Shri Sunderdas U Panjabi, Pune V. ACIT, Cent. Cir.1(2), Pune

ITA 664/PUN/2011

• Counselvise Citation: 66424514 RSA 2011
• Duration Of Justice: 2 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 30-10-2012
• Assessment Year: 2000-2001
• Appeal Filed On: 18-05-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MUKESH VERMA
• Assessee Lawyers: NILESH KHANDELWAL
• Keywords: Unexplained investment; Income from undisclosed sources; Search and seizure; Loose papers; Document seized; Principle of natural justice; Additional evidence; Documents seized
• Section: 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE BEFORE: SHRI G. S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NOS.658 & 661 / P N/ 20 11 ASSESSMENT YEAR S : 2000 - 01 & 2006 - 07 MOTI UDHARAM PANJ ABI, C/O. SHAH KHANDELWAL JAIN & ASSOCIATES C.A., LEVEL - 3, BUSINESS BAY, PLOT NO. 84, WELLESLEY ROAD, NEAR RTO, PUNE VS. ACIT, CENTRAL 2(1), PUNE (APPELLANT) (RESPONDENT) PAN NO. AARPP2118D ITA NO.664 /PN/20 11 ASSESSMENT YEAR : 2000 - 01 SUNDERDAS U PANJABI, C/O. SHAH KHANDELWAL JAIN & ASSOCIATES C.A., LEVEL - 3, BUSINESS BAY, PLOT NO. 84, WELLESLEY ROAD, NEAR RTO, PUNE VS. ACIT, CENTRAL 2(1), PUNE (APPELLANT) (RESPONDENT) PAN NO. AAZPP3797N ITA NOS.6 6 8 & 671 /PN/20 11 ASSESSMENT YEAR S : 2000 - 0 1 & 2006 - 07 RAMCHAND U PANJABI, C/O. SHAH KHANDELWAL JAIN & ASSOCIATES C.A., LEVEL - 3, BUSINESS BAY, PLOT NO. 84, WELLESLEY ROAD, NEAR RTO, PUNE VS. ACIT, CENTRAL 2(1), PUNE (APPELLANT) (RESPONDENT) PAN NO. AARPP211 6 P APPELLANT BY: SHRI NILESH KH ANDELWAL RESPONDENT BY: SHRI MUKESH VERMA ORDER P ER R.S. PADVEKAR , JM : - THIS BATCH OF FIVE APPEALS OF THREE DIFFERENT ASSESSEES ARE ARISING OUT OF THE COMMON SEARCH AND SEIZURE OPERATION , HENCE FOR THE 2 ITA NOS.658, 661, 688, 671 & 664/PN/2011, MOTI UDHARAM PANJABI, RAMCHAND U. PANJABI & SUNDERDAS U. PANJABI, PUNE SAKE OF CONVENIENCE TH IS BATCH OF APPEA LS ARE DISPOSED OF BY THIS CONSOLIDATED ORDER. ALL THE ASSESSEES HAVE CHALLENGED THE RESPECTIVE IMPUGNED ORDERS OF THE LD. CIT(C), PUNE DATED 20 - 02 - 2011. ITA NO. 658/PN/2011, A.Y. 2000 - 01. 2. IN THIS APPEAL THE ASSESSEE HAS TAKEN THE FOLLOWING GROUND: ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CASE AND AS PER PROVISIONS OF LAW, IT BE HELD THAT, ADDITION OF RS.1,00,000/ - ON ACCOUNT OF ALLEGED UNDISCLOSED INCOME REPRESENTING THE INVESTMENT IN THE BENAMI FD OF BHUDARGAD PATHA SANSTHA IS UNWARRANTED UNJUS TIFIED AND CONTRARY TO THE FACTS PREVAILING IN THE CASE AND PROVISIONS OF LAW. THE ADDITION MADE BY THE ASSESSING OFFICER AND THAT CONFIRMED BY THE 1 ST APPELLATE AUTHORITY IN THIS RESPECT BE DELETED. THE APPELLANT BE GRANTED JUST AND PROPER RELIEF IN THI S RESPECT. 3. THE FACTS IN BRIEF ARE AS UNDER. THERE WAS A SEARCH AND SEIZURE OPERATION IN THE PANJABI GROUP ON 17 - 03 - 2006 . I N RESPONSE TO NOTICE ISSUED U/S. 153A , T HE ASSESSEE FILED THE LETTER STATING THAT THE REGULAR RETURN FILED BY THE ASSESSEE MAY B E TREATED AS RETURN FILE D IN COMPLIANCE TO NOTICE U/S. 153A. SO FAR AS THE ISSUE OF ADDITION OF RS. 1,00,000/ - IS CONCERNED , T HE ASSESSING OFFICER HAS OBSERVED THAT IN THE SEIZED DOCUMENTS AT PAGE NOS. 14 & 15 OF BUNDLE NO. 18 , ONE FIXED DEPOSIT ( FD ) WAS F OUND IN THE NAME OF THE THIRD PARTY. THE AMOUNT OF FD WAS RS.1,00,000/ - WHICH HAS MATURED ON 22 - 12 - 2004 , MUCH EARLIER PRIOR TO THE DATE OF SEARCH BUT IT WAS STILL WITH THE ASSESSEE. THE ASSESSING OFFICER SOUGHT EXPLANATION OF THE ASSESSEE AS TO HOW THE SAID FD REMAINED WITH HIM TILL THE DATE OF THE SEARCH I F THE SAID FD WAS OF SOMEONE ELSE. THE ASSESSEE STATED THAT THE FD WAS OF ONE LAND OWNER WH O EXPIRED . HE KEPT THE SAID FD FOR TRANSFERRING IN THE NAME OF HIS WIFE AND ASSESSEE IS ONLY TRYING TO HELP THE WIDOW. THE ASSESSEE DENIED THAT FD BELONG TO HIM. THE ASSESSEE F ILED HIS EXPLANATION WHICH IS REPRODUCED ON PAGE NO. 6 OF THE ASSESSMENT ORDER . ADMITTEDLY , THE ASSESSING OFFICER DID NOT EXAMINE THE LADY ON WHOSE NAME THE FD WAS KEPT AND MADE THE ADD ITION TO 3 ITA NOS.658, 661, 688, 671 & 664/PN/2011, MOTI UDHARAM PANJABI, RAMCHAND U. PANJABI & SUNDERDAS U. PANJABI, PUNE THE INCOME OF THE ASSESSEE. THE ASSESSEE CARRIED THE ISSUE BEFORE THE LD. CIT(A) AND THE LD. CIT(A) CALLED FOR THE REMAND REPORT FROM THE ASSESSING OFFICER AND AFTER CONDUCTING THE ENQUIRIES VERIFIED THE CLAIM OF THE ASSESSEE . 4. THE ASSESSING O FFICER FILED THE REMAND REPORT VIDE LETTER DATED 17 - 03 - 2010. IN THE REMAND REPORT THE ASSESSING OFFICER STATED THAT NO ADDITIONAL EVIDENCE WAS PRODUCED IN THE REMAND PROCEEDINGS. THE LD. CIT(A) CONFIRMED THE ADDITION O N THE PREMISES THAT THE SAID FD WAS FOUND IN POSSESSION OF THE ASSESSEE DURING THE C O URSE OF SEARCH AND SEIZURE OPERATION. THE LD. CIT(A) ALSO DID NOT ACCEPT THE STATEMENT GIVEN BY THE ASSESSEE. 5. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD. A DMITTEDLY , AS PER THE FACTS NOTED BY B OTH THE PARTIES , THE FD WAS IN THE NAME OF THE THIRD PARTY. IT IS NOT THE CASE THAT THE THIRD PARTY WAS IN RELATION OF THE ASSESSEE. THE ASSESSING OFFICER DID NOT EXAMINE THE LADY/PERSON ON WHOSE NAME THE FD WAS FOUND. THE LAW IS WELL SETTLED THAT IF AN Y INVESTMENT IS FOUND WHICH IS OTHERWISE ON THE NAME OF THIRD PARTY AND THE ASSESSEE GA VE HIS EXPLANATION AS TO HOW IT IS IN HIS POSSESSION , THEN THE ONUS IS SHIFTED ON THE ASSESSING OFFICER TO PROVE OTHERWISE . W E FIND NO JUSTIFICATION TO SUSTAIN THE ADD ITION OF RS.1,00,000/ - . ACCORDINGLY, THE SAME IS DELETED. ITA NO. 661/PN/2011, A.Y. 2006 - 07 6. IN THIS APPEAL, THE GROUND NO. 1 READ AS UNDER: ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CASE AND AS PER PROVISIONS OF LAW, IT BE HELD THAT, ADDITION OF RS.1 1 ,00,000/ - ON ACCOUNT OF UNEXPLAINED INVESTMENT IN CASH AS PER MOU PERTAINING TO THE PROPERTY SITUATED A T SURVEY NO. 39/40 AT PIMPLE SAUDAGAR IS UNWARRANTED, UNJUSTIFIED AND CONTRARY TO THAT FACTS PREVAILING IN THE CASE AND PROVISIONS OF LAW. IT FURTH ER BE HELD THAT ADDITION MADE BY THE ASSESSING OFFICER IN VIOLATION OF RULES OF NATURAL JUSTICE IS NOT TENABLE IN LAW. THE ADDITION MADE BY THE ASSESSING OFFICER THAT CONFIRMED BY THE 1 ST APPELLATE AUTHORITY IN THIS RESPECT BE DELETED. THE APPELLANT BE G RANTED JUST AND PROPER RELIEF IN THIS RESPECT. 4 ITA NOS.658, 661, 688, 671 & 664/PN/2011, MOTI UDHARAM PANJABI, RAMCHAND U. PANJABI & SUNDERDAS U. PANJABI, PUNE 7. THE FACTS AS NOTED BY THE AUTHORITIES BELOW ARE AS UNDER. THE ASSESSING OFFICER HAS NOTI CED FROM THE SEIZED DOCUMENTS (BUNDLE N O. 19) THAT THERE WAS AGREEMENT (MOU) FOR SALE OF PROPERTY AT SURVEY NOS. 39 & 40 AT PIMPLE SAUDAGAR . T HE AREA OF THE LAND IS STATED TO BE 13 ACRES AND 20 GUNTHAS . T HE SALE PRICE IS STATED TO BE RS.675 / - PER SQ. FT. THE PURCHASER S ARE SHOWN AS SHRI MOTI PANJABI (ASSESSEE) AND SHRI HEMANDRA SHAH. THE ASSESSEE HAS PAID RS. 11 LAC S IN CASH O N 10 - 02 - 2006. THE ASSESSEE STATED THAT THE TRANSACTION WAS NOT MATERIALIZED AND HENCE , IT IS NOT REFLECTED IN THE BOOKS OF ACCOUNT. IT IS FURTHER STATED THAT THE ASSESSEE HAS ENOUGH CASH IN HAND FROM WHERE SUCH PAYMENT WAS MADE AND IMMEDIATELY RECEIVED BACK. 7.1 THE ASSESSING OFFICER REJECTED THE EXPLANATION OF THE ASSESSEE BY OBSERVING THAT IT WAS NECESSARY FOR THE ASSESSEE TO EXPLAIN THE SOURCE OF PAYMENT . I N THE APPELLATE PROCEEDINGS , T HE ASSESSEE FILED THE CASH FLOW STATEMENT WHICH WAS PREPARED AFTER THE SEARCH PROCEEDINGS IN WHICH THE OPENING CASH BALANCE WAS SHOWN AT RS. 15,67,990/ - AND EXPENDITURE WAS SHOWN AT RS.2,25,064/ - AND CLOSING BALANCE WAS DISCLOSED AT RS.13,42,926/ - . O N THE BASIS OF THE SAID CASH FLOW STATEMENT , IT WAS CLAIME D BY THE ASSESSEE THAT HE HAD ENOUGH CASH IN HAND FROM WHERE SAID PAYMENT WAS MADE AND IMMEDIATELY RECEIVED BACK. APART FROM THE CASH FLOW STATEMENT , THE ASSESSEE DID NOT FILE ANY EVIDENCE TO SHOW THAT THE ASSESSEE HAS RECEIVED BACK THE SAID CASH A S THE T R ANSACTION COULD NOT BE MATERIALIZED NOR ANY THING WAS FOUND ANY ENTRIES IN ANY DOCUMENT DURING THE COURSE OF SEARCH TO SUPPORT THE CONTENTION OF THE ASSESSEE. 8. WE HAVE HEARD THE PARTIES AND PERUSED THE REASONS GIVEN BY THE LD. CIT(A) FOR CONFIRMING TH E ADDITION. NOTHING HAS BEEN PLACED BEFORE US TO SHOW WHEN THE SAID TRANSACTION WAS CANCELLED AND THE ASSESSEE RECEIVED BACK THE CASH . T HE UNDISPUTED FACT IS THAT THE TRANSACTION OF RS.11 LACS WAS NOT REFLECTED IN THE REGULAR BOOKS OF 5 ITA NOS.658, 661, 688, 671 & 664/PN/2011, MOTI UDHARAM PANJABI, RAMCHAND U. PANJABI & SUNDERDAS U. PANJABI, PUNE ACCOUNT MAINTAINED BY THE ASSESSEE. IN OUR OPINION THE ASSESSEE HAS TO PROVE WHEN THE CASH W AS RECEIVED BACK . MERE ORAL EXP LANATION IS NOT SUFFICIENT WHEN PAYMENT WAS MADE THROUGH AN AGREEMENT . W E FIND NO REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A) ON THIS ISSUE . ACCORDINGLY, THE SAME IS CONFIRMED. 9. GROUND NO. 2 READS AS UNDER: ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CASE AND AS PER PROVISIONS OF LAW, IT BE HELD THAT, ADDITION OF RS. 65,00,000/ - ON ACCOUNT OF ALLEGED ON MONEY ALLEGED TO HAVE BEEN PAID TO ROHIT ASSOCIATE IS UNWARRANTED, UNJUSTIFIED AND CONTRARY TO THE FACTS PREVAILING IN THE CASE AND PROVISIONS OF LAW. THE ADDITION MADE BY THE ASSESSING OFFICER AT RS.66,00,000/ - AND SUSTAINED BY THE 1 ST APPELLATE AUTHORITY TO THE TUNE OF RS.65,00,000/ - IN THIS RESPECT BE DELETED. JUST AND PROPER RELIEF BE GRANTED TO THE APPELLANT IN THIS RESPECT. 9.1 THE FACTS PERTAINING TO THE ISSUE ARISING FROM GROUND NO. 2 ARE AS UNDER. THE ASSESSING OFFICER FOUND CERTAIN DOCUMENTS ON THE BASIS OF WHICH HE CAME TO THE CONCLUSION THAT THE VALUE OF 22.25R OF LAND WAS RS.96 LACS. THE ASSESSING OFFICER ALSO OBSERVED THAT FOR THE SAID LAND RS.30 LACS WAS PAID BY CHEQUE AND RS.66 LACS W ERE TO BE PAID IN CASH. AS THE COMPONENT OF CASH PAYMENT AS ALLEGED WAS OVER AND A BOVE THE AGREEMENT PRICE , THE ASSESSING OFFICER MADE THE ADDITION TO THE EXTENT OF RS.6 6 LACS. THE ASSESSING OFFICER H AS DISCUSSED THIS ISSUE IN PARA NOS. 5.1 TO 5.8 . T HE RELEVANT DISCUSSION IS REPRODUCED AS UNDER: 5.1. AS PER B . NO. 11 IMPOUNDED FROM RA MA BUILDERS &, DEVELOPERS, DIFFERENT FILES HAVE BEEN FOUND RELATING TO LAND DEVELOPMENT AS WELL AS PURCHASES. PAGE NO. 30 CONTAIN THE DETAILS OF 22.25 R I.E . SURVEY NO., AREA OF THE LAND, NAME OF OWNER, NAME OF THE PURCHASER AND DETAILS DOCUMENTS REGISTERE D. IT IS SEEN FROM THIS PAGE THAT AREA OF 21.7 5R IS PURCHASED FOR RS.30,00,000/ - AND FOR HALF R, AN AMOUNT OF RS. 1,00,000 / - IS PAID BY CASH. THUS THE COST OF 22.25 R IS DETERMINED AT RS.30,50,000 / - AND COST OF 40R IS DETERMINED AT RS.68,00,000/ - PER FOOTN OTE ON THIS PAGE, IT IS MENTIONED THAT ' SHRI RAMNBHAU KASHINATH NAKHATE HAS ALREADY ENTERED THE DOCUMENT FOR 5.25 R WHICH IS THE PART OF 21.75 R AND REMAINING.5 R HE WILL BE GIVING DIRECTLY AND PAYMENT OF RS.50,000 / - BY CASH IS TO BE SHOWN '. THIS SHOWS T HAT AN AMOUNT OF RS.50,000 / - HAS BEEN PAID TO RAMBHAU NAKHATE OVER AND ABOVE THE AGREEMENT AS ON MONEY. AS PER PAGE NO.29, AN AMOUNT OF RS.30 LACS IS PAID BY CHEQUE 6 ITA NOS.658, 661, 688, 671 & 664/PN/2011, MOTI UDHARAM PANJABI, RAMCHAND U. PANJABI & SUNDERDAS U. PANJABI, PUNE NO.454551 DATED 15 - 2 - 06 TO ROHIT ASSOCIATES AGAINST THE VALUE OF 22.25 R. HOWEVER AS PER PA GE NO.22, THE VALUE OF 22.25 R (23940 SQ. FEET.) IS DETERMINED AT RS.96 LACS AND BIFURCATION OF THIS AMOUNT IS ALSO MENTIONED AS 30 LACS CHEQUE AND 66 LACS CASH. THIS CLEARLY SHOWS THAT THE ASSESSEE HAS PAID RS.66 LACS BY CASH AS ON - MONEY OVER AND ABOVE TH E AGREEMENT PRICE TO M/S. ROHIT ASSOCIATES. 5.2. THE ASSESSEE, VIDE THIS OFFICE QUESTIONNAIRE DATED 6/9 / 2007, WAS REQUIRED TO EXPLAIN IT, AS THE SAME WAS ON - MONEY PAID FROM THE UNDISCLOSED SOURCE OF INCOME. THE ASSESSEE HAS STATED VIDE HIS REPLY DATED 10/1 0/2006 THAT THESE PAPERS WERE RELATED WITH EXECUTION OF DEVELOPMENT AGREEMENT FOR LAND AT RAHATANI, PUNE FROM ARJUN GODAMBE FAMILY AND NAKHATE FAMILY. THE AREA OF THE LAND IS 62.25 R AND AMOUNT OF AGREEMENT OF RS 98.5 LAKHS AND THAT THE DEVELOPMENT AGREEME NT HAS FINALLY BEEN REGISTERED, AND THE TRANSACTION IS REFLECTED IN THE BOOKS OF ACCOUNT. 5.3. FROM THE PERUSAL OF RECORDS, IT IS REVEALED THAT AFORESAID RS 66 LAKHS PAID IN CASH ARE NOT REFLECTED IN THE BOOKS OF ACCOUNT. THE ASSESSEE WAS REQUESTED TO SHOW CAUSE WHY THIS AMOUNT SHOULD NOT BE ADDED AS HIS INCOME FROM UNDISCLOSED SOURCES. 5.4. IN HIS REPLY DATED 19/12/2007, THE ASSESSEE HAS REPLIED THIS ISSUE. THE GIST OF THE SAME IS THAT THE PAPER RELIED UPON BY THE DEPARTMENT WAS A JOTTING OF THE DEAL UNDER NEGOTIATIONS; THAT THE SELLER EXPECTED TO RECEIVE RS 98 LACS AGAINST WHICH A CHEQUE WAS ISSUED FOR RS30 LACS; THE SELLER GAVE 3 MONTHS TIME IF THE ASSESSEE CHOSE TO PAY BALANCE IN CASH; THE ASSESSEE DECLINED THIS OFFER AND PAID ENTIRE AMOUNT BY CHEQUES WH ICH HAS BEEN DULY ACCOUNTED FOR IN THE BOOKS. 5.5. THE CLARIFICATION OF THE ASSESSEE IS NOT ACCEPTABLE FOR THE REASON THAT AT THE TIME OF SEARCH, HE DID NOT TAKE THE AFORESAID STAND. LEDGER EXTRACT OF RAHATNI LAND (S.NO.38/1 SHOWS THAT THE AMOUNT OF RS 30 LACS PAID TO ROHIT ASSOCIATES ON 15/2/2006 IS PASSED BY A JOURNAL ENTRY. THE OTHER TWO AMOUNTS OF RS 34,00,000/ - EACH NARRATED AS HAVING BEEN PAID ON 16/2/2006 TO ROHIT ASSOCIATES AND HARESH BODHANI ARE CREDITED TO THE IDBI LTD.A/C 6613. WHICH IMPLIES THAT ALTHOUGH CHEQUE NUMBERS ARE MENTIONE D THERE AGAINST , THE CHEQUES MIGHT BE SELF, OR BEARER IN THE ABSENCE OF PRODUCTION OF THE BANK STATEMENT, IT IS NOT VERIFIABLE WHETHER BY THE DATE OF SEARCH, THESE CHEQUES HAD BEEN CLEARED AND IF SO HOW THEY WERE ACCOUN TED BEFORE THE SEARCH. HAD THERE BEEN CLEAR TRANSACTIONS BY THEN, THE ASSESSES COULD VERY WELL CLAIM THAT THERE WAS NO CASH ELEMENT AS WAS BEING CONTEMPLATED BY THE DEPARTMENT. 5.6. IT IS ALSO NOTEWORTHY THAT THE OTHER SEIZED PAGE SUBMITTED BY THE ASSESSEE ALONG WITH SAID NEGOTIATION PAPER SHOWS THAT THE PAYMENTS WERE TO BE MADE / MADE TO ROHIT ASSOCIATES AND TO ONE HEEROO NOTANDAS MOTWANI, BEING POA OF NAKHATES WHILE THE LEDGER EXTRACT OF RAHATNI LAND ACCOUNT SHOWS THE PAYMENT OF RS 34 LACS HAS BEEN MADE T O HARESH BODHANI. 'THEREFORE PAYMENT, IF ANY WHICH HAD BEENTO HEEROO NOTANDAS MOTWANI HAS APPARENTLY BEEN KEPT OUTSIDE THE BOOKS. 5.7. CONSIDERING ALL THESE FACTS AND CIRCUMSTANCES, HERE IS NOTHING WRONG TO HOLD THAT THE CONTENTIONS NOW REPRESENTED ARE AN 7 ITA NOS.658, 661, 688, 671 & 664/PN/2011, MOTI UDHARAM PANJABI, RAMCHAND U. PANJABI & SUNDERDAS U. PANJABI, PUNE AFTERTHOUGHT TO CAMOUFLAGE THE REAL CASH TRANSACTIONS IN THE FORM OF COLOURED CHEQUES LATER ISSUED TO OVERCOME THE CLUTCHES OF EVILS OF TAXATION. 5.8. THE THEORY OF THE ASSESSEE IS REJECTED AND THE AMOUNT OF RS 66,00,000/ - IS BEING ADDED AS THE ASSSESSEE'S INCOME OUT OF UNDISCLOSED SOURCES. AS THIS INCOME HAS NOT BEEN DISCLOSED BY THE ASSESSEE, IT IS DEEMED TO BE THE CONCEALED INCOME AND A PENALTY PROCEEDING U/S 271(1 ) (C) IS BEING INITIATED. 9. 2 THE ASSESSEE CHALLENGED THE SAID ADDITION BEFORE THE LD. CI T(A). THE ASSESSEE STATED BEFORE THE LD. CIT(A) THAT PAGE NO. 22 (BUNDLE NO. 11) IS THE PAPER, WHICH IS A GIST OF NEGOTIATIONS THAT HAD TAKEN PLACE BEFORE THE FINAL DEAL WAS S TRUCK FOR RAHTANI LAND. IT WAS CONTENTED THAT FROM THE PAPER TH AT THE SELLER WA S EXPECTING RS. 98 LACS (RS.96 LAC PLUS RS. 2 LAC AS NOTED ON LEFT HAND SIDE OF THE PAPER). THE TOTAL AMOUNT FOR THE DEAL WAS RS.98 LACS OUT OF WHICH CHEQUES OF RS.30 LACS WAS PAID IMMEDIATELY FOR CONFIRMATION OF THE DEAL. THE ASSESSEE WAS ALLOWED A TIM E OF 3 MONTHS , IF HE DESIRE S TO GIVE THE BAL A NCE AMOUNT IN CASH. THE ASSESSEE ALSO CONTENDED THAT HE WAS NOT DESIRING TO PAY ANY CASH AND HENCE , FROM THE NOTING ON THE PAPER THE ENTIRE AMOUNT WAS PAID BY CHEQUE. IT WAS CONTENDED THAT REGISTRATION FEE WA S ALSO PAID ON 19 - 02 - 2006 , THE DATE IS MUCH PRIOR TO THE DATE OF SEARCH. THE ASSESSEE DENIED HAVING MADE ANY PAYMENT IN CASH . T HE LD. CIT(A) CALLED FOR THE REMAND REPORT OF THE ASSESSING OFFICER . IN THE REMAND REPORT THE ASSESSING OFFICER REITERATED HI S IN THE ORIGINAL ORDER FOR MAKING SAID ADDITION . IN THE REMAND PROCEEDINGS THE ASSESSING OFFICER ASKED FOR (1) COPY OF SALE DEED AND (2) COPIES OF BANK STATEMENT FROM WHERE THE PAYMENT OF RS.66 LACS WAS GIVEN TO THE SELLER . I N THE REMAND REPORT T HE ASSE SSING OFFICER OBSERVED THAT ON VERIFICATION OF THE SALE DEED THE SAME WAS EXECUTED ON 31 - 03 - 2006 I.E. PRIOR TO THE DATE OF SEARCH. THE ASSESSEE HAS MADE THE PAYMENT BY CHEQUE DRAWN ON IDBI BANK. THERE WAS DISPARITY IN THE AREA OF LAND MENTIONED BY THE AS SESSEE A S NOTED BY THE ASSESSING OFFICER , HENCE THE ASSESSING OFFICER DISBELIEVED THE ASSESSEE THAT PAYMENT CLAIMED TO HAVE BEEN 8 ITA NOS.658, 661, 688, 671 & 664/PN/2011, MOTI UDHARAM PANJABI, RAMCHAND U. PANJABI & SUNDERDAS U. PANJABI, PUNE MADE IN RESPECT OF THE SAME TRANSACTION OF THE LAND. THE ASSESSEE FILE D HIS COMMENTS/REPLY TO THE REMAND REPORT BEFORE THE LD. CIT(A) WHICH IS REPRODUCED IN THE IMPUGNED ORDER OF PAGE NOS. 17 AND 18: ON MONEY PAID TO ROHIT ASSOCIATES: THE ASSESSING OFFICER IN THE REMAND PROCEEDINGS CONCLUDED THAT AS PER HIS ANALYSIS OF LOOSE PAPERS, AMOUNT OF RS.96 LAC WAS PAYABLE FOR 22.25 R O F LAND AS PER THE NOTINGS ON PAGE NO.22 (PAGE 11 OF THE PAPER BOOK). AS PER THE ASSESSING OFFICER THE AMOUNT MENTIONED ON LOOSE PAPER NO. 30 (PAGE 12 OF THE PAPER BOOK) IS THE OFFICIAL AMOUNT OF LAND OF 62.25 R AND OVER AND ABOVE THIS AN AMOUNT OF RS.66 LA C HAS BEEN PAID AS ON MONEY FOR PURCHASE OF LAND. IT HAS FURTHER BEEN STATED BY THE ASSESSING OFFICER THAT HE IS UNABLE TO FIND OUT WHETHER THE CHEQUES ISSUED TO THE LAND OWNERS OF RS.34 LACS EACH ARE CROSSED CHEQUES OR BEARER CHEQUES AS THE BANK STATEMENT S OF THOSE PARTIES WERE NOT AVAILABLE WITH HIM FOR VERIFICATION. AT THE OUTSET WE BRING TO YOUR KIND NOTICE THAT THE DRAWING APPEARING ON PAGE NO.22 (PAGE 11 OF THE PAPER BOOK) IS OF THE COMPLETE LAND AND NOT 22.25 R AS HAS BEEN WRONGLY UNDERSTOOD BY THE A SSESSING OFFICER. THE MEASUREMENTS MENTIONED ON THE DRAWING WILL SHOW THAT THE CALCULATION OF THE PLOT IS OF 62.25 R. DURING THE REMAND PROCEEDINGS A LETTER DATED 9/9/09 WAS FILED WITH THE ASSESSING OFFICER AND THE BANK STATEMENT SHOWING PAYMENTS MADE TO R OHIT ASSOCIATES AND THE CASH FLOW STATEMENT WERE SUBMITTED. THE CHEQUE PAYMENTS UNDER CONSIDERATION HAVE BEEN ACCOUNTED FOR IN THE REGULAR BOOKS OF ACCOUNTS PRIOR TO THE DATE OF SEARCH AND AS SUCH THE REGULAR BOOKS OF ACCOUNTS HAVE BEEN ACCEPTED BY THE ASS ESSING OFFICER. THE ACCOUNTS OF THE APPELLANT ARE UNDER TAX AUDIT AND THERE IS NO ADVERSE REMARK IN RESPECT OF PAYMENTS MADE MORE THAN RS.20,000 / - OTHER THAN CROSSED CHEQUES IN RESPECT OF THE AFORESAID TRANSACTION. WE FURTHER DRAW YOUR KIND ATTENTION TO TH E FACT THAT PAGE NO. 30 (PAGE 12 OF THE PAPER BOOK) WAS FOUND DURING THE COURSE OF SEARCH ACTION. IN THE SAID PAPER TOTAL PRICE OF THE LAND HAS BEEN GIVEN WHICH IS FOR 62.25 R. THE CASH PAYMENT MADE OF RS.50,000 / - HAS BEEN SEPARATELY MENTIONED. THIS PAYMEN T ADMITTEDLY WAS NOT FORMING PART OF THE REGULAR BOOKS OF ACCOUNTS AND HAS BEEN CONSIDERED IN THE CASH FLOW STATEMENT PREPARED BY THE APPELLANT. THE ASSESSING OFFICER HAS ACCEPTED THE EXPLANATION OF PAYMENT MADE IN CASH AS PER THE FUNDS AVAILABLE IN THE CA SH FLOW STATEMENT. IT IS SUBMITTED THAT IN CASE THERE WAS ANY PAYMENT OVER AND ABOVE RS. 50 , 000 / - THEN THE SAME WOULD HAVE FOUND MENTION IN THE PAPER. THERE IS NO REASON WHY ONLY PART OF CASH CONSIDERATION WOULD BE STATED ON A PAPER WHICH MENTIONS THAT IT I S THE TOTAL PRICE OF THE LAND. THE LOOSE PAPER NO.22 (PAGE 11 OF THE PAPER BOOK) WAS FOR THE TOTAL LAND. IT WAS A DISCUSSION PAPER WHICH SHOWED THE DRAWING OF 62.25R OF LAND AND THE NEGOTIATION THAT WAS TAKING PLACE AT THAT POINT OF TIME WAS FOR THE TOTAL LAND AND THEREFORE THE CALCULATION PAPER WAS MADE WHICH IS APPEARING AT PAGE 12 OF THE PAPER BOOK. THE OWNERS OF 22.25 R AND 40R ARE THE SAME AND THEREFORE THE PRICE FOR TOTAL LAND WAS BEING NEGOTIATED. THERE IS NO RELEVANCE OF BRINGING THE NAME OFHEERO MO TWANI AT THIS STAGE AS HE IS A PARTNER IN ROHIT ASSOCIATES. THE LAND WAS OWNED IN THE FOLLOWING MANNER: 9 ITA NOS.658, 661, 688, 671 & 664/PN/2011, MOTI UDHARAM PANJABI, RAMCHAND U. PANJABI & SUNDERDAS U. PANJABI, PUNE 20 R OWNED BY HARESH BODHANI 20 R OWNED BY ROHIT ASSOCIATES 21.75 OWNED BY ROHIT ASSOCIATES AS POA HOLDERS 0.50 R OWNED BY RAMBHAU K NAKHATE (PRINCIPAL LAND OWNER) THE DOCUMENT SUBMITTED IN THE PAPER BOOK FROM PAGE NO. 4 TO 10 GIVES DETAILS OF THE PAYMENTS MADE TO VARIOUS PARTIES. THE ASSESSING OFFICER HAS WRONGLY CONCLUDED THAT THE PAYMENT MADE TO HEEROO MOTWANI, WHO IS ONE OF THE PARTNERS OF ROHIT ASSOC IATES, IS KEPT OUTSIDE BOOKS OF ACCOUNTS. IN FACT HEEROO MOTWANI HAS SIGNED THE AGREEMENT ON BEHALF OF ROHIT ASSOCIATES BEING POWER OF ATTORNEY HOLDER FOR THE FIRM TO EXECUTE THE DOCUMENT FOR WHICH THE FIRM HAS RECEIVED PAYMENT. THE ASSESSING OFFICER HAS N OT MADE ANY COMMENTS ON THE ADDITIONS MADE ON ACCOUNT OF UNDERSTATEMENT OF HOUSE HOLD EXPENSES OF RS .52,300 AND DISALLOWANCE OF RS. 14,200 / - U/S . 40A(3). WE RELY ON THE SUBMISSIONS MADE BEFORE YOUR HONOUR VIDE OUR LETTER DATED 23/4/2009 IN THAT RESPECT. , IT IS SUBMITTED THAT THE ADDITIONS MADE BY THE ASSESSING OFFICER DESERVE TO BE DELETED IN TOTO. JUST AND PROPER RELIEF BE GRANTED TO THE APPELLANT. 10. T HE LD. CIT(A) DECLINE D TO ACCEPT THE EXPLANATION OF THE ASSESSEE. THE LD. CIT(A) HAS ALSO PRODUC ED THE SEIZED PAPER IN HIS ORDER ON PAGE NO. 19 WHICH IS AS UNDER: RAHTANI LAND 10 ITA NOS.658, 661, 688, 671 & 664/PN/2011, MOTI UDHARAM PANJABI, RAMCHAND U. PANJABI & SUNDERDAS U. PANJABI, PUNE 11. THE LD. CIT(A) CONFIRMED THE ADDITION BY OBSERVING THAT THE AMOUNT OF RS. 96 LACS I.E. RS.30 LACS AND RS.66 LA CS RELATE TO THE LAND WHICH IS 23940 SQ. FT. OR 22.25 R A S THE SE AMOUNTS ARE MENTIONED JUST BELOW THE AREA MENTIONED ON THE SEIZED PAPER , BUT LD. CIT(A) SUSTAINED THE ADDITION AT RS. 65 LACS AS AGAINST RS.66 LACS 12. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD. LD. COUNSEL SUBMITS THAT THE SEIZED PAPER IS ONLY THE ROUGH NOTINGS . HE REFERS TO PAGE NO. 22 OF PAPER BOOK AND SUBMITS T H AT THERE ARE DIFFERENT LAND OWNERS IN RESPECT OF THE RAHTANI LAND. HE FURTHER SUBMITS THAT THERE IS A CONFUSION IN THE ARE A OF THE LAND AS THE ASSESSEE HAS MADE THE ENTIRE PAYMENT T HROUGH THE BANK CHEQUE ONLY DRAWN ON IDBI BANK IN RESPECT OF THE RAHTANI LAND. THE LEARNED COUNSEL SUBMITS THAT THE TOTAL DEAL WAS FOR 62.25 R. THE LEARNED COUNSEL REFERS TO THE COPY OF THE DEVELOPMENT AGREEMENT WHICH IS PLACE D AT PAGE NOS. 16 TO 20 AND SUBMITS THAT THE SAID SALE DEED WAS REGISTERED WITH THE SUB - REGISTRAR AND TOTAL PAYMENT IS 99 LACS. HE PLEADED FOR DELETING THE ADDITION. WE HAVE ALSO HEARD THE LD. DR. 13. WE FIND THAT THE ADDITION OF 65 LACS WHICH IS SUSTAINED BY THE LD. CIT(A) IS B ASED ON ONE ROUGH MAP ON WHICH CERTAIN NOTINGS ARE MADE. THE SAID PAPER IS EARLIER REPRODUCED HERE - IN - ABOVE. ON THE SAID PAPER TOTAL AREA IS MENTIONED AS 23940 SQ. FT. I.E. EQUIVALENT TO 22.25 R AND THE FIGURE S ARE WRITTEN AS UNDER: 96 RAS 30 CHEQUE ____________ 66 CASH APART FROM THAT , NO OTHER SUPPORTING DOCUMENT IS FOUND . T HE FA C T REMAINED THAT THE ASSESSEE HAS REGISTERED THE SALE DEED IN RESPECT OF ONE LAND AND IT IS STATED THAT THE LAND AT RAHTANI IS COVERED IN THE SALE DEED. THERE IS NO DIS PUTE ABOUT THE LEGAL PROPOSITION THAT IF ANY DOCUMENT IS FOUND DURING THE COURSE OF SEARCH DISCLOSING SOME 11 ITA NOS.658, 661, 688, 671 & 664/PN/2011, MOTI UDHARAM PANJABI, RAMCHAND U. PANJABI & SUNDERDAS U. PANJABI, PUNE MON ETARY TRANSACTIONS THEN THE BURDEN IS ON THE ASSESSEE TO EXPLAIN WHETHER THOSE TRANSACTIONS ARE REFLECTED IN THE BOOKS OF ACCOUNT . ON PERUSAL OF THE DOCUMENT FOUND DURING THE COURSE OF SEARCH WHICH IS IN NATURE OF DRAWING/ROUGH MAP OF THE LAND WITHOUT MENTIONING ANY SURVEY NO. OR OTHER IDENTIFICATION OF THE LAND , I N OUR OPINION IS NOT SUFFICIENT TO SUPPORT THE ADD ITION. HOWEVER, THE ASSESSEE HAS F ILED TH E DETAILED REPLY BUT BOTH THE AUTHORITIES BELOW HAVE NOT AT ALL TAKEN ANY PAINS TO DEAL WITH THE EXPLANATION OF THE ASSESSEE . WE DO NOT FIND ANY JUSTIFICATION TO SUPPORT THE ADDITION MADE BY THE ASSESSING OFFICER. WE ACCORDINGLY DELETE THE ADDITIO N SUSTAINED B Y THE LD. CIT(A) OF RS. 65 LACS. A CCORDINGLY , GROUND NO. 2 IS ALLOWED. IN THE RESULT, THE ASSESSEES APPEAL IS PARTLY ALLOWED. 14. ITA NO. 664 /PN/2011, A.Y. 2000 - 01 IN THIS APPEAL, THE ASSESSEE HAS TAKEN FOLLOWING GROUND: ON FACTS AND CIR CUMSTANCES PREVAILING IN THE CASE AND AS PER PROVISIONS OF LAW, IT BE HELD THAT, ALLEGED UNDISCLOSED INVESTMENT AMOUNTING TO R S. 20,72,000/ - ADDED BY THE ASSESSING OFFICER AND CONFIRMED BY THE 1 ST APPELLATE AUTHORITY OUT OF UNDISCLOSED SOURCE OF INCOME IS U NWARRANTED, UNJUSTIFIED AND CONTRARY TO THE FACTS PREVAILING IN THE CASE AND PROVISIONS OF LAW. THE ADDITION MADE BY THE ASSESSING OFFICER AND THAT CONFIRMED BY THE 1 ST APPELLATE AUTHORITY BE DELETED. THE APPELLATE BE GRANTED JUST AND PROPER RELIEF IN TH IS RESPECT. 15. THE FACTS PERTAINING TO THE ISSUE OF ADDITION OF RS. 20,72,000/ - REVEALED FROM THE RECORD ARE AS UNDER. THE DOCUMENT WAS SEIZED FROM THE PREMISES OF THE ASSESSEE I.E. THE PAGE NOS. 43 AND 44 OF BUNDLE NO. 3 ( WHICH ARE WRONGLY WRITTEN AS PAGE NO. 4 4 & 45 IN THE ASSESSMENT ORDER ) . THOSE DOCUMENTS ARE IN THE NATURE OF POSSESSION LETTER AND ALLOTMENT LETTER IN RESPECT OF THE DUPLEX FLAT NO. 3 OF PLOT NOS. 14 & 15, BHUSARI COLONY, PAUD ROAD, KOTHRUD, PUNE 29 . SIMILARLY , PAGE NOS. 45 AND 46 O F BUNDLE NO. 3 WE RE ALSO A POSSESSION LETTER AND ALLOTMENT LETTER IN RESPECT OF DUPLEX FLAT NO. 4 OF PLOT NOS. 14 & 15, BHUSARI COLONY, PAUD ROAD, KOTHRUD, PUNE 29. THE 12 ITA NOS.658, 661, 688, 671 & 664/PN/2011, MOTI UDHARAM PANJABI, RAMCHAND U. PANJABI & SUNDERDAS U. PANJABI, PUNE ASSESSING OFFICER DISCUSSED THIS ISSUE IN PARA NOS. 8.1 TO 9.5 AND THE OPERATIVE PART OF THE ASSESSMENT ORDER IS AS UNDER: 8.1. PAGE NO. 44 OF B. NO. 3 SEIZED FROM THE RESIDENCE OF SUNDER UDHARAM PANJABI SHOWS THAT IT IS A POSSESSION LET T ER DATED 04 - 08 - 1999 IN RESPECT OF DUPLEX NO. 3 ON GROUND FLOOR AT S.NO. 78, PLOT NO. 14+15, BHUSARI COLONY, PAUD ROAD, KOTHURD, PUNE 29 GIVEN BY M/S. SHEVALE BUILDERS TO MR. SUNDHAR UDHARAM PANJABI 120, PLOT NO. 328, PIMPARI, PUNE. PAGE NO. 45 IS THE ALLOTMENT LETTER DATED 04 - 08 - 1999 IN RESPECT OF THE ABOVE DUPLEX NO. 3 IN FAVOUR OF SUNDAY UDHARAM PANJA BI. THE COST OF SAID DUPLEX IS MENTIONED AT RS.10,00,000/ - AND THE AREA OF THE DUPLEX IS 1650 SQ. FT. IN ADDITION TO THIS AN AMOUNT OF RS.36,000/ - IS MENTIONED AS THE SOCIETY CHARGES FOR THE SAID DUPLEX. THUS THE TOTAL COST OF THE DUPLEX IS RS. 10,36,000 / - . SINCE THE POSSESSION OF THE DUPLEX IS GIVEN ON THE SAME DATE I.E. 4 - 8 - 1999, IT IS CLEAR THAT SHRI SLINDAR UDHARAM PUNJABI HAS PAID AN AMOUNT OF RS.10,36,000/ - FOR PURCHASING HE SAID DUPLEX. THE MODE OF PAYMENT IS NOT MENTIONED. THIS TRAP ACTION, PRIMA FACIE, IS AN UNACCOUNTED INVESTMENT OF SHRI. SUNDER UDHARAM PANJABI. THE ASSESSEE WAS ASKED, VIDE THIS OFFICE QUESTIONNAIRE DATE 6/9/2007 TO STATE WHY THIS PAYMENT OF RS. 10,36,000/ - MAY NOT BE TREATED AS OUT OF THE UNDISCLOSED INCOME OF THE ASSESSEE FOR THE A. Y. 2000 - 2001 AND ADDED BACK ACCORDINGLY 8.2 THIS ISSUE WAS REFERRED TO THE ASSESSEE FOR CLARIFICATION V IDES THIS OFFICE LETTER DATED 06 - 09 - 2007. 8.3 THE ASSESSEE HAS STATED VIDE HIS REPLY DATED 28 - 09 - 2007 THAT 'THIS TRANSACTION IS NOT RECORDED IN THE BOOKS OF ACCOUNTS SINCE MOTI PANJABI MADE THIS PAYMENT ON BEHALF OF THE ASSESSEE. THE PAYMENT WAS MADE FOR PURCHASE OF A HOUSE, WHICH NEVER MATERIALIZED, AND HENCE THERE WAS NO QUESTION OF COMPUTATION OF CAPITAL GAINS. THE AMOUNT PAID BY AFR. MOTI PANJABI WAS RS. 10,00,000/ - AND SINCE THE TRANSACTION DID NOT MATERIALIZE THE SOCIETY CHARGES WERE NEVER PAID.' 8.4 THE CLARIFICATION OF THE ASSESSEE THAT TRANSACTION IS NOT RECORDED IN THE BOOKS OF ACCOUNTS IS IMPORTANT. IT IS IMMATERIAL THAT ACCORDING TO THE ASSESSEE MOTI PUNJABI MADE THIS PAYMENT ON BEHALF OF THE ASSESSEE. THE ASSESSEE, WHILE STATING SO, DOES NOT POINT OUT WHETHER SHRI MOTI PUNJABI HAD AT LEAST ACCOUNTED FOR THE PAYMENT IN HIS BOOKS OF ACCOUNT, THE ASSESSEE'S SILENCE LEADS TO INFER THA T THE TRANSACTION HAS BEEN SAFELY MADE OUTSIDE THE BOOKS OF ACCOUNT. THERE IS NO EVIDENCE BROUGHT ON RECORD BY THE ASSESSEE TO SHOW THAT THE TRANSACTION DID NOT MATERIALIZE. IT IS THEREFORE INAPT TO ACCEPT THAT REMAINING PAYMENT OF RS 36000 WAS NOT MADE. 8.5 THE ASSESSEE WAS THEREFORE AGAIN REQUESTED BY THIS OFFICE LETTER DATED 14/12/2007 TO SHOW CAUSE WHY THE SAID AMOUNT OF PAYMENT. 10 , 36 , 000/ - MAY NOT BE TREATED AS AN INVESTMENT REPRESENTING OUT OF THE UNDISCLOSED INCOME OF THE ASSESSEE . THE ASSESSEE IN HIS REPLY DATED 19 - 12 - 2007 HAS OFFERED CLARIFICATION IT RESPECT OF THE TWO DUPLEXES, TOGETHER HENCE THE SAME IS INCORPORATED IN THE NEXT ISSUE RELATING TO DUPLEX NO.4, 13 ITA NOS.658, 661, 688, 671 & 664/PN/2011, MOTI UDHARAM PANJABI, RAMCHAND U. PANJABI & SUNDERDAS U. PANJABI, PUNE AND FINDINGS OF THE ASSESSING OFFICER ARE ALSO GIVEN AT THAT PLACE WH ICH ARE APPLICABLE TO THIS DUPLEX ALSO. 9 DUPLEX NO.4 UNACCOUNTED INVESTMENT OF RS 10 , 36 , 000/ - : 9.1 PAGE NO - 46 OF B.NO. 3 SEIZED FROM THE RESIDENCE OF SU N DER UDHARAM P UNJABI SHOWS THAT IT IS POSSESSION LETTER DATED 4 - 8 - 1999 IN RESPECT OF DUPLEX NO.4 ON GROUND FLOOR AT S NO.78, PLOT NO.14 + 15, BHUSARI COLONY, PAUD ROAD, KOTHRUD, PANE 29 GIVEN BY M/S SHEVALE BUILDERS TO W. SUNDHAR UDHARAM PUNJABI 120, PLOT NO.328, PIMPARI, PUNE. PAGE NO.47 IS THE ALLOTMENT LETTER DATED 4 - 8 - 1999 IN RESPECT O F THE ABOVE DUPLEX NO.4 IN FAVOUR OF SUNDHAR UDHARAM PANJABI. THE COST OF SAID DUPLEX IS MENTIONED AT RS.10,00,OOO/ - AND THE AREA OF THE DUPLEX IS 1650 SQ. FT. IN ADDITION TO THIS AN AMOUNT OF RS.36, OOO/ - IS MENTIONED AS A SOCIETY CHARGES FOR THE SAID DUP LEX. THUS THE TOTAL COST OF THE D U PLEX IS RS. 10,36, OOO/ - SINCE THE POSSESSION OF THE DUPLEX IS GIVE ON THE SAME DATE , I.E 4 - 8 - 1999, IT IS CLEAR THAT SHREE. SUND ER UDHARAM PANJABI HAS PAID AN AMOUNT OF RS. 10,36,000/ - FOR PURCHASING THE SAID DUPLEX. THE MOD E OF PAYMENT IS NOT MENTIONED. IT IS SEEN FROM CONCLUSION IN RESPECT OF B.NO.5 & 6 THAT THE SAID AGREEMENTS ARE SIMILAR TO THIS AGREEMENT AND NARRATION OF THE BUNDLE IS ALSO SAME AND ON THE BASIS OF EVIDENCES SEIZED VIDE PAGE NO. 58 & 59 OF LOOSE PAPER B. NO. 1, IT IS FACT THAT THE RELEVANT PAYMENT HAS BEEN MADE IN CASH AND IT IS UNACCOUNTED INVESTMENT OF SHRI SUNDER UDHARAM PANJABI. PLEASE SHOW CAUSE WHY THIS PAYMENT OF RS. 10,36, OOO/ - MAY NOT BE TREATED UNDISCLOSED INCOME OF THE ASSESSEE FOR THE A.Y. 2000 - 2001 AND ADDED BACK ACCORDINGLY. 9.2 THE ASSESSEE HAS STATED VIDE HIS REPLY DATED 28 - 09 - 2007 THAT 'THIS TRANSACTION IS NOT RECORDED IN THE BOOKS F ACCOUNTS SINCE MOTI PANJABI MADE THIS PAYMENT ON BEHALF OF THE ASSESSEE. - T HE PAYMENT WAS MADE FOR PURCHASE OF A HOUSE, WHICH NEVER MATERIALIZED, AND HENCE THERE WAS QUESTION OF COMPUTATION OF CAPITAL GAINS. THE AMOUNT PAID BY MR. MOTI PANJABI WAS RS.LO,00,000/ - AND SINCE THE TRANSACTION DID NOT MATERIALIZE THE SOCIETY CHARGES WERE NEVER PAID.' 9.3 THE CLARIFICA TION OF THE ASSESSEE THAT TRANSACTION IS NOT RECORDED IN THE BOOKS OF ACCOUNTS IS IMPORTANT. IT IS IMMATERIAL THAT ACCORDING TO THE ASSESSEE MOTI PUNJABI MADE THIS PAYMENT ON BEHALF OF THE ASSESSEE. THE ASSESSEE, WHILE STATING SO, DOES NOT POINT OUT WHETHE R SHRI MOTI PUNJABI HAD AT LEAST ACCOUNTED FOR THE PAYMENT IN HIS BOOKS OF ACCOUNT. THE ASSESSEE'S SILENCE LEADS TO INFER THAT THE TRANSACTION HAS BEEN SAFELY MADE OUTSIDE THE BOOKS OF ACCOUNT. THERE IS NO EVIDENCE BROUGHT ON RECORD BY THE ASSESSEE TO SHOW THAT THE TRANSACTION DID NOT MATERIALIZE. IT IS THEREFORE INAPT TO ACCEPT THAT REMAINING PAYMENT OF RS 36000 WAS NOT MADE. 9.4 THE ASSESSEE WAS THEREFORE AGAIN REQUESTED BY THIS OFFICE LETTER DATED 1 - 4/12/2007 TO SHOW CAUSE WHY THE SAID AMOUNT OF PAYMENT OF RS 10 , 36 , 000/ - MAY NOT BE TREATED AS AN INVESTMENT REPRESENTING OUT OF THE UNDISCLOSED INCOME OF THE ASSESSEE. 9.5 IN HIS REPLY DATED 19 - 12 - 2007, THE ASSESSEE HAS CLARIFIED THAT IT MAY BE NOTED THAT OUR CLIENT WAS NEGOTIATING FOR 2 ROW HOUSES WITH SH EVALE BUILDERS. FINALLY ONLY ROW HOUSE NO. 4 WAS BOUGHT FOR WHICH 14 ITA NOS.658, 661, 688, 671 & 664/PN/2011, MOTI UDHARAM PANJABI, RAMCHAND U. PANJABI & SUNDERDAS U. PANJABI, PUNE AGREEMENT HAS ALSO BEEN EXECUTED. MR. MOTI PANJABI MADE THE PAYMENT FOR THIS AND HE HAS CONSIDERED THIS INVESTMENT STATEMENT OF INCOME OF A.Y. 2000 - 01 FILED IN RESPONSE TO NOTICE U/S. 153 A VIDE ACK NO. 19 DATED 13 - 04 - 2007. IT IS SUBMITTED THAT THERE HAS BEEN NO ADDITIONAL INVESTMENT MADE OF RS. 36000 AND RS. 10,36,000 WHICH CAN BE TAXED IN ANY ASSESSEE SINCE NO PAYMENT HAS BEEN MADE AS IS ALSO EVIDENT FROM THE SEIZED PAPERS. NO ADDITION IS CALLED FOR THIS RESPECT AS HAS BEEN INTIMATED IN THE SHOW CAUSE NOTICE AND NO SUCH ADDITION IS ACCEPTABLE TO THE ASSESSEE. 16. THE ASSESSEE CARRIED THE ISSUE BEFORE THE LD. CIT(A). THE ASSESSEE STATED THAT IN THE ASSESSMENT PROCEEDINGS OF MR. MOTI PA NJABI, FAMILY MEMBER , HAS DISCLOSED IN THE STATEMENT OF INCOME FOR THE A.Y. 2000 - 02 , IN RESPECT OF INVESTMENT MADE BY HIM ON BEHALF OF SUNDERDAS U. PA N JABI (ASSESSEE) FOR THE DUPLEX BUNGALOW NO. 4 AT BHUSARI COLONY, PUNE. IT WAS FURTHER STATED BEFORE THE LD. CIT(A) THAT CASH PAYMENT MADE TOWARD S THE PURCHASE OF DUPLEX NO. 4 OF RS. 10,00,000/ - HAS BEEN MADE BY MR. MOTI PANJABI WHICH HAS BEEN DULY DISCLOSED IN HIS RETURN OF INCOME. THE ASSESSEE ALSO STATED THAT PURCHASE OF ONLY ONE PROPERTY OUT OF PLOT NOS. 3 & 4 WAS MATERIALIZED AND AMOUNT PAID BY MR. MOTI PANJABI WAS FOR DUPLEX PLOT NO. 4. THE LD. CIT(A) WAS NOT IMPRESSED WITH THE SUBMISSION S OF THE ASSESSEE . H E OBSERVED THAT CONT ENTS OF PAGE NOS. 43 AND 45 (WHICH ARE THE POSSESSION LETTERS) HA VE NOT BEE N DENIED BY THE ASSESSEE. THE SAID DOCUMENTS CLEARLY INDICATE THAT THE ASSESSEE WAS IN THE POSSESSION OF THE DUPLEX NOS. 3 & 4 OF PLOT NO. 14 + 15, BHU SARI COLONY, PAUD ROAD, KOTHRUD, PUNE - 29 AS ON 04 - 08 - 1999. PAGE NOS. 44 & 46 INDICATE THAT THE COSTS OF THE DUPLEXES WHICH WERE IN THE POSSESSION OF THE ASSESSEE ON 04 - 08 - 1999 W AS RS.10,36,000/ - EACH. THE LD. CIT(A) H E LD THAT THE ASSESSEE WAS IN THE POSSESSION OF TWO DUPLEXES NO. 3 & 4 ON 04 - 09 - 1999. AS T HE ASSESSEE HAS NOT RECORDED THE PURCHASE PRICE PAI D FOR ACQUIRING THOSE TWO DUPLEXES IN THE REGULAR BOOKS OF ACCOUNT , LD. CIT(A) CONFIRMED THE ADDITION. 17. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD. THE LEARNED COUNSEL REITERATED THE ARGUMENT MADE BEFORE THE LD. CIT(A) . T HE 15 ITA NOS.658, 661, 688, 671 & 664/PN/2011, MOTI UDHARAM PANJABI, RAMCHAND U. PANJABI & SUNDERDAS U. PANJABI, PUNE ASSESSEE HAS FILED THE PAPER BOOK . I T IS THE CONTENTION OF THE ASSESSEE THAT FROM THE CASH FLOW CHART IN THE PANJABI GROUP RS.10,00,000/ - WERE SHOWN AS PAID TO M/S. SHEVALE BUILDERS ON BEHALF OF THE MR. SUNDERDAS U. PANJABI . I N THE COPY OF THE CASH FLOW STATEMET FILED AT PA GE NO. 10 OF THE PAPER BOOK. PAGE NOS. 10 & 11 OF THE PAPER BOOK ARE ALLOTMENT LETTER OF DUPLEX NO. 4 DATED 04 - 09 - 1999 AND POSSESSION LETTER OF THE DUPLEX NO. 4 DATED 04 - 09 - 1999 RESPECTIVELY. ALLOTMENT LETTER AND POSSESSION LETTER S ARE ISSUE D ON THE SAME DA Y BY M/S. SHEVALE BUILDERS (PAGE NOS. 45 & 46 OF THE SEIZED DOCUMENTS) . O N EXAMINING THE SAID SEIZED PAPER, IT IS SEEN THAT ON THE SAME DATE THE ALLOTMENT LETTERS AND POSSESSION LETTERS OF THE DUPLEX NO. 4 W ERE GIVEN TO THE ASSESSEE. WE REPRODUCE THE CONTENTS OF POSSESSION LETTER AT PAGE NO. 12 OF THE PAPER BOOK WHICH ARE AS UNDER: POSSESSIO N LETTER TO, DATE: AUG. 04, 1999 MR. SUNDHAR UDHARAM PANJABI 120, PLOT NO. 328, PIMPRI, PUNE : 411017. SUBJECT: POSSESSION OF THE DUPLEX NO. 4. DEAR SIR/MA DAM, WE ARE HAPPY TO INFORM YOU THAT WE HAVE HANDED OVER THE VACANT AND PEACEFUL POSSESSION OF THE DUPLEX NO. 4, ON GROUND FLOOR AT S. NO. 78, F. NO. 14+15, BHUSARI COLONY, PAUD ROAD, KOTHRUD, PUNE:411017. YOU HAVE TAKEN THE POSSESSION OF THE SAID DUPLEX . THANKING YOU. YOURS FAITHFULLY, F OR SHEWALE BUILDERS {S. V. SHEWALE} 1 6 ITA NOS.658, 661, 688, 671 & 664/PN/2011, MOTI UDHARAM PANJABI, RAMCHAND U. PANJABI & SUNDERDAS U. PANJABI, PUNE SAME WAY IN RESPECT OF DUPLEX NO. 3 , THE COPIES OF THE SEIZED DOCUMENT I.E. ALLOTMENT LETTER AND POSSESSION LETTER ARE FILED IN COMPILATION AT PAGE NOS. 13 & 14 . O N EXAMINING THE SAID DOCUMENTS WE FIND THAT POSSESSION OF THE FLAT WAS GIVEN TO THE ASSESSEE BY THE BUILDER . T HE POSSESSION LETTER IS AS UNDER: POSSESSION LETTER TO, DATE: AUG. 04, 1999 MR. SUNDHAR UDHARAM PANJABI 120, PLOT NO. 328, PIMPRI, PUNE : 411017. SUBJEC T: POSSESSION OF THE DUPLEX NO. 3. DEAR SIR/MADAM, WE ARE HAPPY TO INFORM YOU THAT WE HAVE HANDED OVER THE VACANT AND PEACEFUL POSSESSION OF THE DUPLEX NO. 3, ON GROUND FLOOR AT S. NO. 78, P. NO. 14+15, BHUSARI COLONY, PAUD ROAD, KOTHRUD, PUNE:411029. Y OU HAVE TAKEN THE POSSESSION OF THE SAID DUPLEX. THANKING YOU. YOURS FAITHFULLY, FOR SHEWALE BUILDERS {S. V. SHEWALE} 18. IT I S CLEAR FROM THE ABOVE REFERRED POSSESSION LETTERS THAT THE EXPLANATION OF THE ASSESSEE IS NOT CORRECT. WE , THEREFORE , HOLD T HAT THE ASSESSEE HAS MADE THE PAYMENT OF RS.20,72,000/ - IN RESPECT OF THOSE FLATS WHICH ARE NOT ACCOUNTED IN HIS BOOKS OF ACCOUNT. THE OTHER CLAIM OF THE ASSESSEE IS NOT ACCEPTED THAT ONE DEAL WAS NOT FINALIZED AND MATERIALIZED ETC. AT THE SAME TIME , IT IS SEEN THAT MR. MOTI PANJ ABI HAS MADE THE PAYMENT OF RS. 10,00,000/ - TO THE SHEVALE BUILDERS AND DECLARED THE SAME IN HIS RETURN OF INCOME. WE , THEREFORE , SUSTAINED THE ADDITION TO THE EXTENT OF RS.10,72,000/ - AND 17 ITA NOS.658, 661, 688, 671 & 664/PN/2011, MOTI UDHARAM PANJABI, RAMCHAND U. PANJABI & SUNDERDAS U. PANJABI, PUNE THE ASSESSEE GET THE PARTIAL RELIEF OF R S.10,00,000/ - . ACCORDINGLY , THE GROUND IS PARTLY ALLOWED AND THE ASSESSEE S APPEAL IS ALSO PARTLY ALLOWED. ITA NO. 668/PN/2011, A.Y. 2000 - 01 19. IN THIS APPEAL THE ASSESSEE HAS TAKEN THE FOLLOWING GROUND: ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CASE AND AS PER PROVISIONS OF LAW, IT BE HELD THAT, ADDITION OF RS.30,00,000/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF ALLEGED UNDISCLOSED INVESTMENTS AND PARTLY SUSTAINED BY THE 1 ST APPELLATE AUTHORITY AT RS.15,00,000/ - IS IMPROPER, UNWARRANTED, UNJUSTIFI ED AND CONTRARY TO THE PROVISIONS OF LAW AND FACTS PREVAILING IN THE CASE. IT FURTHER BE HELD THAT ADDITION MADE BY THE ASSESSING OFFICER IN VIOLATION OF RULES OF NATURAL JUSTICE IS NOT TENABLE IN LAW. THE ADDITION MADE BY THE ASSESSING OFFICER IN THIS R ESPECT BE DELETED AND THE PARTLY SUSTAINED BY THE 1 ST APPELLATE AUTHORITY BE DELETED. THE APPELLATE BE GRANTED JUST AND PROPER RELIEF IN THIS RESPECT. 20. DURING THE COURSE OF SEARCH , PAPERS WERE SEIZED FROM THE RESIDENCE OF SHRI SUNDER U. PANJABI . ON EXPLANATION OF THE PAGE NOS. 58 TO 65 OF BUNDLE NO. 1 SEIZED FROM THE RESIDENCE OF SHRI SUNDER U. PANJABI , I T WAS NOTICED THAT THE ASSESSEE HAD MADE INVESTMENT IN SHOPS WHICH WAS NOT RECORDED IN THE BOOKS OF ACCOUNT. THE ASSESSING OFFICER SOUGHT THE EXPL ANATION OF THE ASSESSEE WHY THE SAID AMOUNT SHOULD NOT BE TREATED A S UNEXPLAINED INVESTMENT. THE ASSESSEE TOOK THE STAND THAT THE SAID TRANSACTION WAS NOT RECORDED IN THE BOOKS OF ACCOUNT SINCE MOTI PANJABI MADE SAID PAYMENT ON BEHALF OF THE ASSESSEE. TH E PAYMENT WAS MADE FOR PURCHASE OF SHOPS WHICH TRANSACTION WAS NEVER MATERIALIZED AND HENCE , THERE WAS NO QUESTION OF COMPUTATION OF THE CAPITAL GAIN. THE ASSESSEE ALSO CONTENDED THAT THERE IS NO CAPITAL GAIN ON THE SAID TRANSACTION SINCE THE DEAL DID NOT MATERIALIZE AND THE BUILDER RETURNED THE MONEY ON 12 - 07 - 2001. 21. THE ASSESSEE ALSO FILED COPY OF THE CASH FLOW STATEMENT FILED BY SHRI MOTI PANJABI IN WHICH THE PAYMENT OF RS. 15,00,000/ - ON 15 - 11 - 18 ITA NOS.658, 661, 688, 671 & 664/PN/2011, MOTI UDHARAM PANJABI, RAMCHAND U. PANJABI & SUNDERDAS U. PANJABI, PUNE 1999 WAS SHOWN AS PAID TO M/S. PARALE BUILDERS ON BEHAL F OF RAM PANJABI (ASSESSEE) IN RESPECT OF SHOP NO. 9 & 13. IT APPEARS THAT THE SEIZED DOCUMENTS DISCLOSED THAT THE ASSESSEE HAS PURCHASED TWO SHOPS . W E FIND THAT THE ASSESSING OFFICER HAS MADE THE ADDITION OF RS. 30,0 0,000/ - AT THE TIME OF FINALIZATION O F THE ASSESSMENT PROCEEDINGS. THE ADDITION IS MADE ON THE FOLLOWING REASONS: ADDITION ON ACCOUNT OF INVESTMENT REFERENCE IN SEIZED MATERIAL AMOUNT INVESTMENT IN SHOPS PAGE NO. 58 TO 65 IN BUNDLE NO. 1 RS.10,00,000/ - INVESTMENT IN SHOP NO. 9 IN BUNDLE NO . 5 RS.7,50,000/ - INVESTMENT IN SHOP NO. 13 IN BUNDLE NO. 5 RS.7,50,000/ - 22. THE CONTENTION OF THE ASSESSEE IS THAT T HE ABOVE INVESTMENTS ARE MADE BY SHRI MOTI U. PANJABI. H E HAS DECLARED THE SAID AMOUNT IN THE RETURN FILE D IN RESPONSE TO NOTICE U/S. 153A. THE LD. CIT(A) DE LETED THE ADDITION S THOSE ARE RS.7,50,000/ - AND RS.7,50,000/ - BY OBSERVING THAT THE ASSESSING OFFICER HAS NOT DISCUSSED THE DOCUMENTS FROM WHERE THOSE TWO FIGURES HAVE COME. IT APPEARS THAT THE ASSESSEE HAS MADE INVESTMENT OF RS. 1 5,00,000/ - , ONLY TO THAT EXTENT THE EVIDENCE WAS FOUND. SHRI MOTI PANJABI DECLARED RS.15,00,000/ - IN HIS RETURN FILE D IN RESPONSE TO NOTICE U/S. 153A AND THE SAME IS ALSO REFLECTED CLEARLY IN CASH FLOW STATEMENT FILED BY SHRI MOTI PANJABI B EFORE ASSESSING OFFICER STATING THOSE PAYMENT S ARE MADE FOR TWO SHOPS ON BEHALF OF THE ASSESSEE. ONCE SOURCE OF PAYMENT IS EXPLAINED AND IT IS A DMITTED BY ANOTHER PARTY THEN NO JUSTIFICATION TO MADE ADDITION. IN OUR OPINION, THE ASSESSING OFFICER HIMSELF IS NOT CLEAR I N RESPECT OF THE ADDITIONS MADE OF RS.30,00,000/ - AS THE SAID POINT IN ASSESSMENT ORDER IS CONFUSING. W E FIND NO JUSTIFICATION TO SUPPORT THE ADDITION. ACCORDINGLY , WE ALLOW THE GROUND TAKEN BY THE ASSESSEE AND DELETE THE ADDITION. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. 19 ITA NOS.658, 661, 688, 671 & 664/PN/2011, MOTI UDHARAM PANJABI, RAMCHAND U. PANJABI & SUNDERDAS U. PANJABI, PUNE ITA NO. 671/PN/2011, A.Y. 2006 - 07 23. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUND IN THE APPEAL: ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CASE AND AS PER PROVISIONS OF LAW, IT BE HELD THAT, ADDITION OF RS.1,25,000/ - M ADE BY THE ASSESSING OFFICER ON ACCOUNT OF ALLEGED UNDISCLOSED CASH AND CONFIRMED BY THE 1 ST APPELLATE AUTHORITY IS UNWARRANTED, UNJUSTIFIED AND CONTRARY TO THE PROVISIONS OF LAW AND FACTS PREVAILING IN THE CASE. THE ADDITION MADE BY THE ASSESSING OFFICER AND THAT CONFIRMED BY THE 1 ST APPELLATE AUTHORITY BE DELETED. THE APPELLATE BE GRANTED JUST AND PROPER RELIEF IN THIS RESPECT. 24 . THE ASSESSING OFFICER HAS NOTED THAT DURING THE COURSE OF SEARCH CASH OF RS.3,00,890/ - WAS FOUND AND OUT OF THE SAID CASH RS.1,25,000/ - WAS SEIZED. DURING THE CURSE OF SEARCH ACTION , THE STATEMENT OF ASSESSEE WAS RECORDED U/S. 132(4) ON 18 - 03 - 2006. IN THE SAID STATEMENT, IN ANSWER TO QUESTION NO. 26, THE ASSESSEE ADMITTED THAT THE CASH OF RS.1,25,000/ - REPRESENT HIS UNACCO UNTED MONEY. THE ASSESSING OFFICER MADE THE ADDITION ON THE BASIS OF ADMISSION MADE BY THE ASSESSEE IN THE STATEMENT RECORDED U/S. 132(4) OF THE ACT. THE ASSESSEE CHALLENGED THE ADDITION BEFORE THE LD. CIT(A) , BUT WITHOUT SUCCESS. NOW THE ASSESSEE IS IN APPEAL BEFORE US. 2 5 . WE HAVE HEARD THE PARTIES. THE LEARNED COUNSEL ARGUES THAT THE ASSESSEE EXPLAINED THAT THE SAID CASH BELONG TO HIS DAUGHTER VEENA JESWANI ALIAS JUHI RAMESH JESWANI. HE ALSO REFERRED TO ANSWER NO. 5 AND ANSWER NO. 10 OF THE STATEMEN T RECORDED ON 17 - 03 - 2006. HE SUBMITS THAT THE ASSESSEE ADMITTED TO DECLARE RS.1,25,000/ - AS HIS UNDISCLOSED INCOME BECAUSE HE COULD NOT GIVE ANY PROOF THAT THE SAID CASH BELONG TO HIS DAUGHTER. HE PLEADED THAT THE ADMISSION TO QUESTION NO. 26 IS UNDER DU RESS AND PRESS URE . APART FROM THAT NO FURTHER ARGUMENT WAS ADVANCED. 20 ITA NOS.658, 661, 688, 671 & 664/PN/2011, MOTI UDHARAM PANJABI, RAMCHAND U. PANJABI & SUNDERDAS U. PANJABI, PUNE 2 6 . WE HAVE ALSO HEARD THE LD. DR. IT IS TRUE THAT IN THE STATEMENT RECORDED U/S. 132(4) THE ASSESSEE EXPLAINED THAT THE SAID CASH BELONG TO HIS DAUGHTER BUT AT THE SAME TIME HE ALSO STATED THAT HE CANNOT GIVE ANY PROOF. IN THE QUESTION NO. 26 , HE STATED THAT THE SAID CASH MAY BE TREATED AS HIS INCOME. NO CONFI RMATION FROM THE DAUGHTER OR FROM ANY OTHER WAS FOUND EXCEPT THE ACKNOWLEDGEMENT OF THE RETURN. ON C E THE CASH IS FOUND IN TH E POSSESSION OF THE ASSESSEE , THE BURDEN IS O N HIM TO FILE THE EVIDENCE IN SUPPORT OF HIS CONTENTION THAT THE SAID CASH BELONG TO THIRD PARTY. EVEN NO CONFIRMATION HAS BEEN FILED BY THE ASSESSEE BEFORE US IN RESPECT OF THE CLAIM THAT THE SAID CASH BELONG TO HIS DAUGHTER. WE HAVE NO REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A) . A CCORDINGLY , THE SAME IS CONFIRMED . 2 7 . IN THE RESULT, APPEALS BEING (I) ITA NO. 658/PN/2011 IS ALLOWED AND ITA NO. 661/PN/2011 IS PARTLY ALLOWED, (II) ITA NO. 664/PN/20 11 IS PARTLY ALLOWED AND APPEAL BEING ITA NO. 668/PN/2011 IS ALLOWED AND (III) ITA NO. 671/PN/2011 IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 21 - 06 - 20 1 3 SD/ - SD/ - ( G.S. PANNU ) ( R.S. PADVEKAR ) ACCOUNTANT MEMBER JUDICIAL MEMBER RK /PS PUNE , DATED : 21 ST JUNE, 20 1 3 COPY TO 1 ASSESSEE 2 DEPARTMENT 3 THE CIT(A) - CENTRAL, PUNE 4 THE CIT(CENTRAL), PUNE 5 THE DR, ITAT, A BENCH, PUNE . 6 GUARD FILE. //TRUE COPY// BY ORDER PRIVATE S ECRETARY INCOME TAX APPELLATE TRIBUNAL , PUNE