DCIT, New Delhi V. Sh. Rajesh Kumar Kanodia, New Delhi

ITA 5680/DEL/2014

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5400 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 5 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-04-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2011-2012
• Appeal Filed On: 20-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARAMITA TRIPATHY
• Assessee Lawyers: VED JAIN ADV SHRI ASHISH GOEL
• Keywords: Unexplained investment; Income from undisclosed sources; Search and seizure; Document seized; Source of fund; Documents seized
• Section: 69C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F, NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER AND MS. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA NO.5680/DEL/2014 ASSESSMENT YEAR : 2011-12 DCIT, CENTRAL CIRCLE- 11, NEW DELHI. VS. RAJESH KUMAR KANODIA, C-175, PUSHPANJALI ENCLAVE, PITAMPURA, NEW DELHI. PAN : AIHPR1170A (APPELLANT) (RESPONDENT) DEPARTMENT BY : SMT. PARAMITA TRIPATHY, CIT(DR) ASSESSEE BY : SHRI VED JAIN, ADV. SHRI ASHISH GOEL, CA DATE OF HEARING : 04-01-2018 DATE OF PRONOUNCEMENT : 03-04-2018 O R D E R PER R. K. PANDA, AM : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER DATED 31.07.2014 OF CIT(A)- XXXI, NEW DELHI RELATING TO A SSESSMENT YEAR 2011-12. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS AN INDIVIDUAL AND IS THE PROPRIETOR OF M/S VIJAY JEWELLER, JAIPUR. A SEARCH AND SEIZURE ACTION U/S 132(1) WAS CONDUCTED AT THE RESIDENTIAL AS WELL AS BUSINES S PREMISES OF THE ASSESSEE AND HIS GROUP CONCERNS/COMPANIES/FAMILY MEMBERS ON 28.0 3.2011. DURING THE COURSE OF SEARCH AND SEIZURE OPERATION, IT WAS FOUN D THAT SHRI RAJESH KANODIA HAS MADE HUGE PAYMENTS TO VIJAY DIXIT GROUP. ON PE RUSAL OF THE DOCUMENTS 2 ITA NO.5680/DEL/2014 EXTRACTED FROM THE HARD DISC SEIZED DURING SEARCH, IT WAS NOTICED THAT AN AMOUNT OF RS.23,70,10,708/- HAS BEEN PAID TO VIJAY DIXIT G ROUP IN THE FORM OF CHEQUES, PAY ORDERS AND ALSO IN THE FORM OF CASH. DURING TH E COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER ASKED THE ASSESS EE TO FURNISH COMPLETE DETAILS OF PAYMENT MADE TO SHRI VIJAY DIXIT AND HIS GROUP COMPANIES ALONG WITH SOURCE OF PAYMENT AND DOCUMENTARY EVIDENCES. 3. IT WAS REPLIED THAT SINCE THE ASSESSEE IS EXTREM ELY SOCIAL PERSON, MANY PEOPLE VISIT ASSESSEES PLACE TO DISCUSS THEIR PROB LEMS. FURTHER, THE SEIZED FILES ARE MAINTAINED BY THE STAFF OF MR. VIJAY DIXIT WHO KEPT ON VISITING ASSESSEES PLACE DUE TO HIS BUSINESS RELATION WITH THE ASSESSE E. SINCE MANY TRANSACTIONS APPEARING IN THE EXTRACTED PAGES PERTAINED TO ASSES SEE AND HIS GROUP CONCERNS, THE ASSESSEE, TAKING THE MORAL RESPONSIBILITY, WANT S TO EXPLAIN THE DETAILS. IT WAS SUBMITTED THAT PAGE-1 OF THE EXTRACTED DOCUMENT NOT ES THE DETAILS OF ALL PAYMENTS MADE BY THE ASSESSEE GROUP TO VIJAY DIXIT AND HIS CONCERNS. AS PER THE NOTING ON THE SAID PAGE, THE TOTAL AMOUNT PAID BY THE ASSESSEE GROUP DURING FINANCIAL YEAR 2010-11 IS RS.13.42 CRORES. IT WAS SUBMITTED THAT AN AMOUNT OF RS.15.04 CRORES (INCLUSIVE OF INTEREST) WAS PAID TO MR. DIXIT AND HIS GROUP CONCERNS DURING FINANCIAL YEAR 2010-11, THE DETAILS OF WHICH CAN BE SUMMARIZED AS UNDER :- SUMEDHAPATHAK TO SENIOR BUILDER 4,00,18,654.00 3 ITA NO.5680/DEL/2014 TO SENIOR BUILDERS LTD. 30,04,963.00 RAJESH KUMAR TO VIJAY DIXIT 99,00,000.00 TO SENIOR BUILDER 4,58,18,701.00 TO SENIOR BUILDERS LTD. 5,16,60,133.00 TOTAL 15,04,02,451.00 (C) AS PER THE PAGE 1, TOTAL PAYMENTS MADE BY THE ASSESSEE GROUP WAS RS.13,42,76,687/- WHILE AS PER THE RECORDS OF THE A SSESSEE GROUP, AS DETAILED ABOVE, TOTAL PAYMENTS MADE WAS RS.15,04,02,451/-. A DETAI LED RECONCILIATION IS MADE IN THIS REGARD AND ENCLOSED SEPARATELY FOR YOUR KIND VERIFI CATION AND RECORD. RECONCILIATION OF AMOUNT PAID BY ASSESSEE GROUP TO VIJAY DIXIT GROUP AS PER HARD DISC SEIZED TOTAL PAYMENTS MADE BY ASSESSEE GROUP TO VIJAY DIXI T GROUP 134,276,687.00 AS PER ASSESSEES RECORD (ALREADY SUBMITTED) TOTAL PAYMENTS MADE BY ASSESSEE GROUP TO VIJAY DIXI T GROUP 150,402,451.00 LESS : AMOUNT NOT CONSIDERED IN THE SEIZED MATERIAL (3,300,000.00) ADD : WRONG AMOUNT CONSIDERED IN THE SEIZ ED MATERIAL 210,000.00 (AN AMOUNT OF RS.33,00,000/- WAS PAID BY CLASSIQUE INTERNATIONAL THROUGH BANKING CHANNEL ON BEHALF OF RAJESH KUMAR, HOWEVER SAME HAS BEEN SHOWN AS ONLY RS.2,10, 000/- IN THE SEIZED MATERIAL WITH REMARKS AS OUT OF 33 LACS ) ADD : AMOUNT MENTIONED IN THE SEIZED MATERIAL BUT N OT RELATED TO THE ASSESSEE (RATHER IT IS THE BANK TRANSACTIONS BETWEEN VIJAY DIXIT AND SENIOR BUILDERS LIMITED) AND HAVING NO CO NNECTION WITH THE ASSESSEE GROUP 1,248,356.00 LESS : INTEREST RECEIVABLE AGAINST THE ADVANCES MAD E (ALREADY INCLUDED IN RS.15.04 CRORES) FROM SUMEDHAPATHAK TO SENIOR BUILDERS (514,908.00) FROM RAJESH KUMAR TO SENIOR BUILDERS (7,304,136.00 ) FROM RAJESH KUMAR TO SENIOR BUILDERS LIMITED (6,45 6,115.00) 134,285,348.00 4. IT WAS FURTHER EXPLAINED THAT ALL THE PAYMENTS W ERE MADE THROUGH DISCLOSED SOURCES AND DULY SHOWN IN THE RESPECTIVE RECORDS. THE ASSESSEE ONCE AGAIN FILED THE STATEMENT/DETAILS OF INVESTMENTS MA DE BY ASSESSEE GROUP ALONG 4 ITA NO.5680/DEL/2014 WITH RESPECTIVE DATES OF PAYMENTS AND COPIES OF REL EVANT BANK STATEMENTS. THE ASSESSEE ALSO FILED THE BANK STATEMENT OF THE GROUP SHOWING PAYMENT TO SHRI VIJAY DIXIT AND SENIOR BUILDERS AMOUNTING TO RS.13, 42,76,687/- AND AN AMOUNT OF RS.1,42,75,159/- WAS EXPLAINED TO BE PAID AS INT EREST. HOWEVER, THE ASSESSEE DID NOT ACCEPT THE FOLLOWING ENTRIES APPEARING IN T HE ABOVE DOCUMENTS :- A. A SUM OF RS.12,48,356/- TRANSACTION BETWEEN SH. VIJAY DIXIT & SENIOR BUILDERS PRIVATE LIMITED. B. PAYMENT MADE AFTER 25.12.2010 AMOUNTING TO RS.6 ,12,37,817/-. C. OVER DRAFT BY SENIOR BUILDERS LIMITED ACCOUNT R S.85,00,489/-. D. INTEREST AMOUNTING TO RS.2,70,29,795/-. E. PAYMENT MADE DURING 28.12.2010 TO 07.03.2011, R S.3,11,10,600/-. F. PAY ORDER RS.47,82,037/-, (RS.1552000 + RS.3230 037/-). G. RS.75000/- AND RS.15000/- DATED 15.07.2010. H. CASH RS.200000/- DATED 02.07.2010. 5. SUBSEQUENTLY, THE ASSESSEE MADE FURTHER SUBMISSI ON EXPLAINING EACH AND EVERY ENTRY. HOWEVER, THE ASSESSING OFFICER WAS NO T SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSEE. ACCORDING TO HI M, A PERUSAL OF THE EXTRACTED DOCUMENTS FROM THE HARD DISK SHOWS THAT AS PER PAGE NO.1 THE TOTAL PAYMENTS MADE BY SHRI RAJESH KUMAR KANODIA AND SHRI RAJAT KU MAR KANODIA TO VIJAY DIXIT AMOUNTED TO RS.13,42,76,687/-. AS PER PAGE N O.4 OF THE EXTRACTED DOCUMENTS THE TOTAL PRINCIPAL AMOUNT OF RS.10,43,49 ,470/- WHEREIN PAYMENT MADE BEFORE 25.12.2010 APPEARING ON PAGE NO.1 AMOUN TING TO RS.10,43,49,470/- I.E. AN AMOUNT OF RS.2,00,000/- P AID IN CASH NOT APPEARING ON PAGE NO.1. THE ASSESSING OFFICER NOTED THAT THE BA LANCE AMOUNT OF PAGE 1, OF 5 ITA NO.5680/DEL/2014 RS.3,01,27,217/- (I.E. RS13,42,76,687/- (-) RS.10,4 1,49,470/-) PAID THROUGH CHEQUES AFTER 25/12/2010 APPEAR TO BE INCLUDED IN F IGURE OF RS.6,12,37,817/- MENTIONED AS CASH & BANK PAID AFTER 25/12/2010 ON P AGE 4. AFTER EXCLUDING THIS PAYMENT OF RS.3,01,27,217/- MADE THROUGH CHEQU E THE BALANCE AMOUNT COMES TO RS.3,11,10,600/- (I.E. RS.6,12,37,817/- (- ) RS.3,01,27,217/-) AND THIS BALANCE IS SAME AS APPEARING ON PAGE NO.5. HE OBSE RVED THAT THE CASH PAYMENT OF RS.3,11,10,600/- APPEARING ON PAGE 5 ARE THE SAM E BALANCING FIGURE OF PAGE 4 AS WORKED OUT ABOVE. FURTHER, IT IS CLEAR THAT THE CASH PAYMENT OF RS.3,11,10,600/- HAS BEEN MADE BY SH. RAJESH KANODI A TO VIJAY DIXIT GROUP. FURTHER THE NOMENCLATURE OF HEADINGS USED ON PAGE 5 AND PAGE 8 WHICH ARE ALL CASH PAYMENTS EITHER BEFORE 25/12/2010 IS SAME OR T HESE FIGURES ARE NOT INCLUDED IN PAGE 1 WHICH ARE ALL CHEQUE PAYMENTS. 6. THE ASSESSING OFFICER, THEREFORE, CAME TO THE CO NCLUSION THAT (I) THE CASH PAID IN THE WHOLE TRANSACTIONS IS AT RS.3,11,10,600 /- + RS.200000/- BY KANODIA GROUP, (II) THE TOTAL INTEREST RECEIVED BY KANODIA GROUP (RS.2.70 CRORES) FOR THESE PAYMENTS AS WORKED IN PAGE 4 IS TAXABLE AND W ILL BE ACCORDINGLY TREATED IN RESPECTIVE HANDS, (III) THE BANK OVERDRAFT OF RS.85 ,00,489/- PLUS INTEREST AMOUNTING TO RS.8,51,748/- TOTAL AMOUNTING TO RS.93 52237/- AND (IV) THE INTEREST RECEIVED BY KANODIA GROUP FOR REMAINING AM OUNTS WILL BE EXTRAPOLATED FOR RELEVANT ASSESSMENT YEARS. 6 ITA NO.5680/DEL/2014 7. THE ASSESSING OFFICER ANALYZED THE PROVISIONS OF SECTION 132(4A). REJECTING VARIOUS EXPLANATIONS GIVEN BY THE ASSESSE E HE MADE AN ADDITION OF RS.3,98,11,089/- ON ACCOUNT OF UNEXPLAINED PAYMENT AND RS.1,60,97,818/- ON ACCOUNT OF UNDISCLOSED INTEREST ON THE ADVANCE OF R S.10,73,78,834/- BY OBSERVING AS UNDER :- KEEPING IN VIEW THE FACTS OF THE CASE AND THE FACT THAT NO CONVINCING DETAILS AND EVIDENCE ARE FILED BY THE ASSESSEE, THE FOLLOWING U NACCOUNTED PAYMENTS MADE TO SH. VIJAY DIXIT GROUP AND INTEREST THEREON RECEIVED ON ALL THE ADVANCES IS WORKED AS UNDER :- I) THE CASH PAID IN THE WHOLE TRANSACTIONS IS AT RS.31110600/- + RS.200000/- BY KANODIA GROUP INTEREST ON RS.31310600/- @ 3.334% AS MENTIONED ON PAGE NO.4 RS.31310600/- II) BANK OVERDRAFT RS.8500489 PLUS INTEREST THEREON RS.851748/- @ 3.334% AS MENTIONED ON PAGE NO.4 RS.3290456/- III) THE TOTAL INTEREST RECEIVED BY KANODIA GROUP O N A) RS.104349470 UP TO 28/02/2011 FROM 28/02/2011 TO 31/03/2011 B) ON BALANCE AMOUNT OF RS.29927217 PG. NO.1 UPTO 31/03/2011 LESS: INTEREST SHOWN BY THE ASSESSEE A) MRS. SUMEDHA PATHAK B) SH. RAJESH KANODIA RS.27029794/- RS.2203062/- RS.2425770/- RS.31658626/- RS.5,14,908/- RS.1,37,60,251/- RS14275159/- RS.9352237/- BALANCE AMOUNT OF INTEREST NOT DISCLOSED = RS.17383 464/- (RS.31658626 RS.14275159) C) SHARE OF SH. RAJESH KANODIA & SMT. SUMEDHA PATHAK IN THE RATIO OF ADVANCE GIVEN BY VIJAY DIXIT GROUP: I) SH. RAJESH KANODIA II) SMT. SUMEDHA PATHAK RS.54,27,849/- WILL BE ADDED IN SMT. SUMEDHA PATHAK IN THE A.Y. 2011-12. RS1,19,55,614/- THUS THE ASSESSEE HAS MADE UNACCOUNTED CASH PAYMENT OF RS.31310600/- (+) RS.8500489/- AND SOURCE OF THIS CASH HAS NOT BEEN E XPLAINED, THEREFORE THIS AMOUNT WILL BE ADDED BACK TO THE INCOME OF THE ASSESSEE U/ S 69C OF IT ACT, 1961 CONSIDERING IT TO BE ADVANCE MADE FROM UNDISCLOSED INCOME. FUR THER THE ASSESSEE HAS EARNED 7 ITA NO.5680/DEL/2014 INTEREST ON THESE ADVANCED AMOUNTS AND HAS SHOWN ON LY PART OF IT IN THE BOOKS OF ACCOUNTS. HENCE TOTAL AMOUNT MENTIONED BELOW WILL BE ADDED IN THE HANDS OF THE ASSESSEE AS UNDISCLOSED INTEREST INCOME DURING THE YEAR :- I) THE CASH PAID IN THE WHOLE TRANSACTIONS IS AT RS.31110600/- + RS.200000/- BY KANODIA GROUP INTEREST ON RS.31310600/- @ 3.334% AS MENTIONED ON PAGE NO.4 RS.31310600/- II) BANK OVERDRAFT RS.8500489 PLUS INTEREST THEREON RS.851748/- @ 3.334% AS MENTIONED ON PAGE NO.4 RS.3290456/- THE TOTAL INTEREST RECEIVED BY KANODIA GROUP ON C) RS.104349470 UP TO 28/02/2011 FROM 28/02/2011 TO 31/03/2011 D) ON BALANCE AMOUNT OF RS.29927217 PG. NO.1 UPTO 31/03/2011 LESS: INTEREST SHOWN BY THE ASSESSEE D) MRS. SUMEDHA PATHAK E) SH. RAJESH KANODIA RS.27029794/- RS.2203062/- RS.2425770/- RS.5,14,908/- RS.1,37,60,251/- RS14275159/- RS.9352237/- RS.31658626/- BALANCE AMOUNT OF INTEREST NOT DISCLOSED = RS.17383 464/- (RS.31658626 RS.14275159) C) SHARE OF SH. RAJESH KANODIA & SMT. SUMEDHA PATHAK IN THE RATIO OF ADVANCE GIVEN BY VIJAY DIXIT GROUP: III) SH. RAJESH KANODIA TOTAL RS1,19,55,614/- RS.55908907/- 8. BEFORE THE LD. CIT(A), THE ASSESSEE MADE ELABORA TE SUBMISSIONS CHALLENGING THE ADDITIONS MADE BY THE ASSESSING OFF ICER. THE RELEVANT PORTION OF THE SUBMISSION AS EXTRACTED BY CIT(A) AT PARA 12 OF HIS ORDER READS AS UNDER :- IT IS SUBMITTED THAT THE ADVERSE INFERENCE DRAWN B Y THE AO IS AGAINST THE FACTS ON RECORD AND BY MISINTERPRETING THE DOCUMENTS. THE AO HAS STATED THAT THE CASH PAYMENT OF RS.3,11,10,600 AS APPEARING ON PAGE 5 HA S BEEN MADE BY THE ASSESSEE. IN THIS REGARD WE WILL INVITE YOUR HONOUR'S ATTENTION TO THIS PARPER WHICH IS PLACED AT PAPER BOOK PAGE 17. ONGOING TROUGH THE SAME YOUR HO NOUR WILL NOTICE THAT THIS DOCUMENT REFERS PAYMENT TO 30 VARIOUS PERSONS. ALL THESE PERSONS ARE RELATED TO MR. VIJAY DIXIT ONLY. AN IDEA ABOUT THIS CAN BE HAD FRO M SOME OF THE OBSERVATIONS. IN ITEM 8 ITA NO.5680/DEL/2014 NO. 7 IS VINOD, ACCOUNTANT SALARY. VINOD IS NOT AN EMPLOYEE OF THE ASSESSEE. VINOD APPARENTLY IS AN ACCOUNTANT OF MR. VIJAY DIXIT WHOS E SALARY HAS BEEN PAID. SIMILARLY AT ITEM NO.8 IS PAYMENT TO SOLANKI, DRIVER, SOLANKI IS ALSO NOT AN EMPLOYEE OF THE ASSESSEE. HE APPARENTLY IS THE DRIVER OF MR. VIJAY DIXIT. SIMILARLY AT ITEM NO.11 IT IS STATED POLICEMAN TOMAR AND P EXPENSES. ITEM 5 AND 1 2, 22 AND 23 ARE THE AMOUNT OF THE CASH DEPOSITED IN THE SENIOR BUILDERS LTD. ACCO RDINGLY ALL THESE PAYMENTS ARE MADE BY VIJAY DIXIT. IT IS NOT A CASE WHERE THIS AM OUNT IS NOT EXPLAINABLE FROM MR. VIJAY DIXIT. ON GOING THROUGH THE BANK STATEMENT OF SENIOR BUILDERS LT. IT CAN BE SEEN THAT CASH HAS BEEN WITHDRAWN FROM TIME TO TIME FROM THIS BANK ACCOUNT. ALL THESE CASH HAS BEEN UTILIZED BY MR. VIJAY DIXIT. THE AO HAS T OTALLY IGNORED THE EXPLANATION AND ARBITRARILY MADE THE ADDITION IN THE HANDS OF THE A SSESSEE. THE AO NEVER MADE ANY EFFORT TO EVEN ENQUIRE FROM MR. VIJAY DIXIT. HE DID NOT MAKE ANY EFFORT TO CO-RELATE THESE TRANSACTIONS WITH THE BUSINESS ASSOCIATES OR THE ACTIVITIES OF MR. VIJAY DIXIT. ALL THESE TRANSACTIONS ARE LINKED TO MR. VIJAY DIXIT AN D ASSESS HAS NOTHING TO DO WITH THESE TRANSACTIONS. THE SOURCE OF THESE CASH ALSO H AS BEEN GOT EXPLAINED FROM THE BANK STATEMENT OF SENIOR BUILDERS LTD. AND THE BANK ACCOUNT OF MR. VIJAY DIXIT. THE INFERENCE DRAWN BY THE AO ACCORDINGLY ON THIS ACCOU NT IS ABSOLUTELY INCORRECT AND AGAINST THE FACTS ON RECORD. ACCORDINGLY THE AO WAS NOT JUSTIFIED TO MAKE THESE ADDITIONS. THE AO HAS FURTHER ADDED RS. 85,00,489/- ON ACCOUNT OF OVERDRAFT OF SENIOR BUILDERS LTD. IT IS SURPRISING TO NOTE THAT DESPITE THIS BEI NG AN OVERDRAFT OF SENIOR BUILDERS LTD. BUT STILL THE ADDITION HAS BEEN MADE IN THE HANDS O F THE ASSESSEE. THE ASSESSEE HAS GIVEN A DETAILED EXPLANATION AS IT EVIDENT FROM PAR A 2 ON PAGE AS UNDER:- '2. REGARDING THE TERM MENTIONED AS 'OVERDRAFT BY S ENIOR BUILDER LTD. ACCOUNT OF RS. 8500489/- ' ON PAGE 4, WE WOULD LIKE TO SUBMIT THAT SENIOR BUILDERS LIMITED IS AN INDEPENDENT ENTITY AND HAVING NO CONN ECTION WITH ASSESSEE OR ANY OF HIS GROUP CONCERN. FROM THE TERM 'OVERDRAFT' ITSELF, IT IS ABUNDANTLY CLEAR THAT IT IS A BANKING TRANSACTION AND MUST BE APPEARING IN THE BO OKS OF ACCOUNT OF M/S SENIOR BUILDERS LIMITED. AT THIS STATE, IT IS ONCE AGAIN R EITERATED THAT ASSESSEE WAS NEITHER DIRECTOR NOR SHAREHOLDER NOR HAVING ANY SORT OF CON TROL OR INFLUENCE ON SENIOR BUILDERS LIMITED.' THE AO HAS GIVEN NO EXPLANATION WHATSOEVER ABOUT MA KING THIS ADDITION AND REJECTING THE ABOVE EXPLANATION. HE HAS JUST TRIED TO MIX AND MATCH NUMBERS TO REACH A PRECONCEIVED CONCLUSION RATHER THAN APPRECIATING THE FACTS AND IN CASE OF DOUBT VERIFYING THE SAME FROM THE PERSONS CONCERNED INCLU DING THE BANK. THERE IS NO DISPUTE THAT THIS IS AN OVERDRAFT ACCOUNT. THERE IS NO DISP UTE THAT THIS IS AN ACCOUNT OF THE SENIOR BUILDERS LIMITED. THIS IS A BANK TRANSACTION AND IF IT IS SO HOW CAN THIS AMOUNT BE ADDED IN THE HANDS OF THE ASSESSEE. IT IS SURPRI SING THAT AN OVERDRAFT ACCOUNT IS BEING ADDED AS UNEXPLAINED INVESTMENT. THE AO HAS MADE A FURTHER ADDITION OF RS. 2 LAC BY AGAIN INDULGING INTO SURMISES. THE ASSESSEE HAS CATEGORICALLY STATED THAT THIS AMOUNT DOES NOT BELONG TO HIM AND THIS FACT IS EVIDENT FROM THE SEIZED DOCUMENT ITSELF. THE AO INSTEAD TO ANALYZING THESE PAPERS AND IGNORING THE RECONCILIATION STATEMENT SUBMITTED BY THE ASSESSEE HAS INDULGED INTO SURMISES AND MADE THE ABOVE ADDITION. 9 ITA NO.5680/DEL/2014 9. SO FAR AS THE ADDITION ON ACCOUNT OF INTEREST IS CONCERNED, IT WAS SUBMITTED THAT THE ASSESSING OFFICER IGNORING THE C ORRECT FIGURE OF RS.1,42,75,159/- DONE HIS OWN CALCULATION AND COMPU TED THE INTEREST AT RS.3,16,58,626/-. IT WAS SUBMITTED THAT THE FIGURE OF INTEREST NOWHERE COMES IN ANY OF THE DOCUMENTS. FURTHER, THERE IS NO EVIDENC E TO SHOW THAT THE ASSESSEE HAS RECEIVED SUCH HUGE AMOUNTS OF INTEREST. THE AS SESSING OFFICER WITHOUT VERIFYING THE VERACITY OF THE EVIDENCES FOUND IN TH E EXPLANATION SUBMITTED BY THE ASSESSEE MADE THE ADDITION WHICH IS NOT CORRECT . IT WAS SUBMITTED THAT THE ASSESSING OFFICER NEITHER CALLED SHRI VIJAY DIXIT F OR HIS EXAMINATION NOR ASKED FOR THE ACCOUNTS OF SENIOR BUILDER LTD. WHICH IS A COMPANY. FURTHER, THE ASSESSING OFFICER HAS ALSO DID NOT ENQUIRE FROM THE RESPECTIVE BANK ACCOUNTS TO MAKE FURTHER ENQUIRIES. IT WAS SUBMITTED THAT AS P ER THE PROVISIONS OF SECTION 132(4A) OF THE I.T. ACT, THERE LIES A PRESUMPTION A GAINST THE ASSESSEE, IN CASE CERTAIN DOCUMENTS ARE FOUND DURING THE COURSE OF SE ARCH. HOWEVER, SUCH PRESUMPTION IS A REBUTTABLE PRESUMPTION AND AS SUCH THE ADDITIONS ON THE BASIS OF SUCH DOCUMENTS ARE NOT TO BE MADE MECHANICALLY W ITHOUT GIVING ANY FINDING AGAINST THE SAME. VARIOUS DECISIONS WERE ALSO BROU GHT TO THE NOTICE OF THE LD. CIT(A). WITHOUT PREJUDICE TO THE ABOVE, IT WAS SUB MITTED THAT THE ASSESSING OFFICER HAS ERRED IN NOT ALLOWING THE BENEFIT OF TE LESCOPING TO THE ASSESSEE. THE BANK ACCOUNT OF SENIOR BUILDER WAS ALSO FILED BEFOR E THE LD. CIT(A) SHOWING 10 ITA NO.5680/DEL/2014 HUGE CASH WITHDRAWALS MADE FROM THE SAID ACCOUNT. IT WAS SUBMITTED THAT MR. VIJAY DIXIT HAS BEEN MAKING HEAVY WITHDRAWALS FROM THE FIRMS FOR MEETING OF ITS OBLIGATION. THE AMOUNT OF RS.99,00,000/- ISSUE D BY CHEQUE BY THE ASSESSEE TO MR. VIJAY DIXIT WAS BROUGHT TO THE NOTICE OF THE LD. CIT(A). IT WAS FURTHER SUBMITTED THAT ANOTHER AMOUNT OF RS.20,00,000/- CRE DITED IN THE BANK ACCOUNT OF SENIOR BUILDERS LTD. ON 19.01.2011 IS FROM THE ASSE SSEES FIRM WHICH WAS ALSO WITHDRAWN BY MR. VIJAY DIXIT IN CASH. ANOTHER AMOU NT OF RS.95,00,000/- PAID BY CHEQUES ON 07.01.2011 WAS UTILIZED BY MR. VIJAY DIXIT INCLUDING CASH WITHDRAWALS ON 07.01.2011 AND 17.01.2011. VARIOUS OTHER PAYMENTS MADE BY CHEQUE TO MR. VIJAY DIXIT WERE ALSO WITHDRAWN BY MR . DIXIT IN SHAPE OF CASH. IT WAS ACCORDINGLY SUBMITTED THAT WHEN THE ASSESSING O FFICER HAS ACCEPTED A PART OF THE DOCUMENTS AS CORRECT IT WAS INCORRECT ON HIS PART TO DISBELIEVE THE OTHER PART WITHOUT MAKING ANY EFFORT TO VERIFY THE SUBMIS SION MADE BY THE ASSESSEE AND MAKING ADDITIONS ARBITRARILY. IT WAS ACCORDING LY ARGUED THAT ADDITION MADE BY THE ASSESSING OFFICER SHOULD BE DELETED. 10. BASED ON THE ARGUMENT ADVANCES BY THE ASSESSEE, LD. CIT(A) DELETED THE ADDITION OF RS.3,98,11,089/- AS UNEXPLAINED INVESTM ENT OF RS.1,60,97,818/- AS INTEREST EARNED ON INVESTMENT BY OBSERVING AS UNDER :- 5. ADJUDICATION: 5.1 I HAVE CONSIDERED THE SUBMISSIONS OF THE AR, A SSESSMENT ORDER AND ALSO THE COPIES OF SEIZED DOCUMENTS RELIED UPON BY THE AO. A LL THE GROUNDS ARE INTERRELATED AND HENCE THEY ARE ADJUDICATED TOGETHER. 11 ITA NO.5680/DEL/2014 5.2 GROUND NO.1 & 2 ARE GENERAL IN NATURE AND HEN CE NOT COMMENTED UPON. 5.3 GROUND NO. 3 & 4 5.3.1 IT IS OBSERVED THAT THE AO HAD CALLED UPON TH E ASSESSEE TO EXPLAIN THE CONTENTS OF 9 PAGES, EXTRACTED FROM SEIZED HARD DISC. THE AP PELLANT HAD MADE A DETAILED SUBMISSION EXPLAINING EACH OF THE 9 PAGES (AS NOTED BY ME AT PARA 4.1 TO 4.6 ABOVE). THE AO WAS NOT SATISFIED WITH THE SAME AND PROCEEDE D TO MAKE ADDITION OF RS. 5,59,08.907/- BASED ON THOSE 9 PAGES. 5.3.2 IT IS NOT IN DISPUTE THAT THE ASSESSEE HAD BU SINESS CONNECTION WITH SH. VIJAY DIXIT GROUP WHICH ALSO INCLUDES SENIOR BUILDERS LTD . BELONGING TO SH. VIJAY DIXIT. IT IS ALSO NOT IN DISPUTE THAT THE SAID 9 PAGES ARE EXTRA CTS OF THE SEIZED HARD DISC. THE MAIN ISSUE TO BE ADJUDICATED IN THIS GROUND IS WHETHER T HE TRANSACTIONS MENTIONED ON THE NINE PAGES PERTAIN TO THE APPELLANT AND WHETHER ON THE BASIS OF THE SAME ADDITION COULD BE SUSTAINED IN THE HANDS OF THE ASSESSEE. 5.3.3 THE FIRST OF THE 9 PAGES GIVES DETAILS OF PAY MENTS WITH THE GRAND TOTAL OF RS.13,42,76,687/-. THE AO HAS ADMITTED THAT THE TRA NSACTIONS CONTAINED IN PAGE NO. 1 ARE DULY ACCOUNTED FOR BY THE ASSESSEE AND HIS GROU P. HE ALSO ACCEPTED THAT PAGE NO. 2 AND 3 ARE REPETITIONS OF THE AMOUNTS WRITTEN ON P AGE NO.1. THE AO HAS CONCLUDED THAT THE AMOUNTS MENTIONED ON PAGE NO. 5 RELATE TO THE AMOUNTS PAID IN CASH BY THE ASSESSEE TO VIJAY DIXIT GROUP WHICH HAS NOT BEEN AC COUNTED FOR BY THE APPELLANT. THUS HE HAS BROUGHT TO TAX RS. 3,11,10,600/- MENTIONED I N THE SAID PAGE NO.5. ON THE BASIS OF ENTRIES ON PAGE 4 THE AO HAS ALSO CONCLUDED THAT THE APPELLANT HAS RECEIVED INTEREST AT THE RATE OF 3.3334 % PER MONTH ON THE T OTAL ADVANCES MADE BY THE APPELLANT GROUP. HE HAS ADOPTED THE INTEREST FIGURE AS GIVEN ON PAGE 4 IN RESPECT OF RS. 10,43,49,470/- AND ON THE REMAINING AMOUNTS ADD ED BY HIM HE HAS COMPUTED INTEREST AT THE RATE 3.3334% FOR THE RELEVANT PERIO D. THE AO HAS ALSO HELD THE BANK OVERDRAFT OF RS. 84,00,489/- APPEARING ON PAGE 4 AS UNACCOUNTED INVESTMENT OF THE ASSESSEE AND ADDED THE SAME ALONG WITH INTEREST COM PUTED AT THE RATE OF 3.3334%. 5.3.4 THE MAIN REASON FOR HOLDING RS. 3,11,10,600/- AS UNACCOUNTED CASH PAYMENT OF THE-ASSESSEE IS THE ARITHMETICAL CALCULATION MEN TIONED BY THE AO AT PAGE 6 OF HIS ORDER. EVENTHOUGH, THE FIGURES ON CERTAIN PAGES, TA LLY WITH THE FIGURES ON OTHER SUBSEQUENT PAGES, THAT FACT ALONE, IN MY VIEW, CANN OT BE A GROUND FOR MAKING HUGE ADDITION. THE BASIC TRANSACTIONS INVOLVED IN THE SA ID ENTRIES REQUIRED TO BE CLARIFIED BEFORE MAKING SUCH ADDITIONS. 5.3.5 THE REASONING GIVEN BY THE AO DO NOT ESTABLIS H THAT THE APPELLANT DID MAKE CASH PAYMENT OF RS. 3,11,10,600/- OR THAT THE BANK OVER DRAFT OF RS. 85,00,489/- REPRESENTED UNACCOUNTED INCOME OF THE APPELLANT. PA GE 5 CONTAINS TRANSACTIONS LISTED WITH THE HEADING 'GROUP OF VIJAY DIXIT BY CASH'. AL L THE TRANSACTIONS ON THE PAGE HAVE BEEN HELD TO BE REPRESENTING UNACCOUNTED PAYME NT OF CASH BY THE APPELLANT. THERE ARE GLARING FACTS WHICH CONTRADICT AO'S STAND . 5.3.6 THE PAYMENTS MENTIONED IN THE SAID PAGE INCLU DE 'CASH DEPOSIT' IN BANK OF BARODA AND ICICI BANK. THE PARTY NAME AGAINST SUCH TRANSACTION IS MENTIONED AS SENIOR BUILDER LTD. THE AR HAS FURNISHED THE COPY O F BANK ACCOUNT OF SENIOR BUILDERS LTD. BEFORE THE AO AND HAS SHOWN THAT THESE TRANSAC TIONS ARE DULY REFLECTED IN THE BANK ACCOUNT OF SENIOR BUILDERS LTD. RS. 12,00,000/ - SHOWN AS DEPOSIT IN BANK OF BARODA ON 21 ST JAN 2011 IS VERY MUCH REFLECTED IN AND MATCHES WIT H THE BANK ACCOUNT STATEMENT OF SENIOR BUILDERS LTD MAINTAINED WITH BA NK OF BARODA (PAGE 83 OF PAPER 12 ITA NO.5680/DEL/2014 BOOKS AS) CREDIT ENTRY. ITEM NO. 12 ON PAGE-5 IS AN ENTRY FOR RS. 2 LAKH (ON 8/02/2011) WHICH ALSO MATCHES WITH CREDIT ENTRIES IN THE BANK STATEMENT (BOB) OF SENIOR BUILDERS LTD AT PAGE 85 OF PAPER BOOK. 5.3.7 ITEM NO. 22 AND 23 ON PAGE-5 ARE CASH DEPOSIT ED IN THE SENIOR BUILDERS LTD ACCOUNT ON 1ST MARCH, 2011 (RS.5,00,000/-) AND ON 2 ND MARCH, 2011 (RS.8,00,000/ )WHICH ARE ALSO REFLECTED IN THE BANK ACCOUNT OF SE NIOR BUILDERS LTD. PLACED AT PAPER BOOK PAGE 86. 5.3.8 FURTHER, THERE IS NO ALLEGATION THAT THE BANK ACCOUNT OF SENIOR BUILDER LTD. WITH BANK OF BARODA IS AN UNDISCLOSED/ CONCEALED BA NK ACCOUNT OF SENIOR BUILDERS LTD. HENCE, IT WOULD BE DIFFICULT TO SAY THAT THE A MOUNTS DULY TRANSACTED THROUGH BANKING CHANNELS BY SENIOR BUILDERS COULD BE UNEXPL AINED INVESTMENTS OF THE ASSESSEE. SUCH INFERENCE COULD HAVE BEEN DRAWN ONLY IF THOSE TRANSACTIONS ARE NO REFLECTED IN THE BOOKS OF SENIOR BUILDERS. BUT THEN , IT WOULD BECOME TAXABLE IN THE HANDS OF SENIOR BUILDERS IN WHOSE BANK ACCOUNT THES E AMOUNTS HAVE BEEN FOUND DEPOSITED. 5.3.9 THE SAID PAGE-S, ALSO HAS PAYMENT OF SALARY O F RS. 15000/- TO 'VINOD ACCOUNTANT' WHO APPARENTLY IS AN EMPLOYEE OF VIJAY DIXIT GROUP. NEXT ENTRY SHOWS THE PAYMENTS TO SOLANKI, DRIVER AND THE ASSESSEE HA S CLEARLY STATED BEFORE THE AO THAT SOLANKI WAS NOT HIS EMPLOYEE. ITEM NO. 11, REFERS T O PAYMENTS MADE TO POLICEMAN TOMAR & P. EXPENSES. SIMILARLY, THERE ARE NARRATION S WHICH SHOW THAT VIJAY DIXIT HAS SPENT MONEY/ PAID AMOUNTS TO CERTAIN PERSONS LIKE ' TO NP SINGH FOR KHEMKA CASE', 'TO KHAN FOR MG ROAD MALL' ETC. THE ASSESSEE HAS SU BMITTED BEFORE THE AO THAT ALL THE. PARTIES/ PERSONS WHOSE NAMES APPEAR ON PAGE-5 ARE CONNECTED/RELATED TO SH. VIJAY DIXIT & NOT TO THE APPELLANT OR HIS GROUP. AO HAS NOT DISPUTED THESE FACTS BUT SIMPLY IGNORED ALL THESE AVERMENTS WITHOUT MAKING A NY COMMENTS. 5.3.10 THE AR HAS ALSO SUBMITTED THAT THE MR. VIJAY DIXIT HAD SIZEABLE CASH WITHDRAWALS FROM HIS BANK ACCOUNTS. FURTHER, THE A R HAS ALSO DRAWN ATTENTION TO THE FACT THAT VIJAY DIXIT GROUP HAD WITHDRAWN CASH IMME DIATELY AFTER RECEIVING CHEQUES FROM THE ASSESSEE'S GROUP. IF THE APPELLANT WERE TO ADVANCE MONEY IN CASH, THEY WOULD NOT HAVE ISSUED CHEQUES WHICH WERE IMMEDIATELY ENCH ASED AND CASH WAS WITHDRAWN BY VIJAY DIXIT GROUP. THE APPELLANT COULD HAVE DIRE CTLY ADVANCED MONEY IN CASH AND THERE WAS NO NEED TO ROUTE THEM THROUGH THE BANK AC COUNTS. THE RELEVANT SUBMISSIONS OF THE AR IN THIS REGARD ARE REPRODUCED BELOW: 4.11 THE TOTALITY OF THE FACTS AND CIRCUMSTANCES NE EDS TO BE TAKEN INTO CONSIDERATION. MR. VIJAY DIXIT HAS BEEN MAKING HEAV Y WITHDRAWALS FROM THE FIRMS FOR MEETING OF ITS OBLIGATION AS CAN BE SEEN FROM THE CASH WITHDRAWALS FROM SENIOR BUILDERS LTD. NOT ONLY THAT MR. VIJAY D IXIT HAS MADE A HEAVY WITHDRAWAL OF RS. 99,00,000/- FROM HIS OWN BANK ACC OUNT ON 28.2.2011 AS IS EVIDENT FROM HIS BANK STATEMENT WITH INDIAN OVERSEA S BANK PLACED AT PAPER BOOK PAGE 90. IN THIS REGARD IT WILL BE IMPORTANT T O NOTE THAT THE CREDIT IN THE BANK ACCOUNT OF MR. VIJAY DIXIT HAS COME FROM THE A SSESSEE AS IS EVIDENT FROM PAPER BOOK PAGE 13 WHERE A CHEQUE OF RS. 99,00,000/ - HAS BEEN ISSUED FROM THE ASSESSEE'S FIRM, VASUDEVA JEWELLERS PVT. LTD. H AD IT BEEN THE ASSESSEE'S INTEND TO MAKE PAYMENT IN CASH AS IS BEING ALLEGED, THE ASSESSEE WOULD NOT HAVE MADE THE PAYMENT BY CHEQUE OF RS. 99,00,000/- WHICH HAS BEEN WITHDRAWN IN CASH BY MR. VIJAY DIXIT ON THE SAME DA Y. 13 ITA NO.5680/DEL/2014 4.12 IT IS FURTHER TO BE NOTICED THAT CHEQUE PAID OF RS. 20,00,000/- CREDITED IN SENIOR BUILDERS LTD. ACCOUNT ON 19.1.2011 IS ALS O FROM THE ASSESSEE'S FIRM, PASUPATI JEWELLERS AS IS EVIDENT FROM PAPER BOOK P AGE 13, ENTRY NO.19 WHERE THIS CHEQUE HAS BEEN PAID BY PASUPATI JEWELLE RS AND HAS BEEN DULY ACCOUNTED FOR BY THE ASSESSEE. THIS AMOUNT HAS ALSO BEEN WITHDRAWN IN CASH BY MR. VIJAY DIXIT FROM HIS CONCERN, SENIOR BUILDE RS LTD. 4.13 THE ASSESSEE HAS ALSO PAID A SUM OF RS. 95,00, 000/- BY CHEQUE ON 7 TH JANUARY, 2011 WHICH HAS BEEN UTILIZED BY MR. VIJAY DIXIT INCLUDING CASH WITHDRAWAL ON 07 TH JANUARY, 2011 AND 17 TH JANUARY, 2011. 4.14 FURTHER A SUM OF RS. 8,00,000/- HAS BEEN PAID BY CHEQUE ON 09 TH MARCH 2011 AS CAN BE CROSS-VERIFIED FROM THE STATE MENT AT PAGE 13 AND OF THE BANK STATEMENT AT PAGE 88. 4.15 FURTHER A SUM OF RS.31,50,000/- HAS BEEN PAID BY CHEQUE BY MRS. KUMKUM KANODIA ON 10TH FEBRUARY, 2011 AS IS EVIDEN T FROM PAGE 13 READ WITH PAGE 85 AND THE SAME DAY THE AMOUNT HAS B EEN WITHDRAWN IN CASH BY MR. VIJAY DIXIT. 4.16 THIS CLEARLY SHOWS THAT ALL CASH TRANSACTIONS RECORDED AT PAGE 17 ARE THAT OF THE VIJAY DIXIT AND NOT OF THE ASSESSEE. 4.17 THE ABOVE EXPLANATION CLARIFIES THE ALLEGATION OF RS.3,11,10,600/- OUT OF RS.3,98,11,089/-. 5.3.11 CONSIDERING THE ABOVE FACTS, I AM OF THE VIE W THAT THE TRANSACTIONS RECORDED ON PAGE-5 PERTAIN TO VIJAY DIXIT GROUP AND NOT TO THE APPELLANT. THERE ARE NO EVIDENCES TO SHOW THAT ALL THESE TRANSACTIONS WERE FINANCED BY THE APPELLANT. IN FACT SUCH CHANCES APPEAR REMOTE AS THE PAGE CONTAINS TR ANSACTIONS INVOLVING THE BANK ACCOUNT OF SENIOR BUILDERS LTD AND PAYMENTS TO PER SONS WHO ARE APPARENTLY EMPLOYEES OF SH. VIJAY DIXIT. 5.3.12 FURTHER, INSPITE OF RECEIVING A DETAILED REP LY INCLUDING RECONCILIATION OF PAYMENTS BY APPELLANT GROUP AND INSPITE OF HAVING T HE COPIES OF BANK ACCOUNT OF SENIOR BUILDERS MATCHING WITH THE ENTRIES ON PAGE-5 , THE AO DID NOT SEEM TO HAVE CROSS CHECKED WITH VIJAY DIXIT GROUP ABOUT THESE EN TRIES. HE HAS, HOWEVER, CROSS CHECKED SOME ENTRIES OF PAGE 6 & 7 WITH THE BANK OF BARODA, SANSAD MARG, NEW DELHI AND HAS ACCEPTED THAT 'THE PAY ORDERS' MENTIO NED AT PAGE 6 & 7 ARE DULY MADE FROM THE ACCOUNT OF SENIOR BUILDER LTD. (AS PER 2 ND PARA ON PAGE 7 OF THE ASSESSMENT ORDER). HE HAS NOT MADE ANY ADDITION ON ACCOUNT OF THESE ENTRIES APPEARING ON PAGE 6 & 7. IT IS NOTED HERE THAT THE HEADINGS OF THE PA GES 6 & 7 ARE SIMILAR TO THE HEADING ON PAGE-5. THE TITLE OF PAGE-5 READS AS GROUP OF VI JAY DIXIT BY CASH. THE TITLE OF PAGES 6 AND 7 READS AS GROUP OF VIJAY DIXIT BY PAY ORDER. 5.3.13 IN ONE CASE (PAGE 6 & 7) THE AO HOLDS THAT T HE TRANSACTION ARE NOT FINANCED BY THE APPELLANT, WHILE IN THE OTHER CASES (PAGE-5), H E HOLDS THAT THE TRANSACTIONS ARE FINANCED BY THE ASSESSEE. THE HEADINGS OF THE PAGES ARE ONE AND SAME. IN ONE CASE THE WORD CASH HAS BEEN REPLACED BY PAY ORDERS. BUT TWO DIFFERENT INFERENCES HAVE BEEN DRAWN REGARDING THE SOURCE OF FUNDS FOR THOSE TRANS ACTIONS. THERE IS, THUS, CONTRADICTION IN THE AO'S STAND. AO HAS EVEN CHARGE D INTEREST ON THESE AMOUNTS @3.3334 % PER MONTH WHICH WORKS OUT TO WHOPPING 40% PER ANNUM. NO DOUBT THE ASSESSEE HAS NOT BEEN ABLE TO EXPLAIN THE BASIS OF INTEREST COMPUTATION FOUND AT PAGE 14 ITA NO.5680/DEL/2014 4. HOWEVER, IT WOULD BE DIFFICULT TO PRESUME THAT A NYBODY WOULD HAVE CHARGED INTEREST @40% PER ANNUM AND ANYBODY WOULD HAVE ACTU ALLY PAID INTEREST AT SUCH A HIGH RATE. 5.3.14 IT IS ALSO NOTED THAT AO HAS HELD THE BANK O VERDRAFT OF RS. 84,00,489/- ALSO AS UNDISCLOSED INCOME. HE HAS NOT ELABORATED AS TO HOW ANY BANK OVERDRAFT COULD BE INCOME OF SOME PERSON. MERELY BECAUSE THERE IS AN E NTRY 'OVERDRAFT OF SENIOR BUILDERS LTD A/C', ON PAGE 4, HE HAS TREATED THE AM OUNT AS UNDISCLOSED PAYMENT (AND THEREFORE UNDISCLOSED INCOME) OF THE ASSESSEE. HE H AS ALSO CHARGED INTEREST ON THIS OVERDRAFT @3.3334% AND BROUGHT IT TO TAX. I DO NOT FIND ANY MERIT IN SUCH APPROACH. I AGREE WITH THE AR THAT THE OVER DRAFT FACILITY OF A BANK COULD NOT BE UNACCOUNTED INCOME IN ANYBODY'S HAND. 5.3.15 TO SUM UP, IT IS SEEN THAT THE APPELLANT HAS MADE CONSIDERABLE EFFORT TO LEAD EVIDENCES TO SHOW THAT ALL THE TRANSACTIONS IN PAGE 1 ARE PROPERLY ACCOUNTED FOR BY THEM. THEY HAVE FILED A RECONCILIATION STATEMENT, B EFORE THE AO (REPRODUCED AT PAGE 2 & 3 OF ASSESSMENT ORDER) WHOSE FINAL FIGURES ALMOST MATCH WITH THE AMOUNTS WRITTEN ON PAGE 4. (RS. 13,42,76,687 VS RS. 13,42,85,648). THE AO HAS NOT COMMENTED UPON THE RECONCILIATION. HE HAS GONE BY THE ARITHMETIC D ERIVATION OF THE FIGURE OF RS. 3,11,10,600/- FROM THE RS. 13,42,76,687/- TO CONCLU DE THAT THE TRANSACTIONS REFLECTED ON PAGE 5 ARE ALL UNDISCLOSED PAYMENTS OF APPELLANT TO VIJAY DIXIT GROUP. 5.3.16 I HAVE ALREADY NOTED THAT SUCH INFERENCE IS NOT SUBSTANTIABLE BECAUSE RS. 3,11,10,600/- ALSO INCLUDES DEPOSITS INTO THE BANK A/C OF SENIOR BUILDERS LTD WHICH COULD ONLY BE OUT OF THEIR OWN BOOKS AND COULD NOT BE FROM THE APPELLANT. THE SAID PAGE ALSO INCLUDES PAYMENTS TO PERSONS RELATED TO S H. VIJAY DIXIT AND NOT THE APPELLANT. THEY ARE TRANSACTION OF SH. VIJAY DIXIT. THE AR'S SUBMISSION THAT SH. VIJAY DIXIT HAD SUBSTANTIAL CASH WITHDRAWALS FROM HIS BAN K A/C CANNOT ALSO IGNORED (THEY COULD BE THE SOURCE OF THE PRESENT PAYMENTS). IF TH E SOURCES OF THE TRANSACTIONS ENTERED AT PAGE-5 ARE NOT EXPLAINABLE, THE SAME ARE LIABLE TO BE TAXED IN HANDS OF SH. VIJAY DIXIT AND HIS GROUP AS THE TRANSACTION CLEARL Y PERTAIN TO SH. VIJAY DIXIT GROUP. IN VIEW OF THIS, I AM COMPELLED TO HOLD THE ACTION OF THE AO UNSUSTAINABLE. 5.3.17 FURTHER, THE AO HAS ADDED INTEREST OF RS. 1, 60,97,818/- ON THE ALLEGED UNDISCLOSED ADVANCES AND ALSO ON THE DISCLOSED ADVA NCES. I HAVE ALREADY NOTED THAT THE AO HAS NOT BEEN ABLE TO SUBSTANTIATE THAT THE A PPELLANT MADE UNDISCLOSED CA PAYMENT OF RS. 3,11,10,600/-, AND RS. 85,00,489/- T O VIJAY DIXIT GROUP. HENCE THE QUESTION OF COMPUTING INTEREST ON THOSE AMOUNTS DO NOT ARISE. FURTHER, THE ACTION THE AO IN ASSESSING INTEREST INCOME AT 40% PER ANNUM (@ 3.3334 % PER MONTH) NOT ON ANY SOUND REASONING. THE ONLY BASIS FOR SUCH ACTION IS THE COMPUTATION MENTIONED ON THE SAID PAGE-5. IT IS NOTED THAT THE APPELLANT GRO UP HAS ALREADY ACCOUNTED AND OFFERED TO TAX RS. 1,42,75,159/- (AS MENTIONED BY A O ON PAGE 8). THE INTEREST @40% PER ANNUM APPEARS TO BE VERY EXORBITANT AND IT IS D IFFICULT TO PRESUME THAT ANYONE WOULD HAVE CHARGED OR PAID SUCH HIGH RATE OF INTERE ST. THEREFORE, I DO NOT CONSIDER THAT THE AO CAN BRING TO TAX ANY HYPOTHETICAL/ NOTI ONAL INTEREST BY ADOPTING 40% RATE WITHOUT BRINGING TANGIBLE EVIDENCES. HENCE THIS AD DITION IS ALSO LIABLE TO BE DELETED. THE GROUNDS 3 & 4 THEREFORE ALLOWED. 15 ITA NO.5680/DEL/2014 11. AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A), TH E REVENUE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUND S :- 1. THE ORDER OF LD. CIT(A) IS NOT CORRECT IN LAW A ND FACTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE L D. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.5590890 7/- MADE BY THE ASSESSING OFFICER UNDER SECTION 69C OF THE IT ACT. 3. THE APPELLANT CRAVES LEAVE TO ADD, AMEND ANY/ALL THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF HEARING OF THE APPEAL. 12. LD. DR STRONGLY OPPOSED THE ORDER OF THE LD. CI T(A). SHE SUBMITTED THAT WHEN THE DOCUMENTS WERE RETRIEVED FROM THE HARD DIS K OF THE ASSESSEE, THE ONUS WAS ON THE ASSESSEE TO SUBSTANTIATE SUCH ENTRIES AN D THE VARIOUS AMOUNTS PAID TO VIJAY DIXIT GROUP. SHE SUBMITTED THAT THE LD. CIT( A) WITHOUT APPRECIATING THE FACTS PROPERLY HAS DELETED THE ADDITION WHICH IS NO T JUSTIFIED UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. IN HER ALTERNATE SUBMIS SION, SHE SUBMITTED THAT THE MATTER MAY BE RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION. 13. LD. COUNSEL FOR THE ASSESSEE ON THE OTHER HAND HEAVILY RELIED ON THE ORDER OF THE LD. CIT(A). REFERRING TO PAGE 17 TO 23 OF T HE ORDER OF THE LD. CIT(A), HE DREW THE ATTENTION OF THE BENCH TO THE VARIOUS SUBM ISSION MADE EXPLAINING EACH AND EVERY ENTRY. REFERRING TO PAGE 12 OF THE ORDER OF LD. CIT(A), HE DREW THE ATTENTION OF THE BENCH TO THE VARIOUS SUBMISSIONS M ADE. HE SUBMITTED THAT THE LD. CIT(A) AFTER APPRECIATING THE FACTS PROPERLY HA S DELETED THE ADDITION. 16 ITA NO.5680/DEL/2014 FURTHER, THE ASSESSING OFFICER WHILE ACCEPTING THE PAY ORDERS AS GENUINE AND BEING PURCHASED BY M/S SENIOR BUILDERS AND DEVELOPE RS LTD. HAS NOT ACCEPTED THE CASH TRANSACTION AS BELONGING TO THEM. NOTHING PREVENTED THE ASSESSING OFFICER FROM MAKING ENQUIRIES FROM M/S VIJAY DIXIT OR HIS GROUP OF COMPANIES TO FIND OUT THE VERACITY OF THE SUBMISSIONS MADE BY THE ASSESSEE. SINCE THE LD. CIT(A) HAS CONSIDERED THE SUBMISSION MADE BY THE AS SESSEE AND FOUND THE SAME TO BE CORRECT, THEREFORE, HIS ORDER DELETING THE AD DITION MADE BY THE ASSESSING OFFICER IS FULLY JUSTIFIED. HE ACCORDINGLY SUBMITT ED THAT THE ORDER OF THE LD. CIT(A) BE UPHELD AND THE GROUNDS RAISED BY THE REVE NUE SHOULD BE DISMISSED. 14. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE MATERIAL AVAILABLE ON RECORD AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE FIND DURING THE COURSE OF SEARCH AT T HE PREMISES OF THE ASSESSEE THE HARD DISK WAS SEIZED AND DOCUMENTS BEARING PAGE NO.1 TO 9 WERE RETRIEVED FROM THE SAID HARD DISK WHICH CONTAINED CERTAIN PAY MENTS MADE TO VIJAY DIXIT GROUP IN THE FIRM OF CHEQUES, PAY ORDERS AND IN SHA PE OF CASH, THE TOTAL OF WHICH COMES TO RS.23,70,10,708/-. ON BEING QUESTIONED BY THE ASSESSING OFFICER, THE ASSESSEE MADE ELABORATE SUBMISSIONS AND ALSO FILED RECONCILIATION STATEMENT BEFORE THE ASSESSING OFFICER. THE ASSESSEE ADMITTE D TO HAVE CERTAIN BUSINESS TRANSACTION WITH VIJAY DIXIT GROUP OF COMPANIES. W HILE THE ASSESSING OFFICER ACCEPTED THE CHEQUE PAYMENTS AND THE PAY ORDERS FOU ND FROM THE RETRIEVED 17 ITA NO.5680/DEL/2014 DOCUMENTS, THE ASSESSING OFFICER HELD THAT THE CASH PAYMENTS MADE TO VIJAY DIXIT GROUP AMOUNTING TO RS.3,11,10,600/- IS THE CA SH PAID BY THE ASSESSEE WHICH IS UNEXPLAINED. SIMILARLY, HE CALCULATED THE INTEREST PAID AT THE RATE OF 3.3334% AND MADE ADDITION OF RS.1,60,97,818/-. THE ASSESSING OFFICER SIMILARLY MADE ADDITION OF RS.85,00,489/- BEING THE OVERDRAFT OBTAINED BY THE ASSESSEE AS UNEXPLAINED PAYMENT MADE TO SHRI VIJAY DIXIT GROUP. HE ALSO MADE ANOTHER ADDITION OF RS.2,00,000/- BEING THE DIFFERE NCE IN CASH PAID BY THE ASSESSEE. THUS, IN NUTSHELL THE ASSESSING OFFICER MADE ADDITION OF RS.3,98,11,089/- AS UNEXPLAINED PAYMENT TO VIJAY DI XIT GROUP AND INTEREST THEREON AT RS.1,60,97,818/-. WE FIND THE LD. CIT(A ) DELETED THE ADDITION MADE BY THE ASSESSING OFFICER, THE DETAILS OF WHICH HAVE ALREADY BEEN REPRODUCED IN THE PRECEDING PARAGRAPHS. WE DO NOT FIND ANY INFIR MITY IN THE ORDER OF THE LD. CIT(A). A PERUSAL OF THE ORDER OF THE LD. CIT(A) S HOWS THAT PAGE NO.5 OF THE RETRIEVED DOCUMENT SHOWS CERTAIN CASH DEPOSIT IN IC ICI AND BANK OF BARODA AND THE PARTY AGAINST SUCH TRANSACTION IS MENTIONED AS SENIOR BUILDER LTD. A PERUSAL OF THE BANK ACCOUNT OF SENIOR BUILDER LTD. WHICH WA S FURNISHED BEFORE THE ASSESSING OFFICER SHOWS THAT THESE TRANSACTIONS ARE DULY REFLECTED IN THE BANK ACCOUNT OF SENIOR BUILDER LTD. RS.12,00,000/- SHOWN AS DEPOSIT IN BANK OF BARODA ON 21.01.2011 IS VERY MUCH REFLECTED AND MAT CHES WITH THE BANK ACCOUNT STATEMENT OF SENIOR BUILDER LTD.. SIMILARL Y, AN ENTRY OF RS.2,00,000/- 18 ITA NO.5680/DEL/2014 ON 08.02.2011 ALSO MATCHES WITH THE CREDIT ENTRY IN THE BANK STATEMENT OF SENIOR BUILDER LTD. MAINTAINED WITH THE BANK OF BARODA. T HE VARIOUS DEPOSITS ON OTHER DATES IN THE BANK ACCOUNTS OF SENIOR BUILDER LTD. A LSO TALLY WITH THE PAPER RETRIEVED FROM THE HARD DISK OF THE ASSESSEE. THE BANK ACCOUNT OF SENIOR BUILDER LTD. MAINTAINED WITH BANK OF BARODA ALSO IS A DISCLOSED ACCOUNT AND NOT A CONCEALED ACCOUNT. THEREFORE, WE AGREE WITH THE FINDING GIVEN BY THE LD. CIT(A) THAT IT WOULD BE DIFFICULT TO SAY THAT THE A MOUNTS DULY TRANSACTED THROUGH BANKING CHANNELS BY SENIOR BUILDER LTD COULD BE UNE XPLAINED. WE FURTHER FIND THAT DESPITE RECEIVING DETAILED REPLY INCLUDING REC ONCILIATION OF THE PAYMENTS MADE BY THE ASSESSEE GROUP AND DESPITE HAVING THE C OPIES OF BANK ACCOUNT OF SENIOR BUILDER MATCHING WITH THE ENTRIES ON PAGE NO .5, THE ASSESSING OFFICER NEVER CROSS-CHECKED THE SAME WITH VIJAY DIXIT GROUP . THE INTEREST CALCULATED BY THE ASSESSING OFFICER AT THE RATE OF 3.3334% PER MONTH HAS ALSO NO BASIS. THE VARIOUS FACTUAL FINDINGS GIVEN BY THE LD. CIT(A ) COULD NOT BE CONTROVERTED BY THE LD. DR. WE FIND THE ASSESSING OFFICER HAS A CCEPTED THE CHEQUE PAYMENTS AND PAY ORDERS MENTIONED ON THE PAPERS RETRIEVED FR OM THE HARD DISK BUT HAS CONVENIENTLY IGNORED THE EXPLANATION OF THE ASSESSE E REGARDING THE CASH PAYMENT ALTHOUGH THE CASH PAYMENTS WERE REFLECTED I N THE BANK ACCOUNT OF SENIOR BUILDER LTD. WHEN SENIOR BUILDERS LTD. IS A N ASSESSEE AND THE BANK ACCOUNT IS NOT AN UNDISCLOSED ONE, THEREFORE, ALL T HOSE CASH DEPOSITS MADE IN THE 19 ITA NO.5680/DEL/2014 BANK ACCOUNT COULD NOT HAVE BEEN FROM THE ASSESSEE. IN THIS VIEW OF THE MATTER AND IN VIEW OF THE DETAILED REASONING GIVEN BY THE LD. CIT(A), WE FIND NO INFIRMITY IN HIS ORDER. ACCORDINGLY, THE ORDER OF THE LD. CIT(A) IS UPHELD AND THE GROUND RAISED BY THE REVENUE IS DISMISSED. 15. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 03 RD APRIL, 2018. SD/- SD/- (SUCHITRA KAMBLE) (R. K. P ANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 03-04-2018. SUJEET COPY OF ORDER TO: - 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT 4) THE CIT(A) 5) THE DR, I.T.A.T., NEW DELHI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, NEW DELHI