Appeal details
Counselvise Citation
[2016] 131 COUNSELVISE.COM (IT) 5734 (ITAT-INDORE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 1 month(s) 23 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
21-09-2016
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
DB
Next Hearing Date
05-09-2016
Assessment Year
2009-2010
Appeal Filed On
28-07-2015
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER INCOME-TAX OFFICER, WD/2(2) INDORE. PAN: AGTPS5779H VS. SHRI PUKHRAJ SONI, 41/3, MAHESH NAGAR, INDORE. APPELLANT RESPONDENT APPELLANT BY SHRI MOHD. JAVED, SR. DR RESPONDENT BY SHRI ARPIT MUNDRA, C. A. DATE OF HEARING 06.09.2016 DATE OF PRONOUNCEMENT 21.09.2016 O R D E R PER O.P. MEENA, ACCOUTANT MEMEBR. THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORD ER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-I, INDORE [HEREINAFTER REFERRED TO AS THE CIT(A)] DATED 27.04.2015 AND PER TAINS TO ASSESSMENT YEAR 2009-10 AS AGAINST APPEAL DECIDED I N ASSESSMENT ORDER PASSED U/S 148 DATED 28.03.2014 OF ITO WARD 2(3) INDORE [HEREINAFTER REFERRED TO AS THE AO ]. I.T.A. NO.585/IND/2015 ASSESSMENT YEAR: 2009-10 I.T.A.O NO. 685/IND/15 AY 09-10 SHRI PUKHRAJ SONI PAGE 2 OF 23 2. THE REVENUE HAS TAKEN FOLLOWING GROUNDS OF APPEAL :- 1. THE CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITIO N OF RS. 2,50,00,000/- MADE BY THE AO WITHOUT APPRECIATING THE FACT THAT THE LOOSE PAPERS WERE FOUND AT THE TIME OF SEARCH OPERATION IN WHICH NATURE OF TRANSACTIONS AND AMOUNTS ARE CLEARLY MENTIONED. 2. THE CIT(A) DELETING THE ADDITION OF RS. 9,37,500/- MADE BY THE AO WITHOUT APPRECIATING THE FACT THAT THE LOOSE PAPERS WERE FOUND AT THE TIME OF SEARCH OPERATION IN WHICH NATURE OF TRANSACTIONS, NAME OF THE PARTY BY WHOM INTEREST WAS GIVEN WITH DATE AGAINST THE ADVANCES AND NAME OF THE RECIPIENT PARTY ARE CLEARLY MENTIONED. 3. THE CIT(A) HAS ERRED IN HEAVILY EMPHASIZING ON NON- EXISTENCE OF CORROBORATIVE EVIDENCES, WHILE IGNORING THE FACT THAT THE INCRIMINATING DOCUMENTS WERE SUFFICIENT TO EVIDENT THE UNACCOUNTED TRANSACTIONS. 4. THE CIT(A) FAILED TO APPRECIATE THAT THERE IS NO PO INT IN INSISTING FOR PROPER EVIDENCE IN THE CASE OF I.T.A.O NO. 685/IND/15 AY 09-10 SHRI PUKHRAJ SONI PAGE 3 OF 23 UNACCOUNTED TRANSACTION; BECAUSE, UNACCOUNTED TRANSACTIONS CANNOT BE EXPECTED TO BE PROPERLY RECORDED. 5. THE CIT(A) ERRED IN RELYING ON DENIALS OF THE PARTI ES WHO HAD TAKEN AND GIVEN THE AMOUNTS; BECAUSE, ERRING PARTIES CANNOT BE EXPECTED TO CONFESS THEIR MISTAKES. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT A SE ARCH OPERATION WAS CARRIED OUT IN THE SATELLITE GROUP OF CASES ON 19.11.2009 IN WHICH M/S. PHOENIX DEVCONS PRIVATE LI MITED WAS ALSO COVERED WHEREIN A LOOSE PAPER BEARING NO. LP S-A/4 PAGE 7 CONTAINING DETAILS OF TRANSACTION OF SHRI PU KHRAJ SONI WITH NILESH AJMERA WAS ALSO FOUND AND SEIZED. THIS INFORMATION WAS FORWARDED TO THE AO, STATING THAT THE ASSESSEE HAS ADVANCED RS. 2,50,00,000/- IN ASSESSMENT YEAR 2 009-10 AND RECEIVED INTEREST AMOUNTING TO RS. 9,37,500/- O N THIS ADVANCE MONEY. THEREFORE, NOTICE U/S 148 WAS ISSUED ON 04.04.2012 IN RESPONSE TO WHICH A COPY OF RETURN WAS FILED ON 20.09.2009 WAS SUBMITTED DISCLOSING TOTAL INCOME AT RS. I.T.A.O NO. 685/IND/15 AY 09-10 SHRI PUKHRAJ SONI PAGE 4 OF 23 2,05,230/-. THE SEIZED PAPER LPS-A/4 CONTAINING 19 PAGES WITH YELLOW COVER FOLDER HAVING TOWN HISAB MENTIONED ON THE COVER OF THE FOLDER PAGE 7 OF LPS-A/4 WAS GIVEN AS H EADING OF THE PAGE AS FUND RAISED BY DIRECTORS FROM COMPANY , THE AO ISSUED SEVERAL QUESTIONNAIRE TO THE ASSESSEE TO EXP LAIN ENTRIES IN THE AFORESAID PAGE, BUT THE ASSESSEE HAS FAILED TO EXPLAIN THE SAID ENTRIES. THE AO VIDE HIS LETTER DATED 28.1 0.2011 HAS ASKED TO SHRI PUKHRAJ SONI TO APPEAR BUT SHRI PUKHR AJ SONI WAS NEVER APPEARED BEFORE THE AO. IN REPLY TO SHOW CA USE NOTICE DATED 14.03.2014, THE ASSESSEE HAS STATED TH AT THE ENTRY RELATING TO MONEY ADVANCED AMOUNTING TO RS. 2,50,00,000/- IS MENTIONED IN THE COPY OF LOOSE PAP ER LPS-A/4 PAGE 7 SHOWN TO HIM DOES NOT PERTAIN TO HIM. IN THIS REGARD, THE STATEMENT OF THE ASSESSEE WAS ALSO RECORDED IN WH ICH THE ASSESSEE HAS ACCEPTED THAT HE IS KNOWN TO RITESH AJM ERA, ONE OF THE DIRECTORS OF THE COMPANY AND HAS DONE SOME TRANSACTIONS WITH HIM THROUGH BANK ONLY BUT DENIED T O ADVANCE ANY MONEY TO SHRI NILESH AJMERA AND ALSO DE NIED TO HAVE RECEIVED ANY AMOUNT AS INTEREST OF RS. 9,37,50 0/- AS SHOWN IN THE LPS-A/4 PAGE 7. HOWEVER, THE AO CONCLUD ED THAT I.T.A.O NO. 685/IND/15 AY 09-10 SHRI PUKHRAJ SONI PAGE 5 OF 23 REPLY OF THE ASSESSEE IS NOT ACCEPTABLE, BECAUSE TH E ENTRY IN THE LOOSE PAPER WAS FOUND DURING THE COURSE OF SEAR CH AND THE NAME OF THE ASSESSEE IS CLEARLY MENTIONED IN THE EN TRY. THE STATEMENT OF THE ASSESSEE WAS ALSO RECORDED ON OATH IN WHICH ASSESSEE ACCEPTED THE TRANSACTION WITH SHRI RITESH A JMERA. THE PERUSAL OF THE BANK STATEMENT WITH STATE BANK OF INDORE AND J & K BANK MAKES IT CLEAR THAT THE ASSESSEE HAS MADE VARIOUS FINANCIAL TRANSACTIONS WITH SHRI RITESH AJME RA, WHICH IS EVIDENT FROM THE RECORD AND DURING THE ASSESSMEN T PROCEEDINGS IN THE CASE OF SHRI NILESH AJMERA. ACCO RDINGLY, THE AO MADE AN ADDITION TOTALLING TO RS. 2,59,37,500/- INCLUDING INTEREST OF RS. 9,37,500/-. 4. THE MATTER CARRIED TO THE LD. CIT(A) AND THE LD. CI T(A) HAS DELETED THE ABOVE ADDITION BY RELYING THE DECIS ION PASSED IN THE CASE OF SHRI NILESH AJMERA IN ORDER NO. CIT( A)-7/IT - 922/11-12 DATED 28.03.2013 FOR THE ASSESSMENT YEAR 2009- 10 BY OBSERVING AS UNDER :- 7.5 IN THE CASE OF SHRI NILESH AJMERA, IN WHOSE CASE SUCH PAPER WAS SEIZED, ADDITION OF SUCH AMOUNT OF RS. 2.50 CRORES WAS MADE U/S 69D OF THE I.T.A.O NO. 685/IND/15 AY 09-10 SHRI PUKHRAJ SONI PAGE 6 OF 23 INCOME-TAX ACT, 1961, AND ALTERNATIVELY U/S 68 OF THE I.T. ACT. SHRI NILESH AJMERA CHALLENGED SUCH ADDITION BEFORE THE CIT(A). THE CIT(A) VIDE ORDER N O. CIT(A)-7/IT-922/11-12 DATED 28.03.2013 FOR ASSESSMENT YEAR 2009-10 DECIDED THE APPEAL IN FAVOUR OF SHRI NILESH AJMERA AND DELETED THIS ADDITION OF RS. 2.50 CRORES BY RELYING ON HIS DECIS ION FOR ASSESSMENT YEAR 2007-08, WHEREIN IT WAS HELD THAT SECTION 68 OF THE IT ACT WILL NOT APPLYING THIS CASE BECAUSE DIARY AND LOOSE SHEETS SEIZED IN THAT CASE CANNOT BE SAID BY ANY STRETCH OF IMAGINATION T O BE BOOKS OF ACCOUNTS [RELIED ON OM PRAKASH & COMPANY,(2004) 87 TTJ MUM 183] AND APPLICATION OF SECTION 69D OF THE IT ACT WAS ALSO REJECTED AS HUNDI DOCUMENTS WERE NOT FOUND [RELIED ON M/S. AGRAWAL MOTORS, (2000) 65 TTJ (JAB.) 130]. 7.6 RELYING ON THE FACTS AND CASE LAWS DISCUSSED ABOVE, RELYING ON THE DECISION OF THE CIT(A) REFERR ED IN PARA 7.5 ABOVE IN CASE OF SHRI NILESH AJMERA CONSIDERING THE FACT THAT EXCEPT MENTION OF INTERES T I.T.A.O NO. 685/IND/15 AY 09-10 SHRI PUKHRAJ SONI PAGE 7 OF 23 INSTALLMENT ON ONE PAPER SEIZED FROM THE THIRD PARTY, WHEREIN NO CORROBORATIVE EVIDENCE WAS FOUND BY THE AO TO PROVE FACTUM OF SUCH LOAN, BOTH PARTIE S TO SUCH ALLEGED LOAN DENIED THE SAME IN THEIR STATEMENTS AND EVEN HUNDI EVIDENCING SUCH LOAN WAS NOT FOUND, SUCH ADDITION OF LOAN OF RS. 2.50 CRORE AND INTEREST INCOME ADDED ON IT OF RS. 9,37,500/- CANNOT BE SUSTAINED. AS A RESULT GROUND NO. 3(A) & 3(B) OF THE APPEAL ARE ALLOWED. 5. THE LD. SR. DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDER OF THE AO. HOWEVER, HE COULD NOT CONTROV ERT THE FINDING OF THE LD. CIT(A) BY BRINGING ANY COGENT MA TERIAL ON RECORD. 6. THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE ORDER NO. CIT(A)-7/IT-922/11-12 DATED 28.03.2013 OF SHRI NILESH AJMERA WHICH IS RELIED BY THE LD. CIT(A) WHILE DELETING THE ADDITION IN THE HANDS OF T HE ASSESSEE WAS SUBJECT MATTER OF APPEAL BEFORE THIS TRIBUNAL FR OM THE SIDE OF THE REVENUE IN APPEAL NO. 251/IND/2013 FOR ASSES SMENT YEAR 2009-10 DATED 17.05.2016 VIDE GROUND NOS. 2 TO 2.3. THE I.T.A.O NO. 685/IND/15 AY 09-10 SHRI PUKHRAJ SONI PAGE 8 OF 23 GROUND OF THE DEPARTMENT WAS DISMISSED BY THIS TRIBU NAL, INDORE IN THE CASE OF SHRI NILESH AJMERA. THE ORDER OF THE CIT(A)-7 IN ORDER NO. CIT(A)-7/IT-922/11-12 DATED 2 8.03.2013 WAS CONFIRMED BY THE TRIBUNAL. THE LD. SR. DEPARTME NTAL REPRESENTATIVE COULD NOT CONTROVERT THE SUBMISSION OF THE ASSESSEE. 7. IT WAS FURTHER SUBMITTED BEFORE US THAT THE DEPARTMENTAL GROUND NOS. 2 TO 2.3 IN IT(SS)A-251/IN D/2013 IN THE CASE OF SHRI NILESH AJMERA ARE 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) IN THE CA SE OF SHRI NILESH AJMERA. THEREFORE, FINDING GIVEN IN SUC H APPEAL WILL ALSO BE APPLICABLE IN THE PRESENT CASE. IN VIEW OF THIS SUBMISSION, WE ARE REPRODUCING HEREUNDER THE RELEVA NT PORTION OF THE ORDER OF THE TRIBUNAL PASSED IN I.T. (SS)A.NO. 250/IND/2013 FOR READY REFERENCE :- DEPARTMENTAL GROUND NOS.2 TO 2.5 (SHRI NILESH AJMERA) THE REVENUE HAS TAKEN THESE GROUNDS OF APPEAL AGAINST THE ACTION OF THE LD. CIT(A) IN HOLDING THA T THE I.T.A.O NO. 685/IND/15 AY 09-10 SHRI PUKHRAJ SONI PAGE 9 OF 23 ADDITION U/S. 69D WAS NOT JUSTIFIED BECAUSE AO HAS NOT ESTABLISHED THAT THE ASSESSEE 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 ADDITIONS OF RS.92,24,410/-, RS.47,00,000/- RS.12,50,000/- AND RS.35,25,000/-. THE BRIEF FACTS RELATING TO THE GROUND ARE THAT FROM 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 SHAREHOLDE R, THE AO OBSERVED THAT THE ASSESSEE HAD BORROWED HUGE MONEY ON HUNDI FROM VARIOUS PERSONS VIZ. SHR I MANISH KEDIA, SHRI SUSHIL GOLECHA, SHRI ROHIT SETHI , SHRI NITISH DOSHI, SHRI RAJU DOSHI, K. GOYAL ETC.. ACCORDING TO THE AO, FROM THE VARIOUS NOTINGS ON VARIOUS LOOSE PAPERS, INVENTORISED AS LPS-A/23 AND A DIARY INVENTORISED AS BS-8, IT GETS ESTABLISHED T HAT THE ASSESSEE HAD BORROWED HUGE AMOUNT OF MONEY ON HUNDI FROM THESE PERSONS. ACCORDINGLY, THE AO REQUIRED THE ASSESSEE TO EXPLAIN THE NOTINGS FOUND IN VARIOUS SEIZED DOCUMENTS. THE ASSESSEE 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 BEFO RE THE AO THAT THE BORROWINGS WERE NOT MADE ON ANY HUNDI BUT SUCH BORROWINGS WERE ONLY MADE ON PROMISSORY NOTES. THE ASSESSEE STRONGLY AGITATED TH E 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 THE VIEW THAT THE ASSESSEE NEITHER FURNISHED THE SPECIFIC REPLY ON VARIOUS NOTINGS MADE REGARDING THE HUNDIES ON DIFFERENT SEIZED DOCUMENTS NOR FURNISHED THE DETAIL S OF SO CALLED MUMBAI BASED INVESTORS. ACCORDING TO THE AO, IN THE PRESENT CASE, THE AMOUNTS BORROWED I.T.A.O NO. 685/IND/15 AY 09-10 SHRI PUKHRAJ SONI PAGE 10 OF 23 BY THE ASSESSEE WERE ALSO GETTING HIT BY SECTION 68 OF THE I.T. ACT, 1961 AS THE ASSESSEE FAILED TO OFFER ANY EXPLANATION WITH REGARD TO THE VARIOUS CREDITS APPEARING 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, COMPUTER PRINT-OUTS, REPORTS, CORRESPONDENCES, DIARIES FOUND IN PHYSICAL FORM OR STORED IN ANY FORM OF ELECTRO-MAGNETIC DEVICE OR COMPUTERS SHOULD ALSO BE REGARDED AS BOOKS. HAVING HELD THE LOOSE PAPERS, DIARIES AND COMPUTER PRINT-OUTS AS BOOKS, THE AO HELD THAT ANY UNEXPLAINED CREDIT ENTRY MADE IN SUCH BOOKS WAS LIABLE FOR ADDITION UNDER S.68 OF THE ACT. ACCORDIN GLY, 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 ASSESSEE IN HIS INCOME. THE RELEVANT FINDINGS OF TH E ASSESSING OFFICER ARE RECORDED AT PARA 7.1 TO PARA 7.7 FROM PAGE NO.7 TO 9; PARA 12.1 TO PARA 12.6 FRO M PAGE NO. 68 TO 76; PARA 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 CONSIDERING 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 APPELLANTS A/R SUBMISSIONS AND ALSO TAKING NOTE OF THE FACT THAT ON SIMILAR SET OF FACTS AND CIRCUMSTANCES, THE ISSUE INVOLVED IN THE 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 OWN CASE I.T.A.O NO. 685/IND/15 AY 09-10 SHRI PUKHRAJ SONI PAGE 11 OF 23 FOR A.Y.-07-08. FOR THE SAKE OF CLARITY OF ISSUE, I CONSIDER 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 STRETCH 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. 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 CITED BY THE APPELLANTS A/R EXTRACTED AS ABOVE, I AM OF THE CONSIDERED VIEW THAT FOR MAKING ADDITION U/S 69D, IT 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 CONTEMPLATED 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 THE AVAILABILITY OF EVIDENCE OF BORROWING ON I.T.A.O NO. 685/IND/15 AY 09-10 SHRI PUKHRAJ SONI PAGE 12 OF 23 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. IT MAY ALSO BE REGARDED AS AN INDIGENOUS FORM OF A BILL OF EXCHANGE EXPRESSED IN VERNACULAR LANGUAGE WHICH HAS BEEN IN USE IN THE MERCANTILE COMMUNITY IN INDIA FOR THE PURPOSE OF COLLECTING DUES. HAVING TAKEN NOTE 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 APPELLANTS 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 SPECIALLY 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 ALSO NOT JUSTIFIED AND CORRECT. ACCORDINGLY IN MY CONSIDERED VIEW, THE A.O.S ACTION IS INCORRECT AND UNJUSTIFIED ON THIS SCORE ALSO 7.5 IN VIEW OF MY DECISION ABOVE IN A.Y.-07-08 IN THE APPELLANTS OWN CASE, I CONSIDER IT PROPER AND APPROPRIATE TO HOLD THAT THE A.O. WAS NOT JUSTIFIED IN MAKING THE ADDITION OF RS.90,24,410/- TO THE INCOME OF THE APPELLANT I.T.A.O NO. 685/IND/15 AY 09-10 SHRI PUKHRAJ SONI PAGE 13 OF 23 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 UNDER CONSIDERATION, I ALSO FIND SUBSTANCE IN THE APPELLANTS A/R CONTENTION 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 FROM 20.02.2007 TO 23.03.2007 WHICH UNDISPUTEDLY PERTAINS 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 COUNT ALONE, THE ADDITION MADE BY THE AO DOES NOT DESERVE TO SURVIVE. THUS, TAKING NOTE OF ALL THE FACTUAL POSITION OF THE CASE, THE ADDITION SO MADE BY THE A.O. IS DELETED. ACCORDINGLY THIS GROUND OF APPEAL IS ALLOWED. 8.2 I HAVE CONSIDERED THE A.O.S ORDER AS WELL AS THE APPELLANTS 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 DATED 28/03/2013 FOR A.Y.-07-08. SINCE THE FACTS OF THE CASE ARE SIMILAR 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 INCOME 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 JUSTIFIED AND CORRECT IN HIS ACTION. THUS, THE ADDITION SO MADE BY A.O. IS DELETED, 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., HENCE THIS GROUND OF APPEAL IS ALLOWED. I.T.A.O NO. 685/IND/15 AY 09-10 SHRI PUKHRAJ SONI PAGE 14 OF 23 9.4 I HAVE CONSIDERED THE A.O.S ORDER AS WELL AS THE APPELLANTS SUBMISSION. HAVING CONSIDERED THE FACTUAL POSITION OF THE CASE, I FIND THAT THE SIMILAR ISSUE I.E. THE BORROWING ON HUNDI HAS BEEN DECIDED BY ME IN FAVOUR OF THE APPELLANT VIDE MY ORDER 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. WAS NOT JUSTIFIED IN MAKING THE AFORESAID ADDITION TO THE INCOME OF THE APPELLANT. 9.5 THUS, FOLLOWING THE RULE OF CONSISTENCY, I CONSIDER IT PROPER AND APPROPRIATE TO HOLD THAT THE A.O. WAS NOT JUSTIFIED 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 APPELLANTS 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.CIT(A)-IT-920/11-12 DATED 28/03/2013 FOR A.Y.-07-08. SINCE THE FACTS OF THE CASE ARE SIMILAR TO THE 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 INCOME OF THE APPELLANT. 10.5 THUS, FOLLOWING THE RULE OF CONSISTENCY, I CONSIDER IT PROPER AND APPROPRIATE TO HOLD THAT THE A.O. WAS NOT JUSTIFIED AND CORRECT IN HIS ACTION. THUS, THE ADDITION SO MADE BY THE A.O. IS DELETED, AS IN I.T.A.O NO. 685/IND/15 AY 09-10 SHRI PUKHRAJ SONI PAGE 15 OF 23 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 WRITTEN SUBMISSION AS UNDER: IT IS SUBMITTED THAT THE ENTIRE ACTION OF THE AO IN MAKING THE ADDITION IN THE ASSESSEES INCOME U/S 69 D IS BASED UPON CERTAIN EXCEL SHEETS AND ONE DIARY I.E. BS-8 FOUND AND SEIZED DURING THE COURSE OF SEARCH. IN SU CH EXCEL SHEETS, THE DETAILS OF BORROWINGS BY THE ASSE SSEE FROM VARIOUS PERSONS WITH THE CAPTION HUNDI DETAIL S HAVE BEEN GIVEN. FURTHER, IN BS-8, THE DETAILS OF IN-FLO W OF FUNDS FROM SHRI MANISH KEDIA, SHRI SUSHIL GOLECHA, SHRI R OHIT SETHI, SHRI NITISH DOSHI/SHRI RAJU DOSHI, SHRI K. G OYAL, ETC. HAVE BEEN STATED. IT IS SUBMITTED THAT DURING THE COURSE OF THE ENTIRE 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 CONTRAVENED EITHER BY THE AO OR BY THE LEARNED DRS. IT IS SUBMITTED THAT MERE CAPTION OF CERTAIN TRANSA CTIONS 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 THE LD. AO IN THE BODY OF THE ASSESS MENT ORDER FOR MAKING THE IMPUGNED ADDITION, IT MAY BE F OUND THAT SUCH DETAILS ARE NOT GIVEN IN VERNACULAR LANGU AGE BUT THESE ARE IN ENGLISH LANGUAGE. FURTHER THESE DOCUME NTS ARE IN THE FORM OF EXCEL SHEETS IN WHICH THE DETAIL S SUCH AS THE NAME OF THE LENDER, START DATE, AMOUNT, DURATIO N, RENEW DATE, INTEREST, DALALI AND SIGNATORY OF THE DOCUMENTS ETC. HAVE BEEN GIVEN. I.T.A.O NO. 685/IND/15 AY 09-10 SHRI PUKHRAJ SONI PAGE 16 OF 23 THE FACT REMAINED THAT THE ASSESSEE THAT HE HAD NOT BORROWED ANY LOAN ON HUNDI BUT THE ENTIRE BORROWING S WERE MADE BY HIM, ON BEHALF OF OTHERS, THROUGH THE INSTRUMENT OF PROMISSORY NOTES ONLY. MERELY BECAUSE THERE IS AN ERRONEOUS MENTIONING WITH THE TITLE 'HUNDI DE TAILS OF MANISH KEDIA', ON PAGE NO. 163 OF LPS-A/23, WOULD N OT PER SE CHANGE THE VERY NATURE AND CHARACTER OF THE INSTRUMENT OF BORROWING ON 'PROMISSORY NOTE' TO 'HU NDI'. IT IS SUBMITTED THAT THERE IS A CLEAR CUT DISTINCTION BETWEEN THE TERM 'HUNDI' AND 'PROMISSORY NOTE'. THE TERM 'PROMISSORY NOTE' HAS BEEN DEFINED UNDER SECTION 4 OF THE NEGOTIABLE INSTRUMENTS ACT, 1881 AS UNDER: A 'PROMISSORY NOTE' IS AN INSTRUMENT IN WRITING (NOT BEING A BANK-NOTE OR A CURRENCY-NOTE) CONTAINI NG AN UNCONDITIONAL UNDERTAKING, SIGNED BY THE MAKER, 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.' HOWEVER, THE TERM 'HUNDI' HAS NEITHER BEEN DEFINED UNDER THE NEGOTIABLE INSTRUMENTS ACT, 1881 NOR UNDER THE INCOME-TAX AT, 1961 BUT, IN THE COMMON PARLANCE, THE TERM 'HUNDI' IS REGARDED AS A BILL OF EXCHANGE, AS DEFINED UNDER SECTION 5 OF THE NEGOTIABLE 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 WRITIN G CONTAINING AN UNCONDITIONAL ORDER, SIGNED BY THE MAKER, DIRECTING A CERTAIN PERSON TO PAY A CERTAIN SUM OF MONEY ONLY TO, OR TO THE ORDER 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 INSTRUMENTS ACT, 1881, ONE CAN FIND THAT WHILE THERE IS A SIMILARITY IN BOTH THE INSTRUMENTS AS I.T.A.O NO. 685/IND/15 AY 09-10 SHRI PUKHRAJ SONI PAGE 17 OF 23 REGARD TO THE PAYMENT OF A CERTAIN SUM OF MONEY BY A PERSON TO SOME OTHER THERE IS A CLEAR DISTINCTION IN BOTH THE INSTRUMENTS AS REGARD TO THE SIGNATORY OF THE INSTRUMENT AND NUMBER OF PARTIES INVOLVED. IN THE CASE OF PROMISSORY NOTE, IT IS THE BORROWER ONLY WH O IS REQUIRED TO PUT HIS SIGNATURE ON THE INSTRUMENT AND THE SIGNATURE OF THE LENDER IS NOT REQUIRED. FURTHE R, IN THE CASE OF PROMISSORY NOTE, THE BORROWER PROMISES TO PAY A CERTAIN SUM EITHER TO THE LENDER OR THE BE ARER OF THE INSTRUMENT. HOWEVER, IN THE CASE OF 'BILLS O F EXCHANGE', IT IS THE LENDER WHO ISSUES AN UNCONDITIONAL ORDER IN WRITING UNDER HIS SIGNATURE TO THE BORROWER, DIRECTING THE BORROWER TO PAY A CERTA IN SUM OF MONEY EITHER TO A THIRD PERSON OR TO ANY OTH ER PERSON TO THE ORDER OF THE THIRD PERSON OR TO THE BEARER OF THE INSTRUMENT. THUS, IT IS APPARENT THAT THE PROMISSORY NOTE IS ALWAYS A BILATERAL TRANSACTION WHEREAS A HUNDI IS ALWAYS A TRIPARTITE TRANSACTION. IT IS FURTHER SUBMITTED THAT THE CBDT VIDE ITS CIRC ULAR NO.208, DATED 15 NOVEMBER, 1976 POINTS OUT THAT 'HUNDI' HAS NOT BEEN DEFINED UNDER THE INCOME-TAX ACT, 1961 AND THAT IN COMMON PARLANCE, ANY INDIGENOUS INSTRUMENT IN VERNACULAR WHICH CAN BE USED BY THE HOLDER 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 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. 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 SUBSEQUENT CIRCULAR NO.221 DATED 6 TH JUNE, 1977, HAS REITERATED THAT A HUNDI IN COMMON PARLANCE DENOTES AN INDIGENOUS FORM OF BILL OF EXCHANGE, BY AND LARGE IN VERNACULAR LANGUAGE, WHICH IS BEING USED BY THE MERCANTILE COMMUNITY IN I.T.A.O NO. 685/IND/15 AY 09-10 SHRI PUKHRAJ SONI PAGE 18 OF 23 INDIA. FROM BOTH THE CIRCULARS, IT BECOMES APPARENT AND EVIDENT THAT THE MOST IMPORTANT INGREDIENT OF A NY INSTRUMENT FOR IT TO BE REGARDED AS A 'HUNDI' IS TH AT 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 RESPEC T OF THE NOTINGS FOUND MADE IN BS-8 DIARY AND OTHER LOOS E PAPERS. CONSEQUENTLY, NO ADDITION COULD HAVE BEEN MADE BY THE AO BY INVOKING PROVISIONS OF S. 69D / 68. ACCORDINGLY, THE ACTION OF THE CIT(A) ON THIS C OUNT DESERVES TO BE UPHELD. LD. DR RELIED ON THE ORDER OF THE AO. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT IN THE INSTANT CASE, THE AO HA S MADE ADDITION ON THE BASIS OF ONE DIARY BS-8, CERTA IN EXCEL SHEETS IN WHICH DETAILS OF BORROWINGS BY ASSESSEE FROM VARIOUS PERSONS WITH HUNDI DETAILS HAVE BEEN GIVEN. DURING THE COURSE OF ENTIRE SEARCH PROCEEDINGS, NOT A SINGLE HUNDI WAS FOUND, THEREFOR E, 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 PROVISIONS OF S. 69D THERE MUST BE AN EXISTENCE OF HUNDI AND UNLESS AND UNTIL ONE DOCUMENT 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 HUNDI TRANSACTIONS AND IF A TRANSACTION IS BILATERAL IT IS A VERY STRONG INDICATION TO SHOW TH AT IT IS NOT A HUNDI TRANSACTION. THE COORDINATE MUMBAI F BENCH IN THE CASE OF ACIT VS. OM PRAKASH & CO. I.T.A.O NO. 685/IND/15 AY 09-10 SHRI PUKHRAJ SONI PAGE 19 OF 23 (2004) 87 TTJ 183 (MUM.), AT PARA 60 HAS HELD THAT THE EXISTENCE OF HUNDI IS A MUST FOR INVOKING THE PROVISIONS OF S. 69D OF THE ACT. FURTHER, THIS HON BLE BENCH IN THE CASE OF GHANSHYAM CLOTH SYNDICATE VS. ITO (1984) 19 TTJ (IND.)569 HAS HELD THAT ONCE THER E IS A FINDING THAT THERE WAS NO EXECUTION OF ANY HUN DI 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 THE 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 THE NAME OF THE ASSESSEE AS THE SIGNATORY OF THE DOCUMENT. IN SUCH CIRCUMSTANCES, RELYING 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 CANNOT BE MADE APPLICABLE TO SUCH BORROWINGS . ACCORDINGLY, THERE IS NO INFIRMITY IN THE CIT(A)S ORDER IN HOLD ING THAT THE BORROWINGS MADE BY THE ASSESSEE FROM VARIOUS PERSONS WERE NOT COVERED BY S. 69D OF THE ACT. THE BS-8 DIARY OR EXCEL SHEETS, IN WHICH THE TRANSACTIONS OF THE BORROWINGS WERE NOTED DOWN, CANNOT BE REGARDED AS BOOKS OF ACCOUNT AS CONTEMPLATED UNDER THE PROVISIONS OF S. 2(12A) OF THE 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 DECISI ON OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. TAJ BOREWELLS (2007) 291 ITR 232 (MAD.). IN THE SIMILAR CIRCUMSTANCES THE COORDINATE MUMBAI 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 I.T.A.O NO. 685/IND/15 AY 09-10 SHRI PUKHRAJ SONI PAGE 20 OF 23 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 ASSESSEE. IN THE CASE OF CENTRAL BUREAU OF INVESTIGATION VS. V.C. SHUKLA & ORS. (199 8) 3 SCC 410, THE APEX COURT HAS LAID DOWN THAT 'BOOK' ORDINARILY 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 EASILY DETACHED AND REPLACED. IN TH E PRESENT CASE, THE MEHUL NOTE BOOK AS WE HAVE CONCLUDED ABOVE HAS NOT BEEN MAINTAINED BY THE ASSESSEE FOR KEEPING THE ACCOUNTS OF ITS BUSINESS. AS STATED ABOVE, THIS BOOK PERTAINS TO MR. PARAS RAM ROHIRA, THEREFORE, THE SAME HAS BEEN WRITTEN BY HIM FOR KEEPING HIS ACCOUNTS. IN THIS NOTE BOOK ONLY TW O PAGES ARE WRITTEN, WHICH CAN ALSO BE EASILY REMOVED . THIS IS A ROUGH NOTE BOOK, THE PAGES OF, WHICH CAN ALSO BE EASILY REMOVED. THEREFORE, IT CANNOT BE CONSIDERED AS A BOOK AS THE SHEETS OF THIS NOTE BOO K 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 ARE NOT APPLICABLE TO THIS CASE. FURTHER, THE ITAT, MUMBAI BENCH IN THE CASE OF BIRE N V. SAVLA VS. ACIT (2006) 100 TTJ 1006 (MUM.) HAS HELD THAT THE MEMORANDUM OF TRANSACTIONS BETWEEN LENDERS AND BORROWERS ENTERED IN A DIARY CANNOT BE REGARDED AS CASH BOOK OR LEDGER AND, THEREFORE, ON THE BASIS OF SUCH NOTINGS THE PROVISIONS OF S. 68 CANNOT BE INVOKED. I.T.A.O NO. 685/IND/15 AY 09-10 SHRI PUKHRAJ SONI PAGE 21 OF 23 IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, AND VARIOUS JUDICIAL PRONOUNCEMENTS, THE PROVISIONS OF S. 68 CANNOT BE INVOKED. EVEN OTHERWISE, THE AO HIMSELF AT VARIOUS PLACES IN THE BODY OF THE ASSESSMENT ORDER HAS FIRMLY STATED THAT THE ASSESSEE HAD BORROWED FUNDS FROM VARIOUS PERSONS AND, 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 REGARDING THE SAME AS HIS UNDISCLOSED INCOME. FOR SUCH PROPOSITION, WE RELY O N THE DECISION OF HONBLE ITAT JODHPUR BENCH IN THE CASE OF SUNIL RATHI ALIAS JITENDRA RATHI VS. ACIT (2007) 112 TTJ (JD.) 545 HOLDING THAT RECEIPT OF A LOAN CANNOT BE REGARDED AS AN INCOME OF AN ASSESSEE. IN VIEW OF ABOVE DISCUSSION, WE DISMISS THIS ISSUE OF THE DEPARTMENTAL APPEAL. 8. WE HAVE CONSIDERED THE FACTS AND MATERIALS AVAILABL E ON RECORD. ON CONSIDERATION OF ABOVE FACTS AND CIRC UMSTANCES, WE FIND THAT NO SEARCH WAS CARRIED OUT IN THE PREMISE S OF SHRI PUKHRAJ SONI AND NO LOOSE PAPER/ HUNDI/ DOCUMENTS/ PROMISSORY NOTE/ CASH BOOK OR CASH FLOW STATEMENT WER E FOUND OR SEIZED, WHICH COULD PROVE THE MOVEMENT OF C ASH TO & FRO BETWEEN SHRI PUKHRAJ SONI & SHRI NILESH AJMERA WITH RESPECT TO INTEREST AND LOANS. WE FIND THAT THE AO FAILED TO BRING ON RECORD ANY CORROBORATIVE AND CONCRETE EVID ENCE AGAINST THE ASSESSEE WHICH COULD PROVE THAT THE ASSE SSEE HAS I.T.A.O NO. 685/IND/15 AY 09-10 SHRI PUKHRAJ SONI PAGE 22 OF 23 ADVANCED MONEY TO SHRI NILESH AJMERA. THE INFERENCE OF THE AO THAT THE ASSESSEE HAS ADVANCED THE MONEY IS MERE LY BASED ON SUSPICION, SURMISES AND CONJECTURES AND THERE WAS NO MATERIAL TO SUPPORT THE CONCLUSION OF THE AO THAT T HE ASSESSEE HAS ADVANCED THE MONEY. WE DERIVE SUPPORT FROM THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF DHAKESHWARI COTTON MILL PVT.LTD. VS. CIT, (1954) 26 ITR 775 ( S. C.), WHEREIN IT WAS HELD THAT WHILE MAKING AN ASSESSMENT THERE MUST BE SOMETHING MORE THAN THE BARE SUSPICION TO SUPPORT T HE ASSESSMENT. IN ANOTHER CASE OF K.P. VARGHESE VS. I TO, (1981) 131 ITR 597 ( S.C.), THE HON'BLE SUPREME COURT HAS HELD THAT MERE SEIZURE OF NOTE BOOKS OF DOCUMENTS AT THE PERS ONAL RESIDENCE OF AN EMPLOYEE WOULD NOT CONCLUDE THE ISS UE AGAINST THE EMPLOYER COMPANY THAT THE ON MONEY HAS BEEN REC EIVED BY THE EMPLOYER COMPANY. THE ONUS OF PROVING THE CHAR GING OF ON MONEY LIES ON THE REVENUE. FURTHER, THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF ACIT VS. LATA MANGESHKAR (MISS) (1974) 97 ITR 696 (BOM), HAS HELD THAT NO ADDITION COULD BE MADE IN THE HANDS OF THE ASSESSEE ON THE BASIS OF N OTINGS FOUND IN THE BOOKS OF THIRD PERSON. I.T.A.O NO. 685/IND/15 AY 09-10 SHRI PUKHRAJ SONI PAGE 23 OF 23 9. IN VIEW OF FACTS AND CIRCUMSTANCES NARRATED ABOVE, W E FIND THAT THIS ISSUE IS COVERED BY THE DECISION OF THIS TRIBUNAL IN THE CASE OF SHRI NILESH AJMERA ([IT(SS)A NOS.250 & 251/IND/2013, ORDER DATED 17.5.2016] (SUPRA). EVEN BEFORE US, LD. SR. DEPARTMENTAL REPRESENTATIVE WAS NOT ABLE TO CONTROVERT THE FINDING OF THE LD. CIT(A) AS WELL AS THE SUBMISSION OF THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE BY BRINGING ANY CONTRARY MATERIAL ON RECOR D. THUS, FOLLOWING THE ORDER OF THIS TRIBUNAL (SUPRA) IN THE LIGHT OF ABOVE JUDICIAL PRONOUNCEMENTS, WE DISMISS THE PRESENT APPE AL OF THE REVENUE I.E. I.T.A.NO.585/IND/2015 FOR ASSESSMENT Y EAR 2009-10. 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED. THE ORDER HAS BEEN PRONOUNCED IN OPEN COURT ON THE 21 ST SEPTEMBER, 2016. SD/- (D.T.GARASIA) JUDICIAL MEMBER SD/- (O.P.MEENA) ACCOUNTANT MEMBER DATED : 21 ST SEPTEMBER, 2016. CPU* 89
