @ 2% WHICH IS VERY MUCH EVIDENT FROM THE ENTRY DATED 02. 09.2005 AT PAGE 31 OF ANNEXURE A-31 OF PARTY A-5 SEIZED DURING THE COURSE OF SEARCH AND SEIZURE OPERATION IN SHRI S.K. GUPTA GROUP OF CASES. THE ASSESSEE HAS MADE CASH PAYMENT ON VARIOUS DATES AGAINST WHICH THE GROUP COMPANIES OF SHRI S.K. GUPTA HAS ISSUED PAY ORDERS, OBVIOUSLY ACCOMMODATION ENTRIES OF INVESTMENT. EVEN IF IT IS CONSIDERED THAT ASSESSEE HAS ACTED AS CONDUIT FOR GETTING ACCOMMODATION ENTR IES FOR HIS GROUP OF COMPANIES BY ROTATING THE CASH FUNDS, THE PEAK CASH AMOUNT IS WORKED OUT ON 08.09.2005 AT RS.27,00,000/- (RS.1,00,000/- + RS. 6 ,50,000/- + RS.6,50,000 + RS. 6,85,000/- + RS. 5, 15,000/-). SINCE ASSESSEE HAD FAILED TO GIVE ANY SP ECIFIC INFORMATION ALONG WITH CONFIRMATION FROM HIS GROUP COMPANIES/CONCERNS WHO HAVE TAKEN ACCOMMODATION ENTRIES FROM THE GROUP COM PANIES/CONCERNS OF SHRI. S.K. GUPTA, THIS PEAK AMOUNT OF RS. 27,00,000/- WAS RIGHTLY ADDED TO ASSESSEE'S INCOME AS UNEXPLAINED CASH IN THE HANDS OF THE ASSESSEE.' 6.3. THE IMPUGNED ORDER FURTHER SHOWS THAT THEREAFT ER THE CIT(A) CONFRONTED THE ASSESSEE WITH THE REMAND REPORT RECEIVED. THE ASSESSEE FILED A REJOINDER THERETO. THE CONTENTS OF THE SAME HAVE BEEN BROUGH T OUT BY THE CIT(A) IN PARA 2.2.1 TO 2.2.2 OF THE IMPUGNED ORDER. THE SAME IS REPRODUCED HEREUNDER FOR READY-REFERENCE:- 17 I.T.A .NO.-5516 & 5517/DEL/2012 2.2.1 IN HIS REJOINDER, THE APPELLANT HAS GIVEN DET AILED PARA-WISE ARGUMENTS AGAINST THE OBSERVATIONS MADE BY THE AO IN HIS REMA ND REPORT. ACCORDING TO THE APPELLANT, THE ADDITION MADE BY THE AO WAS NOT JUSTIFIED IN VIEW OF THE FACTS THAT THE DOCUMENTS ON THE BASIS OF WHICH THE ADDITION HAS BEEN MADE WAS NEITHER SEIZED FROM THE CONTROL AND POSSESSION OF T HE APPELLANT NOR BELONGED TO THE APPELLANT AND THAT NO CORROBORATIVE EVIDENCE WAS BROUGHT ON RECORD DURING THE SIMULTANEOUS SEARCH CONDUCTED IN THE CAS E OF THE APPELLANT HIMSELF. THE APPELLANT, IN HIS REJOINDER, HAS ALSO MENTIONED THAT ON BEING GIVEN AN OPPORTUNITY TO CROSS-EXAMINE SHRI S.K.GUPTA, FROM W HOSE POSSESSION AND CONTROL THE IMPUGNED SEIZED MATERIAL WAS FOUND, SHR I S.K.GUPTA HAS CATEGORICALLY DENIED HAVING ENTERED INTO ANY TRANSA CTION WITH THE APPELLANT OR HIS CONCERNS, WHICH MAKES IT CLEAR THAT NO ADDITION ON THE BASIS OF THE IMPUGNED DOCUMENTS COULD BE MADE IN THE HANDS OF TH E APPELLANT. HOWEVER, THE ASSESSING OFFICER HAS OFFERED NO COMMENTS ON TH E CROSS EXAMINATION OF SH. S.K. GUPTA ON 05.04.2011 WHICH INDICATES THAT T HE CONTENTION OF THE APPELLANT HAS BEEN ACCEPTED BY HIM. 2.2.2 BESIDES THE ABOVE CONTENTIONS, THE APPELLANT HAS ALSO MADE DETAILED SUBMISSIONS REGARDING NON-APPLICABILITY OF LEGAL PR ESUMPTIONS CONTAINED IN SECTION 292C IN RESPECT OF DOCUMENTS FOUND AND SEIZ ED FROM A THIRD PARTY. IT HAS BEEN CONTENDED THAT IN A NUMBER OF CASE LAWS IT HAS BEEN HELD THAT PRESUMPTION UNDER SECTION 132(4A) IS ONLY AGAINST THE PERSON IN WHOSE POSSESSION THE SEARCH MATERIAL IS FOUND AND NOT AGA INST ANY OTHER PERSON. IT IS FURTHER HELD THAT PRESUMPTION IS REBUTTABLE AND NOT CONCLUSIVE AND IT CANNOT BE APPLIED IN THE ABSENCE OF CORROBORATIVE EVIDENCE. R ELIANCE IN THIS REGARD HAS BEEN PLACED ON VARIOUS CASE LAWS AS MENTIONED HEREU NDER:- I. STRAPTEX (INDIA) PRIVATE LIMITED V DEPUTY COMMISSIO NER OF INCOME TAX [2003] 841TD 320 (IT AT - MUMBAI) II . ASSISTANT COMMISSIONER OF INCOME TAX V KISHORE LAL BALWANI RAI [2007] 17 SOT 380 (ITAT - CHANDIGARH) III. SHETH AKSHAY PUSHPAVADAN V DEPUTY COMMISSION ER OF INCOME TAX [2010] 130 TT J 42 (ITTA - AHMEDABAD) IV. RAMA TRADERS V FIRST INCOME TAX OFFICER [1988 ] 25 ITD 599 (ITAT PATNA)(TM) 6.4. IN THE ABOVE BACKGROUND THE CIT(A) PROCEEDED T O DECIDE THE ISSUE IN THE FOLLOWING MANNER, WHICH HAS BEEN CHALLENGED BY THE REVENUE:- 2.3 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CA SE, THE ARGUMENTS OF THE APPELLANT AND THE POSITION OF LAW. THE AO HAS MADE THE IMPUGNED ADDITION ON THE BASIS OF DOCUMENTS FOUND AND SEIZED FROM SHRI S . K GUPTA, A THIRD PARTY. HIS PRIMARY REASONING IS THAT IN THESE PAPERS THERE ARE INTELLIGIBLE NARRATIONS SIGNIFYING PAYMENTS OF CASH ON VARIOUS DATES BY APP ELLANT TO VARIOUS GROUP COMPANIES OF SHRI S.K.GUPTA , WHO HAVE ISSUED ACCOM MODATION ENTRIES FOR 18 I.T.A .NO.-5516 & 5517/DEL/2012 INVESTMENT IN THE COMPANIES IN WHICH THE APPELLANT AND HIS RELATIVES ARE INTERESTED. THE APPELLANT ON THE OTHER HAND HAS CON TENDED THAT NO PRESUMPTION IS AVAILABLE TO THE ASSESSING OFFICER U /S 132(4A)/292C OF THE I T ACT WITH REGARD TO THE IMPUGNED SEIZED DOCUMENTS AS THEY WERE NEITHER FOUND AND SEIZED FROM THE APPELLANT NOR DO THEY BELONG TO THE APPELLANT. FURTHER, THE APPELLANT HAS ALSO CONTENDED THAT DESPITE A SIMULTA NEOUS SEARCH OPERATION IN THE CASE OF THE APPELLANT, NO EVIDENCE WHATSOEVER HAS BEEN FOUND WHICH CORRELATES WITH THE IMPUGNED SEIZED DOCUMENTS FOUND FROM THE PREMISES OF SHRI S. K. GUPTA ,A THIRD PARTY. THE APPELLANT HAS ALSO TAKEN THE GROUND THAT SHRI S . K. GUPTA HIMSELF HAD DENIED THE AUTHORSHIP/ OWNERSHIP OF THE IMPUGNED DO CUMENTS DURING HIS STATEMENT ON 13/12/2006 AND REITERATED THE SAME EVEN DURING HIS CROSS EXAMINATION BY THE APPELLANT BEFORE THE AO ON 05/04/2012. THE APPELLANT HAS ALSO TAKEN THE GROUND THAT SINCE SHRI S. K. GUPTA, DURING HIS CROSS EXAMINATION BY THE APPELLANT BEFORE THE AO, HAS CAT EGORICALLY DENIED HAVING ANY TRANSACTIONS IN CASH WITH THE APPELLANT OR HIS FAMILY MEMBERS, COMPANIES OR ENTITIES OWNED BY HIM OR THEM, THE IMP UGNED ADDITION MADE BY THE AO IS BASED ON NO EVIDENCE BUT ON PRESUMPTIONS, CONJECTURES AND SURMISES. I HAVE PERUSED COPIES OF THE STATEMENT OF SHRI S. K. GUPTA RECORDED DURING THE SEARCH OPERATION ON 13/02/2006 AS WELL AS THE CROSS- EXAMINATION STATEMENT OF SHRI S. K. GUPTA DATED 05/04/2011 WHICH WAS FORWARDED BY THE AO WITHOUT ANY COMMENTS VIDE H IS REMAND REPORT DATED 02/11/2011 IN RESPECT OF A.Y.2007-0S. IT IS SEEN FROM THESE ST ATEMENTS THAT SHRI S. K. GUPTA HAS DENIED HAVING AUTHORED THE IMPUGNE D SEIZED MATERIAL AND HAS ALSO DENIED THAT THEY ARE PART OF HIS BOOKS OF ACCOUNTS. HE HAS ALSO DENIED HAVING MADE ANY CASH TRANSACTIONS WITH THE APPELLAN T OR HIS FAMILY MEMBERS OR ENTITIES OWNED .BY THEM AND HAS ALSO DENIED HAVI NG RECEIVED ANY COMMISSION FOR THE ALLEGED ACCOMMODATION ENTRIES GI VEN TO SUCH ENTITIES BELONGING TO THE APPELLANT OR HIS FAMILY MEMBERS. T HE RELEVANT PORTIONS OF THESE STATEMENT ARE EXTRACTED HEREUNDER FOR READY REFERENCE: - A. EXTRACTS FROM THE STATEMENT OF SHRI S. K. GUPTA AT THE TIME OF SEARCH RECORDED ON 13/12/2006 : 'Q-13 DURING THE SEARCH & SEIZURE OPERATION U/S 132 OF IT ACT AT THE ABOVE PREMISE CERTAIN BOOKS OF ACCOUNTS & LOOSE PAPERS WE RE FOUND AND SEIZED AND INVENTORIED AS ANNEXURE 'A', SR. NO, A-2 9 TO A-36 OF THE SAID ANNEXURE IS NOTE BOOKS. PLEASE EXPLAIN THE NAT URE OF THESE BOOKS AND ALSO EXPLAIN THE ENTRIES RECORDED THEREIN. PLEA SE ALSO EXPLAIN AS TO WHICH CONCERN OF YOUR GROUP THESE NOTE BOOKS BELONG . ANS. I DON'T KNOW ABOUT THESE ROUGH BOOKS AND HOW THEY ARE LYING IN MY OFFICE PREMISE. Q.14. HOW DO YOU SAY THESE ABOVE ANNEXURE ARE ROUGH BOOKS? ANS. APPARENTLY LOOKS AS ROUGH BOOKS . WE ARE MAINTAINING ALL OUR BOOKS ON COMPUTER ELECTRONICALLY. 19 I.T.A .NO.-5516 & 5517/DEL/2012 Q.15. SINCE THE ABOVE ANNEXURE CONTAIN MOSTLY DAILY RECORD OF CASH RECEIPTS OR CASH PAYMENTS AND CHEQUE PAYMENT, AND HAVE BEEN SEIZED FROM YOUR PREMISE, THE ONUS LIES ON YOU TO PROVE THE PRE SENCE OF THESE ANNEXURES. ANS. AS I HAVE TOLD EARLIER I DON'T KNOW ABOUT THESE ANNEXURES AND I HAVE COME TO THIS OFFICE TODAY ONLY AND THESE BOOKS WERE NOT SEIZED IN FRONT OF ME. I DON'T KNOW ABOUT THE WHERE ABOUT OF THESE BOOKS. THESE BOOKS MAY BE ROUGH ENTRIES OF DAILY ENTRIES AS SHOWN TO ME IN DETAIL OF OUR GROUP COMPANIES & ENTER TRANSFER AND DEPOSITS. FURTHER EXPLANATIONS WILL BE GIVEN IN YOUR OFFICE'. B. EXTRACTS FROM THE CROSS EXAMINATION OF SH. S.K. GUP TA DATED 05.04.2011 AS CONDUCTED BEFORE THE AO: '01. MR. S.K. GUPTA AS PER PAGE 7 AND OTHER STATEMENTS GIVEN BY YOU TO THE INCOME TAX DEPARTMENT DURING THE COURSE OF SEARCH O N YOUR PREMISES ON 12- 12-2006 YOU HAVE DISOWNED ANNEXURE A, PARTICULARLY ANNEXURE A-31, A-33 AND A-5. YOU HAVE ALSO SAID THAT THESE ARE ROUGH BO OKS LYING IN YOUR OFFICE. DO YOU STILL STAND BY THESE STATEMENTS? A 1. I STILL STAND BY MY STATEMENT GIVEN ON 13-12-2006. 02. ARE YOU THE AUTHOR OF ANNEXURE A-5, ANNEXURE A-31, OR ANNEXURE A-33 FOUND AND SEIZED FROM YOUR PREMISES? A2. NO.1 AM NOT. Q3. WHETHER I HAVE BEEN GIVEN OR TAKEN CASH AS PER OR IN LIEU OF ANY RECORDINGS DONE IN THE ANNEXURE A-5, A-31 OR A-33? A3. NO I HAVE NOT GIVEN OR TAKEN ANY CASH FROM YOU AND YOUR OFFICE . 04. DID I PAY OR RECEIVE ANY COMMISSION OUT OF ANY TRANSACTIO NS REFERRED TO IN ANY OF THE ANNEXURE A-1,.A-31 OR A-33? A4 .. NO, NEITHER I RECEIVED NOR I PAID ANY COMMISSION. Q5. DO YOU KNOW ANY OTHER PERSON BY THE NAME ANIL KHANDELW AL? A5. YES, I KNOW 2-3 MORE ANIL KHANDELWAL BELONGS TO MY NATIVE PLACE. Q6. DID YOU EVER RECEIVE OR PAY CASH AS PER OR IN L IEU OF OR COMMISSION OR' ANY OTHER TRANSACTION AGAINST ANY OF MY FAMILY MEMB ERS, COMPANIES OR ENTITIES OWNED BY ME/THEM? A6. NO I HAVE NEVER RECEIVED OR PAID ANY CASH TO ABOVE YOUR CONNECTED PERSONS.' (EMPHASIS SUPPLIED) 2.3.1 A PERUSAL OF THE ABOVE EXTRACTS CLEARLY INDIC ATES THAT IN THE ABSENCE OF ANY CORROBORATIVE EVIDENCE FOUND DURING THE SEARCH AT THE PREMISES OF THE APPELLANT, NO ADVERSE INFERENCE CAN BE DRAWN AGAINST THE APPELLANT MERELY ON THE BASIS OF THE SEIZED DO CUMENTS AS FOUND AND SEIZED FROM THE PREMISES OF THE THIRD PARTY. AS HA S BEEN HELD IN A NUMBER OF JUDICIAL PRONOUNCEMENTS RELIED ON BY THE APPELLANT AND EXTRACTED IN PARA 2.2.2 HEREINABOVE, PRESUMPTION U/ S 134(4A)/292C IS AVAILABLE ONLY IN THE CASE OF THE PERSON FROM WHOSE POSSESSION AND CONTROL THE DOCUMENTS ARE FOUND AND IT IS NOT AVAIL ABLE IN RESPECT OF A 20 I.T.A .NO.-5516 & 5517/DEL/2012 THIRD PARTY. EVEN IN THE CASE OF SUCH A PERSON FRO M WHOSE POSSESSION AND CONTROL ANY INCRIMINATING DOCUMENT IS FOUND, TH E PRESUMPTION U/S 132(4A)/292C IS A REBUTTABLE ONE. SINCE IN THE CASE OF THE APPELLANT, NO CORROBORATIVE DOCUMENTS OR EVIDENCE HAS BEEN FOUND FROM THE CONTROL OR POSSESSION OF THE APPELLANT, I HOLD THAT THE LEG AL PRESUMPTION AS INCORPORATED U/S 132(4A)/292C WILL NOT BE AVAILABLE TO THE ASSESSING OFFICER IN THE APPELLANTS CASE. 2.3.2. FURTHER, THE APPELLANT HAS ALSO DENIED THE C ONTENTS OF THE IMPUGNED SEIZED DOCUMENTS AND THE PERSON FROM WHOM THE IMPUGNED DOCUMENTS WERE SEIZED HAS ALSO STATED DURING CROSS- EXAMINATION THAT THERE HAS BEEN NO CASH TRANSACTIONS BETWEEN HIM AND THE APPELLANT OR HIS FAMILY MEMBERS OR ENTITIES IN WHICH THEY ARE IN TERESTED. THE AO HAS HEAVILY EMPHASIZED ON THE FACT THAT SHRI.S.K.GUPTA WAS AN ENTRY PROVIDER AND SINCE THE NAMES OF THE COMPANIES IN WH ICH THE APPELLANTS FAMILY MEMBERS OR RELATIVES WERE INTERESTED WAS FOU ND MENTIONED IN THE DOCUMENT SEIZED FROM SHRI S.K.GUPTA, IT IS ENOUGH T O CONCLUDE THAT THE APPELLANT MUST HAVE PAID CASH TO SHRI GUPTA TO RECE IVE ACCOMMODATION ENTRIES FROM HIS GROUP COMPANIES. I AM AFRAID, I C ANNOT CONCUR WITH SUCH LOGIC IN THE ABSENCE ANY CORROBORATIVE EVIDENC E TO SUGGEST THAT THE ENTRIES FOUND IN THE SEIZED DOCUMENTS WERE ALSO REF LECTED IN THE BOOKS OF THE APPELLANT OR HIS CONCERNS. IT IS WELL SETTL ED IN LAW THAT THE LOOSE PAPERS, DIARIES AND DOCUMENTS CANNOT POSSIBLE BE CO NSTRUED AS BOOKS OF ACCOUNT REGULARLY KEPT IN THE COURSE OF BUSINESS . SUCH EVIDENCE WOULD, THEREFORE, BE OUTSIDE THE PURVIEW OF SECTION 34 OF THE EVIDENCE ACT, 1972. THEREFORE, THE REVENUE WOULD NOT BE JUS TIFIED IN RESTING ITS CASE JUST ON THE LOOSE PAPERS AND DOCUMENTS FOUND F ROM THIRD PARTY IF SUCH DOCUMENTS CONTAINED NARRATIONS OF TRANSACTIONS WITH THE ASSESSEE AS DECIDED BY THE HONBLE SUPREME COURT IN THE CASE OF CENTRAL BUREAU OF INVESTIGATION VS. V.C.SHUKLA (1988) 8 SSC 410 AN D CHUHARMAL VS. COMMISSIONER OF INCOME TAX (1988) 172 250/38 TAXMAN 190 (SC). 2.3.3 ON A CAREFUL CONSIDERATION OF THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE EVIDENCE ON RECOR D, IT IS CLEAR THAT NEITHER ANY DOCUMENT WAS FOUND FROM THE POSSESSION OR CONTROL OF THE APPELLANT DURING THE SIMULTANEOUS SEARCH OPERATION WHICH SHOWS THAT ANY AMOUNT WAS TRANSACTED IN CASH BY THE APPELLANT WITH THE COMPANIES OF SHRI. S.K.GUPTA FOR GETTING ACCOMMODAT ION ENTRIES FROM THEM SO AS TO ENABLE THE ASSESSING OFFICER TO DRAW ADVERSE INFERENCE AGAINST THE APPELLANT ON THE BASIS OF LEGAL PROVISI ON AVAILABLE U/S 132(4A)/292C NOR THE ASSESSING OFFICER HAS BEEN ABL E TO BRING OUT ANY MATERIAL EVIDENCE TO THE EFFECT THAT THE APPELLANT HAD ACTUALLY EARNED SUCH UNDISCLOSED INCOME SO AS TO REBUT THE DENIAL M ADE BY THE APPELLANT. FURTHER SINCE ON CROSS-EXAMINATION BY T HE APPELLANT BEFORE THE AO, SH.S.K.GUPTA CATEGORICALLY DENIED HAVING RE CEIVED ANY CASH FROM THE APPELLANT, HIS FAMILY MEMBERS OR ENTITIES IN WHICH THEY WERE INTERESTED, AND THE AO HAS NOT BROUGHT ON RECORD AN Y ADVERSE MATERIAL 21 I.T.A .NO.-5516 & 5517/DEL/2012 TO CONTROVERT SUCH DENIAL, IT WOULD NOT BE JUSTIFIE D TO FASTEN THE IMPUGNED TAX LIABILITY ON THE APPELLANT. ACCORDING LY THE ADDITION MADE BY THE AO CANNOT BE LEGALLY JUSTIFIED OR UPHELD. T HE ONLY GROUND RAISED IN THIS APPEAL IS, THEREFORE, DECIDED IN FAVOUR OF THE APPELLANT. (RELIEF OF RS.27,00,000/-) 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ON A CONSIDERATION OF THE SAME, WE FIND TH AT THE ARGUMENTS OF THE LD. CIT DR HAVE NO MERIT. WE FIND THAT THE SPECIFIC QU ESTIONS PUT TO SH.S.K.GUPTA EXTRACTED IN THE IMPUGNED ORDER DURING THE CROSS-EX AMINATION CANNOT BE TERMED TO BE VAGUE WHERE FULL FACTS HAVE NOT COME OUT. A PERUSAL OF THE SAME SHOWS THAT CONSISTENTLY SH.S.K.GUPTA STATES THAT NO MONEY HAS BEEN RECEIVED OR PAID BY HIM RELATABLE TO THE ANNEXURES SHOWN. THE OTHER OBJEC TION OF THE LD. CIT DR THAT THE QUESTIONS PUT FORTH IN THE CROSS-EXAMINATION SP ECIFICALLY QUESTION 14 & 15 WERE ALSO VAGUE. WE FIND THAT THE ARGUMENTS OF THE LD. AR THAT THESE ARE THE EXTRACTS OF THE STATEMENT OF SH.S.K.GUPTA RECORDED AT THE TIME OF THE SEARCH ARE CORRECT AND THE LD. CIT DR IS MISTAKEN IN HER ARGUM ENTS TO CONTEND THAT THE QUESTIONS NO-14 & 15 EXTRACTED IN THE IMPUGNED ORDE R ARE VAGUE QUESTIONS PUT FORTH DURING THE CROSS EXAMINATION. IT IS SEEN THA T THE ASSESSEE IN BOTH THE YEARS HAS FILED A PAPER BOOKS RUNNING INTO 71 PAGES AND 8 7 PAGES RESPECTIVELY AND NONE OF THE PARTIES HAVE CONSIDERED IT NECESSARY OR EXPEDIENT TO REFER TO ANY DOCUMENT OR FACT THEREIN. AS AN ILLUSTRATION WE EX TRACT THE INDEX FROM ITA NO- 5516/DEL/2012 WHICH IS MORE OR LESS IDENTICAL TO TH E INDEX FILED IN ITA NO- 5517/DEL/2012:- IN ITA NO-5516/DEL/2012 S.NO. PARTICULARS PAGE NO 01. SUBMISSION 01-09 02. STATEMENT OF ASSESSEE RECORDED AT HOME 10-13 03. STATEMENT ON ASSESSEE RECORDED AT OFFICE OF A SSESSEE 14-30 04. PANCHNAMA 31-34 05. STATEMENT OF ASSESSEE RECORDED ON 25.04.2007 35-39 6. ANNEXURE A - 31 OF PARTY 5 SEIZED FROM THE PREMISES OF 40-41 22 I.T.A .NO.-5516 & 5517/DEL/2012 S K GUPTA DURING THE COURSE OF SEARCH & SEIZURE OPERATION ON 12.12.2006 7. ASSESSMENT ORDER UNDER SECTION 143(3) OF THE I,T ACT, 42- 47 1961 OF ANIL KHANDELWAL FOR THE ASSESSMENT YEAR 2006-07 PASSED BY THE ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 9, NEW DELHI 8. STATEMENT RECORDED ON CROSS EXAMINATION OF SH.S. K 48-49 GUPTA AT THE OFFICE 35 OF DCLT, CC-9, NEW DELHI. 09. COPY OF REMAND REPORT 50-52 10. APPELLATE ORDER UNDER SECTION 143(3) OF THE INCOME TAX 53-71 ACT, 1961 OF ASSESSEE FOR THE ASSESSMENT YEAR 2006-07 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - XXXII, NEW DELHI IN ITA NO-5517/DEL/2012 S.NO. PARTICULARS PAGE NO 01. SUBMISSION 01-09 02. STATEMENT OF ASSESSEE RECORDED AT HOME 10-13 03. STATEMENT OF ASSESSEE RECORDED AT OFFICE OF A SSESSEE 14-30 04. PANCHNAMA 31-34 05. STATEMENT OF ASSESSEE RECORDED ON 25.04.2007 35-39 06. ANNEXURE A - 33 OF PARTY 5 SEIZED FROM THE PR EMISES 40-62 OF S K GUPTA DURING THE COURSE OF SEARCH & SEIZURE OPERATION AT HIS PREMISES ON 12.12.2006 7. ASSESSMENT ORDER UNDER SECTION 143(3) OF THE I.T 6 3-66 ACT, 1961 OF ASSESSEE FOR THE ASSESSMENT YEAR 2007-08 PASSED BY THE ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 9, NEW DELHI 8. STATEMENT RECORDED ON CROSS EXAMINATION OF 67-68 SH. S.K. GUPTA AT THE OFFICE OF DCLT, CC-9, NEW DEL HI. 09. COPY OF REMAND REPORT 69-70 10. APPELLATE ORDER UNDER SECTION 143(3) OF THE INCOME TAX 71-87 ACT, 1961 OF ASSESSEE FOR THE ASSESSMENT YEAR 2007-08 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - XXXII, NEW DELHI 7.1. WE FIND THAT NO EVIDENCE HAS BEEN PLACED BEFOR E US NOR ANY COGENT ARGUMENT HAS BEEN RAISED BEFORE US SO AS TO SHOW TH AT ON FACTS THE VIEW TAKEN BY THE CIT(A) WAS NOT CORRECT. IN THE ABSENCE OF ANY SPECIFIC INFIRMITY IN THE IMPUGNED ORDER OR RELIANCE PLACED UPON ANY EVIDENCE UPSETTING THE VIEW TAKEN, WE FIND THAT THE DEPARTMENT HAS FAILED TO OFFER ANY MEANINGFUL ARGUMENT IN SUPPORT OF ITS CLAIM. NO REASONS WHICH CAN BE LEGA LLY ACCEPTED SO AS TO REMAND 23 I.T.A .NO.-5516 & 5517/DEL/2012 THE MATTER HAVE ALSO BEEN PLACED BEFORE US. THUS I N THE LIGHT OF THE ARGUMENTS ADVANCED BEFORE US BEING SATISFIED BY THE REASONING AND FINDING ARRIVED AT IN THE IMPUGNED ORDER, WE ARE OF THE VIEW THAT THE DEPARTM ENTAL APPEAL HAS NO MERIT. WE FURTHER FIND THAT THE FINDING ARRIVED AT IN THE IMPUGNED ORDER IS FORTIFIED BY THE PRINCIPLE LAID DOWN IN THE JUDGEMENT OF THE HON BLE BOMBAY HIGH COURT IN THE CASE OF ACIT VS LATA MANGESHKAR (1973) 97 ITR 6 96 (BOM.). A PERUSAL OF THE SAME SHOWS THAT IN THE FACTS OF THAT CASE RELIA NCE PLACED BY THE REVENUE ON THE STATEMENT OF TWO WITNESSES WAS CONSIDERED TO BE NOT RELEVANT FOR MAKING AN ADDITION IN THE HANDS OF THE ASSESSEE THEREIN. IT IS SEEN THAT WHEREAS ONE OF THE WITNESSES WAS CONSIDERED TO BE A PERSON WHO COULD N OT HAVE ANY KNOWLEDGE THE OTHER WITNESS WHO THOUGH WAS A PARTNER IN THE CONC ERNED FIRM HAD GIVEN A STATEMENT THAT HE HAD MADE PAYMENTS TO THE SINGER I N BLACK. THEIR LORDSHIPS WERE PLEASED TO OBSERVE IN THE FACTS OF THAT CASE T HAT THE STATEMENT AT BEST COULD AROUSE SUSPICION BUT SUSPICION COULD NOT TAKE PLAC E OF PROOF AND IN THE ABSENCE OF PROOF, THE STATEMENT WAS DISCARDED. WE ALSO FIN D THAT THE ORDER OF THE CO- ORDINATE BENCH DATED 07.02.2013 RELIED UPON BY THE ASSESSEE IN DCIT VS YASHPAL NARENDRA KUMAR IN ITA NO-5340 TO 5342/DEL/2012 ALSO SUPPORTS THE CASE OF THE ASSESSEE FULLY. THE CO-ORDINATE BENCH THEREIN HELD THAT ADDITION ON THE BASIS OF STATEMENT OF THE THIRD PARTY WITHOUT ANY CORROBORAT IVE EVIDENCE IS NOT TENABLE. 7.2. ACCORDINGLY FOR THE DETAILED REASONS GIVEN HER EINABOVE, WE FIND THAT THERE IS NO MERIT IN THE DEPARTMENTAL APPEAL AND THE SAME IS DISMISSED ACCORDINGLY. 8. IN THE RESULT ITA NO-5516/DEL/2012 IS DISMISSED. 8.1. NO SEPARATE ARGUMENTS HAVE BEEN ADVANCED BY TH E PARTIES IN ITA NO- 5517/DEL/2012 AS THE CONSISTENT STAND OF THE PARTIE S BEFORE THE BENCH HAS BEEN THAT FACTS AND CIRCUMSTANCES REMAIN IDENTICAL TO IT A NO-5516/DEL/2012 AND THE FINDING THEREIN WOULD APPLY TO 2007-08 A.YEAR IN EQ UAL FORCE. CONSIDERING THE FACTS WHICH WE HAVE BRIEFLY TOUCHED IN PARA 2.3 OF THIS ORDER FOLLOWING THE 24 I.T.A .NO.-5516 & 5517/DEL/2012 REASONING AND FINDING ARRIVED AT IN ITA NO-5516/DEL /2012 THE FINDING ARRIVED AT IN THE IMPUGNED ORDER IS UPHELD. ACCORDINGLY ITA N O-5517/DEL/2012 IS ALSO DISMISSED. 9. IN THE RESULT ITA NOS. 5516 & 5517/DEL/2012 ARE DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 18 TH OF JULY 2014. SD/- SD/- (T.S.KAPOOR) (DIVA SINGH) ACCOUNTANT MEMBER JUDIC IAL MEMBER DATED:- 18/07/2014 *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRA R ITAT NEW DELHI