Asst. CIT, Central Circle, Kolhapur V. Sanjay Dhanchand Ghodawat (HUF), Kolhapur

ITA 627/PUN/2013

• Counselvise Citation: 62724514 RSA 2013
• Duration Of Justice: 1 year(s) 4 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2014
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 07-07-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 07-03-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A K MODI
• Keywords: Unexplained investment; Depreciation; Search and seizure; Opportunity of cross examination; Block assessment
• Section: 32; 131; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI R.S. PADVEKAR, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NOS.621 TO 625 & 627/PN/2013 (ASSESSMENT YEARS : 2003-04 TO 2007-08 & 2009-10) ACIT, CENTRAL CIRCLE, KOLHAPUR .. APPELLANT VS. SANJAY DHANCHAND GHODAWAT (HUF), SUSHREYA, YASHWANT HOUSING SOCIETY, JAYSINGPUR, TAL : SHIROL, DIST : KOLHAPUR .. RESPONDENT PAN NO.AAEHS6340S ASSESSEE BY : SHRI BHARAT SHAH REVENUE BY : SHRI A.K. MODI DATE OF HEARING : 07-07-2014 DATE OF PRONOUNCEMENT : 16-07-2014 ORDER PER BENCH : THE ABOVE APPEALS FILED BY THE REVENUE ARE DIRECTE D AGAINST THE COMMON ORDER DATED 18-12-2012 OF THE CIT(A), KOLHA PUR RELATING TO ASSESSMENT YEARS 2003-04 TO 2007-08 AND 2009-10 RES PECTIVELY. SINCE COMMON ISSUES ARE INVOLVED IN ALL THESE APPEALS, TH EREFORE, THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CO MMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NO.621/PN/2013 (A.Y. 2003-04) : 2. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE CIT(A) ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF U NEXPLAINED INVESTMENT IN CARS OF RS.8,00,000/-. 2. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND A ND MODIFY THE ABOVE GROUND RAISED, ANY OTHER GROUNDS AT THE TIME OF PROCEEDINGS BEFORE THE HONBLE TRIBUNAL WHICH MAY PLEASE BE GRAN TED. 2 2.1 FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSES SEE IS AN HUF AND IS ENGAGED IN THE BUSINESS OF CONSTRUCTION, GENERATION OF POWER AND DEALING IN SHARES. A SEARCH ACTION U/S. 132(1) OF THE ACT WAS CONDUCTED ON 04- 02-2009 IN THE GHODAWAT GROUP OF CASES. THE ASSESS EE BEING ASSOCIATED WITH THIS GROUP WAS ALSO COVERED. CONSEQUENT UPON SEARCH, ASSESSMENT ORDERS WERE PASSED IN THE YEAR UNDER CONSIDERATION. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER OBSER VED FROM THE INVENTORY OF CARS OWNED BY GHODAWAT GROUP THAT SECO ND HAND CARS, USED FOR A SPAN OF LESS THAN SIX MONTHS, WERE PURCHASED BY THE ASSESSEE AT ABOUT HALF THE PRICE OF ITS ORIGINAL COST. SIMILARL Y, IN SOME CASES THE ASSESSING OFFICER NOTICED THAT ONLY 50% OF THE COST , AT WHICH SUCH CARS WERE PURCHASED, WAS REFLECTED IN BOOKS. IN THIS REG ARD, VARIOUS INSTANCES HAVE BEEN BROUGHT OUT IN THE ASSESSMENT ORDER. THE ASSESSING OFFICER OBSERVED THAT IN THE STATEMENT RECORDED DURING ASSE SSMENT PROCEEDINGS, ONE SHRI PONKSHE DEPOSED OF HAVING SOLD MARUTI-SX4 CAR TO GHODAWAT GROUP AT RS.7,00,000/-, WHEREAS THE AMOUNT REFLECTE D IN THE BALANCE SHEET WAS RS. 3.50 LAKHS ONLY. THE DIFFERENCE, IT IS MENT IONED, COULD NOT BE EXPLAINED BY THE AUTHORIZED REPRESENTATIVE. ANOTHER INSTANCE WHICH CAME TO THE NOTICE OF THE ASSESSING OFFICER WAS THA T THE ASSESSEE HAD PURCHASED MERCEDES S. CLASS CAR BEARING NO. MH 11-M -55 FROM SHRI SUNIL RAMANLAL SHAH, AN LIC AGENT, FOR RS. 31,00,00 0/- WHICH WAS PURCHASED BY SHRI SHAH AT RS.56,29,015/-. SIMILAR W AS THE CASE IN RESPECT OF CARS PURCHASED FROM M/S. S F CHOUGULE, S ANGLI AND FROM SHRI H T TAMBOLI OF SATARA WHERE THE ASSESSEE PURCHASED A CAR AT THE COST OF RS.3,00,000/- ON 18/12/2007 WHICH WAS ORIGINALLY PU RCHASED BY SHRI CHOUGULE AT RS.6,26,500/-. 3 2.2 BASED ON THE ABOVE OBSERVATIONS, THE ASSESSING OFFICER ADDED TO THE TOTAL INCOME THE DIFFERENCE BETWEEN PRICE SHOWN IN THE BOOKS AND THE ORIGINAL PRICE OF THE CAR, TREATING IT AS THE ASSES SEE'S UNACCOUNTED INVESTMENT IN RESPECT OF THE FOLLOWING CARS PURCHAS ED DURING THE IMPUGNED ASSESSMENT YEAR, AS WELL AS FOR A.Y.2006-0 7 AND A.Y. 2007- 08: ASST. YEAR CAR MODEL & NO. EXCESS MONEY PAID 2003-04 SONATA MH-12-BH-99 PURCHASED FROM SOU. ADITEE A. SANGAVADEKAR, PUNE AT ` 700000/- ` 3,50,000/ - SKODA MH-12-AS-2787 PURCHASED FROM SHIEKH AJIJ RAMJAN AT ` 500000/- ` 2,50,000/ - FIAT PALIO MH-01-DA-5487 PURCHASED FROM BONITA D. CHHABRIA AT ` 250000 ` 1,25,000/ - TEMPO TRAVELLER GA-01-E-1219 PURCHASED FROM SUMITRA S. MATKAR, PONDA, GOA ` 75,000/ - TOTAL ` `` ` 8,00,000/ - 2006-07 TATA INDIA MH-10-E-6145 PURCHASED FROM SHRI AMIR ABBAS PIJARI, SANGLI AT ` 250000/- ` 1,25,000/ - VOLKAS WAGEN TOURAGE MP-12-M-055 PURCHASED FROM PARAMANAND GARG, NEW DELHI AT ` 4500000 ` 22,50,000/ - TOTAL ` `` ` 23,75 ,000/ - 2007-08 SANTRO MH-09-AQ-6373 PURCHASED FROM SHRI ATUL SHINDE, ICHALKARANJI AT ` 2,50,000/- ` 1,42,221/ - TOTAL ` `` ` 1,42,221/ - 3. BEFORE THE CIT(A) IT WAS SUBMITTED THAT THE ADDI TIONS MADE ON ACCOUNT OF PURCHASE OF CARS WERE UNREASONABLE AS TH E ASSESSING OFFICER HAD NOT CONSIDERED THE WEAR AND TEAR OF THE SECOND HAND CARS. IT WAS ALSO SUBMITTED THAT EVEN GOING BY THE NORMAL DEPRECIATIO N ALLOWED UNDER THE PROVISIONS OF THE ACT, THE BOOK VALUE OF MITSUBHISH I LANCER CAR WOULD BE RS.13,02,667/- AS ON THE DATE OF SALE. IN RESPECT O F THE CARS AS MENTIONED SUPRA PURCHASED IN ASSESSMENT YEARS 2003-04, 2006-07 AND 2007-08, IT WAS CONTENDED THAT THE ASSESSING OFFICER HAD NOT BR OUGHT ON RECORD THE DATE OF PURCHASE OF THESE CARS AND THEIR PURCHASE P RICE. THE ASSESSEE 4 RELIED ON THE DECISION IN THE CASE OF DHAKESHWARI C OTTON MILLS LTD. VS. CIT (1954) REPORTED IN 26 ITR 775 (SC) WHEREIN IT W AS HELD THAT THE ITO IS NOT ENTITLED TO MAKE A PURE GUESS AND MAKE AN AS SESSMENT WITHOUT REFERENCE TO ANY EVIDENCE OR ANY MATERIAL AT ALL. 4. BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE THE LD.CIT(A) DELETED THE ADDITION BY OBSERVING AS UNDER : 26. I HAVE GIVEN CAREFUL CONSIDERATION TO THE SUBMISSIONS OF THE APPELLANT WITH REFERENCE TO THE FACTS OF THE CASE. TH E ASSESSING OFFICER HAS BROUGHT THE CONCLUSION DRAWN BY THE INVESTIGATION WIN G THAT THE MODUS OPERANDI OF THE APPELLANT IS TO ASK OTHER PERSONS TO PU RCHASE THE VEHICLES THAT HE WANTS AND THEN TO AND TRANSFER IT IN HIS OWN N AME AT A LATER DATE AT ABOUT HALF THE PRICE OF THE ORIGINAL. ACCORDING TO THE ASSESSING OFFICER THESE PURCHASES ARE AFFECTED IN A SHORT SPAN OF TIME FRO M THE TIME OF ORIGINAL PURCHASE. FOUR INSTANCES HAVE BEEN CITED BY THE ASSESSING OFFICER AS CLINCHING EVIDENCES IN SUPPORT OF THE THEORY THAT V EHICLES HAVE BEEN PURCHASED AT HALF THE COST ACTUALLY PAID TO THE SELLER S. 27. IN RESPECT OF THE 4 INSTANCES MENTIONED IN THE ASSESSM ENT ORDER TO CONCLUDE THAT THE APPELLANT HAS PAID TWICE THE AMOUN T OVER AND ABOVE THE AMOUNTS MENTIONED IN THE BOOKS OF ACCOUNTS AS PURCH ASE PRICE OF THE VEHICLES, THE APPELLANT RELIED ON THE SUBMISSIONS MADE IN THE CASE OF SANJAY D GHODAWAT (INDL.) TO THE FOLLOWING EFFECT A. THE CAR PURCHASED FROM MR. VIKRAM PONKSHE PERTA INS TO AY 2008/09 AND HAS NOTHING TO DO FOR THE YEAR UNDER APPEAL AS AL SO IT IS NO WAY RELATED TO THE TRANSACTION FOR WHICH ADDITION IS MADE . FURTHERMORE, THE CONCERNED PERSON WAS NOT PRODUCED FO R MY CROSS EXAMINATION. B. THE SECOND INSTANCE IS REGARDING PURCHASE OF CAR BY GHODAWAT INDUSTRIES (INDIA) PVT. LTD. THOUGH I AM NOT CONCERNE D WITH THIS TRANSACTION IT HAS TO BE NOTED THE CAR WAS PURCHASED BY MR. SUNIL R SHAH FOR RS 56 LACS ON 27/02/2001. IT WAS SOLD TO THE COMPAN Y ON 12-04- 2003 FOR RS 31 LACS I.E. 2 YEARS AFTER PURCHASING THE SAME. AS WE ARE AWARE THE PRICE OF SECOND HAND CAR IS VERY LESS IT IS SAI D THAT ONCE A BRAND NEW CAR LEAVES THE SHOWROOM THE PRICE FOR THE SAME FAL LS BY 10% - 15%. IN THIS PARTICULAR CASE 2 YEARS HAD ALREADY ELAPSED. AF TER TWO YEARS HOW CAN THE VALUE OF THE CAR REMAIN THE SAME? C. THE THIRD INSTANCE IS ALSO FOR THE TRANSACTION P ERTAINING TO A Y 2009/2010 WHEREIN A CAR WAS PURCHASED FOR RS 5 LACS ON 28/05/2008. THIS CAR ORIGINALLY PURCHASED BY THE SELLER ON 13/05/2 006 FOR RS 18 LACS. HERE ALSO THE CAR WAS USED FOR 2 YEARS AND HENCE THE SUB MISSION MADE IN (B) ABOVE HOLD GOOD. D. THE FOURTH INSTANCE IS REGARDING PURCHASE OF CAR ON 18/12/2007. THE SELLER OF THE CAR HAS ALREADY CONFIRMED TO THE ASSESSING OFFICER THAT FOR VARIOUS REASONS HE HAD AGREED TO SELL THE CAR AT A PRIC E BELOW ITS COST PRICE. AS THIS TRANSACTION HAS BEEN CONFIRMED THE SAME C AN ALSO NOT BE A BASIS FOR MAKING AN ADDITION. 5 28. IT IS APPARENT FROM RECORDS THAT THE ASSESSING OFFICE R HAS NOT EXAMINED ANY OF THE SELLERS AND THAT HE HAS RELIED UPO N THE CONCLUSIONS DRAWN BY THE INVESTIGATION WING. IT IS ALSO CLEAR THAT THE VEHICLE WAS PURCHASED FROM MR. POKSHE IN THE ASSESSMENT YEAR 2008-09. HENCE THE FINDINGS WOULD BE RELEVANT FOR THE ASSESSMENT YEAR 2009- 10. FURTHER THE ASSESSING OFFICER HAS NOT GIVEN AN OPPORTUNITY OF CROSS EX AMINATION TO THE APPELLANT. HOWEVER THE APPELLANT HAS ALSO NOT DE MANDED AN OPPORTUNITY OF CROSS EXAMINATION IN ASSESSMENT STAGE. 29. IN RESPECT OF THE TRANSACTION OF PURCHASES OF S CLA SS MERCEDES BENZ, JAGUAR AND LAND CRUISER, IT IS EVIDENT THAT THE VEHIC LES WERE PURCHASED AFTER TWO YEARS FROM ORIGINAL SALE. THE COST OF VEHICL ES UNDERGOES SUBSTANTIAL EROSION WITHIN A COUPLE OF YEARS OF PURCHASE S; ESPECIALLY IN LUXURY SEGMENT. THIS IS FOR THE REASON THAT THESE VEHIC LES HAVE AN ELITIST VALUE ATTACHMENT. THE PERSONS WHO CAN BUY THESE CARS WI LL NOT PURCHASE IT AT A HIGHER VALUE BECAUSE MORE OFTEN THAN NOT THE PERSON IS QUITE CAPABLE OF PURCHASING THE VEHICLE FIRST-HAND. HENCE H E ALWAYS HUNTS FOR A BARGAIN TO PURCHASE A VEHICLE FOR LESSER THAN THE DEMA NDED PRICE. UNLESS AND UNTIL THE BUYER GETS A GOOD BARGAIN PRICE, HE WI LL NOT PURCHASE THE VEHICLE. THIS PHENOMENON IS COMMON ACROSS ALL MARKETABL E ITEMS OF LUXURY SEGMENT. FURTHER THE PRICE OF A VEHICLE DEPEN DS UPON ITS CONDITION. A RUN DOWN VEHICLE, A VEHICLE WHICH HAS M ET AN ACCIDENT, OR A VEHICLE WITH RECURRING TECHNICAL FAULT WILL FETCH L OWER PRICE IN THE MARKET, EVEN THOUGH IT MAY BE SIX MONTHS OLD. A VISIT BY THE A SSESSING OFFICER TO THE USED CAR SALES DIVISION OF MERCEDES AND MITSUBISHI VEH ICLES WOULD HAVE REVEALED WHETHER THE VEHICLES WERE APTLY VALUED AT THE PRICE IT WAS SOLD. IN THE END PRICE OF LUXURY SEGMENT VEHICLES IS A MATTER OF PERCEPTION. ITS VALUE LARGELY LIES IN THE EYES OF THE PURCHASER. SINCE WE ARE DEALING WITH SPECIFIC INSTANCES OF SALES A GENERALISA TION CANNOT BE DRAWN THAT SINCE THE VEHICLES WERE ONLY TWO YEARS OLD THEY SHOULD HAVE BEEN VALUED AT TWICE THE AMOUNT AT WHICH THEY WERE BROUGHT. IN FACT THE ASSESSING OFFICER HAS NOT EVEN BOTHERED TO FIND OUT THE VALUE OF FIRST HAND VEHICLES OF THE SAME MAKE. THE APPELLANT HAS CLEARLY B ROUGHT OUT THAT THE ORIGINAL COST OF MERCEDES WAS `56 LAKHS. MOST CERTAINLY A SECOND HAND CAR OF THE SAME MAKE WOULD NOT HAVE COST ` 61 LAKHS, WHICH WOULD BE THE PRICE IF THE LOGIC OF ASSESSING OFFICER IS FOLLOWED. IN MOST CASES, BY DOUBLING UP THE COST OF PURCHASE, THE PRICE OF SECOND HAND CARS HAS EXCEEDED THE ORIGINAL COST OR SHOWROOM PRICE OF THE SA ME VEHICLE. 30. THE APPELLANT HAS ALSO RELIED ON THE CASE OF STATE OF KERALA V. C VELLUKUTTY 60 ITR 239 (SC) WHEREIN SECRET ACCOUNTS WERE DISCOVERED IN THE SURPRISE INSPECTION OF THE HEAD OFFICE. THE SALES T AX OFFICER ISSUED A NOTICE TO THE RESPONDENT PROPOSING TO DETERMINE TO TH E BEST OF HIS JUDGMENT THE TURNOVER WHICH HAD ESCAPED ASSESSMENT. THE RESPONDENT HAD NO OBJECTION FOR A REASSESSMENT BEING MADE IN RESPEC T OF THE TURNOVER OF THE HEAD OFFICE ON THE BASIS OF THE SECRE T ACCOUNTS DISCOVERED, BUT OBJECTED TO THE REASSESSMENT OF THE TURNOVER OF HIS BRANCH OFFICE. THE SALES TAX OFFICER APPLIED THE SAME PRINCIPLE IN REGAR D TO THE ASSESSMENTS OF BOTH THE SHOPS AS HE HAD ADOPTED IN THE CASE OF THE TURNOVER FOR THE ASSESSMENT YEAR 1955-56. IN RESPECT OF TURNOVER OF THE H EAD OFFICE HE FOUND THAT IN REGARD TO GENERAL GOODS THE ESCAPED ASSESSM ENT WAS 200% OF THE TURNOVER ASSESSED; AND IN REGARD TO SUGAR, 500% O F THE ASSESSED TURNOVER. HE, THEREFORE, ADDED 200% AND 500% TO THE TURNOVER OF THE GENERAL GOODS AND THE TURNOVER OF SUGAR RESPECTIVELY. IN THE SAME MANNER IN REGARD TO THE TURNOVER OF THE BRANCH OFFI CE, THOUGH NO SECRET BOOKS WERE DISCOVERED IN RESPECT OF THAT OFFICE, HE AD DED TO THE TURNOVER ALREADY ASSESSED, ANOTHER 200% OF THE TURNOVER OF THE G ENERAL GOODS AND 500% OF THE TURNOVER OF SUGAR. WITH THE RESULT HE FIX ED THE TOTAL TURNOVER OF THE TWO OFFICES AT RS. 39,66,377-2-6 MADE UP OF TH E TURNOVER OF THE HEAD OFFICE AT RS. 2,21,251-14-5 AND OF THE BRANCH O FFICE AT RS.37,45,125- 4-1. THE RESPONDENT PURSUED THE MATTER UP TO THE HIGH COURT. THE HIGH 6 COURT SET ASIDE THE ORDERS OF THE SALES TAX TRIBUNAL IN RESPECT OF BOTH THE ASSESSMENT YEARS ON THE GROUND THAT THE FINDING OF THE E SCAPED ASSESSMENT SO FAR AS THE BRANCH OFFICE WAS CONCERNED AMOUN TED TO AN ERROR OF LAW, BECAUSE IT WAS BASED ON CONJECTURE. REJE CTING THE PLEA OF THE STATE THAT THE MATTER SHOULD BE REMANDED FOR A FRESH ASSESSMENT, THE HIGH COURT DISMISSED THE REVISIONS. 31. IN APPEAL, THE HONBLE SUPREME COURT STATED THAT THE EXPRESSION 'TO THE BEST OF HIS JUDGMENT' IN SECTION 12(2)(B) OF THE T RAVANCORE-COCHIN GENERAL SALES TAX ACT IS PRESUMABLY BORROWED FROM SECTI ON 23(4) OF THE INCOME-TAX ACT (CORRESPONDING TO SECTION 144 OF THE 1 961 ACT.). THEREAFTER IT REFERRED TO THE DECISION OF THE PRIVY COUNCIL IN COMMISSIONER OF INCOME-TAX V. LAXMINARAYAN BADRIDAS [1937] 5 I.T.R. 170 AT 180 WHICH HAD CONSIDERED THE WORDS 'TO THE BEST OF HIS JUDGMENT'. THEREIN IT IS OBSERVED 'HE (THE ASSESSING AUTHORITY) MUST NOT ACT DISHONESTLY, O R VINDICTIVELY OR CAPRICIOUSLY BECAUSE HE MUST EXERCISE J UDGMENT IN THE MATTER. HE MUST MAKE WHAT HE HONESTLY BELIEVES TO BE A FAIR ESTIMATE OF THE PROPER FIGURE OF ASSESSMENT, AND FOR THI S PURPOSE HE MUST, THEIR LORDSHIPS THINK, BE ABLE TO TAKE IN' TO CONSIDERATION LOCAL KNOWLEDGE AND REPUTE IN REGARD TO THE ASSESSEE 'S CIRCUMSTANCES, AND HIS OWN KNOWLEDGE OF PREVIOUS RETURN S BY AND ASSESSMENTS OF THE ASSESSEE, AND ALL OTHER MATTERS WHICH HE T HINKS WILL ASSIST HIM IN ARRIVING AT A FAIR AND PROPER ESTIMA TE; AND THOUGH THERE MUST NECESSARILY BE GUESS-WORK IN THE MATT ER, IT MUST BE HONEST GUESS-WORK. IN THAT SENSE, TOO, THE ASSESSM ENT MUST BE TO SOME EXTENT ARBITRARY.' 32. IT WAS HELD, UNDER THE CIRCUMSTANCES MENTIONED, T HAT THE LIMITS OF THE POWER ARE IMPLICIT IN THE EXPRESSION 'BEST OF HIS JUDGMENT'. JUDGMENT IS A FACULTY TO DECIDE MATTERS WI TH WISDOM TRULY AND LEGALLY. JUDGMENT DOES NOT DEPEND UPON THE ARBIT RARY CAPRICE OF A JUDGE, BUT ON SETTLED AND INVARIABLE PRINCIPLES OF JU STICE. THOUGH THERE IS AN ELEMENT OF GUESS-WORK IN A 'BEST JUDGMENT ASSESSMENT', IT SHALL NOT BE A WILD ONE, BUT SHALL HAVE A REASONABLE NEXUS TO THE A VAILABLE MATERIAL AND THE CIRCUMSTANCES OF EACH CASE. 33. THE SUPREME COURT IN THE CASE OF COMMISSIONER OF SALES TAX V. H.M. ESUFALI H.M. ABDULALI [1973] 90 ITR 271, 276, 277; 32 SC 77 (SC), (RELIED UPON BY THE ASSESSING OFFICER) LAYS DOWN THE LAW AS FOLLO WS: 'THE DISTINCTION BETWEEN A 'BEST JUDGMENT' ASSESSMENT AND ASSESSMENT BASED ON THE ACCOUNTS SUBMITTED BY AN ASSESSEE MUST BE BORNE IN MIND. SOMETIMES THERE MAY BE INNOCENT OR TRIVIAL MISTAKES IN THE ACCOUNTS MAINTAINED BY THE ASSESSEE. THERE MAY BE EVEN CERTAIN UNINTENDED OR UNIMPORTANT OMISSIONS IN THOSE ACCOUNTS; BUT YET THE ACCOUNTS MAY BE ACCEPTED AS GENU INE AND SUBSTANTIALLY CORRECT. IN SUCH CASES, THE ASSESSMENTS ARE M ADE ON THE BASIS OF THE ACCOUNTS MAINTAINED EVEN THOUGH THE A SSESSING OFFICER MAY ADD BACK TO THE ACCOUNTS PRICE OF ITEMS T HAT MIGHT HAVE BEEN OMITTED TO BE INCLUDED IN THE ACCOUNTS. IN SUCH A CASE, THE ASSESSMENT MADE IS NOT A 'BEST JUDGMENT ASSESSMENT. IT I S PRIMARILY MADE ON THE BASIS OF THE ACCOUNTS MAINTAINED BY THE ASSESSEE. BUT, WHEN THE ASSESSING OFFICER COMES TO THE CONCL USION THAT NO RELIANCE CAN BE PLACED ON THE ACCOUNTS MAINT AINED BY THE ASSESSEE, HE PROCEEDS TO ASSESS THE ASSESSEE ON THE BASIS OF HIS 'BEST JUDGMENT'. IN DOING SO, HE MAY TAKE SUCH ASSISTANCE AS THE ASSESSEE'S ACCOUNTS MAY AFFORD; HE MAY ALSO RELY ON OTHER INFORMATION GATHERED BY HIM AS WELL AS THE SURROUNDING CIRCUMSTANCES OF THE CASE. THE ASSESSMENTS MADE ON THE BA SIS OF 7 THE ASSESSEE S ACCOUNTS AND THOSE MADE ON 'BEST JUDGMENT' BASIS ARE TOTALLY DIFFERENT TYPES OF ASSESSMENTS......' 'IN ESTIMATING ANY ESCAPED TURNOVER, IT IS INEVITABLE THAT THERE IS SOME GUESS-WORK. THE ASSESSING AUTHORITY WHILE- MAKING TH E 'BEST JUDGMENT 1 ASSESSMENT, NO DOUBT, SHOULD ARRIVE AT ITS CONCLUSION WITHOUT ANY BIAS AND ON RATIONAL BASIS. THAT AUTHORIT Y SHOULD NOT BE VINDICTIVE OR CAPRICIOUS. IF THE ESTIMATE MADE BY THE ASSESSING AUTHORITY IS A BONA FIDE ESTIMATE AND IS BASED ON A RA TIONAL BASIS, THE FACT THAT THERE IS NO GOOD PROOF IN SUPPORT OF TH AT ESTIMATE IS IMMATERIAL. PRIMA FACIE, THE ASSESSING AUTHORITY IS THE BEST JUDGE OF THE SITUATION. IT IS HIS 'BEST JUDGMENT' AND NOT OF ANYONE ELSE. THE HIGH COURT COULD NOT SUBSTITUTE ITS 'BEST JUDGMENT FOR THAT OF THE ASSESSING AUTHORITY. IN THE CASE OF 'BEST JUDGMENT' A SSESSMENTS THE COURTS WILL HAVE TO FIRST SEE WHETHER THE ACCOUNTS MAINTAINED BY THE ASSESSEE WERE RIGHTLY REJECTED AS UNRELIABLE. IF THEY COME TO THE CONCLUSION THAT THEY WERE RIGHTLY REJECTED, THE NEXT QUESTION THAT ARISES FOR CONSIDERATION IS WHETHER THE BASIS ADOPTE D IN ESTIMATING THE TURNOVER HAS REASONABLE NEXUS WITH THE E STIMATE MADE. IF THE BASIS ADOPTED IS HELD TO BE A RELEVANT BA SIS EVEN THOUGH THE COURTS MAY THINK THAT IT IS NOT THE MOST AP PROPRIATE BASIS, THE ESTIMATE MADE BY THE ASSESSING AUTHORITY CANNO T BE DISTURBED.' 34. IN THE H.M. ESUFALI H.M. ABDULALI CASE (SUPRA)THE SUPREME COURT ALSO QUOTED WITH APPROVAL THE OBSERVATION OF SUBBARAO J. (AS HE THEN WAS) IN THE CASE OF STATE OF KERALA V. C. VELUKUTTY [1966] 60 ITR 239 (SC) (S UPRA). 35. IN THE CASE OF CIT V. DR M K MEMON 248 ITR 310 (BOM), SEARCH WAS CARRIED OUT IN DECEMBER '96 IN THE COURSE OF WHICH C ERTAIN BOOKS WERE FOUND FOR THE PERIOD NOVEMBER '93 TO DECEMBER '96. THE A O MADE THE ADDITION FOR THE ENTIRE BLOCK PERIOD ON THE BASIS OF SUCH BOOKS. THE HONBLE COURT OBSERVED: BEFORE CONCLUDING WE MAY MENTION THAT IN ALL MATTER S OF BLOCK ASSESSMENT, THE DEPARTMENT HEAVILY RELIES UPON THE JUDGM ENT OF THE SUPREME COURT IN THE CASE OF CST V. H.M. ESUFALI H.M. ABDULALI [1973] 90 ITR 271. THAT WAS A CASE IN WHICH UNREPORTE D SALES WERE DETECTED FOR A PERIOD OF 19 DAYS IN A YEAR. TH E ASSESSING OFFICER ESTIMATED THE TURNOVER FOR THE ENTIRE PERIOD OF ONE YEAR ON THE BASIS OF THE UNREPORTED SALES FOR THE PERIOD OF 19 DAYS. THE QUESTION THAT AROSE BEFORE THE SUPREME COURT IS AS TO W HETHER THE ASSESSING OFFICER WAS RIGHT IN DOING SO. IT WAS HELD BY T HE APEX COURT THAT IN A MATTER INVOLVING UNREPORTED SALES, TH E ASSESSING OFFICER HAS TO PROCEED ON THE BASIS OF ESTIMATION WHIC H INVOLVES SOME AMOUNT OF GUESS WORK. THE APEX COURT, ACCORDINGLY , UPHELD THE ORDER OF THE ASSESSING OFFICER IN ESTIMATING THE TUR NOVER ON THE BASIS OF THE UNREPORTED SALES FOR A SHORTER PERIOD. HOWEVER, IN THE PRESENT MATTER, WE ARE CONCERNED WITH THE BLOCK ASSESSMENT OF 10 YEARS. ULTIMATELY, THE SAID JUDGMENT OF THE SUPREME COURT MUST BE SEEN IN THE CONTEXT OF THE FACTS OF E ACH CASE. [EMPHASIS SUPPLIED]. 36. APPLYING THESE PRINCIPLES, ONE HAS TO FIND OUT WHE THER THE ESTIMATION OF THE PURCHASE PRICE OF VEHICLES HAS REASONABLE NEXUS W ITH THE BASIS OF ESTIMATION IN THE CONTEXT OF THE CASE? I FIND THAT TH ERE IS NO BASIS FOR MAKING THE IMPUGNED ADDITIONS EXCEPT IN THE CASE OF C AR PURCHASED FROM SHRI VIKRARN PONKSHE WHO HAD STATED THAT HE RECEIVED TWICE THE AMOUNT OF MONEY THAN WHAT WAS RECEIVED BY HIM IN CHEQUE. IS THERE ANY OTHER EVIDENCE APART FROM THE ORAL EVIDENCE GIVEN BY SOME SELLERS THAT THE 8 APPELLANT HAD PAID ANYTHING OVER AND ABOVE THE AMOU NTS SHOWED IN THE BOOKS OF ACCOUNT? THERE IS NO EVIDENCE. UNDER THE CIR CUMSTANCES THERE MUST EXIST SOME SURROUNDING SITUATIONS WHICH WOULD AFFORD THE ASSESSING OFFICER AN OPPORTUNITY TO MAKE A GUESS WORK THA T THE APPELLANT MUST HAVE PAID DOUBLE THE AMOUNT TO THE VENDORS TO PU RCHASE THE CARS. IN THIS CASE THERE WAS NO MATERIAL BEFORE THE ASSESSING AU THORITY, EXCEPT ORAL EVIDENCE OF ONE SELLER, RELEVANT TO THE CARS PUR CHASED WHICH WOULD WARRANT A CONCLUSION THAT THE APPELLANT HAD PAID TWI CE THE AMOUNT OF THE REGISTRATION VALUE TO PURCHASE THE VEHICLES. ORAL EVID ENCE IS REBUTTABLE AND WILL APPLY TO THE FACTS RELEVANT TO THE EVIDENCE . IT CANNOT BE UTILISED AS A MATTER OF FACT UNLESS THE EVIDENCES OVERWHELMINGL Y PITCH FOR A CONCLUSION THAT IS INCONTROVERTIBLE, HAVING REGARD TO THE COMMON COURSE OF NATURAL EVENTS, HUMAN CONDUCT AND PUBLIC AND PRIV ATE BUSINESS, IN THEIR RELATION TO THE FACTS OF THE PARTICULAR CASE. T HE FACTS IN THIS CASE SUGGEST THAT THE ACTION OF THE ASSESSING OFFICER WAS UNSUPP ORTED BY ANY RELEVANT MATERIAL. THE ADDITION IS MADE ON SURMISES AND CONJECTURES. THERE IS NO EVIDENCE IN SUPPORT OF ADDITIONS MADE IN R ESPECT OF PURCHASE VALUE OF CARS. HENCE, ADDITIONS ON THIS ACCOUNT ARE DELETED FOR TH E YEARS UNDER CONSIDERATION. 4.1 AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REV ENUE IS IN APPEAL BEFORE US. 5. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAV E ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. WE FIND THE ASS ESSING OFFICER IN THE INSTANT CASE MADE ADDITION OF RS.8 LAKHS BEING UNAC COUNTED INVESTMENT IN CARS ON THE BASIS OF THE FINDING OF THE INVESTIG ATION WING OF THE DEPARTMENT, ACCORDING TO WHICH THE ASSESSEE USED TO BUY SECOND HAND CARS USED FOR A SPAN OF LESS THAN 6 MONTHS BY THE P REVIOUS OWNER AT HALF THE PRICE OF ITS ORIGINAL PRICE AND USED TO PAY EXT RA MONEY TO THE CAR OWNERS. FOR THE PURPOSE OF MAKING THE ADDITION FOR THE IMPUGNED ASSESSMENT YEAR THE ASSESSING OFFICER BROUGHT ON RE CORD 4 CASES WHEREIN SECOND HAND CARS ARE PURCHASED. HOWEVER, WE FIND T HE DATE OF PURCHASE OF THE CARS BY THE PREVIOUS OWNERS ARE NOT GIVEN BY THE ASSESSING OFFICER. HE HAS NOT EXAMINED ANY OF THE SELLERS. HE HAS NOT GIVEN THE COST PRICE OF THE CARS. THE ENTIRE ADDITION IT APPE ARS WAS BASED ON THE 9 BASIS OF THE STATEMENT OF ONE PERSON, I.E. MR. VIKR AM PONKSHE WHO HAD STATED THAT HE RECEIVED TWICE THE AMOUNT OF MONEY T HAN WHAT WAS RECEIVED BY HIM IN CHEQUE. NO OTHER EVIDENCE WHATS OEVER WAS BEFORE THE ASSESSING OFFICER TO TAKE SUCH A VIEW IN THE CA SE OF THE ASSESSEE. IT HAS BEEN HELD BY THE HONBLE SUPREME COURT IN THE C ASE OF DHAKESHWARI COTTON MILLS REPORTED IN 26 ITR 715 THAT PRESUMPTIO NS AND SURMISES HOWEVER STRONG MAY BE CANNOT BE THE BASIS FOR AN AD DITION. FURTHER, WE FIND MERIT IN THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT ONCE THE CAR IS USED, ITS RESALE VALUE IS LESS THAN THE ORIGINAL PRICE. THEREFORE, IT CANNOT BE SAID IN ALL THE CASES THAT A SECOND HA ND CAR WILL FETCH THE SAME PRICE AS THE COST OF A NEW CAR. IN THIS VIEW OF THE MATTE AND IN VIEW OF THE DETAILED REASONING GIVEN BY THE LD.CIT(A) W E FIND NO INFIRMITY IN HIS ORDER. ACCORDINGLY, THE SAME IS UPHELD AND THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. ITA NO.622/PN/2013 (A.Y. 2004-05) : 6. THE ONLY EFFECTIVE GROUND RAISED BY THE REVENUE IS AS UNDER : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE CIT(A) ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF D EPRECIATION ON WINDMILL OF RS.2,24,000/-. 6.1 FACTS OF THE CASE, IN BRIEF, ARE THAT DURING TH E COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD, IN THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR 2004-05, INSTALLED NEW WIND MILLS. ON PERUSAL OF DETAILS FURNISHED BEFORE HIM, HE NOTICED THAT THE ASSESSEE HAD CLAIMED DEPRECIATION ON THE ENTIRE EXP ENDITURE INCLUDING PURCHASE AND INSTALLATION OF THE WIND MILL. THE ASS ESSEE WAS ASKED TO SUBSTANTIATE ITS CLAIM MADE ON THE ASSETS OTHER THA N WIND MILL. 10 6.2 THE ASSESSEE SUBMITTED BEFORE THE ASSESSING OF FICER THAT THERE WAS NO CIVIL WORK INVOLVED FOR ERECTION OF THE WIND TUR BINE AS PARTS LIKE CONTROL PANELS AND DISPLAY METERS WERE HOUSED WITHI N THE TOWER ITSELF. IT WAS SUBMITTED THAT THE CIVIL WORK DONE IN THE FORM OF FOUNDATION WORK COULD NOT BE SEPARATED FROM THE WIND TURBINE AND TH EREFORE IT WAS ENTITLED FOR DEPRECIATION ON THE ENTIRE COST OF THE WIND TURBINE. NOT BEING SATISFIED WITH THE CONTENTION OF THE ASSESSEE , THE ASSESSING OFFICER, AFTER PERUSING VARIOUS BILLS IN CONNECTION WITH EXP ENSES INCURRED ON WIND TURBINE, HELD THAT THE ASSESSEE WAS NOT ENTITL ED FOR DEPRECIATION ON CIVIL WORK, ERECTION WORK, INSTALLATION WORK AND PA YMENT TOWARDS DEVELOPMENT CHARGES. IN THIS REGARD THE AO RELIED O N THE ORDER OF THE ITAT IN POONAWALA FINWEST & AGRO (P) LTD. VS. ACIT [2008] 1 18 TTJ 68 (PUNE). THE AO ALSO REFERRED TO RULE 32(1) OF THE INCOME-TA X RULES 1962, APPENDIX I, PART A, ITEM III(3)(XIII)(I). BAS ED ON THE ABOVE, THE AO MADE ADDITIONS TO THE TOTAL INCOME OF THE ASSES SEE. 7. BEFORE CIT(A) THE ASSESSEE REITERATED THE SAME S UBMISSIONS AS MADE BEFORE THE ASSESSING OFFICER. IT WAS SUBMITTED THAT IN THE CASE OF POONAWALA FINWEST AGRO PVT. LTD., (SUPRA) THE COST OF TRANSFORMER UP TO DP STRUCTURE AND INTERNAL LINE UP TO THE METER WAS HELD AS AN INTEGRAL PART OF THE MAIN PLANT, I.E. WIND TURBINE AND DEPRECIATI ON @100% WAS ALLOWED. IT WAS SUBMITTED THAT NECESSARY CIVIL WOR KS TOWARDS ERECTION AND INSTALLATION OF THE WIND TURBINE ARE INTEGRAL P ART OF THE WIND MILL WITHOUT WHICH THE WIND MILL CANNOT COME INTO EXISTE NCE AND GENERATE ELECTRICITY AND THEREFORE THE SAME HAS TO BE TREATE D AS PART OF THE WIND MILL. 11 7.1 HOWEVER, THE LD.CIT(A) WAS NOT FULLY CONVINCED WITH THE ARGUMENTS ADVANCED BY THE ASSESSEE. HE REFERRED TO HIS DECISION IN THE CASE OF SANJAY D. GHODAWAT WHEREIN HE HAD GIVEN CE RTAIN GUIDELINES AND DIRECTED THE AO TO RECOMPUTE THE DEPRECIATION A S PER THE SAID GUIDELINES. SINCE THE ASSESSEE IN THE INSTANT CASE HAS FILED A REVISED WORKING OF DEPRECIATION, HE DIRECTED THE ASSESSING OFFICER TO GO THROUGH THE SAME AND ALLOW DEPRECIATION AS PER THE DIRECTIO NS GIVEN THEREIN. THE RELEVANT OBSERVATIONS OF LD.CIT(A) READ AS UNDER : 18. THE ISSUE OF DISALLOWANCE OF DEPRECIATION CLAIME D ON WINDMILL HAD COME UP BEFORE ME IN THE CASE OF SHRI SANJAY D G HODAWAT (INDIVIDUAL) IN APPEAL NO.KOP/608, 609, 613, 612, 6 11, 610/10-11 DATED 09/07/2012 FOR ASSESSMENT YEARS 2004-05 TO 2009-10. IN THE SAID ORDER, AFTER EXAMINING IN DEPTH THE LEGAL ASPECTS OF DEPRECIATION AND THE FUNCTIONAL INTERDEPENDENCE OF THE WIND TURBINE AND THE FOUNDATION, I HAVE HELD THAT THE COST OF THE NEW WIND TURBINE WILL INCLUDE COST OF COMPONENT AND ACCESSORY, COST OF COMPONENT FOR GENERAT ION OF ELECTRICITY SUPPLY OF ROTOR BLADES, ELECTRICAL ITEMS, COMPONENTS OF RE DEVICE, COST OF TUBULAR TOWER, COST OF WORK INCLUDING FOUNDATION WORK AND LABOUR RELATED COST. THE RELEVANT PORTION OF THE ABOVE APPELLATE ORDER IS REPRODUCED HEREUNDER: 51. WHAT IS NOTICEABLE IS THAT THESE STRUCTURES ALSO HAV E A FOUNDATION. A FOUNDATION IS MADE TO PROVIDE STABILITY TO THE STRUCTURE WHICH IT SUPPORTS. IT DERIVES ITS NATURE AND CHARACTER FROM THE SUPERSTRUCTURE THAT IS BUILT OVER IT. THEREFO RE, A FOUNDATION USING THE SAME TECHNIQUES AND PRINCIPLES OF CIVIL CONSTRUCTION WILL BECOME A PART OF A BUILDING IF IT IS ASSOCIATED WITH THE SUPERSTRUCTURE WHICH CAN BE TERMED AS A BUILD ING. SOME FOUNDATION WILL ACQUIRE FUNCTIONAL ATTRIBUTES OF A P LANT IF A PLANT AND MACHINERY IS SUPPORTED BY IT. THEREFORE, WE FIND A CONCRETE STRUCTURE OF A BRICK KILN OR A REFRACTORY KILN TO BE A PLANT AS ALSO THE CONCRETE STRUCTURE OR SHELL WHICH SURROUNDS THE LAT TICE IN A COOLING TOWER TO BE AN ASH HANDLING AND EVACUATION SY STEM WHICH IS AN AIR POLLUTION CONTROL EQUIPMENT USED IN ELECTRI CITY GENERATING PLANTS, PETRO CHEMICAL COMPLEXES, FERTILI ZER COMPLEXES ETC. IN THE SAME WAY, THE FOUNDATION OF A WTGS IS A P ART OF THE PLANT WHICH IT SUPPORTS. IT PLAYS A PASSIVE ROLE IN PROD UCTION OF ELECTRICITY BY INCREASING THE OPERATIONAL EFFICIENCY OF THE WIND TURBINE. IT IS USED FOR THE PURPOSES OF BUSINESS AND NOT F OR THE PURPOSE OF HOUSING THE BUSINESS. IN THE INSTANT CASE THE B USINESS IS PRODUCTION OF ELECTRICITY WHICH IS DONE BY THE WTG S OF WHICH THE FOUNDATION IS AN INTEGRAL PART. AS I HAVE MENTION ED EARLIER, THE CONCEPT OF BUILDING CANNOT BE ARTIFICIALLY ENLARGED TO INCLUDE ANY STRUCTURE WHICH IS NOT USED FOR HOUSING, ACCOMMODATING OR PROVIDING SHELTER AND WHICH DOES NOT FALL WITHIN THE EXTENDED MEANING GIVEN IN THE NOTES TO NEW APPENDIX I OF INCO ME-TAX RULES. I AM THEREFORE CONVINCED THAT THE COST OF FOUN DATION SHOULD BE INCLUDED AS THE COST OF WIND MILL/WTGS. 12 19. THUS, SINCE THE ISSUE INVOLVED BEING IDENTICAL, TH E DECISION GIVEN IN SANJAY GHODAWAT (INDIVIDUAL), WILL APPLY TO THE INSTANT CASE AS WELL. IT IS PERTINENT TO MENTION HERE THAT THE ISSUE OF DEPRECI ATION ON WINDMILL WAS DECIDED IN IDENTICAL MANNER BY ME IN THE CASE OF CHAPHALKAR BROTHERS IN APPEAL NO.SLI/330/10-11 DATED 12/09/2011 IN FAVOUR OF THE ASSESSEE. THE APPELLATE ORDER WAS AGITATED IN APPEAL BE FORE THE ITAT IN THE CASE OF M/S CHAPHALKAR BROTHERS. HOWEVER, A PERUSA L OF THE ITAT'S ORDER SHOWS THAT MY DECISION IN ALLOWING THE CLAIM OF DEPRECATION ON COST OF FOUNDATION OF WIND TURBINE WHICH WAS COMMISSION ED IN FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR 2008-09 WAS NOT AG ITATED IN APPEAL BY THE DEPARTMENT. IN THE SAID CASE, I HAVE DETERMIN ED THE VARIOUS COMPONENTS WHICH GO ON TO MAKE UP THE CASE OF THE WIN DMILL. THESE COMPONENTS ARE LISTED OUT IN THE TABLE BELOW: 20. THEREAFTER I HAD DIRECTED THE ASSESSING OFFICER IN THE ABOVE REFERRED ORDER TO RECOMPUTED THE DEPRECIATION ALLOW ANCE ACCORDING TO THE FOLLOWING :- I) COST OF NEW WINDMILL WILL BE INCLUSIVE OF ALL ITE MS MENTIONED AT 1 TO 5 ABOVE, II) COST OF POWER EVACUATION FACILITY AND INFRASTRUC TURE WILL BE APPORTIONED BETWEEN THE RATES APPLICABLE TO BUILDING /ROADS AND WINDMILL IN 60 : 40 RATIO, III) COST OF OTHER MISCELLANEOUS EXPENSES WILL BE APPO RTIONED ON PRORATA BASIS BETWEEN WINDMILL AND INFRASTRUCTURE FACI LITIES. 21. IT WAS SUBMITTED BY THE APPELLANT THAT THE DETAI LS OF SEPARATE COST OF FOUNDATION WERE NOT AVAILABLE WITH THEM IN RESPEC T OF WTGS SUPPLIED BY ENERCON. THE ASSESSING OFFICER IS DIRECTED TO FIND OUT THE COST OF ITEMS AT SR.NOS. 4, 5, 6 AND 7 OF THE ABOVE TABLE IN RESPEC T OF WTGS SUPPLIED BY ENERCON. THE APPELLANT IS DIRECTED TO PROVIDE THE C OST ATTRIBUTABLE TO THESE ITEMS FOR THE PURPOSE OF ALLOCATION. IN CASE THE APPELLANT IS UNABLE TO PROVIDE THESE DETAILS IN RESPECT OF SUPPLY OF WINDMI LL BY ENERCON, THE SR.NO. PARTICULARS 1. COST OF WIND TURBINE GENERATOR 2. A) COST OF COMPONENT & ACCESSORY (COPPER WOUND WIT H ACCESSORIES B) COST OF COMPONENT FOR GENERATION OF ELECTRICITY SUPPLY OF ROTOR BLADES C) ELECTRICAL ITEMS, COMPONENTS OF RE DEVICE 3. COST OF TUBULAR TOWER 4. COST OF WORK INCLUDING FOUNDATION WORK 5. LABOUR RELATED COST A) INSTALLATION OF WINDMILL B) INSTALLATION OF ELECTRICAL LINE FOR POWER TRANSM ISSION AND METER C) FINAL TESTING AND COMMISSIONING 6. REIMBURSEMENT OF POWER EVACUATION FACILITY AND CR EATION OF INFRASTRUCTURE 7. MISCELLANEOUS A) PROCESSING CHARGES B) INTEREST OF LOAN CAPITALIZED C) PROFESSIONAL FEES D) REGISTRATION FEES E) SUBSTATION CHARGES F) FRANKING CHARGES G) MEDA OR EQUIVALENT CHARGES 13 ASSESSING OFFICER WILL APPLY THE SAME RATIO AS THESE ITEM S BEAR TO TOTAL COST OF A SUZLON WINDMILL AS AVAILABLE IN OTHER CASES O F GHODAWAT GROUP. THE APPEAL ON THIS GROUND IS PARTIALLY ALLOWED. 7.2 AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REV ENUE IS IN APPEAL BEFORE US. 8. AFTER HEARING BOTH THE SIDES, WE FIND THE COORDI NATE BENCH OF THE TRIBUNAL VIDE ORDER DATED 29-11-2013 IN THE CASE O F ACIT VS. STAR FLEXIPACK INDUSTRIES & VICE-VERSA VIDE ITA NOS. 530 & 531/PN/2013 AND ITA NOS. 615 TO 620/PN/2013 AND BATCH OF APPEAL S HAS DECIDED AN IDENTICAL ISSUE AND HAS OBSERVED AS UNDER : 15. AFTER HEARING BOTH THE SIDES, WE FIND THE COORDI NATE BENCH OF THE TRIBUNAL VIDE ORDER OF EVEN DATE IN ITA NO. 609 TO 614/PN/2013 AND CO NOS. 80 TO 85/PN/2013 IN THE CASE OF ACIT VS. M/S. EVE RREADY INVESTMENT PVT. LTD., (WHICH IS A SISTER CONCERN OF THE ASSESSEE GROUP) HAS DECIDED AN IDENTICAL ISSUE AND HAS OBSERVED AS UNDER : 4. THE REVENUE HAS CONTESTED THE PARTIAL RELIEF ALLO WED BY THE CIT(A) WHEREAS THE ASSESSEE BY WAY OF CROSS-OBJECTION NO .3 HAS CONTESTED THAT THE ENTIRE CIVIL COST OF RS.20,00,000/- BE CONSIDERED AS AN INTEGRAL PART OF THE COST OF WINDMILL BY APPLYING THE FUNCTIONAL TEST AND THUS BE ALLOWED DEPRECIATIO N AT THE HIGHER RATE. 5. IN THIS BACKGROUND, WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IT WAS A CONVERGENCE OF OPINION BETWEEN TH E ASSESSEE AND THE LEARNED CIT(DR) THAT SO FAR AS THE COST OF FOUNDATION OF WINDMILL IS CONCERNED, THE SAME IS LIABL E TO BE CONSIDERED AS AN INTEGRAL PART OF THE COST OF WINDMILL HAVING REGARD TO THE DECISION OF THE PUNE BENCH OF THE TRIB UNAL IN THE CASE OF AMINITY DEVELOPERS & BUILDERS VIDE ITA NO. 1505/PN/2011 DATED 12.12.2012 AND ALSO IN TERMS OF TH E JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. COOPER FOUNDARY PVT. LTD. VIDE INCOME TAX AP PEAL NO. 1326 OF 2010 DATED 14.06.2011. THE TRIBUNAL IN THE CASE OF AMINITY DEVELOPERS & BUILDERS (SUPRA) BY APPLYING THE FUNCTIONAL TEST HELD THAT THE COST INCURRED ON THE FOUNDATION O F THE WINDMILL IS TO BE CONSIDERED AS AN INTEGRAL PART OF THE COST OF WINDMILL ERECTION AND IS THUS ELIGIBLE FOR THE DEPRECIATION @ 80%, PRESCRIBED FOR WINDMILL. THE HONBLE BOMBAY HIGH CO URT IN THE CASE OF COOPER FOUNDARY PVT. LTD. (SUPRA) HAS ALSO UPHE LD THE PROPOSITION THAT CEMENT, CONCRETE FOUNDATION IS TO BE INCLUDED IN THE COST OF WINDMILL, WHILE GRANTING DEPRECIATION @ 80% ON THE WINDMILL. THEREFORE, ON THE BASIS OF THE AFORESAID, I N-PRINCIPLE THE PLEA OF THE ASSESSEE IS LIABLE TO BE UPHELD. 6. SO, HOWEVER IT IS PERTINENT TO OBSERVE THAT THE CO ST OF CIVIL WORKS, ETC. AMOUNTING TO RS.20,00,000/- INCURRED BY T HE ASSESSEE CANNOT BE SAID TO BE ENTIRELY TOWARDS THE COST OF CIVI L WORK 14 FOUNDATION FOR THE WINDMILL. THE LEARNED COUNSEL HA S REFERRED TO THE COPY OF INVOICE RAISED BY SUZLON DEVELOPERS PRIVA TE LIMITED FOR THE COST OF CIVIL WORK, ETC. AMOUNTING TO RS.20,0 0,000/- WHICH SHOWS THAT IT IS A COMPOSITE BILL FOR FOUNDATION OF WI NDMILL, PLINTH FOR TRANSFORMER, WINDMILL CONTROL ROOM, SITE DEVELOP MENT AND INTERNAL ROAD DEVELOPMENT, ETC. IT IS IN THIS CONTE XT, ON BEING UNABLE TO DECIPHER THE EXACT COST OF THE CIVIL FOUND ATION WORK FOR WINDMILL/TRANSFORMER, THE LEARNED CIT(A) HAS APPORTIO NED THE COST BETWEEN THE BUILDINGS/ROADS AND WINDMILL IN THE R ATIO OF 60:40. THE LEARNED COUNSEL VEHEMENTLY POINTED OUT T HAT THOUGH SEPARATE COSTS WERE NOT ENUMERATED BY SUZLON DEVELOPER S PRIVATE LIMITED WHO HAD UNDERTAKEN THE EXECUTION OF WORK, Y ET THE ITEMS OF CIVIL WORK ON ACCOUNT OF BUILDINGS/ROADS WAS MINIM AL AND THEREFORE APPORTIONMENT MADE BY THE CIT(A) WAS UNJUST IFIED. THE LEARNED COUNSEL FURTHER POINTED OUT THAT THE MAJOR C OSTS ARE IN RELATION TO THE CONSTRUCTION OF CIVIL FOUNDATION FOR THE WINDMILL/OTHER EQUIPMENT REQUIRED FOR POWER GENERAT ION AND IS LIABLE TO BE CONSIDERED AS A PART OF WINDMILL FOR T HE PURPOSES OF GRANT OF DEPRECIATION @ 80%. 7. CONSIDERING THE ENTIRETY OF CIRCUMSTANCES, AND ALSO THE PLEA RAISED BEFORE US, IN OUR CONSIDERED OPINION IT WO ULD MEET THE ENDS OF JUSTICE IF 60% OF COST OF CIVIL WORK IS APPORTI ONED TO CIVIL WORK INVOLVED IN THE ERECTION OF FOUNDATION OF WIND MILL/OTHER POWER EQUIPMENT AND 40% BE APPORTIONED TOWARDS OTHER CIVIL WORKS WHICH SHALL BE ELIGIBLE FOR THE LOWER RATE OF DEPRECIATION. THE COST OF CIVIL WORK APPORTIONED TOWARDS THE ERECTI ON OF FOUNDATION FOR WINDMILL SHALL BE ELIGIBLE FOR DEPREC IATION @ 80% AND THE BALANCE OF THE COST SHALL BE ELIGIBLE FOR DEP RECIATION @ 10%, AS ALLOWED BY THE ASSESSING OFFICER. THE ORDER OF THE CIT(A) IS THEREFORE SET-ASIDE AND THE ASSESSING OFFICER IS DIRECTE D TO RE- COMPUTE THE ALLOWANCE OF DEPRECIATION ACCORDINGLY. 15.1 SINCE BOTH THE SIDES AT THE TIME OF HEARING HAD EXPRESSED THEIR WILLINGNESS TO FOLLOW THE OUTCOME OF THE ABOVE DECISIO N, THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF THE CO-ORDINAT E BENCH OF THE TRIBUNAL CITED (SUPRA) WE RESTORE THE ISSUE TO THE FIL E OF THE ASSESSING OFFICER WITH A DIRECTION TO RE-COMPUTE THE DEPRECIA TION IN THE LIGHT OF THE ABOVE DECISION OF THE TRIBUNAL. THE GROUNDS RAISED B Y THE ASSESSEE AS WELL AS THE REVENUE ARE ACCORDINGLY ALLOWED FOR STATI STICAL PURPOSES. 8.1 RESPECTFULLY FOLLOWING THE ABOVE DECISION CITED (SUPRA) WE RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO RECOMPUTE THE DEPRECIATION IN THE LIGHT OF THE DIRE CTION OF THE TRIBUNAL. THE GROUND RAISED BY THE REVENUE IS ACCORDINGLY ALL OWED FOR STATISTICAL PURPOSES. 15 ITA NO.623/PN/2011 (A.Y. 2005-06) : 9. THE ONLY EFFECTIVE GROUND RAISED BY THE REVENUE IS AS UNDER : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE CIT(A) ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF A DDITIONAL DEPRECIATION ON WINDMILL OF RS.2,46,000/-. 9.1 AFTER HEARING BOTH THE SIDES, WE FIND THE ABOVE ISSUE IS IDENTICAL TO THE GROUND OF APPEAL BY THE REVENUE IN ITA NO.622/P N/2013. WE HAVE ALREADY DECIDED THE ISSUE AND THE GROUND RAISED BY THE REVENUE HAS BEEN RESTORED TO THE FILE OF THE ASSESSING OFFICER TO RE COMPUTE THE DEPRECIATION IN THE LIGHT OF THE DIRECTION OF THE T RIBUNAL. FOLLOWING THE SAME RATIO, THE GROUND RAISED BY THE REVENUE IS ALL OWED FOR STATISTICAL PURPOSES. ITA NO.624/PN/2011 (A.Y. 2006-07) : 10. GROUND OF APPEAL NO.1 BY THE REVENUE READS AS U NDER : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE CIT(A) ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF A DDITIONAL DEPRECIATION ON WINDMILL OF RS.6,720/-. 10.1 AFTER HEARING BOTH THE SIDES, WE FIND THE ABOV E ISSUE IS IDENTICAL TO THE GROUND OF APPEAL BY THE REVENUE IN ITA NO.622/P N/2013. WE HAVE ALREADY DECIDED THE ISSUE AND THE GROUND RAISED BY THE REVENUE HAS BEEN RESTORED TO THE FILE OF THE ASSESSING OFFICER TO RE COMPUTE THE DEPRECIATION IN THE LIGHT OF THE DIRECTION OF THE T RIBUNAL. FOLLOWING THE SAME RATIO, THE GROUND RAISED BY THE REVENUE IS ALL OWED FOR STATISTICAL PURPOSES. 16 11. GROUND OF APPEAL NO.2 BY THE REVENUE READS AS UNDER : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE CIT(A) ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF U NEXPLAINED INVESTMENT IN CARS OF RS.23,75,000/-. 11.1 AFTER HEARING BOTH THE SIDES, WE FIND THE ABOV E ISSUE IS IDENTICAL TO THE GROUND OF APPEAL BY THE REVENUE IN ITA NO.621/P N/2013. WE HAVE ALREADY DECIDED THE ISSUE AND THE GROUNDS RAISED BY THE REVENUE HAVE BEEN DISMISSED. FOLLOWING THE SAME RATIO, THE GROU ND RAISED BY THE REVENUE IS DISMISSED. ITA NO.625/PN/2013 (A.Y.2007-08) : 12. GROUND OF APPEAL NO.1 BY THE REVENUE READS AS U NDER : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE CIT(A) ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF A DDITIONAL DEPRECIATION ON WINDMILL OF (-) RS.36,960/-. 12.1 AFTER HEARING BOTH THE SIDES, WE FIND THE ABOV E ISSUE IS IDENTICAL TO THE GROUND OF APPEAL BY THE REVENUE IN ITA NO.622/P N/2013. WE HAVE ALREADY DECIDED THE ISSUE AND THE GROUND RAISED BY THE REVENUE HAS BEEN RESTORED TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO RECOMPUTE THE DEPRECIATION AS PER THE DIRECTION OF THE TRIBUN AL. FOLLOWING THE SAME RATIO, THE GROUND RAISED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. 13. GROUND OF APPEAL NO.2 BY THE REVENUE READS AS U NDER : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE CIT(A) ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF U NEXPLAINED INVESTMENT IN CARS OF RS.1,42,221/-. 13.1 AFTER HEARING BOTH THE SIDES, WE FIND THE ABOV E ISSUE IS IDENTICAL TO THE GROUND OF APPEAL BY THE REVENUE IN ITA NO.621/P N/2013. WE HAVE 17 ALREADY DECIDED THE ISSUE AND THE GROUND RAISED BY THE REVENUE HAS BEEN DISMISSED. FOLLOWING THE SAME RATIO, THE GROUND RA ISED BY THE REVENUE IS DISMISSED. ITA NO.627/PN/2013 (A.Y. 2009-10) : 14. GROUND OF APPEAL NO.1 BY THE REVENUE READS AS U NDER : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE CIT(A) ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF A DDITIONAL DEPRECIATION ON WINDMILL OF (-) RS.39,399/-. 14.1 AFTER HEARING BOTH THE SIDES, WE FIND THE ABOV E ISSUE IS IDENTICAL TO THE GROUND OF APPEAL BY THE REVENUE IN ITA NO.622/P N/2013. WE HAVE ALREADY DECIDED THE ISSUE AND THE GROUND RAISED BY THE REVENUE HAS BEEN RESTORED TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO RECOMPUTE THE DEPRECIATION IN THE LIGHT OF THE DIRECTION OF T HE TRIBUNAL. FOLLOWING THE SAME RATIO, THE GROUND RAISED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. 15. GROUND OF APPEAL NO.2 BY THE REVENUE READS AS U NDER : 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF U NEXPLAINED INVESTMENT IN LAND OF RS.2,91,830/-. 15.1 FACTS OF THE CASE, IN BRIEF, ARE THAT DURING F INANCIAL YEAR RELEVANT TO ASSESSMENT YEARS 2009-10, THE ASSESSEE HAD PURCHASE D LAND COSTING ` 2,91,830/-. THE ASSESSING OFFICER OBSERVED THAT IN POST SEARCH ENQUIRIES MADE, THE PERSONS WHO SOLD LAND TO THE OTHER CONCER NS / INDIVIDUALS OF THE GHODAWAT GROUP, ADMITTED HAVING RECEIVED SALE C ONSIDERATION OVER AND ABOVE THE DOCUMENTATION PRICE. KEEPING THIS IN VIEW, IN THE INSTANT CASE, HE ASKED THE ASSESSEE TO PRODUCE THE SELLER O F THE LAND FOR HIS 18 EXAMINATION. THE ASSESSING OFFICER ALSO MADE AVAILA BLE COPIES OF STATEMENTS RECORDED OF VARIOUS PERSONS IN THIS CONN ECTION TO THE ASSESSEE. HOWEVER, SINCE THE ASSESSEE WAS UNABLE TO PRODUCE T HE CONCERNED SELLERS OF THE LAND, THE ASSESSING OFFICER HELD THAT THE AS SESSEE HAD PAID AN EQUAL AMOUNT OVER AND ABOVE THE PURCHASE CONSIDERATION SH OWN IN BOOKS. HE THEREFORE, MADE AN ADDITION OF THE ABOVE AMOUNTS TO THE ASSESSEE'S TOTAL INCOME. 16. BEFORE THE CIT(A) IT WAS SUBMITTED THAT THE ASS ESSING OFFICER HAS NOT BROUGHT ANY EVIDENCE ON RECORD FOR MAKING THE A DDITION. NO INCRIMINATING DOCUMENTS IN THIS REGARD WERE FOUND D URING THE SEARCH. THE ASSESSING OFFICER BASED, ON TRANSACTIONS MADE I N CASE OF OTHER FORMER INDIVIDUALS OF THE GROUP WHICH HAD NO BEARIN G TO THE CASE OF THE ASSESSEE, HAS MADE THE ADDITION. FURTHER, THE LAND OWNER IN QUESTION WAS NOT SUMMONED DURING ASSESSMENT PROCEEDINGS NOR THE STATEMENT RECORDED OF THE LAND OWNER WAS BROUGHT TO THE NOTIC E OF THE ASSESSEE. IT WAS ARGUED THAT THE ASSESSEE HAS NOT PAID ANYTHING MORE THAN THE PRICE MENTIONED IN THE SALE DEED FOR PURCHASE OF THE LAND AND THEREFORE, THE ADDITION MADE BY THE ASSESSING OFFICER ON PRESUMPTI ONS AND SURMISES CANNOT BE SUSTAINED. THE DECISION OF THE HONBLE S UPREME COURT IN THE CASE OF DHAKESHWARI COTTON MILLS VS. CIT REPORTED I N 26 ITR 775 WAS ALSO RELIED UPON. 17. BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE THE LD.CIT(A) DELETED THE ADDITION BY OBSERVING AS UNDER : 40. I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT WITH REFERENCE TO THE FACTS ON RECORD. IT IS OBSERVED THAT IN THE CASE OF THE APPELLANT, THE LANDLORD FROM WHOM THE LAND WAS PURCHASED IN THE PRE VIOUS YEAR RELEVANT TO ASSESSMENT YEAR 2009-10 WERE NOT PRODUCED B Y THE ASSESSEE BEFORE THE ASSESSING OFFICER DESPITE HIS REQUEST FOR PRODU CING THE 19 WITNESS. SIMULTANEOUSLY IT IS ALSO TRUE THAT THE ASSESSING O FFICER, WHO COULD HAVE USED THE POWERS UNDER SECTION 131 TO ENFORC E THE ATTENDANCE OF WITNESS, CHOSE NOT TO DO SO. IT IS A FACT THAT SIXTE EN LAND OWNERS IN THE TRUST CASES, ONE LAND OWNER IN THE CASE OF SHRI SANJAY GHODAWAT, INDIVIDUAL AND GHODAWAT INDUSTRIES INDIA PVT. LTD. AN D THREE LAND OWNERS IN THE CASE OF GHODAWAT FOODS INDUSTRY PVT. LTD. HAD STATED THAT THEY HAD RECEIVED MONIES OVER AND ABOVE THE PRICE DOCUMENTED. THE ASSESSING OFFICER CONCLUDED THAT THE APPELLANT HAD PAID AN EQ UAL AMOUNT OF UNACCOUNTED CASH, OVER AND ABOVE THE PRICE SHOWN AS LA ND PURCHASED IN THE BOOKS OF ACCOUNT AND THEREFORE MADE THE IMPUGNED ADDITION. 41. IN MY OPINION, THOUGH IT IS WELL-KNOWN THAT REAL ESTATE TRANSACTIONS MORE OFTEN THAN NOT INVOLVE PAYMENTS IN CASH WHEREBY THE UNTAXED MONEY EARNED BY THE BUYER IS SIEVED OFF IN THE FORM O F 'ON MONEY' AND PAID TO THE SELLERS. THIS IS A BANE OF INDIAN ECONOMY A ND IS A TRUTH WHICH EVERYONE ACCEPTS AS CORRECT. YET THIS IS NOT THE GOSPEL TRUTH I.E. IT IS NOT POSSIBLE TO STATE WITH UTMOST CERTAINTY THAT EACH AND E VERY REAL ESTATE DEAL INVOLVES A CASH COMPONENT WHICH IS NOT A PART OF THE DOCUMENTATION PRICE. THEREFORE, FOR THE PURPOSE OF INCOME-TAX, ONE CANNOT MAKE AN ADDITION MERELY ON AN ASSUMPTION THAT BECAUSE OTHER IN DIVIDUALS OR PERSON HAVE MADE PAYMENT OF ON MONEY IN REAL ESTATE P URCHASES, ANOTHER PERSON BELONGING TO THE SAME GROUP WOULD HAVE ALSO MADE A SIMILAR PAYMENT OF ON MONEY TO ACQUIRE REAL ESTATE IN HIS OR HER OWN NAME. THERE IS NO PRESUMPTION IN LAW THAT THERE HAS T O BE AN UNACCOUNTED TRANSACTION WHEN THERE IS A DEALING IN RE AL ESTATE. IT HAS TO BE NOTED THAT SEARCH AND SEIZURE WAS CONDUCTED ON THE PREMISES OF THE APPELLANT AND NO DOCUMENT OR EVIDENCE WHATSOEVER WAS FOUND WHICH WOULD INDICATE UNACCOUNTED TRANSACTIONS IN LAND DEALI NG BETWEEN THE MEMBERS OF THE GHODAWAT GROUP AND THE SELLERS. IT IS ON LY THE STATEMENT MADE BY SOME OF THE LANDLORDS WHO HAD SOLD LANDS TO THE GHODAWAT GROUP WHICH IMPLICATED SOME MEMBERS OF THE GHODAWAT G ROUP OF INDULGING IN TRANSACTIONS OF ON MONEY PAYMENTS. IN THE ABSENCE OF ANY DOCUMENTARY EVIDENCE, THE ORAL EVIDENCE OF LANDLORD S IN OTHER CASES CANNOT BE USED TO JUSTIFY AN ADDITION OF ON MONEY PAY MENT IN THE HANDS OF THE APPELLANT. CONSEQUENTLY, THE APPELLANT GETS A RELIEF FOR THE YEAR UNDER CONSIDERATION. 17.1 AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE RE VENUE IS IN APPEAL BEFORE US. 18. AFTER HEARING BOTH THE SIDES, WE FIND AN IDENTI CAL ISSUE HAD COME UP BEFORE THE TRIBUNAL IN THE CASE OF DCIT VS. GHOD AWAT FOODS INTERNATIONAL PVT. LTD. VIDE ITA NOS.2147 TO 2150/P N/2012 ORDER DATED 31-12-2013 FOR A.Y. 2005-06, 2007-08, 2008-09 & 200 9-10. WE FIND THE TRIBUNAL AT PARA 3 OF THE ORDER HAS OBSERVED AS UNDER : 3. THE ASSESSING OFFICER HAS MADE ADDITION OF RS.39,68,0 39/- ON ACCOUNT OF UNACCOUNTED INVESTMENT IN LAND. DURING T HE A.Y. 2005-06, 2007-08, 2008-09 AND 2009-10, THE ASSESSEE HAD PURCHASE D LAND COSTING RS.39,68,039/-, RS.11,20,245/-, RS.92,040/- AND RS.11,7 6/227/- 20 RESPECTIVELY. THE ASSESSING OFFICER OBSERVED THAT IN POST SEARCH ENQUIRIES MADE, THE PERSONS WHO SOLD LAND TO THE OTHER CONCERNS / INDIVIDUALS OF THE GHODAWAT GROUP, HAVING RECEIVED SA LE CONSIDERATION OVER AND ABOVE THE DOCUMENTATION PRICE. KEEPING THI S IN VIEW, IN THE INSTANT CASE, HE REQUIRED THE ASSESSEE TO PRODUCE THE SELL ER OF THE LAND FOR EXAMINATION. HOWEVER, SINCE THE ASSESSEE WAS UNABLE TO PR ODUCE THE CONCERNED SELLER OF THE LAND, THE ASSESSING OFFICER HELD THAT THE ASSESSEE HAD PAID AN EQUAL AMOUNT OVER AND ABOVE THE PURCHASE CONSIDERATION SHOWN IN BOOKS AND MADE AN ADDITION OF RS.39,68,039/-, RS.11,20,245/-, RS.92,040/- AND RS.11,76,227/- TO THE ASSESSEE'S TOTAL INC OME FOR 3 ASSESSMENT YEARS 2005-06, 2007-08, 2008-09 AND 2009-10 R ESPECTIVELY. THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUT HORITY, WHEREIN, THE ASSESSEE STATED THAT ASSESSING OFFICER HAS NOT BROUGHT ANY E VIDENCE ON RECORD TO ENABLE HIM TO MAKE THESE ADDITIONS. IT WAS ALSO CONTENDED ON BEHALF OF ASSESSEE, THERE WAS NO INCRIMINATING DOCUMENT DURING THE COURSE OF SEARCH IN THIS REGARD. THE ASSESSING OFFICER HAS REFERRED TO TRANSACTIONS MADE IN CASES OF OTHER FIRM / INDIVIDUALS O F THE GROUP, WHICH HAS NO BEARING TO THE ASSESSEE'S CASE. THE ASSESSEE CONTEND ED THAT IT HAD NOT PAID ANYTHING MORE THAN THE SALE DEED PRICE FOR PURCHASE OF THE LAND AND HENCE, THE ADDITION WAS NOT JUSTIFIED. THE LAND OWNERS FROM WHOM LAND WAS PURCHASED IN THE PREVIOUS YEARS RELEVANT TO ASSE SSMENT YEARS 2005-06, 2007-08, 2008-09 AND 2009-10 WERE NOT PROD UCED AS WITNESS FOR CROSS EXAMINATION. THE ASSESSING OFFICER COULD HAVE USED THE POWERS UNDER SECTION 131 TO ENFORCE THE ATTENDANCE OF WITNE SS, BUT HE DID NOT CHOSE TO DO SO. SIXTEEN LAND OWNERS IN THE TRUST CASE S, ONE LAND OWNER IN THE CASE OF SHRI SANJAY GHODAWAT, INDIVIDUAL AND GHODAWAT INDUSTRIES INDIA PVT. LTD. AND THREE LAND OWNERS IN THE CASE OF GHODAWAT FOODS INDUSTRY PVT. LTD. HAS STATED THAT THEY HAD RECEIV ED MONIES OVER AND ABOVE THE DOCUMENTED PRICE. THE ASSESSING OFFICER CONC LUDED THAT THE ASSESSEE HAS ALSO PAID AN EQUAL AMOUNT OF UNACCOUNTED CASH , OVER AND ABOVE THE PRICE SHOWN AS LAND PURCHASED IN THE BOOKS OF ACCOUNT, THEREFORE MADE THE ADDITION IN EVERY CASE OF LAND P URCHASE. THOUGH IN THE REAL ESTATE TRANSACTIONS THERE IS A ROLE OF ON MON EY. BUT IT COULD NOT BE SAID THAT EACH OF EVERY REAL ESTATE TRANSACTION INV OLVED CASH COMPONENT WHICH IS NOT PART OF DOCUMENTATION PRICE F OR THE PURPOSE OF INCOME TAX. ONE CANNOT MAKE ADDITION MERELY ON ASSUM PTION THAT BECAUSE OTHER INDIVIDUALS OR PERSONS HAVE MADE PAYMENT OF EARNED MONEY IN REAL ESTATE PURCHASES, ANOTHER PERSON BELONGI NG TO THE SAME GROUP WOULD HAVE ALSO MADE A SIMILAR PAYMENT OF ON MO NEY TO ACQUIRE REAL ESTATE IN HIS OR HER OWN NAME. THERE IS NO PRESUM PTION IN LAW THAT THERE HAS TO BE AN UNACCOUNTED TRANSACTION WHEN THERE IS A DEALING IN REAL ESTATE. IT IS PERTINENT TO MENTION THAT SEARCH AN D SEIZURE WAS CONDUCTED ON THE PREMISES OF THE ASSESSEE AND NO DOCUMENT OR EVIDENCE WHATSOEVER WAS FOUND WHICH COULD INDICATE UNACCOUNTED TRANSACTIONS IN LAND DEALING BETWEEN THE MEMBERS OF THE GHODAWAT GRO UP AND THE SELLERS. IT IS ONLY THE STATEMENT MADE BY SOME OF THE LA NDLORDS WHO HAD SOLD LANDS TO CERTAIN GHODAWAL GROUP WHICH IMPLICATED SOME MEMBERS OF THE GHODAWAT GROUP OF INDULGING IN TRANSACTIONS OF ON MONEY PAYMENTS. IN THE ABSENCE OF ANY DOCUMENTARY EVIDENCE, THE ORA L EVIDENCE OF LANDLORDS IN OTHER CASES COULD NOT BE USED TO JUSTIFY TH E ADDITION OF ON MONEY PAYMENT IN THE HANDS OF THE ASSESSEE. THEREFORE, THE ASSESSEE WAS GIVEN RELIEF FOR ALL THE YEARS AND IN THE YEARS BEFO RE US. HOWEVER, THE RELIEF HAS NOT BEEN GRANTED IN RESPECT OF THE LAND SOL D BY THE THREE LANDOWNERS WHO HAVE MENTIONED THAT THEY HAVE RECEIVE D EXTRA MONIES THAN WHAT WAS RECORDED AND DOCUMENTED IN SALE DEED. T HIS IS FOR THE REASON THAT THOUGH THEIR STATEMENT WAS GIVEN TO THE ASSE SSEE, THE ASSESSEE DID NOT DENY THESE TRANSACTIONS. HENCE, ADDITION MADE TO THAT EXTENT WAS CONFIRMED WHICH IS NOT SUBJECT MATTER BEFOR E. IN VIEW OF ABOVE, WE ARE NOT INCLINED TO INTERFERE IN FINDINGS OF CIT(A) BECAUSE ADDITION BASED ON PRESUMPTION CANNOT BE SUSTAINED. WE UPHOLD THE 21 SAME. THIS TAKE CARES OF SIMILAR ISSUE AROSE IN THE A.YS. 2007-08 AND 2008-09. FACTS BEING SIMILAR, SO FOLLOWING THE SAME RE ASONING, ORDER OF CIT(A) NEEDS NO INTERFERENCE FROM OUR SIDE. WE UPHOL D THE SAME. 18.1 SINCE THE FACTS OF THE INSTANT CASE ARE IDENTI CAL TO THE FACTS OF THE CASE DECIDED BY THE TRIBUNAL, THEREFORE, RESPECTFUL LY FOLLOWING THE DECISION OF THE TRIBUNAL CITED (SUPRA), WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A) DELETING THE ADDITION. WE ACCORDINGL Y UPHOLD THE SAME AND THE GROUND RAISED BY THE REVENUE IS DISMISSED. 19. IN THE RESULT, ITA NO.621/PN/2013 BY THE REVENU E IS DISMISSED, ITA NOS.622/PN/2013 AND 623/PN/2013 ARE ALLOWED FOR STATISTICAL PURPOSES AND THE OTHER APPEALS ARE PARTLY ALLOWED F OR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 16-07-2014. SD/- SD/- (R.S. PADVEKAR) (R.K. PAND A) JUDICIAL MEMBER ACCOUN TANT MEMBER PUNE DATED: 16 TH JULY, 2014 SATISH COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. THE CIT(A), KOLHAPUR 4. THE CIT, KOLHAPUR 5. THE D.R, B PUNE BENCH 6. GUARD FILE BY ORDER // TRUE COPY // SENIOR PRIVATE SECRETARY ITAT, PUNE BENCHES, PUNE