Sh. Naresh Kumar Verma, Rajpura V. ACIT, Patiala

ITA 806/CHANDI/2012

• Counselvise Citation: 80621514 RSA 2012
• Duration Of Justice: 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 06-08-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained investment; Gift; Business income; Search and seizure; Salary income; Principle of natural justice; Source of fund; Retrospective amendment; Onus to prove
• Section: 143(3); 153A; 147; 54; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A CHANDIGARH BEFORE MS.SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER ITA NO. 802 TO 806& 818/CHD/2012 A.Y.: 2002-03,2004-05, 2005-06, 2006-07, 2007-08 & 2003-04 SHRI NARESH KUMAR VERMA, V THE ACIT,CC, H.NO. 94-A, GURU NANAK COLONY, PATIALA. RAJPURA. PAN: ACRPV-0385Q (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUDHIR SEHGAL RESPONDENT : SHRI MANJEET SINGH DATE OF HEARING : 25.10.2012 DATE OF PRONOUNCEMENT : 27.11.2012 ORDER PER BENCH THE PRESENT BUNCH OF SIX APPEALS FILED BY THE APPEL LANT IS DIRECTED AGAINST THE ORDER, DATED 28.03.2012/10. 5.2012 PASSED BY THE LD. CIT(A) U/S 250(6) OF THE INCOME-T AX ACT,1961 (IN SHORT 'THE ACT'). AS THE APPEALS INVO LVE SIMILAR GROUNDS OF APPEAL AND ISSUES, THE SAME ARE BEING DE CIDED BY A CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE AN D BREVITY. 2. IN ITA NO. 802/CHD/2012, THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL : 1. THAT THE LD CIT(APPEALS) HAS ERRED IN CONFIRMIN G THE ADDITION OF RS.54,000/- ON ACCOUNT OF CERTAIN ALLEG ED JOB WORK ON THE BASIS OF STATEMENT RECORDED DURING THE COURSE OF SEARCH ON 7.8.2007.. 2. THAT NOTWITHSTANDING THE ABOVESAID FACTS, THE YE AR INVOLVED BEING FINANCIAL YEAR 2001-02, NO PRESUMPTION COULD BE 2 DRAWN IN RESPECT OF ALLEGED JOB WORK CARRIED OUT IN FINANCIAL YEAR 2001-02. 3. THAT THE LD CIT(APPEALS) HAS ERRED IN CONFIRMING THE ADDITION OF RS.59,193/- ON ACCOUNT OF HOUSEHOLD EXP ENSES AGAINST THE ADDITION OF RS.86,193/- AS MADE BY THE AO. 4. THAT NOTWITHSTANDING THE ABOVE GROUNDS OF APPEAL , THE LD CIT(APPEALS) WAS NOT JUSTIFIED IN UPHOLDING ADDITIO NS IN THE ASSESSMENT FRAMED U/S 153A SINCE NO MATERIAL WAS FO UND DURING SEARCH LEADING TO VARIOUS ADDITIONS MADE DUR ING THE ASSESSMENT PROCEEDINGS. 5. THAT THE ADDITION IN THE AFORESAID PARAS HAS BEE N MADE AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE AND SUBMISSIONS MADE BY US HAS NOT BEEN CONSIDERED PROP ERLY. 6. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL BEFORE THE APPEAL IS FINALLY HEAR D OR DISPOSED OFF. 3. LD. 'AR' STATED THAT ALL THE GROUNDS OF APPEAL I N ITA NO.802 TO 806 & 818/CHD/2012, FOR VARIOUS ASSESSMEN T YEARS ARE COMMON IN NATURE, EXCEPT THERE BEING VARI ATION IN FIGURE OF ADDITION, MADE BY THE AO, ON ACCOUNT OF A LLEGED JOB WORK AND HOUSE-HOLD EXPENSES ETC. LD. 'AR' FILED W RITTEN SUBMISSIONS, IN THE FORM OF CHART AND PLACED RELIAN CE, ON THE DECISION DATED 22.08.2012 OF CHANDIGARH BENCH I N ITA NO. 343/CHD/2012, FOR THE ASSESSMENT YEAR 2003-04 A ND ITA 376/CHD/2012, FOR THE ASSESSMENT YEAR 2003-04 ( IN THE CROSS APPEALS), IN THE CASE OF SHRI VIPAN KUMAR VER MA, PROPRIETOR, RAJPURA V ACIT, PATIALA. LD. 'AR' REFE RRED TO QUESTION NO.4 & 10 OF STATEMENT DATED 7.8.2007, REC ORDED U/S 132(4) OF THE ACT. HE, FURTHER, VEHEMENTLY CONT ENDED THAT THE STATEMENT OF THE ASSESSEE APPELLANT WAS RE CORDED, ON 7.8.2007, U/S 132(4) OF THE ACT AND IN RESPONSE TO QUESTION NO.10, APPELLANT NOWHERE MENTIONED THAT HE 3 HAD EARNED INCOME FROM JOB WORK, IN ANY OF THE PAST ASSESSMENT YEARS. HE, FURTHER, STATED THAT EVEN IN THE ASSESSMENT YEAR, 2008-09, PERTAINING TO THE SPECIFI ED PREVIOUS YEAR, A SURRENDER OF RS.22 LACS HAD BEEN M ADE BY THE APPELLANT, HOWEVER, NO DECLARATION HAS BEEN MAD E, IN RESPECT OF JOB WORK, AS NO MATERIAL WAS FOUND AND S EIZED, IN THE COURSE OF SEARCH OPERATIONS. IN RESPONSE TO QU ESTION NO.4 OF THE SAID STATEMENT, THE ASSESSEE APPELLANT STATED ABOUT THE NATURE OF HIS BUSINESS. LD. 'AR', CLEARL Y POINTED OUT THAT NO BOOKS OF ACCOUNT ARE MAINTAINED BY THE APPELLANT, HENCE, THERE IS NO QUESTION OF APPLICABI LITY OF THE PROVISIONS OF SECTION 132(4A) OF THE ACT. HE, VEHE MENTLY ARGUED THAT NO ADDITION, WHAT-SO-EVER, CAN BE MADE, WITHOUT THE FOUNDATION OF ANY MATERIAL OR EVIDENCE, BROUGHT ON RECORD. HOWEVER, THE AO MADE THE IMPUGNED ADDITION, ON ACCOUNT OF JOB WORK, PURELY BASED ON THE GENERAL AN D VAGUE DEPOSITION MADE BY THE ASSESSEE, IN THE COURSE OF S EARCH OPERATION IN RESPONSE TO QUESTION NO.10. HOWEVER, T HE SAID DEPOSITION REMAINED UNCORROBORATED AND, HENCE, NO I NCOME FROM SUCH SOURCE WAS DECLARED BY THE APPELLANT. TH E AO RESORTED TO ESTIMATION OF INCOME, WITHOUT BRINGING ANY MATERIAL ON RECORD AND ACTING IN AN ARBITRARY MANNE R. 4. LD. 'DR' PLACED RELIANCE, ON THE DECISION OF HON 'BLE PUNJAB & HARYANA HIGH COURT, IN THE CASE OF CIT V LEKH RAJ DHUNNA 344 ITR 352 (P&H). LD. 'DR' ALSO PLACE D RELIANCE ON THE PROVISIONS OF SECTION 132(4A) OF TH E ACT, TO SUPPORT HIS CONTENTIONS, IN RESPECT OF APPLICABILIT Y OF THE PRESUMPTIONS WITHIN THE MEANING OF SUCH PROVISIONS OF THE 4 ACT. LD. 'DR' ALSO STATED THAT THE APPELLANT HAS FA ILED TO REBUT THE STATEMENT RECORDED, IN THE COURSE OF SEAR CH OPERATIONS, PARTICULARLY THE ANSWER, IN RESPONSE TO Q.NO. 10. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, AND CAREFUL LY PERUSED AND CONSIDERED THE FACTS OF THE CASE, PAPER BOOK FILED BY THE ASSESSEE AND RELIANCE PLACED BY LD. 'D R' ON THE DECISION OF JURISDICTIONAL HIGH COURT. THE FIRST TW O GROUNDS OF APPEAL RAISED BY THE APPELLANT-ASSESSEE ARE INTE R- CONNECTED. IN THE FIRST GROUND OF APPEAL, THE APPE LLANT CONTENDED THAT CIT(APPEALS), ERRED IN CONFIRMING TH E ADDITION OF RS.54,000/-, MADE ON ACCOUNT OF CERTAIN ALLEGED JOB WORK, BASED ON THE STATEMENT OF THE APPELLANT R ECORDED, ON 7.8.2007, IN THE COURSE OF SEARCH OPERATION U/S 132 OF THE ACT. IN GROUND NO. 2, APPELLANT CONTENDED THAT NO PRESUMPTIONS CAN BE RAISED IN RESPECT OF ALLEGED JO B WORK, FOR THE ASSESSMENT YEAR 2002-03. 6. A BARE PERUSAL OF THE ASSESSMENT ORDER, DATED 19.12.2009, FOR THE ASSESSMENT YEAR IN QUESTION, PA SSED U/S 143(3) READ WITH SECTION 153A OF THE ACT REVEALS TH AT THE AO ESTIMATED INCOME OF THE APPELLANT FROM THE ALLEGED JOB WORK AND CONSEQUENTLY, MADE AN ADDITION OF RS.54,000/-, TO THE INCOME OF THE ASSESSEE, TREATING THE SAME AS UNACCO UNTED INCOME FROM JOB WORK. THE AO, MADE THE IMPUGNED AD DITION PURELY ON THE FOUNDATION OF STATEMENT OF THE ASSESS EE RECORDED, ON 07.08.2007, IN THE COURSE OF SEARCH OP ERATIONS. IT WOULD BE PERTINENT TO REPRODUCE THE RELEVANT TEX T OF THE 5 QUESTION NO.10 AND ANSWER THERETO, UPON WHICH RELIA NCE HAS BEEN PLACED BY THE AO, FOR MAKING THE IMPUGNED ADDI TION : Q.NO. 10 HAVE YOU OTHER SOURCE OF INCOME EXCEPT SALARY INCOME, YOU ARE DRAWING FROM M/S VERMA JEWELLERS ? IF SO, PLEASE GIVE DETAILS. ANS. I ALSO DO JOB WORK AT THE SHOP FROM WHICH I EARN RS.5 TO 6,000/- PER MONTH. IN RESPONSE TO QUESTION NO.4, THE ASSESSEE MERELY S TATED THE NATURE OF BUSINESS UNDERTAKEN BY HIM. THE APPELLAN T STATED THAT, I ASSISTED WITH MY FATHER AT THE SHOP FOR WHICH I GET SALARY OF RS.10,000/- PER MONTH. THE AO, VIDE QUESTIONNAIRE DATED 31.07.2009, ISSUED TO THE ASSES SEE, SOUGHT HIS EXPLANATION AS TO WHY INCOME FROM JOB WO RK AT RS.6,000/- PER MONTH MAY NOT BE ADDED TO THE INCOME , AS ADMITTED INCOME RS.5,000/- TO RS.6,000/- PER MONTH, IN THE STATEMENT RECORDED IN THE COURSE OF SEARCH OPERATIO N. THE AO, MADE THE IMPUGNED ADDITION, PURELY ON THE BASIS OF THE STATEMENT RECORDED U/S 132(4) OF THE ACT, AS IS EVI DENT FROM THE FINDINGS OF THE AO, REPRODUCED HEREUNDER: A SEARCH AND SEIZURE OPERATION WAS CONDUCTED ON T HE RESIDENTIAL PREMISES NO. 94-A, GURU NANAK COLONY, RAJPURA OF THE ASSESSE E ON 7-8-2007 AND STATEMENT ON OATH OF SH. NARESH KUMAR VERMA RECORDE D U/S 132(4) OF THE I.T. ACT. VIDE QUESTION NO. 10, THE ASSESSEE WAS REQUIRE D OTHER SOURCES OF INCOME OTHER THAN SALARY FROM VERMA JEWELLERS. IN REPLY TO THE QUESTION, THE ASSESSEE ADMITTED THAT HE DID JOB WORK AT THE SHOP AND EARNE D RS. 5000 TO 6000 PER MONTH BUT THE ASSESSEE NOT SHOWN THE SAID INCOME IN HIS R ETURN. VIDE QUESTIONNAIRE DATED 31 -7-2009, THE ASSESSEE W AS SHOW CAUSED AS TO WHY INCOME FROM JOB WORK AT THE SHOP RS. 6000/- PER MONTH MAY NOT BE ADDED TO THE INCOME AS HE ADMITTED INCOME RS. 5000 TO 6000 P ER MONTH IN HIS STATEMENT RECORDED DURING THE COURSE OF SEARCH PROCEEDINGS AT HIS RESIDENCE ON 7-8-2007 U/S 132(4) OF THE I.T ACT. THE SHOW CAUSE NOTICE WA S PROPERLY SERVED, BUT THE ASSESSEE FILED NO REPLY WHICH PROVE THAT HE HAS NOT HING TO SAY. SINCE THE ASSESSEE ADMITTED INCOME FROM JOB WORK RS. 5000 TO 6000 PER MONTH DURING THE COURSE OF SEARCH AT HIS RESIDENCE ON 7-8-2007, BUT THE HAS NOT SHOWN INCOME FROM JOB WORK IN HIS RETURN. THEREFORE, INCOME FOR THE ASSESSMENT YEAR 2002-03 6 IS ESTIMATED RS. 4500 PER MONTH AND RS. 54000/- ADD ED TO THE INCOME OF THE ASSESSEE TREATING AS INCOME FROM JOB WORK NOT ACCOU NTED FOR. 6(I) BEFORE CIT(APPEALS), THE APPELLANT SUBMITTED T HAT NO BUSINESS OF JOB WORK OF JEWELLERY WAS CARRIED OUT B Y HIM, FOR WHICH REQUISITE PLACE AND INFRASTRUCTURE IS REQUIRE D. IT WAS CONTENDED THAT THE ADDITION IS PURELY FOUNDED, ON T HE STATEMENT MADE, IN THE COURSE OF SEARCH OPERATION. THE ASSESSEE ALSO REFERRED TO CONTENTIONS AND RECOMMENDATIONS OF RAJA CHELLIAH COMMITTEE TO SHOW THAT MERE STATEMENT CANNOT BE MADE THE FOUNDATION O F ANY ADDITION, IN THE ABSENCE OF ANY MATERIAL TO BE BROUGHT ON RECORD. THE INSTRUCTIONS OF CBDT CONTAINED IN F.NO. 286/203/IT(INV.) DATED 11.03.2003 WERE ALSO Q UOTED, IN THE MATTER. THE APPELLANT ALSO PLACED RELIANCE ON THE DECISION SUCH AS CHIEF CIT V PAMPATHI (2009) 310 IT R 64 (KAR); MAGNETIC INTERMEDIATES P.LTD. V ITO (2009) 3 10 ITR (AT) 237 (AHD); CIT, RANCHI V RAVINDRA KUMAR JAIN & D.N.UPADHAYA, JJ. TAX APPEAL NO. 22 2000 (R) APRIL 29, 2011. IN A NUT-SHELL THE APPELLANT CONTENDED BEFOR E THE CIT(APPEALS) THAT NO ADDITION CAN BE MADE PURELY ON THE BASIS OF STATEMENT, WITHOUT ITS CORROBORATION BY WA Y OF COGENT MATERIAL. HOWEVER, LD CIT(APPEALS) UPHELD T HE ADDITION, AS PER FINDINGS RECORDED IN PARA 7 OF THE ORDER DATED 28.03.2012. THE RELEVANT PART OF THE ORDER I S REPRODUCED HEREUNDER : I HAVE CONSIDERED THE BASIS OF ADDITION MADE BY TH E AO AND THE ARGUMENTS OF THE AR ON THE ISSUE. IT IS SEEN THAT T HE AO HAS RELIED UPON THE STATEMENT OF THE APPELLANT MADE BEFORE THE AUTHORIZED OFFICER IN RESPONSE TO THE GENERAL QUESTION AS TO WHAT WAS HIS SOURCES OF INCOME AND/THE APPELLANT HAD VERY CATEGORICALLY STATED TO HAVE DON E JOB WORK ON REGULAR BASIS AT HIS SHOP . IN THE CIRCUMSTANCES THE CLAIM 7 OF THE AR THAT THE AO DID NOT HAVE ANY MATERIAL TO BASE HIS ESTIMATION, IS WITHOUT ANY BASIS. THE APPELLANT HAS NOT BEEN ABLE TO BRING ON RECORD ANY LOGICAL REASONS TO SHOW THAT ST ATEMENT GIVEN DURING THE COURSE OF SEARCH WAS IN ANY WAY OUT OF A NY FEAR OR COMPULSION OR INDUCEMENT. IT CLEARLY WAS A VOLUNTAR Y SUBMISSION OF FACTS AS RECALLED BY THE APPELLANT AT THE TIME OF M AKING THE STATEMENT AND THERE IS NO REASON TO DISBELIEVE THE AUTHENTICI TY OF SAME. AS SUCH THE ADDITION MADE BY THE AO IS CONFIRMED. 6(II) IT IS MENTIONED THAT CIT(APPEALS) MISREAD AND MISQUOTED THE SAID STATEMENT OF THE APPELLANT, AND READ THE SAME AS THE APPELLANT HAD CATEGORICALLY STATED TO HAVE DONE JOB WORK ON REGULAR BASIS AT SHOP. IN THIS CONTEXT, A REFERENCE MAYBE MADE TO THE ABOVE REPRODUCED RELE VANT PART OF THE APPELLANTS STATEMENT. IN VIEW OF THIS , FINDINGS OF THE CIT(APPEALS), ARE VITIATED, BEING BASED ON ASSU MED INCORRECT FACTS. 7. THE RELIANCE PLACED BY LD. 'DR' ON THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF LEKH RAJ D HUNNA (SUPRA) IS MISPLACED, FOUNDED ON MISREADING OF THE FACTS OF THE CASE AND THE RELEVANT PROVISIONS OF SECTION 132 (4) READ WITH SECTION 132(4A) OF THE ACT. A BARE PERUSAL OF THE FACT- SITUATION OF THE PRESENT CASE, AS CULLED OUT FROM T HE RELEVANT RECORDS, ASSESSMENT ORDER AND THE APPELLATE ORDER O F THE CIT(APPEALS), REVEALS THAT THE ASSESSEE NEVER MAINT AINED ANY BOOKS OF ACCOUNT. NO SEIZED MATERIAL HAS BEEN BROU GHT ON RECORD, TO PROVE THAT ASSESSEE HAD EARNED JOB WORK, FOR THE PAST ASSTT. YEARS, INCLUDING THE ASSTT. YEAR UNDER REFERENCE. LD. 'DR' HAS FAILED TO DEMONSTRATE, AS TO HOW THE F ACTS AND THE RATIO OF THE DECISION OF THE JURISDICTIONAL HIG H COURT, RELIED UPON BY HIM IS APPLICABLE TO THE FACTS OF TH E PRESENT CASE. A BARE PERUSAL OF THE FACT-SITUATION OF THE FACTS AND THE RATIO OF THE DECISION RELIED UPON BY LD. 'DR' R EVEALS THAT 8 IN THAT CASE, SEARCH WAS CONDUCTED, AT THE RESIDENC E OF THE ASSESSEE. IT WAS NOT IN DISPUTE THAT ASSESSEE HAD MADE A STATEMENT U/S 132(4) OF THE ACT WHEREBY A SURRENDER OF RS.2 LACS WAS MADE. BESIDES THIS, THE ASSESSEE HAD ADMITTED THAT HE HAD EARNED COMMISSION ON SALES WHI CH WAS NOT DISCLOSED IN THE RETURN FILED BY HIM. FURT HER, DURING SEARCH, CERTAIN SALES DOCUMENTS WERE SEIZED WHICH BORE THE SIGNATURES OF THE ASSESSEE AS WELL. THESE DOCUMENTS DEPICTED TOTAL SALE OF RS.4,92,03,005/-. THEREFORE, IN VIEW OF PROVISIONS OF SUB-SECTION (4) & (4A) OF SECTION 132 OF THE ACT, THE AO WAS FOUND BY THE JURISDICTIONAL HIGH COURT, AS JUSTIFIED IN DRAWING PRESUMPTIONS AGAINST THE ASSESSEE AND MAKING THE ADDITION OF RS.9,00,000/-. THE HON'BLE JURISDICTIONAL HIGH COURT, FURTHER, POINTED OUT THAT THE ONUS WAS UPON THE ASSESSEE, TO HAVE PRODUCED COGENT MATERIAL, TO REBU T THE PRESUMPTIONS, WHICH HE HAD FAILED TO DISPLACE. HOWEVER, IN THE PRESENT CASE, NO SUCH DOCUMENT, PERTAINING TO EARNING OF JOB WORK FROM JEWELLERY WAS DISCUSSED AND BROUGHT ON RECORD BY BOTH THE AO AND CIT(APPEALS). FURTHER, NO DECLARATION OF ANY AMOUNT, ON ACCOUNT O F JOB WORK HAS BEEN MADE BY THE ASSESSEE. NO DOCUMENTS W ERE BROUGHT BY LD. 'DR', ON RECORD SHOWING ANY SUCH TRANSACTIONS OF JOB WORK AND SIGNATURES OF THE ASSE SSEE THEREON. THEREFORE, THE PRESUMPTIONS AS CONTEMPLATED U/S 132(4)/132(4A) OF THE ACT CANNOT BE CONCEIVED IN SU CH A FACT-SITUATION OF THE PRESENT CASE. IN VIEW OF THI S, THE QUESTION OF APPLICABILITY OF SUCH STATUTORY PRESUMP TION DOES 9 NOT ARISE. THE CASE LAW RELIED UPON BY THE LD. 'DR' WAS BASED ON THE FOUNDATION OF TOTAL SALES OF RS.4,92,03,005/ - RECORDED IN THE DOCUMENTS FOUND IN THE COURSE OF SEARCH OPER ATION, AND A SURRENDER MADE BY THE ASSESSEE IN LIEU OF SUC H UNDISCLOSED SALE COMMISSIONS. IN THE PRESENT CASE, NO SUCH DOCUMENTS AND DETAILS PERTAINING TO THE ASSESSEES JOB WORK, WAS BROUGHT ON RECORD BY THE LD. 'DR'. LD. 'DR' ME CHANICALLY PLACED RELIANCE, ON THIS DECISION OF THE JURISDICTI ONAL HIGH COURT. NEEDLESS TO SAY THAT EACH CASE DEPENDS ON ITS OWN FACTS AND EVEN CLOSE SIMILARITY BETWEEN ONE AND ANO THER CASE IS NOT ENOUGH, BECAUSE EVEN A SINGLE SIGNIFICA NT DETAIL, MAY ALTER THE ENTIRE ASPECT AND COMPLEXION OF THE CASE. THE JUDICIAL PRECEDENTS SHOULD BE FOLLOWED, T O ADVANCE THE CAUSE OF JUSTICE AND NOT TO PERPETUATE INJUSTICE . IT IS PERTINENT TO STATE HERE THAT JUDICIAL PRECEDENT IS AN AUTHORITY FOR WHAT IT ACTUALLY DECI DES AND IT IS NOT AN AUTHORITY FOR ANY IMPLICATION, ASSUMPT ION, OR INFERENCE DERIVED FROM JUDGEMENT. LD. 'DR' MERELY ASSUMED APPLICATION OF THE DECISION OF THE JURISDIC TIONAL HIGH COURT, WITHOUT HAVING REGARD TO THE CORE ISSUE THAT FACTS AND CIRCUMSTANCES OF THE CASE CITED AND RELIE D UPON ARE NOT IN PARAMATERIA, IN ANY RESPECT VIS--VIS TH E FACTS OBTAINING IN THE PRESENT CASE. LD. 'DR' PLACED RELIANCE, ON THE DECISION OF THE SAID JURISDICTIONAL HIGH COURT, WITHOUT DISCUSSING, AS TO HOW THE FACT-SITUATION OF THE PRE SENT CASE FITS IN THE FACT-SITUATION OF THE DECISION, ON WHIC H RELIANCE IS PLACED. IN VIEW OF THIS, DECISION RELIED UPON BY L D. 'DR' IS NOT APPLICABLE TO THE FACT-SITUATION OF THE PRESENT CASE. 10 8. THE AO, IN THE PRESENT CASE MADE THE IMPUGNED ADDITION, ON THE FOUNDATION OF BARE HUSK OF THE STA TEMENT OF THE APPELLANT, MADE IN THE COURSE OF SEARCH OPERATI ON, WITHOUT THERE BEING ANY MATERIAL FOR ITS COLLABORAT ION. A BARE READING OF THE SAID DEPOSITION OF THE APPELLAN T, REVEALS THAT THE APPELLANT HE HAS NOT STATED THAT HE EARNED INCOME FROM JOB WORK DURING THE EARLIER ASSTT. YEARS, INCL UDING THE ASSTT. YEAR IN QUESTION. THE REVENUE HAS FAILED TO DEMONSTRATE, BY WAY OF ANY MATERIAL, BROUGHT ON REC ORD, THAT THE ASSESSEE APPELLANT HAD EARNED JOB WORK, FO R THE ASSTT. YEAR IN QUESTION. 8(I) THE GENERAL RULE IS THAT ONUS OF PROOF IS AL WAYS ON THE PARTY, WHO ASSERTS A PROPOSITION OR FACT, WHICH IS NOT SELF- EVIDENT. IN THE PRESENT CASE, THE AO PRESUMES AND A SSERTS THAT THE APPELLANT HAS EARNED INCOME, FROM JOB WORK , THEREFORE, ONUS LIES UPON HIM, TO PROVE THE SAME, B Y BRINGING RELEVANT CORROBORATIVE AND CREDIBLE MATERIAL, ON RE CORD, BEFORE MAKING THE IMPUGNED ADDITION. THE ASSESSEE APPELLANT HAS NOT MADE ANY SURRENDER, IN RESPECT OF INCOME FROM JOB WORK AND NO DOCUMENT HAS BEEN ADDUCED BY T HE REVENUE, TO SUPPORT ITS FINDING THAT ASSESSEE HAS E ARNED INCOME FROM JOB WORK, IN THE PAST ASSTT. YEARS. 9. IT IS CATEGORICALLY HELD BY THE HON'BLE APEX COU RT IN A PLETHORA OF DECISIONS, THAT IT IS A WELL SETTLED PR INCIPLE OF LAW THAT REVENUE CANNOT DECIDE, AN ISSUE, WITHOUT PROPE R FACTS 11 AND LAW, SUPPORTING ITS DECISION. A DECISION BASED ON MERE SURMISES, GUESS WORK OR CONJECTURES OR IRRELEVANT M ATERIAL AND EVIDENCE IS LIABLE TO BE QUASHED. THE HON'BLE A PEX COURT, IN PLETHORA OF DECISIONS HAS OFTEN FROWNED U PON THE TENDENCY OF ASSESSING OFFICERS, TO FRAME ASSESSMENT ORDERS OR MAKE ADDITIONS PURELY ON SURMISES. IN THE PRESE NT CASE, A BARE PERUSAL OF THE FINDING OF THE AO AND THE CIT (APPEALS), AS REPRODUCED ABOVE, CLEARLY REVEALS THAT NO MATERI AL HAS BEEN BROUGHT ON RECORD, TO SUPPORT THE IMPUGNED ADD ITIONS. THE AO AS WELL AS CIT(APPEALS), BEING QUASI-JUDICIA L AUTHORITY MUST NOT BASE THEIR FINDINGS, ON NO-MATER IAL OR NO-EVIDENCE. THIS IS A FUNDAMENTAL RULE OF JUSTICE AND ESTABLISHED LEGAL PROPOSITION THAT THERE MAY BE SOM ETHING MORE THAN BARE SUSPICION, TO SUPPORT THE FINDINGS, IN THE ASSESSMENT ORDER, AS HELD BY THE HON'BLE SUPREME CO URT, IN THE CASE OF DHEERAJ LAL GIRDHARI LAL V CIT (1954) 2 6 ITR 736; OMAR SALAY MD. SHEIKH V CIT (1959) 37 ITR 151 (S.C) , DHAKESHWARI COTTON MILLS LTD. V CIT (1954) 26 ITR 7 75 (S.C); LAL CHAND BHAGAT AMBIKA V CIT (1959) 37 ITR 288 (S. C). IN THE PRESENT CASE, AO HAD NOT MADE ANY ENQUIRY EXCEP T QUOTING QUESTION NO.10 AND REPLY THERETO. THE AO, FURTHER, FAILED, TO BRING ANY MATERIAL ON RECORD, EVEN PRIMA -FACIE TO SUGGEST EARNING OF INCOME FROM JOB WORK, BY THE APP ELLANT. THEREFORE, THE AO, BEING QUASI-JUDICIAL AUTHORITY I S NOT COMPETENT, TO DRAW INFERENCES IN VACUUM, WITHOUT T HE BASE 12 OF FOUNDATIONAL MATERIAL, EVIDENCE AND RELEVANT PRO VISIONS, AS HAS BEEN DONE, IN THE PRESENT CASE. THE AO IS R EQUIRED TO ACT IN A JUDICIAL MANNER WHILE FRAMING ASSTT. ORDER . 10. IT IS ALSO A WELL SETTLED PROPOSITION THAT THE AO IS NOT COMPETENT, EVEN TO MAKE ANY ESTIMATE OF INCOME OR A DDITION, WITHOUT THE FULCRUM OF RELEVANT, AND CREDIBLE MATER IAL, TO SUPPORT SUCH ESTIMATION OR ADDITION OR ANY FINDINGS . THE HON'BLE SUPREME COURT, IN THE CASE OF COMMISSIONER OF SALES TAX, (M.P). V H.M.ESUFALI H.M. ABDULALI 90 ITR 271 (S.C) HAS HELD THAT NO ADDITION CAN BE MADE WITHOUT THERE BEI NG ANY RATIONAL AND REASONABLE BASIS FOR SUCH ADDITION. IT IS, FURTHER, HELD THAT AUTHORITY, WHILE MAKING THE BEST JUDGEMENT ASSESSMENT, SHOULD ARRIVE AT HIS CONCLUSI ONS WITHOUT ANY BIAS AND ON RATIONAL BASIS. THE R ELEVANT AND OPERATIVE PART OF THE DECISION IS REPRODUCED HEREUN DER, FOR THE PURPOSE OF ITS PROPER APPRECIATION: HELD THAT THE RE-ASSESSMENTS WERE VALID. FROM THE CIRCUMSTANCE THAT THE ASSESSEE HAD DEALINGS OUTSIDE THE ACCOUNTS OF THE VALUE OF RS.31,171.28 FOR 19 DAYS, IT WAS OPEN TO THE OFFICE R TO INFER THAT THE ASSESSEE HAD LARGE-SCALE DEALINGS OUTSIDE THE A CCOUNTS. IN SUCH A SITUATION, IT WAS NOT POSSIBLE FOR THE OFFIC ER TO FIND OUT PRECISELY THE TURNOVER SUPPRESSED AND HE COULD ONLY MAKE AN ESTIMATE OF THE SUPPRESSED TURNOVER ON THE BASIS OF THE MATERIAL BEFORE HIM. SO LONG AS THE ESTIMATE MADE BY HIM WAS NOT ARBITRARY AND HAD A REASONABLE NEXUS WITH THE FACTS DISCOVERE D, IT COULD NOT BE QUESTIONED. IT WAS WRONG TO HOLD THAT THE OFFIC ER MUST HAVE MATERIAL BEFORE HIM TO PROVE THE EXACT TURNOVER SUP PRESSED. IN ESTIMATING ANY ESCAPED TURNOVER, IT IS INEVITABLE THAT THERE IS SOME GUESS-WORK. THE ASSESSING AUTHORITY WHILE MAK ING THE BEST JUDGMENT ASSESSMENT, NO DOUBT, SHOULD ARRIVE AT HIS CONCLUSION WITHOUT ANY BIAS AND ON A RATIONAL BASIS. THAT AUTH ORITY SHOULD NOT BE VINDICTIVE OR CAPRICIOUS. IF THE ESTIMATE MA DE BY THE ASSESSING AUTHORITY IS A BONA FIDE ESTIMATE AND IS BASED ON A RATIONAL BASIS, THE FACT THAT THERE IS NO GOOD PROO F IN SUPPORT OF THAT ESTIMATE IS IMMATERIAL. PRIMA FACIE, THE ASSES SING AUTHORITY IS THE BEST JUDGE OF THE SITUATION. IT IS HIS BEST JUDGMENT AND NOT ANY ONE ELSES. THE HIGH COURT CANNOT SUBSTITUTE IT S BEST JUDGMENT FOR THAT OF THE ASSESSING AUTHORITY. 13 11. FURTHER, BOTH THE TEXT AND THE SCHEME OF THE AC T, DOES NOT CONTEMPLATE THAT THE AO CAN MAKE ADDITION WITHO UT BRINGING ANY RELEVANT AND COGENT MATERIAL ON RECORD . THE ASSESSMENT TO BE MADE BY THE AO U/S 143(3), U/S 147 READ WITH 148, U/S 153A OF THE ACT OR UNDER THE REPEALED PROVISIONS OF SECTION 158BC OF THE ACT, IS REQUIRED TO BE SUPPORTED BY RELEVANT EVIDENCE OR MATERIAL. UNDER THE SCHEME OF ACT, THE ASSESSEE IS STATUTORILY REQUIRED , TO SUPPORT HIS RETURN OF INCOME OR CONTENTIONS, BY ADD UCING EVIDENCE AND THE AO IS REQUIRED TO MAKE ADDITION, O N THE BASIS OF RELEVANT MATERIAL OR EVIDENCE ON RECORD, W HETHER DIRECT OR CIRCUMSTANTIAL. NO ADDITION CAN BE MADE UNDER THE SCHEME OF INCOME-TAX ACT BY THE AO, PURELY ON THE B ASIS OF SURMISES OR CONJECTURES OR AS A MATTER POLICY. IN T HE PRESENT CASE, THE APPELLANT DECLARED INCOME IN THE STATEMEN T RECORDED ON 30.08.2007 U/S 132(4) OF THE ACT. THE DECLARATION OF INCOME IN THE STATEMENT, RECORDED, O N 30.08.2007, FOR THE ASSTT. YEAR 2008-09 IS MADE AS UNDER: STATEMENT U/S 132(4) OF THE I.T.ACT. 1961 STATEMENT ON OATH OF SH. NARESH KUMAR VERMA 30.08.2007 U/S 132(4) OF THE INCOME ACT, 1961 I HAVE BEEN ADMINISTERED THE OATH BY SHRI K.S.BAINS , DDJT(INV.), PATIALA THAT 1 SHALL SPEAK THE TRUTH AND NOTHING BUT THE TRUTH. I HAVE F URTHER BEEN MADE AWARE OF THE FACT THAT ANY FAKE OR UNTRUE STATEMENT GIVEN BY ME HEREU NDER SHALL MAKE ME LIABLE TO PROSECUTION UNDER THE INDIAN PENAL CODE AND UNDER T HE INCOME TAX ACT, 1961. FOLLOWING IS BEING STATED BY ME ON OATH. OATH TAKEN OATH ADMINISTERED (SD/-) (SD /-) 30.8.07 (NARESH KUMAR VERMA) (K.S. BAINS) Q. 1 PLEASE IDENTIFY YOUR SELF. ANS: I AM SH. NARESH KUMAR VERMA S/O. OF SH. RAM SARUP VERMA R/O HOUSE NO. 94A, GURU NANAK COLONY, RAJPURA. S/O SH. RAM SARUP VERMA ON 14 Q.2 IN YOUR CONCLUDING STATEMENT RECORDED DURIN G THE COURSE OF SEARCH U/S 132 OF THE I.T. ACT, AT YOUR RESIDENTIAL HOUSE NO.94A, GUR U NANAK COLONY, RAJPURA ON 07.08.2007 YOU HAD SURRENDERED RS.22,00,000/- IN YO UR HAND FOR THE FINANCIAL YEAR 2007-08 RELEVANT TO ASSTT. YEAR 2008-09 IN ADD ITION TO THE SURRENDER MADE BY YOUR FAMILY MEMBERS AS PER DETAIL GIVEN BELOW: - 1. SML. USHA RANI W/O SH. NARESH KUMAR VERMA RS.2.5 LACS FOR A.Y.08-09 2. SH. NEERAV S/O SH. NARESH KUMAR VERMA RS.2.5 LACS FOR A.Y.08-09 3 RAJ DULARI VERMA W/O SH. RAM SARUP VERMA RS .3 LACS FOR A. Y. 08.09 ( MOTHER OF SH. NARESH KUMAR VERMA.) PLEASE GIVE THE BIFURCATION OF SURRENDER OF RS.22 L ACS I.E. ON WHAT ACCOUNT YOU HAVE SURRENDERED THIS AMOUNT AND HOW THIS INCOME HA S BEEN DERIVED BY YOU ? ANS. I ADMIT THAT I HAVE SURRENDER OF RS.22 LACS FOR THE A.Y. 2008-09 AS PER DETAIL GIVEN BELOW:- I ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE CONSTRU CTION OF HOUSE AT PLOT NO. 94A, GURU NANAK COLONY, RAJPURA RS. 16,00,000/- 11 ON ACCOUNT OF U NEXPLAINED CASH FOUND FROM THE RESIDENCE DURING THE COURSE OF SEARCH. RS.2,00,000/- III ON ACCOUNT OF UNEXPLAINED JEWELLERY FOUND FROM THE RESIDENCE DURING THE COURSE OF SEARCH. RS.4,00,000/- TOTAL SURRENDER U/S 132(4) RS.22,00,000/- THIS INCOME OF RS.22 LACS HAS BEEN DERIVED FROM BUS INESS TRANSACTION NOT RECORDED IN THE REGULAR BOOKS OF AC COUNT. R.O.& A.C. SD/- 30.8.07 12. IT IS EVIDENT FROM THE ABOVE DECLARATION, THAT NO SURRENDER HAS BEEN MADE BY THE APPELLANT IN RESPECT OF THE ALLEGED INCOME FROM JOB WORK. 13. THE LD. 'DR' CARRIED THE BENCH THROUGH THE TEX T OF SECTION 132(4) AND 132(4A) OF THE ACT, WITH A VIEW TO DEMONSTRATING THE APPLICABILITY OF STATUTORY PRESUM PTIONS TO THE FACTS OF THE PRESENT CASE. HOWEVER, THE LD. 'D R' FAILED TO APPRECIATE THAT LEGAL REBUTTABLE PRESUMPTIONS U/S 1 32(4A) OF THE ACT ARE APPLICABLE ONLY TO THE FACTS OF ANY CAS E, WHERE THRESHOLD STATUTORY CONDITIONS OF SUCH PROVISIONS A RE SATISFIED. IN THE PRESENT CASE, THE LD. 'DR' SOUGHT TO APPLY THE STATUTORY PRESUMPTIONS, AS CONTEMPLATED U/S 132 (4A) OF 15 THE ACT, TO THE FACTS OF THE PRESENT CASE, WITHOUT ESTABLISHING THE FACTUM THAT THE APPELLANT WAS FOUN D IN POSSESSION OR CONTROL OF ANY BOOKS OF ACCOUNT, OTHE R DOCUMENTS, MONEY, BULLION, JEWELLERY OR OTHER VALUA BLE ARTICLE OR THING ETC. IN THIS SPECIFIC CONTEXT, IT IS INCONCEIVABLE AND INCOMPREHENSIBLE, AS TO HOW THE PROVISIONS OF SECTION 132(4A) OF THE ACT ARE APPLIC ABLE TO THE FACTS OF THE CASE, WITHOUT SHOWING SATISFACTION OF THE STATUTORY CONDITIONS PRECEDENT CONTAINED THEREIN. 13(I) THE ISSUE OF APPLICABILITY OF LEGAL PRESUMPT ION U/S 132(4A) OF THE ACT NEEDS ELABORATION. THERE WAS CON TROVERSY ON THE ISSUE AS TO WHETHER PRESUMPTION U/S 132(4A) IS APPLICABLE ONLY IN THE SITUATIONS COVERED U/S 132 O F THE ACT PARTICULARLY, WITH RESPECT TO SUMMARY ASSESSMENT AS CONTEMPLATED UNDER ERSTWHILE SUB-SECTION (5) OF SEC TION 132 OR IT EXTENDS TO REGULAR ASSESSMENT ALSO. THE HON'B LE SUPREME COURT, IN THE CASE OF P.R.METRANI V CIT (20 06) 287 ITR 209 (S.C) HELD THE PRESUMPTION U/S 132(4A) OF T HE ACT IS NOT AVAILABLE TO AUTHORITIES WHILE FRAMING REGULAR ASSESSMENT. THE WORDS IN SUB - SECTION (4A) OF SECTION 132 OF THE ACT ARE MAY BE PRESUMED. THEREFORE, PRESUMPTIONS U/S 132(4A) OF THE ACT ARE REBUTTABLE PRESUMPTIONS. THE LD. 'DR' PLACED RELIANCE ON THE DECISION OF THE HON'BLE KARNATAKA HIGH COURT IN CIT V P.R.ME TRANI (HUF) (2001) 251 ITR 244 (KAR.). HOWEVER, THE HON'B LE SUPREME COURT IN P.R.METRANI V CIT (2006) 287 ITR 2 09 (S.C) REVERSED THE SAID DECISION OF THE HON'BLE KAR NATAKA HIGH COURT AND APPROVED THE DECISION OF THE HON'BLE 16 ALLAHABAD HIGH COURT IN PUSHKAR NARAIN SARRAF V CIT (1990) 183 ITR 388 (ALL.). SUCH INTERPRETATION PLACED BY T HE HON'BLE APEX COURT, IN THIS DECISION, ON THE APPLICABILITY OF THE PRESUMPTION U/S 132(4A) OF THE ACT LED TO INSERTION OF SECTION 292C, WITH RETROSPECTIVE EFFECT FROM 1.10.1 975 I.E. FROM THE INCEPTION OF SUB-SECTION 132(4A) OF THE AC T. INSERTION OF SECTION 292C OF THE ACT, WITH RETROSPE CTIVE EFFECT MAKES IT CLEAR THAT PRESUMPTIONS PRESCRIBED U/S 132 (4A) OF THE ACT WOULD ALWAYS BE AVAILABLE EVEN IN REGULAR ASSESSMENT. FURTHER, ADDITION OF THE WORDS IN ANY PROCEEDING UNDER THIS ACT IN SECTION 292C LEAVES NO SCOPE FOR ANY CONFUSION ON THE ISSUE AND THE LEGISL ATIVE INTENT WAS MADE AMPLY CLEAR. THE OBJECT OF MAKING THE PRESUMPTIONS AVAILABLE TO INCOME TAX AUTHORITIES, A S TO THE BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ASSETS FOUND D URING THE COURSE OF SEARCH BELONGING TO THE PERSON FROM W HOSE POSSESSION OR CONTROL, THE SAME HAVE BEEN FOUND, TO MAKE THE PERSON TO OWN SUCH BOOKS OF ACCOUNT, OTHER DOCU MENTS OR ASSETS, SO AS TO REQUIRE HIM, TO EXPLAIN THE NAT URE AND ASSETS OF SUCH MATERIAL FOUND FROM HIS POSSESSION. THE OBJECT IS TO PLACE THE BURDEN, ON THE ASSESSEE, SO THAT HE MAY NOT BE PERMITTED TO TAKE THE PLEA WITHOUT COGEN T EVIDENCE THAT SUCH MATERIAL DOES NOT BELONG TO HIM OR HE DOES NOT KNOW HOW SUCH MATERIAL HAS COME INTO HIS POSSESSION OR CONTENTS THEREOF ARE INCORRECT. SUCH PRESUMPTIONS ARE IN LINE WITH THE PRINCIPLE CONTEMP LATED UNDER INDIAN EVIDENCE ACT. AS PER SECTION 110 OF IN DIAN EVIDENCE ACT, 1872, BURDEN OF PROOF, AS TO THE ACTU AL 17 OWNERSHIP OF THINGS, LIES ON THE PERSON FROM WHOSE CUSTODY IT WAS FOUND. THIS IS THE PHILOSOPHY AND OBJECT OF INSERTION OF THE NEW SECTION 292C OF THE ACT. IN THIS LEGISL ATIVE BACKGROUND, LD. 'DR' HAS FAILED TO SHOW AS TO HOW S UCH STATUTORY PRESUMPTIONS ARE APPLICABLE TO THE FACTS OF THE PRESENT CASE. A MERE REFERENCE TO THE PROVISIONS OF SECTION 132(4) READ WITH 132(4A) OF THE ACT, HARDLY SERVE A NY PURPOSE. THEREFORE, THE APPLICABILITY OF THE PROVI SIONS OF SECTION 132(4A) READ WITH SECTION 292C OF THE ACT, AS SOUGHT BY THE LD. 'DR', IS NOT FACTUALLY AND STATUTORILY T ENABLE. 14. IN THIS CASE, SEARCH & SEIZURE OPERATION WAS CONDUCTED, ON 07.08.2007 U/S 132 OF THE ACT. IN THE PRESENT CASE, THE ASSESSEE APPELLANT HAS NOT ADMITT ED ANY CONCEALED INCOME OR MADE ANY DECLARATION, IN RESPECT OF THE PAST ASSESSMENT YEARS, INCLUDING THE ASSTT. YEAR UNDER REFERENCE. HAVING REGARD TO THE A BOVE LEGAL AND FACTUAL DISCUSSIONS AND CONSIDERING THE SCHEME OF THE ACT, PERTAINING, TO THE FRAMING REGUL AR ASSESSMENT OR RE-ASSESSMENT AND ASSESSMENTS IN CASE OF SEARCH CASES, IT IS EVIDENT THAT NO ADDITION CAN BE MADE BY THE AO MERELY ON THE BASIS OF SUBJECTIVITY AND ARBITRARINESS. THE ADDITIONS OR DELETIONS ARE REQUI RED TO BE BASED ON THE FUNDAMENTAL FACTS, RELEVANT AND CREDIBLE MATERIAL AND RELEVANT PROVISIONS OF THE AC T. 14(I) TO SUM-UP THE ISSUE OF IMPUGNED ADDITION, I T IS EVIDENT FROM THE FOREGOING DETAILED DISCUSSIONS THA T THE AO ACTED WITHOUT MATERIAL OR EVIDENCE IN MAKING SUC H 18 ADDITION. SIMILARLY, THE CIT(APPEALS) ENDORSED THE FINDINGS OF THE AO, IN A PERFUNCTORY MANNER, DISREGARDING ONE OF THE VITAL FACETS OF THE CONCEPT OF NATURAL JUSTICE, EMBEDDED IN PASSING THE SPEAKING ORDER. THE IMPUGNED ADDITION HAS BEEN MADE BY THE AO AND SUBSEQUENTLY UPHELD BY THE CIT(APPEALS), MERELY ON THE BASIS OF PRESUMPTIONS. IN FRAMING ASSESSMENT, RE- ASSESSMENT OR ASSTT. IN SEARCH CASES, AS CONTEMPLAT ED UNDER THE RELEVANT PROVISIONS OF THE ACT, THE AO IS COMPETENT TO ACT ON WHAT IS TECHNICALLY DESCRIBED A S EVIDENCE IN THE INDIAN EVIDENCE ACT AND ALSO UNDE R SECTION 142 AND 143 OF THE ACT, ON THE MATERIAL GATHERED BY HIM. THE AO, BEING QUASI-JUDICIAL AUTHORITY, CANNOT MAKE ADDITION, BEING EXPEDIENT, A S A MATTER OF POLICY OR ON THE BASIS OF ASSUMED AND NON - EXISTENT MATERIAL. THE AO ADOPTED SUCH APPROACH IN THE PRESENT CASE, AS NO PLAUSIBLE AND CREDIBLE MATERIAL OR EVIDENCE HAS BEEN INDICATED IN THE ASSTT. ORDER, WH ILE MAKING THE IMPUGNED ADDITION. IN VIEW OF THIS, THE ASSTT. ORDER MUST BE SPEAKING ORDER I.E. IT MUST DI SCLOSE THE BASIS AND THE CORROBORATIVE MATERIAL FOR MAKING THE ADDITION. THE ADDITION CANNOT BE BASED, ON BARE PRESUMPTION BUT ON THE LEGITIMATE MATERIAL FROM WHI CH A REASONABLE AND NATURAL INFERENCE, FOR MAKING ADDITI ON FLOWS AND THE INITIAL BURDEN FOR FINDING AND BRINGI NG SUCH MATERIAL ON RECORD, HOWEVER SLIGHT, IS ON THE REVENUE AUTHORITY. THE AO IS NOT ENTITLED TO MAKE A GUESS, WITHOUT EVIDENCE, AS IT WOULD CERTAINLY BE A LEAP 19 IN THE DARK. IN VIEW OF THE ABOVE LEGAL AND FACTUA L DISCUSSIONS AND HAVING REGARD TO THE JUDICIAL PRECE DENTS REFERRED TO IN THIS ORDER, WE DONT FIND ANY SUBSTA NCE AND MERIT IN THE FINDINGS OF CIT(APPEALS), IN UPHOL DING THE IMPUGNED ADDITION. HENCE, THE FINDINGS OF THE CIT(APPEALS), IN THE MATER, CANNOT BE UPHELD. THE SAME ARE SET ASIDE. THUS, FIRST TWO GROUNDS OF APPEAL, RAISED BY THE APPELLANT ARE ALLOWED. 15. IN GROUND NO. 3, APPELLANT CONTENDED THAT CIT(APPEALS) ERRED IN CONFIRMING ADDITION OF RS.59, 193/- ON ACCOUNT OF HOUSEHOLD EXPENSES AGAINST THE ADDITI ON OF RS.86,193/-, AS MADE BY THE AO. LD. 'AR' CONTEN DED THAT ADDITION HAS BEEN MADE BY AO AND UPHELD BY CIT(APPEALS), WITHOUT THERE BEING ANY MATERIAL ON R ECORD TO SUPPORT SUCH ADDITION. IT IS CARDINAL PRINCIPLE OF JUSTICE THAT NO ADDITION CAN BE MADE WITHOUT THERE BEING FUNDAMENTAL SUPPORT OF CORROBORATIVE EVIDENCE. 16. LD. 'DR' SUPPORTED FINDINGS OF LOWER AUTHORITIE S. THE AO NOTICED THAT ASSESSEE WAS FOUND TO BE ENJOYING A LAVISH LIFE-STYLE EVIDENCED BY LUXURY ITEMS, THREE ACS, 4 GEYSERS, ONE SANTRO CAR IN HIS HOUSE AND ASSESSEE DID NOT FI LE COPIES OF BILLS FOR ELECTRICITY. THE AO, FURTHER, OBSERVE D THAT ASSESSEE'S CHILDREN WERE STUDYING IN CONVENT SCHOOL AND HAVING REGARD TO SUCH FACTORS. THE AO ESTIMATED HO USEHOLD EXPENSES AT RS.1.50 LACS WHICH LED TO AN ADDITION O F RS.86,193/-. THE FINDINGS OF THE CIT(APPEALS), ON THE ISSUE IN QUESTION ARE CONTAINED IN PARA 10, WHICH ARE REP RODUCED 20 HEREUNDER : 10. I HAVE CONSIDERED THE BASIS OF ADDITION MADE B Y THE AO AND THE SUBMISSIONS OF THE AR ON THE ISSUE. IT IS SEEN THAT THE AO HAS PROJECTED A LAVISH LIFE STYLE OF THE APPELLANT ON THE BASIS O F HOUSE HOLD GOODS LIKE AIR CONDITIONERS/GEYSERS AND ORDINARY CAR LIKE SANTRO. THE CONCLUSION OF THE AO BASED UPON THIS FLAWED PROJECTION IS THEREFORE ERRO NEOUS TO THAT EXTENT. IT IS ALSO SEEN THAT THE CONTRIBUTION MADE BY OTHER MEMBE RS OF THE FAMILY TO THE TUNE OF RS. 27,000/- HAS NOT BEEN TAKEN INTO CONSID ERATION. THE AO'S ESTIMATION OF HIS EXPENSES @ RS. 15.000/- PER MONTH IS NOT ON THE HIGHER SIDE ESPECIALLY WHEN THE EXPENSES ON THE OPERATION OF ATLEAST TWO A IR CONDITIONERS ON DAILY BASIS FOR ABOUT A PERIOD OF 5 TO 6 MONTHS (SUMMERS) WOULD ITSELF INVOLVED EXPENDITURE OF RS. 3,000/- PER MONTH. THE ASSESSEE HAS ALSO NOT PRODUCED ANY EVIDENCE IN THE FORM OF ELECTRICITY BILLS EVEN FOR THE YEAR 2007-08 TO PROVE HIS CLAIM THAT THE AIR CONDITIONERS WERE BEIN G USED FOR A PERIOD OF TWO MONTHS. IN THE CIRCUMSTANCES THE OVER ALL ESTIM ATION BY THE AO AT RS. 15,000/- IS FAIR AND REASONABLE, HOWEVER THE CO NTRIBUTION BY THE OTHER MEMBERS OF THE FAMILY TO THE TUNE OF RS.27,000/- HA S TO BE ACCOUNTED FOR BEFORE WORKING OUT THE ADDITION ON ISSUE. AS SUCH O UT OF TOTAL ADDITION OF RS. 86,193, AN AMOUNT OF 59,193/- IS CONFIRMED. 17. LD. CIT(APPEALS) UPHELD THE ESTIMATION MADE BY THE AO BEING FAIR AND REASONABLE. HOWEVER, CONTRIBUTION M ADE BY OTHER MEMBERS OF THE FAMILY, TO THE TUNE OF RS.27,0 00/- WAS CONSIDERED IN THE MATTER, AS SUCH OUT OF TOTAL ADDI TION OF RS.86,193/-, AN AMOUNT OF RS.59,193/- IS CONFIRMED. 18. WE HAVE HEARD THE RIVAL SUBMISSIONS, FACTS OF T HE CASE AND THE RELEVANT RECORDS AND FOUND THE FINDINGS OF CIT(APPEALS), IN THE MATTER, AS NOT SUFFERING FROM ANY INFIRMITY. HENCE, THE GROUND OF APPEAL IS DISMISSE D. 19. LD. 'AR' STATED THAT GROUND NOS. 4, 5 & 6 ARE G ENERAL IN NATURE. IN VIEW OF SUCH ASSERTIONS, THESE GROUN DS OF APPEAL ARE DISMISSED. 20. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO.802/CHD/2012 IS PARTLY ALLOWED. 21 21. ITA NO.803/CHD/2012 (A.Y. 2004-05) THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. THAT THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 60,000/- ON ACCOUNT OF CERTAIN ALLEGED JOB WORK ON THE BASIS OF STATEMENT RECORDED DURING THE COURSE OF SEARCH ON 7 .8.2007. 2. THAT NOTWITHSTANDING THE ABOVE SAID FACTS, THE YEAR INVOLVED BEING FINANCIAL YEAR 2003-04, NO PRESUMPTION COULD BE DRAWN IN RESPECT OF ALLEGED JOB WORK CARRIED OUT IN FINANCIAL YEAR 2 003-04. 3. THAT THE LD. CIT (A) HAS ERRED IN CONFIRMING TH E ADDITION OF RS. 76,500/- ON ACCOUNT OF HOUSEHOLD EXPENSES AGAINST T HE ADDITION OF RS. 1,08,000/- AS MADE BY THE ASSESSING OFFICER. 4. THAT THE CIT (A) HAS ALSO ERRED IN CONFIRMING T HE ADDITION OF RS. 11,435/- ON ACCOUNT OF ALLEGED UNEXPLAINED SELF ASS ESSMENT TAX. 5. THAT NOTWITHSTANDING THE ABOVE GROUNDS OF APPEA L, THE LD. CIT (A) WAS NOT JUSTIFIED IN UPHOLDING ADDITIONS IN THE ASS ESSMENT FRAMED U/S 153A SINCE NO MATERIAL WAS FOUND DURING SEARCH LEADING T O VARIOUS ADDITIONS MADE DURING THE ASSESSMENT PROCEEDINGS. 6. THAT THE ADDITION IN THE AFORESAID PARAS HAS BE EN MADE AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE AND SUBMISSIONS MADE BY US HAS NOT BEEN CONSIDERED PROPERLY. 7. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL BEFORE THE APPEAL IS FINALLY HEARD OR DISPOS ED OFF. 22. IN GROUND NO. 1 & 2, THE APPELLANT CHALLENGED CONFIRMATION OF ADDITION BY CIT(APPEALS), IN RESPEC T OF ADDITION OF RS.60,000/-, ON ACCOUNT OF ALLEGED JOB WORK, ON THE BASIS OF STATEMENT RECORDED ON 7.8.2007, IN THE COURSE OF SEARCH OPERATIONS. LD. 'AR', IN THE COURSE OF P RESENT APPELLATE PROCEEDINGS STATED, AS INDICATED EARLIER THAT THE SUBMISSIONS FILED IN ITA 802/CHD/2012 ARE APPLICABL E TO ALL APPEALS BEARING ITA NOS. 803 TO 806 & 818/CHD/2012, AS THE ISSUES INVOLVED IN THESE TWO GROUNDS OF APPEAL, ARE IDENTICAL EXCEPT VARIATION IN AMOUNT OF JOB WORK. THEREFORE, 22 FINDINGS OF THE BENCH, RECORDED IN ITA 802/CHD/2012 , FOR THE ASSESSMENT YEAR 2002-03, ARE ALSO APPLICABLE TO THESE GROUNDS OF APPEAL. ACCORDINGLY, GROUNDS OF APPEAL NO. 1 & 2 OF THIS APPEAL ARE ALLOWED. 23. IN GROUND NO.3, APPELLANT CONTENDED THAT CIT(AP PEALS) ERRED IN CONFIRMING THE ADDITION OF RS.76,500/- ON ACCOUNT OF HOUSEHOLD EXPENSES AS AGAINST THE ADDITION OF RS.1,08,000/-. 23(I) WE HAVE HEARD THE RIVAL SUBMISSIONS, FACTS OF THE CASE AND THE RELEVANT RECORDS. IT IS PERTINENT TO REPROD UCE THE FINDINGS OF LD. CIT(APPEALS), AS CONTAINED IN PARA 7 OF THE ORDER, AS UNDER: 7, I HAVE CONSIDERED THE BASIS OF ADDITION MADE BY THE AO AND THE SUBMISSIONS OF THE AR ON THE ISSUE. IT IS SEEN THAT THE AO HAS PROJECTED A LAVISH LIFE STYLE OF THE APPELLANT ON T HE BASIS OF HOUSE HOLD GOODS LIKE AIR CONDITIONERS/GEYSERS AND ORDINARY CA R LIKE SANTRO. THE CONCLUSION OF THE AO BASED UPON THIS FLAWED PROJECT ION IS THEREFORE ERRONEOUS TO THAT EXTENT. IT IS ALSO SEEN THAT THE CONTRIBUTION MADE BY HIS FATHER TO THE TUNE OF RS. 31,500/- HAS NOT BEEN TAKEN INTO CONSIDERATION. THE AO'S ESTIMATION OF HIS EXPENSES @ RS. 12,500/- PER MONTH IS NOT ON THE HIGHER SIDE ESPECIALLY WHEN THE EXPENSES ON THE OPERATION OF ATLEAST TWO AIR CONDITIONERS ON DAILY BASIS FOR ABOUT A PERIOD OF 5 TO 6 MONTHS (SUMMERS) WOULD ITSELF INVO LVED EXPENDITURE OF RS. 2500/- PER MONTH. THE ASSESSEE HAS ALSO NOT PRODUCED ANY EVIDENCE IN THE FORM OF ELECTRICITY BILLS EVEN FOR THE YEAR 2007-08 TO PROVE HIS CLAIM THAT THE AIR CONDITIONERS WERE BEIN G USED A PERIOD OF TWO MONTHS. IN THE CIRCUMSTANCES THE OVER ALL ESTIM ATION BY THE AO AT RS, 1,50,000/- IS FAIR AND REASONABLE, HOWEVER THE CONTRIBUTION BY THE FATHER/WIFE OF THE ASSESSEE TO THE TUNE OF RS. 31,5 00/- HAS TO BE .ACCOUNTED FOR BEFORE WORKING OUT THE ADDITION ON T HIS ISSUE. AS SUCH OUT OF TOTAL OF RS. 1,08,000/- AN AMOUNT OF RS. 76, 500/- IS CONFIRMED. 23(II) HAVING REGARD TO THE FACT-SITUATION OF THE ISSUE & FINDINGS OF THE LOWER AUTHORITY, AS ALSO THE RELEVA NT RECORDS, WE DONT FIND ANY INFIRMITY IN THE FINDINGS OF CIT( APPEALS), IN 23 THE MATTER, BEING FAIR AND REASONABLE. THEREFORE, T HE SAME ARE UPHELD AND GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED. 24. GROUND NO. 4, RAISED BY THE ASSESSEE IS NOT PRE SSED, HENCE, THE SAME IS DISMISSED. 25. LD. 'AR' STATED THAT GROUND NOS. 5, 6 AND 7 ARE GENERAL IN NATURE AND NEED NO ADJUDICATION. ACCORDINGLY, G ROUND NOS. 5, 6 AND 7 ARE DISMISSED. 26. IN THE RESULT, APPEAL NO. 803/CHD/2012 IS PARTL Y ALLOWED. ITA NO. 804/CHD/2012 (A.Y.2005-06) 27. IN THIS APPEAL, THE ASSESSEE HAS RAISED FOLLOWI NG GROUNDS OF APPEAL : 1. THAT THE LEARNED CIT(A) HAS ERRED IN CONFIRMIN G THE ADDITION OF RS. 60,000/- ON ACCOUNT OF CERTAIN ALLEGED JOB WORK ON THE BASIS OF STATEMENT RECORDED DURING THE COURSE OF SEARCH ON 7.8.2007. 2. THAT NOTWITHSTANDING THE ABOVE SAID FACTS, THE YEAR INVOLVED BEING FINANCIAL YEAR 2004-05, NO PRESUMPTION COULD BE DRAWN IN RESP ECT OF ALLEGED JOB WORK CARRIED OUT IN FINANCIAL YEAR 2004-05. 3. THAT THE LD. CIT(APPEALS) HAS ERRED IN CONFIRMIN G THE ADDITION OF RS.76880/- ON ACCOUNT OF HOUSEHOLD EXPENSES AGAINS T THE ADDITION OF RS.1,30,000/- AS MADE BY THE THE BY AO. ( THE AMO UNT MAY BE READ AS RS.1,06,880/- AS POINTED OUT BY LD. 'AR' ). 4. THAT THE CIT(APPEALS) HAS ALSO ERRED IN CONFIRM ING THE ADDITION OF RS.82,000/- AND RS.95,000/- IN RESPECT OF GIFT RECE IVED FROM BROTHER-IN-LAW AND MOTHER RESPECTIVELY. 5 THAT THE CIT (A) HAS ERRED IN CONFIRMING THE ADDI TION OF DEPOSIT IN THE RD ACCOUNT TO THE TUNE OF RS. 12,000/-. 6. THAT NOTWITHSTANDING THE ABOVE GROUNDS OF APPEAL , THE LD. CIT (A) WAS NOT JUSTIFIED IN UPHOLDING ADDITIONS IN THE ASS ESSMENT FRAMED U/S 153A 24 SINCE NO MATERIAL WAS FOUND DURING SEARCH LEADING T O VARIOUS ADDITIONS MADE DURING THE ASSESSMENT PROCEEDINGS. 7. THAT THE ADDITION IN THE AFORESAID PARAS HAS BE EN MADE AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE AND SUBMISSIONS MADE BY US HAS NOT BEEN CONSIDERED PROPERLY 28. IN GROUND NO. 1 & 2, THE APPELLANT CHALLENGED CONFIRMATION OF ADDITION BY THE CIT(APPEALS) OF RS. 60,000/-, IN RESPECT OF JOB WORK, ON THE BASIS OF STATEMENT R ECORDED ON 7.8.2007 IN THE COURSE OF SEARCH OPERATIONS. LD. ' AR', IN THE COURSE OF PRESENT APPELLATE PROCEEDINGS STATED, AS INDICATED EARLIER THAT THE SUBMISSIONS FILED IN ITA 802/CHD/2 012 ARE APPLICABLE TO ALL APPEALS BEARING ITA NOS. 803 TO 8 06 & 818/CHD/2012, AS THE ISSUES INVOLVED, IN THESE TWO GROUNDS OF APPEAL, ARE IDENTICAL EXCEPT VARIATION IN AMOUNT OF JOB WORK. THEREFORE, FINDINGS OF THE BENCH, RECORDED I N ITA 802/CHD/2012 FOR THE ASSESSMENT YEAR 2002-03 ARE MUTATIS-MUTANDIS APPLICABLE TO THESE GROUNDS OF APP EAL. ACCORDINGLY, GROUNDS OF APPEAL NO. 1 & 2 ARE ALLOWE D. 29. IN GROUND NO.3, APPELLANT CONTENDED THAT CIT(AP PEALS) ERRED IN CONFIRMING THE ADDITION OF RS.76,880/- ON ACCOUNT OF HOUSEHOLD EXPENSES AS AGAINST THE ADDITION OF RS.1,30,000/-. 29(I) WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED AND CONSIDERED THE FACTS OF THE CASE AND THE RELEVANT R ECORDS. IT IS PERTINENT TO REPRODUCE HEREWITH THE FINDINGS OF LD. CIT(APPEALS), AS CONTAINED IN PARA 7 OF THE ORDER, AS UNDER: 7. I HAVE CONSIDERED THE BASIS OF ADDITION MADE BY THE AO AND THE SUBMISSIONS OF THE AR ON THE ISSUE. IT IS SEEN TH AT THE AO HAS PROJECTED A LAVISH LIFE STYLE OF THE APPELLANT ON T HE BASIS OF HOUSE HOLD 25 GOODS LIKE AIR CONDITIONERS/GEYSERS AND ORDINARY CA R LIKE SANTRO. THE CONCLUSION OF THE AO BASED UPON THIS FLAWED PROJECT ION IS THEREFORE ERRONEOUS TO THAT EXTENT. IT IS ALSO SEEN THAT THE CONTRIBUTION MADE BY HIS FATHER TO THE TUNE OF RS. 53,120/- HAS NOT BEEN TAKEN INTO CONSIDERATION. THE AO'S ESTIMATION OF HIS EXPENSES @ RS. 13,333/- PER MONTH IS NOT ON THE HIGHER SIDE ESPECIALLY WHEN THE EXPEN SES ON THE OPERATION OF ATLEAST TWO AIR CONDITIONERS ON DAILY BASIS FOR ABO UT A PERIOD OF 5 TO 6 MONTHS (SUMMERS) WOULD ITSELF INVOLVED EXPENDITURE OF RS. 3,000/- PER MONTH. THE ASSESSEE HAS ALSO NOT PRODUCED ANY EVIDE NCE IN THE FORM OF ELECTRICITY BILLS EVEN FOR THE YEAR 2007-08 TO PROV E HIS CLAIM THAT THE AIR CONDITIONERS WERE BEING USED A PERIOD OF ; MONTHS. IN THE CIRCUMSTANCES THE OVER ALL ESTIMATION BY THE AO AT RS. 1,60,000/- IS FAIR AND REASONABLE, HOWEVER THE CONTRIBUTION BY THE FATHER/WIFE OF THE ASSESSEE TO THE TUNE OF RS. 53,120/- HAS TO BE ACCOUNTED FOR BEFORE WORK ING OUT THE ADDITION ON THIS ISSUE. AS SUCH OUT OF TOTAL ADDITION OF RS. 1,60,000/- AN AMOUNT OF RS. 1,06,880/- IS CONFIRMED. 29(II) HAVING REGARD TO THE FACT-SITUATION OF THE ISSUE AND FINDINGS OF THE LOWER AUTHORITY, AS ALSO THE RE LEVANT RECORDS, WE DONT FIND ANY INFIRMITY IN FINDINGS OF CIT(APPEALS), IN THE MATTER, BEING FAIR AND REASONA BLE. THEREFORE, THE SAME ARE UPHELD AND GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED. 30. GROUND NO. 4, RAISED BY THE ASSESSEE IS NOT PRE SSED. HENCE, THE SAME IS DISMISSED. 31. LD. 'AR' STATED THAT GROUND NOS. 5, 6 AND 7 ARE GENERAL IN NATURE AND NEED NO ADJUDICATION. ACCORDINGLY, G ROUND NOS. 5, 6 AND 7 ARE DISMISSED. 32. IN THE RESULT, APPEAL NO. 804/CHD/2012 IS PARTL Y ALLOWED. ITA NO. 805/CHD/2012 (A.Y.2006-07) 33. IN THIS APPEAL, GROUND NOS. 1 & 2 RAISED BY THE APPELLANT AGAINST THE ORDER OF THE CIT(APPEALS) ARE SIMILAR AS 26 RAISED IN ITA 804/CHD/2012 I.E. CONFIRMATION OF ADD ITION OF RS.60,000/- ON ACCOUNT OF JOB WORK. THEREFORE, OUR FINDINGS GIVEN IN ITA 802/CHD/2012 ON THIS ACCOUNT, WOULD AP PLY TO THESE TWO GROUNDS ALSO AND ACCORDINGLY, GROUND NOS. 1 & 2 OF THIS APPEAL ARE ALLOWED. 34. IN GROUND NO. 3, APPELLANT CONTENDED THAT CIT(A PPEALS) ERRED IN CONFIRMING ADDITION OF RS.60,000/-, ON ACC OUNT OF HOUSEHOLD EXPENSES AGAINST ADDITION OF RS. 88,000/- MADE BY THE AO. 34(I) A PERUSAL OF THE APPELLATE ORDER DATED 10.05. 2012 PASSED BY THE CIT(APPEALS) REVEALS THAT NO FINDING ON THE ADDITION MADE BY THE AO IN RESPECT OF HOUSEHOLD EXP ENSES HAS BEEN GIVEN BY THE CIT(APPEALS). IN THIS CONTEX T, PARA NO.5, WHEREIN DISCUSSION OF THE HOUSEHOLD EXPENSES IS MADE, IS REPRODUCED HEREUNDER: 5. THE GROUND OF APPEAL AT SI. NO.3 AND 4 PERTAINS TO ADDITION ON ACCOUNT OF LOW HOUSEHOLD WITHDRAWALS TO THE TUNE OF RS.88,000/-. THE AO IN THIS REGARD HAS OBSERVED THAT THE ASSESSEE WA S FOUND TO BE ENJOYING A LAVISH LIFE STYLE EVIDENCED BY LUXURY IT EMS LIKE THREE AIR CONDITIONERS FOUR GEYSERS AND ONE SANTRO CAR IN HIS HOUSE AND THE ASSESSEE DID NOT FILE THE COPIES OF BILLS OF ELECTR ICITY. IT WAS FURTHER OBSERVED BY THE AO THAT THE ASSESSEE'S CHILDREN WER E STUDYING IN CONVENT SCHOOL AND THEREFORE CONSIDERING THE ENTIRE SCENARI O THE HOUSE HOLD EXPENSES WERE ESTIMATED AT RS. 1,60,OOO/- EXCEPT MET BY OTHE RS LEADING TO ADDITION OF RS. 88,000/-. 34(II) IN PARA 6, THE CIT(APPEALS) HAS REPRODUC ED SUBMISSIONS MADE BY THE APPELLANT ON THE ISSUE IN QUESTION, WHICH IS REPRODUCED HEREUNDER : 6, DURING THE COURSE OF APPELLATE PROCE EDINGS THE AR OF THE APPELLANT SUBMITTED HIS ARGUMENTS ON THE ISSUE AS U NDER:- 27 'THE ADDITION IS ALSO ON THE BASIS OF SAME FACTS A ND CIRCUMSTANCES AND THE ASSESSING OFFICER HAS NOT GIVEN THE BENEFIT OF RS, 28,000/- WITHDRAWN BY THE WIFE OF THE ASSESSEE AND THE ESTIMATION OF E XPENSE IS WITHOUT ANY COGENT MATERIAL. WE RELY ON OUR EARLIER SUBMISSIONS .' 34(III) THE CIT(APPEALS) HAS DISCUSSED GROUND NOS.3 & 4, PERTAINING TO ADDITION ON ACCOUNT OF LOW HOUSEHO LD WITHDRAWAL. HOWEVER, IN PARA 7, CIT(APPEALS) COMMEN CED DISCUSSION IN RESPECT OF GROUND NO.5 WHICH PERTAINS TO THE ADDITION ON ACCOUNT OF REBATE FOR SELF-SUPERVISION TO THE TUNE OF RS.22,018/-. A PERUSAL OF THE IMPUGNED APPE LLATE ORDER REVEALS THAT CIT(APPEALS) HAS INADVERTENTLY O MITTED TO RECORD FINDING IN RESPECT OF GROUND NO. 3 & 4. THE REFORE, IT WOULD BE IN THE FITNESS OF THINGS AND TO MEET ENDS OF JUSTICE THAT THE ISSUE BE RESTORED TO THE FILE OF THE CIT(A PPEALS) TO RECORD HIS FINDINGS ON THE ISSUE IN QUESTION. ACCO RDINGLY, ISSUE IS RESTORED TO THE FILE OF THE CIT(APPEALS) F OR THE PURPOSE OF RECORDING FINDINGS, ON THE ISSUE AND ADJ UDICATE THE SAME. THE GROUND OF APPEAL NO.3 IS ALLOWED FOR STATISTICAL PURPOSES. 35. GROUND NOS. 4 & 5 ARE NOT PRESSED BY THE APPELL ANT AND ACCORDINGLY THESE GROUNDS OF APPEAL ARE DISMISSED A S NOT PRESSED. 36. IN GROUND NO.6, LD. 'AR' CONTENDED THAT CIT(APP EALS) ERRED IN DISALLOWING DEDUCTION U/S 54, AS CLAIMED B EFORE THE AO, WHICH IS AGAINST FACTS AND LAW. LD. 'DR' PLACE D RELIANCE ON THE ORDER OF THE CIT(APPEALS). 28 37. WE HAVE PERUSED AND CAREFULLY CONSIDERED THE FA CTS AND CIRCUMSTANCES AND FINDINGS OF THE LOWER AUTHORITIES . THE FINDINGS OF THE CIT(APPEALS) ARE REPRODUCED HEREUND ER : 19. DURING THE COURSE OF APPELLATE PROCEEDINGS T HE AR OF THE APPELLANT SUBMITTED HIS ARGUMENTS ON THE ISSUE AS U NDER:- THE FACTS AND CIRCUMSTANCES OF MAKING AN ADDITION OF RS.3,57,811/- IS ON ACCOUNT OF DEDUCTION U/S 54 OF THE ACT CLAIMED AT RS.3,57,811/- THE BRIEF FACTS ARE THAT THE ASSES SEE HAS DISCLOSED CAPITAL GAIN ON PURCHASE OF PLOT ON 21.3.2003 AFTER THE SALE OF HOUSE PROPERTY ON 5.6.2002 AND AT THAT TIME THE CAPITAL G AIN OF RS.3,57,811/- WAS CLAIMED AS EXEMPT SINCE THE AMOUN T OF SALE PROCEEDS WAS TO BE INVESTED ON THE CONSTRUCTION OF THE NEW HOUSE. THE ASSESSING OFFICER SOUGHT TO DISALLOW SUCH DEDUCTION IN THE SHARE AND IN THIS REGARD, THE REPLY DATED 27.11.2009 WAS SUBMITT ED IN WHICH IT WAS STATED THAT THE TOTAL SALE PROCEEDS WERE SPENT AND LATER ON AMOUNT TO THE TUNE OF RS.4,42,479/- AND RS.1,50,000/- TOTALIN G TO RS.5,92,000/- WAS SPENT AND THE ASSESSEE HAD SHIFTED IN THE PARTI CULAR BUILT HOUSE AND THEREFORE THE EXEMPTION U/S 54 COULD NOT BE WITHDRA WN. II. THE ASSESSEE HAS STATED THAT THE MAP FROM MUNIC IPAL CORPORATION WAS APPROVED IN MAY 2005 AND AS PER LOC AL ENQUIRIES MADE BY THE ASSESSING OFFICER AND ACCORDINGLY HE HAD DIS ALLOWED THE COST OF CONSTRUCTION. III. IT IS SUBMITTED THAT FOR CONSTRUCTION OF HOUSE IT IS NOT NECESSARY TO GET THE MAP APPROVED SINCE ONE CAN START THE HOUSE WITH OUT APPROVAL OF MAP AND FOR THAT THERE IS RISK OF PENALTY AND DEMOLITIO N OF EXISTING STRUCTURE. THE ASSESSEE WAS CONTINUOUSLY GOING TO THE MUNICIPA L CORPORATION OFFICE AND AS SUCH INITIALLY THE MAP WAS GOT APPROVED AND LATER ON IT WAS GOT APPROVED. THERE IS EVIDENCE IN THE SEIZED RECORD IN THE SHAPE OF BILLS OF CONSTRUCTION MATERIAL FOR THE YEAR 2004 AND THEREFO RE SINCE AS PER SEIZED RECORDS THE CONSTRUCTION HAD STARTED, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN MENTIONING THAT NO CONSTRUCTION WAS CARRIED OUT. TH E CONTENTION OF THE ASSESSING OFFICER THAT THE ASSESSEE HAS DISCLOSED F URTHER INVESTMENT IN THE HOUSE TO THE TUNE OF RS.16 LACS IN THE ASSESSMENT Y EAR 2008-2009 CANNOT NOT BE SAID TO A VALID GROUND FOR DISALLOWING THE DEDUC TION, BECAUSE THE ASSESSEE MAY SPENT THE AMOUNT FROM UNDISCLOSED SOUR CES AND WHICH AMOUNT WAS LATER ON SURRENDERED, BUT THAT DOES NOT MEAN TH AT THE SE WAS NOT COMPLETE. IV) THE AO HAS REFERRED TO LOCAL ENQUIRIES AND IT IS SUBMITTED THAT NO LOCAL ENQUIRIES HAVE CONFRONTED TO THE ASSESSEE AND CONTE NTION OF THE ASSESSING OFFICER DESERVES TO BE IGNORED AND ON ACCOUNT OF DE DUCTION CLAIMED U/S 54 AS MADE BY THE ASSESSING OFFICER DESERVES TO BE DELETED.' 29 20. I HAVE CONSIDERED THE BASIS OF DISALLOWANCE MAD E BY THE AO AND THE ARGUMENTS OF AR ON THE ISSUE. IT IS APPARENT THAT T HERE IS NO DOCUMENTARY EVIDENCE WITH THE ASSESSEE TO PROVE THAT HE HAD SPE NT AN AMOUNT OF RS. 1,50,000/- ON CONSTRUCTION IN. THE YEAR UNDER CONSI DERATION. AS AGAINST THIS THE AO HAS BROUGHT ON RECORD THE REPORT OF MUN ICIPAL CORPORATION CERTIFYING THAT THE PLAN FOR CONSTRUCTION HAD NOT B EEN APPROVED NEITHER ANY PENALTY FOR GETTING CONSTRUCTION DONE WITHOUT P LAN HAD BEEN INITIATED OR IMPOSED. THE AO HAS FURTHER TREATED THE AMOUNT RECE IVED IN CASH ALLEGEDLY FROM RELATIVES AS BOGUS AND SUITABLE ADDITION HAD B EEN MADE WHICH WAS CONFIRMED BY THE UNDERSIGNED AS WELL. THE ASSESSES ON THE OTHER HAND HAS REFERRED TOLL EVIDENCE ; N THE SEIZED RECORD SHOWING CONSTRUCTION OF HOUSE, BUT THIS ARGUMENTS ALSO FAILS AS NO SUCH PAPER HAS BEEN HIGHLIGHTED. IT IS ALSO SEEN THAT THE ASSESSEE HAD SURRENDERED OF RS. 16 LACS IN A.Y. 2008-09 ON ACCOUNT OF UNACCOUNTED INVESTMENT IN HOUSE CONSTRUCTION BUT HA S CLAIMED IN THE SUBMISSIONS BEFORE ME THAT THE AMOUNT HAD ACTUALLY BEEN INVESTED EARLIER. THIS CLAIM OF THE APPELLANT CAN NOT BE ACCEPTED AS THE AMOUNT SURRENDERED IN A PARTICULAR YEAR IS DEEMED TO HAVE BEEN EARNED OR INVESTED IN THE SAME YEAR ONLY. IN THE CIRCUMSTANCES IT BECOMES CLEAR TH AT THE ASSESSEE HAS NOT BEEN ABLE TO PROVE HIS CLAIM OF HAVING CONSTRUCTED THE H OUSE IN THE YEAR UNDER CONSIDERATION, AS SUCH THE ACTION OF THE AO IN DISA LLOWING THE DEDUCTION U/S 54 IS CONFIRMED. 38. ON A CAREFUL PERUSAL AND CONSIDERATION OF THE F ACTS AND THE FINDINGS OF THE CIT(APPEALS),IT IS EVIDENT THAT ASSESSEE HAS FAILED TO COMPLY WITH THE STATUTORY REQUIREMENT OF SECTION 54 OF THE ACT. THEREFORE, AS PER THE FINDI NGS RECORDED BY THE CIT(APPEALS), ASSESSEE IS NOT ELIGI BLE FOR SUCH CLAIM. CONSEQUENTLY, FINDINGS OF THE CIT(APPE ALS) ARE UPHELD AND GROUND OF APPEAL OF THE ASSESSEE IS DISM ISSED. 39. GROUND NOS. 7 TO 9 ARE GENERAL IN NATURE AND DO NOT REQUIRE SEPARATE ADJUDICATION. ACCORDINGLY, GROUND NOS. 7 TO 9 ARE DISMISSED. 40. IN THE RESULT, APPEAL NO. 805/CHD/2012 IS PARTL Y ALLOWED. 30 ITA NO.806/CHD/2012 (A.Y.2007-08) 41. IN THIS APPEAL, THE GROUND NOS. 1 & 2 RAISED BY THE APPELLANT AGAINST THE ORDER OF THE CIT(APPEALS) DAT ED 10.05.2012, ARE SIMILAR AS RAISED IN ITA 802/CHD/20 12 I.E. CONFIRMATION OF ADDITION OF RS.66,000/- BY THE CIT( APPEALS) ON ACCOUNT OF JOB WORK. THEREFORE, OUR FINDINGS GI VEN IN ITA 802/CHD/2012 ON THIS ACCOUNT, WOULD APPLY TO THESE TWO GROUNDS ALSO AND ACCORDINGLY, GROUND NOS. 1 & 2 OF THIS APPEAL ARE ALLOWED. 41(I) IN GROUND NO. 3, APPELLANT CONTENDED THAT CIT(APPEALS) ERRED IN CONFIRMING ADDITION OF RS.64, 000/- ON ACCOUNT OF HOUSEHOLD EXPENSES AGAINST ADDITION OF R S. 80,000/- MADE BY THE AO. SIMILAR ISSUE HAS BEEN CON SIDERED AND ADJUDICATED IN APPEALS ADJUDICATED HEREINBEFORE , AT THE APPROPRIATE PLACE. THE FINDINGS RECORDED BY THE CIT (APPEALS), ARE REPRODUCED HEREUNDER : 7, I HAVE CONSIDERED THE BASIS OF ADDITION MADE BY THE AO AND THE SUBMISSIONS OF THE AR ON THE ISSUE. IT IS SEEN THAT THE AO HAS PROJECTED A LAVISH LIFE STYLE OF THE APPELLANT ON T HE BASIS OF HOUSE HOLD GOODS LIKE AIR CONDITIONERS/GEYSERS AND ORDINARY CA R LIKE SANTRO. THE CONCLUSION OF THE AO BASED UPON THIS FLAWED PROJECT ION IS THEREFORE ERRONEOUS TO THAT EXTENT. IT IS ALSO SEEN THAT THE CONTRIBUTION MADE BY HIS FATHER TO THE TUNE OF RS. 24,000/- HAS NOT BEEN TAK EN INTO CONSIDERATION. THE AO'S ESTIMATION OF HIS EXPENSES @ RS. 1,50,000/- MONTH IS NOT ON THE HIGHER SIDE ESPECIALLY WHEN THE EXPEN SES ON THE OPERATION OF ATLEAST TWO AIR CONDITIONERS ON DAILY BASIS FOR ABO UT A PERIOD OF 5 TO 6 MONTHS (SUMMERS) WOULD ITSELF INVOLVE EXP OF RS.. 4 ,000/- PER MONTH. THE ASSESSEE HAS ALSO NOT PRODUCED ANY E M THE FORM OF ELECTRICITY BILLS EVEN FOR THE YEAR 2007-08 TO PROVE HIS CLAIM THAT T HE AIR CONDITIONERS WERE BEING USED A PERIOD OF TWO MONTHS. IN THE CIRC UMSTANCES THE OVER ALL ESTIMATION BY THE AO AT RS. 12,500/- IS FAIR AND RE ASONABLE, HOWEVER THE CONTRIBUTION BY THE FATHER/WIFE OF THE ASSESSEE TO THE TUNE OF RS. 24,000/- HAS TO BE ACCOUNTED FOR BEFORE WORKING OUT THE ADDI TION ON THIS ISSUE. AS 31 SUCH OUT OF TOTAL ADDITION OF RS. 88,000/- AN AMOUN T OF RS. 64,000/- IS CONFIRMED. 41(II) HAVING REGARD TO THE FACT-SITUATION OF THE ISSUE AND FINDINGS OF THE LOWER AUTHORITY, AS ALSO THE RELEVA NT RECORDS, WE DONT FIND ANY INFIRMITY IN THE FINDINGS OF THE CIT(APPEALS) AND ACCORDINGLY, THE SAME ARE UPHELD AND THIS GROUN D OF APPEAL OF THE APPELLANT IS DISMISSED. 41(III). GROUND NO. 4, RAISED BY THE APPELLANT IS N OT PRESSED AND ACCORDINGLY THIS GROUND OF APPEAL IS DISMISSED AS NOT PRESSED. 42. IN GROUND NO. 5, APPELLANT CONTENDED THAT CIT(A PPEALS) ERRED IN CONFIRMING THE ADDITION OF RS.50,000/- ON ACCOUNT OF DIFFERENCE IN THE COST OF CONSTRUCTION BASED ON THE REPORT OF DEPARTMENTAL VALUATION OFFICER. 42(I) WE HAVE PERUSED AND CONSIDERED THE RIVAL SUBM ISSIONS AND RELEVANT RECORDS. THE FINDINGS OF THE CIT(APPEA LS) AS RECORDED IN PARA 18 OF HIS ORDER ARE REPRODUCED HER EUNDER : 18. I HAVE CONSIDERED THE REPLY SUBMITTED BY TH E ASSESSEE BEFORE THE AO WHEREIN THE DIFFERENCE IN COST OF CONSTR UCTION HAS BEEN EXPLAINED BY THE ASSESSEE. IT IS SEEN THAT THE AO HAS NOT GIV EN ANY REASONS FOR DISBELIEVING THE EXPLANATION FILED IN THIS REGARD E SPECIALLY WHEN THE ASSESSEE HAD FILED EVIDENCE OF RETURN OF INCOME FILED BY APP ELLANT'S WIFE. IT IS HOWEVER SEEN THAT THE APPELLANT'S WIFE HAD DECLARED INCOME ONLY OF RS. 96,000/- OUT OF WHICH CERTAIN AMOUNT WOULD HAVE BEE N USED FOR PERSONAL EXPENSES. THEREFORE, THE ENTIRE DISCREPANCY IN THE CONSTRUCTION OF HOUSE TO THE TUNE OF RS. 1,15,872/-DOES NOT STAND EXPLAINED. AS SUCH ADDITION TO THE TUNE OF RS. 50,000/-IS CONFIRMED. 42(II) HAVING REGARD TO THE FACT-SITUATION OF THE I SSUE AND FINDINGS OF THE LOWER AUTHORITY, AS ALSO THE RELEVA NT RECORDS, WE DONT FIND ANY INFIRMITY IN THE FINDINGS OF THE CIT(APPEALS) 32 AND ACCORDINGLY, THE SAME ARE UPHELD AND THIS GROUN D OF APPEAL OF THE APPELLANT IS DISMISSED. 43. GROUND NOS. 6, 7 AND 8 ARE GENERAL IN NATURE AN D DO NOT REQUIRE SEPARATE ADJUDICATION. ACCORDINGLY, GR OUND NOS. 6 TO 8 ARE DISMISSED. 44. IN THE RESULT, APPEAL NO. 806/CHD/2012 IS PARTL Y ALLOWED. ITA NO. 818/CHD/2012 (A.Y. 2003-04) 45. IN THIS APPEAL, GROUND NOS. 1 & 2 RAISED BY THE APPELLANT ARE SIMILAR AS RAISED IN ITA 802/CHD/2012 I.E. CONFIRMATION OF ADDITION OF RS.54,000/-, BY THE CIT (APPEALS) ON ACCOUNT OF JOB WORK. THEREFORE, OUR FINDINGS GI VEN IN ITA 802/803/CHD/2012 IN THE MATTER, WOULD APPLY TO THES E TWO GROUNDS ALSO AND ACCORDINGLY, GROUND NOS. 1 & 2 OF THIS APPEAL ARE ALLOWED. 45(I) IN GROUND NO. 3, APPELLANT CONTENDED THAT CIT(APPEALS) ERRED IN CONFIRMING ADDITION OF RS.64, 000/- ON ACCOUNT OF HOUSEHOLD EXPENSES AGAINST ADDITION OF R S. 88,000/- MADE BY THE AO. WE HAVE CONSIDERED THE RIV AL SUBMISSIONS AND RELEVANT RECORD. THE FINDINGS OF TH E CIT(APPEALS) ARE REPRODUCED HEREUNDER : 7. I HAVE CONSIDERED THE BASIS OF ADDITION MADE BY THE AO AND THE SUBMISSIONS OF THE AR ON THE ISSUE. IT IS SEEN THA T THE AO HAS PROJECTED A LAVISH LIFE STYLE OF THE APPELLANT ON T HE BASIS OF HOUSE HOLD GOODS LIKE AIR CONDITIONERS/GEYSERS AND ORDINARY CA R LIKE SANTRO. THE CONCLUSION OF THE AO BASED UPON THIS FLAWED PROJECT ION IS THEREFORE ERRONEOUS TO THAT EXTENT. IT IS ALSO SEEN THAT THE CONTRIBUTION MADE BY HIS FATHER TO THE TUNE OF RS. 24,000/- HAS NO T BEEN TAKEN INTO CONSIDERATION. THE AO'S ESTIMATION OF HIS EXPENSES @ RS. 12,500/- PER MONTH IS NOT ON THE HIGHER SIDE ESPECIALLY WHEN THE EXPENSES ON THE OPERATION OF ATLEAST TWO AIR CONDITIONERS ON DAILY BASIS FOR ABOUT A PERIOD OF 5 TO 6 MONTHS (SUMMERS) WOULD ITSELF INVO LVED EXPENDITURE 33 OF RS. 2000/- PER MONTH. THE ASSESSEE HAS ALSO NOT PRODUCED ANY EVIDENCE IN THE FORM OF ELECTRICITY BILLS EVEN FOR THE YEAR 2007-08 TO PROVE HIS CLAIM THAT THE AIR CONDITIONERS WERE BEIN G USED FOR A PERIOD OF TWO MONTHS. IN THE CIRCUMSTANCES THE OVER ALL ESTIM ATION BY THE AO AT RS. 1,50,000/- IS FAIR AND REASONABLE, HOWEVER THE CONTRIBUTION BY THE FATHER/WIFE OF THE ASSESSEE TO THE TUNE OF RS. 24,0 00/- HAS TO BE ACCOUNTED FOR BEFORE WORKING OUT THE ADDITION ON THIS ISSUE. AS S UCH OUT OF TOTAL ADDITION OF RS. 88,000/- AN AMOUNT OF RS. 64,000/- IS CONFIR MED. 45(II) HAVING REGARD TO THE FACT-SITUATION OF THE I SSUE AND FINDINGS OF THE LOWER AUTHORITY, AS ALSO THE RELEVA NT RECORDS, WE DONT FIND ANY INFIRMITY IN THE FINDINGS OF THE CIT(APPEALS) AND ACCORDINGLY, THE SAME ARE UPHELD AND THIS GROUN D OF APPEAL OF THE APPELLANT IS DISMISSED. 46. GROUND NO. 4 RAISED BY THE APPELLANT IS NOT PRE SSED BY THE APPELLANT AND ACCORDINGLY THIS GROUND OF APPEAL IS DISMISSED AS NOT PRESSED. 47. GROUND NOS. 5 TO 7 ARE GENERAL IN NATURE AND DO NOT REQUIRE SEPARATE ADJUDICATION. ACCORDINGLY, GROUND NOS. 5 TO 7 ARE DISMISSED. 48. IN THE RESULT, APPEAL NO. 818/CHD/2012 IS PARTL Y ALLOWED. 49. RESULTANTLY, ALL THE APPEALS OF THE ASSESSEE AR E PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH NOV.,2012. SD/- SD/- (SUSHMA CHOWLA) (MEHAR SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 27 TH NOV.,2012. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT CHANDIGARH