DCIT, Chandigarh V. Sh. Anil Verma, Chandigarh

ITA 941/CHANDI/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8953 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 07-09-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 30-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVI SARANGALCI TDR
• Keywords: Unexplained investment; Search and seizure; Document seized; Fair market value; Block assessment; Tax effect; Documents seized
• Section: 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 941/CHD/2014 ASSESSMENT YEAR: 2006-07 THE DCIT, VS SHRI ANIL VERMA, CENTRAL CIRCLE-II, HOUSE NO. 1383, CHANDIGARH. SECTOR 33-C, CHANDIGARH. PAN: ABGVP4017P & ITA NO. 940/CHD/2014 ASSESSMENT YEAR: 2006-07 THE DCIT, VS SMT. RANI VERMA, CENTRAL CIRCLE-II, HOUSE NO. 1383, CHANDIGARH. SECTOR 33-C, CHANDIGARH. PAN: AAIPV6878M & ITA NO. 942/CHD/2014 ASSESSMENT YEAR: 2006-07 THE DCIT, VS SHRI AKSHAY VERMA, CENTRAL CIRCLE-II, HOUSE NO. 1383, CHANDIGARH. SECTOR 33-C, CHANDIGARH. PAN: ACGPV2609E (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAVI SARANGAL,CI T-DR RESPONDENT BY : SHRI SUDHIR SEHGAL DATE OF HEARING : 21.11.2016 DATE OF PRONOUNCEMENT : 23.11.2016 2 O R D E R PER BHAVNESH SAINI,JM ALL THE APPEALS BY REVENUE ARE DIRECTED AGAINST DIFFERENT ORDERS OF LD. CIT(APPEALS), CENTRAL, GURG AON DATED 28.08.2014 FOR ASSESSMENT YEARS 2006-07. 2. IN ALL THE APPEALS, REVENUE HAS RAISED COMMON GROUNDS OF APPEAL CHALLENGING THE ORDER OF LD. CIT(APPEALS) IN ALLOWING RELIEF TO THE ASSESSEE ON ACCOUNT OF ADDITION MADE BY THE ASSESSING OFFICER O N UNEXPLAINED INVESTMENT FOR PURCHASE OF SHARES OF M/ S PRAGATI NIRMAN PVT. LTD. ADOPTING THE SHARE PRICE @ RS. 6554/- PER SHARE DEDUCED ON THE BASIS OF SEIZED DOCUMENT AS AGAINST DECLARED PRICE OF RS. 3900/- PE R SHARE. 3. FOR THE SAKE OF BREVITY, THE FACTS ARE TAKEN FRO M THE CASE OF SHRI ANIL VERMA. IN THIS CASE, ADDITIO N OF RS. 4.58 CR WAS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTMENT UNDER SECTION 69B OF THE ACT ON ACCOUNT OF PURCHASE OF SHARES OF M/S PRA GATI NIRMAN PVT. LTD. BY ADOPTING THE PER SHARE PRICE AT RS. 6554/- INSTEAD OF DECLARED RATE OF RS. 3900/-. THE ASSESSEE SUBMITTED BEFORE LD. CIT(APPEALS) THAT THI S ISSUE IS SIMILAR AS HAVE BEEN DECIDED IN THE CASE O F SHRI SURINDER KUMAR GULATI AND SHRI MADAN LAL GULATI. T HE LD. CIT(APPEALS) FOUND THAT ON SIMILAR FACTS AND CIRCUMSTANCES, THE CASE OF SHRI SURINDER KUMAR GULA TI 3 AND SHRI MADAN LAL GULATI HAVE BEEN CONSIDERED IN WHICH ASSESSING OFFICER HAS RELIED UPON SOME SEIZED DOCUMENTS FOR MAKING THE ADDITIONS. IT WAS ALSO NO TED THAT APPEALS OF SHRI SURINDER KUMAR GULATI AND SHRI MADAN LAL GULATI STOOD ADJUDICATED WHEREIN THE APPE ALS WERE ALLOWED BY REFERRING TO THE ORDER OF LD. CIT(APPEALS)-I LUDHIANA IN OTHER GROUP OF CASES WHE RE SIMILAR FACTS WERE THERE AND PRAYED FOR DELETING TH E ADDITION. 4. IT IS NOTED THAT THE IMPUGNED ORDER CONTAINED THE SCANNED COPIES OF SEIZED DOCUMENTS APART FROM EXTRACT OF STATEMENTS RECORDED UNDER SECTION 132(4) OF THE ACT OF THE SELLER SHRI SURINDER GULATI. DURING THE YEAR, SHARES OF CLOSELY HELD COMPANY M/S PRAGATI NIRMAN PVT. LTD. WERE SOLD TO NARAIAN & VTC GROUP. THE ORIGINAL SHAREHOLDERS OF THE COMPANY WERE GULAT I FAMILY, CHADHA FAMILY AND SHAH FAMILY AND COMPANY OWNED THE NIRMAN CINEMA THEATRE LOCATED AT SECTOR 3 2, CHANDIGARH. THE ASSESSEE HAD PURCHASED 17279 SHARE S. IT IS CONTENTION OF THE ASSESSING OFFICER THAT PURC HASE PRICE OF EACH SHARE SHOWN AT RS. 3900/- WAS UNDER VALUE AND THE ACTUAL PRICE WAS RS. 6554/- PER SHARE . THIS CONCLUSION WAS BASED ON DOCUMENTS SEIZED IN TH E COURSE OF SEARCH FROM THE RESIDENCE OF ANOTHER ASSE SSEE SHRI SURINDER GULATI WHOSE STATEMENT WAS ALSO RECOR DED UNDER SECTION 132(4) OF THE ACT. THE ASSESSING OFF ICER HAD ALSO RELIED ON A DOCUMENT FOUND IN THE OFFICE 4 PREMISES OF M/S VTC TRANSPORT TO DEDUCE THAT NIRMAN THEATER WAS PURCHASED FOR RS. 40 CRORES COMPRISING OF CASH AND CHEQUES COMPONENTS OF RS. 20 CRORES EACH. CONSEQUENTLY, PRICE OF EACH SHARE WAS HELD TO BE RS . 6554/- INSTEAD OF RS. 3900/- SO DECLARED AND THE DIFFERENCE IN CONSIDERATION OF RS. 4.58 CR WAS ADDE D UNDER SECTION 69B OF THE ACT BY THE ASSESSING OFFIC ER. 4(I) THE LD. CIT(APPEALS) NOTED THAT IN SIMILAR GRO UP OF CASES, HE HAS DECIDED THE APPEALS AND DELETED THE ADDITION. HE HAS REFERRED TO APPELLATE ORDER OF TH E LD. CIT(APPEALS) IN THE CASE OF SHRI ASHISH SINGLA DATE D 07.11.2013 AND REPRODUCED THE ENTIRE ORDER AND DELE TED ENTIRE ADDITION. HIS FINDINGS AT PAGE 9 AND 10 OF THE ORDER ARE REPRODUCED AS UNDER : THE CIT(A)-I, LDH HAVING CONSIDERED ALL THE EVIDENCE S RELIED UPON BY THE AO AND AFTER ANALYZING THE SAME, DELETED THE A DDITIONS IN THE HANDS OF THE PURCHASERS. THE CASES OF THE SELLE RS OF THE SHARES OF THE COMPANY, THE CHADHAS AND GULATIS, ASSES SED BY DCIT, CENTRAL CIRCLE II, CHANDIGARH, STANDS DISPOSED TOO. THE BASIS FOR DEDUCING THE RATE PER SHARE AT RS.6,554 /- IS BASED SOLELY ON THE NOTINGS ON THE REVERSE OF PAGE 3 OF A-5 SEIZED FROM THE RESIDENCE OF SHRI SURINDER GULATI WHICH AO HELD DEPICTED THE ACTUAL SALE PROCEEDS AND UTILIZAT ION THEREOF FOR RS.2,13,54,281/-. HOWEVER NO EVIDENCE OF PURCHASE OF AND BY THE GULATIS NOR INVESTMENT IN GSC {GULATI SAREE CENTRE) HAS BEEN BROUGHT ON RECORD NOR THE NOTING REGARDING BAN K BALANCE RS.31,861/-. THE REFERENCE TO PAGE NO 23 OF A-L FOUND FROM THE OFFICE PREMISES OF M/S VTC TRANSPORT PVT. LTD. DOES NOT HELP IN CLINCHING THE ISSUE EITHER AS THE ACTUAL TOTAL CONS IDERATION WOULD BE RS.40 CRORES INSTEAD OF THE ESTIMATED RS.32 CRORES. NEEDLESS TO SAY, A DIFFERENT VIEW CANNOT BE TAKEN ON THE SAME S ET OF FACTS 5 AND EVIDENCES FOR THE VERY SAME TRANSACTION. HENCE, RESPECTFULLY FOLLOWING THE DECISION OF THE CIT(A)-1, LDH, AND APPELLATE ORDERS PASSED BY ME IN THE CASE OF THE SEL LERS OF THE SHARES I.E. THE CHADHA AND GULATI FAMILIES, I DELETE THE ADDITION IN QUESTION IN THE HANDS OF THE PURCHASER-ASSESSEE. A SSESSEE THEREFORE SUCCEEDS IN THIS GROUND OF APPEAL. 5. THE LD. COUNSEL FOR THE ASSESSEE, AT THE OUTSET SUBMITTED THAT THE DEPARTMENTAL APPEALS IN THE CASE S OF DCIT VS ASHISH SINGLA, NARAIN SINGLA, NARAIN SINGLA , HUF AND MADAN LAL GULATI HAVE BEEN DISMISSED BY ITA T CHANDIGARH BENCH IN ITA NO. 129/CHD/2014 ETC. FOR ASSESSMENT YEAR 2006-07 DATED 15.02.2016. THE FINDINGS IN PARAS 4 TO 17 ARE REPRODUCED AS UNDER : 4. THIS DEPARTMENTAL APPEAL HAS BEEN DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS)-I LUDHIANA DATED 07.11.2013 FOR ASSESSMENT YEAR 2006-07 CHALLENGING THE DELETION OF ADDITION OF RS. 50,46,200/-. 5. BRIEFLY THE FACTS OF THE CASE ARE THAT ORIGINAL RETURN WAS FILED DECLARING AN INCOME OF RS. 1,08,880/-. THEREAFTER THE SEARCH UNDER SECTION 13 2 OF THE INCOME TAX ACT WAS CONDUCTED AT THE RESIDENTIAL PREMISES OF SHRI ASHISH SINGLA (ASSESSEE) AND HIS FAMILY MEMBERS ON 30.06.2010. NOTICE UNDER SECTION 153A WAS ISSUED AND ASSESSEE FILED THE RETURN OF INCOME DECLARING THE SAME INCOM E AS WAS DECLARED IN THE ORIGINAL RETURN OF INCOME. THE ASSESSING OFFICER ISSUED STATUTORY NOTICE TO TH E ASSESSEE AND ALSO SUPPLIED COPIES OF THE SEIZED MATERIAL. THE ASSESSEE IS AN INDIVIDUAL AND IS HAVING INCOME UNDER THE HEAD 'INCOME FROM OTHER 6 SOURCES' AND LONG TERM CAPITAL GAIN. IT IS STAT ED THAT ASSESSEE IS NOT MAINTAINING ANY PERSONAL BOOKS OF ACCOUNT, HENCE, ARE NOT PRODUCED. 6. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED THAT ASSESSEE PURCHASED SHARES OF M/S PRAGATI NIRMAN P. LTD. (PNPL). THE ASSESSEE WAS ASKED TO FILE NUMBER OF SHARES AND SOURCE FOR THE PURCHASE. ON PERUSAL OF THE REPLY, IT CAME TO THE NOTICE THAT ASSESSEE HAD PURCHASED 1900 SHARES OF PNPL CHANDIGARH FROM SH HARMOHINDER SINGH CHADHA. SEARCH & SEIZURE OPERATIONS WERE ALSO CARRIED OUT BY THE DEPARTMENT AT THE BUSINESS AND RESIDENTIAL PREMISES OF SHRI HARMOHINDER SINGH CHADHA. DURING THE COURSE OF SEARCH, SOME INCRIMINATING DOCUMENTS WERE FOUND AND SEIZED FROM THE RESIDENTIAL PREMISES OF SHRI SURINDER GULATI, MARKED AS A-2, A-5. THESE DOCUMENTS WERE CONFRONTED TO THE ASSESSEE AND THE PAGE 5 OF THE DOCUMENT NO. A-5 DEPICTS THAT TOTAL NUMBER OF 3258 SHARES WERE HELD BY SHRI MUNSHI RAM GULATI AND SHRI BALDEV RAJ GULATI AND THEIR FAMILY MEMBERS. THIS FACT IS ALSO CORROBORATED BY ENTRIES RECORDED ON BACK-SIDE OF PAGE NO. 34 OF A-2 FOUND FROM THE RESIDENCE OF SHRI SURINDER GULATI IN THE COURSE OF SEARCH OPERATION. 6(I) SIMILARLY, BACKSIDE OF PAGE 3 OF DOCUMENT NO. A-5 DEPICTS THE ACTUAL SALE PROCEEDS ON ACCOUNT OF SHARES OF PNPL. FROM THE SAID DOCUMENT, IT WAS SEEN THAT SALES OF 3258 SHARES OF PNPL WERE MADE AT RS. 2,13,54,281/-. IF THE SALE PROCEEDS OF RS.2.13 CR IS DIVIDED BY 3258, THE SALE PRICE OF EA CH SHARE COMES TO RS. 6554/-. THE SAME DOCUMENT WAS CONFRONTED TO THE ASSESSEE AND HE WAS REQUESTED TO SHOW CAUSE AS TO WHY THE RATE OF RS. 6554/- PER SHARE SHOULD NOT BE APPLIED AGAINST THE RATE OF PER 7 SHARE OF RS. 3900/-SHOWN BY THE ASSESSEE AND ASSESSED IN THE CASES OF GULATI FAMILY BY THE DCIT, CENTRAL CIRCLE-I, CHANDIGARH IN ASSESSMENT UNDER SECTION 153A OF THE INCOME TAX ACT. 7. THE ASSESSEE SUBMITTED BEFORE ASSESSING OFFICER THAT HE HAS PURCHASED 1900 SHARES OF M/S PNPL CHANDIGARH FROM SHRI HARMOHINDER CHADHA FOR A CONSIDERATION OF RS. 74,10,000/- AND PAID THE AMOUNT THROUGH DD DRAWN ON ORIENTAL BANK OF COMMERCE, CHANDIGARH @ RS. 3900/- PER SHARE. THE SOURCE OF THE SAME WAS ALSO EXPLAINED AND PROOF OF THE SAME IS PROVIDED WHICH IS VERIFIED. HOWEVER, A S REGARDS TREATING THE SHARE PRICE AT RS. 6554/- PER SHARE, IT WAS SUBMITTED THAT SAID DOCUMENT WAS FOUND FROM THE RESIDENCE OF SHRI SURINDER GULATI AN D HIS STATEMENT WAS RECORDED. IT IS, THEREFORE, CLEA R THAT NAME OF ASSESSEE IS NOT MENTIONED ANYWHERE IN THE DOCUMENT TO PROVE THE RECEIPT OF CONSIDERATION IN CASH FROM THE ASSESSEE. IT IS PERTINENT TO MENTION THAT IN THE STATEMENT OF SHRI SURINDER GULATI, IT I S CLEARLY ADMITTED THAT HE SOLD THE SHARES OF M/S PNPL AT RS. 3900/- PER SHARE AND NO EXTRA CONSIDERATION WAS RECEIVED. SINCE DOCUMENT IS RECOVERED FROM THE THIRD PARTY, THEREFORE, IT COULD NOT BE ADVERSE IN NATURE AGAINST THE ASSESSEE. FURTHER, DURING THE COURSE OF SEARCH OPERATION, NO ADVERSE DOCUMENT WAS FOUND AGAINST THE ASSESSEE OR FROM THE POSSESSION OF THE ASSESSEE TO PROVE PAYMENT OF ANY AMOUNT IN EXCESS OF RS. 3900/- PER SHARE. THEREFORE, IN THE ABSENCE OF RECOVERY OF AN Y ADVERSE MATERIAL AGAINST ASSESSEE, NO ADDITION CAN BE MADE. THE ASSESSING OFFICER, HOWEVER, DID NOT ACCEPT CONTENTION OF THE ASSESSEE AND APPLIED THE RATE OF RS. 6554/- PER SHARE INSTEAD OF RS. 3900/- AND MADE ADDITION OF RS. 50,46,200/-. 8 8. THE ADDITION WAS CHALLENGED BEFORE LD. CIT(APPEALS). THE ASSESSEE FILED WRITTEN SUBMISSIO N WHICH IS QUOTED IN THE IMPUGNED ORDER IN WHICH THE ASSESSEE BRIEFLY REITERATED THE SAME FACTS AS WERE PLEADED BEFORE ASSESSING OFFICER. IT WAS BRIEFLY EXPLAINED THAT ASSESSING OFFICER ADOPTED THE RATE O F RS. 6554/- WITHOUT BASIS. THE ASSESSEE DID NOT PURCHASE ANY SHARE FROM SHRI SURINDER KUMAR GULATI FROM WHOSE POSSESSION THE SEIZED DOCUMENTS WERE RECOVERED. NO CORROBORATIVE EVIDENCE HAS BEEN FILE D TO SUPPORT FINDINGS OF THE ASSESSING OFFICER. NO DOCUMENT OR PAPER WAS FOUND FROM THE RESIDENCE OF SHRI HARMOHIDNER SINGH CHADHA, CHANDIGARH TO PROVE ANY PAYMENT MORE THAN WHAT IS DISCLOSED BY THE ASSESSEE. THE DOCUMENT FOUND FROM THE POSSESSION OF SHRI SURINDER KUMAR GULATI IS NOT RELEVANT AGAINST THE ASSESSEE. EVEN THE SEIZED PAPER SHOWS THAT SALE CONSIDERATION WAS RS. 3900/- PER SHARE. THE STATEMENT OF SHRI SURINDER GULATI WOULD NOT BE ADVERSE IN NATURE AGAINST THE ASSESSEE. NO VALID REASONS HAVE BEEN EXPLAINED FOR MAKING ANY ADDITION AGAINST THE ASSESSEE. SHRI SURINDER KUMAR GULATI IS NOT RELATED TO THE ASSESSE E AND ASSESSEE HAS NO LINK WITH ANY NOTINGS MADE BY HIM OR FOUND FROM THE PAPERS RECOVERED FROM HIS POSSESSION. THERE WERE NO BASIS TO MAKE ANY ADDITION AGAINST THE ASSESSEE. THE ASSESSEE ADOPTED FAIR MARKET VALUE. SINCE NO DOCUMENT OR EVIDENCE WAS FOUND FROM THE PREMISES OF THE ASSESSEE OR TO SUGGEST PAYMENT HAVING BEEN MADE BY THE ASSESSEE, ADDITION IS WHOLLY UNJUSTIFIED. SHRI SURINDER GULATI HAD ALREADY OFFERED RS. 80 LAC S IN ASSESSMENT YEAR 2006-07, THEREFORE, NOTHING COULD BE ATTRACTED AGAINST THE ASSESSEE AND DEPARTMENT FAILED TO CONNECT THE ASSESSEE WITH THE SEIZED DOCUMENT. NO EVIDENCE OF ANY EXTRA CONSIDERATION HAVE BEEN FOUND IN SEARCH. THE 9 ASSESSEE ALSO FILED ADDITIONAL SUBMISSIONS IN WHICH IT WAS EXPLAINED THAT THE ASSESSEE HAD PURCHASED THE SHARES OF M/S PNPL, CHANDIGARH WHICH IS RUNNING CINEMA HALL AND THE LAND HAS BEEN PURCHASED BY THE COMPANY ON LEASE-HOLD BASIS IN OPEN MARKET FOR A CONSIDERATION OF RS. 83,83,000/- ON WHICH EVERY YEAR, LEASE MONEY IS ALSO PAID. THERE IS FURTHER CLAUSE IN THE LEASE AGREEMENT, WHE N PROPERTY WOULD BE SOLD, 50% ON EARNED INCREASE WOULD HAVE TO BE PAID TO THE ESTATE OFFICER. THEREFORE, IT HAS NO SUCH VALUE AS HAVE BEEN ADOPTED BY THE ASSESSING OFFICER. THE ASSESSEE ALSO SUBMITTED THAT THERE IS ANOTHER THEATRE KNOWN AS JAGAT THEATRE IN CHANDIGARH WHICH WAS ALSO RUNNING IN LOSS AND SOLD ON 11.11.2005 FOR A CONSIDERATION OF RS. 12 CRORES AS PER THE SALE DEED . THE ASSESSEE RELIED UPON CERTAIN DECISIONS IN SUPPORT OF THE CONTENTION THAT ADDITION IS UNJUSTIFIED. IT WAS, THEREFORE, SUBMITTED THAT SIN CE NO MATERIAL IS RECOVERED AGAINST ASSESSEE, ADDITION IS UNJUSTIFIED. THE SUBMISSIONS OF THE ASSESSEE WERE REFERRED TO THE ASSESSING OFFICER FOR FILING T HE COMMENTS WHICH ARE ALSO REPRODUCED IN THE APPELLATE ORDER ON WHICH ASSESSEE ALSO FILED REJOINDER. 8(I) THE LD. CIT(APPEALS), CONSIDERING SUBMISSIONS OF BOTH THE PARTIES AND MATERIAL ON RECORD, DELETED THE ENTIRE ADDITION. HIS FINDINGS IN PARA 9 TO 18 OF THE APPELLATE ORDER ARE REPRODUCED AS UNDER : 9. I HAVE CONSIDERED THE BASIS OF ADDITION MADE BY THE ASSESSING OFFICER, THE ARGUMENTS OF THE AR ON THE ISSUE DURIN G ASSESSMENT AS WELL AS APPELLATE PROCEEDINGS, THE COMMENTS OF THE ASSESSING OFFICER IN-THE REMAND REPORT AND THE REJOINDER OF T HE AR ON THE SAME. IT IS SEEN THAT THE ASSESSING OFFICER HAS BASED HIS CO NCLUSION ENTIRELY ON THE CONCLUSION OF THE ASSESSING OFFICER OF SH. S URINDER KUMAR 10 GULATI ASSESSING THE SALE CONSIDERATION AT RS.6554/ - PER SHARE. THE ASSESSEE ON BEING CONFRONTED WITH THE PROPOSED ADDI TION IN HIS OWN CASE FILED DETAILED EXPLANATION AS TO HOW THE SAME COULD NOT BE DONE IN HIS CASE. THE ASSESSING OFFICER WHILE MAKING ADD ITION UNDER SECTION 69B HAS NOT RECORDED AS TO HOW THE ASSESSEE 'S EXPLANATION WAS NOT ACCEPTABLE. THE ASSESSING OFFICER HAS JUST PROC EEDED TO CONCLUDE ADVERSELY WITHOUT REJECTING THE EXPLANATION OF THE ASSESSEE ON THE BASIS OF SOME LOGICAL REASONING. THE DECISION OF HON'BLE JURISDICTIONAL BENCH OF IT AT IN THE CASE OF NEENA SYAL VS ACIT 69 TTJ 516 IS EXTREMELY RELEVANT AS IT HIGHLIGHTS THE REQUIREMENT TO BE FUL FILLED BEFORE MAKING ADDITION UNDER SECTION 69. THE SPECIFIC OBSERVATION S OF THE HON'BLE BENCH ARE AS UNDER : 'SEARCH AND SEIZURE BLOCK ASSESSMENT COMPUTATION OF UNDISCLOSED INCOME ADDITION OF PREMIUM ALLEGEDLY P AID OVER AND ABOVE THE COST OF PLOT MENTIONED IN THE REGISTE RED DEED SEIZED DOCUMENTS ON THE BASIS OF WHICH THE IMPUGNED ADDITION WERE MADE NOT FOUND AT THE RESIDENCE OF THE ASSESSE E BUT AT THE RESIDENCE OF A THIRD PARTY SAME HAVE NOT BEEN SPEC IFICALLY CONFRONTED TO THE ASSESSEE BEFORE MAKING THE ADDITI ON EXPLANATION GIVEN BY ASSESSEE NOT CONTROVERTED BY A OAO HAS NOT GIVEN ANY REASON FOR EITHER NOT ACCEPTING THE E XPLANATION OF THE ASSESSEE OR FOR FINDING THE EXPLANATION AS UNSATISFACTORY THUS, AO DID NOT COMPLY WITH THE CO NDITIONS STIPULATED IN S. 69 ADDITION DELETED REMAND OF TH E CASE NOT CALLED FOR POWER OF REMAND UNDER S. 254 IS REQUIRE D TO BE EXERCISED IN A DISCIPLINED AND RESPONSIBLE MANNER SAME CANNOT BE INVOKED IN A CASE WHERE AO HAS NOT CARED TO FOLL OW THE BASIC PROVISIONS OF S, 69/69B.' HOWEVER, THE FACTS OF THE CASE GET MORE CLEAR FROM PERUSAL OF THE SUBMISSIONS OF THE APPELLANT DURING APPELLATE PROCE EDINGS. THE CASE OF THE ASSESSING OFFICER IS THAT CERTAIN DOCUM ENTS MARKED AS PAGE NO. 33, 34 AND 35 OF ANNEXURE A-2 AND PAGE NO. 3 AND 4 OF ANNEXURE A-5 SEIZED FROM THE RESIDENCE OF SH. SURIN DER KUMAR GULATI RECORDED THE DETAILS PERTAINING TO TRANSACTI ON OF SALE OF 11 SHARES BY SH. SURINDER KUMAR GULATI. IT IS SEEN THA T PAGE NO. 33, 34 AND PAGE NO. 35 F ANNEXURE A-2 RECORDS THE FOLL OWING :- 'THIS DOCUMENT IS IN THE HANDWRITING OF SH, S.K. GULATI, WHICH MENTIONS THE NAMES OF FAMILY MEMBERS OF MR. SURINDER KUMAR GULATI, NAMELY SH. MUNSHI RAM GULATI AND SH. BATDEV RAJ GULATI AND AGAINST THEIR NAMES, NUMBER OF SHARES HAVE BEEN MENTIONED AND AT THE BACK PAGE OF 29 OF THE SAME ANNEXURE AND THE VALUE OF TOTAL SHARES @ RS. 3900/- PER SHARE HA VE BEEN CALCULATED AND THE AMOUNT BY APPLYING THAT RAT E HAS BEEN CALCULATED/MENTIONED AND THIS PROVES THE CONSIDERATION OF RS.3900/- PER SHARE. THIS PAGE AGAIN RECORDS THE SHARES WHICH WERE HELD BY THE FAMILY OF SH. MUNSHI RAM GULATI AND SH. BALDEV RAJ GULATI AND, THEN, IT ALSO RECORDS THE DETAIL OF CHEQUES RECEIVED BY EACH OF THE FAMILY MEMBERS OF 'GULATI FAMILY' AND RATE HAS ALSO BEEN M ENTIONED ALONGWITH THE TOTAL NUMBER OF SHARES AND VALUE OF E ACH SHARE RECEIVED BY THEM @ RS. 3900/- PER SHARE. THIS ALSO PROVES THAT NO EXTRA CONSIDERATION WAS RECEIVED BY THEM AND AT THE END OF THAT RATE THE TOTAL AMOUNT OF SHARES AT RS.1,34,30,825/- HAS BEEN MENTIONED. THIS PAGE AGAIN RECORDS THE DETAIL OF AMOUNT RECEIV ED BY CHEQUES AND WHICH ARE NOT DISPUTED AT ALL AND, THERE IS NO MENTION OF ANY EXTRA CONSIDERATION.' FURTHER PAGE NO.3 AND 4 OF ANNEXURE A-5 CONTAINS T HE FOLLOWING:- 'FROM PNP MRG- 1,15,24,240 BRG- 90,30,041(INCL. 724,625 OF BRG PERSONAL) 2,13,54,281 TO LAND 19822420 GSC 1500000 BACK SIDE 31861 213542 81' 12 10. THE AUTHORISED OFFICER AT THE RESIDENCE OF SH. SURINDER KUMAR GULATI CONFRONTED THE SAID DOCUMENTS TO HIM A ND RECORDED HIS STATEMENT WITH REFERENCE TO THE SAME. IT IS SEE N THAT THE AUTHORISED OFFICER POSED A SPECIFIC LEADING QUESTIO N TO SH. SURINDER KUMAR GULATI IN THE FOLLOWING MANNER:- 'DURING THE SEARCH PROCEEDINGS AT YOUR RESIDENCE A DIARY BLUE DIARY MARKED AS THE RAYMOND SHAPE SEIZED AS ANNEXURE A5 WAS EXAMINED IN DETAIL. THIS DIARY IS I N YOUR HAND WRITING AND ON BACKSIDE OF PAGE 3 AND ON THE LEFT LAND SIDE OF PAGE 4, THERE ARE NOTINGS WRITTEN BY YOUR. THESE NOTINGS RELATE TO PAYMENTS RECEIVED BY YOU FROM PNP (PRAGATI NIRMAL PVT. LTD.) SALE. THE NOTIN GS ARE : FROM PNP MRG 1,15,24,240 BRG 90.30.041(INCL. 724,625 OF BRG PERS ONAL) 2,13,54,281 AS PER YOU THERE ARE THE PAYMENTS RECEIVED BY YOU F ROM THE SALE OF THE COMPANY SHARES 'PRAGATI NIRMAN PVT. LTD.'AS PER THE DETAIL THE TOTAL PAYMENTS RECOVERED BY YOU FROM SALE OF SH ARES IN PNP IS RS. 20629656 (AFTER EXCLUDING RS. 724625). AS PER P AGES 34 OF ANNEXURE A2 THE TOTAL SHARES OF MRG I.E. YOUR FAMIL Y AND BRG I.E. YOUR CHACHAJIS FAMILY ARE 3258, THE PAGE 34 OF A2 ALSO GIVES DETAILS OF PAYMENTS RECEIVED BY YOU BY CHEQUE @ 390 0/- PER SHARE. HOWEVER, WHEN 20629656 IS DIVIDED BY 3258 TH E VALUE OF SALE CONSIDERATION RECEIVED BY YOU PER SHARE COMES TO BE RS. 6332/-. WHAT DO YOU HAVE TO SAY IN THIS REGARD?' SH. SURINDER KUMAR GULATI REPLIED TO THIS QUESTION AS UNDER:- 'I HAVE GONE THROUGH THE CONTENTS OF THE DIARY AND ADMIT THAT THE PAGE HAS BEEN WRITTEN BY ME. THESE ARE ESTIMATES. B UT THE ACTUAL REMEDIES THAT WE HAVE RECEIVED MONEY @ RS, 3900/- P ER SHARE. WE WERE EXPERTLY THIS FIGURE,' 13 11. THE AUTHORIZED OFFICER FURTHER PRESSED WITH THE PROPOSITION OF TOTAL SALE CONSIDERATION BEING RS.32 CRORES RATHER THAN 19.5 CRORES AS UNDER- AS PER THE SHARE RATE OF RS. 3900/- PER SHARE THE SALE CONSIDERATION OF 'NIRMAN THEATRE' (PROPERTY OF THE COMPANY PRAGATI NIRMAN PVT. LTD.) COMES TO RS. 19.5 CRORES. THIS WAY BELOW THE MARKET VALUE OF THE PRIM E PROPERTY 'NIRNAM THEATRE' AND MARKET ENQUIRIES HAVE REVEALED THAT THE THEATRE WAS SOLD FOR APPROX. RS. 32 CRORES. WHAT DO YOU HAVE TO SAY IN THIS REGARD ? SH. SURINDER KUMAR GULATI REPLIED TO THIS QUESTION AS UNDER:- 'THE THEATRE HAD BEEN SOLD FOR RS. 19.5 CRORES BECA USE THE PROPERTY WAS HELD/OWNED BY QUITE A NUMBER OF SHARE HOLDERS WITH CONFLICTING INTERESTS.' 12. IT IS THEREFORE SEEN THAT THE ASSESSING OFF ICER HAS PLACED RELIANCE EXCLUSIVELY ON THE RECORDINGS MADE AT PAGE NO. 3 AND 4 OF ANNEXURE A-5 WHICH ARE RATHER CRYPTIC AND DEVOID OF DETAILS AS AGAINST EXPLICIT AND DETAILED DESCRIPTION OF SALE T RANSACTION RECORDED AT PAGE NO. 33,34 AND 35 OF ANNEXURE A-2 B Y SHRI SURINDER KUMAR GULATI. IT IS ON THE BASIS OF THIS I NTERPRETATION OF THE SEIZED DOCUMENT DETAILED ABOVE THAT THE TOTAL S ALE CONSIDERATION HAD BEEN WORKED OUT AT RS. 32 CRORES WHICH HAS BEEN TAKEN AS THE BASIS BY THE ASSESSING OFFICER OF THE APPELLANT TO MAKE THE IMPUGNED ADDITION BY TREATING THE SALE CONSIDERATION AT RS, 6554/- PER SHARE RATHER THAN RS.3900 PER SHA RE. THIS MEANS THAT THE INTERPRETATION OF PART OF THE SEIZED RECOR D REFERRED TO ABOVE IN THE CASE OF SH. SURINDER KUMAR GULATI BY H IS ASSESSING OFFICER HAS BEEN TAKEN TO MAKE A FURTHER PRESUMPTIO N THAT THE OTHER CO-OWNERS ESPECIALLY SH. HARMOHINDER SINGH CH ADHA WOULD HAVE ALSO SOLD HIS SHARE TO THE APPELLANT AT THE SA ID RATE OF RS. 6554/-. THIS IS AGAINST THE BACKGROUND THAT THE APP ELLANT AS WELL AS THE SELLER OF SHARES I.E SH. HARMOHINDER SINGH C HADHA WERE SUBJECTED TO SEARCH PROCEEDINGS AND NOTHING TO EVID ENCE SUCH TRANSFER OF UNACCOUNTED SALE CONSIDERATION HAD BEEN FOUND IN THEIR CASES. THE ISSUE THEREFORE IS AS TO WHETHER T HE EVIDENCE RELIED UPON BY THE ASSESSING OFFICER OF SH. SURINDE R KUMAR GULATI COULD BE SUFFICIENT TO BASE A FURTHER PRESUMPTION I N THE CASE OF THE 14 REST OF THE SELLERS AND BUYERS WARRANTING ADDITIONS THEREOF. I AM OF THE VIEW THAT THE EVIDENCE FOUND FROM THE PREMIS ES OF SH. SURINDER KUMAR GULATI IS RATHER CRYPTIC AND ITS INT ERPRETATION ESPECIALLY IN THE FACE OF DENIAL BY SH. SURINDER KU MAR GULATI DURING THE COURSE OF HIS STATEMENT AT THE TIME OF S EARCH MAKES IT TOO WEAK TO BE TAKEN AS AN EVIDENCE IN THE CASE OF THE APPELLANT. IT IS ALSO TO BE APPRECIATED THAT SH. SURINDER KUMAR G ULATI HAD EXPLAINED EACH AND EVERY PAGE AS SEIZED FROM HIS RE SIDENCE AND WITH REGARD TO THE RECORDINGS ON PAGE NO. 3 AND 4 O F ANNEXURE A- 2 HE HAD MADE A DISCLOSURE OF RS. 80 LACS ESPECIALL Y IN THE ASSESSMENT YEAR 2011-12 WHICH WAS LATER ON REVISED TO BE CONSIDERED FOR ASSESSMENT YEAR 2006-07 AS THE RECOR DINGS PERTAINED TO THE SAID ASSESSMENT YEAR ONLY AND THE SAID OFFER WAS ACCEPTED BY THE ASSESSING OFFICER OF SH. SURINDER K UMAR GULATI WHILE FRAMING THE ASSESSMENT FOR ASSESSMENT YEAR 20 11-12 . THIS IS TO MEAN THAT NO ADDITION FOR THE SAID DISCLOSURE OF RS. 80 LACS IN THE ASSESSMENT YEAR 2011-12 HAS BEEN MADE. THIS IS TO MEAN THAT THE ASSESSEE I.E. SH. SURINDER KUMAR GULATI HA D EXPLAINED THE CONTENTS OF SEIZED DOCUMENT AND MADE APPROPRIATE DI SCLOSURE OF RS. 80 LACS TO BE CONSIDERED IN ASSESSMENT YEAR 200 6-07 INSTEAD OF ASSESSMENT YEAR 2011-12 AND THE SAID DISCLOSURE WAS NOT ON ACCOUNT OF EXCESS SALE CONSIDERATION. THE ASSESSING OFFICER OF SH. SURINDER KUMAR GULATI HAS INFACT ACCEPTED THE REVIS ED DISCLOSURE OF RS. 80 LACS IN ASSESSMENT YEAR 2006-07 REPRESENT ING THE TRANSACTIONS NOTED IN IMPUGNED SEIZED PAPERS BUT AT THE SAME TIME SAME PAPERS HAVE BEEN USED TO MAKE ANOTHER ADDITION I.E. TO MAKE EXCESS SALE CONSIDERATION I.E. ON ACCOUNT OF TRANSF ER OF SHARES. 13. THE AR OF THE APPELLANT HAD FURTHER FILED SUBMI SSIONS DURING THE COURSE OF APPELLATE PROCEEDINGS TO SHOW AS TO H OW THE SALE CONSIDERATION WORKED OUT AT RS. 32 CRORE OF THE PRO PERTY OWNED BY PRAGATI NIRMAN PVT. LTD BY THE AUTHORISED OFFICER A S WELL AS THE ASSESSING OFFICER OF SH.SURINDER KUMAR GULATI WAS I NCORRECT AS A BETTER PROPERTY IN THE FORM OF JAGAT THEATERS LOCAT ED AT SECTOR 17, CHANDIGARH HAD BEEN SOLD DURING THE SAME FINANCIAL YEAR FOR A CONSIDERATION OF RS. 12 CRORE. THE ASSESSING OFFICE R ON BEING ASKED TO OFFER HIS COMMENTS ON THE SAME MERELY STAT ED THAT THE TWO CASES WERE NOT COMPARABLE. THE ASSESSEE TO SUPPORT HIS CLAIM HAD 15 INFACT FILED COPY OF THE REGISTRATION DEED EVIDENCI NG SALE CONSIDERATION OF RS. 12 CRORE ESPECIALLY WHEN JAGAT THEATRE WAS A FREEHOLD PROPERTY AS AGAINST THE PROPERTY OWNED BY THE CO-OWNERS IN THIS CASE BEING A LEASEHOLD. .FURTHER THE LOCATI ON OF JAGAT THEATRE IN SECTOR 17 IS DEFINITELY MUCH MORE ATTRAC TIVE FROM COMMERCIAL POINT OF VIEW IN COMPARISON TO LOCATION OF PROPERTY OWNED BY M/S PRAGATI NIRMAN PVT LTD. THEREFORE THE CLAIM OF THE APPELLANT THAT THE ASSUMPTION OF THE PROPERTY BEING TRANSACTED AT A PRICE OF RS.32 CRORE BEING FARFETCHED, IS ACCEPTA BLE. THIS FACT IS IN DIRECT CONTRADICTION TO THE OBSERVATION OF THE A UTHORISED OFFICER AT THE TIME OF THE SEARCH OPERATION THAT MA RKET PRICE OF THE PROPERTY OF M/S PRAGATI NIRMAN PVT. LTD WAS ABOUT R S. 32 CRORES AND WAS NOT BACKED BY ANY DOCUMENTARY EVIDENCE BUT ONLY ON THE BASIS OF HEARSAY. HERE IT IS IMPORTANT TO CONSIDER THE FACTS OF THE CASE IN THE LIGHT OF JUDICIAL PRONOUNCEMENTS IN SIM ILAR CASES WHEREIN THE DOCUMENTS RELIED UPON BY THE ASSESSING OFFICER HAD BEEN SEIZED IN THE CASE OF THIRD PARTIES. THE DOCUM ENTS TO BE RELIED UPON HAVE TO BE EXTREMELY CLEARLY SPECIFIC A ND DESCRIPTIVE ENOUGH TO ESTABLISH THE FACTUM OF PASSING ON OF UNA CCOUNTED SALE CONSIDERATION FOR TRANSFER OF PROPERTY IN QUESTION. AS I HAVE ALREADY OBSERVED THAT THE DOCUMENTS RELIED UPON IN THE CASE OF SH. SURINDER KUMAR GULATI ARE NOT CLEAR AND DESCRIPTIVE ENOUGH TO BE TAKEN AS A RELIABLE BASIS TO MAKE A CONSEQUENTIAL L OGICAL PRESUMPTION IN THE CASE OF THE APPELLANT FROM WHOM NO SUCH DOCUMENT HAD BEEN SEIZED. THE DOCUMENTS SEIZED IN T HE CASE OF SH.SURINDER KUMAR GULATI ONLY CREATE A DOUBT OR SUS PICION WHICH CANNOT TAKE THE PLACE OF EVIDENCE AS HAS BEEN HELD IN THE CATENA OF JUDGMENTS, SOME OF WHICH ARE AS UNDER:- DCITVS. D.N. KAMANI (HUF) 70 ITD (PATNA- TRIB) 77 COMMISSIONER OF INCOME TAX VS. RAM NARAIN 224 ITR 180 (P&H) ELITE DEVELOPERS VS. DY. COMMISSIONER OF INCOME TAX 73 ITD (NAGPUR-TRIB) 379 16 MONGA METALS PVT LTD. VS. ACIT 67 TTJ (ALL) 247 JCIT VS. GRAMOPHONE COMPANY OF INDIA LTD. 265 ITR (KOL-TRIB) 46 (AT) 14. THE CASE OF AMARJIT SINGH BAKSHI (HUF) VS A CIT IS ON SIMILAR FACTS AS IS CLEAR FROM THE FOLLOWING HEADNO TE. 'SEARCH AND SEIZUREBLOCK ASSESSMENTCOMPUTATION OF UNDISCLOSED INCOMEADDITION UNDER S. 69BA LOOSE SH EET, PURPORTING TO BE AN AGREEMENT, PARTLY WRITTEN IN PE NCIL AND PARTLY IN PEN, FOUND DURING SEARCH OF THE PREMISES OF 'N' SAID DOCUMENT REVEALED THAT AGRICULTURAL LAND WAS S OLD BY N' TO ASSESSEE (ASB) AT A CONSIDERATION MUCH HIGHE R THAN THAT DECLARED BY ASBAO, IN REGULAR ASSESSMENT OF ASSESSEE ASB(HUF) ON PROTECTIVE BASIS, MADE ADDITIO N OF THE DIFFERENCE AND IN BLOCK ASSESSMENT OF ASB (INDI VIDUAL), MADE AN ADDITION OF RS. 6.8 CRORES AS UNDISCLOSED INVESTMENTADDITION NOT JUSTIFIEDSUCH A DOCUMENT C OULD NOT BE SAID TO BE AN 'AGREEMENT' NOR A 'DUMB DOCUME NT' 'N HAVING CHANGED HIS STAND AND RETRACTED HIS STAT EMENT AT VARIOUS LEVELS, HIS TESTIMONY COULD NOT BE SAID TO BE RELIABLEFURTHER, THE DOCUMENT IN QUESTION WAS NOT RECOVERED FROM THE POSSESSION OF ASSESSEE AND ASSES SEE WAS NOT GIVEN ANY OPPORTUNITY TO CROSS-EXAMINE 'N' IN THE ABSENCE OF ANY RELIABLE EVIDENCE, NO ADDITION COULD BE MADE.' 15. FURTHER THE DECISION OF HON'BLE JURISDICTIONAL BENCH OF ITAT IN THE CASE OF NEENA SYAL VS ASSISTANT COMMISS IONER OF INCOME TAX 69 TTJ (CHD-TRIB) 516 IS ALSO ON SIMILA R ISSUE AS IS CLEAR FROM FOLLOWING HEAD NOTE : 'SEARCH AND SEIZUREBLOCK ASSESSMENTCOMPUTATION OF UNDISCLOSED INCOMEADDITION OF PREMIUM ALLEGEDLY PAID OVER AND ABOVE THE COST OF PLOT MENTIONED IN T HE REGISTERED DEEDSEIZED DOCUMENTS ON THE BASIS OF WHICH THE IMPUGNED ADDITION WERE MADE NOT FOUND AT THE RESIDENCE OF THE ASSESSEE BUT AT THE RESIDENCE OF A THIRD PARTYSAME HAVE NOT BEEN SPECIFICALLY CONFRONTED TO THE ASSESSEE BEFORE MAKING THE ADDITIONEXPLANATION GIVEN BY ASSESSEE NOT CONTROVERTED BY AOAO HAS NOT GIVEN ANY REASON FOR EITHER NOT ACCEPTING THE EXPLANATION OF THE ASSESSE E OR 17 FOR FINDING THE EXPLANATION AS UNSATISFACTORYTHUS, AO DID NOT COMPLY WITH THE CONDITIONS STIPULATED IN S. 69ADDITION DELETEDREMAND OF THE CASE NOT CALLED FORPOWER OF REMAND UNDER S, 254 IS REQUIRED TO BE EXERCISED IN A DISCIPLINED AND RESPONSIBLE MANNER SAME CANNOT BE INVOKED IN A CASE WHERE AO HAS NOT CARED TO FOLLOW THE BASIC PROVISIONS OF S. 69/69B.' 16. THE HON'BLE PUNJAB AND HARYANA HIGH COURT IN T HE CASE OF CIT VS RAVI KUMAR 294 ITR 78 HAS ALSO LAID DOWN TH AT AFTER THE ASSESSEE HAD EXPLAINED THE ROUGH NOTINGS, IT WAS IN CUMBENT UPON THE REVENUE TO REBUT THE SAME BY SOME MATERIAL EVIDENCE. THE HON'BLE COURT HAS SPECIFICALLY HELD AS UNDER:- 'HELD, THAT THE ASSESSEE WAS FOUND TO BE IN POSSESS ION OF LOOSE SLIPS AND NOT OF ANY VALUABLE ARTICLES OR THINGS. NEITHER THE POSSESSION NOR THE OWNERSHIP OF ANY JEWELLERY MENTIONED IN THE SLIPS WAS PROVED. THEREFORE, THE TRIBUNAL HAD RIGHTLY HELD THAT THE PROVISIONS OF SECTION 69A OF THE ACT WERE NOT APPLICABLE. THE TRIBUNAL ALSO HELD THAT IF THE ASSE SSEE FAILED TO EXPLAIN THE CONTENTS OF THE SLIPS, IT WAS FOR THE REVENUE TO PROVE ON THE BASIS OF MATERIAL ON RECORD THAT THEY REPRESENTED TRANSACTIONS OF SALES OR STOCK-IN-HAND BEFORE MAKING ANY ADDITION ON THIS SCORE. THE ASSESSEE HAD DULY EXPLAINED THAT THESE W ERE ROUGH CALCULATIONS AND THE ASSESSEE'S EXPLANATION H AD NOT BEEN REBUTTED BY ANY MATERIAL EVIDENCE. THEREFO RE, THE ORDER OF THE TRIBUNAL COULD NOT BE SAID TO BE PERVERSE.' 17. HERE IT IS ALSO IMPORTANT TO APPRECIATE THE OB SERVATION OF HON'BLE APEX COURT IN THE CASE OF SH. DAULAT RAM RA VAT MAL 87 ITR 349 WHICH THROWS LIGHT ON THE ASPECT OF DECISIO N MAKING. THE HON'BLE COURT HELD AS UNDER : 18 'THERE SHOULD BE SOME DIRECT NEXUS BETWEEN THE CONCLUSION OF FACT ARRIVED AT BY THE AUTHORITY CONC ERNED AND THE PRIMARY FACTS UPON WHICH THAT CONCLUSION IS BASED. THE USE OF EXTRANEOUS AND IRRELEVANT MATERIA L IN ARRIVING AT THAT CONCLUSION WOULD VITIATE THE CONCL USION OF FACT BECAUSE IT IS DIFFICULT TO PREDICATE AS TO WHAT EXTENT EXTRANEOUS AND IRRELEVANT MATERIAL HAS INFLU ENCED THE AUTHORITY IN ARRIVING AT THE CONCLUSION OF FACT .' 18. IT IS SEEN THAT THE CONCLUSION ARRIVED AT BY THE ASSESSING OFFICER IN THE CASE OF THE APPELLANT IS NOT BASED U PON THE PRIMARY FACTS WHICH OF COURSE ARE IN THE CASE OF SH . SURINDER KUMAR GULATI AND IN THAT CASE ALSO THE SAME HAVE BE EN HIGHLIGHTED TO BE LIMITED IN THEIR APPLICATION ON A CCOUNT OF DENIAL OF SH. SURINDER KUMAR GULATI AND SUBSEQUENT DISCLOSURE OF RS. 80 LACS ACCEPTANCE THEREOF. IN VIEW OF THE A BOVE DETAILED ANALYSIS OF FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE CONSIDERED VIEW THAT THE ASSESSING OFFICER HAS NO E VIDENCE TO HOLD THAT THE ASSESSEE HAD PAID UNACCOUNTED PURCHAS E CONSIDERATION TO THE SELLER I.E. SH. HARMOHINDER SI NGH CHADHA AMOUNTING TO RS.50,46,200/-. THEREFORE, THE ADDITIO N MADE BY THE ASSESSING OFFICER IS DIRECTED TO BE DELETED. IN THE RESULT, APPEAL IS ALLOWED. 9. THE LD. DR RELIED UPON ORDER OF THE ASSESSING OFFICER. THE ASSESSING OFFICER, ON THE BASIS OF SEIZED PAPER, CORRECTLY CALCULATED THE SALE PRICE O F EACH SHARE AT RS. 6554/-. THE SEIZED MATERIAL WAS RECOVERED IN THE CASE OF SHRI SURINDER GULATI, HOWEVER, LD. CIT(APPEALS) HAS DELETED THE ADDITION IN HIS CASE AND NO DEPARTMENTAL APPEAL HAVE BEEN FILED BECAUSE OF THE LOW TAX EFFECT. THE SURRENDER MADE BY SHRI SURINDER GULATI WAS OF RS.1.50 CR WHICH INCLUDES THE ENTRIES OF THE BLUE DIARY. THE ASSESSEE PURCHASED SHARES FROM CHADHA FAMILY. SINCE IT WAS A FINANCIAL TRANSACTION, THEREFORE, CONSIDERING THE RULE OF PREPONDANCE OF PROBABILITIE S, 19 THE RATES PER SHARE WERE CORRECTLY APPLIED BY THE ASSESSING OFFICER. ALL TRANSACTIONS WOULD HAVE BEEN HELD AT THE SAME RATE. SHRI SURINDER GULATI SURRENDERED SEPARATELY 80 LACS IN RESPECT OF THE SEIZED DIARY, THEREFORE, CASE OF THE CO-OWNER SHOUL D BE CONSIDERED TOGETHER. THE LD. DR RELIED UPON JUDGEMENT OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF JOGINDER PAL VS CIT 56 TAXMAN.COM 150, DECISION OF GUJRAT HIGH COURT IN THE CASE OF HIREN VASANT LAL SHAH 19 TAXMAN.COM 241 AND DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF R.P. VASHISHT VS DCIT 301 ITR 37. 9(I) ON THE OTHER HAND, LD. COUNSEL FOR THE ASSESS EE REITERATED THE SUBMISSIONS MADE BEFORE AUTHORITIES BELOW AND SUBMITTED THAT THE SEIZED PAPER FILED AT PAGE 12 OF THE PAPER BOOK AND SUBMITTED THAT THE CORRECT NARRATION OF BACK-SIDE IS BANK BALANCE. NO DOCUMENT WAS SEIZED FROM THE POSSESSION OF THE ASSESSEE DURING THE COURSE OF SEARCH. NO INCRIMINATING MATERIAL WAS FOUND AGAINST THE ASSESSEE. PB-19 IS STATEMENT OF SHRI SURINDER GULATI DATED 29.11.2012 IN WHICH HE WAS ALLOWED CROSS-EXAMINATION ON BEHALF OF SHRI MADAN GULATI, OTHER ASSESSEE. RS. 80 LACS WERE SURRENDERED BY HIM, WHICH WERE PROPOSED FOR DIFFERENCE IN SALE CONSIDERATION WITH VARANASI PARTY TO WHICH ASSESSEE HAS NOTHING TO DO. NO EVIDENCE OF ANY PAYMENT OVER AND ABOVE WHAT IS DONE THROUGH BANKING CHANNEL HAVE BEEN FOUND AGAINST THE ASSESSEE. PB-49 IS LEASE DEED OF THE SITE IN FAVOUR OF M/S PNPL CHANDIGARH. THE COMPARABLE CASE OF JAGAT THEATRE WAS CITED. PB-121 IS SALE DEED IN THEIR CASE WHICH IS AT VERY LOWER PRICE AND THE SAM E WAS RUNNING IN LOSS. IN THEIR CASE, VALUE OF THE SHARE WAS LESSER AS AGAINST THE SHARE VALUE IN THE CASE OF THE ASSESSEE. PB-38 AND 39 SHOWS A PROFIT 20 OF RS. 14 LACS ONLY IN THE CASE OF M/S PNPL. PB-45 IS RE-VALUATION OF THE ASSETS OF M/S PNPL CHANDIGARH WHICH SHOWS VALUE OF THE SHARE AS ON 31.03.2006 AT RS. 3783.98 WHICH WAS LESSER AS AGAINST THE VALUE PER SHARE DECLARED BY ASSESSEE AT RS. 3900/- PER SHARE. THE LD. COUNSEL FOR THE ASSESSEE, THEREFORE, SUBMITTED THAT ADDITION WAS RIGHTLY DELETED BY LD. CIT(APPEALS) HAVING NO BASIS AND RELIED UPON DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS RAVI KUMAR 294 ITR 78 (SUPRA) AND ORDER OF ITAT AHMEDABAD BENCH IN THE CASE OF SHETH AKSHAY PUSHPAVANDAN VS DCIT 130 TTJ (UO) 42. 10. WE HAVE HEARD RIVAL SUBMISSIONS. IT IS NOT IN DISPUTE THAT SEIZED PAPERS WERE FOUND AND RECOVERED DURING THE COURSE OF SEARCH IN THE CASE O F SHRI SURINDER GULATI. THESE DOCUMENTS WERE USED AGAINST SHRI SURINDER GULATI IN HIS ASSESSMENT AND ALL THESE SEIZED PAPERS HAVE BEEN MENTIONED IN THE ASSESSMENT ORDER OF SHRI SURINDER GULATI DATED 28.02.2013 FOR ASSESSMENT YEAR 2006-07. THE STATEMENT OF SHRI SURINDER GULATI AT THE TIME OF SEARCH WAS RECORDED UNDER SECTION 132(4) OF THE INCOME TAX ACT WHICH IS ALSO REPRODUCED IN HIS ASSESSMENT ORDER AS ABOVE. THE SEIZED PAPER ALONGWITH SMALL BLUE DIARY MARKED RAYMOND WERE CONFRONTED TO HIM IN WHICH HE HAS ADMITTED THAT DIARY WAS WRITTEN IN HIS HANDWRITING AND BELONGS TO HIM. HE HAS ALSO EXPLAINED THE ABBREVIATIONS CONTAINED IN THE SEIZED PAPER BUT NONE OF THE ABBREVIATIONS WERE HAVING ANY LINK OR CONNECTION WITH THE ASSESSEE. IN ANSWER TO ONE OF THE QUESTIO N, WHILE REFERRING TO THE SEIZED PAPER, HE HAS EXPLAINED THAT THESE ARE ESTIMATES AND THE ACTUAL FACT REMAINED THAT HE HAS RECEIVED MONEY @ RS. 3900/- PER SHARE. SHRI SURINDER GULATI DID NOT 21 MAKE ANY ALLEGATION AGAINST THE ASSESSEE IN RESPECT OF SHARES PURCHASED BY THE ASSESSEE. THE SEIZED PAPER AS REFERRED IN HIS ASSESSMENT ORDER HAVE BEEN REPRODUCED IN WHICH, ON CERTAIN SHARES THE VALUE HAVE BEEN SHOWN @ 3900/- AS WELL AS IN ANOTHER PAPER, THE SAME RATE IS MENTIONED AGAINST THE TOTAL SHARES OF 3258 AND IN THE THIRD SEIZED PAPER, TOTAL SALE PROCEEDS OF 3258 SHARES HAVE BEEN CONSIDERED BY ASSESSING OFFICER IN A SUM OF RS. 2.13 CRORES. THIS SALE CONSIDERATION WAS DIVIDED BY 3258 SHARES AND ASSESSING OFFICER CONCLUDED THE VALUE OF EACH SHARE AT RS. 6554/-. HOWEVER, ALL THE ABOVE MATERIAL ON RECORD I.E. STATEMENT OF SHRI SURINDER GULATI AND THE SEIZED PAPER DID NOT MAKE ANY ALLEGATION AGAINST THE ASSESSEE OF PURCHASE OF SHARES AT RS.6554/-. IT WAS A PRESUMPTION OF THE ASSESSING OFFICER THAT WHEN ONE OF THE TRANSACTIONS IS CONDUCTED BY SHRI SURINDER GULATI FOR A SUM OF RS. 6554/- THEN PRESUMPTION WOULD BE THAT OTHER SHARES HAVE ALSO BEEN TRANSFERRED AT THE SAME VALUE. HOWEVER, IT IS WELL SETTLED LAW THAT PRESUMPTION, WHAT-SO-EVER MAY BE STRONG BUT SAME CANNOT TAKE PLACE OF PROOF. IT IS ALSO ADMITTED FA CT THAT ASSESSEE DID NOT HAVE ANY TRANSACTION WITH SHRI SURINDER GULATI OR ANY OF HIS FAMILY MEMBERS. THE ASSESSEE HAD PURCHASED SHARES FROM CHADHA FAMILY AND EVEN IN SEARCH IN THE CASE OF CHADHA FAMILY, NO MATERIAL OR DOCUMENT WAS FOUND MAKING ANY ALLEGATION AGAINST THE ASSESSEE. 10(I) IT IS INTERESTING TO NOTE THAT WHEN ADDITION IS MADE BY THE ASSESSING OFFICER IN THE CASE OF SHRI SURINDER GULATI BASED ON THE SAME SEIZED MATERIAL BY TAKING THE SAME VALUE OF THE SHARE AT RS. 6554/- , SHRI SURINDER GULATI PREFERRED APPEAL BEFORE LD. CIT(APPEALS), CENTRAL, GURGAON AND THE ENTIRE ADDITION, ON THE BASIS OF THE SAME SEIZED MATERIAL 22 HAVE BEEN DELETED VIDE ORDER DATED 25.03.2014. COPIES OF THE SAME ASSESSMENT ORDER AND APPELLATE ORDER IN THE CASE OF SHRI SURINDER GULATI HAVE BEEN PLACED ON RECORD. THE LD. DR ADMITTED THAT SINCE TAX EFFECT WAS LOW IN THE CASE OF SHRI SURINDER GULATI, THEREFORE, NO DEPARTMENTAL APPEAL HAVE BEEN FILED BEFORE THE TRIBUNAL. IT, THEREFORE, STANDS CONCLUDED THAT THE ADDITION MADE ON THE BASIS OF TH E SAME SEIZED MATERIAL FOUND FROM THE RESIDENCE OF SHRI SURINDER GULATI WAS NOT RELIABLE AND WOULD NOT LEAD TO ANY ADDITION EVEN IN THE CASE OF SHRI SURINDER GULATI FROM WHOSE POSSESSION, SEIZED PAPERS WERE FOUND AND RECOVERED. IT IS NOT EXPLAINED DURING THE COURSE OF ARGUMENTS HOW THE SAME SEIZED PAPERS CONTAINING NO ALLEGATION AGAINST THE ASSESSEE ARE ADMISSIBLE IN EVIDENCE AGAINST THE ASSESSEE. WHERE THERE IS NO INCRIMINATING EVIDENCE AVAILABLE AGAINST THE ASSESSEE ON RECORD, THE ABOVE ADDITION FOR ENHANCING VALUE OF THE ASSET COULD NOT BE MADE ON SUSPICION AND SURMISES. THE PRESUMPTION UNDER SECTION 132(4A) IS, THEREFORE, NO T AVAILABLE WHEN THE SEIZED PAPER IS RECOVERED FROM THE THIRD PARTY AND NOT FROM THE ASSESSEE. WE ARE FORTIFIED IN OUR VIEW BY ORDER OF ITAT AHMEDABAD BENCH IN THE CASE OF AKSHAY PUSHPVANDAN VS DCIT (SUPRA). ONCE THE SEIZED PAPERS WERE NOT FOUND RELIABLE IN THE CASE OF SHRI SURINDER GULATI FROM WHOSE POSSESSION SAME WERE RECOVERED, THERE IS NOTHING LEFT FOR CONSIDERATION AGAINST THE ASSESSEE . 10(II) THE ASSESSEE IN ADDITION TO THE ABOVE ALSO EXPLAINED THAT WHEN STATEMENT OF SHRI SURINDER GULATI WAS ALSO RECORDED IN THE CASE OF SHRI MADAN GULATI, HE HAS NOT SUPPORTED THE CASE OF THE REVENU E IN HIS STATEMENT. HE HAS ALSO EXPLAINED IN THE STATEMENT THAT RS. 80 LACS WAS SURRENDERED ON ACCOUNT OF DEALING WITH THE VARANASI PARTY WHICH 23 HAS ALSO NO CONNECTION WITH THE ASSESSEE. THE ASSESSEE ALSO FILED PROFIT & LOSS ACCOUNT OF THE PNPL TO SHOW THAT THERE WAS VERY LITTLE PROFIT IN THEIR CASE AND THAT PROPERTY WAS LEASE-HOLD HELD BY THEM AND THAT RE-VALUATION OF THE SHARES SHOWS THE LESSER AMOUNT AS AGAINST THE PURCHASE CONSIDERATION DECLARED BY ASSESSEE WOULD CLEARLY SUPPORT THE CASE OF THE ASSESSEE THAT ADDITION WAS MADE AGAINST HIM WITHOUT ANY BASIS. THE ASSESSEE ALSO CITED A COMPARABLE CASE OF JAGAT THEATER IN WHICH THE VALUE PER SHARE WAS LESSER AND THE SALE CONSIDERATION WAS ALSO LESSER. THESE EVIDENCES AND MATERIAL ON RECORD ALSO SUPPORT THE FINDINGS OF THE LD. CIT(APPEALS) T HAT ADDITION WAS MADE MERELY ON PRESUMPTION AND WITHOUT ANY BASIS. SINCE NO DOCUMENT OR MATERIAL WAS FOUND DURING THE SEARCH AGAINST THE ASSESSEE TO PROVE THAT ASSESSEE PAID ANY AMOUNT OVER AND ABOVE WHAT IS PAID THROUGH THE BANKING CHANNEL, WOULD CLEARLY INDICATE THAT ASSESSING OFFICER, WITHOUT ANY JUSTIFICATION MADE THE ADDITION AGAINST THE ASSESSEE. THE LD. DR, HOWEVER, RELIED UPON DECISION OF THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF JOGINDER LAL (SUPRA). IN THIS CASE, THE ASSESSEE PURCHASED A PLOT VIDE REGISTERED SALE DEED FOR CONSIDERATION OF RS. 3.70 LACS AND DURING THE SURVEY CONDUCTED UNDER SECTION 133A, VENDORS DECLARED SALE CONSIDERATION OF THE SAID PLO T AT RS. 38 LACS. IN THE CASE OF HIREN VASANT LAL SH AH (SUPRA) PURSUANT TO THE SEARCH AT THE ASSESSEE'S PREMISES, CERTAIN DOCUMENTS WERE FOUND AND ONE OF THE SAID DOCUMENT CONTAINED WORKING OF INTEREST @ 3% ON THE TOTAL SUM OF RS. 3 LACS. HOWEVER, IN THE CASE OF THE ASSESSEE, NO DOCUMENT OR MATERIAL WAS FOUND DURING THE COURSE OF SEARCH AGAINST THE ASSESSEE WHEN THE SEARCH WAS CONDUCTED IN THE CASE OF SHRI SURINDER GULATI OR IN THE CASE OF THE ASSESSEE. THEREFORE, BOTH DECISIONS ARE 24 DISTINGUISHABLE ON FACTS. THE DECISION IN THE CASE OF R.P. VASHISHT (SUPRA) RELIED UPON BY LD. DR IS ALSO NOT APPLICABLE TO THIS CASE. 11. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES IN THE LIGHT OF THE FINDINGS OF LD. CIT(APPEALS), PARTICULARLY WHEN THE ADDITIONS HAVE BEEN DELETED IN THE CASE OF SHRI SURINDER GULATI AN D THE MATTER HAS REACHED FINALITY, NOTHING SURVIVE IN FAVOUR OF THE REVENUE TO MAKE ANY ADDITION AGAINST THE ASSESSEE. IN THE ABSENCE OF ANY EVIDENCE ON RECORD AGAINST THE ASSESSEE, WE ARE NOT INCLINED TO INTERFERE WITH THE ORDER OF THE LD. CIT(APPEALS) FO R DELETING THE ADDITION. NO ERROR HAVE BEEN POINTED OUT IN THE ORDER OF THE LD. CIT(APPEALS). THE CONTENTION OF LD. DR HAVE NO FORCE THAT WHEN ONE TRANSACTION IS CONDUCTED AT THE SAME RATE, THE SAME RATE SHOULD BE APPLIED IN OTHER CASES. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY MERIT IN THE DEPARTMENTAL APPEAL. THE SAME IS ACCORDINGLY DISMISSED. ITA 127/2014 (NARAIN SINGLA) 12. THIS APPEAL BY REVENUE IS DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS)-I LUDHIANA DATED 07.11.2013 FOR ASSESSMENT YEAR 2006-07 CHALLENGING THE DELETION OF ADDITION OF RS. 74,92,242/- ON ACCOUNT OF UNEXPLAINED INVESTMENT BY ASSESSEE IN THE PURCHASE OF SHARES. ITA 943/2014 ( NARAIN SINGH, HUF) 13. THIS APPEAL BY REVENUE HAS BEEN DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS) PATIALA DATED 14.08.2014 FOR ASSESSMENT YEAR 2006-07 25 CHALLENGING THE DELETION OF ADDITION OF RS. 50,42,600/- ON ACCOUNT OF UNEXPLAINED INVESTMENT MADE IN PURCHASE OF SHARES OF M/S PNPL. ITA 545/2014 ( MADAN LAL GULATI ) 14. THIS APPEAL BY REVENUE HAS BEEN DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS), CENTRAL, GURGAON DATED 25.03.2014 FOR ASSESSMENT YEAR 2006-07 CHALLENGING THE DELETION OF ADDITION OF RS. 1,11,48,664/- ON ACCOUNT OF UNACCOUNTED SALE CONSIDERATION OF SHARES OF M/S PNPL. 15. LD. REPRESENTATIVES OF BOTH THE PARTIES SUBMITTED THAT ISSUE IS IDENTICAL IN THESE REMAININ G THREE DEPARTMENTAL APPEALS AND ORDER IN THE CASE OF SHRI ASHISH SINGLA MAY BE FOLLOWED. BY FOLLOWING THE REASONS FOR DECISION IN THE CASE OF SHRI ASHISH SINGLA (SUPRA) WE FIND THAT ISSUES ARE SAME IN THES E REMAINING APPEALS, THEREFORE, WE DO NOT FIND ANY MERIT IN THESE APPEALS AND SAME ARE ACCORDINGLY, DISMISSED. 16. IN THE RESULT, REMAINING THREE APPEALS ARE ALS O DISMISSED. 17. IN THE RESULT, ALL DEPARTMENTAL APPEALS ARE DISMISSED. 6. COPY OF THE ORDER IS PLACED ON RECORD AND GIVEN TO THE LD. DR. THE LD. DR SUBMITTED THAT ISSUE IS COV ERED BY ORDER OF ITAT CHANDIGARH BENCH DATED 15.02.2016 (SUPRA) IN FAVOUR OF THE ASSESSEE. 26 7. ON CONSIDERATION OF THE FACTS OF THE CASE IN THE LIGHT OF THE ORDER OF THE TRIBUNAL IN THE CASE OF S HRI ASHISH SINGLA (SUPRA) WE ARE OF THE VIEW ISSUE IS C OVERED IN FAVOUR OF THE ASSESSEE. THE LD. CIT(APPEALS) FOL LOWED HIS APPELLATE ORDER DATED 07.11.2013 IN THE CASE OF SHRI ASHISH SINGLA IN WHICH WE HAVE DISMISSED THE DEPARTMENTAL APPEAL. 8. IN THIS VIEW OF THE MATTER, WE DO NOT FIND ANY MERIT IN ALL THE APPEALS OF THE REVENUE. ALL APPEA LS OF THE REVENUE ARE, ACCORDINGLY, DISMISSED. 9. IN THE RESULT, ALL APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- ( ANNAPURNA GUPTA) (BHAVNESH S AINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 23 RD NOVEMBER, 2016. POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT,DR ASSISTANT REGISTRAR, ITAT/CHD