Shri C.P. Mohandas, Pune V. ACIT, Cen. Cir. -1(1), Pune,

ITA 952/PUN/2008

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9731 (ITAT-PUNE)
• Duration Of Justice: 4 year(s) 2 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-09-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 11-07-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 04-07-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K SINGH
• Assessee Lawyers: P D KUDWA
• Keywords: Unexplained investment; Business expenditure; Income from undisclosed sources; Loose papers; Document seized; Source of fund; Block assessment; Documents seized; Reassessment proceedings
• Section: 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBER, AND SHRI R.S.PADVEKAR, JUDICIAL MEMBER. ITA.NO.952 & 953/PN/2008 (ASSTT. YEAR : 2003-04 AND 2004-05) SHRI C.P.MOHANDAS, VIJAY HOUSE, 599, SACHAPIR STREET, PUNE 411001. .. APPELLANT PAN: AAXPM1656M VS. THE ACIT, CENTRAL CIRCLE-1(1), PUNE. .. RESPONDENT AND ITA.NO.790 & 941/PN/2008 (ASSTT. YEAR : 2003-04 AND 2004-05) THE DCIT, CENTRAL CIRCLE-1(1), PUNE. .. APPELLANT VS. SHRI C.P.MOHANDAS, VIJAY HOUSE, 599, SACHAPIR STREET, PUNE 411001. .. RESPONDENT PAN: AAXPM1656M ASSESSEE BY : SHRI P.D.KUDWA DEPARTMENT BY : SHRI S.K.SINGH DATE OF HEARING : 11.07.2012 DATE OF PRONOUNCEMENT : 10.09.2012 ORDER PER R.S.PADVEKAR, JM : THIS BATCH OF FOUR APPEALS, TWO BY THE ASSESSEE AN D TWO BY THE REVENUE, ARE ARISING OUT OF THE BLOCK ASSESSMENTS F RAMED BY THE ASSESSING OFFICER IN CONSEQUENCE OF SEARCH & SEIZURE OPERATIO N AGAINST THE ASSESSEE U/S.132(1) OF THE INCOME TAX ACT, 1961. 2. WE FIRST TAKE THE ASSESSEES APPEAL FOR THE A.Y. 2003-04 BEING ITA.NO.952/PN/2008. 2 3. THE FIRST ISSUE IS ADDITION SUSTAINED TO THE EXT ENT OF RS.4,00,000/- OUT OF TOTAL ADDITION OF RS.10,72,810/- ON ACCOUNT OF A LLEGED EXPENDITURE ON FURNISHING ASSESSEES RESIDENCE. THE ASSESSEE IS A PROPRIETORY OF M/S.KIRTI DEVELOPERS AND ONE OF THE DIRECTORS OF M/S.KIRTI DE VELOPERS AND CONSTRUCTIONS PVT. LTD. SEARCH ACTION U/S.132 OF T HE ACT WAS CONDUCTED AT THE RESIDENTIAL AS WELL AS BUSINESS PREMISES OF THE ASSESSEE ON 24.06.2003. IN THE COURSE OF SEARCH, CASH AND INCRIMINATING DOC UMENTS WERE SEIZED BY THE REVENUE. SO FAR AS THE ISSUE BEFORE US IS CONC ERNED, THE SAME IS DISCUSSED IN THE ASSESSMENT ORDER FROM PARA NOS.18 TO 25. THE ASSESSING OFFICER HAS OBSERVED THAT DURING THE SEARCH AND SEI ZURE OPERATION, LOOSE PAPERS WERE SEIZED AT THE RESIDENCE OF THE ASSESSEE . THE SAID LOOSE PAPERS GIVE THE DETAILS OF FURNISHING OF THE RESIDENCE OF THE ASSESSEE AT D-2/4, PADMAVILAS ENCLAVE, WANORIE, PUNE. THE ASSESSEE WAS CONFRONTED BY SHOWING THE LOOSE PAPERS IN THE STATEMENT RECORDED U/S.132(4) OF THE ACT ON 24.06.2003. THE REPLY OF THE ASSESSEE IS REPRODUCE D IN THE ASSESSMENT ORDER. HE ADMITTED THAT THE INTERIOR DECORATION WA S DONE BY DARSHAN INTERIORS THROUGH ONE SHRI DHUDARAM MISTRY. HE ADMI TTED THAT THE EXPENDITURE ON THE INTERIOR DECORATION AND FURNISHI NG OF HIS DUPLEX BUNGALOW WAS TO THE EXTENT OF RS.11,00,000/- AND OUT OF THAT AMOUNT OF RS.8,00,000/- HAS BEEN RECORDED IN THE BOOKS OF ACCOUNT AND BALAN CE RS.3,00,000/- WAS NOT ACCOUNTED. AFTER EXAMINING THE SEIZED DOCUMENT S, IT WAS NOTICED BY THE ASSESSING OFFICER THAT DIFFERENT ESTIMATES WERE THE RE FOR CARPENTRY WORK, CIVIL WORK, ELECTRICAL, PLUMBING, POP, PAINTING, ETC. AS PER THE SEIZED DOCUMENTS WHICH WERE CONSISTING OF SOME ESTIMATES AND AGREEME NTS ALSO, THE ASSESSING OFFICER ESTIMATED THE MINIMUM EXPENDITURE WHICH MIGHT HAVE BEEN INCURRED BY THE ASSESSEE TO THE EXTENT OF RS.1 6,16,300/-. 4. IN PARA 22 OF THE ASSESSMENT ORDER, THE ASSESSIN G OFFICER HAS OBSERVED THAT AT THE TIME OF SEARCH, AN INVENTORY O F FURNISHING FEES AND ELECTRICAL GOODS WAS PREPARED AND THE DETAILS OF IT EMS ARE REPRODUCED IN THE SAID PARAGRAPH BY THE ASSESSING OFFICER. AS OBSERV ED BY THE ASSESSING OFFICER, AS PER THE COST STATED BY THE ASSESSEE WAS TO THE EXTENT OF RS.3,05,700/-. THE ASSESSING OFFICER HAS ALSO OBSE RVED THAT THE ITEMS CAME INTO THE POSSESSION OF THE ASSESSEE PRIOR TO 01.04. 1997 WHICH ARE ALSO CONSIDERED IN ESTIMATING THE COST. THE ASSESSING O FFICER VERIFIED THE BOOKS OF ACCOUNT AND AS OBSERVED BY HIM, THE ASSESSEE HAS ONLY DEBITED RS.1,02,000/- AS PAYMENT TO PAINTING WORK. THE ASS ESSING OFFICER HAS ALSO GIVEN THE DETAILS IN RESPECT OF THE AMOUNT DEBITED UNDER THE ACCOUNT HEAD 3 REPAIRS AND MAINTENANCE (OFFICE). THE ASSESSING OFFICER FINALLY WORKED OUT THE TOTAL EXPENDITURE INCURRED ON THE FURNISHING OF HIS RESIDENCE AT RS.24,01,140/-. THE DETAILS OF EXPENDITURE WORKED OUT BY THE ASSESSING OFFICER IS GIVEN IN PARA NO.23 OF THE ASSESSMENT OR DER WHICH IS AS UNDER: EXPENDITURE AS PER DARSHAN INTERIORS RS.8,16,300 CARPENTRY WORK RS.8,00,000 COST OF MATERIAL SUPPLIED RS.2,56,588 EXPENDITURE ON SPECIFIC ITEMS AS LISTED ABOVE & INVENTORIED IN ANNEXURE E RS.3,05,700 EXTRA AMOUNT SPENT FOR PAINTING JOB RS.22,000 AMOUNT SPENT FOR CONSULTANCY OF VASTUSHASTRA MEGA PLANNERS RS.11,000 GLASSES FROM OMEGA HOUSE RS.30,000 TOTAL RS.22,50,588 SUPERVISION/CONSULTANCY CHARGES OF INTERIOR DECORAT OR AS DISCUSSED RS.1,50,551 TOTAL RS.24,01,139 S AY RS.24,01,140 5. THE ASSESSING OFFICER ALSO CONSIDERED THE CAPITA L ACCOUNT OF THE ASSESSEE. HE HAS NOTED THAT ASSESSEE HAS DEBITED HI S CAPITAL ACCOUNT WITH RS.9,04,170/- BY WAY OF JOURNAL ENTRY. OTHER DEBIT S WERE ALSO THERE TO THE EXTENT OF RS.3,00,000/-, RS.1,50,000/-, RS.4,50,000 /- ON DIFFERENT DATES. THE ASSESSING OFFICER GIVEN CREDIT FOR THE SAID AMO UNT PRESUMING THAT THE SAID AMOUNT MIGHT HAVE BEEN INCURRED BY THE ASSESSE E ON FURNISHING AND INTERIOR DECORATION. HE, THEREFORE, REDUCED THE S UM OF RS.13,54,170/- FROM THE TOTAL ESTIMATION OF RS.24,01,140/- AND MADE THE ADDITION TO THE EXTENT OF RS.10,72,810/-. THE ASSESSEE CHALLENGED THE SAI D ADDITION BEFORE THE LD. CIT(A) WHO SUSTAINED THE ADDITION OF RS.4,00,000/- IN PLACE OF RS.10,72,810/-. THE OPERATIVE PART OF THE FINDING OF THE LD. CIT(A) IS AS UNDER: 8.3. I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE APPELLANT AND PERUSED MATERIAL ON RECORD. A PERUSAL OF MATERIAL ON RECORD SHOWS THAT THE LEARNED ASSESSING OFFICER HAS TAKEN THE FIGURE OF E STIMATE AS ACTUAL PAYMENT. IN PARA 21 OF THE ASSESSMENT ORDER WHERE HE HAS WOR KED OUT THE FIGURE OF RS.16,16,300/-, IT IS MENTIONED BY HIM THAT THE WOR KING IS DONE ON THE BASIS OF PAPERS/ESTIMATES/AGREEMENTS. IN FACT, THE LEARN ED ASSESSING OFFICER HAS PICKED UP FIGURES FOR THE REASONS AND BASIS BEST KN OWN TO HIM FROM THE ESTIMATES AND TAKEN THEM AS ACTUAL PAYMENTS. THE W ORKING DONE BY THE ASSESSING OFFICER IS EXCESSIVE AS IS CLEAR FROM THE FACT THAT AS PER PARA 22 OF THE ASSESSMENT ORDER, THE ESTIMATE OF RS.80,000/- I N RESPECT OF PAINTING IS MADE BUT THE ASSESSEE HAS DEBITED AN AMOUNT OF RS.1 ,03,000/-. THUS, IN RESPECT OF PAINTING, THE ACTUAL EXPENSES DEBITED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE ARE MORE THAN THE ESTIMATED FIGURE BY THE ASSESSING OFFICER. DESPITE THAT, THE LEARNED ASSESSING OFFICER HAS ADD ED RS.22,000/- VIDE PARA 23 OF THE ASSESSMENT ORDER. THUS CLEARLY SHOWS THE CASUAL MANNER IN WHICH 4 THE EXERCISE OF FINDING OUT UNDISCLOSED INVESTMENT IN HOUSE HAS BEEN CONDUCTED. 8.3.1. AS REGARDS THE ESTIMATE FROM DARSHAN INTERIO RS, IT IS SEEN THAT SEVERAL ESTIMATES HAVE BEEN SUBMITTED BY DARSHAN INTERIORS AND THESE ESTIMATES HAVE DIFFERENT FIGURES AND FROM WHICH ESTIMATE THE LEARNED ASSESSING OFFICER HAS PICKED UP FIGURE IS ALSO NOT CLEAR FROM THE ASS ESSMENT ORDER. ANOTHER IMPORTANT DIFFERENCE IS ON ACCOUNT CARPENTRY WORK W HERE THE EXPENDITURE TAKEN BY THE ASSESSING OFFICER AS MENTIONED IN PARA 21 OF THE ASSESSMENT ORDER RS.8 LAKHS WHERE AS THE ACTUAL PAYMENT MADE B Y THE APPELLANT IS CLAIMED TO BE RS.3,50,000/-. IT MAY ALSO BE MENTION ED THAT THE EXERCISE CARRIED OUT BY THE ASSESSING OFFICER SUFFERS FROM D UPLICATION AS IS CLEAR FROM THE FACT THAT THE ASSESSING OFFICER HAS TAKEN THE F IGURE OF CARPENTRY WORK AT RS.8 LAKH WHEREAS SEPARATE CARPENTRY ITEMS OF SOFA, CURTAIN FABRIC AND OTHER ACCESSORIES OF RS.1,30,000/- AND SOFA AT RS.26,000/ - ARE INCLUDED IN THE FIGURE OF RS.8,16,300/- WORKED OUT BY THE ASSESSING OFFICER VIDE PARA 21 OF THE ASSESSMENT ORDER. 8.3.2. FURTHER, THE ORDER OF THE ASSESSING OFFICER SUFFERS FROM FACTUAL INACCURACY ALSO. VIDE PARA 20 OF THE ASSESSMENT OR DER, IT IS MENTIONED THAT THE ESTIMATE MENTIONED IN PARA 20 OF THE ASSESSMENT ORDER GIVES CLEAR FINDING THAT CARPENTRY WORK AT RESIDENCE WAS TO BE COMPLETED AT AN AGREED COST OF RS.8 LAKHS. THIS FINDING OF THE ASSESSING OFFICER ONLY HALF TRUTH BECAUSE THE ESTIMATE IS SIGNED ONLY BY THE PARTY SU BMITTED THE ESTIMATE AND DOES NOT CONTAIN THE SIGNATURE OF THE APPELLANT ACC EPTING THE OFFER OF PROPOSAL. THEREFORE, TO SAY THAT THE AGREED COST W AS WORKED OUT AT RS.8 LAKHS IN RESPECT OF THESE ITEMS IS FAR AWAY FROM TR UTHFULNESS AND REALITY. 8.3.3. IN VIEW OF THE FOREGOING DISCUSSION AND TAKI NG INTO ACCOUNT THE TOTALITY OF FACTS AND CIRCUMSTANCES WHICH CLEARLY SHOW THAT THE APPELLANT HIMSELF HAS ACCEPTED UNDISCLOSED INVESTMENT IN THIS REGARD AT R S.3 LAKHS IN THE STATEMENT AND TAKING INTO ACCOUNT THE TOTALITY OF FACTS AND C IRCUMSTANCES, I AM OF THE CONSIDERED VIEW THAT IT WOULD BE FAIR AND REASONABL E IF ADDITION OF RS.4 LAKHS IS SUSTAINED OVER AND ABOVE SHOWN BY THE APPELLANT IN HIS BOOKS OF ACCOUNTS ON ACCOUNT OF UNEXPLAINED INVESTMENT IN FURNISHING OF RESIDENCE. APPELLANT GETS CONSEQUENTIAL RELIEF. 6. NOW THE ASSESSEE HAS RAISED THE GRIEVANCE AGAINS T SUSTAINING THE ADDITION TO THE EXTENT OF RS.4,00,000/-. WE HAVE H EARD THE PARTIES AND PERUSED THE RECORD. SUM AND SUBSTANCE OF THE ARGUM ENTS OF THE LD. COUNSEL IS THAT THE ENTIRE ADDITION IS BASED ON THE ESTIMATION MADE BY THE ASSESSING OFFICER. HE SUBMITS THAT ASSESSING OFFIC ER HIMSELF HAS ADMITTED THAT THERE WERE MANY ESTIMATES ON PAGE NO.74 TO 85 OF THE PAPER BOOK, BUT SAME IS CONSIDERED AS ACTUAL EXPENDITURE WHEN NO EV IDENCE IS FOUND TO SUPPORT THE CASE OF THE ASSESSING OFFICER. HE SUBM ITS THAT ASSESSEE HAS ALREADY DEBITED THE EXPENDITURE ON THE INTERIOR DEC ORATION. HE ADMITTED THAT MAXIMUM AMOUNT TO THE EXTENT OF RS.3,00,000/- ON TH E EXPENDITURE IS NOT ACCOUNTED FOR. WE FIND THAT ASSESSING OFFICER HAS ALSO GIVEN THE BENEFIT OF THE AMOUNTS WITHDRAWN BY THE ASSESSEE WHICH WERE DE BITED TO HIS CAPITAL ACCOUNT. IT IS TRUE THAT THE ESTIMATION OF THE EXP ENDITURE ON THE FURNISHING AND INTERIOR DECORATION DETERMINED BY THE ASSESSING OFFICER COMPRISE OF SOME QUOTATIONS AND ESTIMATES. AT THE SAME TIME, WE FIND THAT AS PER THE 5 ADMISSION OF THE ASSESSEE, THE TOTAL EXPENDITURE WA S TO THE EXTENT OF RS.11,00,000/- BUT THE EXPENDITURE ESTIMATED BY THE ASSESSING OFFICER IS TO THE TUNE OF RS.24,00,000/-. FACT ALSO REMAINS THAT NO CORROBORATIVE EVIDENCE WAS FOUND TO SUPPORT THE ADDITION MADE BY THE ASSESSING OFFICER. IN OUR OPINION, THE ENTIRE ADDITION MADE BY THE ASS ESSING OFFICER DID NOT HAVE ANY SOUND FOOTING. WE, THEREFORE, DELETE RS.4 ,00,000/- SUSTAINED BY THE LD. CIT(A). GROUND NO.1 IS ACCORDINGLY ALLOWED . 7. NEXT ISSUE IS SUSTAINING THE ADDITION OF RS.25,0 00/- ON ACCOUNT OF UNACCOUNTED HOUSEHOLD EXPENSES. THE ASSESSING OFFI CER HAS DISCUSSED THIS ISSUE IN PARA 31 OF THE ASSESSMENT ORDER. THE ASSE SSING OFFICER HAS GIVEN THE DETAILS OF HIS FAMILY AND ALSO MADE OBSERVATION ON THE STANDARD OF LIVING. THE ASSESSING OFFICER ESTIMATED THE ASSESSEES HOUS EHOLD EXPENDITURE AT RS.20,000/- PER MONTH, AND WORKED OUT THE YEARLY HO USEHOLD EXPENDITURE OF RS.2,40,000/-. CONSIDERING THE WITHDRAWALS OF RS.1 ,32,450/- SHOWN BY THE ASSESSEE AND RS.50,000/- BY HIS WIFE, HE MADE THE A DDITION OF RS.57,550/-. THE LD. CIT(A) RESTRICTED THE SAID ADDITION TO RS.2 5,000/-. 8. WE HAVE HEARD THE PARTIES AND PERUSED THE ORDER OF THE LD. CIT(A). IT IS TRUE THAT NO DIRECT EVIDENCE WAS FOUND TO SUPPOR T THE ADDITION OF HOUSEHOLD EXPENSES. AT THE SAME TIME, EACH AND EVER Y ADDITION SHOULD NOT BE BASED ON STRONG EVIDENCE BUT EVEN ADDITION CAN B E JUSTIFIED ON THE CIRCUMSTANTIAL EVIDENCE. WE FIND NO REASON TO INTE RFERE WITH THE ORDER OF THE LD. CIT(A). ACCORDINGLY, SAME IS CONFIRMED. GROUN D NO.2 IS DISMISSED. 9. GROUND NO.3 IS IN RESPECT OF PARTIALLY REJECTING THE CLAIM OF THE ASSESSEE TO THE EXTENT OF RS.8,35,978/- CLAIMED AS AGRICULTURAL INCOME TO THE EXTENT OF RS.17,42,222/-. THE ASSESSING OFFICE R HAS DISCUSSED THIS ISSUE IN PARA NOS.27 AND 28. THE ASSESSEE HAS SHOWN AGRI CULTURAL INCOME OF RS.17,42,222/-. SEARCH WAS ALSO CARRIED OUT AT THE FARM HOUSE AT PALAKKAD. A STATEMENT OF SHRI T.RADHAKRISHNAN WAS RECORDED. T HE ASSESSING OFFICER HAS OBSERVED THAT BOGUS SALE BILLS USED TO BE PROCU RED AND SENT TO THE ASSESSEE, WHICH WERE ACCOUNTED AS AGRICULTURAL INCO ME. AS OBSERVED BY THE ASSESSING OFFICER THE ASSESSEE WAS INFLATING HIS AG RICULTURAL INCOME ON THE BASIS OF BOGUS SALE BILLS. IN THE A.Y. 1998-99, TH E ASSESSEE HAS DECLARED THE AGRICULTURAL INCOME OF RS.2,67,000/- BUT THE ASSESS ING OFFICER HAS WORKED OUT THE AGRICULTURAL INCOME AT RS.4,13,910/-. THE ASSESSING OFFICER MADE THE ADDITION OF RS.11,06,352/- IN THIS YEAR. 6 10. WE HAVE HEARD THE PARTIES. THE LD. COUNSEL SUB MITS THAT HE IS NOT PRESSING THE GROUND NO.3 ON THE ISSUE OF AGRICULTUR AL INCOME. AS THE GROUND NO.3 IS NOT PRESSED, THE SAME IS DISMISSED AS NOT P RESSED. 11. NOW WE TAKE UP REVENUES APPEAL FOR A.Y. 2003-0 4 BEING ITA.NO.790/PN/2008. 12. THE FIRST ISSUE IS DELETION OF ADDITION OF RS.7 ,10,413/- ON ACCOUNT OF PAYMENTS TO LANDLORDS ABOVE THE AGREEMENT PRICE. T HE ASSESSING OFFICER HAS OBSERVED THAT THE ASSESSEE HAS CLAIMED THE COST OF IMPROVEMENT OF LAND AT RS.7,10,413/-. THE ASSESSEE HAS PURCHASED LAND AT VARIOUS PLACES FROM DIFFERENT FARMERS AND LAND OWNERS. THE PRICES OF L ANDS WERE FIXED AND THE RESPECTIVE PURCHASE AGREEMENTS WERE MADE AND REGIST ERED. THE ASSESSEE CLAIMED THAT HE HAS MADE PAYMENTS TO THE LAND OWNER S OVER AND ABOVE THE AGREEMENT PRICE AND ALL THE PAYMENTS WERE MADE BY C HEQUES. THE ASSESSEE CLAIMED THE SAID PAYMENT AS EXPENDITURE IN THE RETU RNS FILED IN RESPONSE TO NOTICE U/S.153A. THE ASSESSING OFFICER HAS ALSO QU OTED THE EXAMPLES HOW THE EXCESS PAYMENTS WERE MADE OVER AND ABOVE THE AG REEMENTS. THE ASSESSING OFFICER REJECTED THE CLAIM OF THE ASSESSE E BY GIVING THE FOLLOWING REASONS: 16. THE CLAIM OF THE ASSESSEE FOR ADDITIONAL COST O F IMPROVEMENT IS NOT ALLOWABLE BECAUSE IF THE ASSESSEE HAS CHOSEN TO PAY OVER AND ABOVE THE AGREEMENT PRICE, THE ACTUAL COST OF LAND CAN NOT BE ALTERED. THE REVENUE IS NOT CONCERNED WITH THE FACT IF THE PURCHASE BILL OF AN ITEM IS FOR RS.100/- AND ASSESSEE HAS DECIDED TO PAY RS.500/-, THEN THE ASSE SSEE HAS MADE CHARITY OF RS.400/-. THE AMOUNT OF RS.400/- CAN NOT BE ALLOWE D AS AN EXPENDITURE. ALL THE EXPENDITURES, INCURRED BY THE ASSESSEE CAN NOT BE TREATED AS BUSINESS EXPENDITURE. WHAT IS ALLOWABLE AS AN EXPENDITURE I N THE P & L ACCOUNT, IS ACTUAL BUSINESS EXPENDITURE SUPPORTED BY THE PRIMAR Y DOCUMENTARY EVIDENCE AS TO WHY THE PAYMENT WAS MADE OVER AND ABOVE THE A GREEMENT. FURTHER, THERE ARE SEVERAL INSTANCES, WHERE THE OVER AND ABO VE PAYMENTS HAS BEEN MADE BY THE ASSESSEE AFTER THE DATE OF SEARCH. THE REASSESSMENT PROCEEDINGS ARE FOR THE BENEFIT OF THE REVENUE AND NOT FOR THE ASSESSEE. THE RELIANCE IS PLACED ON THE DECISION OF THE APEX COUR T IN THE CASE OF CIT VS SUN ENGINEERING WORKS PVT. LTD. REPORTED IN 198 ITR 297 . IN VIEW OF ABOVE, EXPENDITURE OF RS.7,10,413/- CLAIMED AS COST OF IMP ROVEMENT IS DISALLOWED AND ADDED TO THE INCOME OF THE ASSESSEE. 13. THE LD. CIT(A) DELETED THE ADDITION. WE FIND T HAT AN IDENTICAL ISSUE HAS BEEN CONSIDERED BY THE TRIBUNAL IN ASSESSEES O WN CASE FOR THE A.Y. 2002-03, IN ITA.NO.357/PN/2007. THE ASSESSEE HAS F ILED A COPY OF THE TRIBUNAL ORDER WHICH IS PLACED ON RECORD AND OPERAT IVE PART OF THE ORDER IS AS UNDER: 7 27. IT WAS SUBMITTED THAT THE SUBJECT PAYMENTS THOU GH IN EXCESS OF THE AGREEMENT VALUE WERE INCURRED OUT OF BUSINESS EXPED IENCY AND WHOLLY AND EXCLUSIVELY FOR THE BUSINESS PURPOSE TO MEET OUT TH E REQUIREMENTS OF SECTION 37 OF THE ACT. IT WAS SUBMITTED THAT THE ASSESSEE I S CARRYING ON REAL ESTATE BUSINESS AND IT HAS TO MANAGE SEVERAL FACTORS AND S ALE THE LAND WITHIN A REASONABLE PERIOD TO MAKE PROFIT. HE CANNOT AFFORD DELAY IN RESOLVING ISSUES ARISING WITH LAND OWNERS AS FORMALITIES BEFORE GOVE RNMENT AUTHORITIES AND LITIGATION IN COURTS ARE TIME CONSUMING, EXPENSIVE AND SEVERELY AFFECT THE PROFITABILITY OF THE BUSINESS. THE A.O. DID NOT AGR EE WITH THE ABOVE EXPLANATION AND HELD THAT ALL THE EXPENDITURE INCUR RED BY THE ASSESSEE CANNOT BE TREATED AS BUSINESS EXPEN DITURE. HE HAS NOTED FURTHER THAT THE ASSESSEE HAS NOT GIVEN ANY EXPLANA TION AS TO WHY THE PAYMENT WAS MADE OVER AND ABOVE THE AGREEMENT. THE LD CIT(A) HAS DELETED THE ADDITION ACCEPTING THE EXPLANATION OF T HE ASSESSEE, AS DISCUSSED ABOVE. IN THIS REGARD, THE LD CIT(A) HAS NOTED THAT THE IRRESISTIBLE CONCLUSION IS THAT ADDITIONAL EXPENDITURE OF RS.16,15,127/- IS IN RESPECT OF AND IN RELATION TO LAND WHICH IS STOCK-IN-TRADE OF ASSESSEE. THE GENUINENESS OF THIS EXPENDITURE IS NO T IN DOUBT AND THE BUSINESS PURPOSE OF THIS EXPENDITURE BECOMES CLEAR FROM THE SUBMISSION OF THE ASSESSEE. WE ALSO HAVE NO REASON TO DOUBT THE A BOVE EXPLANATION OF THE ASSESSEE. UNDER THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT LD CIT(A) HAS RIGHTLY DELETED THE ADDITION, WHICH WAS BASED UPON THE GENERAL OBSERVATION OF THE A.O. THE FIRST APPELLATE ORDER IN THIS REGARD I S THUS UPHELD. GROUND NO. 2 IS ACCORDINGLY REJECTED. 14. WE, THEREFORE, FOLLOWING THE ORDER OF THE TRIBU NAL IN ASSESSEES OWN CASE IN THE A.Y. 2002-03 ON THE IDENTICAL ISSUE, CO NFIRM THE ORDER OF THE LD. CIT(A) AND DISMISS GROUND NO.1. 15. THE NEXT ISSUE IS REVENUE HAS COME IN APPEAL RA ISING THE GRIEVANCE AGAINST THE RELIEF OF RS.10,72,810/- GIVEN BY THE L D. CIT(A) TO THE ASSESSEE OUT OF TOTAL ADDITION OF RS.10,72,810/- IN RESPECT OF THE ALLEGED EXPENDITURE ON THE FURNISHING AND INTERIOR DECORATION. WHILE D ECIDING THE ASSESSEES APPEAL IN WHICH THE ASSESSEE HAS ALSO RAISED GRIEVA NCE FOR PARTLY SUSTAINING THE ADDITION ON THIS ACCOUNT, WE HAVE HELD THAT THE RE WAS NO JUSTIFICATION ON THE PART OF THE ASSESSING OFFICER TO MAKE THE ADDIT ION. WE, THEREFORE, DISMISS THE GROUND NO.2 TAKEN BY THE REVENUE. 16. THE NEXT ISSUE IS THE RELIEF OF RS.2,70,000/- G IVEN BY THE LD. CIT(A) OUT OF THE ADDITION OF RS.11,06,352/- WHICH WAS MAD E OUT OF THE AGRICULTURAL INCOME DECLARED BY THE ASSESSEE. THIS ISSUE HAS AL READY BEEN CONSIDERED IN THE ASSESSEES OWN CASE IN THE A.Y. 2002-03. IN TH E A.Y. 2002-03 THE TRIBUNAL, BY GIVING THE DETAILED REASONING IN RESPE CT OF THE YIELD AND NATURE OF THE AGRICULTURAL ACTIVITIES, HAS SUSTAINED THE O RDER OF THE LD. CIT(A) IN THE SAID YEAR. AS THE FACTS ARE IDENTICAL IN THIS YEAR, WE MAY REFER TO THE ORDER OF THE TRIBUNAL, MORE PARTICULARLY THE DETAILED REASON ING GIVEN, WHICH IS AS UNDER: 8 10. HAVING GONE THROUGH THE ORDER OF THE AUTHORITIE S BELOW, WE FIND THAT THE A.O MADE THE ADDITION IN QUESTION FOLLOWING ITS EAR LIER ORDER ON THE ISSUE FOR THE A.Y. 1998-99. THE LD CIT(A) ON THE BASIS OF EST IMATION, HAD GIVEN PART RELIEF TOWARDS THE CLAIMED AGRICULTURE INCOME IN TH E A.Y. 1998-99. FOLLOWING THE DECISION TAKEN THEREIN, THE LD CIT(A) DURING TH E YEAR HAS GIVEN PART RELIEF TOWARDS THE CLAIMED AGRICULTURE INCOME. IT APPEARS THAT THE ASSESSEE HAD BASICALLY CLAIMED AGRICULTURE INCOME FROM RUBBER TR EES, MANGO TREES, COCONUT TREES AND OTHERS. THE ASSESSEE CLAIMED AGRICULTURE INCOME AT RS.17,59,300/- DURING THE SEARCH PROCEEDINGS AT FARM HOUSE AT PALA KKAD, KERALA, WHEREIN THE STATEMENTS OF SHRI T. RADHAKRISHNAN WERE RECORD ED. ON THE BASIS OF THESE STATEMENTS OF SHRI RADHAKRISHNAN, IT WAS FOUN D THAT BOGUS SALE BILLS HAVE BEEN PROCURED AND HAVE BEEN SENT TO THE ASSESS EE WHICH THE ASSESSEE HAD ACCOUNTED FOR AS HIS AGRICULTURAL INCOME. THIS ISSUE WAS RAISED AND DEALT IN DETAIL IN THE ASSESSMENT ORDER FOR A.Y. 1998-99 IN ASSESSEES CASE. THE A.O CAME TO THE CONCLUSION THAT THE ASSESSEE HAD SH OWN INFLATED AGRICULTURAL INCOME ON THE BASIS OF BOGUS SALE BILLS PROCURED BY THE ASSESSEE. THE DIFFERENCE BETWEEN THE AGRICULTURAL INCOME SHOWN BY THE ASSESSEE IN HIS RETURNS OF INCOME AND THAT WORKED OUT IN THE ASSESS MENT ORDER FOR A.Y. 1998-99 WAS TREATED AS UNDISCLOSED INCOME FROM THE LAND BUSINESS OF THE ASSESSEE. THE ASSESSMENT YEAR-WISE WORKING OF THE D IFFERENCE IS AS UNDER: ASST.YEAR AGRL. INCOME SHOWN BY THE ASSESSEE AGRICULTURAL INCOME AS WORKED OUT ABOVE DIFFERENCE TO BE TREATED AS INCOME FROM UNDISCLOSED SOURCES 1998 - 1999 20,67,000 4,13,910 16,53,090 1999 - 2000 10,40,143 4,29,240 6,1 0,903 2000 - 2001 14,55,300 4,44,570 10,10,730 2001 - 2002 17,59,300 4,59,900 12,99,400 2002 - 2003 12,21,600 5,51,880 6,69,720 2003 - 2004 17,04,222 5,97,870 11,06,352 2004 - 2005 12,96,326 7,35,840 5,60,486 DURING THE YEAR, THE ASSESSEE HAD SHOWN AGRICULTURE INCOME AT RS.7,59,300/- WHEREAS THE SAME HAS BEEN WORKED OUT BY THE A.O AT RS.4,59,900/-. THUS THE DIFFERENCE OF RS. 12,99,400/- WAS ADDED BY THE A.O. DURING THE YEAR, ASSESSEE CLAIMED INCOME OF RS.4,00,000/- ON SLAUGHT ER TAPPING OF 1500 TREES. THE A.O DOUBTED THIS CLAIM ON THE BASIS OF S TATEMENTS OF SHRI. T. RADHAKRISHNAN RECORDED DURING THE COURSE OF SEARCH. FROM THIS STATEMENT, THE A.O DREW AN INFERENCE THAT THE CLAIMED AGRICULT URE INCOME WAS INFLATED. THERE WAS NO OTHER MATERIAL TO SUPPORT THE ALLEGED INFLATION. CONSIDERING THIS MATERIAL ASPECT, THE LD CIT(A) HAS ESTIMATED THE IN COME FROM SLAUGHTER TAPPING OF 1500 TREES AT RS.3,50,000/-. THE LD CIT( A) HAS ESTIMATED RS.50,000/- TOWARDS THE EXPENDITURE ON PLANTATION, MAINTENANCE AND UP- KEEPING OF NEW TREES AND THUS HE HAS WORKED OUT NET INCOME FROM SLAUGHTER TAPPING AT RS.3,00,000/-. 11. REGARDING INCOME FROM THE REMAINING TREES, WHIC H WERE NOT SLAUGHTER TAPPED, THE LD CIT(A) HAS FOLLOWED THE FIRST APPELL ATE ORDER ON THE ISSUE FOR THE A.Y. 1998-99. 12. REGARDING THE LAND AND NUMBER OF TREES FROM WHI CH INCOME HAS BEEN COMPUTED BY THE A.O, THE OBSERVATION OF THE LD CIT( A) AFTER VERIFICATION OF THE RECORDS IS THAT THE ASSESSEE HAS BEEN SHOWING I NCOME FROM 23 ACRES OF LAND ON WHICH NUMBERS OF RUBBER TREES ARE 4640. HOW EVER, A.O HAS CONSIDERED INCOME FROM 18 ACRES OF LAND HAVING 3650 TREES ONLY IN CASE OF THE ASSESSEE. AS PER THE REVENUE RECORD, 18 ACRES O F LAND ARE IN THE NAME OF THE ASSESSEE. THE CONTENTION OF THE ASSESSEE REMAIN ED THAT HE IS HAVING INCOME FROM 30 ACRES OF LAND HAVING 6140 TREES AS C ONTAINED IN ANNEXURE 1 PREPARED ON THE BASIS OF ANNEXURE TO PANCHNAMA WHIC H HAS BEEN REPRODUCED BY THE LD CIT(A) IN ITS FIRST APPELLATE ORDER. DURI NG THE A.Y. 1998-99, THE A.O WAS DIRECTED TO VERIFY THE FACTUAL POSITION. IN RES PONSE THERETO, IT WAS STATED 9 BY THE A.O VIDE ORDER SHEET ENTRY DATED 17.9.2007 T HAT IT WAS VERIFIED AND FOUND THE NUMBER OF RUBBER TREES AS CONTAINED IN AN NEXURE 1 OF THE WRITTEN STATEMENT OF THE ASSESSEE. IT WAS SUBMITTED THAT TH IS FIGURE MATCHES WITH FIGURES AS CONTAINED IN ANNEXURE-B TO PANCHNAMA P REPARED UNDER SIGNATURE OF DDIT (INVESTIGATION), PUNE. ASSESSEE FURTHER CON TENDED THAT HE IS ALSO SHOWING INCOME FROM LAND OF SAVITRIAMMA (MOTHER) (7 ACRES- 1500 TREES); MS. KIRTI (DAUGHTER) (1.25 ACRE 300 TREES); V. UN NIRAMAN NAIR (FATHER) AND SAVITRIAMMA (MOTHER) ( 2 ACRES 290 TREES); SETHUM ADHAVAN (BROTHER) (1.75 ACRES 400 TREES);, P. CHANDRAKALA (WIFE) ( 3 ACRES 600 TREES); AND C.P. UNNIKRISHNAN (BORHTER ( 5.5 ACRES 1250 TREES ). IT WAS CONTENDED THAT OUT OF THESE TREES, 1500 STOOD IN THE LAND ADMEASUR ING 7 ACRE BELONGING TO SMT. SAVITRIAMMA WERE SUBJECTED TO SLAUGHTER TAPPIN G. IT WAS CONTENDED BY THE ASSESSEE THAT THE INCOME FROM AGRICULTURE LAND BELONGING TO THE SAID PERSONS ARE BEING SHOWN BY THE ASSESSEE BECAUSE THE SE PERSONS HAVE ALLOWED THE ASSESSEE TO USE THE LAND AND ENJOY INCO ME FROM THE SALE. IT WAS SUBMITTED THAT THESE PERSONS HAVE NEVER SHOWN ANY I NCOME FROM THE ABOVE SAID LAND. CONSIDERING THESE SUBMISSIONS AND FOLLOW ING THE FIRST APPELLATE ORDER ON THE ISSUE FOR THE A.Y. 1998-99, THE LD CIT (A) HAS DIRECTED THE A.O TO VERIFY THE CLAIM OF THE ASSESSEE THAT INCOME FRO M TREES ON THE LAND INVENTORIZED IN ANNEXURE-B TO PANCHNAMA DRAWN AT PALAKKAD, KERALA, DURING THE COURSE OF SEARCH ARE STANDING IN NAMES OF HIS P ARENTS, AND OTHERS, AND INCOME THEREFROM HAS NOT BEEN CLAIMED BY THEM AND I F THE CLAIM OF THE ASSESSEES IS FOUND TO BE CORRECT INCOME FROM TREES ON THE LAND OF THESE PERSONS SHALL BE INCLUDED IN THE AGRICULTURE INCOME OF THE ASSESSEE FOR THE RATE PURPOSE. REGARDING THE AGRICULTURE INCOME IN C ASE OF MS. KIRTI, MINOR DAUGHTER OF THE ASSESSEE, THE LD. CIT(A) HELD THAT THE ASSESSEE HAS RIGHTLY CLUBBED HER INCOME FROM AGRICULTURE U/S. 64 OF THE ACT. 13. THE LD CIT(A) CONSIDERING THE TOTALITY OF THE F ACTS AND CIRCUMSTANCES OF THE CASE ON THE ISSUE HAS ALSO HELD THAT THE ASSESS EE DESERVES TO BE ALLOWED DEDUCTION OF 35% ON ACCOUNT OF EXPENSES FROM GROSS RECEIPTS ESTIMATED BY THE A.O AS AGAINST SUCH ALLOWANCE OF 30% ESTIMATED BY THE A.O. THE LD CIT(A) HAS BASED HIS FINDING ON THE DECISION TAKEN IN THIS REGARD BY THE FIRST APPELLATE AUTHORITY IN THE A.Y. 1998-99 WHICH HAS N OT BEEN QUESTIONED BY THE REVENUE. THE LD CIT(A) HAS, HOWEVER, UPHELD THE FIN DINGS OF THE A.O ESTIMATING THE GROSS RECEIPT PER RUBBER TREE APPREC IATING THE OBSERVATION OF THE A.O THAT THE ASSESSEE IS BASICALLY A BUSINESS M AN AND THEREFORE IT IS NOT EXPECTED FROM HIM TO GIVE MUCH ATTENTION TOWARDS AG RICULTURE, HENCE ONLY THE BENEFIT OF MINIMUM GROSS RECEIPT FROM SALE OF R UBBER IS GIVEN. LD CIT(A) FURTHER DIRECTED TO TAKE THE RUBBER TREES AT 4640 ( AFTER DEDUCING THE TREES WHICH WERE SUBJECTED TO SLAUGHTER TAPPING) AND SUBJ ECT TO THE VERIFICATION OF ASSESSEES CLAIM THAT INCOME FROM RUBBER TREES GROW N ON LAND STANDING IN THE NAMES OF SMT. SAVITRIAMMA, SHRI UNNIRAMAN NAIR AND SHRI SETHUMADHAVAN HAS NOT BEEN CLAIMED IN INDIVIDUAL ASSETS OF THESE PERSONS OR HAS NOT BEEN OTHERWISE ENJOYED BY THESE PERSONS FOR THE PURPOSE OF THEIR HOUSEHOLD EXPENSES, ALLOW THE CLAIM OF THE ASSESSEE. 14. REGARDING INCOME FROM COCONUT TREES AND MANGO T REES, THE LD CIT(A) HAS REPRODUCED THE SUMMARY OF INVENTORY OF COCONUT TREES, MANGO TREES AND OTHER TREES FOUND AND INVENTORIZED AT THE TIME OF S EARCH AND CONTAINED IN ANNEXURE B TO PANCHNAMA AT PAGES 29 & 30 OF THE F IRST APPELLATE ORDER. THE LD CIT(A) HAS NOTED FROM THE SUMMARY THAT THE COCON UT TREES ARE LOCATED ON THE LAND OWNED BY ASSESSEE, WHEREAS OUT OF 34 MANGO TREES, 18 MANGO TREES ARE LOCATED ON THE LAND STANDING IN THE NAME OF MS. KIRTI, A MINOR DAUGHTER OF THE ASSESSEE. LD CIT(A) HAS OBSERVED THAT THE A.O H AS MERELY HELD THAT INCOME FROM SUCH COCONUT TREES AND MANGO TREES WAS UTILIZED FOR INCURRING EXPENDITURE IN CONNECTION WITH RUBBER PLANTATION AN D THEREFORE, AS AGAINST 33% EXPENDITURE, WITH REFERENCE TO GROSS RECEIPT OF RUBBER, THE A.O ALLOWED 30% EXPENDITURE. THE LD CIT(A) FOLLOWING THE DECISI ON OF FIRST APPELLATE AUTHORITY IN THE A.Y. 1998-99 IN THIS REGARD, HAS E STIMATED THAT ONE COCONUT TREE SHALL YIELD 150 COCONUTS IN A YEAR AND AFTER D EDUCTING OF EXPENSES, NET INCOME FROM COCONUT WOULD BE AT RS. 3.25 PER COCONU T FOR A.Y. UNDER 10 CONSIDERATION. THUS, HE WORKED OUT INCOME OF RS.68, 250/- FROM 140 COCONUT TREES PER ANNUM FOR THE A.Y. UNDER CONSIDERATION I. E. 2001-02. 15. REGARDING MANGO TREES, THE LD CIT(A) OBSERVED T HAT ASSESSEE HAS WORKED OUT SUCH INCOME AT RS.5000/- MINIMUM AND MAX IMUM AT RS.10,000/- PER TREE PER ANNUM. ON ACTUAL BASIS, SU CH INCOME HAS BEEN WORKED AT RS. 80,000/- AND RS.16,000/- TAKING INTO ACCOUNT ONLY 16 MANGO TREES, WHEREAS THE NUMBER OF SUCH TREES AS PER THE SUMMARIZED TABLE WAS FOUND AT 34. SINCE THE ASSESSEE HAD NOT MAINTAINED ANY RECORDS IN RESPECT OF INCOME FROM MANGO TREES, THE LD CIT(A) FOUND IT REA SONABLE TO WORK OUT NET INCOME FROM EACH MANGO TREE AT THE RATE OF RS.3500/ - AFTER DEDUCTING OF EXPENSES. HE ACCORDINGLY HAS WORKED OUT INCOME FROM MANGO TREES DURING THE YEAR AT RS.1,19,000/-. THE LD CIT(A) HAS FURTHE R DIRECTED THAT THE DIFFERENCE BETWEEN THE AGRICULTURAL INCOME SHOWN BY THE ASSESSEE IN RETURN OF INCOME AND AS COMPUTED IN ACCORDANCE WITH HIS DI RECTION IN THE APPELLATE ORDER SHALL BE ASSESSED AS INCOME OF THE ASSESSEE F ROM UNDISCLOSED SOURCES. 16. CONSIDERING THE ABOVE FINDINGS GIVEN BY THE LD CIT(A), WE FIND THAT IT IS BASED UPON THE AREA OF LAND AND NUMBER OF TREES FOU ND DURING THE COURSE OF SEARCH AND ESTIMATION OF INCOME AT LOWER POSSIBLE L EVEL KEEPING IN MIND THAT IT WAS NOT POSSIBLE FOR THE ASSESSEE TO GIVE THE EX PECTED ATTENTION TO THE AGRICULTURAL ACTIVITIES SINCE HE WAS HAVING OTHER B USINESS ALSO AND THE JUST EXPENSES WHICH ARE REQUIRED TO CULTIVATE THE ABOVE AGRICULTURAL ACTIVITIES LIKE PLANTATION OF TREE, AND ITS MAINTENANCE ETC.. THE F IRST APPELLATE ORDER ON THE ISSUE AS DISCUSSED ABOVE IS REASONED ONE AND HENCE WE ARE NOT INCLINED TO INTERFERE THEREWITH. THE SAME IS UPHELD. THE GROUND NO. 3 IS ACCORDINGLY REJECTED. 17. AS THE FACTS ARE IDENTICAL THIS YEAR, WE FIND N O REASON TO TAKE DIFFERENT VIEW. WE, THEREFORE, CONFIRM THE ORDER OF THE LD. CIT(A) AND DISMISS THE GROUND NO.3. 18. THE NEXT ISSUE IN GROUND NO.4 OF THE REVENUES APPEAL IS AS UNDER: THE LEARNED CIT(A) HAS ERRED IN TAKING INTO ACCOUNT AGRICULTURAL INCOME OF THE RELATIONS OF THE ASSESSEE AS INCOME O F THE ASSESSEE, WHICH WAS A PLOY USED TO EXPLAIN THE INCOME FROM UN DISCLOSED SOURCES. 19. WE HAVE HEARD THE PARTIES. THE LD. COUNSEL SUB MITS THAT IDENTICAL ISSUES ARE ALSO IN THE A.YRS. 1998-99, 1999-2000, 2 000-01 AND 2001-02, BUT THE DEPARTMENT HAS NOT RAISED ANY GROUND ON THIS IS SUE IN THE A.Y. 1998-99 TO 2002-03 AND HENCE, ON THE PRINCIPLE OF CONSISTEN CY, DEPARTMENT MAY NOT BE ALLOWED TO RAISE THE GROUND NOW. WE HAVE ALSO H EARD THE LD. CIT(DR). THE STATEMENT OF THE LD. COUNSEL IS NOT CONTROVERTE D BY THE REVENUE. IF THE REVENUE HAS NOT CHALLENGED THE ORDER OF THE LD. CIT (A) ON THE IDENTICAL ISSUE IN THE PRECEDING YEARS, NOTHING HAS BEEN MADE OUT BEFORE US HOW SAME ISSUE IS RAISED IN THIS YEAR. ON THE PRINCIPLE S OF CONSISTENCY, WE DISMISS THE GROUND NO.4 TAKEN BY THE REVENUE. 11 20. NOW WE TAKE UP THE ASSESSEES APPEAL FOR A.Y. 2 004-05 BEING ITA.NO.953/PN/2008. 21. GROUND NO.1 IS IN RESPECT OF ADDITION SUSTAINED TO THE EXTENT OF RS.11,70,000/- ON ACCOUNT OF CASH PAYMENT VOUCHERS SEIZED DURING THE COURSE OF SEARCH ACTION. ALTERNATIVELY, IN GROUND NO.2, PLEA IS TAKEN THAT THE ADDITION OF RS.11,70,000/- IS OUT OF SALE PROCEEDS OF RS.49,14,500/- (AFTER CONSIDERING RELIEF GIVEN BY THE CIT(A)), THE BENEFI T OF THE TELESCOPING MAY BE GIVEN. 22. THE ASSESSING OFFICER HAS DISCUSSED THIS ISSUE IN PARAS NO.11 AND 12 OF THE ASSESSMENT ORDER. THE ASSESSING OFFICER HAS NO TED THAT DURING THE COURSE OF SEARCH AT THE RESIDENCE OF THE ASSESSEES BROTHER, SRI C.P.SETHUMADHAVAN, PAPERS WERE SEIZED (BUNDLE NO.1 PAGES 1 TO 208). THOSE WERE THE VOUCHERS PREPARED BY M/S.KIRTI DEVEL OPERS, WHICH IS A PROPRIETORY CONCERN OF THE ASSESSEE. AS PER THE SE IZED VOUCHERS, IT WAS NOTICED THAT THE ASSESSEE HAS MADE PAYMENTS TO VARI OUS FARMERS FROM WHOM THE ASSESSEE HAS PURCHASED THE LANDS. ON THE VOUCHERS, NAME OF THE FARMER AND AMOUNT WAS ALSO WRITTEN. THOSE VOUCHERS WERE SIGNED BY THE FARMERS AND SIMILAR TYPE OF VOUCHERS WERE FOUND IN THE PREMISES OF SHRI K.B.JOSHI, CHARTERED ACCOUNTANT, DURING THE CO URSE OF SURVEY ACTION. THE ASSESSEES STATEMENT WAS RECORDED SEEKING THE E XPLANATION OF THOSE VOUCHERS DURING THE COURSE OF SEARCH, IN WHICH THE ASSESSEE ADMITTED THAT CASH PAYMENTS TO THE VARIOUS LAND OWNERS WERE NOT R ECORDED IN THE BOOKS OF ACCOUNT. THE STATEMENT OF MS.SUMEDHA JOSHI, ACCOUN TANT OF THE ASSESSEE, WAS ALSO RECORDED AND SHE STATED THAT THE CASH VOUC HERS SEIZED WERE PREPARED BY HER ON THE DIRECTIONS OF THE ASSESSEE A ND THOSE PAYMENTS WERE NOT RECORDED IN THE BOOKS OF ACCOUNT. THE ASSESSIN G OFFICER HAS FURTHER NOTED THAT THE NATURE AND TYPE OF VOUCHERS FOUND FR OM THE RESIDENCE OF THE ASSESSEES BROTHER SRI C.P.SETHUMADHAVAN IN BUNDLE NO.1 ARE EXACTLY SAME AS THAT OF THE VOUCHERS SEIZED FROM THE OFFICE OF T HE ASSESSEE. THE ASSESSING OFFICER WORKED OUT THE CASH PAYMENTS ON T HE BASIS OF THE SEIZED VOUCHERS WHICH WAS RS.12,88,000/-. THE ASSESSING OF FICER HAS OBSERVED THAT IN THE SEIZED VOUCHERS, THE NAMES OF THE FARMERS AN D THEIR SIGNATURES AND AMOUNTS ARE APPEARING BUT THE DATE OF PAYMENT OR DA TE OF PREPARATION OF VOUCHER IS NOT RECORDED. THE ASSESSEE CLAIMED THAT THOSE PAYMENTS WERE MADE TO THE FARMERS PRIOR TO 01.04.1997 AND HENCE N O ADDITION CAN BE MADE, AS THOSE PAYMENTS ARE BEYOND THE PERIOD OF SI X YEARS FROM THE 12 PREVIOUS YEAR IN WHICH THE SEARCH ACTION IS CONDUCT ED. THE ASSESSING OFFICER CONSIDERED THOSE VOUCHERS IN THE HANDS OF THE ASSES SEE FOR THE PURPOSE OF MAKING THE ADDITION OF UNDISCLOSED INCOME THOUGH VO UCHERS WERE SEIZED FROM THE RESIDENCE OF SHRI C.P.SETHUMADHAVAN, BROTH ER OF THE ASSESSEE. THE ASSESSING OFFICER ACCORDINGLY MADE THE ADDITION OF RS.12,88,000/- IN THE HANDS OF THE ASSESSEE. 23. BEFORE THE LD. CIT(A), THE ASSESSEE CONTENDED T HAT VOUCHERS WERE PRIOR TO 01.04.1997. THE ASSESSEE ALSO GAVE THE RE CONCILIATION TO SHOW HOW THE SUM OF RS.12,88,000/- WAS ARRIVING WHICH WAS IN RESPECT OF THE CASH PAYMENTS OVER AND ABOVE THE ACCOUNTED TRANSACTIONS, WHICH IS REPRODUCED BY THE LD. CIT(A) ON PAGE NO.4 OF HIS ORDER. THE A SSESSEE CONTENDED THAT THE ENTIRE PAYMENTS WERE MADE PRIOR TO 01.04.1997 A ND HE PLEADED FOR DELETING THE ADDITION MADE BY THE ASSESSING OFFICER . THE LD. CIT(A) HELD THAT THE AMOUNT TO THE EXTENT OF RS.1,18,000/- HAS BEEN PAID BETWEEN 01.04.1994 TO 31.03.1997 WHICH RELATES TO PERIOD WH ICH IS NOT RELEVANT FOR THE ASSESSMENT YEAR UNDER APPEAL AND ACCORDINGLY GA VE THE RELIEF. SO FAR AS THE BALANCE AMOUNT OF RS.11,70,000/- IS CONCERNED, HE SUSTAINED THE ADDITION. HENCE, THE ASSESSEE IS IN APPEAL BEFORE US. 24. WE HAVE HEARD THE PARTIES AND PERUSED THE RECOR D. THE LD. COUNSEL ARGUED THAT THE PAYMENTS ARE MADE PRIOR TO 01.04.19 97 BUT NOTHING HAS BEEN PLACED BEFORE US TO DEMONSTRATE THAT ALL THE C ASH PAYMENTS TO THE FARMERS ARE MADE PRIOR TO 01.04.1997. THE ASSESSEE HAS DENIED THE PAYMENTS WHICH ARE FOUND RECORDED IN THE VOUCHERS B UT AS DATE WAS NOT APPEARING ON THE VOUCHERS, THE ASSESSEE TOOK THE ST AND THAT THOSE PAYMENTS ARE PRIOR TO 01.04.1997. IN OUR OPINION, THE ASSESSEE HAS TO DEMONSTRATE ONCE HE ADMITS THE PAYMENTS THAT THOSE PAYMENTS ARE MADE PRIOR TO 01.04.1997 AND NOT ONLY THAT THE ASSESSEE ALSO HAS TO STATE THE DATES ON WHICH THOSE PAYMENTS ARE MADE TO THE RESPE CTIVE SELLERS OF THE LANDS. WE FIND NO REASON TO INTERFERE WITH THE ORD ER OF THE LD. CIT(A) AS HE HAS ALREADY GIVEN RELIEF IN RESPECT OF THE PAYMENT WHICH WAS PRIOR TO 01.04.1997. SO FAR AS THE ALTERNATE PLEA OF THE AS SESSEE IS CONCERNED THAT THE BENEFIT OF TELESCOPING MAY BE GIVEN, CONSIDERIN G THE FACT THAT THE ADDITION TO THE EXTENT OF RS.39,14,000/- HAS BEEN S USTAINED OUT OF RS.40,98,000/-, THIS CLAIM OF THE ASSESSEE CAN BE CONSIDERED AFTER DECIDING GROUND NO.3 IN THE APPEAL. 13 25. SO FAR AS THE GROUND NO.3 IS CONCERNED, IT IS I N RESPECT OF THE ADDITION OF RS.39,14,500/- MADE ON THE BASIS OF THE SEIZED M ATERIAL TOWARDS UNEXPLAINED SALE PROCEEDS. THE OPERATIVE PART PERT AINING TO THIS PARTICULAR ADDITION MADE BY THE ASSESSING OFFICER IN THE ASSES SMENT ORDER IS AS UNDER: 13. DURING THE COURSE OF SEARCH AT THE RESIDENCE OF ASSESSEES BROTHER SHRI C.P.SETHUMADHAVAN, BUNDLE NO.2 WAS SEIZED. THE NOT INGS ON PAGE NO.26 OF THIS BUNDLE ARE AS UNDER: 10R RS.8,07,000/- REG RS. 31,000/- MAINT. RS. 50,000/- TOTAL RS.8,88,000/- 3R RS.2,42,000/- MAINT. RS. 15,000/- REG. RS. 12,500/- TOTAL RS.2,70,000/- RS.11,58,000/- 1 ACRE RS.28 LAKHS RS.39,58,000/- RECEIVED RS.20,50,000/- RS.19,08,000/- + REG THE COPY OF ABOVE MENTIONED SEIZED PAPER IS ANNEXED WITH THIS ORDER AS ANNEXURE -1. IN THE ABOVE MENTIONED PAPER 'R' IS TH E AREA OF LAND, 'REG' MEANS REGISTRATION CHARGES, 'MAINT.' MEANS MAINTENA NCE CHARGES AND 'ACRE' MEANS AREA OF LAND. FROM THE PERUSAL OF NOTINGS ON THIS PAGE IT CAN BE SEEN THAT THE VALUE OF 10R LAND IS RS.8,07,000/-, ON THI S AMOUNT THE REGISTRATION CHARGES ARE RS. 31,000/- AND MAINTENANCE CHARGES AR E RS. 50,000/-. THE TOTAL VALUE OF THE TRANSACTION IS RS.8,88,000/-. SI MILARLY FOR THE TRANSACTION OF 3 R LAND IS RS. 2,70,000/-. TOTAL OF THESE TWO TRAN SACTIONS HAS BEEN WRITTEN ON THE RIGHT HAND SIDE AT RS.11,58,000/-. FURTHER, THE VALUE OF 1 ACRE LAND IS RS.28 LAKH. ON THE RIGHT HAND SIDE, GROSS TOTAL FIG URE OF RS.39,58,000/- HAS BEEN MENTIONED I.E. TOTAL OF RS.11,58,000/- AND RS. 28,00,000/-. OUT OF RS.39,58,000/-, AMOUNT OF RS.20,50,000/- HAS BEEN R ECEIVED AND BALANCE RS.19,08,000/- AND REGISTRATION CHARGES ARE EITHER RECEIVED OR RECEIVABLE. ON THE SEIZED PAPER THERE IS NO MENTION OF LOCATION OF LAND OR SURVEY NUMBER OR DATE/ DATES OF TRANSACTIONS. BUT, ONE THING IS SURE THAT THE TRANSACTIONS HAVE TAKEN PLACE BECAUSE THE ASSESSEE HAS RECEIVED RS.20 ,50,000/- WHICH IS CLEAR FROM THE NOTING ON THE SEIZED DOCUMENT. THE NOTINGS ON THIS PAPER ARE REGARDING SALE OF LAND BY THE ASSESSEE. THE TRANSAC TIONS ARE SALE TRANSACTION CAN BE ESTABLISHED BY THE FACTS THAT ON THE SEIZED PAPER THE AMOUNT OF 'MAINTENANCE CHARGES' HAS BEEN ADDED. IT IS THE GEN ERAL PRACTICE OF THE ASSESSEE TO COLLECT MAINTENANCE CHARGES FROM MOST O F THE BUYERS AT THE RATE OF RS. 5,000/- PER R FOR MAINTAINING THE PLOTS FOR 15 YEARS FROM THE DATE OF SALE. AS PER BOOKS OF ACCOUNTS, THE ASSESSEE IS COL LECTING MAINTENANCE CHARGES. THERE MAY BE CERTAIN INSTANCES WHERE THE A SSESSEE HAS NOT COLLECTED THE MAINTENANCE CHARGES FROM HIS WELL KNO WN CUSTOMERS OR PERSONS. AS PER THE SEIZED DOCUMENT, FOR 10R LAND, THE MAINTENANCE CHARGES HAVE BEEN COLLECTED AT RS.50,000/- I.E. @ 5,000/- P ER R AND RS. 15,000/- HAVE BEEN COLLECTED FOR SALE OF 3R LAND. IT APPEARS THAT MAINTENANCE CHARGES HAVE NOT BEEN COLLECTED ON SALE OF 1 ACRE LAND AT R S. 28 LAKH. IT MAY BE AN EXCEPTIONAL CASE, WHERE BUYER MAY BE WELL KNOWN TO THE ASSESSEE AND WHEN A PERSON IS BUYING LAND FOR RS.28 LAKH, THE MAINTEN ANCE CHARGES AT RS. 2 LAKH MAY BE WAIVED OFF. THE TRANSACTIONS ARE SALE TRANSA CTIONS ARE ALSO ESTABLISHED BY THE FACT THAT THE ASSESSEE HAS RECEI VED RS.20,50,000/-AS MENTIONED ON THE SEIZED DOCUMENT. ON THE RIGHT HAND SIDE, THE LAST ENTRY IS RS.19,08,000/- + REG. AS MENTIONED ABOVE, THE FIGUR E OF RS.19,08,000/- HAS BEEN ARRIVED BY DEDUCTING RS.20,50,000/-, WHICH HAS BEEN RECEIVED BY THE ASSESSEE, FROM THE GROSS AMOUNT OF RS.39,58,000/-. THE NOTING OF WORD 'REG' WITH RS.19,08,000/- COULD ONLY BE FOR REGISTR ATION OF 1 ACRE LAND WHOSE 14 REGISTRATION CHARGES HAVE NOT BEEN ADDED IN THE SEI ZED DOCUMENT, ELSE FOR OTHER TWO TRANSACTIONS OF 10R AND 3R LAND, THE AMOU NT OF REGISTRATION CHARGES HAS BEEN ADDED IN THE TOTAL AMOUNT. THE NOT INGS ON THIS PAPER PROVES THAT THE ASSESSEE IS COLLECTING HUGE AMOUNT OF CASH ON SALE OF LAND. AS EVIDENCED BY THE SEIZED DOCUMENTS, THE ASSESSEE IS ALSO PAYING CASH TO THE FARMERS WHILE PURCHASING THE LAND. 14. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, TH E ASSESSEE WAS ASKED TO EXPLAIN THE ENTRIES MADE ON SEIZED PAPER NO. 26, THE DETAILS OF LOCATION OF LAND, THE DATES OF SALES TRANSACTIONS AND TO EXPLAI N AS TO HOW SAME HAVE BEEN ACCOUNTED FOR IN THE BOOKS OF ACCOUNTS. IN RES PONSE, IT WAS SUBMITTED BY THE ASSESSEE THAT HE HAS NOT SOLD ANY LAND AS DE TAILED ON THE SEIZED DOCUMENT. IT WAS SUBMITTED BY HIM THAT THE NOTINGS ON THE SEIZED DOCUMENT ARE SOME ROUGH CALCULATIONS AND NO SUCH TRANSACTION HAS TAKEN PLACE. THERE IS NO MENTION OF ANY SURVEY NUMBER AND DATE ON THE SEIZED DOCUMENT. IT IS AGAIN SUBMITTED THAT NO TRANSACTION HAS TAKEN PLACE AS PER THE SEIZED DOCUMENT. 15. THE CONTENTION OF THE ASSESSEE HAS BEEN CONSIDE RED BUT NOT ACCEPTED. SINCE, THERE ARE NO DETAILS OF LOCATION OF LAND, SU RVEY NUMBER AND DATES OF TRANSACTIONS, VERY EASILY THE ASSESSEE HAS STATED T HESE ARE ROUGH CALCULATIONS AND NO TRANSACTION HAS TAKEN PLACE. BUT THE CRUCIAL NOTING ON THE SEIZED DOCUMENT IS RECEIPT OF RS.20,50,000/-. HAD THERE BE EN NO TRANSACTION AS PER THE SEIZED DOCUMENT, THERE WOULD HAVE NOT BEEN A NO TING OF 'RECEIVED RS. 20,50,000'. THE ASSESSEE CAN NOT ESCAPE HIMSELF WIT HOUT PAYING THE TAX ON THE UNRECORDED SALES CONSIDERATION. THE ASSESSEE HA S DEFINITELY RECEIVED AMOUNT OF RS. 20,50,000/- AND BALANCE RS. 19,08,000 /- ALSO EITHER RECEIVED OR RECEIVABLE. IN ANY CASE THE SALE TRANSACTION HAS TAKEN PLACE FOR A CONSIDERATION OF RS. 39,58,000/-. FURTHER, THE ASSE SSEE HAS NOT INCLUDED THE REGISTRATION CHARGES ON SALE OF 1 ACRE LAND AT RS. 28 LAKH. AT THE RATE OF 5% THE STAMP DUTY AND REGISTRATION CHARGES WORKS OUT T O RS. 1,40,000/-.THUS, THE ENTIRE SALE TRANSACTION WORKS OUT AT RS. 40,98, 000/- I.E. RS. 39,58,000/- + RS. 1,40,000/-. SINCE, THE ASSESSEE HAS FAILED TO EXPLAIN AS TO WHICH LAND THESE TRANSACTIONS PERTAIN AND AS TO WHAT WAS THE C OST OF ACQUISITION, THE ENTIRE SALE PROCEEDS OF RS.40,98,000/- ARE ADDED TO THE UNDISCLOSED INCOME OF THE ASSESSEE. ALTHOUGH, THE DOCUMENT WAS SEIZED FROM THE RESIDENCE OF THE ASSESSEE'S BROTHER SHRI. C.P. SETHUMADHAVAN, HO WEVER, THE ADDITION IS MADE IN THE HANDS OF THE ASSESSEE BECAUSE SHRI C.P. MOHANDAS IS THE MAIN PERSON OF THE GROUP AND ONLY HE TAKES ALL THE BUSIN ESS DECISIONS REGARDING PURCHASE AND SALE OF LAND ON BEHALF OF ALL THE PERS ONS OF THE GROUP INVOLVED IN THE BUSINESS. 26. THE ASSESSEE CHALLENGED THE SAID ADDITION BEFOR E THE LD. CIT(A). THE LD. CIT(A) CONFIRMED THE VIEW TAKEN BY THE ASSESSIN G OFFICER FOR EXPLAINING THE ABBREVIATIONS USED BY THE ASSESSEE IN THE SEIZE D DOCUMENTS. AT THE SAME TIME, HE DIRECTED THE ASSESSING OFFICER TO EXC LUDE THE AMOUNT WRITTEN AGAINST THE ABBREVIATION REG WHICH WAS IN RESPECT O F REGISTRATION CHARGES. NOW, THE ASSESSEE IS IN APPEAL BEFORE US. 27. WE HAVE HEARD THE PARTIES AND PERUSED THE RECOR D. NOTHING HAS BEEN CONTROVERTED BEFORE US IN RESPECT OF THE MEANING OF THE ABBREVIATION EXPLAINED BY THE ASSESSING OFFICER. THE ONLY ARGUM ENT OF THE ASSESSEE IS THAT THOSE DOCUMENTS WERE FOUND IN THE RESIDENCE OF THE ASSESSEES BROTHER AND HENCE, NO ADDITION CAN BE MADE. 15 28. WE FIND THAT NOWHERE IT IS STATED BY THE ASSESS EE THAT THOSE TRANSACTIONS ARE NOT HIS TRANSACTIONS BUT HIS BROTH ERS TRANSACTIONS. IN FACT THE ASSESSEE ADMITTED THAT THOSE TRANSACTIONS ARE H IS TRANSACTIONS. IT IS NOT UNCOMMON FOR THE BUILDER AND DEVELOPER TO WRITE THE AMOUNTS OF THEIR TRANSACTIONS BY GIVING SOME COMMERCIAL ABBREVIATION . IN OUR OPINION, THE TRANSACTIONS FOUND IN THE SEIZED MATERIAL PERTAININ G TO THE SALE OF THE PLOTS OF THE LAND ARE LOGICAL AND NO INTERFERENCE IS REQUIRE D ON THE MEANING OF THE ABBREVIATIONS USED BY THE ASSESSEE AS MODUS OPERANDI IN RESPECT OF THE TRANSACTIONS WHICH ARE NOT RECORDED IN THE BOOKS OF ACCOUNT. IT IS NOT DISPUTED IN THIS CASE THAT ASSESSEE IS INVOLVED IN THE BUSINESS OF HUGE PLOTTING LANDS AND THOUGH HIS BROTHER WAS INVOLVED IN HIS BUSINESS BUT THE LAND TRANSACTIONS WERE MADE BY M/S.KIRTI DEVELOPERS , WHICH IS THE PROPRIETORY CONCERN OF THE ASSESSEE. IN OUR OPINIO N, NO INTERFERENCE IS CALLED FOR IN THE ORDER OF THE LD. CIT(A) ON THIS ACCOUNT. ACCORDINGLY, GROUND NO.3 IS DISMISSED. 29. NOW WE CONSIDER THE ALTERNATE PLEA OF THE ASSES SEE TAKEN IN GROUND NO.2, MORE SPECIFICALLY IN RESPECT OF GROUND NO.1. ADMITTEDLY THE ADDITION OF RS.39,14,500/- IS MADE TREATING THE SAME AS UNEXPLA INED SALE PROCEEDS. IF THE ADDITION OF RS.11,70,000/- IS SUSTAINED, I.E., IN RESPECT OF THE CASH PAYMENTS TO THE LAND SELLERS/FARMERS, THEN TO THAT EXTENT THE ASSESSEE SHOULD BE GIVEN THE BENEFIT OF TELESCOPING. WE ACC ORDINGLY ALLOW GROUND NO.2 AND DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION OF RS.11,70,000/- BY GIVING THE BENEFIT OF TELESCOPING FROM THE ADDITION OF RS.39,14,500/-. ACCORDINGLY, GROUND NO.2 IS ALLOWE D. 30. SO FAR AS GROUND NO.4 IS CONCERNED, THE ASSESSE E HAS NOT PRESSED THE SAID GROUND. HENCE, THE SAME IS DISMISSED AS NOT P RESSED WHICH IS IN RESPECT OF PARTLY REJECTING THE AGRICULTURAL INCOME DECLARED BY THE ASSESSEE. 31. THE NEXT GROUND IS GROUND NO.5 WHICH IS IN RESP ECT OF ADDITION TO THE HOUSEHOLD EXPENSES. THE ASSESSING OFFICER MADE THE ADDITION CONSIDERING THE LOW HOUSEHOLD EXPENSES BY RS.90,610/-. IDENTIC AL ADDITION HAS BEEN CONSIDERED WHILE DECIDING THE ASSESSEES APPEAL FOR A.Y. 2003-04. FOLLOWING OUR REASONS IN THE SAID YEAR, WE CONFIRM THE ADDITI ON IN THIS YEAR ALSO. ACCORDINGLY, GROUND NO.5 IS DISMISSED. 16 32. NOW WE TAKE UP THE REVENUE APPEAL IN ITA.NO.941 /PN/2008. 33. GROUND NO.1 OF THE REVENUE IS IN RESPECT OF ALL OWING THE TELESCOPING BENEFIT OF RS.12,50,000/- WHICH WAS THE ADDITION MA DE BY THE ASSESSING OFFICER ON ACCOUNT OF UNACCOUNTED DEPOSITS IN THE B ANK. THE ASSESSING OFFICER HAS OBSERVED THAT IN THE COURSE OF ASSESSME NT PROCEEDINGS, BANK ACCOUNT OF THE ASSESSEE MAINTAINED WITH THE SOUTH I NDIAN BANK LTD., A/C NO.5709, THIRUVILWAMALA, KERALA, WAS EXAMINED. IT WAS FOUND THAT ON 15.01.2004, THE ASSESSEE HAS DEPOSITED AN AMOUNT OF RS.12,50,000/- AND WHICH WAS IMMEDIATELY WITHDRAWN. THE ASSESSEE EXPL AINED THAT HE HAS AGREED TO SELL HIS AGRICULTURAL LAND AND HE HAS ALS O RECEIVED THE AMOUNT OF RS.12,50,000/- FOR THE SAME. BUT THE DEAL WAS NOT FINALIZED, HENCE, THE CASH WAS WITHDRAWN AND RETURNED TO THE CONCERNED PE RSON. THE ASSESSING OFFICER REJECTED THE EXPLANATION OF THE ASSESSEE AS NO DETAILS WERE GIVEN IN RESPECT OF THE PERSON WITH WHOM HE HAS ENTERED INTO THE SAID TRANSACTION. THE ASSESSING OFFICER TREATED THE ASSESSEES EXPLAN ATION AS GENERAL EXPLANATION AND MADE THE ADDITION OF RS.12,50,000/- AS ADMITTEDLY THE SAID TRANSACTION WAS NOT RECORDED IN THE BOOKS OF ACCOUN T OF THE ASSESSEE. THE LD. CIT(A) THOUGH CONFIRMED THE ADDITION BUT GAVE T HE BENEFIT OF TELESCOPING FROM THE ADDITION MADE IN RESPECT OF UNACCOUNTED SA LE OF RS.39,14,500/-. IN OUR OPINION THE ORDER OF THE CIT(A) IS TO BE UPHELD AS ADMITTEDLY THE ASSESSEE HAD THE SURPLUS CASH OF RS.39,14,500/- (AF TER REDUCING RS.11,70,000/- ALSO THE ASSESSEE HAS SURPLUS CASH). WE FIND NO REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A) AS ADDIT ION TO EXTENT OF RS.39,14,500/- HAS GENERATED SURPLUS CASH AND PRESU MPTION CAN BE MADE THAT PART OF SAME USED FOR DEPOSITING IN BANK ACCOU NT. ACCORDINGLY, THE RELIEF GIVEN BY THE CIT(A) IS UPHELD. GROUND NO.1 IS DISMISSED. 34. GROUND NO.2 IS IN RESPECT OF DELETION OF ADDITI ON OF RS.17,44,727/- ON ACCOUNT OF PAYMENTS TO LAND OWNERS OVER AND ABOVE T HE AGREEMENT PRICE. WHILE DECIDING THE ASSESSEES APPEAL FOR A.Y. 2003- 04, WE HAVE UPHELD THE ORDER OF THE LD. CIT(A) FOLLOWING THE DECISION OF T HE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2002-03 IN ITA.NO.357/PN/2007. W E, THEREFORE, CONFIRM THE ORDER OF THE CIT(A) FOLLOWING OUR REASONING IN DEPARTMENTS APPEAL FOR THE A.Y. 2003-04. ACCORDINGLY, GROUND NO.2 IS DISM ISSED. 35. GROUND NO.3 IS IN RESPECT OF RELIEF OF RS.2,24, 358/- GIVEN BY THE LD. CIT(A) OUT OF THE ADDITION OF RS.5,60,486/- BY THE ASSESSING OFFICER TREATING 17 THE AGRICULTURAL INCOME AS UNDISCLOSED INCOME FROM THE LAND BUSINESS. WHILE DECIDING THE REVENUES APPEAL FOR THE A.Y. 2003-04, WE HAVE CONFIRMED THE ORDER OF THE LD. CIT(A). AS THE FACTS ARE IDENTICA L IN THIS YEAR, WE CONFIRM THE ORDER OF THE LD. CIT(A) AND DISMISS GROUND NO.3 TAKEN BY THE REVENUE. 36. THE NEXT GROUND, I.E., GROUND NO.4, IS IN RESPE CT OF INCLUSION OF THE AGRICULTURAL INCOME OF THE RELATIVES AS AGRICULTURA L INCOME OF THE ASSESSEE. THE REVENUE HAS CHALLENGED THE ORDER OF THE LD. CIT (A) DELETING THE ADDITION. IDENTICAL ISSUE HAS BEEN CONSIDERED BY U S IN REVENUE APPEAL FOR A.Y. 2003-04 AND WE HAVE DISMISSED THE GROUND TAKEN BY THE REVENUE. FOLLOWING REASONING ON THIS ISSUE IN THE A.Y. 2003- 04 IN REVENUES APPEAL, WE DISMISS GROUND NO.4 TAKEN BY THE REVENUE. 37. GROUND NO.5 IS IN RESPECT OF APPLICABILITY OF S ECTION 64 WHETHER THE INCOME OF THE WIFE CAN BE ADDED IN THE HANDS OF THE ASSESSEE. THE ASSESSING OFFICER HAS OBSERVED IN PARA NO.44 OF THE ASSESSMENT ORDER THAT SMT.P.CHANDRAKALA, WIFE OF THE ASSESSEE, IS NOT HAV ING ANY KNOWN SOURCES OF INCOME OTHER THAN AGRICULTURAL INCOME FROM 600 T REES. HE ACCORDINGLY MADE THE ADDITION MADE IN THE CASE OF SMT.P.CHANDRA KALA AT RS.1,15,505/- WITH THE INCOME OF THE ASSESSEE AFTER DEDUCTING RS. 5,68,878/- AND RS.2,09,520/- ON ACCOUNT OF FURNISHING OF THE BUNGA LOW FOR THE POST-SEARCH PERIOD AND PRE-SEARCH PERIOD RESPECTIVELY. THE LD. CIT(A) DELETED THE ADDITION BY HOLDING THAT THE CLUBBING OF THE INCOME OF SMT.P.CHANDRAKALA, WIFE OF THE ASSESSEE, TO THE INCOME OF THE ASSESSEE TO THE EXTENT OF RS.1,15,505/- IS NOT IN ACCORDANCE WITH THE LAW. HE , THEREFORE, DELETED THE ADDITION IN THE HANDS OF THE ASSESSEE. WE FIND THA T IDENTICAL ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE IN THE A.Y. 1998- 99, APPEAL BEING ITA.NO.1647/PN/2007 BY DISMISSING GROUND NO.3 OF TH E REVENUE. WE ACCORDINGLY UPHOLD THE ORDER OF THE CIT(A) ON THIS ISSUE AND GROUND NO.5 OF THE REVENUE IS DISMISSED. 38. GROUND NO.6 IS DELETION OF PROTECTIVE ADDITION OF RS.4,25,000/- AS UNACCOUNTED PAYMENT TO SHRI BABAN SHIVAJI MOZE AND SHRI SUNIL KHESE. THE ASSESSING OFFICER HAS NOTED THAT SHRI N.V.ACHUTDAS IS RELATIVE OF THE ASSESSEE AND HE HAS PURCHASED LANDS IN THE NAMES OF HIS BROTHER AND RELATIVES. THE ASSESSING OFFICER HAS ALSO NOTED TH AT SHRI N.V.ACHUTDAS HAS PURCHASED LANDS AT LOHAGAON FROM KHANDAVE FAMILIES DURING F.Y. 2002-03 AND 2003-04. THOSE LANDS WERE PURCHASED AS PER THE DEED OF PURCHASE FOR 18 RS.4,00,000/- PER ACRE AND COMMISSION OF RS.2,00,00 0/- PER ACRE WHICH WAS AGREED TO BE PAID TO SHRI BABAN SHIVAJI MOZE AND SH RI SUNIL KHESE. SHRI N.V.ACHUTDAS PURCHASED LANDS DURING THE ABOVE FINANCIAL YEAR. THE ASSESSING OFFICER HAS NOTED THAT THE COMMISSION ON THOSE DEALS WORKED OUT AT RS.21,85,000/-. ADMITTEDLY THE ADDITION WAS MAD E IN THE HANDS OF SHRI N.V.ACHUTDAS ON SUBSTANTIVE BASIS SINCE THE LANDS W ERE PURCHASED IN HIS NAME. BUT THE ASSESSING OFFICER MADE THE ADDITION IN THE HANDS OF THE ASSESSEE ON PROTECTIVE BASIS TO THE EXTENT OF RS.4, 25,000/- BY OBSERVING THAT ALL THOSE TRANSACTIONS ARE DONE BY THE ASSESSE E. THE LD. CIT(A) DELETED THE ADDITION. 39. WE HAVE HEARD THE PARTIES. ADMITTEDLY NOTHING HAS BEEN FOUND AGAINST THE ASSESSEE TO HOLD THAT THE TRANSACTIONS ON THE NAME OF SHRI N.V.ACHUTDAS WERE BENAMI TRANSACTIONS. IT IS ONLY THE DOUBT OF THE ASSESSING OFFICER AND HENCE THE ADDITION WAS MADE I N THE HANDS OF THE ASSESSEE. THE LD. COUNSEL SUBMITS THAT THE ADDITIO N MADE ON SUBSTANTIVE BASIS IN THE HANDS OF SHRI N.V.ACHUTDAS FOR A.Y. 20 04-05 HAS BEEN DELETED AND SAME ORDER HAS BEEN CONFIRMED BY THE TRIBUNAL I N ITA.NO.1214/PN/2009 DATED 31.08.2009. ONCE SUBSTANTIVE ADDITION IS DEL ETED AND MOREOVER NOTHING HAS BEEN FOUND AGAINST THE ASSESSEE TO SHOW THAT IN FACT THE SOURCES OF THE SAID TRANSACTIONS ROUTED THROUGH ASSESSEE, N O ADDITION CAN BE MADE. WHILE DECIDING THE APPEAL FILED BY THE REVENUE IN T HE CASE OF SHRI N.V.ACHUTDAS IN ITA.NO.1214/PN/2007 DATED 31.0 8.2009, THE TRIBUNAL HAS HELD THAT THERE WAS NO EVIDENCE TO SUPPORT THE ADDITION MADE IN THE HANDS OF SHRI N.V.ACHUTDAS. IN OUR OPINION, THE VI EW TAKEN BY THE LD. CIT(A) IS CORRECT VIEW ON THIS ISSUE AND NO INTERFE RENCE IS CALLED FOR. WE ACCORDINGLY CONFIRM THE ORDER OF THE CIT(A) AND REL EVANT GROUND TAKEN BY THE REVENUE IS DISMISSED. 40. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED AND BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE 10 TH DAY OF SEPTEMBER, 2012. SD/- SD/- ( G.S.PANNU ) ( R.S.PADVEKAR ) ACCOUNTANT MEMBER JUDICIAL MEMBER GSPS PUNE, DATED THE 10 TH SEPTEMBER, 2012. 19 COPY OF THE ORDER IS FORWARDED TO: 1. THE ASSESSEE 2. THE DCIT, CENTRAL CIRCLE-1(1), PUNE. 3. THE CIT(A)-I, PUNE. 4. THE CIT(CENTRAL), PUNE. 5. THE DR B BENCH, PUNE. 6. GUARD FILE. BY ORDER //TRUE COPY// SR.PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, PUNE.