BADRI NARAIN SODANI, Jaipur V. JCIT, Jaipur

ITA 872/JPR/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5131 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 19-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K L MOOLCHANDAN I
• Keywords: Rectification of order; Loose papers; Document seized; Principle of natural justice; Peak credit; Assessment record; Block assessment; Revised return; Documents seized
• Section: 132; 154; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCH, JAIPUR BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER AND SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER ./ ITA NOS. 872 TO 875/JP/2013 / ASSESSMENT YEARS : 2007-08 TO 2010-11 SHRI BADRI NARAIN SODANI, 38, JAI JAWAN-II, TONK ROAD, JAIPUR PAN : AJAPS 1375 F VS DY. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-2, JAIPUR ./ ITA NOS. 899 TO 901/JP/2013 / ASSESSMENT YEARS : 2008-09 TO 2010-11 DY. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-2, JAIPUR VS SHRI BADRI NARAIN SODANI, 38, JAI JAWAN-II, TONK ROAD, JAIPUR PAN : AJAPS 1375 F / (APPELLANT) / (RESPONDENT) REVENUE BY : SHRI M. S. MEENA, CIT-DR ASSESSEE BY : SHRI K. L. MOOLCHANDANI, ADVOCATE / DATE OF HEARING : 25/05/2016 / DATE OF PRONOUNCEMENT: 26 /07/2016 !' !' !' !' / O R D E R PER R.P. TOLANI, JUDICIAL MEMBER:- THIS IS A SET OF CROSS APPEALS FILED BY ABOVE ASSES SEE AND REVENUE ARISING FROM THE ASSESSMENTS FRAMED CONSEQUENT TO S EARCH OPERATIONS CARRIED OUT U/S 132 OF THE ACT ON ONE SODHANI SWEE TS GROUP; ASSESSEE WAS ALSO SEARCHED ON 20.10.2009. VARIOUS ADDITIONS ARE MADE IN ASSESSMENT; IN THE FIRST APPEAL, PARTIAL RELIEF WAS ALLOWED BY LD CIT(A) VIDE ITA NOS. 872 TO 875/JP/2013-ASSESSEES APPEAL ITA NOS. 899 TO 901/JP/2013- DEPTTS APPEAL SHRI BADRI NARAIN SODANI VS. DCIT AYS : 2007-08 TO 2010-11 2 ORDERS DTD 11-9-2013 FOR AYS 200708 AND DATED 12-9- 2013 FOR AYS 2009-10 AND 2010-11. AGGRIEVED BOTH THE PARTIES ARE BEFORE US ON RESPECTIVE GROUNDS:- ASSESSEES APPEAL FOR AY 2007-08 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE LEARNED CIT(APPEAL) HAS FACTUALLY AND LEGALLY ERRED IN CONF IRMING ADDITION TO THE EXTENT OF RS.20,50,000/- U/S 69 OF THE ACT OUT OF TOTAL ADDITIONS OF RS.35,80,000/- MADE BY THE AO WITHOUT APPRECIATING THE FACTS OF THE CASE IN RIGHT PERSPECTIVE. THE ADDITION SO MADE AN D CONFIRMED BY THE AUTHORITIES BELOW DESERVES TO BE DELETED. ASSESSEES APPEAL FOR AY 2008-09 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LEARNED CIT(APPEAL) HAS FACTUALLY AND LEGALLY ERRED NOT ONL Y IN CONFIRMING ADDITION OF RS.1,11,35,000/- MADE U/S 69 OF THE ACT WITHOUT APPRECIATING THE FACTS OF THE CASE IN RIGHT PERSPEC TIVE BUT ALSO IN ENHANCING THE SAID ADDITION TO RS.1,41,65,000/- ARB ITRARILY AND ON FLIMSY GROUNDS. IN THE PROCESS, THE BASIC AND VITA L FACTS OF THE FINANCING PATTERN AS NOTICED DURING THE COURSE OF SEARCH PROCEEDINGS AND ALSO AS EXPLAINED DURING THE ASSESS MENT AND APPEAL PROCEEDINGS WERE IGNORED SUMMARILY FOR NO RE ASON. THUS THE ADDITION SO MADE AND ENHANCED DESERVES TO BE DE LETED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LEARNED CIT(APPEAL) HAS FACTUALLY AND LEGALLY ERRED IN WORK ING OUT THE INTEREST INCOME AT RS.19,45,800/- AS AGAINST RS.5,4 5,483/- WORKED OUT BY THE AO WITHOUT APPRECIATING THE FACTS OF THE CASE IN RIGHT PERSPECTIVE. THOUGH NO SEPARATE ADDITION ON ACCOUN T OF SUCH WORKING OF THE ENHANCED INTEREST INCOME HAS BEEN MA DE UNDER TELESCOPING THEORY YET THE WORKING OF SUCH INTEREST INCOME BY THE LD. AO AND ENHANCED BY THE LD. CIT(A) IS ABSURD AND WITHOUT ANY BASIS. THE SAME DESERVES TO BE QUASHED. ASSESSEES APPEAL FOR AY 2009-10 ITA NOS. 872 TO 875/JP/2013-ASSESSEES APPEAL ITA NOS. 899 TO 901/JP/2013- DEPTTS APPEAL SHRI BADRI NARAIN SODANI VS. DCIT AYS : 2007-08 TO 2010-11 3 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LEARNED CIT(APPEAL) HAS FACTUALLY AND LEGALLY ERRED IN PASS ING A WELL REASONED AND SELF-SPEAKING ORDER WITHOUT GIVING CAT EGORICAL AND SPECIFIC FINDINGS REGARDING THE RELIEF ALLOWED AND THE INCOME FINALLY DETERMINED FOR THE YEAR. THUS THE ORDER SO PASSED IS BAD IN LAW AND DESERVES TO BE REVISITED IN THE LIGHT OF DETAIL ED SUBMISSIONS AS MADE REGARDING MONEY-LENDING BUSINESS ACTIVITIES AS CARRIED OUT BY THE APPELLANT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE AUTHORITIES BELOW HAVE FACTUALLY AND LEGALLY ERRED IN WORKING O UT THE INTEREST INCOME AT RS.9,46,581/- BY THE AO AND ENHANCED TO R S.19,45,800/- BY THE LD. CIT(A) WITHOUT APPRECIATING THE FACTS OF THE CASE IN RIGHT PERSPECTIVE AND ALSO IN ABSENCE OF ANY MATERIAL ON RECORD. 3. THE LD. CIT(A) HAS ENHANCED THE INCOME UNDER THI S HEAD WITHOUT JURISDICTION AS NO OPPORTUNITY WHATSOEVER WAS ALLOW ED TO THE APPELLANT FOR SUCH ENHANCEMENT. IN ABSENCE OF SUCH OPPORTUNITY, THE ENHANCEMENT SO MADE IS BAD IN LAW AND DESERVES TO BE DELETED SUMMARILY. ASSESSEES APPEAL FOR AY 2010-11 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LEARNED CIT(APPEAL) HAS FACTUALLY AND LEGALLY ERRED IN PASS ING A WELL REASONED AND SELF-SPEAKING ORDER WITHOUT GIVING CAT EGORICAL AND SPECIFIC FINDINGS REGARDING THE RELIEF ALLOWED AND THE INCOME FINALLY DETERMINED FOR THE YEAR. THUS THE ORDER SO PASSED IS BAD IN LAW AND DESERVES TO BE REVISITED IN THE LIGHT OF DETAIL ED SUBMISSIONS AS MADE REGARDING MONEY-LENDING BUSINESS ACTIVITIES AS CARRIED OUT BY THE APPELLANT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE AUTHORITIES BELOW HAVE FACTUALLY AND LEGALLY ERRED IN WORKING O UT THE INTEREST INCOME AT RS.33,000/- BY THE AO AND ENHANCED TO RS. 19,45,800/- BY THE LD. CIT(A) WITHOUT APPRECIATING THE FACTS OF THE CASE IN RIGHT PERSPECTIVE AND ALSO IN ABSENCE OF ANY MATERIAL ON RECORD. 3. THE LD. CIT(A) HAS ENHANCED THE INCOME UNDER THI S HEAD WITHOUT JURISDICTION AS NO OPPORTUNITY WHATSOEVER WAS ALLOW ED TO THE ITA NOS. 872 TO 875/JP/2013-ASSESSEES APPEAL ITA NOS. 899 TO 901/JP/2013- DEPTTS APPEAL SHRI BADRI NARAIN SODANI VS. DCIT AYS : 2007-08 TO 2010-11 4 APPELLANT FOR SUCH ENHANCEMENT. IN ABSENCE OF SUCH OPPORTUNITY, THE ENHANCEMENT SO MADE IS BAD IN LAW AND DESERVES TO BE DELETED SUMMARILY. DEPARTMENTS APPEAL FOR AY 2008-09 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A), CENTRAL, JAIPUR HAS ERRED IN TELESCOPING/DELETING O F RS.20,50,000/- FROM THE ADDITION ON ACCOUNT OF UNEXPLAINED ADVANCE S (INVESTMENT) IN DEBTORS U/S 69 MADE/ENHANCED BY HER OF RS.1,62,1 5,000/- BECAUSE THE DEBTORS CONFIRMED IN AY 2008-09 IS DIFF ERENT FROM THE LIST CONFIRMED IN AY 2007-08 IS. FOR THIS STATEMENT OF FACTS IS ANNEXED HEREWITH. AS DEBTORS CONFIRMED IN AY 2007-08 ARE DIFFERENT FR OM THOSE OF AY 2008-09. NO BENEFIT OF TELESCOPING SHOULD HAVE BEEN ALLOWED BY THE CIT(A). 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE ID. CIT(A) HAS ERRED IN DELETING THE UNDISCLOSED INTEREST INCO ME WORKED OUT BY HER AT RS.19,45,800/- AS AGAINST RS.5,45,483/- ADDE D BY THE AO BY HOLDING THAT INTEREST INCOME EARNED DURING THIS YEA R (AY 2008-09) IS TO BE ALLOWED TO BE TELESCOPED AGAINST THE TOTAL AD DITION OF ADVANCES CONFIRMED DURING AY 2008-09, THOUGH INTERE ST INCOME ACCRUED TO THE ASSESSEE AND WAS TAXABLE IN AY 2008- 09, FURTHER NO BREAK-UP OF NAMES AND AMOUNT HAS BEEN GIVEN BY CIT( A) FOR ALLOWING TELESCOPING IN ADVANCES ADDITION CONFIRMED . DEPARTMENTS APPEAL FOR AY 2009-10 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE ID. CIT(A), CENTRAL, JAIPUR HAS ERRED IN DELETING THE ADDITION OF RS. 47,65,000/- ON ACCOUNT OF UNEXPLAINED ADVANCES (INVESTMENTS) IN DEBTORS U/S69, BECAUSE THIS WAS ENHANCED ADDITION AS PER CI T(A), OWN FINDING ON THE ONE HAND, WHILE ON THE OTHER HAND TH E SAME AMOUNT WAS DELETED ON THE GROUND THAT ADDITION OF RS.1,41, 65,000/- HAD BEEN CONFIRMED IN AY 2008-09, THOUGH THE LIST OF DE BTORS CONFIRMED IN AY 2008-09 IS DIFFERENT FROM THE LIST CONFIRMED/ ENHANCED THAN DELETED IN AY 2009-10. FOR THIS STATEMENT OF FACTS IS ANNEXED HEREWITH. ITA NOS. 872 TO 875/JP/2013-ASSESSEES APPEAL ITA NOS. 899 TO 901/JP/2013- DEPTTS APPEAL SHRI BADRI NARAIN SODANI VS. DCIT AYS : 2007-08 TO 2010-11 5 AS DEBTORS CONFIRMED IN AY 2008-09 OF RS.1,41,65,00 0/- ARE DIFFERENT FROM THOSE OF RS.47,65,000 OF AY 2009-10, NO BENEFIT OF TELESCOPING OF RS. 47,65,000/- SHOULD HAVE BEEN ALL OWED BY CIT(A) IN AY 2009-10 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE ID. CIT(A) HAS ERRED IN DELETING THE UNDISCLOSED INTEREST INCO ME WORKED OUT BY HER AT RS.19,45,800/- AS AGAINST RS.9,46,581/- ADDE D BY THE AO BY HOLDING THAT INTEREST INCOME EARNED DURING THIS YEA R (AY 2009-10) IS TO BE ALLOWED TO BE TELESCOPED AGAINST THE TOTAL AD DITION OF ADVANCES CONFIRMED DURING AY 2008-09, BECAUSE THE A DVANCES IN AY 2009-10 WERE TO PERSONS DIFFERENT THAN THOSE IN AY 2008-09, BENEFIT OF TELESCOPING OF INTEREST COULD NOT HAVE B EEN ALLOWED, FURTHER INTEREST INCOME OF AY 2009-10 CANNOT BE SET OFF AGAINST ADDITION OF ADVANCES OF AY 2008-09. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE ID. CIT(A), CENTRAL, JAIPUR HAS ERRED IN DELETING THE ADDITION ON ACCOUNT OF UNDISCLOSED INVESTMENT IN FDRS MADE BY THE AO OF RS .1,50,000/- WITHOUT INFORMING FROM WHICH ADDITION THE BENEFIT O F TELESCOPING WAS BEING ALLOWED, FURTHER AS CLARIFIED IN GROUND 1 ABO VE THERE WAS NO SCOPE OF ANY TELESCOPING. DEPARTMENTS APPEAL FOR AY 2010-11 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE ID. CIT(A), CENTRAL, JAIPUR HAS ERRED IN DELETING THE ADDITION OF RS.32,75,000/- ON ACCOUNT OF UNEXPLAINED ADVANCES (INVESTMENTS) IN DEBTORS U/S 69 BECAUSE THIS WAS AN ENHANCED ADDITION AS PER CIT (A)OWN FINDING ON THE ONE HAND , WHILE ON THE OTHER HAND T HE SAME AMOUNT WAS DELETED ON THE GROUND THAT ADDITION OF RS.1,41, 65,000/- HAD BEEN CONFIRMED IN AY 2008-09, THOUGH THE LIST OF DE BTORS CONFIRMED IN AY 2008-09 IS DIFFERENT FROM THE LIST ENHANCED B UT DELETED IN AY 2010-11. FOR THIS STATEMENT OF FACTS IS ANNEXED HER EWITH. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE ID. CIT(A) HAS ERRED IN DELETING THE UNDISCLOSED INTEREST INCO ME WORKED OUT BY HER AT RS.19,45,800/- AS AGAINST RS 33,000/- ADDED BY THE AO BY HOLDING THAT INTEREST INCOME EARNED DURING THIS YEA R (AY 2010-11) IS TO BE ALLOWED TO BE TELESCOPED AGAINST THE TOTAL AD DITION OF ADVANCES CONFIRMED DURING AY 2008-09, BECAUSE THE A DVANCES IN ITA NOS. 872 TO 875/JP/2013-ASSESSEES APPEAL ITA NOS. 899 TO 901/JP/2013- DEPTTS APPEAL SHRI BADRI NARAIN SODANI VS. DCIT AYS : 2007-08 TO 2010-11 6 AY 2010-11 WERE TO PERSONS DIFFERENT THAN THOSE IN AY 2008-09, BENEFIT OF TELESCOPING OF INTEREST COULD NOT HAVE BEEN ALLOWED , FURTHER INTEREST INCOME OF AY 2010-11 CANNOT BE SET OFF AGA INST ADDITION OF ADVANCES OF AY 2008-09. 2. BRIEF FACT ARE - ASSESSE DERIVES SHARE INCOME FR OM A PARTNERSHIP FIRM M/S MARUDHAR ENTERPRISES, JAIPUR ENGAGED IN CIVIL C ONSTRUCTION. DURING THE COURSE OF SEARCH INCRIMINATING MATERIAL IN THE FORM OF DIARIES AND LOOSE PAPERS ALONG WITH CASH OF RS.12 LACS AND FAMILY JEW ELRY VALUED AT RS.14,21,845/- WERE FOUND AND SEIZED. THE CASH AND JEWELRY WERE EXPLAINED IN THE ASSESSMENT PROCEEDINGS AND NO ADDI TION IN THIS BEHALF WAS MADE. 2.1 INCRIMINATING PAPERS REVEALED THAT ASSESSE WAS ENGAGED IN FINANCING BUSINESS MOSTLY BY LOANS REPAYABLE IN 100 INSTALLME NTS, WHICH WAS ACCEPTED BY THE ASSESSE TO BE UNDISCLOSED. STATEMEN T WAS RECORDED MENTIONING THAT THIS PECULIAR TYPE OF FINANCING BUS INESS WAS CARRIED OUT ON THE BASIS THE DIARIES AND LOOSE PAPERS. TO AVOID TH E RIGOR OF THE SEARCH OPERATIONS AND CONSEQUENT ASSESSMENT PROCEEDINGS, D ECLARATION OF THE AGGREGATE ADDITIONAL INCOME RS.46 LACS ATTRIBUTABLE TO UNDISCLOSED CAPITAL AND INTEREST EARNED DURING THE ENTIRE BLOCK PERIOD AT IN THE YEAR OF SEARCH WAS ADMITTED AND OFFERED IN THE RETURN OF INCOME. I T IS CLAIMED THAT SUBSEQUENTLY ON REVIEW OF SAME INCRIMINATING PAPERS , ASSESSE OFFERED FURTHER ADDITIONAL INCOME OF RS.5,00,000/- WHICH AL SO WAS DECLARED IN THE A.Y. 2010-11. 2.2 IT IS ALSO CLAIMED BY THE ASSESSE THAT DUE TO P RESSURE OF TWO DAYS SEARCH OPERATIONS AND INABILITY TO VERIFY DETAILS O N THE SPOT, NOT ONLY ITA NOS. 872 TO 875/JP/2013-ASSESSEES APPEAL ITA NOS. 899 TO 901/JP/2013- DEPTTS APPEAL SHRI BADRI NARAIN SODANI VS. DCIT AYS : 2007-08 TO 2010-11 7 UNDISCLOSED BUT DISCLOSED ASSETS BELONGING TO OTHER PERSONS WERE ALSO MISTAKENLY OWNED LIKE THE INVESTMENTS IN THE FDRS A ND MUTUAL FUNDS OF RS.10,08,000/- AND THE INVESTMENT OF RS.32,00,000/ -. DURING THE COURSE OF ASSESSMENT PROCEEDINGS EXPLANATION IN THIS BEHALF W AS FOUND CORRECT AND SUCH ITEMS WERE NOT INCLUDED. SIMILARLY CASH AND JE WELRY FOUND DURING THE COURSE OF SEARCH WERE FOUND EXPLAINED AND EXCLUDED WHILE FRAMING THE ASSESSMENT. 2.3. IN THE ASSESSMENT PROCEEDINGS, THE LEARNED AO ON ONE HAND ACCEPTED THAT THE INCRIMINATING MATERIAL WAS WRITTE N HAPHAZARDLY WITH REPETITION OF SAME ENTRIES; HOWEVER WENT BEYOND ASS ESSEES DECLARATION AND BY ARBITRARY INTERPRETATION OF HAPHAZARD WRITIN GS ON THE INCRIMINATING MATERIAL FRAMED THE IMPUGNED ASSESSMENTS BY MAKING FOLLOWING ADDITIONS:- (A) ASSTT.YEARR. 2006-07 RS.1,00,000/- (NOT IN AP PEAL) (B) ASSTT. YEAR.2007-08 RS.36,60,886/- (D) ASSTT. YEAR. 2008-09 RS.1,16,26,777/- (E) ASSTT. YEAR.2009-10 RS.32,83,423/- AS AGAINST RETURNED INCOME OF RS.47,71,703/- (AFTER RECTIFICATION ORDER TO RS.79,55,123/) (F) ASSTT. YEAR. 2010-11. RS.27,93,737/- TOTAL RS.2,14,64,823/- THUS AS AGAINST THE TOTAL SURRENDER OF ADDITIONAL INCOME OF RS. 46,00,000/- + 5,00,000/- = RS. 51,00,000/-, LD. AO FRAMED THE ASSESSMENTS RESULTING IN TOTAL ADDITIONS OF RS. 2,14,64,823/-. FOR MAKING THESE ADDITIONS, LD. AO MAINLY RELIED ON ONE SEIZED PAPER {AS-1 PAGE NO.1} ONLY AND BY REPRODUCING THE SAME CONTENTS IN ALL THE ASSESSMENT ORDERS IN A STEREOTYPED MANNER. THE QUANTUM AND ITEMS OF ADDITI ON ARE NEITHER CORRELATED WITH ANY SPECIFIC PAPER NOR ENTRIES RELE VANT TO THE RESPECTIVE ITA NOS. 872 TO 875/JP/2013-ASSESSEES APPEAL ITA NOS. 899 TO 901/JP/2013- DEPTTS APPEAL SHRI BADRI NARAIN SODANI VS. DCIT AYS : 2007-08 TO 2010-11 8 YEARS OF ADDITION. THE ADDITIONS ARE HUGELY INFLATE D BY ADDING ZEROS TO FIGURES MENTIONED IN AS-1, PAGE 1; THUS EXTRAPOLATI NG THE UNDISCLOSED INCOME TO ASTRONOMICAL AMOUNTS ON SURMISES AND CONJ ECTURES. 2.4 IT IS CLAIMED THAT LD. AO IGNORED THE UNDISPUTE D VITAL FACT THAT ASSESSEES FINANCING BUSINESS WAS LOANS REPAYABLE I N 100 DAILY INSTALLMENT BASIS; NO CATEGORICAL REASONS HAVE BEEN GIVEN BY LD . AO TO IGNORE THIS CRUCIAL ASPECTS AND RESORT TO AN ESTIMATE WHICH IS NEITHER JUST NOR REASONABLE. IT IS TRITE LAW THAT WHILE MAKING ANY E STIMATE OF INCOME THE AO HAS TO APPLY BEST JUDGMENT BASED ON REASONABILITY, NEXUS AND MODUS OPERANDI OF THE MATERIAL ON RECORD. MERELY BECAUSE A SEARCH IS CARRIED OUT CANNOT VEST LD. AO WITH ARBITRARY POWERS OF ESTIMAT E AND ASSESSMENT. IT HAS NOT BEEN DENIED BY AO THAT NO CORRESPONDING ASSETS WERE FOUND TO INDICATE APPLICATION OF UNDISCLOSED INCOME. 2.5 IN APPEAL PROCEEDINGS, THE ADDITIONS WERE VEHEM ENTLY CONTESTED BY ORAL AS WELL AS WRITTEN SUBMISSIONS PLACED IN THE P APER BOOK PAGE NO. 19 TO 26. LD. CIT (A) ADMITTED THE MERITS OF THE SUBMISSI ONS AND IN CLEAR TERMS OBSERVED THAT THE IMPUGNED ASSESSMENT ORDERS PASSED BY THE LEARNED AO WERE VERY UNSPECIFIC AND VAGUE IN NATURE. TO REMEDY THIS DEFICIENCY A REMAND REPORT WAS CALLED BY THE LEARNED (CIT (A), V IDE REPORT DATED 3.5.2013, LD. AO ALSO ADMITTED THE OBSERVATIONS OF THE LEARNED CIT (A) IN THIS BEHALF AND REPLIED THAT: THE SEIZED DOCUMENTS CONTAIN ENTRIES WHICH ALLEGED LY PERTAIN TO HIS UNDISCLOSED INCOME. THE ENTRIES ARE FOUND RECORDED IN/BY HAND AND AT MANY PLACES DO NOT CONTAIN COMPLETE NARRATION OR DE TAILS. THE FIGURES ALSO HAVE BEEN WRITTEN IN A CODED FORM AND ARE EITH ER FOLLOWED OR DENOMINATED BY A DATE AND/OR FOLLOWED BY CERTAIN DA TES. THE ENTRIES ITA NOS. 872 TO 875/JP/2013-ASSESSEES APPEAL ITA NOS. 899 TO 901/JP/2013- DEPTTS APPEAL SHRI BADRI NARAIN SODANI VS. DCIT AYS : 2007-08 TO 2010-11 9 ARE NEITHER CHRONOLOGICAL NOR ARRANGED IN ANY OTHER SEEMINGLY DISCERNIBLE ORDER. THERE ARE ALSO SEVERAL REPETITIO NS WHICH ADDED TO THE COMPLEXITY OF THE ENTRIES. THE ENTRIES PRESENTE D DATA FROM WHICH MEANINGFUL ANALYSIS WAS NOT ONLY CHALLENGING BUT AL SO EXTREMELY DIFFICULT (THE COPY OF THE REMAND REPORT IS PLACED IN THE PAP ER BOOK PAGE NO. 27 TO 31) LD. COUNSEL CONTENDS THAT LD. AO HAS CONCEDED THAT: A. THE ENTRIES ARE NEITHER CHRONOLOGICAL NOR ARRANG ED IN ANY OTHER SEEMINGLY DISCERNIBLE ORDER. B. THERE ARE ALSO SEVERAL REPETITIONS WHICH ADDED T O THE COMPLEXITY OF THE ENTRIES AND MEANINGFUL ANALYSIS OF DATA WAS NOT ONLY CHALLENGING BUT ALSO EXTREMELY DIFFICULT. C. LD. AO HIMSELF ENDORSES THE FACT ABOUT LEARNED CIT (A) OBSERVATIONS ABOUT ASSESSMENT ORDERS BEING UNSPECIF IC AND VAGUE IN NATURE ( REFERENCE IS MADE TO LD. CIT(A) ORDER F OR THE A.Y. 2009- 10 AT PARAS (E), (F), (G) & (H) & AT PAGE NO.8 OF T HE APPEAL ORDER FOR A.Y. 2009-10, THE RELEVANT OBSERVATIONS ARE AS UNDE R: (E) AT NO STAGE , THE LD. AO HAD EVER GIVEN HIS WORKING OF RS.21,35,000/- FOR THIS YEAR. IT IS STILL UNKNOWN O N WHAT BASIS SUCH WORKING HAS BEEN DONE. AS SUCH WORKING HAS BEEN DONE ON THE BACK OF THE APPELLANT WITHOUT ANY BASIS AND WITHOUT GIVING ANY OPPORTUNITY TO THE SAID WORKING DESERVES TO BE QUASHED. (F)FROM THE READING OF THE ASSESSMENT ORDER, IT WO ULD BE NOTED THAT THE LEARNED AO HAD NOT DISPUTED THE WORKING OF THE ADDITIONAL INCOME OF RS.46 LAC AS WORKED OUT AND SH OWN IN THE RETURN FOR THE YEA. IN ABSENCE OF ANY REASON AND MA TERIAL ON RECORD, SUCH WORKING COULD NOT BE DENIED. MORE-OVER , WHILE QUANTIFYING THE ADDITION FOR THE YEAR AT RS.32 LAC APPROXIMATELY, THE LEARNED AO HAD MADE REFERENCE TO SUCH WORKING I N PASSING MANNER AS EVIDENT FROM THE BODY OF THE ASSESSMENT O RDER. HOWEVER IT IS AN EVIDENT FACT THAT THE AOS WORKING INCLUDED PART OF THE ADDITIONAL INCOME OF RS.46 AS DECLARED BY TH E APPELLANT IN THE RETURN OF INCOME. AFTER THE LAPSE OF 15 MONTHS (EVEN AFTER ITA NOS. 872 TO 875/JP/2013-ASSESSEES APPEAL ITA NOS. 899 TO 901/JP/2013- DEPTTS APPEAL SHRI BADRI NARAIN SODANI VS. DCIT AYS : 2007-08 TO 2010-11 10 FILING OF THE APPEAL), THE LEARNED AO COULD NOT KNO W ABOUT SUCH LAPSE IN HIS WORKING AND ABRUPTLY ENHANCED THE ASSE SSED INCOME BY RS.46,71,700/- (ADDING ENTIRE RETURNED IN COME SHOWN IN THE REVISED RETURN) VIDE RECTIFICATION ORDER PAS SED U/S 154 OF THE ACT ON 05.03.2012 WITHOUT ASSIGNING ANY REASON AND WITHOUT GIVING AN OPPORTUNITY TO THE APPELLANT. THE APPELLA NT HAD ALREADY CHALLENGED THIS RECTIFICATION ORDER WHICH IS PENDIN G ON THE DATE. BUT THIS ORDER CLEARLY REVEALED THE ERRONEOUS WORKI NG OF THE ADDITIONAL INCOME BY THE LEARNED AO. (G) AGAIN WITHOUT PREJUDICE TO THE ABOVE O BJECTIONS, THE LEARNED AO HAD ALSO FAILED TO FOLLOW THE TELESCOPIN G THEORY TO GIVE CREDIT OF THE ADDITIONS MADE IN EARLIER YEARS UNDER THE SAME HEAD. THUS SUCH WORKING IS CONTRARY TO THE PRINCIPL ES OF TELESCOPING THEORY. (H) AS THE APPELLANT HAD OWNED ALL THE FINANCIAL T RANSACTIONS IN HIS OWN CASE AND OFFERED ADDITIONAL INCOME OF RS.46 LAC ON ACCOUNT OF SUCH TRANSACTION. IN THE CIRCUMSTANCES, TESTIMONY OF THE CO-CALLED WITNESS IN THIS REGARD HAD BECOME IRR ELEVANT AND IMMATERIAL FOR DRAWING CONCLUSION. 2.6 THESE OBSERVATIONS TOGETHER WITH THE CRUCIAL FA CTS THAT ASSESSE WAS MAINLY ENGAGED IN FINANCING BASED ON 100 DAILY REPA YABLE INSTALLMENTS INDICATE THAT THE FINANCING WAS NOT TO BIG BUSINESS HOUSES WHO CAN RAISE THE LOANS BY OTHER INSTITUTIONAL MEANS ON EASIER TERMS AND REPAYMENT SCHEDULE. THUS THE ASSESSMENTS FRAMED BY LD. AO WERE WITHOUT ANY BASIS, REASONABLENESS OR APPLICATION OF MIND. SUCH FINANCI NG BUSINESS IS TRANSACTED WITH SMALL PEOPLE AND NEEDY PEOPLE AND N OT BUSINESS HOUSES, WHICH GET TERM FINANCE AT LESSER RATE OF INTEREST F ROM REGULAR BROKERS. 2.7 THE ASSESSEE AFTER SEPARATION FROM FAMILY WAS A N UNFORTUNATE BROTHER WHO GOT LESS AND COULD NOT EARN MUCH SUBSEQUENTLY. THE SEARCH WAS AIMED AT SODHANI SWEETS GROUP, ASSESSE HAS NO CONNECTION WITH SWEETS BUSINESS. IN ORDER TO SUPPORT HIS FAMILY HE JOINED AS A PARTN ER IN CIVIL CONSTRUCTION FIRM ITA NOS. 872 TO 875/JP/2013-ASSESSEES APPEAL ITA NOS. 899 TO 901/JP/2013- DEPTTS APPEAL SHRI BADRI NARAIN SODANI VS. DCIT AYS : 2007-08 TO 2010-11 11 AND ENDEAVORED TO EARN SOME EXTRA INCOME BY WAY OF THIS FINANCING BUSINESS OF 100 DAILY INSTALLMENTS REPAYMENTS. 2.8 LD. AO WAS CORRECT IN SUBMITTING OBSERVATIONS I N REMAND REPORT THAT NO MEANINGFUL ANALYSIS COULD BE MADE FROM THE INCRI MINATING PAPERS. DESPITE THESE CATEGORICAL OBSERVATIONS BROUGHT ON R ECORD BY LD. AO IN REMAND REPORT LD. CIT(A) SHOULD HAVE DELETED THE AD DITIONS BY ACCEPTING ASSESSSEES S SEARCH STATEMENT WHICH WAS ENDORSED B Y SEARCH PARTY ALSO. 2.9 DESPITE THESE ADMITTED FACTS ON RECORD, LEARNED CIT (A) PROCEEDED TO MAKE THE ESTIMATE ON ENTIRELY DIFFERENT METHODOLOGY WHICH RESULTED IN MORE AGONIZING ADDITIONS. LD. CIT(A)S ON ONE HAND HAS GIVEN CATEGORICAL OBSERVATIONS THAT THE INCRIMINATING MATERIAL AND PA PERS ARE HAPHAZARD AND UNSPECIFIC, ON THE OTHER HAND, BY SELF-CONTRADICTOR Y FINDINGS IT HAS BEEN HELD THAT THE INCRIMINATING PAPERS WERE IN THE FORM O F REGULAR BOOKS AND EACH FIGURE IS TO BE SUFFIXED WITH 3 ZEROS. THUS THE HAP HAZARD PAPERS AND DIARIES WITHOUT ASSIGNING ANY COGENT REASONS ARE HELD AS RE GULAR BOOKS, METHODICALLY WRITTEN AND FURTHER ADDING 3 ZEROS TO ALL FIGURES. BY SUCH SELF- CONTRADICTORY WORKING THE ADDITIONS MADE BY LD. AO ARE ARBITRARILY ENHANCED ON THE PRETEXT OF TABULATION SHEETS WHICH ARE NEITH ER MENTIONED IN THE ASSESSMENT ORDERS NOR IN PROCEEDING SHEETS OF THE A SSESSMENT, BESIDES THEY WERE NEVER CONFRONTED TO THE ASSESSEE. 3. LD. CIT(A) BY UNFATHOMABLE METHOD WORKED OUT TOT AL ADDITION AT RS. 1,62,15,000/- ON PEAK-THEORY ON THE ALLEGED BASIS TWO SEIZED PAPERS (AS-1-PAGE-2 FOR RS.1,47,15,000/- & RS.15,00,000/- AS PER PAGE NO.4 OF AS-1) AND CONFIRMED/ENHANCED ADDITION OF RS.20,50, 000/- IN THE ASSESSMENT YEAR 2007-08 AND RS.1,41,65,000/- IN THE A.Y.2008-09 AND ITA NOS. 872 TO 875/JP/2013-ASSESSEES APPEAL ITA NOS. 899 TO 901/JP/2013- DEPTTS APPEAL SHRI BADRI NARAIN SODANI VS. DCIT AYS : 2007-08 TO 2010-11 12 AFTER TELESCOPING THE ALLEGED INTEREST INCOME AT ENHANCED FIGURES OF RS.19.46 LAC IN THE PEAK AMOUNT OF RS.1,62,15,000/ -. LD. COUNSEL FOR THE ASSESSE VEHEMENTLY CONTENDS THAT THE APPEAL ORDERS SUFFER FROM MANY INCONSISTENCIES, FACTUAL AND LEGAL, BESIDES THE OBS ERVATIONS ARE NOT BORNE OUT FROM THE RECORD, RATHER THEY ARE SELF-CONTRADIC TORY AND JUST OPPOSED TO THE ADMITTED FACTS ON RECORD:- (I) LD. CIT(A) HAS ERRONEOUSLY HELD THAT THE SEIZED PAPERS AND DOCUMENTS WERE IN THE FORM OF REGULAR BOOKS AND M AINTAINABLE IN PERFECT ORDER. THESE FINDINGS ARE CONTRARY TO RE CORD, IT HAS NOT BEEN ESTABLISHED AS TO HOW HAPHAZARD RECORD CAN BEC OME REGULARLY MAINTAINED RECORD. THUS THERE IS NOTHING ON RECORD TO INDICATE AS TO HOW THE FIELD FINDINGS OF LD. AO GI VEN AFTER RE- EXAMINATION OF RECORD VIDE HIS REMAND REPLY DATED 3 .5.2013 WERE UNRELIABLE OR WRONG. IT WAS A REMAND CALLED BY LD. CIT(A) ON HER OWN INSTANCE WHICH SUPPORTED HER PRIMA FACIE OBSERVATIONS BASED ON ASSESSEES VEHEMENT PLEADINGS THAT ADDITIONS WERE MADE WITHOUT APPLICATION OF MIND BY LD. AO. (II) LD. AO IMPLIEDLY ADMITTED THAT THE ADDITIONS W ERE MADE ON THE BASIS OF HAPHAZARD AND UNSPECIFIC INCRIMINATING PAP ERS. THE ENTRIES ARE FOUND RECORDED IN/BY HAND AND SAME ENTR IES AT MANY PLACES AND THEY DO NOT CONTAIN COMPLETE NARRATION O R RELEVANT DETAILS. THE FIGURES APPEAR TO HAVE BEEN WRITTEN IN A CODED FORM AND ARE EITHER FOLLOWED OR DENOMINATED BY A DATE AN D/OR FOLLOWED BY CERTAIN DATES. (III) LD. CIT(A) HAS NOT DENIED AOS REMAND SUBMISS IONS THAT THE INCRIMINATING MATERIALS ENTRIES ARE NEITHER CHRONO LOGICAL NOR ARRANGED IN ANY OTHER SEEMINGLY DISCERNIBLE MANNER. THERE WERE ALSO SEVERAL REPETITIONS WHICH ADDED TO THE COMPLEX ITY OF THE ENTRIES. THE ENTRIES PRESENTED DATA FROM WHICH MEAN INGFUL ANALYSIS WAS NOT ONLY CHALLENGING BUT ALSO EXTREMEL Y DIFFICULT. WITHOUT CONTROVERTING THESE FACTUAL FINDINGS. HOW L D. CIT(A) AS AN IMPERATIVE QUESTION OF FACTS AND CIRCUMSTANCES D O A SOMERSAULT AND HOLD THAT SAME HAPHAZARD MATERIAL IS A REGULAR RECORD, SO ILLUMINATING TO BE READ AS REGULAR ACCOU NT BOOKS AND ITA NOS. 872 TO 875/JP/2013-ASSESSEES APPEAL ITA NOS. 899 TO 901/JP/2013- DEPTTS APPEAL SHRI BADRI NARAIN SODANI VS. DCIT AYS : 2007-08 TO 2010-11 13 REASONABLE BASIS OF RATHER ENHANCING THE ADDITIONS, WORKING OUT A FANTASTIC PEAK THEORY AND SADDLING THE SMALL TIME FINANCIER WITH HUGE TAX LIABILITIES. (IV) ON THE FACE OF IT, CONSIDERING THE REMAND REPO RT, MATERIAL ON RECORD, ASSESSEES SEARCH STATEMENT AND REMAND REPO RT RECEIVED FROM THE LD. AO, THE CONTRARY FINDINGS REC ORDED BY LD. CIT (A) ARE FACTUALLY INCORRECT AND THE ASTRONOMICA L ESTIMATE OF PEAK WORKING HAS NO LEGS TO STAND. REMAND REPORT, C LEARLY MENTIONS THAT THE SEIZED PAPERS AND DOCUMENTS WERE ROUGH, HAPHAZARD, INDISCERNIBLE WORKINGS WHERE SAME ENTRIE S APPEARED REPEATEDLY. (V) ON AN OVERALL CONSIDERATION OF RELEVANT FACTS A ND CIRCUMSTANCES ABOUT ASSESSEES FINANCE BUSINESS BEING UNDISPUTEDL Y ON DAILY BASIS AND 100 INSTALLMENTS BASIS HAVE BEEN TOTALLY IGNORED BY LD. CIT(A) CONSEQUENTLY THE ESTIMATE OF PEAK, CAPITAL A ND INTEREST INCOME AS ARRIVED AT BY LD. CIT(A) IS BASED ON SURM ISES, CONJECTURES AND PURE ASSUMPTIONS. (VI) IT IS CONTENDED THAT IS SETTLED LAW AS PROPOUN DED BY VARIOUS JUDICIAL AUTHORITIES THAT SUCH ESTIMATES WHICH ARE BASED ON UNSPECIFIC DOCUMENTS AND WITHOUT CONSIDERING THE RE LEVANT FACTS, RECORD, SURROUNDING CIRCUMSTANCES AND HUMAN CONDUCT CAN TO BE SUSTAINED. RELIANCE IS PLACED ON THE FOLLOWING J UDICIAL PRECEDENTS: (I) CIT V GIRISH CHOUDHARY (2008) 296 ITR 619 (DELH I): HONBLE DELHI HIGH COURT CONFIRMED THE ORDER OF ITAT, DELET ING THE ADDITION OF RS.48 LAKHS, HOLDING THAT FIGURE OF 48 WRITTEN ON INCRIMINATING MATERIAL CANNOT BE ASSUMED AS RS.48 L AKH WITHOUT CORROBORATIVE MATERIAL. FACTS OF ASSESSEES CASE AR E SIMILAR TO THIS CASE. RELEVANT OBSERVATIONS OF HONBLE DELHI HIGH COURT ARE AS UNDER: 7. THE TRIBUNAL VIDE ITS IMPUGNED ORDER DELETED THE ADDITION MADE BY THE ASSESSING OFFICER HOLDING THAT:- (II) IN THE PRESENT CASE THE REVENUE HAS USED ITS LONGEST ARM OF SEARCH AVAILABLE TO THE REVENUE TO UNEARTH UNACCOUN TED MONEY ITA NOS. 872 TO 875/JP/2013-ASSESSEES APPEAL ITA NOS. 899 TO 901/JP/2013- DEPTTS APPEAL SHRI BADRI NARAIN SODANI VS. DCIT AYS : 2007-08 TO 2010-11 14 OR EVIDENCE THEREOF. HAVING TAKEN ABOVE STEP AND AS PER LAW, IT HAS TO BE PROVED STRICTLY THAT UNDISCLOSED INCOME A SSESSED IN THE HANDS OF THE ASSESSEE IS UNDISCLOSED INCOME BEY OND A REASONABLE DOUBT. AS NOTED EARLIER IN THE FIRST PAG E, TOTAL OF ALL THE FIVE FIGURES IS 57.50 BUT ADDITION OF RS.48 LAC S WAS MADE AND NOT OF RS.57.50 LACS. WHY FIGURES MENTIONED AT SECO ND PLACE AFTER SOME GAP WAS NOT TAKEN INTO CONSIDERATION. HO W 48 HAVE BEEN MADE AS RS.48 LACS AND THAT TOO UNDISCLOSED IN COME OF THE ASSESSEE IS ABSOLUTELY NOT CLEAR FROM THE ASSESSMEN T ORDER. IT WAS STATED THAT RS.9.50 LACS IS RECORDED TO BE RECE IVED THROUGH CHEQUE AND THEREFORE ABOVE AMOUNT WAS NOT ADDED. IT IS CORRECT THAT BEFORE 9.50 THE WORD, CH IS WRITTEN BUT THER E WAS NOTHING ON RECORD TO SHOW THIS AMOUNT WAS ANY WAY DIFFERENT FROM OTHER FIGURES/AMOUNTS. NO ATTEMPT WHATSOEVER WAS MADE TO LINK ANY OF THE ENTRY IN THE SEIZED BOOK WITH ANY TRANSACTION C ARRIED BY THE ASSESSEE IN HIS CAPACITY AS DIRECTOR OR BY HIS WIFE OR M/S I.G.BUILDERS AND PROMOTERS LTD. TO SHOW THE AMOUNT IN FIGURE AS ASSESSABLE UNDISCLOSED INCOME. NO PROPER USE OF SEI ZED MATERIAL WAS MADE TO ESTABLISH THAT ENTRIES IN THE SEIZED DOCUMENT RELATES TO UNDISCLOSED INCOME OF RS.48 LAC S. SEIZED DOCUMENT HAS RIGHTLY BEEN HELD TO BE A DUMP-DOCUMEN T. IT WAS FOR THE REVENUE TO PUT LIFE INTO IT BY COLLECTING O THER RELEVANT AND CONNECTED MATERIAL. THIS HAS NOT BEEN DONE TO ESTAB LISH THE CASE AS PER REQUIREMENT OF THE STATUTE. (III) 8. SECTION 158B OF THE ACT IS A PART OF CHAPT ER XIV-B DEALING WITH SPECIAL PROCEDURE FOR ASSESSMENT OF SEARCH CAS ES. THE CHAPTER CONTAINS SECTION 158B TO SECTION 158BH. BL OCK PERIOD AND UNDISCLOSED INCOME HAVE BEEN DEFINED IN CLAUS ES (A) AND (B) TO SECTION 158B, FOR THE PURPOSE OF THE CHAPTER . WE ARE CONCERNED WITH THE DEFINITION OF UNDISCLOSED INCOM E. THE PROVISION IN ITS ENTIRETY READS AS FOLLOW:- (IV) (B) 'UNDISCLOSED INCOME' INCLUDES ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR ANY INCOME BA SED ON ANY ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS, WHERE SUCH MONEY, BULLION, JEWELLERY, VALUABLE ARTICLE, THING, ENTRY IN THE BOOKS OF ACCOUNT OR OT HER DOCUMENT OR TRANSACTION REPRESENTS WHOLLY OR PARTLY INCOME OR P ROPERTY WHICH HAS NOT BEEN OR WOULD NOT HAVE BEEN DISCLOSED FOR T HE PURPOSES OF THE ACT. ITA NOS. 872 TO 875/JP/2013-ASSESSEES APPEAL ITA NOS. 899 TO 901/JP/2013- DEPTTS APPEAL SHRI BADRI NARAIN SODANI VS. DCIT AYS : 2007-08 TO 2010-11 15 (V) 9. IT IS CLEAR FROM THE ABOVE DEFINITION THAT T HE INCOME OR THE PROPERTY, WHICH HAS BEEN DISCLOSED OR WOULD HAVE BE EN DISCLOSED FOR THE PURPOSE OF THIS ACT, DOES NOT FOR M PART OF THE UNDISCLOSED INCOME FOR PURPOSE OF BLOCK ASSESSMENT. UNDER THE PROVISIONS OF CHAPTER XIV-B ONLY SUCH OF THE AFORES AID CATEGORIES OF INCOME, WHICH HAS BEEN FOUND AS A RES ULT OF SEARCH CAN ALONE BE THE SUBJECT MATTER OF AN ASSESS MENT UNDER THIS CHAPTER. THE DEFINITION SPECIFIES THAT WHERE A N ASSESSEE HAS CLAIMED ANY EXPENSES OR ADDITION, WHICH IS FOUN D TO BE FALSE, THE SAME CAN ONLY BE REGARDED AS AN UNDISCLO SED INCOME FOR THE PURPOSE OF THIS CHAPTER. (VI) 10. UNDER CHAPTER XIV B OF THE ACT, BEFORE AN ADDITION OF AN UNDISCLOSED INCOME CAN BE MADE, THE ASSESSING OFF ICER HAS TO BRING ON RECORD THE MATERIAL TO SHOW THAT ON EVIDEN CE FOUND AS A RESULT OF SEARCH THERE IS AN UNDISCLOSED INCOME REP RESENTED BY CREDITS APPEARING IN THE BOOKS OF ACCOUNTS. (VII) 11. HENCE IN THE PRESENT CASE THERE IS NO MAT ERIAL ON RECORD TO SHOW AS TO ON WHAT BASIS THE ASSESSING OFFICER HAS REACHED AT THE CONCLUSION THAT THE FIGURE '48' IS TO BE READ A S RS.48 LACS. (VIII) 12. THE APEX COURT IN CENTRAL BUREAU INVESTI GATION VS. V.C.SHUKLA AND OTHERS, (1998) 3 SUPREME COURT CASES 410 HAS LAID DOWN THAT: - (IX) FILE CONTAINING LOOSE SHEETS OF PAPERS ARE NO T 'BOOK' AND HENCE ENTRIES THEREIN ARE NOT ADMISSIBLE UNDER SECTION 34 OF THE EVIDENCE ACT, 1872. (X) 13. SIMILARLY, THE DOCUMENT ANNEXURE A-37 RECOV ERED DURING THE COURSE OF SEARCH IN THE PRESENT CASE IS A DUMB DOCU MENT AND LEAD US NOWHERE. THUS, THE TRIBUNAL RIGHTLY DELETED THE ADDITION OF RS.48 LACS MADE BY THE ASSESSING OFFICER ON ACCO UNT OF UNDISCLOSED INCOME ON THE BASIS OF SEIZED MATERIAL. FURTHER RELIANCE IS PLACED ON FOLLOWING JUDICIAL CI TATIONS: (II) NIRMAL FASHIONS (P) LTD. VS DCIT (2009) 23 DTR 386 (KOL)(TRIB) (III) CIT V SATYAPAL WASSAN (2007) 295 ITR (AT) 352 (JABALPUR) (IV) BANSAL STRIPS (P)LTD. V ACIT (2006) 99 ITD 177 (DEL) (V) ADDL. CIT V PRSANT AHLUWALIA (2005) 92 TTJ 464 (CTK) (VI) CIT V D.K. GUPTA (2009) 308 ITR 230 (DELHI). (VII) DR. SURENDERANATH REDDY VS ACIT (2000) 72 ITD 205 (HYD) (TIB): ITA NOS. 872 TO 875/JP/2013-ASSESSEES APPEAL ITA NOS. 899 TO 901/JP/2013- DEPTTS APPEAL SHRI BADRI NARAIN SODANI VS. DCIT AYS : 2007-08 TO 2010-11 16 3.1 LD. COUNSEL FURTHER CONTENDS THAT IN FOLLOWING CASES JUDICIAL AUTHORITIES HAVE HELD THAT IN BLOCK ASSESSMENT ADDITIONS CAN BE MADE IN DIFFERENT YEARS ON THE BASIS OF EVIDENCE RELEVANT TO SPECIFIC ASSES SMENT YEAR ONLY: I. POOJA BHATT VS ACIT (2000) 73 ITD 205 (MUM) II. AMARJEET SINGH BAXI (HUF) V ACIT (2003) 263 ITR 75 (DEL) III. CIT V KHAJAN SINGH & BROS. (2008) 304 ITR IV. S.P. GOYAL VS. DCIT (2002) 77 TTJ (MUMBAI (TM)1 V. AMARJIT SINGH BAKSHI (HUF) VS. ACIT (2003) 81 T TJ (DEL)(TM) 169 3.2 IT IS CONTENDED THAT AFTER 2 DAYS METICULOUS SE ARCH PROCESS AND AFTER PROPER VERIFICATION OF INCRIMINATING DOCUMENTS, THE SEARCH PARTY ACCEPTED DISCLOSURE OF RS. 46 LACS AS ADDITIONAL INCOME AND ASSESSEE FURTHER OFFERED RS. 5 LACS TOTALING THE ADDITIONAL INCOME TO 51 LAC S. DUE TO HAPHAZARD NATURE OF DOCUMENTS AND A LONG PERIOD OF 6 YEARS, IT WAS N ATURAL THAT IN INQUIRIES DURING ASSESSMENT, ASSESSEE AT TIMES GOT CONFUSED A BOUT THE ENTRIES. SOMETIMES STATING TO ADD ONE ZERO, TWO ZEROS OR THR EE ZEROS TO THE JOTTED FIGURES. WHEN THE ROUGH, HAPHAZARD AND NONSPECIFIC ENTRIES SPREADING TO 6 YEARS ARE ASKED TO BE EXPLAINED, THERE IS NO GAINSA YING THAT ASSESSE WILL ANSWER EVERY QUESTION WITH PRECISION, THUS SOME MIS MATCH WAS A NATURAL CONSEQUENCE. THIS IS MORE SO THAT BOTH AUTHORITIES ALSO HAVE MISMATCHED MANY FACTUAL ASPECTS WHILE MAKING THEIR OWN ESTIMAT ES. LD. AO GAVE A FINDING OF FACT THAT BOOKS ARE HAPHAZARD WITH REPET ITIONS OF SAME ENTRIES. SIMILARLY LD. CIT(A) INITIALLY GAVE CATEGORICAL OBS ERVATIONS THAT ENTRIES ARE HAPHAZARD AND UNSPECIFIC, THIS IS ACCEPTED BY LD. A O TO BE CORRECT IN REMAND PROCEEEDINGS. HOWEVER LD. CIT(A) WITHOUT ANY NEW MA TERIAL OR INFORMATION SUMMED UP THE ASSUMPTION THAT SAME INCRIMINATING M ATERIAL IS REGULARLY A REGULARLY MAINTAINED SET OF RECORD. BASED ON THIS U NFOUNDED ASSUMPTION LD. ITA NOS. 872 TO 875/JP/2013-ASSESSEES APPEAL ITA NOS. 899 TO 901/JP/2013- DEPTTS APPEAL SHRI BADRI NARAIN SODANI VS. DCIT AYS : 2007-08 TO 2010-11 17 CIT (A) RECOURSED TO AN ARBITRARY ESTIMATE OF ENHAN CING THE ADDITIONS ON SURMISES TO ADD 3 ZEROS TO ALL THE NOTINGS. THE UN DISPUTED FACT THAT ASSESSEES FINANCING BUSINESS WAS OF 100 DAILY INST ALLMENTS REPAYMENT BASIS HAS BEEN CONVENIENTLY IGNORED. LD. CIT(A) HAS THUS MISCONSTRUED THE ENTIRE METHODOLOGY, PATTERN AND MODUS OPERANDI OF B USINESS AND FACTS EMERGING FROM THE RECORD. THE FINDINGS, OBSERVATION S AND ESTIMATE MADE BY LD. CIT(A) IS ASSAILED ON FOLLOWING POINTS:- I. LD. CIT (A) CLAIMS TO HAVE RELIED UPON THE TABU LATION SHEETS ALLEGEDLY GENERATED DURING THE COURSE OF THE ASSESS MENT PROCEEDINGS, HOWEVER NEITHER THEY ARE MENTIONED IN THE BODY OF THE ASSESSMENT ORDER NOR CONFRONTED TO ASSESSEE. HONBL E SUPREME COURT HAS HELD THAT ADDITIONS BASED ON SUCH WORKING WITHOUT CONFRONTING TO ASSESSEE CANNOT BE SUSTAINED. THUS T HE ALLEGED TABULATION SHEETS CANNOT BE CONSTRUED AS RELEVANT A ND MATERIAL FOR SUSTAINING SUCH ESTIMATE OF UNDISCLOSED INCOME. II. LD. CIT (A) OBSERVING THAT THE ADDITIONS AND AS SESSMENTS AS FRAMED WERE NONSPECIFIC AND VAGUE CALLED FOR A REMA ND REPORT THEREON. LD. AO RELIED ON ONE PAPER WHICH IS RE-PR ODUCED IN THE ORDER. LD. CIT(A) WITHOUT ASSIGNING ANY CONVINCING REASON RELIED ON TWO DIFFERENT PAPERS AND WITHOUT EXAMINING THE NAT URE OF ENTRIES AND TRANSACTIONS STRAIGHT-AWAY ADDED THREE ZEROS TO ALL THE FIGURES WRITTEN ON THESE NONSPECIFIC DOCUMENTS WITH OUT ANY EXCEPTION AND WORKED OUT THE ALLEGED PEAK AMOUNT AND CONFIRMED THE ADDITIONS. III. THE LEARNED CIT (A) SUMMARILY OVER-LOOKED THE VITAL FACTS AND CIRCUMSTANCES OF THE CASE, THAT MONEY LENDING ACTIV ITIES CARRIED ON IN 100 INSTALLMENTS BASIS RECOVERABLE ON DAILY BA SIS. IN SUCH MONEY LENDING ACTIVITIES, ITS COMMON PRACTICE THAT THE DAILY INSTALLMENTS RECOVERABLE COULD NEVER BE A SUBSTANT IAL AMOUNT, BY ADDITING 000 TO ALL THE INSCRIPTIONS LD. CIT(A) HAS ARRIVED AT A GROSSLY INAPPROPRIATE, UNREASONABLE AND CAPRICIOUS ESTIMATE OF PEAK WORKING. IN ABSENCE OF ANY CORROBORATIVE MATERIAL, EVIDENCE OR ITA NOS. 872 TO 875/JP/2013-ASSESSEES APPEAL ITA NOS. 899 TO 901/JP/2013- DEPTTS APPEAL SHRI BADRI NARAIN SODANI VS. DCIT AYS : 2007-08 TO 2010-11 18 STATEMENT, THE SUMMARY ADOPTION OF 000 TO ALL THE I S NOT MAINTAINABLE. IV. IT IS NOT DISPUTED THAT APPELLANT HAD BEEN DOI NG THIS MONEY LENDING BUSINESS FOR LAST FIVE YEARS AS CONFIRMED BY HIM IN HIS STATEMENT RECORDED AT THE TIME OF SEARCH. IN THESE CIRCUMSTAN CES, THE FAIR AND REASONABLE WAY FOR ADDITIONS WAS: A. EITHER TO COMPUTE SUCH INVESTMENT AND INTEREST I N YEAR-WISE WISE MANNER AND ESTIMATE THE UNDISCLOSED INCOME TIM E ON THE BASIS OF ASSETS AND INVESTMENT THEORY FOR EACH YE AR. HOWEVER NO UNDISCLOSED ASSETS EXCEPT INCRIMINATING MATERIAL WERE FOUND DURING SEARCH B. TO AVOID LONG WINDING WORKING AND THE DIFFICULTI ES IN DOING SO, IT WAS AGREED THAT SHOULD OFFER THE AGGREGATE OF INTER EST AND IN ONE YEAR I.E. IN THE A.Y. 2009-10, WHICH WAS ABIDED BY OFFERING RS. 51 LACES WHICH IS ASSESSED. C. THE OTHER LOGICAL OPTION OF ESTIMATE WAS TO ACCE PT ASSESSEES SWORN ASSESSMENT DURING THE COURSE OF SEARCH. HONB LE SUPREME COURT ALSO HAS HELD THAT STATEMENT GIVEN IN FIRST BLUSH AT THE TIME OF SEARCH IS RELIABLE PIECE OF EVIDENCE . THUS AN EXTENSIVE EXERCISE OF VERIFICATION CARRIED OUT BY D EPARTMENTS OWN SEARCH PARTY MAY BE ADOPTED IN THIS BEHALF. D. IT IS ALSO AN UNDISPUTED FACT THAT EXCEPT THE IN VESTMENT IN THE MONEY TH3E SAID 100 DAILY INSTALLMENTS BASIS FINANC ING BUSINESS, ASSESSE NEITHER POSSESSED ANY OTHER INVESTMENT OR A SSET IN ANY FORM NOR ANY OTHER EVIDENCE WAS FOUND. AS SUCH HUGE UNDISCLOSED INCOME COULD NOT BE REFLECTED IN ANY FO RM AT ANY STAGE SO IT WOULD BE ILLOGICAL TO ESTIMATE THE UNDI SCLOSED INCOME TO SUCH MAGNITUDE THAT TOO IN TWO YEARS I.E. IN 200 7-08 & 2008- 09. APPARENTLY SUCH WORKING OF UNDISCLOSED INVESTME NT IS ILLOGICAL AND DEVOID OF MERITS. E. IT HAS BEEN LOST SIGHT OF BY THE AUTHORITIES BEL OW, THAT 100 DAILY INSTALLMENTS BASIS FINANCE IS AVAILED BY THE PERSO NS OF ORDINARY MEANS WHO ARE IN FINANCIALLY TIGHT CONDITION, UNA BLE TO RAISE BORROWING FROM REGULAR SOURCES. NO AFFLUENT PERSON REQUIRING FUNDS TO THE MAGNITUDE OF RS.50 LAC TO 60 LAC (AS E NVISAGED BY ITA NOS. 872 TO 875/JP/2013-ASSESSEES APPEAL ITA NOS. 899 TO 901/JP/2013- DEPTTS APPEAL SHRI BADRI NARAIN SODANI VS. DCIT AYS : 2007-08 TO 2010-11 19 THE LEARNED CIT (A) WOULD EVER OPT FOR SUCH A CRUDE FINANCING SCHEME. THUS THIS CLINCHING CIRCUMSTANTIAL EVIDENCE S WHICH HAS POTENTIAL OF CHANGING THE ENTIRE METHODOLOGY OF EST IMATE HAS BEEN GIVEN NO CREDENCE. F. IT IS TRITE LAW THAT ANY ESTIMATE WHICH LACKS TH E CONSIDERATION OF RELEVANT, PERTINENT AND CLINCHING FACTS CANNOT BE U PHELD. THE ESTIMATE AS ADOPTED BY LD.CIT(A) DESERVES TO FAIL O N THIS FUNDAMENTAL MISTAKE. G. DURING THE COURSE OF APPEAL PROCEEDINGS, APPELLA NT SUBMITTED A MONTHLY SUMMARY OF CASH W.E.F. 1.4.2008 TO 31.3.2 009 ON THE BASIS OF INCRIMINATING PAPERS WITH LD. CIT (A) VID E LETTER DATED 7 TH AUGUST, 2013 (COPY OF THE LETTER ALONG-WITH THE SUM MARY SHEET PLACED ON PB NO. 33 TO 40). THE SUMMARY SHEETS FOR FY 2008- 09 DEPICTED TOTAL AMOUNT INVOLVED IN MONEY-LENDING BUSINESS AT RS.17,36,900/- FOR THE FINANCIAL YEAR 2008-09 I.E. A.Y. 2009-10. ANOTHER REASONABLE METHOD WAS TO MAKE FORWARD AND B ACKWARD CALCULATION TO DETERMINE YEAR WISE UNDISCLOSED INVE STMENT. WHILE DOING SO ASSESSE HAS MADE THE ADJUSTMENTS OF OPENING INVESTMENT ALSO. H. A TIME TESTED METHOD TO DETERMINE YEAR WISE UNDI SCLOSED INCOME WAS TO WORK OUT INITIAL INVESTMENT AND INTER EST OF FIRST YEAR, THEREAFTER, THE YEAR WISE INTEREST INCOME ALO NG WITH ANY INCREMENTAL CAPITAL SHOULD HAVE BEEN ADDED IN SUBSE QUENT YEARS. THUS WITHOUT ADDRESSING VITAL FACTS, NATURE OF 100 DAILY INSTALLMENT FINANCING ACTIVITY, THE FINANCIAL POTEN TIAL OF SUCH BUSINESS, REASONABLE METHODOLOGIES OF ESTIMATION AN D THE WORKING OFFERED BY ASSESSE AS DEPICTED IN MONTHLY SUMMARY SHEETS AND A HOST OF OTHER VALID CONSIDERATIONS, T HE LEARNED CIT (A) ARBITRARILY ESTIMATED THE PEAK AMOUNT OF RS. 1,62,15,000/- BY PRESUMPTIVELY ADDING THREE ZEROS TO ALL JOTTE D FIGURES. THUS THE WORKING OF THE UNDISCLOSED INCOME AND PEAK-AMOU NT THEREOF HAS NO CORROBORATION, SANCTITY, CREDENCE, AND RESPE CT FOR THE JUDICIAL PRECEDENTS OF REASONABLENESS OF ESTIMATES AND DEMONSTRATES LACK OF APPLICATION OF MIND. SUCH UNTE NABLE ESTIMATE DESERVES TO BE QUASHED SUMMARILY. ITA NOS. 872 TO 875/JP/2013-ASSESSEES APPEAL ITA NOS. 899 TO 901/JP/2013- DEPTTS APPEAL SHRI BADRI NARAIN SODANI VS. DCIT AYS : 2007-08 TO 2010-11 20 3.3 LD. COUNSEL THEN ADVERTED TO VARIOUS OTHER INCO NSISTENCIES EMERGING FROM THE ORDERS OF AUTHORITIES BELOW: I. LD. AO TOOK UP THE ASSESSMENT PROCEEDINGS SIMUL TANEOUSLY IN RESPECT OF ALL THE SEARCH YEARS. ACCORDINGLY, THE A PPELLANT WAS REQUIRED TO FURNISH CONSOLIDATED REPLY IN RESPECT O F ALL THE ASSESSMENT YEARS. FOR AY 2008-09, ASSESSEE WAS ASKE D TO EXPLAIN AS TO WHY THE ADDITIONAL INCOME WAS NOT SHO WN AS ADMITTED BY HIM U/S 132(4) STATEMENTS. ASSESSEE REP LIED VIDE LETTER DATED 27.12.2011 THAT THE INVESTMENT IN THE MONEY LENDING BUSINESS WAS RS.16,93,000/- (AS REVEALED FROM EX-A- 8/42) AND NOT RS.1,69,30,000/- AS TAKEN BY THE DEPARTMENT. IN SUPPORT, THE LD. AO HAD REPRODUCED A PHOTO COPY OF AN EXHIBI T AT PAGE NO.4 OF THE ASSESSMENT ORDER. A PERUSAL OF THIS EXH IBIT WILL REVEAL THAT NOT A SINGLE TRANSACTION PERTAINED TO THIS ASS ESSMENT YEAR. HOWEVER, LD. AO HAD TURNED DOWN THIS FACTUAL CONTEN TION EMERGING FROM THE SEIZED RECORD ITSELF IN A SUMMARY MANNER BY FOLLOWING OBSERVATIONS AT PAGE NO.6 OF THE ASSESSME NT ORDER: THUS, IN VIEW OF THE ABOVE DISCUSSIONS, THE EXPLANA TION OFFERED BY THE ASSESSEE WITH REGARD TO THE ENTRIES FOUND RECORDED ON SEIZED DOCUMENTS IS NOT ACCEPTABLE AND IS THEREFORE REJECT ED. AN ADDITION OF RS.21,30,000/- (SUBSEQUENTLY REVISED TO RS.47,65,00 0) BEING THE PRINCIPAL FOUND ADVANCED BY THE ASSESSEE IN HIS MON EY LENDING BUSINESS OUT OF HIS UNDISCLOSED INCOME IS MADE TO T HE TOTAL INCOME OF THE ASSESSEE. INTEREST INCOME AMOUNTING TO RS.9,46, 581/-- IS ALSO ADDED TO THE TOTAL INCOME BEING UNDISCLOSED INCOME OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. 3.4 THE CRUCIAL FACTS REGARDING METHODOLOGY OF ADVA NCING 100 DAILY INSTALLMENT RECOVERABLE IN 100 DAILY INSTALLMENTS (AS EVIDENT FROM EX-AS-1 PAGES 6 TO 41 AND AS EXPLAINED IN REPLY TO QUESTION NO.28 OF THE STATEMENT AND REPRODUCED IN THE BODY OF THE ASSESSMENT ORDER) HAVE BEEN COMPLETELY IGNORED. WITHOUT CONSIDERING SUCH IMPORTANT ASPECTS , NO LOGICAL WORKING OR ESTIMATE OF THE INVESTMENT MADE IN SUCH FINANCE ACT IVITIES CAN BE ESTIMATED IN A REASONABLE MANNER. ITA NOS. 872 TO 875/JP/2013-ASSESSEES APPEAL ITA NOS. 899 TO 901/JP/2013- DEPTTS APPEAL SHRI BADRI NARAIN SODANI VS. DCIT AYS : 2007-08 TO 2010-11 21 3.5 ADVERTING TO LD. AOS ESTIMATE OF UNDISCLOSED I NCOME, IT WAS ASSAILED BEFORE THE LEARNED CIT (A) ON THE FOLLOWING COUNTS: - (I) ON READING OF THE ASSESSMENT ORDER, IT WOULD BE NOTED THAT WHILE MAKING ADDITIONS, THE LEARNED AO HAD REFERRED AND R E-PRODUCED ONLY ONE INCRIMINATING PAPER EX-AS-1 ALONG WITH THE RELE VANT EXTRACTS FROM THE STATEMENT OF THE APPELLANT VIDE WHICH SUCH PAPE R WAS SOUGHT TO BE EXPLAINED AT THE TIME OF SEARCH OPERATIONS AND MADE ADDITIONS OF VARYING AMOUNTS IN THE DIFFERENT ASSESSMENT YEARS, WITHOUT RELATING THE SPECIFIC PAPER TO SPECIFIC ASSESSMENT YEAR. IN ALL THE IMPUGNED ASSESSMENT YEARS SAME FACTS, INCRIMINATING PAPER AR E REPRODUCED AND REPEATED IN STEREOTYPED MANNER WITHOUT ANY PERTINEN T LINE OF ACTION ABOUT METHODOLOGY OF ESTIMATE. THERE IS NO MENTION OF ANY ALLEGED TABULATION SHEETS AS CLAIMED SUBSEQUENTLY BY THE LEARNED AO IN HIS REMAND REPORT, WHICH ARE ALSO CONSIDERED BY LD. CIT (A) IN WORKING OF SO-CALLED PEAK INVESTMENT IN SHUFFLING AND ENHANCIN G THE ADDITIONS. IT IS PERTINENT TO NOTE THAT THE RE-PRODUCED PAPER IN ALL ASSESSMENT ORDERS PERTAIN TO ROUGH TRANSACTIONS OF AY 2009-10 ONLY. THE NON APPLICATION OF MIND AND CRYPTIC WORKING IS EVIDENT FROM THE GLARING FACT THAT IT HAS BEEN MADE BASIS FOR ADDITIONS IN ALL TH E YEARS. THUS THERE IS NEITHER YEAR WISE CO-RELATION NOR VERIFICATION OF A LLEGED INCRIMINATING MATERIAL. IN THE ABSENCE OF NEXUS, RELEVANCY AND AT TRIBUTION THE IMPUGNED WORKING SANS CONFRONTATION OF ALLEGED TABU LATION SHEETS, THERE IS NO BASIS OR JUSTIFICATION FOR LD. CT(A)S ADDITIONS. SUCH PERFUNCTORY WORKING AND ADDITIONS ARE UNTENABLE, BA SELESS AND LIABLE TO BE DELETED. (II) LD. AO HAS NOT INDICATED ANY OMISSION OF ZER OS AND MADE ADDITIONS ON THE BASIS OF SELECTIVE USE OF SEARCH STATEMENT. IT HAS BEEN ALLEGED THAT APPELLANT HAS BEEN CHANGING VERSION FROM TIME TO TIME. IT HAS NOT BEEN APPRECIATED THAT THERE IS NO CONTRADICTORY VER SION IN ORIGINAL SEARCH STATEMENT, THE LENGTHY POST SEARCH PROCEEDIN GS MADE ASSESSEES MIND UNSTABLE AS BEING ALONE HE COULD NO T COPE UP WITH THE PRESSURE; THIS RESULTED IN SUCH MISMATCH OF SUB SEQUENT VERSIONS. LD. AO HAS HEAVILY RELIED UPON A PART OF SUCH STAT EMENT REGARDING OMISSION OF NO OF ZEROS, WHICH SUITED BEST TO REVEN UES INTEREST. (III) THE INCRIMINATING PAPERS AND DOCUMENTS AS FO UND AND SEIZED IN THE SEARCH OPERATIONS ARE IN THE NATURE OF CASH B OOK AND THE ITA NOS. 872 TO 875/JP/2013-ASSESSEES APPEAL ITA NOS. 899 TO 901/JP/2013- DEPTTS APPEAL SHRI BADRI NARAIN SODANI VS. DCIT AYS : 2007-08 TO 2010-11 22 UNDISCLOSED INCOME IS WORKED OUT ON THE BASIS OF TH E JOTTINGS AS CONTAINED IN PAGE 2 OF EXHIBIT A-1.(KINDLY REFER TO PAGE NO.14 OF THE APPEAL ORDER). (IV) FOR THE PURPOSE, RELIANCE IS PLACED ON ONE EX HIBIT I.E. PAGE-2 OF A-1 INSTEAD OF EX.AS-1 PAGE NO.1 AS RELIED UPON B Y THE AO FOR WORKING OUT UNDISCLOSED INCOME. (REMAINING SEIZED P APERS AND DOCUMENTS WERE IGNORED COMPLETELY). (V) THREE ZEROS WERE ADDED IN THE TOTAL OF THE FIGU RES OF THE ENTRIES OF THE EXHIBITS 16215 FOR THE YEAR. ACCORDINGLY, T OTAL UNDISCLOSED INCOME WAS WORKED OUT AT RS.1,62,15,000/- FOR THE A.YRS. 2007- 08 & 2008-09 AND ADDITIONS WERE MADE WHICH INCLUDED THE ESTIMATED INTEREST INCOME OF RS.19,45,800/-. AS PEA K AMOUNT OF RS.1,62,15,000/- WAS WORKED OUT AND ASSESSED IN THE A.Y.2007- 08 & A.Y. 2008-09 SO THE LEARNED CIT (A) HAS DELET ED THE ADDITION OF RS.21,30,000/- (SUBSEQUENTLY REVISED TO RS.47,65,000 AND INCORRECTLY MENTIONED RS.30,76,58 1/- IN THE APPEAL ORDER) WITH THE FOLLOWING FINDINGS RECORDED AT PAGE NO.8 OF THE APPEAL ORDER WHICH IS RE-PRODUCED AS UNDER F OR READY REFERENCE: (E) AT NO STAGE, THE LD. AO HAD EVER GIVEN HIS WORKING OF RS.21,35,000/- FOR THIS YEAR. IT IS STILL UNKNOWN O N WHAT BASIS SUCH WORKING HAS BEEN DONE. AS SUCH WORKING HAS BE EN DONE ON THE BACK OF THE APPELLANT WITHOUT ANY BASIS AND WITHOUT GIVING ANY OPPORTUNITY TO THE SAID WORKING DESERVES TO BE QUASHED. (F)FROM THE READING OF THE ASSESSMENT ORDER, IT WO ULD BE NOTED THAT THE LEARNED AO HAD NOT DISPUTED THE WORKING OF THE ADDITIONAL INCOME OF RS.46 LAC AS WORKED OUT AND SH OWN IN THE RETURN FOR THE YEA. IN ABSENCE OF ANY REASON AND MA TERIAL ON RECORD, SUCH WORKING COULD NOT BE DENIED. MORE-OVER , WHILE QUANTIFYING THE ADDITION FOR THE YEAR AT RS.32 LAC APPROXIMATELY, THE LEARNED AO HAD MADE REFERENCE TO SUCH WORKING I N PASSING MANNER AS EVIDENT FROM THE BODY OF THE ASSESSMENT O RDER. HOWEVER IT IS AN EVIDENT FACT THAT THE AOS WORKING INCLUDED PART OF THE ADDITIONAL INCOME OF RS.46 AS DECLARED BY TH E APPELLANT IN THE RETURN OF INCOME. AFTER THE LAPSE OF 15 MONTHS (EVEN AFTER FILING OF THE APPEAL), THE LEARNED AO COULD NOT KNO W ABOUT SUCH ITA NOS. 872 TO 875/JP/2013-ASSESSEES APPEAL ITA NOS. 899 TO 901/JP/2013- DEPTTS APPEAL SHRI BADRI NARAIN SODANI VS. DCIT AYS : 2007-08 TO 2010-11 23 LAPSE IN HIS WORKING AND ABRUPTLY ENHANCED THE ASSE SSED INCOME BY RS.46,71,700/- (ADDING ENTIRE RETURNED IN COME SHOWN IN THE REVISED RETURN) VIDE RECTIFICATION ORDER PAS SED U/S 154 OF THE ACT ON 05.03.2012 WITHOUT ASSIGNING ANY REASON AND WITHOUT GIVING AN OPPORTUNITY TO THYE APPELLANT. THE APPELL ANT HAD ALREADY CHALLENGED THIS RECTIFICATION ORDER WHICH I S PENDING ON THE DATE. BUT THIS ORDER CLEARLY REVEALED THE ERRON EOUS WORKING OF THE ADDITIONAL INCOME BY THE LEARNED AO. (G) AGAIN WITHOUT PREJUDICE TO THE ABOVE O BJECTIONS, THE LEARNED AO HAD ALSO FAILED TO FOLLOW THE TELESCOPIN G THEORY TO GIVE CREDIT OF THE ADDITIONS MADE IN EARLIER YEARS UNDER THE SAME HEAD. THUS SUCH WORKING IS CONTRARY TO THE PRINCIPL ES OF TELESCOPING THEORY. (H) AS THE APPELLANT HAD OWNED ALL THE FINANCIAL T RANSACTIONS IN HIS OWN CASE AND OFFERED ADDITIONAL INCOME OF RS.46 LAC ON ACCOUNT OF SUCH TRANSACTION. IN THE CIRCUMSTANCES, TESTIMONY OF THE CO-CALLED WITNESS IN THIS REGARD HAD BECOME IRR ELEVANT AND IMMATERIAL FOR DRAWING CONCLUSION. IN VIEW OF ABOVE DISCUSSIONS, THE ADDITION OF RS.30 ,76,581/- (RS.21,30,000/ ON ACCOUNT OF PRINCIPLE AMOUNT PLUS RS.9,46,581/- ON ACCOUNT OF INTEREST RECEIPTS) IS F ACTUALLY AND LEGALLY INCORRECT AND DESERVES TO BE DELETED SUMMAR ILY. 3.6 IT IS FURTHER CONTENDED THAT LD. CIT (A) WHILE DELETING ADDITIONS MADE BY AO CORRECTLY POINTED OUT VARIOUS DEFICIENCIES IN TH E WORKING, CONSEQUENTLY AOS ADDITIONS FOR THESE FOUR YEARS BECAME INFRUCTU OUS. AS A LOGICAL CONSEQUENCE THE ADDITIONS AS ENHANCED BY THE LD CIT (A) IN THE ASSESSMENT YEARS 2007-08 & 2008-09 WILL ALSO BECOME AUTOMATICA LLY INFRUCTUOUS AS THEY ARE BASED ON AOS EARLIER OBSERVATIONS COUPLED WITH ASSESSEES ABOVE OBJECTIONS. LD. CIT (A) FINDINGS ARE SELF CONTRADI CTORY IN AS MUCH AS ONCE THE SEIZED PAPERS AND DOCUMENTS ARE HELD AS HAPHAZA RD AND NONSPECIFIC AND SUBSEQUENTLY WITHOUT REASONS OR JUSTIFICATION T HEY ARE SUMMARILY HELD AS ITA NOS. 872 TO 875/JP/2013-ASSESSEES APPEAL ITA NOS. 899 TO 901/JP/2013- DEPTTS APPEAL SHRI BADRI NARAIN SODANI VS. DCIT AYS : 2007-08 TO 2010-11 24 REGULAR BOOKS, THE RELIANCE ON SO CALLED TABULATIO N SHEETS ARE NOWHERE DISCUSSED IN ASSESSMENT PROCEEDINGS. THEREFORE, WOR KING OF UNDISCLOSED INCOME BASED ON SUCH ERRONEOUS FACTUAL FINDINGS AND WORKING OF PEAK AMOUNT THEREON BEING BASED ON EVIDENT SUCH SELF-CON TRADICTIONS IS UNSUSTAINABLE. FURTHER LD.CIT(A) ERRED IN LAW AND O N FACTS ON FOLLOWING COUNTS: (A) DESPITE VEHEMENT CONTENTIONS ABOUT FACTS ASSESS EES FINANCING ACTIVITIES BEING BASED ON 100 DAILY INSTALLMENTS, ITS SMALL VOLUMES AS EVIDENT FROM THE SEIZED PAPERS VIDE EX-A S-1 (PAGES 6 TO 41), LD. CIT(A) DID NOT CONSIDER THE SAME AND ARBITRARILY ADDED 3 ZEROS TO EACH WRITING. THUS THE ESTIMATE OF PEAK OF UNDISCLOSED INCOME HAS ARRIVED AT WITHOUT CONSIDERI NG THE MODUS OPERANDI OF THE MONEY LENDING BUSINESS BASED ON 100 INSTALLMENTS- BASIS REPAYMENTS. ASSESSEE FILED A CA SH FLOW STATEMENT BASED ON 100 DAILY INSTALLMENTS REPAYMENT S HOWEVER THE SAME IS NOT AT ALL COMMENTED UPON MUCH LESS EVE N CONSIDERED AS THERE IS NO MENTION IN APPEAL ORDERS IN THIS BEHALF. (B) THE WORKING OF THE INTEREST INCOME @ 12% ON THE SUCH EXORBITANT AND ARBITRARY PEAK AMOUNT IS ABSURD AS IT BASED ON ASSUMPTION THAT ENTIRE PEAK HAS BEEN ADVANCED THROU GHOUT THE YEAR, WHICH IS PRACTICALLY IMPOSSIBLE. THE CONTRADI CTION IS FURTHER CLEAR FROM THE FACT THAT LD. AO ESTIMATED MEAN INTE REST INCOME @ 4% OF THE CASH AVAILABLE. ASSESSEE CORRECTLY WORK ED OUT AND OFFERED THE ESTIMATED ADDITIONAL INCOME OF RS.46 LA C PLUS RS.5 LAC EXTRA INCOME TO FINALIZE THE SEARCH PROCEEDINGS AMICABLY AND PEACEFULLY. THE SEARCHING OFFICERS OF THE INVESTIGA TION WING WERE SATISFIED WITH SUCH WORKING AND THE ADDITIONAL INCOME OFFERED, ON THE BASIS THEREOF, SUCH ADDITIONAL INCO ME WAS OFFERED AND DECLARED THE BLOCK PERIOD RETURNS. THE ASSESSIN G OFFICER AND THE LEARNED CIT (A) HAD HOWEVER BRUSHED ASIDE S UCH WORKING WITHOUT POINTING OUT ANY DISCREPANCY IN THE CASH FLOW WORKING, FIGURES OF THE LOANS/ INVESTMENTS AND WITH OUT BRINGING ANY MATERIAL ON RECORD TO COUNTER THE ASSESSEES WO RKING OR CASH FLOW. THUS THE WORKING OF ADDITIONS MADE BY AO ARE ADMITTEDLY FALLACIOUS AND THE WORKING PEAK-AMOUNT BY LD. ITA NOS. 872 TO 875/JP/2013-ASSESSEES APPEAL ITA NOS. 899 TO 901/JP/2013- DEPTTS APPEAL SHRI BADRI NARAIN SODANI VS. DCIT AYS : 2007-08 TO 2010-11 25 CIT(A) IS PALPABLY ERRONEOUS, IN VIOLATION OF PRINC IPLES OF NATURAL JUSTICE AND IN TOTAL DISREGARD OF SETTLED JUDICIAL PROPOSITION AND BASED ON ARBITRARY ESTIMATES. THE ORDER OF AUTHORIT IES BELOW BEING GROSSLY ERRONEOUS AND UNTENABLE, THE ADDITION S MADE DESERVE TO BE DELETED. CONSEQUENTLY THE ADDITIONAL INCOME AS DISCLOSED IN THE BLOCK-PERIOD RETURNS BASED ON SWOR N STATEMENT DEPOSED DURING SEARCH OPERATIONS DESERVES TO BE ACC EPTED. 3.7 IT IS CONTENDED THAT IF ASSESSEES VERSIONS WER E AT VARIANCE, AS PER SETTLED LEGAL PRINCIPLES IN THIS SITUATION, RECOURS E COULD BE MADE TO ANY OF THE FOLLOWING PROPOSITIONS: A. IGNORE ALL THE STATEMENT OF ASSESSEE AS UNRELIAB LE INCLUDING SEARCH STATEMENT AND WORK OUT CORRECT UNDISCLOSED INVESTME NT BY A PROPER METHODOLOGY. SURPRISINGLY THOUGH ASSESSEE HAS BEEN ALLEGED FOR GIVING CONTRADICTORY VERSION ONLY THE ONE RESULTING IN HIGHEST ADDITIONS HAS BEEN ADOPTED. IF SOMEBODYS VERSION I S UNRELIABLE THE SAME SHOULD BE IGNORED, LAW DOES NOT PERMIT SELECTI VE USE OF IT TO SADDLE TAXES ON ASSESSEE IN AN ARBITRARY MANNER. B. THE SEARCH STATEMENT BEING THE FIRST BLUSH STATE MENT, IT BEING ACCEPTED BY SEARCH PARTY AND SEIZED JEWELRY HAVING BEEN RELEASED RELYING ON IT, THE SAME SHOULD HAVE BEEN FOLLOWED. SINCE THE ASSESSEE HAVING HONORED THE DISCLOSURE NO FURTHER A DDITIONS CAN BE MADE. C. ON THE BASIS OF SUCH MODUS OPERANDI, HE HAD WOR KED OUT HIS ADDITIONAL INCOME AT RS.51 LAC IN CONSULTATION WITH THE SEARCHING PARTY AND HAD OFFERED THE ADDITIONAL INCOME WITH TH E CONSENT OF THE SEARCHING PARTY ONLY. HOWEVER, THE LEARNED AO HAD H EAVILY RELIED UPON A PART OF THE STATEMENT IGNORING THE REST OF T HE STATEMENT TO ARRIVE AT ARBITRARY FIGURES OF UNIMAGINABLE MAGNITU DE BY ADDING THREE ZEROS IN EACH AND EVERY TRANSACTION WITHOUT A PPRECIATING THE FACTS AND CIRCUMSTANCES UNDER WHICH SUCH MONEY LEND ING ACTIVITIES HAD BEEN CARRIED OUT. THUS THE ADDITIONS SO MADE WE RE TOTALLY ILLOGICAL AND WITHOUT ANY BASIS. ITA NOS. 872 TO 875/JP/2013-ASSESSEES APPEAL ITA NOS. 899 TO 901/JP/2013- DEPTTS APPEAL SHRI BADRI NARAIN SODANI VS. DCIT AYS : 2007-08 TO 2010-11 26 D. SINCE THE LD. AO AND LD. CIT(A) ACCEPTED THAT AO S ADDITIONS ARE NONSPECIFIC AND NOT BASED ON PROPER CONSIDERATIONS, THERE IS NO MERIT IN THE ADDITIONS MADE BY LD. AO. E. ASSESSEE HAS DEMONSTRATED THAT THE ESTIMATION OF UNDISCLOSED INCOME AS MADE BY LD. CIT(A) AGAIN WORST THAN THE A O AND MILES AWAY FROM THE REALITY, THE SAME CANNOT BE RELIED O N. F. IN THESE FACTS AND CIRCUMSTANCES IT IS DESIRABLE THAT THAT THE SURRENDER AS MADE BY ASSESSEE BY WAY OF A SWORN STA TEMENT DURING THE COURSE OF SEARCH BE RELIED. SINCE SUCH D ISCLOSURE HAS BEEN OFFERED IN THE BLOCK RETURNS BY ASSESSEE, NO F URTHER ADDITIONS ARE CALLED FOR. 4. LD. DR SUBMITTED THE COPIES OF TABULATION SHEETS FOUND IN THE ASSESSMENT RECORD AND RELIED ON THE ORDERS OF AUTHO RITIES BELOW. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. RELEVANT FACTS ABOUT THE S EARCH, STATEMENT, DECLARATION OF ADDITIONAL INCOME BY ASSESSE HAVE BE EN NARRATED ABOVE. SOME FACTS WHICH CLEARLY EMERGE FROM THE RECORD ARE THAT THE INCRIMINATING MATERIAL REVEALED THAT ASSESSE WAS ENGAGED IN FINAN CING BUSINESS MOSTLY ON REPAYABLE IN 100 INSTALLMENTS, CARRIED OUT OF BO OKS AND NOT DISCLOSED. STATEMENT WAS RECORDED DURING THE COURSE OF SEARCH STATING THE PECULIAR TYPE OF FINANCING BUSINESS WAS CARRIED OUT ON THE B ASIS OF THE SCRIBBLING IN THE DIARY AND LOOSE PAPERS. IN ORDER TO AVOID THE P RESSURE OF THE SEARCH AND CONSEQUENT ASSESSMENT PROCEEDINGS, ASSESSEE INITIAL LY DECLARED THE AGGREGATE ADDITIONAL INCOME QUA THE UNDISCLOSED CAP ITAL AND SUBSEQUENTLY OFFERED FURTHER ADDITIONAL INCOME OF RS.5,00,000/- IN A.Y. 2010-11. 5.1 SOME ASSESSED WHICH WERE EITHER DISCLOSED OR BE LONGING TO OTHER PERSONS LIKE FDRS AND MUTUAL FUNDS WERE EXCLUDED. S IMILARLY CASH AND ITA NOS. 872 TO 875/JP/2013-ASSESSEES APPEAL ITA NOS. 899 TO 901/JP/2013- DEPTTS APPEAL SHRI BADRI NARAIN SODANI VS. DCIT AYS : 2007-08 TO 2010-11 27 JEWELRY FOUND DURING THE COURSE OF SEARCH WERE FOUN D EXPLAINED AND ACCORDINGLY EXCLUDED WHILE FRAMING THE ASSESSMENTS. 5.2 IN THE ASSESSMENT PROCEEDINGS, AO DID NOT ACCEP T ASSESSEES DECLARATION AND ASSESSED THE UNDISCLOSED INCOME AT TOTAL AMOUNT OF RS.2,14,64,823/- FOR ALL THESE YEARS. IN FIRST APPE AL PROCEEDINGS, LD. CIT (A) OBSERVED THAT THE IMPUGNED ASSESSMENT ORDERS PASSED BY THE LEARNED AO WERE VERY UNSPECIFIC AND VAGUE IN NATURE AND CALLED FOR A REMAND REPORT WHICH WAS SUBMITTED ON 3.5.2013 BY LD. AO, WITH FOL LOWING RELEVANT OBSERVATIONS: THE SEIZED DOCUMENTS CONTAIN ENTRIES WHICH ALLEGED LY PERTAIN TO HIS UNDISCLOSED INCOME. THE ENTRIES ARE FOUND RECORDED IN/BY HAND AND AT MANY PLACES DO NOT CONTAIN COMPLETE NARRATION OR DE TAILS. THE FIGURES ALSO HAVE BEEN WRITTEN IN A CODED FORM AND ARE EITH ER FOLLOWED OR DENOMINATED BY A DATE AND/OR FOLLOWED BY CERTAIN DA TES. THE ENTRIES ARE NEITHER CHRONOLOGICAL NOR ARRANGED IN ANY OTHER SEEMINGLY DISCERNIBLE ORDER. THERE ARE ALSO SEVERAL REPETITIO NS WHICH ADDED TO THE COMPLEXITY OF THE ENTRIES. THE ENTRIES PRESENTE D DATA FROM WHICH MEANINGFUL ANALYSIS WAS NOT ONLY CHALLENGING BUT AL SO EXTREMELY DIFFICULT 5.3 THIS REPORT BY LD. AO MAINLY STATED THAT: A. THE ENTRIES ARE NEITHER CHRONOLOGICAL NOR ARRANG ED IN ANY OTHER SEEMINGLY DISCERNIBLE ORDER. B. THERE ARE ALSO SEVERAL REPETITIONS WHICH ADDED T O THE COMPLEXITY OF THE ENTRIES AND MEANINGFUL ANALYSIS OF DATA WAS NOT ONLY CHALLENGING BUT ALSO EXTREMELY DIFFICULT. C. THUS LD. AO IMPLIED THAT ESTIMATE AS MADE IN ASS ESSMENT ORDERS WERE BASED ON UNSPECIFIC AND VAGUE MATERIAL. BESIDE S LD. AO DID NOT APPLY THE TELESCOPING THEORY AS CONTENDED BY AS SESSE FOR CREDIT OF THE ADDITIONS MADE IN EARLIER YEARS. ITA NOS. 872 TO 875/JP/2013-ASSESSEES APPEAL ITA NOS. 899 TO 901/JP/2013- DEPTTS APPEAL SHRI BADRI NARAIN SODANI VS. DCIT AYS : 2007-08 TO 2010-11 28 5.4 THESE OBSERVATIONS COUPLED WITH IGNORING THE CR UCIAL FACT ABOUT ASSESSEES UNDISCLOSED FINANCE BUSINESS WAS MAINLY BASED ON 100 DAYS REPAYABLE INSTALLMENTS INDICATE THAT LD. AOS ESTIM ATE WAS NOT ARRIVED AT WITH JUST AND PROPER CONSIDERATIONS AND INDICATES LACK O F APPLICATION OF MIND. IT MAY BE MENTIONED THAT AN ESTIMATE OR BEST JUDGMENT ASSESSMENT HAS TO BE JUST AND PROPER WITH PROPER NEXUS WITH THE MATERIAL AVAILABLE ON RECORD. JUDICIAL PRECEDENTS HOLD THAT AN ESTIMATE WHICH IS NOT JUST, PROPER AND REASONABLE IS AN ARBITRARY ONE AND UNTENABLE. 5.5 LD. CIT(A) CALLED FOR A REMAND REPORT WITH CATE GORICAL OBSERVATIONS THAT THE ASSESSMENT ORDER WAS UNSPECIFIC AND HAPHAZ ARD AS THE INCRIMINATING MATERIAL AND PAPERS ARE ALSO HAPHAZAR D AND UNSPECIFIC. THE REMAND REPORT DID NOT OFFER ANY NEW MATERIAL OR INF ORMATION AS THE SAME WAS ALREADY ON RECORD. LD. CIT(A) HAS NOT OFFERED A NY COGENT REASONS AS TO HOW THE SAME HAPHAZARD PAPERS, BECAME REGULAR BOOKS . THE ADDITIONS HAVE BEEN ENHANCED BY SUFFIXING 3 ZEROS TO HAPHAZAR D FIGURES. THE ALLEGED TABULATION SHEETS ARE NEITHER MENTIONED IN THE BODY OF THE ASSESSMENT ORDERS NOR CONFRONTED TO THE ASSESSEE. IN THE ENTIR ETY OF SUBMISSIONS, FACTS AND CIRCUMSTANCES IT EMERGES THAT:- A. LD. CIT(A) HAS ERRONEOUSLY HELD THAT THE SEIZED PAPERS AND DOCUMENTS WERE IN THE FORM OF REGULAR BOOKS AND M AINTAINABLE IN PERFECT ORDER. THESE FINDINGS ARE CONTRARY TO RECOR D, IT HAS NOT BEEN ESTABLISHED AS TO HOW THE INCRIMINATING MATERIAL WH ICH ADMITTEDLY WAS HAPHAZARD IN NATURE BECAME REGULARLY MAINTAINED REC ORD. THUS THERE IS NOTHING ON RECORD TO INDICATE AS TO HOW THE FIEL D FINDINGS OF LD. AO GIVEN AFTER RE-EXAMINATION OF RECORD VIDE REMAND RE PLY DATED 3.5.2013 WERE UNRELIABLE OR WRONG. IT WAS A REMAND CALLED BY LD. CIT(A) ON HER OWN INSTANCE WHICH SUPPORTED HER PRIMA FACIE OBSERV ATIONS THAT ADDITIONS WERE IN VAGUE AND UNSPECIFIC MANNER BY LD . AO. ITA NOS. 872 TO 875/JP/2013-ASSESSEES APPEAL ITA NOS. 899 TO 901/JP/2013- DEPTTS APPEAL SHRI BADRI NARAIN SODANI VS. DCIT AYS : 2007-08 TO 2010-11 29 B. LD. AO IMPLIEDLY ADMITTED THAT THE ADDITIONS WER E MADE ON THE BASIS OF HAPHAZARD AND UNSPECIFIC INCRIMINATING PAPERS.TH E ENTRIES ARE FOUND RECORDED IN HAND AND SAME ENTRIES AT MANY PLA CES AND THEY DO NOT CONTAIN COMPLETE NARRATION OR RELEVANT DETAILS. THE FIGURES APPEAR TO HAVE BEEN WRITTEN IN A CODED FORM AND ARE EITHER FOLLOWED OR DENOMINATED BY A DATE AND/OR FOLLOWED BY CERTAIN DA TES. C. LD. CIT(A) HAS NOT DENIED AOS REMAND SUBMISSION S THAT THE INCRIMINATING MATERIALS ENTRIES ARE NEITHER CHRONO LOGICAL NOR ARRANGED IN ANY OTHER SEEMINGLY DISCERNIBLE MANNER. THERE WE RE SEVERAL REPETITIONS WHICH ADDED TO THE COMPLEXITY OF THE EN TRIES. THE ENTRIES PRESENTED DATA FROM WHICH MEANINGFUL ANALYSIS WAS N OT ONLY CHALLENGING BUT ALSO EXTREMELY DIFFICULT. D. ASSESSEES RELIANCE ON HONBLE DELHI HIGH COURT JUD GMENT IN CIT V GIRISH CHOUDHARY (SUPRA) SUPPORTS HIS CASE THAT A F IGURE OF 48 WRITTEN ON INCRIMINATING MATERIAL CANNOT BE ASSUMED TO BE R S.48 LAKH WITHOUT CORROBORATIVE MATERIAL. FURTHER RELIANCE PLACED ON OTHER JUDICIAL CITATIONS : NIRMAL FASHIONS; SATYAPAL WASSAN; BANSAL STRIPS; PRSANT AHLUWALIA; D .K. GUPTA; DR. SURENDERANATH REDDY (ALL SUPRA) SUPPORT THE PROPOSI TIONS PUT FORWARD BY THE ASSESSE IN THIS BEHALF. 5.6 BESIDES IT EMERGES THAT DUE TO HAPHAZARD, REPET ITIVE AND UNSPECIFIC NATURE OF JOTTINGS, ADDITIONS HAVE NOT BEEN MADE AS RELATABLE TO PARTICULAR YEARS BASED ON NEXUS OR EVIDENCE TO THAT ASSESSMENT YEAR. CONSEQUENTLY THE RATIO OF JUDGMENTS IN THE CASES OF POOJA BHATT; AMARJEET SINGH BAXI (HUF); KHAJAN SINGH & BROS. (2008) 304 ITR ; S.P. GOYAL (MUMBAI (TM) (ALL SUPRA) IS ALSO APPLICABLE TO THIS CASE: LD. CIT (A) CLAIMS TO HAVE RELIED UPON THE TABULAT ION SHEETS ALLEGEDLY GENERATED DURING THE COURSE OF THE ASSESS MENT PROCEEDINGS. HONBLE SUPREME COURT IN THE CASE OF A NDAMAN TIMBER INDUSTRIES V CCE (2015) 281 CTR (SC) 241 HAS HELD THAT ADDITIONS BASED ON ANY MATERIAL WITHOUT CONFRONTING TO ASSESSEE CANNOT BE SUSTAINED. CONSEQUENTLY THE ALLEGED TABUL ATION SHEETS ITA NOS. 872 TO 875/JP/2013-ASSESSEES APPEAL ITA NOS. 899 TO 901/JP/2013- DEPTTS APPEAL SHRI BADRI NARAIN SODANI VS. DCIT AYS : 2007-08 TO 2010-11 30 CANNOT BE A VALID BASIS AND MATERIAL FOR SUSTAINING SUCH ESTIMATE OF UNDISCLOSED INCOME. 5.7 THERE ARE SOME VARIATIONS IN ASSESSEES VERSION S DURING THE COURSE OF ASSESSMENT PROCEEDINGS. HAVING SAID THAT IT CANNOT BE LOST SIGHT OF, THAT BOTH LD. AO AND LD. CIT(A) ALSO WERE INCONSISTENT I N THEIR APPROACH AND WORKING OF ESTIMATE. IN THESE CIRCUMSTANCES THE SEA RCH STATEMENT OF THE ASSESSE WHICH IS A FIRST BLUSH ACCOUNT OF ASSESSEE S AFFAIRS AND IMPLIEDLY ENDORSED BY SEARCH PARTY ALSO, BECOMES MORE RELIABL E AND PREFERABLE ON PREPONDERANCE OF PROBABILITIES, SURROUNDING CIRCUMS TANCES AND HUMAN CONDUCT. THIS APPROACH TO RESOLVE INCOME TAX ISSUES HAS BEEN ENDORSED BY HONBLE SUPREME COURT IN THE CASE OF SUMATI DAYAL 2 41 ITR 801. IT IS NOTEWORTHY THAT ASSESSEES VERSION OF SEARCH ASSESS MENT ABOUT CASH AND JEWELRY FOUND DURING SEARCH AND STATEMENT ABOUT FDR AND MUTUAL FUND INVESTMENT WAS ALSO FOUND TO BE CORRECT. THUS IT CA NNOT BE HELD THAT SEARCH STATEMENT AND THE DISCLOSURE OF ADDITIONAL INCOME H AVE NO EVIDENTIARY VALUE. WHEN THERE ARE CONFLICTING OPINIONS ABOUT ES TIMATE OF INCOME, ONE WHICH IS SPELT OUT IN THE FIRST BLUSH WILL CARRY AP PRECIABLE FORCE MORE SO WHEN OTHER ESTIMATES HAVE SELF CONTRADICTORY OBSERVATION S. 5.8 IN VIEW OF THE FACT THAT LD. CIT(A) INITIALLY O BSERVED THAT AOS ADDITIONS ARE NONSPECIFIC AND NOT BASED ON PROPER CONSIDERATIONS, WHICH IS ACCEPTED BY LD. AO IN REMAND PROCEEDINGS, THE ESTIMATE OF LD. C IT(A) CANNOT BE HELD TO BE JUST AND REASONABLE. THE ESTIMATE OF LD. CIT(A) SUFFERS FROM THE INFIRMITIES AS IT IS MADE WITH COMPLETE IGNORANCE ABOUT NATURE OF ASSESSEES UNDISCLOSED FINANCING BUSINESS BEING BASED ON 100 DAILY INSTILMENTS REPAYMENTS BASIS; NO COGENT REASONS HAVE BEEN GIVEN AS TO HOW THE ITA NOS. 872 TO 875/JP/2013-ASSESSEES APPEAL ITA NOS. 899 TO 901/JP/2013- DEPTTS APPEAL SHRI BADRI NARAIN SODANI VS. DCIT AYS : 2007-08 TO 2010-11 31 HAPHAZARD AND UNSPECIFIC INCRIMINATING MATERIAL BEC AME REGULAR BOOKS DESPITE AOS ACCEPTANCE. SIMILARLY IGNORING THE SEA RCH ASSESSMENT AND PREFERRING ONE OF THE WAVERING VERSIONS SUITABLE TO REVENUE CANNOT BE CALLED RELIANCE ON PROPER ESTIMATE. 5.9 IN THESE FACTS AND CIRCUMSTANCES IT IS DESIRABL E THAT THAT THE ESTIMATE BASED ON SURRENDER OF ADDITIONAL INCOME AS MADE BY ASSESSEE BY WAY OF A SWORN STATEMENT DURING THE COURSE OF SEARCH IS MORE PREFERABLE THAN THE ESTIMATES MADE BY LD. AO AND LD. CIT(A). BOTH THE E STIMATES MADE BY AUTHORITIES BELOW ARE ARRIVED AT IN UNJUST AND UNTE NABLE MANNER, WHICH CANNOT BE UPHELD IN VIEW OF THE OBSERVATIONS MENTIO NED ABOVE. 5.10 IN VIEW OF THE FACTS, CIRCUMSTANCES, RIVAL CONTENTION AND RESPECTFULLY FOLLOWING THE JUDICIAL PRECEDENTS CITED ABOVE AND T HAT OF HONBLE SUPREME COURT ANDAMANS INDUSTRIES AND SUMATI DAYAL (SUPRA) WE ACCEPT THE ASSESSEES DISCLOSURE TO BE MORE RELIABLE THAN THE ESTIMATE MADE BY AO OR LD. CIT(A). IN VIEW THEREOF WE DELETE ALL THE ADDIT IONS MADE BY THE AUTHORITIES BELOW. 6. IN THE RESULT APPEALS FILED BY THE ASSESSE ARE A LLOWED AND REVENUES APPEALS ARE DISMISSED. ORDER PRONOUNCED IN THE COURT ON 26 TH JULY, 2016 AT JAIPUR. SD/- SD/- SD/- SD/- (VIKRAM SINGH YADAV) ACCOUNTANT MEMBER (R.P. TOLANI) JUDICIAL MEMBER JAIPUR DATED 26 /07/2016 *BIJU T. ITA NOS. 872 TO 875/JP/2013-ASSESSEES APPEAL ITA NOS. 899 TO 901/JP/2013- DEPTTS APPEAL SHRI BADRI NARAIN SODANI VS. DCIT AYS : 2007-08 TO 2010-11 32 !' !' !' !' # # # # $!# $!# $!# $!# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. % & / CONCERNED CIT 4. & ( ) / THE CIT(A) 5. #'( , , )* % / DR, ITAT, JAIPUR 6. (+ , / GUARD FILE. !' !' !' !' / BY ORDER, TRUE COPY ) ) ) ) - - - - ( ASSTT.REGISTRAR) , / ITAT, JAIPUR 1. DATE OF DICTATION- .. 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER OTHER MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR .P.S./P.S. - .. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT .. .. 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK . 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER.. 8. DATE OF DESPATCH OF THE ORDER