ACIT, Varanasi V. Dr. Smt. Neetu Singh Yadava, Varanasi

ITA 79/ALLD/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 63407 (ITAT-ALLAHABAD)
• Duration Of Justice: 1 year(s) 7 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 05-11-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 21-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANDEEP CHAUHAN
• Assessee Lawyers: ARVIND SHUKLA; O P SHUKLA
• Keywords: Unexplained cash credit; Unexplained investment; Unexplained expenditure; Gift; Business expenditure; Income from undisclosed sources; Search and seizure; Loose papers; Principle of natural justice; Period of limitation; Question of law; Cost of acquisition; Corroborative evidences; Valuation report; Competent authority; Notional interest; Commercial expediency; Time period of passing order; Reassessment proceedings; Capital expenditure
• Section: 143(3); 142(1); 153A; 37(1); 131; 68; 69; 145; 27; 132; 144; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ALLAHABAD BENCH, ALLAHABAD BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NOS.84, 85, 86, 87, 88 & 89/A/2011 ASSESSMENT YEARS: 2001-02, 2002-03, 2003-04, 2004-0 5, 2005-06 & 2006-07 RESPECTIVELY A.C.I.T., CIRCLE - 3, VS. DR. S.P. YADAV, VARANASI. S-25/265-K, VRINDAVAN COLONY, SARSAULI, VARANASI. (PAN : ABCPY 6034 D). ITA NOS.79 & 80/A/2011 ASSESSMENT YEARS: 2005-06 & 2006-07 RESPECTIVELY A.C.I.T., CIRCLE - 3, VS. DR. SMT. NEETU SINGH YA DAV, VARANASI. S-25/265-K, VRINDAVAN COLONY, SARSAULI, VARANASI. (PAN : AAZPY 0944 J). ITA NOS.82 & 83/A/2011 ASSESSMENT YEARS: 2005-06 & 2006-07 RESPECTIVELY A.C.I.T., CIRCLE - 3, VS. M/S. SHIVAM SURGICAL NU RSING HOME, VARANASI. AKTHA, PAHARIYA, VARANASI. (PAN : AAVFS 9540 C). (APPELLANT) (RESPONDENTS) APPELLANT BY : SHRI SANDEEP CHAUHAN, CIT D.R. RESPONDENTS BY : SHRI ARVIND SHUKLA & SHRI O.P. SHUKLA, ADVOCATES DATE OF HEARING : 05.11.2012 DATE OF PRONOUNCEMENT : 19.12.2012 ORDER PER A.L. GEHLOT, ACCOUNTANT MEMBER: ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 2 THESE ARE APPEALS FILED BY THE REVENUE AGAINST THRE E DIFFERENT ASSESSEES. ITA NOS.84 TO 89/A/2011 HAVE BEEN FILED AGAINST SIX SEPARATE ORDERS, ALL DATED 15.02.2011, PASSED BY THE LD. CIT(A), VARANASI FOR THE ASSESSMENT YEARS 2001-02 TO 2006-07 RESPECTIVELY IN THE CASE OF DR. S.P. YAD AV. ITA NOS.79 & 80/A/2011 HAVE BEEN FILED AGAINST A COMMON ORDER DATED 15.02. 2011 PASSED BY THE LD. CIT(A), VARANASI FOR THE ASSESSMENT YEARS 2005-06 & 2006-07 IN THE CASE OF DR. SMT. NEETU SINGH YADAV. ITA NOS.82 & 83/A/2011 HAV E BEEN FILED AGAINST TWO SEPARATE ORDERS, BOTH DATED 15.02.2011, PASSED BY T HE LD. CIT(A), VARANASI FOR THE ASSESSMENT YEARS 2005-06 & 2006-07 IN THE CASE OF M /S. SHIVAM SURGICAL NURSING HOME. 2. SINCE ALL THESE APPEALS FILED BY THE REVENUE ARE BASED ON IDENTICAL SET OF FACTS, THEREFORE, FOR THE SAKE OF CONVENIENCE, ALL THESE APPEALS ARE BEING DECIDED TOGETHER. THE FACTS OF THE CASE LEADS IN ITA NO.84 /A/2011 IN THE CASE OF DR. S.P. YADAV, WE THEREFORE, CONSIDER THE FACTS OF THAT CAS E IN DECIDING THESE APPEALS. 3. THE BRIEF FACTS OF THE CASE ARE THAT A SEARCH AN D SEIZURE OPERATION WAS CARRIED OUT ON 23.03.2006 AT THE RESIDENTIAL/BUSINESS PREMI SES OF THE ASSESSEE AND OTHER CONNECTED ASSESSEES OF THIS GROUP. THE ASSESSEE IS ENGAGED IN THE MEDICAL PROFESSION. AS A RESULT OF THE SAID SEARCH AND SEI ZURE OPERATION, THE ASSESSEE GROUP HAD COLLECTIVELY SURRENDERED RS.1,50,00,000/-. RET URNS OF INCOME WERE FILED UNDER ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 3 SECTION 153A OF THE ACT FOR DIFFERENT ASSESSMENT YE ARS, WHEREIN THE ASSESSEE HAD DISCLOSED UNDISCLOSED INCOME. ORIGINAL ASSESSMENT ORDERS UNDER SECTION 153A(B) WERE PASSED IN RESPECT OF A.YS. 2001-02 TO 2005-06 AND IN RESPECT OF A.Y. 2006- 07 THE ASSESSMENT WAS MADE UNDER SECTION 143(3) OF THE ACT. IN THESE ASSESSMENTS, ADDITIONS WERE MADE. THE ASSESSEE PREFERRED APPEAL S BEFORE THE CIT(A) AND CHALLENGED THE ASSESSMENT ORDER BOTH ON MERITS AND ON LEGAL GROUND. THE CIT(A), VARANASI VIDE ORDER DATED 30.03.2010 HAD DECIDED TH E ASSESSEES APPEALS FOR ALL THE A.YS. ON MERIT IN FAVOUR OF THE ASSESSEE, HOWEVER, HE DISMISSED LEGAL GROUNDS RAISED IN THE GROUNDS OF APPEAL FILED WITH APPEAL M EMO WITH THE REMARKS THAT ALL TECHNICAL ISSUES RAISED DURING THE COURSE OF APPELL ATE PROCEEDINGS WERE NOT RAISED DURING THE COURSE OF APPELLATE PROCEEDINGS. IN VIE W OF THE FACT, ALL TECHNICAL ISSUES RAISED BEFORE THE CIT(A) WERE DISMISSED. AGGRIEVED WITH THE ORDER OF CIT(A) DATED 30.03.2010, THE REVENUE FILED SECOND APPEAL B EFORE THE I.T.A.T., ALLAHABAD IN RESPECT OF ALL THE ABOVE MENTIONED A.YS. THE AS SESSEE RAISED LEGAL ISSUES THROUGH FILING CROSS OBJECTIONS. 4. IN FIRST ROUND OF LITIGATION, THE I.T.A.T., ALLA HABAD BENCH VIDE CONSOLIDATED ORDER DATED 12.10.2010 SENT BACK THE MATTER TO THE FILE OF CIT(A) TO DECIDE THE LEGAL ISSUES AS WELL AS MERITS OF THE CASE AFRESH I N ACCORDANCE WITH LAW. ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 4 5. IN COMPLIANCE TO THE ORDER OF I.T.A.T., ALLAHABA D BENCH, THE CIT(A), VARANASI VIDE ORDER DATED 15.02.2011 DECIDED ALL TH E APPEALS BY THAT COMMON ORDER. THE LEGAL GROUNDS RAISED BY THE ASSESSEE AR E AS UNDER:- (I) BECAUSE THE LEARNED CIT(A) HAS ERRED IN NOT AP PRECIATING THE FACT THAT THE WARRANT OF AUTHORIZATION WAS IN JOINT NAMES AND ASSESSMENT HAS BEEN FRAMED IN THE INDIVIDUAL CAPACI TY OF THE ASSESSEE. (II) BECAUSE THE LEARNED CIT(A) HAS ERRED IN NOT AP PRECIATING THAT THE ENTIRE ASSESSMENT WAS NULL AND VOID AS STATUTOR Y NOTICES U/S 143(2) WERE NOT SERVED ON THE ASSESSEE WITHIN THE STATUTOR Y TIME LIMIT. (III) BECAUSE THE ORDER OF LEARNED CIT(A) IS BAD IN LAW AS WELL AS ON FACTS TO THE EXTENT INDICATED ABOVE. 6. THE LEGAL GROUND HAS BEEN DISMISSED BY THE CIT(A ). HOWEVER, IN RESPECT OF MERIT OF THE CASE, THE CIT(A) RECONFIRMED THE FINDI NG OF CIT(A) GIVEN IN ORIGINAL ORDER. THE ASSESSEE DID NOT FILE ANY APPEAL OR CRO SS OBJECTION AGAINST THE DISMISSAL OF LEGAL GROUNDS BY THE CIT(A). 7. AS REGARDS MERIT OF THE CASE, AS STATED ABOVE TH AT THE CIT(A) CONFIRMED THE FINDING GIVEN IN THE ORIGINAL ORDERS OF CIT(A) DATE D 30.03.2010 ON THE GROUND THAT THE I.T.A.T. DID NOT GIVE ANY SPECIFIC FINDING IN R ESPECT OF MERIT OF THE CASE. THE CIT(A) FOUND THAT ALL THE ISSUES HAVE BEEN DEALT WI TH ON MERIT PROPERLY IN THE LIGHT OF FACTS AVAILABLE ON RECORD AS PER THE SUBMISSION OF THE ASSESSEE. THE CIT(A) FOLLOWED THE DECISION GIVEN IN ORIGINAL APPELLATE O RDER OF CIT(A) DATED 30.03.2010. ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 5 ITA NO.84/A/2011 ASSESSMENT YEAR 2001-02 8. THE REVENUE FILED APPEALS BEFORE THE I.T.A.T. T HE GROUNDS RAISED IN A.Y. 2001-02 ARE REPRODUCED AS BELOW :- 1. THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN REITERATING HIS DECISION GIVEN IN HIS ORIGINAL APPE LLATE ORDER DATED 30.03.2010, THEREBY --- (I) NOT APPRECIATING THAT NO BOOKS OF ACCOUNT WERE FOUND IN ANY OF THE PREMISES WHERE SEARCH AND SEIZURE OPERATION WER E CARRIED OUT U/S 132 ON 23.03.2006. (II) DELETING THE ADDITION OF RS.2,85,000/- MADE BY THE AO ON ACCOUNT OF UNEXPLAINED CASH CREDITS, RS.19,000/- EA CH IN THE NAMES OF 15 PERSONS AS MENTIONED IN PARA 22 OF THE ASSESSMENT ORDER, AS THE ASSESSEE HAS FAILED EITHER TO FILE CO NFIRMATION FROM THESE PERSONS OR PRODUCE THEM DESPITE THE FACT THAT ASSESSEE WAS REQUIRED SO TO DO VIDE NOTICE DATED 27.09.2007. (III) DELETING THE ADDITION OF RS.1,61,500/- MADE B Y THE AO ON THE BASIS OF ENTRIES ON PAGE-1 OF DIARY MARKED BK-I AS NO REPLY/EXPLANATION ON THIS ENTRY WAS GIVEN BY THE AS SESSEE. (IV) DELETING THE ADDITION OF RS.53,800/- MADE BY T HE AO ON THE BASIS OF ENTRIES ON PAGE-2 OF DIARY MARKED BK-I AS NO REPLY/EXPLANATION ON THIS ENTRY WAS GIVEN BY THE AS SESSEE. (V) DELETING THE ADDITION OF RS.70,850/- MADE BY TH E AO ON THE BASIS OF ENTRIES ON PAGE-4 OF DIARY MARKED BK-I AS NO REPLY/EXPLANATION ON THIS ENTRY WAS GIVEN BY THE AS SESSEE. (VI) DELETING THE ADDITION OF RS.90,000/- MADE BY T HE AO ON THE BASIS OF ENTRIES ON PAGE-5 OF DIARY MARKED BK-I AS NO REPLY/EXPLANATION ON THIS ENTRY WAS GIVEN BY THE AS SESSEE. ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 6 (VII) DELETING THE ADDITION OF RS.50,800/- MADE BY THE AO ON THE BASIS OF ENTRIES ON PAGE-6 OF DIARY MARKED BK-I AS NO REPLY/EXPLANATION ON THIS ENTRY WAS GIVEN BY THE AS SESSEE. (VIII) DELETING THE ADDITION OF RS.31,500/- MADE BY THE AO ON THE BASIS OF ENTRIES ON PAGE-8 OF DIARY MARKED BK-I AS NO REPLY/EXPLANATION ON THIS ENTRY WAS GIVEN BY THE AS SESSEE. (IX) DELETING THE ADDITION OF RS.2,85,000/- MADE BY THE AO ON THE BASIS OF ENTRIES ON PAGE-11 OF DIARY MARKED BK-I AS NO REPLY/EXPLANATION ON THIS ENTRY WAS GIVEN BY THE AS SESSEE. 2. THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED TO REL Y ON ASSESSEES WRITTEN SUBMISSION DATED 26.12.2007 AND THUS ALLOWI NG THE APPEAL WITHOUT GIVING DETAILED OWN FINDINGS AND ANY OPPORT UNITY TO THE ASSESSING OFFICER. 3. THAT THE ORDER OF LEARNED CIT(APPEAL) BEING ERRO NEOUS IN LAW AND ON FACTS MAMA BE REVERSED AND THE ORDER OF AO M AY KINDLY BE RESTORED. 4. CRAVES FOR LEAVE TO RAISE ANY GROUNDS OF APPEAL THAT MAY BE TAKEN AT THE TIME OF HEARING. 9. THE A.O. NOTED IN THE ASSESSMENT ORDER THAT THE ASSESSEE HAS SIMPLY ADOPTED THE TACTICS OF SEEKING ADJOURNMENTS ON SOME PRETEXT SO THAT DETAILS AS WERE CALLED FOR FROM HIM ARE NOT FURNISHED AT ALL. BEFO RE THE CIT(A), SHRI O.P. SHUKLA, ADVOCATE APPEARED ON ASSESSEES BEHALF AND FILED VO LUMINOUS DETAILS ALONG WITH PAPER BOOK CONTAINING REPLIES AND OTHER MATERIALS F URNISHED BEFORE THE A.O. IT WAS SUBMITTED THAT THE A.O. HAS WRONGLY OBSERVED THAT T HE ASSESSEE HAS SIMPLY ADOPTED THE TACTICS OF SEEKING ADJOURNMENTS. A DETAILED RE PRESENTATION AND VARIOUS EXPLANATION AND MATERIALS FURNISHED TO THE A.O. HAV E BEEN POINTED OUT TO THE ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 7 CIT(A) WHICH HAS BEEN NOTED BY THE CIT(A) IN HIS OR DER FROM PAGE NOS.15 TO 20. IN RESPONSE TO NOTICE UNDER SECTION 153(A)(A) AND 1 53C THE ASSESSEE FURNISHED THE RETURNS DATED 02.02.2007. IT WAS ALSO POINTED OUT THAT THE RETURNS OF INCOME WERE ALREADY FILED UNDER SECTION 139 ALONG WITH BALANCE SHEET AND PROFIT & LOSS ACCOUNT. A CASH FLOW STATEMENT OF SHRI SHIVA PRASA D YADAV AND OTHER GROUPS WERE ALSO FURNISHED. REPLIES WERE FURNISHED BEFORE THE A.O. VIDE LETTERS DATED 13.12.2007, 20.12.2007, & 26.12.2007. THE CIT(A) O N THE BASIS OF DETAILS FURNISHED BY THE ASSESSEE OBSERVED THAT THE CIRCUMS TANCES PROPELLED THE A.O. TO ELICIT SUCH INFERENCE AGAINST THE ASSESSEE. THE CI T(A) OBSERVED THAT BE THAT AS IT MAY, BUT HE DID NOT PROPOSE TO ENLARGE THE AREA OF DISPUTE. HOWEVER, HAVING REGARD TO THE NATURE AND EXTENT OF COMPLIANCE VIS-A -VIS ITS BEARING ON THE APPELLATE PROCEEDINGS OR WOULD HAVE BEEN ON THE ASSESSMENT PR OCEEDINGS, IT IS LAWFULLY REQUISITE AND PROPER TO EXAMINE THE A.O.S MODUS OP ERANDI AT THE ANVIL OF OBJECTIVE TEST, SINCE LIMBS OF COMPLIANCE GO TO SHOW THAT THE RE WAS PRIMA FACIE SUFFICIENCY IN THE ASSESSEES COMPLIANCE, IN AS MUCH AS, IF IT HAD BEEN CONSIDERED AT THE ASSESSMENT STAGE, IN TRUE SENSE, THERE WOULD HAVE B EEN DIMINUTION OF VARIOUS UNWARRANTED AND UNJUSTIFIED ADDITIONS. THE CIT(A) ADMITTED THAT THE COMPLIANCE MADE BY THE ASSESSEE DURING THE COURSE OF ASSESSMEN T PROCEEDINGS, IN THE NATURE OF REPLIES, CLARIFICATIONS AND EVIDENCES ARE QUITE CAP TIVATING AND PREHENSILE. IN THIS REGARD, A DETAILED DISCUSSION IS MADE BY THE CIT(A) . THE CIT(A) ALSO GONE THROUGH THE PAPER BOOK AND OTHER REPLIES FURNISHED BEFORE HIM WHICH RUNS TO MORE ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 8 THAN 1500 PAGES. THE CIT(A) NOTED THAT LOOKING TO THE REPLIES AND NATURE OF DOCUMENTS, THE REASON FOR NOT ENTERTAINING THE SAME ON 26.12.2007 AND COMPLETING THE ASSESSMENT PROCEEDINGS PRECIPITATELY AT THE LEV EL OF THE A.O. IS BEYOND ONES WITS END. UNDER THE FACTS AND CIRCUMSTANCES, THE CIT(A) HELD THAT THE ASSESSEE WAS UNCONSCIONABLY PREVENTED TO PRESENT HIS CASE AT THE VERY CURTAIL JUNCTURE. THEREFORE, INFERENCE DRAWN BY THE A.O. HAS BEEN DEP RECATED AND REPLY DATED 24.12.2007 SUBMITTED BY THE ASSESSEE IN THE OFFICE OF THE A.O. ON 26.12.2007 IS TREATED TO HAVE BEEN FILED DURING THE COURSE OF ASS ESSMENT PROCEEDINGS AND THUS BECOMES AN INTEGRAL PART OF THE RECORDS. 10. THE REVENUE HAS RAISED GROUND NO.1(I) THAT THE CIT(A) HAS NOT APPRECIATED THAT NO BOOKS OF ACCOUNT WERE FOUND IN ANY OF THE PREMISES WHERE SEARCH AND SEIZURE OPERATION WERE CARRIED OUT UNDER SECTION 132 OF THE ACT ON 23.03.2006. THE GROUND NO.2 IS IN RESPECT OF ADMISSION OF ASSESSEES SUBMISSION DATED 26.12.2007 WITHOUT GIVING OPPORTUN ITY TO THE A.O. WE NOTICE THAT THE ORIGINAL ORDER WAS PASSED BY THE CIT(A) DA TED 30.03.2007. AGAINST THAT ORDER, THE REVENUE FILED APPEALS BEFORE THE I.T.A.T . THIS FACT WHATEVER RAISED BY THE REVENUE VIDE GROUND NO.1(I) AND GROUND NO.2 WER E ALREADY THERE AT THE TIME OF APPEAL BEFORE THE I.T.A.T. IN THE EARLIER ROUND OF LITIGATION. THE I.T.A.T. DID NOT GIVE ANY SPECIFIC FINDING WHILE SENDING BACK THE MA TTER TO THE FILE OF THE CIT(A). IN THE LIGHT OF THE FACT, THE MATTER REQUIRED TO BE EXAMINED IN THE LIGHT OF ORDER OF ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 9 I.T.A.T. IN THE FIRST ROUND OF LITIGATION AND SUCH GROUND RAISED IN SECOND ROUND OF LITIGATION DO NOT CARRY ANY SUBSTANCE, PARTICULARLY WHEN THE REVENUE DID NOT POINT OUT ANY SPECIFIC INSTANCE OF IRREGULARITY. WHETHER BOOKS OF ACCOUNT HAVE BEEN FOUND AT THE TIME OF SEARCH OR NOT DOES NOT EFFECT FOR MAKING ASSESSMENT IN CASE OF SEARCH ASSESSMENT AS SEARCHED ASSESSMENT IS REQUIRE D TO BE MADE UNDER SECTION 153A OF THE ACT. 11. AS REGARDS GROUND NO.2, OPPORTUNITY TO THE A.O, WE FIND THAT THIS ASPECT O F THE MATTER HAS ALREADY BEEN TREATED TO BE COMPLETE AS THE REVENUE HAS APPEARED BEFORE I.T.A.T. AND PRESENTED THEIR CASE IN THE FIR ST ROUND OF LITIGATION. EVEN BEFORE US ALSO WHEN THE MATERIAL HAS ALREADY BEEN FURNISHE D BY THE ASSESSEE AND THE SAME IS ON RECORD, THE REVENUE FAILED TO POINT OUT HOW T HE REVENUE HAS DEPARTED FROM THE OPPORTUNITY OF HEARING. IN THE LIGHT OF ABOVE DISCUSSIONS, WE DO NOT FIND SUBSTANCE IN BOTH THE GROUNDS, I.E. GROUND NO.1(I) & 2, THEREFORE, THE SAME ARE DISMISSED. 12. GROUNDS NOS.3 & 4 ARE GENERAL IN NATURE DO NOT REQUIRE INDEPENDENT FINDING. 13. THE EFFECTIVE GROUND RAISED ON MERIT IS GROUND 1(II) IN RESPECT OF ADDITION OF RS.2,85,000/- MADE UNDER SECTION 68 OF THE ACT. ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 10 14. DURING THE ASSESSMENT PROCEEDINGS, THE A.O. NOT ICED FROM THE BALANCE SHEET ENCLOSED WITH THE RETURN THAT THERE WAS CREDIT AS U NSECURED LOAN. THE TOTAL AMOUNT OF THE UNSECURED LOAN HAS BEEN NOTED BY THE A.O. WI TH NAME OF PARTIES AT PAGE NOS.16 TO 18 OF THE A.O.S ORDER. THE YEAR-WISE DE TAILS OF SUCH UNSECURED LOAN ARE AS UNDER :- ASSESSMENT YEAR 2001-02 RS.2,85,000/- ASSESSMENT YEAR 2002-03 RS.7,33,900/- ASSESSMENT YEAR 2003-04 RS.7,50,000/- THE A.O. MADE ADDITION AS UNDER:- ASSESSMENT YEAR 2001-02 RS.2,85,000/- ASSESSMENT YEAR 2002-03 RS.4,48,100/- (AFTER ALLOWING THE SET-OFF OPENING BALANCE 2003-04 ) RS.7,50,000/-. 15. THE A.O MADE THE ABOVE ADDITIONS ON ACCOUNT OF UNSECURED LOAN ON THE GROUNDS THAT THE ASSESSEE HAS NEITHER FURNISHED ANY REPLY NOR ANY PERSON WAS PRODUCED FOR EXAMINATION NOR WAS ANY REQUEST MADE B Y THE ASSESSEE. SUMMONS UNDER SECTION 131 WERE ISSUED TO THE PARTIES FROM W HOM UNSECURED LOANS WERE TAKEN. THE A.O. NOTED THAT THE ASSESSEE HAS FAILED TO SATISFY ALL THREE CONDITIONS, IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE C REDITORS. THE CIT(A) NOTED THE FACT THAT THE ASSESSEE HAS TAKEN LOAN FROM VARIOUS PARTIES AT THE TIME OF CONSTRUCTION OF HOSPITAL BUILDING AND THE SAME WERE REFLECTED IN THE BALANCE SHEET WHICH IS FILED UNDER SECTION 139 OF THE ACT ALONG WITH RETURN FILE D UNDER SECTION 139 OF THE ACT. ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 11 THE ASSESSEE FURNISHED COPY OF ACKNOWLEDGEMENT OF T HE RETURN. THE DATE OF FILING OF RETURN UNDER SECTION 139 WAS 31.03.2002. 16. THE CIT(A) NOTED PARTY-WISE DETAILS OF CREDITOR S INCLUDING CHEQUE NUMBER AND NAME OF BANK ETC. AT PAGE NO.59 OF HIS ORDER. AFTER SEARCH, IN COMPLIANCE TO NOTICE UNDER SECTION 153A DATED 27.06.2006 THE ASSE SSEE FILED RETURN OF INCOME ON 02.02.2007 AND UNSECURED LOAN TAKEN DURING THE YEAR HAS ALREADY BEEN REFLECTED IN THE BALANCE SHEET. THE ASSESSEE HAS ALREADY MADE C OMPLIANCE TO QUERY LETTER DATED 27.09.2007 WHICH WAS COMPLIED WITH VIDE THIRD WRITT EN SUBMISSION DATED 24.12.2007 AND 26.12.2007. ALONG WITH THE SAID REP LY, CONFIRMATORY STATEMENT OF ACCOUNT DULY SIGNED BY THE DEPOSITOR, AFFIDAVIT OBT AINED FROM THE DEPOSITORS, THEIR ACKNOWLEDGEMENT, BALANCE SHEET AND COMPUTATION OF I NCOME WERE ALSO FILED. THE ASSESSEE SUBMITTED BEFORE THE CIT(A) THAT THESE LOA NS HAD BEEN EXISTED ORIGINALLY AS GENUINE AND NO ADVERSE MATERIAL FOUND DURING THE COURSE OF SEARCH SO AS TO CREATE DOUBT ABOUT GENUINENESS OF THESE LOANS. THE ASSESSEE VIDE REPLY DATED 26.12.2007 EXPLAINED THE UNSECURED LOAN IN DETAIL W HICH HAVE BEEN REPRODUCED BY THE CIT(A) AT PAGE NO.60 OF HIS ORDER. THE LOANS W ERE REPAID BY ACCOUNT PAYEE CHEQUES OF WHICH DETAILS HAVE BEEN NOTED BY THE CIT (A) AT PAGE NO.61 OF HIS ORDER. THE CIT(A) NOTED THE DETAILS REGARDING UNSECURED LO ANS, YEAR-WISE & PARTY-WISE, FROM PAGE NOS.58 TO 68 OF HIS ORDER ORDER. THE CIT (A) CONSIDERED THE VARIOUS DETAILS FILED BY THE ASSESSEE IN RESPECT OF EACH DE POSITOR. THE DETAILS WERE ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 12 FURNISHED BY THE ASSESSEE IN WHICH CONFIRMATION FRO M THE PARTIES, NAME AND ADDRESS, MODE OF PAYMENT, REPAYMENT DETAILS, PAN/GI R NO., WARD/CIRCLE WHERE DEPOSITORS WERE ASSESSED TO TAX AND THEIR INDEPENDE NT SOURCE OF INCOME. ON THE BASIS OF DETAILS FURNISHED, THE CIT(A) FOUND THAT T HE ASSESSEE HAS DISCHARGED THE BURDEN IN RESPECT OF IDENTITY, GENUINENESS AND CRED ITWORTHINESS OF THE DEPOSITORS. THE CIT(A) IN VIEW OF THE MATERIAL EVIDENCE ALONG W ITH CLARIFICATION FURNISHED BY THE ASSESSEE HELD THAT THERE IS NO REASON TO HOLD T HAT THE TRANSACTIONS MADE BY THE ASSESSEE WERE UNEXPLAINED. 17. THE CRUX OF THE SUBMISSION OF THE LD. DEPARTMEN TAL REPRESENTATIVE IS THAT THE CIT(A) DID NOT GIVE ANY FINDING. HE HAS SIMPLY REL IED UPON THE SUBMISSION OF THE ASSESSEE. THE ORDER OF CIT(A) IS NOT A REASONED OR DER. THE LD. DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDER OF THE ASSESSI NG OFFICER. 18. LD. AUTHORISED REPRESENTATIVE RELIED UPON THE O RDER OF CIT(A) AND SUBMITTED THAT THE CIT(A) HAS PASSED THE ORDER AFTE R CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE. LD. AUTHORISED REPRESENTATIV E REFERRED PAGES NOS.15 ONWARDS OF CIT(A)S ORDER. 19. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PA RTIES AND RECORDS PERUSED. WE NOTICE THAT THE CIT(A), AFTER ELABORATE DISCUSSI ONS IN HIS ORDER, FOUND THAT THE ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 13 ASSESSEE HAS DISCHARGED THE ONUS IN RESPECT OF IDEN TITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS. IT HAS BEEN NOTED BY THE CIT(A) THAT LOANS WERE TAKEN THROUGH BANKING CHANNELS. THE DEPOSITORS ARE ASSESSED TO TAX. THE ASSESSEE HAS FURNISHED VARIOUS DETAILS IN THE FORM OF CONFIR MATION, NAMES AND ADDRESS, MODE OF PAYMENT, REPAYMENT, PAN/GIR WHERE THE DEPOSITORS WERE ASSESSED TO TAX. SOURCE OF THE DEPOSITOR HAS ALSO BEEN EXPLAINED AND IN SUPPORT OF THAT AFFIDAVITS WERE ALSO FILED. REPAYMENTS WERE MADE THROUGH BANK ING CHANNEL. THUS, ON THE BASIS OF MATERIALS AND FACTS RECORDED BY THE CIT(A) , WE FIND THAT THE CIT(A) CORRECTLY DELETED THE ADDITIONS AS THE ASSESSEE HAS DISCHARGED THE BURDEN IN RESPECT OF IDENTITY, CREDITWORTHINESS AND GENUINENESS OF TH E TRANSACTION WHICH IS REQUIRED TO BE SATISFIED BY THE ASSESSEE UNDER SECTION 68 OF THE ACT. 20. APART FROM THE ABOVE DISCUSSION, IT IS ALSO REL EVANT TO NOTE THAT THIS IS A SEARCH ASSESSMENT. SECTION 153A OF THE ACT PROVIDE S THE PROCEDURE FOR COMPLETION OF ASSESSMENT WHERE A SEARCH IS INITIATED UNDER SEC TION 132 OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ANY ASSETS ARE REQUISITIONED UND ER SECTION 132A AFTER 31.05.2003 IN SUCH CASES THE A.O. SHALL ISSUE NOTIC E TO SUCH PERSON REQUIRING HIM TO FURNISH WITHIN SUCH PERIOD, AS MAY BE SPECIFIED IN THE NOTICE, RETURN OF INCOME IN RESPECT OF EACH ASSESSMENT YEAR IMMEDIATELY PRECEDI NG ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE SEARCH WAS CONDUC TED UNDER SECTION 132 FOR REQUISITIONING WAS MADE UNDER SECTION 132A OF THE A CT. THE SAME AS OTHERWISE ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 14 PROVIDED IN THE PROPOSED SECTION 153A, SECTION 153B AND SECTION 153C, ALL OTHER PROVISIONS OF THE ACT SHALL APPLY TILL THE ASSESSME NT OR REASSESSMENT MADE UNDER SECTION 153A OF THE ACT. THE SCOPE OF THIS SECTION HAS BEEN EXAMINED BY THE I.T.A.T., SPECIAL BENCH, MUMBAI IN THE CASE OF ALL CARGO GLOBAL LOGISTIC LIMITED VS. DY. CIT, 137 ITD 287 (MUMBAI SB) 21. THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT, CENTRAL KANPUR VS. SMT. SHAILA AGARWAL, 246 CTR 266 (ALL) HAS EXAMINED THE WORDS ABATE AND PENDING. 22. IN THE LIGHT OF ABOVE DISCUSSIONS, IF WE CONSID ER THE FACTS OF THE CASE UNDER CONSIDERATION, WE FIND THAT DURING THE COURSE OF SE ARCH, NO INCRIMINATING MATERIAL WAS FOUND IN RESPECT OF THESE DEPOSITORS. THE ASSE SSEE FURNISHED ORIGINAL RETURNS ALONG WITH FINANCIAL STATEMENT AND ACCORDINGLY REGU LAR ASSESSMENTS WERE COMPLETED. ACCORDING TO THE ABOVE JUDGMENT OF THE HONBLE ALLAHABAD HIGH COURT, THE IMPUGNED ASSESSMENT ORDERS ARE NOT ABATE D ASSESSMENTS. AS PER THE DECISION OF I.T.A.T., MUMBAI, SPECIAL BENCH, THE AD DITION IS TO BE MADE ONLY ON THE BASIS OF INCRIMINATING MATERIAL FOUND DURING TH E COURSE OF SEARCH. FOR THE ISSUE UNDER CONSIDERATION, NO INCRIMINATING DOCUMENTS WER E FOUND AND THE ISSUE HAS ALREADY BEEN EXAMINED IN THE ORIGINAL REGULAR ASSES SMENTS, THEREFORE, ADDITION IS NOT WARRANTED. ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 15 23. IN THE LIGHT OF ABOVE DISCUSSIONS, WE FIND THAT THE CIT(A) HAS RIGHTLY DELETED THE ADDITIONS OF RS.2,85,000/- IN A.Y. 2001-02, RS. 4,48,000/- IN A.Y. 2002-03 AND RS.7,50,000/- IN A.Y. 2003-04. ORDERS OF THE CIT(A ) ARE CONFIRMED. 24. GROUND NOS.1 (III) TO (IX) IS ON THE BASIS OF ONE DIARY, ANNEXURE 29 BK1. THE A.O. MADE ADDITIONS ON THE BASIS THAT THE ASSES SEE DID NOT FURNISH EXPLANATION. THE DETAILS NOTED FROM A.O.S ORDER AT PARAGRAPH NO .29 READS AS UNDER :- (PAGE NOS.19 & 20) (*) PAGE-1 SHOWS THAT A TOTAL SUM OF RS.161500/- W AS EXPENDED DURING 20 TH , 21 ST AND 27 TH BUT MONTH AND YEAR IS NOT NOTED. BUT IN PAGE 2 DATE IS 4-8-2000 SO NATURAL PRESUMPTION IS THAT E NTRY OF PAGE 1 PERTAIN TO A.Y. 2001-02. IN THE ABSENCE OF ANY REP LY SOURCE OF RS.161500/- REMAINS UNEXPLAINED AND HENCE ADDED IN A.Y. 2001-02. (ADDITION RS.161500/- IN A.Y. 2001-02) (*) PAGE-2-DATED 4-8-2000 SHOWS FURTHER EXPENDITURE /PAYMENT OF RS.53800/-. IN THE ABSENCE OF ANY REPLY SOURCE OF RS.53800/- REMAINS UNEXPLAINED AND HENCE ADDED IN A.Y. 2001-02. (ADDITION RS.53800/- IN A.Y. 2001-02) (*) PAGE-4-SHOWS RECEIPT OF RS.23800/- AND RS.47050 /- IN NOV AND DEC 2000 BUT SOURCE IS NOT EXPLAINED. IN THE ABSEN CE OF ANY REPLY SOURCE OF RS.70850/- REMAINS UNEXPLAINED AND HENCE ADDED IN A.Y. 2001-02. (ADDITION RS.70850/- IN A.Y. 2001-02) (*) PAGE-5-DATED 5 (IMPLIES 5-8-2000) SHOWS THAT RS .90000/- WAS PAID TO DABBU BUT SOURCE IS NOT EXPLAINED. IN THE ABSENCE OF ANY REPLY SOURCE OF RS.90000/- REMAINS UNEXPLAINED AND HENCE ADDED IN A.Y. 2001-02. (ADDITION RS.90000/- IN A.Y. 2001-02) (*) PAGE-6 SHOWS DATE WAS RECEIPT OF CASH IN JANUAR Y 2001 TOTAL OF WHICH COMES TO RS.50800/- BUT SOURCE IS NOT EXPLAIN ED. IN THE ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 16 ABSENCE OF ANY REPLY SOURCE OF RS.50800/- REMAINS U NEXPLAINED AND HENCE ADDED IN A.Y. 2001-02. (ADDITION RS.50800/- IN A.Y. 2001-02) (*) PAGE-8-DATED 9-3-2001-SHOWS THAT RS.10000/- WAS RECEIVED ON 1 ST MARCH, RS.4500/- WAS RECEIVED ON 3 RD MARCH AND RS.17000/- WAS RECEIVED ON 10 TH MARCH 2001 BUT SOURCE IS NOT EXPLAINED. IN THE ABSENCE OF ANY REPLAY SOURCE OF RS.31500/- REMAINS UNEXPLAINED AND HENCE ADDED IN A.Y. 2001-02. (ADDITION RS.31500/- IN A.Y. 2001-02) THE INVESTMENT AS APPEAR IN THIS PAGE DO NOT APPEAR IN THE BALANCE SHEET IN THE CASE OF THE ASSESSEE. ABOUT THESE ENT RIES NO EXPLANATION WHATSOEVER HAS BEEN SUBMITTED. HENCE IN THE ABSENC E OF ANY REPLY SOURCE OF RS.285000/- REMAINS UNEXPLAINED AND HENCE ADDED IN A.Y. 2001-02. (ADDITION RS.285000/- IN A.Y. 2001-02) 25. THE CIT (A) DELETED THE ADDITIONS AS THE ASSESS EE HAS EXPLAINED THE CONTENTS OF DIARY. THE A.O. FAILED TO CONSIDER ASSESSEES S UBMISSIONS. THE CIT(A) EXAMINED THE ASSESSEES SUBMISSIONS FROM PAGE NOS.7 1 TO 74 IN PARAGRAPH NO.14 OF HIS ORDER. EXPLANATIONS WERE FURNISHED BY THE ASSE SSEE BEFORE THE A.O. VIDE PARAGRAPH NO.2 OF APPENDIX-H OF EXPLANATION DATED 2 4.12.2007. THAT NOTING IN DIARY IS ROUGH NOTING OF SHIVAM SURGICAL NURSING HO ME, PROPRIETARY FIRM OF SMT. RADHIKA YADAV. THESE SMALL AMOUNTS ARE MORE OR LES S REFLECTED IN THE BOOKS OF ACCOUNT OF SHIVAM SURGICAL NURSING HOME. 26. THAT IN PAGE NO. OF BK-1, THERE IS NO DATE, NAM E OF PERSONS TO WHOM AMOUNT HAS BEEN PAID OR FROM WHOM THE AMOUNT HAS BEEN RECE IVED. THE CIT(A) FOUND THAT THE A.O. MADE THE ADDITION ON PRESUMPTION BASI S. ON PAGE NO.2 OF DIARY ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 17 JANUARY 2000 IS WRITTEN. THE A.O. MADE WRONG PRESU MPTION IN MAKING ADDITION IN A.Y. 2001-02. THE CIT(A) HAS ALSO CONSIDERED THE A SSESSEES SUBMISSION REGARDING OBSERVATION OF THE A.O. THAT THE ASSESSEE DID NOT FURNISH EXPLANATION WHEREAS FURNISHED THE REPLY DATED 24.12.2007/26.12. 2007 TO THE QUERY LETTER DATED 27.09.2007. THE CIT(A) HAS ALSO CONSIDERED THE DIS CLOSURE OF ADDITIONAL INCOME OF RS.1.50 CRORES BEFORE DELETING THE ADDITION. TH E ASSESSEE EXPLAINED THE AMOUNT OF RS.2,85,000/- OF THE DIARY WHICH ARE THE AMOUNTS DEPOSITED IN BANK AND SAME HAVE RECONCILED WITH BOOKS OF ACCOUNT. 27. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PA RTIES AND RECORDS PERUSED. THE A.O. MADE ADDITIONS ON THE BASIS THAT THE ASSES SEE DID NOT FURNISH EXPLANATION WHEREAS THE ASSESSEE HAS MADE ALL NECESSARY EXPLANA TION BEFORE THE A.O. VIDE ASSESSEES LETTER DATED 24.12.2007 & 26.12.2007. T HE A.O. WHILE TAKING FINAL FIGURE OF RS.1,61,500/- WRONGLY TAKEN RS.16,15,000/ -. THE RELEVANT EXPLANATION FURNISHED BY THE ASSESSEE NOTED FROM THE ORDER OF C IT(A) AT PAGE NO.72 READS AS UNDER :- (PAGE NO.72 OF CIT(A)) THIS IS A BUNCH OF PAPERS FROM DIARY CONTAINING 12 WRITTEN PAGES ON WHICH CERTAIN NOTING HAVE BEEN MADE IN VER Y CRUDE FROM AND THE VERY WRITING AND NARRATION SHOWS THAT IT HAS BE EN WRITTEN BY SOME ALLITERATE PERSON FOR HIS OWN PURPOSES AND SOME OF THE ENTRIES CANNOT BE DECIPHERED. THE DOCUMENTS ARE IN THE NATURE OF DUMB DOCUMENTS IN THE SENSE THAT NEITHER THE NAME OF THE PERSON NO R THE DATE AND PERIOD HAS BEEN PROPERLY MENTIONED SO AS TO CORRELA TE THE SAME TO A PARTICULAR ASSESSEE AND PARTICULAR PERIOD. YOUR GO OD SELF HAS TRIED TO ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 18 CORRELATE CERTAIN ENTRIES TO PARTICULAR DATE, WHICH IS ALSO NOT CORRECT. FOR EXAMPLE, AT PAGE-2, IT HAS BEEN MENTIONED AS TH E DATE OF 04.08.2000 AND IN FRONT OF THE SAME THE FIGURE OF 2 60,000/- AND 15,000/- MILA HAS BEEN NOTED, WHICH IS NOT CORRECT. SIMILARLY THE FIGURE OF 260,000/- IS ALSO NOT CORRECT AS THIS IS TOTAL OF CERTAIN FIGURES, WHICH HAS BEEN NOTED SEVERAL TIMES ON THE SAME PAGE AND DIFFERENT TOTALS HAVE BEEN WORKED OUT, WHICH WERE FINALLY CUT TO REJECT THE SAME. SIMILARLY, PAGES 5 & 8 ALSO DO NOT CONTAIN THE DATE OF 05.08.2000 AND 09.03.2001 AS MENTIONED IN NOTICE. THESE NOTING AR E OF NO FINANCIAL CONSEQUENCE AND NO INFERENCE COULD BE DRAWN ON THAT BASIS, WHICH COULD BE RELATED TO A PARTICULAR ASSESSEE. 28. ON PERUSAL OF ENTRIES OF DIARY AND ORDERS OF RE VENUE AUTHORITIES, WE FIND THAT IT IS NOT CLEAR WHETHER AMOUNTS NOTED IN DIARY ARE RECEIPTS OF AMOUNT OR PAYMENT AMOUNTS WHICH WERE NOT ACCOUNTED FOR. 29. FROM THE NARRATION NOTED IN THE DIARY, IT APPEA RS THAT THESE WERE ROUGH NOTING OF DAY-TO-DAY WORKING OF BUSINESS/PROFESSION WHICH IS PART AND PARCEL OF BOOKS OF ACCOUNT. IN THE BUSINESS/PROFESSION ONE PERSON CAN NOT DO ALL THE WORKS BY HIMSELF ALONE. HE HAS TO DEPEND UPON STAFFS AND OTHER PERS ONS NATURALLY, SOME PAYMENTS AND RECEIPTS OF AMOUNT ALSO TO BE CARRIED THROUGH T HEM. THEY PEOPLE MAY BE MAINTAINING SUCH ROUGH JOTTING AND NOTING. UNLESS OTHERWISE FOUND PARTICULARLY UNDER CIRCUMSTANCES OF SEARCH THAT THESE JOTTING AN D NOTING WERE OUT OF BOOKS, MERELY ON PRESUMPTION AMOUNT CAN NOT BE ADDED. FRO M THE EXPLANATION OF THE ASSESSEE AND ON THE BASIS OF FINDING OF REVENUE AUT HORITIES, THE AMOUNT CANNOT BE ADDED AS UNDISCLOSED PARTICULARLY WHEN THE ASSESSEE HAS SUBMITTED THE NECESSARY ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 19 EXPLANATIONS. TO SUPPORT THIS FINDING WE CAN REFER ONE OF THE EXPLANATION OF THE ASSESSEE WHICH IS PERTAINING TO ADDITION OF RS.2,85 ,000/-. FOR THE PURPOSE OF READY REFERENCE, THE EXPLANATION OF THE ASSESSEE NOTED BY THE CIT(A) IN HIS ORDER AT PAGE NO.73 & 74 ARE REPRODUCED BELOW :- (PAGE NOS.73 & 7 4 OF CIT(A)). H. THAT, THE LEARNED A.O. HAS MADE AN ADDITION AMO UNT OF RS.285000/- WHICH DETAILS AS UNDER ON THE BASIS OF PAGE 11 OF BK-1. THE ENTRY RECORDED ON PAGE NO.11 ARE NOT THE SAME H AND WRITING AND SAME APPEARS TO BE NOTHING APPERTAINING TO DEPOSIT IN THE BANK ACCOUNT AND CERTAIN INVESTMENT. THE SAME ARE SUMMA RIZED BELOW:- A) THE NOTING OF 1 LAC, 4 AND 66,000/- PNB APPEAR S TO BE NOTING FOR DEPOSITS OF RS.1,00,000/- ON 10.03.2004 AND RS.4,66,000/- ON 12.05.2004 IN BANK ACCOUNT NO.2030 , PUNJAB NATIONAL BANK, PAHARIA. A COPY OF BANK STATEMENT I S ENCLOSED FOR YOUR KIND PERUSAL AS PER PAPER BOOK PAGE NO.354 TO 356 AND 257 & 258. B) THE NEXT NOTING OF 50000 FD SAHARA RELATED TO THE FIXED DEPOSITS OF RS.50,000/- ON 31.12.2002 WITH SA HARA INDIA IN THE NAME OF DR. S.P. YADAV WHICH HAS ALREADY BEE N EXPLAINED VIDE PARA NO.9 OF THE SAID REPLY AND HAS FURNISHED AS PER APPENDIX E OF REPLY DATED 14.12.2007/20.12.2007 . AS PER PAPER BOOK PAGE NO.505. C) THE NOTING REGARDING 5000 SBI AND 5000 SBI REPRESENT DEPOSITS OF RS.5000/- ON 28.03.2001 AND R S.5,000/- ON 30.03.2002 IN PPF ACCOUNT NO.01P0013783, STATE B ANK OF INDIA, IN THE NAME OF SMT. RADHIKA YADAV. A COPY O F PPF A/C IS ENCLOSED AS PER PAPER BOOK PAGE NO.437 TO 439. D) SIMILARLY, THE NOTING 50000 BABLOO BO BAROD A PERTAINS TO THE FIXED DEPOSIT OF RS.50,000/- IN THE NAME OF SHRI KRISHNA YADAV ALIAS BABLOO WITH BANK OF BARODA WHIC H HAS ALREADY BEEN EXPLAINED VIDE REPLY DATED 20.12.2007 AS PER APPENDIX-E AS PER PAPER BOOK PAGE NO.509 PARA NO.10 . ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 20 E) THE NOTING OF 10000 POST OFFICE NEETU REPR ESENTS THE INVESTMENT OF RS.10,000/- IN POST OFFICE NSC IN THE NAME OF DR. NEETU SINGH ON 03.09.2003. F) THE NOTING 50000 BO BARODA PERTAINS TO DEPOS IT OF RS.50,000/- ON 07.10.2002 IN BANK OF BARODA, SB AC COUNT NO.2005775 IN THE NAME OF DR. NEETU SINGH YADAV. A COPY OF BANK STATEMENT AS PER PAPER BOOK PAGE NO.264. G) THE NOTING 70000 PERTAINS TO DEPOSIT OF RS.70 ,000/- ON 31.03.2004 IN BANK OF BARODA, SB ACCOUNT NO.7887 IN THE NAME OF DR. S.P. YADAV THROUGH DD NO.218387 DATED 27.03.2004, UBI, MUMBAI. A COPY OF BANK STATEMENT AS PER PAPER BOOK PAGE NO.337. ALL THESE INVESTMENT ARE DULY REFLECTED IN THE RESP ECTIVE RETURNS AS WELL AS BOOKS OF ACCOUNTS. THE LEARNED A.O. HAS MA DE ADDITION OF RS.285000/- WITHOUT MENTIONING THE AFORESAID FIGURE ON PAGE NO.11 OF BK-1 THOUGH THE ASSESSEE HAS ALREADY EXPLAINED ALL THE ENTRY RECORDED ON THIS PAGE HENCE THE ADDITION OF RS.285,000/- MAY KINDLY BE DELETED. 30. THERE ARE NO OTHER MATERIALS OR DOCUMENTS POINT ED OUT BY THE REVENUE; THEREFORE, THERE IS NOTHING WRONG IN ACCEPTING ASSE SSEES EXPLANATION THAT OTHER ENTRIES NOTED IN DIARY ARE SIMILAR IN NATURE. THE REVENUE DID NOT DISPUTE ABOUT THE FACTS POINTED OUT BY THE ASSESSEE AND NOTED BY THE CIT(A). ALSO, NO SPECIFIC MATERIAL POINTED OUT BY THE REVENUE AGAINST THE FIN DING OF CIT(A). IT IS SECOND ROUND OF LITIGATION, THEREFORE, UNDER THE CIRCUMSTA NCES UNLESS SPECIFIC MATERIAL IS POINTED OUT AGAINST THE FINDING OF CIT(A), THE ORDE R OF THE CIT(A) REQUIRED TO BE UPHELD. ACCORDINGLY, WE UPHOLD THE FINDING OF CIT( A) ON THESE ADDITIONS WHICH HAVE BEEN DELETED BY THE CIT(A). ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 21 31. WITHOUT PREJUDICE TO THE ABOVE FINDING ON MERIT , WE FIND THAT VARIOUS SEPARATE ADDITIONS ARE NOT WARRANTED IN THE LIGHT O F THE FACT THAT THE ASSESSEE HIMSELF DISCLOSED ADDITIONAL INCOME OF RS.94,64,135/- FOR T HE SEARCHED YEARS 32. ON CONSIDERATION OF ADDITIONAL SURRENDERED INCO ME IN THE RETURN FILED UNDER SECTION 153A, WE ARE OF THE CONSIDERED VIEW THAT NO SEPARATE ADDITIONS ITEM-WISE WARRANTED, AS THE REVENUE HAS FAILED TO POINT OUT A NY SPECIFIC REASON FOR THESE SEPARATE ADDITIONS AND NOT COVERED BY ADDITIONAL IN COME DECLARED BY THE ASSESSEE. WE, THEREFORE, FIND THAT THE CIT(A) HAS RIGHTLY DEL ETED THE ADDITIONS. THE ORDER OF CIT(A) IS CONFIRMED IN RESPECT OF GROUND NOS.1(III) TO (IX). 33. IN THE RESULT, ITA NO.84/A/2011 FILED BY THE RE VENUE FOR ASSESSMENT YEAR 2001-02 IS DISMISSED. ITA NO.85/A/2011 ASSESSMENT YEAR 2002-03 34. IN THIS APPEAL THE REVENUE HAS RAISED THE FOLLO WING GROUNDS:- 1. THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN REITERATING HIS DECISION GIVEN IN HIS ORIGINAL APPE LLATE ORDER DATED 30.03.2010, THEREBY --- (I) NOT APPRECIATING THAT NO BOOKS OF ACCOUNT WERE FOUND IN ANY OF THE PREMISES WHERE SEARCH AND SEIZURE OPERATION WER E CARRIED OUT U/S 132 ON 23.03.2006. ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 22 (II) DELETING THE ADDITION OF RS.21,040/- MADE BY T HE AO ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PURCHASE OF JEWELLERY AS NO REPLY/EXPLANATION WAS FURNISHED BY ASSESSEE IN THIS REGARD. (III) DELETING THE ADDITION OF RS.12,32,184/- MADE BY THE AO ON ACCOUNT OF UNEXPLAINED INVESTMENT IN CONSTRUCTION O F HOSPITAL BUILDING IN THE NAME OF M/S SHIVAM SURGICAL NURSING HOME PVT. LTD. ON THE BASIS OF VALUERS REPORT. (IV) DELETING THE ADDITION OF RS.4,48,100/- MADE BY THE AO ON ACCOUNT OF UNEXPLAINED CASH CREDITS IN THE NAMES OF VARIOUS PERSONS AGGREGATING TO RS.4,48,100/- AS MENTIONED I N PARA-23 OF THE ASSESSMENT ORDER AS THE ASSESSEE HAD FAILED EITHER TO FILE CONFIRMATIONS FROM THESE PERSONS OR PRODUCE THEM DE SPITE THE FACT THAT ASSESSEE WAS REQUIRED SO TO DO VIDE NOTIC E DATED 27.09.2007. 2. THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED TO RE LY ON ASSESSEES WRITTEN SUBMISSION DATED 26.12.2007 AND THUS ALLOWI NG THE APPEAL WITHOUT GIVING DETAILED OWN FINDINGS AND ANY OPPORT UNITY TO THE ASSESSING OFFICER. 3. THAT THE ORDER OF LEARNED CIT(APPEAL) BEING ERRO NEOUS IN LAW AND ON FACTS MAY BE REVERSED AND THE ORDER OF AO MA Y KINDLY BE RESTORED. 4. CRAVES FOR LEAVE TO RAISE ANY GROUNDS OF APPEAL THAT MAY BE TAKEN AT THE TIME OF HEARING. 35. BRIEF FACTS OF THIS APPEAL ARE SIMILAR TO THE F ACTS AS NARRATED IN A.Y. 2001-02 ABOVE VIDE PARAGRAPH NOS.1 TO 7 OF THIS ORDER. 36. GROUND NO.1(I) IS IN RESPECT OF NOT APPRECIATING THAT NO BOOKS OF ACCOUNT WERE FOUND IN ANY OF THE PREMISES WHERE SEARCH AND SEIZURE OPERATION WERE CARRIED OUT UNDER SECTION 132 OF THE ACT ON 23.03.2006 AND GROUND NO.2, THAT THE LEARNED ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 23 CIT(A) WAS NOT JUSTIFIED TO RELY ON ASSESSEES WRIT TEN SUBMISSION DATED 26.12.2007 AND THUS ALLOWING THE APPEAL WITHOUT GIVING DETAILE D OWN FINDINGS AND ANY OPPORTUNITY TO THE ASSESSING OFFICER. THESE GROUND S OF APPEAL ARE IDENTICAL TO THE GROUNDS RAISED IN A.Y. 2001-02. IN THE LIGHT OF DE TAILED DISCUSSIONS MADE IN THAT YEAR IN PARAGRAPH NOS.10 & 11 OF THIS ORDER, BOTH T HESE GROUNDS ARE DISMISSED. 37. GROUND NO.1(II) RELATES TO ADDITION OF RS.21,040/- MADE BY THE A.O . ON ACCOUNT OF JEWELLERY IN THE YEAR UNDER CONSIDERATIO N 2002-2003. DURING THE COURSE OF SEARCH GOLD JEWELLERY OF 637.430 GMS. VALUED AT RS.4,10,839/- AND SILVER ORNAMENTS AND UTENSILS OF 1638 GMS. VALUED AT RS.17 ,088/- WERE FOUND. SOME OF THESE WERE FOUND FROM DIFFERENT LOCKERS OF SMT. RAD HIKA, SHRI S.S. YADAV, SHRI S.P. YADAV AND SMT. NEETU YADAV. AT THE TIME OF SE ARCH IT WAS FOUND THAT FAMILY MEMBERS WERE ALSO RESIDING WITH THE ASSESSEE. THE DETAILS IN THIS REGARD HAVE BEEN NOTED BY THE A.O. IN HIS ORDER AT PARAGRAPH NO.7. THE A.O. DID NOT SATISFY WITH REPLY OF ASSESSEE. THE A.O. MADE ADDITIONS IN DIFF ERENT YEARS AS UNDER :- (PAGE NO.7) ASSTT. YEAR AMOUNT 2002-03 21040 2003-04 26006 2004-05 28544 2005-06 51991 2006-07 21985 ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 24 38. AS DISCUSSED IN A.Y. 2001-02 IN PARAGRAPH NOS.1 0 & 11 OF THIS ORDER THAT IN SECOND ROUND OF LITIGATION THE CIT(A) DISCUSSED TEC HNICAL ISSUES AND DECIDED THE MATTERS ON MERIT AS DECIDED BY THE CIT(A) IN ORIGIN AL ORDER. IN THE IMPUGNED ORDER OF CIT(A), HE FOLLOWED HIS DISCUSSION MADE IN A.Y. 2001-02 IN ORIGINAL ORDER. 39. THE CIT(A) DELETED THE ADDITIONS ACCEPTING ASSE SSEES EXPLANATION AND SUBMISSIONS FOR ALL THE YEARS. THE CIT(A) NOTED TH AT ASSESSEE HAS EXPLAINED NATURE AND SOURCE OF JEWELLERY DURING SEARCH OPERATION IT SELF. DURING THE SEARCH, STATEMENT UNDER SECTION 132(4) OF THE ACT WAS RECOR DED WHEREIN SMT. RADHIKA EXPLAINED THAT JEWELLERY FOUND IN LOCKER BELONGED T O HER DAUGHTER SMT. MAMTA YADAV, MARRIED SISTER OF THE ASSESSEE. SMT. MAMTA YADAV DID NOT HAVE LOCKER AND HENCE SHE KEPT THE JEWELLERY FOR SAFE CUSTODY. THE GOLD AND SLIVER ORNAMENTS BELONGED TO HERSELF, HER MARRIED DAUGHTER AND SMT. MAMTA YADAV AND DAUGHTER-IN- LAW SMT. NEETU YADAV. THE ORNAMENTS FOUND WERE IDE NTIFIED. THESE ORNAMENTS WERE RECEIVED BY THEM AT THE TIME OF MARRIAGE AND O THER OCCASIONS. WHATEVER FRESH PURCHASES OF ORNAMENTS MADE WERE RECORDED IN BOOKS OF ACCOUNT AND EXPLANATION WAS FURNISHED VIDE LETTER DATED 26.12.2 007 & 13.12.2007. THE ASSESSEE HAS EXPLAINED ITEM-WISE DETAILS. IT WAS S UBMITTED THAT THE ORNAMENTS AMOUNTING TO RS.7,040/- WAS PURCHASED BY SHRI SRI R AM YADAV, BROTHER OF DR. SARJU SINGH YADAV AT THE OCCASION OF MARRIAGE OF TH EIR DAUGHTER FROM HIS OWN SOURCES. HE IS AN AGRICULTURIST HAVING HUGE LAND I N VILLAGES. ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 25 40. IN RESPECT OF ADDITION OF RS.14,000/-, THIS IS PERTAINING TO NECKLACE SET WHICH WAS PURCHASED FROM CHATMANI ORNAMENTS ON 12.09.2001 BUT ON THE BILL THE NAME OF THE ASSESSEE WAS NOT FOUND. THIS ORNAMENT WAS P URCHASED BY SMT. MAMTA YADAV, WIFE OF DR. R.S. YADAV WHO IS SEPARATELY ASS ESSED TO TAX. AN ADDITION OF RS.17,600/- HAS ALREADY BEEN MADE IN THE HANDS OF S MT. MAMTA YADAV IN A.Y. 2002-03 OUT OF WHICH THE JEWELLERY OF RS.14,000/- W AS PURCHASED. 41. IN RESPECT OF ADDITION OF RS.11,156/- MADE IN A .Y. 2003-04, THIS ORNAMENT WAS PURCHASED BY SMT. MAMTA YADAV, W/O. DR. R.S. YA DAV AND SISTER OF THE ASSESSEE FROM KANHAIYA SWARN KALA KENDRA ON 06.01.2 003. SMT. MAMTA YADAV WHO IS ASSESSED TO TAX AND THE SAID JEWELLERY HAS B EEN SHOWN IN HER BALANCE SHEET. 42. AS REGARDS JEWELLERY OF RS.14,850/-, THE BILL O F THIS JEWELLERY WAS IN THE NAME OF SHRI SHRI SRI RAM YADAV WHO IS BROTHER OF D R. SARJU SINGH YADAV. THE SAID JEWELLERY WAS PURCHASED BY DR. S. S. YADAV ON THE OCCASION OF THE MARRIAGE OF HIS DAUGHTER FROM HIS OWN SOURCES. 43. AS REGARDS THE ADDITION IN A.Y. 2004-05 OF RS.2 8,544/-, THE EXPLANATION FOR A.YS. 2004-05, 2005-06 & 2006-07 FURNISHED BY THE A SSESSEE AND NOTED BY CIT(A) HAS BEEN NOTED AT PAGE NO.25 & 26 OF CIT(A)S ORDER . THE RELEVANT EXPLANATION ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 26 CONSIDERED BY THE CIT(A) ARE REPRODUCED FROM PAGE N OS.25 & 26 OF CIT(A)S ORDER AS BELOW:- (PAGE NOS. 25 & 26) C) ASSESSMENT YEAR 2004-05 RS.28,544/- (RS.3238/- DATED 15.12.2003 RS.11400/- DATED 21.11.2003 AND RS.2750/ - DATED 10.02.2004 = RS.17388/- AMOUNT OF RS.11156/- DATED 06.01.2003 WAS AGAIN ADDED IN THIS YEAR AND ADDITION ONLY BE RS.17 388/- IN PLACE OF 28544/-). A) THAT, THE LEARNED ASSESSING OFFICER HAS MADE AN ADDITION UNDER THE HEAD UNEXPLAINED EXPENDITURE OF JEWELLERY RS.28544/- BUT A SUM OF RS.11156/- WHICH HAS ALREADY BEEN ADDED FOR THE A.Y. 2003- 04. HENCE THE ADDITION OF RS.11156/- MAY KINDLY BE REDUCED FROM ADDITION OF RS.28544/- B) THAT, THE LEARNED ASSESSING OFFICER HAS MADE AN ADDITION AMOUNT OF RS.17388/- VIDE BILLS DATED 25.12.2003 RS .3238/- VIDE LP 2 PAGE 36, RS.11400/- DATED 21.11.2003 VIDE LP 2 PAGE NO.37 AND RS.2750/- VIDE LP2 PAGE NO.38 PURCHASE OF JEWELLERY FROM J.J. JEWELERS A COPY OF THE SAID BILL IS ENCLOSED AS PAG E PAPER BOOK PAGE NO.226. C) THAT, THE SAID PURCHASE OF JEWELLERY FROM THE SA ID DATE AMOUNT OF RS.17388/- HAS BEEN DONE BY SMT. MAMTA YADAV WHO HAS ALREADY MADE AN ADDITION IN HER BALANCE SHEET FOR THE A.Y. 2004-05 IN ASSETS SIDE OF BALANCE SHEET. WHICH COPY OF BALANCE SHEET HAS ALREADY BEEN SUBMITTED VIDE REPLY DATED 26.12.2007 VIDE PAGE NO. 644 & 217. D) THAT, THE SAID INVESTMENT HAS ALREADY BEEN SHOWN IN THE BALANCE SHEET FOR THE A.Y. 2004-05 IN THE HAND OF S MT. MAMATA YADAV. HENCE THE ADDITION MADE IN THE HAND OF THE ASSESSEE MAY KINDLY BE DELETED. D) ASSESSMENT YEAR 2005-06 RS.51991/- (3300/- DATED 24.02.2005, RS.20691/- DATED 24.04.2004 AND 28000/- DATED 20.12.2004). ACTUAL ADDITION RS. ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 27 A) THAT, THE LEARNED ASSESSING OFFICER HAS MADE ADD ITION OF RS.20691/- IN PLACE OF 2091/- A COPY OF LP 2 PAGE N O.39 IS ENCLOSED AS PER PAPER BOOK PAGE NO.224. IT IS HEREBY SUBMIT TED THAT IN THE SAID PAGE AMOUNT HAS BEEN WRITTEN RS.2069/- BUT LEARNED ASSESSING OFFICER HAS TAKEN FIGURE OF RS.20691/-. HENCE THE ADDITION OF RS.18622/- MAY KINDLY BE DELETED. AND THE ONLY ADDITION WILL BE C ALLED FOR RS.2069/-. B) THAT, SMT. MAMATA YADAV WHO IS THE SISTER OF THE ASSESSEE HAS PURCHASED JEWELLERY FROM J.J. JEWELERS ON 24.04.200 4 VALUE OF RS.2069/- WHICH HAS ALREADY BEEN SHOWN IN THE BALAN CE SHEET FOR THE A.Y. 2005-06 IN THE HAND OF SMT. MAMATA YADAV. C) THAT, A SUM OF RS.3300/- DATED 24.02.2005, AS PE R ANNEXURE LP 2 PAGE NO.33. THE JEWELLERY WAS PURCHASED FROM J.J . JEWELERS WHICH HAS ALREADY BEEN SHOWN IN THE BOOKS OF SMT. MAMATA YADAV FOR A.Y. 2005-06 A COPY OF BILL DATED 24.02.2005 IS ENCLOSED AS PER PAPER BOOK PAGE NO.230. D) THAT, SMT. MAMATA YADAV HAS ALREADY SHOWN THE SA ID INVESTMENT DURING THE YEAR I.E. A.Y. 2005-06 RS.536 9/- (RS.2069/- + RS.3300/-). A COPY OF BALANCE SHEET WHICH HAS ALRE ADY BEEN SUBMITTED BEFORE THE LEARNED ASSESSING OFFICER APPE NDIX H (4) DATED 26.12.2007 IS ENCLOSED AS PER PAPER BOOK PAGE NO.64 1 & 217. E) THAT, THE LEARNED ASSESSING OFFICER HAS MADE AN ADDITION OF RS.28000/- DATED 20.12.2004 VIDE LP 2 PAGE NO.41 FO R PURCHASE OF JEWELLERY BY DR. S.S. YADAV, R/O. S 25/265 K3, SARS AULI, CANTT., VARANASI, A COPY OF CASH MEMO NO.1336 OF LP 2 IS EN CLOSED AS PER PAPER BOOK NO.222. IT IS HEREBY SUBMITTED THAT AS PER THE SEARCH RECOR DS OF MARKED LP 2 ORNAMENTS HAS BEEN PURCHASE BY DR. S.S. YADAV FROM CHETMANI ORNAMENTS PVT. LTD. HENCE THE ADDITION MADE IN THE HAND OF THE ASSESSEE MAY KINDLY BE DELETED. IT IS HEREBY MENTIONED THAT DR. S.S. YADAV WHO IS THE FATHER OF THE ASSESSEE IS A GOVERNMENT SERVANT SINCE 1969 AND ASSESSED TO TAX SEPARATELY WHICH COPY OF ACKNOWLEDGEMENT FOR PROOF OF FILING RETURN OF INCOME IS ENCLOSED AS PER PAPER BOOK PAGE NO.217 A & 217 B. HE HAS MADE PURCHASE FROM OUR SALARY HENCE THE ADDITIO N MADE IN THE HAND OF THE ASSESSEE MAY KINDLY BE DELETED. IT IS HEREBY SUBMITTED THAT ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 28 THE ASSESSEE HAS ALREADY SUBMITTED THE EXPLANATION VIDE EXPLANATION DATED 26.12.2007 BEFORE THE LEARNED ASSESSING OFFIC ER HENCE THE ADDITION MADE BY THE LEARNED A.O. MAY KINDLY BE DEL ETED. E) ASSESSMENT YEAR 2006-07 RS.21985/- (4160/- DATED 14.04.2005, RS.13105/- DATED 22.04.2005 AND 4720/- DATED 22.04.2005) A) THAT THE LEARNED ASSESSING OFFICER HAS MADE AN A DDITION AMOUNT OF RS.21985/- (4160/- DATED 17/04/2005 + RS. 13105 DATED 22/04/2005 AND + RS.4720/- DATED 22/04/2005). ALL THESE JEWELLERY HAS BEEN PURCHASED FROM J.J. JEWELERS BY SMT. MAMTA YADAV WHO IS ASSESSED TO TAX SEPARATELY. A COPY OF ACKNOWLEDGEM ENT AND BALANCE SHEET FOR A.Y. HAS ALREADY BEEN SUBMITTED VIDE REPL Y DATED 26/12/2007 APPENDIX H(4) WHICH COPY IS ENCLOSED AS PER PAPER B OOK PAGE NO.636 TO 658 & 217. B) THAT SMT. MAMTA YADAV HAS ALREADY MADE AN ADDITI ON AMOUNT OF RS.34137/- DURING THE YEAR OUT OF WHICH THE JEWE LLERY PURCHASED ON AFORESAID DATE VALUE OF RS.21985/- IS INCLUDED IN T HE ADDITION MADE DURING THE YEAR RS.34137/-. C) THAT THE AFORESAID VALUE OF JEWELLERY HAS BEEN P URCHASED BY SMT. MAMTA YADAV HENCE THE ADDITION MADE IN THE HAN D OF ASSESSEE ON SUBSTANTIVE BASIS MAY KINDLY BE DELETED. IT IS HEREBY SUBMITTED THE YEAR WISE ADDITION HAS B EEN MADE UNDER THE HEAD JEWELLERY IN THE NAME OF ASSESSEE DR . SHIV PRASAD YADAV ON SUBSTANTIVE BASIS WHICH HAS ALREADY BEEN E XPLAINED ABOVE MAY KINDLY BE DELETED IN THE INTEREST OF JUSTICE. 44. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PA RTIES AND RECORDS PERUSED. WE FIND THAT THE ASSESSEE HAS FURNISHED ALL NECESSA RY EXPLANATIONS WHICH ARE EVIDENT AS DISCUSSED ABOVE. THERE IS NO DISPUTE AB OUT THE FACT THAT AT THE TIME OF SEARCH OTHER FAMILY MEMBERS OF THE ASSESSEE WERE AL SO LIVING WITH HIM. IT IS ALSO NOT DISPUTED FACT THAT ORNAMENTS WERE BELONGING TO DIFFERENT FAMILY MEMBERS ALSO. ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 29 THE ORNAMENTS FOUND FROM THE LOCKER WERE DULY IDENT IFIED BY DIFFERENT FAMILY MEMBERS AT THE TIME OF SEARCH. IN A.Y. 2004-05, TH E A.O. MADE ADDITION OF RS.28,544/- WHICH INCLUDES DOUBLE ADDITION AMOUNTIN G TO RS.11,156/- WHICH HAS ALREADY BEEN CONSIDERED WHILE MAKING ADDITION IN A. Y. 2003-04. FOR A.YS. 2002- 03 & 2003-04 THE ASSESSEE MADE NECESSARY EXPLANATIO N WHICH IS NOTED ABOVE ALONG WITH THE FINING OF CIT(A) NOTED BY US. FOR A.Y. 20 04-05, IT WAS FOUND THAT THERE WAS DOUBLE ADDITION OF RS.11,156/- WHICH HAS ALREAD Y BEEN CONSIDERED IN A.Y.2003-04. IN A.Y. 2004-05, THE JEWELLERY OF RS. 17,388/- IS SHOWN BY SMT. MAMTA YADAV IN HER BALANCE SHEET. IN A.Y. 2005-06, THE A.O. MADE ADDITION OF RS.20,691/- ON THE BASIS OF LP-2 PAGE NO.39 WHEREAS IN FACT THE CORRECT AMOUNT WAS RS.2,091/-. THIS JEWELLERY OF RS.2,069/- BELON GED TO SMT. MAMTA YADAV WHO IS SISTER OF THE ASSESSEE. SHE HAS SHOWN THIS JEWE LLERY IN HER BALANCE SHEET IN THE A.Y. 2005-06. 45. SIMILAR IS THE POSITION IN RESPECT OF JEWELLERY OF RS.3,300/-. AS REGARDS JEWELLERY OF RS.2,800/-, ADDITION MADE IN A.Y. 2005 -06, IT WAS EXPLAINED BY THE ASSESSEE THAT ORNAMENT BELONGED TO DR. S.S. YADAV, FATHER OF THE ASSESSEE WHO WAS A GOVERNMENT SERVANT SINCE 1969 AND ASSESSED TO TAX SEPARATELY. REGARDING THE ADDITION OF RS.21,985/- IN A.Y. 2006-07, THE ASSESS EE EXPLAINED THAT THE ADDITION OF RS.34,137/- HAS ALREADY BEEN MADE IN THE HANDS OF S MT. MAMTA YADAV AND THIS JEWELLERY OF RS.21,985/- INCLUDED IN THAT AMOUNT. IN THE LIGHT OF DETAILED ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 30 EXPLANATION SUBMITTED BY THE ASSESSEE, WHEREIN THE ITEM-WISE JEWELLERY HAS BEEN EXPLAINED, THE JEWELLERY WERE NOT BELONGED TO THE A SSESSEE OR WHATEVER BELONGED TO THE ASSESSEE THE ASSESSEE HAS FURNISHED NECESSARY E XPLANATION. THE EXPLANATION WAS ALSO FURNISHED IN RESPECT OF JEWELLERY BELONGIN G TO OTHER FAMILY MEMBERS ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. THE REV ENUE HAS FAILED POINT OUT ANY CONTRARY MATERIAL TO THE FINDING OF THE CIT(A). UN DER THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE CIT(A) HAS RIGHTLY DE LETED THE ADDITION IN ALL THE YEARS. ORDERS OF THE CIT(A) ARE CONFIRMED. 46. GROUND NO.1(III) PERTAINS TO ADDITION OF RS.12,32,184/- ON ACCOUNT OF CONSTRUCTION OF HOSPITAL BUILDING. 47. THE BRIEF FACTS OF THIS GROUND ARE THAT THE A.O . NOTICED THAT THE NURSING HOME PROPERTY IN WHICH HOSPITAL IN THE NAME OF M/S SHIVAM SURGICAL NURSING HOME PVT. LTD. IS RUN BY THE ASSESSEE. THE A.O. RE FERRED THE MATTER TO THE VALUATION OFFICER UNDER SECTION 142A OF THE ACT. T HE D.V.O. VIDE LETTER DATED 03.12.2007 SUBMITTED HIS REPORT. THE A.O. AFTER CO NSIDERING ASSESSEES SUBMISSION MADE THE ADDITION ON ACCOUNT OF DIFFERENCE IN BETWE EN THE INVESTMENT DECLARED BY THE ASSESSEE AND CONSTRUCTION COST ESTIMATED IN VAL UATION REPORT. THE ADDITION MADE IN DIFFERENT YEARS ARE NOTED FROM PAGE NO.13 O F A.O.S ORDER AS UNDER :- (PAGE NO.13) ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 31 FINANCIAL YEAR DECLARED COST IN CONSTRUCTION/INVESTMENT BY ASSESSEE (RS.) F.Y. WISE ESTIMATED COST OF CONSTRUCTION (RS.) DIFFERENCE OF INVESTMENT 2001-02 2098407 3330591 1232184 2002-03 1043790 1656703 612913 2003-04 60550 96105 35555 2004-05 594885 944201 349316 TOTAL 3797632 6027600 48. THE ADDITION MADE BY THE A.O. HAS BEEN DELETED BY THE CIT(A) ON THE GROUND THAT THE ORDER OF THE A.O. SUFFERS VARIOUS I NFIRMITIES. THE CIT(A) OBSERVED THAT THE ACTION OF THE A.O. REFERRING THE MATTER TO THE D.V.O. WITHOUT EXAMINING THE CORRECTNESS AND COMPLETENESS IS INCORRECT ACTION OF THE A.O. THE A.O. DID NOT CONSIDER THE DIFFERENT YEARS OF CONSTRUCTION. THE CIT(A) NOTED THAT IN FACT THE ASSESSEE HAS DECLARED MORE COST OF CONSTRUCTION THA N ESTIMATED BY THE D.V.O. 49. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PA RTIES AND RECORDS PERUSED. THE SUBMISSION OF THE ASSESSEE IS THAT THE ASSESSEE MAINTAINED PROPER BOOKS OF ACCOUNT DULY SUPPORTED BY RELEVANT BILLS AND VOUCHE RS FOR THE CONSTRUCTION OF THE BUILDING. THERE WAS NO OCCASION TO REFER THE MATTE R TO THE D.V.O. IT IS ALSO SUBMISSION OF THE ASSESSEE THAT THE CASE OF FIRM M/ S. SHIVAM SURGICAL NURSING HOME PVT. LTD. WERE NOTICED TO FILE A RETURN UNDER SECTION 153A/153C OF THE ACT ISSUED ON 01.11.2007. THE FIRM WAS REGULARLY ASSES SED TO TAX AND RETURN WAS FILED UNDER SECTION 139. IT IS ALSO SUBMISSION OF THE AS SESSEE THAT THE BUILDING WAS INSPECTED BY D.V.O. ON 12.11.2007. AT THAT TIME AL SO CERTAIN WORK WAS INCOMPLETE ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 32 AND THE WORK WAS GOING ON. THE ASSESSEE HAS FURNIS HED THE COMPLETE DETAILS OF INVESTMENT SUPPORTED BY BILLS AND VOUCHERS REGARDIN G PURCHASE OF MATERIAL, MUSTER ROLL ETC. VIDE LETTER DATED 19.11.2007. THE CONSTR UCTION WORK WAS STARTED IN F.Y. 2001-02. UPTO 12.11.2007, THE ASSESSEE HAS ALREADY SHOWN INVESTMENT IN BUILDING RS.74,11,061/-. THE PROPERTY WAS OWNED BY THE COMP ANY AND UPTO A.Y. 2005-06 BY THE FIRM WHICH IS DISTINCT ASSESSEE AND ADDITION , IF ANY, CAN BE MADE AS UNEXPLAINED INVESTMENT UNDER SECTION 69 ONLY IN THE HANDS OF THE ASSESSEE WHO MADE THE INVESTMENT. THEREFORE, ADDITION ON SUBSTA NTIVE BASIS IN THE HANDS OF THE ASSESSEE WAS PRIMA FACIE ILLEGAL. THE BOOKS OF ACC OUNT OF THE FIRM AND COMPANY WHEREIN THE INVESTMENT HAS BEEN REFLECTED HAVE BEEN ACCEPTED IN RESPECTIVE CASES. THEREFORE, THE PROVISIONS OF SECTION 69 CANNOT BE I NVOKED. THE ASSESSEE FILED RETURN OF FIRM AS WELL AS COMPANY FROM A.YS. 2001-0 2 TO 2006-07 WITHIN THE STIPULATED TIME UNDER SECTION 139 OF THE ACT AND TH E INVESTMENT HAS ALREADY BEEN DISCLOSED BY THE ASSESSEE AS FIXED ASSET OF THE COM PANY. THE VALUATION REPORT ITSELF SUFFERS VARIOUS MISTAKES, ANOMALIES, SELF CONTRADIC TION, AND FACTUAL ERRORS. SOME OF SUCH INFERENCE POINTED OUT TO THE CIT(A) WHICH HAS BEEN RECORDED BY THE CIT(A) AT PAGE NO.50 OF HIS ORDER. THE INVESTMENT IN HOSP ITAL BUILDING HAS BEEN DECLARED MORE THAN THE INVESTMENT ESTIMATED BY THE D.V.O. T HIS FACT IS EVIDENT FROM THE FOLLOWING TABLE WHICH IS REPRODUCED FROM PAGE NO.47 OF CIT(A)S ORDER :- (PAGE NO. 47) ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 33 FINANCIAL YEAR DECLARED COST OF CONSTRUCTION IN THE RETURN ESTIMATED COST BY THE VALUER DIFFERENCE OF INVESTMENT 2001-02 2098407/- 3330591/- 1232184/- 2002-03 1043790/- 1656703/- 612913/- 2003-04 60550/- 96105/- 35555/- 2004-05 594885/- 944201/- 349316/- 2005-06 1773670.65 NOT CONSIDERED -- 2006-07 848804.75 NOT CONSIDERED -- 2007-08 (UPTO 12.11.2007) 1026954/- NOT CONSIDERED -- TOTAL 7411061.40 6027600/- 2229968/- 50. IN THE LIGHT OF DETAILED DISCUSSION, WE FIND TH AT THE CONSTRUCTION COST HAS BEEN DECLARED BY THE ASSESSEE MORE THAN WHAT ESTIMATED B Y THE D.V.O. THE PROPERTY WAS OWNED BY COMPANY AND UPTO THE A.Y. 2005-06 OWNE D BY THE FIRM WHICH IS SEPARATE ASSESSEE. WE FIND THAT THE A.O. HAS MADE THE ADDITION WITHOUT COMPLETE APPRECIATION OF THE FACTS. IN THE LIGHT OF THAT AN D IN THE LIGHT OF DETAILED DISCUSSIONS MADE ABOVE, WE DO NOT FIND ANY INFIRMITY IN THE ORD ER OF CIT(A) IN DELETING THE ADDITION. ORDER OF CIT(A) IS CONFIRMED ON THE ISSU E. 51. GROUND NO.1(IV) IS IN RESPECT OF ADDITION OF RS.4,48,100/- ON ACCO UNT OF UNEXPLAINED CASH CREDITS. THE A.O. MADE ADDITION O F TOTAL UNSECURED LOAN AFTER REDUCING OPENING BALANCE OF R.2,85,000/-. THE FACT S OF THIS GROUND ARE SIMILAR TO THE FACTS IN A.Y. 2001-02 WHICH HAS BEEN DISCUSSED AND DECIDED IN ITA NO.84/A/2011 FOR A.Y. 2001-02 VIDE PARA NO.13 TO 2 3 OF THIS ORDER. FOLLOWING ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 34 THE SAID DISCUSSION, WE FIND THAT THE CIT(A) HAS RI GHTLY DELETED THE ADDITION. ORDER OF THE CIT(A) IS CONFIRMED. 52. IN THE RESULT, ITA NO.85/A/2011 FILED BY THE RE VENUE FOR ASSESSMENT YEAR 2002-03 IS DISMISSED. ITA NO.86/A/2011 ASSESSMENT YEAR 2003-04 53. THE GROUNDS RAISED BY THE REVENUE IN ITS APPEAL ARE AS UNDER:- 1. THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN REITERATING HIS DECISION GIVEN IN HIS ORIGINAL APPE LLATE ORDER DATED 30.03.2010, THEREBY --- (I) NOT APPRECIATING THAT NO BOOKS OF ACCOUNT WERE FOUND IN ANY OF THE PREMISES WHERE SEARCH AND SEIZURE OPERATION WER E CARRIED OUT U/S 132 ON 23.03.2006. (II) DELETING THE ADDITION OF RS.26,006/- MADE BY T HE AO ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PURCHASE OF JEWELLERY AS NO REPLY/EXPLANATION WAS FURNISHED BY ASSESSEE IN THIS REGARD. (III) DELETING THE ADDITION OF RS.50,000/- MADE BY THE AO ON ACCOUNT OF UNEXPLAINED INVESTMENT IN KVP ON 09.12.2002. (IV) DELETING THE ADDITION OF RS.6,12,913/- MADE BY THE AO ON ACCOUNT OF UNEXPLAINED CASH CREDITS IN CONSTRUCTION OF HOSPITAL BUILDING IN THE NAME OF M/S SHIVAM SURGICAL NURSING HOME PVT. LTD. ON THE BASIS OF VALUERS REPORT. (V) DELETING THE ADDITION OF RS.3,00,000/- MADE BY THE AO ON ACCOUNT OF UNEXPLAINED GIFT AS THE ASSESSEE HAD FAI LED TO PROVE THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF T HE PERSON OR ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 35 PRODUCE THE PERSON FOR EXAMINATION THOUGH SPECIFICA LLY REQUIRED TO DO SO BY THE AO BY NOTICE DATED 27.09.2 007. (VI) DELETING THE ADDITION OF RS.7,50,000/- MADE BY THE AO ON ACCOUNT OF UNEXPLAINED CASH CREDIT OF RS.4,50,000/- IN THE NAME OF SMT. MEDHA BAHARDWAJ AND RS.3,00,000/- IN THE NA ME OF SRI RAJSRI BHARDWAJ AS THE ASSESSEE HAD FAILED TO PROVE THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE PERSONS OR PRODUCE THE PERSON FOR EXAMINATION THOUGH SPECIFICALLY REQUIRED TO DO SO BY THE AO BY NOTICE DATED 27.09.2007. (VII) DELETING THE ADDITION OF RS.1,89,342/- MADE B Y THE AO ON ACCOUNT OF FICTITIOUS LIABILITY BY WAY OF PROFESSIO NAL FEE PAYABLE. 2. THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED TO REL Y ON ASSESSEES WRITTEN SUBMISSION DATED 26.12.2007 AND THUS ALLOWI NG THE APPEAL WITHOUT GIVING DETAILED OWN FINDINGS AND ANY OPPORT UNITY TO THE ASSESSING OFFICER. 3. THAT THE ORDER OF LEARNED CIT(APPEAL) BEING ERRO NEOUS IN LAW AND ON FACTS MAY BE REVERSED AND THE ORDER OF AO MA Y KINDLY BE RESTORED. 4. CRAVES FOR LEAVE TO RAISE ANY GROUNDS OF APPEAL THAT MAY BE TAKEN AT THE TIME OF HEARING. 54. GROUND NO. 1(I) & 2 ARE IDENTICAL TO THE GROUND RAISED IN A.Y. 2001-02 . IN THE LIGHT OF DETAILED DISCUSSIONS MADE IN THAT YEAR IN PARAGRAPH NOS.10 & 11 OF THIS ORDER, BOTH THESE GROUNDS ARE DISMISSED. 55. GROUND NO. 1(II) PERTAINS TO ADDITION OF RS.26,000/-. THIS ADDITIO N HAS BEEN MADE BY THE A.O. ON ACCOUNT OF JEWELLERY. THE FACT S OF THIS GROUND ARE IDENTICAL TO THE FACTS IN A.Y. 2002-03 IN ITA NO.85/A/2011. IN T HE LIGHT OF THE DETAILED ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 36 DISCUSSION MADE IN THE A.Y. 2002-03 VIDE PARAGRAPH NOS.37 TO 45 OF THIS ORDER, WE FIND THAT THE CIT(A) HAS RIGHTLY DELETED THE ADDITI ON OF RS.26,006/-. ORDER OF THE CIT(A) IS CONFIRMED. 56. GROUND NO.1(III) IS IN RESPECT OF ADDITION OF RS.50,000/-. THE A.O . MADE THE ADDITION OF RS.50,000/- ON THE BASIS OF ONE LOO SE PAPER FOUND AT THE TIME OF SEARCH. THE A.O. NOTED THAT ENTRY APPEARING IN THE NAME OF AKSHAY IS INVESTMENT IN K.V.P. ON 09.12.2002 FOR RS.50,000/-, SOURCE OF WHICH WAS NOT EXPLAINED BY THE ASSESSEE. THE CIT(A) DELETED THE SAID ADDITION. 57. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PA RTIES AND RECORDS PERUSED. THE A.O. MADE ADDITION OF RS.50,000/- ON THE BASIS OF A LOOSE PAPER FOUND AT THE TIME OF SEARCH. IN THE SAID LOOSE PAPER RS.50,000/ - (AFTER CORRECTION ON LOOSE PAPER THE AMOUNT WAS RS.5,000/-) IN THE NAME OF AKSHAY DA TED 09.12.2002 TO 09.08.2010 WAS NOTED. THE A.O. WAS OF THE VIEW THAT THE ASSES SEE INVESTED RS.50,000/- IN K.V.P. ON 09.12.2002 IN THE NAME OF AKSHAY FOR WHIC H NO EXPLANATION WAS FURNISHED. IT WAS THE SUBMISSION OF THE ASSESSEE T HAT THE INVESTMENT OF RS.5,000/- WAS K.V.P. PERTAINING TO AKSHAY KUMAR, SON OF SHRI SHIV POOJAN YADAV WHO MADE THIS INVESTMENT. SINCE THIS INVESTMENT WAS MA DE ALONG WITH INVESTMENT BY OTHER FAMILY MEMBERS, ON SAME DATE FROM THE SAME AG ENT, THEREFORE, IT WAS NOTED ON THIS PAGE. THE INVESTMENT WAS MADE IN THE NAME OF AKSHAY, THEREFORE, IT CAN BE ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 37 CONSIDERED IN THE HANDS OF AKSHAY ONLY AND NOT IN T HE HANDS OF THE ASSESSEE. THE ADMITTED FACTS OF THE CASE ARE THAT THE INVESTMENT IN THE NAME OF TO AKSHAY KUMAR, SON OF SHRI SHIV POOJAN YADAV AS PER LOOSE PAPER FO UND THEREFORE THE INVESTMENT IN OTHER NAME CAN NOT BE ADDED IN THE HANDS OF THE ASS ESSEE UNLESS MATERIAL FOUND THAT INVESTMENT WAS MADE BY THE ASSESSEE IN BENAMI NAME. SINCE THERE IS NO SUCH MATERIAL ON RECORD NOR THE SAME HAS BEEN POINTED OU T AT THE TIME OF HEARING, WE THEREFORE, FIND THAT THE CIT(A) HAS RIGHTLY DELETED THE ADDITION. 58. GROUND NO.1(IV) IS IN RESPECT OF ADDITION OF RS.6,12,913/-. THE A .O. MADE ADDITION OF RS.6,12,913/- ON ACCOUNT OF UNDISCLOSED INVESTMENT IN IMMOVABLE PROPERTIES, M/S. SHIVAM SURGICAL NURSING HOME PVT. LTD. THIS ISSUE HAS ALREADY BEEN DISCUSSED IN DETAIL IN A.Y. 2002-03 IN PARA NO S.46 TO 50 OF THIS ORDER. FOLLOWING THE ABOVE DISCUSSION, WE FIND THAT THE CI T(A) HAS RIGHTLY DELETED THE ADDITION OF RS.6,12,913/-. ORDER OF THE CIT(A) IS CONFIRMED ON THE ISSUE. 59. GROUND NO.1(V) RELATES TO ADDITION OF RS.3,00,000/-. DURING THE ASSESSMENT PROCEEDINGS, THE A.O. NOTICED THAT THE ASSESSEE HAS TAKEN GIFTS FROM VARIOUS PERSONS. THE A.O. NOTICED THAT THE ASSESSEE HAS TA KEN THE GIFT CHEQUES AND THE AMOUNT WAS RETURNED IN CASH AS FOUND FROM ONE OF TH E SEIZED PAPER MARKED AS PAGE OF LP-3. THE A.O. REPRODUCED THE DETAILS OF THE SA ID SEIZED PAPER IN HIS ORDER AT PARAGRAPH NO.21. THE ASSESSEE HAS FAILED TO FURNIS H SATISFACTORY EXPLANATION. ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 38 THEREFORE, THE A.O. MADE THE ADDITION OF AMOUNTS OF GIFTS FOR DIFFERENT YEARS AS UNDER:- A.Y. 2003-04 RS.3,00,000/- A.Y. 2004-05 RS.12,20,000/- A.Y. 2005-06 RS.1,10,000/- 60. THE CIT(A) HAS DELETED THE ADDITION 61. IT HAS BEEN NOTICED FROM THE ORDER OF THE CIT( A) THAT THE ASSESSEE RECEIVED GIFTS OF RS.3,00,000/- FROM FATHER DR. S.S. YADAV T HROUGH BANKING CHANNEL. THE ASSESSEE FURNISHED COPY OF GIFT DEED, PHOTOCOPY OF BANK STATEMENT OF THE DONOR, ACKNOWLEDGEMENT OF RETURN FILED. THE ASSESSEE FURNI SHED ALL THE RELENT DOCUMENTS TO DISCHARGE THE BURDEN REGARDING IDENTITY, CREDITW ORTHINESS AND GENUINENESS OF THE TRANSACTION. THE GIFT OF RS.3,00,000/- HAS BEEN SH OWN IN THE BALANCE SHEET AS WELL AS IN THE RETURN OF INCOME FOR THE A.Y. 2003-04 WHI CH WAS FILED UNDER SECTION 139 OF THE ACT. 62. IN RESPECT OF ADDITION IN A.Y. 2004-05 AND 2005 -06, IT WAS SUBMITTED BY THE ASSESSEE THAT THE ASSESSEE HAS FURNISHED ALL THE RE LEVANT MATERIALS TO DISCHARGE THE BURDEN OF IDENTITY, CREDITWORTHINESS AND GENUINENES S OF THE TRANSACTIONS. IT WAS SUBMITTED BEFORE THE CIT(A) THAT THE ASSESSEE IS RE ADY TO PRODUCE THE DONOR ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 39 PERSONALLY BEFORE HIM IF OPPORTUNITY IS PROVIDED IN THIS RESPECT. HOWEVER, THEY MAY BE INDEPENDENTLY CALLED BY INVOKING PROVISIONS OF SECTION 131 OF THE ACT. 63. WE HAVE HEARD LEARNED REPRESENTATIVES OF THE PA RTIES. THE CONTENTION OF THE ASSESSEE BEFORE CIT(A) WAS THAT THE A.O. DID NOT CO NSIDER VARIOUS DETAILS FURNISHED BY THE ASSESSEE. THE ASSESSEE WAS READY TO PRODUCE THE DONORS FOR EXAMINATION. WE FIND THAT THE CIT(A), INSTEAD OF SENDING BACK TH E MATTER TO THE FILE OF A.O. FOR EXAMINATION OF DONORS AND OTHER MATERIALS FILED BY THE ASSESSEE OR EXAMINING THE ISSUES HIMSELF, HE HAS DELETED THE ADDITIONS. AFTE R CONSIDERING TOTALITY OF THE FACTS OF THE CASE UNDER CONSIDERATION, WE THINK IT PROPER TO SEND THIS MATTER TO THE FILE OF A.O. WITH THE DIRECTION TO DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW AFTER PROVIDING OPPORTUNITY OF HEARING TO THE ASSESSEE. 64. GROUND NO.1(VI) IS IN RESPECT OF ADDITION OF RS.7,50,000/- MADE BY THE A.O. UNDER SECTION 68 OF THE ACT. THE CIT(A) DELETED TH IS ADDITION. 65. THE FACTS OF THIS ISSUE ARE IDENTICAL TO THE FA CTS OF THE GROUND NO.1(II) DECIDED IN A.Y. 2001-02 IN THIS ORDER VIDE PARAGRAPH NOS.13 TO 23. FOLLOWING THE SAID DISCUSSION, WE FIND THAT THE CIT(A) HAS RIGHTLY DEL ETED THE ADDITION. ORDER OF THE CIT(A) IS CONFIRMED. ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 40 66. GROUND NO. 1(VII) RELATES TO ADDITION OF RS.1,89,342/-. THE A.O. MA DE THIS ADDITION ON ACCOUNT OF FICTITIOUS LIABILITY IN THE NAME OF PROFESSIONAL FEES PAYABLE. THE CIT(A) DELETED THE ADDITION. 67. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PA RTIES AND RECORDS PERUSED. THE SUBMISSION OF THE ASSESSEE THAT THE LIABILITY O F RS.1,89,342/- ARE ON ACCOUNT OF OUTSTANDING PROFESSIONAL FEES. THE SAID AMOUNT HAS BEEN REFLECTED IN THE BALANCE SHEET FILED ALONG WITH RETURN OF INCOME FOR A.Y. 20 03-04 UNDER SECTION 139 OF THE ACT. DURING THE COURSE OF SEARCH, NO RELEVANT MATE RIAL WAS FOUND BASED ON WHICH IT CAN BE SAID THAT THE SAID LIABILITY WAS BOGUS LIABI LITY. IN THE LIGHT OF EXPLANATION SUBMITTED BY THE ASSESSEE AND IN THE LIGHT OF MATER IAL FOUND AT THE TIME OF SEARCH, THE OUTSTANDING LIABILITIES ARE APPEARING IN THE BA LANCE SHEET FILED ALONG WITH RETURN OF INCOME FILED UNDER SECTION 139 OF THE ACT . IN THE LIGHT OF DETAILED DISCUSSIONS MADE IN PARAGRAPH NOS.22 & 23 OF THIS O RDER, SUCH LIABILITIES CANNOT BE ADDED MERELY ON THE BASIS OF PRESUMPTION. WE, THER EFORE, FIND THAT THE CIT(A) HAS RIGHTLY DELETED THE ADDITION. ORDER OF THE CIT(A) IS CONFIRMED. 68. IN THE RESULT, ITA NO.86/A/2011 FILED BY THE RE VENUE FOR ASSESSMENT YEAR 2003-04 IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ITA NO.87/A/2011 FOR ASSESSMENT YEAR 2004-05 ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 41 69. THE GROUNDS RAISED BY THE REVENUE IN ITS APPEAL ARE AS UNDER :- 1. THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN REITERATING HIS DECISION GIVEN IN HIS ORIGINAL APPE LLATE ORDER DATED 30.03.2010, THEREBY --- (I) NOT APPRECIATING THAT NO BOOKS OF ACCOUNT WERE FOUND IN ANY OF THE PREMISES WHERE SEARCH AND SEIZURE OPERATION WER E CARRIED OUT U/S 132 ON 23.03.2006. (II) DELETING THE ADDITION OF RS.28,544/- MADE BY T HE AO ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PURCHASE OF JEWELLERY AS NO REPLY/EXPLANATION WAS FURNISHED BY ASSESSEE IN THIS REGARD. (III) DELETING THE ADDITION OF RS.5,00,000/- MADE B Y THE AO ON ACCOUNT OF UNEXPLAINED INVESTMENT IN FIXED DEPOSIT ON THE BASIS OF SEIZED MATERIAL BK-07/2 (BACK). (IV) DELETING THE ADDITION OF RS.1,40,000/- (WRONGL Y MENTIONED AS 14,000/- WHILE COMPUTING THE TOTAL INCOME) MADE BY THE AO ON ACCOUNT OF UNEXPLAINED INVESTMENT IN RD ACCOUNT ON THE BASIS OF SIZED MATERIAL BK-07/3. (V) DELETING THE ADDITION OF RS.35,555/- MADE BY TH E AO ON ACCOUNT OF UNEXPLAINED INVESTMENT IN CONSTRUCTION OF HOSPIT AL BUILDING IN THE NAME OF M/S SHIVAM SURGICAL NURSING HOME PVT . LTD. ON THE BASIS OF VALUERS REPORT. (VI) DELETING THE ADDITION OF RS.12,20,000/- ADDED BY THE AO ON ACCOUNT OF UNEXPLAINED GIFT AND LOANS. (VII) DELETING THE ADDITION OF RS.72,140/- DISALLOW ED BY THE AO ON ACCOUNT OF INTEREST ON LOAN, THE GENUINENESS OF WHI CH WAS NOT ESTABLISHED. (VIII) DELETING THE ADDITION OF RS.6,04,615/- MADE BY THE AO ON ACCOUNT OF EXCESS OF ASSETS OVER LIABILITY WHICH CA ME TO NOTICE AFTER COMPARING THE BANK BALANCE AS PER BALANCE SHE ET AND THE BANK ACCOUNT. ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 42 (IX) DELETING THE ADDITION OF RS.1,00,000/- MADE BY THE AO ON ACCOUNT OF UNEXPLAINED INVESTMENT AS PER LOOSE PAPE RS OF ANNEXURE LP-3 FOR WHICH NO EXPLANATION WAS GIVEN BY THE ASSESSEE. (X) DELETING THE ADDITION OF RS.2,00,000/- MADE BY THE AO ON ACCOUNT OF UNEXPLAINED DEPOSIT OF RS.1,00,000/- CAS H ON 04.03.2004 & 10.03.2004 IN ACCOUNT NUMBER 2030 WITH P.N.B. PAHARIA, VARANASI. 2. THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED TO REL Y ON ASSESSEES WRITTEN SUBMISSION DATED 26.12.2007 AND THUS ALLOWI NG THE APPEAL WITHOUT GIVING DETAILED OWN FINDINGS AND ANY OPPORT UNITY TO THE ASSESSING OFFICER. 3. THAT THE ORDER OF LEARNED CIT (APPEAL) BEING ERR ONEOUS IN LAW AND ON FACTS MAY BE REVERSED AND THE ORDER OF AO MA Y KINDLY BE RESTORED. 4. CRAVES FOR LEAVE TO RAISE ANY GROUNDS OF APPEAL THAT MAY BE TAKEN AT THE TIME OF HEARING. 70. THE BRIEF FACTS OF THIS APPEAL ARE SIMILAR TO T HE FACTS AS NARRATED IN A.Y. 2001-02 ABOVE VIDE PARAGRAPH NOS.1 TO 7 OF THIS ORD ER. THE CIT(A) IN A.Y. 2004- 2005 STATED THAT HE HAS MADE DETAILED DISCUSSIONS R EGARDING GROUNDS OF APPEAL IN HIS ORDER FOR A.Y. 2000-2001. 71. GROUND NO.1(I) & 2 ARE IDENTICAL TO THE GROUNDS RAISED IN A.Y. 2001-0 2. IN THE LIGHT OF DETAILED DISCUSSIONS MADE IN THAT YEAR IN PARAGRAPH NOS.10 & 11 OF THIS ORDER, BOTH THESE GROUNDS ARE DISMISSED. ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 43 72. GROUND NO.1(II) PERTAINS TO ADDITION OF RS.28,544/- MADE BY THE A.O. ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PURCHASE OF JE WELLERY. THE FACTS OF THIS GROUND ARE IDENTICAL TO THE FACTS IN A.Y. 2002-03 I N ITA NO.85/A/2011. IN THE LIGHT OF THE DETAILED DISCUSSIONS MADE IN THE A.Y. 2002-03 VIDE PARAGRAPH NOS.37 TO 45 OF THIS ORDER, WE FIND THAT THE CIT(A) HAS RI GHTLY DELETED THE ADDITION OF RS.28,544/-. ORDER OF THE CIT(A) IS CONFIRMED. 73. GROUND NO.1(III) PERTAINS TO ADDITION OF RS.5,00,000/-. THE A.O. M ADE ADDITION ON THE BASIS OF A LOOSE PAPER BK-07/2 BACK . THE A.O. NOTICED THAT REAL NAME HAS BEEN STRUCK OFF AT A LATER DATE AND BANK O F BARODA HAS BEEN WRITTEN. THE PEN USED IN WRITING IS DIFFERENT. FIGURES SUGGEST THAT INITIALLY SOME FDR WAS PURCHASED ON 27.3.2003 WHICH WAS TO MATURE OR MATUR ED ON 27.09.2004 AND WAS REINVESTED AND WAS TO MATURE ON 27.09.2007. THE AM OUNT ON MATURITY APPEARS TO BE RS.6,34,000/-. SO BY BANK CALCULATION THE AMOUN T INVESTED APPEARS TO BE RS.5,00,000/-. THE SOURCE REMAINS UNEXPLAINED. HE NCE RS.5,00,000/- IS ADDED AS UNEXPLAINED INVESTMENT IN A.Y. 2004-05. THE BANK C ONCERNED IS KASHI GRAMIN BANK AND NOT BANK OF BARODA. THIS ENTRY ALSO APPEA RS IN PAGE NO.12 OF BK-7 AND IT IS CLEARLY WRITTEN AS KASHI GRAMIN BANK. 74. THE CIT(A) DELETED THE ADDITION AFTER CONSIDERI NG ASSESSEES SUBMISSIONS THAT THE PRINCIPLE AMOUNT OF THE FDR HAS BEEN CONSI DERED AND INCORPORATED IN THE ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 44 BOOKS OF ACCOUNT AND SAME HAS BEEN SHOWN IN RETURN OF INCOME FILED IN RESPONSE TO NOTICE UNDER SECTION 153A OF THE ACT. BEFORE US, T HE REVENUE DID NOT CONTROVERT TO THE FACTS NOTED BY THE CIT(A). WHEN THE AMOUNT HAS ALREADY BEEN CONSIDERED BY THE ASSESSEE WHILE FILING RETURN IN RESPONSE TO NOT ICE UNDER SECTION 153A OF THE ACT, WE ARE OF THE VIEW THAT THE ADDITION IS NOT WARRANT ED, OTHERWISE, THERE WILL BE DOUBLE ADDITION. IN THE LIGHT OF THE FACTS OF THE CASE, WE FIND THAT THE CIT (A) HAS RIGHTLY DELETED THE ADDITION. THE ORDER OF THE CIT (A) IS CONFIRMED ON THE ISSUE. 75. GROUND NO.1(IV) PERTAINS ADDITION ON ACCOUNT OF R.D. ACCOUNT. DURI NG THE ASSESSMENT PROCEEDINGS, THE A.O. NOTICED THAT ENTRI ES WITH REGARD TO THE PAGE PERTAINED TO R/D POST OFFICE. THIS WAS STRUCK OFF AND RE-WRITTEN AS P.N.B. ACCOUNT NUMBER IS 1007597 WHICH HAS BEEN INTERPOLAT ED TO 2007597 AND LIKEWISE. ENTRIES IN THE NAME OF DR. S.P YADAV SHOW AMOUNT OF RS.5,000/- EACH. THIS IMPLIES THAT R.D. ACCOUNT WAS OPENED FOR RS.5,000/- PER MONTH EACH FOR FOUR ACCOUNTS @ RS.5,000/- EACH. THERE IS NO EVIDENCE TH AT THESE ACCOUNTS HAVE BEEN CLOSED. THE YEAR-WISE INVESTMENT CALCULATED BY A.O . IS AS UNDER :- ASSTT. YEAR AMOUNT INVESTED 2004-05 35000 X 4 = 140000 2005-06 60000 X 4 = 240000 2006-07 60000 X 4 = 240000 ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 45 76. ABOVE AMOUNTS HAVE BEEN ADDED BY THE A.O. AS UN EXPLAINED INVESTMENT IN RESPECTIVE ASSESSMENT YEARS. THE CIT(A) DELETED TH E ADDITIONS. 77. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PA RTIES AND RECORDS PERUSED. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS EXPLAINED BY THE ASSESSEE THAT THIS NOTE BOOK IS ROUGH WITHOUT ANY SEQUENCE, WITHO UT ANY REFERENCE. THERE ARE VARIOUS MISTAKES AS REPETITION OF SOME ENTRIES AT D IFFERENT PLACES. THE ENTRIES WERE NOT FOUND SUPPORTED BY ANY DOCUMENT OR MATERIAL FOU ND AT THE TIME OF SEARCH. IT IS FURTHER SUBMITTED THAT THE ASSESSEE HONESTLY AND SI NCERELY CONSIDERED SUCH TYPE OF INVESTMENT AND MADE A ADDITIONAL DISCLOSURE OF RS.1 ,50,00,000/- DURING THE COURSE OF SEARCH COLLECTIVELY IN THE GROUP OF CASES. THE ASSESSEE OBTAINED NECESSARY CERTIFICATE FROM THE POST OFFICE DEPARTMENT AND SUB MITTED THAT THE ACCOUNT NUMBER OF R.D. AND OTHER DEPOSITS WERE NOT IN THE NAME OF THE ASSESSEE. THE A.O. HAS MADE THE ADDITION ON PRESUMPTION BASIS. THE A.O. R AISED A QUERY IN HIS NOTICE UNDER 142(1) DATED 27.09.2007 WHICH WAS FULLY EXPLA INED BY THE ASSESSEE. THE ADDITION MADE BY THE A.O. WAS SIMPLY ON THE BASIS O F ASSUMPTION THAT THE STOCK ENTRY OF BK-7/3 IS THE R.D. POST OFFICE AND ASSESSE E HAS DEPOSITED RS.5,000/- PER MONTH IN EACH ACCOUNT. CONTRARY TO THAT FACT, THE ASSESSEE HAS PRODUCED THE CERTIFICATE FROM THE POSTAL AUTHORITIES IN RESPECT OF THE R.D. ACCOUNT NUMBER FOR WHICH THE A.O. HAS MADE THE ADDITION. ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 46 78. IT IS RELEVANT TO MENTION THAT EXCEPT THIS DUMP DOCUMENT NO OTHER MATERIALS WERE FOUND IN THE FORM OF PASS BOOK, RECEIPT OF DEP OSIT, COPY OF ACCOUNT ETC. AFTER CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE, WE ARE OF THE VIEW THAT THE ASSESSEE HAS FURNISHED THE MATERIAL THAT THESE INVESTMENT IN R.D. ACCOUNT WAS NOT MADE BY THE ASSESSEE. THE ASSESSEE FURNISHED THE NECESSARY CERTIFICATE FROM THE POSTAL AUTHORITY. WE ARE OF THE VIEW THAT UNDER THIS CIR ADDITION IS NOT WARRANTED PARTICULARLY UNDER THE CIRCUMSTANCES WHERE THE INVE STMENT IS PERTAINING TO POSTAL AUTHORITY AND NEITHER RELEVANT RECORD WAS FOUND AT THE TIME OF SEARCH, NOR THE A.O. HAS EXAMINED INDECENTLY FROM POSTAL AUTHORITY REGAR DING THESE INVESTMENTS. UNDER THE CIRCUMSTANCE, WE FIND THAT THE CIT(A) HAS RIGHTLY DELETED THE ADDITION. ORDER OF CIT(A) IS CONFIRMED ON THE ISSUE. 79. GROUND NO.1(V) PERTAINS TO ADDITION OF RS.35,555/- MADE BY THE A. O. ON ACCOUNT OF UNEXPLAINED INVESTMENT IN CONSTRUCTION O F HOSPITAL BUILDING IN THE NAME OF M/S. SHIVAM SURGICAL NURSING HOME PVT. LTD. ON THE BASIS OF VALUERS REPORT. THIS ISSUE HAS ALREADY BEEN DISCUSSED IN D ETAIL IN A.Y. 2002-03 IN PARAGRAPH NOS.46 TO 50 OF THIS ORDER. FOLLOWING TH E ABOVE DISCUSSION, WE FIND THAT THE CIT(A) HAS RIGHTLY DELETED THE ADDITION OF RS.3 5,555/-. ORDER OF THE CIT(A) IS CONFIRMED ON THE ISSUE. ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 47 80 . GROUND NO.1(VI) PERTAINS TO ADDITION OF RS.12,20,000/- MADE BY THE A.O. ON ACCOUNT OF UNEXPLAINED GIFT AND LOANS. THIS ISSUE H AS BEEN DECIDED IN A.Y. 2003- 2004 IN PARAGRAPH NO.63 OF THIS ORDER WHICH IS AS U NDER:- 63. WE HAVE HEARD LEARNED REPRESENTATIVES OF THE P ARTIES. THE CONTENTION OF THE ASSESSEE BEFORE CIT(A) WAS THAT T HE A.O. DID NOT CONSIDER VARIOUS DETAILS FURNISHED BY THE ASSESSEE. THE ASSESSEE WAS READY TO PRODUCE THE DONORS FOR EXAMINATION. WE FI ND THAT THE CIT(A), INSTEAD OF SENDING BACK THE MATTER TO THE FILE OF A .O. FOR EXAMINATION OF DONORS AND OTHER MATERIALS FILED BY THE ASSESSEE OR EXAMINING THE ISSUES HIMSELF, HE HAS DELETED THE ADDITIONS. AFTER CONSI DERING TOTALITY OF THE FACTS OF THE CASE UNDER CONSIDERATION, WE THINK IT PROPER TO SEND THIS MATTER TO THE FILE OF A.O. WITH THE DIRECTION TO DE CIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW AFTER PROVIDING OPPORTUNITY OF HEARING TO THE ASSESSEE. FOLLOWING THE ABOVE DISCUSSIONS, THE ISSUE IS BEING SENT BACK TO THE FILE OF A.O. WITH IDENTICAL DIRECTIONS. 81 . GROUND NO.1(VII) PERTAINS TO ADDITION OF RS.72,140/- DISALLOWED BY THE A.O. ON ACCOUNT OF INTEREST ON LOAN, THE GENUINENESS OF WHICH WAS NOT ESTABLISHED. THE A.O. NOTICED THAT THE ASSESSEE HAS DEBITED A SUM OF RS.72,140/- AS INTEREST ON LOAN. BUT NO EVIDENCE IN THIS REGARD HAS BEEN ADDUCED. TH E A.O. NOTED THAT IN NONE OF THE YEARS THE GENUINENESS OF LOANS WERE ESTABLISHED AND CREDITS AS APPEARING WERE ADDED UNDER SECTION 68 OF THE ACT, HENCE DEBIT OF I NTEREST AT RS.72,140/- IS BEING DISALLOWED AND ADDED BACK IN A.Y. 2004-05. ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 48 82. AFTER HEARING THE LEARNED REPRESENTATIVES OF TH E PARTIES, WE FIND THAT THE ADDITIONS ON ACCOUNT OF RELATED CASH CREDITS HAVE B EEN DELETED BY THE CIT(A). THIS ISSUE HAS ALREADY BEEN DISCUSSED IN DETAIL IN ITA N O.84/A/2011 FOR A.Y. 2001-02 VIDE PARAGRAPH NOS.14 TO 24 OF THIS ORDER. FOLLOWI NG THE ABOVE DISCUSSION, WE CONFIRM THE ORDER OF THE CIT(A) IN DELETING THE REL ATED CASH CREDITS. WHEN THERE IS NO ADDITION ON ACCOUNT OF RELATED CASH CREDITS, THE RE IS NO QUESTION OF SUSTAINING ADDITION ON ACCOUNT OF INTEREST THEREON. WE, THEREF ORE, FIND THAT THE CIT(A) HAS RIGHTLY DELETED THE ADDITION. THE ORDER OF THE CIT (A) IS CONFIRMED ON THE ISSUE. 83 . GROUND NO. 1(VIII) PERTAINS TO DELETION OF ADDITION OF RS.6, 04,615/- MADE BY THE A.O. ON ACCOUNT OF EXCESS OF ASSETS OVER LIA BILITY WHICH CAME TO NOTICE AFTER COMPARING THE BANK BALANCE AS PER BALANCE SHEET AND THE BANK ACCOUNT. THE A.O. NOTICED THAT IN THE BALANCE SHEET FOR A.Y. 2004-05 THE ASSESSEE HAS DECLARED BANK BALANCE WITH BANK OF BARODA AT RS.2,13,804/-. BUT EXAMINATION OF COPY OF BANK ACCOUNT SHOWS THAT AS ON 31.03.2004 THE BALANCE IN THIS ACCOUNT WAS RS.8,18,419/-. SO THERE IS SURPLUS IN THE BANK ACCOUNT BY RS.6,04, 615/-. BY THIS AMOUNT THERE IS EXCESS OF ASSET OVER LIABILITY. HENCE RS.6,04,615/ - IS ADDED IN A.Y. 2004-05 BY THE A.O. THE CIT(A) DELETED THE ADDITION AFTER CONSIDE RING RECONCILIATION FURNISHED BY THE ASSESSEE. ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 49 84. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF PA RTIES AND RECORDS PERUSED. THE CIT(A) HAS DELETED THE ADDITION AFTER CONSIDERI NG RECONCILIATION WHICH IS REPRODUCED AT PAGE NO.70 OF THE ORDER OF THE CIT(A) . THE REVENUE HAS FAILED TO POINT ANY CONTRARY MATERIAL. UNDER THE CIRCUMSTANC ES, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A). THE ORDER OF THE CIT(A ) IS CONFIRMED ON THE ISSUE. 85 . GROUND NO.1(IX) PERTAINS TO DELETION OF ADDITION OF RS.1,00,000/- MADE BY THE A.O. ON ACCOUNT OF UNEXPLAINED INVESTMENT AS PE R LOOSE PAPERS OF ANNEXURE LP-3 FOR WHICH NO EXPLANATION WAS GIVEN BY THE ASSE SSEE. THE A.O. NOTED THAT THE TOTAL AMOUNT OF INVESTMENT AS PER THIS PAGE COMES T O :- RS.1,00,000/- IN A.Y. 2004-05 RS.11,14,008/- IN A.Y. 2005-06 RS.54,122/- IN A.Y. 2006-07 86. THE A.O. MADE THE ADDITION AS NO EXPLANATION HA S BEEN OFFERED. THE CIT(A) HAS DELETED THE SAID ADDITION. THE ASSESSEE EXPLAI NED THAT AMOUNT OF RS.50,000/- DATED 17.06.2003 AND RS.50,000/- THAT IS ALSO DATED 17.06.2003 ARE IN THE NAME OF S.P. YADAV. IT WAS FURTHER SUBMITTED THAT BOTH THE FIXED DEPOSITS WERE MADE WITH SAHARA DEPOSIT UNDER THE SCHEME 5.15 DATED 31.12.20 02. IT IS FURTHER SUBMITTED THAT IN PAGE NO.20 OF BK-7 THE PRINCIPAL AMOUNT OF BOTH THE FDRS. HAVE BEEN MENTIONED IN THE NAME OF S.P. YADAV. THE ASSESSEE SUBMITTED THAT THESE FIXED ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 50 DEPOSITS HAVE ALREADY BEEN CONSIDERED IN THE BOOKS OF ACCOUNT AND THE SAME WERE SHOWN IN RETURN OF INCOME FILED IN COMPLIANCE TO NO TICE UNDER SECTION 153A OF THE ACT. 87. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PA RTIES. WE FIND THAT 2 AMOUNTS TOTALING TO RS.1,00,000/- ON ACCOUNT OF FDR IN THE NAME OF THE ASSESSEE HAS ALREADY BEEN CONSIDERED WHILE FILING RETURN OF INCOME IN RESPONSE TO NOTICE UNDER 153A OF THE ACT. THE REVENUE DID NOT DISPUTE ABOUT THIS FACT. IN THE LIGHT OF THAT WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF C IT(A). ORDER OF THE CIT(A) IS CONFIRMED ON THE ISSUE. 88 . GROUND NO.1(X) PERTAINS TO DELETION OF ADDITION OF RS.2,00,000/- M ADE BY THE A.O. ON ACCOUNT OF UNEXPLAINED DEPOSIT OF RS.1, 00,000/- CASH ON 04.03.2004 & 10.03.2004 IN ACCOUNT NUMBER 2030 WITH P.N.B. PAHAR IA, VARANASI. THE A.O. NOTED THAT THE CASH DEPOSITS ARE AS UNDER:- DATE AMOUNT ASSTT. YEAR 4-3-2004 100000 2004-05 10-3-2004 100000 - DO - -4-2004 75000 2005-06 12-5-2004 466000 - DO - 7-2004 100000 - DO - 8-2004 150000 - DO - 9-2004 200000 - DO - 11-2004 50000 - DO - ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 51 12-2004 35000 - DO - 30-12-2004 20000 - DO - 3-3-2005 100000 - DO - 89. SINCE NO EXPLANATION HAS BEEN OFFERED BY THE AS SESSEE, THEREFORE, THE A.O. ADDED THESE AMOUNTS AS UNEXPLAINED INVESTMENT IN RE SPECTIVE ASSESSMENT YEARS. THE ADDITIONS MADE BY THE A.O. HAVE BEEN DELETED BY THE CIT(A). 90. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PA RTIES AND RECORDS PERUSED. THE ASSESSEE HAS EXPLAINED THE FACTS OF THE ISSUE T HAT S.B. ACCOUNT NO.2030 OF P.N.B. IS IN THE NAME OF SHIV PRASAD YADAV WHICH WA S OPENED ON 04.03.2004 WITH A DEPOSIT OF RS.1,00,000/-. ON COMPUTERIZATION THE SAME ACCOUNT HAS BEEN CONVERTED TO S.B. ACCOUNT NUMBER IN THE SAME NAME I N THE SAME BRANCH. THE BALANCE OF RS.1,74,501/- ON 31.03.2005 HAS BEEN TRA NSFERRED TO NEW ACCOUNT ON 06.03.2005. AS REGARDS BALANCE OF RS.2,00,000/- ON 31.03.2004, THE ASSESSEE SUBMITTED THAT THE AMOUNT IS DULY APPEARING IN THE BALANCE SHEET IN S.B. ACCOUNT NO.2030. SIMILARLY, BALANCE OF RS.2,05,241/- WAS A LSO REFLECTED IN BALANCE SHEET AS ON 31.03.2005. IT WAS ALSO SUBMISSION OF ASSESS EE THAT THE SAID ACCOUNT NO.2030 HAS ALREADY BEEN CONSIDERED IN THE RETURN O F INCOME FILED IN RESPONSE TO NOTICE UNDER SECTION 153A OF THE ACT. THE ACCOUNT HAS ALREADY BEEN CONSIDERED IN THE BOOKS OF ACCOUNT AND RETURN OF INCOME. THE SAME CANNOT BE ADDED UNLESS CONTRARY MATERIAL IS BROUGHT ON RECORD BY THE REVEN UE OR POINTING OUT AT THE TIME OF ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 52 HARING. IN THE ABSENCE OF ANY CONTRARY MATERIAL, W E DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A). ORDER OF THE CIT(A) IS CONFIRMED. 91. IN THE RESULT, ITA NO.87/A/2011 FOR A.Y. 2004-0 5 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ITA NO.88/A/2011 FOR ASSESSMENT YEAR 2005-06 92. THE GROUNDS RAISED BY THE REVENUE IN ITS APPEAL ARE AS UNDER :- 1. THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN REITERATING HIS DECISION GIVEN IN HIS ORIGINAL APPE LLATE ORDER DATED 30.03.2010, THEREBY --- (I) NOT APPRECIATING THAT NO BOOKS OF ACCOUNT WERE FOUND IN ANY OF THE PREMISES WHERE SEARCH AND SEIZURE OPERATION WER E CARRIED OUT U/S 132 ON 23.03.2006. (II) DELETING THE ADDITION OF RS.51,991/- MADE BY T HE AO ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PURCHASE OF JEWELLERY AS NO REPLY/EXPLANATION WAS FURNISHED BY ASSESSEE IN THIS REGARD. (III) DELETING THE ADDITION OF RS.1,70,000/- MADE B Y THE AO ON ACCOUNT OF UNEXPLAINED INVESTMENT IN FDRS ON THE BA SIS OF SEIZED MATERIAL BK-07/2. (IV) DELETING THE ADDITION OF RS.46,384/- MADE BY T HE AO ON ACCOUNT OF INTEREST ON FDR. (V) DELETING THE ADDITION OF RS.2,40,000/- MADE BY THE AO ON ACCOUNT OF UNEXPLAINED INVESTMENT IN RD ACCOUNT ON THE BASIS OF SEIZED MATERIAL BK-07/3. ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 53 (VI) DELETING THE ADDITION OF RS.6,00,000/- MADE BY THE AO ON ACCOUNT OF UNEXPLAINED INVESTMENT IN MIS ACCOUNT NU MBER 5012. (VII) DELETING THE ADDITION OF RS.5,00,000/- MADE B Y THE AO ON ACCOUNT OF UNEXPLAINED INVESTMENT IN MIS ACCOUNT. (VIII) DELETING THE ADDITION OF RS.3,49,316/- MADE BY THE AO ON ACCOUNT OF UNEXPLAINED INVESTMENT IN CONSTRUCTION O F HOSPITAL BUILDING IN THE NAME OF M/S SHIVAM SURGICAL NURSING HOME PVT. LTD. ON THE BASIS OF VALUERS REPORT. (IX) DELETING THE ADDITION OF RS.1,10,000/- MADE BY THE AO ON ACCOUNT OF UNEXPLAINED GIFTS AND LOANS. (X) DELETING THE ADDITION OF RS.3,695/- MADE BY TH E AO ON ACCOUNT OF INTEREST ON LOAN, THE GENUINENESS OF WHICH WAS N OT ESTABLISHED. (XI) DELETING THE ADDITION OF RS.11,14,008/- MADE B Y THE AO ON ACCOUNT OF UNEXPLAINED INVESTMENT AS PER LOOSE PAPE RS OF ANNEXURE LP-3 FOR WHICH NO EXPLANATION WAS GIVEN BY THE ASSESSEE. (XII) DELETING THE ADDITION OF RS.11,06,000/- MADE BY THE AO ON ACCOUNT OF UNEXPLAINED DEPOSIT ON VARIOUS DATES IN ACCOUNT NUMBER 2030 WITH P.N.B. PAHARIA, VARANASI. 2. THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED TO REL Y ON ASSESSEES WRITTEN SUBMISSION DATED 26.12.2007 AND THUS ALLOWI NG THE APPEAL WITHOUT GIVING DETAILED OWN FINDINGS AND ANY OPPORT UNITY TO THE ASSESSING OFFICER. 3. THAT THE ORDER OF LEARNED CIT (APPEAL) BEING ERR ONEOUS IN LAW AND ON FACTS MAY BE REVERSED AND THE ORDER OF AO MA Y KINDLY BE RESTORED. 4. CRAVES FOR LEAVE TO RAISE ANY GROUNDS OF APPEAL THAT MAY BE TAKEN AT THE TIME OF HEARING. ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 54 93. BRIEF FACTS OF THIS APPEAL ARE SIMILAR TO THE F ACTS AS NARRATED IN A.Y. 2001-02 ABOVE VIDE PARAGRAPH NOS.1 TO 7 OF THIS ORDER. THE CIT(A) IN A.Y. 2004-2005 STATED THAT HE HAS MADE DETAILED DISCUSSIONS REGARD ING GROUNDS OF APPEAL IN HIS ORDER FOR A.Y. 2000-2001. 94 . GROUND NOS.1(I) & 2 ARE IDENTICAL TO THE GROUNDS RAISED IN A.Y. 2001-0 2. IN THE LIGHT OF DETAILED DISCUSSIONS MADE IN THAT YEAR IN PARAGRAPH NOS.10 & 11 OF THIS ORDER, BOTH THESE GROUNDS ARE DISMISSED. 95 . GROUND NO.1 (II) PERTAINS TO DELETION OF ADDITION OF RS.51,991/- MA DE BY THE A.O. ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PURCHA SE OF JEWELLERY AS NO REPLY/EXPLANATION WAS FURNISHED BY ASSESSEE IN THIS REGARD. THE FACTS OF THIS GROUND ARE IDENTICAL TO THE FACTS IN A.Y. 2002-03 I N ITA NO.85/A/2011. IN THE LIGHT OF DETAILED DISCUSSIONS MADE IN THE A.Y. 2002 -03 VIDE PARAGRAPH NOS.37 TO 45 OF THIS ORDER, WE FIND THAT THE CIT(A) HAS RIGHT LY DELETED THE ADDITION OF RS.51,991/-. ORDER OF THE CIT(A) IS CONFIRMED. 96 . GROUND NO.1(III) PERTAINS TO ADDITION OF RS.1,70,000/-. THE A.O. NO TED THAT PROBABLY THE TOTAL OF LEFT SIDE OF PAGE NO.2 WAS NO TED IN RIGHT SIDE OF PAGE NO.2 OF THIS REGISTER MARKED AS BK-7. THE REPLY OF THE ASS ESSEE IS INCORRECT. AS PER THE REGISTER, PAGE NO.2 CONTAINS DETAILS OF VARIOUS FDR S IN THE NAME OF FAMILY ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 55 MEMBERS IN BANK OF BARODA, RAMKATORA, VARANASI. AS PER OTHER ENTRIES IN THIS PAGE-2, OTHER FDRS WERE PURCHASED DURING A.Y. 2005- 06. HENCE IMPLIEDLY THIS FDR WAS ALSO PURCHASED IN A.Y. 2005-06. HENCE RS.1 ,70,000/- IS ADDED AS UNEXPLAINED INVESTMENT IN A.Y. 2005-06. THE ADDITI ON MADE BY THE A.O. HAS BEEN DELETED BY THE CIT(A). 97. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PA RTIES AND RECORDS PERUSED. DURING THE SEARCH AND SEIZURE OPERATION, ONE REGIST ER (RAMBHA) WAS SEIZED MARKED AS ANNEXURE-B7. AT PAGE NO.2 OF THE SAID REGISTER AN ENTRY OF RS.1,70,000/- WRITTEN IN THE NAME OF DR. S.P. YADAV AND ON THE ABOVE SIDE OF THE SAID ENTRY B.O.B. WAS WRITTEN. THE ASSESSEE HAS EXPLAINED TO THE A.O. VI DE LETTERS DATED 14.12.2007 & 20.12.2007 THAT THE ENTRIES NOTED FROM THAT PAGE WE RE DUMP ENTRIES. THE MATURITY AMOUNT OF FIXED DEPOSIT OF WHICH PRINCIPAL AMOUNT H AS BEEN SHOWN AND CONSIDERED IN THE BALANCE SHEET IN RESPECTIVE FAMILY MEMBERS. THEREFORE, ON THE BASIS OF NOTING ABOUT MATURITY AMOUNT, THE ADDITION CANNOT B E MADE, PARTICULARLY UNDER THE CIRCUMSTANCES WHEN THE PRINCIPAL AMOUNT OF MATURITY OF FIXED DEPOSIT HAS ALREADY BEEN CONSIDERED IN THE HANDS OF THE RESPECTIVE FAMI LY MEMBERS TO WHOM THE FIXED DEPOSITS WERE BELONGED. THE REVENUE HAS FAILED TO POINT OUT ANY CONTRARY MATERIAL TO THE EXPLANATION OF THE ASSESSEE AND FINDING OF T HE CIT(A). IN THE ABSENCE OF CONTRARY MATERIAL, WE DO NOT FIND ANY INFIRMITY MIN THE ORDER OF CIT(A). ORDER OF CIT(A) IS CONFIRMED ON THE ISSUE. ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 56 98 . GROUND NO.1(IV) PERTAINS TO ADDITION OF RS.46,384/-. THE A.O. NOTE D THAT THE AMOUNT FIRST MATURED ON 27.09.2004 AND INTEREST IS DETERMINED AT RS.46,384/- ON AVERAGE BASIS AND THE SAME WAS ADDED AS INTEREST INCOME IN A.Y. 2005-06. THE ADDITION MADE BY THE A.O. HAS BEEN DELETED BY THE C IT(A). THE A.O. CALCULATED THE NOTIONAL INTEREST ON PRESUMPTION BASIS THAT THE RE IS A FIXED DEPOSIT OF RS.5,00,000/-. THE CONTENTION OF THE ASSESSEE THAT THE INVESTMENT OF RS.5,00,000/- ITSELF WAS NOT SUPPORTED BY ANY SEIZED RECORD OR AN Y OTHER MATERIAL FOUND POST SEARCH. THEREFORE, THERE IS NO QUESTION OF SUCH NO TIONAL INTEREST. 99. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PA RTIES AND RECORDS PERUSED. WE FIND THAT WHEN THERE IS NO INVESTMENT IN F.D.R. OF RS.5,00,000/-, THE QUESTION OF CALCULATION OF INTEREST DOES NOT ARISE. IN THE LIGHT OF THE FACT, THE ORDER OF CIT(A) IS CONFIRMED. 100 . GROUND NO.1(V) PERTAINS TO DELETION OF ADDITION OF RS.2,40,000/- M ADE BY THE A.O. ON ACCOUNT OF UNEXPLAINED INVESTMENT IN R. D. ACCOUNT ON THE BASIS OF SEIZED MATERIAL BK-07/3. THE ADDITION MADE BY THE A.O. HAS BEEN DELETED BY THE CIT(A). THE ISSUE HAS BEEN DISCUSSED IN DETAIL IN A.Y. 2004-05 VIDE PARAGRAPH NOS.75 TO 78. FOLLOWING THE SAID DISCUSSION WE CO NFIRM THE ORDER OF CIT(A) ON THE ISSUE. ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 57 101 . GROUND NO.1(VI) PERTAINS TO DELETION OF ADDITION OF RS.6,00,000/- MADE BY THE A.O. ON ACCOUNT OF UNEXPLAINED INVESTMENT IN MI S ACCOUNT NUMBER 5012. THE A.O. DID NOT AGREE WITH ASSESSABILITY OF THE INVEST MENT PORTION AS SMT. RADHIKA DEVI HAS NO SOURCE OF SUCH INCOME WHEREFROM SHE COU LD INVEST SUCH SUM OF RS.6,00,000/-. COPY OF HER BANK ACCOUNT HAS NOT BE EN FURNISHED. NOR CASH FLOW CHART HAS BEEN GIVEN IN ANY OF THE CASES. THE AMOU NT HAS ACTUALLY BEEN INVESTED BY DR. S.P. YADAV AND HE IS THE SECOND HOLDER, HENCE S UM OF RS.6,00,000/- IS ADDED AS UNEXPLAINED INVESTMENT IN A.Y. 2005-06 IN THE CASE OF DR. S.P. YADAV. BEFORE PARTING, IT IS ALSO POINTED OUT THAT ACCOUNT NUMBER WAS ORIGINALLY WRITTEN AS 5216 OR 5210 WHICH WAS LATER CHANGED TO 5012 AND MAY BE THAT THIS WAS DONE TO CORRELATE WITH RETURN OF SMT. RADHIKA DEVI. THE AD DITION MADE BY THE A.O. HAS BEEN DELETED BY THE CIT(A). 102. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE P ARTIES AND RECORDS PERUSED. THE SUBMISSION OF THE ASSESSEE THAT THE INVESTMENT OF RS.6,00,000/- IN THE NAME OF SMT. RADHIKA YADAV HAS ALREADY BEEN SHOWN IN HER OR IGINAL RETURN FILED ON 05.12.2005. THE SAID INVESTMENT HAS ALSO BEEN SHOW N IN THE RETURN OF INCOME IN RESPONSE TO NOTICE UNDER SECTION 153(A) OF THE ACT. THE SUBMISSION OF THE ASSESSEE IS THAT THIS IS A DOUBLE ADDITION AS THIS AMOUNT HA S ALREADY BEEN ADDED IN THE DISCLOSURE OF RS.1,50,00,000/- MADE BY THE GROUP CO NCERN. THE REVENUE HAS FAILED ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 58 TO POINT OUT ANY CONCRETE MATERIAL TO THE FINDING O F CIT(A) AND SUBMISSIONS OF THE ASSESSEE. IN THE LIGHT OF THE FACT, ORDER OF THE C IT(A) IS CONFIRMED. 103 . GROUND NO.1(VII) PERTAINS TO ADDITION OF RS.5,00,000/-. THE A.O. DI D NOT ACCEPT THE ASSESSEES REPLY THAT THE SAME HAS BEEN DISCLOSED IN THE CASE OF SMT. MAMTA & RAMSEVAK AT RS.5,00,000/- IN A.Y. 2005-06. THE A.O. NOTED THAT SHE CANNOT ACQUIRE SO MUCH OF MIS AND THIS REGISTER IS IN THE WRITING OF THE ASSESSEE AND HIS WIFE. WHY THEY WOULD MAKE ENTRY IN THEIR R ECORD IN THE NAME OF THIRD PARTY IS NOT UNDERSTOOD. REAL INVESTMENT HAS BEEN MADE B Y DR. S.P. YADAV. IN FACT, IN THE CASE OF SMT MAMTA YADAV, SAME SET OF PERSONS HA VE ADVANCED LOANS TO DR. S.P. YADAV. THEIR IDENTITY, GENUINENESS AND CREDITWORTH INESS WERE NOT ESTABLISHED IN THE CASE OF THE ASSESSEE. HENCE THE A.O. MADE ADDI TION OF RS.5,00,000/- IN A.Y. 2005-06 AS UNEXPLAINED INVESTMENT. THE ADDITION MA DE BY THE A.O. HAS BEEN DELETED BY THE CIT(A). 104. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE P ARTIES AND RECORDS PERUSED. THE INVESTMENT IN MIS RS.5,00,000/- WAS IN THE NAME OF SMT. MAMTA YADAV/RAM SEVAK. THE CONTENTION OF THE ASSESSEE THAT THE INVE STMENT WAS MADE BY SMT. MAMTA YADAV AND SHE HAS DULY REFLECTED THE SAME IN HER RETURN OF INCOME. SMT. MAMTA IS ASSESSED TO TAX SEPARATELY. THE SAID AMOU NT OF RS.5,00,000/- HAS BEEN SHOWN IN THE BALANCE SHEET AS ON 31.03.2005 FURNISH ED ALONG WITH THE RETURN OF ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 59 INCOME FILED UNDER SECTION 139(1) OF THE ACT. WHEN THE INVESTMENT IS IN THE NAME OF THIRD PARTY AND THERE IS NO MATERIAL ON RECORD N OR THE SAME HAS BEEN POINTED AT THE TIME OF HEARING THAT THE SAID AMOUNT WAS INVEST ED BY THE ASSESSEE BY BENAMI NAME, IN ABSENCE OF SUCH MATERIAL, THE INVESTMENT I N THIRD PARTY CANNOT BE ADDED INTO THE HANDS OF THE ASSESSEE. IN THE LIGHT OF TH E FACT AND IN THE LIGHT OF DISCUSSIONS MADE BY THE CIT(A), WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A). ORDER OF THE CIT(A) IS CONFIRMED ON THE ISSUE. 105. GROUND NO.1(VIII) PERTAINS TO DELETION OF ADDITION OF RS.3,49,316/- M ADE BY THE A.O. ON ACCOUNT OF UNEXPLAINED INVESTMENT IN CO NSTRUCTION OF HOSPITAL BUILDING IN THE NAME OF M/S. SHIVAM SURGICAL NURSIN G HOME PVT. LTD. ON THE BASIS OF VALUERS REPORT. THIS ISSUE HAS ALREADY BEEN DI SCUSSED IN DETAIL IN A.Y. 2002-03 IN PARAGRAPH NOS.46 TO 50 OF THIS ORDER. FOLLOWIN G THE ABOVE DISCUSSION, WE FIND THAT THE CIT(A) HAS RIGHTLY DELETED THE ADDITION OF RS.3,49,316/- ORDER OF THE CIT(A) IS CONFIRMED ON THE ISSUE. 106. GROUND NO.1(IX) PERTAINS TO DELETION OF ADDITION OF RS.1,10,000/- M ADE BY THE A.O. ON ACCOUNT OF UNEXPLAINED GIFTS. THIS ISS UE HAS BEEN DECIDED IN A.Y. 2003-2004 IN PARAGRAPH NO. 63 OF THIS ORDER WHICH I S AS UNDER :- ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 60 63. WE HAVE HEARD LEARNED REPRESENTATIVES OF THE P ARTIES. THE CONTENTION OF THE ASSESSEE BEFORE CIT(A) WAS THAT T HE A.O. DID NOT CONSIDER VARIOUS DETAILS FURNISHED BY THE ASSESSEE. THE ASSESSEE WAS READY TO PRODUCE THE DONORS FOR EXAMINATION. WE FI ND THAT THE CIT(A), INSTEAD OF SENDING BACK THE MATTER TO THE F ILE OF A.O. FOR EXAMINATION OF DONORS AND OTHER MATERIALS FILED BY THE ASSESSEE OR EXAMINING THE ISSUES HIMSELF, HE HAS DELETED THE AD DITIONS. AFTER CONSIDERING TOTALITY OF THE FACTS OF THE CASE UNDER CONSIDERATION, WE THINK IT PROPER TO SEND THIS MATTER TO THE FILE OF A.O. WITH THE DIRECTION TO DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW A FTER PROVIDING OPPORTUNITY OF HEARING TO THE ASSESSEE. FOLLOWING THE ABOVE DISCUSSIONS, THE ISSUE IS BEING SENT BACK TO THE FILE OF A.O. WITH IDENTICAL DIRECTIONS. 107. GROUND NO.1(X) PERTAINS TO DELETION OF ADDITION OF RS.3,695/- MADE BY THE A.O. ON ACCOUNT OF INTEREST ON LOAN, THE GENUINENES S OF WHICH WAS NOT ESTABLISHED. THE A.O. NOTED THAT THE ASSESSEE HAS DEBITED A SUM OF RS.3,695/- AS INTEREST ON LOAN. BUT NO EVIDENCE IN THIS REGARD HAS BEEN ADDU CED. IN NONE OF THE YEARS THE GENUINENESS OF LOANS WERE ESTABLISHED AND CREDITS A S APPEARING WERE ADDED UNDER SECTION 68 HENCE DEBIT OF INTEREST AT RS.3,695/- IS BEING DISALLOWED AND ADDED BACK IN A.Y. 2004-05. 108. AFTER HEARING THE LD. REPRESENTATIVES OF THE P ARTIES, WE FIND THAT THE ADDITIONS ON ACCOUNT OF RELATED CASH CREDITS HAVE BEEN DELETE D BY THE CIT(A). FOLLOWING THE ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 61 DISCUSSIONS MADE IN ITA NO.84/A/2011 FOR A.Y. 2001- 02 VIDE PARAGRAPH NOS.13 TO 23 OF THIS ORDER, WE CONFIRM THE ORDER OF THE CIT ( A). 109. GROUND NO.1(XI) PERTAINS TO DELETION OF ADDITION OF RS.11,14,008/- MADE BY THE A.O. ON ACCOUNT OF UNEXPLAINED INVESTMENT AS PE R LOOSE PAPERS OF ANNEXURE LP-3 FOR WHICH NO EXPLANATION WAS GIVEN BY THE ASSE SSEE. THE ADDITION MADE BY THE A.O. HAS BEEN DELETED BY THE CIT(A). 110. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE P ARTIES AND RECORDS PERUSED. THE ASSESSEE SUBMITTED THAT TWO AMOUNTS OF RS.62,00 2/- EACH DATED 16.10.2004 WHICH IS IN THE NAME OF SMT. RADHIKA YADAV. THE AS SESSEE FURTHER SUBMITTED THAT THESE AMOUNTS HAVE BEEN SHOWN IN THE MARKED REGISTE R BK-7 WHICH HAS ALREADY BEEN TAKEN INTO THE ACCOUNT OF SRI KRISHNA SINGH YA DAV FOR A.Y. 2003-04. THE ASSESSEE IN SUPPORT OF HIS CONTENTION FILED COPY OF BALANCE SHEET, COPY OF ACKNOWLEDGEMENT, COPY OF ANNEXURE MARKED BK-7 FOR A .Y. 2003-04. AMOUNT OF RS.4,90,000/- AND RS.5,00,000/- BOTH DATED 06.08.20 04 WERE IN THE NAME OF SHIVNASH. THESE TWO FDRS. HAVE BEEN SHOWN IN THE AC COUNT OF DR. NEETU SINGH YADAV WHILE FILING RETURN IN RESPONSE TO NOTICE UND ER SECTION 153A OF THE ACT. 111. SINCE THESE INVESTMENTS HAVE ALREADY BEEN TAKE N INTO CONSIDERATION WHILE FURNISHING RETURN OF INCOME BY THE ASSESSEE AND OTH ER FAMILY MEMBERS IN RESPONSE ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 62 TO NOTICE UNDER SECTION 153(A) AND REVENUE DID NOT CONTROVERT THESE FACTS, WE, THEREFORE, ARE OF THE VIEW THAT THE CIT(A) HAS RIGH TLY DELETED THE ADDITION. 112. GROUND NO.1(XII) PERTAINS TO DELETION OF ADDITION OF RS.11,06,000/- MADE BY THE A.O. ON ACCOUNT OF UNEXPLAINED DEPOSIT ON VARIO US DATES IN ACCOUNT NUMBER 2030 WITH P.N.B. PAHARIA, VARANASI. THE ADDITION M ADE BY THE A.O. HAS BEEN DELETED BY THE CIT(A). THIS ISSUE IS COMMON TO GRO UND NO.1(X) FOR A.Y. 2004-05, WHEREIN, AFTER A DETAILED DISCUSSION, ORDER OF THE CIT(A) HAS BEEN CONFIRMED VIDE PARAGRAPH NOS.88 TO 90 OF THIS ORDER. FOLLOWING TH E SAME, ORDER OF THE CIT(A) IS CONFIRMED FOR THE YEAR UNDER CONSIDERATION ALSO. 113. IN THE RESULT, ITA NO.88/A/2011 FOR A.Y. 2005- 06 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ITA NO.89/A/2011 FOR ASSESSMENT YEAR 2006-07 114. THE GROUNDS RAISED BY THE REVENUE IN ITS APPEA L ARE AS UNDER :- 1. THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN REITERATING HIS DECISION GIVEN IN HIS ORIGINAL APPE LLATE ORDER DATED 30.03.2010, THEREBY --- (I) NOT APPRECIATING THAT NO BOOKS OF ACCOUNT WERE FOUND IN ANY OF THE PREMISES WHERE SEARCH AND SEIZURE OPERATION WER E CARRIED OUT U/S 132 ON 23.03.2006. ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 63 (II) DELETING THE ADDITION OF RS.21,985/- MADE BY T HE AO ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PURCHASE OF JEWELLERY AS NO REPLY/EXPLANATION WAS FURNISHED BY ASSESSEE IN THIS REGARD. (III) DELETING THE ADDITION OF RS.95,000/- (RS.45,0 00/- AND RS.50,000/-) MADE BY THE AO ON ACCOUNT OF UNEXPLAIN ED INVESTMENT IN PURCHASE OF VALUABLE ARTICLES. (IV) DELETING THE ADDITION OF RS.2,40,000/- MADE BY THE AO ON ACCOUNT OF UNEXPLAINED INVESTMENT IN RD ACCOUNT ON THE BASIS OF SEIZED MATERIAL BK-07/3. (V) DELETING THE ADDITION OF RS.54,122/- MADE BY TH E AO ON ACCOUNT OF UNEXPLAINED INVESTMENT AS PER LOOSE PAPERS OF AN NEXURE LP- 3 FOR WHICH NO EXPLANATION WAS GIVEN BY THE ASSESSE E. (VI) DELETING THE ADDITION OF RS.7,00,000/- MADE BY THE AO ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE FORM OF PA YMENT TO ONE SHRI SANJEEV KUMAR ON 13.03.2006 AS PER PAGE N O.29 OF ANNEXURE LP-9. 2. THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED TO REL Y ON ASSESSEES WRITTEN SUBMISSION DATED 26.12.2007 AND THUS ALLOWI NG THE APPEAL WITHOUT GIVING DETAILED OWN FINDINGS AND ANY OPPORT UNITY TO THE ASSESSING OFFICER. 3. THAT THE ORDER OF LEARNED CIT (APPEAL) BEING ERR ONEOUS IN LAW AND ON FACTS MAY BE REVERSED AND THE ORDER OF AO MA Y KINDLY BE RESTORED. 4. CRAVES FOR LEAVE TO RAISE ANY GROUNDS OF APPEAL THAT MAY BE TAKEN AT THE TIME OF HEARING. 115. BRIEF FACTS OF THIS APPEAL ARE SIMILAR TO THE FACTS AS NARRATED IN A.Y. 2001-02 ABOVE VIDE PARAGRAPH NOS.1 TO 7 OF THIS ORDER. THE CIT (A) IN A.Y. 2004-2005 ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 64 STATED THAT HE HAS MADE DETAILED DISCUSSIONS REGARD ING GROUNDS OF APPEAL IN HIS ORDER FOR A.Y. 2000-2001. 116. GROUND NO.1 & 3 ARE IDENTICAL TO THE GROUNDS RAISED IN A.Y. 2001-0 2. IN THE LIGHT OF DETAILED DISCUSSIONS MADE IN THAT YEAR IN PARAGRAPH NOS.10 & 11 OF THIS ORDER, BOTH THESE GROUNDS ARE DISMISSED. 117. GROUND NO. 1(II) PERTAINS TO DELETION OF ADDITION OF RS.21,985/- MAD E BY THE A.O. ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PURCHA SE OF JEWELLERY. THE FACTS OF THIS GROUND ARE IDENTICAL TO THE FACTS IN A.Y. 2002 -03 IN ITA NO.85/A/2011. IN THE LIGHT OF THE DETAILED DISCUSSION MADE IN THE A.Y. 2 002-03 VIDE PARAGRAPH NOS.37 TO 45 OF THIS ORDER, WE FIND THAT THE CIT(A) HAS RIGHT LY DELETED THE ADDITION OF RS.21,985/-. ORDER OF THE CIT(A) IS CONFIRMED. 118. GROUND NO.1(III) PERTAIN TO DELETION OF ADDITION OF RS.95,000/- (RS. 45,000/- AND RS.50,000/-) MADE BY THE A.O. ON ACCOUNT OF UNE XPLAINED INVESTMENT IN PURCHASE OF VALUABLE ARTICLES. THE ADDITION MADE B Y THE A.O. HAS BEEN DELETED BY THE CIT(A). THE ASSESSEE FURNISHED THE DETAILED EX PLANATION BEFORE THE DY. DIRECTOR OF INCOME TAX VIDE LETTER DATED 16.06.2006 AND AGAIN SUBMITTED THE DETAILS OF THE SAID ASSETS VIDE LETTER 14.12.2007 A ND 20.12.2007. THE ASSESSEE EXPLAINED EACH ITEM OF THE ASSETS. ONE TV OF SAMSU NG WAS PURCHASED BY DR. SARJU ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 65 SINGH YADAV WHO IS A GOVERNMENT SERVANT. HE PURCH ASED THE TV IN A.Y. 1995- 96 OUT OF HIS OWN INCOME. ANOTHER SONY TV PERTAINI NG TO A.Y. 1998 WHICH WAS GIFTED TO THE DR. S.P. YADAV ON ACCOUNT OF HIS MARR IAGE HELD ON 04.05.1998. THE DVD OF RS.7,500/- WAS PERTAINING TO THE PERIOD BEFO RE THE SEARCH ASSESSMENT YEARS. THE ASSESSEE FURNISHED THE REPLY IN THIS R EGARD TO THE A.O. VIDE LETTER DATED 14.12.2007/20.12.2007. OTHER ITEMS OF FIXED ASSETS HAVE BEEN ACCOUNTED FOR IN M/S. SHIV SURGICAL NURSING HOME. THE REVENUE HAS F AILED TO POINT OUT ANY CONTRARY MATERIAL TO THE FINDING OF THE CIT(A) AND THE EXPLANATION OF THE ASSESSEE. IN THE LIGHT OF THE FACTS, WE DO NOT FIND ANY INFIR MITY IN THE ORDER OF CIT(A). THE ORDER OF CIT(A) IS CONFIRMED ON THE ISSUE. 119. GROUND NO.1(IV) PERTAINS TO DELETION OF ADDITION OF RS.2,40,000/- MADE BY THE A.O. ON ACCOUNT OF UNEXPLAINED INVESTMENT IN R. D. ACCOUNT ON THE BASIS OF SEIZED MATERIAL BK-07/3. THE ADDITION MADE BY THE A.O. HAS BEEN DELETED BY THE CIT(A). THE ISSUE HAS BEEN DISCUSSED IN DETAIL IN A.Y. 2004-05 VIDE PARAGRAPH NOS.75 & 78. FOLLOWING THE SAID DISCUSSION, WE CON FIRM THE ORDER OF CIT(A) ON THE ISSUE. 120. GROUND NO.1(V) PERTAINS TO DELETION OF ADDITION OF RS.54,122/- MAD E BY THE A.O. ON ACCOUNT OF UNEXPLAINED INVESTMENT AS PER LO OSE PAPERS OF ANNEXURE LP-3 ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 66 FOR WHICH NO EXPLANATION WAS GIVEN BY THE ASSESSEE. THE ADDITION MADE BY THE A.O. HAS BEEN DELETED BY THE CIT(A). 121. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE P ARTIES AND RECORDS PERUSED. THE SUBMISSION OF THE ASSESSEE THAT ENTRY OF LP-3 P AGE NO.20 OF RS.54,122/- DATED 02.06.2005 IS IN THE NAME OF KRISHNA. THIS ENTRY H AS ALREADY BEEN REFLECTED IN MARKED ANNEXURE BK-7 VIDE PAGE NO.2. THE SAID FIXE D DEPOSIT HAS ALREADY BEEN TAKEN INTO ACCOUNT IN THE ACCOUNT OF KRISHNA YADAV IN THE BOOKS OF ACCOUNT. THE ASSESSEE FURNISHED COPY OF BALANCE SHEET, COPY OF A CKNOWLEDGEMENT OF RETURN COPY OF MARKED ANNEXURE BK-7. SINCE THE ENTRY HAS ALREADY BEEN TAKEN INTO CONSIDERATION AND THE REVENUE HAS FAILED TO POINT O UT ANY CONTRARY MATERIAL TO THE FINDING OF CIT(A), WE, THEREFORE, DO NOT FIND ANY I NFIRMITY IN THE ORDER OF CITA. ORDER OF CIT IS CONFIRMED. 122. GROUND NO.1(VI) PERTAINS TO DELETING THE ADDITION OF RS.7,00,000/- MADE BY THE A.O. ON ACCOUNT OF UNEXPLAINED INVESTMENT IN TH E FORM OF PAYMENT TO ONE SHRI SANJEEV KUMAR ON 13.03.2006 AS PER PAGE NO.29 OF AN NEXURE LP-9. ADDITION MADE BY THE A.O. HAS BEEN DELETED BY THE CIT(A). 123. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE P ARTIES AND RECORDS PERUSED. IT IS SUBMISSION OF THE ASSESSEE THAT THE ASSESSEE HAS ALREADY EXPLAINED THE TRANSACTION ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 67 VIDE REPLY DATED 26.12.2007 THAT THIS ADVANCE WAS M ADE TO SHRI SANJEEV KUMAR FOR PURCHASE OF LAND. THE SAID ADVANCE HAS BEEN REFLEC TED IN THE ACCOUNT OF SHIV SURGICAL NURSING HOME PVT. LTD. WHEN THE AMOUNT HA S ALREADY BEEN REFLECTED IN THE BOOKS OF ACCOUNTS OF SHIV SURGICAL NURSING HOME PVT. LTD AND THIS FACT HAS NOT BEEN CONTROVERTED BY THE REVENUE, UNDER THE FACTS A ND CIRCUMSTANCES, WEE ARE OF THE VIEW THAT WHEN THE ADVANCE GIVEN FOR PURCHASE O F LAND HAS BEEN SHOWN IN THE BOOKS OF ACCOUNT, THE ADDITION IS NOT WARRANTED. T HE CIT(A) HAS RIGHTLY DELETED THE ADDITION. THEREFORE, THE ORDER OF CIT(A) IS CON FIRMED. 124. IN THE RESULT, ITA NO.89/A/2011 FOR A.Y. 2006- 07 IS DISMISSED. ITA NOS.79 & 80/A/2011 - SMT. NEETU SINGH YADAV FOR ASSESSMENT YEARS: 2005-06 & 2006-07 125. SINCE BOTH THE APPEALS FILED BY THE REVENUE AR E BASED ON IDENTICAL SET OF FACTS, THEREFORE, THESE APPEALS ARE BEING DECIDED T OGETHER. ITA NO.79/A/2011 ASSESSMENT YEAR 2005-06 126. THE GROUNDS RAISED BY THE REVENUE IN THIS APPE AL READ AS UNDER : 1. THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN REITERATING HIS DECISION GIVEN IN HIS ORIGINAL APPE LLATE ORDER DATED 30.03.2010, THEREBY --- ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 68 (I) DELETING THE ADDITION OF RS.51,991/-,WHICH WAS ADDED BY THE AO ON PROTECTIVE BASIS (SUBSTANTIVE ADDITION MADE IN T HE HANDS OF DR. S.P. YADAV ALSO DELETED) ON ACCOUNT OF UNEXPLAI NED EXPENDITURE IN PURCHASE OF JEWELLERY FOR WHICH NO E XPLANATION WAS OFFERED BY THE ASSESSEE DURING THE COURSE OF AS SESSMENT PROCEEDINGS DESPITE AMPLE OPPORTUNITIES GIVEN BY TH E A.O. (II) DELETING THE ADDITION OF RS.18,250/- WHICH REP RESENTED UNEXPLAINED ANNUAL DEPOSIT IN SAHARA DAILY DEPOSIT SCHEME (PASS BOOK NO.24800). (III) DELETING THE ADDITION OF RS.4,90,000/- WHICH WAS ADDED BY THE AO ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PURCHASE OF FDR. (IV) DELETING THE ADDITION OF RS.5,00,000/- WHICH W AS ADDED BY THE AO UNEXPLAINED INVESTMENTS IN PURCHASE OF VARIOUS F DRS TOTALING TO RS.5,00,000/-. (V) DELETING THE ADDITION OF RS.2,40,000/- MADE BY THE AO AS UNEXPLAINED INVESTMENT IN PURCHASE OF FDR AS PER DO CUMENTS NUMBER BK-07/3 OF THE SEIZED MATERIALS. (VI) DELETING THE ADDITION OF RS.16,30,000/- WHICH WAS MADE BY THE AO ON ACCOUNT OF UNEXPLAINED SAVINGS AS PER PAGE 13 OF REGISTER BK-07/13 (BACK) OF THE SEIZED MATERIALS. 2. THAT THE LEARNED CIT(A) HAS FAILED TO APPRECIATE THAT THE ASSESSEE WAS ALLOWED SUFFICIENT OPPORTUNITIES BUT O N SOME PRETEXT OR THE OTHER THE ASSESSEE ALWAYS AVOIDED COMPLIANCE. 3. THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED TO REL Y ON ASSESSEES WRITTEN SUBMISSION DATED 26.12.2007 AND THUS ALLOWI NG HER APPEAL WITHOUT GIVING DETAILED OWN FINDINGS AND ANY OPPORT UNITY TO THE ASSESSING OFFICER. 4. THAT THE ORDER OF LEARNED CIT(A) BEING ERRONEOUS IN LAW AND ON FACTS MAY BE REVERSED AND THE ORDER OF AO MAY KINDL Y BE RESTORED. 5. CRAVES FOR LEAVE TO RAISE ANY GROUNDS OF APPEAL THAT MAY BE TAKEN AT THE TIME OF HEARING. ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 69 ITA NO.80/A/2011 ASSESSMENT YEAR 2006-07 127. THE GROUNDS RAISED BY THE REVENUE IN THIS APPE AL READ AS UNDER : 1. THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN REITERATING HIS DECISION GIVEN IN HIS ORIGINAL APPE LLATE ORDER DATED 30.03.2010, THEREBY --- (I) DELETING THE ADDITION OF RS.21,985/-,WHICH WAS ADDED BY THE AO ON PROTECTIVE BASIS (SUBSTANTIVE ADDITION MADE IN T HE HANDS OF DR. S.P. YADAV ALSO DELETED) ON ACCOUNT OF UNEXPLAI NED EXPENDITURE IN PURCHASE OF JEWELLERY FOR WHICH NO E XPLANATION WAS OFFERED BY THE ASSESSEE DURING THE COURSE OF AS SESSMENT PROCEEDINGS DESPITE AMPLE OPPORTUNITIES GIVEN BY TH E A.O. (II) DELETING THE ADDITION OF RS.95,000/- (RS.45,00 0/- AND RS.50,000/-) MADE BY THE AO ON ACCOUNT OF UNEXPLAI NED INVESTMENT IN PURCHASE OF VALUABLE ARTICLES ON PROT ECTIVE BASIS (SUBSTANTIVE ADDITION MADE IN THE CASE OF DR. S.P. YADAV ALSO DELETED). (III) DELETING THE ADDITION OF RS.18,250/- WHICH RE PRESENTED UNEXPLAINED ANNUAL DEPOSIT IN SAHARA DAILY DEPOSIT SCHEME (PASS BOOK NO.24800). (IV) DELETING THE ADDITION OF RS.2,40,000/- MADE BY THE AO AS UNEXPLAINED INVESTMENTS IN PURCHASE OF FDR AS PER D OCUMENT NUMBER BK-07/3 OF THE SEIZED MATERIALS. (V) DELETING THE ADDITION OF RS.10,86,900/- MADE BY THE AO ON ACCOUNT OF UNEXPLAINED CASH DEPOSIT IN ALLAHABAD BA NK. (VI) DELETING THE ADDITION OF RS.9,79,295/- MADE BY THE AO ON ACCOUNT OF EXCESS OF ASSETS OVER LIABILITIES AS PER BALANCE SHEET. 2. THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED TO REL Y ON ASSESSEES WRITTEN SUBMISSION DATED 26.12.2007 AND THUS ALLOWI NG HER APPEAL WITHOUT GIVING DETAILED OWN FINDINGS AND ANY OPPORT UNITY TO THE ASSESSING OFFICER. ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 70 4. THAT THE ORDER OF LEARNED CIT(A) BEING ERRONEOUS IN LAW AND ON FACTS MAY BE REVERSED AND THE ORDER OF AO MAY KINDL Y BE RESTORED. 5. CRAVES FOR LEAVE TO RAISE ANY GROUNDS OF APPEAL THAT MAY BE TAKEN AT THE TIME OF HEARING. 128. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE P ARTIES AND RECORDS PERUSED. THE BRIEF FACTS OF THIS APPEAL ARE SIMILAR TO THE F ACTS AS NARRATED IN A.Y. 2001-02 ABOVE VIDE PARAGRAPH NOS.1 TO 7 OF THIS ORDER. THE CIT(A) IN A.Y. 2004-2005 STATED THAT HE HAS MADE DETAILED DISCUSSIONS REGARD ING GROUNDS OF APPEAL IN HIS ORDER FOR A..Y 2000-2001. 129. GROUND NO.1 IN BOTH THE APPEALS AND GROUND NO. 2 IN A.Y. 2006-07 AND GROUND NO.3 IN A.Y. 2005-06 ARE IDENTICAL TO THE GR OUNDS RAISED IN A.Y. 2001-02. IN THE LIGHT OF DETAILED DISCUSSIONS MADE IN THAT Y EAR IN PARAGRAPH NOS.10 & 11 OF THIS ORDER, BOTH THESE GROUNDS ARE DISMISSED. 130. GROUND NO.1(I) PERTAINS TO DELETION OF ADDITION OF RS.21,985/- IN A.Y. 2006- 07 AND RS.51,991/- IN A.Y. 2005-06 ON ACCOUNT OF JE WELLERY WHICH WERE ADDED BY THE A.O. ON PROTECTIVE BASIS (SUBSTANTIVE ADDITION MADE IN THE HANDS OF DR. S.P. YADAV ALSO DELETED) ON ACCOUNT OF UNEXPLAINED EXPEN DITURE IN PURCHASE OF JEWELLERY FOR WHICH NO EXPLANATION WAS OFFERED BY T HE ASSESSEE DURING THE COURSE ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 71 OF ASSESSMENT PROCEEDINGS DESPITE AMPLE OPPORTUNITI ES GIVEN BY THE A.O. THE ADDITIONS MADE THE A.O. HAVE BEEN DELETED BY THE CI T(A) 131. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE P ARTIES AND RECORDS PERUSED. BOTH THESE GROUNDS OF APPEAL PERTAIN TO ADDITION OF RS.21,925/- FOR A.Y. 2006-07 AND RS.51,991/- FOR A.Y. 2005-06 IN CASE OF ASSESSE E SMT. NEETTU SINGH YADAV. THE CONTENTION OF THE LD. DEPARTMENTAL REPRESENTATI VE WAS THAT THE SUBSTANTIVE ADDITION HAS BEEN MADE IN THE HANDS OF DR. S.P. YAD AV AND PROTECTIVE ADDITION HAS BEEN MADE IN THE HANDS OF SMT. NEETU SINGH YADAV. WHILE DEALING THE GROUNDS OF APPEAL IN THE CASE OF DR. S.P. YADAV, AFTER A DETAI LED DISCUSSION MADE IN PARAGRAPH NOS.37 TO 45 OF THIS ORDER WHERE THE ORDER OF CIT(A ) HAS BEEN CONFIRMED FOR DELETING THE ADDITIONS. IN THE SAID DETAILED DISCU SSIONS WE NOTICED THAT THE ASSESSEE HAS EXPLAINED THE SOURCE OF JEWELLERY. IN RESPECT OF ADDITION OF RS.20,691/- THE ASSESSEE SUBMITTED THAT THE A.O. HAS TAKEN THE INCO RRECT FIGURE. HE HAS TAKEN RS.20,691/- IN PLACE OF RS.2,091/- A COPY OF LP-2 PAGE NO.39 WAS FURNISHED BY THE ASSESSEE IN THE PAPER BOOK PAGE NO.224 SUBMITTED BE FORE THE REVENUE AUTHORITIES. IT WAS SUBMITTED THAT IN THE SAID PAGE AMOUNT WRITT EN RS.2,069/- BUT THE A.O. HAS TAKEN THE FIGURE OF RS.20,691/-. THE LD. AUTHORIS ED REPRESENTATIVE SUBMITTED THAT SMT. MAMATA YADAV WHO IS THE SISTER OF THE ASSESSEE HAS PURCHASED JEWELLERY FROM J.J. JEWELERS ON 24.04.2004 FOR VALUE OF RS.2,069/- WHICH HAS ALREADY BEEN SHOWN IN THE BALANCE SHEET FOR THE A.Y. 2005-06 IN THE HA NDS OF SMT. MAMATA YADAV. AS ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 72 REGARDS SUM OF RS.3,300/- DATED 24.02.2005, AS PER ANNEXURE LP-2 PAGE NO.33, THE JEWELLERY WAS PURCHASED FROM J.J. JEWELERS WHICH HA S ALREADY BEEN SHOWN IN THE BOOKS OF SMT. MAMATA YADAV FOR A.Y. 2005-06, A COPY OF BILL DATED 24.02.2005 FURNISHED BEFORE THE REVENUE AUTHORITIES. THE LD. AUTHORISED REPRESENTATIVE FURTHER SUBMITTED THAT SMT. MAMATA YADAV HAS ALREAD Y SHOWN THE SAID INVESTMENT DURING THE YEAR I.E. A.Y. 2005-06 RS.5,369/- (RS.20 69/- + RS.3300/-). A COPY OF BALANCE SHEET HAS ALREADY BEEN SUBMITTED BEFORE THE ASSESSING OFFICER. HE FURTHER SUBMITTED THAT THE ASSESSING OFFICER HAS MADE AN AD DITION OF RS.28,000/- DATED 20.12.2004 VIDE LP-2 PAGE NO.41 FOR PURCHASE OF JEW ELLERY BY DR. S.S. YADAV, R/O. S-25/265 K3, SARSAULI, CANTT., VARANASI. WE FIND T HAT THE ASSESSEE HAS EXPLAINED EACH AND EVERY ENTRY OF JEWELLERY. SOME OF THE JEW ELLERY BELONGED TO THIRD PARTY AND REMAINING HAS BEEN EXPLAINED BY THE ASSESSEE AS THE SAME HAS BEEN SHOWN IN THE RETURN OF INCOME. IN THE LIGHT OF EXPLANATION SUBMITTED BY THE ASSESSEE AND FACTS CONSIDERED BY THE CIT(A), WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) AS REVENUE DID NOT POINT OUT ANY CONTRARY MA TERIAL TO THE FINDING OF CIT(A). THUS, BOTH THE GROUNDS OF APPEALS FOR A.Y. 2005-06 AND 2006-07 ARE DISMISSED. 132 . GROUND NO.1(II) IN A.Y. 2005-06 AND GROUND NO.1(I II) IN A.Y. 2006-07 PERTAIN TO DELETION OF ADDITION OF RS.95,000/- (RS. 45,000/- AND RS.50,000/-) MADE BY THE A.O. ON ACCOUNT OF UNEXPLAINED INVESTMENT I N PURCHASE OF VALUABLE ARTICLES ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 73 ON PROTECTIVE BASIS (SUBSTANTIVE ADDITION MADE IN T HE CASE OF DR. S.P. YADAV ALSO DELETED). 133. THE BRIEF FACTS IN RESPECT OF GROUND NO.1(II) IN A.Y. 2005-06 AND GROUND NO.1(III) IN A.Y. 2006-07 WHICH ARE IN RESPECT OF D ELETION OF ADDITION OF RS.95,000/- (RS.45,000/- AND RS.50,000/-) MADE BY T HE A.O. ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PURCHASE OF VALUABLE ARTI CLES ON PROTECTIVE BASIS (SUBSTANTIVE ADDITION MADE IN THE CASE OF DR. S.P. YADAV ALSO DELETED) AS NOTED FROM THE A.O.S ORDER AT PARAGRAPH NO.9 ARE AS UNDE R :- AT THE TIME OF SEARCH PROCEEDINGS ON 23.03.2006 IN THE BUSINESS PREMISE OF M/S SHIV SURGICAL NURSING HOME PVT. LTD. AT AKATHA, PAHARIA, SARNATH ROAD, VARANASI, SEVERAL BA NK ACCOUNTS WERE FOUND. THESE BANK ACCOUNTS ARE INVENTORISED A S PER ANNEXURE-3 OF THE PANCHANAMA DATED 24.03.2006. SIMILARLY, BAN K ACCOUNTS WERE ALSO FOUND DURING THE SEARCH PROCEEDINGS AT THE RES IDENTIAL PREMISE WHICH WAS INVENTORISED AS ANNEXURE-BA OF THE PANCHA NAMA DATED 24.03.2006. IT IS NECESSARY TO MENTION HERE THAT A S PER DETAILS SUBMITTED BY THE ASSESSEE BEFORE THE DDIT (INV), VA RANASI AS PER WHICH DETAILS A MINIMUM AMOUNT OF RS.1,82,88,215/- REPRESENTED CREDITS OF DR. S.P. YADAV AND FAMILY MEMBERS IN THE VARIOUS BANK ACCOUNTS HELD BY THEM TILL DATE OF SEARCH. BESIDES ABOVE, DURING THE COURSE OF SEARCH PROCEEDI NGS ON 23.03.2006 AT M/S SHIVAM SURGICAL NURSING HOME PVT. LTD. ONE REGISTER (RAMBHA, THE PREMIUM) WAS SEIZED AS PER AN NEXURE-BK-7 OF THE PANCHANAMA. DETAILS OF INVESTMENT IN FDRS, INS URANCE POLICIES, MONTHLY INCOME SCHEME OF POST OFFICE, RELIEF BONDS, SHARES, BANK ACCOUNT ETC. ARE RECORDED IN THIS REGISTER. SUMMAR Y PER BASIS OF THIS REGISTER RELATING TO THE ASSESSEE DR. NEETU YADAV I S AS UNDER AND REST OF THE ENTRIES HAVE BEEN CONSIDERED IN THE CASE OF DR. S.P. YADAV :- ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 74 S. NO. REF. OF SEIZED MATERIAL NAME OF THE PERSON NATURE OF INVESTMENT ACCOUNT NO. AMOUNT (RS.) DATE OF INVESTM ENT 1 BK-07/1 24800 50 FOR ABOVE ENTRY IT HAS BEEN STATED IN THE CASE OF H USBAND THAT AS NO DETAILS ARE MENTIONED SO NO REPLY IS POSSIBLE . I HAVE CONSIDERED THE REPLY. THE ENTRY IS VERY CLEAR. IT IS SAHARA DAILY DEPOSIT SCHEME. PASS BOOK NO. IS 24800. DAILY DEPOSIT IS RS.50/-. DATE OF MATURITY IS 06.09.2006. BECAUSE THE ASSESSEE HAS NOT GIVEN ANY DETAIL FOR THIS ENTRY SO FOR A.Y. 2000-01 TO 2006-07 THE ANNUAL DEP OSIT IS TAKEN AT RS.18,250/- FOR EACH YEAR AND ADDED AS UNEXPLAINED INVESTMENT. 134. IN RESPECT OF GROUND NO.1(III) IN A.Y. 2005-06 , THE FACTS OF THIS GROUND NOTED BY THE A.O. IN PARAGRAPH NO.10 OF HIS ORDER ARE AS UNDER. THE ADDITION HAS BEEN MADE ON THE BASIS OF SEIZED PAPER BK-07/2. S. NO. REF. OF SEIZED MATERIAL NAME OF THE PERSON NATURE OF INVESTMENT ACCOUNT NO. AMOUNT (RS.) DATE OF INVESTMENT 4 BK-07/1 DR. NEETU SINGH DEPOSIT IN SAHARA 842014055805 4000 5 BK-07/1 DR. NEETU SINGH DEPOSIT IN SAHARA 842000619118 4000 8 BK-07/1 DR. NEETU SINGH DEPOSIT IN SAHARA 129002711878 20000 135. THE ADDITIONS MADE BY THE A.O. HAS BEEN DELETE D BY THE CIT(A). 136. WE HAVE HEARD THE LD. REPRESENTATIVE OF THE PA RTIES AND RECORDS PERUSED. THE ISSUE IN BOTH THE GROUNDS HAS BEEN DISCUSSED IN THE CASE OF DR. S.P. YADAV IN PARAGRAPH NO.118 OF THIS ORDER. AFTER DETAILED DIS CUSSION, IT WAS FOUND THAT THE ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 75 DOCUMENT OF DUMP ENTRY WHATEVER HAS BEEN NOTED IN T HE SAID DOCUMENT THE CORRESPONDING INVESTMENT IN SAHARA DEPOSIT SCHEME W ERE NOT FOUND. DURING THE ASSESSMENT PROCEEDING ALSO THE A.O. DID NOT FIND TH AT IN FACT SUCH DEPOSITS WERE THERE. WHEN A DOCUMENT IS FOUND RECORDED THAT SOME INVESTMENT IN BANK OR LIKE SAHARA DEPOSIT IN THE FORM OF DEPOSITS OR FDRS AND OTHERS, THE CORRESPONDING INSTRUMENT SHOULD ALSO BE FOUND AT THE TIME OF SEAR CH IF NOTING ON SUCH PAPERS ARE GENUINE. IN ABSENCE OF SUCH INSTRUMENT, MERELY ON THE BASIS OF PRESUMPTION, IT CANNOT BE SAID THAT THE ASSESSEE HAS MADE INVESTMEN T IN FDR AND DEPOSITS ETC. THE REVENUE HAS FAILED TO POINT OUT CORRESPONDING INSTR UMENT OR DOCUMENT OR IN FACT THERE WAS SAHARA DEPOSITS. IN ABSENCE OF SUCH CONC RETE FINDING, THE ADDITION MADE BY THE A.O. CANNOT BE SUSTAINED. IN THE LIGHT OF T HE FACT, THE CIT(A) HAS RIGHTLY DELETED THE ADDITION. ORDER OF THE CIT(A) IS CONFI RMED. 137. IN RESPECT OF GROUND NO.1(IV) IN A.Y. 2005-06, THE FACTS OF THIS GROUND NOTED BY THE A.O. IN PARAGRAPH NO.12 OF HIS ORDER A RE AS UNDER :- S. NO. REF. OF SEIZED MATERIAL NAME OF THE PERSON NATURE OF INVESTMENT ACCOUNT NO. AMOUNT (RS.) DATE OF INVESTMENT 14 BK-07/2 SHIWANSH C/O NEETU SINGH F.D. BANK OF BARODA 1319 48000 11-07-2004 15 BK-07/2 SHIWANSH C/O NEETU SINGH F.D. BANK OF BARODA 1320 47000 11-07-2004 ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 76 16 BK-07/2 SHIWANSH C/O NEETU SINGH F.D. BANK OF BARODA 1321 45000 11-07-2004 17 BK-07/2 SHIWANSH C/O NEETU SINGH F.D. BANK OF BARODA 1322 45000 11-07-2004 18 BK-07/2 SHIWANSH C/O NEETU SINGH F.D. BANK OF BARODA 1323 45000 11-07-2004 19 BK-07/2 SHIWANSH C/O NEETU SINGH F.D. BANK OF BARODA 1328 45000 11-07-2004 20 BK-07/2 SHIWANSH C/O NEETU SINGH F.D. BANK OF BARODA 1329 45000 11-07-2004 21 BK-07/2 SHIWANSH C/O NEETU SINGH F.D. BANK OF BARODA 1330 45000 11-07-2004 22 BK-07/2 SHIWANSH C/O NEETU SINGH F.D. BANK OF BARODA 1331 45000 11-07-2004 23 BK-07/2 SHIWANSH C/O NEETU SINGH F.D. BANK OF BARODA 1332 45000 11-07-2004 24 BK-07/2 SHIWANSH C/O NEETU SINGH F.D. BANK OF BARODA 1333 45000 11-07-2004 138. THE A.O. MADE THE ADDITION OF RS.5,00,000/- ON THE GROUND THAT THE ASSESSEE DID NOT EXPLAIN THE SOURCE OF FIXED DEPOSITS. THE CIT(A) DELETED THE ADDITION. 139. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE P ARTIES AND RECORDS PERUSED. THE EXPLANATION OF THE ASSESSEE THAT SEVERAL FDRS. AS NOTED BY THE A.O. WERE MADE BY DEBITING S.B. ACCOUNT NO.7928 AT BANK OF BO RODA, NAI SARAK, VARANASI. ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 77 COPY OF BANK ACCOUNT AND COPY OF FIXED DEPOSITS WER E FURNISHED BEFORE THE A.O. THE SAID S.B. ACCOUNT NO.7928 HAS BEEN OPENED IN TH E NAME OF DR. NETU YADAV IN WHICH RS.10,00,000/- WAS DEPOSITED ON 31.03.2003. FIXED DEPOSITS WERE MADE IN DIFFERENT DENOMINATIONS THROUGH CHEQUE NO.469351 ON 11.07.2003 BY DEBITING THE SAID BANK ACCOUNT. THE BANK ACCOUNT NO.7928 HAS BE EN CONSIDERED WHILE COMPUTING TOTAL INCOME OF DR. NEETU SINGH FOR A.Y. 2003-04 AND THE BALANCE OF RS.10,00,000/- IS DULY REFLECTED IN THE BALANCE SHE ET ENDING ON 30.03.2003 FURNISHED WITH THE RETURN. THE CIT(A) HAS GIVEN HI S FINDING THAT THE AMOUNT HAS ALREADY BEEN REFLECTED IN THE BALANCE SHEET ENDING ON 31.03.2003 AND 31.04.2004 ALONG WITH CASH FLOW STATEMENT AND THE ABOVE FIXED DEPOSITS HAVE BEEN MADE OUT OF THAT FUND. THEREFORE, THE ADDITION IS NOT WARRANTE D. THE REVENUE DID NOT CONTROVERT THE FACTS OF THE CASE. WHEN THE IMPUGNE D ADDITION OF RS.5,00,000/- HAS ALREADY BEEN OFFERED FOR TAX BY THE ASSESSEE WHILE FILING RETURN IN RESPONSE TO NOTICE UNDER SECTION 153A, THE ADDITION CANNOT BE M ADE. WE FIND THAT THE CIT(A) HAS RIGHTLY DELETED THE ADDITION. ORDER OF CIT(A) IS CONFIRMED ON THE ISSUE. 140. IN RESPECT OF GROUND NO.1(V) IN A.Y. 2005-06 & GRO UND NO.1(IV) IN A.Y. 2006-07 , THE A.O. MADE ADDITION ON THE BASIS OF SEIZED MAT ERIAL BK-07/3. THE FACTS OF THESE GROUNDS NOTED BY THE A.O. IN PARAGRA PH NO.13 OF HIS ORDER ARE AS UNDER :- ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 78 S. NO. REF. OF SEIZED MATERIAL NAME OF THE PERSON NATURE OF INVESTMENT ACCOUNT NO. AMOUNT (RS.) DATE OF INVESTMENT 30 BK-07/3 DR. NEETU SINGH DEPOSIT IN PNB 20007261 5000 12-09-2003 31 BK-07/3 DR. NEETU SINGH DEPOSIT IN PNB 20007262 5000 12-09-2003 32 BK-07/3 DR. NEETU SINGH DEPOSIT IN PNB 20007263 5000 12-09-2003 33 BK-07/3 DR. NEETU SINGH DEPOSIT IN PNB 20007264 5000 12-09-2003 141. THE CIT(A) HAS DELETED THE ADDITION. 142. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE P ARTIES AND RECORDS PERUSED. THE SUBMISSION OF THE ASSESSEE WAS THAT THE NOTING IS NOTHING, IT IS SIMPLY A DUMP PAPER. THERE IS NO REFERENCE OR SEQUENCE BASED ON WHICH IT CAN BE SAID THAT THE ASSESSEE HAS MADE THE INVESTMENT IN R.D. ACCOUNT, P ARTICULARLY UNDER THE FACTS AND CIRCUMSTANCES WHEN THERE IS NO SUCH INVESTMENT HAS BEEN FOUND DURING THE COURSE OF SEARCH. WHATEVER MATERIAL HAS BEEN FOUND IN REL ATION TO SUCH INVESTMENT WHICH HAS BEEN HONESTLY DISCLOSED BY THE ASSESSEE IN ADDI TIONAL INCOME OF RS.1.50 CRORES. IT WAS ALSO SUBMISSION OF THE ASSESSEE THAT THE SAI D ACCOUNT NUMBER WHICH IS MENTIONED IN BK-7/3 BY THE A.O. IS NOT CORRECT. TH E ASSESSEE SUBMITTED THE CORRECT ACCOUNT NUMBER ALONG WITH CERTIFICATE FROM POSTAL AUTHORITY. WHEN THE A.O. MADE THE ADDITION ON THE BASIS OF PRESUMPTION ON ACCOUNT NUMBER, THE SAME IS NOT CORRECT AND THE CORRECT NUMBER HAS ALREADY B EEN GIVEN BY THE ASSESSEE BY FURNISHING EVIDENCE. THE CIT(A) HAS DELETED THE AD DITION CONSIDERING THE ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 79 SUBMISSION OF THE ASSESSEE AND THE REVENUE HAS FAIL ED TO POINT OUT ANY CONTRARY MATERIAL TO THE FACTUAL FINDING GIVEN BY THE CIT(A) . IN THE LIGHT OF THE FACT, WE CONFIRM THE ORDER OF CIT(A). 143. IN RESPECT OF GROUND NO.1(VI) IN A.Y. 2005-06, THE A.O. MADE ADDITION ON THE BASIS OF SEIZED PAPER BK-07/3 BACK. THE FACTS OF THIS GROUND NOTED BY THE A.O. IN PARAGRAPH NO.18 OF HIS ORDER ARE AS UNDER :- ON THIS ISSUE, IN THE CASE OF DR. S.P. YADAV IT IS REPLIED THAT ENTRY OF RS.16.30 LACS REFER TO BALANCE OF RS.16,29 ,130/- ON 07.03.2005 IN A/C NO.23785 WITH PNB, PANDEYPUR, VAR ANASI IN THE NAME OF KRISHNA YADAV, TREASURE OF SOCIETY M/S GRAM IN AWAS ETC. AND THIS IS REFLECTED IN BOOKS OF SOCIETY AND FURTH ER WITHDRAWAL OF RS.6,00,000/- REFERS TO WITHDRAWAL MADE ON 13-08-20 05FROM SAID ACCOUNT. 144. THE A.O. NOTICED THAT AS PER REGISTER THE ENTR Y 16.30 REFERS TO ON 03.03.2005 AND NOT 07.03.2005. FURTHER IT READS AS SAVINGS. THE A.O. HELD THAT THE ENTRY IS UNEXPLAINED, THEREFORE, ADDITION OF RS .16,30,000/- WAS MADE. 145. THE ADDITION MADE BY THE A.O. HAS DELETED BY T HE CIT(A). THE ASSESSEE EXPLAINED THAT THE ENTRY IN BANK ACCOUNT REFLECTED IN BK-07 PAGE NO.13 ON 03.03.2005 IN THE NAME OF KRISHNA BUT THE ASSESSEE STATED VIDE HIS REPLAY DATED 28.12.2007 THAT ENTRY OF RS.16,30,000/- REFERRED TO BALANCE OF RS.16,29,130/- ON 03.03.2005 IN ACCOUNT NO.23785 WITH P.N.B. IN THE N AME OF SRI KRISHNA YADAV, ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 80 TREASURER OF THE SOCIETY M/S GRAMIN EVAM SARINI VIK AS SAMITI. THE AMOUNT WAS DULY REFLECTED IN THE ACCOUNT OF SOCIETY. THE WITHD RAWAL OF RS.6,00,000/- WAS DATED 13.08.2005. THE ASSESSEE FURNISHED THE COPY OF BANK ACCOUNT AND PERTAINING ENTREES WERE RECORDED IN THE BOOKS OF ACCOUNT OF TH E SOCIETY. THE REVENUE DID NOT CONTROVERT THE FACTS AND FINDING GIVEN BY THE CIT(A ). IN THE LIGHT OF THAT, WHEN THE ASSESSEE HAS EXPLAINED THE ENTRIES OF RELEVANT PAPE R FOUND AT THE TIME OF SEARCH THAT THE AMOUNT HAS ALREADY BEEN ACCOUNTED FOR IN THE BO OKS OF ACCOUNT FOR M/S GRAMIN EVAM SARINI VIKAS SAMITI, THE ADDITION IS NOT WARRA NTED IN THE HANDS OF THE ASSESSEE. THE CIT(A) HAS RIGHTLY DELETED THE ADDIT ION. ORDER OF THE CIT(A) IS CONFIRMED. 146. GROUND NOS.2, 3 & 4 IN RESPECT OF BOTH THE APP EALS HAVE BEEN DECIDED IN PARAGRAPH NOS.10 & 11 OF THIS ORDER. FOLLOWING THE SAID DISCUSSIONS, THESE GROUNDS ARE DECIDED ACCORDINGLY. 147. REMAINING GROUNDS OF APPEAL FOR A.Y. 2006-07 IN ITA NO.80/A/2011 ARE AS UNDER :- 148. IN RESPECT OF GROUND NO.1(II) IN A.Y. 2006-07 , THE FACTS NOTED FROM AOS ORDER AT PARAGRAPH NO.8 ARE AS UNDER :- AT THE TIME OF SEARCH PROCEEDINGS AN INVENTORY OF VALUABLE ITEMS FOUND AT THE RESIDENTIAL PREMISE OF THE ASSESSEE WA S MADE ON 23-03-2006 ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 81 AS PER ANNEXURE-1 OF THE PANCHANAMA. THE FOLLOWING VALUABLE ITEMS ARE RECORDED IN ANNEXURE-1 OF PANCHANAMA :- S.NO. VALUABLE ITEM 1. ONE COMPUTE WITH UPS (MICROTEK) 2. X-RAY MACHINE 100 MM (AMX) 3. BOILS MACHINE 4. AC (VOLTAS) 5. OPERATION TABLE 6. A.C. IN DOCTORS CHAMBER (VOLTAS) 7. MARUTI CAR 800 NO.UP-65P-0333 8. CAR TATA INDIGO NO.UP-65Z-0665 IN ADDITION TO THIS DR. NITU YADAV HAS ALSO FURNISH ED DETAILS OF VALUABLE ITEMS ACQUIRED BY HER AND FAMILY MEMBERS, IN REPLY TO Q. NO.15 OF PRELIMINARY STATEMENT RECORDED UNDER SECTION 132 OF THE INCOME TAX ACT, 961. AS PER HER STATEMENT, FOLLOWING ASSETS WE RE ACQUIRED: S.NO. DESCRIPTION OF THE ASSETS DATE OF ACQUISITION COST OF ACQUISITION 1 TWO COLOUR TV -- -- 2 ONE DVD -- -- 3 AIR CONDITIONER -- -- 4 BAJAJ MOTORCYCLE TWO YEARS OLD -- THE ASSESSEE WAS REQUESTED TO EXPLAIN THE SOURCE OF ACQUISITION OF ABOVE ASSETS WITH EVIDENCE. ON THIS ISSUE IT IS SE EN THAT MARUTI CAR 800 NO.UP-65P-0333 AND CAR TATA INDIGO NO.UP-65Z-0666 A RE AVAILABLE IN THE BALANCE SHEET AS WAS SUBMITTED BY THE ASSESSEE IN PRE-SEARCH PERIODS INCOME TAX RETURNS AS SUCH NO ADVERSE VIEW IS TAKEN . BUT NO EXPLANATION HAS BEEN OFFERED IN RESPECT OF 2 TVS AND 1 DVD AND 1 AC IN DOCTORS CHAMBER. IN ABSENCE OF ANY REPLY THE COST OF 2 TVS ARE ASSESSED AT RS.30000/- AND THAT OF DVD IS ASSESSED AT RS.7500/- AND THAT OF AC AT RS17500/-. TOTAL COMES TO RS.45000/- WHICH REMAINS UNEXPLAINED AND HENCE RS.45,000/- IS ADDED N A.Y. 2006-07 AS UNEXPL AINED INVESTMENT ON PROTECTIVE BASIS AND SUBSTANTIVE ADDITION IS MADE I N THE CASE OF DR. S.P. YADAV. (ADDITION RS.45,000/- IN A.Y. 2006-07) ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 82 PAGE 25 OF LP-3 SHOW THAT ONE MOBILE OF RS.50000/- WAS PURCHASED FROM GEMINI MOBILES PVT. LTD., LUCKNOW BY DR. S.P. YADAV ON 28.02.2006. THE SOURCE IS UNEXPLAINED AS NO REPLY HAS BEEN GIVE N. HENCE RS.50000/- IS ADDED IN A.Y. 2006-07 AS UNEXPLAINED INVESTMENT ON PROTECTIVE BASIS AND SUBSTANTIVE ADDITION IS MADE IN THE CASE OF DR. S.P. YADAV. (ADDITION RS.50,000/- IN A.Y. 2006-07). 149. THE A.O. HAS MADE THE ADDITION OF RS.95,000/- WHICH HAS BEEN DELETED BY THE CIT(A). 150. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE P ARTIES AND RECORDS PERUSED. THE CIT(A) DELETED THE ADDITION AFTER CONSIDERING T HE ASSESSEES DETAILED EXPLANATION OF EACH ITEM OF INVESTMENT. THE INVEST MENT OF RS.9,000/- IN WASHING MACHINE IS REFLECTED IN THE BALANCE SHEET FURNISHED ALONG WITH THE RETURN OF INCOME FOR THE A.Y. 200-01. THE ASSETS LIKE ONE T.V. AND ONE A.C. WAS PURCHASE BY SARJU SINGH YADAV IN A.Y. 1995-96 AND 1997-98 AND OTHER T .V. AND D.V.D. BOTH MODEL 1998 WERE RECEIVED BY DR. S.P. YADAV AND DR. NEETU YADAV ON THEIR MARRIAGE AS PER CUSTOMARY GIFT. AS REGARDS PAYMENT OF RS.50,00 0/- RECORDED AT PAGE NO.25 OF ANNEXURE LP-3, THE DOCUMENT ITSELF REVEAL THAT THIS HAS BEEN ISSUED BY M/S. GEMINI MOBILES PVT. LTD. TOWARD ADVANCE FOR PURCHAS E OF TAVERA DI WHICH THE A.O. HAS CONFUSED WITH THE INVESTMENT IN MOBILE PHO NE. RS.50,000/- HAS ALREADY BEEN REFLECTED IN THE BALANCE SHEET OF M/S SHIV SUR GICAL NURSING HOME PVT. LTD. FOR THE YEAR ENDED 31.03.2006. THE VERY ADDITION I S MADE IN THE HANDS OF DR. S.P. YADAV WHICH HAS ALSO BEEN DELETED AFTER DETAILED DI SCUSSIONS IN PARAGRAPH NO.118 OF THIS ORDER. WHEN THE ASSESSEE HAS SATISFACTORIL Y EXPLAINED THE ITEMS NOTED IN ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 83 LOOSE PAPER ONLY AT THE TIME OF SEARCH AND THE SAME IS VERIFIABLE, THE ADDITION CANNOT BE MADE. THE REVENUE HAS FAILED TO POINT AN Y CONTRARY MATERIAL TO THE FINDING OF THE CIT(A). IN THE LIGHT OF THE FACTS, ORDER OF THE CIT(A) IS CONFIRMED. 151. IN RESPECT OF GROUND NO.1(V) IN A.Y. 2006-07 , THE FACTS NOTED FROM AOS ORDER AT PARAGRAPH NO.27 ARE AS UNDER :- ALLAHABAD BANK, CHAUBEPUR, VARANASI THE DETAILS OF DEPOSITS ARE AS UNDER :- DATE AMOUNT DEPOSITED IN CASH 31-10-2005 TO 8-12-2005 1105000 5-4-2005 TO 10-08-2005 1700000 THUS DURING ABOVE PERIOD THERE WAS TOTAL NET DEPOSI T IN CASH AT RS.2805000/-. AS PER BALANCE SHEET ON 31-3-2005 CA SH IN HAND WAS AT RS.34338/- ONLY. THERE WERE DEBIT OF RS.900000/- A ND RS.215544/- FROM ALLAHABAD BANK ON 27-3-2006 AND ON 28-3-2006 AND FU RTHER THERE IS DEBIT OF RS.1800000/- FROM PNB ON 27-3-2006. SO NO BENEF IT FOR THESE DEBITS CAN BE GIVEN. THUS AS AGAINST NET DEPOSIT IN CASH AT RS.2805000/- THE ASSESSEE HAS SURRENDERED ONLY RS.17,18,200/- IN HER RETURN OF INCOME AS OTHER INCOME. SO SOURCE OF DEPOSIT OF DIFFERENCE A MOUNT OF RS.10,86,900/- IS NOT EXPLAINED. HENCE THE SAME IS ADDED AS UNEXP LAINED DEPOSIT IN BANK ACCOUNT IN A.Y. 2006-07. (ADDITION RS.10.86,900/- IN A.Y. 2006-07) 152. THE ADDITION MADE BY THE A.O. HAS BEEN DELETED BY THE CIT(A) ACCEPTING THE EXPLANATION MADE BY THE ASSESSEE THAT THE RELATED B ANK ACCOUNT HAS ALREADY BEEN SHOWN IN THE ACCOUNT OF M/S. SHIV SURGICAL NURSING HOME PVT. LTD. THE ASSESSEE HAS WORKED OUT THE OTHER INCOME ON THE BASIS OF SHO RTAGE THAT WAS BEING FACED DUE ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 84 TO VARIOUS INVESTMENTS, BANK DEPOSITS AND EXPENDITU RE ON DAY-TO-DAY BASIS. THE A.O. HAS INCORRECTLY TAKEN THE TRANSACTIONS ONLY IN TWO BANK ACCOUNTS AND LEFT THE DEPOSITS AND WITHDRAWALS FROM THE VARIOUS OTHER BAN KS. 153. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE P ARTIES AND RECORDS PERUSED. THE ISSUE UNDER CONSIDERATION IS APPRECIATION OF FA CTS REGARDING CALCULATION OF ADDITIONAL INCOME SURRENDERED AT THE TIME OF SEARCH . THE SUBMISSION OF THE ASSESSEE THAT THE SO-CALLED ENTRIES NOTED BY THE A. O. WERE ALREADY CONSIDERED BY CALCULATING ADDITIONAL INCOME FOR THE PURPOSE OF RE TURN UNDER SECTION 153A OF THE ACT. THE ASSESSEE HAS WORKED OUT THE OTHER INCOME ON THE BASIS OF SHORTAGE THAT WAS BEING FACED DUE TO VARIOUS INVESTMENTS, BANKS D EPOSITS AND OTHER EXPENDITURE ON DAY-TO-DAY BASIS. WHEREAS, THE A.O. HAS SEPARAT ELY CONSIDERED THE TRANSACTION IN TWO BANK ACCOUNTS WITHOUT CONSIDERING DEPOSITS A ND WITHDRAWALS FROM VARIOUS OTHER BANK ACCOUNTS. THE REVENUE HAS FAILED TO POI NT OUT ANY CONTRARY MATERIAL TO THE FINDING OF CIT(A) AND THE SUBMISSIONS OF THE AS SESSEE. IN THE LIGHT OF THE FACT, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CI T(A). ORDER OF THE CIT(A) IS CONFIRMED ON THE ISSUE. 154. IN RESPECT OF GROUND NO.1(VI) IN A.Y. 2006-0 7, THE FACTS NOTED FROM A.O.S ORDER AT PARAGRAPH NO.28 ARE AS UNDER :- ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 85 THE ASSESSEE HAS SHOWN CASH IN HAND AS ON 31-3-200 6 AT RS.19,36,249/-. AS DISCUSSED IN PRECEDING PARAGRAP H, THERE WERE WITHDRAWAL OF CASH FROM BANKS OF RS.900000/- AND RS .215544/- FROM ALLAHABAD BANK ON 27-3-2006 AND ON 28-3-2006 REACTI VELY AND FURTHER THERE IS DEBIT OF RS.1800000/- FROM PNB ON 27-3-200 6. THUS TOTAL WITHDRAWAL COMES TO RS.29,15,544/- IN CASH. BALANCE SHEET AND ACCOMPANYING DOCUMENTS TO RETURN DO NOT INDICATE TH AT ANY FRESH ASSET WAS ACQUIRED OF LIKE AMOUNT IN A.Y. 2006-07. THE D IFFERENCE OF CASH IN HAND DECLARED AND AS PER DISCUSSION MADE ABOVE COME S TO RS.9,79,295/- AND THIS AMOUNT IS EXCESS OF ASSET OVER LIABILITY I N THE BALANCE SHEET. HENCE IS ADDED IN A.Y. 2006-07. (ADDITION RS.9,79,295/- IN A.Y.2006-07 155. THE CIT(A) HAS DELETED THE SAID ADDITION ACCEP TING THE ASSESSEES SUBMISSION AND RECONCILIATION FILED BY THE ASSESSEE . THE FACTS OF THIS GROUND ARE SIMILAR TO GROUND NO.1(V) A.Y. 2006-07 DECIDED ABOV E IN PARAGRAPH NO.152 OF THIS ORDER. THE ADDITION HAS BEEN MADE BY A.O. WITHOUT APPRECIATING THE FACTS ON RECORD AND THE CASH FLOW STATEMENT FURNISHED BY THE ASSESSEE. THE ASSESSEE HAS FURNISHED THE RECONCILIATION STATEMENT OF CASH IN H AND REFLECTED IN BALANCE SHEET AS ON 31.03.2006. THE ASSESSEE SUBMITTED THAT THE A.O . HAS WRONGLY MENTIONED THE FACT IN PARAGRAPH NO.28 OF ASSESSMENT ORDER. THE C LOSING BALANCE AS ON 22.03.2006 AND DATE OF SEARCH (23.03.2006) WAS RS.1 ,36,349.63 AS REFLECTED IN PAGE NO.1280 IN REPLY DATED 13.12.2007 AND AFTER TH E DATE OF SEARCH, A SUM OF RS.18,00,000/- WAS WITHDRAWN FROM P.N.B., PANDEYPUR ON 27.03.2006 AND RS.100/- CREDITED TO IDBI BANK ACCOUNT NO 85630 AN D CLOSING BALANCE COMES TO RS.19,36,249/-. THE ASSESSEE HAS FULLY RECONCILED T HE CLOSING BALANCE SHOWN IN THE BALANCE SHEET FILED ALONG WITH THE RETURN FILED UND ER SECTION 153A OF THE ACT. THE ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 86 CIT(A) DELETED THE ADDITION AFTER ASSESSEES SUBMIS SION AND RECONCILIATION MADE BY THE ASSESSEE. THE REVENUE HAS FAILED TO POINT O UT ANY CONTRARY MATERIAL TO THE FINDING OF CIT(A). IN THE LIGHT OF THE SAME, ORDER OF THE CIT(A) IS CONFIRMED. 156. IN THE RESULT, ITA NOS.79 & 80/A/2011 FOR ASSE SSMENT YEARS 2005-06 & 2006-07 RESPECTIVELY IN THE CASE OF SMT. NEETU SING H YADAV ARE DISMISSED. ITA NOS.82 & 83/A/2011 - M/S. SHIVAM SURGICAL NURSI NG HOME ASSESSMENT YEARS: 2005-06 & 2006-07 157. SINCE BOTH THE APPEALS FILED BY THE REVENUE AR E BASED ON IDENTICAL SET OF FACTS, THEREFORE, THESE APPEALS ARE BEING DECIDED T OGETHER. THE GROUNDS RAISED IN BOTH THE APPEALS ARE ALSO BASED ON IDENTICAL SET OF FACTS, THEREFORE TO KNOW EXACT GROUNDS OF APPEAL, WE REPRODUCE GROUNDS FROM ITA NO .82/A/2011 FOR A.Y. 2005- 2006 AS UNDER :- 1. THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN REITERATING HIS DECISION GIVEN IN HIS ORIGINAL APPE LLATE ORDER DATED 30.03.2010, THEREBY --- (I) DISMISSING THE AOS ACTION IN ESTIMATING THE NE T PROFIT AT RS.12,43,550/- BY APPLYING NET PROFIT RATE OF 13.09 % ON ENHANCED RECEIPT AT RS.95,00,000/- IN VIEW OF THE F ACT THAT NEITHER THE BOOKS OF ACCOUNT WERE FOUND DURING THE COURSE OF SEARCH OPERATION NOR THEY WERE PRODUCED DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND FURTHER THE EXPENSES WER E ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 87 UNVERIFIABLE AND THE LOOSE PAPERS SEIZED REVEALED S UPPRESSION OF RECEIPTS BY THE ASSESSEE. 2. THAT THE ORDER OF LEARNED CIT(A) BEING ERRONEOUS IN LAW AND ON FACTS MAY BE REVERSED AND THE ORDER OF AO MAY KINDL Y BE RESTORED. 3. CRAVES FOR LEAVE TO RAISE ANY GROUNDS OF APPEAL THAT MAY BE TAKEN AT THE TIME OF HEARING. 158. SOME OF THE BRIEF FACTS OF THE CASE ARE IDENTI CAL TO THE CASE OF DR. S.P. YADAV IN ITA NO.84/A/2011 FOR A.Y. 2001-02 & OTHERS WHICH ARE THAT THE A.O. NOTED IN THE ASSESSMENT ORDER THAT THE ASSESSEE HAS SIMPLY A DOPTED THE TACTICS OF SEEKING ADJOURNMENTS ON SOME PRETEXT SO THAT DETAILS AS WER E CALLED FOR FROM HIM ARE NOT FURNISHED AT ALL. BEFORE THE CIT(A), SHRI O.P. SHU KLA, ADVOCATE APPEARED ON ASSESSEES BEHALF AND FILED VOLUMINOUS DETAILS ALON G WITH PAPER BOOK CONTAINING REPLIES AND OTHER MATERIALS FURNISHED BEFORE THE A. O. IT WAS SUBMITTED THAT THE A.O. HAS WRONGLY OBSERVED THAT THE ASSESSEE HAS SIM PLY ADOPTED THE TACTICS OF SEEKING ADJOURNMENTS. A DETAILED REPRESENTATION AN D VARIOUS EXPLANATION AND MATERIALS FURNISHED TO THE A.O. HAVE BEEN POINTED O UT TO THE CIT(A) WHICH HAS BEEN NOTED BY THE CIT(A) IN HIS ORDER FROM PAGE NOS .15 TO 20. IN RESPONSE TO NOTICE UNDER SECTION 153(A)(A) AND 153C THE ASSESSE E FURNISHED THE RETURNS DATED 02.02.2007. IT WAS ALSO POINTED OUT THAT THE RETUR NS OF INCOME WERE ALREADY FILED UNDER SECTION 139 OF THE ACT ALONG WITH BALANCE SHE ET AND PROFIT & LOSS ACCOUNT. A CASH FLOW STATEMENT OF SHRI SHIVA PRASAD YADAV AN D OTHER GROUPS WERE ALSO FURNISHED. REPLIES WERE FURNISHED BEFORE THE A.O. VIDE LETTERS DATED 13.12.2007, ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 88 20.12.2007, & 26.12.2007. THE CIT(A) ON THE BASIS OF DETAILS FURNISHED BY THE ASSESSEE OBSERVED THAT THE CIRCUMSTANCES PROPELLED THE A.O. TO ELICIT SUCH INFERENCE AGAINST THE ASSESSEE. THE CIT(A) OBSERVED THAT BE THAT AS IT MAY, BUT HE DID NOT PROPOSE TO ENLARGE THE AREA OF DISPUTE. HOWEVER, H AVING REGARD TO THE NATURE AND EXTENT OF COMPLIANCE VIS-A-VIS ITS BEARING ON THE A PPELLATE PROCEEDINGS OR WOULD HAVE BEEN ON THE ASSESSMENT PROCEEDINGS, IT IS LAWF ULLY REQUISITE AND PROPER TO EXAMINE THE A.O.S MODUS OPERANDI AT THE ANVIL OF O BJECTIVE TEST, SINCE LIMBS OF COMPLIANCE GO TO SHOW THAT THERE WAS PRIMA FACIE SU FFICIENCY IN THE ASSESSEES COMPLIANCE, IN AS MUCH AS, IF IT HAD BEEN CONSIDERE D AT THE ASSESSMENT STAGE, IN TRUE SENSE, THERE WOULD HAVE BEEN DIMINUTION OF VARIOUS UNWARRANTED AND UNJUSTIFIED ADDITIONS. THE CIT(A) ADMITTED THAT THE COMPLIANCE MADE BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IN THE NATURE OF REPLIES, CLARIFICATIONS AND EVIDENCES ARE QUITE CAPTIVATING AND PREHENSILE. IN THIS REGARD, A DETAILED DISCUSSION IS MADE BY THE CIT(A). THE CIT(A) ALSO GONE THROUG H THE PAPER BOOK AND OTHER REPLIES FURNISHED BEFORE HIM WHICH RUNS TO MORE THA N 1500 PAGES. THE CIT(A) NOTED THAT LOOKING TO THE REPLIES AND NATURE OF DOC UMENTS, THE REASON FOR NOT ENTERTAINING THE SAME ON 26.12.2007 AND COMPLETING THE ASSESSMENT PROCEEDINGS PRECIPITATELY AT THE LEVEL OF THE A.O. IS BEYOND ON ES WITS END. UNDER THE FACTS AND CIRCUMSTANCES, THE CIT(A) HELD THAT THE ASSESSEE WA S UNCONSCIONABLY PREVENTED TO PRESENT HIS CASE AT THE VERY CURTAIL JUNCTURE. THE REFORE, INFERENCE DRAWN BY THE A.O. HAS BEEN DEPRECATE AND REPLY DATED 24.12.2007 SUBMITTED BY THE ASSESSEE IN ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 89 THE OFFICE OF THE A.O. ON 26.12.2007 IS TREATED TO HAVE BEEN FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND THUS BECOMES AN INTEG RAL PART OF THE RECORDS. 159. DURING THE ASSESSMENT PROCEEDINGS THE A.O. NOT ICED THAT THE FIRM HAS BEEN STARTED FROM 01.04.2001 ONLY. THE TOTAL INCOME HAS BEEN DECLARED AT RS.3,26,150/-. THE ASSESSEE HAS DECLARED INCOME FROM RUNNING OF NU RSING HOME. TOTAL RECEIPT HAS BEEN SHOWN AT RS.59,28,323/-. THE A.O. FURTHER NOTICED THAT NO BOOKS OF ACCOUNT HAVE BEEN PRODUCED. NO BOOKS OF ACCOUNTS W ERE FOUND AT THE TIME OF SEARCH. NET PROFIT HAS BEEN SHOWN AT RS.2,40,254/- . FOLLOWING EXPENSES HAVE BEEN DEBITED BUT NONE OF THE EXPENSES ARE VERIFIABL E IN THE ABSENCE OF BOOKS OF ACCOUNT. HENCE DISALLOWANCE OF 20% IS BEING MADE F ROM SUCH EXPENSES AS UNDER:- PARTICULARS OF EXPENSES AMOUNT DEBITED DISALLOWANCES MEDICINE CONSUME 1922007 384401 STAFF WELFARE 58164 11632 TELEPHONE EXPENSES 65232 13046 REPAIR & MAINTENANCE 52079 10414 TRAVELING EXPENSES 138421 27684 ANESTHESIA CHARGES 446000 89200 MISCELLANEOUS 49191 9838 TOTAL 535801 160. BY ADDING THE ABOVE FIGURE TO N.P. THE A.O. WO RKED OUT THE PROFIT TO RS.7,76,055/-. THIS GIVES PROFIT RATE OF 13.09%. HOWEVER, FROM THE SEIZED LOOSE ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 90 PAPERS MARKED AS LP-3 AND LP-10 THE A.O. NOTICED TH AT THERE ARE VARIOUS PAPERS IN WHICH MONTH-WISE RECEIPTS ARE RECORDED AS UNDER WHI CH ARE FOR A.Y. 2005-06 :- MONTH RECEIPTS MAY 2004 524900 OCT 2004 1322024 SEPT 2004 1660400 JAN 2005 1257355 TOTAL 47,64,679 161. THE A.O. ASKED ASSESSEE TO CORRELATE THESE FIG URES WITH RETURNS OF INCOME WITH EVIDENCE. BUT NO REPLY HAS BEEN SUBMITTED. T HUS RECEIPT FOR 4 MONTHS ARE AT RS.47,64,679/- BUT THE ASSESSEE HAS DECLARED RECEIP T FOR 12 MONTHS AT RS.59,28,323/-. THE A.O. OBSERVED THAT OBVIOUSLY RE CEIPTS HAVE BEEN GROSSLY SUPPRESSED BY THE ASSESSEE. OTHER PAPERS OF THESE BUNCH OF PAPERS REVEAL THAT FOR A.Y. 2006-07 THE RECEIPTS FOR 6 MONTHS WERE AT RS.8 8,81,333/- AS UNDER :- MONTH RECEIPTS JUNE 2005 1458067 AUG 2005 1554948 SEPT 2005 1862657 MAY 2005 328130 OCT 2005 673680 OCT 2005 1576493 JAN 2006 1427358 TOTAL 8881333 ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 91 162. SO, ON THE BASIS OF ABOVE PAPERS, THE A.O. EST IMATED RECEIPTS AT RS.95,00,000/- BECAUSE RECEIPTS FOR WHOLE YEAR MUST NOT BE LESS THAN ABOVE. ON THIS FIGURE, BY APPLYING N.P. RATE OF 13.09%, THE N ET PROFIT WORKS OUT TO RS.12,43,550/-. BOOK RESULTS ARE REJECTED AFTER AP PLYING SECTION 145(3) OF THE ACT. 163. IN A.Y. 2006-07 THE A.O. ESTIMATED RECEIPTS OF RS.1,25,00,000/- AND ESTIMATED PROFIT BY APPLYING 27.20% RATE OF PROFIT. THE AMOUNT OF PROFIT WAS TAKEN AS RS.34,00,000/-. 164. THE CIT(A) FOLLOWED HIS DISCUSSIONS MADE IN TH E CASE OF DR. S.P. YADAV FOR A.YS. 2001-02 TO 2006-07 AND ACCORDINGLY FINDING IN ORIGINAL ORDER OF CIT(A) HAS BEEN CONFIRMED. THE RELEVANT FINDING IN ORIGINAL O RDER DATED 30.03.2010 ARE AS UNDER :- (PAGE NOS. 7, 8, 9 & 10) 5.1 ON PERUSAL OF ASSESSMENT ORDER, IT IS NOTICED THAT AO LED TO SUSPECT THE DISCLOSED PROFIT ON THE GROUND OF ALLEG ED NON PRODUCTION OF BOOK OF ACCOUNT AND DETAILS PICKED UP FROM THE S EIZED LOOSE PAPERS SHOWING TOTAL RECEIPTS OF RS.47,64,679/- IN FOUR M ONTHS. HAVING REGARD TO THE ABOVE FACTS, THE AO FURTHER PROCEEDED TO SUSPECT THE EXPENSES CLAIMED IN PROFIT & LOSS ACCOUNT AND ADDED 20% OF THE SAME AMOUNTING TO RS.5,35,801/- IN THE DISCLOSED NET PRO FIT AND WORKED OUT ENHANCED NET PROFIT RATE OF 13.09%. THE SAID N.P. RATE WAS APPLIED ON ESTIMATED RECEIPTS OF RS.95,00,000/- AND ACCORDI NGLY WORKED OUT NET PROFIT OF RS.12,43,550/-. ON THE CONTRARY, DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS SUBMITTED THAT IT IS IRONICAL THAT THE ASSESSMENT PROCEEDING ITSELF COMMENCED FIX ING THE FIRST DATE OF COMPLIANCE ON 13.12.2007 AND ON THE PRETEXT OF LIMITATION PERIOD IN DECEMBER 2007, LEARNED ASSESSING OFFICER HAS DEN IED TO ACCEPT THE EXPLANATION ON 26.12.2007 FOR WHICH HE HAD HIMS ELF PERMITTED ON ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 92 24.12.2007 AND WENT EVEN TO THE EXTENT OF FLOUTING THE DIRECTIONS OF HIS SUPERIOR AND IS MAKING THE ALLEGATION OF NON-COMPLI ANCE. ON NONE OF THE DATES FIXED FOR HEARING, THE COUNSEL HAS SOUGHT ADJOURNMENT AND TRIED TO DISCUSS THE CASE WITH THE HELP OF BOOKS OF ACCOUNTS PRODUCED AS MAJORITY OF THE QUERIES IN QUERY LETTER THAT ARE RELATED TO SEIZED RECORDS STOOD ALREADY COMPLIED WITH IN CASE OF DR.S .P. YADAV. IN FACT, ALL THE COMPLIANCES HAVE BEEN MADE EXCEPT FOR THE DETAILED REPLY TO THE QUERY LETTER WHICH WAS COMMON IN ALL THE GRO UP CASES AND DUE TO ITS LENGTHY NATURE, IT WAS A TIME CONSUMING PROC ESS. BUT BEFORE THE COMPLETION OF ASSESSMENT, THE WRITTEN SUBMISSION IN ALL GROUP CASES WAS DULY FURNISHED. ON ALL THE DATES FIXED, LEARNE D COUNSEL OF THE ASSESSEE APPEARED AND HAS REPLIED TO THE ENTIRE QUE STION THAT CAME UP FOR DISCUSSION RELATING TO THE BASIS OF RETURNS FUR NISHED AND SEIZED RECORDS. LEARNED ASSESSING OFFICER, HOWEVER, INSIS TED FOR THE WRITTEN SUBMISSION ON EACH ITEM AND PARA OF HIS QUERY LETTE R EVEN FOR WHICH THE EXPLANATION HAS ALREADY BEEN OFFERED. THIS BE ING A LENGTH TASK AND THE SIMILAR COMPLIANCES WERE TO BE PREPARED IN ALL THE CASES OF BOTH THE GROUPS OF DR. S.P. YADAV AND DR. K.K. SING H, IT WAS BOUND TO TAKE TIME, BUT LEARNED ASSESSING OFFICER HAS NEVER APPRECIATED THE CO- OPERATION THAT HE RECEIVED FROM THE ASSESSEE ALL AL ONG. ON 26.12.2007 WHILE LD. A.O. REFUSED TO ACCEPT THE WRI TTEN SUBMISSION IN OTHER CASE HE HAS RAISED CERTAIN QUERIES IN CASE OF FIRM THAT WERE TO THE COMPLIED WITH BY NEXT DATE I.E. 27.12.2007. TH E ASSESSEE HAS DULY COMPLIED WITH THE SAID QUERIES VIDE ITS COMPLIANCES DATED 27.12.2007. EXPLAINING THEREIN VARIOUS QUERIES MORE PARTICULARL Y THE ENTRY RECORDED IN VARIOUS PAGES OF ANNEXURE-LP10. REGARD ING THE ISSUE OF ALLEGED NON PRODUCTION OF BOOKS OF ACCOUNT AND BILL -VOUCHERS, THE ASSESSEE HAS SUBMITTED THAT THAT DURING THE COURSE OF HEARING OF THE CASE THE LEARNED ASSESSING OFFICER HAS NOT MADE ANY QUERY EITHER PRODUCING OF BOOKS OF ACCOUNT OR THE COPY OF THE AC COUNT OF THE EXPENSES INCURRED BY THE APPELLANT DEBITED TO THE P ROFIT & LOSS ACCOUNTS. IT IS HEREBY MENTIONED THAT DURING THE C OURSE OF SEARCH ALL THE DOCUMENTS WHICH HAS FOUND IN THE BUSINESS PREMI SES OF THE APPELLANT WAS SEIZED AND IN THE STATEMENT THE ASSES SEE HAS ALREADY STATED THAT THE BOOKS OF ACCOUNTS HAS MENTIONED BY THE ACCOUNTANT AND AT PRESENT HE IS NOT TRACEABLE AND WILL BE PRODUCED BEFORE THE DDIT VARANASI. AFTER THE POST SEARCH THE APPELLANT HAS PRODUCED ALL THE DOCUMENTS AS REQUIRED BY THE DDIT VARANASI. HENCE THE LD. A.O. HAS WRONGLY MENTIONED IN HIS ORDER THAT THE EXPENSES DE BITED TO THE PROFIT & LOSS ACCOUNT OR NOT VERIFIABLE IN THE ABSENCE OF BOOKS OF ACCOUNT THROUGH THE LD. A. O. HAS NEVER DIRECTED THE APPELL ANT TO PRODUCE ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 93 BOOKS OF ACCOUNT VIDE COMMON QUERY DATED 06.12.2007 FIXING THE DATE OF HEARING ON 13.12.2007. WHICH COMPLIANCE HAS ALR EADY MADE BY THE APPELLANT ON 26.12.2007 AS PER PAPER BOOK PAGE NO.294 TO 304. THAT THE APPELLANT FIRM IS ENGAGED IN BUSINESS W.E. F. 01.04.2001 AND TOTAL RECEIPTS IN THE ORIGINAL RETURN AS WELL AS TH E RETURN FURNISHED U/S 153A FILED ON 15.11.2007 IS THE SAME I.E. RS.592832 3.00 AND ALSO THE NET PROFIT DISCLOSED BY THE APPELLANT IS THE SAME R S.326153.00. A COPY OF ORIGINAL RETURN FOR A.Y. 2005-2006 AND COPY OF RETURN FILED U/S. 153C IS ENCLOSED AS PER PAPER BOOK PAGE NO. 46 TO 70. 5.2 I HAVE TRIED TO MAKE THE THINGS MORE CLEAR FROM THE CASE RECORDS, BUT IN VAIN SINCE RECORD RECEIVED FROM THE A.O., ON REQUISITION WAS IN SKELETON FORM ONLY CONTAINING OR IGINAL COPY OF ASSESSMENT ORDER, ORIGINAL RETURN AND BLANK ORDER S HEET. THE INTENTION AND PURPOSE OF THE AO ON THIS ACCOUNT IS HIGHLY SUSPICIOUS. HOWEVER, THE ISSUE BECOMES DISENTANGLED TO SOME EXT ENT FROM THE CONCLUDING PARA OF THE ASSESSMENT ORDER, WHEREIN IT IS MENTIONED THAT IN THIS CASE, AFTER SUBMISSION OF DRAFT ASSTT. OR DER ON 24.12.2007, THE ASSESSEE MOVED AN APPLICATION BEFORE LD. JOINT COMMISSIONER OF INCOME TAX (CENTRAL), VARANASI ON 26.12.2007. ON R ECEIVING THIS PETITION LD. JOINT COMMISSIONER OF INCOME TAX (CENT RAL) VARANASI VIDE ORDER UNDER F.NO.JCIT/CNARANASI/S.P.YADAV GROU P/2007- 08/81 DATED 27.12.2007 DIRECTED THAT THE ASSESSING OFFICER SHOULD FINALIZE THE ASSESSMENTS AFTER TAKING INTO CONSIDER ATION REPLY/EVIDENCE SUBMITTED BEFORE HIM TILL 26.12.2007. IT WAS ALSO DIRECTED TO SUBMIT DRAFT ASSESSMENT ORDERS IN THESE CASES BY 29.12.200 7. IN COMPLIANCE OF ABOVE DIRECTIONS, ASCERTAINMENT OF FACTS WERE IN THE CAMP OFFICE AT ALLAHABAD AND IT WAS FOUND THAT NO SUBMISSION WHATS OEVER WAS MADE IN THE CASE OF THE ASSESSEE TILL 26.12.2007. 5.3 FROM THE ABOVE CITATION, IT IS QUITE CLEAR THAT THERE WAS SUFFICIENCY AND REASONABILITY IN THE ASSESSEES APP REHENSION THAT ITS CASE WAS GOING TO BE DECIDED WITHOUT CONSIDERING FU LL FACTS OF THE CASE. HOWEVER, IT IS NOT CLEAR TO ME THAT WHEN THE AO HAD TIME FOR SENDING DRAFT ORDER UPTO 29.12.2007 FOR APPROVAL, W HY IT WAS NOT CONSIDERED PROPER TO ENTRAIN THE REPLY FILED BY THE ASSESSEE ON 27.12.2007. BE THAT AS IT MAY, I DO NOT PROPOSE TO GO FURTHER IN THIS MATTER, BUT TO LET OFF THIS ISSUE WITH THE NOTE THA T AO SHOULD HAVE ENTERTAINED THE REPLY FILED ON 27.12.2007. ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 94 5.4 I HAVE ALSO GONE THROUGH THE METHODOLOGY ADOPTE D BY THE AO FOR ESTIMATING NET PROFIT AND ALSO THE BASIS FOR IN VOKING PROVISIONS OF SECTION 145(3) OF THE IT ACT. IN MY CONSIDERED VIE W, THERE IS NO ESTABLISHED PROCEDURE FOR ESTIMATING THE NET PROFIT IN A MANNER AS DISCUSSED IN BOLDED PORTION OF PARA-5.1 OF THIS ORD ER. SECONDLY, THE AO HAS GROSSLY COMMITTED A MISTAKE OF NOT COMMUNICA TING HIS INTENTION FOR DOING SO AS PROVIDED IN FIRST PROVISO TO SECTION 144 OF THE IT ACT. AS REGARDS THE LOGIC AND RATIONALE OF CONS IDERING ADHOC DISALLOWANCES IN THE SEARCH CASES FOR ENHANCEMENT O F INCOME, THIS ISSUE HAS ALREADY BEEN DEALT WITH IN THE APPELLATE ORDER DATED 30.03.2010 FOR A.Y.2002-03 IN A.NO.42/DCIT/CC-IINNS /2007-08 IN THE ASSESSEES OWN CASE. FURTHER, AS REGARDS THE GENUINENESS AND EXTENT OF UTILITY OF LOOSE PAPERS SEIZED DURING THE COURSE OF SEARCH OPERATION, THIS ISSUE HAS ALSO BEEN DEALT WITH IN T HE CASE OF SMT. RADHIKA YADAV FOR A.Y.2001-02 VIDE ORDER DATED 20.0 1.2010 IN A.NO.54/DCIT/CC-IINNS/2007-08, WHEREIN IT HAS BEEN HELD THAT IN MY CONSIDERED VIEW WHEN THE ASSESSMENT ORDER U/S 15 3 IS TO BE PASSED IN CONSEQUENT UPON A SEARCH OPERATION U/S 132, IT I S INCUMBENT UPON THE ASSESSING OFFICER TO COMPLETE THE ASSESSMENT PR OCEEDINGS U/S 153 TAKING INTO ACCOUNT ALL MATERIAL/EVIDENCES SEIZED D URING THE SEARCH OR GATHERED SUBSEQUENTLY HAVING REGARD TO ITS RATIO AN D ITS PROXIMITY WITH THE FINALITY. THEREFORE, IN MY FURTHER CONSIDE RED VIEW, IF ANY ADDITION OR DISALLOWANCE IS MADE ON ADHOC BASIS OR ON THE BASIS OF SURMISES, THE SAME IS NOT ONLY AGAINST THE PRINCIPL E OF NATURAL JUSTICE BUT ALSO AGAINST THE CONDITION PRECEDENT TO THE SEA RCH OPERATION AS DISCUSSED IN SECTION132 OF THE I.T. ACT.. SINCE T HE INSTANT ASSESSMENT PROCEEDINGS WAS A SEQUEL TO SEARCH OPERATION, IT WA S ALSO INCUMBENT UPON THE AO TO BRING OUT SOME PLAUSIBLE AND CLINCHI NG EVIDENCE BY WAY OF FURTHER INQUIRY TO REBUT THE ASSESSEES VERS ION OR DENIAL FROM HAVING ANY CONNECTION WITH THE SAID DOCUMENTS. THE REFORE, CONTRARY TO THE ABOVE, IF ANY ADDITION OR DISALLOWANCE IS MA DE BY WAY OF ONLY INVISIBLE DISSATISFACTION WITH THE ASSESSEES VERSI ON, IN MY VIEW, THE SAME WILL NOT BE LAWFULLY SUSTAINABLE. 5.5 IN VIEW OF ABOVE FACTS AND DISCUSSION, I HAVE N O HESITATION TO HOLD THAT THE AO HAD NO MATERIAL EVIDENCE OR GROUND TO REJECT THE BOOK RESULT U/S 145(3) OF THE I.T. ACT. THEREFORE, ADDITION MADE ON THIS ACCOUNT IS HEREBY DELETED. ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 95 165. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE P ARTIES AND RECORDS PERUSED. THE ISSUE INVOLVED IS IN TWO FOLDS, I.E., REJECTION OF BOOKS OF ACCOUNT AND ESTIMATION OF PROFITS ON THE BASIS OF REJECTION OF EXPENDITURES. ON IDENTICAL SET OF FACTS, THE ISSUE HAS BEEN DECIDED IN ITA NO.149/A/2 012 FOR A.Y. 2009-10, M/S. A.K. CONSTRUCTION COMPANY, AND ITA NO.140/A/2012 FO R A.Y. 2009-10, M/S. CHANDRAWATI CONSTRUCTION, VARANASI, ORDER DATED 13. 12.2012. THE RELEVANT FINDINGS ARE AS UNDER:- 12. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PA RTIES AND RECORDS PERUSED. THE ISSUES TO BE EXAMINED IN THES E CASES ARE WHETHER UNDER THE FACTS AND CIRCUMSTANCES OF THE CA SES THE A.O. IS CORRECT IN REJECTING BOOKS OF ACCOUNT INVOKING SECT ION 145(3) OF THE ACT AND WHETHER ON MERIT EXPENSES HAVE BEEN RIGHTLY DISALLOWED BY THE A.O. TO EXAMINE THE ISSUE, WE WOULD LIKE TO RE FER RELEVANT PROVISIONS OF SECTION 145 OF THE ACT WHICH READS AS UNDER:- 145. (1) INCOME CHARGEABLE UNDER THE HEAD 'PROFITS AND GAINS OF BUSINESS OR PROFESSION' OR 'INCOME FROM OTHER SO URCES' SHALL, SUBJECT TO THE PROVISIONS OF SUB-SECTION (2) , BE COMPUTED IN ACCORDANCE WITH EITHER CASH OR MERCANTILE SYSTEM OF ACCOUNTING REGULARLY EMPLOYED BY THE ASSESSEE. (2) THE CENTRAL GOVERNMENT MAY NOTIFY IN THE OFFICI AL GAZETTE FROM TIME TO TIME ACCOUNTING STANDARDS TO BE FOLLOW ED BY ANY CLASS OF ASSESSEES OR IN RESPECT OF ANY CLASS OF IN COME. (3) WHERE THE ASSESSING OFFICER IS NOT SATISFIED AB OUT THE CORRECTNESS OR COMPLETENESS OF THE ACCOUNTS OF THE ASSESSEE, OR WHERE THE METHOD OF ACCOUNTING PROVIDED IN SUB-SECT ION (1) OR ACCOUNTING STANDARDS AS NOTIFIED UNDER SUB-SECTION (2), HAVE NOT BEEN REGULARLY FOLLOWED BY THE ASSESSEE, THE AS SESSING OFFICER MAY MAKE AN ASSESSMENT IN THE MANNER PROVID ED IN SECTION 144 .] ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 96 13. IT IS TO NOTE THAT UNDER SECTION 145(1), THE IN COME CHARGEABLE UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PR OFESSION OR INCOME FROM OTHER SOURCES HAS TO BE COMPUTED IN A CCORDANCE WITH THE METHOD OF ACCOUNTING REGULARLY EMPLOYED BY THE ASSESSEE, UNLESS IN THE OPINION OF THE INCOME-TAX OFFICER, THE INCOM E, PROFITS AND GAINS CANNOT PROPERLY BE DEDUCED THEREFROM OR THE INCOME- TAX OFFICER IS NOT SATISFIED ABOUT THE CORRECTNESS OR COMPLETENESS OF THE ACCOUNTS OF THE ASSESSEE. UNDER THE SUB-SECTION (3) OF SECTION 145 IN ANY CASE WHERE THE ACCOUNTS ARE CORRECT AND COMPLETE TO THE SATISF ACTION OF THE INCOME-TAX OFFICER BUT THE METHOD EMPLOYED IS SUCH THAT, IN THE OPINION OF THE INCOME-TAX OFFICER, THE INCOME CANNO T PROPERLY BE DEDUCED THEREFROM, THEN THE COMPUTATION HAS TO BE M ADE UPON SUCH BASIS AND IN SUCH MANNER AS THE INCOME-TAX OFFICER MAY DETERMINE. HOWEVER, IF THE INCOME-TAX OFFICER IS NOT SATISFIED ABOUT THE CORRECTNESS OR COMPLETENESS OF THE ACCOUNTS OF THE ASSESSEE OR WHERE NO METHOD OF ACCOUNTING HAS BEEN REGULARLY EMPLOYED BY THE ASSESSEE, THE INCOME-TAX OFFICER MAY MAKE THE ASSES SMENT IN THE MANNER PROVIDED IN SECTION 144. SECTION 145 IS MAND ATORY AND THE REVENUE IS BOUND BY THE ASSESSEE'S CHOICE OF A METH OD REGULARLY EMPLOYED UNLESS BY THAT METHOD THE TRUE INCOME, PRO FITS AND GAINS CANNOT BE ARRIVED AT. IN OTHER WORDS, SECTION 145 E NACTS THAT FOR THE PURPOSE OF SECTION 28 (PROFITS AND GAINS OF BUSINES S, PROFESSION OR VOCATION) AND SECTION 56 (INCOME FROM OTHER SOURCES ), INCOME, PROFIT AND GAINS MUST BE COMPUTED IN ACCORDANCE WITH THE M ETHOD OF ACCOUNTING REGULARLY EMPLOYED BY THE ASSESSEE. THER EFORE, IF THE ASSESSEE REGULARLY EMPLOYS A PARTICULAR METHOD OF A CCOUNTING AND IF NO DEFECTS ARE FOUND IN THE METHOD OR MAINTENANCE O F ACCOUNTS, THE TAXING AUTHORITY IS BOUND TO COMPUTE THE PROFITS AN D GAINS OF BUSINESS OR PROFESSION OR VOCATION IN ACCORDANCE WITH THE ME THOD EMPLOYED BY THE ASSESSEE. THEREFORE, IN CASE WHERE THE INCOME- TAX OFFICER OR THE TAXING AUTHORITY FINDS THAT IN MAINTAINING ACCOUNTS , THE ASSESSEE HAS REGULARLY EMPLOYED A PARTICULAR METHOD AND DOES NOT MAKE ANY INVESTIGATION TO FIND OR DOES NOT FIND ANY DEFECT I N THE ACCOUNTS AND ACCEPT THE ACCOUNTS AS THEY ARE, HE IS BOUND TO COM PUTE THE INCOME IN ACCORDANCE WITH THE ACCOUNTS MAINTAINED BY THE ASSE SSEE. THEREFORE, WHEN THE ASSESSEE REPRESENTS TO THE TAXING AUTHORIT Y THAT ITS ACCOUNTS ARE MAINTAINED BY A METHOD OF ACCOUNTING REGULARLY EMPLOYED, HE EXPECTS THE INCOME-TAX OFFICER TO ACT UPON SUCH MET HOD AND COMPUTE THE INCOME ACCORDINGLY. ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 97 14. THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. GOTANLIME KHANIJ UDYOG, 256 ITR 243 (RAJ) HELD THAT PROVISIONS DO NOT ENVISAGE THAT BY RESORTING TO BEST JUDGMENT ASS ESSMENT, THE ASSESSING AUTHORITY MUST REACH A DIFFERENT FIGURE O F INCOME AND PROFIT THAN WHAT HAS BEEN DISCLOSED BY THE ASSESSEE. 15. THE JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. SMT. POONAM RANI, 326 ITR 223 (DELHI) IS APPLIC ABLE TO THE FACTS OF THE CASE UNDER CONSIDERATION. THE FACTS OF THAT CASE WERE THAT THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF MANUFACTURI NG COPPER WIRES. FOR THE RELEVANT ASSESSMENT YEAR, SHE FILED A RETUR N DECLARING GROSS PROFIT AT THE RATE OF 1.4 PER CENT AGAINST GROSS PR OFIT RATE OF 5.91 PER CENT FOR THE PRECEDING YEAR. ON BEING ASKED, THE A SSESSEE ATTRIBUTED THE FALL IN GROSS PROFIT RATE TO THE INCREASE IN TH E PURCHASE PRICE. THE ASSESSING OFFICER REJECTED THE EXPLANATION GIVEN BY THE ASSESSEE ON THE GROUND THAT NO SUPPORTING EVIDENCE WAS PRODUCED TO SHOW INCREASE IN THE PURCHASE PRICE AND DECREASE IN SALE S. HE ALSO NOTICED THAT THE WEIGHT OF FINISHED PRODUCTS DECLARED BY TH E ASSESSEE WAS MORE THAN THE WEIGHT OF RAW MATERIALS. WHEN ASKED TO EXPLAIN, THE ASSESSEE SUBMITTED THAT AFTER DRAWING WIRE, THE PRO CESS WENT ON TO PUT THE WIRE FOR ENAMELLING, AS A RESULT OF WHICH THE W EIGHT OF THE WIRE INCREASED BY 2-3 PER CENT. THE ASSESSING OFFICER FE LT THAT IN THE ABSENCE OF ADEQUATE SUPPORTING EVIDENCE, THE EXPLAN ATION GIVEN BY THE ASSESSEE COULD NOT BE ACCEPTED. HE, THEREFORE, REJE CTED THE ACCOUNT BOOKS OF THE ASSESSEE UNDER SECTION 145(3) AND ESTI MATED INCOME BY APPLYING THE GROSS PROFIT RATE OF THE PRECEDING ASS ESSMENT YEAR. ON APPEAL, THE COMMISSIONER (APPEALS) NOTED THAT THE A SSESSEE HAD FURNISHED COMPLETE DETAILS, INCLUDING COMPARATIVE D ETAILS IN RESPECT OF PURCHASE OF RAW MATERIALS AND MANUFACTURE OF COPPER WIRES AS WELL AS IN RESPECT OF SALE DURING THE YEAR IN QUESTION AS C OMPARED TO THE EARLIER YEARS. HE ALSO TOOK NOTE OF THE FACT THAT T HE ASSESSEE WAS DULY REGISTERED UNDER THE CENTRAL EXCISE ACT AND WAS MAI NTAINING PROPER QUANTITATIVE DETAILS IN THE PRESCRIBED MANNER AND, THEREFORE, HELD THAT THE ASSESSEE HAD ADOPTED CONSISTENT AND REGULAR MET HOD OF ACCOUNTING AND VALUATION OF THE STOCK DURING THE YEAR IN QUEST ION AS WAS DONE BY HER IN THE PRECEDING YEARS. HE, ACCORDINGLY, HELD THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN REJECTING THE BOOKS OF ACCOUNT AND IN APPLYING THE ENHANCED GROSS PROFIT RATIO. THE TRIBU NAL DISMISSED THE REVENUES APPEAL, HOLDING THAT SINCE NO DEFECTS IN THE ACCOUNT BOOKS WERE POINTED OUT, THE ACCOUNTS COULD NOT HAVE BEEN REJECTED AND NO ADDITION COULD HAVE BEEN MADE MERELY ON ACCOUNT OF LOWER PROFIT ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 98 DECLARED BY THE ASSESSEE. ON THE REVENUES APPEAL, THE HIGH COURT HELD AS UNDER :- (PAGE 225) SECTION 145(3) PROVIDES FOR ASSESSMENT IN THE MANNER PRESCRIBED IN SECTION 144 WHERE THE ASSESSIN G OFFICER IS NOT SATISFIED ABOUT THE CORRECTNESS OR COMPLETEN ESS OF THE ACCOUNTS OF THE ASSESSEE OR WHERE EITHER THE METHOD OF ACCOUNTING PROVIDED IN SUB-SECTION (1) OR THE ACCOU NTING STANDARDS AS NOTIFIED UNDER SUB-SECTION (2) HAS BEE N REGULARLY FOLLOWED BY THE ASSESSEE. IT WAS NOT THE CASE OF TH E REVENUE THAT THE ASSESSEE HAD NOT FOLLOWED EITHER CASH OR MERCAN TILE SYSTEM OF ACCOUNTING. IT WAS ALSO NOT THE CASE OF THE REVE NUE THAT THE CENTRAL GOVERNMENT HAD NOTIFIED ANY PARTICULAR ACCO UNTING STANDARD TO BE FOLLOWED BY TOUR OPERATORS. HENCE, T HE SECOND PART OF SUB-SECTION (3) OF SECTION 145 WOULD NOT AP PLY TO THE INSTANT CASE. [PARA 5] ..THE ASSESSING OFFICER HAD NOT POINTED OUT ANY PARTICULAR DEFECT OR DISCREPANCY IN THE ACCOUNT BOO KS MAINTAINED BY THE ASSESSEE. DURING THE COURSE OF HE ARING BEFORE THE COMMISSIONER (APPEALS), IT WAS POINTED O UT BY THE ASSESSEE THAT HER ACCOUNT BOOKS WERE DULY AUDITED U NDER SECTION 44AB OF THE CENTRAL EXCISE ACT AND THE QUAN TITATIVE DETAILS AS REQUIRED BY .. (PAGE 227 ..) CLAUSE 28(B) OF FORM NO. 3CD REGAR DING RAW MATERIAL AND FINISHED PRODUCTS (I.E., OPENING STOCK OF RAW MATERIAL, RAW MATERIAL ISSUED TO PRODUCTION DEPARTM ENT, RAW MATERIAL CONSUMED AND CLOSING STOCK OF RAW MATERIAL , OPENING STOCK OF FINISHED GOODS, FINISHED GOODS PRODUCED DU RING THE YEAR, FINISHED GOODS SOLD AND CLOSING STOCK OF FINI SHED GOODS) WERE PREPARED AND AUDITED BY CERTIFIED ACCOUNTANT A ND WERE ENCLOSED WITH FORM NO. 3CD WHICH HAD BEEN PLACED ON RECORD, BUT THE ASSESSING OFFICER HAD IGNORED THE FACTUAL F IGURES, BOTH IN QUALITATIVE AND QUANTITATIVE TERMS, ENCLOSED WIT H THE RETURN AND FILED DURING THE COURSE OF ASSESSMENT PROCEEDIN GS. IT WAS FOR THAT REASON THAT THE COMMISSIONER (APPEALS) WAS SATISFIED THAT THE ASSESSEE HAD FURNISHED COMPLETE DETAILS, I NCLUDING QUANTITATIVE DETAILS IN RESPECT OF PURCHASE OF RAW MATERIAL, MANUFACTURE OF COPPER WIRE AND SALE OF THE FINISHED PRODUCTS. IN THOSE CIRCUMSTANCES, THE ACCOUNTS MAINTAINED BY THE ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 99 ASSESSEE COULD NOT HAVE BEEN SAID TO BE INCOMPLETE OR INACCURATE. IN FACT, THE ASSESSING OFFICER HAD NO M ATERIAL BEFORE HIM TO TREAT THE ACCOUNTS OF THE ASSESSEE AS DEFECTIVE OR INCOMPLETE. [PARA 6] AS REGARDS THE MARGINAL INCREASE IN THE WEIGHT OF T HE FINISHED PRODUCT, THE EXPLANATION GIVEN BY THE ASSESSEE HAD BEEN ACCEPTED NOT ONLY BY THE COMMISSIONER (APPEALS) BUT ALSO BY THE TRIBUNAL. THE ASSESSING OFFICER HAD NO MATERIAL BEFORE HIM ON THE BASIS OF WHICH IT COULD BE SAID THAT THE WEI GHT OF THE WIRE DID NOT INCREASE EVEN MARGINALLY DURING THE PROCESS OF ENAMELLING. THEREFORE, HE HAD NO JUSTIFICATION, IN LAW, IN REJECTING THE EXPLANATION GIVEN BY THE ASSESSEE IN THAT REGARD. THE FALL IN GROSS PROFIT RATIO, IN THE ABSENCE OF A NY COGENT REASONS COULD NOT, BY ITSELF, HAVE BEEN A GROUND TO HOLD THAT PROPER INCOME OF THE ASSESSEE COULD NOT BE DEDUCED FROM THE ACCOUNTS MAINTAINED BY HER AND, CONSEQUENTLY, COULD NOT HAVE BEEN A GROUND TO REJECT THE ACCOUNTS BY INVOKING SE CTION 145(3). [PARA 8] THE FALL IN THE GROSS PROFIT RATIO COULD BE FOR VAR IOUS REASONS SUCH AS INCREASE IN THE COST OF RAW MATERIAL, DECRE ASE IN THE MARKET PRICE OF FINISHED PRODUCT, INCREASE IN THE C OST OF PROCESSING BY THE ASSESSEE, ETC. THERE WAS NO FINDI NG THAT THE ACTUAL COST OF THE RAW MATERIAL PURCHASED BY THE AS SESSEE WAS LESS THAN WHAT WAS DECLARED IN THE ACCOUNT BOOKS. T HERE WAS NO FINDING THAT THE ACTUAL COST OF PROCESSING CARRIED OUT BY THE ASSESSEE WAS LESS THAN WHAT HAD BEEN DECLARED IN HE R ACCOUNT BOOKS. NO PARTICULAR EXPENDITURE SHOWN IN THE ACCOU NT BOOKS HAD BEEN DISALLOWED BY THE ASSESSING OFFICER. THERE WAS NO FINDING BY THE ASSESSING OFFICER THAT THE ACTUAL QU ANTITY OF FINISHED PRODUCTS PRODUCED BY THE ASSESSEE WAS MORE THAN WHAT WAS SHOWN IN THE ACCOUNT BOOKS. THERE WAS NO FINDIN G THAT THE . (PAGE 228 ) ASSESSEE HAD MADE ANY SUCH SALE OF TH E FINISHED PRODUCTS WHICH WAS NOT REFLECTED IN THE ACCOUNT BOO KS. THERE WAS NO FINDING BY THE ASSESSING OFFICER THAT THE FI NISHED PRODUCTS WERE SOLD BY THE ASSESSEE AT A PRICE HIGHE R THAN WHAT WAS DECLARED IN THE ACCOUNT BOOKS. IN THOSE CIRCUMS TANCES, THE COMMISSIONER (APPEALS) AND THE TRIBUNAL WERE JUSTIF IED IN HOLDING THAT THE ASSESSING OFFICER COULD NOT HAVE I NCREASED THE ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 100 GROSS PROFIT RATIO MERELY BECAUSE IT WAS LOW AS COM PARED TO THE GROSS PROFIT RATIO OF THE PRECEDING YEAR. [PARA 9] THE REVENUE CONTENDED THAT THE ASSESSEE WAS NOT MAI NTAINING THE DAILY STOCK REGISTER. HOWEVER, NO SUCH FINDING WAS FOUND IN THE ASSESSMENT ORDER. ON THE OTHER HAND, THE ASSESS EE HAD SUBMITTED BEFORE THE COMMISSIONER (APPEALS) THAT FO RM NO. 3CD CONTAINING ALL THE QUANTITATIVE DETAILS IN RESP ECT OF RAW MATERIALS AS WELL AS THE FINISHED GOODS AND DULY AU DITED BY THE CERTIFIED ACCOUNTANT HAD BEEN PLACED ON RECORD, BUT THE ASSESSING OFFICER IGNORED THOSE ACTUAL FIGURES ENCL OSED WITH THE RETURN. IN ANY CASE, THERE IS NO STATUTORY PROVISIO N UNDER THE INCOME-TAX REGIME REQUIRING THE ASSESSEE TO MAINTAI N THE DAILY STOCK REGISTER. HENCE, EVEN IF NO SUCH REGISTER WAS BEING MAINTAINED BY THE ASSESSEE, THAT, BY ITSELF, WOULD NOT LEAD TO THE INFERENCE THAT IT WAS NOT POSSIBLE TO DEDUCE THE TR UE INCOME OF THE ASSESSEE FROM THE ACCOUNTS MAINTAINED BY HER, N OR THE ACCOUNTS COULD BE SAID TO BE DEFECTIVE OR INCOMPLET E FOR THAT REASON ALONE. IF THE STOCK REGISTER IS NOT MAINTAIN ED BY THE ASSESSEE, THAT MAY PUT THE ASSESSING OFFICER ON GUA RD AGAINST THE FALSITY OF THE RETURN MADE BY THE ASSESSEE AND PERSUADE HIM TO CAREFULLY SCRUTINIZE THE ACCOUNT BOOKS OF THE AS SESSEE, BUT THE ABSENCE OF ONE REGISTER ALONE DOES NOT AMOUNT TO SU CH A MATERIAL LEADING TO THE CONCLUSION THAT THE ACCOUNT BOOKS WERE INCOMPLETE OR INACCURATE. SIMILARLY, IF THE RATE OF GROSS PROFIT DECLARED BY THE ASSESSEE IN A PARTICULAR PERIOD IS LOWER AS COMPARED TO THE GROSS PROFIT DECLARED BY HIM IN THE PRECEDING YEAR, THAT MAY ALERT THE ASSESSING OFFICER AND SERV E AS A WARNING TO HIM TO LOOK INTO THE ACCOUNTS MORE CAREF ULLY AND TO LOOK FOR SOME MATERIAL WHICH COULD LEAD TO THE CONC LUSION THAT THE ACCOUNTS MAINTAINED BY THE ASSESSEE WERE NOT CO RRECT, BUT A LOW RATE OF GROSS PROFIT, IN THE ABSENCE OF ANY MAT ERIAL POINTING TOWARDS FALSEHOOD OF THE ACCOUNT BOOKS, CANNOT, BY ITSELF, BE A GROUND TO REJECT THE ACCOUNT BOOKS UNDER SECTION 14 5(3). [PARA 10] 16. IN THE LIGHT OF ABOVE DISCUSSIONS, IF WE CONSID ER THE FACTS OF THE CASE UNDER CONSIDERATION, WE FIND THAT THE A.O. HAS FAILED TO POINT OUT ANY SPECIFIC DEFECT IN MAINTENANCE OF BOOKS OF ACCO UNT BASED ON WHICH SECTION 145(3) CAN BE INVOKED. THE A.O. HIMS ELF ACCEPTED THIS ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 101 FACT AND INSTEAD OF REJECTING THE BOOKS OF ACCOUNT AND MAKING ESTIMATION OF INCOME UNDER SECTION 144 OF THE ACT, THE A.O. HE ACCEPTED THE BOOKS OF ACCOUNT AND ONLY DISALLOWANCE S WERE MADE OUT OF VARIOUS EXPENSES. THE CIT (A) AFTER GONE THROUG H THE FACTS OF THE CASE, SUBMISSIONS OF THE ASSESSEE, REASONS GIVEN BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER, REMAND REPORT UND ER SECTION 250(4) AND SUBMISSIONS OF THE ASSESSEE FOUND THAT THE ASSE SSING OFFICER HAS MENTIONED IN HIS ORDER THAT THE ASSESSEE HAS PRODUC ED BOOKS OF ACCOUNT, CASH BOOK, LEDGER, JOURNAL AND BANK BOOK A LSO BUT NOT PRODUCED BILLS AND VOUCHERS. THE CIT (A) HELD THAT WITHOUT POINTING OUT ANY SPECIFIC DEFECTS IN MAINTENANCE OF BOOKS OF ACCOUNT WHICH HAVE BEEN GATHERED BY THE ASSESSING OFFICER DURING THE COURSE OF INVESTIGATION OF THE CASE, SECTION 145(3) CANNOT BE INVOKED. NO DISALLOWANCE CAN BE MADE MERELY ON MAKING VAGUE OBS ERVATION THAT EXPENSES WERE NOT VERIFIABLE. THE CIT(A) FOLLOWED AN ORDER OF I.T.A.T., LUCKNOW BENCH IN THE CASE OF M/S CHANDRA CONFECTIONARY PVT. LTD. REPORTED IN 2003 (2) MTC 1022, WHEREIN IT HAS BEEN HELD BY THE I.T.A.T. BENCH, LUCKNOW THAT SUCH AD-HOC DISALL OWANCES, WITHOUT ASSIGNING ANY REASONS AND WITHOUT POINTING OUT ANY DEFECT IN BOOKS OF ACCOUNT, ARE UNJUSTIFIABLE. FROM ABOVE DISCUSSIONS, WE FIND THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, SECT ION 145(3) IS NOT APPLICABLE. THE A.O. HAS WRONGLY INVOKED SECTION 1 45(3) OF THE ACT . 17. AS REGARDS SECOND ASPECT OF THE MATTER THAT IS MERIT OF THE CASE, WE FIND THAT THE A.O. HAS MADE AD-HOC DISALLOWANCE OUT OF VARIOUS EXPENSES. WEATHER UNDER THE FACTS AND CIRCUMSTANCES , THE ACTION OF THE A.O. IS JUSTIFIED IN DISALLOWANCE OF VARIOUS EX PENSES. BUSINESS EXPENDITURES INCURRED FOR THE PURPOSE OF BUSINESS A RE ALLOWABLE UNDER SECTION 37 OF THE ACT. THE SAID SECTION 37 READS AS UNDER:- GENERAL. 37. (1) ANY EXPENDITURE (NOT BEING EXPENDITURE OF T HE NATURE DESCRIBED IN SECTIONS 30 TO 36 [***] AND NOT BEING IN THE NATURE OF CAPITAL EXPENDITURE OR PERSONAL EXPENSES OF THE ASSESSEE), LAID OUT OR EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF THE BUSINESS OR PROFESSION SHALL BE ALLOWED IN COMP UTING THE INCOME CHARGEABLE UNDER THE HEAD 'PROFITS AND GAINS OF BUSINESS OR PROFESSION'. [EXPLANATION.FOR THE REMOVAL OF DOUBTS, IT IS HER EBY DECLARED THAT ANY EXPENDITURE INCURRED BY AN ASSESS EE FOR ANY ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 102 PURPOSE WHICH IS AN OFFENCE OR WHICH IS PROHIBITED BY LAW SHALL NOT BE DEEMED TO HAVE BEEN INCURRED FOR THE PURPOSE OF BUSINESS OR PROFESSION AND NO DEDUCTION OR ALLOWANC E SHALL BE MADE IN RESPECT OF SUCH EXPENDITURE.] (2) [* * *] (2B) NOTWITHSTANDING ANYTHING CONTAINED IN SUB-SECTION (1), NO ALLOWANCE SHALL BE MADE IN RESPECT OF EXPENDITURE I NCURRED BY AN ASSESSEE ON ADVERTISEMENT IN ANY SOUVENIR, BROCH URE, TRACT, PAMPHLET OR THE LIKE PUBLISHED BY A POLITICAL PARTY .] 18. TO APPRECIATE THE SCHEME OF THE ACT IN RESPECT OF ALLOWABLY OF EXPENDITURES, WE WOULD LIKE TO REFER CERTAIN JUDGME NTS WHEREIN CERTAIN PRINCIPLES HAVE BEEN DECIDED IN THIS REGARD . THESE JUDGMENTS ARE AS UNDER-: CIT VS. TRANSPORT CORPORATION OF INDIA LIMITED, 256 ITR 701 (AP) -- (PAGE 705, 706 AND 707 )'37. GENERAL.--(1) ANY EXPENDITURE (NOT BEING EXPENDITURE OF THE NATURE DESCRIBED IN S ECTIONS 30 TO 36 AND NOT BEING IN THE NATURE OF CAPITAL EXPENDITU RE OR PERSONAL EXPENSES OF THE ASSESSEE), LAID OUT OR EXP ENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF THE BUSINESS OR PROFESSION SHALL BE ALLOWED IN COMPUTING THE INCOME CHARGEABLE UNDER THE HEAD 'PROFITS AND GAINS OF BUSINESS OR PROFESSION'. EXPLANATION.--FOR THE REMOVAL OF DOUBTS, IT IS HERE BY DECLARED THAT ANY EXPENDITURE INCURRED BY AN ASSESSEE FOR AN Y PURPOSE WHICH IS AN OFFENCE OR WHICH IS PROHIBITED BY LAW S HALL NOT BE DEEMED TO HAVE BEEN INCURRED FOR THE PURPOSE OF BUS INESS OR PROFESSION AND NO DEDUCTION OR ALLOWANCE SHALL BE M ADE IN RESPECT OF SUCH EXPENDITURE.' IN ORDER TO CLAIM DEDUCTION OF EXPENDITURE UNDER SE CTION 37(1) OF THE ACT, AT THE RELEVANT POINT OF TIME AND IN TH E LIGHT OF THE JUDGMENTS IN INDIAN MOLASSES CO. P. LTD. V. CIT [19 59] 37 ITR 66 (SC); CIT V. INDIAN MOLASSES CO. (P) LTD. [1970] 78 ITR 474 (SC); SASSOON J. DAVID AND CO. P. LTD. V. CIT [1979 ] 118 ITR 261 (SC); MADHAV PRASAD JATIA V. CIT [1979] 118 ITR 200 (SC); CIT V. BALLARPUR INDUSTRIES LTD. [1976] 119 ITR 817 (BOM); CIT V. NAVSARI COTTON AND SILK MILLS LTD. [1982] 135 ITR 546 (GUJ) ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 103 AND CHENAB FOREST CO. V. CIT [1974] 96 ITR 568 (J&K),THE FOLLOWING CONDITIONS SHOULD BE SATISFIED I)THE EXPENDITURE IN QUESTION SHOULD NOT BE OF THE NATURE DESCRIBED UNDE R THE SPECIFIC PROVISIONS OF SECTIONS 30 TO 36 AND 80VV ( SECTION 80VV WAS OMITTED WITH EFFECT FROM APRIL 1, 1986);(II)THE EXPENDITURE SHOULD NOT BE OF THE NATURE OF CAPITAL EXPENDITURE ;(III)IT SHOULD NOT BE A PERSONAL EXPENDITURE; AND (IV)THE EXPENDIT URE SHOULD HAVE BEEN LAID OUT OR EXPENDED WHOLLY AND EXCLUSIVE LY FOR THE PURPOSES OF THE BUSINESS OR PROFESSION.IT IS THUS C LEAR THAT CONDITIONS AT (I), (II) AND (III) ABOVE ARE NEGATIV E CONDITIONS WHEREAS THE CONDITION AT (IV) ABOVE IS A POSITIVE C ONDITION. IF THE EXPENDITURE SATISFIES THE NEGATIVE CONDITIONS, IT HAS TO SATISFY THE POSITIVE CONDITION IN ORDER TO BE ELIGI BLE FOR DEDUCTION UNDER SECTION 37(1) OF THE ACT. THUS, SEC TION 37(1) ALLOWS DEDUCTION OF ANY 'EXPENDITURE' SUBJECT TO CO NDITIONS NOTICED ABOVE. IN INDIAN MOLASSES CO.'S CASE [1959] 37 ITR 66 , THE SUPREME COURT POINTED OUT THAT THE WORD 'EXPEND ITURE' IS EQUAL TO 'EXPENSE' AND 'EXPENSE' IS MONEY LAID OUT BY CALCULATION AND INTENTION. BUT THE IDEA OF 'SPENDIN G' IN THE SENSE OF 'PAYING OUT OR AWAY' MONEY IS THE PRIMARY MEANING AND IT IS WITH THIS MEANING THAT ONE IS CONCERNED. 'EXPENDITURE' IS THUS WHAT IS 'PAID OUT OR AWAY' AND IS SOMETHING WHICH IS GONE IRRETRIEVABLY. THE APEX COURT IN CIT V. NAINIT AL BANK LTD. [1966] 62 ITR 638 HELD THAT IN ITS NORMAL MEANING, THE EXPRESSION 'EXPENDITURE' DENOTES 'SPENDING' OR 'PAY ING OUT OR AWAY', I.E., SOMETHING THAT GOES OUT OF THE COFFERS OF THE ASSESSEE. A MERE LIABILITY TO SATISFY AN OBLIGATION BY AN ASSESSEE IS UNDOUBTEDLY NOT 'EXPENDITURE'; IT IS ONLY WHEN H E SATISFIES THE OBLIGATION BY DELIVERY OF CASH OR PROPERTY OR B Y THE SETTLEMENT OF ACCOUNTS, THAT THERE IS EXPENDITURE. THE BURDEN OF PROVING THAT A PARTICULAR EXPENDITURE HAS BEEN LAID OUT OR EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF BUSINESS SO THAT THE ASSESSEE MAY BE ENTITLED TO CL AIM DEDUCTION IS ON THE ASSESSEE. THIS POSITION IS WELL SETTLED B Y THE JUDGMENTS OF THE APEX COURT IN CIT V. CALCUTTA AGENCY LTD. [1 951] 19 ITR 191 AND CIT V. IMPERIAL CHEMICAL INDUSTRIES (INDIA) (P .) LTD. [1969] 74 ITR 17 . THE MERE OBJECT OF INCURRING EXPENDITURE IS NOT DECISIVE WHETHER IT IS OF A CAPITAL NATURE OR R EVENUE NATURE. THEREFORE, THE ONUS IS ON THE ASSESSEE TO PROVE, IN TER ALIA, THAT THE ITEM OF EXPENDITURE IN QUESTION FOR ADMISSIBILI TY TO ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 104 DEDUCTION IS NOT IN THE NATURE OF CAPITAL EXPENDITU RE. FURTHER, MERE PAYMENT BY ITSELF WOULD NOT ENTITLE THE ASSESS EE TO DEDUCTION OF THE SAID EXPENDITURE UNLESS THE SAME W AS PROVED TO BE PAID FOR COMMERCIAL CONSIDERATIONS. THE ONUS OF PROOF IS ALWAYS UPON THE ASSESSEE. IT CANNOT BE SAID THAT EV EN IF THE TAXPAYER DOES NOT PRODUCE ANY EVIDENCE IN SUPPORT O F THE CLAIM FOR DEDUCTION, THE ASSESSING OFFICER HIMSELF INDEPE NDENTLY IS TO COLLECT EVIDENCE AND DECIDE THAT THE DEDUCTION CLAI MED IS BASELESS HAVING REGARD TO THE LEGITIMATE BUSINESS N EEDS OF THE ASSESSEE, AS THE TRIBUNAL SEEMS TO THINK IN THE PRE SENT CASE. IT IS FOR THE TAXPAYER TO ESTABLISH BY EVIDENCE THAT A PA RTICULAR ALLOWANCE IS JUSTIFIED. BUT, AS HELD BY THE SUPREME COURT IN CIT V. C. PARAKH AND CO. (INDIA) LTD. [1956] 29 ITR 661 WHETHER AN ASSESSEE IS ENTITLED TO A PARTICULAR DEDUCTION OR N OT WILL DEPEND ON THE PROVISION OF LAW RELATING THERETO, AND NOT O N THE VIEW WHICH HE MIGHT TAKE OF HIS RIGHTS. AT THE SAME TIME , THE ONUS IS ON THE ASSESSEE TO ESTABLISH THAT THERE ARE FACTS I N EXISTENCE WHICH ENTITLE IT TO A DEDUCTION AND IT IS FOR THE A SSESSEE TO ADDUCE NECESSARY EVIDENCE IN THIS REGARD. THEREFORE , IF THE ASSESSEE FAILS TO PLACE SUFFICIENT MATERIAL, HE IS NOT ENTITLED TO CLAIM THIS ALLOWANCE UNDER SECTION 37(1) OF THE ACT . IN CIT V. CHANDRAVILAS HOTEL [1987] 164 ITR 102 (GUJ), IT IS HELD THAT IF THE EXPENDITURE IS DOUBTED BY THE ASSESSING AUTHORI TY, IT IS THE DUTY OF THE ASSESSEE TO PROVE BY LEADING EVIDENCE T HAT THE EXPENDITURE WAS IN FACT, INCURRED. 19. NEWTONE STUDIOS LTD. VS. COMMISSIONER OF INCO ME-TAX [1955] 28 ITR 378 (MAD.). THE FACTS OF THE CASE ARE THAT THE ASSESSEE WAS A PRIVATE LIMITED COMPANY OWNING A STUDIO AND ENGAGED IN THE PRODUCTION OF MOTION PICTURES. THERE WERE SIX SHARE HOLDERS. THE MANAGING DIRECTOR AND THE THREE TECHNICIANS WERE RE MUNERATED BY PAYMENTS OF WHAT WERE CALLED HONORARIA, WHICH REALL Y MEANT SALARIES AND ALSO BY PAYMENTS OF COMMISSION ON A FIXED PERCE NTAGE BASIS. IN ADDITION, EACH OF THEM GOT A CAR ALLOWANCE, AND WHE N THE PROFITS JUSTIFIED IT PAYMENT OF A MONTH'S SALARY AS BONUS. IN 1944 AND 1945 WHAT WAS PAID AS HONORARIA, THAT WAS, SALARY, TO TH OSE FOUR AMOUNTED TO RS. 18,000 A YEAR. THEIR SCALES OF SALARIES WERE REVISED FOR 1946 BY A RESOLUTION PASSED BY THE SHAREHOLDERS ON 30-03-19 46, AND THE TOTAL CAME TO RS. 59,100 FOR 1946. THE GENUINENESS OF TH E PAYMENT OF THAT AMOUNT OF RS.59,100 WAS NEVER IN DISPUTE. THE ASSE SSEE CLAIMED THAT ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 105 PAYMENT AS A DEDUCTION UNDER SECTION 10(2)(XV) OF T HE 1922 ACT. THE ITO LIMITED THE ADMISSIBLE DEDUCTION TO AN AMOUNT N OT EXCEEDING TWICE THE AMOUNT ALLOWED IN EACH OF THE PRECEDING Y EARS AND DISALLOWED THE BALANCE. THE DISALLOWANCE WAS UPHEL D BY THE AAC AS WELL AS THE TRIBUNAL. THE HONBLE MADRAS HIGH COUR T WHILE DECIDING THE MATTER OBSERVED WHETHER ON THE FACTS AND IN TH E CIRCUMSTANCES OF THE CASE, THE DISALLOWANCE OF A SUM OF RS.23,100/- OUT OF THE EXPENSES INCURRED BY THE ASSESSEE FOR PAYMENT OF REMUNERATIO N TO THE MANAGING DIRECTOR AND THE OTHER TECHNICIAN DIRECTOR S IS PERMISSIBLE UNDER THE PROVISIONS OF SECTION 10(2)(XV) OF THE IN COME-TAX ACT. THE COURT REFERRED CERTAIN EARLIER JUDGMENTS WHICH ARE AS UNDER:- IN EASTERN INVESTMENTS LTD. V. COMMISSIONER OF INC OME- TAX, WEST BENGAL [1951] 20 ITR 1 , THE SUPREME COURT REFERRED TO SECTION 12(2) OF THE ACT, WHICH PROVIDES FOR THE DEDUCTION OF AN EXPENDITURE INCURRED 'SOLELY FOR THE PURPOSE OF MAKING OR EARNING SUCH INCOME, PROFITS OR GAINS' AND SUMMARIS ED THE PRINCIPLES TO BE KEPT IN VIEW : (1)THOUGH THE QUESTION MUST BE DECIDED ON THE FACTS OF EACH CASE, THE FINAL CONCLUSION IS ONE OF LAW. (2)IT IS NOT NECESSARY TO SHOW THAT THE EXPENDITUR E WAS A PROFITABLE ONE OR THAT IN FACT ANY PROFIT WAS EARNE D. (3)IT IS ENOUGH TO SHOW THAT THE MONEY WAS EXPENDED 'NOT OF NECESSITY AND WITH A VIEW TO DIRECT AND IMMEDIATE B ENEFIT TO THE TRADE, BUT VOLUNTARILY AND ON THE GROUND OF COMMERC IAL EXPEDIENCY, AND IN ORDER INDIRECTLY TO FACILITATE T HE CARRYING ON OF THE BUSINESS.' (4)BEYOND THAT, NO HARD AND FAST RULE CAN BE LAID D OWN TO EXPLAIN WHAT IS MEANT BY THE WORD 'SOLELY.' IN RAYALOO IYER AND SONS V. COMMISSIONER OF INCOME- TAX, MADRAS [1954] 26 ITR 265 , A BENCH OF THIS COURT HELD THAT THE PRINCIPLES LAID DOWN BY THE SUPREME COURT WITH REFE RENCE TO SECTION 12(2) OF THE ACT SHOULD ALSO BE APPLIED IN DECIDING UNDER SECTION 10(2)(XV) WHETHER THE EXPENDITURE WAS INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF THE BUSIN ESS OF THE ASSESSEE AND THE COURT POINTED OUT THAT THE TEST PR ESCRIBED BY ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 106 SECTION 10(2)(XV) OF THE ACT INCLUDED THAT OF COMME RCIAL EXPEDIENCY. AT PAGE 292 THE LEARNED JUDGES POINTED OUT: 'IN APPLYING THE TEST OF COMMERCIAL EXPEDIENCY TO D ETERMINE WHETHER THE EXPENDITURE IS WHOLLY AND EXCLUSIVELY L AID OUT FOR THE PURPOSE OF THE BUSINESS, THE REASONABLENESS OF THE EXPENDITURE SHOULD BE CONSIDERED FROM THE POINT OF VIEW OF THE BUSINESSMAN AND NOT FROM THE POINT OF VIEW OF OUTSI DERS INCLUDING THE INCOME-TAX OFFICER.' IT WAS THE SAME PRINCIPLE TO WHICH LORD WRIGHT REFE RRED IN CRADDOCK V. ZEVO FINANCE COMPANY LTD. [1946] 27 TC 267 AT 290: 'THE TRANSACTION HERE BEING A PERFECTLY STRAIGHTFOR WARD AND HONEST BARGAIN BETWEEN THE TWO COMPANIES, IT SEEMS TO ME THAT, IF THE PRESENT CLAIM WERE UPHELD, IT WOULD AMOUNT T O A PRECEDENT ENABLING THE REVENUE TO REVISE EVERY SUCH BARGAIN AND TO DEFEAT WHAT THE PARTIES HAD AGREED ON. THE R EVENUE IN A CASE UNDER SCHEDULE D HAS NO POWER TO EXAMINE WHAT THEY THINK WAS REASONABLE OR TO SAY WHAT EXPENDITURE WAS NECES SARY. 20. THE COURT HELD AS UNDER:- UNDER OUR TAXING SYSTEM, IT IS FOR THE ASSESSEE TO CONDUCT HIS BUSINESS, AND IN HIS WISDOM OR OTHERWIS E TO FIX THE REMUNERATION TO HIS STAFF. THE INCOME-TAX ACT DOES NOT CLOTHE THE TAXING AUTHORITY WITH ANY POWER OR JURISDICTION TO DETERMINE THE REASONABLENESS OF THE AMOUNT SO FIXED AND PAID BY THE ASSESSEE. THE ONLY TEST FOR THE DEDUCTIBILITY OF SU CH REMUNERATION IS WHETHER THE EXPENDITURE HAS BEEN IN CURRED SOLELY AND EXCLUSIVELY FOR THE PURPOSE OF THE BUSIN ESS. IF THE REALITY OF THE PAYMENT IS CHALLENGED OR IS IN DISPU TE DIFFERENT CONSIDERATIONS ARISE : SO ALSO IN CASES WHERE THE T AX AUTHORITIES ARE ABLE TO POINT TO SOME CONSIDERATION OTHER THAN THE PURPOSE OF THE BUSINESS AS ACCOUNTING FOR ANY PORTION OF TH E PAYMENT MADE. IN SUCH CASES, OF COURSE, SUCH PORTION OF THE AMOUNT CLAIMED, WHICH IS EITHER NOT HELD TO HAVE BEEN PAID OR IS HELD TO HAVE BEEN PAID FOR REASONS OTHER THAN BUSINESS EXPE DIENCY, COULD AND SHOULD BE DISALLOWED ; BUT THE REASON FOR THE ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 107 DISALLOWANCE IS BECAUSE EITHER THE PORTION DISALLOW ED IS NOT PAID, OR BECAUSE THE EXPENDITURE IS NOT SOLELY AND EXCLUSIVELY FOR THE BUSINESS, AND NOT ON THE GROUND THAT IN THE OPINION OF THE INCOME-TAX OFFICER OR OTHER TAXING AUTHORITY TH E REMUNERATION IS 'UNREASONABLY' HIGHEITHER BECAUSE THE EMPLOYEE DOES NOT, IN THE AUTHORITY'S OPINION, DESE RVE SO MUCH, OR BECAUSE THE ASSESSEE COULD HAVE SECURED OTHER EM PLOYEES ON MORE FAVOURABLE TERMS. THE ASSESSEE CERTAINLY SATISFIED THE THIRD OF THE T ESTS POSTULATED BY THEIR LORDSHIPS IN THE EASTERN INVEST MENT'S CASE (SUPRA), THAT THE MONEY WAS EXPENDED 'NOT OF NECESS ITY AND WITH A VIEW TO DIRECT AND IMMEDIATE BENEFIT TO THE TRADE BUT VOLUNTARILY AND ON THE GROUND OF COMMERCIAL EXPEDIE NCY, AND IN ORDER TO FACILITATE THE CARRYING ON OF THE BUSIN ESS.' EVEN NECESSITY FOR THE EXPENDITURE DOES NOT ENTER THIS T EST. THE QUESTION REFERRED TO US IS ANSWERED IN THE NEGA TIVE AND IN FAVOUR OF THE ASSESSEE 21. CIT VS. GOTANLIME KHANIJ UDYOG, 256 ITR 243 (RA J), WHEREIN THE COURT HELD THAT PROVISIONS DO NOT ENVISAGE THAT BY RESORTING TO BEST JUDGMENT ASSESSMENT, THE ASSESSING AUTHORITY M UST REACH A DIFFERENT FIGURE OF INCOME AND PROFIT THAN WHAT HAS BEEN DISCLOSED BY THE ASSESSEE. BEST JUDGMENT IS ALSO TO BE BASED ON THE MATERIAL AVAILABLE ON RECORD. THEREFORE, NOTWITHSTANDING TH E REJECTION OF THE BOOKS OF ACCOUNT, THE MATERIAL DISCLOSED BY THE ASS ESSEE ALONG WITH OTHER MATERIAL THAT MAY BE COLLECTED BY THE INCOME- TAX OFFICER FORMS THE BASIS OF COMPUTATION OF INCOME. ON THAT BASIS WHAT CONCLUSIONS ARE TO BE REACHED IS INDEPENDENT OF THE RESULTS SHO WN IN THE BOOKS OF ACCOUNT, IF ANY MAINTAINED BY THE ASSESSEE. SECTIO N 145 ONLY PROVIDES THE BASIS ON WHICH COMPUTATION OF INCOME IS TO BE M ADE FOR THE PURPOSE OF DETERMINING THE AMOUNT OF TAX PAYABLE BY AN ASSESSEE. THE PROVISION BY ITSELF DOES NOT DEAL WITH ADDITION OR DELETION IN THE INCOME. THEREFORE, MERELY BECAUSE THERE IS SOME MI NOR DEFICIENCY IN THE BOOKS OF ACCOUNT OR MERELY BECAUSE OF REJECTION OF THE BOOKS OF ACCOUNT IT DOES NOT MEAN THAT IT MUST LEAD NECESSAR ILY TO ADDITIONS IN THE RETURNED INCOME OF THE ASSESSEE. IN THE LIGHT O F THESE FACTS AND CIRCUMSTANCES WE DID NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A). THE ORDER OF THE CIT(A) IS CONFIRMED ON THE ISSUE. ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 108 22. THE HONBLE MADRAS HIGH COURT IN THE CASE OF NE WTONE STUDIOS LTD. VS. COMMISSIONER OF INCOME-TAX [1955] 28 ITR 378 (MAD.) HELD THAT UNDER OUR TAXING SYSTEM, IT IS FOR THE ASSESSEE TO CONDUCT HIS BUSINESS, AND IN HIS WISDOM OR OTHERWIS E TO INCUR BUSINESS EXPENDITURES. THE INCOME-TAX ACT DOES NOT CLOTHE T HE TAXING AUTHORITY WITH ANY POWER OR JURISDICTION TO DETERMINE THE REA SONABLENESS OF THE AMOUNT SO FIXED AND PAID BY THE ASSESSEE. THE ONLY TEST FOR THE DEDUCTIBILITY OF SUCH REMUNERATION IS WHETHER THE E XPENDITURE HAS BEEN INCURRED SOLELY AND EXCLUSIVELY FOR THE PURPOS E OF THE BUSINESS. IF THE REALITY OF THE PAYMENT IS CHALLENGED OR IS IN D ISPUTE DIFFERENT CONSIDERATIONS ARISE: SO ALSO IN CASES WHERE THE TA X AUTHORITIES ARE ABLE TO POINT TO SOME CONSIDERATION OTHER THAN THE PURPOSE OF THE BUSINESS AS ACCOUNTING FOR ANY PORTION OF THE PAYME NT MADE. IN SUCH CASES, OF COURSE, SUCH PORTION OF THE AMOUNT CLAIME D, WHICH IS EITHER NOT HELD TO HAVE BEEN PAID OR IS HELD TO HAVE BEEN PAID FOR REASONS OTHER THAN BUSINESS EXPEDIENCY, COULD AND SHOULD BE DISALLOWED ; BUT THE REASON FOR THE DISALLOWANCE IS BECAUSE EITHER T HE PORTION DISALLOWED IS NOT PAID, OR BECAUSE THE EXPENDITURE IS NOT SOLELY AND EXCLUSIVELY FOR THE BUSINESS, AND NOT ON THE GROUND THAT IN THE OPINION OF THE INCOME-TAX OFFICER OR OTHER TAXING AUTHORITY THE REMUNERATION IS UNREASONABLY HIGH. IN THE CASE UNDER CONSIDER ATION, THE ASSESSEE HAS ESTABLISHED BY FILING EVIDENCES THAT EXPENDITUR ES WERE INCURRED FOR THE PURPOSE OF BUSINESS. 166. FOLLOWING THE ABOVE DISCUSSIONS, IF WE CONSIDE R THE FACTS OF THE CASE UNDER CONSIDERATION, WE NOTICED THAT THE CASE OF THE A.O. IS THAT EXPENDITURES CLAIMED BY THE ASSESSEE ARE NOT VERIFIABLE; THEREFORE 20% OF E XPENDITURES ARE DISALLOWABLE. AFTER ADDING AMOUNT OF DISALLOWANCE, THE A.O. CALCU LATED PROFIT RATE WHICH COMES TO 13.09%. IN A.Y. 2006-07 IT WAS 27.20%. THE A.O . ALSO CALCULATED THE TOTAL RECEIPTS FOR 12 MONTHS ON THE BASIS OF 4 MONTHS. T HE A.O. ESTIMATED GROSS RECEIPTS AT RS.95,00,000/-. HE APPLIED 13.09% PROFIT RATE. ACCORDINGLY, THE A.O. ESTIMATED TOTAL INCOME AT RS.12,43,550/- AGAINST THE INCOME O F RS.3,26,150/- DECLARED BY THE ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 109 ASSESSEE. THE CIT(A) FOUND THAT ADDITION MADE BY T HE A.O. WAS ON THE BASIS OF SUSPICION. THE CIT(A) NOTED THAT BOOKS OF ACCOUNT AND EXPLANATION FURNISHED BY THE ASSESSEE WERE NOT CONSIDERED BY THE A.O. THE C IT(A) FOUND THAT THE A.O. HAD NO MATERIAL EVIDENCE OR GROUND TO REJECT THE BOOK R ESULT UNDER SECTION 145(3) OF THE ACT. THE ENTRIES RECORDED IN VARIOUS PAGES OF ANNE XURE LP-10 HAVE BEEN EXPLAINED BY THE ASSESSEE. ON CONSIDERATION OF ORD ERS OF A.O. AND CIT (A) AND RECORDS AVAILABLE ON RECORD, WE FIND THAT THE A.O. ESTIMATED PROFIT ON MATHEMATICAL FORMULA. MATHEMATICAL FORMULA DOES NOT GIVE ANY PR OFIT. THE A.O. FIRST ESTIMATED DISALLOWED EXPENDITURE, THEN CALCULATED PROFIT RATE . THE METHOD ADOPTED BY THE A.O. IN THE CASE UNDER CONSIDERATION IS NOT A REASO NABLE AND FAIR METHOD OF ESTIMATION OF PROFIT. ON THE BASIS OF THE SAID MET HOD WHICH HAS BEEN ADOPTED BY THE A.O. THE ABSURD RESULT CAME IS CLEARLY ESTABLIS HED FROM THE RESULT OF BOTH YEARS. IN A.Y. 2005-06 RATE OF PROFIT APPLIED WAS 13.0% AN D IN A.Y. 2006-07 IT WAS 27.20%, WHICH IS NEITHER SAID TO BE A REASONABLE ON E NOR OR A FAIR ONE. AS REGARDS SEIZED PAPERS LP-3 & LP-10, WE NOTICED THAT PATIENT S REGISTERS, OPD REGISTER, BILL BOOKS, ADMISSION REGISTER (WARD/ROOM-WISE) AND SEVERAL OTHER RECORDS PERTAINING TO HOSPITAL RECEIPTS MAINTAINED IN PRESC RIBED FORM ON DAY-TO-DAY BASIS WERE FOUND AND SEIZED IN COURSE OF SEARCH AND THE E NTRIES THEREIN ARE ENTIRELY AMENABLE TO THE ENTRIES RECORDED IN REGULAR BOOKS O F ACCOUNT. THIS GOES TO CLEARLY PROVE THAT THE GROSS RECEIPTS AS SHOWN IN THE BOOKS OF ACCOUNT ARE COMPLETE AND TRUE AND THERE IS NO SUPPRESSION OF ANY GROSS RECEI PT OF NURSING HOME. SIMILARLY, ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 110 THE METHOD OF ACCOUNTING AS WELL AS THE ACCOUNTING STANDARD REGULARLY EMPLOYED HAS BEEN FOLLOWED DURING THE RELEVANT YEAR ALSO. A S REGARDS THE ENTRIES RECORDED IN CERTAIN LOOSE-PAPERS MARKED AS DIFFERENT PAGES OF A NNEXURE LP-3 AND LP-10, IT HAS BEEN CLARIFIED VIDE EXPLANATION DATED 27.12.2007 AL ONG WITH APPENDIX-P(1) TO P(6) FOR LP-10 AND P(7) TO P-(12) FOR LP-3 THAT THE SE DOCUMENTS ARE ONLY JOINT MANAGEMENT DETAILS OF THE GROUP WHEREIN THE CASH RE CEIVED FROM ALL THE CONCERNS AND ITS UTILIZATION HAS BEEN NOTED BY THE PERSON TH ROUGH WHOM THE AMOUNT HAS BEEN SPENT FOR THE DIVERSIFIED PURPOSES FOR ENTIRE GROUP AS NOTED AT THE 2 ND PAGE OF THESE DETAILS. IT DOES NOT EXCLUSIVELY PERTAINS TO THE A SSESSEE FIRM OR THE COMPANY WHICH IS EVIDENT FORM THE FACT THAT THE UTILIZATION OF FU NDS PERTAIN TO VARIOUS INDIVIDUALS AND CONCERNS OF ENTIRE GROUP AS A WHOLE SUCH AS DEP OSITING IN DIFFERENT ACCOUNTS OF DR. S. P. YADAV AND DR. NEETU SINGH YADAV ETC., THE INVESTMENTS IN VARIOUS ASSETS PERTAINING TO DIFFERENT MEMBERS AND CONCERNS, THE E XPENSES PERTAINING TO ALL SUCH PERSONS OF GROUP AND SIMILAR OTHER UTILIZATION UNDE R VARIOUS HEADS. THE RECONCILIATION FURNISHED IN APPENDIX-P(1) TO P(12) ALONG WITH EXPLANATION DATED 27.12.2007 FULLY EXPLAINS THIS FACTS. THERE BEING NO MATERIAL WHATSOEVER TO DISPROVE THE GROSS RECEIPTS AS FOUND RECORDED IN SE IZED RECORDS, WHICH COMPLETELY TALLIES WITH BOOKS OF ACCOUNT, THERE WAS NO REASON WHATSOEVER TO ESTIMATE THE TURNOVER IN THIS REGARD TO THE SAME RECORDED IN BOO KS OF ACCOUNT AND APPLY THE NET PROFIT RATE BY SELF SERVING DISALLOWANCES IS AD-HOC MANNER. THE ASSESSEE HAS ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 111 DISCHARGED THE BURDEN REGARDING THE CLAIM OF THE EX PENDITURE BY FILING VARIOUS DETAILS OF EXPENDITURE, BOOKS OF ACCOUNTS AND OTHER DOCUMENTS AND EVIDENCES. 167. THE REVENUE DID NOT DISPUTE REGARDING FACTS NO TED BY THE CIT(A). FURTHER THE REVENUE HAS FAILED TO POINT OUT ANY CONTRARY MA TERIAL TO THE FINDING OF THE CIT(A). ALSO, THE REVENUE DID NOT POINT OUT ANY MA TERIAL/EVIDENCE BASED ON WHICH ADDITION CAN BE SUSTAINED. IN THE LIGHT OF A BOVE DISCUSSION, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) ON THE ISSUE. ORDER OF THE CIT(A) IS CONFIRMED ON THE ISSUE. 168. AS REGARDS OBJECTION OF THE REVENUE IN FOLLOWI NG ORIGINAL ORDER OF THE CIT(A) DATED 30.03.2010, WE DO NOT FIND ANY INFIRMI TY BECAUSE THERE WERE NO NEW FACTS WHICH HAVE BEEN POINTED OUT EITHER BY THE A.O . OR BY THE ASSESSEE. THIS ISSUE HAS ALREADY BEEN DISCUSSED IN PARAGRAPH NOS.10 & 11 OF THIS ORDER. THEREFORE, UNDER THE FACTS AND CIRCUMSTANCES, THERE IS NO INFI RMITY IN FOLLOWING THE ORDER OF THE CIT(A). WE, THEREFORE, REJECT THIS CONTENTION OF THE REVENUE. 169. IN THE RESULT, APPEALS OF REVENUE ITA NOS.82 & 83/A/2011 FOR ASSESSMENT YEARS 2005-06 & 2006-07 IN THE CASE OF M/S. SHIVAM SURGICAL NURSING HOME ARE DISMISSED. ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 112 170. THE MATTER UNDER CONSIDERATION CAN BE EXAMINED FROM A DIFFERENT ANGLE. THE ISSUES OF THE CASES UNDER CONSIDERATION ARE IN RESP ECT OF SEARCH ASSESSMENT. SECTION 153A OF THE ACT PROVIDES THE PROCEDURE FOR COMPLETION OF ASSESSMENT WHERE A SEARCH IS INITIATED UNDER SECTION 132 OR BO OKS OF ACCOUNT, OTHER DOCUMENTS OR ANY ASSETS ARE REQUISITIONED UNDER SECTION 132A AFTER 31.05.2003. IN SUCH CASES, THE A.O. SHALL ISSUE NOTICE TO SUCH PERSON REQUIRIN G HIM TO FURNISH WITHIN SUCH PERIOD, AS MAY BE SPECIFIED IN THE NOTICE, RETURN O F INCOME IN RESPECT OF EACH ASSESSMENT YEAR IMMEDIATELY PRECEDING ASSESSMENT YE AR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE SEARCH WAS CONDUCTED UNDER SECTIO N 132 OF THE ACT FOR REQUISITIONING WAS MADE UNDER SECTION 132A OF THE A CT. THE SAME AS OTHERWISE PROVIDED IN THE PROPOSED SECTION 153A, SECTION 153B AND SECTION 153C, ALL OTHER PROVISIONS OF THE ACT SHALL APPLY TILL THE ASSESSME NT OR REASSESSMENT MADE UNDER SECTION 153A OF THE ACT. THE SCOPE OF THIS SECTION HAS BEEN EXAMINED BY THE I.T.A.T., SPECIAL BENCH, MUMBAI IN THE CASE OF ALL CARGO GLOBAL LOGISTIC LIMITED VS. DY. CIT, 137 ITD 287 (MUMBAI SB) WHEREIN THE I. T.A.T. MUMBAI SPECIAL BENCH HAS HELD AS UNDER :- THE QUESTION NOW IS - WHAT IS THE SCOPE OF ASSESSM ENT OR REASSESSMENT OF TOTAL INCOME UNDER SECTION 153A (1) (B) AND THE FIRST PROVISO? FOR ANSWERING THIS QUESTION, GUIDANCE WILL HAVE TO BE SOUGHT FROM SECTION 132(1). IF ANY BOOKS OF ACCOUNT OR OTH ER DOCUMENTS RELEVANT TO THE ASSESSMENT HAD NOT BEEN PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT AND FOUND IN THE COURSE OF SEAR CH, SUCH BOOKS OF ACCOUNT OR OTHER DOCUMENTS HAVE TO BE TAKEN INTO AC COUNT WHILE MAKING ASSESSMENT OR REASSESSMENT OF TOTAL INCOME U NDER THE AFORESAID PROVISION. SIMILAR POSITION WILL OBTAIN I N A CASE WHERE ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 113 UNDISCLOSED INCOME OR UNDISCLOSED PROPERTY HAS BEEN FOUND AS A CONSEQUENCE OF SEARCH. IN OTHER WORDS, HARMONIOUS I NTERPRETATION WILL PRODUCE THE FOLLOWING RESULTS :- (A) IN SO FAR AS P ENDING ASSESSMENTS ARE CONCERNED, THE JURISDICTION TO MAKE ORIGINAL AS SESSMENT AND ASSESSMENT UNDER SECTION 153A MERGE INTO ONE AND ON LY ONE ASSESSMENT FOR EACH ASSESSMENT YEAR SHALL BE MADE S EPARATELY ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER M ATERIAL EXISTING OR BROUGHT ON THE RECORD OF THE ASSESSING OFFICER, (B ) IN RESPECT OF NON- ABATED ASSESSMENTS, THE ASSESSMENT WILL BE MADE ON THE BASIS OF BOOKS OF ACCOUNT OR OTHER DOCUMENTS NOT PRODUCED IN THE C OURSE OF ORIGINAL ASSESSMENT BUT FOUND IN THE COURSE OF SEARCH, AND U NDISCLOSED INCOME OR UNDISCLOSED PROPERTY DISCOVERED IN THE COURSE OF SEARCH. [PARA 53] THE INTERPRETATION PLACED BY THE TRIBUNAL TAKES INT O ACCOUNT THE PRINCIPLES OF LITERAL INTERPRETATION AND READING TH E RELEVANT PROVISIONS TOGETHER. THIS INTERPRETATION DOES NOT IN ANY MANNE R GIVE RESULTS WHICH CAN BE SAID TO BE ULTRA VIRES. IT ALSO DOES NOT GIVE ANY ABSURD OR UNJUST RESULTS. [PARA 56] THUS, QUESTION RAISED BEFORE THE SPECIAL BENCH NO.1 IS ANSWERED AS UNDER: (A) IN ASSESSMENT THAT ARE ABATED, THE ASSESSING OF FICER RETAINS THE ORIGINAL JURISDICTION AS WELL AS JURISDICTION CONFE RRED ON HIM UNDER SECTION 153A FOR WHICH ASSESSMENTS SHALL BE MADE FO R EACH OF THE SIX ASSESSMENT YEARS SEPARATELY; (B) IN OTHER CASES, IN ADDITION TO THE INCOME THAT HAS ALREADY BEEN ASSESSED, THE ASSESSMENT UNDER SECTION 153A WILL BE MADE ON THE BASIS OF INCRIMINATING MATERIAL, WHICH IN THE CONTEXT OF RELEVANT PROVISIONS MEANS - BOOKS OF ACCOUNT, OTHER DOCUMENTS, FOUND IN THE COURSE OF SEARCH BUT NOT PRODUCED IN THE COURSE OF ORIGINAL A SSESSMENT, AND UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE CO URSE OF SEARCH. [PARA 58] THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT , CENTRAL KANPUR VS. SMT. SHAILA AGARWAL, 246 CTR 266 (ALL) HAS EXAMINED THE WORDS ABATE AND PENDING. THE COURT HELD AS UNDER:- ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 114 12. A PLAIN READING OF SECTION 153A WOULD SHOW THA T WHERE NOTICE UNDER THIS SECTION IS ISSUED AS RESULT OF ANY SEARC H UNDER SECTION 132, ASSESSMENT OR REASSESSMENT IF ANY RELATING TO ANY A SSESSMENT YEAR FALLING WITHIN THE PERIOD OF SIX ASSESSMENT YEARS R EFERRED TO UNDER SECTION 153, PENDING ON THE DATE OF INITIATION OF S EARCH UNDER SECTION 132 OR REQUISITION UNDER SECTION 132A SHALL ABATE. THE WORDS, PENDING ON THE DATE OF INITIATION OF SEARCH UNDER S ECTION 132, OR MAKING OF REQUISITION UNDER SECTION 132A, AS THE CA SE MAY BE, HAS TO BE ASSIGNED SIMPLE AND PLAIN MEANING. WHERE THE ASS ESSMENT OR RE- ASSESSMENT IS FINALISED, THERE ARE NO PENDING PROCE EDINGS TO BE ABATED, AND RESTORED TO THE FILE OF THE ASSESSING O FFICER. TO ABATE MEANS TO DIMINISH OR TO TAKE AWAY. THE WORD 'ABATEM ENT' HAS BEEN DEFINED IN THE CONCISE LAW DICTIONARY (P. RAMANATHA AIYER) AS FOLLOWS:- 'ABATEMENT. 'ABATEMENT' MEANS, IN RESPECT OF ANY CH ARGEABLE ACCOUNTING PERIOD, ENDING ON OR BEFORE THE 31ST DAY OF MARCH, 1947 A SUM WHICH BEARS TO A SUM EQUAL TO- (A) IN THE CASE OF A COMPANY, NOT BEING A COMPANY D EEMED FOR THE PURPOSES OF SECTION 9 TO BE A FIRM, SIX PER CEN T OF THE CAPITAL OF THE COMPANY ON THE FIRST DAY OF THE SAID PERIOD COMPUTED IN ACCORDANCE WITH SCHEDULE II, OR ONE LAKH OF RUPEES, WHICHEVER IS GREATER, OR (B) IN THE CASE OF A FIRM HAVING- (I) NOR MORE THAN TWO WORKING PARTNERS, ONE LAKH OF RUPEES, OR (II) THREE WORKING PARTNERS, ONE AND A HALF OF RUPE ES, OR (III) FOUR OR MORE WORKING PARTNERS, TWO LAKH OF RU PEES, OR (C) IN THE CASE OF A HINDU UNDIVIDED FAMILY, TWO LA KHS OF RUPEES, OR (D) IN ANY OTHER CASE, ONE LAKH OF RUPEES,- THE SAME PROPORTION AS THE SAID PERIOD BEARS TO THE PERIOD OF ONE YEAR AND, IN RESPECT OF ANY CHARGEABLE ACCOUNTI NG PERIOD BEGINNING AFTER THE 31ST DAY OF MARCH, 1947, SUCH S UM AS MAY BE ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 115 FIXED BY THE ANNUAL FINANCE ACT. [BUSINESS PROFITS TAX ACT (21 OF 1947), S.2 (1)] REMOVAL OR DESTRUCTION, (AS) OF A NUISANCE; FAILURE ; PREMATURE END, SUSPENSION OR DIMINUTION, (AS) OF AN ACTION OR OF A LEGACY. THE ACTION OF ABATING; BEING ABATED. {O.XXII, R.1, CPC (5 OF 1908)]; DECREASE [S.12 (3) (B) (I), SPECIFIC RELIEF ACT (47 OF 1963)]. OF AN ACTION OR SUIT: IN CIVIL LAW AN ABATEMENT OF A SUIT IS A COMPLETE TERMINATION OF IT. ABATEMENT OF A MATTER O R CAUSE IS CAUSED BY THE SAME BECOMING DEFECTIVE ON ACCOUNT OF THE DE ATH OF THE PARTIES MATERIALLY INTERESTED. (ENCY. OF THE LAWS OF ENGLAN D) A SUSPENSION OR TERMINATION OF PROCEEDINGS FOR WANT OF PROPER PARTIES OR DUE TO SOME TECHNICAL DEFECT. THE ABATEMENT OF THE MAIN ACTION ABATES PROCEEDINGS ANCILLARY OR COLLATERAL TO IT. IN CRIMINAL LAW: ABATEMENT OF PROCEEDINGS CONNOTES THEIR TERMINATION WITHOUT ANY DECISION ON MERITS AND WITH OUT THE ASSENT OF THE PROSECUTOR. (ENCY. OF THE LAWS OF ENGLAND) IN REVENUE LAW: ABATEMENT IS A DEDUCTION FROM OR RE FUNDING OF DUTIES ON GOODS DAMAGED DURING IMPORTATION OR IN ST ORE.' 13. THE WORD 'ABATEMENT' IS REFERABLE TO SOMETHING , WHICH IS PENDING ALIVE, OR IS SUBJECT TO DEDUCTION. THE ABAT EMENT REFERS TO SUSPENSION OR TERMINATION OF THE PROCEEDINGS EITHER OF THE MAIN ACTION, OR THE PROCEEDINGS ANCILLARY OR COLLATERAL TO IT. THE WORD IS COMMONLY USED IN THE LEGISLATIONS, WHICH PROVIDE FO R ABATEMENT OF ACTION/ SUIT; ABATEMENT OF LEGACIES; ABATEMENT OF N UISANCE; AND ALL ACTIONS FOR SUCH NATURE, WHICH HAVE THE PENDENCY OR CONTINUANCE. THE PROCEEDINGS, WHICH HAVE ALREADY TERMINATED ARE NOT LIABLE FOR ABATEMENT UNLESS STATUTE EXPRESSLY PROVIDES FOR SUC H CONSEQUENCE THEREOF. 14. THE WORD 'PENDING' OCCURRING IN THE SECOND PRO VISO TO SECTION 153A OF THE ACT, IS ALSO SIGNIFICANT. IT IS QUALIFI ED BY THE WORDS 'ON THE DATE OF INITIATION OF THE SEARCH', AND MAKES IT ABU NDANTLY CLEAR THAT ONLY SUCH ASSESSMENT OR REASSESSMENT PROCEEDINGS AR E LIABLE TO ABATE. ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 116 15. THE PENDENCY OF AN APPEAL IN THE TRIBUNAL AGAI NST THE ORDER OF ASSESSMENT AGAINST WHICH AN APPEAL HAS BEEN DECIDED BY CIT (A) IS NOT A CONTINUATION OF THE PROCEEDINGS OF ASSESSMENT . AN APPEAL UNDER THE INCOME TAX ACT LIES TO THE APPELLATE TRIBUNAL O N A QUESTION OF LAW. EVEN IF IT IS PENDING ON THE DATE OF SEARCH, N O SUCH INTENTION HAS INDICATED BY THE TRIBUNAL ARISES OUT OF THE PROVISI ONS OF SECOND PROVISO TO SECTION 153A, TO ABATE THE PROCEEDINGS, WHICH HAVE BEEN COMPLETED, OR CONCLUDED, AND TO RESTORE ASSESSMENT TO THE FILE OF THE ASSESSING OFFICER. 16. WE DO NOT FIND FORCE IN THE SUBMISSION OF SHRI ASHISH BANSAL THAT WHERE A NOTICE UNDER SECTION 153A HAS BEEN GIV EN AFTER THE SEARCH OPERATIONS UNDER SECTION 132, FOR FILING ASS ESSMENT FOR THE BLOCK PERIOD OF 6 YEARS, AND IF SUCH PERIOD INCLUDE S ANY OF THE ASSESSMENT YEAR, THE ABATEMENT OF ASSESSMENT AND RE -ASSESSMENT PROCEEDINGS, TO GIVE WAY TO REASSESSMENT CONSIDERIN G THE ADDITIONS IN THE ASSESSMENT UNDER SECTION 153A, WILL ALSO INCLUD E THE ASSESSMENT OR RE-ASSESSMENT, WHICH HAS BEEN COMPLETED. IF AS A RESULT OF SEARCH, SOME UNDISCLOSED INCOME IS FOUND TO HAVE ESCAPED AS SESSMENT, THE ASSESSING OFFICER, MAY INITIATE STEPS FOR REASSESSM ENT AFTER SANCTION OF COMPETENT AUTHORITY, WITHIN THE PRESCRIBED PERIOD O F LIMITATION. 17. A CIRCULAR NO.7 OF 2003 DATED 5.9.2003 ISSUED B Y THE COMMISSIONER OF INCOME TAX HAS CLARIFIED THE POSITI ON IN PARA 65.5 AS FOLLOWS:- THE ASSESSING OFFICER SHALL ASSESS OR REASSESS THE TOTAL INCOME OF EACH OF THESE SIX ASSESSMENT YEARS. ASSES SMENT OR REASSESSMENT, IF ANY, RELATING TO ANY ASSESSMENT YE AR FALLING WITHIN THE PERIOD OF SIX ASSESSMENT YEARS PENDING O N THE DATE OF INITIATION OF THE SEARCH UNDER SECTION 132 OR REQUI SITION UNDER SECTION 132A, AS THE CASE MAY BE, SHALL ABATE. IT I S CLARIFIED THAT THE APPEAL, REVISION OR RECTIFICATION PROCEEDINGS P ENDING ON THE DATE OF INITIATION OF SEARCH UNDER SECTION 132 OR R EQUISITION SHALL NOT ABATE. SAVE AS OTHERWISE PROVIDED IN THE PROPOSED SECTION 153A, SECTION 153B AND SECTION 153C, ALL OT HER PROVISIONS OF THIS ACT SHALL APPLY TO THE ASSESSMEN T OR REASSESSMENT MADE UNDER SECTION 153A. IT IS ALSO CL ARIFIED THAT ASSESSMENT OR REASSESSMENT MADE UNDER SECTION 153A SHALL BE SUBJECT TO INTEREST, PENALTY AND PROSECUTION, IF AP PLICABLE. IN THE ASSESSMENT OR REASSESSMENT MADE IN RESPECT OF AN AS SESSMENT ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 117 YEAR UNDER THIS SECTION, THE TAX SHALL BE CHARGEABL E AT THE RATE OR RATES AS APPLICABLE TO SUCH ASSESSMENT YEAR. 18. IN STATE OF RAJASTHAN V. KHANDAKA JAIN JEWELLE RS [2007] 14 SCC 339 THE SUPREME COURT REITERATING THE PRINCIPLE S OF INTERPRETATION OF TAXING STATUTES HELD IN PARA 24 A S FOLLOWS:- A TAXING STATUTE HAS TO BE CONSTRUED AS IT IS ALL THESE CONTINGENCIES THAT THE MATTER WAS UNDER LITIGATION AND THE VALUE OF THE PROPERTY BY THAT TIME SHOT UP CANNOT BE TAKE N INTO ACCOUNT FOR INTERPRETING THE PROVISIONS OF A TAXING STATUTE. AS ALREADY MENTIONED ABOVE A TAXING STATUTE HAS TO BE CONSTRUED STRICTLY AND IF IT IS CONSTRUED STRICTLY THEN THE P LEA THAT THE INCUMBENT TOOK A LONG TIME TO GET A DECREE FOR EXEC UTION AGAINST THE VENDOR THAT CONSIDERATION CANNOT WEIGH WITH THE COURT FOR INTERPRETING THE PROVISIONS OF THE TAXING STATUTES. 19. THE SECOND PROVISO TO SECTION 153A OF THE ACT, REFERS TO ABATEMENT OF THE PENDING ASSESSMENT OR RE-ASSESSMEN T PROCEEDINGS. THE WORD 'PENDING' DOES NOT OPERATE ANY SUCH INTERP RETATION, THAT WHEREVER THE APPEAL AGAINST SUCH ASSESSMENT OR REAS SESSMENT IS PENDING, THE SAME ALONGWITH ASSESSMENT OR REASSESSM ENT PROCEEDINGS IS LIABLE TO BE ABATED. THE PRINCIPLES OF INTERPRET ATION OF TAXING STATUTES DO NOT PERMIT THE COURT TO INTERPRET THE S ECOND PROVISO TO SECTION 153A IN A MANNER THAT WHERE THE ASSESSMENT OR REASSESSMENT PROCEEDINGS ARE COMPLETE, AND THE MATTER IS PENDING IN APPEAL IN THE TRIBUNAL, THE ENTIRE PROCEEDINGS WILL ABATE. 20. THERE IS ANOTHER ASPECT TO THE MATTER, NAMELY THAT THE ABATEMENT OF ANY PROCEEDINGS HAS SERIOUS CAUSES AND EFFECT IN AS MUCH AS THE ABATEMENT OF THE PROCEEDINGS, TAKES AWA Y ALL THE CONSEQUENCES THAT ARISE THEREAFTER. IN THE PRESENT CASE AFTER DEDUCTING BOGUS GIFTS IN THE REGULAR ASSESSMENT PROCEEDINGS, THE PROCEEDINGS FOR PENALTY WERE DRAWN UNDER SECTION 271 (1) (C) OF THE ACT. THE MATERIAL FOUND IN THE SEARCH MAY BE A GROUND FOR NOTICE AND ASSESSMENT UNDER SECTION 153A OF THE ACT BUT THAT WOULD NOT EFFACE O R TERMINATE ALL THE CONSEQUENCE, WHICH HAS ARISEN OUT OF THE REGULAR AS SESSMENT OR REASSESSMENT RESULTING INTO THE DEMAND OR PROCEEDIN GS OF PENALTY. 21. FOR THE AFORESAID REASONS, WE ARE OF THE OPINI ON THAT THE INCOME TAX APPELLATE TRIBUNAL ERRED IN LAW IN ABATI NG THE REGULAR ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 118 ASSESSMENT PROCEEDINGS, WHICH HAD BECOME FINAL, AND RESTORING THEM AS A CONSEQUENCE OF SEARCH UNDER SECTION 132, AND N OTICE UNDER SECTION 153A OF THE ACT TO THE FILE OF THE ASSESSIN G OFFICER. 22. THE APPEAL IS ALLOWED. THE ORDER OF THE INCOME TAX APPELLATE TRIBUNAL DATED 31ST OCTOBER, 2007 IS SET ASIDE. THE QUESTION OF LAW IS DECIDED IN FAVOUR OF THE REVENUE AND AGAINST THE AS SESSEE. THE TRIBUNAL WILL DECIDE THE APPEAL ON MERITS IN ACCORD ANCE WITH LAW. 171. IN THE LIGHT OF ABOVE DISCUSSIONS, IF WE CONSI DER THE FACTS OF THE CASE UNDER CONSIDERATION, WE FIND THAT DURING THE COURSE OF SE ARCH, NO INCRIMINATING MATERIAL WAS FOUND IN RESPECT OF THESE DEPOSITORS. THE ASSE SSEE FURNISHED ORIGINAL RETURNS ALONG WITH FINANCIAL STATEMENT AND ACCORDINGLY REGU LAR ASSESSMENTS WERE COMPLETED. ACCORDING TO THE ABOVE JUDGMENT OF THE HONBLE ALLAHABAD HIGH COURT, THE IMPUGNED ASSESSMENT ORDERS ARE NOT ABATE D ASSESSMENT. AS PER THE DECISION OF I.T.A.T., MUMBAI, SPECIAL BENCH, THE AD DITION IS TO BE MADE ONLY ON THE BASIS OF INCRIMINATING MATERIAL FOUND DURING TH E COURSE OF SEARCH. IN THE CASE UNDER CONSIDERATION, WHATEVER INCRIMINATING MATERIA L FOUND DURING THE COURSE OF SEARCH HAVE BEEN CONSIDERED BY THE ASSESSEE AND DEC LARED THE RELEVANT INCOME IN RETURN OF INCOME FILED IN RESPONSE TO NOTICE UNDER SECTION 153A OF THE ACT OR CONTENTS OF THOSE PAPERS HAVE BEEN FULLY EXPLAINED. THEREFORE, ADDITIONS ARE NOT WARRANTED. 172. APART FROM THE ABOVE DISCUSSION ON INDIVIDUAL ISSUES RAISED IN DIFFERENT GROUNDS OF APPEALS, WE WOULD LIKE TO CONSIDER SCHEM E OF SEARCH ASSESSMENTS FOR ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 119 THE YEARS UNDER CONSIDERATION. THESE CASES PERTAIN TO ASSESSMENT UNDER SECTION 153A OF THE ACT AS SEARCH UNDER SECTION 132 HAS BEE N CARRIED OUT ON 23.03.2006. THE CASE OF THE REVENUE IS THAT MOST OF THE ADDITIO NS MADE BY THE A.O. ARE ON THE BASIS OF LOOSE PAPERS AND OTHER DOCUMENTS FOUND AT THE TIME OF SEARCH AND POST SEARCH EXAMINATION AND INVESTIGATION WHEREAS THE CA SE OF ASSESSEE IS THAT THE ASSESSEE HAS CONSIDERED ALL INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH AND ACCORDINGLY ADDITIONAL INCOME WAS DECLAR ED IN THE RETURNS FILED IN RESPONSE TO NOTICE UNDER SECTION 153A OF THE ACT. UNDER SUCH CIRCUMSTANCES, WHERE SOME LOOSE PAPERS ETC. ARE FOUND DURING SURVE Y/SEIZURE, HOW AMOUNT OF INCOME IS TO BE CALCULATED AND TO MAKE ADDITION ON THE BASIS OF SUCH LOOSE PAPERS. THE ISSUE HAS BEEN DISCUSSED IN VARIOUS JUDGMENTS I NCLUDING THE JUDGMENT IN THE CASE OF COMMISSIONER OF INCOME-TAX, JALANDHAR-I VS. ATAM VALVES (P.) LTD., 332 ITR 468 (P&H) AND COMMISSIONER OF INCOME-TAX, JALAN DHAR VS. KHAZAN SINGH & BROS 304 ITR 243 [2007] 164 TAXMAN 30 (P&H). THE R ELEVANT BRIEF FACTS OF THOSE CASES AND THE FINDING OF THE COURT THEREIN ARE AS U NDER :- COMMISSIONER OF INCOME-TAX, JALANDHAR-I VS. ATAM VA LVES (P.) LTD., 332 ITR 468 (P&H). IN THIS CASE DURING THE COURSE OF A SURVEY CONDUC TED AT THE PREMISES OF THE ASSESSEE CERTAIN INCRIMINATING DOCUMENTS WER E FOUND INCLUDING A SLIP PAD CONTAINING PAYMENT OF WAGES TO VARIOUS PERSONS. TH E ASSESSEE EXPLAINED THAT THE SAID SLIPS DID NOT REPRESENT PAYMENT OF WAGES DURIN G YEAR-IN-QUESTION BUT WERE FOR ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 120 EARLIER YEAR. HOWEVER, THE ASSESSING OFFICER DID NO T ACCEPT THE SAID EXPLANATION AND ESTIMATED SALES ON BASIS OF ABOVE SAID LOOSE SL IPS AND, ACCORDINGLY, MADE ADDITION. ON FURTHER APPEAL, TRIBUNAL HELD THAT AS SESSING OFFICER WAS NOT JUSTIFIED IN ESTIMATING SALES ON THE BASIS OF LOOSE SLIPS WIT HOUT SUBSTANTIATING THAT ASSESSEE HAD ACTUALLY MADE SALES TO THAT EXTENT OF ESTIMATIO N. IT WAS HELD THAT ASSESSING OFFICER HAD NO IOTA OF EVIDENCE IN THE FORM OF SALE BILLS OR BANK ACCOUNT OR MOVABLE AND IMMOVABLE PROPERTY WHICH COULD REPRESEN T EARNING OF UNACCOUNTED INCOME BY ASSESSEE, THEREFORE, DELETED THE ADDITION MADE ON BASIS OF ESTIMATION OF SALES. WHETHER TRIBUNAL WAS JUSTIFIED IN DELETING A DDITION. THE LEARNED COUNSEL FOR THE REVENUE SUBMITTED THAT ONCE THE EXPLANATION OF THE ASSESSEE WAS FOUND TO BE UNACCEPTABLE, THE ADDITION MADE BY THE ASSESSING OF FICER OUGHT TO HAVE BEEN UPHELD. THE COURT HELD AS UNDER:- (PAGE 471) 4. WE ARE UNABLE TO ACCEPT THIS SUBMISSION. 5. NO DOUBT, A FALSE EXPLANATION OF ASSESSEE MAY BE A CIRCUMSTANCE TO BE TAKEN INTO ACCOUNT FOR RECORDING A FINDING OF UNDISCLOSED INCOME AND SOME DEGREE OF GUESS WORK IS ALSO PERMISSIBLE IN SUCH A SITUATION, AS HELD BY THE SUP REME COURT IN KACHWALA GEMS V. JT. CIT [2007] 288 ITR 10 1, RELIE D UPON BY THE LEARNED COUNSEL FOR THE REVENUE, IT DEPENDS UPON FA CTS AND CIRCUMSTANCES OF EACH CASE AS TO WHAT IS TO BE FAIR ESTIMATE OF UNDISCLOSED INCOME. THE CIT(A) AS WELL AS THE TRIBU NAL HELD THAT IN THE CIRCUMSTANCES, THE ESTIMATE OF ADDITION, TO THE EXTENT ASSESSED BY THE ASSESSING OFFICER, WAS NOT CALLED FOR AND THE S AME WAS PARTLY LIABLE TO BE SET ASIDE. 6. IT CANNOT BE HELD THAT ANY SUBSTANTIAL QUESTION OF LAW ARISES FOR CONSIDERATION. 7. THE APPEAL IS DISMISSED. ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 121 COMMISSIONER OF INCOME-TAX, JALANDHAR VS. KHAZAN SI NGH & BROS 304 ITR 243 [2007] 164 TAXMAN 30 (P&H). THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE RESPONDENT-FIRM WAS ENGAGED IN THE BUSINES S OF PURCHASE AND SALE OF AUTO SPARE PARTS IN RESPECT OF THE YEAR UNDER REFERENCE. IT HAD HEADQUARTER AT JALANDHAR AND BRANCH OFFICE AT KAPURTHALA. THERE WERE THREE PARTNERS, NAMELY, SHRI GURBAX SINGH, FATHER AND HIS TWO SONS SARVSHRI MANJIT SING H AND AMRIK SINGH. ON THE INSPECTION UNDERTAKEN BY THE EXCISE AND TAXATION DE PARTMENT, JALANDHAR, ON 21- 10-1982, A POCKET DIARY WAS IMPOUNDED AND ITS POSSE SSION WAS TAKEN BY THE INCOME-TAX DEPARTMENT BY PLACING RELIANCE ON THE PR OVISIONS OF SECTION 132A OF THE ACT. IN OTHER WORDS, THE DIARY WAS REQUISITIONE D BY THE COMPETENT AUTHORITY. THE ASSESSEE FILED ITS RETURN ON 07.04.1983, DECLAR ING ITS INCOME AT RS.14,240/- AND BEST JUDGMENT UNDER SECTION 144 OF THE ACT WAS FRAM ED ON 21.03.1985 AT RS.4,97,180/-. THE ORDER OF THE ASSESSING OFFICER WAS SET ASIDE BY THE CIT(A) VIDE HIS ORDER DATED 25.11.1985 AND ACCORDINGLY DE NOVO ASSESSMENT WAS TO BE FRAMED. THEREAFTER FRESH ASSESSMENT WAS FRAMED UND ER SECTION 143(3) OF THE ACT ON 21.03.1985 AND FINALLY AN ADDITION OF RS.5,65,30 0/- WAS MADE IN THE ASSESSMENT ON ACCOUNT OF UN-EXPLAINED INVESTMENT, WHICH WAS BA SED ON THE POCKET DIARY REQUISITIONED BY THE REVENUE UNDER SECTION 132A OF THE ACT. THE ASSESSING OFFICER, VIDE HIS ORDER DATED 08-02-1991 INVOKED TH E PROVISIONS OF SECTION 145(2) OF THE ACT AND THE VERSION OF THE ASSESSEE WAS REJE CTED ALTOGETHER. THE CIT(A), VIDE ITS ORDER DATED 23.04.1992, UPHELD THE ASSESSM ENT FRAMED BY THE ASSESSING ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 122 OFFICER AND ALSO HIS ACTION OF INVOKING THE PROVISI ONS OF SECTION 145(2) OF THE ACT. ACCORDINGLY, ADDITION OF RS.5,65,300/- WAS CONFIRME D. ON FURTHER APPEAL FILED BY THE ASSESSEE, THE MATTER WAS CONSIDERED BY THE TRIB UNAL AND IT TOOK THE VIEW THAT THE DIARY SEIZED DURING INSPECTION OF THE PREMISES OF THE ASSESSEE COULD NOT CONSTITUTE, A BASIS FOR MAKING ADDITION OF RS.5,65, 300/-. THE TRIBUNAL IN ITS ORDER DATED 25-6-1993 UNEQUIVOCALLY CONDEMNED THE APPROAC H ADOPTED BY THE CIT(A) IN PARAGRAPH NOS. 6.1 & 6.2 IN ITS ORDER DATED 23.04.1 992. IN CONCLUDING PARAGRAPH NO.22, THE TRIBUNAL CATEGORICALLY HELD THAT NO ADDI TION WAS JUSTIFIED ON THE BASIS OF ENTRIES IN THE IMPOUNDED DIARY WRITTEN IN HAND OF O NE OF THE PARTNERS SHRI MANJIT SINGH IN THE CASE OF THE FIRM AND WENT ON TO ADD ON LY A SUM OF RS.55,000/- AS AGAINST THE DECLARED INCOME BY THE ASSESSEE OF RS.1 4,240/-. THE COURT HELD AS UNDER:- (PAGE NOS.246-247) WE HAVE THOUGHTFULLY CONSIDERED THE SUBMISSIONS MA DE BY THE LEARNED COUNSEL FOR THE REVENUE AND ARE OF THE VIEW THAT THIS REFERENCE PETITION IS LIABLE TO BE RETURNED UNANSWERED BECAUS E NO QUESTION OF LAW WOULD ARISE FOR OUR DETERMINATION. THE TRIBUNAL WHILE ANALYZING THE APPROACH ADOPTED BY THE CIT(A) HAS REACHED A CO NCLUSION THAT THE ASSESSING OFFICER AS WELL AS THE CIT(A) HAVE FAILED TO APPRECIATE THE CONTENTION ADVANCED BY THE ASSESSEE THAT THE ENTRIE S MADE IN THE DIARY WERE IMAGINARY, ESPECIALLY THE FACT THAT NEITHER AN Y SHAGUN WAS TAKEN NOR THERE WAS ANY GIRL BY THE NAME OF DOLLY IN WHOS E MARRIAGE EXPENSES WERE INCURRED. FURTHER NO PLOT WAS PURCHAS ED ON WHICH EXPENSES COULD BE INCURRED. IN RESPECT OF THE ENTRI ES IN THE DIARY DESHI SHARAB THEKA, THE TRIBUNAL HAS TAKEN THE VI EW THAT THE ASSESSEE OR ITS PARTNERS HAD NEVER TAKEN SUCH A LIQ UOR VEND AND THE REVENUE WAS NOT ABLE TO CONNECT THE ASSESSEE WITH A NY SUCH ACTIVITY AFTER DUE VERIFICATION FROM THE EXCISE DEPARTMENT. EVEN THE FIAT CAR BEARING REGISTRATION NO. PUL-7649 WAS NOT REGISTERE D IN THE NAME OF ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 123 ANY OF THE PARTNERS. IT WAS, IN FACT, REGISTERED IN THE NAME OF ONE MOHINDER SINGH AND, THEREFORE, NO ADDITION ON THAT ACCOUNT COULD HAVE BEEN MADE. IT IS ON THE BASIS OF THE AFOREMENT IONED FINDINGS OF FACT RECORDED BY THE TRIBUNAL THAT IT WAS CONCLUDED THAT THE ENTRIES WERE IMAGINARY AND NO RELIANCE COULD HAVE BEEN PLAC ED ON SUCH ENTRIES FOR THE PURPOSES OF CONSTITUTING A BASIS FO R RECORDING AN ASSESSMENT ORDER. THEREFORE, WE ARE OF THE VIEW THA T NO QUESTION OF LAW WOULD ARISE AS THE ORDER OF THE TRIBUNAL IS BAS ED ON PURE FINDINGS OF FACT. ACCORDINGLY, THE QUESTION REFERRED DOES NO T NEED TO BE ANSWERED AND THE REFERENCE IS RETURNED UNANSWERED. 173. IN THE LIGHT OF ABOVE BACK GROUND OF DISCUSSIO NS, IF WE CONSIDER THE FACTS OF THE CASE UNDER CONSIDERATIONS, WE NOTICED THAT DURI NG THE COURSE OF SEARCH NO DOUBT CERTAIN LOOSE PAPERS AND DIARY ETC. WERE FOUND. BU T THE ASSESSEE ON THE BASIS OF LOOSE PAPERS AND OTHER DOCUMENTS FOUND AT THE TIME OF SEARCH FURNISHED RETURN OF INCOME IN RESPONSE TO NOTICE UNDER SECTION 153A OF THE ACT AND DISCLOSED THE RELEVANT UNDISCLOSED INCOME. IN THIS REGARD, A CHA RT OF SUCH UNACCOUNTED INCOME DECLARED BY THE ASSESSEE FOR VARIOUS YEARS IN THE R ETURN OF INCOME FILED IN RESPONSE TO NOTICE UNDER SECTION 153A OF THE ACT FURNISHED B Y THE LD. AUTHORIZED REPRESENTATIVE FILED BEFORE US IN RESPECT OF DR. S. P. YADAV AND DR. SMT. NEETU YADAV ARE REPRODUCED AS UNDER :- DR. S.P. YADAV :- ASSESSMENT YEAR RETURN INCOME FILED U/S 139(1) RETURN INCOME FILED U/S 153A DIFFERENCE OF INCOME U/S 139(1) AND 153A ASSESSED INCOME DIFFERENCE IN ASSESSED INCOME & RETURN INCOME U/S 153A 2001-02 112000.00 112000.00 NIL 1105450.00 1105450.00 ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 124 2002-03 303370.00 326310.00 22940.00 2086634.00 2063694.00 2003-04 267505.00 558890.00 291385.00 2499137.00 2207752.00 2004-05 328160.00 3744070.00 3415910.00 6530914.00 3115004.00 2005-06 483510.00 2748730.00 2665220.00 7052124.00 4386904.00 2006-07 3068680.00 3068680.00 3068680.00 7179790.00 4111110.00 TOTAL 4654625.00 10650080.00 9464135.00 26454049.00 16989914.00 DR. NEETU YADAV :- ASSESSMENT YEAR RETURN INCOME FILED U/S 139(1) RETURN INCOME FILED U/S 153A DIFFERENCE OF INCOME U/S 139(1) AND 153A ASSESSED INCOME DIFFERENCE IN ASSESSED INCOME & RETURN INCOME U/S 153A 2001-02 137320.00 137320.00 NIL 155570.00 155570.00 2002-03 83010.00 108010.00 25000.00 508186.00 483186.00 2003-04 166660.00 1362920.00 1196260.00 1816776.00 620516.00 2004-05 198760.00 261490.00 62730.00 748284.00 685554.00 2005-06 239270.00 4107710.00 3868440.00 7030954.00 3162514.00 2006-07 2314920.00 2314920.00 2314920.00 4756350.00 2441430.00 TOTAL 3263730.00 8416160.00 7467350.00 15016120.00 7548770.00 174. THE PAPERS AND DOCUMENTS WHICH ARE NOT PERTAIN ING TO UNDISCLOSED INCOME, THE ASSESSEE HAS FURNISHED NECESSARY EXPLANATIONS, DETAILS, RECONCILIATIONS AND DEMONSTRATED THAT ON THE BASIS OF THOSE PAPERS ADDI TIONS ARE NOT WARRANTED, BECAUSE NOTING ON THOSE PAPERS AND DOCUMENTS WERE IMAGINARY , ROUGH, DUMP ENTRIES WITHOUT CORROBORATING BY ANY INCOME, INVESTMENT OR ASSETS. THE CIT(A) HAS CONSIDERED ITEM-WISE ADDITIONS AND GIVEN HIS FINDIN GS. WE HAVE ALSO CONSIDERED THE ISSUES/ITEM-WISE AS PER DETAILED DISCUSSIONS MA DE ABOVE. HOWEVER, IF WE SEE ALL THE FACTS OF THE CASE TOGETHER, WE FIND THAT TH E ASSESSING OFFICER WAS NOT ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 125 JUSTIFIED IN ESTIMATING INCOME AND MAKING ADDITION ON BASIS OF VARIOUS DUMP/IMAGINARY ENTRIES IN LOOSE PAPERS, DIARY ETC. THE A.O. FAILED TO SUBSTANTIATE THAT THE LOOSE PAPER AND DOCUMENTS FOUND AT THE TIM E OF SEARCH REPRESENT THE UNACCOUNTED INCOME OF THE ASSESSEE. THE A.O. DID N OT HAVE ANY IOTA OF EVIDENCE IN THE FORM OF UNACCOUNTED INCOME, MOVABLE OR IMMOV ABLE PROPERTY OF THE ASSESSEE IN ADDITION TO UNACCOUNTED INCOME DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE UNDER SECTION 153A OF THE ACT NOR SUCH EVIDENCE HAS BEEN POINTED OUT AT THE TIME OF HEARIN G BEFORE US. THE REVENUE DID NOT DISPUTE THE FACTS AVAILABLE ON RECORD AND CONSI DERED BY THE CIT(A). 175. BEFORE PARTING FROM THE MATTER, IT IS RELEVANT TO DIRECT THE A.O. THAT AFTER DELETING THE ADDITIONS BY THE CIT(A) AND DELETION O F WHICH HAVE CONFIRMED BY US, THE UNACCOUNTED INCOME MUST NOT BE LESS THAN THE UN ACCOUNTED INCOME DECLARED BY THE ASSESSEE IN RETURNS OF INCOMES FILED IN RESPONS E TO NOTICE UNDER SECTION 153A OF THE ACT. THE A.O. IS ALSO DIRECTED TO VERIFY THE R ETURNS FILED BY ALL THE THREE ASSESSEES IN RESPONSE TO NOTICE UNDER SECTION 153A OF THE ACT INCLUDING M/S. SHIVAM SURGICAL NURSING HOME. THE A.O. IS DIRECTED ACCORDINGLY. 176. IN THE RESULT :- 1) ITA NO.84/A/2011 OF THE REVENUE IS DISMISSED (DR . S.P. YADAV). 2) ITA NO.85/A/2011 OF THE REVENUE IS DISMISSED (D R. S.P. YADAV). ITA NOS.84 TO 89/A/2011, 79 & 80/A/2011 AND 82 & 83/A/2011 126 3) ITA NO.86/A/2011 OF THE REVENUE IS PARTLY ALLOWE D FOR STATISTICAL PURPOSES (DR. S.P. YADAV). 4) ITA NO.87/A/2011 OF THE REVENUE IS PARTLY ALLOWE D FOR STATISTICAL PURPOSES (DR. S.P. YADAV). 5) ITA NO.88/A/2011 OF THE REVENUE IS PARTLY ALLOWE D FOR STATISTICAL PURPOSES (DR. S.P. YADAV). 6) ITA NO.89/A/2011 OF THE REVENUE IS DISMISSED (D R. S.P. YADAV). 7) ITA NO.79/A/2011 OF THE REVENUE IS DISMISSED (DR . SMT. NEETU SINGH YADAV). 8) ITA NO.80/A/2011 OF THE REVENUE IS DISMISSED (DR . SMT. NEETU SINGH YADAV). 9) ITA NO.82/A/2011 OF THE REVENUE IS DISMISSED (M/ S. SHIVAM SURGICAL NURSING HOME). 10) ITA NO.83/A/2011 OF THE REVENUE IS DISMISSED (M /S. SHIVAM SURGICAL NURSING HOME). (ORDER PRONOUNCED IN THE OPEN COURT) SD/- SD/- (BHAVNESH SAINI) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT (APPEALS) CONCERNED 4. CIT CONCERNED 5. D.R., ITAT, ALLAHABAD BENCH, ALLAHABAD 6. GUARD FILE. BY ORDER ASSISTANT REGISTRAR INCOME-TAX APPELLATE T RIBUNAL, ALLAHABAD TRUE COPY