Appeal Details
Counselvise Citation
[2012] 140 COUNSELVISE.COM (IT) 62034 (ITAT-JAIPUR)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
7 month(s) 21 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
29-06-2012
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
A
Assessment Year
2007-2008
Appeal Filed On
08-11-2011
Judgement Text
1 ITA 961(2)-11 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH : A JAIPUR. BEFORE SHRI R.K. GUPTA AND SHRI SANJAY ARORA ITA NO. 961/JP/2011 ASSTT. YEAR : 2007-08. THE DCIT, CENTRAL CIRCLE-2, VS. M/S. COUNTRYWIDE BUILDESTATE PVT. JAIPUR. LTD., B-304, JANTA COLONY, JAIPUR. (APPELLANT) (RESPONDENT) C.O. NO. 87/JP/2011 ( ARISING OUT OF ITA NO. 961/JP/2011 ) ASSTT. YEAR : 2007-08. M/S. COUNTRYWIDE BUILDESTATE PVT. LTD., VS. THE DCI T, CENTRAL CIRCLE-2, JAIPUR. JAIPUR. (CROSS OBJECTOR) (RESPONDENT) APPELLANT BY : SHRI SUNIL MATHUR RESPONDENT BY : SHRI VIJAY GOYAL DATE OF HEARING : 18.04.2012. DATE OF PRONOUNCEMENT : 29.6.2012. ORDER DATE OF ORDER : 29/06/2012. PER R.K. GUPTA, J.M. THIS IS AN APPEAL BY DEPARTMENT AGAINST THE ORDER OF LD. CIT (A) RELATING TO ASSESSMENT YEAR 2007-08, AND THE ASSESSEE HAS FILED CROSS OBJECTION. 2. IN APPEAL, THE DEPARTMENT IS OBJECTING IN DELETI NG THE ADDITION OF RS. 2,00,19,492/- MADE BY ASSESSING OFFICER UNDER SECTION 69B OF THE IT ACT. 2 3. VARIOUS GROUNDS HAVE BEEN TAKEN BY THE DEPARTMEN T. HOWEVER, ALL THE GROUNDS ARE IN RESPECT OF THE ADDITION DELETED BY LD. CIT ( A). 4. THE CROSS OBJECTION FILED BY ASSESSEE IS IN SUPP ORT OF THE ORDER OF THE LD. CIT (A), THEREFORE DOES NOT REQUIRE ANY SEPARATE ADJUDICATIO N. 5. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A PRIVATE LIMITED COMPANY INCORPORATED IN 2005 BY SHRI ARUN LASHKARY AND SHRI SHYAMSUNDER LASHKARY OF THE LASHKARY GROUP WHO WAS SEARCHED ON 06.08.08 AS ITS SHARE HOLDERS. DURING THE PERIOD RELEVANT TO THE ASSESSMENT YEAR 2007-08 THERE WAS N O TRADING ACTIVITY. THE RETURN OF INCOME FOR AY 2007-2008 DECLARING NIL INCOME WAS FI LED 04-03-2009. DURING THIS YEAR, THE ASSESSEE COMPANY PURCHASED A LAND ADMEASURING 6 .06 HECTARE. THE LAND IN QUESTION IS SITUATED AT VILLAGE BHAVGARH BHANDA, TEH. SANGANER, DISTT. JAIPUR. THE ASSESSEE PURCHASED THIS LAND THROUGH AGREEMENT TO SALE FOR RS. 1,25,00,000/- FURTHER THE ASSESSEE COMPANY ALSO GOT EXECUTED WILL AND POWE R OF ATTORNEY FROM THE OWNER OF THE LAND IN FAVOUR OF SHRI ARUN LASHKARY. SHRI ARUN LA SHKARY, HAVING POWER OF ATTORNEY OF THE LEGAL OWNER OF THE LAND (SHRI DEEN DAYAL & OTHE RS) TRANSFERRED LEGAL TITLE/LEGAL OWNERSHIP OF THIS LAND TO THE ASSESSEE COMPANY BY E XECUTING THE REGISTERED SALE DEED ON 20.10.2007. THE ASSESSEE COMPANY APPLIED TO JDA FOR APPROVAL OF RESIDENTIAL SCHEME AND FINALLY GOT THE SCHEME APPROVED FROM JDA. THE ASSESSEE COMPANY DEPOSITED RS. 1,00,74,005.00 IN OCT 2007 (AY 2008-2009) WITH JDA AGAINST APPROVAL/CONVERSION CHARGES. THE JDA ISSUED THREE PATTAS IN FAVOR OF THE ASSESSEE COMPANY ON 05.11.2007 ONE FOR PLOT NO. 1 MEASURING 23217.53 SQ.YD SECOND FOR PLOT NO 2 MEASURING 32436.84 SQ.YD AND THIRD FOR PLOT NO 3 MEASURING 2987.41 S Q.YD WHICH WERE REGISTERED BEFORE 3 SUB-REGISTRAR ON 31.10.2007. THE COPY OF JDA PATTA AND SITE PLAN WAS UNDER SEIZURE OF THE DEPARTMENT. 6. DURING THE COURSE OF SEARCH OPERATIONS A PAPER M ARKED AS PAGE 37 OF EXHIBIT ANN. A-57 WAS SEIZED FROM 73-75 TALKATORA, JAIPUR. THE CONTENTS OF THIS PAPER ARE REPRODUCED AS FOLLOWS:- COLUMN 1 COLUMN 2 COLUMN 3 COLUMN 4 26.66 BHAVGARH 166 330 22.5 PUSH GARDEN 169 400 50 MAHAL RD 14.5 30 40 DABLA KHURD 70 120 60 CHAKSU 88 200 60 GUNSI 60 200 45 VATSALYA 90 18.75 SPORTS CITY 120 80 R R FARM 108 440 666 18.30 THE AO MENTIONED THAT SHRI PAWAN LASHKARY, THE KEY PERSON OF THE GROUP HAS SCRIBBLED NAMES OF PROPERTIES OWNED BY THE COMPANIE S IN LASHKARY GROUP. FOR INSTANCE BHAVGARH BANDA BELONGS TO COUNTRYWIDE BUIL DESTATE PVT. LTD, PUSHP GARDEN BELONGS TO RISING BUILDESTATE PVT. LTD, DABL A KHURD BELONGS TO APPLE BUILDESTATE PVT. LTD, RR FARM TO P L ESTATES PVT. L TD AND SO AND SO FORTH. DURING THE POST SEARCH INQUIRY THE STATEMENT OF PAWAN LASH KARY WAS RECORDED ON 17/11/2008 AND IN RESPONSE TO QUESTION NO. 10 ON TH IS PAPER, HE STATED THAT THE FIGURES WERE MENTIONED IN COLUMN 4 OF THIS PAPER BY OMITTING TWO ZEROS. HE HAS SAID THAT 166 MEAN 16600 AND 330 MEANS 33000 AND IT REPRESENTS LAND AREA WHICH 4 MEANS THAT THERE IS A TOTAL OF 33000 SQ MTR OF LAND AT BHAVGARH BANDA. THE LAST FIGURE OF 1830 (I.E. THE TOTAL OF COLUMN 4) SHRI PA WAN LASHKARY STATED THAT IT IS THE TOTAL LAND OF THE GROUP IN SQ MTRS. ALSO THE FIGURE S WRITTEN AGAINST EACH PLOT, I.E. COLUMN 3 IS THE EXPENDITURE FOR TAKING POSSESSION O F THE SAID PLOT. THE FIGURES IN COLUMN 1 ARE WRITTEN BY OMITTING THREE ZEROES AND I T IS THE MARKET RATE OF PURCHASE/SALE PER BIGHA. THE AO MENTIONED THAT UPO N VERIFICATION, THE STATEMENTS OF SHRI PAWAN LASHKARY TURNED OUT TO BE INCORRECT. AS FOR COLUMN 1, IT IS SEEN THAT THE CODING IS NOT THREE ZEROES AS BY ADDING THREE Z EROES, ONE DOES NOT ARRIVE AT EITHER THE PURCHASE PRICE PER BIGHA OR THE MARKET PRICE/BI GHA. TAKE FOR INSTANCE THE FIRST PROPERTY, I.E. BHAVGARH BANDA IN THE CASE OF COUNTR YWIDE BUILDESTATE, THE PRESENT ASSESSEE, IT WAS BOUGHT AT RS. 1.25 CRORES FOR 6.06 HECTARES AND INCURRED FURTHER RS. 1.25 CRORES FOR REGISTRATION AND OTHERS OR FOR INST ANCE THE CASE OF THE ASSESSEE WHO OWNS PUSHP GARDEN PROPERTY AT MURLIPURA WHOSE PURCH ASE RATE/MARKET RATE IS NOT 22.5 (OMITTING THREE ZEROES). THE PURCHASE PRICES H AVE BEEN VERIFIED FROM THE DEEDS LYING UNDER SEIZURE WITH THE DEPARTMENT. THE AO MEN TIONED THAT THE MARKET VALUE OF THE LAND AS PER THE DOCUMENTS SEIZED FROM THE AS SESSEE AT ANN A 40 IS RS 6000/SQ YARD. AS FOR COLUMN THREE, THERE ARENT ANY EXPENSE S THAT CORRESPOND TO THESE FIGURES IN SUCH LAND ACCOUNTS ON JAMBANDI/CONVERSION EITHER BEFORE OR AFTER PURCHASE AND IN NONE OF THE PROPERTIES, THESE EXPENSES MATCH. AS FO R COLUMN FOUR, THESE ARE NOT THE AREA OF LAND OWNED BY THE ASSESSEE GROUP AS BHAVGAR H BANDA IS A 72,000 SQ YARD; PUSHP GARDEN IS 21000 SQ YARD AND SO AND SO FORTH. THE TOTAL OF COLUMN 4 (18.3) IS NOT THE AREA OWNED BY THE ASSESSEE GROUP IN EITHER BIGHA/SQ YARDS/SQ FEET/ HECTARE. IN VIEW OF THESE FACTS, A.O. OBSERVED THAT THE STAT EMENT GIVEN BY SH. PAWAN 5 LASHKARY DURING POST SEARCH INQUIRY WAS NOT CORRECT ON THIS ISSUE. THE DEPARTMENT HAS SEIZED ANOTHER PAPER ANN A 40, PAGE 77. IN THI S PAPER, LAND EXPENSES HAVE BEEN TAKEN TO BE RS. 37,06,98,000/- @ RS. 6000/SQ YARDS. ALONGSIDE WAS ANOTHER PAGE IN WHICH RS. 7.41 CRORES WAS WRITTEN AS LAND COST. TH E ASSESSEE WAS ASKED TO EXPLAIN BOTH PAGES OF ANN A 40. THE ASSESSEE STATED THAT BO TH PAGES ARE TO BE READ TOGETHER IN SO FAR THAT RS. 7.41 CRORES IS 20% OF RS. 37.06 CRORES AND THAT IT WAS AN ESTIMATE OF JOINT VENTURE. THE AO AFTER CONSIDERING THE EXPL ANATION OF THE APPELLANT AND GOING THROUGH THE DOCUMENTS, FOUND THIS CONTENTION TO BE CORRECT AS MENTIONED IN PARA 8 OF THE ASSESSMENT ORDER. 7. EARLIER ON 30/11/2010, IN THE CASE OF ASSESSMENT PROCEEDINGS OF M/S RISING BUILDESTATE PVT. LTD. (SISTER CONCERN OF ASSESSEE), ANOTHER COMPANY OF THE LASHKARY GROUP, IT WAS ASKED TO EXPLAIN WHY ADDITION SHOULD NOT BE MADE FOR UNEXPLAINED INVESTMENT IN THE LAND COST AMOUNTING TO RS.4,55,88 ,400/- - RS . 1,50,91,463/- IN LIGHT OF THE PAGES 159 OF ANN. A-24, WHEREIN RS. 4, 55,88,400/- WAS MENTIONED. PAGE NO. 37 OF ANN A 57 WHERE AGAINST ITS PROPERTY AT JAGATPURA, 400 IS WRITTEN IN CODE WAS ALSO JUST REFERRED. IMMEDIATELY AFTER BEIN G SERVED THE NOTICE, THE ASSESSEE FILED AN AFFIDAVIT DATED 06/01/2010 STATING THAT TH E CONTENTS OF COLUMN 1 OF PAGE 37 OF ANN A 57 WAS THE SHARE IN JOINT VENTURE, COLUMN 2 REPRESENTS PROPERTY NAME, COLUMN 3 REPRESENTS ESTIMATED EXPENSES FURTHER TO B E INCURRED AND COLUMN 4 REPRESENTS THE MARKET VALUE OF THE LAND. THE ASSESS EE STATED THAT THE CONTENTS OF COLUMN 4 WERE INDEED WRITTEN IN CODE BY OMITTING FI VE ZEROES. 6 8. THE AO MENTIONED THAT THE MARKET VALUE OF THE LA ND IS RS 37.06 CRORES AND NOT 3.3 CRORES AS STATED BY THE ASSESSEE IN HIS AFF IDAVIT. EVEN THE ARGUMENT OF THE ASSESSEE THAT MUCH TIME HAD ELAPSED SINCE PURCHASE AND THE LAND IN HIS HANDS WAS AGRICULTURAL AND HAD LATER ON BEEN APPROVED FOR GRO UP HOUSING IS MERE EYEWASH. THE COMPANY IN ITSELF WAS INCORPORATED IN 2005. THE ASS ESSEE ENTERED INTO SALE AGREEMENTS ONLY IN LATE 2006 AND THE REGISTRATION W AS COMPLETED IN MAY 2007. THE TIME LAPSE HERE IS ONLY A COUPLE OF MONTHS AT BEST. IT IS COMMON KNOWLEDGE THAT YEARS 2006, 2007 AND 2008 WERE EXCEPTIONALLY GOOD F OR LAND PRICES. THE EMAIL THROUGH WHICH HE HAS COMMUNICATED FOR JOINT VENTURE , THE NEWSPAPER ADVERTISEMENTS ARE ALL IN THE SAME YEAR OF 2007 AND IT JUST CANNOT BE AGREED THAT IN THE SAME YEAR, THERE COULD BE PRICE VARIATION OF 3. 3 CRORES AND 37 CRORES. THE AO MENTIONED THAT THE ASSESSEE HAS TIME AND AGAIN STRE SSED THAT THE JV PAPERS WERE NOT PREPARED BY HIM BUT BY CHHABRA & CO. HOWEVER THE AS SESSEE HAS NOT PROVED THIS SUFFICIENTLY. A MERE STATEMENT DOES NOT REBUT THE P RESUMPTION OF S. 132 (4A) AND AS HAS BEEN SEEN, THE ASSESSEE IS QUITE CAPABLE OF CHA NGING HIS STATEMENTS TO SUIT HIS CONVENIENCE. THE AO MENTIONED THAT THUS PIECING TOG ETHER THESE IMPORTANT PAPERS SEIZED DURING SEARCH AND THE CONTRADICTORY EXPLANAT ION OF THE ASSESSEE AT VARIOUS INSTANCES, ONE CAN SAFELY ARRIVE AT THE CONCLUSION THAT THE CODING THAT THE ASSESSEE HAD WRITTEN AS 330 IN PAGE 37 OF EXHIBIT 57 IS INDE ED 3.3 CRORES. BUT AS STATED BY HIM IT IS NOT THE MARKET VALUE BUT THE ACTUAL EXPEN SES OF THE LAND WHICH HE HAS INCURRED BECAUSE THE MARKET VALUE AS HE HIMSELF HAS MADE IS RS 37 CRORES. THE AO MENTIONED THAT THE ABOVE SAID SEIZED PAPER 37 OF E XHIBIT 57 IS NOT DUMB PAPER AS THE ASSESSEE HAS TRIED TO IMPRESS BECAUSE THE SCRIB BLING IN THE SEIZED PAPERS ARE 7 CORROBORATED WITH THE BOOKS MAINTAINED BY THE ASSES SEE. THE SCRIBBLING AT ANN A 37 ARE ON THE LAND BANKS OWNED BY THE ASSESSEE. THE DO CUMENT OF EMAIL AMPLY PROVES THAT THE MARKET RATE OF THIS PROPERTY IS RS 6000 PE R SQ YARD AND FOR 62000 SQ YARDS; IT WORKS OUT TO RS 37 CRORES. THE AO MENTIONED THAT THE ASSESSEE HAS BEEN GIVEN AMPLE OPPORTUNITIES TO EXPLAIN THE POSITION. BUT HE HAS CHOSEN TO SAY DIFFERENT AT DIFFERENT POINTS OF TIME. THE ASSESSEE HAS NOT SPO KEN THE TRUTH IN 2008 DURING SEARCH PROCEEDINGS NOR HAS HE SAID THE TRUTH IN THE AFFIDAVIT, WHOSE CONTENTS ARE FASCINATING TO SAY THE LEAST. IF INDEED COLUMN 1 WA S THE SHARE IN JV, THEN IN BOTH PAPERS OF BHAVGARH BANDA AND RISING (ANN A 24), THE REVENUE SHARING IS ON 65- 35% WITH AN UPFRONT PAYMENT OF 20% OF LAND VALUE TO OWNER. IT IS NEITHER 26.66 NOR 22.5 PERCENTAGE AND NOT ROUND FIGURES ESPECIALLY IN THE HANDS OF A COMPANY. THE AO HELD THAT THE ASSESSEE HAS MENTIONED TOTAL COST OF THE LAND AS ON 31.03.2007 BY OMITTING FIVE ZERO IN THE COLUMN 4 OF THE SEIZED PA PER PAGE 37 OF EXHIBIT 57 AND THUS THE TOTAL COST OF THE LAND IN THE HANDS OF THE COMPANY IS RS. 3.3 CRORES AS OPPOSED TO RS. 1,29,80,508/- GIVEN IN THE BALANCE S HEET AS ON 31.03.2007 AND THE DIFFERENCE OF RS. 2,00,19,492/- WAS ADDED AS UNDISC LOSED INVESTMENT IN THE LAND U/S 69B OF INCOME TAX ACT. THE AO RELIED THE DECISION O F MAHAVIR WOLLEN MILLS VS CIT (DEL) 245 ITR 297 (2000). 9. ASSESSEE PREFERRED APPEAL BEFORE LD. CIT (A). D ETAILED SUBMISSIONS WERE FILED BEFORE LD. CIT (A). THE DETAILED WRITTEN SUBMISSIO NS FILED ON BEHALF OF THE ASSESSEE HAS BEEN TABULATED IN THE ORDER OF LD. CIT (A) AT PAGES 6 TO 32 ARE AS UNDER :- IT IS HUMBLY SUBMITTED THAT THE IMPUGNED ASSESSM ENT ORDER SUFFERS FROM FATAL ILLEGALITIES OF LAW AND FACTS, IS PERVER SE BECAUSE OF CONSIDERATION OF IRRELEVANT FACTS/WRONG FACTS WHILE IGNORING THE RELEVANT FACTS AND THE AO 8 HAS COME TO A CONCLUSION WHICH NO JUDICIAL PERSON D ULY INSTRUCTED IN THE DISCIPLINE OF LAW AND ACCOUNTS WOULD COME TO. ON BE HALF OF OUR ABOVE CAPTIONED CLIENT WE SUBMIT AS UNDER FOR THE GROUND NO 1 AND 2 . 2.1 THE ASSESSMENT IS BASED ON WRONG FACTS, THEREFO RE, DESERVES TO BE ANNULLED. IN ASSESSMENT ORDER AT SEVERAL PLACES, THE LD AO ME NTIONED WRONG/INCORRECT FACTS. THEREFORE, THE CONCLUSION OF THE LD AO IS BA SED CONSIDERING THE WRONG/INCORRECT FACTS. THEREFORE THE WHOLE ASSESSME NT ORDER DESERVES TO BE ANNULLED. THE WRONG FACTS MENTIONED IN THE ASSESSM ENT ORDER MAY BE SEEN FROM THE FOLLOWING:- PAGE NO OF ASSESSMENT ORDER FACTS MENTIONED IN ASSESSMENT ORDER CORRECT FACTS 3 95 MENTIONED IN COLUMN 1 OF TABLE AGAINST VATSALYA. (THE AO REPRODUCED THE COPY OF SEIZED PAGE 37 OF ANNEXURE A-57) ACTUALLY IT IS 45. THE COPY OF SEIZED PAGE IS AT PB PAGE 36. 4 OMITTED BY WRITING THREE ZEROS- INDICATES PURCHASE RATE/MARKET RATE. THE ASSESSEE STATED IN SEARCH STATEMENT THAT MARKET RATE OF THE LAND IS MENTIONED IN THE COLUMN BEFORE THE NAME OF THE LAND. (THE LD AO INSERTED THE WORDS PURCHASE RATE AT HER OWN WITHOUT APPRECIATING THE SEARCH STATEMENT IN THIS REGARD). 2.2 IN PARA 3 OF THE ASSESSMENT ORDER THE LD. AO MENTIO NED THAT SHRI PAWAN LASHKARY THE KEY PERSON OF THE GROUP HAS SCRI BBLED NAMES OF THE PROPERTIES OWNED BY THE COMPANIES IN LASHKARY GROUP . WHEREAS THE FACT IS THAT THE LASHKARY GROUP OWNED ABOUT 40 PROPERTIES I N THE GROUP (LIST PB PAGE 442 TO 451) WHEREAS NAMES OF ONLY NINE PROPERTIES WERE LISTED I N THE IMPUGNED SEIZED ANNEXURE PAGE 37 OF ANNEXURE A-57. THIS SHOWS THAT THIS PAPER WAS NOT PREPARED TO JOTTING DOWN THE COST OF THE PROPERTIES. IF IT WAS SO, THAN ALL THE PROPERTIES UNDER THE GROUP WOULD H AVE BEEN LISTED - NOT FEW 9 OF THEM. SHRI PAWAN LASHKARY LISTED ONLY NINE PROPE RTIES OUT OF TOTAL 40 PROPERTIES. THIS SHOWS THE INTENTION OF SHRI PAWAN LASHKARY WAS NOT TO JOTTING DOWN THE COST OF THE PROPERTIES BUT THIS PA PER WAS WRITTEN FOR SOME ANOTHER REASON. IN FACT THE NINE PROPERTIES WERE TH OSE PROPERTIES FOR WHICH THE ASSESSEE GROUP WAS GOING FOR JOINT VENTURE AND IN COLUMN 1 THE SHARE OF THE LAND OWNER IN BUILT-UP AREA WAS MENTIONED, IN C OLUMN 2 DESCRIPTION OF THE PROPERTY WAS MENTIONED, IN COLUMN 3 ESTIMATED A MOUNT FURTHER REQUIRED TO BE INCURRED IN JDA/ POSSESSION AND DEMARCATION E TC WAS ESTIMATED AND IN COLUMN 4 THE AMOUNT WHICH WAS PROPOSED TO BE GIVEN TO THE LAND OWNER AGAINST THE LAND IN JOINT VENTURE (OR SAY UPFRONT P RICE) WAS MENTIONED. 2.3 DURING THE COURSE OF POST SEARCH INQUIRY, THE S TATEMENT OF SHRI PAWAN LASHKARY WAS RECORDED BY THE DDIT(INV) -III O N THE IMPUGNED SEIZED PAPER (WHICH THE LD AO HAS REPRODUCED AT ASS ESSMENT ORDER PAGE 3). SHRI PAWAN LASHKARY COULD NOT CORRECTLY EXPLAIN THE CONTENTS OF THE SEIZED PAPER AT THE TIME OF SEARCH. SHRI PAWAN LASHKARY MA DE THE STATEMENT EX- TEMPORE AND COMPLETELY CONFUSED OVER THIS SEIZED PA PER. THE TOTAL UNDER COLUMN 4 IS 18.30 AND THE TOTAL LAND HOLDING AGAINS T THE PROPERTIES DESCRIBED IN COLUMN 2 IS ABOUT 173 BIGHA; THIS IS THE REASON WHY SHRI PAWAN LASHKARY CONFUSED AND STATED BEFORE THE DDIT THAT THE TOTAL AREA OF THE LAND IS MENTIONED IN COLUMN 4. SHRI PAWAN LASHKARY COULD GE T THE PHOTOCOPY OF THE SEARCH STATEMENT ON 4-1-2010 AND AFTER GOING THROUG H THE STATEMENT, HE REALIZED HIS MISTAKE AND MADE HIS SWORN STATEMENT I N AFFIDAVIT DATED 6-1- 2010 (PB PAGE 60-62), WHICH WAS FILED BEFORE THE AO ON 02.12.2010. THE RELEVANT PARA IN THE AFFIDAVIT AS REGARD THE ABOVE SAID SEARCH STATEMENT IS AS UNDER: - DURING THE POST SEARCH INQUIRY, THE DDIT (INV.)-II I, JAIPUR RECORDED MY STATEMENT ON 17.11.2008. THE DDIT (INV) -III JAIPUR SHOWED ME A SEIZED PAPER MARKED AS PAGE NO 37 OF EX HIBIT A-57 SEIZED FROM 73-74 TALKATORA, JAIPUR AND ASKED ME IN QUESTION NUMBER 10 TO CLARIFY THE SAID SIZED PAGE. AT THAT T IME, I COULD NOT RECOLLECT ALL THE FACTUAL POSITION IN CONNECTION WI TH THE SAID SEIZED PAPER AND CONFUSED OVER THE CONTENTS OF THE SAID SE IZED PAPER AS THE CONTENTS OF THE SAID SEIZED PAPER WAS NOT SPEAKING AND AT THAT TIME I 10 DID NOT HAVE PHOTOCOPY OF ALL THE SEIZED MATERIAL. DUE TO THESE REASONS, I COULD NOT MAKE THE CORRECT STATEMENT IN ANSWER TO QUESTION NO 10 OVER THE SAID SEIZED PAPER. THE LD. AO HERSELF HAS CONCLUDED THAT ANSWER GIVEN BY THE ASSESSEE IN QUESTION NO 10 OF THE STATEMENT OF SHRI PAWAN LASHK ARY BEFORE THE DDIT ON 17.11.2008 IS NOT RELIABLE AND SHE HAS REJECTED THIS STATEMENT IN TOTO. THEREFORE, NO INFERENCE SHOULD BE DRAWN ON THE BASI S OF REJECTED STATEMENT. 2.4 IN PARA 6 OF THE ASSESSMENT ORDER THE LD. AO ME NTIONED THAT THE MARKET VALUE OF THESE LANDS AS PER THE DOCUMENTS SE IZED FROM THE ASSESSEE AT ANNEXURE A-24 IS RS. 13000/- PER SQ YARD. IN THIS REGARD AT THE OUTSET WE OBJECT THE OBSERVATION OF THE LD AO THAT THIS DOCUM ENT WAS SEIZED FROM ASSESSEE. FACTUALLY, THIS PAPER WAS NOT SEIZED FROM THE POSSESSION OF THE ASSESSEE COMPANY. THE REGISTERED ADDRESS OF THE ASS ESSEE COMPANY IS B-304, JANTA COLONY, JAIPUR WHEREAS THESE PAPERS (ANNEXURE A-24 & A-57) WERE SEIZED FROM 73-74, TALKATORA, JAIPUR WHICH IS PREMI SES OF M/S PAWAN ENTERPRISES. SECONDLY THIS PAPER DOES NOT SHOW THE MARKET VALUE OF THE PROPERTY BUT IT WAS AN ASKING PRICE FROM A PARTICULAR PROSPECTIVE P ERSON WHO OFFERED FOR JOINT VENTURE. THE PERSON WAS TOTALLY UNKNOWN TO TH E ASSESSEE. FURTHER THE PERSON WAS FROM OUTSIDE JAIPUR AND HIS PAST HISTORY , CREDITWORTHINESS, PAST EXPERIENCE; GOODWILL ETC. WERE NOT KNOWN TO THE ASS ESSEE. DUE TO THESE FACTORS THE ASSESSEE QUOTED RS. 6000/- PER SY FOR I TS LAND AT BHAVHARH, WHICH WAS FAR ABOVE FROM THE REAL MARKET PRICE. IT IS RELEVANT TO MENTION HERE THAT IN JOINT VENTURE PROJECTS, THE POSSESSION OF THE LAND IS IMMEDIATELY HANDED OVER TO THE BUILDER/DEVELOPER ON FINALIZATIO N OF JOINT VENTURE AGREEMENT. FURTHER MORE THE LAND OWNER HAS TO EXECU TE THE POWER OF ATTORNEY IN FAVOUR OF THE BUILDER FOR CONSTRUCTION OF BUILDING AS WELL AS SELLING OF THE FLATS/BUILT-UP AREA. FURTHER MORE, M ANY DOCUMENTS ARE REQUIRED TO BE SIGNED FOR THE PURPOSE OF LOAN FROM BANK/FINA NCIAL INSTITUTIONS TO BE TAKEN BY THE BUILDER. AS AGAINST ALL THIS, THE LAND OWNER DOES NOT GET THE FULL 11 MARKET VALUE OF THE LAND AT THE TIME OF SIGNING OF THE JOINT VENTURE AGREEMENT BUT GETS SOME PART AMOUNT OF THE MARKET V ALUE OF THE LAND WHICH IS COMMONLY KNOWN AS UP-FRONT PRICE AND MAJOR PART AGAINST THE SALE CONSIDERATION OF THE LAND IS RECEIVED IN THE FORM O F BUILT-UP AREA IN THE CONSTRUCTED BUILDING. IN A CASE WHERE THE BUILDER/D EVELOPER DOES NOT COMPLETE THE CONSTRUCTION WITHIN TIME FOR ONE OR AN OTHER REASONS, THE MAJOR STAKE OF THE LAND OWNER MAY RUIN. FURTHER THE RE-PO SSESSION OF THE LAND FROM THE BUILDER IS MATTER OF LONG LITIGATION IN COURTS. IN SUCH SITUATION THE LAND OWNER NEITHER GETS HIS CONSIDERATION OF THE LAND FR OM THE BUILDER NOR DID HE CAN SALE THE LAND TO ANOTHER PERSON. DUE TO ALL THE SE RISK FACTORS, NO LAND OWNER WANTS TO FASTEN HIS HANDS WITH UN-KNOWN BUILD ER OR DEVELOPER. DUE TO THIS REASON THE ASSESSEE QUOTED A VERY HIGH PRICE F AR ABOVE TO THE MARKET PRICE TO THE UNKNOWN BUILDER WHO APPROACHED THE DIR ECTOR OF THE ASSESSEE COMPANY THROUGH A BROKER MR. SHARMA BY SEEING ADVER TISEMENT IN NEWS PAPER. THE LD. AO FURTHER MENTIONED IN THE SAID PARA THAT AS FOR COLUMN THREE, THERE ARE NOT ANY EXPENSES IN SUCH LAND ACCOUNT ON JAMABA NDI/CONVERSION EITHER BEFORE OR AFTER PURCHASES. THE LD. AO MENTIONED THI S WITHOUT GOING INTO THE DETAILS FURNISHED BEFORE HER. THE ASSESSEE HAS INCU RRED SUBSTANTIAL AMOUNT ON JAMABANDI/CONVERSION ETC. AFTER THE PURCHASES OF LAND, THIS MAY BE SEEN FROM FOLLOWING CHART: - FOR LAND BELONGING TO ASSESSEE COMPANY (KNOWN AS B HAVGARH BANDHA):- PARTICULARS AMOUNT PURCHASE OF LAND ON 18.11.2006 1,25,00,000.00 REGISTRATION EXPENSES-STAMP DUTY (ON POWER OF ATTORNEY/SALE DEED AND REGISTRATION OF JDA PATTA) AY 2007-2008, AY 2008-2009 AND AY 2009-2010 34,78,590.00 DEPOSITED IN JDA AGAINST CONVERSION ETC AY 2008-2009 AND AY 2009-2010 1,28,89,926.00 CONSTRUCTION FOR DEMARCATION ETC AY 2008-2009 84321.00 12 THUS, THE LAND COST WAS ONLY 125.00 LACS WHEREON TH E EXPENSES FOR JDA CHARGES WERE RS. 128.90 LACS. THE QUESTION FOR MATC HING THE FIGURE IN COLUMN 3 DOES NOT ARISE BECAUSE THIS REPRESENTS AN ESTIMATED FIGURE OF EXPENSES TO BE INCURRED. 2.5 THE LD. AO FAILED TO APPRECIATE THE FIGURES MEN TIONED ON SEIZED ANNEXURE A-24 PAGE 159 AND 161 (COPY AT PB PAGE 32 TO 34) AND ANNEXURE A-40 PAGE 73-76 (COPY AT PB PAGE 27-31). LD. AO WRONGLY INTERPRETED/CONCLUDED THAT MARKET VALUE OF THE LAND AT BHAVGARH RS. 37,06,98,000. THE ASSESSEE ADVERTISED IN NEWS PAPER FOR SALE OF THE LAND (PB PAGE 37). IN RESPONSE TO THIS ADVERTISEMENT, SE VERAL PERSONS APPROACHED TO THE ASSESSEE BY EMAIL OR ON PHONE. THE COPY OF S OME OF THE EMAILS IS AT PB PAGE 39 TO 44. ONE OF THE EMAILS WAS FROM G.K. SHARMA. THE ASSESSEE QUOTED HIM THE MARKET RATE OF RS. 6000/- PER SQ FOR OUTRIGHT SALE (THE VALUE COMES TO RS. 37.06 CRORES FOR THE LAND OF THE ASSES SEE). THE ASSESSEE QUOTED A VERY HIGH RATE FAR ABOVE FROM THE MARKET RATE FOR THE REASONS EXPLAINED ABOVE IN PARA 2.4 ABOVE. THIS PERSPECTIVE BUYER APP ROACHED TO THE ASSESSEE FOR ALTERNATIVE PROPOSAL OF JOINT VENTURE AND PROPO SAL WAS PREPARED ON THE BASIS OF PAYMENT OF RS. 7,41,39,600/- TO THE ASSES SEE AGAINST THE LAND + 35% SHARE IN BUILT-UP AREA. HE PREPARED THE CASH FL OW STATEMENT TO ASCERTAIN VIABILITY AND PROFITABILITY OF THE PROJECT. THE COP Y OF CASH FLOW STATEMENT IS AT PB PAGE 30. IN THIS CASH FLOW STATEMENT OUT GOIN GS AGAINST THE LAND COST IS SHOWN AT RS. 7,41,39,600/- THE DETAILS/FIGURES AVAI LABLE ON THE SEIZED DOCUMENT SHOWS THAT THE ASSESSEE WILL GET RS. 7,41, 39,600/-AGAINST THE LAND + 35% SHARE IN THE BUILT UP AREA IF THE JOINT VENTU RE IS FINALIZED. THESE PAPERS SHOW NO WHERE THAT THE ASSESSEE WOULD GET RS . 37.06 CRORES AGAINST THE LAND IN THE PROPOSED JOINT VENTURE PROJECT. HO WEVER, THIS PROPOSAL COULD NOT BE MATERIALIZED BECAUSE THE BUILDER DID NOT FIN D IT VIABLE/SUITABLE CONSIDERING THE DEMAND OF THE ASSESSEE OF RS. 7.41 CRORE AGAINST THE LAND +35% SHARE IN BUILT-UP AREA. THE PROPOSAL WAS NOT M ATERIALIZED THIS IS 13 SUFFICIENT TO SHOW THAT ALL THE PROJECTIONS WERE ON LY PAPER PROJECTIONS NOT BASED ON REAL MARKET RATES AND TERMS. 2.6 THE SEIZED DOCUMENTS ANNEXURE A-57 PAGE 37, ANNEXUR E A- 24 PAGE 159 AND 161 (COPY AT PB PAGE 32 TO 34) AND ANNEXURE A-40 PAGE 73-76 (COPY AT PB PAGE 27-31) WERE NOT PREPARED BY THE ASSESSEE OR ITS DIRECTOR OR EMPLOYEE. THIS CAN BE ESTABLISHED MEREL Y BY CAREFULLY SEEING THESE PAPERS. THE PROJECTIONS WERE PREPARED CONSIDE RING THE OUTGOING OF RS. 7.41 CRORES AGAINST THE LAND AND SALE PROCEEDS WERE ESTIMATED CONSIDERING THE BUILDERS SHARE OF 65% IN THE BUILT-UP AREA. TH EREFORE, THERE WAS SUFFICIENT MATERIAL BEFORE THE LD AO TO ASCERTAIN B EYOND DOUBTS THAT THE SEIZED PAPERS ANNEXURE A-24 PAGE 159 AND 161 (COPY AT PB PAGE 32 TO 34) AND ANNEXURE A-40 PAGE 73-76 (COPY AT PB PAGE 27-31 ) WERE NOT PREPARED BY THE ASSESSEE BUT BY THE BUILDER. 2.7 THE SEIZED PAPER PAGE 37 OF ANNEXURE A-57 AND ANNEX URE A-40 PAGE 73-76 ARE INDEPENDENT AND PREPARED AT DIFFEREN T POINT OF THE TIME AND FOR THE DIFFERENT PROPOSAL FROM DIFFERENT BUILDER. THERE IS NO NEXUS IN BETWEEN THE PAPERS SEIZED IN THESE TWO ANNEXURE. THE PAPERS IN ANNEXURE A-40/A-24 RELATE TO PROJECTIONS PREPARED BY THE REP RESENTATIVE OF CHHABRA AND THE PROPOSAL WAS FOR ONLY TWO PROJECTS I.E. BH AVGARGH AND PUSHP GARDEN . WHEREAS THE SEIZED PAPER 37 OF ANNEXURE A -57 WAS PREPARED AT DIFFERENT POINT OF TIME FOR DIFFERENT BUILDER AND I T WAS A COMPOSITE PROPOSAL FOR 9 PROJECTS. 2.8 THE ADDITION IS NOT BASED ON MATERIAL, BUT SURM ISES, CONJECTURES PRESUMPTIONS AND ASSUMPTIONS PURELY ON THE BASIS OF DEAF AND DUMB DOCUMENTS. A) THE LD AO WRONGLY CONCLUDED THAT THE COLUMN 4 OF TH E SEIZED ANNEXURE A-57 PAGE 37 REPRESENTS TO COST OF LAND. C OPY OF SAID PAGE IS PB PAGE 36. THE ENTIRE FINDING IS BASED ON PRESUMPTION, ASSUMPT ION, PROBABILITIES AND POSSIBILITIES. NO ANY POSITIVE MA TERIAL WAS BROUGHT ON RECORD TO SHOW THAT COLUMN 4 OF THE SEIZED PAPER RE PRESENTS THE COST OF LAND. 14 FIGURES MENTIONED ON THE SEIZED PAPER HAVE NO NEXUS WITH THE ENTRIES IN THE BOOKS OF ACCOUNTS OR DOCUMENTS SEIZED BY THE DEPART MENT. THE SEIZED PAPER IS NOT A SPEAKING DOCUMENT. NO DATE IS MENTIONED. N OTHING HAS BEEN MENTIONED TO VISUALIZE WHETHER IT IS COST OR SALE O R ASKING PRICE. ONE MAY INTERPRET THE FIGURES OF THIS COLUMN AS HE WISH. ON E CAN ALSO SAY AT ANOTHER EXTREME THAT THIS COLUMN SHOWS THE UNACCOUNTED PAYM ENTS AGAINST THE LAND MADE BY THE ASSESSEE AS AGAINST THE COST PRESUMED B Y THE AO AND ADDITION FOR THE ENTIRE AMOUNT MENTIONED IN THIS COLUMN BY A DDING 5 ZEROS COULD BE MADE ON THE BASIS OF SUCH PRESUMPTION. THE ENTRIES IN THE RELEVANT SEIZED DOCUMENT WERE WITHOUT ANY NARRATION AND THE SAME BE ING UN-DATED AND UNSIGNED; IT WAS A DUMB DOCUMENT INCAPABLE OF LEADING TO ANY INTERPRETATION. THE SAID DOCUMENT IS NOT SUFFICIENT TO DRAW ANY ADVERSE INFERENCE AGAINST THE ASSESSEE AND THERE BEING NO P ROOF TO SHOW THAT THE AMOUNT OF RS. 2,00,19,492/- WAS ACTUALLY PAID BY TH E ASSESSEE COMPANY, IN ADDITION TO WHAT HAS BEEN DISCLOSED IN THE REGULAR BOOKS OF ACCOUNT AND THE ADDITION OF THE SAID AMOUNT MADE BY THE AO UNDER S. 69B WAS NOT JUSTIFIED. B) THE LEARNED AO PRESUMED THAT THIS SLIP (PAGE 37 OF ANNEXURE A-57) WAS PREPARED ON OR BEFORE 31.03.2007. ON THE BASIS OF THIS PRESUMPTION SHE TOOK THE SO CALLED ACTUAL COST OF THE LAND AT 3.30 CRORES AS ON 31.03.2007 AND DEDUCTED THE AMOUNT APPEARING IN THE BALANCE SHEET AGAINST THE COST OF THE SAID LAND AS ON 31.03.2007 TO ARRIVE THE FIGURE OF ADDITION U/S 69B OF THE ACT. ( THE COST APPEARING IN THE BALANCE SHEET AFTE R 31.03.2007 WAS NOT ALLOWED TO BE REDUCED). THERE IS NO BASIS OF SUCH P RESUMPTION. 2.9 THE ASSESSMENT WAS GOING TO BE TIME BARRED ON 3 1.12.2010. UP TO 11.12.2010 THE AO WAS OF THE OPINION THAT THE ACTU AL COST OF THE LAND IS REPRESENTED BY THE SEIZED CASH FLOW STATEMENT AND T HIS MAY BE SEEN FOR THE COST OF LAND RS. 4.55 CRORE ASSUMED BY THE AO FOR PUSHP GARDEN. (DETAIL SUBMISSION MADE IN THE CASE OF RISING BUILDESTATES PVT LTD APPEAL NO. 403/10-11). SHOW CAUSE NOTICE DATED 03.12.2010 IS A T PB PAGE 62 WHEREIN IT HAS BEEN MENTIONED THAT WHY THE LAND COST OF THE SC HEME BHAVGARH SHOULD 15 NOT BE TAKEN AT RS. 3,30,000/-. THE ASSESSEE FILED DETAILED EXPLANATION VIDE LETTER DATED 7.12.2010 COPY AT PB PAGE 64 TO 68. THE EXPLANATION OF THE ASSESSEE WAS AS UNDER: - REPLY TO YOUR SHOW CAUSE NOTICE DATED 03.12.2010 FOR PROPOSED ADDITION OF RS. 79,94,940/- ON ACCOUNT OF UNDISCLOS ED EXPENDITURE IN LAND THE POINT TO POINT REPLY OF YOUR NOTICE IS AS UNDE R: - A) REGARDING PAGE 37 OF EXHIBIT 57 SEIZED FROM 73 -75, TALKATORA, JAIPUR SHRI PAWAN LASHKARY HAS FILED AFFIDAVIT EXPL AINING THE CONTENTS OF THE SAID SEIZED PAPER. THE PHOTOCOPY OF THE SAID AFFIDAVIT IS ENCLOSED HEREWITH FOR YOUR READY REFERENCE. SHRI PAWAN LASHKARY HAS EXPLAINED THIS SEIZED PAPER AS UNDER:- THE EXPLANATION OF ENTRIES NOTED ON THIS PAGE IS T HAT WE DID NOT HAVE SUFFICIENT FUNDS, SKILLS AND EXPERIENCE TO DEVELOP GROUP HOUSING SCHEME/PROJECTS INDEPENDENTLY. SO, WE ADVER TISED IN NEWS PAPER FOR SALE OF LAND APPROVED/UNDER APPROVAL FOR GROUP HOUSING/PROJECTS. THE ADVERTISEMENT CUTTING OF THE NEWS PAPER IS ALSO UNDER SEIZURE VIDE PAGE 102 TO 106 OF EXHIBIT A-24 SEIZED FROM 73- 75 TALKATORA, JAIPUR. ALTERNATIVELY, WE WERE THINKI NG TO DEVELOP SCHEMES/GROUP HOUSING PROJECTS ON VARIOUS LANDS OF OUR GROUP ON JOINT VENTURE/ COLLABORATION AGREEMENT/PARTNERSHIP BASIS. WE WERE APPROACHED BY SEVERAL PARTIES FOR JOINT VENTURE AGR EEMENT. THE PRINT OUTS OF SEVERAL EMAILS ARE UNDER SEIZURE VIDE SAID EXHIBIT A-24. DURING THE COURSE OF THE DISCUSSION IN RESPECT OF J OINT VENTURE/COLLABORATION AGREEMENT/PARTNERSHIP WITH ON E OF THE PROSPECTIVE PARTY, I PREPARED THIS PAPER FOR NEGOTI ATION WITH THE PARTY. THE CONTENTS OF THIS SEIZED PAGE 37 OF EXHIB IT A-57 ARE EXPLAINED AS UNDER:- A) THE OFFER AGAINST OUR SHARE IN PROFIT/LOSS OF JOINT VENTURE WAS MENTIONED IN COLUMN 1 OF THE SAID SEIZED PAPER. FOR EXAMPLE WE OFFERED OUR SHARE OF 26.66% IN PROFIT OR LOSS; IF JOINT VEN TURE IN RESPECT OF LAND AT BHAVGARH BANDHA IS FINALIZED. B) THE PARTICULARS OF THE LAND PROPOSED FOR JOINT VENTURE/COLLABORATION ARE MENTIONED IN COLUMN 2 OF THE SAID SEIZED PAPER. C) AT THE TIME OF SAID NEGOTIATION FOR THE JOINT VENTURE/COLLABORATION, THERE WAS SEVERAL PENDING WO RK, IN RESPECT OF CONVERSION/APPROVAL OF PROJECT AND POSSE SSION OF LAND. THE ESTIMATED EXPENSES TO BE INCURRED FURTHER FOR C ONVERSION, 16 APPROVAL AND POSSESSION OF THE LAND FOR SCHEME/HOUS ING PROJECTS WAS MENTIONED IN COLUMN NO. 3 OF THE SAID SEIZED PA PER. THE FIGURE IS WRITTEN IN SHORT AT THE TIME OF NEGOTIATI ON BY OMITTING FIVE ZERO. FOR EXAMPLE 666 INDICATES THAT THE ESTIM ATED AMOUNT FURTHER REQUIRED TO BE INCURRED WAS 6,66,00,000/- D) WE PURCHASED THE AGRICULTURAL LAND AND MADE FURTHER EXERCISED FOR 90B PROCEEDINGS, CONVERSION AND APPROVAL OF THE PROJECTS. THIS AND TIME-SPAN RESULTED SUBSTANTIAL INCREASE IN THE MARKET RATE OF THE LAND. WE ESTIMATED THE MARKET RATE OF EACH DEVELOPED LAND (OFFERED FOR NEGOTIATION FOR JOINT VENTURE/ CO LLABORATION) AT THE TIME OF NEGOTIATION AND SUCH ESTIMATED MARKET V ALUE OF THE LAND WAS MENTIONED IN COLUMN NO 4 OF THE SAID SEIZE D PAPER. WE OFFERED THE PROSPECTIVE PARTY THAT OUR CAPITAL ACCO UNT SHOULD BE CREDITED BY THIS AMOUNT AGAINST THE CAPITAL CONTRIB UTION OF LAND FOR THE JOINT VENTURE/COLLABORATION, IF THE JOINT VENTURE/COLLABORATION IS MATERIALIZED. THE FIGURE IS WRITTEN IN SHORT AT THE TIME OF NEGOTIATION BY OMITTING FIVE Z ERO. 4. ALL THE NOTING IN COLUMN 1, 3 AND 4 OF THE SAID SEIZED PAPERS ARE JUST ROUGH ESTIMATES NOTED DURING THE COURSE OF DISCUSSI ON/NEGOTIATION WITH THE PROSPECTIVE PARTY FOR JOINT VENTURE/ COLLABORATION AGREEMENT. THE JOINT VENTURE/ COLLABORATION/ PARTNERSHIP AGREEMENT WAS N OT MATERIALIZED TILL THE DATE IN RESPECT OF THE LANDS MENTIONED AT COLUM N NO 2 OF THE SAID SEIZED PAGE. 2.10 THE LD. AO AGAIN ISSUED SHOW CAUSE NOTICE ON ORDER SHEET (COPY AT PB PAGE 69A) TREATING THE ACTUAL COST OF LAND AT RS. 4,55,88,40 0/- ON THE BASIS OF PAGE 159 OF ANNEXURE A-24 (FOR PUSH P GARDEN) IN RESPECT OF M/S RISING BUILDESTATE. ON SIMILAR BASIS, FIGURE OF 7,41,39,600/- WAS REFERRED ON THE BASIS OF SEIZED ANNEXURE A-40 PAGE 74 IN THE SAME SHOW CAUSE NOTICE IN RESPECT OF M/S COUNTRYWIDE BUILDEST ATE PVT. LTD (INFACT THE A.O. HAS MENTIONED COMMON CONTENTS/ CONTENTS OF BOTH THE CASES IN THE ORDER SHEET FOR BOTH THE CASES.) THE ASSESSEE FURT HER FILED DETAILED REPLY VIDE LETTER DATED 11.12.2010 COPY AT PB PAGE 70 TO 71 . THE EXPLANATION OF THE ASSESSEE WAS AS UNDER: - REPLY TO YOUR SHOW CAUSE QUERY IN ORDER SHEET FOR PROPOSED ADDITION OF RS. 3,22,64,977/- ON ACCOUNT OF UNEXPLA INED EXPENDITURE IN THE LAND 17 A) FIRST OF ALL THIS IS TO SUBMIT THAT THE FIGURES GIVEN FOR PROPOSED ADDITION ARE IN RESPECT OF M/S RISING BUILDESTATES PVT LTD AND NOT IN THE CASE OF THE ASSESSEE AND IN THE CASE OF THE ASS ESSEE THESE FIGURES ARE DIFFERENT. B) IN THE SHOW CAUSE QUERY YOUR HONOUR IS ALSO ADMI TTING THAT THE PAGE NO. 76 OF ANNEXURE A-40 IS ESTIMATION OF JOINT VENT URE AND THE RATE OF RS. 6000/- PER SY MENTIONED AT EMAIL PRINTOUT SE IZED VIDE PAGE 142 OF SEIZED ANNEXURE A-24 IS ASKING PRICE OF THE LAND IF SOLD OUTRIGHT BASIS. THE PAGE 73-74 OF ANN A-40 IS NEITH ER A SEPARATE ESTIMATE NOR SEPARATE PROJECTION BUT CONNECTED WORK ING IN CONNECTION WITH PAGE 76 OF ANN A-40. THESE PROJECTI ONS WERE PREPARED BY THE SAME PERSON WHO OFFERED THE PROPOSA L OF JOINT VENTURE TO THE ASSESSEE. IN THE PAGE 73-74 THE PROJ ECTION IS MADE MONTHLY BASIS WHILE IN PAGE 76 IS SUMMARY OF PAGE 7 3-74 WHICH IS EXPLAINED AS UNDER: - PARTICULARS TOTAL AMOUNT AS PER PAGE 73-74 TOTAL AMOUNT AS PER PAGE 76 LAND COST 7,41,39,600/-- (THIS FIGURE IS 20% OF TOTAL LAND VALUE OF RS. 37,06,98,000/- ESTIMATED FOR JOINT VENTURE AND 20% OF LAND COST PAID UP FRONT TO OWNER AS MENTIONED IN PAGE 76 OF ANN A- 40) 37,06,98,000.00 COST OF BUILDING 1,01,46,51,400.00 1,01,46,51,400.00 MARKETING EXPENSES 5,07,32,570.00 5,07,32,570.00 ADMINISTRATIVE COST 7,60,98,855.00 7,60,98,855.00 AMOUNT OF LOAN 25,94,88,600.00 25,94,88,600.00 INTEREST COSTS 11,67,69,870.00 11,67,69,870.00 REVENUE 2,92,47,56,115.00 SHARE OF INVESTOR IN REVENUE @65% 1,90,10,91,474.75 1,90,10,91,474.75 % PAID 7,41,39,600.00 20% (I.E. 20% OF 18 UPFRONT TO OWNER RS. 37,06,98,000.00) THUS THE PAGE 76 OF ANN A-40 IS SUMMARY OF PROJECTI ON AND PAGE 73-74 IS DETAILED MONTHLY WORKING OF CASH FLOW STAT EMENT OF THE ESTIMATES SUMMARIZED AT PAGE 76; BOTH THE WORKINGS WERE MADE BY THE REPRESENTATIVE OF THE PROSPECTIVE PARTY TO ESTI MATE THE PROFIT/LOSS FROM JOINT VENTURE IN ITS HANDS. WE ARE ENCLOSING H EREWITH EXCEL SHEET OF PAGE 73-74 FOR THE SHAKE OF CONVENIENCE. SINCE THESE PAPERS ARE NOTING BUT ONLY THE PROJECTI ONS OF JOINT VENTURE WHICH COULD NOT BE MATERIALIZED, THEREFORE NO ADVERSE INTERFERENCE CAN BE DRAWN ON THE BASIS OF THESE PAP ERS. AS REGARD FIGURE OF RS. 4,55,88,400/- MENTIONED IN YOUR ABOVE REFERRED QUERY, WE ARE SUBMITTING ASSESSEES EXPLA NATION IN SEPARATE REPLY FILED IN THE CASE OF M/S RISING BUIL D ESTATE PRIVATE LIMITED. AS REGARD PAGE 37 OF EXHIBIT A-57 (SEIZED FROM 73-7 5 TAL KATORA, JAIPUR), WE WOULD LIKE TO MENTION HERE THAT THIS PAGE WAS PREPARED AT DIFFERENT POINT OF TIME AT THE TIME OF NEGOTIATION WITH SOME OTHER PARTY AND SOME FIGURES/NOTINGS WERE WRIT TEN ON THIS PAPER DURING THE DISCUSSION WITH SOME OTHER PARTY A ND FIGURE MENTIONED IN COLUMN NO 4 REPRESENTS TO AMOUNT OFFER ED FOR CREDIT IN ASSESSEES CAPITAL ACCOUNT AGAINST THE LAND CONTRIB UTION BY THE ASSESSEE (OR SAY UPFRONT PRICE); IF THE JOINT VENTURE/COLLABORATION IS MADE ON THE SHARING BASIS MENTIONED IN COLUMN NO. 1 . THE UPFRONT PRICE AND SHARING RATIO DEPENDS ON SEVERAL FACTORS SUCH AS REPUTATION OF DEVELOPER, NATURE AND QUALITY OF DEVE LOPMENT WORK TO BE CARRIED OUT BY THE DEVELOPER, INVOLVEMENT OF IN VESTMENT BY DEVELOPER, EXPECTED PROFIT FROM THE SHARE RECEIVED BY THE OWNER IN THE BUILT UP AREA, PERIOD OF COMPLETION OF PROJECT , SIZE OF PROJECT, EXPECTED FAR FROM JDA, EXPECTED AVAILABILITY OF HEI GHT ETC. THUS, THE UPFRONT PRICE AND SHARING RATIO MAY VARY PERSON TO PERSON AND PROJECT TO PROJECT. THEREFORE THE LD. AO WAS OF THE OPINION TILL 11.1 2.2010 THAT SEIZED ANNEXURE A-24 PAGE 159 SHOWS THE COST OF LAND AND I N HER THREE REPETITIVE SHOW CAUSE NOTICES, SHE REITERATED THAT THE COST OF THE LAND WAS RS. 4,55,88,400/- AND SEIZED PAPER 159 OF ANNEXURE A-24 SHOWS THE ACTUAL COST OF THE LAND (IN CASE OF RISING BUILDESTATES PVT LIM ITED). IN THE CASE OF SHOW CAUSE NOTICE TO THE ASSESSEE SHE WHISPERED ABOUT TH E FIGURE OF RS. 19 7,41,39,600/- ON THE BASIS OF PAGE 74 OF ANNEXURE A-40, BUT AT THE END OF THE NOTICE, SHE REPEATED THE FIGURES OF NOTICE ISSU ED FOR RISING BUILDESTATES PVT LTD. AFTER SEEING THE DETAILED EXPLANATION OF T HE ASSESSEE, SHE FELT THAT THE ADDITION AGAINST COST OF THE LAND CANNOT BE SUS TAINED ON THE BASIS OF SEIZED ANNEXURE A-24 PAGE 159/A-40 PAGE 74. THEN, S HE CHANGED HER STAND AND HELD THAT COLUMN 4 OF SEIZED PAGE 37 OF ANNEXUR E A-57 SHOWS THE ACTUAL COST OF THE LAND. THE FINDING OF THE AO IS W ITHOUT BASIS. IN FACT NO ANY CLEAR AND POSITIVE CONCLUSION ON THE BASIS OF FIGUR E NOTED ON SEIZED PAGE 37 OF ANNEXURE A-57 CAN BE DRAWN. THIS IS A DUMB PAPER . 2.11 THE AO HERSELF IN HER SHOW CAUSE NOTICE D ATED 06.12.2010 (ISSUED IN THE CASE OF M/S RISING BUILDESTATES PVT LTD ) MENTIONED AS UNDER: - HAD THIS PAPER BEEN THE ONLY SEIZED DOCUMENT THAT I NDICATE THIS FIGURE IT WOULD HAVE BEEN A DUMB PAPER AS THE ASSES SEE HAS CLAIMED. BUT ANNEXURE A-24 SEEN VIS--VIS ANN. 57 (PAGE 37) MAKES IT A SPEAKING DOCUMENT. IN SO FAR THAT SHRI PAWAN LASHKA RY HAS HIMSELF WRITTEN 400 AGAINST IT. THE LD. AO HERSELF HELD THAT THERE IS NO MATERIAL OR DOCUMENT TO LINK ANNEXURE A-57 PAGE 37 EXCEPT PAGE 159 OF ANNEXURE A -24. IN THIS SHOW CAUSE NOTICE, SHE TRIED TO LINK FIGURE 455 (SHORT FORM OF 4,55,88,400/-) MENTIONED AT PAGE 159 OF ANNEXURE A-24 WITH FIGURE 400 MENTIONED AT PAGE 37 OF ANNEXURE A-57. NOW THIS HAS BEEN PROVED BEYOND DOUBT THAT FIGURES 4,55,88,400/- MENTIONED IN SEIZED PAPER 159 OF ANN A-24 REPRESENTS TO VALUE OF LAND PROPOSED TO BE GIVEN TO THE ASSESS EE BY THE PROSPECTIVE DEVELOPER/BUILDER AGAINST THE LAND UNDER JOINT VENT URE PROJECT, THEREFORE, THE FIGURE 400 MENTIONED IN SEIZED ANNEXURE A-57 PAGE 3 7 CANNOT BE TREATED OTHERWISE BUT SHOULD BE TREATED LIKEWISE I.E. VALU E OF LAND OFFERED TO BE GIVEN TO THE ASSESSEE BY THE PROSPECTIVE DEVELOPER/ BUILDER AGAINST THE LAND UNDER JOINT VENTURE PROJECT. IT CANNOT BE SAID IN A NY WAY THAT THIS REPRESENTS THE COST OF THE LAND. 20 IN FACT, HAVING REGARD TO THE CONTENTS OF THE SAID DOCUMENT AND THE MANNER AND METHOD IN WHICH THE SAME WAS WRITTEN, IT IS NOT POSSIBLE TO CONNECT THE SAME WITH ANY ACTUAL TRANSACTION ENTERED INTO BY TH E ASSESSEE COMPANY AND NO INFERENCE, THEREFORE, COULD BE DRAWN ON THE BASI S OF THE SAID DOCUMENT, MUCH LESS ANY INFERENCE ABOUT THE UNEXPLAINED INVES TMENT INCURRED BY THE ASSESSEE AS ALLEGED BY THE LD AO. 2.12 THE ASSESSEE HAS EXPLAINED THE CONTENTS OF SE IZED PAPER 37 OF ANNEXURE A-57 BY FILING SWORN AFFIDAVIT OF SHRI PAW AN LASHKARY-AUTHOR OF THE PAPER. THE COPY OF THE SAID AFFIDAVIT IS PLACED AT PB PAGE 59 TO 61. THE RELEVANT PARA OF THE AFFIDAVIT IS AS UNDER: - THE EXPLANATION OF ENTRIES NOTED ON THIS PAGE I S THAT WE DID NOT HAVE SUFFICIENT FUNDS, SKILLS AND EXPERIENCE TO DEVELOP GROUP HOUSING SCHEME/PROJECTS INDEPENDENTLY. SO, WE ADVERTISED IN NEWS PAPER FOR SALE OF LAND APPROVED/UNDER APPROVAL FOR GROUP HOUSING/P ROJECTS. THE ADVERTISEMENT CUTTING OF THE NEWS PAPER IS ALSO UND ER SEIZURE VIDE PAGE 102 TO 106 OF EXHIBIT A-24 SEIZED FROM 73-75 TALKAT ORA, JAIPUR. ALTERNATIVELY, WE WERE THINKING TO DEVELOP SCHEMES/ GROUP HOUSING PROJECTS ON VARIOUS LANDS OF OUR GROUP ON JOINT VEN TURE/ COLLABORATION AGREEMENT/PARTNERSHIP BASIS. WE WERE APPROACHED BY SEVERAL PARTIES FOR JOINT VENTURE AGREEMENT. THE PRINT OUTS OF SEVE RAL EMAILS ARE UNDER SEIZURE VIDE SAID EXHIBIT A-24. DURING THE COURSE O F THE DISCUSSION IN RESPECT OF JOINT VENTURE/COLLABORATION AGREEMENT/PA RTNERSHIP WITH ONE OF THE PROSPECTIVE PARTY, I PREPARED THIS PAPER FOR NEGOTIATION WITH THE PARTY. THE CONTENTS OF THIS SEIZED PAGE 37 OF EXHIB IT A-57 ARE EXPLAINED AS UNDER:- A) THE OFFER AGAINST OUR SHARE IN PROFIT/LOSS OF JOINT VENTURE WAS MENTIONED IN COLUMN 1 OF THE SAID SEIZED PAPER. FOR EXAMPLE W E OFFERED OUR SHARE OF 26.66% IN PROFIT OR LOSS; IF JOINT VENTURE IN RE SPECT OF LAND AT BHAVGARH BANDHA IS FINALIZED. B) THE PARTICULARS OF THE LAND PROPOSED FOR JOINT VENT URE/COLLABORATION ARE MENTIONED IN COLUMN 2 OF THE SAID SEIZED PAPER. C) AT THE TIME OF SAID NEGOTIATION FOR THE JOINT VENTU RE/COLLABORATION, THERE WAS SEVERAL PENDING WORK, IN RESPECT OF CONVERSION/ APPROVAL OF PROJECT AND POSSESSION OF LAND. THE ESTIMATED EXPENSES TO B E INCURRED FURTHER FOR CONVERSION, APPROVAL AND POSSESSION OF THE LAND FOR SCHEME/HOUSING PROJECTS WAS MENTIONED IN COLUMN NO. 3 OF THE SAID SEIZED PAPER. THE FIGURE IS WRITTEN IN SHORT AT THE TIME OF NEGOTIATI ON BY OMITTING FIVE ZERO. 21 FOR EXAMPLE 666 INDICATES THAT THE ESTIMATED AMOUNT FURTHER REQUIRED TO BE INCURRED WAS 6,66,00,000/- D) WE PURCHASED THE AGRICULTURAL LAND AND MADE FURTHER EXERCISED FOR 90B PROCEEDINGS, CONVERSION AND APPROVAL OF THE PROJECT S. THIS AND TIME- SPAN RESULTED SUBSTANTIAL INCREASE IN THE MARKET RA TE OF THE LAND. WE ESTIMATED THE MARKET RATE OF EACH DEVELOPED LAND (O FFERED FOR NEGOTIATION FOR JOINT VENTURE/ COLLABORATION) AT TH E TIME OF NEGOTIATION AND SUCH ESTIMATED MARKET VALUE OF THE LAND WAS MEN TIONED IN COLUMN NO 4 OF THE SAID SEIZED PAPER. WE OFFERED THE PROSP ECTIVE PARTY THAT OUR CAPITAL ACCOUNT SHOULD BE CREDITED BY THIS AMOUNT A GAINST THE CAPITAL CONTRIBUTION OF LAND FOR THE JOINT VENTURE/COLLABOR ATION, IF THE JOINT VENTURE/COLLABORATION IS MATERIALIZED. THE FIGURE IS WRITTEN IN SHORT AT THE TIME OF NEGOTIATION BY OMITTING FIVE ZERO. 4. ALL THE NOTING IN COLUMN 1, 3 AND 4 OF THE SAID SEIZED PAPERS ARE JUST ROUGH ESTIMATES NOTED DURING THE COURSE OF DISCUSSI ON/NEGOTIATION WITH THE PROSPECTIVE PARTY FOR JOINT VENTURE/ COLLABORAT ION AGREEMENT. THE JOINT VENTURE/ COLLABORATION/ PARTNERSHIP AGREEMENT WAS NOT MATERIALIZED TILL THE DATE IN RESPECT OF THE LANDS MENTIONED AT COLUMN NO 2 OF THE SAID SEIZED PAGE. 2.13 IT IS RELEVANT TO MENTION HERE THAT SHRI PAW AN LASHKARY HAS STATED IN HIS AFFIDAVIT THAT COLUMN 4 OF THE SEIZED PAGE 37 OF ANNEXURE A-57 SHOWS THE MARKET VALUE OF THE LAND TO BE CREDITED I N HIS ACCOUNT OF JOINT VENTURE. THE RELEVANT SENTENCE IN THE AFFIDAVIT IS AS UNDER: - . WE OFFERED THE PROSPECTIVE PARTY THAT OUR CAPIT AL ACCOUNT SHOULD BE CREDITED BY THIS AMOUNT AGAINST THE CAPITAL CONTRIB UTION OF LAND FOR THE JOINT VENTURE/COLLABORATION, IF THE JOINT VENTURE/COLLABO RATION IS MATERIALIZED. THE FIGURE IS WRITTEN IN SHORT AT THE TIME OF NEGOTIATI ON BY OMITTING FIVE ZERO. THIS PARA WAS FURTHER EXPLAINED BY THE ASSESSEE VID E LETTER DATED 11.12.2010 (PB PAGE 71) THE RELEVANT PARA OF THE LETTER WAS AS UNDER: - AS REGARD PAGE 37 OF EXHIBIT A-57 (SEIZED FROM 73 -75 TAL KATORA, JAIPUR), WE WOULD LIKE TO MENTION HERE THAT THIS PA GE WAS PREPARED AT DIFFERENT POINT OF TIME AT THE TIME OF NEGOTIATION WITH SOME OTHER PARTY AND SOME FIGURES/NOTINGS WERE WRITTEN ON THIS PAPER DUR ING THE DISCUSSION WITH SOME OTHER PARTY AND FIGURE MENTIONED IN COLUMN NO 4 REPRESENTS TO AMOUNT OFFERED FOR CREDIT IN ASSESSEES CAPITAL ACC OUNT AGAINST THE LAND CONTRIBUTION BY THE ASSESSEE (OR SAY UPFRONT PRICE) ; IF THE JOINT 22 VENTURE/COLLABORATION IS MADE ON THE SHARING BASIS MENTIONED IN COLUMN NO. 1. THE UPFRONT PRICE AND SHARING RATIO DEPENDS ON SEVERAL FACTORS SUCH AS REPUTATION OF DEVELOPER, NATURE AND QUALITY OF D EVELOPMENT WORK TO BE CARRIED OUT BY THE DEVELOPER, INVOLVEMENT OF INVES TMENT BY DEVELOPER, EXPECTED PROFIT FROM THE SHARE RECEIVED BY THE OWNE R IN THE BUILT UP AREA, PERIOD OF COMPLETION OF PROJECT, SIZE OF PROJECT, E XPECTED FAR FROM JDA, EXPECTED AVAILABILITY OF HEIGHT ETC. THUS, THE UPF RONT PRICE AND SHARING RATIO MAY VARY PERSON TO PERSON AND PROJECT TO PROJ ECT.. THEREFORE THE FIGURE 330 SHOULD NOT BE READ IN CO NTEXT WITH 37.06 CRORE BUT IT SHOULD BE READ IN CONTEXT WITH 7.41 CRORE. T HE SEIZED PAPER 74 OF ANNEXURE A-40 WHICH IS PROPOSAL OF A JOINT VENTURE SHOWS THE PAYMENT AGAINST THE LAND TO THE ASSESSEE IS 7.41 CRORE NOT 37.06 CRORE. 2.14 THE LD. AO IN PARA 12 MENTIONED THAT THESE PA PERS ARE NOT DUMB PAPERS BECAUSE THE SCRIBBLING IN THE SEIZED PA PER ARE CORROBORATED WITH THE BOOKS MAINTAINED BY THE ASSESSEE. IN FACT NONE OF THE JOTTING ON THE SEIZED PAPER A-24, A-40 AND A-57 WAS CORROBORATED W ITH ENTRIES OF THE BOOKS OF ACCOUNTS. THE LD AO HAS MADE WRONG AND PER VERSE FINDING IN THIS REGARD. IT IS NOT A CASE WHERE THE PART OF THE ENTR IES RECORDED ON THE IMPUGNED SEIZED PAPER IS VERIFIABLE FROM THE BOOKS OF ACCOUNTS. THE DEPARTMENT HAS CARRIED OUT INTENSIVE SEARCH & SEIZU RE OPERATION AND NO ANY DOCUMENT, RECEIPT, AGREEMENT OR JOTTINGS WAS FOUND TO SUPPORT THE AOS VIEW THAT COLUMN 4 OF SEIZED PAPER 37 ANNEXURE A-57 SHOWS THE ACTUAL COST OF THE LAND. WE SUBMIT THAT THE CONTENTS OF THE REL EVANT SEIZED DOCUMENT WERE NOT SUFFICIENT TO DRAW ANY INFERENCE AGAINST T HE ASSESSEE AND THE LD AO WAS NOT JUSTIFIED IN DECIPHERING THE FIGURES MENTIO NED THEREIN AND DRAWING AN ADVERSE INFERENCE AGAINST THE ASSESSEE THAT THE SAID FIGURES IN COLUMN 4 REPRESENTED ITS INVESTMENT IN LAND WITHOUT BRINGING ANY CORROBORATIVE MATERIAL IN SUPPORT. 2.15 THE LD. AO NEVER ASKED TO EXPLAIN THE JUSTIFI CATION OF RATIO MENTIONED IN COLUMN 1 OF THE SEIZED PAGE 37 OF ANNE XURE A-57. HOWEVER IT WAS EXPLAINED THAT THE UPFRONT PRICE AND SHARING RA TIO DEPENDS ON SEVERAL FACTORS SUCH AS REPUTATION OF DEVELOPER, NATURE AND QUALITY OF DEVELOPMENT 23 WORK TO BE CARRIED OUT BY THE DEVELOPER, INVOLVEMEN T OF INVESTMENT BY DEVELOPER, EXPECTED PROFIT FROM THE SHARE RECEIVED BY THE OWNER IN THE BUILT UP AREA, PERIOD OF COMPLETION OF PROJECT, SIZE OF P ROJECT, EXPECTED FAR FROM JDA, EXPECTED AVAILABILITY OF HEIGHT ETC. THUS, THE UPFRONT PRICE AND SHARING RATIO MAY VARY PERSON TO PERSON AND PROJECT TO PROJ ECT. I) AS REGARD 26.66 MENTIONED IN COLUMN 1 OF PAGE 37 OF ANNEXURE A-57 FOR BHAVGARH SCHEME WE SUBMIT THAT AT THE TIME OF N EGOTIATION THE PROCEEDINGS UNDER SECTION 90B WAS PENDING. THE LAND IN QUESTION WAS PURCHASED BY AGREEMENT TO SALE ON 18.11.2006 FROM S C/ST CLASS AND THE STATUS OF LAND WAS AGRICULTURE. THEREFORE IT WAS PR OPOSED THAT 20% SHARE SHOULD BE GIVEN TO SHRI PAWAN LASHKARY AGAINST HIS WORKING FOR 90B PROCEEDINGS, LAND CONVERSION MATTER, APPROVAL OF PL AN BY JDA AND LOOKING AFTER DAY TO DAY CONSTRUCTION ACTIVITIES OF THE PRO POSED PROJECT. BALANCE 80% WILL BE DIVIDED AMONG THE BUILDER AND LAND OWNER IN THE RATIO OF 2/3:1/3 RESPECTIVELY. ACCORDING TO THIS OFFER, THE ASSESSEE COMPANY WOULD GET 26.66% SHARE IN THE BUILT-UP AREA AND SHRI PAWAN LA SHKARY WOULD GET 20% IN THE BUILT-UP AREA AGAINST THE WORKING. THE ASSE SSEE COMPANY WOULD GET 3.30 CRORES AGAINST THE AGRICULTURAL LAND + 26.66% SHARE IN BUILT-UP AREA WITH NO RESPONSIBILITY OF CONVERSION OF LAND, APPROVAL O F PLAN FROM JDA. II) SIMILAR CONDITIONS WERE FOR PUSHP GARDEN. THE LAN D IN QUESTION WAS PROCEEDED U/S 90B BUT THE ISSUE OF PATTA BY JDA WAS PENDING. UNDER THE PROPOSAL THE ASSESSEE COMPANY WOULD GET 22.50% SHARE IN THE BUILT-UP AREA AND SHRI PAWAN LASHKARY WOULD GET 15% IN THE B UILT-UP AREA AGAINST THE WORKING IN JDA FOR ISSUE OF THE PATTA AND DAY T O DAY CONSTRUCTION ACTIVITIES. III) THE SHARING RATIO OF 50% 40% 60% 60% AND 45% WAS OF FERED FOR MAHAL ROAD, DABLA KHURD, CHAKSU, GUNSI AND VATSALYA PROJECT RESPECTIVELY LOOKING TO THE REPUTATION OF THE BUILDER AND QUANTU M OF INVESTMENT TO BE 24 MADE BY THE BUILDER/DEVELOPER AND BUILT UP AREA TO BE CONSTRUCTED BY THE PROSPECTIVE BUILDER. IV) 18.75% MENTIONED AGAINST SPORTS CITY MAY CERTAINLY CREATE A SUSPICION. BUT THE FACT REMAINS, THAT THE LAND WAS UNDER RIVER AND FOR NO USE FOR ANY VIABLE PROJECT. IT WAS A WRONG DECISION OF THE COMPANY IN PURCHASING OF THIS LAND AND IT WAS NOT WORTHWHILE AT ALL. THIS LAND WAS PURCHASED ON 1.6.2005 BY REGISTERED SALE DEED (COPY AT PB PAGE 3 64-382) AND NO PERSON IN MARKET WAS READY TO BUY IT EVEN AT COST PRICE PA ID BY THE ASSESSEE COMPANY BECAUSE NO ANY COMMERCIAL OR RESIDENTIAL PR OPOSAL WAS VIABLE ON THIS LAND. THE STATUS OF THE LAND IS MENTIONED IN J AMABANDI AS KHATALI. THE COPY OF JAMABANDI IS AT PB PAGE 383-385). THE CATEGORY OF THE LAND HAS BEEN DESCRIBED IN LAND REVENUE SETTLEMENT. (COPY PB PAGE 386-389). THE KHATALI LAND HAS BEEN DESCRIBED AT PB PAGE 388 AS U NDER:- THUS THIS LAND WAS NOT EVEN AVAILABLE FOR AGRICULTU RAL ACTIVITIES FOR FULL PERIOD. THE STATUS OF THE LAND WAS AGRICULTURA L AND NOT APPROVED BY JDA FOR ANY PROJECT. IN SUCH A SITUATION IF A PERSON DE VELOPS A SPORTS CITY BY MAKING HUGE INVESTMENT AND THE COMPANY GET EVEN 18. 75% IT WOULD BE MUCH PROFITABLE FOR THE COMPANY. V) 80% MENTIONED AGAINST RR FARMS MAY AGAIN CREATE A SUSPICION. BUT THE FACT REMAINS THAT THIS WAS A PRO POSAL OF JOINT VENTURE FOR DIVIDING THE LAND IN FARMS HOUSES AND SELLING OF F ARM HOUSES. IN THIS TYPE OF THE PROJECTS, THE MAIN INVOLVEMENT IS OF THE LAN D. NO INVESTMENT IS 25 REQUIRED BY THE DEVELOPER EXCEPT MINOR INVESTMENT I N CONSTRUCTION OF WBM ROADS, PLANTATION OF TREES ON ROAD SIDE ETC. AND IN ADVERTISEMENT AND SELLING. IN NORMAL COURSE, THE BOOKING COMMISSION IN THE PRO PERTY TRANSACTION IS ABOUT 1% TO 2%. THEREFORE, IN SUCH TYPE OF THE PRO JECTS WHERE THE QUANTUM OF INVESTMENT BY THE DEVELOPER IS VERY LOW, IT IS P ROFITABLE FOR THE DEVELOPER TO WORK ON SHARING BASIS OF 20% AND IN SUCH TYPE OF PROJECTS NO LAND OWNER WOULD LIKE TO GIVE 60% OR 70% TO THE DEVELOPER OTHE RWISE IT WOULD BE LOSS FOR THE LAND OWNER. 2.16 THE LEARNED AO REJECTED THE AFFIDAVIT FILED B Y SHRI PAWAN LASHKARY ON SURMISES, CONJECTURES, ASSUMPTION, PROB ABILITIES AND POSSIBILITIES WITHOUT HAVING ANY POSITIVE MATERIAL TO REBUT OR CONTROVERT THE CONTENTS OF THE AFFIDAVIT. NO EVIDENCE WAS BROUGHT ON RECORD BY THE LD AO TO SHOW THAT THE CONTENTS OF THE AFFIDAVIT ARE INCORRE CT. SHRI PAWAN LASHKARY PRESENTED HIMSELF BEFORE THE AO (PB PAGE 69) AFTER FILING THE AFFIDAVIT BUT THE STATEMENT OF SHRI PAWAN LASHKARY WERE NOT RECOR DED BY THE AO TO CONTROVERT THE CONTENTS OF THE AFFIDAVIT. THE CONTE NTS OF AFFIDAVITS, WHICH ARE NOT VAGUE SHOULD BE ACCEPTED CORRECT. RELIANCE IS P LACED ON THE FOLLOWING DECISIONS:- (I) MEHTA PARIKH & CO V CIT [1958] 30 ITR 181 (SC) (II) DILIP KUMAR RAO VS CIT (1974) 94 ITR 1 (BOM); (III) MALWA KNITTING WORKS VS CIT (1977) 107 ITR 379, 381 MP AND (IV) SRI KRISHNA VS CIT (1983) 142 ITR 618 (ALL). THE LD AO HAS REJECTED THE STATEMENT OF PAWAN LASH KARY BEFORE THE DDIT AND AFFIDAVIT OF PAWAN LASHKARY FILED BEFORE HER, E VEN THAN WHAT IS LEFT BEHIND IS THE DUMB DOCUMENT BEREFT OF ANY DETAILS W ITHOUT THERE BEING ANY ENQUIRY BY THE AO TO CORRELATE THE SAME WITH OTHER DOCUMENTS SEIZED, REGULAR BOOKS OF ACCOUNTS, RECORDS KEPT BY OUTSIDE AGENCIES OR STATEMENTS OF CONCERNED PARTIESTHE FOUR ESSENTIAL COMPONENTS OF S. 4 OF INCOME TAX ACT, VIZ., THE TAXABLE EVENT, THE PERSON CHARGEABLE, THE ASSESSMENT YEAR IN WHICH CHARGE IS LEVIABLE AND THE TOTAL INCOME ARE A BSENT IN THIS CASE. 26 2.17 THE ASSESSEE MADE SPECIFIC REQUEST VIDE LETT ER DATED 08.12.2010 ( COPY PB PAGE 76) THAT IN CASE OF DOUBT, DIRECT VERIFICATION CAN BE MADE FROM THE SELLER OR COMPARISON SHOULD BE MAD E WITH THE OTHER SALE TRANSACTION OF THE LAND MADE BY THE OTHER PARTIES I N THE SAME AREA AND IN SAME PERIOD AND FOR THIS PURPOSE NECESSARY DETAILS CAN BE OBTAINED FROM THE OFFICE OF REGISTRAR AND THE ASSESSEE IS READY TO PA Y COST OF EVIDENCE IN THIS REGARD. THE ASSESSEES REQUEST WAS TURNED DOWN AND WITHOUT MAKING ANY INQUIRY THE UNDISCLOSED/UNEXPLAINED INVESTMENT IN T HE LAND WAS CONCLUDED BY THE LD. AO MERELY ON THE BASIS OF A NON-SPEAKING DOCUMENT. 2.18 THE LD. AO PRESUMED THAT THE SO CALLED UNEXP LAINED INVESTMENT IN LAND WAS MADE BY THE ASSESSEE IN AY 2 007-08. THERE BEING NO MATERIAL ON RECORD TO INDICATE IN CERTAIN TERMS THE PERIOD OF TRANSACTIONS, IT WAS NOT POSSIBLE TO INFER THAT THEY BELONGED TO ASSESSMENT YEAR IN QUESTION. THE AO HAS NOT WHISPERED ANYWHERE TO WHOM THE ASSESSEE MADE SO CALLED UNEXPLAINED PAYMENT-WHETHER TO SELLER OF THE LAND, -WHETHER TO THE LEGAL OWNER OF THE LAND, - WHETHER TO JDA OR WHETHE R IN CONSTRUCTION OR SOME WHERE ELSE. 2.19 THE LD AO HAS NOT BRING ANY POSITIVE MATERIA L OR PROOF TO ESTABLISH THAT THE COLUMN 4 OF THE SEIZED PAPER PAG E 37 OF ANN A-57 SHOWS THE ACTUAL INVESTMENT IN LAND. THE LD AO DID NOTING EXCEPT (I) REJECTING THE STATEMENT RECORDED BY DDIT, (II) REJECTING THE AFFI DAVIT FILED BY SHRI PAWAN LASHKARY AND (III) REJECTING THE EXPLANATION OF THE ASSESSEE. NO ANY POSITIVE MATERIAL WAS BROUGHT ON RECORD TO DISPROVE THE EXPL ANATION OF THE ASSESSEE. THE ASSESSING OFFICER MERELY DISBELIEVED THE EXPLAN ATION/STATEMENTS GIVEN BY THE ASSESSEE AND HAS CONVERTED GOOD PROOF INTO N O PROOF. HONBLE JUSTICE HIDAYATULLAH OF THE SUPREME COURT IN THE CASE OF SR EELEKHA BANERJEE VS CIT [1963] 49 ITR 112 (SC); 120 OBSERVED THAT THE I NCOME TAX DEPARTMENT CANNOT BY MERELY REJECTING UNREASONABLY A GOOD EXPL ANATION, CONVERT GOOD PROOF INTO NO PROOF 27 HONBLE SUPREME COURT IN THE CASE OF UMA CHARAN SHA W & BROS CO VS CIT 37 ITR 271 HAS HELD THAT THE SURMISES AND CONJECTURES, AND THE CONCLUSION IS THE RESULT OF SUSPICION WHICH CANNOT TAKE THE PLACE OF PROOF. HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS ANUPAM KAPOOR (2008) 299 ITR 179 (P & H) ALSO HELD THAT SUSPICION, HOWSOEVER STRONG CANNOT TAKE THE PLACE OF LEGAL PROOF. 2.20 THIS PAPER DOES NOT REFLECT THE INVESTMENT M ADE BY THE ASSESSEE COMPANY. IF THE DEPARTMENT CONSIDERS IT AS INVESTMENT OF THE ASSESSEE FOR THE LAND, IT IS BURDEN ON THE DEPARTME NT TO PROVE THE FIGURES APPEARING ON THE PAPER FOUND IN THE SEARCH REPRESEN TS UNDISCLOSED INVESTMENT OF THE ASSESSEE. THIS BURDEN IS NOT DISC HARGED AND THEREFORE, ON THE BASIS OF THIS PAPER NO ADDITION CAN BE MADE. RE LIANCE IS PLACED ON THE FOLLOWING DECISIONS:- I) COMMISSIONER OF INCOME TAX VS. NARESH KHATTAR (H UF) (2003) 261 ITR 664 (DEL) TO INVOKE THE PROVISIONS OF S. 69B, THE BURDEN IS O N THE REVENUE TO PROVE THAT THE REAL INVESTMENT EXCEEDS THE INVESTME NT SHOWN IN THE BOOKS OF ACCOUNT II) J.S. PARKAR V V.B.PARKAR 94 ITR 616,644 (BOM). KINDLY SEE OBSERVATIONS IN THE DISSENTING JUDGMEN T OF MUKHI, J. IN IT IS TO BE NOTICED THAT SECTION 69 AND SECTION 69A DO STATUTORILY PLACE A BURDEN ON THE ASSESSEE TO EXPLAIN THE SOURCE OF INV ESTMENT OR THE SOURCE OF THE ACQUISITION OF THE GOLD, BUT THAT BURDEN CAN ONLY ARISE AFTER THE INITIAL BURDEN ON THE TAXING AUTHORITIES OF PROVING THE FACTUM OF INVESTMENT OR THE FACTUM OF OWNERSHIP HAS BEEN DISC HARGED. SECTIONS 69 AND 69A CAN BE SAID TO BE IN THE NATURE OF PENAL OR AT LEAST ONEROUS PROVISIONS AND THE BURDEN LIES ON THE REVENUE TO PR OVE THAT THE CONDITION PRECEDENT LAID DOWN, THEREFORE, IS SATISFIED BEFORE ANY ORDER INCLUDING THE VALUE THEREOF IN THE ASSESSMENT CAN BE MADE. III) LAL CHAND AGARWAL VS ACIT 21 TAXWORLD 213;231 ITAT JAIPUR BENCH THE INITIAL BURDEN U/S 69 OF INCOME TAX ACT IS ON D EPARTMENT TO PROVE THE INVESTMENT HAS BEEN MADE BY THE ASSESSEE. 28 2.21 THE LD AO CONCLUDED ON PRESUMPTION, PROBABIL ITIES AND POSSIBILITIES THAT COLUMN 4 OF THE SEIZED PAPER PAG E 37 OF ANN. A-57 SHOWS THE INVESTMENT IN LAND. BUT SHE FAILED TO EXPLAIN A ND CORRELATE THE FIGURE MENTIONED IN COLUMN 1 AND 3. IF THE FIGURE OF 400 I N COLUMN 4 AGAINST THE PUSHP GARDEN REPRESENT TO ACTUAL INVESTMENT OF TH E COMPANY IN LAND THAN WHAT REPRESENTS THE 22.5 MENTIONED IN COLUMN 1 AND 169 MENTIONED IN COLUMN 3 - THIS HAS NOT BEEN EXPLAINED BY THE LD AO . HONBLE ITAT PUNE A BENCH HELD IN THE CASE OF DHANVARSHA BUILDERS & DEVELOPERS (P) LTD. VS. DEPUTY COMMISSIONER OF INCOME TAX (2006) 105 TT J (PUNE) 376 : (2006) 102 ITD 375 (PUNE) THAT THE SEIZED DOCUMEN T HAS TO BE READ AS A WHOLE. 2.22 UNDISPUTEDLY, THE SAID DOCUMENT WAS FOUND FR OM THE PREMISE OF M/S PAWAN ENTERPRISES NOT FROM THE PREMISE OF TH E ASSESSEE COMPANY; THEREFORE, IT CANNOT BE USED AGAINST THE ASSESSEE. FURTHER THE PRESUMPTION UNDER S. 132(4A) IS NOT AVAILABLE FOR PURPOSES OF A SSESSMENTFURTHER, IT BEING A REBUTTABLE AND SHIFTING PRESUMPTION, IN THE FACE OF AFFIDAVITS FILED BY SHRI PAWAN LASHKARY. HONBLE APEX COURT IN THE CASE OF P.R.METRANI VS CIT (2006) 287 ITR 209 (SC) HAS HELD AS UNDER:- SEARCH AND SEIZUREPRESUMPTION UNDER S. 132(4A)APP LICABILITY TO REGULAR ASSESSMENT PRESUMPTION UNDER SUB-S. (4A) O F S. 132 IS A REBUTTABLE PRESUMPTIONFURTHER, PRESUMPTION UNDER SUB-S. (4A) IS AVAILABLE ONLY IN REGARD TO PROCEEDINGS FOR SEARCH AND SEIZURE AND NO T FOR THE PURPOSE OF FRAMING A REGULAR ASSESSMENTUNLIKE S. 132(4), IT H AS NOT PROVIDED THAT THE PRESUMPTION UNDER S. 132(4A) WOULD BE AVAILABLE WHI LE FRAMING THE REGULAR ASSESSMENT OR FOR THAT MATTER IN ANY OTHER PROCEEDI NGS UNDER THE ACT EXCEPT UNDER S. 278DSEC. 132 BEING A COMPLETE CODE IN ITS ELF CANNOT INTRUDE INTO ANY OTHER PROVISION OF THE ACT AND VICE VERSATHOUG H PRESUMPTION UNDER S. 132(4A) IS NOT AVAILABLE TO THE AUTHORITIES WHIL E FRAMING THE REGULAR ASSESSMENT. 29 2.23 THE SURROUNDING CIRCUMSTANCES AND CAPABILI TY TO EARN THE UNDISCLOSED INCOME SHOULD BE TAKEN INTO ACCOUNT BEF ORE MAKING ADDITION U/S 69 OF INCOME TAX ACT. THE ASSESSEE COMPANY WAS INCORPORATED ON 29.06.200 5. IN AY 2006-2007 AND AY 2007-2008, THERE WAS NO ANY TRADING OPERATIO NS. THE COMPANY WAS NOT CAPABLE TO EARN UNDISCLOSED INCOME TO MAKE UNDI SCLOSED INVESTMENT IN THE LAND. THEREFORE, WITHOUT HAVING ANY BUSINESS OP ERATION, IT IS NOT POSSIBLE TO HAVE ANY TYPE OF INCOME WHETHER DISCLOSED OR UN DISCLOSED. THE LD AO FAILED TO CONSIDER THIS ASPECT. THEREFORE ADDITION CANNOT BE MADE IN THE HANDS OF THE ASSESSEE COMPANY. RELIANCE IS PLACED O N THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF COMMISSIONER O F INCOME TAX VS SMT. P. K. NOORJAHAN 237 ITR 570 (SC) AND CIT VS B HARAT ENGINEERING AND CONSTRUCTION CO. (1972) 83 ITR 187 (SC). 2.24 THE LD AO HAS RELIED UPON THE DECISION OF MAHAVIR WOLLEN MILLS VS CIT (DEL) 245 ITR 297 (2000). THE LD AO MISPLACED THE RELIANCE ON THIS DECISION AS THE FACTS OF THIS CASE ARE TOTA LLY DIFFERENT. IN THIS CASE DURING THE COURSE OF SEARCH AND SEIZURE PROCEEDINGS CERTAIN SLIPS WERE FOUND, WHICH, THE AO CONCLUDED, CONTAINED DETAILS O F PAYMENT BEYOND THOSE WHICH WERE MADE BY CHEQUES AND DRAFTS AND WERE DULY REFLECTED IN THE BOOKS OF ACCOUNTS. THE ASSESSEES STAND BEFORE THE TRIBUNAL WAS THAT THE DOCUMENTS WERE 'DUMB DOCUMENTS' WHICH DID NOT CONTA IN FULL DETAILS ABOUT THE DATES OF PAYMENT AND ITS CONTENTS WERE NOT CORR OBORATED BY ANY MATERIAL AND COULD NOT BE RELIED UPON AND MADE BASIS OF AN A DDITION. TRIBUNAL CONSIDERED THIS ASPECT AND OBSERVED THAT ON COMPARI SON OF THE SEIZED DOCUMENTS AND LEDGER ACCOUNTS OF THE PARTIES, SEIZE D DOCUMENTS COULD NOT BE REGARDED AS DUMB DOCUMENT. BASIS FOR COMING TO SUCH A CONCLUSION WAS THAT SOME OF THE ENTRIES REFLECTED IN THE SEIZED DO CUMENT TALLIED WITH THE ENTRIES IN THE LEDGER ACCOUNTS MAINTAINED BY THE AS SESSEE. BUT IN THE CASE OF THE ASSESSEE THE ENTRIES OF THE IMPUGNED SEIZED DOCUMENT HAS NO CORRELATION WITH THE BOOKS OF ACCOUNT. FURTH ER MORE, THE FIGURES IN 30 COLUMN 1 AND 3 OF THE IMPUGNED SIZED PAPER WAS NOT INTERPRETED/CORRELATED OR EXPLAINED BY THE AO. FURTHER, THE IMPUGNED SEIZE D HAS NEXUS WITH SEIZED PAPER 159 OF A-24 WHEREIN 4,55,88,400/- MAY BE TAKE N AS 455 IN SHORT AND SEIZED PAPER 37 OF ANNEXURE A-57 SHOWS 300 AGAINST PUSHP GARDEN AND IF IT IS SO THEN THE COLUMN 4 OF THE SEIZED PAPER 37 O F ANNEXURE A-57 SHOWS THE UPFRONT PRICE OF THE LAND PROPOSED TO BE GIVEN IN J OINT VENTURE BECAUSE 4,55,88,400/- IN SEIZED ANNEXURE PAGE 159 OF A-24 R EPRESENTS TO UPFRONT PRICE OFFERED BY A BUILDER AGAINST THE LAND FOR JOI NT VENTURE. 2.25 IN VIEW OF THE ABOVE SUBMISSION, WE SUBMIT TH AT THE IMPUGNED SIZED PAPER IS A DEAF AND DUMB DOCUMENT AND NO ANY CONCLU SION CAN BE DRAWN ON THE BASIS OF THE SAID SEIZED PAPER. RELIANCE IS PLA CED ON THE FOLLOWING DECISIONS. 1) COMMISSIONER OF INCOME TAX VS. S.M. AGGARWAL (2007) 293 ITR 43 (DEL) IN THIS CASE THE DEPARTMENT SEIZED DOCUMENTS 'ANNEX URE A-28 P. 15, - GIVES THE DETAILS OF CERTAIN HANDWRITTEN MONETARY TRANSAC TIONS WHICH SHOWS THAT THE ASSESSEE HAD GIVEN A LOAN OF RS. 22.5 LACS ON I NTEREST AND EARNED INTEREST INCOME OF RS. 3.55 LACS ON IT. THE TRIBUNAL HOLD TH IS DOCUMENT AS DUMB DOCUMENT. THE RELEVANT FINDINGS OF THE TRIBUNAL AS MENTIONED IN THE ABOVE ORDER IS AS UNDER:- WE HAVE OURSELVES EXAMINED THE CONTENTS OF THE DOC UMENT AND ARE UNABLE TO DRAW ANY CLEAR AND POSITIVE CONCLUSION ON THE BA SIS OF FIGURES NOTED ON IT. THE LETTERS H.S., T.2 AND D-SHOP CANNOT BE EX PLAINED AND NO MATERIAL HAS BEEN COLLECTED TO EXPLAIN THE SAME. LIKEWISE, T HE FIGURES TOO ARE TOTALLY UNEXPLAINED AND ON THE BASIS OF NOTINGS AND JOTTING S, IT CANNOT BE SAID THAT THESE ARE THE TRANSACTIONS CARRIED OUT BY THE ASSES SEE FOR ADVANCING MONEY OR FOR TAKING MONEY. THUS, IN OUR OPINION, THIS IS A D UMB DOCUMENT.' HONBLE HIGH COURT CONFIRMED THE FINDINGS OF THE TR IBUNAL AND RELEVANT FINDINGS WAS AS UNDER:- 31 12. IT IS WELL SETTLED THAT THE ONLY PERSON COMPET ENT TO GIVE EVIDENCE ON THE TRUTHFULNESS OF THE CONTENTS OF THE DOCUMENT IS THE WRITER THEREOF. SO, UNLESS AND UNTIL THE CONTENTS OF THE DOCUMENT ARE PROVED A GAINST A PERSON, THE POSSESSION OF THE DOCUMENT OR HANDWRITING OF THAT P ERSON, ON SUCH DOCUMENT BY ITSELF CANNOT PROVE THE CONTENTS OF THE DOCUMENT . THESE ARE THE FINDINGS OF FACT RECORDED BY BOTH THE AUTHORITIES I.E. CIT(A ) AND THE TRIBUNAL. 15. SIMILARLY, IN THE PRESENT CASE, AS ALREADY HEL D ABOVE, THE DOCUMENTS RECOVERED DURING THE COURSE OF SEARCH FROM THE ASSE SSEE ARE DUMB DOCUMENTS AND THERE ARE CONCURRENT FINDINGS OF CIT( A) AND THE TRIBUNAL TO THIS EFFECT. SINCE THE CONCLUSIONS ARE ESSENTIALLY FACTUAL, NO SUBSTANTIAL QUESTION OF LAW ARISES FOR CONSIDERATION. 2) COMMISSIONER OF INCOME TAX VS. GIRISH CHAUDHARY (2008) 296 ITR 619 (DEL) PREMISES OF M/S I.G. BUILDERS & PROMOTERS (P) LTD. IN WHICH THE ASSESSEE IS A DIRECTOR AND OF THE ASSESSEE WERE SEARCHED ON 18T H JAN., 2000 AND A DOCUMENT MARKED AS ANNEX. A-37 WAS FOUND AND SEIZED . THE SAID DOCUMENT CONTAINED THE FOLLOWING ENTRIES : ANNEXURE A-37 (PAGE 13) 'CASH RB 31.50 CH. 9.50 41.00 16.50 57.50 31.50 16.50 48.00' THE TRIBUNAL HOLD THIS DOCUMENT AS DUMB DOCUMENT. T HE RELEVANT FINDINGS OF THE TRIBUNAL AS MENTIONED IN THE ABOVE ORDER IS AS UNDER:- 'IN THE PRESENT CASE, THE REVENUE HAS USED ITS LONG EST ARM OF SEARCH AVAILABLE TO THE REVENUE TO UNEARTH UNACCOUNTED MON EY OR EVIDENCE THEREOF. HAVING TAKEN ABOVE STEP AND AS PER LAW, IT HAS TO B E PROVED STRICTLY THAT UNDISCLOSED INCOME ASSESSED IN THE HANDS OF THE ASS ESSEE IS UNDISCLOSED INCOME BEYOND A REASONABLE DOUBT. AS NOTED EARLIER IN THE FIRST PAGE, TOTAL OF ALL THE FIVE FIGURES IS 57.50 BUT ADDITION OF RS. 4 8 LAKHS WAS MADE AND NOT OF RS. 57.50 LAKHS. WHY FIGURES MENTIONED AT SECOND PL ACE AFTER SOME GAP WAS NOT TAKEN INTO CONSIDERATION. HOW 48 HAVE BEEN MADE AS RS. 48 LAKHS AND THAT TOO UNDISCLOSED INCOME OF THE ASSESSEE IS ABSO LUTELY NOT CLEAR FROM THE ASSESSMENT ORDER. IT WAS STATED THAT RS. 9.50 LAKHS IS RECORDED TO BE RECEIVED THROUGH CHEQUE AND THEREFORE ABOVE AMOUNT WAS NOT A DDED. IT IS CORRECT THAT 32 BEFORE 9.50 THE WORD, 'CH' IS WRITTEN BUT THERE WAS NOTHING ON RECORD TO SHOW THIS AMOUNT WAS ANY WAY DIFFERENT FROM OTHER F IGURES/AMOUNTS. NO ATTEMPT WHATSOEVER WAS MADE TO LINK ANY OF THE ENTR Y IN THE SEIZED BOOK WITH ANY TRANSACTION CARRIED BY THE ASSESSEE IN HIS CAPACITY AS DIRECTOR OR BY HIS WIFE OR M/S I.G. BUILDERS AND PROMOTERS LTD. TO SHOW THE AMOUNT IN FIGURE AS ASSESSABLE UNDISCLOSED INCOME. NO PROPER USE OF SEIZED MATERIAL WAS MADE TO ESTABLISH THAT ENTRIES IN THE SEIZED DO CUMENT RELATES TO UNDISCLOSED INCOME OF RS. 48 LAKHS. SEIZED DOCUMENT HAS RIGHTLY BEEN HELD TO BE A DUMP-DOCUMENT. IT WAS FOR THE REVENUE TO PU T LIFE INTO IT BY COLLECTING OTHER RELEVANT AND CONNECTED MATERIAL. T HIS HAS NOT BEEN DONE TO ESTABLISH THE CASE AS PER REQUIREMENT OF THE STATUT E.' HONBLE HIGH COURT CONFIRMED THE FINDINGS OF THE TR IBUNAL AND RELEVANT FINDINGS WAS AS UNDER:- 13. SIMILARLY, THE DOCUMENT ANNEX. A-37 RECOVERED DURING THE COURSE OF SEARCH IN THE PRESENT CASE IS A DUMB DOCUMENT AND L EAD US NOWHERE. THUS, THE TRIBUNAL RIGHTLY DELETED THE ADDITION OF RS. 48 LAKHS MADE BY THE AO ON ACCOUNT OF UNDISCLOSED INCOME ON THE BASIS OF SEIZE D MATERIAL. 3) JAYANTI LAL PATEL VS. ASSISTANT COMMISSIONER OF INCOME TAX & ORS. (1998) 233 ITR 588 (RAJ) DURING SEARCH AT THE RESIDENCE OF DR. TOMAR, THE DE PARTMENT OFFICIAL FOUND A SLIP CONTAINING SOME FIGURES. THIS PIECE OF PAPER CLAIMED TO HAVE BEEN RECOVERED AT THE TIME OF SEARCH CONTAINS FIGURES UN DER TWO COLUMNS. IN ONE COLUMN, THE TOTAL OF THESE FIGURES COMES TO RS. 17, 25,000 FROM 31ST MAY, 1989, TO 8TH DEC., 1989, AND IN THE OTHER COLUMN, T HE TOTAL OF THESE FIGURES COMES TO RS. 22,12,500. AN ADDITION OF RS. 22,12,50 0 ON THE BASIS OF FIGURES ON A SMALL PIECE OF PAPER IN RESPECT OF PURCHASE OF PLOT NO. B-4, GOVIND MARG, JAIPUR WAS MADE BY THE AO. THIS PLOT B-4, GOV IND MARG, JAIPUR, HAS BEEN PURCHASED JOINTLY BY DR. TOMAR, DR. MRS. TOMAR AND B.S. TOMAR, HUF. HELD THAT NO ADDITION ON ACCOUNT OF ENTRIES ON A PI ECE OF PAPER WHICH IS CLAIMED TO HAVE BEEN FOUND AT THE TIME OF SEARCH, C AN BE MADE, TREATING THE FIGURES AS INVESTMENT FOR PURCHASE OF PLOT NO. B-4, GOVIND MARG, JAIPUR IN THE HANDS OF DR. TOMAR, DR. MRS. TOMAR AND B.S. TOM AR HUF. 33 4) MAHAAN FOODS LTD. VS. DEPUTY COMMISSIONER OF INCOME TAX (2010) 123 LTD 590 (DELHI C BENCH) HELD THAT ALTHOUGH THE CONTENTS OF THE RELEVANT SEI ZED DOCUMENTS SHOW THAT THE AMOUNTS MENTIONED THEREIN RELATE TO SOME EXPEND ITURE, IN THE ABSENCE OF ANY OTHER EVIDENCE FOUND DURING THE COURSE OF SEARC H OR BROUGHT ON RECORD BY THE AO TO SHOW THAT THE SAID EXPENDITURE WAS ACT UALLY INCURRED BY THE ASSESSEE, THE SAME CANNOT BE ADDED TO THE UNDISCLOS ED INCOME OF THE ASSESSEE BY INVOKING THE PROVISIONS OF S. 69CASSES SEE EXPLAINED THAT THE SAID ENTRIES REPRESENTED ESTIMATES MADE BY ITS EMPL OYEES IN RESPECT OF PROPOSED EXPENDITURETHERE IS NO EVIDENCE ON RECORD TO REBUT/CONTROVERT THE SAID EXPLANATION- ADDITIONS NOT SUSTAINABLE. 5) ASSISTANT COMMISSIONER OF INCOME TAX VS. SATYAPAL WASSAN (2008) 5 DTR (JAB)(TRIB) 202 HELD THAT THE DOCUMENT WAS A DUMB DOCUMENT CONTAINI NG NO SIGNATURE, NO DATE, NO UNIT LIKE RUPEE, TON, KILOGRAM, CENTIMETER ETC., FULL NAMES OF THE PARTIES WERE ALSO NOT GIVEN, NOT SHOWING WHETHER IT WAS POSITION OF ASSETS OR LIABILITIES, RECEIPTS OR PAYMENTS, SALE OR PURCHASE OR ADVANCES MADE OR LOANS RECEIVEDAO DID NOT CARRY OUT ANY ENQUIRY WHATSOEVE R TO FIND OUT THE NATURE AND PERIOD OF TRANSACTIONSTHE ASSESSEE HAD EXPLAINED BY WAY OF AFFIDAVIT THAT THE DOCUMENT BELONGED TO HIS BROTHER DTHERE WAS ALSO AN AFFIDAVIT FILED BY WIDOW OF D ACCORDING TO WHICH THE DOCUMENT BELONGED TO HER HUSBANDEVEN IF THE AFFIDAVITS ARE IGNORED A S FRESH EVIDENCE WRONGLY ADMITTED BY CIT(A), WHAT IS LEFT BEHIND IS THE DUMB DOCUMENT BEREFT OF ANY DETAILS WITHOUT THERE BEING ANY ENQUI RY BY THE AO TO CORRELATE THE SAME WITH OTHER DOCUMENTS SEIZED, REGULAR BOOKS OF ACCOUNTS, RECORDS KEPT BY OUTSIDE AGENCIES OR STATEMENTS OF CONCERNED PARTIESTHE FOUR ESSENTIAL COMPONENTS OF S. 4, VIZ., THE TAXABLE EVENT, THE PERSON CHARGEABLE, THE ASSESSMENT YEAR IN WHICH CHARGE IS LEVIABLE AND THE TOTAL INCOME ARE ABSENT IN THE CASE. 34 6) RAKESH GOYAL VS. ASSISTANT COMMISSIONER OF INCOME TAX* (2004) 87 TTJ (DEL) 151 THE FINDINGS OF HONBLE TRIBUNAL WAS AS UNDER:- 20.1 AFTER PERUSING THE FINDINGS OF THE CIT(A) AND THE SUBMISSIONS OF BOTH THE PARTIES, WE DO NOT FIND ANY INFIRMITY IN THESE FINDINGS. FIRSTLY THE FINDING OF THE CIT(A) HAS NOT BEEN CONTROVERTED BY THE LEAR NED DEPARTMENTAL REPRESENTATIVE BY FILING ANY POSITIVE EVIDENCE. THE COPIES OF THE PAGES FOUND FROM THE POSSESSION OF THE ASSESSEE ARE PLACE D IN THE PAPER BOOK AND AFTER GOING THROUGH THESE PAPERS, WE FIND THAT THES E ARE SIMPLY DEAF AND DUMB DOCUMENTS AND THEY CANNOT BE CONSIDERED FOR MA KING ANY ADDITION. THIS IS A SETTLED PRINCIPLE OF LAW THAT ANY DOCUMEN T OR ENTRY RECORDED IN THOSE DOCUMENTS SHOULD BE CORROBORATED WITH A POSIT IVE EVIDENCE. HERE IN THE PRESENT CASE NOTHING HAS BEEN CORROBORATED OR P ROVED THAT ASSESSEE WAS DEALING IN MONEY LENDING BUSINESS. 7) N.K. MALHAN VS. DEPUTY COMMISSIONER OF INCOME TAX* (2004) 91 TTJ (DEL) 938 THE FINDINGS OF HONBLE TRIBUNAL WAS AS UNDER:- WE HAVE PERUSED THE AFORESAID EXPLANATION AND THE S EIZED DOCUMENT PLACED AT ASSESSEES PAPER BOOK-I PP. 48 AND 50. THE DOCUM ENT DOES NOT STATE OF ANY DATE OR THE YEAR AGAINST THE ENTRIES WRITTEN TH EREIN. IT DOES NOT SHOW WHETHER THE ASSESSEE HAS MADE OR RECEIVED ANY PAYME NT. IT ALSO CANNOT BE DECIPHERED FROM THE SAID DOCUMENTS THAT THE ENTRIES THEREIN PERTAIN TO THE BLOCK PERIOD. THE AO ALSO DID NOT BRING ON RECORD A NY MATERIAL TO SHOW THAT ANY INVESTMENT HAS BEEN MADE BY THE ASSESSEE IN ANY CHIT FUND COMPANY OR OTHERWISE. THE DOCUMENT FOUND AND SEIZED MIGHT RAIS E STRONG SUSPICION, BUT IT COULD NOT BE HELD AS A CONCLUSIVE EVIDENCE WITHO UT BRINGING SOME CORROBORATIVE MATERIAL ON RECORD. THE DOCUMENT CONT AINED ONLY THE ROUGH CALCULATIONS AND WAS SILENT ABOUT ANY INVESTMENT. O N THE BASIS OF SUCH A DUMB DOCUMENT, IT CANNOT BE SAID THAT THERE WERE IN VESTMENTS MADE IN FACT BY THE ASSESSEE. HEAVY ONUS LAY UPON THE REVENUE TO PROVE THAT THE DOCUMENT GIVES RISE TO UNDISCLOSED INVESTMENT BY TH E ASSESSEE. THIS ONUS HAS NOT BEEN DISCHARGED. ACCORDINGLY NO ADDITION OF UNDISCLOSED INCOME COULD BE MADE ON THE BASIS OF SUCH A DOCUMENT. SUCH A VIEW HAS ALSO BEEN ENTERTAINED BY THE HONBLE ALLAHABAD HIGH COURT IN CIT VS. DAYACHAND JAIN VAIDYA (1975) 98 ITR 280 (ALL). THE ADDITION SO MAD E, THEREFORE, IS DIRECTED TO BE DELETED. 8) JAGDAMBA RICE MILLS VS. ASSISTANT COMMISSIONER OF INCOME TAX (2000) 67 TTJ (CHD) 838 HELD THAT DOCUMENT SEIZED DURING SEARCH NOT BEING C LEAR AS TO WHETHER ITEMS WERE PAYMENTS OR RECEIPTS OR SOME OTHER CALCULATION S, NO ADDITION COULD BE MADE ON THE BASIS OF SUCH A DUMB DOCUMENTS. 35 9) ASHWANI KUMAR VS. INCOME TAX OFFICER (1992) 42 TTJ (DEL) 644 HELD THAT :- IN ORDER TO ATTRACT THE PRESUMPTION UNDER S. 132(4A ), THE FIRST REQUIREMENT IS THAT THE DOCUMENT SHOULD BE FOUND IN POSSESSION OR CONTROL OF THE ASSESSEE. IN THIS CASE THE REVENUE HAS BEEN SAYING THAT THE D OCUMENT WAS FOUND INSIDE THE SHOP OF THE ASSESSEE. HOWEVER, THERE IS NOTHING IN THE ORDERS OF THE AUTHORITIES BELOW TO SHOW THAT THE SLIP WAS IN POSS ESSION AND CONTROL OF THE ASSESSEE. EVERYTHING PHYSICALLY PRESENT INSIDE THE SHOP OF A PERSON MAY NOT BE IN THAT PERSON'S CONTROL AND POSSESSION. FOR PRO VING POSSESSION IT IS NECESSARY TO SHOW THAT THE PERSON CONCERNED HAD THE INTENTIO POSSESSENDI. IN THIS CASE NOTHING OF THAT SORT IS POINTED OUT BY TH E AUTHORITIES BELOW. THEN, FOR PRESUMING THAT THE CONTENTS OF THE BOOKS OF ACC OUNT OR DOCUMENT ARE TRUE, THE DOCUMENT MUST BE SPEAKING ONE. IN THIS CA SE THE SLIP SAID TO HAVE BEEN RECOVERED BY THE REVENUE, DOES NOT CONTAIN ANY NARRATION IN RESPECT OF THE VARIOUS FIGURES NOTED THEREIN. THE SLIP DOES NO T INDICATE WHETHER THE FIGURES REFERRED TO QUANTITIES OF MONEY OR TO QUANT ITIES OF GOODS AND WHETHER ONE SIDE, AND IF SO, WHICH SIDE REPRESENTS RECEIPTS WHICH SIDE REPRESENTED OUTGOINGS. THUS, IS, THUS, A DUMB DOCUMENT AND AS T HE ORDERS OF THE AUTHORITIES BELOW WOULD SHOW THEY HAVE MERELY ADDED THE TOTAL OF THE RIGHT SIDE OF THE SLIP WITHOUT SUPPLYING THE FIGURES ANY LANGUAGE TO INDICATE THEIR MEANINGS. IN THE CASE OF SUCH A DUMB DOCUMENT, THE PROVISIONS OF S. 132(4A) DO NOT PERMIT ANYONE TO PRESUME THAT THE TO TAL OF THE FIGURES OF RIGHT SIDE OF THE SLIP REPRESENTS THE ASSESSEE'S IN COME. THE PRESUMPTION AT THE MOST IS ATTRACTED TO THE FIGURES AND A FURTHER PRESUMPTION THAT THEY REPRESENT THE INCOME OF THE ASSESSEE IS NOT PERMISS IBLE UNDER S. 132(4A). WHEN A DUMB DOCUMENT, LIKE THE PRESENT SLIP, IS REC OVERED AND THE REVENUE WANTS TO MAKE USE OF IT, IT IS THE DUTY OF THE REVE NUE TO COLLECT NECESSARY EVIDENCE WHICH MAY PROVIDE AN ACCEPTABLE NARRATION TO THE VARIOUS ENTRIES. THE EVIDENCE COLLECTED SHOULD BE SUCH THAT ANY REAS ONABLE MAN WOULD ACCEPT THE HYPOTHESIS ADVANCED BY THE REVENUE THAT THE FIGURES WRITTEN ON THE RIGHT SIDE OF THE SLIP REPRESENT INCOMES EARNED BY THE ASSESSEE. IT WAS CONCEDED THAT NO SUCH EVIDENCE HAS BEEN BROUGHT ON RECORD. FURTHER, THE REVENUE HAS GIVEN NO ADJUSTMENT TO THE ENTRIES ON T HE LEFT SIDE OF THE SLIP. THEREFORE, THE SLIP IN QUESTION DID NOT INDICATE TH AT THE FIGURES REPRESENTS RECEIPT OF INCOME TO THAT EXTENT BY THE ASSESSEE AN D IT WAS NOT PERMISSIBLE TO THE REVENUE WITHOUT PROCURING ANY EVIDENCE TO SUPPO RT SUCH A HYPOTHESIS THAT THE ENTRIES RECORD THE INCOME OF THE ASSESSEE AND TO PRESUME SUCH ASSUMED NARRATION OF THE ENTRIES TO BE TRUE. THEREF ORE, THE ADDITIONS CANNOT BE SUSTAINED AND THEY ARE HEREBY DELETED. 10) ASSISTANT COMMISSIONER OF INCOME TAX VS. ASHOK KUMAR VIG (2007) 106 TTJ (RANCHI) 422 36 HELD : THE AO HAS MADE THE ADDITIONS OF RS. 67,01,380 AND RS. 77,02,747 FOR THE ASST. YR. 2001-02 AND 2002-03 ON THE BASIS OF A DIA RY MARKED PKC-60, SEIZED FROM THE OFFICE OF THE ASSESSEE IN THE PREMI SES OF MDSS, A PROPRIETY CONCERN OF THE ASSESSEES SISTER-IN-LAW. THE ASSESS EE HAS EXPLAINED TO AO THAT THE DIARY BELONGED TO HIS EMPLOYEE, WHO WAS WO RKING IN THE OFFICE LOCATED IN THE SAID SERVICE STATION AND THE RECORD OF TRANSACTIONS IN THE SAID DIARY WAS IN THE NATURE OF WORKSHEETS ONLY WHERE TH E TRANSACTIONS WERE COMPLETED AND SUBSEQUENTLY WERE TAKEN TO THE BOOKS OF ACCOUNT. THE AO HAS ALSO CONFIRMED THAT CHEQUES WERE RECEIVED AND W ERE FOUND RECORDED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE OR THAT OF SIS TER-CONCERN, AS WAS THE CASE. IN PKC-60, WHERE THESE TRANSACTIONS HAVE APPE ARED THERE IS NO INDICATION THAT THIS ACCOUNT RELATES TO THE ASSESSE E OR TO THE SISTER-CONCERN. THE EMPLOYEE WAS RECORDING TRANSACTIONS RELATING TO BOTH OF THEM. FOR THE FINANCIAL YEAR 2000-01, THERE ARE FOUR PARTIES, AGA INST WHICH NAME, RATE, AMOUNT, PAYMENT RECEIVED AND BALANCE ARE DULY RECOR DED. AND FOR THE SUBSEQUENT YEAR, APART FROM THESE FOUR, ONE KSI APP EARED. ON PERUSAL OF THESE TRANSACTIONS ONE HAS TO AGREE WITH THE AUTHOR ISED REPRESENTATIVE THAT THESE WERE WORKING SHEETS MAINTAINED BY THE EMPLOYE E AND THOSE TRANSACTIONS MATURING, HAVE BEEN DULY RECORDED IN T HE BOOKS OF ACCOUNT. THE CIT(A) HAS TAKEN A CLEAR-CUT VIEW THAT THE AO DID N OT VERIFY THESE SO-CALLED BALANCES WITH THE PARTIES WHOSE NAMES WERE FOUND ME NTIONED. THEREFORE, HE DELETED THE ADDITIONS. FURTHER THE TRANSACTIONS APP EARED IN THE DIARY MARKED PKC-60 DO NOT REVEAL THAT THEY ARE PARTY WISE ACC OUNT AS THERE IS NO MENTION OF ANY BILL HAVING BEEN RAISED AGAINST THE SAID TRANSACTIONS. THE AMOUNTS MENTIONED THEREIN APPEARED TO BE A CONSOLID ATED FIGURE BUT DATE ON WHICH THESE AMOUNTS ARE SHOWN AS OUTSTANDING IS NOT MENTIONED. IN BOTH THE YEARS THERE ARE ONLY ONE INSTANCE OF PAYMENT RECEIV ED APPEARS BUT THE DATE AND MODE OF RECEIPT ARE NOT MENTIONED. THE AO HAS A LSO NOTED THAT CHEQUES RECEIVED AS PER THIS DIARY ARE DULY RECORDED IN THE BOOKS OF ACCOUNT. THESE ACCOUNTS CANNOT BE TREATED AS RELIABLE AND PROPERLY MAINTAINED FOR ANOTHER REASON ALSO. THE NEXT YEARS ACCOUNTS GIVE NO INDIC ATION REGARDING MOVEMENT OF AMOUNT. THE PARTIES SHOW DRASTIC REDUCT ION IN THE BALANCES BUT HOW THE PAYMENTS WERE ACCOUNTED FOR IS NOT FORTHCOM ING FROM THESE ENTRIES. THE AUTHORISED REPRESENTATIVE HAS INVITED ATTENTION TO THE FACT THAT THE AO DID MAKE ENQUIRY, WHICH THE ASSESSEE HAS NOT DISPUT ED. HOWEVER, THE AO HAS NOT BROUGHT ON RECORD THE RESULT OF SUCH AN ENQ UIRY. THE ONLY PLAUSIBLE CONCLUSION, UNDER THESE CIRCUMSTANCES, WOULD BE THA T THE FINDINGS OF SUCH AN EXERCISE WAS FAVOURABLE TO THE ASSESSEE. COMING TO THE APPLICABILITY OF PROVISIONS OF S. 132(4A), THE ASSESSEE HAS EXPLAINE D THE CIRCUMSTANCES UNDER WHICH HIS EMPLOYEE MAINTAINED THESE DOCUMENTS IN TH E PREMISES OF MDSS. THUS, THE OWNERSHIP IS NOT DISPUTED. HOWEVER, THERE IS NO PRESUMPTION ABOUT THE EARNING OF INCOME. THE ASSESSMENT IS MADE UNDER CHAPTER XIV-B. THE AO CANNOT MAKE ADDITION ON THE BASIS OF INCOMPL ETE ENTRIES. THE ONUS RESTS ON THE REVENUE TO ESTABLISH THAT THE ASSESSEE WAS IN RECEIPT OF MONEY 37 THEN THE ONUS WOULD AUTOMATICALLY BE SHIFTED TO THE ASSESSEE TO PROVE THAT THE MONEY HAS BEEN DISCLOSED IN THE ACCOUNT OR THE SAME IS NOT LIABLE TO TAX. IN THE PRESENT CASE IN HAND, THE AO HAS NOT BEEN AB LE TO DEMONSTRATE WITH ADEQUATE EVIDENCE THAT THE ASSESSEE RECEIVED THE AM OUNTS IN TWO YEARS AS ALLEGED. THESE ENTRIES AS RECORDED IN PKC-60' DO N OT CLEARLY REVEAL THAT THE ASSESSEE HAS EARNED INCOME. THE ASSESSMENT OF UNDIS CLOSED INCOME IS UNDER CHAPTER XIV-B AND THERE IS NO SCOPE OF ASSUMPTION O R PRESUMPTION WHILE MAKING ASSESSMENT UNDER THIS CHAPTER. THEY ARE DUMB DOCUMENTS ON WHICH RELIANCE CANNOT BE PLACED, UNLESS THEY ARE CORROBOR ATED WITH OTHER EVIDENCES. THERE IS NO INFIRMITY IN THE ORDER OF CIT(A) IN DEL ETING THE ADDITIONS 11) CHANDER MOHAN MEHTA VS. ASSISTANT COMMISSIONER OF INCOME TAX (INVESTIGATION) (1999) 65 TTJ (PUNE) 327 : 71 ITD 245 LOOSE PAPER INDICATING MONEY-LENDING ACTIVITIES SHO WING THE AMOUNT BORROWED AND AMOUNT LENTTHESE LOOSE PAPERS DO NOT INDICATE THE NAME OF ASSESSEETHEREFORE, THE LOOSE PAPERS BY THEMSELVES LEAD TO NO CONCLUSION AND HAVE NO EVIDENTIARY VALUEHOWEVER, IT HAS EVIDE NTIARY VALUE BECAUSE OF STATEMENT OF ASSESSEE UNDER S. 131 ADMITTING MON EY-LENDING ACTIVITIES AND EXPLAINING THE VARIOUS AMOUNT NOTED IN CODED FIGURE STHIS STATEMENT HAS TO BE CONSIDERED AND ACCEPTED AS A WHOLE IF THE AO WANTS TO USE IT IN EVIDENCEASSESSEE HAS PRODUCED CONFIRMATIONS FROM A LL CREDITORSNO MATERIAL BROUGHT ON RECORD TO PROVE THAT THESE CONF IRMATIONS WERE FALSE SAME CANNOT BE REJECTEDIF THE STATEMENT OF THE ASS ESSEE IS TO BE REJECTED IN TOTO NO ADDITION CAN BE MADE SINCE IN THAT CASE THO SE PAPERS WOULD BE DUMB PAPERSIF THE STATEMENT IS ACCEPTED IN TOTO, THEN T HE BORROWINGS MENTIONED IN THE PAPERS HAVE TO BE ACCEPTED AS GENUINEIN EIT HER CASE NO ADDITION CAN BE MADE. 12) M.M. FINANCIERS (P) LTD. VS. DEPUTY COMMISSIONER OF INCOME TAX ITAT, CHENNAI B BENCH (2007) 107 TTJ (CHENNAI) 200 HELD THAT NO ADDITION COULD BE MADE IN THE HANDS OF ASSESSEE ON THE BASIS OF THE DUMB LOOSE SLIPS SEIZED FROM HIS RESIDENCE, IN THE ABSENCE OF ANY CORROBORATIVE MATERIAL TO SHOW PAYMENT OF ANY UNDIS CLOSED CONSIDERATION BY THE ASSESSEE TOWARDS PURCHASE OF LAND. 13) HISSARIA BROS VS ACIT (ITA NO. 179/JDPR/1998) 2 2 TAXWORLD 684 ITAT JAIPUR. IT WAS HELD THAT ADDITION CANNOT BE MADE ON THE BAS IS OF VAGUE FIGURES FOUND NOTED ON SEIZED LOOSE PAPER WITHOUT P ROVING THAT THE ALLEGED AMOUNT ARE RECEIPTS AND INCOME OF THE ASSESSEE. 14) ITO VS MANNALAL JHALANI (ITA NO. 250 TO 260/JP /1998) 22 TAXWORLD 551 ITAT JAIPUR. IT WAS HELD THAT ADDITION CANNOT BE MADE SIMPLY RECOVERY OF SOME PAPERS FOUND AND SEIZED DUR ING THE COURSE OF SEARCH WITHOUT MAKING NECESSARY VERIFICATION AND EX AMINATION. 38 15) ASHWANI KUMAR BHARDWAJ VS DCIT 21 TAXWORLD 358 ITAT JAIPUR. IT WAS HELD IN PARA 29.6 THAT NO ADDITION CAN BE MA DE ON THE BASIS OF DEAF AND DUMB DOCUMENTS. 16) MOHD. ILLIAS CHOUDHARY VS DCIT 25 TAX WORLD 39 4 ITAT JAIPUR. IT WAS HELD THAT THE ADDITION CANNOT BE JUSTIFIABLY BE MADE AS UNDISCLOSED INCOME ON THE BASIS OF CERTAIN ENTRIES FOUND RECORD ED ON A SEIZED PAPER WITHOUT MAKING ANY INQUIRY AND INVESTIGATION AND WI THOUT EXAMINING THE ASSESSEE. 17) MOONGA METALS PVT. LTD., VS. ACIT (ALL.) 67 TT J 247 BURDEN IS ON THE REVENUE TO ESTABLISH THAT FIGURES APPEARING ON LOOSE PAPERS FOUND REPRESENT UNDISCLOSED INVESTMENT OF THE ASSES SEE. 10. THE WRITTEN SUBMISSIONS FILED ON BEHALF OF THE ASSESSEE WERE SENT TO THE ASSESSING OFFICER FOR HIS REMAND REPORT AND AFTER RECEIVING T HE REMAND REPORT, THE ASSESSEE WAS ALLOWED OPPORTUNITY TO FILE ITS RE-JOINDER. THE CO NTENTS OF THE REMAND REPORT AND OF RE- JOINDER ARE TABULATED IN THE ORDER OF LD. CIT (A) A T PAGES 32 TO 38 WHICH ARE AS UNDER :- 1. PARA 1 CONTAIN BRIEF NARRATION OF FACTS AND AS SUCH DOES NOT REQUIRE ANY COMMENT 2. PARA 2.1: AS REGARD THE ALLEGATION OF MENTIONING WR ONG FACTS IS CONCERNED, IT IS SUBMITTED THAT MENTIONING OF FIGUR E 95 AS AGAINST THE CORRECT FIGURE OF 45 IS A TYPOGRAPHICAL ERROR AND AS SHOULD BE TREATED AS SUCH. IN RESPECT OF THE ALLEGATION THAT THE LD. AO HAS INSERTED THE WORDS PURCHASE RATE AT HER OWN, IT IS SUBMITTED THAT IT I S A BLATANTLY UNTRUE SINCE THE AO HAS ONLY SAID WHAT HAS BEEN WRITTEN IN THE S TATEMENT AND THE AO HAS NOT ADDED ANY WORD OR PHRASE ACCORDING TO HER O WN SWEET WILL WHICH THE LEARNED COUNSEL IS ALLEGING. 3. PARA 2.3: IT HAS BEEN SUBMITTED BY THE COUNSEL THAT THE NAMES OF ONLY 9 PROPERTIES OUT OF 40 ODD PROPERTIES AND THEREFORE THE SAME WAS NOT WRITTEN TO JOT DOWN THE COST OF PROPERTIES. WHY SH. PAWAN LASHKERY HAS WRITTEN THE NAMES OF ONLY 9 OUT OF 40 PROPERTIES CA N ONLY BE STATED BY HIM AND NO ONE ELSE AND THIS IS FOR HIM TO EXPLAIN. WHAT IS RELEVANT HERE THAT THE COST OF ONLY 9 PROPERTIES OUT OF 40 ODD PR OPERTIES WERE JOTTED DOWN ON PAPER WHICH WAS SEIZED DURING THE COURSE OF SEARCH AND THE PAPER WAS FOUND EXTREMELY IMPORTANT BY THE AO IN AR RIVING AT THE UNDISCLOSED INVESTMENT OF THE ASSESSEE-COMPANY. HOW THE INTENTION OF THE WRITER OF THE PAPER CAN BE KNOWN FROM SOMETHING THAT HAS NOT BEEN JOTTED DOWN OR SCRIBBLED? WHAT CAN AT BEST BE KNOWN IS WHAT CAN BE REASONABLY BE INFERRED FROM THE JOTTING ON THE SAID PAPER WHEN SEEN IN CONTEXT OF THE RETURN OF INCOME OF THE ASSESSEE-COM PANY, OTHER SEIZED 39 MATERIAL AND STATEMENT OF THE IMPORTANT MEMBERS OF THE GROUP, ONE OF THEM BEING SH. PAWAN LASHKERY. THEN ID. COUNSEL HAS ALSO TRIED TO BUILD A STORY AR OUND AS TO WHAT THE JOTTINGS ON PAPER REVEAL? AS PER HIM, THE JOTTING DO NOT REFLECT THE INTENTION OF SH. PAWAN LASHKERY IN WRITING THE COST OF THE PROPERTIES BUT FOR THE PURPOSE OF ENTERING INTO A SUPPOSED JOINT V ENTURE WITH SOME UNKNOWN ENTITY IN RESPECT OF WHICH NO MATERIAL WAS SEIZED DURING THE COURSE OF SEARCH NOR THE ASSESSEE-COMPANY OR ITS ID . COUNSEL ABLE TO FURNISH DURING THE COURSE OF ASSESSMENT PROCEEDINGS OR EVEN AS AN ADDITIONAL EVIDENCE AT SUCH A LATER STAGE AT THE LE VEL OF APPEAL BEFORE YOUR GOOD-SELF. NOT A SINGLE SHRED OF EVIDENCE IN F AVOUR OF THE STORY OF PURPORTED JOINT VENTURE HAS BEEN FURNISHED BY THE L D. COUNSEL WHO WISHES THE DEPARTMENT TO ACCEPT HIS POINT OF VIEW W ITHOUT CHALLENGE! IT IS ONLY A MATTER OF PONDERING AS TO WHAT WAS THE BA SIS ON WHICH THE ASSESSEE-GROUP AGREED OR THOUGHT IT FIT TO ENTER IN TO THE SUPPOSED JOINT VENTURE IN WHICH THE RANGE OF THEIR SHARE VARIED FR OM 26.66% TO 80%- NOT TO FORGET THE FACT THAT NO EVIDENCE IN THIS REG ARD HAS ALSO BEEN FILED BY THE ASSESSEE-GROUP OR THEIR LD. COUNSEL. 4. PARA 2.4: THE ASSESSEE-GROUP HAS STATED THAT S H. PAWAN LASHKERY WAS TOTALLY CONFUSED AND MADE THE STATEMENT EX-TEMP ORE AT THE TIME OF SEARCH AND THUS HIS STATEMENT DOES NOT REFLECT THE TRUE NATURE OF THE IMPUGNED DOCUMENT. IT IS A MATTER OF RECORD THAT TH E STATEMENTS OF PERSONS SEARCHED ARE TAKEN IN PRESENCE OF WITNESS/P ANCHAS WHO AMONGST OTHER THINGS ENSURE THAT NO FORCE OR COMPULSION IS BROUGHT ON THE PERSON MAKING THE STATEMENT. FURTHER, SH. PAWAN LASHKERY H AS HIMSELF STATED, AT THE END OF THE STATEMENT, THAT ONLY THAT HAS BEE N WRITTEN WHICH HAS BEEN STATED BY HIM AND THAT HE HAS MADE THE STATEME NT IN FULL CONSCIOUSNESS WITHOUT ANY PRESSURE AND THAT THE GOD IS WITNESS TO SUCH A STATEMENT. IN ADDITION, NO PANCHA/WITNESS HAS STATE D THAT THE STATEMENT WAS TAKEN UNDER COERCION OR THAT THE PERSON MAKING STATEMENT WAS NOT IN A STATE OF MIND WHICH COULD RENDER THIS STATEMENT A S INVALID IN THE EYES OF LAW. 5. PARA 2.5: IN RESPECT OF THE FACT THAT THE PLACE OF SEIZURE OF DOCUMENT CONTAINING ENTRY OF RS. 13000/- PER SQUARE YARD AS MARKET VALUE OF THE CONCERNED LAND, IT IS SUBMITTED THAT MERELY BECAUSE THE PLACE OF SEIZURE OF LAND HAS BEEN QUOTED AS DIFFERENT FROM WHERE IT WAS FOUND DOES NOT IN ANY WAY CHANGE THE MEANING AND IMPORT OF WHAT THE E NTRIES CONTAINED THEREON MEAN. IN ANY CASE THE ASSESSEE-COMPANY IS A N IMPORTANT MEMBER OF SH. PAWAN LASHKERY GROUP AND FINDING OF C ERTAIN IMPUGNED PAPER FROM THE PREMISES OF M/S PAWAN ENTERPRISES SH OWS AND ESTABLISHES THE NEXUS BETWEEN THE SAID M/S PAWAN EN TERPRISES AND THE ASSESSEE-COMPANY. AS TO WHAT RS. 13000/- REFER AND PERTAIN TO DOES NOT CHANGE BY IT BEING MENTIONED TO HAVE BEEN FOUND AT PLACE A INSTEAD OF PLACE B. IT ONLY REPRESENTS THE MARKET VALUE OF T HE LAND AND AS SUCH HAS BEEN USED BY THE AO IN THAT RESPECT ONLY. 40 AS REGARDS THE AVERMENT OF THE ASSESSEE-COMPANY THA T THE AMOUNT OF RS. 13000/- ONLY REFLECTED THE ASKING PRICE AND NOT THE MARKET PRICE FROM SOME TOTALLY UNKNOWN PROSPECTIVE BUYER, IT IS SUBMI TTED THAT THE SAME IS UNTENABLE CONSIDERING THE FACT THAT THE ASSESSEE-CO MPANY HAS NOT FURNISHED ANY EVIDENCE IN EITHER IN RESPECT OF THE SAID BUYER OR IN SUPPORT OF ITS AVERMENTS. IN ABSENCE OF SUCH EVIDENCE HOW I S IT POSSIBLE TO TRUST THE AVERMENTS TO BE TRUE? THEY MERELY END UP BEING PART OF LARGER STRATEGY OF THE ASSESSEE-GROUP TO ESCAPE THE RIGOUR S OF LAW! 6. IN RESPECT OF THE OTHER PARAS OF THE SUBMISSION OF THE ASSESSEE- GROUP, IT IS SUBMITTED THAT THEY MERELY CONTAIN FAC TS WHICH WERE CONSIDERED BY THE AO DURING THE COURSE OF ASSESSMEN T PROCEEDINGS. NO NEW ADDITIONAL EVIDENCE, DOCUMENT OR STATEMENT HAS BEEN SUBMITTED WHICH REQUIRE SPECIFIC COMMENT. IN RESPECT OF THE N UMEROUS CASE LAWS CITED, IT IS SUBMITTED THAT THE SAME ARE MOUNTED ON DIFFERENT FACTS AND CIRCUMSTANCES WHICH ARE WHOLLY DIFFERENT FROM THOSE OF THE INSTANT CASE OF THE ASSESSEE-COMPANY AND SUCH THE RATION DOES NO T APPLY IN THE INSTANT CASE. 4. THE LD AR IN HIS REJOINDER SUBMITTED AS UNDER:- 4.1. THE LD AO HAS NOT BROUGHT ANY NEW FACTS OR EV IDENCE IN SUPPORT OF HER CONTENTION AND HAS REPEATED THE FINDINGS MADE I N THE ASSESSMENT ORDER. THE FACTS AND SUBMISSIONS AND CASE LAWS CITED IN TH E WRITTEN SUBMISSION OF THE ASSESSEE HAS NOT BEEN CONTROVERTED BY ANY POSIT IVE EVIDENCE. 4.2 IN PARA 2 OF WRITTEN SUBMISSION THE LD. AO A CCEPTED THE TYPING ERROR REGARDING MENTIONING OF FIGURES OF 95 AS AGAINST THE CORRECT FIGURE OF 45. REGARDING OTHER MISTAKE POINTED OUT BY ASSESSEE IN WRITTEN SUBMISSION REGARDING INSERTION OF WORD PURCHASES RATE BY AO AS HER OWN WE DRAW YOUR KIND ATTENTION ON THE STATEMENT OF SHRI PAWAN LASHKARY DATED 17.11.2008 WHEREIN AT PAGE 6 OF STATEMENT (PB PAGE 50) WHEREIN HE STATED THAT THE MARKET RATE OF THE LAND IS MENTIONE D IN THE COLUMN BEFORE THE NAME OF LAND. THE RELEVANT STATEMENT IS REPRODU CED AS UNDER:- 41 FROM THE PLAIN READING OF ANSWER AS WHOLE ONE CAN E ASILY CONCLUDE THAT THE ASSESSEE HAS STATED THE MARKET RATE OF THE LAND NOT HIS COST OR PURCHASE RATE OF THE LAND. 4.3. IN THE PARA 3 OF SUBMISSION, THE AO IS COMPLE TELY SILENT ON THE ISSUE THAT IF THIS PAPER SHOWS THE COST OF PROP ERTIES WHY ONLY 9 PROPERTIES MENTIONED ON THIS PAPER AS AGAINST 40 PR OPERTIES OWNED BY ASSESSEE GROUP. THE AO MENTIONED IN THIS PARA THAT: - A) THE PERSONS WHO WROTE THE SAME CAN BETTER EXPLAI N THIS. ADMITTEDLY SHRI PAWAN LASHKARY CAN BETTER EXPLAIN THIS PAPER B ECAUSE THIS PAPER WAS WRITTEN BY HIM AND HE EXPLAINED THE SAME. BUT T HE LD AO REJECTED THE EXPLANATION WITHOUT HAVING ANY POSITIV E EVIDENCE AGAINST THE EXPLANATION. SHE REJECTED THE EXPLANATI ON MERELY ON SURMISES AND CONJECTURES. NO ANY EVIDENCE WAS BROUG HT ON RECORD TO SHOW THAT THE EXPLANATION OF THE ASSESSEE IS WRONG. B) FURTHER, THE LD AO HAS PRESUMED THAT THE 4 TH COLUMN OF THIS PAPERS SHOWS THE COST OF PROPERTIES AS ON 31.03.2007 BUT I F THE LAST COLUMN OF SEIZED PAPERS IS COST OF LAND THAN WHAT IMPLIES FIGURES MENTIONED IN COLUMN 1 AND 3-THIS HAS NOT BEEN EXPLAINED BY TH E LD AO. IN THIS REGARD WE HAVE MADE DETAILED SUBMISSION IN VIDE OUR LETTER DATED 28/04/2011. IT IS WELL SETTLED PRINCIPAL THAT BEFOR E DECODING/EXPLAINING ANY PAPER THE COMPLETE STORY BE HIND THAT PAPER SHOULD BE EXPLAINED ON THE BASIS OF CONCRETE MATERI AL AND LOGICAL ARGUMENTS BUT THE SAME HAS NOT BEEN DONE BY LD. AO AND IT WAS PRESUMED THAT THE COST OF THE PROPERTIES WAS MENTIO NED UNDER COLUMN 4 OF THE SEIZED PAPER MERELY ON GUESS WORK A ND REJECTING THE EXPLANATION FILED BY THE ASSESSEE. 42 C) FROM THE INCOME TAX RETURN OF, SEIZED MATERIAL A ND STATEMENT OF SHRI PAWAN LASHKARY NO CONCLUSION CAN BE DRAWN ABOUT THE NOTING ON THIS SEIZED PAPER, THEREFORE THE PRESUMPTION TAKEN BY TH E AO REGARDING THIS PAPER DOES NOT HAVE ANY BASIS. D) IN THE SAME PARA THE LD. AO MENTIONED THAT THE A SSESSEE FAILED TO FURNISH THE EVIDENCE TO PROVE THAT THE SAID PAPER S HOWS THAT ENTRIES INTO A SUPPOSED JOINT VENTURE WITH SOME UNKNOWN PAR TY. IN FACT THIS SEIZED PAPER IS A ROUGH NOTING AND THE ASSESSEE HAS EXPLAINED EACH AND EVERY ENTRY AND SINCE THE DEAL WAS NOT FINALIZE D, NO EVIDENCE IN SUPPORT OF THE ENTRIES CAN BE FURNISHED. THE ONUS U NDER SECTION 69 IS ON THE AO TO PROVE THE INVESTMENT. THEREFORE, HERE THE ONUS WAS ON THE LD AO TO PROVE BY POSITIVE EVIDENCE THAT THE AS SESSEE HAS MENTIONED COST OF THE PROPERTIES IN COLUMN 4 OF THE SEIZED PAPER AND THE ASSESSEES EXPLANATION IS WRONG. IN THE CASE OF THE ASSESSEE, THE LD AO HAS NOT BROUGHT ANY DOCUMENT OR MATERIAL TO P ROVE THAT THE COST IS MENTIONED IN COLUMN 4 OF THE SEIZED PAPER. THE ONUS OF THE LD AO CANNOT STAND DISCHARGED MERELY REJECTING THE EXP LANATION OF THE ASSESSEE. THE LD AO HAD VAST STATUTORY POWER TO MAK E INQUIRIES FROM THE SELLER OF THE LAND OR FROM OTHER PERSONS BUT IN STEAD OF MAKING ANY INQUIRY OR BRINGING ANY POSITIVE EVIDENCE AGAINST T HE ASSESSEE, SHE REJECTED THE EXPLANATION OF THE ASSESSEE MERELY ON SURMISES AND CONJECTURES. FURTHER, THE PREPONDERANCE OF PROBABIL ITIES IS ALSO IN FAVOUR OF THE ASSESSEE. THERE ARE LOTS OF EMAILS IN THE SEIZURE (PB PAGE 35 TO 44) FROM DIFFERENT PARTIES AND IN SOME O F THE MAILS THERE IS PROPOSAL OF JOINT VENTURE ALSO. FURTHER SOME PRO POSAL COME TO ASSESSEE ON TELEPHONES/THROUGH BROKERS/DIRECTLY DIS CUSSION WITH PARTIES FOR WHICH NO DIRECT EVIDENCE CAN BE SUBMITT ED. FURTHER THE SEIZED PAPER 73 TO 76 OF ANNEXURE A-42 (PB PAGE 27 TO 31) IS ALSO IN RESPECT OF JOINT VENTURE FOR THE SAME LAND WHICH AL SO PROVES THAT THE ASSESSEE GROUP WAS ALSO INTERESTED IN JOINT VENTURE . ALL THESE MATERIALS PROVE THAT THE ASSESSEE GROUP WAS INTERES TED IN JOINT VENTURE ALSO ON THE SAME LAND AND THE SAME SUPPORTS THE EXPLANATION GIVEN BY ASSESSEE REGARDING THE SEIZED PAPER UNDER QUESTION. 4.4. IN PARA 4 THE AO COMMENTED REGARDING STATEME NT RECORDED AT THE TIME OF SEARCH. IN THIS REGARD THIS IS TO SUBMI T THAT THE STATEMENT IN QUESTION WAS RECORDED ON 17.11.2006 BY DDIT-III, JAIPUR DURING POST SEARCH INVESTIGATION WHERE NO PANCHES/WITNESS WERE AVAILABLE. FURTHER SHRI PAWAN LASHKARY NEVER CLAIMED THAT THE STATEMENT WAS GIVEN UNDER PRESSURE. HE SIMPLY SAID THAT AT THE TI ME HE WAS CONFUSED OVER THE CONTENTS OF THE SEIZED PAPERS BEC AUSE THE SEIZED PAPER IS NOT A SPEAKING PAPER AND HE WAS NOT GIVEN THE PHOTOCOPY OF ALL THE SEIZED DOCUMENTS AND DUE TO THIS HE COULD N OT RECOLLECT HIS MEMORY AND CORRECTS FACTS COULD NOT BE STATED BEFOR E THE DDIT. FURTHER MOST, THE ASSESSING OFFICE AS WELL AS THE A SSESSEE BOTH ARE 43 ADMITTING THAT THE STATEMENT BEFORE THE DDIT OVER T HIS SEIZED PAPER WAS NOT CORRECT AND NO CONCLUSION CAN BE DRAWN FROM THE STATEMENT. THEREFORE, NO ADVERSE INFERENCE CAN BE DRAWN MERELY REJECTING A STATEMENT. 4.5. IN THE PARA 5 THE AO COMMENTED REGARDING PL ACE OF SEIZURE OF PAPER. IN THIS REGARD WE SUBMIT THAT THE SUBMISS ION OF THE ASSESSEE ON THIS ISSUE WAS ONLY TO BRING CORRECT FACTS BEFOR E THE APPELLATE AUTHORITY. THE REASON BEING THAT THE LD AO MENTIONE D IN THE ASSESSMENT ORDER THAT THIS PAPER WAS SEIZED FROM TH E POSSESSION OF THE ASSESSEE COMPANY. THIS STATEMENT OF THE LD AO I S ASSESSMENT ORDER WAS FACTUALLY WRONG AS THIS PAPER WAS NOT SEI ZED FROM THE PREMISES OF THE ASSESSEE COMPANY. IN THE SAME PARA IT IS MENTIONED BY AO THAT THE A SSESSEE COMPANY NOT FURNISHED ANY EVIDENCE IN REGARD THE AVERMENT T HAT THE AMOUNT OF RS. 13,000/- REFLECTS THE ASKING PRICE AND NOT THE MARKET PRICE FROM SOME TOTALLY UNKNOWN PROSPECTIVE BUYER. IN THIS REG ARD WE SUBMIT THAT THIS PRICE IS WRITTEN IN REPLY OF AN E-MAIL OF A PROPOSAL (PB PAGE 35) WHICH SHOWS THAT THE SAME IS ASKING PRICE NOT A MARKET PRICE. HAD THIS MEAN A MARKET PRICE OR A FAVOURABLE PROPOS AL FROM THE BUYERS SIDE, THAN THIS DEAL WOULD HAVE BEEN FINALI ZED. SINCE THE DEAL WAS NOT FINALIZED ON THIS RATE, THIS IS SUFFICIENT TO SHOW THAT THIS WAS AN ASKING PRICE. THE ASKING PRICE ALWAYS DIFFER FR OM MARKET PRICE AND THE VARY PARTY TO PARTY, TIME TO TIME, PLACE T O PLACE. FURTHER IF IT IS PRESUMED THAT THIS IS MARKET PRICE OF LAND STILL IT DOES NOT MATTER IN THE CASE OF THE ASSESSEE BECAUSE IN THE CASE OF ASS ESSEE THE ISSUE IS REGARDING UP-FRONT PRICE TO BE RECEIVED IN CASE OF JOINT VENTURE AND THE SAME CANNOT BE REMAIN SAME IN EACH CASE. THE PR ICE AND SHARING RATIO DEPENDS ON SEVERAL FACTORS SUCH AS REPUTATION OF DEVELOPER, NATURE AND QUALITY OF DEVELOPMENT WORK TO BE CARRIE D OUT BY THE DEVELOPER, INVOLVEMENT OF INVESTMENT BY DEVELOPER, EXPECTED PROFIT FROM THE SHARE RECEIVED BY THE OWNED IN BUILT UP AR EA, PERIOD OF COMPLETION OF PROJECT, SIZE OF PROJECT, EXPECTED FA R FROM JDA, EXPECTED AVAILABILITY OF HEIGHTS ETC. FURTHER, THIS MAY ALSO BE SEEN FROM THE FACT THAT T HE UPFRONT PRICE OFFERED BY A PROSPECTIVE BUYER (EMAIL) IN RESPECT O F PUSHP GARDEN SCHEME WAS RS. 4,55,88,400/- AND THE FIGURE 400 MEN TIONED IN THE COLUMN 4 OF THE SEIZED PAPER AGAINST THE NAME PUSHP GARDEN, THIS CLEARLY SHOWS THAT FIGURE MENTIONED IN COLUMN 4 OF THE SEIZED PAPER 37 WAS AN OFFER OF UPFRONT PRICE OF THE SAME LAND F ROM ANOTHER PROSPECTIVE BUYER. AS REGARD BIG DIFFERENCE IN THE UPFRONT PRICE OF RS. 7,41,39,600/- MENTIONED ON THE SEIZED PAGE 74 (PB PAGE 30) AND FIGURE 330 MENTIONED ON SEIZED PAGE 37 (PB PAGE 36) IN RESPECT OF BHAVGARH, WE SUBMIT THAT UPFRONT PRICE OF RS. 7,41, 39,600/- WAS 44 CALCULATED FOR THE WHOLE LAND I.E. 61783 SY YARDS ( WHICH INCLUDES THE LAND UNDER INTERNAL ROADS) AS CLEAR FROM THE CA LCULATION GIVEN ON SEIZED PAPER 77 (PB PAGE 27), WHEREAS THIS SCHEME CONSISTS THREE PLOTS VIZ PLOT NO 1 MEASURING 23217.53 SY PLOT NO 2 MEASURING 32436.84 SY AND PLOT NO 3 MEASURING 2987.41 SY. THE OFFER FROM THE BUYER (UNDER EMAIL) WAS FOR THE WHOLE LAND WHER EAS THE OFFER FROM THE ANOTHER BUYER (FIGURE WRITTEN IN SEIZED PA PER PAGE 37) WAS ONLY FOR ONE PLOT MEASURING 23217.53. THIS WAS THE REASON OF BIG DIFFERENCE IN BETWEEN 74139600 AND 330 4.6. IN THE PARA 6 THE LD AO MENTIONED THAT THE C ASE LAW CITED IN WRITTEN SUBMISSION OF ASSESSEE ARE MOUNTED ON DIFFE RENT FACTS AND CIRCUMSTANCES WHICH ARE WHOLLY DIFFERENT FROM THOSE OF THE INSTANT CASE OF THE ASSESSEE COMPANY AND SUCH RATIO NOT APP LY IN THE INSTANT CASE. IN THIS REGARD WE SUBMIT THAT THE LD AO HAS N OT DIFFERENTIATED THE ASSESSEES CASE BY COMPARING THE FACTS BUT GENE RAL REMARKS WAS MADE. IN FACT, THE RATIO LAID DOWN IN THE CASES CIT ED BY THE ASSESSEE ARE APPLICABLE TO THE CASE OF THE ASSESSEE AS THE F ACTS AND CIRCUMSTANCES OF THESE CASES ARE THE SIMILAR TO THE CASE OF THE ASSESSEE. THEREAFTER, LD. CIT (A) AFTER DISCUSSING THE ISSUE IN DETAIL AND TAKING INTO CONSIDERATION VARIOUS CASE LAWS, HELD THAT ADDITION MADE BY ASSES SING OFFICER IS WITHOUT ANY SUBSTANCE AS THE SAME IS ON ASSUMPTION AND PRESUMPTION. ACCO RDINGLY, THE ENTIRE ADDITION MADE BY ASSESSING OFFICER WAS DELETED BY LD. CIT (A). 11. NOW THE DEPARTMENT IS IN APPEAL HERE BEFORE THE TRIBUNAL. 12. THE LD. D/R FIRSTLY PLACED STRONG RELIANCE ON T HE ORDER OF THE ASSESSING OFFICER. BRIEF FACTS OF THE CASE WERE ALSO EXPLAINED. IT WA S FURTHER SUBMITTED THAT VALUABLE PIECE OF PAPER WAS FOUND AND FROM THE CONTENTS OF THAT PA PER IT WAS CLEARLY ESTABLISHED THAT ASSESSEE HAD PAID CASH OVER AND ABOVE THE AMOUNT RE CORDED IN THE BOOKS OF ACCOUNT FOR PURCHASE OF THIS LAND. ATTENTION OF THE BENCH WAS DRAWN ON COLUMN 4 OF THE SEIZED PAPER PAGE 37 OF ANNEXURE A-57, COPY OF WHICH IS PLACED O N RECORD. IN COLUMN 4, A FIGURE OF 45 330 IS MENTIONED. THIS 330 FIGURE IS MENTIONED BY O MITTING FIGURE 50 AND THIS FACT HAS BEEN ADMITTED BY THE POWER OF ATTORNEY-HOLDER THAT FIGURE 50 IS OMITTED. 330 FIGURE IS NOTHING BUT THE COST OF PURCHASE OF LAND FROM THE S ELLER. THE ASSESSING OFFICER HAS EXAMINED THE ISSUE AT GREAT LENGTH. STATEMENT OF P OWER OF ATTORNEY HOLDER WAS ALSO RECORDED WHO HAS GIVEN STATEMENT AT DIFFERENT POINT OF TIME, THEREFORE, HIS STATEMENT WAS BRUSHED ASIDE BY THE ASSESSING OFFICER RIGHTLY. T HEREAFTER, AFTER ANALYZING THE SEIZED PAPER, THE ASSESSING OFFICER CONCLUDED THAT THE FIG URE OF 330 INDICATES RS. 3.3 CRORE AND ASSESSEE HAS GIVEN THE PAYMENT TO THE SELLER TO THE TUNE OF RS. 1.25 CRORE ONLY AND, THEREFORE, THE REMAINING FIGURE WAS TREATED AS UNAC COUNTED INVESTMENT AND, THEREFORE, WAS RIGHTLY ADDED UNDER SECTION 69B. ATTENTION OF THE BENCH WAS DRAWN ON VARIOUS PAGES OF THE PAPER BOOK I.E. PAGE 36, 59 TO 61 AND ALSO PAGE S 32 TO 35. THE LD. D/R ALSO FILED CERTAIN ADDITIONAL SUPPORTING EVIDENCES AND IN RESP ECT TO ADDITIONAL SUPPORTING EVIDENCES, IT WAS SUBMITTED THAT THESE ADDITIONAL SUPPORTING E VIDENCES ARE CRUCIAL TO DECIDE THE ISSUE. IT WAS ALSO SUBMITTED THAT THEY COULD NOT BE CONSID ERED BY THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS OR THEY COULD BE FILED B EFORE LD. CIT (A) DURING THE APPELLATE PROCEEDINGS INADVERTENTLY. A BRIEF WRITTEN NOTE DA TED 18.4.2012 WAS ALSO FILED BY LD. CIT D/R, COPY OF WHICH IS PLACED ON RECORD. 13. ON THE OTHER HAND, THE LD. A/R OF THE ASSESSEE FIRSTLY PLACED RELIANCE ON THE ORDER OF LD. CIT (A). FINDINGS OF LD. CIT (A) WERE ALSO EXPLAINED. ATTENTION OF THE BENCH WAS DRAWN ON COPY OF DETAILED WRITTEN SUBMISSIONS W HICH ARE PLACED ON RECORD. 13.1. IN RESPECT TO ADMITTING THE ADDITIONAL EVIDEN CES, IT WAS SUBMITTED THAT THEY SHOULD NOT BE ADMITTED AS THOSE VERY EVIDENCES WERE AVAILA BLE WITH THE ASSESSING OFFICER AT THE TIME OF ASSESSMENT PROCEEDINGS AS THESE EVIDENCES A RE NOTHING BUT COPIES OF STATEMENT 46 RECORDED AT THE BACK OF THE ASSESSEE WITHOUT CONFRO NTING TO THE ASSESSEE. IT WAS SUBMITTED THAT AS PER THESE PAPERS, THE ADDITION COMES TO A L OWER FIGURE WHEREAS ASSESSING OFFICER HAS MADE THE ADDITION MORE THAN COMPRISED. THEREFO RE, FOR THIS REASON STATEMENT OF CERTAIN PERSONS WERE NOT TAKEN INTO CONSIDERATION B Y THE ASSESSING OFFICER KNOWINGLY. NOW THE DEPARTMENT CANNOT MAKE A FRESH CASE BY FILI NG THESE ADDITIONAL EVIDENCES. A WRITTEN NOTE WAS ALSO FILED IN RESPECT TO THESE ADD ITIONAL EVIDENCES OBJECTING THAT THEY SHOULD NOT BE ADMITTED. RELIANCE HAS BEEN PLACED O N VARIOUS CASES MENTIONED IN THE BRIEF NOTE. 14. WE HAVE HEARD RIVAL SUBMISSIONS AND CONSIDERED THEM CAREFULLY. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PARTIES, WE FIND THAT LD. CIT (A) HAS EXAMINED THE ISSUE AT GREAT LENGTH. HE HAS TAKEN ALL THE OBJ ECTIONS OF THE ASSESSING OFFICER RAISED IN THE ASSESSMENT ORDER AS WELL AS RAISED THROUGH REMA ND REPORT. THE DETAILED WRITTEN SUBMISSIONS AS WELL AS RE-JOINDER FILED ON BEHALF O F THE ASSESSEE WERE ALSO TAKEN INTO CONSIDERATION ALONG WITH VARIOUS CASE LAWS RELIED U PON BY ASSESSING OFFICER AS WELL AS BY LD. A/R OF THE ASSESSEE THROUGH HIS WRITTEN SUBMISS IONS AND THEN HE HAS CONCLUDED THAT ADDITION MADE BY ASSESSING OFFICER WAS WITHOUT ANY CORROBORATIVE MATERIAL OR EVIDENCES, THEREFORE, ON THE BASIS OF SURMISES AND ASSUMPTION, NO ADDITION UNDER SECTION 69B IS POSSIBLE, ACCORDINGLY ENTIRE ADDITION HAS BEEN DELE TED. THE FINDINGS OF LD. CIT (A) HAVE BEEN RECORDED IN PARAS 5.1 TO 5.9 AT PAGES 38 TO 48 OF HIS ORDER WHICH ARE AS UNDER :- 5.1 I HAVE CAREFULLY CONSIDERED THE WRITTEN SUBMIS SION AND PAPER BOOK FILED BY THE AR OF THE ASSESSEE, ASSESSMENT OR DER, REMAND REPORT, THE MATERIAL AVAILABLE ON RECORD AND CASES CITIED B Y BOTH THE PARTIES. ON PERUSAL OF ASSESSMENT ORDER, I FIND THAT THE AO HAS MADE THE ADDITION OF RS. 2,00,19,492/- BY APPLYING THE PROVISIONS OF SEC TION 69B OF INCOME 47 TAX ACT. FROM THE ASSESSMENT ORDER, I FIND THAT THE AO HAS FINALLY MADE THE ADDITION ON THE BASIS OF NOTING AVAILABLE ON T HE SEIZED PAGE 37 OF EXHIBIT A-57, SEIZED FROM 73-74, TALKATORA JAIPUR. THE AO HAS REFERRED ANOTHER SEIZED PAPERS PAGE 73 TO 77 OF ANNEXURE A-4 0 SEIZED FROM 73- 74 TAL KATORA TO SUPPORT HER VIEW THAT THE MARKET V ALUE OF THE PROPERTIES IS NOT MENTIONED ON THE SEIZED PAGE 37 OF EXHIBIT A-57. THE AO FURTHER MENTIONED THAT THE SHRI PAWAN LASHKARY HAS NOT MADE CORRECT STATEMENT IN THE POST SEARCH INQUIRY, WHEREIN HE ST ATED THAT AREA OF THE LAND IS MENTIONED UNDER COLUMN 4 OF THE PAGE 37 OF EXHIBIT A-57. THE AO MENTIONED THAT SH. PAWAN LASHKARY HAS FILED SWOR N AFFIDAVIT DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS EXPLAINING THE CONTENTS OF THE ABOVE REFERRED SEIZED PAPER WHEREIN IT EXPLAINED TH AT THE MARKET VALUE OF THE LAND FOR THE JOINT VENTURE PURPOSE WAS MENTIONE D OVER THE SAID SEIZED PAPER. THE AO MENTIONED THAT THIS PROVES TO BE WRON G BECAUSE THE MARKET VALUE OF THE LAND WAS 37.06 CRORES NOT 3.3 C RORES. THE AO MENTIONED THAT THE WIDE VARIATION IN SHARE OF ASSES SEE GROUP IN THE JOINT VENTURE SHOWS THAT THE ASSESSEE EXPLANATION AS REGA RD FIGURE MENTIONED IN COLUMN 1 OF SEIZED PAPER 37 OF ANN A-57 IS ALSO NOT CORRECT. 5.2 I HAVE CAREFULLY EXAMINED THE ABOVE REFERRED SEIZED PAPER. NO NARRATION IS MENTIONED OVER THE SEIZED PAGE 37 O F A-57 TO ASCERTAIN WHETHER COST IS MENTIONED OR MARKET VALUE IS MENTIO NED OR SOME OTHER VALUE IS MENTIONED. ANY DATE OR EVEN THE MONTH OR EVEN THE YEAR IS NOT AT ALL MENTIONED SO AS TO ARRIVE AT DEFINITE CONCLU SION WHETHER IT IS COST OR MARKET VALUE OR SOME OTHER VALUE ON PARTICULAR D ATE/MONTH/TIME. THE AO HAVE TRIED TO NEGATE THE ARGUMENT OF A.R. BY OBS ERVING THAT THE MARKET VALUE IS NOT MENTIONED IN THE COLUMN 4 OF TH E IMPUGNED SEIZED PAPER, THEREFORE, AS PER THE A.O, COST MUST HAVE BE EN MENTIONED IN COLUMN NO. 4. BUT SHE FAILED TO PROVE BY POSITIVE E VIDENCE THAT THE COST IS MENTIONED IN COLUMN 4 OF THE SEIZED PAPER. FURTH ER, THE AO FAILED TO EXPLAIN THE NEXUS OF THE FIGURES MENTIONED IN COLUM N 1 AND 3 WITH REFERENCE TO FIGURE OF THE ALLEGED COST MENTIONED I N COLUMN 4 OF THE 48 IMPUGNED SEIZED PAPER. IN COLUMN 1, THE FIGURE 26. 66 IS MENTIONED AND FIGURE 166 IS MENTIONED IN COLUMN 3 AGAINST BHAVGAR H. THE AO HERSELF HAS HELD THAT FIGURE 26.66 DOES NOT INDICATE COST O R MARKET VALUE PER BIGHA OF THE LAND. HOWEVER, THE FIGURE 26.66 CANNOT BE A MEANINGLESS FIGURE,( FOR WHICH A.O. HAS NOT GIVEN ANY EXPLANATI ON) PARTICULARLY WHEN IT IS WRITTEN WITH REFERENCE TO FIGURE 330 MENTIONE D IN COLUMN 4 OF THE IMPUGNED SEIZED PAPER. 5.3 I HAVE ALSO CAREFULLY EXAMINED OTHER SEIZED P APERS OF EXHIBIT A-24 AND A-40 REFERRED BY THE AO IN ASSESSMENT ORDE R. THE SEIZED PAGE 142 OF ANNEXURE A-24 IS AN E-MAIL CORRESPONDENCE BE TWEEN SHRI G.K. SHARMA AND MURARI@LASHKARI.COM WHEREIN THE LAND RATE AND INTEREST IN JOINT VENTURE WAS ASKED TO SEND AND REPLY WAS GIVEN . OVER THIS PAPER FIGURE 13000- 17534 AND 6000-62000 IS HAND WRITTEN WHICH INDICATES THAT FIRST FIGURE IS LAND RATE QUOTATION AND SECOND FIGURE IS AREA OF THE LAND. IT APPEARS THAT THE ASSESSEE GROUP HAS QUOTED RS. 6000/- PER SQ YARD FOR 62000 SQ. YARD LAND IN BHAVGARH. THEREFORE THIS PAPER DOES NOT INDICATE THE COST OF THE LAND BUT IT IS THE QUOTATI ON FOR THE LAND RATE FOR SELLING PURPOSE. THE SEIZED PAPER 73 TO 77 OF ANNE XURE A-40 IS THE PROJECTION FOR THE JOINT VENTURE PREPARED BY SOME T HIRD PARTY DEVELOPER AND APPARENTLY GIVEN TO SH. LASKHKARY AS PROPOSAL F OR DISCUSSION. ON PAGE 76-77 OF ANN A-40 WORKING FOR LAND AREA, BUILT UP AREA, COST OF LAND, COST OF BUILDING, MARKETING EXPENSES, ADMINIS TRATIVE EXPENSES ETC ARE ESTIMATED/PROJECTED FOR JOINT VENTURE. AT BOTT OM OF THE PAGE, 20% IS MENTIONED AGAINST COST % TO BE PAID UPFRONT TO OWN ER. THE TOTAL LAND AREA IS TAKEN 61783 SQ YARDS AND LAND COST IS TAKEN RS. 6000/- PER SQ YARDS AND TOTAL COST OF THE LAND IS TAKEN RS. 37,06 ,98,000/- ON THIS SEIZED PAPER. ON PAGE 75 OF THE SEIZED ANNEXURE A-40 PROJ ECTION IS MADE FOR INPUTS, COSTINGS AND REVENUES. ON PAGE 74 OF THE SE IZED ANNEXURE A-40 PROJECTION WAS MADE FOR FUND FLOW ASSUMING ALL THE FLATS ARE SOLD WITHIN 6 MONTHS . IN THIS PAPER LAND EXPENSES ARE TAKEN RS. 7413960 0/- AS OUTFLOWS OF FUND IN 1 ST MONTH OF 1 ST YEAR . RS. 7,41,39,600 IS EXACTLY 49 20% OF RS. 37,06,98,000/-. THEREFORE, THE FIGURE R S. 37,06,98,000/- IS FULL VALUE OF THE LAND ESTIMATED FOR JOINT VENTURE AND THE FIGURE 7,41,39,600/- IS THE AMOUNT TO BE PAID TO THE LAND OWNER AGAINST THE JOINT VENTURE AS INDICATED BY THE ABOVE SAID SEIZED PAPER S. OBVIOUSLY THESE PAPERS ARE TOTALLY PROJECTIONS/ ESTIMATIONS OF THE JOINT VENTURE, WHICH HAVE BEEN PREPARED BY SOME THIRD PARTY DEVELOPERS. THEREFORE, THE COST OF THE LAND IN THE HANDS OF THE LAND OWNER CANNOT B E VISUALIZED FROM THESE SEIZED PAPERS. STATEMENTS OF SHRI PAWAN LASHK ARY RECORDED DURING THE POST SEARCH INQUIRY HAVE BEEN RIGHTLY REJECTED BY THE AO AND ARE OF NO HELP FOR THE ASSESSING OFFICER. DURING THE COURS E OF THE ASSESSMENT, THE ASSESSEE FILED SWORN AFFIDAVIT OF SHRI PAWAN LA SHKARY AND RELEVANT PARA OF THE AFFIDAVIT IS AS UNDER:- E) WE PURCHASED THE AGRICULTURAL LAND AN D MADE FURTHER EXERCISED FOR 90B PROCEEDINGS, CONVERSION AND APPRO VAL OF THE PROJECTS. THIS AND TIME-SPAN RESULTED SUBSTANTIAL I NCREASE IN THE MARKET RATE OF THE LAND. WE ESTIMATED THE MARKET R ATE OF EACH DEVELOPED LAND (OFFERED FOR NEGOTIATION FOR JOINT V ENTURE/ COLLABORATION) AT THE TIME OF NEGOTIATION AND SUCH ESTIMATED MARKET VALUE OF THE LAND WAS MENTIONED IN COLUMN NO 4 OF T HE SAID SEIZED PAPER. WE OFFERED THE PROSPECTIVE PARTY THAT OUR CA PITAL ACCOUNT SHOULD BE CREDITED BY THIS AMOUNT AGAINST THE CAPIT AL CONTRIBUTION OF LAND FOR THE JOINT VENTURE/COLLABORATION, IF THE JO INT VENTURE/COLLABORATION IS MATERIALIZED. THE FIGURE IS WRITTEN IN SHORT AT THE TIME OF NEGOTIATION BY OMITTING FIVE ZERO. 5.4 FROM THE ABOVE AFFIDAVIT, THE ASSESSEE WANTED TO EXPLAIN THAT MARKET VALUE OF THE LAND WAS ESTIMATED FOR THE JOIN T VENTURE AND SUCH JOINT VENTURE SHARE OF ESTIMATED UPFRONT AMOUNT OF MARKET VALUE OF THE LAND WAS MENTIONED IN COLUMN 4 OF THE SEIZED PAPER. THE ASSESSEE FURTHER MENTIONED IN THE SAME PARA THAT ITS CAPITAL ACCOUNT SHOULD BE CREDITED BY THIS AMOUNT AGAINST THE CAPITAL CONTRIB UTION OF THE LAND FOR JOINT VENTURE. IF WE READ THIS PARA OF THE AFFIDAVI T WITH REFERENCE TO FIGURE MENTIONED IN SEIZED PAGE 77/76 AND PAGE 74 OF ANNEX URE A-40, WE FIND THAT FULL ESTIMATED MARKET VALUE OF THE LAND WAS 3 7.06 CRORES AND RS. 7.41 CRORES WAS PAYABLE UPFRONT TO THE LAND OWNER AGAINST THE LAND 50 OFFERED FOR JOINT VENTURE. (OF COURSE, IF THE JOINT VENTURE PROJECT IS CRYSTALISED). IF WE READ THE ABOVE PARA OF THE AFFID AVIT CAREFULLY, WE FIND THAT THE ASSESSEE WANTS TO SAY THE MARKET VALUE OF THE L AND TO BE CREDITED IN ITS ACCOUNT FOR JOINT VENTURE PURPOSE, WHICH CANNOT BE FULL VALUE OF THE LAND IN JOINT VENTURE CASES. IT IS COMMON PRACTICE OF THE TRADE THAT THE LAND OWNER IS PAID PART AMOUNT OF THE VALUE OF THE LAND IN CHEQUE/CASH AND BALANCE AGAINST THE LAND VALUE IS PAYABLE BY SH ARING THE CONSTRUCTION AREA IN BETWEEN THE DEVELOPER AND LAND OWNER. 5.5 WITHOUT PREJUDICE TO ABOVE, IT MAY BE MENTIONE D THAT ASSESSMENT PROCEEDINGS IN THE CASE OF APPELLANT M/S COUNTRYWIDE BUILDESTATE PVT. LTD AS WELL AS ANOTHER COMPANY OF THE GROUP M/S RISING BUILDESTATE PVT. LTD WERE GOING ON ALMOST SIMULTANE OUSLY. ALMOST SAME OR SIMILAR NATURE OF SEIZED PAGES HAS BEEN REFERRED DURING THE COURSE OF ASSESSMENT PROCEEDINGS IN BOTH CASES FOR THE PURPOS E OF SHOW CAUSE. IN THE OPPORTUNITY GIVEN BY WAY OF ORDER SHEET NOTING IN THE CASE OF APPELLANT M/S COUNTRYWIDE BUILDESTATE PVT. LTD., TH E A.O. HAS REFERRED TO E-MAILS DISCUSSED ABOVE AND PAGE 74 OF A-40 MENT IONING FIGURE OF RS. 7,41,39,600/- IN RESPECT OF APPELLANT AS WELL AS F IGURE OF RS. 4,55,88,400/- MENTIONED ON PAGE 159 OF ANN. A-24 IN RESPECT OF M/S RISING BUILDESTATE PVT. LTD. (THE CONTENTS OF ORDE R SHEET GIVING SHOW CAUSE IN THE CASE OF ANOTHER COMPANY NAMELY M/S R ISING BUILDESTATE PVT LTD AND THE APPELLANT ARE SAME EXCEPT THE CHAN GE IN HEADING). THOUGH IN THIS ORDER SHEET IN THE CASE OF APPELLANT , INADVERTENTLY ADDITION OF RS. 3,22,64,977/- (RS. 4,55,88,400/- - RS. 1,33,23,423/-) HAS BEEN PROPOSED, WHICH IS ACTUALLY PROPOSED IN THE CA SE OF M/S RISING BUILDESTATE, BUT IN SUBSTANCE, THE A.O. OBVIOUSLY W ANTED TO PROPOSE ADDITION CONSIDERING TOTAL COST AT RS. 7,41,39,600/ - IN THE CASE OF APPELLANT NAMELY M/S COUNTRYWIDE BUILDESTATE PVT. L TD. HOWEVER, AFTER CONSIDERING THE VARIOUS REPLIES OF THESE NOTICES, T HE A.O. WAS SATISFIED THAT AMOUNT OF. RS. 7,41,39,600/- IS NOT THE COST O F THE LAND TO THE 51 APPELLANT BUT IT IS 20% UPFRONT CHARGES OF THE ESTI MATED PROPOSED VALUE OF LAND REQUIRED TO BE PAID TO LAND OWNER ,AS ESTIM ATED BY SOME DEVELOPER FOR THE PROPOSED PROJECT OF JOINT VENTURE ON THIS LAND OF APPELLANT. A.O. HAS MENTIONED THIS FACT OF CONTENTI ON OF THE APPELLANT ON THIS ISSUE BEING CORRECT AT PARA 8 OF THE ASSESSMEN T ORDER. (HOWEVER, SIMULTANEOUSLY, THE A.O. HAS STATED THAT IT SHATTER S THE EXPLANATION OF THE ASSESSEE REGARDING PAGE 37 OF ANN. A-57 GIVEN DURIN G THE COURSE OF SEARCH THAT IN COLUMN NO. 4 CODING WAS DONE IN TWO ZEROS AND FIGURE REPRESENTED THE LAND AREA IN SQ. YDS. THIS OBSERVAT ION OF THE A.O. IS CORRECT). 5.6 REGARDING VARIATION IN THE FIGURE OF 330 MENTIONED IN COLUMN NO. 4 TO BE TREATED AS UPFRONT AMOUNT RECEIVABLE AS PART OF SOME JOINT VENTURE WITH THE OTHER ESTIMATED AND PROJECTED CALC ULATION OF SUCH FIGURE OF SUCH OTHER JOINT VENTURE AT RS. 7,41,39,600/- ME NTIONED ON PAGE 74 OF ANN. A-40, THE APPELLANT HAS FILED REPLY VIDE LETT ER DATED 11.12.2010 BEFORE THE A.O. THE RELEVANT PARA OF WHICH IS AS UNDER:- AS REGARD PAGE 37 OF EXHIBIT A-57 (SEIZED FROM 73- 75 TAL KATORA, JAIPUR), WE WOULD LIKE TO MENTION HERE THAT THIS PAGE WAS PREPARED AT DIFFERENT POINT OF TIME AT THE TIME OF NEGOTIATION WITH SOME OTHER PARTY AND SOME FIGURES/NOTINGS WERE WRITTEN O N THIS PAPER DURING THE DISCUSSION WITH SOME OTHER PARTY AND FIGURE MEN TIONED IN COLUMN NO 4 REPRESENTS TO AMOUNT OFFERED FOR CREDIT IN ASSESS EES CAPITAL ACCOUNT AGAINST THE LAND CONTRIBUTION BY THE ASSESSEE (OR SAY UPFRONT PRICE); IF THE JOINT VENTURE/COLLABORATION IS MADE ON THE SHAR ING BASIS MENTIONED IN COLUMN NO. 1. THE UPFRONT PRICE AND SHARING RATI O DEPENDS ON SEVERAL FACTORS SUCH AS REPUTATION OF DEVELOPER, NATURE AND QUALITY OF DEVELOPMENT WORK TO BE CARRIED OUT BY THE DEVELOPER , INVOLVEMENT OF INVESTMENT BY DEVELOPER, EXPECTED PROFIT FROM THE S HARE RECEIVED BY THE OWNER IN THE BUILT UP AREA, PERIOD OF COMPLETION O F PROJECT, SIZE OF PROJECT, EXPECTED FAR FROM JDA, EXPECTED AVAILABILI TY OF HEIGHT ETC. THUS, THE UPFRONT PRICE AND SHARING RATIO MAY VARY PERSON TO PERSON AND PROJECT TO PROJECT. THE APPELLANT HAS FURTHER EXPLAINED BEFOR E ME THE REASON OF VARIATION IN FIGURE OF 7,41,39,600 AND 330 AS UNDE R:- 52 AS REGARD DIFFERENCE IN THE UPFRONT PRICE OF RS. 7,41,39,600/- MENTIONED ON THE SEIZED PAGE 74 (PB PAGE 30) AND FIGURE 330 MENTIONED ON SEIZED PAGE 37 (PB PAGE 36) IN RESPECT OF BHAVGARH, WE SUBMIT THAT UPFRONT PRICE OF RS. 7,41,39,600/- WAS CALCULATED F OR THE WHOLE LAND I.E. 61783 SY YARDS (WHICH INCLUDES THE LAND UNDER INTER NAL ROADS) AS CLEAR FROM THE CALCULATION GIVEN ON SEIZED PAPER 77 (PB PAGE 27), WHEREAS THIS SCHEME CONSISTS THREE PLOTS VIZ PLOT NO 1 ME ASURING 23217.53 SY PLOT NO 2 MEASURING 32436.84 SY AND PLOT NO 3 MEASU RING 2987.41 SY. THE OFFER FROM THE BUYER (UNDER EMAIL) WAS FOR THE WHOLE LAND WHEREAS THE OFFER FROM ANOTHER BUYER (FIGURE WRITTE N IN SEIZED PAPER PAGE 37) WAS ONLY FOR ONE PLOT MEASURING 23217.53. THIS WAS THE REASON OF DIFFERENCE IN BETWEEN 74139600 AND 330. THE FACT THAT IN THE CASE OF BHAVGARH SCHEME OF THE APPELLANT COMPANY, THE JDA HAS ISSUED 3 DIFFERENT PATTAS FOR 3 PLOTS S EPARATELY, WAS FOUND VERIFIABLE AND CORRECT FROM THE RECORDS. ACCORDINGL Y, THE ARGUMENT OF OFFER FROM THE DEVELOPER MENTIONED ON SEIZED PAGE 3 7 OF PAGE 57 BEING FOR ONE PLOT, OUT OF THE THREE, LEADING TO DIFFEREN CE, CANNOT BE DISCARDED. 5.7 THE ABOVE EXPLANATION IS ALSO CORROBOR ATED WITH THE FIGURE OF 400 MENTIONED IN COLUMN 4 OF THE SEIZED PAPER 37 OF ANNEXURE A-57 AGAINST THE PUSHP GARDEN AND THE FIGURE OF 4,55,88, 400 MENTIONED IN SEIZED PAPER 159 OF ANNEXURE A-24 WHICH IS FUND FLO W PROJECTION FOR PUSHP GARDEN LAND WHEREIN FIGURE 4,55,88,400 REPRES ENTS THE CASH OUTFLOW FOR LAND OWNER AGAINST THE COST OF LAND FOR THE JOINT VENTURE DEVELOPER. THE DIFFERENCE WAS EXPLAINED THAT NOTING ON PAGE 37 OF ANNEXURE A-57 WAS MADE WITH REFERENCE TO THE PROPOS AL OF JOINT VENTURE RECEIVED FROM A DIFFERENT PARTY, THEREFORE, THERE I S BOUND TO BE DIFFERENCE IN THE PROPOSAL GIVEN BY TWO DIFFERENT PARTIES, LEA DING TO DIFFERENCE IN THE AMOUNT. 5.8 IN THE CASE OF M/S RISING BUILDESTATE PVT. LTD , SIMILARLY THE ADDITION RELATABLE TO RS. 4,55,88,400/- REFERRED IN JOINT VENTURE PROJECT WAS PROPOSED IN THE THREE DIFFERENT SHOW CAUSE NOTI CES AND IT WAS ONLY AT THE LAST I.E AT THE TIME OF FOURTH OPPORTUNITY/ SHO W CAUSE THAT THE A.O., THEN PROPOSED DIFFERENT AMOUNT NAMELY RS. 4 CRORE A S COST OF THE LAND ON THE BASIS OF ENTRY IN COLUMN NO. 4 OF PAGE 37 OF AN N. A-57. SIMILAR IS 53 THE POSITION IN THE PRESENT CASE, I.E M/S COUNTRYWI DE BUILDESTATE. IN THE CASE OF M/S RISING BUILDESTATE, ON PERUSAL OF THE R EPLY OF THE APPELLANT AND OTHER RELEVANT DETAILS, IT WAS SEEN THAT EXPLAN ATION OF THE FIGURE 400 MENTIONED ON PAGE 37 OF ANN. A-57 SO GIVEN BY THE A PPELLANT WAS FOUND ACCEPTABLE THAT SAME REPRESENTS THE ESTIMATED UPFRO NT AMOUNT TO BE RECEIVED BY THE LAND OWNER IN RESPECT OF SOME PROPO SED PROJECT OF JOINT VENTURE. SAME WAS ALSO CLEAR FROM ANOTHER SPECIFIC PROPOSAL FOR SUCH PROJECT HAVING DETAILS ON PAGE 159 TO 161 OF ANN. A -24, WHEREIN UPFRONT PRICE IS SHOWN AT RS. 4.55 CRORE, WHICH HAS BEEN EF FECTIVELY ACCEPTED BY THE A.O.. THE VARIATION BETWEEN THE TWO FIGURES NA MELY 400 MENTIONED ON PAGE 37 OF ANN. A-57 AND RS. 4.55 CRORE AS PER P AGE NO. 159 TO 161 OF ANN. A-57 WAS EFFECTIVELY EXPLAINED BY THE APPEL LANT VIDE LETTER DATED 11.12.2010. (AS DISCUSSED AND OBSERVED IN THE APPE AL ORDER NO. 403/10- 11 IN THE CASE OF M/S RISING BUILDESTATE PVT. LTD). AFTER PERUSING THE RECORDS AND ANALYZING THE ARGUMENTS OF BOTH THE SID ES, IT WAS HELD IN THE APPEAL ORDER IN THE CASE OF M/S RISING BUILDESTATE THAT A.O. HAS NOT BROUGHT OUT ANY POSITIVE MATERIAL TO ESTABLISH THAT ENTRY IN COLUMN NO. 4 OF THE IMPUGNED SEIZED PAGE 37 OF ANN. A-57 REPRESE NTS COST AND HAS ALSO NOT GIVEN ANY CORRELATION OR JUSTIFICATION OR THE BASIS FOR TREATING THE ENTRIES IN COLUMN NO. 4 AS THE COST OF THE LAND. A. O. HAS MERELY REJECTED THE EXPLANATION OF THESE ENTRIES GIVEN BY THE APPEL LANT THAT THESE REPRESENT THE ESTIMATED UPFRONT CHARGES OF THE PROP OSAL OF JOINT VENTURE ON THESE LANDS AND AFTER REJECTING THE EXPLANATION, THE A.O. HAS JUST MENTIONED THAT THE FIGURE IN COLUMN 4 REPRESENTS TH E COST OF THE LAND. IT WAS FINALLY HELD THAT A.O. IS NOT JUSTIFIED IN MAKI NG ADDITION U/S 69 WITHOUT BRINGING POSITIVE EVIDENCE ON RECORD. THE F URTHER COMMON DISCUSSION IN THE AFORESAID APPEAL ORDER NO. 403/10 -11 IN THE CASE OF M/S RISING BUILDESTATE PVT. LTD, WHICH IS ALSO EQUALLY APPLICABLE TO THE PRESENT CASE OF THE APPELLANT I.E M/S COUNTRYWIDE B UIIDESTATE PVT. LTD IS REPRODUCED BELOW:- 54 5.8 THE OTHER POINT TO BE NOTED IS THAT THE APPELL ANT HAS ALSO GIVEN EXPLANATION OF ENTRIES IN COLUMN NO. 1 O F PAGE 37 OF A-57 DURING THE COURSE OF ASSESSMENT PROCEEDINGS THAT THE SAME IS THE PERCENTAGE SHARING IN THE PROPOSED JOIN T VENTURE. THE A.O. HAS DISBELIEVED THE EXPLANATION OF THE APP ELLANT ON THE GROUND THAT THE JOINT VENTURE SHARING IS FOUND TO BE HIGHLY VARYING. HOWEVER, THE A.R. HAS EVEN GIVEN EXPLANATI ON OF THESE VARYING % ALSO PARTICULARLY REGARDING JOINT S HARING BEING ONLY 18.75% IN SPORTS CITY, WHICH IS ON ACCOU NT OF THE FACT THAT THE SAID LAND WAS QUITE UNECONOMICAL HAVI NG LOW VALUE AS THE SAME WAS UNDER RIVER BED WHICH IS CLEA R FROM THE JAMBANDI, WHEREIN THE LAND WAS SHOWN AS KHATALI WHICH MEANS THE LAND NEAR RIVER BED AS IS CLEAR FROM THE DEFINITION OF THE KHATALI FURNISHED BY THE A.R. IN THE WRITT EN SUBMISSION. SIMILARLY, FOR HIGH SHARING RATIO OF 80 % IN R.R. FARM, THE A.R. HAS EXPLAINED THAT THIS WAS THE JOIN T VENTURE OF THE FARMHOUSE WHEREIN NOT MUCH OF INVESTMENT IS REQUIRED BY THE DEVELOPER AND IT IS MAINLY THE VALUE OF THE LAND AND ACCORDINGLY LAND OWNER WOULD HAVE THE MAIN AND MAJO R SHARE. THESE EXPLANATIONS SO GIVEN BY THE A.R. CANN OT BE JUST REJECTED AND ARE RATHER PLAUSIBLE. THUS IT IS CLEAR THAT EXPLANATION OF THE FIGURE IN COLUMN NO. 1 GIVEN BY A.R. IS NOT UN-ACCEPTABLE. EVEN FOR THE MOMENT AND FOR THE SAKE OF ARGUMENT, THE EXPLANATION OF COLUMN NO. 1, SO GIVEN BY THE APPELLANT IS NOT ACCEPTED TO BE CORRECT, AS WAS OBS ERVED BY THE A.O. IN THE ASSESSMENT ORDER, THEN ON THE OTHER HAND THEN IT IS NOTICED THAT THE A.O. HAS NOT BEEN ABLE TO GI VE ANY SORT OF EXPLANATION FOR THE FIGURE IN COLUMN NO. 1, WHIL E TRYING TO DECIPHER/DECODE THE ENTRIES ON THIS PAGE. THUS A.O. HAS NOT BEEN ABLE TO EXPLAIN ENTRIES IN COLUMN NO. 1 OF THE IMPUGNED PAGE AND ALSO COULD NOT CORRELATE THEM WITH OTHER E NTRIES ON 55 THIS PAGE. SIMILARLY, THE A.O. HAS TREATED THE EN TRY IN COLUMN NO. 4 AS THE COST PRICE OF THE LAND WITHOUT ANY CORRELATION OR JUSTIFICATION OR THE BASIS FOR THE S AME, AFTER JUST MERELY REJECTING THE EXPLANATION OF THESE ENTRIES G IVEN BY APPELLANT. 5.9 I AGREE WITH THE ARGUMENT OF THE LD. A. R THAT FOR MAKING ADDITION U/S 69 B, THE ONUS IS ON THE DEPARTMENT TO PROVE POSITIVELY THAT THE APPELLANT HAS MADE UNACCOUNTED INVESTMENT AND THIS ONUS CANNOT BE DISCHARGED MERELY BY REJECTING THE EXPLAN ATION GIVEN BY THE APPELLANT. SUCH ADDITION TO BE MADE U/S 69 B IS CON TRADISTINCT FROM THE CLAIM OF THE DEDUCTION OR ALLOWANCE MADE BY THE ASS ESSEE WHEREIN THE ADDITION CAN BE MADE IF THE EVIDENCE SO FURNISHED O R EXPLANATION SO GIVEN BY THE APPELLANT IS FOUND TO BE LACKING OR IN CORRECT/REJECTABLE. IN THE CASE OF ADDITION U/S 69, THE A.O. HAS TO BRING POSITIVE MATERIAL TO ESTABLISH UNACCOUNTED INVESTMENT/PAYMENT. IN THE I NSTANT CASE, NO POSITIVE MATERIAL COULD BE BROUGHT OUT ON RECORD TO ESTABLISH THAT THE IMPUGNED SEIZED PAGE IN COLUMN NO. 4 REFLECTS THE A CTUAL COST OF THE PROPERTIES NAMED IN COLUMN NO. 3. 5.10 THE AO HAS RELIED ON THE DECISION OF DELHI HIGH COU RT IN THE CASE OF MAHAVIR WOOLEN MILLS VS CIT (DEL) 245 I TR 297 (2000). IN THIS CASE PART OF THE ENTRIES MENTIONED IN THE S EIZED PAPER TALLIED WITH THE ENTRIES IN THE LEDGER ACCOUNTS MAINTAINED BY THE ASSESSEE. BUT IN THE CASE OF THIS ASSESSEE THE ENTRIES OF THE IMP UGNED SEIZED DOCUMENT HAS NO CORRELATION WITH THE BOOKS OF ACCOU NT AND OTHER SEIZED DOCUMENTS TO SHOW THE ACTUAL COST OF THE PRO PERTIES IS MENTIONED ON PAGE 37 OF ANNEXURE A-57. ON THE OTHER HAND, ANOTHER DECISION OF DELHI HIGH COURT NAMELY COMMISSIONER OF INCOME TAX VS. S.M. AGGARWAL (2007) 293 ITR 43 (DEL) AND COMMI SSIONER OF INCOME TAX VS. GIRISH CHUDDAR (2008) 296 ITR 619 (D EL) AND OTHER DECISIONS OF THE VARIOUS ITAT CITED BY THE ASSESSEE SUPPORT THE CASE OF 56 THE ASSESSEE. IN VIEW OF THE ABOVE FACTS AND CIRCUM STANCES, IT IS HELD THAT A.O. HAS NOT BEEN SUCCESSFUL IN PROVING THAT C OLUMN NO. 4 OF SEIZED PAGE 37 OF ANN. A-57 REFLECTS THE COST/PURCH ASE PRICE OF THE LAND AND ON THE OTHER HAND EXPLANATION OF APPELLANT ON THIS ISSUE CAN NOT BE CONSIDERED TO BE INCORRECT AND IS RATHER SAM E IS FOUND TO BE PLAUSIBLE AND ACCORDINGLY ADDITION OF RS. 2,61,66,6 11/- SO MADE BY A.O., HOLDING RS. 4.00 CRORE TO BE PURCHASE PRICE OF LAND, IS HEREBY DELETED. THUS, THE GROUND NO 1, 2 AND 3 ARE DECIDE D IN FAVOUR OF THE ASSESSEE. 5.9. AS A.O. HAS FINALLY MADE ADDITION, ON THE B ASIS OF PAGE 37 OF ANN. A-57, IN THE CASE OF PRESENT APPELL ANT M/S COUNTRYWIDE BUILDESTATE PVT. LTD. ALSO, CONSIDERI NG THE FACTS AND CIRCUMSTANCES AND LEGAL POSITION OF THE PRESENT CA SE BEING BROADLY SAME AS THAT OF M/S RISING BUILDESTATE PVT. LTD., IT IS HELD THAT ADDITION SO MADE BY THE A.O. U/S 69 WITHOUT BRINGI NG POSITIVE MATERIAL ON RECORD AND WITHOUT SUCCESSFULLY PROVING THAT COLUMN NO.4 OF THE SEIZED PAGE 37 OF ANN. A-57 REFLECTS COST/PU RCHASE PRICE OF THE LAND AND ONLY BY REJECTING THE EXPLANATION OF THE A PPELLANT GIVEN DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IS HER EBY DELETED ON THE BASIS OF DISCUSSION AND REASONING GIVEN HEREIN ABO VE AND ALSO CONSIDERING THE REASONING GIVEN IN THE CASE OF M/ S RISING BUILDESTATE PVT. LTD. 15. WE HAVE GONE THROUGH THE ORDER OF LD. CIT (A) A S WELL AS WRITTEN SUBMISSIONS OF THE ASSESSEE ALONG WITH THE WRITTEN NOTE OF LD. D/R AND FIND THAT LD. CIT (A) HAS GIVEN A FINDING OF FACT AFTER CONSIDERING ALL THE RELEVANT MATERIAL. THE WRITTEN SUBMISSIONS FILED ON BEHALF OF THE ASSESSEE MORE OR LESS ARE SIMILAR TO THE WRITTEN SUBMISSIONS FILED BEFORE LD. CIT (A) WHICH HAS BEEN REPRODUCED IN THE ORDER OF LD. CIT (A) AND IN THIS ORDER ALSO. THEREFORE, WE ARE NOT REPEATING THOSE WRITTEN SUBMI SSIONS FILED ON BEHALF OF THE ASSESSEE. 57 15.1. WE HAVE CONSIDERED THE WRITTEN NOTE FILED BY LD. D/R BY WHICH IT HAS BEEN STATED THAT THE ADDITION HAS BEEN MADE ON THE BASIS OF SEI ZED RECORD AND DEPARTMENT WOULD LIKE TO SUBMIT CERTAIN SUPPORTING EVIDENCES TO SHOW THAT FOR PURCHASE OF THIS LAND AT BHAWGARH BANDHA, PAYMENT OVER AND ABOVE THE AMOUNT RECORDED IN SALE AGREEMENT/REGISTERED SALE DEED WAS MADE. IT HAS BEEN EXPLAINED THAT SEARCH W AS CONDUCTED ON THE ASSESSEE GROUP ON 6.8.2008 AND CERTAIN DOCUMENTS RELATED TO LAND P URCHASE AT VILLAGE BHAWGARH BANDHA WAS FOUND AND SEIZED. IT WAS EXPLAINED THAT AS PER SALE DEED DATED 16/17.11.2006 THERE WAS A SALE OF AGRICULTURAL LAND BY SHRI BADRINARAIN AND SHRI MOHAN LAL TO SHRI SURESH KALARWAL, SHRI LAVISH RAMAN AND SHRI NANAG RAM. TH EREAFTER, THERE IS A SALE AGREEMENT DATED 18.11.2006 BETWEEN SHRI SURESH KALARWAL, SHR I LAVISH RAMAN, SHRI DEEN DAYAL AND SHRI NANAG RAM AND ASSESSEE M/S. COUNTRYWIDE BU ILDESTATE PVT. LTD. FOR THE PURCHASE OF THIS AGRICULTURAL LAND. AS PER AGREEME NT SEIZED, AN AMOUNT OF RS. 20,00,000/- EACH WAS PAID TO SHRI SURESH KALARWAL, SHRI LAVISH RAMAN AND SHRINANAG RAM AND AN AMOUNT OF RS. 65,00,000/- WAS PAID TO SHRI DEEN DAY AL. IT WAS FURTHER EXPLAINED THAT AS PER SALE DEED DATED 20.10.2007 BETWEEN M/S. COUNTRY WIDE BUILDESTATE PVT. LTD. (PURCHASER) AND SHRI ARUN LASHKARY (SELLER) WHO IS A POWER OF ATTORNEY HOLDER OF SHRI SURESH KALARWAL, SHRI LAVISH RAMAN, SHRI DEEN DAYAL AND SHRI NANAG RAM FOR LAND. AS PER THIS DEED, THE ASSESSEE GROUP PURCHASED THIS LA ND FOR RS. 2.50 CRORE WHEREBY RS. 1.25 CRORE WAS PAID TO SHRI SURESH KALARWAL, SHRI LAVISH RAMAN, SHRI DEEN DAYAL AND SHRI NANAG RAM AND RS. 1.25 CRORE WAS PAID TO THE JDA ON BEHALF OF THE SELLERS FOR THE CONVERSION OF THIS LAND. IT WAS FURTHER EXPLAINED THAT AMOUNT OF CONSIDERATION DEPOSITED IN THE NAME OF SHRI SURESH KALARWAL, SHRI LAVISH RA MAN, SHRI DEEN DAYAL AND SHRI NANAG RAM WAS IMMEDIATELY WITHDRAWN. IT WAS FURTHE R EXPLAINED THAT STATEMENTS OF 58 THESE PERSONS WERE RECORDED DURING THE COURSE OF PO ST SEARCH PROCEEDINGS BY WHICH THEY HAVE STATED THAT THEY HAD NOT PURCHASED THIS LAND B UT ONLY SIGNED THE AGREEMENTS AND SALE DEED IN EXCHANGE OF SOME COMMISSION AMOUNT. ACCORD INGLY IT WAS SUBMITTED THAT IN FACT LAND HAS BEEN PURCHASED BY THE ASSESSEE FROM THE OR IGINAL OWNERS SHRI MOHAN LAL AND SHRI BADRINARAIN. IT WAS FURTHER EXPLAINED THAT ST ATEMENTS OF ORIGINAL OWNERS I.E. SHRI MOHAN LAL AND SHRI BADRINARAIN WERE RECORDED UNDER SECTION 131 ON 10.9.2008. SHRI BADRINARAIN STATED THAT HIS BROTHER SHRI MOHAN LAL KNEW ABOUT THE SALE OF THE LAND. IN REPLIES TO QUESTION NO. 5 & 6 OF HIS STATEMENT, SHR I MOHAN LAL STATED THAT HE AND HIS BROTHER SOLD THEIR 12 BIGHA LAND FOR TOTAL RS. 1.68 CRORE. HE STATED THAT THE LAND WAS SOLD THROUGH SOME BROKERS. HOWEVER, HE REITERATED THAT THE LAND WAS SOLD BY THEM FOR RS. 1.68 CRORE AND THE PAYMENTS WERE RECEIVED BY CHEQUE AS W ELL AS CASH. IT IS FURTHER EXPLAINED THAT STATEMENT OF SHRI MOHAN LAL ABOUT THE SALE OF LAND AT BHAVGARH BANDHA FOR RS. 1.68 CRORE WAS CONFRONTED TO SHRI PAWAN LASHKARY IN THE POST SEARCH STATEMENT RECORDED ON 17.11.2008 AND IN REPLY SHRI PAWAN LASHKARY HAS STA TED THAT HE HAS GIVEN THE MONEY WHICH WAS MENTIONED IN THE REGISTRY. IT MEANS THAT NO OVER AND ABOVE MONEY WAS GIVEN ON BEHALF OF THE BUYER BY SHRI PAWAN LASHKARY WHO I S A POWER OF ATTORNEY HOLDER. IN PARA 7 OF THE WRITTEN NOTE BY THE DEPARTMENT, IT HA S BEEN MENTIONED THAT THUS THE ABOVE SUPPORTING EVIDENCES SHOWS THAT FOR PURCHASE OF LAN D AT BHAWGARH BANDHA, THE ASSESSEE DID MAKE PAYMENTS OVER AND ABOVE THE AMOUNT REFLECT ED IN THE SALE AGREEMENT/DEEDS. SINCE THE AMOUNT OF UNDISCLOSED INVESTMENT IN THE A BOVE LAND REFLECTED IN THE SEIZED DOCUMENT PAGE 37 OF ANNEXURE -57 WAS MORE THE ADDIT ION WAS MADE FOR THAT AMOUNT. CERTAIN SUPPORTING EVIDENCE FILED ON BEHALF OF THE DEPARTMENT ARE MENTIONED IN THE WRITTEN NOTE I.E. STATEMENT OF SHRI SURESH KALARWAL , SHRI LAVISH RAMAN, SHRI DEEN DAYAL 59 AND SHRI NANAG RAM, SHRI MOHAN LAL, SHRI BADRI NARA IN AND OF SHRI PAWAN LASKARY. IN REPLY TO THE ABOVE DISCUSSED WRITTEN NOTE FILED BY THE DEPARTMENT, THE ASSESSEE HAS ALSO FILED A REPLY BY WHICH IT WAS STRONGLY STATED THAT THE SUPPORTING EVIDENCES SHOULD NOT BE ACCEPTED NOW AS THEY WERE BEFORE THE AO AT THAT POI NT OF TIME. IT WAS STRONGLY STATED THAT NEITHER THESE STATEMENTS OF ORIGINAL LAND OWNERS WE RE KNOWN TO THE ASSESSEE FOR ITS REPLY NOR THE ASSESSEE WAS ALLOWED TO CROSS EXAMINE THESE PEOPLE. RELIANCE IS PLACED ON VARIOUS CASE LAWS INCLUDING DAL CHAND & SONS VS. CI T, 12 ITR 458 (LAHORE), IN CASE OF KISHANI CHAND CHELA RAM, 125 ITR 713 (SC) AND MANY MORE MENTIONED IN THE WRITTEN NOTE FILED BY LD. A/R WHICH WAS FILED IN RESPONSE T O WRITTEN NOTE FILED ON BEHALF OF THE DEPARTMENT. WE HAVE TAKEN INTO CONSIDERATION ALL THESE SUPPORTI NG EVIDENCES AS WELL AS WRITTEN NOTE AND REPLY OF THE LD. COUNSEL OF THE ASSESSEE A ND AFTER TAKING INTO CONSIDERATION, WE FIND THAT LD. CIT (A) HAS EXAMINED THE ISSUE IN DET AIL AS MENTIONED ABOVE AND THE FINDING OF LD. CIT (A) REMAINED UNCONTROVERTED, THEREFORE, IN OUR CONSIDERED VIEW, THE FINDINGS OF LD. CIT (A) DO NOT SUFFER FROM ANY INFIRMITY. 15.2. REGARDING THE SUPPORTING EVIDENCES, WE NOTED THAT ALL THESE MATERIALS WERE AVAILABLE WITH THE AO BEFORE MAKING ASSESSMENT AND IF HE WANTED TO CONSIDER THESE EVIDENCES I.E. STATEMENTS OF ORIGINAL OWNERS, THEN HE SHOULD HAVE TAKEN INTO CONSIDERATION. HOWEVER, HE HAS NOT TAKEN INTO CONS IDERATION FOR THE SIMPLE REASON THAT AS PER SEIZED DOCUMENT PAGE 37 OF ANNEXURE A57, THE AM OUNT WAS MORE THAN THE AMOUNT ACCEPTED BY THE ORIGINAL OWNERS OVER AND ABOVE THE AMOUNT RECORDED IN THE SALE DEED. EVEN BEFORE LD. CIT (A) THESE SUPPORTING EVIDENCES WERE NOT FILED ON BEHALF OF THE DEPARTMENT. NOW THE DEPARTMENT WANTS TO MAKE A NEW CASE THAT SUPPORTING EVIDENCES 60 SHOULD BE ACCEPTED. IN OUR VIEW, THESE SUPPORTING EVIDENCES CANNOT BE ACCEPTED FOR THE REASON THAT DEPARTMENT ITSELF IS NOT SURE THAT WHIC H AMOUNT IS TO BE ADDED. WHETHER THE AMOUNT OF RS. 3.3 CRORE MENTIONED IN THE COLUMN NO. 4 OF THE SEIZED PAGE 37 OF ANNEXURE A-57 IS TO BE TAKEN INTO CONSIDERATION OR THE FIGUR E STATED BY THE ORIGINAL OWNER I.E RS. 1.68 CRORE IS TO BE TAKEN INTO CONSIDERATION. THE ASSESSEE HAD ALREADY SHOWN AN AMOUNT OF RS. 1.25 CRORE ON ACCOUNT OF PURCHASE OF LAND TH ROUGH ITS POWER OF ATTORNEY HOLDER SHRI PAWAN LASKARY. ALL THESE FACTS HAVE BEEN DISCUSSED IN DETAIL BY THE LD. CIT (A), THEREFORE, WE ARE NOT REPEATING AGAIN HERE. 15.3. BY THE ACT OF DEPARTMENT IN FILING THESE SUPP ORTING EVIDENCES, IT IS NOW AMPLY PROVED THAT THE PAGE 37 OF ANNEXURE A-57 FOUND AND SEIZED DURING THE SEARCH IS NOTHING BUT A ROUGH CALCULATION MADE AT THE VARIOUS POINTS OF TIME JUST TO ENTER INTO JOINT VENTURE. ON ONE SIDE THE DEPARTMENT SAYS THAT THE STATEMENTS OF SHRI BADRI NARAIN AND SHRI MOHAN LAL WERE WITH THE AO BY WHICH IT WAS ADMITTED THAT THEY HAVE RECEIVED RS. 1.68 CRORE FOR SALE OF 12 BIGHA OF AGRICULTURAL LAND. HOWEVER, THE SAME WAS NOT TAKEN INTO CONSIDERATION FOR THE REASON THAT THE FIGURE IN COLUMN NO. 4 OF P AGE 37 OF ANNEXURE A-57 WAS MUCH MORE. THEREFORE, THESE STATEMENTS WERE NOT TAKEN IN TO CONSIDERATION. IT MEANS NOW DEPARTMENT WANTS THAT IF THE ENTIRE ADDITION IS NOT SUSTAINABLE, THEN THE ADDITION SHOULD BE SUSTAINED ON THE BASIS OF STATEMENTS OF SHRI BADRI NARAIN AND HIS BROTHER SHRI MOHAN LAL RECORDED AT THE BACK OF THE ASSESSEE WITHOUT CONFRO NTING THE ASSESSEE THAT THE SALE CONSIDERATION WAS OF RS. 1.68 CRORE, IN OUR CONSIDE RED VIEW, THIS PLEA OF THE DEPARTMENT SHOULD NOT BE ADMITTED AND CANNOT BE ADMITTED BECAU SE AS PER THIS WRITTEN NOTE IT IS AMPLY PROVED THAT THE STATEMENTS WERE BEFORE THE AO, HOWE VER, HE HAS NOT TAKEN INTO CONSIDERATION KNOWINGLY. NOW THEY WANT TO TAKE INT O CONSIDERATION THESE SUPPORTING 61 EVIDENCES, IN OUR VIEW IS NOT PERMISSIBLE EITHER IN THE EYES OF LAW OR IN THE FACTS OF THE PRESENT CASE, THEREFORE, WE REFUSE TO ACCEPT THESE SUPPORTING EVIDENCES, AS, IN FACT, THESE EVIDENCES ARE NOT SUPPORTING EVIDENCES BUT ARE TOTA LLY NEW EVIDENCES WHICH WERE NOT TAKEN INTO CONSIDERATION BY THE AO. NOW THE DEPART MENT WANTS TO TAKE INTO CONSIDERATION THESE EVIDENCES JUST TO MAKE A NEW CASE WHICH CANNO T BE ALLOWED. ACCORDINGLY WE DECLINE TO TAKE INTO CONSIDERATION THESE ADDITIONAL EVIDENCES AT THIS POINT OF TIME. VARIOUS COURTS AT VARIOUS LEVELS HAVE HELD THAT IF ANY DOCUMENT WHICH WAS RELIED BY THE AO, WANTED TO RELY BY THE DEPARTMENT, THEN THE FIRS T AND FOREMOST DUTY OF THE DEPARTMENT IS THAT THE PIECE OF EVIDENCE WHICH THEY WANT TO RE LY UPON HAS TO BE CONFRONTED TO THE ASSESSEE OR THE OTHER PARTY AS THE CASE MAY BE. IF THERE IS ANY STATEMENT OF ANY PERSON WHICH THEY WANT TO TAKE INTO CONSIDERATION, THEN CR OSS EXAMINATION HAS TO BE ALLOWED. IN CASE OF GARGI DIN JAWALA PRASAD VS. CIT, 96 ITR 97 (ALL.), HONBLE ALLAHABAD HIGH COURT HAS HELD THAT WHEN THE ASSESSEE WAS PERM ITTED TO CROSS EXAMINE THE WITNESSES BUT NAMES OF WITNESSES AND SUBSTANCE OF THE STATEME NT MADE BY THEM WERE NOT GIVEN, WHETHER THE ASSESSMENT WOULD BE VALID, THE ASSESSME NT WAS VITIATED BY VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE AS THE PERMISSION GIV EN FOR CROSS EXAMINATION WAS ONLY ILLUSORY. 15.4. IN THE PRESENT CASE, NEITHER STATEMENTS RECOR DED WHICHNOW THEY WANTED TO RELY UPON WAS CONFRONTED TO THE ASSESSEE NOR THE CROSS E XAMINATION WAS ALLOWED TO THE ASSESSEE. 62 15.5. IN THE CASE OF CIT VS. CHANDRAVILAS HOTEL, 16 4 ITR 102 (GUJ.), THE COURT HAS HELD THAT THE ASSESSING OFFICER WAS DUTY BOUND TO ALLOW OPPORTUNITY TO THE ASSESSEE TO EXAMINE THE EVIDENCES GATHERED BY PRIVATE ENQUIRIES . 15.6. IN CASE OF ALOK AGARWAL VS. DCIT, 67 TTJ 109 (ITAT DELHI), THE DELHI BENCH OF THE TRIBUNAL HELD THAT STATEMENT OF THIRD PARTY CAN NOT BE USED WITHOUT CROSS EXAMINATION. 15.7. IN CASE OF CIT VS. G. KRISHNAN, 210 ITR 707 ( MAD.), THE HON'BLE MADRAS HIGH COURT HAS HELD THAT NO ADDITION CAN BE MADE MERELY ON THE BASIS OF STATEMENT OF THIRD PARTY. 15.8. IN CASE OF STRAPTEX INDIA (P) LTD. VS. DCIT, 84 ITD 320 (MUM.), THE MUMBAI BENCH OF THE TRIBUNAL HAS HELD THAT STATEMENT OF AN Y PERSON CANNOT BE UTILIZED AGAINST THE OTHER PERSON UNLESS THE OTHER PERSON IS GIVEN AN OP PORTUNITY TO CROSS EXAMINE THE WITNESSES. 15.9. IN CASE OF KISHINCHAND CHELLARAM VS. CIT, 125 ITR 713 (SC), THE HON'BLE SUPREME COURT HAS HELD THAT WITHOUT ALLOWING CROSS EXAMINATION, NO ADDITION CAN BE MADE. IN THIS CASE CERTAIN BANK DEPOSITS WERE FOUN D BY THE ASSESSING OFFICER. THE ASSESSEE WAS GIVEN SHOW CAUSE TO EXPLAIN THE CREDIT ENTRIES IN THE BANK. THE ASSESSEE STATED THAT HE HAS NO INFORMATION THAT WHO HAS DEPO SITED THE CASH IN HIS ACCOUNT. BANK OFFICER WAS ALSO EXAMINED AND IT WAS GATHERED THAT AN OLD EMPLOYEE OF THE ASSESSEE HAS DEPOSITED THE SAME. THEREAFTER, THE ADDITION WAS MA DE BY THE ASSESSING OFFICER WHICH WAS SUSTAINED UPTO THE STAGE OF HON'BLE HIGH COURT. HOWEVER, ON APPEAL BEFORE HON'BLE 63 SUPREME COURT, IT WAS HELD THAT WITHOUT ALLOWING CR OSS EXAMINATION NO ADDITION CAN BE MADE AND THE IMPUGNED ADDITION SUSTAINED UPTO THE S TAGE OF HIGH COURT WAS DELETED. 19.10. IN THIS CASE ALSO NOW THE DEPARTMENT WANTS T O UTILIZE THE STATEMENT RECORDED AT THE BACK OF THE ASSESSEE WHICH WAS NEITHER CONFRONTED T O THE ASSESSEE NOR ASSESSEE HAS OPPORTUNITY TO CROSS EXAMINE THE SAME. THEREFORE, AT THIS STAGE, THE STATEMENT OF ANY THIRD PARTY WHICH THE DEPARTMENT WANTED TO RELY UPO N CANNOT BE CONSIDERED AS IT WILL TANTAMOUNT TO MAKE A NEW CASE. 16. WE HAVE ALREADY DECIDED SIMILAR CASE IN CASE OF M/S. RISING BUILDESTATE PVT. LTD. IN ITA NO. 962/JP/2011 BY ORDER DATED 22.6.2012 IN WHICH THE IDENTICAL FACTS ARE INVOLVED. THE ADDITION WAS MADE ON THE BASIS OF CO LUMN NO. 4 OF PAGE 37 OF ANNEXURE A-57. THE ADDITION WAS DELETED BY LD. CIT (A) AND T HE ORDER OF LD. CIT (A) HAS BEEN CONFIRMED BY US. SINCE THE FACTS ARE IDENTICAL I N THE PRESENT CASE, THEREFORE, IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES DISCUSSED ABOVE A ND IN VIEW OF THE REASONING GIVEN BY US IN THAT CASE I.E. M/S. RISING BUILDESTATE PVT. L TD., WE CONFIRM THE ORDER OF LD. CIT (A) IN THIS CASE ALSO. 17. THE CROSS OBJECTION FILED BY ASSESSEE IN SUPPOR T OF THE ORDER OF LD. CIT (A) WHICH DOES NOT REQUIRE ANY SEPARATE ADJUDICATION UPON, TH EREFORE, THE SAME IS TREATED AS INFRUCTUOUS IN NATURE. 18. IN THE RESULT, APPEAL OF THE DEPARTMENT AS CROS S OBJECTION OF THE ASSESSEE ARE DISMISSED. 19. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 29 .6.2012. SD/- SD/- ( SANJAY ARORA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER 64 JAIPUR, D/- COPY FORWARDED TO :- THE DCIT, CENTRAL CIRCLE-2, JAIPUR. M/S. COUNTRYWIDE BUILDESTATE PVT. LTD., JAIPUR. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 961(2)/JP/2011) BY ORDER, AR ITAT JAIPUR.
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