MATHURA ENTERPRISES, MUMBAI V. JOINT COMMISSIONER OF INCOME TAX CIRCLE 21(1), MUMBAI

ITA 7096/MUM/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9698 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Assessment Year: 2011-2012
• Appeal Filed On: 14-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DR P DANIEL
• Keywords: Unexplained cash credit; Unexplained investment; Unexplained expenditure; Business income; Income from undisclosed sources; Loose papers; Principle of natural justice; Accommodation entries; Onus to prove; Retraction; Documents seized
• Section: 143(3); 142(1); 131; 132; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH I, MUMBAI BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.7096/M/2017 ASSESSMENT YEAR: 2011-12 M/S. MATHURA ENTERPRISES, SHANTI VIMAL, P.M. ROAD, VILE PARLE (EAST), MUMBAI 400 057 PAN: AAQFM9848N VS. THE ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 25(3), MUMBAI (APPELLANT) ( RESPONDENT) ITA NO.7097/M/2017 ASSESSMENT YEAR: 2013-14 M/S. MATHURA ENTERPRISES, SHANTI VIMAL, P.M. ROAD, VILE PARLE (EAST), MUMBAI 400 057 PAN: AAQFM9848N VS. THE ASSTT. COMMISSIONER OF INCOME TAX/THE JOINT COMMISSIONER OF INCOME TAX, RANGE 21(1), MUMBAI (APPELLANT) (R ESPONDENT) ITA NO.7098/M/2017 ASSESSMENT YEAR: 2012-13 M/S. MATHURA ENTERPRISES, SHANTI VIMAL, P.M. ROAD, VILE PARLE (EAST), MUMBAI 400 057 PAN: AAQFM9848N VS. THE ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 25(3), MUMBAI (APPELLANT) (R ESPONDENT) ITA NOS.239, 64 & 240/M/2018 ASSESSMENT YEARS: 2011-12, 2012-13 & 2013-14 ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 25(3), MUMBAI VS. M/S. MATHURA ENTERPRISES, SHANTI VIMAL, P.M. ROAD, VILE PARLE (EAST), MUMBAI 400 057 PAN: AAQFM9848N (APPELLANT) (R ESPONDENT) ITA NOS.7096/M/2017 & ORS. M/S. MATHURA ENTERPRISES 2 PRESENT FOR: ASSESSEE BY : DR. P. DANIEL, A.R. REVENUE BY : SHRI DEBASHISH CHANDRA,D.R. SHRI OMI NINGSHEN, D.R. DATE OF HEARING : 29.01.2018 DATE OF PRONOUNCEMENT : 28.03.2018 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE ABOVE TITLED APPEALS THREE BY THE ASSESSEE AND THREE BY THE REVENUE HAVE BEEN PREFERRED AGAINST THE COMM ON ORDER DATED 25.10.2017 OF THE COMMISSIONER OF INCOM E TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)]. 2. FIRST WE TAKE UP THE APPEAL OF THE ASSESSEE IN I TA NO.7096/M/2017 FOR A.Y. 2011-12 AND THE GROUNDS RAIS ED BY THE ASSESSEE ARE AS UNDER: 1. THE LEARNED CIT(A) ERRED IN DETERMINING THE INC OME AT RS. 4,34,10,958/- AS AGAINST THE INCOME DISCLOSED AT RS . 66,45,958 /- BY THE ASSESSEE. 2. THE LEARNED CIT(A) ERRED IN DIRECTING TO ESTIMAT E THE INCOME AT 9.50% OF RS,38.70 CRORES, I.E. RS. 3,67,65,000/- U/S. 68 OF THE I. T. ACT, 1961 INSTEAD OF DELETING THE WHOLE AMOUNT OF RS.38.70 CR ORES AS HE CONSIDERED THE UNSIGNED LOOSE SHEETS ARE DUMB DOCUMENTS. 3. THE ASSESSING OFFICER ERRED IN CHARGING INTEREST U/S. 23413, 234C & 234D OF THE INCOME TAX ACT, 1961. IT IS PRAYED THAT THE ADDITIONS MADE MAY PLEASE BE DELETED OR IN THE ALTERNATIVE, THE ASSESSMENT BE SET ASIDE. THE APPELLANT CRAVES LEAVE TO ADDUCE, ADD, AMEND, A LTER OR DELETE ANY OF THE ABOVE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HE ARING THIS APPEAL. 3. THE ISSUE RAISED BY THE ASSESSEE IN THE GROUND N OS.1 IS OF GENERAL NATURE AND REQUIRE NO ADJUDICATION. THE ISSUE RAISED IN GROUND NO 3 IS CONSEQUENTIAL IN NATURE AN D IS DISMISSED. ITA NOS.7096/M/2017 & ORS. M/S. MATHURA ENTERPRISES 3 4. THE ONLY EFFECTIVE ISSUE RAISED IN GROUND NO.2 I S AGAINST THE DIRECTION OF LD. CIT(A) TO AO TO ESTIMATE THE I NCOME AT 9.5% OF RS.38.70 CR THEREBY SUSTAINING THE ADDITION TO THE TUNE OF RS.3,67,65,000/- UNDER SECTION 68 OF THE ACT INSTEAD OF DELETING THE WHOLE AMOUNT OF RS.38.70 CRORES AS T HE SAME WAS BASED UPON DUMB DOCUMENTS. 5. THE FACTS IN BRIEF ARE THAT THE ASSESSEE FILED E -RETURN ON 30.09.2011 DECLARING INCOME OF RS.66,45,958/- WHICH WA S PROCESSED UNDER SECTION 143(1) OF THE ACT. SUBSEQU ENTLY, THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND NOTIC ES UNDER SECTION 142(1) AND 143(2) OF THE ACT WERE DULY ISSU ED AND SERVED UPON THE ASSESSEE. A SURVEY ACTION WAS ALSO CONDUCTED IN THE CASE OF M/S. KAMALA GROUP ON 21.11.2 012 DURING WHICH VARIOUS DOCUMENTS WERE FOUND AND SEIZE D. THE ASSESSEE WAS A GROUP CONCERN OF KAMLA GROUP AND OUT OF THE LOOSE PAPERS IMPOUNDED FROM THE PREMISES OF M/S. KA MALA GROUP THREE PAGES NAMELY PAGE NOS.30, 56 AND 57 WER E IDENTIFIED AS BELONGING TO THE ASSESSEE FIRM M/S. MA THURA ENTERPRISES WHEREIN THE ENTRIES OF CASH TRANSACTION S WERE RECORDED ON VARIOUS DATES. ACCORDINGLY, THE AO CALL ED UPON THE ASSESSEE TO FURNISH THE DETAILS IN RESPECT OF S UCH ENTRIES AND RECONCILE THE SAME WITH ITS BOOKS OF ACCOUNTS. THE ASSESSEE FILED SOME WORKINGS WITH RESPECT TO CASH T RANSACTIONS BUT COULD NOT PROVE WITH THE BOOKS OF ACCOUNTS. THE REAFTER, A SHOW CAUSE NOTICE DATED 12.03.14 WAS ISSUED TO THE A SSESSEE WHICH READS AS UNDER: 'IN CONNECTION WITH THE ASSESSMENT PROCEEDINGS IN Y OUR CASE FOR A Y ITA NOS.7096/M/2017 & ORS. M/S. MATHURA ENTERPRISES 4 2011-12, YOU HAD-SUBMITTED BEFORE THE UNDERSIGNED O N 26.2.2014 THAT ENTRIES OF CASH RECEIPTS CORRESPONDING TO THE SALES MADE DURING THE YEAR I.E. BOOKINGS MADE CORRELATING WITH THE IMPOUNDED M ATERIAL A-1 AND A-2 BELONGING TO M/S. KAMLA GROUP. FROM THE ENTRIES, CE RTAIN PAGES ARE IDENTIFIED TO BE BELONGING TO M/S. MATHURA ENTERPRI SES (PAGE NO.22,23 & 24) )YOU FURTHER ARGUED THAT THESE ARE NOTHING BUT FLAT ADVANCES RECEIVED FROM VARIOUS BUYERS AND THE SAME SHOULD NOT BE TAXE D BY TREATING IT AS INCOME AND ALSO ARGUED THAT THESE BUSINESS ADVANCES WILL ACCRUE AS INCOME ONLY AT THE TIME OF HANDING OVER THE FLATS T O THE CUSTOMERS. YOU WERE ASKED TO JUSTIFY THE CLAIM WITH VALID DOCUMENT ARY EVIDENCES LIKE MOUS, AGREEMENTS, CONFIRMATIONS LETTERS ETC, IF THE CLAIM IS TO HE ACCEPTED. THE WORKING SUBMITTED BY YOU WAS OBSERVED TO BE NOT CORRECT AND AGAIN SUBMITTED THE REVISED WORKING OF THE RECEIPTS MADE BY M/S. MATHURA ENTERPRISES DURING THE F Y 2010-11 ON 31/3/2014 WHI CH IS AS FOLLOWS. AS PER THE IMPOUNDED MATERIAL AND AS PER THE SUBMISSIONS M ADE BY YOU, FOLLOWING ARE CASH RECEIPTS MADE BY YOU DURING THE F Y2010-11 RELEVANT TO A Y 2011- 12. RS.30,74,99,000/- FOR TOWER-A RS. 5,65,68,000/- FOR TOWER B RS.36,40,67,000/- TOTAL FURTHER YOU WERE ASKED TO EXPLAIN PAGE NO. 30 OF I MPOUNDED MATERIAL A- 1. YOU STATED THAT THESE ARE CASH PAID BY THE BROKERS TO YOUR CONCERN ON RECEIPT OF THE SAME FROM CUSTOMERS. BUT BASED, ON THIS PAGE TOTAL RECEIPTS DURING THE YEAR IS RS. 38 : 70, 00, 000/- (RUPEES THIRTY EIGHT CRORES AND SEVENTY LAKHS) AND AS PER THE SUBMISSION DATED 3.3.01, IT IS RS.36,40,67,000/-. HENCE YOU WERE ASKED TO EXPLAIN WHY THE DIFFERENCE AMOUNT , OF RS. 2,30,00,000/- SHOULD NOT BE TAXED AS UNEXPLAINED RE CEIPTS IN ABSENCE OF ANY EXPLANATION. TILL TODAY, THE EXPLANATION CALLED FOR REGARDING TH E CASH RECEIPTS OF RS.36,40,67,000/- BASED ON IMPOUNDED MATERIAL AN D EXCESS CASH RECEIPT OF RS.2,30,00,0001- BEING THE DIFFERENCE AM OUNT BETWEEN THE CASH PAID BY THE BROKERS TO YOU AND CASH RECEIPTS R EFLECTED BY YOU. YOU HAVE CLAIMED THAT THESE ARE NOTHING BUT FLAT AD VANCES RECEIVED VARIOUS BUYERS. BUT TILL TODAY YOU HAVE NOT JUSTIFI ED YOUR CLAIM WITH VALID DOCUMENTARY EVIDENCE LIKE MOUS, AGREEMENTS, C ONFIRMATION LETTERS, IDENTITY, CEDITWORTHINESS AND GENUINENESS OF THESE TRANSACTIO NS. IN THE ABSENCE OF ANY EVIDENCE IN YOUR SUPPORT, PLEASE SHOW CAUSE AS TO WHY THESE RECEIPTS SHOULD NOT BE TAXED AS INCOME DURING THE ASSESSMENT YEAR RELEVANT TO FINANCIAL YEAR 2010-11 WHICH IS UNDER CONSIDERATION. THE ASSESSEE FILED WRITTEN SUBMISSION TO THE SAID S HOW CAUSE NOTICE VIDE LETTER DATED 19.03.14 WHICH IS EXTRACTED BELOW: ITA NOS.7096/M/2017 & ORS. M/S. MATHURA ENTERPRISES 5 THIS PROJECT IS A 'PROPOSED REDEVELOPMENT SCHEME O F MUNICIPAL ACQUIRED PROPERTY KNOWN AS BHOIWADA GAON UNDER DCR 33(9)' WH EREIN APPROXIMATELY 780 SLUM TENEMENTS HAVE TO BE RE-ACCO MMODATED IN THE REHAB BUILDINGS; THEREAFTER THE CONSTRUCTION OF FRE E SALE BUILDING CAN BE STARTED. TODAY, SINCE ACQUIRING, THE CONSTRUCTION HAS HARDLY TAKEN PLACE AS THE PROPERTY IS FACING LITIGATION. THE SAID LITIGATION HAS AROUSED DUE TO DIFFERENCES BETWEEN FAMILIES OF ORIGINAL OWNERS (FR OM WHOM WE HAVE ACQUIRED) VIZ. LATE MR. SUNIL MANE (ELDER BROTHER) AND MR. SANTOSH MANE. THE DISPUTE AROUSED AFTER THE ELDER BROTHER, SUNIL EXPIRED DUE TO PROLONGED KIDNEY AILMENT IN 2012. MR. SUNIL MANE TH E LEGAL HEIR OF SUNIL MANE. BUT CONSEQUENTLY DUE TO THE LEGAL DISPUTE BE TWEEN THE FAMILIES, WE HAVE BEEN DEPRIVED FROM PHYSICAL POSSESSION OF THE SITE/PROJECT SINCE THEN I.E., 2012. THE MATTER WAS REFERRED TO COMPANY LAW BOARD (CLB) BY THE MANE FAMILY AND FURTHER IN HIGH COURT APPEAL AS THE PROJECT CAM E UNDER LITIGATION DUE TO DISPUTE IN THAT FAMILY RUN BUSINESS. CURRENTLY, THIS PROJECT HAS DELAYED BY ALMOST 3 YEA RS; IS STILL STALLED TILL FURTHER CLARITY DUE TO LITIGATION AND VARIOUS OTHER UNAVOIDABLE CIRCUMSTANCES . OUT OF THE TOTAL DISCLOSURE AMOUNT RS.25,00,00,000 (RUPEES TWENTY FIVE CRORES ONLY) WAS DISCLOSED IN THE NAME OF M/S. MATHURA ENTERPRISES AND THE REMAINING RS.25,00,00,000 (RUPEES TWENTY FI VE CRORES ONLY) IN OTHER GROUP COMPANIES. EVEN THOUGH OUR PROJECT NOT YET STARTS WE HAVE MADE VOLUNTARILY DISCLOSURE TO BUY PEACE AND TO AVO ID LITIGATION WITH DEPARTMENT. THESE AMOUNTS SHOULD NOT BE TAXED IN A. Y. 2011 12 AS THE SAME HAS ALREADY BEEN DISCLOSED IN ASSESSMENT YEAR 2013- 14. IF YOU MAKE THE ADDITION IN AY 2011 - 12, THEN IT WILL BE DOUBLE TA XATION IN THE HANDS OF MATHURA ENTERPRISES THE AO WAS NOT SATISFIED WITH THE EXPLANATION OF TH E ASSESSEE AS TO THE TOTAL RECEIPT OF RS.38,70,00,000/ - AS PER THE PAGE NO.30 AGAINST WHICH THE ASSESSEE SUBMITTED THAT THE TOTAL RECEIPT WAS RS.36,40,67,000/- AND ADDED THE SAID AMOUNT AS UNEXPLAINED CASH DEPOSIT UNDER SECTION 68 OF THE ACT BY ASSESSING THE INCOME OF RS.38,46,45,958/- VIDE ORDER ITA NOS.7096/M/2017 & ORS. M/S. MATHURA ENTERPRISES 6 DATED 29.03.14 PASSED UNDER SECTION 143(3) OF THE INC OME TAX ACT BY OBSERVING AS UNDER: (I) THAT THE BURDEN TO PROVE THE IDENTITY, CAPACITY AND GENUINENESS HAS TO BE ON THE ASSESSEE (II) IF THE CASH CREDIT IS NOT SATISFACTORILY EXPLAINED THE ASSESSING OFFICER IS JUSTIFIED TO TREAT IT AS INCOME FROM UNDISCLOSED S OURCES, (III) THE FIRM HAS TO ESTABLISH THAT THE AMOUNT WAS ACTUA LLY GIVEN BY THE CUSTOMERS IN CASH, (IV) IF THE EXPLANATION IS NOT SUPPORTED BY ANY DOCUMENT ARY OR OTHER EVIDENCE, THEN THE DEEMING FICTION CREDITED BY SECTION 68 CAN BE INVOKED. HENCE, AN AMOUNT OF RS.38,70,00,000/- IS TREATED AS UNEXPLAINED CASH CREDITS IN THE BOOKS OF THE ASSESSEE AND ADDED AS TAXABLE INCOME O F THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION. PENALTY PROCEEDINGS U/S.271(1) (C) R.W.S. 274 OF THE INCOME TAX ACT IS INITIATED SEPARATELY FOR FURNISHING INACCURA TE PARTICULARS OF INCOME AND CONCEALMENT OF INCOME. 6. AGGRIEVED BY THE ORDER OF THE AO, ASSESSEE PREFERR ED AN APPEAL BEFORE THE LD. CIT(A) WHO, AFTER CONSIDERING THE DETAILED SUBMISSIONS BY THE ASSESSEE WHICH HAVE BEE N INCORPORATED IN THE APPELLATE ORDER IN PARAS 5.4 TO 5.11, PARTLY ALLOWED THE APPEAL OF THE ASSESSEE BY HOLDING THAT THE DOCUMENTS IMPOUNDED DURING SURVEY WHICH WERE STATE D TO BE RELATED TO THE ASSESSEE WERE DUMB DOCUMENTS AND DI RECTING THE AO TO ESTIMATE THE INCOME ON RS. 38,70,00,000/- @ 9.50% BASED UPON THE GP OF EARLIER YEARS BY OBSERV ING AND HOLDING AS UNDER: 5.12 I HAVE CONSIDERED THE SUBMISSIONS OF THE APPE LLANT AND GONE THROUGH THE ASSESSMENT ORDER. THE SUM AND SUBSTANCE OF THE APPE LLANT'S ARGUMENTS ARE THAT THERE IS NO MATERIAL IN THE HANDS OF THE ASSESSING OFFICER TO ADD AN AMOUNT OF RS.38.70 CRORES AS INCOME OF THE APPELLANT. THE A.O . HAS MADE ADDITION ON THE BASIS OF LOOSE PAPER MARKED AS 30 OF A-1.THESE DOCUMENTS NEITHER CERTIFIED BY THE PARTNER NOR AUTHORISED PERSON. FURTHER, THE SAID L OOSE PAPERS ARE NOT IN THE FORM OF EXECUTED DOCUMENTS OR BOOKS OF ACCOUNTS OR CERTIFIC ATES WHICH CAN PROVED CONCLUSIVELY THAT APPELLANT HAS EARNED UNDISCLOSED OR UNACCOUNTED INCOME. FURTHER, SINCE THE IMPOUNDED PAPERS, HAVE NO ACCEPTABLE NARR ATION AND DO NOT BEAR THE CERTIFY THE APPELLANT OR ANY AUTHORISED PERSON, THE Y ARE IN THE NATURE OF DUMB ITA NOS.7096/M/2017 & ORS. M/S. MATHURA ENTERPRISES 7 DOCUMENTS HAVING NO EVIDENTIARY VALUE AND CANNOT BY TAKEN AS A SOLE BASIS FOR DETERMINATION OF UNDISCLOSED INCOME OF THE APPELLAN T. WHEN DUMB DOCUMENTS LIKE THE PRESENT LOOSE SHEETS OF PAPERS ARE RECOVERED AN D THE ASSESSING OFFICER WANTS TO MAKE USE OF IT, THE ONUS RESTS ON THE ASSESSING OFF ICER TO COLLECT COGENT EVIDENCE TO CORROBORATE THE NOTING THEREIN. THE ASSESSING OFFIC ER HAS FAILED TO CORROBORATE THE NOTING BY BRINGING SOME COGENT MATERIAL ON RECORD T O PROVE CONCLUSIVELY THAT THE NOTING IN THE IMPOUNDED PAPERS REVEAL THE UNACCOUNT ED ON MONEY RECEIPTS OF THE ASSESSEE. FURTHER, NO CIRCUMSTANTIAL EVIDENCE IN TH E FORM OF ANY UNACCOUNTED CASH, JEWELLERY OR INVESTMENTS OUTSIDE THE BOOKS OF ACCOU NT WAS FOUND IN COURSE OF SEARCH IN THE CASE OF APPELLANT. THE AO BRUSHED ASIDE THIS EXPLANATION SUBMITTED BY THE APPELLANT. THE A.O. MERELY STATED IN THE ASSESSMEN T ORDER THAT THE EXPLANATION OF THE APPELLANT IS NOT ACCEPTABLE AND MADE AN ADDITIO N OF THESE LOOSE PAPERS. . THE SECTION 68 OF THE ACT IS IN RELATION TO WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE MAINR3INEJ FOR ANY PREVIOUS YEAR, AN D THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF'. T HE ADDITION U/S 68 IS TO BE MADE ONLY IN RELATION TO TRANSACTIONS RECORDED IN THE BO OKS OF THE ASSESSEE. WHEN THE AO OPINES THAT TRANSACTIONS ARE NOT RECORDED IN THE BO OKS THE SAME CANNOT BE TAXED U/S 68 OF THE ACT. 5.13 FURTHER, CERTAIN FACTS COMPEL TO ME THAT THE A PPELLANT IS A BUILDER AND DEVELOPER AND IN SUCH BUSINESS, RECEIPT OF ON MONEY OR RECEIPT ON UNDISCLOSED SALES CANNOT BE DENIED. HOWEVER, AT THE TIME OR SURVEY I T WAS ACCEPTED BY KAMALA GROUP THAT THERE WAS UNDISCLOSED SALES. FURTHER, DURING T HE ASSESSMENT PROCEEDING, APPELLANT HAVE VOLUNTARILY DISCLOSED RS.50,00,00,00 0/-. OUT OF TOTAL DISPOSAL, AMOUNT OF RS.25,00,000/- WAS DISCLOSED IN THE NAME OF MATH URA ENTERPRISES. HENCE ESTIMATING THE INCOME FROM UNDISCLOSED SALES CANNOT BE CONSIDERED AS WRONG. CONSIDERING THE NATURE OF BUSINESS OF THE APPELLANT I.E. BEING A BUILDER AND DEVELOPER, THE ON-MONEY RECEIVED BY THE APPELLANT I S EMBEDDED WITH THE PROFIT ELEMENT AND THEREFORE ONLY PROFIT SHOULD BE ESTIMAT ED ON THE UNACCOUNTED RECEIPT. THE AMOUNT OF SALES BY ITSELF CANNOT REPRESENT THE INCOME OF THE ASSESSE WHO HAS NOT DISCLOSED THE SALES. THE SALES ONLY REPRESENT T HE PRICE RECEIVED BY THE SELLER OF THE GOODS FOR THE ACQUISITION OF WHICH IT HAS ALREA DY INCURRED THE COST. IT IS THE REALIZATION OF EXCESS OVER THE COST INCURRED THAT O NLY FORMS PART OF THE PROFIT INCLUDED IN THE CONSIDERATION OF SALES. THEREFORE, UNLESS THERE IS A FINDING TO THE EFFECT THAT INVESTMENT BY WAY OF INCURRING COST IN ACQUIRING GOODS WHICH HAVE BEEN SOLD MADE BY THE APPELLANT AND THAT HAS ALSO NOT BE EN DISCLOSED, THE QUESTION, WHETHER ENTIRE SUM OF UNDISCLOSED SALE PROCEEDS CAN BE TREATED AS INCOME OF THE RELEVANT ASSESSMENT YEAR. THE ANSWERS BYITSELL IN T HE NEGATIVE. THE RECORD GOES TO SHOW THAT THERE IS NOT FINDING NOR ANY MATERIAL HAS BEEN REFERRED TO ABOUT THE SUPPRESSION OF INVESTMENT IN ACQUIRING THE GOODS WH ICH HAVE BEEN FOUND SUBJECT OF UNDISCLOSED SALES. THEREFORE, IN MY CONSIDERED OPIN ION THE TOTAL SALES AS SUCH CANNOT BE ADDED. BECAUSE THE AMOUNT OF SALES BY ITSELF CAN NOT REPRESENT THE INCOME OF THE ASSESSEE WHO HAS NOT DISCLOSED SALES. THE SALES ONL Y REPRESENT THE PRICE RECEIVED BY THE SELLER OF THE GOODS FOR ACQUISITION OF WHICH IT HAS ALREADY INCURRED THE COST. IT IS THE REALIZATION OF EXCESS OVER THE COSTS INCURRED T HAT ONLY FORMS PART OF THE PROFIT INCLUDED IN THE CONSIDERATION OF SALES AS HELD BY T HE HON'BLE GUJARAT HIGH COURT IN THE CASE OF C.I.T. V. PRESIDENT INDUSTRIES (2002) 1 24 TAXMAN 654 (GUJ). FURTHER, THE MUMBAI TRIBUNAL IN THE CASE OF MEHROO N. IRANI V. A .C.I.T. (75 TAXMAN 123) HELD THAT 'AN ESTIMATED ADDITION TO THE TOTAL INCOME BASED ON GROUND REALITIES WOULD BE A ITA NOS.7096/M/2017 & ORS. M/S. MATHURA ENTERPRISES 8 BETTER WAY OUT. IN THIS CASE, THE HON'BLE ITAT HELD THAT EVEN IN THE CASE OF ON- MONEY IT IS ONLY THE NET ADDITION OF 5% GROSS RECEI PT WOULD MADE THE END OF THE JUSTICE. THE RELEVANT PART OF DECISION ARE AS UNDE R: IN THE INSTANT CASE, FROM A PERUSAL OF THE SEIZED M ATERIAL, IT COULD BE SAID THAT NO CONCLUSIVE INFERENCE COULD BE DRAWN FROM TH ESE PAPERS THAT THE ASSESSEE IN FACT HAD RECEIVED RS.50 PER SQ. FT. ON SALE OF FLATS. THE PAPERS DID INDICATE THAT 'ON MONEY' WOULD HAVE EXCHANGED H ANDS ON SUCH SOLE. BUT WHAT MODE OUT A CASE FOR ADDITIONS WERE THE SEI ZED PAPERS WHICH GO TO SHOW THAT THE ASSESSEE COULD HAVE INCURRED CASH EXP ENDITURE FOR PURCHASE OF SCARCE MATERIAL LIKE CEMENT AND STEEL. THE CONTE NTION OF THE ASSESSEE THAT MERELY BECAUSE UNRECORDED EXPENDITURE MIGHT HA VE BEEN INCURRED BY THE ASSESSEE, AN INFERENCE THAT THERE COULD BE R ECEIPT OF 'ON MONEY' HAD TO BE REJECTED, HAD MERELY TO BE STATED TO BE R EJECTED. THE ASSESSEE HAD EMBARKED ON A BUSINESS VENTURE, I.E., CONSTRUCTION OF MULTI-STOREYED BUILDING AND SUCH ACTION ON THE PORT OF THE ASSESSEE COULD NOT HAVE BEEN MOTIVATED BY ALTRUISM OR PHILAN THROPY. THE PAPERS WHICH INDICATED THAT THE ASSESSEE COULD HAVE INCURR ED UNACCOUNTED EXPENDITURE WERE SEIZED AT THE PREMISES OF THE ASSE SSEE. IT WOULD BE IDLE TO SPECULATE THAT PAPERS DID NOT REPRESENT ANY REAL EXPENDITURE. NO STAFF MEMBER WOULD BE EXPECTED TO MAKE A JOTTING OF THIS NATURE AND KEEP IT IN THE FILE OF THE OFFICE. THERE, THEREFOR E, HAD TO BE SOME TRUTH IN THE WHOLE THING. THE TOTALITY OF THE FACTS, IF C ONSIDERED IN A DISPASSIONATE MANNER, COULD LEAD TO A CONCLUSION TH AT THE ASSESSEE IN FACT HAD RECEIVED 'ON MONEY' AND HAD ALSO INCURRED EXPEN DITURE OUT OF THE SAME. AN ESTIMATED ADDITION TO THE TOTAL INCOME BAS ED ON THE GROUND REALITIES WOULD BE A BETTER WAY OUT. IN DOIN G SO, ONE SHOULD TAKE INTO CONSIDERATION THE NET PROFIT DISCLOSED BY THE ASSESSEE AND ALSO THE NET PROFIT THAT WOULD BE REFLECTED AFTER T HE ADDITIONS FINALLY SUSTAINED WERE TAKEN INTO CONSIDERATION. IN THE INS TANT CASE, HAVING REGARD TO THE TOTALITY OF THE FACTS AND CIRCUMSTANC ES OF THE CASE, A NET ADDITION OF 5 PER CENT OF THE GROSS RECEIPTS EX CLUSIVE OF RECEIPTS ON ACCOUNT OF GARAGES AND INSTALLATION OF GENERATOR WOULD MEET THE ENDS OF JUSTICE. MOREOVER, NO SEPARATE ADDITION OF 'ON MONEY' WOULD BE NECESSARY IN REGARD TO SALE OF GARAGES WHICH WER E NOTHING BUT PARKING SPACES. 5.14 THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS GURUBACHHAN SINGH JUNEJA (2008) 302 ITR 0063 (GUJ.)(HC) HAS DIS CUSSED IDENTICAL ISSUE THAT IN ABSENCE OF ANY MATERIAL ON RECORD TO SHOW T HAT THERE WAS ANY UNEXPLAINED INVESTMENT MADE BY THE ASSESSEE WHICH W AS REFLECTED BY THE UNACCOUNTED SALES, THE FINDING OF THE TRIBUNAL THAT ONLY THE GP ON THE SAID AMOUNT CAN BE BROUGHT TO TAX. FURTHER, THE HON'BLE ITAT MUMBAI IN THE CASE OF PLATINUM PROPERTY VS DCIT CENTRAL CIRCLE HA S DECIDED SIMILAR ISSUE. THE RELEVANT PART OF DECISION ARE AS UNDER: A PERUSAL OF THESE UNACCOUNTED ENTRIES SHOWS THAT T HE ASSESSEE WAS MAKING ENTRIES OF THE ON-MONEY RECEIVED BY IT DURIN G THE COURSE OF ITS BUSINESS. U/S. 153, THE AO HAS POWER TO ASSESS OR REASSESS THE TOTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FAL LING WITHIN SUCH ITA NOS.7096/M/2017 & ORS. M/S. MATHURA ENTERPRISES 9 ASSESSMENT YEAR IN CASE OF PERSON WHERE A SEARCH IS INITIATED U/S. 132 OF THE ACT. THUS, THE AO HAS THE POWER TO ASSESS OR REASSESS THE TOTAL INCOME OF THE ASSESSEE. WHAT CAN BE TAXED IS THE UN DISCLOSED INCOME AND NOT THE UNDISCLOSED RECEIPTS, THIS MEANS THAT O NLY A REASONABLE AMOUNT OF PROFIT WHICH THE ASSESSEE COULD HOVE CORN ED CON BE ADDED. SEIZED PAPER INDICATES ASSESSEE WAS RECEIVIN G ON-MONEY IN THE ORDINARY COURSE OF ITS BUSINESS. EVEN THE UNACC OUNTED EXPENDITURES ARE ALSO REFLECTED IN THE SEIZED PAPER S. CONSIDERING THE FACTS IN TOTALITY, IN OR CONSIDERED OPINION, A REASONABLE PROFIT SHOULD BE TAXED WHICH IS EMBEDDED IN THE TOTAL UNACCOUNTED GROSS RECEIPTS AND THEREFORE 8% SHOULD MEET THE END OF JUSTICE. WE, ACCORDINGLY, DIRECT THE AO TO RECOMPUT ED THE UNDISCLOSED INCOME BY TAKING 8% AS NET PROFIT RATIO ON TOTAL UNACCOUNTED RECEIPTS. SINCE WE HAVE DIRECTED TO EST IMATE THE PROFIT AT 8%, ALL THE EXPENDITURES ARE DEEMED TO BE ALLOWE D. BEFORE PARTYING, THE LD. CIT(A) AS WELL AS THE LD. DEPARTMENTAL REPRESENTATIVE HAS STRONGLY RELIED UPON THE DECISIO N OF THE HON'BLE SUPREME COURT IN THE CASE OF DEWANBOHADUR SETH DOS MOHTA (SUPRA). IN THE PRESENT CASE, WE FIND THAT THE ASSESSEE HAS DECLARED THE ENTIRE GROSS RECEIPTS DURING THE COURSE OF THE SEARCH PROC EEDINGS THEREAFTER REALIZE THAT ONLY THE PROFIT ELEMENT SHOULD HAVE BE EN OFFERED FOR TAXATION WHICH IT RIGHTLY DID IN THE RETURN OF INCO ME. ANY OFFER MODE ON THE WRONG ASSUMPTION OF FACT/LOW CANNOT BE MODE A GROUND FOR TAKING THE BENEFIT BY THE REVENUE AUTHORITIES. THER EFORE, THE RETRACTION OF THE ASSESSEE IS NOT ON THE UNDISCLOSE D GROSS RECEIPTS BUT ON THE WRONG ASSUMPTION OF FACT THAT THE ENTIRE UNDISCLOSED GROSS ARE ITS INCOME. THE ASSESSEE HAS OFFERED O PR ESUMPTIVE RAT OF INCOME ON THE TOTAL UNACCOUNTED GROSS RECEIPTS WHIC H WE HAVE DIRECTED TO BE TAKEN AT THE RATE OF 8% OF THE TOTAL GROSS RECEIPTS. THEREFORE, IN OUR CONSIDERED OPINION, THE DECISION RELIED UPON BY THE LD. DR IS MISPLACED. ON THE ESTIMATION OF THE PROFI T, ALL THE EXPENSES ARE DEEMED TO BE ALLOWED, THEREFORE, THE ASSESSEE W ILL NOT GET ANY OTHER DEDUCTION. 5.15 IN VIEW OF ABOVE DECISION OF COURT, IT IS FOUN D THAT IN SUCH SITUATION PROFIT SHOULD BE TAKEN FOR UNDISCLOSED SALES OR REC EIPT. THE ASSESSEE HAS DISCLOSED THE NP RATIO BETWEEN 6.20% TO 9.43% IN TH E FOUR YEARS. THEREFORE, I AM OF THE VIEW THAT ESTIMATION OF PROFIT AT 9.50% WOULD MEET THE ENDS OF JUSTICE ON UNDISCLOSED SALES OR RECEIPT. THE A.O. I S DIRECTED TO ESTIMATE 9.50% OF THE UNDISCLOSED SALES AS ASSESSED BY HIM, AS THE INCOME OF THE APPELLANT OVER AND ABOVE THE INCOME DISCLOSED BY TH E APPELLANT. HOWEVER, THE A.O. HAS COMPUTED AN INCOME OF RS. 37.80 CRORES INSTEAD OF RS.38.70 CRORES, AS MENTIONED IN THE BODY OF THE ORDER. THE ASSESSING OFFICER IS DIRECTED TO MAKE AN ADDITION OF RS.3,67,65,000/- (9 .50% OF 38.70 CRORES) INSTEAD OF RS. 38.70 CRORES. THE ASSESSEE GETS A RE LIEF OF RS.35,02,35,000/-. THIS GROUND IS PARTLY ALLOWED. ITA NOS.7096/M/2017 & ORS. M/S. MATHURA ENTERPRISES 10 THE ASSESSEE AGGRIEVED BY THE ORDER OF CIT(A) CHALL ENGED THE SAME BEFORE THE TRIBUNAL. 7. THE LD. A.R. VEHEMENTLY ARGUED BEFORE THE BENCH THAT THE ADDITION AS SUSTAINED BY THE FIRST APPELLA TE AUTHORITY @ 9.5% OF THE TOTAL AMOUNT AS APPEARING I N PAGE 30 FOUND AND SEIZED DURING THE COURSE OF SURV EY ACTION ON M/S. KAMALA GROUP ON 21.11.12 WAS TOTALLY WRONG FACTUALLY AS WELL AS LEGALLY AS THE LD CIT(A) HIMSE LF HELD THESE DOCUMENTS AS DUMB DOCUMENTS BUT DIRECTED THE AO TO ESTIMATE THE INCOME @ 9.50% OF THE SO CALLED CASH TRANSACTIONS AS RECORDED ON PAGE NO 30 AMOUNTING TO RS. 38.70 CR. THE LD. A.R. SUBMITTED THAT THE SURVEY WAS CONDUCTED AT THE PREMISES OF M/S. KAMALA GROUP AND T HE DOCUMENTS SEIZED AND IMPOUNDED WAS NOT BELONGING TH E ASSESSEE I.E M/S. MATHURA ENTERPRISES. IT WAS STATE D THAT THE STATEMENT RECORDED OF MR. KETAN A. SHAH WHO WAS NEIT HER A PARTNER NOR CONNECTED WITH THE ASSESSEE FIRM. THE LD. A.R. ALSO SUBMITTED THAT THE ADDITION WAS WHOLLY BASED U PON THE PAGE NO.30 WHICH CONTAINED THE DETAILS OF CASH TRAN SACTIONS OF RS.38.70 CRORES AND TITLE OF THE SAID PAGE WAS PAR EL BHOIWADA KAMALA A/C WHICH SHOWED THAT THE PAPER DI D NOT BELONG TO THE ASSESSEE AS THERE WAS NO SUCH PROJECT UNDERTAKEN BY THE ASSESSEE AT ANY POINT OF TIME INC LUDING THE DURING THE YEAR UNDER CONSIDERATION. IT WAS ALSO SU BMITTED THAT THERE WAS NO MOU OR DEVELOPMENT AGREEMENT OR A NY OTHER AGREEMENT WHATSOEVER BETWEEN THE ASSESSEE FIR MA AND THE M/S. KAMALA GROUP. THE ASSESSEE DID NOT HAVE A NY RIGHT, TITLE OR INTEREST IN BHOIWADA PROJECT AND THE PRESU MPTION OF ITA NOS.7096/M/2017 & ORS. M/S. MATHURA ENTERPRISES 11 THE AO THAT ASSESSEE RECEIVED CASH FOR SUCH PROJECT WAS TOTALLY BASELESS AND WITHOUT ANY EVIDENCE AND THUS WERE MERE CONJECTURES AND PRESUMPTIONS OF THE AO. THE AO REL IED ON A PIECE OF PAPER WHICH WAS UNCERTIFIED AND UNAUTHENTI CATED LOOSE SHEET AND THEREFORE CANNOT COME WITHIN THE CO MPASS OF DOCUMENT TO BE USED AS EVIDENCE AND SAME CANNOT FOR M THE BASIS FOR ASSESSING THE UNDISCLOSED INCOME OF THE A SSESSEE. THE LD. A.R. IN DEFENSE OF HIS ARGUMENTS RELIED ON THE DECISION OF TRIBUNAL IN THE CASE OF ATUL KUMAR JAIN VS. DCIT (1999) 64 TTJ (DEL) 786. THE LD. A.R. ALSO SUBMITTED THAT NO ADDITION CAN BE MADE ON THE BASIS OF UNSIGNED PIECE OF PAPER WHICH IS A DUMB DOCUMENT BY RELYING ON THE DECISION OF TRIBU NAL IN THE CASE OF ACIT VS. RADHESHYAM PODDAR (1992) 41 ITD 44 9. THE LD. A.R. FURTHER CONTENDED THAT ADDITION UNDER SECTION 68 OF THE ACT CAN ONLY BE MADE IN RELATION TO THOSE TRANS ACTIONS WHICH ARE RECORDED IN THE BOOKS OF THE ACCOUNTS OF THE ASSESSEE AND NOT OTHERWISE. IN THE PRESENT CASE, T HE AO NOTED THAT THESE TRANSACTIONS OF CASH WERE NOT RECO RDED IN THE BOOKS OF ACCOUNTS BUT DESPITE THAT THE ADDITION WAS MADE UNDER SECTION 68 OF THE ACT. THE LD. A.R. SUBMITTED THAT THE FIRST APPELLATE AUTHORITY CLEARLY RECORDED THE FIND INGS THAT THE DOCUMENT FOUND AND SEIZED FROM THE PREMISES OF M/S. KAMALA GROUP WHICH SHOWED THE CASH TRANSACTIONS OF AMOUNT OF RS.38.70 CR FROM VARIOUS PARTIES IN CONNECTION WITH PAREL BHOIWADA KAMALA A/C WAS A DUMB DOCUMENT WHEREAS DES PITE THAT THE FIRST APPELLATE AUTHORITY DIRECTED THE AO TO ESTIMATE THE INCOME ON THE BASIS OF SAID DUMB DOCUMENTS. THE LD COUNSEL CONTENDED THAT THE ESTIMATION OF INCOME @ 9 .5% OF ITA NOS.7096/M/2017 & ORS. M/S. MATHURA ENTERPRISES 12 RS.38.70 CR WAS BAD IN LAW AND DESERVED TO BE DELET ED. THE LD. A.R. IN DEFENSE OF HIS ARGUMENTS PLACED RELIANCE O N THE DECISION OF THE TRIBUNAL IN THE CASE OF JAYA S. SHET TY VS. ACIT 69 ITD 336 (BOM.). THE LD. A.R. ALSO STATED THAT THE ADDITIONS WERE MADE ON THE STATEMENT GIVEN BY MR. KE TAN A. SHAH WHICH HAVE NO EVIDENTIARY VALUE AS THERE WAS N O CORROBORATION BY THE AO EITHER WITH REFERENCE TO TH E BOOKS OF ACCOUNTS OR OTHER EVIDENCES GATHERED EITHER DURING SURVEY OR DURING THE ASSESSMENT PROCEEDINGS AS HAS BEEN HELD IN A SERIES OF DECISIONS NAMELY; 1. PAUL MATHEWS AND SONS VS. CIT (2003) 263 ITR 101 (KER.) 2. CIT VS. S. KHADER KHAN SON (2008) 300 ITR 157 (MAD.) 3. CIT VS. S. KHADER KHAN SON (2013) 352 ITR 480 (SC) THE LD. A.R. SUBMITTED THAT THERE WAS COMPLETE LAC K OF ENQUIRY ON THE PART OF AO AS THE ASSESSEE FURNISHED ALL THE REQUIRED INFORMATION/MATERIAL AS DESIRED BY THE AO DURING THE COURSE OF ASSESSMENTS PROCEEDINGS AND SECONDLY ADD ITION UNDER SECTION 68 OF THE ACT IS BAD IN LAW AS HAS BE EN HELD BY THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. GANGESHWARI METAL PVT. LTD. (2013) 96 DTR (DEL) 299 IN WHICH IT HAS BEEN HELD THAT IN CASE OF LACK OF ENQUIRY O N THE PART OF THE AO WHERE ASSESSEE HAS FURNISHED ALL THE DETAILS , NO ADDITION CAN BE MADE. THE LD. A.R. STATED THAT IN T HE ASSESSEES CASE THERE WAS NEITHER ANY CASH RECEIPT PHYSICALLY NOR EXCESS CASH FOUND BY THE SURVEY TEAM AND THUS T HE PAPER I.E. PAGE NO.30 WHICH WAS STATED TO HAVE CONTAINED TH E DETAILS OF VARIOUS ENTRIES WITHOUT ANY SIGNATURES AND CERTI FICATION ARE ITA NOS.7096/M/2017 & ORS. M/S. MATHURA ENTERPRISES 13 NOTHING LESS THAN DUMB DOCUMENT AS HAS BEEN HELD BY THE HONBLE GAUHATI HIGH COURT IN THE CASE OF CIT VS. S MT. SANGHAMITRA BHARALI (2014) 361 ITR 481 (GAU) AT P. 4 82. IT WAS ALSO CONTENDED THAT THE AO HAS NOT EXPRESSED AN Y DISSATISFACTION WITH REGARD TO THE EVIDENCES FILED BY THE ASSESSEE NOR ANY TYPE OF ENQUIRIES WERE MADE BY THE AO. THE LD. A.R. SUBMITTED THAT RECEIVING INFORMATION FROM A S URVEY PARTY IS ONLY A STARTING POINT FOR ENQUIRY TO BE CO NDUCTED AND NOT THE FINAL CONCLUSION. IN THE PRESENT CASE, THE AO HAS ONLY MADE ADDITION ON THE BASIS OF CERTAIN DUMB DOCUMENT FOUND IN THE M/S. KAMALA GROUP AND TREATING IT AS INCOME OF THE ASSESSEE. THE LD AR ALSO REFERRING TO THE DECISION OF THE HONBLE RAJASTAN HIGH COURT IN THE CASE OF CIT VS. A. LALPURIA CONSTRUCTION P. LTD. (2013) 215 TAXMAN TAXMAN 12 (MA G) (RAJ) IN WHICH IT HAS BEEN HELD THAT NO ADDITION C AN BE MADE ON THE BASIS OF STATEMENT IN CASE OF ACCOMMODATION ENTRIES WHERE NO CROSS EXAMINATION WAS ALLOWED TO THE ASSES SEE. THE LD. A.R. SUBMITTED THAT EVEN IN THE CASE OF ACCOMMODAT ION ENTRIES WITHOUT GIVING AN OPPORTUNITY OF CROSS EXAM INATION NO ADDITION CAN BE MADE UNDER SECTION 68 OF THE ACT ME RELY ON THE BASIS OF STATEMENT. FINALLY, THE LD. A.R. CONTE NDED THAT ONCE THE LD. CIT(A) HAS FOUND THE PAPER (PAGE NO.30 ) IMPOUNDED FROM THE PREMISES OF M/S. KAMALA GROUP AS DUMB DOCUMENT, THE LD. CIT(A) SHOULD HAVE DELETED THE ENTI RE ADDITION RATHER THAN RESORTING TO ESTIMATION OF INC OME ON THE AMOUNT OF RS.38.70 CR AS APPEARING IN THE SAID DUMB DOCUMENT WHICH IS WRONG AND SHOULD BE DELETED. THE LD. A.R. SUBMITTED THAT UNAUTHENTICATED AND DUMB PAPER WAS N OT ITA NOS.7096/M/2017 & ORS. M/S. MATHURA ENTERPRISES 14 ENTERED IN THE BOOKS OF ACCOUNTS AND HENCE NO ADDIT ION COULD HAVE BEEN MADE UNDER SECTION 68 OF THE ACT. FINALL Y, THE LD. A.R. PRAYED THAT IN VIEW OF THE FACT THAT THE DOCUMEN TS FOUND AND SEIZED WERE IN THE NATURE OF DUMB DOCUMENTS, NO ADDITION COULD BE MADE ON THE BASIS OF SUCH DOCUMENTS AND SA ME DESERVED TO BE DELETED. 8. THE LD. D.R., ON THE OTHER HAND, HEAVILY RELIED ON THE ORDER OF AO AND SUBMITTED THAT THE LD. CIT(A) HAS GR OSSLY ERRED IN PART SUSTAINING THE ADDITION AT 9.5% OF RS .38.70 CR ONLY. THE DR CONTENDED THAT DURING SURVEY THE DOCUM ENTS FOUND AND IMPOUNDED WERE NOT DUMB DOCUMENTS BUT CONTAINED THE DETAILS OF ALL THE CASH TRANSACTIONS WHICH WAS FURTHER CORROBORATED BY THE STATEMENT OF MR. KETAN A SHAH. THE LD. D.R. SUBMITTED THAT THERE APPEARED A COMPLE TE DETAILS OF THE CASH TRANSACTIONS IN CHRONOLOGY. THE LD. D.R. ARGUED THAT THE SAID DOCUMENTS AS RECOVERED AND IMPOUNDED DURING THE COURSE OF SURVEY ON M/S. KAMALA GROUP TO WHICH ASSESSEE BELONGED AND WAS FOUND TO BE RELATED TO THE ASSESSE E. IT IS ONLY ON THE BASIS OF SAID DOCUMENT THE ADDITION WAS MADE BY THE AO. THE LD. D.R. SUBMITTED THAT THE REVENUE HAS ALSO CHALLENGED THE PART DELETION OF ADDITION BY THE LD. CIT(A) BY FILING OF CROSS APPEAL IN THE CURRENT YEAR L WHERE IN THE REVENUE HAS CHALLENGED THE PART DELETION OF ADDITIO N TO THE TUNE OF RS. 35.02 CR BY THE LD. CIT(A) BY DESCRIBI NG THESE DOCUMENTS ARE DUMB DOCUMENTS WHEREAS AS A MATTER OF FACT THESE WERE NOT DUMB DOCUMENT BUT A VALID EVIDENCES RECOVERED DURING THE COURSE OF SURVEY FROM THE PRE MISES OF M/S. KAMALA GROUP. THE CONTENTION OF THE ASSESSEE THAT THE ITA NOS.7096/M/2017 & ORS. M/S. MATHURA ENTERPRISES 15 ASSESSEE IS NOWHERE RELATED TO THE M/S. KAMALA GROUP OR ANY OF THE PARTNER CANNOT BE ACCEPTED SPECIALLY WHEN MR . KETAN A. SHAH IN HIS STATEMENT RECORDED UNDER SECTION 131 OF THE ACT DURING THE COURSE OF SURVEY HAS SPECIFICALLY ADMITT ED THE FACT THAT THE DOCUMENT IS RELATED TO THE ASSESSEE ONLY A ND THE CASH RECEIPTS IN THE SAID DOCUMENTS ARE OVER AND ABOVE W HAT HAS BEEN ACCOUNTED FOR IN THE BOOKS OF ACCOUNTS. THE L D. D.R. ALSO TOOK US THROUGH PAGE NO.48 AND 50 OF THE PAPER BOOK ESPECIALLY QUESTION NO.8 & 12 OF THE STATEMENT RECOR DED OF MR KETAN A SHAH DURING SURVEY AND ANSWERS THERETO. TH E LD. D.R. MAINLY HARPED ON THE ADMISSION OF THE ASSESSEE ITSELF DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND THU S THERE IS NO QUESTION OF DUMB DOCUMENT. SO FAR AS THE FINDING S OF LD. CIT(A) ARE CONCERNED THE LD. D.R. CONTENDED THAT LD. C IT(A) HIMSELF WAS NOT SURE WHETHER THE DOCUMENTS FOUND DU RING THE COURSE OF SURVEY RELATING TO THE ASSESSEE WERE DUMB DOCUMENTS OR NOT AS HE MADE ADDITION ON THE BASIS O F THE SAID DOCUMENT BRINGING TO TAX ONLY PART OF THE TOTAL AM OUNT OF CASH AS HAS BEEN MENTIONED IN THE SAID SEIZED PAPER . FINALLY, THE LD. D.R. SUBMITTED THAT THE AO HAS RIGHTLY MADE THE ADDITION AND THE ORDER OF AO DESERVED TO BE UPHELD BY SETTING ASIDE THE ORDER OF THE LD. CIT(A) BY DISMISSING THE APPEAL OF THE ASSESSEE. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE P ARTIES AND PERUSED THE MATERIAL PLACED BEFORE US INCLUDING THE IMPUGNED ORDER AND CASE LAWS CITED BY THE REPRESENT ATIVES. THE UNDISPUTED FACTS ARE THAT THE ASSESSEE IS A PAR TNERSHIP FIRM WHICH IS ONE OF THE GROUP CONCERN OF M/S. KAMAL A GROUP ITA NOS.7096/M/2017 & ORS. M/S. MATHURA ENTERPRISES 16 WHICH WAS SUBJECTED TO SURVEY ON 21.11.2012. DURING T HE COURSE OF SURVEY, A STATEMENT OF MR. KETAN A. SHAH W AS RECORDED WHO IS NOWHERE CONNECTED WITH THE ASSESSEE FIRM. DURING THE COURSE OF SURVEY ON THE M/S. KAMALA GROUP , CERTAIN PAPERS WERE SEIZED OUT OF WHICH PAGE NO.30, 56 & 57 WERE STATED TO BE BELONGING TO THE ASSESSEE WHICH CONTAI N THE DETAILS OF CASH RECEIPTS DURING THE VARIOUS YEARS. HOWEVER, THE SAID DOCUMENTS WERE NOT CERTIFIED OR AUTHENTICA TED BY ANY OF THE PARTNERS OF THE FIRM OR ITS EMPLOYEE. THE SA ID PAGE 30 WAS TITLED PAREL BHOIWADA KAMLA A/C AND OTHER TW O PAGES NO 56 AND 57 WERE WITHOUT ANY HEADINGS. THE A DDITIONS WERE MADE IN THE YEAR 2011-12 AND 2012-13 ON THE B ASIS OF PAGE NO 30 WHEREAS THE ADDITIONS IN AY 2013-14 WERE BASED UPON PAGE 56 AND 57. THE AO ON THE BASIS OF PAGE NO 30 MADE THE ADDITION TO THE INCOME OF THE ASSESSEE AFT ER CONFRONTING THE SAME TO THE ASSESSEE DURING THE ASS ESSMENT PROCEEDINGS TO THE EXTENT OF RS.38.70 CR UNDER SECT ION 68 OF THE ACT BY OBSERVING THAT THE ASSESSEE HAS FAILED T O PROVE AND EXPLAIN THE CASH TRANSACTIONS AND TREATED THEM AS UNEXPLAINED CASH CREDITS MAKING THE ADDITIONS U/S 6 8 OF THE ACT WHEREAS IN THE APPELLATE PROCEEDINGS THE LD. CI T(A) PARTLY DELETED THE ADDITION BY HOLDING THE DOCUMENT FOUND AND IMPOUNDED DURING THE COURSE OF SURVEY ESPECIALLY TH E PAGE NO.30,56 & 57 WHICH CONTAINED THE DETAILS OF THE CAS H ON VARIOUS DATES AS DUMB DOCUMENTS. HOWEVER LD CIT(A ) DIRECTED THE AO TO ESTIMATE THE INCOME @ 9.5% OF TH E TOTAL CASH TRANSACTIONS OF RS.38.70 CRORES IN AY 2011-12 I N ORDER TO ASSESS THE PROFIT TO TAX ON THE BASIS THAT ASSESSEE HAS SHOWN ITA NOS.7096/M/2017 & ORS. M/S. MATHURA ENTERPRISES 17 THE NET PROFIT OF 6.20% TO 9.48% IN THE FOUR YEARS THEREBY PARTLY SUSTAINING THE ADDITION TO THE EXTENT OF RS.3,67,65,000/-. THE ASSESSEE HAS CHALLENGED THE PA RT SUSTENANCE OF ADDITION @ 9.5% OF THE TOTAL AMOUNT O F RS.38.70 CR ON THE GROUND THAT ONCE THE LD. CIT(A ) HAS HELD THE PAPERS IMPOUNDED FROM THE PREMISES OF M/S KAMA LA GROUP AS NOT CERTIFIED AND UNAUTHENTICATED BY ANY OF THE PARTNERS OF THE FIRM OR ANY OF THE EMPLOYEES OF THE FIRM AND THUS TREATED THE SAME AS DUMB DOCUMENTS. ANY ADDITI ON AS PER THE ASSESSEE BASED ON THE SAID DUMB DOCUMENTS I S BAD IN LAW. THE LD COUNSEL CONTENDED THAT THE ADDITION @ 9 .5% ON THE SAID AMOUNT OF CASH TRANSACTIONS OF RS. 38.70 CR WAS TOTALLY BAD IN LAW AND DESERVED TO BE DELETED. WHE REAS, ON THE OTHER HAND, REVENUE HAS CHALLENGED THE ORDER OF LD. CIT(A) AGAINST THE DELETION OF ADDITION OF RS.38.70 C R WHICH WAS BASED UPON THE EVIDENCES/DOCUMENTS AS FOUND DU RING THE COURSE OF SURVEY ON THE M/S. KAMALA GROUP AND RE LATED TO THE ASSESSEE AS THE ASSESSEE IS AS GROUP CONCERN OF THE M/S KAMALA GROUP BY TREATING THE SAME AS DUMB DOCUMENTS AND DIRECTING THE AO ONLY TO ASSESSEE 9.50% OF THE SAID AMOUNT. IN THE CURRENT YEAR, THE ADDITION IS BASED UPON THE PAGE NO.30 WHICH IS TITLED AS PAREL BHOIWADA KAMALA A/C. FO R THE SAKE OF BETTER UNDERSTANDING, THE SAME IS EXTRACTED BELOW : ITA NOS.7096/M/2017 & ORS. M/S. MATHURA ENTERPRISES 18 10. A PERUSAL OF THE SAID PAPER REVEALS THAT THERE WERE ENTRIES FROM 08.07.2010 TO 26.4.11 WHICH WAS UNSIGNED , UNAUTHENTICATED AND UNCERTIFIED BY EITHER ANY OF TH E PARTNERS OR EMPLOYEES OF THE ASSESSEE FIRM. THE AO ADDED THE TOTAL CASH UP TO 30.03.11 AGGREGATING TO RS.38.70 CR IN THE C URRENT YEAR AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT. DURING THE COURSE OF SURVEY, THE STATEMENT RECORDED OF MR. KETAN A. SHAH WHEREIN HE ADMITTED THAT THE SAID CAS H WAS OVER AND ABOVE HAS BEEN ACCOUNTED FOR IN THE BOOKS OF ACCOUNTS AND ALSO SUBMITTED THAT THE SAID CASH WAS RECEIVED ITA NOS.7096/M/2017 & ORS. M/S. MATHURA ENTERPRISES 19 IN ORDER TO INCUR EXPENSES WHICH COULD NOT BE ACCOU NTED FOR IN THE BOOKS OF ACCOUNTS. WE HAVE GONE THROUGH THE STATEMENT OF MR. KETAN A. SHAH RECORDED DURING THE C OURSE OF SURVEY UNDER SECTION 131 OF THE ACT AT THE PREMISES OF M/S KAMALA GROUP WHO STATED THAT HE IS CONNECTED WITH V ARIOUS GROUP CONCERNS AND DERIVING INCOME BY WAY OF SALARY , SHARE OF PROFIT, INTEREST ON CAPITAL AND REMUNERATION FROM T HE FIRM, BUT NOWHERE HIS ACTIVITY WITH THE FIRM IS ESTABLISHED AND NOWHERE IT IS STATED THAT THE SAID PAGES BELONGED TO MATHUR A ENTERPRISES. THERE IS NO AUTHENTICATION OR CERTIFI CATION OR SIGNATURE ON THE SAID PAGE NO.30 BY ANY OF THE PART NERS OF THE ASSESSEE FIRM. KEEPING IN VIEW OF THE SAID FACTS AN D THE RATIO AS LAID DOWN BY VARIOUS JUDICIAL FORUMS, WE ARE IN AGREEMENT WITH THE FINDING OF THE LD. CIT(A) THAT THIS DOCUME NT IS NOTHING BUT A DUMB DOCUMENT. ONCE THE FIRST APPELL ATE AUTHORITY HAS REACHED A CONCLUSION THAT DOCUMENT IS A DUMB ANY FURTHER ADDITION ON THE BASIS OF SAID DOCUMENT IS ALSO NOT CORRECT UNDER LAW AND HAS TO BE STRUCK DOWN AND DEL ETED. IN OUR OPINION, THE AO SHOULD HAVE DONE THE FURTHER ENQ UIRES ON THE BASIS OF THESE DOCUMENTS AND THE ADDITION, IF AT ALL, WERE REQUIRED TO BE MADE THAT HAS TO BE WITH THE CORROBO RATIVE EVIDENCES AND NOT ON THE BASIS OF THESE DOCUMENTS A LONE. IN THE CASE OF ATUL KUMAR JAIN VS. DCIT (SUPRA), THE C O-ORDINATE BENCH OF THE TRIBUNAL HAS HELD THAT AO WAS NOT JUST IFIED IN DECIPHERING THE FIGURES ON THE PAPER AT HIS WHIMS A ND WISHES BASED ON UNFOUNDED PRESUMPTIONS AND CONJECTURES WIT HOUT BRINGING ANY CORROBORATIVE MATERIAL EVIDENCE IN SUP PORT THEREOF AND SAME CANNOT FORM THE BASIS FOR ASSESSIN G THE ITA NOS.7096/M/2017 & ORS. M/S. MATHURA ENTERPRISES 20 UNDISCLOSED INCOME BY WAY OF SALE PROCEEDS OF PROPE RTY. IN THE CASE OF ACIT VS. RADHESHYAM PODDAR (SUPRA), THE CO- ORDINATE BENCH OF THE TRIBUNAL HAS HELD THAT THE PR ESUMPTION UNDER SECTION 132(4A) WAS REBUTTABLE AND ASSESSEE H AVING FILED AMPLE EVIDENCES TO REVERT THE PRESUMPTION, NO ADDITION CAN BE MADE ON THE BASIS OF UNSIGNED MEMORANDUM OF UNDERSTANDING BETWEEN THE ASSESSEE AND HIS EMPLOYER . IN THE CASE OF JAYA S. SHETTY VS. ACIT (SUPRA) IT HAS BEEN H ELD THAT ADDITIONS BASED ON CONJECTURES, SURMISES AND PRESUMP TION NOT SUPPORTED BY ANY EVIDENCES/DOCUMENTS ETC. FOUND IN S EARCH HAVE TO BE DELETED. IT HAS BEEN HELD THAT UNDISCLO SED INCOME HAS TO BE TREATED ON THE BASIS OF EVIDENCES, DOCUMEN TS, MATERIAL AND INFORMATION FOUND DURING THE SEARCH AN D IT HAS TO BE AUTHENTIC, RELIABLE AND VERIFIABLE INFORMATION. MOREOVER, THE STATEMENT OF MR. KETAN A. SHAH WHO IS ASSOCIATED WITH M/S. KAMALA GROUP IS NOT RELEVANT IN THE CASE OF TH E ASSESSEE AS THE ASSESSEE HAS NOT DEVELOPED ANY PROJECT OR EN TERED INTO ANY MOU UNDER THE NAME PAREL BHOIWADA KAMALA A/C AN D THEREFORE, THE SAID STATEMENT OF MR. KETAN A. SHAH D OES NOT HAVE ANY EVIDENTIARY VALUE. THE CASE OF THE ASSESSE E IS SUPPORTED BY A SERIES OF DECISIONS NAMELY PAUL MATH EWS AND SONS VS. CIT (SUPRA) AND CIT VS. S. KHADER KHAN SON ( SUPRA), THE LATTER ONE HAS ALSO BEEN AFFIRMED BY THE HONBL E SUPREME COURT WHEREIN THE RATIO IS THAT THE STATEMENT DURIN G SURVEY HAS NO EVIDENTIARY VALUE WHERE THERE IS NO CORROBOR ATIVE MATERIALS/EVIDENCES. IN THE PRESENT CASE THERE IS N O BASIS FOR THE ADDITION AS THE STATEMENT RECORDED DURING SURVE Y IS NOT CORROBORATED WITH ANY EVIDENCE. WHATEVER DOCUMENTS WERE ITA NOS.7096/M/2017 & ORS. M/S. MATHURA ENTERPRISES 21 IMPOUNDED ARE DUMB DOCUMENTS. IN THIS CASE THERE IS COMPLETE LACK OF ENQUIRY ON THE PART OF AO AS HE HA S NOT FURTHER CARRIED OUT ANY INVESTIGATION TO ESTABLISH THE VERACITY OF AMOUNTS MENTIONED IN PAGE NO.30 WHICH WAS IMPOUN DED DURING THE COURSE OF SURVEY STATED TO BE RELATING T O THE ASSESSEE. THE CASE OF THE ASSESSEE IS SUPPORTED BY THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. GANGESHWARI METAL PVT. LTD. (SUPRA) WHEREIN THE HON BLE HIGH COURT HAS HELD THAT IN CASE OF LACK OF ENQUIRY ON T HE PART OF AO ONCE THE ASSESSEE HAS FURNISHED ALL THE MATERIALS, NO ADDITION COULD BE MADE UNDER SECTION 68 OF THE ACT. IN THIS CASE, WE FIND THAT AO HAS SIMPLY RELIED ON THE DUMB DOCUMENT NOT BEARING ANY SIGNATURE OR CERTIFICATION OR AUTHENTIC ATION, WHICH ACCORDING TO THE AO IS CASH RECEIVED BY THE ASSESSE E BUT AO HAS NOT REBUTTED THE EXPLANATION OF THE ASSESSEE OF FERED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE CAS E LAW RELIED UPON BY THE REVENUE IN THE CASE OF KALE KHAN MOHAMMAD HANIF VS CIT 1963 50 ITR 1 IS NOT APPLICAB LE AND IS DISTINGUISHABLE ON FACTS. CONSIDERING THE ABOVE FACTS IN TOTALITY AND THE RATIO LAID DOWN BY THE APEX COURT, HIGH COURTS AND OTHER JUDICIAL FORUMS, WE ARE OF THE CONSIDERED VIEW THAT THE ADDITION ON THE BASIS OF DUMB DOCUMENT IS WRONG AND ACCORDINGLY WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND DIRECT THE AO TO DELETE THE ADDITION. THE GROUND NO. 2 RAISE D BY THE ASSESSEE IS ALLOWED. ITA NO.239/M/2018 (REVENUES APPEAL) 11. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: '1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ITA NOS.7096/M/2017 & ORS. M/S. MATHURA ENTERPRISES 22 HAS ERRED IN DELETING THE ADDITION OF RS. 35,02,35, 000/- MADE BY THE A.O ON ACCOUNT OF UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE INCOME-TAX ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN NOT CONSIDERING THAT THERE IS N O EVIDENCE ADDUCED BY THE ASSESSEE FROM ANY OTHER SOURCE SHOWING THE POSITION OF THE ALLEGED ENTRIES AND THE FINANCIAL ABILITY OF THE PARTIES INVOLVED. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN NOT CONSIDERING THAT THE ONUS O F PROVING THE SOURCE OF A SUM OF MONEY FOUND TO HAVE BEEN RECEIVED BY THE ASSESSEE I S ON HIM. IF HE DISPUTES LIABILITY FOR TAX, IT IS FOR HIM TO SHOW THAT THE R ECEIPT WAS NOT INCOME.' 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN NOT CONSIDERING THAT THE FIRM H AD TAKEN SHELTER IN THE NAME OF PROSPECTIVE CUSTOMERS IN THE FORM OF 'FLAT ADVANCES ' IN ORDER TO INTRODUCE THE CONCEALED INCOME. IF THERE IS AN ENTRY IN THE BOOKS OF THE FIRM AND IF THE FIRM IS NOT IN A POSITION TO ESTABLISH THE GENUINENESS OF THE C REDIT ENTRY THEN IT CAN BE ADDED AS INCOME FROM 'UNDISCLOSED SOURCES' IN THE HANDS OF T HE FIRM. IN THIS CASE THE ASSESSEE HAS NOT ADVANCED ANY EVIDENCE OTHER THAN R EPEATEDLY STATING THAT THESE WERE ADVANCES RECEIVED FROM PROSPECTIVE BUYERS. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN NOT CONSIDERING THAT THE ONUS I S ON THE ASSESSEE TO ESTABLISH THAT THE CUSTOMERS HAD ACTUALLY DEPOSITED THE ADVANCES I N CASH AND THAT THE ENTRIES WERE NOT FICTITIOUS. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN NOT CONSIDERING THAT THE BURDEN TO PROVE THE IDENTITY, CAPACITY AND GENUINENESS HAS TO BE ON THE ASSESSEE. AS THE E XPLANATION OFFERED BY THE ASSESSEE IS NOT SUPPORTED BY ANY DOCUMENTARY OR OTH ER EVIDENCE, THEN THE DEEMING FICTION CREDITED BY SECTION 68 CAN BE INVOK ED. 7. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN NOT CONSIDERING THAT CASH CREDITS WHIC H ARE NOT SATISFACTORILY EXPLAINED MAY BE ASSESSED AS INCOME. IT WOULD BE SEEN THAT WH ERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE, THE ASSESSEE IS REQUIR ED TO OFFER AN EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF WITH VALID DOCUMENTAR Y EVIDENCES. IF THE EXPLANATION SO OFFERED IS NOT CONSIDERED AS SATISFACTORY, THE S UM SO CREDITED CAN BE TREATED AS THE ASSESSEE'S INCOME FROM UNDISCLOSED SOURCES. INF ERENCE CAN BE DRAWN FROM THE DECISION OF THE SUPREME COURT IN KALE KHAN MOHAMMAD HANIF V. C.L.T [1963] 50 ITR 1, WHERE IT HAS BEEN LAID DOWN THAT THE ONUS IS ON THE ASSESSEE TO EXPLAIN THE NATURE AND SOURCE OF CASH CREDITS, WHETHER THEY STA ND IN THE ASSESSEE'S ACCOUNT OR IN THE ACCOUNT OF A THIRD PARTY.' 12. THE REVENUE HAS RAISED SEVERAL GROUNDS WHICH AR E ARGUMENTATIVE AND THERE IS ONLY ONE EFFECTIVE ISSUE ITA NOS.7096/M/2017 & ORS. M/S. MATHURA ENTERPRISES 23 COMING OUT OF ALL THE GROUNDS QUA DELETION OF ADDIT ION OF RS. 35,02,35,000. SINCE WE HAVE ALREADY DECIDED THE ASSESSEES APPEAL IN ITA NO.7096/M/2017 FOR A.Y. 20 11- 12 IN FAVOUR OF THE ASSESSEE BY HOLDING THAT THE DO CUMENT IMPOUNDED DURING THE SURVEY WERE MERE DUMB DOCUMENT S AND DELETED THE ADDITION AS SUSTAINED BY THE CIT(A) , THE CROSS APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A) CHALLENGING THE DELETION OF ADDITION OF RS.35,02,35,000/- BY LD. CIT(A) IS DISMISSED. ITA NO.7098/M/2017 A.Y.2012-13,ITA NO.7097/M/2017 FOR A.Y. 2013-14(ASSESSEES APPEALS) ,ITA NO.64/M/2018 A.Y. 2012-13 & ITA NO.240/M/2018 FOR A.Y. 2013-14(REVENUES APPEALS) 13. THE ISSUES RAISED IN APPEAL NO.7098/M/2017 AND GROUND NO.1,2 AND 5 IN ITA NO.7097/M/2017 BOTH ASSESSEES APPEAL ARE IDENTICAL TO ONE AS DECIDED BY US IN ITA NO.70 96/M/2017 AND ISSUE RAISED BY THE REVENUE IN ITA NO. 64/M/201 8 AND ITA 240/M/2018 IS IDENTICAL TO ONE AS DECIDED BY US IN ITA NO. 239/M/2018 (SUPRA). SINCE THE ISSUES INVOLVED IN T HE PRESENT APPEALS ARE IDENTICAL, THEREFORE, OUR DECISION IN T HE ABOVE APPEALS WOULD ,MUTATIS MUTANDIS, APPLY TO THESE APPE ALS AS WELL. 14. THE ISSUE RAISED IN GROUND NO.3 IN THE ASSESSEE S APPEAL IN ITA NO 7097/M/2017 IS AGAINST THE CONFIRMATION O F UNSECURED LOAN OF RS.1,76,00,000/- BY LD. CIT(A) AS MA DE BY THE AO UNDER SECTION 68 OF THE ACT AS UNEXPLAINED C ASH CREDIT. ITA NOS.7096/M/2017 & ORS. M/S. MATHURA ENTERPRISES 24 15. THE FACTS IN BRIEF ARE THAT DURING THE COURSE O F ASSESSMENT PROCEEDINGS THE AO NOTICED THAT ASSESSEE HAS TAKEN SECURED LOANS FROM TWO PARTIES AGGREGATING TO RS.1,76,00,000/-. IN THE CASE OF FIRST PARTY METALLI C INDUSTRIES LTD THE PAN QUOTED WAS INVALID WHEREAS IN THE CASE OF SECOND LENDER SUNIL KUMAR L. MANCHANDA THE PAN WAS NOT MEN TIONED AT ALL. THE AO ADDED THE AGGREGATE OF THESE TWO UNS ECURED LOANS RS. 1,76,00,000/-TO THE INCOME OF THE ASSESSEE U NDER SECTION 68 OF THE ACT BY OBSERVING THAT THE ASSESSE E HAS NOT PROVED CREDITWORTHINESS AND GENUINENESS OF THESE LO ANS. IN THE APPELLATE PROCEEDINGS, THE LD. CIT(A) CONFIRMED THE ADDITION BY HOLDING THAT THE ASSESSEE FAILED TO FIL E THE NECESSARY EVIDENCES BEFORE THE AO THOUGH THE SAME W ERE FILED BEFORE THE LD. CIT(A). THE LD. CIT(A) OBSERVED THAT THE ASSESSEE COULD NOT PROVE AS TO WHAT PREVENTED IT F ROM FILING THESE PAPERS BEFORE THE AO AND THUS DID NOT CONSIDE R THE SAID DOCUMENTS COMPRISING COPIES OF LOAN CONFIRMATIONS, BANK STATEMENTS AND PAN CARDS ETC FILED BY THE ASSESSEE . 16. HAVING HEARD THE RIVAL CONTENTIONS AND PERUSING THE RELEVANT MATERIALS AS PLACED BEFORE US, WE FIND THA T IN THIS CASE THE ASSESSEE COULD NOT PROVE ITS CASE BEFORE T HE AO BY FILING THE NECESSARY EVIDENCES WHICH WERE FILED BEF ORE THE LD. CIT(A) BUT LD. CIT(A) DID NOT CONSIDER THE SAME AND DISMISSED THE ISSUE SIMPLY ON THE GROUND THAT THE ASSESSEE CO ULD NOT EXPLAIN THE REASON FOR NON FILING BEFORE THE AO. I N OUR OPINION, THE ACTION OF THE LD. CIT(A) IN NOT CONSIDE RING THE EVIDENCES FILED BY THE ASSESSEE IS INCORRECT AS HE SHOULD HAVE CONSIDERED THESE EVIDENCES BEFORE DECIDING THE APPE AL AFTER ITA NOS.7096/M/2017 & ORS. M/S. MATHURA ENTERPRISES 25 FOLLOWING DUE PROCESS OF LAW. UNDER THESE CIRCUMSTA NCES, WE EARNESTLY FEEL THAT THE DOCUMENTS FILED BY THE ASSE SSEE BEFORE THE LD. CIT(A) WHICH WERE NOT SUBMITTED BEFORE THE AO NEED TO BE EXAMINED AND VERIFIED. WE, THEREFORE, RESTOR E THE ISSUE TO THE FILE OF AO IN THE INTEREST OF JUSTICE WITH THE DIRECTION TO DECIDE THE SAME DENOVO AFTER PROVIDING A REASONABLE OPPORTUNITY TO THE ASSESSEE. THE GROUND RAISED BY T HE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 17. THE ISSUE RAISED IN GROUND NO.4 IN ITA NO 7097/ M/2017 IS AGAINST THE CONFIRMATION OF ADDITION OF RS.29 LAK HS BY LD. CIT(A) EVEN THOUGH ALL THE NECESSARY EVIDENCES WERE FILED BEFORE THE LD. CIT(A). 18. THE FACTS IN BRIEF ARE THAT IN THE ASSESSMENT P ROCEEDINGS, THE AO OBSERVED THAT ASSESSEE HAS CHARGED A SUM OF RS.29 LAKHS IN THE PROFIT & LOSS ACCOUNT ON ACCOUNT OF CO MPENSATION PAID. THEREAFTER, THE AO ISSUED SHOW CAUSE NOTICE D ATED 04.09.15 ASKING THE ASSESSEE TO FURNISH THE JUSTIFICA TION FOR CLAIM OF THESE EXPENSES. HOWEVER, THE ASSESSEE DID N OT FILE NECESSARY EVIDENCES BEFORE THE AO SUCH AS NAME AND PAN NUMBER OF THE PAYEE AND ULTIMATELY THE AO ADDED THE SAME TO THE INCOME OF THE ASSESSEE. 19. IN THE APPELLATE PROCEEDINGS, THE ASSESSEE FILE D BEFORE THE LD. CIT(A) THE NECESSARY EVIDENCES IN THE FORM O F IT RETURN OF THE PAYEE, COMPUTATION OF INCOME, CONFIRM ATION OF ACCOUNTS AND ALSO DETAILS OF PERSONS TO WHOM THE COMPENSATION WAS PAID. HOWEVER, THE LD. CIT(A) DID NOT ITA NOS.7096/M/2017 & ORS. M/S. MATHURA ENTERPRISES 26 CONSIDER THE SAME AND DISMISSED THE APPEAL SOLELY O N THE GROUND THAT THESE PAPERS WERE NOT SUBMITTED BEFORE THE AO AND THE ASSESSEE COULD NOT GIVE REASONABLE EXPLANAT ION FOR NON SUBMISSION OF THESE PAPERS. 20. HAVING HEARD AND PERUSED THE RECORD, WE FIND THA T THE ACTION OF THE LD. CIT(A) IN NOT CONSIDERING THE DOC UMENTS AS FILED BY THE ASSESSEE IS NOT APPRECIATED AS THIS IS AGAINST THE BASIC PRINCIPLES OF NATURAL JUSTICE. IN VIEW OF THE SAID FACTS, WE ARE OF THE VIEW THAT THESE DOCUMENTS NEED TO BE VER IFIED AND EXAMINED AT THE LEVEL OF THE AO TO MEET THE ENDS O F JUSTICE. ACCORDINGLY, WE RESTORE THIS ISSUE BACK TO THE FILE OF THE AO WITH A DIRECTION THAT A REASONABLE OPPORTUNITY OF H EARING MAY BE AFFORDED TO THE ASSESSEE TO FILE ALL THESE DOCUM ENTS AND THE CASE MAY BE DECIDED DENOVO AS PER LAW AND FACTS ON RECORD. THE GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 21. IN THE RESULT THE APPEALS BY THE ASSESSEE IN ITA NO.ITA NO. 7096/M/1017 AND 7098/M/2017 ARE PARTLY ALLOWED AND ITA NO.7097/M/2017 IS PARTLY ALLOWED FOR STATISTICA L PURPOSES WHEREAS ALL THE THREE APPEALS OF THE REVENUE ARE DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28.03.2018. SD/- SD/- (MAHAVIR SINGH) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 28.03.2018. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT ITA NOS.7096/M/2017 & ORS. M/S. MATHURA ENTERPRISES 27 THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY /ASSTT. REGISTRAR, ITAT, MUMBAI.