LEGAL HEIRS OF LATE SHREEVALLABH DAMANI, MUMBAI V. ACIT CEN CIR 11, MUMBAI

ITA 7282/MUM/2010

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7063 (ITAT-MUMBAI)
• Duration Of Justice: 7 year(s) 7 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 03-02-2015
• Assessment Year: 2002-2003
• Appeal Filed On: 25-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Depreciation; Search and seizure; Share purchase agreement; Opportunity of being heard; Question of law; Accommodation entries; Block assessment; Right to appeal; Reason to believe; Unabsorbed depreciation
• Section: 69C; 143(3); 133A; 153A; 133(6); 32; 147; 131; 68; 69; 148; 37; 132; 144; 139

Judgement Text

, , F , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F, MUMBAI , . . , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI N.K. PRADHAN, ACCOUNTANT MEMBER ITA NOS.7282 TO 7285/MUM/2010 ASSESSMENT YEARS: 2002-03, 2003-04, 2005-06 & 2006-07 LEGAL HEIRS OF LATE SHREEVALLABH DAMANI 50A AMITA, 7 GEN. J.B.MARG NARIMAN POINT, MUMBAI 400 021. / VS. THE ASST.COMMISSIONE R OF INCOME-TAX CENTRAL CIRCLE 11 MUMBAI. ( !'# /ASSESSEE) ( $ / REVENUE) P.A. NO. AAGPD5311D. !'# / ASSESSEE BY SHRI SHASHI TULSIAN $ / REVENUE BY SHRI S. PADMAJA-DR % $& ' #( / DATE OF HEARING : 31/05/2018 ' #( / DATE OF ORDER: 14/06/2018 LEGAL HEIRS OF LATE SHREEVALLABH DAMANI ITA NO.7282 TO 7285/MUM/2010 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THIS BUNCH OF FOUR APPEALS IS BY THE ASSESSEE AGAI NST THE IMPUGNED ORDERS ALL DATED 04/08/2010 OF THE LD. FIR ST APPELLATE AUTHORITY, MUMBAI. THE ASSESSEE HAS ALS O FILED APPLICATION UNDER RULE 11 OF THE APPELLATE TRIBUNAL RULES, 1963, FOR ADMISSION OF ADDITIONAL GROUND, WHICH IS AS UNDER: THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS. 1,76,75,322/- IN THE ASSESSMENT UNDER SECTION 153A OF THE I.T.ACT AS NO RELEVANT OR INCRIMINATING MATERIAL OR EVIDENCE WAS FOUND OR SEIZED DURING THE COURSE OF SEARCH REFLECTING UNDISCLOSED INCOME. 2. DURING HEARING THE LEARNED COUNSEL FOR THE ASSES SEE SHRI SHASHI TULSIYAN CONTENDED THAT IT IS PURELY A LEGAL GROUND THEREFORE, IN VIEW OF THE DECISION FROM HON'BLE APE X COURT IN NTPC LIMITED VS. CIT 229 ITR 383 (SUPREME COURT), S PECIAL BENCH DECISION OF THE TRIBUNAL IN THE CASE OF AL CA RGO LOGISTICS LTD. VS DCIT (ITA NO. 5018 TO 5022 & 5059/M/2010), THE LEGAL ISSUE CAN BE RAISED AT ANY TIME. ON THE OTHER HA ND, MS. S PADMAJA, LEARNED CIT-DR, CONTENDED THAT IT IS AN AF TERTHOUGHT LEGAL HEIRS OF LATE SHREEVALLABH DAMANI ITA NO.7282 TO 7285/MUM/2010 3 AND THIS GROUND HAS BEEN RAISED FOR THE FIRST TIME BEFORE THIS TRIBUNAL THEREFORE, MAY NOT BE ADMITTED. 2.1 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL AVAILABLE ON RECORD. BEFORE ADVERTING FURTHER, WE ARE REPRODUCING HEREUNDER THE RELEVANT PORTION FROM THE AFORESAID ORDER FROM HON'BLE APEX COURT IN THE CASE OF NTPC LTD VS. CIT (SUPRA) FOR READY REFERENCE AND ANALYSI S. UNDER SECTION 254 OF THE INCOME-TAX ACT, 1961, THE APPELLATE TRIBUNAL MAY, AFTER GIVING BOTH THE PARTI ES TO THE APPEAL AN OPPORTUNITY OF BEING HEARD, PASS SUCH ORD ERS THEREON AS IT THINKS FIT. THE POWER OF THE TRIBUNAL IN DEALING WITH APPEALS IS THUS EXPRESSED IN THE WIDEST POSSIB LE TERMS. THE PURPOSE OF THE ASSESSMENT PROCEEDINGS BE FORE THE TAXING AUTHORITIES IS TO ASSESS CORRECTLY THE T AX LIABILITY OF AN ASSESSEE IN ACCORDANCE WITH LAW. IF, FOR EXAM PLE, AS A RESULT OF A JUDICIAL DECISION GIVEN WHILE THE APPEA L IS PENDING BEFORE THE TRIBUNAL, IT IS FOUND THAT A NON -TAXABLE ITEM IS TAXED OR A PERMISSIBLE DEDUCTION IS DENIED, THERE IS NO REASON WHY THE ASSESSEE SHOULD BE PREVENTED FROM RAISING THAT QUESTION BEFORE THE TRIBUNAL FOR THE F IRST TIME, SO LONG AS THE RELEVANT FACTS ARE ON RECORD IN RESPECT OF THE ITEM. THERE IS NO REASON TO RESTRICT THE POWER OF T HE TRIBUNAL UNDER SECTION 254 ONLY TO DECIDE THE GROUNDS WHICH ARISE FROM THE ORDER OF THE COMMISSIONER OF INCOME-TAX (A PPEALS). BOTH THE ASSESSEE AS WELL AS THE DEPARTMENT HAVE A RIGHT TO FILE AN APPEAL/CROSS-OBJECTIONS BEFORE THE TRIBUNAL . THE TRIBUNAL SHOULD NOT BE PREVENTED FROM CONSIDERING QUESTIONS OF LAW ARISING IN ASSESSMENT PROCEEDINGS, ALTHOUGH NOT RAISED EARLIER. THE VIEW THAT THE TRIB UNAL IS CONFINED ONLY TO ISSUES ARISING OUT OF THE APPEAL B EFORE THE COMMISSIONER (APPEALS) IS TOO NARROW A VIEW TO TAKE OF THE POWERS OF THE TRIBUNAL. LEGAL HEIRS OF LATE SHREEVALLABH DAMANI ITA NO.7282 TO 7285/MUM/2010 4 UNDOUBTEDLY, THE TRIBUNAL HAS THE DISCRETION TO ALL OW OR NOT TO ALLOW A NEW GROUND TO BE RAISED. BUT WHERE THE T RIBUNAL IS ONLY REQUIRED TO CONSIDER THE QUESTION OF LAW AR ISING FROM FACTS WHICH ARE ON RECORD IN THE ASSESSMENT PROCEED INGS, THERE IS NO REASON WHY SUCH A QUESTION SHOULD NOT B E ALLOWED TO BE RAISED WHEN IT IS NECESSARY TO CONSID ER THAT QUESTION IN ORDER TO CORRECTLY ASSESS THE TAX LIABI LITY OF AN ASSESSEE. DURING THE ASSESSMENT YEAR 1978-79, THE ASSESSEE HA D DEPOSITED ITS FUNDS WHICH WERE NOT IMMEDIATELY REQU IRED ON SHORT-TERM DEPOSITS WITH BANKS. INTEREST RECEIVED O N SUCH DEPOSITS DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 1978-79 AMOUNTED TO RS. 22,84,994. THIS WAS OFFERED BY THE ASSESSEE FOR ASSESSMENT AND THE ASSESSMENT WAS COMPLETED ON THAT BASIS. BEFORE THE COMMISSIONER OF INCOME-TAX (APPEALS), A NUMBER OF G ROUNDS WERE TAKEN BY THE ASSESSEE CHALLENGING THE ASSESSME NT. HOWEVER, THE INCLUSION OF THIS AMOUNT OF RS. 22,84, 994 WAS NEITHER CHALLENGED BY THE ASSESSEE NOR CONSIDERED B Y THE COMMISSIONER OF INCOME-TAX (APPEALS). FROM THE ORDE R OF THE COMMISSIONER OF INCOME-TAX (APPEALS), THE ASSESSEE FILED AN APPEAL BEFORE THE TRIBUNAL. THE INCLUSION OF THE SAID AMOUNT OF RS. 22,84,994 WAS NOT OBJECTED TO EVEN IN THE GROUNDS OF APPEAL AS ORIGINALLY FILED BEFORE THE TR IBUNAL. HOWEVER, BY A FORWARDING LETTER DATED JULY 16, 1983 , THE FOLLOWING ADDITIONAL GROUNDS WERE SOUGHT TO BE RAIS ED BY THE ASSESSEE: (1) THAT THE SUM OF RS. 22,84,994 DED UCTED FROM 'STATEMENT OF EXPENDITURE DURING CONSTRUCTION' COULD NOT BE INCLUDED IN THE TOTAL INCOME; (2) THAT ON AD MISSION (ERRONEOUS), NO INCOME (THE SUM OF RS. 22,84,994) C OULD BE INCLUDED IN THE TOTAL INCOME; AND (3) THAT THE AUTH ORITIES BELOW HAD ERRED AND FAILED IN THEIR DUTY IN NOT ADJ UDICATING THE FACTS AND EVIDENCE ON RECORD AND MECHANICALLY I NCLUDED RS. 22,84,994 IN THE TOTAL INCOME. THE ASSESSEE CON TENDED THAT IT LEARNT THAT THE INTEREST EARNED BEFORE THE SETTING UP OF BUSINESS WAS NOT TAXABLE AS INCOME AND IT WENT TO R EDUCE THE CAPITAL COST OF THE PLANT AND HENCE INCLUDED TH E ABOVE THREE GROUNDS IN ITS GROUNDS OF APPEAL. HOWEVER, TH E TRIBUNAL DECLINED TO ENTERTAIN THE THREE ADDITIONAL GROUNDS. THE TRIBUNAL DIRECTLY REFERRED TO THE SUPREME COURT THE QUESTION WHETHER WHERE, ON THE FACTS FOUND BY THE I NCOME- TAX AUTHORITIES, A QUESTION OF LAW AROSE (ALTHOUGH NOT RAISED LEGAL HEIRS OF LATE SHREEVALLABH DAMANI ITA NO.7282 TO 7285/MUM/2010 5 BEFORE THE AUTHORITIES) WHICH BORE ON THE TAX LIABI LITY OF THE ASSESSEE THE TRIBUNAL HAD JURISDICTION TO EXAMINE T HE SAME: HELD, THAT THE TRIBUNAL HAD JURISDICTION TO EXAMINE A QUESTION OF LAW WHICH AROSE FROM THE FACTS AS FOUND BY THE INCOME-TAX AUTHORITIES AND HAVING A BEARING ON THE TAX LIABILITY OF THE ASSESSEE. 2.2 IN THE AFORESAID ORDER THE HON'BLE APEX COURT H AS CLEARLY HELD THAT THE TRIBUNAL HAS JURISDICTION TO EXAMINE A QUESTION OF LAW, WHICH AROSE FROM THE FACTS AS FOUND BY THE INCOME TAX AUTHORITIES AND HAVING A BEARING ON THE TAX LIABILI TY OF THE ASSESSEE AND A LEGAL QUESTION CAN BE RAISED. THIS DECISION WAS FOLLOWED BY THE SPECIAL BENCH OF THE TRIBUNAL AT MU MBAI IN THE CASE OF AL CARGO GLOBAL LOGISTICS LIMITED VS. D CIT (SUPRA) WHEREIN IT WAS HELD AS UNDER: FURTHER THE HON'BLE APEX COURT IN VERY CLEAR TERMS HAS HELD THAT THE TRIBUNAL WILL HAVE DISCRETION TO ALLO W OR NOT TO ALLOW A NEW GROUND TO BE RAISED, BUT WHERE T HE TRIBUNAL IS ONLY REQUIRED TO CONSIDER A QUESTION OF LAW ARISING FROM THE FACTS WHICH ARE ON RECORD IN THE ASSESSMENT PROCEEDINGS, IT FAILS TO SEE WHY SUCH A QUESTION SHOULD NOT BE ALLOWED TO BE RAISED WHEN IT IS NECESSARY TO CONSIDER THAT QUESTION IN ORDER TO COR RECTLY ASSESS THE TAX LIABILITY OF AN ASSESSEE. THE POSIT ION OF THE ASSESSEE IN THE CASE AT HAND IS SIMILAR TO THE POSITION OF NTPC, AS BOTH OF THEM ARE APPELLANTS. THEREFORE, ON THE BASIS OF THE DECISION, IT ABUNDAN TLY CLEAR THAT IF THE PURE QUESTION OF LAW ARISES FOR W HICH FACTS ARE ON RECORD OF THE AUTHORITIES BELOW, SUCH A LEGAL HEIRS OF LATE SHREEVALLABH DAMANI ITA NO.7282 TO 7285/MUM/2010 6 QUESTION SHOULD BE ALLOWED TO BE RAISED, IF IT IS NECESSARY TO DO SO TO ASSESS THE CORRECT TAX LIABIL ITY CONSIDERING THE TOTALITY OF FACT AND THE AFORESAID DECISIONS, THE LEGAL GROUND RAISED BY THE ASSESSEE IS ALLOWED. 3. NOW WE SHALL DEAL WITH THE SUBMISSIONS OF LEARNE D CIT- DR, WHEREIN IT WAS CONTENDED THAT THE ISSUE PERTAIN S TO ADDITION MADE UNDER SECTION 68 OF THE INCOME TAX AC T, 1961 (HEREINAFTER THE ACT) ON ACCOUNT OF BOGUS LONG TERM CAPITAL GAINS AND COMMISSION PAID OUT ON ACCOUNT OF THESE L ONG TERM CAPITAL GAINS TRANSACTION. OUR ATTENTION WAS INVIT ED TO THE ASSESSMENT ORDER (PARA 11.2) PAGE 21, WHEREIN REFER ENCE HAS BEEN MADE TO THE STATEMENT OF SHRI SUJAL C SHAH, RE CORDED ON OATH UNDER SECTION 131 OF THE ACT, DURING SURVEY UN DER SECTION. 133A OF THE ACT CARRIED OUT AT M/S. DPS SH ARES & SECURITIES PVT. LTD. THE LEARNED CIT-DR RELIED UPO N THE DECISION IN THE CASE OF CIT VS. S AJIT KUMAR (2018) 93 TAXMAN.COM 294 (SUPREME COURT) WHEREIN IT WAS HELD THAT ANY MATERIAL OR EVIDENCE FOUND/COLLECTED IN A SURVEY WH ICH HAS BEEN SIMULTANEOUSLY MADE AT THE PREMISES OF THE CON NECTED PERSON, CAN BE UTILIZED WHILE MAKING THE ASSESSMENT AS IT LEGAL HEIRS OF LATE SHREEVALLABH DAMANI ITA NO.7282 TO 7285/MUM/2010 7 WOULD FALL UNDER THE WORD AND SUCH OTHER MATERIAL OR INFORMATION AS ARE AVAILABLE WITH THE ASSESSING OFF ICER AND RELATABLE TO SUCH EVIDENCE THE CRUX OF THE ARGUMEN T BY THE LEARNED CIT-DR IS THAT THE ASSESSMENT UNDER SECTION . 153A HAS BEEN MADE ON INCRIMINATING MATERIAL THEREFORE, SUCH ASSESSMENT MUST BE UPHELD. ALTERNATIVELY, WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED CIT-DR CONTENDED THAT WHE THER OR NOT THE ADDITION WAS MADE BASED ON INCRIMINATING MA TERIAL AND NO DISCUSSION HAS BEEN MADE IN THE ASSESSMENT ORDER/IMPUGNED ORDER THEREFORE, THE MATTER SHOULD B E REMANDED TO THE FILE OF THE LEARNED CIT(A). OUR AT TENTION WAS INVITED TO THE DECISION OF THE SPECIAL BENCH (137 I TD 287). THE LEARNED CIT-DR FURTHER CONTENDED THAT THE ASSESSEE HAS NOT FURNISHED THE DETAILS OF ABETMENT FOR THE APPEALS U NDER CONSIDERATION. THIS ARGUMENT OF THE LEARNED DR WAS STRONGLY CONTENDED THAT NECESSARY DETAILS WERE FILED FOR WHI CH OUR ATTENTION WAS INVITED TO THE DOCUMENT FILED BY THE ASSESSEE AS ASSESSMENT STATUS. THE LEARNED CIT-DR ALSO FILED WRITTEN SUBMISSIONS WHICH ARE KEPT ON RECORD AND ARE BEING CONSIDERED FOR COMING TO A FAIR CONCLUSION. RELIAN CE WAS ALSO LEGAL HEIRS OF LATE SHREEVALLABH DAMANI ITA NO.7282 TO 7285/MUM/2010 8 PLACED UPON THE DECISION FROM HON'BLE BOMBAY HIGH C OURT IN CIT VS. SHYAM R PAWAR (2015) 54 TAXMAN.COM 108 (BOM ). THE ASSESSEE HAS ALSO FILED REJOINDER TO THE WRITTEN SU BMISSIONS FILED BY THE LEARNED CIT-DR. BOTH ARE KEPT ON RECO RD AND CONSIDERED. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD. BEFORE ADVERTING FURTHER, WE ARE SUMMARIZING HEREUNDER THE FACTUAL MATRIX AND TH E STATUS OF ASSESSMENT AS UNDER, SO THAT WE CAN REACH TO A F AIR CONCLUSION: SR NO. PARTICULARS A.Y 2002 - 03 A.Y.2003 - 04 ITA NUMBER 7282/MUM/2010 7283/MUM/2010 1 DATE OF SEARCH 17/01/2007 17/01/2007 2 ORIGINAL RETURN OF INCOME WAS FILED ON 31.03.2003 31.03.2005 3 INCOME DECLARED IN THE ORIGINAL RETURN WAS ACCEPTED U/S. 143(1) ON 31.03.2004 31.03.2006 (ONE YEAR FROM THE END OF THE F.Y. IN WHICH RETURN LEGAL HEIRS OF LATE SHREEVALLABH DAMANI ITA NO.7282 TO 7285/MUM/2010 9 WAS MADE 4 DUE DATE FOR ISSUE OF NOTICE U/S143(2) FOR FRAMING ASSESSMENT U/S 143(3). 31.03.2004 31.03.2006 (TWELVE MONTHS FROM THE END OF THE MONTH IN WHICH THE RETURN IS FURNISHED) 5 STATUS OF ASSESSMENT ON THE DATE OF SEARCH NOT PENDING/CONCLUDED NOT PENDING/CONCLUDED IN THE LIGHT OF THE ABOVE FACTUAL MATRIX, NOW WE SH ALL ANALYZE THE FACTS. IT IS NOTED THAT STATEMENT OF SUJAL C S HAH WAS RECORDED DURING THE COURSE OF SURVEY UNDER SECTION 133A OF THE ACT, ON OATH UNDER SECTION 131 OF THE ACT, AT T HE PREMISES OF M/S DPS SHARES AND SECURITIES PVT LTD. THE CONT ENTION OF THE LEARNED CIT-DR IS THAT EVIDENCE/MATERIAL WAS CO LLECTED DURING SURVEY AND FURTHER THE STATEMENT CAN BE UTIL IZED FOR MAKING BLOCK ASSESSMENT AND PLACED RELIANCE UPON TH E DECISION FROM HON'BLE APEX COURT IN THE CASE OF CIT VS. S AJIT LEGAL HEIRS OF LATE SHREEVALLABH DAMANI ITA NO.7282 TO 7285/MUM/2010 10 KUMAR (SUPRA). IN VIEW OF THIS CLAIM, WE ARE REPRO DUCING THE RELEVANT PORTION FROM THE DECISION FROM HON'BLE APE X COURT AS CONTAINED IN PARA 15 OF THE ORDER: 15. THE POWER OF SURVEY HAS BEEN PROVIDED UNDER SE CTION 133A OF THE I T ACT. THEREFORE, ANY MATERIAL OR EV IDENCE FOUND/COLLECTED IN A SURVEY WHICH HAS BEEN SIMULTAN EOUSLY MADE AT PREMISES OF A CONNECTED PERSON CAN BE UTILI ZED WHILE MAKING THE BLOCK ASSESSMENT IN RESPECT OF AN ASSESSEE UNDER SECTION 158BB READ WITH SECTION 158B H OF THE IT ACT. THE SAME WOULD FALL UNDER THE WORDS A ND SUCH OTHER MATERIALS OR INFORMATION AS ARE AVAILABLE WIT H THE ASSESSING OFFICER AND RELATABLE TO SUCH EVIDENCE O CCURRING IN SECTION 158BB OF THE ACT. IN THE PRESENT CASE, THE AO WAS JUSTIFIED IN TAKING THE ADVERSE MATERIAL COLLEC TED OR FOUND DURING THE SURVEY OR ANY OTHER METHOD WHILE M AKING THE BLOCK ASSESSMENT. 4.1 WE NOTE THAT THE RATIO IN THE AFORESAID CASE EM ANATED FROM THE DECISION FROM HON'BLE MADRAS HIGH COURT TA KEN IN (2008) 300 ITR 152 (MAD), WHEREIN THE FACTS ARE DIF FERENT BECAUSE SURVEY WAS CONDUCTED IN THE CASE OF M/S ELE GANT CONSTRUCTION & INTERIORS LTD., IN CONNECTION TO THE SEARCH CONDUCTED IN CASE OF THE ASSESSEE, WHEREIN DURING S EARCH, INCRIMINATING MATERIAL WAS FOUND SHOWING CASH PAYME NT RECEIVED BY M/S. ELEGANT CONSTRUCTIONS & INTERIOR L TD. FROM THE ASSESSEE. IN THAT CONTEXT THE HON'BLE APEX COU RT OBSERVED/HELD THAT MATERIAL OR EVIDENCE FOUND/COLL ECTED IN A SURVEY WHICH HAS BEEN SIMULTANEOUSLY MADE AT THE PR EMISES LEGAL HEIRS OF LATE SHREEVALLABH DAMANI ITA NO.7282 TO 7285/MUM/2010 11 OF CONNECTED PERSON CAN BE UTILIZED WHILE MAKING TH E BLOCK ASSESSMENT WHEREAS, SURVEY WAS CONDUCTED IN THE CA SE OF SUJAL C SHAH, WHICH WAS NOT IN CONNECTION WITH THE PRESENT ASSESSEE. THIS OBSERVATION IS FORTIFIED FROM THE F ACT THAT THE STATEMENT RECORDED DURING SURVEY PROCEEDING {PG 21 TO 24 OF THE ASSESSMENT ORDER), FROM MR SUJAL C SHAH, WHEREI N ALMOST 23 QUESTIONS WERE ASKED AND NOT A SINGLE QUESTION W AS ASKED WITH RESPECT TO THE PRESENT ASSESSEE. FURTHER, THE SAID STATEMENT WAS NOT BASED ON ANY MATERIAL FOUND, IMPO UNDED DURING SURVEY PROCEEDINGS, CONSEQUENTLY, THE SURVEY CARRIED UPON MR SUJAL SHAH AND THE CONSEQUENT RECORDING OF STATEMENT CANNOT BE STATED IN CONNECTION WITH THE P RESENT ASSESSEE. THUS, SUCH STATEMENT CANNOT BE EQUATED W ITH INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH/SURVEY. IT IS FURTHER NOTED THAT IN THE FAC TS BEFORE HON'BLE APEX COURT IN THE CASE OF S AJIT KUMAR, THE DEPARTMENT CONDUCTED SEARCH PROCEEDINGS IN THE CASE OF THE ASSESSEE WHEREIN EVIDENCES WERE FOUND SHOWING UNDERSTATEMENT OF REAL INCOME OF THE ASSESSEE RELAT ING TO BLOCK PERIOD. ON THE DATE OF SEARCH, SIMULTANEOUS SURV EY WAS LEGAL HEIRS OF LATE SHREEVALLABH DAMANI ITA NO.7282 TO 7285/MUM/2010 12 CONDUCTED UPON M/S ELEGANT CONSTRUCTIONS & INTERIOR LTD, WHO CONSTRUCTED THE RESIDENCE OF THE ASSESSEE. DUR ING SURVEY UPON M/S. ELEGANT CONSTRUCTION & INTERIOR LTD., BOO KS OF ACCOUNT WERE FOUND REFLECTING CASH PAYMENTS AS WELL AS CHEQUE PAYMENTS MADE BY THE ASSESSEE TO M/S ELEGANT CONSTRUCTIONS & INTERIOR LTD FOR CONSTRUCTION OF A BUNGALOW OF THE ASSESSEE. THE CASH WAS NOT REFLECTED IN THE BO OKS OF ASSESSEE AND MAINLY CHEQUE PAYMENTS WERE REFLECTED. IT IS NOT WORTHY THAT THE STATEMENT OF ONE OF THE DIRECTOR OF M/S ELEGANT CONSTRUCTIONS & INTERIOR LTD WAS BASED UPON THE MATERIAL FOUND DURING THE COURSE OF SURVEY AND ON T HAT BASIS HON'BLE APEX COURT OBSERVED/HELD THAT ANY MATERIAL OR EVIDENCE FOUND/COLLECTED CAN BE UTILIZED WHILE MAKI NG THE BLOCK ASSESSMENT WHEREAS IN THE CASE OF THE ASSESSE E NO SUCH INCRIMINATING MATERIAL WAS FOUND DURING SURVEY PROC EEDINGS IN THE CASE OF SHRI SUJAL C SHAH OR IT CAN BE SAID THA T THE STATEMENT OF SHRI SUJAL C SHAH NOWHERE STATES THAT ANY INCRIMINATING MATERIAL PERTAINS TO THE ASSESSEE WAS FOUND OR COLLECTED DURING SURVEY PROCEEDINGS. FURTHER NO IN CRIMINATING MATERIAL WAS FOUND DURING SEARCH PROCEEDINGS IN THE CASE OF LEGAL HEIRS OF LATE SHREEVALLABH DAMANI ITA NO.7282 TO 7285/MUM/2010 13 THE ASSESSEE. THIS OBSERVATION OF OURS AND ASSERTI ONS MADE BY THE LEARNED COUNSEL FOR THE ASSESSEE IS FORTIFIED F ROM THE FACT THAT THE LEARNED ASSESSING OFFICER HAS NOT RELIED U PON ANY SUCH MATERIAL CLAIMED TO BE FOUND/SEIZED FROM THE P REMISES OF THE ASSESSEE WHILE FRAMING THE ASSESSMENT. THEREFO RE THE DECISION IN THE CASE OF S AJIT KUMAR, RELIED UPON B Y LEARNED CIT-DR MAY NOT HELP THE REVENUE. IT IS FURTHER NOT ICED THAT THE SAID JUDGMENT WAS RENDERED IN THE LIGHT OF THE WORDS CONTAINED IN SECTION 158BB OF THE ACT ITSELF, WHICH IS REPRODUCED HEREUNDER FOR READY REFERENCE AND ANALYS IS: 158BB. (1) THE UNDISCLOSED INCOME OF THE BLOCK PERIOD SHA LL BE THE AGGREGATE OF THE TOTAL INCOME OF THE PREVIOU S YEARS FALLING WITHIN THE BLOCK PERIOD COMPUTED, 80 [IN ACCORDANCE WITH THE PROVISIONS OF THIS ACT, ON THE BASIS OF EV IDENCE FOUND AS A RESULT OF SEARCH OR REQUISITION OF BOOKS OF ACCOUNT OR OTHER DOCUMENTS AND SUCH OTHER MATERIALS OR INFO RMATION AS ARE AVAILABLE WITH THE ASSESSING OFFICER 81 AND RELATABLE TO SUCH EVIDENCE], AS REDUCED BY THE AGGREGATE OF T HE TOTAL INCOME, OR AS THE CASE MAY BE, AS INCREASED BY THE AGGREGATE OF THE LOSSES OF SUCH PREVIOUS YEARS, DETERMINED, (A) WHERE ASSESSMENTS UNDER SECTION 143 OR SECTION 144 OR SECTION 147 HAVE BEEN CONCLUDED 82 [PRIOR TO THE DATE OF COMMENCEMENT OF THE SEARCH OR THE DATE OF REQUISITI ON], ON THE BASIS OF SUCH ASSESSMENTS; (B) WHERE RETURNS OF INCOME HAVE BEEN FILED UNDER SECTION 139 83 [OR IN RESPONSE TO A NOTICE ISSUED UNDER SUB-SECTIO N (1) OF SECTION 142 OR SECTION 148 ] BUT ASSESSMENTS HAVE NOT LEGAL HEIRS OF LATE SHREEVALLABH DAMANI ITA NO.7282 TO 7285/MUM/2010 14 BEEN MADE TILL THE DATE OF SEARCH OR REQUISITION, O N THE BASIS OF THE INCOME DISCLOSED IN SUCH RETURNS; 84 [(C) WHERE THE DUE DATE FOR FILING A RETURN OF INC OME HAS EXPIRED, BUT NO RETURN OF INCOME HAS BEEN FILED, (A) ON THE BASIS OF ENTRIES AS RECORDED IN THE BOO KS OF ACCOUNT AND OTHER DOCUMENTS MAINTAINED IN THE NORMA L COURSE ON OR BEFORE THE DATE OF THE SEARCH OR REQUI SITION WHERE SUCH ENTRIES RESULT IN COMPUTATION 81 OF LOSS FOR ANY PREVIOUS YEAR FALLING IN THE BLOCK PERIOD; OR (B) ON THE BASIS OF ENTRIES AS RECORDED IN THE BOO KS OF ACCOUNT AND OTHER DOCUMENTS MAINTAINED IN THE NORMA L COURSE ON OR BEFORE THE DATE OF THE SEARCH OR REQUI SITION WHERE SUCH INCOME DOES NOT EXCEED THE MAXIMUM AMOUN T NOT CHARGEABLE TO TAX FOR ANY PREVIOUS YEAR FALLING IN THE BLOCK PERIOD; (CA) WHERE THE DUE DATE FOR FILING A RETURN OF INC OME HAS EXPIRED, BUT NO RETURN OF INCOME HAS BEEN FILED, AS NIL, IN CASES NOT FALLING UNDER CLAUSE (C);] (D) WHERE THE PREVIOUS YEAR HAS NOT ENDED OR THE D ATE OF FILING THE RETURN OF INCOME UNDER SUB-SECTION (1) O F SECTION 139 HAS NOT EXPIRED, ON THE BASIS OF ENTRIES RELATING TO SUCH INCOME OR TRANSACTIONS AS RECORDED IN THE BOOKS OF ACCOUNT AND OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE ON OR BEFORE THE DATE OF THE SEARCH OR REQUISITION RELATI NG TO SUCH PREVIOUS YEARS; (E) WHERE ANY ORDER OF SETTLEMENT HAS BEEN MADE UN DER SUB-SECTION (4) OF SECTION 245D , ON THE BASIS OF SUCH ORDER; (F) WHERE AN ASSESSMENT OF UNDISCLOSED INCOME HAD BEEN MADE EARLIER UNDER CLAUSE (C) OF SECTION 158BC , ON THE BASIS OF SUCH ASSESSMENT. EXPLANATION.FOR THE PURPOSES OF DETERMINATION OF UNDISCLOSED INCOME, (A) THE TOTAL INCOME OR LOSS OF EACH PREVIOUS YEAR SHALL, FOR THE PURPOSE OF AGGREGATION, BE TAKEN AS THE TOTAL I NCOME OR LOSS COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF 85 [THIS LEGAL HEIRS OF LATE SHREEVALLABH DAMANI ITA NO.7282 TO 7285/MUM/2010 15 ACT] WITHOUT GIVING EFFECT TO SET OFF OF BROUGHT FO RWARD LOSSES UNDER CHAPTER VI OR UNABSORBED DEPRECIATION UNDER S UB- SECTION (2) OF SECTION 32 : 86 [ PROVIDED THAT IN COMPUTING DEDUCTIONS UNDER CHAPTER VI- A FOR THE PURPOSES OF THE SAID AGGREGATION, EFFECT SHALL BE GIVEN TO SET OFF OF BROUGHT FORWARD LOSSES UNDER CH APTER VI OR UNABSORBED DEPRECIATION UNDER SUB-SECTION (2) OF SECTION 32 ;] 87 [(B) OF A FIRM, RETURNED INCOME AND TOTAL INCOME A SSESSED FOR EACH OF THE PREVIOUS YEARS FALLING WITHIN THE BLOCK PERIOD SHALL BE THE INCOME DETERMINED BEFORE ALLOWING DEDU CTION OF SALARY, INTEREST, COMMISSION, BONUS OR REMUNERATION BY WHATEVER NAME CALLED 88 [TO ANY PARTNER NOT BEING A WORKING PARTNER] : PROVIDED THAT UNDISCLOSED INCOME OF THE FIRM SO DETERMINED SHALL NOT BE CHARGEABLE TO TAX IN THE HANDS OF THE PARTNERS, WHETHER ON ALLOCATION OR ON ACCOUNT OF ENHANCEMENT; ] (C) ASSESSMENT UNDER SECTION 143 INCLUDES DETERMINATION OF INCOME UNDER SUB-SECTION (1) OR SUB-SECTION (1B) OF SECTION 143 . (2) IN COMPUTING THE UNDISCLOSED INCOME OF THE BLOC K PERIOD, THE PROVISIONS OF SECTIONS 68 , 69 , 69A , 69B AND 69C SHALL, SO FAR AS MAY BE, APPLY AND REFERENCES TO 'FINANCIA L YEAR' IN THOSE SECTIONS SHALL BE CONSTRUED AS REFERENCES TO THE RELEVANT PREVIOUS YEAR FALLING IN THE BLOCK PERIOD INCLUDING THE PREVIOUS YEAR ENDING WITH THE DATE OF SEARCH OR OF THE REQUISITION. (3) THE BURDEN OF PROVING TO THE SATISFACTION OF TH E ASSESSING OFFICER THAT ANY UNDISCLOSED INCOME HAD A LREADY BEEN DISCLOSED IN ANY RETURN OF INCOME FILED BY THE ASSESSEE BEFORE THE COMMENCEMENT OF SEARCH OR OF THE REQUISI TION, AS THE CASE MAY BE, SHALL BE ON THE ASSESSEE. (4) FOR THE PURPOSE OF ASSESSMENT UNDER THIS CHAPTE R, LOSSES BROUGHT FORWARD FROM THE PREVIOUS YEAR UNDER CHAPTER VI OR UNABSORBED DEPRECIATION UNDER SUB-SEC TION (2) OF SECTION 32 SHALL NOT BE SET OFF AGAINST THE UNDISCLOSED INCOME DETERMINED IN THE BLOCK ASSESSMENT UNDER THI S LEGAL HEIRS OF LATE SHREEVALLABH DAMANI ITA NO.7282 TO 7285/MUM/2010 16 CHAPTER, BUT MAY BE CARRIED FORWARD FOR BEING SET O FF IN THE REGULAR ASSESSMENTS. IF THE AFORESAID PROVISION OF THE ACT IS ANALYSED I T CLEARLY STATES THAT UNDISCLOSED INCOME FOR THE BLOCK PERIOD WILL B E MADE ON THE BASIS OF EVIDENCE FOUND AS A RESULT OF SEARCH OR REQUISITION OF BOOKS OF ACCOUNTS OR OTHER DOCUMENT AND SUCH OTH ER MATERIAL OR INFORMATION AS ARE AVAILABLE WITH THE A SSESSING OFFICER AND RELATABLE TO SUCH EVIDENCE.. IN PARA 15 OF THE ORDER IN THE CASE OF S AJIT KUMAR THE HON'BLE APEX COURT CLEARLY MENTIONS ABOUT ANY MATERIAL OR EVIDENCE FOUND/COLLECTED WHEREAS IN THE CASE OF THE ASSESSE E THE ADDITION HAS BEEN MADE MERELY ON THE BASIS OF THE S TATEMENT WHICH CANNOT BE EQUATED WITH ANY INCRIMINATING MAT ERIAL /EVIDENCE FOUND AND COLLECTED BECAUSE SUCH STATEME NT IS NOT SUPPORTED BY SUCH INCRIMINATING MATERIAL/EVIDENCE F OUND AND COLLECTED AS APPEARING IN SECTION 158BB OF THE ACT. IT IS FURTHER NOTED THAT THE SAID DECISION WAS RENDERED I N CONTEXT OF ASSESSMENT FRAMED UNDER SECTION 158BC OF THE ACT WH ICH FALLS UNDER CHAPTER XIV-B OF THE ACT. AS IS EVIDENT FROM THE PROVISIONS OF SECTION 158BB OF THE ACT, THE SAID SE CTION WAS INCORPORATED AS TO HOW THE UNDISCLOSED INCOME OF TH E BLOCK LEGAL HEIRS OF LATE SHREEVALLABH DAMANI ITA NO.7282 TO 7285/MUM/2010 17 PERIOD IS TO BE CALCULATED. IT IS FURTHER NOTICED THAT CHAPTER XIV-B OF THE ACT COMPRISES OF SECTIONS 158B TO 158B H OF THE ACT AND HAS BEEN MADE OPERATIVE FOR SEARCH ETC., MA DE AFTER 31.05.2003, MEANING THEREBY THE ASSESSMENTS OF SEAR CHES CONDUCTED AFTER 31.05.2003 HAS TO BE DONE UNDER THE PROVISIONS OF SECTION 153A OF THE ACT, WHICH FALLS UNDER COMPLETE CHAPTER I.E. XIV OF THE ACT. THE PROVISIO N OF SECTION 153A OF THE ACT IS MATERIALLY DIFFERENT FROM THE PR OVISION UNDER SECTION 153BC R.W.S 158BB OF THE ACT IN AS MUCH AS SECTION 153 OF THE ACT DO NOT CONTAIN ANY PROVISION DEALING WITH CALCULATION OF UNDISCLOSED INCOME. THEREFORE, T HE DECISION RENDERED BY HON'BLE APEX COURT IN THE LIGHT OF PROV ISIONS OF SECTION 158BC R.W.S. 158BB OF THE ACT CANNOT BE APP LIED IN THE CASE OF THE PRESENT ASSESSEE BEING ASSESSMENT F RAMED UNDER SECTION 153A OF THE ACT. 5. NOW WE SHALL ANALYZE THE STATEMENT TENDERED BY S HRI SUJAL C SHAH (REPRODUCED AT PAGE 21 OF THE ASSESSME NT ORDER), RECORDED DURING SURVEY PROCEEDINGS UNDER SECTION 13 3A OF THE ACT. LEGAL HEIRS OF LATE SHREEVALLABH DAMANI ITA NO.7282 TO 7285/MUM/2010 18 Q1 PLEASE IDENTIFY YOURSELF. PLEASE ALSO CONFIRM THAT AN OATH HAS BEEN A DMI N I STERED ON YOU AND THE CONSEQUENCES OF GIV I NG A FALSE STATEMENT I S E XPLAIN E D T O YOU . AN S : I AM SUJAL CHANDRA K ANT SHAH , S/O . MR . CHANDRAKANT K . SHAH . IN CONFIRM THAT AN OAT H H AS BEEN AD MI N IST ERED O N ME AN D T HE CONSEQ U EN C ES OF GIVING A FAL SE STAT EM ENT HA S BEEN E X P L AINED T O M E . 0 . 2 . W HAT ARE Y O UR S O URCES OF INCOME? ANS : STOCK BROKE R AGE . Q . 3. P L EASE EXPLAI N IT IN DETAI L . ANS: A S MY CARD IS SUSPENDED BY B SE , I HAVE TA KEN NS E TER MINAL -S H IP F R O M ONE OF THE N SE B ROKER , W HO CHARGES ME 1 . 5 % BROKERAGE , IN RETU R N , I CHA RGE MY VARIOUS CLI E NTS 3 . 0 % . Q . 4 . PLEA S E GIVE TH E NAME OF THE B R OKE R FOR WH O M YO U ARE D O IN G TR ADI N G BUSINESS . ANS : EXCE L MER C ANT IL E PRI V AT E LT D . HE IS A NSE BROKER . Q.5 SIN CE W H E N YO U HAV E S T A RT E D THIS BROKERAGE BUSINESS? AN S : I STARTED THIS IN JUNE , 2000 . BEFORE THAT I US ED TO TRADE ON MY TERMINAL FOR VA RI O U S C LIENTS. Q . 6 . OTH E R TH A N TH E SO CALLED BROKE R AGE BUSINESS D ONE BY YOU , HAVE YOU EVER UND E RTOOK ANY OTHER TYPE OF BUSINESS IN SHARES IN ANY OTHER MANNER . IF SO , PL EASE D E SCRIBE IN DE T AILS. AN S : APART FROM T HIS FOR THE YEAR 20 03 - 0 4 AND 200 4- 05 , W E H AD I S S UED OFFMAR KET PURC HA S E BIL LS I N TH E Y EAR 05-06 . Q . 7 . TO W HOM FOR AND IN W HAT SCRIPS YOU HAD B EEN I N DU L GI N G IN OFF-MARKET OP E RATI O N S? AN S : MR . NARESH JAIN & NARESH S EB O O HA V I NG O FFIC E AT BLUE MOON CHAMBERS , N . M . R OAD , FOR T, MUM B AI - 4 00 001 . ON KNO WI NG THAT WE W E R E I N FIN A NC I AL C RUNCH AND TO FACIL I TATE OUR MAR KE T OBL I GATION I . E. PAY-IN OF BS E , A P P R O A C H E D US AN D LEGAL HEIRS OF LATE SHREEVALLABH DAMANI ITA NO.7282 TO 7285/MUM/2010 19 AS K ED THAT THEY W OULD B E HELPFUL TO US FINANCIALLY , PROVIDED WE GIVE AC CO M M O D ATION OF BILL S T O T HEI R C L IE NT S . 0 . 8 . WHO G IVE S T HE NAME OF CLI E N T S AND HO W THEY CAME INTO CONTACT W ITH Y O U? . ANS : W E HAV E N O D I RECT CONTACT W I TH THE BENEFICIARIES . MR . NARESH JA I N & NARES H SABOO USED TO G I VE THE NAME OF BENEFICIARIES WITH ADDRESSES TO US AND AS DES I RED BY THEM , . WE USED TO G I VE . OFF MARKET BILL S/ ACCOMMODATION BILLS . 0 . 9 . PLEASE STATE WHETHER THESE BILLS WERE GENU I NE? ANS : . THESE TRANSACTIONS WERE NOT ON THE BSE TERMINAL , AND HENCE WERE NOT GENUINE . Q1 0. PLEASE EXPLAIN THE MODUS OPERANDI ADOPTED BY YOU, FOR THE ABOVE OFFMARKET/NON GENUINE TRANSACTION AND IN WHAT WAY THE BENEFICIARIES ARE BENEFITED? ANS: AS STATED ABOVE, THIS TRANSACTION WERE ONLY ACCOMMODATION BILLS , GIVEN BY US IN THE NAME OF ULTIMATE BENEFICIARIES , AS REQUIRED BY SHRI NARESH SABOO AND SHRI . NARESH JAIN . WE HAVE NEVER HANDED OVER THESE BILL S T O THE BENEFICIAR I ES DIRECTLY . IN FACT , WE WON ' T BE ABLE TO RECOGNIZE THE BENEF I CIARIES , T O WHOM WE HAVE ISSUED THE BILLS . WE ARE NOT IN A P OSITION EVEN T O G I VE THE DISTINCTIVE NUMBERS OF THE SHARES , AS IN REAL I TY , NO T R ANSACTION W AS DONE OR ; THE BSE FLOOR . Q . 11 .WH ETHER THE S HAR ES W ER E L I STED ON THE BSE ? ANS: THES E SHARE S WE RE NOT TRADED ON THE FLOOR ON BSE , AS TH E S E S H A R ES WERE NOT LIS T E D ON BS E . IN THE Y EAR 2003-04 A ND 2 004 05 ( F . Y . ) , THIS COMP AN IE S W E RE N OT LISTED IN BSE . BUT THE SAI D COMPANIES W ERE L I STED I N B S E IN 20 0 5-06 . I W AN T TO FURTHER CLAR I FY THAT WHEN WE I SSUED TH E PU R CHASE BIL L AT THAT TIME , T H E C OM PANY WAS NOT LI ST E D I N B S E. Q 1 2 PLEASE THE NA M E OF TH E COM P ANIES , FOR W HI C H YOU HAVE ISSUED BOQUS BILLS,ON THE INSTRUCTIONS OF MR. NARESH JAIN AND NARESH SABOO OR ANY OTHER PE R S ON . LEGAL HEIRS OF LATE SHREEVALLABH DAMANI ITA NO.7282 TO 7285/MUM/2010 20 A NS : W E HA VE : IS S U E D THE BOG U S B ILL S O N TH E I N ST RU CT I ONS OF MR . N ARESH JA I N AND N A RE S H SABOO IN ON L Y ON E CO M PANY , WHIC H I S M/S. R O B IS O N W O RLD WI S E L TD . APART F R OM T HIS , I H AVE I SS UE D SO M E BILL S IN M/ S . FASTT RA C T EN TE RTAINMENT LTD. , AS PER THE DIRECTIONS FR O M M R . SIRISH C . SH AH , H A VIN G A DDR E SS AT MEGHDOO T A P TS . , FOURTH FL O OR , M A RINE D RIVE , MUMBA I . Q. 13 . WHAT IS TH E QUANT U M O F SH A RES OF M/S . ROB I N S ON WORLD W I DE LTD AND M /S. FA STTR ACT ENT ERTAI NMENT LTD . FOR W H IC H YO U H AVE I S SU ED BOG U S P UR C H AS E BI LL S . AN S: A S THIS M A T TER I S O L D , I D O N ' T E X ACTL Y R E M E MBER T HE QU A NTUM , BUT AS P E R M Y ME MORY , I N M /S . R OB IN SON W ORLD W IDE LT D AROUND 40 LAC S H A R ES , A N D IN F AS TTRAC T EN TER T AINME N T AR O UND 8-10 L AC S H A R E S . Q . 14 . H AVE Y OU M AI NTAIN ED AN Y R E GISTER FOR THE ABOVE OPERATION ? A N S : WE HAV E M A IN T AINE D T H E DETAILS IN COMPUTER . I AM SUBM I TT I N G HEREW ITH A HA RD AND SO F T COPY OF THE DOCUMENTS/DATA FOR YOUR PERUSAL . Q . 15. HAD YOU BEEN ACCEPTING OR PAYING CASH REGARDING THE ABOVE T R A N S A CTIONS FROM ANYBODY? . ANS : I HAVE NOT ACCEPTED OR PA I D ANY CASH REGARDING THE WHOLE OPERATION FROM ANYBODY, EXCEPT FOR . THE COMMISSION @ ' ONE PAISE PER SHARE , I N CASH FROM SHRI. NARESH SEB O O QND THE SAME AMOUNT OF ONE PAISE PER SHARE W AS RECEIVED BY US FROM MR . SIRISH C. SHAH S/O . MR. CHANDULAL SHAH . Q . 16 . FROM THE DATA FURNISHED BY YOU, IT IS SEEN THAT YOU HAVE GIVEN QUANTITY OF SHARES AND RATE ONLY . HOWEVER , NO INFORMATION IS AVAILABLE ABOUT THE SALES . PLEASE EXPLAIN THE SAME . ANS : AS STATED EARLIER , MY WORK WAS LIMITED TO THE EXTENT OF ISSUING OF PURCHASE BILL AS PER THE REQUIREMENT OF . SHR I. NARESH SABOO TO THE ULTIMATE BENEFICIARIES, WHO ARE KNOWN ONLY TO SHRI . NARESH SEBOO. I AM NOT AWARE, AT WHAT RATE LEGAL HEIRS OF LATE SHREEVALLABH DAMANI ITA NO.7282 TO 7285/MUM/2010 21 AND WHEN THE ULTIMATE BENEFICIARIES HAVE SOLD THESE SHARES . HENCE THESE DATA ARE NOT AVAILABLE WITH ME. Q . 23 . I ONCE AGAIN DRAW YOUR ATTENTION TO THE STATEMENT, GIVEN ABOVE BY YOU THAT YOU HAVE ISSUED BOGUS PURCH ASE BILLS AND IN VERY FEW CASES, SALES BI!LS ALSO ESPEC IALLY AS PER THE REQUIREMENTS OF SHRI NARESH SABOO AND NARESH JAIN , YOU HAVE FURTHER STATED THAT YOU HNVE NOT BEEN ISSU ED THE BILLS DIRECTLV TO THE BENEFICIARIES AND EVEN YOU AR E NOT KNOWING THEM , THE BILLS HAVE BEEN HANDED OVER DIRECTLY TO SHRI NARESH SABOO AND SHRI . NARESH JAIN ONLY . MOREOVER , YOU HAVE NOT ACCEPTED OR PAID/GIVEN AN Y C ASH . DU YOU CONFIRM THE SAME? AN S : YES I DO CONFIRM W HAT I HAVE STATED ABOV E . 5.1 IF THE AFORESAID STATEMENT RENDERED BY SHRI SUJ AL C SHAH, RECORDED UNDER OATH, UNDER SECTION 131 OF THE I T A CT, DURING COURSE OF SURVEY UNDER SECTION 133A OF THE ACT, AT THE PREMISES OF M/S. DPS SHARES & SECURITIES PVT LTD., IS ANALYSED, IN REPLY TO QUESTION NO.7 WITH RESPECT TO WHOM FOR AND IN WHAT SCRIPTS YOU HAVE BEEN INDULGING IN OFF MARKET OPERATION, HE REPLIED THAT MR. NARESH JAIN AND MR N ARESH SABOO, WHO ARE HAVING OFFICE AT BLUE MOON CHAMBERS. IN REPLY TO QUESTION NO.10 WITH RESPECT TO MODUS OPERANDI AD OPTED BY HIM IT WAS REPLIED THAT AS REQUESTED BY SHRI NARESH SABOO & MR. NARESH JAIN SUCH ACCOMMODATION BILLS WERE TRANS ACTED AND WERE NEVER HANDED DIRECTLY TO THE BENEFICIARIES . IT HAS BEEN FURTHER TENDERED THAT SHRI SUJAL C SHAH WAS UN ABLE TO LEGAL HEIRS OF LATE SHREEVALLABH DAMANI ITA NO.7282 TO 7285/MUM/2010 22 RECOGNIZE THE BENEFICIARIES TO WHOM BILLS WERE ISSU ED. IN REPLY TO QUESTION NO.12 TO NAME THE COMPANIES FOR WHICH B OGUS BILLS WERE ISSUED IT HAS BEEN REPLIED THAT THESE WERE ISS UED ON THE INSTRUCTIONS OF SHRI NARESH JAIN AND SHRI NARESH SA BOO. IT IS NOTED THAT IN THE STATEMENT THE NAME OF THE PRESENT ASSESSEE HAS NO WHERE BEEN MENTIONED. IN REPLY TO QUESTION NO.14 WITH RESPECT TO MAINTENANCE OF ANY REGISTER FOR SUCH OPE RATION IT WAS TENDERED THAT THE DETAILS ARE IN THE COMPUTER A ND HARD/SOFT COPY OF THE DOCUMENTS WERE SUBMITTED. IN REPLY TO QUESTION NO.15, WHETHER HE WAS ACCEPTING OR PAYING CASH WITH RESPECT TO THE TRANSACTIONS IT WAS SPECIFICALLY REP LIED THAT HE HAS NOT ACCEPTED OR PAID ANY CASH FOR THE WHOLE OPE RATION FROM ANYBODY EXCEPT THE COMMISSION FROM SHRI C SHAH . THE REPLY IN THE STATEMENT CLEARLY STATES THAT THE PRES ENT ASSESSEE HAS NOT BEEN NAMED BY SHRI SUJAL C SHAH. IN VIEW O F THIS FACTUAL MATRIX, WE FIND MERIT IN THE CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT ADDITION CANNOT BE MA DE UNLESS AND UNTIL IT IS CORROBORATED WITH MATERIAL. ADMITT EDLY STATEMENT IS A GOOD PIECE OF EVIDENCE BUT AT THE SA ME TIME IT LEGAL HEIRS OF LATE SHREEVALLABH DAMANI ITA NO.7282 TO 7285/MUM/2010 23 HAS TO BE CORROBORATED/LINKED TO THE INCRIMINATING MATERIAL OTHERWISE MERE STATEMENT CANNOT STAND ON ITS LEGS. 5.2 ANOTHER ARGUMENT ADVANCED BY THE LEARNED COUNSE L FOR THE ASSESSEE IS WITH RESPECT TO VALUE OF THE STATEM ENT RECORDED DURING SURVEY. OUR ATTENTION WAS INVITED TO THE PR OVISION OF SECTION 133A OF THE ACT. THE LEARNED CIT-DR CONTEN DED THAT THE LEARNED ASSESSING OFFICER HAS ALL THE POWER TO RECORD THE STATEMENT. THE LEARNED COUNSEL FOR THE ASSESSEE IN REPLY CONTENDED THAT THE ACT DOES NOT AUTHORIZE TO RECORD THE SWORN STATEMENT DURING SURVEY PROCEEDINGS. RELIANCE WAS P LACED UPON CERTAIN DECISIONS LIKE PAUL MATHEWS & SONS VS. CIT (129 TAXMAN 416) (KER), MADRAS HIGH COURT IN CIT VS. S K HADER KHAN SON (300 ITR 157) (MAD), PUNE TRIBUNAL IN ANIL NANDKISHORE GOYAL (ITA NO.1256/P/2012 ORDER DATED 19.04.2013), THE RATIO LAID DOWN IN ALL CARGO GLOBA L LOGISTICS LIMITED BY THE SPECIAL BENCH. 5.3 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL AVAILABLE ON RECORD. THERE IS NO DISPU TE TO THE FACT THAT THE STATEMENT OF SHRI SUJAL C SHAH WAS RECORDE D UNDER SECTION 133A OF THE ACT, ON OATH, THEREFORE, IT IS OUR BOUNDED LEGAL HEIRS OF LATE SHREEVALLABH DAMANI ITA NO.7282 TO 7285/MUM/2010 24 DUTY TO EXAMINE THE PROVISION OF SECTION 133A(3) OF THE ACT, WHICH IS REPRODUCED HEREUNDER: '133A. (J) NOTWITHSTANDING ANYTHING IN ANY OTHER PR OVISION, AN INCOME-TAX OFFICER OR ANY INSPECTOR OF INCOME-TA X AUTHORISED BY HIM IN THIS BEHALF MAY ENTER (A) ANY PLACE WITHIN THE LIMITS OF THE AREA ASSIGNE D TO HIM, OR (B) ANY PLACE OCCUPIED BY ANY PERSON IN RESPECT OF WHOM THE INCOME-TAX OFFICER EXERCISES JURISDICTION, AT WHICH A BUSINESS OR PROFESSION IS CARRIED ON, WH ETHER SUCH PLACE BE THE PRINCIPAL PLACE OR NOT OF SUCH BUSINESS OR PROFESSION, AND REQUIRE ANY PROPRIETOR, EMPLOYEE OR ANY OTHER PERSON WHO MAY AT THAT TIME AND PLACE BE ATTE NDING IN ANY MANNER TO, OR HELPING IN THE CARRYING ON OF, SUCH BUSINESS OR PROFESSION TO AFFORD HIM THE NECESSARY FACILITY TO INSPECT SUCH BOOKS OF ACCOUNT OR OTHER DOCUMENTS AS HE MAY REQUIRE AND WHICH MAY BE AVAILABLE AT SUCH PLAC E, AND ON THE INSPECTION OF SUCH ACCOUNTS OR DOCUMENTS HE MAY, IF HE SO DEEMS NECESSARY, PLACE MARKS OF IDENTIFICATIO N THEREON OR CAUSE TO BE MADE EXTRACTS THEREFROM: PROVIDED THAT THE INCOME-TAX OFFICER OR SUCH INSPEC TOR OF INCOME-TAX MAY ENTER ANY PLACE REFERRED TO IN THIS SECTION ONLY DURING SUCH HOURS AS THE PLACE IS OPEN FOR THE CONDUCT OF THE BUSINESS OR PROFESSION: PROVIDED FURTHER THAT WHILE ACTING UNDER, THIS SECT ION THE INCOME-TAX OFFICER OR SUCH INSPECTOR OF INCOME-TAX SHALL NOT REMOVE OR CAUSE TO BE REMOVED FROM THE PLACE WHICH :HE HAS ENTERED ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS. (2) IF A PERSON WHO UNDER SUB-SECTION (2) IS REQUIR ED TO AFFORD FACILITY TO THE INCOME-TAX OFFICER OR THE IN SPECTOR OF INCOME-TAX TO INSPECT BOOKS OF ACCOUNT OR OTHER DOC UMENTS EITHER REFUSES OR EVADES TO DO SO, THE INCOME-TAX O FFICER SHALL HAVE ALL THE POWERS UNDER SUB-SECTIONS (1) AN D (2) OF SECTION 131 FOR ENFORCING COMPLIANCE OF THE REQUIRE MENT MADE.' LEGAL HEIRS OF LATE SHREEVALLABH DAMANI ITA NO.7282 TO 7285/MUM/2010 25 IF THE AFORESAID PROVISION OF THE ACT IS ANALYSED S ECTION 133A(3)(III) EMPOWERS THE LEARNED ASSESSING OFFICER TO RECORD THE STATEMENT BUT THIS STATEMENT IS NOT UNDER OATH. NOW QUESTION ARISES WHETHER SUCH STATEMENT BINDS THE AS SESSEE WHICH IS NOT CORROBORATED BY MATERIAL. THIS ISSUE CAN BE ANALYZED WITH THE HELP OF VARIOUS JUDICIAL DECISION S. ONE SUCH DECISION IS FROM HON'BLE KERALA HIGH COURT IN THE C ASE OF PAUL MATHEWS & SONS (129 TAXMAN 416)(KER), WHEREIN THE H ON'BLE HIGH COURT OBSERVED/HELD AS UNDER: 'SEC. 133A(3)(III) ENABLES THE AUTHORITY TO RECORD THE STATEMENT OF ANY PERSON WHICH MAY BE USEFUL FOR, OR RELEVANT TO, ANY PROCEEDING UNDER THE ACT. SEC. 133 A HOWEVER, ENABLES THE IT AUTHORITY ONLY TO RECORD AN Y STATEMENT OF ANY PERSON WHICH MAY BE USEFUL, BUT DO ES NOT AUTHORIZE FOR TAKING ANY SWORN IN STATEMENT. THE IT ACT, WHENEVER IT THOUGHT FIT AND NECESSARY TO CONFER SUC H POWER TO EXAMINE A PERSON ON OATH, THE SAME HAS BEEN EXPR ESSLY PROVIDED WHEREAS S. 133A DOES NOT EMPOWER ANY ITO T O EXAMINE ANY PERSON ON OATH. THUS, IN CONTRA DISTINC TION, TO THE POWER UNDER S. 133A, S. 132(4) ENABLES THE AUTH ORIZED OFFICER TO EXAMINE A PERSON ON OATH AND ANY STATEME NT MADE BY SUCH PERSON DURING SUCH EXAMINATION CAN ALS O BE USED IN EVIDENCE UNDER THE IT ACT, ON THE OTHER HAND, WHATEVER STATEMENT RECORDED UNDER S. 133A IS NOT GIVEN ANY EVIDENTIARY VALUE OBVIOUSLY FOR THE REASON THAT THE OFFICER IS NOT AUTHORIZED TO ADMINISTER OATH AND TO TAKE ANY SWORN STATEMENT WHICH ALONE HAS THE EVIDENTIARY VALUE AS CONTEMPLATED UNDER LAW. THEREFORE, THERE IS MUCH FORCE IN THE ARGUMENT OF T HE COUNSEL FOR THE APPELLANT THAT THE STATEMENT, ELICI TED DURING THE SURVEY OPERATION HAS NO EVIDENTIARY VALUE AND T HE ITO WAS WELL AWARE OF THIS. ' LEGAL HEIRS OF LATE SHREEVALLABH DAMANI ITA NO.7282 TO 7285/MUM/2010 26 5.4 LIKEWISE HON'BLE MADRAS HIGH COURT IN CASE OF CIT V S.KHADER KHAN SON (300 ITR 157) OBSERVED/HELD AS UN DER:- 'IN THE INSTANT CASE, THERE WAS A SURVEY OPERATION CONDUCTED UNDER S. 133A IN THE APPELLANT'S PREMISES AND A STATEMENT WAS RECORDED FROM ONE OF THE PARTNERS. AS SUMING THERE WERE DISCREPANCIES AND IRREGULARITIES IN THE BOOKS OF ACCOUNTS MAINTAINED BY THE APPELLANT, AN OFFER OF A DDITIONAL INCOME FOR THE RESPECTIVE ASSESSMENT YEARS WAS MADE BY THE PARTNER OF THE FIRM. BUT, SUCH STATEMENT, IN VI EW OF THE SCOPE AND AMBIT OF THE MATERIALS COLLECTED DURING T HE COURSE OF SURVEY ACTION UNDER S. 133A SHALL NOT HAVE ANY EVIDENTIARY VALUE, AS RIGHTLY HELD BY THE CIT(A) AN D THE TRIBUNAL, SINCE SUCH STATEMENT WAS NOT ATTACHED TO THE PROVISIONS OF S.133A. IT COULD NOT BE SAID SOLELY O N THE BASIS OF THE STATEMENT GIVEN BY ONE OF THE PARTNERS OF TH E APPELLANT FIRM THAT THE DISCLOSED INCOME WAS ASSESS ABLE AS LAWFUL INCOME OF THE APPELLANT. SINCE THERE WAS NO MATERIAL ON RECORD TO PROVE THE EXISTENCE OF SUCH DISCLOSED INCOME OR EARNING OF SUCH INCOME IN THE HANDS OF THE APPELLAN T, IT COULD NOT BE SAID THAT THE REVENUE HAD LOST LAWFUL TAX PAYABLE BY THE APPELLANT. . A POWER TO EXAMINE A PERSON ON OATH IS SPECIFICALLY CONFERRED ON THE AUTHORITIES ONLY UNDER S. 132(4) I N THE COURSE OF ANY SEARCH OR SEIZURE. THUS, THE IT ACT, WHENEVER IT THOUGHT FIT AND NECESSARY TO CONFER SUCH POWER T O EXAMINE A PERSON ON OATH, HAS EXPRESSLY PROVIDED FO R IT, WHEREAS S. 133A DOES NOT EMPOWER ANY ITO TO EXAMINE ANY PERSON ON OATH. THUS, IN CONTRADISTINCTION TO T HE POWER UNDERS.133A S.132(4) ENABLES THE AUTHORIZED OFFER T O EXAMINE A PERSON ON OATH AND ANY STATEMENT MADE BY SUCH PERSON DURING SUCH EXAMINATION CAN ALSO BE USED IN EVIDENCE UNDER THE IT ACT. ON THE OTHER HAND, WHAT EVER STATEMENT RECORDED ON THE OTHER HAND, WHATEVER STA TEMENT RECORDED UNDER SECTION 133A OF THE ACT IS NOT GIVEN AN EVIDENTIARY VALUE, VIDE A DECISION OF THE KERALA HI GH COURT IN PAUL MATHEWS AND SONS V. CIT [2003] 263 ITR 101 . LEGAL HEIRS OF LATE SHREEVALLABH DAMANI ITA NO.7282 TO 7285/MUM/2010 27 IT IS NOTEWORTHY THAT SPECIAL LEAVE PETITION WAS FI LED IN THE CASE OF S KHADER KHAN AND SONS (SUPRA) AGAINST THE DECISION OF HON'BLE MADRAS HIGH COURT IN THE AFORESAID CASE, BEFORE THE HON'BLE APEX COURT WHEREIN, VIDE ORDER DATED 20.09. 2012 (252 ITR 480) (SUPREME COURT), WHEREIN THE DECISION OF H ON'BLE MADRAS HIGH COURT WAS AFFIRMED. THUS, IT CAN BE TH E STATEMENT RECORDED DURING THE COURSE OF SURVEY PROC EEDINGS DOES NOT HAVE ANY EVIDENTIARY VALUE UNLESS AND UNTI L SUCH STATEMENT IS CORROBORATED WITH MATERIAL FACTS. 5.5. BEFORE US THE LEARNED CIT-DR STRONGLY CONTENDE D THAT THE STATEMENT OF SHRI SUJAL SHAH OF M/S. DPS SHARES AND SECURITIES PVT. LTD. WHICH HAS BEEN RECORDED DURING THE COURSE OF SURVEY PROCEEDINGS IS TO BE CONSIDERED AS AN INC RIMINATING MATERIAL. AS WE HAVE DISCUSSED EARLIER THAT THE STA TEMENTS RECORDED DURING THE COURSE OF SURVEY PROCEEDINGS UN DER SECTION 133A(3)(III) OF THE ACT DO NOT HOLD ANY EVI DENTIARY VALUE. THE STATEMENT OF SHRI SUJAL SHAH IS IN GENER AL CONTEXT AND DOES NOT SPECIFICALLY IMPLICATE THE ASSESSEE IN ASMUCH AS NO DIRECT QUESTION W.R.T. THE ASSESSEE HAS BEEN ASK ED TO SHRI SUJAL SHAH. AS IS CLEAR FROM THE PERUSAL OF THE STA TEMENT OF LEGAL HEIRS OF LATE SHREEVALLABH DAMANI ITA NO.7282 TO 7285/MUM/2010 28 SHRI SUJAL SHAH, THAT THE SAID STATEMENT OF A THIRD PARTY WAS NOT BACKED BY ANY EVIDENCE WHICH WAS EITHER FOUND O R IMPOUNDED DURING THE COURSE OF SURVEY PROCEEDINGS. THEREFORE, THE SAID STATEMENT CANNOT BE CONSIDERED TO BE AN INCRIMINATING MATERIAL IN THE CASE OF THE ASSESSEE. IN VIEW OF THIS OBSERVATION, IT CAN BE CONCLUDED THAT A STATEM ENT RECORDED DURING THE COURSE OF SEARCH PROCEEDING, WI THOUT ANY FURTHER CORROBORATING DOCUMENTARY EVIDENCE, CANNOT BE SAID TO BE MATERIAL FOUND DURING THE COURSE OF SEARCH PROCE EDINGS. IN THE CASE OF THE ASSESSEE, NEITHER ANY INCRIMINATING MATERIAL HAS BEEN FOUND DURING THE COURSE OF SEARCH PROCEEDI NGS NOR HAS ANY STATEMENT BEEN RECORDED THEREON. FURTHER, E VEN IN THE CASE OF SHRI SUJAL SHAH, THE STATEMENT CANNOT BE ST ATED TO BE MATERIAL FOUND DURING THE COURSE OF SEARCH, SINCE I T IS DEVOID OF ANY CORROBORATING DOCUMENTARY MATERIAL FOUND EIT HER DURING THE COURSE OF SEARCH OR SURVEY PROCEEDINGS. OUR VIEW IS SUPPORTED BY THE RATIO LAID DOWN BY THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF ANIL NANDKISHORE GOYAL IN I T A NO 1256/P/2012 DATED 19.04.2013 (ANNEXURE - 4), WHEREIN IT HAS BEEN CATEGORICALLY HELD AS UNDER: LEGAL HEIRS OF LATE SHREEVALLABH DAMANI ITA NO.7282 TO 7285/MUM/2010 29 FACTS : A SEARCH WAS CONDUCTED IN THE RESIDENTIAL AND BUSINESS PREMISES OF THE PEETY GROUP. PRIOR TO THE SEA RCH, THE RETURNS OF INCOME FOR THE A. Y. 2000-01 TO 2005-06 HAD ALREADY BEEN FILED U/S 139(1) OF THE ACT, ACCOMPANIED BY REQU ISITE DOCUMENTS AND PROCESSING U/S. 143(1) OF THE ACT STOOD COMPLETED. DURING THE COURSE OF SEARCH NO INCRIMINATI NG EVIDENCES WERE FOUND TO DRAW ANY ADVERSE CONCLUSION IN RESPECT OF THE TRANSACTIONS IN SHARES AND THE COMPUTATI ON OF INCOME IN RESPECT THEREOF. THE TRANSACTIONS IN SHARE S WERE DULY ACCOUNTED IN THE REGULAR BOOKS OF ACCOUNT FOR THE YEARS IN WHICH THE PURCHASES/SALES WERE MADE. THE ASSESSEE D URING THE COURSE OF ASSESSMENT PROCEEDINGS PROVIDED DETAILS AND DOCUMENTS RELATING TO PURCHASE AND SALE OF SHARES. TH E ASSESSMENT IN THE CASE OF ASSESSEE WAS FINALIZED BY TH E ASSESSING OFFICER BY COMPLETELY IGNORING THE DOCUME NTARY EVIDENCES. THE ONLY EVIDENCE RELIED UPON BY THE ASSE SSING OFFICER WAS THE STATEMENT OF SHRI SURENDRA PEETY RECOR DED IN THE COURSE OF SEARCH OFFERING THE LONG TERM CAPITAL GAI NS AS UNDISCLOSED INCOME. THERE WAS NOTHING ON RECORD TO SUGGEST THAT ANY INCRIMINATING DOCUMENT OR MATERIAL WAS FOUND A S A RESULT OF SEARCH. '14.13.4. THE STATEMENTS RECORDED DURING THE COURSE OF SEARCH COULD NOT BE SAID TO BE EVIDENCE 'FOUND AS A RESULT OF SEARCH', THOUGH THE SAME MAY BE 'OBTAINED DURING TH E SEARCH'. IN CASE AN ADDITION IS INTENDED TO BE MADE AS THE UNDISCLOSED INCOME ON THE BASIS OF SUCH STATEMENTS, IT HAS TO BE FIRST PROVED THAT THESE STATEMENTS ARE RELATA BLE TO 'SUCH EVIDENCE.' THE ONLY EVIDENCE RELIED UPON BY T HE ASSESSING OFFICER IS THE STATEMENT OF SRI SURENDRA S PEETY RECORDED IN THE COURSE OF SEARCH. THERE IS NOTHING ON RECORD TO SUGGEST THAT ANY INCRIMINATING DOCUMENT OR MATER IAL WAS DISCOVERED AS A RESULT OF SEARCH. ABOVE STATEMENT W AS MADE WITHOUT HAVING THE BENEFIT OF REFERRING TO ANY DOCUMENT IN CERTAIN STATE OF MIND AND WAS MADE ON T HE ASSERTION OF THE DEPARTMENT THAT THEY HAVE EVIDENCE AGAINST THE ASSESSEE BY WAY OF SOME STATEMENTS OF BROKERS W HICH WERE NOT MADE AVAILABLE TO THE ASSESSEE. THEREFORE, THE RESPONDENT COULD NOT BE HELD LIABLE ON THE BASIS OF A MERE STATEMENT WHICH WAS MADE UNDER EXCEPTIONAL CIRCUMST ANCE AS MENTIONED ABOVE. AS SUCH, THE VALIDITY OF SUCH STATEMENT, WHICH IS IN NO MANNER RELATED TO ANY EVI DENCE OR LEGAL HEIRS OF LATE SHREEVALLABH DAMANI ITA NO.7282 TO 7285/MUM/2010 30 MATERIALS FOUND IN THE COURSE OF SEARCH IN ASSESSEE 'S PREMISES, IS IN ITSELF NOT JUSTIFIED. 14.14. ON THE BASIS OF THE ABOVE FACTUAL DISCUSSION , NOT MUCH RELIANCE SHOULD BE PLACED ON STATEMENTS MADE B Y THE ASSESSEE DURING THE COURSE OF SEARCH BECAUSE NO CORRESPONDING SEIZED MATERIAL WAS FOUND IN THE COUR SE OF SEARCH TO JUSTIFY THE ADDITIONS IN QUESTION. THE VE RBAL STATEMENT OF THE ASSESSEE WITHOUT ANY CONNECTION WI TH THE OTHER MATERIALS FOUND DURING THE SEARCH CANNOT BE CONSIDERED TO BE MATERIALS FOUND DURING THE SEARCH. RELEVANT INCOME TAX RETURNS FOR THE PAST YEARS WERE FILED PRIOR TO THE SEARCH IN THE NORMAL COURSE SUO MOTO D ISCLOSING THE PARTICULARS OF SUBJECT ADDITIONS WHICH STOOD AC CEPTED U/S 143(1) OF THE ACT. ASSESSMENT AS CONTEMPLATED U /S 153A IS NOT A DE NOVO ASSESSMENT AND ADDITIONS MADE THEREIN, HAS TO BE NECESSARILY RESTRICTED TO UNDISC LOSED INCOME UNEARTHED DURING SEARCH. THERE IS NOTHING ON RECORD TO SUGGEST THAT ANY CORROBORATIVE EVIDENCE WAS FOUN D TO JUSTIFY THE ADDITION IN QUESTION. ' 5.6. ANOTHER ARGUMENT ADVANCED BY THE LEARNED CIT( DR) IS THAT THE ASSESSEE HAS PLACED RELIANCE ON THE ORDER OF HON'BLE ITAT SPECIAL BENCH MUMBAI IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD., FOR ADMISSION OF THE ADDITIONAL GRO UND. THE FACT THAT THE ADDITION WAS NOT MADE BASED ON INCRIMINATI NG MATERIAL HAS NOT BEEN DISCUSSED IN THE ASSESSMENT O RDER OR THE ORDER OF THE CIT(A) AND THESE FACTS NEED TO BE ASCERTAINED. SINCE THE FACTS ARE NOT ON RECORD, THEREFORE, THE L EARNED CIT(DR) CONTENDED THAT THE MATTER MAY BE RESTORED B ACK TO THE FILE OF THE CIT(A), IS CONCERNED, WE NOTE THAT THE SUBMISSION HAS BEEN MADE ONLY WITH RESPECT TO ADDIT IONAL LEGAL HEIRS OF LATE SHREEVALLABH DAMANI ITA NO.7282 TO 7285/MUM/2010 31 GROUND THEREFORE, NOTHING CONCRETE WAS POINTED OUT FROM THE FACTS, WHICH ARE NOT ON RECORD. EVEN OTHERWISE, IN OUR HUMBLE OPINION, ON THE MATERIAL FACTS WHICH ARE NECESSARY FOR ADJUDICATING THE ADDITIONAL GROUND I.E . DATE ON WHICH SEARCH HAS BEEN CONDUCTED, THE DATE OF FILING OF ORIGINAL RETURN OF INCOME AND WHETHER ANY INCRIMINATING MATERIAL HAS B EEN FOUND OR SEIZED DURING THE COURSE OF SEARCH ARE ALR EADY A PART OF THE RECORD. THE REVENUE HAS NOT BROUGHT OUT ANY NEW FACTS BEFORE THE HON'BLE TRIBUNAL, THEREFORE, NO USEFUL P URPOSE WILL BE SERVED IN SETTING ASIDE THE ASSESSMENT TO THE FI LE OF THE LEARNED CIT(A). 5.7. THE LEARNED CIT(DR) ALSO CONTENDED THAT IN T HE CASE OF THE ALL CARGO GLOBAL LOGISTICS LTD., THE SPECIAL BE NCH OF MUMBAI TRIBUNAL HAS HELD THAT IN THE ASSESSMENTS WH ICH HAVE NOT ABATED, IN ADDITION TO THE INCOME THAT HAS ALREADY BEEN ASSESSED, THE ASSESSMENT U/S. 153 A OF THE ACT WILL BE MADE ON THE BASIS OF INCRIMINATING MATERIAL, WHICH WOULD ALSO CONSTITUTE THE BOOKS OF ACCOUNTS OR OTHER DOCUMENTS FOUND IN THE COURSE OF SEARCH BUT NOT PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT. THEREFORE THE BOOKS OF ACCOUNTS NOT PRO DUCED LEGAL HEIRS OF LATE SHREEVALLABH DAMANI ITA NO.7282 TO 7285/MUM/2010 32 DURING THE COURSE OF ORIGINAL ASSESSMENT WOULD CONS TITUTE INCRIMINATING MATERIAL. FOR THIS PROPOSITION THE LE ARNED CIT(DR) RELIED UPON PARA 58 OF THE AFORESAID ORDER IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD., WHEREIN IT HAS BEEN HELD AS UNDER: 'THUS, QUESTION RAISED BEFORE THE SPECIAL BENCH NO. 1 IS ANSWERED AS UNDER: A. IN ASSESSMENT THAT ARE ABATED, THE ASSESSING O FFICER RETAINS THE ORIGINAL JURISDICTION AS WELL AS JURISD ICTION CONFERRED ON HIM UNDER SECTION 153A FOR WHICH ASSESSMENTS SHALL BE MADE FOR EACH OF THE SIX ASSES SMENT YEARS SEPARATELY B. IN OTHER CASES, IN ADDITION TO THE INCOME THAT HAS ALREADY BEEN ASSESSED, THE ASSESSMENT UNDER SECTION 153A WILL BE MADE ON THE BASIS OF INCRIMINATING MATERIAL, WHICH IN THE CONTEXT OF RELEVANT PROVISIONS MEANS BOOKS OF ACCOUNT, OTHER DOCUMENTS, FOUND IN THE COURSE OF SEARCH BUT NOT PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT, AND UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH ' 5.8 IF THE AFORESAID OBSERVATION FROM THE ORDER OF THE SPECIAL BENCH IS ANALYZED, IT CAN BE SAID THAT THE DECISION RENDERED BY THE TRIBUNAL HAS TO BE LOOKED INTO IN CONSONANCE TO THE REASONING GIVEN IN THE JUDGMENT. IN THE PARA 50 TO 54 OF THE AFORESAID ORDER, THE TRIBUNAL HAS NARRATED THE PROV ISIONS OF SECTION 132 AND 153 A OF THE ACT. IT HAS GONE INTO THE QUESTION OF SCOPE OF ASSESSMENT OR REASSESSMENT OF TOTAL INC OME U/S. LEGAL HEIRS OF LATE SHREEVALLABH DAMANI ITA NO.7282 TO 7285/MUM/2010 33 153A OF THE ACT. WITH RESPECT TO THE SAME, IT HAS R ELIED ON THE PROVISIONS OF SECTION 132(1) OF THE ACT, THE RELEVA NT PROVISIONS ARE REPRODUCED HEREUNDER : '132. (1) WHERE THE PRINCIPAL DIRECTOR GENERAL OR D IRECTOR GENERAL OR PRINCIPAL DIRECTOR OR DIRECTOR OR THE PR INCIPAL CHIEF COMMISSIONER OR CHIEF COMMISSIONER OR PRINCIP AL COMMISSIONER OR COMMISSIONER OR ADDITIONAL DIRECTOR OR ADDITIONAL COMMISSIONER OR JOINT DIRECTOR OR JOINT COMMISSIONER IN CONSEQUENCE OF INFORMATION IN HIS POSSESSION, HAS REASON TO BELIEVE THAT (A) ANY PERSON TO WHOM A SUMMONS UNDER SUB-SECTION (1) OF SECTION 37 OF THE INDIAN INCOME-TAX ACT, 1922 (11 O F 1922), OR UNDER SUB-SECTION (1) OF SECTION 131 OF THIS ACT , OR A NOTICE UNDER SUB-SECTION (4) OF SECTION 22 OF THE INDIAN I NCOME-TAX ACT, 1922, OR UNDER SUB-SECTION (1) OF SECTION 142 OF THIS ACT WAS ISSUED TO PRODUCE, OR CAUSE TO BE PRODUCED, ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS HAS OMITTED OR FAILED TO PRODUCE, OR CAUSE TO BE PRODUCED, SUCH BOOKS OF ACC OUNT OR OTHER DOCUMENTS AS REQUIRED BY SUCH SUMMONS OR NOTI CE, OR (B) ANY PERSON TO -WHOM A SUMMONS OR NOTICE AS AFOR ESAID HAS BEEN OR MIGHT BE ISSUED WILL NOT, OR WOULD NOT, PRODUCE OR CAUSE TO BE PRODUCED, ANY BOOKS OF ACCOUNT OR OT HER DOCUMENTS WHICH WILL BE USEFUL FOR, OR RELEVANT TO , ANY PROCEEDING UNDER THE INDIAN INCOME-TAX ACT, 1922 (1 1 OF 1922), OR UNDER THIS ACT, OR (C) ANY PERSON IS IN POSSESSION OF ANY MONEY, BULLI ON, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING AND SU CH MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THI NG REPRESENTS EITHER WHOLLY OR PARTLY INCOME OR PROPER TY WHICH HAS NOT BEEN, OR WOULD NOT BE, DISCLOSED FOR THE PU RPOSES OF THE INDIAN INCOME-TAX ACT, 1922 (11 OF 1922), OR TH IS ACT (HEREINAFTER IN THIS SECTION REFERRED TO AS THE UND ISCLOSED INCOME OR PROPERTY).' LEGAL HEIRS OF LATE SHREEVALLABH DAMANI ITA NO.7282 TO 7285/MUM/2010 34 IF THE AFORESAID PROVISION OF SECTION 132 IS ANALYZ ED, IT LAYS DOWN THE CIRCUMSTANCES UNDER WHICH PRESCRIBED AUTHO RITY CAN ISSUE A WARRANT OF AUTHORIZATION FOR CONDUCTING SEA RCH AND SEIZURE OPERATION AGAINST AN ASSESSEE. THAT SEARCH AND SEIZURE OPERATION IS TO BE CONDUCTED IN CONSEQUENCE TO INFO RMATION RECEIVED BASED ON WHICH THE OFFICER HAS A REASON TO BELIEVE THAT: A) OMISSION OR FAILURE OF ANY PERSON WHO HAS BEEN SERVED WITH A NOTICE U/S 131(1) OF THE ACT TO PRODUCE BOOK S OF ACCOUNTS OR OTHER DOCUMENTS. B) POSSIBILITY OF NON-PRODUCTION BY ANY PERSON OF ANY BOOKS OF ACCOUNTS OR OTHER DOCUMENTS WHICH WILL BE USEFUL OR RELEVANT TO ANY PROCEEDING UNDER THE INCOME TAX ACT . C) POSSESSION BY ANY PERSON OF ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING REPRES ENTING EITHER WHOLLY OR PARTLY INCOME OR PROPERTY WHICH HA S NOT BEEN OR WOULD NOT BE DISCLOSED. THUS, THE SEARCH AND SEIZURE OPERATION IS CONDUCTED TO UNEARTH MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLES OR THING, BOOKS OF ACCOUNTS AND OTHER DOCU MENTS NOT DISCLOSED OR NOT LIKELY TO BE DISCLOSED BY A PE RSON. IT, THEREFORE, FOLLOWS THAT IT IS NOT EVERY ARTICLE OR THING OR EVERY PIECE OF INFORMATION FOUND DURING THE COURSE OF SEARCH THAT CAN BE CALLED 'EVIDENCE FOUND AS A RESU LT OF LEGAL HEIRS OF LATE SHREEVALLABH DAMANI ITA NO.7282 TO 7285/MUM/2010 35 SEARCH'. IT IS ONLY THAT WHICH HAS NOT BEEN OR WOULD NOT HAVE BEEN DISCLOSED ALONE CONSTITUTES EVIDENCE FOUN D AS A RESULT OF SEARCH. IF ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR ANY INCOME IS RE QUIRED TO BE DISCLOSED FOR THE PURPOSES OF I T ACT IN ANY RET URN OF INCOME BUT NOT DISCLOSED, THE SAME WOULD CONSTITUTE BASIS FOR 'UNDISCLOSED INCOME'. THEREFORE, THE CONCLUSION DRAWN BY THE ORDER OF TRIBUNAL, MUMBAI IS IN PURVIEW OF S EARCH CONDUCTED U/S. 132(1) OF THE ACT AND SHOULD BE READ IN LIGHT OF THE PROVISIONS OF SECTION 132(1) OF THE AC T. 5.9. IF THE PROVISION OF THE ACT AND THE FACTUAL MATRIX, WHICH IS AVAILABLE ON RECORD IN THE CASE OF THE ASSESSEE IS ANALYZED FIRSTLY, THERE WAS NO OMISSION OR FAILURE TO PRODUC E BOOKS OF ACCOUNTS OR OTHER DOCUMENTS IN COMPLIANCE TO NOTICE U/S. 131 OF THE ACT. SECONDLY, IT CANNOT BE SAID THAT THERE W AS NO POSSIBILITY FOR NON-PRODUCTION OF BOOKS OF ACCOUNTS OR DOCUMENTS SINCE THE TRANSACTIONS IN QUESTIONS WERE ALREADY A PART OF THE REGULAR BOOKS OF ACCOUNTS OF THE ASSESS EE AND DISCLOSED BEFORE THE DEPARTMENT. THE DEPARTMENT HAS NOT SEIZED THE REGULAR BOOKS OF ACCOUNTS INASMUCH AS NO REFERENCE LEGAL HEIRS OF LATE SHREEVALLABH DAMANI ITA NO.7282 TO 7285/MUM/2010 36 HAS BEEN MADE TO ANY 'SEIZED MATERIAL' BY THE ASSES SING OFFICER WHILE FRAMING THE ASSESSMENT ORDER U/S. 153A OF THE ACT FOR THE A. Y. 2002-03 AND A. Y. 2003-04. IF THE ASSERT ION OF THE LEARNED CIT(DR) IS TAKEN TO BE CORRECT IT WILL CRE ATE CHAOS INASMUCH AS THE CASES EVEN WHERE THE ASSESSMENT HAS BEEN COMPLETED U/S. 143(3) OF THE ACT, WILL LEAD TO ADDI TIONS TO BE MADE OF REGULAR ITEMS WHICH HAVE ALREADY BEEN DISCL OSED IN THE RETURN OF INCOME, BUT IN CONNECTION TO WHICH TH E ASSESSING OFFICER HAS CHOSEN NOT TO CALL FOR ANY MATERIAL/DOCUMENT DURING THE COURSE OF REGULAR ASSE SSMENT, EVEN IN ABSENCE OF ANY INCRIMINATING MATERIAL FOUND WITH RESPECT TO THE SAID ITEMS. THUS, THIS ARGUMENT OF THE LEARNED CIT(DR) CANNOT BE ACCEPTED. 5.10 ANOTHER ARGUMENT RAISED BY LEARNED CIT(DR) TH AT THE ASSESSEE DID NOT FURNISH THE DETAILS OF THE OUT COME OF APPEALS IN A.Y. 2001-02 AND A. Y. 2004-05. THESE AP PEALS ARE NOT BEFORE US AND EVEN THE DETAILS OF ABATEMENT FOR THE CAPTIONED APPEALS WHICH ARE RELEVANT TO ADJUDICATE ON THE RELEVANCE OF INCRIMINATING MATERIAL FOR ASSESSMENT U/S 153A OF THE ACT HAS NOT BEEN FURNISHED BEFORE US. THE LEAR NED COUNSEL LEGAL HEIRS OF LATE SHREEVALLABH DAMANI ITA NO.7282 TO 7285/MUM/2010 37 POINTED OUT THAT THE LONG TERM CAPITAL GAINS RESULT ING IN ADDITION UNDER SECTION 68 OF THE ACT WAS NOT PRESEN T IN THE ASSESSMENT YEARS 2001-02 AND 2004-05. 5.11. DURING HEARING THE LEARNED CIT(DR) ALSO CON TENDED THAT THE BILLS OF PURCHASE OF ROBINSON WORLDWIDE WERE ON LY ACCOMMODATION ENTRY, IS CONCERNED, WE HAVE ALREADY DEALT WITH THE SAME IN EARLIER PARAS OF THIS ORDER AS IS EXPLAINED IN THE WRITTEN SUBMISSION FILED BY THE ASSESSEE ON 21. 03.2017. ANOTHER ARGUMENT TAKEN BY THE LEARNED CIT(DR) THAT THE ASSESSEE HAS NOT BEEN ABLE TO PROVE FROM WHOM IT HA D RECEIVED PHYSICAL DELIVERY OF SHARES OF M/S. ROBINSON WORLDW IDE AND RASHEL AGRO OR THE DATE ON WHICH IT HAD RECEIVED TH E PHYSICAL DELIVERY OF SHARES IS CONCERNED, THE ASSESSEE HAS A LREADY EXPLAINED IN PARA 26 PAGE NO 39 OF THE WRITTEN SUBM ISSION FILED ON 21.03.2017. SO FAR AS THE STATEMENT OF SH RI SUJAL C SHAH OF M/ S. DPS SHARES & SECURITIES LTD. IS CONCERNED, WE HAVE ALREADY DEALT WITH THIS ISSUE IN EARLIER PARAS OF THIS ORDER. SO FAR AS THE TRADE FILES OF M/S. DPS SHARES & SECU RITIES LTD. WERE OBTAINED FROM BOMBAY STOCK EXCHANGE, ON ANALYSI S OF WHICH IT WAS FOUND THAT TRANSACTIONS THEREIN DO NOT TALLY WITH LEGAL HEIRS OF LATE SHREEVALLABH DAMANI ITA NO.7282 TO 7285/MUM/2010 38 CONTRACT NOTES IS CONCERNED IT HAS ALREADY BEEN EXP LAINED BY THE ASSESSEE AT PAGES 34-35 OF THE WRITTEN SUBMISSI ON FILED ON 21.03.2017. THUS, THE FACT THAT CERTAIN TRANSACTIO NS RELATING TO THE SAID SHARES IN RESPECT TO THE SPECULATION GA INS WERE REFLECTED IN THE TRADE FILES GOES ON TO SHOW THAT T RANSACTIONS OF THE ASSESSEE WERE GENUINE. FURTHER, THE GAINS FR OM THE SPECULATION TRANSACTION WERE OFFERED TO TAX BY THE ASSESSEE IN THE RETURN FILED BUT IT. THE ASSESSING OFFICER EVEN WHILE PASSING THE ORDER U/S. 153 A OF THE ACT HAS NOT FOUND/DISTURBED THE SPECULATION INCOME WHICH WAS OF FERED IN THE RETURN. THEREFORE, HAVING NOT DISTURBED THE SPE CULATION INCOME ON THE ONE HAND AND AT THE SAME TIME DOUBTIN G THE PURCHASE OF THOSE SHARES AGAINST WHICH THE SPECULAT ION INCOME WAS OFFERED ITSELF SHOWS THE DOUBLE STANDARD S OF THE ASSESSING OFFICER AND ACCORDINGLY, THERE IS NO BASI S FOR SUCH ARGUMENTS. IT IS OBSERVED THAT THE ASSESSEE IS ONL Y CONCERNED WITH THE CONTRACT NOTES PROVIDED BY THE BROKERS, TH EREFORE, THE ASSESSEE CANNOT BE HELD RESPONSIBLE FOR THE FACT TH AT THE BROKER MAY HAVE ENTERED INTO OFF MARKET TRANSACTION OR NOT REPORTED THE TRANSACTIONS TO THE BSE. THIS PROPOS ITION OF LEGAL HEIRS OF LATE SHREEVALLABH DAMANI ITA NO.7282 TO 7285/MUM/2010 39 OURS IS SUPPORTED BY THE DECISION IN THE CASE OF AC IT VS. KAMAL KUMAR S. AGRAWAL (INDL.) & ORS. REPORTED AT ( 2010) 41 DTK (NAG)(TRIB) 105 (PAGE NO. 732-768 OF THE PAPER- BOOK). SO FAR AS THE CONTENTION OF THE LEARNED CIT(DR) THAT THE PURCHASERS OF SCRIP, M/S. ROBINSON WORLDWIDE WERE N OT TRACEABLE AS HAS BEEN STATED BY THE ASSESSING OFFIC ER IN THE ASSESSMENT ORDER ALSO, THE CONTENTION OF THE ASSESS EE IS THAT THE SALE OF THE SHARES OF M/S. ROBINSON WORLDWIDE H AS TAKEN PLACE ON THE STOCK EXCHANGE AND IN DEMATERIALIZED F ORMAT. THE SALE OF THE SAID SHARES HAS NOT BEEN DENIED BY THE ASSESSING OFFICER. THE FACT THAT THE ASSESSING OFFICER HAS MA DE A LIST OF PARTIES WHO HAVE SUBSEQUENTLY PURCHASED THESE SHARE S, ITSELF SHOWS THAT THE SALE OF THE AFORESAID SHARES HAD IN FACT TAKEN PLACE. 5.12 SO FAR AS THE CONTENTION OF THE LEARNED CIT( DR) THAT FULL COPY OF THE ORDER IN THE CASE OF WIFE OF THE A SSESSEE (SMT. SAROJ DAMANI) AND PAGES 24 TO 29 ARE MISSING, IS CO NCERNED, THE ASSESSEE HAS ALREADY ANNEXED THE ORDER AS ANNEXURE - 5. THE LEARNED CIT(DR) ALSO MADE REFERENCE TO THE DETAILS /DOCUMENTS IN THE CASE OF SMT. SAROJ DAMANI. THE LEGAL HEIRS OF LATE SHREEVALLABH DAMANI ITA NO.7282 TO 7285/MUM/2010 40 LEARNED COUNSEL FOR THE ASSESSEE EXPLAINED THAT THE ASSESSEE HAD SUBMITTED SIMILAR DETAILS/DOCUMENTS, WHICH WERE BROUGHT TO OUR NOTICE AND ARE SUMMARIZED AS UNDER: SR. NO. PARTICULARS PARA REFERENCE OF SUBMISSIONS DATED 21.03.2017 1 SHARES OF M/S. ROBINSON WORLDWIDE TRADE LIMITED FOR WHICH THE APPELLANT HAS SUBMITTED THE PURCHASE BILLS & LEDGER ACCOUNT OF THE PURCHASE BROKER. PARA 37 2 THE APPELLANT HAD EARNED SPECULATION PROFIT WHICH WAS USED FOR THE PURCHASE OF SHARES OF M/S. ROBINSON WORLDWIDE TRADE LIMITED. PARA 40 3 SHARES WERE ISSUED IN PHYSICAL FORMAT WHICH GOT TRANSFERRED IN APPELLANT'S NAME ON 14.06.2003 AND 20.04.2004. THE SAID FACT CAN BE ASCERTAINED FROM THE LETTER RECEIVED BY THE APPELLANT FROM M/S. ROBINSON WORLDWIDE TRADE LIMITED. PARA37 4 THE SHARES OF THE APPELLANT WERE CONSOLIDATED AND THE APPELLANT WAS ISSUED JUMBO SHARE CERTIFICATE. THEREAFTER, THE SAID SHARES WERE DEMATERIALIZED TO DE-MAT ACCOUNT OF THE APPELLANT HELD WITH HDFC BANK. SUCH DEMATED SHARES WERE SOLD THROUGH M/S. AKD SECURITIES PVT. LTD. AS CAN BE SEEN FROM THE SALE BILLS SUBMITTED BY THE APPELLANT AND DEMAT ACCOUNT STATEMENT. FURTHER, THE SALE PROCEEDS OF THE SHARES HAD BEEN RECEIVED IN THE HDFC BANK ACCOUNT OF THE APPELLANT. PARA 37 5 THE SPECULATION PROFIT EARNED AND USED FOR PURCHASE OF THE SHARES OF THE M/S. ROBINSON WORLD WIDE HAS BEEN ACCEPTED BY THE DEPARTMENT WHILE PASSING ORDER U/S. 153A R.W.S. 143(3) OF THE ACT FOR A. Y. 2004-05 AND A. Y. 2005-06. PARA 40 6 THE RESPONSE TO LETTER U/S. 133(6) OF THE ACT PARA 34 LEGAL HEIRS OF LATE SHREEVALLABH DAMANI ITA NO.7282 TO 7285/MUM/2010 41 BY M/S. DPS SHARES & SECURITIES LTD. PERTAINED TO ONE SMT. PRATIKSHA SHAH AND NOT THE APPELLANT. 7 NOWHERE SPECIFICALLY STATED IN THE DIRECTORS/BROKERS STATEMENTS THAT THEY HAVE ISSUED ACCOMMODATION ENTRIES TO THE APPELLANT. PARA 42 8 DURING THE COURSE OF CROSS-EXAMINATION PROCEEDINGS, THE PURCHASE DOCUMENTS WHICH HAVE BEEN STATED TO BE ACCOMMODATION BILLS PERTAIN TO SHRI BRIJESH D. SHAH AND WHICH DO NOT BELONG TO THE APPELLANT. PARA 43 9 THE DIRECTOR OF M/S. DPS SHARES & SECURITIES PVT. LTD., SHRI PRATIK SHAH WAS A TAINTED PARTY AND HIS CREDIBILITY AND RELIABILITY WAS QUESTIONABLE. RELIANCE WAS PLACED ON THE ORDER OF HON'BLE MUMBAI TRIBUNAL IN THE CASE OF BHAGVANDAS GORDHANDAS. PARA 39 10 THE APPELLANT HAD PROVIDED THE REVENUE WITH VOLUMINOUS DOCUMENTS AND THE ASSESSING OFFICER HAS NOT FOUND ANY FAULT WITH THE SAME. PARA 38 SO FAR AS THE CROSS-EXAMINATION OF SHRI SUJAL C SHA H WAS NOT CONDUCTED IN THE CASE OF THE WIFE OF THE ASSESSEE I.E. SMT. SAROJ DAMANI IS CONCERNED, IT WAS EXPLAINED THAT EV EN IN THE CASE OF THE ASSESSEE, NO CROSS - EXAMINATION OF SHRI SUJAL SHAH WAS PROVIDED. SIMILARLY, AS IN THE CASE OF THE ASSE SSEE'S WIFE, SMT. SAROJ DAMANI, NONE OF THE STATEMENT HAD ANY RE FERENCE IN THE CASE OF THE ASSESSEE. ANOTHER ARGUMENT RAIS ED BY THE LEARNED CIT(DR) THAT THE FACTS IN THE CASE OF THE ASSESSEE'S WIFE ARE DIFFERENT FROM THE FACTS OF THE PRESENT AS SESSEE IS LEGAL HEIRS OF LATE SHREEVALLABH DAMANI ITA NO.7282 TO 7285/MUM/2010 42 CONCERNED, IT WAS EXPLAINED THAT THE DECISION OF TH E TRIBUNAL IN THE CASE OF SAROJ DAMANI RELIED ON THE ORDER OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF SHYAM R. PAWAR REP ORTED AT 229 TAXMAN 256, WHEREIN IT WAS HELD THAT THE DEMAT ACCOUNT AND CONTRACT NOTE SHOWED CREDIT/DETAILS OF SHARE TR ANSACTIONS AND REVENUE HAD STOPPED ENQUIRY AT PARTICULAR POINT AND DID NOT CARRY IT FORWARD TO DISCHARGE BASIC ONUS, THE T RANSACTIONS IN SHARES WERE RIGHTLY HELD TO BE GENUINE. WE FIND THAT IN THE CASE OF SMT. SAROJ DAMANI (WIFE OF THE ASSESSEE), T HE TRIBUNAL VIDE ORDER DATED 17.05.2017 (ITA NO. 7286, 7287 & 7288/MUM/2010 FOR A.YS. 2004-05 TO 2006-07) DELIBER ATED UPON THE ISSUE WITH RESPECT TO ADDITIONS OF THE AMO UNTS OF SALE PROCEEDS OF SHARES DECLARED AS LONG TERM CAPITAL GA IN AND TREATED AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT AND FURTHER THE ADDITION OF UNEXPLAINED MONEY USED FOR PAYMENT OF COMMISSION FOR OBTAINING LONG TERM CAPIT AL GAIN, THE TRIBUNAL FOLLOWING THE DECISION OF THE TRIBUNAL IN THE CASE OF LATE SMT. KANCHANBEN J SHAH VS. INCOME TAX OFFIC ER (ITA NO.6544/MUM/2011 ORDER DATED 18.02.2016) AND DECISI ON FROM HON'BLE BOMBAY HIGH COURT IN CIT VS. SHYAM R P AWAR LEGAL HEIRS OF LATE SHREEVALLABH DAMANI ITA NO.7282 TO 7285/MUM/2010 43 (2015) 229 TAXMAN 256 (BOM), DECIDED IN FAVOUR OF T HE ASSESSEE (WIFE OF THE ASSESSEE). THUS, IN THE LIGH T OF THE FOREGOING DISCUSSION AND THE CASES CITED IN EARLIER PARAS OF THIS ORDER, THE APPEALS OF THE PRESENT ASSESSEE ARE ALLO WED. 6. IN THE RESULT, THE APPEALS ARE ALLOWED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 31/05/2018. SD/- SD/- ( N.K. PRADHAN ) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER % & MUMBAI; * DATED : 14/06/2018 F{X~{T? P.S / +$ %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. ,-./ / THE APPELLANT 2. 0./ / THE RESPONDENT. 3. 1 1 % 2# ( ,- ) / THE CIT, MUMBAI. 4. 1 1 % 2# / CIT(A)- , MUMBAI 5. 4$5 # , 1 ,-( ,6 , % & / DR, ITAT, MUMBAI 6. 7! 8& / GUARD FILE. / BY ORDER, / (DY./ASSTT. REGISTRAR) , % & / ITAT, MUMBAI,