The Incomet-ax Officer, Srinagar V. M/s. KBK Associates, Srinagar (KMR)

ITA 9/ASR/2014

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 2439 (ITAT-AMRITSAR)
• Duration Of Justice: 2 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 01-12-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 06-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K V K SINGH
• Keywords: Unexplained investment; Business expenditure; Loose papers; Retraction
• Section: 143(3); 133A; 69; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR (JAMMU CAMP; JAMMU ) BEFORE SH. A.D.JAIN, HONBLE JUDICIAL MEMBER AND SH. T.S.KAPOOR, HONBLE ACCOUNTANT MEMBER I.T.A. NOS. 09 & 47(ASR)/2014 ASSESSMENT YEARS: 2009-10 & 2007-08 THE INCOME TAX OFFICER, WARD-3(1), SRINAGAR. VS. M/S KBK ASSOCIATES, AHANGAR HOUSE, OLD GAGRIBAL, DALGATE, SRINAGAR- KASHMIR. PAN: (APPELLANT) (RESPONDENT) APPELLANT BY: SH. K.V.K. SINGH (DR.) RESPONDENT BY: SH. JOGINDER SINGH (C A.) DATE OF HEARING: 01.12.2015 DATE OF PRONOUNCEM ENT: .01.2016 ORDER PER T.S.KAPOOR (A.M): THESE ARE TWO APPEALS FILED BY THE REVENUE AGA INST THE SEPARATE ORDERS OF LEARNED CIT(A), JAMMU, DATED 29.11.2013 AND 09. 10.2013 RESPECTIVELY. 2. THE GROUNDS OF APPEAL TAKEN BY REVENUE IN THE TWO APPEALS ARE REPRODUCED BELOW. IN ITA NO.09(ASR)/2014 FOR ASST. YEAR 2009-10. (1) ON THE FACTS AND CIRCUMSTANCES, WHETHER THE LD . CIT(A) WAS RIGHT IN ALLOWING RELIEF ON ACCOUNT OF ASSESSING THE SURREND ERED INCOME UNDER THE HEAD LONG TERM CAPITAL GAIN. 2. ITA NO.09 & 47 (ASR)/2014 ASST. YEA R 2009-10 & 2007-08 (2) ON THE FACTS AND CIRCUMSTANCES, WHETHER THE LD. CIT(A) WAS RIGHT IN ALLOWING THE RELIEF ON ACCOUNT OF UN-EXPLAINED INVE STMENT FOR PURCHASE OF LAND UNDER SECTION 69 OF THE INCOME TAX, ACT,1961. (3) ON THE FACTS AND CIRCUMSTANCES, WHETHER THE LD. CIT(A) WAS RIGHT IN ALLOWING THE RELIEF ON ACCOUNT OF PROFITS FROM REAL ESTATE BUSINESS. IN ITA NO.47(ASR)/2014 FOR ASST. YEAR.2007-08. (1) ON THE FACTS AND CIRCUMSTANCES, WHETHER THE LD . COMMISSIONER OF INCOME TAX (APPEALS) WAS RIGHT IN ALLOWING RELIEF O N ACCOUNT OF PROFITS FROM REAL ESTATE BUSINESS. (2) ON THE FACTS AND CIRCUMSTANCES, WHETHER THE LD. COMMISSIONER OF INCOME TAX (APPEALS) WAS RIGHT IN ALLOWING THE RELI EF ON ACCOUNT OF UN- EXPLAINED INVESTMENT FOR PURCHASED OF LAND U/S 69. (3) ON THE FACTS AND CIRCUMSTANCES, WHETHER THE LD. COMMISSIONER OF INCOME TAX (APPEALS) WAS RIGHT IN ALLOWING THE RELI EF ON ACCOUNT OF ADVANCE PAID BY TREATING THE SAME AS UN-EXPLAINED I NVESTMENT UNDER SECTION 69 OF THE INCOME TAX ACT,1961. (4) ON THE FACTS AND CIRCUMSTANCES WHETHER, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) WAS RIGHT IN ALLOWING THE RELI EF ON ACCOUNT OF ADDITIONS MADE ON THE BASIS OF ESTIMATE WITHOUT COR ROBORATING ANY EVIDENCE AS UN-EXPLAINED INVESTMENTS AND PURELY ON PRESUMPTIONS, SURMISES AND CONJECTURES. 3. THESE APPEALS WERE HEARD TOGETHER AND THEREF ORE, FOR THE SAKE OF CONVENIENCE A COMMON AND CONSOLIDATED ORDER IS BEIN G PASSED. 4. THE BRIEF FACTS OF THE CASES AS NOTED IN ASSESSM ENT ORDER FOR ASST. YEAR 2007-08 ARE THAT ASSESSEE IS A PARTNERSHIP FIRM AND IS DEALING IN REAL ESTATE BUSINESS. A SURVEY U/S 133A OF THE INCOME TAX ACT W AS CONDUCTED AT THE BUSINESS PREMISES OF THE ASSESSEE ON 3.3.2009, FROM WHERE CERTAIN INCRIMINATING DOCUMENTS WERE SEIZED. THE ASSESSEE H AD NOT FILED ITS RETURN OF 3. ITA NO.09 & 47 (ASR)/2014 ASST. YEA R 2009-10 & 2007-08 INCOME. DESPITE VARIOUS NOTICES ISSUED BY ASSESSING OFFICER, THE ASSESSEE DID NOT PRESENT ITSELF AND THEREFORE, ASSESSMENT PROCEE DINGS WERE COMPLETED U/S 144 IN ASST. YEAR 2007-08, HOWEVER, THE ASSESSMENT FOR ASST. YEAR 2009-10 WAS COMPLETED U/S 143(3) OF THE ACT. DURING THE ASS T. YEAR 2007-08, THE ASSESSING OFFICER MADE THREE ADDITIONS AS DETAILED BELOW. (I) RS.13,49,954/- AS BEING PROFIT ON SALE OF 56 KA NALS OF LAND TO MS. J & K CO-OPERATIVE HOUSING CORPORATION LTD. (II) RS. 9,00,00,000/- ON ACCOUNT OF ALLEGED PURCHA SE OF 50 KANALS OF LAND FOR DEVELOPMENT OF ECO TOURIST VILLAGE (III) RS.82,00,000/- ON ACCOUNT OF ALLEGED ADVANCE MADE BY ASSESSEE TO ONE SH. MANZOOR AHMAD WHICH THE ASSESSEE WAS NOT ABLE TO EXPLAIN. IN ASST. YEAR 2009-10, THE ASSESSING OFFICER MADE F OUR ADDITIONS AS DETAILED BELOW. (I) RS.2,00,00,000/-, ON ACCOUNT OF ALLEGED CAPITAL GAI N WHICH THE ASSESSEE HAD OFFERED AS ADDITIONAL INCOME UNDER THE HEAD CAPITAL GAINS AND WHICH WAS NOT INCLUDED IN THE RETURN OF I NCOME. (II) RS.9,00,00,000/- ON ACCOUNT OF ALLEGED PURCHASED OF 50 KANALS OF LAND FOR DEVELOPMENT OF ECO TOURISTS VILLAGE. (III) RS.3,68,54,000/- ON ACCOUNT OF ALLEGED PROFIT ON TH E SALE OF LAND. (IV) RS.90,84,7000/- ON ACCOUNT OF UNEXPLAINED SOURCES F OR INVESTMENT IN PURCHASE OF LAND. 5. AGGRIEVED WITH THE ORDERS OF ASSESSING OF FICER THE ASSESSEE FILED APPEALS BEFORE LEARNED CIT(A) AND FILED VARIOUS SUBMISSIONS . THE LEARNED CIT(A) AFTER 4. ITA NO.09 & 47 (ASR)/2014 ASST. YEA R 2009-10 & 2007-08 CONSIDERING THE SUBMISSIONS OF ASSESSEE AND AFTER O BTAINING REMAND REPORT FROM ASSESSING OFFICER DELETED ALL THE ADDITIONS BY RECORDING THE FOLLOWING FINDINGS IN ASST. YEAR 2007-08 AND 2009-10. IN ASST. YEAR 2007-08 6. DETERMINATION 6.1. GROUND OF APPEAL NO 1 IS GENERAL IN NATURE , REQUIRES NO ADJUDICATION AND ACCORDINGLY DISMISSED. 6.2. GROUND OF APPEAL NO 2 RELATES TO ADDI TION OF RS 13,49,954/- ON ACCOUNT OF PROFIT/ COMMISSION ON TRANSFER OF 56 KANALS LAND TO J & K C OOPERATIVE HOUSING CORPORATION. THE AO HAS CONTENDED THAT THE LAND OF 56 KANALS WHICH WAS IN T HE NAME OF SH SHEIKH GULAM QADIR WAS SOLD BY HIM TO FIRDOUS DEVELOPER WHICH IN TURN SOLD THE SAI D LAND TO KBK ASSOCIATES FOR RS 7.21 CRORES. AS PER THE AO , THE SAID LAND WAS THEREAFTER SOLD TO JK HO USING COOPERATIVE SOCIETY AT RS 7,35,25,514/- @ RS 13,00,000/ KANAL THEREBY EARNING A PROFIT OF RS 13, 49,954/- BY THE APPELLANT FIRM. THE APPELLANT ARGUED THAT DURING THE COURSE OF ASSE SSMENT IT WAS BROUGHT ON RECORD THAT THE APPELLANT FIRM THROUGH ITS PARTNERS ENTERED INTO AN AGREEMENT WITH THE SOCIETY FOR ARRANGEMENT OF LAND APPROXIMATELY 800 KANALS FROM THE RIGHTFUL AND LAWFUL OWNERS. IT IS CLEAR FROM THE AGREEMENT THAT THE APPELLANT SHALL ARRANGE THE LAND FOR SOCIE TY FROM LAWFUL OWNERS AND IN TURN SHALL CHARGE COMMISSION FROM THE OWNERS OF THE LAND ON THE COMPL ETION OF SALE TRANSACTIONS. THE SOCIETY HAS PAID AN ADVANCE OF RS 5,09,00,000/- TO THE APPELLANT WHI CH HAVE BEEN DULY REFLECTED IN THE REGULAR BOOKS OF ACCOUNTS. THE APPELLANT BEING THE MEDIATOR FOR A RRANGEMENT OF LAND GOT THREE LEASE DEEDS EXECUTED IN FAVOUR OF THE SOCIETY FOR LAND MEASURIN G 56 KANALS 10 MARLA'S @RS13,00,000/- PER KANALS FROM THE OWNERS OF LAND. THE APPELLANT FIRM HAS NOT MADE ANY TRANSACTIONS FOR SALE/PURCHASE OF PROPERTY IN THE YEAR UNDER CONSIDERATION AND THE LE ASE DEEDS WERE EXECUTED BY THE OWNERS OF LAND AND NOT BY THE APPELLANT FIRM. THE APPELLANT BEING THE ARRANGER OF LAND WAS TO GET COMMISSION ONLY ON THE COMPLETION OF THE SALE TRANSACTIONS. ADVANCE S WHATEVER RECEIVED BY THE APPELLANT FIRM FROM THE SOCIETY WERE FURTHER GIVEN TO THE M/S FIRDOUS D EVELOPERS ON BEHALF OF SHEIKH GULAM QADHIR WHO WAS THE OWNER/POWER OF ATTORNEY HOLDER OF THE LAND. IT IS TO SUBMIT THAT NO COMMISSION/ PROFIT WAS RECEIVED BY THE APPELLANT IN THE YEAR UNDER CONSIDE RATION DUE TO THE FACT THAT THE PHYSICAL POSSESSION 5. ITA NO.09 & 47 (ASR)/2014 ASST. YEA R 2009-10 & 2007-08 OF THE LAND WAS NOT HANDED OVER TO THE SOCIETY DUE TO SOME DISPUTE . THE APPELLANT ALSO SUBMITTED DOCUMENTS IN SUPPORT OF ITS CLAIM. THE APPELLANT HA S FURTHER SUBMITTED THAT THE LAND IN QUESTION IN THE REVENUE RECORDS ARE STILL IN THE NAME OF THE OW NERS OF LAND AND EVEN POSSESSION, MUTATION AND JAMABANDIS ARE ALSO IN THE NAME OF THE ORIGINAL OWN ERS. THE CONDITIONS AS STIPULATED BY SECTION 2(47) OF THE I.T. ACT 1961, HAVE NOT BEEN SATISFIED. THER EFORE, TRANSACTIONS FOR SALE OF PROPERTY HAVE NOT BEEN COMPLETED AND CHARGING OF INCOME TO TAX WHICH HAVE NOT BEEN EARNED IS VOID. THE AO CONTENDED THAT IN THE APPELLANT'S BOOKS LAND HAS BE EN SHOWN TO HAVE PURCHASED FROM M/S FIRDOUS DEVELOPERS & CONSTRUCTION AND SOLD TO M/S J&K HOUSI NG CORPORATION IS TOTALLY FALSE AND INCORRECT AND PURELY BASED ON SURMISES AND PRESUMPTIONS. THE AO IN HIS REMAND REPORT DATED 20/02/2013 HAS NO T COMMENTED ON THE SUBMISSION OF THE APPELLANT AND PREFERRED TO RELY ON THE ASSESSMENT O RDER. DURING THE COURSE OF APPELLATE PROCEEDINGS CERTAIN INFORMATIONS WERE CALLED FOR BY ME FROM THE MANAGING DIRECTOR, J & K HOUSING COOPERATION LTD IN ORDER TO VERIFY THE CONTENTION OF THE APPELLANT. THE INFORMATION SUPPLIED BY THE SOCIETY IN RESPONSE TO THE ENQUIRY LETTER IS AS UNDER: THIS IS IN REFERENCE TO THE INFORMATION CALLED FOR BY YOUR OFF ICE THAT THE FOLLOWING DETAILS ARE PROVIDED HEREUNDER: I. AN AGREEMENT WAS MADE BY OUR SOCIETY WITH KBK A SSOCIATES, SRINAGAR ON 22 ND FEBRUARY 2006 FOR ARRANGEMENT OF 800 KANALS OF LAND UNDER KH ASARA NO 2930,3142,3152,3158 ETC CONTIGUOUS TO EACH OTHER FORMING ONE PIECE OF LAND SITUATED AT BRIEN NISHAT, SRINAGAR. HOWEVER , NO LAND COULD BE ARRANGED BY KBK ASSOCIAT ES, SRINAGAR IN THE ACCOUNTING YEAR 2006-07 EXCEPT 56 KANAL 9 MARLAS & 420 SQFT OF LAND AT BRIEN ,NISHAT, SRINAGAR. LEASE DEEDS WERE ENTERED INTO BY OUR SOCIETY IN RESPECT OF THIS 56 KANAL 9 MARLAS & 420 SQFT OF LAND BUT NO POSSESSION OF SUCH LAND WAS HANDED OVER TO THE S OCIETY OF THIS 56 KANAL 9 MARLAS & 420 SQFT. THE DETAILS OF 56 KANAL 9 MARLAS & 420 SQFT O F LAND FOR WHICH LEASE DEED WAS ENTERED ARE ANNEXED HEREWITH AS ANNEXURE A. THE DETAILS OF ADVANCES PAID AGAINST THE AGREEMENT DATED22/02/2006 FOR THE ACCOUNTING YEAR 2006-07 IS ALSO ANNEXED HEREWITH AS ANNEXURE-B. NO OTHER LAND WAS ARRANGED THE KBK ASSOCIATES, SRIN AGAR IN THE ACCOUNTING YEAR 2006-07. II. NO MUTATION OF LAND TOOK PLACE IN THE REVENUE RECORDS BY REVENUE AUTHORITIES FOR LAND ARRANGED/SOLD BY KBK ASSOCIATES, SRINAGAR WAS MADE DURING THE ACCOUNTING YEAR 2006-07. THE REGISTRY OF LEASE DEEDS OF LAND AS MENTIONED IN PARA ABOVE WERE MADE DURING THE 6. ITA NO.09 & 47 (ASR)/2014 ASST. YEA R 2009-10 & 2007-08 ACCOUNTING YEAR 2006-07. NO OTHER MUTATION OR REGIS TRY OF ANY LAND WAS MADE WITH OR THROUGH KBK ASSOCIATES OR ITS PARTNERS. III NO POSSESSION OF AND PROCURED FROM OR THRO UGH KBK ASSOCIATES, SRINAGAR WAS OBTAINED IN THE YEAR UNDER CONSIDERATION. IV. NO COMMISSION OR BROKERAGE WAS PAID BY THE SOCIETY TO KBK ASSOCIATES, SRINAGAR OR ITS PARTNERS IN THE YEAR UNDER CONSIDERATION. IT IS OBSERVED THAT THE APPELLANT FIRM ENTERED INTO AN ARRANGEMENT WITH JK HOUSING COOPERATIVE SOCIETY FOR ARRANGING 800 KANALS OF LAND IN A PARTI CULAR AREA FOR A PROJECT, HOWEVER, THE APPELLANT FIRM COULD NOT ARRANGE ANY LAND EXCEPT THE 56 KANAL S OF LAND OF SH SHEIKH GULAM QADIR, ONE OF THE PARTNERS OF THE APPELLANT FIRM. EVEN THE POSSESSION OF 56 KANALS OF LAND WAS NOT GIVEN TO THE SOCIETY AND THE LAND REMAINED IN THE POSSESSION OF THE SH. SHEIKH GULAM QADIR AND SUCH 56 KANALS OF LAND IS STILL IN DISPUTE AND IS IN THE POSSESSION OF SH. SH EIKH GULAM QADIR. THE CONTENTION OF THE APPELLANT I S CORRECT THAT WHEN NO LAND WAS ARRANGED FOR THE SOCI ETY, THE QUESTION OF COMMISSION DOES NOT ARISE. ALTHOUGH, THE AMOUNT OF SALE WAS SHOWN BY THE FIRDO US DEVELOPER AT RS 7.21 CRORES, BUT ONLY RS 5.09 CRORES WAS RECEIVED BY THE APPELLANT AS ADVANCE FOR ARRANGEMENT OF LANDS OUT OF WHICH RS 4.34 CRORES WAS ADVANCED TO THE FIRDOUS DEVELOPERS ON BE HALF OF SH. SHEIKH GULAM QADIR. SINCE NEITHER THE POSSESSION WAS TRANSFERRED, NOR THE SALE CONSID ERATION WAS PAID IN FULL, IT IS UNREALISTIC THAT TH E APPELLANT WOULD HAVE RECEIVED COMMISSION ON SUCH TR ANSACTION. THE SOCIETY HAS CONFIRMED THAT NO COMMISSION IS PAID TO THE APPELLANT. THE ASSESSMENT OF THE CASE OF SH SHEIKH GHULAM QADIR FOR THE YEAR UNDER CONSIDERATION HAS BEEN COMPLETED UNDER 1 43(3) AND IF SHEIKH GHULAM QADIR HAD PAID ANY COMMISSION TO THE APPELLANT, IT WOULD HAVE BEEN ALL OWED AS EXPENSES IN HIS BOOKS OF ACCOUNT AND HIS ASSESMENT. THERE IS NO AUTHENTIC DOCUMENT TO SUGGES T THAT THE APPELLANT HAS RECEIVED COMMISSION. THE APPELLANT BEING A MERE MEDIATOR CANNOT BE CHARG ED FOR PROFIT OF THE TRANSACTION, AT THE BEST THE MEDIATOR CAN BE CHARGED FOR COMMISSION AND FROM THE PERUSAL OF RECORDS, IT IS CLEAR THAT NO COMMISSION HAS BEEN RECEIVED BY THE APPELLANT IN TH E YEAR UNDER CONSIDERATION AS ALSO CONFIRMED BY THE SOCIETY. THEREFORE, IN MY OPINION, THE PLEA OF THE APPELLANT FIRM IS GENUINE AND THE ADDITION OF R S 13,49,954/- IS DELETED. THIS GROUND OF APPEAL OF TH E APPELLANT IS ALLOWED. 7. ITA NO.09 & 47 (ASR)/2014 ASST. YEA R 2009-10 & 2007-08 6.3 GROUND OF APPEAL NO 3 & 4 RELATES TO THE PROTECTIVE ADDITION OF RS 9 CRORE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE PURCHASE OF LAND ON T HE BASIS OF A LETTER ADDRESSED TO BANK IMPOUNDED DURING THE COURSE OF SURVEY. THE SUBSTANTIVE ADDITION WAS MADE IN THE ASSESSMENT YEAR 2009-10.1 HAVE ALREADY CONSIDERED THE MATTER IN THE APPELLATE PROCEEDINGS IN THE CASE OF APPELLANT FOR THE ASSESSMENT YEAR 2009-10. AS PER MY DIRECTIONS, THE ENQUIRY WAS CONDUCTED BY THE AO AND IT WAS CONFIRMED BY THE BRANCH MANAGER OF JAMMU AND KASHMI R BANK THAT NO SUCH UNDATED LETTER WAS EVER POSTED/ SUBMITTED TO THE BANK. FURTHER THE REV ENUE AUTHORITIES HAVE ALSO CONFIRMED THAT THE APPELLANT HAS NOT PURCHASED OR SOLD ANY LAND DURING THE ASSESSMENT YEAR 2007-08 & 200-10 AND THAT THERE IS NO LAND IN THE NAME OF APPELLANT FIRM . ACCORDINGLY, THE SUBSTANTIVE ADDITION OF RS 9 CRORE WAS DELETED IN THE ASSESSMENT YEAR 2009-10 AN D THE AO IS DIRECTED TO VACATE THE PROTECTIVE ADDITION IN THE YEAR UNDER CONSIDERATION. THE AO IN HIS REMAND REPORT DATED 20.02.2013 WAS SILENT ABOUT THE SUBMISSION OF THE APPELLANT IS ALLOWED AN D A RELIEF OF RS.9 CORE IS ALLOWED. 6.4. GROUND OF APPEAL NO 5 & 6 RELATES TO ADDITION OF RS 82,00,000/- MADE U/S 69 ON ACCOUNT O F UNEXPLAINED INVESTMENT. A TRIAL BALANCE AS ON 31.0 3.2007 AND A LEDGER ACCOUNT SHOWING ADVANCE TO FEROZ AHMED WAS IMPOUNDED DURING THE COURSE OF SURV EY PROCEEDINGS AND THE AO HAS MADE THESE DOCUMENTS AS PART OF ASSESSMENT ORDER MARKED AS ANN EXURE B1 AND B2. THE AO HAS OBSERVED THAT THE AMOUNT SHOWN IN THE TRAIL BALANCE AGAINST FEROZ AHMED WAS ONLY RS 11,000/- WHERE AS THE LEDGER ACCOUNT OF ADVANCE AMOUNT (FEROZ) SHOWS AN A DVANCE OF RS. 82,50,000/- AND ACCORDINGLY AN ADDITION RS 82 LAKHS WAS MADE TO THE INCOME OF THE APPELLANT. THE APPELLANT HAS ARGUED THAT THE TRIAL BALANCE WAS PREPARED ON 31.03.2007 AS MENTION ED ON THE TOP OF THE TRIAL BALANCE AND THE FIGURE OF RS 82 LAKHS SHOWN IN THE LEDGER OF FEROZ AHMAD ( ADVANCE) IS ON THE DATE OF 26.10.2007. THE FIGURE OF ADVANCE ON 31.03.2007 ON THE SAID LEDGER IS ONLY RS 65,50,000/-. FURTHER TRIAL BALANCE AS 31.03.2007 ANNEXED AS PART OF ASSESSMENT ORDER CLEA RLY SHOWS RS 67,50,000/- PAID AS ADVANCES JAMMU, OUT OF THESE ADVANCES RS 65,50,000/- WERE GI VEN TO FEROZ AHMAD TILL 31.03.2007. THE APPELLANT HAS ALSO ARGUED THAT IN THE YEAR UNDER CO NSIDERATION THE APPELLANT RECEIVED AN ADVANCE OF RS 5.09 CRORE FROM THE J & K HOUSING COOPERATIVE SO CIETY LTD, OUT OF THE SAID ADVANCE THE APPELLANT HAS MADE ADVANCES TO FIRDOUS DEVELOPER RS 4.34 CROR E, RS 67.50 AS ADVANCE , JAMMU & THE REST OF THE AMOUNT SPENT TOWARDS MINOR BUSINESS EXPENDITURE . ON THE PERUSAL OF THE IMPOUNDED DOCUMENTS, IT IS OBSERVED THAT THE LEDGER ACCOUNT R EFERRED BY THE AO CONTAINS THE NOMENCLATURE 'ADVANCE AMOUNT (FEROZ)' AND THE BALANCE AS ON 31.0 3.2007 IS RS 65.50 LAKHS AND NOT 82.00 LAKHS AND AN AMOUNT OF RS 67.50 IS ALSO REFLECTED IN THE TRAIL BALANCE AGAINST 'ADVANCE, JAMMU'. THE 8. ITA NO.09 & 47 (ASR)/2014 ASST. YEA R 2009-10 & 2007-08 IMPOUNDED DOCUMENTS REFERRED BY THE AO ITSELF CLARI FIES THAT THE ADVANCES MADE TO FEROZ AMOUNTING TO 65.50 LAKHS AS ON 31.03.2007 ARE OUT OF REGULAR BOOKS OF ACCOUNT MAINTAINED BY THE APPELLANT AND COULD BE IDENTIFIED FROM THE TRIAL BALANCE ANNEXED AS B1 WITH THE ASSESSMENT ORDER BY APPLICATION OF MIND. THE AO IN HIS REMAND REPORT DATED 20/02/2013 WAS SILENT ABOUT THE SUBMISSION OF THE APPELLANT AND PREFERRED TO RELY OF THE ASSESSMENT O RDER. THE ADDITION OF RS 82,00,000/- MADE BY THE AO IS THEREFORE DELETED AND THIS GROUND OF APPEAL O F THE APPELLANT IS ALLOWED. 6.5. GROUND OF APPEAL NO 7 RELATES TO ADDITION OF R S11,26,97,800/- U/S 69 ON ACCOUNT OF UNEXPLAINED INVESTMENTS. DURING THE COURSE OF SURVEY, TWO PAGES WERE IMPOUNDED CONTAINING THE LIST OF LAND, NAME OF OWNERS AND THEIR VALUE. THE AO HAS ADDED TH E VALUE SHOWN IN THE LIST AS THE LAND PURCHASED BY THE APPELLANT FIRM. THE APPELLANT HAS ARGUED THA T THIS IS THE LIST OF LAND WHICH THE APPELLANT FIRM WAS PLANNING TO PURCHASE TO DEVELOP THE ECO TOURISM PROJECT FOR WHICH THE FIRM WAS CREATED. HOWEVER, NO SUCH LAND WAS EVER PURCHASED BY THE APP ELLANT FIRM AS THE ECO TOURISM PROJECT FOR WHICH THE LAND WAS REQUIRED WAS NEVER STARTED. THE PAGES CONTAINING THE LAND DETAILS CONTAIN THE HEADING LAND RECORDS AND NOWHERE ON THE IMPOUNDED DOCUMENTS, IS IT WRITTEN THAT IT IS A PURCHASE STATEMENT OR SUCH LANDS ARE PURCHASED BY THE APPELL ANT. ONCE THE APPELLANT HAS REFUSED THAT IT HAS NOT PURCHASED ANY LAND AND THE IMPOUNDED DOCUMENT N OWHERE SUGGEST THAT IT IS A PURCHASE STATEMENT AND THERE IS NO CORROBORATED DOCUMENT SUG GESTING SUCH TRANSACTION, THE ONUS IS ON THE DEPARTMENT TO PROVE WITH DOCUMENT THAT THE APPELLANT HAS ACTUALLY PURCHASED SUCH LANDS. IT IS OBSERVED THAT THE AO HAD NOT MADE ANY ENQUIRIES NEI THER FROM THE LAND OWNER NOR FROM THE REVENUE AUTHORITIES AND PRESUMED THE LIST OF LAND TO BE THE LIST OF LANDS PURCHASED. DURING THE COURSE OF APPELLATE PROCEEDINGS I DIRECTED THE AO TO ENQUIR E FROM THE REVENUE AUTHORITIES WHETHER THE APPELLANT OR SOLD ANY LAND DURING THE YEAR UNDER CONSIDERATI ON. THE AO, ACCORDINGLY, MADE ENQUIRIES AND THE REVENUE AUTHORITIES CONFIRMED THAT THERE IS NO LAND REGISTERED MUTATED IN THE NAME OF APPELLANT FIRM AND THE APPELLANT FIRM HAS NOT PURCH ASED OR SOLD ANY LAND DURING THE YEAR UNDER CONSIDERATION. IT IS THEREFORE CONCLUDED THAT THE A DDITION OF RS.11,26,97,800/- IS MADE BY THE AO MERELY ON HIS PRESUMPTIONS AND IN FACT NO LAND HAS BEEN PURCHASED BY THE APPELLANT FIRM. THE AO IN HIS REMAND REPORT DATED 20/02/2013 WAS SILENT ABOUT THE SUBMISSION OF THE APPELLANT AND PREFERRED TO RELY OF THE ASSESSMENT ORDER. THIS APPEAL OF THE APPELLANT IS ALLOWED AND A RELIEF OF RS11,26,97,800/- IS ALLOWED TO THE APPELLANT. 6.6. GROUND OF APPEAL NO 8 TO 11 IS GENERAL IN NATU RE AND ACCORDINGLY DISMISSED. 9. ITA NO.09 & 47 (ASR)/2014 ASST. YEA R 2009-10 & 2007-08 IN ASST. YEAR 2009-10 6. DETERMINATION 6.1 GROUND NO.1 RELATES TO ADDITION OF TWO CRORES O N ACCOUNT OF SURRENDER BY ONE OF THE PARTNERS OF THE APPELLANT FIRM. THE AO ON PAGE 9 OF ASSESSMENT ORDER HAS MENTIONED THAT THE APPELLANT HAS SOLD 56 KANALS AND 10 MARLAS OF LAND AT KARAL SANGRI TO M/S JK COOPERATIVE HOUSING CORPORATION LIMITED FORRS.7,35,514/- AND HAS EARNED A CPITAL GAIN OF RS. 2 CRORES. THE PARTNER OF APPELLANT FIRM HAS ALSO SURRENDERED A CAPITAL GAIN OF RS.2 CRORE ON THE SAID LAND. THE APPELLANT, HOWEVER, HAS RETRACTED TH E STATEMENT OF SURRENDER IN THE RETURN OF INCOME AND ARGUED THAT THE LAND IN QUESTI ON BELONGS TO ONE OF THE PARTNER SH. SHEIKH GULAM QADIR AND WAS LEASED OUT BY HIM TO M/S J K COOPERATIVE HOUSING CORPORATION LTD. ON HIS OWN BEHALF AND THE APPELLAN T FIRM HAS NO INTEREST IN SUCH LAND OR SUCH TRANSACTION. THE SALE TRANSACTION OF 5 6 KANAL AND 10 MARLA LAND AT KARAL SANGRI FOR RS.7,35,25,514/- AND CONSEQUENTIAL CAPITAL GAIN OF RS. 2 CRORE RELATES TO ASSESSMENT YEAR 2007-08 AND HAS BEEN ASS ESSED AS CAPITAL GAIN OF SH SHEIKH GULAM QADIR IN HIS ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2007-08. THE AO IN HIS REMAND REPORT IS SILENT ON THE SUBMIS SION AND ARGUMENTS OF THE APPELLANT. THE AO SUBMITTED THAT THE LAND IN QUESTI ON BELONGS TO APPELLANT. THE AO HAS ADMITTED THAT THE TRANSACTION OF SALES RELATES TO FINANCIAL YEAR 2005-06 TO 2007- 08 BUT SINCE THE AMOUNT OF SURRENDERED WAS NO BIFUR CATED BY THE APPELLANT, THEREFORE, THE AMOUNT WAS TAXED IN ASSESSMENT YEAR 2009-10. DURING THE COURSE OF APPELLANT PROCEEDINGS, THE AO WAS DIRECTED TO GET CONFIRMATION FROM THE REVENUE AUTHORITIES AS TO WHETHER ANY LAND WAS PURCHASED OR SOLD BY THE APPELLANT FIRM DURING THE YEARS UNDER CONSIDERATION . THE AO CONDUCTED THE SAID ENQUIRY AND REPORT THAT NO IMMOVABLE PROPERTY IS E VERY PURCHASED OR SOLD BY THE APPELLATE FIRM AS CONFIRMED BY THE REVENUE AUTHORIT IES. I HAVE GONE THROUGH THE SUBMISSION OF THE APPELLANT , ASSESSMENT ORDER, REMAND REPORT AND ENQUIRY REPORT AND MAKE THE FOLLOWING OB SERVATIONS. FIRSTLY, THE AO HAS MADE ADDITIONS MERELY ON THE BA SIS OF STATEMENT MADE BY ONE OF THE PARTNER DURING THE COURSE OF SURVEY PROCEEDINGS WHICH WAS LATER ON RETRACTED BY THE APPELLANT IN THE RETURN OF INCOME FILED. THERE IS NO CORROBORATIVE EVIDENCE ON RECORD TO JUSTIFY THE ADDITION. 10. ITA NO.0 9 & 47 (ASR)/2014 ASST. YEA R 2009-10 & 2007-08 SECONDLY, THE STATEMENT RECORDED DURING SURVEY PROC EEDINGS ON THE BASIS OF WHICH THE AO HAS MADE THE ADDITION MENTIONS THAT SURRENDE R RELATES TO FINANCIAL YEAR 2005-06 TO 2007-08 AND NOT TO THE ASSESSMENT YEAR U NDER CONSIDERATION. THE ASSESSMENT FOR THE ASSESSMENT YEARS 2006-07 & 2007- 08 IN THE CASE OF APPELLANT FIRM HAS ALREADY BEEN MADE U/S 143(3)/144 OF THE IN COME TAX ACT 1961 AND ON THE PERUSAL OF THE ASSESSMENT ORDER, IT IS OBSERVED THA T NO SUCH TRANSACTIONS HAS BEEN FOUND BY THE AO WHILE SCRUTINIZING THE BOOKS OF ACC OUNTS AND RECORDS OF THE ASSESSEE FIRM. THIRDLY, ON PERUSAL OF ASSESSMENT ORDER PASSED IN T HE CASE OF SH. SHEIKH GULAM QUADIT AND CERTIFICATE OF REVENUE AUTHORITIES, IT I S CONCLUDED THAT THE LAND IN QUESTION DOES NOT BELONG TO THE APPELLANT FIRM RATHER THE LA ND BELONGS TO ONE OF THE PARTNERS SH SHIKH GHULAM QUADIR OF THE APPELLANT FIRN AND TH E CAPITA GAINS ON ACCOUNT OF SUCH SALE HAS ALREADY BEEN ASSESSED IN THE HANDS OF THE SAID PARTNER IN THE ASSESSMENT YEAR 2007-08 AND THEREFORE, THE SAME INCOME CANNOT BE TAXED TWICE. FOURTHLY, THE AO HAS NOT BROUGHT ON RECORD ANY MATE RIAL CORROBORATING WITH THE ADDITION MADE ON ACCOUNT OF SALE OF LAND. MERELY ON THE BASIS OF STATEMENT HAVING BEEN RECORDED, NO ADDITION CAN BE MADE UNLESS THE S AME CAN BE CORROBORATED BY ANY MATERIAL FOUND DURING THE COURSE OF SURVEY OR SUBSE QUENTLY BROUGHT ON RECORD BY THE AO WHILE FRAMING THE ASSESSMENT. HONBLE SUPREME CO URT HAS DISMISSED THE SPECIAL LEAVE PETITION VICE ITS ORDER DATED 20/09/2012 AGAI NST THE MADRAS HIGH COURT JUDGMENT IN THE CASE OF CIT VS. S KADER KHAN (2008) 300 ITR 157 (MAD.). IN WHICH THE HONBLE HIGH COURT HAD HELD THAT AN ITO WAS NOT EMPOWERED U/S 133A TO EXAMINE ANY PERSON ON OATH AND THEREFORE STATEMENT RECORDED IN A SURVEY U/S 133A HAS NO EVIDENTIARY VALUE AND ANY ADMISSION MADE DUR ING SUCH STATEMENT CANNOT BE MADE BASIS OF ADDITION. THE EXACT ISSUE BEFORE HIGH COURT OF MADRAS WAS:- WHETHER THE MATERIALS COLLECTED AND STATEMENT ELI CITED DURING THE SURVEY OPERATION UNDER SECTION 133A OF THE ACT HAD ANY EVIDENTIARY V ALUE. IN THE CASE OF PAUL MATHEWS & SONS VS. COMMISSIONER OF INCOME AS2003) 181 CTR (KER) 207, HONBLE HIGH COURT OF KERELA HELD THAT W HATEVER STATEMENT RECORDED UNDER SECTION 133A OF THE IT ACT IS NOT GIVEN ANY EVIDENC E VALUE OBVIOUSLY FOR THE REASON THAT THE OFFICER IS NOT AUTHORIZED TO ADMINISTER OA TH AND TO TAKE ANY SWORN IN STATEMENT WHICH ALONE HAS THE EVIDENTIARY VALUE AS CONTEMPLATED UNDER LAW. 11. ITA NO.0 9 & 47 (ASR)/2014 ASST. YEA R 2009-10 & 2007-08 IN THE CASE OF CIT VS. DHINGAR METAL WORKS (2010) 3 28 ITR 384 HONBLE HIGH COURT OF DELHI HELD THAT STATEMENT RECORDED DURING THE SURVE Y IS NOT A CONCLUSIVE PLACE OF EVIDENCE BY ITSELF. IT IS SETTLED LAW THAT THROUGH ADMISSION IS AN EXTREMELY IMPORTANT PLACE OF EVIDENCE, IT CANNOT BE SAID TO BE CONCLUSI VE AND IT IS OPEN TO THE PERSON WHO HAS MADE THE ADMISSION TO SHOW THAT IT IS INCORRECT . THE AO COULD NOT HAVE MADE THE ADDITION SOLELY ON THE BASIS OF THE STATEMENT MADE ON BEHALF OF THE ASSESSEE DURING THE COURSE OF SURVEY. IN THE CASE OF RAVINDER KUMAR VS. DEPUTY COMMISSION ER OF INCOME TAX (2009) 33 SOT 251(DEL),. HONBLE ITAT DELHI BENCH HELD THAT M ERELY ON THE BASIS OF STATEMENT HAVING BEEN RECORDED, NO ADDITION CAN BE MADE UNLES S THE SAME CAN BE CORROBORATED BY ANY MATERIAL EITHER FOUND DURING THE COURSE OF S URVEY OR SUBSEQUENTLY BROUGHT ON RECORD BY THE DEPARTMENT WHILE FRAMING THE ASSESSME NT. IN THE CASE OF SATISH BUILDERS VS. ACIT (2009) 33D1 71, THE HONBLE ITAT, BENCH CONCLUJDED THAT ADDITION ON THE BASIS OF ADMISSION SIMPLICITER MADE DURING THE SURVEY WITHOUT ANY SUPPORTING MATERIAL, WHICH SURRE NDER WAS SUCCESSFULLY RETRACTED BY ASSESSEE ANNEXING FOOTNOTES TO THE RETURN IS NOT SUSTAINABLE. THE BENCH ALSO DISCUSSED THE INSTRUCTION OF CBDT DATED 10 TH MARCH, 2003. THE CBDT CIRCULAR DATED 10 TH MARCH, 2003 ON CONFESSION OF ADDITIONAL INCOME DUR ING THE COURSE OF SEARCH & SEIZURE AND SURVEY OPERATION READS AS UNDER- INSTANCES HAVE CAME TO THE NOTICE OF THE BOARD WH ERE ASSESSEES HAVE CLAIMED THAT THE HAVE BEEN FORCED TO CONFESS THE UNDISCLOSED INC OME DURING THE COURSE OF THE SEARCH & SEIZURE AND SURVEY OPERATIONS SUCH CONFESS IONS, IF NOT BASED UPON CREDIBLE EVIDENCE, ARE LATER RETRACTED BY THE CONCERNED ASSE SSEES WHILE FILING RETURNS OF INCOME. IN THESE CIRCUMSTANCES, ON CONFESSIONS DURI NG THE COURSE OF SEARCH & SEIZURE AND SURVEY OPERATIONS DO NOT SERVE ANY USEFUL PURPO SE. IT IS, THEREFORE, ADVISED THAT THERE SHOULD BE FOCUS AND CONCENTRATION ON COLLECTI ON OF EVIDENCE OF INCOME WHICH LEADS TO INFORMATION ON WHAT HAS NOT BEEN DISCLOSED OR IS NOT LIKELY TO BE DISCLOSED BEFORE THE INCOME TAX DEPARTMENTS. SIMILARLY, WHILE RECORDING STATEMENT DURING THE COURSE OF SEARCH IT SEIZURES AND SURVEY OPERATIONS NO ATTEMPT SHOULD BE MADE TO OBTAIN CONFESSION AS TO THE UNDISCLOSED INCOME. ANY ACTION ON THE CONTRARY SHALL BE VIEWED ADVERSELY. 12. ITA NO.0 9 & 47 (ASR)/2014 ASST. YEA R 2009-10 & 2007-08 FURTHER, IN RESPECT OF PENDING ASSESSMENT PROCEEDIN GS ALSO, ASSESSING OFFICERS SHOULD REPLY UPON THE EVIDENCE/ MATERIALS GATHERED DURING THE COURSE OF SEARCH/SURVEY OPERATIONS OR THEREAFTER WHILE FRAMIN G THE RELEVANT ASSESSMENT ORDERS. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, I FIND THAT THERE WAS NO CORROBORATIVE EVIDENCE WHICH COULD HAVE STOPPED THE RETRACTION BY THE APPELLANT IN CASE LAWS DISCUSSED SUPRA, IT HAS BEEN HELD THAT A STATEMENT RECORDED AT THE TIME OF SURVEY DOES NO CARRY ANY EVIDENTIARY VALUE THE APPELLANT H AS PURCHASED OR DETAILS OF PAYMENTS IN RESPECT OF SUCH PURCHASE I.E. TO WHOM T HE PAYMENT HAS BEEN MADE. THEREFORE, DURING THE COURSE OF APPELLATE PROCEEDIN GS, I DIRECT THE AO TO ENQUIRE BOTH FROM THE BANK MANAGER TO WHOM SUCH LETTER WAS ADDR ESSED AS WELL AS THE REVENUE AUTHORITIES TO CONFIRM WHETHER ANY SUCH TRANSACTION HAS EVER TAKEN PLACE. IN RESPONSE TO MY DIRECTIONS, THE AO CARRIED OUT THE E NQUIRIES AND IN RESPONSE, THE BANK AUTHORITIES HAS CONFIRMED THAT NO SUCH LETTER WAS E VER POSTED TO THE SAID BRANCH OF JAMMU & KASHMIR BANK. THE BANK AUTHORITIES FURTHER CONFIRMED THAT THE BAN K HAS NEITHER ADVANCED ANY LOAN TO THE APPELLANT FIRM NOR ANY LAND OF THE APPELLANT FIRM IS MORTGAGED WITH THE BANK IN RELATION TO ANY LOAN. THE REVENUE AUTHORITIES HAVE ALSO CONFIRMED THAT NO SUCH LAND WAS EVER PURCHASED OR SOLD BY THE APPELLANT FIRM NO R THERE IS ANY LAND IN THE NAME OF THE APPELLANT FIRM. IN THE VIEW OF ABOVE FACTS, IT IS CLEAR THAT THE AP PELLANT FIRM HAS NOT PURCHASED ANY LAND ONLY ON THE BASIS OF AN UNDATED/UNPOSTED LETTE R ADDRESSED TO A BANK MANAGER, IT IS NOT JUSTIFIED TO MAKE SUCH A HUGE ADDITION IN THE HANDS OF APPELLANT. THE ENQUIRY CONDUCTED BY THE AO FROM BANK AND REVENUE AUTHORITI ES HAS CLEARLY ESTABLISHED THAT NO SUCH LAND HAS BEEN PURCHASED BY THE APPELLANT FI RM DURING THE YEAR UNDER CONSIDERATION. THEREFORE, THIS GROUND OF APPEAL OF THE APPELLANT IS ALLOWED AND A RELIEF OF RS. 9 CRORE IS ALLOWED TO THE APPELLANT. 6.3 GROUND OF APPEAL NO.3 & 4 RELATES TO RS.9,08,47 ,000/- ON ACCOUNT OF ALLEGED INVESTMENT FOR THE PURCHASE OF LAND AND AN AMOUNT O F RS.3,68,54,000/- AS PROFIT 13. ITA NO.0 9 & 47 (ASR)/2014 ASST. YEA R 2009-10 & 2007-08 FROM SALE OF THE SAID LAND PURCHASED ON THE BASIS O F DOCUMENTS IMPOUNDED DURING THE COURSE OF SURVEY. THE APPELLANT HAS ARGUED THAT THE TRANSACTIONS RECO RDED ON THE LOOSE/DUMB PAPER ARE ESTIMATES/PROJECTIONS OF LAND TO BE PROCURED FR OM DIFFERENT OWNERS OF LAND AND THEREAFTER TO BE SOLD, HOWEVER, THESE LAND HAVE NOT BEEN PURCHASED BY THE ASSESSEE FIRM IN THE YEAR UNDER CONSIDERATION. THE APPELLANT FIRM WAS FORMED TO CONSTRUCT AN ECO TOURIST VILLAGE AND THESE LOOSE PAPERS WERE MER E ESTIMATES MADE AS A PART OF THE PLANNING PROCESS, HOWEVER, NO SUCH PROJECT WAS EVER STARTED AND NO LANDS WERE ACTUALLY PROCURE4D BY THE APPELLANT FIRM. NO CORROB ORATIVE EVIDENCE OR MATERIAL WAS BROUGHT ON RECORD BY THE AO TO ESTABLISH THAT ANY S UCH TRANSACTION HAS ACTUALLY TAKEN PLACE. THE AO HAS FAILED TO BROUGHT ON RECORD THE DETAILS OF LAND THAT THE AO HAS CLAIMED TO BE PURCHASED OR SOLD BY THE APPELLAN T. THE AO HAS ALSO FAILED TO ESTABLISHED THAT THE APPELLANT HAS MADE OR RECEIVED ANY PAYMENTS OR THE PURCHASE OR SALE OF SUCH LAND. THE APPELLANT HAS ARGUED THAT THE AO, MERELY ON THE BASIS OF HIS SUSPICION HAS MADE THESE ADDITIONS. THE AO IN HIS REMAND REPORT DATED 30.11.2012 HAS NO T ADDRESSED THE ARGUMENTS RAISED BY THE APPELLANT AND REPORTED THAT THE DOCUM ENTS IMPOUNDED DURING THE SURVEY PROCEEDINGS CONTAINS THE DETAILS OF PROFIT E ARNED BY THE APPELLANT. THE APPELLANT IN THE REJOINDER OF REMAND REPORT AGA IN STRESSED THAT THE LOOSE PAPERS WERE UNSIGNED, UNDATED AND THEE WAS NO MENTION OF A NY PARTICULARS OF FUNDS OR THE OWNERS OF SUCH LANDS WHICH HAVE BEEN PURCHASED OR S OLD. NO MODES OF PAYMENTS OR RECEIPTS OR ANY EVIDENCE SHOWING SUCH PAYMENTS OR R ECEIPTS WERE BROUGHT ON RECORD. NO CORROBORATIVE EVIDENCE WAS PLACED ON RECORD TO S HOW THAT ANY SUCH TRANSACTION HAS TAKEN PLACE. NO ENQUIRIES WAS CONDUCTED BY THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS AS WELL AS REMAND PROCEEDING S TO ESTABLISH HIS CONTENTION. THUS, MERELY BASED ON THE SUSPICION OF THE AO, THE APPELLANT CANNOT BE PENALISED. THE APPELLANT HAS ALSO PLACED RELIANCE OF FOLLOWING JUDGEMENTS. DECISION OF DELHI BENCH OF ITAT, IN THE CASE OF S.K . GUPTA VS. DCIT 1999 63 TTJ (DEL) 532, IN WHICH IT WAS HELD THAT ADDITIONS MADE ON TH E BASIS OF SEIZED LOOSE SHEET AND TORN PAPERS WAS NOT JUSTIFIED AS THE ENTRIES FOUND THEREON WERE MERE ESTIMATES AND NO CORROBORATING EVIDENCE HAS BEEN BROUGHT ON RECOR D TO SHOW THAT PURCHASES AND 14. ITA NO.0 9 & 47 (ASR)/2014 ASST. YEA R 2009-10 & 2007-08 SALES OF PROPERTIES HAS ACTUALLY TAKEN PLACE AND HE NCE THERE IS NO QUESTION OF ANY UNDISCLOSED INCOME. JUDGMENT OF HONBLE ITAT CUTTACK IN THE CASE OF IN WHICH IT WAS HELD THAT THE AMOUNTS NOTIED WERE IN THE ROUND FIGURES WHICH CLE ARLY INDICATE THAT THOSE WERE ROUGH ESTIMATES. BECAUSE IT WAS NOT ACTUALLY EXPEND ED, ALL THE FIGURES WERE IN ROUND FIGURES. THE ASSESSEE BEING ENGAGED IN THE BUSINESS THERE ARE ALL POSSIBILITIES THAT HE HAD ESTIMATED THE FIGURES WHILE MAKING SOME PLANNIN G. NO CORROBORATIVE MATERIAL HAS BEEN BROUGHT ON RECORD BY THE AO FOR REJECTING THE ASSESSEES CONTENTION THAT JOTTING ON THE PIECE OF PAPER WAS AN ESTIMATE AND N OT ACTUALLY EXPENDED. ADDITIONS BASED ON CHIT PAPERS AND PRESUMPTION OF AO COULD NO T BE SUSTAINED IN THE ABSENCE OF ANY CORROBORATIVE MATERIAL OR EVIDENCE BROUGHT O N RECORD, SUPPORTING IT. IT IS ALSO NOT THE CASE OF DEPARTMENT THAT OUT OF ALL THE ENTR IES FOUND ON THE LOOSE PAPER, ANY ONE OF THEM WAS APPEARING IN THE REGULAR BOOKS OF A CCOUNT SO AS TO ACCEPT NILL ENTRIES AS GENUINE. AS NO CORROBORATIVE MATERIAL HAS BEEN B ROUGHT ON RECORD BY THE DEPARTMENT TO REJECT THE ASSESSEES CONTENTION, THE RE IS NO REASON TO INTERFERE IN THE ORDER OF THE CIT(A) FOR DELETING THE IMPUGNED ADDIT ION. IN THE CASE OF CIT VS. GIRISH CHAUDHARY (2008) 296 ITR 619, HONBLE HIGH COURT OF DELHI HELD THAT UNDER CHAPTER XIV B OF THE ACT, BEF ORE AN ADDITION OF AN UNDISCLOSED INCOME CAN BE MADE, THE ASSESSING OFFICER HAS TO B RING ON RECORD THE MATERIAL TO SHOW THAT ON EVIDENCE FOUND AS A RESULT OF SEARCH T HERE IS AN UNDISCLOSED INCOME REPRESENTED BY CREDITS APPEARING IN THE BOOKS OF AC COUNT. IN THE PRESENT CASE THERE IS NO MATERIAL ON RECORD TO SHOW AS TO ON WHAT BASIS T HE ASSESSING OFFICER HAS REACHED AT THE CONCLUSION THAT THE FIGURE 48 IS TO BE REA D AS RS.48 LACS. THE DOCUMENTS RECOVERED DURING THE COURSE OF SEARCH IS DUMB DOCUM ENT AND LEADS TO NOWHERE. IN THE CASE OF JAYA S. SHETTY V/S ACIT (1999) 64TTJ (MUMBAI) 551. UNDISCLOSED INCOME UNDER CHAPTER XIV B HAS TO BE DETERMINED ON THE BASIS OF EVIDENCE, DOCUMENTS, MATERIAL AND INFORMATION FOUND DURING SE ARCH AND IT HAS TO BE AUTHENTIC, RELIABLE AND VERIFIABLE INFORMATION AND ADDITIONS B ASED ON CONJECTURES AND SURMISES OR ESTIMATE AND RESUMPTIONS NOT SUPPORTED BY ANY EV IDENCE DOCUMENTS, ETC FOUNDING SEARCH, HAVE TO BE DELETED. I, THEREFORE, DURING THE COURSE OF APPELLANT PROCEE DINGS, DIRECTED THE AO VIDE LETTER NO. ITA-WARD(1)-SGR/2012-13/828 DATED 20.02.2013 TO ENQUIRE FROM THE REVENUE AUTHORITIES TO CONFIRM WHETHER ANY SUCH TRANSACTION HAS TAKEN PLACE. IN RESPONSE TO 15. ITA NO.0 9 & 47 (ASR)/2014 ASST. YEA R 2009-10 & 2007-08 MY DIRECTIONS, THE AO CARRIED OUT THE ENQUIRIES AND REPORTED THAT THE REVENUE AUTHORITIES HAVE CONFIRMED THAT NO LAND WAS PURCHAS ED OR SOLD BY THE APPELLANT FIRM DURING THE YEAR UNDER CONSIDERATION. IN VIEW OF THE FACTS AND LEGAL POSITION, I AM OF TH E OPINION THAT THE ADDITION MADE BY THE AO ON THE BASIS OF DUMB DOCUMENTS IMPOUNDED DUR ING THE COURSE OF SURVEY, WITHOUT CONDUCTING PROPER INQUIRY AND WITHOUT BRING ING ANY CORROBORATIVE MATERIAL ON RECORD IS NOT SUSTAINABLE. THE FIGURES ON THE LOOSE PAPER ARE ROUNDED OFF AND NO DESCRIPTION IS WRITTEN AGAINST THE EXPENSES WHICH A LSO SHOWS THE FIGURES ON THESE DOCUMENTS ARE MERE ESTIMATES. FURTHER, BASED ON ENQ UIRY CONDUCTED BY THE AO FROM REVENUE AUTHORITIES, IT IS CLEARLY ESTABLISHED THAT NO LAND WAS PURCHASED OR SOLD BY THE APPELLANT DURING THE YEAR UNDER CONSIDERATION. THEREFORE, GROUND NO.3 & 4 OF THE APPELLANT IS ALLOWED AND A RELIEF OF RS.12,77,01,00 0/- IS ALLOWED. 5. AGGRIEVED THE REVENUE IS IN APPEAL BEFORE U S. 6. THE LEARNED DR, AT THE OUTSET SUBMITTED THAT CER TAIN INCRIMINATING DOCUMENTS WERE IMPOUNDED DURING THE SURVEY OPERATIO N U/S 133 A AND ON THE BASIS OF SUCH DOCUMENTS THE ASSESSING OFFICER HAD W ORKED OUT THE VARIOUS ADDITIONS. HE SUBMITTED THAT EVEN THE ASSESSEE HAD OFFERED AN INCOME OF RS.2,00,00,000/- AS ADDITIONAL INCOME DURING THE SU RVEY PROCEEDINGS WHICH HE HAD RETRACTED ILLEGALLY AND LEARNED CIT(A) HAS DEL ETED ALL THE ADDITIONS WRONGLY. HE STRONGLY PLACED HIS RELIANCE ON THE ORDERS OF AS SESSING OFFICER. 7. THE LEARNED AR, ON THE OTHER HAND, ARGUING A PPEAL FOR ASST. YEAR 2009-10 SUBMITTED THAT THE INCOME OFFERED DURING SURVEY PRO CEEDINGS AMOUNTING TO RS.2,00,00,000/- WAS IN FACT CAPITAL GAIN EARNED BY ONE OF THE PARTNERS SH. SHEIKH GULAM QADIR AND IT WAS OFFERED BY HIM IN HI S RETURN OF INCOME FOR 16. ITA NO.0 9 & 47 (ASR)/2014 ASST. YEA R 2009-10 & 2007-08 ASST. YEAR 2007-08 AND THEREFORE, THERE WAS NO QUES TION OF TAXABILITY OF THE SAME INCOME IN THE HANDS OF THE ASSESSEE AND THEREF ORE, THE LEARNED CIT(A) HAS RIGHTLY DELETED THE SAME AFTER RECORDING HIS FINDIN GS. 8. AS REGARDS THE ADDITION OF RS.9,00,00,000/- ON ACCOUNT OF ALLEGED INVESTMENT IN PURCHASE OF LAND, HE SUBMITTED THAT T HE ADDITION WAS MADE ONLY ON THE BASIS OF A LETTER IMPOUNDED DURING THE SURVE Y PROCEEDINGS WHICH WAS ADDRESSED TO A BANK MANAGER FOR DEVELOPMENT OF A PR OPOSED LAND AND WHICH LAND WAS NEVER PURCHASED. HE SUBMITTED THE LEARNED CIT(A) AFTER CONFIRMATION FROM THE REVENUE AUTHORITIES AND AFTER CONFIRMATION FROM BANK OFFICIALS HAS DELETED THE ADDITION. SIMILARLY, HE SUBMITTED THAT THE OTHER ADDITIONS WHICH WERE MADE BY ASSESSING OFFICER ON ACCOUNT OF ALLEGE D INVESTMENT OF PURCHASE OF LAND AND PROFIT ON SALE OF SUCH LAND IS NOT CORROBO RATED BY ANY MATERIAL AND THIS WAS MADE ONLY ON THE BASIS OF SOME LOOSE PAPER S WHEREIN ONLY ESTIMATES WERE MENTIONED AS PART OF PLANNING PROCESS AND, THE REFORE, HE SUBMITTED THAT THE LEARNED CIT(A) HAS RIGHTLY DELETED THE ADDITION S. ARGUING THE APPEAL IN ASST. YEAR 2007-08 THE LEANED AR SUBMITTED THAT IN RESPEC T OF ADDITION OF RS.9,00,00,000/-, THE ASSESSING OFFICER HAD MADE TH E ADDITIONS ON PROTECTIVE BASIS AND WHICH WAS MADE BY ASSESSING OFFICER ON SU BSTANTIAL BASIS IN ASST. YEAR 2009-10 IT HAS BEEN RIGHTLY DELETED AS LEARNED CIT(A) HAS DELETED THE ADDITION ON SUBSTANTIVE BASIS ALSO. SIMILARLY, HE A RGUED THAT LEARNED CIT(A) HAS DELETED THE REMAINING ADDITIONS BY PASSING A DETAI LED AND EXHAUSTIVE ORDER WHICH IS SELF EXPLANATORY AND HE PLACED HIS RELIANC E ON THE ORDER OF LEARNED CIT(A). 17. ITA NO.0 9 & 47 (ASR)/2014 ASST. YEA R 2009-10 & 2007-08 9. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT THE ADDITIONS WERE M ADE BY ASSESSING OFFICER, ON THE BASIS OF SOME LOOSE PAPERS WHICH WAS FOUND D URING THE SURVEY PROCEEDINGS. THE ASSESSEE DURING THE COURSE OF APPE LLATE PROCEEDINGS HAS EXPLAINED IN DETAIL THAT THE TRANSACTIONS NOTED ON THE LOOSE PAPERS WERE NEVER EXECUTED AND FURTHER LEARNED CIT(A) HAS VERIFIED FR OM THE REVENUE AUTHORITIES REGARDING THESE TRANSACTIONS WHO HAD CONFIRMED THAT NO SUCH TRANSACTIONS OF SALE AND PURCHASE OF LAND HAS BEEN ENTERED INTO BY ASSESSEE. THE LEARNED CIT(A) HAS ALSO OBTAINED REMAND REPORT FROM ASSESSI NG OFFICER AND HAD SUBMITTED ALL THE SUBMISSIONS OF ASSESSEE TO ASSESS ING OFFICER AND ASSESSING OFFICER HAS NOT COMMENTED UPON THE SUBMISSIONS OF A SSESSEE. 10. AS REGARDS APPEAL IN ASST. YEAR 2007-08 THE ADDITIONS OF RS.13,49,954/- WAS MADE BY THE ASSESSING OFFICER HOLDING THAT ASSE SSEE HAD PURCHASED 56 KANALS OF LAND FROM A DEVELOPER WHICH IT HAD SOLD A T A PROFIT OF RS.13,49,954/-. WE FIND THAT ASSESSEE IN THIS CASE WAS ONLY A MEDIA TOR FOR ARRANGEMENT OF LAND AND HAD ARRANGED LAND FOR JAMMU AND KASHMIR HOUSING CO-OPERATIVE SOCIETY MEASURING 56 KANALS AND 10 MARLAS @ 13 LACS PER KAN AL FROM VARIOUS OWNERS OF LAND. THE LEARNED CIT(A) HAS MADE A FINDING OF F ACT THAT LEASE DEEDS WERE EXECUTED BY OWNERS OF LAND AND NOT BY THE APPELLANT FIRM AND THE APPELLANT FROM WAS TO GET ONLY COMMISSION WHICH IT COULD NOT GET DUE TO SOME DISPUTE AS THE LAND WAS NOT TRANSFERRED IN THE NAME OF SOCIETY AND LEARNED CIT(A) HAS MADE A FINDING OF FACT THAT AS PER THE REVENUE RECO RD THE LAND STILL REMAINED IN 18. ITA NO.0 9 & 47 (ASR)/2014 ASST. YEA R 2009-10 & 2007-08 THE NAMES OF OWNERS AND THEREFORE, THE LEARNED CIT( A) HAS RIGHTLY DELETED THIS ADDITION. 11. AS REGARDS THE ADDITION OF RS.9,00,00,000/ - THE ASSESSING OFFICER HAD MADE THIS ADDITION IN ASST. YEAR 2007-08 ON PROTECT IVE BASIS AND SUBSTANTIVE ADDITION WAS MADE IN ASST. YEAR 2009-10 AND THIS SU BSTANTIVE ADDITION HAS BEEN DELETED BY LEARNED CIT(A). THE SAID ADDITION W AS MADE ONLY ON THE BASIS OF A LETTER WRITTEN BY ASSESSEE TO BRANCH MANAGER O F J & K BANK AND NO ACTUAL PURCHASE OF LAND WAS MADE, THEREFORE, THE LEARNED C IT(A) HAS RIGHTLY DELETED THE SAME. SIMILARLY THE OTHER ADDITIONS MADE BY ASS ESSING OFFICER WERE RIGHTLY DELETED BY LEARNED CIT(A) AS THE SAME WERE NOT ACTU ALLY ENTERED INTO BY ASSESSEE AND THE FIGURES MENTIONED ON THE LOOSE PAP ERS WERE ESTIMATES AS THE ASSESSEE WAS PLANNING TO PURCHASE THESE LAND FOR DE VELOPMENT BUT NEVER PURCHASED THE SAME, AS WAS CONFIRMED BY REVENUE AUT HORITIES. SIMILARLY BANK OFFICIALS HAS ALSO CONFERRED THAT NO LOAN WAS GRANT ED TO THE ASSESSEE FOR PURCHASE/DEVELOPMENT OF LAND. 12. SIMILARLY IN ASST. YEAR 2009-10 THE FIRST ADDIT ION OF RS.2,00,00,000/- WAS DELETED AS LEARNED CIT(A) HAD MADE A FINDING OF FACT THAT THE SAID CAPITAL GAIN OF RS.2,00,00,000/- WAS DECLARED BY SH. SHEIKH GULAM QADIR PARTNER OF THE FIRM IN HIS RETURN OF INCOME FOR ASST. YEAR 200 7-08 AND THEREFORE, THE SAME INCOME CANNOT BE TAXED TWICE. AS REGARDS ADDITION O F RS.9,00,00,000/- THE LEARNED CIT(A) HAS CLEARLY HELD THAT THE ASSESSEE N EVER PURCHASED 50 KANALS OF LAND @ RS.80 LACS PER KANAL AND IT WAS ONLY IN THE PLANNING STAGE AND NO SUCH 19. ITA NO.0 9 & 47 (ASR)/2014 ASST. YEA R 2009-10 & 2007-08 ACTUAL LAND WAS PURCHASED. SIMILARLY ADDITION ON A CCOUNT OF ALLEGED PURCHASES WERE DELETED BY LEARNED CIT(A) HOLDING THAT SAME WE RE NEVER EXECUTED AND THESE WERE ESTIMATES AND IN THE PLANNING PROCESS ON LY. IN VIEW OF THE ABOVE, WE DO NOT SEE ANY INFIRMITY IN THE ORDER OF LEARNED CI T(A), WHO HAD PASSED A DETAILED AND EXHAUSTIVE ORDER AND LEARNED DR WAS NO T ABLE TO CONTROVERT ANY OF THE FINDINGS RECORDED BY LEARNED CIT(A). 13. IN VIEW OF THE ABOVE, THE APPEALS FILED BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH JANUARY, 2016. SD/- SD/- (A.D.JAIN) (T.S.KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 07.01.2016 PK/PS COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: 2. THE 3. THE CIT(A) 4. THE CIT 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.