Devendra P. Shah, Pune V. Deputy ommissioner of Income-tax,

ITA 677/PUN/2016

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 5202 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 5 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 27-09-2018
• Assessment Year: 2009-2010
• Appeal Filed On: 13-04-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K JADHAV
• Assessee Lawyers: CHETAN KARIA SHRI SUHAS BORA
• Keywords: Unexplained cash credit; Bogus Share capital; Unexplained investment; Unexplained expenditure; Search and seizure; Loose papers; Document seized; Source of fund; Additional evidence; Documents seized
• Section: 69C; 68; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUN E . , , , ! BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NOS. 675 TO 679/PUN/2016 # # / ASSESSMENT YEARS : 2007-08 TO 2011-12 DEVENDRA P. SHAH, F-109, ADINATH SOCIETY, PUNE 411 037 PAN : AHOPS1104N ....... / APPELLANT / V/S. DCIT, CENTRAL CIRCLE-1(1), PUNE / RESPONDENT . / ITA NOS. 793 TO 796/PUN/2016 # # / ASSESSMENT YEARS : 2007-08 TO 2010-11 DCIT, CENTRAL CIRCLE-1(1), PUNE ....... / APPELLANT / V/S. DEVENDRA P. SHAH, F-109, ADINATH SOCIETY, PUNE 411 037 PAN : AHOPS1104N / RESPONDENT ASSESSEE BY : SHRI CHETAN KARIA, SHRI SUHAS BORA REVENUE BY : SHRI S.K, JADHAV / DATE OF HEARING : 27.09.2018 / DATE OF PRONOUNCEMENT :12.10.2018 / ORDER PER D. KARUNAKARA RAO, AM : THERE ARE 9 APPEALS UNDER CONSIDERATION. ITA NOS. 675 T O 679/PUN/2016 ARE FILED BY THE ASSESSEE AND ITA NOS. 793 TO 2 DEVENDRA P. SHAH A.YRS. 2007-08 TO 2011-12 796/PUN/2016 ARE FILED BY THE REVENUE AGAINST THE CONSO LIDATED ORDER OF CIT(A)-12, PUNE DATED 29-01-2016. ALL THESE APPEALS P ERTAIN TO A.YRS. 2007-08 TO 2011-12. REVENUE HAS NOT FILED ANY CROSS AP PEAL FOR THE A.Y. 2011-12. 2. BRIEFLY STATED RELEVANT FACTS OF THE CASE INCLUDE THAT THE ASSESSEE IS AN INDIVIDUAL AND ONE OF THE DIRECTORS OF M/S. PARAG MILK AN D MILK PRODUCTS PVT. LTD. THERE WAS ACTION U/S.132 OF THE ACT ON PARAG GROUP OF CASES ON 04-02-2011. ACCORDINGLY, AS PER THE DUE PR OCESS OF LAW, THE ASSESSMENTS WERE COMPLETED U/S.153A OF THE ACT. BEFORE US, THERE IS NO ISSUE RELATING TO THE INCRIMINATING MATERIAL OR NON-ABATED A SSESSMENTS ETC. THE APPEALS PERTAIN TO THE A.YRS. 2007-08 TO 2011- 12. DURING THE ASSESSMENT, THE AO MADE VARIOUS ADDITIONS AND THE DETAILS OF RETURNED INCOME, ADDITIONS MADE AND THE ASSESSED INCOME ARE TABULA TED AS UNDER: PARTICULARS 2007 - 08 2008 - 09 2009 - 10 20 10 - 11 2011 - 12 RETURNED INCOME 34,92,176 2,67,24,730 1,23,23,550 54,32,410 1,16,77,560 UNEXPLAINED CASH CREDIT U/S.68 32,50,000 46,00,000 68,10,000 UNEXPLAINED EXPENDITURE U/S.69C 3,50,000 -- -- 1,58,06,000 4,00,000 UNEXPLAINED MONEY U/S.69A -- -- -- -- 38,41,000 UNEXPLAINED INVESTMENT IN JEWELLERY -- -- -- -- 2,20,000 UNEXPLAINED INVESTMENT IN FIXED DEPOSIT U/S.69 2,30,970 -- -- -- -- UNEXPLAINED INVESTMENT IN LAND -- -- 1,06,42,500 -- -- EXCESS CLAIM OF AGRICULTURAL INCOME 23,004 19,98,851 3,09,640 14,52,247 5,28,293 INCOME FROM HOUSE PROPERTY -- 75,600 -- -- -- CASH PAYMENT TO SHRUSHTI SANGAM 10,00,000 -- -- -- -- ASSESSED INCOME 3,97,46,150 3,20,49,181 2,78,75,690 2,95,00,657 1,66,66,843 3 DEVENDRA P. SHAH A.YRS. 2007-08 TO 2011-12 2.1 REFERRING TO THE ADDITIONS MADE BY THE AO, GIVING THE FATE OF THESE ADDITIONS BEFORE THE CIT(A), ASSESSEE FILED ISSUE-WISE CHART R AISED IN BOTH APPEALS OF REVENUE & ASSESSEE AND THE SAME IS EXTRACTED AS FOLLOWS : 07-08 07-08 08-09 08-09 09-10 09-10 10-11 10-11 11- 12 R A R A R A R A A ADDITION U/S.68 25 LAKHS 7.50 LAKHS 40.70 LAKHS 5.30 LAKHS 67.80 LAKHS 30,000 ADDITION ON A/C. OF AGRI.INCOME UNEXPLAINED EXPENSES 3.50 CRS 1,58,06,000 UNEXPLAINED SILVER 2.20 LAKHS UNACCOUNTED INVESTMENT IN LOAN GIVEN 10 LAKHS UNEXPLAINED INVESTMENT IN FDR 2,30,970 R=REVENUE APPEAL A=ASSESSEE APPEAL 2.2 REFERRING TO THE ALL THE 6 ADDITIONS MENTIONED ABOVE, LD . COUNSEL FOR THE ASSESSEE NARRATED THE RELEVANT FACTS AND MADE VARIOUS SUBMISSIONS. REFERRING TO THE FATE OF THE APPEALS BEFORE TH E FIRST APPELLATE AUTHORITY, LD. COUNSEL SUBMITTED THAT THE CIT(A) G RANTED PART RELIEF ON VARIOUS ACCOUNTS. CIT(A) GRANTED SUBSTANTIAL RELIEF TO THE ASSESSEE ON ACCOUNTS OF (1) UNSECURED LOANS ADDED U/S.68 OF THE ACT AND (2) THE UNEXPLAINED ELECTION EXPENSES. AGGRIEVED WITH THE C ONFIRMATION OF ABOVE ADDITIONS BY THE CIT(A), THE ASSESSEE FILED APPEA LS FOR THE A.YRS. 2007-08 TO 2011-12. FURTHER, CONTENDING AGAINST THE R ELIEF GIVEN BY THE CIT(A) TO THE ASSESSEE ON THE ADDITIONS MADE BY THE AO , THE REVENUE IS IN APPEALS FOR THE A.YRS. 2007-08 TO 2010-11. ISSUE-WISE ADJUDICATION 3. WE SHALL NOW TAKE UP ISSUE-WISE ADJUDICATION OF THE APP EALS OF THE ASSESSEE IN THE FOLLOWING PARAGRAPHS. IT IS RELEVANT TO ME NTION THAT MOST OF THE GROUNDS RAISED BY THE REVENUE ARE LINKED TO THE ISSUES RAISED BY THE ASSESSEE IN THE APPEALS. THEREFORE, WE PROCEED TO A DOPT THE ISSUE 4 DEVENDRA P. SHAH A.YRS. 2007-08 TO 2011-12 BASED APPROACH WHILE ADJUDICATING THE APPEALS WHETHER T HEY ARE RAISED BY THE REVENUE OR THE ASSESSEE. THE ADDITIONS MADE BY THE AO ON SIX COUNTS NAMELY (1) ADDITION ON ACCOUNT OF LOAN U/S.68 OF TH E ACT; (2) ADDITION ON ACCOUNT OF AGRICULTURAL INCOME; (3) ADDITION OF UNEX PLAINED ELECTION EXPENSES; (4) ADDITION OF UNEXPLAINED SILVER; (5) ADDITION OF UNACCOUNTED INVESTMENT IN LOAN GIVEN; AND (6) ADDITION OF U NEXPLAINED INVESTMENT IN FDR. 4. ADDITION OF UNSECURED LOANS U/S.68 OF THE ACT : THIS ADDITION IS RELEVANT FOR THE A.YRS. 2008-09 TO 2010-11. REFERRING TO THE CHART MENTIONED ABOVE, LD. COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ASSESSEE RECEIVED LOANS FROM VARIOUS CREDITORS AND THE S AME WERE ADDED BY THE AO U/S.68 OF THE ACT. CIT(A) GRANTED PART RELIEF. A GGRIEVED WITH THE SAME, THE REVENUE IS IN APPEAL ON THE SUM OF RS.25 LA KHS FOR A.Y. 2008-09. FURTHER, THE CIT(A) CONFIRMED THE ADDITION OF RS.7,50,000/-. THEREFORE, THE ASSESSEE IS IN APPEAL ON THIS PART OF THE ADDITION. FOR OTHER ASSESSMENT YEARS ALSO, I.E. A.YRS. 2009-10 AND 2 010-11, AS SEEN FROM THE TABLE ABOVE, BOTH REVENUE AND ASSESSEE ARE IN APPEAL. 4.1 GOING INTO THE DETAILS OF THE ADDITION ON ACCOUNT OF LOAN S FOR THE A.Y. 2008-09, THE TOTAL LOANS IN THIS YEAR AMOUNTS TO RS.1 ,24,17,886/-. THERE ARE 8 CREDITORS IN THIS YEAR NAMELY (1) BIPIN SHAH (H UF)- RS.2,50,000/- (2) HARSHA C. VORA-RS.6,00,000/- (3) KALPANA D. SH AH- RS.3,50,000/- (4) DILIP A. SHAH-RS.2,50,000/- (5) HETEL ENTERPRISES - RS.5,00,000/- (6) NEETA S. JAIN-RS.5,00,000/- (7) SAMBHAV DEEP- RS.5,00,000/- AND (8) TARLA D. SHAH-RS.3,00,000/-. THE DETAILS A RE GIVEN IN THE TABLE AT PARA NO.3.2.1 OF THE ORDER OF CIT(A). AO ADD ED THE SAID AMOUNT OF RS.32.50 LAKHS FOR WANT OF DETAILS. IN PARA NO.5 O F THE ASSESSMENT ORDER, THE AO HELD AS UNDER : 5 DEVENDRA P. SHAH A.YRS. 2007-08 TO 2011-12 THE DETAILS OF LOAN PROVIDE BY SUCH PARTIES WERE S CRUTINIZED AND IN THE CASE OF FOLLOWING PARTIER, NEITHER GENUINENESS NOR CREDITWORTHINESS OF SUCH PARTIES WAS PROVED. THE SAME IS PRESENTED ALONG WI TH THE REASONS FOR TREATING THEM AS NON-GENUINE LOAN IN TABULAR FORM A S PER ANNEXURE-A, ENCLOSED AND MADE PART OF ASSESSMENT ORDER. AS ALREADY DISCUSSED EVIDENCES HAVE BEEN GATHERED D URING SEARCH ACTION, THAT ASSESSEE GROUP HAS GENERATED UNACCOUNTED MONEY ON SALE OF MILK PRODUCTS AND HAS MADE INVESTMENTS IN PROPERTIES. U NDER THESE CIRCUMSTANCES, ONUS WAS ON ASSESSEE TO PROVE THE GE NUINENESS OF LOAN AND AS ASSESSEE HAS FAILED TO DO SO, HENCE, RS.32,5 0,000/- WAS ADDED BACK IN THE INCOME OF ASSESSEE U/S.68 OF THE ACT. FROM THE ABOVE, IT IS EVIDENT THAT THE ASSESSEE FAILED TO PROVE THE GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF T HE PARTIES. IT IS THE CASE OF THE AO THAT THE ASSESSEE FAILED TO DISCHARGE THE ONUS AND, THEREFORE, AO INVOKED THE PROVISIONS OF SECTION 68 OF THE A CT ON THE AMOUNT OF RS.32.50 LAKHS. SAME IS THE REASONS GIVEN BY TH E AO WHEN AN AMOUNT OF RS.46 LAKHS IS ADDED IN THE A.Y. 2009-10 AND RS.68,10,000/- IN THE A.Y.2010-11 RESPECTIVELY. 4.2 HOWEVER, IN THE FIRST APPELLATE PROCEEDINGS, THE ASSES SEE SUBMITTED THAT SOME OF ITS CREDITORS ALSO CONTRIBUTED TOW ARDS THE SHARE CAPITAL AND THE SAME WAS SUBJECT MATTER OF THE ASSESSE ES APPLICATION BEFORE THE INCOME TAX SETTLEMENT COMMISSION (ITSC) DECIDED THIS ISSUE. ASSESSEE OFFERED THE SAME AS BOGUS SHARE CAPITAL AND TH E ITSC ACCEPTED THE APPLICATION AND THE MATTER BECAME FINAL. THE SAID FACTS WERE BROUGHT TO THE NOTICE OF THE CIT(A). FURTHER, ON THE ISSU E OF LOAN CREDITORS, ASSESSEE MADE A SUBMISSION STATING THAT THE SAME CREDITORS HAVE OFFERED CERTAIN INVESTMENTS IN SHARES AS UNACCOUNTE D INCOME OF THE ASSESSEE BEFORE THE ITSC SHOULD NOT BE DECIDED AGAINST THE ASSESSEE. FURTHER, THE GROUP CONCERNS OF THE ASSESSEE-PARAG MILK FOODS PVT. LTD. FILED AN APPLICATION BEFORE THE ITSC. THE CONTRIBUTION IN THE FORM OF SHARE APPLICATION MONEY TO M/S. BHAGYALAXMI DAIRY PVT. LTD. WERE TREATED AS NOT GENUINE AND OFFERED TO THE TAXATION. THE CONTRIBUTION 6 DEVENDRA P. SHAH A.YRS. 2007-08 TO 2011-12 MADE BY THE SAID CREDITORS IN THE FORM OF UNSECURED LOANS SHOULD NOT BE TREATED ON PAR WITH THE SAME AND HOLD THAT THE LOAN CR EDITORS ARE BOGUS TOO. STATING THAT THE ASSESSEES APPLICATION BEFORE ITSC IS GENUINE ONE, LD. AR SUBMITTED THAT THE LOAN TRANSACTIONS ARE GENUINE . THEREFORE, THE ADDITION MADE BY THE AO IS FULLY UNSUSTAINABLE. HOWEVER, ON EVIDENCES FILED BY THE ASSESSEE, AO RAISED OBJECTIONS WITH REGARD TO THE INACCURACIES WITH REFERENCE TO SIGNATURES AND THE PERMAN ENT ACCOUNT NUMBERS OF THE CREDITORS. 4.3 ON CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE THE FIRST APPELLATE AUTHORITY, THE CIT(A) GRANTED PART RELIEF TO THE ASSESSEE BARRING UNSECURED LOANS OF RS.2.50 LAKHS AND RS.5 LAKHS CO NTRIBUTED BY MR. DILIP A. SHAH AND SMT. NEETA S. JAIN RESPECTIVELY STAND CONFIRMED FOR THE A.Y. 2008-09. RELEVANT PARAS ARE EXTRACTED HERE AS UNDER : 3.2.7 I DO NOT AGREE WITH THE LEARNED AO. DURING THE APPELLATE PROCEEDINGS, THE APPELLANT HAS FURNISHED THE ADDITI ONAL EVIDENCE IN TERMS OF THE LOAN CONFIRMATION LETTERS, LEDGER ACCOUNTS O F THE LENDERS SHOWING THE LOAN TRANSACTION BY CHEQUE AND COPY OF THE ACKNOWLE DGMENT OF THE RETURN FILED BY THE LENDERS. THIS EVIDENCE WAS FORWARDED TO THE LEARNED AO FOR HIS REMAND REPORT. THE LEARNED AO IN HIS REMAND RE PORT HAS REPEATED THE SAME FACTS, WHICH WERE MENTIONED IN THE ASSESSMENT ORDER WITHOUT CARRYING OUT ANY ENQUIRIES. 3.2.8 IN MY VIEW, THE LEARNED AOS ALLEGATION OF T HE APPELLANT ROUTING HIS UNACCOUNTED MONEY IN FORM OF THE CASH C REDIT MAY BE TRUE. HOWEVER, WHEN THE APPELLANT HAS FURNISHED THE LOAN CONFIRMATION LETTERS WITH THE DETAILS OF THE CHEQUE PAYMENT, IT IS NOT P OSSIBLE TO MAKE THE ADDITION WITHOUT BRINGING EVIDENCE ON RECORD AS TO HOW THESE LOANS ARE NOT GENUINE. THIS IS ALSO BECAUSE LAW DOES NOT PERMIT EXAMINATION OF THE SOURCE OF SOURCE. THE LEARNED AO HAS RELIED ON T HE APPELLANTS ADMISSION BEFORE THE HONOURABLE SETTLEMENT COMMISSI ON IN THE CASE OF BHAGYALAXMI DAIRY PRIVATE LIMITED, IN WHICH IT WAS STATED THAT SOME OF THE PARTIES ARE NOT GENUINE. 3.2.9 I DO NOT AGREE WITH AO ON THIS ARGUMENT BECA USE OF THE TWO REASONS: FIRSTLY, THE APPELLANT MADE THE ADMISSION BEFORE THE HONOURABLE SETTLEMENT COMMISSION IN THE CASE OF BHAGYALAXMI DA IRY PRIVATE LIMITED WITH RESPECT TO SHARE APPLICATION MONEY TRANSACTION . OBVIOUSLY, SHARE APPLICATION MONEY TRANSACTION IS DIFFERENT THAN THE LOAN TRANSACTION. IF SHARE APPLICATION MONEY TRANSACTION IS NOT GENUINE IT DOES NOT NECESSARILY LEAD TO THE CONCLUSION THAT THE LOAN TRANSACTION IS ALSO NOT GENUINE. FOR THE SAME REASON, THE STATEMENT OF SMT. REKHA SHAH C ANNOT HELP THE CAUSE OF THE LEARNED AO AS IT WAS GIVEN WITH REGARD TO SH ARE APPLICATION MONEY. SECONDLY, I FIND THAT THE LEARNED AO HAS MADE VERY BROAD AND GENERAL 7 DEVENDRA P. SHAH A.YRS. 2007-08 TO 2011-12 STATEMENT WITHOUT IDENTIFYING SPECIFIC LENDERS WHIC H, ACCORDING TO HIM ARE BOGUS LENDERS. IT IS NOT POSSIBLE TO SUSTAIN THE A DDITION ON THE BASIS OF SUCH BROAD GENERALIZATIONS. ACCORDINGLY, I DO NOT FIND ANY BASIS IN THE ADDITION MADE BY THE LEARNED AO. 3.2.10 HOWEVER, I FIND ON THE EXAMINATION OF THE L OAN CONFIRMATIONS SUBMITTED BY THE APPELLANT THAT THE LENDERS SHRI DILIP A. SHAH WITH THE LOAN AMOUNT OF RS.2,50,000 AND SMT. NEETA S. JAIN, WITH THE LOAN AMOUNT OF RS.5,00,000 HAVE NOT SIGNED LOAN CONFIRMATIONS. THEIR LOAN CONFIRMATION IS SIGNED BY SOMEONE ELSE ON THEI R BEHALF AS FOR. SINCE, THE LOAN CONFIRMATION IS NOT SIGNED BY THE LENDER, THE REQUIREMENT OF ESTABLISHING GENUINENESS OF THE LOAN TRANSACTION IS NOT SATISFIED. THEREFORE, I CONFIRM THE ADDITION OF RS .7,50,000/-. ACCORDINGLY, THE ADDITION IS RESTRICTED TO RS.7,50,000/- AS AGAI NST THE ADDITION OF RS.32,50,000/- MADE BY THE LEARNED AO. 4.4 AGGRIEVED WITH THE ABOVE FINDING OF THE CIT(A) GRANTING R ELIEF TO THE ASSESSEE TO THE EXTENT OF RS.25 LAKHS, THE DEPARTMENT IS IN APPEAL AND AGGRIEVED WITH THE CONFIRMATION OF ADDITION OF RS.7.50 LAKHS, (I.E. RS. 2.50 LAKHS AND RS.5 LAKHS BY MR. DILIP A. SHAH AND SMT.NEET A S. JAIN RESPECTIVELY), THE ASSESSEE IS IN APPEAL. 4.5 SIMILARLY, FOR THE A.Y. 2009-10, THERE ARE 8 CREDITORS. T HE CIT(A) GRANTED RELIEF TO THE TUNE OF RS.40,70,000/- AND CONFIRMED A N AMOUNT OF RS.5,30,000/- INVOLVING 3 CREDITORS NAMELY (1) SHRI DILIP SHAH (H UF) RS.85,000 (2) SMT. REKHA SHAH RS.1,45,000/- AND (3) SMT. VARSHA S.SHAH - RS. 3 LAKHS). CONTENTS OF PARA NO.4.2.5 OF THE OR DER OF CIT(A) ARE RELEVANT. THE REASONS FOR GRANTING RELIEF TO THE ASSE SSEE TO THE TUNE OF RS.40,70,000/- ARE GIVEN BY THE CIT(A) VIDE THE DISCUSSION IN PARA NOS. 4.2.2 TO 4.2.5. FOR THE SAKE OF COMPLETENESS, THE OP ERATIONAL PARA NO.4.2.5 IS EXTRACTED HERE AS UNDER : 4.2.5 FINDINGS ON THIS GROUND OF APPEAL ARE COVERE D BY THE FINDINGS ON GROUND OF APPEAL 2 OF THE A.Y. 2008-09. SAME FINDI NGS WILL BE APPLICABLE HERE. HOWEVER, I FIND ON THE EXAMINATION OF THE LO AN CONFIRMATIONS SUBMITTED BY THE APPELLANT THAT THE LENDERS SHRI DILIP SHAH (HUF) WITH THE LOAN AMOUNT OF RS.85,000 HAS NOT SIGNED LOAN CONFIRMATION. ITS LOAN CONFIRMATION IS SIGNED BY SOMEONE ELSE ON ITS BEHALF AS FOR. SINCE, THE LOAN CONFIRMATION IS NOT SIGNED BY THE L ENDER; THE REQUIREMENT OF ESTABLISHING GENUINENESS OF THE LOAN TRANSACTION IS NOT SATISFIED. THEREFORE, I CONFIRM THE ADDITION OF RS.85,000 WITH RESPECT TO LOAN TO SHRI DILIP SHAH (HUF). FURTHER, SMT. REKHA SHAH HAD STA TED IN HIS STATEMENT 8 DEVENDRA P. SHAH A.YRS. 2007-08 TO 2011-12 RECORDED U/S.131 THAT SHE IS A LADY WITHOUT MEANS. THE APPELLANT HAS NOT CONTROVERTED HER STATEMENT IN HIS WRITTEN SUBMI SSION. THEREFORE, I CONFIRM THE ADDITION OF RS.1,45,000/- WITH RESPECT TO HER LOAN. FURTHER I FIND THAT THE SIGNATURE OF ONE OF THE LENDER SMT. V ARSHA S. SHAH IS DIFFERENT IN HER LOAN CONFIRMATION FILED IN THE A.Y . 2009-10 THAN HER LOAN CONFIRMATION FILED IN THE A.Y. 2010-11. THEREFORE, ACCORDING TO ME, HER LOAN CONFIRMATIONS ARE NOT CREDIBLE. THEREFORE, I CONFIRM THE ADDITION OF RS.3,00,000 PERTAINING TO HER UNSECURED LOAN. AS A RESULT, THE ADDITION IS RESTRICTED TO RS.5,30,000 AS AGAINST RS.46,00,000 A DDED BY THE LEARNED AO ON THIS GROUND. 4.6 SIMILARLY, IN THE A.Y. 2010-11, THE DETAILS ABOUT MAKING A DDITION OF RS.68,10,000/- WERE DISCUSSED IN PARA NO.5.2.1 OF THE CIT(A ) INVOLVING 25 CREDITORS. IN THIS YEAR, THE CIT(A) CONFIRMED SUM OF RS.3 0,000/- INVOLVING VARSHA SHAH. CIT(A) GRANTED RELIEF IN RESPECT OF A DDITION OF RS.67,80,000/-. THUS, IN ALL 3 ASSESSMENT YEARS, THE CREDITO RS IN WHOSE CASES THE AMOUNTS WERE CONFIRMED INCLUDE (1) SHRI DILIP SHAH (HUF), (2) SMT.REKHA SHAH AND (3) SMT.VARSHA S.SHAH. PARA NO.5.2.1 OF THE ORDER OF CIT(A) IS ALSO REPRODUCED HERE AS UNDER : 5.2.1 FINDINGS ON THIS GROUND OF APPEAL ARE COVER ED BY THE FINDINGS ON GROUND OF APPEAL 2 OF A.Y. 2008-09. SA ME FINDINGS WILL BE APPLICABLE HERE. I DO NOT FIND ANY BASIS IN THE AD DITION MADE BY THE LEARNED AO. HOWEVER, I FIND THAT THE SIGNATURE OF ONE OF THE LENDER SMT. VARSHA S. SHAH IS DIFFERENT IN HER LOAN CONFIR MATION FILED IN THE A.Y. 2009-10 THAN HER LOAN CONFIRMATION FILED I N THE A.Y. 2010-11. THEREFORE, ACCORDING TO ME, HER LOAN CONFIRMATIONS ARE NOT CREDIBLE. THEREFORE, I CONFIRM THE ADDITION OF RS.30,000 PERT AINING TO HER UNSECURED LOANS. AS A RESULT, THE ADDITION IS RESTRICTED TO RS.30,000 AS AGAINST RS.68,10,000 ADDED BY THE LEARNED AO. 4.7 WE HEARD BOTH THE PARTIES ON THE ISSUE OF LOAN CREDIT ORS INVOLVING THE ASSESSEE. THE INCONSISTENCIES WITH REFERENCE TO THE CONFIRMATION LETTERS FILED BY THE ASSESSEE, THEIR SIGNATURES, THEIR PAN NUMBERS, LACK OF CREDIT WORTHINESS, ETC ARE ESSENTIALLY THE REASONS FOR CO NFIRMING THE ADDITIONS BY THE CIT(A). FROM THE REVENUE SIDE, THE GRANT OF RELIEF DESPITE THE OFFER OF ADDITIONAL INCOME ON ACCOUNT OF BOGUS INV ESTMENTS IN SHARES BEFORE THE ITSC, THE CIT(A) GRANTED RELIEF ON ACCOU NT OF LOAN CREDITORS WITHOUT GOING INTO THE FACTS. IN ALL OTHER CASES OF CREDITORS, THE DOCUMENTATION FURNISHED BY THE ASSESSEE WAS ACCEPTED B Y THE CIT(A) TO 9 DEVENDRA P. SHAH A.YRS. 2007-08 TO 2011-12 A LARGE EXTENT AND THE CREDITORS WERE FOUND GENUINE. AO IS OF THE O PINION THAT THE BOGUS INVESTORS IN EQUITY CANNOT BE GENUINE LOAN CREDITORS. CIT(A) RELIED HEAVILY ON THE REMAND REPORT FURNISHED BY TH E AO IN THIS REGARD. HOWEVER, CIT(A) REJECTED THE AOS CONTENTION T HAT ALL THE TRANSACTIONS UNDERTAKEN BY THE PERSONS WHOSE TRANSAC TION THAT THE SHARE APPLICATION MONEY CONTRIBUTED TO M/S. BHAGYALAXMI DA IRY PVT. LTD., ARE BOGUS. CIT(A) IS OF THE OPINION THAT NON-GENUINE TRANSACTIONS WERE ALREADY OFFERED BY THE ASSESSEE THROUGH THE ITSC AND IT HAS BECOME FINAL. THEREFORE, IT IS AN ADMITTED FACT THAT THERE ARE COMMON NAMES IN THE LOAN CREDITORS AND THE LIST OF INVESTMENTS IN SHARES OF CERTAIN COMPANIES OF THE GROUP. THIS IS THE ADMITTED POSITION AS E VIDENT FROM THE APPLICATION FILED BEFORE THE ITSC. IT IS THE CLAIM OF THE ASSESSEE THAT THE TRANSACTIONS ENTERED INTO BY SUCH NAMES OF PERSONS CAN BE PARTLY GENUINE WHEN IT COMES TO UNSECURED LOANS AND PARTL Y BOGUS WHEN IT COMES TO INVESTMENT IN SHARES. THIS ASPECT WAS NOT P ROPERLY EXAMINED BY THE CIT(A) APPLYING THE STRICT TESTS WHILE ADJ UDICATING THE ISSUE AND WHILE GRANTING PART RELIEF TO THE ASSESSEE. THIS IS THE CASE OF REVENUE, WHEN IT COMES TO THE UNSECURED LOANS, THAT THE RELIEF WAS LIBERALLY GRANTED BY THE CIT(A) WITHOUT SCRUTINIZING THE LOA N TRANSACTIONS PROPERLY. FURTHER, WE EXAMINED THE DOCUMENTATION FILED BY THE ASSESSEE WITH REGARD TO THE CORRECTNESS OF THE TRANSACTIONS OF LO AN CREDITORS. WE FIND ALL IS NOT WELL WITH THE DOCUMENTATION QUA THE CREDIT WORTHINESS, SIGNATURES ON THE CONFIRMATIONS, PANS ETC. IT IS NOT JUST IFIED AS TO WHY THE CREDITORS FAILED TO GIVE THEIR SIGNATURES ON THE CONFIR MATION LETTERS. IT IS THE PRAYER OF BOTH THE AUTHORITIES BEFORE US THAT THIS ENTIRE ISSUE MAY BE REMANDED TO THE FILE OF AO FOR WANT OF ONE MORE ROUND OF ADJUDICATION AT THE LEVEL OF THE ASSESSING AUTHORITIES. THE REMAND PRO CEEDINGS 10 DEVENDRA P. SHAH A.YRS. 2007-08 TO 2011-12 ALREADY ENTERTAINED BY THE AO WERE NOT DONE IN A PROPE R PERSPECTIVE DUE TO VARIOUS CONSTRAINTS INCLUDING THE ISSUE OF TIME LIMITATION. ON CONSIDERING THE ENTIRE GAMBIT OF THE FACTS AND THE CIRCUMSTANCES, WE ARE OF THE OPINION, AS INFORMED IN THE OPE N COURT, THAT THE ENTIRE ISSUE OF UNSECURED LOANS RAISED IN ALL THE APPE ALS IS REQUIRED TO BE REMANDED TO THE FILE OF AO. 5. THE SECOND ISSUE RELATES TO ADDITION ON ACCOUNT OF AGRICULTURAL INCOME. THIS ISSUE IS RELEVANT FOR THE A.Y. 2008-09 TO 2010-11. 5.1 WE SHALL EXAMINE THE FACTS RELATING TO THIS ISSUE. TAKING THE FACTS FROM THE YEARS RELEVANT TO A.Y. 2008-09. CONTENTS OF PA RA NO.2.5.1 OF THE ORDER OF CIT(A) ARE RELEVANT. ASSESSEE CLAIMED AGRICULT URAL INCOME OF RS.1,41,207/-. THE NET PROFIT FROM THE AGRICULTURAL OPERATION S WORKED OUT TO 88.32% OF THE GROSS AGRICULTURAL INCOME. THIS FIGURE IS WORKED O UT AFTER NETTING THE AGRICULTURAL EXPENSES. IN THE ASSESSME NT PROCEEDINGS, THE AO CAME TO THE CONCLUSION THAT THE AGRICULTURAL INCOM E DISCLOSURE IS INFLATED. AO IS OF THE OPINION THAT SUCH HIGH NET PROFIT RATE IS NOT THERE IN THE AGRICULTURAL OPERATIONS OF THE ASSESSEE FOR THE PAS T 5 YEARS. ON THE BASIS OF THE ASSESSEES OWN RECORDS ON THIS ISSUE, A O HELD THAT NET PROFIT RATE OF 40% OF GROSS AGRICULTURAL INCOME IS REASONABLE . ACCORDINGLY, THE AO DISALLOWED THE BALANCE BASED ON THE IN TERNAL DATA OF THE ASSESSEE. THE NET PROFIT RATES OF THE ASSESSEE FROM THE TOTAL AGRICULTURAL INCOME ARE (1) A.Y. 2007-08-47.78%; (2) A.Y. 2008-09 - 72.49%; (3) A.Y. 2009-10 -44.83%; (4) A.Y. 2010-11 88.32%; AND (5) A.Y. 2011-12 48.05% RESPECTIVELY. AT THE END OF THE PR OCEEDINGS, THE AO DETERMINED THE NET AGRICULTURAL INCOME @40% OF THE GRO SS AGRICULTURAL INCOME. HOWEVER, THE CIT(A) GRANTED ADDITIONAL BENEFIT TO THE ASSESSEE BY STATING THAT THE NET AGRICULTURAL INCOME @65% OF THE 11 DEVENDRA P. SHAH A.YRS. 2007-08 TO 2011-12 GROSS AGRICULTURAL INCOME SHOULD BE REASONABLE. CONTENTS OF PARA NO.2.5.5. OF THE ORDER OF CIT(A) ARE SELF EXPLANATORY AND THE SAME READS AS UNDER : 2.5.5 HOWEVER, I AGREE WITH THE LEARNED AO THAT T HE NET AGRICULTURAL INCOME @88% OF THE GROSS AGRICULTURAL INCOME IS HIGHLY EXCESSIVE AND IS NOT IN ACCORDANCE WITH THE REALITY . IT IS KNOWN THAT AN EXPENSE AS LOW AS @12% OF THE GROSS AGRICULTURAL IN COME IS NOT PREVALENT IN AGRICULTURAL ACTIVITY. THEREFORE, ACCORDING TO ME, THIS IS NOT THE CASE OF THE EXCESS AGRICULTURAL INCOME DECLARED BY THE APPE LLANT BUT IS THE CASE OF SUPPRESSION OF AGRICULTURAL EXPENSES. ACCORDINGLY, IN ABSENCE OF THE EVIDENCE, I ESTIMATE THE APPELLANTS NET AGRICULTUR AL INCOME @65% OF THE GROSS AGRICULTURAL INCOME ON AD-HOC BASIS AS AGAINS T @40% ESTIMATED BY THE LEARNED AO. THE LEARNED AO IS DIRECTED TO WORK OUT THE NET AGRICULTURAL INCOME @65% OF GROSS AGRICULTURAL INCO ME AS DECLARED BY THE APPELLANT. 5.2 BEFORE US, LD. COUNSEL FOR THE ASSESSEE ARGUED THAT T HE FIGURES OF THE ASSESSEE ARE BASED ON THE PRACTICAL EXPENSES OF T HE ASSESSEE. THEREFORE, THE ORDER OF THE CIT(A) SHOULD BE RESTORED. I N THIS REGARD, ASSESSEE FURNISHED EXTRACT OF AGRICULTURAL INCOME AND EXPE NSES INCURRED COPIES OF WHICH ARE PLACED IN PAGES 297 TO 308 OF THE PA PER BOOK. LD. COUNSEL RELIED ON THE DECISION OF PUNE BENCH OF THE TRIBUNA L IN THE CASE OF ARISH SHOUKAT BHAGWAN ITA NOS. 193 TO 203/PUN/20 13, DATED 17-05-2017 AND CONNECTED APPEALS. HOWEVER, CONSIDERING THE ADHOCISM INVOLVED IN THESE MATTERS, ASSESSEE LEFT THE ISSUE TO THE WISDOM OF THE BENCH. 5.3 WE HEARD BOTH THE SIDES AND PERUSED THE ORDERS O F THE REVENUE. IT IS THE CASE WHERE THE ASSESSEE MADE A CLAIM OF AGRICULTUR AL INCOME OVER THE YEARS IN THE PAST AS WELL AS IN THE SUBSEQUENT ASSE SSMENT YEARS. THE CLAIM OF THE ASSESSEE WAS ACCEPTED WITHOUT ANY CHAN GE IN THE CLAIMS OF THE ASSESSEE. IT IS FOR THE FIRST TIME THE AO DISTURBE D THE CLAIM OF THE ASSESSEE RESTRICTING THE AGRICULTURAL INCOME TO 40% OF T HE GROSS AGRICULTURAL INCOME LEAVING THE REST OF 60% TOWARDS THE RE LATED AGRICULTURAL EXPENDITURE INCURRED FOR EARNING SUCH AGRICULTU RAL INCOME. 12 DEVENDRA P. SHAH A.YRS. 2007-08 TO 2011-12 AGAINST THE SAME, THE CIT(A) INCREASED THE AGRICULTURAL INC OME FROM THE SAID 40% TO 65% AND RESTRICTED THE AGRICULTURAL EXPENDITU RE TO THE BALANCE OF 35%. WHILE IT IS THE DECISION OF THE LOWER AUTHORIT IES, LD. COUNSEL FOR THE ASSESSEE RELIED HEAVILY ON THE ORDER OF THE TRIBUNA L IN THE CASE OF ARISH SHOUKAT BAGWAN VS. DCIT (SUPRA). IN THAT C ASE, THE CROPS GROWN IN THE FIELDS RELATE TO VARIOUS CEREALS, SUGARCANE, V EGETABLES ETC. WE FIND THERE IS REQUIREMENT OF EXAMINING THE APPLICABILITY OF T HE SAID DECISION OF THE TRIBUNAL TO THE FACTS OF THE PRESENT CASE . WE FIND LD. COUNSEL FOR THE ASSESSEE HAS GIVEN CONCESSION ON DECIDING THE ISSUE AS APPROPRIATE. 5.4 WE FIND, THE FOLLOWING ARE THE RATIOS DECIDED BY THE REVE NUE AUTHORITIES IN THEIR RESPECTIVE ORDERS : AO NET AGRICULTURAL INCOME IS ASSESSED AT 40% OF THE G ROSS AGRICULTURAL INCOME CIT(A) NET AGRICULTURAL INCOME IS ASSESSED AT 65% OF THE GROSS AGRICULTURAL INCOME ASSESSEE-NET AGRICULTURAL INCOME IS ASSESSED AT 88% OF TH E GROSS AGRICULTURAL INCOME CONSIDERING THE ADHOCISM INVOLVED IN THIS MATTER, WE FIND THE AVERAGE OF ALL THE ABOVE COMES VERY CLOSE TO THE DECISION OF 65% AS HELD BY THE CIT(A) IN HIS ORDER. THEREFORE, WE ARE OF THE OPINION THAT THE DECISION OF CIT(A) IS APPROPRIATE AND IT DOES NOT CALL FOR ANY INTERFERE NCE. ACCORDINGLY, THE RELEVANT GROUNDS RAISED BY THE ASSESSEE ARE DISM ISSED. 6. THE THIRD ISSUE RELATES TO UNEXPLAINED EXPENDITURE ON ACCOUNT OF ELECTIONS. THIS ISSUE IS RELEVANT FOR THE A.YRS. 2007-08 AND 2010- 11. RELEVANT FACTS INCLUDE THAT THE AO MADE ADDITION OF RS.3.50 CRORES IN THE A.Y. 2007-08 AND RS.1,58,06,000/- FOR THE A.Y. 2010-11. TH ERE WAS SEARCH AND SEIZURE ACTION ON THE ASSESSEE U/S.132 OF TH E ACT ON 04-02- 2011. DURING THE SEARCH, CERTAIN PAPERS WERE SEIZED FROM THE OFFICE 13 DEVENDRA P. SHAH A.YRS. 2007-08 TO 2011-12 PREMISES OF M/S. PARAG MILK AND MILK PRODUCTS PVT. LTD. ANA LYSIS OF THE WRITINGS ON THE SAID PAPERS REVEALED THAT THE SAME PERT AINS TO THE DETAILS OF THE EXPENDITURE INCURRED DURING THE ELECTIONS OF ZILLA PAR ISHAD AND PANCHAYAT. IT APPEARS THAT THE ASSESSEE INCURRED THE SAID EXPENDITURE ON BEHALF OF THE CANDIDATES WHO BELONG TO THE NATIONAL CON GRESS PARTY (NCP) CONTESTING FROM AMBEGAON CONSTITUENCY OF ZUNNAR BLOC K. THERE WAS RECORDING OF STATEMENT ON OATH FROM SHRI BANGAR, ACC OUNTANT OF THE ASSESSEE. ACCORDING TO HIS STATEMENT RS.3.50 CRORES WAS SPENT IN CASH (PARA NO. 2.2.5 OF THE ORDER OF CIT(A) AND PARA 5 OF THE AS SESSMENT ORDER). IN RESPONSE TO QUESTION NO.6, MR. BANGAR RELYING ON THE SUMMARY SHEET, STATED THAT THE TOTAL EXPENDITURE ON TH E SAID ELECTIONS AMOUNTS TO RS.4,03,95,768/-. ON THE SAID PAPERS, CASH REC EIVABLE AND RECEIVED FROM DILIP A. SHAH IN CASH TOTAL TO RS.3.50 CRORES. WHEN THE QUESTION WAS RAISED ABOUT THE SOURCE OF THIS CASH RECEIVABLE AND RE CEIVED ASSESSEE DID NOT HAVE EXPLANATION. ACCORDINGLY, THE AO T REATED THE SAME AS UNEXPLAINED EXPENDITURE U/S.69C OF THE ACT IN HIS HANDS . AT THAT POINT OF TIME, APPLICATION BEFORE THE ITSC WAS NOT FINALIZED. THEREFORE, THE AO INVOKED THE PROVISIONS OF SECTION 69C OF THE ACT A ND MADE ADDITION OF RS.3.50 CRORES. CONTENTS OF PARA NO.5 OF THE A SSESSMENT ORDER ARE RELEVANT. 6.1 SIMILARLY, AN AMOUNT OF RS.1,58,06,000/- IN THE A.Y. 2010-11 WAS ADDED. THIS AMOUNT CONSTITUTES SUM OF RS.1 CRORE, SUM OF RS.56,06,0000/- AND RS.4 LAKHS. FURTHER, SUM OF RS.4 LAKHS WAS ADDED ON THIS ACCOUNT U/S.69C OF THE ACT DURING THE YEA R FOR SIMILAR REASONS. CONTENTS OF PARA NO.7 OF THE ASSESSMENT ORDER ARE RELEVA NT. 6.2 DURING THE FIRST APPELLATE PROCEEDINGS, ASSESSEE MADE VARIOUS SUBMISSIONS STATING THAT THE SO FAR AS THE DETAILS OF EXPE NDITURE THE TOTAL 14 DEVENDRA P. SHAH A.YRS. 2007-08 TO 2011-12 UNEXPLAINED EXPENDITURE WORKS OUT TO RS.18.50 CRORES INV OLVING ENTIRE GROUP CASES OF PARA MILK AND MILK PRODUCTS PVT. LTD. IT IS SUBMITTED THAT THE SAID COMPANY FILED AN APPLICATION BEFORE THE ITSC U/S.2 45 OF THE ACT AND FINALLY AN AMOUNT OF RS.10 CRORES WAS OFFERED AS ADDITIO NAL INCOME. DURING THE ASSESSMENT PROCEEDINGS BEFORE THE ITSC, ASSE SSEE OFFERED FURTHER ADDITIONAL INCOME OF 4 CRORES MAKING THE TOTAL ADDIT IONAL INCOME OF RS.14 CRORES AS AGAINST THE EXPENDITURE OF RS.18.84 CRO RES RECORDED IN THE SEIZED MATERIAL. AO DID NOT CONSIDER THE SAID DISCLOSUR E BEFORE THE ITSC AND MADE ADDITIONS. IN THIS REGARD, WRITTEN SUBMISSIO NS OF THE ASSESSEE ARE EXTRACTED IN PARA NO.2.2.3 OF THE IMPUGNED O RDER. IN THE SAID WRITTEN SUBMISSIONS, ASSESSEE MADE A REQUEST TO THE CIT(A) TO GIVE CREDIT OF RS.14 CRORES AGAINST THE ADDITIONS MADE IN THE IN DIVIDUAL MEMBERS. CIT(A) CONSIDERED THE ABOVE SUBMISSIONS OF THE A SSESSEE AND GAVE A FINDING IN FAVOUR OF THE ASSESSEE AND DELETED THE ADDITION OF RS.3.50 CRORES AS PER THE DISCUSSION GIVEN IN PARA NO.2.2.4 OF THE IMPUGNED ORDER AND THE IS EXTRACTED HERE AS UNDER : 2.2.4 I HAVE CONSIDERED THE FACTS AND ARGUMENTS O F THE APPELLANT. I HAVE ALSO GONE THROUGH THE ORDER OF THE HONOURABL E SETTLEMENT COMMISSION. I FIND IN THE PARA 10.4 OF THE ORDER OF THE HONOURABLE SETTLEMENT COMMISSION THAT THE APPELLANT HAD INCURR ED UNACCOUNTED EXPENDITURE TOTALING RS.5.12 CR. IT HAS BEEN STATED THE APPELLANT GROUP HAD OFFERED INCOME OF RS.14 CR IN ITS SETTLEMENT APPLIC ATION ON ACCOUNT OF THE UNACCOUNTED EXPENDITURE. SUBSEQUENTLY, THE APPELLA NT OFFERED THE ADDITIONAL INCOME OF RS.4 CR ON THIS ACCOUNT. ACCO RDINGLY, I FIND THAT THIS ISSUE IS COVERED BY THE ORDER OF THE SETTLEMENT COMMI SSION. THEREFORE, I DELETE THE ADDITION OF RS.3,50,00,000 MADE BY THE L EARNED AO. 6.3 BEFORE US, LD. COUNSEL FOR THE ASSESSEE MADE WRITTEN S UBMISSIONS WHICH IS FOUND VERY CLOSE TO THE WRITTEN SUBMISSIONS MADE BEFORE THE CIT(A). CONTENTS OF PARA NO.4.4 TO 4.8 OF THE SAID WRITTEN SUBMISSIONS ARE EXTRACTED HERE AS UNDER : 4.4 IN SUPPORT OF OUR ABOVE CONTENTION, WE ALSO WI SH TO DRAW KIND ATTENTION OF YOUR HONOUR TO PARA 18 ON PAGE 29 AND 30 OF THE ORDER OF SETTLEMENT COMMISSION WHEREIN OUR REQUEST GIVING CRE DIT OF RS.14 CRORE AGAINST ADDITION MADE IN INDIVIDUAL MEMBERS AMOUNTI NG TO RS.9.90 CRS 15 DEVENDRA P. SHAH A.YRS. 2007-08 TO 2011-12 WAS MADE. THE HONOURABLE COMMISSION HAS ACCEPTED O UR REQUEST (REFER PARA 18 ON PAGE 29 OF THE ORDER, PAGE 101 AND 102 O F PB-1) PHOTO COPY OF THE ORDER IS ENCLOSED (REFER PAGE NO. 73 TO 111 OF PB-1) 4.5 IN THE CIRCUMSTANCES, SINCE THE ISSUE IS COVERE D BY THE SETTLEMENT COMMISSION THE ADDITION MADE BY THE AO ON THE SAME I SSUE AND THE SEIZED PAPERS WILL AMOUNTS TO DOUBLE ADDITION WHICH IS NOT PERMISSIBLE AND NOT JUSTIFIED IN LAW. CIT(A) HAS DELETED THE AD DITION MADE BY THE AO. 4.6 THE SAID PAPERS HAVE DETAILS OF EXPENSES INCURR ED AND ALSO THE PERSONS WHO CONTRIBUTED. THE DEPARTMENT HAD QUANTI FIED A SUM OF RS.9.90 CRORES AS BEEN CONTRIBUTED BY THE GROUP MEM BERS DEVENDRA PS RS.5.12 CRORES, PRITI S. RS.0.06 CRORES AND NETRA S HAH RS.4.72 CRORES. TO COVER UP WHOLE OF THE SAID AMOUNT, THE GROUP COMPAN Y HAD CONSIDERED A SUM OF RS.10 CRORES AS CONTRIBUTED BY IT WHICH IS R ECORDED AS HAVING CONTRIBUTED IN NAMES OF THREE INDIVIDUALS OF THE GR OUP. 4.7 ON FINAL SETTLEMENT A FURTHER SUM OF RS.4 CRORE S WAS ADMITTED AS CONTRIBUTED BY THE GROUP. 4.8 THEREFORE, NO ADDITION IS CALLED FOR IN THE HAN DS OF THE ASSESSEE. FROM THE ABOVE, IT IS EVIDENT THAT THE TOTAL ADDITION MADE IN THE ASSESSEES CASE AMOUNTS TO RS.5.12 CRORES INVOLVING 3 AS SESSMENT YEARS AND THE PRAYER OF THE ASSESSEE IS THAT THE ABOVE ADD ITION STANDS COVERED BY THE DISCLOSURE OF RS.14 CRORES GIVEN IN THE ENTIRE GR OUP CASE OF PARAG MILK AND MILK PRODUCTS PVT. LTD. 6.4 ON THE OTHER HAND, LD. DR FOR THE REVENUE SUBMITTED THAT THERE IS NO COMPREHENSIVE DETAILS AS TO THE ASSESSEE-WISE BIFURCAT ION OF THE UNEXPLAINED EXPENDITURE OVER THE ASSESSMENT YEARS. BRIN GING SUBSTANTIAL REFERENCE TO THE ASSESSEES UNDER CONSIDERA TION, LD. DR SUBMITTED THAT AGAINST THE ADDITION OF RS.5.12 CRORES INVOLV ING 3 ASSESSMENT YEARS THERE IS NO CLARIFY IN THE ORDER OF THE ITSC IF THE ENTIRE AMOUNT STANDS OFFERED AS ADDITIONAL INCOME IN THE HANDS OF THE ASSESSEE OR NOT. HE ALSO ANALYSED THE FACT RELATING TO THE QUANT ITATIVE DETAILS OF DISCLOSURE BEFORE THE ITSC AND COULD NOT ESTABLISH THAT T HE ASSESSMENT YEAR SPECIFIC AMOUNT OF RS.14 CRORES. HE ALSO MENTIONED TH AT THE TOTAL EXPENDITURE IS RS.18.86 CRORES OFFER OF THE ASSESSEE IS ONL Y RS.14 CRORES. 16 DEVENDRA P. SHAH A.YRS. 2007-08 TO 2011-12 LD. DR COULD NOT EXPLAIN ABOUT THE BALANCE OF RS.4.46 LAKHS STANDS TAXED AND THE ASSESSMENT YEAR DETAILS. 6.5 WE HEARD BOTH THE SIDES AND PERUSED THE ORDERS OF THE REVENUE AND FACTS BEFORE THE ITSC. THE SEIZED DOCUMENTS REFLECT THE ELECTION EXPENDITURE OF RS.18.86 CRORES. THE FAMILY MEMBERS OF THE ASSESSEE ARE ALSO UNDISPUTEDLY INVOLVED IN THIS EXPENDITURE. ASSESSEE OFFERED RS.14 CRORES IN TWO INSTALMENTS ( RS.10 CR. + RS.4 CR.) IN THE APPLI CATION BEFORE THE ITSC AND THE SAME HAS BEEN ACCEPTED BY THE ITSC . THUS OFFER OF ADDITIONAL INCOME WAS MADE IN THE HANDS OF THE COMPANIES. ADDITIONAL INCOME WAS NOT OFFERED IN THE HANDS OF THE NAMES APPEAR ING IN THE SEIZED PAPERS. GOING TO THE BIFURCATION OF THIS CLAIM OF EXP ENDITURE OUTSIDE THE BOOKS OF ACCOUNT, THE CASE OF THE AO IS THAT A SUM OF RS.5.12 CRORES WAS INCURRED BY DEVENDRA P. SHAH (ASSESSEE). IT IS ALSO THE CLAIM OF THE ASSESSEE THAT THE ENTIRE UNEXPLAINED EXPENDITURE ON ELECTIONS OF RS.5.12 CRORES WAS OWNED UP BY THE COMPANY AND PAID THE TAXES AND THE SAME IS EVIDENT FROM THE ORDER OF ITSC (SUPRA). BUT IT IS N OT CLEAR AS TO WHETHER THE ENTIRE SUM OF RS.5.12 CRORES IS TAXED EFFECTIVE LY IN THE HANDS OF THE ASSESSEE OR NOT AND THE REASONS FOR OFFERING THE SAME IN THE HANDS OF THE COMPANY ARE SPECIFIED. WHEN THE QUESTIONS WAS RAIS ED BY US ON THIS ISSUE, BOTH THE REPRESENTATIVES OF THE REVENUE AND ASSESSEE SUBMITTED THAT THIS IS A MATTER OF FACT, WHICH REQUIRE SCRU TINY OF THE DOCUMENTS, DISCLOSURES MADE BY THE OTHER FAMILY MEMBERS AS UNACCOUNTED EXPENDITURE ON ACCOUNT OF ELECTIONS, THE APP LICATION BEFORE THE ITSC, THE ORDER OF ITSC ETC. 6.6 ON CONSIDERING THE SAME, AND CONCURRING WITH THE COUN SELS REQUEST, THE MATTER STANDS REMANDED TO THE FILE OF AO FOR EXAMINATION OF THE FACTS AND FOR WANT OF A FRESH ORDER ON THIS ISSUE. AO IS DIRECTED TO 17 DEVENDRA P. SHAH A.YRS. 2007-08 TO 2011-12 DECIDE THE ISSUE IN THE LIGHT OF THE SEIZED PAPERS ON ONE SIDE AND THE ORDER OF ITSC, DISCLOSURES MADE BY THE FAMILY MEMBERS, ON THE OTHER SIDE GIVING EFFECT TO THE SAME AFTER HEARING THE ASSESSEE . AO SHALL NOTE THAT ORDER OF SETTLEMENT OF ITSC IS BINDING ON THE INCOME -TAX AUTHORITIES AND NOT ON THE TRIBUNAL. WITH THESE DIRECTIONS, THIS ENTIR E ISSUE OF UNEXPLAINED EXPENDITURE ON ELECTIONS AMOUNTING TO RS.5.12 CRORES STANDS REMANDED TO THE FILE OF AO FOR FRESH ADJUDICATION A ND FOR PASSING A SPEAKING ORDER. ACCORDINGLY, THE RELEVANT GROUNDS RA ISED BY THE ASSESSEE IN THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. 7. UNEXPLAINED INVESTMENT IN LAND RS. 10 LAKHS. THIS ISSUE IS RELEVANT FOR THE A.Y. 2007-08. RELEVANT FACTS INCLUDE THAT THE SEARCH ACTION RESULTED IN THE SEIZURE OF BUNDLE NO.7 (CONTENTS OF PAGES 12 AND 13) RELATING TO THE RECEIPT ON THE LETTER HEAD OF SRUSTI SANGAM WHICH BEARS THE NAME OF THE ASSESSEE. ACCORDING TO THE CONT ENTS, THE ASSESSEE HAS GIVEN SHORT TERM LOAN TO SRUSTI SANGAM ON 28-04-20 06 AND THERE IS SEIZURE OF CHEQUE RECEIVED BY THE ASSESSEE FROM THE SRU STI SANGAM. DURING THE RECORDING OF A STATEMENT ON OATH, IT IS ADMITTE D THAT THE ASSESSEE PAID RS.10 LAKHS AS LOAN TO SRUSTI SANGAM AND T HE SAME REMAINED UNPAID. AO PROPOSED TO MAKE THE SAME AS UNEX PLAINED INVESTMENT IN THE LOAN. IN RESPONSE, ASSESSEE FURNISHED A REPLY STATING THAT THE CHEQUE RECEIVED FROM THE BANK WAS NEVER SUBM ITTED BY SRUSTI SANGAM. EVENTUALLY, THE AO CONSIDERED THE SUBMISSION OF THE ASSESSEE AND MADE ADDITION OF RS.10 LAKHS STATING THE FOLLOWING : THE SUBMISSIONS OF ASSESSEE IS DULY CONSIDERED BUT NOT ACCEPTABLE. ASSESSEE NEITHER DURING SEARCH NOR DURING ASSESSMEN T PROCEEDINGS, STATED THAT DISCLOSURE MADE ON THIS ISSUE WAS NOT C ORRECT. FURTHER, ASSESSEE MADE NO COMMENTS ON PAGE NO.12, WHICH CONT AINS. RECEIPT ON THE LETTER LEAD OF SRUSHTI SANGAM IN THE NAME OF DE VENDRA SHAH AGAINST SHORT TERM LOAN DATED 28.04.06 AT RS.10 LAKHS. INF ERENCE IS DRAWN THAT CASH WAS PAID BY ASSESSEE TO SRUSHTI SANGAM AND THE SAME IS ALSO ADMITTED BY ASSESSEE. ACCORDINGLY, RS.10,00,000/- IS ADDED BACK IN THE INCOME OF ASSESSEE BEING UNEXPLAINED EXPENDITURE. PENALTY PROCEEDINGS 18 DEVENDRA P. SHAH A.YRS. 2007-08 TO 2011-12 U/S.271(1)(C) IS INITIATED SEPARATELY FOR CONCEALME NT OF PARTICULARS OF INCOME. 7.1 DURING THE FIRST APPELLATE PROCEEDINGS, ASSESSEE MADE VARIOUS SUBMISSIONS STATING THAT THE ASSESSEE PAID RS.10 LAKHS TO WARDS THE LOAN AND THE LOAN WAS NEVER RETURNED. EVENTUALLY, THE SAID LO AN HAS BECOME IRRECOVERABLE RESULTING IN BAD DEBT AND, THEREFORE, THE ASS ESSEE REQUESTED TO ALLOW THE CLAIM AS DEDUCTION AS BAD DEBT. HE RELIED ON THE HIGH COURT JUDGMENT IN THE CASE OF INDO AIRWAYS PVT. LTD. 349 ITR 8 5 (DELHI) AND OTHERS. EVENTUALLY, THE CIT(A) CONFIRMED THE ADDITION MADE BY THE AO AS PER THE DISCUSSION GIVEN IN PARA NO.2.4.4. OF HIS ORDER. IT IS THE DECISION OF CIT(A) THAT ASSESSEE RETRACTED THE DISCLOSURE OF RS.10 LAKHS ORIGINALLY OFFERED DURING THE SEARCH ACTION AND ASSESSEE DID NOT OFFE R THE SAME IN THE RETURN FILED U/S.153A OF THE ACT. HE REJECTED THE AS SESSEES SUBMISSION THAT THE AMOUNT IS NOT RECOVERABLE. RELEVANT OPERATIONAL PARA NO.2.4.5. OF THE ORDER OF CIT(A) IS EXTRACTED HERE AS UNDER : 2.4.5 I DO NOT FIND ANY LOGIC IN THE APPELLANTS ARGUMENTS. ACCORDING TO ME, THE CENTRAL ISSUE HERE IS; WHETHER THE LOAN OF RS.10 LAKHS ADVANCED BY THE APPELLANT IS ACCOUNTED OR NOT. IT HAS NOTHING TO DO WITH REPAYMENT CAPACITY OF THE SHRUSHTI SANGAM OR THE AP PELLANT NOT ENCASHING THE CHEQUE ISSUED BY SHRUSHTI SANGAM. IT IS CLEAR THAT THE APPELLANT HAD ADVANCED LOAN OF RS.10 LAKHS TO SHRUS HTI SANGAM. THE APPELLANT HAS NOT BEEN ABLE TO ESTABLISH THAT THE L OAN WAS ADVANCED OUT OF HIS ACCOUNTED SOURCES OF INCOME. IN THESE CIRCU MSTANCES, THE APPELLANT HAS NOT OFFERED ANY ARGUMENT OR BASIS ON WHICH, REL IEF CAN BE GRANTED TO HIM. ACCORDINGLY, I CONFIRM THE ADDITION OF RS.10 LAKHS MADE BY THE LEARNED AO TO HIS TOTAL INCOME. 7.2 BEFORE US, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE SAID AMOUNT BECAME IRRECOVERABLE AND THEREFORE, THE ASSESSEE SHOULD BE GIVEN A BENEFIT OF BAD DEBT. IN THIS REGARD, HE FILED THE W RITTEN SUBMISSIONS AND PRAYED FOR DELETION OF THE ADDITION : 6.1 DISCUSSION ABOUT ADDITION IS MADE AT PARA 08 O N PAGE NO.14 AND 15 OF THE ASSESSMENT ORDER. THE ADDITION IS MADE O N THE BASIS OF LOOSE PAPERS FOUND AT BUNDLE NO.7 (PAGE NO.12 AND 13, REF ER PAGE 112-114 OF THE PB-1) DURING THE COURSE OF SEARCH AT THE OFFICE OF BHAGYALAXMI DAIRY AT 19 DEVENDRA P. SHAH A.YRS. 2007-08 TO 2011-12 MANCHAR. THE LD. AO HAS MADE THE ADDITION ONLY ON THE GROUND THAT APPELLANT HAD DISCLOSED THIS AMOUNT U/S.132(4) AND FURTHER PAGE NUMBER 12 OF THIS BUNDLE IS THE RECEIPT ISSUED IN FAVOUR O F THE APPELLANT. 6.2 ADDITION MADE BY THE LD. AO IS INCORRECT SINCE WHILE GIVING REPLY U/S.132(4) THE APPELLANT HAD STATED THAT THE SAID A MOUNT IS UNRECOVERABLE AS THE PARTY IS INSOLVENT. THEREFORE, IF PART OF T HE STATEMENT IS CONSIDERED AS CORRECT AND RELIED UPON BY THE AO, THEN THERE IS NO REASON TO DISREGARD THE OTHER PART OF THE STATEMENT. 6.3 IT IS SETTLED LAW THAT THE STATEMENT HAS TO BE TAKEN AS A WHOLE AND THE AO IS NOT JUSTIFIED IN IGNORING CERTAIN ANSWERS WHICH WERE IN FAVOUR OF THE ASSESSEE (REFER ITAT DECISION GHANSHAMBHAI THAK KAR 56 TTJ 460 AND CHUTURVEDI & PITHISARIA PAGE 4907. 6.4 THE SEIZED PAPER PAGE NO.13, WHICH IS ORIGINAL CHEQUE GIVEN BY THE SAID PARTY, WHICH IS NOT ENCASHED (REFER PAGE NO.11 4 OF PB-1) AND THEREFORE THIS EVIDENCE ALSO SUPPORTS THE CONTENTIO N OF THE APPELLANT THAT THE SAID AMOUNT IS LOST AND IS ALLOWABLE AS DEDUCTI BLE. THUS, IN TOTALITY EFFECT OF SEIZED PAPERS NOTHING CAN BE ADDED IN THE HANDS OF APPELLANT. 6.5 IT IS SUBMITTED BEFORE YOUR HONOUR THAT THE SEI ZED MATERIAL HAS TO BE CONSIDERED IN ITS ENTIRETY, INCLUDING THOSE WHIC H FAVOUR THE ASSESSEE, RELIANCE WAS PLACED ON THE DECISION OF HONBLE DELH I HIGH COURT IN THE CASE OF CIT VS. INDEO AIRWAYS PVT. LTD. 349 ITR 85 (DEL). 6.6 AS THE AMOUNT IS IRRECOVERABLE, IT IS A LOSS WH ICH IS ALLOWABLE AS DEDUCTION AND THEREFORE NET ADDITION CALLED FOR IS NIL. IT IS SUBMITTED THAT THE ADDITION MADE BY AO AND CO NFIRMED BY THE CIT(A) BE DELETED. 7.3 ON THE OTHER HAND, LD. DR RELIED ON THE ORDERS OF AO/CIT(A). 7.4 WE HEARD BOTH THE SIDES AND PERUSED THE ORDERS OF THE REVENUE AND THE WRITTEN SUBMISSIONS OF THE ASSESSEE. WE FIND THE CASE OF THE ASSESSEE IS THAT AMOUNT OF RS.10 LAKHS WAS PAID AND THE SAME WAS NE VER RETURNED BY THE ASSESSEE AND THEREFORE, IT HAS BECOME A BAD DEBT. FOR ALLOWING THE BAD DEBT, THERE IS NEED FOR FULFILLING CERTAIN CONDIT IONS BY THE ASSESSEE. IT HAS TO BE EXAMINED IF THE ASSESSEE IS A FINANCIER AND IS REGULARLY ENGAGED IN THE BUSINESS OF MONEY LENDING/FINANCING ACTIVITIES. THIS ASPECT WAS NOT EXAMINED BY THE LOWER AUTHORITIES BE FORE REJECTING THE CLAIM OF THE ASSESSEE. THERE IS ALSO NEED FOR EXAMINING THE DEBTOR AND THE REASONS FOR NOT RETURNING THE SAID PAYMENT OF R S.10 LAKHS. THEREFORE, CONSIDERING THE PECULIARITY OF THESE FACTS, WE ARE OF THE O PINION 20 DEVENDRA P. SHAH A.YRS. 2007-08 TO 2011-12 THAT THIS ISSUE SHOULD ALSO BE REMANDED TO THE FILE OF AO WITH A DIRECTION TO EXAMINE THE STATUS OF THE ASSESSEE IF HE IS ENGAGED IN THE BUSINESS OF MONEY LENDING AND CIRCUMSTANCES ON THE DEBTOR FOR NOT R ETURNING THE AMOUNT TO THE LENDER. AO SHOULD ALSO EXAMINE THE APPLICA BILITY OF DECISIONS CITED BY THE LD. COUNSEL FOR THE ASSESSEE. ACC ORDINGLY, THE RELEVANT GROUNDS RAISED BY THE ASSESSEE IN THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. 8. UNEXPLAINED INVESTMENT IN FDRS RS.2,30,770/-. THIS ISSUE IS RELEVANT FOR THE A.Y. 2007-08. RELEVANT FACTS INCLUDE THAT THE AO DISCUSSED THIS ISSUE IN PARA NO.6 OF THE ASSESSMENT YEAR. THERE IS REFERENCE TO THE INCRIMINATING DOCUMENT SEIZED DURING THE SURVEY ACTION CONTAINING THE DETAILS OF THE FDRS MADE BY THE PARAG GRO UP OF ASSESSEES. AO TABULATED THE ENTIRE FD RECEIPTS AND THE TOTAL OF SUC H FDRS WORKS OUT TO RS.30,89,850/-. THESE FDRS ARE OWNED UP BY 5 OF THE FAMILY MEMBERS : NAME AMOUNT OF FDS DEVENDRA SHAH (HUF) 230970.00 PRAKASH SHAH (HUF) 1315303.00 RAJANI SHAH 1168174.00 PARAG SHAH (HUF) 200000.00 PRITAM SHAH (HUF) 175403.00 TOTAL 3089850.00 FROM THE ABOVE, IT IS EVIDENT THAT THE SHRI DILIP SHAH (HUF) -ASSESSEE OWNS FDRS AMOUNTING TO RS.2,30,970/-. 8.1 DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE MAD E SUBMISSIONS AGAINST MAKING OF ANOTHER ADDITION ON THIS ACCO UNT. AO CONSIDERED THE SAME AND REJECTED FOR THE FOLLOWING REASONS : 3. FIXED DEPOSITS WERE MADE IN THE NAME OF INDIVID UAL AND NOT IN THE NAME OF HUF, AND BOTH ARE SEPARATE LEGAL ENTITIES F OR INCOME TAX PURPOSE. IF, THE SOURCE OF INCOME OF HUF THAN INVESTMENT SHO ULD HAVE MADE IN HUF STATUS ONLY. 21 DEVENDRA P. SHAH A.YRS. 2007-08 TO 2011-12 THEREFORE, IT IS APPARENT THAT THE CLAIM OF ASSESSE E HAS NO FORCE AND IT IS MERELY AN AFTERTHOUGHT EXERCISE. DURING A.Y., ASSE SSEE HAS MADE INVESTMENT IN FIXED DEPOSITS OF RS.2,30,970/- AND T HE SAME IS NOT REFLECTED IN REGULAR BOOKS. ACCORDINGLY, RS.2,30,970/- IS TR EATED AS UNDISCLOSED INCOME OF THE ASSESSEE AS UNEXPLAINED INVESTMENT IN FIXED DEPOSITS U/S.69 OF THE ACT. EVENTUALLY, THE AO MADE ADDITION OF RS.2,30,970/- INVOKING TH E PROVISIONS OF SECTION 69 OF THE ACT. AO HELD THAT THE INVE STMENTS ARE NOT RECORDED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. AO T REATED THE SAME AS UNDISCLOSED INCOME OF THE ASSESSEE AS UNEXPLAINED INVES TMENT IN FDS. 8.2 IN THE FIRST APPELLATE PROCEEDINGS, ASSESSEE MADE VA RIOUS SUBMISSIONS AND DISCUSSED THE DETAILS OF FDS MAINTAINED BY THE ASSESSEE IN DIFFERENT BANKS AND PAT SANSTHAS. CIT(A) NOTE D THAT THE ASSESSEE NEVER FILED THE RETURNS IN HUF CAPACITY BEFORE T HE SEARCH ACTION. NO FINANCIAL STATEMENTS OF THE HUF WERE ALSO FILED. CIT(A) OBSERVED THAT THE FDS ARE HELD IN THE INDIVIDUAL NAMES N OT IN THE NAME OF THE HUF. CIT(A) EXTRACTED THE WRITTEN SUBMISSIONS OF TH E ASSESSEE IN PARA NO.2.3.3. AND ALSO CONSIDERED THE ADDITIONAL EVIDENCES F URNISHED BY THE ASSESSEE BEFORE HIM. CIT(A) CALLED FOR THE REMAND REPO RT ON THE SAID DOCUMENTS. CIT(A) ALSO CALLED FOR THE COUNTER COMMENTS FRO M THE ASSESSEE ON THE FINDINGS OF THE AO. EVENTUALLY, THE CIT(A ) DISCUSSED THIS ISSUE IN PARA NO.2.3.6 TO 2.3.8 AND REJECTED THE ASSESSEE S CONTENTION BEFORE CONFIRMING THE ADDITIONS OF RS.2,30,970/-. CIT(A) NOTED IN THESE PARAS THAT THE ASSESSEES REQUEST FOR SUBSCRIBING OF TH E ADDITIONAL INCOME AGAINST THE INVESTMENTS ALSO RULED OUT. HE ALSO RU LED OUT THE TELESCOPING OF THE AMOUNT TOWARDS THE INCOME OFFERED. HE ALSO DISCUSS ED THE POSSIBILITY OF MATURED FDS AS SOURCE OF INCOME FOR THE FRESH FDS MADE SUBSEQUENTLY. NEVERTHELESS, THE ABSENCE OF CASH FLO W STATEMENT SHOWING SUCH MATURITY OF FDS TO ACT AS SOURCE FOR MAKING OF THE FRESH 22 DEVENDRA P. SHAH A.YRS. 2007-08 TO 2011-12 FDS QUA THE TIME FACTOR AND OBSERVED THAT THE REQUIREM ENT OF CASH FLOW STATEMENTS WHICH WERE NOT FURNISHED BEFORE HIM AS PER TH E DISCUSSION GIVEN IN PARA NO.2.3.7 IN HIS ORDER. EVENTUALLY, THE CIT(A) CO NFIRMED THE ADDITION AS PER THE DISCUSSION GIVEN IN PARA NO.2.3.8. THE SAID OPERATIONAL PARA IS EXTRACTED HERE FOR THE SAKE OF COMPLETENESS : 2.3.8 THE APPELLANT HAS NOT FURNISHED THE CASH-FL OW STATEMENT, DATES OF THE MATURITY OF THE OLD FDS AND DATE OF RE INVESTMENT IN THE NEW FDS. I FIND THE APPELLANTS DEFENCE IS HALF-HEARTE D. IN THE BEGINNING, THE APPELLANT CONTENDED THAT THE INVESTMENT BELONGS TO HIS HUF AND NOW, HE HAS STATED THAT IT IS THE SAME FUNDS, WHICH WERE RO TATED IN THE FDS WITHOUT SUPPORTING THIS CONTENTION WITH THE EVIDENC E. THEREFORE, I DO NOT CONSIDER HIS EXPLANATION ON THE SOURCE OF THE INVES TMENT MADE IN THE FDS TO BE SATISFACTORY IN TERMS OF THE PROVISIONS OF TH E SECTION 69A WITHOUT THE CASH-FLOW STATEMENT. I CONFIRM THE ADDITION MADE B Y THE LEARNED AO ON THIS ACCOUNT. 8.3 BEFORE US, LD. COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE STATEMENT OF FDS, DATES OF MATURITY OF THE SAID FDS A ND THE POSSIBILITY OF SAID MATURITY OF FDS TO BECOME A SOURCE FOR BUYING THE NEW FDS. THE FACTS ABOUT FILING OF SUCH DOCUMENTS BEFORE THE R EVENUE AUTHORITIES WERE ALSO MENTIONED. AS PER THE LD. COUNSEL, IF THE SAID CAS H FLOW IS ANALYSED PROPERLY, THE ADDITION THAT IS REQUIRED T O BE MADE WOULD BE AROUND RS.79,771/- AGAINST THE ADDITION OF RS.2,30,970/- IN THE CASE OF THE ASSESSEE FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. 8.4 ON THE OTHER HAND, LD. DR FOR THE REVENUE RELIED HE AVILY ON THE ORDERS OF AO AND THE ASSESSEES FAILURE TO PROVIDE CASH FLOW STATEMENTS BEFORE THE REVENUE AUTHORITIES. 8.5 WE HEARD BOTH THE SIDES, PERUSED THE ORDERS OF THE REVENUE AND THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE BEFORE US. ON GOING THROUGH THE ABOVE FACTS, WE FIND THE SOURCE OF INCOME FOR MAKING THE FDS WORTH OF RS.2,30,970/- IS THE CORE ISSUE UNDER LITIGATION . IT IS THE CASE OF THE ASSESSEE THAT THE SOURCE FOR THE SAME IS THE PROCEEDS RECEIVED 23 DEVENDRA P. SHAH A.YRS. 2007-08 TO 2011-12 BY THE ASSESSEE ON MATURITY OF THE EARLIER FDS. THERE IS NEED FOR FURNISHING THE CASH FLOW OF THE MATURED FDS WHICH FORM PART OF THE NEW FDS OF RS.2,30,970/-. IT IS AN ADMITTED FACT BEFORE US THAT THE ASSESSEE OFFERED ONLY AN AMOUNT OF RS.79,771/- AS ADDITIONAL INCOME FO R TAXATION AND NOT THE ENTIRE ADDITION OF RS.2,30,970/-. HOWEVER, LD . AR FIRMLY SUBMITTED THAT THE ENTIRE FDS OF RS.2,30,970/- IS EXPLAINABLE IF TIME IS GRANTED BEFORE THE AO. IN OUR VIEW, THIS MATTER NEEDS EXAMINATION IN THE LIGHT OF THE DETAILS OF THE CASH FLOW. IN CASE OF AVAILAB ILITY OF SUFFICIENT CASH BALANCE IS DEMONSTRATED BY THE ASSESSEE IN THE REMAND PROCEEDINGS, THE BENEFIT OF EXCESS CASH NEEDS TO BE GRAN TED IN FAVOUR OF THE ASSESSEE. ONLY EXCEPTION TO THIS PRINCIPLE IS THAT TH E AO SHOULD EXAMINE THE LIKELY USE OF SUCH EXCESS CASH FOR ANY OTHER EXPENDITURE OTHER THAN FOR MAKING THE SAID FDS OF RS.2,30,970/- CLAIMED BY THE ASSESSEE. WITH THESE DIRECTIONS, THE ISSUE RAISED BY THE ASSESSEE IN THE APPEALS IS ALLOWED FOR STATISTICAL PURPOSES. 9. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE ARE PAR TLY ALLOWED FOR STATISTICAL PURPOSES. ITA NOS.793 TO 796/PUN/2016 A.YRS2007-08 TO 2010-11 10. WHEN IT COMES TO THE REVENUE APPEALS ABOVE, AS STAT ED EARLIER, IT IS EVIDENT THAT THE CIT(A) GRANTED PART RELIEF ON ACCOUNT OF (1) UNSECURED LOANS AND (2) FULL-RELIEF ON ACCOUNT OF UNACCOUNTED EXPENDITU RE IN ELECTIONS. BOTH THE GROUNDS OF ASSESSEE STAND REMITTE D TO THE FILE OF AO WHILE ADJUDICATING THE SAID ISSUES IN THE APPEALS BY THE AS SESSEE FOR ALL THE RELEVANT ASSESSMENT YEARS UNDER CONSIDERATION. THE REFORE, THE ISSUES RAISED BY THE REVENUE IN ITS APPEALS SHOULD ALSO ST ANDS REMITTED TO THE FILE OF AO FOR HARMONIOUS ADJUDICATION OF THE ISSUES. ACCORDINGLY, 24 DEVENDRA P. SHAH A.YRS. 2007-08 TO 2011-12 THE GROUNDS RAISED BY THE REVENUE IN ALL THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. 11. IN THE RESULT, ALL THE APPEALS OF THE REVENUE ARE ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 12 TH DAY OF OCTOBER, 2018. SD/- SD/- ( /VIKAS AWASTHY) ( . /D. KARUNAKARA RAO) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / PUNE; / DATED : 12 TH OCTOBER, 2018. SATISH ' ) / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEALS)-13, PUNE 4. THE PR.CIT (CENTRAL), PUNE 5. , , ' , / DR, ITAT, A BENCH, PUNE. 6. % / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE