ACIT, NASHIK, Nashik V. M/S MANOJ MARKETING PVT. LTD, Nashik

ITA 965/PUN/2008

• Counselvise Citation: 96524514 RSA 2008
• Duration Of Justice: 6 year(s) 6 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 08-01-2015
• Assessment Year: misc
• Appeal Filed On: 09-07-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Invalid notice; Income from undisclosed sources; Search and seizure; Document seized; Block assessment; Documents seized
• Section: 143(3); 131; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE MS. SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO. 965/PN/2008 (BLOCK PERIOD 1997-98 TO 2003-04) ACIT, CIRCLE-1, NASHIK .. APPELLANT VS. M/S. MANOJ MARKETING PVT. LTD., 7, THAKKERS, NEAR NEHRU GARDEN, NASHIK PAN NO.AAACM6844M .. RESPONDENT CO NO.28/PN/2009 (ARISING OUT OF ITA NO.965/PN/2008) (BLOCK PERIOD 1997-98 TO 2003-04) M/S. MANOJ MARKETING PVT. LTD., 7, THAKKERS, NEAR NEHRU GARDEN, NASHIK PAN NO.AAACM6844M .. CROSS OBJECTOR VS. ACIT, CIRCLE-1, NASHIK .. APPELLANT IN THE APPEAL ASSESSEE BY : SHRI NIKHIL PATHAK REVENUE BY : SHRI RAJESH DAMOR DATE OF HEARING : 12-01-2015 DATE OF PRONOUNCEMENT : 30-01-2015 ORDER PER R.K.PANDA, AM : THIS APPEAL FILED BY THE REVENUE AND CO FILED BY TH E ASSESSEE ARE DIRECTED AGAINST THE ORDER DATED 30-04-2008 OF THE CIT(A)-II, NASHIK RELATING TO BLOCK PERIOD 1997-98 TO 2003-04. FOR THE SAKE OF 2 CONVENIENCE, THESE WERE HEARD TOGETHER AND ARE BEIN G DISPOSED OF BY THIS COMMON ORDER. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT A SEARCH A CTION U/S.132 OF THE I.T. ACT WAS CONDUCTED AT THE RESIDENTIAL PREMI SES OF SHRI Y.P. TRIVEDI AND SHRI J.M. JHALA, PARTNERS OF M/S. RISHI RAJ BUILDERS AND DEVELOPERS AND BUSINESS PREMISES OF M/S.RISHIRAJ BU ILDERS AND DEVELOPERS, NASHIK. DURING THE SAID SEARCH CERTAIN BOOKS OF ACCOUNTS WERE SEIZED FROM THESE PREMISES MARKED AS ANNEXURE-A2 TO THE PANCHANAMA. THE SEIZED DOCUMENTS SEIZED FRO M THE RESIDENCE OF SHRI Y.P. TRIVEDI SHOWED THAT CERTAIN PAYMENTS I N CASH WERE MADE BY RISHIRAJ BUILDERS AND DEVELOPERS ON VARIOUS DATE S IN RESPECT OF LANDS/PLOTS PURCHASED/TAKEN FOR DEVELOPMENT BY RISH IRAJ BUILDERS AND DEVELOPERS FROM M/S. VASUMATI MARKETING PVT. LT D. AND M/S. MANOJ MARKETING PVT. LTD. 7, THAKKER, NEAR NEHRU GA RDEN, NASHIK. THE ACIT, CENTRAL CIRCLE-3 NASHIK INTIMATED THE DIS CREPANCIES FOUND DURING THE BLOCK ASSESSMENT PROCEEDINGS COMPL ETED BY HIM IN THE CASE OF RISHIRAJ BUILDERS AND DEVELOPERS TO ACI T, CENTRAL CIRCLE-1, NASHIK HAVING JURISDICTION OVER THE ASSES SEE. THE AO OBSERVED FROM PAGE 17 (OVERLEAF) OF SEIZED ANNEXURE -A8 THAT RISHIRAJ BUILDERS AND DEVELOPERS HAD PAID FURTHER C ASH CONSIDERATION OF RS.57,75,370/- IN RESPECT OF PLOT NO.23 AND PLOT NO.43. OUT OF THE TOTAL CASH PAYMENT OF RS.57,75,370/- THE DATE-W ISE DETAILS OF RS.33 LAKHS WAS FOUND IN ANNEXURE-A2 WHICH ARE AS U NDER : 3 DATE PG. NO. OF ANNEXURE A-2 AMOUNT 28.06.1997 78 5,00,000 16.08.1997 89 2,00,000 26.08.1997 91 2,00,000 26.08.1997 91 10,00,000 10.09.1997 94 4,00,000 16.09.1997 95 2,00,000 19.09.1997 95 2,00,000 29.09.1997 97 2,00,000 03.10.1997 98 2,00,000 06.10. 1 997 99 2,00,000 TOTAL 33,00,000 2.1 THE AO THEREFORE ISSUED NOTICE U/S.158BD DATED 07-04-2005 TO THE ASSESSEE WHICH WAS SERVED ON HIM ON 12-04-20 05. THE ASSESSEE FILED BLOCK RETURN ON 24-05-2005 DECLARING NIL UNDISCLOSED INCOME FOR THE BLOCK PERIOD. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO OBSERVED THAT SHRI Y.P. TRIVEDI AND SHRI JHALA JAIRAJ MANHAR SINGH, PARTNERS OF THE FIRM M/S. RISH IRAJ BUILDERS AND DEVELOPERS HAVE SUBMITTED AN AFFIDAVIT DATED 21-03- 2005 IN WHICH IT IS STATED THAT THEY HAVE PURCHASED PLOT NOS. 23 AND 43 FOR A CONSIDERATION OF RS.66,31,266/-. AS PER RECORDS OF RIGHTS, PLOT NO.33 BELONGS M/S.VASUMATI MARKETING PVT. LTD AND M/S. MA NOJ MARKETING PVT. LTD. SO THEY MADE A DEVELOPMENT AGRE EMENT WITH M/S. VASUMATI MARKETING PVT. LTD AND M/S. MANOJ MAR KETING PVT. LTD DULY REGISTERED ON 04-10-1997 WITH THE SUB-REGI STRAR, NASHIK. THEY HAVE PAID THE AMOUNT OF RS.4,26,766/- FOR PLOT NO.23 AND RS.4,29,000/- FOR PLOT NO.43 BY CHEQUE DRAWN ON JAN KALYAN COOPERATIVE BANK. THE REMAINING CASH CONSIDERATION OF 4 RS.57,75,400/- HAS BEEN PAID TO SHRI NARENDRA M. TH AKKER, HIS REPRESENTATIVES FROM TIME TO TIME, THE DETAILS OF W HICH ARE AS UNDER : DATE AMOUNT MODE OF PAYMENT THROUGH 28-06-97 5,00,000.00 CASH MR. NARENDRA THAKKAR 16-8-97 2,00,000.00 CASH MR. NARENDRA THAKKAR 26-8-97 2,00,000.00 CASH MR. NARENDRA THAKKAR 26-8-97 10,00,000.00 CASH MR. NARENDRA THAKKAR 10-9-97 4,00,000.00 CASH MR. NARENDRA THAKKAR 16-9-97 2,00,000.00 CASH MR. NARENDRA THAKKAR 19-9-97 2,00,000.00 CASH MR. NARENDRA THAKKAR 29-9-97 2,00,000.00 CASH MR. NARENDRA THAKKAR 3-10-97 2,00,000.00 CASH MR. NARENDRA THAKKAR 6-10-97 2,00,000.00 CASH MR. NARENDRA THAKKAR AFTER 8-10-97 24,75,400.00 CASH MR. NARENDRA THAKKAR 57,75,400.00 2.2 THE AO FURTHER NOTED THAT DURING THE BLOCK ASSE SSMENT PROCEEDINGS IN THE CASE OF RISHIRAJ BUILDERS AND DE VELOPERS THE STATEMENT OF SHRI Y.P. TRIVEDI WAS RECORDED. IN HI S ANSWER TO QUESTION NO.3 HE HAS CONFIRMED THAT CASH PAYMENT OF RS.57,75,400/- WAS MADE OVER AND ABOVE THE RECORDED CONSIDERATION AS PER AGREEMENT DATED 04-10-1997. 2.3 THE AO PROVIDED WITH THE DETAILS OF THE PERSON SEARCHED, REASON FOR INITIATION OF PROCEEDINGS U/S.158BD, COP Y OF THE RELEVANT SEIZED MATERIAL, COPY OF THE AFFIDAVIT FILED BY SHR I Y.P. TRIVEDI, COPY OF STATEMENT OF SHRI Y.P. TRIVEDI ON 21-03-2005 AND COPY OF STATEMENT DATED 25-03-2003. THE AO THEREAFTER ASKE D THE ASSESSEE TO EXPLAIN AS TO WHY THE AMOUNT OF RS.57,75,400/- A S PER THE ABOVE DETAILS FOUND ON THE SEIZED PAPER DURING THE COURSE OF SEARCH SHOULD NOT BE TREATED AS UNDISCLOSED INCOME OF THE ASSESSE E. 5 2.4 THE ASSESSEE WAS ALLOWED CROSS EXAMINATION OF S HRI Y.P. TRIVEDI. THE ASSESSEE STRONGLY DENIED RECEIPT OF A NY ON-MONEY AND IN RESPECT OF THIS CLAIM FURNISHED AN AFFIDAVIT OF SHRI NARENDRA M. THAKKER. VARIOUS INCONSISTENCIES IN THE ALLEGATION OF RISHIRAJ BUILDERS AND DEVELOPERS REGARDING PAYMENT OF ON-MON EY WERE BROUGHT TO THE NOTICE OF THE AO. DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S.158BD SHRI Y.P. TRIVEDI, PARTNER OF M/S. RISHIRAJ BUILDERS AND DEVELOPERS AND AUTHOR OF THE SEIZED DI ARY WAS CROSS EXAMINED. IN HIS CROSS-EXAMINATION, SHRI Y.P. TRIV EDI ADMITTED THAT HE WAS NEITHER DIRECTLY INVOLVED IN NEGOTIATIONS FO R THE TRANSACTION OF PLOT NOS. 23 AND 43 NOR IN PAYMENT OF ON-MONEY TO S HRI NARENDRA M. THAKKER. IT WAS ADMITTED BY SHRI Y.P. TRIVEDI I N HIS CROSS- EXAMINATION THAT HE NEVER CROSS CONFIRMED FROM THE OTHER PARTY, THE PRICE AS WELL AS THE PAYMENT OF ON-MONEY. IT WAS A LSO ADMITTED THAT THE ENTRIES IN THE SEIZED DIARY WERE MADE ONLY ON T HE BASIS OF INFORMATION SUPPLIED BY SHRI SHASTRI, AN EMPLOYEE O F M/S. RISHIRAJ BUILDERS AND DEVELOPERS. IN THE RE-EXAMINATION OF SHRI Y.P. TRIVEDI BY THE AO IT WAS ADMITTED BY SHRI Y.P. TRIVEDI THAT HE IS NOT SURE AS TO THE ACTUAL PAYMENT OF ON-MONEY TO SHRI NARENDRA M. THAKKER. ON THE BASIS OF CROSS-EXAMINATION OF SHRI Y.P. TRIVEDI THE ASSESSEE POINTED OUT TO THE AO THAT THE FOUL PLAY WAS BY SHR I SHASTRI AND THERE WAS NO REASON OF ANY ON-MONEY IN THE TRANSACTION SI NCE THE PRICE CLAIMED INCLUDING THE ON-MONEY WAS VERY MUCH EXCESS IVE OF THE PREVAILING MARKET RATE. 6 3. HOWEVER, THE AO WAS NOT SATISFIED WITH THE EXPLA NATION GIVEN BY THE ASSESSEE AND COMPLETED THE ASSESSMENT AND AD DED AN AMOUNT OF RS.16,50.000/- AS UNDISCLOSED INCOME OF THE ASSE SSEE FOR THE BLOCK PERIOD BEING 50% SHARE OF THE ASSESSEE FOR THE FOLL OWING REASONS : I) DENIAL OF HAVING RECEIVED ANY FURTHER CASH CONSID ERATION IS ONLY SELF SERVING, THERE ARE EVIDENCES IN THE FORM OF SEIZED MATERIAL REFERRED PROVING THE CONTRARY. II) IN THE SEIZED MATERIAL IT IS CLEARLY MENTION THA T CASH CONSIDERATION WAS PAID TO THAKKER IN RESPECT OF PLOT N O, 23 & 43 AND DEVELOPMENT AGREEMENT OF THIS PLOTS ARE IN THE NA ME OF MANOJ MARKETING PVT. LTD & VASUMATI MARKETING PVT. LTD, .A ND FURTHER IT IS WORTHWHILE TO MENTION THAT MANOJ MARKETING PVT. LTD . IS A CLOSELY HEAD COMPANY AND SHRI NARENDRA THAKKER IS ONE OF THE DIRECTOR ALONG WITH HIS BROTHER SHRI JITENDRA M. THAKKER III) THE STATEMENT GIVEN BY SHRI Y.P.TRIVEDI ON 21 /03/2005 WAS TO BE REGARDED AS CORRECT BASED ON THE FACTS AND CIRCUMSTA NCES OF THE CASE IV) THE PRESUMPTION U/S. 132(4A) WOULD BE APPLICABL E TO THE ASSESSEE THOUGH HE WAS A THIRD PARTY, IT WAS STATED BY TH E AO THAT PROVISIONS WERE VERY CLEAR AND THE PRESUMPTION U/S. 132 (4A) EQUALLY APPLIES TO OTHER PERSON. THE A.O. FURTHER DIST INGUISHED THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF V.C.SHUKLA REPORTED IN 3 SCC 410 (POPULARLY KNOWN AS JAIN HAWAL A DIARY CASE). THE A.O. STATED THAT THE JAIN HAWALA CASE WAS A CASE OF CRIMINAL PROCEEDINGS IN WHICH THE EVIDENCE ACT WAS APPLICABLE IN STRICT SENSE WHEREAS THE PRESENT CASE OF A REVENUE PROCEEDINGS IN WH ICH THE EVIDENCE ACT WAS NOT APPLICABLE IN THE STRICT SENSE. F URTHER, THE FACTS OF THAT CASE ARE ENTIRELY DIFFERENT FROM THE PRESENT FACTS OF THE CASE. V) REVENUE PROCEEDINGS ARE DECIDED BY PRE-PONDERENCE OF PROBABILITY AND NOT BY BEYOND REASONABLE DOUBT RUL E. 4. BEFORE CIT(A) THE ASSESSEE STRONGLY CHALLENGED T HE ADDITION MADE BY THE AO. IT WAS ARGUED THAT UNDISCLOSED INC OME IN THE HANDS OF THE ASSESSEE HAS TO BE CALCULATED ON THE BASIS O F EVIDENCE FOUND AS A RESULT OF SEARCH. FROM THE SEIZED PAPERS SUPPLIE D TO THE ASSESSEE AND THE STATEMENT RECORDED U/S.132(4), THE NAME OF THE ASSESSEE IS NEITHER APPEARING IN ANY OF THE SEIZED PAPERS NOR I N THE STATEMENT RECORDED U/S.132(4). THUS, THERE IS NO LINK BETWEEN EVIDENCE FOUND AS A RESULT OF SEARCH AND THE UNDISCLOSED INCOME IN THE HANDS OF THE 7 ASSESSEE. IT WAS ARGUED THAT THE ASSESSEE IS A COR PORATE BODY HAVING ITS EXISTENCE INDEPENDENT OF ITS SHAREHOLDERS. THE REFORE, IF AT ALL ANY PAYMENT IS ALLEGED TO HAVE BEEN MADE TO ANY OF ITS SHAREHOLDER, THE COMPANY CANNOT BE FAULTED FOR THE SAME. IT WAS ACC ORDINGLY ARGUED THAT ADDITION OF RS.16,50,000/- AT BEST CAN BE MADE IN THE HANDS OF THE SHAREHOLDER OF THE ASSESSEE COMPANY AND NOT IN THE HANDS OF THE ASSESSEE COMPANY. IT WAS ARGUED THAT THE ALLEGATIO N MADE IN THE AFFIDAVIT OF SHRI Y.P. TRIVEDI AND NOTINGS ON THE S EIZED PAPERS ARE INCONSISTENT. IT WAS SUBMITTED THAT ACCORDING TO T HE AFFIDAVIT TOTAL PAYMENT MADE IN CASH BEYOND THE DOCUMENTED CONSIDER ATION AGGREGATED TO RS.57,75,400/- WHEREAS AS PER SEIZED PAPER PAGE NOS. 78,89,91,94,95,97, 98 AND 99 OF ANNEXURE-A2 AGGREGA TE CASH PAYMENTS BEYOND DOCUMENTED PRICE IS AMOUNTING TO RS .33 LAKHS ONLY. FURTHER, THE INCONSISTENCY ON NOTING ON SEIZ ED PAPER 17 (OVERLEAF) IS FOUND ACCEPTABLE BY THE AO. THUS, IN ANY CASE NOTINGS ON SEIZED PAPER 17 (OVERLEAF) AND THE CONTENTS OF T HE AFFIDAVIT ARE NOT FOUND RELIABLY BY THE AO HIMSELF. IT WAS ACCORDING LY ARGUED THAT THE AO SHOULD NOT HAVE RELIED ON THIS EVIDENCE FOR MAKI NG ADDITION OF RS.16,50,000/- AS UNDISCLOSED INCOME IN THE HANDS O F THE ASSESSEE. 4.1 FROM THE STATEMENT OF MR. Y.P. TRIVEDI, RECORD ED ON 23.04.2007 (ENCLOSURE NO.7), IT IS EVIDENT THAT, NE ITHER MR. Y.P. TRIVEDI NOR MR. J.M. JHALA, THE ONLY PARTNERS OF M/ S. RISHIRAJ BUILDERS AND DEVELOPERS, WAS DIRECTLY INVOLVED IN T HE NEGOTIATIONS OR THE PAYMENT OF CASH AGAINST THE TRANSITIONS OF PLOT S. IT IS ALSO CONFIRMED, BY SHRI. Y.P. TRIVEDI, IN HIS CROSS EXAM INATION THAT, HE DID NOT CONFIRM FROM THE RECIPIENT OF CASH, WHETHER THE CASH WAS 8 RECEIVED BY HIM OR NOT (ANSWER TO Q. NO.20 OF CROSS EXAMINATION, ANSWER TO Q.NO. 4 OF REEXAMINATION). IT IS EVIDENT FROM THE STATEMENT OF MR. Y.P. TRIVEDI, RECORDED ON 23.04.20 07 AND THE PHOTO COPIES OF THE REGISTERED DEVELOPMENT AGREEMENTS THA T, IT WAS MR. SHASTRI WHO NEGOTIATED THE TRANSACTION AND PAID THE CONSIDERATION TO THE ASSESSEE. ALLEGATION OF MR. Y.P.TRIVEDI OF PAYM ENT OF CASH, BEYOND DOCUMENTED PRICES, IS BASED ON HIS FAITH ON SHRI. SHASTRI. HE DOES NOT HAVE FIRST HAND INFORMATION ABOUT THE PRIC ES FIXED AND THE PAYMENTS MADE. FURTHER, IN REPLY TO Q.NO.6, IT IS A DMITTED BY MR. Y.P. TRIVEDI THAT, THE PAYMENTS NOTED ON SEIZED PAP ERS PAGE NOS. 78, 89, 91, 94, 95, 97, 98 AND 99 OF ANNEXURE-A-2 (ENCL OSURE NO.4) HAVE BEEN RECORDED BY HIM ON THE BASIS OF INFORMATI ON SUPPLIED TO HIM OR ON THE BASIS OF ACCOUNT GIVEN TO HIM BY MR. SHASTRI. FURTHER, IN ANSWER TO Q.NO.8 IT IS ADMITTED BY MR.TRIVEDI TH AT, THE CONTENTS OF AFFIDAVIT ARE BASED ON THE PAYMENTS RECORDED BY HIM ON THE SAID SEIZED PAPERS. IN SHORT, MR. TRIVEDI, GUIDED BY HIS FULL FAITH ON MR.SHASTRI, NEVER CONFIRMED WITH THE ASSESSEE THE P RICE FIXED AND THE PAYMENTS RECEIVED BY ASSESSEE. INFLUENCE OF MR.SHAS TRI WAS SO GREAT THAT, IT WAS MR. SHASTRI WHO WAS PRESENT IN THE OFF ICE OF SUB REGISTRAR FOR REGISTRATION OF THE DEVELOPMENT AGREEMENTS. THU S, IT WAS ALL ALONG SHRI SHASTRI, WHO DEALT WITH ASSESSEE AND NOT MR. TRIVEDI OR MR. JHALA. IT WAS SHRI SHASTRI, WHO NEGOTIATED THE DEAL, MADE THE PAYMENTS AND GOT THE DOCUMENTS REGISTERED UNDER HIS SUPERVISION. SHRI SHASTRI APPEARS TO HAVE MISLED SHRI TRIVEDI & SHRI JHALA. THEREFORE, A. O. ERRED IN RELYING ON NOTINGS ON THE SEIZED PAPERS (MADE ON INFORMATION SUPPLIED BY SHRI SHASTRI) AND THE AFFIDAVIT OF 9 SHRI. TRIVEDI (BASED ON THE INFORMATION CONTAINED I N THE SEIZED PAPERS), WITHOUT CONFIRMATION FROM SHRI SHASTRI. A. O. HAS EXCESSIVELY RELIED ON THE ABSENCE OF COMPLAINT FROM VENDOR OF LAND REGARDING NON RECEIPT OF MONEY. HOWEVER, HERE A.O. HAS FAILED TO APPRECIATE THAT, WHY ANYONE WILL COMPLAIN WHEN, PRI CE AGREED WITH THAT PARTY IS RECEIVED BY IT, IN FULL. SINCE, NO PR ICE BEYOND THE DOCUMENTED PRICE WAS AGREED; NO QUESTION OF NON REC EIPT OF ANY PRICE IN CASH & ASSSESSEE MAKING ANY COMPLAINT FOR THAT ARISES. ALL IN ALL, THERE IS NO INDEPENDENT OR DIRECT EVIDENCE TO SUPPORT THE ALLEGATIONS OF MR.Y.P. TRIVEDI. THIS IS ALSO ADMITT ED BY THE A.O. AT PARA 9.1(C)(IV) OF THE ASSESSMENT ORDER, ON PAGE NO . 8, WHERE THE A.O. HIMSELF HAS OBSERVED THAT, THE EVIDENCE AVAILA BLE IS 'CIRCUMSTANTIAL'. 4.2 THE DECISION OF HONBLE SUPREME COURT IN THE CA SE OF MANISH MAHESHWARI WAS BROUGHT TO THE NOTICE OF THE LD.CIT( A). IT WAS ARGUED THAT THE A.O. HAS CONVENIENTLY OVERLOOKED TH E EVIDENCES BROUGHT TO HIS NOTICE, IN SUPPORT OF THE PREVAILING MARKET RATES (ENCLOSURE NOS. 14 & 15). THUS, IN ABSENCE OF ANY E VIDENCE IN SUPPORT OF THE ALLEGATION OF CASH PAYMENTS & SINCE THE ASSESSEE HAS BROUGHT ON RECORD THE EVIDENCES IN SUPPORT OF PREVA ILING MARKET PRICES (WHICH EVIDENCE IS NOT CONTROVERTED BY THE A .O.), A.O. CLEARLY ERRED IN TREATING THE ALLEGED CASH PAYMENTS OF RS.1 6,50,000/- AS UDI OF ASSESSEE. THIS IS FURTHER COMPOUNDED BY THE FACT THAT, A.O. HIMSELF HAS FOUND THE NOTINGS ON SEIZED PAPERS INCO NSISTENT. 10 4.3 IT WAS ARGUED THAT THE FALSITY OF ALLEGATION OF SHRI. TRIVEDI IS VERY MUCH EVIDENT. IT IS THE CLAIM OF SHRI TRIVEDI THAT, CASH PAYMENTS TO THE EXTENT OF RS.27,75,400/- WERE MADE AFTER EXECUTION OF REGISTERED DEVELOPMENT AGREEMENT, IN THE PRACTIC AL LIFE SITUATION THIS IS JUST IMPOSSIBLE, PARTICULARLY WHEN PARTNERS OF M/S RISHIRAJ BUILDERS AND DEVELOPERS & THE DIRECTORS OF ASSESSEE WERE NOT VERY MUCH CONVERSANT WITH EACH OTHER. IN THE CLANDESTINE TRANSACTIONS, IT IS COMMON KNOWLEDGE THAT, CASH COMPONENT, IF ANY, PASS ES HANDS BEFORE ANY LEGALLY ENFORCEABLE DOCUMENT IS EXECUTED . HERE THE RELEVANT DOCUMENTS WERE REGISTERED ON 04.10.1997 & THE ALLEGED CASH PAYMENTS TO THE TUNE OF RS.27,75,400/- WERE MA DE SUBSEQUENT TO THAT & THAT TOO IN INSTALLMENTS. THUS, THE ALLEG ATION OF SHRI TRIVEDI DOES NOT STAND TO THE PRACTICAL REAL LIFE SITUATION TEST. 4.4 IT WAS ARGUED THAT ON 11.08.2000 AN ACTION U/ S 132 WAS CARRIED OUT AGAINST THE ASSESSEE'S GROUP CONCERNS A ND & NO EVIDENCE WHATSOEVER WAS FOUND AGAINST THE ASSESSEE IN RELATI ON TO THE SAID TRANSACTIONS OF SALE OF PLOTS. 4.5 TWO AFFIDAVITS BY SHRI NARENDRA THAKKAR DENYIN G RECEIPT OF ANY CASH BEYOND THE DOCUMENTED CONSIDERATION, WERE SUBMITTED BY THE ASSESSEE. HOWEVER, A.O. HAS REJECTED BOTH THE S AID AFFIDAVITS BY BRANDING THEM AS 'SELF SERVING', WITHOUT MAKING ANY EFFORT TO ASCERTAIN THE VERACITY OF THE AFFIDAVITS. 5. BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE THE LD.CIT(A) DELETED THE ADDITION MADE BY THE AO BY OB SERVING AS UNDER : 11 5.3 FROM THE ABOVE, IT MAY BE SEEN THAT WHILE DETER MINING THE UNDISCLOSED INCOME OF THE APPELLANT, THE A.O. RELIED ON THE ENTRIES MADE IN THE AFORESAID SEIZED DOCUMENT, THE STATEMENT OF SHRI Y.P. TRIVEDI RECORDED ON 21/03/2005 AND HIS AFFIDAVITS D ATED 21/03/2005 IN RESPECT OF PLOT NO.23 AND NO.43 OF S.NO.705/2/1/ 3. THE APPELLANT ON THE OTHER HAND OBJECTED TO THE RELIANCE ON THE E NTRIES IN THE SAID SEIZED DOCUMENT COMPLETELY DISOWNING THE CONTENTS OF T HE SAID SEIZED DOCUMENT. THE APPELLANT ALSO ARGUED THAT AN AF FIDAVIT WAS FILED BY SHRI NARENDRA M.THAKKER DENYING THE RECEIPT OF A NY CASH AMOUNTS FROM M/S. RISHIRAJ BUILDERS & DEVELOPERS AND THEIR ASSOCI ATES. THE APPELLANT ALSO OBJECTED TO THE USE OF EVIDENCE FROM T HE SEIZED DOCUMENT RELYING ON THE DECISION IN THE CASE OF C.B.I . VS. V.C. SHUKLA REPORTED IN 3 SCC 410 [POPULARLY KNOWN AS JAIN HAWA LA DIARY CASE]. THE APPELLANT ALSO PLACED RELIANCE ON VARIOUS OTHER D ECISIONS REPORTED IN 18 TTJ 167 AND 70 TTJ 122. ON THE OTHER HAND, THE A.O. STATED THAT THE DECISION IN THE CASE OF JAIN HAWALA C ASE HAD NO RELEVANCE IN THE INCOME-TAX PROCEEDINGS AS IT MAINLY DEALT WITH ADMISSIBILITY OF EVIDENCE UNDER THE EVIDENCE ACT. THE SE ISSUES ARE DISCUSSED BELOW. 5.4 THE EVIDENTIAL VALUE OF A DOCUMENT FOUND AND SE IZED DURING THE COURSE OF SEARCH ACTION U/S.132 OF THE ACT WAS ELAB ORATELY DISCUSSED AFTER ANALYZING VARIOUS DECISIONS BY THE HON'BL E I.T.A.T., JABALPUR BENCH, JABALPUR, IN THE CASE OF SATYAPAL WA SSAN [295 ITR (AT) 352] AND OBSERVED AS UNDER: 'THE CRUX OF THESE DECISIONS IS THAT A DOCUMENT FOUND D URING THE COURSE OF SEARCH MUST BE A SPEAKING ONE AND WITHOUT ANY SECOND INTERPRETATION, MUST REFLECT ALL THE DETAILS ABOUT T HE TRANSACTIONS OF THE ASSESSEE IN THE RELEVANT ASSESSMENT YEAR. ANY GAP IN TH E VARIOUS COMPONENTS AS MENTIONED IN SECTION 4 OF THE INCOME-TA X ACT MUST BE FILLED UP BY THE ASSESSING OFFICER THROUGH INVESTIGATION S AND CORRELATIONS WITH THE OTHER MATERIAL FOUND EITHER DU RING THE COURSE OF THE SEARCH OR ON INVESTIGATION..' THUS, IN THE ABSENCE OF ANY CORROBORATIVE EVIDENCE, NO VALUE TO THE SEIZED DOCUMENT CAN BE ATTACHED. THE A.O. HAS NOT BRO UGHT ANY NEW MATERIAL OR CORROBORATIVE EVIDENCE EXCEPT RELYING O N THE SAME SEIZED DOCUMENT AND AFFIDAVITS OF SHRI Y.P.TRIVEDI. THE A.O . HAS NOT MADE ANY FURTHER ENQUIRIES OR VERIFICATIONS TO BRING FRESH MATERIAL FOR ESTABLISHING THAT THE CASH PAYMENTS MADE TO SHRI NAREND RA M.THAKKER AND HIS REPRESENTATIVES WERE ACTUALLY RELAT ED TO THE APPELLANT AND FORM THE UNDISCLOSED INCOME OF THE APPE LLANT. 5.5 AS PER THE SEIZED DOCUMENT, THE CASH PAYMENTS WER E STATED TO HAVE BEEN MADE TO SHRI NARENDRA M.THAKKER AND HIS RE PRESENTATIVES. SHRI NARENDRA M.THAKKER IS THE BROTHER OF THE DIRECT OR OF THE APPELLANT. SHRI NARENDRA M. THAKKER DENIED THE RECE IPT OF ANY CASH PAYMENTS AS MENTIONED IN THE SAID SEIZED DOCUMENT BY FI LING AN AFFIDAVIT DATED 26/03/2007. THE APPELLANT STATED THA T NO RELATION NOR THE CASH PAYMENTS WERE ESTABLISHED BY THE A.O. TO THEM IN CONNECTION WITH THE SAID PROPERTY TRANSACTIONS. NO EVI DENCE WAS BROUGHT ON RECORD BY THE A.O. TO DISPROVE THE CONTEN TS OF THE AFFIDAVIT. THE A.O. PREFERRED TO RELY ON THE AFFIDA VITS AND STATEMENT BY SHRI Y.P.TRIVEDI WHICH WERE NOT SUPPORTED BY ANY COR ROBORATIVE EVIDENCE. THE A.O. ALSO DID NOT GIVE ANY REASONS TO DISBELIEVE THE AFFIDAVIT OF SHRI NARENDRA M.THAKKER. THE AFFIDAVI T FILED BY SHRI NARENDRA M.THAKKER REMAINED UN-CONTROVERTED AND COU LD NOT HAVE BEEN IGNORED. THE AFFIDAVIT EVEN IF LEGARDED AS SELF- SERVING DID NOT LOOSE ITS EVIDENTIARY VALUE AS THERE WAS NO MATERIAL BR OUGHT ON 12 RECORD CONTRARY TO THE AVERMENTS, NOR THE A.O. MADE ANY INVESTIGATION TO SUPPORT THE AFFIDAVITS OR STATEMENT OF SHRI Y.P.TRIVEDI. NOTHING WAS SHOWN BY THE A.O. THAT THERE WAS OTHER CORROBORATIVE MATERIAL CORRELATED WITH THE SEIZED DO CUMENT. THE A.O. FAILED TO GIVE ANY EVIDENCE TO DISPROVE THE CONTENTS OF THE AFFIDAVIT FILED BY SHRI NARENDRA M.THAKKER. IN THE ABSENCE OF SUCH AN ACTION, THE ASSESSMENT OR UNDISCLOSED INCOME IN THE HANDS OF THE A PPELLANT CANNOT BE UPHELD. 5.6 IT MAY BE SEEN FROM THE ABOVE THAT AFTER THE CRO SS- EXAMINATION OF SHRI Y.P.TRIVEDI THAT THE ENTRIES IN THE SEIZED DOCUMENT AND REGISTER AND THE AFFIDAVIT WERE PREPARE D BY SHRI Y.P.TRIVEDI BASED ON THE INFORMATION VI GIVEN BY ONE SHRI SHASTRI. THESE INFORMATIONS WERE NOT CONFIRMED AND THE APPELL ANT QUESTIONED THE USE OF SUCH UNCONFIRMED INFORMATION AS EVIDENCE IN HIS CASE FOR MAKING AN ADDITION OF UNDISCLOSED INCOME. 5.7 ON THE OTHER HAND, THE A.O. STATED THAT SHRI SHA STRI WAS A TRUSTED MAN OF SHRI Y.P.TRIVEDI THEREFORE SHRI Y.P.T RIVEDI WAS FULLY AWARE OF THE ACTUAL FACTS AND CONSULTATIONS IN RESPECT OF THE PROPERTY TRANSACTIONS WITH SHRI NARENDRA THAKKER, WHO IS THE SHA REHOLDER OF THE APPELLANT. THE A.O. ALSO STATED THAT THE OTHER N AMES APPEARING IN THE SAID SEIZED IF DOCUMENTS WERE NOTHING BUT THE R EPRESENTATIVES OF SHRI NARENDRA THAKKER/APPELLANT. THE A.O'S STAND IN THIS REGARD IS NOT ACCEPTABLE BECAUSE THE SEIZED DOCUMENT WAS MA INTAINED BY SHRI Y.P.TRIVEDI BASED ON THE INFORMATION SUPPLIED B Y ONE SHRI SHASTRI. BUT NO EVIDENCE WAS BROUGHT ON RECORD BY WA Y OF A STATEMENT OR ANY OTHER MATERIAL CONFIRMING THE TRAN SACTIONS FROM SHRI SHASTRI. THEREFORE, THE ENTRIES MADE BASED ON TH E UNCONFIRMED TRANSACTIONS CANNOT BE USED AS EVIDENCE AGAINST THE APPE LLANT. 5.8 THE A.O. OVERLOOKED THE EVIDENCES FURNISHED BY TH E APPELLANT IN SUPPORT OF THE PREVAILING MARKET RATES IN RESPECT O F THE SAID PROPERTY TO PROVE THAT THERE WAS NO ELEMENT OF ON-MO NEY. THUS EVEN IF IT IS ASSUMED THAT THE CONTENTS OF THE SEIZED DOCUMEN T ARE CORRECT, UNLESS IT IS PROVED THAT THE AMOUNTS STATED IN THE SEIZED DOCUMENT WERE ACTUALLY PAID, ONE CANNOT COME TO THE CONCLUSIO N THAT THE TRANSACTIONS MENTIONED IN THE SEIZED DOCUMENT ARE CORR ECT - RELIANCE PLACED ON THE DECISION OF HON'BLE PRAIA HIG H COURT IN THE CASE OF K.C. AGNES (262 ITR 354). IF A DOCUMENT SEIZED DURING THE COURSE OF A SEARCH IS OPEN TO MORE THAN ONE POSSIBILITY OF INTERPRETATION AND DOES NOT PROVE CONCLUSIVELY THAT A NY MONEY WAS PAID TO THE APPELLANT, THEN NO ADDITION CAN BE MADE . THE A.O. FAILED TO BRING ON RECORD ANY MATERIAL OR EVIDENCE TO CORROBO RATE ALLEGATION REGARDING RECEIPT OF ON-MONEY BY THE APPELLANT. THE REFORE, NO ADDITION COULD BE MADE ON THE BASIS OF THE SAID SEIZED DOCUMENT SOLELY AS MATERIAL AVAILABLE WITH THE A.O. IS GROSSLY IN ADEQUATE. 5.9 THE A.O. FURTHER REJECTED THE APPELLANT'S RELIAN CE ON THE JAIN HAWALA DIARY CASE [CBI VS. V.C. SHUKLA - 3 SCC 410 (S C)] STATING THAT THE CIRCUMSTANCES OF THE PRESENT CASE ARE ENTIRELY DIF FERENT FROM THE CASE RELIED UPON BY THE APPELLANT ON THE GROUND THAT THE HON'BLE SUPREME COURT RULED AGAINST THE ADMISSIBILITY OF EVIDE NCE UNDER THE EVIDENCE ACT FOUND WITH THE THIRD PARTY FOR FRAMING CHARGES. THE A.O. HELD THAT THE EVIDENCE ACT IS NOT APPLICABLE IN THE STRICT SENSE TO THE INCOME-TAX PROCEEDINGS. THOUGH THE EVIDENCE ACT IS NO T APPLICABLE IN STRICT SENSE IN THE INCOME-TAX PROCEEDINGS, BUT THE PRINCIPLES LAID DOWN IN THE EVIDENCE ACT CANNOT BE IGNORED AS INCOME -TAX 13 PROCEEDINGS ARE QUASI-JUDICIAL. FURTHER, THE A.O. REL IED ON THE- PRE- PONDERANCE OF PROBABILITY WITHOUT PROVING THE PRE-P ONDERANCE OF PROBABILITY BY ANY OTHER EVIDENCE OR MATERIAL ON RE CORD. THUS, THE ADDITION MADE BY THE A.O. BASED ON THE SEIZED DOCUMEN T IS NOT ON THE BASIS OF GOOD EVIDENCE AND THERE IS NO PRE-PONDERANCE OF PROBABILITY. 5.10 SHRI Y.P.TRIVEDI CLAIMED FURTHER THAT THE CA SH PAYMENTS TO THE EXTENT OF RS.27,75,400/-WERE MADE AFTER EXECUTION O F THE REGISTERED DEVELOPMENT AGREEMENT. THE APPELLANT STATED THAT TH IS WAS A FALSE ALLEGATION AND ARGUED THAT IT WAS JUST IMPOSSIBLE, PAR TICULARLY WHEN THE PARTNERS OF M/S. RISHIRAJ BUILDERS & DEVELOPERS AND THE DIRECTORS OF THE APPELLANT WERE NOT VERY MUCH FAMILIAR WITH E ACH OTHER. FURTHER, IT WAS ARGUED THAT PAYMENT OF ANY ON-MONEY WAS UNCOMMON PARTICULARLY AFTER THE LEGALLY ENFORCEABLE DOCUMENT WAS EXECUTED. THE A.O. ALSO IGNORED THESE CLAIMS MADE BY SHRI Y.P.TRIVEDI AND THE CONTENTS OF SEIZED DOCUMENT ANNEXURE 'A-17' AND RELIED ONLY ON THE NOTINGS IN THE SEIZED DOCUMENT ANNEXURE ' A-2'. THUS, THE A.O. HAS NOT MAINTAINED ANY CONSISTENT STAND AND USE D THE EVIDENCE SELECTIVELY WITHOUT ANY CORROBORATIVE MATER IAL IN DETERMINING THE UNDISCLOSED INCOME OF THE APPELLANT. 6. IN VIEW OF THE ABOVE DISCUSSION, I AM OF THE CONSIDE RED OPINION THAT THE ASSESSMENT OF UNDISCLOSED INCOME IN THE CASE OF THE APPELLANT IS NOT JUSTIFIABLE. HENCE, I HEREBY DELETE THE ADDITION OF RS.16,50,000/- MADE BY THE A.O. IN THE BLOCK ASSESSMENT FOR THE PERIOD A.YS 1997-1998 TO 2003-2004. 6. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVE NUE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN DELETING THE ADDITION OF RS. 16,50, 000 /- AS THE INCOME FROM UNDISCLOSED SOURCES FOR THE BLOCK PERIOD. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED IN NOT APPRECIATING THE FACT THAT T HE A.O. HAS BROUGHT ON RECORD SUFFICIENT MATERIAL/EVIDENCE TO C ORROBORATE ALLEGATION REGARDING PAYMENT OF ON-MONEY AND ALSO TO SHOW THAT THE AFFIDAVIT FILED BY SHRI NARENDRA THAKKER WAS ONLY A N AFTER-THOUGHT AND SELF-SERVING. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED IN NOT APPRECIATING THE FACT THAT I F SECTION 132( 4A) IS INTERPRETED TO MEAN THAT THE PRESUMPTION THEREIN CA N BE DRAWN ONLY AGAINST PERSON FROM WHOM BOOKS AND OTHER DOCUMENTS A RE SEIZED AND NOT AGAINST ANY THIRD PERSON, THE RESULT WOULD BE A NOMALOUS. SUCH AN INTERPRETATION WOULD CREATE A SITUATION WHERE 'ONE FACT' WOULD BE TAKEN AS 'TRUE' IN CASE OF ONE PERSON WHILE THE 'SAME FAC T' WOULD BE TAKEN AS 'FALSE' IN CASE OF OTHER PERSON MENTIONED IN THE SA ME DOCUMENT. SUCH AN INTERPRETATION WOULD NOT ONLY BE BAD IN LAW BUT ALSO BAD ON THE COMMON PRINCIPLES OF LOGIC. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED IN NOT APPRECIATING THE FACT THAT, THE A.O. HAS BROUGHT ON RECORD SUFFICIENT MATERIAL/EVIDENCE TO C ORROBORATE ALLEGATION REGARDING PAYMENT OF ON-MONEY, AGAIN IN THIS PARTICULAR CASE, IT IS CLEARLY WRITTEN ON THE SEIZED DOCUMENT MARKED ANNEXURE A-2 14 SEIZED FROM THE RESIDENCE OF SHRI Y.P. TRIVEDI THAT CERTAIN PAYMENTS WERE MADE IN CASH BY M/S RISHIRAJ BUILDERS & DEVELO PERS ON VARIOUS DATES IN RESPECT OF LANDS / PLOTS PURCHASED / TAKEN FOR DEVELOPMENT BY M/S RISHIRAJ BUILDERS & DEVELOPERS FROM M/S VASUMA TI MARKETING PVT. LTD. & M/S MANOJ MARKETING PVT. LTD.,7, T NEAR NEHRU GARDEN , NASHIK . 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT (A) HAS ERRED IN NOT APPRECIATING THE FACT THAT THE A.O. HAS CLEARLY ANALYZED THE CONTENTS OF THE DOCUMENT TO ESTABLISH THE CREDIBILITY OF THE SAME AS A PIECE OF EVIDENCE AND THUS THE PRINCIPLE OF EVIDENCE ACT THAT AN EVIDENCE SHOULD HAVE DIRECT NEXUS WITH THE PROCEED INGS IN ISSUE IS AUTOMATICALLY OBSERVED. 6. THE ORDER OF CIT (A) BE VACATED AND THAT OF A.O . BE RESTORED. 7. THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY OBJ ECTED TO THE ORDER OF THE CIT(A). HE SUBMITTED THAT THE LD.CIT( A) DELETED THE ADDITION ON THE GROUND THAT PRESUMPTION U/S.132(4A) CANNOT BE APPLIED TO THIRD PARTIES. ALTHOUGH THE SAME IS PAR TIALLY CORRECT, HOWEVER, IT IS AN ADMITTED FACT THAT THE TRANSACTIO N HAS TAKEN PLACE, THE STATEMENTS WERE RECORDED, DOCUMENTS WERE FOUND, AFFIDAVITS HAVE BEEN FILED IN THE CROSS EXAMINATION. ALSO THE VEND OR SAYS THAT ON- MONEY WAS RECEIVED. HE SUBMITTED THAT THE AO HAS ANALYSED THE CONTENTS OF THE PAPER WHICH CORROBORATES ALLEGATION REGARDING THE PAYMENT OF ON-MONEY AND THE SAME HAS BEEN DISCUSSED IN DETAIL IN THE ASSESSMENT ORDER. THUS, THE AO HAS BROUGHT ON RECORD SUFFICIENT MATERIAL/EVIDENCE TO CORROBORATE ALLEGATION OF PAYM ENT OF ON-MONEY. FURTHER, THE AO HAS ALSO BROUGHT ENOUGH CORROBORATI VE EVIDENCE ON RECORD TO SHOW THAT THE AFFIDAVIT FILED BY SHRI NAR ENDRA M. THAKKER STATING THAT HE HAS NOT RECEIVED ANY CASH PAYMENT W AS ONLY AN AFTERTHOUGHT AND SELF SERVING. 7.1 REFERRING TO THE PROVISIONS OF SECTION 132(4A) HE SUBMITTED THAT AS PER THE SAID PROVISION THE CONTENTS OF BOOK S OF BOOKS OR OTHER 15 DOCUMENTS MAY BE PRESUMED TO BE TRUE. NOWHERE IT M ENTIONS THAT THE CONTENTS OF SUCH BOOKS OF ACCOUNT AND THE OTHER DOCUMENTS ARE TRUE CAN BE DRAWN ONLY AGAINST PERSON FROM WHOM BOO KS AND OTHER DOCUMENTS ARE SEIZED AND NOT AGAINST ANY THIRD PERS ON. IT IS A PRESUMPTION THAT WOULD HOLD GOOD EVEN IN THE CASES OF OTHER PERSONS WHO ARE CONCERNED WITH THE ENTRIES IN THOSE BOOKS O R DOCUMENTS. OTHERWISE THE RESULT WOULD BE ANAMOLOUS. SUCH INTE RPRETATION WOULD CREATE A SITUATION WHERE ONE FACT WOULD BE TAKEN AS TRUE IN CASE OF ONE PERSON WHILE THE SAME FACT WOULD BE TAKEN AS FA LSE IN CASE OF OTHER PERSON MENTIONED IN THE SAME DOCUMENT. SUCH INTERPRETATION WOULD NOT ONLY BE BAD IN LAW BUT ALSO BAD ON COMMON PRINCIPLES OF LOGIC. HE SUBMITTED THAT IN THIS PARTICULAR CASE I T IS CLEARLY WRITTEN ON THE SEIZED PAPERS THAT THE PAYMENTS OF A CERTAIN AM OUNT HAS BEEN MADE IN CASH TO M/S. MANOJ MARKETING PVT. LTD. IT I S ALSO WRITTEN THAT THE CASH PAYMENTS WERE MADE TO M/S. MANOJ MARKETING PVT LTD. THROUGH SHRI NARENDRA THAKKER AND HIS REPRESENTATIV ES. THIS FACT WAS ALSO CONFIRMED BY SHRI Y.P. TRIVEDI IN HIS STATEMEN T RECORDED ON 21- 01-2005 AS PAYMENTS ACTUALLY MADE. SO THERE IS NO REASON WHY THE CONTENTS OF THOSE PAPERS SHOULD NOT BE PRESUMED TO BE TRUE AGAINST M/S. MANOJ MARKETING PVT LTD. WHICH IS ACTUALLY A P ARTY TO THE AGREEMENT WITH THE PURCHASERS ALONG WITH M/S VASUMA TI MARKETING PVT. LTD. HE SUBMITTED THAT THE LD. CIT (A) HIMSEL F HAS ACCEPTED THAT THE EVIDENCE ACT IS NOT APPLICABLE IN STRICT S ENSE SINCE IN THE INCOME-TAX PROCEEDINGS, BUT FURTHER OBSERVED THAT T HE PRINCIPLES LAID DOWN IN THE EVIDENCE ACT CANNOT BE IGNORED AS INCOM E-TAX PROCEEDINGS ARE QUASI-JUDICIAL. THIS IS SELF CONTRA DICTORY. HE 16 SUBMITTED THAT THE AO HAS CLEARLY ANALYZED THE CONTENTS OF THE DOCUMENT TO ESTABLISH THE CREDIBILITY OF THE SAME A S A PIECE OF EVIDENCE. THUS THE PRINCIPLE OF EVIDENCE ACT THAT A N EVIDENCE SHOULD HAVE DIRECT NEXUS WITH THE PROCEEDINGS IN ISSUE IS AUTOMATICALLY OBSERVED. HE ACCORDINGLY SUBMITTED THAT THE ORDER OF THE CIT(A) BE REVERSED AND THAT OF THE ORDER OF THE AO BE RESTORE D. 8. THE LD. COUNSEL FOR THE ASSESSEE ON THE OTHER HA ND SUPPORTED THE ORDER OF THE CIT(A). HE SUBMITTED THAT DURING THE COURSE OF SEARCH ON RISHIRAJ BUILDERS AND DEVELOPERS CERTAIN DOCUMENTS WERE FOUND ACCORDING TO WHICH TWO PLOTS BEING NOS.23 AND 32 WERE SOLD BY M/S. MANOJ MARKETING PVT. LTD. AND M/S. VASUMATI MARKETING PVT. LTD. BOTH THESE COMPANIES ARE HAVING EQUAL SH ARE IN BOTH THE PLOTS. PLOT NO.43 WAS SOLD FOR RS.4,29,000/- WHICH WAS RECEIVED BY CHEQUE. SIMILARLY, PLOT NO.23 WAS SOLD FOR RS.4,26 ,866/- AND THE AMOUNT WAS ALSO RECEIVED BY CHEQUE. REFERRING TO P AGE 10 OF THE PAPER BOOK HE SUBMITTED THAT RISHIRAJ BUILDERS AND DEVELOPERS HAS CONSTRUCTED 2 BUILDINGS NAMELY BHAVIK AND BHARGA V. ACCORDING TO THE SAID PAPER CASH PAYMENT WAS RS.57,75,370/- A ND CHEQUE PAYMENT WAS RS.18,11,274/-. HE SUBMITTED THAT THE ASSESSEE HAS RECEIVED CHEQUE AMOUNT OF RS.4,29,000/- AND RS.4,26 ,866/-. REFERRING TO PAPER BOOK PAGES 11 TO 18 HE SUBMITTED THAT THE TOTAL AMOUNT OF ON-MONEY COMES TO RS.33 LAKHS AS PER THES E PAPERS. REFERRING TO PAGE 50 OF THE PAPER BOOK HE SUBMITTED THAT IN THE AFFIDAVIT FILED BY SHRI Y.P. TRIVEDI THE CASH COMPO NENT OF RS.57,75,400/- HAS BEEN PAID TO SHRI NARENDERA M. T HAKKER. REFERRING TO PAGES 44 TO 49 OF THE PAPER BOOK HE SU BMITTED THAT IN THE 17 CROSS EXAMINATION, SHRI Y.P. TRIVEDI, IN HIS REPLY TO QUESTION NO.3, HAS STATED THAT HE HAS NOT MADE ANY OF ABOVE PAYMEN TS PERSONALLY. IT WAS MADE BY HIS OFFICE MANAGER ON HIS BEHALF AND AT THE RELEVANT TIME THE OFFICE MANAGER WAS AMULYA SHASTRI. HE SUB MITTED THAT SHRI Y.P.TRIVEDI IS PLACING PURE RELIANCE ON SHRI SHASTR I WHO IS A TRUSTED EMPLOYEE. HOWEVER, HE SAYS RS.57 LAKHS AND NOT RS. 33 LAKHS HAS BEEN PAID AS ON-MONEY. HE SUBMITTED THAT EVEN THE CHEQUE PAYMENT DOES NOT TALLY WHICH IS NOTED ON THE SEIZED PAPER. SIMILARLY, CASH PAYMENTS FROM THE SEIZED PAPERS SHOW RS.57,75,370/- WHEREAS AS PER THE STATEMENT OF SHRI Y.P. TRIVEDI IT IS RS.57,75,0 00/-. HOWEVER, THE AO DOES NOT BELIEVE ALL THESE THINGS AND HE MAKES A DDITION OF RS.16,50,000/- BEING SHARE OF THE ASSESSEE OUT OF T OTAL PAYMENT OF RS.33 LAKHS TO ASSESSEE AND M/S. VASUMATI MARKETING PVT. LTD. HE SUBMITTED THAT NO ADDITION HAS BEEN MADE IN THE HAN DS OF M/S. VASUMATI MARKETING PVT. LTD. HE SUBMITTED THAT W HEN SHRI Y.P. TRIVEDI STATES THAT ALL PAYMENTS WERE MADE BY SHRI SHASTRI AND HE DOES NOT KNOW ANYTHING PERSONALLY AND ALL NEGOTIATI ONS AND PAYMENTS WERE MADE BY SHRI SHASTRI, THEREFORE, MAKI NG THE ADDITION ON THE BASIS OF AFFIDAVIT GIVEN BY SHRI Y.P. TRIVED I IS NOT JUSTIFIED. 8.1 THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THA T AS PER THE PROVISIONS OF SECTION 132(4A) THE SEIZED PAPERS FOU ND FROM THE PREMISES OF RISHIRAJ BUILDERS AND DEVELOPERS CAN BE HELD AS TRUE, GENUINE AND CORRECT IN THE CASE OF RISHIRAJ BUILDER S AND DEVELOPERS AND NOT WITH ANY OTHER PERSON. ALTHOUGH, THERE IS NO DISPUTE REGARDING TRANSACTION WITH M/S. MANOJ MARKETING PVT . LTD., HOWEVER, THERE IS NO OTHER CORROBORATIVE EVIDENCE. M/S. MAN OJ MARKETING PVT. 18 LTD. AND RISHIRAJ BUILDERS AND DEVELOPERS ARE NOT R ELATED PARTIES. NO MOU, NO RECEIPT, NO SIGNATURE OF ASSESSEE IN TOKEN OF RECEIPT OF ANY ON-MONEY WAS FOUND. THE AO HIMSELF HAS REJECTED TH E AFFIDAVIT OF SHRI Y.P. TRIVEDI. THEREFORE, MERE AFFIDAVIT/SEIZE D PAPER CANNOT BE THE BASIS FOR ADDITION. HE SUBMITTED THAT SHRI SHA STRI MAY BE CLOSE ASSOCIATE OF SHRI Y.P. TRIVEDI. HOWEVER, THE STATE MENT OF SHRI SHASTRI WAS NEVER RECORDED. THERE IS ALSO POSSIBIL ITY THAT SHRI SHASTRI MIGHT HAVE POCKETED THE MONEY. REFERRING TO VARIOU S DECISIONS HE SUBMITTED THAT ADDITION IN THE HANDS OF THIRD PARTY ON THE BASIS OF UNCORROBORATED DOCUMENT IS NOT JUSTIFIED. AN INCOR RECT AFFIDAVIT CANNOT BE ACCEPTED AS TRUE AND GENUINE AND ADDITION CANNOT BE MADE IN THE HANDS OF THE ASSESSEE. HE SUBMITTED THAT IF RS.57 LAKHS HAS BEEN PAID TO THE ASSESSEE AS ALLEGED, THEN THE CHEQ UE PAYMENT ALSO SHOULD HAVE TALLIED. REFERRING TO THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF SHRI JITENDRA M. THAKKA R HE SUBMITTED THAT UNDER IDENTICAL FACTS AND CIRCUMSTANCES THE TR IBUNAL HAS DELETED THE ADDITION. HE ACCORDINGLY SUBMITTED THAT THE OR DER OF THE CIT(A) BE UPHELD AND THE GROUNDS RAISED BY THE REVENUE BE DISMISSED. 8.2 THE LD. DEPARTMENTAL REPRESENTATIVE IN HIS REJO INDER SUBMITTED THAT THE DEPARTMENT ALWAYS WANTED TO TAX THE UNACCOUNTED PORTION IN THE HANDS OF M/S. VASUMATI MARKETING PVT . LTD. HOWEVER, DUE TO SOME LAPSES NO ADDITION COULD BE MADE IN THE HANDS OF M/S. VASUMATI MARKETING PVT. LTD. HOWEVER, THAT CANNOT BE THE GROUND NOT TO ADD THE UNACCOUNTED ON-MONEY IN THE HANDS OF THE ASSESSEE. 19 9. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. I N THIS CASE THE ASSESSEE M/S. MANOJ MARKETING PVT. LTD. AND M/S. VA SUMATI MARKETING PVT. LTD WHO ARE THE OWNERS OF PLOT NO. 23 AND 43 HAVING EQUAL SHARE IN THESE PLOTS HAVE SOLD THESE PLOTS TO M/S. RISHIRAJ BUILDERS AND DEVELOPERS. DURING THE COURSE OF SEAR CH ACTION IN THE PREMISES OF RISHIRAJ BUILDERS AND DEVELOPERS AND IT S PARTNERS CERTAIN DOCUMENTS WERE SEIZED WHICH ACCORDING TO THE REVENU E CONTAINED PAYMENT OF SOME ON-MONEY TO THE ASSESSEE AND M/S. V ASUMATI MARKETING PVT. LTD. ON THE BASIS OF THE FINDINGS I N THE CASE OF RISHIRAJ BUILDERS AND DEVELOPERS THE ASSESSING OFFI CER OF THE ABOVE CONCERN INTIMATED TO THE ASSESSING OFFICER HAVING JURISDICTION OVER THE ASSESSEE REGARDING THE RECEIPT OF ON-MONEY. IN RESPONSE TO NOTICE ISSUED U/S.158BD THE ASSESSEE FILED NIL UNDISCLOSED INCOME. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ON BEIN G CONFRONTED BY THE ASSESSING OFFICER THE ASSESSEE STRONGLY DENIED TO HAVE RECEIVED ANY ON-MONEY. HOWEVER, THE ASSESSING OFFICER RELYI NG ON THE ENTRIES FOUND IN THE SEIZED PAPERS AND THE STATEMEN T AND AFFIDAVIT OF SHRI Y.P. TRIVEDI MADE ADDITION OF RS.16,50,000/- B EING THE SHARE OF ON-MONEY RECEIVED BY THE ASSESSEE AS HIS UNDISCLOSE D INCOME. 9.1 FROM THE VARIOUS SEIZED DOCUMENTS PLACED IN THE PAPER BOOK WHICH IS THE BASIS OF THE ADDITION IN THE HANDS OF THE ASSESSEE WE FIND NOWHERE THE NAME OF THE ASSESSEE APPEARS. SIMILARL Y, NAME OF THE ASSESSEE ALSO DOES NOT FIGURE IN ANY OF THE STATEME NT RECORDED 20 U/S.132(4). FROM THE CONTENTS OF THE AFFIDAVIT, WE FIND SHRI Y.P. TRIVEDI HAS STATED TO HAVE MADE CASH PAYMENT OF RS. 57,75,400/- TO SHRI NARENDER M. THAKKER, GENERAL POWER OF ATTORNEY HOLDER. HOWEVER, THE ASSESSING OFFICER HAS NOT ACTED UPON THE FIGURES MENTIONED IN THE AFFIDAVIT AND HAS PROCEEDED TO REL Y ON THE SEIZED PAPERS ACCORDING TO WHICH THE ON-MONEY AMOUNT IS RS .33 LAKHS. FROM THE STATEMENT RECORDED OF SHRI Y.P.TRIVEDI DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS ON 23-04-2007 WE FIND SHRI Y .P. TRIVEDI IN HIS REPLY TO QUESTION NO.3 HAS STATED THAT HE HAS N OT MADE ANY OF THE ABOVE PAYMENTS PERSONALLY AND IT WAS MADE BY HIS OF FICE MANAGER MR. AMULYA SHASTRI ON HIS BEHALF. SIMILARLY, IN HI S REPLY TO QUESTION NO.6 HE SAYS THAT HE HAS PREPARED THESE PARTICULARS ON THE BASIS OF DISCUSSION WITH SHRI JHALA AND SHRI SHASTRI. EVEN IN QUESTION NO.10 HE HAD STATED THAT HE DID NOT VERIFY THE PAYMENTS R ELATING TO THE TRANSACTIONS OF PLOT NOS. 23 & 43 MADE BY SHRI SHAS TRI SINCE HE HAS FULL FAITH IN HIM. IN QUESTION NO.11 HE SAYS THAT THE NEGOTIATIONS REGARDING THE PURCHASE OF THE PLOT NOS. 23 AND 43 W ERE HELD BY SHRI SHASTRI. THEREFORE, WE FIND SOME FORCE IN THE ARGU MENT OF THE LD. COUNSEL FOR THE ASSESSEE THAT IT IS SHRI SHASTRI WH O MIGHT HAVE PLAYED A FOUL PLAY AND MIGHT HAVE POCKETED THE MONEY. IT IS INTERESTING TO NOTE THAT AT NO POINT OF TIME THE ASSESSING OFFICER HAS SUMMONED SHRI SHASTRI TO VERIFY THE VERACITY OF THE TRANSACT IONS. NOTHING HAS BEEN BROUGHT ON RECORD TO SUPPORT THE CASE OF THE R EVENUE THAT THE PREVAILING MARKET RATES IN RESPECT OF THE SAID PROP ERTIES ARE MUCH MORE THAN THE DOCUMENTED PRICE. THE AFFIDAVIT FILE D BY SHRI NARENDRA M. THAKKAR DENYING RECEIPT OF ANY ON-MONEY REMAINS 21 UNCONTROVERTED AND THE ASSESSING OFFICER HAS NOT GI VEN ANY REASON AS TO WHY THE SAME HAS TO BE DISCARDED. FURTHER, WE F IND ALTHOUGH M/S. VASUMATI MARKETING PVT. LTD. WAS HAVING EQUAL SHARE IN BOTH THE PLOTS, HOWEVER, NO ADDITION HAS BEEN MADE IN THE HA NDS OF M/S. VASUMATI MARKETING PVT. LTD. ON ACCOUNT OF SUCH ON- MONEY. 9.2 WE FIND AN IDENTICAL ISSUE HAD COME UP BEFORE T HE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF SHRI JITENDRA M. THA KKAR (SUPRA). IN THAT CASE ALSO THE AO DURING THE COURSE OF BLOCK AS SESSMENT PROCEEDINGS IN THE CASE OF RISHIRAJ BUILDERS AND DE VELOPERS FOUND CERTAIN ENTRIES REGARDING CASH PAYMENTS MADE ON VAR IOUS DATES AGAINST THE DEVELOPMENT AGREEMENT OF PLOT NOS.42 AN D 33 TO SHRI NARENDRA M. THAKKER BY RISHIRAJ BUILDERS AND DEVELO PERS. THE ASSESSEE WAS A GENERAL POWER OF ATTORNEY HOLDER IN RESPECT OF THE SAID PROPERTY. DURING THE ASSESSMENT PROCEEDINGS I N THE CASE OF MR. J.M. THAKKAR, THE AO PROVIDED MATERIAL FOUND DURING THE PROCEEDINGS U/S.132(4) IN THE PREMISES OF SHRI Y.P. TRIVEDI, PARTNER OF M/S. RISHIRAJ BUILDERS AND DEVELOPERS. REJECTIN G THE EXPLANATION GIVEN BY THE ASSESSEE, ADDITION WAS MADE IN THE HAN DS OF THE ASSESSEE ON ACCOUNT OF ON-MONEY PAYMENT. IN APPEAL THE LD.C IT(A) DELETED THE ADDITION ON THE GROUND THAT THE SEIZED DOCUMENT WAS MAINTAINED BY SHRI Y.P. TRIVEDI BASED ON THE INFORMATION SUPPL IED BY SHRI SHASTRI AND THERE WAS NO EVIDENCE ON RECORD CONFIRM ING THE TRANSACTIONS FROM SHRI SHASTRI. ENTRIES BASED ON T HE UNCONFIRMED TRANSACTIONS CANNOT BE USED AS EVIDENCE AGAINST THE ASSESSEE. FURTHER, THERE WAS NO CORROBORATIVE EVIDENCE FOUND DURING THE COURSE OF SEARCH AND THEREFORE NO VALUE CAN BE ATTACHED TO THE SEIZED 22 DOCUMENTS. THE RELEVANT OBSERVATION OF THE TRIBUNA L FROM PARA 6 ONWARDS READ AS UNDER : 6. SO FAR MERITS OF ADDITION IS CONCERNED, WE FIND T HAT THE A.O HAS DETERMINED THE UNDISCLOSED INCOME IN QUESTION IN THE H ANDS OF THE ASSESSEE RELYING UPON THE ENTRIES MADE IN THE SEIZED DOCU MENTS FOUND DURING THE COURSE OF SEARCH AND SEIZURE OPERATI ONS IN THE CASE OF M/S. RISHIRAJ BUILDERS & DEVELOPERS AND ITS PARTNERS, STATEMENTS OF SHRI Y.P. TRIVEDI RECORDED ON 21 ST MARCH 2005 AND HIS AFFIDAVIT DATED 21 ST MARCH 2005 IN RESPECT OF PLOT NOS. 33 AND 42. AS PER THE SEIZED DOCUMENTS, AN AMOUNT OF RS. 9,45,000/- WAS STATED TO HAVE BEEN PAID TO SHRI NARENDRA M. THAKKER AND HIS REPRESE NTATIVE ON VARIOUS DATES IN RESPECT OF PLOT NO. 42 AND SIMILARLY, AN AMOUNT OF RS. 26,09,350/- IN RESPECT OF PLOT NO. 33. THE ASSESSEE OBJE CTED THE RELIANCE ON THE ENTRIES IN THE SAID SEIZED DOCUMENT D ISOWNING THE CONTENTS OF THOSE SEIZED DOCUMENTS. IT WAS ALSO CONTENDE D THAT IN HIS AFFIDAVIT, SHRI NARENDRA M. THAKKER (BROTHER OF THE ASSESSEE) HAS DENIED RECEIPT OF ANY CASH AMOUNT FROM M/S. RISHIRAJ B UILDERS & DEVELOPERS AND THEIR ASSOCIATES. IT WAS SUBMITTED THAT TH E A.O HIMSELF IN THE CASE OF M/S. RISHIRAJ BUILDERS & DEVELOPE RS HAS DISBELIEVED AND DID NOT ALLOW THE SAID PAYMENTS WHILE FRAMING THE ASSESSMENT. EVEN AFFIDAVITS FILED BY SHRI Y.P. TRIVEDI R EGARDING THE SAID CASH PAYMENTS MADE TO SHRI NARENDRA M. THAKKER BA SED ON THE SEIZED DOCUMENT WERE NOT CONSIDERED BY THE A.O. THE A .O., HOWEVER, CONSIDERED THE CONTENTS OF SAME SEIZED DOCUMENT ALONG W ITH THE AFFIDAVIT OF SHRI TRIVEDI FOR ASSUMING JURISDICTION U/ S. 158 BD OF THE ACT AND FOR MAKING AN ADDITION IN THE HANDS OF THE A SSESSEE WITHOUT BRINGING ANY NEW EVIDENCE OR FRESH MATERIAL ON RECOR D. IT WAS CONTENDED THAT THE A.O DID NOT MAKE ANY FURTHER EFF ORTS TO BRING FURTHER MATERIAL FOR ESTABLISHING THAT THE CASH PAYMEN TS MADE TO SHRI NARENDRA M. THAKKER AND HIS REPRESENTATIVES WERE ACTUA LLY UNDISCLOSED INCOME OF SHRI JITENDRA M. THAKKER I.E. T HE ASSESSEE. IT WAS SUBMITTED THAT THE A.O HAS APPLIED THE PREPONDERAN CE OF PROBABILITIES WITHOUT THE PREPONDERANCE OF PROBABILI TY BY ANY OTHER EVIDENCE OR MATERIAL ON RECORD. IT WAS CONTENDED BY THE ASSESSEE THAT NO RELATION NOR THE CASH PAYMENTS WERE ESTABLISHED BY THE A.O TO HIM IN CONNECTION WITH THE SAID PROPERTY TRANSACTI ONS. IT WAS SUBMITTED THAT EVEN AT REMAND STAGE, THE A.O DID NOT BRING ON RECORD ANY EVIDENCE TO DISPROVE THE CONTENTS OF AFFIDAVIT DA TED 26.3.2007 BY SHRI NARENDRA M. THAKKER DENYING THE RECEIPT OF ANY CASH PAYMENT AS MENTIONED IN THE ABOVE STATED SEIZED DOCUMENT. IT W AS POINTED OUT THAT IN THE CASE OF SHRI PARAJI ABAJI KARANJKAR, THE ACIT CENTRAL CIRCULE III, NASIK HAS EXAMINED SHRI NARENDRA M. THAK KER U/S. 131 OF THE ACT WHEREIN ALSO SHRI NARENDRA M. THAKKER HAS FLA TLY DENIED ANY KNOWLEDGE ABOUT THE TRANSACTIONS. WE FIND FROM THE FI RST APPELLATE ORDER THAT THE LD CIT(A) WHILE ACCEPTING THE CONTEN TION OF THE ASSESSEE THAT OPPORTUNITY TO CROSS-EXAMINE SHRI Y.P.TRIV EDI WAS NOT GRANTED TO THE ASSESSEE, HAD DIRECTED THE A.O TO GRANT THE OPPORTUNITY OF CROSS-EXAMINATION OF SHRI Y.P. TRIVED I TO THE ASSESSEE. THE SAME WAS COMPLIED WITH. ON THE BASIS OF THAT CROSS-E XAMINATION GRANTED ON 3 RD MARCH 2008, THE ASSESSEE MADE FOLLOWING SUBMISSIONS REPRODUCED AT PAGE NO. 20 & 21 OF THE FIRST APPELLAT E ORDER: 'FROM THE CROSS-EXAMINATION OF SHRI Y.P. TRIVEDI, PA RTNER OF M/S. RUSH/RAJ BUILDERS & DEVELOPERS, FOLLOWING POSIT/ON EMER GES. 23 1.1 THE SEIZED DIARY, IN WHICH ALLEGED PAYMENTS TO N ARENDRA THAKKER ARE NOTED, WAS WRITTEN BY SHRI. Y.P. TRIVEDI (PLEASE REFER SECOND PARA OF ANSWER TO Q.NO.13). 1.2 MR. Y.P. TRIVEDI, AUTHOR OF THE SEIZED DIARY, W AS NEITHER INVOLVED IN NEGOTIATION OF ANY OF THE TRANSACTIONS OF PLOT NOS. 33 AS WELL AS 42 NOR IN MAKING ACTUAL PAYMENTS AGAINST THE S AID TRANSACTIONS (PLEASE REFER SECOND PARA OF ANSWER TO Q.NO .13). 1.3 MR.Y.P. TRIVEDI NEVER MADE ANY PAYMENT TO MR. NARENDRA THAKKER OR ANY OF HIS FAMILY MEMBERS , IN RESPECT OF T HE TRANSACTIONS RELATING TO PLOT NO.33 AND 42, ON ONE TO ONE BASIS (P LEASE REFER ANSWER TO Q.NO.14). 1.4 ENTRIES IN THE SEIZED DIARY WERE MADE BY SHRI Y. P. TRIVEDI ONLY ON THE BASIS OF INFORMATION SUPPLIED TO HIM BY ON E SHRI. AMULYA SHASTRI, WHICH INFORMATION WAS NEVER CROSS VERIFIED BY SHRI. Y.P. TRIVEDI FROM RECIPIENT OF MONEY (PLEASE REFER ANSWER TO Q.NO.15). 1.5 THE AFFIDAVIT SUBMITTED BY SHRI. Y.P. TRIVEDI, IN THE CASE OF M/S. RISHIRAJ BUILDERS AND DEVELOPERS WAS PREPARED AND SU BMITTED ON THE BASIS OF ENTRIES IN THE SEIZED DIARY AND REGISTER , WRITTEN ON THE BASIS OF UNCONFIRMED INFORMATION SUPPLIED BY SHRI. AMU LYA SHASTRI (PLEASE REFER PARA 3 OF ANSWER TO Q. NO. 12). THUS, IN VIEW OF THE INFORMATION, GIVEN DURING THE C OURSE OF CROSS- EXAMINATION BY SHRI. Y.P.TRIVEDI, IT IS EVIDENT THA T, THE ENTRIES IN THE SEIZED DIARY AND REGISTER AND THE AFFIDAVIT PREPARED BY SHRI. Y.P. TRIVEDI ARE NOT BASED ON CONFIRMED INFORMATION. THUS, ALL THESE EVIDENCES CANNOT BE USED AGAINST THE APPELLANT, IN SUPP ORT OF THE ALLEGATION THAT APPELLANT RECEIVED ANY CASH FROM M/S. RUSHIRAJ BUILDERS AND DEVELOPERS, IN CONNECTION WITH THE TRAN SACTIONS OF PLOT NOS. 33 AND 42. THESE ARE NO GOOD EVIDENCES, WHICH CAN BE USED AGAINST APPELLANT. 2.1 AS REGARDS THE TRANSACTION OF PLOT NO.33 IT IS ADMI TTED BY SHRI. Y.P.TRIVEDI THAT, THE SAID PLOT BELONGED TO MR. KAR ANJKAR AND MR. NAVANI, BY VIRTUE OF CONVEYANCE EXECUTED IN JULY, 1 994 (PLEASE REFER ANSWERS TO Q.NO.5 & 6). IT WAS OBTAINED BY M/S. RISHIRAJ BUILDERS AND DEVELOPERS FROM SAID OWNERS OF PLOT NO. 33 I.E. M R. KARANJKAR AND MR. NAVANI, UNDER A REGISTERED DEVELOPMENT AGREE MENT AND A POWER OF ATTORNEY EXECUTED IN 1997 (PLEASE REFER ANSW ERS TO Q.NO.7). 2.2. IN ANSWER TO Q.NO.9 IT IS STATED BY SHRI Y.P. TRI VEDI, THAT A BUILDING WAS CONSTRUCTED ON PLOT NO. 33, WHICH, AS PER ANSWER TO Q.NO.LL, WAS SOLD TO PRATIKSHA CO. OP. HOUSING SOCIETY BY A SALE DEED EXECUTED IN 1998. IN THIS SALE DEED ALSO THE EXECUTING PARTIES ARE - 1. MR. KARANJKAR AND MR. NAVANI (OWNERS OF LAND AS VENDO RS) 2. M/S. RUSHIRAJ BUILDERS AND DEVELOPERS (DEVELOPER OF PROPERT Y AS CONFIRMING PARTY) AND 3. PRATIKSHA CO.OP. HOUSING SOC IETY (SOCIETY OF HOLDERS OF RESIDENTIAL UNITS AS PURCHASER). IT IS CONCEDE D BY SHRI. Y.P. TRIVEDI IN THE CONCLUDING PART OF ANSWER TO Q.NO.LL THAT, NONE OF THE THAKKERS WERE EITHER PARTY TO ANY OF THE DOCUMENTS I N RELATION TO PLOT NO.33 OR WERE PAID ANY CONSIDERATION AGAINST THE TRANSACTION OF PLOT NO.33 UNDER ANY OF THE SAID DOCUMENTS. 24 2.3 IT IS ALSO CONCEDED BY SHRI. Y.P. TRIVEDI (SECOND PARA OF ANSWER TO Q.NO.13 ON PAGE NO. 7) THAT, ALONG WITH THE NAME OF NARENDRA THAKKER NAMES OF PATE/ AND BHANUBHAI ALSO APPEARED IN THE NOTINGS IN THE SEIZED DIARY. HOWEVER, HE FAILED TO PROPERLY EXPLAIN, WHY THE PAYMENTS SHOULD BE TREATED AS MADE TO NARENDRA THAKKER AND NOT TO PATE/ OR TO BHANUBHAI. HE ALSO FAILED TO BRING OUT A NY REASON FOR MAKING PAYMENTS TO NARENDRA THAKKER, IN RELATION TO THE TRANSACTION OF PLOT NO. 33, WHEN HE WAS NOT A PARTY TO ANY OF TH E DOCUMENTS OR HAD ANY INTEREST IN THE PROPERTY AT PLOT NO. 33. FUR THER, NO REASON FOR ALLEGING THE CASH PAYMENTS TO THE APPELLANT (I.EJITEN DRA THAKKER) IS COMING OUT OF ANY OF THE DOCUMENTS, STATEMENT OF SHRI . Y.P. TRIVEDI, SEIZED MATERIAL, AFFIDAVIT OF SHRI. Y.P. TRIVEDI AND HIS CROSS- EXAMINATION. FROM THE ABOVE, IT IS EVIDENT THAT, THERE IS NO VAL ID REASON FOR M/S.RUSHIRAJ BUILDERS AND DEVELOPERS TO MAKE ANY PAYMEN T TO THE APPELLANT AGAINST THE TRANSACTION OF PLOT NO. 33. 3. IN ANSWER TO Q.NO.12, IT IS STATED BY SHRI. Y.P. TR IVEDI, THAT THE PROPERTY AT PLOT NO. 42 ORIGINALLY BELONGED TO MAHA RASHTRA PRABODHAN SEVA MANDAL, WHICH WAS GIVEN ON DEVELOPMEN T AGREEMENT TO M/S. PRASAD DEVELOPERS . M/S. PRASAD DEVELO PERS, IN IT'S TURN ENTERED INTO AN AGREEMENT OF SALE FOR PLOT NO. 42 WITH MR. PARAJI KARANJKAR. IT IS ON THE STRENGTH OF THE RIGHTS ACQUIRED BY SHRI. PARAJI KARANJKAR, UNDER THE AGREEMENT TO SALE WITH M /S. PRASAD DEVELOPERS, M/S. RUSHIRAJ BUILDERS AND DEVELOPERS ENTER ED INTO DEVELOPMENT AGREEMENT WITH MR. PARAJI KARANKAR. IT WAS ONLY BECAUSE THE RIGHTS OF MR. KARANJKAR WERE UNDER AN AGR EEMENT TO SALE, M/S. PRASAD DEVELOPERS AND MAHRASHTRA PRABODHAN SEVA MA NDAL WERE ADDED AS CONFIRMING PARTY IN THE DEVELOPMENT AG REEMENT. IT IS CONCEDED BY SHRI. Y.P. TRIVEDI IN HIS ANSWER TO Q.NO. 12 THAT, AS PER THE DEVELOPMENT AGREEMENT, M/S. RUSHIRAJ BUILDERS AND DEVELOPERS, DID NOT PAY ANY CONSIDERATION TO MAHARASHTRA PRABODH AN SEVA MANDAL OR M/S. PRASAD DEVELOPERS. IT IS FURTHER CONCEDE D IN ANSWER TO Q.NO.12, BY SHRI. Y.P. TRIVEDI THAT, THAKKER WER E NOT A PARTY, IN THEIR OWN CAPACITY, TO THE DEVELOPMENT AGREEMENT. T HUS, IN ABSENCE OF ANY RIGHT IN THE PROPERTY OF PLOT NO. 42 THERE C AN NOT BE ANY REASON FOR M/S. RUSHIRAJ BUILDERS AND DEVELOPERS TO MAKE ANY PAYMENT TO THAKKER. IN VIEW OF THE INFORMATION COMING OUT OF THE CROSS-E XAMINATION OF SHRI.Y.P. TRIVEDI, THERE IS NO REASON FOR M/S. RISHIRA J BUILDERS AND DEVELOPERS TO MAKE ANY PAYMENT TO APPELLANT. FURTHER , MR. Y.P. TRIVEDI IS ALSO NOT SURE OF THE RECIPIENT OF THE PAYME NT MADE BY HIM. IN ANY CASE THE NAME OF APPELLANT IS ABSENT IN ANY OF THE SEIZED DOCUMENT AND REASON FOR RECEIPT OF ON-MONEY BY APPEL LANT ALSO DOES NOT EXIST. UNDER THE CIRCUMSTANCES, THERE IS NO BASIS FOR A.O. TO TREAT THAT, THE ON-MONEY WAS RECEIVED BY APPELLANT IN THE TRANSACTIONS OF PLOT NO. 33 AND 42. THEREFORE, IN VIEW OF THE EARLI ER SUBMISSIONS MADE AND THE SUBMISSIONS MADE HEREIN ABOVE, IT IS EARNES TLY REQUESTED TO DELETE THE ADDITION OF RS. 29,04,350/- M ADE TO THE RETURNED 'NIL' UNDISCLOSED INCOME DECLARED BY APPELL ANT.' 7. IT WAS ALSO SUBMITTED THAT THERE WAS NO VALID REASON FO R M/S. RISHIRAJ BUILDERS AND DEVELOPERS TO MAKE ANY PAYMENT T O THE ASSESSEE AGAINST THE PROPERTY TRANSACTION OF PLOT NO. 33 OR 42 IN THE ABSENCE OF ANY RIGHT BY THE ASSESSEE IN THE SAID PROPERTI ES. IT WAS CONTENDED FURTHER THAT THE NAME OF THE ASSESSEE WAS ABSEN T IN ANY OF 25 THE SEIZED DOCUMENTS AND THERE WAS NO REASON FOR RECEI PT OF 'ON- MONEY' BY HIM. IN HIS REMAND REPORT DATED 17.3.2008, THE A.O SUBMITTED BEFORE THE LD CIT(A) THAT SHRI SHASTRI WAS A TRUSTED MAN OF SHRI Y.P. TRIVEDI. THEREFORE, SHRI Y.P. TRIVEDI WAS FULLY AWARE OF THE ACTUAL FACTS AND CONSULTATION IN RESPECT OF THE PROPER TY TRANSACTIONS WITH SHRI NARENDRA THAKKER, WHO IS A BROTHER OF THE ASSESSEE. THE A.O REPORTED FURTHER THAT THE OTHER NAME APPEARING IN THE SAID SEIZED DOCUMENTS WERE NOTHING BUT THE REPRESENTATIVES O F SHRI NARENDRA THAKKER. FURTHER, THE A.O REPORTED THAT SH RI JITENDRA M. THAKKER WAS GPA HOLDER OF THE PROPERTIES MENTIONED IN THE SEIZED DOCUMENTS AND THE FACT THAT SHRI SHASTRI HELD NEGOTIA TIONS WITH SHRI NARENDRA THAKKER IS ENOUGH TO HOLD THAT THE PAYMENTS WERE MADE TO THE ASSESSEE. CONSIDERING THESE MATERIAL FACTS OF THE CASE, WE ARE OF THE VIEW THAT THE LD CIT(A) HAS RIGHTLY OBSERVED THAT THE STAND OF THE A.O IS NOT ACCEPTABLE BECAUSE THE SEIZED DOCUMENTS WAS M AINTAINED BY SHRI Y.P. TRIVEDI BASED ON THE INFORMATION SUPPLIE D BY ONE SHRI SHASTRI AND THERE WAS NO EVIDENCE ON RECORD CONFIRMIN G THE TRANSACTIONS FROM SHRI SHASTRI. THUS, THE ENTRIES BASED O N THE UNCONFIRMED TRANSACTIONS CANNOT BE USED AS EVIDENCE AGA INST THE ASSESSEE. 8. THE ASSESSEE ALSO DENIED HIS ROLE IN THE TRANSACTION IN RESPECT OF PLOT NO.33. THE STAND OF THE A.O IN THIS REGARD REMAI NED THAT THE ASSESSEE WAS HOLDER OF GENERAL POWER OF ATTORNEY FOR TH E TOTAL LAY OUT OF THE PLAN. THE A.O ALSO MENTIONED THAT SHRI Y.P. T RIVEDI IN HIS STATEMENTS DATED 21 ST MARCH 2005 ADMITTED THAT HE HAD NEGOTIATIONS WITH SHRI NARENDRA M. THAKKER THOUGH PLOT NO. 33 WA S PURCHASED FROM SHRI PARAJI ABAJI KARANJKAR AND SHRI RAJESH NAV ANI. SHRI TRIVEDI IN HIS CROSS-EXAMINATION HAS, HOWEVER, CONTRADICTED HI S STATEMENTS GIVEN ON 21 ST MARCH 2005. IN ANSWER TO QUESTION NO. 11, HE STATED THAT NONE OF THE THAKKERS WERE EITHER PARTY TO ANY D OCUMENT IN RELATION TO PLOT NO. 33 OR WERE PAID ANY CONSIDERATI ON AGAINST PLOT NO.33 UNDER ANY OF THE SAID DOCUMENT. UNDER THESE CIR CUMSTANCES, IN OUR VIEW, LD CIT(A) HAS RIGHTLY OBSERVED THAT STATEMEN TS AND AFFIDAVITS GIVEN BY SHRI Y.P. TRIVEDI CANNOT BE RELI ED UPON DUE TO CONTRADICTIONS IN HIS STATEMENTS AND AFFIDAVITS WITHOUT ANY VALID CORROBORATIVE EVIDENCE. IN RESPECT OF TRANSACTION OF PLOT NO. 42 AS WELL, THERE IS NO CORROBORATIVE EVIDENCE BROUGHT ON RECORD BY THE A.O EITHER IN THE ASSESSMENT ORDER OR IN THE SUBSEQUENT ENQUIRIES REGARDING THE CASH PAYMENT IN THIS REGARD TO SHRI NAR ENDRA M. THAKKER, BROTHER OF SHRI JITENDRA THAKKER I.E. THE ASSESSEE. WE FULLY AGREE WITH THE VIEW OF THE LD CIT(A) THAT MERE RELI ANCE ON THE SEIZED DOCUMENTS ALONE IS NOT ENOUGH FOR MAKING AN ADDITION OF UNDISCLOSED INCOME IN THE HANDS OF THE ASSESSEE JUST BECAUSE HE WAS THE GPA HOLDER IN RESPECT OF SOME PROPERTIES. FOLLOWI NG SEVERAL DECISIONS OF HON'BLE COURTS RELIED BEFORE THE JABALPUR BENCH OF THE TRIBUNAL IN THE CASE OF SATYAPAL WASSAN (SUPRA), THE JABALPUR BENCH HAS OBSERVED AS UNDER: 'THE CRUX OF THESE DECISIONS IS THAT A DOCUMENT FOUND D URING THE COURSE OF SEARCH MUST BE A SPEAKING ONE AND WITHOUT ANY SECOND INTERPRETATION, MUST REFLECT ALL THE DETAILS ABOUT TH E TRANSACTIONS OF THE ASSESSEE IN THE RELEVANT ASSESSMENT YEAR. ANY GAP IN TH E VARIOUS COMPONENTS AS MENTIONED IN SECTION 4 OF THE INCOME-TAX ACT MUST BE FILLED UP BY THE ASSESSING OFFICER THROUGH INVESTIGATION S AND CORRELATIONS WITH THE OTHER MATERIAL FOUND EITHER DU RING THE COURSE OF THE SEARCH OR ON INVESTIGATION.' 26 THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF ACIT V /S. THAKKER DEVELOPERS LTD. (SUPRA) HAS ALSO FOLLOWED THE DECISION O F MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF SATRAPTAX (INDI A) PVT. LTD., 84 ITD 320 (MUM) HOLDING THAT THE PRESUMPTION U/S. 132(4 A) IS APPLICABLE ONLY AGAINST THE PERSON FROM WHOSE POSSESSION T HE BOOKS OF ACCOUNTS OR OTHER DOCUMENTS WERE FOUND AND NOT AGA INST ANY OTHER PERSON. IN THE PRESENT CASE BEFORE US, SUCH PRESUM PTION HAS NOT BEEN SUCCESSFULLY REBUTTED BY THE REVENUE TO MAKE THE ADDITION IN QUESTION IN THE HANDS OF THE ASSESSEE WHILE FRAMING ASSE SSMENT U/S. 158BD AGAINST HIM. 9. THE LD CIT(A) HAS RIGHTLY HELD THAT IN ABSENCE OF ANY CORROBORATIVE EVIDENCE NO VALUE CAN BE ATTACHED TO THE SEIZED DOCUMENTS UNDER THE FACTS AND CIRCUMSTANCES OF THE PRESE NT CASE. THE FIRST APPELLATE ORDER ON THE ISSUE IS COMPREHENSIVE AND REASONED ONE. WE ARE THUS NOT INCLINED TO INTERFERE WITH. THE SAME IS UPHELD . THE GROUNDS QUESTIONING THE ACTION OF LD CIT(A) IN HO LDING THE NOTICE ISSUED U/S. 158 BD AGAINST THE ASSESSEE AS UNJUSTIFIED AND IN DELETING THE ADDITION OF RS.29,04,350/- AS UNDISCLOSED INCOME IN THE HANDS OF THE ASSESSEE ARE THUS REJECTED. CONSEQUENTLY, THE APPEAL IS DISMISSED. 9.3 WE FIND THE FACTS IN THE INSTANT CASE ARE IDENT ICAL TO THE FACTS OF THE CASE DECIDED BY THE TRIBUNAL IN THE CASE OF SHR I JITENDRA M. THAKKAR (SUPRA). AS MENTIONED EARLIER, ALTHOUGH 2 PLOTS OWNED BY M/S. MANOJ MARKETING PVT. LTD. AND M/S. VASUMATI MA RKETING PVT. LTD (BOTH HAVING EQUAL SHARE IN THE 2 PLOTS) WERE S OLD TO M/S. RISHIRAJ BUILDERS AND DEVELOPERS, HOWEVER, WE FIND NO ADDITION HAS BEEN MADE IN THE HANDS OF M/S. VASUMATI MARKETING P VT. LTD. NO CORROBORATIVE MATERIAL WHATSOEVER WAS FOUND SHOWING ANY ON-MONEY RECEIVED BY M/S. MANOJ MARKETING PVT. LTD. NO MOU, NO RECEIPT, NO SIGNATURE OF THE ASSESSEE IN TOKEN OF RECEIPT OF ANY ON-MONEY WAS FOUND DURING THE COURSE OF SEARCH FROM THE PREMISES OF M/S. RISHIRAJ BUILDERS AND DEVELOPERS. ALTHOUGH ACCORDING TO THE AFFIDAVIT/STATEMENT OF SHRI Y.P. TRIVEDI THAT PAYME NTS WERE MADE BY SHRI SHASTRI WHO IS OFFICE MANAGER, HOWEVER, IT IS A FACT THAT STATEMENT OF SHRI SHASTRI WAS NEVER RECORDED. FURT HER, EVEN THE CHEQUE PAYMENTS MADE TO THE ASSESSEE AND CHEQUE PAY MENTS AS PER 27 THE SEIZED DOCUMENTS ALSO DO NOT TALLY. WE FIND TH E AO HAS NOT ACTED ON THE BASIS OF THE FIGURES APPEARING IN THE SEIZED PAPERS AT RS.57,75,370/- OR THE AFFIDAVIT OF SHRI Y.P. TRIVE DI RS.57,75,000/- BUT HE HAS PROCEEDED ON THE BASIS OF CERTAIN OTHER ENTRIES AMOUNTING TO RS.33 LAKHS. IN VIEW OF THE ABOVE AND IN VIEW O F THE DETAILED REASONINGS GIVEN BY LD.CIT(A) AND FOLLOWING THE DEC ISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF SHRI JITE NDRA M. THAKKAR (SUPRA), WE FIND NO INFIRMITY IN THE ORDER OF THE L D.CIT(A) DELETING THE ADDITION OF RS.16,50,000/-. ACCORDINGLY, THE O RDER OF THE CIT(A) ON THIS ISSUE IS UPHELD AND THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. CO NO.28/PN/2009 : 10. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS I N THE CO : 1. THE LD.CIT(A)-II, NASHIK ERRED IN UPHOLDING THE ISSUE OF NOTICE U/S.158BD. THEREFORE, IT IS PRAYED TO HOLD THAT THE NOTICE ISSUED U/S.158BD WAS VOID AND ILLEGAL. 2. THE LD.CIT(A)-II, NASHIK ERRED IN HOLDING THAT TH E DEFECT IN ISSUE OF THE VITAL NOTICE, NECESSARY FOR ASSUMING JURISDIC TION U/S.158BC, WAS A DEFECT CURABLE U/S.292B. THEREFORE, IT IS PRAYED TO HOLD THAT, THE NOTICE ISSUED U/S.158BF DATED 07-04-200 5 WAS AN ILLEGAL NOTICE AND THE BLOCK PERIOD ASSESSMENT PROCEED INGS COMPLETED IN PURSUANCE TO THE SAID INVALID NOTICE ISSUE D U/S.158BD DATED 07-04-2005 WERE NULL AND VOID. 10.1 THE ASSESSEE HAS ALSO REQUESTED FOR ADMISSION OF THE FOLLOWING ADDITIONAL GROUNDS OF CO : 1. THE ASST. U/S 158BD R.W.S 143(3) BE HELD NULL A ND VOID SINCE THE SATISFACTION NOTE U/S 158BD WAS RECORDED ON 7 TH APRIL 2005 I.E. AFTER THE COMPLETION OF THE BLOCK ASST. ON 29.03.2005, OF M /S. RUSHIRAJ BUILDERS & DEVELOPERS , THE PERSON WHO WAS SEARCHED IN V IEW OF THE SPL. BENCH DECISION OF ITAT, IN THE CASE OF SHRI MANO J AGARWAL [113 ITD 377]. 28 2. THE ASSESSEE FURTHER SUBMITS THAT THE ASST. U/S 158BD R.W.S 143(3) IS NULL AND VOID SINCE THE NOTICE U/S.158BD IS SE RVED AFTER THE COMPLETION OF THE BLOCK ASST. OF M/S. RUSHIRAJ BUILDER S & DEVELOPERS, THE PERSON WHO WAS SEARCHED. 10.2 AT THE TIME OF HEARING, THE LD. COUNSEL FOR TH E ASSESSEE DID NOT PRESS THE GROUNDS OF THE CROSS OBJECTIONS FOR WHICH THE LD. DEPARTMENTAL REPRESENTATIVE HAS NO OBJECTION. ACCO RDINGLY, THE CO FILED BY THE ASSESSEE IS DISMISSED AS NOT PRESSED . 11. IN THE RESULT, THE APPEAL FILED BY THE REVENUE AND CO FILED BY THE ASSESSEE ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 30-01-2015. SD/- SD/- (SUSHMA CHOWLA) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBE R PUNE DATED: 30 TH JANUARY, 2015 SATISH COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. THE CIT(A)-II, NASHIK 4. THE CIT-II, NASHIK 5. THE D.R, A PUNE BENCH 6. GUARD FILE BY ORDER // TRUE COPY // ASSISTANT REGISTRAR ITAT, PUNE BENCHES, PUNE