Shri Manjit Singh Bhatai, Indore V. The Addl.CIT Range-3, Indore

ITSSA 120/IND/2011

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 2383 (ITAT-INDORE)
• Duration Of Justice: 4 year(s) 9 month(s) 20 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 17-08-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 11-05-2016
• Assessment Year: 2002-2003
• Appeal Filed On: 28-10-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJEEV VARSHNEY; R A VERMA DRS
• Assessee Lawyers: ARPIT GAUR CAS
• Keywords: Unexplained cash credit; Gift; Business income; Opportunity of being heard
• Section: 143(3); 142(1); 153A; 131; 68; 139

Judgement Text

MANJEET SINGH BHATIA (SS)120/IND/2011 AND OTHERS 1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER IT(SS)A NOS.120 TO 125/IND/2011 A.YS. 2002-03 TO 2004-06 & 2006-07 TO 2008-09 MANJIT SINGH BHATIA, INDORE PAN AGIPB 0022 G :: ASSESSEE VS ADDL. CIT, RANGE-3, INDORE :: RESPONDENT ASSESSEE BY SHRI ANIL KAMAL GARG AND SHRI ARPIT GAUR, CAS RESPONDENT BY SHRI RAJEEV VARSHNEY AND SHRI R.A. VERMA, DRS DATE OF HEARING 18.5.2016 DATE OF PRONOUNCEMENT 18.5.2016 O R D E R PER SHRI D.T. GARASIA, JM THE ABOVE APPEALS FILED BY THE ASSESSEE AND REVENUE ARE DIRECTED AGAINST THE DIFFERENT ORDERS OF LD. CIT(A) -I, INDORE, DATED 05.8.2011. BOTH THE PARTIES SUBMITTED THAT IDENTICA L FACTS ARE INVOLVED IN THESE APPEALS. HENCE, IN ORDER TO AVOID REPETITION AND FOR THE SAKE OF BREVITY, WE ARE DECIDING ALL THE APPEALS THROUGH TH IS CONSOLIDATED ORDER BY TAKING THE FACTS FROM THE AY 2002-03. MANJEET SINGH BHATIA (SS)120/IND/2011 AND OTHERS 2 2. SHORT FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL, PRESENTLY AGED NEARLY 55 YEARS. THE ASSESSEE IS REG ULARLY ASSESSED TO INCOME-TAX FOR THE LAST MANY YEARS. THE ASSESSEE FU RNISHED HIS ORIGINAL RETURN OF INCOME, PERTAINING TO THE ASSESSMENT YEAR UNDER REVIEW, U/S. 139 OF THE INCOME-TAX ACT, 1961, ON 18-02-2003 VIDE ACK. NO. 028748 WITH THE THEN JCIT-3, INDORE, DECLARING AN INCOME O F RS.5,50,630/- (PB PAGE NO. 21 TO 23). IN RESPONSE TO THE RETURN OF IN COME, FURNISHED BY THE ASSESSEE U/S. 139 OF THE INCOME-TAX ACT, 1961, NO ACTION WAS TAKEN BY THE ASSESSING OFFICER AND AS SUCH THE ASSESSMENT WAS DEEMED TO HAVE BEEN COMPLETED U/S. 143(1)(A) OF THE INCOME-TA X ACT, 1961. A SEARCH U/S. 132(1) OF THE INCOME-TAX ACT, 1961 WAS CARRIED OUT BY THE ASSISTANT DIRECTOR OF INCOME-TAX (INV.)-II, INDORE, ON 25-09-2007, IN THE RESIDENTIAL PREMISES OF THE ASSESSEE AS ALSO IN THE BUSINESS PREMISES IN WHICH FAMILY MEMBERS/RELATIVES OF THE ASSESSEE WERE HAVING VESTED INTEREST. DURING THE COURSE OF THE SEARCH, THE BHAT IA GROUP HAD ADMITTED ADDITIONAL INCOME AGGREGATING TO RS.26,15,24,529/- AND AS AGAINST SUCH ADMITTED INCOME OF RS.26,15,24,529/-, THE GROUP, AS A WHOLE, HAD SHOWN AN ADDITIONAL INCOME OF RS.27,33,73,087/- IN THE RE TURNS OF INCOME FURNISHED UNDER S.153A OF THE ACT. HOWEVER, THE ASS ESSEE NEITHER ADMITTED NOR DECLARED ANY ADDITIONAL INCOME IN HIS RETURN OF INCOME. SUCH FACTS ARE EVIDENT FROM THE FINDINGS GIVEN BY T HE CIT(A) AT PARA 2 & 2.1 AT PAGE NO. 3 & 4 OF HIS ORDER. DURING THE COUR SE OF THE SEARCH, NO UNDISCLOSED OR UNEXPLAINED MONEY, BULLION, JEWELLER Y, VALUABLE ARTICLES OR THINGS PERTAINING TO THE ASSESSEE WERE FOUND OR SEI ZED. SUBSEQUENTLY, A NOTICE DATED 03-03-2008 WAS ISSUED BY THE ADDL. COM MISSIONER OF INCOME-TAX, RANGE-3, INDORE, U/S. 153A OF THE INCOM E-TAX ACT, 1961 (PB PAGE NO. 1). UNDER SUCH NOTICE, THE ASSESSEE WA S REQUIRED TO FURNISH HIS RETURN OF TOTAL INCOME PERTAINING TO TH E ASSESSMENT YEAR UNDER REVIEW, WITHIN A PERIOD OF 30 DAYS FROM THE D ATE OF SERVICE OF THE MANJEET SINGH BHATIA (SS)120/IND/2011 AND OTHERS 3 NOTICE. IN COMPLIANCE TO THE NOTICE UNDER S. 153A, THE ASSESSEE, FURNISHED HIS RETURN OF TOTAL INCOME ON 27-05-2008 VIDE ACK. NO. 0030100047 DECLARING THE SAME INCOME OF RS.5,50,630 /- AS WAS FURNISHED BY HIM IN HIS ORIGINAL RETURN OF INCOME U NDER S.139 OF THE ACT. ALONG WITH THE COMPUTATION OF TOTAL INCOME, THE ASS ESSEE HAD FURNISHED COPY OF CAPITAL ACCOUNT AND ALSO HIS STATEMENT OF A FFAIRS RELEVANT TO THE PREVIOUS YEAR UNDER REVIEW (PB PAGE NO. 24 TO 32). THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTICES U/S. 143(2) & 142(1) ALONG WITH A QUESTIONNAIRE WERE ISSUED FOR THE FIRS T TIME ON 25-08-2008. COPIES OF THE NOTICES U/S. 142(1) ALONG WITH A COPY OF QUESTIONNAIRE ARE PLACED AT PAGE NO. 33 TO 40 OF THE PAPER BOOK. IN R ESPONSE TO SUCH NOTICES, THE ASSESSEE THROUGH HIS AUTHORIZED REPRES ENTATIVE ATTENDED THE HEARING BEFORE THE LEARNED ASSESSING OFFICER FR OM TIME TO TIME AND MADE WRITTEN SUBMISSIONS DATED 23-06-2009 AND 09-12-2009 ALONG WITH NECESSARY DOCUMENTARY EVIDENCES. COPIES OF SUCH WRI TTEN SUBMISSIONS ARE PLACED AT PAGE NO. 41 TO 57 OF THE PAPER BOOK. FINALLY, THE ASSESSING OFFICER FRAMED THE ASSESSMENT ON 21-12-20 09, U/S. 143(3) READ WITH SECTION 153A OF THE INCOME-TAX ACT, 1961, DETERMINING THE INCOME OF THE ASSESSEE AT RS.24,43,935/- AS AGAINST THE RETURNED INCOME OF RS.5,50,630/- THEREBY MAKING ADDITIONS OF RS.18,93,305/- FOR THE AY 2002-03, AS PER DETAILS GIVEN BELOW: SNO. PARTICULARS AMOUNT (RS.) 1 ADDITION ON ACCOUNT OF NRI GIFT 16,95,000 2 ADDITION ON ACCOUNT OF AD-HOC DISALLOWANCE OF LAB OUR CHARGES AND COLLERIES EXPENSES 1,03,366 3 ADDITION ON ACCOUNT OF AD-HOC DISALLOWANCE OF EXP ENSES IN RESPECT OF PERSONAL USER THEREOF 13,360 5 ADDITION ON ACCOUNT OF DISALLOWANCE OF LOSS FROM M/S. ISHHAR FUEL PRODUCTS 81,579 TOTAL ADDITIONS 18,93,305 MANJEET SINGH BHATIA (SS)120/IND/2011 AND OTHERS 4 3. BEING AGGRIEVED WITH THE ASSESSMENT ORDER, THE A SSESSEE PREFERRED APPEAL BEFORE THE CIT(A), AGITATING THE V ALIDITY OF THE ASSESSMENT PROCEEDINGS CARRIED OUT UNDER S. 153A AS ALSO THE VARIOUS ADDITIONS MADE BY THE AO. THE CIT(A) UPHELD THE VAL IDITY OF THE ASSESSMENT PROCEEDINGS UNDER S. 153A OF THE ACT. TH E CIT(A) ALSO CONFIRMED THE ADDITION OF RS.16,95,000/- MADE BY TH E AO IN THE ASSESSEES INCOME, ON ACCOUNT OF NRI GIFT AND ADDIT ION OF RS.1,03,366/- MADE ON ACCOUNT OF DISALLOWANCE OF LABOUR CHARGES A ND COLLIERY EXPENSES FOR THE AY 2002-03. THE LEARNED CIT(A) GRA NTED RELIEF IN RESPECT OF AD-HOC DISALLOWANCE OF EXPENSES IN RESPE CT OF PERSONAL USER THEREOF AT RS.13,360/-. THE CIT(A) ALSO GRANTED A R ELIEF OF RS.81,579/- TO THE ASSESSEE ON ACCOUNT OF DISALLOWANCE OF LOSS FRO M M/S. ISHHAR FUEL PRODUCTS. STILL AGGRIEVED, THE ASSESSEE IS IN APPEA L BEFORE THIS TRIBUNAL. GROUND NOS. 1.1 & 1.2 INVOLVED IN ASSESSEES APPEA LS IT(SS)A NOS.120 TO 125/IND/2011 4. THESE GROUNDS ARE DIRECTED AGAINST THE AOS ACTI ON OF MAKING ADDITIONS U/S 153A OF THE I.T. ACT ON THOSE ISSUES IN RESPECT OF WHICH NO INCRIMINATING MATERIAL WAS FOUND OR SEIZED DURING T HE COURSE OF SEARCH. 5. SHORT FACTS OF THE ISSUE ARE THAT THE AO HAS NOT GIVEN ANY SPECIFIC FINDING ON THE ISSUE. HOWEVER, THE AO AT PAGE NO. 2 OF THE ASSESSMENT ORDER, HAS STATED THAT DURING THE COURSE OF THE ASS ESSMENT PROCEEDING HE HAD ASCERTAINED FROM THE P&L ACCOUNT AND BALANCE SHEET OF THE ASSESSEE THAT THE ASSESSEE HAD RECEIVED CERTAIN GIF T FROM VARIOUS PERSONS. 6. MATTER CARRIED TO LEARNED CIT(A), WHO HAS DEALT WITH THE ISSUE AT PARA 2.4.1, PAGE NO. 8 & 9 OF THE ORDER. THE CIT(A ), AT PARA 2.4.1, HAS MANJEET SINGH BHATIA (SS)120/IND/2011 AND OTHERS 5 GIVEN A TABLE SHOWING VARIOUS GROUNDS RAISED BY THE ASSESSEE, THE ISSUE INVOLVED AND THE APPEAL OF THE ASSESSEE/GROUP ASSES SEE WHERE THE SUBJECT ISSUE HAS BEEN DISCUSSED BY HIM. ACCORDING LY, THE CIT(A) DISMISSED THE LEGAL GROUND RAISED BY THE ASSESSEE F OLLOWING HIS OWN FINDINGS GIVEN IN THE CASE OF THE ONE OF THE GROUP ASSESSEES NAMELY SHRI AMANDEEP SINGH BHATIA IN APPEAL NO. IT-223/09-10 FO R A.Y. 2002-03. 7. THE LD. AR FOR THE ASSESSEE HAS MADE ORAL AS WEL L AS WRITTEN SUBMISSION AS UNDER: 1.00 AS REGARD TO THE GROUNDS TAKEN BY THE ASSESSE E IN THE PRESENT APPEAL, IT IS SUBMITTED THAT THE GROUNDS FOR THE ASSESSMENT YEAR 2003-04 AND GROUNDS TAKEN BY SHRI AMANDEEP SINGH BHATIA IN HIS APPEAL N O. IT(SS)A 112/IND/2011 FOR A.Y. 2002-03 ARE IDENTICAL. IT IS SUBMITTED THAT EVEN THE LEARNED CIT (A) PASSING HIS ORDER FOR THE PRESENT A SSESSMENT YEAR UNDER CONSIDERATION I.E. A.Y. 2003-04 IN THE CASE OF THE ASSESSEE, HAS ALSO RELIED UPON HIS OWN FINDINGS GIVEN IN THE CASE OF SHRI AMA NDEEP SINGH BHATIA FOR A.Y. 2002-03 AND, THEREFORE, IN ORDER TO AVOID REPE TITION, WE ALSO WISH TO PLACE OUR RELIANCE ON OUR SYNOPSIS MADE ON THE RESPECTIVE GROUNDS MADE IN RESPECT OF SHRI AMANDEEP SINGH BHATIA FOR A.Y. 2002-03 IN A PPEAL NO. IT(SS)A 112/IND/2011. RELEVANT DOCUMENTS FILED IN THE PAPER BOOK ON WHICH THE ASSESSEE IS PLACING RELIANCE FOR THIS GROUND PAGE NO. NATURE OF DOCUMENT FILED FOR THE PURPOSE OF FROM TO 21 23 COPY OF ORIGINAL RETURN FILED UNDER S.139 ESTABLISHING THAT THE ASSESSEE HAD FILED HIS ORIGINAL RETURN. 24 32 COPY OF CAPITAL ACCOUNT AND STATEMENT OF AFFAIRS FILED WITH ORIGINAL RETURN ESTABLISHING THAT IN THE CAPITAL ACCOUNT FILED WITH THE ORIGINAL RETURN ITSELF, THE ASSESSEE HAD DISCLOSED THE FACTUM OF RECEIPT OF RESURGENT INDIA BONDS OF WORTH OF RS.19,34,400/- DURING THE YEAR UNDER CONSIDERATION. 39 40 COPY OF SHOW-CAUSE NOTICE DATED 07-12- 2009 ISSUED BY AO ESTABLISHING THAT NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH IN RESPECT OF RIB/NRI GIFTS AS IS EVIDENT FROM PARA 1 OF THE SHOW-CAUSE NOTICE. MANJEET SINGH BHATIA (SS)120/IND/2011 AND OTHERS 6 8. LD. DRS HAVE RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES AND SUBMITTED THAT OUR ARGUMENTS ADVANCED IN THE CASE O F AMANDEEP SINGH BHATIA ON IDENTICAL FACTS MAY BE TAKEN INTO CONSIDE RATION. 9. WE HAVE HEARD RIVAL CONTENTIONS OF BOTH THE PART IES AND PERUSED MATERIAL AVAILABLE ON RECORD. THE CIT(A) HAS RELIED UPON HIS OWN FINDINGS GIVEN IN THE CASE OF SHRI AMANDEEP SINGH B HATIA. WE FIND THAT THIS ISSUE HAS ALREADY BEEN DEALT WITH BY US IN THE CASE OF ONE OF THE GROUP ASSESSEES NAMELY, AMANDEEP SINGH BHATIA IN AP PEAL NO. IT(SS)A NO.112/IND/2011 FOR A.Y. 2002-03, WHEREIN W E HAVE HELD THAT IN ABSENCE OF ANY INCRIMINATING DOCUMENTS FOUND AND SEIZED DURING THE COURSE OF SEARCH, THE ASSESSING OFFICER IS NOT JUST IFIED IN MAKING THE ADDITIONS IN NON-ABATED ASSESSMENT ORDERS WHILE PAS SING THE ORDERS U/S 153A R.W.S. 143(3) OF THE ACT. THUS, WE QUASH THE ASSESSMENT ORDERS FOR THE A.YS. 2002-03 TO 2004-05 BEING NON-ABATED. ACCORDINGLY, THIS ISSUE OF INCRIMINATING MATERIAL IN THE ASSESSEES A PPEALS IT(SS)A NOS. 120 TO 122/IND/2011 IS ALLOWED. HOWEVER, SINCE THE ASSESSMENTS FOR THE A.YS. 2006-07 TO 2008-09 ARE ABATED, THE PRESENT IS SUE IN ASSESSEES APPEALS IT(SS)A NOS.123 TO 125/IND/2011 FOR THE A.Y S. 2006-07 TO 2008-09 WAS NOT PRESSED BY THE LD. COUNSEL FOR THE ASSESSEE DURING THE COURSE OF HEARING, THEREFORE, SAME ARE DISMISSED FO R THE A.YS. 2006-07 TO 2008-09 BEING NOT PRESSED. GROUND NO. 2 INVOLVED IN IT(SS)A NOS.120 TO 124/IND /2011 AND GROUND NO.1 INVOLVED IN IT(SS)A NO.125/IND/2011 10. THESE GROUNDS ARE DIRECTED AGAINST THE CIT(A)S FINDING OF UPHOLDING AOS ACTION OF PASSING THE ASSESSMENT ORD ER ARBITRARILY WITHOUT GIVING PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE CIT(A) HAS DEALT WITH THIS GROUND AT PARA 5.2 OF PA GE NO. 12 OF HIS ORDER. MANJEET SINGH BHATIA (SS)120/IND/2011 AND OTHERS 7 ACCORDING TO THE CIT(A), THE ASSESSEE WAS GIVEN DUE OPPORTUNITY BY THE AO. BEFORE US, LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS THIS GROUND. THEREFORE, SAME IS DISMISSED IN ALL THE APPEALS OF THE PRESENT ASSESSEE BEING NOT PRESSED. GROUND NO. 3 INVOLVED IN IT(SS)A NOS.120 & 121/IND/ 2011 AYS 2002-03 & 2003-04 11. THIS GROUND IS DIRECTED AGAINST THE CIT(A)S AC TION OF CONFIRMING THE ADDITIONS OF RS.16,95,000/- & RS.5,00,000/- MAD E BY THE AO UNDER S.68 OF THE ACT ON ACCOUNT OF NRI GIFT. BOTH THE PA RTIES SUBMITTED THAT THIS ISSUE IS IDENTICAL TO THE ISSUE OF RESURGENT I NDIA BOND AND IDENTICAL FACTS AND CIRCUMSTANCES ARE INVOLVED IN BOTH THE PR ESENT APPEALS, THEREFORE, WE ARE TAKING FACTS FROM THE AY 2002-03 HAVING IDENTICAL ISSUE. 12. SHORT FACTS OF THE ISSUE ARE THAT THE AO HAS DE ALT WITH THE ISSUE AT PARA 1, FROM PAGE NO. 2 TO 21 OF HIS ORDER. THE CRU X OF THE FINDINGS OF THE AO, AS GIVEN AT PAGE NO. 10 OF THE ORDER, IS THAT ( I) WHY THE NRIS ARE GIFTING HUGELY TO AFFLUENT PERSONS ONLY AND NOT TO POOR PERSONS; (II) DOCUMENTATION BY ITSELF CANNOT PROVE THE REAL INTEN T OF THE TRANSACTION AND; (III) AN NRI SITTING ABROAD GIVING GIFT TO PER SONS IN INDIA THEN HOW THE SOURCES AND CREDITWORTHINESS OF THE NRI CAN BE EXAM INED. FINALLY, THE AO, AT PAGE NO. 21, HAS MADE THE ADDITION OF RS.16, 95,000/- BY HOLDING THE ENTIRE GIFTS FROM NON-RELATIVE NRIS RECEIVED BY THE ASSESSEE DURING THE RELEVANT ASSESSMENT YEAR, AS ACCOMMODATION ENTR IES UNDER S.68 OF THE ACT. 13. MATTER CARRIED TO LEARNED CIT(A), WHO WHILE ADJ UDICATING THE GROUND NO. 3, THE CIT(A) HAS CONFIRMED THE ADDITION OF RS.16,95,000/- MADE BY THE AO. ACCORDINGLY, THE CIT(A) CONFIRMED THE ADDITION OF MANJEET SINGH BHATIA (SS)120/IND/2011 AND OTHERS 8 RS.16,95,000/- ON ACCOUNT OF NRI GIFT FOLLOWING HIS OWN FINDINGS GIVEN IN THE CASE OF SHRI AMANDEEP SINGH BHATIA IN APPEAL NO . IT-223/09-10 FOR A.Y. 2002-03. 14. THE LD. AR FOR THE ASSESSEE HAS MADE ORAL AS WE LL AS WRITTEN SUBMISSION AS UNDER: AS REGARD THIS GROUND TAKEN BY THE ASSESSEE IN THE PRESENT APPEAL, IT IS SUBMITTED THAT SIMILAR GROUNDS FOR THE ASSESSMENT Y EAR 2002-03 HAS BEEN TAKEN IN THE CASE OF SHRI AMANDEEP SINGH BHATIA IN APPEAL NO. IT(SS)A 112/IND/2011. THE FACTS OF THE GROUND OF THE ASSESS EE IN THE PRESENT APPEAL ARE IDENTICAL WITH THAT OF THE GROUNDS OF SHRI AMAN DEEP SINGH BHATIA FOR A.Y. 2002-03. THEREFORE, IN ORDER TO AVOID REPETITION, W E WISH TO PLACE OUR RELIANCE ON OUR SYNOPSIS MADE ON THE RESPECTIVE GROUNDS MADE IN RESPECT OF SHRI AMANDEEP SINGH BHATIA FOR A.Y. 2002-03 IN APPEAL NO . IT(SS)A 112/IND/2011. RELEVANT DOCUMENTS FILED IN THE PAPER BOOK ON WHICH THE ASSESSEE IS PLACING RELIANCE FOR THESE GROUNDS PAGE NO. NATURE OF DOCUMENT FILED FOR THE PURPOSE OF FROM TO 58 58 COPY OF CHART SHOWING THE DETAILS OF NRI GIFT GIVING THE COMPLETE DETAILS OF THE DONOR AND THE TRANSACTION 59 61 COPY OF GIFT DEEDS DATED 09-10-2001 AND 02-07- 2001 DULY SIGNED AND NOTARIZED BY MR. MANGILAL KALANI AND SMT. KARUNA REDDY ELETE RESPECTIVELY (DONORS) ESTABLISHING THE IDENTITY OF THE DONORS AND GENUINENESS OF TRANSACTIONS. 62 62 COPY OF PASSPORT OF DONOR ESTABLISHING THE IDENTITY OF THE DONOR. 63 66 COPIES OF BANKER CHEQUES ESTABLISHING THAT THE GIFTS HAVE BEEN MADE THROUGH BANKING CHANNEL. 86 89 COPY OF BANK STATEMENT OF THE ASSESSEE FOR THE PERIOD UNDER CONSIDERATION HIGHLIGHTING THE SUBJECT TRANSACTIONS SHOWING THAT THE GIFTS HAVE BEEN RECEIVED IN THE BANK ACCOUNT OF THE ASSESSEE. MANJEET SINGH BHATIA (SS)120/IND/2011 AND OTHERS 9 67 85 RELEVANT ABSTRACT OF REPLY ON THE ISSUE FILED BEFORE CIT(A) FOR ESTABLISHING THE FACT THAT ALL THE ARGUMENTS WHICH HAVE BEEN CANVASSED BEFORE THIS HONBLE BENCH WERE ALSO MADE BEFORE THE CIT(A) BUT HE FAILED TO APPRECIATE SUCH ARGUMENTS. 15. LD. DRS HAVE RELIED ON THE ORDERS OF THE REVENU E AUTHORITIES AND SUBMITTED THAT OUR ARGUMENTS ADVANCED IN THE CASE O F AMANDEEP SINGH BHATIA ON IDENTICAL FACTS MAY BE TAKEN INTO CONSIDE RATION. 16. WE HAVE HEARD RIVAL CONTENTIONS OF BOTH THE PAR TIES AND PERUSED MATERIAL AVAILABLE ON RECORD. BOTH THE PARTIES HAVE SUBMITTED THAT THIS ISSUE OF NRI GIFT IS SIMILAR TO THE ISSUE OF RESURG ENT INDIA BOND WHICH HAS BEEN ARGUED IN THE CASE OF AMANDEEP SINGH BHATI A. THE CIT(A) HAS ALSO RELIED UPON HIS OWN FINDINGS GIVEN IN THE CASE OF SHRI AMANDEEP SINGH BHATIA. CONSIDERING THE SUBMISSIONS OF BOTH S IDES, WE NOTE THAT THE IDENTICAL ISSUE ON PRINCIPLE HAS ALREADY BEEN D EALT WITH BY US IN THE CASE OF ONE OF THE GROUP ASSESSEES NAMELY, AMANDEEP SINGH BHATIA IN APPEAL NO. IT(SS)A NO.112/IND/2011 FOR A.Y. 2002-03 , WHEREIN WE HAVE HELD AS UNDER: WE HAVE HEARD RIVAL CONTENTIONS OF BOTH THE PARTI ES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. LOOKING TO THE FA CTS AND CIRCUMSTANCES, WE FIND THAT ASSESSEE HAS FILED ORIG INAL RETURN OF INCOME U/S 139 OF THE I.T. ACT, 1961 ON 25.1.2003. ALONG W ITH THE RETURN, THE ASSESSEE HAS FURNISHED THE COPY OF CAPITAL ACCOUNT, F.Y. ENDED ON 31.3.2002 IN WHICH THE RECEIPT OF RIB OF VALUE AT R S.70,29,000 WAS CLEARLY REFLECTED IN THE STATEMENT OF AFFAIRS FILED ALONG WITH THE ORIGINAL RETURN. ASSESSEE HAS SHOWN SUCH RIB BOND OF RS.70,2 9,000/-. WE FIND THAT ASSESSING OFFICER HAS MADE THE ADDITION BY INV OKING PROVISIONS OF SEC. 68 OF THE ACT WHICH SAYS THAT ADDITION IS BASE D ON ENTRIES FOUND IN REGULAR BOOKS OF ACCOUNTS. THE ASSESSING OFFICER DI D NOT REFER ANY SEIZED MATERIAL OR ANY INCRIMINATING MATERIAL WHILE MAKING THIS ADDITION. WHILE MAKING THE ADDITION U/S 153A, THE ADDITION CA N BE MADE IN RESPECT OF NON-ABATED ASSESSMENTS ONLY IF ANY SEIZE D MATERIAL IS FOUND DURING THE COURSE OF SEARCH. THE ADDITION IS BASED ONLY ON THE MATERIAL WHICH WAS SUBMITTED BY THE ASSESSEE DURING THE ORIG INAL ASSESSMENT ORDER. THEREFORE, NO ADDITION CAN BE MADE IN ABSENC E OF ANY MANJEET SINGH BHATIA (SS)120/IND/2011 AND OTHERS 10 INCRIMINATING MATERIAL AS HELD BY HONBLE DELHI HIG H COURT IN THE CASE OF KABUL CHAWLA (SUPRA). THE ASSESSEE HAS FURNISHED ALL THE NECESSARY DOCUM ENTS SUCH AS, COPY OF RIB, COPY OF TRANSFER LETTERS, COPY OF LETTER ISSUED BY SBI SHOWING TRANSFER BOND IN FAVOUR OF THE ASSESSEE THR OUGH MODE OF GIFT. WE FIND THAT THE ONLY OBJECTION BY THE REVENUE THAT THE ASSESSEE HAS PURCHASED THIS BOND BY HIS OWN MONEY BY PAYING CASH TO THE DONOR. HOWEVER, WE FIND THAT DURING THE COURSE OF SEARCH, NO SUCH DOCUMENTS OR EVIDENCES ESTABLISH ANY PAYMENT OF CASH BY THE A SSESSEE TO THE DONOR. WE ALSO FIND THAT ON MERIT, THIS ISSUE IS CO VERED BY THE DECISION OF THIS BENCH IN THE CASE OF ACIT VS. PHOOLCHAND AG RAWAL IN ITA NO.381/IND/2006 RELYING UPON THE DECISION OF THE HO NBLE ALLAHABAD HIGH COURT IN THE CASE OF KANCHAN SINGH VS. CIT (20 09) 221 CTR 456 (ALL) HAS HELD THAT GIFTS OF RIBS RECEIVED BY AN AS SESSEE FROM ONE NRI CANNOT BE TREATED AS INCOME OF THE ASSESSEE. WE ALS O FIND SUBSTANCE IN THE CONTENTION OF THE LD. AR OF THE ASSESSEE THA T IN VIEW OF THE DECISION OF THE ITAT, JODHPUR BENCH IN THE CASE OF DCIT VS. RAMDEV KUMAR CHYITLANGIA (2004) 89 TTJ (JD.) 346, THE BLOO D RELATIONSHIP IS NO CONDITION PRECEDENT FOR MAKING A VALID GIFT. IN VIE W OF THESE FACTS AND CIRCUMSTANCES, WE ARE OF THE CONSIDERED VIEW THAT E VEN ON MERITS OF THE CASE, THE ADDITION MADE BY THE ASSESSING OFFICE R U/S 68 OF THE ACT ON ACCOUNT OF RIB GIFT AT RS.70,29,000/- AND SUBSEQ UENTLY, ENHANCED BY THE LEARNED CIT(A) TO RS.1,00,44,348/- IS NOT SU STAINABLE. THUS, EVEN ON MERITS, GROUND NOS. 3.1 & 3.2 OF THE ASSESS EE ARE ALLOWED. SINCE COMMON ISSUE ON IDENTICAL SET OF FACTS IS INV OLVED IN BOTH THE APPEALS OF THE ASSESSEE, THE IDENTICAL ISSUE OF RES URGENT INDIA BONDS (RIB) IS ALSO ALLOWED FOR THE ASSESSMENT YEAR 2003- 04 ON THE SAME REASONING. ACCORDINGLY, THIS GROUND OF GENUINENESS OF RIB IS ALLOWED IN BOTH THE PRESENT RESPECTIVE APPEALS OF THE ASSESSEE . 17. THUS, BY FOLLOWING THE OUR ABOVE REASONING GIVE N IN THE IDENTICAL ISSUE ON SIMILAR SET OF FACTS, WE ALLOW THIS GROUND ON THE ISSUE OF NRI GIFT IN THE PRESENT APPEALS FILED BY THE ASSESSEE I.E. I T(SS)A NO.120 & 121/IND/2011 FOR THE A.YS. 2002-03 & 2003-04. ADDITIONAL GROUND IN IT(SS)A NO.121/IND/2011 18. THE ASSESSEE HAS TAKEN ONE ADDITIONAL LEGAL GRO UND VIDE A SEPARATE APPLICATION UNDER RULE 11 OF THE INCOME-TA X (APPELLATE TRIBUNAL) RULES, 1963. THIS GROUND IS DIRECTED AGAI NST THE CIT(A)S ACTION OF ENHANCING THE ADDITION OF RS.19,34,400/- MADE BY THE AO IN MANJEET SINGH BHATIA (SS)120/IND/2011 AND OTHERS 11 RESPECT OF RIB BONDS TO RS.26,78,504/-, WITHOUT GIV ING ANY NOTICE OF ENHANCEMENT AS REGARD TO THE ENHANCEMENT OF INCOME. 19. WE HAVE HEARD RIVAL CONTENTIONS OF BOTH THE PAR TIES AND PERUSED MATERIAL AVAILABLE ON RECORD. WE FIND THAT SIMILAR ADDITIONAL GROUND FOR THE ASSESSMENT YEAR 2002-03 HAS BEEN TAKEN IN THE C ASE OF AMANDEEP SINGH BHATIA IN APPEAL NO. IT(SS)A 112/IND/2011. TH E ADDITIONAL GROUND OF THE ASSESSEE IN THE PRESENT APPEAL IS IDENTICAL WITH THAT OF THE ADDITIONAL GROUND OF SHRI AMANDEEP SINGH BHATIA FOR A.Y. 2002-03. IN THE CASE OF AMANDEEP SINGH BHATIA, WE, AFTER CONSID ERING THE SUBMISSIONS OF BOTH THE PARTIES, HAVE DISMISSED THE ADDITIONAL GROUND OF THE ASSESSEE. FOR READY REFERENCE, THE RELEVANT POR TION OF THE ORDER IS REPRODUCED HEREUNDER: WE HAVE HEARD RIVAL CONTENTIONS OF BOTH THE PARTIE S AND PERUSED THE MATERIAL AVAILABLE ON RECORD. HOWEVER, WE FIND NO M ERIT IN THE CONTENTION OF THE LD. AR OF THE ASSESSEE. WE FIND T HAT IN THE ASSESSEES CASE, FOR THE ASSESSMENT YEAR UNDER CONSIDERATION I .E. A.Y. 2002-03, THE ADDITION OF RS.70,29,000/- WAS MADE BY THE AO O N PROTECTIVE BASIS ONLY. THE ADDITION WAS MADE FOR SUCH ASSESSMENT YEA R ON THE BASIS THAT DURING SUCH ASSESSMENT YEAR ONLY, THE ASSESSEE HAD CLAIMED TO HAVE RECEIVED CERTAIN RESURGENT BONDS FROM NRIS AS GIFTS. SUCH BONDS GOT MATURED DURING THE PREVIOUS YEAR RELEVANT TO A. Y. 2004-05 FOR A SUM OF RS.1,00,44,384/-. IT WAS THEREFORE, THE AO M ADE AN ADDITION OF RS.1,00,44,384/- IN A.Y. 2004-05 ON SUBSTANTIVE BAS IS. THE ASSESSEE PREFERRED THE APPEALS AGAINST THE ASSESSMENT ORDERS PASSED FOR BOTH THE ASSESSMENT YEARS I.E. A.Y. 2002-03 AND A.Y. 200 4-05. IN OUR VIEW, THE VERY PRUPOSE OF GIVING NOTICE U/S 251(2) OF THE ACT IS TO MAKE THE ASSESSEE AWARE OF THE PROPOSED ENHANCEMENT AND CHAR GES AGAINST HIM. IN THE INSTANT CASE, THE ASSESSEE WAS ALREADY AWARE OF THE CHARGES AGAINST HIM AND THE LD. CIT(A) HAS MERELY S HIFTED ADDITION MADE IN ONE ASSESSMENT YEAR TO ANOTHER ASSESSMENT Y EAR AND THEREFORE, THERE WAS NO SPECIFIC NEED FOR ISSUANCE OF ANY NOTICE U/S 251(2) OF THE ACT. THUS, THESE ADDITION GROUNDS TAK EN BY THE ASSESSEE ARE HAVING NO MERIT AND THE SAME ARE DISMISSED. 20. FOLLOWING THE ABOVE SAME REASONING, WE DISMISS THE ADDITIONAL GROUND TAKEN BY THE ASSESSEE. MANJEET SINGH BHATIA (SS)120/IND/2011 AND OTHERS 12 GROUND NOS. 4, 5, 4, 4, 3 & 3 INVOLVED IN THE ASSES SEES APPEAL NOS.120 TO 125/IND/2011, RESPECTIVELY 21. THIS GROUND IS DIRECTED AGAINST THE CIT(A)S AC TION OF CONFIRMING THE ADDITIONS OF RS.1,03,366/-, RS.1,53,075/-, RS.8 1,756/-, RS.5,90,709/-, 2,25,551/- & RS.3,37,796/-, RESPECTIVELY, FOR THE A YS 2002-03 TO 2004-05 & 2006-07 TO 2008-09 MADE BY THE AO ON ACCOUNT OF A D HOC DISALLOWANCE OF LABOUR CHARGES AND COLLIERY EXPENSE S. BOTH THE PARTIES SUBMITTED THAT IDENTICAL FACTS AND CIRCUMSTANCES AR E INVOLVED IN THE PRESENT APPEALS, THEREFORE, WE ARE TAKING FACTS FRO M THE AY 2002-03 HAVING IDENTICAL ISSUE. 22. SHORT FACTS OF THE CASE ARE THAT THE AO HAS DEA LT WITH THE ISSUE AT PAGE NO. 21 & 22 OF HIS ORDER. THE AO, AT PAGE NO. 22 OF THE ORDER, OBSERVED THAT THE VOUCHERS OF THE LABOUR CHARGES AN D COLLIERY EXPENSES ARE SELF MADE. FURTHER, THE AO COMPARED THE CASE OF THE ASSESSEE WITH ONE ANOTHER GROUP ASSESSEE NAMELY SHRI K. S. BHATIA WHO HAD ALSO DERIVED COMMISSION INCOME AND HAD NOT DEBITED ANY E XPENSES FROM THE COMMISSION INCOME. FINALLY, THE AO HAS MADE THE ADD ITION OF RS.1,03,366/- BY MAKING AD-HOC DISALLOWANCE OF 10% OUT OF LABOUR CHARGES AND 20% OUT OF COLLIERIES EXPENSES CLAIMED TO HAVE BEEN INCURRED BY THE ASSESSEE IN HIS PROFIT & LOSS ACCOU NT. 23. MATTER CARRIED TO LEARNED CIT(A), WHO HAS DEAL T WITH THE ISSUE AT PARA 5.5, PAGE NO. 32 & 33 OF THE ORDER. THE CIT(A ) HAS CONFIRMED THE ADDITION OF RS.1,03,366/- MADE BY THE AO ON ACCOUNT OF AD HOC DISALLOWANCE OF LABOUR CHARGES AND COLLIERY EXPENSE S BY HOLDING THAT THE DISALLOWANCE SO MADE BY THE AO WAS BASED ON PROPER REASONING AND CANNOT BE TERMED AS MERE AD HOC DISALLOWANCE. MANJEET SINGH BHATIA (SS)120/IND/2011 AND OTHERS 13 24. THE LD. AR FOR THE ASSESSEE HAS MADE ORAL AS WE LL AS WRITTEN SUBMISSION AS UNDER: 1.01 THE ASSESSEE HAS CLAIMED EXPENDITURE ON ACCOU NT OF LABOUR CHARGES AT RS.8,65,152/- [PB PAGE NO. 90] AND ON ACCOUNT OF COLLIERY EXPENSES AT RS.84,255/- [PB PAGE NO. 91] IN HIS PROFIT & LOSS A CCOUNT. 1.02 THE ASSESSEE HAS MAINTAINED COMPLETE DETAILS I N RESPECT OF THE EXPENSES SO INCURRED AND THE SAME WERE ALSO SUPPORT ED BY THE NECESSARY DOCUMENTARY EVIDENCES. 1.03 THE AO, WITHOUT APPRECIATING THE GENUINENESS O F THE EXPENDITURE AND WITHOUT CONSIDERING THE MATERIAL FACT THAT THE ENTI RE EXPENDITURE SO CLAIMED BY THE ASSESSEE WERE INCURRED BY HIM NECESSARILY AND E XCLUSIVELY FOR THE PURPOSE OF HIS BUSINESS, MADE THE IMPUGNED ADDITION MERELY ON AD-HOC BASIS. 1.04 REGULAR BOOKS OF ACCOUNT MAINTAINED, ALL THE T RANSACTIONS ARE FULLY AND TRULY RECORDED AND THEY ARE ALSO VOUCHED AND OPEN T O VERIFICATION. 2.01 DURING THE COURSE OF THE ASSESSMENT PROCEEDING S, THE ASSESSEE HAD PRODUCED ALL THE BOOKS OF ACCOUNT ALONG WITH BANK S TATEMENTS, BILLS, VOUCHERS, RECEIPTS, REGISTERS AND OTHER RELEVANT RECORDS BEFO RE THE AO. 2.02 THE AO HAS NOT PIN-POINTED ANY PARTICULAR INST ANCE OF EXPENDITURE WHICH, IN HIS OPINION, REMAINED UNSUPPORTED BY ANY VOUCHER. THE AO, BY MERELY STATING THAT THE VOUCHERS WERE SELF-MADE, MADE AD-H OC DISALLOWANCE OF SUCH EXPENSES. 2.03 THE ASSESSEE HAS MAINTAINED COMPLETE DETAILS I N RESPECT OF EACH AND EVERY EXPENDITURE INCURRED BY HIM IN RESPECT OF LAB OUR CHARGES AND COLLIERY EXPENSES. COPIES OF ACCOUNTS OF THE RELEVANT EXPEND ITURE IN THE BOOKS OF THE ASSESSEE ARE PLACED AT PAGE NO. 90 & 91 OF OUR PAPE R BOOK. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, THE AD-HOC ADDITION OF RS.1,03,366/- SO MADE BY THE AO AND CONFIRMED BY TH E CIT(A) ON ACCOUNT OF DISALLOWANCE OUT OF LABOUR CHARGES AND COLLIERY EXP ENSES DESERVES TO BE DELETED IN TOTO. LD. DR HAS RELIED ON THE ORDERS OF THE REVENUE AUT HORITIES. 25. WE HAVE HEARD RIVAL CONTENTIONS OF BOTH THE PAR TIES AND PERUSED MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE ASSE SSEE HAS FILED THE FOLLOWING DOCUMENTS IN SUPPORT OF HIS CLAIM: PAGE NO. NATURE OF DOCUMENT FILED FOR THE PURPOSE OF FROM TO 90 91 COPIES OF LEDGER ACCOUNTS OF LABOUR CHARGES AND COLLIERY GIVING THE COMPLETE DETAILS OF EXPENSES INCURRED BY THE ASSESSEE MANJEET SINGH BHATIA (SS)120/IND/2011 AND OTHERS 14 EXPENSES DURING THE RELEVANT PREVIOUS YEAR 26. WE FIND THAT THE ASSESSEE HAS CLAIMED EXPENDITU RE ON ACCOUNT OF LABOUR CHARGES AT RS.8,65,152/- AND ON ACCOUNT OF C OLLIERY EXPENSES AT RS.84,255/- IN HIS PROFIT & LOSS ACCOUNT. THE ASSE SSEE HAS MAINTAINED DETAILS IN RESPECT OF THE EXPENSES SO INCURRED. HOW EVER, THE AO, MADE THE IMPUGNED ADDITION ON AD-HOC BASIS. THE ASSESSEE HAS PRODUCED ALL THE BOOKS OF ACCOUNT ALONG WITH BANK STATEMENTS, BI LLS, VOUCHERS, RECEIPTS, REGISTERS AND OTHER RELEVANT RECORDS BEFO RE THE ASSESSING OFFICER AND LD. CIT(A). THE ASSESSING OFFICER/LD. C IT(A), BY STATING THAT THE VOUCHERS WERE SELF-MADE, MADE AD-HOC DISALLOWAN CE OF SUCH EXPENSES. HOWEVER, WE FIND THAT THE ASSESSEE HAS MA INTAINED DETAILS IN RESPECT OF EXPENSES INCURRED BY HIM IN RESPECT OF L ABOUR CHARGES AND COLLIERY EXPENSES AS DETAILED AT PAGE NOS.90 & 91 O F THE PAPER BOOK. LOOKING TO THE FACTS AND CIRCUMSTANCES AND TO CUT S HORT THE MATTER, WE ARE OF THE VIEW THAT IT WOULD BE FAIR AND REASONABL E IF THE DISALLOWANCE IS SUSTAINED TO THE EXTENT OF 50%, WHICH WOULD MEET A JUSTICE TO BOTH THE PARTIES. THUS, WE PARTLY ALLOW THE ABOVE GROUNDS IN THE RESPECTIVE APPEALS OF THE ASSESSEE. GROUND NO. 5, 6, 5, 5, 4 INVOLVED IN THE ASSESSEES APPEALS IT(SS)A NOS.120 TO 124/IND/2011 27. THIS GROUND OF APPEAL IS DIRECTED AGAINST CHARG ING OF INTEREST UNDER S. 234A AND 234B. WE ARE OF THE VIEW THAT CHARGING OF INTEREST IS CONSEQUENTIAL IN NATURE, THEREFORE, SAME DOES NOT R EQUIRE ANY SEPARATE ADJUDICATION. GROUND NO.4.1 & 4.2 INVOLVED IN THE ASSESSEES APPE ALS IT(SS)A NO.121/IND/2011 A.Y. 2003-04 MANJEET SINGH BHATIA (SS)120/IND/2011 AND OTHERS 15 28. THESE GROUNDS ARE DIRECTED AGAINST THE CIT(A)S ACTION OF ENHANCING THE ADDITION OF RS.19,34,400/- MADE BY TH E AO UNDER S.68 OF THE ACT ON ACCOUNT OF RESURGENT BONDS TO RS.26,78,5 04/- WITHOUT GIVING ANY PRIOR NOTICE OF ENHANCEMENT AS CONTEMPLATED UND ER S.251(2) OF THE ACT AND WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE AND EXPLANATION OF THE ASSESSEE. 29. SHORT FACTS OF THE CASE ARE THAT THE AO HAS DEA LT WITH THE ISSUE AT PARA 1, FROM PAGE NO. 2 TO 25 OF HIS ORDER. THE CRU X OF THE FINDINGS OF THE AO, AS GIVEN AT PAGE NO. 14 OF THE ORDER, IS THAT ( I) WHY THE NRIS ARE GIFTING HUGELY TO AFFLUENT PERSONS ONLY AND NOT TO POOR PERSONS; (II) DOCUMENTATION BY ITSELF CANNOT PROVE THE REAL INTEN T OF THE TRANSACTION AND; (III) AN NRI SITTING ABROAD GIVING GIFT TO PER SONS IN INDIA THEN HOW THE SOURCES AND CREDITWORTHINESS OF THE NRI CAN BE EXAM INED. FINALLY, THE AO, AT PAGE NO. 25, HAS MADE THE ADDITION OF RS.24, 34,000/- BY HOLDING THE ENTIRE GIFTS, WHICH INCLUDE NRI GIFT AT RS.5,00 ,000/- AND GIFT IN THE FORM OF RESURGENT BONDS AT RS.19,34,400/-, RECEIVED BY THE ASSESSEE DURING THE RELEVANT ASSESSMENT YEAR, AS ACCOMMODATI ON ENTRIES UNDER S.68 OF THE ACT. 30. MATTER CARRIED TO LEARNED CIT(A), WHO HAS DEA LT WITH THE ISSUE AT PARA 2.4.1, PAGE NO. 9 OF THE ORDER AND ALSO AT PAR A 5.3, PAGE NO. 14. THE CIT(A), AT PARA 2.4.1, HAS GIVEN A TABLE SHOWIN G VARIOUS GROUNDS RAISED BY THE ASSESSEE, THE ISSUE INVOLVED AND THE APPEAL OF THE ASSESSEE/ GROUP ASSESSEE WHERE THE SUBJECT ISSUE H AS BEEN DISCUSSED BY HIM. THE CIT(A), AT PARA 5.3, HAS GIVEN A TABLE SHOWING THE ADDITION MADE BY THE AO AT RS.19,34,400/- AND ADDITION CONFI RMED BY HIM ON ACCOUNT OF RIB BONDS AT RS.26,78,504/-. ACCORDINGL Y, THE CIT(A) CONFIRMED THE ADDITION OF RS.26,78,504/-, BEING THE MATURITY VALUE OF RIB MANJEET SINGH BHATIA (SS)120/IND/2011 AND OTHERS 16 BONDS, FOLLOWING HIS OWN FINDINGS GIVEN IN THE CASE OF SHRI AMANDEEP SINGH BHATIA IN APPEAL NO. IT-223/09-10 FOR A.Y. 20 02-03. 31. THE LD. AR FOR THE ASSESSEE HAS MADE ORAL AS WE LL AS WRITTEN SUBMISSION AS UNDER: AS REGARD THESE GROUNDS TAKEN BY THE ASSESSEE IN T HE PRESENT APPEAL, IT IS SUBMITTED THAT SIMILAR GROUNDS FOR THE ASSESSMENT Y EAR 2002-03 HAS BEEN TAKEN IN THE CASE OF SHRI AMANDEEP SINGH BHATIA IN APPEAL NO . IT(SS)A 112/IND/2011. THE FACTS OF THE GROUNDS OF THE ASSESSEE IN THE PRE SENT APPEAL ARE IDENTICAL WITH THAT OF THE GROUNDS OF SHRI AMANDEEP SINGH BHATIA F OR A.Y. 2002-03. THEREFORE, IN ORDER TO AVOID REPETITION, WE WISH TO PLACE OUR REL IANCE ON OUR SYNOPSIS MADE ON THE RESPECTIVE GROUNDS MADE IN RESPECT OF SHRI AMAN DEEP SINGH BHATIA FOR A.Y. 2002-03 IN APPEAL NO. IT(SS)A 112/IND/2011. RELEVANT DOCUMENTS FILED IN THE PAPER BOOK ON WHICH THE ASSESSEE IS PLACING RELIANCE FOR THESE GROUNDS PAGE NO. NATURE OF DOCUMENT FILED FOR THE PURPOSE OF FROM TO 64 65 COPY OF CHART SHOWING THE DETAILS OF RIB GIFTS GIVING THE COMPLETE DETAILS OF THE DONORS AND THE TRANSACTIONS 66 69 COPY OF RIB BONDS ESTABLISHING THE IDENTITY O F THE DONORS, THE PURCHASE OF THE BONDS IN THE YEAR 1998 BY THE DONORS, THE TERMS OF THE ISSUE OF THE BONDS. 72 75 COPIES OF TRANSFER LETTERS ESTABLISHING THE GENUINENESS OF THE TRANSACTIONS 70 71 COPIES OF THE LETTERS ISSUED BY SBI FOR ESTABLISHING THE ASSERTION THAT THE BANK HAD ACCEPTED THE GENUINENESS OF THE TRANSACTION OF GIFTS. 82 101 RELEVANT ABSTRACT OF REPLY ON THE ISSUE FILED BEFORE CIT(A) FOR ESTABLISHING THE FACT THAT ALL THE ARGUMENTS WHICH HAVE BEEN CANVASSED BEFORE THIS HONBLE BENCH WERE ALSO MADE BEFORE THE CIT(A) BUT HE FAILED TO APPRECIATE SUCH ARGUMENTS. 102 110 SUPPLEMENTARY SUBMISSION BEFORE CIT(A) --- DO --- MANJEET SINGH BHATIA (SS)120/IND/2011 AND OTHERS 17 111 111 GIST OF THE SCHEME OF THE RIBS FOR ESTABLISHING THAT AS PER THE SCHEME, RIBS WERE TRANSFERRABLE BY WAY OF GIFT EVEN TO A NON-RELATIVE INDIAN. 32. LD. DRS HAVE RELIED ON THE ORDERS OF THE REVENU E AUTHORITIES AND SUBMITTED THAT OUR ARGUMENTS ADVANCED IN THE CASE O F AMANDEEP SINGH BHATIA ON IDENTICAL FACTS MAY BE TAKEN INTO CONSIDE RATION. 33. WE HAVE HEARD RIVAL CONTENTIONS OF BOTH THE PAR TIES AND PERUSED MATERIAL AVAILABLE ON RECORD. THE CIT(A) HAS RELIED UPON HIS OWN FINDINGS GIVEN IN THE CASE OF SHRI AMANDEEP SINGH B HATIA. WE FIND THAT THIS ISSUE HAS ALREADY BEEN DEALT WITH BY US IN THE CASE OF ONE OF THE GROUP ASSESSEES NAMELY, AMANDEEP SINGH BHATIA IN AP PEAL NO. IT(SS)A NO.112/IND/2011 FOR A.Y. 2002-03, WHEREIN W E HAVE HELD AS UNDER: WE HAVE HEARD RIVAL CONTENTIONS OF BOTH THE PARTI ES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. LOOKING TO THE FACTS AND CIRCUMSTANCES, WE FIND THAT ASSESSEE HAS FILED ORIGINAL RETURN OF INC OME U/S 139 OF THE I.T. ACT, 1961 ON 25.1.2003. ALONG WITH THE RETURN, THE ASSES SEE HAS FURNISHED THE COPY OF CAPITAL ACCOUNT, F.Y. ENDED ON 31.3.2002 IN WHICH THE RECEIPT OF RIB OF VALUE AT RS.70,29,000 WAS CLEARLY REFLECTED IN THE STATEMENT OF AFFAIRS FILED ALONG WITH THE ORIGINAL RETURN. ASSES SEE HAS SHOWN SUCH RIB BOND OF RS.70,29,000/-. WE FIND THAT ASSESSING OFFI CER HAS MADE THE ADDITION BY INVOKING PROVISIONS OF SEC. 68 OF THE A CT WHICH SAYS THAT ADDITION IS BASED ON ENTRIES FOUND IN REGULAR BOOKS OF ACCOUNTS. THE ASSESSING OFFICER DID NOT REFER ANY SEIZED MATERIAL OR ANY INCRIMINATING MATERIAL WHILE MAKING THIS ADDITION. WHILE MAKING T HE ADDITION U/S 153A, THE ADDITION CAN BE MADE IN RESPECT OF NON-ABATED ASSES SMENTS ONLY IF ANY SEIZED MATERIAL IS FOUND DURING THE COURSE OF SEARC H. THE ADDITION IS BASED ONLY ON THE MATERIAL WHICH WAS SUBMITTED BY THE ASS ESSEE DURING THE ORIGINAL ASSESSMENT ORDER. THEREFORE, NO ADDITION C AN BE MADE IN ABSENCE OF ANY INCRIMINATING MATERIAL AS HELD BY HONBLE DE LHI HIGH COURT IN THE CASE OF KABUL CHAWLA (SUPRA). THE ASSESSEE HAS FURNISHED ALL THE NECESSARY DOCUM ENTS SUCH AS, COPY OF RIB, COPY OF TRANSFER LETTERS, COPY OF LETT ER ISSUED BY SBI SHOWING TRANSFER BOND IN FAVOUR OF THE ASSESSEE THROUGH MOD E OF GIFT. WE FIND THAT THE ONLY OBJECTION BY THE REVENUE THAT THE ASSESSEE HAS PURCHASED THIS BOND BY HIS OWN MONEY BY PAYING CASH TO THE DONOR. HOWEVER, WE FIND THAT MANJEET SINGH BHATIA (SS)120/IND/2011 AND OTHERS 18 DURING THE COURSE OF SEARCH, NO SUCH DOCUMENTS OR E VIDENCES ESTABLISH ANY PAYMENT OF CASH BY THE ASSESSEE TO THE DONOR. WE AL SO FIND THAT ON MERIT, THIS ISSUE IS COVERED BY THE DECISION OF THIS BENCH IN THE CASE OF ACIT VS. PHOOLCHAND AGRAWAL IN ITA NO.381/IND/2006 RELYING U PON THE DECISION OF THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF KAN CHAN SINGH VS. CIT (2009) 221 CTR 456 (ALL) HAS HELD THAT GIFTS OF RIB S RECEIVED BY AN ASSESSEE FROM ONE NRI CANNOT BE TREATED AS INCOME O F THE ASSESSEE. WE ALSO FIND SUBSTANCE IN THE CONTENTION OF THE LD. AR OF THE ASSESSEE THAT IN VIEW OF THE DECISION OF THE ITAT, JODHPUR BENCH IN THE CASE OF DCIT VS. RAMDEV KUMAR CHYITLANGIA (2004) 89 TTJ (JD.) 346, T HE BLOOD RELATIONSHIP IS NO CONDITION PRECEDENT FOR MAKING A VALID GIFT. IN VIEW OF THESE FACTS AND CIRCUMSTANCES, WE ARE OF THE CONSIDERED VIEW THAT E VEN ON MERITS OF THE CASE, THE ADDITION MADE BY THE ASSESSING OFFICER U/ S 68 OF THE ACT ON ACCOUNT OF RIB GIFT AT RS.70,29,000/- AND SUBSEQUEN TLY, ENHANCED BY THE LEARNED CIT(A) TO RS.1,00,44,348/- IS NOT SUSTAINAB LE. THUS, EVEN ON MERITS, GROUND NOS. 3.1 & 3.2 OF THE ASSESSEE ARE A LLOWED. SINCE COMMON ISSUE ON IDENTICAL SET OF FACTS IS INVOLVED IN BOTH THE APPEALS OF THE ASSESSEE, THE IDENTICAL ISSUE OF RESURGENT INDIA BO NDS (RIB) IS ALSO ALLOWED FOR THE ASSESSMENT YEAR 2003-04 ON THE SAME REASONING. ACCORDINGLY, THIS GROUND OF GENUINENESS OF RIB IS A LLOWED IN BOTH THE PRESENT RESPECTIVE APPEALS OF THE ASSESSEE. 34. THUS, BY FOLLOWING THE OUR ABOVE REASONING GIVE N IN THE IDENTICAL ISSUE ON SIMILAR SET OF FACTS, WE ALLOW THIS GROUND IN THE PRESENT APPEAL FILED BY THE ASSESSEE I.E. IT(SS)A NO.121/IND/2011 FOR THE A.Y. 2003-04. GROUND NOS.3.1 & 3.2 INVOLVED IN THE ASSESSEES APP EALS IT(SS)A NOS.122 & 123/IND/2011 A.YS. 2004-05 & 2006-07 35. IN AY 2004-05, THESE GROUNDS ARE DIRECTED AGAIN ST THE CIT(A)S FINDING OF UPHOLDING AOS ACTION OF TREATING THE LO NG-TERM CAPITAL GAIN OF RS.45,37,320/- AS UNACCOUNTED CASH CREDITS UNDER S. 68 OF THE ACT. WHEREAS, IN THE AY 2006-07, THESE GROUNDS ARE DIREC TED AGAINST THE CIT(A)S FINDING OF UPHOLDING AOS ACTION OF TREATI NG THE SHORT-TERM CAPITAL GAIN OF RS.23,96,854/- AS UNACCOUNTED CASH CREDITS UNDER S.68 OF THE ACT. BOTH THE PARTIES SUBMITTED THAT IDENTICAL FACTS AND CIRCUMSTANCES ARE INVOLVED, THEREFORE, WE ARE TAKING FACTS FROM T HE AY 2004-05 ON IDENTICAL ISSUE. MANJEET SINGH BHATIA (SS)120/IND/2011 AND OTHERS 19 36. SHORT FACTS OF THE ISSUE ARE THAT THE ASSESSEE HAD DISCLOSED THE FACTS OF DERIVING INCOME FROM LONG-TERM CAPITAL GAI NS IN THE ORIGINAL RETURN FURNISHED MUCH PRIOR TO THE DATE OF SEARCH ( PB PAGE NO. 19 TO 21). ON A PERUSAL OF THE STATEMENT OF LONG-TERM CA PITAL GAIN, FORMING PART OF THE COMPUTATION OF INCOME ITSELF, IT IS SEE N THAT WHILE FURNISHING THE ORIGINAL RETURN, THE ASSESSEE HAD GIVEN THE COM PLETE DETAILS AS REGARD TO THE LONG-TERM CAPITAL GAINS. THE ASSESSEE HAD DULY FURNISHED THE NAME OF THE COMPANIES, NUMBER OF SHARES PURCHAS ED AND SOLD, AMOUNT OF PURCHASES AND SALES, DATE OF PURCHASES AN D SALES AND AMOUNT OF LONG-TERM CAPITAL GAIN. THE ORIGINAL RETU RN UNDER S.139 FOR THE ASSESSMENT YEAR UNDER CONSIDERATION WAS FILED BY TH E ASSESSEE MANUALLY AND ALONG WITH THE MANUAL RETURN, THE ASSE SSEE HAD NOT ONLY FURNISHED THE DETAILS AS AFORESAID, BUT HAD ALSO FI LED THE NECESSARY DOCUMENTARY EVIDENCES IN SUPPORT OF DERIVING OF SUC H GAINS FROM SALE OF SHARES. THE CASE OF THE ASSESSEE WAS ALSO SELECTED FOR SCRUTINY UNDER S.143(3) OF THE ACT AND THE THEN ASSESSING OFFICER, AFTER CARRYING OUT IN- DEPTH ENQUIRY AS REGARD TO VARIOUS INCOME SHOWN BY THE ASSESSEE IN HIS RETURN OF INCOME, WHICH INTER ALIA, INCLUDED THE VE RIFICATION OF CLAIM OF LONG-TERM CAPITAL GAIN, FRAMED THE ASSESSMENT UNDER S.143(3) OF THE ACT ON 29-12-2006 (PB PAGE NO. 6 TO 10). DURING THE COU RSE OF THE ASSESSMENT PROCEEDINGS CARRIED OUT IN THE CASE OF T HE ASSESSEE POST SEARCH, THE AO ISSUED A SHOW-CAUSE NOTICE TO THE AS SESSEE. A COPY OF THE SHOW-CAUSE NOTICE IS PLACED AT PAGE NO. 35 TO 3 7 OF THE PAPER BOOK. IN TERMS OF THE SHOW-CAUSE NOTICE, THE ASSESS EE WAS REQUIRED BY THE AO AS TO SHOW-CAUSE THAT (I) WHY THE STCG/LTCG SHOWN IN THE RETURNS SHOULD NOT BE TREATED AS ACCOMMODATION ENTR IES WITHOUT ANY REAL PROFIT UNDER S.68; (II) WHY THESE TRANSACTIONS SHOU LD NOT BE TREATED AS TRADING IN THE NATURE OF BUSINESS CONSIDERING THE M AGNITUDE OF THE SHARE DEALINGS; AND (III) TO EXPLAIN ON WHAT BASIS, SHARE S WERE PURCHASED AND MANJEET SINGH BHATIA (SS)120/IND/2011 AND OTHERS 20 SOLD BY THE ASSESSEE OF CERTAIN COMPANIES WHICH ACC ORDING TO THE AO WERE NOT WORTH INVESTING. IN RESPONSE TO SHOW-CAUSE NOTICE, THE ASSESSEE, THROUGH HIS LETTER, (PB PAGE NO. 44 TO 68 ), FURNISHED A DETAILED WRITTEN SUBMISSION BEFORE THE AO IN RESPEC T OF EACH AND EVERY QUERY RAISED BY THE AO IN THE AFORESAID SHOW-CAUSE NOTICE. MEANWHILE, THE AO ISSUED A SUMMONS UNDER S.131 OF THE ACT TO T HE ASSESSEE. THE RELEVANT PORTION OF THE STATEMENT OF THE ASSESSEE R ECORDED BY THE AO IN PURSUANCE OF SUMMONS UNDER S. 131 IS ALSO REPRODUCE D BY THE AO HIMSELF AT PAGE NO. 4 & 5 OF THE ASSESSMENT ORDER. ON A PERUSAL OF SUCH STATEMENT, IT IS SEEN THAT ALL THE QUESTIONS R AISED BY THE AO IN RESPECT OF SHARE TRANSACTIONS UNDERTAKEN BY THE ASS ESSEE WERE DULY ANSWERED BY THE ASSESSEE AND THE AO COULD NOT EXPRE SS ANY DISSATISFACTION OR FIND ANY ADVERSITY IN ANY OF THE ANSWERS GIVEN BY THE ASSESSEE. FINALLY, THE AO DISCARDED THE ENTIRE EXPL ANATION OF THE ASSESSEE AND BY EXPRESSING THE VIEW OF MONEY LAUNDE RING AND FURTHER, RELYING UPON THE DECISION OF THE HONBLE SUPREME CO URT IN THE CASE OF MCDOWELL & COMPANY LTD., HELD THE CAPITAL GAIN AS U NEXPLAINED CASH CREDIT OF THE ASSESSEE UNDER S.68 OF THE ACT. ALTER NATIVELY, THE AO ALSO HELD THAT CONSIDERING THE MAGNITUDE OF TRANSACTIONS , THE ENTIRE GAIN SHOULD BE TAXED AS BUSINESS INCOME OF THE ASSESSEE. THE AO HAS DEALT WITH THE SUBJECT ISSUE FROM PAGE NO. 2 TO 32 OF HIS ORDER. THE AO HAS GIVEN HIS FINDINGS AT PAGE NO. 20 TO 22 OF THE ORDE R. THE OPERATIVE PART OF THE AOS FINDINGS FIND PLACE AT PAGE NO. 32 OF T HE ORDER. THE AO FROM THE COPIES OF THE VARIOUS CAPITAL ACCOUNTS FILED BY THE ASSESSEE AND THE GROUP ASSESSEES, OBSERVED THAT THE ASSESSEE AND THE GROUP ASSESSEES HAD SHOWN AGGREGATE SHORT-TERM CAPITAL GAIN AND LON G-TERM CAPITAL GAIN, RESPECTIVELY OF RS.12,18,40,398/- AND RS.8,79,77,25 0/- IN VARIOUS ASSESSMENT YEARS FROM SALE OF SHARES. THE AO NOTED THAT THE ASSESSEE AND GROUP ASSESSEES HAD SHOWN STCG FROM SCRIPS OF S IX COMPANIES MANJEET SINGH BHATIA (SS)120/IND/2011 AND OTHERS 21 ONLY. THE AO FROM MAKING AN ANALYSIS FROM PROFIT & LOSS ACCOUNT OF THESE COMPANIES, FOUND THAT THERE WAS SUDDEN INCREA SE IN THE PRICES OF SHARES OF THESE COMPANIES. ACCORDING TO THE AO, SUC H INCREASE IN PRICES WAS ABNORMAL AND NOT BASED ON FUNDAMENTALS. ACCORDI NG TO THE AO, NO PRUDENT PERSON COULD HAVE MADE INVESTMENT IN SUCH C OMPANIES. THE AO ALSO NOTICED THAT SEBI HAD CONDUCTED THE ENQUIRY AS REGARD TO THE HIKE IN THE PRICES OF THE SHARES. FINALLY, THE AO B Y EXPRESSING THE THEORY OF MONEY LAUNDERING AND RELYING UPON THE DECISION O F THE HONBLE SUPREME COURT IN THE CASE OF MCDOWELL & COMPANY LTD ., AT OPERATIVE PARA AT PAGE NO. 32, HELD THAT THE ASSESSEE HAD BRO UGHT THE UNACCOUNTED CASH IN THE SYSTEM THROUGH SHAM AND ILL USORY SHARE TRANSACTIONS TO AVOID THE TAX ON THE WHOLE UNACCOUN TED MONEY AND PAID ONLY 10% OF TAX. THE AO HELD SUCH CAPITAL GAIN AS U NACCOUNTED CASH CREDIT OF THE ASSESSEE CREDITED IN HIS BOOKS OF ACC OUNT AND MADE THE ADDITION UNDER S.68 OF THE ACT. 37. MATTER CARRIED TO LEARNED CIT(A), WHO REPRODUCE D THE DETAILED SUBMISSION FILED BY THE ASSESSEE IN HIS ORDER ITSEL F. COPY OF RELEVANT ABSTRACT OF THE SUBMISSIONS AS FILED BEFORE THE CIT (A) IS PLACED AT PAGE NO. 98 TO 168 OF THE PAPER BOOK. FINALLY, THE CIT(A ) CONFIRMED THE ACTION OF THE AO IN TREATING THE LTCG AS INCOME FROM OTHER SOURCES. HOWEVER, THE CIT(A) ALLOWED THE GROUND OF THE ASSESSEE BEFOR E HIM THAT THE TRANSACTIONS OF SHARES CANNOT BE REGARDED AS TRADE IN THE NATURE. THE LD. CIT(A) HAS DEALT WITH THE ISSUE AT PARA 2.4.1, PAGE NO. 9 AND ALSO AT PARA 5.3, PAGE NO. 13 OF THE ORDER. THE LD. CIT(A) , AT PARA 2.4.1, HAS GIVEN A TABLE SHOWING VARIOUS GROUNDS RAISED BY THE ASSESSEE, THE ISSUE INVOLVED AND THE APPEAL OF THE ASSESSEE/ GROUP ASSE SSEE WHERE THE SUBJECT ISSUE HAS BEEN DISCUSSED BY HIM. ACCORDINGLY, THE CIT(A) CONFIRMED THE ADDITION OF RS.45,37,320/-, BEING THE RE-CHARACTERIZATION OF MANJEET SINGH BHATIA (SS)120/IND/2011 AND OTHERS 22 LONG-TERM CAPITAL GAIN AS UNEXPLAINED CASH CREDIT U NDER S.68, FOLLOWING HIS OWN FINDINGS GIVEN IN THE CASE OF SHRI AMANDEEP SINGH BHATIA IN APPEAL NO. IT-227/09-10 FOR A.Y. 2006-07. 38. THE LD. AR FOR THE ASSESSEE HAS MADE ORAL AS WE LL AS WRITTEN SUBMISSION AS UNDER: AS REGARD THIS GROUND TAKEN BY THE ASSESSEE IN THE PRESENT APPEAL, IT IS SUBMITTED THAT SIMILAR GROUNDS FOR THE ASSESSMENT Y EAR 2006-07 HAS BEEN TAKEN IN THE CASE OF SHRI AMANDEEP SINGH BHATIA IN APPEAL NO. IT(SS)A 115/IND/2011. THE FACTS OF THE GROUNDS OF THE ASSESSEE IN THE PRE SENT APPEAL ARE IDENTICAL WITH THAT OF THE GROUNDS OF SHRI AMANDEEP SINGH BHATIA F OR A.Y. 2006-07. THEREFORE, IN ORDER TO AVOID REPETITION, WE WISH TO PLACE OUR RELIANCE ON OUR SYNOPSIS MADE ON THE RESPECTIVE GROUNDS MADE IN RESPECT OF SHRI A MANDEEP SINGH BHATIA FOR A.Y. 2006-07 IN APPEAL NO. IT(SS)A 115/IND/2011. RELEVANT DOCUMENTS FILED IN THE PAPER BOOK ON WHICH THE ASSESSEE IS PLACING RELIANCE FOR THESE GROUNDS PAGE NO. NATURE OF DOCUMENT FILED FOR THE PURPOSE OF FROM TO 80 80 STATEMENT SHOWING DETAILS OF LTCG FOR GIVING THE SCRIP-WISE AND DATE-WISE DETAILS OF LTCG 81 81 COPY OF DEMAT ACCOUNT ESTABLISHING THE HOLDING PERIOD OF THE SHARES 82 82 CONTRACT NOTES ISSUED BY THE BROKERS IN RESPECT OF PURCHASES OF SHARES ESTABLISHING THE PURCHASES HAVE BEEN MADE THROUGH SEBI REGISTERED BROKERS 83 83 CONTRACT NOTES ISSUED BY THE BROKERS IN RESPECT OF SALES OF SHARES ESTABLISHING THE SALES HAVE BEEN MADE THROUGH SEBI REGISTERED BROKERS 84 84 LEDGER ACCOUNT OF THE SHARE BROKER IN BOOKS OF ASSESSEE ESTABLISHING THE SHARES TRANSACTIONS 85 85 LEDGER ACCOUNT OF THE ASSESSEE IN BOOKS OF SHARE BROKER CONTAINING CONFIRMATION OF SHARE TRANSACTIONS ---- DO ---- 86 86 ABSTRACTS OF THE BANK ACCOUNT OF THE ASSESSEE SHOWING ESTABLISHING THAT THE PAYMENTS AGAINST SHARE PURCHASES AND RECEIPTS OF MANJEET SINGH BHATIA (SS)120/IND/2011 AND OTHERS 23 PAYMENT FOR PURCHASES AND SALE PROCEEDS OF SHARES SALES PROCEEDS HAVE BEEN MADE THROUGH BANKING CHANNELS 87 97 COPIES OF QUOTATIONS OF RELEVANT STOCK EXCHANGE HIGHLIGHTING THE TRADING VOLUME OF SHARES AND THEIR PRICE ON THE RELEVANT DATE OF TRANSACTION OF PURCHASES AND SALES ESTABLISHING THE MARKET PRICE OF THE SCRIP ON THE PREVAILING DAY OF PURCHASE AND SALE 98 168 COPY OF RELEVANT ABSTRACT OF SUBMISSION FILED IN RESPECT OF CAPITAL GAIN FILED BEFORE CIT(A) DATED 25-05- 2011 ESTABLISHING THAT THE ASSESSEE MADE A DETAILED EXPLANATION BEFORE THE CIT(A) IN RESPECT OF CAPITAL GAIN ISSUE. 6 10 COPY OF THE ORIGINAL ASSESSMENT ORDER PASSED U/S. 143(3) OF THE ACT IN THE CASE OF THE ASSESSEE FOR A.Y. 2004-05 ESTABLISHING THAT THE DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS UNDER S.143(3), THE THEN AO HAS DULY EXAMINED AND VERIFIED THE SUBJECT ISSUE OF LTCG. 39. LD. DRS HAVE RELIED ON THE ORDERS OF THE REVENU E AUTHORITIES AND SUBMITTED THAT OUR ARGUMENTS ADVANCED IN THE CASE O F AMANDEEP SINGH BHATIA ON IDENTICAL FACTS MAY BE TAKEN INTO CONSIDE RATION. 40. WE HAVE HEARD RIVAL CONTENTIONS OF BOTH THE PAR TIES AND PERUSED MATERIAL AVAILABLE ON RECORD. THE CIT(A) HAS RELIED UPON HIS OWN FINDINGS GIVEN IN THE CASE OF SHRI AMANDEEP SINGH B HATIA. WE FIND THAT THIS ISSUE HAS ALREADY BEEN DEALT WITH BY US IN THE CASE OF ONE OF THE GROUP ASSESSEES NAMELY, AMANDEEP SINGH BHATIA IN AP PEAL NO. IT(SS)A NO.115/IND/2011 FOR A.Y. 2006-07, WHEREIN W E HAVE HELD AS UNDER: IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF TH E CASE, VARIOUS DOCUMENTARY EVIDENCES PLACED ON RECORD AND IN THE L IGHT OF THE VARIOUS JUDICIAL PRONOUNCEMENTS, WE ARE OF THE CONSIDERED V IEW THAT THERE WAS ABSOLUTELY NO JUSTIFICATION FOR BOTH THE AUTHORITIE S BELOW IN DISBELIEVING THE MANJEET SINGH BHATIA (SS)120/IND/2011 AND OTHERS 24 GENUINENESS OF THE LONG TERM CAPITAL GAIN AND SHORT TERM CAPITAL GAIN SHOWN BY THE ASSESSEE IN HIS RETURN OF INCOME, MERELY ON GUESSWORK, CONJECTURES AND SURMISES. ACCORDINGLY, THESE ADDITIONS ARE DIRE CTED TO BE DELETED. CONSEQUENTLY, GROUND NOS. 3.1 TO 3.3 ON THE ISSUE O F GENUINENESS OF LONG TERM CAPITAL GAIN/SHORT TERM CAPITAL GAIN ARE ALLOW ED. SINCE COMMON ISSUE ON SIMILAR SET OF FACTS AND CIRCUMSTANCES ARE INVOL VED IN THE ASSESSMENT YEAR 2005-06, WE, FOLLOWING OUR ABOVE DECISION GIVE N IN THE ASSESSMENT YEAR 2006-07, ALLOW THE GROUND NOS.3.1 & 3.2 ON THE ISSUE OF LONG TERM CAPITAL GAIN/SHORT TERM CAPITAL GAIN FOR THE ASSESS MENT YEAR 2005-06 TOO IN ASSESSEES APPEAL IT(SS)A NO.114/IND/2014 . 41. THUS, BY FOLLOWING OUR ABOVE ORDER ON THE IDENT ICAL ISSUE ON SIMILAR SET OF FACTS, WE ALLOW THE PRESENT GROUNDS IN RESPE CT OF LTCG/STCG IN THE PRESENT TWO APPEALS FILED BY THE ASSESSEE I.E. IT(SS)A NO.122 & 123/IND/2011 FOR THE A.YS. 2004-05 & 2006-07. GROUND NO.2 INVOLVED IN THE ASSESSEE APPEAL IT(SS)A NO.125/IND/2011 A.Y. 2008-09 42. THIS GROUND IS DIRECTED AGAINST THE CIT(A)S AC TION OF CONFIRMING THE ADDITION OF RS.17,00,000/- MADE BY THE AO ON AC COUNT OF CASH SEIZED FROM THE RESIDENTIAL PREMISES OF THE ASSESSE E DURING THE COURSE OF THE SEARCH. 43. SHORT FACTS OF THE ISSUE ARE THAT THE AO HAS DE ALT WITH THE ISSUE AT PARA 2, ON PAGE NO. 3 & 4 OF HIS ORDER. THE AO, AT PARA 2 OF THE ORDER, ALLEGED THAT DURING THE COURSE OF SEARCH PROCEEDING S, THE ASSESSEE COULD NOT GIVE ANY SATISFACTORY EXPLANATION ABOUT T HE SOURCE. THE AO FURTHER NOTED THAT DURING THE SEARCH PROCEEDINGS, T HE BEING ASKED ABOUT THE SOURCE, THE ASSESSEE IN HIS STATEMENT GIVEN UND ER S.132(4) (PB PAGE NO. 5 TO 14), STATED THAT THE SUM WAS REQUIRED FOR PURCHASE OF LAND FOR WASHERY AT GHUGUS AND THEREFORE THE CASH WAS LY ING WITH HIM. THE AO ALSO RECORDED THE STATEMENT OF THE ASSESSEE UNDE R S.131 ON 15-12- 2009 (PB PAGE NO. 63 TO 67), WHEREIN THE ASSESSEE S TATED THAT THE CASH WAS BELONGING TO M/S. BHATIA INTERNATIONAL LTD. WHI CH WAS LYING IN HIS HOUSE. HOWEVER, THE AO BY DISREGARDING THE EXPLANAT ION OF THE MANJEET SINGH BHATIA (SS)120/IND/2011 AND OTHERS 25 ASSESSEE, MADE THE IMPUGNED ADDITION OF RS.17,00,00 0/- IN THE HANDS OF THE ASSESSEE. 44. MATTER CARRIED TO LEARNED CIT(A), WHO I. THE CI T(A) HAS DEALT WITH THE ISSUE AT PARA 4.3, PAGE NO. 14 OF THE ORDER. T HE CIT(A) HAS CONFIRMED THE ADDITION OF RS.17,00,000/- MADE BY TH E AO ON ACCOUNT OF CASH SEIZED FROM THE RESIDENTIAL PREMISES OF THE AS SESSEE BY HOLDING THAT THERE IS A CONTRADICTION IN THE EXPLANATION OF THE ASSESSEE FROM WHAT STATED DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND THAT STATED BEFORE THE CIT(A). 45. THE LD. AR FOR THE ASSESSEE HAS MADE ORAL AS WE LL AS WRITTEN SUBMISSION AS UNDER: 1.00 THAT, DURING THE COURSE OF THE SEARCH PROCEED INGS, A CASH OF RS.17,00,000/- WAS FOUND AND SEIZED FROM THE RESIDE NTIAL PREMISES OF THE ASSESSEE. 2.01 THAT, A STATEMENT UNDER S.132(4) OF THE ACT OF THE ASSESSEE WAS RECORDED BY THE SEARCH PARTY ON 25-09-2007 [KINDLY REFER PB PAGE NO. 5 TO 14]. THE ASSESSEE, VIDE Q. NO. 18 [PB PAGE NO. 11], WAS ASKED TO EXPLAIN THE SOURCE OF CASH OF RS.17,06,200/- FOUND FROM HIS BEDROOM. IN RESPONSE, THE ASSESSEE ANSWERED THAT THE SUBJECT CASH WAS KEP T FOR PURCHASING SOME LAND AT GHUSGUS FOR WASHERY AND FOR PURCHASING RAIL WAY SIDING. THE ASSESSEE FURTHER STATED THAT THOUGH THE VERY SOURCE/ EVIDENC E OF WITHDRAWAL OF SUCH CASH WAS NOT AVAILABLE WITH HIM AT THAT TIME BUT SU CH CASH MUST HAVE BEEN RECORDED IN HIS BOOKS OR IN THE BOOKS OF ACCOUNT OF THE COMPANY I.E. M/S. BHATIA INTERNATIONAL LTD. 2.02 THAT, DURING THE COURSE OF POST-SEARCH ASSESSM ENT PROCEEDINGS, THE ASSESSEE WAS AGAIN REQUIRED BY THE AO TO FURNISH HI S EXPLANATION ABOUT THE SOURCE OF CASH FOUND DURING THE COURSE OF SEARCH. I N RESPONSE TO THE SAME, THE ASSESSEE FURNISHED HIS EXPLANATION THAT SUCH CA SH WAS LYING WITH HIM FOR THE PURPOSE OF PURCHASING A LAND AT GHUSGUS. SUBSEQ UENTLY, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO RECORDED A STATEMENT OF THE ASSESSEE UNDER S.131 OF THE ACT. A COPY OF SUCH STA TEMENT IS PLACED AT PAGE NO. 63 TO 67 OF OUR PAPER BOOK. THE AO, VIDE Q. NO. 20, AGAIN REQUIRED THE ASSESSEE TO FURNISH HIS EXPLANATION ON THE SOURCE O F SUCH CASH. IN RESPONSE, THE ASSESSEE CATEGORICALLY STATED THAT THE CASH WAS BELONGING TO M/S. BHATIA INTERNATIONAL LTD.. THE AO, VIDE Q. NO. 21, ASKED T HE ASSESSEE THAT HOW THE CASH OF RS.17 LAKHS REACHED THE HANDS OF THE ASSESS EE FROM THE COMPANY. THE ASSESSEE ANSWERED THAT HE IS ONE OF THE DIRECTO RS OF THE COMPANY AND WHENEVER THE COMPANY PLANS TO PURCHASE ANY WASHERY, IT OBTAINS ASSISTANCE OF THE ASSESSEE. THE RELEVANT ABSTRACT OF THE STATE MENT HAS ALSO BEEN REPRODUCED BY THE AO AT PAGE NO. 3 & 4 OF HIS ORDER . MANJEET SINGH BHATIA (SS)120/IND/2011 AND OTHERS 26 2.03 THAT, THE AO, WITHOUT ASSIGNING ANY REASON, DI SREGARDED THE EXPLANATION OF THE ASSESSEE AND ADDED A SUM OF RS.1 7,00,000/- TO THE TOTAL INCOME OF THE ASSESSEE. 3.00 THAT, DURING THE COURSE OF APPELLATE PROCEEDIN GS, THE ASSESSEE FURNISHED A DETAILED EXPLANATION BEFORE THE CIT(A) VIDE HIS LETTER DATED NIL [KINDLY REFER PB PAGE NO. 54 TO 59]. THE ASSESSEE, AT GROUND NO. 3 [PB PAGE NO. 57], BY EXTENDING HIS EXPLANATION OVER THE SOUR CES OF CASH OF RS.17,00,000/-, FURNISHED THE BREAK-UP OF CASH BELO NGING TO HIMSELF AND M/S. BHATIA INTERNATIONAL LTD. RESPECTIVELY AT RS.7,54,4 77/- AND RS.9,45,523/-. IT WAS FURTHER ESTABLISHED THAT THE ENTIRE CASH OF RS. 7,54,477/- AND RS.9,45,523/- WAS DULY RECORDED BY THE ASSESSEE AND THE COMPANY IN THEIR RESPECTIVE BOOKS OF ACCOUNT. SUCH FACT MAY ALSO BE VERIFIED FROM THE COPY OF LEDGER ACCOUNT OF CASH SEIZED BY IT DEPT. IN THE BOOKS OF ACCOUNT OF M/S. BHATIA INTERNATIONAL LTD. BEING PLACED AT PAGE NO. 77 OF OUR PAPER BOOK. 4.00 THAT, THE CIT(A) DID NOT CONSIDER THE EXPLANAT ION OF THE ASSESSEE AND VARIOUS DOCUMENTARY EVIDENCES FURNISHED BY THE ASSE SSEE IN SUPPORT OF HIS CONTENTION. FINALLY, THE CIT(A) ALLEGED THAT THE AS SESSEE FAILED TO GIVE ANY SATISFACTORY EXPLANATION AND CONFIRMED THE ADDITION OF RS.17,00,000/- IN THE HANDS OF THE ASSESSEE. 5.00 IT IS SUBMITTED THAT THE ASSESSEE HAS PROPERLY EXPLAINED THE SOURCE OF CASH FOUND FROM HIS RESIDENTIAL PREMISES ALONG WITH NECESSARY EVIDENCES AS REGARD TO THE RECORDING OF SUCH CASH IN THE REGULAR BOOKS OF ACCOUNT OF THE ASSESSEE OR M/S. BHATIA INTERNATIONAL LTD.. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, THE ADDITION OF RS.17,00,000/- SO MADE BY THE AO AND CONFIRMED BY T HE CIT(A) ON ACCOUNT OF CASH SEIZED DURING THE COURSE OF SEARCH DESERVES TO BE DELETED IN TOTO. 46. THE LD. DR HAS RELIED ON THE ORDERS OF THE REVE NUE AUTHORITIES. 47. WE HAVE HEARD RIVAL CONTENTIONS OF BOTH THE PAR TIES AND PERUSED MATERIAL AVAILABLE ON RECORD. ON PERUSAL OF ORDERS OF REVENUE AUTHORITIES AND SUBMISSIONS THEREOF, WE FIND THAT D URING THE SEARCH, THE ASSESSEE COULD NOT GIVE ANY SATISFACTORY EXPLANATIO N ABOUT THE SOURCE OF CASH AT RS.17 LACS. THE ASSESSEE IN HIS STATEMENT G IVEN UNDER S.132(4) STATED THAT THE SUM WAS REQUIRED FOR PURCHASE OF LA ND FOR WASHERY AT GHUGUS AND THEREFORE THE CASH WAS LYING WITH HIM, H OWEVER, THE SOURCE OF CASH COULD NOT BE EXPLAINED. THE AO ALSO RECORDE D THE STATEMENT OF THE ASSESSEE UNDER S.131, WHEREIN THE ASSESSEE STAT ED THAT THE CASH WAS BELONGING TO M/S. BHATIA INTERNATIONAL LTD. WHI CH WAS LYING IN HIS MANJEET SINGH BHATIA (SS)120/IND/2011 AND OTHERS 27 HOUSE. BUT, THE ASSESSING OFFICER DECLINED TO ACCEP T THE SAME AS HE FOUND THAT AT THE TIME OF SEARCH, THE BOOKS OF BHAT IA INTERNATIONAL LTD. REFLECTED THE CASH BALANCE OF ONLY RS.2 LACS. BEFOR E LD. CIT(A), THE ASSESSEE STATED THAT RS.7,54,477/- BELONGED TO THE ASSESSEE, WHEREAS THE BALANCE AMOUNT OF RS.9,45,523/- BELONGED TO BHA TIA INTERNATIONAL LTD. CONSIDERING THE FACTS, THE LD. CIT(A) WAS OF T HE VIEW THAT THERE IS A CONTRADICTION IN THE EXPLANATION OF THE ASSESSEE AS AT ONE POINT BEFORE THE ASSESSING OFFICER, THE ASSESSEE STATED THAT THE ENTIRE CASH SEIZED FROM HIS PREMISES BELONGED TO BHATIA INTERNATIONAL LTD., WHEREAS IN THE BOOKS WHICH WERE PREPARED AFTER THE SEARCH, EFFORT HAS BEEN MADE TO REFLECT THE PART OF THE AMOUNT BELONGING TO THE ASS ESSEE AND THE BALANCE TO THE SAID CO. ON CONSIDERATION OF THESE FACTS AND SUBMISSIONS THEREOF, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORD ER OF THE LD. CIT(A). LD. CIT(A), HAVING CONSIDERED THE FACTS AND SUBMISSIONS , REACHED TO THE ABOVE CONCLUSION. THE FINDING OF LD. CIT(A) COULD N OT BE CONTROVERTED BEFORE US. THUS, THIS GROUND OF THE ASSESSEES APPE AL I.E. IT(SS)A NO.125/IND/2011 FOR THE AY 2008-09 IS DISMISSED. 48. FINALLY, ASSESSEES APPEALS ARE PARTLY ALLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 18.5.201 6. SD/- (B.C. MEENA) ACCOUNTANT MEMBER SD/- ( D.T. GARASIA) JUDICIAL MEMBER DATED : 17.8.2016 COPY TO: ASSESSEE/RESPONDENT/CIT(A)/CIT/DR, INDORE