R.Ellalan, Erode V. DCIT, Coimbatore

ITA 592/CHNY/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6089 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 6 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 26-07-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 14-03-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: S SRIDHAR SMT RU G
• Keywords: Unexplained investment; Unexplained expenditure; Gift; Business income; Search and seizure
• Section: 69C; 143(3); 133A; 153A; 147; 131; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , . !' , $ % BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NOS.216 & 217/MDS/2013 ./ ITA NOS.1315 & 1316/MDS/2016 ' (' / ASSESSMENT YEARS : 2006-07 & 2009-10 SHRI A. RAMALINGAM, L/H SHRI R. RAVANAN, 279, 279/1,2&4, SATHY MAIN ROAD, ERODE 638 003. PAN : AGGPR 7344 N V. (1) THE INCOME TAX OFFICER, WARD 1(1), ERODE 1. (2) THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1, COIMBATORE. (*+/ APPELLANT) (,-*+/ RESPONDENT) ./ ITA NO.591/MDS/2016 ' (' / ASSESSMENT YEAR : 2011-12 SHRI R. RAVANAN, 279/2, SATHY ROAD, ERODE 638 003. PAN : AGGPR 6530 G V. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1, COIMBATORE. (*+/ APPELLANT) (,-*+/ RESPONDENT) ./ ITA NO.590/MDS/2016 ' (' / ASSESSMENT YEAR : 2012-13 SHRI R. TAMILARASAN, 279/2, SATHY ROAD, ERODE 638 003. PAN : ADJPT 0699 N V. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1, COIMBATORE. (*+/ APPELLANT) (,-*+/ RESPONDENT) 2 I.T.A. NOS.216 & 217/MDS/2013 I.T.A. NOS.1315 & 1316/MDS/2016 I.T.A. NOS.590 TO 592/MDS/201 6 I.T.A. NO.1443/MDS/ 2016 I.T.A. NO.568/MDS /2016 ./ ITA NO.592/MDS/2016 ' (' / ASSESSMENT YEAR : 2012-13 SHRI R. ELLAN, 279/2, SATHY ROAD, ERODE 638 003. PAN : AAFPE 9379 M V. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1, COIMBATORE. (*+/ APPELLANT) (,-*+/ RESPONDENT) ./ ITA NO.1443/MDS/2016 ' (' / ASSESSMENT YEAR : 2009-10 THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE I, AAYAKAR BHAVAN, 63, RACE COURSE ROAD, COIMBATORE 641 018. V. LATE SHRI A. RAMALINGAM, BY L/H SHRI R. RAVANAN, C/O BHARANI PIPES & TUBES (P) LTD., 279, SATHY ROAD, ERODE 638 003. (*+/ APPELLANT) (,-*+/ RESPONDENT) ./ ITA NO.568/MDS/2016 ' (' / ASSESSMENT YEAR : 2008-09 THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE I, AAYAKAR BHAVAN, 63, RACE COURSE ROAD, COIMBATORE 641 018. V. SHRI R. RAVANAN, NO.98, VISHNU APARTMENTS, SANJAY NAGAR, ERODE-638 001. (*+/ APPELLANT) (,-*+/ RESPONDENT) './ 0 1 /ASSESSEES BY : SHRI S. SRIDHAR, ADVOCATE 2 0 1 /REVENUE BY : SMT. RUBY GEORGE, CIT 3 0 /$ / DATE OF HEARING : 31.07.2017 4!( 0 /$ / DATE OF PRONOUNCEMENT : 27.09.2017 3 I.T.A. NOS.216 & 217/MDS/2013 I.T.A. NOS.1315 & 1316/MDS/2016 I.T.A. NOS.590 TO 592/MDS/201 6 I.T.A. NO.1443/MDS/ 2016 I.T.A. NO.568/MDS /2016 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: ALL THE APPEALS OF THE ASSESSEE AND REVENUE ARE DIRECTED AGAINST THE RESPECTIVE ORDERS OF THE COMMISSIONER O F INCOME TAX (APPEALS). SINCE COMMON ISSUES ARISE FOR CONSIDERA TION IN ALL THESE APPEALS, WE HEARD THESE APPEALS TOGETHER AND DISPOS ING OF THE SAME BY THIS COMMON ORDER. 2. THERE WAS A DELAY OF 4 DAYS IN FILING THE APPEAL IN I.T.A. NO.568/MDS/2016 BY THE REVENUE. THE REVENUE HAS FI LED A PETITION FOR CONDONATION OF DELAY. WE HAVE HEARD T HE LD. D.R. AND THE LD.COUNSEL FOR THE ASSESSEE. WE FIND THAT THER E WAS SUFFICIENT CAUSE FOR NOT FILING THE APPEAL BEFORE THE STIPULAT ED TIME. THEREFORE, WE CONDONE THE DELAY AND ADMIT THE APPEAL. 3. LETS FIRST TAKE I.T.A. NO.216/MDS/2013. 4. SHRI S. SRIDHAR, THE LD.COUNSEL FOR THE ASSESSEE , SUBMITTED THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRA DING IN PVC PIPES & FITTINGS AND G.I. PIPES & FITTINGS IN THE N AME AND STYLE OF 4 I.T.A. NOS.216 & 217/MDS/2013 I.T.A. NOS.1315 & 1316/MDS/2016 I.T.A. NOS.590 TO 592/MDS/201 6 I.T.A. NO.1443/MDS/ 2016 I.T.A. NO.568/MDS /2016 PAVENDER AGENCY AT ERODE. ACCORDING TO THE LD. COU NSEL, THERE WAS SURVEY OPERATION IN THE PREMISES OF THE ASSESSE E UNDER SECTION 133A OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') ON 17.11.2009. CONSEQUENT TO THE SURVEY OPERATION, A NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED ON 31.01.2011 FOR REOPENING THE ASSESSMENT UNDER SECTION 147 OF THE ACT. DURING TH E COURSE OF SURVEY OPERATION, ACCORDING TO THE LD. COUNSEL, THE REVENUE AUTHORITIES CLAIMED TO HAVE FOUND TWO RECEIPTS WITH REGARD TO PURCHASE OF LAND FROM ONE SHRI S.I. BASHEER AHMED. AS PER THE SALE AGREEMENT, THE ASSESSEE AGREED TO PURCHASE 57. 38 ACRES OF LAND AT SENKULAM VILLAGE, K. ABISEKAPURAM, TRICHY. ACCORDING TO THE LD. COUNSEL, SHRI BASHEER AHMED WAS ALSO EXAMIN ED BY THE REVENUE AUTHORITIES DURING THE COURSE OF SURVEY OPE RATION. THE REVENUE AUTHORITIES FOUND THAT THERE WAS A DIFFEREN CE OF ` 2.38 CRORES FOR THE ASSESSMENT YEAR 2006-07. 5. THE LD.COUNSEL FOR THE ASSESSEE FURTHER SUBMITTE D THAT DURING THE COURSE OF ASSESSMENT PROCEEDING, SHRI BA SHEER AHMED FILED AN AFFIDAVIT SAYING THAT HE HAS NOT RECEIVED ANY MONEY AS PER THE ORIGINAL AGREEMENT SAID TO BE IMPOUNDED BY THE REVENUE 5 I.T.A. NOS.216 & 217/MDS/2013 I.T.A. NOS.1315 & 1316/MDS/2016 I.T.A. NOS.590 TO 592/MDS/201 6 I.T.A. NO.1443/MDS/ 2016 I.T.A. NO.568/MDS /2016 AUTHORITIES DURING THE COURSE OF SURVEY OPERATION O N 17.11.2009. ACCORDING TO THE LD. COUNSEL, IN ANSWER TO QUESTION NO.14, SHRI BASHEER AHMED ADMITTED THAT THE ASSESSEE HAS PAID O NLY ` 54 LAKHS TO HIM, OUT OF WHICH, ` 22,50,000/- WAS PAID TO HIM DIRECTLY. REGARDING ` 31,50,000/-, ACCORDING TO THE LD. COUNSEL, SHRI BAS HEER AHMED APPEARS TO HAVE TOLD THE REVENUE AUTHORITIES THAT THE ASSESSEE HAS SPENT THE MONEY TOWARDS COURT CASES. IN FACT, THE ASSESSEE OFFERED A SUM OF ` 1 CRORE FOR TAXATION DURING THE COURSE OF SURVEY OPERATION. ACCORDING TO THE LD. COUNSEL, WH EN THE RECIPIENT HAS DENIED RECEIPT OF ANY MONEY DURING THE COURSE O F EXAMINATION, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING AD DITION OF ` 2.38 LAKHS. SHRI BASHEER AHMED HAS ALSO FILED AN AFFIDA VIT BEFORE THE ASSESSING OFFICER DENYING THE RECEIPT OF MONEY. IN THE ABSENCE OF ANY MATERIAL DOCUMENT, ACCORDING TO THE LD. COUNSEL , THERE CANNOT BE ANY ADDITION ON THE BASIS OF THE SO-CALLED AGREE MENT SAID TO BE FOUND DURING THE COURSE OF SURVEY OPERATION. THE S TATEMENT MADE IN THE AFFIDAVIT BEFORE THE ASSESSING OFFICER CANNO T BE REJECTED SO LIGHTLY. HENCE, ACCORDING TO THE LD. COUNSEL, THE CIT(APPEALS) IS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF ` 2.38 LAKHS. 6 I.T.A. NOS.216 & 217/MDS/2013 I.T.A. NOS.1315 & 1316/MDS/2016 I.T.A. NOS.590 TO 592/MDS/201 6 I.T.A. NO.1443/MDS/ 2016 I.T.A. NO.568/MDS /2016 6. ON THE CONTRARY, SMT. RUBY GEORGE, THE LD. DEPAR TMENTAL REPRESENTATIVE, SUBMITTED THAT THERE WAS SURVEY OPE RATION IN THE PREMISES OF THE ASSESSEE ON 17.11.2009. ACCORDING TO THE LD. D.R., DURING THE COURSE OF SURVEY OPERATION, INCRIM INATING MATERIALS WERE FOUND. THE ASSESSEE WAS ALSO EXAMINED DURING THE COURSE OF SURVEY OPERATION. IT WAS FOUND DURING THE COURSE O F SURVEY OPERATION THAT THE ASSESSEE IS ENGAGED IN THE BUSIN ESS OF REAL ESTATE ALSO. ACCORDING TO THE LD. D.R., THE ASSESS EE ENTERED INTO A SALE AGREEMENT WITH ONE SHRI BASHEET AHMED, TRICHY FOR PURCHASE OF 200 ACRES AND 57 ACRES RESPECTIVELY. TWO RECEIP TS WERE FOUND WHICH WERE IMPOUNDED DURING THE COURSE OF SURVEY OP ERATION. APART FROM THAT, THREE SALE AGREEMENTS WERE ALSO FO UND. ACCORDING TO THE LD. D.R., SALE AGREEMENTS DATED 27.04.2005 A ND 11.06.2005 WERE IMPOUNDED DURING THE COURSE OF SURVEY OPERATIO N. THE SALE AGREEMENTS WERE FOR ` 2 CRORES AND ` 11 CRORES FOR AN AREA OF 7.38 ACRES AND 50 ACRES OF LAND RESPECTIVELY SITUATED AT SENKULAM VILLAGE, K. ABISEKAPURAM, TRICHY. THE CASH RECEIPT IMPOUND DISCLOSES THE RECEIPT OF ALL THE MONEY BY SHRI BASH EER AHMED APART FROM BALANCE OF ` 10,62,00,000/- FOR THE EXTENT OF 57.38 ACRES. 7 I.T.A. NOS.216 & 217/MDS/2013 I.T.A. NOS.1315 & 1316/MDS/2016 I.T.A. NOS.590 TO 592/MDS/201 6 I.T.A. NO.1443/MDS/ 2016 I.T.A. NO.568/MDS /2016 ACCORDING TO THE LD. D.R., SHRI BASHEER AHMED WAS A LSO EXAMINED. HE ADMITTED THE CORRECTNESS OF RECEIPTS FOUND DURIN G THE COURSE OF SURVEY OPERATION. THE ASSESSEE ADMITTED A SUM OF ` 1 CRORE DURING THE COURSE OF SURVEY OPERATION. THEREFORE, ACCORDI NG TO THE LD. D.R., THERE WAS A DIFFERENCE OF ` 1.38 CRORES. 7. THE LD. DEPARTMENTAL REPRESENTATIVE FURTHER SUBM ITTED THAT IN THE STATEMENT GIVEN BY THE ASSESSEE, HE ADMITTED THAT ` 50 LAKHS WAS PAID AS PER AGREEMENT DATED 27.04.2005 AND ANOT HER ` 25 LAKHS WAS PAID AS PER AGREEMENT DATED 11.06.2005. THE ASSESSEE HAS ALSO AGREED THAT A SUM OF ` 25 LAKHS WAS PAID DURING THE FINANCIAL YEAR 2005-06. ACCORDING TO THE LD. D.R., SINCE THE ASSESSEE IS NO MORE, THE ASSESSEES ONE SHRI R. RAV ANAN APPEARED BEFORE THE ASSESSING OFFICER ON 16.12.2011 . SHRI BASHEER AHMED FILED AN AFFIDAVIT STATING THAT HE HA S NOT RECEIVED ANY MONEY AS PER THE ORIGINAL AGREEMENT IMPOUNDED B Y THE REVENUE AUTHORITIES DURING THE COURSE OF SURVEY CON DUCTED ON 17.11.2009. ACCORDING TO THE LD. D.R., SINCE THIS AFFIDAVIT WAS FILED AT FAG END OF THE ASSESSMENT PROCEEDING, THE ASSESS ING OFFICER REJECTED THE AFFIDAVIT AND ASSESSED ` 2.38 CRORES AS INCOME OF THE 8 I.T.A. NOS.216 & 217/MDS/2013 I.T.A. NOS.1315 & 1316/MDS/2016 I.T.A. NOS.590 TO 592/MDS/201 6 I.T.A. NO.1443/MDS/ 2016 I.T.A. NO.568/MDS /2016 ASSESSEE, THEREFORE, THE CIT(APPEALS) HAS RIGHTLY C ONFIRMED THE ORDER OF THE ASSESSING OFFICER. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THERE WAS SURVEY OPERATION UNDER SECTION 133A OF THE ACT IN THE BUSINESS PREMISES OF THE ASSESSEE. THE ASSESSEE SHRI A. RAM ALINGAM WAS NO MORE EVEN DURING THE ASSESSMENT PROCEEDING. THE REFORE, THE PROCEEDING WAS CONTINUED AGAINST THE LEGAL REPRESEN TATIVE OF THE ASSESSEE. IT IS NOT IN DISPUTE THAT THERE WAS AN A GREEMENT BETWEEN SHRI A. RAMALINGAM, THE DECEASED ASSESSEE AND SHRI S.I. BASHEER AHMED FOR PURCHASE OF LAND AT SENKULAM VILLAGE, K. ABISEKAPURAM, TRICHY. EVEN THOUGH THE AGREEMENT WAS FOR PURCHASE OF 2.57 ACRES, THE DISPUTE IS WITH REGARD TO PURCHASE OF 57.38 ACR ES. THE AGREEMENT DISCLOSES THE PAYMENT OF ALL THE MONEY IN CASH APART FROM BALANCE OF ` 10.62 CRORES FOR THE LAND OF 57.38 ACRES. DURING THE EXAMINATION, THE ASSESSEE CLAIMED BEFORE THE RE VENUE AUTHORITIES THAT HE PAID ONLY ` 1 CRORE. SHRI S.I. BASHEER AHMED WAS ALSO EXAMINED. INITIALLY HE ACCEPTED THE RECEI PT. SUBSEQUENTLY, HE FILED AN AFFIDAVIT DURING THE COUR SE OF ASSESSMENT 9 I.T.A. NOS.216 & 217/MDS/2013 I.T.A. NOS.1315 & 1316/MDS/2016 I.T.A. NOS.590 TO 592/MDS/201 6 I.T.A. NO.1443/MDS/ 2016 I.T.A. NO.568/MDS /2016 PROCEEDING THAT HE HAS NOT RECEIVED ANY MONEY AS FO UND IN THE AGREEMENT FROM THE ASSESSEE. 9. FROM THE ORDERS OF THE LOWER AUTHORITIES IT APPE ARS THAT THERE WAS CIVIL DISPUTE PENDING BEFORE PRINCIPAL SUB-JUDG E, TRICHY. SHRI BASHEER AHMED APPEARS TO HAVE AGREED TO SELL THE PR OPERTY AFTER DISPOSAL OF CIVIL DISPUTE PENDING BEFORE PRINCIPAL SUB-JUDGE. SHRI BASHEER AHMED AGREED DURING THE COURSE OF EXAMINATI ON THAT HE RECEIVED ` 22,50,000/- DIRECTLY FROM THE ASSESSEE SHRI A. RAMALINGAM. HE ALSO EXPLAINED BEFORE THE ASSESSING OFFICER THAT THE BALANCE OF ` 31,50,000/- WAS SPENT IN COURT CASES. THE CIT(APPEALS) ALSO FOUND THAT SHRI BASHEER AHMED WAS ONLY POWER AGENT OF SMT. OORANBIBI. FROM THE ORDER OF THE CIT (APPEALS) IT APPEARS THAT SHRI BASHEER AHMED WAS INTERROGATED BY THE ASSISTANT DIRECTOR OF INVESTIGATION. HE STATED THAT HE HAS N OT RECEIVED ANY MONEY AS PER ORIGINAL AGREEMENT IMPOUNDED DURING SU RVEY OPERATION ON 17.11.2009. IN FACT, THE CIT(APPEALS) HAS OBSERVED AS FOLLOWS:- AS SEEN FROM THE RECEIPT IMPOUNDED AS NO.3, THERE IS NO DATE MENTIONED REGARDING THE AMOUNTS RECEIVED BY SH RI S.I. BASHEER AHMED. THE RECEIPT IS NIL DATED. EVEN DURI NG THE 10 I.T.A. NOS.216 & 217/MDS/2013 I.T.A. NOS.1315 & 1316/MDS/2016 I.T.A. NOS.590 TO 592/MDS/201 6 I.T.A. NO.1443/MDS/ 2016 I.T.A. NO.568/MDS /2016 COURSE OF INTERROGATION BY THE ASSISTANT DIRECTOR O F INVESTIGATION, TRICHY, SHRI S.I. BASHEER AHMED STATE D THAT HE HAS NOT RECEIVED ANY MONEY AS PER THE ORIGINAL A GREEMENT IMPOUNDED DURING THE SURVEY CONDUCTED ON 17.11.2009. 10. IN VIEW OF ABOVE OBSERVATION OF THE CIT(APPEALS ), IT CANNOT BE SAID THAT THE ASSESSEE HAS PAID ` 2.38 CRORES TO SHRI BASHEER AHMED. WHEN SHRI BASHEER AHMED DENIED THE FACT OF RECEIPT OF MONEY, IT CANNOT BE CONCLUDED THAT THE ASSESSEE HAS PAID ` 2.38 CRORES TO SHRI BASHEER AHMED. AS PER THE OBSERVATI ON MADE BY THE LOWER AUTHORITIES, AGREEMENT FOR SALE WAS FOR S ALE OF PROPERTY AFTER DISPOSAL OF CASES PENDING BEFORE PRINCIPAL SU B-JUDGE AT TRICHY. WHEN THE MATTER WAS PENDING BEFORE THE PRI NCIPAL SUB- JUDGE FOR ADJUDICATION AND THE POWER OF ATTORNEY, W HO ENTERED INTO THE AGREEMENT, CLAIMED THAT HE HAS NOT RECEIVED ANY MONEY, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THERE CA NNOT BE ANY PRESUMPTION THAT THE ASSESSEE HAS PAID ` 2.38 CRORES TO SHRI BASHEER AHMED. THE ASSESSMENT PROCEEDING BEING A J UDICIAL PROCEEDING, THIS TRIBUNAL IS OF THE CONSIDERED OPIN ION THAT ADDITION HAS TO BE MADE ONLY ON THE BASIS OF CONCRETE EVIDEN CE. PRESUMPTION AND SURMISE HAVE NO ROLE TO PLAY IN JUD ICIAL PROCEEDING. THEREFORE, THE ADDITION OF ` 2.38 CRORES MADE BY THE 11 I.T.A. NOS.216 & 217/MDS/2013 I.T.A. NOS.1315 & 1316/MDS/2016 I.T.A. NOS.590 TO 592/MDS/201 6 I.T.A. NO.1443/MDS/ 2016 I.T.A. NO.568/MDS /2016 ASSESSING OFFICER AS CONFIRMED BY THE CIT(APPEALS) CANNOT STAND FOR THE SCRUTINY OF LAW. ACCORDINGLY, THE ORDERS O F BOTH THE AUTHORITIES BELOW ARE SET ASIDE AND THE ADDITION OF ` 2.38 CRORES IS DELETED. 11. NOW COMING TO ASSESSEES APPEAL IN I.T.A. NO.217/MDS/2013. 12. THE MAIN OBJECTION OF THE LD.COUNSEL FOR THE AS SESSEE IS THAT THERE WAS SEARCH OPERATION IN THE PREMISES OF THE A SSESSEE ON 18.11.2011. THE ASSESSMENT PROCEEDING WAS PENDING FOR THE ASSESSMENT YEAR 2009-10. REFERRING TO THE SECOND P ROVISO TO SECTION 153A OF THE ACT, THE LD.COUNSEL SUBMITTED T HAT THE PENDING ASSESSMENT PROCEEDING ON THE DATE OF INITIATION OF SEARCH UNDER SECTION 132A OF THE ACT SHALL ABATE AND THE ASSESSI NG OFFICER HAS TO PASS AN ORDER UNDER SECTION 153A OR UNDER SECTIO N 153C OF THE ACT. THEREFORE, ACCORDING TO THE LD. COUNSEL, THE ORDER PASSED BY THE ASSESSING OFFICER ON 29.12.2011 IN A PROCEEDING WHICH STANDS ABATED CANNOT STAND IN THE EYE OF LAW. 12 I.T.A. NOS.216 & 217/MDS/2013 I.T.A. NOS.1315 & 1316/MDS/2016 I.T.A. NOS.590 TO 592/MDS/201 6 I.T.A. NO.1443/MDS/ 2016 I.T.A. NO.568/MDS /2016 13. WE HAVE HEARD SMT. RUBY GEORGE, THE LD. DEPARTM ENTAL REPRESENTATIVE ALSO. WE HAVE ALSO CAREFULLY GONE T HROUGH THE PROVISIONS OF SECTION 153A OF THE ACT. SECOND PROV ISO TO SECTION 153A OF THE ACT CLEARLY SAYS THAT THE ASSESSMENT OR REASSESSMENT, IF ANY, RELATING TO ANY ASSESSMENT YEAR FALLING WIT HIN THE PERIOD OF SIX ASSESSMENT YEARS, IS PENDING ON THE DATE OF INITIAT ION OF SEARCH UNDER SECTION 132A OF THE ACT, THE SAME SHALL STAND ABATED. IN THIS CASE, THE SEARCH PROCEEDING, ADMITTEDLY, TOOK PLACE ON 18.11.2011. THEREFORE, THE ASSESSMENT PROCEEDING PENDING AS ON 18.11.2011 SHALL STAND ABATED IN VIEW OF SECOND PROVISO TO SEC TION 153A OF THE ACT. THEREFORE, THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3) OF THE ACT CANNOT STAN D IN THE EYE OF LAW. IN OTHER WORDS, THE ASSESSING OFFICER HAS TO PASS AN ORDER UNDER SECTION 153A OR 153C OF THE ACT AS THE CASE M AY BE. HENCE, THE REGULAR ASSESSMENT PASSED BY THE ASSESSING OFFI CER HAS TO BE QUASHED. ACCORDINGLY, THE ORDERS OF BOTH THE AUTHO RITIES BELOW ARE QUASHED AND THE APPEAL OF THE ASSESSEE IN I.T.A. NO .217/MDS/2013 STANDS ALLOWED. 13 I.T.A. NOS.216 & 217/MDS/2013 I.T.A. NOS.1315 & 1316/MDS/2016 I.T.A. NOS.590 TO 592/MDS/201 6 I.T.A. NO.1443/MDS/ 2016 I.T.A. NO.568/MDS /2016 14. NOW COMING TO I.T.A. NO.1315/MDS/2016. THIS AP PEAL RELATES TO ASSESSMENT YEAR 2006-07. 15. SHRI S. SRIDHAR, THE LD.COUNSEL FOR THE ASSESSE E, SUBMITTED THAT ADMITTEDLY THERE WAS SEARCH OPERATION IN THE C ASE OF M/S BHARANI PIPES & TUBES (P) LTD. ON 18.11.2011. A SI MULTANEOUS SEARCH WAS ALSO CONDUCTED IN THE PREMISES OF THE MA NAGING DIRECTOR OF THE COMPANY SHRI R. RAVANAN AND OTHER D IRECTORS. ACCORDING TO THE LD. COUNSEL, ON THE DATE OF SEARCH , I.E. ON 18.11.2011, THE ASSESSMENT PROCEEDING ON THE BASIS OF NOTICE ISSUED BY THE ASSESSING OFFICER UNDER SECTION 148 O F THE ACT WAS PENDING, THEREFORE, THE PENDING ASSESSMENT PROCEEDI NG AFTER REOPENING WOULD ABATE AND THE ASSESSING OFFICER HAS TO COMPLETE THE ASSESSMENT UNDER SECTION 153C OF THE ACT. REFE RRING TO THE ALLEGATION MADE BY THE ASSESSING OFFICER, THE LD.CO UNSEL SUBMITTED THAT THE POWER OF ATTORNEY AGENT OF THE PURCHASER S HRI BASHEER AHMED ADMITTED THAT HE HAS NOT RECEIVED ANY MONEY A S STATED IN THE AGREEMENT. ACCORDING TO THE LD. COUNSEL, THE A SSESSEE HIMSELF DISCLOSED A SUM OF ` 1 CRORE, THEREFORE, IN THE ABSENCE OF ANY MATERIAL EVIDENCE FOR PAYMENT OF ` 2.38 CRORES, THERE CANNOT BE ANY 14 I.T.A. NOS.216 & 217/MDS/2013 I.T.A. NOS.1315 & 1316/MDS/2016 I.T.A. NOS.590 TO 592/MDS/201 6 I.T.A. NO.1443/MDS/ 2016 I.T.A. NO.568/MDS /2016 ADDITION ON PRESUMPTION BASIS. ACCORDING TO THE LD . COUNSEL, SHRI BASHEER AHMED HAS ALSO FILED AN AFFIDAVIT STATING T HAT HE HAS NOT RECEIVED ANY MONEY AS PER THE ORIGINAL AGREEMENT IM POUNDED BY THE REVENUE AUTHORITIES DURING THE COURSE OF SURVEY OPERATION ON 17.11.2009. THEREFORE, ACCORDING TO THE LD. COUNSE L, THE ADDITION MADE BY THE ASSESSING OFFICER CANNOT STAND IN THE E YE OF LAW. 16. ON THE CONTRARY, SMT. RUBY GEORGE, THE LD. DEPA RTMENTAL REPRESENTATIVE, SUBMITTED THAT A SEARCH AND SEIZURE OPERATION WAS CONDUCTED UNDER SECTION 132A OF THE ACT ON 18.11.20 11 IN THE CASE OF M/S BHARANI PIPES & TUBES PVT. LTD., ERODE. A S IMULTANEOUS SEARCH WAS ALSO CONDUCTED IN THE RESIDENTIAL PREMIS ES OF THE MANAGING DIRECTOR AND OTHER DIRECTORS. DURING THE COURSE OF SEARCH OPERATION, ACCORDING TO THE LD. D.R., INCRIMINATING MATERIALS WERE FOUND WITH REGARD TO PURCHASE OF LANDED PROPERTIES. THE ORIGINAL AGREEMENT WAS FOUND DURING THE SURVEY OPERATION AND IT WAS IMPOUNDED. SINCE THE SEARCH OPERATION WAS CARRIED ON, ACCORDING TO THE LD. D.R., THE ASSESSMENT YEAR UNDER CONSIDER ATION FALLS IN THE BLOCK PERIOD, THEREFORE, THE ASSESSING OFFICER MADE ADDITION OF 15 I.T.A. NOS.216 & 217/MDS/2013 I.T.A. NOS.1315 & 1316/MDS/2016 I.T.A. NOS.590 TO 592/MDS/201 6 I.T.A. NO.1443/MDS/ 2016 I.T.A. NO.568/MDS /2016 ` 2.38 CRORES IN RESPECT OF PAYMENT MADE BY THE ASSES SEE AS PER THE ORIGINAL AGREEMENT WITH SHRI BASHEER AHMED. 17. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IN RESPECT OF THE SAME ADDITION, THE ISSUE CAME BEFORE THIS TRIBUNAL IN I.T.A. NO.216/MDS/2013. IN THE EARLIER PART OF THIS ORDER , THIS TRIBUNAL AFTER CONSIDERING THE SUBMISSIONS OF THE LD.COUNSEL FOR T HE ASSESSEE AND THE LD. DEPARTMENTAL REPRESENTATIVE, HAS OBSERVED A S FOLLOWS AT PARA 10 (SUPRA):- WHEN SHRI BASHEER AHMED DENIED THE FACT OF RECEIPT O F MONEY, IT CANNOT BE CONCLUDED THAT THE ASSESSEE HAS PAID ` 2.38 CRORES TO SHRI BASHEER AHMED. AS PER THE OBSERVATION MADE BY THE LOWER AUTHORITIES, AGREEMEN T FOR SALE WAS FOR SALE OF PROPERTY AFTER DISPOSAL OF CAS ES PENDING BEFORE PRINCIPAL SUB-JUDGE AT TRICHY. WHEN THE MAT TER WAS PENDING BEFORE THE PRINCIPAL SUB-JUDGE FOR ADJU DICATION AND THE POWER OF ATTORNEY, WHO ENTERED INTO THE AGR EEMENT, CLAIMED THAT HE HAS NOT RECEIVED ANY MONEY, THIS TR IBUNAL IS OF THE CONSIDERED OPINION THAT THERE CANNOT BE ANY PRESUMPTION THAT THE ASSESSEE HAS PAID ` 2.38 CRORES TO SHRI BASHEER AHMED. THE ASSESSMENT PROCEEDING BEING A JU DICIAL PROCEEDING, THIS TRIBUNAL IS OF THE CONSIDERED OPIN ION THAT ADDITION HAS TO BE MADE ONLY ON THE BASIS OF CONCRE TE EVIDENCE. PRESUMPTION AND SURMISE HAVE NO ROLE TO PLAY IN JUDICIAL PROCEEDING. THEREFORE, THE ADDITION OF ` 2.38 CRORES MADE BY THE ASSESSING OFFICER AS CONFIRMED B Y THE CIT(APPEALS) CANNOT STAND BEFORE THE SCRUTINY OF LA W. 16 I.T.A. NOS.216 & 217/MDS/2013 I.T.A. NOS.1315 & 1316/MDS/2016 I.T.A. NOS.590 TO 592/MDS/201 6 I.T.A. NO.1443/MDS/ 2016 I.T.A. NO.568/MDS /2016 ACCORDINGLY, THE ORDERS OF BOTH THE AUTHORITIES BEL OW ARE SET ASIDE AND THE ADDITION OF ` 2.38 CRORES IS DELETED. 18. IN VIEW OF THE ABOVE, THERE CANNOT BE ANY ADDIT ION ON THE BASIS OF SURMISE AND PRESUMPTION. IN THE ABSENCE O F CONCRETE EVIDENCE FOR PAYMENT OF ` 2.38 CRORES, THE ADDITION MADE BY THE ASSESSING OFFICER AS CONFIRMED BY THE CIT(APPEALS) CANNOT STAND IN THE EYE OF LAW. ACCORDINGLY, THE ORDERS OF BOTH TH E AUTHORITIES BELOW ARE SET ASIDE AND THE ADDITION OF ` 2.38 CRORES IS DELETED. 19. NOW COMING TO I.T.A. NO.1316/MDS/2016, THE FIRS T ISSUE ARISES FOR CONSIDERATION IS ADDITION OF ` 27,40,939/- IN RESPECT OF SUNDRY CREDITORS BALANCES. 20. SHRI S. SRIDHAR, THE LD.COUNSEL FOR THE ASSESSE E, SUBMITTED THAT THE ASSESSEE CLAIMED TRADE CREDITORS TO THE EX TENT OF ` 2,08,76,976/- ON THE DATE OF SURVEY OPERATION ON 17 .11.2009. THE ASSESSEE ALSO CLAIMED THAT A SUM OF ` 1,25,71,162/- WAS SETTLED EARLIER AND OUTSTANDING CREDIT WAS SHOWN AS ` 1,25,71,162/-. IN RESPECT OF THE ASSESSEE, THE PROPORTIONATE AMOUNT O F ` 27,40,039/- WAS ADDED. ACCORDING TO THE LD. COUNSEL, THERE IS NO BASIS FOR 17 I.T.A. NOS.216 & 217/MDS/2013 I.T.A. NOS.1315 & 1316/MDS/2016 I.T.A. NOS.590 TO 592/MDS/201 6 I.T.A. NO.1443/MDS/ 2016 I.T.A. NO.568/MDS /2016 MAKING THIS ADDITION, HENCE, THE CIT(APPEALS) IS NO T JUSTIFIED IN CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFIC ER. 21. ON THE CONTRARY, SMT. RUBY GEORGE, THE LD. DEPA RTMENTAL REPRESENTATIVE, SUBMITTED THAT DURING THE COURSE OF SURVEY OPERATION, IT WAS FOUND THAT THE TRADE CREDITORS WE RE TO THE EXTENT OF ` 2,08,76,976/-. THE ASSESSEE CLAIMED THAT A SUM OF ` 1,25,71,162/- WAS SETTLED BEFORE HAND. BUT, THESE TRADE CREDITOR S WERE SHOWN AS ` 1,25,71,162/- WHICH WAS OUTSTANDING. BEFORE THE AS SESSING OFFICER, THE ASSESSEE ADMITTED THE SUM OF ` 1,25,71,162/- RELATES TO HIM AND HE OFFERED THE SAME FOR TAXATION. SIMILARL Y, THE BALANCE AMOUNT OF ` 78,05,000/- REFLECTED IN THE LOAN CREDITS WAS ALSO AGREED BY THE THREE SONS OF THE ASSESSEE. THEREFORE, ACCO RDING TO THE LD. D.R., THE ASSESSEE CANNOT DISPUTE AT THIS STAGE. 22. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. DURING THE COURSE OF SURVEY OPERATION ON 17.11.2009, THERE WER E TRADE CREDITORS TO THE EXTENT OF ` 2,08,76,976/-. THE ASSESSEE CLAIMED THAT A SUM OF ` 1,25,71,162/- WAS SETTLED BEFORE HAND. HOWEVER, TH E 18 I.T.A. NOS.216 & 217/MDS/2013 I.T.A. NOS.1315 & 1316/MDS/2016 I.T.A. NOS.590 TO 592/MDS/201 6 I.T.A. NO.1443/MDS/ 2016 I.T.A. NO.568/MDS /2016 SAME WAS NOT REFLECTED IN THE ACCOUNTS OF THE ASSES SEE. THE ASSESSEE CLAIMED THAT LOANS WERE OBTAINED FROM RELA TIVES. SINCE THE RELATIONSHIP AMONG THE RELATIVES FROM WHOM THE ASSESSEE SAID TO HAVE RECEIVED LOAN WAS ESTRANGED, HE ADMITTED TH E SAME FOR TAXATION. EVEN THE DETAILS OF CREDITS WERE NOT EXP LAINED BEFORE THE ASSESSING OFFICER AND THE CIT(APPEALS). SINCE THE ASSESSEE ADMITTED THE CREDIT BALANCE, WHICH WAS PROPORTIONAT ELY ADDED IN THE HANDS OF THE ASSESSEE AND OTHER THREE CHILDREN OF T HE ASSESSEE, THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE W ITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY THE SAME IS CONFIRM ED. 23. THE NEXT ISSUE ARISES FOR CONSIDERATION IS ADDI TION OF ` 11,89,000/- IN RESPECT OF LOAN CREDITORS. 24. SHRI S. SRIDHAR, THE LD.COUNSEL FOR THE ASSESSE E, SUBMITTED THAT THE ASSESSING OFFICER MADE ADDITION OF ` 11,89,000/- TOWARDS LOAN CREDITORS WITHOUT ANY BASIS, THEREFORE, IT CAN NOT BE SUSTAINED. ACCORDING TO THE LD. COUNSEL, THE ASSESSEE CLAIMED BEFORE THE ASSESSING OFFICER THAT THE LOANS WERE BORROWED FROM CLOSE RELATIVES. SINCE THE RELATIONSHIP WAS NOT GOOD, THEY COULD NOT FURNISH THE 19 I.T.A. NOS.216 & 217/MDS/2013 I.T.A. NOS.1315 & 1316/MDS/2016 I.T.A. NOS.590 TO 592/MDS/201 6 I.T.A. NO.1443/MDS/ 2016 I.T.A. NO.568/MDS /2016 DETAILS BEFORE THE ASSESSING OFFICER. THEREFORE, A CCORDING TO THE LD. COUNSEL, THE ADDITION MADE BY THE ASSESSING OFF ICER CANNOT STAND IN THE EYE OF LAW. 25. ON THE CONTRARY, SMT. RUBY GEORGE, THE LD. DEPA RTMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSEE DISCLOS ED ` 11,89,000/- AS LOAN CREDITORS IN THE STATEMENT OF ACCOUNTS. HO WEVER, THE ASSESSEE COULD NOT PROVE THE LOAN CREDITORS. EVEN THE DETAILS OF LOAN CREDITORS WERE NOT FURNISHED BEFORE THE ASSESS ING OFFICER AND THE CIT(APPEALS). EVEN BEFORE THIS TRIBUNAL, ACCOR DING TO THE LD. D.R., NO MATERIALS WERE PRODUCED TO INDICATE THAT T HE LOANS WERE BORROWED FROM CLOSE RELATIVES. 26. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE STATEMENT REFLECTED LOAN CREDITORS TO THE EXTENT OF ` 11,89,000/-. THE DETAILS OF CREDITORS WERE NOT FUR NISHED BEFORE THE ASSESSING OFFICER AND THE CIT(APPEALS). MOREOVER, SUCH DETAILS WERE ALSO NOT FURNISHED BEFORE THIS TRIBUNAL. WHEN THE ASSESSEE CLAIMS THAT THE LOAN WAS BORROWED FROM CLOSE RELATI VES, IT IS FOR THE 20 I.T.A. NOS.216 & 217/MDS/2013 I.T.A. NOS.1315 & 1316/MDS/2016 I.T.A. NOS.590 TO 592/MDS/201 6 I.T.A. NO.1443/MDS/ 2016 I.T.A. NO.568/MDS /2016 ASSESSEE TO ESTABLISH THE IDENTITY OF CREDITORS, CR EDITWORTHINESS OF CREDITORS AND GENUINENESS OF THE TRANSACTION. IN T HE ABSENCE OF SUCH DETAILS TO SUBSTANTIATE THE CLAIM OF LOANS, TH IS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ASSESSING OFFICER HAS R IGHTLY MADE ADDITION OF ` 11,89,000/-. THEREFORE, THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUT HORITY AND ACCORDINGLY THE SAME IS CONFIRMED. 27. THE NEXT ISSUE ARISES FOR CONSIDERATION IS ADDI TION OF ` 3,00,000/- TOWARDS DRAWINGS. 28. SHRI S. SRIDHAR, THE LD.COUNSEL FOR THE ASSESSE E, SUBMITTED THAT THE ASSESSING OFFICER MADE AN ADDITION OF ` 3 LAKHS TOWARDS PERSONAL EXPENSES ON THE GROUND THAT THE ADDITION W AS MADE ON THE BASIS OF ORIGINAL RETURN. AFTER REOPENING OF ASSES SMENT, A SIMILAR ADDITION WAS MADE WHICH WAS CONFIRMED BY THE CIT(AP PEALS). ACCORDING TO THE LD. COUNSEL, SINCE THE ASSESSMENT PROCEEDING WAS NOT PENDING BEFORE THE ASSESSING OFFICER ON THE DAT E OF SEARCH, THERE CANNOT BE ANY ASSESSMENT UNDER SECTION 153C S INCE, AS PER SECOND PROVISO TO SECTION 153A OF THE ACT, THE ASSE SSMENT 21 I.T.A. NOS.216 & 217/MDS/2013 I.T.A. NOS.1315 & 1316/MDS/2016 I.T.A. NOS.590 TO 592/MDS/201 6 I.T.A. NO.1443/MDS/ 2016 I.T.A. NO.568/MDS /2016 PROCEEDING WOULD NOT STAND ABATED. THEREFORE, ACCO RDING TO THE LD. COUNSEL, THE ASSESSING OFFICER CAN PASS ONLY ONE AS SESSMENT ORDER. IN THE ABSENCE OF ANY MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION, ACCORDING TO THE LD. COUNSEL, THE RE CANNOT BE ANY ASSESSMENT UNDER SECTION 153C OF THE ACT. 29. WE HAVE HEARD SMT. RUBY GEORGE, THE LD. DEPARTM ENTAL REPRESENTATIVE ALSO. THE PROVISIONS OF SECTION 153 C OF THE ACT VERY CLEARLY SAYS THAT THE ASSESSMENT HAS TO BE MAD E ON THE BASIS OF MATERIAL FOUND DURING SEARCH OPERATION, ONLY THE PERSON OTHER THAN THE SEARCHED PERSON. IN THE CASE BEFORE US, N O MATERIAL WAS FOUND DURING THE SEARCH OPERATION WITH REGARD TO PE RSONAL EXPENSES. THE ASSESSING OFFICER APPEARS TO HAVE ES TIMATED THE EXPENDITURE WITHOUT ANY MATERIAL. THE ASSESSING OF FICER ON THE BASIS OF PRESUMPTION FOUND THAT THE ASSESSEE WAS LI VING IN A JOINT FAMILY AND NOT MADE ANY DRAWINGS, THEREFORE, HE ADD ED A SUM OF ` 3 LAKHS TOWARDS PERSONAL EXPENSES. THIS BEING AN ASS ESSMENT PROCEEDING UNDER SECTION 153C OF THE ACT, IN THE AB SENCE OF ANY MATERIAL FOUND DURING THE SEARCH OPERATION WITH REG ARD TO PERSONAL EXPENSES, THIS TRIBUNAL IS OF THE CONSIDERED OPINIO N THAT THERE 22 I.T.A. NOS.216 & 217/MDS/2013 I.T.A. NOS.1315 & 1316/MDS/2016 I.T.A. NOS.590 TO 592/MDS/201 6 I.T.A. NO.1443/MDS/ 2016 I.T.A. NO.568/MDS /2016 CANNOT BE ANY ADDITION. MOREOVER, WHEN THE ASSESSE E IS FOUND TO BE IN JOINT FAMILY, THE DRAWING OF THE OTHER MEMBER S OF THE FAMILY IS ALSO TO BE TAKEN INTO CONSIDERATION. IN THE ABSENC E OF ANY MATERIAL FOUND DURING SEARCH, THE ADDITION OF ` 3 LAKHS CANNOT STAND IN THE EYE OF LAW. 30. NOW COMING TO ASSESSEES APPEAL IN I.T.A. NO.591/MDS/2016. 31. THE FIRST ISSUE ARISES FOR CONSIDERATION IS WIT H REGARD TO UNEXPLAINED PAYMENT OF ` 90 LAKHS. 32. SHRI S. SRIDHAR, THE LD.COUNSEL FOR THE ASSESSE E, SUBMITTED THAT THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS PAID A SUM OF ` 30 LAKHS TO EACH OF HIS THREE SISTERS, NAMELY, SMT. TAMILARASI, SMT. TAMILSELVI AND SMT. TAMILKODI, FOR RELINQUISHM ENT OF THEIR RIGHT OVER THE COMMON FAMILY PROPERTY. ACCORDING TO THE LD. COUNSEL, IN FACT, ONLY ` 10,50,000/- WAS PAID TO THREE SISTERS AND THE ASSES SEES MOTHER, WHICH WAS REFLECTED IN THE CASH FLOW STATEM ENT FOR THE ASSESSMENT YEAR 2011-12. THE SEIZED RECEIPT IS UND ATED AND UNSIGNED. THEREFORE, ACCORDING TO THE LD. COUNSEL, IT CANNOT BE 23 I.T.A. NOS.216 & 217/MDS/2013 I.T.A. NOS.1315 & 1316/MDS/2016 I.T.A. NOS.590 TO 592/MDS/201 6 I.T.A. NO.1443/MDS/ 2016 I.T.A. NO.568/MDS /2016 RELIED UPON FOR THE PAYMENT SAID TO BE MADE TO THE ASSESSEES SISTERS. IN FACT, THE PAYMENT WAS MADE AS PER THE RELEASE DEED DATED 31.05.2010. THIS ALSO FORMS PART OF SEIZED RECORDS. WHEN THE REGISTERED RELEASE DEED DISCLOSES THE PAYMENT O F ` 10 LAKHS AND ANOTHER AMOUNT OF ` 50,000/-, ACCORDING TO THE LD. COUNSEL, THE ASSESSING OFFICER CANNOT PRESUME THAT THE ASSESSEE HAS PAID ` 30 LAKHS TO EACH OF HIS SISTERS ON THE BASIS OF THE UN DATED AND UNSIGNED RECEIPT. ACCORDING TO THE LD. COUNSEL, WH EN THE REGISTERED RELEASE DEED DISCLOSES PAYMENT OF ` 10,50,000/-, THE SAME HAS TO BE TAKEN INTO CONSIDERATION AND NOT THE UNSIGNED SO -CALLED RECEIPT. ACCORDING TO THE LD. COUNSEL, WHEN THE RELEASE DEED DISCLOSES THE PAYMENT OF ` 10 LAKHS AND ANOTHER SUM OF ` 50,000/-, THE ASSESSING OFFICER CANNOT MAKE ANY ADDITION ON THE BASIS OF UN SIGNED SO-CALLED RECEIPT AND THE STATEMENT SAID TO BE RECORDED FROM THE SISTERS OF THE ASSESSEE UNDER SECTION 131 OF THE ACT. 33. ON THE CONTRARY, SMT. RUBY GEORGE, THE LD. DEPA RTMENTAL REPRESENTATIVE, SUBMITTED THAT A RECEIPT DATED 10.0 6.2010 WAS FOUND DURING THE COURSE OF SEARCH OPERATION. THE S AID RECEIPT DISCLOSES A PAYMENT OF ` 30 LAKHS EACH TO THREE SISTERS OF THE 24 I.T.A. NOS.216 & 217/MDS/2013 I.T.A. NOS.1315 & 1316/MDS/2016 I.T.A. NOS.590 TO 592/MDS/201 6 I.T.A. NO.1443/MDS/ 2016 I.T.A. NO.568/MDS /2016 ASSESSEE. IN FACT, THE ASSESSEE WAS EXAMINED UNDER SECTION 132(4) OF THE ACT. ACCORDING TO THE LD. D.R., THE ASSESSEE ADMITTED THAT HE HAS PAID ` 30 LAKHS TO EACH OF HIS SISTERS TOWARDS PARTITION O F FAMILY PROPERTY. THE SISTERS OF THE ASSESSEE WERE ALSO EXAMINED UNDER SECTION 131 OF THE ACT. THEY ALSO, IN FACT, ADMITTED THE RECEIPT OF ` 30 LAKHS AND THE SAME WERE SPENT ON THE MARRIAGE OF THEIR DAUGHTERS, PURCHASE OF PLOT AND REPAYMENT OF SMALL LOANS. ACCORDING TO THE LD. D.R., WHEN THE RECIPIENTS OF T HE AMOUNT HAVE ACCEPTED THAT THEY HAVE RECEIVED ` 30 LAKHS FOR PARTITION OF FAMILY PROPERTY, THE ASSESSING OFFICER HAS RIGHTLY REJECTE D THE AFFIDAVIT OF THE ABOVE SAID SISTERS AND SINCE THE SAME WAS FILED AFTER A LONG GAP OF 24 MONTHS. ACCORDING TO THE LD. D.R., THE CIT(A PPEALS) HAS RIGHTLY CONFIRMED THE ADDITION OF ` 90 LAKHS. 34. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. DURING THE COURSE OF SEARCH OPERATION, A RECEIPT DATED 10.06.2 010 WAS FOUND. THE ASSESSEE CLAIMS THAT THE SAID RECEIPT IS NOT SI GNED AND NOT DATED. THE FACT REMAINS THAT THE RECEIPT WAS DATED 10.06.2010 BUT IT IS NOT SIGNED. A RELEASE DEED WAS ALSO EXECUTED AND REGISTERED 25 I.T.A. NOS.216 & 217/MDS/2013 I.T.A. NOS.1315 & 1316/MDS/2016 I.T.A. NOS.590 TO 592/MDS/201 6 I.T.A. NO.1443/MDS/ 2016 I.T.A. NO.568/MDS /2016 ON 31.05.2010. WHEN THE REGISTERED RELEASE DEED DI SCLOSES A PAYMENT OF ` 10 LAKHS AND ANOTHER PAYMENT OF ` 50,000/- TOTALLING TO ` 10,50,000/-, THIS TRIBUNAL IS OF THE CONSIDERED OPI NION THAT THERE CANNOT BE ANY DISPUTE ABOUT THE RECEIPT OF MONEY. THE EXECUTION OF RELEASE DEED IS ALSO NOT IN DISPUTE. THEREFORE, IT IS NOT PERMISSIBLE FOR THE PARTIES TO LEAD EVIDENCE, DISPUTING THE CON TENTS OF THE REGISTERED RELEASE DEED. IN OTHER WORDS, THE CONTEN TS OF THE RELEASE DEED CANNOT BE CONTROVERTED ON ANY ORAL EVIDENCE. 35. THE QUESTION NOW ARISES FOR CONSIDERATION IS W HEN THERE IS ORAL EVIDENCE FOR PAYMENT OF ` 30 LAKHS TO EACH OF THE SISTERS AND THE REGISTERED RELEASE DEED DISCLOSES PAYMENT OF ` 10,50,000/-, WHICH ONE WOULD PREVAIL? THIS TRIBUNAL IS OF THE C ONSIDERED OPINION THAT THE ORAL STATEMENT OR EVIDENCE CANNOT OVERRIDE THE REGISTERED RELEASE DEED. THE REGISTERED RELEASE DEED WOULD PR EVAIL OVER ALL THE ORAL EVIDENCE AVAILABLE ON RECORD. MOREOVER, T HE SISTERS, WHO WERE SAID TO BE EXAMINED UNDER SECTION 131 OF THE A CT, HAVE ALSO FILED AFFIDAVIT DENYING THEY HAVE NOT RECEIVED ` 30 LAKHS. THIS AFFIDAVIT IS IN CONFORMITY WITH THE REGISTERED RELE ASE DEED. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINI ON THAT THE ORAL 26 I.T.A. NOS.216 & 217/MDS/2013 I.T.A. NOS.1315 & 1316/MDS/2016 I.T.A. NOS.590 TO 592/MDS/201 6 I.T.A. NO.1443/MDS/ 2016 I.T.A. NO.568/MDS /2016 STATEMENT SAID TO BE RECORDED FROM THE ASSESSEE OR FROM SISTERS OF THE ASSESSEE CANNOT OVERRIDE THE STATEMENT CONTAINE D IN THE REGISTERED RELEASE DEED AND AFFIDAVIT. HENCE, THE ADDITION MADE BY THE ASSESSING OFFICER TO THE EXTENT OF ` 90 LAKHS UNDER SECTION 69C OF THE ACT CANNOT STAND IN THE EYE OF LAW. ACCORDI NGLY, THE ORDERS OF BOTH THE AUTHORITIES BELOW ARE SET ASIDE AND THE AD DITION OF ` 90 LAKHS IS DELETED. 36. THE NEXT ISSUE ARISES FOR CONSIDERATION IS WITH REGARD TO ` 1 LAKH IN RESPECT OF PAYMENT SAID TO BE MADE TO SHRI S.A. KANDASAMY. 37. SHRI S. SRIDHAR, THE LD.COUNSEL FOR THE ASSESSE E, SUBMITTED THAT DURING THE SEARCH OPERATION, THE REVENUE AUTHO RITIES FOUND A RECEIPT OF ` 1 LAKH FOR THE PAYMENT MADE TO SHRI S.A. KANDASAMY. ACCORDING TO THE LD. COUNSEL, THE ASSESSEE CLAIMED BEFORE THE ASSESSING OFFICER THAT THE PAYMENT WAS PART OF PAYM ENT MADE FOR KARUR LAND PURCHASE. THE ASSESSING OFFICER, HOWEVE R, REJECTED THE EXPLANATION OF THE ASSESSEE ON THE GROUND THAT THE DETAILS OF THE PAYMENT DO NOT CONTAIN THE PAYMENT RECEIVED BY SHRI S.A. 27 I.T.A. NOS.216 & 217/MDS/2013 I.T.A. NOS.1315 & 1316/MDS/2016 I.T.A. NOS.590 TO 592/MDS/201 6 I.T.A. NO.1443/MDS/ 2016 I.T.A. NO.568/MDS /2016 KANDASAMY, THEREFORE, THE CIT(APPEALS) CONFIRMED TH E ADDITION. ACCORDING TO THE LD. COUNSEL, THIS PAYMENT OF ` 1 LAKH IS PART OF PAYMENT MADE FOR LAND PURCHASE AT KARUR, THEREFORE, A SEPARATE ADDITION IS NOT CALLED FOR. 38. WE HAVE HEARD SMT. RUBY GEORGE, THE LD. DEPARTM ENTAL REPRESENTATIVE ALSO. THE LD. D.R. SUBMITTED THAT I N THE SEIZED MATERIAL AT PAGE 21, DETAILS OF THE PAYMENT MADE FO R KARUR LAND PURCHASE ARE AVAILABLE. THIS PAYMENT OF ` 1 LAKH DOES NOT REFLECT IN THE DETAILS AVAILABLE AT PAGE 21 OF SEIZED MATERIAL . THEREFORE, ACCORDING TO THE LD. D.R., THIS PAYMENT OF ` 1 LAKH MADE TO SHRI S.A. KANDASAMY IS OVER AND ABOVE THE PAYMENT MADE FOR KA RUR LAND PURCHASE. 39. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE DETAILS OF PAYMENT MADE FOR KARUR LAND PURCHASE ARE AVAILABLE AT PAGE 21 OF SEIZED MATERIAL. IT IS NOT IN DISPUTE THAT THESE D ETAILS DO NOT REFLECT THE PAYMENT MADE TO SHRI S.A. KANDASAMY. WHEN THE DETAILS CONTAINED IN THE SEIZED MATERIAL WITH REGARD TO PAY MENT MADE FOR 28 I.T.A. NOS.216 & 217/MDS/2013 I.T.A. NOS.1315 & 1316/MDS/2016 I.T.A. NOS.590 TO 592/MDS/201 6 I.T.A. NO.1443/MDS/ 2016 I.T.A. NO.568/MDS /2016 KARUR LAND PURCHASE DO NOT REFLECT THE PAYMENT MADE TO SHRI S.A. KANDASAMY, THIS TRIBUNAL IS OF THE CONSIDERED OPINI ON THAT THE PAYMENT WAS MADE OVER AND ABOVE THE DETAILS CONTAIN ED IN THE SEIZED MATERIAL FOR THE PURCHASE OF KARUR LAND, HEN CE, THE SAME CANNOT BE ALLOWED IN THE ABSENCE OF ANY EVIDENCE. THEREFORE, THE CIT(APPEALS) HAS RIGHTLY CONFIRMED THE ADDITION MAD E BY THE ASSESSING OFFICER. THIS TRIBUNAL DO NOT FIND ANY R EASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDING LY THE SAME IS CONFIRMED. 40. NOW COMING TO ASSESSEES APPEAL IN I.T.A. NO.590/MDS/2016, THE ONLY ISSUE ARISES FOR CONSIDER ATION IS ADDITION OF ` 13,67,995/-. 41. SHRI S. SRIDHAR, THE LD.COUNSEL FOR THE ASSESSE E, SUBMITTED THAT DURING THE COURSE OF SEARCH OPERATION, GOLD JE WELLERY WEIGHING ABOUT 1710.370 GMS WAS FOUND. THE VALUE OF THE GOL D JEWELLERY WAS ESTIMATED BY THE VALUER AT ` 45,99,185/-. ACCORDING TO THE LD. COUNSEL, THE ASSESSEE EXPLAINED BEFORE THE ASSESSIN G OFFICER THAT ABOUT 100 SOVEREIGNS OF GOLD JEWELLERY BELONGING TO HIS WIFE WHICH 29 I.T.A. NOS.216 & 217/MDS/2013 I.T.A. NOS.1315 & 1316/MDS/2016 I.T.A. NOS.590 TO 592/MDS/201 6 I.T.A. NO.1443/MDS/ 2016 I.T.A. NO.568/MDS /2016 WAS RECEIVED BY HER AS SRIDHAN PROPERTY AT THE TIME OF MARRIAGE. THE ASSESSEE FURTHER EXPLAINED THAT THE VALUE OF GO LD JEWELLERY FOR THE ASSESSMENT YEAR 2011-12 WAS ` 70,900/- AND FOR ASSESSMENT YEAR 2012-13, IT WAS ` 94,480/-. ACCORDING TO THE LD. COUNSEL, THE ASSESSING OFFICER, HOWEVER, ESTIMATED THE UNEXPLAIN ED GOLD JEWELLERY AT ` 28,38,965/-. AFTER TAKING INTO CONSIDERATION THE DECLARATION MADE BY THE ASSESSEE AT ` 14,70,970/-, THE BALANCE AMOUNT OF ` 13,67,995/- WAS ASSESSED AS UNEXPLAINED JEWELLERY UNDER SECTION 69A OF THE ACT. ACCORDING TO THE LD. COUNSEL, THE ASSESSING OFFICER OUGHT TO HAVE TAKEN INTO CONSIDER ATION THE INSTRUCTION OF CBDT IN INSTRUCTION NO.1916 DATED 11 .05.1994 AND OUGHT TO HAVE GIVEN RELIEF TO THE ASSESSEE. ACCORD ING TO THE LD. COUNSEL, AS PER CBDTS INSTRUCTION, 500 GMS FOR EAC H MARRIED LADY IS ALLOWED AND 100 GMS IS ALLOWED FOR EACH MALE MEM BER, WHICH WORKS OUT TO 1150 GMS. SINCE THE ASSESSEE HIMSELF DECLARED THE VALUE AT ` 14,70,970/-, ACCORDING TO THE LD. COUNSEL, THERE IS NO NEED FOR ANY FURTHER ADDITION. 42. ON THE CONTRARY, SMT. RUBY GEORGE, THE LD. DEPA RTMENTAL REPRESENTATIVE, SUBMITTED THAT DURING THE COURSE OF SEARCH 30 I.T.A. NOS.216 & 217/MDS/2013 I.T.A. NOS.1315 & 1316/MDS/2016 I.T.A. NOS.590 TO 592/MDS/201 6 I.T.A. NO.1443/MDS/ 2016 I.T.A. NO.568/MDS /2016 OPERATION, 1710.370 GMS OF GOLD JEWELLERY WAS FOUND AND THE SAME WAS VALUED AT ` 45,99,185/-. THE ASSESSEE ACCEPTED UNEXPLAINED INVESTMENT TO THE EXTENT OF ` 14,70,970/-. ACCORDING TO THE LD. D.R., THE ASSESSING OFFICER, HOWEVER, FOUND THAT THE CBDT CIRCULAR RELIED ON BY THE ASSESSEE IS ONLY FOR SEIZURE OF GOLD JEWE LLERY FOUND DURING THE COURSE OF SEARCH OPERATION. IT DOES NOT ABSOLV E THE ASSESSEE FROM EXPLAINING THE SOURCE FOR ACQUISITION OF SUCH GOLD JEWELLERY. THE ASSESSING OFFICER, ACCORDING TO THE LD. D.R., A FTER TAKING INTO CONSIDERATION OF THE CLAIM OF THE ASSESSEE FOUND TH AT THE ASSESSEES WIFE RECEIVED 100 SOVEREIGNS OF GOLD JEW ELLERY DURING HER MARRIAGE, HAS TAKEN 1055.77 GMS AS UNEXPLAINED AND THE SAME WAS ESTIMATED AT ` 2689/- PER GRAM AND THE TOTAL INVESTMENT IN GOLD JEWELLERY WAS ARRIVED AT ` 28,38,965/-. AFTER REDUCING THE VALUE OF THE JEWELLERY DECLARED BY THE ASSESSEE TO THE EXTEN T OF ` 14,70,970/-, THE BALANCE OF ` 13,67,995/- WAS TAKEN AS INCOME OF THE ASSESSEE. THEREFORE, ACCORDING TO THE LD. D.R., THE CIT(APPEA LS) HAS RIGHTLY CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICE R. 43. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS NOT IN 31 I.T.A. NOS.216 & 217/MDS/2013 I.T.A. NOS.1315 & 1316/MDS/2016 I.T.A. NOS.590 TO 592/MDS/201 6 I.T.A. NO.1443/MDS/ 2016 I.T.A. NO.568/MDS /2016 DISPUTE THAT REVENUE AUTHORITIES FOUND 1710.370 GMS OF JEWELLERY AND IT WAS VALUED AT ` 45,99,185/-. AFTER CONSIDERING THE CLAIM OF THE ASSESSEE THAT THE ASSESSEES WIFE RECEIVED 100 SOVE REIGNS OF JEWELLERY AT THE TIME OF MARRIAGE, THE ASSESSING OF FICER FOUND THAT THE BALANCE JEWELLERY WAS UNEXPLAINED. FROM THE OR DER OF THE ASSESSING OFFICER, IT APPEARS THAT THE ASSESSEE ADM ITTED BEFORE THE ASSESSING OFFICER DURING EXAMINATION UNDER SECTION 134 OF THE ACT THAT HIS UNDISCLOSED INCOME FOR PURCHASE OF GOLD JE WELLERY WAS TO THE EXTENT OF ` 28,38,965/-. 44. THE EXEMPTION CLAIMED BY THE ASSESSEE UNDER CBD T CIRCULAR IS ONLY FOR SEIZURE OF GOLD JEWELLERY DURI NG THE COURSE OF SEARCH OPERATION. AS RIGHTLY SUBMITTED BY THE LD. DEPARTMENTAL REPRESENTATIVE, IT DOES NOT ABSOLVE THE ASSESSEE FR OM EXPLAINING THE SOURCE FOR ACQUISITION OF SUCH JEWELLERY. THER EFORE, THE CBDT CIRCULAR WOULD NOT COME TO THE RESCUE OF THE ASSESS EE. THE ASSESSEE IS EXPECTED TO EXPLAIN THE SOURCE FOR ACQU ISITION OF JEWELLERY FOUND DURING THE COURSE OF SEARCH OPERATI ON. SINCE PROPER EXPLANATION WAS NOT OFFERED, THIS TRIBUNAL IS OF TH E CONSIDERED OPINION THAT THE ASSESSING OFFICER HAS RIGHTLY TREA TED ` 13,67,995/- 32 I.T.A. NOS.216 & 217/MDS/2013 I.T.A. NOS.1315 & 1316/MDS/2016 I.T.A. NOS.590 TO 592/MDS/201 6 I.T.A. NO.1443/MDS/ 2016 I.T.A. NO.568/MDS /2016 AS UNEXPLAINED INVESTMENT OF THE ASSESSEE IN GOLD J EWELLERY, UNDER SECTION 69A OF THE ACT. THEREFORE, THIS TRIBUNAL D O NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUT HORITY AND ACCORDINGLY THE SAME IS CONFIRMED. 45. NOW COMING TO REVENUES APPEAL IN I.T.A. NO.568 /MDS/2016. 46. THE ONLY ISSUE ARISES FOR CONSIDERATION IS ADDI TION OF ` 35,15,071/- TOWARDS UNEXPLAINED EXPENDITURE UNDER S ECTION 69C OF THE ACT. 47. SMT. RUBY GEORGE, THE LD. DEPARTMENTAL REPRESEN TATIVE, SUBMITTED THAT DURING THE COURSE OF SEARCH, THE PRO FIT & LOSS ACCOUNT AND BALANCE SHEET OF M/S PANDIYAN TRADERS W ERE FOUND AND SEIZED. AS PER THIS PROFIT & LOSS ACCOUNT, IT WAS FOUND THAT THE ASSESSEE HAS SUPPRESSED THE PURCHASE TO THE EXTENT OF ` 35,15,071/-. ON EXAMINATION, ACCORDING TO THE LD. D.R., THE ASSESSEE ADMITTED THAT HE PAID SUNDRY CREDITORS TO THE EXTENT OF ` 35,15,041/- IN CASH OUTSIDE THE BOOKS OF ACCOUNT. M/S PANDIAN TRADERS IS THE PROPRIETARY CONCERN OF THE ASSESSEE. THE LD. D.R. FURTHER SUBMITTED THAT THE ASSESSEE MADE UNACCOUNTE D PURCHASE TO 33 I.T.A. NOS.216 & 217/MDS/2013 I.T.A. NOS.1315 & 1316/MDS/2016 I.T.A. NOS.590 TO 592/MDS/201 6 I.T.A. NO.1443/MDS/ 2016 I.T.A. NO.568/MDS /2016 THE EXTENT OF ` 35,15,041/- OUTSIDE THE BOOKS OF ACCOUNT. THE UNACCOUNTED PURCHASE WAS NOT INCLUDED IN THE SALES SHOWN IN THE RETURN OF INCOME FILED BY THE ASSESSEE. IN THE ABS ENCE OF ANY EVIDENCE TO SHOW THAT THE UNACCOUNTED PURCHASE HAS BEEN INCLUDED IN THE UNACCOUNTED SALES OF ` 69,42,895/-, ACCORDING TO THE LD. D.R., THE ASSESSING OFFICER HAS RIGHTLY MADE THE ADDITION OF ENTIRE UNACCOUNTED PURCHASES. THE CIT(APPEALS) FOUND THAT THE ADDITION MADE BY THE ASSESSING OFFICER AMOUNTED TO DOUBLE AD DITION, THEREFORE, HE DELETED THE SAME. ACCORDING TO THE L D. D.R., SINCE THE UNACCOUNTED PURCHASE WAS NOT FORMED PART OF UNACCOU NTED SALE, A SEPARATE ADDITION NEEDS TO BE MADE. 48. ON THE CONTRARY, SHRI S. SRIDHAR, THE LD.COUNSE L FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER, AFTE R EXAMINING THE PROFIT & LOSS ACCOUNT AND BALANCE SHEET OF M/S PAND IAN TRADERS FOR THE ASSESSMENT YEAR 2008-09, FOUND THAT THE ASSESSE E HAS SUPPRESSED THE PURCHASE TO THE EXTENT OF ` 35,15,071/- AND SETTLED THE DUES TO SUNDRY CREDITORS TO THE EXTENT OF ` 35,15,041/- OUTSIDE THE BOOKS OF ACCOUNT. THE LD.COUNSEL FURTHER SUBMI TTED THAT THE AMOUNT OF ` 35,15,041/- WAS REDUCED FROM THE PURCHASE ACCOUNT 34 I.T.A. NOS.216 & 217/MDS/2013 I.T.A. NOS.1315 & 1316/MDS/2016 I.T.A. NOS.590 TO 592/MDS/201 6 I.T.A. NO.1443/MDS/ 2016 I.T.A. NO.568/MDS /2016 AND FROM THE CLOSING STOCK ACCOUNT IN THE PROFIT & LOSS ACCOUNT FILED ALONG WITH RETURN OF INCOME FOR THE ASSESSMENT YEAR 2008-09. THE LD.COUNSEL FURTHER SUBMITTED THAT THE ASSESSEE ESTI MATED THE UNACCOUNTED SALES AT ` 69,42,895/- AND ALSO ESTIMATED THE INCOME AND DISCLOSED THE SAME IN THE CASH FLOW STATEMENT F OR THE YEAR ENDING 31.03.2008. EVEN THOUGH THE PURCHASES WERE NOT FULLY DISCLOSED, ACCORDING TO THE LD. COUNSEL, THE ASSESS EE ADMITTED UNACCOUNTED SALES IN RESPECT OF UNACCOUNTED PURCHAS ES, THEREFORE, THE INCOME HAS TO BE ESTIMATED. ACCORDING TO THE L D. COUNSEL, THE ASSESSEE IS DOING BUSINESS ON CREDIT BASIS AND THE PAYMENTS FOR PURCHASES WERE MADE ON REALISING THE SALE CONSIDERA TION, THEREFORE, THE PROFIT ON UNACCOUNTED SALE OF ` 35,15,071/- HAS TO BE ESTIMATED AT 10%. 49. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ASSESSING OFFICER CLAIMED THAT THERE WERE UNACCOUNTED PURCHAS ES TO THE EXTENT OF ` 35,15,071/- MADE OUTSIDE THE BOOKS. THIS FACT IS A LSO ADMITTED BY THE ASSESSEE. THE ASSESSEE CLAIMS THAT UNACCOUNTED SALES TO THE EXTENT OF ` 69,42,895/- WAS DISCLOSED IN THE BALANCE 35 I.T.A. NOS.216 & 217/MDS/2013 I.T.A. NOS.1315 & 1316/MDS/2016 I.T.A. NOS.590 TO 592/MDS/201 6 I.T.A. NO.1443/MDS/ 2016 I.T.A. NO.568/MDS /2016 SHEET. THE CIT(APPEALS) FOUND THAT EVEN THOUGH THE ASSESSEE HAS NOT FULLY DISCLOSED THE PURCHASES IN THE BOOKS OF A CCOUNT, THE ADDITION OF AN AMOUNT EQUIVALENT TO 10% REPRESENTIN G THE GROSS PROFIT HAS TO BE MADE AND ADDITION OF ` 35,15,071/- TANTAMOUNT TO DOUBLE ADDITION. THE CIT(APPEALS) HAS ALSO FOUND TH AT THE ASSESSEE HIMSELF HAS TAKEN INTO ACCOUNT THE PROFIT ON UNACCO UNTED SALES WHILE CALCULATING THE GROSS PROFIT, THEREFORE, EVEN THE 1 0% NEED NOT BE ADDED. THIS FACTUAL ASPECT IS NOT IN DISPUTE. IN OTHER WORDS, THE ASSESSEE HAS TAKEN HIMSELF THE PROFIT OF UNACCOUNTE D SALES WHILE CALCULATING THE GROSS PROFIT. WHEN THE PROFIT ON U NACCOUNTED SALES WERE TAKEN INTO ACCOUNT FOR THE PURPOSE OF CALCULAT ING THE GROSS PROFIT, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THERE IS NO NEED FOR ANY FURTHER ADDITION. HENCE, THE ORDER OF THE CIT(APPEALS) IS CONFIRMED AND THE APPEAL OF THE REVENUE STANDS DISM ISSED. 50. NOW COMING TO ASSESSEES APPEAL IN I.T.A. NO.592/MDS/2016. 36 I.T.A. NOS.216 & 217/MDS/2013 I.T.A. NOS.1315 & 1316/MDS/2016 I.T.A. NOS.590 TO 592/MDS/201 6 I.T.A. NO.1443/MDS/ 2016 I.T.A. NO.568/MDS /2016 51. THE ONLY ISSUE ARISES FOR CONSIDERATION IS ADDI TION OF ` 1,84,175/- TOWARDS UNEXPLAINED JEWELLERY UNDER SECT ION 69A OF THE ACT. 52. SHRI S. SRIDHAR, THE LD.COUNSEL FOR THE ASSESSE E, SUBMITTED THAT DURING THE COURSE OF SEARCH OPERATION, 744.28 GMS OF JEWELLERY WAS FOUND AND THE SAME WAS VALUED AT ` 20,26,868/-. ACCORDING TO THE LD. COUNSEL, IN THE CASH FLOW STATEMENT, THE AS SESSEE HAS DECLARED THE PURCHASE OF GOLD JEWELLERY TO THE EXTE NT OF ` 18,42,693/- THE ASSESSEE HAS PLACED RELIANCE ON THE CBDT CIRCUL AR AND CLAIMED THAT EXEMPTION FOR THE MARRIED LADY SHALL B E GIVEN DUE CREDIT. ACCORDING TO THE LD. COUNSEL, IN VIEW OF T HE CBDT CIRCULAR, THERE CANNOT BE ANY FURTHER ADDITION. 53. WE HAVE HEARD SMT. RUBY GEORGE, THE LD. DEPARTM ENTAL REPRESENTATIVE ALSO. IT IS NOT IN DISPUTE THAT 744 .28 GMS OF JEWELLERY WAS FOUND AND THE SAME WAS VALUED AT ` 20,26,868/-. THE ASSESSEE HAS DISCLOSED UNACCOUNTED JEWELLERY TO THE EXTENT O F ` 18,42,693/- IN THE CASH FLOW STATEMENT. THE BALANCE OF ` 1,84,175/- WAS ADDED UNDER SECTION 69A OF THE ACT. THE ASSESSEE CLAIMED BEFORE THE 37 I.T.A. NOS.216 & 217/MDS/2013 I.T.A. NOS.1315 & 1316/MDS/2016 I.T.A. NOS.590 TO 592/MDS/201 6 I.T.A. NO.1443/MDS/ 2016 I.T.A. NO.568/MDS /2016 ASSESSING OFFICER THAT A MARRIED LADY IS ENTITLED F OR 500 GMS OF GOLD JEWELLERY. THIS TRIBUNAL IS OF THE CONSIDERED OPIN ION THAT 500 GMS OF GOLD JEWELLERY FOR A MARRIED LADY AS PER CBDT CIRCU LAR RELATES TO SEIZURE. IT DOES NOT ABSOLVE THE RESPONSIBILITY OF THE ASSESSEE FROM EXPLAINING THE SOURCE OF ACQUISITION. IN FACT, THE ASSESSING OFFICER HAS GIVEN RELIEF IN RESPECT OF GIFT / SRIDHAN JEWEL LERY RECEIVED BY THE ASSESSEES WIFE DURING MARRIAGE AND ALSO MOST OF TH E GIFTS SAID TO BE RECEIVED. THE RELIEF GIVEN BY THE ASSESSING OFF ICER WAS TO THE EXTENT OF ` 18,42,693/-. THE ASSESSEE COULD NOT EXPLAIN THE SO URCE OF ACQUISITION OF JEWELLERY TO THE EXTENT OF ` 1,84,175/-. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE CIT(APPEALS) HAS RIGHTLY CONFIRMED THE ORDER OF THE ASSESSING OFFICE R. THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY THE SAME IS CONFIRMED. 54. NOW COMING TO REVENUES APPEAL IN I.T.A. NO.1443/MDS/2016. 55. IN THIS APPEAL, THE REVENUE CHALLENGES THE ORDE R OF THE CIT(APPEALS) WHEREIN RELIEF WAS GIVEN TO THE EXTENT OF ` 32,40,977/-. 38 I.T.A. NOS.216 & 217/MDS/2013 I.T.A. NOS.1315 & 1316/MDS/2016 I.T.A. NOS.590 TO 592/MDS/201 6 I.T.A. NO.1443/MDS/ 2016 I.T.A. NO.568/MDS /2016 56. SMT. RUBY GEORGE, THE LD. DEPARTMENTAL REPRESEN TATIVE, SUBMITTED THAT THE ASSESSING OFFICER MADE ADDITION OF ` 32,40,977/- UNDER THE HEAD INCOME FROM BUSINESS. HOWEVER, TH E CIT(APPEALS) DIRECTED THE ASSESSING OFFICER TO GIVE TELESCOPING TO THE EXTENT OF ` 32,40,977/- TOWARDS ADDITION MADE UNDER THE HEAD BUSINESS INCOME IN RESPECT OF INCOME UNDER THE HE AD OTHER SOURCES. ACCORDING TO THE LD. D.R., THE INCOME UN DER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION ADMIT TED BY THE ASSESSEE, INCLUDING THE INCOME FROM KAS NAGAR PROJE CT, IS DIFFERENT AND DISTINCT FROM THE INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES ADMITTED SEPARATELY BY THE ASSESSEE IN THE RETURN OF INCOME. THEREFORE, ACCORDING TO THE LD. D.R., IT C ANNOT BE SET OFF OR TELESCOPED AGAINST THE INCOME FROM BUSINESS. IN TH E CASH FLOW STATEMENT FILED BY THE ASSESSEE FOR THE PERIOD FROM 01.04.2008 TO 31.03.2009, THE ASSESSEE DISCLOSED INCOME FROM KAS NAGAR SITE AT SALES AT 10% AND FROM OTHER INCOME SHOWN UNDER THE HEAD INCOME FROM OTHER SOURCES IN THE RETURN FILED FOR THE ASS ESSMENT YEAR 2009-10. THEREFORE, ACCORDING TO THE LD. D.R., THE CIT(APPEALS) IS NOT JUSTIFIED IN ALLOWING THE TELESCOPING. 39 I.T.A. NOS.216 & 217/MDS/2013 I.T.A. NOS.1315 & 1316/MDS/2016 I.T.A. NOS.590 TO 592/MDS/201 6 I.T.A. NO.1443/MDS/ 2016 I.T.A. NO.568/MDS /2016 57. ON THE CONTRARY, SHRI S. SRIDHAR, THE LD.COUNSE L FOR THE ASSESSEE, SUBMITTED THAT THE ASSESSEE CLAIMED TELES COPING IN RESPECT OF OTHER INCOME ADMITTED BY THE ASSESSEE IN CASH FLOW STATEMENT. IN FACT, THE ASSESSEE ADOPTED AVERAGE S ALE PRICE, THEREFORE, AVAILABILITY OF ADDITIONAL INCOME HAS TO BE TAKEN INTO CONSIDERATION. ACCORDING TO THE LD. COUNSEL, THE A SSESSEE, IN FACT, DECLARED INCOME FROM KAS NAGAR PROJECT AT 10% OF TH E SALE VALUE. THE ASSESSEE DECLARED INCOME OF ` 11,87,649/- FOR THE ASSESSMENT YEAR 2008-09 AND ANOTHER INCOME OF ` 56,59,073/- FOR THE ASSESSMENT YEAR 2009-10. THE ASSESSING OFFICER, AC CORDING TO THE LD. COUNSEL, AFTER TAKING INTO CONSIDERATION OF THE AVERAGE RATE PER SQ.FT. OF THE LAND, FOUND THAT THE TOTAL SALE VALUE WORKS OUT TO ` 8,33,00,500/-. IN FACT, THE ASSESSEE ADMITTED ONLY ` 6,84,67,226/-. ACCORDING TO THE LD. COUNSEL, THE ASSESSEE CLAIMS T HAT THE EXPENDITURE WAS INCURRED FOR DEVELOPMENT LIKE LEVEL LING, FILLING UP THE PLOTS, CONSTRUCTION OF OVERHEAD TANKS, ETC. REJECT ING THE EXPLANATION OF THE ASSESSEE, THE ASSESSING OFFICER ESTIMATED THE INCOME OF KAS NAGAR PROJECT AT 15% OF SALE VALUE. THE ASSESSING OFFICER HAS ALSO REJECTED THE CLAIM OF THE ASSESSEE FOR TELESCOPING. 40 I.T.A. NOS.216 & 217/MDS/2013 I.T.A. NOS.1315 & 1316/MDS/2016 I.T.A. NOS.590 TO 592/MDS/201 6 I.T.A. NO.1443/MDS/ 2016 I.T.A. NO.568/MDS /2016 ACCORDING TO THE LD. COUNSEL, WHEN THE HIGHER INCOM E WAS ESTIMATED, THE CIT(APPEALS) FOUND THAT ADDITIONAL I NCOME IS VERY MUCH AVAILABLE FOR TELESCOPING, THEREFORE, THE CIT( APPEALS) HAS RIGHTLY DIRECTED THE ASSESSING OFFICER TO TELESCOPE THE INCOME. 58. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSING OFFICER MADE ADDITION OF ` 30,40,939/- FROM THE PROFIT FROM KAS NAGAR PROJECT. THE ASSESS EE CLAIMS THAT THE INCOME TO THE EXTENT OF ESTIMATION MADE BY THE ASSESSING OFFICER, IS VERY MUCH AVAILABLE FOR MAKING INVESTME NT OR THE INCOME FROM OTHER SOURCES. THEREFORE, AN AMOUNT OF ` 32,40,977/- ESTIMATED FROM THE BUSINESS OF REAL ESTATE HAS TO B E TELESCOPED IN RESPECT OF INCOME UNDER THE HEAD OTHER SOURCES. THE CONTENTION OF THE REVENUE APPEARS TO BE THAT THE ASSESSEE HIMS ELF DISCLOSED INCOME FROM KAS NAGAR PROJECT AT 10% OF SALE VALUE SEPARATELY. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT WHE N THE ADDITIONAL INCOME WAS AVAILABLE DUE TO ESTIMATION MADE BY THE ASSESSING OFFICER ON KAS NAGAR PROJECT, THE SAME SHOULD BE TE LESCOPED TOWARDS ADDITION MADE UNDER THE HEAD INCOME FROM O THER 41 I.T.A. NOS.216 & 217/MDS/2013 I.T.A. NOS.1315 & 1316/MDS/2016 I.T.A. NOS.590 TO 592/MDS/201 6 I.T.A. NO.1443/MDS/ 2016 I.T.A. NO.568/MDS /2016 SOURCES. THEREFORE, THE CIT(APPEALS) HAS RIGHTLY DIRECTED THE ASSESSING OFFICER TO TELESCOPE. HENCE, THIS TRIBUN AL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUT HORITY AND ACCORDINGLY THE SAME IS CONFIRMED. 59. IN THE RESULT, ASSESSEES APPEALS IN I.T.A. NO. 216/MDS/2013, I.T.A. NO.217/MDS/2013 AND I.T.A. NO.1315/MDS/2016 ARE ALLOWED, I.T.A. NO.1316/MDS/2016 AND I.T.A. NO.591/MDS/2016 ARE PARTLY ALLOWED, I.T.A. NO.590/MDS/2016 AND I.T.A. NO.592/M DS/2016 ARE DISMISSED. WHEREAS, BOTH THE APPEALS OF THE REVENU E IN I.T.A. NO.1443/MDS/2016 AND I.T.A. NO.568/MDS/2016 ARE DIS MISSED. ORDER PRONOUNCED ON 27 TH SEPTEMBER, 2017 AT CHENNAI. SD/- SD/- (. !' ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 6 /DATED, THE 27 TH SEPTEMBER, 2017. KRI. 42 I.T.A. NOS.216 & 217/MDS/2013 I.T.A. NOS.1315 & 1316/MDS/2016 I.T.A. NOS.590 TO 592/MDS/201 6 I.T.A. NO.1443/MDS/ 2016 I.T.A. NO.568/MDS /2016 0 ,/78 98(/ /COPY TO: 1. './ /ASSESSEES 2. ASSESSING OFFICER 3. 3 :/ () /CIT(A)-1, COIMBATORE 4. CIT-II, COIMBATORE 5. 8; ,/ /DR 6. <' = /GF.