Appeal details
Counselvise Citation
[2015] 134 COUNSELVISE.COM (IT) 0979 (ITAT-PUNE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
10 year(s) 9 month(s) 23 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
30-10-2015
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
A
Next Hearing Date
21-09-2015
Assessment Year
misc
Appeal Filed On
07-01-2005
Judgement Text
] ]] ] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE , !, # $ BEFORE MS. SUSHMA CHOWLA, JM AND SHRI PRADIP KUMAR KEDIA, AM ITA NO.964/PN/2002 BLOCK PERIOD : 1989-90 TO 1998-99 SHRI MURLIDHAR RADHOMAL WADHAWA, PROP. OF M/S AMRUTLAL AND COMPANY, 190-A, LAXMI CHHAYA, MAIN ROAD, GANDHINAGAR, DIST. KOLHAPUR. PAN : N.A. . APPELLANT VS. THE DY. COMMISSIONER OF INCOME TAX, CIRCLE- 1(1), KOLHAPUR. . RESPONDENT ITA NO.965/PN/2002 BLOCK PERIOD : 1989-90 TO 1998-99 SHRI RAMESHLAL RADHOMAL WADHAWA, PROP. OF RAMESH TEXTILES, 190-A, LAXMI CHHAYA, MAIN ROAD, GANDHINAGAR, DIST. KOLHAPUR. PAN : N.A. . APPELLANT VS. THE DY. COMMISSIONER OF INCOME TAX, CIRCLE- 1(1), KOLHAPUR. . RESPONDENT ITA NO.09/PN/2005 BLOCK PERIOD : 1989-90 TO 1999-2000 SHRI ASHOK TEKCHAND KHUBCHANDANI, PROP. M/S AMARPREM TEXTILES, R.S. NO.189/5, SWAMI SHANIT PRAKASH COMPLEX, GANDHI NAGAR, KOLHAPUR. PAN : AIFPK4035Q . APPELLANT VS. THE ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, KOLHAPUR. . RESPONDENT 2 ITA NO.10/PN/2005 BLOCK PERIOD : 1989-90 TO 1999-2000 SHRI GHANSHAM JASUMAL KHUBCHANDANI, R.S. NO.189/5, SWAMI SHANIT PRAKASH COMPLEX, GANDHI NAGAR, KOLHAPUR. PAN : AIFPK4022M . APPELLANT VS. THE ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, KOLHAPUR. . RESPONDENT ITA NO.478/PN/2003 BLOCK PERIOD : 1989-90 TO 1998-99 M/S D. R. TEXTILES, C/O SHRI MURLIDHAR RADHOMAL WADHAWA, PROP. M/S AMRITLAL & CO., 190-A, LAXMI CHHAYA, MAIN ROAD, GANDHINAGAR, DIST. KOLHAPUR. PAN : N.A. . APPELLANT VS. THE ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, KOLHAPUR. . RESPONDENT / APPELLANT BY : SHRI M. K. KULKARNI / RESPONDENT BY : SHRI ACHAL SHARMA / DATE OF HEARING : 21.09.2015 / DATE OF PRONOUNCEMENT: 30.10.2015 % / ORDER PER PRADIP KUMAR KEDIA, AM : THESE ARE BUNCH OF FIVE INTER CONNECTED APPEALS ARI SING AGAINST SEPARATE ORDERS OF COMMISSIONER OF INCOME TAX( APPEALS) PUNE ARISING FROM THE RESPECTIVE ASSESSMENT ORDERS PASSED BY THE ASSESSIN G OFFICER UNDER S. 143(3) OF THE INCOME TAX ACT 1961 ( ACT). THESE APPEALS IN VOLVE COMMON ISSUES EMANATING FROM SIMILAR FACTS. THEREFORE, ALL THESE APPEALS HAVE BEEN CLUBBED 3 AND HEARD TOGETHER AND ARE BEING DISPOSED OF BY THI S CONSOLIDATED ORDER FOR THE SAKE CONVENIENCE AND BREVITY. ITA NO.964/PN/2002 : 2. FIRST, WE MAY TAKE-UP THE APPEAL IN THE CASE OF SHRI MURLIDHAR RADHOMAL WADHAWA IN ITA NO.964/PN/2002 WHICH IS DIR ECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS), KOLH APUR DATED 16.04.2002 RELATING TO BLOCK ASSESSMENT PERIOD 1989-90 TO 1998 -99 PASSED UNDER SECTION 158BC(C) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT). 3. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLL OWING CONCISE GROUNDS OF APPEAL :- 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) ERRED IN MAKING ADDITION OF RS.7,44,000/- U/S 69B AS UNEXPLA INED INVESTMENT IN RESPECT OF THE PLOT NO.194/8 AT WALIWADE TREATING IT AS UNDISCLOSE D INCOME OF THE APPELLANT. 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.1,25,000/- U/S 69B AS UNEXPLAINED INVESTMENT IN RESPECT OF THE BARRACKS AT C.S. NO.2904 AT WALIWADE PURCHASED BY THE APPELLANTS SON AND TREATING IT AS UNDISCLOSED INCOME OF THE AP PELLANT. 3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) ERRED IN CONFIRMING RS.2,07,764/- AS INITIAL INVESTMENT AND RS.78,892/- AS G.P. IN RESPECT OF CERTAIN TRANSACTIONS WHICH WAS ASSUMED TO BE UNDISC LOSED SALES AND THEREBY TREATING RS.2,86,656/- AS UNDISCLOSED INCOME OF THE BLOCK PE RIOD. 4) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.1,76,000/- U/S 69B AS UNEXPLAINED INVESTMENT IN RESPECT OF THE PLOT NO.194/9 AT WALIWADE PURCHASED BY THE APPELLANTS SON AND TREATING IT AS UNDISCLOSED INCOME OF THE APPELLANT. 5) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.1,09,764/- BEING THE SALE PROCEEDS RECEIVED ON THE SALE OF SILVER ARTICLES AND 5% COMMISSION THEREON (ESTIM ATED) AS UNEXPLAINED RECEIPT AND THEREBY AS UNDISCLOSED INCOME. 6) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) ERRED IN TREATING THE ADVANCE OF RS.25,000/- GIVEN TO M/S KA THADE COLLECTIONS AS UNEXPLAINED DEPOSIT AND MAKING ADDITION ON PROTECTIVE BASIS IN THE HANDS OF THE APPELLANT. 7) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) ERRED IN TREATING THE ADVANCE GIVEN TO KATHADE COLLECTIONS B EING RS.50,000/- AS UNDISCLOSED INVESTMENT AND THEREBY, TREATING IT AS UNDISCLOSED INCOME. 8) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) ERRED IN CONFIRMING THE ACTION OF THE A.O. IN TREATING THE S ALES OF RS.3,40,654/- AS UNACCOUNTED SALES AND ESTIMATING THE INITIAL INVEST MENT OF RS.85,163/- AND G.P. OF RS.22,994/- AS UNDISCLOSED INVESTMENT AND INCOME FO R THE BLOCK PERIOD, WITHOUT CONSIDERING THE FACTS AND THE EXPLANATIONS. 4 9) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION MADE ON ACCOUNT OF THE E STIMATED UNDISCLOSED HOUSEHOLD EXPENSES FOR THE FINANCIAL YEAR 1993-94 WHEN IN FAC T THE NOTINGS WERE FOUND ONLY FOR NOVEMBER 1993, MARCH, 1994 AND THERE WAS NO OTH ER EVIDENCE OR MATERIAL FOUND DURING THE COURSE OF SEARCH. 10) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) ERRED IN CONFIRMING THE ACTION OF THE A.O. IN TREATING THE D .R. TEXTILES, A PARTNERSHIP FIRM AS BENAMI FIRM OF THE APPELLANT AND HIS BROTHER AND MA KING ADDITION IN RESPECT OF RS.1,70,066/- (RS.1,63,428/- + RS.6,638/-). 11) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) ERRED IN TREATING BANTI GARMENTS AS BENAMI OF THE APPELLANT AND MAKING ADDITION IN RESPECT OF RS.14,145/-. 12) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.12,09,000/- U/S 68, T REATING THE AMOUNTS RECEIVED FROM VARIOUS PERSONS BY FATHER (DECEASED) AS UNEXPLAINED CASH CREDIT AND TREATING IT AS UNDISCLOSED INCOME OF THE APPELLANT THOUGH ACTION W AS TAKEN AGAINST FATHER U/S 158BD OF THE ACT. 13) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) ERRED IN CONFIRMING THE LEVY OF INTEREST U/S 158BFA(1). 4. THE GROUND NO. 1 OF APPEAL RELATES TO ADDITION T OWARDS UNEXPLAINED INVESTMENT IN PLOT NO.194/8 AT WALIWADE KOLHAPUR FO R A SUM OF RS.7,44,000/-. 4.1 THE RELEVANT FACTS ARE CULLED OUT BELOW:- 4.2 THE ASSESSEE IS ENGAGED IN WHOLESALE CLOTH BUSI NESS AT GANDHINAGAR UNDER THE NAME AND STYLE OF M/S AMRUTLAL & COMPANY . THE ASSESSEE WAS SUBJECTED TO SEARCH AND SEIZURE ACTION UNDER SECTIO N 132 OF THE ACT AND ACCORDINGLY BLOCK ASSESSMENT FOR THE PERIOD BEGINNI NG FROM ASSESSMENT YEAR 1989-99 UPTO 1998-99 WERE CARRIED OUT UNDER SECTION 158BC(C) OF THE ACT BY THE ASSESSING OFFICER VIDE ITS ORDER DATED 27.09.20 00. THE SEARCH WAS CONDUCTED ON THE BUSINESS AND RESIDENTIAL PREMISES OF THE ASSESSEE ON 08.09.1998. BOOKS OF ACCOUNT, DOCUMENTS, LOOSE PAPE RS WERE FOUND AND SEIZED DURING THE COURSE OF SEARCH ACTION. 4.3 AT THE TIME OF SEARCH IN THE PREMISES OF THE AS SESSEE, AN ORIGINAL AGREEMENT OF SALE I.E. SANCHAKAR PATRA DATED 07/07/ 93 WAS, INTER-ALIA, DISCOVERED, WHICH WAS EXECUTED BETWEEN SHRI RAMESHL AL R WADHWA I.E. BROTHER OF THE ASSESSEE (ITA NO.965/PN/2002) AND TH E ASSESSEE (ITA NO.964/PN/2002) AS PURCHASERS ON THE ONE HAND AND S HRI ASHOK T 5 KHUBCHANDANI (ITA NO.09/PN/2005) AND SHRI GHANSHAM JASUMAL KHUBCHANDANI (ITA NO.10/PN/2005) AS SELLERS ON THE OTHER HAND. AS PER THIS AGREEMENT, THE ASSESSEE AND HIS BROTHER AGREED TO P URCHASE R.S. NO.194/8 ADMEASURING 30492 SFT. AT VALIWADE @ RS.65/ PER SFT . AN ADVANCE OF RS.2,00,000/- IN CASH WAS ALSO GIVEN. 4.4 IT WAS FOUND THAT SUBSEQUENTLY THIS PLOT WAS PU RCHASED IN THE NAMES OF THEIR MINOR SONS BY THE ASSESSEE AND HIS BROTHER VI DE A SALE DEED DATED 22/12/93 BY MAKING PAYMENT OF RS.1,24,000/- ONLY FO R 28000 SFT. AREA. THIS ISSUE WAS EXAMINED IN DETAIL BY THE ASSESSING OFFIC ER. IN HIS STATEMENT RECORDED UNDER SECTION 132(4) OF THE INCOME-TAX ACT , THE ASSESSEE HAD ADMITTED BEFORE THE SEARCH PARTY THAT THE PLOT WAS INDEED PURCHASED @ RS.65/- PER SQUARE FEET AND THOUGH THE AGREED PRICE HAS BEE N MENTIONED IN THE SALE DEED AT RS.1,24,000/-, THE BALANCE AMOUNT WAS GIVEN IN CASH TO THE TRANSFEROR. IT WAS FURTHER ADMITTED THAT OUT OF TOTAL CONSIDERA TION OF RS.19,81,980/- AS PER AGREEMENT OF SALE, RS.2,00,000/- WAS ADVANCED ON 07 /07/93, THE BALANCE WAS TO BE GIVEN BY DECEMBER, 1993 AND THE PURCHASE TRANSAC TIONS WAS FINALIZED. A SUM OF RS.2,00,000/- AND ALSO THE BALANCE AMOUNT WE RE GIVEN OUT OF BOOKS AND THE ENTIRE AMOUNT OF RS.18,57,980/- WAS UNACCOUNTED MONEY. 4.5 ON THE BASIS OF THE SEIZED DOCUMENTS, THE ADMIS SION MADE BY THE ASSESSEE, THE ASSESSING OFFICER PROCEEDED TO ARRIVE AT THE UNDISCLOSED INVESTMENT OF THE ASSESSEE IN RESPECT OF PLOT NO.19 4/8 IN THE FOLLOWING MANNER : EXTENT OF PLOT PURCHASED 2800 SQ.FT. RATE PER SQ.FT. : RS.65/- COST OF PLOT : 28000 X 65 = RS.18,20,000/- LESS : COST OF PLOT SHOWN IN THE SALE DEED RS.1,24,000/- COST OF PLOT DECLARED IN THE BLOCK RETURN BY BOTH THE BROTHERS FOR THE RS.2,08,000/- RS.3,32,000/- 6 PLOT NO.194/8 COST OF THE PLOT REMAINED TO BE DISCLOSED RS.14,88,000/- APPELLANTS SHARE 50% RS.7,44,000/- 4.6 THE ASSESSING OFFICER THUS, CALCULATED ASSESSEE S UNEXPLAINED INVESTMENT IN THE ABOVE PLOT AT RS.7,44,000/- UNDER SECTION 69B OF THE INCOME- TAX ACT AND ADDED THE SAME TO BE UNDISCLOSED INCOME OF THE BLOCK PERIOD. 4.7 THE ASSESSEE ASSAILED THE ORDER THE AO ON MANY GROUNDS BEFORE THE CIT(A). THE ASSESSEE CONTENDED THAT NO ADDITION CAN BE MADE ONLY ON THE BASIS OF SOME STATEMENT MADE DURING THE COURSE OF S EARCH UNLESS SOME CONCRETE EVIDENCE IS FOUND. THE FOLLOWING DECISIONS HAVE BE EN RELIED UPON BY THEM : ACIT VS. GOVINDAN (63 TTJ 271) (BANG); NAGINDAS DAHYABHAI PATEL VS. ACIT (104 TAXMAN 80) ( AHD); J. K. NARAYANAN (HUF) (242 ITR 45) (MAD TRIB); KAIROOS M BHAYA (100 TAXMAN 165) (MUM); JAGDISH CHAND GUPTA (58 ITD 142) (CHD); PUSHPA VIHAR (48 TTJ 389) (BOM) 4.8 FURTHER, THE ASSESSEE SUBMITTED THAT THE SANCH AKAR PATRA SEIZED BY THE DEPARTMENT FROM THE ASSESSEES PREMISES IS NOT A VA LID DOCUMENT BECAUSE IT DOES NOT BEAR SIGNATURES OF THE ASSESSEE AND HIS BR OTHER. IT HAS BEEN SUBMITTED THAT THE LAND BELONGED TO ONE SHRI POWAR AND FAMILY AND THE KHUBCHANDANIS WERE ONLY MIDDLEMEN. THE PLOT OF LAND OF 28000 SFT . WAS ACTUALLY PURCHASED FOR RS.1,24,000/-, WHICH COMES TO 4.42 PER SFT. . D URING THE BLOCK PERIOD, A FURTHER SUM OF RS.2,08,000/- HAS BEEN OFFERED ON TH E BASIS OF APPROVED VALUERS REPORT THUS, MAKING THE TOTAL INVESTMENT IN THE COS T OF PLOT TO RS.3,32,000/- (@11.85 PER SFT.). IT HAS FURTHER BEEN SUBMITTED T HAT IMMEDIATELY AFTER THE SEARCH, SURVEY ACTION WAS ALSO TAKEN ON KHUBCHANDAN IS AND THEY HAVE ALSO STATED THAT THE PLOT WAS SOLD FOR RS.3,32,000/- AS HAS BEEN THE CASE OF THE ASSESSEE. 7 4.9 BEFORE THE CIT(A), THE ASSESSEE SUBMITTED THAT THE RATE OF RS.65/- PER SFT. IS AN EXORBITANT RATE, WHICH WAS NOT PREVAILING AT THE MATERIAL TIME IN KOLHAPUR AND WHEN REFERENCE WAS MADE BY THE ASSESSING OFFICE R TO THE DEPARTMENTAL VALUATION OFFICER, HE ALSO COULD NOT APPROVE SUCH R ATE. HE IN FACT, HAD VALUED THE PLOT AS ON 31/12/93 @ RS.20/- PER SFT. THE ASSE SSEE CITED THE FOLLOWING THREE CASES IN SUPPORT OF HIS CLAIM THAT AT THE MAT ERIAL TIME, THE LANDS WERE SOLD AT MUCH CHEAPER RATE IN KOLHAPUR AND THE ADJOINING AREAS : REGN. NO. R.S. NO. DATE AREA TRASNF AMOUNT (RS.) RATE PER SQ.FT. (RS.) 6665 194/8 12.5.93 28R 84,000 3.00 8010 194/8 17.5.96 10,000 SQ.FT. 42,000 4.20 6664 (ASSESSEES TRANSACTION) 194/8 12.12.93 28R 1,24,000 4.42 4.10 IT WAS FURTHER CONTENDED ON BEHALF OF THE ASSE SSEE BEFORE THE CIT(A) THAT ONCE THE ASSESSING OFFICER HAS REFERRED THE MA TTER TO VALUATION OFFICER FOR DETERMINING THE COST PRICE, WHICH WAS DETERMINED BY HIM AT RS.20/- PER SFT., THE REPORT OF THE VALUATION WAS BINDING ON THE ASSE SSING OFFICER. THE AO HAS REJECTED THE SUBMISSIONS OF THE ASSESSEE AND PROCEE DED TO WORK OUT THE INVESTMENT AT THE RATE OF RS.65/- THOUGH THERE WERE NO EVIDENCE FOR THE SAME. THE FOLLOWING DECISIONS WERE RELIED UPON ON BEHALF OF THE ASSESSEE. ITO VS. SMT. GITA RANI BANIK (115 TAXMAN 507) (GAU) ; ITO VS. CHIDAMBARESWARA RAO (15 ITD 471) (HYD); CIT VS. SMT. AMIYA BALA FAUL (240 ITR 378) (GAU) 4.11 THE CIT(A) ON CONSIDERATION OF ENTIRETY OF FAC TUAL MATRIX CONFIRMED THE ACTION OF THE AO. THE OPERATIVE PART OF THE ORDER O F THE CIT(A) IS SELF EXPLANATORY AND IS REPRODUCED BELOW FOR READY REFER ENCE :- 8 21. I HAVE GONE THROUGH THE ORDER OF THE ASSESSIN G OFFICER AS WELL AS THE DETAILED SUBMISSION MADE ON APPELLANTS BEHALF. IT IS NOT D ISPUTED THAT THE SANCHAKAR PATRA I.E. THE AGREEMENT TO SALE WAS RECOVERED FROM THE P REMISES OF THE APPELLANT AND, THEREFORE, THE RELEVANCE OF THE DOCUMENT IN APPELLA NTS CASE CANNOT BE CHANGED. FURTHER, THE CONTENTS OF THE SEIZED DOCUMENTS WERE UNAMBIGUOUS. FURTHERMORE, THERE WAS AN ADMISSION BY THE APPELLANT MADE UNDER SECTION 132(4) OF THE INCOME- TAX ACT. IT HAS BEEN HELD BY VARIOUS COURTS THAT T HE ADMISSION MADE UNDER SECTION 132(4) IS AN IMPORTANT PIECE OF EVIDENCE, WHICH CAN BE USED AGAINST THE APPELLANT DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 22. IT IS FURTHER SEEN IN THIS CASE THAT THIS STATE MENT MADE BY THE APPELLANT WAS NOT WITHDRAWN TILL THE ASSESSMENT OF THE APPELLANT FOR THE BLOCK PERIOD WAS TAKEN UP. THE FIRST SUCH RETRACTION TOOK PLACE IN ASSESSEES SUBMISSION BEFORE THE ASSESSING OFFICER ON 11/08/2000. THEREFORE, THE ASSESSING OF FICER WAS JUSTIFIED IN RELYING ON THE SEIZED DOCUMENT, AND THE STATEMENT OF THE APPEL LANT MADE UNDER SECTION 132(4), WHICH WERE RETRACTED MUCH LATER I.E. ABOUT TWO YEAR S FROM THE DATE OF RECORDING, WHICH CAN ONLY BE CONSIDERED AS AN AFTERTHOUGHT. I N THE PRESENT CIRCUMSTANCES OF THE CASE, EVEN IMMEDIATE RETRACTION BY THE APPELLAN T WOULD NOT HAVE MADE ANY DIFFERENCE BECAUSE THE STATEMENT WAS BASED ON SEIZE D DOCUMENTS FROM THE APPELLANTS PREMISES WHOSE CORRECTNESS CANNOT BE CH ALLENGED OR ATLEAST COULD HAVE BEEN CHALLENGED ONLY WITH PROPER EVIDENCE. 23. REGARDING IMPORTANCE OF ADMISSION UNDER SECTION 132(4), THE FOLLOWING OBSERVATION OF SUPREME COURT ARE RELEVANT : PULLONGODE RUBBER PRODUCE CO. LTD. VS. STATE OF KER ALA (1973) 91 ITR 18 (SC) AN ADMISSION IS AN EXTREMELY IMPORTANT PIEC E OF EVIDENCE BUT IT CANNOT BE SAID THAT IT IS CONCLUSIVE. IT IS OPEN T O THE ASSESSEE WHO MADE THE ADMISSION TO SHOW THAT IT IS INCORRECT. NAGUBAI ARMAL VS. B SHARMA RAO AIR 1956 SC 100 A N ADMISSION IS NOT CONCLUSIVE AS TO THE TRUTH OF THE MATTERS STATED TH EREIN. IT IS ONLY A PIECE OF EVIDENCE, THE WEIGH TO BE ATTACHED TO WHICH MUST DE PEND ON THE CIRCUMSTANCES UNDER WHICH IT IS MADE. IT CAN BE SH OWN TO BE ERRONEOUS OR UNTRUE. SARWAN SINGH RATTAN SINGH VS. STATE OF PUNJAB (1957 ) SC 637 IN LAW IT IS ALWAYS OPEN TO THE COURT TO CONVICT AN ACCUSED ON I TS CONFESSION ITSELF THOUGH HE HAS RETRACTED IT AT A LATER STAGE. NEVERTHELESS USUALLY COURTS REQUIRE SOME CORROBORATION TO THE CONFESSIONAL STATEMENT BEFORE CONVICTING AN ACCUSED PERSON ON SUCH A STATEMENT. WHAT AMOUNT OF CORROBO RATION WOULD BE NECESSARY IN SUCH A CASE WOULD ALWAYS BE A QUESTION OF FACT TO BE DETERMINED IN THE LIGHT OF THE CIRCUMSTANCES IN HIS CASE. NARAYAN BHAGWANTRAO GOSAVI BALAJIWALE VS. GOPAL VIN AYAK GOSAVI AIR 1960 SC 100 AN ADMISSION IS THE BEST EVIDENCE TH AT AN OPPOSITE CAN RELY UPON AND THOUGH NOT CONCLUSIVE COULD BE DECISIVE OF THE MATTER, UNLESS SUCCESSFULLY WITHDRAWN OR PROVED ERRONEOUS. AVADH KISHORE DASS VS. RAM GOPAL AIR 1979 SC 861 ADMISSION EVIDENTIARY ADMISSIONS ARE NOT CONCLUSIVE PROOF OF THE FACTS ADMITTED AND MAY BE EXPLAINED OR SHOWN TO BE WRONG; BUT THEY DO RAISE AN ESTOPPELS AND SHIFT THE BURDEN OF PROOF ON TO THE PERSON MAKING T HEM OR HIS REPRESENTATIVE- IN-INTEREST. UNLESS SHOWN OR EXPLAINED TO BE WRONG , THEY ARE AN EFFICACIOUS PROOF OF THE FACTS ADMITTED. 24. THE CLAIM OF THE APPELLANT THAT THE DOCUMENT IS NOT VALID BECAUSE THE APPELLANT AND HIS BROTHER DID NOT SIGN THE SAME, IS NOT CORRECT BECAUSE FOR A PURCHASE DOCUMENT TO BE EFFECTIVE, ONLY SELLERS OF THE PROPERTY ARE REQUIRED TO SIGN. IT IS FURTHER SEEN THAT THE DOCUMENT HAS BEEN WITNE SSED BY TWO PERSONS AND THE SAME WITNESSES HAVE ALSO SIGNED THE PURCHASE DEED MADE S UBSEQUENTLY IN DECEMBER, 9 1993. IT IS ALSO NO CORRECT TO SAY THAT ADDITION H AS BEEN MADE ONLY ON THE BASIS OF ADMISSION. 25. FURTHER, ARGUMENT MADE ON BEHALF OF THE APPELLA NT THAT THE REPORT OF VALUATION IS BINDING ON THE ASSESSING OFFICER IS AL SO NOT CORRECT BECAUSE ONLY WHEN THE MATTER IS REFERRED BY THE ASSESSING OFFICER TO THE VALUATION OFFICER UNDER SECTION 55A OF THE INCOME-TAX ACT FOR CAPITAL GAIN PURPOSES ONLY THEN THE ADVISE OF THE VALUATION OFFICER IS BINDING ON THE ASSESSING OFFIC ER. IN THE PRESENT CASE, THE ADDITION HAS BEEN MADE BY THE ASSESSING OFFICER NOT ON ACCOUNT OF THE CAPITAL GAIN BUT TOWARDS UNEXPLAINED INVESTMENT. IN THESE CIRCU MSTANCES, THE VALUATION OFFICERS REPORT WAS ONLY ADVISORY TO THE ASSESSING OFFICER, WHO HAS GONE AHEAD WITH THE DETERMINATION OF THE INVESTMENT OF THE APPELLANT IN THE PLOT ON THE BASIS OF THE SEIZED DOCUMENT FROM THE APPELLANTS PREMISES. 26. IN ANY CASE, THE VALUATION OFFICER ONLY ADVISED THE ASSESSING OFFICER REGARDING MARKET PRICE OF THE GIVEN PLOT OF LAND AN D THE SAME BECOMES IRRELEVANT IF THE PURCHASERS AND THE SELLERS OF THE PROPERTY MUTU ALLY AGREE WITH THE TRANSACTION AT A RATE HIGHER OR MUCH HIGHER THAN MARKET RATE. IN THE CIRCUMSTANCES OF THE CASE, IT IS HELD THAT THE ASSESSING OFFICER WAS JUSTIFIED IN RELYING ON THE SEIZED DOCUMENT AND ADMISSION OF THE APPELLANT THAT THE PLOT OF 28000 S FT. WAS PURCHASED BY THE APPELLANT @ RS.65/- PER SFT. THE CONSIDERATION WAS GIVEN OUT OF UNACCOUNTED FUND OF THE APPELLANT AND HIS SHARE OF UNEXPLAINED INVESTMENT H AS PROPERLY BEEN WORKED OUT BY THE ASSESSING OFFICER AT RS.7,44,000/-. THE ASSESS ING OFFICER ORDER ON THIS COUNT IS CONFIRMED. 5. LEARNED AR FOR THE ASSESSEE REITERATED THE FACTS AND VEHEMENTLY ARGUED THAT THE IMPUGNED SANCHAKAR PATRA SEIZED BY THE D EPARTMENT IN THE COURSE OF SEARCH IS THE PIVOTAL FOR THE IMPUGNED ADDITION. HO WEVER, SUCH DOCUMENT FOR PURCHASE OF IMPUGNED PLOT NO. 194/8 ADMEASURING 304 92 AT WALIWADE, KOLHAPUR IS NOTABLY UNSIGNED ON BEHALF OF THE ASS ESSEE AND THEREFORE IS NOT A VALID DOCUMENT INTENDED TO BE ACTED UPON AND HENCE CANNOT BE RELIED UPON. THE STATEMENT GIVEN UNDER S. 132(4) HAS BEEN RETRAC TED AND THUS CANNOT BE RELIED UPON. THE SO CALLED SELLERS I.E. KHUBCHANDAN IS HAVE ALSO STATED THAT THE PLOT WAS SOLD FOR RS. 3,32,000/- IN THE SURVEY ACTI ON ON THEM. THE APPROVED VALUERS REPORT GIVES THE VALUE OF PLOT AT RS. 3,32 ,000/- @ 11.85 PER SQ. FT. AND ACCORDINGLY DIFFERENTIAL PRICE 2,08,000/- HAS BEEN OFFERED FOR TAXATION BY THE ASSESSEE. THE LD. AR THUS CONTENDED THAT THE TOTAL VALUE OF PLOT WAS RIGHTLY OFFERED AT RS. 3,32,000/-. THE RATE OF RS. 65 PER SQ. FEET AS PROVIDED IN THE IMPUGNED SANCHAKAR PATRA IS EXORBITANT AND WAS NO T PREVAILING AT THE RELEVANT TIME. THE VALUER ON REFERENCE MADE BY THE AO DID NOT APPROVE THIS RATE AND VALUED THE PLOT AS ON 31/12/93 @ RS. 20/- PER SQ. FT. ONLY. HE THEREAFTER FORCEFULLY CONTENDED THAT ONCE THE MATTE R IS REFERRED TO THE VALUATION OFFICER, HIS ADVISE AS PER VALUATION REPORT IS BIND ING ON THE REVENUE IN TERMS OF S. 142A IN THE LIGHT OF RETROSPECTIVE AMENDMENT. S. 142A VESTS POWER WITH THE 10 AO TO MAKE REFERENCE TO THE VALUATION FOR DETERMINI NG THE INVESTMENT REFERRED TO UNDER S. 69 OF THE ACT AND THE SAID SECTION 142A IS DEEMED TO BE IN FORCE W.R.E.F. 15-11-1972 AS PER AMENDMENT BROUGHT OUT BY FINANCE (NO. 2) ACT 2004. THE LEARNED AR SUBMITTED THAT AN APPEAL IS ON LY CONTINUATION OF THE ASSESSMENT PROCEEDINGS AND THEREFORE THE ITAT CAN T AKE COGNIZANCE OF THE AMENDMENT WITH RETROSPECTIVE EFFECT. SUBSEQUENT TO THE HEARING, THE LD. AR FILED CERTAIN JUDICIAL DECISIONS VIDE COVERING LETT ER DATED 22-09-2015 TO SUPPORT ITS CONTENTIONS. 6. IN THE LIGHT OF THESE CONTENTIONS, THE LD. AR PL EADED THAT THE ACTION OF THE CIT(A) IN CONFIRMING THE ORDER OF THE AO ON THI S SCORE IS PATENTLY WRONG AND DESERVES TO BE SET ASIDE AND RELIEF AS SOUGHT A S PER GROUNDS TAKEN BE ALLOWED. 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIO NS, ORDERS OF THE AUTHORITIES BELOW & PERUSED CASE LAWS CITED. 7.1 THE MAIN PLANK OF THE ARGUMENTS ON BEHALF OF TH E ASSESSEE IS THAT THE DOCUMENT FOUND IN THE COURSE OF SEARCH NAMELY SANC HAKAR PATRIKA IS UNSIGNED BY THE ASSESSEE AND THUS JUST A MUNDANE AN D EXTRANEOUS PIECE OF PAPER NOT INTENDED TO BE ACTED UPON. IT DOES NOT TH US YIELD ANY EVIDENTIARY VALUE. THE NEXT LIMB OF ARGUMENT IS THAT THE STATEM ENT RECORDED UNDER S. 132(4) DURING THE COURSE OF SEARCH HAS BEEN RETRACT ED. NOTWITHSTANDING, THE EVIDENTIARY VALUE OF THE STATEMENT STANDS REBUTTED BY THE VALUATION REPORT OF THE DEPTT. VALUER ITSELF. 7.2 WE DO NOT FIND FORCE IN ANY OF THESE ARGUMENTS CANVASSED. WE NOTICE THAT IMPUGNED SANCHAKAR PATRIKA/ AGREEMENT OF SALE/ MOU FOR SALE/ KARAR PATRA; AS MAY BE CALLED, IS HANDWRITTEN WITH RATE @ 65 PER SQ.FT. IS WRITTEN IN UNEQUIVOCAL TERMS IN FIGURE AND WORDS. THE CONTENTS ARE HANDWRITTEN IN UNAMBIGUOUS TERMS. THE IMPUGNED DOCUMENT IS ALSO SI GNED BY THE SELLERS AND 11 WITNESSED. IT IS TRUE THAT THE ASSESSEE HAS NOT SIG NED THE IMPUGNED DOCUMENT. BUT THIS FACT CAN NOT BE SEEN TO BE OVERRIDING. THE OVERWHELMING FACT IS THAT DOCUMENT ITSELF HAS BEEN FOUND IN THE CUSTODY OF TH E ASSESSEE AT THE TIME OF SEARCH. THUS, THE ASSESSEE IS DEEMED TO BE A PARTY TO SUCH DEAL ON STIPULATED TERMS UNLESS SHOWN OTHERWISE. THERE IS ANOTHER ASPE CT OF THE MATTER. THE SAME PLOT WHICH IS SUBJECT MATTER OF IMPUGNED AGREEMENT WAS FINALLY SOLD TO THE ASSESSEE ALBEIT IN THE NAME OF MINOR SON PURPORTEDL Y THROUGH A REGULAR AGREEMENT. THUS, THE DEAL UNDERSTANDABLY ENTERED IN TO BY THIS MOU FINALLY WENT THROUGH ALBEIT WITH A LOWER PRICE. THUS IN OU R CONSIDERED VIEW, THE EVIDENTIARY VALUE OF IMPUGNED MOU CANNOT BE IGNORED AS IRRELEVANT OR EXTRANEOUS. 7.3 WE ALSO NOTICE THAT THE STATEMENT WAS RECORDED ON OATH UNDER S. 132(4) IN THE COURSE OF SEARCH WHEREIN UNDISPUTEDLY, THE C ONTENTS OF THE MOU WERE ENDORSED. AS A COROLLARY, THE STATEMENT IS PRESUMA BLY TRUE AND VOLUNTARY SINCE THE STATEMENT WAS NOT WITHDRAWN TILL THE BLOCK ASSE SSMENT WAS TAKEN UP. NO EVIDENCE HAS BEEN PLACED BEFORE US TO DEMONSTRATE T HAT STATEMENT UNDER SECTION 132(4) GIVEN DURING THE COURSE OF SEARCH HAS BEEN S UCCESSFULLY WITHDRAWN. WE DO NOT FIND ANY MATERIAL ON RECORD TO SHOW THAT THE RE WAS ANY KIND OF DURESS OR INTIMIDATION OR COERCION WHICH FORCED THE ASSESSEE TO GIVE ANY UNTRUE DECLARATION OF SUCH KIND. THE ONUS IN ANY CASE IS O N THE ASSESSEE TO ESTABLISH THE FACT OF COERCION OR DURESS AT TIME OF ORIGINAL STATEMENT WHICH HAS NOT BEEN DISCHARGED. AS NOTED EARLIER, THE CONFESSIONAL STA TEMENT IS NOT BARE BUT IS CORROBORATED BY THE HANDWRITTEN DOCUMENT SIGNED BY SELLERS ALONG WITH WITNESSES WHICH WAS UNEARTHED DURING THE COURSE OF SEARCH. SOME RETRACTION THEREOF AFTER A CONSIDERABLE GAP IS OBVIOUSLY AN AF TERTHOUGHT ATTEMPT TO CAST ASPERSION ON THE EARLIER STATEMENT. SEEKING TO RETR ACT FROM SUCH STATEMENT APPEARS TO BE ONLY A SELF SERVING EXERCISE WHICH HA S NO RATIONAL PROBATIVE VALUE IN THE ABSENCE OF ANY EVIDENCE TO SHOW THAT INITIAL ADMISSION MADE UNDER SECTION 132(4) WAS INCORRECT. SUCH BELATED AND BALD RETRACTION IS NOT CAPABLE OF CASTING ANY ASPERSION ON THE ORIGINAL STATEMENT. W HILE GIVING THE STATEMENT, THE DEPONENT ASSESSEE HAVING SPECIAL KNOWLEDGE OF T HE FACTS AND PRIVY TO 12 IMPUGNED DOCUMENT MADE ASSERTIONS TO THIS EFFECT. I N THE ABSENCE OF ANY PROVED ALLEGATION OF COERCION ETC. OR ANY OTHER MAT ERIAL CIRCUMSTANCES ADEQUATE TO IMPEACH THE TRUE AND VOLUNTARY CHARACTER OF THE STATEMENT, THE CONTENTS OF THE STATEMENT WHICH ENDORSES THE HAND WRITTEN DOCUM ENT SEIZED IS TO BE NECESSARILY DEEMED TO BE SACROSANCT. WE HAVE TO BEA R IN MIND THAT THE IMPUGNED STATEMENT OF THE ASSESSEE TO THIS EFFECT I NDUCED THE DEPARTMENT TO DE- INTENSIFY THE ENTIRE PROCESS OF THE FURTHER INVESTI GATION THOUGH SEARCH. IT IS BECAUSE OF SUCH STATEMENT THAT TOO ON OATH THAT THE DEPTT. ALTERED ITS POSITION AND CLOSED FURTHER INVESTIGATION ON THE ISSUE. THE PROVISION OF S. 132(4) IS PLAIN AND SIMPLE. THE AUTHORIZED INCOME TAX OFFICIA L IS ENTITLED TO EXAMINE ANY PERSON ON OATH WHO IS FOUND TO BE IN POSSESSION OR CONTROL OF SUCH DOCUMENTS ETC. AND ANY STATEMENT MADE BY SUCH PERSO N DURING SUCH EXAMINATION MAY THEREAFTER BE USED IN EVIDENCE IN ANY PROCEEDING UNDER THE ACT. WE DO NOT FIND ANYTHING TO SHOW THAT THE ASSE SSEE HAD SUCCESSFULLY WITHDRAWN THE ORIGINAL STATEMENT AND IN VIEW OF THE SEIZED DOCUMENT NOTED ABOVE THERE IS NO MERIT IN THE STAND OF THE ASSESSE E. 7.4 THE LD. AR ON BEHALF OF THE ASSESSEE SOUGHT TO CANVASS THAT THE RATE I.E. RS. 65 PER SQ. FT. TOWARDS PURCHASE OF IMPUGNED PLO T IS HIGHLY EXCESSIVE AND UNREALISTIC HAVING REGARD TO THE PREVAILING MARKET RATE. THE APPROVED VALUER REPORT FILED BY THE ASSESSEE OPINES 11.85 PER SQ. F T. TO BE FAIR VALUE. THE DEPARTMENT VALUATION REPORT ON REFERENCE HAS ALSO E STIMATED THE PREVAILING RATE @ 20 PER SQ. FT. ONLY. THUS, RATE OF RS. 65 PER SQ .FT. QUOTED IN THE IMPUGNED DOCUMENT IS NOT PREVALENT AT THE RELEVANT TIME BY A NY STRETCH OF IMAGINATION. WE FIND THAT THIS LINE OF ARGUMENT HAS NO MERITS IN THE FACTS AND CIRCUMSTANCES OF THE CASE. HANDWRITTEN TANGIBLE DOCUMENT DULY SIG NED BY OTHER SIDE (SELLER) WAS DISCOVERED FROM THE PREMISE OF THE ASSESSEE. TH E ACQUISITION OF PLOT DID TAKE PLACE FROM THE SAME PARTY. THE ASSESSEE ITSELF VOUCHED THE PURCHASE PRICE IN THE SELF DAMMING CONFESSION UNDER S. 132(4) IN T UNE WITH THE IMPUGNED DOCUMENT. THE OVERT EVIDENCE FOUND IN THE COURSE OF SEARCH EXPRESSING MUTUALLY AGREED RATE CANNOT BE SHUNNED AND BRUSHED ASIDE ON THE FACE OF THESE FACTS. THE QUESTION OF ADOPTION OF RATE ESTIMATED B Y AN APPROVED VALUER OR 13 DEPARTMENT VALUER WILL COME INTO PLAY ONLY WHEN THE VALUATION OF A GIVEN ASSET IS NOT DISCERNIBLE OR DETERMINABLE FROM THE UNDERLY ING DOCUMENTS. WHEN THE PLOT WAS AGREED TO HAVE BEEN PURCHASED AT A GIVEN R ATE, IT IS FOR NOBODY ELSE TO ESTIMATE A DIFFERENT RATE DEHORS THE MUTUALLY CONSE NTED DOCUMENT. IT IS COMMON KNOWLEDGE THAT THERE IS RAMPANT DEPLOYMENT O F UNACCOUNTED MONEY IN LAND TRANSACTIONS. COUPLED WITH THIS, THERE IS NO WHISPER ABOUT THE OCCASION AS TO WHY THE PARTIES PREPARED SUCH ALLEGEDLY WEIRD DOCUMENT AT THE ALLEGEDLY EXORBITANT AND NON PREVALENT RATE. ONCE, THE CONFES SIONAL STATEMENT UNDER S. 132(4) ITSELF HAS BEEN FOUND TO BE ADMISSIBLE ON FA CTS AND RAISED ESTOPPEL AGAINST THE ASSESSEE AND CONSEQUENT BURDEN NOT FOUN D TO HAVE BEEN DISCHARGED BY THE ASSESSEE, THE SUBSEQUENT VALUATION INDICATIN G PLAUSIBLE AND RATIONAL PRICE IS OF NO RELEVANCE. THERE IS NO SCOPE FOR ASS UMPTION AND PRESUMPTION WHEN SPEAKING EVIDENCE FOR A GIVEN PRICE HAS BEEN F OUND IN SEARCH PROCEEDINGS. HENCE, THE QUESTION OF APPLICABILITY O F S. 142A WITH RETROSPECTIVE EFFECT OR OTHERWISE IS ONLY ACADEMIC IN THE PRESENT CASE. 7.5 WE HAVE ALSO WEIGHED THE FACT THAT THE SELLERS IN ITS STATEMENT IN SURVEY PROCEEDINGS UNDER S. 133A OF THE ACT HAVE ENDORSED THE VERSION OF THE ASSESSEE. THE STATEMENT OF SELLER IS NOT BEFORE US. NEVERTHELESS, WE DO NOT FIND ANY SUBSTANCE IN SUCH PURPORTED STATEMENT WHICH IS CONTRARY TO WRITTEN DOCUMENT SIGNED BY THEM. ALSO, THE STATEMENT RECORD ED UNDER S. 133A DOES NOT HAVE THE SAME LEGAL SANCTITY QUA THE STATEMENT RECORDED UNDER S. 132(4). 7.6 IN THE TOTALITY OF FACTS AND CIRCUMSTANCES, WE CONCUR WITH THE FINDINGS OF THE CIT(A) AND HENCE NOT INCLINED TO INTERFERE. 7.7 IN THE RESULT, GROUND NO. 1 OF THE APPEAL OF TH E ASSESSEE IS DISMISSED. 8. AT THE TIME OF HEARING, GROUND NO.2 IS NOT PRESS ED AND ACCORDINGLY THE SAME IS DISMISSED AS NOT PRESSED. 14 9. GROUND NO. 3 OF THE APPEAL PERTAINS TO ADDITION OF RS. 2,07,764/- TOWARDS ESTIMATED 25% INITIAL INVESTMENTS BY AO ON UNACCOUNTED SALES OF RS. 9,09,919/- AS PER SEIZED DIARY. 9.1 THE RELEVANT FACTS ARE THAT A SMALL MAHAVEER D IARY NO. 3 WAS SEIZED, WHICH CONTAINED UNACCOUNTED SALES OF THE ASSESSEE F ROM 1/4/93 TO 13/03/94 WHICH AGGREGATED TO RS. 9,09,949/-. THE QUANTUM OF SALES IS NOT IN DISPUTE. THE GROSS PROFIT @ 8.75% AMOUNTING TO RS. 79,620/- WAS ALSO ACCEPTED ON SUCH UNRECORDED SALES. THE AO HELD THAT 25% OF IMPU GNED SALES SHOULD BE TAKEN AS INITIAL INVESTMENT AND MADE ADDITION OF RS . 2,07,764/-. THE ASSESSEE AGREED FOR RS. 68,559/- @ 8.33% OF THE UNRECORDED S ALES. THE CIT(A) IN APPEAL, HOWEVER, CONFIRMED THE ADDITION OF RS. 2,07 ,764/- @ 25% OF SALES AS INITIAL INVESTMENTS ON THE GROUND THAT SUCH ESTIMAT IONS @ 25% ARE REASONABLE. 9.2 DURING THE COURSE OF HEARING THE LD. AR RELIED UPON THE DECISION OF CO- ORDINATE BENCH IN MOHANLAL KAKREJA & ORS. ITA NOS.8 18/PN/2001 TO 823 /PN/2001 ORDER DATED 26 TH MAY 2006 (COPY PLACED IN FILE) WHEREIN THE ITAT OBSERVED THAT INVESTMENT @ 10% WILL BE FAIR ES TIMATE. THE AR PLEADED FOR ADOPTING SIMILAR ESTIMATE AND GRANT APPROPRIATE RELIEF IN THE MATTER. THE LD. DR COUNTERED THE SUBMISSION ON THE FOOTING THAT THE INCOME HAS ONLY BEEN ESTIMATED WHICH IS FAIR AND CONFIRMED BY THE CIT(A) . 9.3 WE FIND THAT THERE IS NO COGENT EVIDENCE AVAILA BLE TO SUPPORT ESTIMATION @ 25% OF SALE AS INITIAL INVESTMENT. ON CONSIDERAT ION AND FACTS AND CIRCUMSTANCES AND IN THE LIGHT OF THE DECISION OF T HE COORDINATE BENCH, WE ARE OF THE VIEW THAT ESTIMATION @ 10% AS PLEADED BY THE ASSESSEE WOULD BALANCE EQUITIES AND WOULD BE A FAIR ESTIMATE. 9.4 IN THE RESULT, THE ASSESSEE GETS PART RELIEF. GROUND NO.3 IS PARTLY ALLOWED. 10. THE NEXT GROUND NO. 4 OF THE APPEAL IS TOWARDS ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PLOT NO.194/9 AT WALIWADE , KOLHAPUR FOR A SUM OF 15 RS.1,76,000/-. THE AFORESAID ADJOINING PLOT WAS PUR CHASED ADJACENT TO PLOT NO. 194/8 [32670 SQ. FT. LESS 28000 SQ. FEET = 4670 SQ. FT ] WHICH IS SUBJECT MATTER OF GROUND NO. 1 ABOVE. THE UNDISCLOSED INCOME WAS ALSO ARRIVED AT BY ESTIMATING THE VALUE @ 65 PER SQ. FT. HOLDING ON MONEY PAYMENT OF RS. 1,76,000/- WAS UNDISCLOSED INCOME UNDER S. 158BB WITH ADDITION WAS CONFIRMED BY THE CIT(A). THE TRANSACTION WAS AMONG THE SAME PARTIES VIZ. (I) SHRI MURLIDHAR RADHOMAL WADHWA, ITA NO.964/PN/2002; (II) SHRI RAME SHLAL RADHOMAL WADHWA, ITA NO.965/PN/2002; (III) SHRI ASHOK TEKCHA ND KHUBCHANDANI, ITA NO.09/PN/2005; AND, (IV) SHRI GHANSHAM JASUMAL KHUBCHANDANI, ITA NO.10/PN/2005. 10.1. THE RELEVANT FACTS RELATING TO THE ISSUE AS N OTICED BY THE LD. CIT(A) AND HIS CONCLUSION THEREON IS REPRODUCED BELOW FOR READ Y REFERENCE :- 36. THE APPELLANT HAD PURCHASED A PLOT OF 4670 SFT . OF R.S. NO.194/9 AT VALIWADE, KOLHAPUR ON 05/07/94 FROM SHRI ASHOK T KH UBCHANDANI AND SHRI GHANSHYAM T. KHUBCHANDANI. THE SALE DEED WAS EXECU TED IN THE NAMES OF ASSESSEES MINOR SON MASTER AMRUTLAL M WADHWA AND H IS BROTHERS MINOR SON MASTER ANILKUMAR R WADHWA FOR TOTAL CONSIDERATION O F RS.60,000/-. IT IS NEXT TO THE SAME PLOT FOR WHICH AN AGREEMENT TO SALE WAS DISCOV ERED DURING THE COURSE OF SEARCH INDICATING THE SALE PRICE @ RS.65/- PER SFT. IT APPEARS THAT THE ORIGINAL AGREEMENT OF SALE WAS FOR 30492 SFT. OUT OF WHICH 2 8000/- WAS SOLD VIDE SALE DEED DATED 22/12/93 FOR PLOT NO.194/8. SINCE THIS PLOT ALSO WAS ADJOINING TO THE PLOT NO.194/9, THE ASSESSING OFFICER TOOK THE RATE OF RS .65/- PER SFT. FOR WORKING OUT THE INVESTMENT OF THE APPELLANT. 37. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE SANCHAKAR PATRA DISCOVERED AT THE TIME OF SEARCH COVERED THE TWO TRANSACTIONS I.E . THE SALE OF 28000 SFT. IN DECEMBER, 1993 AND SUBSEQUENT SALE OF 4670 SFT. ON 05/07/94 AND, THEREFORE, SHE RIGHTLY HAS TREATED THE APPELLANTS INVESTMENT IN T HE PLOT @ RS.65/- PER SFT. MOREOVER, THE SEIZED DOCUMENTS ALSO REVEALED CASH P AYMENT OF RS.1,76,000/- OVER THE PRICE ON WHICH THE SALE DEED WAS EXECUTED BY TH E APPELLANT. FROM THE EXAMINATION OF THE CONTENTS OF MAHAVEER DIARY NO. 3 BELONGING TO THE APPELLANT, THE ASSESSING OFFICER HAS NOTICED PAYMENT OF RS.26,000/ - ON 26/01/94 AND RS.1,50,000/- ON 22/03/94, WHICH WERE THE DATES AFTER THE EXECUTI ON OF SALE DEED FOR PLOT NO.194/8 AND, THEREFORE, SHE RIGHTLY CONCLUDED THAT THIS TOT AL PAYMENT OF RS.1,76,000/- OUT OF BOOKS WAS TOWARDS PURCHASE OF PLOT NO.194/9. 38. THE ASSESSING OFFICER HAS, THEREFORE, CONCLUDED THAT THE TOTAL COST OF PLOT NO.194/9 WAS RS.4,12,000/- OUT OF WHICH THE APPELLA NTS UNEXPLAINED INVESTMENT WAS RS.1,76,000/-, RS.1,76,000/- IS THE SHARE OF HIS BR OTHER AND RS.60,000/- IS THE PRICE SHOWN IN THE SALE DEED. 39. ON BEHALF OF THE APPELLANT, SHRI VORA AND SHRI NADGOUDA, HAVE OBJECTED TO THE ORDER OF THE ASSESSING OFFICER ON THE SAME GROU ND ON WHICH THEY HAVE OBJECTED TO HER ESTIMATING UNEXPLAINED INVESTMENT OF THE APP ELLANT IN PLOT NO.194/8 AND FOR THE SAME REASON DISCUSSED IN RELATION TO THAT GROUN D IT IS HELD THAT THE ASSESSING OFFICER WAS JUSTIFIED IN TAKING RS.1,76,000/- AS UN EXPLAINED INVESTMENT OF THE APPELLANT IN PLOT NO.194/9. HER ORDER TO THIS EXTE NT IS CONFIRMED. 16 10.2 SINCE THE ISSUE IS IDENTICAL EXCEPT FOR THE DI FFERENCE IN NUMBERING OF PLOT, THE REASONINGS AND CONCLUSION ARRIVED AT FOR GROUND NO. 1 APPLY MUTATIS MUTANDIS TO GROUND NO. 4 ALSO. THUS, FOR THE PARITY OF REASONINGS, GROUND NO. 4 IS DISMISSED. 11. GROUND NO. 5 OF THE ASSESSEES APPEAL PERTAINS TO THE ADDITION OF RS.1,09,764/- TOWARDS SALE PROCEEDS RECEIVED ON SAL E OF SILVER ARTICLES AND ESTIMATED 5% COMMISSION THEREON TREATED AS UNEXPLAI NED RECEIPT AND THUS UNDISCLOSED INCOME. 11.1 FOR THE AY 1996-97, THE ASSESSEE CREDITED RS.1 ,04,538/- IN ITS CAPITAL ACCOUNT WHICH REPRESENTED SALE PROCEEDS OF SILVER A RTICLES. IT WAS THE CASE OF THE ASSESSEE THAT PART OF THE SILVER ARTICLES SOLD WERE ACQUIRED BY HIS FATHER AND BY HIM AFTER HIS MARRIAGE AND THEREFORE THE SAME WE RE ACQUIRED BEFORE 1/4/1981 AND SOLD TO DEEPAK REFINERIES. BEFORE THE CIT(A), IT WAS CONTENDED BY THE ASSESSEE THAT THE AMOUNT CREDITED IS DULY AC COUNTED FOR IN THE BOOKS AND THEREFORE IS NOT THE SUBJECT MATTER OF BLOCK ASSESS MENT BASED ON ANY INCRIMINATING DOCUMENTS FOUND DURING SEARCH. THE CI T(A) REJECTED THE CONTENTION ON THE GROUND THAT DURING THE COURSE OF SEARCH, STATEMENT OF BROTHER OF THE ASSESSEE WAS RECORDED WHEREIN IT WAS STATED THAT NO SILVER ARTICLES WERE SOLD BY THE FAMILY DURING THE BLOCK PERIOD. SUCH ST ATEMENT RECORDED DURING THE STATEMENT BROUGHT NECESSARY EVIDENCE FOR TAKING UP THE TRANSACTION AS UNDISCLOSED INCOME OF THE ASSESSEE. 11.2 WE ARE UNABLE TO AGREE WITH THE FINDINGS OF TH E CIT(A). IT IS ADMITTED POSITION THAT NO INCRIMINATING DOCUMENT SHOWING ANY UNACCOUNTED SALE OR INVESTMENT HAS BEEN FOUND. THE ENTRIES ALREADY RECO RDED IN THE BOOKS CANNOT BE SOURCE OF ADDITION / DISALLOWANCE IN BLOCK ASSES SMENT. SOME FLIPPANT OR SWEEPING STATEMENT COVERING SUCH LARGER BLOCK PERIO D BY OTHER MEMBERS OF THE FAMILY WITHOUT ANYTHING MORE CANNOT, IN OUR VIEW, O VERRIDE TANGIBLE BOOK ENTRY AND GRANT JURISDICTION TO THE AO UNDER BLOCK ASSESSMENT. THE ADDITION MADE ON THIS SCORE BY THE AO IS THEREFORE NOT SUSTA INABLE. 17 11.3 IN THE RESULT, GROUND NO. 5 IS ALLOWED. 12. GROUND NO. 6 & 7 ARE NOT PRESSED BY THE LD. AR FOR THE ASSESSEE IN THE COURSE OF HEARING. ACCORDINGLY, THE SAME ARE NOT AD JUDICATED AND TREATED AS DISMISSED. 13. GROUND NO. 8 RELATES TO ADDITION OF RS.1,08,157 /- ARISING FROM A SALE BILL BOOK SEIZED FROM BUSINESS PREMISES OF THE ASS ESSEE SHOWING UNRECORDED SALES. FROM THE IMPUGNED DIARY, UNRECORDED SALES OF RS.3,40,654/- FOR THE PERIOD OF 19/04/98 TO 06/09/98 WERE NOTICED. THE AO WORKED OUT INITIAL INVESTMENT @ 25% TOWARDS PURCHASES WHICH WORKED OUT TO RS.85,163/-. THE GROSS PROFIT OF RS.22,994/- ON SUPPRESSED SALE WAS ALSO ESTIMATED. TOTAL ADDITION IS THEREFORE RS.1,08,157/-, WHICH IS SUBJE CT-MATTER OF DISPUTE. IT WAS THE CASE OF THE ASSESSEE THAT THE SALE IS OUT OF UN ACCOUNTED STOCK DETECTED WHICH PLEA WAS TURNED DOWN BY THE AUTHORITIES BELOW . THE CIT(A) CONCURRED WITH THE REASONING OF THE AO THAT THE ASSESSEE IS A WHOLESALER IN CLOTH AND IT IS IMPROBABLE THAT STOCKS OF 31/03/97 WOULD HAVE REMAI NED WITH HIM FOR MORE THAN A YEAR AS HAS BEEN CLAIMED. 13.1 DURING THE COURSE OF HEARING, THE LD. AR FOR T HE ASSESSEE PLEADED FOR ESTIMATION @ 10% IN LINE WITH GROUND NO. 3 HEREIN. 13.2 IN VIEW OF THE PARITY OF REASONINGS, WE CONSID ER ESTIMATION @ 10% OF THE UNACCOUNTED SALE TOWARDS PURCHASES AS PROPER AN D JUSTIFIED. BESIDES, THE ADDITION TOWARDS GP RS.22,994 IS CONFIRMED. 13.3 IN THE RESULT, GROUND NO. 8 IS PARTLY ALLOWED. 14. GROUND NO. 9 PERTAINS TO ADDITION TOWARDS UNACC OUNTED HOUSEHOLD EXPENSES FOR THE ENTIRE F.Y. 1993-94 WHEN THE NOTIN GS WERE FOUND ONLY FOR NOV. 1993 TO MARCH 1994 AND THERE WERE NO OTHER EVI DENCE FOUND DURING THE SEARCH. THE CIT(A) GAVE PARTIAL RELIEF AND RESTRICT ED THE ADDITION TOWARDS 18 UNEXPLAINED WITHDRAWAL @ 7000 PM ONLY FOR THE FY. 1 993-94 AS AGAINST THE ESTIMATION FOR THE ENTIRE BLOCK PERIOD BY THE AO. 14.1 FROM READING OF PARA 76 TO 83 OF THE CIT(A) OR DER, IT IS CLEAR THAT THE ESTIMATION CONFIRMED BY THE CIT(A) IS ON THE BASIS OF SEIZED MATERIAL ONLY FOR NOV. 1993 TO MARCH 1994. SINCE, THERE IS NO INCRIMI NATING DOCUMENTS ARE AVAILABLE ON RECORD IN RESPECT OF BALANCE PERIOD, N O LIABILITY ARISES TO THE ASSESSEE FOR ESTIMATION IN RESPECT OF THE REST OF T HE PERIOD. THEREFORE, AO IS DIRECTED TO RESTRICT THE DISALLOWANCE AMOUNT IN CON FORMITY WITH SEIZED MATERIAL ONLY. 14.2 IN THE RESULT, GROUND NO. 9 IS PARTLY ALLOWED. 15. IN TERMS OF GROUND NO. 10, THE ASSESSEE HAS OBJ ECTED TO TREATING M/S D.R. TEXTILES, A PARTNERSHIP FIRM AS BENAMI FIRM OF THE ASSESSEE AND HIS BROTHER AND THUS MAKING ADDITION OF RS. 1,70,066/-. 15.1 THE CIT(A) CONFIRMED THE ACTION OF THE AO HOLD ING M/S D.R. TEXTILES TO BE A BENAMI CONCERN OF THE ASSESSEE IN WHICH WIF E OF THE ASSESSEE IS A BENAMI PARTNER ON BEHALF OF THE ASSESSEE. THE PREMI SE FOR HOLDING SO IS THAT IN THE LIGHT OF STATEMENT RECORDED UNDER S. 132(4), TH E WIFE HAS NO KNOWLEDGE OF THE BUSINESS BEING IN HER NAME AND IS NOT PRIVY TO ANY DETAILS LIKE NAME OF THE EMPLOYEE OR ANY UNDERSTANDING OF BUSINESS. 15.2 WE OBSERVE THAT THE IMPUGNED PARTNERSHIP FIRM IS BEING SEPARATELY ASSESSED AND GRIEVANCES ARISING OUT OF BLOCK ASSESS MENT ARE ALSO BEING ADJUDICATED IN THIS CONSOLIDATED APPEAL. 15.3 IN THE LIGHT OF FACTS NARRATED BY THE CIT(A) I N PARA 84 TO 91 OF ITS ORDERS, WE FIND THAT IT IS ADMITTED POSITION THAT WIFE OF T HE ASSESSEE HAS CONTRIBUTED INITIAL CAPITAL AND THE FIRM IS BACKED BY PARTNERSH IP DEED IN WRITING. THE RETURN OF INCOME OF THE PARTNERSHIP FIRM HAS BEEN FILED AN D HAS BEEN ASSESSED. MERE ABSENCE OF PERSONAL KNOWLEDGE OF THE BUSINESS IN WH ICH A PERSON IS A PARTNER 19 CANNOT MAKE HIM OR HER A BENAMI OF THE PERSON DOING THE BUSINESS FOR THE FIRM. THERE IS NOTHING TO PREVENT A PERSON TO CONTRIBUTE CAPITAL AND CARRY ON BUSINESS WITH THE HELP OF OTHERS. IN OUR VIEW, THE FINDING O F BENAMI IS BASED ON IRRELEVANT CONSIDERATIONS AND THUS VITIATED. 15.4 IN THE RESULT, THE GROUND NO. 10 IS ALLOWED. 16. GROUND NO. 11 IS NOT PRESSED BY THE LD. AR APPE ARING ON BEHALF OF THE ASSESSEE. ACCORDINGLY, THE SAME IS NOT BEING ADJUDI CATED AND TREATED AS DISMISSED. 17. GROUND NO. 12 RELATES TO ADDITION OF RS. 12,09, 000/- ON PROTECTIVE BASIS. THE CIT(A) HAS NOT ADJUDICATED THE ISSUE ON THE PRE MISE THAT PROTECTIVE ASSESSMENTS ARE NOT APPEALABLE. WE FIND THE AFORESA ID PREMISE TO BE WHOLLY INCORRECT. WHEN AN ASSESSMENT ORDER HAS BEEN FRAMED , IT IS APPEALABLE UNDER S. 246A OF THE ACT BEFORE THE CIT(A). AS SUCH, THE CIT (A) IS DIRECTED TO EXAMINE THE ISSUE AFRESH QUA THE SUBSTANTIVE ASSESSMENT AND ARRIVE AT A FINDING ON FACTS. WE ACCORDINGLY SET ASIDE THE ISSUE TO THE FILE OF T HE CIT(A) WITH A DIRECTION TO DECIDE THE ISSUE IN ACCORDANCE WITH LAW AFTER GIVIN G OPPORTUNITY TO THE ASSESSEE TO MAKE REPRESENTATIONS. 18. IN THE RESULT, GROUND NO. 12 IS ALLOWED FOR STA TISTICAL PURPOSES. ITA NO.965/PN/2002 : 19. NOW, WE SHALL TAKE-UP THE APPEAL IN THE CASE OF SHRI RAMESHLAL RADHOMAL WADHAWA IN ITA NO.965/PN/2002 WHICH IS DIR ECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS), KOLH APUR DATED 29.04.2002 RELATING TO BLOCK ASSESSMENT PERIOD 1989-90 TO 1998 -99 PASSED UNDER SECTION 158BC(C) OF THE ACT. 20. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOL LOWING CONCISE GROUNDS OF APPEAL :- 20 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.7,44,000/- U/S 69B AS UNEXPLAINED INVESTMENT IN RESPECT OF THE PLOT NO.194/8 AT WALIWADE TREATING I T AS UNDISCLOSED INCOME OF THE APPELLANT. 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.1,76,000/- U/S 69B AS UNEXPLAINED INVESTMENT IN RESPECT OF THE PLOT NO.194/9 AT WALIWADE PURCHASED BY THE APPELLANTS SON AND TREATING IT AS UNDISCLOSED INCOME OF THE APPELLANT. 3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.1,04,470/- BEING THE SALE PROCEEDS RECEIVED ON THE SALE OF SILVER ARTICLES AND 5% COMMISSION THEREON (ESTIM ATED AS UNEXPLAINED RECEIPTS AND THEREBY UNDISCLOSED INCOME. 4) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) ERRED IN TREATING THE ADVANCE OF RS.50,000/- GIVEN TO MR. KA THADE COLLECTIONS AS UNEXPLAINED DEPOSIT AND MAKING ADDITION ON PROTECTIVE BASIS IN THE HANDS OF THE APPELLANT EVEN THOUGH THE SUBSTANTIVE ADDITION IS MADE IN THE CASE OF MURLIDHAR WADHWA. 5) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) ERRED IN CONFIRMING ADDITION OF VALUE OF 135 GMS. OF GOLD OU T OF THE TOTAL 546 GMS. OWNED BY THE FAMILY, AS UNDISCLOSED INVESTMENT, AND THEREBY, TREATING IT AS UNDISCLOSED INCOME OF RS.57,645/-. 6) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) ERRED IN CONFIRMING THE ACTION OF THE A.O. IN TREATING D.R. TEXTILES A PARTNERSHIP FIRM AS BENAMI FIRM OF THE APPELLANT AND HIS BROTHER AND MA KING ADDITION IN RESPECT OF RS.1,70,066/- (RS.1,63,428/- + RS.6,638/-). 7) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW WAS NOT JUSTIFIED IN NOT DIRECTING THE A.O. TO GIVE FULL SET OFF OF T HE ADDITIONS MADE IN THE INCOME AS WELL AS THE INVESTMENTS. 21. THE FACTS CONCERNING THE VARIOUS GROUNDS ARE PARI-MATERIA WITH THE FACTS IN MURLIDHAR RADHOMAL WADHAWA, ITA NO.964/PN/2002 ( SUPRA). HENCE, THE REASONINGS NOTED IN THE CASE OF OTHER ASSESSEE IN I TA NO.964/PN/2002 WILL APPLY MUTATIS-MUTANDIS TO THIS ASSESSEE. GROUND NO. 1 & GROUND NO. 2 ARE IDENTICAL WITH GROUND NOS. 1 & 4 IN ITA NO.964/PN/2 002 AND ACCORDINGLY DISMISSED. GROUND NO. 3 IS SIMILAR TO GROUND NO. 5 THEREOF AND ACCORDINGLY ALLOWED FOR THE PARITY OF REASONINGS. GROUND NO. 4 IS SIMILAR TO GROUND NO. 12 IN ITA NO.964/PN/2002 AND ACCORDINGLY SET-ASIDE. GROUND NO. 5 AND 7 ARE NOT PRESSED BY THE AR AND THUS DISMISSED. GROUND NO . 6 IS SIMILAR TO GROUND 21 NO. 10 OF THE APPEAL IN ITA NO.964/PN/2002 (SUPRA) AND THUS ALLOWED FOR THE SAME REASONS. 22. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ITA NO.09/PN/2005 : 23. NOW, WE TAKE-UP THE APPEAL IN THE CASE OF SHRI ASHOK TEKCHAND KHUBCHANDANI IN ITA NO.09/PN/2005 WHICH IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS), KOLHAPUR DATE D 29.10.2004 RELATING TO BLOCK PERIOD 1989-90 TO 1999-2000 PASSED UNDER S ECTION 158BD R.W.S. 158BC(C) OF THE ACT. 24. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOL LOWING GROUNDS OF APPEAL :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), KOLHAPUR AND FILED WITH CIT(A ), PUNE-1. REG. : TRANSACTION OF PLOT NO.194/8 :- A. ERRED IN MAKING ADDITION OF RS.7,44,000/- AS UNA CCOUNTED INCOME FROM SALE PROCEEDS OF PLOT AT R.S. NO.194/8. 1. ERRED IN NOT ACCEPTING THE INCOME ARISING OUT OF THE SALE PROCEEDS OF PLOT AS INCOME FROM SHORT TERM CAPITAL GAINS. 2. ERRED IN ADOPTING SALE PRICE AT RS.65/- PER SFT. ON THE BASIS OF SANCHKAR-PATRA (AGREEMENT TO SELL) AND NOT ON ACT UAL REGISTERED SALE DOCUMENTS IN WHICH THE PRICE IS MENTIONED AT RS.1,24,000/-. 3. ERRED IN NOT ACCEPTING THE DEPARTMENTAL VALUATIO N REPORT FOR CALCULATION OF CAPITAL GAINS AS WAS ACCEPTED BY HIS PREDECESSOR IN CASE OF SHRI RAMESHLAL R. WADHAWA AND SHRI MURLIDHAR R. WADHAWA, FOR ASCERTAINING MARKET PRICE ON THE DATE OF SALE. 4. ERRED IN NOT CONSIDERING THE EXISTING MARKET RAT ES OF THE SURROUNDING PLOTS IN GANDHI NAGAR, KOLHAPUR WHICH WERE MUCH LOW ER THAN THE PRICE MENTIONED IN THE AGREEMENT TO SELL. 5. WITHOUT PREJUDICE TO THE ABOVE, SHOULD HAVE APPR ECIATED THAT IN ANY CASE NO ADDITION COULD HAVE BEEN MADE ON THE BASIS OF THE SANCHKAR-PATRA WHICH 22 WAS FOUND IN THE PREMISES OF SHRI MURLIDHAR R. WADH AWA AND HENCE NO ADVERSE INFERENCE COULD HAVE BEEN DRAWN IN THE APPELLANTS CASE. REG. : TRANSACTION OF PLOT NO.194/9 :- B. ERRED IN CONFIRMING THE ADDITION OF RS.1,76,000/ - AS UNACCOUNTED INCOME FOR SALE OF PLOT AT R.S.NO.194/9 PURCHASED BY SHRI RAME SHLAL R. WADHAWA AND SHRI MURLIDHAR R. WADHAWA. 1. ERRED IN ARRIVING RS.1,76,000/- AS ADDITIONAL C ONSIDERATION RECEIVED BY THE APPELLANT ONLY ON BASIS OF THE FOLLOWING ENT RIES FOUND IN THE MAHAVIR DIARY MAINTAINED BY THE CO-PURCHASER SHRI MURLIDHAR R. WA DHAWA. RS. 26,000/- 26/01/1994. RS. 1,50,000/- 22/03/1994. RS. 1,76,000/- 2. IN SHRI MURLIDHAR R. WADHAWAS CASE, ONLY THESE AMOUNTS ARE MENTIONED AS AMOUNTS SPENT ON PLOT NO.194. THERE I S NO SPECIFIC MENTION AS HAVING SPENT THESE AMOUNT ON PLOT NO.194/9. THE WADHAWA B ROTHERS HAD PURCHASED ANOTHER PLOT AT R.S. NO.194/8 ON 12/12/1993, THEREF ORE, THIS AMOUNT MIGHT HAVE BEEN IN RESPECT OF DEVELOPMENT OF PLOT NO.194/8 AND NOT TOWARDS PURCHASE PRICE OF PLOT NO.194/9. 3. ERRED IN FARFETCHED CONCLUSION THAT RS.1,76,000 /- IS TOWARDS SALE PROCEEDS OF PLOT NO.194/9. 4. ERRED IN NOT ACCEPTING THE DEPARTMENTAL VALUATI ON REPORT FOR CALCULATION OF CAPITAL GAINS AS WAS ACCEPTED BY HIS PREDECESSOR IN CASE OF SHRI RAMESHLAL R. WADHAWA AND SHRI MURLIDHAR R. WADHAWA FOR ASCERTAINING MARKET PRICE ON THE DATE OF SALE. 5. ERRED IN NOT FOLLOWING THE JUDGEMENT OF HON. BO MBAY HIGH COURT IN CASE OF ADDITIONAL C.I.T. VS. LATA MANGESHKAR (MISS ) (1974) 097 ITR 0696. THE APPELLANT CRAVES TO CONSIDER EACH OF THE ABOVE GROUNDS OF APPEAL WITHOUT PREJUDICE TO EACH OTHER AND CRAVES LEAVE TO ADD, ALTER, DELETE OR MODIFY ALL OR ANY OF THE ABOVE GROUNDS OF APPEAL. 25. THE FACTS CONCERNING THE VARIOUS GROUNDS ARE SI MILAR TO THE FACTS IN MURLIDHAR RADHOMAL WADHAWA, ITA NO.964/PN/2002 (SUP RA). HENCE, FOR THE REASONINGS NOTED IN THE CASE OF OTHER ASSESSEE IN I TA NO.964/PN/2002 WILL APPLY MUTATIS-MUTANDIS TO THIS ASSESSEE. IN THIS CASE, THE ASSESSEE HAS R AISED A POINT THAT IN RESPECT OF PLOT NO.194/9, THERE IS NO INCRIMINATING DOCUMENT FOUND AND THEREFORE, THE PRICE FOR PLOT NO.194/8 SH OULD NOT BE ADOPTED. WE HAVE UPHELD THE SALE PRICE OF PLOT NO.194/8 BASED O N TANGIBLE EVIDENCE 23 UNEARTHED DURING SEARCH. DRAWING THE ANALOGY, PLOT NO.194/9 BETWEEN SAME SET OF PARTIES CANNOT BE DIFFERENTLY TREATED. WE DO NOT UNDERSTAND THE PURPORT OF DECISION OF HONBLE BOMBAY HIGH COURT IN LATA MANGE SHKAR CASE 97 ITR 696 RELIED UPON IN THE CONTEXT OF THE FACTS OF THE CASE . ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS DISMISSED. 26. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. ITA NO.10/PN/2005 : 27. NOW, WE TAKE-UP THE APPEAL IN THE CASE OF SHRI GHANSHAM JASUMAL KHUBCHANDANI IN ITA NO.10/PN/2005 WHICH IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS), KOLHAPUR DATE D 28.10.2004 RELATING TO BLOCK PERIOD 1989-90 TO 1999-2000 PASSED UNDER S ECTION 158BD R.W.S. 158BC(C) OF THE ACT. 28. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOL LOWING GROUNDS OF APPEAL :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), KOLHAPUR AND FILED WITH CIT(A ), PUNE-1. REG. : TRANSACTION OF PLOT NO.194/8 :- A. ERRED IN MAKING ADDITION OF RS.7,44,000/- AS UNA CCOUNTED INCOME FROM SALE PROCEEDS OF PLOT AT R.S. NO.194/8. 1. ERRED IN NOT ACCEPTING THE INCOME ARISING OUT OF THE SALE PROCEEDS OF PLOT AS INCOME FROM SHORT TERM CAPITAL GAINS. 2. ERRED IN ADOPTING SALE PRICE AT RS.65/- PER SFT. ON THE BASIS OF SANCHKAR-PATRA (AGREEMENT TO SELL) AND NOT ON ACT UAL REGISTERED SALE DOCUMENTS IN WHICH THE PRICE IS MENTIONED AT RS.1,24,000/-. 3. ERRED IN NOT ACCEPTING THE DEPARTMENTAL VALUATIO N REPORT FOR CALCULATION OF CAPITAL GAINS AS WAS ACCEPTED BY HIS PREDECESSOR IN CASE OF SHRI RAMESHLAL R. WADHAWA AND SHRI MURLIDHAR R. WADHAWA, FOR ASCERTAINING MARKET PRICE ON THE DATE OF SALE. 4. ERRED IN NOT CONSIDERING THE EXISTING MARKET RAT ES OF THE SURROUNDING PLOTS IN GANDHI NAGAR, KOLHAPUR WHICH WERE MUCH LOW ER THAN THE PRICE MENTIONED IN THE AGREEMENT TO SELL. 24 5. WITHOUT PREJUDICE TO THE ABOVE, SHOULD HAVE APPR ECIATED THAT IN ANY CASE NO ADDITION COULD HAVE BEEN MADE ON THE BASIS OF THE SANCHKAR-PATRA WHICH WAS FOUND IN THE PREMISES OF SHRI MURLIDHAR R. WADH AWA AND HENCE NO ADVERSE INFERENCE COULD HAVE BEEN DRAWN IN THE APPELLANTS CASE. REG. : TRANSACTION OF PLOT NO.194/9 :- B. ERRED IN CONFIRMING THE ADDITION OF RS.1,76,000/ - AS UNACCOUNTED INCOME FOR SALE OF PLOT AT R.S.NO.194/9 PURCHASED BY SHRI RAME SHLAL R. WADHAWA AND SHRI MURLIDHAR R. WADHAWA. 1. ERRED IN ARRIVING RS.1,76,000/- AS ADDITIONAL C ONSIDERATION RECEIVED BY THE APPELLANT ONLY ON BASIS OF THE FOLLOWING ENT RIES FOUND IN THE MAHAVIR DIARY MAINTAINED BY THE CO-PURCHASER SHRI MURLIDHAR R. WA DHAWA. RS. 26,000/- 26/01/1994. RS. 1,50,000/- 22/03/1994. RS. 1,76,000/- 2. IN SHRI MURLIDHAR R. WADHAWAS CASE, ONLY THESE AMOUNTS ARE MENTIONED AS AMOUNTS SPENT ON PLOT NO.194. THERE I S NO SPECIFIC MENTION AS HAVING SPENT THESE AMOUNT ON PLOT NO.194/9. THE WADHAWA B ROTHERS HAD PURCHASED ANOTHER PLOT AT R.S. NO.194/8 ON 12/12/1993, THEREF ORE, THIS AMOUNT MIGHT HAVE BEEN IN RESPECT OF DEVELOPMENT OF PLOT NO.194/8 AND NOT TOWARDS PURCHASE PRICE OF PLOT NO.194/9. 3. ERRED IN FARFETCHED CONCLUSION THAT RS.1,76,000 /- IS TOWARDS SALE PROCEEDS OF PLOT NO.194/9. 4. ERRED IN NOT ACCEPTING THE DEPARTMENTAL VALUATI ON REPORT FOR CALCULATION OF CAPITAL GAINS AS WAS ACCEPTED BY HIS PREDECESSOR IN CASE OF SHRI RAMESHLAL R. WADHAWA AND SHRI MURLIDHAR R. WADHAWA FOR ASCERTAINING MARKET PRICE ON THE DATE OF SALE. 5. ERRED IN NOT FOLLOWING THE JUDGEMENT OF HON. BO MBAY HIGH COURT IN CASE OF ADDITIONAL C.I.T. VS. LATA MANGESHKAR (MISS ) (1974) 097 ITR 0696. THE APPELLANT CRAVES TO CONSIDER EACH OF THE ABOVE GROUNDS OF APPEAL WITHOUT PREJUDICE TO EACH OTHER AND CRAVES LEAVE TO ADD, AL TER, DELETE OR MODIFY ALL OR ANY OF THE ABOVE GROUNDS OF APPEAL. 29. THE FACTS CONCERNING THE VARIOUS GROUNDS ARE SI MILAR TO THE FACTS IN MURLIDHAR RADHOMAL WADHAWA ITA NO.964/PN/2002 (SUPR A). HENCE, FOR THE REASONINGS NOTED IN THE CASE OF OTHER ASSESSEE IN I TA NO.964/PN/2002 WILL APPLY MUTATIS-MUTANDIS TO THIS ASSESSEE. IN THIS CASE, THE ASSESSEE HAS R AISED A POINT THAT IN RESPECT OF PLOT NO. 194/9, THERE IS N O INCRIMINATING DOCUMENT 25 FOUND AND THEREFORE, THE PRICE FOR PLOT NO. 194/8 S HOULD NOT BE ADOPTED. WE HAVE UPHELD THE SALE PRICE OF PLOT NO. 194/8 BASED ON TANGIBLE EVIDENCE UNEARTHED DURING SEARCH. DRAWING THE ANALOGY, PLOT NO. 194/9 BETWEEN SAME SET OF PARTIES CANNOT BE DIFFERENTLY TREATED. WE DO NOT UNDERSTAND THE PURPORT OF DECISION OF HONBLE BOMBAY HIGH COURT IN LATA MANGE SHKAR CASE 97 ITR 696 RELIED UPON IN THE CONTEXT OF THE FACTS OF THE CASE . ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS DISMISSED. 30. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. ITA NO.478/PN/2003 : 31. NOW, WE TAKE-UP THE APPEAL IN THE CASE OF M/S D .R. TEXTILES IN ITA NO.478/PN/2003 WHICH IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-I, PUNE DATED 18.02.2003 RELAT ING TO BLOCK PERIOD 1989-90 TO 1999-2000 PASSED UNDER SECTION 158BD R.W .S. 158BC(C) OF THE ACT. 32. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOL LOWING GROUNDS OF APPEAL :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-1, PUNE - 1. ERRED IN CONFIRMING THE INTEREST CHARGED U/S 158 -BFA(1). 2. A) ERRED IN DIRECTING TO TREAT RS.1,61,671/- ON ACCOUNT OF PURCHASES FROM M/S K.C. SHAH & CO. AS UNDISCLOSED INCOME ON P ROTECTIVE BASIS. B) AS THE INCOME OF RS.1,61,671/- WAS CONSIDERED IN THE CASE OF SHRI MURLIDHAR R. WADHAWA AND SHRI RAMESHLAL R. WADHAWA ON SUBSTANTIVE BASIS THE LEARNED C.I.T(A)-1, PUNE ERRED IN DIRECTI NG TO TREAT THE SAME ON PROTECTIVE BASIS. C) CONTRARY TO THE OBSERVATION MADE IN THE ASSTT. O RDER OF SHRI MURLIDHAR R. WADHAWA AND SHRI RAMESHLAL R. WADHAWA THE APPELLANT IS NO MORE BENAMI ENTITY AS SEPARATE ASSESSMENT IS FRAMED U/S 158BD R.W.S. 158BC(C) AND REGISTRATION HAS BEEN GRANTED. THEREF ORE, THE LEARNED C.I.T.(A)-1, PUNE SHOULD HAVE TAKEN INDEPENDENT VIE W TO CONSIDER THE FACTS AND SHOULD HAVE DIRECTED TO DELETE THE ADDITION OF RS.1,61,671/-. 26 3. ERRED IN NOT ALLOWING SET OFF TO THE TUNE OF RS. 12,770/- TO THE EXCESS INCOME RETURNED BY THE APPELLANT WHO HAD REQUESTED TO ADJU ST THE SAME AGAINST THE ADDITION, IF ANY, IN THE ASSESSMENT ORDER. THE APPELLANT CRAVES, TO CONSIDER EACH OF THE ABOVE GROUNDS OF APPEAL WITHOUT PREJUDICE TO EACH OTHER AND CRAVES LEAVE TO ADD, AL TER, DELETE OR MODIFY ALL OR ANY OF THE ABOVE GROUNDS OF APPEAL AT THE TIME OF HEARING. 33. THE FACTS CONCERNING THE CASE IS THAT THE ADDIT ION OF RS.1,61,671/- WAS MADE BY THE ASSESSING OFFICER AGAINST PURCHASES MAD E FROM M/S K.C. SHAH & CO. UNDER SECTION 158BD OF THE ACT. THE ASSESSEE S TATES TO HAVE MADE CERTAIN CREDIT PURCHASES FROM M/S K.C. SHAH & CO., AHMEDABA D. AS PER THE TRADE PRACTICE, THE SELLING AGENT OF M/S K.C. SHAH & CO. IS TO VISIT AND GIVE THE GOODS AND CREDIT TO THE ASSESSEE. IF THE GOODS ARE NOT FOUND TO THE SUITABLE THEN THESE GOODS ARE RETURNED TO THESE SALES REPRESENTAT IVES. THE DETAILS OF PURCHASES ARE AS UNDER :- DATE BILL NO. AMOUNT 12.03.1996 966 RS. 41,691 14.03.1996 977 RS. 61,630 19.03.1996 1060 RS. 58,350 20.03.1996 1068 RS. 59,130 25.03.1996 1170 RS. 35,100 RS.2,55,901 ACCORDING TO THIS PRACTICE, OUT OF THESE PURCHASES, THE ENTIRE GOODS IN THE FOLLOWING 3 BILLS WERE RETURNED : DATE BILL NO. AMOUNT 31.03.1996 966 RS. 41,691 31.03.1996 977 RS. 61,630 31.03.1996 1060 RS. 58,350 RS.1,61,671 34. IN VIEW OF THIS PRACTICE, THE ASSESSEE STATES T HAT IN RESPECT OF THREE BILLS AGGREGATING TO RS.1,61,671/- ABOVE, IT HAS NEITHER MADE ANY PAYMENT AGAINST THESE PURCHASES NOR EFFECTED ANY SALE OUT OF THESE GOODS, NOR THE GOODS HAVE BEEN REFLECTED IN THE CLOSING STOCK. THEREFORE, TH E ASSESSING OFFICER HAS COMMITTED ERROR IN MAKING ADDITION OF RS.1,61,671/- AGAINST PURCHASES RETURNS 27 TO M/S K.C. SHAH & CO.. THE PURCHASES AND PURCHASE RETURNS HAVE BEEN DULY RECORDED IN THE BOOKS OF ACCOUNTS. THESE PAPERS RE GARDING PURCHASES AND SALES ONLY HAVE BEEN FOUND IN THE COURSE OF SEARCH. THER EFORE, WHILE PURCHASES ARE TO BE SEEN, PURCHASE RETURN ALSO ARE TO BE SEEN. T HE ASSESSING OFFICER DID NOT AGREE WITH THE CONTENTION OF THE ASSESSEE AND MADE AN ADDITION OF RS.1,61,671/- AS UNEXPLAINED PURCHASES ON SUBSTANTI VE BASIS. THE CIT(A) FOUND THAT THE ASSESSEE FIRM WAS TREATED BY THE ASS ESSING OFFICER AS BENAMI OF WADHAWA BROTHERS AND ADDED THE IMPUGNED INCOME IN T HE HANDS OF THE PARTNERS ON SUBSTANTIVE BASIS. ACCORDINGLY, HE PRO POSED PROTECTIVE ASSESSMENT IN RESPECT OF THE AFORESAID INCOME IN THE HANDS OF THE ASSESSEE FIRM. DURING THE COURSE OF HEARING, THE LD. AUTHORIZED REPRESENTATIV E ON BEHALF OF THE ASSESSEE, INTER-ALIA , RAISED LEGAL GROUND BY WAY OF ADDITIONAL GROUNDS AND SUBMITTED THAT SATISFACTION UNDER SECTION 158BD HAS NOT BEEN RECOR DED AS MANDATED BY LAW AND THEREFORE THE ENTIRE ACTION IS WITHOUT JURISDIC TION AND THEREFORE VOID AB- INITIO AND IS REQUIRED TO BE CANCELLED. HE, THEREFORE, S UBMITTED ON FACTS THAT THE ADDITION HAS BEEN WRONGLY MADE TOWARDS GOODS RETURN WHICH HAVE NO IMPACT ON THE PROFITABILITY OF THE ASSESSEE FIRM. AS REGA RDS, HOLDING THE ASSESSEE FIRM AS BENAMI OF WADHAWA BROTHERS, HIS SUBMISSIONS IN R ESPECT OF GROUNDS OF APPEAL NO.10 IN ITA NO.964/PN/2002 APPLIES MUTATIS-MUTANDIS . 35. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REV ENUE RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 36. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS AND THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS SATISFACTION NOTE DATE D 21.09.2015 BY VIRTUE OF WHICH THE PROVISIONS OF SECTION 158BD OF THE ACT WA S INVOKED. WE FIND THAT THE SATISFACTION NOTE HAS BEEN CLEARLY RECORDED AND THEREFORE THE GRIEVANCE OF THE ASSESSEE IS NOT SUSTAINABLE. THUS, THE IMPUGNE D ADDITIONAL GROUND OF THE ASSESSEE ON THIS ASPECT IS DISMISSED. WE ALSO FIND THAT THE ORDER HAS BEEN COMPLETED WITHIN TIME LIMIT AS PROVIDED UNDER SECTI ON 158BE OF THE ACT AND THEREFORE ACTION IS WITHIN TIME LIMIT. THUS, THE A DDITIONAL GROUND ON THIS ASPECT IS ALSO DISMISSED. 28 37. ON FACTS, WE NOTICE THAT THERE IS NO REBUTTAL F ROM REVENUE TO THE CONTENTION OF THE ASSESSEE THAT IMPUGNED GOODS WERE DULY RETURNED BACK TO THE SELLER AND HAS NEITHER BEEN INCLUDED IN THE CLOSING STOCK OF THE ASSESSEE NOR CORRESPONDING SALE HAS BEEN EFFECTED BY THE ASSESSE E. HENCE, THE QUESTION OF UNRECORDED PURCHASES OF GOODS RETURNED BACK THEREFO RE DO NOT LIE. IN THE RESULT, THE IMPUGNED ADDITION IS NOT SUSTAINABLE. 38. AS REGARDS THE ALLEGATION OF ASSESSING OFFICER THAT THE ASSESSEE FIRM IS BENAMI, WE HAVE ALREADY HELD IN ITA NO.964/PN/2002 (SUPRA) THAT THE ASSESSEE FIRM CANNOT BE HELD BENAMI OF WADHAWA BROT HERS AND THEREFORE THE ACTION OF THE CIT(A) THAT THE ASSESSMENT SHOULD BE FRAMED ON PROTECTIVE BASIS IS NOT SUSTAINABLE. 39. NOTWITHSTANDING ABOVE, WE HAVE ALREADY HOLD ON FACTS THAT THE ADDITION OF RS.1,61,671/- IS NOT JUSTIFIED. 40. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. 41. RESULTANTLY, ALL THE CAPTIONED APPEALS OF THE R ESPECTIVE ASSESSEE ARE DISPOSED-OFF IN TERMS OF ABOVE. ORDER PRONOUNCED ON THIS 30 TH DAY OF OCTOBER, 2015. SD/- SD/- ( SUSHMA CHOWLA ) ( PRADIP KUMAR KEDIA ) / JUDICIAL MEMBER # / ACCOUNTANT MEMBER PUNE ; DATED : 30 TH OCTOBER, 2015. 29 % & '() *)' / COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-I, PUNE; 4) THE CIT-I, PUNE; 5) THE CIT(A), KOLHAPUR; 6) THE CIT, KOLHAPUR; 7) THE DR A BENCH, I.T.A.T., PUNE; 8) GUARD FILE. %+ / BY ORDER , ' # //TRUE COPY// $ %& # '( / SR. PRIVATE SECRETARY ) '* , / ITAT, PUNE
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