DCIT, Bangalore V. Sri. Prashanth Bafna, Bangalore

ITA 56/BANG/2013

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8440 (ITAT-BANGALORE)
• Duration Of Justice: 4 year(s) 2 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 19-10-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 11-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY KUMAR BENGALURU
• Assessee Lawyers: PRASSAN CHAND OSTWAL
• Keywords: Income from undisclosed sources; Loose papers; Document seized; Documents seized
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ITA NOS. A.Y. APPELLANT VS. RESPONDENTS 56/BANG/2013 2007-08 THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(2), BANGALORE. SHRI PRASHANTH SAMPATLAL BAFNA, DHARIWAL INDUSTRIES LTD., NO.2,3 & 4, VILLAGE SING SANDRA, HOSUR ROAD, BANGALORE 560 058. PAN: ABXPB 9409N 57/BANG/2013 2008-09 58/BANG/2013 2004-05 THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(2), BANGALORE. SHRI JEEVAN BANSILAL SANCHETI, FLAT NO.302, SHALAPURIYA ARISTOCRACY, 14 TH CROSS, I PHASE, NEAR SIDDA KALYAN MANDAP, J.P. NAGAR, BANGALORE. PAN: ABVPS 5584D 59/BANG/2013 2005-06 60/BANG/2013 2006-07 61/BANG/2013 2007-08 62/BANG/2013 2008-09 CO NOS. A.Y. CROSS OBJECTORS VS. RESPONDENT 74/BANG/2013 [IN ITA NO. 56/B/13] 2007-08 SHRI PRASHANTH SAMPATLAL BAFNA, BANGALORE 560 058. PAN: ABXPB 9409N THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(2), BANGALORE. 75/BANG/2013 [IN ITA NO. 57/B/13] 2008-09 ITA NOS.56 TO 62/BANG/2013 & CO NOS.74 TO 80/BANG/2013 PAGE 2 OF 13 76/BANG/2013 [IN ITA NO. 58/B/13] 2004-05 SHRI JEEVAN BANSILAL SANCHETI, BANGALORE. PAN: ABVPS 5584D THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(2), BANGALORE. 77/BANG/2013 [IN ITA NO. 59/B/13] 2005-06 78/BANG/2013 [IN ITA NO. 60/B/13] 2006-07 79/BANG/2013 [IN ITA NO. 61/B/13] 2007-08 80/BANG/2013 [IN ITA NO. 62/B/13] 2008-09 APPELLANT BY : SHRI SANJAY KUMAR, CIT(DR)(ITAT)-3 BENGALURU RESPONDENTS BY : SHRI PRASSAN CHAND OSTWAL, CA DATE OF HEARING : 28.02.2017 DATE OF PRONOUNCEMENT : 31.03.2017 O R D E R PER SUNIL KUMAR YADAV, JUDICIAL MEMBER THESE APPEALS ARE PREFERRED BY THE REVENUE AGAI NST THE RESPECTIVE ORDER OF THE CIT(APPEALS). THE ASSESSES HAVE ALSO FILED CROSS OBJECTIONS. SINCE THE APPEAL OF REVENUE AND CROSS OBJECTIONS WERE HEARD TOGETHER, THESE ARE BEING DISPOSED OF THROUGH THIS CONSOLIDATED ORDER. 2. THE FACTS IN BRIEF LEADING TO THE ADDITIONS IN T HE HANDS OF THE ASSESSES ON PROTECTIVE BASIS BORNE OUT FROM THE REC ORD ARE THAT A SEARCH ITA NOS.56 TO 62/BANG/2013 & CO NOS.74 TO 80/BANG/2013 PAGE 3 OF 13 AND SEIZURE OPERATION WAS CONDUCTED IN THE GROUP CO NCERNS OF M/S. DHARIWAL & FAMILY AND ALSO THE RESIDENTIAL PREMISES OF THE ASSESSEE U/S. 132 OF THE INCOME-TAX ACT, 1961 [HEREINAFTER CALLED THE ACT] ON 20.01.2010. IN RESPONSE TO NOTICES ISSUED U/S. 153 A OF THE ACT, THE ASSESSEES HAD FILED THEIR RETURN OF INCOME. DURING THE COURSE OF SEARCH IN THE PREMISES OF SHRI MITULAL ON 09.10.2009 IN CONNE CTION WITH SEARCH U/S. 132 IN THE CASE OF M/S. DHARIWAL GROUP CONCERNS, WH ERE CERTAIN DOCUMENTS WERE FOUND AND SEIZED AND ARE STATED TO BE BELONGIN G TO MR. SOHANRAJ MEHTA, WHO HAS TAKEN C&F AGENCY OF DHARIWAL GROUP, THE ASSESSES WHO WERE EMPLOYEES OF DHARIWAL GROUP AT FACTORY IN BANG ALORE WERE ALSO COVERED U/S. 132 OF THE ACT. THE SEIZED PAPER (SEI ZED FROM THE PREMISES OF SHRI MITULAL) SUGGESTED THAT MR. SOHANRAJ MEHTA HAD MADE PAYMENTS TO VARIOUS PARTIES AND NAME OF THE ASSESSES WERE ALSO REFLECTED THEREIN. THE AMOUNT REFLECTED IN THE SEIZED PAPERS IN THE NAME O F ASSESSES ARE AS UNDER:- 1. SHRI JEEVAN BANSILAL SANCHETI A.YS. AMOUNT 2004-05 7,97,00,000 2005-06 9,27,00,000 2006-07 12,92,50,000 2007-08 22,05,50,000 2008-09 17,77,77,000 2. SHRI PRASHANTH SAMPATLAL BAFNA A.YS. AMOUNT 2007-08 5,92,85,000 2008-09 12,65,55,000 ITA NOS.56 TO 62/BANG/2013 & CO NOS.74 TO 80/BANG/2013 PAGE 4 OF 13 3. SHRI SOHANRAJ MEHTA IN HIS STATEMENT DATED 10.10 .2009 RECORDED ON OATH HAD STATED THAT THESE AMOUNTS WERE PAID TO THE ASSESSES ON THE INSTRUCTION OF DIRECTORS OF M/S. DHARIWAL INDUSTRIE S LTD. IN THIS REGARD, THE ASSESSEES WERE ALSO QUESTIONED, BUT THEY HAVE DENIE D RECEIVING ANY AMOUNT FROM MR. SOHANRAJ MEHTA. SHRI SOHANRAJ MEH TA HAS CONFIRMED THAT SEIZED MATERIAL BELONGED TO HIM AND CONTAINED DETAI LS OF GUTKA BUSINESS EFFECTED BY HIM ON COMMISSION BASIS ON THE PRODUCTS OF M/S. DHARIWAL INDUSTRIES LTD. IN HIS STATEMENT RECORDED SUBSEQUE NTLY ON 15.10.2009, MR. SOHANRAJ MEHTA REITERATED THE FIGURES OF SEIZED MAT ERIAL REFLECTED UNACCOUNTED SALES OF GUTKA BELONGING TO M/S. DHARIW AL INDUSTRIES LTD. 4. ON THE BASIS OF THE SAID STATEMENT, THE AO HAS M ADE THE PROTECTIVE ASSESSMENTS IN THE HANDS OF ASSESSES AND MADE THE P ROTECTIVE ADDITION OF THE AFORESAID AMOUNT REFLECTED IN THE SEIZED DOCUME NTS. 5. BOTH THE ASSESSES PREFERRED THEIR APPEAL BEFORE THE CIT(APPEALS) WITH THE SUBMISSION THAT THEY HAVE NOT RECEIVED ANY AMOUNT FROM MR. SOHANRAJ MEHTA. MORE OVER IT WAS ALSO STATED THAT THIS MONEY RATHER BELONGS TO M/S. DHARIWAL INDUSTRIES LTD. AND NOT TO THE ASSESSES. THEREFORE, NO ADDITION IN THE HANDS OF ASSESSES WER E CALLED FOR. 6. FINDING FORCE IN THE CONTENTIONS OF THE ASSESSES , THE CIT(APPEALS) HAS DELETED THE ADDITION MADE ON PROTECTIVE BASIS I N THE HANDS OF ITA NOS.56 TO 62/BANG/2013 & CO NOS.74 TO 80/BANG/2013 PAGE 5 OF 13 ASSESSES. WHILE DOING SO, THE CIT(APPEALS) HAS OBS ERVED THAT MERE RECORDING OF NAME OF ASSESSES ON A PIECE OF PAPER F OUND IN THE PREMISES OF ONE, MR. MITULAL SUGGESTING THAT SOME PAYMENTS OF D HARIWAL GROUP HAVE BEEN EFFECTED THROUGH THE ASSESSES WHO ARE EMPLOYEE S DOES NOT MERIT ASSESSMENT IN THE HANDS OF THE ASSESSES. 7. AGGRIEVED, THE REVENUE HAS PREFERRED APPEALS BEF ORE THE TRIBUNAL WITH THE SUBMISSION THAT THE SEIZED MATERIAL CLEARL Y SPEAKS THAT SUBSTANTIAL AMOUNT STATED IN THE SLIP WAS PAID TO THE ASSESSES AND NOW IT IS FOR THE ASSESSES TO EXPLAIN WHERE THE AMOUNT GOES IF HE HAS NOT RETAINED IT. 8. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER H AND, HAS SUBMITTED THAT THE ASSESSEES HAVE DENIED THE RECEIPT OF ANY A MOUNT FROM MR. SOHANRAJ MEHTA. MORE OVER, THE AO WAS ALSO OF THE VIEW THAT WHENEVER ANY AMOUNT IS PAID TO THE ASSESSES, IT WAS PAID ON BEHALF OF DHARIWAL INDUSTRIES LTD., MEANING THEREBY, EITHER THE AMOUNT REFLECTED IN SEIZED MATERIAL BELONGS TO SHRI SOHANRAJ MEHTA OR DHARIWAL INDUSTRIES LTD. THE ASSESSES ARE MERELY EMPLOYEES OF DHARIWAL INDUSTRIE S LTD. IF IT IS HELD THAT ANY AMOUNT WAS RECEIVED BY THE ASSESSES, IT WAS REC EIVED ONLY ON BEHALF OF DHARIWAL INDUSTRIES LTD. THEREFORE, NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSES AT ALL. HE ALSO PLACED RELIANCE UP ON THE ORDERS OF THE TRIBUNAL IN THE CASE OF SHRI SOHANRAJ MEHTA OF THIS BENCH OF THE TRIBUNAL AND IN THE CASE OF DHARIWAL INDUSTRIES LTD. OF THE PUNE BENCH OF THE TRIBUNAL. THE ISSUE WAS EXAMINED IN THE CASE OF D HARIWAL INDUSTRIES LTD. ITA NOS.56 TO 62/BANG/2013 & CO NOS.74 TO 80/BANG/2013 PAGE 6 OF 13 AND THE TRIBUNAL HAS HELD THAT SHRI SOHANRAJ MEHTA MIGHT BE INDULGING IN PARALLEL BUSINESS SINCE THE PRODUCT OF THE COMPANY WAS BRANDED PRODUCT. IN SUPPORT OF THIS FINDINGS, THE TRIBUNAL HAS RELIE D UPON VARIOUS EVIDENCES FILED BEFORE IT AND THE PROTECTIVE ADDITIONS MADE O N THE BASIS OF SEIZED MATERIAL WERE DELETED IN THE NAME OF OTHER PERSONS WHOSE NAMES WERE REFLECTED IN THE LOOSE PAPERS. THE RELEVANT OBSERV ATIONS OF THE TRIBUNAL IS REFLECTED IN PARAS 129 TO 140 OF ITS ORDER, WHICH A RE EXTRACTED HEREUNDER:- 129. WE FIND THE ASSESSEE FROM THE VERY BEGINNIN G WAS STATING THAT SHRI SOHANRAJ MEHTA MIGHT BE INDULGING IN PARA LLEL BUSINESS SINCE THE PRODUCT OF THE COMPANY WAS A BRANDED PROD UCT. HE MIGHT BE INDULGING IN CLANDESTINE MANUFACTURING OF GUTKHA AND PAN MASALA. HOWEVER, THE REVENUE AUTHORITIES HAVE R EJECTED THE ABOVE CONTENTION OF THE ASSESSEE ON THE GROUND THAT THERE WAS NO OTHER STOCK FOUND ON THE DATE OF SEARCH OTHER THAN THAT OF M/S. DIL FROM THE PREMISES OF SHRI SOHANRAJ MEHTA. FURTH ER, NO OTHER EVIDENCE WAS GIVEN BY THE ASSESSEE TO SUBSTANTIATE SUCH CLAIM. AT THE INSTANCE OF THE BENCH, THE ASSESSEE HAS FILED C ERTAIN EVIDENCES IN THE FORM OF COMPLAINT TO THE POLICE DEPARTMENT, NEWSPAPER ARTICLES PUBLISHED IN VARIOUS NEWSPAPERS REGARDING SPURIOUS MARKETING OF GUTKHA OF THE ASSESSEE COMPANY ETC. AN D ALSO COPY OF THE CIVIL COURT, CHENNAI. WE FIND FROM THE VARIO US EVIDENCES FURNISHED THAT THE ASSESSEE VIDE LETTER DATED 09-10 -1996 HAS ADDRESSED A LETTER TO THE POLICE INSPECTOR, VP ROAD , GIRGAON, BOMBAY ON 09-10-1996 REGARDING SUPPLY OF COUNTERFEI T MANIKCHAND GUTKHA. A NEWSPAPER REPORT PUBLISHED IN MALAI MALLAR (TAMIL DAILY) DATED 11-10-1997 SHOWS THE MAN UFACTURING OF DUPLICATE PAN MASALA AND TEA DUST FOR WHICH 3 PE RSONS WERE ARRESTED. SIMILARLY, ANOTHER NEWS ARTICLE PUBLISHED ON 11-10-1997 IN VIKATAN NEWSPAPER (TAMIL) SHOWS SEIZURE OF 20 BO XES OF SPURIOUS PAN MASALA AND GUTKHA BY THE POLICE. THE V ARIOUS FIR COPIES FILED SHOW SALE OF SPURIOUS PAN MASALA AND G UTKHA OF THE ASSESSEES BRAND AT HYDERABAD, JAISINGHPUR, TIRUCHY , KANPUR, MAHABUBNAGAR ETC. ALTHOUGH NO FIR COPY HAS BEEN FIL ED AT BANGALORE OR IN THE STATE OF KARNATAKA, THE SUBMISS ION OF THE LD. COUNSEL THAT SPURIOUS PAN MASALA AND GUTKHA UNDER T HE BRAND ITA NOS.56 TO 62/BANG/2013 & CO NOS.74 TO 80/BANG/2013 PAGE 7 OF 13 NAME OF THE ASSESSEE COMPANY WAS BEING PRODUCED AND SOLD IN THE MARKET CANNOT BE SIMPLY BRUSHED ASIDE. 130. SO FAR AS THE FINDING OF THE REVENUE AUTHORIT IES THAT THE PROFIT GENERATED FROM SUPPRESSED PRODUCTION AND SAL E WAS DIVERTED TO VARIOUS PERSONS WHOSE NAMES APPEAR IN T HE SEIZED DOCUMENTS IS CONCERNED, WE FIND THE DIFFERENT BENCH ES OF THE TRIBUNAL HAVE DELETED SUCH ADDITION MADE IN THEIR H ANDS. WE FIND THE BANGALORE BENCH OF THE TRIBUNAL IN THE CASE OF CIT VS. H.S. CHANDRAMOULI VIDE ITA NO.1551/BANG/2012 ORDER DATED 20-08- 2013 HAS UPHELD THE ORDER OF THE CIT(A) IN DELETING THE ADDITION OF RS.22,75,000/- WHICH WAS ADDED BY THE AO ON ACCO UNT OF RECEIPT OF THE ABOVE SUM FROM SHRI SOHANRAJ MEHTA, C&F AGENT OF M/S. DIL FOR KARNATAKA REGION. THE LUCKNOW BENCH OF THE TRIBUNAL IN THE CASE OF MOHD. YAKUB PERFUMERS PVT. LTD. VIDE ITA NO.388/LKW/2013 ORDER DATED 10-12-2014 HAS UPHE LD THE ORDER OF THE CIT(A) IN DELETING THE ADDITION OF RS. 50 LAKHS WHICH WAS ADDED BY THE AO ON ACCOUNT OF ENTRY FOUND IN TH E DOCUMENTS OF SHRI SOHANRAJ MEHTA, C&F AGENT OF RMD GROUP AT BANGALORE. THE LUCKNOW BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS. PAVAN KUMAR AGARWAL VIDE ITA NO.413/LKW/20 12 AND CO NO.70/LKW/2012 ORDER DATED 16-02-2015 HAS UP HELD THE ORDER OF THE CIT(A) IN DELETING THE ADDITION OF RS. 1,13,40,000/- MADE BY THE AO ON ACCOUNT OF ADDITION ON THE BASIS OF SEIZED DOCUMENT OF SHRI SOHANRAJ MEHTA. THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF M/S. BHOLANATH RADHAKRISHNA VIDE ITA NO.5149/DEL/2012 ORDER DATED 15-04-2013 HAS UPHELD THE ORDER OF THE CIT(A) IN DELETING THE ADDITION OF RS.9 CROR ES MADE BY THE AO ON THE BASIS OF ENTRIES FOUND IN THE BOOKS OF SH RI SOHANRAJ MEHTA, C&F AGENT FOR KARNATAKA REGION OF RMD GROUP. THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF PRADEEP A RUN RUNWAL REPORTED IN 149 ITR 548 HAS ALSO DELETED THE ADDITI ON MADE BY THE AO AND UPHELD BY THE CIT(A) ON ACCOUNT OF ADDIT IONS MADE ON THE BASIS OF THE SEIZED PAPERS FROM SHRI SOHANRA J MEHTA, C&F AGENT OF RMD GROUP. 131. BASED ON THE ABOVE DECISIONS, THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF SHRI VINIT RANAWAT VIDE ACI T VIDE ITA NOS. 1105 AND 1106/PN/2013 ORDER DATED 12-06-2015 F OR A.YRS. 2006-07 AND 2007-08 HAS DELETED THE ADDITION OF RS. 21 CRORES MADE IN THE HANDS OF THE ASSESSEE ON ACCOUNT OF LOO SE PAPERS FOUND DURING THE COURSE OF SEARCH IN THE CASE OF SH RI SOHANRAJ ITA NOS.56 TO 62/BANG/2013 & CO NOS.74 TO 80/BANG/2013 PAGE 8 OF 13 MEHTA, C&F AGENT OF M/S. DIL FOR KARNATAKA REGION. THUS, WE FIND SOME FORCE IN THE SUBMISSION OF THE LD. COUNSE L FOR THE ASSESSEE THAT THE DIFFERENT BENCHES OF THE TRIBUNAL HAVE DELETED THE ADDITIONS MADE IN THEIR HANDS ON THE BASIS OF S O CALLED DEPLOYMENT OF FUNDS BY THE ASSESSEE COMPANY OUT OF THE GENERATION OF UNACCOUNTED INCOME OUT OF SUPPRESSED TURNOVER. 132. AS MENTIONED EARLIER, NO INCRIMINATING DOCUME NTS IN SHAPE OF ANY UNACCOUNTED PURCHASE, UNACCOUNTED SALE , UNACCOUNTED TRANSPORT RECEIPT WAS FOUND EITHER DURI NG THE COURSE OF SEARCH AT THE PLACE OF SHRI SOHANRAJ MEHTA/SHRI MITHULAL OR AT THE PREMISES OF THE ASSESSEE. IF THE EXTENT OF UNAC COUNTED PRODUCTION AND UNACCOUNTED TURNOVER AS COMPUTED BY THE AO IS BELIEVED, THEN ATLEAST 700 TO 800 TRUCKS ARE REQUIR ED, A FINDING GIVEN BY THE COMMISSIONER, CENTRAL EXCISE. THEREFOR E, WE FIND FORCE IN THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT IF THE ASSESSEE WAS INDULGING IN THE CLANDESTINE MANUF ACTURING OF GUTKHA, THEN ATLEAST SOME EVIDENCE COULD HAVE BEEN FOUND WHICH IS NOT IN THE INSTANT CASE. EVEN THE COMMISSIONER, CENTRAL EXCISE HAS ALSO GIVEN HIS FINDINGS THAT THERE WAS NO UNACC OUNTED PRODUCTION. IN OUR OPINION, THE QUESTION OF UNACCOU NTED TURNOVER WILL ARISE ONLY WHEN THERE IS UNACCOUNTED PRODUCTIO N. SINCE ONE GOVERNMENT AUTHORITY, AFTER THOROUGH INVESTIGATION, HAS GIVEN A FINDING THAT THERE IS NO UNACCOUNTED PRODUCTION AND CLEARANCE OF SUCH UNACCOUNTED GUTKHA TO THE C&F AGENT, THEREFORE , ESTIMATION OF HUGE UNACCOUNTED PRODUCUCTION AND SAL E THEREOF AS DETERMINED BY THE AO IN THE BODY OF THE ASSESSMENT ORDER AND UPHELD BY THE CIT(A), IN OUR OPINION IS UNCALLED FO R. 133. THERE IS ANOTHER ASPECT WHICH WE HAVE NOTICE D IS REGARDING DECODING OF THE FIGURES. WE FIND THERE AR E CERTAIN CHITS WHICH ARE FOUND DURING THE COURSE OF SEARCH IN THE PLACE OF SHRI SOHANRAJ MEHTA/SHRI MITHULAL, COPIES OF WHICH ARE P LACED AT PAPER BOOK PAGES 41 TO 102 OF THE PAPER BOOK. THESE CHITS SHOW AMOUNTS WRITTEN BOTH IN WORDS AS WELL AS IN FIGURES . THEREFORE, WHEN THE CHITS CONTAIN THE AMOUNTS WRITTEN BOTH IN WORDS AND FIGURES, THEREFORE, IN ABSENCE OF ANY COGENT EVIDEN CE IN THE HANDS OF THE DEPARTMENT, IT IS NOT PROPER TO DECODE THE S AME BY ADDING TWO MORE ZEROS. 134. SO FAR AS THE STATEMENT OF VARIOUS PERSONS RE CORDED DURING THE COURSE OF SEARCH IN THE CASE OF SHRI SOHANRAJ M EHTA ARE ITA NOS.56 TO 62/BANG/2013 & CO NOS.74 TO 80/BANG/2013 PAGE 9 OF 13 CONCERNED, THE PRESUMPTIONS U/S.132(4A) WILL APPLY TO THE PERSON WHO IS SEARCHED AND IN WHOSE CUSTODY THE PAPERS ARE FOUND. THEREFORE, WE FIND MERIT IN THE SUBMISSION OF THE L D. COUNSEL FOR THE ASSESSEE THAT LOOSE PAPERS FOUND WITH SHRI SOHA NRAJ MEHTA CANNOT BE PRESUMED TO BE BELONGING TO THE ASSESSEE OR REFLECTING THE BUSINESS TRANSACTION OF THE ASSESSEE. IT HAS BE EN HELD IN VARIOUS DECISIONS THAT THE PRESUMPTION U/S.132(4A) IS APPLICABLE ONLY AGAINST THE PERSON FROM WHOSE POSSESSION THE B OOKS OF ACCOUNT OR OTHER DOCUMENTS WERE FOUND AND NOT AGAIN ST ANY OTHER PERSON. IT HAS BEEN HELD THAT AS PER SECTION 132(4A ) WHERE ANY BOOKS OF ACCOUNT OR DOCUMENT IS FOUND IN THE POSSES SION AND CONTROL OF ANY PERSON IN THE COURSE OF THE SEARCH, IT IS TO BE PRESUMED THAT THEY BELONG TO SUCH PERSON. THUS, CLE ARLY THE PRESUMPTION IS IN RESPECT OF THE PERSON FROM WHOM T HEY WERE FOUND. IN THE INSTANT CASE, SUCH INCRIMINATING DOCU MENTS WERE FOUND FROM THE POSSESSION OF SHRI SOHANRAJ MEHTA/SH RI MITHULAL. THEREFORE, WE FIND FORCE IN THE SUBMISSION OF THE L D. COUNSEL FOR THE ASSESSEE THAT PRESUMPTION U/S.132(4A) WILL BE A PPLICABLE TO SHRI SOHANRAJ MEHTA AND NOT TO THE ASSESSEE COMPANY . 135. ANOTHER ASPECT TO BE CONSIDERED IS NON-FINDIN G OF ANY UNACCOUNTED CASH OR ASSET OR INVESTMENT OF SUCH HUG E AMOUNTS FROM GENERATION OF SUCH HUGE UNACCOUNTED MONEY. NO DOUBT THE COURTS HAVE HELD THAT IF EVIDENCE OF UNDISCLOSED IN COME IS FOUND THEN CORRESPONDING ASSET/EXPENSES NEED NOT BE PROVE D. HOWEVER, IF SUCH UNDISCLOSED INCOME IS DETERMINED ON THE BAS IS OF ESTIMATION, AS IN THE INSTANT CASE, THEN FINDING OF SUCH CORRESPONDING ASSET COULD HAVE GIVEN SOME CREDENCE TO SUCH ESTIMATED INCOME. HOWEVER, THE SAME IS NOT THERE IN THE INSTANT CASE. 136. WE ALSO FIND FORCE IN THE SUBMISSION OF THE L D. COUNSEL FOR THE ASSESSEE THAT PAPERS FOUND FROM SHRI SOHANR AJ MEHTA IS FOR THE PERIOD FROM JANUARY 2003 TO FEBRUARY, 2008. THE SEARCH TOOK PLACE ON 09-10-2009 AT SHRI MEHTAS PLACE. HOW EVER, FOR THE PERIOD FROM MARCH 2008 TILL THE DATE OF SEARCH, NO LOOSE PAPERS WERE FOUND. THEREFORE, IF THE ASSESSEE WAS HAVING S UCH ROARING UNACCOUNTED BUSINESS, THERE WAS NO REASON TO STOP SUCH LUCRATIVE BUSINESS FROM MARCH 2008 ONWARDS. SECONDLY, IF THE INFERENCE IS THAT SHRI SOHANRAJ MEHTA HAS ALREADY GIVEN THE ACCO UNT FOR THIS PERIOD TO THE ASSESSEE AND THEREFORE HE HAS DESTROY ED THE PAPERS, THERE IS NO REASON AS TO WHY HE SHOULD HAVE MAINTAI NED THE PAPERS ITA NOS.56 TO 62/BANG/2013 & CO NOS.74 TO 80/BANG/2013 PAGE 10 OF 13 FOR THE OLD PERIOD. THIS DEFIES LOGIC. 137. ANOTHER ASPECT WHICH THE LD. COUNSEL FOR THE ASSESSEE HAS ARGUED AND WHICH IN OUR OPINION FINDS FORCE IS THAT THERE IS NO SIGNATURE OF CONFIRMATION BY THE ASSESSEE IN THE ST ATEMENTS. FOR EXAMPLE PAGE NO.204 OF THE PAPER BOOK IS THE STATEM ENT FOR THE PERIOD 02-04-2003 TO 31-08-2006. THERE IS NO SIGNAT URE OF CONFIRMATION BY THE ASSESSEE ON THIS PAPER. IF THE PAPER WAS WRITTEN BY SHRI SOHANRAJ MEHTA FOR THE BENEFIT OF T HE ASSESSEE SO AS TO GIVE HIM DETAILS OF HIS ACCOUNT, HE SHOULD HA VE OBTAINED THE SIGNATURE OF THE ASSESSEE ON THIS PAPER AS A TOKEN OF CONFIRMATION. THUS, WE FIND FORCE IN THE SUBMISSION OF THE LD. CO UNSEL FOR THE ASSESSEE THAT THERE IS NO EVIDENCE THAT THE LOOSE P APERS BELONG TO THE ASSESSEE. 138. WE ALSO FIND MERIT IN THE ARGUMENTS OF THE LD . COUNSEL FOR THE ASSESSEE THAT THE ASSESSEE NORMALLY SELLS ITS P RODUCT FROM BANGALORE FACTORY TO VARIOUS C&F AGENTS IN TAMILNAD U, ANDHRA PRADESH, KERALA, SOUTH MAHARASHTRA ETC. NO PROOF TH AT THESE AGENTS HAVE TAKEN THE STOCK FROM SHRI SOHANRAJ MEHT A AND PAID MONEY TO THE ASSESSEE OR MR. MEHTA WAS FOUND. IF AL L THESE SALES ARE MADE THROUGH SHRI SOHANRAJ MEHTA IN THESE TERRI TORIES, THE ABOVE C&F AGENTS WOULD HAVE OBJECTED. SECONDLY, NO EVIDENCE THAT SHRI SOHANRAJ MEHTA MAINTAINED THE WAREHOUSES IN VARIOUS STATES WAS FOUND. THUS, IF WHAT SHRI SOHANRAJ MEHTA SAYS IS CORRECT, THESE UNACCOUNTED SALES CAN BE MADE BY SHR I SOHANRAJ MEHTA AND THAT TOO IN HIS REGION, I.E. KARNATAKA AN D ANY OTHER PRESUMPTION IS NOT POSSIBLE. 139. WE FURTHER FIND THAT THE ACCOUNTS WRITTEN BY SHRI SOHANRAJ MEHTA ARE WRITTEN FOR THE PERIOD FROM JANUARY 2003 TO FEBRUARY 2008 WHEREAS THE PAYMENT CHITS WRITTEN BY THE ASSES SEE TO SHRI SOHANRAJ MEHTA ARE FOR THE PERIOD FROM JUNE 2006 TO OCTOBER 2007. NO LETTERS FOR THE BALANCE PERIOD ARE FOUND D URING THE SEARCHES. WE THEREFORE FIND FORCE IN THE ARGUMENTS OF THE LD. COUNSEL FOR THE ASSESSEE THAT WHAT IS NOT FOUND IS PRESUMED TO BE NOT THERE AND THEREFORE SHRI SOHANRAJ MEHTA HAS NOT CORROBORATED THAT THE ASSESSEE HAS VERIFIED ALL THESE LOOSE PAPE RS FOUND WITH HIM. FURTHER, NO EVIDENCE WAS FOUND WITH THE FIGURE S MENTIONED BY THE ASSESSEE IN HIS LETTERS TO SHRI SOHANRAJ MEH TA ARE IN CODED FIGURES. NO EVIDENCE WAS FOUND THAT THE ASSESSEE HA S CHECKED AND OKAYED THE NOTINGS OF SHRI SOHANRAJ MEHTA. WE THERE FORE FIND SOME FORCE IN THE ARGUMENTS OF THE LD. COUNSEL FOR THE ASSESSEE ITA NOS.56 TO 62/BANG/2013 & CO NOS.74 TO 80/BANG/2013 PAGE 11 OF 13 THAT SHRI SOHANRAJ MEHTA HAS NOT MAINTAINED THESE ACCOUNTS/DETAILS FOR THE PURPOSE OF REPORTING TO TH E ASSESSEE OR FOR THE PURPOSE OF GIVING ACCOUNT OF UNACCOUNTED TRANSA CTIONS TO THE ASSESSEE. MERELY BECAUSE SHRI SOHANRAJ MEHTA FILED HIS RETURN DISCLOSING SOME COMMISSION AS HIS ADDITIONAL UNDISC LOSED INCOME AND THE DEPARTMENT ACCEPTED THE SAME WITHOUT EVEN M AKING PROTECTIVE ADDITION IN HIS HANDS THE SAME IN OUR OP INION CANNOT BE THE BASIS TO COMPUTE HUGE SUPPRESSED TURNOVER TO TH E TUNE OF ABOUT RS.340 CRORES AS ASSESSEES UNACCOUNTED TURNO VER ESPECIALLY WHEN NOT A SINGLE PIECE OF UNACCOUNTED P URCHASE OR SALES VOUCHER OR TRANSPORT RECEIPT OR UNACCOUNTED P URCHASE RECEIPT WAS FOUND. THIS IN OUR OPINION IS ALSO AN I NDICATOR THAT NO SUCH UNACCOUNTED BUSINESS WAS CARRIED OUT BY THE AS SESSEE AS ALLEGED BY THE AO AND UPHELD BY THE CIT(A). EVEN UN DER THE THEORY OF PROBABILITY ALSO NO SUCH UNACCOUNTED BUSI NESS IS POSSIBLE UNDER THE FACTS AND CIRCUMSTANCES DISCUSSE D ABOVE. 140. IN VIEW OF THE ABOVE, IT HAS TO BE HELD THAT THE HUGE SUPPRESSED PRODUCTION AND SUPPRESSED TURNOVER AND T HEREBY GENERATION OF HUGE UNACCOUNTED INCOME AS DETERMINED BY THE AO, IN OUR OPINION, IS INCORRECT. THEREFORE, THE AD DITION MADE BY THE AO AND PARTLY SUSTAINED BY THE CIT(A) ON ACCOUN T OF UNACCOUNTED PROFIT ON SUPPRESSED PRODUCTION AND SAL E THEREOF IS DIRECTED TO BE DELETED. 140.1 AT THE SAME TIME, IT IS ALSO AN ADMITTED FAC T THAT CERTAIN CHITS DULY SIGNED BY THE ASSESSEE WERE FOUND FROM T HE POSSESSION OF SHRI SOHRANRAJ MEHTA DURING THE COURSE OF SEARCH ON 10-10- 2009. THOSE CHITS WERE IN THE HAND WRITING OF THE A SSESSEE FOR DIFFERENT YEARS. IT IS NOT KNOWN AS TO WHY AND FOR WHAT PURPOSE THE ASSESSEE USED TO GIVE SUCH CHITS IN HIS HAND WR ITING. FURTHER, THE AMOUNT OF SUCH CHITS ACCORDING TO THE ASSESSEE IS ABOUT RS.61 LAKHS WHEREAS THE REVENUE HAS CONSIDERED THE SAME A T ABOUT RS.61 CRORES BY ADDING TWO ZEROS TO THE FIGURES. WE HAVE ALREADY HELD AT PARA NO.133 OF THIS ORDER THAT IN ABSENCE O F ANY COGENT EVIDENCE IN THE HANDS OF THE REVENUE, IT IS NOT PRO PER TO DECODE THE SAME BY ADDING TWO ZEROS. THE ARGUMENT OF THE L D. COUNSEL FOR THE ASSESSEE THAT CERTAIN SALES TAX REFUNDS WER E DUE TO BE RECEIVED BY SHRI SOHANRAJ MEHTA FOR WHICH HE HAS IS SUED CHITS TO BE HANDED OVER TO THEM IS NOT BORNE OUT OF RECORDS. CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE, IN OUR OPINI ON, ADDITION OF AN AMOUNT OF RS.20 CRORES FOR THE A.YRS. 2004-05 TO 20 08-09 WILL ITA NOS.56 TO 62/BANG/2013 & CO NOS.74 TO 80/BANG/2013 PAGE 12 OF 13 MEET THE ENDS OF JUSTICE UNDER THE FACTS AND CIRCUM STANCES OF THE CASE. WE THEREFORE DIRECT ADDITION OF RS.20 CRORES FOR THE PERIOD FROM A.YRS. 2004-05 TO 2008-09 TO BE SPREAD OVER EQ UALLY. WE HOLD AND DIRECT ACCORDINGLY. THUS, THE GROUNDS RAIS ED BY THE REVENUE ARE DISMISSED AND THE GROUNDS RAISED BY THE ASSESSEE ARE PARTLY ALLOWED. 9. WHILE MAKING THE ADDITION, THE AO WAS OF THE VIE W THAT AMOUNT REFLECTED IN THE SLIPS WERE PAID TO ASSESSES ON BEH ALF OF DHARIWAL INDUSTRIES LTD. THEREFORE, THE AMOUNT REFLECTED IN THE SLIP EI THER BELONGED TO MR. SOHANRAJ MEHTA OR DHARIWAL INDUSTRIES LTD. THE ASS ESSES BEING EMPLOYEES OF DHARIWAL INDUSTRIES LTD., HAD NO RIGHT TO RETAIN THE SAID AMOUNT. MORE OVER, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSES HAVE VEHEMENTLY DENIED ANY RECEIPT OF THE AMOUNT REFLECTED IN THE SLIPS. UNDER THESE CIRCUMSTANCES, IF THE AO IN TENDS TO MAKE AN ADDITION IN THE HANDS OF ASSESSES, HE HAS TO BRING OUT SOME MORE EVIDENCE ON RECORD TO JUSTIFY THAT THE AMOUNT REFLECTED IN T HE SLIPS WERE PAID TO THE ASSESSES AND ASSESSES HAVE RETAINED IT. IN THE ABS ENCE OF THIS EVIDENCE, WE ARE OF THE VIEW THAT THE ADDITION MADE ON PROTEC TIVE BASIS IN THE HANDS OF ASSESSES DESERVES TO BE DELETED. WE ACCORDINGLY FIND NO INFIRMITY IN THE ORDER OF THE CIT(APPEALS), WHO HAS RIGHTLY DELETED THE ADDITIONS. ACCORDINGLY, WE CONFIRM THE ORDER OF CIT(APPEALS). THE APPEALS OF THE REVENUE ARE DISMISSED. ITA NOS.56 TO 62/BANG/2013 & CO NOS.74 TO 80/BANG/2013 PAGE 13 OF 13 10. THROUGH THE CROSS OBJECTIONS, THE ASSESSES HAVE SUPPORTED THE ORDERS OF CIT(APPEALS) AND SINCE THE APPEALS OF REV ENUE ARE DISMISSED, THE CROSS OBJECTIONS HAVE BECOME INFRUCTUOUS AND WE DISMISS THE SAME. 11. IN THE RESULT, THE APPEALS OF REVENUE AND CROSS OBJECTIONS OF ASSESSES ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS 31 ST DAY OF MARCH, 2017. SD/- SD/- ( S. JAYARAMAN ) (SUNIL KUMAR YA DAV ) ACCOUNTANT MEMBER JUDIC IAL MEMBER BANGALORE, DATED, THE 31 ST MARCH, 2017. / D ESAI S MURTHY / N S / DS COPY TO: 1. APPELLANT 2. RESPONDENTS 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.