SHRI BANSIDHAR AGARWAL, Jaipur V. ACIT, Jaipur

ITA 827/JPR/2011

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5390 (ITAT-JAIPUR)
• Duration Of Justice: 4 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 26-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJ MEHRA JCIT DR DHK
• Assessee Lawyers: O P AGARWAL
• Keywords: Depreciation; Search and seizure; Loose papers; Commercial expediency; Retraction; Bogus loan; Revised return
• Section: 143(3); 133A; 15

Judgement Text

ITA NO. 827/JP/2011 SHRI BANSIDHAR AGARWAL VS. ACIT, CIRCLE- 1 , JAIPUR 1 VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH FOE FLAG ;KN O] YS[KK LNL; DS LE{K BEFORE:SHRI R.P.TOLANI, JM & SHRI VIKRAM SINGH YADA V, AM VK;DJ VIHY LA-@ ITA NO. 827/JP/2011 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2008-09 SHRI BANSIDHAR AGARWAL PROP. AGARWAL & CO.1307, KEDIA BHAWAN GOPAL JI KA RASTA, JAIPUR CUKE VS. THE ACIT CIRCLE- 1 JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AANPA 6881 E VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 1042/JP/2011 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2008-09 THE ACIT CIRCLE- 1 JAIPUR CUKE VS. SHRI BANSIDHAR AGARWAL PROP.AGARWAL & CO.1307, KEDIA BHAWAN, GOPAL JI KA RASTA, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AANPA 6881 E VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 104/JP/2014 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2008-09 SHRI BANSIDHAR AGARWAL PROP. AGARWAL & CO.1307, KEDIA BHAWAN GOPAL JI KA RASTA, JAIPUR CUKE VS. THE ACIT CIRCLE- 1 JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AANPA 6881 E VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MANISH AGARWAL AND SHRI O.P. AGARWAL, CA JKTLO DH VKSJ LS@ REVENUE BY : RAJ MEHRA, JCIT -DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 16/02/2016 ?KKS'K.KK DH RKJH[K@ DATE OF PRONOUNCEMENT : /04/2016 ITA NO. 827/JP/2011 SHRI BANSIDHAR AGARWAL VS. ACIT, CIRCLE- 1 , JAIPUR 2 VKNS'K@ ORDER PER R.P. TOLANI, JM:- THE ASSESSEE AND REVENUE HAVE FILED THE CROSS APPE ALS AGAINST THE ORDER OF THE LD. CIT(A)-1, JAIPUR DATED 09-02-2011 FOR THE ASSESSMENT YEAR 2008-09 ON QUANTUM ADDITIONS. BESIDES, ASSESSEE IS ALSO IN APPEAL AGAINST THE ORDER OF THE LD. CIT(A)-1, JAIPUR DATED 13-12-2 013 FOR THE ASSESSMENT YEAR 2008-09 IMPOSING PENALTY U/S 271(1)(C) OF THE ACT. 2.1 FIRST OF ALL, WE TAKE UP THE CROSS APPEALS FOR THE ASSESSMENT YEAR 2008- 09 WHEREIN THE ASSESSEE AND REVENUE HAVE RAISED THE FOLLOWING GROUNDS IN RESPECTIVE APPEALS. ITA NO. 827/JP/2011 A.Y. 2008-09 (ASSESSEE APP EAL ) 1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) HAS GROSSLY ERRED IN UPHOLDING AN ADDITION O F RS. 32,43,730/- MADE BY THE AO BY ALLEGING THE SAME AS UNDISCLOSED INVESTMENT IN PURCHASE OF PROPERTY IN T HE NAME OF ASSESSEE'S SON SHRI NARAIN AGARWAL. 1.1 THAT THE LD. CIT(A) HAS FURTHER ERRED IN IGNORI NG VARIOUS SUBMISSIONS MADE AND EVIDENCES ADDUCED AND ALSO BY IGNORING THE INCOME ADMITTED AND DECLARED BY THE ASSESSEE, T HUS THE ADDITION OF RS. 32,43,730/- SO CONFIRMED BY LD. CIT (A) DESERVES TO BE DELETED. ITA NO. 1042/JP/2011 A.Y. 2008-09 (REVENUE ) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) IS JUSTIFIED IN DELE TING :- ITA NO. 827/JP/2011 SHRI BANSIDHAR AGARWAL VS. ACIT, CIRCLE- 1 , JAIPUR 3 (I) THE ADDITION OF RS. 2,13,15,248/- MADE BY THE A O ON ACCOUNT OF EXCESS LIABILITIES. (II) THE ADDITION OF RS. 3,45,000/-MADE BY THE AO O N ACCOUNT OF UNACCOUNTED LOANS. (III) THE DISALLOWANCE OF RS. 31,065/- MADE BY THE AO OUT OF MOTOR CAR EXPENSES AND DEPRECIATION ON CAR BY APPLY ING U/S 38(2) OF THE I.T. ACT ON ACCOUNT OF PERSONAL USE. 3.1 LD. COUNSEL AT THE OUTSET CONTENDS THAT THIS IS A UNIQUE CASE WHERE ASSESSEE DESPITE HAVING DECLARED SUBSTANTIALLY MORE INCOME THAN DECLARED IN SURVEY STATEMENT, STILL HUGE ADDITIONS HAVE BEEN FU RTHER MADE BY LD. AO. IN THIS BACKDROP THE BRIEF FACTS AS NARRATED AND APPEA RING FROM RECORD ARE - THE ASSESSEE IS PROPRIETOR OF A CONCERN M/S AGARWAL & C O. ENGAGED IN THE MANUFACTURING & TRADING OF JEWELLERY. SURVEY OPERAT ION U/S 133A WERE CARRIED OUT AT THE BUSINESS PREMISES ON 12.09.2008, IN THE COURSE THEREOF SOME INCRIMINATING DOCUMENTS WERE IMPOUNDED MAIN DO CUMENT BEING A-24 A BALANCE SHEET. 3.2 ORIGINAL RETURN WAS FILED ON 21.08.08 DECLARING TOTAL INCOME AT RS. 9,97,970/- WHICH CONSEQUENT TO SURVEY WAS REVISED T O RS. 9,48,47,980/- ON 26.11.2008 WHICH INCLUDED ADDITIONAL INCOME OF RS. 9,38,50,009/- WORKED OUT ON THE BASIS OF ENTRIES IN THE LOOSE PAPERS IMP OUNDED DURING THE COURSE OF SURVEY. THE ASSESSMENT WAS COMPLETED U/S 143(3) AT A TOTAL INCOME OF RS. 11,98,07,020/- AS LD. AO MADE FURTHER ADDITIONS / D ISALLOWANCE AMOUNTING TO ITA NO. 827/JP/2011 SHRI BANSIDHAR AGARWAL VS. ACIT, CIRCLE- 1 , JAIPUR 4 RS. 2,49,59,043/-. IN FIRST APPEAL AFTER CONSIDERIN G THE MATERIAL AVAILABLE ON RECORD AND CONTENTIONS LD. CIT(A) ALLOWED PART RELI EF TO THE ASSESSEE. 3.3 AGGRIEVED ON RESPECTIVE GRIEVANCES, ASSESSEE AS WELL AS THE DEPARTMENT IS IN RESPECTIVE APPEALS. 4.1 BY GROUND NO. 1, DEPARTMENT HAS CHALLENGED THE RELIEF GRANTED BY THE LD. CIT(A) QUA THE QUANTIFICATION OF SAID ANNEXURE 24 REDUCING IT BY RS. 2,13,15,248/-. LD. DR RELIED ON THE ORDER OF LD. AO AND FILED WRITTEN SUBMISSIONS DTD. 16-2-16 FORWARDED BY LD. ACIT, CIR . 1, JAIPUR MAINLY CONTENDING THAT: THE MOST IMPORTANT ISSUE IS WHETHER THE REGULAR BAL ANCE SHEET WAS A PART OF THE DUPLICATE BALANCE SHEET OR WAS IN ADDITION TO IT. IT IS EVIDENT FROM BOTH THE BALANCE SHEET (COPIES ENCLOSE D), NONE OF THE ITEMS (EXCEPT THAT OF JEWELLERY ASSOCIATION OF RS. 25,000) ON THE ASSES SIDE MATCHED BETWEEN THE TWO AND NO DETAILS OF THE PARTIES WERE PROVIDED BY THE ASSESSEE SO AS TO ENABLE THE ASSESS ING OFFICER TO VERIFY THE GENUINENESS OR OTHERWISE OF THE PARTIES. THEREFORE, IT WAS ONLY LOGICAL THAT THE DUPLICATE BALANCE SHEET BE CO NSIDERED IN ADDITION TO THE ORIGINAL BALANCE SHEET. AS IS EVIDENT FROM T HE ASSESSMENT ORDER, THE LIABILITIES OF THE DUPLICATE BALANCE SHEET FOUN D DURING THE COURSE OF SURVEY WERE ATTEMPTED TO BE VERIFIED BY THE ASSE SSING OFFICER AND SUFFICIENT OPPORTUNITY WAS GIVEN TO THE A.R. IN THI S REGARD. THE CIT (A)-I, JAIPUR HAS ALSO MENTIONED THIS FACT IN THE A PPELLATE ORDER THAT THE ASSESSEE DID NOT DISCHARGE HIS ONUS TO THE EXTE NT THAT HE DID NOT VERIFY THE LIABILITIES APPEARING IN THE DUPLICATE B ALANCE SHEET IN ORDER TO CLAIM THE SET OFF THESE LIABILITIES. STILL THE C OMMON LIABILITIES WERE WORKED OUT BETWEEN BOTH THE BALANCE SHEETS. THE FAC T THAT THERE WAS NO COMMON ASSET EXCEPT THAT OF JEWELERS ASSOCIATION OF RS. 25,000/-, CANNOT BE OVERLOOKED ALONGWITH THE FACT THAT THERE ARE SOME COMMON NAMES ON THE LIABILITIES SIDE WITH DIFFERENT AMOUNT S. THEREFORE, ONLY ON THE BASIS OF THE LIABILITIES SIDE, IT CANNOT BE CONCLUDED THAT THE BALANCE SHEET FILED WITH THE ORIGINAL RETURN IS INC ORPORATED IN THE ITA NO. 827/JP/2011 SHRI BANSIDHAR AGARWAL VS. ACIT, CIRCLE- 1 , JAIPUR 5 DUPLICATE BALANCE SHEET. ON THE BASIS OF THE ASSETS SIDE, IT CAN BE CLEARLY ESTABLISHED THAT THE DUPLICATE BALANCE SHEE T HAS BEEN MAINTAIN IN ADDITION TO THE REGULAR BALANCE SHEET. STILL THE RELIEF OF DEDUCTING COMMON LIABILITIES OF RS. 1,06,68,208/- WAS GIVEN T O THE ASSESSEE ON THE BASIS OF THE DIRECTIONS ISSUED BY THE THEN ADDI TIONAL CIT, RANGE1,JAIPUR U/S 144A. HENCE, THE COMMON LIABILITI ES WERE WORKED OUT AND RELIEF TO THAT EXTENT WAS ALSO GIVEN TO THE ASSESSEE APART FROM THE TOTAL OF REGULAR BALANCE SHEET AND THE INCOME A LREADY DECLARED BY THE ASSESSEE IN THE REVISED RETURN OF INCOME. BUT, IN PRINCIPLE, ON THE BASIS OF THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE DUPLICATE BALANCE SHEET HAS TO BE CONSIDERED AS IN ADDITION TO THE RE GULAR BALANCE SHEET AND THE REGULAR BALANCE SHEET CANNOT BE CONSIDERED AS INCORPORATED IN THE ACTUAL ONE. THE SET OFF OF COMMON LIABILITIE S ARE ALLOWED TO THE ASSESSEE WAS ONLY ALLOWED PRESUMING THAT THERE WAS SOME OVERLAPPING OF THE AMOUNT AGAINST THE HEAD STOCK IN BOTH THE BALANCE SHEETS AND ON THE BASIS OF THE DIRECTIONS U /S 144A, OF THE ADDL. CIT, RANGE-1 JAIPUR . FURTHER THE ADDITION OF RS. 3,45,000/- WAS MADE ON ACCOUNT OF UNDISCLOSED INCOME SURRENDE RED DURING THE SURVEY PROCEEDINGS ON ACCOUNT OF LOANS AND ADVANCE S WHICH IS ALSO DISCUSSED IN THE ORDER. THE ADDITION OF RS. 31,065/ - WAS THE DISALLOWANCE ON ACCOUNT OF MOTOR CAR EXPENSES AND DEPRECIATION ON CAR FOR PERSONAL USE. IT IS CONTENDED BY LD. DR THAT THE RELIEF AWARDED B Y LD. CIT(A) IN THIS BEHALF MAY BE WITHDRAWN. 4.2 LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT THE FINAL DETAILS OF ADDITIONAL INCOME FINALLY OFFERED BY THE ASSESSEE, INCLUDING ALL THE ASSETS OWNED BY HIM WAS WORKED OUT AS UNDER:- TOTAL OF ASSETS ON THE MEMORANDUM NOTATIONS (APB 7) 12,58,33,465.00 LESS: ASSETS / LIABILITIES DECLARED IN THE BALANCE SHEET FILED ALONGWITH THE RETURN OF TOTAL INCOME (PB 57) 3,09,73,279.00 ------------------- TOTAL INCOME 9,48,60,186.00 ITA NO. 827/JP/2011 SHRI BANSIDHAR AGARWAL VS. ACIT, CIRCLE- 1 , JAIPUR 6 LESS: INCOME ALREADY DECLARED (BEFORE DEDUCTION U/S 80C) (PB 42) 10,10,177.00 ------------------- 9,38,50,009.00 ------------------- DURING THE COURSE OF SURVEY ASSESSEE EXPLAINED THAT THE ANN. 24 WAS A COMBINED BALANCE SHEET OF ACCOUNTED AND UNACCOUNTED BOOKS. BASED ON INFORMATION AVAILABLE AT THE TIME OF SURVEY AND SUB JECT TO VERIFICATION OF FURTHER DOCUMENTS, ASSESSEE DURING SURVEY DECLARED ADDITIONAL INCOME OF RS. 3,50,42,961/- FOR A.Y. 2009-10 AND RS. 75,22,019/- FOR A.Y. 2008-09. ON VERIFICATION ASSESSEE FOUND THAT THE DECLARATION OF INCOME WAS LESS AND SUO MOTU INCREASED THE DECLARATION TO RS. 9,38,50,009/- FOR A.Y. 2008-09 AND RS. 40,00,000/- IN A.Y. 2009-10 WHICH IS PRACTICALL Y MORE THAN DOUBLE THAN THE SURRENDERED INCOME. THIS DEMONSTRATES THAT ASSE SSEE WAS GUIDED BY BONA FIDE IMPRESSION TO COME OUT WITH CLEAN HANDS, COOPE RATE WITH THE DEPARTMENT AND PAY DUE TAXES THEREON. THE ENHANCED ADDITIONAL INCOME SO ADMITTED INCLUDED THE INCOME ATTRIBUTABLE TO ENTRIES IN THE PAPERS INCLUDING THE ANN. 24 IMPOUNDED DURING THE COURSE OF SURVEY. IT CONTAI NED THE DETAILS OF THE TRANSACTIONS DISCLOSED IN THE REGULAR RETURN ALONG WITH INTERMIXED UNACCOUNTED ASSETS AND LIABILITIES. ASSESSEE BY LET TER DATED 14.09.1010, FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS, SUO MO TU INCREASING THE ADDITIONAL INCOME, FURNISHED ALL RELEVANT DETAILS A ND WORKING OF THE ITA NO. 827/JP/2011 SHRI BANSIDHAR AGARWAL VS. ACIT, CIRCLE- 1 , JAIPUR 7 UNDISCLOSED INCOME WHICH IS PLACED ON PB 14-15. TH E ASSESSEE THUS DISCHARGED HIS ONUS TO EFFECTIVELY EXPLAIN THE WORK ING OF ADDITIONAL INCOME. CONSEQUENTLY THE BURDEN THEN SHIFTED ON THE DEPARTM ENT TO REBUT THE WORKING BY COGENT REASONING, FACTS AND WORKING. THE REVENU E HAS NOT REBUTTED THE ASSESSEES EXPLANATION AND WORKING IN ANY MEANINGFU L AND COGENT MANNER. IN THIS EVENTUALITY LD. CIT(A) HAS RIGHTLY UPHELD A SSESSEES VERSION. THUS THE FURTHER ADDITIONS HAVE BEEN MADE BY AO ON ASSUMPTIO N AND PRESUMPTIONS. THE ESTIMATE OF UNDISCLOSED INCOME FROM SUMMARY OF PAPER IMPOUNDED DURING SURVEY REFLECTS TOTAL OF ASSETS AS REDUCED B Y THE LIABILITIES AND THE RESIDUAL FIGURE APPEARS TERMED AS CAPITAL. THE CA LCULATION OF THE ADDITIONAL INCOME DECLARED BY THE ASSESSEE IS THE BALANCING FI GURE OF THE TOTAL OF ASSETS ENTRIES IN ANN-24 MINUS THE TOTAL OF THE ASSET SIDE OF THE BALANCE SHEET FURNISHED WITH ORIGINAL RETURN. 4.3 ASSESSEE CATEGORICALLY STATED MAINTAINING OF TW O SETS OF BOOKS I. ONE FOR ALL FINALIZED TRANSACTIONS BASED ON WHICH RETUR N OF INCOME WAS FILED AND II. THE OTHER ONE PREPARED FOR TOTAL TRANSACTIONS O F THE BUSINESS INCLUDING I.. THIS FACT FINDS CLEAR MENTION IN REPLY TO Q.NO. 28 AS REPRODUCED AT PAGE 2 OF ASSESSMENT ORDER. LD. AO HOWEVER IN UTTER DISREGARD OF THE SWORN STATEMENT RELIED ON BY DEPARTMENT, MATERIAL AND FACTS AVAILAB LE ON RECORD, RECOURSED TO MAKING DOUBLE ADDITIONS BY ERRONEOUSLY TREATING BOT H SETS AS SEPARATE AND ITA NO. 827/JP/2011 SHRI BANSIDHAR AGARWAL VS. ACIT, CIRCLE- 1 , JAIPUR 8 ADDING FIGURES FROM BOTH THE BALANCE SHEETS AS UNDI SCLOSED INCOME. THE MATTER TRAVELLED UPTO LD ADDL. CIT FOR DIRECTIONS U /S 144A. THERE ALSO ASSESSEE SUBMITTED FOLLOWING DETAILED WORKING OF TH E COMMON ENTRIES:- REGULAR BALANCE SHEET - TOTAL OF ASSETS SIDE NOT ME NTIONED: 10,25,81,794/- LESS: THE LIABILITIES NOT MENTIONED IN REGULAR BALA NCE SHEET: 1,07,36,661/- NET DIFFERENCE 9,18,45,133/- IT WAS CONTENDED THAT AS AGAINST THIS ASSESSEE HAS OFFERED ADDITIONAL INCOME AMOUNTING TO RS. 9,38,50,009/- WHICH IS MORE THAN R S. 9,18,45,133/-. LD. AO, HOWEVER WITHOUT COGENT REASONS AND JUSTIFICATIO N INTERFERED WITH THE SPECIFIC AND BINDING STATUTORY DIRECTIONS OF ADL. C IT U/S 144A WITH FOLLOWING OBSERVATIONS AT PAGE 7 :- TO SUM UP, OUT OF THE TOTAL LIABILITIES OF RS. 15, 68,06,744/- OF BOTH THE BALANCE SHEETS, THE VERIFIABLE LIABILITIES COME TO RS. 4,16,41,487/- AND THEREFORE THE SET-OFF OF THIS MUC H AMOUNT IS ALLOWED TO THE ASSESSEE, PRESUMING THAT THERE WAS S OME OVERLAPPING OF THE AMOUNT AGAINST THE HEAD STOCK IN BOTH THE BALANCE SHEETS, ONLY AND ONLY TO TAKE INTO CONSIDER ATION THE CONSEQUENT MISMATCHING OF THE BALANCE SHEET, AS ONE CANT AGAIN MOVE TO THE ASSETS SIDE WHICH WOULD BE AKIN T O GOING ROUNDS IN CIRCLES UNNECESSARILY. HERE IT IS IMPORTA NT TO MENTION THAT THE LIABILITY SIDE IS TAKEN AS BASE HERE BECAU SE THE COMMON LIABILITIES ARE CLEARLY IDENTIFIED. THUS LD. AO INSTEAD OF BEING OBJECTIVE ABOUT WORKIN G AND ENTRY SPECIFIC USED THE CONVENIENT COURSE OF MAKING SWEEPING, GENE RAL AND USED FOLLOWING PRESUMPTIVE TERMS TO MAKE DOUBLE ADDITION: ITA NO. 827/JP/2011 SHRI BANSIDHAR AGARWAL VS. ACIT, CIRCLE- 1 , JAIPUR 9 PRESUMING THAT THERE WAS SOME OVERLAPPING OF THE AM OUNT AGAINST THE HEAD STOCK IN BOTH THE BALANCE SHEETS . O NE CANT AGAIN MOVE TO THE ASSETS SIDE WHICH WOULD BE AKIN TO GOING ROUNDS IN CIRCLES UNNECESSARILY THUS THERE IS NEITHER FACTUAL BASIS NOR COGENCY OF REASONS TO TAKE A PRESUMPTIVE INFERENCE THAT THE REGULAR BALANCE SHEE T IS SEPARATE AND ANNEXURE A-24 REPRESENTS ONLY UNACCOUNTED ASSETS AN D LIABILITIES AND ADDED IT SEPARATELY. FROM THE OBSERVATION OF THE LD. AO R ELEVANT QUESTION WHICH ARISES AND REMAINS UNANSWERED IS : - IF ANN-24 IS A SEPARATE BALANCE SHEETS ARE DIFFER ENT AND NOT COMBINED ONE WOULD A SINGLE ENTRY FIND PLACE IN ONE BALANCE SHEET OR IN BOTH THE BALANCE SHEET? LD. AO HERSELF FOUND COMMON NAMES/ENTRIES AMOUNTING TO RS. 1,06,68,208/- WHICH FIND PLACE IN BOTH THE BALANCE SHEETS. IT DEM ONSTRATES THAT THE ACCOUNTED AND UNACCOUNTED BALANCE SHEETS ARE INTERD EPENDENT, INTERMIXED AND COMPLIMENTARY TO EACH. THE SOLE INCRIMINATING P APER PB7 IS RELIED BY LD. AO, BASED THEREON, WHEREAS ASSESSEE OFFERED ADDITIO NAL INCOME OF RS. 9,38,50,009/- WHICH IS MUCH IN EXCESS OF THE AMOUNT ARRIVED AT BY THE LD. ADDITIONAL COMMISSIONER U/S 144A. LD. AO HAS TREATE D THE ASSESSEES WORKING LIKE A PROFIT & LOSS ACCOUNT, WHEREAS IT WA S IN THE FORM OF A CONDENSED SUMMARY OF TOTAL BUSINESS TRANSACTIONS AS ON 31.03.2008. THE STATEMENT ALSO REVEALS THAT THE IMPUGNED BALANCE SH EET INCORPORATED BOTH TYPES OF TRANSACTIONS AND BALANCE SHEETS. THE WORKI NG OF UNACCOUNTED ITA NO. 827/JP/2011 SHRI BANSIDHAR AGARWAL VS. ACIT, CIRCLE- 1 , JAIPUR 10 INCOME BASED ON DIFFERENCE BETWEEN THE ASSETS FOUND MINUS LIABILITIES ALREADY SHOWN AND THE DIFFERENCE ON HIGHER SIDE IN THE ASSETS AND LIABILITIES SHOWN IN THE PAPER IMPOUNDED DURING THE SURVEY IS O NE OF THE RECOGNIZED, REASONABLE AND SCIENTIFIC METHOD FOR WORKING OUT AD DITIONAL INCOME. THE WORKING PROVIDED BY ASSESSEE IS THUS BASED ON FACTS BASED ON THE RECOGNIZED, REASONABLE AND SCIENTIFIC METHOD. THUS THE DEFERENC E OFFERED BY ASSESSEE ON BONA FIDE BASIS CAN BE REASONABLY CONSIDERED TO BE THE ADDITIONAL UNDISCLOSED INCOME AND NOT BY EXTRAPOLATING IT ON C ONJECTURES AND SURMISES. MORE PARTICULARLY WHEN IT IS ADMITTED FACT THAT DUR ING THE SURVEY EXCEPT PAPERS NO REAL ASSETS REPRESENTING THE UNDISCLOSED INCOME WERE FOUND. THUS EVEN BY GOING WITH THE ASSET/ EXPENDITURE THEORY TH ERE COULD BE NO ADDITION AT ALL. ASSESSEE WITH A VIEW TO BRING THE ISSUES TO REST OFFERED EXCESS ADDITIONAL WITHOUT THERE BEING DISCOVERY OF CORRESP ONDING ASSETS DURING SURVEY. IT IS ADMITTED BY DEPARTMENT ALSO THAT EXCE PT PAPER NO CORRESPONDING ASSETS WERE FOUND DURING SURVEY. EVEN IF THE LD. AO S OBSERVATIONS ARE GIVEN SOME CREDENCE IT WILL BE FOUND THAT INSTEAD O F TAKING THE DOCUMENT AS A WHOLE IT HAS BEEN USED IN PIECE MEAL BASIS WHICH IS NOT PERMISSIBLE IN THE EYES OF LAW AS AN IMPOUNDED DOCUMENT IS TO BE HOLIS TICALLY CONSIDERED. 4.4 LD. CIT(A) APPRECIATED THESE FACTS AND SUBMISSI ON MADE BY THE ASSESSEE AND GIVEN A FINDING OF FACT THAT THE BALAN CE SHEET FILED WITH THE ITA NO. 827/JP/2011 SHRI BANSIDHAR AGARWAL VS. ACIT, CIRCLE- 1 , JAIPUR 11 ORIGINAL RETURN IS PART OF THE ANN-24 BALANCE SHEET FOUND DURING THE COURSE OF SURVEY BY OBSERVING AT PAGE 5& 6 PARA 4.11 & 4.12 O F HIS ORDER AS UNDER: 4.11 THUS, IT IS APPARENT THAT THE BALANCE SHEET F ILED WITH THE ORIGINAL RETURN IS INCORPORATED IN THE BALANCE SHEET FOUND D URING THE COURSE OF SURVEY. THE PARTICULARS IN BOTH ARE THE SAME THERE IS ONLY A DIFFERENCE IN THE AMOUNTS. THIS CORROBORATES THE MODUS OPERAND I OF THE ASSESSEE ADMITTED BY HIM DURING COURSE OF SURVEY REGARDING M AINTAINING RECORDS OF ALL HIS TRANSACTIONS SEPARATELY. FROM TH ERE HE ENTERED SOME TRANSACTIONS IN THE BOOKS OF ACCOUNTS MAINTAINED AS PER HIS CONVENIENCE, FOR THE PURPOSE OF THE INCOME TAX DEPA RTMENT. 4.12 IN VIEW OF THE FACT THAT THE ASSESSEE HAS SURR ENDERED THE AMOUNT AS PER THE BALANCE SHEET SHOWING THE SUM TOTAL OF HIS TRANSACTIONS AS ON 01.04.2008, IT IS NOT RATIONAL NOR JUSTIFIABLE AS P ER ACCOUNTING PRINCIPLES TO ADD THE TOTALS OF BOTH THE BALANCE SH EET. PARTICULARLY WHEN IT IS CLEAR ON VERIFICATION OF BOTH THE BALANC E SHEETS THAT THE ONE FILED FOR INCOME TAX PURPOSES IS INCORPORATED IN TH E ACTUAL ONE FOUND DURING THE COURSE OF SURVEY. THEREFORE, THE ADDITIO N OF RS. 2,13,15,248/- IS DIRECTED TO BE DELETED. IN THE CIRCUMSTANCES, IT IS SUBMITTED THAT LD. CIT( A) HAS ACCORDED THE RELIEF AFTER APPRECIATING ALL THE RELEVANT FACTUAL ASPECTS , EVIDENTIARY NATURE OF IMPOUNDED DOCUMENTS, ACCOUNTING PRINCIPLES, SEC. 14 4A DIRECTIONS ETC. HIS ORDERS DELETING ABOVE DELETION DESERVES TO BE UPHEL D. 4.5 RELIANCE FOR THESE PROPOSITIONS IS PLACED ON FO LLOWING JUDICIAL PRECEDENTS:- CIT VS. S. KHADER KHAN & SON (MAD.) 300 ITR 157 INCOME TAX SURVEY SCOPE OF SECTION 133A DIFFERE NCE BETWEEN SECTIONS 133A AND 132(4) STATEMENT IN SURVEY OPERATIONS NOT CONCLUSIVE PIECE OF EVIDENCE STATEMENT BY PARTNER IN SURVEY OPERATION S REGARDING UNDISCLOSED INCOME OF FIRM SUBSEQUENT RETRACTION OF STATEMENT BY FIRM AMOUNT ITA NO. 827/JP/2011 SHRI BANSIDHAR AGARWAL VS. ACIT, CIRCLE- 1 , JAIPUR 12 DISCLOSED BY PARTNER NOT ASSESSABLE AS INCOME OF FI RM INCOME TAX ACT, 1961, SS. 132, 133A. PAUL MATHEWS AND SONS VS. CIT (KER.) 263 ITR 101 THE PROVISION ALSO ENABLES THE INCOME-TAX AUTHORITY TO IMPOUND AND RETAIN IN HIS CUSTODY FOR SUCH PERIOD AS HE THINKS FIT ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS INSPECTED BY HIM, PROVIDED THE AUTHORITY RECORDS HIS REASONS FOR DOING SO AND ALSO SHALL NOT RETAIN THE BOOKS OF ACC OUNT FOR A PERIOD NOT EXCEEDING 15 DAYS. SECTION 133A(3)(III) ENABLES THE AUTHORITY TO RECORD THE STATEMENT OF ANY PERSON WHICH MAY BE USEFUL FOR, OR RELEVANT TO, ANY PROCEEDING UNDER THE ACT. SECTION 133A, HOWEVER, EN ABLES THE INCOME-TAX AUTHORITY ONLY TO RECORD ANY STATEMENT OF ANY PERSO N WHICH MAY BE USEFUL, BUT DOES NOT AUTHORIZE TAKING ANY SWORN STATEMENT. ON THE OTHER HAND, WE FIND THAT SUCH A POWER TO EXAMINE A PERSON ON OATH IS SPECIFICALLY CONFERRED ON THE AUTHORISED OFFICER ONLY UNDER SECTION 132(4) OF THE INCOME-TAX ACT IN THE COURSE OF ANY SEARCH OR SEIZURE. THUS, THE INCO ME-TAX ACT, WHENEVER IT THOUGHT FIT AND NECESSARY TO CONFER SUCH POWER TO E XAMINE A PERSON ON OATH, THE SAME HAS BEEN EXPRESSLY PROVIDED WHEREAS SECTIO N 133A DOES NOT EMPOWER ANY INCOME-TAX OFFICER TO EXAMINE ANY PERSO N ON OATH. THUS, IN CONTRADISTINCTION TO THE POWER UNDER SECTION 133A, SECTION 132(4) OF THE INCOME-TAX ACT ENABLES THE AUTHORISED OFFICER TO EX AMINE A PERSON ON OATH AND ANY STATEMENT MADE BY SUCH PERSON DURING SUCH E XAMINATION CAN ALSO BE USED IN EVIDENCE UNDER THE INCOME-TAX ACT. ON TH E OTHER HAND, WHATEVER STATEMENT IS RECORDED UNDER SECTION 133A OF THE INC OME-TAX ACT IT IS NOT GIVEN ANY EVIDENTIARY VALUE OBVIOUSLY FOR THE REASO N THAT THE OFFICER IS NOT AUTHORISED TO ADMINISTER OATH AND TO TAKE ANY SWORN STATEMENT WHICH ALONE HAS EVIDENTIARY VALUE AS CONTEMPLATED UNDER LAW. TH EREFORE, THERE IS MUCH FORCE IN THE ARGUMENT OF LEARNED COUNSEL FOR THE AP PELLANT THAT THE STATEMENT ELICITED DURING THE SURVEY OPERATION HAS NO EVIDENT IARY VALUE AND THE INCOME-TAX OFFICER WAS WELL AWARE OF THIS. 4.6 LD. COUNSEL FURTHER CONTENDS THAT THE ASSESSEE IS AN ORDINARY BUSINESS PERSON NEITHER WELL WORSE AND NOR A TECHNICAL EXPER T ON THE INTRICACIES OF INCOME TAX LAWS, A SUO MOTU EXCESS DISCLOSURE IN RE VISED RETURN THAN AGREED IN SURVEY DEMONSTRATES THE ASSESSEES POSITI VE ATTITUDE TO IMPROVE ON HIS INADVERTENT MISTAKES MADE IN NOT KEEPING HIS RE CORD PROPERLY. INSTEAD OF ITA NO. 827/JP/2011 SHRI BANSIDHAR AGARWAL VS. ACIT, CIRCLE- 1 , JAIPUR 13 APPRECIATING ALL THESE FACTS AND EVEN BEFORE ASSESS MENT SUO MOTU DECLARING MORE UNDISCLOSED INCOME THAN AGREED DURING SURVEY, DEPARTMENT HAS UNJUSTIFIABLY MADE THE ASSESSEE A VICTIM OF TAX TE RRORISM. SUCH TACTICS HAVE BEEN RECENTLY DEPRECATED BY HONBLE PM AND FM. CBDT HAS CARVED OUT ASSESSEES CHARTER OF RIGHTS TO BE ABIDE D BY REVENUE AUTHORITIES DURING ASSESSMENTS, SURVEY AND SEARCH WHICH IS DULY PUBLISHED IN PRINT, ELECTRONIC MEDIA AS WELL AS CBDTS NATIONAL PORTAL. IT HAS BEEN DECLARED THAT THE INCOME TAX AUTHORITIES HAVE TO ACT STRICTLY IN ACCORDANCE WITH CHARTER WHILE EXERCISING THEIR POWERS INCLUDING SURVEY AND SEARCH ACTION. TO BUTTRESS HIS ARGUMENTS, LD. COUNSEL IN WRITTEN SUBM ISSIONS HAS REFERRED TO THE SPEECH GIVEN BY THE HONBLE FINANCE MINISTER ON THE FLOOR OF PARLIAMENT IN THIS BEHALF, WHILE PROPOSING TO SIMPLIFY THE PRO CEDURE OF SEARCHES AND SURVEYS WHICH READS AS UNDER:- PARA 151(I) SIMPLIFYING THE PROCEDURE AND METHODS EMPLOYED DURING SEARCH AND SEIZURE, AND DURING SURVEY BY THE INCOME TAX DEPARTMENT. FIRST, HEREAFTER, STOCKS FOUND DURING THE COURSE OF A SEARCH AND SEIZURE OPERATION WILL NOT BE SEIZED UNDER ANY CIRCUMSTANCE S. SECOND, NO CONFESSION SHALL BE OBTAINED DURING SUCH SEARCH AND SEIZURE OP ERATIONS. THIRD, NO SURVEY OPERATION WILL BE AUTHORIZED BY AN OFFICER B ELOW THE RANK OF JOINT COMMISSIONER OF INCOME TAX. FINALLY, BOOKS OF ACCOU NT IMPOUNDED DURING SURVEY WILL NOT BE RETAINED BEYOND TEN DAYS, WITHOU T THE PRIOR APPROVAL OF THE CHIEF COMMISSIONER. ITA NO. 827/JP/2011 SHRI BANSIDHAR AGARWAL VS. ACIT, CIRCLE- 1 , JAIPUR 14 THE CBDT VIDE INSTRUCTIONS NO. F.NO. 286/2/2002-IT( INV.) DATED 10.03.03 HAS FURTHER CLARIFIED THE ASSERTION MADE BY THE HON BLE FINANCE MINISTER IN BUDGET SPEECH WHICH READS AS UNDER:- INSTANCES HAVE COME TO THE NOTICE OF THE BOARD WH ERE ASSESSEE HAVE CLAIMED THAT THEY HAVE BEEN FORCED TO CONFESS UNDISCLOSED INCOME DURING THE COURSE OF THE SEARCH AND SEIZURE AND SURVEY OPERATION. SUCH CONFESSION, IF NOT BASED ON CREDIBL E EVIDENCE, ARE TAKEN/RETRACTED BY THE CONCERNED ASSESSES WHILE FILLING RETURN INCOME. IN THESE CIRCUMSTANCES, CONFESSION D URING THE SEARCH AND SEIZURE AND SURVEY OPERATION DO NOT SERV E ANY USEFUL PURPOSE. IT IS THEREFORE, ADVISED THAT THERE SHOULD BE FOCUS AND CONCENTRATION ON COLLECTION OF EVIDENCE OF INCOME W HICH LEADS TO INFORMATION ON WHAT HAS NOT BEEN DISCLOSED OR IS NO T LIKELY TO BE DISCLOSED BEFORE THE INCOME TAX DEPARTMENT. SIMILAR LY, WHILE RECORDING STATEMENT DURING THE COURSE OF SEARCH AND SEIZURE OPERATION, NO ATTEMPT SHOULD BE MADE TO OBTAIN CONF ESSION AS TO THE UNDISCLOSED INCOME HONBLE SUPREME COURT IN FOLLOWING BINDING DECISION S HAS HELD THAT BENEFICIAL CIRCULARS / INSTRUCTIONS ISSUED BY THE C BDT ARE BINDING UPON THE INCOME TAX AUTHORITIES AND ADDITIONS EXTRACTED BY S UCH UNCORROBORATED AND IRREGULAR SURRENDERS DURING THE COURSE OF SURVEY AR E UNSUSTAINABLE BEING IN CONTRAVENTION TO THE CBDT CIRCULARS AND INSTRUCTION S BINDING ON THE INCOME TAX DEPARTMENT:- (A) BINDING NATURE OF CBDT CIRCULARS: 1. 292 ITR 209 TANNA AND MODI VS. CIT (SC) PAGE 21 8 PARA 21 WE WOULD ALSO ACCEPT AND PARTICULARLY HAVING REGA RD TO A LARGE NUMBER OF DECISIONS OF THIS COURT OPERATING IN THE FIELD THAT EXECUTIVE CONSTRUCTION IS ORDINARILY ALLOWED TO PREVAIL AND S HALL BE BINDING ON THE AUTHORITIES UNDER THE ACT. A FORTIORI, CLARIFIC ATORY CIRCULARS ISSUED ITA NO. 827/JP/2011 SHRI BANSIDHAR AGARWAL VS. ACIT, CIRCLE- 1 , JAIPUR 15 BY THE CENTRAL BOARD OF DIRECT TAXES MAY ALSO BE TA KEN INTO CONSIDERATION FOR THE PURPOSE OF CONSTRUCTION OF TH E STATUTE. 2. 259 ITR 51 KERALA STATE INDUSTRIAL DEV. CORPN. LTD. VS. CIT (SC) INTERPRETATION OF TAXING STATUTES FINANCE MINIS TERS SPEECH BEFORE PARLIAMENT WHILE INTRODUCING BILL CAN BE RELIED O N TO THROW LIGHT ON OBJECT AND PURPOSE OF PROVISIONS. 3. 273 ITR 305 CIT VS. DURGESH OIL MILLS (ALL.) CIRCULAR CBDT CIRCULAR BINDING ON INCOME TAX AUTHORITIES. IT IS WELL SETTLED THAT THE CIRCULAR ISSUED BY TH E CENTRAL BOARD OF DIRECT TAXES IS BINDING ON AUTHORITIES. 4. 291 ITR 172 CIT VS. ASHOK KUMAR SONI (RAJ.) ADMISSION IN STATEMENT DURING SEARCH NOT A CONC LUSIVE PROOF OF FACT AND CAN ALWAYS BE EXPLAINED RETRACTED STATEM ENT OF ASSESSEE SECOND STATEMENT TO BE READ TOGETHER TO EVALUATE WE IGHT OF ADMISSION FOR APPRECIATING EVIDENCE. 5. 328 ITR 384 CIT VS. DHINGRA METAL WORKS (DELHI) SURVEY- DISCREPANCY IN STOCK AND CASH-ADDITION ON BASIS OF STATEMENT MADE DURING SURVEY-ASSESSEE LATER CONTEND ING THAT STATEMENT INCORRECT AND THAT DISCREPANCY RECONCILED AS IT WAS A MISTAKE-STATEMENT MADE UNDER SECTION 133A NOT CONCL USIVE PROOF- ASSESSEE ABLE TO EXPLAIN DISCREPANCY IN STOCK BY PR ODUCTION OF RELEVANT RECORD - ADDITION TO BE DELETED-INCOME-TAX ACT, 1961, S. 133A. 5.1 APROPOS REVENUE GROUND NO. 2 LD. AO MADE AN ADD ITION OF RS. 3,45,000/- ON ACCOUNT OF ENTRIES FOUND NOTED IN THE IMPOUNDED MATERIAL MARKED AS A-14, DURING THE COURSE OF SURVEY HAS ENQ UIRED ABOUT THE CONTENTS THEREOF; THERE IS NO WHISPER OF ANY CODING OR DE CODING OF FIGURES. THIS INDICATES THAT ALL THE ENTRIES WERE DISCERNIBLE, LD . AO HAS REPRODUCED THE CONTENTS OF THE SAID PAPER AT PAGE 9 OF THE ASSESSM ENT ORDER WHOSE TOTAL IN ITA NO. 827/JP/2011 SHRI BANSIDHAR AGARWAL VS. ACIT, CIRCLE- 1 , JAIPUR 16 MONETARY TERMS COMES TO RS. 3,450/- WHICH HAS BEEN EXTRAPOLATED TO RS. 3,45,000/- BY ADDING TWO ZEROS AND OBSERVING THAT FURTHER, GOING BY THE PRACTICE OF PUTTING FIGURES IN CODE I.E., BY DOUBLE ZERO SUPPRESSION, IT CAN BE SAFELY CONCLUDED THAT THIS FIGURE OF RS. 3,450/- ACTUALLY MEANS RS. 3,45,000/-. 5.2 LD. COUNSEL VEHEMENTLY CONTENDS THAT ONCE AS A RESU LT OF SURVEY CONSOLIDATED ADDITIONAL INCOME WAS DECLARED AND SUO MOTU INCREASED BY ASSESSEE AS MENTIONED ABOVE THERE IS NO JUSTIFICATI ON TO ACCEPT THAT AS WELL AS GO ON ADDING FURTHER INCOME WHICH AMOUNTS TO TAXING SAME INCOME TWICE. LD. COUNSEL REFERRED TO THE LETTER FILED BEFORE THE LD. AO ON 22.09.2008 PLACED AT PB-17 WHEREIN IT WAS CLEARLY STATED THAT ALL THE ENTRIES FOUND NOTED IN THE PAGES FOUND AND IMPOUNDED DURING THE SURVEY WERE CONSIDERED FOR COMPUTING THE ADDITIONAL INCOME. SUCH WRITINGS ARE ELIGIBLE FOR PEAK WORKING, TELESCOPING AND SET OFF ETC.. 5.3 THE LD. CIT(A) APPRECIATED THE FACTS AND CONTEN TIONS AND HAD DELETED THE ADDITION BY OBSERVING AT PAGE 10 PARA 6.4 & 6.5 OF THE ORDER AS UNDER: 6.4 I HAVE CAREFULLY PERUSED THE ORDER OF THE AO S UBMISSIONS OF THE AR AND THE CONCERNED DOCUMENTS. NEITHER THE AO NOR THE AR HAS GIVEN ANY SPECIFIC INFORMATION / COMMENT REGARDING THE NA TURE OF THESE ENTRIES. ON PERUSAL OF THESE ENTRIES IT IS SEEN THA T THEY APPEAR TO BE INTEREST BECAUSE THE DATE HAS BEEN MENTIONED REGULA RLY FOR A TWO MONTH PERIOD FOR THE SAME AMOUNT. FOR EXAMPLE 400 / D. MODI 25.9 TO 2.11. THEN 400 / RAJENDRA 01.11.07 TO 2.1.08. THUS, IT APPEAR THAT THESE ARE ENTERED FOR INTEREST PAYMENT RECEIVED. MO REOVER, ON PERUSAL OF PAGE 1 OF ANNEXURE 24 IT IS SEEN THAT SHRI RAJEN DRA JI WAS DEBTOR WHO HAS SQUARED UP HIS ACCOUNT WITH THE ASSESSEE AS ON 01.04.2008. ITA NO. 827/JP/2011 SHRI BANSIDHAR AGARWAL VS. ACIT, CIRCLE- 1 , JAIPUR 17 6.5 SINCE, THE CASH BALANCE OF THE ASSESSEE IN THIS BALANCE SHEET IS RS. 18,20,852/- COMPARED TO THAT REFLECTED IN THE BALAN CE SHEET FILED WITH INCOME TAX RETURN INITIALLY BEING RS. 6,57,897/-, I T IS HELD THAT THIS AMOUNT BEING THE INTEREST INCOME OF THE ASSESSEE DU RING THE YEAR HAS BEEN INCLUDED IN THIS CASH BALANCE ON THE BASIS OF WHICH THE SURRENDER HAS BEEN MADE. THEREFORE, THE IMPUGNED ADDITION OF RS. 3,45,000/- IS DIRECTED TO BE DELETED. 5.4 SINCE, THE ADDITIONAL INCOME OFFERED AT RS. 9,3 8,50,009/- IS COMPUTED ON THE BASIS OF A DOCUMENT PREPARED AT THE END OF T HE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR UNDER APPEAL AND THE LOOSE PAPER UNDER REFERENCE CONTAINED THE ENTRIES PRIOR TO THE END OF THE PREVI OUS YEAR, THUS THE SAME STOOD COVERED IN THE MEMORANDA STATE OF AFFAIRS AS AT 31.03.2008 AND ANY FURTHER ADDITION IS NOT WARRANTED. IT IS THEREFORE, CONTENDED BY LD. COUNSEL THAT THE LD. CIT(A) HAS RIGHTLY DELETED THE ADDITIO N AND THUS THE ORDER OF LD. CIT(A) DESERVES TO BE UPHOLD ON THIS SCORE. 6.1 APROPOS REVENUE GROUND NO.3, IT IS CONTENDED T HAT LD. AO DISALLOWED AD HOC 20% OUT OF FOLLOWING EXPENSES FOR POSSIBLE P ERSONAL USE WHICH HAS BEEN DELETED BY THE LD CIT(A):- PARTICULARS CLAIMED EXPENSES DISALLOWANCE @ 20% MOTOR CAR EXPENSES 1,18,235.00 23,647.00 DEPRECIATION ON CAR 37,091.00 7,418.00 TOTAL DISALLOWANCE 31,065.00 ITA NO. 827/JP/2011 SHRI BANSIDHAR AGARWAL VS. ACIT, CIRCLE- 1 , JAIPUR 18 THESE EXPENSES ARE FULLY VOUCHED AND INCURRED UNDER THE BUSINESS COMPULSION AND COMMERCIAL EXPEDIENCY AND ARE WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF THE BUSINESS FURTHERMORE DEPRECIATIO N IS A STATUTORY DEDUCTION HENCE THE SAME CANNOT BE DISALLOWED. RELIANCE IS PL ACED ON THE FOLLOWING CASE LAW:- (1) S.A. BUILDERS LTD. VS. CIT 158 TAXMAN 74 (SC) (2) 35 TW 64 ITO VS. M/S TRIVENI FARMA (JAIPUR) (3) 92 TTJ 1060 MUKESH K. SHAH VS. ITO (MUMBAI) 6.2 LD. DR SUPPORTED THE ORDERS OF AO. 6.3 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. APROPOS THE FIRST REVENUE GROU ND FROM THE RECORD, IT EMERGES THAT THERE ARE SUFFICIENT REASONS TO INFER THAT THE BALANCE SHEET FOUND DURING THE COURSE OF SURVEY IS AN INTERMIX OF BALAN CE SHEET FILED WITH THE ORIGINAL RETURN AND UNDISCLOSED TRANSACTIONS. THE C ONTENTS OF MANY NAMES AND ENTRIES ARE NEARLY SAME IN BOTH WITH SOME DIFFE RENCE IN THE AMOUNTS. THE MODUS OPERANDI HAS BEEN EXPLAINED BY THE ASSESSEE D URING THE COURSE OF SURVEY AND HIS DISCLOSURE, MAINTENANCE OF RECORD, N ATURE OF TRANSACTIONS WERE AGREED BY SURVEY PARTY. IN SURVEY STATEMENT ASSESS EE MADE A SURRENDER OF RS. 3,50,42,961/- AS ADDITIONAL INCOME, NO DISPUTE ON THIS AMOUNT WAS RAISED BY SURVEY PARTY. THEREAFTER, ASSESSEE BEFORE ANY FU RTHER DETECTION BY ITA NO. 827/JP/2011 SHRI BANSIDHAR AGARWAL VS. ACIT, CIRCLE- 1 , JAIPUR 19 DEPARTMENT AND BEFORE ASSESSMENT PROCEEDINGS, SUO M OTU AND WITHOUT ANY INSISTENCE BY THE DEPARTMENT, FURTHER INCREASED THE SURRENDER OF UNDISCLOSED INCOME AT RS. 9,38,50,009/- FOR ALL IMPUGNED TRANSA CTIONS. THUS ASSESSEE DEMONSTRATED THAT HE WANT TO COME CLEAN IN THIS BEH ALF. DEPARTMENT HAS ACCEPTED THIS ADDITIONAL INCOME DECLARATION, THERE IS NO DISPUTE ON THE ISSUE OF REVENUES POWER TO GIVE UP ANY AGREEMENT ON SURRE NDERED INCOME. HOWEVER IT IS TO BE BORNE IN MIND THAT DEPARTMENT C ANNOT CHOSE BOTH I.E. TAX THE ASSESSEE ON ENHANCED SURRENDERED AND FURTHER GO ON ADDING SEPARATE ENTRY ONE BY ONE ON ASSUMPTIONS. THE FAIR COURSE WI LL BE TO TAKE EACH ENTRY, QUANTIFY EACH AND MAKE SEPARATE ADDITION FOR EACH. IT IS VERY UNJUSTIFIED TO ADD THE SURRENDER AND FURTHER ADD EACH ITEM, THIS A MOUNT TO DOUBLE JEOPARDY WHICH IS NOT PERMISSIBLE. LOOKING AT THE ENTIRETY OF CIRCUMSTANCES AND FACT THAT THE ASSESSEE ENHANCED HIS SURRENDER FROM RS. 3 ,50,42,961/- TO RS. 9,38,50,009/-; THE FACT THAT THE BALANCE SHEET REF LECTS THE SUM TOTAL OF HIS TRANSACTIONS AS ON 01.04.2008, IT IS NOT JUSTIFIABL E TO ADD THE TOTALS OF BOTH THE BALANCE SHEETS. ON VERIFICATION OF BOTH THE BALANCE SHEETS IT EMERGE THAT THE ONE FILED FOR INCOME TAX PURPOSES IS PART OF AND IN CORPORATED IN THE ONE FOUND DURING THE COURSE OF SURVEY. THEREFORE, IN OU R CONSIDERED VIEW, THE ADDITION OF RS. 2,13,15,248/- AS EXCESS LIABILITIES HAS BEEN RIGHTLY DELETED BY ITA NO. 827/JP/2011 SHRI BANSIDHAR AGARWAL VS. ACIT, CIRCLE- 1 , JAIPUR 20 LD. CIT(A). HIS ORDER ON THIS ISSUE IS UPHELD, THIS GROUND OF REVENUE IS DISMISSED. 7.1 APROPOS SECOND REVENUE GROUND IN THE ENTIRE SUR VEY PROCEEDINGS, STATEMENT THERE IS NO REFERENCE TO ANY CODED FIGURE S. LD. CIT(A) HAS RENDERED CLEAR FINDING OF FACT THAT THESE ENTRIES A PPEAR TO BE OF INTEREST BECAUSE THE DATE HAS BEEN MENTIONED REGULARLY FOR A TWO MONTH PERIOD FOR THE SAME AMOUNT. LD. CIT(A) HAS CITED EXAMPLES OF - 400 / D. MODI 25.9 TO 2.11. THEN 400 / RAJENDRA 01.11.07 TO 2.1.08; PERUS AL OF PAGE 1 OF ANNEXURE 24 IT IS SEEN THAT SHRI RAJENDRA JI WAS DEBTOR WHO HAS SQUARED UP HIS ACCOUNT WITH THE ASSESSEE AS ON 01.04.2008. LD. DR COULD NOT DISPEL SUCH FACTUAL FINDINGS. FURTHER IT IS FOUND THAT ASSESEE S CASH BALANCE AS PER BALANCE SHEET IS RS. 18,20,852/- AND THIS AMOUNT B EING THE INTEREST INCOME OF THE ASSESSEE DURING THE YEAR HAS BEEN INCLUDED I N THIS CASH BALANCE ON THE BASIS OF WHICH THE SURRENDER HAS BEEN MADE. IN OUR CONSIDERED VIEW THE IMPUGNED ADDITION OF RS. 3,45,000/- HAS BEEN RIGHTL Y DELETED BY LD. CIT(A), WHICH ORDER DESERVES TO BE UPHELD. THIS GROUND OF R EVENUE IS DISMISSED. 8.1 APROPOS THE THIRD SMALL REVENUE GROUND THE EXPE NSES ARE NOT DISPUTED TO BE VOUCHED AND INCURRED UNDER THE COURSE OF BUSI NESS AND COMMERCIAL EXPEDIENCY, DEPRECIATION IS A STATUTORY DEDUCTION H ENCE THE SAME CANNOT BE DISALLOWED. NO INSTANCE OF PERSONAL USER HAS BEEN C ITED. WE SEE NO INFIRMITY ITA NO. 827/JP/2011 SHRI BANSIDHAR AGARWAL VS. ACIT, CIRCLE- 1 , JAIPUR 21 IN THE ORDER OF LD. CIT(A) DELETING THE DISALLOWANC E OF RS. 31,065/-. THIS GROUND OF REVENUE IS ALSO DISMISSED. 9.1 APROPOS ASSESSEES APPEAL LD. COUNSEL FOR THE A SSESSEE CONTENDS THAT DURING THE COURSE OF SURVEY STATEMENTS OF THE ASSES SEE, HIS SON SHRI NARAIN LAL AGARWAL (NLA) AND EMPLOYEES WERE RECORDED. SURR ENDER OF UNDISCLOSED INCOME TOWARDS INVESTMENT AND EXPENDITURE WAS OBTAI NED. THE RELEVANT EXTRACT OF THE STATEMENTS OF ASSESSEES SON NLA IS AS UNDER: IZU 36% VKT LOSZ DS NKSJKU ES- VXZOKY ,.M DEIUH DS ;GKA CGQR LS LOOSE PAPERS FEYSA GSA FTUDKS VK;DJ VF/KFU;E DH /KKJK 133 A(3)(IA) DS RGR~ IMPOUND DJ FY;K X;K GS FTLESA FORRH; O'KZ 2007&08 O 2008&09 LS LACA F/KR DKXTKR GSA] TKS FD FU;FER IQLRDKSA ESA NTZ UGHA GSA BL CKJS ESA VIUK L I'VHDJ.K NSAA MKJ% ESAUS MDR LHKH LOOSE PAPERS O UKSV CQD VKFN DKS NS[K FY;K GS BUESA LS CGQR LS DKXTKSA DK VHKH LI'VHDJ.K UGHA NS IK JGK GWW BUESA LS CGQR LS ,SLS DKXTKR GKSAXS TKS FU;FER IQLRDKS ESA NTZ UGHA GKSAXSA BL ISVS ES FOFRR; O'KZ 2007&08 :- 8]00]000@& DH VFRFJDR VK;] VK;DJ DS FY, ESA- VXZOKY ,AM+ DEIUH ESA LEFIZR DJRK GWWA ;GKA ESA ;G HKH DGUK PKGRK GWW FD ESA VIU S C;KUKSA ESA FOFRR; O'KZ 2007&08 ESA TEHU DH [KJHN ES FD, X, V?KKSF'KR FUOSK 32]43] 730@& :- O EDKU FUEKZ.K ESA FD, X, V?KKSF'KR FUEKZ.K DS ISVS :- 19]28]289@& O V U; LOOSE PAPERS ESA BUNZKT V?KKSF'KR VK; DS ISVS :- 23]50]000@& ESA- VX ZOKY ,AM+ DEIUH ESA FU;EKUQLKJ VK;DJ VNK DJUS DS FY, LEFIZR DJRK GWWA BLH IZDKJ FO FRR; O'KZ 2008&09 ESA ESA- VXZOKY ,AM DEIUH ESA LOSZ DH DK;ZOKGH DS NKSJKU IK, X, V?KKSF'KR LVKWD :- 2]94]99]247@&] UXN M/KKJ DS ISVS :- 29]00]000@&] ED KU DS FUEKZ.K ES FD, X, V?KKSF'KR FUOSK DS ISVS :- 14]43]714@& O VKKSD VX ZOKY DKS V?KKSF'KR VK; LS FN, X, M/KKJ DS ISVS :- 4]00]000@& O VU; LOOSE PAPERS ESA FOFRR; O'KZ 2008&09 LS LACAF/KR V?KKSF'KR VK; DS ISVS :- 8]00]000@& VK; DJ DS FY, LEFIZR FD, GSA VFKKZR~ ES- VXZOKY ,AM DEIUH ESA FOFRR; O'KZ 2008&0 9 DS FY, DQY :- 3]50]42]961@& V?KKSF'KR VK; EKURS GQ, FU;EKUQLKJ VK ;DJ DS FY, LEFIZR DJRK GWWA FOFRR; O'KZ 2007&08 DS FY, ESA- VXZOKY ,AM DEI UH ES DQY :- 75]22]019@& V?KKSF'KR VK; EKURS GQ, FU;EKUQLKJ VK;DJ DS FY, LEF IZR DJRK GWWA ESAUS ;G C;KU ESA- VXZOKY ,AM DEIUH DS IZKSIJKBZVJ JH CAKH/KJ VXZOKY DS LE{K TKS ESJS FIRK GSA FD LGEFR LS FN, GS BLDS ISVS ESA JH C AKH/KJ VXZOKY }KJK ESA- VXZOKY ,AM+ DEIUH DS IKAP PSD VFXZE DJ FOFRR; O'KZ 2008&0 9 DS FY, O LO% FU/KKZJ.K DJ FOFRR; O'KZ 2007&08 DS FY, VKIDKS FN, TK JGS G SAA ESA ;G FOOKL FNYKUK PKGRK GWW FD ESA VIUK O ESJS FIRK CAKH/KJ VXZOKY } KJK ?KKSF'KR VK; TKS FD FU;FER ITA NO. 827/JP/2011 SHRI BANSIDHAR AGARWAL VS. ACIT, CIRCLE- 1 , JAIPUR 22 YS[KK IQLRDKS DS VYKOK GS IJ FU;EKUQLKJ VFXZE DJ ,O A LOR% DJ FU/KKZJ.K DJ NS NWAXKA PWAFD ESA- VXZOKY ,AM DEIUH DK DKEDKT ESA HK H NS[KRK GWWA IT EMERGES FROM THE RECORD THAT STATEMENT OF SON NL A HAS BEEN DULY SECONDED BY THE ASSESSEE ALSO IN HIS OWN STATEMENT RECORDED ON 12.09.2008 IN REPLY TO Q.NO. 7. A HARMONIOUS CONCLUSION WHICH CAN BE DRAWN FROM ALL THESE FACTS AND CIRCUMSTANCES IS TO THE EFFECT THAT THE INVESTMENT IN THE IMPUGNED PROPERTY WAS MADE BY THE SON NLA AND IT BE LONGED TO HIM. NO INVESTMENT WHATSOEVER WAS MADE BY ASSESSEE THEREIN. IT IS SETTLED LAW THAT THE STATEMENT WHICH IS RELIED ON BY THE DEPARTMENT ITSELF CANNOT BE DISTORTED TO IN PARTS TO SUIT THE REVENUES CAUSE. DURING SURV EY QUA SOME LOOSE PAPERS INCLUDING PAGE 5 OF EXHIBIT A-14 ASSESSEE SON, IN R EPLY TO QUESTION NO. 18 OF THE STATEMENT CATEGORICALLY STATED THAT THESE ENTRI ES RELATED TO THE PURCHASES OF PLOT OF LAND IN HIS OWN NAME FOR A TOTAL CONSIDE RATION OF RS. 45,40,200/-. SIMILARLY IN REPLY TO QUESTION NO. 23 HE FURTHER AD MITTED IN THIS BEHALF AN AMOUNT RS. 30,40,200/- AS HIS UNDISCLOSED INVESTMEN T. LD. AO INSTEAD ARBITRARILY MADE AN ADDITION OF RS. 32,43,730/- IN THIS BEHALF IN THE HANDS OF ASSESSE, WITHOUT REFUTING THE SON NLAS CLEAR STATE MENT ADMITTING INCOME IN HIS HANDS IN THIS BEHALF. IGNORING THE COPIOUS MAT ERIAL AVAILABLE ON RECORD, LD. AO ARBITRARILY MADE THE ADDITION IN QUESTION WI THOUT CITING ANY COGENT REASON FOR NOT RELYING ON THE SONS STATEMENT ON OA TH BY OBSERVING AS UNDER IN THE ASSESSMENT ORDER: ITA NO. 827/JP/2011 SHRI BANSIDHAR AGARWAL VS. ACIT, CIRCLE- 1 , JAIPUR 23 THE FACT THAT THIS PURCHASE OF PLOT WAS MADE OUT O F FUNDS AVAILABLE OUTSIDE THE BOOKS OF ASSESSEE AND IS NOT REFLECTED IN THE SURRENDERED INCOME AS PER THE REVISED RETURN OF THE ASSESSEE, THE SAME IS ADDED TO THE INCOME OF THE ASSESSEE. LD. AO CONVENIENTLY LOST SIGHT OF THE FACT THAT IMP UGNED INVESTMENT WAS OWNED BY SON BY A SWORN STATEMENT WHICH FOR ALL PUR POSES REMAINS UNCONTROVERTED ON THE RECORD. THIS MATERIAL AND CLI NCHING FACT CANNOT BE IGNORED OR BRUSHED ASIDE. IF SON HAS ADMITTED THE I NCOME THERE IS NO REASON WHY ASSESSEE WILL ALSO OFFER IT AS HIS INCOME. THER E IS NO MERIT IN LD. AOS HOLDING THAT ASSESSEE HAS GONE BACK ON HIS STATEMEN T, IT IS A PATENTLY ERRONEOUS OBSERVATION IN THESE CIRCUMSTANCES. BESID E LD. AO HAS FAILED TO SUBSTANTIATE THAT UNDISCLOSED INVESTMENT IS MADE BY ASSESSE BASED ON ANY COGENT EVIDENCE, REASON OR LOGIC. 9.2 IN THE ALTERNATIVE, IT IS SUBMITTED THAT RS. 9 ,38,50,009/- OFFERED BY THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION, THE ASSE SSEE HAS ALSO OFFERED ADDITIONAL INCOME OF RS. 40,00,000/- IN RESPECT OF ASSESSMENT YEAR 2009-10 WHILE FILING THE RETURN OF INCOME FOR A.Y. 2009-10 WHICH IS NOT BACKED BY ANY EVIDENCE; THE SAME WAS OFFERED BONA FIDE TO BY PEACE AND TO COOPERATE WITH THE DEPARTMENT, IT HAS BEEN DULY ACCEPTED BY T HE DEPARTMENT IN THE ASSESSMENT COMPLETED U/S 143(3) OF THE I.T. ACT,196 1 FOR THE ASSESSMENT YEAR 2009-10 AND SUCH ADDITIONAL INCOME OFFERED IS SUFFICIENT TO COVER THE ALLEGED INVESTMENT IN PURCHASES OF PROPERTY THEREFO RE NO SEPARATE ADDITION ITA NO. 827/JP/2011 SHRI BANSIDHAR AGARWAL VS. ACIT, CIRCLE- 1 , JAIPUR 24 SHOULD BE MADE. THEREFORE, GOING BY TELESCOPING THE ORY ALSO NO SEPARATE ADDITION ON THIS ACCOUNT IS CALLED FOR AND THUS THE ADDITION OF RS. 32,43,730/- SO MADE AND SUSTAINED DESERVES TO BE DELETED. 9.3 LD. DR RELIED ON THE ORDER OF AUTHORITIES BELO W AND CONTENDS THAT. 9.4 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. AS THE FACTS EMERGE SWORN STAT EMENT OF NLA HAS BEEN DULY ENDORSED BY THE ASSESSEE TO THE EFFECT THAT TH E INVESTMENT IN THE IMPUGNED PROPERTY WAS MADE BY THE SON NLA A FACT WH ICH IS UNCONTROVERTED AND CLINCHES THE ISSUE IN FAVOUR OF THE ASSESSEE. THERE IS NO MATERIAL TO SUGGEST THAT INVESTMENT IN THIS BEHALF WAS MADE BY ASSESSSEE. DURING SURVEY PROCEEDINGS IN RESPECT OF LOOSE PAPER S INCLUDING PAGE 5 OF EXHIBIT A-14 ASSESSEE SON, IN REPLY TO QUESTION NO. 18 OF THE STATEMENT CATEGORICALLY STATED THAT THESE ENTRIES RELATED TO THE PURCHASES OF PLOT OF LAND IN HIS OWN NAME FOR A TOTAL CONSIDERATION OF RS. 45 ,40,200/-. IN REPLY TO QUESTION NO. 23 ALSO NLA ADMITTED AMOUNT RS. 30,40, 200/- AS HIS UNDISCLOSED INVESTMENT. IN OUR VIEW WITHOUT DISLODG ING NLAS CLEAR STATEMENT,, LD. AO MADE AN ADDITION OF RS. 32,43,73 0/- IN THIS BEHALF IN THE HANDS OF ASSESSEE ON SURMISES. THERE IS NO MERIT IN SUSTAINING THE ADDITION ON THE BASIS OF AOS VAGUE OBSERVATION THAT: THE FACT THAT THIS PURCHASE OF PLOT WAS MADE OUT O F FUNDS AVAILABLE OUTSIDE THE BOOKS OF ASSESSEE AND IS NOT REFLECTED IN THE ITA NO. 827/JP/2011 SHRI BANSIDHAR AGARWAL VS. ACIT, CIRCLE- 1 , JAIPUR 25 SURRENDERED INCOME AS PER THE REVISED RETURN OF THE ASSESSEE, THE SAME IS ADDED TO THE INCOME OF THE ASSESSEE. SINCE THE IMPUGNED INVESTMENT WAS OWNED BY SON BY A N UNCONTROVERTED SWORN STATEMENT, THERE IS NO REASON TO EXPECT ASSES SEE TO OFFER OR TAX IT IN HIS HANDS. THUS THERE IS NO SUBSTANCE IN INFERRING OR A SSUMING THAT ASSESSEE WENT BACK ON HIS STATEMENT. IN VIEW OF THESE FACTS AND C IRCUMSTANCES WE HOLD THAT REVENUE HAS FAILED TO SUBSTANTIATE THAT UNDISCLOSED INVESTMENT IS MADE BY ASSESSE BASED ON ANY COGENT EVIDENCE, REASON OR LOG IC. 9.5 SINCE WE ARE DELETING THE ADDITION ON MERITS, THERE IS NO NECESSITY TO ADJUDICATE THE ALTERNATIVE CLAIM PUT FORTH BY THE A SSESSEE. THE GROUNDS RAISED BY ASSESSE IN THIS BEHALF ARE ACCORDINGLY ALLOWED. HENCE, REVENUES APPEAL NO. ITA/1042/11 IS DISMISS ED AND THAT OF ASSESSEE NO. ITA/827/JP/2011 IS ALLOWED. ASSESSEE APPEAL- ITA NO. 104/JP/2014 CONSEQUENTIA L PENALTY 271 (1) (C) 10.1 MAIN GROUND RAISED BY THE ASSESSEE IS AS UNDER . 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) HAS GROSSLY ERRED IN CONFIRMING PENA LTY OF RS. 11,02,544/- LEVIED U/S 271(1)(C) OF THE I.T. ACT, A RBITRARILY. 10.2 WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE PENALTY IN QUESTION HAS BEEN IMPOSED QU A THE ADDITION SUSTAINED BY THE LD. CIT(A). SINCE WE HAVE DELETED THE IMPUGN ED ADDITION, THEREFORE, NO PENALTY IS IMPOSABLE. THE SAME IS DELETED, ASSES SEES GROUND IN THIS ITA NO. 827/JP/2011 SHRI BANSIDHAR AGARWAL VS. ACIT, CIRCLE- 1 , JAIPUR 26 BEHALF IS ALLOWED. HENCE THIS APPEAL NO. ITA/104/J P/14 OF THE ASSESSEE IS ALLOWED. 11.0 IN THE RESULT THE APPEALS OF THE ASSESSEE BEAR ING ITA NO. 827/JP/2011 AND 104/JP/2014 ARE ALLOWED AND THAT OF THE REVENUE BEARING ITA NO. 1042/JP/2011 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 /04/2 016. SD/- SD/- FOE FLAG ;KNO VKJ-IH-RKSYKUH (VIKRAM SINGH YADAV) (R.P.TOLANI) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 26 /04/ 2016 *MISHRA VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI BANSIDHAR AGARWAL, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT-THE ACIT, CIRCLE- 1, JAIPUR 3. VK;DJ VK;QDRVIHY ) @ CIT(A) 4. VK;DJ VK;QDR@ CIT 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.827/JP/2011) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR