THE DCIT, 3(1), Indore V. SHRI NILESH AJMERA, Indore

ITA 563/IND/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6104 (ITAT-INDORE)
• Duration Of Justice: 2 year(s) 8 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 07-09-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 29-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARPIT GAUR CAS
• Assessee Lawyers: RAJEEV VARSHNEY; R A VERMA DRS
• Keywords: Unexplained cash credit; Unexplained investment; Unexplained expenditure; Business income; Search and seizure; Loose papers; Document seized; Opportunity of being heard; Principle of natural justice; Peak credit; Rule of consistency; Additional evidence; Corroborative evidences; Block assessment; Capital receipt; Documents seized
• Section: 69C; 143(3); 153A; 131; 68; 69

Judgement Text

NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER IT(SS)A NOS. 182 TO 184/IND/2013 ITA NO.538/IND/2013 A.YS. 2007-08 TO 2010-11 NILESH KUMAR AJMERA, INDORE PAN ACSPA 9866 A :: APPELLANT VS ACIT-3(1), INDORE :: RESPONDENT IT(SS)A NOS. 249 TO 251/IND/2013 ITA NO.563/IND/2013 A.YS. 2007-08 TO 2010-11 DCIT-3(1), INDORE :: APPELLANT VS NILESH KUMAR AJMERA, INDORE PAN ACSPA 9866 A :: RESPONDENT ASSESSEE BY SHRI ANIL KAMAL GARG AND SHRI ARPIT GAUR, CAS RESPONDENT BY SHRI RAJEEV VARSHNEY AND SHRI R.A. VERMA, DRS DATE OF HEARING 05.04.2016 DATE OF PRONOUNCEMENT 17.05.2016 NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 2 O R D E R PER SHRI D.T.GARASIA, JM THESE CROSS-APPEALS ARE FILED BY THE ASSESSEE AND R EVENUE CHALLENGING THE DIFFERENT ORDERS OF LD. CIT(A)-I, INDORE FOR THE AS SESSMENT YEARS 2007-08 TO 2010-11. BOTH THE PARTIES SUBMITTED THAT THE LEAD CASE PERTA INS TO ASSESSMENT YEAR 2008-09, THEREFORE, WE DEAL THE ASSESSMENT YEAR 2008-09 AT F IRST. ASSESSEES APPEAL IT(SS)A NO.183/IND/2013 (A.Y. 200 8-09) THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL: 1A). THAT, THE LEARNED CIT(A) GROSSLY ERRED, BOTH ON FACTS AND IN LAW, IN CONFIRMING ADDITION TO THE EXTENT OF RS.16, 48,38,000/- IN THE APPELLANTS INCOME, ON SUBSTANTIVE BASIS, AS AGAINS T THE PROTECTIVE ADDITION OF RS.41,10,00,000/- MADE BY THE LEARNED A O, ON ACCOUNT OF ALLEGED UNEXPLAINED INVESTMENT IN THE CERTAIN AGRIC ULTURAL LANDS SITUATED AT VILLAGE BHAURASLA, INDORE, MERELY ON GUESSWORK, SURMISES AND CONJECTURES, WITHOUT PROPERLY APPRECIATING AND ACCE PTING THE EXPLANATION OF THE APPELLANT. B). THAT, WITHOUT PREJUDICE TO THE ABOVE, THE LEA RNED CIT(A) GROSSLY ERRED IN CONFIRMING AN EXCESSIVE ADDITION T O EXTENT OF RS.16,48,38,000/- IN THE APPELLANT'S INCOME, WITHOU T CONSIDERING THE MATERIAL FACT THAT THE APPELLANT HAD ONLY MADE AN I NITIAL INVESTMENT OF RS.1,33,37,500/- FOR PURCHASING CERTAIN LANDS AT VI LLAGE BHAURASLA, INDORE, AND THE ENTIRE INVESTMENT OF RS.1,33,37,500 /- WAS SO MADE BY THE APPELLANT OUT OF THE FUNDS WHICH WERE AVAILABLE IN HIS HANDS, AS A CUSTODIAN OF MONEY, WHICH WERE EITHER BORROWED BY O THERS ON PROMISSORY NOTES AND REMAINED WITH THE APPELLANT OR WHICH WERE PROVIDED BY THE INVESTORS ASSOCIATED WITH THE APPEL LANT OR WHICH WERE RETAINED BY THE APPELLANT OUT OF THE PLOT BOOKING A DVANCES RECEIVED BY HIM ON BEHALF OF THE COMPANIES IN WHICH HE WAS ONE OF THE DIRECTORS. 2A). THAT, THE LEARNED CIT(A) GROSSLY ERRED, BOTH O N FACTS AND IN LAW, IN CONFIRMING ADDITION OF RS.10,63,37,500/-, M ADE BY THE LEARNED AO, IN THE APPELLANTS INCOME, BY INVOKING PROVISIO NS OF SECTION 69C OF THE INCOME-TAX ACT, 1961, ON ACCOUNT OF ALLEGED UNE XPLAINED NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 3 EXPENDITURE IN THE LAND FOR 'PHOENIX GREEN PROJECT' , A PROJECT UNDERTAKEN BY 'M/S. PHOENIX LEISURE AND LIFESTYLE P VT. LTD.', MERELY ON GUESSWORK, SURMISES AND CONJECTURES, WITHOUT PROPER LY APPRECIATING AND ACCEPTING THE EXPLANATION OF THE APPELLANT. B). THAT, WITHOUT PREJUDICE TO THE ABOVE, AS AN A LTERNATIVE GROUND, THE LEARNED ASSESSING OFFICER GROSSLY ERRED IN MAKI NG THE IMPUGNED ADDITION OF RS.10,63,37,500/- IN THE APPELLANT'S IN COME, WITHOUT GIVING ANY SET-OFF TO THE APPELLANT IN RESPECT OF AVAILABI LITY OF FUNDS IN HIS HANDS, AS A CUSTODIAN OF MONEY, WHICH WERE EITHER B ORROWED BY OTHERS ON PROMISSORY NOTES AND REMAINED WITH THE APPELLANT OR WHICH WERE PROVIDED BY THE INVESTORS ASSOCIATED WITH THE APPEL LANT OR WHICH WERE RETAINED BY THE APPELLANT OUT OF THE PLOT BOOKING A DVANCES RECEIVED BY HIM ON BEHALF OF THE COMPANIES IN WHICH HE WAS ONE OF THE DIRECTORS. 3A). THAT, THE LEARNED CIT(A) GROSSLY ERRED, BOTH O N FACTS AND IN LAW, IN CONFIRMING ADDITION TO THE EXTENT OF RS.2,8 6,00,000/-, MADE BY THE LEARNED AO, IN THE APPELLANTS INCOME, ON ACCOU NT OF ALLEGED UNEXPLAINED INVESTMENT IN CERTAIN AGRICULTURAL LAND S SITUATED AT BHOPAL. B) THAT, WITHOUT PREJUDICE TO THE ABOVE, AS AN AL TERNATIVE GROUND, THE LEARNED CIT(A) GROSSLY ERRED IN CONFIRMING THE ADDITION TO THE EXTENT OF RS.2,86,00,000/- IN THE APPELLANT'S INCOME, ON A CCOUNT OF UNEXPLAINED INVESTMENT IN CERTAIN AGRICULTURAL LANDS SITUATED A T BHOPAL, WITHOUT GIVING ANY SET-OFF TO THE APPELLANT IN RESPECT OF A VAILABILITY OF FUNDS IN HIS HANDS, AS A CUSTODIAN OF MONEY, WHICH WERE EITHER B ORROWED BY OTHERS ON PROMISSORY NOTES AND REMAINED WITH THE APPELLANT OR WHICH WERE PROVIDED BY THE INVESTORS ASSOCIATED WITH THE APPEL LANT OR WHICH WERE RETAINED BY THE APPELLANT OUT OF THE PLOT BOOKING A DVANCES RECEIVED BY HIM ON BEHALF OF THE COMPANIES IN WHICH HE WAS ONE OF THE DIRECTORS. 4A). THAT, THE LEARNED CIT(A), WHILE ADJUDICATING T HE GROUNDS RELATING TO THE ALLEGED UNEXPLAINED CASH DEPOSITS I N THE BANK ACCOUNTS OF THE APPELLANT, GROSSLY ERRED, BOTH ON FACTS AND IN LAW, IN ISSUING THE DIRECTION TO THE AO TO VERIFY THAT WHETHER OR NOT T HE SUBJECT BANK ACCOUNTS WERE DISCLOSED BY THE APPELLANT PRIOR TO S EARCH THROUGH FILING RETURN OF INCOME WITHOUT APPRECIATING THE MATERIAL FACT THAT THERE WAS NO MECHANISM PREVALENT THROUGH WHICH AN ASSESSEE COULD HAVE DISCLOSED HIS BANK ACCOUNTS THROUGH THE RETURN OF INCOME. B). THAT, WITHOUT PREJUDICE TO THE ABOVE, THE LEA RNED CIT(A), WHILE ADJUDICATING THE GROUNDS RELATING TO THE ALLEGED UN EXPLAINED CASH DEPOSITS IN THE BANK ACCOUNTS OF THE APPELLANT, GRO SSLY ERRED IN NOT CONSIDERING THE MATERIAL FACT THAT THE APPELLANT WA S ELIGIBLE FOR NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 4 EXPLAINING THE SOURCES OF CASH DEPOSITS MADE IN THE BANK ACCOUNTS OUT OF THE CASH WITHDRAWALS MADE IN THE SAME YEAR FROM THE SAME BANK ACCOUNTS IRRESPECTIVE OF THE FACT THAT WHETHER OR N OT SUCH BANK ACCOUNTS WERE DISCLOSED PRIOR TO THE DATE OF SEARCH. C). THAT, WITHOUT PREJUDICE TO THE ABOVE, THE LEA RNED CIT(A) GROSSLY ERRED IN NOT DELETING THE ADDITION AMOUNTIN G TO RS.94,18,510/- AND RS.6,40,000/- RESPECTIVELY ON ACCOUNT OF CASH D EPOSITS MADE BY THE APPELLANT WITH HIS BANK ACCOUNTS WITH THE BANK OF R AJASTHAN LTD. AND CITIBANK. 5A). THAT, THE LEARNED CIT(A) GROSSLY ERRED, BOTH O N FACTS AND IN LAW, IN CONFIRMING ADDITION TO THE EXTENT OF RS.25, 00,000/-, MADE BY THE LEARNED AO, IN THE APPELLANTS INCOME, ON ACCOUNT O F ALLEGED UNEXPLAINED INVESTMENT IN 'M/S. PHOENIX DEVCONS PVT . LTD.', MERELY ON GUESSWORK, SURMISES AND CONJECTURES, WITHOUT CONSID ERING AND ACCEPTING THE EXPLANATION OF THE APPELLANT. B) THAT, WITHOUT PREJUDICE TO THE ABOVE, THE LEARN ED CIT(A) GROSSLY ERRED, BOTH ON FACTS AND IN LAW, IN CONFIRMING ADDI TION TO THE EXTENT OF RS.25,00,000/-, IN RESPECT OF THE FUNDS ARRANGED BY THE APPELLANT FROM ONE SMT. ROSHNI DOSHI, A NON-RESIDENCE INDIAN, THRO UGH ACCOUNT PAYEE CHEQUE, FOR A COMPANY NAMELY M/S. PHOENIX DEV CONS PVT. LTD. IN WHICH THE APPELLANT WAS ONE OF THE DIRECTORS. C) THAT, WITHOUT PREJUDICE TO THE ABOVE, THE LEA RNED CIT(A) GROSSLY ERRED, IN CONFIRMING THE IMPUGNED ADDITION WITHOUT CONSIDERING THE MATERIAL FACT THAT IN RESPECT OF THE SAME SHARE APPLICATION MONEY A SIMILAR ADDITION BY MAKING ENHANCEMENT WAS MADE BY THE SAME CIT(A) IN THE HANDS OF M/S. PHOENIX DEVCONS PVT. LTD., ON SUBSTANTIVE BASIS WHICH RESULTED IN THE SAME ADDITION TWICE. 6A). THAT, THE LEARNED CIT(A) GROSSLY ERRED, BOTH O N FACTS AND IN LAW, IN CONFIRMING ADDITION TO THE EXTENT OF RS.1,0 0,00,000/-, MADE BY THE LEARNED AO, IN THE APPELLANTS INCOME, ON ACCOU NT OF UNACCOUNTED RECEIPTS MADE BY THE APPELLANT FROM 'M/S. PHOENIX D EVCONS PVT. LTD.', WITHOUT PROPERLY CONSIDERING AND ACCEPTING THE EXPL ANATION OF THE APPELLANT. B) THAT, WITHOUT PREJUDICE TO THE ABOVE, THE LEARNE D CIT(A) GROSSLY ERRED, IN CONFIRMING THE IMPUGNED ADDITION BY MISCO NSTRUING THE FACTS OF THE CASE INASMUCH HE HELD THAT THE APPELLANT HAD MA DE THE UNEXPLAINED INVESTMENT IN THE ABOVE NAMED COMPANY WHEREAS, THE LEARNED AO NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 5 MADE THE IMPUGNED ADDITION ON THE ALLEGATION THAT T HE APPELLANT MADE UNEXPLAINED RECEIPT FROM THE COMPANY. C) THAT, WITHOUT PREJUDICE TO THE ABOVE, AS ALTERNA TIVE GROUND, THE LEARNED CIT(A) GROSSLY ERRED IN NOT GIVING A DIRECT ION TO THE EFFECT THAT IF AT ALL THE APPELLANT IS FOUND TO HAVE MADE UNEXPLAI NED RECEIPTS OF RS.1,00,00,000/- FROM M/S. PHOENIX DEVCONS PVT. LTD . THEN A CORRESPONDING CREDIT FOR AVAILABILITY OF THE FUNDS EMANATED FROM SUCH RECEIPTS OUGHT TO HAVE BEEN GIVEN TO THE APPELLANT FOR EXPLAINING THE SOURCES OF UNEXPLAINED INVESTMENT ON THE THEORY OF TELESCOPING. REVENUES APPEAL IT(SS)A NO.250/IND/2013 (A.Y. 2008 -09) THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APP EAL: 1. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN DECIDING THE APPEAL AGAINST THE PRINCIPLES OF NA TURAL JUSTICE, WITHOUT AFFORDING ANY OPPORTUNITY TO THE AO OR REMANDING IT BACK IN VIOLATION OF THE DEPARTMENTAL INSTRUCTION THAT IN SEARCH ASSESSMENTS APPEAL ORDER BE PASSED EITHER BASED ON REMAND REPORT OR AFTER HEARI NG THE AO. 2. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE T HE LD. CIT(A) ERRED IN HOLDING THAT ADDITION U/S. 69D WAS NOT JUSTIFIED BECAUSE AO HAS NOT ESTABLISHED THAT THE APPELLANT HAS BORROWED SUCH LO ANS ON HUNDI AND NO HUNDI, EITHER LIVE OR DISCHARGED, WAS FOUND AND SEI ZED FROM ANY BUSINESS PREMISES OF THE GROUP AND DELETED THE ADDITION OF R S.90,24,410/-, RS.47,00,000/- RS. 12,50,000/- AND RS.35,25,000/- W HEREAS, DOCUMENTS SEIZED CLEARLY MENTIONED OF THE HUNDI DEALINGS AND THE ASSESSEE FAILED TO PROVE BEFORE THE AO OTHERWISE WITH EVIDENCES. 2.1 WHILE HOLDING SO THE LD. CIT(A) FAILED TO APPRE CIATE THAT THE TRANSACTIONS IN HUNDIES WERE CONFIRMED IN THE STATE MENTS OF NOT ONLY SH. NILESH AJMERA, THE ASSESSEE, BUT HIS EMPLOYEE SH. P ANKAJ JOSHI ALSO AND SH. NILESH AJMERA ADMITTED AND EVEN DISCLOSED INCOM E OF RS.1.45 CRORE AS BEING RECEIVED FROM ONE SH. MANISH KEDIA, HUNDI PROVIDER, AS HIS UNDISCLOSED INCOME IN A.Y. 2010-11. 2.2 WHILE HOLDING SO THE LD. CIT(A) FAILED TO CONSI DER THAT VARIOUS LOOSE PAPERS FOUND DURING THE COURSE OF SEARCH HAD DETAIL S OF HUNDI TRANSACTIONS OF MANISH KEDIA, SUSHIL GOLECHA, ROHIT SETHI, NILES H DOSHI, RAJU DOSHI, K.GOYAL ET. AL. AND IT HAD NARRATION OF ENTRIES LIK E NAME, START DATE, NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 6 AMOUNT, DURATION, FIRST RENEW DATE, END DATE, INTER EST, DALALI ETC. WHICH ESTABLISHED THE BORROWING AND REPAYMENT ON HUNDIES BEING MADE IN CASH AS POINTED OUT BY THE AO IN THE ASSESSMENT ORDER. 2.3 WHILE HOLDING SO THE LD. CIT(A) FURTHER ERRED I N HOLDING THAT THE SEIZED DAIRIES CANNOT BE TREATED AS BOOKS OF ACCOUN TS WHEREAS IN VIEW OF THE TRANSACTIONS RECORDED THEREIN BEING UNEXPLAINED THE SAID MATERIAL/DIARIES FELL IN THE INCLUSIVE DEFINITION O F BOOKS OF ACCOUNTS AS DEFINED U/S. 2(12A) OF THE I.T. ACT. 2.4 WHILE HOLDING SO THE LD. CIT (A) GROSSLY ERRED IN NOT APPRECIATING THAT TO THE COMMISSIONS ISSUED BY HIS OFFICE THE AB OVE NAMED HUNDI PROVIDERS WERE NOT FOUND AT THE GIVEN ADDRESSES. 2.5 ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE THE ORDER OF THE LD. CIT(A) CAN BE SAID TO BE PERVERSE ON FACTS BECAUSE OF THE CONTRADICTORY COLLUSIONS DRAWN IN THE BODY OF THE ORDER WHICH COU LD NOT HAVE BEEN DRAWN BY ANY REASONABLE PERSON OR AUTHORITY ON SUCH MATERIAL AND FACTS IF PLACED BEFORE HIM AS HELD BY THE HONBLE APEX COURT IN THE CASE OF SUDARSHAN SILK AND SAREES VS. CIT 300ITR 205(SC). 3. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE T HE LD. CIT(A) HAS ERRED IN DIRECTING THE AO TO VERIFY THE SOURCE OF C ASH DEPOSITS OF RS.94,18,510/- AND RS.6,40,000/- ADDED BY THE AO AS UNEXPLAINED CASH CREDITS U/S 68 OF THE I.T. ACT IN THE BANK ACCOUNTS OF THE ASSESSEE. 3.1 WHILE DIRECTING THE VERIFICATION OF THE CASH DE POSITS TO BE CARRIED OUT BY THE AO THE LD. CIT(A) TRAVELLED BEYOND HIS POWER OF CONFIRMING, REDUCING, ENHANCING OR ANNULLING THE ADDITION. 3.2 WHILE HOLDING SO THE LD. CIT(A) GROSSLY ERRED I N ACCEPTING THE ADDITIONAL ARGUMENTS TAKEN BY THE ASSESSEE BEFORE H IM BY GIVING A DIRECTION TO VERIFY THE SAID DEPOSITS OUT OF THE WI THDRAWALS MADE FROM THE DIFFERENT BANK ACCOUNTS MAINTAINED BY THE ASSESSEE AS SAID WAS NOT THE PLEA OF THE ASSESSEE BEFORE THE AO. 3.3 WHILE HOLDING SO THE LD. CIT(A) WRONGLY DIRECTE D TO THE AO TO CONSIDER THE AMOUNTING OF RS.39,75,000/- WITHDRAWN FROM BANK OF RAJASTHAN LTD. AS SOURCE OF CASH DEPOSIT IN THE SAM E BANK ACCOUNT OF THE APPLICANT IF THE APPLICANT COULD ADDUCE THE SOURCE OF THE DEPOSITS IN THE BANK ACCOUNT WITHOUT FOLLOWING THE PROCEDURE IN APP EAL OF REMANDING IT BACK TO THE AO. NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 7 4. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE T HE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.4,93,73,000/- OUT OF THE TOTAL ADDITION OF RS.7,79,73,000/- MADE BY THE AO ON ACCOUNT OF UNEXP LAINED INVESTMENT IN THE PURCHASE OF LAND IN BHOPAL BY ACCEPTING THE CONTENTION OF THE APPELLANT THAT SOME OF RS. 05 CRORE WAS RECEIVED AS ON MONEY ON BOOKING OF PLOTS OF PHOENIX DEVCONS PVT. LTD. WHICH WAS RET AINED BY SH. NILESH AJMERA AS AGAINST THE FINDINGS OF THE AO THAT THE S AID SUM OF RS. 05 CRORE WAS UTILIZED BY SH. AJMERA FOR MAKING DUBAI HAWALA PAYMENT INSTEAD OF RETAINING IT AS PER THE CONTENTS OF THE SEIZED MATE RIAL. 5. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE T HE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 02 CRORE ON A CCOUNT OF UNSECURED LOAN BY HOLDING THAT THE IDENTITY, CAPACITY AND GENUINEN ESS OF THE TRANSACTION STAND PROVED WITHOUT APPRECIATING THE FACT THAT THE AO EXHAUSTED ALL THE CHANNELS BEFORE MAKING THE ADDITION. 5.1 WHILE HOLDING SO THE LD. CIT(A) ERRED IN ACCEPT ING ADDITIONAL DOCUMENTARY EVIDENCE IN VIOLATION OF RULE 46A OF TH E I.T. RULES WITHOUT CONFRONTING IT TO THE AO AND THE ORDER PASSED ON TH IS ISSUE WAS IN VIOLATION OF PRINCIPLE OF NATURAL JUSTICE. 6. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE T HE LD. CIT(A) ERRED IN DELETING THE PROTECTIVE ADDITION OF RS. 24,51,62 ,000/- MADE ON ACCOUNT OF UNEXPLAINED EXPENDITURE ON PURCHASE OF LAND IN T HE ABSENCE OF ANY RECORDING TO THAT EXTENT IN THE SEIZED PAPERS WHEN THE AO MADE THE ADDITION OF RS. 41.10 CRORE FOR THE TRANSACTION IN SAID LAND BASED ON THE STATEMENT OF THE SELLERS AS WELL AS THE DOCUMENTS A ND JOTTINGS ON THE LOOSE PAPERS AS SEIZED PER LPS A-9 AND BS-8. 7. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE C IT(A) MAY BE SET ASIDE AND THE ORDER OF THE AO MAY PLEASE BE RESTORED. 8. THE APPELLANT CRAVES TO ADD, ALTER OR AMEND ANY OF THE GROUNDS OF APPEAL THE ASSESSEE ALSO RAISED ONE ADDITIONAL GROUND WHIC H READS AS UNDER: THAT, THE LEARNED CIT(A) GROSSLY ERRED, IN LAW, IN DIRECTING THE ADDITION OF RS.16,48,38,000/- IN THE APPELLANTS INCOME, ON ACC OUNT OF ALLEGED UNEXPLAINED INVESTMENT IN BHAURASLA LAND, ON SUBSTA NTIVE BASIS, WHICH RESULTED IN ENHANCEMENT IN SUBSTANTIVE ADDITION, WI THOUT FULLY COMPLYING WITH THE PROVISIONS OF SECTION 251(2) OF THE INCOME -TAX ACT, 1961. NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 8 THE LD. CIT DR OBJECTED THE ADMISSION OF THE ADDITI ONAL GROUND. ON THE OTHER HAND, THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED T HAT THE GRANT OF REASONABLE OPPORTUNITY OF SHOWING CAUSE AGAINST THE ENHANCEMEN T OF INCOME BY CIT(A) IS A SINE- QUA-NON UNDER THE PROVISIONS OF SECTION 251(2) OF T HE ACT AND THE SAME BEING LEGAL IN THE NATURE REQUIRING NO APPRECIATION OF FRESH FACTS DESERVES TO BE ADMITTED. WE FIND NO ADVERSITY IN ADMISSION OF THE ADDITIONAL GROUND AND ACCORDINGLY, THE SAME IS BEING ADMITTED AND ADJUDICATED HEREINAFTER. LD. AUTHORIZE D REPRESENTATIVE ARGUED BEFORE US AT LENGTH AND ALSO FURNISHED A DETAILED WRITTEN SUB MISSION IN RESPECT OF THE GROUNDS TAKEN BY THE ASSESSEE AS WELL AS IN RESPECT OF THE GROUNDS TAKEN BY THE REVENUE. THE WRITTEN SUBMISSIONS HAVE BEEN PLACED ON RECORD AFTE R DUE PERUSAL. LD. CIT DR MADE COUNTER ARGUMENTS AGAINST THE ARGUMENTS OF THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE AND RELIED UPON THE ORDER OF THE AO IN RES PECT OF THE RELIEF GRANTED BY THE LD. CIT(A) AND FOR THE ADDITIONS CONFIRMED BY THE LD. C IT(A), THE LD. CIT DR ALSO MADE WRITTEN SUBMISSION WHICH AFTER CAREFUL PERUSAL IS P LACED ON RECORD. THE SHORT FACTS OF THE CASE ARE THAT DURING THE COU RSE OF THE SIMULTANEOUS SEARCH & SEIZURE OPERATIONS IN THE CASE OF ONE COMPANY NAM ELY M/S. PHOENIX DEVCONS PVT. LTD. [IN SHORT, PDPL], IN WHICH THE ASSESSEE IS ONE OF THE DIRECTORS, CERTAIN SALE AGREEMENTS PURPORTED TO HAVE BEEN EXECUTED BETWEEN THE ABOVE NAMED COMPANY AND THE SELLERS OF THE LAND IN RESPECT OF CERTAIN PIECE S OF LAND SITUATED AT VILLAGE BHAURASLA, FOR A TOTAL CONSIDERATION OF RS.16,48,38,000/- WERE FOUND AND SEIZED. BASED UPON SUCH SALE AGREEMENTS AND SOME OTHER JOTTINGS, THE LD. AO MADE AN ADDITION OF RS.41,10,00,000/-, ON SUBSTANTIVE BASIS, IN THE HAN DS OF THE ABOVE NAMED COMPANY. HOWEVER, THE AO ALSO MADE A SIMILAR ADDITION OF RS. 41,10,00,000/- IN THE HANDS OF THE NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 9 ASSESSEE ON PROTECTIVE BASIS. AGAINST THESE ADDITIO NS, BOTH THE COMPANY AND THE ASSESSEE CAME INTO APPEAL BEFORE THE LD. CIT(A). TH E LD. CIT(A) WHILE ADJUDICATING THE APPEAL IN THE CASE OF THE COMPANY, FOUND THAT ON TH E PURPORTED DATE OF EXECUTION OF THE SALE AGREEMENTS, THE COMPANY HAD NOT COME INTO EXIS TENCE AND THEREFORE, HE DIRECTED TO DELETE SUCH ADDITION IN THE HANDS OF THE COMPANY WHICH WERE MADE BY THE AO ON SUBSTANTIVE BASIS. HOWEVER, THE CIT(A) WAS OF THE V IEW THAT THE PAYMENTS OF THE ENTIRE SALE CONSIDERATION, AS STATED IN THE SALE AGREEMEN TS, WERE MADE BY THE ASSESSEE AND THEREFORE, THE CIT(A) ISSUED A SHOW-CAUSE NOTICE OF ENHANCEMENT, DATED 22-02-2013, TO THE ASSESSEE UNDER S.251(2) OF THE ACT. A COPY O F SUCH NOTICE WAS FILED BY THE ASSESSEE AT PAGE NO. 238 OF HIS PAPER BOOK. AS PER SUCH NOTICE, THE ASSESSEE WAS REQUIRED TO CLARIFY THE MATTER AS TO WHY AN ENHANCE MENT OF RS.1,33,37,500/- BE NOT MADE, UNDER S. 251 OF THE I.T. ACT, 1961 IN HIS INC OME ON SUBSTANTIVE BASIS. HOWEVER, WHILE PASSING THE ORDER, THE CIT(A) VIDE PARA 16.6 OF HIS ORDER MADE AN ENHANCEMENT OF RS.16,48,38,000/- IN THE ASSESSEES INCOME, ON S UBSTANTIVE BASIS, ON ACCOUNT OF INVESTMENT IN BHAURASLA LAND. AGAINST THE ACTION OF THE CIT(A) IN MAKING ENHANCEMENT OF RS.16,48,38,000/-, ON SUBSTANTIVE BASIS, AS AGAI NST THE AMOUNT OF ENHANCEMENT STATED IN THE SHOW-CAUSE NOTICE AT RS.1,33,37,500/- , THE ASSESSEE HAS RAISED THE ADDITIONAL GROUND. ON THIS ISSUE, THE ASSESSEE MADE WRITTEN SUBMISSIO N WHICH IS REPRODUCED AS UNDER: YOUR HONOURS, IN THE APPELLANTS CASE,THE ADDITION OF RS.41,10,00,000/- WAS MADE BY THE AO ON PROTECTIVE BASIS ONLY. DURING THE COURSE OF THE APPELLATE PROCEEDINGS, THE APPELLANT MADE A DETAILE D EXPLANATION BEFORE THE CIT(A)THAT IN HIS CASE,AT ANY RATE,THE ADDITION OF RS.41,10,00,000/- CANNOT BE MADE AND AT THE WORST, AN ADDITION OF RS. 1,33,37,500/- COULD BE MADE IN HIS HANDS [KINDLY REFER PB PAGE NO. 59-A OF OUR PAPER BOOK]. THE NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 10 LEARNED CIT(A),ISSUED AN ENHANCEMENT NOTICE DATED 2 2-02-2013, UNDER S.251(2) OF THE ACT REQUIRING THE APPELLANT TO SHOW -CAUSE AS TO WHY AN ENHANCEMENT OF RS.1,33,75,000/- SHOULD NOT BE MADE U/S 251 OF THE IT ACT IN HIS HANDS ON SUBSTANTIVE BASIS [KINDLY REFER PB PAGE NO. 238 OF OUR PAPER BOOK]. HOWEVER, WHILE PASSING THE ASSESSMENT ORDER, THE LE ARNED CIT(A) WITHOUT GIVING FURTHER OPPORTUNITY OR WITHOUT ISSUING ANY F URTHER NOTICE OF ENHANCEMENT AS CONTEMPLATED UNDER S.251(2) OF THE A CT, MADE THE HUGE ADDITION TO THE EXTENT OF RS.16,48,38,000/- WHICH I S PATENTLY IN VIOLATION OF THE PROVISIONS OF SECTION 251 OF THE ACT.IT SHALL B E APPRECIATED THAT, IN VIEW OF SUCH FACT , THE ACTION OF THE LEARNED CIT(A) CAN NOT BE LEGALLY APPROVED BEYOND THE ENHANCEMENT OF RS. 1,33,37,500/- FOR WHI CH HE HAD GIVEN A NOTICE UNDER S.251(2) OF THE ACT. IN SUPPORT OF OUR CONTENTION, WE WISH TO PLACE RELIANCE ON THE JUDICIAL PRONOUNCEMENT OF HONBLE ITAT AMRITSAR BENCH IN THE CASE OF DELHI BUILDING MATERIAL CORPN. VS. ACIT (2006) 103 TTJ 0830 (ASR.TRIB.). THE PUBLISHED CATCH NOTE IS REPRODUCED AS UNDER: APPEAL [CIT(A)]POWERS OF CIT(A)SCOPE ON REMAND V IS-A-VIS ENHANCEMENTCIT(A) HAD NO POWER OF ENHANCEMENT WHER E THE MATTER WAS REMANDED TO HIM ON A SPECIFIC ISSUE OF A DDITION OF RS. 1.25 LAKHS FURTHER, ENHANCEMENT NOTICE HAVING BEEN GIVEN FOR RS. 13 LAKHS AND ODD, ENHANCEMENT TO THE TUNE OF RS . 20 LAKHS AND ODD WAS INVALID IN THE ABSENCE OF FURTHER NOTIC E UNDER S. 251(2) EVEN ON MERITS, AT THE MOST, THE ADDITION WORKED O UT TO RS. 4.24 LAKHS ON ACCOUNT OF EXCESS STOCK AND SUCH ADDI TION, WHICH AMOUNTED TO ADDITION UNDER S. 69 HAVING NOT BEEN EM BARKED UPON BY THE AO HIMSELF, COULD NOT HAVE BEEN MADE BY THE CIT(A) THE LD. IT DR SUBMITTED THAT THAT THE STATEMENT OF AMOUNT OF ENHANCEMENT IN THE SHOW-CAUSE NOTICE UNDER S. 251 WAS MERELY A TYPOGRA PHICAL ERROR ON THE PART OF THE CIT(A) AND MERELY FOR SUCH AN ERROR, THE ENHANCEMEN T, WHICH IS OTHERWISE, IN ACCORDANCE WITH LAW, CANNOT BE DELETED. THE LD. CIT DR FURTHER SUBMITS THAT IN SUCH AN EVENTUALITY, AT THE WORST, THE ENTIRE ISSUE DESERVES TO BE RESTORED BACK TO THE FILE OF THE CIT(A). WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PA RTIES. WE ARE OF THE VIEW THAT THE VERY PURPOSE OF GIVING AN OPPORTUNITY OF BEING HEARD TO AN APPELLANT UNDER THE PROVISIONS OF SECTION 251(2) OF THE I.T. ACT, 1961 IS TO MAKE HIM AWARE OF THE PROPOSED NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 11 ENHANCEMENT OF INCOME. IN THIS CASE, WE FIND THAT H AVING MADE AN ADDITION OF A HIGHER AMOUNT OF RS.41,10,00,000/- ON THE PROTECTIVE BASIS , THE ASSESSEE WAS WELL AWARE OF THE CASE OF THE REVENUE ON THE SUBJECT ISSUE RIGHT FROM THE STAGE OF THE ASSESSMENT. AGAINST SUCH ADDITION, WHICH WAS MADE IN HIS ASSESS MENT ON PROTECTIVE BASIS, THE ASSESSEE HAD ALSO RAISED A SPECIFIC GROUND IN HIS A PPEAL BEFORE THE CIT(A). THE VERY GENESIS OF MAKING A PROTECTIVE ADDITION IN SOMEONE S HANDS LIES IN THE THEORY THAT IF FOR ANY REASON, THE CORRESPONDING SUBSTANTIVE ADDITION IN THE HANDS OF ONE ASSESSEE GETS STRUCK-OFF, THE PROTECTIVE ADDITION MADE IN THE HAN DS OF THE OTHER ASSESSEE SHALL BECOME OPERATIVE. HOWEVER, IN SUCH A SITUATION, THE ASSESS EE IN WHOSE HANDS THE ADDITIONS WERE MADE ON PROTECTIVE BASIS CAN DEMONSTRATE BEFOR E THE APPELLATE AUTHORITIES THAT THE ADDITIONS ARE NOT LIABLE TO BE MADE IN HIS HANDS TO O. IN THE CASE IN HAND, ALTHOUGH, IN OUR SUBSEQUENT FINDINGS MADE ELSEWHERE IN THIS ORDE R, WE HAVE DETERMINED THE SAME AMOUNT OF INVESTMENT IN THE BHAURASLA LAND, I.E. AT RS.1,33,37,500/- ONLY, IN RESPECT OF WHICH THE NOTICE OF ENHANCEMENT WAS GIVEN BY THE CI T(A), BUT AT THE SAME TIME, WE ARE OF THE VIEW THAT THERE WAS NO NECESSITY FOR THE CIT (A) TO GIVE ANY NOTICE TO THE ASSESSEE UNDER S.251(2) OF THE ACT AS THE ENHANCEMENT WAS ON LY IN RESPECT OF CONVERSION OF ONE PROTECTIVE ADDITION INTO SUBSTANTIVE ADDITION AND T HE AMOUNT AT WHICH FINALLY THE ADDITION WAS MADE BY THE CIT(A) ON SUBSTANTIVE BASIS WAS LOW ER THAN THE AMOUNT OF ADDITION MADE BY THE AO ON PROTECTIVE BASIS. ACCORDINGLY, TH IS ADDITIONAL GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED. ASSESSEES GROUND NO. 1(A) & 1(B) AND DEPARTMENTAL GROUND NO. 6 FACTS, IN BRIEF, RELATING TO THE ISSUE ARE THAT DUR ING THE COURSE OF SEARCH CARRIED OUT IN THE BUSINESS PREMISES OF M/S. PHOENIX DEVCON S PVT. LTD. [IN SHORT, PDPL], A NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 12 COMPANY IN WHICH THE ASSESSEE IS ONE OF THE DIRECTO RS, SIX SALE AGREEMENTS IN RESPECT OF LAND ADMEASURING 11.592 HECTARES SITUATED AT VIL LAGE BHOURASLA, TEHSIL SANWER, DISTRICT INDORE FOR AN AGGREGATE CONSIDERATION OF R S.16,48,38,000/- WERE FOUND AND SEIZED. DURING THE COURSE OF THE ASSESSMENT PROCEED INGS, THE AO ASKED M/S. PDPL TO EXPLAIN THE SOURCE OF INVESTMENT IN PURCHASE OF THE ABOVE SAID LAND. HOWEVER, THE PDPL DENIED TO HAVE ENTERED INTO ANY SUCH AGREEMENT AND ALSO DENIED TO HAVE MADE ANY UNACCOUNTED PAYMENT AGAINST THE PURCHASE OF THE SAID LAND. THE PDPL SUBMITTED THAT IT HAD NOT MADE ANY INVESTMENT IN THE SUBJECT LAND BUT IT WAS ONLY THE ASSESSEE WHO MIGHT HAVE MADE CERTAIN INVESTMENTS IN HIS INDI VIDUAL CAPACITY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IN THE CASE OF PDPL THE A O RECORDED THE STATEMENTS OF THE SELLERS OF THE LAND AND CONFRONTED SUCH STATEMENTS TO THE PDPL. THE PDPL POINTED OUT VARIOUS DISCREPANCIES IN THE STATEMENTS OF THE SELL ERS. BESIDES TAKING NOTE OF THE SALE AGREEMENTS, THE AO ALSO TOOK NOTE OF CERTAIN LOOSE PAPERS INVENTORISED AS PART OF ANNEXURE A-1, SEIZED FROM THE RESIDENTIAL PREMISES OF THE ASSESSEE. BASED UPON THE JOTTINGS ON THE LOOSE PAPERS SEIZED FROM THE PREMIS ES OF THE ASSESSEE, THE AO ARRIVED AT A CONCLUSION THAT THE TOTAL AMOUNT OF INVESTMENT IN THE SAID LAND WAS TO THE EXTENT OF RS.41,10,00,000/- AND NOT ONLY OF RS.16,48,38,000/- AS FOUND MENTIONED IN THE VARIOUS SALE AGREEMENTS SEIZED FROM THE BUSINESS PREMISES O F PDPL. THE AO ALSO DRAWN REFERENCE FROM ONE DIARY SEIZED FROM THE ASSESSEES PREMISES AND INVENTORIZED AS BS- 8 IN WHICH CERTAIN PAYMENTS AGAINST THE SAID LAND W ERE SHOWN. ACCORDINGLY, THE AO MADE THE ADDITION OF RS.41,10,00,000/- IN THE PDPL S INCOME UNDER THE HEAD UNEXPLAINED EXPENDITURE IN BHOURASLA LAND ON SUBS TANTIVE BASIS WITH THE CORRESPONDING ADDITION IN THE HANDS OF THE ASSESSEE ON PROTECTIVE BASIS. THE RELEVANT NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 13 FINDINGS OF THE ASSESSING OFFICER ARE RECORDED AT P ARA 8.1 TO PARA 8.18 FROM PAGE NO. 9 TO 23 OF THE ASSESSMENT ORDER. MATTER CARRIED TO CIT(A) AND CIT(A) HAS CONFIRMED THE ADDITION OF RS.16,48,38,000/- AND DELETED THE ADDITION OF RS.24 ,51,62,000/-, THEREFORE, REVENUE IS IN APPEAL BEFORE US. THE CIT(A) HAS DECIDED IN PARA 16.5 & 16.6 [PAGE NO. 113 TO 116 OF THE ORDER] AS UNDER: 16.5 I HAVE CONSIDERED THE A.O.S ORDER AS WELL AS THE A PPELLANTS A/R SUBMISSION. HAVING CONSIDERED BOTH, I FIND THAT THE A.O. MADE THE IMPUGNED ADDITION OF RS.41,00,00,000/- IN THE H ANDS OF THE APPELLANT ON PROTECTIVE BASIS AS THE APPELLANT WAS DIRECTOR OF M/S. PDPL. THE A.O. WORKED OUT THE TOTAL INVESTMENT TAKI NG NOTE OF THE FACT THAT TOTAL PURCHASES OF 51.50 ACRES LAND WAS P URCHASED BY M/S PDPL. THE A.O. BASED ON HIS DISCUSSION IN PARA-8.1 TO 8.17 HELD THAT THE VIKRAY ANUBHAND PATRA WAS ACTUALLY EXECUTE D AND PAYMENTS WERE MADE TO THE LAND OWNER FOR THE BHAURS ALA LAND AND ACCORDINGLY ON THE BASIS OF DATE SPECIFIED AGAINST THE PURCHASES OF THIS 51.50 ACRES LAND, THE A.O. WORKED THE TOTAL IN VESTMENT OF RS.41.10 CRORES. HE MADE THE ADDITION OF THE AFORES AID SUM AS UNEXPLAINED IN THE HANDS OF M/S PDPL ON SUBSTANTIVE BASIS AND SIMILAR ADDITION WAS DONE BY A.O. IN THE HANDS OF A PPELLANT ON PROTECTIVE BASIS. FOR MAKING THE PROTECTIVE ADDITIO N, THE A.O. OBSERVED THAT THE RELATED DOCUMENT TO THE BHAURSALA LAND WAS FOUND IN THE POSSESSION OF SHRI NILESH AJMERA AND H ENCE MADE THE PROTECTIVE ADDITION IN HIS HAND OF THE AFORESAID SU M. 16.6 HAVING TAKEN NOTE OF ALL THE FACTS AND SUBMISSION A VAILABLE ON RECORD AND ALSO AFTER TAKING NOTE OF THE DISCUSS ION MADE BY THE A.O. SPECIFICALLY OF THE STATEMENT RECORDED OF THE SELLER OF THE BHAURSALA LAND, AS EXTRACTED IN THE ASSESSMENT ORDE R MENTIONED ABOVE, I AM OF THE CONSIDERED VIEW THAT THE SUBJECT LAND DEAL HAS BEEN ENTERED INTO BY THE APPELLANT ON BEHALF OF THE COMPANY NAMED M/S PDPL AS IT IS EVIDENT FROM THE DETAILS MENTIONE D IN THE VIKRAY ANUBHAND PATRA. THOUGH IT IS TRUE THAT M/S PDPL WAS INCORPORATED WITH THE REGISTRAR OF COMPANIES AS ON 24/09/07 WHER EAS THE SAID SUBJECT DEEDS GOT EXECUTED ON 03/09/07. THUS, I FIN D SUBSTANTIAL FORCE IN THE APPELLANTS THIS PROPOSITION THAT THE AS THE COMPANY M/S NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 14 PDPL WAS NOT IN EXISTENCE AS THE SAME WAS NOT INCOR PORATED, HENCE MAKING OF SUCH INVESTMENT BY M/S PDPL WAS INC ORRECT, AS HELD BY THE A.O. BUT AS I FIND FROM THE APPELLANTS OWN SUBMISSION THAT THE APPELLANT HAS ACCEPTED FOR DOING TRANSACTI ON OF THE LAND DEAL WITH THE FARMERS AS ENUMERATED IN LPS-A/9, HOW EVER THE APPELLANT DENIED OF MAKING ANY SUCH INVESTMENT AS H ELD BY A.O. EXCEPT OF MAKING A CASH PAYMENT OF RS.1,33,37,500/- FOR BHAURSALA LAND DEAL. THE APPELLANT ALSO CLAIMED THAT SAID PAY MENT OF RS.1,33,37,500/- WAS MADE OUT OF ON-MONEY EARNED BY THE APPELLANT. HOWEVER IN VIEW OF DETAILED DISCUSSION M ADE BY A.O. SPECIFICALLY OF FACTS NOTED FROM PARA-8.2 TO 8.10 O F THE ORDER, WHEREIN THE STATEMENTS OF THE SELLERS WERE NOTED AN D WHEREIN THEY HAVE SPECIFICALLY ACCEPTED OF EXECUTING THE SAME IN FAVOUR OF M/S PDPL. NOT ONLY THIS EVENT THE CIRCUMSTANTIAL EVIDEN CE WHICH IS FOUND IN THE FORM OF LPS-A/9 AND ALSO ANNEXURE A-1 FROM RESIDENTIAL PREMISES OF THE APPELLANT FROM MUMBAI A ND THE BS-8 DIARY FROM WHERE THE DETAILS OF PAYMENT HAS BEEN CO -RELATED BY THE A.O. IN A VERY SPECIFIC MANNER AND DETAILED IN PARA -8.11 TO 8.14 OF THE SAID ORDER, I AM OF THE CONSIDERED VIEW THAT TH E APPELLANTS REQUEST OF NOT MAKING ANY INVESTMENT IN BHAURSALA L AND CANNOT BE ACCEPTED IN THE GIVEN FACTS OF THE APPELLANTS CASE . IN MY CONSIDERED VIEW AS THE VIKRAY ANUBHAND PATRA WERE S IGNED BY THE SELLERS IN THE FAVOUR OF M/S PDPL, WHICH WERE DULY COUNTER SIGNED BY WITNESSES FOR THE SAID TRANSACTION IS A SUBSTANT IAL EVIDENCE FOR SUCH ASSERTION. NOT ONLY THIS, THE DETAILS OF SUCH TRANSACTION WERE ALSO FOUND IN THE RESIDENTIAL PREMISES OF THE APPEL LANT AT MUMBAI CLEARLY GIVES JUSTIFICATION FOR HOLDING THAT THE AP PELLANT ENTERED INTO SUCH TRANSACTION OF PURCHASE OF LAND AT BHAURSALA. EVEN THE EXCEL SHEET TAKEN OUT FROM THE COMPUTER OF M/S PDPL ESTAB LISHES THE AFORESAID FINDING. THERE IS NO SUBSTANCE IN THE APP ELLANTS A/R THIS ARGUMENT THAT THESE WERE DUMB DOCUMENT, AS NO ONE W ILL ALLOW TO KEEP DUMB DOCUMENT IN THE RESIDENTIAL PREMISES AND ALSO IN THE FORM OF FILES AS INVENTORIZED IN LPS-A/9 AS WELL AS THE DETAILS OF SUCH TRANSACTION AS NOTED IN BS-8 DIARY AND ANNEXUR E A-1 OF PAGE- 91 TO 95 AS NOTED BY A.O. I AM IN FULL AGREEMENT WI TH A.O.S THIS OBSERVATION THAT ON SUCH DOCUMENTS AS INVENTORIZED IN LPS-A/9, THE ABSENCE OF DIRECTORS OR APPELLANTS SIGNATURE W ILL NO WHERE GIVE ANY BENEFIT TO THE APPELLANT AS THE APPELLANT HAS G OT SIGNED BY THE SELLERS AS WELL AS THE WITNESSES OF THE SAID TRANSA CTIONS. THE APPELLANT OR ANY OF THE DIRECTOR OF M/S PDPL COULD HAVE SIGNED ANY NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 15 MOMENT ON SUCH AGREEMENT AS AND WHEN THEY DESIRE OR NEEDED. AS ON THE DATE OF TRANSACTION M/S PDPL WAS NOT IN E XISTENCE AS EVIDENT FROM THE APPELLANTS SUBMISSION FOR ITS INC ORPORATION, WHICH IS ON 24/09/07, WHEREAS SUCH AGREEMENT WERE ENTERED ON 03/09/07. THEREFORE I AM OF THE CONSIDERED VIEW THA T THE ENTIRE TRANSACTION WAS ENTERED INTO BY THE APPELLANT FOR B HAURSALA LAND. AS A RESULT THEREOF SUCH DOCUMENTS WERE FOUND FROM THE POSSESSION OF THE APPELLANT. HOWEVER I DO NOT AGREE WITH THE A.O. ESTIMATION OF INVESTMENT OF RS.41.10 CRORES IN THE HANDS OF THE APPELLANT BASED ON PAGE-91 OF ANNEXURE A-1 AS EXTRA CTED IN PARA- 8.10 OF THE ORDER IN ABSENCE OF ANY SUCH EVIDENCE O F ENTERING OF SUCH PAYMENT. EVEN THE A.O. HAS NOT BROUGHT ON ANY EVIDENCE ON RECORD TO SUGGEST THAT PAYMENT OF RS.41.10 CRORES W AS EITHER MADE BY M/S PDPL OR BY THE APPELLANT. EVEN I FIND THAT T HE DETAILS EXTRACTED ON PARA-8.10 BY THE A.O. OF EXCEL SHEET A LSO DOES NOT ESTABLISHES THE PAYMENT OF RS.41.10 CRORES. THUS, I AM NOT IN AGREEMENT WITH THE A.O. THIS FINDING OF ADDITION OF RS.41.10 CRORES IN ABSENCE OF ANY COGENT EVIDENCE FOR SUCH PAYMENT. HOWEVER HAVING TAKEN NOTE OF ALL THE FACTS AVAILABLE ON REC ORD AND ALSO TAKING ALL CIRCUMSTANTIAL EVIDENCE AND DOCUMENTS, I AM OF THE CONSIDERED VIEW THAT THE DETAILS NOTED IN LPS-A/9 O F THE TRANSACTION OF RS.16,48,38,000/- HAS BEEN ENTERED BY THE APPELL ANT, WHICH IS EVIDENT FROM THE STATEMENT OF THE SELLERS, AS ENUME RATED AND EXTRACTED BY A.O. IN PARA-8.4 TO 8.10 OF THE ORDER. IN VIEW OF THE SAME, I CONSIDER IT PROPER AND APPROPRIATE TO CONFI RM THE ADDITION OF RS.16,48,38,000/- IN THE HANDS OF THE APPELLANT ON SUBSTANTIVE BASIS, AS THE DETAILS OF SUCH PAYMENT AND DOCUMENTS WERE SEIZED FROM THE POSSESSION OF THE APPELLANT. BESIDES THIS, THE APPELLANT IS A DIRECTOR OF M/S PDPL AND ACTIVELY INVOLVED IN THE BUSINESS TRANSACTION OF M/S PDPL, WHICH IS EVIDENT FROM THE DETAILS NOTED IN LPS-A/9 AND BS-8 DIARY AS WELL AS PAGE-91 TO 95 OF ANNEXURE A-1, WHICH WAS SEIZED FROM APPELLANTS RESIDENTIAL PREMI SES AT MUMBAI. IN THE RESULT, THE ADDITION MADE BY THE A.O. TO THE EXTENT OF RS.16,48,38,000/- IS CONFIRMED. THUS, APPELLANTS T HESE GROUNDS OF APPEAL ARE PARTLY ALLOWED. THE LD. AR HAS FILED THE FOLLOWING WRITTEN SUBMISSI ON ON THE ABOVE ISSUE: IN THE INSTANT CASE, THE LEARNED CIT(A) HAS CONFIR MED THE IMPUGNED ADDITION MERELY ON THE BASIS OF CERTAIN INCOMPLETE, UNSIGNED, UNDATED AND NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 16 UNEXECUTED AGREEMENTS ALLEGEDLY FOUND FROM A THIRD PARTYS PREMISES I.E. FROM M/S. PHOENIX DEVCONS PVT. LTD. AND INVENTORIZE D AS LPS-A/9. SUCH FACT IS EVIDENT FROM THE FINDINGS GIVEN BY THE LEAR NED AO HIMSELF AT PARA 8.1 OF THE ASSESSMENT ORDER. EVEN, THE ALLEGED EXCE L SHEET AS REFERRED TO BY THE AO AT PARA 8.11 [PAGE NO. 16] OF HIS ASSESSM ENT ORDER, GIVING THE DETAILS OF SOME NOTINGS WITH THE CAPTION PHOENIX W INGS WAS ALSO NOT FOUND FROM THE APPELLANTS PREMISES AND WAS ALSO NO T EXTRACTED FROM ANY COMPUTER FOUND IN THE APPELLANTS PREMISES/ POSSESS ION. IT IS SUBMITTED THAT IT IS A SETTLED LAW THAT PRESUMPTION AS CONTEM PLATED UNDER S.292C AND S.132(4A) IS NOT AVAILABLE IN RESPECT OF THE DOCUME NTS NOT FOUND IN THE PREMISES OF THE ASSESSEE BUT IN THE PREMISES OF SOM EONE ELSE. FOR SUCH PROPOSITION, RELIANCE IS PLACED ON THE FOLLOWING JU DICIAL PRONOUNCEMENTS: A) SMT. BOMMANA SWARNA REKHA VS. ACIT (2005) TTJ 8 85 (VISAKHA) B) STRAPTEX (INDIA) (P) LTD. VS. DCIT (2003) 79 TT J 228 (MUM) C) RAMA TRADERS VS. FIRST ITO (1988) 32 TTJ 483 ( PAT) D) JAYA S. SHETTY VS. ACIT (1999) 64 TTJ 551 (MUM ) E) ASHWANI KUMAR VS. ITO (1992) 42 TTJ 644 (DEL) F) SHETH AKSHAY PUSHPAVADAN VS. DCIT (2010) 130 T TJ (AHD) (UO) 42 G) ACIT VS. KISHORE LAL BALWANT RAI & ORS. (2007) 17 SOT 380 (CHD) ON A PERUSAL OF THE COPIES OF THE SAID LOOSE PAPERS [PURPORTED TO BE AGREEMENTS], AS PLACED AT PB PAGE NO. 239 TO 262, I T SHALL BE OBSERVED THAT : (A) THE PURPORTED AGREEMENTS ARE UNSIGNED BY ANY BU YER. (B) THE PURPORTED AGREEMENTS ARE NOT BEARING ANY D ATE. (C) THE PURPORTED AGREEMENTS ARE UNREGISTERED. (D) THE PURPORTED AGREEMENTS ARE INCOMPLETE WHICH I S EVIDENT FROM CLAUSE (3) THEREOF. (E) THEY HAVE NOT BEEN SHOWN TO HAVE BEEN ENTERED INTO BY THE APPELLANT IN HIS INDIVIDUAL CAPACITY. NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 17 THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. GIAN GUPTA (2014) 369 ITR 0428 (DELHC) HAS HELD THAT AN UNSIGNED MOU WHICH HAS NOT BEEN MATERIALIZED CANNOT BE RELIED UPON. A COPY OF SUCH DECISION IS PLACED AT PAGE NO. 74 TO 78 OF JUDGMENT COMPILATION BOOK [JCB]. RELIANCE IS ALSO PLACED ON THE FOLLOWING JUDICIAL P RONOUNCEMENTS: I) CIT VS. KULWANT RAI (2007) 291 ITR 36 (DEL) [JCB PAGE NO. 41 TO 46] II) M.M. FINANCIERS (P) LTD. VS. DCIT (2007) 107 TT J (CHEN) 200 [JCB PAGE NO. 47 TO 68] III) ACIT VS. RADHESHYAM PODDAR (1992) 41 ITD (KOL) 449 [JCB PAGE NO. 69 TO 73] IV) ADDL. CIT VS. MISS LATA MANGESHKAR (1974) 97 IT R 696 (BOM.) IT IS SUBMITTED THAT IF ANY DOCUMENT IS TO BE RELI ED UPON AS AN EVIDENCE THEN ITS ENTIRE CONTENTS HAVE TO BE READ AND INTERP RETED IN ITS TOTALITY AND PART REFERENCE ON PICK-AND-CHOOSE METHOD SHOULD NOT BE PERMITTED. FROM A PERUSAL OF THE SALE AGREEMENTS, AND SUMMARY THERE OF PLACED ON PAGE NO.263 OF THE ASSESSEES PAPER-BOOK, IT WOULD BE OB SERVED BY YOUR HONOURS THAT AS PER THESE AGREEMENTS ONLY A SUM OF RS.39,37,500/-, RS.3,72,500/-, RS.41,02,500/-, RS.8,36,250/- AND RS .40,88,750/- HAVE BEEN STATED TO HAVE BEEN PAID, ON 03-09-2007, RESPE CTIVELY TO SHRI BABULAL KHATI, SHRI MALKHAN KHATI, SHRI BADRILAL KH ATI, SMT. SURAJBAI KHATI AND SHRI KEDAR KHATI AGGREGATING TO A SUM OF RS.1,3 3,37,500/-. FOR THE REMAINING CONSIDERATION, THERE IS MENTION OF PAYMEN T OF SCHEDULE FOR FUTURE DATES WITH THE NARRATION SHALL BE PAID. IT SHALL BE APPRECIATED THAT THE LD. AO HAS NOT GIVEN ANY FINDING TO THE EFFECT THAT ANY EVIDENCE WAS FOUND BY HIM AS REGARD TO MAKING OF THE PAYMENT BY THE ASSESSEE TO THE SELLERS OF THE LAND ON THE VARIOUS DATES SUBSEQUENT TO THE FIRST PAYMENT NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 18 DATE I.E. 03-09-2007. IT SHALL BE APPRECIATED THAT EVEN THE AO, AT PARA 8.14 OF HIS ORDER, WHERE HE HAS MADE REFERENCE OF BANK S TATEMENTS OF THE SELLERS OF THE LAND, HAS GIVEN NO FINDING AS REGARD TO MAKING OF PAYMENT BY THE ASSESSEE TO THE SELLERS OF THE LAND SUBSEQUENT TO 03-09-2007. THE FACT REMAINED THAT AFTER HAVING PAID THE ADVANC E OF RS.1,33,37,500/-, AS NOTED IN THE SALE AGREEMENTS, THE ASSESSEE DID N OT MAKE ANY FURTHER PAYMENT TO THE SELLERS OF THE LAND WITH THE RESULT THAT THE SELLERS HAD ULTIMATELY SOLD THE LAND TO SOME THIRD PARTIES. I T IS NOT IN DISPUTE THAT THE ASSESSEE DID NOT OWN THE SUBJECT LAND AT ANY POINT OF TIME AND EVEN FROM THE STATEMENTS OF THE SELLERS AS RECORDED BY T HE AO, UNDER S. 131 OF THE ACT, THE ABOVE FACT HAS CLEARLY EMERGED OUT. SUCH FACT FURTHER GETS FORTIFIED FROM THE FINDINGS GIVEN BY T HE AO HIMSELF AT PARA 8.15 OF THE IMPUGNED ORDER IN WHICH HE HAS CLE ARLY SAID THAT THE REGISTRIES OF THE SAID LAND WERE FOUND MADE IN THE NAME OF SOME OTHER COMPANIES I.E. M/S. M.R. DEVCONS AND M/S. ARC ADIA DEVCONS PVT. LTD. THE ASSESSEE HAS PRODUCED THE COPIES OF THE SALE DE EDS OF THE SUBJECT LAND DULY EXECUTED IN FAVOUR OF M/S. M.R. DEVCONS P VT. LTD. AND M/S. ARCADIA DEVCONS PVT. LTD. BY THE SAME SELLERS WHOS E NAMES WERE STATED IN THE SALE AGREEMENTS. SUCH SALE DEED PROVES THE A SSERTIONS OF THE ASSESSEE THAT THE ACTUAL AND BENEFICIARY OWNERS OF THE LAND WERE ABOVE TWO COMPANIES ONLY AND THE ASSESSEE COULD NOT BE DE EMED TO HAVE MADE ANY PAYMENT OVER AND ABOVE THE INITIAL PAYMENT OF R S.1,33,37,500/- TOWARDS PURCHASE OF THE SAID LAND. EVEN FROM THE COPIES OF THE BANK STATEMENTS OF SHRI RANVEER SINGH CHHABRA AND M/S. M .R. DEVCONS PVT. LTD. IT MAY BE OBSERVED THAT PAYMENTS TO THE S ELLERS HAVE FLOWN OUT FROM THE BANK ACCOUNTS OF THESE PERSONS ONLY AN D IT WAS ONLY THESE TWO PARTIES ONLY WHO MADE PAYMENTS TO SHRI KE DAR PATEL (KHATI) AND OTHERS TOWARDS PURCHASE OF THE SUBJECT LAND. FROM THE NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 19 COPIES OF THE PASS-BOOKS OF THE SELLERS, AS PLACED AT PAGE NO.460 TO 467 OF OUR PAPER-BOOK, IT MAY ALSO BE NOTED THAT PA YMENT IN THE BANK ACCOUNTS OF THE SELLERS HAVE GOT CREDITED THROUGH T HE BANK ACCOUNTS OF THE ULTIMATE BUYERS OF THE LAND I.E. M/S. M.R. D EVCONS PVT. LTD. THROUGH ITS DIRECTOR SHRI RANVEER SINGH CHHABRA. EV EN THE PAYMENTS TO THE SELLERS, AS NOTED BY THE AO VIDE PARA 8.14 O F THE ASSESSMENT ORDER, HAVE BEEN MADE FROM THE BANK ACCOUNTS OF SHR I RANVEER SINGH CHHABRA. BY PRODUCING THE BANK STATEMENTS/FIN ANCIAL STATEMENTS/AUDITED RECORDS, WE COULD BE ABLE TO EST ABLISH THE GENUINENESS AND EXISTENCE OF BOTH THE COMPANIES. IT IS SUBMITTED THAT EVEN IN THE CASE OF M/S. ARCADIA DEVCONS PVT. LTD. ASSESSMENT U/S 148/143(3) WAS FRAMED FOR A.Y. 2010-11 BY ITO-3(1) AND DURING THE COURSE OF SUCH ASSESSMENT, THE SOURCES OF SUCH COMP ANY FOR PURCHASE OF THE SUBJECT LAND WERE EXAMINED BY THE AO. THE FACT REMAINED THAT THE ASSESSEE HAD INITIALLY M ADE THE AGREEMENTS FOR PURCHASE OF SUBJECT LANDS BY PAYING AN AGGREGATE SUM OF RS.1,33,37,500/- IN CASH OUT OF HIS OWN RESO URCES (HIS CONSTITUENTS FUNDS) AS TOKEN ADVANCE AND SUBSEQUEN TLY, THE ASSESSEE HAD SOLD THE ENTIRE DEAL TO M/S. M.R. DEVC ONS PVT. LTD. AND M/S. ARCADIA DEVCONS PVT. LTD.. ACCORDINGLY, THESE TWO COMPANIES, AFTER MAKING SUBSEQUENT PAYMENTS FROM TIME TO TIME, FROM THEIR OWN RESOURCES, GOT THE SUBJECT LAND REGISTERED IN THEIR OWN NAME AND BECAME THE OWNERS. FROM THE COMPUTER PRINT OUTS OR OTHER LOOSE PAPERS REFERRED TO BY THE AO AT PARA 8.10, 8.11, 8.12 IT CANNOT BE ESTABLISHED T HAT THE ASSESSEE MADE ANY PAYMENT TOWARDS PURCHASE OF BHOURASLA LAND OVER AND ABOVE THAT DISCUSSED IN THE PRECEDING PARAS. IT SHALL BE APPRE CIATED THAT ALTHOUGH IN THE BODY OF THE ASSESSMENT ORDER THE AO HAS HEAVILY RELIED UPON THE COPIES OF THE SALE AGREEMENTS FOUND FROM THE PREMIS ES OF PDPL BUT WHILE MAKING THE ADDITION THE AO HAS ABRUPTLY SHIFTED HIS STAND FOR RELIANCE ON NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 20 ONE EXCEL SHEET STATED TO HAVE BEEN FOUND FROM THE PREMISES OF M/S. PHOENIX DEVCONS PVT. LTD.. THE AO HAS MADE REFERENC E OF SUCH EXCEL SHEET AT PAGE NO.16 OF HIS ORDER BY REPRODUCING THE SAME. ON A CAREFUL PERUSAL OF SUCH EXCEL SHEET, IT SHALL BE OBSERVED T HAT SUCH EXCEL SHEET IS NOT IN RESPECT OF THE BHOURASLA LAND AS WRONGLY INT ERPRETED BY THE AO. S UCH EXCEL SHEET IS IN RESPECT OF SOME PHOENIX WINGS PROJECT WHICH WAS PROMOTED BY SOME OTHER COMPANY NAMELY, M/S. PHO ENIX LEISURE & LIFESTYLE PVT. LTD.. IT SHALL FURTHER BE OBSERVED THAT SUCH EXCEL SHEET NOTING IS IN RESPECT OF 110 ACRES PROJECT WIT H SOME HOTEL AND MALL WHEREAS AT BHOURASLA THE TOTAL AREA OF THE SUB JECT LAND, AS PER THE AGREEMENTS, WAS FOUND TO BE OF 11.592 HECTARES I.E. OF APPROXIMATELY 29 ACRES ONLY BY THE AO HIMSELF. FURT HER, AS PER THE EXCEL SHEET THE PER ACRE RATE OF THE LAND IS RS.80 LACS WHEREAS IN THE AGREEMENTS, REFERRED TO BY THE AO, THE RATES HAVE B EEN STATED TO BE AT RS.55 LACS PER ACRE ONLY. FURTHER, FROM THE PAYM ENT DETAILS GIVEN IN THE TABLE OF THE EXCEL SHEET, IT MAY BE OBSERVED THAT SUCH TABLE DOES NOT MATCH WITH THE PAYMENT DETAILS GIVEN BY TH E AO HIMSELF AT PARA 8.14 OF HIS ORDER. IT SHALL FURTHER BE APPRECI ATED THAT EVEN IN THE BS-8 DIARY THERE IS NO MENTION OF PAYMENT OF RS.41, 10,00,000/- AND ON THE CONTRARY, AS PER THE AOS OWN FINDINGS THE P AYMENTS STATED IN SUCH DIARY AGAINST THE SUBJECT LAND WERE TO THE EXT ENT OF RS.52,00,000/- ONLY. IN NUTSHELL, THE EXCEL SHEET R EFERRED TO BY THE AO DOES NOT PERTAIN TO THE BHOURASLA LAND IN RESPECT O F WHICH SALE AGREEMENTS WERE FOUND. IN SUCH CIRCUMSTANCES, THERE WAS ABSOLUTELY NO JUSTIFICATION FOR THE AO TO ESTIMATE THE INVESTM ENT IN THE BHOURASLA LAND AT RS.41,10,00,000/- BY COMMITTING A PATENT ERROR OF LINKING THE AGREEMENTS PERTAINING TO BHOURASLA LAND WITH THE EXCEL SHEETS PERTAINING TO SOME OTHER PROJECT/LAND. NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 21 EVEN THE INITIAL INVESTMENT OF RS.1,33,37,500/- WA S MADE BY THE ASSESSEE NOT FROM HIS OWN MONEY BUT IT WAS MADE BY HIM ONLY AS A MEDIATOR ON BEHALF OF HIS VARIOUS INVESTORS BY RECEIVING FUNDS EITHER DIRECTLY FROM THE INVESTORS THEMSELVES OR FROM VARIOUS PERSONS AS BOR ROWING ON BEHALF OF THE INVESTORS. THE DETAILS OF RECEIPTS OF SUCH FUND S ARE EVIDENT FROM THE BS-8 DIARY WHICH WAS FOUND AND SEIZED FROM THE ASSE SSEES PREMISES. IT IS FURTHER SUBMITTED THAT AT VARIOUS PLACES LIKE AT PARA 12.5 OF THE ASSESSMENT ORDER, THE AO HIMSELF HAS GIVEN CLEAR FI NDING THAT THE ASSESSEE HAD BORROWED FUNDS FROM SHRI MANISH KEDIA, SHRI SUSHIL GOLECHA, SHRI ROHIT SETHI, ETC. THEREFORE, ONCE THE BORROWING OF THE FUNDS BY THE ASSESSEE IS ADMITTED BY THE REVENUE IT SELF, ITS AVAILABILITY FOR MAKING INVESTMENT BY THE ASSESSEE IN VARIOUS ASSETS CANNOT BE RULED OUT . IT IS FURTHER SUBMITTED THAT IN THE BS-8 DIARY, T HE RECEIPT OF FUNDS BY THE ASSESSEE FROM VARIOUS PERSO NS HAVE CLEARLY BEEN REFLECTED AND THE AUTHENTICITY OF SUCH DIARY WAS DU LY ACCEPTED IN SO MANY WORDS BY THE AO HIMSELF, IN THE BODY OF THE ASSESSM ENT ORDER ITSELF, THEREFORE, FOLLOWING THE PRINCIPLE OF COMPLETE RELI ANCE ON ONE DOCUMENT, DUE WEIGHTAGE DESERVES TO BE GIVEN TO THE SOURCES O F FUNDS MENTIONED IN SUCH DIARY. IT IS FURTHER SUBMITTED THAT AS PER THE SCHEME OF THE LAW, ONLY REAL INCOME CAN BE ASSESSED IN THE HANDS OF THE ASS ESSEE. IT SHALL BE APPRECIATED THAT AS PER THE PROVISIONS OF S. 69/69B OF THE ACT, IF AN ASSESSEE OFFERS AN EXPLANATION REGARDING SOURCES OF CERTAIN INVESTMENT, THEN WITHOUT DISCARDING SUCH EXPLANATION, NO ADDITI ON CAN BE MADE. IT IS THEREFORE SUBMITTED THAT EVEN THE INITIAL PAYMENTS OF RS.1,33,37,500/- MADE BY THE ASSESSEE TO THE SELLERS OF THE LAND CAN NOT BE REGARDED AS INCOME OF THE ASSESSEE AND SINCE SUCH FUNDS FOR PRO VIDED TO THE ASSESSEE BY HIS INVESTORS CLIENTS, WHICH IS EVIDENT FROM THE BS-8 DIARY AND OTHER LOOSE PAPERS FOUND DURING THE COURSE OF T HE SEARCH, NO ADDITION ON THIS COUNT DESERVES TO BE SUSTAINED IN THE HANDS OF THE ASSESSEE. LD. DR HAS SUBMITTED AS UNDER: NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 22 LPS A/9 WAS SEIZED FROM THE PREMISE OF ASSESSEE FR OM PAGE NO. 1 TO 130 CONTAINING DETAILS OF AGREEMENT TO SALE OF LAND IN WHICH TOTAL SALE CONSIDERATION WAS GIVEN OF RS. 164838000 PAID BY TH E ASSESSEE. BESIDES THIS, DETAILS OF THAT LAND TRANSACTIONS HAVE ALSO B EEN GIVEN ON PAGE 91 AND 95 OF ANN. A/1 SEIZED FROM THE RESIDENCE OF SHRI NE LESH AJMERA AT BOMBAY AND ONE EXCEL SHEET WAS ALSO FOUND FROM THE ASSESSEE'S COMPUTER CONTAINING LAND TRANSACTIONS OF 51.50 ACRE S AGAINST PAYMENT OF RS. 41.10 CRORES WHICH ARE TALLIED WITH LPS A/9 AND THUS, ADDITION OF RS. 41.10 CRORE HAS BEEN MADE BY AO WITH THE DETAILED F INDINGS AND ASSESSED IN THE HANDS OF ASSESSEE ON SUBSTANTIVE BASIS WHILE IN CASE OF SHRI NELESH AJMERA ON PROTECTIVE BASIS. CIT (A) HAS GIVE THE FI NDINGS IN PARA 16.5 ON PAGE 102 AND 16.6 ON PAGE 104 IN WHICH HE CONFIRME D ADDITION OF RS. 164838000 RELYING ON THE SEIZED DOCUMENTS (AGREEMEN T TO SALE) IN LPS A/9 IN WHICH SALE CONSIDERATION WAS GIVEN AND PAID BY THE ASSESSEE BUT REMAINING AMOUNT HAS BEEN DELETED BY TREATING AS AN ESTIMATION AND WITHOUT ANY CORRESPONDING EVIDENCES. THE ADDITION O F RS. 164838000/- HAS BEEN SUSTAINED IN HANDS OF SHRI NELESH AJMERA O N SUBSTANTIVE BASIS WHILE DELETED IN CASE OF ASSESSEE COMPANY AS COMPAN Y WAS INCORPORATED AND CAME INTO EXISTENCE ON 24.09.2007 WHILE SO CALL ED LAND TRANSACTIONS WERE EXECUTED ON 03.09.2007. AS FAR AS CONCERNED TO THE FINDINGS OF CIT(A) IN REGARD TO DELETION OF ADDITION FROM RS. 1 64838000 TO RS. 41.10 CRORE ARE NOT CORRECT BECAUSE DETAILS OF 41.10 CROR E ARE GIVEN SPECIFICALLY ON THE SEIZED DOCUMENTS OF PAGE 91 AND 95 OF ANN. A /1 WHICH WAS FOUND & SEIZED FROM RESIDENCE OF SHRI NELESH AJMERA AT BO MBAY AND ALSO ON EXCEL SHEET, TAKEN FROM ASSESSEE'S COMPUTER AGAINST WHICH ASSESSEE COULD NOT SUBMIT ANY SATISFACTORY EVIDENCES/EXPLANA TION AND THUS, IT CANNOT BE SAID THAT THE AMOUNT OF 41.10 CRORE WAS T AKEN BY AO ON NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 23 ESTIMATED BASIS. MOREOVER CONTENTS OF THOSE SEIZED DOCUMENTS HAVE ALSO BEEN CORRELATED WITH MAIN SEIZED DOCUMENT OF LPS A/ 9 AND THUS, IT IS CLEARLY PROVED THAT ACTUAL PAYMENT WAS MADE OF RS. 41.10 CRORE AND THEREFORE, FINDINGS OF CIT (A) TO THAT EXTEND IS NO T JUSTIFIED AND SAME MAY KINDLY BE SET ASIDE. WE HAVE HEARD RIVAL CONTENTIONS OF BOTH THE PARTIE S. THIS IS THE SEARCH CASE WHEREIN AS PER THE AO, IN THE PREMISES OF ONE OF TH E COMPANIES NAMELY M/S. PHOENIX DEVCONS LTD. IN WHICH THE ASSESSEE IS ONE OF THE DI RECTORS, CERTAIN SALE AGREEMENTS HAVING BEEN EXECUTED BETWEEN ABOVENAMED COMPANY AND SELLER OF THE LAND SITUATED AT VILLAGE BHAURASALA FOR TOTAL CONSIDERATION OF RS.16 4838000 WERE FOUND AND SEIZED. HOWEVER, LD. CIT(A) HAS CONFIRMED THE ADDITION OF R S.164838000/- AND REST OF THE ADDITION WAS DELETED. WE HAVE PERUSED THE DOCUMENT WHICH WAS FOUND FROM THE POSSESSION OF THE ASSESSEE. THE DOCUMENT RELIED BY THE AO HAS TO BE READ AND INTERPRETED IN ITS TOTALITY. IN SEARCH AND SEIZURE CASES, AS HELD BY THE DELHI HIGH COURT IN THE CASE OF CIT VS. KULWANT RAI, 291 ITR 36 (DEL) W HEREIN IT IS HELD THAT IF THE ASSESSEE HAS NOT SIGNED THE AGREEMENT TO SELL THE PROPERTY, ADDITION TOWARDS RECEIPT OF EARNEST MONEY IN THE AGREEMENT COULD NOT BE MADE ON THE BAS IS OF MERE FACT THAT AGREEMENT WAS FOUND IN POSSESSION OF THE ASSESSEE. THE HONBL E DELHI HIGH COURT HAS HELD THAT IF THE DOCUMENT IS FOUND IN POSSESSION OF THE ASSESSEE , THE ADDITION COULD NOT BE SIMPLY MADE ON THE BASIS OF THIS AGREEMENT. IN THE INSTANT CASE, THE AGREEMENT WAS FOUND FROM THE POSSESSION OF THE ASSESSEE AND ON THE BASIS OF THE DOCUMENT, THE AO HAS MADE ADDITION OF RS.41.10 CRORES ON ACCOUNT OF UNEXPLAIN ED INVESTMENT IN THE LAND. THE ASSESSEE HAS TAKEN THE CONTENTION THAT ASSESSEE HAS NOT PURCHASED THIS BHAURSALA LAND BUT ASSESSEE HAS COLLECTED THE MONEY ON BEHALF OF SOME INTERESTED PURCHASER AND ASSESSEE WANTED TO PURCHASE THE LAND ON BEHALF OF S UCH PARTIES. THE AGREEMENT WAS FOUND WITH PHOENIX DEVCONS P. LTD., THE OWNER OF TH E LAND. THE STATEMENTS OF THE OWNERS OF THE LAND WERE RECORDED. THE OWNERS OF THE LAND STATED THAT THEY HAVE MADE AGREEMENT AND ASSESSEE HAS NOT SIGNED ON IT. THE AG REEMENTS WERE NOT BEARING ANY NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 24 DATE. AGREEMENTS WERE UNREGISTERED.THEREAFTER, THE LAND WAS PURCHASED BY TWO OTHER COMPANIES NAMELY,M/S. DEVCON P. LTD. AND ARCADIA DE VCONS P. LTD. THE SALE DEEDS OF THESE TWO COMPANIES HAVE BEEN PRODUCED BEFORE US. W E FOUND THAT ASSESSEE IS NOWHERE CONNECTED WITH THESE TWO COMPANIES AND ONE MR. RANVIR SINGH CHHABRA HAD MADE PAYMENT TO THE SELLER OUT OF HIS BANK ACCOUNT. THE ASSESSEE HAS ALSO PRODUCED THE BANK STATEMENTS OF RANVIR SINGH CHHABRA AND DEP ARTMENT HAS ALSO ACCEPTED FOR AY 2010-11 THAT M/S. ARCADIA DEVCONS P. LTD. HAS PURCH ASED THIS LAND. THEREFORE, WE ARE OF THE VIEW THAT THOUGH THE DOCUMENT IS FOUND FROM THE POSSESSION OF THE ASSESSEE, WE HAVE TO READ THE DOCUMENT AS A WHOLE AND WE ARE OF THE VIEW THAT THE ADDITION CANNOT BE MADE IN THE HANDS OF THE ASSESSEE. THE ADDITION CAN BE MADE ONLY IN RESPECT OF INITIAL INVESTMENT OF RS.1,33,37,500/- WHICH WAS MA DE BY THE ASSESSEE EITHER HIMSELF OR BY HIS VARIOUS INVESTORS BY RECEIVING FUNDS EITHER DIRECTLY FROM THE INVESTORS OR FROM VARIOUS PERSONS AS BORROWINGS FROM THE INVESTORS.IN VIEW OF THE ABOVE FACTS, IN OUR OPINION, THOUGH THE DOCUMENT WAS FOUND FROM THE POS SESSION OF THE ASSESSEE, THE ASSESSEE HAS NOT MADE THE ENTIRE INVESTMENT IN THE BHAURASALA LAND. WE ARE OF THE VIEW THAT THE STRICT RULES OF EVIDENCE ARE NOT APPL ICABLE IN INCOME-TAX PROCEEDINGS AND WE HOLD THAT ASSESSEE HAD ENTERED INTO AGREEMENT WI TH SIX AGREEMENTS FOR PURCHASE OF 11.592 HECTARES LAND SITUATED AT VILLAGE BHOURASALA WITH SHRI KEDAR PATEL AND OTHERS FOR A TOTAL CONSIDERATION OF RS.16,48,38,000/-. WE ALSO FIND FROM THE COPIES OF THE AGREEMENTS FILED BY THE ASSESSEE AT PAGE NOS. 239 T O 262 OF THE PAPER BOOK THAT THESE AGREEMENTS WERE ENTERED INTO BY THE ASSESSEE ON 03. 9.2007 AND WE ALSO FIND THAT THE CO. M/S. PDPL, ON WHOSE BEHALF THESE AGREEMENTS WER E PURPORTED TO HAVE BEEN EXECUTED, HAD COME INTO EXISTENCE ON 24.9.2007. FRO M THE AGREEMENTS, WE NOTED THAT THE FIRST PAYMENTS TO THE SELLERS WERE MADE IN CASH AND THUS THERE CANNOT BE ANY DOUBT THAT SUCH PAYMENTS WERE MADE BY THE ASSESSEE AND NO T BY THE COMPANY. DURING THE COURSE OF HEARING, WE DIRECTED THE ASSE SSEE TO PRODUCE THE COPY OF SALE DEED OF SUBJECT LAND DULY EXECUTED IN FAVOUR O F M/S. M.R. DEVCONS P. LTD. AND M/S. ARCADIA DEVCONS PVT. LTD. BY THE SAME SELLERS WHOSE NAMES WERE STATED IN THE SALE AGREEMENTS. SUCH SALE DEED PROVES THE ASSERTIONS OF THE ASSESSEE THAT THE ACTUAL AND BENEFICIARY OWNERS OF THE LAND WERE ABOVE TWO COMPA NIES ONLY AND THE ASSESSEE COULD NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 25 NOT BE DEEMED TO HAVE MADE ANY PAYMENT OVER AND ABO VE THE INITIAL PAYMENT OF RS.1,33,37,500/- TOWARDS PURCHASE OF THE SAID LAND. EVEN FROM THE COPIES OF THE BANK STATEMENTS OF SHRI RANVEER SINGH CHHABRA AND M/S. M .R. DEVCONS PVT. LTD. IT MAY BE OBSERVED THAT PAYMENTS TO THE SELLERS HAVE FLOWN OU T FROM THE BANK ACCOUNTS OF THESE PERSONS ONLY AND IT WAS ONLY THESE TWO PARTIES ONLY WHO MADE PAYMENTS TO SHRI KEDAR PATEL (KHATI) AND OTHERS TOWARDS PURCHASE OF THE SU BJECT LAND. FROM THE COPIES OF THE PASS-BOOKS OF THE SELLERS, AS PLACED AT PAGE NO.460 TO 467 OF OUR PAPER-BOOK, IT TRANSPIRES THAT PAYMENT IN THE BANK ACCOUNTS OF THE SELLERS HAVE GOT CREDITED THROUGH THE BANK ACCOUNTS OF THE ULTIMATE BUYERS OF THE LAN D I.E. M/S. M.R. DEVCONS PVT. LTD. THROUGH ITS DIRECTOR SHRI RANVEER SINGH CHHABRA. EV EN THE PAYMENTS TO THE SELLERS, AS PER THE AO PARA 8.14 OF THE ASSESSMENT ORDER, HAVE BEEN MADE FROM THE BANK ACCOUNTS OF SHRI RANVEER SINGH CHHABRA. FROM THE BA NK STATEMENTS/FINANCIAL STATEMENTS/AUDITED RECORDS, THE GENUINENESS AND EXI STENCE OF BOTH THE COMPANIES GET ESTABLISHED. EVEN IN THE CASE OF M/S. ARCADIA DEVCO NS PVT. LTD. ASSESSMENT U/S 148/143(3) WAS FRAMED FOR A.Y. 2010-11 BY ITO-3(1) AND DURING THE COURSE OF SUCH ASSESSMENT, THE SOURCES OF SUCH COMPANY FOR PURCHAS E OF THE SUBJECT LAND WERE EXAMINED BY THE AO.IF ANY DOCUMENT IS TO BE RELIED UPON AS AN EVIDENCE THEN ITS ENTIRE CONTENTS HAVE TO BE READ AND INTERPRETED IN ITS TOT ALITY AND PART REFERENCE ON PICK-AND- CHOOSE METHOD SHOULD NOT BE PERMITTED. FROM A PERUS AL OF THE SALE AGREEMENTS, AND SUMMARY THEREOF PLACED ON PAGE NO.263 OF THE ASSESS EES PAPER-BOOK, WE FIND THAT A SUM OF RS.39,37,500/-, RS.3,72,500/-, RS.41,02,500/ -, RS.8,36,250/- AND RS.40,88,750/- HAVE BEEN STATED TO HAVE BEEN PAID, ON 03-09-2007, RESPECTIVELY TO SHRI BABULAL KHATI, SHRI MALKHAN KHATI, SHRI BADRILAL KHATI, SMT. SURAJ BAI KHATI AND SHRI KEDAR KHATI AGGREGATING TO A SUM OF RS.1,33,37,500/-. FOR THE R EMAINING CONSIDERATION, THERE IS MENTION OF PAYMENT OF SCHEDULE FOR FUTURE DATES WIT H THE NARRATION SHALL BE PAID. WE FIND THAT LD. AO HAS NOT GIVEN ANY FINDING TO THE E FFECT THAT ANY EVIDENCE WAS FOUND AS REGARD TO MAKING OF THE PAYMENT TO THE SELLERS OF T HE LAND ON THE VARIOUS DATES SUBSEQUENT TO THE FIRST PAYMENT DATE I.E. 03-09-200 7. WE FIND THAT EVEN FROM THE BANK STATEMENTS OF THE SELLERS OF THE LAND, AS REFERRED TO BY THE AO, AT PARA 8.14 OF HIS ORDER, NO FINDING AS REGARD TO MAKING OF PAYMENT BY THE AS SESSEE TO THE SELLERS OF THE LAND WAS NOTED BY THE AO. AFTER HAVING PAID THE ADVANCE OF RS.1,33,37,500/-, AS NOTED IN NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 26 THE SALE AGREEMENTS, THE ASSESSEE COULD NOT MAKE AN Y FURTHER PAYMENT TO THE SELLERS OF THE LAND WITH THE RESULT THAT THE SELLERS HAD ULTIM ATELY SOLD THE LAND TO SOME THIRD PARTIES. IN OUR CONSIDERED VIEW, IT IS NOT IN DISPUTE THAT T HE ASSESSEE DID NOT OWN THE SUBJECT LAND AT ANY POINT OF TIME AND EVEN FROM THE STATEME NTS OF THE SELLERS AS RECORDED BY THE AO, UNDER S. 131 OF THE ACT, THE ABOVE FACT HAS CLE ARLY EMERGED OUT. SUCH FACT FURTHER GETS FORTIFIED FROM THE FINDINGS GIVEN BY THE AO HI MSELF AT PARA 8.15 OF THE IMPUGNED ORDER IN WHICH HE HAS CLEARLY SAID THAT THE REGISTR IES OF THE SAID LAND WERE FOUND MADE IN THE NAME OF SOME OTHER COMPANIES I.E. M/S. M.R. DEV CONS AND M/S. ARCADIA DEVCONS PVT. LTD. FROM THE ABOVE STATED FACTUAL MATRIX, ONE THING EM ERGES OUT THAT THE ASSESSEE HAD INITIALLY MADE THE AGREEMENT FOR PURCHASE OF SU BJECT LANDS BY PAYING AN AGGREGATE SUM OF RS.1,33,37,500/- IN CASH OUT OF HIS OWN RESO URCES AND SUBSEQUENTLY, THE ASSESSEE HAD SOLD THE ENTIRE DEAL TO M/S. M.R. DEVC ONS PVT. LTD. AND M/S. ARCADIA DEVCONS PVT. LTD.. ACCORDINGLY, THESE TWO COMPANIES , AFTER MAKING PAYMENTS FROM TIME TO TIME, FROM THEIR OWN RESOURCES, GOT THE SUBJECT LAND REGISTERED IN THEIR OWN NAME AND BECAME THE OWNERS.IN OUR CONSIDERED VIEW, FROM THE COMPUTER PRINT OUTS OR OTHER LOOSE PAPERS REFERRED TO BY THE AO AT PARA 8.10, 8.11, 8. 12 IT CANNOT BE ESTABLISHED THAT THE ASSESSEE MADE ANY PAYMENT TOWARDS PURCHASE OF BHOUR ASLA LAND OVER AND ABOVE THAT DISCUSSED IN THE PRECEDING PARAS. WE FIND THAT ALTH OUGH IN THE BODY OF THE ASSESSMENT ORDER THE AO HAS HEAVILY RELIED UPON THE COPIES OF THE SALE AGREEMENTS FOUND FROM THE PREMISES OF PDPL BUT WHILE MAKING THE ADDITION THE AO HAS ABRUPTLY SHIFTED HIS STAND FOR RELIANCE ON ONE EXCEL SHEET STATED TO HAVE BEEN FOUND FROM THE PREMISES OF M/S. PHOENIX DEVCONS PVT. LTD.. THE AO HAS MADE REFERENC E OF SUCH EXCEL SHEET AT PAGE NO.16 OF HIS ORDER BY REPRODUCING THE SAME. ON A CA REFUL PERUSAL OF SUCH EXCEL SHEET, WE FOUND THAT SUCH EXCEL SHEET IS NOT IN RESPECT OF THE BHOURASLA LAND AS WRONGLY NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 27 INTERPRETED BY THE AO. WE FOUND THAT SUCH EXCEL SHE ET IS IN RESPECT OF SOME PHOENIX WINGS PROJECT WHICH WAS PROMOTED BY SOME OTHER COMP ANY NAMELY, M/S. PHOENIX LEISURE & LIFESTYLE PVT. LTD.. WE ALSO FOUND THAT S UCH EXCEL SHEET NOTING IS IN RESPECT OF 110 ACRES PROJECT WITH SOME HOTEL AND MALL WHEREAS AT BHOURASLA THE TOTAL AREA OF THE SUBJECT LAND, AS PER THE AGREEMENTS, WAS FOUND TO B E OF 11.592 HECTARES I.E. OF APPROXIMATELY 29 ACRES. FURTHER, AS PER THE EXCEL S HEET THE PER ACRE RATE OF THE LAND IS RS.80 LACS WHEREAS IN THE AGREEMENTS THE RATES HAVE BEEN STATED TO BE AT RS.55 LACS PER ACRE ONLY. FURTHER, FROM THE PAYMENT DETAILS GI VEN IN THE TABLE OF THE EXCEL SHEET, WE FOUND THAT SUCH TABLE DOES NOT MATCH WITH THE PAYME NT DETAILS GIVEN BY THE AO HIMSELF AT PARA 8.14 OF HIS ORDER. WE ALSO FIND FORCE IN TH E CONTENTION OF THE A/R THAT EVEN IN BS- 8 THERE IS NO MENTION OF PAYMENT OF RS.41,10,00,000 /- AND ON THE CONTRARY, AS PER THE AOS OWN FINDINGS THE PAYMENTS STATED IN SUCH DIARY AGAINST THE SUBJECT LAND WERE TO THE EXTENT OF RS.52,00,000/- ONLY. IN NUTSHELL, TH E EXCEL SHEET REFERRED TO BY THE AO DOES NOT PERTAIN TO THE BHOURASLA LAND IN RESPECT O F WHICH SALE AGREEMENTS WERE FOUND. ACCORDINGLY, IN OUR VIEW, THERE WAS ABSOLUTELY NO J USTIFICATION FOR THE AO TO ESTIMATE THE INVESTMENT IN THE BHOURASLA LAND AT RS.41,10,00,000 /- BY COMMITTING A PATENT ERROR OF LINKING THE AGREEMENTS PERTAINING TO BHOURASLA LAND WITH THE EXCEL SHEETS PERTAINING TO SOME OTHER PROJECT/LAND. WE ACCORDINGLY FIND THAT T HE ASSESSEE HAD MADE PAYMENTS AGGREGATING TO A SUM OF RS.1,33,37,500/- ONLY, DURI NG THE PREVIOUS YEAR UNDER CONSIDERATION, FOR THE PURCHASE OF THE LAND AT BHO URASLA. ACCORDINGLY, THE SAME IS LIABLE FOR ADDITION U/S 69/69B OF THE INCOME-TAX AC T. ASSESSEE HAS TAKEN A PLEA THAT EVEN SUCH INVESTMENT OF RS.1,33,37,500/- WAS MADE BY THE ASSESSEE ON BEHALF OF HIS VARIOUS INVES TORS BY RECEIVING FUNDS EITHER NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 28 DIRECTLY FROM THE INVESTORS THEMSELVES OR FROM VARI OUS PERSONS AS BORROWING ON BEHALF OF THE INVESTORS. THE DETAILS OF RECEIPTS OF SUCH F UNDS ARE EVIDENT FROM THE BS-8 DIARY WHICH WAS FOUND AND SEIZED FROM THE ASSESSEES PREM ISES. AT VARIOUS PLACES LIKE AT PARA 12.5 OF THE ASSESSMENT ORDER, THE AO HIMSELF H AS GIVEN CLEAR FINDING THAT THE ASSESSEE HAD BORROWED FUNDS FROM SHRI MANISH KEDIA, SHRI SUSHIL GOLECHA, SHRI ROHIT SETHI, ETC. THEREFORE, ONCE THE BORROWING OF THE F UNDS BY THE ASSESSEE IS ADMITTED BY THE REVENUE ITSELF, ITS AVAILABILITY FOR MAKING INV ESTMENT BY THE ASSESSEE IN VARIOUS ASSETS CANNOT BE RULED OUT. THE ASSESSEE FURTHER CO NTENDED THAT IN THE BS-8 DIARY, THE RECEIPT OF FUNDS BY THE ASSESSEE FROM VARIOUS PERSO NS HAVE CLEARLY BEEN REFLECTED AND THE AUTHENTICITY OF SUCH DIARY WAS DULY ACCEPTED IN SO MANY WORDS BY THE AO HIMSELF, IN THE BODY OF THE ASSESSMENT ORDER ITSELF, THEREFORE, FOLLOWING THE PRINCIPLE OF COMPLETE RELIANCE ON ONE DOCUMENT, DUE WEIGHTAGE DESERVES TO BE GIVEN TO THE SOURCES OF FUNDS MENTIONED IN SUCH DIARY. THE ASSESSEE CONTENDED THA T AS PER THE SCHEME OF THE LAW, ONLY REAL INCOME CAN BE ASSESSED IN THE HANDS OF TH E ASSESSEE. THE ASSESSEE FURTHER CONTENDED THAT AS PER THE PROVISIONS OF S. 69/69B O F THE ACT, IF AN ASSESSEE OFFERS AN EXPLANATION REGARDING SOURCES OF CERTAIN INVESTMENT , THEN WITHOUT DISCARDING SUCH EXPLANATION, NO ADDITION CAN BE MADE. HOWEVER, FOR VERIFYING THE CLAIM OF THE ASSESSEE AS REGARD TO THE SOURCES OF AFORESAID RS.1,33,37,50 0/-, WE RESTORE THE MATTER TO THE FILE OF THE AO WITH A SPECIFIC DIRECTION THAT HE WOULD C ORRELATE THE INVESTMENT OF RS.1,33,37,500/- WITH THE FUNDS SHOWN TO HAVE BEEN RECEIVED BY THE ASSESSEE FROM VARIOUS PERSONS, EITHER AS BORROWING OR AS CUSTODIA N, AS PER THE DIARY BS-8. IF THE SOURCES OF SUCH INVESTMENTS ARE NOT FOUND CORRELATE D, THE ADDITION TO THAT EXTENT, SUBJECT TO MAXIMUM OF RS.1,33,37,500/- SHALL BE MAI NTAINED IN RESPECT OF UNEXPLAINED NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 29 INVESTMENT IN LAND AT BHAURASLA. ACCORDINGLY, THE G ROUNDS OF APPEAL OF THE ASSESSEE 1(A) AND 1(B) ARE PARTLY ALLOWED AND GROUND NO.6 OF THE REVENUE IS DISMISSED. ASSESSEES GROUND NO. 2(A) & 2(B) THE FACTS RELATING TO THE ABOVE ISSUE ARE THAT THE ASSESSEE IS A PROMOTER OF A COMPANY NAMED AND STYLED AS M/S. PHOENIX LEISURE & LIFESTYLE PVT. LTD. AND SUCH COMPANY IS ENGAGED IN PROJECT REFERRED WITH DIFFERE NT NAMES SUCH AS PHOENIX GREEN, PHOENIX GRANDE, ZENITH TOWER, ETC. THE AO FURTH ER NOTED THAT THE PHOENIX GREEN PROJECT WAS LOCATED IN THE VILLAGE PIPLYA KUMAR, NE AR BOMBAY HOSPITAL, INDORE AND IT WAS A RESIDENTIAL PROJECT SPANNING THE AREA OF OVER 2 LAKH SQUARE FEET. THE AO FURTHER NOTED THAT FROM THE VARIOUS LOOSE PAPERS FOUND DURI NG THE COURSE OF SEARCH, IT WAS FOUND THAT THE ASSESSEE HAD PAID CERTAIN AMOUNT FOR ACQUI RING THE LAND AT VILLAGE PIPLYA KUMAR BUT RECORDED ONLY A PART OF EXPENDITURE IN THE BOOK S OF M/S. PHOENIX LEISURE & LIFESTYLE PVT. LTD. THE AO REQUIRED THE ABOVE NAMED COMPANY T O FURNISH THE DETAILS REGARDING INVESTMENT MADE IN THE PURCHASE OF THE LAND AND SOU RCES OF THE INVESTMENT IN SUCH LAND. IN REPLY, THE ABOVE NAMED COMPANY SUBMITTED B EFORE THE AO THAT SINCE THE PHOENIX GREEN PROJECT WAS BEING CARRIED OUT UNDER A RATIO DEAL AGREEMENT AND, THEREFORE, IT WAS NOT REQUIRED TO MAKE ANY PURCHASE S OF THE LAND. SUBSEQUENTLY, THE AO ISSUED A SUMMONS UNDER S. 131 TO THE ASSESSEE. THE ASSESSEE, WHILE MAKING THE STATEMENT BEFORE THE AO, ALSO STATED THE SAME FACTS I.E. PHOENIX GREEN PROJECT WAS ON RATIO DEAL BASIS. THE ASSESSEE ALSO STATED IN PERSO N BEFORE THE AO THAT THE RATIO DEAL WAS SUBSEQUENTLY CANCELLED AND NO PAYMENT WAS REQUI RED TO BE MADE EITHER BY HIMSELF OR BY M/S. PHOENIX LEISURE & LIFESTYLES PVT. LTD. T OWARDS ACQUIRING THE LAND AT VILLAGE PIPLYA KUMAR. THE AO DISBELIEVED THE THEORY OF RATI O DEAL AGREEMENT AND ITS SUBSEQUENT CANCELLATION. THE AO, BY MAKING REFERENC E OF CERTAIN LOOSE PAPERS AND A DIARY INVENTORIZED AS BS-8 NOTED THAT THE ASSESSEE HAD MADE PAYMENT ON VARIOUS OCCASIONS TO SHRI MOHAN CHUGH AND SHRI KAMAL KUMAR. FINALLY, THE AO DRAWN AN INFERENCE THAT A TOTAL SUM OF RS.21,26,75,000/- WAS PAID BY THE ASSESSEE TO SHRI MOHAN CHUGH AND SHRI KAMAL KUMAR FOR ACQUIRING THE LAND A T VILLAGE PIPLYA KUMAR AND BY PRESUMING THAT SUCH PAYMENTS MIGHT HAVE BEEN PAID E QUALLY IN TWO ASSESSMENT YEARS, NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 30 VIZ. A.Y. 2008-09 AND A.Y. 2009-10, MADE AN ADDITIO N OF RS.10,63,37,500/- IN THE HANDS OF THE ASSESSEE ON SUBSTANTIVE BASIS WITH CORRESPON DING ADDITION IN THE HANDS OF M/S. PHOENIX LEISURE & LIFESTYLES PVT. LTD. ON ACCOUNT O F UNEXPLAINED EXPENDITURE IN THE LAND FOR PHOENIX GREEN PROJECT. THE RELEVANT FINDINGS OF THE ASSESSING OFFICER ARE RECORDED AT PARA 15.1 TO PARA 15.13 FROM PAGE NO. 91 TO 106 OF THE ASSESSMENT ORDER. MATTER CARRIED TO THE CIT(A) AND AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE, THE LD. CIT(A) CONFIRMED THE ADDITION OF RS.10,63,37,500/- BY GIVING THE DETAILED FINDINGS FROM PARA 15.4 AT PAGE NO.104 TO PARA 15.6 AT PAGE NO.107 OF HIS ORDER. THE LD. AR MADE ORAL SUBMISSION AS WELL AS WRITTEN SUBMISSION AS UNDER: IN THE INSTANT CASE, THE AO ON THE BASIS OF VARIOUS LOOSE PAPERS AND MORE PARTICULARLY PAGE NO.25 OF THE LPS-A/3 SEI ZED FROM THE PREMISES OF M/S. PHOENIX DEVCONS PVT. LTD., REACHED TO THE CONCLUSION THAT THE ASSESSEE HAD MADE A PAYMENT OF RS.18,42,5 0,000/- TO SHRI MOHAN CHUGH AGAINST PURCHASE OF CERTAIN LAND AT VIL LAGE PIPLYA KUMAR. THE AO FURTHER, ON THE BASIS OF ONE LOOSE PAPER INV ENTORIZED AS PAGE NO.182 OF LPS-A/23 [PB-316] FORMED THE VIEW THAT TH E ASSESSEE, BESIDES MAKING PAYMENT OF RS.18,42,50,000/- TO SHRI MOHAN C HUGH, HAD ALSO MADE A PAYMENT OF RS.2,53,75,000/- TO SOME MR. KAMA L KUMAR TOWARDS PURCHASE OF THE LAND IN THE SAID VILLAGE PIPLYA KUM AR. ACCORDINGLY, AS PER THE AO, THE ASSESSEE HAD MADE TOTAL INVESTMENT OF R S.21,26,75,000/- (SIC. RS.20,96,25,000/-) IN PURCHASE OF THE LAND AT PIPLYA KUMAR. ON A PERUSAL OF THE SUBJECT LOOSE PAPER I.E. PAGE NO.182 OF LPS-A/23 [PB-316] IT SHALL BE OBSERVED THAT ON SUCH LOOSE PAPERS, THE RE IS A MENTION OF AN AMOUNT OF RS.21,26,75,000/- WHICH COMPRISES COST OF PURCHASES FROM SHRI MOHAN CHUGH AND SHRI KAMAL KUMAR RESPECTIVELY AT RS .18,73,00,000/- AND RS.2,53,75,000/-. ACCORDING TO THE AO, THERE WA S NO CLEAR-CUT DEMARCATION AS TO IN WHICH YEAR THE INVESTMENTS HAV E BEEN MADE AND, THEREFORE, THE AO ASSUMED THAT THE PAYMENTS WERE MA DE EQUALLY IN TWO NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 31 ASSESSMENT YEARS I.E. IN A.Y. 2008-09 AND A.Y. 2009 -10 AND, CONSEQUENTLY, ADDITION TO THE EXTENT OF RS.10,63,37 ,500/- WAS MADE IN THE INCOME OF THE ASSESSEE IN EACH OF THE TWO ASSESSMEN T YEARS. IT IS SUBMITTED THAT IN THE INSTANT CASE, THE IMP UGNED ADDITION SO MADE IS A RESULT OF BALD ESTIMATION AND GUESS WORK OF THE LEARNED AO INASMUCH THE LEARNED AO HIMSELF, WITHOUT BEING SURE ABOUT THE ACTUAL PREVIOUS YEAR OF THE ALLEGED TRANSACTIONS, DIVIDED THE TOTAL ADDITION OF RS.21,26,75,000/-, EQUALLY, IN TWO ASSESSMENT YEARS VIZ. A.Y. 2008-09 AND A.Y. 2009-10. IT IS SUBMITTED THAT THE VERY FIR ST AND FOREMOST CONDITION FOR INVOKING THE PROVISIONS OF SECTION 69/69B OF TH E ACT ARE THAT ASSESSEE MUST BE FOUND TO HAVE MADE CERTAIN INVESTMENTS IN T HE FINANCIAL YEAR IMMEDIATELY PRECEDING THE RELEVANT ASSESSMENT YEAR AND WITHOUT GIVING SUCH DEFINITE FINDING, THE PROVISIONS OF SECTION 69 /69B CANNOT BE INVOKED. RELIANCE IS PLACED ON FOLLOWING JUDICIAL PRONOUNCEM ENTS: (I) SAIF ALI KHAN MANSURALI VS. ACIT (2012) 13 ITR 0204 (MUM.) (II) USHAKANT N. PATEL VS. CIT (2006) 282 ITR 553 ( GUJ.) [JCB PAGE NO. 311 TO 317] (III) ACIT VS. SHAILESH S. SHAH (1997) 59 TTJ 574 (MUM) IT IS SUBMITTED THAT THE SUBJECT ADDITION HAS BEEN MADE BY THE LEARNED AO ONLY ON THE BASIS OF SOME LOOSE PAPER, B EING IN THE FORM OF SOME COMPUTER PRINTOUTS TAKEN DURING THE COURSE OF THE SEARCH IN THE PREMISES OF A COMPANY NAMED & STYLED AS 'M/S. PHOEN IX DEVCONS PVT. LTD.'. SUCH FACT IS EVIDENT FROM THE FINDINGS GIVEN BY T HE LEARNED AO HIMSELF AT PARA 15.5.1 AT PAGE NO. 95 OF THE ASSESS MENT ORDER. IT IS SUBMITTED THAT IT IS A SETTLED LAW THAT PRESUMPTION AS CONTEMPLATED UNDER S.292C AND S.132(4A) IS NOT AVAILABLE IN RESPECT OF THE DOCUMENTS NOT NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 32 FOUND IN THE PREMISES OF THE ASSESSEE BUT IN THE PR EMISES OF SOMEONE ELSE. IN THE INSTANT CASE, THE LEARNED AO HAS PLACED HEAV Y RELIANCE ON ONE LOOSE PAPER INVENTORIZED AS PAGE NO. 25 OF LPS-A/3 [KINDLY REFER PB PAGE NO. 320] FOR MAKING THE IMPUGNED ADDITION BY A LLEGING THAT THE ASSESSEE HAD MADE PAYMENT AMOUNTING TO RS.18,42,50,000/- TO SHRI MOHAN CHUGH OUT OF HIS UNDISCLOSED INCOME. SUCH LOO SE PAPER IS PURPORTED TO BE IN THE FORM OF RECEIPTS AND PAYMENT S. HOWEVER, ON A PERUSAL OF SUCH PURPORTED RECEIPT & PAYMENT STATEME NT, IT SHALL BE OBSERVED THAT THERE IS RESULTING EXCESS OF PAYMENTS OVER RECEIPTS BY A SUM OF RS.13,54,91,650/-. HOWEVER, THE SOURCES OF MEETING SUCH DEFICIENCIES HAVE NOT BEEN MENTIONED ON SUCH STATEM ENT. IT IS SUBMITTED THAT IN ANY RECEIPT & PAYMENT ACCOUNT, WITHOUT HAVI NG ANY OPENING CASH BALANCE, THE AGGREGATE OF PAYMENTS CANNOT EXCE ED THE AGGREGATE OF RECEIPTS AND IF IT IS SO, SUCH RECEIPT & PAYMENT ACCOUNT HAS TO BE TREATED AS FAULTY ONE AND ACCORDINGLY, IT CANNOT BE TRUSTED UPON. IN VIEW OF SUCH POSITION, THE RELIANCE PLACED BY T HE LEARNED AO ON SUCH A FAULTY RECEIPT & PAYMENT ACCOUNT WAS PATENTL Y WRONG AND CONSEQUENTLY, THE ADDITION OUGHT TO HAVE BEEN DELET ED BY THE LEARNED CIT(A) ON THIS GROUND ALONE. RELIANCE IS PLACED ON THE DECISION OF ACIT VS. ASHOK KUMAR VIG (2007) 106 TTJ 422 (RANCHI). THE FACT REMAINED THAT DURING THE ASSESSMENT YEAR UNDER CONSIDERATION I.E. A.Y. 2008-09, THE ASSESSEE, IN T HE CAPACITY OF THE PROMOTER AND DIRECTOR OF A COMPANY NAMED AND TITLE D AS M/S. PHOENIX LEISURE & LIFESTYLE PVT. LTD. [FOR THE SAKE OF BRE VITY REFERRED TO AS PLLPL], HAD ENTERED INTO ONE MOU FOR DEVELOPMENT OF CERTAIN PIECES OF LAND ADMEASURING NEARLY 1.023 HECTARES SITUATED AT VILLA GE PIPLYA KUMAR NEAR BOMBAY HOSPITAL, INDORE WITH THE OWNER OF SUCH LAND NAMELY M/S. SHIVALIKA REALITIES PVT. LTD. [FOR THE SAKE OF BREV ITY REFERRED TO AS SRPL]. NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 33 AS PER THE MOU, CERTAIN RESIDENTIAL MULTI-STOREY BU ILDING BLOCKS WERE PROPOSED TO BE CONSTRUCTED BY PLLPL AT ITS OWN COST ON THE LAND OWNED BY SRPL. IN CONSIDERATION, THE SRPL WAS TO RECEIVE 35% SHARE IN THE CONSTRUCTED PROPERTY AND PLLPL WAS TO RECEIVE 65% S HARE IN THE CONSTRUCTED PROPERTY. THE PLLPL STARTED CONSTRUCTIN G THE RESIDENTIAL BUILDINGS ON THE SAID LAND AND ALSO STARTED BOOKING OF THE FLATS. FROM BOOKING OF THE FLATS, THE ASSESSEE RECEIVED SOME ON -MONEY WHICH HAS BEEN SEPARATELY ADDED BY THE AO IN THE ASSESSMENT O F M/S. PHOENIX LEISURE & LIFESTYLE PVT. LTD.. THE RECEIPT OF ON-MO NEY, IN THE INDIVIDUAL CAPACITY, WAS ADMITTED BY THE ASSESSEE AS WELL AS T HE COMPANY PLLPL. IT IS SUBMITTED THAT THE MOU WAS RENEGOTIATED FROM TIM E TO TIME AND ULTIMATELY, IT CAME TO AN END DUE TO FAILURE ON THE PART OF THE PLLPL TO COMPLETE THE PROJECT WITH THE RESULT THAT THE CONST RUCTED PROPERTIES ALONG WITH THE LIABILITIES TOWARDS CUSTOMERS BOOKING WERE HANDED OVER BY PLLPL TO THE SRPL. DURING THE COURSE OF THE ENTIRE SEARCH PROCEEDINGS, NOT A SINGLE DOCUMENT OR ANY LOOSE PAPER IN THE FORM OF A NY SALE AGREEMENT OR SALE DEED OR SAUDA CHITTHI ETC. WERE F OUND FROM WHICH IT COULD HAVE BEEN ESTABLISHED THAT THE APPELLANT M ADE ANY PAYMENT FOR PURCHASE OF ANY LAND AT VILLAGE PIPLYA KUMAR. O N THE CONTRARY, THE AO HIMSELF, AT PARA 15.4.1 AND 15.4.2 OF THE ORDER, BASED UPON AN INDEPENDENT ENQUIRY CONDUCTED THROUGH THE CONCERNIN G PATWARI, HAS GIVEN THE DETAILS OF OWNERSHIP OF VARIOUS LAND SITU ATED AT VILLAGE PIPLYA KUMAR. IT IS SUBMITTED THAT IN THE DETAILS, NOWHERE THE NAME OF THE APPELLANT IS APPEARING AS THE OWNER OF ANY P IECE OF LAND AT VILLAGE PIPLYA KUMAR. THE ENQUIRIES WERE CONDUCTED BY THE AO VIDE THE SUMMONS DATED 9.12.2011 WHICH PROVES THAT EVEN BY SUCH DATE, NO SUCH LAND AT VILLAGE PIPLYA KUMAR GOT TRANSFERRE D IN THE NAME OF THE APPELLANT AS ALLEGED BY THE AO. IN SUCH DETAILS , ONLY A SMALL PIECE NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 34 OF LAND ADMEASURING ONLY 0.093 HECTARES IS GETTING APPEARED IN THE OWNERSHIP OF M/S. PHOENIX LEISURE & LIFESTYLES PVT. LTD. . IT IS SUBMITTED THAT THE ENTIRE ADDITION OF RS.21,2 6,75,000/- MADE BY THE AO IS BASED MAINLY UPON THE LPS-A/23 PAGE NO.18 2 [PB-316] AND LPS-A/3 PAGE NO.25 [PB-320]. ON A PERUSAL OF PAGE N O.182 OF LPS-A/23, IT SHALL BE OBSERVED THAT IT IS IN THE NATURE OF ON E EXCEL SHEET IN WHICH THERE ARE 8 COLUMNS. THE COLUMNS DENOTES NAME OF TH E OWNER OF THE LAND, AREA, ACTUAL RATE, MARKET RATE, ACTUAL COST, MARKET COST, PAID AND BALANCE DUE. IT IS SUBMITTED THAT UNDER THE COLUMN ACTUAL COST AGAINST THE NAMES OF SHRI MOHAN CHUGH AND SHRI KAMAL KUMAR THERE IS A REFERENCE OF A SUM OF RS.18,73,00,000/- AND RS.2,53,75,000/- RESPECTIV ELY. HOWEVER, UNDER THE COLUMN PAID THERE IS A REFERENCE OF A SUM OF RS.13,35,00,000/- AND OF RS.11,00,000/- RESPECTIVELY AGAINST THE NAME OF SHR I MOHAN CHUGH AND SHRI KAMAL KUMAR. CORRESPONDINGLY, UNDER THE COLUMN OF THE BALANCE DUE A SUM OF RS.5,38,00,000/- AND A SUM OF RS.2,42 ,75,000/- HAVE BEEN SHOWN RESPECTIVELY DUE TO SHRI MOHAN CHUGH AND SHRI KAMAL KUMAR. IT MAY BE NOTED THAT ON SUCH LOOSE PAPER UNDER THE COL UMN OF AREA THERE IS A MENTION OF 2,04,800 SQ. FTS. WHICH IS THE TOTAL A REA OF THE PROJECT UNDER REFERENCE. IT IS SUBMITTED THAT WHEN THERE ARE AMPLE OF DOCUME NTARY EVIDENCES AS REGARD TO PAYMENT MADE TO SHRI MOHAN C HUGH BUT EXCEPT THE NOTING MADE IN ABOVE REFERRED EXCEL SHEET INVEN TORIZED AS LPS-A/23 PAGE NO.182, 184 AND 186, AS REGARD TO PAYMENT OF R S.11,00,000/- THERE IS NO OTHER EVIDENCE IN RESPECT OF ANY OTHER PAYMEN T MADE TO SHRI KAMAL KUMAR IN ALL THESE EXCEL SHEETS, PAYMENTS TO SHRI K AMAL KUMAR HAVE BEEN SHOWN AT RS.11,00,000/- ONLY AND REMAINING RS. 2,42,75,000/- HAVE BEEN SHOWN AS DUE. IT IS A SETTLED LAW THAT IN THE ASSESSMENT THERE IS NO SCOPE FOR ANY BALD ESTIMATION AND, FURTHER, IT IS A LSO A SETTLED LAW THAT ANY NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 35 DOCUMENT HAS TO BE RELIED UPON IN ITS ENTIRETY AND, THEREFORE, BASED UPON LPS-A/23 PAGE NO.182, 184 AND 186, IT HAS TO BE INF ERRED THAT THE PAYMENTS MADE TO SHRI KAMAL KUMAR WERE NOT TO THE E XTENT OF RS.2,53,75,000/- BUT THESE WERE TO THE EXTENT OF RS .11,00,000/- ONLY AS NOTED ABOVE. IT IS SUBMITTED THAT LPS-A/3 PAGE NO.21 [PB 317] CO NTAINS THE COMPLETE DETAILS OF THE SUBJECT DEAL AND AS ALSO TH E MODE, MANNER AND AMOUNT PAID BY THE ASSESSEE TOWARDS THE SUBJECT DEA L. IT IS SUBMITTED THAT AS PER SUCH LOOSE PAPER, THE RATIO OF SHRI MOHAN CH UGH, DIRECTOR OF SRPL WAS 25% AND THAT OF THE ASSESSEE AND HIS COMPANY WA S TO THE EXTENT OF 75%. AS PER THE LOOSE PAPER, IN CONSIDERATION OF AS SESSEE GETTING 75% SHARE IN THE CONSTRUCTED PROPERTY, THE ASSESSEE WAS REQUIRED TO PAY A SUM OF RS.12.28 CRORES TO SHRI MOHAN CHUGH. BESIDES RECEIVING RS.12.28 CRORES, SHRI MOHAN CHUGH WAS ALSO TO RECEIVE 25% SH ARE IN THE CONSTRUCTED PROPERTY. AGAIN, TOWARDS PAYMENT OF TOT AL CONSIDERATION OF RS.12.28 CRORES, SHRI MOHAN CHUGH WAS TO BE GIVEN A PLOT BEARING NO.RC-C-029, HAVING MARKET VALUE OF RS.8 CRORES, IN DUBAI. THE REMAINING 4.28 CRORES WAS TO BE PAID BY THE ASSESSE E FROM TIME TO TIME. AS PER THE SHEET, A SUM OF RS.4.14 CRORES WAS PAID TO SHRI MOHAN CHUGH DURING THE PERIOD FROM 15-07-2007 TO 15-10-2007 AND A SUM OF RS.0.14 CRORES WAS SHOWN AS BALANCE DUE. IN THIS SHEET, THE RE IS CLEAR MENTION OF A PAYMENT OF RS.4 CRORES BY THE ASSESSEE BY WAY OF CASH/CHEQUE FROM TIME TO TIME AND REMAINING RS.8 CRORES BY WAY OF ON E PLOT IN DUBAI. IT IS SUBMITTED THAT THE PLOT IN DUBAI WAS OWNED BY SHRI NITISH DOSHI, A DUBAI BASED INVESTOR AND FRIEND OF THE ASSESSEE WHOSE REF ERENCE WAS FOUND AT VARIOUS PLACES IN DIARY BS-8 AS ALSO IN OTHER DOCUM ENTS. IN PARTICULAR, AT PAGE NO.177 OF LPS-A/23 [PB-321], IT HAS BEEN CLEAR LY MENTIONED THAT A SUM OF RS.8 CRORES WOULD BE INVESTED BY SHRI NITISH DOSHI. IT IS SUBMITTED THAT SHRI NITISH DOSHI HAD SHOWN HIS INTEREST IN TH E SUBJECT DEAL BY BECOMING A PARTNER WITH THE ASSESSEE/ HIS COMPANY A ND IN CONSIDERATION, NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 36 SHRI NITISH DOSHI HAD AGREED TO GIVE A PLOT OF HIS OWNERSHIP SITUATED IN DUBAI TO SHRI MOHAN CHUGH ON A VALUATION OF RS.8,00 ,00,000/-. ATTENTION IS INVITED TO THE PAGE NO.25 OF THE LPS-A /3 [PB-320] WHICH IS IN THE NATURE OF A RECEIPT AND PAYMENT ACC OUNT OF PHOENIX GREEN PROJECT AND WHICH HAS BEEN HEAVILY RELIED UPO N BY THE AO FOR MAKING THE IMPUGNED ADDITION. FROM SUCH RECEIPT AND PAYMENT ACCOUNT IT MAY BE NOTED THAT THERE IS A MENTION OF TOTAL RE CEIPTS OF RS.7,43,70,652/- OF THE SAID PROJECT WHICH COMPRISES CASH RECEIPTS F ROM BOOKING OF FLATS AT RS.5,07,79,220/- AND CHEQUE RECEIPTS FROM BOOKING O F FLATS AT RS.2,35,91,432/-. AS AGAINST SUCH BOOKING RECEIPTS OF RS.7,43,70,652/-, PAYMENTS TOWARDS INDIRECT EXPENSES AND DEVELOPMENT EXPENSES HAVE BEEN SHOWN RESPECTIVELY AT RS.38,43,113/- AND RS.2, 17,69,190/- AGGREGATING TO RS.2,56,12,303/-. THUS, AFTER MAKING THE PAYMENTS, THERE CAN REMAIN AVAILABILITY OF FUNDS FOR MAKING ANY OTH ER PAYMENT TO THE EXTENT OF RS.4,87,58,349/- ONLY BUT IN THE SAID ACCOUNT A SUM OF RS.18,42,50,000/- HAS BEEN SHOWN TO HAVE BEEN PAID TO SHRI MOHANLAL CHUGH AND BECAUSE OF SHOWING OF SUCH PAYMENT, THERE IS REFLECTING A NEGATIVE CASH BALANCE I.E. DEFICIENCY OF RS.13,54,9 1,651/- AT THE BOTTOM OF THE SAID RECEIPT & PAYMENT ACCOUNT. SUCH NEGATIVE C ASH BALANCE PROVES THAT THE RECEIPT AND PAYMENT ACCOUNT WAS NOT CORREC T. IN FACT, THE AFORESAID SUM OF RS.18,42,50,000/- WAS PROPOSED TO BE GIVEN BY THE ASSESSEE SHRI MOHAN CHUGH IN THREE MOD ES (I) RS.8,00,00,000/- IN FORM OF PLOT BELONGING TO SHRI NITISH DOSHI SITUATED IN DUBAI; (II) A SUM OF RS.7,80,00,000/- IN FORM OF CA SH AND CHEQUE; AND (III) REMAINING RS.2,62,50,000/- IN FORM OF SHRI MOHAN CH UGHS SHARE IN THE FLATS OF THE PROJECT WHICH WAS TO BE CONSTRUCTED UN DER THE RATIO DEAL. IT IS SUBMITTED THAT SINCE EVENTUALLY THE DEAL CAME TO AN END, THE PROPOSAL FOR GIVING PLOT OF SHRI NITISH DOSHI TO SHRI MOHAN CHUG H COULD ALSO NOT GET MATERIALIZED. NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 37 OUT OF THE AFORESAID PAYMENT OF RS.7,80,00,000/- MA DE TO SHRI MOHAN CHUGH/HIS COMPANY SRPL, THROUGH CASH/ CHEQUE, THE ASSESSEE HAD PAID A SUM OF RS.1,00,00,000/- THROUGH TWO CHEQ UES OF RS.50,00,000/- EACH DATED 25-07-2007 AND 06-08-2007 . THE ASSESSEE HAD FURTHER MADE A PAYMENT OF RS.1,30,00,000/- THRO UGH THE ACCOUNT PAYEE CHEQUES ISSUED BY HIS ONE OTHER COMPANY NAMEL Y, PHOENIX DEVCONS PVT. LTD.. THE ASSESSEE HAD PAID THE REMAIN ING SUM OF RS.5,50,00,000/- IN THE FORM OF CASH, WHICH IN ITS TURN HAD EMANATED MAINLY FROM THE COLLECTION OF ON-MONEY FROM BOOKING OF FLATS IN THE PROJECT FOR WHICH A SEPARATE ADDITION HAS ALREADY BEEN MADE IN THE HANDS OF M/S. PHOENIX LEISURE & LIFESTYLE PVT. LTD.. IN EVIDENCE OF PAYMENT BY M/S. PHOENIX LEISURE & LI FESTYLE PVT. LTD., OF A SUM OF RS.1,00,00,000/- WE HAVE ALREADY FILED THE COPY OF THE BALANCE-SHEET OF SUCH COMPANY AS ON 31-03-2009 WHIC H IS PLACED AT PAGE NO.423 OF OUR PAPER BOOK. WE HAVE ALSO FILED A COPY OF THE BANK STATEMENT WHICH IS PLACED AT PAGE NO.429 OF THE PAP ER BOOK. LIKEWISE, IN SUPPORT OF PAYMENT MADE BY M/S. PHOENIX DEVCONS PVT . LTD., AT RS.1,30,00,000/- WE HAVE FILED A COPY OF AUDITED BA LANCE-SHEET OF SUCH COMPANY WHICH IS PLACED AT PAGE NO.425 OF THE PAPER BOOK. AS REGARD THE REMAINING PAYMENT OF RS.5,50,00,000/- MADE IN THE F ORM OF CASH, IT IS SUBMITTED THAT OUT OF SUCH CASH PAYMENTS, PAYMENTS AGGREGATING TO A SUM OF RS.4,87,58,350/- HAVE BEEN MADE BY THE ASSES SEE OUT OF THE ON- MONEY RECEIVED FROM VARIOUS CUSTOMERS AGAINST THE B OOKING OF FLATS. IT IS SUBMITTED THAT THE PAYMENT OF RS.4,87,58,350/- IS E VIDENT FROM THE LPS- A/3, PAGE NO.25 AS DISCUSSED IN PRECEDING PARA. IT IS FURTHER SUBMITTED THAT IN RESPECT OF RECEIPT OF ON-MONEY OF RS.4,87, 58,350/-, SEPARATE ADDITIONS AMOUNTING TO RS.3,43,44,220/- AND RS.1,64 ,35,000/- HAVE ALREADY BEEN MADE IN THE HANDS OF M/S. PHOENIX LEIS URE & LIFESTYLE PVT. LTD. RESPECTIVELY FOR A.Y. 2008-09 AND 2009-10. IN SUPPORT OF SUCH NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 38 ASSERTION, WE HAVE ALREADY FILED COPY OF THE ASSESS MENT ORDER OF M/S. PHOENIX LEISURE & LIFESTYLE PVT. LTD. WHICH IS PLAC ED AT PAGE NO.430 TO 434 OF THE PAPER BOOK. THE VARIOUS DOCUMENTARY EVID ENCES FURNISHED BY US HAVE NOT BEEN CONTRAVEND BY THE CIT DR. THE REMA INING SUM OF RS.62,41,650/- WAS PAID BY THE ASSESSEE IN CASH TO SHRI MOHAN CHUGH FOR WHICH, PRESENTLY, NO CORROBORATIVE EVIDENCES ARE AV AILABLE WITH THE ASSESSEE. TO SUM UP, IT IS SUBMITTED THAT THE ASSESSEE HAD PA ID ONLY A SUM OF RS.11,00,000/- TO SHRI KAMAL KUMAR. FURTHER, OUT OF SUM OF RS.18,42,50,000/- SHOWN TO HAVE BEEN PAID TO SHRI M OHAN CHUGH AT PAGE NO.25 OF LPS-A/3, A SUM OF RS.8,00,00,000/- AND RS. 2,62,50,000/- WERE RESPECTIVELY PURPORTED TO HAVE BEEN GIVEN IN THE FO RM OF PLOT IN DUBAI AND FLATS IN THE PROJECTS. FOR SUCH PURPORTED PAYMENTS IN KIND, NO CASE OF UNEXPLAINED INVESTMENT CAN BE MADE AGAINST THE ASSE SSEE. THE ASSESSEE HAD PAID ONLY A SUM OF RS.7,80,00,000/-, I N FORM OF CASH/ CHEQUE, OUT OF WHICH A SUM OF RS.2,30,00,000/- WAS PAID THROUGH EXPLAINED SOURCES I.E. THROUGH CHEQUES OF THE COMPA NIES AND THE REMAINING RS.5,50,00,000/- WAS PAID IN FORM OF CASH . AGAIN OUT OF RS.5,50,00,000/- A SUM OF RS.4,87,58,350/- WAS MADE OUT OF THE ON- MONEY RECEIVED AGAINST BOOKING OF FLATS IN THE PROJ ECT PHOENIX GREEN FOR WHICH SEPARATE ADDITIONS HAVE ALREADY BEEN MADE BY THE AO IN THE HANDS OF M/S. PHOENIX LEISURE & LIFESTYLE PVT. LTD. HOWEV ER, FOR REMAINING RS.62,41,650/- PAID TO SHRI MOHAN CHUGH, THE ASSESS EE HAS NO CONCRETE EVIDENCE OR EXPLANATION. THUS, IN NUTSHELL, AT THE WORST THE ASSESSEE COULD BE SAID TO HAVE MADE UNEXPLAINED INVESTMENT TO THE EXTENT OF RS.73,41,650/- ONLY [I.E. RS.11,00,000 + RS.62,41,6 50] IN TWO ASSESSMENT YEARS AND TO THIS EXTENT ONLY, ANY ADDITION CAN BE SUSTAINED. THE REMAINING ADDITION SO MADE BY THE LEARNED AO AND CO NFIRMED BY THE LEARNED CIT(A) DESERVES TO BE DELETED. NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 39 LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES B ELOW. WE HAVE HEARD RIVAL CONTENTIONS OF BOTH THE PARTIE S AND HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD. THE AO ON THE BASIS O F VARIOUS LOOSE PAPERS AND MORE PARTICULARLY PAGE NO.25 OF THE LPS-A/3 SEIZED FROM THE PREMISES OF M/S. PHOENIX DEVCONS PVT. LTD., REACHED TO THE CONCLUSION THAT T HE ASSESSEE HAD MADE A PAYMENT OF RS.18,42,50,000/- TO SHRI MOHAN CHUGH AGAINST PURCH ASE OF CERTAIN LAND AT VILLAGE PIPLYA KUMAR. THE AO FURTHER, ON THE BASIS OF ONE L OOSE PAPER INVENTORIZED AS PAGE NO.182 OF LPS-A/23 [PB-316] FORMED THE VIEW THAT TH E ASSESSEE, BESIDES MAKING PAYMENT OF RS.18,42,50,000/- TO SHRI MOHAN CHUGH, H AD ALSO MADE A PAYMENT OF RS.2,53,75,000/- TO SOME MR. KAMAL KUMAR TOWARDS PU RCHASE OF THE LAND IN THE SAID VILLAGE PIPLYA KUMAR. ACCORDINGLY, AS PER THE AO, T HE ASSESSEE HAD MADE TOTAL INVESTMENT OF RS.21,26,75,000/- (SIC. RS.20,96,25,0 00/-) IN PURCHASE OF THE LAND AT PIPLYA KUMAR. ON A PERUSAL OF THE SUBJECT LOOSE PAP ER I.E. PAGE NO.182 OF LPS-A/23 [PB-316] IT IS OBSERVED THAT ON SUCH LOOSE PAPERS, THERE IS A MENTION OF AN AMOUNT OF RS.21,26,75,000/- WHICH COMPRISES COST OF PURCHASES FROM SHRI MOHAN CHUGH AND SHRI KAMAL KUMAR RESPECTIVELY AT RS.18,73,00,000/- AND R S.2,53,75,000/-. ACCORDING TO THE AO, THERE WAS NO CLEAR-CUT DEMARCATION AS TO IN WHI CH YEAR THE INVESTMENTS HAVE BEEN MADE AND, THEREFORE, THE AO ASSUMED THAT THE PAYMEN TS WERE MADE EQUALLY IN TWO ASSESSMENT YEARS I.E. IN A.Y. 2008-09 AND A.Y. 2009 -10 AND, CONSEQUENTLY, ADDITION TO THE EXTENT OF RS.10,63,37,500/- WAS MADE IN THE INC OME OF THE ASSESSEE IN EACH OF THE TWO ASSESSMENT YEARS. THE ADDITION HAS BEEN MADE O N THE BASIS OF SOME LOOSE PAPER, BEING IN THE FORM OF SOME COMPUTER PRINTOUTS TAKEN DURING THE COURSE OF THE SEARCH IN THE PREMISES OF A COMPANY NAMED & STYLED AS 'M/S. P HOENIX DEVCONS PVT. LTD.SUCH FACT IS EVIDENT FROM THE FINDINGS GIVEN BY THE AO H IMSELF AT PARA 15.5.1 AT PAGE NO. 95 OF THE ASSESSMENT ORDER. IT IS A SETTLED LAW THAT PRES UMPTION AS CONTEMPLATED UNDER S.292C AND S.132(4A) IS NOT AVAILABLE IN RESPECT OF THE DOCUMENTS NOT FOUND IN THE PREMISES OF THE ASSESSEE BUT IN THE PREMISES OF SOM EONE ELSE. THE AO RELIED ON ONE LOOSE PAPER INVENTORIZED AS PAGE NO. 25 OF LPS-A/3 [FILED AT PAGE NO. 320 OF THE PAPER BOOK] FOR MAKING THE IMPUGNED ADDITION BY ALL EGING THAT THE ASSESSEE HAD MADE PAYMENT AMOUNTING TO RS.18,42,50,000/- TO SHRI MOHAN CHUGH OUT OF HIS UNDISCLOSED NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 40 INCOME. SUCH LOOSE PAPER IS PURPORTED TO BE IN THE FORM OF RECEIPTS AND PAYMENTS. HOWEVER, ON A PERUSAL OF SUCH PURPORTED RECEIPT & P AYMENT STATEMENT, IT IS OBSERVED THAT THERE IS RESULTING EXCESS OF PAYMENTS OVER RECEIPTS BY A SUM OF RS.13,54,91,650/-. HOWEVER, THE SOURCES OF MEETING SUCH DEFICIENCIES HAVE NOT BEEN MENTIONED ON SUCH STATEMENT. IN ANY RECEIPT & PAYMENT ACCOUNT, WITHOUT HAVING ANY OPENING CASH BALANCE, THE AGGREGATE OF PAYMENTS CANNOT EXCEED THE AGGREGATE OF RECEIPTS AND IF IT IS SO, SUCH RECEIPT & PAYMENT ACCOUNT HAS TO BE TREATED AS FAULTY ONE AND ACCORDINGLY, IT CANNOT BE TRUSTED UPON. DURING THE ASSESSMENT YEAR UNDER CONSIDERATION I.E. A.Y. 2008- 09, THE ASSESSEE, IN THE CAPACITY OF THE PROMOTER AND DIRECTOR OF A COMPANY NAMED AND T ITLED AS M/S. PHOENIX LEISURE & LIFESTYLE PVT. LTD. [FOR THE SAKE OF BREVITY REFER RED TO AS PLLPL], HAD ENTERED INTO ONE MOU FOR DEVELOPMENT OF CERTAIN PIECES OF LAND ADMEA SURING NEARLY 1.023 HECTARES SITUATED AT VILLAGE PIPLYA KUMAR NEAR BOMBAY HOSPIT AL, INDORE WITH THE OWNER OF SUCH LAND NAMELY M/S. SHIVALIKA REALITIES PVT. LTD. [FOR THE SAKE OF BREVITY REFERRED TO AS SRPL]. AS PER THE MOU, CERTAIN RESIDENTIAL MULTI- STOREY BUILDING BLOCKS WERE PROPOSED TO BE CONSTRUCTED BY PLLPL AT ITS OWN COST ON THE L AND OWNED BY SRPL. IN CONSIDERATION, THE SRPL WAS TO RECEIVE 35% SHARE IN THE CONSTRUCTED PROPERTY AND PLLPL WAS TO RECEIVE 65% SHARE IN THE CONSTRUCTED P ROPERTY. THE PLLPL STARTED CONSTRUCTING THE RESIDENTIAL BUILDINGS ON THE SAID LAND AND ALSO STARTED BOOKING OF THE FLATS. FROM BOOKING OF THE FLATS, THE ASSESSEE RECE IVED SOME ON-MONEY WHICH HAS BEEN SEPARATELY ADDED BY THE AO IN THE ASSESSMENT OF M/S . PHOENIX LEISURE & LIFESTYLE PVT. LTD.. THE RECEIPT OF ON-MONEY, IN THE INDIVIDUAL CA PACITY, WAS ADMITTED BY THE ASSESSEE AS WELL AS THE COMPANY PLLPL. THE MOU WAS RENEGOTIA TED FROM TIME TO TIME AND ULTIMATELY, IT CAME TO AN END DUE TO FAILURE ON THE PART OF THE PLLPL TO COMPLETE THE PROJECT WITH THE RESULT THAT THE CONSTRUCTED PROPER TIES ALONG WITH THE LIABILITIES TOWARDS CUSTOMERS BOOKING WERE HANDED OVER BY PLLPL TO THE SRPL. ON PERUSAL OF LPS A23 (PAGE NO.182), IT HAS BEEN OBSERVED THAT IT IS IN N ATURE OF ONE EXCEL SHEET AND THERE ARE EIGHT COLUMNS IN IT. THE COLUMNS DENOTE THE NAME OF OWNERS OF LAND, AREA, ACTUAL RATE, MARKET RATE, COST PAID AND BALANCE DUE. IN ACTUAL P AID COLUMN AGAINST THE NAME OF SHRI MOHAN CHUG AND SHRI KAMAL KUMAR, THERE IS REFERENCE OF SUM OF RS.18,73,00,000/- AND RS.2,53,75,000/-, RESPECTIVELY. BUT IN THE PAID COL UMN, ONLY A SUM OF RS.13,35,00,000/- NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 41 AND RS.11,00,000/- HAVE BEEN SHOWN AS PAID TO MOHAN CHUG AND KAMAL KUMAR, RESPECTIVELY. THUS, A SUM OF RS.5,38,00,000/- AND A SUM OF RS.2,42,75,000/- HAS BEEN SHOWN DUE TO MOHAN CHUG AND KAMAL KUMAR. IN THE LOO SE PAPER, UNDER THE COLUMN FOR AREA, THERE IS MENTION OF 2,04,800 SQ.FT. WHICH IS TOTAL AREA OF PROJECT. AS REGARDS TO PAYMENT MADE TO SHRI MOHAN CHUGH, THERE ARE AMPLE D OCUMENTARY EVIDENCES BUT EXCEPT THE NOTING MADE IN ABOVE REFERRED EXCEL SHEE T INVENTORIZED AS LPS-A/23 PAGE NO.182, 184 AND 186, AS REGARD TO PAYMENT OF RS.11, 00,000/- THERE IS NO OTHER EVIDENCE IN RESPECT OF ANY OTHER PAYMENT MADE TO SH RI KAMAL KUMAR. IN ALL THESE EXCEL SHEETS, PAYMENTS TO SHRI KAMAL KUMAR HAVE BEEN SHOW N AT RS.11,00,000/- ONLY AND REMAINING RS.2,42,75,000/- HAVE BEEN SHOWN AS DUE. IT IS A SETTLED LAW THAT IN THE ASSESSMENT THERE IS NO SCOPE FOR ANY BALD ESTIMATIO N AND, FURTHER, IT IS ALSO A SETTLED LAW THAT ANY DOCUMENT HAS TO BE RELIED UPON IN ITS ENTI RETY AND, THEREFORE, BASED UPON LPS- A/23 PAGE NO.182, 184 AND 186, IT HAS TO BE INFERRE D THAT THE PAYMENTS MADE TO SHRI KAMAL KUMAR WERE NOT TO THE EXTENT OF RS.2,53,75,00 0/- BUT THESE WERE TO THE EXTENT OF RS.11,00,000/- ONLY AS NOTED ABOVE. LPS-A/3 PAGE N O.21 [PB 317] CONTAINS THE COMPLETE DETAILS OF THE SUBJECT DEAL AND AS ALSO TH E MODE, MANNER AND AMOUNT PAID BY THE ASSESSEE TOWARDS THE SUBJECT DEAL. AS PER SUCH LOOSE PAPER, THE RATIO OF SHRI MOHAN CHUGH, DIRECTOR OF SRPL WAS 25% AND THAT OF THE ASS ESSEE AND HIS COMPANY WAS TO THE EXTENT OF 75%. AS PER THE LOOSE PAPER, IN CONSI DERATION OF ASSESSEE GETTING 75% SHARE IN THE CONSTRUCTED PROPERTY, THE ASSESSEE WAS REQUIRED TO PAY A SUM OF RS.12.28 CRORES TO SHRI MOHAN CHUGH. BESIDES RECEIVING RS.12 .28 CRORES, SHRI MOHAN CHUGH WAS ALSO TO RECEIVE 25% SHARE IN THE CONSTRUCTED PR OPERTY. AGAIN, TOWARDS PAYMENT OF TOTAL CONSIDERATION OF RS.12.28 CRORES, SHRI MOHAN CHUGH WAS TO BE GIVEN A PLOT BEARING NO.RC-C-029, HAVING MARKET VALUE OF RS.8 CR ORES, IN DUBAI. THE REMAINING 4.28 CRORES WAS TO BE PAID BY THE ASSESSEE FROM TIM E TO TIME. AS PER THE SHEET, A SUM OF RS.4.14 CRORES WAS PAID TO SHRI MOHAN CHUGH DURI NG THE PERIOD FROM 15-07-2007 TO 15-10-2007 AND A SUM OF RS.0.14 CRORES WAS SHOWN AS BALANCE DUE. IN THIS SHEET, THERE IS CLEAR MENTION OF A PAYMENT OF RS.4 CRORES BY THE ASSESSEE BY WAY OF CASH/CHEQUE FROM TIME TO TIME AND REMAINING RS.8 CR ORES BY WAY OF ONE PLOT IN DUBAI. THE PLOT IN DUBAI WAS OWNED BY SHRI NITISH DOSHI, A DUBAI BASED INVESTOR AND FRIEND OF THE ASSESSEE WHOSE REFERENCE WAS FOUND AT VARIOUS P LACES IN DIARY BS-8 AS ALSO IN NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 42 OTHER DOCUMENTS. IN PARTICULAR, AT PAGE NO.177 OF L PS-A/23 [PB-321], IT HAS BEEN CLEARLY MENTIONED THAT A SUM OF RS.8 CRORES WOULD B E INVESTED BY SHRI NITISH DOSHI. SHRI NITISH DOSHI HAD SHOWN HIS INTEREST IN THE SUBJECT DEAL BY BECOMING A PARTNER WITH THE ASSESSEE/ HIS COMPANY AND IN CONSIDERATION, SHRI NI TISH DOSHI HAD AGREED TO GIVE A PLOT OF HIS OWNERSHIP SITUATED IN DUBAI TO SHRI MOHAN CH UGH ON A VALUATION OF RS.8,00,00,000/-.FROM PAGE NO.25 OF THE LPS-A/3 [PB -320] WHICH IS IN THE NATURE OF A RECEIPT AND PAYMENT ACCOUNT OF PHOENIX GREEN PROJEC T AND WHICH HAS BEEN HEAVILY RELIED UPON BY THE AO FOR MAKING THE IMPUGNED ADDIT ION, IT IS NOTED THAT THERE IS A MENTION OF TOTAL RECEIPTS OF RS.7,43,70,652/- OF TH E SAID PROJECT WHICH COMPRISES CASH RECEIPTS FROM BOOKING OF FLATS AT RS.5,07,79,220/- AND CHEQUE RECEIPTS FROM BOOKING OF FLATS AT RS.2,35,91,432/-. AS AGAINST SUCH BOOKING RECEIPTS OF RS.7,43,70,652/-, PAYMENTS TOWARDS INDIRECT EXPENSES AND DEVELOPMENT EXPENSES HAVE BEEN SHOWN RESPECTIVELY AT RS.38,43,113/- AND RS.2,17,69,190/- AGGREGATING TO RS.2,56,12,303/-. THUS, AFTER MAKING THE PAYMENTS, THERE CAN REMAIN A VAILABILITY OF FUNDS FOR MAKING ANY OTHER PAYMENT TO THE EXTENT OF RS.4,87,58,349/- ONL Y BUT IN THE SAID ACCOUNT A SUM OF RS.18,42,50,000/- HAS BEEN SHOWN TO HAVE BEEN PAID TO SHRI MOHANLAL CHUGH AND BECAUSE OF SHOWING OF SUCH PAYMENT, THERE IS REFLEC TING A NEGATIVE CASH BALANCE I.E. DEFICIENCY OF RS.13,54,91,651/- AT THE BOTTOM OF TH E SAID RECEIPT & PAYMENT ACCOUNT. SUCH NEGATIVE CASH BALANCE PROVES THAT THE RECEIPT AND PAYMENT ACCOUNT WAS NOT CORRECT. FROM THE EVIDENCES ON RECORD, IT TRANSPIRE S THAT THE AFORESAID SUM OF RS.18,42,50,000/- WAS PROPOSED TO BE GIVEN BY THE A SSESSEE TO SHRI MOHAN CHUGH IN THREE MODES (I) RS.8,00,00,000/- IN FORM OF PLOT BE LONGING TO SHRI NITISH DOSHI SITUATED IN DUBAI; (II) A SUM OF RS.7,80,00,000/- IN FORM OF CA SH AND CHEQUE; AND (III) REMAINING RS.2,62,50,000/- IN FORM OF SHRI MOHAN CHUGHS SHAR E IN THE FLATS OF THE PROJECT WHICH WAS TO BE CONSTRUCTED UNDER THE RATIO DEAL. SINCE E VENTUALLY THE DEAL CAME TO AN END, THE PROPOSAL FOR GIVING PLOT OF SHRI NITISH DOSHI T O SHRI MOHAN CHUGH COULD ALSO NOT GET MATERIALIZED.OUT OF THE AFORESAID PAYMENT OF RS.7,8 0,00,000/- MADE TO SHRI MOHAN CHUGH/HIS COMPANY SRPL, THROUGH CASH/ CHEQUE, THE A SSESSEE HAD PAID A SUM OF RS.1,00,00,000/- THROUGH TWO CHEQUES OF RS.50,00,00 0/- EACH DATED 25-07-2007 AND 06-08-2007. THE ASSESSEE HAD FURTHER MADE A PAYMENT OF RS.1,30,00,000/- THROUGH THE ACCOUNT PAYEE CHEQUES ISSUED BY HIS ONE OTHER COMPA NY NAMELY, PHOENIX DEVCONS NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 43 PVT. LTD.. THE ASSESSEE HAD PAID THE REMAINING SUM OF RS.5,50,00,000/- IN THE FORM OF CASH, WHICH IN ITS TURN HAD EMANATED MAINLY FROM TH E COLLECTION OF ON-MONEY FROM BOOKING OF FLATS IN THE PROJECT FOR WHICH A SEPARAT E ADDITION HAS ALREADY BEEN MADE IN THE HANDS OF M/S. PHOENIX LEISURE & LIFESTYLE PVT. LTD. IN EVIDENCE OF PAYMENT BY M/S. PHOENIX LEISURE & LIFESTYLE PVT. LTD., OF A SUM OF RS.1,00,00,000/-, ASSESSEE HAS FILED THE COPY OF THE BALANCE-SHEET OF SUCH COMPANY AS ON 31-03-2009 WHICH IS PLACED AT PAGE NO.423 OF THE PAPER BOOK. ASSESSEE HAS ALSO FI LED A COPY OF THE BANK STATEMENT WHICH IS PLACED AT PAGE NO.429 OF THE PAPER BOOK. F URTHER, IN SUPPORT OF PAYMENT MADE BY M/S. PHOENIX DEVCONS PVT. LTD., AT RS.1,30,00,00 0/-, ASSESSEE HAS FILED A COPY OF AUDITED BALANCE-SHEET OF SUCH COMPANY WHICH IS PLAC ED AT PAGE NO.425 OF THE PAPER BOOK. AS REGARD THE REMAINING PAYMENT OF RS.5,50,00 ,000/- MADE IN THE FORM OF CASH, WE FIND THAT OUT OF SUCH CASH PAYMENTS, PAYMENTS AG GREGATING TO A SUM OF RS.4,87,58,350/- HAVE BEEN MADE BY THE ASSESSEE OUT OF THE ON-MONEY RECEIVED FROM VARIOUS CUSTOMERS AGAINST THE BOOKING OF FLATS. THE PAYMENT OF RS.4,87,58,350/- IS EVIDENT FROM THE LPS-A/3, PAGE NO.25 AS DISCUSSED I N PRECEDING PARA. IN RESPECT OF RECEIPT OF ON-MONEY OF RS.4,87,58,350/-, SEPARATE A DDITIONS AMOUNTING TO RS.3,43,44,220/- AND RS.1,64,35,000/- HAVE ALREADY BEEN MADE IN THE HANDS OF M/S. PHOENIX LEISURE & LIFESTYLE PVT. LTD. RESPECTIVELY FOR A.Y. 2008-09 AND 2009-10. IN SUPPORT OF SUCH ASSERTION, ASSESSEE HAS FILED COPY OF THE ASSESSMENT ORDER OF M/S. PHOENIX LEISURE & LIFESTYLE PVT. LTD. WHICH IS PLAC ED AT PAGE NO.430 TO 434 OF THE PAPER BOOK. THE VARIOUS DOCUMENTARY EVIDENCES FURNISHED B Y ASSESSEE HAVE NOT BEEN CONTRAVEND BY THE CIT DR. THE REMAINING SUM OF RS.6 2,41,650/- WAS PAID BY THE ASSESSEE IN CASH TO SHRI MOHAN CHUGH FOR WHICH, NO CORROBORATIVE EVIDENCE WAS FOUND AVAILABLE WITH THE ASSESSEE. THE ASSESSEE HAD PAID ONLY A SUM OF RS.11,00,000/- TO SHRI KAMAL KUMAR. WE FIND THAT OUT OF SUM OF RS.18, 42,50,000/- SHOWN TO HAVE BEEN PAID TO SHRI MOHAN CHUGH AT PAGE NO.25 OF LPS-A/3, A SUM OF RS.8,00,00,000/- AND RS.2,62,50,000/- WERE RESPECTIVELY PURPORTED TO HAV E BEEN GIVEN IN THE FORM OF PLOT IN DUBAI AND FLATS IN THE PROJECTS. FOR SUCH PURPORTED PAYMENTS IN KIND, NO CASE OF UNEXPLAINED INVESTMENT CAN BE MADE AGAINST THE ASSE SSEE. THE ASSESSEE HAD PAID ONLY A SUM OF RS.7,80,00,000/-, IN FORM OF CASH/ CH EQUE, OUT OF WHICH A SUM OF RS.2,30,00,000/- WAS PAID THROUGH EXPLAINED SOURCES I.E. THROUGH CHEQUES OF THE NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 44 COMPANIES AND THE REMAINING RS.5,50,00,000/- WAS PA ID IN FORM OF CASH. AGAIN OUT OF RS.5,50,00,000/- A SUM OF RS.4,87,58,350/- WAS MADE OUT OF THE ON-MONEY RECEIVED AGAINST BOOKING OF FLATS IN THE PROJECT PHOENIX GRE EN FOR WHICH SEPARATE ADDITIONS HAVE ALREADY BEEN MADE BY THE AO IN THE HANDS OF M/S. PH OENIX LEISURE & LIFESTYLE PVT. LTD. FOR REMAINING RS.62,41,650/- PAID TO SHRI MOHAN CHU GH, THE ASSESSEE HAS NO CONCRETE EVIDENCE OR EXPLANATION. FINALLY, THE ASSESSEE COUL D BE SAID TO HAVE MADE UNEXPLAINED INVESTMENT TO THE EXTENT OF RS.73,41,650/- ONLY [I. E. RS.11,00,000 + RS.62,41,650] EQUALLY IN TWO ASSESSMENT YEARS AND TO THIS EXTENT ONLY, ADDITION IS SUSTAINED. THE REMAINING ADDITION SO MADE BY THE AO AND CONFIRMED BY THE CIT(A) IS DELETED. ASSESSEES GROUND NO. 3(A) & 3(B) AND DEPARTMENTAL GROUND NO.4 THE BRIEF FACTS RELATING TO THE ABOVE GROUNDS ARE T HAT DURING THE COURSE OF THE SEARCH OPERATION, CERTAIN LOOSE PAPERS AND DOCUMENT S WERE SEIZED FROM THE PREMISES OF M/S. PHOENIX DEVCONS PVT. LTD., 434, ORBIT MALL, A.B. ROAD, INDORE, IN WHICH THE ASSESSEE IS ONE OF THE DIRECTORS. AMONGST THE LOOSE PAPERS SEIZED, AS PER LPS-A/9, CERTAIN VIKRAY ANUBANDH PATRA [AGREEMENTS TO SELL] AS WELL AS REGISTERED SALE DEEDS FOR CERTAIN LAND ADMEASURING 14.94 ACRES AT VILLAGE KUR ANA AND VILLAGE MUBARAKPUR, TEHSIL HUZUR, DISTRICT BHOPAL, WERE FOUND. DURING THE COUR SE OF THE ASSESSMENT PROCEEDINGS, ON A COMPARISON OF THE VIKRAY ANUBANDH PATRA AND RE GISTERED SALE DEEDS, THE AO NOTED THAT THERE WAS HUGE DIFFERENCE IN THE SALES CONSIDE RATION NOTED IN BOTH THE DOCUMENTS. ACCORDING TO THE AO, THE AMOUNT OF SALES CONSIDERAT ION STATED IN THE REGISTERED SALE- DEEDS WAS TO THE EXTENT OF RS.87,50,000/- ONLY AS A GAINST THAT STATED IN THE VIKRAY ANUBAND PATRAS AT RS.8,51,58,000/- THEREBY RESULTIN G IN A HUGE DIFFERENCE OF RS.7,64,08,000/-. ACCORDINGLY, THE AO REQUIRED THE ASSESSEE TO FURNISH VARIOUS DETAILS IN RESPECT OF THE SAID LAND AND ALSO REQUIRED THE A SSESSEE TO EXPLAIN THE SOURCES OF INVESTMENT IN THE SAID LAND AND THE REASONS FOR THE HUGE DIFFERENCE IN THE VIKRAY ANUBAND PATRAS AND THE REGISTERED SALE-DEEDS. THE A O ALSO TOOK NOTE OF A DIARY SEIZED AND INVENTORIZED AS BS-8 IN WHICH THE DETAILS OF PA YMENTS MADE IN RESPECT OF THE SUBJECT LAND TO SOME MR. ASHOK YADAV AND SMT. PUSHP A YADAV WERE FOUND NOTED. THE AO ISSUED SUMMONS TO MR. ASHOK YADAV UNDER S. 131 O F THE ACT AND DURING THE COURSE OF RECORDING THE STATEMENT ON OATH, MR. ASHOK YADAV CONFIRMED THE AUTHENTICITY OF THE NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 45 VIKRAY ANUBAND PATRAS FOUND DURING THE COURSE OF SE ARCH. THE AO ALSO RECORDED THE STATEMENT OF THE ASSESSEE AND DURING THE COURSE OF RECORDING THE STATEMENT, THE ASSESSEE ALSO ADMITTED THAT THE VIKRAY ANUBAND PATR AS INVENTORIZED AS LPS-A/9 WERE RELATED TO THE PURCHASE OF LAND AT BHOPAL. THE CRUX OF THE ARGUMENT OF THE ASSESSEE BEFORE THE AO WAS THAT CONSIDERATION TO THE EXTENT OF RS.71.85 LAKHS WAS MADE BY ACCOUNT PAYEE CHEQUES BY A COMPANY NAMED AS M/S. PH OENIX LEISURE AND LIFESTYLE PVT. LTD. IN WHOSE NAME THE REGISTRY OF THE LAND WA S ULTIMATELY EXECUTED. THE ASSESSEE FURTHER SUBMITTED BEFORE THE AO THAT A SUM OF RS.10 0.00 LAKHS WAS PAID THROUGH ACCOUNT PAYEE CHEQUES ISSUED BY M/S. MONEY CARE LEA SING & FINANCE PVT. LTD.. ACCORDING TO THE ASSESSEES SUBMISSION BEFORE THE A O, THE REMAINING SUM WAS PAID EITHER OUT OF THE FUNDS RECEIVED BY THE ASSESSEE FR OM HIS MUMBAI BASED CUSTOMERS OR OUT OF THE BOOKING ADVANCES OF RS.5,00,00,000/- REC EIVED BY THE ASSESSEE ON BEHALF OF ANOTHER COMPANY NAMELY M/S. PHOENIX DEVCONS PVT. LT D. IN WHICH THE ASSESSEE WAS ONE OF THE DIRECTORS. HOWEVER, THE AO COULD NOT GET HIMSELF SATISFIED WITH THE EXPLANATION OF THE ASSESSEE REGARDING THE SOURCES O F INVESTMENT IN THE SUBJECT LAND. FINALLY, THE AO MADE AN ADDITION OF RS.7,79,73,000/ - [TOTAL INVESTMENT RS.8,51,58,000 RS.71,85,000 SHOWN IN THE BALANCE-SHEET OF M/S. PHO ENIX LEISURE & LIFE STYLES PVT. LTD.] IN THE ASSESSEES HANDS, ON SUBSTANTIVE BASIS , BY HOLDING THE MAKING OF UNEXPLAINED INVESTMENT IN THE SUBJECT LAND AND MAKI NG THE SIMILAR ADDITION IN THE HANDS OF M/S. PHOENIX LEISURE & LIFESTYLES PVT. LTD. ON P ROTECTIVE BASIS. MATTER CARRIED TO CIT(A) AND THE CIT(A) UPHELD THE ACTION OF THE LD. AO IN DETERMINING THE PAYMENT OF ON MONEY ON PURCHASE OF BHOPAL LAND AT RS.7,79,73,000/-. HOWEVER, OUT OF SUCH PAYMENT OF ON MONEY, THE CIT(A ) HAS ALLOWED SET-OFF OF A SUM OF RS.4,93,73,000/- OUT OF THE FUNDS OF RS.5,00,00,000 /- RECEIVED AND RETAINED BY THE ASSESSEE ON BEHALF OF A COMPANY NAMED AS M/S. PHOE NIX DEVCONS PVT. LTD. IN WHICH THE ASSESSEE WAS ONE OF THE DIRECTORS. ACCORDINGLY, THE CIT(A) RESTRICTED THE ADDITION IN RESPECT OF PAYMENT TOWARDS BHOPAL LAND FROM RS.7,79 ,73,000/- TO RS.2,86,00,000/-. THE RELEVANT PORTION FROM THE ORDER OF THE LD. CIT(A) I S REPRODUCED HEREUNDER: 13.4 I HAVE CONSIDERED THE A.O.S ORDER AS WELL AS THE A PPELLANTS SUBMISSION AND ALSO THE DOCUMENTS PLACED ON RECORD. HAVING CONSIDERED NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 46 THE FACTUAL POSITION OF THE CASE, I AM OF THE CONSI DRED VIEW THAT THE A.O. HAS RIGHTLY DETERMINED THE AMOUNT OF TOTAL INVESTME NT FOR THE PURCHASE OF THE SAID LAND AT BHOPAL AT RS.8,51,58,000/- ON THE BASIS OF VARIOUS VIKRAY ANUBAND PATRAS, BS-8 DIARY AND VARIOUS STATEMENTS R ECORDED UNDER S. 131 OF THE ACT DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS. EVEN I FIND THAT THE APPELLANT HAS ADMITTED THE TOTAL INVE STMENT IN PURCHASE OF THE LAND AT RS.8,51,58,000/-. I ALSO FIND THAT ALTHOUGH THE REGISTRY OF THE SUBJECT LAND WAS GOT MADE IN THE NAME OF A COMPANY I.E. M/S. PHOENIX LEISURE & LIFESTYLES PVT. LTD. BUT FROM THE FACTUAL MATRIX IT IS EVIDENT THAT WHATEVER ON-MONEY WAS PAID FOR PURCHASE OF THE SUBJ ECT LAND WAS MANAGED OR PAID BY THE APPELLANT HIMSELF AND M/S. P HOENIX LEISURE & LIFESTYLES PVT. LTD., ALTHOUGH A REGISTERED OWNER O F THE LAND DID NOT MAKE ANY PAYMENT OF ON-MONEY TOWARDS THE PURCHASE OF THE SAID LAND. AS PER THE AOS OWN FINDINGS AS WELL AS THE APPELLANTS AD MISSION, IT IS EVIDENT THAT INVESTMENT TO THE EXTENT OF RS.71,85,000/- ONL Y WERE RECORDED IN THE REGULAR BOOKS OF ACCOUNT OF M/S. PHOENIX LEISURE & LIFESTYLES PVT. LTD.. IN SUCH CIRCUMSTANCES, THE ONUS WAS LYING UPON THE APP ELLANT TO SUBSTANTIATE THE SOURCES OF PAYMENT OF ON-MONEY AMOUNTING TO RS. 7,79,73,000/- FOR PURCHASE OF THE SUBJECT LAND AT VILLAGE KURANA AND VILLAGE MUBARAKPUR, TEHSIL HUZUR, DISTRICT BHOPAL. 13.5 THE APPELLANT HAS EXPLAINED THE SOURCES OF THE ENTI RE INVESTMENT OF RS.8,51,58,000/- FOR PURCHASE OF THE SAID LAND, WHI CH IS AS UNDER: PARTICULARS OF THE SOURCES OF PAYMENT AMOUNT (RS.) MODE REMARKS M/S. PHOENIX LEISURE & LIFESTYLE PVT. LTD. 71,85,000 THROUGH CHEQUE DULY RECORDED IN THE BOOKS OF ACCOUNT OF M/S. PHOENIX LEISURE & LIFESTYLE PVT. LTD. - DO - 16,00,000 THROUGH CASH - DO - M/S. MONEY CARE LEASING & FINANCE PVT. LTD. 1,00,00,000 THROUGH CHEQUE -DO- FUNDS PROVIDED BY SHRI NITESH DOSHI/SHRI RAJU DOSHI/SHRI K. GOYAL 1,70,00,000 THROUGH CASH SHRI NILESH AJMERA [APPELLANT] OUT OF THE FUNDS OF RS.5 4,93,73,000 THROUGH CASH NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 47 CRORES RECEIVED AND RETAINED ON BEHALF OF M/S. PHOENIX DEVCONS PVT. LTD. TOTAL 8,51,58,000 13.6 IN MY CONSIDERED VIEW, THE EXPLANATION AS REGARD TH E PAYMENT THROUGH CHEQUE BY M/S. PHOENIX LEISURE & LIFESTYLES PVT. LTD. AT RS.71,85,000/- IS FOUND TO BE CORRECT, AS THE APPEL LANTS A/R SUBMITTED THAT THE SAME IS DULY REFLECTED IN THE AUDITED FINA NCIAL STATEMENTS OF SUCH COMPANY, WHICH HAS ALSO BEEN AFFIRMED BY THE A.O. I N THE ASSESSMENT ORDER. HOWEVER, THE APPELLANTS CLAIMS REGARDING PA YMENT OF RS.16,00,000/- IN CASH BY M/S. PHOENIX LEISURE & LI FESTYLE PVT. LTD. CANNOT BE ACCEPTED IN THE ABSENCE OF ANY DOCUMENTAR Y EVIDENCE. 13.7 EVEN THE CLAIM REGARDING RECEIPT OF A SUM OF RS.1,0 0,00,000/- BY THE APPELLANT FROM M/S. MONEY CARE FINANCE & LEASIN G PVT. LTD. CANNOT BE ACCEPTED. I FIND THAT NEITHER BEFORE THE A.O. NO R BEFORE ME, THE APPELLANT COULD ESTABLISH THE RECEIPT OF SUCH SUM B Y ANY COGENT DOCUMENTARY EVIDENCE. THE APPELLANT COULD NOT EVEN FURNISH THE NECESSARY LETTER OF CONFIRMATION ISSUED BY THE ABOV E NAMED COMPANY IN SUPPORT OF HIS CLAIM. THE APPELLANT HAS MERELY FURN ISHED A COPY OF AUDITED FINANCIAL STATEMENTS OF THE ABOVE NAMED COMPANY BY WHICH ALSO IT DOES NOT GET ESTABLISHED THAT THE ABOVE NAMED COMPANY MA DE ANY PAYMENT OF RS,1,00,00,000/- FOR PURCHASE OF THE SAID LAND AS C LAIMED BY THE APPELLANT. EVEN THE APPELLANT HAD NOT FURNISHED A COPY OF SUCH FINANCIAL STATEMENTS BEFORE THE A.O. THE APPELLANT HAS FILED THE SAID FI NANCIAL STATEMENT BEFORE ME HOWEVER THE SAME HAS BEEN FURNISHED WITHOUT ANY APPROPRIATE APPLICATION UNDER RULE 46A OF IT RULES, 1962. IN VI EW OF THE SAME, THE SAID FINANCIAL STATEMENTS ARE NOT ADMITTED. 13.8 I ALSO DO NOT FIND ANY SUBSTANCE IN THE APPELLANTS CLAIM AS REGARD RECEIPT OF SUM OF RS.1,70,00,000/- FROM SHRI NITESH DOSHI/SHRI RAJU DOSHI/SHRI K. GOYAL FOR MAKING THE SUBJECT INVESTME NT. I FIND THAT IN RESPONSE TO THE COMMISSION ISSUED, THE ABOVE NAMED PERSONS WERE NOT FOUND AT THE GIVEN ADDRESSES. FURTHER, THE APPELLAN T HIMSELF IS CLAIMING THE SOURCES OF RECEIPTS THROUGH CASH. MOREOVER, NOT A S INGLE DOCUMENT IN THE FORM OF LETTER OF CONFIRMATION, COPY OF INCOME-TAX RETURN, COPY OF BANK NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 48 STATEMENT, ETC. ESTABLISHING THE IDENTITY OF THE AB OVE NAMED PERSONS, GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF SUCH PERSONS TO ADVANCE SUCH A HUGE SUM OF RS.1,70,00,000/- TO THE APPELLANT HAVE BEEN BROUGHT ON RECORD. IN SUCH CIRCUMSTANCES, I FIND NO MERIT IN THE APPELLANTS EXPLANATION REGARDING THE CLAIM OF RS.1,70,00,000/- IN RESPECT OF RECEIPT OF FUNDS FROM SHRI NITESH DOSHI/SHRI RAJU DOSHI/SHRI K . GOYAL FOR MAKING IMPUGNED INVESTMENT. IT IS A FACT ON RECORD THAT TH E A.O. HAS EVERY CATEGORICALLY MENTIONED THAT THE APPELLANT COULD NO T SUBSTANTIATE IN ANY FORM EITHER THROUGH CONFIRMATION LETTER OR ADDUCING PAN NUMBER OR GIVING ANY DETAILS OF SUCH TRANSACTIONS, WHICH IS CLAIMED TO BE ENTERED BY THE APPELLANT THROUGH SHRI NITESH DOSHI, SHRI RAJU DOSH I AND SHRI K. GOYAL. IN THIS PERSPECTIVE OF THE APPELLANTS CASE EVEN I AM OF THE CONSIDERED VIEW THAT THE APPELLANTS ALTERNATE GROUND OF CLAIMING S ET OFF FUND AVAILABILITY WITH THE APPELLANT AS CUSTODIAN OF THE MONEY OF SUC H INVESTORS IS COMPLETELY ABSURD AND UNFOUNDED. HENCE THE APPELLAN TS REQUEST ON THIS SCORE CANNOT BE ACCEPTED. 13.9 HOWEVER, I FIND SUBSTANCE IN THE CLAIM OF THE APPE LLANT AS REGARD TO PAYMENT OF A SUM OF RS.4,93,73,000/- OUT OF THE FUN DS OF RS,5,00,00,000/- RECEIVED BY HIM OUT OF PLOT ADVANCE BOOKING RECEIPT S ON BEHALF OF M/S. PHOENIX DEVCONS PVT. LTD. I FIND THAT DURING THE CO URSE OF THE SEARCH PROCEEDINGS, IN THE CASE OF M/S. PHOENIX DEVCONS PV T. LTD., A COMPANY IN WHICH THE APPELLANT IS ONE OF THE DIRECTORS, A LOOS E PAPER INVENTORIZED AS PAGE NO.15 OF LPS-A/4 WAS FOUND AND SEIZED. SUCH LO OSE PAPER CONTAINS THE DETAILS OF VARIOUS PAYMENTS MADE BY THE ABOVE N AMED COMPANY. ON SUCH LOOSE PAPER, A SUM OF RS.5,00,00,000/- HAS BEE N FOUND NOTED WITH THE NARRATION DUBAI HAWALA. BASED ON SUCH NOTHING , THE AO WHO WAS ALSO HAVING SIMULTANEOUS JURISDICTION OVER THE CASE OF M/S. PHOENIX DEVCONS PVT. LTD., MADE AN ADDITION OF RS.5,00,00,0 00/- IN THE HANDS OF THE ABOVE NAMED COMPANY FOR A.Y. 2008-09 IN THE ASS ESSMENT ORDER DATED 30.12.2011 PASSED UNDER S. 153A R.W.S. 143(3) OF THE ACT. THE CONTENTION OF THE ABOVE NAMED COMPANY IN THE CASE O F ITS OWN ASSESSMENT BEFORE THE AO WAS THAT THE ABOVE SAID SU M OF RS.5,00,00,000/- WAS NOT MADE TOWARDS ANY DUBAI HAW ALA BUT THE SAME WAS RETAINED BY SHRI NILESH AJMERA, OUT OF THE PLOT BOOKING ADVANCES RECEIVED BY HIM ON BEHALF OF THE COMPANY. IT WAS FU RTHER CONTENDED BY THE ABOVE NAMED COMPANY THAT MR. NILESH AJMERA, THROUGH HIS COMPANY NAMELY M/S. PHOENIX LEISURE & LIFESTYLE PVT. LTD., WAS INTENDED TO MAKE CERTAIN INVESTMENT IN REAL ESTATE IN DUBAI, BUT DUE TO NON-RECEIPT OF NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 49 NECESSARY APPROVALS AND PERMISSIONS FROM RBI AND OT HER GOVERNMENT AGENCIES FOR MAKING THE INVESTMENT IN DUBAI, SHRI N ILESH AJMERA RETAINED THE SAID SUM AND NO SUCH INVESTMENT IN DUBAI COULD ACTUALLY TAKE PLACE. I FIND THAT AGAINST THE ADDITION OF RS,5,00,00,000/-, M/S. PHOENIX DEVCONS PVT. LTD. IN THE APPEAL PREFERRED BEFORE THIS OFFIC E FOR A.Y. 2008-09, VIDE APPEAL NO.IT-868/11-12, HAS RAISED ONE SEPARATE GRO UND. THE ABOVE REFERRED APPEAL IN THE CASE OF M/S. PHOENIX DEVCONS PVT. LTD. HAS SEPARATELY BEEN ADJUDICATED BY ME IN WHICH I HAVE H ELD THAT SHRI NILESH AJMERA RECEIVED/RETAINED THE ABOVE SAID AMOUNT OF R S.5,00,00,000/- OUT OF THE PLOT BOOKING ADVANCES/UNEXPLAINED SOURCES OF M/S. PHOENIX DEVCONS PVT. LTD.. IN THE CASE OF THE COMPANY, I HA VE UPHELD AN ADDITION OF RS.2,05,56,244/- BY GIVING THE DETAILED FINDING IN THE ORDER PASSED IN THE CASE OF M/S. PHOENIX DEVCONS PVT. LTD., PAYMENT OF A SUM OF RS.5,00,00,000/- BY SUCH COMPANY TO THE APPELLANT H AS GOT ESTABLISHED BASED ON THE REASONS ASSIGNED THEREIN. THE APPELLAN T AS WELL AS THE COMPANY M/S. PDPL HAVE ACCEPTED OF SUCH TRANSACTION OF PAYMENT OF RS.5,00,00,000/- TO THE APPELLANT FOR THE PURPOSES, AS DETAILED ABOVE. THEREFORE, IN MY CONSIDERED VIEW, UNLESS AND UNTIL IT IS BROUGHT ON RECORD BY ANY POSITIVE EVIDENCE THAT THE SUM SO RECEIVED B Y THE APPELLANT WAS UTILIZED BY HIM FOR SOME OTHER PURPOSES THAN CLAIME D HEREIN, THERE SEEMS TO BE NO LOGIC AND RATIONALITY IN NOT ACCEPTING THE APPELLANTS EXPLANATION THAT OUT OF SUCH SUM OF RS.5,00,00,000/-, HE HAD MA DE PAYMENT OF RS.4,93,73,000/- TOWARDS THE PURCHASE CONSIDERATION OF THE SAID LAND AT BHOPAL. MY VIEW ALSO GETS SUPPORT FROM THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. FIVE STAR HOLIDAY S (2007) 294 ITR 54 (DEL), WHEREIN IT HAS HELD THAT ONCE A TRANSACTION OF PAYMENT IS ADMITTED AS CORRECT IN THE HANDS OF THE PAYER, THE SAME HAS ALSO TO BE TAKEN AS CORRECT IN THE HANDS OF THE PAYEE. FURTHER THE HON BLE HIGH COURT OF KERALA IN THE CASE OF CIT (CENTRAL) COCHIN VS. P.D . ABRAHAM @ APPACHAN (2012) 252 CTR (KER) 407 HAS LAID DOWN THE RATIO THAT THERE MUST BE A COMPLETE RELIANCE ON ANY SEIZED MATERIAL AND DEPARTMENT CANNOT DISCARD A PART OF THE ENTRIES BY RELYING UPO N THE OTHER PART OF ENTRIES NOTED ON THE SAME SEIZED RECORD. 13.10 THUS, IN MY CONSIDERED VIEW, OUT OF TOTAL INVESTMEN TS OF RS.8,51,58,000/- DETERMINED BY THE AO IN MAKING THE PAYMENTS FOR PURCHASE OF LAND AT BHOPAL, THE APPELLANT COULD SUB STANTIATE THE SOURCES TO THE EXTENT OF RS.5,65,58,000/- ONLY [I.E. RS.71, 85,000 + 4,93,73,000]. ACCORDINGLY, THE REMAINING INVESTMENT TO THE EXTENT OF RS.2,86,00,000/- IS NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 50 HELD TO BE UNEXPLAINED AND ADDITION TO THE EXTENT O F RS.2,86,00,000/- OUT OF THE TOTAL ADDITION OF RS.7,79,73,000/- MADE BY T HE AO IS CONFIRMED. THUS, THE APPELLANT WOULD GET RELIEF OF RS.4,93,73, 000/-. IN THE RESULT THESE GROUNDS OF APPEAL ARE PARTLY ALLOWED. THE LD. AR HAS MADE ORAL SUBMISSION AS WELL AS WRIT TEN SUBMISSION AS UNDER: SO FAR AS THE REVENUES APPEAL IS CONCERNED, IT I S SUBMITTED THAT THE AO HAVING GIVEN A FINDING IN THE CASE OF THE PA YER OF THE AMOUNT I.E. M/S. PHOENIX DEVCONS PVT. LTD., TO THE EFFECT THAT SUCH COMPANY HAD PAID A SUM OF RS.5,00,00,000/- TO THE ASSESSEE, THERE ST ANDS NO REASON AS TO WHY THE AVAILABILITY OF SUCH FUNDS IN THE HANDS OF THE PAYEE I.E. THE ASSESSEE SHOULD NOT BE ACCEPTED. IT IS SUBMITTED TH AT IN THE CASE OF M/S. PHOENIX DEVCONS PVT. LTD., THE AO AS WELL AS THE C IT(A), BOTH, HAVE GIVEN A FINDING THAT SUCH COMPANY HAD PAID A SUM OF RS.5,00,00,000/- TO THE ASSESSEE OUT OF THEIR UNACCOUNTED RECEIPTS. THE AO IN THE CASE OF M/S. PHOENIX DEVCONS PVT. LTD. HAS ADDED SUCH PAYME NT AS UNDISCLOSED INCOME IN THE HANDS OF SUCH COMPANY WHILE MAKING TH EIR ASSESSMENT UNDER S. 153A OF THE ACT. THE CIT(A) HAS ALSO CONFI RMED THE ACTION OF THE AO WITH THE MODIFICATION THAT THE ADDITION IN THE H ANDS OF M/S. PHOENIX DEVCONS PVT. LTD. IN RESPECT OF PAYMENT MADE TO THE ASSESSEE AT RS.5,00,00,000/- SHOULD BE RESTRICTED TO THE AMOUNT PAID OVER AND ABOVE THE AMOUNT OF ON-MONEY RECEIVED BY SUCH COMPANY FRO M ITS CUSTOMERS. IT IS A SETTLED LAW THAT IF A TRANSACTION IS CONSIDERE D TO BE GENUINE IN THE HANDS OF THE PAYER THEN IT ALSO DESERVES TO BE ACCE PTED IN THE HANDS OF THE PAYEE AS WELL. SO, THE RECEIPT OF PAYMENT OF RS .5,00,00,000/- BY THE ASSESSEE FROM M/S. PHOENIX DEVCONS PVT. LTD. AND IT S SUBSEQUENT UTILIZATION TOWARDS PAYMENT OF ON-MONEY FOR PURCHAS E OF LAND AT BHOPAL CANNOT BE BRUSHED ASIDE ABRUPTLY. IT IS SUBMITTED T HAT ALTHOUGH THE ASSESSEE WHILE RENDERING THE ACCOUNT TO M/S. PHOENI X DEVCONS PVT. LTD. HAD SHOWN THE PURPOSE OF RETENTION OF SUM OF RS.5,0 0,00,000/- FOR MAKING NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 51 SOME INVESTMENT IN PROPERTIES IN DUBAI THROUGH HIS ONE OTHER COMPANY NAMELY M/S. PHOENIX LEISURE & LIFESTYLE PVT. LTD. B UT DUE TO NON-APPROVAL OF THE NECESSARY GOVERNMENT PERMISSIONS, THE SAME C OULD NOT BE MADE AND EVENTUALLY SUCH FUNDS WERE UTILIZED BY THE ASSE SSEE FOR MAKING INVESTMENT IN PURCHASE OF LAND AT BHOPAL. EVEN FROM PERUSAL OF ASSESSEES BS-8 DIARY, IT MAY BE FOUND THAT THE ASS ESSEE HAD MADE PAYMENT FOR PURCHASE OF LAND IN BHOPAL BUT NO SINGL E EVIDENCE CAN BE FOUND AS REGARD TO MAKING OF ANY INVESTMENT BY THE ASSESSEE IN ANY PROPERTY IN DUBAI. IT WOULD FURTHER BE APPRECIATED THAT IN OUR COUNTRY ANY REMITTANCE, OUT OF INDIA, OTHER THAN THROUGH BANKIN G CHANNEL IS AN OFFENCE AND IT IS NOT THE CASE OF THE REVENUE THAT ANY ENFO RCEMENT AGENCY HAS TAKEN ANY ACTION AGAINST THE ASSESSEE ON ALLEGATION OF ANY HAWALA TRANSACTION. THUS, THERE CANNOT BE TWO VIEWS FOR TH E PREPOSITION THAT THE FUNDS OF RS.5,00,00,000/- WERE VERY WELL AVAILABLE WITH THE ASSESSEE FOR MAKING INVESTMENT IN BHOPAL LAND. THUS, THERE CANNO T BE SAID TO BE ANY INFIRMITY IN THE CIT(A)S ACTION IN GRANTING SET-OF F OF A SUM OF RS.4,93,73,000/- TO THE ASSESSEE AGAINST THE INVEST MENT IN BHOPAL LAND. IT IS SUBMITTED THAT OUT OF REMAINING SUM OF RS.2,8 6,00,000/- IN RESPECT OF WHICH ADDITION HAS BEEN CONFIRMED BY THE CIT(A), A SUM OF RS.1,00,00,000/- WAS DIRECTLY PAID BY ONE COMPANY N AMED AND TITLED AS M/S. MONEYCARE FINANCE & LEASING PVT. LTD. TO THE S ELLERS OF THE LAND. IT IS SUBMITTED THAT IN SUPPORT OF THE ABOVE ASSERTION, W E HAVE ALREADY FILED A COPY OF AUDITED FINANCIAL STATEMENTS AS OF 31-03-20 08 OF THE ABOVE NAMED COMPANY AS PB-198. IN SUCH BALANCE SHEET, TWO ADVAN CES OF RS.87,50,000/- AND OF RS.12,50,000/- HAVE BEEN SHOW N RESPECTIVELY BY SUCH COMPANY IN THE NAME OF SHRI IRSHAD ALI KHAN AN D SHRI IQBAL SIDDIQUI. IT IS SUBMITTED THAT A COPY OF SUCH FINANCIAL STATE MENTS WERE ALSO FILED BY THE ASSESSEE BEFORE THE CIT(A) BUT FOR THE TECHNICA L REASON OF NOT FILING AN APPLICATION FOR ADMISSION OF SUCH ADDITIONAL EVIDEN CE UNDER RULE 46A OF THE I.T. RULES, 1962 THE LEARNED CIT(A) HAS NOT ADM ITTED SUCH FINANCIAL NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 52 STATEMENTS. IT IS SUBMITTED THAT OUR SUCH CLAIM HAS NOT BEEN REBUTTED BY THE LEARNED DRS DURING THE COURSE OF HEARING AND TH EREFORE, THE CLAIM OF THE ASSESSEE AS REGARD SOURCES OF PAYMENT TO THE EX TENT OF RS.1,00,00,000/-, HAVING BEEN MADE BY M/S. MONEYCAR E FINANCE & LEASING PVT. LTD., DESERVES TO BE ALLOWED. THE REMAINING SUM OF RS.1,70,00,000/- WAS PAID BY T HE ASSESSEE TO THE SELLERS OF THE BHOPAL LAND, FROM TIME TO TIM E, BY PROCURING FUNDS FROM SHRI NITISH DOSHI AND OTHERS. IT IS SUBMITTED THAT SINCE THE FUNDS WERE GIVEN BY THE INVESTORS AND THE SAME WERE NOT RESULT OF ANY UNDISCLOSED INCOME OF THE ASSESSEE, IT COULD NOT BE REGARDED AS UNEXPLAINED INVESTMENT OF THE ASSESSEE UNDER THE PROVISIONS OF SECTION 69/69B OF THE ACT. IN SUPPORT OF OUR SUCH ASSERTION, KIND ATTENTI ON IS INVITED TO A QUESTIONNAIRE UNDER S.142(1) OF THE ACT DATED 28-11 -2011 ISSUED BY THE AO TO THE ASSESSEE [PB-84]. IN SUCH QUESTIONNAIRE, BY GIVING A TABLE OF THE VARIOUS ENTRIES FOUND RECORDED IN A BS-8 DIARY [A D IARY BELONGING TO THE ASSESSEE, WHICH WAS SEIZED FROM THE PREMISES OF M/S . PHOENIX DEVCONS PVT. LTD.], THE ASSESSEE WAS REQUIRED TO EXPLAIN TH E SOURCES AND NATURE OF PAYMENTS STATED IN SUCH DIARY. ACCORDING TO THE ITE M NO. 30 OF THE SAID TABLE, AT PAGE NO. 97 OF BS-8, THE ASSESSEE HAD TAK EN A SUM OF RS.50,00,000/- FROM SHRI N. DOSHI AND AT THE BACKSI DE OF THE SAME PAGE, THERE IS A MENTION OF PAYMENT OF A SUM OF RS.49,87, 500/- TO DR. YADAV IN BHOPAL. IT IS SUBMITTED THAT LIKEWISE, THERE IS MEN TION OF PAYMENT OF RS.50,00,000/- AND RS.4,00,000/- AS PER PAGE NO. 12 2 (BACK) AND PAGE NO. 124 TO DR. YADAV. IT IS SUBMITTED THAT THE VERA CITY AND AUTHENTICITY OF THE TRANSACTIONS RECORDED IN SUCH BS-8 HAVE BEEN RE LIED UPON BY THE REVENUE FOR MAKING VARIOUS ADDITIONS IN THE ASSESSE ES CASE AND THEREFORE, THE ASSERTION OF THE ASSESSEE AS REGARD TO RECEIPT OF FUNDS FROM SHRI N. DOSHI AND OTHERS GETS SELF ESTABLISHED FROM SUCH BS-8. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, IT IS SUBMITTED THAT BASED UPON VARIOUS NOTINGS MADE IN BS-8 DIARY AND OTHER LOOSE PAPERS, WHICH NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 53 SUGGEST RECEIPT OF CERTAIN FUNDS BY THE ASSESSEE FR OM OTHER INVESTORS, IT MAY BE HELD THAT THE REMAINING SUM OF RS.1,70,00,00 0/- HAD BEEN PAID BY THE ASSESSEE FOR PURCHASE OF LAND AT BHOPAL OUT OF THE FUNDS RECEIVED FROM OTHERS AND CONSEQUENTLY, THE SAME MAY NOT BE R EGARDED AS UNEXPLAINED INVESTMENT OF THE ASSESSEE. OUT OF THE TOTAL PAYMENT OF RS.2,86,00,000/- IN RES PECT OF WHICH ADDITION HAS BEEN CONFIRMED BY THE LEARNED CIT(A), M/S. MONEYCARE FINANCE & LEASING PVT. LTD. HAD PROVIDED A SUM OF R S.1,00,00,000/-, VARIOUS INVESTORS OF THE ASSESSEE HAD PROVIDED A SU M OF RS.1,70,00,000/- AS AFORESAID AND THE REMAINING SUM OF RS.16,00,000/ - WAS PAID BY ASSESSEES ONE COMPANY NAMELY M/S. PHOENIX LEISURE & LIFESTYLE PVT. LTD.. IT IS SUBMITTED THAT THE PROPERTY WAS EVENTUA LLY GOT REGISTERED IN THE NAME OF THE ABOVE COMPANY ONLY. IT IS SUBMITTED THA T THE ABOVE COMPANY IN ITS FINANCIAL STATEMENTS AS OF 31-03-2009 HAS SH OWN AN INVESTMENT OF RS.96,74,000/- WHICH COMPRISES OF THE PAYMENT OF RS .71,85,000/- PAID THROUGH CHEQUE TOWARDS PURCHASE CONSIDERATION, RS.1 6,00,000/- PAID THROUGH CASH TOWARDS PURCHASE CONSIDERATION AND REM AINING TOWARDS STAMP DUTY. IN SUPPORT OF SUCH CONTENTION, WE RELY UPON THE FINANCIAL STATEMENTS OF THE ABOVE NAMED COMPANY AS FILED IN A SEPARATE PAPER BOOK IN RESPECT OF APPEAL NO. IT-196/IND/2013 OF SU CH COMPANY BEFORE THIS BENCH FOR A.Y. 2009-10. LD. DR RELIED ON THE ORDER OF THE AO AND SUBMITTED THAT ISSUE HAS BEEN DISCUSSED BY AO IN PARA-7 FROM PAGE 20 TO 24 IN THE ASSESSMENT ORDER OF PDPL FOR ASSESSMENT YEAR 2008-09 WHERE THE ENTRY OF RS. 5 CR ORE FOR DUBAI HAWALA WAS FOUND MENTIONED ON PAGE 15 OF LPS A/4 SEIZED FROM THE PRE MISE OF THE ASSESSEE. ASSESSEE ADMITTED THAT SAID AMOUNT WAS RETAINED BY SHRI NILE SH AJMERA, DIRECTOR OF THE COMPANY, OUT OF THE ON-MONEY RECEIVED BY THE ASSESSEE COMPAN Y AND THAT WAS NOT A HAWALA TO DUBAI, BUT NO SUPPORTING EVIDENCES WERE GIVEN AND T HUS, ADDITION WAS MADE. CIT (A) HAS, WHILE ADJUDICATING THE APPEAL IN THE CASE OF P DPL FOR ASSESSMENT YEAR 2008-09, NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 54 GIVEN THE FINDINGS IN PARA 10.4 ON PAGE 69 OF HIS O RDER AND ADDITION IS CONFIRMED SUBJECT TO DIRECTIONS TO AO TO GIVE NECESSARY SET OFF TO TH E COMPANY AGAINST THE RECEIPT OF ON- MONEY IF EXCESS FUNDS ARE AVAILABLE WITH THE COMPAN Y. THUS, ISSUE WAS SET ASIDE TO AO WHICH IS WRONG AS PER THE PROVISIONS U/S 251 OF IT ACT IN WHICH NO POWER OF SET ASIDE IS GIVEN TO CIT (A) AND THEREFORE, TO THAT EXTEND THE FINDINGS OF CIT (A) ARE PERVERSE AND SAME MAY KINDLY BE REVERSED. WE HAVE HEARD RIVAL CONTENTIONS OF BOTH THE PARTIES AND HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD. THE AO HAVING GIVEN A FINDING IN THE CASE OF THE PAYER OF THE AMOUNT I.E. M/S. PHOENIX DEVCONS PVT. LTD., TO THE EFFECT THAT SUCH COMPANY HAD PAID A SUM OF RS.5,00,00,000/- TO THE ASSESSEE, THE RE STANDS NO REASON AS TO WHY THE AVAILABILITY OF SUCH FUNDS IN THE HANDS OF THE PAYE E I.E. THE ASSESSEE SHOULD NOT BE ACCEPTED. IT IS SUBMITTED THAT IN THE CASE OF M/S. PHOENIX DEVCONS PVT. LTD., THE AO AS WELL AS THE CIT(A), BOTH, HAVE GIVEN A FINDING THAT SUCH COMPANY HAD PAID A SUM OF RS.5,00,00,000/- TO THE ASSESSEE OUT OF THEIR UNACC OUNTED RECEIPTS. THE AO IN THE CASE OF M/S. PHOENIX DEVCONS PVT. LTD. HAS ADDED SUCH PA YMENT AS UNDISCLOSED INCOME IN THE HANDS OF SUCH COMPANY WHILE MAKING THEIR ASSESS MENT UNDER S. 153A OF THE ACT. THE CIT(A) HAS ALSO CONFIRMED THE ACTION OF THE AO WITH THE MODIFICATION THAT THE ADDITION IN THE HANDS OF M/S. PHOENIX DEVCONS PVT. LTD. IN RESPECT OF PAYMENT MADE TO THE ASSESSEE AT RS.5,00,00,000/- SHOULD BE RESTRICT ED TO THE AMOUNT PAID OVER AND ABOVE THE AMOUNT OF ON-MONEY RECEIVED BY SUCH COMPA NY FROM ITS CUSTOMERS. IT IS A SETTLED LAW THAT IF A TRANSACTION IS CONSIDERED TO BE GENUINE IN THE HANDS OF THE PAYER THEN IT ALSO DESERVES TO BE ACCEPTED IN THE HANDS O F THE PAYEE AS WELL. SO, THE RECEIPT OF PAYMENT OF RS.5,00,00,000/- BY THE ASSESSEE FROM M/ S. PHOENIX DEVCONS PVT. LTD. AND ITS SUBSEQUENT UTILIZATION TOWARDS PAYMENT OF ON-MO NEY FOR PURCHASE OF LAND AT BHOPAL CANNOT BE BRUSHED ASIDE ABRUPTLY. THE ASSESSEE WHIL E RENDERING THE ACCOUNT TO M/S. PHOENIX DEVCONS PVT. LTD. HAD SHOWN THE PURPOSE OF RETENTION OF SUM OF RS.5,00,00,000/- FOR MAKING SOME INVESTMENT IN PROP ERTIES IN DUBAI THROUGH HIS ONE OTHER COMPANY NAMELY M/S. PHOENIX LEISURE & LIFESTY LE PVT. LTD. BUT DUE TO NON- APPROVAL OF THE NECESSARY GOVERNMENT PERMISSIONS, T HE SAME COULD NOT BE MADE AND EVENTUALLY SUCH FUNDS WERE UTILIZED BY THE ASSESSEE FOR MAKING INVESTMENT IN PURCHASE NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 55 OF LAND AT BHOPAL. EVEN FROM PERUSAL OF ASSESSEES BS-8 DIARY, IT MAY BE FOUND THAT THE ASSESSEE HAD MADE PAYMENT FOR PURCHASE OF LAND IN B HOPAL BUT NO SINGLE EVIDENCE CAN BE FOUND AS REGARD TO MAKING OF ANY INVESTMENT BY T HE ASSESSEE IN ANY PROPERTY IN DUBAI. IN OUR COUNTRY ANY REMITTANCE, OUT OF INDIA, OTHER THAN THROUGH BANKING CHANNEL IS AN OFFENCE AND IT IS NOT THE CASE OF THE REVENUE TH AT ANY ENFORCEMENT AGENCY HAS TAKEN ANY ACTION AGAINST THE ASSESSEE ON ALLEGATION OF ANY HAWALA TRANSACTION. THUS, THERE CANNOT BE TWO VIEWS FOR THE PREPOSITION THAT THE FUNDS OF RS.5,00,00,000/- WERE VERY WELL AVAILABLE WITH THE ASSESSEE FOR MAKING IN VESTMENT IN BHOPAL LAND. THUS, THERE CANNOT BE SAID TO BE ANY INFIRMITY IN THE CIT(A)S ACTION IN GRANTING SET-OFF OF A SUM OF RS.4,93,73,000/- TO THE ASSESSEE AGAINST THE INVEST MENT IN BHOPAL LAND. IN RESPECT OF ADDITION OF RS.2,86,00,000/-, IT IS THE CONTENTION OF THE ASSESSEE THAT A SUM OF RS. RS.1,00,00,000/- WAS DIRECTLY PAID BY ONE COMPANY N AMED AND TITLED AS M/S. MONEYCARE FINANCE & LEASING PVT. LTD. TO THE SELLER S OF THE LAND. IN SUPPORT OF THE ABOVE ASSERTION, ASSESSEE HAS FILED A COPY OF AUDIT ED FINANCIAL STATEMENTS AS OF 31-03- 2008 OF THE ABOVE NAMED COMPANY AS PB-198. IN SUCH BALANCE SHEET, TWO ADVANCES OF RS.87,50,000/- AND OF RS.12,50,000/- HAVE BEEN SHOW N RESPECTIVELY BY SUCH COMPANY IN THE NAME OF SHRI IRSHAD ALI KHAN AND SHRI IQBAL SIDDIQUI. A COPY OF SUCH FINANCIAL STATEMENTS WERE ALSO FILED BY THE ASSESSEE BEFORE T HE CIT(A) BUT FOR THE TECHNICAL REASON OF NOT FILING AN APPLICATION FOR ADMISSION O F SUCH ADDITIONAL EVIDENCE UNDER RULE 46A OF THE I.T. RULES, 1962 THE LEARNED CIT(A) HAS NOT ADMITTED SUCH FINANCIAL STATEMENTS.WE ARE OF THE VIEW THAT THIS EVIDENCE GO ES TO THE ROOT OF THE MATTER, THEREFORE, WE ADMIT SUCH FINANCIAL STATEMENTS AND R ESTORE THIS ISSUE OF RECEIPT OF RS.1 CRORE BACK TO THE FILE OF THE AO TO DECIDE THE MATT ER AFRESH AFTER VERIFYING THE FINANCIAL STATEMENTS OF THE COMPANY MONEY CARE FINANCE & LEAS ING CO. THUS, THE ISSUE IS ALLOWED FOR STATISTICAL PURPOSES. THE REMAINING SUM OF RS.1,70,00,000/- WAS PAID BY T HE ASSESSEE TO THE SELLERS OF THE BHOPAL LAND, FROM TIME TO TIME, BY PROCURING FUNDS FROM SHRI NITISH DOSHI AND OTHERS. SINCE THE FUNDS WERE GIVEN BY THE INVESTORS AND THE SAME WERE NOT RESULT OF ANY UNDISCLOSED INCOME OF THE ASSESSEE, IT COULD NOT BE REGARDED AS UNEXPLAINED INVESTMENT OF THE ASSESSEE UNDER THE PROVISIONS OF SECTION 69/69B OF THE ACT. IN NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 56 QUESTIONNAIRE UNDER S.142(1) OF THE ACT DATED 28-11 -2011 ISSUED BY THE AO TO THE ASSESSEE [PB-84], BY GIVING A TABLE OF THE VARIOUS ENTRIES FOUND RECORDED IN A BS-8 DIARY [A DIARY BELONGING TO THE ASSESSEE, WHICH WAS SEIZED FROM THE PREMISES OF M/S. PHOENIX DEVCONS PVT. LTD.], THE ASSESSEE WAS REQUIR ED TO EXPLAIN THE SOURCES AND NATURE OF PAYMENTS STATED IN SUCH DIARY. ACCORDING TO THE ITEM NO. 30 OF THE SAID TABLE, AT PAGE NO. 97 OF BS-8, THE ASSESSEE HAD TAKEN A SU M OF RS.50,00,000/- FROM SHRI N. DOSHI AND AT THE BACKSIDE OF THE SAME PAGE, THERE I S A MENTION OF PAYMENT OF A SUM OF RS.49,87,500/- TO DR. YADAV IN BHOPAL. LIKEWISE, TH ERE IS MENTION OF PAYMENT OF RS.50,00,000/- AND RS.4,00,000/- AS PER PAGE NO. 12 2 (BACK) AND PAGE NO. 124 TO DR. YADAV. THE VERACITY AND AUTHENTICITY OF THE TRANSAC TIONS RECORDED IN SUCH BS-8 HAVE BEEN RELIED UPON BY THE REVENUE FOR MAKING VARIOUS ADDITIONS IN THE ASSESSEES CASE AND THEREFORE, THE ASSERTION OF THE ASSESSEE AS REG ARD TO RECEIPT OF FUNDS FROM SHRI N. DOSHI AND OTHERS GETS SELF ESTABLISHED FROM SUCH BS -8. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, WE FIND THAT THE AO HAS NOT VERIFIED THIS TRANSACTION IN LIGHT OF THE TRANSACTION RECORDED IN DIARY BS-8, THEREFORE, ON T HE ISSUE OF RS.1,70,00,000/-, WE RESTORE THE MATTER BACK TO THE FILE OF THE AO WITH DIRECTION TO VERIFY THE VARIOUS NOTINGS MADE IN BS-8 DIARY AND OTHER LOOSE PAPERS WHICH SUG GEST RECEIPTS OF CERTAIN FUNDS BY THE ASSESSEE FROM INVESTORS AND OTHERS. FOR THE REM AINING SUM OF RS.16,00,000/- PAID BY THE ASSESSEE FOR PURCHASE OF BHOPAL LAND THROUGH ITS COMPANY, THE AO IS DIRECTED TO VERIFY THE BALANCE-SHEET OF THE ASSESSEES SUCH CO. NAMELY PHOENIX LEISURE & LIFE STYLE AND DECIDE THE ISSUE AFRESH. IN THE RESULT, THE DEP ARTMENTAL GROUND NO.4 IS DISMISSED AND GROUND NO. 3(A) AND 3(B) OF THE ASSESSEE ARE AL LOWED FOR STATISTICAL PURPOSES. ASSESSEES GROUND NO. 4(A), 4(B) & 4(C) AND DEPARTMENTAL GROUND NOS.3 TO 3.3 THE BRIEF FACTS RELATING TO THE GROUND ARE THAT DUR ING THE COURSE OF THE ASSESSMENT PROCEEDINGS, FROM THE BANK STATEMENTS OF THE ASSESSEE, THE AO NOTED THAT THE ASSESSEE HAD DEPOSITED CASH AMOUNTING TO RS.94, 18,510/- AND RS.6,40,000/- ON DIFFERENT DATES IN BANK ACCOUNTS WITH THE BANK OF R AJASTHAN LTD. AND CITI BANK LTD. NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 57 RESPECTIVELY. THE AO NOTED THAT THE ASSESSEE HAD CL AIMED TO HAVE MADE CASH WITHDRAWALS FROM THE BANK FROM TIME TO TIME OR OUT OF THE MONEY LYING WITH HIM ON BEHALF OF VARIOUS CUSTOMERS BUT ACCORDING TO THE AO, THE A SSESSEE REPLY WAS A GENERIC ONE WITH A FAILURE TO FURNISH ANY DOCUMENTARY EVIDENCE OR DETAILS IN REGARD TO THE CUSTOMERS FROM WHOM THE ASSESSEE CLAIMED TO RECEIVE THE CAPTI ONED MONEY. CONSEQUENTLY, THE AO MADE THE ADDITIONS OF RS.94,18,510/- AND RS.6,40 ,000/- IN THE ASSESSEES INCOME BY HOLDING THE SAME AS HIS UNEXPLAINED CASH CREDIT FOR THE RELEVANT ASSESSMENT YEAR. MATTER CARRIED TO CIT(A) AND THE CIT(A), AFTER CONS IDERING THE SUBMISSION OF THE ASSESSEE, SET ASIDE THE ADDITION OF RS.94,18,510/- & RS.6,40,000/- BY GIVING HIS FINDINGS AT PARA 12.4 TO 12.6, WHICH READS AS UNDER: 12.4 I HAVE CONSIDERED THE A.O.S ORDER AS WELL AS THE APPELLANTS A/R SUBMISSION. HAVING CONSIDERED BOTH, I FIND THAT THE APPELLANT HAS MADE CASH DEPOSIT WITH CITIBANK FOR RS.6,40,000 /- & THE BANK OF RAJASTHAN LTD. FOR RS.94,18,510/- RESPECTIVELY. THE A.O. HAS MADE THE ADDITION OF CASH DEPOSITS MADE IN CITI BAN K AS WELL AS WITH BANK OF RAJASTHAN LTD. AS PER DETAILED REASONI NG GIVEN IN PARA-5 & 6 OF THE ASSESSMENT ORDER. BOTH THE BANK A CCOUNTS WERE JOINTLY HOLD BY THE APPELLANT ALONG WITH HIS WIFE S MT. SONALI AJMERA. HOWEVER THE APPELLANT OWNED UP THE ENTIRE DEPOSIT M ADE IN HIS ACCOUNT BY HIMSELF. THE PERUSAL OF THE ASSESSMENT O RDER CLEARLY SUGGEST THAT THE APPELLANT WAS NOT AWARE ABOUT THE CASH DEPOSIT MADE IN CITIBANK, WHEREAS IN RESPECT OF BANK OF RAJ ASTHAN LTD. MORE OR LESS THE SAME SOURCE WERE SHOWN AS SUBMITTE D IN THE APPELLATE PROCEEDINGS EXTRACTED AS ABOVE. THE A.O. HAS EXTRACTED THE APPELLANTS SUBMISSION IN PARA-6.3 OF THE ASSES SMENT ORDER IN RESPECT OF SOURCE OF DEPOSIT IN RESPECT OF BANK OF RAJASTHAN LTD. 12.5 THE PERUSAL OF THE APPELLANTS SUBMISSION SUGGESTS THAT THE APPELLANT INTENDS TO PROVE THE SOURCE OF DEPOSIT FR OM THE CURRENT YEAR INCME AS DISCLOSED BY THE APPELLANT AS PER 153 A RETURN, WHEREIN THE APPELLANT HAS DISCLOSED SOFTWARE CONSUL TANCY AND PROPERTY CONSULTANCY INCOME TO THE EXTENT OF RS.25, 00,000/- AND OTHER INCOME WHICH AMOUNTS TO TOTAL INCOME OF RS.28 ,27,160/- AS RETURNED INCOME U/S 153A OF THE ACT. FURTHER TO THA T, THE APPELLANT INTENDS TO EXPLAIN THE SOURCE OF CASH DEPOSIT OUT O F CASH WITHDRAWAL MADE FROM THE BANK OF RAJASTHAN LTD. OF RS.39,75,00 0/-. EVEN THE NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 58 APPELLANT MAKE THE CLAIM THAT HE WAS A CUSTODIAN OF SOME OF THE INVESTORS, WHICH ALSO WAS THE SOURCE OF CASH DEPOSI TS, THOUGH THE APPELLANT COULD NOT SUBSTANTIATE THE IDENTITY, CAPA CITY, NAME AND CREDENTIAL OF SUCH INVESTORS AT ANY POINT OF TIME E ITHER IN APPELLATE PROCEEDINGS OR IN ASSESSMENT PROCEEDINGS. HENCE APP ELLANTS THIS ARGUMENT OF BEING CUSTODIAN OF INVESTORS IS OF NO R ELEVANCE AND COMPLETELY UNFOUNDED. WITH THIS PERSPECTIVE THE APP ELLANT INTEND TO EXPLAIN THE SOURCE OF CASH DEPOSITS IN BOTH THE AFO RESAID BANK ACCOUNTS. 12.6 HAVING PERUSED THE APPELLANTS EXPLANATION AND ALSO AFTER TAKING NOTE OF RETURN OF INCOME FILED BY THE APPELL ANT U/S 153A OF THE ACT, WHICH IS APPEARING ON PAGE-63 TO 65 OF THE PAP ER BOOK, I AM OF THE CONSIDERED VIEW THAT THE APPELLANT HAS DISCLOSE D INCOME FROM DIFFERENT HEADS AS STATED ON PAGE-65 OF THE PAPER B OOK OF RS.28,27,160/- ON WHICH THE APPELLANT HAS MADE PAYM ENT OF TAX. THOUGH I FIND THAT THE SAID RETURN OF THE APPELLANT WAS FILED SUBSEQUENT TO SEARCH OPERATION AND I.E. AS ON 26/11 /07, THUS, IN MY CONSIDERED VIEW AFTER PAYMENT OF TAX THE APPELLANT HAS LEFT WITH MERELY TWENTY LACS RUPEES IN HIS HAND APPROXIMATELY . AFTER TAKING NOTE OF CERTAIN PAYMENTS BY THE APPELLANT TOWARDS H OUSE HOLD EXPENSES AND OTHER FINANCIAL COMMITMENTS THE POSSIB ILITY OF AVAILABILITY OF CASH TO THE EXTENT OF RS.16,50,000/ - CANNOT BE RULED OUT. FURTHER AS FAR AS THE SOURCE OF CASH WITHDRAWA LS FROM BANK OF RAJASTHAN LTD. IS CONCERNED, I CONSIDER IT PROPER A ND APPROPRIATE TO DIRECT THE A.O. TO VERIFY THE NATURE OF DEPOSITS IN THE SAID BANK ACCOUNT BEFORE WITHDRAWAL THROUGH WHICH THE APPELLA NT INTEND TO EXPLAIN THE SOURCE OF CASH DEPOSITS IN THE SAME BAN K ACCOUNT. THE A.O. IS DIRECTED TO VERIFY THE CREDIT ENTRY IN THE SAID BANK ACCOUNT AND ALSO TO TAKE NOTE OF FACT THAT WHETHER THE SAID BANK ACCOUNT WAS DISCLOSED BY THE APPELLANT PRIOR TO SEARCH THRO UGH FILING RETURN OF INCOME. IF THE APPELLANT COULD EXPLAIN THE SOURC E OF DEPOSIT IN THE SAID BANK ACCOUNT IN RELATION TO THE APPELLANTS RE TURNED INCOME OR BUSINESS INCOME THEN ONLY THE SOURCE OF CASH WITHDR AWAL AS CLAIMED BY THE APPELLANT OF RS.39,75,000 CAN BE TAK EN INTO ACCOUNT AS EXPLAINED SOURCE FOR EXPLAINING THE CASH DEPOSIT IN THE BANK OF ACCOUNT OF APPELLANT MAINTAINED WITH BANK OF RAJAST HAN LTD. IN THIS PERSPECTIVE, IF THE APPELLANT COULD ADDUCE THE SOUR CE OF DEPOSIT IN THE SAID BANK ACCOUNT IN RELATION TO HIS RETURN OF INCOME OR SOURCE OF INCOME THEN THE A.O. SHOULD TREAT THE SAID DEPOS IT AS EXPLAINED, IN CASE OF FAILURE ON THE PART OF THE APPELLANT THE SAME SHOULD BE NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 59 HELD OTHERWISE. WITH THIS OBSERVATION, THE APPELLAN TS THIS GROUND OF APPEAL IS ADJUDICATED. ACCORDINGLY THE A.O. SHOULD DETERMINE THE SOURCE OF CASH DEPOSIT IN THE LIGHT OF AFORESAID DI RECTIONS IN THE APPELLANTS CASE AND DETERMINE THE UNEXPLAINED CASH DEPOSITS, IF ANY. WITH THIS OBSERVATION, THIS GROUND OF APPEAL I S ACCORDINGLY ADJUDICATED. THUS, THE APPELLANTS THESE GROUNDS OF APPEAL ARE PARTLY ALLOWED. THE LD. AR HAS MADE ORAL SUBMISSION AS WELL AS WRIT TEN SUBMISSION AS UNDER: IN THIS REGARD IT IS SUBMITTED THAT THE ASSESSEE IN HIS RETURN OF INCOME, FILED UNDER S. 153A [PB-65], HAS DECLARED A N UNDISCLOSED INCOME OF RS.25,00,000/- FROM PROPERTY CONSULTANCY/ BROKIN G ETC. AND THEREFORE, ELIGIBILITY OF THE ASSESSEE TO CLAIM CREDIT FOR AVA ILABILITY OF SUCH INCOME FOR MAKING DEPOSIT IN HIS BANK ACCOUNT CANNOT BE DOUBTE D. IT IS FURTHER SUBMITTED THAT THERE IS NO JUSTIFICAT ION IN THE CIT(A)S FINDING THAT FOR WORKING OUT THE AMOUNT OF EXPLAINE D CASH DEPOSITS, CREDIT FOR WITHDRAWAL OF CASH FROM THE SAME BANK ACCOUNT S HOULD BE GIVEN TO THE ASSESSEE ONLY IF THE SAID BANK ACCOUNT WAS FOUND IN THE REGULAR RETURN FILED BY THE ASSESSEE. IT IS SUBMITTED THAT THE LEA RNED CIT(A) OUGHT TO HAVE CONSIDERED THAT WHEN AN ADDITION IS MADE IN RESPECT OF CERTAIN CASH DEPOSITS MADE IN ONE BANK ACCOUNT, THEN THE NECESSA RY CONSIDERATION WILL ALSO BE REQUIRED TO BE GIVEN IN RESPECT OF THE CASH WITHDRAWN FROM THE SAME BANK ACCOUNT IRRESPECTIVE OF THE FACT THAT WHE THER OR NOT SUCH BANK ACCOUNT WAS DULY DISCLOSED BY THE ASSESSEE IN HIS R ETURN FILED PRIOR TO SEARCH. IT IS SUBMITTED THAT FOR DETERMINING ANY UN DISCLOSED INCOME OF AN ASSESSEE ON THE BASIS OF CERTAIN DOCUMENTS THE ENTI RE DOCUMENT HAS TO BE CONSIDERED IN ITS ENTIRETY AND, ACCORDINGLY, IF THE DEPARTMENT WISH TO PLACE RELIANCE ON ONE SIDE OF TRANSACTIONS I.E. OF CASH D EPOSITS IN BANK ACCOUNT IT CANNOT CLOSE ITS EYES ON THE OTHER SIDE OF THE TRAN SACTIONS I.E. OF CASH WITHDRAWALS. IT IS SUBMITTED THAT CREDIT FOR CASH W ITHDRAWALS FROM A BANK NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 60 ACCOUNT DESERVES TO BE GIVEN TO ONE ASSESSEE FOR EX PLAINING THE SOURCES OF CASH DEPOSITS IN THE SAME BANK ACCOUNT UNLESS AN D UNTIL IT IS BROUGHT ON RECORD BY THE REVENUE THAT THE CASH WITHDRAWN WAS N OT AVAILABLE WITH THE ASSESSEE FOR MAKING RE-DEPOSITS, WHICH IS NOT A CAS E HERE. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, IT IS SUBMITTED THAT EITHER THE ENTIRE ADDITION MADE BY THE LEARNED AO DESERVES TO BE DELE TED OR AS AN ALTERNATE, THE DIRECTION ISSUED BY THE CIT(A) MAY B E MODIFIED BY DIRECTING THE AO TO CONSIDER THE ENTIRE CASH FLOW OF THE ASSE SSEE INTO CONSIDERATION WHICH WOULD INTER-ALIA INCLUDE THE CASH WITHDRAWAL MADE BY THE ASSESSEE FROM THE VARIOUS BANK ACCOUNTS. LD. DR RELIED UPON THE ORDER OF THE ASSESSING OFFI CER AND ALSO AGITATED THE ACTION OF THE CIT(A) IN RESTORING THE MATTER BACK TO THE F ILE OF THE ASSESSING OFFICER. WE HAVE HEARD RIVAL CONTENTIONS OF BOTH THE PARTIE S AND HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND FROM THE ORDE R OF THE CIT(A) THAT ASSESSEE TRIED TO PROVE THE SOURCE OF DEPOSIT FROM CURRENT YEAR INCOM E AS DISCLOSED BY THE ASSESSEE AS PER RETURN U/S 153A OF THE ACT. THE CIT(A) HAS HELD THAT THE ASSESSEE DID NOT PROVE THE SOURCE OF CASH DEPOSIT, THEREFORE, ASSESSEE DID NOT PROVE THE SOURCE OF INVESTOR MONEY, THEREFORE, THIS CONTENTION OF THE ASSESSEE WAS REJE CTED BY THE CIT(A). WE HEREBY MODIFY THE DIRECTION OF THE CIT(A) TO THE EXTENT TH AT THE ASSESSEE SHOULD BE GIVEN FULL CREDIT FOR CASH WITHDRAWN BY HIM FROM HIS SAVING BA NK ACCOUNTS FOR EXPLAINING THE SOURCES OF CASH DEPOSITS MADE IN SUCH ACCOUNTS. THU S, THE GROUNDS OF THE ASSESSEE ARE PARTLY ALLOWED AND THAT OF THE REVENUE ARE DISM ISSED. ASSESSEES GROUND NO. 5(A), 5(B) & 5(C) AND DEPARTMENTAL GROUND NOS.5 & 5.1 THE FACTS RELATING TO THE ISSUE, AS NOTED BY THE AO IN THE ASSESSMENT ORDER ARE THAT DURING THE COURSE OF THE SEARCH PROCEEDINGS IN THE GROUP, CERTAIN LOOSE PAPERS CONTAINING 19 PAGES INVENTORIZED AS LPS A/4 WERE SE IZED FROM THE PREMISES OF M/S. NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 61 PHOENIX DEVCONS PVT. LTD.. THE AO FURTHER NOTED THA T ON PAGE NO.19 OF THE LPS-A/4, THERE IS NOTING IN RESPECT OF DETAILS OF FUNDS RECE IVED BY THE ABOVE NAMED COMPANY. AMONGST THE DETAILS, THERE IS A NOTING AS REGARD TO FUNDS OF RS.2,25,00,000/- GIVEN BY THE ASSESSEE TO THE COMPANY. THE AO REQUIRED THE AS SESSEE TO EXPLAIN THE SOURCES OF PROVIDING THE FUNDS BY THE ASSESSEE TO THE ABOVE NA MED COMPANY. ACCORDING TO THE AO, THE ASSESSEE COULD NOT FURNISH THE NECESSARY DE TAILS AND, THEREFORE, THE AO BY ASSUMING THE IMPUGNED RECEIPTS PERTAINS TO A.Y. 200 8-09 ONLY, MADE THE ADDITION OF RS.2,25,00,000/- IN THE ASSESSEES INCOME UNDER THE HEAD UNEXPLAINED INVESTMENT IN M/S. PHOENIX DEVCONS PVT. LTD.. MATTER CARRIED TO CIT(A) AND THE CIT(A) AFTER CONSI DERING THE SUBMISSION OF THE ASSESSEE, DELETED THE ADDITION OF RS.2,00,00,000/- AND CONFIRMED THE ADDITION TO THE EXTENT OF RS.25,00,000/- BY GIVING HIS OBSERVATIONS AT PARA 14.4 TO 14.6 OF HIS ORDER, WHICH READS AS UNDER: 14.4 I HAVE CONSIDERED THE AOS ORDER AS WELL AS THE APP ELLANTS A/R SUBMISSIONS. HAVING CONSIDERED BOTH, I FIND THA T THE A.O. NOTICED THAT A SUM OF RS.2,25,00,000/- HAS BEEN INT RODUCED BY THE APPELLANT IN THE COMPANY M/S PHOENIX DEVCON PVT. LT D., AS PER PAGE NO.19 OF LPS-A/4. HOWEVER, I AM NOT IN AGREEME NT WITH APPELLANTS A/R THIS PROPOSITION THAT PAGE NO.19 OF LPS-A/4 IS A DUMB DOCUMENT. THE SAID DOCUMENT WAS SEIZED FROM TH E PREMISES OF APPELLANTS MAIN GROUP COMPANY M/S PHOENIX DEVCO NS PVT. LTD. THEREFORE THE APPELLANTS A/R THIS ARGUMENT THAT TH E SAID DOCUMENT WAS SEIZED FROM THIRD PARTY PREMISES IS OF NO CONSE QUENCE AND ALSO HAVING NO RELEVANCE ON THE ISSUE. AS THE APPEL LANT IS A ONE OF THE DIRECTOR OF THE SAID COMPANY AND THE APPELLANT S OWN SUBMISSION SUGGESTS THAT THE AFORESAID SUM OF RS.2, 25,00,000/- WAS BROUGHT BY THE APPELLANT IN THE COMPANY M/S PHO ENIX DEVCONS PVT. LTD. THE APPELLANT AS PER DETAILED SUBMISSION MADE AS ABOVE SUBMITTED THAT HE MANAGED THE FUND FROM TWO PARTIES , A SUM OF RS.2,00,00,000/- FROM M/S MONEY CARE FINANCE & LEAS ING PVT. LTD, AND RS.25,00,000/- FROM SMT. ROSHNI DOSHI. THE APPE LLANTS A/R CLAIMS THAT THE DETAILS OF SUCH SUM HAVE BEEN FOUND DULY RECORDED IN THE BOOKS OF M/S PHOENIX DEVCON PVT. LTD. ACCORD INGLY THE APPELLANTS A/R REQUESTED THAT AS THE SOURCE OF SUM OF NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 62 RS.2,25,00,000/- IS EXPLAINED AS ARRANGED FROM TWO DIFFERENT ENTITIES AS DETAILED IN THE SUBMISSION EXTRACTED AS ABOVE, HENCE SAID SOURCE SHOULD BE CONSIDERED AS EXPLAINED IN TH E HANDS OF THE APPELLANT. 14.5 HOWEVER HAVING TAKEN NOTE OF SUBMISSION AVAILA BLE ON RECORD, I AM NOT INCLINED TO ACCEPT THE APPELLANTS REQUEST IN THE BACKGROUND OF FACT THAT TILL DAY, THE APPELLANT COU LD NOT ESTABLISH THE IDENTITY OF SMT. ROSHNI DOSHI IN THE FORM OF CONFIR MATION LETTER OR THROUGH ADDUCING THE PAN NUMBER OF SMT. ROSHNI DOSH I, WHICH COULD ESTABLISH THE IDENTITY OF PERSON. NOT ONLY TH IS, THE APPELLANT ALSO COULD NOT EVEN FILE ANY COGENT EVIDENCE OR DOC UMENT TO PROVE THE IDENTITY, CAPACITY, GENUINENESS OF THE SAID TRA NSACTION ENTERED BY HER WITH THE APPELLANT. I FIND THAT THE COURTS H AVE HELD THAT MERELY A TRANSACTION THROUGH CHEQUES WILL NOT ESTAB LISH GENUINENESS OF TRANSACTION UNLESS UNTIL IDENTITY AN D GENUINENESS OF TRANSACTION IS ESTABLISHED. IN VIEW OF THE SAME, I DO NOT AGREE WITH THE APPELLANTS A/R REQUEST TO THE EXTENT OF RS.25, 00,000/- INTRODUCED BY THE APPELLANT IN THE FORM OF SHARE AP PLICATION MONEY, WHICH IS EVIDENT FROM SEIZED DOCUMENT I.E. LPS-A/4 IN THE NAME OF SMT. ROSHNI DOSHI. ACCORDINGLY I CONSIDER IT PROPER AND APPROPRIATE TO CONFIRM THE ADDITION MADE BY THE AO TO THE EXTEN T OF RS.25,00,000/- ON THIS ACCOUNT ITSELF. ACCORDINGLY TO THIS EXTENT THE ADDITION IS CONFIRMED. 14.6 HOWEVER, AS THE APPELLANT COULD ESTABLISH THE SOUR CE OF SUM INTRODUCED TO THE EXTENT OF RS.2,00,00,000/- IN THE NAME OF M/S MONEY CARE FINANCE & LEASING PVT. LTD. BY GIVING SP ECIFIC PAN NO., THEREFORE TO THIS EXTENT THE ADDITION SO MADE BY THE A.O. IS DELETED. HOWEVER THE A.O. IS DIRECTED TO INTIMATE T HE DETAIL OF SAID TRANSACTION TO THE ASSESSING OFFICER OF M/S MONEY C ARE FINANCE & LEASING PVT. LTD. WITH HIS SPECIFIC OBSERVATION AS MADE IN THE ASSESSMENT ORDER IN RESPECT OF INTRODUCTION OF RS.2 ,00,00,000/- BY M/S MCF & L PVT. LTD. FOR NECESSARY ACTION AT HIS E ND. THUS, THE ADDITION TO THE EXTENT OF RS.25,00,000/- IS CONFIRM ED. ACCORDINGLY, THIS GROUND OF APPEAL IS PARTLY ALLOWED. NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 63 THE LD. AR HAS MADE ORAL SUBMISSION AS WELL AS WRIT TEN SUBMISSION AS UNDER: THE VERY BASIS OF MAKING ADDITION OF RS.2,25,00,0 00/- IN THE ASSESSEES HANDS BY THE AO WAS THE LOOSE PAPER PAGE NO.19 OF LPS-A/4 FOUND AND SEIZED IN THE PREMISES OF M/S. PHOENIX DE VCONS PVT. LTD. [A COPY OF SUCH LOOSE PAPER HAS BEEN APPENDED BY THE L EARNED AO IN THE ASSESSMENT ORDER OF THE ABOVE NAMED COMPANY FOR A.Y . 2008-09]. IN SUCH LOOSE PAPER, THERE HAS BEEN MENTION OF FUNDS O F RS.6,00,00,000/- INVESTED BY VARIOUS PROMOTERS OF THE COMPANY WHICH, INTER ALIA , INCLUDES INVESTMENT OF FUNDS OF RS.2,25,00,000/- BY THE ASSE SSEE. BEFORE BOTH THE AUTHORITIES BELOW, THE ASSESSEE HAS TAKEN THE PLEA THAT SUCH LOOSE PAPER PAGE NO.19 CONTAINS BOTH CASH AND CHEQUE TRANSACTIO NS OF M/S. PHOENIX DEVCONS PVT. LTD. AND THE TRANSACTIONS OF RS.6,00,0 0,000/- AS FOUND STATED IN THE SAID LOOSE PAPER WERE TAKEN PLACE THR OUGH CHEQUES ONLY. IT WAS CONTENDED BEFORE THE AO THAT SUCH FUNDS WERE MA NAGED BY THE ASSESSEE AND OTHER DIRECTORS FROM THEIR VARIOUS ASS OCIATES, FRIENDS AND RELATIVES. ACCORDINGLY, THE ASSESSEE HAD GOT MANAGE D FUNDS OF RS.2,00,00,000/- AND RS.25,00,000/- RESPECTIVELY FR OM M/S. MONEY CARE FINANCE & LEASING PVT. LTD. AND SMT. ROSHNI DOSHI. IT IS SUBMITTED THAT SUCH FUNDS AGGREGATING TO RS.2,25,00,000/- WERE NOT INVESTED IN THE ABOVE NAME COMPANY IN FORM OF CASH AND EVEN THE ABO VE NAMED COMPANY, WHILE EXPLAINING ITS UNEXPLAINED INVESTMEN TS IN CASH, HAD NOT CLAIMED SET-OFF FOR THE RECEIPT OF RS.6,00,00,000/- . IT IS SUBMITTED THAT IT HAS NEVER BEEN A CASE OF THE REVENUE THAT THE ASSES SEE PROVIDED FUNDS TO THE TWO DEPOSITORS FOR MAKING INVESTMENT IN THE ABO VE NAMED COMPANY. IT IS SUBMITTED THAT IN RESPECT OF FUNDS OF RS.25, 00,000/- GIVEN BY SMT. ROSHNI DOSHI TO M/S. PHOENIX DEVCONS PVT. LTD. , LD. CIT(A) HAS MADE AN ENHANCEMENT IN THE HANDS OF THE ABOVE NAMED COMPANY AND, THEREFORE, THE SAME ADDITION CANNOT BE RETAINED IN THE HANDS OF THE ASSESSEE. NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 64 SINCE, THE FUNDS WERE NOT FOUND CREDITED IN THE BO OKS OF THE ASSESSEE, NO ADDITION UNDER S. 68 CAN BE LEGITIMATE LY MADE IN THE HANDS OF THE ASSESSEE. SINCE, THE ENTIRE FUNDS, WHICH INT ER-ALIA INCLUDE RECEIPT OF FUNDS FROM M/S. MONEYCARE LEASING & FINANCE PVT. LT D. AND SMT. ROSHNI DOSHI, WERE DULY RECORDED IN THE REGULAR BOOKS OF A CCOUNT OF M/S. PHOENIX DEVCONS PVT. LTD., THE ASSESSEE COULD NOT BE MADE A NSWERABLE TO EXPLAIN TO SUCH CREDITS. IT IS SUBMITTED THAT IT IS NOT THE CASE OF THE REVENUE THAT THE ASSESSEE IS BENAMIDAR OF ABOVE ENTITIES. IN SUCH CI RCUMSTANCES, INVESTMENT MADE BY SOME OTHER ENTITIES, CANNOT BE R EGARDED AS UNEXPLAINED INVESTMENT IN THE HANDS OF THE ASSESSEE EITHER UNDER S. 69 OR 69B OF THE ACT. CONSEQUENTLY, THE ENTIRE ADDITION D ESERVES TO BE DELETED. LD. DR RELIED ON THE ORDER OF THE AO. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PA RTIES AND HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD. LOOKING INTO FACTS AN D CIRCUMSTANCES, WE FIND THAT CIT(A) HELD THAT A SUM OF RS.2,25,00,000 HAS BEEN INTRODUC ED BY THE ASSESSEE IN THE CO. M/S. PHEONIX DEVCON P. LTD AS PER PAGE 19 OF LPS A-4. TH E CIT(A) HAS HELD THAT LPS A-4 IS NOT A DUMB DOCUMENT. THE CIT(A) HAS HELD THAT THE D OCUMENT WAS FOUND FROM THE THIRD PARTY BUT ASSESSEE IS DIRECTOR OF THE SAID COMPANY AND AS PER THE SUBMISSION, RS.2 CRORES WERE RECEIVED FROM MONEY CARE FINANCE LEASIN G LTD. AND RS.25 LACS FROM SMT. ROSHNI DOSHI. THE CIT(A) HAS TREATED 2 CRORES AS EX PLAINED DEPOSIT, WE FIND THAT BEFORE THE CIT(A), THE ASSESSEE COULD BE ABLE TO EXPLAIN T HE GENUINENESS OF DEPOSIT OF RS.2 CRORES MADE BY M/S. MONEY CARE LEASING AND FINANCE P. LTD. BY PRODUCING ALL THE NECESSARY DOCUMENTARY EVIDENCES. WE ALSO FIND THAT THE CIT(A) HAS DIRECTED THE AO TO INFORM THE CONCERNED AO IN RESPECT OF INTRODUCTION OF RS.2 CRORES FOR NECESSARY ACTION. THEREFORE, ON THE ISSUE OF RS.2 CRORES, OUR INTERFE RENCE IS NOT REQUIRED. IN RESPECT OF RS.25 LACS, THE ASSESSEE DID NOT PRODUCE ANY EVIDEN CE BUT ASSESSEE HAS TAKEN THE CONTENTION THAT IN RESPECT OF THIS RS.25 LACS, CIT( A) HAS ALREADY MADE ENHANCEMENT IN THE HANDS OF M/S. PHOENIX DEVCON P. LTD., THEREFORE , ADDITION CANNOT BE MADE IN THE HANDS OF THE ASSESSEE. WE REVERSE THE FINDING OF TH E CIT(A) AND RESTORE THIS ISSUE TO NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 65 THE FILE OF THE AO TO VERITY WHETHER RS.25 LACS GIV EN BY SMT. ROSHNI DOSHI TO PHOENIX DEVCON P. LTD. HAS BEEN ASSESSED OR SATISFACTORILY EXPLAINED IN THE HANDS OF THE COMPANY I.E. PHOENIX DEVCON P. LTD. THE AO IS DIREC TED TO VERIFY ACCORDINGLY. IF THE SOURCE OF DEPOSIT OF RS.25 LACS IS NOT EXPLAINED BY THE PDPL, THE ADDITION HAS TO BE MADE IN THE HANDS OF PDPL ONLY. ACCORDINGLY, THE GR OUNDS OF THE ASSESSEE ARE ALLOWED AND THAT OF THE DEPARTMENT ARE DISMISSED. ASSESSEES GROUND NO. 6(A), 6(B) & 6(C) THE FACTS RELATING TO THE GROUNDS, AS NOTED BY THE AO IN THE ASSESSMENT ORDER ARE THAT DURING THE COURSE OF THE SEARCH PROCEEDING S IN THE GROUP, A LOOSE PAPER INVENTORIZED AS PAGE NO. 15 OF LPS A/4 WAS SEIZED FROM THE PREMISES OF M/S. PHOENIX DEVCONS PVT. LTD.. THE AO FURTHER NOTED THAT ON SUC H LOOSE PAPER, THERE IS A NOTING WITH THE NARRATION NILESH SIR HAWALA AGAINST LAND PAYME NT OF RS.1,00,00,000/-. THEREAFTER, THE AO REQUIRED THE ASSESSEE TO GIVE TH E COMPLETE DETAILS OF THE ABOVE SAID NOTING WITH THE RELEVANT DOCUMENTS. IN REPLY, THE A SSESSEE SUBMITTED THAT THE ABOVE STATED PAYMENT OF RS.1,00,00,000/- WAS TAKEN BY HIM THROUGH ACCOUNT PAYEE CHEQUE BEARING NO.1460101427487 DATED 24.12.2007 DRAWN ON THE BANK OF ABOVE NAMED COMPANY. THE ASSESSEE FURTHER SUBMITTED THAT THE FU NDS RECEIVED FROM THE COMPANY WERE ULTIMATELY UTILIZED TOWARDS PAYMENTS TO VARIOU S FARMERS FOR PURCHASE OF LAND ON BEHALF OF THE ASSESSEE COMPANY. THE AO, FROM THE BA NK STATEMENT OF THE ASSESSEE, NOTICED THAT THE CREDIT FOR THE REMITTANCE RECEIVED BY THE ASSESSEE WAS GIVEN BY HIS BANKER ON 24.12.2007. HOWEVER, THE AO ALSO NOTED TH AT AS AGAINST THIS REMITTANCE, THERE WAS A PAYMENT THROUGH ACCOUNT PAYEE CHEQUE WH ICH GOT DEBITED IN THE BANK ACCOUNT OF THE ASSESSEE ON 27.12.2007. THE AO ASKED THE ASSESSEE TO FURNISH THE DETAILS OF THE PAYEE TO WHOM THE PAYMENT WAS MADE. ACCORDING TO THE AO, THE ASSESSEE COULD NOT FURNISH THE DETAILS OF THE FARME RS, THE LANDS FOR WHICH PAYMENTS WERE MADE AVAILABLE TO THE ASSESSEE BY THE ABOVE NA MED COMPANY. FINALLY, THE AO REGARDED THE ENTIRE AMOUNT OF RS.1,00,00,000/- RECE IVED BY THE ASSESSEE FROM M/S. PHOENIX DEVCONS PVT. LTD. AS UNACCOUNTED RECEIPTS O F THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION AND MADE THE IMPUGNED ADDITION. NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 66 MATTER CARRIED TO CIT(A) AND THE CIT(A), AFTER CONS IDERING THE SUBMISSION OF THE ASSESSEE, CONFIRMED THE ADDITION OF RS.1,00,00,000/ - BY GIVING HIS FINDINGS AT PARA 11.4 AND 11.5 OF HIS ORDER. THE LD. AR HAS MADE ORAL SUBMISSION AS WELL AS WRIT TEN SUBMISSION AS UNDER: THE LEARNED CIT(A) AT PARA 11.4 OF HIS ORDER HAS ADMITTED THE RECEIPT OF A SUM OF RS.1,00,00,000/- BY THE ASSESSE E FROM M/S. PHOENIX DEVCONS PVT. LTD. IN WHICH THE ASSESSEE WAS ONE OF THE DIRECTORS. HOWEVER, THE CIT(A) DOUBTED THE NATURE OF RECEIPT I N THE HANDS OF THE ASSESSEE BY STATING THAT IT WAS NOT CLEAR WHETHER I T WAS IN THE FORM OF REVENUE OR CAPITAL IN NATURE. THE CIT(A) BRUSHED AS IDE THE CLAIM OF THE ASSESSEE THAT THERE WAS NO WITHDRAWAL OF SUM OF RS. 1,00,00,000/- FROM THE BANK ACCOUNT OF THE ASSESSEE FROM WHICH IT COUL D BE INFERRED THAT THE ASSESSEE RECEIVED SUCH SUM FROM HIS COMPANY FOR MAK ING CASH PAYMENTS TO THE FARMERS FROM WHOM LAND FOR THE PROJECT OF TH E COMPANY WAS PURCHASED. THE CIT(A) HAS ALSO GIVEN A FINDING THAT THE ASSESSEE AND HIS GROUP WAS INDULGED IN LARGE SCALE UNACCOUNTED TRANS ACTIONS. UNDISPUTEDLY, THE IMPUGNED SUM OF RS.1,00,00,000/- WAS RECEIVED BY THE ASSESSEE FROM HIS COMPANY THROUGH ACCOUNT PA YEE CHEQUE DRAWN ON HDFC BANK. SUCH FINDING HAS ALSO BEEN GIVEN BY T HE CIT(A) AT PARA 11.4 OF HIS ORDER. IT IS SUBMITTED THAT SUCH PAYMEN T HAS BEEN SHOWN BY THE ABOVE NAMED COMPANY AS A LOAN TO THE ASSESSEE WHICH IS EVIDENT FROM THE COPY OF THE ACCOUNT OF THE ASSESSEE IN THE BOOK S OF THE COMPANY AS PLACED AT PAGE NO.212 OF THE PAPER BOOK. IT IS SUBM ITTED THAT AS PER SUCH LEDGER ACCOUNT, AFTER DEBITING THE ACCOUNT OF THE A SSESSEE WITH THE AFORESAID PAYMENT OF RS.1,00,00,000/-, CLOSING DEBI T BALANCE AS ON 31-03- 2008 IN THE NAME OF ASSESSEE IS GETTING APPEARED W HICH FULLY TALLIES WITH THE AMOUNT SHOWN UNDER THE HEAD DIRECTOR ADVANCE IN THE AUDITED NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 67 BALANCE-SHEET OF M/S. PHOENIX DEVCONS PVT. LTD. AS FILED AT PAGE NO.195 IN THE PAPER BOOK OF THE ABOVE NAMED COMPANY FOR IT S APPEAL BEFORE THIS BENCH FOR A.Y. 2008-09 IN APPEAL NO.IT-197/IND/2013 . IT IS THEREFORE SUBMITTED THAT ONCE SUCH AMOUNT IS SHOWN AS A RECOV ERABLE BY THE PAYER COMPANY ITS NATURE HAS TO BE REGARDED AS THAT OF CA PITAL ONLY [A LIABILITY] AND, THEREFORE, IT CANNOT BE REGARDED AS AN INCOME MUCH LESS A TAXABLE INCOME OF THE ASSESSEE. IT IS NOT THE CASE OF THE R EVENUE THAT THE AMOUNT TAKEN BY THE ASSESSEE FROM THE COMPANY WAS FALLING WITHIN THE MISCHIEF OF PROVISIONS OF S.2(22)(E) OF THE ACT. IN SUCH CIRCUM STANCES, IT IS SUBMITTED THAT IRRESPECTIVE OF THE PURPOSE OF TAKING THE SUM BY THE ASSESSEE FROM THE COMPANY AND ITS ULTIMATE DEPLOYMENT, IT CANNOT BE REGARDED AS INCOME OF THE ASSESSEE. ACCORDINGLY, THE ADDITION M ADE BY THE AO AND CONFIRMED BY THE CIT(A) DESERVES TO BE DELETED. THE LD. DR RELIED ON THE ORDER OF THE AO. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PA RTIES AND HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT IT IS UN DISPUTED FACT THAT A SUM OF RS.1 CRORE WAS RECEIVED BY THE ASSESSEE FROM ITS CO. THROUGH A CCOUNT PAYEE CHEQUE DRAWN ON HDFC BANK. ON PAGE 212 OF THE PAPER BOOK, THE ASSES SEE HAS SUBMITTED THE COPY OF THE ACCOUNT OF THE ASSESSEE IN THE BOOKS OF THE COM PANY. AS PER THE LEDGER ACCOUNT AFTER DEBITING THE ACCOUNT OF ASSESSEE WITH THE AFO RESAID PAYMENT OF RS.1 CRORE, THE CLOSING DEBIT BALANCE AS ON 31.3.2008 IN THE NAME O F THE ASSESSEE IS GETTING APPEARED WHICH FULLY TALLIED WITH AMOUNT SHOWN UNDER HEAD D IRECTORS ADVANCE IN THE AUDITED BALANCE SHEET OF PHOENIX DEVCON P. LTD. WHICH IS ON PAGE 195 OF THE PAPER BOOK. IT IS THE CONTENTION OF THE ASSESSEE THAT ONCE THE ASSESS EE RECEIVED THIS AMOUNT FROM THE COMPANY AS ADVNACE, IT IS CAPITAL RECEIPT ONLY, THE REFORE, IN OUR OPINION, THIS REQUIRES VERIFICATION AT THE END OF THE ASSESSING OFFICER. T HE AO IS DIRECTED TO VERIFY THE PAYMENT OF RS.1 CRORE BY THE COMPANY TO THE ASSESSEE THROUG H ACCOUNT PAYEE CHEQUE ON HDFC BANK. THE ASSESSING OFFICER SHOULD ALSO VERIFY THAT WHETHER OR NOT THE PAYMENT IS SHOWN UNDER THE HEAD DIRECTOR ADVANCE IN THE BOOK S OF PHOENIX DEVCON P. LTD. THE NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 68 AO IS DIRECTED TO VERIFY THE CLAIM OF THE ASSESSEE AS PER LAW. ACCORDINGLY, THIS ISSUE IS ALLOWED FOR STATISTICAL PURPOSES. FINALLY, APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED IN TERMS AS INDICATED ABOVE. DEPARTMENTAL GROUND NO. 1 THE REVENUE HAS TAKEN THIS GROUND OF APPEAL AGAINST THE ACTION OF THE LD. CIT(A) IN DECIDING THE APPEAL AGAINST THE PRINCIPLES OF NA TURAL JUSTICE, WITHOUT AFFORDING ANY OPPORTUNITY TO THE AO OR REMANDING IT BACK IN VIOLA TION OF THE DEPARTMENTAL INSTRUCTION THAT IN SEARCH ASSESSMENTS APPEAL ORDER BE PASSED E ITHER BASED ON REMAND REPORT OR AFTER HEARING THE AO. THE LD. AR HAS MADE ORAL SUBMISSION AS WELL AS WRIT TEN SUBMISSION AS UNDER: AT THE OUTSET, IT IS SUBMITTED THAT THE NECESSAR Y PROVISIONS PRESCRIBING FOR PROCEDURE OF AN APPEAL BEFORE THE C OMMISSIONER (APPEALS) ARE CONTAINED IN SECTION 250 OF THE INCOME-TAX ACT, 1961. AS PER THE PROVISIONS OF SUB-SECTION (1) OF S. 250, THE COMMIS SIONER (APPEALS) IS REQUIRED TO GIVE A NOTICE OF THE APPEAL TO THE ASSE SSEE AND AS ALSO TO THE CONCERNING ASSESSING OFFICER. IT IS SUBMITTED THAT NO FORM HAS BEEN STATUTORILY PRESCRIBED EITHER UNDER THE INCOME-TAX ACT, 1961 OR INCOME- TAX RULES, 1962 FOR ISSUANCE OF THE NOTICE CONTEMPL ATED UNDER S. 250. HOWEVER, UPON RECEIPT OF THE APPEAL FROM THE SIDE O F ASSESSEE, AS PER THE CBDTS INSTRUCTIONS, A FORM TITLED AS ITNS-51, SEEK ING WILLINGNESS OF THE AO TO APPEAR AT THE APPELLATE STAGE, IS ISSUED AND THEREUPON THE ASSESSING OFFICER HAS TO COMMUNICATE HIS WILLINGNES S TO THE CIT (A) WITHIN 10 DAYS FROM THE RECEIPT OF SUCH ITNS-51. FURTHER, A COPY OF THE APPEAL MEMO IN THE PRESCRIBED FORM NO.35 ALONG WITH THE GR OUNDS OF APPEAL TAKEN BEFORE THE CIT(A) ARE ALSO PROVIDED BY THE CI T (A) TO THE CONCERNING ASSESSING OFFICER. NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 69 IN THE INSTANT CASE, UNDISPUTEDLY, A NOTICE IN ITNS -51 WAS ISSUED AND SERVED UPON THE CONCERNING ASSESSING OFFICER. A COPY OF THE APPEAL MEMO ALONG WITH THE GROUNDS OF APPEAL WERE ALSO PRO VIDED TO THE CONCERNING ASSESSING OFFICER. IT IS ALSO UNDISPUTED THAT THE ASSESSING OFFICER DID NOT EXPRESS HIS WILLINGNESS TO MAKE HIS PERSONAL APPEARANCE BEFORE THE CIT (A) DURING THE COURSE OF THE APPELLA TE PROCEEDINGS. IN THE SIMILAR CIRCUMSTANCES, THIS HONBLE BENCH, I N THE CASE OF CIT VS. KALANI INDUSTRIES LTD. (2007) 8 ITJ 165 (INDORE TRIB.) AT PAGE NO.249 AND 250, HAS HELD THAT THE ENTITLEMENT OF THE AO TO APPEAR BEFORE CIT (A) COULD BE EXERCISED BY OPTING TO APPEAR AND JOIN THE APPELLATE PROCEEDINGS AND UNLESS SUCH OPTION IS EXERCISED BY THE AO, THER E CANNOT BE ANY CASE OF DENIAL OF NATURAL JUSTICE TO THE REVENUE OR CAUS ING ANY PREJUDICE TO THE REVENUE. AS REGARD THE SO-CALLED DEPARTMENTAL INSTRUCTION FO R CALLING THE REMAND REPORT IN SEARCH APPEAL CASES, IT IS SUBMITT ED THAT FIRST OF ALL ANY INSTRUCTION FROM THE CBDT IS NOT BINDING UPON THE A SSESSEE AND EVEN OTHERWISE ANY SUCH INSTRUCTION IS ONLY DIRECTIVE IN NATURE AND NOT MANDATORY. ALTHOUGH THERE IS NO STATUTORY REQUIREMENT FOR CALL ING ANY REMAND REPORT FROM THE AO, BUT DESPITE SUCH FACT, TO THE B EST OF KNOWLEDGE AND BELIEF OF THE ASSESSEE, THE LEARNED CIT (A) HAD CAL LED FOR NECESSARY DETAILS AND REPORTS FROM THE AO BUT THERE WAS NO CO MPLIANCE AS SUCH BY THE THEN AO. IT IS SUBMITTED THAT IN THE INSTANT CASE, THE LEARN ED CIT (A) HAS FRAMED THE APPELLATE ORDER BY TAKING INTO FULL CONS IDERATION VARIOUS OBSERVATIONS AND FINDINGS OF THE ASSESSING OFFICER, SEIZED MATERIAL, WRITTEN SUBMISSIONS AND VARIOUS DOCUMENTARY EVIDENCES FURNI SHED BY THE NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 70 ASSESSEE. IT IS SUBMITTED THAT THE LEARNED CIT (A) HAS NOT ADMITTED ANY ADDITIONAL EVIDENCE IN VIOLATION OF RULE 46A OF THE INCOME-TAX RULES, 1962. MOREOVER, TO ISSUE A DIRECTION TO THE ASSESSI NG OFFICER FOR CONDUCTING ANY FURTHER INQUIRY OR FOR SUBMITTING ANY FURTHER R EPORT, UNDER THE PROVISIONS OF SUB-SECTION (4) OF S. 250 IS DISCRETIONARY AND N OT MANDATORY. IT IS SUBMITTED THAT ANY ORDER VALIDLY PASSED BY THE FIRS T APPELLATE AUTHORITY AFTER GIVING FULL THOUGHTFUL CONSIDERATION TO THE AOS OR DER AND MATERIALS WHICH WERE ALSO ON RECORD OF THE AO, CANNOT BE LEVELED AS AN ORDER AGAINST THE PRINCIPLES OF NATURAL JUSTICE FOR THE ONLY REASON T HAT THE PROVISIONS OF S. 250 (4) WERE NOT INVOKED BY THE CIT (A). IN VIEW OF THE ABOVE FACTS AND CONSIDERING THE DIRE CT JUDGMENT OF THIS HONBLE BENCH IN THE CASE OF M/S. KALANI INDUSTRIES (SUPRA), THE FIRST GROUND OF APPEAL OF THE REVENUE DESERVES TO BE DISM ISSED IN LIMINE. THE LD. DR CONTENDED THAT IN THE INSTANT CASE, THE ASSESSING OFFICER WAS NOT GIVEN OPPORTUNITY OF HEARING BY CIT(A). WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PA RTIES AND HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT IN THE I NSTANT CASE, THE NOTICE WAS ISSUED TO THE CONCERNED AO. THE AO DID NOT REMAIN PRESENT BEF ORE LD. CIT(A) DURING ASSESSMENT PROCEEDINGS. THE CIT(A)HAS CALLED FOR THE REMAND RE PORT AND AO HAS NOT MADE ANY COMPLIANCE. THE LD. CIT(A) HAS DIRECTED TO MAKE THE FURTHER INQUIRY WHICH LD. CIT(A) HAS NO POWERS BUT LOOKING INTO THE FACTS AND CIRCUMSTAN CES OF THE CASE, WE FEEL IT APPROPRIATE TO DIRECT THE AO TO MAKE FURTHER INQUIR Y AS PER THE DIRECTIONS GIVEN ELSEWHERE IN THIS ORDER WHICH POWERS ARE WELL WITHI N THE JURISDICTION OF THE TRIBUNAL. THEREFORE, IN OUR OPINION, THE DEPARTMENTAL GROUND IS DESERVED TO BE DISMISSED AND HENCE, IT IS DISMISSED. DEPARTMENTAL GROUND NOS.2 TO 2.5 NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 71 THE REVENUE HAS TAKEN THESE GROUNDS OF APPEAL AGAIN ST THE ACTION OF THE LD. CIT(A) IN HOLDING THAT THE ADDITION U/S. 69D WAS NO T JUSTIFIED BECAUSE AO HAS NOT ESTABLISHED THAT THE ASSESSEE HAS BORROWED SUCH LOA NS ON HUNDI AND NO HUNDI, EITHER LIVE OR DISCHARGED, WAS FOUND AND SEIZED FROM ANY B USINESS PREMISES OF THE GROUP AND DELETED THE ADDITIONS OF RS.92,24,410/-, RS.47,00,0 00/- RS.12,50,000/- AND RS.35,25,000/-. THE BRIEF FACTS RELATING TO THE GROUND ARE THAT FRO M THE PERUSAL OF VARIOUS DOCUMENTS SEIZED FROM THE PREMISES OF M/S. PHOENIX DEVCONS PVT. LTD., 434, ORBIT MALL, A.B. ROAD, INDORE, A COMPANY IN WHICH THE ASSESSEE IS ONE OF THE DIRECTORS AND SHAREHOLDER, THE AO OBSERVED THAT THE ASSESSEE HAD BORROWED HUGE MONEY ON HUNDI FROM VARIOUS PERSONS VIZ. SHRI MANISH KEDIA, SHRI S USHIL GOLECHA, SHRI ROHIT SETHI, SHRI NITISH DOSHI, SHRI RAJU DOSHI, K. GOYAL ETC.. ACCOR DING TO THE AO, FROM THE VARIOUS NOTINGS ON VARIOUS LOOSE PAPERS, INVENTORISED AS LP S-A/23 AND A DIARY INVENTORISED AS BS-8, IT GETS ESTABLISHED THAT THE ASSESSEE HAD BOR ROWED HUGE AMOUNT OF MONEY ON HUNDI FROM THESE PERSONS. ACCORDINGLY, THE AO REQUI RED THE ASSESSEE TO EXPLAIN THE NOTINGS FOUND IN VARIOUS SEIZED DOCUMENTS. THE ASSE SSEE SUBMITTED THAT THE VARIOUS NOTINGS REFERRED BY THE AO RELATE TO THE BORROWINGS MADE BY ONE OF HIS MUMBAI BASED INVESTORS FROM MR. SUSHIL GOLECHA, MR. MANISH KEDIA , ETC.. IT WAS FURTHER SUBMITTED BY THE ASSESSEE BEFORE THE AO THAT THE BORROWINGS WERE NOT MADE ON ANY HUNDI BUT SUCH BORROWINGS WERE ONLY MADE ON PROMISSORY NOTES. THE ASSESSEE STRONGLY AGITATED THE APPLICABILITY OF THE PROVISIONS OF S.69D IN HIS CAS E FOR THE VERY REASON THAT THERE WAS NO BORROWING ON ANY HUNDI. HOWEVER, THE AO WAS OF TH E VIEW THAT THE ASSESSEE NEITHER FURNISHED THE SPECIFIC REPLY ON VARIOUS NOTINGS MAD E REGARDING THE HUNDIES ON DIFFERENT SEIZED DOCUMENTS NOR FURNISHED THE DETAILS OF SO CA LLED MUMBAI BASED INVESTORS. ACCORDING TO THE AO, IN THE PRESENT CASE, THE AMOUN TS BORROWED BY THE ASSESSEE WERE ALSO GETTING HIT BY SECTION 68 OF THE I.T. ACT, 196 1 AS THE ASSESSEE FAILED TO OFFER ANY EXPLANATION WITH REGARD TO THE VARIOUS CREDITS APPE ARING IN HIS RECORDS. ACCORDING TO THE AO, THE EXPRESSION BOOKS UNDER S.2(12A) SHOULD BE GIVEN A WIDER MEANING AND, THEREFORE, ANY LOOSE PAPER, CALCULATION SHEETS, COM PUTER PRINT-OUTS, REPORTS, CORRESPONDENCES, DIARIES FOUND IN PHYSICAL FORM OR STORED IN ANY FORM OF ELECTRO- NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 72 MAGNETIC DEVICE OR COMPUTERS SHOULD ALSO BE REGARDE D AS BOOKS. HAVING HELD THE LOOSE PAPERS, DIARIES AND COMPUTER PRINT-OUTS AS B OOKS, THE AO HELD THAT ANY UNEXPLAINED CREDIT ENTRY MADE IN SUCH BOOKS WAS LIA BLE FOR ADDITION UNDER S.68 OF THE ACT. ACCORDINGLY, THE AO MADE THE ADDITION UNDER S. 69D ALTERNATIVELY UNDER S.68 OF THE ACT IN RESPECT OF THE CASH LOANS AMOUNTING TO RS.92 ,24,410/-, RS.47,00,000/- RS.12,50,000/- AND RS.35,25,000/- TAKEN BY THE ASSE SSEE IN HIS INCOME. THE RELEVANT FINDINGS OF THE ASSESSING OFFICER ARE RECORDED AT P ARA 7.1 TO PARA 7.7 FROM PAGE NO.7 TO 9; PARA 12.1 TO PARA 12.6 FROM PAGE NO. 68 TO 76; P ARA 13.1 TO PARA 13.6 FROM PAGE NO. 77 TO 86; PARA 14.1 TO PARA 14.6 FROM PAGE NO. 86 TO 91 OF THE ASSESSMENT ORDER. MATTER CARRIED TO CIT(A) AND THE CIT(A), AFTER CONS IDERING THE SUBMISSION OF THE ASSESSEE, DELETED THE ADDITIONS OF RS.92,24,410/-, RS.47,00,000/- RS.12,50,000/- AND RS.35,25,000/- BY GIVING HIS FINDINGS AT PARA 7.4, 7.5, 8.2, 8.3, 9.4, 9.5, 10.4 & 10.5 OF HIS ORDER, WHICH READS AS UNDER: 7.4 HAVING CONSIDERED THE A.O.S ORDER AS WELL AS THE A PPELLANTS A/R SUBMISSIONS AND ALSO TAKING NOTE OF THE FACT TH AT ON SIMILAR SET OF FACTS AND CIRCUMSTANCES, THE ISSUE INVOLVED IN T HE GROUND OF APPEAL HAS ALREADY BEEN DECIDED BY ME VIDE MY ORDER NO.CIT(A)- 7/IT-920/11-2 DATED 28/03/2013 IN THE APPELLANTS O WN CASE FOR A.Y.-07-08. FOR THE SAKE OF CLARITY OF ISSUE, I CON SIDER IT PROPER AND APPROPRIATE TO EXTRACT THE RELEVANT PORTION OF THE SAID ORDER HEREIN BELOW: 7.12 IN THIS BACKGROUND, HE ARGUED THAT EVEN ON THE BASIS OF TAXABILITY OF THESE TRANSACTIONS NOTED IN THE LOOSE SHEETS I.E. LPS-A/23 AND BS-8 DIARY LACK ITS CREDENCE BEING INCOME, AS THESE TRANSACTIONS ARE MERELY DETAILS OF LOANS WHICH CANNOT BE BY ANY STRE TCH OF IMAGINATION HELD TO BE INCOME OF THE APPELLANT. TO THIS PROPOSITION, THE APPELLANTS A/R DRAWN MY ATTENTION TO THE CASE OF SUNIL RATHI ALIAS JITENDRA RATHI VS. ACIT REPORTED IN 112 TTJ 545. ON THIS DISCUSSION AND SUBMISSION MADE BY THE APPELLANTS A/R EXTRACTED AS ABOVE, IT WAS SUBMITTED AND ARGUED THAT THE A.O.S ACTION OF EVEN MAKING ADDITION U/S 69D OF THE ACT IS UNJUSTIFIED AND INCORRECT. NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 73 7.13 HAVING TAKEN NOTE OF THE A.O.S ORDER AND THE SUBMISSION OF THE APPELLANT EXTRACTED AS ABOVE AND ALSO AFTER TAKING NOTE OF JUDICIAL PRONOUNCEMENTS C ITED BY THE APPELLANTS A/R EXTRACTED AS ABOVE, I AM OF THE CONSIDERED VIEW THAT FOR MAKING ADDITION U/S 69D, I T IS IMPERATIVE THAT THE A.O. MUST ESTABLISH THAT THE APPELLANT HAS BORROWED SUCH LOAN ON HUNDI. MERELY GIVING NOTE OF THE WORD HUNDI AS DETAILED IN PARA -160 TO 165 IN LPS-A/23 AND ALSO IN FEW OCCASIONS IN BS- 8 DIARY WILL NOT ESTABLISH THAT THE APPELLANT HAS BORROWED/ REPAID THE FUNDS OF HUNDI, AS CONTEMPLATE D U/S 69D OF THE IT ACT. EVEN HAVING TAKEN NOTE OF CBDT CIRCULAR NO.208 DATED 15/11/76 & CBDT CIRCULAR NO.221 DATED 06/06/1997 EXPLAINING THE PROVISIONS OF SECTION 69D OF THE ACT, I FIND THAT T HE AVAILABILITY OF EVIDENCE OF BORROWING ON HUNDI IS IMPERATIVE FOR INVOKING PROVISIONS OF SECTION 69D, AND THE SAME SHOULD BE IN VERNACULAR LANGUAGE. IN COMMON COMMERCIAL PARLANCE, IT DENOTES AN INDIGENOUS INSTRUMENT IN VERNACULAR LANGUAGE WHICH CAN BE USED BY THE HOLDER THEREOF TO COLLECT MONEY DUE THEREON WITHOUT USING THE MEDIUM OF CURRENCY. I T MAY ALSO BE REGARDED AS AN INDIGENOUS FORM OF A BIL L OF EXCHANGE EXPRESSED IN VERNACULAR LANGUAGE WHICH HAS BEEN IN USE IN THE MERCANTILE COMMUNITY IN INDI A FOR THE PURPOSE OF COLLECTING DUES. HAVING TAKEN NO TE OF THE CBDT CIRCULAR AND VARIOUS JUDICIAL PRONOUNCEMENTS DESCRIBING THE CHARACTERISTICS OF HUNDIES, I FIND THAT THERE IS NO BORROWING ON HUNDI BY THE APPELLANT. I ALSO FIND SUBSTANCE IN THE APPELLA NTS A/R SUBMISSION THAT NO HUNDI, EITHER ALIVE OR DISCHARGED, WAS FOUND OR SEIZED FROM ANY BUSINESS PREMISES OF THE APPELLANT OR ITS GROUP CONCERN. IN THIS PERSPECTIVE OF THE APPELLANTS CASE AND ALSO AFTER TAKING NOTE OF THE DECISION OF MADRAS HIGH COURT IN THE CASE OF CIT VS. PARANJOTHI SALT CO. (1995) 211 ITR 141 (MAD.) & THE DECISION OF S.K.S. RAJAMANI NADAR VS. CIT (1995) 216 ITR 696 (MAD) AND OTHER JUDICIAL PRONOUNCEMENTS CITED BY THE APPELLANTS A/R SPECIAL LY NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 74 DELHI HIGH COURT DECISION REPORTED IN 170 TAXMAN 5, I AM OF THE CONSIDERED VIEW THAT THE ADDITION MADE BY THE A.O. EVEN ALTERNATIVELY U/S 69D OF THE ACT IS A LSO NOT JUSTIFIED AND CORRECT. ACCORDINGLY IN MY CONSID ERED VIEW, THE A.O.S ACTION IS INCORRECT AND UNJUSTIFIE D ON THIS SCORE ALSO 7.5 IN VIEW OF MY DECISION ABOVE IN A.Y.-07-08 IN THE A PPELLANTS OWN CASE, I CONSIDER IT PROPER AND APPROPRIATE TO H OLD THAT THE A.O. WAS NOT JUSTIFIED IN MAKING THE ADDITION OF RS.90,2 4,410/- TO THE INCOME OF THE APPELLANT ON BOTH THE SCORES I.E. U/S 68 AND U/S 69D OF THE ACT. ACCORDINGLY THE ADDITION SO MADE BY THE A.O. IS DELETED. IN ADDITION TO THIS, I ALSO FIND THAT IN THE YEAR U NDER CONSIDERATION, I ALSO FIND SUBSTANCE IN THE APPELLANTS A/R CONTENTI ON THAT ALL THE SEVEN RECEIPTS, AS NOTED BY THE AO HIMSELF AT PARA- 7.1 OF THE IMPUGNED ORDER, HAVE BEEN MADE DURING THE PERIOD FR OM 20.02.2007 TO 23.03.2007 WHICH UNDISPUTEDLY PERTAIN S TO A.Y. 2007-08 ONLY AND, THEREFORE, IN ANY CIRCUMSTANCES, SUCH RECEIPTS CANNOT BE SUBJECTED TO ADDITION FOR THE ASSESSMENT YEAR UNDER CONSIDERATION I.E. A.Y. 2008-09. THUS, ON THIS COUN T ALONE, THE ADDITION MADE BY THE AO DOES NOT DESERVE TO SURVIVE . THUS, TAKING NOTE OF ALL THE FACTUAL POSITION OF THE CASE, THE A DDITION SO MADE BY THE A.O. IS DELETED. ACCORDINGLY THIS GROUND OF APP EAL IS ALLOWED. 8.2 I HAVE CONSIDERED THE A.O.S ORDER AS WELL AS THE A PPELLANTS SUBMISSION. HAVING CONSIDERED THE FACTUAL POSITION OF THE CASE, I FIND THAT THE SIMILAR GROUND HAS BEEN DECIDED BY ME IN FAVOUR OF THE APPELLANT VIDE MY ORDER NO.CIT(A)-IT-920/11-12 DATE D 28/03/2013 FOR A.Y.-07-08. SINCE THE FACTS OF THE CASE ARE SIM ILAR TO THAT FACTS AS IN A.Y.-07-08, I AM OF THE CONSIDERED VIEW THAT THE A.O. WAS NOT JUSTIFIED IN MAKING THE AFORESAID ADDITION TO THE I NCOME OF THE APPELLANT. 8.3 THUS, FOLLOWING THE RULE OF CONSISTENCY, I CONSIDER IT PROPER AND APPROPRIATE TO HOLD THAT THE A.O. WAS NOT JUSTI FIED AND CORRECT IN HIS ACTION. THUS, THE ADDITION SO MADE BY A.O. IS D ELETED, AS IN THIS GROUND OF APPEAL RAISED BY THE APPELLANT, THE ISSUE IS THE SAME AS ALSO THE SIMILAR FACTS HAVE BEEN NOTED BY A.O., HEN CE THIS GROUND OF APPEAL IS ALLOWED. 9.4 I HAVE CONSIDERED THE A.O.S ORDER AS WELL AS THE A PPELLANTS SUBMISSION. HAVING CONSIDERED THE FACTUAL POSITION OF THE CASE, I NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 75 FIND THAT THE SIMILAR ISSUE I.E. THE BORROWING ON H UNDI HAS BEEN DECIDED BY ME IN FAVOUR OF THE APPELLANT VIDE MY OR DER NO.CIT(A)- IT-920/11-12 DATED 28/03/2013 FOR A.Y.-07-08. SINCE THE FACTS OF THE CASE IN THE APPELLANTS CASE ARE SIMILAR TO THE FACTS AS IN A.Y.- 07-08, I AM OF THE CONSIDERED VIEW THAT THE A.O. WA S NOT JUSTIFIED IN MAKING THE AFORESAID ADDITION TO THE INCOME OF THE APPELLANT. 9.5 THUS, FOLLOWING THE RULE OF CONSISTENCY, I CONSIDE R IT PROPER AND APPROPRIATE TO HOLD THAT THE A.O. WAS NOT JUSTI FIED AND CORRECT IN HIS ACTION. THUS, THE ADDITION SO MADE BY THE A.O. IS DELETED, AS IN THIS GROUND OF APPEAL RAISED BY THE APPELLANT, THE ISSUE IS THE SAME AND ALSO THE SIMILAR FACTS HAVE BEEN NOTED BY A.O., HENCE THIS GROUND OF APPEAL IS ALLOWED. 10.4 I HAVE CONSIDERED THE A.O.S ORDER AS WELL AS THE A PPELLANTS SUBMISSION. HAVING CONSIDERED THE FACTUAL POSITION OF THE CASE, I FIND THAT THE SIMILAR ISSUE I.E. BORROWING ON HUNDI HAS BEEN DECIDED BY ME IN FAVOUR OF THE APPELLANT VIDE MY ORDER NO.C IT(A)-IT- 920/11-12 DATED 28/03/2013 FOR A.Y.-07-08. SINCE TH E FACTS OF THE CASE ARE SIMILAR TO THE FACTS AS IN A.Y.-07-08, I A M OF THE CONSIDERED VIEW THAT THE A.O. WAS NOT JUSTIFIED IN MAKING THE AFORESAID ADDITION TO THE INCOME OF THE APPELLANT. 10.5 THUS, FOLLOWING THE RULE OF CONSISTENCY, I CONSIDE R IT PROPER AND APPROPRIATE TO HOLD THAT THE A.O. WAS NOT JUSTI FIED AND CORRECT IN HIS ACTION. THUS, THE ADDITION SO MADE BY THE A.O. IS DELETED, AS IN THIS GROUND OF APPEAL RAISED BY THE APPELLANT, THE ISSUE IS THE SAME AND ALSO THE SIMILAR FACTS HAVE BEEN NOTED BY A.O., HENCE THIS GROUND OF APPEAL IS ALLOWED. THE LD. AR HAS MADE ORAL SUBMISSION AS WELL AS WRIT TEN SUBMISSION AS UNDER: IT IS SUBMITTED THAT THE ENTIRE ACTION OF THE AO IN MAKING THE ADDITION IN THE ASSESSEES INCOME U/S 69D IS BASED UPON CERTAIN EXCEL SHEETS AND ONE DIARY I.E. BS-8 FOUND AND SEIZED DUR ING THE COURSE OF SEARCH. IN SUCH EXCEL SHEETS, THE DETAILS OF BORROW INGS BY THE ASSESSEE FROM VARIOUS PERSONS WITH THE CAPTION HUNDI DETAIL S HAVE BEEN GIVEN. FURTHER, IN BS-8, THE DETAILS OF IN-FLOW OF FUNDS F ROM SHRI MANISH KEDIA, NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 76 SHRI SUSHIL GOLECHA, SHRI ROHIT SETHI, SHRI NITISH DOSHI/SHRI RAJU DOSHI, SHRI K. GOYAL, ETC. HAVE BEEN STATED. IT IS SUBMITTED THAT DURING THE COURSE OF THE ENTIR E SEARCH PROCEEDINGS, NOT A SINGLE LIVE OR EXPIRED HUNDI WAS EVER FOUND OR SEIZED FROM ANY OF THE PREMISES OF THE ASSESSEE OR HIS ASSOCIATES. IT IS SUBMITTED THAT SUCH ASSERTION HAS NOT BEEN CONTR AVENED EITHER BY THE AO OR BY THE LEARNED DRS. IT IS SUBMITTED THAT MERE CAPTION OF CERTAIN TRANSACTIONS CANNOT CONCLUSIVELY DETERMINE THE ACTUAL CHARACTER OF THE TRANSACTIONS. FROM A PERUSAL OF THE LOOSE PAPER INVENTORIZED AS LPS PAGE NO.160 TO 165 OF LPS-A/23, AS REFERRED TO BY T HE LD. AO IN THE BODY OF THE ASSESSMENT ORDER FOR MAKING THE IMPUGNED ADD ITION, IT MAY BE FOUND THAT SUCH DETAILS ARE NOT GIVEN IN VERNACULAR LANGUAGE BUT THESE ARE IN ENGLISH LANGUAGE. FURTHER THESE DOCUMENTS ARE IN THE FORM OF EXCEL SHEETS IN WHICH THE DETAILS SUCH AS THE NAME OF THE LENDER, START DATE, AMOUNT, DURATION, RENEW DATE, INTEREST, DALALI AND SIGNATORY OF THE DOCUMENTS ETC. HAVE BEEN GIVEN. THE FACT REMAINED THAT THE ASSESSEE THAT HE HAD NOT BORROWED ANY LOAN ON HUNDI BUT THE ENTIRE BORROWINGS WERE MADE B Y HIM, ON BEHALF OF OTHERS, THROUGH THE INSTRUMENT OF PROMISSORY NOTES ONLY. MERELY BECAUSE THERE IS AN ERRONEOUS MENTIONING WITH THE TITLE 'HU NDI DETAILS OF MANISH KEDIA', ON PAGE NO. 163 OF LPS-A/23, WOULD NOT PER SE CHANGE THE VERY NATURE AND CHARACTER OF THE INSTRUMENT OF BORROWING ON 'PROMISSORY NOTE' TO 'HUNDI'. IT IS SUBMITTED THAT THERE IS A CLEAR C UT DISTINCTION BETWEEN THE TERM 'HUNDI' AND 'PROMISSORY NOTE'. THE TERM 'PROMI SSORY NOTE' HAS BEEN DEFINED UNDER SECTION 4 OF THE NEGOTIABLE INSTRUMEN TS ACT, 1881 AS UNDER: A 'PROMISSORY NOTE' IS AN INSTRUMENT IN WRITING (NO T BEING A BANK- NOTE OR A CURRENCY-NOTE) CONTAINING AN UNCONDITIONA L UNDERTAKING, SIGNED NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 77 BY THE MAKER, TO PAY A CERTAIN SUM OF MONEY ONLY TO , OR TO THE ORDER OF, A CERTAIN PERSON, OR TO THE BEARER OF THE INSTRUMENT. ' HOWEVER, THE TERM 'HUNDI' HAS NEITHER BEEN DEFINED UNDER THE NEGOTIABLE INSTRUMENTS ACT, 1881 NOR UNDER THE INCO ME-TAX AT, 1961 BUT, IN THE COMMON PARLANCE, THE TERM 'HUNDI' IS REGARDE D AS A BILL OF EXCHANGE, AS DEFINED UNDER SECTION 5 OF THE NEGOTIA BLE INSTRUMENTS ACT, 1881. THE TERM 'BILL OF EXCHANGE' IS DEFINED UNDER SECTION 5 OF THE NEGOTIABLE INSTRUMENTS ACT, 1881 AS UNDER: '5. A 'BILL OF EXCHANGE' IS AN INSTRUMENT IN WRITI NG CONTAINING AN UNCONDITIONAL ORDER, SIGNED BY THE MAKER, DIRECTING A CERTAIN PERSON TO PAY A CERTAIN SUM OF MONEY ONLY TO, OR TO THE OR DER OF, A CERTAIN PERSON OR TO THE BEARER OF THE INSTRUMENT.' ON A COMPARISON OF THE EXPRESSIONS 'PROMISSORY NOTE ' AND 'BILLS OF EXCHANGE', AS GIVEN UNDER THE NEGOTIABLE INSTRUM ENTS ACT, 1881, ONE CAN FIND THAT WHILE THERE IS A SIMILARITY IN BOTH T HE INSTRUMENTS AS REGARD TO THE PAYMENT OF A CERTAIN SUM OF MONEY BY A PERSON T O SOME OTHER THERE IS A CLEAR DISTINCTION IN BOTH THE INSTRUMENTS AS REGA RD TO THE SIGNATORY OF THE INSTRUMENT AND NUMBER OF PARTIES INVOLVED. IN THE C ASE OF PROMISSORY NOTE, IT IS THE BORROWER ONLY WHO IS REQUIRED TO PU T HIS SIGNATURE ON THE INSTRUMENT AND THE SIGNATURE OF THE LENDER IS NOT R EQUIRED. FURTHER, IN THE CASE OF PROMISSORY NOTE, THE BORROWER PROMISES TO P AY A CERTAIN SUM EITHER TO THE LENDER OR THE BEARER OF THE INSTRUMEN T. HOWEVER, IN THE CASE OF 'BILLS OF EXCHANGE', IT IS THE LENDER WHO ISSUES AN UNCONDITIONAL ORDER IN WRITING UNDER HIS SIGNATURE TO THE BORROWER, DIRECT ING THE BORROWER TO PAY A CERTAIN SUM OF MONEY EITHER TO A THIRD PERSON OR TO ANY OTHER PERSON TO THE ORDER OF THE THIRD PERSON OR TO THE BEARER OF THE I NSTRUMENT. THUS, IT IS APPARENT THAT THE PROMISSORY NOTE IS ALWAYS A BILAT ERAL TRANSACTION WHEREAS A HUNDI IS ALWAYS A TRIPARTITE TRANSACTION. NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 78 IT IS FURTHER SUBMITTED THAT THE CBDT VIDE ITS CIRC ULAR NO.208, DATED 15 NOVEMBER, 1976 POINTS OUT THAT 'HUNDI' HAS NOT B EEN DEFINED UNDER THE INCOME-TAX ACT, 1961 AND THAT IN COMMON PARLANCE, A NY INDIGENOUS INSTRUMENT IN VERNACULAR WHICH CAN BE USED BY THE H OLDER TO COLLECT MONEY DUE THEREON WITHOUT USING THE MEDIUM OF CURRENCY IS A HUNDI. IT MAY ALSO BE REGARDED AS AN INDIGENOUS FORM OF A BILL OF EXCH ANGE EXPRESSED IN VERNACULAR LANGUAGE WHICH HAS BEEN IN USE IN THE ME RCANTILE COMMUNITY IN INDIA FOR THE PURPOSE OF COLLECTING DUES. IN THE SAME CIRCULAR, THE CBDT HAS ALSO GIVEN SOME CHARACTERISTICS OF THE HUNDIS. AS PER THESE CHARACTERISTICS, IN ANY HUNDI TRANSACTION, THERE IS ALWAYS THREE PARTIES VIZ. A DRAWER, A DRAWEE AND A PAYEE. THE CBDT IN ITS SUB SEQUENT CIRCULAR NO.221 DATED 6 TH JUNE, 1977, HAS REITERATED THAT A HUNDI IN COMMON PARLANCE DENOTES AN INDIGENOUS FORM OF BILL OF EXCH ANGE, BY AND LARGE IN VERNACULAR LANGUAGE, WHICH IS BEING USED BY THE MER CANTILE COMMUNITY IN INDIA. FROM BOTH THE CIRCULARS, IT BECOMES APPARENT AND EVIDENT THAT THE MOST IMPORTANT INGREDIENT OF ANY INSTRUMENT FOR IT TO BE REGARDED AS A 'HUNDI' IS THAT IT SHOULD BE WRITTEN IN VERNACULAR LANGUAGE ONLY. IN THE INSTANT CASE, NEITHER THE PROVISIONS OF S. 6 9D NOR THE PROVISIONS OF S.68 ARE APPLICABLE IN RESPECT OF THE NOTINGS FOUND MADE IN BS-8 DIARY AND OTHER LOOSE PAPERS. CONSEQUENTLY, NO ADDITION COULD HAVE BEEN MADE BY THE AO BY INVOKING PROVISIONS OF S. 69 D / 68. ACCORDINGLY, THE ACTION OF THE CIT(A) ON THIS COUNT DESERVES TO BE UPHELD. LD. DR RELIED ON THE ORDER OF THE AO. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PA RTIES AND HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT IN THE I NSTANT CASE, THE AO HAS MADE ADDITION ON THE BASIS OF ONE DIARY BS-8, CERTAIN EXCEL SHEET S IN WHICH DETAILS OF BORROWINGS BY ASSESSEE FROM VARIOUS PERSONS WITH HUNDI DETAILS HA VE BEEN GIVEN. DURING THE COURSE NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 79 OF ENTIRE SEARCH PROCEEDINGS, NOT A SINGLE HUNDI WA S FOUND, THEREFORE, IN OUR OPINION, THE ISSUE IN CONTROVERSY IS COVERED BY THE DECISION OF HONBLE HIGH COURT OF MADRAS IN THE CASE OF CIT VS. PARANJOTHI SALT CO. (1995) 211 ITR 141 (MAD .) WHEREIN IT WAS HELD THAT FOR THE PURPOSE OF INVOKING THE PROVISION S OF S. 69D THERE MUST BE AN EXISTENCE OF HUNDI AND UNLESS AND UNTIL ONE DOCUMEN T FULFILLS THE CHARACTERISTICS OF A HUNDI, NO ADDITION U/S 69D CAN BE MADE IN THE ASSESSEES INCOME . THE HONBLE HIGH COURT OF ANDHRA PRADESH IN THE CASE OF CIT VS. DEXAN PHARMACEUTICALS (P) LTD. (1995) 214 ITR 576 (AP) HAS HELD THAT THERE ARE ALWAYS THREE PARTIES TO HUN DI TRANSACTIONS AND IF A TRANSACTION IS BILATERAL IT I S A VERY STRONG INDICATION TO SHOW THAT IT IS NOT A HUNDI TRANSACTION. THE COORDINATE MUMBAI F BENCH IN THE CASE OF ACIT VS. OM PRAKASH & CO. (2004) 87 TTJ 183 (MUM.), AT PARA 60 HAS HELD THAT THE EXISTENCE OF HUNDI IS A MUST FOR INVOKING THE PROVISIONS OF S. 6 9D OF THE ACT. FURTHER, THIS HONBLE BENCH IN THE CASE OF GHANSHYAM CLOTH SYNDICATE VS. ITO (1984) 19 TTJ (IN D.)569 HAS HELD THAT ONCE THERE IS A FINDING THAT THERE WAS NO EXECUTION OF ANY HUNDI THE PROVISIONS OF S. 69D CANNOT BE INVOKED. IN THE PRESENT CASE, NO HUNDI WAS FOUND FROM ANY OF THE PREMISES OF THE ASSESSEE . FURTHER, FROM A PERUSAL OF THE EXCEL SHEETS, ON T HE BASIS OF WHICH ADDITIONS HAVE BEEN MADE, IT MAY BE OBSERVED THAT THERE IS MENTION OF ONLY TWO PERSONS I.E. THE NAME OF THE LENDER AND TH E NAME OF THE ASSESSEE AS THE SIGNATORY OF THE DOCUMENT. IN SUCH CIRCUMSTANCES, R ELYING UPON THE JUDICIAL PRONOUNCEMENTS, IT CAN BE SAFELY CONCLUDED THAT THE AMOUNT WAS BORROWED BY THE ASSESSEE ON PROMISSORY NOTE AND NOT ON HUNDI. ONCE IT IS HELD THAT THE BORROWING WAS NOT MADE ON HUNDI, THE PROVISIONS OF S.69D CANN OT BE MADE APPLICABLE TO SUCH BORROWINGS . ACCORDINGLY, THERE IS NO INFIRMITY IN THE CIT(A) S ORDER IN HOLDING THAT THE BORROWINGS MADE BY THE ASSESSEE FROM VARIOUS PE RSONS WERE NOT COVERED BY S. 69D OF THE ACT. THE BS-8 DIARY OR EXCEL SHEETS, IN WHICH THE TRANSACTIO NS OF THE BORROWINGS WERE NOTED DOWN, CANNOT BE REGARDED AS B OOKS OF ACCOUNT AS CONTEMPLATED UNDER THE PROVISIONS OF S. 2(12A) OF T HE I.T. ACT. IN ABSENCE OF ANY BOOKS OF ACCOUNT THE PROVISIONS OF S. 68 CANNOT BE INVOKED AS FINDING OF CREDIT ENTRIES IN THE BOOKS OF ACCOUNT OF AN ASSESSEE IS A SINE-QUA-NON FOR INVOKING THE PROVISIONS OF S. 68 OF THE ACT . FOR SUCH PROPOSITION, WE PLACE RELIANCE UPON THE DECISION OF THE HONBLE MADRAS HIGH COURT IN THE CA SE OF CIT VS. TAJ BOREWELLS (2007) NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 80 291 ITR 232 (MAD.) . IN THE SIMILAR CIRCUMSTANCES THE COORDINATE MUMBA I BENCH IN THE CASE OF ACIT VS. OM PRAKASH & CO., (2004) 87 TTJ 183 (MUM.) HAS HELD THAT A DIARY IS NOT A BOOKS OF ACCOUNT AND, THEREFORE, ON THE BASIS OF JOTTINGS MADE IN A DIARY, THE PROVISIONS OF S. 68 CANNOT BE INVOKED. THE RELEVANT ABSTRACT OF THE MUMBAI BENCHS DECISION IS GIVEN AS UNDER:- 63. NOW, THE NEXT ISSUE IS WHETHER THE MEHUL NOTE BOOK CAN BE CONSIDERED AS A BOOK OF ACCOUNT MAINTAINED BY THE A SSESSEE. IN THE CASE OF CENTRAL BUREAU OF INVESTIGATION VS. V.C. SHUKLA & ORS. (1998) 3 SCC 410, THE APEX COURT HAS LAID DOWN THAT 'BOOK' ORDIN ARILY MEANS A COLLECTION OF SHEETS OF PAPER OR OTHER MATERIAL BLANK, WRITTEN OR PRINTED, FASTENED OR BOUND TOGETHER SO AS TO FORM A MATERIAL WHOLE. LOOS E SHEETS OR SCRAPS OF PAPER CANNOT BE TERMED AS 'BOOK' FOR THEY CAN BE EA SILY DETACHED AND REPLACED. IN THE PRESENT CASE, THE MEHUL NOTE BOOK AS WE HAVE CONCLUDED ABOVE HAS NOT BEEN MAINTAINED BY THE ASSESSEE FOR K EEPING THE ACCOUNTS OF ITS BUSINESS. AS STATED ABOVE, THIS BOOK PERTAIN S TO MR. PARAS RAM ROHIRA, THEREFORE, THE SAME HAS BEEN WRITTEN BY HIM FOR KEEPING HIS ACCOUNTS. IN THIS NOTE BOOK ONLY TWO PAGES ARE WRIT TEN, WHICH CAN ALSO BE EASILY REMOVED. THIS IS A ROUGH NOTE BOOK, THE PAGE S OF, WHICH CAN ALSO BE EASILY REMOVED. THEREFORE, IT CANNOT BE CONSIDER ED AS A BOOK AS THE SHEETS OF THIS NOTE BOOK CAN BE EASILY DETACHED AND REPLACED. EVEN IF IT IS CONSIDERED AS A BOOK OF ACCOUNT NO ADDITION CAN BE MADE ON THE BASIS OF THE AMOUNTS MENTIONED IN THIS NOTE BOOK AS WE HAVE DISCUSSED ABOVE IN DETAIL. THUS, THE PROVISIONS OF S. 68 OF THE ACT AR E NOT APPLICABLE TO THIS CASE. FURTHER, THE ITAT, MUMBAI BENCH IN THE CASE OF BIREN V. SAVLA VS. ACIT (2006) 100 TTJ 1006 (MUM.) HAS HELD THAT THE MEMORANDUM OF TRANSACTIONS BETWE EN LENDERS AND BORROWERS ENTERED IN A DIARY CANNOT BE REGARDED AS CASH BOOK OR LEDGER AND, THEREFORE, ON THE BASIS OF SUCH NOTINGS THE PROVISI ONS OF S. 68 CANNOT BE INVOKED. NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 81 IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, AND VARIOUS JUDICIAL PRONOUNCEMENTS, THE PROVISIONS OF S. 68 CANNOT BE I NVOKED. EVEN OTHERWISE, THE AO HIMSELF AT VARIOUS PLACES IN THE BODY OF THE ASSESS MENT ORDER HAS FIRMLY STATED THAT THE ASSESSEE HAD BORROWED FUNDS FROM VARIOUS PERSONS AN D, THEREFORE, HAVING GIVEN SUCH FINDING OF GENUINENESS OF THE BORROWING THERE DOES NOT REMAIN ANY SCOPE FOR THE AO TO MAKE ANY ADDITION IN THE ASSESSEES HANDS BY REGARD ING THE SAME AS HIS UNDISCLOSED INCOME. FOR SUCH PROPOSITION, WE RELY ON THE DECISI ON OF HONBLE ITAT JODHPUR BENCH IN THE CASE OF SUNIL RATHI ALIAS JITENDRA RATHI VS. ACIT (2007) 11 2 TTJ (JD.) 545 HOLDING THAT RECEIPT OF A LOAN CANNOT BE REGARDED AS AN INC OME OF AN ASSESSEE. IN VIEW OF ABOVE DISCUSSION, WE DISMISS THIS ISSUE OF THE DEPA RTMENTAL APPEAL. DEPARTMENTAL GROUND NO.7 THIS GROUND OF APPEAL IS GENERAL IN NATURE AND, THE REFORE, NO SEPARATE SUBMISSION IN RESPECT OF THIS GROUND HAS BEEN CONSI DERED NECESSARY. IN THE RESULT, THE DEPARTMENTAL APPEAL IS DISMISSED . ASSESSEES APPEAL NO. : 182/IND/2013 A.Y. 2007-08 GROUNDS OF APPEAL READ AS UNDER: 1(A). THAT, THE LEARNED CIT(A) GROSSLY ERRED, BOTH ON FACTS AND IN LAW, IN CONFIRMING ADDITION OF RS.15,26,500/-, MADE BY THE LEARNED AO, IN THE APPELLANTS INCOME ON ACCOUNT OF ALLEGED UNEXPLAINED CASH DEPOSIT IN THE CITIBANK ACCOUNT NO. 5896702547 MADE BY THE APPELLANT ON EXTRANEOUS CONS IDERATIONS WITHOUT ACCEPTING THE EXPLANATION OF THE APPELLANT THAT HE WAS HAVING SUFFICIENT CASH BALANCE, FROM EXPLAINED SOURCES, BEFORE MAKING SUBJ ECT CASH DEPOSITS IN HIS BANK ACCOUNT. (B) THAT, WITHOUT PREJUDICE TO THE ABOVE, AS AN A LTERNATIVE GROUND, THE LEARNED CIT(A) GROSSLY ERRED IN CONFIRMING THE ADDITION OF RS.15,2 6,500/- IN THE APPELLANT'S INCOME, ON ACCOUNT OF ALLEGED UNEXPLAINED BANK DEPO SITS, WITHOUT GIVING ANY SET- OFF TO THE APPELLANT IN RESPECT OF AVAILABILITY OF FUNDS IN HIS HANDS, AS A CUSTODIAN NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 82 OF MONEY, WHICH WERE BORROWED BY OTHERS ON PROMISSO RY NOTES AND REMAINED WITH THE APPELLANT. DEPARTMENTALS APPEAL NO. : 249/IND/2013 A.Y. 2007- 08 GROUNDS OF APPEAL READ AS UNDER: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE L D. CIT(A) ERRED IN DECIDING THE APPEAL AGAINST THE PRINCIPLES OF NATURAL JUSTICE, W ITHOUT AFFORDING ANY OPPORTUNITY TO THE AO OR REMANDING IT BACK IN VIOLATION OF THE DEPARTM ENTAL INSTRUCTION THAT IN SEARCH ASSESSMENTS APPEAL ORDER BE PASSED EITHER BASED ON REMAND REPORT OR AFTER HEARING THE AO. 2. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN HOLDING THAT ADDITION U/S. 69D WAS NOT JUSTIFIED BECAUSE AO HAS NOT ESTABLISHED THAT THE APPELLANT HAS BORROWED SUCH LOANS ON HUNDI AND NO H UNDI, EITHER LIVE OR DISCHARGED, WAS FOUND AND SEIZED FROM THE BUSINESS PREMISES OF THE GROUP AND DELETED THE ADDITION OF RS.5,00,000/- WHEREAS, DOCUMENTS SEIZED CLEARLY MENTIONED OF THE HUNDI DEALINGS AND THE ASSESSEE FAILED TO PROVE BEFORE THE AO OTHE RWISE WITH EVIDENCES. 2.1 WHILE HOLDING SO THE LD. CIT(A) FAILED TO APPRE CIATE THAT THE TRANSACTIONS IN HUNDIES WERE CONFIRMED IN THE STATEMENTS OF NOT ONL Y SHRI NILESH AJMERA, THE ASSESSEE, BUT HIS EMPLOYEE SHRI PANKAJ JOSHI ALSO AND SHRI NI LESH AJMERA ADMITTED AND EVEN DISCLOSED INCOME OF RS.1.45 CRORE AS BEING RECEIVED FROM ONE SHRI MANISH KEDIA, HUNDI PROVIDER, AS HIS UNDISCLOSED INCOME IN A.Y. 2010-11 . 2.2 WHILE HOLDING SO THE LD. CIT(A) FAILED TO CONSI DER THAT VARIOUS LOOSE PAPERS FOUND DURING THE COURSE OF SEARCH HAD DETAILS OF HUNDI TR ANSACTIONS OF MANISH KEDIA AND IT HAD NARRATION OF ENTRIES LIKE NAME, START DATE, AMOUNT, DURATION, FIRST RENEW DATE, END DATE, INTEREST, DALALI ETC. WHICH ESTABLISHED THE BORROWI NG AND REPAYMENT ON HUNDIES BEING MADE IN CASH AS POINTED OUT BY THE AO IN THE ASSESS MENT ORDER. 2.3 WHILE HOLDING SO THE LD. CIT(A) FURTHER ERRED I N HOLDING THAT THE SEIZED DAIRIES CANNOT BE TREATED AS BOOKS OF ACCOUNTS WHEREAS IN V IEW OF THE TRANSACTIONS RECORDED THEREIN BEING UNEXPLAINED THE SAID MATERIAL/DIARIES FELL IN THE INCLUSIVE DEFINITION OF BOOKS OF ACCOUNTS AS DEFINED U/S. 2(12A) OF THE I.T . ACT. 3. IT IS THEREFORE, PRAYED THAT THE ORDER OF THE CI T(A) MAY BE SET ASIDE AND THE ORDER OF THE AO MAY PLEASE BE RESTORED. ASSESSEES GROUND NO. 1(A) & 1(B) NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 83 THE ASSESSING OFFICER HAS MADE AN ADDITION OF RS.15 ,26,500/- IN THE HANDS OF THE ASSESSEE ON ACCOUNT OF ALLEGED UNEXPLAINED CASH DEPOSITS IN THE CITIBANK ACCOUNT NO. 5896702547 MADE BY THE APPELLANT. THE RELEVANT FINDINGS OF THE ASSESSING OFFICER ARE RECORDED AT PARA 5.1 TO PARA 5.4 FROM PAGE NO.4 TO 5 OF THE ASSESSMENT ORDER. AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE, T HE LD. CIT(A) CONFIRMED THE ADDITION OF RS.15,26,500/-. THE LD.AR HAS MADE ORAL SUBMISSION AS WELL AS WRITT EN SUBMISSION AS UNDER: IN THE ASSESSMENT ORDER, THE AO HIMSELF HAS GIVEN A FINDING THAT THE ASSESSEE HAD MADE BORROWINGS ON BEHALF OF VARIOUS P ERSONS AS PER THE NOTINGS MADE IN BS-8 AND, THEREFORE, THESE BORROWIN GS WERE VERY WELL AVAILABLE TO THE ASSESSEE FOR MAKING CASH DEPOSITS IN HIS BANK ACCOUNT. HOWEVER, DESPITE SUCH FACT, THE LEARNED CIT(A) HAD NOT GIVEN ANY RELIEF TO THE ASSESSEE. IT IS, THEREFORE, EARNESTLY PRAYED TH AT IN THE INSTANT CASE, IN ORDER TO MEET THE ENDS OF JUSTICE, THE ISSUE MAY KI NDLY BE RESTORED BACK TO THE FILE OF AO WITH A SPECIFIC DIRECTION TO VERIFY THE CLAIM OF THE ASSESSEE BY MAKING A REFERENCE OF THE BS-8 DIARY AND OTHER D OCUMENTS SEIZED DURING THE COURSE OF SEARCH AND TO THE EXTENT OF DI RECT NEXUS OF FUNDS RECEIVED BY THE ASSESSEE FROM OTHERS WITH THE CASH DEPOSITS IN BANK ACCOUNT BE GRANTED TO THE ASSESSEE. LD. DR RELIED ON THE ORDER OF THE AO. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PA RTIES AND HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, WE NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 84 FIND THAT THE ASSESSEE HAS RECEIVED CASH FROM VARIO US INVESTORS WHO WERE WILLING TO MAKE INVESTMENT IN THE CERTAIN PROPERTY AROUND THE INDORE THROUGH ASSESSEE. WE FIND THAT THE ASSESSEE HAS ALSO RECEIVED RS.5 LACS FROM SHRI MANISH KEDIYA. THE ASSESSEE HAS NOT GIVEN ANY EVIDENCE BEFORE THE AO AND LD. CI T(A) FOR ESTABLISHING THE NEXUS OF CASH DEPOSITS OF RS.5,00,000/- WITH CITY BANK OUT O F FUNDS RECEIVED FROM SHRI MANISH KEDIYA. THE ASSESSEE IS DIRECTED TO GIVE THE EVIDEN CE BEFORE THE AO AND AO IS DIRECTED TO VERIFY THE CLAIM OF RS.5,00,000/- WITH REFERENCE TO BS-8 DIARY AND DOCUMENTS SEIZED DURING COURSE OF SEARCH. REST OF THE ADDITION (RS.1 5,26,500 RS.5,00,000) I.E. RS.10,26,500/- IS CONFIRMED. ACCORDINGLY, GROUND IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. DEPARTMENTAL GROUND NO. 1 THE REVENUE HAS TAKEN THIS GROUND OF APPEAL AGAINST THE ACTION OF THE LD. CIT(A) IN DECIDING THE APPEAL AGAINST THE PRINCIPLES OF NA TURAL JUSTICE, WITHOUT AFFORDING ANY OPPORTUNITY TO THE AO OR REMANDING IT BACK IN VIOLA TION OF THE DEPARTMENTAL INSTRUCTION THAT IN SEARCH ASSESSMENTS APPEAL ORDER BE PASSED E ITHER BASED ON REMAND REPORT OR AFTER HEARING THE AO. IT WAS SUBMITTED BEFORE US BY BOTH SIDES THAT THIS GROUND OF APPEAL IS SIMILAR TO THAT OF GROUND NO. 1 TAKEN BY THE DEPARTMENT IN ITS APPEAL FOR A.Y. 2008-09 [IT(SS)A NO.250/IND/2013], THEREFORE, OUR FINDING GIVEN IN T HE ABOVE APPEAL WILL ALSO BE APPLICABLE IN THE PRESENT CASE. BY FOLLOWING THE SA ME, DEPARTMENTAL APPEAL ON THIS ISSUE IS DISMISSED. DEPARTMENTAL GROUND NO.2 NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 85 THIS GROUND OF APPEAL IS GENERAL IN NATURE AND, THE REFORE, NO SEPARATE ADJUDICATION IS REQUIRED. DEPARTMENTAL GROUND NOS.2 TO 2.3 THE REVENUE HAS TAKEN THIS GROUND OF APPEAL AGAINST THE ACTION OF THE LD. CIT(A) IN HOLDING THAT THE ADDITION U/S. 69D WAS NOT JUSTI FIED BECAUSE AO HAS NOT ESTABLISHED THAT THE APPELLANT HAS BORROWED SUCH LOANS ON HUNDI AND NO HUNDI, EITHER LIVE OR DISCHARGED, WAS FOUND AND SEIZED FROM ANY BUSINESS PREMISES OF THE GROUP AND DELETED THE ADDITION OF RS.5,00,000/- WHEREAS, DOCUMENTS SE IZED CLEARLY MENTIONED OF THE HUNDI DEALINGS AND THE ASSESSEE FAILED TO PROVE BEF ORE THE AO OTHERWISE WITH EVIDENCES. IT WAS SUBMITTED BEFORE US BY BOTH SIDES THAT THAT THIS GROUND OF APPEAL IS SIMILAR TO THAT OF GROUND NOS. 2 TO 2.5 TAKEN BY THE DEPAR TMENT IN ITS APPEAL FOR A.Y. 2008-09 (APPEAL NO. IT(SS)A 250/IND/2013), THEREFORE, OUR F INDING FOR SUCH ASSESSMENT YEAR WILL ALSO BE APPLICABLE IN THE PRESENT APPEAL. THUS, BY FOLLOWING THE SAME, THE DEPARTMENTAL APPEAL IS DISMISSED ON THIS ISSUE. ASSESSEES APPEAL NO. : 184/IND/2013 A.Y. 2009-10 GROUNDS OF APPEAL READ AS UNDER: 1(A). THAT, THE LEARNED CIT(A) GROSSLY ERRED, BOTH ON FACTS AND IN LAW, IN CONFIRMING ADDITION OF RS.10,63,37,500/-, MADE BY THE LEARNED AO, IN THE APPELLANTS INCOME, BY INVOKING PROVISIONS OF SECTION 69C OF TH E INCOME-TAX ACT, 1961, ON ACCOUNT OF ALLEGED UNEXPLAINED EXPENDITURE IN THE L AND FOR 'PHOENIX GREEN PROJECT', A PROJECT UNDERTAKEN BY 'M/S. PHOENIX LEI SURE AND LIFESTYLE PVT. LTD.', MERELY ON GUESSWORK, SURMISES AND CONJECTURES, WITH OUT PROPERLY APPRECIATING AND ACCEPTING THE EXPLANATION OF THE APPELLANT. NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 86 (B) THAT, WITHOUT PREJUDICE TO THE ABOVE, AS AN A LTERNATIVE GROUND, THE LEARNED ASSESSING OFFICER GROSSLY ERRED IN MAKING THE IMPUG NED ADDITION OF RS.10,63,37,500/- IN THE APPELLANT'S INCOME, WITHOU T GIVING ANY SET-OFF TO THE APPELLANT IN RESPECT OF AVAILABILITY OF FUNDS IN HI S HANDS, AS A CUSTODIAN OF MONEY, WHICH WERE EITHER BORROWED BY OTHERS ON PROMISSORY NOTES AND REMAINED WITH THE APPELLANT OR WHICH WERE PROVIDED BY THE INVESTO RS ASSOCIATED WITH THE APPELLANT OR WHICH WERE RETAINED BY THE APPELLANT O UT OF THE PLOT BOOKING ADVANCES RECEIVED BY HIM ON BEHALF OF THE COMPANIES IN WHICH HE WAS ONE OF THE DIRECTORS. 2(A). THAT, THE LEARNED CIT(A), WHILE ADJUDICATING THE GROUNDS RELATING TO THE ALLEGED UNEXPLAINED CASH DEPOSITS IN THE BANK ACCOUNT OF TH E APPELLANT, GROSSLY ERRED, BOTH ON FACTS AND IN LAW, IN ISSUING THE DIRECTION TO THE AO TO VERIFY THAT WHETHER OR NOT THE SUBJECT BANK ACCOUNT WAS DISCLOSED BY TH E APPELLANT PRIOR TO SEARCH THROUGH FILING RETURN OF INCOME WITHOUT APPRECIATIN G THE MATERIAL FACT THAT THERE WAS NO MECHANISM PREVALENT THROUGH WHICH AN ASSESSE E COULD HAVE DISCLOSED HIS BANK ACCOUNT THROUGH THE RETURN OF INCOME. (B) THAT, WITHOUT PREJUDICE TO THE ABOVE, THE LEA RNED CIT(A), WHILE ADJUDICATING THE GROUNDS RELATING TO THE ALLEGED UNEXPLAINED CASH DE POSITS IN THE BANK ACCOUNT OF THE APPELLANT, GROSSLY ERRED IN NOT CONSIDERING THE MATERIAL FACT THAT THE APPELLANT WAS ELIGIBLE FOR EXPLAINING THE SOURCES OF CASH DEP OSITS MADE IN THE BANK ACCOUNT OUT OF THE CASH WITHDRAWALS MADE IN THE SAM E YEAR FROM THE SAME BANK ACCOUNT IRRESPECTIVE OF THE FACT THAT WHETHER OR NO T SUCH BANK ACCOUNT WAS DISCLOSED PRIOR TO THE DATE OF SEARCH. C). THAT, WITHOUT PREJUDICE TO THE ABOVE, THE LEA RNED CIT(A) GROSSLY ERRED IN NOT DELETING THE ADDITION AMOUNTING TO RS.86,30,000/- O N ACCOUNT OF CASH DEPOSITS MADE BY THE APPELLANT WITH HIS BANK ACCOUNT WITH TH E BANK OF RAJASTHAN LTD.. DEPARTMENTALS APPEAL NO. : 251/IND/2013 A.Y. 2009- 10 GROUNDS OF APPEAL READ AS UNDER: 1. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE T HE LD. CIT(A) ERRED IN DECIDING THE APPEAL AGAINST THE PRINCIPLES OF NATURAL JUSTIC E, WITHOUT AFFORDING ANY OPPORTUNITY TO THE AO OR REMANDING IT BACK IN VIOLATION OF THE DEP ARTMENTAL INSTRUCTION THAT IN SEARCH ASSESSMENTS APPEAL ORDER BE PASSED EITHER BASED ON REMAND REPORT OR AFTER HEARING THE AO. 2. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE T HE LD. CIT(A) ERRED IN HOLDING THAT ADDITION U/S. 69D WAS NOT JUSTIFIED BECAUSE AO HAS NOT ESTABLISHED THAT THE NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 87 APPELLANT HAS BORROWED SUCH LOANS ON HUNDI AND NO H UNDI, EITHER LIVE OR DISCHARGED, WAS FOUND AND SEIZED FROM ANY BUSINESS PREMISES OF THE GROUP AND DELETED THE ADDITION OF RS. 8,46,79,050/- RS. 48,00,000/- AND RS. 2,50,0 0,000/- WHEREAS, DOCUMENTS SEIZED CLEARLY MENTIONED OF THE HUNDI DEALINGS AND THE ASS ESSEE FAILED TO PROVE BEFORE THE AO OTHERWISE WITH EVIDENCES. 2.1 WHILE HOLDING SO THE LD. CIT(A) FAILED TO APPRE CIATE THAT THE TRANSACTIONS IN HUNDIES WERE CONFIRMED IN THE STATEMENTS OF NOT ONL Y SH. NILESH AJMERA, THE ASSESSEE, BUT HIS EMPLOYEE SH. PANKAJ JOSHI ALSO AND SH. NILE SH AJMERA ADMITTED AND EVEN DISCLOSED INCOME OF RS.1.45 CRORE AS BEING RECEIVED FROM ONE SH. MANISH KEDIA, HUNDI PROVIDER, AS HIS UNDISCLOSED INCOME IN A.Y. 2010-11 . 2.2 WHILE HOLDING SO THE LD. CIT(A) FAILED TO CONSI DER THAT VARIOUS LOOSE PAPERS FOUND DURING THE COURSE OF SEARCH HAD DETAILS OF HUNDI TR ANSACTIONS OF PUKHRAJ SONI, SUSHIL GOLECHA, NEETISH DOSHI, SANDEEP BHAI, RAJU DOSHI IT HAD NARRATION OF ENTRIES LIKE NAME, START DATE, AMOUNT, DURATION, FIRST RENEW DATE, END DATE, INTEREST, DALALI ETC. WHICH ESTABLISHED THE BORROWING AND REPAYMENT ON HUNDIES BEING MADE IN CASH AS POINTED OUT BY THE AO IN THE ASSESSMENT ORDER. 2.3 WHILE HOLDING SO THE LD. CIT(A) FURTHER ERRED I N HOLDING THAT THE SEIZED DAIRIES CANNOT BE TREATED AS BOOKS OF ACCOUNTS WHEREAS IN V IEW OF THE TRANSACTIONS RECORDED THEREIN BEING UNEXPLAINED THE SAID MATERIAL/DAIRIES FELL IN THE INCLUSIVE DEFINITION OF BOOKS OF ACCOUNTS AS DEFINED U/S. 2(12A) OF THE I.T . ACT. 3. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE T HE LD. CIT(A) HAS ERRED IN DIRECTING THE AO TO VERIFY THE SOURCE OF CASH DEPOS ITS OF RS. 86,30,000/- ADDED BY THE AO AS UNEXPLAINED CASH CREDITS U/S 68 OF THE I.T. A CT IN THE BANK ACCOUNTS OF THE ASSESSEE. 3.1 WHILE DIRECTING THE VERIFICATION OF THE CASH DE POSITS TO BE CARRIED OUT BY THE AO THE LD. CIT(A) TRAVELLED BEYOND HIS POWER OF CONFIR MING, REDUCING, ENHANCING OR ANNULLING THE ADDITION. 3.2 WHILE HOLDING SO THE LD. CIT(A) GROSSLY ERRED I N ACCEPTING THE ADDITIONAL ARGUMENTS TAKEN BY THE ASSESSEE BEFORE HIM BY GIVIN G A DIRECTION TO VERIFY THE SAID DEPOSITS OUT OF THE WITHDRAWALS MADE FROM THE DIFFE RENT BANK ACCOUNTS MAINTAINED BY THE ASSESSEE AS SAID WAS NOT THE PLEA OF THE ASSESS EE BEFORE THE AO. 3.3 WHILE HOLDING SO THE LD. CIT(A) WRONGLY DIRECTE D TO THE AO TO CONSIDER THE AMOUNTING OF RS. 92,20,000/- WITHDRAWN FROM BANK OF RAJASTHAN LTD. AS SOURCE OF CASH DEPOSIT IN THE SAME BANK ACCOUNT OF THE APPLICANT I F THE APPLICANT COULD ADDUCE THE SOURCE OF THE DEPOSITS IN THE BANK ACCOUNT WITHOUT FOLLOWING THE PROCEDURE IN APPEAL OF REMANDING IT BACK TO THE AO. NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 88 4. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 5,60,50,000/- MADE BY THE AO UNDER THE HEAD DUBAI HAWALA OBSERVING THAT THE AO COULD NOT ADDUCE ANY E VIDENCE OTHER THAN THE PAPERS SEIZED WHEREAS THE ASSESSEE HIMSELF CONTENDED THAT HE WAS A NON-RESIDENT HAVING BUSINESS CONNECTIONS IN FOREIGN COUNTRIES. THE NAME S OF THE COMPANIES THROUGH WHICH INVESTMENT HAS BEEN MADE ALSO SUGGESTS THAT THE ASS ESSEE HAS SUBSTANTIAL INTEREST IN THOSE COMPANIES. 4.1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 5,60,50,000/- MADE BY THE AO UN DER THE HEAD DUBAI HAWALA OBSERVING THAT THE AO COULD NOT ADDUCE ANY EVIDENCE OTHER THAN THE PAPERS SEIZED WHICH THE ASSESSEE CLAIMED TO BE DUMP DOCUMENTS WHE REAS THE ASSESSEE COULD NOT EXPLAIN AS TO WHY AND HOW SUCH DUMP DOCUMENTS WER E PREPARED AND KEPT. 5. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 2,09,66,099/- MADE BY THE AO ON ACCOUNT OF REAL ESTATE TRADING IN DUBAI OBSERVING THAT THE AO COULD NOT AD DUCE ANY EVIDENCE OTHER THAN THE PAPERS SEIZED BECAUSE THE ASSESSEE HIMSELF CONTENDE D THAT HE WAS A NON-RESIDENT HAVING BUSINESS CONNECTIONS IN FOREIGN COUNTRIES. T HEREFORE, THE INVOLVEMENT OF THE ASSESSEE IN PURCHASE AND SALE OF PROPERTIES IN FORE IGN COUNTRIES CANNOT BE RULED OUT PARTICULARLY WHEN SUCH PAPERS WERE FOUND AND SEIZED FROM THE ASSESSEES COMPANY DURING SEARCH. 5.1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 2,09,66,099/- MADE BY THE AO UN DER THE HEAD INCOME FROM REAL ESTATE TRADING IN DUBAI BY OBSERVING THAT THE AO CO ULD NOT ADDUCE ANY EVIDENCE OTHER THAN THE PAPERS SEIZED WHICH THE ASSESSEE CLAIMED T O BE DUMP DOCUMENTS WHEREAS THE ASSESSEE COULD NOT EXPLAIN AS TO WHY AND HOW SU CH DUMP DOCUMENTS WERE PREPARED AND KEPT AND ITS PURPOSE. 6. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE C IT(A) MAY BE SET ASIDE AND THE ORDER OF THE AO MAY PLEASE BE RESTORED. ASSESSEES GROUND NO. 1(A) & 1(B) THIS GROUND OF APPEAL IS SIMILAR TO THAT OF GROUND NOS. 2(A) & 2(B) TAKEN BY THE ASSESSEE IN HIS APPEAL FOR A.Y. 2008-09 (APPEAL NO. IT(SS)A-183/IND/2013), THEREFORE, OUR FINDING GIVEN IN THE ABOVESAID APPEAL WILL ALSO BE APPLICABLE IN THE PRESENT CASE. THUS, BY FOLLOWING THE SAME, THE ASSESSEES APPEAL ON THIS ISSUE IS PARTLY ALLOWED. NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 89 ASSESSEES GROUND NO. 2(A), 2(B) & 2(C) AND DEPARTMENTAL GROUND NO. 3 TO 3.3 THESE GROUNDS OF APPEAL PERTAIN TO THE ADDITIONS OF RS.86,30,000/- MADE IN THE HANDS OF THE ASSESSEE ON ACCOUNT OF CASH DEPOSITS I N THE BANK OF RAJASTHAN LTD.. THE RELEVANT FINDINGS OF THE ASSESSING OFFICER ARE RECO RDED AT PARA 9.1 TO PARA 9.4 FROM PAGE NO.42 TO 43 OF THE ASSESSMENT ORDER. THE BRIEF FACTS RELATING TO THE GROUNDS ARE THAT DU RING THE COURSE OF THE ASSESSMENT PROCEEDINGS, FROM THE BANK STATEMENTS OF THE ASSESSEE, THE AO NOTED THAT THE ASSESSEE HAD DEPOSITED CASH AMOUNTING TO RS.86, 30,000/- ON DIFFERENT DATES IN BANK ACCOUNT WITH THE BANK OF RAJASTHAN LTD.. BEFOR E THE AO, THE ASSESSEE EXPLAINED THAT CASH DEPOSITS IN BANK WERE MADE BY THE ASSESSE E OUT OF THE BROKERAGE AND SOFTWARE CONSULTANCY INCOME SHOWN IN THE RETURN AS WELL AS OUT OF THE CASH WITHDRAWN FROM THE SAME BANK ACCOUNT. HOWEVER, THE AO REJECTI NG THE EXPLANATION OF THE ASSESSEE HELD THE ENTIRE CASH DEPOSITS AS UNEXPLAIN ED AND MADE THE ADDITION OF RS.86,30,000/- IN THE ASSESSEES INCOME BY INVOKING THE PROVISIONS OF SECTION 68 OF THE ACT. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE, THE LD. CIT(A) HAD SET-ASIDE THE ADDITION OF RS.86,30,000/- DIRECT ING THE AO TO VERIFY THAT WHETHER OR NOT THE SUBJECT BANK ACCOUNT WAS DISCLOSED BY THE A PPELLANT PRIOR TO SEARCH THROUGH FILING RETURN OF INCOME BY GIVING HIS FINDINGS AT P ARA 10.5 & 10.6. FOR READY REFERENCE, THE FINDINGS ARE REPRODUCED AS UNDER: NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 90 10.5 THE PERUSAL OF THE APPELLANTS SUBMISSION SUGGESTS THAT THE APPELLANT INTENDS TO PROVE THE SOURCE OF DEPOSITS F ROM THE CURRENT YEAR INCOME AS DISCLOSED BY THE APPELLANT AS PER 153A RE TURN, WHEREIN THE APPELLANT HAS DISCLOSED PROPERTY CONSULTANCY INCOME /BROKING ETC TO THE EXTENT OF RS.30,00,000/- AND OTHER INCOME WHICH AMO UNTS TO TOTAL INCOME OF RS.32,13,459/- AS RETURNED INCOME U/S 153A OF TH E ACT. FURTHER TO THAT, THE APPELLANT INTENDS TO EXPLAIN THE SOURCE OF CASH DEPOSIT OUT OF CASH WITHDRAWAL MADE FROM THE BANK OF RAJASTHAN LTD. OF RS.92,20,000/-. EVEN THE APPELLANT MAKE THE CLAIM THAT HE WAS A CUSTODIA N OF SOME OF THE INVESTORS, WHICH ALSO WAS THE SOURCE OF CASH DEPOSI TS, THOUGH THE APPELLANT COULD NOT SUBSTANTIATE THE IDENTITY, CAPA CITY, NAME AND CREDENTIAL OF SUCH INVESTORS AT ANY POINT OF TIME E ITHER IN APPELLATE PROCEEDINGS OR IN ASSESSMENT PROCEEDINGS. HENCE APP ELLANTS THIS ARGUMENT OF BEING CUSTODIAN OF INVESTORS IS OF NO R ELEVANCE AND COMPLETELY UNFOUNDED. WITH THIS PERSPECTIVE THE APP ELLANT INTEND TO EXPLAIN THE SOURCE OF CASH DEPOSITS IN THE AFORESAI D BANK ACCOUNT. 10.6 HAVING PERUSED THE APPELLANTS EXPLANATION AND ALSO AFTER TAKING NOTE OF RETURN OF INCOME FILED BY THE APPELLANT U/S 153A OF THE ACT, WHICH IS APPEARING ON PAGE-30 TO 32 OF THE PAPER BOOK, I AM OF THE CONSIDERED VIEW THAT THE APPELLANT HAS DISCLOSED INCOME FROM D IFFERENT HEADS AS STATED ON PAGE-31 TO 32 OF THE PAPER BOOK OF RS.32, 13,459/- ON WHICH THE APPELLANT HAS MADE PAYMENT OF TAX. THOUGH I FIND TH AT THE SAID RETURN OF THE APPELLANT WAS FILED SUBSEQUENT TO SEARCH OPERAT ION AND I.E. ON 26/11/07, THUS, IN MY CONSIDERED VIEW AFTER PAYMENT OF TAX THE APPELLANT HAS LEFT WITH MERELY OF RS.19,00,000/- IN HIS HAND APPROXIMATELY. AFTER TAKING NOTE OF CERTAIN PAYMENTS BY THE APPELLANT TO WARDS HOUSE HOLD EXPENSES AND OTHER FINANCIAL COMMITMENTS THE POSSIB ILITY OF AVAILABILITY OF CASH SHOULD BE ASCERTAINED BY THE A.O. TAKING NOTE OF THE APPELLANTS DISCLOSURE OF ADDITIONAL INCOME. FURTHER, AS FAR AS THE SOURCE OF CASH WITHDRAWALS FROM BANK OF RAJASTHAN LTD. IS CONCERNE D, I CONSIDER IT PROPER AND APPROPRIATE TO DIRECT THE A.O. TO VERIFY THE NA TURE OF DEPOSITS IN THE SAID BANK ACCOUNT BEFORE WITHDRAWAL THROUGH WHICH T HE APPELLANT INTEND TO EXPLAIN THE SOURCE OF CASH DEPOSITS IN THE SAME BAN K ACCOUNT. THE A.O. IS DIRECTED TO VERIFY THE CREDIT ENTRY IN THE SAID BAN K ACCOUNT AND ALSO TO TAKE NOTE OF FACT THAT WHETHER THE SAID BANK ACCOUNT WAS DISCLOSED BY THE APPELLANT PRIOR TO SEARCH THROUGH FILING RETURN OF INCOME. IF THE APPELLANT COULD EXPLAIN THE SOURCE OF DEPOSIT IN THE SAID BAN K ACCOUNT IN RELATION TO THE APPELLANTS RETURNED INCOME OR BUSINESS INCOME THEN ONLY THE SOURCE NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 91 OF CASH WITHDRAWAL AS CLAIMED BY THE APPELLANT OF R S.92,20,000/- CAN BE TAKEN INTO ACCOUNT AS EXPLAINED SOURCE FOR EXPLAINI NG THE CASH DEPOSIT IN THE BANK ACCOUNT OF APPELLANT MAINTAINED WITH BANK OF RAJASTHAN LTD. IN THIS PERSPECTIVE, IF THE APPELLANT COULD ADDUCE THE SOURCE OF DEPOSIT IN THE SAID BANK ACCOUNT IN RELATION TO HIS RETURN OF INCO ME OR SOURCE OF INCOME THEN THE A.O. SHOULD TREAT THE SAID DEPOSIT AS EXPL AINED, IN CASE OF FAILURE ON THE PART OF THE APPELLANT THE SAME SHOULD BE HEL D OTHERWISE. WITH THIS OBSERVATION, THE APPELLANTS THIS GROUND OF APPEAL IS ADJUDICATED. ACCORDINGLY THE A.O. SHOULD DETERMINE THE SOURCE OF CASH DEPOSIT IN THE LIGHT OF AFORESAID DIRECTIONS IN THE APPELLANTS CA SE AND DETERMINE THE UNEXPLAINED CASH DEPOSITS, IF ANY. WITH THIS OBSERV ATION, THIS GROUND OF APPEAL IS ACCORDINGLY ADJUDICATED. THUS, THE APPELL ANTS THESE GROUNDS OF APPEAL ARE PARTLY ALLOWED. AGAINST THE ABOVE DIRECTION OF THE LD. CIT(A), THE ASSESSEE IS IN FURTHER APPEAL BEFORE US REQUESTING FOR DELETING THE ADDITION WHER EAS THE REVENUE IS IN APPEAL BEFORE US FOR CONFIRMING THE ADDITION MADE BY THE AO. THE LD. AR HAS MADE ORAL SUBMISSION AS WELL AS WRI TTEN SUBMISSION AS UNDER: FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, THE A SSESSEE HAS SHOWN AN INCOME OF RS.30,00,000/- FROM PROPERTY CONSULTAN CY BROKERAGE IN HIS RETURN OF INCOME FURNISHED U/S 153A OF THE ACT [PB PAGE NO.31]. IT MAY FURTHER BE OBSERVED FROM THE COPY OF THE BANK STAT EMENTS OF THE ASSESSEE WITH THE BANK OF RAJASTHAN, PLACED AT PAGE NO.134 A ND 135, THAT DURING THE RELEVANT YEAR, THE ASSESSEE HAD WITHDRAWN A SUM AGGREGATING TO RS.92,20,000/- FROM THE SAME BANK ON FOUR OCCASIONS I.E. RS.8,00,000/- ON 23-04-2008; RS.24,00,000/- ON 24-4-2008; RS.60,0 0,000/- ON 25-06- 2008 AND RS.20,000/- ON 20-02-2009. IT IS NOT THE C ASE OF THE REVENUE THAT THE CASH SO WITHDRAWN WAS UTILIZED BY THE ASSESSEE FOR MAKING SOME OTHER INVESTMENTS OR WAS EXPENDED. IN THESE CIRCUMS TANCES, IT IS NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 92 SUBMITTED THAT BY APPLYING THE PEAK THEORY OF AVAIL ABILITY OF CASH, NO ADDITION WAS WARRAN1TED. THE LEARNED CIT(A) HAS MISCONSTRUED THE FACT ON THE ISSUE OF AVAILABILITY OF CASH TO THE ASSESSEE OUT OF TOTAL INCOME OF RS.3 2,13,459/- DECLARED IN THE RETURN BY HOLDING THAT OUT OF SUCH INCOME THE A SSESSEE HAD PAID TAX AMOUNTING TO RS.19,00,000/-. HOWEVER, THE FACT REMA INED THAT THE ASSESSEE HAD FILED THE RETURN OF INCOME AFTER THE S EARCH AND THE ENTIRE TAX WAS ALSO PAID BY HIM AFTER THE SEARCH AND, THEREFOR E, THE QUESTION OF UTILIZATION OF CASH TOWARDS PAYMENT OF TAXES DOES N OT ARISE WITH THE RESULT THAT THE ENTIRE INCOME, DISCLOSED BY THE ASSESSEE I N HIS RETURN, AFTER MEETING REASONABLE HOUSEHOLD EXPENSES WAS AVAILABLE TO THE ASSESSEE FOR MAKING DEPOSITS IN BANK ACCOUNTS. THERE IS ALSO NO JUSTIFICATION IN THE CIT(A)S FIND ING THAT CREDIT FOR WITHDRAWAL OF CASH FROM THE SAME BANK ACCOUNT SHOUL D BE GIVEN TO THE ASSESSEE ONLY IF THE SAID BANK ACCOUNT WAS DISCLOSE D IN THE REGULAR RETURN FILED BY THE ASSESSEE. IT IS SUBMITTED THAT WHEN AN ADDITION IS MADE IN RESPECT OF CASH DEPOSIT MADE IN ONE BANK ACCOUNT, T HEN THE NECESSARY CONSIDERATION WILL BE REQUIRED TO BE GIVEN IN RESPE CT OF THE CASH WITHDRAWN FROM THE SAME BANK ACCOUNT IRRESPECTIVE OF THE FACT THAT WHETHER OR NOT SUCH BANK ACCOUNT WAS DISCLOSED BY THE ASSESSEE IN HIS RETURN FILED PRIOR TO SEARCH. IT IS SUBMITTED THAT FOR DETERMINING ANY UNDISCLOSED INCOME OF AN ASSESSEE ON THE BASIS OF CERTAIN DOCUMENTS THE E NTIRE DOCUMENT HAS TO BE CONSIDERED IN ITS ENTIRETY AND, ACCORDINGLY, IF THE DEPARTMENT WISH TO NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 93 PLACE RELIANCE ON ONE SIDE OF TRANSACTIONS I.E. OF CASH DEPOSITS IN BANK ACCOUNT IT CANNOT CLOSE ITS EYES ON THE OTHER SIDE OF THE TRANSACTIONS I.E. OF CASH WITHDRAWALS. THUS, CREDIT FOR CASH WITHDRAWALS FROM THE SAME BANK ACCOUNT DESERVES TO BE GIVEN TO ONE ASSESSEE FOR EX PLAINING THE SOURCES OF CASH DEPOSITS IN THE SAME BANK ACCOUNT UNLESS AN D UNTIL IT IS BROUGHT ON RECORD BY THE REVENUE THAT THE CASH WITHDRAWN WAS N OT AVAILABLE WITH THE ASSESSEE FOR MAKING RE-DEPOSITS. THE LD. DR HAS RELIED ON THE ORDER OF THE AO. THE L D. DR HAS OBJECTED THE ACTION OF THE CIT(A) IN RESTORING THE MATTER BACK TO THE F ILE OF THE ASSESSING OFFICER. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PA RTIES AND HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE AO FOUND THAT ASSESSEE HAS MADE CASH DEPOSIT OF RS.86,30,000/- IN THE BANK OF RAJASTHAN. THE ASSESSEE HAS TAKEN THE CONTE NTION THAT CASH DEPOSIT IN THE BANK WERE MADE OUT OF BROKERAGE AND SOFTWARE CONSUL TANCY INCOME IN THE RETURN OF INCOME AS WELL AS OUT OF CASH WITHDRAWAL FROM THE S AME BANK. THE ASSESSEE HAS SHOWN RS.30 LACS FROM PROPERTY CONSULTANCY BROKERAG E IN HIS RETURN OF INCOME FURNISHED U/S 153A OF THE ACT. ASSESSEE HAD ALSO WITHDRAWN RS .92,20,000/- FROM THE SAME BANK ON VARIOUS OCCASIONS. THE ASSESSEE HAS ALSO CASH WH ICH WAS DECLARED IN HIS RETURN OF INCOME. MOREOVER, THE ASSESSEE HAS ALSO PAID TAX ON THE SAME, THEREFORE, THE LD. CIT(A) HAS REMANDED THIS MATTER FOR VERIFICATION TO THE AO AND THE AO WAS DIRECTED TO VERIFY WHETHER OR NOT THE BANK ACCOUNT WAS DISCLOSE D BY THE ASSESSEE PRIOR TO SEARCH THROUGH FILING OF RETURN OF INCOME. WE ARE OF THE V IEW THAT THE CIT(A) HAS NO POWERS TO REMAND THE MATTER BUT NOW, WE AFTER CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 94 CASE, RESTORE THE MATTER TO THE FILE OF THE ASSESSI NG OFFICER WITH A SPECIFIC DIRECTION THAT THE FULL CREDIT SHOULD BE GIVEN TO THE ASSESSEE IN RESPECT OF CASH WITHDRAWALS MADE BY HIM, FROM TIME TO TIME, FROM HIS SAVING BANK ACCOUN TS IN WHICH CASH DEPOSITS WERE FOUND MADE BY THE ASSESSING OFFICER, AS THE REVENUE AUTHORITIES COULD NOT ESTABLISH THAT CASH WITHDRAWN BY THE ASSESSEE WAS UTILIZED BY THE ASSESSEE FOR SOME OTHER PURPOSES AND IT WAS NOT AVAILABLE WITH HIM FOR MAKI NG SUBJECT CASH DEPOSITS. AS REGARDS AVAILABILITY OF CASH OUT OF INCOME OF RS.30,00,000/ - SHOWN BY THE ASSESSEE IN HIS RETURN OF INCOME, FOR THE ASSESSMENT YEAR UNDER APPEAL, WE FIND SUBSTANCE IN THE ARGUMENTS OF LD. COUNSEL OF THE ASSESSEE THAT TAX ON SUCH INC OME WAS PAID BY THE ASSESSEE IN SUBSEQUENT YEARS AND NOT DURING THE RELEVANT YEAR. CONSIDERING THE FACT THAT THE ASSESSEE MIGHT HAVE SPENT A SUM OF RS.5,00,000/- TO WARDS HIS HOUSEHOLD EXPENSES, CREDIT FOR REMAINING RS.25 LACS ALSO DESERVES TO BE GIVEN TO THE ASSESSEE FOR EXPLAINING SOURCES OF CASH DEPOSITS. THUS, THE ASSESSING OFFIC ER IS DIRECTED TO VERIFY THE CLAIM OF THE ASSESSEE AS REGARD TO CASH WITHDRAWALS FROM THE SAME BANK ACCOUNTS AND AFTER VERIFICATION, CREDIT FOR SUCH CASH WITHDRAWALS ALON G WITH RS.25 LACS BE GRANTED TO THE ASSESSEE. WE ADJUDICATE ACCORDINGLY. . 17. DEPARTMENTAL GROUND NO. 1 THE REVENUE HAS TAKEN THIS GROUND OF APPEAL AGAINST THE ACTION OF THE LD. CIT(A) IN DECIDING THE APPEAL AGAINST THE PRINCIPLES OF NA TURAL JUSTICE, WITHOUT AFFORDING ANY OPPORTUNITY TO THE AO OR REMANDING IT BACK IN VIOLA TION OF THE DEPARTMENTAL INSTRUCTION THAT IN SEARCH ASSESSMENTS APPEAL ORDER BE PASSED E ITHER BASED ON REMAND REPORT OR AFTER HEARING THE AO. NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 95 IT WAS SUBMITTED BEFORE US BY BOTH SIDES THAT THIS GROUND OF APPEAL IS SIMILAR TO THAT OF GROUND NO. 1 TAKEN BY THE DEPARTMENT IN ITS APPEAL FOR A.Y. 2008-09 (APPEAL NO. IT(SS)A-250/IND/2013), THEREFORE, OUR FINDING G IVEN IN SUCH APPEAL WILL ALSO BE APPLICABLE IN THE PRESENT CASE. THUS, BY FOLLOWING THE SAME, THE DEPARTMENTAL APPEAL ON THIS ISSUE IS DISMISSED. DEPARTMENTAL GROUND NOS.2 TO 2.3 IT WAS SUBMITTED BEFORE US THAT THIS GROUND OF APPE AL IS SIMILAR TO THAT OF GROUND NOS. 2 TO 2.5 TAKEN BY THE DEPARTMENT IN ITS APPEA L FOR A.Y. 2008-09 (APPEAL NO. IT(SS)A-250/IND/2013), THEREFORE, OUR FINDING GIVEN IN SUCH APPEAL WILL ALSO BE APPLICABLE IN THE PRESENT CASE. THUS, BY FOLLOWING THE SAME, DEPARTMENTAL APPEAL IS DISMISSED ON THIS ISSUE. DEPARTMENTAL GROUND NOS.4 & 4.1 THE REVENUE HAS TAKEN THIS GROUND OF APPEAL AGAINST THE ACTION OF THE LD. CIT(A) IN DELETING THE ADDITION OF RS.5,60,50,000/- MADE B Y THE AO UNDER THE HEAD DUBAI HAWALA OBSERVING THAT THE AO COULD NOT ADDUCE ANY E VIDENCE OTHER THAN THE PAPERS SEIZED. THE BRIEF FACTS RELATING TO THE GROUND, AS NOTED BY THE AO IN THE BODY OF THE ASSESSMENT ORDER ARE THAT DURING THE COURSE OF SEAR CH PROCEEDINGS U/S. 132, VARIOUS DOCUMENTS WERE SEIZED FROM THE DIFFERENT PREMISES O F THE GROUP AND FROM SUCH DOCUMENTS IT WAS NOTED BY THE AO THAT THE ASSESSEE AND OTHERS WERE INSTRUMENTAL IN NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 96 ENVISIONING REAL ESTATE PROJECT IN DUBAI AND FOR MA KING SUCH INVESTMENTS THERE ARE INCIDENCES OF HAWALA TRANSACTIONS TO DUBAI. THE AO ON THE PERUSAL OF VARIOUS LOOSE PAPERS, AND IN PARTICULAR LOOSE PAPERS INVENTORISED AS PAGE NO. 75, 76 & 77 OF LPS-33, FORMED THE VIEW THAT THESE LOOSE PAPERS PERTAINS TO DUBAI HAWALA BY THE ASSESSEE AND OTHERS. ON THE BASIS OF SUCH LOOSE PAPERS, THE AO R EQUIRED THE ASSESSEE TO EXPLAIN THE NATURE AND SOURCES OF INVESTMENT IN REAL ESTATES AT DUBAI BUT THE ASSESSEE DENIED TO HAVE MADE ANY INVESTMENT IN ANY REAL ESTATE AT DUBA I AND ALSO DESCRIBED THE LOOSE PAPERS, REFERRED TO BY THE AO, AS DUMB DOCUMENTS ON LY. THE AO IN BODY OF THE ORDER, AFTER DISCUSSING THE DETAILS OF A PROJECT TITLED AS THE WORLD AT DUBAI AND AFTER DISCUSSING THE DETAILS OF VARIOUS OVERSEAS COMPANIE S FINALLY HELD THAT THE ASSESSEE ALONG WITH SHRI RITESH AJMERA AND SOME SHRI CHITRES H MEHTA HAVE MADE SUBSTANTIAL INVESTMENT IN THE PROJECT THE WORLD AT DUBAI. THE REAFTER, THE AO BY HOLDING UNEXPLAINED INVESTMENT IN DUBAI PROJECT BY SHRI RIT ESH AJMERA AND THE ASSESSEE RESPECTIVELY AT RS. 15,40,00,000/- AND RS.5,60,50,0 00/- MADE AN ADDITION OF RS.5,60,50,000/- IN THE ASSESSEES INCOME FOR THE A SSESSMENT YEAR UNDER CONSIDERATION UNDER THE HEAD DUBAI HAWALA. THE RELEVANT FINDING S OF THE ASSESSING OFFICER ARE RECORDED AT PARA 7.1 TO 7.7 AT PAGE NO.22 TO 35 OF THE ASSESSMENT ORDER. THE LD. CIT(A), AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE, DELETED THE ADDITION OF RS.5,60,50,000/- BY GIVING HIS FINDINGS AT PARA 12.4 TO 12.18 OF HIS ORDER. FINDINGS ARE REPRODUCED HEREUNDER: 12.4 I HAVE CONSIDERED THE AOS ORDER AS WELL AS THE AP PELLANTS A/R SUBMISSION AND ALSO VARIOUS DOCUMENTS PLACED ON REC ORD. CONSIDERING ALL THE FACTUAL POSITION OF THE CASE, I AM OF THE CONSI DERED VIEW THAT THE IMPUGNED ADDITION HAS BEEN MADE BY THE AO WITHOUT H AVING ANY COGENT NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 97 MATERIAL OR CORROBORATIVE EVIDENCE ON RECORD. THERE FORE, I FIND NO SUBSTANCE IN THE IMPUGNED ADDITION BEING DEVOID OF ANY MERIT. 12.5 IN ADDITION TO THIS, I ALSO FIND THAT THE OBSERVATI ONS AND FINDINGS OF THE AO IN THE IMPUGNED ORDER ARE IN RADICAL CONTRAD ICTION TO EACH OTHER. I FIND THAT AT THE PARA 7.3, THE AO HAS GIVEN THE FIN DING THAT SOME PERSONS LIKE SHRI NILESH AJMERA, SMT. SONALI AJMERA, SHRI R ITESH AJMERA AND OTHERS BELONGING TO SATELLITE GROUP HAVE INVESTED I N THE WORLD PROJECT BY ACQUIRING AN ISLAND I.E. D 49. HOWEVER, AT THE CO NCLUSION PART OF PARA 7.4.5(V), THE AO HAS STATED AS THE PURCHASER OF THE ISLAND D 49 ARE M/S NEEL 1 LTD. AND M/S C.S. DEVELOPERS LTD.. THE AO AGAIN AT PARA 7.4.5(VI), STATED THAT THEREFORE, FROM THE ABOVE IT IS EVIDENT THAT THE PU RCHASER OF THE ISLAND D49 WERE M/S NEEL 1 LIMITED AND M/S C S DEVELOPERS. HOWEVER, IT IS IMPERATIVE TO FIND OUT THE MAIN PERS ONS BEHIND THESE CONCERNS AND THE DEAL OF D49 . THE AO AT CONCLUDING PARA 7.7, HAS GIVEN A FINDING AS REGARD UNEXPLAINED INVESTMENT BY THE A PPELLANT AND SHRI RITESH AJMERA IN DUBAI PROJECT WHEREAS AT PARA 7.5, THE AO HAS HELD UNEXPLAINED INVESTMENT ON ACCOUNT OF DUBAI HAWALA. THE AO AGAIN AT PARA 7.4.7 OF THE ORDER, STATED THAT VARIOUS PERSON S, WHO WERE PART OF NEEL 1 LTD., HAVE MADE SUBSTANTIAL INVESTMENT IN THE PRO JECT AT DUBAI BUT WHILE MAKING THE ADDITION AT PARA 7.7 THE AO HAS HELD THE INVESTMENT IN THE DUBAI PROJECT BY THE APPELLANT AND SHRI RITESH AJME RA IN THEIR INDIVIDUAL CAPACITY. IN THE CONCLUDING PARA I.E. AT PARA 7.7, THE AO HAS GIVEN THE FINDING AS REGARD TO SOME UNEXPLAINED INVESTMENT IN DUBAI PROJECT BUT IN THE COMPUTATION PART OF THE ORDER THE A.O. HAS USED THE TERMINOLOGY AS DUBAI HAWALA. FROM ALL SUCH CONTRADICTION, I AM O F THE CONSIDERED VIEW THE ADDITION HAS BEEN MADE MERELY ON GUESS WORK AND CONJECTURES. IN MY CONSIDERED VIEW, IF AS PER THE AOS OWN FINDINGS, T HE SUBJECT PROPERTY HAS BEEN PURCHASED BY SOME M/S. NEEL 1 LTD. AND M/S. C S DEVELOPERS LTD., NO ADDITION BY ALLEGING UNEXPLAINED INVESTMENT IN T HE SAME PROPERTY CAN BE MADE IN THE HANDS OF THE APPELLANT. IN THE INSTA NT CASE, AS PER THE AOS OWN FINDINGS, THE OSTENSIBLE OWNERS OF THE PROPERTY AT DUBAI ARE ONLY M/S. NEEL 1 LTD. AND M/S. C S DEVELOPERS LTD. THEREFORE, UNLESS AND UNTIL IT IS ESTABLISHED THAT THE APPELLANT WAS THE REAL OWNER O F THE PROPERTY AND THE ABOVE ENTITIES WERE ONLY BENAMIDARS OF THE APPELLAN T, IN MY CONSIDERED VIEW, NO UNEXPLAINED INVESTMENT IN THE SAID PROPERT Y CAN BE PRESUMED TO HAVE BEEN MADE BY THE APPELLANT. FOR THIS PROPOSITI ON, MY VIEW ALSO GETS SUPPORT FROM THE PRONOUNCEMENT OF HONBLE HIGH COUR T OF KERALA IN THE CASE OF CIT VS. K. MAHIM UDMA (2000) 242 ITR 133 (K ER.). NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 98 12.6 FURTHER I FIND SUBSTANCE IN THE SUBMISSION OF APPEL LANTS A/R THAT THE ONLY BASIS TAKEN BY THE AO FOR MAKING THE IMPUG NED ADDITION IS CERTAIN LOOSE PAPERS/ COMPUTER PRINTOUTS WHICH WERE NOT REC OVERED FROM THE POSSESSION OR CONTROL OF THE APPELLANT BUT THE SAME WERE RECOVERED ONLY FROM A COMPANY NAMELY M/S. PHOENIX DEVCONS PVT. LTD ., IN WHICH THE APPELLANT WAS MERELY ONE OF THE DIRECTORS. THE AO C OULD NOT BRING ANY EVIDENCE ON RECORD THAT THE LOOSE PAPERS SO FOUND W ERE EITHER IN THE HANDWRITING OF THE APPELLANT OR THEY WERE PREPARED UNDER THE INSTRUCTION OF THE APPELLANT. IN SUCH CIRCUMSTANCES, IN MY CONSIDE RED VIEW, THE PROVISIONS OF SECTION 292C GIVING PRESUMPTION AS RE GARD TO THE TRUENESS OF SUCH DOCUMENTS WOULD HAVE NO APPLICATION. 12.7 I FIND THAT THE PROVISIONS OF S.292C HAVE BEEN INS ERTED IN THE STATUTE BY THE FINANCE ACT, 2007 W.R.E.F. 1.10.1975 TO EMPO WER THE INCOME TAX AUTHORITIES TO MAKE CERTAIN PRESUMPTIONS ON BOOKS O F ACCOUNT, OTHER DOCUMENTS, MONEY, BULLION, JEWELLERY OR OTHER VALUA BLE ARTICLE OR THING FOUND IN THE POSSESSION OR CONTROL OF ANY PERSON IN THE COURSE OF A SEARCH UNDER S.132 EVEN FOR THE PURPOSE OF ASSESSMENT. SUC H PROVISION HAS BEEN INSERTED IN THE BACKGROUND OF DECISION OF HONBLE A PEX COURT IN THE CASE OF P.R. METRANI VS. CIT (2006) 287 ITR 209 (SC) IN WHICH THE APEX COURT HELD THAT THE PRESUMPTION UNDER S.132(4A) IS NOT AV AILABLE FOR THE ASSESSMENT PROCEEDINGS. THE PHRASEOLOGY USED IN SUB -ECTION (1) OF SECTION 292C IS PARA-MATERIA WITH THAT OF SECTION 132(4A). I FIND THAT MANY JUDICIAL AUTHORITIES IN THE CONTEXT OF PROVISIONS O F SECTION 132(4A) HAVE CLEARLY LAID DOWN THE RATIO THAT THE PRESUMPTION UN DER S.132(4A) IS AVAILABLE ONLY AGAINST THE PERSON FROM WHOSE POSSES SION THE DOCUMENT IS FOUND AND SUCH PRESUMPTION IS NOT AVAILABLE AGAINST ANY THIRD PARTY. FOR THIS PROPOSITION SUPPORT IS DRAWN FROM THE JUDICIAL PRONOUNCEMENTS IN THE CASE OF SMT. BOMMANA SWARNA REKHA VS. ACIT (2005) 9 4 TTJ (VISAKHA) 885, STRAPTEX (INDIA) (P) LTD. VS. DCIT (2003) 79 T TJ (MUMBAI) 228, JAYA S. SHETTY VS. ACIT (1999) 64 TTJ (MUMBAI) 551, ASHW ANI KUMAR VS. ITO (1992) 42 TTJ (DEL) 644, KISHANCHAND SOBHRAJMAL VS. ACIT (1992) 42 TTJ (JP) 423, RAMA TRADERS VS. FIRST ITO (1988) 32 TTJ (PAT) 483 (TM), ACIT VS. KISHORE LAL BALWANT RAI & ORS. (2007) 17 S OT 380 (CHD), SHETH AKSHAY PUSHPAVADAN VS. DCIT (2010) 130 TTJ (AHD) (U O) 42. 12.8 ACCORDINGLY, IN MY CONSIDERED VIEW, WITHOUT BRINGI NG ANY CORROBORATIVE EVIDENCE AND COGENT MATERIAL ON RECOR D, MERELY ON THE BASIS OF SUCH LOOSE PAPERS UNLESS AND UNTIL DETAILS NOTED THEREIN IS EVIDENCED WITH DOCUMENTARY EVIDENCE OF ANY SUCH TRANSACTION, NO ADVERSE INFERENCE OUGHT TO HAVE BEEN DRAWN AGAINST THE APPELLANT MERE LY ON SUSPICION AND NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 99 CONJECTURES. THE HONBLE APEX COURT, IN THE CASE OF DHAKESWARI COTTON MILLS LTD. VS. CIT (1954) 26 ITR 775 (SC), HAS HELD THAT WHILE MAKING AN ASSESSMENT, THERE MUST SOMETHING MORE THAN BARE SUS PICION TO SUPPORT THE ASSESSMENT. THE APEX COURT, AGAIN IN THE CASE O F LALCHAND BHAGAT AMBICA RAM VS. CIT (1959) 37 ITR 288 (SC) HELD THAT WHERE ANY FACT FINDING AUTHORITY ACTS WITHOUT ANY EVIDENCE OR UPON A VIEW OF THE FACTS WHICH COULD NOT REASONABLY BE ENTERTAINED OR THE FA CTS FOUND WERE SUCH THAT NO PERSON ACTING JUDICIALLY AND PROPERLY INSTR UCTED AS THE RELEVANT LAW COULD HAVE FOUND, THE COURT IS ENTITLED TO INTERFER E. 12.9 I ALSO FIND SUBSTANCE IN THE CONTENTION OF THE APPE LLANTS A/R THAT THE LOOSE PAPERS INVENTORISED AS PAGE NO.75 TO 78 O F LPS-33 (XEROX COPIES WHEREOF HAVE BEEN GIVEN BY THE AO HIMSELF AT PAGE NO.29 TO 32 OF THE IMPUGNED ORDER), WHICH ARE BASICALLY IN THE NAT URE OF COMPUTERIZED EXCEL SHEET PRINTOUTS ONLY, NO SIGNIFICANT DETAILS HAVE BEEN GIVEN BY A.O. IN THE ASSESSMENT ORDER. I FURTHER FIND THAT IN ONE OF THE ABOVE SAID LOOSE PAPERS THERE IS ANY REFERENCE OF ANY DATE/ MONTH OR YEAR. THEREFORE, IT CANNOT BE PERCEIVED FROM SUCH LOOSE PAPERS THAT TO WHICH PERIOD SUCH LOOSE PAPERS PERTAIN. 12.10 FURTHER FROM A PERUSAL OF SUCH COMPUTERIZED SHEETS, THE VITAL DETAILS SUCH AS THE VERY PURPOSE OF PREPARING SUCH SHEETS, THE NAME OF THE PERSON PUNCHING THE DATA IN COMPUTER FOR MAKING SUCH SHEETS, THE NAME OF THE PERSON OR THE ENTITY FOR WHICH SUCH DAT AS WERE FED IN THE COMPUTER ARE ALSO NOT DISCERNIBLE. FURTHER, IT IS N OT CLEAR THAT WHETHER SUCH DATAS PERTAIN TO THE RECEIPT OF MONEY OR PAYMENT O F MONEY. IT IS A SETTLED LAW THAT NO ADDITION CAN BE MADE ON THE BASIS OF AN Y NON-SPEAKING DOCUMENT. THE HONBLE HIGH COURT OF DELHI, IN THE C ASE OF CIT VS. GIRISH CHAUDHARY (2008) 296 ITR 619 (DEL) HELD THAT BEFORE AN ADDITION OF UNDISCLOSED CAN BE MADE, THE AO HAS TO BRING ON REC ORD THE MATERIAL FOUND AS A RESULT OF SEARCH TO SHOW THAT THERE IS A N UNDISCLOSED INCOME. MY VIEW ALSO GETS SUPPORT FROM VARIOUS DECISIONS I. E. ACIT VS. ASHOK KUMAR VIG (2007) 106 TTJ (RANCHI) 422, M.M. FINANCI ERS (P) LTD. VS. DCIT (2007) 107 TTJ (CHENNAI) 200, DIMSY FOODS & CH EMICALS (P) LTD. VS. DCIT (2007) 110 TTJ (DEL) 450, ACIT VS. RAVI AG RICULTURAL INDUSTRIES (2009) 121 TTJ (AGRA) TM 903, MAHAAN FOODS LTD. VS. DCIT (2009) 27 DTR (DEL) (TRIB) 185, NAGARJUNA CONSTRUCTION CO. LT D. VS. DCIT (2012) 52 SOT 178 (HYD.), ACIT VS. SATYAPAL WASSAN (2008) 5 D TR (JAB) (TRIB) 202, GYANKUMAR AGARWAL (IND.) VS. ACIT (2012) 146 T TJ (HYD.) 334, JAGDAMBA RICE MILLS VS. ACIT (2000) 67 TTJ (CHD) 83 8, RAKESH GOYAL VS. ACIT (2004) 87 TTJ (DEL) 151, N.K. MALHAN VS. D CIT (2004) 91 TTJ NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 100 (DEL) 938, BRIJLAL RUPCHAND VS. ITO (1991) 40 TTJ ( IND.) 668, RAJ PAL SINGH RAM AUTAR VS. ITO (1991) 39 TTJ (DEL) 544, EM BEE CLEARING & SHIPPING SERVICES (P) LTD. VS. ACIT (2007) 12 SOT 2 27 MUMBAI) . 12.11 I FIND THAT THE HONBLE ITAT, DELHI ABENCH IN TH E CASE OF BANSAL STRIPS (P) LTD. & ORS. VS. ACIT (2006) 100 TTJ (DEL ) 665 , HAS HELD AS UNDER: 36. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISS IONS. WE SEE FORCE IN THE CONTENTION OF THE ASSESSEE THAT THERE IS NO PROVISION OF LAW UNDER WHICH THE ADDITION OF RS.53,69,260 COULD BE MADE TO THE INCOME DECLARED BY THE ASSESSEE. IT IS TRITE LAW THAT IF AN INCOME NOT ADMITTED BY AN ASSESSEE IS TO BE ASSESSED IN THE HANDS OF THE ASSE SSEE, THE BURDEN TO ESTABLISH THAT THERE IS SUCH INCOME CHARGEABLE TO T AX IS ON THE AO. WITH A VIEW TO ASSIST THE AO AND TO REDUCE THE RIGOUR OF T HE BURDEN THAT LAY UPON THE AO, PROVISIONS OF SS. 68, 69, 69A TO 69D HAVE P ROVIDED FOR CERTAIN DEEMING PROVISIONS WHERE AN ASSUMPTION OF INCOME IS RAISED IN THE ABSENCE OF SATISFACTORY EXPLANATION FROM THE ASSESS EE. AS THERE ARE DEEMING PROVISIONS THE CONDITION PRECEDENT FOR INVO KING SUCH PROVISIONS ARE REQUIRED TO BE STRICTLY CONSTRUED. THE FACTS AN D CIRCUMSTANCES GIVING RISE TO THE PRESUMPTION HAVE TO E ESTABLISHED WITH REASONABLE CERTAINTY. THE AO CANNOT FIRST MAKE CERTAIN CONJECTURES AND SU RMISES AND THEREAFTER APPLY THE DEEMING PROVISIONS BASED ON SUCH CONJECTU RES AND SURMISES. IN THE ABSENCE OF ADEQUATE MATERIAL AS TO THE NATURE A ND OWNERSHIP OF THE TRANSACTION, UNDISCLOSED INCOME CANNOT BE ASSESSED IN THE HANDS OF THE ASSESSEE MERELY BY ARITHMETICALLY TOTALING VARIOUS FIGURES JOTTED DOWN ON THE LOOSE DOCUMENTS. IN OTHER WORDS FOR THE PURPOSE OF RESORTING TO DEEMING PROVISIONS, DUMB DOCUMENTS OR DOCUMENTS WIT H NO CERTAINTY HAVE NO EVIDENTIARY VALUE.. 12.12 THE HONBLE ITAT, PATNA IN THE CASE OF ACIT VS. DR. KAMLA PRASAD SINGH (2010) 3 ITR (TRIB) 533 (PAT) HAS ALSO HELD THAT NO ADDITIONS CAN BE SUSTAINED IN THE FOLLOWING WORDS: HAVING CONSIDERED THE RIVAL SUBMISSIONS, THE PROVI SIONS RELATING TO ASSESSMENT FOR THE BLOCK PERIOD UNDER CHAPTER XIV-B OF THE ACT AND THE ASSESSEES CASE INCLUDING THE DOCUMENTS UNDER REFER ENCE, WHICH HAVE BEEN MADE ANNEXURE TO THIS ORDER ALSO, WE ARE OF TH E OPINION THAT IT IS NOW WELL SETTLED THAT UNDISCLOSED INCOME FOR THE PURPOS E OF BLOCK ASSESSMENT HAS TO BE COMPUTED SOLELY ON THE BASIS OF SEIZED MA TERIAL AND ANY ENQUIRY MADE BY THE AO THEREAFTER RELATABLE TO SUCH MATERIA L; MEANING THEREBY NEITHER ANY ENQUIRY REPORT NOR ANY DOCUMENT PROCURE D EITHER BEFORE OR NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 101 AFTER THE SEARCH CAN BE CONSIDERED WHILE COMPUTING THE UNDISCLOSED INCOME. SIMILARLY, IT IS ALSO SETTLED LAW THAT ANY DOCUMENT FOUND AND SEIZED DURING THE COURSE OF SEARCH HAS TO BE INTERP RETED LITERALLY AND NOTHING CAN BE ADDED OR SUBSTRACTED. IF FACTS OF TH E ASSESSEES CASE BEFORE US ARE EVALUATED IN THE LIGHT OF THE AFORESA ID SETTLED PRINCIPLES OF LAW, IT WILL BE REVEALED THAT THE DOCUMENTS FOUND A ND SEIZED AND RELIED UPON FOR MAKING THE ADDITION UNDER APPEAL BY THE RE VENUE HAVE NEITHER DATE NOR THE NAME OF THE ASSESSEE AND THEREFORE, IT CANNOT BE ASSUMED OR PRESUMED AS TO WHEN AND BY WHOM THE NOTINGS WERE RE CORDED. IT IS ALSO NOT KNOWN AS TO IN WHAT CONNECTION THE NOTINGS EVEN IF CONSIDERED AS GIVING AND TAKING OF MONEY WERE MADE; MEANING THE REBY THAT THESE DOCUMENTS BEING DUMB DOCUMENTS, NO ADDITION CAN BE MADE ON THE BASIS OF ASSUMING OR PRESUMING THE NOTINGS IN THOSE DOCUM ENTS RELATING TO ANY OTHER TRANSACTION NOR RECORDED IN THE DOCUMENTS. IN A NUTSHELL, ANY INFIRMITY IN THE ORDER OF THE CIT (A) ON THIS POINT (SIC) AND THEREFORE, FOLLOWING THE LAW LAID DOWN IN VARIOUS DECISIONS RE LIED UPON BY THE ASSESSEE IN ITS SYNOPSIS, WE UPHOLD THE ORDER OF TH E CIT (A) ON THIS POINT. THE REVENUES GROUND IS REJECTED. 12.13 THE HONBLE ITAT, JABALPUR BENCH, IN THE CASE OF ACIT VS. SATYAPAL WASSAN (2008) 5 DTR (JAB) (TRIB) 202 HAS HELD THAT UNLESS, IN ANY CASE, A DOCUMENT FULFILS FOUR ESSENTIAL COMPONE NTS VIZ., THE TAXABLE EVENT, THE PERSON CHARGEABLE, THE ASSESSMENT YEAR I N WHICH CHARGE IS LEVIABLE AND THE TOTAL INCOME, IT HAS NO EVIDENTIAR Y VALUE AND CANNOT BE RELIED UPON IN FOLLOWING WORDS: 19. THE ABOVE DECISION ALSO LEADS US TO INFER THAT A CHARGE ON THE BASIS OF DOCUMENT CAN BE LEVIED ONLY WHEN THE DOCUMENT IS A SPEAKING ONE. THE DOCUMENT SHOULD SPEAK EITHER OUT OF ITSELF OR I N THE COMPANY OF OTHER MATERIAL FOUND ON INVESTIGATION AND OR IN THE SEARC H. THE SPEAKING FROM THE DOCUMENT SHOULD BE LOUD, CLEAR AND UNAMBIGUOUS IN RESPECT OF ALL THE FOUR COMPONENTS AS DESCRIBED ABOVE. IF IT IS NOT SO , THEN DOCUMENT IS ONLY A DUMB DOCUMENT. NO CHARGE CAN BE LEVIED ON THE BAS IS OF A DUMB DOCUMENT. 12.14 THE HONBLE HIGH COURT OF GUJARAT IN THE CASE OF U SHAKANT N. PATEL VS. CIT 92006) 282 ITR 553 (GUJ.) HAS PRONOUNCED TH AT BEFORE INVOKING THE PROVISIONS OF S.69 OF THE ACT, IT IS INCUMBENT UPON THE AUTHORITY TO ESTABLISH THAT THERE WERE INVESTMENTS MADE BY THE A SSESSEE; THAT SUCH INVESTMENTS WERE NOT RECORDED IN THE BOOKS OF ACCOU NTS MAINTAINED BY THE ASSESSEE AND THAT SUCH INVESTMENTS HAD BEEN MADE IN THE FINANCIAL YEAR NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 102 IMMEDIATELY PRECEDING THE ASSESSMENT YEAR IN QUESTI ON AND WITHOUT SATISFYING THE PRE-REQUISITE CONDITIONS OF S. 69 OF THE ACT, AO CANNOT MAKE ANY ADDITION BY INVOKING THE PROVISIONS OF S.132(4A ) OF THE ACT. 12.15 I ALSO FIND SUBSTANCE IN THE APPELLANTS A/RS CON TENTION THAT THE VARIOUS LOOSE PAPERS OF LPS-33, AS DISCUSSED BY THE AO AT PARAS 7.4.1 TO PARA 7.4.5 HAVE NO LIVE LINK OR NEXUS WITH THE KEY PAGE I.E. PAGE NO.76 OF LPS-33 AT WHICH THERE IS A MENTIKON WITH THE NARRAT ION NILESH AJMERA RS.5,55,00,000 AND 55,000; 50,00,000 AND 50,000 DHS CASH. I FIND THAT ON SUCH PAGE THE TOTAL UNDER THE COLUMN OF DH S HAS BEEN STATED AT 3,38,16,050 WHICH DO NOT TALLY WITH ANY OF THE FIGU RES STATED AT PARA 7.4.5 (I) OF THE AOS ORDER. IN MY CONSIDERED VIEW, THE A O COULD NOT ESTABLISH THAT THE SUBJECT LOOSE PAPER, I.E. PAGE NO.76 OF LP S-33, PERTAINS ONLY TO THE PROJECT THE WORLD AS REFERRED TO BY THE AO AT VARIOUS PARTS OF THE ORDER. IN MY CONSIDERED VIEW, THE AO HAS MADE THE I MPUGNED ADDITION MERELY ON ASSUMPTION/HYPOTHESIS ONLY. IN SUCH CIRCU MSTANCES, RELYING UPON THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF OMAR SALAY MOHAMED SAIT VS. CIT (1959) 37 ITR 151 (SC), I DO N OT FIND JUSTIFICATION IN THE ACTION OF THE A.O. OF MAKING SUCH ADDITION. 12.16 FURTHER, IN MY CONSIDERED VIEW, IF THE APPELLANT HA D MADE ANY INVESTMENT IN DUBAI, AS ALLEGED BY THE AO THEN AT L EAST SOME DOCUMENTS SUCH AS MONEY RECEIPTS, PURCHASE AGREEMENT, TITLE D EED ETC. COULD HAVE BEEN FOUND FROM ANY OF THE PREMISES OF THE APPELLAN T OR HIS ASSOCIATES. HOWEVER, NEITHER DURING THE COURSE OF SEARCH NOR DU RING THE COURSE OF ASSESSEMENT PROCEEDINGS, EVEN THE EXISTENCE OF SUCH PAPERS HAS BEEN BROUGHT ON RECORD. FURTHER, FROM THE FINDINGS GIVEN BY THE AO HIMSELF IN THE IMPUGNED ORDER, I FIND THAT THE COMPANY M/S. NE EL 1 LTD. OR NEEL HOLDINGS LTD., IN WHICH ACCORDING TO THE AO THE APP ELLANT OR HIS ASSOCIATES WERE HAVING VESTED INTEREST, ARE FOREIGN COMPANIES. I FURTHER FIND THAT THE AO COULD NOT BRING ON RECORD EVEN AN IOTA OF ANY EV IDENCE THROUGH WHICH IT CAN BE ESTABLISHED THAT THE APPELLANT MADE ANY I NVESTMENT IN SUCH COMPANIES FROM THE FUNDS REMITTED FROM INDIA. I COU LD NOT FIND FROM THE MATERIAL ON RECORD THAT DURING THE COURSE OF SEARCH IN THE PREMISES OF THE APPELLANT, ANY SUCH EVIDENCE SUCH AS ANY SHARE CERT IFICATE, MONEY RECEIPT OR ANY OTHER DOCUMENT ESTABLISHING SUCH INVESTMENT BY THE APPELLANT COULD BE FOUND. 12.17 I ALSO FIND SUBSTANCE IN THE APPELLANTS A/R SUBMIS SION THAT ANY REMITTANCE OUT OF INDIATHROUGH THE HAWALA ROUTE IS A SERIOUS PUNISHABLE CRIME AND THERE ARE VARIOUS AGENCIES SUCH AS ENFORC EMENT DIRECTOR, NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 103 FEMA AUTHORITIES ETC. TO HAVE A CHECK ON SUCH TRANS ACTIONS. THE CONTENTION OF THE APPELLANTS A/R IS THAT THE INCOM E TAX DEPARTMENT HAD MADE A REFERENCE OF THE ALLEGED TRANSACTIONS TO THE ABOVE AUTHORITIES AND SUCH AUTHORITIES, AFTER MAKING NECESSARY ENQUIRIES DID NOT FIND ANY SUBSTANCE IN THE STAND OF THE INCOME TAX DEPARTMENT . ALTHOUGH, THE A/R OF THE APPELLANT COULD NOT PRODUCE ANY DOCUMENTARY EVIDENCE IN SUPPORT OF MAKING OF ANY REFERENCE BY THE DEPARTMENT TO ENF ORCEMENT DIRECTOR OR FEMA AUTHORITIES NOR IN SUPPORT OF HIS SUCH ASSERTI ON IN RESPECT OF OUTCOME OF SUCH ENQUIRY. FURTHER, EVEN I FIND THAT THE AO HAS NOT BROUGHT ON RECORD ANY ADVERSE FINDING EITHER OF ENFORCEMENT DIRECTOR OR OF THE FOREIGN TAXATION DIVISION OF CBDT IN RESPECT OF THE ALLEGED HAWALA TRANSACTIONS. 12.18 TAKING NOTE OF ALL THE FACTUAL POSITION OF THE CAS E, IN MY CONSIDERED VIEW, THE IMPUGNED ADDITION MADE BY THE AO ON ACCOU NT OF DUBAI HAWALA AT RS.5,60,50,000/- IS DEVOID OF ANY MERIT. ACCORDI NGLY, THE ADDITION SO MADE BY THE A.O. IS DELETED. IN THE RESULT, APPELLA NTS APPEAL IS ALLOWED. HOWEVER, I WOULD LIKE TO MENTION VERY CATEGORICALLY THAT IF IN FUTURE, THE ENFORCEMENT DIRECTORATE OR FEM AUTHORITIES OR A NY OTHER AUTHORITIES REGULATING THE REMITTANCE OF MONEY FROM INDIA GIVES ANY CONCLUSIVE FINDING AS REGARD TO MAKING OF THE IMPUG NED HAWALA TRANSACTION BY THE APPELLANT, THEN THE A.O. WOULD B E FREE TO TAKE NECESSARY ACTION IN ACCORDANCE WITH THE PROVISION O F LAW. THE LD. AR HAS MADE ORAL SUBMISSION AS WELL AS WRIT TEN SUBMISSION AS UNDER: AT THE OUTSET, WE WISH TO PLACE RELIANCE ON THE VA RIOUS FINDINGS GIVEN BY THE LEARNED CIT(A) IN HIS ORDER. IT MAY BE APPRECIATED THAT THE DRS COULD NOT CONTRO VERT ANY OF THE FINDINGS OF THE CIT(A). ON A PERUSAL OF THE LOOSE PAPERS INV ENTORIZED AS PAGE NO. 75, 76 & 77 OF LPS-33, AS PLACED AT PAGE NO.131 TO 133 OF THE PAPER BOOK, [COPIES WHEREOF HAVE ALSO BEEN MADE PART OF T HE ASSESSMENT NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 104 ORDER], IT MAY BE OBSERVED THAT SUCH LOOSE PAPERS A RE BASICALLY DUMB DOCUMENTS. THESE DOCUMENTS DO NOT CONTAIN ANY DATE OR PERIOD. THESE DOCUMENTS ALSO NOT CONTAIN THE DETAILS THAT WHETHER THESE ARE IN THE NATURE OF RECEIPTS OR PAYMENTS. IT MAY ALSO BE OBSE RVED THAT NO CORROBORATIVE EVIDENCE FOR THE ENTRIES MADE IN THES E LOOSE PAPERS HAVE BEEN BROUGHT ON RECORD BY THE AO. IT IS SUBMITTED T HAT THE RELIANCE BY THE AO ON SOME INTERNET INFORMATION IS MISPLACED AS IT HAS NO DIRECT NEXUS WITH THE LOOSE PAPERS FOUND DURING THE COURSE OF SE ARCH. ON THE OTHER HAND, IT MAY BE OBSERVED THAT THE AO HAS GIVEN CONT RADICTORY FINDINGS IN HIS ORDER INASMUCH AT SOME PLACES THE AO HAS ALLEGE D THAT THE ASSESSEE HAS MADE INVESTMENT IN CERTAIN PROPERTIES IN DUBAI AND AT SOME OTHER PLACES THE AO HAS STATED THAT SOME COMPANIES LIKE M /S. NEEL 1 LTD. AND M/S. C.S. DEVELOPERS HAVE MADE INVESTMENT IN SUCH P ROPERTIES. THUS, THE FINDINGS OF THE AO ARE NOT GERMANE FROM THE FACTS A ND MATERIAL ON THE RECORD. IT IS SUBMITTED THAT VARIOUS JUDICIAL RULIN GS CITED BY THE CIT(A) IN HIS ORDER ARE APPLICABLE IN THE PRESENT CASE. IT IS FURTHER SUBMITTED THAT THE CIT(A) HAS GIVEN A CATEGORICAL FINDING THAT IN THE ASSESSEES CASE, FOR THE ALLEGED DUBAI HAWALA, NO ACTION HAS BEEN TAKEN BY THE OTHER GOVERNMENT AGENCIES SUCH AS ENFO RCEMENT DIRECTOR, FEMA AUTHORITIES, ETC.. IT SHALL BE APPRECIATED THA T THE LEARNED CIT(A) HAS NOT GIVEN ABSOLUTE RELIEF TO THE ASSESSEE BUT IT HA S DELETED THE ADDITION WITH A SPECIFIC DIRECTION THAT IN FUTURE IF THE ENF ORCEMENT DIRECTOR OR FEMA NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 105 AUTHORITIES OR ANY AUTHORITIES REGULATING THE REMIT TANCE OF MONEY FROM INDIA GIVES ANY CONCLUSIVE FINDING AS REGARD TO MAKING OF HAWALA TRANSACTION BY THE ASSESSEE, THEN THE AO WOULD BE FREE TO TAKE NEC ESSARY ACTION AGAINST THE ASSESSEE IN ACCORDANCE WITH THE PROVISIONS OF L AW. IT IS SUBMITTED THAT UNLESS AND UNTIL THE OTHER AGENCIES WHO HAVE BEEN E NTRUSTED TO HAVE A VIGIL ON REMITTANCE/IN-FLOW OF FUNDS TO/FROM COUNTR IES OUTSIDE INDIA DO NOT COME TO A CONCLUSION THAT ANY PERSON HAS MADE/RECEI VED ANY REMITTANCE TO/FROM ABROAD, MERELY ON THE BASIS OF GUESS WORK A ND SURMISES IT WOULD NOT BE APPROPRIATE TO CHARGE ANY PERSON FOR SUCH OF FENCE AND CONSEQUENTLY, EVEN UNDER THE PROVISIONS OF THE INCO ME-TAX ACT, 1961, NO ADVERSE VIEW DESERVES TO BE DRAWN. ACCORDINGLY, IT IS HUMBLY SUBMITTED THAT THE ORDER OF THE CIT(A) ON THIS GROUND DESERVE S TO BE MAINTAINED AND CONSEQUENTLY THE GROUND NO.4 AND 4.1 OF THE REVENUE DESERVES TO BE DISMISSED IN LIMINE. LD. DR RELIED ON THE ORDER OF THE AO. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PA RTIES AND HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT DURING T HE COURSE OF SEARCH, A LOOSE PAPER INVENTORISED AS PAGE NO.75, 76 AND 77 OF LPS-33 WHI CH IS PLACED ON PAPER BOOK AS PAGES 131 TO 133 WAS SEIZED. THE LD. CIT(A) HAS HEL D THAT THESE DOCUMENTS ARE DUMB DOCUMENTS. THESE DOCUMENTS DO NOT CONTAIN ANY DATE OR PERIOD. THESE DOCUMENTS ALSO DO NOT CONTAIN DETAILS THAT WHETHER THESE ARE OF NA TURE OF RECEIPT OR PAYMENT. THE AO HAS NOT MADE ANY INQUIRY AFTER LOOSE PAPER FOUND. T HE AO HAS HELD THAT SOME NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 106 COMPANIES LIKE, M/S. NEEL I LTD. AND M/S. CS DEVELO PERS HAS MADE INVESTMENT IN THEIR PROPERTY. WE FIND THAT LD. CIT(A) HAS HELD THAT THE AO HAS NOT MADE ANY INQUIRY WHETHER THE ASSESSEE HAS MADE INVESTMENT IN THE DUBAI PROPE RTY OR IN M/S. NEEL 1 LTD. OR CS DEVELOPERS WHO HAVE ALLEGEDLY MADE INVESTMENT IN TH E PROPERTY. THE LD. CIT(A) HAS FURTHER HELD THAT IF ALLEGED DUBAI HAWALA IS MADE B Y THE ASSESSEE, NO ACTION HAS BEEN TAKEN BY THE OTHER GOVT. AGENCIES AS ENFORCEMENT DI RECTOR, FEMA AUTHORITIES. THE LD. CIT(A) HAS ALSO GIVEN THE DIRECTION TO THE AO THAT IF THE E.D. OR FEMA AUTHORITIES OR ANY AUTHORITIES REGULATING THE REMITTANCE OF MONEY FROM INDIA GIVES ANY CONCLUSIVE FINDING AS REGARD MAKING OF HAWALA TRANSACTION BY THE ASSES SEE THEN THE AO WOULD BE FREE TO TAKE ACTION AGAINST THE ASSESSEE IN ACCORDANCE WITH THE PROVISIONS OF LAW. WE FIND THAT WHEN LD. CIT(A) HAS GIVEN THE SPECIFIC DIRECTION AN D THE DEPARTMENT IS NOT BRINGING ANY EVIDENCE THAT ASSESSEE HAS MADE ANY INVESTMENT IN T HE PROPERTY, NO ADDITION CAN BE MADE ON THE BASIS OF SIMPLE DOCUMENTS FOUND FROM TH E POSSESSION OF THE ASSESSEE. WE ARE OF THE VIEW THAT LD. CIT(A) IS JUSTIFIED IN HIS ACTION FOR GIVING THE DIRECTION AND DELEING THE ADDITION OF RS.5,60,50,000/-. WE ARE ALSO IN AG REEMENT WITH THE DIRECTION OF THE LD. CIT(A), WHICH READS AS UNDER: HOWEVER, I WOULD LIKE TO MENTION VERY CATEGORICALLY THAT IF IN FUTURE, THE ENFORCEMENT DIRECTORATE OR FEM AUTHORITIES OR A NY OTHER AUTHORITIES REGULATING THE REMITTANCE OF MONEY FROM INDIA GIVES ANY CONCLUSIVE FINDING AS REGARD TO MAKING OF THE IMPUG NED HAWALA TRANSACTION BY THE APPELLANT, THEN THE A.O. WOULD B E FREE TO TAKE NECESSARY ACTION IN ACCORDANCE WITH THE PROVISION O F LAW. IN THE RESULT, THE APPEAL OF THE DEPARTMENT ON THIS ISSUE IS DISMISSED. NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 107 DEPARTMENTAL GROUND NOS.5 & 5.1 THE REVENUE HAS TAKEN THIS GROUND OF APPEAL AGAINST THE ACTION OF THE LD. CIT(A) IN DELETING THE ADDITION OF RS.2,09,66,099/- MADE B Y THE AO ON ACCOUNT OF REAL ESTATE TRADING IN DUBAI. THE BRIEF FACTS RELATING TO THE GROUNDS AS STATED B Y THE AO IN THE BODY OF THE ASSESSMENT ORDER ARE THAT CERTAIN LOOSE PAPERS OF L PS-33 WERE SEIZED FROM THE PREMISES OF M/S. PHOENIX DEVCONS PVT. LTD. AND FROM SUCH LOOSE PAPERS, IT WAS FOUND THAT THE ASSESSEE WAS INVOLVED IN THE SALE AND PURC HASE OF FLATS IN DUBAI. THE AO FURTHER NOTED THAT CERTAIN FLATS OF A BUILDING KNOW N AS ZEN BUILDING WERE SOLD TO SOME UAE BASED CONCERN OF THE ASSESSEE AND IN TURN, THES E WERE SOLD TO OTHER CUSTOMERS BY SHRI NILESH AJMERA. THE AO FURTHER FROM SOME LOOSE PAPERS OF LPS-33 NOTED THAT CERTAIN SALES AND PURCHASE TRANSACTIONS HAVE TAKEN PLACE BETWEEN OVERSEAS COMPANIES AS PER AGREEMENTS ENTERED INTO ON 29 TH JULY, 2007. AS PER THESE AGREEMENTS, THE CONSTRUCTION OF THE FLATS WAS SUPPOSED TO BE COMPLE TED BY JULY, 2008 BY A COMPANY NAMED AS M/S. WEALTH CARE INVESTMENTS LTD. THE AO A LSO NOTED THAT THE ASSESSEE WAS HOLDING 100% SHARES IN THE VARIOUS OVERSEAS CONCERN S. THE AO ALSO NOTED THAT THE ASSESSEE AND HIS WIFE HAD COMPLETELY DENIED HAVING ANY PROPERTY IN DUBIA AND ON THE BASIS OF SUCH DENIAL, THE AO FORMED THE BELIEF THAT THE FLATS IN THE BUILDING WERE SOLD TO SOME OTHER CONCERNS. THE AO PRESUMED THAT THE ASSES SEE MUST HAVE SOLD THE APARTMENTS IN ABOVE BUILDING DURING THE RELEVANT PR EVIOUS YEAR FOR AED 70,30,045 AND THEREAFTER ESTIMATING THE MARGIN OF 20% OF THE PURC HASE VALUE I.E. AT AED 14,06,009 MADE AN ADDITION OF RS.1,54,66,099/- IN THE ASSESSE ES INCOME ON ACCOUNT OF SALE OF FLATS IN THE ABOVE SAID BUILDING. THE AO FURTHER FO UND THAT CERTAIN FLATS IN THE ABOVE NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 108 BUILDING WERE SOLD TO SOME M/S. SIR HOLDINGS LTD. B Y WEALTHCARE INVESTMENTS LTD., BVI AND ACCORDING TO THE AO, FROM SUCH DEAL, THE SELLER COMPANY AND THE ASSESSEE MIGHT HAVE GOT HANDSOME PROFIT OF AED 5 MILLION. THE AO, ALSO ESTIMATED AN INCOME OF RS.55,00,000/- OF THE ASSESSEE ON THIS DEAL. FINAL LY, THE AO MADE TOTAL ADDITION OF RS.2,09,66,099/- IN THE ASSESSEES INCOME FROM REAL ESTATE TRADING IN DUBAI. THE RELEVANT FINDINGS OF THE ASSESSING OFFICER ARE RECO RDED AT PARA 8.1 TO PARA 8.10 FROM PAGE NO. 35 TO 40 OF THE ASSESSMENT ORDER. THE LD. CIT(A), AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE, DELETED THE ADDITION OF RS.2,09,66,099/- BY GIVING HIS FINDINGS AT PARA 13.4 OF HIS ORDER. FINDINGS ARE REPRODUCED HEREUNDER: 13.4 I HAVE CONSIDERED THE AOS ORDER AS WELL AS THE APP ELLANTS A/R SUBMISSION AND ALSO VARIOUS DOCUMENTS PLACED ON REC ORD. CONSIDERING THE FACTUAL POSITION OF THE CASE, I FIND NO MERIT I N THE AOS ACTION IN MAKING THE IMPUGNED ADDITION IN THE APPELLANTS INCOME. IN MY CONSIDERED VIEW, WHEN THE AO HIMSELF HAS GIVEN A FINDING THAT THE SA LES AND PURCHASE TRANSACTIONS WERE TAKEN BETWEEN SOME OVERSEAS CONCE RNS WHICH ARE NOT RESIDENT IN INDIA, HOW ANY GAIN FROM SUCH TRANSACTI ONS CAN BE ATTRIBUTABLE OR LEVELED AS INCOME OF THE APPELLANT ESPECIALLY IN A CIRCUMSTANCE WHEN THE TRANSACTION INVOLVES TRANSFER OF IMMOVABLE PROP ERTIES SITUATED OUT OF INDIA WITHOUT ANY NEXUS WITH ANY PERSON IN INDIA. I FURTHER FIND THAT THE AO HAS EVEN MADE A WILD GUESS WORK WITHOUT ANY COGENT BASIS AS REGARD TO EARNING OF INCOME IN THE SAID TRANSACTIONS. NOWHERE THE A.O. HAS NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 109 ESTABLISHED THE RECEIPT OF ANY SUCH MONEY/INCOME IN THE HANDS OF THE APPELLANT FROM SUCH TRANSACTION. THE ENTIRE DISCUSS ION MADE BY A.O. IN PARA-8 OF THE ORDER MERELY REVEALS TRANSACTION OF O VERSEAS COMPANIES AS DETAILED BY THE A.O. IN THE ASSESSMENT ORDER. IN SU CH CIRCUMSTANCES, THE ADDITIONS MERELY ON THE BASIS OF SUSPICION AND WITH OUT ESTABLISHING ANY NEXUS OF THE APPELLANT IN THE TRANSACTIONS IN HIS I NDIVIDUAL CAPACITY, I FIND NO SUBSTANCE IN THE AOS ACTION. ACCORDINGLY, THE A DDITION OF RS.2,09,66,099/- MADE BY THE AO IS HEREBY DELETED. THUS, THIS GROUND OF APPEAL IS ALLOWED. THE LD. AR HAS MADE ORAL SUBMISSION AS WELL AS WRIT TEN SUBMISSION AS UNDER: MERELY ON THE BASIS OF GUESS WORK AND PRESUMPTION WITHOUT HAVING ANY CORROBORATIVE EVIDENCE ON RECORD, NO ADDITION CAN B E MADE. IT SHALL BE OBSERVED THAT THE AO, IN HIS ORDER, HAS MENTIONED C ARRYING OUT PROPERTY TRANSACTIONS BY SOME NON-RESIDENT OVERSEAS COMPANIE S BUT EVEN IF SUCH FINDING IS TAKEN TO BE CORRECT, THE INCOME FROM SUC H TRANSACTIONS CANNOT BE ADDED TO THE INCOME OF THE ASSESSEE. IT SHALL BE AP PRECIATED THAT DURING THE COURSE OF THE HEARING, THE LEARNED DRS COULD NO T MAKE REFERENCE OF ANY LOOSE PAPER OR DOCUMENT OR ANY OTHER MATERIAL O N THE BASIS OF WHICH THE ADDITION MADE BY THE AO COULD BE SAID TO BE JUS TIFIED. MERELY BECAUSE AT SOME POINT OF TIME THE ASSESSEE WAS NON-RESIDENT , IT CANNOT BE PRESUMED, WITHOUT HAVING ANY MATERIAL ON RECORD, TH AT DURING THE PREVIOUS YEAR UNDER CONSIDERATION TOO THE ASSESSEE CARRIED O UT PROPERTY TRANSACTIONS ABROAD. IT MAY BE OBSERVED THAT THE AS SESSEE HAS SHOWN NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 110 CARRYING OUT PROPERTY TRANSACTIONS IN INDIA AND HAS SHOWN THE INCOME FROM SUCH TRANSACTIONS IN HIS RETURN OF INCOME FILED POS T-SEARCH. IN NUTSHELL, THE PRESUMPTION OF THE AO AS REGARD CARRYING OUT PROPER TY TRANSACTIONS BY THE ASSESSEE ABROAD AND DERIVING OF INCOME FROM SUCH TR ANSACTION, WITHOUT ANY SINGLE DOCUMENTARY EVIDENCE, IS BASELESS AND AS SUCH, IT WAS RIGHTLY DELETED BY THE CIT(A). ACCORDINGLY, THE GROUNDS NO. 5 AND 5.1 OF THE DEPARTMENT DESERVE TO BE DISMISSED. LD. DR HAS RELIED ON THE ORDER OF THE AO. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PAR TIES AND HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND FROM THE LD. CIT(A)S ORDER THAT AO HAS HELD THAT SALES AND PURCHASES TRANSACTIONS WERE TAKEN BETWEEN SOME OVERSEAS CONCERNS WHICH ARE NOT RESIDENTS OF INDIA. WE FIND FROM THE ASSESS MENT ORDER AND DOCUMENTS SEIZED AT LOOSE PAPERS LPS-33 WHICH SHOWS THAT SOME FLATS IN DUBAI HAVE BEEN SOLD BY THE WEALTHCARE INVESTMENT LTD. SIMILARLY, ON PAGE 137, 138, 139, 140 & 141 AND 142, THE WEALTHCARE INVESTMENT HAS SOLD APARTMENT NOS.603, 5 03, 803, 404, 402, 605, 401. THE AO HAS NOT BROUGHT ANY EVIDENCE TO SHOW THAT ASSESS EE IS CONNECTED WITH WEALTHCARE INVESTMENT LTD. THE ASSESSEE, DURING THE COURSE OF SEARCH, HAS CATEGORICALLY DENIED THAT HE AND HIS WIFE HAS ANY BUSINESS CONNECTION IN DUBAI. THE AO HAS NOT MADE ANY INQUIRY THAT ASSESSEE HAD ANY INTEREST IN WEALTHCAR E INVESTMENT LTD. THEREFORE, WE ARE OF THE VIEW THAT NO ADDITION CAN BE MADE WITHOUT BR INGING THE EVIDENCE ON RECORD. MOREOVER, THE ASSESSEE IS ASSESSED TO TAX IN INDIA AND HE HAS NOT SHOWN ANY INCOME FROM OUTSIDE INDIA. THEREFORE, WE ARE OF THE VIEW T HAT UNLESS AND UNTIL, THE DEPARTMENT NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 111 BRINGS THE CONCRETE EVIDENCE THAT ASSESSEE HAS ANY INTEREST IN WEALTHCARE INVESTMENT LTD., NO ADDITION CAN BE MADE IN THE HANDS OF THE A SSESSEE. IN THE RESULT, THE DEPARTMENTAL APPEAL ON THIS ISSUE IS DISMISSED. DEPARTMENTAL GROUND NO.6 THIS GROUND OF APPEAL IS GENERAL IN NATURE AND, THE REFORE, NO SEPARATE ADJUDICATION IS REQUIRED. ASSESSEES APPEAL NO. : 538/IND/2013 A.Y. 2010-11 GROUNDS OF APPEAL READ AS UNDER: 1. THAT, THE LEARNED CIT(A) GROSSLY ERRED, BOTH ON FACTS AND IN LAW, IN CONFIRMING ADDITION OF RS.1,34,66,000/-, MADE BY THE LEARNED A O, IN THE APPELLANTS INCOME, ON AD-HOC BASIS, ON ACCOUNT OF ALLEGED PROFIT ON SA LE OF BHOPAL LAND, MERELY ON GUESSWORK, SURMISES AND CONJECTURES WITHOUT HAVING ANY COGENT MATERIAL ON RECORD. 2. THAT, THE LEARNED CIT(A) GROSSLY ERRED, BOTH ON FACTS AND IN LAW, IN CONFIRMING THE ACTION OF THE LEARNED AO, IN MAKING THE ADDITION OF RS.50,00,000/-, IN THE APPELLANTS INCOME, ON ACCOUNT OF ALLEGED UNEXPLAIN ED PAYMENT MADE BY THE APPELLANT TO SHRI CHIRAG SHAH. DEPARTMENTALS APPEAL NO. : 563/IND/2013 A.Y. 2010- 11 GROUNDS OF APPEAL READ AS UNDER: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE L D. CIT(A) ERRED IN DECIDING THE APPEAL AGAINST THE PRINCIPLES OF NATURAL JUSTICE, W ITHOUT AFFORDING ANY OPPORTUNITY TO THE AO OR REMANDING IT BACK IN VIOLATION OF THE DEPARTM ENTAL INSTRUCTION THAT IN SEARCH ASSESSMENTS APPEAL ORDER BE PASSED EITHER BASED ON REMAND REPORT OR AFTER HEARING THE AO. 2. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN HOLDING THAT ADDITION U/S. 69D WAS NOT JUSTIFIED BECAUSE AO HAS NOT ESTABLISHED THAT THE APPELLANT HAS BORROWED SUCH LOANS ON HUNDI AND NO H UNDI, EITHER LIVE OR DISCHARGED, WAS FOUND AND SEIZED FROM THE BUSINESS PREMISES OF THE GROUP AND DELETED THE ADDITION OF RS. 1,45,00,000/- RS. 4,00,000/- AND 1,00,00,000 /- WHEREAS, DOCUMENTS SEIZED NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 112 CLEARLY MENTIONED OF THE HUNDI DEALINGS AND THE ASS ESSEE FAILED TO PROVE BEFORE THE AO OTHERWISE WITH EVIDENCES. 2.1 WHILE HOLDING SO THE LD. CIT(A) FAILED TO APPRE CIATE THAT THE TRANSACTIONS IN HUNDIES WERE CONFIRMED IN THE STATEMENTS OF NOT ONL Y SHRI NILESH AJMERA, THE ASSESSEE, BUT HIS EMPLOYEE SH. PANKAJ JOSHI ALSO AND SH. NILE SH AJMERA ADMITTED AND EVEN DISCLOSED INCOME OF RS. 1.45 CRORE AS BEING RECEIVE D FROM ONE SH. MANISH KEDIA, HUNDI PROVIDER, AS HIS UNDISCLOSED INCOME IN A.Y. 2010-11 . 2.2 WHILE HOLDING SO THE LD. CIT(A) FAILED TO CONSI DER THAT VARIOUS LOOSE PAPERS FOUND DURING THE COURSE OF SEARCH HAD DETAILS OF HUNDI TR ANSACTIONS OF MANISH KEDIA, SUSHIL GOLECHA & PAWAN CHHABRA IT HAD NARRATION OF ENTRIES LIKE NAME, START DATE, AMOUNT, DURATION, FIRST RENEW DATE, END DATE, INTEREST, DAL ALI ETC. WHICH ESTABLISHED THE BORROWING AND REPAYMENT ON HUNDIES BEING MADE IN CASH AS POIN TED OUT BY THE AO IN THE ASSESSMENT ORDER. 2.3 WHILE HOLDING SO THE LD. CIT(A) FURTHER ERRED I N HOLDING THAT THE SEIZED DAIRIES CANNOT BE TREATED AS BOOKS OF ACCOUNTS WHEREAS IN V IEW OF THE TRANSACTIONS RECORDED THEREIN BEING UNEXPLAINED THE SAID MATERIAL/DAIRIES FELL IN THE INCLUSIVE DEFINITION OF BOOKS OF ACCOUNTS AS DEFINED U/S. 2(12A) OF THE I.T . ACT. 3. IT IS THEREFORE, PRAYED THAT THE ORDER OF THE CI T(A) MAY BE SET ASIDE AND THE ORDER OF THE AO MAY PLEASE BE RESTORED. ASSESSEES GROUND NO. 1 THIS GROUND OF APPEAL PERTAIN TO THE ADDITION OF RS .1,34,66,000/- MADE IN THE HANDS OF THE ASSESSEE ON AD-HOC BASIS, ON ACCOUNT O F ALLEGED PROFIT ON SALE OF BHOPAL LAND. THE BRIEF FACTS RELATING TO THE GROUND, AS NOTED BY THE AO IN THE IMPUGNED ORDER, ARE THAT DURING THE COURSE OF SEARCH PROCEEDINGS, C ERTAIN VIKRAY ANUBANDH PATRA WERE SEIZED FROM THE PREMISES OF M/S. PHOENIX DEVCONS PV T. LTD. AND FROM SUCH VIKRAY ANUBANDH PATRA IT GOT ESTABLISHED THAT THE ASSESSE E HAD MADE AN UNEXPLAINED INVESTMENT IN PURCHASE OF CERTAIN LAND AT VILLAGE K URANA AND VILLAGE MUBARAKPUR, TEH. HUZUR, DISTT. BHOPAL DURING THE PREVIOUS YEAR RELE VANT TO A.Y. 2008-09. THE AO NOTED THAT THE ACTUAL PURCHASE CONSIDERATION OF THE LAND WAS TO THE EXTENT OF RS.851.58 LACS NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 113 ONLY BUT THE PROPERTY WAS REGISTERED FOR RS.87.50 L ACS ONLY IN THE NAME OF M/S. PHOENIX LEISURE & LIFESTYLE PVT. LTD.. THE AO FURTHER NOTED THAT SUCH LAND WAS SOLD BY M/S. PHOENIX LEISURE & LIFESTYLE PVT. LTD. BY SHOWING LE SS APPARENT CONSIDERATION IN THE REGISTERED SALE DEED AND THUS ONLY PROFIT OF A SUM OF RS.13,76,000/- WAS OFFERED BY THE AFORESAID COMPANY IN ITS RETURN OF INCOME FOR THE F INANCIAL YEAR 2009-10 RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION. HOWEVER, AS PE R AO, NO REGISTERED SALE DEED WAS FURNISHED BY THE AFORESAID COMPANY, HENCE AO ES TIMATED SALES CONSIDERATION OF THIS PROPERTY AT RS.1000 LACS ON THE BASIS OF MULTI FOLD RISE IN GUIDELINE VALUE OF THE PROPERTY. ACCORDINGLY, THE AO DETERMINED THE PROFIT ON SALE OF SUBJECT LAND AT RS.1,48,42,000/- [RS.10,00,00,000 (-) RS.8,51,58,00 0] AND OUT OF THIS ESTIMATED PROFIT, AFTER GIVING CREDIT FOR PROFIT OF RS.13,76,000/- SH OWN BY THE AFORESAID COMPANY IN ITS RETURN OF INCOME, MADE AN ADDITION OF RS.1,34,66,00 0/- [RS.1,48,42,000 (-) RS.13,76,000] IN THE ASSESSEES INCOME ON SUBSTANTI VE BASIS, WITH A CORRESPONDING ADDITION ON PROTECTIVE BASIS IN THE HANDS OF M/S. P HOENIX LEISURE & LIFESTYLE PVT. LTD.. THE RELEVANT FINDINGS OF THE ASSESSING OFFICER ARE RECORDED AT PARA 7.1 TO PARA 7.14 FROM PAGE NO. 6 TO 48 OF THE ASSESSMENT ORDER. THE LD. CIT(A), AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE, CONFIRMED THE ADDITION OF RS.1,34,66,000/-. THE LD. AR HAS MADE ORAL SUBMISSION AS WELL AS WRIT TEN SUBMISSION AS UNDER: THE SUBJECT PROPERTY AT BHOPAL WAS OWNED NOT BY TH E ASSESSEE BUT BY A COMPANY NAMED AND TITLED AS M/S. PHOENIX LEISURE & LIFESTYLE PVT. LTD. IT SHALL BE APPRECIATED THAT DURING THE COURSE OF ENTI RE SEARCH NOT A SINGLE DOCUMENT OR ANY OTHER EVIDENCE WAS FOUND FROM ANY O F THE PREMISES NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 114 WHICH COULD HAVE SUGGESTED THE SALES OF THE PROPERT Y BY THE ASSESSEE FOR A CONSIDERATION OF RS.10,00,00,000/- AS PRESUMED BY THE AO. THUS, IN OTHER WORDS, THE ENTIRE ADDITIONS HAS BEEN MADE BY THE LEARNED AO ON THE BASIS OF GUESS WORK AND CONJECTURES WITHOUT HAVING ANY SINGLE EVIDENCE OR MATERIAL ON RECORD. WITHOUT PREJUDICE TO THE ABOVE, SINCE IT WAS M/S. P HOENIX LEISURE & LIFESTYLE PVT. LTD., WHO WAS THE REAL AND REGISTERE D OWNER OF THE SUBJECT PROPERTY, ANY GAIN OR PROFIT ON THE TRANSFER OF SUC H PROPERTY IS LIABLE TO BE ASSESSED IN THE HANDS OF THE ABOVE NAMED COMPANY ON LY AND IN ANY CASE, NO ADDITION CAN BE MADE IN THE HANDS OF THE A SSESSEE. LD. DR HAS RELIED ON THE ORDER OF THE AO. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PAR TIES AND HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE APPELLANTS CASE, WE FIND THAT THE PURCHASE PRICE OF THE SAID L AND HAS BEEN CORRECTLY TAKEN BY THE AO AT RS.851.58 LACS BASED UPON VARIOUS SALES AGREE MENTS SEIZED DURING THE COURSE OF SEARCH AS WELL AS ON THE BASIS OF POST-SEARCH ENQUI RY. WE FIND THAT THE SUBJECT LAND WAS RECORDED BY M/S. PHOENIX LEISURE & LIFESTYLE PVT. L TD. ONLY AT A VALUE OF RS.87.50 LACS AND SINCE ON SALE OF SUCH LAND THE COMPANY HAS SHOW N PROFIT OF RS.13.76 LACS ONLY, IT CAN BE INFERRED THAT THE SALE DEED IN RESPECT OF TH E SALE OF SAID LAND WAS EXECUTED BY SHOWING SALES CONSIDERATION OF RS.101.26 LACS ONLY. IN OUR CONSIDERED VIEW, IT IS HIGHLY IMPROBABLE THAT ANY LAND HAVING THE PURCHASE VALUE OF RS.851.58 LACS IN F.Y. 2007-08 WOULD BE SOLD BY ANYONE FOR A MEAGER SUM OF RS.110. 50 LACS ONLY AS DETAILED BY A.O. NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 115 IN PARA 7.13.1 OF THE ORDER. SUCH ANOMALY CREATES A SUSPICION AS REGARD TO THE SALES CONSIDERATION SHOWN BY THE ABOVE NAMED COMPANY. THE REFORE, THERE MIGHT HAVE TAKEN PLACE SOME TRANSACTION OF RECEIPT OF ON-MONEY ON SA LES OF THE LAND AND SINCE, IT WAS ONLY THE ASSESSEE, WHO HAD PAID THE ON-MONEY AT THE TIME OF THE PURCHASE OF THE LAND, AS A NATURAL COROLLARY, THE PRESUMPTION HAS TO BE M ADE THAT SUCH ON-MONEY WAS RECEIVED BY THE ASSESSEE ONLY. UNDISPUTEDLY, IN TH E INSTANT CASE, THROUGH THE ESTIMATION OF THE AO AS REGARD TO THE SALES CONSIDE RATION OF RS.1000 LACS IS NOT BASED UPON ANY MATERIAL, BUT TAKING NOTE OF ESCALATION OF PROPERTY PRICES. EVEN WE FIND THAT THE APPELLANT HAS NOT GIVEN ANY BASIS FOR DETERMINING T HE SALE PRICE AT RS.110.50 LACS ONLY. IN VIEW OF THE SAME, AS THE ASSESSEE HAS ACTIVELY P ARTICIPATED AND MADE THE PAYMENT OF SALE CONSIDERATION OF RS.851.58 LACS IN THE PURCHAS E OF BHOPAL LAND. IN VIEW OF THE SAME AND ALSO ON THE BASIS OF REASONS ASSIGNED BY A .O. GIVEN IN PARA-7.13.1 TO 7.14 OF THE ORDER FOR SUCH ESTIMATION FOR DETERMINING THE P ROFIT OUT OF SALE OF BHOPAL LAND IS CORRECT AND JUSTIFIED. ACCORDINGLY THE ADDITION SO MADE BY A.O. IS HELD TO BE JUSTIFIED AND CORRECT. ACCORDINGLY THE ADDITION SO MADE BY THE A. O. IS CONFIRMED. THE APPEAL OF THE ASSESSEE ON THIS ISSUE IS DISMISSED. HOWEVER, WE AR E IN AGREEMENT WITH THE CONTENTION OF THE LD. AR OF THE ASSESSEE THAT IF ACTION OF THE LOWER AUTHORITIES IN MAKING THE ADDITION IS CONFIRMED, THE ASSESSEE BE GIVEN CREDIT FOR AVAI LABILITY OF CASH THROUGH RECEIPT OF ON- MONEY ON SALE OF LAND FOR EXPLAINING HIS OTHER INVE STMENTS/PAYMENTS. ASSESSEES GROUND NO. 2 THIS GROUND OF APPEAL PERTAINS TO THE ADDITION OF R S.50,00,000/- MADE IN THE HANDS OF THE ASSESSEE ON ACCOUNT OF UNEXPLAINED PAY MENT ALLEGEDLY MADE BY THE ASSESSEE TO SHRI CHIRAG SHAH. NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 116 THE BRIEF FACTS RELATING TO THE GROUND ARE THAT THE AO, ON THE BASIS OF CERTAIN LOOSE PAPERS SEIZED AND INVENTORISED AS LPS-A/50 AT PAGE NO. 1, 24 & 35 FROM THE PREMISES OF M/S. PHOENIX DEVCONS PVT. LTD., IN WHIC H THE ASSESSEE IS ONE OF THE DIRECTORS, FOUND THAT SOME VOUCHERS CONTAIN DETAILS OF PAYMENTS HAVING BEEN MADE BY THE ASSESSEE TO SHRI CHIRAG SHAH AGAINST THE PROJEC T SATELLITE CITY. SUCH PROJECT, ACCORDING TO THE AO IS BEING DEVELOPED BY M/S. SATE LLITE CITY HOMES PVT. LTD. IN WHICH SHRI CHIRAG SHAH IS A 50% SHAREHOLDER. THE AO ASKED THE ASSESSEE TO FURNISH EXPLANATION IN RESPECT OF THE SUBJECT PAYMENTS BUT THE AO NOTED THAT IN ABSENCE OF ANY EXPLANATION FROM THE ASSESSEE IN THIS REGARD, THE S UBJECT PAYMENTS AGGREGATING TO RS.50,00,000/- HAVE TO BE REGARDED AS UNEXPLAINED. ACCORDINGLY, THE AO MADE THE IMPUGNED ADDITION. THE RELEVANT FINDINGS OF THE ASS ESSING OFFICER ARE RECORDED AT PARA 9.1 FROM PAGE NO. 50 TO 51 OF THE ASSESSMENT ORDER. MATTER CARRIED TO LD. CIT(A) AND THE LD. CIT(A), AF TER CONSIDERING THE SUBMISSION OF THE ASSESSEE, CONFIRMED THE ADDITION OF RS.50,00 ,000/-. THE LD. AR HAS MADE ORAL SUBMISSION AS WELL AS WRIT TEN SUBMISSION AS UNDER: IT IS SUBMITTED THAT THE AO HAS MADE THE IMPUGNED ADDITION OR RS.50,00,000/- ON THE ALLEGATION OF PAYMENT OF SUCH `SUM BY THE APPELLANT TO SHRI CHIRAG SHAH AGAINST SOME PARTNERSHIP IN A S ATELLITE CITY PROJECT. NOW IT IS SUBMITTED THAT IN THE INSTANT CASE THE AO HAS NOT INVOKED THE PROVISIONS OF SECTION 69/69A/69C AND IN ABSENCE OF INVOCATION OF SUCH PROVISIONS, ANY PAYMENT OR INVESTMENT, ALLEGEDLY MA DE BY AN ASSESSEE, CANNOT BE REGARDED TO BE A TAXABLE INCOME OF SUCH A SSESSEE. IT IS FURTHER SUBMITTED THAT THE AO HAS MADE THE SU BJECT ADDITION MERELY ON THE BASIS OF SOME VOUCHERS WHICH HAVE NEITHER BEEN PREPARED BY THE APPELLANT HIMSELF NOR BY ANY ONE ELSE ON THE INSTRU CTION OF THE APPELLANT. NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 117 IT IS FURTHER SUBMITTED THAT THE APPELLANT HAS NOT PAID IMPUGNED SUM OF RS.50,00,000/- TO SHRI CHIRAG SHAH AS ALLEGED BY TH E AO ON THE BASIS OF LOOSE PAPER NO. 1, 24 & 35 OF LPS-A/50. THE FACT RE MAINED THAT SUCH PAYMENTS WERE MADE BY PHOENIX DEVCONS PVT. LTD. FOR MAKING THEIR INVESTMENT, AS A JOINT VENTURE PARTNER, WITH THE PR OMOTERS OF A COLONY TITLED AS SATELLITE CITY. HOWEVER, FOR SOME REASON THE D EAL COULD NOT BE MATERIALIZED AND SHRI CHIRAG SHAH RETURNED THE ENTI RE AMOUNT TO M/S. PHOENIX DEVCONS PVT. LTD. IN THE VERY SAME YEAR. IN OTHER WORDS, THE APPELLANT WAS NOT IN ANYWAY CONNECTED WITH THE SUBJ ECT TRANSACTION. WITHOUT PREJUDICE TO THE ABOVE, IT IS SUBMITTED, P RESUMING BUT NOT ADMITTING, THAT THE APPELLANT MADE THE ALLEGED PAYM ENT OF RS.50,00,000/- TO SHRI CHIRAG SHAH, EVEN THEN IN SUCH A SITUATION IT IS SUBMITTED THAT DURING THE RELEVANT PREVIOUS YEAR THE APPELLANT HAS EARNED AN INCOME OF RS.1,45,15,000/- WHICH INCLUDES AN ADDITIONAL INCOM E OF RS.1,45,00,000/- AND, THEREFORE, EVEN IF FOR THE SAKE OF ARGUMENT IT IS PRESUMED THAT THE APPELLANT MADE THE ALLEGED INVESTMENT, THE SAME BEI NG OUT OF THE ADDITIONAL INCOME OF RS.1,45,00,000/-, NO FURTHER A DDITION ON THIS COUNT WAS WARRANTED. IT IS SUBMITTED THAT DURING THE COUR SE OF ASSESSMENT PROCEEDINGS, THE APPELLANT HAD CLAIMED UTILIZATION OF THE INCOME EARNED DURING THE RELEVANT PREVIOUS YEAR AT RS.42,21,257/- ONLY, I.E. RS.2,96,000 FOR MAKING CASH DEPOSITS IN BANK, RS.5,50,000 CASH KEPT IN BANK LOCKER AND RS.33,75,257 UNEXPLAINED INVESTMENT IN JEWELLER Y. IT SHALL BE APPRECIATED BY YOUR HONOURS THAT EVEN THE LEARNED A O HAS NOT FOUND UTILIZATION OF THE INCOME OF RS.1,45,15,000/-, AS S HOWN BY THE APPELLANT IN HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION FOR ANY OTHER PURPOSES OVER AND ABOVE THE ABOVE SAID SUM OF RS.42,21,257/-. YOUR HONOURS, EVEN AFTER CONSIDERING THE ABOVE STAT ED UTILIZATION OF INCOME TO THE EXTENT OF RS.42,21,257/-, THERE REMAI NS A GAP OF RS.1,02,93,743/- [RS.1,45,15,000 RS.42,21,257] WH ICH WAS VERY MUCH AVAILABLE WITH THE APPELLANT FOR MAKING ANY INVESTM ENT INCLUDING THE ALLEGED INVESTMENT OF RS.50,00,000/-. IT SHALL BE A PPRECIATED BY YOUR HONOURS THAT UNDER THE SCHEME OF THE LAW BOTH SIDES I.E. INCOME AND UTILIZATION THEREOF CANNOT BE ASSESSED TO TAX. LD. DR HAS RELIED ON THE ORDER OF THE AO. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PAR TIES AND HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE A.O. HAS GIVEN DETAILED REASONS FOR MAKING ADDITION IN PARA-9 OF THE ORDER, WHEREIN HE HAS TAKEN NOTE OF LPS-50 WHICH WAS CONTAINING PAGE-1 TO 58. AS THE DETAILS ENUMERATED BY A.O. CLEARLY EVIDENT THAT PAYMENT NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 118 OF RS.50,00,000/- WAS MADE BY ASSESSEE, WHICH WAS D ULY VOUCHED AS DETAILED BY A.O. IN THE ORDER, HENCE BY NO CIRCUMSTANCES SUCH DULY A CKNOWLEDGED VOUCHERS CAN BE HELD TO BE WRONG. IN VIEW OF THE SAME, WE CONSIDER IT PR OPER AND APPROPRIATE TO HOLD THAT THE ADDITION MADE BY AO OF RS.50,00,000/- IS COMPLETELY JUSTIFIED AND CORRECT. ACCORDINGLY THE ADDITION SO MADE BY A.O. IS CONFIRMED. HOWEVER, WE ARE IN AGREEMENT WITH THE DIRECTION OF THE LD. CIT(A) THAT THE ASSESSEE HAS A LREADY OFFERED ADDITIONAL INCOME OF RS.1,45,00,000/- AS PER RETURN FILED U/S 153A OF TH E ACT, HENCE, WE DIRECT THE A.O. TO GIVE TELESCOPIC CREDIT OF SUCH ADDITIONAL INCOME OF FERED AGAINST THE AFORESAID ADDITION OF RS.50,00,000/-. WITH THIS OBSERVATION, THIS GROUND OF APPEAL OF ASSESSEE IS ADJUDICATED WITH THIS DIRECTION. DEPARTMENTAL GROUND NO. 1 THE REVENUE HAS TAKEN THIS GROUND OF APPEAL AGAINST THE ACTION OF THE LD. CIT(A) IN DECIDING THE APPEAL AGAINST THE PRINCIPLES OF NA TURAL JUSTICE, WITHOUT AFFORDING ANY OPPORTUNITY TO THE AO OR REMANDING IT BACK IN VIOLA TION OF THE DEPARTMENTAL INSTRUCTION THAT IN SEARCH ASSESSMENTS APPEAL ORDER BE PASSED E ITHER BASED ON REMAND REPORT OR AFTER HEARING THE AO. IT WAS SUBMITTED BEFORE US BY BOTH SIDES THAT THIS GROUND OF APPEAL IS SIMILAR TO THAT OF GROUND NO. 1 TAKEN BY THE DEPARTMENT IN ITS APPEAL FOR A.Y. 2008-09 (APPEAL NO. IT(SS)A-250/IND/2013), THEREFORE, OUR FINDING G IVEN IN SUCH APPEAL WILL ALSO BE APPLICABLE IN THE PRESENT ISSUE. THUS, BY FOLLOWING THE SAME, WE DISMISS DEPARTMENTAL APPEAL ON THIS ISSUE. DEPARTMENTAL GROUND NOS.2 TO 2.3 NILESH AJMERA (SS) 182 OF 2013 AND OTHERS 119 IT WAS SUBMITTED BEFORE US BY BOTH SIDES THAT THIS GROUND OF APPEAL IS SIMILAR TO THAT OF GROUND NOS. 2 TO 2.5 TAKEN BY THE DEPARTMEN T IN ITS APPEAL FOR A.Y. 2008-09 (APPEAL NO. IT(SS)A-250/IND/2013), THEREFORE, OUR F INDING IN SUCH APPEAL WILL ALSO BE APPLICABLE IN THE PRESENT ISSUE. THUS, BY FOLLOWING THE SAME, WE DISMISS DEPARTMENTAL APPEAL ON THIS ISSUE. DEPARTMENTAL GROUND NO.6 THIS GROUND OF APPEAL IS GENERAL IN NATURE AND, THE REFORE, NO SEPARATE ADJUDICATION IS REQUIRED. FINALLY, APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED IN TERMS AS INDICATED WHEREAS DEPARTMENTAL APPEALS ARE DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 17.5.201 6. SD/- SD/- (B.C. MEENA) (D.T. GARASIA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 17.5.2016 COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR, INDORE