Balasaheb Barku Kolhe, Nashik V. ACIT, Nashik

ITA 784/PUN/2010

• Counselvise Citation: 78424514 RSA 2010
• Duration Of Justice: 5 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 07-01-2015
• Assessment Year: misc
• Appeal Filed On: 25-05-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VERMA; RAJESH DAMOR SINGH
• Keywords: Unexplained investment; Unexplained expenditure; Income from undisclosed sources; Search and seizure; Salary income; Loose papers; Document seized; Charitable institution; Opportunity of being heard; Principle of natural justice; Source of fund; Additional evidence; Corroborative evidences; Competent authority; Assessment record; Block assessment; Retraction; Documents seized
• Section: 143(3); 56; 132

Judgement Text

] IQ.KS IQ.KS IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE , !' # BEFORE MS. SUSHMA CHOWLA, JM AND SHRI R.K. PANDA, AM / ITA NO.803/PN/2010 / (BLOCK PERIOD 01-04-1996 TO 25-03-2003) DCIT, CIRCLE-1, NASHIK . / APPELLANT VS. SHRI BALASAHEB BARKU KOLHE, FLAT NO.5, CHETAK APARTMENTS, SAUBHAGYA NAGAR, GANGAPUR ROAD, NASHIK . / PAN NO. ALIPK0277A RESPONDENT / ITA NO.784/PN/2010 / (BLOCK PERIOD 01-04-1996 TO 25-03-2003) SHRI BALASAHEB BARKU KOLHE, 5, CHETAK APARTMENTS, GANGAPUR ROAD, NASHIK . / PAN NO. ALIPK 0277A APPELLANT VS. ACIT, CENTRAL-3, NASHIK . / RESPONDENT / ITA NO.324/PN/2010 / (BLOCK PERIOD 01-04-1996 TO 25-03-2003) ITO, CENTRAL-1, NASHIK . / APPELLANT VS. SHRI AVINASH GURUPAD BALKUNDI, 3, MUKTI, RAMDAS SAWAMI NAGAR, TAKLI ROAD, NASHIK . / PAN NO. AEJPB4519A RESPONDENT 2 / ITA NO.1196/PN/2009 / (BLOCK PERIOD 1997-98 TO 2003-04) ACIT, CIRCLE-2, NASHIK . / APPELLANT VS. SHRI NEMICHAND L. PODDAR, PODDAR HOUSE, PATIL LANE NO.3, NASHIK . / PAN NO.AATPP0804A RESPONDENT / ITA NO.1170/PN/2009 $% /BLOCK PERIOD 1997-98 TO 2003-04 ACIT, CIRCLE-1, NASHIK . / APPELLANT VS. M/S. NASHIK DIOCESAN COUNCIL, AJINKYA, BEHIND HDFC OFFICE, SHARANPUR ROAD, NASHIK . / PAN NO. AAATN2890B RESPONDENT / APPELLANT BY : SMT. DEEPA KHARE / DEPARTMENT BY : SMT. M.S. VERMA & SHRI RAJESH DAMOR SINGH & / ORDER PER R.K. PANDA, AM : ITA NO.803/PN/2010 FILED BY THE REVENUE AND ITA NO.784/PN/2010 FILED BY THE ASSESSEE ARE CROSS APPEALS A ND ARE DIRECTED AGAINST THE ORDER DATED 26-11-2009 OF THE CIT (A)-II, NASHIK RELATING TO BLOCK PERIOD 1997-98 TO 2003-04. ITA NO.324/PN/2010 FILED BY THE REVENUE IS DIRECTED AGAINST TH E ORDER DATED 26-11-2009 OF THE CIT(A)-II, NASHIK RELATING TO THE / DATE OF HEARING : 20.04.2015 ! / DATE OF PRONOUNCEMENT:15.07.2015 3 BLOCK PERIOD 1997-98 TO 2003-04. ITA NOS. 1170/PN/2009 AND ITA NO.1196/PN/2009 FILED BY THE REVENUE ARE DIRECTED AG AINST THE SEPARATE ORDERS DATED 20-07-2009 OF THE CIT(A)-I, NASHIK RELATING TO BLOCK PERIOD 1997-98 TO 2003-04. FOR THE SA KE OF CONVENIENCE ALL THESE APPEALS WERE HEARD TOGETHER AND A RE BEING DISPOSED OF BY THIS COMMON ORDER. ITA NO.324/PN/2010 (SHRI AVINASH GURUPAD BALKUNDI) : 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS AN INDIVIDUAL. A SEARCH ACTION U/S.132(1) OF THE I.T. ACT, 1961 W AS CONDUCTED IN THE CASE OF SHRI BALASAHEB BARKU KOLHE/ SH RI SAMARTH DEVELOPERS PVT. LTD., NASHIK ON 25-03-2003 DURING WHICH CERTAIN DOCUMENTS WERE FOUND AND SEIZED. IN BUNDLE NO.32 PAGE 18 OF THE SEIZED DOCUMENT CONTAIN A CHART SH OWING THE DATA IN RESPECT OF EXPENSES RELATED TO THE PURCHAS E OF A LAND JOINTLY BY A GROUP OF PEOPLE OF LAND DEVELOPERS OF NASHIK. THE CHART INDICATES THE EXPENSES RELATED TO THE PURCHASE O F LAND KNOWN AS POLICE COMMISSIONER LAND AT SY.NO.649 PART, 651 PA RT, 652 A & B PART ADMEASURING 26000 SQ.MTRS. AND SY.NO.720/A/3/1/1 KNOWN AS SHARANPUR MALA LAND ADMEASURING 28000 SQ.MTRS. AS PER THE SAID SEIZED DOCUM ENT THE ASSESSEE HAS RECEIVED RS.91 LAKHS AS ON-MONEY ON A CCOUNT OF SALE OF LAND KNOWN AS SHARANPUR MALA PROPERTY AND POLIC E COMMISSIONER LAND PROPERTY. THE AO HAVING JURISDICTION OV ER SHRI BALASAHEB BARKU KOLHE INTIMATED THE AO HAVING JURISDICTION OVER THE ASSESSEE. ACCORDINGLY THE AO ISSUE D NOTICE U/S.158BD TO THE ASSESSEE ON 20-04-2005. IN RESPONSE TO THE SAID NOTICE THE ASSESSEE INITIALLY DID NOT FILE ANY RETURN OF INCOME. SUBSEQUENTLY, NOTICE U/S.142(1) WAS ISSUED AND THE 4 ASSESSEE FILED THE RETURN IN FORM NO.2B ON 13-04-2007 DE CLARING UNDISCLOSED INCOME OF NIL. THE AO CONFRONTED THE SAME TO THE ASSESSEE WHO DENIED TO HAVE RECEIVED ANY SUCH AMOUNT. 3. HOWEVER, THE AO WAS NOT SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSEE AND MADE ADDITION OF RS.91 LAKHS T O THE TOTAL INCOME OF THE ASSESSEE ON THE GROUND THAT : I) THERE IS A CATEGORIC AND CANDID ADMITTANCE BY SH RI B. B. KOLHE IN HIS STATEMENT U/S 132(4) OF THE I.T. ACT 1961 DATED 29.03.2003 IN RESPECT OF THE DEAL, THE LAYOUT OF CHA RT CONTRIBUTION, THE PERSONS INVOLVED, ETC. II) SHRI B. B. KOLHE IS VERY MUCH PART OF THE DEAL A S IN THE CHARITY COMMISSIONER ORDER THERE IS MENTION OF HIM BEING A BID DER ALONGWITH ALL OTHER PERSONS INVOLVED AS PER CHART, WHO ARE ALSO CO- BIDDERS. III) A PERUSAL OF THE SEIZED DOCUMENT AND COMPARISO N WITH THE FINAL CONVEYANCE DEED DATED 13.03.2001 INDICATED TH AT THE TRANSACTIONS RECORDED RELATING TO STAMP VALUE, REGISTRA TION CHARGES ALMOST TALLY WITH THE CONTENTS OF THE SEIZED DOCUMENT. HENCE ALL OTHER ENTRIES MADE ON THE SAID SEIZED DOCUMENT WERE TO BE TREATED AS CORRECT. IV) THE INITIAL BIDDERS (EXCEPT SHRI B. B. KOLHE) AR E PART OF THE FINAL SALE DEED IN SOME WAY OR THE OTHER I.E. AS PER P URCHASERS IN THEIR OWN NAMES, IN THE NAMES OF THEIR FAMILY MEMBERS, IN THE NAME OF THEIR FAMILY CONCERNS / COMPANIES, ETC. V) THE SEIZED DOCUMENT IS RELATED TO THE LAND DEALING IN RESPECT OF SHARANPUR MALA AND POLICE COMMISSIONER LAND, WHICH ARE OWNED BY NASHIK DIOCESAN COUNCIL OF WHICH THE ASSESSEE IS THE CH AIRMAN AND HE HAS SIGNED THE FINAL CONVEYANCE DEED OF THOSE P ROPERTIES. 4. BEFORE CIT(A) IT WAS SUBMITTED THAT THE AO HAS HEAVILY RELIED ON THE SEIZED DOCUMENT WITHOUT MAKING ANY ENQUIRIE S OR BRINGING ANY CORROBORATIVE EVIDENCE ON RECORD. IT WAS S UBMITTED THAT SHRI BALASAHEB BARKU KOLHE HAD RETRACTED HIS STAT EMENT BY FILING AN AFFIDAVIT ON 21-08-2003 WHEREIN HE HAD STATED T HAT THE STATEMENT GIVEN BY HIM ON OATH REGARDING THE TRANS ACTION WAS NOT CORRECT. IT WAS SUBMITTED THAT SHRI BALASAHEB BARKU KOLHE WAS EXAMINED, RE-EXAMINED AND CROSS EXAMINED IN A 5 CONNECTED CASE AND NO EVIDENCE WAS GATHERED FROM HIM T O PROVE THAT THE CONTENTS OF THE SEIZED DOCUMENT WERE CORRECT AND TRUE. THE A.O. MADE AN ATTEMPT IN THE ASSESSMENT ORDER TO SA Y THAT THE SEIZED DOCUMENT REPRESENTS THE CORRECT POSITION BY COMPARING CERTAIN ITEMS OF EXPENDITURE LIKE STAMP DUTY PA ID AND OTHER SUNDRY EXPENSES. IT WAS SUBMITTED THAT HE WAS N O WAY CONNECTED WITH THE SAID SEIZED DOCUMENT AND MERE TALLYIN G OF CERTAIN ITEMS OF EXPENDITURE MAY BE A COINCIDENCE. IT WA S ARGUED THAT THERE IS NO DIRECT EVIDENCE ON RECORD TO P ROVE THAT THE TRANSACTIONS MENTIONED IN THE SAID SEIZED DOCUMENTS WERE REPRESENTING THE TRUE PICTURE. THERE IS NO NEXUS BETWEE N THE SEIZED DOCUMENT AND ACTUAL TRANSACTIONS AS ASSUMED BY THE A.O. THEREFORE, IN ABSENCE OF ANY CORROBORATIVE EVIDENCE T HE SAID SEIZED DOCUMENT HAS TO BE TREATED AS A DUMB DOCUMENT . IT WAS ARGUED THAT NOTHING WAS SHOWN BY THE A.O. THAT THERE WAS OTHER MATERIAL CO-RELATED WITH THE SEIZED DOCUMENT. 5. SO FAR AS THE PRESUMPTION U/S.132(4) IS CONCERNED IT WA S ARGUED THAT THE SAME IS APPLICABLE ONLY AGAINST A PERSON FROM WHOSE POSSESSION THE BOOKS OF ACCOUNT OR OTHER DOCUME NTS WERE FOUND AND NOT AGAINST ANY OTHER PERSON. VARIOUS DECISION S WERE ALSO BROUGHT TO THE NOTICE OF THE CIT(A). IT WAS FURTHER SUBMITTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS OF SHR I NEMICHAND L. PODDAR, ONE OF THE MEMBERS OF THE SYNDICATE, THE AO ALLOWED CROSS EXAMINATION OF SHRI BALASAHEB BARKU KOLHE ON 23-04-2007 AND AS PER THE CROSS EXAMINATION IT WAS STA TED BY SRI KOLHE THAT THE SEIZED DOCUMENT WAS NOT WRITTEN BY H IM AND WAS HANDED OVER TO HIM BY SHRI NIRMALKAR. IT WAS FURTHER CLARIFIED BY HIM THAT THE AMOUNTS WRITTEN WERE NOT IN HIS H AND 6 WRITING AND WERE NOT THERE WHEN THE PAPER WAS ORIGINALL Y RECEIVED BY HIM FROM SHRI NIRMALKAR. THE AO REJECTED FINDING S ON THE CROSS EXAMINATION AND DID NOT EVEN RE EXAMINE SH RI KOLHE TO ESTABLISH THE POINT OF VIEW. THE ASSESSEE FURTHER SUBMITTED THAT DESPITE HIS REQUEST TO THE AO FOR CROSS EXAMINATION OF SHRI KOLHE BY LETTER DATED 20-04-2007 THE AO TELEPHONICALLY CONTACTED HIM ON 23-04-2007 WHEN HE WAS OUT OF STATION AND COULD NOT AVAIL THE OPPORTUNITY OF CROSS EXA MINATION. THE SHORT NOTICE GIVEN BY THE AO FOR SUCH CROSS EXAMINA TION WAS CHALLENGED. RELYING ON VARIOUS DECISIONS IT WAS ARGUED THA T THERE IS NO JUSTIFICATION FOR THE ADDITION OF RS.91 LAKHS IN T HE HANDS OF THE ASSESSEE. 6. BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE T HE LD.CIT(A) CALLED FOR A REMAND REPORT FROM THE AO WHO REITER ATED THE FINDINGS GIVEN EARLIER IN THE ASSESSMENT ORDER. AFTER CONSIDERING THE SAME AND FOLLOWING HIS ORDER IN THE CASE OF M/S. THAKKAR DEVELOPERS LTD. WHERE THE CIT(A) HAS ALREADY DEC IDED THE ISSUE STATING THAT NO ADDITION CAN BE BASED ON THE SAID SEIZED DOCUMENT HE DELETED THE ADDITION MADE BY THE AO. 7. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVENUE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN DELETING THE ADDITION OF RS. 91,00,0 00/- AS UNDISCLOSED INCOME ON ACCOUNT OF UNRECORDED RECEIPTS F OR THE BLOCK PERIOD. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED IN NOT APPRECIATING THE FACT THAT T HE A.O. HAS BROUGHT ON RECORD SUFFICIENT MATERIAL /EVIDENCE TO C ORROBORATIVE ALLEGATION REGARDING PAYMENT / RECEIPT OF ON-MONEY AND ALSO TO SHOW THAT THE AFFIDAVIT FILED BY SHRI B. B. KOLHE RE TRACTING THE STATEMENT GIVEN ON 20.03.2003 WAS ONLY AN AFTER-THOUG HT AND SELF- SERVING. 7 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED IN NOT APPRECIATING THE FACT THAT I F SECTION 132(4A) IS INTERPRETED TO MEAN THAT THE PRESUMPTION THEREIN C AN BE DRAWN ONLY AGAINST PERSON FROM WHOM BOOKS AND OTHER DOCUMENT S ARE SEIZED AND NOT AGAINST ANY THIRD PERSON, THE RESULT WOU LD BE ANOMALOUS. SUCH AN INTERPRETATION WOULD CREATE A SITU ATION WHERE 'ONE FACT' WOULD BE TAKEN AS 'TRUE' IN CASE OF ONE PE RSON WHILE THE 'SAME FACT' WOULD BE TAKEN AS 'FALSE' IN CASE OF OTHE R PERSON MENTIONED IN THE SAME DOCUMENT. SUCH AN INTERPRETATI ON WOULD NOT ONLY BE BAD IN LAW BUT ALSO BAD ON THE COMMON PRINCI PLE OF LOGIC. 4. ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) HAS ERRED IN NOT APPRECIATING THE FACT THAT A S PER THE PROVISION OF SEC. 292 C, INTRODUCED BY FINANCE ACT 2 007 W.E.F. 01/10/75, PRESUMPTION CAN BE MADE IN ANY PROCEEDINGS UNDER THE ACT. 5. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED IN NOT APPRECIATING THE FACT THAT T HE A.O. HAS CLEARLY ANALYZED THE CONTENTS OF THE DOCUMENT TO ESTA BLISH THE CREDIBILITY OF THE SAME AS A PIECE OF EVIDENCE AND TH US THE PRINCIPLE OF EVIDENCE ACT THAT AN EVIDENCE SHOULD HAVE DIRECT NEXUS WITH THE PROCEEDINGS IN ISSUE IS AUTOMATICALLY OBSERVED. 6. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME OF HEARING. 8. THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY CHALLENGE D THE ORDER OF THE CIT(A). SHE SUBMITTED THAT THE AO IN THE ASSESSMENT ORDER HAS ANALYSED THE CONTENTS OF THE SE IZED DOCUMENTS WHICH ITSELF CORROBORATES THE ALLEGATIONS REGARD ING PAYMENT/RECEIPT OF ON-MONEY. THUS THE AO HAS BROUGHT ON RECORD SUFFICIENT MATERIAL/EVIDENCE TO CORROBORATE ALLEGATION S REGARDING PAYMENT/RECEIPT OF ON-MONEY. THE AFFIDAVIT GIVEN B Y SHRI BALASAHEB BARKU KOLHE RETRACTING THE STATEMENT GIVE N ON 20-03-2003 WAS ONLY AN AFTER-THOUGHT AND SELF SERVING W HICH WAS MADE AFTER A GAP OF 5 MONTHS OF THE SEARCH. SHE ARG UED THAT THE EXAMINATION AND CROSS EXAMINATION AND RE-EXAMINATION OF SHRI BALASAHEB BARKU KOLHE ON ACCOUNT OF RETRACTION BY FILING AN AFFIDAVIT IS NOT RELEVANT AS THE CONTENTS OF THE SEIZED DOCUMENT WAS CORRELATED WITH THE ACTUAL TRANSACTION AS PER THE FINAL CONVEYANCE DEED. THE SEIZED DOCUMENT AND THE ACTU AL 8 TRANSACTION WAS THOROUGHLY DISCUSSED BY THE AO WHO ESTABLISHED THAT THE CHART CONTAINS CLEAR-CUT EVIDENCE WHICH IS VERIFIABLE AND CORRELATABLE AND THEREFORE CANNOT BE TREAT ED AS A DUMB DOCUMENT. SHE SUBMITTED THAT THERE WAS A CATEGO RIC AND CANDID ADMITTANCE BY SHRI BALASAHEB BARKU KOLHE IN HIS STATEMENTU/S 132(4) OF THE I.T. ACT DATED 29.03.2003 IN R ESPECT OF THE DEAL, THE MANNER OF CONTRIBUTION, THE PERSONS INVOLV ED, ETC. SHRI BALASAHEB BARKU KOLHE WAS VERY MUCH PART O F THE DEAL AS IN THE CHARITY COMMISSIONER ORDER THERE IS MENTION OF H IM BEING A BIDDER ALONG WITH ALL OTHER PERSONS INVOLVED AS PER THE CHART. THE FIGURES MENTIONED IN THE SEIZED DOCUMENT SUCH AS STAMP VALUE, REGISTRATION CHARGES ETC. ALMOST TALLY WITH T HE CONTENTS OF THE SEIZED DOCUMENT. THE SEIZED DOCUMENT IS RELATED TO THE LAND DEALING IN RESPECT OF SHARANPUR MALA AND POLIC E COMMISSIONER LAND WHICH ARE OWNED BY NASHIK DIOCESAN COUNCIL OF WHICH THE ASSESSEE IS THE CHAIRMAN AND HE HAS SIGNED THE FINAL CONVEYANCE DEED OF THOSE PROPERTIES. SHE SUBMITTED THAT AS PER THE PROVISIONS OF SECTION 132(4A) TH E CONTENTS OF BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAY B E PRESUMED TO BE TRUE. NOWHERE IT IS MENTIONED THAT THE CONTENTS OF SUCH BOOKS OF ACCOUNT AND OTHER DOCUMENTS ARE TRUE . IF IT IS SO, THEN THE INFERENCE CAN BE DRAWN ONLY AGAINST THE PE RSON FROM WHOM BOOKS AND OTHER DOCUMENTS ARE SEIZED AND NO T AGAINST ANY THIRD PERSON. IT IS A PRESUMPTION THAT WOULD HOLD GOOD EVEN IN THE CASES OF OTHER PERSONS WHO ARE CONCE RNED WITH THE ENTRIES IN THOSE BOOKS OR DOCUMENTS. FURTHER, IT IS CLEARLY WRITTEN ON THE SEIZED PAPERS AS BALKUNDI WHICH HAS BEE N DECODED BY SHRI BALASAHEB BARKU KOLHE AS AVINASH GURUP AD BALKUNDI AND ALSO IT WAS WRITTEN ON THE PAPER ITSELF THAT FIRST 9 AND SECOND INSTALMENTS INDICATE PAYMENTS ACTUALLY MADE. THEREFORE, THERE IS NO REASON WHY THE CONTENTS OF THOSE PAPERS SHOULD NOT BE PRESUMED TO BE TRUE AGAINST SHRI AVINASH GURUPAD BALKUNDI. SHE ACCORDINGLY SUBMITTED THAT THE OR DER OF THE CIT(A) BE REVERSED AND THAT OF THE AO BE RESTORED. 9. THE LD. COUNSEL FOR THE ASSESSEE ON THE OTHER HAND HEAVILY RELIED ON THE ORDER OF THE CIT(A). SHE SUBMITTED THAT UNDER IDENTICAL FACTS AND CIRCUMSTANCES THE TRIBUNAL IN TH E CASE OF ACIT VS. THAKKAR DEVELOPERS LTD. VIDE ITA NO.581/PN/20 08 ORDER DATED 26-07-2010 HAS HELD THAT THE ADDITION CANN OT BE MADE ON THE BASIS OF DOCUMENT FOUND AND SEIZED FROM SHRI BALASAHEB BARKU KOLHE WHO IS A THIRD PARTY. IT HAS BE EN FURTHER HELD THAT EVEN IF IT IS PRESUMED THAT THE CONTENT S OF THE SEIZED DOCUMENTS ARE CORRECT SUCH PRESUMPTION U/S.132(4 A) OF THE ACT IS NOT CONCLUSIVE AND REBUTTABLE ONE. SINCE THE ISSUE HAS ALREADY BEEN DECIDED BY THE TRIBUNAL IN THE CASE OF T HAKKAR DEVELOPERS LTD., (SUPRA) ON THE BASIS OF THE SAID SEIZED DOCUMENT, I.E. PAGE 18 OF BUNDLE 32 OF THE SEIZED DOCUMENT, THEREFORE, IN ABSENCE OF ANY CONTRARY MATERIAL AGAINST THE ORDER OF THE TRIBUNAL, THE SAME HAS TO BE FOLLOWED AND THE ORDE R OF THE CIT(A) HAS TO BE UPHELD. 10. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND TH E CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HA VE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. WE FIND T HE AO IN THE INSTANT CASE MADE AN ADDITION OF RS.91 LAKHS IN THE H ANDS OF THE ASSESSEE ON THE BASIS OF THE DOCUMENT BEING PAGE NO.18 OF BUNDLE 32 SEIZED FROM THE RESIDENCE OF SHRI BALASAHEB BAR KU 10 KOLHE DURING THE COURSE OF SEARCH ACTION U/S.132(1) ON 25- 03- 2003 WHICH CONTAINS RECEIPT OF RS.91 LAKHS BY THE ASSESS EE BEING ON-MONEY ON ACCOUNT OF SALE OF LAND KNOWN AS SHARA NPUR MALA PROPERTY AND POLICE COMMISSIONER LAND PROPERTY. WHILE DOING SO, THE AO RELIED ON THE CATEGORIC AND CANDID ADMITT ANCE BY SHRI BALASAHEB BARKU KOLHE IN HIS STATEMENT RECORDED U/S.132(4) ON 29-03-2003 IN RESPECT OF THE DEAL, THE LAYOUT OF CHART CONTRIBUTION, THE PERSONS INVOLVED, ETC. ACCORDING TO THE AO, THE FIGURES MENTIONED IN THE SEIZED DOCUMENT AND COMPARISON WITH THE FINAL CONVEYANCE DEED DATED 13-03-20 01 INDICATED THAT THE TRANSACTIONS RECORDED RELATING TO STA MP VALUE, REGISTRATION CHARGES ETC. ALMOST TALLY WITH THE CONTENTS OF THE SEIZED DOCUMENTS. THEREFORE, THE AO WAS OF THE OPINION TH AT ALL OTHER ENTRIES MADE ON THE SEIZED DOCUMENT WERE TO BE TREATED AS CORRECT. WE FIND IN APPEAL THE LD.CIT(A) DELETED THE ADDITION MADE BY THE AO ON THE GROUND THAT THE AO HEAVILY RELIE D ON THE SEIZED DOCUMENT WITHOUT MAKING ANY ENQUIRIES OR BRINGING A NY CORROBORATIVE EVIDENCE ON RECORD. SHRI BALASAHEB BARKU KOLHE RECORDED HIS STATEMENT DATED 29-003-2003 BY FILING AN AFFI DAVIT ON 21-08-2003. SHRI BALASAHEB BARKU KOLHE WAS EXAMINED AND CROSS EXAMINED IN A CONNECTED CASE AND NO EVIDENCE WAS GATHERED FROM HIM TO PROVE THAT THE CONTENTS OF THE SE IZED DOCUMENT WERE CORRECT AND TRUE. THERE IS NO DIRECT EV IDENCE ON RECORD TO PROVE THAT THE TRANSACTIONS MENTIONED IN THE SAID SEIZED DOCUMENTS WERE REPRESENTING THE TRUE PICTURE. F URTHER, THE AO WAS WRONG IN APPLYING THE PROVISIONS OF SECTION 1 32(4A) TO THE ASSESSEE IN THE PRESENT CASE WHO WAS NOT SEAR CHED U/S.132 NOR THE DOCUMENT WAS FOUND AND SEIZED FROM HIS POSSESSION. 11 11. IT IS THE CASE OF THE REVENUE THAT THE CIT(A) WITHOUT ANY JUSTIFIABLE REASON HAS DELETED THE ADDITION ALTHOUGH THE AO HAS ANALYSED THE CONTENTS OF THE SEIZED DOCUMENT. FURTHER , THE AFFIDAVIT FILED BY SHRI BALASAHEB BARKU KOLHE AFTER A GAP OF 5 MONTHS IS ONLY AFTER THOUGHT AND SELF-SERVING. THE FIGURE S MENTIONED IN THE SEIZED DOCUMENT AND THE FIGURES AS PER FINAL CONVEYANCE DEED ARE ALMOST SIMILAR AND THEREFORE THERE IS A CLOSE PROXIMITY BETWEEN THESE TWO AND THEREFORE THE SAME IS N OT A DUMB DOCUMENT. 12. WE FIND AN IDENTICAL ISSUE HAD COME UP BEFORE THE TRIBUNAL IN THE CASE OF THAKKAR DEVELOPERS LTD., (SUPRA) WH EREIN ON THE BASIS OF THE SAME SEIZED DOCUMENT, I.E. PAGE 18 OF BUNDLE NO.32 SEIZED FROM THE RESIDENCE OF MR. BALASAHEB BARKU KOLH E ADDITION WAS MADE WHICH WAS DELETED BY THE CIT(A). ON FURT HER APPEAL BY THE REVENUE THE TRIBUNAL DISMISSED THE APPEAL FILED BY THE REVENUE BY OBSERVING AS UNDER : 2. THE ASSESSEE IS A PUBLIC LIMITED COMPANY ENGAGE D IN THE BUSINESS OF LAND DEVELOPMENT AND BUILDING CONSTRUCT ION. THERE WAS A SEARCH U/S.132(1) OF THE ACT IN THE CASE OF SHRI BA LASAHEB BARKU KOLHE AND HIS CONCERN SHRI SAMARTH DEVELOPERS PVT. LTD. NA SIK ON 25-3- 2003. DURING THE COURSE OF SEARCH ACTION, A DOCUMENT CONTAINING DATA RELATING TO PURCHASE OF A LAND JOINTLY BY A GRO UP OF PEOPLE OF NASIK WAS FOUND. THIS DOCUMENT WAS SEIZED AS PAGE NO. 18 OF BUNDLE NO. 32 FROM THE SAID PREMISES ON 25-3-2003. THE SAID SEIZED DOCUMENT CONTAINS BREAK UP OF EXPENDITURE IN RESPECT OF THE PROPERTIES SHARANPUR MALA LAND BEARING S. NO. 720/A/ 3/1/1 AND FINAL PLOT NO. 476C ADMEASURING 28000 SQ. MTRS AND OTH ER PROPERTY KNOWN AS POLICE COMMISISONERATE LAND, S. NO. 649 PART, 651 PART, 652A AND B PART ADMEASURING 26000 SQ. MTRS. A STATEMENT WAS RECORDED U/S.131 OF THE ACT FROM SHRI B.B. KOLHE ABO UT THE TRANSACTIONS NARRATED IN THE AFORESAID SEIZED DOCUMENT. BASED ON THE SAID STATEMENT RECORDED FROM SHRI KOLHE, THE INVE STIGATION OFFICER HAD DECIPHERED THAT CERTAIN NAMES WERE WRITT EN IN. A CODE AND IT INDICATED THE EXPENDITURE/INVESTMENT IN THE L AND BY VARIOUS PEOPLE, INCLUDING THE ASSESSEE. AS PER THE SAID SEIZED DO CUMENT, THE INVESTMENT OF THE ASSESSEE WAS ARRIVED AT RS. 30,42,160/- . THE AO INITIATED PROCEEDINGS U/S 158BD OF THE ACT, AS HE HELD THAT SUCH INVESTMENT WAS OUT OF UNDISCLOSED INCOME OF THE ASSESSEE BY ISSUE OF A NOTICE ON 6/4/2005. THE ASSESSEE FILED A BLOCK RET URN ON 20-5- 2005 DECLARING TOTAL UNDISCLOSED INCOME AT RS. NIL. H OWEVER, THE 12 A.O COMPLETED THE ASSESSMENT ADDING THE AMOUNT OF RS.30, 42,160/- AS UNDISCLOSED INCOME IN THE BLOCK ASSESSMENT. IN APPEAL, RELIEF WAS GRANTED TO THE ASSESSEE AFTER CONSIDERING THE SUBMISSIONS M ADE ON BEHALF OF THE ASSESSEE. SAME HAS BEEN OPPOSED BEFORE US. 3. THE A.O HEAVILY RELIED ON THE SEIZED DOCUMENT MEN TIONED ABOVE WITHOUT MAKING ANY INQUIRIES OR BRINGING ANY CORROBO RATIVE EVIDENCE ON RECORD. THE EVIDENTIAL VALUE OF A DOCUM ENT FOUND AND SEIZED DURING THE COURSE OF SEARCH ACTION, PARTICULAR LY A LOOSE SHEET LIKE IN THE PRESENT CASE, WAS ELABORATELY DISCUSSED AFTER ANALYZING VARIOUS DECISIONS BY THE I.T.A.T. JABALPUR BENCH, JABA LPUR, IN THE CASE OF SATYAPAL WASSAN (295 ITR (AT) 352 AND OBSERVED AS UNDER. 'THE CRUX OF THESE DECISIONS IS THAT A DOCUMENT FOUND D URING THE COURSE OF SEARCH MUST BE A SPEAKING ONE AND WITHOUT AN Y SECOND INTERPRETATION, MUST REFLECT ALL THE DETAILS ABOUT TH E TRANSACTIONS OF THE ASSESSEE IN THE RELEVANT ASSESSMENT YEAR. ANY GAP IN TH E VARIOUS COMPONENTS AS MENTIONED IN SECTION 4 OF THE ACT MUST B E FILLED UP BY THE A.O THROUGH INVESTIGATIONS AND CORRELATIONS WIT H THE OTHER MATERIAL FOUND EITHER DURING THE COURSE OF THE SEARCH OR IN INVESTIGATION. AS A RESULT, WE HOLD THAT DOCUMENT NO. 7 IS A NON- SPEAKING DOCUMENT.' 4. THE ABOVE SAID SHRI KOLHE WAS EXAMINED, CROSS-EXAMI NED AND RE- EXAMINED AND NO EVIDENCE WAS GATHERED FROM HIM TO EST ABLISH THAT THE CONTENTS OF THE SEIZED DOCUMENTS WERE CORRECT AND TRUE. THUS, IN THE ABSENCE OF ANY CORROBORATIVE EVIDENCE IN THE PRESENT CASE, THE SAID SEIZED DOCUMENT HAS TO BE TREATED AS A DUMB D OCUMENT AS RIGHTLY OBSERVED BY THE CIT(A). THE A.O DISMISSED THE RETRACTION OF THE STATEMENT DATED 29-3-2003 BY FILING AN AFFIDAVIT AS AN AFTER THOUGHT AND SELF-SERVING. THE A.O CONCLUDED THAT THE FACTS MENTIONED IN THE SEIZED DOCUMENTS CLEARLY INDICATED THAT THE STATEMENT GIVEN ON 29-3-2003 WAS TRUE AND CORRECT. TH E A.O HAS NOT BROUGHT ON RECORD ANY MATERIAL OR CORROBORATIVE EVIDENCES TO COME TO THESE CONCLUSIONS. THE REASONS GIVEN BY THE A.O IN THIS REGARD ARE WITHOUT ANY BASIS AND SUPPORT. THE AFFIDAVI T FILED BY SHRI KOLHE REMAINED UNCONTROVERTED AND WHICH IS AGAINST T HE SETTLED LEGAL POSITION ON THE ISSUE THAT THE CONTENTS OF THE A FFIDAVIT BE REJECTED BY CONFRONTING THE SAME TO THE DEPONENT WHI CH IS MISSING IN THIS CASE. NOTHING WAS SHOWN BY THE A.O THAT THERE W AS ANY OTHER MATERIAL CO-RELATED TO THE SEIZED DOCUMENTS. THE A.O WAS NOT JUSTIFIED IN REJECTING THE CONTENTS OF THE AFFIDAVIT AS MENTIONED ABOVE. THE A.O FURTHER RELIED ON THE PRESUMPTIONS U/S 132(4A) OF THE ACT ON THE GROUND THAT THIS SECTION WAS VERY CLE AR THAT THE CONTENTS OF BOOK OF ACCOUNT AND OTHER DOCUMENTS MAY B E PRESUMED TO BE TRUE AND PRESUMPTION CAN BE DRAWN EVEN ON A TH IRD PERSON WHO WAS NOT SEARCHED US.132 OF THE ACT. THE A.O FURTH ER REJECTED THE SUBMISSIONS GIVEN BY THE ASSESSEE IN HIS PAPER BOOK DATE D 28- 12-2007 REITERATING THE SAME STAND. THE A.O HAS DRAWN INFERENCES AND PRESUPPOSES RELYING ON SURMISES ARID CONJECTURES. THE I.T.A.T. MUMBAI BENCH IN THEIR DECISION IN THE CASE OF STRAPTE X (INDIA) PVT. LTD. (84 ITD 320 (MUM), CLEARLY HELD THAT THE PRESUM PTION U/S 132(4A) IS APPLICABLE ONLY AGAINST THE PERSON FROM WHO SE POSSESSION THE BOOKS OF ACCOUNTS OR OTHER DOCUMENTARY WER E FOUND AND NOT AGAINST ANY OTHER PERSON. IT IS HELD THAT AS PER SECTION 132(4A) WHERE ANY BOOKS OF ACCOUNT OR DOCUMENT IS FOU ND IN THE POSSESSION AND CONTROL OF ANY PERSON IN THE COURSE OF THE SEARCH, IT 13 IS TO BE PRESUMED THAT THEY BELONG TO 'SUCH PERSON'. TH US, CLEARLY THE PRESUMPTION IS IN RESPECT OF THE PERSON FROM WHOM THEY WERE FOUND. THE USE OF THE WORD 'TO SUCH PERSON' IN THE SAI D SECTION MEANS THE PERSON FROM WHOM THE BOOKS OF ACCOUNT OR DOC UMENTS WERE FOUND. CLAUSE (II) OF SECTION 132 (4A) PROVIDES T HAT THE CONTENTS OF SUCH BOOKS OF ACCOUNT OR DOCUMENTS ARE TRUE . THIS PRESUMPTION CAN BE APPLIED ONLY AGAINST THE PERSON FRO M WHOSE POSSESSION THE BOOKS OF ACCOUNT OR THE DOCUMENT WERE FOU ND. THEREFORE, THE A.O WAS NOT JUSTIFIED IN APPLYING THE PROVISIONS OF SECTION 132(4A) TO THE ASSESSEE IN THE PRESENT CASE WHO WA S NOT SEARCHED U/S 132 OF THE ACT NOR THE DOCUMENT WAS FOUND AND SEIZED FROM THEIR POSSESSION. EVEN OTHERWISE, SUCH PRESUM PTION U/S. 132(4A) OF THE ACT IS NOT CONCLUSIVE AND REBUTTAB LE ONE. 5. THE ASSESSEE IN HIS DETAILED SUBMISSIONS TRIED TO EXPLAIN T HAT THE ACTUAL INVESTMENT FAR EXCEEDED THE INVESTMENT RIOTED ON THE SAID SEIZED DOCUMENTS. THE SUBMISSIONS OF THE ASSESSEE AS PER THE DISCUSSIONS BY THE CIT(A) REVEALS THAT THE ASSESSEE EXPLAIN ED THAT THE TOTAL INVESTMENT IN PURCHASE OF THE PROPERTIES AMO UNTED TO RS.4,23,61,927/- AS AGAINST THE TOTAL INVESTMENT AS PER THE SEIZED DOCUMENT AT RS. 2,86,16,038/-. THE A.O HAS NOT PROVED THAT THE WORKINGS OF THE ASSESSEE ARE INCORRECT AND WRONG. THE A. O TRIED TO RELY ON THE SEIZED DOCUMENT STATING IN HIS REPORT DATE D 29-1-2008 THAT IT PROVED BEYOND DOUBT THAT THE SAID PAPER DEPI CTED ACTUAL STATE OF AFFAIRS WITHOUT ANY SUPPORTING MATERIAL. THIS WAS NOT JUSTIFIED. THE A.O ALSO OBJECTED TO THE ADDITION OF U NDISCLOSED INCOME ON THE GROUND THAT THE TRANSACTION OF THE PRO PERTIES INVOLVED WAS THROUGH PUBLIC AUCTION BY GOVERNMENT AU THORITY AT THE PREVAILING MARKET RATES, AS ADOPTED BY STAMP AUTHO RITIES, THOUGH THERE WAS NO PHYSICAL POSSESSION OF THE PROPERTIES LEAVING NO SCOPE FOR ANY UNACCOUNTED PAYMENT. THUS EVEN IF IT IS ASSUMED THAT THE CONTENTS OF THE SEIZED DOCUMENT ARE CORRECT, UNLESS IT IS PROVED THAT THE TRANSACTION WAS ACTED UPON AND UNLESS THE AMOUNTS STALED IN THE SEIZED DOCUMENT WERE PAID, ONE CANNOT C OME TO THE CONCLUSION THAT THE TRANSACTIONS MENTIONED IN THE SEIZE D DOCUMENT ARE CORRECT. IN THIS REGARD, RELIANCE WAS PLACED ON T HE DECISION OF HON'BLE KERALA HIGH COURT IN THE CASE OF K.C. AGNES ( 262 ITR 354). IF THE SEIZED DOCUMENT DURING THE COURSE OF A SEARCH I S OPEN TO MORE THAN ONE POSSIBILITY OF INTERPRETATION AND DOES N OT PROVE CONCLUSIVELY THAT ANY MONEY WAS PAID BY THE ASSESSEE, THE N NO ADDITION COULD BE WARRANTED. THE A.O FAILED TO BRIN G ON RECORD ANY MATERIAL OR EVIDENCE TO CORROBORATE ALLEGATION REGA RDING PAYMENT OF ON-MONEY IN THIS CASE. THEREFORE, THE CIT(A) RIGH TLY HELD THAT NO ADDITION COULD BE MADE ON THE BASIS OF THE SEIZED DOCU MENT SOLELY AS MATERIAL AVAILABLE WITH THE A.O. 6. THE A.O GAVE MORE IMPORTANCE TO THE ORIGINAL STAT EMENT GIVEN BY SHRI KOLHE ABOUT THE SAID SEIZED DOCUMENT AND IGNORIN G THE SUBSEQUENT RETRACTION BY HIM BY FILING THE AFFIDAVIT AS DISCUSSED ABOVE. IN THIS CONNECTION, THE CBDT HAS ISSUED INSTRUCTI ON P. NO. 286/2/2003/IT(INV) DATED 10-3 2003 STATING THAT A.O SHOULD RELY UPON THE EVIDENCE/MATERIAL GATHERED DURING THE COUR SE OF THE SEARCH OR SURVEY OPERATIONS OR THEREAFTER WHILE FRAMIN G THE RELEVANT ASSESSMENT ORDERS INSTEAD OF CONFESSIONAL STATEMENT S. IN THE INSTANT CASE, THE A.O HAS NOT BROUGHT ANY CORROBOR ATIVE EVIDENCE OR MATERIAL OR MADE ANY SUBSEQUENT ENQUIRIES TO PROVE THE CONTENTS OF THE SEIZED DOCUMENT AS CORRECT, INSTEA D, HE RELIED ON 14 THE STATEMENT OF SHRI KOLHE WHO IS A THIRD PARTY. IN VIEW OF THE ABOVE DISCUSSIONS, THE A.O WAS NOT JUSTIFIED BOTH ON FACT S AND LAW, IN MAKING AN ADDITION OF RS. 30,42,160/- AS UNDISCLOSED INCOME FROM THE BLOCK PERIOD RELYING ON THE DOCUMENT FOUND AND SEIZED FROM BALASAHEB BARKU KOLHE WHO IS A THIRD PARTY. THE ADDITION WAS RIGHTLY DELETED BY THE CIT(A). WE ACCORDINGLY UPHOL D THE ORDER OF THE CIT(A) ON THIS ISSUE. 7. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED. 13. SINCE THE ADDITION HAS BEEN MADE IN THE HANDS OF THE ASSESSEE BY THE AO BASED ON THE SEIZED DOCUMENT BEAR ING PAGE 18 OF BUNDLE NO.32 AND SINCE THE TRIBUNAL HAS UPHELD THE O RDER OF THE CIT(A) DELETING THE ADDITION MADE IN THE HANDS OF TH AKKAR DEVELOPERS LTD., (SUPRA) ON THE BASIS OF THE ENTRIES IN THE SAID SEIZED DOCUMENT, THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF THE TRIBUNAL IN THE CASE OF THAKKAR DEVELOPERS LTD., (SUP RA) AND IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT TO OUR NOTICE AGAINST THE ORDER OF THE TRIBUNAL, WE HOLD THAT ADDITION CA NNOT BE MADE IN THE HANDS OF THE ASSESSEE ON THE BASIS OF DO CUMENT SEIZED FROM SHRI BALASAHEB BARK KOLHE WHO IS A THIRD PARTY. THE ORDER OF THE CIT(A) IS ACCORDINGLY UPHELD AND THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. ITA NO.1170/PN/2009 (M/S. NASHIK DIOCESAN COUNCIL) : 14. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS A CHARITABLE TRUST. A SEARCH ACTION U/S.132(1) OF THE I.T. AC T, 1961 WAS CONDUCTED IN THE CASE OF SHRI BALASAHEB BARK U KOLHE AND HIS CONCERN SHRI SAMARTH DEVELOPERS PVT. LTD., NASHIK ON 25-03-2003. DURING THE COURSE OF SEARCH ACTION A DOCUM ENT CONTAINING THE PROPERTY TRANSACTION RELATING TO SHARANPU R MALA LAND BEARING S.NO.720/A/3/1/1 AND FINAL PLOT NO.476C ADMEASURING 28000 SQ.MTRS. AND OTHER PROPERTY KNOWN AS POLICE 15 COMMISSIONER LAND AT S.NO.649 PART, 651 PART, 652 A & B PART ADMEASURING 26000 SQ.MTRS. OWNED BY THE ASSESSEE TRUST WAS FOUND AND SEIZED FROM THE PREMISES OF SHRI B.B.KOLHE. AS PER THE STATEMENT OF SHRI KOLHE WHICH WAS RECORDED ON 29/03/200 3, PART A OF THE SEIZED DOCUMENT INDICATED THE EXPENSES ON ACCOUNT OF STAMP DUTY, PAYMENT TO TRUSTEES, ETC. WHICH WORKED-OU T TO RS.2,86,16,038/- IN RESPECT OF THE ABOVE PROPERTIES. PART B INDICATED THE PAYMENTS WHICH WERE SUPPOSED TO BE RECOR DED. PART C INDICATED THE PAYMENTS WHICH WERE SUPPOSED TO B E UNRECORDED. PART D INDICATED THE PAYMENTS MADE TILL DATE . PART E INDICATED THE INSTALMENT AMOUNTS AND THE OUTSTANDING AM OUNTS. IT WAS FURTHER STATED BY SHRI KOLHE THAT THE PARTIES INV OLVED IN THIS DEAL MENTIONED IN CODED NAMES WERE AS UNDER: NANA=NANA NIKUMBHA KOLHE=BALASAHEB KOLHE NLP= NEMICHAND L. PODDAR WANI=DILIP WANI TDL= THAKKAR DEV.LTD. BHUPENDRA=BHUPENDRA SHAH SHAH=RAJENDRA SHAH 15. HOWEVER, SHRI KOLHE RETRACTED HIS STATEMENT BY FILING AN AFFIDAVIT ON 21/08/2003. THE RELEVANT PORTION OF THE AFF IDAVIT AS EXTRACTED BY THE AO READS AS UNDER : 'IN THE STATEMENT (ON 29.03.2003) ONE CLAUSE REGARDIN G TRANSACTION OF THE PURCHASES OF LAND IN 'MALA' AND COMMISSIONER OFF ICE, BUT ACTUALLY I HAVE NOT PAID ANY AMOUNT AGAINST THE PURC HASES OF SAID TRANSACTION AND ALSO I WAS NOT INVOLVED IN THE SAID DEA L. THE LOOSE PAPER FOUND IN MY DURING THE COURSE OF 132 ACTION WA S RELATING TO THE SAID TRANSACTION WAS SHOWING DETAILS ABOUT THE PAYME NTS TO BE MADE, BUT SUBSEQUENTLY, IT WAS NOT POSSIBLE FOR ME TO MA KE THE PAYMENT. HENCE I WITHDRAWN MY NAME SAID TRANSACTION. THEREFORE THE STATEMENT GIVEN BY ME ON OATH REGARDING THIS TRAN SACTION WAS NOT CORRECT. THEREFORE I HEREBY RETRACT ON MY STATEM ENT RECORDED ON 29.03.2003 RELATING TO ABOVE TRANSACTION AT THE T IME OF RECORDING OF STATEMENT ON 29.03.2003. THE INFORMATION ABOUT SAI D TRANSACTION WAS NOT REMIND TO ME AND RECOLLECT. HENCE I MADE THE INCORRECT STATEMENT ABOUT THE SAID TRANSACTION.' 16 16. BEFORE THE AO THE ASSESSEE EXPLAINED THAT THE TRANS ACTIONS CONTAINED IN THE SAID SEIZED DOCUMENT WERE NOT CORRECT AND NO ASSESSMENT CAN BE MADE BASED ON THE SAID SEIZED DOC UMENT. THE DOCUMENT WAS SEIZED DURING THE COURSE OF THE SEARC H ACTION IN THE CASE OF SHRI B.B.KOLHE AND DOES NOT PERTAIN TO THEIR CASE. SHRI KOLHE RETRACTED HIS STATEMENT GIVEN ON 29/03/2003 HENCE NO ASSESSMENT CAN BE MADE BASED ON HIS STATEMENT/THE SEIZED DOCUMENT. NO PRESUMPTION U/S.132(4A) OF THE ACT CAN BE DRAWN IN THEIR CASE AS THE DOCUMENT WAS FOUND AND SEIZED FROM A THIRD PARTY. THE DOCUMENT FOUND AND SEIZED DOES N OT HAVE ANY EVIDENTIARY VALUE BECAUSE THIS WAS NOT WRITTEN BY T HEM AND NOT FOUND FROM THEIR POSSESSION. 17. HOWEVER, THE AO DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE AND MADE ADDITIONS ON THE BASIS OF THE NOTINGS IN THE SAID SEIZED DOCUMENTS AND WORKED OUT THE UNRECORDED S ALE PROCEEDED OF THE ABOVE MENTIONED LANDS SUPPOSED TO HAV E BEEN RECEIVED BY THE ASSESSEE AT RS.2,86,16,038/-. THE REASONS FOR REJECTING THE CONTENTION OF THE ASSESSEE AND MAKING THE ADDITION HAS BEEN DEALT WITH BY THE AO FROM PARA 5.6 ONWARDS OF THE ORDER WHICH HAS BEEN REPRODUCED BY THE LD.CIT(A) AND WH ICH READS AS UNDER : 5.1 THE A.O., HOWEVER, DID NOT ACCEPT THE CONTENTIONS OF THE ASSESSEE AND WENT AHEAD TO ACT BASED ON THE NOTINGS IN T HE SAID SEIZED DOCUMENT AND WORKED-OUT THE UNRECORDED SALE PR OCEEDS OF THE ABOVE MENTIONED LANDS SUPPOSED TO HAVE BEEN RECEIV ED BY THE ASSESSEE AT RS.2,86,16,038/- AND PASSED THE ASSESSMENT ORDER ACCORDINGLY FOR THE FOLLOWING REASONS: '5.6 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ASSESSEE W AS PROVIDED WITH THE SEIZED DOCUMENT PAGE 18 OF ANNEXUR E 32. BASED ON THE FINDINGS FROM THE SEIZED DOCUMENT AND THE STATE MENT OF MRB.B.KOLHE, THE ASSESSEE WAS ASKED TO EXPLAIN AS TO WHY THE AMOUNT OF RS.2,86,16,038/- SHOULD NOT BE TREATED AS UNDISCLOSE D INCOME OF THE ASSESSEE FOR THE BLOCK PERIOD. THE ASSESSEE'S SUBMISSION WH ICH IS DISCUSSED IN PARA 4.1, 4.2, AND 4.4 ABOVE IS NOT ONLY V ERY SHORT, 17 GENERAL AND VAGUE BUT IT ALSO DOES NOT DISPROVE THE TR ANSACTIONS CLEARLY REFLECTED ON THE SEIZED DOCUMENT PAGE 18. SO ALSO, THE FACT OF ADMITTANCE OF UNRECORDED PAYMENTS CLEARLY DISPOSED BY SHRI. B.B.KOLHE IN HIS STATEMENT RECORDED ON 29.03.2003 HA S NOT BEEN DISPROVED BY THE ASSESSEE. THE ASSESSEE HAS CONVENIENTLY AVO IDED TO REPLY ANYTHING ON THE CONTENTS OF SEIZED DOCUMENT WHI CH POINT OUT AN AMOUNT OF RS.2,86,16,038/- RECEIVED BY SHRI. BALK UNDI, THE THEN MANAGING TRUSTEE. IN VIEW OF THE ABOVE DISCUSSION, THE EXPLANATIONS GIVEN BY THE ASSESSEE/HIS AR ARE NOT FOUND ACCEPTABLE. HOWEVER, OTHER RELEVANT ASPECTS ARE ALSO BEING CONSIDERED AND GIVEN WEIGHTAGE B EFORE DECIDING THE ISSUE WHICH ARE DISCUSSED BELOW. 5.6 AS REGARDS THE ASSESSEE'S RELIANCE ON THE RETRACTIONS OF STATEMENT GIVEN BY MR.B.B.KOLHE IT IS OBSERVED THAT SHRI.KOLHE HAD RETRACTED FROM HIS STATEMENT DATED 29/03/2003 RELATING TO TRAN SACTION IN RESPECT OF THE ABOVE TWO LANDS I.E. MALA AND POLICE C OMMISSIONER LAND BY SUBMITTING AN AFFIDAVIT TO THE DEPARTMENT ON 21 ST AUGUST,2003. IN THE SAID AFFIDAVIT DATED 21/08/2003 S HRI.KOLHE HAS MENTIONED THAT ON ONE CLAUSE REGARDING TRANSACTION OF PURCHASE OF LAND IN 'MALA' AND COMMISSIONER OFFICE HE HAS NOT PAID ANY AMOUNT AGAINST THE PURCHASES IN RESPECT OF SAID TRANSACTION AND HE IS NOT INVOLVED IN THE SAID DEAL AS IT WAS NOT POSSIBLE FOR HI M TO MAKE THE PAYMENT AND THEREFORE HE WITHDREW HIS NAME FROM THE SAID TRANSACTION. ON THIS BASIS SHRI.KOLHE HAS STATED THAT ST ATEMENT GIVEN BY HIM EARLIER ON 29/08/2003 WAS NOT CORRECT AND HEN CE HE RETRACTED THE SAME. ON GOING THROUGH THE AFFIDAVIT O F RETRACTION FILED BY MR.B.B.KOHLE, FOLLOWING FACTS EMERGE AND QUESTIONS ARISE: I) IN THE STATEMENT REGARDING TRANSACTION RELATING TO MALA AND POLICE COMMISSIONER LAND, I FIND THAT THE FOLLOWI NG FACTS STATED BY MR.KOLHE ARE CORRECT AND UNDISPUTED: I) SHRI B.B.KOLHE HAD PROVIDED SPECIFIC IDENTIFICATI ON OF THE PERSON WHO HAD JOINED TOGETHER FOR THE DEAL AND THE CORRECTFUL NAME GIVEN BY HIM ARE AS FOLLOWS: NANA = NANA NIKUMBH (SHYAM [NANA] NIKUMBH) KOLHE= BALASAHEB BARKU KOLHE NLP = NEMICHAND L.PODDAR WANI = DILIP WANI [SHASHJIKANT PUNDILK WANI] TDL = THAKKAR DEVELOPERS LTD. BHUPENDRA = BHUPENDRA SHAH [BHUPENDRA SHANTILAL SHAH] SHAH = RAJENDRA RASIKLAL SHAH II) THE FIGURE GIVEN IN PART A WAS STATED BY MR.B.B.K OLHE TO BE STAMP VALUE, REGISTRATION VALUE WHICH IS CORRECT. NAME OF THE STAMP DUTY REGISTRATION CHARGES AS PER SEIZED PAGE 18 AS PER CONVEYANCE DEED DT. 13.03.2001 AS PER SEIZED PAGE 18 AS PER CONVEYANCE DEED DT. 13.03.2001 SHARANPUR MALA 1624380 1623980 20500 20341 POLICE COMMISSIONER LAND 1546680 1546340 20500 20426 18 THIS INDICATES THAT MR.KOLHE WAS FULLY AWARE OF ALL TH E DETAILS OF THE SEIZED PAPER 18 OF ANNEXURE 32. IN THIS PARTICULAR CA SE NAME OF SHRI. BALKUNDI (WHO WAS THE MAIN TRUSTEE) IT IS CLEARL Y WRITTEN ON THE SEIZED PAPER WHICH HAS BEEN DECODED BY MR.KOLHE A S 'TDL' MEANS THAKKAR DEVELOPERS LTD. ETC. HE ALSO EXPLAINED T HAT IT IS WRITTEN ON THE PAPER ITSELF THAT 1 ST AND 2 ND INSTALLMENT INDICATE PAYMENTS ALREADY MADE AND IT WAS ALSO CONFIRMED BY MR. KOLHE IN HIS STATEMENT DATED 29/03/2003 AS PAYMENTS ACTUALLY MAD E, SO THERE IS NO REASON WHY THE CONTENTS OF HIS STATEMENT WH ICH WAS GIVEN IN CLEAR AND CATEGORICAL TERMS SHOULD NOT BE TR EATED AS TRUE BECAUSE ACTUALLY THE ASSESSEE IS A PARTY TO THE SALE OF T HE AFORESAID LANDS OWNED BY IT. IF HIS REPLY AS TO WHAT THE CONTENT S OF PART A INDICATES IS TRUE WITHOUT DISPUTE THEN THERE CANNOT B E ANY REASON WHY HIS REPLY AS TO WHAT THE CONTENTS OF PART B/C/D/E INDICATES SHOULD BE REGARDED AS FALSE. MR.KOLHE LATER ON RETRACT ED FROM THAT PAN OF HIS STATEMENT WHICH WAS DETRIMENTAL TO HIM AND HIS OTHER COLLEAGUES. THIS CLEARLY INDICATES THAT THE RETRACTION IS ONLY AN AFTER THOUGHT AND WAS DONE AS A SELF SERVING DEVICE. II) THE FACT WHICH CANNOT BE IGNORED IS THAT AT THE END OF THE STATEMENT MR.KOLHE HAS STATED THAT THE STATEMENT IS TRU E AND CORRECT, WHICH MEANS IT MUST HAVE BEEN READ TO HIM BE FORE HE SIGNED IT. THE STATEMENT RECORDED ON 29/03/2003 WAS TE MPORARILY CONCLUDED ON 29/03/2003 AND WAS RESUMED ON 31/03/2003 . ON 31/03/2003 AGAIN HE AGAIN SIGNED THE STATEMENT ON 31/ 03/2003. THE CONTENTIONS OF SHRI. B.B.KOLHE CANNOT BE ACCEPTE D, SINCE STATEMENT U/S. 132(4) RECORDED DURING THE COURSE OF SEA RCH IS SUPPOSED TO BE TRUE AND CORRECT, UNLESS THE PERSON GIVIN G THE STATEMENT PROVES ITS INCORRECTNESS. HERE THE ASSESSEE HAS NO EVIDENCE TO PROVE THAT THE STATEMENT RECORDED DURING THE COURSE OF SEARCH WAS NOT CORRECT. ON THE CONTRARY DURING THE CO URSE OF RECORDING TO THE STATEMENT SHRI. KOLHE HAS IDENTIFIE D THE PROPERTIES INVOLVED, THE PERSONS INVOLVED IN THE TRANSACTIONS, THE IR ACTUAL PROPORTION OF SHARE IN THE TRANSACTION, THE ITEM WISE/ HEAD WISE TOTAL EXPENSES INCURRED, ITS SPECIFIC DISTRIBUTION AMONG ST PERSONS, THE PAYMENT MADE BY THE PERSONS INVOLVED IN TWO INSTAL LMENTS AND THE BALANCE OUTSTANDING TO BE RECOVERED. III) ALL THE ABOVE FACTS CLEARLY INDICATE THAT THE R EASON GIVEN BY MR.KOLHE FOR RETRACTION IS NOT ACCEPTABLE AND THE STA TEMENT GIVEN ON 29/03/2003 MUST BE REGARDED AS TRUE. RETRACTION IN THE FORM OF AFFIDAVIT WAS GIVEN AFTER 5 MONTHS OF THE STATEMENT AN D IT WAS ONLY AN AFTER THOUGHT AND SELF SERVING. ALL THE ABOVE FAC TS POINT THAT THERE IS NO REASON NOT TO REGARD THE STATEMENT OF MR.K OLHE AS TRUE. CONSIDERING ALL THE FACTS AND CIRCUMSTANCES OF THE CASE AS DISCUSSED ABOVE, THERE IS NO DOUBT THAT THE ORIGINAL STATEMENT OF MR.KOLHE GIVEN ON 29/03/2003 IS CORRECT AND ITS LATER RETRACTI ON IS ONLY AN AFTER THOUGHT AND SELF SERVING. ASSESSEE'S RELIANCE ON THE AFFIDAVIT FILED BY THIRD PARTY RETRACTING FROM HIS (THIRD PART Y'S) ORIGINAL STATEMENT IS IRRELEVANT, UNPROVED AND UNSUBSTANTIATED A ND HENCE THE SAME CANNOT BE ACCEPTED. THEREFORE THE ASSESSEE'S C ONTENTION STANDS REJECTED. 19 6.1 COMING TO THE TOTAL DENIAL OF THE ASSESSEE, AS DISCUSSE D ABOVE, THERE ARE AMPLE REASONS TO CONCLUDE THAT THE SEIZED CH ART REFLECTS THE POSITION OF EXPENSES/COST/CONTRIBUTION IN RESPECT OF THE TWO PARCELS OF LAND REFERRED TO ABOVE. THE PERIOD IS VERY MUCH WITHIN THE BLOCK PERIOD AS SEEN FROM THE DATE OF THE SALE DEE D I.E. 13.03.2001 WHICH IS ALSO WITHIN THE BLOCK PERIOD. THE RE IS THUS NO SCOPE FOR THE ASSESSEE TO DENY THE FACT OF RECEIPT OF UN DISCLOSED AMOUNT OF RS.2,86,16,038/-. HENCE THE ASSESSEE'S SUBMISSION DOES NOT CARRY ANY WEIGHTAGE. 6.2 SHRI AVINASH GURUPAD BALKINDI, AS PER BOTH THE FI NAL SALE DEED OF THE PROPERTIES UNDER CONSIDERATION IS THE CHAIRMAN OF NASHIK DIOCESAN COUNCIL AND ALSO HOLDS GPA FOR THE REMAINING 14 COMMITTEE MEMBERS. HENCE IT IS ABUNDANTLY CLEAR THAT 'ON MONEY' HAS BEEN PASSED FROM THE ABOVE PERSONS TO THE TRUST/MEMBE RS FOR THE DEALS. 6.3 THE SHARANPUR MALA PROPERTY WAS PURCHASED BY M/S.H ARIYALI AGRICULTURE PVT.LTD. & 25 OTHERS. THE LANDS ADMEASURIN G 28000 SQ.MT. WAS PURCHASED ON 13 TH OF MARCH, 2001 FORM NASHIK DIOCESAN COUNCIL. THE PURCHASE DEED WAS REGISTERED ON THE SAID D ATE UNDER REGISTRATION NO.5045/2001. 6.4 THE POLICE COMMISSIONER OFFICE LAND PROPERTY WAS P URCHASE BY SHRI PANKAJ PRABHAKAR MALPURE AND 19 OTHERS (WHICH INCLUDES THE PERSONS AND COMPANIES ETC MENTIONED IN PARA (I) AND (V I) ABOVE). THE LANDS ADMG. 26000 SQ.MT. WAS PURCHASED ON 13 TH OF MARCH 2001 FROM NASHIK DIOCESAN COUNCIL. THE PURCHASE DEED W AS REGISTERED ON THE SAID DATE UNDER REGISTRATION NO.5044 /2001. THE HARIYALI AGRICULTURAL PVT. LTD. AND THAKKAR DEVELOP ERS LIMITED ARE CONSENTING PARTIES TO THIS DEAL. THIS BEING A PROPERTY BELONGING TO A TRUST, PERMISSION OF THE CHARITY COMMISSIONER. MAHARASHTR A STATE, MUMBAI HAS BEEN OBTAINED ON 22.02.2001 UNDER SECTION 36(1)(A) OF THE BOMBAY PUBLIC TRUST ACT 1950. THE CHARITY COM MISSIONER IN THE ABOVE REFERRED ORDER HAS DISCUSSED THE TENDER PROC EEDINGS WHICH WERE INITIATED AND EXECUTED BEFORE THE TENDER M/S.THAKKAR DEVELOPERS LTD AND ITS NOMINEES WERE DECLARED ELIGIBLE TO PURCHASE THE LAND. HERE, IT IS PERTINENT TO NOTE THAT SHRI BA LASAHEB BARKU KOLHE WAS ONE OF THE BIDDER TO THIS PROPERTY. HENCE, THE STAND TAKEN BY THE ASSESSEE THAT THE ASSESSEE IS NOT CONNECTED WIT H SHRI KOLHE, EXCEPT RECEIPT AND REFUND AND TENDER DEPOSIT IS INCORRECT WHICH IS ALSO NOT BORNE OUT FROM THE FACTS COUPLED WIT H CIRCUMSTANTIAL EVIDENCE. THIS ESTABLISHES BEYOND DOUBT T HAT THE PERSONS MENTIONED IN THE SEIZED CHART WERE INVOLVED IN THIS DEAL RIGHT FROM THE BEGINNING. ONLY WHEN THE FINAL SALE DEED WAS DRAWN UP, THAKKAR DEVELOPERS LTD. THE WINNER OF THE BID HA S ACCOMMODATED VARIOUS OTHER NOMINEES WHO WITH THEIR SPECIFIC SHARES ARE THE PURCHASERS AS PER THE SALE DEED. 7.1 DURING BLOCK ASSESSMENT PROCEEDINGS, HOWEVER THE ASSE SSEE DID NOT CORRELATE ANY OF THE TRANSACTIONS WHICH ARE RECO RDED IN THE SEIZED DOCUMENT NO.18 WITH THE TRANSACTION REFLECTED IN THE LEDGER PRODUCED BEFORE ME. INSPITE OF GIVING AMPLE AND REASO NABLE OPPORTUNITIES THE ASSESSEE FAILED TO SUBSTANTIATE THAT TH E TRANSACTIONS RECORDED ON SEIZED DOCUMENT NO.18 OF ANNE XURE 32 ARE DUTY CONSIDERED IN THE BOOKS OF ACCOUNTS AND CONSEQ UENTLY DISCLOSED IN THE RETURNS OF INCOME FILED FOR THE RELEV ANT ASSESSMENT 20 YEARS OF THE BLOCK PERIOD ENDING ON 25/03/2003 I.E. FOR A.Y.1997- 98 TO 2003-04. 7.2 IN VIEW OF THE PROVISIONS OF SECTION 132(4A)(II) T HERE IS PRESUMPTION 'THAT, THE CONTENTS OF SUCH BOOKS OF ACCOUN TS AND OTHER DOCUMENTS ARE TRUE'. THE SAID PRESUMPTION IS VERY CLEAR THAT THE CONTENTS OF BOOKS OF ACCOUNT OR OTHER DOCUMENTS MA Y BE PRESUMED TO BE TRUE. IT IS A PRESUMPTION THAT WOULD HO LD GOOD EVEN IN THE CASES OF OTHER PERSONS WHO ARE CONCERNED WITH T HE ENTRIES IN THOSE BOOKS OR DOCUMENTS. OTHERWISE THE RESULT WOULD BE ANOMALOUS. IN THIS PARTICULAR CASE, THE NAME OF SHRI.B ALKUNDI, THE MAIN AND MANAGING TRUSTEE IS CLEARLY ON THE SEIZED DOC UMENT. IN THIS RESPECT IT IS TO BE NOTED THAT BOTH THE I.E. SHAR ANPUR MALA LAND AND POLICE COMMISSIONER OFFICE LAND ORIGINALLY BELONG ED TO NASHIK DIOCESAN TRUST WHICH IS A CHARITABLE TRUST AND BEING MA NAGED BY SHRI. BALKUNDI AND VARIOUS OTHER PERSONS AS TRUSTEES. THE TRANSACTIONS THOUGH TOOK PLACE BETWEEN THE VARIOUS PAR TIES WHICH ARE THE GROUPS OF LAND DEVELOPERS AND THE TRUST, HOWEV ER, PHYSICALLY AND FOR ALL THE PRACTICAL PURPOSES IT TOOK PLACE BETW EEN THE PRESENT ASSESSEE, ALONG WITH OTHERS AND SHRI. AVINASH GURUPAD BAL KUNDI THE POWER OF ATTORNEY HOLDER OF NASHIK DIOCESAN COUNCIL T RUST. REVENUE PROCEEDINGS ARE DECIDED BY PREPONDERANCE OF PROBABILITY AND NOT BY 'BEYOND REASONABLE DOUBT' RULE, HENCE THE EVIDENCE FOUND WITH THE THIRD PARTY ON WHICH THE NAME OF SAID SHRI.BALKUNDI, THE THEN MANAGING TRUSTEE IS SPECIFICALLY MENTIONED A ND ALSO SUPPORTED BY THE HAND WRITTEN TEXT AND THE STATEMENT OF MR.KOHLE THAT 1 ST AND 2 ND INSTALLMENT REPRESENT MONEY ACTUALLY PAID. IN THIS CASE THERE IS A SPECIFIC CONTEXT OF LAND DEAL RELATED TO THE PURCHASE OF MALA LAND AND POLICE COMMISSIONER LAND IN RESPECT O F WHICH SIZED PAPERS WERE FOUND AND PAYMENT OF 'ON MONEY' DET ECTED. IN THIS STATEMENT RECORDED, SHRI KOLHE ALSO CONFIRMED REC ORDED PAYMENTS AS WELL AS UNRECORDED PAYMENTS REFLECTED IN T HE PART D & C OF THE SEIZED DOCUMENT PAGE 18, DISCUSSED ABOVE. THE PERSONS BETWEEN WHOM THE TRANSACTIONS WERE TRANSACTED ARE IDEN TIFIED, THE LANDS IN QUESTION ARE TRACED IN THE ACCOUNTS OF THE CO MPANIES IN WHICH THE ASSESSEE IS PERSONALLY AND SUBSTANTIALLY INTERES TED, FURTHER THE PERIOD IN WHICH ARE TRANSACTIONS TOOK PLA CE FALLS IN THE BLOCK PERIOD OF 01.04.1996 TO 25.03.2003. EVIDENCE SEIZED DURING SEARCH HAS IN FACT WELL EXPOSED THE MODUS OPERANDI DEPL OYED BY THE ASSESSEE IN ACCEPTING UNDISCLOSED MONEY THROUGH UNDER HAND DEALING. THEREFORE, SEIZED DOCUMENT - PAGE 18 - DISCU SSED ABOVE IS VERY CRUCIAL DOCUMENT WHICH CANNOT BE TREATED AS 'DU MB DOCUMENT'. FOR THE REASONS DISCUSSED ABOVE, I HAVE NO H ESITATION IN HOLDING THAT THE ASSESSEE HAS RECEIVED AN AMOUNT OF RS.2,86,16,038/- FOR SALE OF LANDS BEARING SURVEY NO.6 49, 641, 642A AND 643B S.N0.720A/3/1/1 WHICH IS NOT FROM THE DISCLO SED SOURCES OF INCOME OF THE ASSESSEE. I THEREFORE TREAT THE AMOUNT OF RS.2,86,16,038/- AS T HE ASSESSEE'S INCOME FROM UNDISCLOSED SOURCES AND ASSESSED THE SAME U/S.158BD.' 18. BEFORE CIT(A) THE ASSESSEE MADE TWO FOLD ARGUMENTS, I.E. BOTH LEGALLY AND FACTUALLY. SO FAR AS THE LEGAL ISSUE IS CON CERNED, IT WAS SUBMITTED THAT THERE WAS NO SATISFACTION OF THE A O BEFORE 21 THE ISSUE OF NOTICE. RELYING ON VARIOUS DECISIONS IT WAS SUBMITTED THAT SINCE THE PROCEDURE U/S.158BD FOR ISSUANC E OF NOTICE WAS NOT FOLLOWED, THEREFORE, THE ORDER PASSED WOULD BE BAD IN LAW. THE ASSESSEE ALSO CHALLENGED THE JURISDICTION O F THE CASE ON THE GROUND THAT THE JURISDICTION U/S.158BD CAN BE ASSUMED ONLY WHEN THE INVESTIGATING OFFICER SENDS MATERI AL TO THE AO WHO HAS JURISDICTION OVER THE ASSESSEE AND HAND S OVER MATERIAL TO HIM. HOWEVER, IN THE INSTANT CASE, THERE IS NO COMMUNICATION FROM THE DEPARTMENT ABOUT THE TRANSFER OF JURISDICTION FROM WARD-1, NASHIK TO ACIT, CIRCLE-1. THEREFORE , THERE IS CLEAR VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. 19. SO FAR AS THE MERIT OF THE CASE IS CONCERNED, IT WAS A RGUED THAT IN THE SEIZED DOCUMENTS ONLY AN AMOUNT OF RS.91 LAK HS IS WRITTEN IN FRONT OF THE NAME OF THE TRUSTEE LATE SHRI ANIV ASH G. BALKUNDI AND NOT THE TOTAL AMOUNT OF RS.2,86,16,038/- IN WHO LE OF THE SEIZED PAPER. IT WAS SUBMITTED THAT IN THE CASE OF LATE SHRI ANIVASH G. BALKUNDI, INDIVIDUAL CASE, THE AMOUNT OF RS.91 LAKHS HAS BEEN ADDED IN THE ORDER PASSED U/S.158BD R.W .S. 143(3) BY THE DCIT, CENTRAL CIRCLE-3. IN OTHER CASES ALSO WHOSE NAMES APPEAR IN THE SEIZED PAPER THE ORDERS PASSED U/ S.158BD WERE MADE BY MAKING ADDITIONS OF AMOUNTS IN FRONT OF THEIR RESPECTIVE NAMES. RELYING ON VARIOUS DECISIONS IT WAS SUB MITTED THAT NO INCOME CAN BE ADDED ON ASSUMPTION OR PRESUMPT ION BASIS IN BLOCK ASSESSMENT YEAR. IT WAS ARGUED THAT THE LAND TRANSACTION COULD NOT BE COMPLETED WITH SHRI BALASAHEB B. KOLHE DUE TO HIS INABILITY TO COMPLY WITH THE TERMS AND CONDITIONS OF THE TENDER. THIS FACT WAS INFORMED TO THE 22 DEPARTMENT WHEN THE BLOCK ASSESSMENT PROCEEDINGS OF S HRI BALASAHEB B. KOLHE WAS IN PROGRESS. 20. IT WAS FURTHER ARGUED THAT THE AO HAS RELIED ON CHA RT FOUND AT PREMISES OF SHRI B.B. KOLHE FOR MAKING THE ADDITION O F RS.2,86,16,038/-. THE DEPARTMENT IS NOT HAVING ANY PROOF AGAINST THE ASSESSEE EXCEPT THE CHART. THUS, THE CHAR GE MADE AGAINST THE ASSESSEE ARE BASELESS & WITHOUT ANY CORROB ORATIVE EVIDENCE. 21. BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE THE LD.CIT(A) CALLED FOR A REMAND REPORT FROM THE AO. AFTER CONSIDERING THE SAME AND SUBMISSION OF THE ASSESSEE TO S UCH REMAND REPORT THE LD.CIT(A) DELETED THE ADDITION BY OBSER VING AS UNDER : 7. I HAVE CAREFULLY CONSIDERED THE DETAILED SUBMISSIONS OF THE APPELLANT, THE REASONS GIVEN BY THE A.O., BOTH IN THE ASSESSMENT ORDER AND THE REMAND REPORT. THE FIRST ISSUE RAISED BY THE APPELLANT IN THEIR WRITTEN SUBMISSIONS DATED 12/02/2008 IS REGARD ING NON- RECORDING OF SATISFACTION REQUIRED U/S.158BD OF THE AC T BEFORE ASSUMING JURISDICTION. THE APPELLANT ARGUED THAT AS PER THE PROVISIONS OF SECTION 158BD OF THE ACT, THE A.O. HAS T O BE SATISFIED THAT ANY UNDISCLOSED INCOME BELONGED TO SOME PERSON OTH ER THAN THE ONE WHO WAS COVERED U/S.132 OF THE ACT AND SUCH SAT ISFACTION MUST BE ARRIVED AT. IT WAS FURTHER POINTED-OUT THAT T HERE WAS NO SATISFACTION RECORDED BY THE A.O. AND IT WAS ONLY WRIT TEN IN THE ORDER SHEET TO ISSUE A NOTICE U/S.158BD OF THE ACT IN V IEW OF THE LETTER NO.NSK/ACIT/CC-3/INTIMATION/2005-2006/14 DATE D 23/03/2005 BY THE A.C.I.T., CENTRAL CIRCLE-1, NASHIK . IT WAS ARGUED THAT IN THE ABSENCE OF A PROPER SATISFACTION RECORDED, THE ASSUMPTION OF JURISDICTION U/S.158BD OF THE ACT WAS BAD IN LAW. IN SUPPORT OF THEIR ARGUMENTS, THE APPELLANT RELIED ON V ARIOUS JUDICIAL DECISIONS. ON THE OTHER HAND, THE A.O. IN HIS REPORT ST RONGLY OBJECTED TO THE SUBMISSIONS OF THE APPELLANT STATING T HAT THERE WAS A SATISFACTION RECORDED AFTER RECEIVING THE INTIMATIO N FROM THE A.C.I.T., CENTRAL CIRCLE-3, NASHIK, WHICH IS VERY MUC H AVAILABLE IN THE FILE AS PER THE ORDER SHEET ENTRY DATED 02/12/2005. T HEREFORE, IT WAS CONTENDED BY THE A.O. THAT THERE WAS A PROPER SATI SFACTION ARRIVED AT BY THE A.O. BEFORE INVOKING THE PROVISION S OF SECTION 158BD OF THE ACT AND ASSESSEE'S ARGUMENTS WERE DEVOID OF ANY MERITS. I HAVE SEEN THE ASSESSMENT RECORDS IN THE APPELLAN T'S CASE AND THERE IS A SATISFACTION RECORDED BY A SEPARATE ORDE R SHEET DATED 02/12/2005 WHICH IS REPRODUCED AS UNDER: 23 '02/12/2005 DURING SEARCH PROCEEDINGS U/S.132 CARRIED OUT IN THE P REMISES OF SHRI BALASAHEB BARKU KOLHE/SAMARTH DEVELOPERS PVT. LT D., NASHIK ON 25/03/2003, IT WAS REVEALED VIDE PAGE NO. 18 OF BUNDLE NO.32 SEIZED FROM THE ABOVE PREMISES THAT THE LAND AT S.NO.6 49 PART OF 642 A/B PART OWNED BY NASHIK DIOCESAN COUNCIL WAS SOLD DURING THE BLOCK PERIOD ENDING ON 25/02/2003. THE STATEMENT RECORDED OF SHRI BALASAHEB BARKU KOLHE U/S.132 DATED 29/03/2003 U /S.131 SHOWED THE EXPLANATION OF THE DETAILS AS PER SEIZED MAT ERIAL AND THE MODUS OPERANDI OF THE TRANSACTION CONTAINED THEREIN A ND THE UNRECORDED TRANSACTION REGARDING THE LAND MENTIONED ABOVE. THE ACIT, CENTRAL CIRCLE-1, NASHIK VIDE HIS INFORMATI ON DATED 29/03/2005 FORWARDED THIS DOCUMENTS/STATEMENTS AFTER COMPLETION OF PROCEEDINGS U/S.158BD TO ITO WARD 1(1), NASHIK. THIS REFERENCE U/S.158BD WAS THEN HANDED OVER TO ACIT, CIRCLE-1, NASHIK. AFTER GOING THROUGH THE MATERIALS FORWARDED B Y THE ACIT, CENTRAL CIRCLE-1, NASHIK, AND THE LETTER CONTAINING DETAILS, AS DISCUSSED ABOVE, I AM SATISFIED THAT THE PROCEEDINGS U/S. 158BD ARE TO BE TAKEN IN THE CASE OF NASHIK DIOCESAN COUNCIL. A CCORDINGLY NOTICE U/S.158BD IS BEING ISSUED SEPARATELY VIDE ORDER SH EET DATED 02/12/2005.' THUS, THERE IS A SATISFACTION RECORDED BY THE A.O. AVAI LABLE VERY MUCH ON THE FILE AND OBJECTIONS OF THE APPELLANT ARE NOT MAINTAINABLE HENCE REJECTED. 8. THE NEXT ISSUE RAISED BY THE APPELLANT IN SUBMISSIONS DATED 12/02/2008 IS WITH REGARD TO THE JURISDICTION O F THE A.O. IT WAS EXPLAINED THAT THE APPELLANT'S CASE WAS WITH I.T.O ., WARD-1(1), NASHIK, ORIGINALLY WHICH WAS TRANSFERRED TO A.C.I.T., CIRCLE-1, NASHIK. IT WAS ARGUED THAT PROPER PROCEDURE WAS NOT FOLLOWED U/S.127 OF THE ACT BEFORE TRANSFERRING THE JURISDICTION TO THE A .C.I.T., CIRCLE-1, NASHIK. IN SUPPORT OF THEIR CONTENTIONS, THE APPELLAN T RELIED ON VARIOUS JUDICIAL DECISIONS. BEFORE GOING INTO THE VARI OUS JUDICIAL DECISIONS, IT IS NECESSARY TO EXAMINE THE SUBMISSIONS MADE BY THE A.O. IN THIS REGARD. THE A.O. EXPLAINED THAT THERE W AS A CONCURRENT JURISDICTION OF THE A.OS WORKING IN RANGE-1, NASHIK, AND BOTH THE A.OS ARE UNDER THE SAME RANGE. IT WAS ALSO POINTED-OUT THAT THE BLOCK ASSESSMENT HAS TO BE COMPLETED BY AN OFFICER OF TH E RANK OF A.C.I.T./D.C.I.T./A.D.I.T./D.D.I.T. ONLY AS PER THE PROVISIONS OF SECTION 158BG OF THE ACT. IT WAS ALSO CLARIFIED BY TH E A.O. THAT THE PROVISIONS OF SECTION 127 DO NOT APPLY IN THE INSTANT CASE AS THERE IS NO CHANGE OF THE CITY, PLACE OR LOCALITY. THE SUBMI SSIONS MADE BY THE A.O. WITH REGARD TO THE ISSUE OF JURISDICTION RAI SED BY THE APPELLANT ARE VALID IN THE INSTANT CASE AS THE A.C.I.T ., CIRCLE-1, NASHIK, AND I.T.O., WARD-1(1), NASHIK, ARE UNDER RANG E-1, NASHIK, UNDER THE C.I.T.-1, NASHIK. FURTHER, THE OFFICERS ARE HAVING CONCURRENT JURISDICTION AND THE ASSESSMENT U/S.!58BD HAS T O BE COMPLETED BY AN OFFICER OF THE RANK OF A.C.LT./D.C.L.T./A.D.I.T./D.D.L.T. ONLY AS PER THE P ROVISIONS OF SECTION 158BG OF THE ACT. IN VIEW OF THIS LEGAL POSI TION, THE OBJECTIONS RAISED BY THE APPELLANT ARE NOT MAINTAINA BLE AND CANNOT BE ACCEPTED. HENCE, THERE IS NO NEED TO CONSIDER THE DECISIONS RELIED ON BY THE APPELLANT WHICH ARE DISTINGUISHABLE. 24 9. AS REGARDS THE MERITS OF THE CASE THE A.O. HAS HEAVI LY RELIED ON THE SEIZED DOCUMENT MENTIONED ABOVE WITHOU T MAKING ANY ENQUIRIES OR BRINGING ANY CORROBORATIVE EVIDENCE ON RECORD. THE EVIDENTIAL VALUE OF A DOCUMENT FOUND AND SEIZED DURING THE COURSE OF A SEARCH ACTION, PARTICULARLY A LOOSE SHEET L IKE IN THE PRESENT, WAS ELABORATELY DISCUSSED AFTER ANALYZING VARIO US DECISIONS BY THE HON'BLE I.T.A.T., JABALPUR BENCH, JA BALPUR , IN THE CASE OF SATYAPAL WASSAN [295 1TR (AT) 352] AND OBSERVE D AS UNDER: 'THE CRUX OF THESE DECISIONS IS THAT A DOCUMENT FOUND D URING THE COURSE OF SEARCH MUST BE A SPEAKING ONE AND WITHOUT ANY SECOND INTERPRETATION, MUST REFLECT ALL THE DETAILS ABOUT TH E TRANSACTIONS OF THE ASSESSEE IN THE RELEVANT ASSESSMENT YEAR. ANY GAP IN TH E VARIOUS COMPONENTS AS MENTIONED IN SECTION 4 OF THE INCOME-TAX ACT MUST BE FILLED UP BY THE ASSESSING OFFICER THROUGH INVESTIGAT IONS AND CORRELATIONS WITH THE OTHER MATERIAL FOUND EITHER DU RING THE COURSE OF THE SEARCH OR ON INVESTIGATION. AS A RESULT, WE HOLD THAT DOCUMENT NO.7 IS A NON-SPEAKING DOCUMENT.' SHRI KOLHE WAS EXAMINED AND CROSS-EXAMINED IN A CONNE CTED CASE AND NO EVIDENCE WAS GATHERED FROM HIM TO PROVE THAT THE CONTENTS OF THE SEIZED DOCUMENTS WERE CORRECT AND TRUE. THUS, I N THE ABSENCE OF ANY CORROBORATIVE EVIDENCE IN THE PRESENT CASE, TH E SAID SEIZED DOCUMENT HAS TO BE TREATED AS A DUMB DOCUMENT. 9.1 THE A.O. DISMISSED THE RETRACTION OF THE STATEMENT DATE D 29/03/2003 BY FILING AN AFFIDAVIT BY SHRI KOLHE AS A N AFTER-THOUGHT AND SELF-SERVING. THE A.O. CONCLUDED THAT THE FACTS ME NTIONED IN THE SEIZED DOCUMENTS CLEARLY INDICATED THAT THE STATEMENT GIVEN ON 29/03/2003 WAS TRUE AND CORRECT. THE A.O. HAS NOT BRO UGHT ANY MATERIAL OR CORROBORATIVE EVIDENCE TO COME TO THESE CONCLUSIONS. THE REASONS GIVEN BY THE A.O. IN THIS REGARD ARE WITHO UT ANY BASIS AND SUPPORT. THE AFFIDAVIT FILED BY SHRI KOLHE REMAI NED UN- CONTROVERTED AND COULD NOT HAVE BEEN IGNORED. THE A FFIDAVIT EVEN IF REGARDED AS SELF-SERVING DID NOT LOOSE ITS EVIDENTIARY V ALUE AS THERE WAS NO MATERIAL CONTRARY TO THE AVERMENTS MADE IN THE AFFIDAVIT. NOTHING WAS SHOWN BY THE A.O. THAT THERE WAS OTHER MAT ERIAL CORRELATED WITH THE SEIZED DOCUMENT. THE APPELLANT SU CCESSFULLY SHIFTED THE ONUS ONTO THE A.O. BY FILING THE AFFIDAVI T. ONCE THE ONUS SHIFTED TO THE A.O., HE WAS DUTY-BOUND TO COLLECT EVI DENCE SO AS TO BELIE THE CONTENTS OF THE AFFIDAVIT AND HOLD THAT TH E DOCUMENT AND THE TRANSACTIONS RECORDED THEREIN, IN FACT, BELONGED TO THE APPELLANT. THE A.O. HAD DRAWN INFERENCES, MADE PRESUMPTIONS, REL IED ON SURMISES AND THUS MADE UNSUSTAINABLE ADDITION. 9.2 THE APPELLANT TRUST INVITED PUBLIC BIDS ON ITS OWN FOR SALE OF THE SAID LANDS AS PER WHICH HIGHEST PRICE OFFE RED WAS RS.675/- PER SQ. MTRS. HOWEVER CHARITY COMMISSIONER, MAHARASHTRA STATE, RECALLED THE TENDERS FOR BOTH THESE LANDS. THE HIGHEST BID RECEIVED WAS OFFERING PRICE AT RS.711/- PE R SQ. MTR. THE BID WAS REVISED TO RS.725/- PER SQ. MTR. ON THE DAY OF OPENING THE TENDER. THE CHARITY COMMISSIONER, MAHARAS HTRA STATE PASSED SUITABLE ORDERS, U/S.36(I)(A) OF THE BPT AC T, 1950 GRANTING PERMISSION FOR THE SALE OF THE SAID TWO LANDS. THE VALUES OF THE LANDS DETERMINED IN THE ABOVE MANNER ARE NEAR TO THE VALUES ADOPTED BY STAMP AUTHORITIES THOUGH NO VACANT P OSSESSION OF THE SAID TWO LANDS WAS RECEIVED. THE STAMP VALUE FOR P. C.O. LAND WAS RS.1,93,34,500/- AS AGAINST PRICE FIXED AT RS.1,88,50, 000/-, WHEREAS THE STAMP VALUE FOR MALA LAND WAS RS.2,03,05,000/- AS AGAINST THE 25 PRICE FIXED AT RS.2,03,00,000/-. THEREFORE, THE CONT ENTION OF THE A.O. THAT THE SAID PAGE NO.18 AND STATEMENT OF SHRI BALASAH EB BARKU KOLHE DATED 29/03/2003 HAS EVIDENTIARY VALUE JUSTIFYI NG THE ADDITION OF RS.2,86,16,038/- IS NOT FOUND TO BE CORRE CT. THUS THE A.O'S ATTEMPT TO RECONCILE THE FIGURES AS PER THE SEIZE D DOCUMENT TO STATE THAT THE APPELLANT TRUST HAD RECEIVED THE PAYME NT THROUGH ITS TRUSTEE LATE SHRI BALKUNDI WAS ONLY BASED ON ASSUMPTION WITHOUT ANY VALID MATERIAL ON RECORD. 9.3 THE APPELLANT HAS ALSO OBJECTED TO THE ADDITION O F UNDISCLOSED INCOME ON THE GROUND THAT THE TRANSACTION OF THE PROPERTIES INVOLVED WAS THROUGH PUBLIC AUCTION BY GOV ERNMENT AUTHORITY AT THE PREVAILING MARKET RATES, AS ADOPTED BY STAMP AUTHORITIES, THOUGH THERE WAS NO PHYSICAL POSSESSION OF TH E PROPERTIES, LEAVING NO SCOPE FOR ANY UNACCOUNTED PAYM ENT. THUS EVEN IF IT IS ASSUMED THAT THE CONTENTS OF THE SEIZED DO CUMENT ARE CORRECT, UNLESS IT IS PROVED THAT THE TRANSACTION WAS AC TED UPON AND UNLESS THE AMOUNTS STATED IN THE SEIZED DOCUMENT WERE PA ID, ONE CANNOT COME TO THE CONCLUSION THAT THE TRANSACTIONS M ENTIONED IN THE SEIZED DOCUMENT ARE CORRECT - RELIANCE PLACED ON THE DECISION OF HON'BLE KERALA HIGH COURT IN THE CASE OF K.C.AGNES (2 62 1TR 354). IF A SEIZED DOCUMENT DURING THE COURSE OF A SEARCH IS OPEN TO MORE THAN ONE POSSIBILITY OF INTERPRETATION AND DOES NOT PR OVE CONCLUSIVELY THAT ANY MONEY WAS PAID BY THE APPELLANT , THEN NO ADDITION CAN BE MADE. THE A.O. FAILED TO BRING ON R ECORD ANY MATERIAL OR EVIDENCE TO CORROBORATE ALLEGATION REGARDING PAY MENT OF ON- MONEY IN THIS CASE. THEREFORE, NO ADDITION COULD BE M ADE ON THE BASIS OF THE SAID SEIZED DOCUMENT SOLELY AS MATERIAL AVAI LABLE WITH THE A.O. IS GROSSLY INADEQUATE. 9.4 DURING THE ASSESSMENT PROCEEDINGS IN A CONNECTED CAS E OF SHRI N.L.PODDAR [ONE OF THE MEMBERS OF THE SYNDICATE] , THE A.O. ALLOWED THE CROSS-EXAMINATION OF SHRI KOLHE ON 23/04 /2007. AS PER THE CROSS-EXAMINATION, IT WAS CLEARLY STATED BY SHRI K OLHE THAT THE SEIZED DOCUMENT WAS NOT WRITTEN BY HIM AND WAS HANDED OVER TO HIM BY ONE SHRI NIRMALKAR. IT IS FURTHER CLARIFIED B Y SHRI KOLHE THAT THE REMARKS WRITTEN IN MARATHI WERE NOT IN HIS HAND WRITING AND WERE NOT THERE WHEN THE PAPER WAS ORIGINALLY RECEIVE D BY HIM FROM SHRI NIRMALKAR. THE A.O. SIMPLY REJECTED THE FINDING S IN THE CROSS- EXAMINATION. THE A.O. DID NOT EVEN RE-EXAMINE SHRI KOLHE TO ESTABLISH HIS POINT OF VIEW. THUS, THE CROSS-EXAMINATION OF SHRI KOLHE CLEARLY REVEALS THAT THE TRANSACTION AS PER THE SEIZED DOCUMENT CANNOT BE TAKEN AS CORRECT. 9.5 THE APPELLANT IN THEIR SUBMISSIONS CHALLENGED THE PRESUMPTION APPLIED BY THE A.O. U/S.132(4A) OF THE AC T. IN THIS CONNECTION, IT MAY BE STATED THAT THE HON'BLE I.T.A. T., MUMBAI 'B' BENCH, MUMBAI, IN THEIR DECISION IN THE CASE OF STRAP TEX (INDIA) PVT. LTD. (84 ITD 320)(MUM.) CLEARLY HELD THAT THE PRESUM PTION U/S.132(4A) IS APPLICABLE ONLY AGAINST THE PERSON FROM WHOSE POSSESSION THE BOOKS OF ACCOUNTS OR OTHER DOCUMENT WERE F OUND AND NOT AGAINST ANY OTHER PERSON. IT IS HELD THAT AS PER SECTION 132(4A) WHERE ANY BOOKS OF ACCOUNT OR DOCUMENT IS FOUND IN TH E POSSESSION AND CONTROL OF ANY PERSON IN THE COURSE OF THE SEARCH , IT IS PRESUMED THAT THEY BELONG TO 'SUCH PERSON'. THUS, CLEARLY, THE PRESUMPTION IS IN RESPECT OF THE PERSON FROM WHOM THEY WERE FOUND AN D THE USE OF THE WORD 'TO SUCH PERSON' IN THE SAID SECTION MEANS THE PERSON FROM WHOM THE BOOKS OF ACCOUNT OR DOCUMENTS WERE FOUND. CL AUSE (II) OF 26 SECTION 132(4A) OF THE ACT PROVIDES THAT THE CONTENT S OF SUCH BOOKS OF ACCOUNT OR DOCUMENTS ARE TRUE. THIS PRESUMPTION CAN BE APPLIED ONLY AGAINST THE PERSON FROM WHOSE POSSESSION THE BOOKS OF ACCOUNT OR THE DOCUMENT WERE FOUND. THEREFORE, THE A.O. IS W RONG IN APPLYING THE PROVISIONS OF SECTION 132(4A) TO THE APP ELLANT IN THE PRESENT CASE WHO WAS NOT SEARCHED U/S.132 OF THE INCOME -TAX ACT, 1961, NOR THE DOCUMENT WAS FOUND AND SEIZED FROM THEI R POSSESSION. EVEN OTHERWISE, SUCH PRESUMPTION U/S.132(4A) OF THE ACT IS NOT CONCLUSIVE AND REBUTTABLE ONE. 9.6 THE A.O. HEAVILY RELIED ON THE ORIGINAL STATEMEN T GIVEN BY SHRI KOLHE ON 29/03/2003 ABOUT THE SAID SEIZED DOCUM ENT AND IGNORING THE SUBSEQUENT RETRACTION BY HIM BY FILING T HE AFFIDAVIT DISCUSSED ABOVE. IN THIS CONNECTION, THE C.B.D.T. HAS IS SUED INSTRUCTION F.NO.286/2/2003-IT(INV.) DATED 10/03/200 3 STATING THAT ASSESSING OFFICERS SHOULD RELY UPON THE EVIDENCE/ MA TERIAL GATHERED DURING THE COURSE OF THE SEARCH OR SURVEY OPE RATIONS OR THEREAFTER WHILE FRAMING THE RELEVANT ASSESSMENT ORDERS INSTEAD OF CONFESSIONAL STATEMENTS. IN THE INSTANT CASE, THE A.O. H AS NOT BROUGHT ANY CORROBORATIVE EVIDENCE OR MATERIAL OR MADE ANY SUBSEQUENT ENQUIRIES TO PROVE THE CONTENTS OF THE SEIZED DOCUMENT AS CORRECT, INSTEAD HE RELIED ON THE STATEMENT OF SHRI KOLHE WHO IS A THIRD PARTY, WHICH WAS IN FACT RETRACTED BY HIM BY FILING AN AFFI DAVIT AND ALSO IN HIS STATEMENT OF CROSS-EXAMINATION. 9.7.1 FROM THE SAID SEIZED DOCUMENT, IT CAN BE NOTED THAT THE AMOUNT OF RS.2,86,16,038/- REPRESENTS EXPENDITURE ON VARIOUS HEADS, SUCH AS STAMP DUTY, REGISTRATION FEES FOR PURCHASING LAND, EXPENSES AS PER LIST, SECURITY CHARGES PA ID, STAMP PAPER, INCOME-TAX CLEARANCE CERTIFICATE EXPENSE S, CHARITY COMMISSIONER, RANADE ADVOCATE PAYMENTS, U.L.C. FEES, BROKERAGE/COMMISSION TO NITIN, PRAMOD, CHANDU AND BAL KUNDI (N.D. TRUST). FROM THESE HEADS OF EXPENDITURE, IT IS NO TICED THAT THE SAME RELATES TO PURCHASE OF THE SAID TWO LANDS FROM THE TRUST AND CONTRIBUTED/TO BE CONTRIBUTED BY VARIOUS PURCHASE RS OF THE LAND AS APPEARING IN PARTS B, C, D AND E OF THE SAID P AGE NO.18. THE TRUST IS NOT IN ANY WAY CONCERNED WITH THESE EXPE NSES AS THE SAME ARE INCURRED/TO BE INCURRED BY PURCHASERS AND CONTRIBUTED/TO BE CONTRIBUTED BY THEM. THE ONLY PAY MENT WITH WHICH TRUST CAN BE SAID TO BE CONCERNED IS BALKUNDI ( N.D.TRUST) RS.91,00,000/-. HOWEVER FROM THE RECORD, IT IS SEEN TH AT THE TRUST HAS DECLARED IN ITS BOOKS OF ACCOUNTS AND ALSO IN STATEME NT OF COMPUTATION OF INCOME FILED WITH THE RETURN OF INCO ME FOR THE A.Y.2001-2002 FILED ON 24/09/2004, THE SALE PROCEEDS OF THE TWO LANDS AT RS.1,88,50,000/- AND RS.2,03,00,000/- RESPECTI VELY AS PER REGISTERED SALE DEEDS OF THE LANDS. EVEN THE AMOUNT OF RS.91,00,000/- STATED TO HAVE BEEN RECEIVED BY SHRI B ALKUNDI ON BEHALF OF THE APPELLANT TRUST CANNOT BE TAXED IN THE HANDS OF THE APPELLANT TRUST AS THE SAID AMOUNT IS NEVER RECEIVED BY THE TRUST NOR IT GOT ANY BENEFIT OUT OF IT AS PER THE EVIDENCE ON RECORD. HENCE, IT IS PROVED BEYOND DOUBT THAT THIS AMOUNT WA S NEVER RECEIVED BY THE APPELLANT TRUST. 9.7.2 IT IS ALSO NOTED FROM THE RECORD THAT THIS AMOUN T OF RS.91,00,000/- WAS ASSESSED U/S.158BD R.W.S. 143(3) VIDE O RDER DATED 24/04/2007, IN THE HANDS OF MR.BALKUNDI, AS HIS INCOME IN HIS INDIVIDUAL CAPACITY. 9.7.3 IT IS ALSO WORTHWHILE TO NOTE HERE THAT AS PER P ART E OF THE SAID SEIZED PAPER NO.18, AN AMOUNT OF RS.99,16,040 IS NOT 27 CONTRIBUTED BY THE SAID SEVEN PURCHASERS AND IS OUTSTANDI NG AND HENCE NATURALLY COULD NOT BE PAID. IT IS NOT MENTION ED THAT WHICH EXPENDITURE IS OUTSTANDING OUT OF RS.2,86,16,038/-. IT IS ALSO POSSIBLE THAT RS.91,00,000/- MENTIONED AGAINST THE NAM E OF MR.BALKUNDI IS OUTSTANDING. 9.7.4 THEREFORE, THE AMOUNT CANNOT BE TREATED AS INC OME OF THE TRUST IN VIEW OF THE FACTS DISCUSSED ABOVE. THE A.O. HAS THEREFORE ERRED IN CONCLUDING THAT THE AMOUNT OF RS. 2,86,16,038/- APPEARING IN PAGE NO.18 OF BUNDLE NO.32 REPRESENTS UN DISCLOSED INCOME OF THE APPELLANT TRUST. 9.8 IN A CONNECTED CASE OF M/S.THAKKERS DEVELOPERS, NAS HIK, ON SIMILAR FACTS I HAVE ALREADY DECIDED THE ISSUE VIDE MY ORDER IN APPEAL NO.NSK/ACIT.CIR.1/97/07-08 DATED 14/03/2008, STATING THAT NO ADDITION CAN BE MADE BASED ON THE SAID SEIZED DOCUM ENT. AS THE FACTS ARE SIMILAR, THE DECISION ALREADY GIVEN HOLDS EQU ALLY GOOD IN THE PRESENT FACTS OF THE CASE ALSO. 9.9 IN VIEW OF THE ABOVE DISCUSSION, I HOLD THAT THE A .O. IS NOT JUSTIFIED, BOTH ON FACTS AND IN LAW IN MAKING AN ADDI TION OF RS.2,86,16,038/- AS UNDISCLOSED INCOME FOR THE BLOCK PE RIOD RELYING ON THE DOCUMENT FOUND AND SEIZED FROM A THIRD PARTY. THE A.O. IS DIRECTED TO DELETE THE ADDITION RS.2,86,16,038/-. 22. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVENUE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A)-II, NASHIK ERRED IN DELETING THE ADDITION OF RS.2,86,16,038/- MADE U/S.158BD. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, T HE LD.CIT(A)-II, NASHIK ERRED IN TREATING THE SEIZED DOC UMENT IGNORING THE FACT THAT THE TRANSACTIONS RECORDED IN THE DOCUME NT IN A CODED MANNER HAVE BEEN DECODED BY SHRI B.B. KOLHE IN HIS ST ATEMENT U/S.131. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, T HE LD.CIT(A)-II, NASHIK ERRED IN PLACING RELIANCE ON TH E AFFIDAVIT FILED BY SHRI B.B. KOLHE RETRACTING FROM HIS EARLIER STATEM ENT DATED 29- 03-2003 HOLDING THAT EVEN IF IT WAS SELF SERVING, IT D ID NOT LOSE ITS EVIDENTIARY VALUE. 4. THE APPELLANT PRAYS THE ORDER OF THE ASSESSING OFFICE R MAY BE RESTORED. 5. THE APPELLANT PRAYS TO ADDUCE SUCH FURTHER EVIDENC E TO SUBSTANTIATE HIS CASE. 6. THE APPELLANT PRAYS LEAVE TO ADD, ALTER, CLARIFY, AMEND AND OR WITHDRAW ANY GROUNDS OF APPEAL AS AND WHEN THE OCCAS ION DEMANDS. 28 23. AFTER HEARING BOTH THE SIDES, WE FIND THE FACTS OF THE IMPUGNED APPEAL ARE IDENTICAL TO THE FACTS IN THE CASE OF ITA NO.324/PN/2010. WE HAVE ALREADY DECIDED THE ISSUE AND T HE GROUNDS RAISED BY THE REVENUE HAVE BEEN DISMISSED. FOLLO WING THE SAME REASONINGS THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. ITA NO.1196/PN/2009 (SHRI NEMICHAND L. PODDAR) : 24. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS A N INDIVIDUAL ENGAGED IN THE BUSINESS OF LAND DEVELOPMENT AND BUILDING CONSTRUCTION. THERE WAS A SEARCH U/S.132(1) OF THE INCOME-TAX ACT, 1961, IN THE CASE OF SHRI BALASAHEB BARKU KOLHE AND HIS CONCERN SHRI SAMARTH DEVELOPERS PVT. LTD., NASHIK, ON 25-03-2003. DURING THE COURSE OF THE SEARCH ACTION, A DO CUMENT CONTAINING DATA RELATING TO PURCHASE OF A LAND PROPERTY J OINTLY BY A GROUP OF PEOPLE OF NASHIK WAS FOUND AND SEIZED. A STATEM ENT WAS RECORDED ON OATH FROM SHRI B.B.KOLHE ON 29-03-2003 ABOUT THE TRANSACTIONS NARRATED IN THE AFORESAID SEIZED DOCUME NT. BASED ON THE SAID STATEMENT RECORDED FROM SHRI KOLHE, TH E INVESTIGATING OFFICER HAD UNDERSTOOD THAT THE DOCUMENT CONTAINED CERTAIN NAMES IN A CODED FORM AND INDICATED TH E EXPENDITURE/INVESTMENT IN THE SAID LAND BY VARIOUS PEOPLE, INCLUDING THE ASSESSEE SHRI NEMICHAND L.PODDAR. AS PER THE SAID SEIZED DOCUMENT, THE INVESTMENT OF THE ASSESSEE WAS ARR IVED AT RS.32,92,160/-. THE A.O. THEREFORE INITIATED PROCEEDINGS U/S.158BD OF THE INCOME-TAX ACT, 1961, BY ISSUE OF A NO TICE ON 03/05/2005 AS HE FELT THAT SUCH INVESTMENT WAS OUT OF UNDISCLOSED INCOME OF THE ASSESSEE. THE ASSESSEE FILED THE BLOCK 29 RETURN ON 14/06/2005 DECLARING TOTAL UNDISCLOSED INCOME AT RS.NIL. 25. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS EXPLAINED BY THE ASSESSEE THAT THE TRANSACTIONS LINKED TO HIM DO NOT RELATE TO HIM IN HIS INDIVIDUAL CAPACITY AND DENIE D HAVING ANY CONNECTION WITH THE SAID SEIZED DOCUMENT. THE DOCUMENT WAS SEIZED DURING THE COURSE OF THE SEARCH AC TION IN THE CASE OF SHRI B.B.KOLHE AND DOES NOT PERTAIN TO HIS TRANSACTION. THE SEIZED DOCUMENT DOES NOT GIVE ANY YEAR, MONTH, DATE OR NATURE OF ANY TRANSACTION AS SUCH AND A DDITION CANNOT BE MADE IN THE HANDS OF THE ASSESSEE. IT WAS ARGUED THAT THE PRESUMPTION U/S.132(4A) OF THE ACT CANNOT BE DRAWN IN HIS CASE AS THE DOCUMENT WAS FOUND AND SEIZED FROM A THIRD PARTY. IT WAS FURTHER ARGUED THAT THE DOCUMENT FOUND AND SEIZ ED DOES NOT HAVE ANY EVIDENTIARY VALUE BECAUSE THIS WAS NOT WRIT TEN BY HIM. 26. HOWEVER, THE AO WAS NOT SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSEE AND MADE ADDITION OF RS.32,92,160/- IN THE HANDS OF THE ASSESSEE FOR THE FOLLOWING REASONS: 'I) THE LANDS IS QUESTION ARE APPEARING IN THE ACCOUN TS OF THE COMPANIES WHEREIN THE PRESENT ASSESSEE HAS A SUBSTANTIAL I NTEREST. II) THE TRANSACTIONS ARE BEING EXECUTED BY TWO PERSONS, THOUGH IN THEIR REPRESENTATIVE CAPACITY AND WHEREVER SOME IN FORMAL ENTRIES ARE REQUIRED TO BE MADE THESE ARE ALWAYS MADE BY MENTIONING PARTICULAR NAMES OF THE SPECIFIC PERSONS AS H AS BEEN DONE IN THIS CASE, THIS BEING A COMMON PRACTICE PREVAL ENT UNDER THE PROCEDURES OF TRANSFER OF PROPERTIES. III) ON PAGE NO. 18 IN PART-E WHERE THERE IS A SPECI FIC MENTION OF THE PERSONS FROM WHOM THE PAYMENTS OF FIRST AND SECOND INSTALLMENTS HAVE BEEN MADE THE SHORT NAMES OR CODED N AMES OF THE PARTICULAR PERSONS HAVE BEEN IDENTIFIED BY SHRI B .B.KOLHE IN HIS STATEMENT DATED 29.03.2003. 30 IV) THE LANDS APPEAR IN THE ACCOUNTS OF THE COMPANIE S DURING THE PERIOD COVERED BY THE BLOCK PERIOD. THE PAPER N O.18 BUNDLE NO.32 IS FOUND OUT TO BE GENUINE AND THE TRANSACTION RECORDED THEREIN ARE ALSO CONSIDERED TO BE UNDISCLOSED BUSINESS DEA LING BY THE ASSESSEE. V) NOW, SINCE THE PERSONS BETWEEN WHOM THE TRANSACTION S WERE TRANSACTED ARE IDENTIFIED, THE LANDS IN QUESTION ARE TRACED IN THE ACCOUNTS OF THE COMPANIES IN WHICH THE ASSESSEE IS PER SONALLY AND SUBSTANTIALLY INTERESTED, FURTHER THE PERIOD IN WH ICH THE TRANSACTIONS TOOK PLACE FALLS IN THE BLOCK PERIOD OF 0 1.04.1996 TO 25.03.2003. I HAVE NO REASON TO HOLD THE PAPER IN QU ESTION 'DUMB DOCUMENTS' AND I HAVE NO HESITATION IN HOLDING THAT T HE ASSESSEE HAS INCURRED EXPENDITURE OF RS.32,92,160/- TOWARDS INV ESTMENT IN LANDS BEARING SURVEY NO.649,641,642A AND 642B S.NO.7 20A/3/1/1 WHICH IS NOT FROM THE DISCLOSED SOURCES OF INCOME OF THE ASSESSEE. 26. I THEREFORE TREAT THE AMOUNT OF RS.32,92,160/- A S ASSESSEES INVESTMENT FROM UNDISCLOSED SOURCES AND ASSESSED IT AS HIS UNDISCLOSED INCOME U/S.158BD. 27. BEFORE THE CIT(A) THE ASSESSEE MADE ELABORATE ARGUM ENTS BASED ON WHICH THE LD.CIT(A) CALLED FOR A REMAND REPORT FROM THE AO. AFTER CONSIDERING THE REMAND REPORT OF THE AO AND T HE ARGUMENTS OF THE ASSESSEE HE DELETED THE ADDITION BY OB SERVING AS UNDER : 7. I HAVE CONSIDERED THE DETAILED SUBMISSIONS OF THE APP ELLANT AND ALSO THE ASSESSMENT ORDER AND THE REMAND REPORT DATED 05/08/2008 BY THE A.O. THE A.O. HAS HEAVILY RELIED ON THE SEIZED DOCUMENT MENTIONED ABOVE WITHOUT MAKING ANY ENQUIRIES O R BRINGING ANY CORROBORATIVE EVIDENCE ON RECORD. THE EVI DENTIAL VALUE OF A DOCUMENT FOUND AND SEIZED DURING THE COURSE OF A SEARCH ACTION, PARTICULARLY A LOOSE SHEET LIKE IN THE PRESE NT CASE, WAS ELABORATELY DISCUSSED AFTER ANALYZING VARIOUS DECISIONS BY T HE HON'BLE I.T.A.T., JABALPUR BENCH, JABALPUR , IN THE CASE OF SATYAPAL WASSAN [295 ITR (AT) 352] AND OBSERVED AS UNDER: 'THE CRUX OF THESE DECISIONS IS THAT A DOCUMENT FOUND D URING THE COURSE OF SEARCH MUST BE A SPEAKING ONE AND WITHOUT AN Y SECOND INTERPRETATION, MUST REFLECT ALL THE DETAILS ABOUT TH E TRANSACTIONS OF THE ASSESSEE IN THE RELEVANT ASSESSMENT YEAR. ANY GAP IN TH E VARIOUS COMPONENTS AS MENTIONED IN SECTION 4 OF THE INCOME-T AX ACT MUST BE FILLED UP BY THE ASSESSING OFFICER THROUGH INVESTIGA TIONS AND CORRELATIONS WITH THE OTHER MATERIAL FOUND EITHER DU RING THE COURSE OF THE SEARCH OR ON INVESTIGATION. AS A RESULT, WE HOLD THAT DOCUMENT NO. 7 IS A NON-SPEAKING DOCUMENT.' SHRI KOLHE WAS EXAMINED, CROSS-EXAMINED AND RE-EXAMIN ED AND NO EVIDENCE WAS GATHERED FROM HIM TO PROVE THAT THE CON TENTS OF THE SEIZED DOCUMENTS WERE CORRECT AND TRUE. THUS, IN THE A BSENCE OF 31 ANY CORROBORATIVE EVIDENCE IN THE PRESENT CASE, THE SA ID SEIZED DOCUMENT HAS TO BE TREATED AS A DUMB DOCUMENT. 7.1 THE A.O. DISMISSED THE RETRACTION OF THE STATEMENT DATED 9/03/2003 BY FILING AN AFFIDAVIT AS AN AFTER-THOUGHT AND SELF- SERVING. THE A.O. CONCLUDED THAT THE FACTS MENTIONED IN THE SEIZED DOCUMENTS CLEARLY INDICATED THAT THE STATEMENT GIVEN ON 29/03/2003 WAS TRUE AND CORRECT. THE A.O. HAS NOT BRO UGHT ANY MATERIAL OR CORROBORATIVE EVIDENCE TO COME TO THESE CONCLUSIONS. THE REASONS GIVEN BY THE A.O. IN THIS REGARD ARE WITHO UT ANY BASIS AND SUPPORT. THE AFFIDAVIT FILED BY SHRI KOLHE REMAI NED UN- CONTROVERTED AND COULD NOT HAVE BEEN IGNORED. THE A FFIDAVIT EVEN IF REGARDED AS SELF-SERVING DID NOT LOOSE ITS EVIDENTIARY V ALUE AS THERE WAS NO MATERIAL CONTRARY TO THE AVERMENTS MADE IN THE AFFIDAVIT. NOTHING WAS SHOWN BY THE A.O. THAT THERE WAS OTHER MAT ERIAL CORRELATED WITH THE SEIZED DOCUMENT. THE APPELLANT SU CCESSFULLY SHIFTED THE ONUS ONTO THE A.O. BY FILING THE AFFIDAV IT. ONCE THE ONUS SHIFTED TO THE A.O., HE WAS DUTY-BOUND TO COLLECT EVI DENCE SO AS TO BELIE THE CONTENTS OF THE AFFIDAVIT AND HOLD THAT TH E DOCUMENT AND THE TRANSACTIONS RECORDED THEREIN, IN FACT, BELONGED TO THE APPELLANT. THE A.O. HAD DRAWN INFERENCES, MADE PRESUMPTIONS, RELI ED ON SURMISES AND THUS MADE UNSUSTAINABLE ADDITION. 7.2 DURING THE ASSESSMENT PROCEEDINGS, THE A.O. ALLOWED THE CROSS- EXAMINATION OF SHRI KOLHE ON 23/04/2007. AS PE R THE CROSS- EXAMINATION, IT WAS CLEARLY STATED BY SHRI KOLHE THAT THE SEIZED DOCUMENT WAS NOT WRITTEN BY HIM AND WAS HANDED OVER T O HIM BY ONE SHRI NIRMALKAR. IT IS FURTHER CLARIFIED BY SHRI KOLHE THAT THE REMARKS WRITTEN IN MARATHI WERE NOT IN HIS HAND WRITI NG AND WERE NOT THERE WHEN THE PAPER WAS ORIGINALLY RECEIVED BY HIM FROM SHRI NIRMALKAR. THE A.O. SIMPLY REJECTED THE FINDINGS IN THE CROSS- EXAMINATION. THE A.O. DID NOT EVEN RE-EXAMINE SHRI KOLHE TO ESTABLISH HIS POINT OF VIEW. THUS, THE CROSS-EXAMINATIO N OF SHRI KOLHE CLEARLY REVEALS THAT THE TRANSACTION AS PER THE SEIZED DOCUMENT CANNOT BE TAKEN AS CORRECT. 7.3 THE APPELLANT RAISED SEPARATE GROUND CHALLENGING THE PRESUMPTION APPLIED BY THE A.O. U/S.132(4A) OF THE AC T. IN THIS CONNECTION, IT MAY BE STATED THAT THE HON'BLE I.T.A .T., MUMBAI 'B' BENCH, MUMBAI, IN THEIR DECISION IN THE CASE OF STRAP TEX (INDIA) PVT. LTD. (84 ITD 320) (MUM.) CLEARLY HELD THAT THE PRESU MPTION U/S.132(4A) IS APPLICABLE ONLY AGAINST THE PERSON FROM WHOSE POSSESSION THE BOOKS OF ACCOUNTS OR OTHER DOCUMENT WERE F OUND AND NOT AGAINST ANY OTHER PERSON. IT IS HELD THAT AS P ER SECTION132(4A) OF THE ACT WHERE ANY BOOKS OF ACCOUNT OR DOCUMENT IS FOUND IN THE POSSESSION AND CONTROL OF ANY PERSON IN T HE COURSE OF THE SEARCH, IT IS PRESUMED THAT THEY BELONG TO 'SUCH PE RSON'. THUS, CLEARLY, THE PRESUMPTION IS IN RESPECT OF THE PERSON FR OM WHOM THEY WERE FOUND AND THE USE OF THE WORD 'TO SUCH PERSO N' IN THE SAID SECTION MEANS THE PERSON FROM WHOM THE BOOKS OF A CCOUNT OR DOCUMENTS WERE FOUND. CLAUSE (II) OF SECTION 132(4A) OF THE ACT PROVIDES THAT THE CONTENTS OF SUCH BOOKS OF ACCOUNT OR DOCUMENTS ARE TRUE. THIS PRESUMPTION CAN BE APPLIED ONLY AGAINST THE PERSON FROM WHOSE POSSESSION THE BOOKS OF ACCOUNT OR THE DOCUMEN T WERE FOUND. THEREFORE, THE A.O. IS WRONG IN APPLYING THE PROVISIONS OF SECTION 132(4A) TO THE APPELLANT IN THE PRESENT CASE WHO WAS NOT SEARCHED U/S.132 OF THE INCOME-TAX ACT, 1961, NOR THE DOCUMENT 32 WAS FOUND AND SEIZED FROM HIS POSSESSION. EVEN OTHERWISE, SUCH PRESUMPTION U/S.132(4A) OF THE ACT IS NOT CONCLUSIVE AN D IS REBUTTABLE ONE. 7.4 THE APPELLANT IN HIS DETAILED SUBMISSIONS TRIED TO EXPLAIN THAT THE ACTUAL INVESTMENT EXCEEDED THE INVESTMENT N OTED ON THE SAID SEIZED DOCUMENTS. THE SUBMISSIONS OF THE APPELLANT AT PARA NO.6 OF THE PAPER BOOK PAGE NO.4 AND ALSO AT PAGE NO . 16 OF THE PAPER BOOK DATED 13/11/2007 IS RELEVANT IN THIS REGAR D. THE APPELLANT HAS POINTED-OUT THAT AS PER STATEMENT OF CR OSS- EXAMINATION OF SHRI B.B.KOLHE THE 1 ST AND 2 ND INSTALLMENT OF PAYMENT TOWARDS LAND MENTIONED IN THE SAID LOOSE PAPER IS TOWARDS COST OF LAND. FROM THE SUBMISSIONS FILED BY THE A PPELLANT, IT IS CLEAR THAT THE SAID PAYMENTS TOWARDS COST OF LAND ARE RECORDED BY THE APPELLANT IN THE BOOKS OF ACCOUNTS. THE A.O. HAS ST ATED IN HIS REMAND REPORT THAT THE SAID PAYMENTS OF RS.32,92,160/- WERE INCURRED BY THE APPELLANT DURING 20/11/1996 TO 13/0 3/2001. THE APPELLANT HAS POINTED-OUT THAT THE SAID PAYMENTS WERE MADE IN THE YEAR 1999 AND DEBITED IN THE BOOKS OF ACCOUNTS MAINT AINED. THE A.O. HAS NOT PROVED THAT THE SUBMISSION AND CLAIMS OF TH E APPELLANT ARE INCORRECT AND WRONG. THE A.O. TRIED TO RELY ON THE SEIZED DOCUMENT STATING IN HIS REPORT DATED 05/08/2008 THAT IT PROVED BEYOND DOUBT THAT THE SAID PAPER DEPICTED ACTUAL STAT E OF AFFAIRS WITHOUT ANY IMPORTING MATERIAL. 7.5 THE APPELLANT HAS ALSO OBJECTED TO THE ADDITION O F UNDISCLOSED INCOME ON THE GROUND THAT THE TRANSACTION OF THE PROPERTIES INVOLVED WAS THROUGH PUBLIC AUCTION BY GOV ERNMENT AUTHORITY AT THE PREVAILING MARKET RATES, AS ADOPTED BY THE STAMP AUTHORITIES, THOUGH THERE WAS NO PHYSICAL POSSESSION OF TH E PROPERTIES, LEAVING NO SCOPE FOR ANY UNACCOUNTED PAYM ENT. THUS EVEN, IF IT IS ASSUMED THAT THE CONTENTS OF THE SEIZED D OCUMENT ARE CORRECT, UNLESS IT IS PROVED THAT THE TRANSACTION WAS AC TED UPON AND UNLESS THE AMOUNTS STATED IN THE SEIZED DOCUMENT WERE PA ID, ONE CANNOT COME TO THE CONCLUSION THAT THE TRANSACTIONS ME NTIONED IN THE SEIZED DOCUMENT ARE CORRECT - RELIANCE PLACED ON THE DECISION OF HON'BLE KERALA HIGH COURT IN THE CASE OF K.C.AGNES (2 62 ITR 354). IF A SEIZED DOCUMENT DURING THE COURSE OF A SEARCH IS OPEN TO MORE THAN ONE POSSIBILITY OF INTERPRETATION AND DOES NOT PR OVE CONCLUSIVELY THAT ANY MONEY WAS PAID BY THE APPELLANT , THEN NO ADDITION CAN BE MADE. THE A.O. FAILED TO BRING ON R ECORD ANY MATERIAL OR EVIDENCE TO CORROBORATE ALLEGATION REGA RDING PAYMENT OF ON-MONEY IN THIS CASE. THEREFORE, NO ADDITION COU LD BE MADE ON THE BASIS OF THE SAID SEIZED DOCUMENT SOLELY AS MATERIA L AVAILABLE WITH THE A.O. IS GROSSLY INADEQUATE. 7.6 THE A.O. HEAVILY RELIED ON THE ORIGINAL STATEMEN T GIVEN U/S.132(4) OF THE ACT BY SHRI KOLHE ABOUT THE SAID SEI ZED DOCUMENT AND IGNORING THE SUBSEQUENT RETRACTION BY HIM BY FIL ING THE AFFIDAVIT DISCUSSED ABOVE. IN THIS CONNECTION, THE C.B.D.T. HAS I SSUED INSTRUCTION F.N0.286/2/2003-IT (INV.) DATED 10/03/20 03 STATING THAT ASSESSING OFFICERS SHOULD RELY UPON THE EVIDENCE/ M ATERIAL GATHERED DURING THE COURSE OF THE SEARCH OR SURVEY OPE RATIONS OR THEREAFTER WHILE FRAMING THE RELEVANT ASSESSMENT ORDERS INSTEAD OF CONFESSIONAL STATEMENTS. IN THE INSTANT CASE, THE A.O. HA S NOT BROUGHT ANY CORROBORATIVE EVIDENCE OR MATERIAL OR M ADE ANY SUBSEQUENT ENQUIRIES TO PROVE THE CONTENTS OF THE SEIZED DOCUMENT 33 AS CORRECT, INSTEAD HE RELIED ON THE STATEMENT OF SHRI KOLHE WHO IS A THIRD PARTY, WHICH WAS IN FACT RETRACTED BY HIM BY F ILING AN AFFIDAVIT AND ALSO IN HIS STATEMENT OF CROSS-EXAMINATION. 7.7 IN A CONNECTED CASE OF M/S.THAKKERS DEVELOPERS, NA SHIK, ON SIMILAR FACTS I HAVE ALREADY DECIDED THE ISSUE VIDE MY ORDER IN APPEAL NO.NSK/ACIT.CIR. 1/97/07-08 DATED 14/03/2008, STATING THAT NO ADDITION CAN BE MADE BASED ON THE SAID SEIZED DOCUMENT. AS THE FACTS ARE SIMILAR, THE DECISION ALREADY GIVEN HOLD S EQUALLY GOOD IN THE PRESENT FACTS OF THE CASES ALSO. 7.8 IN VIEW OF THE ABOVE DISCUSSION, THE A.O. IS NOT JU STIFIED, BOTH ON FACTS AND LAW, IN MAKING AN ADDITION OF RS.32,92,1 60/- AS UNDISCLOSED INCOME FOR THE BLOCK PERIOD RELYING ON TH E DOCUMENT FOUND AND SEIZED FROM SHRI BALASAHEB BARKU KOLHE WHO IS A THIRD PARTY. HENCE THE ADDITION MADE BY THE A.O. IS DELETE D. 28. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVENUE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : A. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE CIT(A) ERRED IN TREATING THE SEIZED DOCUMENT AS A DUMB DOCUMENT. B. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE CIT(A) ERRED IN NOT CONSIDERING THE FACT THAT A.O. HAD RIGHTLY DI SMISSED SHRI KOLHE'S RETRACTION. C. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE CIT(A) ERRED IN TREATING THE A.O. WRONG IN APPLYING SECTION 132(4 A) IN THIS CASE. D. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE CIT(A) ERRED IN DELETING THE ADDITION MADE OF RS.32,92,160/-, IN THE ASSESSMENT ORDER. E. THE ORDER OF THE CIT(A) BE VACATED AND THAT OF THE A.O. BE RESTORED. F. THE APPELLANT REQUESTS FOR ADMISSION OF AN ADDI TIONAL GROUNDS OF APPEAL OR ADDITIONAL EVIDENCES IF REQUIRED TO SUPP ORT HIS CASE. G. THE APPELLANT CRAVES, LEAVES TO ADD, ALTER, AM END, OR DELETE ANY OF THE ABOVE GROUNDS OF APPEAL. 29. AFTER HEARING BOTH THE SIDES, WE FIND THE FACTS OF THE IMPUGNED APPEAL ARE IDENTICAL TO THE FACTS IN THE CASE OF ITA NO.324/PN/2010. WE HAVE ALREADY DECIDED THE ISSUE AND T HE GROUNDS RAISED BY THE REVENUE HAVE BEEN DISMISSED. FOLLO WING 34 THE SAME REASONINGS THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. ITA NO.803/PN/2010 : (DCIT, CIRCLE-1, NASHIK VS. SHR I BALASAHEB BARKU KOLHE) : ITA NO.784/PN/2010 : (SHRI BALASAHEB BARKU KOLHE VS. ACIT, CENTRAL-3, NASHIK 30. ITA NO.784/PN/2010 WAS EARLIER DISMISSED BY THE TRIBUNAL FOR NON-PROSECUTION. SUBSEQUENTLY, VIDE M.A.NO.23/PN/2012 ORDER DATED 18-04-2012 THE TRIBUNAL RECALLED THE ORDER. HENCE, THIS IS A RECALLED MATTER. 31. FACTS OF THE CASE, IN BRIEF ARE THAT THE ASSESSEE IS A N INDIVIDUAL AND IS ENGAGED IN THE BUSINESS OF LAND DEVELOPMENT IN HIS INDIVIDUAL CAPACITY. HE IS ALSO DIRECTOR AND SHAREHOLDER OF M/S. SHREE SAMARTH DEVELOPERS PVT. LTD. (IN SHORT SSDPL ) DOING THE BUSINESS OF LAND DEVELOPMENT. HE WAS NOT ASSES SED TO INCOME-TAX AND HE HAD NOT FILED ANY INCOME-TAX RETURNS E ARLIER. A SEARCH OPERATION U/S.132 OF THE I.T. ACT WAS CONDUCTE D IN THE RESIDENTIAL AS WELL AS OFFICE PREMISES OF THE ASSESSEE ON 25- 03- 2003 DURING WHICH CASH OF RS.26,170/- WAS FOUND OUT OF WHIC H RS.20,000/- WAS SEIZED. SIMILARLY, GOLD ORNAMENTS AND JEWELLE RY VALUED AT RS.2,67,722/- WAS ALSO FOUND OUT OF WHICH JEWELLERY VALUED AT RS.1,09,890/- WAS SEIZED. FD RECEIPTS OF RS.27,00 0/- WAS ALSO FOUND. DURING THE COURSE OF SEARCH CERTAIN BOOK S OF ACCOUNT, DOCUMENTS, LOOSE PAPERS WERE FOUND AND SEIZED A S PER ANNEXURE-A OF PANCHANAMA DATED 25-03-2003 FROM THE OFFIC E PREMISES OF SHREE SAMARTH DEVELOPERS PVT. LTD. 35 32. IN RESPONSE TO THE NOTICE U/S.158BC OF THE INCOME T AX ACT THE ASSESSEE FILED THE RETURN OF INCOME ON 06-08-2004 DE CLARING UNDISCLOSED INCOME OF RS.67,50,000/-. THE AO NOTED THAT DURING THE COURSE OF SEARCH AND SEIZURE ACTION, STATEME NT OF THE ASSESSEE AND SHRI SHARADH EKNATH SANDHAN WERE RECOR DED U/S.132(4) OF THE I.T. ACT. THE ASSESSEE IN HIS STATEMENT RECORDED ON 31-03-2003 HAD DECLARED ADDITIONAL UNDISCLOSE D INCOME OF RS.85 LAKHS ON BEHALF OF ALL SOURCES AND ON BEHALF O F HIS FAMILY MEMBERS, THE DETAILS OF WHICH ARE AS UNDER : SR NO DESCRIPTION AMOUNT (RS) 1 SURVEY NO.28/3 & 28/3/1 - PAYMENTS TO SHRI DASHRATH MANDILIK 3,500,000 2 PAYMENTS FOR SURVEY NO 2 525,000 3 ON ACCOUNT OF FOREIGN TOURS 300,000 4 ON ACCOUNT OF HOUSEHOLD EXPENSES 400,000 5 DEPOSITS IN VARIOUS BANK ACCOUNTS 1,000,000 6 INVESTMENTS OF SHARAD SANDHAN 300,000 7 ON ACCOUNTS OF ERRORS & OMISSIONS 2,475,000 TOTAL 8,500,000 33. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASS ESSEE SUBMITTED THAT THE TRANSACTIONS APPEARING IN THE NAME O F THE COMPANY SSDPL PRIOR TO THE INCORPORATION OF THE COMPAN Y AS WELL AS SUBSEQUENT TO THE INCORPORATION OF THE COMPANY M AY BE CONSIDERED IN HIS HAND, I.E. IN THE HANDS OF SHRI BALASAHEB BARKU KOLHE. HE FURTHER REQUESTED THAT THE TRANSACTION S APPEARING IN THE SEIZED MATERIALS WHICH WERE NOT RECORDE D IN THE BOOKS OF ACCOUNT AND WHICH WAS SEIZED AS PER ANNEXURE- A TO THE PANCHANAMA BE TREATED AS BELONGING TO HIM. 34. ON ANALYSIS OF THE SEIZED DOCUMENTS THE AO NOTED TH AT THE SAME INCLUDES VARIOUS AGREEMENTS MADE BY THE ASSESSEE FOR 36 PURCHASE OF SEVERAL IMMOVABLE PROPERTIES, SEVERAL DOCUME NTS SHOWING THE PAYMENTS MADE BY THE ASSESSEE FOR CERTAIN LANDS AGREED TO BE PURCHASED BY HIM, DOCUMENTS RELATING TO INVESTMENT IN MAHILA BACHAT YOJANA AND SEVERAL DOCUMENTS SHOWING AMOUNTS RECEIVED ON SALE OF LANDS ETC. SINCE THE ASSESSEE WAS NOT FILING INCOME-TAX RETURNS EARLIER AT ANY TIME THE AO HELD THAT ALL SUCH TRANSACTIONS WERE UNDISCLOSED TRANSACTIONS. HE FURTHER NOTED THAT THE ASSESSEE WAS NOT MAINTAINING ANY BOOKS OF ACCOUNTS. AFTER THE DATE OF SEAR CH, THE ASSESSEE HAD PREPARED THE CASH FLOW STATEMENT IN RESPE CT OF THE BLOCK PERIOD AND IT WAS FILED DURING THE BLOCK ASSESSMENT PROCEEDINGS. THE AO NOTED THAT THE ASSESSEE HAS SHOW N THE OPENING CASH BALANCE OF RS.15,000/- AS ON 01-04-1996, I.E.A T THE BEGINNING OF THE BLOCK PERIOD. SUBSEQUENTLY ALL THE TRANSACTIONS OF PURCHASE AND SALE OF LANDS AS PER SEIZED DOCUMENTS AND AS PER THE DOCUMENTS REGISTERED WITH RE CORD OF RIGHTS WERE CONSIDERED. IN ADDITION TO THE TRANSACTIONS FOR PAYMENTS AND RECEIPTS, EXPENSES AND INVESTMENTS AS PER SEIZED DOCUMENTS WERE ALSO CONSIDERED. THE DEPOSITS AND WITHDR AWALS MADE FOR THE BANK ACCOUNTS WERE ALSO CONSIDERED. THE A SSESSEE HAD ALSO SHOWN CERTAIN RECEIPTS ON ACCOUNT OF SALE OF AGRICULTURAL PRODUCE AND ON ACCOUNTS OF ADVANCES RECEIV ED FROM HIS HUF, FAMILY MEMBERS, DISTANT RELATIVES AND FROM CERTAIN OTHER PARTIES WHICH WERE CONSIDERED BY HIM IN THE CASH FLO W STATEMENT. 35. HOWEVER, THE AO NOTED THAT THESE WERE NOT SUPPORT ED BY ANY ENTRIES IN THE SEIZED DOCUMENTS. THE CASH FLOW STATE MENT FURNISHED BY THE ASSESSEE SHOWED CASH BALANCE OF 37 RS.26,93,915/- AS ON 25-03-2003, I.E. ON THE DATE OF SEARC H AS AGAINST THE CASH OF RS.26,170/- AT THE TIME OF SEARCH. TH E AO FURTHER NOTED THAT THE ASSESSEE HAS RAISED OVERDRAFTS AND LOANS DURING THE BLOCK PERIOD FROM SEVERAL BANKS. THE POSITION IN RESPECT OF SUCH BANK LOANS DURING THE BLOCK PERIOD WAS SUMMARIZED BY HIM AS UNDER : DATE LOAN LOAN LOAN LOAN TOTAL BANK ACCOUNT NO. ACCOUNT NO. ACCOUNT NO. ACCOUNT NO. LOAN 600010 600973 40H102 600554 AMOUNT SHREERAM SHREERAM JANALAXMI JANALAXMI CO. OP. CO. OP. CO. OP. CO. OP. BANK BANK BANK BANK 31-03-1997 -- -- 7,69,728 7,69,728 31-03-1998 7,58,846 7,58,846 31-03-1999 4,62,155 4,62,155 31-03-2000 5,01,011 7,32,801 5,21,768 17,55,580 31-03-2001 7,30,044 4,24,146 11,54,190 31-03-2002 8,68,468 8,20,909 4,01,185 20,90,562 25-03-2002 4,89,487 --- 7,60,980 2,98,161 18,48,628 36. FROM THE ABOVE THE AO NOTED THAT THE BANK ACCOUN TS SHOW CONTINUOUS OVERDRAFTS AND LOANS BORROWED BY THE A SSESSEE FROM THE BANK THROUGHOUT THE BLOCK PERIOD. AS AGAINST THIS CASH FLOW STATEMENT PREPARED BY THE ASSESSEE SHOWS CASH BA LANCE AS ON 31 ST MARCH OF EACH YEAR IN THE BLOCK PERIOD, THE DETAILS OF WHICH ARE AS UNDER : DATE TOTAL BANK LOAN AMOUNT CASH BALANCE SHOWN IN THE CASH FLOW STATEMENT PREPARED AFTER THE SEARCH 31 - 03 - 1997 769728 -- 31 - 03 - 1998 758846 -- 31 - 03 - 1999 462155 -- 31 - 03 - 2000 17,55,580 -- 38 31 - 03 - 2001 11 54190 -- 31 - 03 - 2002 2090562 868468 25 - 03 - 2002 1848628 789487 37. SINCE THE ASSESSEE WAS UNABLE TO EXPLAIN THE ABOVE ANONYMOUS POSITION THE AO DISBELIEVED THE AVAILABILITY OF FUNDS IN THE CASH FLOW STATEMENT PREPARED BY THE ASSESSEE WIT H THE HELP OF ALLEGED ADVANCES RECEIVED FROM HUF, FAMILY MEMBERS, DISTANT RELATIVES AND OTHER PARTIES. HE THEREFORE ASKED THE ASSESSEE TO PRODUCE THE CONTEMPORARY EVIDENCE IN RESP ECT OF SUCH RECEIPTS, ENTRIES CONSIDERED BY HIM IN THE CASH FLOW STATEMENT SINCE THERE WAS NO EVIDENCE IN THE SEIZED DOCUMENTS. 38. THE AO NOTED THAT THE ASSESSEE WAS NOT ABLE TO PR ODUCE ANY SUCH CONTEMPORARY EVIDENCE IN RESPECT OF SUCH RECE IPTS CONSIDERED BY HIM IN THE CASH FLOW STATEMENT ON ACCOUNT OF AGRICULTURAL INCOME AND ON ACCOUNT OF ADVANCES CLAIMED TO HAVE BEEN RECEIVED FROM HUF, FAMILY MEMBERS, DISTANT RELATIVES AN D OTHER PARTIES. SINCE ALL THE RECEIPTS CLAIMED TO HAVE BEEN RECEIVED ARE IN CASH AND SINCE THE ASSESSEE COULD NOT P RODUCE ANY EVIDENCE FOR SALE OF AGRICULTURAL PRODUCE EITHER IN HIS NAME OR IN THE NAME OF HIS HUF OR ANY OF HIS FAMILY MEMBERS OR DISTANT RELATIVES AND SINCE THE ASSESSEE DID NOT PRODUCE THESE PARTIES AS WITNESS FOR THE PURPOSE OF VERIFICATION OF THE EXISTENCE OF ANY CONTEMPORARY EVIDENCE, THE AO REJECTED THE CLAIM OF THE ASSESSEE FOR CASH RECEIPTS TO THE EXTENT OF RS.1,29,03,600/ -. THE AO, THEREFORE, PREPARED HIS OWN CASH FLOW STATEMENT BY EXCLUDING SUCH UNSUPPORTED RECEIPTS CLAIMED BY THE ASSES SEE AND PREPARED THE PEAK WORKING STATEMENT FOR THE BLOCK PERIOD. HE CONSIDERED THE OPENING CASH BALANCE AS ON 01-04-199 6 AS 39 RS.15,000/- AS CLAIMED BY THE ASSESSEE. HE BOOKED THE ACTUAL FIGURES IN RESPECT OF THE VARIOUS TRANSACTIONS MENTIONED IN THE DECLARATION U/S.132(4) AND AS PER THE BANK STATEMENT. TH E INVESTMENT OF RS.4,70,550/- IN THE NAME OF SHRI SHARAD EKNA TH SANDHAN OWNED AND ADMITTED BY THE ASSESSEE WAS ALSO CONSIDERED BY HIM. SIMILARLY, THE TRANSACTIONS OF THE NATUR E OF SHARE MONEY AND ADVANCES CREDITED IN THE NAME OF THE A SSESSEE IN THE BOOKS OF M/S. SSDPL FOR A.YRS. 2001-02 AND 2002-0 3 FOR WHICH THE RETURNS OF SSDPL WERE ALREADY FILED BEFORE THE DATE OF SEARCH WERE ALSO CONSIDERED BY THE AO IN THE PEAK WORK ING STATEMENT. SINCE THE INVESTMENT TOWARDS SHARE MONEY A ND ADVANCES BY SHRI SHARAD EKNATH SANDHAN WAS OWNED UP BY THE ASSESSEE, THEREFORE, THE AO ALSO CONSIDERED SUCH INVESTME NT IN THE NAME OF SHRI SHARAD EKNATH SANDHAN IN THE HANDS O F THE ASSESSEE FOR CONSIDERING THE PEAK WORKING CAPITAL. AFTER ANALYZING THE VARIOUS ENTRIES WHICH CONSIST OF ABOUT 1290 RUNNING INTO 258 PAGES THE AO NOTED THAT THE PEAK OF S UCH UNEXPLAINED INVESTMENTS AND EXPENDITURE COMES TO RS.82,96,577/- AS ON 02-12-2002. THE AO ASKED THE ASSE SSEE TO EXPLAIN THE SOURCE OF THE INVESTMENT AND THE EXPENDIT URE TO THE EXTENT OF THE PEAK OF RS.82,96,577/-. THE ASSESSEE A RGUED THAT AS PER THE CASH FLOW STATEMENT FURNISHED BY HIM THE RE IS NO SHORTAGE AND ALL THE INVESTMENTS AND EXPENDITURE ARE FULL Y EXPLAINED. THE ASSESSEE ARGUED THAT SINCE THE AMOUNTS WERE CREDITED IN THE CASH FLOW STATEMENT ON ACCOUNT OF AGRICULT URAL INCOME AND ON ACCOUNT OF CASH RECEIVED FROM HUF, FAMILY MEMBERS AND OTHER PARTIES THE CASH BALANCE AS ON 02- 12-2002 WAS RS.95,20,922/- AND THE CASH BALANCE AS ON THE DATE OF 40 SEARCH, I.E. 25-03-2003 AS PER CASH FLOW STATEMENT WAS RS.1,26,93,915/-. 39. HOWEVER, THE AO WAS NOT SATISFIED WITH THE ABOVE ARGUMENT OF THE ASSESSEE IN ABSENCE OF PRODUCTION OF AN Y CONTEMPORARY EVIDENCE IN SUPPORT OF THE AGGREGATE AMOU NT OF RS.1,29,03,600/- CLAIMED TO HAVE BEEN RECEIVED FROM SALE O F AGRICULTURAL PRODUCE, FROM THE HUF, FAMILY MEMBERS AND OTHE R PARTIES. HOWEVER, CONSIDERING THE ASSESSEES OWN SHARE IN ANCESTRAL AGRICULTURAL LAND OF ABOUT 3 ACRES AS WELL AS OWN AGRICULTURAL LAND OF 14 ACRES WHICH IS UNDER CULTIVATION BY T HE ASSESSEE, THE AO ACCEPTED AND ESTIMATED THE NET AGRICU LTURAL INCOME OF THE ASSESSEE AT RS.4 LAKHS FOR THE BLOCK PERIOD. AFTER REDUCING THE SAME FROM THE AMOUNT OF RS.82,96,577/- DETERMINED EARLIER THE AO MADE ADDITION OF RS.78,96,577/- AS UNDISCLOSED INCOME OF THE ASSESSEE FOR THE BLOCK PERIOD. 40. SIMILARLY, THE AO NOTED THAT DURING THE COURSE OF SEAR CH THE TYPED STATEMENT AS PER PAGE 18 OF ANNEXURE 32 WA S SEIZED FROM THE OFFICE PREMISES OF THE ASSESSEE. IN HIS STATEMENT RECORDED U/S.132(4) ON 29-03-2003 THE ASSESSEE HAD STA TED THAT THIS PAGE IS IN RESPECT OF DEAL OF LAND AT NASHIK DIOCESAN CO UNCIL FOR WHICH A GROUP OF LAND DEVELOPERS OF NASHIK HAD INVESTED JOINTLY AND IN THAT DEAL THE ASSESSEE WAS ALSO ONE OF T HE INVESTORS. THE PROPERTIES WERE KNOWN AS SHARANPUR MALA LAND BEARING S.NO.720/A/3//1/1 FINAL PLOT 476C ADMEASURING 28000 SQ.MTRS AND POLICE COMMISSIONER PROPERTY WHICH IS NEAR SILV ER OAK SCHOOL, NEAR SHARANPUR, NASHIK BEARING S.NO.649 PART, 6 41 PART, 642A AND & B PART ADMEASURING 26000 SQ. MTRS. 41 41. THE CHART AS PER SEIZED PAGE NO.18 OF ANNEXURE 32 IS DIVIDED INTO PARTS A, B, C, D & E. IT WAS EXPLAINED BY TH E ASSESSEE THAT PART A INDICATES THE EXPENSES ON ACCOUN T OF STAMP DUTY, PAYMENT TO TRUSTEES ETC. WHICH IS TO THE TUNE OF RS.2,86,16,038/- FOR BOTH THE PIECES OF LAND. PART-B INDICAT ES THE PAYMENTS WHICH WERE SUPPOSED TO BE RECORDED. PAR T C INDICATES THE PAYMENTS WHICH WERE SUPPOSED TO BE UNREC ORDED. THE AMOUNT OF EXPENDITURE OF RS.2,86,16,038/- INCLUDES THE EXPENSES IN RESPECT OF STAMP DUTY AND REGISTRATION CHAR GES FOR THESE 2 PROPERTIES. THE AO NOTED THAT THE FIGURES IN RE SPECT OF STAMP DUTY AND REGISTRATION CHARGES AS PER SEIZED PAGE 18 OF ANNEXURE 32 AND THE ACTUAL FIGURES FOR SUCH EXPENSES INC URRED AT THE TIME OF CONVEYANCE DEEDS OF THESE PROPERTIES MAD E ON 13- 03-2001 BY NASHIK DIOCESAN COUNCIL ARE AS UNDER : NAME OF THE PROPERTY STAMP DUTY REGISTRATION CHARGES AS PER SEIZED PAGE 18 AS PER CONVEYANCE DEED DT. 13-03-2001 AS PER SEIZED PAGE 18 AS PER CONVEYANCE DEED DT. 13-03-2001 SHARANPUR MALA 1624380 1623980 20500 20341 POLICE COMMISSIONER LAND 1546680 1546340 20500 20426 42. FROM THE ABOVE HE NOTED THAT THE FIGURES OF EXPENDIT URE AS PER PART-A OF SEIZED CHART PAGE NO.18 OF ANNEXURE 32 WE RE PROJECTED EXPENSES UNDER VARIOUS HEADS AND THEY TALLIED WITH TH E ACTUAL EXPENDITURE INCURRED AT THE TIME OF CONVEYANCE O F 13-03- 2001. THE NAMES MENTIONED IN THE CHART OF SEIZED PAPER WHICH WERE CODED AND WERE WRITTEN CRYPTICALLY WERE DECODED B Y THE ASSESSEE. THE AO NOTED THAT PART-D INDICATES THE FIRST INSTALLMENT PAYABLE IN RESPECT OF THE EXPENDITURE OF 42 RS.2,86,16,038/- FOR BOTH THE PARCELS OF THE LAND. THE SHAR E OF EACH OF THE PARTIES WHO HAD JOINED TOGETHER IS SHOWN SE PARATELY. IN THE FIRST COLUMN OF PART-E THE NAMES IN SHORT OF THE PARTIES ARE GIVEN AND THE SECOND COLUMN INDICATES THE SHARE OF E ACH PARTY IN THE TOTAL AMOUNT OF RS.2,86,16,038/-. THE AO REPRODUCED THE PART-E OF THE CHART AT SEIZED PAGE18 O F ANNEXURE 32 WHICH IS AS UNDER : NAME TOTAL 1 ST INSTALLMENT 2 ND INSTALLMENT 3 RD BALANCE NANA NIKUMBH 4016379 2092160 1800000 124219 B.B. KOLHE 1418257 924000 400000 94257 N.L. PODDAR 4016379 2092160 900000 1024219 DILIP WANI 4016379 2092160 650000 1274219 THAKKAR D. LTD 4016379 2092160 950000 974219 BHUPENDRA SHAH 2095415 0 0 2095415 RAJENDRA SHAH 9036852 4707360 0 4329492 28616040 14000000 4700000 9916040 43. THE NOTINGS IN HANDWRITING ON THE TYPED CHART SHOWS THAT THE ACTUAL PAYMENT OF IST AND 2 ND INSTALMENTS WERE MADE AFTER THE CHART WAS TYPED. THE 3 RD INSTALMENT WAS NOTED AS BAKI, I.E. OUTSTANDING IN HANDWRITING. 44. FROM THE ABOVE, THE AO NOTED THAT THE TOTAL AMOUNT PAID BY THE ASSESSEE FOR THIS DEAL WAS RS.13,24,000/-, I.E. IST A ND 2 ND INSTALMENTS WHICH HAVE NOT BEEN CONSIDERED BY HIM IN HIS CASH FLOW STATEMENT. THE ASSESSEE HAS NOT EXPLAINED THE SOUR CE OF THE PAYMENT OF RS. 13,24,000/-. FURTHER, THIS AMOUNT WAS ALSO NOT CONSIDERED IN THE PEAK WORKING STATEMENT COMPUTED BY THE AO. ALTHOUGH THE ASSESSEE WAS NOT ONE OF THE PURCHASE RS OF THE PROPERTIES AS PER FINAL CONVEYANCE DEED DATED 13-03-200 1, HOWEVER, THE AO NOTED THAT THERE IS NO ENTRY IN ANY OF THE SEIZED DOCUMENTS OF THE ASSESSEE FOR THE RETURN OF REFUND OF TH E 43 AMOUNT OF RS.13,24,000/-. IN ABSENCE OF ANY SATISFACTORY EXPLANATION AND IN ABSENCE OF PRODUCTION OF ANY INDEPENDEN T AND CONTEMPORARY EVIDENCE AND ANY CONFIRMATION FOR THIS PURPOSE THE AO TREATED THE AMOUNT OF RS.13,24,000/- AS UNEXPLAINED INVESTMENT AND TAXED THE SAME AS UNDISCLOSE D INCOME OF THE ASSESSEE FOR THE BLOCK PERIOD. 45. THE AO SIMILARLY NOTED THAT AS DIRECTOR OF M/S . SSDPL THE ASSESSEE HAS RECEIVED SALARY OF RS. 96,000/- DURING F.Y. 2000-01 RELEVANT TO A.Y. 2001-02. NO TAX HAS BEEN DEDUCTED AT SOURCE AND NO ADVANCE TAX OR SELF-ASSESSMENT TAX WAS PAID. AFTER A LLOWING THE DEDUCTION U/S. 16 (1) OF RS. 25,000/- THE AO MADE AD DITION OF RS.71,000/- BEING SALARY INCOME AS UNDISCLOSED INCO ME OF THE ASSESSEE FOR THE BLOCK PERIOD. 46. THE AO FURTHER NOTED THAT ANNEXURE A-22 SEIZED FROM OFFICE PREMISES OF THE ASSESSEE CONTAINS DETAILS OF THE INVESTMENTS AND EXPENDITURE INCURRED FOR CONSTRUCTION OF HOUSE IN THE NAME OF SHRI IMRAN NAZIM PATEL IN SURVEY NO. IN SUR VEY NO.724, MAKHAMALABAD TALUKA & DIST NASHIK. PAGE NO. 109 AND PAGE NO.110 CONTAINS NOTINGS OF EXPENSES IN RESPECT OF CONSTRUCTION OF BUILDING. AS PER PAGE NO. 109 THE TOTAL EXP ENSES INCURRED ARE RS. 2,68,170/-. SIMILAR NOTING AS PER PAGE NO. 110 CONTAIN TOTAL EXPENSES OF RS. 92,950/-. SHRI IMRAN NAZIM PA TEL EMPLOYEE OF THE ASSESSEE AND TOTAL EXPENDITURE EXPENSES COMES TO RS.3,61,260/-. DURING THE COURSE OF BLOCK ASSESSMENT PROCEEDINGS MR. IMRAN PATEL FILED A LETTER DATED 21-03-200 5 STATING THAT THESE EXPENSES HAS BEEN INCURRED BY HIS EMPLOYER SHRI BALASAHEB BARKU KOLHE, I.E. THE ASSESSEE. ON BEING QUESTIONED BY THE AO THE ASSESSEE ACCEPTED THE ABOVE 44 INVESTMENT APPEARING IN THE LOOSE PAPERS AS MADE BY HIM. THE AO THEREFORE MADE ADDITION OF RS.3,61,260/-. THUS, THE AO COMPUTED THE UNDISCLOSED INCOME OF THE ASSESSEE AT RS.96,52,837/-, THE DETAILS OF WHICH ARE AS UNDER: SR.NO PARA NO DESCRIPTION AMOUNT (RS) 1 10.11 PEAK OF UNEXPLAINED EXPENDITURE AS DISCUSSED 7896577 2 11.5 UNEXPLAINED PAYMENT ON ACCOUNT OF POLICE COMMISSIONER LAND 1324000 3 12.1 UNDISCLOSED SALARY INCOME AS DISCUSSED 71000 4 13.1 UNEXPLAINED INVESTMENTS IN RESIDENTIAL HOUSE 361260 TOTAL UNDISCLOSED INCOME 9652837 47. BEFORE CIT(A) THE ASSESSEE FILED DETAILED SUBMISSIONS AGAINST THE CALCULATION OF PEAK SHORTAGE OF CASH BY THE A O AT RS.78,96,577/. IT WAS ARGUED THAT THE AO WAS NOT JUSTIFIE D IN REJECTING THE RECEIPT OF CASH FROM THE HUF, FAMILY MEMBERS AND OTHER PARTIES. IT WAS ARGUED THAT THE ASSESSEES FAMIL Y WAS HAVING IRRIGATED AGRICULTURAL LANDS OF AROUND 100 ACRES AN D THE ASSESSEE WAS CARRYING OUT HIS BUSINESS OF REAL ESTATE W ITH THE FINANCIAL ASSISTANCE FROM FAMILY MEMBERS. THE CONFIRMATION LETTERS ALONG WITH THE COPIES OF THE BANK PASS BOOKS OF THE SAID PARTIES WHICH WERE SUBMITTED TO THE AO WERE ALSO FILED BEFO RE THE CIT(A). IT WAS ARGUED THAT THE AGRICULTURAL INCOME ADOPTE D BY THE AO IS VERY NOMINAL CONSIDERING THE HUGE HOLDING OF AGRICULTURAL LAND BY THE HUF. THE ASSESSEE ALSO FILED CONFIRMATION LETTERS OF VARIOUS PARTIES TO SUBSTANTIATE THE LOANS RECEIVED FROM THEM. 45 48. SO FAR AS THE ADDITION OF RS.13,24,000/- ON ACCOUNT OF PAYMENTS MADE ON ACCOUNT OF POLICE COMMISSIONER LAND, IT WA S SUBMITTED THAT THE ASSESSEE WAS NOT A PARTY TO THE P URCHASE REGISTERED WITH THE SUB-REGISTRAR IN RESPECT OF THE SAID PROPERTY. NOTHING WAS SHOWN BY THE AO THAT THERE WAS OTHER MAT ERIAL CORRELATED WITH THE SEIZED DOCUMENT. IT WAS ALSO ARGUED THAT THE PRESUMPTION U/S.132(4) OF THE ACT IS AVAILABLE ONLY DURING TH E SEARCH ACTION U/S.132 OF THE ACT AND THE SAME IS NOT AP PLICABLE IN THE ASSESSMENT PROCEEDINGS. FURTHER SUCH PRESUMPTIO N IS ALSO REBUTTABLE. IT WAS ARGUED THAT SINCE THE ASSESSEE IS NOT A PARTY TO THE PURCHASE, THEREFORE, THE QUESTION OF MAKING ANY PAYMENT FOR THE SAID LAND BY THE ASSESSEE DOES NOT AR ISE. THE RETRACTION OF THE STATEMENT BY FILING AN AFFIDAVIT ON 21-08- 2003 WAS ALSO BROUGHT TO THE NOTICE OF LD.CIT(A). 49. BASED ON THE VARIOUS ARGUMENTS ADVANCED BY THE AS SESSEE THE LD.CIT(A) CALLED FOR A REMAND REPORT FROM THE AO. AFTER CONSIDERING THE REMAND REPORT AND THE ARGUMENTS ADVAN CED BY THE ASSESSEE THE LD.CIT(A) HELD THAT THE AO WAS NOT JUS TIFIED IN REJECTING THE CASH FLOW STATEMENT ON THE GROUND THAT T HE ASSESSEE DID NOT PRODUCE ANY CONTEMPORANEOUS EVIDENCE . ALTHOUGH THE CASH BALANCE AS PER CASH FLOW STATEMENT ON THE DATE OF SEARCH, I.E. ON 25-03-2003 PREPARED BY THE ASSE SSEEWAS AT RS.1,26,93,915/- WHEREAS THE ACTUAL CASH FOUND ON THE DATE OF SEARCH WAS ONLY RS.26,170/-, STILL, THE CIT(A) HELD THAT REJECTION OF THE STATEMENT FILED BY THE ASSESSEE IS NOT F ULLY JUSTIFIABLE. ACCORDING TO HIM THE AO SHOULD HAVE CONSIDERED WHEREVER SOME SOURCES ARE EXPLAINED WITH NECESSARY EVID ENCE. HE DIRECTED THE AO TO GIVE SET OFF OF RS.14,13,500/- IN CASE OF THE 46 FOLLOWING PERSONS WHERE ASSESSEE HAS SUBMITTED CONFIRMATION LETTERS ALONG WITH COPIES OF BANK PASS BOOKS AND OTHER EVIDENCES: A. LALJI SHARMA RS.2,64,500/- B. PARIKH BHAIYA RS.2,76,000/- C. GOVIND SHARMA RS.5,000/- D. KAMLAKR PAWAR RS.50,000/- E. JAYESH THAKKAR RS.10,000/- F. BINDRA BABU RS.1,77,500/- G. BORADE DNYANESHWAR RS.4,000/- H. KAZI SIJAUDDIN RS.6,26,500/- 50. ACCORDING TO HIM THE DOCUMENTS FOUND AND SEIZED CONT AIN THE DETAILS OF THE ABOVE TRANSACTIONS AND THE ASSESSEE FILED NECESSARY EVIDENCE BY WAY OF CONFIRMATION LETTERS, BANK ACCOUNTS ETC. WHICH SHOULD HAVE BEEN CONSIDERED BY THE AO. 51. SO FAR AS THE ESTIMATION OF AGRICULTURAL INCOME OF RS.4 LAKHS FOR THE ENTIRE BLOCK PERIOD AS AGAINST AMOUNT OF RS.12,67,800/- SHOWN BY THE ASSESSEE IS CONCERNED HE O BSERVED THAT THE OWNING OF AGRICULTURAL LAND BY THE ASSESSEE IS NO T IN DISPUTE. ONLY THE QUANTUM OF AGRICULTURAL INCOME SHOWN BY THE ASSESSEE WAS DOUBTED BY THE AO. THE AO HAS ESTIMATED SUCH INCOME AT RS.3,000/- PER ACRE PER YEAR WHEREAS THE ASS ESSEE HAS ESTIMATED THE SAME BY RS.8,500/- PER ACRE PER YEAR . ACCORDING TO THE CIT(A) AGRICULTURAL INCOME SHOWN BY THE ASSESSEE IS QUITE REASONABLE AND SHOULD HAVE BEEN ACCEP TED BY THE AO EVEN THOUGH THERE ARE NO RECORDS OF RECEIPTS A BOUT THE RECEIPTS/EXPENDITURE OF THE AGRICULTURAL ACTIVITIES. CONSIDE RING THE SIZE OF THE LAND HOLDING AND OTHER EVIDENCES FURNISHED BY THE ASSESSEE BEFORE HIM HE HELD THAT THE AGRICULTURAL INCOME O FFERED BY THE ASSESSEE IS REASONABLE AND THEREFORE HE DIRECTED THE AO TO ADOPT THE SAME. 47 52. AS REGARDS THE ADDITION OF RS.13,24,000/- BY THE AO O N ACCOUNT OF POLICE COMMISSIONER LAND IS CONCERNED, HE DIRECTE D THE AO TO DELETE THE SAME. WHILE DOING SO, HE OBSERVED T HAT THE AO HAS CONSIDERED THE AMOUNT OF RS.13,24,000/- BASED ON THE ENTRIES IN THE SAID SEIZED DOCUMENT. ACCORDING TO HIM ALTH OUGH THE SEIZURE OF THE SAID DOCUMENT WAS FROM THE PREMISES OF THE ASSESSEE, HOWEVER, THE PRESUMPTION U/S.132(4) IS A REBUTTA BLE ONE. THE ASSESSEE HAD RETRACTED THE ORIGINAL STATEMENT GIVEN BY HIM BY AN AFFIDAVIT DATED 21-08-2003. NO FURTHER ENQUIRY W AS CONDUCTED IN THIS REGARD TO FIND OUT THE VERACITY OF THE CONTENTION OF THE ASSESSEE. HE OBSERVED THAT THE ASSE SSEE WAS CROSS EXAMINED IN CONNECTED CASES AND HIS AFFIDAVIT COULD N OT BE PROVED AS FALSE. THERE IS NO OTHER SUPPORTING MATERIAL AV AILABLE ON RECORD THAT THE ASSESSEE HAS ACTUALLY PAID THE SAID AMOUNTS AS PER THE SEIZED DOCUMENTS. FOLLOWING HIS DECISION IN THE CASE OF SHRI SHASHIKANT PUNDLIK WANI AND IN THE CASE OF THAKKAR DEVELOPERS LTD. UNDER SIMILAR FACTS THE LD.CIT(A) DIRECTED TH E AO TO DELETE THE ADDITION OF RS.13,24,000/-. HE ALSO DELETED T HE ADDITION OF RS.71,000/- ON ACCOUNT OF UNDISCLOSED SALARY FOR WHICH THE REVENUE IS NOT IN APPEAL BEFORE US. HE HOWEVE R SUSTAINED ADDITION OF RS.3,61,260/- WHICH WAS NOT PRESSED BEFORE HIM. THEREFORE, WE ARE NOT CONCERNED WITH THE A BOVE 2 ITEMS. 53. AGGRIEVED WITH SUCH PART RELIEF GIVEN BY THE LD.CIT(A) TH E REVENUE AS WELL AS THE ASSESSEE ARE IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 48 GROUNDS BY REVENUE : 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A)-I, NASHIK IS JUSTIFIED IN HOLDING THAT THE REJECTION OF THE CASH FLOW STATEMENT BY THE A.O. DURING THE BLOCK ASSESSME NT PROCEEDINGS FOR THE REASON THAT THE SAME HAS NOT BEEN SUBSTANTIATED/SUPPORTED BY CONTEMPORANEOUS EVIDENCE, IS NOT IN ORDER? 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A)-I, NASHIK WAS JUSTIFIED IN HOLDING THAT THE AGRICULTURAL INCOME SHOWN BY THE ASSESSEE IS REASONABLE WHEN NO PROPER EVIDENCE WAS FILED DURING THE BOCK ASSESSMENT PROCEEDING S, TO SUPPORT THE SAME? 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD.CIT(A)-I, NASHIK WAS JUSTIFIED IN HOLDING THE ADDIT ION OF RS.13,24,000/- MADE BY THE A.O. ON ACCOUNT OF THE ASSE SSEE'S UNDISCLOSED INVESTMENT IN LAND IS NOT IN ORDER, EVEN T HOUGH THE ASSESSEE HIMSELF HAD ADMITTED SUCH INVESTMENT? 4. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD.CIT(A)-I, NASHIK WAS JUSTIFIED IN HOLDING THAT THE RETRACTION MADE BY THE ASSESSEE IN RESPECT OF THE UNDISCLOSED INVESTME NT IN LAND AT RS. 13,24,000/- IS IN ORDER, IGNORING THE FAC T THAT THE SAME WAS AN AFTERTHOUGHT AND AGAINST THE ASSESSEE'S OWN ADMITTA NCE OF THE FACTS? 5. THE APPELLANT PRAYS THE ORDER OF THE ASSESSING OFFI CER MAY BE RESTORED. 6. THE APPELLANT PRAYS TO ADDUCE SUCH FURTHER EVIDEN CE TO SUBSTANTIATE HIS CASE. 7. THE APPELLANT PRAYS LEAVE TO ADD, ALTER, CLARIFY , AMEND AND OR WITHDRAW ANY GROUNDS OF APPEAL AS AND WHEN THE OCCAS ION DEMANDS. GROUNDS BY ASSESSEE : 1. ON THE BASIS OF FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND AS PER THE PROVISIONS OF LAW, THE COMMISSIONER OF INCOME TAX, (APPEALS)-II, NASHIK IS NOT JUSTIFIED IN NOT GRANTING T HE SET OFF OF THE FUNDS RECEIVED FROM BARKU KOLHE HUF & KARBHARI KOLHE HUF WHILE CALCULATING THE PEAK SHORTAGE IN THE CASH FLOW STATEME NT. 2. ON THE BASIS OF FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND AS PER THE PROVISIONS OF LAW, THE COMMISSIONER OF INCOME TAX, (APPEALS)-II, NASHIK IS NOT JUSTIFIED IN HOLDING THAT T HE ASSESSED INCOME U/S. 158BC OF THE ACT SHALL NOT BE LESS THAN THE RETURNED INCOME BY THE ASSESSEE. 3. ON THE BASIS OF FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND AS PER THE PROVISIONS OF LAW, THE COMMISSIONER OF INCOME TAX, (APPEALS)-II, NASHIK IS NOT JUSTIFIED IN CONFIRMING THE LEVY OF THE INTEREST CHARGED U/S. 158BFA(1) OF THE ACT. 49 4. THE APPELLANT CRAVES FOR ALTERATION, MODIFICATIO N, DELETION OR ADDITION TO THE ANY OF THE ABOVE GROUNDS OF APPEALS. 54. THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY OPPOSE D THE ORDER OF THE CIT(A). SO FAR AS THE ORDER OF THE CIT(A) ON THE ISSUE OF PEAK OF UNEXPLAINED EXPENDITURE OF RS.78,26,577/- IS CONCERNED THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE CIT(A) HAS GIVEN SET OFF OF RS.14,13,500/- ON ACCOUNT O F AGRICULTURAL INCOME. SHE SUBMITTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE COULD NOT SUBSTAN TIATE THE AGRICULTURAL INCOME BY PRODUCING ANY CONTEMPORANEOUS EVIDENCE. AS REGARDS THE AMOUNT STATED TO BE RECEIVED BY THE ASSESSEE FROM VARIOUS PERSONS, THE CIT(A) ONLY ON THE B ASIS OF CONFIRMATION LETTERS AND COPIES OF THEIR BANK ACCOUNTS CAM E TO THE CONCLUSION THAT NECESSARY SET OFF HAS TO BE GIVEN TO THE ASSESSEE. HOWEVER, THE FACT REMAINS THAT THE ASSESSEE, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, COULD NOT SUBSTAN TIATE THE CREDITS APPEARING IN THE CASH FLOW STATEMENT. SHE SU BMITTED THAT THE ESTIMATION OF AGRICULTURAL INCOME MADE BY THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS IS ON A FAIR ESTIMATE CONSIDERING THE LAND HOLDINGS OF THE ASSESSEE. F URTHER, DURING THE BLOCK PERIOD THE ASSESSEE HAD RAISED SUBSTA NTIAL LOANS FROM BANKS WHICH THE AO HAS INCORPORATED IN THE BO DY OF THE ASSESSMENT ORDER. HAD HE OWNED THAT MUCH OF CASH , THERE WAS NO NECESSITY FOR RAISING SUCH HUGE LOANS. THEREFORE, T HE ORDER OF THE LD.CIT(A) IN ACCEPTING CASH FLOW STATEMENT FILED BY THE ASSESSEE IS NOT UNJUSTIFIED AND DESERVES TO BE REJECTED. 55. SO FAR AS THE DELETION OF ADDITION OF RS.13,24,000/- MAD E BY THE AO ON ACCOUNT OF UNEXPLAINED PAYMENT ON ACCOUNT OF 50 POLICE COMMISSIONER LAND IS CONCERNED, THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE EVIDENCE WAS FOUND FRO M THE PREMISES OF THE ASSESSEE IN RESPECT OF THE TRANSACTION O F THE ASSESSEE AND OTHER PERSONS. IN THE SUBSEQUENT PROCE EDINGS AFTER SEARCH THE ASSESSEE HIMSELF HAD DECODIFIED THE EXPEN SES. THE TRANSACTIONS ARE CATEGORICALLY DECODED AS UNDISCLOSE D INVESTMENT ON HIS PART AMOUNTING TO RS.13,24,000/-. THE RETRACTION OF THE ASSESSEE AFTER A LONG GAP BY AN AFFIDAVIT IS ONLY A SELF SERVING DOCUMENT TO GET AWAY FROM THE TAX NET ON THE AMOUNT OF RS.13,24,000/- WHICH WAS CATEGORICALLY ADMITTED A S UNDISCLOSED INCOME. HE SUBMITTED THAT THE AO HAS CORREC TLY APPLIED THE RULE OF PREPONDERANCE OF PROBABILITY. 56. AS REGARDS THE OBSERVATION OF LD.CIT(A) THAT IDENTICAL IS SUE HAD BEEN DECIDED IN THE CASE OF SHRI SHASHIKANT P. WANI A ND THAKKAR DEVELOPERS IS CONCERNED, THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ORDER IN THE CASE OF SHRI SHASHIKANT P. WANI WAS DISMISSED BY THE TRIBUNAL ON ACCOUN T OF TECHNICAL ISSUE, I.E. IN ABSENCE OF NOTICE U/S.143(2) SERVE D ON THE ASSESSEE WITHIN THE PRESCRIBED LIMIT, THE BLOCK ASSESS MENT FRAMED U/S.158BC OF THE ACT WAS HELD AS NOT VALID. SIMILARLY , IN THE CASE OF THAKKAR DEVELOPERS IT WAS AN ASSESSMENT U/S.158BD, THEREFORE, THESE CASES CANNOT BE EQUATED WITH THAT OF THE ASSESSEE. SHE SUBMITTED THAT THE PRESUMPTIONS U NDER SECTION 132(4) IS APPLICABLE TO THE FACTS OF THE CASE. THE DOCUMENT WAS SEIZED FROM THE ASSESSEES PREMISES. HE H AS DECODED THE NAMES AND AMOUNTS. THE ASSESSEE HAS PAID THE AMOUNT AS PER THE HANDWRITTEN NOTES AFTER THE TYPED COPY. SINCE THE AMOUNT IS NOT FIGURING IN THE CASH FLOW STATEMENT, THER EFORE, 51 THE SAME WAS RIGHTLY ADDED BY THE AO SEPARATELY SHE SUBMITTED THAT THE PROPERTIES ARE IDENTIFIABLE. THE CONSORTIUM OF 5-6 PERSONS HAD BIDDED FOR THE PROPERTY AND THERE IS FULL AUTHENTICITY IN THE DOCUMENT. THE REGISTRATION AND STAM P DUTY EXPENSES MATCH WITH THE DOCUMENT FOUND AND SEIZED. THEREFORE, IT CANNOT BE SAID THAT THE ASSESSEE HAS NOT PAID HIS SH ARE OF 2 INSTALMENTS TOTALING TO RS.13,24,000/- 57. REFERRING TO THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF HIRALAL MAGANLAL CO. VS. DCIT REPORTED IN 96 ITD 113 SHE SUBMITTED THAT THE TRIBUNAL IN THE SAID D ECISION HAS HELD THAT ASSESSEE HAVING MADE A VOLUNTARY DECLARAT ION ON OATH AND INDUCED DEPARTMENTAL AUTHORITIES TO ACT UPON T HE SAME AT THE TIME OF SEARCH, CANNOT BE PERMITTED TO TURN AROU ND LATER AND DENY TRUTH OF SAID DECLARATION OR REPRESENTATION MA DE THEREIN. 58. REFERRING TO THE DECISION OF HONBLE CHHATTISGARH HIGH COURT IN THE CASE OF ACIT VS. HUKUMCHAND JAIN REPORTED IN 337 ITR 238 THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED T HAT THE HONBLE HIGH COURT IN THE SAID DECISION HAS HELD THAT WHEN ADDITION WAS BASED ON CONFESSIONAL STATEMENT OF THE ASSES SEE AND THE ASSESSEE DID NOT RETRACT HIS STATEMENT IMMEDIAT ELY AFTER SEARCH AND SEIZURE OPERATIONS U/S.132(4) IT COULD BE SAID T HAT ASSESSEE HAD FAILED TO DISCHARGE ONUS ON PROVING THAT CO NFESSION MADE BY HIM U/S.132(4) WAS AS A RESULT OF INTIMIDATION, DURESS , COERCION OR THAT SAME WAS MADE AS A RESULT OF MISTAKEN BELIEF OF LAW OR FACTS. THEREFORE, THE AO WAS FULLY JUSTIFIED IN ASSESS ING INCOME OF THE ASSESSEE ON BASIS OF SEARCH ON UNDISCLOSED INCOME MADE U/S.132(4). 52 59. REFERRING TO THE DECISION OF THE PUNE BENCH OF THE TR IBUNAL IN THE CASE OF HOTEL KIRAN VS. DCIT REPORTED IN 82 ITD 45 3 SHE SUBMITTED THAT WHERE STATEMENT U/S.132(4) WAS VOLUNTARIL Y MADE AND THERE WAS NO COERCION OR THREAT WHATSOEVER AND CONTENTS OF STATEMENT WERE CLEAR AND UNAMBIGUOUS SAME WOULD BE BINDING ON THE ASSESSEE EVEN IF IT WAS SUBSEQUENTLY RETRACTED . 60. REFERRING TO THE DECISION OF THE HONBLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF CIT VS. LEKH RAJ DHUN NA REPORTED IN 344 ITR 352 SHE SUBMITTED THAT WHERE DURIN G SEARCH OPERATION CERTAIN SALE DOCUMENTS WERE SEIZED WHICH BORE SIGNATURES OF ASSESSEE AND SAID DOCUMENTS DEPICTED TOTA L SALES ON WHICH ASSESSEE EARNED COMMISSION AND ASSESSEE IN HIS STATEMENT MADE U/S.132(4) HAD ADMITTED OF GETTING SAID COMMISSION, THE AO WAS JUSTIFIED IN DRAWING THE PRESUMPTION AGAINST THE ASSESSEE U/S.132(4) AND 132(4A) AND MAKING ADDITION ON ACCOUNT OF COMMISSION RECEIVED BY THE ASSESSEE. 61. SHE ALSO RELIED ON THE DECISION OF THE AHMEDABAD BENCH OF THE TRIBUNAL IN THE CASE OF KANTILAL SHAH VS. ACIT REPORTE D IN 14 TAXMANN.COM 108. 62. SHE SUBMITTED THAT THE AFFIDAVIT FILED BY THE ASSESSEE RETRACTING THE STATEMENT WAS NEVER REGISTERED BEFORE A NY COMPETENT AUTHORITY AND WAS AFTER A LONG GAP OF ALMOST 5 MONTHS. THEREFORE, IT HAS NO EVIDENTIARY VALUE IN THE EYES OF THE LAW ONCE IT IS NOT PROPER. FOR THE ABOVE PROPOSITION, SH E RELIED ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF A.K. NAMBIAR VS. UNION OF INDIA REPORTED IN 1970 AIR 652 AT PA GE 654. SO FAR AS THE ARGUMENT OF THE ASSESSEE BEFORE CIT (A) THAT 53 WITHOUT UNDERSTANDING WHAT IS WRITTEN IN ENGLISH THE ASSE SSEE HAS SIGNED THE SAME, SHE SUBMITTED THAT SHRI BALASAHEB B ARKU KOLHE HAS SIGNED IN ENGLISH. RETRACTION IN THE AFFIDAVIT IS IN ENGLISH. HOWEVER, HE SAYS THAT DUE TO LACK OF KNOWLEDGE IN ENGLISH HE HAS SIGNED WITHOUT UNDERSTANDING THE SAME. THEREFORE, SUCH RETRACTION CANNOT BE BELIEVED DUE TO THE SE ANOMALIES. ALL THESE THINGS EMANATE FROM THE FOLDER OF SHRI NEMICHAND L. PODDAR. 63. THE LD. COUNSEL FOR THE ASSESSEE ON THE OTHER HAND WHILE SUPPORTING THE ORDER OF THE CIT(A) SUBMITTED THAT THE A SSESSEE BELONGS TO A AGRICULTURAL FAMILY WHO OWNS AROUND 100 AC RES OF CULTIVATED LAND. THEY HAVE RECEIVED AGRICULTURAL INCOME. TH E ASSESSEE WAS ENGAGED IN THE BUSINESS ACTIVITY IN LAND AND LAND DEVELOPMENT WHICH WAS FOUND DURING THE COURSE OF SEARCH. SHE SUBMITTED THAT THE INCOME OF THE WHOLE FAMILY WAS USED FOR BUSINESS ACTIVITY. ADMITTEDLY, NO BOOKS OF ACCOUNTS WERE MAINTAINED AND RETURNS WERE FILED. SHE FURTHER SUBMITTED T HAT NO LAND DEAL HAS CRYSTALLIZED AND ONLY INVESTMENTS WERE M ADE. DURING THE COURSE OF SEARCH THE ASSESSEE IN HIS STATEM ENT RECORDED U/S.132(4) ON 25-03-2003 HAS DECLARED UNDISCLOSE D INCOME OF RS.85 LAKHS. REFERRING TO PAGES 161 AND 162 OF T HE PAPER BOOK SHE SUBMITTED THAT THE ASSESSEE HOWEVER W HILE FILING THE BLOCK RETURN HAS DISCLOSED UNDISCLOSED INCOME OF RS.67,50,000/- ONLY STATING CONTINGENCIES, ERRORS AND OMISS IONS. SHE SUBMITTED THAT THE DECLARATION MADE DURING THE SEAR CH WAS ON ADHOC BASIS SINCE NO BOOKS OF ACCOUNTS WERE MAINTAIN ED. THE ASSESSEE COMPLETED THE WRITING OF THE BOOKS ON TH E BASIS OF THE SEIZED MATERIAL. THE AO ALSO PROCEEDS TO VERIFY THE 54 INVESTMENTS AND THE SOURCES THEREOF ON THE SAID MATER IAL. SHE SUBMITTED THAT SOURCE FOR INVESTMENT IN LAND WAS FROM FAM ILY FUNDS WHICH HAS BEEN REJECTED BY THE AO WITHOUT CONSIDE RING THE EXPLANATION GIVEN BY THE ASSESSEE. SHE SUBMITTED T HAT THE ASSESSEE HAS GIVEN THE BANK STATEMENT AND CONFIRMATIONS OF THE FAMILY MEMBERS TO EXPLAIN THE SOURCE. THE AO HAS SIMPLY ESTIMATED THE AGRICULTURAL INCOME. ALTHOUGH THE BASIC FACT OF EARNING OF AGRICULTURAL INCOME HAS NOT BEEN DISPUTED, HOWEV ER, THE AO DRASTICALLY REDUCED THE AGRICULTURAL INCOME OF THE FAMILY. FURTHER, ALTHOUGH THE ASSESSEE HAS GIVEN THE BANK STAT EMENTS AND CONFIRMATIONS OF VARIOUS FAMILY MEMBERS, THE AO HAS NOT ACCEPTED THE SAME. SHE ACCORDINGLY SUBMITTED THAT AN OPPORTUNITY MAY BE GIVEN TO SUBSTANTIATE HER CASE. 64. SO FAR AS THE ADDITION OF RS.13,24,000/- IS CONCERNED WHICH HAS BEEN DELETED BY THE CIT(A) SHE SUBMITTED THAT THE IN LAST PAGE OF THE PAPER BOOK FILED BY THE LD. DEPARTMENTAL REPRESENTATIVE, THE TOTAL AMOUNT MENTIONED IS RS.2,86,16,038 /- OUT OF WHICH THE AMOUNT BELONGING TO THE ASSESSEE IS RS.14,18,257/- ONLY TOWARDS THE FIRST INSTALLMENT. SHE SUBMITTED THAT IN THE CASE OF THAKKAR DEVELOPERS LTD. T HE TRIBUNAL HAS ALREADY HELD THAT THE SAME IS A DUMB DOCUME NT AND THE PRESUMPTION U/S.132(4) IS REBUTTABLE. SINCE NO CORROBORATIVE EVIDENCE WAS FOUND THAT THE ASSESSEE HAS PAID THE MONEY AND SINCE THE ASSESSEE WAS DENYING FROM THE VERY BEGINNING THAT HE HAS NOT PAID ANY MONEY AND IT WAS ONL Y A PROPOSAL, THEREFORE, THE ABOVE ADDITION WAS RIGHTLY DELETED BY THE CIT(A). SHE ACCORDINGLY SUBMITTED THAT THE ORDER OF TH E CIT(A) BE UPHELD. 55 65. THE LD. DEPARTMENTAL REPRESENTATIVE IN HER REJOINDER SUBMITTED THAT THE ISSUE OF HOLDING OF ABOUT 100 ACRES O F LAND WAS NEVER RAISED BY THE ASSESSEE. REFERRING TO PAGES 1 5 AND 16 OF THE ORDER OF THE CIT(A) THE LD. DEPARTMENTAL REPRESENT ATIVE DREW THE ATTENTION OF THE BENCH TO THE REMAND REPORT OF THE AO. FURTHER, WHEN THE ASSESSEE WAS SHOWING A CASH BALANCE OF RS.1,26,93,915/- AS ON 25-03-2003 AND THE ACTUAL CASH FOU ND WAS ONLY RS.26,170/-, THEREFORE, THERE IS NO SANCTITY OF TH E CASH FLOW STATEMENT FILED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS TO SUBSTANTIATE THE VARIOUS INVESTMENT S. SHE SUBMITTED THAT IT IS AN ADMITTED FACT THAT THE ASSES SEE WAS NOT MAINTAINING ANY BOOKS OF ACCOUNT NOR HAS FILED ANY RET URN OF INCOME PRIOR TO THE SEARCH. FURTHER, THE LD.CIT(A) HAS GIV EN RELIEF IN SUCH A MANNER THAT THE ORDER AFTER GIVING EFFECT T O THE ORDER OF THE CIT(A) BECOMES LESS THAN THE RETURNED INCOM E. REFERRING TO THE ORDER OF THE CIT(A) AT PAGE 6 SHE SUBMIT TED THAT THE TWO HUFS HAVE GIVEN AN AMOUNT OF RS.1,02,22,300/- TO THE ASSESSEE. THE AO HAS GIVEN JUSTIFICATION FOR NON ACCEPTA NCE OF THE VARIOUS LOANS FROM FAMILY MEMBERS AS WELL AS THE HUF. SHE ACCORDINGLY SUBMITTED THAT THE ORDER OF THE AO BE RESTORED. 66. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND TH E CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HA VE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. IT IS AN ADMITTED FACT THAT THE ASSESSEE IN THE INSTANT CASE WAS NOT MAINTAINING ANY BOOKS OF ACCOUNTS NOR HAS FILED ANY RETURN OF INCOME PRIOR TO THE DATE OF SEARCH ON 25-03-2003. WE FIN D THE ASSESSEE DURING THE COURSE OF SEARCH PROCEEDINGS IN HIS 56 STATEMENT U/S.132(4) HAS DECLARED UNDISCLOSED INCOME OF RS.8 5 LAKHS. HOWEVER, IN THE RETURN FILED IN RESPONSE TO NOTICE U/S.158BC HE DECLARED UNDISCLOSED INCOME OF RS.67,50,000/-. THE AO WHILE COMPLETING THE ASSESSMENT DETERMINED SUCH UNDISCLOSED INCOME AT RS.96,52,837/- BY MAKING THE FOLLOWING ADDITIONS : SR.NO PARA NO DESCRIPTION AMOUNT (RS) 1 10.11 PEAK OF UNEXPLAINED EXPENDITURE 7896577 2 11.5 UNEXPLAINED PAYMENT ON ACCOUNT OF POLICE COMMISSIONER LAND 1324000 3 12.1 UNDISCLOSED SALARY INCOME 71000 4 13.1 UNEXPLAINED INVESTMENTS IN RESIDENTIAL HOUSE 361260 TOTAL UNDISCLOSED INCOME 9652837 67. WE FIND BEFORE THE CIT(A) THE ASSESSEE DID NOT PRESS T HE ADDITION RELATING TO RS.3,61,260/-. THE ADDITION ON ACCOUNT OF SALARY INCOME OF RS.71,000/- HAS BEEN DELETED BY THE CIT (A) AND THE REVENUE IS NOT IN APPEAL BEFORE US. THEREFORE, THE IS SUES THAT REMAIN TO BE ADJUDICATED ARE THE ADDITION OF RS.13,24 ,000/- ON ACCOUNT OF UNEXPLAINED PAYMENT FOR THE POLICE COMMISSION ER LAND AND THE PEAK UNEXPLAINED EXPENDITURE OF RS.78,96,577/- 68. SO FAR AS THE UNEXPLAINED PAYMENT ON ACCOUNT OF POLICE COMMISSIONER LAND AMOUNTING TO RS.13,24,000/- IS CONCERNED WE FIND THE SAME WAS ADDED BY THE AO ON THE BASIS OF TH E PAPER FOUND FROM THE RESIDENCE OF THE ASSESSEE AS MENTIONED E ARLIER. DURING THE COURSE OF SEARCH THE TYPED STATEMENT AS PE R PAGE 18 OF ANNEXURE 32 WAS SEIZED FROM THE ASSESSEES OFFICE PREM ISES. IN HIS STATEMENT RECORDED ON 29-03-2003 THE ASSESSEE HAS STATED THAT THIS PAGE IS IN RESPECT OF THE DEAL OF LAND O F NASHIK 57 DIOCESAN COUNCIL FOR WHICH A GROUP OF LAND DEVELOPERS OF N ASHIK HAD INVESTED JOINTLY AND IN THAT DEAL THE ASSESSEE SHRI BALASAHEB BARKU KOLHE WAS ALSO ONE OF THE INVESTOR. THE PROPERTIES WERE KNOWN AS SHARANPUR MALA AND POLICE COMMISSIONER PROPERTY. AS PER THE NOTINGS MADE IN HAND WRITING IN MARATHI IN COLUMN NO.3 AND 4 IT WAS FOUND THAT THE AMOUNTS IN RESPECT OF TWO INSTALLMENTS HAVE BEEN PAID BEFO RE THE DATE ON WHICH THE TYPED PAGE 18 WAS PREPARED BY THE PARTIES. THE SHARE OF THE ASSESSEE IS RS.9,24,000/- BEING THE FIRST INSTALLMENT AND RS.4 LAKHS BEING THE SECOND INSTALLMENT THUS TOTALING TO RS.13,24,000/-. SINCE THE ASSESSEE COULD NOT EXPLAIN THE SOURCE OF THIS AMOUNT AND DID NOT CONSIDER TH E SAME IN THE CASH FLOW STATEMENT THE AO MADE A SEPARATE ADDIT ION OF RS.13,24,000/-. IT IS AN ADMITTED FACT THAT THE ASSESSEE WAS NOT ONE OF THE PURCHASERS OF THE PROPERTY AS PER THE FINAL C ONVEYANCE DEED DATED 13-03-2000. 69. WE FIND AN IDENTICAL ISSUE HAD COME UP BEFORE THE TRIBUNAL IN THE CASE OF M/S. THAKKAR DEVELOPERS LTD. WHOSE NAME ALSO APPEARS IN THE SAID DOCUMENT SEIZED AS PER P AGE 18 OF BUNDLE NO.32 FROM THE PREMISES OF SHRI BALASAHEB BARKU KOLH E. THE ASSESSING OFFICER MADE ADDITION ON THE BASIS OF THE SEIZ ED DOCUMENT WHICH CONTAIN THE BREAK-UP OF EXPENDITURE IN RE SPECT OF THE PROPERTIES OF SHARANPUR MALA LAND AND THE POLICE COMMISSIONER LAND. IN APPEAL THE LD.CIT(A) DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. ON FURTHER APPEAL B Y THE REVENUE THE TRIBUNAL DISMISSED THE APPEAL FILED BY THE REVENUE HOLDING THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED BOTH ON FACTS AND LAW IN MAKING THE ADDITION OF RS.30,42,160/- AS 58 UNDISCLOSED INCOME FROM THE BLOCK PERIOD RELYING ON THE DOCUMENT FOUND AND SEIZED FROM SHRI BALASAHEB BARKU KOLH E WHO IS A THIRD PARTY. THE RELEVANT OBSERVATION OF THE TR IBUNAL HAS ALREADY BEEN REPRODUCED AT PARA 12 OF THIS ORDER. 70. SINCE THE ADDITION HAS BEEN MADE ON THE BASIS PAGE 1 8 OF BUNDLE NO.32 SEIZED FROM THE RESIDENCE OF THE ASSESSEE WH ICH CONTAINS DIFFERENT NAMES INCLUDING THE NAME OF THE ASSESSEE AND THAT OF M/S. THAKKAR DEVELOPERS LTD. AND SINCE THE TRIB UNAL IN THE CASE OF M/S. THAKKAR DEVELOPERS LTD. (SUPRA) HAS HELD THAT IN ABSENCE OF ANY CORROBORATIVE EVIDENCE THE SAID SEIZED DOCUMENT HAS TO BE TREATED AS DUMB DOCUMENT AND SINC E IN THE PRECEDING 3 APPEALS WE HAVE ALREADY DISMISSED THE APPEA L FILED BY THE REVENUE WHEREIN THE CIT(A) HAS DELETED SUCH ADDIT IONS WHICH WERE MADE BASED ON THE SAID SEIZED DOCUMENT, THER EFORE, IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT TO OUR NOTIC E BY THE REVENUE WE ARE UNABLE TO TAKE A DIFFERENT VIEW THAN THE VIEW TAKEN BY THE TRIBUNAL IN THE CASE OF M/S. THAKKAR DEVE LOPERS LTD. (SUPRA). ALTHOUGH THE PAPER WAS FOUND FROM THE RE SIDENCE OF THE ASSESSEE DURING THE SEARCH AND IN VIEW OF PROVISION S OF SECTION 132(4A) SUCH DOCUMENT MAY BE PRESUMED AS TRUE, HOWEVER, THE TRIBUNAL HAS ALREADY GIVEN A FINDING IN THE CAS E OF THAKKAR DEVELOPERS LTD., (SUPRA) THAT SUCH PRESUMPTION U/S.132(4A) OF THE ACT IS NOT CONCLUSIVE AND REBUTTABLE ON E. FURTHER, WE FIND THE SAID SEIZED DOCUMENT CONTAINS 7 NAME S AND ADDITIONS WERE MADE IN THE HANDS OF THE 7 PERSONS, WHO HAD INVESTED IN THE SAID LAND. IN 3 CASES THE APPEALS FILED BY THE REVENUE WERE DISMISSED ON TECHNICAL GROUNDS. IN THE CA SE OF THAKKAR DEVELOPERS LTD.(SUPRA) THE TRIBUNAL DISMISSED THE 59 APPEAL FILED BY THE REVENUE, THE DETAILS OF WHICH ARE ALREAD Y REPRODUCED EARLIER. WHEN THE SAID SEIZED DOCUMENT WAS H ELD BY THE TRIBUNAL AS A DUMB DOCUMENT, THEREFORE, IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT TO OUR NOTICE THE ORDER OF T HE LD.CIT(A) HAS TO BE UPHELD. IN THIS VIEW OF THE MATTER AN D IN VIEW OF THE DETAILED REASONINGS GIVEN BY LD. CIT(A) WE FIND NO INFIRMITY IN THE SAME. THE ORDER OF LD.CIT(A) ON THIS ISSUE IS THUS UPHELD AND THE GROUNDS RAISED BY THE REVENUE ON THIS ISSUE ARE DISMISSED. 71. SO FAR AS THE ORDER OF THE AO MAKING ADDITION OF RS.78,96,577/- ON THE BASIS OF THE CASH FLOW STATEMENT IS CONCERNED WE FIND ADMITTEDLY NO BOOKS OF ACCOUNTS WERE MAINTAINED PRIOR TO THE DATE OF SEARCH. THE ASSESSEE HA S PREPARED THE BOOKS OF ACCOUNTS SUBSEQUENT TO THE SEA RCH. IT IS ALSO AN UNDISPUTED FACT THAT AS AGAINST CASH BALANCE OF RS.1,26,93,915/- ON THE DATE OF SEARCH AS PER THE CASH FLO W STATEMENT PREPARED BY THE ASSESSEE THE ACTUAL CASH FOUND ON TH E DATE OF SEARCH WAS ONLY RS.26,170/-. NO EXPLANATION WHAT SOEVER HAS BEEN GIVEN BY THE ASSESSEE REGARDING THE DISCREPAN CIES. THE MAJOR DISPUTE IS REGARDING THE NON CONSIDERATION OF AMOUN TS RECEIVED FROM THE TWO HUFS AS PER THE GROUNDS OF APPEA L FILED BY THE ASSESSEE. THE GRIEVANCE OF THE REVENUE IS REGARDING THE ACCEPTANCE OF THE AGRICULTURAL INCOME BY THE CIT(A) AS WELL AS THE VARIOUS AMOUNTS RECEIVED FROM DIFFERENT FAMILY MEMBERS FROM WHOM THE ASSESSEE CLAIMED TO HAVE RECEIVED MONEY A ND WHOSE CONFIRMATION LETTERS WERE FILED. 72. SO FAR AS THE AGRICULTURAL INCOME OF THE ASSESSEE IS CONCERNED WE FIND THE AO HAS WORKED OUT APPROXIMATELY 60 RS.3,000/- PER ACRE PER YEAR WHEREAS THE ASSESSEE HAS ESTIMA TED THE SAME AT RS.8,500/- PER ACRE PER YEAR WHICH THE CIT (A) HAS ACCEPTED. WE FIND THE AGRICULTURAL INCOME FOR THE BLOCK PER IOD SHOWN BY THE ASSESSEE AT RS.12,67,800/- WAS REJECTED B Y THE AO WHO TOOK THE SAME AT RS.4,00,000/-. SINCE THE ASSESSEE WAS NOT MAINTAINING ANY BOOKS OF ACCOUNTS FOR AGRICULTURAL ACTIVITY A ND NO COMPLETE DETAILS WERE AVAILABLE REGARDING THE INCOME AND EXPENDITURE FROM AGRICULTURAL ACTIVITY, THEREFORE, THE ESTIMAT ION BY THE ASSESSEE AT RS.8,500/- PER ACRE PER YEAR WHICH HAS BEEN ACCEPTED BY THE CIT(A) CANNOT BE ACCEPTED. SIMILARLY, TH E ESTIMATION BY THE AO AT RS.3,000/- PER ACRE PER YEAR AP PEARS TO BE ON THE LOWER SIDE. CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE, WE DIRECT THE AO TO CONSIDER THE AGRICULTURAL INCOME OF THE ASSESSEE FOR THE BLOCK PERIOD AT RS.10,00,000/- FOR COMPU TING THE PEAK INVESTMENT. 73. SO FAR AS THE ORDER OF THE CIT(A) IN DIRECTING THE AO T O GIVE SET OFF OF RS.14,13,500/- BEING THE LOAN OBTAINED FROM DIFFERE NT PERSONS FOR WHICH THE ASSESSEE HAS FILED THE CONFIRMATION L ETTERS ALONG WITH BANK PASSBOOKS OF THE 8 PERSONS (AS PER PAGE 16 AND 17 OF THE ORDER OF THE CIT(A), WE FIND ACCORDING TO LD.CIT(A ) THE AO SHOULD HAVE ATLEAST CONSIDERED WHEREVER SOME SOURCE IS EXPLAINED WITH NECESSARY EVIDENCE. WE FIND THE LD.CIT(A) WITHOUT VERIFYING THE CREDIT WORTHINESS OF THE PERSONS AC CEPTED THE CONTENTION OF THE ASSESSEE AND DIRECTED THE AO TO GIVE CREDIT OF RS.14,13,500/- BEING LOAN OBTAINED FROM VARIOUS PERSONS. SINCE IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESS EE THAT GIVEN AN OPPORTUNITY SHE WILL SUBSTANTIATE THE SAME, THEREFORE, WE DEEM IT PROPER TO RESTORE THIS ISSUE TO T HE FILE OF THE 61 AO WITH A DIRECTION TO EXAMINE THE CONFIRMATIONS AND BANK STATEMENTS OF THE 8 PERSONS TO FIND OUT THEIR CREDIT WOR THINESS AND IF SATISFIED GIVE APPROPRIATE RELIEF AS PER LAW. GROUND R AISED BY THE REVENUE ON THIS ISSUE IS ACCORDINGLY ALLOWED FOR ST ATISTICAL PURPOSES. 74. SO FAR AS GROUND OF APPEAL NO.1 BY THE ASSESSEE IS CONCERNED, IT IS THE GRIEVANCE OF THE ASSESSEE THAT THE CIT(A) HAS NOT GRANTED THE SET OFF OF FUNDS RECEIVED FROM SHRI BALASAH EB BARKU KOLHE, (HUF) AND SHRI KARBHARI KOLHE (HUF) WHILE CALCULATING THE PEAK SHORTAGE IN CASH FLOW STATEMENT. WE FIND BEFORE THE CIT(A) THE ASSESSEE HAS SUBMITTED THAT HE HA S RECEIVED AN AMOUNT OF RS.72,62,150/- FROM SHRI BALASAHEB BARKU KOLHE, (HUF) AND RS.29,60,150/- FROM SHRI KARBHARI KOLHE (HUF). HOWEVER, IT IS A FACT THAT NO DETAILS WERE FILED BEFORE THE CIT(A) GIVING THE DETAILS OF BANK STATEMENT AND LAND HOLDINGS OF THE TWO HUFS. IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT GIVEN AN OPPORTUNITY SHE CAN SUBSTANTIATE THE INCOME OF THE ABOVE 2 HUFS. CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE AND IN THE INTEREST OF JU STICE, WE DEEM IT PROPER TO RESTORE THIS ISSUE TO THE FILE OF THE AO WITH A DIRECTION TO GIVE AN OPPORTUNITY TO THE ASSESSEE TO SUB STANTIATE THE EXISTENCE OF THE TWO HUFS, THEIR BANK ACCOUNTS AN D AGRICULTURAL LAND HOLDING ETC. IF THE ASSESSEE CAN SUBSTAN TIATE WITH EVIDENCE TO THE SATISFACTION OF THE AO REGARDING THE AVAILABILITY OF FUNDS BY THE 2 HUFS TO EXTEND SUCH HUGE LOAN, THE AO SHALL GIVE APPROPRIATE RELIEF AS PER LAW AND SHALL RECOM PUTE THE PEAK SHORTAGE OF CASH. NEEDLESS TO SAY THE AO SHA LL GIVE REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. GROUND 62 OF APPEAL NO.1 BY THE ASSESSEE IS ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 75. GROUND OF APPEAL NO.2 BY THE ASSESSEE WAS NOT PRESS ED FOR WHICH THE LD. DEPARTMENTAL REPRESENTATIVE HAS NO OBJECT ION. ACCORDINGLY, THE SAME IS DISMISSED AS NOT PRESSED. 76. GROUND OF APPEAL NO.3 IS REGARDING LEVY OF INTEREST U/S.158BFA(1) OF THE ACT WHICH IS CONSEQUENTIAL IN NATURE. THEREFORE, THE SAME IS DISMISSED. 77. IN THE RESULT, ITA NO.803/PN/2010 AND ITA NO.784/PN/2010 ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES AND THE OTHER 3 APPEALS ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 15-07-2015. SD/- SD/- ( SUSHMA CHOWLA ) ( R.K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER IQ.KS PUNE ; '# $ DATED : 15 TH JULY, 2015. LRH'K &'()*+,+) / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. & & ' ( ) -I & II, * / THE CIT(A)- I & II, NASHIK 4. & & ' -I & II, * / THE CIT-I & II, NASHIK 5. +, - .. , & ! , IQ.KS / DR, ITAT, A PUNE; 6. - 01 2 / GUARD FILE. &- / BY ORDER , + . //TRUE COPY// Y//TRUE COPY// 345 .6 7 / SR. PRIVATE SECRETARY & !, IQ.KS / ITAT, PUNE