MANISH TAMBI, Jaipur V. DCIT, Jaipur

ITA 735/JPR/2013

• Counselvise Citation: 73523114 RSA 2013
• Duration Of Justice: 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 16-09-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A K KHANDELWAL
• Assessee Lawyers: S L PODDAR
• Keywords: Loose papers; Peak credit; Corroborative evidences; Notional interest; Retraction
• Section: 143(3); 153A; 68; 132

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH, JAIPUR ( BEFORE SHRI HARI OM MARATHA AND SHRI N.K. SAIN I ) ITA NOS. 735, 736 & 737/JP/2013 ASSESSMENT YEARS:2007-08, 2009-10 & 2010-11 PAN: AAXPT 5754 H SHRI MANISH TAMBI VS. THE DCIT C-33, SIKAR HOUSE, CENTRAL CIRCLE-1 OUTSIDE CHANDPOLE GATE, JAIPUR JAIPUR (APPELLANT) (RESPONDENT) ITA NO. 778/JP/2013 ASSESSMENT YEAR: 2010-11 PAN: AAXPT 5754 H THE DCIT VS. SHRI MANISH TAMBI CENTRAL CIRCLE-1 C-33, SIKAR HOUSE, JAIPUR OUTSIDE CHANDPOLE GATE, JAIPUR (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S.L. PODDAR DEPARTMENT BY : SHRI A.K. KHANDELWAL DATE OF HEARING : 29.01.2014. DATE OF PRONOUNCEMENT : 07.03.2014 ORDER PER HARI OM MARATHA, J.M. THIS IS A BUNCH OF 04 APPEALS OUT OF WHICH 03 APPE ALS HAVE BEEN FILED BY THE ASSESSEE FOR THE A.YS. 2007-08, 2009-10 AND 2010-1 1 AND ONE APPEAL HAS BEEN FILED BY THE REVENUE FOR THE A.Y. 2010-11. ALL THESE APPEAL S HAVE BEEN HEARD TOGETHER. THEREFORE, FOR THE SAKE CONGRUENCE, CONVENIENCE AND BREVITY, WE PROCEED TO DECIDE THEM BY A COMMON ORDER. 2 735/JP/2013 A.Y. 2007-08 2.1 THIS APPEAL OF THE ASSESSEE FOR THE A.Y. 2007-0 8 IS DIRECTED AGAINST THE ORDER OF THE LD CIT(A), CENTRAL, JAIPUR , DATED 12-08-2013. 2.2 BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT A SEARCH U/S 132 OF THE INCOME-TAX ACT, 1961 (THE ACT FOR SHORT) WAS CARR IED OUT ON 23-07-2009 AT THE PREMISES OF THE ASSESSEE, WHO IS A FINANCE BROK ER AND DERIVES HIS INCOME FROM THE SAME. CONSEQUENT UPON SEARCH OPERATION, NO TICE U/S 153A OF THE ACT WAS ISSUED ON 7-12-2009 DECLARING TOTAL INCOME AT RS. 1,96,310/-. TO BE VERY SPECIFIC, THE ASSESSEE HAS RAISED ONLY TWO MAT ERIALS GROUNDS. THE GROUND NO. 1 CHALLENGES THE LEGALITY OF ACTION U/S 153A READ WITH SECTION 143(3) OF THE ACT. THIS GROUND WAS NOT PRESSED AT T HE TIME OF HEARING BY THE LD. AR OF THE ASSESSEE, HENCE THE SAME IS DISMISSED BEING NOT PRESSED. 3.1 THE GROUND NO.2 WHICH IS ON MERIT AND CHALLENGE D THE CONFIRMATION OF ADDITION OF RS. 6,03,689/- ADDED ON ACCOUNT OF U NDISCLOSED BROKERAGE INCOME. THE FACTS OF THIS GROUND ARE THAT, ADMITTED LY, NO MATERIAL OR ANY INCRIMINATING EVIDENCE WAS FOUND TO SUPPORT THE IMP UGNED ADDITION DURING THE COURSE OF SEARCH. THIS ADDITION IS SOLELY BASED ON THE STATEMENTS RECORDD U/S 132(4) OF THE ACT. THE LD. AR APART FROM MAKING ORAL SUBMISSIONS HAS FILED THE WRITTEN SUBMISSIONS IN THIS REGARD WHICH IS AS UNDER:- IT IS SUBMITTED THAT THE LEARNED CIT(A) HAS ERRED IN MAKING THE AFORESAID ADDITION/ENHANCEMENT JUST ON THE BASIS OF THE STATEMENT OF THE ASSESSEE 3 RECORDED U/S 132(4) WITHOUT THERE BEING ANY SUPPORT ING EVIDENCE. THE ACTION OF THE LEARNED CIT(A) IS ASSAILED AS UNDER : 1. STATEMENTS RECORDED U/S 132(4) GIVE TWO DIFFEREN T STORIES THE LEARNED CIT(A) HAS BASED THE AFORESAID ADDITION PURELY AND PURELY ON THE BASIS OF STATEMENT RECORDED DURING THE COURSE OF SE ARCH. IT IS SUBMITTED THAT STATEMENTS OF THE ASSESSEE U/S 132(4) WERE RECORDED ON 23.08.2009 TWICE. ONE 8:15 AM BEFORE THE SEARCH STARTED AND SECOND STATEM ENT WAS RECORDED AROUND 12:30 PM DURING THE COURSE OF SEARCH. COPIES OF BOT H THESE STATEMENT ARE AVAILABLE ON PAPER BOOK PAGE NO. 16 TO 35. (A) STATEMENT RECORDED AT 8:15 AM AS PER THIS STATEMENT IN REPLY TO QUESTION NO. 4 WH ICH APPEARS ON PAGE NO. 5 THE ASSESSEE HAD STATED THAT HE WAS EARNING AROUN D RS. 500000/- ANNUALLY BOTH FROM THE BUSINESS OF FINANCE BROKERAG E AND ALSO FROM JEWELLERY BUSINESS. IN THE RETURN OF INCOME THE ASS ESSEE HAS DISCLOSED RECEIPTS FROM DALALI ITSELF OF RS. 3,92,058/- AND N ET INCOME FROM THIS HAS BEEN SHOWS AT RS. 2,96,311/-. JUST ON A BROAD LEVE L THE INCOME DISCLOSED BY THE ASSESSEE IS ALMOST IN CONSONANCE WITH THE ST ATEMENT GIVEN BY HIM. A COPY OF THE PROFIT & LOSS A/C AND A COPY OF COMPUTA TION OF INCOME ARE AVAILABLE ON PAPER BOOK PAGE NO. 36 TO 37 FOR KIND PERUSAL. IN THE STATEMENT THE ASSESSEE HAS DEPOSED PURELY ON ESTIMATE BASIS, PURELY ON MEMORY BASIS THAT TOO IN THE PRESENCE OF THE SEA RCH PARTY THAT HE ENJOYED INCOME FROM BOTH THE SOURCES OF RS. 5,00,00 0/-. THIS SOURCES INCLUDED DALALI AND JEWELLERY. FROM THE DALALI THE ASSESSEE HAD DISCLOSED GROSS RECEIPT OF RS. 3,92,058/- WHICH ARE APPARENTL Y IN ORDER AND THE SAME DID NOT REQUIRE TO BE DISTURBED. THE LEARNED CIT(A) HAS NOT TAKEN CARE OF THIS STATEMENT. HAD SHE PERUSED THIS STATEMENT THER E WOULD NOT HAVE BEEN ANY OCCASION FOR MAKING THE ADDITION. (B) STATEMENT AT 12:30 PM IT IS THIS STATEMENT ON WHICH THE LEARNED CIT(A) HA S BASED THE ADDITION. IT IS SUBMITTED THAT BETWEEN 8:15 AM AND 12:30 PM MUCH WATER FLOWED DOWN THE GANGES. THE ASSESSEE WAS BY THIS TIME UNDE R LOT OF PRESSURE, STRESS AND BROWBEATING BY THE SEARCH PARTY. IN THE FACE OF THIS THE STATEMENT RECORDED AT 12:30 CARRIES LITTLE VALUE. F URTHER IN THIS STATEMENT ALSO THE ASSESSEE DEPOSED IN RESPONSE TO QUESTION N O. 22 ON PAGE 8 THAT IT WAS DURING LAST 3-4 YEARS THAT HE WAS ENJOYING INCO ME IN THE BRACKET OF RS. 70000/- TO 75000/- PER MONTH FROM COMMISSION. T HE STATEMENT IS PURELY ON ESTIMATE WITHOUT SPECIFYING SPECIFIC PERI OD AND EXPENSES. SUCH STATEMENT IS NOT RELIABLE. THERE IS NO REASON WHY T HE ASSESSEE WAS ASKED TO 4 SUPERSEDE HIS EARLIER STATEMENT RECORDED AT 8:15 AM . FURTHER THE AUTHORIZED OFFICER DID NOT PUT ANY QUESTION THAT WH Y THERE WAS DIFFERENCE BETWEEN THE INCOMES STATED AT 8:15 AM AND AT 12:30 PM. IN VIEW OF ALL THIS IT IS SUBMITTED THAT THE LEARNED CIT(A) WAS NO T JUSTIFIED IN MAKING THE ADDITION. THE SAME DESERVES TO BE DELETED. 2. ADDITION CANNOT BE BASED MERELY ON THE BASIS OF STATEMENT IT IS ALSO SETTLED POSITION OF LAW THAT ADDITION CA NNOT BE MADE PURELY ON THE BASIS OF STATEMENT BEREFT OF ANY SUPPORTING EVIDENCE. IT HAS ALSO BEEN HELD THAT STATEMENT RECORDED U/S 132(4) IS NOT INCRIMINATING MATERIAL FOUND DURING SEARCH. IN VIEW OF THIS THE LEARNED CIT(A) ERRED IN MAKING ENHANCEMENT PURELY ON THE BASIS OF STATEMENT OF THE ASSESSEE. THERE IS NO MAT ERIAL ON RECORD CORRELATING THE STATEMENT OF THE ASSESSEE. THE LEARNED CIT(A) HAS R EFERRED THE FOLLOWING TWO CASE LAWS FOR MAKING THE ADDITION. THE SAME ARE ANA LYZED BELOW AND ARE NOT APPLICABLE TO THE FACTS OF THE CASE OF THE ASSESSEE . (I) RAJNIK AND CO. VS. ACIT (AP) 251 ITR 561 IN THIS CASE ADDITIONS WERE MADE WITH REFERENCE TO LOOSE SLIPS AND SHEETS SHOWING SUPPRESSION OF TURNOVER AS WELL AS ADMISSIO N IN THE STATEMENT BY THE PARTNER OF THE FIRM. THUS ADDITIONS WERE MADE O N THE BASIS OF SUPPORTING EVIDENCE AND NOT EXCLUSIVELY, SOLELY AND WHOLLY ON THE BASIS OF STATEMENT U/S 132(4). HENCE THE RATIO OF THE CASE I S NOT APPLICABLE TO THE FACTS OF THE CASE OF THE ASSESSEE. (II) RAJENDRA KUMAR LAHOTY VS. DCIT (RAJ) 266 ITR 621 IN THIS CASE NO ADDITIONS WERE MADE ON THE BASIS OF STATEMENT U/S 132(4). HENCE THE RATIO OF THE CASE IS NOT APPLICABLE TO TH E FACTS OF THE CASE OF THE ASSESSEE. IN THIS CASE ADDITIONS WERE MADE ON APPRECIATION OF THE FACTS OF THE CASE I.E. DEATH OF THE FATHER, BIRTH OF GRANDDAUGHTERS A ND GRAH PRAVESH. SUCH ADDITIONS WERE MADE ON ESTIMATE BASIS BUT THERE WAS NO STATEMENT U/S 132(4). OVER AND ABOVE THE AFORESAID DECISION OF THE LEARNE D CIT(A), A NUMBER OF DECISIONS WERE QUOTED IN THE SUBMISSION MADE BEFORE THE LEARNED CIT(A) THAT WITHOUT CORROBORATIVE EVIDENCE STATEMENT RECORDED U /S 132(4) USES ITS EVIDENTIARY VALUE AND ADDITIONS ARE NOT JUSTIFIED ON THE BASIS OF STATEMENT ALONE. THE FOLLOWING DECISIONS ARE QUOTED AS UNDER:- (A) KAILASH BEN MOHANLAL CHOKSI V/S CIT (2008) 14 DTR (GUJ) 257 5 IT IS TOO MUCH TO GIVE CREDIT TO A STATEMENT RECORD ED AT MIDNIGHT WHERE A PERSON MAY NOT BE IN A POSITION TO MAKE ANY CORRECT AND CONSCIOUS DISCLOSES DISCLOSURE STATEMENT RECORDED AT ODD HOU RS CANNOT BE CONSIDERED TO BE A VOLUNTARY STATEMENT. (B) CONTECH TRANSPORT SERVICE (P) LTD ORS V/S ACIT (2009) 19 DTR 191 (MUMBAI) 28-11-08 NO ADDITION CAN BE MADE ONLY ON THE BASIS OF ADMISS ION IN STATEMENT U/S 132 (4) (C) CHITRA DEVI V/S ACIT (JODHPUR BRANCH) (2002) 77 TTJ (JD) 640 STATEMENTS RECORDED DURING SEARCH ARE NOT EVIDENCES FOUND DURING SEARCH. ADDITION CANNOT BE MADE ON THE BASIS OF STATEMENT A LONE. (D) KAILASHHEN MANHARLAL CHOKSHI VS CIT (2008)14 D TR 257 (GUJ) IT IS ALSO TO BE SEEN AS TO WHETHER AN ADDITION MAD E IS MERELY BASED ON THE STATEMENT RECORDED BY THE AO UNDER S. 132(4) AND WH ETHER ANY COGNIZANCE MAY BE TAKEN OF THE RETRACTED STATEMENT. SO FAR AS CASE ON HAND IS CONCERNED, THE GLARING FACT REQUIRED TO BE NOTED IS THAT THE STATEMENT OF THE ASSESSEE WAS RECORDED UNDER S. 132(4) AT MIDNIGHT. IN NORMAL CIRCUMSTANCES, IT IS TOO MUCH TO GIVE ANY CREDIT TO THE STATEMENT RECORDED AT SUCH ODD HOURS. THE PERSON MAY NOT BE IN A POSIT ION TO MAKE ANY CORRECT OR CONSCIOUS DISCLOSURE IN A STATEMENT IF S UCH STATEMENT IS RECORDED AT SUCH ODD HOURS. MOREOVER, THIS STATEMEN T WAS RETRACTED AFTER TWO MONTHS. THE MAIN GRIEVANCE OF THE AO WAS THAT T HE STATEMENT WAS NOT RETRACTED IMMEDIATELY AND IT WAS DONE AFTER TWO MON THS. IT WAS AN AFTERTHOUGHT AND MADE UNDER LEGAL ADVISE. HOWEVER, IF SUCH RETRACTION IS TO BE VIEWED IN LIGHT OF THE EVIDENCE FURNISHED ALO NG WITH THE AFFIDAVIT, IT WOULD IMMEDIATELY BE CLEAR THAT THE ASSESSEE HAS GI VEN PROPER EXPLANATION FOR ALL THE ITEMS UNDER WHICH DISCLOSURE WAS SOUGHT TO BE OBTAINED FROM THE ASSESSEE. IN VIEW OF THE AFORESAID FACTS, SUBMISSION OF THE ASSESSEE AND THE RELEVANT CASE LAWS IT IS CLEAR THAT THE STATEMENT RECORDED AT THE TIME OF SEARCH CANNOT BE MADE BASIS FOR MAKING ADDITION IN THE INCOME OR ANY ENHANCEMENT OF THE INCOME. THE LEARNED CIT(A) HAS FURTHER ERRED IN NOT TAKING INTO CONSIDERATION THE SETTLED POSITION OF LAW THAT WHEN THERE ARE TWO DIVERSE OPINION ON THE SAME ISSUE THE ONE FAVO URABLE TO THE ASSESSEE HAS TO BE FOLLOWED 88 ITR 192. COPY OF SUBMISSION MADE BEFORE THE LEARNED CIT(A) IS AVAILABLE ON PAPER BOOK PAGE NO. 38 TO 53. IN VIEW OF THE AFORESAID SUBMISSIONS THE ASSESSM ENT IN THE FIRST PLACE DESERVES TO BE QUASHED, AND IN ANY CASE TH E ENHANCEMENT MADE BY THE LEARNED LD CIT(A) DESERVES TO BE DELETED. 6 3.2 PER CONTRA, THE LD DR HAS HEAVILY RELIED ON QUE STION NO. 21 AND 22 REPRODUCED AT PAGE 12 OF THE LD CIT(A)S ORDER AND ALSO THE QUEST ION AND ANSWER PERTAINING TO QUESTION NO. 27. 3.3 AFTER CONSIDERING THE RIVAL SUBMISSIONS VIS A V IS THE EVIDENCE AVAILABLE IN THE APPELLATE ORDER AND THE REASONS GIVEN FOR MAKING TH IS ADDITION AND CONFIRMING THIS ADDITION, WE ARE OF THE CONSIDERED OPINION THAT NO ADDITION CAN BE MADE SOLELY ON THE BASIS OF THE STATEMENT RECORDED U/S 132(4) OF THE A CT DE HORS ANY MATERIAL FOUND DURING SEARCH TO SUPPORT THE SAME OR ANY OTHER SUBSTANTIAL EVIDENCE GATHERED DURING POST-SEARCH PROCEEDINGS. THE DECISIONS MENTIONED IN THE WRITTEN SUBMISSIONS ARE VERY MUCH RELEVANT FOR THE PURPOSE. THE DECISION OF ITAT JODHPUR BENCH IN THE CASE OF CHITRA DEVI VS ACIT (SUPRA) IS MOST RELEVANT IN THIS REGARD. ACCORDINGL Y, WE ORDER TO DELETE THIS ADDITION. THUS THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED. 736/JP/2013 A.Y. 2007-08 4.1 THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD CIT(A) DATED 14- 08-2012 FOR THE A.Y. 2009-10 WHEREIN FOLLOWING GROU NDS HAVE BEEN RAISED. 1. THAT UNDER THE FACTS AND CIRCUMSTANCES THE LD A.O. HAS ERRED IN COMPLETING THE ASSESSMENT ON THE BASIS OF DEAF, D UMB AND ROUGH NOTING WHICH ARE NOTHING MORE THAN ROUGH PAPERS. 2. THE ORDER PASSED BY THE LD. A.O. U/S 153A/143( 3) IS VOID AB-INITIO DESERVES TO BE QUASHED. 3. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 3,21,31, 893/- AS INCOME ON THE BASIS OF PEAK CREDITORS CALCULATED BY THEM IGNORI NG THE SUBMISSIONS OF THE ASSESSEE AND WITHOUT CONSIDERING THE CONTENTION O F THE ASSESSEE AGAINST DECLARED PEAK OF RS. 52,40,137/- WHICH WAS CALCU LATED ON MORE SCIENTIFIC BASIS. 7 4. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 32,42,597 /- AS OWN UNEXPLAINED CASH/CAPITAL EMPLOYED IN DEBTORS AFTER ADDITION O F RS. 3,21,31,893/- WHICH AMOUNTS TO DOUBLE ADDITION AND WITHOUT CONSIDERIN G THE SURRENDER OF RS. 52,40,137/- BY THE ASSESSEE. 5. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 1,24,77,1 26/- ON ACCOUNT OF INTEREST INCOME WHICH IS NOT THE REAL INCOME OF THE ASSESS EE AND WAS CALCULATED WITHOUT ANY BASIS. 6. THE ASSESSEE PRAYS YOUR INDULGENCE TO ADD AMEN D OR ALTER ALL OR ANY GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HE ARING. 5.1 DURING THE COURSE OF HEARING, THE LD. AR HAS NO T PRESSED THE GROUND NO.1 AND 2. HENCE, THE SAME ARE DISMISSED BEING NOT PRESSED. 6.1 THE GROUND NO. 6 OF THE ASSESSEE IS GENERAL IN NATURE WHICH DOES NOT REQUIRE ANY ADJUDICATION. 7.1 THE GROUND NOS. 3 AND 4 ARE IN CONNECTION WITH ONE ISSUE ONLY. THE FACTS APROPOS TO THIS ISSUE ARE THAT DURING SEARCH CERTAIN LOOSE PAPERS WERE FOUND AND SEIZED FROM THE ASSESSEE. THESE PAPERS CONTAIN DEBIT AND CREDIT ENT RIES FOR WHICH THE ASSESSEE HAS GOT NO EXPLANATION. AS PER THE ASSESSEE, ONLY PEAK CREDIT THEORY IS APPLICABLE IN SUCH CASES. ACCORDING TO THE ASSESSEE, THE ENTRIES SHOULD BE SO ARRANGED IN SERIAL ORDER THAT A CREDIT FOLLOWING A DEBIT ENTRY SHOULD BE TREATED AS REFERA BLE TO THE LATTER TO THE EXTENT POSSIBLE AND THAT NOT THE AGGREGATE BUT ONLY THE PEAK OF T HE CREDIT SHOULD BE TREATED AS UNEXPLAINED. THE A.O. HAS CALCULATED THE PEAK AMOUN T AND HAS MADE THE IMPUGNED ADDITION. THE DEFENCE OF THE ASSESSEE IS THAT THE P EAK COMPUTED BY THE A.O. IS NOT CORRECT. THE SEIZED PAPERS MARKED AS ANNEXURE A-1 TO A-4 IS MENTIONED IN PARA 5 BY THE A.O. IN HIS ASSESSMENT ORDER, CONTAINING TRANSACTION OF CA SH RELATING TO FINANCE BUSINESS. THE 8 ENTRIES DID NOT CONTAIN THE ADDRESSES OF THE CREDIT ORS OR THE DEBTORS. THE ASSESSEE WAS NOT IN A POSITION TO EXPLAIN AND FURNISH THE SOURCE AN D EVIDENCE OF ENTRIES OR ADDRESS THEREOF. THE ASSESSEE OFFERED ALL THE CREDIT AND DEBIT ENTRI ES PERTAINING TO HIM INDIVIDUALLY AND AGREED TO PAY TAX ON THE PEAK AMOUNT OF THESE TRANS ACTIONS. AS PER THE A.O., THE PEAK FIGURE COMES TO RS. 3,21,31,593/- WHEREAS AS PER TH E ASSESSEE THE PEAK AMOUNT OF CAPITAL EMPLOYED COMES TO RS. 52,40,137/- AND IT IS ONLY TH IS AMOUNT WHICH IS REQUIRED TO BE CONSIDERED AS PEAK AMOUNT. HOWEVER, BOTH THE AUTHOR ITIES BELOW REJECTED THE ASSESSEES APPEAL. 7.2 BEFORE US, BOTH THE PARTIES HAVE REITERATED THE IR EARLIER SUBMISSIONS. FOR READY REFERENCE, WE EXTRACT THE SUBMISSIONS OF THE ASSESS EE IN THIS REGARD AS UNDER:- 2. SUBMISSION OF THE ASSESSEE REGARDING THE PEAK IN THE ASSESSMENT ORDER THE LEARNED ASSESSING OFFIC ER HAS REFERRED THE STATEMENT OF THE ASSESSEE QUOTED ON PAGE NO. 5. THE SAME HAS BEEN REPRODUCED IN THE EARLIER PARAS OF THE SUBMISSION. THE ASSESSEE HAS SIMPLY SU BMITTED THAT ALL THE TRANSACTION OF CREDITS AND DEBITS BE TREATED AS PER TAINING TO HIM. THE LEARNED HAS ALSO OBSERVED AS UNDER IN PARA 10 'ON ANALYZING THE DAILY BALANCE SHEET PREPARED, IT IS FOUND THAT IN THE FINANCIAL YEAR 2008-09, THE MAXIMUM AMOUNT RECEIVED FROM VARI OUS PARTIES (WHICH HE IS NOT IDENTIFYING) WAS RS. 3,21,31,893/- BESIDES HIS OWN CASH AMOUNT OF RS. 32,24,597/- MEANING THEREBY HE HAS EMPLOYED HIS OWN CAPITAL ON 24.03.2009 TO EXTENT OF RS. 3,53,56,490/-. SINCE THIS CAPITAL IS TOTALLY UNEXPLAINED, IT IS REQUIRED TO BE ASSESSED AS UNDISCLOSED INCOME OF THE ASSESSE E FOR ASSESSMENT YEAR 2009-10 WHICH HE HAS UTILIZED IN THE FORM OF UNDISCLOSED CA SH DEBTORS.' THE ABOVE PARA CLEARLY SHOWS THAT THE LEARNED ASSES SING OFFICER HAS ACCEPTED THE FACT THAT THE CAPITAL EMPLOYED IN THE FINANCE BUSIN ESS WILL BE DEEMED TO BELONGED WITH THE ASSESSEE. IN VIEW OF THIS THE PEAK CREDIT HAD TO BE WORKED OUT ACCORDINGLY. THE LEARNED ASSESSING OFFICER HAS REFE RRED IN PARA 9 AS WELL AS IN THE SHOW CAUSE ISSUED ON 28.12.2011 THAT THE TRANSA CTION ENTRIES WERE FEEDED IN THE COMPUTER BY THE ASSESSEE HIMSELF FOR WORKING OF THE PEAK. AS SUCH THE LEARNED ASSESSING OFFICER HAS OBSERVED THAT THE PEAK CREDIT WAS VIRTUALLY WORKED OUT BY THE ASSESSEE HIMSELF. BUT THIS ASSERTION OF THE LEA RNED ASSESSING OFFICER IS WRONG. THE ASSESSEE ONLY ASSISTED THE STAFF OF THE LEARNED ASSESSING OFFICER AND DID NOT 9 WORK OUT THE PEAK HIMSELF. THE ASSESSEE HAD SUBMITT ED A WRITTEN LETTER ON 17.08.2009 COPY OF WHICH IS AVAILABLE ON PAPER BOOK PAGE NO. 37. IN THIS LETTER IT HAS BEEN SPECIFICALLY MENTIONED THAT THE TOTAL OF C REDITS IS RS. 3,15,00,000/- AND TOTAL OF DEBITS IS RS. 3,21,61,000/- AND THE ASSESS EE HAS FURTHER SUBMITTED THAT ONLY AFTER CONSULTING THE COUNSEL THE UNDISCLOSED INCOME WILL BE SURRENDERED. THEREFORE THE ASSESSEE CANNOT BE BLAMED FOR WORKING OUT THE PEAK WHICH IS WRONG. THE ASSESSEE FURTHER SUBMITTED LETTER ON 23. 12.2011 AND 26.12.2011 THAT THE WORKING OF PEAK MAY BE SUPPLIED SO THAT A COGEN T REPLY BE SUBMITTED. COPIES OF THESE LETTERS ARE AVAILABLE ON PAPER BOOK PAGE N O. 38 TO 39. THE WORKING OF THE PEAK DONE BY THE LEARNED ASSESSING OFFICER WAS NEVE R SUPPLIED. IT HAS COME TO THE ASSESSEE ONLY ALONG WITH THE ASSESSMENT ORDER. THE SEVERAL DEFECTS IN THE SAME HAVE ALREADY BEEN MENTIONED IN THE FORGOING PARA. I N THE CIRCUMSTANCES IT IS THE SUBMISSION OF THE ASSESSEE THAT IT IS WRONG ON THE PART OF THE LEARNED ASSESSING OFFICER TO ALLEGE THAT THE PEAK WAS WORKED OUT BY T HE ASSESSEE. THE ASSESSEE CANNOT BE BLAMED FOR THE WRONG WORKING OF THE PEAK. IN FACT IN THE REPLIES SUBMITTED TO THE LEARNED ASSESSING OFFICER UNDER LE TTER DATED 29.12.2011 COPY OF WHICH IS AVAILABLE ON PAPER BOOK PAGE NO. 40 TO 41. 'THAT AS PER COPY OF WORKING PROVIDED BY YOU THE PO SITION AS ON 31-03-2009, IS THAT THE CREDITORS BALANCE WAS RS. 3,12,98,927/- AN D BALANCE OF PROFIT & LOSS OF THE ASSESSEE WAS RS. 1,16,000/- AND THE DEBTORS INC LUDING SUSPENSE ACCOUNT WAS RS. 3,11,82,927/- THE TRANSACTIONS CLEARLY SHOWS TH AT ASSESSEE IS A FINANCE BROKER AND HE IS A ONLY A MEDIATOR IN ALL THE TRANSACTIONS AND HE WAS EARNING ONLY BROKERAGE INCOME. THE PAPERS FOUND IN ANNEXURE A-1 TO A-4 ARE ROUGH IN THE NATURE AND ONLY SOME SYMBOLIC NAMES ARE NOTED AGAIN ST EACH TRANSACTION. SECONDLY THE PAPERS ARE NOT COMPLETE AND ONLY FOR B ROKEN PERIODS. SO THE ACTUAL WORKING OR ACTUAL TRANSACTIONS CAN NOT BE ASCERTAIN ED. THEREFORE, DURING THE COURSE OF SEARCH THE ASSESSEE CAME FORWARD AND TO A VOID LITIGATION AND PURCHASE PEACE OF MIND SURRENDERED RS. 52,40,137/- AND RS. 8 ,94,407/- FOR ASSESSMENT YEAR 2009-10 & 2010-11. THE SURRENDER WAS MADE ON THE BA SIS OF ACTUAL WORKING AND AFTER BIFURCATING EACH AMOUNT IN-CORRECT HEAD FOR I NTEREST AND PRINCIPAL. WHEREAS AS PER SHOW CAUSE NOTICE THERE IS NO MATCH OF INTER EST AND PRINCIPAL AMOUNT.' THE LEARNED ASSESSING OFFICER HAS NOT POINTED OUT A NY MISTAKE IN THE WORKING OF THE PEAK BY THE ASSESSEE. AS PER THE ASSESSEE THE P EAK CREDIT FOR THE ASSESSMENT YEAR 2009-10 COMES TO RS. 52,40,137/-. THIS INCLUDE S EACH AND EVERY ITEM OF CREDIT MINUS DEBIT AS WELL AS ANY CAPITAL ALLEGED T O BELONG TO THE ASSESSEE. IN THE CIRCUMSTANCES THE SAME DESERVES TO BE ACCEPTED. 3. SPECIFIC INSTANCES OF MISTAKES COMMITTED BY THE LEARNED ASSESSING OFFICER IN WORKING OUT THE PEAK IN THE REPLY DATED 29.12.2011 COPY OF WHICH IS AVAI LABLE ON PAPER BOOK CITED SUPRA IT WAS SUBMITTED THAT THE LEARNED ASSESSING O FFICER HAD COMMITTED LOT OF MISTAKES IN WORKING OUT THE PEAK. THE RELEVANT PARA IS QUOTED BELOW 'THE SECOND ERROR WHICH IS APPEARING IN THE TRIAL B ALANCE PROVIDED BY YOU IS THAT SOME NAMES ARE APPEARING AS DEBTORS WHEREAS THEY AR E CREDITORS AND SOME NAME 10 ARE APPEARING AS CREDITORS WHICH ARE IN ACTUAL OUR DEBTORS LIKE SHRI BADRI NARAIN SODANI IS OUR CREDITOR FOR RS. 25,00,000/- WHEREAS IN WORKING HE IS APPEARING AS DEBTORS FOR RS. 23,18,900/-. THEREFORE, THE ENTIRE WORKING IS NOT RELIABLE. LIKEWISE THERE ARE CERTAIN DISCREPANCIES IN THE NAME AND AMO UNTS. BECAUSE SHRI BADRI NARAIN SODHANI HAS GIVEN US THE AMOUNT BEFORE THE D ATES MENTION IN ROUGH NOTING AND WE RETURNED THE SAME TO HIM IN THE PERIOD MENTI ON IN THE PAPER.' THE LEARNED ASSESSING OFFICER HAS FAILED TO ADDRES S THE MISTAKES. HE HAS BRUSHED ASIDE THE OBJECTION OF THE ASSESSEE SIMPLY ON THE GROUND THAT HOW COULD THE ASSESSEE KNOW WHETHER THE ENTRY WAS A DEBTOR OR A CREDITOR. THE LEARNED ASSESSING OFFICER IS WRONG IN MAKING SUCH OBSERVATI ON. THE DEBITS AND CREDITS WERE APPARENT FROM THE LOOSE SHEETS. THEY ARE WRITT EN ON DIFFERENT SIDES OF THE PAPER AS SUCH THERE WAS NO DISCRETION LEFT TO THE A SSESSEE IN INDENTIFYING A DEBTOR OR A CREDITOR. 4. SECTION OF THE ACT IS NOT QUOTED IT IS FURTHER SUBMITTED THAT IN THE ENTIRE ASSESSME NT ORDER THE LEARNED ASSESSING OFFICER HAS NO WHERE QUOTED THE RELEVANT SECTION UN DER WHICH ADDITION OF RS. 3,21,31,893/- HAS BEEN MADE. THE LEARNED ASSESSING OFFICER DERIVES HIS POWERS AND FUNCTIONS FROM THE INCOME TAX ACT, 1961. WHILE MAKING SUCH A SUBSTANCE ADDITION IT WAS EXPECTED OF HIM TO HAVE QUOTED THE RELEVANT SECTION UNDER WHICH THE ADDITION WAS MADE. HAVING NOT DONE SO THE EXERC ISE OF MAKING THE ADDITION IS AB-INITIO VOID. IN THE ABSENCE OF RELEVANT SECTION THE ASSESSEE IS UNABLE TO CHALLENGE THE ADDITION LEGALLY. IT IS REQUESTED THE ADDITION MAY BE KNOWN DOWN. IN VIEW OF THE AFORESAID FACTS THE ADDITION MADE OF RS. 3,21,31,893/- ON ACCOUNT OF PEAK CREDIT IS ILLEGAL AND FACTUALLY WRONG. IN VIEW OF THE WORKING OF THE ASSESSEE THE DECLARED INCOME ON ACCOUNT OF PEAK AND HIS RETU RN OF INCOME AT RS. 52,40,137/- REQUIRES TO BE ACCEPTED. THE LEARNED AS SESSING OFFICER WAS NOT JUSTIFIED IN MAKING A SEPARATE ADDITION ON ACCOUNT OF SELF EMPLOYED CAPITAL OF RS. 32,42,597/-. IT IS SUBMITTED THAT WHEN THE ASSESSEE HAD OWNED ALL THE TRANSACTIONS OF DEBITS AND CREDITS APPEARING IN THE LOOSE PAPERS AND HAD ALSO GIVEN THE WORKING OF THE PEAK OF SUCH PAPERS AT RS. 52,40,137 /- AND SURRENDERED THE SAME AS HIS INCOME WHILE FILING THE RETURN OF INCOME, TH ERE WAS NO OCCASION NOR ANY GROUND FOR MAKING ANY SEPARATE ADDITION OF RS. 32,4 2,597/-.' 5. DECISION OF THE LEARNED CIT(A) IS ERRONEOUS - (A) WORKING OF THE PEAK CREDIT IT IS SUBMITTED THAT THE LEARNED CIT(A) HAS NOT BEE N ABLE TO SUPPORT IN WHAT MANNER THE LEARNED ASSESSING OFFICER WORKED OU T THE PEAK CREDIT. IT IS ONLY IN THE ROUND ABOUT MODE THAT THE LEARNED CI T(A) HAS AVOIDED THE ISSUE. IT HAS BEEN MENTIONED BY THE LEARNED CIT(A) THAT THE PEAK CREDIT WAS WORKED OUT WITH THE HELP OF THE ASSESSEE FROM T HE BASIS OF DAY TO DAY BALANCES. THE LEARNED CIT(A) HAS HELD THAT IN THE C ASE OF THE ASSESSEE IT IS THE TOTAL OF A DAY BALANCE WHICH HAS TO BE CONSI DERED AND NOT THE 11 BALANCE AFTER MINUS THE DEBITS. IN THIS REGARD IT I S SUBMITTED THAT THE FINDING OF THE LEARNED CIT(A) IS ERRONEOUS. FIRSTLY WHATEVER CREDIT ENTRIES WERE AVAILABLE ON THE LOOSE PAPERS THESE APPARENTLY DISCLOSED THE NAME OF PERSONS WHEREFROM THE MONEY HAD COME THAT IS TO SAY THE MONEY DID NOT BELONG TO THE ASSESSEE AND HENCE ONLY COMMISSION @ 0.10% WAS ASSESSABLE IN THE HANDS OF THE ASSESSEE. AND IN ANY CASE IF THE CREDITS WERE TO BE CONSIDERED AS MONEY BELONGING TO THE ASS ESSEE THEN THE PEAK THEORY HAD TO BE APPLIED IN LETTER AND SPIRIT. IT D ID NOT BEHOVE THE LEARNED CIT(A) TO STATE THAT THE LEARNED ASSESSING OFFICER WAS JUSTIFIED IN WORKING OUT THE PEAK ON THE BASIS OF DAY TO DAY BALANCES WH EREAS WHAT WAS REQUIRED WAS BALANCE ON ENTRY TO ENTRY BASIS HAD TO BE CONSIDERED FOR WORKING OUT THE PEAK CREDIT. THE ASSESSEE HAS SUBMI TTED THAT THE PEAK CREDIT IN THE CASE OF THE ASSESSEE WORKED OUT ONLY TO RS. 52,40,137/-. (B) ONLY COMMISSION INCOME IS ASSESSABLE NOTWITHSTANDING THE AFORESAID SUBMISSION OF CONSIDE RING THE PEAK CREDIT IN THE HANDS OF THE ASSESSEE, THE MAIN SUBMISSION O F THE ASSESSEE IS THAT ONLY COMMISSION INCOME IS ASSESSABLE IN HIS HANDS. SUCH COMMISSION INCOME WOULD WORKED OUT TO RS. 9,16,781/- (@ 0.10% ON TOTAL OF THE CREDITS 91,67,81,272/-). THE DEPARTMENT HAS NOT BEE N ABLE TO DISPROVE THAT ASSESSEE WAS NOT A FINANCE BROKER. THE ASSESSEE HAS NO TANGIBLE ASSETS TO AS TO HAVE CAPITAL AS ASSESSED BY THE LEARNED ASSES SING OFFICER. IT IS RELEVANT THAT ASSESSEE HAS NOT BEEN ABLE TO PAY EVE N A SINGLE PENNY AGAINST THE OUTSTANDING BECAUSE HE HAS NO MEANS TO PAY AND THE DEPARTMENT HAS NOT BEEN ABLE TO LOCATE ANY ASSET IN THE HANDS OF THE ASSESSEE. THIS ONLY GOES TO PROVE THAT ASSESSEE WAS A SMALL TIME FINANCE BROKER. THE ADDITIONS MADE IN HIS HANDS ARE TOTALLY UNJUSTIFIED. (C) SEIZED PAPERS ARE NOT BOOKS OF ACCOUNTS IT IS FURTHER SUBMITTED THAT THE LEARNED CIT(A) HAS ERRED IN HOLDING THAT THE PEAK CREDITS ARE ASSESSABLE U/S 68 OF THE INCOM E TAX ACT, 1961. THE PROVISIONS HAVE WRONGLY BEEN APPLIED. THE RELEVANT PROVISIONS ARE QUOTED BELOW: - CASH CREDITS. 22 68. 23 WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS 24 OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANAT ION OFFERED BY HIM IS NOT, IN THE OPINION OF THE 25 [ASSESSING] OFFICER, SATISFACTORY, THE SUM SO CREDITED MAY BE CHARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR :' THE PROVISIONS OF SECTION 68 STIPULATE THAT IN COME S INTO OPERATION ONLY IF THE SUM IS FOUND CREDIT 'IN THE BOOKS'. IN THE CASE OF THE ASSESSEE NO BOOKS 12 WERE FOUND. ONLY ROUGH LOOSE SHEETS HAVING LOT OF C UTTING AND CROSSING WERE FOUND AND BY NO STRETCH OF IMAGINATION THESE C OULD BE TERMED AS BOOKS. THE LOOSE PAPERS DO NOT FIND PLACE IN THE DE FINITION OF BOOKS AS PER PROVISIONS OF SECTION 2(12A). THE SAME ARE QUOTED B ELOW: - SECTION (12A): 'BOOKS OR BOOKS OF ACCOUNT' INCLUDES LEDGERS, DAY -BOOKS, CASH BOOKS, ACCOUNT-BOOKS AND OTHER BOOKS, WHETHER KEPT IN THE WRITTEN FORM OR AS PRINT-OUTS OF DATA STORED IN A FLOPPY, D ISC, TAPE OR ANY OTHER FORM OF ELECTRO-MAGNETIC DATA STORAGE DEVICE;]' FURTHER THE FOLLOWING CASE LAWS ARE QUOTED IN SUPPO RT THAT LOOSE SHEETS ARE NOT BOOKS OF ACCOUNTS: - (I) SHERATON APPARELS VS. ACIT (2002) 256 ITR 20) IF 'BOOKS OF ACCOUNT' IS CONSIDERED IN ISOLATION, T HEN, IT MAY MEAN BOOKS IN WHICH MERCHANTS, TRADERS AND BUSINESSMEN G ENERALLY KEEP THEIR ACCOUNTS AND ARE MAINTAINED FOR RECORDING (A) ALL RECEIPTS AND EXPENSES WITH MATTERS RELATING THERETO; (B) ALL SALES AND PURCHASES; AND (C) THE ASSETS AND LIABILITIES. THEY ARE THE DOCUMENTS AND LEDGERS WHICH MUST BE PREPARED AND KE PT BY THE BUSINESS ENTITY INCLUDING THE P&L A/C AND THE BALAN CE-SHEET. IN TRADITIONAL TERMS, BOOKS MEANS A COLLECTION OF SHEE TS OF PAPERS BOUND TOGETHER WITH THE INTENTION THAT SUCH BINDING SHALL BE PERMANENT AND PAPERS USED ARE KEPT COLLECTIVELY IN ONE VOLUME. IT MAY ALSO BE ASSUMED THAT IT CONNOTES THE INTENTION THAT IT SHOULD SERVE AS A PERMANENT RECORD. AT THE SAME TIME, THE TERM OF ACCOUNT I.E., TO ACCOUNT, MEANS TO RECKON, AND IT IS DIFFICULT TO CONCEIVE OF ANY ACCOUNTING WHICH DOES NOT INVOLVE E ITHER ADDITIONS OR SUBTRACTIONS OR BOTH OF THESE OPERATIONS OF ARIT HMETIC. A BOOK WHICH CONTAINS SUCCESSIVE ENTRIES OF ITEMS MAY BE A GOOD MEMORANDUM BOOK; BUT UNTIL THOSE ENTRIES ARE TOTALL ED OR BALANCED, OR BOTH, AS THE CASE MAY BE, THERE IS NO RECKONING AND NO ACCOUNTS. A BOOK WHICH MERELY CONTAINS ENTRIES O F ITEMS OF WHICH NO ACCOUNT IS MADE AT ANY TIME, IS NOT A 'BOO K OF ACCOUNT' IN A COMMERCIAL SENSE. THE TERM 'BOOKS OF ACCOUNT' REFERRED TO IN SUB-CL. (1) OF EXPLN. 5 TO S. 271(1)(C) MEANS BOOKS OF ACCOUNT WHICH HAVE BEEN MAINTAINED FOR DETERMINING ANY SOUR CE OF INCOME. THE TERM 'SOURCE OF INCOME' AS UNDERSTOOD IN THE IT ACT IS TO IDENTIFY OR CLASSIFY INCOME SO AS TO DETERMINE UNDE R WHICH HEAD, OUT OF THE VARIOUS HEADS OF INCOME REFERRED TO IN S . 14, IT WOULD FALL FOR THE PURPOSES OF COMPUTATION OF THE TOTAL INCOME FOR CHARGING INCOME-TAX THEREON. THUS, THE TERM 'BOOKS OF ACCOUN T' REFERRED TO IN THIS RELEVANT SUB-CLAUSE OF EXPLN. 5 WOULD MEAN THOSE BOOKS OF ACCOUNT WHOSE MAIN OBJECT IS TO PROVIDE CREDIBLE DA TA AND INFORMATION TO FILE THE TAX RETURNS. A CREDIBLE ACC OUNTING RECORD PROVIDES THE BEST FOUNDATION FOR FILING RETURNS OF BOTH DIRECT AND 13 INDIRECT TAXES. ACCOUNTING IS CALLED A LANGUAGE OF BUSINESS. ITS AIM IS TO COMMUNICATE FINANCIAL INFORMATION ABOUT THE F INANCIAL RESULTS. THIS IS NOT POSSIBLE UNLESS THE MAIN OBJEC TIVES OF THE BOOKS OF ACCOUNT ARE TO MAINTAIN A RECORD OF BUSINESS : T O CALCULATE PROFIT EARNED OR LOSS SUFFERED DURING THE PERIOD OF TIME, TO DEPICT THE FINANCIAL POSITION OF THE BUSINESS ; TO PORTRAY THE LIQUIDITY POSITION; TO PROVIDE UP-TO-DATE INFORMATION OF ASSETS AND LIA BILITIES WITH A VIEW TO DERIVE INFORMATION SO AS TO PREPARE A P&L A /C AND DRAW A BALANCE-SHEET TO DETERMINE INCOME AND SOURCE THEREO F. THUS, THE TERM 'BOOKS OF ACCOUNT' REFERRED TO IN EXPLN. 5 MUS T ANSWER THE ABOVE QUALIFICATIONS. IT CANNOT BE UNDERSTOOD TO ME AN COMPILATION OR COLLECTIONS OF SHEETS IN ONE VOLUME. THE BOOKS O F ACCOUNT REFERRED TO ARE THOSE BOOKS OF ACCOUNT WHICH ARE MA INTAINED FOR THE PURPOSES OF THE IT ACT AND NOT DIARIES WHICH AR E MAINTAINED MERELY AS A MANS PRIVATE RECORD ; PREPARED BY HIM AS MAY BE IN ACCORDANCE WITH HIS PLEASURE OR CONVENIENCE TO SECR ETLY RECORD SECRET, UNACCOUNTED CLANDESTINE TRANSACTIONS NOT ME ANT FOR THE PURPOSES OF THE IT ACT, BUT WITH SPECIFIC INTENTION OR DESIRE ON THE PART OF THE ASSESSEE TO HIDE OR CONCEAL INCOME SO A S TO AVOID IMPOSITION OF TAX THEREON. THE WORDS IN EXPLN. 5 'B OOKS OF ACCOUNT, IF ANY, MAINTAINED BY HIM FOR ANY SOURCE O F INCOME' ARE IMPORTANT WORDS SIGNIFYING THE LEGISLATIVE INTENT E MBODIED IN THE EXPLANATION WARRANTING GRANT OF IMMUNITY FROM PENAL TY. THE LEGISLATIVE INTENT IS TO ADMIT ONLY THOSE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE ON HIS OWN BEHALF AS BY THEIR VERY NATURE AND CIRCUMSTANCES ARE MAINTAINED FOR THE PUR POSES OF DRAWING THE SOURCE OF INCOME. (II) COMMISSIONER OF INCOME TAX VS. TAJ BOREWELLS (2007) 291 ITR 232 (MAD) SO, THE BOOKS OF ACCOUNT IS DEFINED AS ANY BOOK WHI CH FORMS AN INTEGRAL PART OF SYSTEM OF BOOK-KEEPING EMPLOYED IN ANY PARTICULAR BUSINESS AND CONSEQUENTLY INCLUDES BOTH THE LEDGER AND THE BOOKS OF ORIGINAL ENTRY. THE P&L A/C OF A TRADE IS THE ST ATEMENT WHEREIN THE VARIOUS ITEMS OF PROFIT AND REVENUE ON THE ONE HAND AND THE LOSSES AND EXPENDITURE ON THE OTHER HAND, ARE COLLE CTED AND OFFSET, THE ONE CLASS AGAINST THE OTHER, THAT IS, IN COMPIL ING SUCH AN ACCOUNT BEINGDEBIT ALL THE LOSSES, CREDIT ALL THE GAINS. THE RESULTING BALANCE OF THIS ACCOUNT REPRESENTS THE NE T PROFITS OR THE NET LOSSES FOR THE PERIOD UNDER REVIEW. THE OBJECT OF A P&L A/C IS TO ASCERTAIN THE INCOME OF A BUSINESS AND BY OFFSET TING THE EXPENSES OF EARNING THAT INCOME, TO ASCERTAIN THE NET INCREA SE (PROFIT) OR DECREASE (LOSS) IN THE TRADERS 'NET WORTH' FOR THE PERIOD. BALANCE SHEET LISTS THE ASSETS AND LIABILITIES AND EQUITY A CCOUNTS OF THE COMPANY. IT IS PREPARED AS ON A PARTICULAR DAY AN D THE ACCOUNTS 14 REFLECT THE BALANCES THAT EXISTED AT THE CLOSE OF B USINESS ON THAT DAY. BY FOLLOWING THE JUDGMENT OF THE MADRAS HIGH C OURT CITED SUPRA AND TAKING NOTE OF THE DEFINITION OF THE BOOK S OR BOOKS OF ACCOUNT IN THE IT ACT AS WELL AS IN P. RAMANATHA AI YARS ADVANCED LAW LEXICON, 3RD EDN. 2005, AND ALSO THE MEANING OF THE P&L A/C AND BALANCE SHEET, WE CAN SAFELY CONCLUDE THAT THE P&L A/C AND THE BALANCE SHEET ARE NOT THE BOOKS OF ACCOUNT AS C ONTEMPLATED UNDER THE PROVISIONS OF THE ACT. THE LEARNED STANDI NG COUNSEL FOR THE REVENUE HAS NOT PLACED ANY AUTHORITY OR ANY CAS E LAW OR ANY OTHER MATERIAL OR EVIDENCE TO SHOW THAT THE BOOKS O F ACCOUNT INCLUDES P&L A/C AND BALANCE SHEET. BOOKS IN WHICH MERCHANTS, BUSINESSMEN, AND TRADERS GENERALLY KEEP THEIR ACCOUNTS. BOOKS OF ACCOUNTS MEAN SUCH BOOKS OF ACCOUNT AS ARE USUAL IN THE BUSINESS, AND DO NOT EX TEND TO LETTERS, CHEQUES, AND VOUCHERS FROM WHICH BOOKS OF ACCOUNT C AN BE MADE UP IN VIEW OF THE ABOVE THE LEARNED CIT(A) WAS NOT JUS TIFIED IN UPHOLDING THE ADDITION U/S 68 OF THE INCOME TAX ACT, 1961. THE AC TION OF THE LEARNED CIT(A) DESERVES TO BE QUASHED. (D) RATIO OF CASES QUOTED BY THE LEARNED CIT(A) IS NOT APPLICABLE IT IS SUBMITTED THAT THE LEARNED CIT(A) HAS REFERRE D THE FOLLOWING TWO CASE LAWS FOR MAKING THE ADDITION. THE SAME ARE ANALYZED BELOW AND ARE NOT APPLICABLE TO THE FACTS OF THE CASE OF THE ASSESSEE (III) RAJNIK AND CO. VS. ACIT (AP) 251 ITR 561 IN THIS CASE ADDITIONS WERE MADE WITH REFERENCE TO LOOSE SLIPS AND SHEETS SHOWING SUPPRESSION OF TURNOVER AS WELL AS A DMISSION IN THE STATEMENT BY THE PARTNER OF THE FIRM. THUS ADDITION S WERE MADE ON THE BASIS OF SUPPORTING EVIDENCE AND NOT EXCLUSIVEL Y, SOLELY AND WHOLLY ON THE BASIS OF STATEMENT U/S 132(4). HENCE THE RATIO OF THE CASE IS NOT APPLICABLE TO THE FACTS OF THE CASE OF THE ASSESSEE. (IV) RAJENDRA KUMAR LAHOTY VS. DCIT (RAJ) 266 ITR 621 IN THIS CASE NO ADDITIONS WERE MADE ON THE BASIS OF STATEMENT U/S 132(4). HENCE THE RATIO OF THE CASE IS NOT APPLICAB LE TO THE FACTS OF THE CASE OF THE ASSESSEE. GROUND NO.4 :- UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 32,42,597/- AS OWN UNEXPLAINED CASH/CAPITAL 15 EMPLOYED IN DEBTORS AFTER ADDITION OF RS. 3,21,31, 893/- WHICH AMOUNTS TO DOUBLE ADDITION AND WITHOUT CONSIDERING THE SURRENDER OF RS. 52,40,137/- BY THE ASSESSEE. IT IS SUBMITTED THAT OVER AND ABOVE THE PEAK CREDI T THE LEARNED ASSESSING OFFICER HAS MADE FURTHER ADDITION OF RS. 52,40,137/- ON AC COUNT OF DEBTORS EXCEEDING THE CREDITORS. THE ENTIRE EXERCISE OF THE LEARNED ASSE SSING OFFICER IS FULL OF DRAWBACKS. THE PEAK DETERMINED BY THE LEARNED ASSE SSING OFFICER WAS FAULTY AND SO IS THE POSITION OF THE DEBTORS AND CREDITORS. O NCE THE PEAK AMOUNT HAS BEEN ADDED THERE WAS NO OCCASION FOR MAKING A SEPARATE ADDITION OF RS. 52,40,137/-. THE LIST PREPARED OF DEBTORS AND CREDITORS HAS NO BASE. IT HAS BEEN PREPARED BY THE LEARNED ASSESSING OFFICER TO HIS SWEET WILL AN D CONVENIENCE. FURTHER IT HAS NOT BEEN MENTIONED UNDER WHAT SECTION THIS ADDITIO N IS JUSTIFIED. THE LEARNED CIT(A) HAS WRONGLY UPHELD THIS ADDITION U/S 69B. T HE RELEVANT SECTION IS QUOTED BELOW: - 'AMOUNT OF INVESTMENTS, ETC., NOT FULLY DISCLOSED IN BOOKS OF ACCOUNT. 30 69B. WHERE IN ANY FINANCIAL YEAR THE ASSESSEE HAS M ADE INVESTMENTS OR IS FOUND TO BE THE OWNER OF ANY BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE, AND THE 34 [ASSESSING] OFFICER FINDS THAT THE AMOUNT EXPENDED ON MAKING SUCH INVESTMENTS OR IN ACQUIRING SUCH BULLION, JEWELLERY OR OTHER V ALUABLE ARTICLE EXCEEDS THE AMOUNT RECORDED IN THIS BEHALF IN THE BOOKS OF ACC OUNT MAINTAINED BY THE ASSESSEE FOR ANY SOURCE OF INCOME, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT SUCH EXCESS AMOUNT OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION OF THE 34 [ASSESSING] OFFICER, SATISFACTORY, THE EXCESS AMOUN T MAY BE DEEMED TO BE THE INCOME OF THE ASSESSEE FOR SUCH FINANCIAL YEAR.]' THE PERUSAL OF THE AFORESAID SECTION REVEALS IT IS APPLICABLE FOR INVESTMENT IN THE ACQUISITION OF BULLION, JEWELLERY OR OTHER VALUABL E ARTICLE. THERE IS NO MENTIONED OF INVESTMENT IN DEBTORS. THE SECTION STIPULATES I NHERENTLY THAT THE INVESTMENT EXCEEDS THE AMOUNT SHOWN IN THE BOOKS OF ACCOUNTS. THIS IS NOT THE POSITION IN THE CASE OF THE ASSESSEE. THERE ARE NO ACCOUNT BOOKS M AINTAINED BY THE ASSESSEE WHEREIN THE DEBTORS AND CREDITORS IN QUESTION ARE REFLECTED. THUS THE ADDITION HAS WRONGLY BEEN MADE AND WRONGLY UPHELD BY THE LEARNE D CIT(A) U/S 69B. THE ASSESSEE CONTINUES TO PLEAD THAT ONLY THE COMMISSI ON INCOME NEEDS TO BE DETERMINED IN HIS CASE AND NOTHING ELSE. 7.3 ON THE OTHER HAND, THE LD DR HAS RELIED UPON TH E A.O.S WORKING CONTAINING IN PARA OF ASSESSMENT ORDER AND ALSO HAS RELIED UPON T HE LD CIT(A)S ORDER. 7.4 AFTER CONSIDERING THE RIVAL SUBMISSIONS AND THE MATERIALS AVAILABLE ON RECORD, WE ARE OF THE CONSIDERED OPINION THAT THE SEIZED PAPER S CANNOT TREATED AS BOOKS OF ACCOUNT. FURTHERMORE, ONLY THE COMMISSION INCOME CAN BE ASSE SSED IN THE HANDS OF THE ASSESSEE @ 16 0.10% ON A TOTAL OF THE CREDITS OF RS. 91,67,81,272 /-. THE ADDITION U/S 68 OF THE ACT CAN BE MADE ONLY IF ANY SUM IS FOUND CREDITED IN THE BO OKS OF THE ASSESSEE. A BOOK MEANS A COLLECTION OF SHEETS OF PAPERS BOUND TOGETHER WITH THE INTENTION THAT SUCH BINDING SHALL BE PERMANENT AND PAPERS USED ARE KEPT COLLECTIVELY IN ONE VOLUME. A BOOK WHICH CONTAINS SUCCESSIVE ENTRIES OF ITEMS MAYBE A GOOD MEMORANDUM BOOK BUT UNTIL THOSE ENTRIES ARE TOTALED OR BALANCED OR BOTH AS THE CASE MAY BE, THE RE IS NO RECKONING AND NO ACCOUNTS. A BOOK WHICH MERELY CONTAINS ENTRIES OF ITEMS OF WHIC H NO ACCOUNT IS MADE AT ANY TIME, IS NOT A BOOK OF ACCOUNT IN A COMMERCIAL SENSE. THU S THE ADDITION MADE U/S 68 IS NOT JUSTIFIED. IT IS NOTICED THAT OVER AND ABOVE THE PE AK CREDIT, THE A.O. HAS FURTHER MADE AN ADDITION OF RS. 52,40,137/- ON ACCOUNT OF DEBTORS E XCEEDING THE CREDITORS. WE HAVE FOUND THAT THE PEAK DETERMINED BY THE A.O. IS NOT CORRECT , OTHERWISE ALSO, WHEN ONCE PEAK AMOUNT HAS BEEN ADDED THEN NO SEPARATE ADDITION IS REQUIRED. IT SEEMS THAT THE A.O. HAS NOT PROPERLY PREPARED THE LIST OF DEBTORS AND CREDI TORS BASED ON ANY LOGIC. THE LD CIT(A) HAS CONFIRMED THE ADDITION OF RS. 52,40,137/- UNDER THE PROVISIONS OF SECTION 69B OF THE ACT. THIS SECTION RELATES TO INVESTMENT MADE BY THE ASSESSEE IN THE ACQUISITION OF BULLION/JEWELLERY OR OTHER VALUABLE ARTICLES BUT IT DOES NOT SPEAK ABOUT ANY INVESTMENT IN DEBTORS. MOREOVER, SECTION 69B ALSO STIPULATES THE POSITION WHERE THE INVESTMENT EXCEEDS THE AMOUNT SHOWN IN THE BOOKS OF ACCOUNT. SINCE THE ASSESSEE DOES NOT MAINTAIN ANY BOOKS OF ACCOUNT WHEREIN THE DEBTORS AND CREDITORS ARE REFLECTED , THEREFORE, THIS ADDITION HAS ALSO BEEN WRONGLY MADE AND UPHELD U/S 69B OF TH E ACT. HENCE, IN OUR CONSIDERED OPINION, ONLY COMMISSION INCOME HAS TO BE DETERMINE D IN THIS CASE AND NOTHING MORE. ACCORDINGLY, WE REVERSE THE FINDINGS OF THE LD CIT( A) AND ORDER TO DELETE THE ENTIRE ADDITION SO MADE. THUS GROUND NOS. 3 AND 4 OF THE A SSESSEE ARE ALLOWED. 17 8.1 THE NEXT GROUND NO. 5 WHICH PERTAINS TO CONFIRM ATION OF ADDITION OF RS. 1,24,77,126/- MADE ON ACCOUNT OF INTEREST INCOME WH ICH IS NOT THE REAL INCOME OF THE ASSESSEE. 8.2 THE FACTS OF THIS GROUND NO. 5 ARE THAT THE A.O . HAS CALCULATED THE NOTIONAL INTEREST ON RS. 91,67,81,272/-. AS PER THE ASSESSE E, NO ESTIMATED ADDITION IS JUSTIFIED UNDER THE PROCEEDINGS CARRIED OUT U/S 153A OF THE A CT. IT IS NOT THE CASE OF THE A.O. THAT THERE ARE DOCUMENTS INDICATING THE RECEIPT OF INTER EST BY THE ASSESSEE. THE A.O. HAS NOT PROVIDED ANY DETAILS OF CALCULATION OF THIS INTERES T WHEREAS THE LD CIT(A) HAS CALCULATED THE INTEREST ON THE TOTAL CREDIT ON ROTATIONAL BASI S. THE VEHEMENT CASE OF THE ASSESSEE IS THAT NO SUCH NOTIONAL INTEREST CAN BE ADDED U/S 153 A OF THE ACT. IN THIS REGARD, THE RELIANCE HAS BEEN PLACED ON THE FOLLOWING DECISIONS . 1. MRS SUSHILA MALLIK VS ITO (2011) 61 DTR 437 (L UCKNOW) 2. KESRI CHAND JAI SUKH LAL VS CIT , 248 ITR 47 ( GAU) 3. CIT VS ASIAN HOTELS LTD. (2010) 323 ITR 470 (D EL.) IT WAS FURTHER ARGUED THAT THE ASSESSEE WAS NOT DOI NG ANY MONEY LENDING BUSINESS. HOWEVER, THE LD DR SUPPORTED THE ORDERS OF THE AUTH ORITIES BEOW. 8.3 AFTER CONSIDERING THE RIVAL SUBMISSIONS AND ON PERUSAL OF THE MATERIALS AVAILABLE ON RECORD, WE HAVE FOUND THAT THE A.O. HAS FAILED T O CAUSE ENQUIRY IN RESPECT OF THESE PARTIES. IN OUR CONSIDERED OPINION, THE A.O. HAS WR ONGLY CONSIDERED THE ENTIRE CREDITS AND INTEREST ENTRIES IN THE HANDS OF THE ASSESSEE. ACCO RDINGLY, WE ARE IN AGREEMENT WITH THE SUBMISSION OF THE LD. AR AND ORDER TO DELETE THE AD DITION OF RS. 1,24,77,126/- ADDED ON ACCOUNT OF NOTIONAL INTEREST. THUS THE GROUND NO. 5 OF THE ASSESSEE IS ALLOWED. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED. 18 ITA NO.737/JP/2013 (ASSESSEE ) & ITA NO.778/JP/2013 (REVENUE ) A.Y. 2010-11 9.1 THESE ARE THE CROSS APPEALS AGAINST THE ORDER O F THE LD CIT(A)-CENTRAL, JAIPUR DATED 16-08-2013 FOR THE A.Y. 2010-11. 10.1 THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN HIS APPEAL. 1. THAT UNDER THE FACTS AND CIRCUMSTANCES THE L D A.O. HAS ERRED IN COMPLETING THE ASSESSMENT ON THE BASIS OF DEAF, D UMB AND ROUGH NOTING WHICH ARE NOTHING MORE THAN ROUGH PAPERS. 2. THE ORDER PASSED BY THE LD. A.O. U/S 153A/143( 3) IS VOID AB-INITIO DESERVES TO BE QUASHED. 3. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.1,39,84,5 91/- AS INCOME ON THE BASIS OF PEAK CREDITORS CALCULATED BY THEM IGNORI NG THE SUBMISSIONS OF THE ASSESSEE AND WITHOUT CONSIDERING THE CONTENTION O F THE ASSESSEE AGAINST DECLARED PEAK OF RS. 8,94,407/- WHICH WAS CALCULA TED ON MORE SCIENTIFIC BASIS. 4. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 56,03,437 /- AS OWN UNEXPLAINED CASH/CAPITAL EMPLOYED IN DEBTORS AFTER ADDITION O F RS. 2,64,61,717/- WHICH AMOUNTS TO DOUBLE ADDITION AND WITHOUT CONSIDERIN G THE SURRENDER OF RS. 52,40,137/- IN THE EARLIER YEAR AND RS. 8,94,407/ - IN THE YEAR UNDER CONSIDERATION BY THE ASSESSEE. 5. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 1,40,92,5 24/- ON ACCOUNT OF INTEREST INCOME WHICH IS NOT THE REAL INCOME OF THE ASSESS EE AND WAS CALCULATED WITHOUT ANY BASIS. 6. THE ASSESSEE PRAYS YOUR INDULGENCE TO ADD AMEN D OR ALTER ALL OR ANY GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HE ARING. 11.1 DURING THE COURSE OF HEARING, THE LD. AR HAS N OT PRESSED THE GROUND NO.1 AND 2. HENCE, THE SAME ARE DISMISSED BEING NOT PRESSED. 12.1 THE GROUND NO. 6 OF THE ASSESSEE IS GENERAL IN NATURE WHICH DOES NOT REQUIRE ANY ADJUDICATION. 19 13.1 THE GROUND NOS. 3 AND 4 ARE IN RELATION TO THE ADDITION ON THE BASIS OF PEAK CREDITS AND ACCEPTED THE AMOUNTS INVOLVED. THE ENT IRE FACTS ARE IDENTICAL TO THOSE FACTS WHICH OBTAINED IN A.Y. 2009-10 AS ABOVE. LIKE WISE THE FACTS OF GROUND NO. 5 ARE ALSO IDENTICAL TO A.Y. 2009-10. THE ARGUMENTS OF BOTH TH E PARTIES IN THIS REGARD ARE SAME AND SIMILARLY. THEREFORE, BASED ON THE SAME REASONING, WE DELETE THE IMPUGNED ADDITIONS RAISED IN GROUND NO. 3, 4, AND 5 AND ALLOW THESE GR OUNDS OF APPEAL OF THE ASSESSEE. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED 14.1 THE CORRESPONDING APPEAL OF THE REVENUE RAISE S FOLLOWING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD CIT(A), CENTRAL, JAIPUR HAS ERRED IN DELETING THE ADDITIO N OF RS. 1,27,77,126/- OUT OF TOTAL ADDITION MADE BY THE A.O. OF RS. 2,64,61 ,717/- ON ACCOUNT OF INCOME OF PEAK CREDITORS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE,LD CIT(A), CENTRAL, JAIPUR HAS ERRED IN DELETING THE ADDITIO N OF RS. 60,50,118/- MADE BY THE A.O. ON ACCOUNT OF INTEREST CHARGEABLE AFT ER SEARCH ON OUTSTANDING DEBTS AS ON 30-06-2009. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD CIT(A) ,CENTRAL, JAIPUR HAS ERRED IN DELETING THE ADDITI ON OF RS. 25,00,000/- MADE BY THE A.O. ON ACCOUNT OF UNEXPLAINED MONEY U/S 6 9A. 4. THE APPELLANT CRAVES THE RIGHT TO AMEND ALTER OR ADD TO ANY OF THE GROUNDS OF APPEAL GIVEN ABOVE. 15.1 THE GROUND NOS. 1 AND 2 OF THE REVENUES APPEA L ARE PART AND PARCEL OF GROUND NOS. 3,4, AND 5 OF THE ASSESSEES APPEAL AND THEY G OT DECIDED ALONGWITH THOSE GROUNDS AS WE HAVE ALREADY HELD THAT THE DELETION OF ADDITION TO THAT EXTENT ARE CORRECT. THEREFORE, THE GROUND NO. 1 AND 2 OF THE REVENUES APPEAL STAND DI SMISSED. 20 16.1 IN REVENUES APPEAL, THERE IS ONE MORE GROUND WHICH PERTAINS TO DELETION OF ADDITION OF RS. 25.00 LACS MADE BY THE A.O. ON ACCO UNT OF UNEXPLAINED MONEY U/S 69A OF THE ACT. THE SUBMISSIONS REGARDING THIS GROUND ARE AS UNDER:- THE LEARNED CIT(A) HAS DELETED THE ADDITION AFTER C ONSIDERING THE SUBMISSION OF THE ASSESSEE HOLDING THAT THE CAS H FOUND WAS FULLY COVERED IN THE ADDITIONS MADE U/S 68 AND 69B. THE ASSESSEE DESERVES TO BE GIVEN BENEFIT OF TELESCOPIN G. THE ACTION OF THE LEARNED CIT(A) REQUIRES TO BE CONFIRM ED. THE SUBMISSION MADE BEFORE THE LEARNED CIT(A) IS QUOTED BELOW:- 'THE ADDITION MADE BY THE LEARNED ASSESSING OFFICER IS ON ACCOUNT OF CONFUSION. THE LEARNED ASSESSING OFFI CER HAS FAILED TO PROPERLY APPRECIATE THE FACTS. IN THIS CA SE THE SEARCHWAS CONDUCTED ON 23.07.2009 AND DURING THE CO URSE OF SEARCH LOOSE PAPERS WERE FOUND FOR THE PERIOD PERTA INING TO 01.06.2009 TO 30.06.2009. IT MEANS THE ASSESSEE WAS EARNING INCOME FROM FINANCE BROKERAGE WAS HAVING MONEY IN CIRCULATION. SUCH MONEY ALTHOUGH BELONGS TO OTHER P ERSONS BUT WAS SURRENDERED FOR PURPOSES OF TAX TO THE DEPA RTMENT. IN THIS CONTEXT IT WAS OUT OF DEBTORS PERTAINING TO TH E PERIOD 01.06.2009 TO 22.07.2009 (A DAY BEFORE THE DATE OF SEAR THAT CASH TO THE EXTENT OF RS. 25,00,000/- STOOD REALIZE D AND WAS AVAILABLE IN THE HANDS OF THE ASSESSEE. SUCH CASH F ORMS PART OF THE PEAK AMOUNT SURRENDERED BY THE ASSESSEE IN ASSESSMENT YEAR 2009-10 AT RS. 52,40,137/- AND RS.8 ,94,407/- IN ASSESSMENT YEAR 2010-11. NO SEPARATE ADDITION IS CALLED FOR ON ACCOUNT OF THE AVAILABILITY OF CASH. THE SAME IS OUT OF THE CREDITS/REALIZATION OF DEBITS OF WHICH PEAK AMOUNT OF RS. 52,40,137/- HAS BEEN SURRENDERED IN ASSESSMENT YEAR 2009- 10. IT IS FURTHER SUBMITTED THAT THE CASH FOUND DOE S NOT EXCEED THE PEAK AMOUNT OF RS. 52,40,137/- WHICH HAS BEEN W ORKED OUT FOR THE PERIOD ENDING 31.03.2009 WHEREAS THE CA SH HAS BEEN FOUND ON A SUBSEQUENT DATE I.E. 23.07.2009. IN THESE CIRCUMSTANCES THERE IS TOTALLY NO JUSTIFICATION FOR TREATING THE CASH UNEXPLAINED IN THE BACKGROUND OF THE SURRENDER OF THE PEAK AMOUNT OF RS. 52,40,137/-.' 21 17.1 ON THE OTHER HAND, THE LD DR HAS RELIED N THE ORDERS OF THE AUTHORITIES BELOW . 18.1 WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE C AREFULLY PERUSED THE ENTIRE MATERIAL ON RECORD . DURING SEARCH, THE LOOSE PAPER S WERE FOUND FOR THE PERIOD 01-06- 2009 O 30-06-2009. AS PER THE ASSESSEE, THIS MONEY BELONGED TO OTHER PERSONS AS HE WAS ENGAGED IN FINANCE BROKERAGE. HOWEVER, THIS SURREND ER WAS FOR THE PURPOSE OF TAX. THIS MONEY WAS TREATED OUT OF DEBTORS PERTAINING TO THE PERIOD 01-06-2009 TO 22-07-2009 I.E. A DAY BEFORE THE DATE OF SEARCH AND A CASH TO THE EXT ENT OF RS. 25.00 LACS STOOD REALIZED AND WAS IN THE HANDS OF THE ASSESSEE. IN THE BACKGROUND OF SURRENDER OF PEAK AMOUNT OF RS. 52,40,137/-, WE DO NOT FIND AND SEE ANY JUSTIFICATI ON FOR TREATING THE CASH IN QUESTION AS UNEXPLAINED. SUCH CASH FORMS PART OF THE PEAK AMOU NT SURRENDERED BY THE ASSESSEE IN A.Y. 2009-10 AT RS. 52,40,137/- AND AT RS. 8,94,4 07/- IN A.Y. 2010-11. IN OUR CONSIDERED OPINION, NO SEPARATE ADDITION IS CALLED FOR ON ACCOUNT OF AVAILABILITY OF CASH. THIS CAN BE OUT OF THE CREDITS/ REALIZATION OF DEBI TS OF THE PEAK AMONT OF RS. 52,40,137/- WHICH HAS BEEN SURRENDERED IN A.Y. 2009-10. IT IS A LSO A FACT THAT THE CASH FOUND DOES NOT EXCEED THE PEAK AMOUNT OF RS. 52,40,937/- WHICH HAS BEEN WORKED OUT FOR THE PERIOD ENDING31-03-2009 WHEREAS THE CASH HAS BEEN FOUND ON A SUBSEQUENT DATE I.E. 23-07-2009. THUS IN THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THERE IS NO JUSTIFICATION OF TREATING THE CASH AS UNEXPLAINED. CONSEQUENTLY, THE AMOUNT HAS BEEN CORRECTLY DELETED BY THE LD CIT(A). THUS GROUND NO. 3 OF THE REVENUE IS DISMISSED. 22 19. IN THE RESULT, APPEALS OF THE ASSESSEE IS PARTL Y ALLOWED AND THAT OF THE REVENUE IS DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 07-0 3-2014 SD/- SD/- ( N.K. SAINI ) (HARI OM MARATHA ) ACCOUNTANT MEMBER JUDICIAL MEMBER *MISHRA COPY FORWARDED TO :- 1. SHRI MANISH TAMBI, JAIPUR 2. THE DCIT, CENTRAL CIRCLE-1, JAIPUR 3. THE LD.CIT(A) 4. THE LD CIT 5. THE D/R 6. GUARD FILE (ITA NO.735/JP/2013) BY ORDER, AR ITAT, JAIPUR 23