M/s. Nitin Palekar & Co, Pune V. ITO, Ward 1(3), Pune

ITA 957/PUN/2012

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0555 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 16-10-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 11-05-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S K RASTOGI; DHEERAJ KUMAR JAIN
• Assessee Lawyers: S N DOSHI
• Keywords: Unexplained investment; Sale consideration of property below Jantri Value; Income from undisclosed sources; Search and seizure; Loose papers; Principle of natural justice; Deemed to accrue or arise in india
• Section: 143(3); 133A; 133(6); 69; 132

Judgement Text

] ]] ] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE , !, # $ BEFORE MS. SUSHMA CHOWLA, JM AND SHRI PRADIP KUMAR KEDIA, AM ITA NO.956/PN/2012 ASSESSMENT YEAR : 2008-09 M/S ROCKSON INDUSTRIES, 80/85, OM LAXMI NIWAS, PRABHAT ROAD, PUNE 411 004. PAN : AAMFM4035H . APPELLANT VS. THE INCOME TAX OFFICER, WARD 3(1), PUNE. . RESPONDENT ITA NO.957/PN/2012 ASSESSMENT YEAR : 2008-09 M/S NITIN PALEKAR & CO., OM LAXMI NIWAS, PRABHAT ROAD, PUNE 411 004. PAN : AAMFM4035B . APPELLANT VS. THE INCOME TAX OFFICER, WARD 3(1), PUNE. . RESPONDENT / APPELLANT BY : SHRI S.N. DOSHI / RESPONDENT BY : SHRI S.K. RASTOGI & SHRI DHEERAJ KUMAR JAIN / DATE OF HEARING : 26.11.2015 / DATE OF PRONOUNCEMENT: 30.12.2015 % / ORDER PER PRADIP KUMAR KEDIA, AM : THE CAPTIONED TWO APPEALS ARE INTER CONNECTED AND A RISING FROM THE SAME CAUSE OF ACTION. SINCE THE FACTS ARE IDENTICAL AND INTER CONNECTED, BOTH THE APPEALS ARE DISPOSED-OFF BY THIS COMMON ORDER FOR T HE SAKE OF BREVITY. 2 ITA NO.956/PN/2012 ITA NO.957/PN/2012 2. THE FACTS BEING IDENTICAL, WE SHALL TAKE ITA NO. 956/PN/2012 IN THE CASE OF M/S ROCKSON INDUSTRIES AS THE LEAD CASE. THIS A PPEAL IS DIRECTED AGAINST THE ORDER OF CIT(A)-II, PUNE DATED 06.01.2012 RELATING TO ASSESSMENT YEAR 2008-09 PASSED UNDER SECTION 143(3) R.W.S. 147 OF THE INCOM E-TAX ACT, 1961 (IN SHORT THE ACT). 3. IN THIS APPEAL, THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE REPRODUCED AS UNDER :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LEARNED CIT(A) HAS ERRED IN ASSUMING A PIECE OF PAPER AS CONSTITUTING ISSAR PAVATI I.E. ADVANCE RECEIPT DISREGARDING THE FACTUAL ASPECTS EXPLAINED BEFORE HIM. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LEARNED CIT(A) HAS ERRED IN AVAILING THE POWER OF PRESUMPTION OVERLOOK ING THE FACT THAT SUCH A POWER IS CONFINED ONLY TO A CASE WHERE SEARCH ACTION IS COND UCTED U/S 132, WHILE IN THE CASE OF THE APPELLANT THIS PIECE OF PAPER WAS FOUND IN S URVEY ACTION U/S 133 WHICH DOES NOT CONFIRM SUCH A POWER OF PRESUMPTION. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LEARNED CIT(A) HAS ERRED IN ASSUMING THE SAID PIECE OF PAPER AND CONTE NTS THEREOF AS CONSTITUTING ISSAR PAVATI WITHOUT BRINGING ON RECORD ANY COGENT MATERI AL OR EVIDENCE TO SUPPORT SUCH AN ASSUMPTION AND HAS FAILED TO DISCHARGE THE ONUS THAT LAID UPON HIM TO JUSTIFY THE ADDITION. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND CONSIDERING THE DENIAL BY THE APPELLANT THE CIT(A)/ASSESSING OFFICER HAVE FAILED TO ADDUCE ANY CORROBORATIVE EVIDENCE INCLUDING RECORDING THE STAT EMENT OF THE BUYER CONFRONTING HIM ABOUT THE ALLEGED PAYMENTS SHOWN AS MADE IN CAS H ON THE PIECE OF PAPER ASSUMED AS ISSAR PAVATI. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE CIT(A) AND THE ASSESSING OFFICER HAVE ERRED IN NOT BRINGING ON REC ORD ANY EVIDENCE TO PROVE THAT THE APPELLANT HAS ACTUALLY RECEIVED THE SAID CASH W HICH INFACT IS NEITHER FOUND AS HELD BY THE APPELLANT NOR FOUND INVESTED ANYWHERE B Y THE APPELLANT. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE CIT(A) HAS ERRED IN INVOKING THE PROVISION OF SECTION 69A WHICH REQUIRE S THE ASSESSEE TO EXPLAIN THE SOURCE OF MONEY, JEWELLERY ETC., FOUND IN HIS POSSE SSION OVERLOOKING THE FACT THAT IN THE CASE OF THE APPELLANT NO SUCH MONEY ETC., HAVE BEEN FOUND WITH THE APPELLANT. THE ABOVE GROUNDS OF APPEAL MAY KINDLY BE ALLOWED T O BE AMENDED, ALTERED, ETC., IN THE INTEREST OF NATURAL JUSTICE. 4. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSEE (ITA NO.956/PN/2012) ALONG WITH M/S NITIN PALEKAR & CO. (ITA NO.957/PN/2 012) INTENDED TO CARRY ON THE BUSINESS OF STONE QUARRY. THE LAND AND SHED ETC. OF THE STONE QUARRY WERE OWNED BY M/S ROCKSON INDUSTRIES I.E. THE ASSES SEE HEREIN WHEREAS THE 3 ITA NO.956/PN/2012 ITA NO.957/PN/2012 MACHINERY WAS OWNED BY M/S NITIN PALEKAR & CO.. TH ESE TWO FIRMS, NAMELY, M/S ROCKSON INDUSTRIES AND M/S NITIN PALEKAR & CO. WERE INTER CONNECTED WHERE KAD AND PALEKAR FAMILIES WERE PARTNERS. SOME OF THE PARTNERS OF THESE FIRMS WERE ALSO DIRECTORS IN ONE M/S SHANKAR RAMACH ANDRA EARTH MOVERS PVT. LTD.. THUS, ALL THESE THREE CONCERNS WERE THUS CLOS ELY INTER-CONNECTED. A SURVEY ACTION UNDER SECTION 133A WAS CONDUCTED ON 0 2.02.2010 ON THE BUSINESS PREMISES OF M/S SHANKAR RAMACHANDRA EARTH MOVERS PVT. LTD.. DURING THE COURSE OF SURVEY ACTION UNDER SECTION 13 3A OF THE ACT, A HAND WRITTEN ISAR PAVATI (AGREEMENT OF SALE/ADVANCE RE CEIPT AS MAY BE CALLED ) DATED 18.12.2007 WAS FOUND WHICH WAS PREPARED FOR S ALE OF LAND & MACHINERY BELONGING TO OF M/S ROCKSON INDUSTRIES AND M/S NITI N PALEKAR & CO. RESPECTIVELY. AS PER THE HAND WRITTEN NOTE I.E. I SAR PAVATI, THE SALE CONSIDERATION OF THE ASSETS WERE SHOWN AT RS.5,35,0 0,000/- AGAINST RS.3,05,00,000/- SHOWN IN THE REGISTERED DOCUMENT I .E. REGISTERED SALE DEED DATED 26.02.2008 IN RELATION TO THE SAME PROPERTY. IN THE BACKGROUND OF THESE FACTS, THE CASE OF THE ASSESSEE WAS REOPENED UNDER SECTION 147/148 OF THE ACT. IN THE ASSESSMENT PROCEEDINGS, THE ASSESSEE DECLARE D TOTAL CONSIDERATION AS PER REGISTERED SALE DEED AT RS.3,05,00,000/- AND APPORT IONED SALE PROCEEDS OF RS.1,77,30,512/- TOWARDS ITS SHARE ATTRIBUTABLE TO LAND AND SHED ETC. IT WAS ALSO EXPLAINED THAT BOTH THE FIRMS I.E. M/S ROCKSON INDU STRIES AND M/S NITIN PALEKAR & CO. INTENDED TO CARRY ON THE BUSINESS OF QUARRY ON THE SAID LAND WITH THE USE OF MACHINERY ACQUIRED. THE LAND AND SHED B ELONGED TO THE ASSESSEE WHEREAS MACHINERY BELONGED TO M/S NITIN PALEKAR & C O.. THIS BUSINESS WAS DISCONTINUED AND THE TOTAL ASSETS BELONGING TO THE AFORESAID TWO CONCERNS WERE STATED TO BE SOLD TO M/S SUNNY UDHYOG, PUNE AT A CO MPOSITE AMOUNT OF RS.3,05,00,555/- AS PER REGISTERED SALE DEED. THE COMPOSITE SALE CONSIDERATION WAS BIFURCATED INTO LAND AND SHED AT RS.1,77,30,512 /- ATTRIBUTABLE TO THE ASSESSEE AND TOWARDS MACHINERY RS.1,27,70,043/- ATT RIBUTABLE TO NITIN PALEKAR & CO.. THE ASSESSING OFFICER SHOW CAUSED AN EXPLAN ATION OF THE ASSESSEE WITH RESPECT TO ALLEGEDLY UNACCOUNTED CASH RECEIPTS OF R S.2,30,00,000/- (ASSESSEES SHARE BEING 58% I.E. RS.1,33,40,000/- AND 42% SHARE I.E. RS.96,60,000/- 4 ITA NO.956/PN/2012 ITA NO.957/PN/2012 ATTRIBUTABLE TO NITIN PALEKAR & CO.). IN THE EXPLA NATION FURNISHED BEFORE THE ASSESSING OFFICER, THE ASSESSEE STATED THAT ISAR P AVATI WAS NOT AN AGREEMENT TO SELL AND WAS A JUST PIECE OF ROUGH PAPER WHICH O NLY OUTLINED THEIR EXPECTATIONS FROM THE PURCHASER. THE ASSESSING OFF ICER, HOWEVER, DID NOT ACCEPT THE EXPLANATION FURNISHED BY THE ASSESSEE AN D HELD THAT THE IMPUGNED ISAR PAVATI FOUND AT THE TIME OF SURVEY UNDER SEC TION 133A OF THE ACT WAS IN THE HANDWRITING OF SHRI RAMACHANDRA D KAD AND WAS D ULY SIGNED BY SHRI KAD AND SHRI KASHINATH PALEKAR AS SELLERS AND ONE VINAY AK NIMHAN AS THE PURCHASER. IN THE LIGHT OF AFORESAID OBSERVATIONS, THE ASSESSING OFFICER HELD THAT THE ASSESSEE HAS RECEIVED RS.1,33,40,000/- (58 % OF RS.2,30,00,000/-) IN CASH AND THE SAME WAS TREATED AS UNDISCLOSED INCOME UNDER SECTION 69A OF THE ACT. 5. AGGRIEVED BY THE FINDINGS OF THE ASSESSING OFFIC ER, THE ASSESSEE KNOCKED THE DOOR OF THE FIRST APPELLATE AUTHORITY I .E. THE CIT(A). BEFORE THE CIT(A), THE ASSESSEE REITERATED THE SUBMISSIONS MAD E BEFORE THE ASSESSING OFFICER AND SUBMITTED THAT THE PIECE OF PAPER I.E. ISAR PAVATI HAS BEEN WRONGLY PRESUMED AS AGREEMENT TO SELL. THE SAID PI ECE OF PAPER ONLY NARRATED THE PROPOSAL TO BE AGREED BY THE SELLERS AND PROPOS ED BUYERS AND THUS MERELY OUTLINED THE POSSIBLE TERMS AND CONDITIONS IF AT AL L THE PROPOSAL GOES THROUGH. THE AFORESAID NOTINGS HAS NOT BEEN ACTED UPON AT AL L AND HAS NOT BEEN WITNESSED BY ANY PERSON. THERE IS NO LEGAL ENFORCE ABILITY OF SUCH NOTINGS. THE DETAILED SUBMISSIONS OF THE ASSESSEE WERE NOTICED B Y THE CIT(A) IN PARA 3.2 OF ITS ORDER WHICH HAS BEEN CAREFULLY NOTED BY US BUT IS NOT BEING REPEATED. THE CIT(A), HOWEVER, DID NOT FIND ANY SUBSTANCE IN THE SUBMISSIONS OF THE ASSESSEE. IN ESSENCE, HE OBSERVED THAT THE IMPUGNE D ISAR PAVATI DATED 18.12.2007 CONTAINS SEVERAL VITAL FACTS RELATED TO THE SALE OF THE PROPERTY WHICH STANDS CORROBORATED BY THE FINAL SALE-DEED ENTERED INTO BY THE ASSESSEE. IT WILL BE APT TO REPRODUCE THE RELEVANT PARAS OF THE CIT( A) ORDER DEALING WITH THE SUBMISSIONS OF THE ASSESSEE AND HIS FINDINGS THEREO N:- 5 ITA NO.956/PN/2012 ITA NO.957/PN/2012 3.3 I HAVE CAREFULLY CONSIDERED THE SUBMISSION MAD E BY THE APPELLANT AND PERUSED MATERIAL ON RECORD. THE APPELLANT HAS R AISED FIVE GROUNDS OF APPEAL AND IN GROUND NO. 1 HAS CONTESTED THE ASSESSMENT OF INCOME AT RS.1,27,39,190. DURING THE APPELLATE PROCEEDINGS, THE APPELLANT HAS CONTENDED THAT THE AO HAS WRONGLY ASSUMED THE PIECE OF PAPER AS 'ISAR PAWATI' I.E. AGREEMENT TO SALE AS NOWHERE ON THE SAID PIECE OF PAPER THERE IS ANY MEN TION TO THAT EFFECT THAT IT IS 'ISAR PAWATI' OR AGREEMENT TO SALE. IT HAS BEEN EXP LAINED THAT THE CONTENTS ON PAPER SUGGESTS ONLY THE PROPOSAL TO BE AGREED BY TH E SELLERS AND THE PROPOSED BUYERS. IT IS ALSO STATED THAT IT CONTAINS THE POSS IBLE TERMS AND CONDITIONS AND THE NOTING IS DT. 18.12.2007 AND IT HAS NOT BEEN AC TED UPON AT ALL AND IF ACTED IT DID NOT MATERIALIZE. IT HAS ALSO BEEN SUBMITTED THA T IN ORDER TO HAVE ENFORCEABILITY AND LEGAL SANCTITY THE 'LSAR PAWATI' COULD HAVE BEE N ONLY EXECUTED ON PAYMENT OF RELEVANT STAMP DUTY IF NOT FULLY AT LEAST THE CONTE NTS COULD HAVE BEEN REDUCED INTO WRITING ON A STAMP PAPER OF RS.100/-. THEREFOR E, THE APPELLANT HAS CONTENDED THAT THE PIECE OF PAPER HAS ABSOLUTELY NO EVIDENTIAL VALUE AND IN THE EYES OF LAW IS USELESS AND IT CANNOT HAVE ANY ENFOR CEABILITY BOTH ON FACT AND IN LAW AND, THEREFORE, THE ADDITION BASED ON SUCH MEAN INGLESS AND USELESS PIECE OF PAPER CAN NEVER BE SAID TO BE MADE IN ACCORDANCE WI TH LAW. THE APPELLANT HAS ALSO STATED THAT THE ASSESSING OFFICER HAS ALSO FAI LED TO CORROBORATE THE CONTENTS OF THE PIECE OF PAPER BY NOT CONFRONTING OTHER SELL ERS AND EVEN THE BUYER WHICH COULD HAVE SURFACED THE TRUTH OF THE ISSUE UNDER CO NSIDERATION I.E. THE POTENTIALITY OF THE LAND WITH RESPECT TO THE SALE CONSIDERATION, BEING LESS AS THE LAND WAS NOT FOUND FIT FOR STONE QUARRY BUSINESS. IT HAS ALSO BE EN CONTENDED THAT THE ASSESSING OFFICER HAS FAILED TO BRING ON RECORD THE UTILIZATION OF THE CASH RECEIVED BY THE SELLER OR EVEN HELD BY THE APPELLANT IN HAND AS DURING THE COURSE OF SURVEY THE CASH HAS NOT BEEN FOUND AND THE ASSESSING OFFIC ER HAS ALSO FAILED TO PROVE THAT THE APPELLANT HAS RECEIVED MORE CASH THAN WHAT IS STATED IN THE REGISTERED DOCUMENT. 3.4 THE APPELLANT HAS ALSO SUBMITTED THAT UNDER THE PROVISIONS OF SEC. 132 (4A) THE ASSESSING OFFICER IS AUTHORIZED TO ASS UME THAT THE CONTENT OF PAPER FOUND DURING THE COURSE OF SEARCH ARE TRUE AND CORR ECT AND WHICH IS NOT THE CASE IN A SURVEY ACTION U/S 133A. IT HAS FURTHER BEEN ST ATED THAT THE BINDING DUTY OF THE ASSESSING OFFICER WAS TO PROVE THAT THE PURCHAS E CONSIDERATION MENTIONED IN THE REGISTERED DOCUMENT IS NOT THE FACE VALUE OF CO NSIDERATION WITHIN THE MEANING OF SEC. 48 RECEIVED BY THE SELLERS AND TO P ROVE THAT THE VALUE OF CONSIDERATION RECEIVED IS MORE THAN WHAT IS RECORDE D IN THE REGISTERED DOCUMENT, THE ASSESSING OFFICER HAD TO PROVE WITH COGENT EVID ENCES THAT THE CONSIDERATION RECEIVED WAS MORE THAN WHAT IS STATED IN THE REGIST ERED DOCUMENT. THE APPELLANT HAS RELIED ON THE FOLLOWING AUTHORITIES FOR THIS PR OPOSITION: 1. PREM NARAYAN & CO VS CIT - PUNJAB & HARYANA HIGH COURT- 287 ITR 56 2. NAVNEET KUMAR THAKKAR VS ITO - ITAT JODHPUR - 110 ITD 525 3. INDERPALSINGH AHUJA VS ACIT -ITAT AMRITSAR -10 3 ITD 271 4. ASHOK SONI VS ITO - DELHI ITAT-102 TTJ 964 5. K P VERGHESE VS ITO-SUPREME COURT 131 ITR 59 7 6. SANJAY CHAWLA VS ITO DELHI ITAT 89 ITD 586 . IT HAS BEEN CONTENDED THAT THE PIECE OF PAPER CONTA INING CERTAIN NOTINGS REPRESENT ROUGH ESTIMATES OR SCRIBBLING AND AS THE SAME HAS NOT BEEN ACTED UPON IT HAS TO BE REGARDED AS A DUMB DOCUMENT. THE ASSESSING OFFICER HAS RESORTED TO INTERPRETING THE CONTENTS OF THE SAID P APER BASED ON SUSPICION, 6 ITA NO.956/PN/2012 ITA NO.957/PN/2012 SURMISE, CONJECTURE AND IMAGINATION WHICH IS NOT PE RMISSIBLE. THE APPELLANT HAS RELIED ON THE FOLLOWING JUDICIAL CITATIONS FOR THE PROPOSITION. AHMEDABAD HON. ITAT JUDGEMENT IN THE CASE OF AMAR N ATWARLAL SHAH 60 ITD 560 AND ALSO THE FOLLOWING CITATIONS: A. BRIJLAL VS INCOME TAX OFFICER -INDORE BENCH 40 T TJ 668. B. CIT VS ASHOKKUMAR POTDAR -16 DTR 55- KOLKATTA HO N ITAT. 3.5 THE APPELLANT HAS CONTESTED THAT THE ASSESSING OFFICER HAS ASSUMED THE PIECE OF PAPER AS 'ISAR PAVATI' I.E. AGREEMENT TO SALE, A S NOWHERE ON THE SAID PIECE OF PAPER THERE IS ANY MENTION THAT IT IS 'LSAR PAVATI' OR AGREEMENT TO SALE AND ALSO THAT ITS CONTENTS ONLY SUGGESTED PROPOSAL TO BE AGREED B Y THE SELLERS AND THE PROPOSED BUYER. HOWEVER, ON GOING THROUGH THE COPY OF THE DO CUMENT FILED DURING THE COURSE OF APPELLATE PROCEEDINGS, IT IS NOTICED THAT THE SA ID DOCUMENT I.E. THE 'ISAR PAVATI' DATED 18.12.2007 CONTAINS SEVERAL FACTS RELATED TO THE SALE OF PROPERTY WHICH ARE CORROBORATED BY THE FINAL SALE DEED ENTERED INTO BY THE APPELLANT ON 26.02.2008. ON PAGE 2 OF THE DOCUMENT ON THE LOWER LEFT HAND SIDE THE FOLLOWING JOTTINGS ARE NOTED: 1. 10,00,000/- 095801/ 20.12.2007 2. 50,00,000/- 095801/ 28.01.2008 3. 1,93,00,000/- BANK LOAN 4. 50,00,000/- PDC 95802/1/5/2008 VIDYA SAHAKARI 3,05,00,555/- ON PERUSAL OF THE FINAL SALE DEED, IN CLAUSE 10 UND ER THE MODE OF PAYMENT IS MENTIONED AS UNDER : 1) RS.10,00,000/- THE PURCHASER PAID TO THE NAME O F ROCKSON INDUSTRIES BY CHEQUE BEARING NO.095801 DATED 20.12.2007 DRAWN ON COSMONS BANK. 2) RS.50,00,000/- THE PURCHASER PAID TO THE NAME OF ROCKSON INDUSTRIES BY CHEQUE BEARING NO. 095801 DATED 28.01.2008 DRAWN ON VIDYA SAHAKARI BANK 3) RS.1,93,00,000/- PAID AFTER THE SANCTIONING OF THE LOAN. 4) RS.50,00,000/- THE PURCHASER PAID TO THE NAME OF ROCKSON TOTAL RS.3,05,00,555/- INDUSTRIES BY CHEQUE BEARING NO.095802 DATED 01.05.2008 DRAWN ON VIDYA SAHAKARI BANK. 3.6 THUS, IT CAN BE SEEN THAT EXACTLY THE SAME NOTI NGS ARE CORROBORATED BY THE NOTINGS MADE IN THE CLAUSE 10 OF THE SALE WHICH ARE MENTIONED ON THE 'ISAR PAVTI' OR THE AGREEMENT OF SALE WHICH THE APPELLANT HAS CONTE NDED TO BE JUST A PIECE OF PAPER WHICH IS OF NO RELEVANCE AS IT IS SIMPLY A PROPOSAL . THE AFORESAID FACTS CLEARLY REVEAL THAT THE PIECE OF PAPER CONTAINS ENTRIES WHICH ARE FULLY CORROBORATED BY THE NOTINGS ON THE FINAL SALE DEED ENTERED BY THE APPELLANT ON 26.2.2008. EVEN THE AMOUNT MENTIONED AS TOTAL OF RS.3,05,00,555/- ON THE SALE DEED TALLIES TOTALLY WITH THE TOTAL FIGURE APPEARING ON PAGE 2 THOUGH ON MAKING THE ADD ITION ON BOTH THE PAGES THE ACTUAL TOTAL WORKS OUT TO RS.3,03,00,000/-. THE APP ELLANT, HAS HOWEVER NOT EXPLAINED 7 ITA NO.956/PN/2012 ITA NO.957/PN/2012 THE DIFFERENCE OF RS.2,00,555/- (3,05,00,555 - 3,03 ,00,000) EITHER AT THE STAGE OF ASSESSMENT OR DURING APPELLATE PROCEEDINGS. MOREOVE R, THE CHEQUE NOS MENTIONED ALONG WITH THE DATES ALSO EXACTLY TALLIES WITH EACH OTHER. 3.7 FURTHER, THE DESCRIPTION OF THE LAND PROPERTY A S S.NO 78, HISSA NO 6, IS ALSO MENTIONED ON THE SO CALLED PIECE OF PAPE R AS HELD BY THE APPELLANT. THE PERSONS MENTIONED IN THE 'ISAR PAVTI' OR THE AG REEMENT OF SALE AS HELD BY THE ASSESSING OFFICER ARE THE SAME PERSONS WHO HAVE FIN ALLY ENTERED INTO THE FINAL SALE DEED ON 26.2.2008 I.E. ROCKSON INDUSTRIES, NIT IN PALEKAR & CO AND VINAYAK M NIMHAN. THE SIGNATURES ON THE SAID DOCUMENT HAS B EEN DONE BY KASHINATH LAXMAN PALEKAR AND RAMACHANDRA DAMODAR KAD AS SELLE RS AND BY VINAYAK NIRNHAN AS THE PURCHASER. THE SIGNATURES AS APPEARI NG IN THE 'LSAR PAVTI' OF KASHINATH LAXMAN PALEKAR AND THAT OF RAMACHANDRA DA MCDAR KAD ARE PRIMA FACIE THE SAME AS SIGNED ON THE SALE DEED. THE SIGNATURE OF THE PURCHASER APPEARS TO BE DIFFERENT BECAUSE IT HAS BEEN SIGNED IN MARATHI ON THE 'ISAR PAVTI' AND IN ENGLISH ON THE SALE DEED. ON THE SAME PAGE 2 ON THE LOWER RIGH T HAND SIDE THE FOLLOWING FIGURES APPEAR: 1. RS.50,00,000/- ASK 2. 80,00,000/- NITIN 3. RS.1,00,00,000/ -RDK RS.2,30,00,000/- THE NAMES WRITTEN IN ABBREVIATED FORMS ALL RELATE T O THE PERSONS OR PARTIES OF THE TWO CONCERNS VIZ. ROCKSON INDUSTRIES AND NITIN PALE KAR & CO. FOR INSTANCE 'ASK' REFERS TO ANANT SHANKARRAO KAD WHO IS A PARTNER OF ROCKSON INDUSTRIES, 'NITIN' REFERS TO NITIN SHAMRAO PALEKAR AD 'ROK' REFERS TO RAMACHANDRA DAMODAR KAD, BOTH OF THEM ARE PARTNERS OF NITIN PALEKAR & CO. 3.8 MOREOVER, THE TOTAL FIGURE MENTIONED BELOW THE AFORESAID ENTRY IS 5,35,00,000/- WHICH IS ALSO MENTIONED ON PAQE NO. 7 OF THE SAID DOCUMENT AND ON MAKING THE TOTAL ADDITION OF THE TWO TOTALLED FI GURES, THE FIGURE OF RS.5,35,00,000/- IN A ROUNDED FORM IS WRITTEN WHICH IS ALSO CORROBORATED BY THE AMOUNT MENTIONED ON PAGE 1 (FRONT SIDE). THE SAID F IGURE OF RS.5,35,00,000/- ALSO APPEARS ON TOP LEFT WRITTEN ON PAGE 2 ALSO UND ER THE DATE 20.12.2007 WHICH IS ACTUALLY THE DATE MENTIONED ON PAGE 1 OF THE DOC UMENT, ON THE TOP OF THE PAGE NO. 2 ALSO THE FOLLOWING APPEARS WHICH HAS BEE N CUT AS THE SAME HAS BEEN CROSSED. THE TOTAL OF RS.2,25,00,000/- APPEARS WHIC H HAS BEEN BIFURCATED AS UNDER: 1. RS.62,50,000/- 2. RS.62,50,000/- 3. RS.1,00,00,000/- RS. 2,25,00,000/- JUST BELOW THE FIGURE OF 3,10,00,000/- BALANCE HAS BEEN MENTIONED 'AND WHEN THE TWO FIGURES ARE ADDED I.E. 2,25,00,000/- + 3,10,00, 000/- THE FIGURE OF RS.5,35,00,000/- IS WORKED OUT. THOUGH THE NOTINGS HAS BEEN CUT ACROSS, THE WORKING ON THE LOWER SIDE OF PAGE, ONLY DIFFERENCE IS THAT RS.5,00,000/- HAS BEEN REDUCED FROM RS.2,35,00,000/- AND THE FIGURE 62,50,000/- HA S BEEN SUBSTITUTED BY 50,00,000/- + 80,00,000/- IN PLACE OF 62,50,000 + 62,50,000/- A ND RS.3,10,00,000/- HAS BEEN REDUCED BY RS.5,00,000/- TO ARRIVE AT RS.3,05,00,00 0/-. 3.9 FINALLY, IN THE STATEMENT RECORDED U/S 131 OF T HE I.T. ACT, DURING THE COURSE OF SURVEY U/S 133A OF RAMACHANDRA DAMODAR KA D ON 2.2.2010, IT HAS 8 ITA NO.956/PN/2012 ITA NO.957/PN/2012 BEEN ADMITTED BY THE SAID PERSON IN QUESTION NO. 7, THAT THE SAID PIECE OF PAPER AS 'ISAR PAVTI' WRITTEN IN HIS OWN HANDWRITI NG AS UNDER: Q.7 I AM SHOWING YOU A 'LSAR PAVTI' DATED 18.12.20 07 WHICH IS SIGNED BY SHRI. KASHINATH LAXMAN PALEKAR & SHRI. RAMACHANDRA DAMODA R KAD AS THE SELLER AND SHRI. VINAYAKRAO NIMHAN AS PURCHASER. THIS 'ISAR PA VTI' IS HANDWRITTEN AND IT IS KEPT IN BUNDLE NO. 1 IN THE PINK FOLDER NAMED AS GALA G OODLUCK OFFICE FILE 777 AT PAGE NO. 1 THIS 'TSAR PAVTI' WAS FOUND IN THE DRAWER OF YOUR OFFICE TABLE. WILL YOU PLEASE TELL ME AS TO WHOSE HANDWRITING IS ON THIS 'LSAR PA VTI' ? ANS. THIS 'LSAR PAVTI' IS IN MY OWN HANDWRITING. BU T THIS TRANSACTION WAS NOT EXECUTED ACCORDING TO THE TERMS MENTIONED THEREIN. THUS, IT CAN BE SEEN FROM THE ABOVE THAT THE SAID D OCUMENT IS MUCH MORE THAN JUST A PIECE OF PAPER AS CONTENDED BY THE APPELLANT . THE CONTENTS ON THE 'TSAR PAVTI' OR AGREEMENT TO SALE IS NOT MEANINGLESS AND A USELESS PIECE OF PAPER AS ITS CONTENTS ALMOST IN ENTIRETY HAS BEEN ACTED UPON IN THE FINAL SALE DEED ENTERED INTO BY THE APPELLANT EXCEPT FOR RS.2,30,00 ,000/- WHICH CLEARLY POINTS OUT TO THE FACT THAT THE SAID AMOUNT HAS BEEN RECEI VED IN CASH WHICH HAS NOT BEEN DISCLOSED BY THE APPELLANT IN THE RETURN OF IN COME. 3.10 THEREFORE, THE CONTENTION OF THE APPELLANT THA T THE ADDITION MADE BY THE ASSESSING OFFICER CANNOT BE SAID TO BE MADE IN ACCORDANCE WITH LAW WHICH IS BASED ON SUCH MEANINGLESS AND USELESS PIECE OF PAPE R IS NOT CORRECT AS EVIDENT FROM THE DISCUSSION MADE ABOVE WITH RESPECT TO THE NOTINGS MADE ON THE SAID DOCUMENT CAN BE FACTUALLY LINKED TO THE REGISTERED SALE DEED WHICH WAS SUBSEQUENTLY ENTERED INTO BY THE APPELLANT. LOOSE P APERS UNLIKE BOUND BOOKS ARE GENERALLY CANNOT BE A BASIS FOR READY REFERENCE OF CONCEALMENT OF FIGURES FOUND IN THEM, BUT IT CANNOT BE SAID THAT THEY ARE TOTALLY IRRELEVANT, IF THEY HAVE SOMETHING TO CONNECT THEM WITH ASSESSEE'S BUSINESS. THE INFERENCE HAS TO BE ON FACT. THE CONTENTS FOUND ON THE 'ISAR PAVTI' OR AGREEMENT TO SALE RAISES A PRESUMPTION OF LEGALITY OF DOCUMENTS FOUND AND THAT WOULD MEAN THAT THEY CANNOT BE TOTALLY IGNORED OF FURTHER FACT TO JUSTIF Y A CONCLUSION COULD BE FOUND. THE AUTHOR OF THE SAID 'ISAR PAVTI' HAS ALREADY ADM ITTED IN CLEAR TERMS THAT SAID DOCUMENT WAS IN HIS OWN HANDWRITING AND THE SAID PE RSON IS ALSO ONE OF THE SIGNATORIES OF THE TRANSACTION WHICH WAS FINALLY FO RMALIZED BY A SALE DEED ON 26.2.2008. THESE FACTS ARE UNDISPUTED. THEREFORE, T HE SAID DOCUMENT IS OF GREAT EVIDENTIAL VALUE AND THE ASSESSING OFFICER HAS RIGH TLY MADE IT AS A BASIS FOR MAKING ADDITION DURING THE ASSESSMENT PROCEEDINGS. THE APPELLANT'S CONTENTION THAT THE ASSESSING OFFICER IS AUTHORIZED TO ASSUME ALL THE CONTENT OF THE PIECE OF PAPER FOUND IN THE COURSE OF SEARCH AND SEIZURE ACT ION ARE TRUE AND CORRECT AND THAT SUCH POWER OF ASSUMPTION CAN BE EXERCISED ONLY IN SEARCH ACTION U/S 132 AND NOT UNDER A SURVEY ACTION U/S 133A IS ALSO MISP LACED. THE COURTS HAVE APPROVED THAT THE INCOME TAX DEPARTMENT HAS WIDER P OWERS TO GET INFORMATION WHETHER U/S 133(6) OR U/S 133A. AS REGARDS THE POWE R TO CALL FOR INFORMATION ABOUT DEPOSITS ABOVE CERTAIN LIMITS, THE HIGH COURT OF KERELA HAS UPHELD SUCH POWER IN THE CASE OF RECHERY SERVICE CO-OPERATIVE B ANK LTD VS CIT (2003) 263 ITR 161 (KER) FOLLOWING THE DECISION IN KARNATAKA B ANK LTD VS SECRETARY, GOVT. OF INDIA (2002) 255 ITR 508 (SC). THOUGH THE OFFICE R AUTHORIZED FOR SURVEY IS NOT EMPOWERED TO ADMINISTER OATH AND TAKE STATEMENT UNLIKE POWER AVAILABLE TO OFFICER DURING SEARCH AND SEIZURE ACTION U/S 132(1) , SO THAT THE BASIS OF ASSESSMENT WITH REFERENCE TO THE STATEMENT WOULD RE QUIRE FRESH EVALUATION AS WAS DECIDED IN CIT VS S. KHADER KHAN SON (2008) 300 ITR 157 (MAD) FOLLOWING PAUL MATHEWS AND SONS VS CIT (2003) 263 ITR 101 (KE R). HOWEVER, THE FINANCE ACT, 2008 HAS BROUGHT IN SEC. 292C BRINGING THE SAME CREDIBILITY ON MATERIALS FOUND DURING SURVEY AT PAR WITH MATERIALS FOUND DURING SEARCH AS 9 ITA NO.956/PN/2012 ITA NO.957/PN/2012 REGARDS PRESUMPTION OF OWNERSHIP AND TRUTH OF THE D OCUMENTS FOUND. MOREOVER, THE PRESENT ASSESSMENT HAS NOT BEEN COMPLETED ONLY ON THE BASIS OF A STATEMENT BUT ON A DOCUMENT WHOSE CONTENTS ARE CORR OBORATED WITH THE CONTENT OF THE FINAL SALE DEED AND, THEREFORE, THE PRESUMPTION DRAWN IS BASED ON A DOCUMENT HAVING EVIDENTIAL VALUE AND ALONG WITH THE STATEMEN T RECORDED U/S 131 OF THE I. T. ACT. 3.11 FURTHER, THE CONTENTION RAISED BY THE APPELLAN T THAT THE PIECE OF PAPER CONTAINING CERTAIN NOTINGS REPRESENTS THE ROU GH ESTIMATES OR SCRIBBLING AND THE SAME HAS NOT BEEN ACTED UPON HAS TO BE REGARDED AS A DUMB DOCUMENT IS NOT CORRECT. IN THE CASE OF KHOPADE KISANRAO MANIKRAO V S ACIT (2000) 74 ITD 25 (PUNE) TM WITH RESPECT TO THE COMPUTATION OF UNDISC LOSED INCOME THE PROVISIONS OF SEC. 143(3) HAS BEEN DISCUSSED. IT WAS HELD THAT IN MAKING THE ASSESSMENT, PROVISION OF SEC. 143(3) HAVE BEEN SPECIFICALLY MADE AVAILABL E TO THE ASSESSING OFFICER. SEC. 143(3) EMPOWERS THE ASSESSING OFFICER TO MAKE AN AS SESSMENT OF INCOME ON THE BASIS OF THE MATERIAL WHICH HAS BEEN GATHERED BY HI M. TILE LANGUAGE OF SEC. 143(3) MAKES IT ABUNDANTLY CLEAR THAT THE ASSESSMENT TO BE MADE BY THE ASSESSING OFFICER SHOULD BE BASED ON EVIDENCE BEFORE THE OFFICER. THE WORD 'EVIDENCE' HAS TO BE CONSTRUED IN A COMPREHENSIVE SENSE AND IT INCLUDES CIRCUMSTANTIAL EVIDENCE. IT IS WELL SETTLED PRINCIPLE OF LAW THAT THE MATERIAL OR EVIDENCE ON WHICH THE TAXING AUTHORITIES MAY BASE THE ASSESSMENT IS NOT CONFINED TO DIRECT TESTIMONY BY WITNESSES. IT MAY BE REITERATED THAT THE WORD USED IN SEC. 143 IS EVIDENCE. HOWEVER, IN MAKING ASSESSMENT THE ASSESSING OFFICER DOES NOT ACT MEREL Y ON WHAT IS TECHNICALLY DESCRIBED AS EVIDENCE IN THE INDIAN EVIDENCE ACT. I T IS OBSERVED FROM SEC. 143(3) THAT THE ASSESSING OFFICER CAN BASE HIS ASSESSMENT NOT ONLY ON THE EVIDENCE FOUND BUT ALSO ON THE MATERIAL GATHERED BY HIM. IT IS NOW WELL SETTLED THAT THE ASSESSING OFFICER IS NOT FALTERED BY TECHNICAL RULES OF EVIDE NCE AND THE LIKE AND THAT HE MAY ACT ON MATERIAL WHICH MAY NOT STRICTLY SPEAKING BE ACCE PTED AS EVIDENCE IN A COURT OF LAW. SUCH EVIDENCE NEED NOT NECESSARILY BE DIRECT E VIDENCE, IT MAY BE CIRCUMSTANTIAL EVIDENCE OR ASSESSMENT BASED ON PREPONDERANCE OF PR OBABILITIES JUDGED BY HUMAN CONDUCT. IF THERE IS MATERIAL ON RECORD TO ES TABLISH THAT THE ASSESSEE HAS CHARGED 'ON MONEY' IN REGARD TO LAND DEALS WHICH IS NOT RECORDED IN THE REGULAR BOOKS OF ACCOUNT, IT IS PERMISSIBLE FOR THE ASSESSI NG OFFICER TO MAKE AN ASSESSMENT ON THE BASIS OF SUCH MATERIAL. 3.12 IN THE PRESENT CASE ALSO THE ASSESSING OFFICER HAS BASED THE ASSESSMENT ON THE MATERIAL FOUND DURING THE COURSE OF SURVEY ACTION AND WHICH HAS ALSO BEEN ADMITTED BY ONE OF THE DIRECTORS TO B E WRITTEN IN HIS OWN HANDWRITING. APPARENT IS REAL UNLESS CONTRARY IS PR OVED. IN THIS CASE THE CONSIDERATION RECEIVED BY THE APPELLANT IN RESPECT OF THE LAND TRANSACTION WAS RECORDED IN THE SALE DEED AND THE CONSIDERATION REC EIVED WAS APPARENT AND IT WAS, THEREFORE, FOR THE ASSESSING OFFICER TO ESTABL ISH THE CONTRARY. FURTHER, ON THE BASIS OF MATERIAL FOUND DURING THE COURSE OF SU RVEY ACTION U/S 133A, IT HAS BEEN ESTABLISHED THAT WHAT IS APPARENT DOES NOT REF LECT THE TRUE STATE OF AFFAIRS. THEREFORE, THE BURDEN THAT RESTED WITH THE ASSESSIN G OFFICER STANDS DISCHARGED AND THE ONUS HAS SHIFTED TO THE APPELLANT. IT IS IN THESE CIRCUMSTANCES THAT THE APPELLANT IS REQUIRED TO DISCHARGE THE ONUS FOR EST ABLISHING THAT IN RESPECT OF THE LAND DEAL TRANSACTION NO CASH HAD BEEN RECEIVED. IN THE CASE OF DHANVARSHA BUILDERS AND DEVELOPERS (P) LTD VS DCIT (2006) 102 ITD 375 (PUNE) THE ASSESSEE WAS FOUND IN POSSESSION OF RECORD REGARDIN G MONIES RECEIVED IN RESPECT OF VARIOUS GODOWNS AND SHOPS TO BE CONSTRUC TED BY IT, THE BENCH HELD THAT AS 'THE DOCUMENT SPEAKS OF RECEIPT IN CASH AS ALSO RECEIPT BY WAY OF CHEQUES ON DECODING, TALLYING WITH THE BOOKS OF ACC OUNT OF THE ASSESSEE, IT CANNOT BE SAID THAT THE DOCUMENT IS A DUMB DOCUMENT EVEN THOUGH IT DOES NOT CONTAIN ASSESSEE'S NAME. IT WAS FURTHER HELD BY THE BENCH THAT AS PER THE 10 ITA NO.956/PN/2012 ITA NO.957/PN/2012 COUNSEL OF THE ASSESSEE THE IMPUGNED DOCUMENT IS A DUMB DOCUMENT AND, THEREFORE, IT CANNOT BE RELIED UPON FOR THE PURPOSE OF ASSESSMENT. IT IS NOT POSSIBLE TO AGREE WITH THE COUNSEL IN EITHER OF THE MATTERS. THE REASON IS THAT THE AUTHORITY OF NAMES AND DECODING OF AMOUNTS RECEIVED BY WAY OF CHEQUES LEAD TO ESTABLISHMENT OF THE FACT THAT THE DOCUMENT BELONGS TO THE ASSESSEE AND VARIOUS AMOUNT ENTERED THEREIN ARE CORRECT IF THREE ZEROS A RE SUPPLIED. THE ABSENCE OF THE NAMES OF THE ASSESSEE THUS GETS FULLY CORROBORA TED ON THE BASIS OF AFORESAID INTERPRETATION OF THE DOCUMENT. THE DOCUMENT SPEAKS OF RECEIPT IN CASH AND ALSO RECEIPT BY WAY OF CHEQUES. THE RECEIPTS BY WAY OF C HEQUES TALLY WITH THE BOOKS OF ACCOUNT. THEREFORE, IT IS A NATURAL CONSEQUENCE THAT THE RECEIPT BY WAY OF CASH HAS ALSO TO BE MADE. ACCORDINGLY, THE DOCUMENT IS N OT A DUMB DOCUMENT BUT IT IS A SPEAKING DOCUMENT AND IT PERTAINS TO THE BUSINESS T RANSACTIONS OF THE ASSESSEE. 3.13 IN THE CASE OF DHUNJIBHOY STUD AND AGRICULTURA L FARM VS DCIT (2002) 82 ITD 0018 (PUNE) TM, LOOSE PAPER INDICATIN G ON MONEY IN CONNECTION WITH SALE OF FLAT WAS FOUND AND SEIZED FROM T'S POSSESSI ON AND THE FACT THAT T DID NOT DENY HIS HANDWRITING IN THE LOOSE PAPER, IT WAS HELD THA T THE CIRCUMSTANCES COUPLED WITH THE FACT THAT THE TRANSACTION OF PURCH ASE OF FLAT HAD TAKEN PLACE BETWEEN T AND ASSESSEE, GO TO ESTABLISH THE PAYMENT OF ON-MONEY TO THE ASSESSEE AND AO WAS JUSTIFIED IN MAKING ADDITION. T HE BENCH ALSO HELD THAT THERE CANNOT BE ANY DIRECT EVIDENCE FOR RECEIPT OF ON-MONEY. OBVIOUSLY NO SANE PERSON WOULD ADMIT THAT HE IS RECEIVING ON-MONEY. I N THE CASE OF P R PATEL VS DCIT (2001) 78 ITD 57 (MUM), IT WAS HELD THAT THE S EIZED PAPERS CANNOT BE CALLED DUMB BECAUSE THEY INDICATE THE DATE, AMOUNT AND ALSO CALCULATION OF INTEREST. 3.14 THE APPELLANT HAS RELIED ON A NUMBER OF CASE L AWS FOR THE PROPOSITION THAT THE AO HAS TO PROVE WITH COGENT EV IDENCES THAT THE SELLER HAS RECEIVED THE CONSIDERATION MORE THAN WHAT IS STATED IN THE REGISTERED DOCUMENT. THE FACT OF THE PRESENT CASE IS TOTALLY DIFFERENT FROM THE FACT OF THE CASES RELIED UPON BY THE APPELLANT. IN THE PRESENT CASE, THERE IS A VERY POTENT EVIDENCE INDICATING RECEIPT OF CASH WHICH IS OVER AND ABOVE THE SALES CONSIDERA TION SHOWN BY THE APPELLANT IN THE SALE DEED WHEREAS IN THE CASES RELIED UPON NO S UCH EVIDENCE WAS FOUND WHICH COULD INDICATE RECEIPTS OF MONEY OVER AND ABOVE THE SALE CONSIDERATION. THE FACTS, THEREFORE, WERE DISTINGUISHABLE AND THE RATIO OF TH E DECISIONS ARE NOT APPLICABLE TO THE PRESENT CASE. 3.15 THE APPELLANT HAS ALSO RELIED ON THE AHMEDABAD BENCH IN THE CASE OF AMAR NATVARLAL SUPRA FOR THE PROPOSITION THAT WH EN NO TANGIBLE ASSET FOUND DURING SEARCH AND NO YEAR WAS MENTIONED ON LOOSE PA PER ADDITION WAS NOT JUSTIFIED, WHEREAS IN THE PRESENT CASE THE DATE IS CLEARLY MENTIONED ON THE 'ISAR PAVTI' OR AGREEMENT FOR SALE AND THE DETAILS OF THE ASSET IN QUESTION CLEARLY SPELT OUT, HENCE THE CASE LAW RELIED UPON IS NOT APPLICAB LE. 3.16 IN THE OTHER TWO CASE LAWS RELIED UPON BY THE APPELLANT, THE FACT ARE MUCH DIFFERENT AND NOT APPLICABLE TO THE PRESENT CASE. I N THE CASE OF BRIJLAL RUPCHAND (INDORE) SUPRA THERE WAS NOTHING ON RECORD TO CONNE CT THE ASSESSEE WITH THE LOOSE PAPERS FOUND IN SHOP DURING SEARCH ACTION, WHEREAS IN THE CASE OF ACIT VS ASHOK KUMAR PODDAR (KOL) SUPRA THE ASSESSING OFFICER HAD MADE ADDITION OF PROFIT NOTED ON LOOSE PAPERS MERELY ON THE PRESUMPTION U/S 132(4 A) WITHOUT VERIFYING THE HANDWRITING AND WITHOUT MAKING ANY ENQUIRY WHEREAS IN THE PRESENT CASE THE ASSESSING OFFICER HAS RESORTED TO THE ADDITION AFTE R PROPER VERIFICATION OF THE AFORESAID FACTS, HENCE THE CASE LAW IS NOT APPLICAB LE AND IS DISTINGUISHABLE. 3.17 UNDER THE DEEMING PROVISIONS OF THE I.T. ACT, 1961, THE POSITION IS THAT THE MERE EXISTENCE OF A CREDIT ENTRY IS SUFFIC IENT TO ATTRACT THE PROVISIONS AND 11 ITA NO.956/PN/2012 ITA NO.957/PN/2012 ONCE THE APPELLANT'S EXPLANATION IS NOT SATISFACTOR Y, THE CASH CREDITS ARE TO BE CHARGED TO TAX IN AN EXCEPTIONABLE MANNER. IT WAS S O HELD IN ONE OF THE MOST LANDMARK CASES OF THE HON'BLE SUPREME COURT OF SUMA TI DAYAL (1995) 214 ITR 801 (SC). FROM A PLAIN READING OF THE REQUISITE SECTION S IT IS EVIDENT THAT WHEN THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE OF THE CREDITS, ITS VALUE COULD BE DEEMED INCOME OF THE ASSESSEE. AN EXPLANAT ION OFFERED, IF NOT ACCEPTED IS NO EXPLANATION IN LAW AND NOT ONLY THIS THE LEGISLA TURE WHILE ENACTING THE DEEMING PROVISIONS OF THE I.T. ACT FALLING UNDER SECTIONS 6 8, 69 TO 69D OF THE I.T. ACT, 1961, HAS CLARIFIED THAT IN CASE THE EXPLANATION OFFERED IS NOT SATISFACTORY THE VALUE OF THE UNEXPLAINED DEPOSITS SHALL BE DEEMED TO BE THE INCO ME OF THE ASSESSEE. THERE CAN BE NO GENERAL PROPOSITION OF LAW APPLICABLE TO ALL CAS ES IRRESPECTIVE OF THE FACTS AND CIRCUMSTANCES THEREOF. ONE THING WHICH CAN BE SAID WITHOUT MUCH HESITATION IS THAT THE BURDEN IS ALWAYS ON THE ASSESSEE, IF AN EXPLANA TION IS ASKED FOR BY THE TAXING AUTHORITIES TO INDICATE THE SOURCE OF ACQUISITION O F A PARTICULAR ASSET ADMITTEDLY OWNED BY THE PERSON CONCERNED. THE BURDEN CAST UPON THE APPELLANT HAS NOT BEEN DISCHARGED EITHER AT THE STAGE OF ASSESSMENT OR DUR ING THE APPELLATE PROCEEDINGS BY FURNISHING ANY ACCEPTABLE EXPLANATION. 3.17.1 IT WAS ALSO HELD THAT THE TAX AUTHORITIES WE RE ENTITLED TO LOOK INTO THE SURROUNDING CIRCUMSTANCES TO FIND OUT THE REALITY, AND THE MATTER HAS TO BE CONSIDERED BY APPLYING THE TEST OF HUMAN PROBABILIT IES. IN THIS DECISION, THE HON'BLE APEX COURT ALSO RELIED UPON THE RATIO OF THE EARLIE R JUDGEMENT IN THE CASE OF DURGA PRASAD MORE, 82 ITR 540 (SC). IN MY CONSIDERED OPIN ION, THERE ARE ENOUGH CIRCUMSTANTIAL EVIDENCES AND PREPONDERANCE OF PROBA BILITIES IN THIS CASE, WHICH LEAD TO THE INFERENCE THAT THE DECISION OF THE ASSESSING OFFICER WAS ON A SOUND BASIS. IT MAY BE RELEVANT TO QUOTE THE ABOVE REFERRED DECISIO N OF THE APEX COURT IN THE CASE OF CIT VS. DURGA PRASAD MORE, 82 ITR 540 WHEREIN IT IS HELD AS UNDER: 'IT IS TRUE THAT AN APPARENT MUST BE CONSIDERED REA L UNTIL IT IS SHOWN THAT THERE ARE REASONS TO BELIEVE THAT THE APPARENT IS N OT REAL.' THE OWNERSHIP OF THE DOCUMENT OR THE 'ISAR PAVTI' I S NOT UNDER DISPUTE AS THE SAME HAS BEEN ADMITTEDLY STATED TO BE IN THE HANDWR ITING OF ONE OF THE PARTNERS AND WHICH HAS ALSO BEEN DULY SIGNED BY OTHER INTERESTED PARTIES. THE DOCUMENT CLEARLY SPEAKS OF RECEIPT OF CHEQUE AND RECEIPT IN CASH AND WHICH HAS ALSO BEEN CORROBORATED BY THE ENTRIES ON THE FINAL SALE DEED AND THE ENTRIES ON 'ISAR PAVTI' ALSO CONNECT THEM WITH THE APPELLANT FIRM, AND, THE REFORE, IT CANNOT BE SAID TO BE IRRELEVANT AND JUST A PIECE OF PAPER. FROM THE VARI OUS MATERIAL BROUGHT ON RECORD, THERE WAS NOTHING IMPROPER ON THE PART OF THE ASSES SING OFFICER IN RELYING ON CIRCUMSTANTIAL EVIDENCE IN SUCH CASES FOR ARRIVING AT THE FINDING. THE ASSESSING OFFICER IS ALSO ENTITLED TO TAKE INTO CONSIDERATION THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE AND TO DRAW HIS / HER OWN INFERENCE ON THE BASIS THEREOF, CIRCUMSTANTIAL EVIDENCE IN SUCH CASES IS N OT IMPERMISSIBLE. ON SIMILAR FACTS THE BOMBAY HIGH COURT IN THE CASE OF SMT. VAS ANTIBAI N. SHAH VS. CIT (1995) 213 ITR 805 (BOM) HELD THAT IN SUCH CASES ON LY CIRCUMSTANTIAL EVIDENCE WILL BE AVAILABLE. NO DIRECT EVIDENCE CAN BE EXPECTED. I N THE CASE OF GREEN VALLEY BUILDERS VS CIT (2008) 296 ITR 225 (KER), TH ERE WERE MATERIALS CONSTITUTING CIRCUMSTANTIAL EVIDENCE TO PROVE THAT LAND IN QUESTION HAD BEEN SOLD BY THE ASSESSEE AT A HIGHER PRICE THAN THAT CLAIMED BY IT AND HENCE ADDITION ON ACCOUNT OF UNACCOUNTED INCOME WAS JUSTIFIED. 3.17.2 FROM THE PLAIN READING OF SECTION 69A, IT IS EVIDENT THAT WHEN THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE O F ACQUISITION OF THE MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLES IN VA LUE WOULD BE DEEMED INCOME OF THE ASSESSEE. AN EXPLANATION OFFERED, IF NOT ACCEPTED I S NO EXPLANATION IN LAW AND NOT ONLY THIS, THE LEGISLATURE WHILE ENACTING SECTION 6 9A HAS CLARIFIED THAT IN CASE THE 12 ITA NO.956/PN/2012 ITA NO.957/PN/2012 EXPLANATION OFFERED IS NOT SATISFACTORY THE VALUE O F THE VALUABLE ARTICLES SHALL BE DEEMED TO BE THE INCOME OF THE ASSESSEE. 3.18 SECTION 110 OF THE EVIDENCE ACT IS MATERIAL IN THIS RESPECT WHICH STIPULATES THAT WHEN THE QUESTION IS WHETHER ANY PERSON IS OWN ER OF ANYTHING OF WHICH HE IS SHOWN TO BE IN POSSESSION, THE ONUS OF PROVING THAT HE IS NOT THE OWNER, IS ON THE PERSON WHO AFFIRMS THAT HE IS NOT THE OWNER. IN OTH ER WORDS, IT FOLLOWS FROM WELL SETTLED PRINCIPLE OF LAW THAT NORMALLY, UNLESS CONT RARY IS ESTABLISHED, TITLE ALWAYS FOLLOWS POSSESSION. CHUHARMAL VS CIT (1988) 172 ITR 250 (SC). DOCUMENTARY EVIDENCE PLAYS AN IMPORTANT PART IN LAW. THE COURTS ATTACH GREAT VALUE FOR DOCUMENTARY EVIDENCE. THE PUNJAB & HARYANA HIGH COU RT IN THE CASE OF PARAMJIT SINGH VS ITO (2010) 323 ITR 588 (P & H) POINTED OUT THAT ORAL EVIDENCE IS NOT CONCLUSIVE AS AGAINST DOCUMENTARY EVIDENCE UNDER SE CTIONS 91 AND 92 OF THE INDIAN EVIDENCE ACT, 1872. IN VIEW OF THE ABOVE DISCUSSION, THE CIT(A) UPHELD THE ACTION OF THE ASSESSING OFFICER AND REJECTED THE PLEAS RAISED BY THE ASSESS EE. 6. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSESS EE IS IN FURTHER APPEAL BEFORE US. 7. THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASS ESSEE AT THE OUTSET SUBMITTED THAT THE SOLE BASIS OF THE IMPUGNED ADDIT ION OF RS.1,33,40,000/- IN THE HANDS OF THE ASSESSEE AND RS.96,00,000/- IN THE HANDS OF NITIN PALEKAR & CO. TOWARDS PURPORTED UNDISCLOSED CASH RECEIPT ON S ALE OF STONE QUARRY IS HANDWRITTEN LOOSE PAPER TERMED ISAR PAWATI SIGNED BY THE PARTNERS AND ALSO SIGNED ON BEHALF OF THE BUYERS. THE LEARNED AR ADVE RTED OUR ATTENTION TO THE ENGLISH TRANSACTION COPY OF LOOSE PAPER APPEARING A T PAGE NO. 9-10 OF THE PAPER BOOK WHICH IS REPRODUCED BELOW. FREE ENGLISH TRANSLATION OF THE NOTINGS MADE IN MAR ATHI ON THE LOOSE PAPER FOUND AND SEIZED IN THE COURSE OF SURVEY ACTION TAKEN AT THE BUSINESS PREMISES OF M/S SHANKAR RAMCHANDRA EARTH MOVERS ON 02/02/2010 --------------------------------------------------- --------------------------------------------------- 18/12/2007 OM NAMAH SHIVAY / SHRI GANESH PRASANNA THE DEAL BETWEEN SHRI VINAYAK SHETH NIMHAN (MLA SHI VAJINAGAR, PUNE) AND THE PARTNERS OF M/S ROCKSON INDUSTRIES AND M/S NITIN PA TEKAR & CO. IN RESPECT OF THE LAND SITUATED AT DHAYARI GAT NO.78/6 AND THE CRUSHE R AND SAND PLANT OWNED BY THESE FIRMS IS AGREED AS UNDER:- 13 ITA NO.956/PN/2012 ITA NO.957/PN/2012 1. THE PRICE OF THE ABOVE COMPLETE PROJECT IS AGREE D AT RS.5,35,00,000/- (RUPEES FIVE CRORE THIRTY FIVE LAKHS). 2. THE DEAL IS AGREED TO BE SETTLED BY AROUND 65% B Y CHEQUE AND 35% BY CASH. 3. IN RESPECT OF THIS COMPLETE DEAL TODAY RS.50 LAK HS BY CASH AND RS.10 LACS BY CHEQUE HAS BEEN AGREED TO BE PAID. THEREAFTER RS.1 ,00,00,000/- (RUPEES ONE CRORE) TO BE PAID BEFORE 20/01/2008. THE BALAN CE OF RS.3,75,00,000/- (THREE CRORE SEVENTY FIVE LAKHS) TO BE PAID BEFORE 25 TH FEBRUARY AND IF SO NOT DONE FOR EVERY MONTH RS.10 LAKHS WILL HAVE TO B E PAID. 4. FROM TODAY ONWARDS THE LIGHT BILL IN RESPECT OF THE PLANT AND ANY OTHER EXPENSES, ROYALTY, ACCIDENTS ETC SHALL BE PAID FULL Y BY SHRI VINAYAKRAO NIMHAN AND UNTIL THE DEAL IS COMPLETED BEFORE 25 TH FEBRUARY SHRI NIMHAN CAN MAKE ONLY NECESSARY CHANGES IN THE MACHINERY, F ABRICATING AS REQUIRED AND TAKE TRIAL. THERE SHALL NOT BE CARRIED ANY BLA STING AND STOCK OR ANY OTHER GOODS HELD ARE NOT TO BE SOLD. ACCORDINGLY DEAL IS AGREED AND BOTH PARTIES HAVE DE CIDED TO ABIDE. ON COMPLETION OF THE DEAL ALL THAT RUBBLES OR STONE S, GOODS ETC LYING ON THE LAND SHALL BE TOTALLY OWNED BY THE PURCHASER. TODAY ONW ARDS THE LIABILITY IN RESPECT OF PAYMENT OF INTEREST TO BANK AND LOAN INSTALLMENTS A RE TO BE PAID BY THE PURCHASER. THE SELLER SHALL NOT BE RESPONSIBLE. SELLER FOR ROCKSON INDUSTRIES SHRI KASHINADH LAXMAN PALEKAR SD/- SHRI RAMCHANDRA DAMODAR KAR SD/- PURCHASER- SHRI VINAYAKRAO NIMHAN (MLA), PASHAN PUNE SD/- 7.1 ANOTHER LOOSE PAPER WAS FOUND ALONG WITH THE AF ORESAID LOOSE PAPER NOTED ABOVE WHICH IS APPEARING AT PAGE NO. 13 OF TH E PAPER BOOK, WHICH GIVES SPECIFIC DETAILS OF PAYMENT BY CHEQUE TOGETHER WITH THE CHEQUE NUMBERS AND DATES AND ALSO CASH COMPONENT IN THE PAYMENT WHICH IS RECORDED PARA 3.5 OF THE ORDER OF THE CIT(A) EXTRACTED ABOVE. THIS LOOSE PAPER WAS ALSO SIMULTANEOUSLY REFERRED TO BY THE LEARNED AUTHRORIS ED REPRESENTATIVE FOR THE ASSESSEE. 14 ITA NO.956/PN/2012 ITA NO.957/PN/2012 7.2. CITING REFERENCE TO THE IMPUGNED LOOSE PAPER A T 9-10 & PAGE 13 OF THE PAPER BOOK REPRODUCED HEREINABOVE, THE LD. AUTHORIZ ED REPRESENTATIVE FOR THE ASSESSEE STRIDENTLY CONTENDED THAT THE CONTENTS OF THE SAID LOOSE PAPER MERELY SUGGESTED THE PROPOSAL OF SALE OF LAND AND MACHINER Y BY M/S ROCKSON INDUSTRIES TO SHRI VINAYAKRAO NIMHAN AND THUS CANNO T BE RELIED UPON. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE NEXT ADV ERTED OUR ATTENTION TO REGISTERED SALE DEED DATED 26.02.2008 WHEREIN THE S ALE CONSIDERATION RECORDED IS ONLY RS.3,05,00,000/- AS AGAINST ALLEGED CONSIDE RATION OF RS. 5,35,00,000/- NOTED AS PER LOOSE PAPER. HE SUBMITTED THAT THE AL LEGED CONSIDERATION AS PER LOOSE PAPER CAN ALSO NOT BE TRUE IN VIEW OF FAR LOW ER READY RECKONER STAMP DUTY VALUE OF REGISTERED DOCUMENT ACCORDINGLY TO WHICH I T IS VALUED AT RS.2,05,84,250/- ONLY. THE LD. AUTHORIZED REPRESEN TATIVE FOR THE ASSESSEE SUBMITTED THAT MERE PROPOSAL TOWARDS POSSIBLE TERMS AND CONDITIONS DO NOT IPSO FACTO GIVE RISE TO ANY BINDING OBLIGATION LEGALLY AND TH US CANNOT BE ACTED UPON. 7.3 THE LD. AR FURTHER SUBMITTED THAT THE AMOUNT ME NTIONED IN THE REGISTERED DOCUMENT REPRESENTS FULL VALUE OF CONSID ERATION RECEIVED AND THERE WAS NO CASH ELEMENT INVOLVED AS PURPORTEDLY PROPOSE D IN THE LOOSE PAPER. HE CONTENDED THAT THE ONUS LIES ON THE ASSESSING OFFIC ER TO PROVE THAT THE CONSIDERATION MENTIONED IN THE SALE DEED IS NOT FUL L VALUE OF CONSIDERATION WITHIN THE MEANING OF SECTION 48 OF THE ACT. IN OR DER TO PROVE THAT THE FULL VALUE OF CONSIDERATION IS MORE THAN WHAT IS RECORDE D IN THE DOCUMENT, THE ASSESSING OFFICER MUST BRING ON RECORD SOME COGENT EVIDENCE TO SUPPORT ACTUAL RECEIPT OF EXCESS CONSIDERATION. FOR THIS PROPOSIT ION, HE RELIED UPON THE DECISION IN THE CASE OF PREM NARAIN & CO. VS. CIT, 287 ITR 56 (P&H). 7.4 HE SUBMITTED THAT THE BUYER OF THE LAND AND MAC HINERY IS M/S SUNNY UDHYOG OF WHICH MR. VINAYAKRAO NIMHAN IS ONE OF THE PARTNERS. THE SAID BUYER CARRIES ON THE BUSINESS OF STONE QUARRY AND F OR THAT PURPOSE IT PURCHASED THE LAND AND MACHINERY FROM THE ASSESSEE AND NITIN PALEKAR & CO.. IT WAS LATER 15 ITA NO.956/PN/2012 ITA NO.957/PN/2012 FOUND THAT THE LAND IS NOT SUITABLE FOR THE PURPOSE OF CARRYING ON THE BUSINESS OF STONE QUARRY. LD. AR CONTENDED THAT OWING TO THIS UNSUITABILITY, THE IMPUGNED PROPOSAL OF CASH PAYMENT JOTTED ON THE LOOSE PAPER WAS NOT ACTED UPON. HE PLACED RELIANCE CERTIFICATE ISSUED BY THE GEOLOGIST M/S SANJIVINI CONSULTANCY DATED 26.12.2007 AS APPEARING AT PAGE NO.44 OF THE PAPER BOOK TO VOUCH THE AFORESAID AVERMENTS TOWARDS UNSUITABILITY. 7.5 HE NEXT CONTENDED THAT THE ASSESSING OFFICER HA S NOT EXAMINED THE BUYER MR. VINAYAKRAO NIMHAN TO FIND OUT WHETHER ACT UAL PAYMENT OF CASH HAS BEEN MADE AS ALLEGED. HE ALSO POINTED OUT THAT NO C ASH WAS FOUND AT THE TIME OF SURVEY. 7.6 THE LEARNED AR REFERRED TO THE STATEMENT UNDER S. 133A DATED 02.02.2010 OF SHRI RAMCHANDRA DAMODAR KAD APPEARING AT PAGE NO.16 TO 21 OF THE PAPER BOOK OF PARTNER WHEREIN AS PER QUESTIO N NO.7 OF THE STATEMENT, THE SAID PARTNER WHILE ADMITTING THAT THE ISAR PAVA TI IS IN HIS OWN HANDWRITING HAS CATEGORICALLY DENIED THAT THE TRANSACTION WAS N OT EXECUTED ACCORDING TO TERMS MENTIONED THEREIN. HE SUBMITTED THAT ON THE FACE OF SUCH DENIAL BY THE DEPONENT OF THE STATEMENT, THE LOOSE PAPER WHICH IS SOLE BASIS FOR MAKING THE ADDITION IS RENDERED IRRELEVANT AND EXTRANEOUS AND THUS STANDS DISCREDITED. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE CONT ENDED THAT THE ADVERSE VIEW TAKEN BY THE ASSESSING OFFICER IS MERELY ON SU SPICION, CONJECTURE AND IMAGINATION, WHICH IS NOT SUSTAINABLE IN LAW. 7.7 THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSES SEE ALSO ADVANCED LEGAL CONTENTIONS THAT S. 69A HAS NO APPLICATION IN THE F ACTS OF THE CASE. IN THE ABSENCE OF ANY UNACCOUNTED CASH PHYSICALLY FOUND OR ANY UNACCOUNTED INVESTMENTS FOUND IN THE CASE OF THE ASSESSEE AT TH E TIME OF SURVEY, THE ASSESSEE CANNOT BE SAID TO BE THE OWNER OF SUCH U NACCOUNTED CASH AS ALLEGED WHICH HAS NOT BEEN RECORDED IN THE BOOKS. HE SUBMI TTED THAT POSSESSION OF MONEY, BULLION, JEWELLERY, ETC. IS PRE-REQUISITE FO R INVOKING SECTION 69A OF THE 16 ITA NO.956/PN/2012 ITA NO.957/PN/2012 ACT. FOR THIS PROPOSITION, HE RELIED UPON THE DECI SION IN THE CASE OF ASHOK KUMAR VS. CIT, 160 ITR 497 (MP) AND J.S. PARKER VS. V.B. PALEKAR & ORS., 94 ITR 616 (BOM). 7.8 THE LEARNED AR THEREAFTER VEHEMENTLY SUBMITTED THAT SURVEY UNDER S. 133A HAS NOT BEEN CONDUCTED ON APPELLANT FIRMS PER SE BUT ON ANOTHER LEGAL ENTITY NAMELY SHANKAR RAMACHANDRA EARTHMOVERS PVT. LTD. AND THEREFORE LOOSE PAPER / ISAR PAWATI GIVING REFERENCE TO PROPOSED CA SH COMPONENT IN THE TRANSACTION CANNOT BE USED IN EVIDENCE AGAINST THE APPELLANTS HEREIN. IT WAS THUS CONTENDED THAT THE LOOSE PAPER FOUND IN THE SU RVEY PROCEEDINGS AND THAT TOO AT THE PREMISES OF OTHER ASSESSEE CANNOT BE USE D TO DRAW ADVERSE INFERENCE AGAINST THE ASSESSEE. 7.9 IN THE LIGHT OF THE ABOVE CONTENTIONS, THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE IMPUGNED ADDITI ON IS INCORRECT BOTH ON THE TOUCHSTONE OF LAW AS WELL AS ON FACTS AND PLEADED F OR RELIEF AS PER GROUNDS OF APPEAL. 8. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE STRONGLY RELIED UPON THE OBSERVATIONS MADE IN THE C ONCURRENT ORDERS OF THE AO AND CIT(A) AND VEHEMENTLY SUPPORTED THE ORDERS OF T HE AUTHORITIES BELOW. HE SUBMITTED THAT THE SURVEY ACTION AT THE BUSINESS PR EMISES OF THE ASSESSEE UNDER SECTION 133A OF THE ACT HAS UNEARTHED TANGIBLE INCR IMINATING DOCUMENT IN THE FORM OF ISAR PAVATI WHICH IS ADMITTEDLY WRITTEN I N THE HANDWRITING OF THE PARTNER OF THE ASSESSEE FIRM NAMELY MR. RAMCHANDRA DAMODAR KAD. THE LOOSE PAPER IS SIGNED BY MR. KASHINATH PALEKAR AND MR. RA MCHANDRA DAMAODAR KAD ON BEHALF OF THE SELLERS I.E. ASSESSEE AND ALSO SIG NED BY MR. VINAYAKRAO NIMHAN PARTNER OF SUNNY UDYOG ON BEHALF OF THE BUYE R. HE NEXT SUBMITTED THAT THE MOST RELEVANT FACT IS THAT DETAILS OF PAYM ENT NOTED IN THE LOOSE PAPER ARE SUBSTANTIALLY MATCHING WITH THE REGISTERED SALE DEED. HE ADVERTED OUR ATTENTION TO THE FACT THAT EVEN THE CHEQUE NUMBERS AND THE AMOUNT AS RECORDED 17 ITA NO.956/PN/2012 ITA NO.957/PN/2012 IN THE LOOSE PAPER (ISAR PAVATI) MATCHES WITH THE S ALE AGREEMENT. THE SAME CHEQUE NUMBERS AND AMOUNTS AS MENTIONED IN LOOSE PA PER IS RECORDED IN THE REGISTERED SALE DEED ALSO AS NOTED BY THE CIT(A). T HE SALE HAS ALSO FINALLY TAKEN PLACE WITH SAME VINAYAKRAO NIMHAN REPRESENTIN G SUNNY UDYOG. THE CASH COMPONENT AS MENTIONED IN THE LOOSE PAPER IS N ATURALLY NOT APPEARING IN THE REGISTERED SALE AGREEMENT. AS A COROLLARY TO TH ESE FACTS, THE CASH PAYMENT HAS BEEN RECEIVED BY THE ASSESSEE AND NITIN PALEKAR & CO. AS RECORDED IN THE LOOSE PAPER (ISAR PAVATI) WHICH REMAINED UNACCOUNTE D. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE POINTED OUT THAT WHE N A TANGIBLE AND SPEAKING DOCUMENTS NARRATING THE DETAILS OF CHEQUE PAYMENT A ND CASH PAYMENT IN EXPLICIT TERMS HAVE BEEN FOUND IN SURVEY PROCEEDING S WHICH BROADLY TALLIED WHERE THE CHEQUE DETAILS AND PAYMENT BROADLY TALLIE D WITH THE REGISTERED SALE DEED AND DOCUMENT, THERE IS NO FURTHER NEED ON THE PART OF THE REVENUE TO MAKE ROVING ENQUIRIES. THE ONUS SQUARELY LIES UPON THE ASSESSEE TO REBUT THE CONTENTS OF THE LOOSE PAPER FOUND IN SURVEY WHICH H AS NOT BEEN DISCHARGED. FURTHER, THE LD. DEPARTMENTAL REPRESENTATIVE FOR TH E REVENUE CONTENDED THAT PLEA OF THE ASSESSEE THAT THE SELLER HAS NOT BEEN E XAMINED FOR CASH PAYMENT IS A DAMP SQUIB IN THE CIRCUMSTANCES. THE EXERCISE SUGGESTED BY T HE LD. AR WOULD BE MERELY A FUTILE EXERCISE. IT IS NOT EXPECT ED FROM A PERSON GIVING PURPORTED CASH TO ADMIT AT A BELATED STAGE TO HAVE DONE SO. BE THAT AT IT MAY, THE LOOSE PAPER WAS DULY SIGNED BY THE SELLER AND B Y THE BUYER TOO. THE BUYER HAS NATURALLY AGREED FOR PAYMENT IN CASH AS NOTED I N THE LOOSE PAPERS. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE SUBMITT ED THAT THE CONTENTION OF THE ASSESSEE THAT THE LOOSE PAPER CANNOT BE RELIED UPON SINCE IT IS NOT AN AGREEMENT EXECUTED STAMP PAPER AND THEREFORE CARRIE S NO LEGAL ENFORCEABILITY HAS NO MERIT. ACCORDING TO HIM, THE LOOSE PAPER WH ICH CLEARLY IMPLICATES THE ASSESSEE AND OTHER PARTNERSHIP FIRM I.E. NITIN PALE KAR & CO. IS EXTREMELY RELEVANT PIECE OF EVIDENCE IN THE CIRCUMSTANCES PRE VAILING IN THE CASE. IT CARRIES SUBSTANTIAL EVIDENTIARY VALUE IRRESPECTIVE OF ITS E XECUTION ON SAME PAPER OR OTHERWISE. WHAT IS MATERIAL AND RELEVANT FOR DETER MINING THE ISSUE IS THAT THERE IS SUBSTANTIAL CORROBORATION ABOUT THE TRUTHFULNESS OF THE CONTENTS OF ISAR PAVATI. 18 ITA NO.956/PN/2012 ITA NO.957/PN/2012 THE SIMILARITY IN THE CHEQUE PAYMENT DETAILS AS REC ORDED IN THE REGISTERED SALE DOCUMENT QUA LOOSE PAPER IS OVERWHELMING. HE SUBMIT TED THAT THE DECISIONS CITED BY THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE BASED ON THEIR OWN FACTS AND ARE NOT RELEVANT IN THE DEMONSTRABLE FACT S OF THIS CASE. THE CIT(A) HAS OBJECTIVELY DEALT WITH THE DECISIONS CITED BEFO RE HIM. HE THUS SUBMITTED THAT THE DECISIONS CITED BY THE ASSESSEE ARE ON ITS OWN FACTS AND ARE MATERIALLY DIFFERENT FROM THE FACTS OF THIS CASE. HE THEREFORE SUBMITTED THAT THE ARGUMENT OF THE ASSESSEE THAT LOOSE PAPER FOUND HAS NOT BEEN ACTED UPON STANDS NEGATED AND NON RECEIPT OF CASH COMPONENT AS PLEADED ON BEH ALF OF THE ASSESSEE MILITATES AGAINST LOGIC. IN THE CONTEXT OF THE PLEA THAT THE LOOSE PAPER CAN NOT BE ADMITTED IN EVIDENCE, THE LEARNED DR RELIED ON THE PRESUMPTION AVAILABLE UNDER S. 292C OF THE ACT. HE SUBMITTED THAT THE DIRECTORS OF THE ASSESSEE CO. BEING PARTNERS OF THE APPELLANT HEREIN, WHERE THE CONTENT S OF LOOSE PAPER WERE FOUND HAND-WRITTEN AND SIGNED, THE REVENUE IS ENTITLED TO DRAW THE PRESUMPTION AGAINST THE PRESENT ASSESSEE. HE THEREFORE SUBMITTE D THAT THE ACTION OF THE REVENUE IN MAKING IMPUGNED ADDITION APPEALED AGAINS T IS FULLY JUSTIFIED AND NO INTERFERENCE IS CALLED FOR. 9. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS, ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND PERUSED THE CA SE LAWS CITED AT BAR. THE ONLY ISSUE IN THIS APPEAL IS ABOUT THE CORRECTNESS OF ADDITION OF APPORTIONED AMOUNT OF RS.1,33,40,000/- MADE BY THE ASSESSING OF FICER UNDER S. 69A OF THE ACT ON THE GROUND THAT IT REPRESENTS CASH RECEIVED AS ATTRIBUTABLE TO THE ASSESSEE ON SALE OF ITS LAND AND MACHINERY IN THE L IGHT OF LOOSE PAPER FOUND DURING SURVEY WHICH IS NOT DISCLOSED. 9.1 WE NOTICE FROM THE SUBMISSIONS OF THE ASSESSEE THAT THE ASSESSEE AS A PARTNERSHIP FIRM WAS ENGAGED IN THE BUSINESS OF STO NE QUARRY. IT HAD PURCHASED THE LAND FOR THAT PURPOSE. OTHER FIRM, NAMELY, NIT IN PALEKAR & CO. CONTRIBUTED TOWARDS PURCHASE OF MACHINERIES THAT WERE INSTALLED ON THIS LAND. THE ASSESSEE, HOWEVER, DISCONTINUED THE BUSINESS AND SOLD ALL THE ASSETS ON 26.02.2008 TO 19 ITA NO.956/PN/2012 ITA NO.957/PN/2012 ONE M/S SUNNY UDYOG REPRESENTED BY ONE MR. VINAYAK RAO NIMHAN. WE ALSO NOTICE THAT THE PARTNERS OF THE ASSESSEE ARE ALSO T HE DIRECTORS OF M/S SHANKAR RAMCHANDRA EARTH MOVERS PVT. LTD. WHERE SURVEY ACTI ON UNDER S. 133A TOOK PLACE. THE PARTNERS OF THE ASSESSEE AND NITIN PALEK AR & CO. ARE ALSO COMMON. PURSUANT TO A SURVEY ACTION UNDER SECTION 133A OF T HE ACT ON THE BUSINESS PREMISES OF ASSOCIATE CONCERN, M/S SHANKAR RAMCHAND RA EARTH MOVERS PVT. LTD. ON 02.02.2010 A LOOSE PAPER DATED 18.12.2007 W RITTEN IN MARATHI WAS FOUND WHICH IS THE SOURCE OF PRESENT ADDITION AND C ONTROVERSY WHICH IS ALREADY REPRODUCED (SUPRA) FOR READY REFERENCE. 9.2 WE ALSO NOTICE THAT IT IS NOT IN DISPUTE THAT T HE LOOSE PAPER (ISAR PAWATI) FOUND DURING THE COURSE OF SURVEY PERTAINS TO TRANS ACTION OF SALE OF STONE QUARRY REFEREED HEREINABOVE. IT IS ALSO NOT IN DISP UTE THAT THE IMPUGNED ISAR PAWATI WAS WRITTEN ON THE HANDWRITING OF ONE OF THE PARTNERS OF THE ASSESSEE FIRM AND ALSO SIGNED BY HIM ALONG WITH OTHER PARTNE R MR. KASHINATH L. PALEKAR. THE SIGNATURE OF THE PROPOSED BUYER MR. VINAYAKRAO NIMHAN ON THE LOOSE PAPER HAS ALSO NOT BEEN DISPUTED. ANOTHER FACT THAT DIRECTORS OF M/S SHANKAR RAMCHANDRA EARTHMOVERS P. LTD. ARE PARTNERS OF THE ASSESSEE FIRMS AND ARE INTERCONNECTED IS ALSO NOT IN DISPUTE. WHAT HAS BEE N DISPUTED IS THAT LOOSE PAPER FOUND DURING THE COURSE OF SURVEY ACTION ON T HE BUSINESS PREMISES OF SISTER COMPANY CANNOT BE RELIED UPON FOR THE REASON THAT CASH CONSIDERATION MENTIONED IN THE LOOSE PAPER WAS ONLY A PROPOSED CO NSIDERATION NOT ACTED UPON ALBEIT PREPARED. THE REASON PROPAGATED FOR CONSIDER ATION ALLEGEDLY FINALIZED SUBSEQUENTLY WITHOUT IMPUGNED CASH COMPONENT IS ATT RIBUTED TO UNSUITABILITY OF LAND FOR STONE QUARRY AS PER SOME EXPERT REPORT. 9.3 THE ANSWER TO QUESTION NO. 7 & 8 POSED BEFORE T HE PARTNER MR. RAMCHANDRA KAD (DEPONENT) IN THE STATEMENT DATED 2 /2/ 2010 RECORDED DURING THE COURSE OF SURVEY UNDER S. 133A ON SHANKAR RAMCH ANDRA EARTHMOVERS PVT. LTD. AS APPEARING ON PAGE NO. 18 OF THE PAPER BOOK WHEREIN THE DEPONENT OF THE STATEMENT DENIED HAVING RECEIVED CASH CONSIDERATION AS PER THE TERMS STIPULATED 20 ITA NO.956/PN/2012 ITA NO.957/PN/2012 IN THE LOOSE PAPER IS WHAT WHICH WAS HEAVILY RELIED UPON ON BEHALF OF THE ASSESSEE. THE RELEVANT PARTS OF THE STATEMENT IS EX TRACTED BELOW FOR READY REFERENCE. STATEMENT OF SHRI RAMCHANDRA DAMODAR KAD, AGE 48 Y EARS RESIDING AT 80/85 OM LAXMI NIWAS, PRABHAT ROAD, PUNE 411 004, RECORDED O N OATH U/S 131 OF THE IT ACT, 1961 AT THE BUSINESS PREMISES OF M/S SHANKAR RAMCHA NDRA EARTHMOVERS PVT. LTD. IN THE COURSE OF SURVEY ACTION U/S 133A OF THE IT ACT, 1961 ON 02.02.2010. --------------------------------------------------- --------------------------------------------------- Q1. PLEASE IDENTIFY YOURSELF ? A1. MY NAME IS RAMCHANDRA DAMODAR KAD, AGE 48 YEARS , EDUCATION H.S.C. (COMM.), KADACHIWADI, POST CHAKAN, TAL KHED, PUNE, PRESENTLY RESIDING AT THE ABOVE ADDRESS AND ENGAGED IN CIVIL CONSTRUCTION WOR KS. Q2. PLEASE EXPLAIN IN DETAIL THE BUSINESS ACTIVITIE S CARRIED OUT BY YOU. ALSO STATE THE DETAILS OF THE CONCERNS WHERE YOU ARE EITHER PA RTNER OR DIRECTOR AND PROPRIETOR ? A2. I AM DIRECTOR AND PARTNER IN THE FOLLOWING CONC ERNS, WHICH ARE ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTIONS AND UNDERTAKE C ONTRACTS FOR CONSTRUCTION OF ROAD, DAM, CANAL, TUNNEL, AIRPORTS AND ETC. THESE CONCERNS UNDERTAKE CONTRACTS FROM GOVERNMENT AND PRIVATE PARTIES: 1. M/S SHANKAR RAMCHANDRA EARTHMOVERS PVT. LTD. (SR EPL) DIRECTOR 2. M/S SREPL CPBC (C.P. BAGAL AND COMPANY) JOIN T VENTURE 3. M/S SREPL TECKSON JOINT VENTURE 4. M/S SREPL PRIME JOINT VENTURE 5. M/S SREPL NPCC (NAIKARE PATIL CONSTRUCTION C O.) JOINT VENTURE. 6. M/S NITIN PALEKAR AND CO. PARTNER. I WAS ALSO PARTNER IN M/S ROCKSON INDUSTRIES, THE B USINESS ACTIVITIES OF THIS CONCERN HAS BEEN CLOSED DOWN AND ASSETS AND PROPERTIES OF T HE SAID FIRM HAVE BEEN SOLD OUT. I ALSO HAVE INCOME FROM HOUSE PROPERTY AND INCOME F ROM OTHER SOURCES BEING INTEREST INCOME AND AGRICULTURAL INCOME. Q.NO.7 I AM SHOWING YOU A ISAR PAVATI DATED 18.1 2.2007 WHICH IS SIGNED BY SHRI KASHINATH LAXMAN PALEKAR & SHRI RAMCHANDRA DAMODAR KAD AS THE SELLER AND SHRI VINAYAKRAO NIMHAN AS THE PURCHASER. THIS ISAR PAVATI IS HAND WRITTEN AND IT IS KEPT IN BUNDLE NO.1 IN THE PINK FOLDER NA MED AS GALA GOODLUCK OFFICE THE 777 AT PAGE NO.1, THIS ISAR PAVATI WAS FOUND IN THE DRAWER OF YOUR OFFICE TABLE. WILL YOU PLEASE TELL ME AS TO WHOSE HANDWRITING IS ON THIS ISAR PAVATI. A 7. THIS ISAR PAVATI IS IN MY OWN HANDWRITING. BUT THIS TRANSACTION WAS NOT EXECUTED ACCORDING TO THE TERMS MENTIONED THEREIN. Q 8. THE ISAR PAVATI MENTIONED IN Q NO.7 CONTAINS THE DETAILS OF SALE OF PLOT OF LAND OWNED BY M/S ROCKSON INDUSTRIES AND M/S NITIN PALEKAR & CO. SITUATED AT GAT NO.78/6 DHAYARI, PUNE. IN THIS ISAR PAVATI IT IS MENTIONED THAT THE SAID LAND WAS SOLD FOR RS.5,35,00,000/- OUT OF WHICH 35% WAS TAKE N BY THE SELLERS IN CASH. FURTHER, AT PAGE NO.2 OF BUNDLE NO.1 AS IMPOUNDED I N THE COURSE OF SURVEY ACTION 21 ITA NO.956/PN/2012 ITA NO.957/PN/2012 CARRIED OUT ON 02/02/2010, THE DETAILS OF PAYMENTS OF CASH TO THE TUNE OF RS.2,30,00,000/- HAVE BEEN DISTRIBUTED AS BELOW: RS.50,00,000/- TO ASK RS.80,00,000/- TO NITIN RS.1,00,00,000/- TO RDK AT PAGE NO.3 TO 39 OF BUNDLE NO.1, COPY OF SALE-DEE D OF THE SAID LAND IS PLACED IN WHICH, IT IS SHOWN THAT THE LAND WAS SOLD FOR RS.3, 05,00,555/-. FROM THESE DOCUMENTS, IT IS CLEAR THAT YOU HAD RECEIVED A SUM OF RS.2,30,00,000/- [5,35,00,000 3,05,00,000] IN CASH AND THE SAME HAVE NOT BEEN S HOWN IN THE INCOME TAX RECORD IN THE ASST. YEAR 2008-09 (FY 2007-08). WHAT DO YO U WANT TO SAY ON THIS ? ANS. : YOUR OBSERVATION IS NOT CORRECT AND I DENY T HIS TRANSACTION. 9.4 IN THE BACKGROUND OF ABOVE FACTS, WE SHALL EXAM INE THE ISSUE ON MERITS RAISED BY THE ASSESSEE IN THE FACTS OF THE CASE. TH E LOOSE PAPER (ISAR PAWATI) WHICH EMBODIES OBJECTIVE DETAILS OF RECEIPT BY CHEQ UE AS WELL AS CASH IS THE STARTING POINT IN THE PRESENT CASE. WE FIND THAT TH E TRANSACTION WAS ACTED UPON AND SAILED THROUGH BROADLY ON THE SAME TERMS AS PRO VIDED IN THE ISAR PAWATI. THE CHEQUE NUMBERS AND AMOUNT AS NOTED IN THE HAND WRITTEN AS WELL AS SIGNED LOOSE PAPER TALLIES WITH THE REGISTERED SALE DOCUME NT AS NARRATED IN PARA 3.5 OF CIT(A) ORDER. ON THE FACE OF SUCH STRIKING SIMILARI TY, THE CONTENTS OF LOOSE PAPER STANDS CORROBORATED AND RENDERED UNFLINCHING. THUS, WHEN THE DOCUMENT I.E. LOOSE PAPER IS READ AS A WHOLE, WE FIND THAT P RESUMPTION OF CASH COMPONENT IN THE DEAL AS RECORDED IN THE LOOSE PAPER IS CLEAR LY DISCERNABLE AND HAS A SOUND BASIS. THE AVERMENTS MADE IN THE STATEMENT GIVEN BE FORE SURVEY TEAM OF I.T. DEPARTMENT THAT THE TRANSACTION WAS NOT EXECUTED AC CORDING TO TERMS MENTIONED IN LOOSE PAPER IS CLEARLY OPPOSED TO WHAT IS OBVIOUS AND THUS OSTENSIBLY UNRELIABLE AND DEVOID OF ANY RATIONAL PR OBATIVE VALUE. WE FIND THAT THE JUSTIFICATION ADVANCED ON BEHALF OF THE ASSESSE E THAT CASH COMPONENT INITIALLY AGREED WAS DROPPED DUE TO UNSUITABILITY O F LAND FOR STONE QUARRY AS SHALLOW AND JUDICIALLY UNPALATABLE. THE ASSESSEE IN TENDING TO INDULGE IN STONE QUARRY BUSINESS AND HAVING INCURRED LARGE CAPITAL E XPENDITURE ON ACQUISITION OF THE MACHINERY ETC., IT IS DIFFICULT TO ACCEPT THAT SAID ISAR PAWATI HAS BEEN PREPARED AND SIGNED WITHOUT DUE DILIGENCE ON THIS B ASIC ASPECT INVOLVING AMOUNT OF SUCH MAGNITUDE. THE EXPLANATION OFFERED ON BEHALF OF THE ASSESSEE 22 ITA NO.956/PN/2012 ITA NO.957/PN/2012 IS TOTALLY INCOMPREHENSIBLE WHEN SURROUNDING CIRCUM STANCES EXISTING IN THE CASE ARE TESTED ON THE TOUCHSTONE OF PREPONDERANCE OF PROBABILITIES. THE CORROBORATION OF LOOSE PAPER WITH REGISTERED DOCUME NT IN MATERIAL PARTICULARS ARE COMPELLING. WE ARE OF THE CONSIDERED OPINION T HAT THE INITIAL BURDEN OF PROVING PRESENCE OF UNDERSTATEMENT IN THE REGISTERE D DOCUMENT STANDS DISCHARGED BY THE REVENUE. THE EXTENT OF UNDERSTATE MENT IS ALSO SPECIFIED IN THE LOOSE PAPER ITSELF. THE BASIS OF APPORTIONMENT OF CASH COMPONENT IS ALSO IN SYNC WITH THE INCRIMINATING DOCUMENTS FOUND DURING THE SURVEY PROCEEDINGS. ON THE OTHER HAND, THE ASSESSEE HAS FAILED TO DISCH ARGE ITS ONUS THAT THE CASH COMPONENT HAS NOT BEEN ACTUALLY RECEIVED AS PER LOO SE PAPER PREPARED AND PRESERVED IN THE CUSTODY OF ITS PARTNER. WE ALSO FI ND THAT SINCE THE CONCERNED LOOSE PAPER IS FOUND TO BE PERTAINING TO THE APPELL ANTS HEREIN, SEIZURE OF THE SAME IN THE HANDS OF OTHER CORPORATE ENTITY REPRESE NTED BY ONE OF THE PARTNERS OF THE APPELLANT FIRMS HEREIN WILL NOT RENDER IT EXTRANEOUS PER SE FOR ASSESSMENT PURPOSES. IN OUR CONSIDERED VIEW, THE R EVENUE IS ENTITLED TO USE THE INCRIMINATING EVIDENCE AGAINST THE ASSESSEE IN THE GIVEN FACTS. 9.5 AT THIS JUNCTURE, IT IS ALSO PERTINENT TO NOTIC E THE OTHER LIMB OF THE ARGUMENT ON BEHALF OF THE ASSESSEE THAT IMPUGNED LO OSE PAPER FOUND IN SURVEY UNDER S. 133A DO NOT CONSTITUTE EVIDENCE AND CAN NO T GIVE RISE TO PRESUMPTION AGAINST THE ASSESSEE IN THE ABSENCE OF ANY ACTUAL C ASH FOUND AS ALLEGED TO BE UNACCOUNTED INCOME. WE HAVE ALREADY OBSERVED THAT C ONTENTS OF LOOSED PAPER I.E. ISAR PAWATI IMPOUNDED IS ENTITLED TO GREAT WEI GHT DUE TO ITS SUBSTANTIAL CORROBORATION OF PAYMENTS WITH REGISTERED DOCUMENT, NATURALLY WITHOUT CASH. WE ARE OF THE OPINION THAT ONCE IT IS CONCLUDED ON FACTS THAT THE CONTENTS OF THE DOCUMENT FOUND ARE RELEVANT AND TRUE WHICH ESTABLIS HES OWNERSHIP, NON- DETECTION OF PHYSICAL CASH OR OTHER EQUIVALENT ASSE T PER SE WOULD NOT BE A HANDICAP TO INVOKE SECTION 69A OF THE ACT. HENCE, NOTWITHSTANDING NON- DEDUCTION OF PHYSICAL CASH, DEEMING PROVISION OF SE CTION 69A OF THE ACT WILL APPLY. 23 ITA NO.956/PN/2012 ITA NO.957/PN/2012 9.6 IN THE FACTS OF THE CASE, LOOSE PAPER FOUND IN THE DRAWER OF THE DIRECTOR OF THE COMPANY SURVEYED WHO IS ALSO THE PARTNER OF THE ASSESSEE AND CONTENTS FOUND TO HAVE BEEN VINDICATED, THE PRESUMPTION AGAI NST THE ASSESSEE IS SUPPORTABLE IN LAW. THE LOOSE PAPER OR ISAR PAWATI IN OUR OPINION ASSUMES THE COLOUR OF VALID EVIDENCE AGAINST THE ASSESSEE ON IT S CORROBORATION BY PAYMENT DETAILS OF REGISTERED DOCUMENT. THUS, THE PLEA OF T HE ASSESSEE IN THIS REGARD DOES NOT HOLD WATER. 9.7 THE ASSESSEE HAS ALSO CHALLENGED THE ACTION OF THE REVENUE IN INVOKING S. 69A AND HAS ALLEGED THAT THE AO HAS NOT TAKEN IN TO CONSIDERATION THE SCOPE AND EFFECT OF S. 69A WHILE MAKING ADDITION TOWARDS ALLEGED UNACCOUNTED CASH COMPONENT. ON A PLAIN READING, IT CAN BE SEEN THAT SECTION 69A OF THE ACT PROVIDES THAT WHERE THE ASSESSEE IS FOUND TO BE THE OWNER OF ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE AND WH ICH IS NOT RECORDED IN THE BOOKS OF ACCOUNT MAINTAINED BY HIM FOR ANY SOURCE O F INCOME AND FAILS TO EXPLAIN THE SOURCE AND NATURE OF ITS ACQUISITION TH E MONEY OR THE VALUE OF BULLION, JEWELLERY, ETC. THE UNRECORDED AMOUNT WILL BE DEEMED TO BE THE INCOME OF THE ASSESSEE. ON BEHALF OF THE ASSESSEE, IT IS C ONTENDED THAT THE SINCE NO UNACCOUNTED CASH WERE ACTUALLY FOUND, NOR ANY INVES TMENT WAS FOUND, SECTION 69A OF THE ACT IS NOT ATTRACTED. WE DO NOT FIND ANY MERIT IN SUCH ARGUMENT. THE WORD OWNER EMPLOYED HAS TO BE UNDERSTOOD IN T HE CONTEXT. WE HAVE ALREADY OBSERVED THAT PHYSICAL PRESENCE OF CASH OR OTHER CORRESPONDING UNACCOUNTED INVESTMENT PER SE TO SUPPORT AN ENTRY FOUND IN THE DOCUMENTS IS NOT THE PRE REQUISITE TO SUPPORT ITS OWNERSHIP FOR ASSESSMENT PURPOSES UNDER SECTION 69A OF THE ACT. WE ARE ALIVE TO THE FACT T HAT THE SCOPE IN RESPECT OF COVERAGE OF PREMISES UNDER SECTION 133A OF THE ACT ARE LIMITED. ALSO, THE CIRCUMSTANCES HAVE TO BE WEIGHED TO COME TO CONCLUS ION ABOUT THE ALLEGED UNACCOUNTED MONEY FOR ASSESSMENT PURPOSES. IN THE I NSTANT CASE, IN OUR VIEW, MONEY IN THE FORM OF CASH WAS FOUND TO BE ATTRIBUTA BLE TO THE ASSESSEE AS PER THE INCRIMINATING DOCUMENT I.E. ISAR PAVATI, NATURE AND SOURCE WHEREOF HAS NOT BEEN EXPLAINED SATISFACTORILY. THE ASSESSING OFFICE R HAS SOUGHT EXPLANATION ON 24 ITA NO.956/PN/2012 ITA NO.957/PN/2012 ALLEGED CASH NOT FOUNDED TO BE RECORDED IN BOOK AND FOUND THE EXPLANATION OFFERED BY THE ASSESSEE AS UNSATISFACTORY. THEREFO RE, WE DO NOT FIND MERIT IN THE PLEA OF THE ASSESSEE WITH REGARD TO NON APPLICA BILITY OF S. 69A. 9.8 THE ASSESSEE HAS RELIED UPON THE DECISION IN TH E CASE OF ASHOK KUMAR VS. CIT 160 ITR 497 (MP) AND J S PARKAR 94 ITR 616 (BOM.) FOR THE PROPOSITION THAT PHYSICAL POSSESSION OF CASH ETC. I S THE PREREQUISITE FOR INVOKING S. 69A OF THE ACT. WE DO NOT FIND ANYTHIN G IN THESE DECISIONS TO SUGGEST THAT PHYSICAL POSSESSION OF CASH OR OTHER A SSET IS A SIN QUA NON TO ESTABLISH OWNERSHIP FOR THE PURPOSES OF S. 69A OF T HE ACT. IT WAS HELD IN THESE CASES THAT POSSESSION IS EVIDENCE OF OWNERSHIP. IN OUR VIEW, THIS CANNOT BE READ VICE VERSA THAT WITHOUT PHYSICAL POSSESSION, T HERE IS NO OWNERSHIP. 9.9 WHILE CONCLUDING, WE ALSO NOTICE THAT THE CIT(A ) HAS DEALT WITH THE FACTUAL CONTENTIONS OF THE ASSESSEE THREADBARE AND ALSO THE DECISIONS CITED. THE DECISIONS CITED ON BEHALF OF THE ASSESSEE WERE REND ERED ON THEIR OWN FACTS AND ARE CLEARLY DISTINGUISHABLE. WE ENDORSE THE ESSENCE OF THE FINDINGS OF THE CIT(A) THAT IN VIEW OF THE SPEAKING FACTS NARRATED IN THE LOOSE PAPER FOUND AT THE TIME OF SURVEY WHICH CLEARLY MATCHES ON MATERIA L PARTICULARS WITH THE REGISTERED SALE DEED EXECUTED SUBSEQUENTLY, THERE I S NO ROOM LEFT TO DISBELIEVE THE CONTENTS OF THE LOOSE PAPER. IT IS TRITE THAT WHEN A PART OF THE DOCUMENT HAS BEEN ACCEPTED, OTHER PART OF THE SAME DOCUMENT CANN OT BE IGNORED IN THE ABSENCE OF ANY TANGIBLE PROOF TO THE CONTRARY. IN OUR CONSIDERED VIEW, ASSESSEE FAILED TO REBUT THE CONTENTS OF THE LOOSE PAPER SAT ISFACTORILY AND THUS FAILED TO DISCHARGE THE ONUS WHICH LAY UPON IT TO PROVE WHAT IS APPARENT AS PER LOOSE PAPER IS NOT REAL. ACCORDINGLY, WE HOLD THAT ORDE R OF THE CIT(A) DOES NOT SUFFER FROM ANY INFIRMITY AND THEREFORE NO INTERFER ENCE IS CALLED FOR. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN I TA NO.956/PN/2012 RELATING TO ASSESSMENT YEAR 2008-09 IN THE CASE OF M/S ROCKSON INDUSTRIES IS DISMISSED. 25 ITA NO.956/PN/2012 ITA NO.957/PN/2012 11. NOW, WE SHALL TAKE-UP THE APPEAL OF THE ASSESSE E IN ITA NO.957/PN/2012 IN THE CASE OF M/S NITIN PALEKAR & C O., WHICH IS DIRECTED AGAINST THE ORDER OF CIT(A)-II, PUNE DATED 06.01.20 12 RELATING TO ASSESSMENT YEAR 2008-09 PASSED UNDER SECTION 143(3) OF THE ACT . 12. THE FACTS AND ISSUE IN THIS APPEAL ARE IDENTICA L IN MATERIAL ASPECT. ACCORDINGLY, THE OBSERVATIONS AND FINDING IN ITA NO .956/PN/2012 THEREON SHALL APPLY MUTATIS-MUTANDIS IN THIS APPEAL. FOR THE PARITY OF REASONING, WE ALSO DISMISS THE APPEAL OF THE ASSESSEE IN ITA NO.9 57/PN/2012 RELATING TO ASSESSMENT YEAR 2008-09 IN THE CASE OF M/S NITIN PA LEKAR & CO.. 13. RESULTANTLY, BOTH THE APPEALS OF THE RESPECTIVE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED ON THIS 30 TH DAY OF DECEMBER, 2015. SD/- SD/- ( SUSHMA CHOWLA ) ( PRADIP KUMAR KEDIA ) / JUDICIAL MEMBER # / ACCOUNTANT MEMBER PUNE ; DATED : 30 TH DECEMBER, 2015. % & '() *)' / COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-II, PUNE; 4) THE CIT-II, PUNE; 5) THE DR A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. %+ / BY ORDER , ' # //TRUE COPY// $ %& # '( / SR. PRIVATE SECRETARY ) '* , / ITAT, PUNE