The ACIT, 2(1), Bhopal V. Shri Manoj Chourasia, Bhopal

ITSSA 132/IND/2012

• Counselvise Citation: [2012] 121 COUNSELVISE.COM (IT) 8187 (ITAT-INDORE)
• Duration Of Justice: 2 month(s) 6 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 09-07-2012
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 03-05-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MRIDULA BAJPAI
• Assessee Lawyers: SAKSHI VERMA; H P VERMA SHRI N D PATWA
• Keywords: Unexplained cash credit; Unexplained investment; Depreciation; Search and seizure; Salary income; Document seized; Deemed to accrue or arise in india; Tax effect; Onus to prove; Documents seized
• Section: 69C; 143(3); 153A; 260A; 68; 69; 148; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARM A, A.M. PAN NO. : AAOPC0232C I.T(SS).A.NOS. 130 TO 136/IND/2012 A.Y. : 2003 - 04 TO 2009 - 10 ACIT, SHRI MANOJ CH AURAISA , 2(1), BHOPAL VS IIIRD FLOOR, KANHA NIRUPAM TOWER, MALVIYA NAGAR, BHOPAL APPELLANT RESPONDENT PAN NO. : ADBPC0758K I.T(SS).A.NOS. 137 TO 143/IND/2012 A.Y. : 2003 - 04 TO 2009 - 10 ACIT, SHRI MANOHAR CH AURASIA , 2(1), BHOPAL VS SHYAM SMRITI BHAWAN, PALTAN AREA, SEHORE. APPELLANT RESPONDENT APPELLANT BY : SMT. MRIDULA BAJPAI, CIT DR RESPONDENT BY : SHRI H.P.VERMA, SHRI N. D. PATWA AND MS. SAKSHI VERMA, ADVOCATES. DATE OF HEARING : 17 .07.201 3 DATE OF PRONOUNCEMENT : 12 . 0 8 .2012 -: 2: - 2 O R D E R PER R.C.SHARMA, A.M.A THESE ARE THE APPEALS FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) DATED 27.2.2012 FOR THE ASSESSMENT YEARS 2003-04 TO 2009-10, IN THE MATTER OF ORDER PASSED U /S 153A READ WITH SECTION 143(3) OF THE INCOME-TAX ACT, 196 1. 2. COMMON GRIEVANCE OF THE REVENUE IN CASE OF BOTH THE ASSESSEES IN RESPECT OF ASSESSMENT YEARS MENTIONED HEREINABOVE, PERTAINS TO DELETION OF ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CASH CR EDIT IN ASSESSEES BANK ACCOUNT, WHEN THE ASSESSEE HAS FAIL ED TO FURNISH ANY SATISFACTORY EXPLANATION ABOUT THE NATU RE AND SOURCE THEREOF AS REQUIRED BY THE PROVISIONS OF SEC TION 68 OF THE INCOME-TAX ACT, 1961. 3. AT THE OUT-SET, IT IS MADE CLEAR THAT ALL THESE APP EALS WERE HEARD AND DECIDED BY THE TRIBUNAL EX-PARTE QUA ASSESSEE VIDE ORDER DATED 9 TH JULY, 2012. IT WAS OBSERVED IN THIS ORDER THAT INSPITE OF GIVING REGISTERED NOTICE, NOBODY A PPEARED ON BEHALF OF THE ASSESSEE NOR ANY ADJOURNMENT PETITION WAS MOVED BY ASSESSEE, THEREFORE, THE BENCH DECIDED TO DISPOSE OF -: 3: - 3 THE APPEALS AFTER HEARING THE LD. CIT DR WHO APPEAR ED ON BEHALF OF THE REVENUE. AFTER RECEIPT OF THE TRIBUNA L ORDER DATED 9 TH JULY, 2012, THE ASSESSEE FILED A MISC. PETITION TO THE EFFECT THAT NOTICE ISSUED BY TRIBUNAL WAS NOT SERVED TO TH E ASSESSEE, THUS, OPPORTUNITY WAS NOT PROVIDED TO THE ASSESSEE TO PUT HIS CASE, WHICH AMOUNTS TO VIOLATION OF PRINCIPLE OF NA TURAL JUSTICE. AFTER HEARING BOTH THE SIDES, EX-PARTE ORDER WAS RE CALLED BY THE TRIBUNAL VIDE ITS ORDER DATED 7 TH NOVEMBER, 2012. THUS, THE PRESENT APPEALS ARE AGAIN HEARD BECAUSE OF RECALLIN G OF THE EX- PARTE ORDER DATED 9 TH JULY, 2012. 4. FACTS IN BRIEF ARE THAT SEARCH AND SEIZURE ACTION W AS CONDUCTED U/S 132 OF THE INCOME-TAX ACT, 1961, AT T HE CHAURASIA GROUP OF SEHORE ON 22.01.2009. SHRI MANOJ CHAURASIA IS AN LIC AGENT AND HIS FATHER, SHRI MANO HARLAL CHAURASIA OF SEHORE IS AN ADVOCATE AND IS ENGAGED I N TAX PRACTICE. DURING THE COURSE OF SEARCH, IT WAS FOUND THAT SHRI MANOHAR LAL CHAURASIA, SHRI MANOJ CHAURASIA AND SOM E OTHER FAMILY MEMBERS HAVE DEPOSITED HUGE CASH IN TH EIR BANK ACCOUNTS. MANY DEPOSIT SLIPS OF CASH IN DIFFERENT B ANK ACCOUNTS WERE FOUND DURING THE COURSE OF SEARCH. DU RING THE -: 4: - 4 COURSE OF SEARCH OPERATION, STATEMENT OF SHRI MANOJ CHAURASIA, FLAT NO.1, 3 RD FLOOR KANHA NIRUPAM TOWER 62, MALVIYA NAGAR, BHOPAL, WAS RECORDED WHERE HE TOLD T HAT HE IS A LIC AGENT AS WELL AS AGENT FOR INVESTMENT IN MUTU AL FUND AND FROM 25 TH NOVEMBER, 2008, ALSO WORKING AS CONSULTANT IN VODAPHONE. IN REPLY OF QUESTION NO. 5 AND 6, HE TOL D THAT HE DOES NOT RECEIVE CASH AMOUNT FOR PAYMENT OF PREMIUM OF LIC FROM CLIENTS. IT IS SEEN THAT CASH HAVE BEEN DEPOSI TED IN THESE ACCOUNTS REGULARLY. WHEN THIS ISSUE WAS CONFRONTED BY ASSESSING OFFICER WITH SHRI MANOJ CHAURASIA HE TOLD THAT THESE CASH BELONG TO HIS CLIENTS BUT NO DETAILS OR NAMES OF ANY EVIDENCES TO PROVE HIS CONTENTION HAS BEEN FURNISHE D BY HIM DESPITE THE OPPORTUNITY PROVIDED TO THEM. THE ASSE SSEE WAS ASKED TO EXPLAIN THE CREDITS AND DEBITS APPEARING I N THE PASS BOOKS OF BANK ACCOUNTS OF DIFFERENT PERSONS AND THE FAMILY MEMBERS OF M.L. CHAURASIA AND MANOJ CHAURASIA. BY OBSERVING THAT THE ASSESSEE HAS FAILED TO DISCHARGE THEIR ONUS TO EXPLAIN THE SOURCE OF CASH DEPOSITED IN THEIR BA NK ACCOUNTS ADDITIONS WERE MADE BY THE ASSESSING OFFICER. THE A DDITION SO MADE ON ACCOUNT OF CASH FOUND TO BE DEPOSITED IN TH E BANK -: 5: - 5 ACCOUNT OF ASSESSEE CHAURASIA FAMILY WAS DELETED BY THE LD.CIT(A) AFTER OBSERVING THAT AS PER THE DAILY CAS H FLOW BREAK UP FOR THE WHOLE YEAR, THERE WAS SUFFICIENT CASH AV AILABLE IN THE CASH BOOK FOR DEPOSIT IN THE BANK ACCOUNT. A CO NSOLIDATED ORDER WAS PASSED BY CIT(A) IN RESPECT OF ALL THE YE ARS INVOLVED IN SEARCH PROCEEDINGS. 5. SMT. MRIDULA BAJPAI, LD. CIT DR REITERATED THE CONTENTION MADE BEFORE THE TRIBUNAL IN EARLIER PROC EEDINGS AND FURTHER CONTENDED THAT THE TRIBUNAL VIDE ITS OR DER DATED 9 TH JULY, 2012, HAVE JUST RESTORED THE MATTER TO THE F ILE OF THE ASSESSING OFFICER WITH SPECIFIC DIRECTION, WHICH TH E ASSESSING OFFICER WILL FULFILL WHILE GIVING EFFECT TO THE ORD ER OF THE TRIBUNAL. SHE FURTHER RELIED ON THE ORDER OF THE AS SESSING OFFICER AND CONTENDED THAT ASSESSEE COULD NOT SUBST ANTIATE THE SOURCE OF CASH DEPOSITED IN BANK ACCOUNT BY PLA CING EVIDENCE ON RECORD, THEREFORE, THE ADDITIONS MADE B Y THE ASSESSING OFFICER SHOULD BE UPHELD AND THE ORDER OF THE CIT(A) SHOULD BE SET-ASIDE. 6. ON THE OTHER HAND THE LD. AUTHORIZED REPRESENTATIVE SHRI H.P.VERMA, CONTENDED THAT THE DETAILED SUBMISS IONS WERE PLACED BEFORE THE CIT(A) ALONGWITH DOCUMENTARY EVID ENCE AND BY CONSIDERING THE SAME, THE LD. CIT(A) HAS DELETED THE ADDITION. HE FURTHER CONTENDED THAT ALL THE DOCUMEN TARY -: 6: - 6 EVIDENCE PLACED BEFORE THE CIT(A) WERE ALREADY BEFO RE THE ASSESSING OFFICER AND THAT IS THE REASON THAT REVEN UE HAS NOT TAKEN ANY GROUND WITH REGARD TO ANY ADDITIONAL EVID ENCE HAVING BEEN RELIED BY THE LD.CIT(A) IN CONTRAVENTIO N OF RULE 46A OF THE INCOME-TAX RULES. HE FURTHER PLACED ON R ECORD THE DETAILED CHART OF CASH AND CHEQUE RECEIVED FROM IND IVIDUAL CLIENTS, WHICH WERE DEPOSITED IN THE BANK ACCOUNT O F THE ASSESSEE AND ULTIMATELY UTILIZATION FOR DEPOSIT IN LIC ON ACCOUNT OF PREMIUM DUE FROM RESPECTIVE CLIENTS. OUR ATTENTION WAS ALSO INVITED TO THE DETAILED OBSERVATIONS OF TH E LD.CIT(A) IN RESPECT OF EACH YEAR FOR THE AVAILABILITY OF CASH A S PER BOOKS OF ACCOUNTS AND DEPOSIT OF CASH IN THE BANK ACCOUNT. A S PER LD. AUTHORIZED REPRESENTATIVE, THE DIRECTION GIVEN BY T HE TRIBUNAL TO BE FOLLOWED BY THE ASSESSING OFFICER, HAVE BEEN COMPLIED WITH BY THE ASSESSEE AND DETAILS OF WHICH WERE ALSO PLACED IN THE PAPER BOOK. AS PER LD. AUTHORIZED REPRESENTATI VE, THE DIRECTION OF THE TRIBUNAL HAVE ALREADY BEEN COMPLIE D WITH, THEREFORE, THE MATTER SHOULD NOT BE RESTORED TO THE FILE OF ASSESSING OFFICER AND SHOULD BE DECIDED BY THE TRIB UNAL ITSELF. -: 7: - 7 7. THE LD. AUTHORIZED REPRESENTATIVE FURTHER ARGUED T HAT TAX EFFECT IN THE CASE OF MANOJ CHAURASIA IN THE AS SESSMENT YEAR 2003-04 AND IN THE CASE OF MANOHAR CHAURASIA I N THE ASSESSMENT YEARS 2003-04, 2004-05 AND 2005-06, WAS LESS THAN THE LIMITS OF RS. 3 LAKHS AS PRESCRIBED BY THE DEPARTMENT. IN VIEW OF THE TAX LIMITS IN ALL THESE FOUR I.T(SS).A.NO. 130/IND/2012 IN THE CASE OF MANOJ CHA URASIA AND I.T(SS).A.NOS. 137, 138 AND 139/IND/2012 IN THE CASE OF MANOHAR CHAURASIA, BEING LESS THAN RS. 3 LAKHS IN E ACH YEAR, THE REVENUE SHOULD NOT HAVE COME IN APPEAL BEFORE T HE TRIBUNAL. 8. WE HAVE HEARD THE RIVAL CONTENTIONS. WE FOUND THAT TAX EFFECT IN THE CASE OF MANOJ CHAURASIA IN THE AS SESSMENT YEAR 2003-04 AND MANOHAR CHAURASIA IN THE ASSESSMEN T YEARS 2003-04, 2004-05 AND 2005-06 WAS LESS THAN RS . 3 LAKHS AS PRESCRIBED BY THE C. B. D. T. IN ITS REVIS ED MONETARY LIMIT ISSUED VIDE INSTRUCTION NO.3/2011 DATED 9.2.2 011, THEREFORE, THE REVENUE SHOULD NOT HAVE COME IN THE APPEALS BEFORE THE TRIBUNAL. IT IS ALSO NOT IN DISPUTE THAT THESE APPEALS WERE FILED BY REVENUE AFTER 09.02.2011. WHILE COMIN G TO THIS -: 8: - 8 CONCLUSION, WE ARE SUPPORTED BY THE DECISION OF THI S BENCH IN THE CASE OF OMPRAKASH WADHWANI (ITA NO. 481/IND/201 2 ORDER DATED 14 TH FEBRUARY, 2013) THE RELEVANT PORTION OF WHICH IS REPRODUCED HEREUNDER :- AGGRIEVED BY THE ORDER DATED 5.6.2012 OF THE LD. C IT(A)-II, INDORE, THE REVENUE IS IN APPEAL FOR ASSESSMENT YEA R 2008-09 ON THE GROUNDS AS DETAILED IN THE GROUNDS OF THE APPEA L. 2. AT THE OUTSET, THE LEARNED COUNSEL FOR THE ASSES SEE SHRI S.S. SHEETAL POINTED OUT THAT THE TAX EFFECT IN THE IMPU GNED APPEAL, FILED BY THE REVENUE, IS BELOW PRESCRIBED MONETARY LIMIT AND ON THE ISSUE OF MONETARY LIMIT, THE APPEALS ARE COVERE D BY THE ORDER DATED 3.1.2012 OF THE TRIBUNAL IN THE CASE OF ACIT VS. M/S. CHOUDHARY INNOVATIVE BUSINESS P. LTD., PASSED IN IT (SS)A NOS.70 TO 76/IND/2011. THIS FACTUAL ASSERTION OF TH E LEARNED COUNSEL FOR THE ASSESSEE WAS NOT CONTROVERTED BY TH E REVENUE. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON FILE. IN VIEW OF THE ABOVE, W E ARE REPRODUCING HEREUNDER THE RELEVANT PORTION OF THE A FORESAID ORDER DATED 3.1.2012: AGGRIEVED BY THE DIFFERENT ORDERS DATED 26.7.2011 OF THE LD. CIT(A)-I, INDORE, THE REVENUE IS IN APPEAL FOR ASSE SSMENT YEARS 2003-04 TO 2009-10 ON THE GROUNDS AS DETAILED IN TH E GROUNDS OF THE RESPECTIVE APPEAL WHEREAS THE ASSESSEE HAS PREF ERRED CROSS-OBJECTIONS FOR THE SAME ASSESSMENT YEARS. 2. AT THE OUTSET, THE LEARNED COUNSEL FOR THE ASSES SEE SHRI P.D. NAGAR POINTED OUT THAT THE TAX EFFECT IN THE RESPEC TIVE APPEAL, FILED BY THE REVENUE, IS BELOW PRESCRIBED MONETARY LIMIT AND ON THE ISSUE OF MONETARY LIMIT, THE APPEALS ARE COVERED BY THE ORDER OF THE TRIBUNAL IN THE CASE OF NATHULAL JAIN IN ITA NO .475/IND/2010 (A.Y. 2006-07), ORDER DATED 29.6.2011. THIS FACTUAL ASSERTION OF THE LEARNED COUNSEL FOR THE ASSESSEE WAS NOT CONTRO VERTED BY THE REVENUE. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON FILE. IN VIEW OF THE ABOVE, W E ARE REPRODUCING HEREUNDER THE RELEVANT PORTION OF THE A FORESAID ORDER DATED 29.6.2011: AGGRIEVED BY THE ORDER DATED 3 RD MARCH, 2010 OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS), THE REVENUE IS IN APPEAL ON THE GROUND THAT LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS. 7,85,000/- OUT OF TOTA L ADDITION -: 9: - 9 OF RS. 8,85,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED LOAN CREDIT U/S 68 OF THE A CT WHEREAS THE ASSESSEE HAS FILED THE CROSS OBJECTION ON THE GROUND THAT LEARNED COMMISSIONER OF INCOME TAX (APP EALS) WAS NOT JUSTIFIED IN CONFIRMING THE ACTION OF THE A SSESSING OFFICER IN RESPECT OF THE ADDITION OF RS. 1 LAC MAD E U/S 68 OF THE ACT WITHOUT CONSIDERING THE FACTS OF THE CAS E AND SUBMISSIONS MADE BEFORE HIM. 2. DURING HEARING OF THIS APPEAL, THE LD. COUNSEL F OR ASSESSEE CONTENDED THAT THE TAX EFFECT IN THE PRESE NT APPEAL IS BELOW THE PRESCRIBED LIMIT, THEREFORE, TH E APPEAL OF THE REVENUE DESERVES TO BE DISMISSED ON THIS COU NT ITSELF BY FURTHER SUBMITTING THAT THE TAX EFFECT IS RS. 2, 52,450/-, THEREFORE, NO APPEAL CAN BE FILED BEFORE THE TRIBUN AL WHICH IS HAVING THE TAX EFFECT LESS THAN RS. 3 LACS. THIS FACTUAL MATRIX WAS FAIRLY CONSENTED BY THE LEARNED SR. DR B UT SUBMITTED THAT THE CIRCULAR OF CBDT IS EFFECTIVE FR OM A PARTICULAR DATE, THEREFORE, THE SUBMISSION OF THE A SSESSEE IS NOT TENABLE. IN REPLY, THE LD. COUNSEL FOR ASSESSEE CONTENDED THAT IDENTICALLY THE HONBLE JURISDICTION AL HIGH COURT HAS HELD THAT IT IS APPLICABLE TO THE APPEALS WHICH ARE PENDING BEFORE THE TRIBUNAL AND PLACED RELIANCE UPON THE DECISION IN CIT V. ASHOK KUMAR MANIBHAI PATEL & COMPANY (2009) 317 ITR 386 (MP), ITO VS. M/S LAXMI JEWELS PRIVATE LIMITED (ITA NO. 2165/MUM/2010). 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL AVAILABLE ON FILE. UNDISPUTEDLY, THE TAX EFFECT IN THE PRESENT APPEAL IS BELOW THE PRESCRIBED MONET ARY LIMIT IN FILING THE APPEAL BEFORE THE TRIBUNAL. THE REFORE, WE ARE REPRODUCING HEREUNDER THE DECISION OF THE TRIBU NAL IN THE CASE OF RAJAN CLOTH STORES (ITA NO. 365/IND/201 0) ORDER DATED 31.5.2011 :- THIS APPEAL IS BY THE REVENUE AGAINST THE ORDER OF THE LEARNED CIT(A)-I, INDORE, DATED 4.3.2010 ON THE GROUND THAT THE LD. CIT(A) ERRED IN OVERLOOKING THE PROVISION OF SEC. 275(1A) OF I.T. ACT AND DELETING PENALTY U/S 271(1)(C) FOR RS.2,32,780/-. 2. DURING HEARING OF THIS APPEAL, WE HAVE HEARD SHR I PRADEEP KUAMR MITRA, LD. SR. DR FOR THE REVENUE AND SHRI S. S. DESHPANDE, LD. COUNSEL FOR THE ASSESSEE. AT THE OUT SET, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE TAX EFF ECT IN THE PRESENT APPEAL IS BELOW PRESCRIBED MONETARY LIMIT, THEREFORE, STRAIGHT WAY, THE APPEAL OF THE REVENUE MAY BE DISM ISSED. THE LD. SR. DR FAIRLY ADMITTED THAT THE TAX EFFECT IS BELOW PRESCRIBED MONETARY LIMIT. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATER IAL AVAILABLE -: 10: - 10 ON RECORD. BEFORE COMING TO ANY CONCLUSION, ON THE ISSUE OF TAX EFFECT, THE BENCH IN THE CASE OF ACIT VS. M/S. SHRI RAM NUTRIENTS LTD. IN ITA NO.123/IND/2010 (A.Y. 2002-03) VIDE O RDER DATED 28.10.2010 HELD AS UNDER: THIS APPEAL IS BY THE REVENUE AGAINST THE ORDER O F THE LEARNED CIT(A)-UJJAIN, DATED 16.12.2009 ON THE GROUND WHETH ER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) ERR ED IN TREATING THE ASSESSMENT MADE BY THE A.O. AS INFRUCTUOUS, WIT HOUT APPRECIATING THE FACT THAT OTHERWISE ON 6.3.2006 (T HE DATE OF ISSUE OF NOTICE) THE A.O. WAS EMPOWERED TO ISSUE NOTICE U /S 148 FOR THE A.Y. 2002-03, IN VIEW OF THE PROVISIONS OF SECTION 149(1)(A) READ WITH SECTION 151(1) OF THE IT ACT, 1961? 2. DURING HEARING OF THIS APPEAL, WE HAVE HEARD SHR I S.S. DESHPANDE, LD. COUNSEL FOR THE ASSESSEE AND SHRI P. K. MITRA, LEARNED SENIOR DR. THE CRUX OF ARGUMENT IS THAT THE TAX EFFECT IN THE PRESENT APPEAL IS BELOW MONETARY PRESCRIBED LIM IT, THEREFORE, STRAIGHT WAY THE APPEAL OF THE REVENUE MAY BE DISMI SSED. THE LD. SR. DR SHRI P.K. MITRA FAIRLY ADMITTED THAT THE TAX EFFECT IS BELOW PRESCRIBED MONETARY LIMIT. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATER IAL AVAILABLE ON RECORD. IN THE PRESENT APPEAL, THE INCOME ASSESS ED IS RS.1,37,880/- AND THE TAX INVOLVED IS RS.40,611/- O NLY, THEREFORE, WITHOUT GOING INTO MERITS OF THE CASE ON THE PRIMAR Y OBJECTION OF MONETARY LIMIT, THE APPEAL OF THE REVENUE DESERVES TO BE DISMISSED. OUR VIEW IS SUPPORTED BY THE DECISION OF THE TRIBUNAL IN HIMANSHU FLOUR MILLS (ITA NO.506/IND/2009, ORDER DATED 26.5.2010). THE RELEVANT PORTION OF THE SAME IS REP RODUCED HEREUNDER: THIS APPEAL IS BY THE REVENUE AGAINST THE ORDER OF THE LEARNED CIT(A) DATED 26.8.2009 ON THE GROUND THAT THE LEARN ED COMMISSIONER OF INCOME TAX (APPEALS) WAS NOT JUSTIF IED IN DELETING THE ADDITION OF RS. 5,46,831/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE OF DEPRECIATION ON FIXED ASSETS AND ALSO IN DIRECTING THE ASSESSING OFFICER TO ALLOW CARRY FORWARD OF BROUGHT FORWARD LOSSES OF EARLIER YEARS. 2. DURING HEARING OF THIS APPEAL, WE HAVE HEARD THE LEARNED COUNSELS FROM BOTH THE SIDES AND CONSIDERED THE ARG UMENTS ADVANCED BY THEM. AT THE OUTSET, THE LD. COUNSEL F OR THE ASSESSEE RAISED A PRELIMINARY OBJECTION THAT SINCE THE TAX EFFECT IS BELOW THE PRESCRIBED MONETARY LIMIT, THEREFORE, THE DEPARTMENT IS NOT PERMITTED TO FILE THIS APPEAL AND THE SAME DESE RVES TO BE DISMISSED ON THIS SHORT GROUND ITSELF. HOWEVER, THE LEARNED SR. DR FAIRLY AGREED THAT THE TAX EFFECT IS BELOW PRESC RIBED MONETARY LIMIT. -: 11: - 11 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATER IAL AVAILABLE ON RECORD. IN VIEW OF THE ABOVE ASSERTION OF THE LEARNED RESPECTIVE COUNSELS, WE ARE OF THE CONSIDERED OPINI ON THAT THIS APPEAL OF THE REVENUE DESERVES TO BE DISMISSED. OUR VIEW FINDS SUPPORT FROM THE DECISION DATED 2 ND DECEMBER, 2009 OF THE TRIBUNAL IN THE CASE OF HIMANSHU FLOOR MILLS (ITA N O. 507/IND/2009). THE RELEVANT PORTION OF THE SAME IS REPRODUCED HEREUNDER :- THIS APPEAL IS BY THE REVENUE CHALLENGING THE ORD ER OF THE CIT(A) DATED 26.8.2009. DURING HEARING OF THIS APPEAL, I HAVE HEARD SMT. APARNA KARAN, LEARNED SENIOR DR, AND NO-BODY WAS PR ESENT FOR THE ASSESSEE. REGISTERED NOTICE OF HEARING WAS SENT TO THE ASSESSEE ON 11.11.2009. THE ASSESSEE NEITHER PRESENTED ITSELF NOR MOVED ANY APPLICATION FOR ADJOURNMENT, THEREFORE, I HAVE NO O PTION BUT TO PROCEED EX-PARTE QUA THE ASSESSEE AND DISPOSE OF THIS APPEA L ON THE BASIS OF MATERIAL AVAILABLE IN THE FILE. 2. THE FIRST GROUND RAISED IS THAT THE LEARNED FIRS T APPELLATE AUTHORITY ERRED IN DELETING THE ADDITION OF RS.4,26,936/- MAD E ON ACCOUNT OF DISALLOWANCE OF DEPRECIATION ON THE FIXED ASSETS. ON QUESTIONING FROM THE BENCH ABOUT THE TAX EFFECT, IT WAS FAIRLY POINT ED OUT THAT THE TAX EFFECT IS BELOW THE PRESCRIBED MONETARY LIMIT. I HAVE CON SIDERED THE SUBMISSIONS PUT-FORTH BY THE LEARNED SENIOR DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD. 3. BRIEF FACTS ARE THAT THE ASSESSEE CLAIMED DEPREC IATION OF RS. 8,53,871/- ON THE FIXED ASSETS. THE LEARNED ASSESS ING OFFICER BASED UPON THE COMMENTS OF THE AUDITORS IN THE NOTES TO A CCOUNTS AND THE NATURE OF THE BUSINESS, DISALLOWED 50% OF THE DEPRE CIATION CLAIMED BY THE ASSESSEE WHICH WAS WORKED OUT AT RS.4,26,936/-. BEFORE THE LEARNED FIRST APPELLATE AUTHORITY THE SUBMISSION OF THE ASS ESSEE WAS THAT THE FIXED ASSETS WERE DULY REFLECTED IN THE BALANCE SHEET DUR ING THE RELEVANT PERIOD AND THERE WAS NO NEW ADDITION IN THE ASSETS. THE DEPRECIATION ON ALL THE ASSETS WAS REGULARLY ALLOWED SINCE THE DATE OF INCLUSION IN THE BALANCE SHEET. EVEN IN THE IMPUGNED ORDER THERE IS A FACTUAL FINDING THAT THE ASSESSEE FROM THE DATE OF INCLUSION HAS NO T SHOWN IN ADDITION TO THE BLOCK OF ASSETS AS THE WDV AS ON 31.3.2002 WAS TAKEN AS BASIS AFTER REDUCING THE SALE OF SOME ASSETS FOR THE CALCULATIO N OF ALLOWABLE DEPRECIATION FOR THE ASSESSMENT YEAR 2003-04 AND TH E ASSESSEE WAS ALLOWED DEPRECIATION FOR THE ASSESSMENT YEAR 2002-0 3. THE REVENUE HAS NOT ADDUCED ANY EVIDENCE CONTROVERTING THE FACTUAL FINDING MENTIONED IN THE IMPUGNED ORDER, THEREFORE, THE DISALLOWANCE IS DESIRABLE IN THE IMPUGNED APPEAL. EVEN OTHERWISE ON THE TAX EFFECT THIS APPEAL OF THE REVENUE IS LIABLE TO BE DISMISSED. THIS VIEW FINDS SUPPORT FROM THE DECISION OF THE TRIBUNAL IN THE CASE OF R.K. HOTELS (ITA NO.383/IND/09). THE RELEVANT PORTION OF THE ORDER IS REPRODUCED HER EUNDER :- -: 12: - 12 THIS APPEAL IS BY THE REVENUE AGAINST THE ORDER O F LD. CIT- (A)-II, BHOPAL, DATED 31.3.2009 FOR THE AY 2005-06 ON THE GROUND THAT THE LD. FIRST APPELLATE AUTHORITY ERRED IN DELETING THE ADDITION OF 6,37,206/- MADE BY THE AO BY APPLYING T HE PROVISIONS OF SEC. 154(3) ON ACCOUNT OF INCORRECTNESS AND INCO MPLETENESS OF BOOKS OF ACCOUNT.. 2. DURING HEARING OF THE APPEAL, WE HAVE HEARD SMT. APARNA KARAN, LD. SR. DR AND SHRI H.P. VERMA ALONG WITH SH RI ASHISH GOYAL, LD. COUNSEL FOR ASSESSEE. AT THE OUTSET, IT WAS POINTED OUT THAT THERE IS TYPOGRAPHICAL ERROR IN MENTIONING THE FIGURE OF RS.6,37,206/- IN THE GROUND OF APPEAL AS THE CORRE CT FIGURE IS RS.3,94,732/-. THE ASSERTION OF THE ASSESSEE WAS CO NSENTED TO BE CORRECT BY THE LD. SR. DR. FURTHER, IT WAS POINTED OUT THAT THE TAX EFFECT IS ALSO BELOW MONETARY LIMIT, THEREFORE, THE APPEAL OF THE REVENUE MAY BE DISMISSED. THE LD. SR. DR FAIRLY AGR EED TO THE SUBMISSION OF THE ASSESSEE TO THE EXTENT THAT THE T AX EFFECT IS BELOW PRESCRIBED MONETARY LIMIT FOR FILING THE APPE AL BEFORE THE TRIBUNAL. S.NO. AUTHORITY MONETARY LIMIT(IN RS.) 1 ITAT 2,00,000/ - 2 APPEAL UNDER SECTION 260A BEFORE HIGH COURT 4,00,000/ - 3 SUPREME COURT 10,00,000/ - THE BOARD FURTHER CLARIFIED THE TAX EFFECT, WHICH M EANS THE DIFFERENCE BETWEEN THE TAX ON THE TOTAL INCOME ASSE SSED AND THE TAX THAT WOULD HAVE BEEN CHARGEABLE, HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESPECT OF THE ISSUE AGAINST WHICH APPEAL IS INTENDED TO BE FILED. HOW EVER, THE TAX WILL NOT INCLUDE ANY INTEREST THEREON. IN CASES OF PENALTY ORDERS, THE TAX EFFECT WILL MEAN QUANTUM OF PENALTY DELETED OR REDUCED IN THE ORDER TO BE APPEALED AGAINST. IN THE PRESENT APPEAL, THE TOTAL DISPUTED ADDITION IS RS.3,94,732/-, THEREFORE , AS AGREED/CANVASSED BY LD. REPRESENTATIVES FROM BOTH S IDES, THE TAX EFFECT IS BELOW RS.2 LAKHS, THE LIMIT PRESCRIBED FO R FILING APPEAL BEFORE THE TRIBUNAL, THEREFORE, APPEAL OF THE REVEN UE DESERVES TO BE DISMISSED. OUR VIEW FINDS SUPPORT FROM THE DECI SION OF THE CHANDIGARH BENCH OF THE TRIBUNAL IN THE CASES OF SH RI J.S. LUTHRA (ITA NO.712 TO 715/CHD/2009) AND ITO, WARD 2(2), RO PAR VS. THE JHALLIAN KALAN PRI. COOP MILK PRODUCE SOCIETY L TD., JHALLIAN KALAN DISTT. ROPAR (ITA NO.721/CHD/2009). THEREFORE , WITHOUT -: 13: - 13 GOING INTO THE MERITS OF THE CASE, FACTS AND THE JU DICIAL PRONOUNCEMENTS (SUPRA), THIS APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES OF BOTH SIDES ON 6.10.2009. IN THE LIGHT OF THE ABOVE, THIS GROUND OF THE REVEN UE IS HAVING NO MERIT, THEREFORE, THE STAND OF THE LEARNED CIT(A) IS AFFIR MED CONSEQUENTLY, THIS GROUND OF THE REVENUE IS DISMISSED. 4. THE NEXT GROUND RAISED IS THAT THE LEARNED FIRST APPELLATE AUTHORITY ERRED IN DIRECTING THE ASSESSING OFFICER TO ALLOW C ARRY FORWARD OF BROUGHT FORWARD LOSSES OF EARLIER YEARS WITHOUT ANY BASIS. THE CONTENTION RAISED ON BEHALF OF THE REVENUE IS THAT IN COMING TO A PARTICULAR CONCLUSION, NO BASIS HAS BEEN ADDUCED BY THE LEARNED FIRST APPELLATE AUTHORITY AND IT WAS RIGHTLY DISALLOWED B Y THE ASSESSING OFFICER IN THE ABSENCE OF PROOF FURNISHED BY THE AS SESSEE. 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERU SED THE MATERIAL AVAILABLE ON RECORD. THE STAND OF THE REVENUE IS T HAT PROOF OF LAST YEARS LOSSES WAS NOT FURNISHED BY THE ASSESSEE CONSEQUENT LY THESE ARE NOT ALLOWABLE WHEREAS BEFORE THE LEARNED FIRST APPELLAT E AUTHORITY THERE IS A FACTUAL FINDING THAT IN ALL PREVIOUS YEARS RETURNS WERE DULY FILED BY THE ASSESSEE AND THE SAME WERE AVAILABLE ON RECORD OF T HE ASSESSING OFFICER. IN THE IMPUGNED ORDER THE LEARNED FIRST AP PELLATE AUTHORITY HAS DIRECTED THE ASSESSING OFFICER TO ALLOW CARRY FORWA RD OF BROUGHT FORWARD LOSSES OF EARLIER YEARS WHICH WERE NOT SET OFF AFTER VERIFICATION OF RECORDS OF EARLIER YEARS. EVEN OTHERWISE, IT IS A CASE OF ASSESSED LOSS WHICH HAS NOT BEEN SET OFF. CONSEQUENTLY, WE ARE I N AGREEMENT THAT IN VIEW OF THE PROVISIONS OF SECTION 72 IT SHOULD BE A LLOWED. CONSEQUENTLY, THERE IS NO GRIEVANCE TO THE REVENUE SINCE IT HAS B EEN REMANDED BACK TO THE FILE OF THE ASSESSING OFFICER TO DO THE NEEDFUL AFTER VERIFICATION OF RECORDS OF EARLIER YEARS. MY VIEW FINDS SUPPORT FR OM THE RATIO LAID DOWN IN CIT V. J.H. GOTLA; 156 ITR 323 (SC); TARA DEVI BEHL V. CIT; 218 ITR 541 (P&H). THE HONBLE APEX COURT IN THE CASE OF CIT V. MAHALAXMI SUGAR MILLS CO. LTD.; 160 ITR 920 EVEN W ENT TO THE EXTENT THAT ITO MUST ALLOW SET OFF EVEN IF IT IS NOT CLAIM ED BY THE ASSESSEE BECAUSE A DUTY IS CAST UPON THE ITO TO APPLY THE RE LEVANT PROVISIONS OF THE INDIAN INCOMETAX ACT FOR THE PURPOSE OF DETERMI NING THE TRUE FIGURE OF ASSESSEES TAXABLE INCOME AND THE CONSEQUENTIAL TAX LIABILITY. MERELY BECAUSE THE ASSESSEE FAILS TO CLAIM THE BENEFIT OF SET OFF CANNOT RELIEVE THE ITO OF HIS DUTY TO APPLY SECTION 72 IN AN APPRO PRIATE CASE. IN VIEW OF THESE FACTS AND JUDICIAL PRONOUNCEMENTS, I HAVE FOUND NO INFIRMITY IN THE IMPUGNED ORDER, CONSEQUENTLY, THIS GROUND OF TH E REVENUE ALSO FAILS. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN OPEN COURT IN THE PRESENCE OF BOTH THE PARTIES AT THE CONCLUSION OF HEARING ON 1.12.2009. IN THE AFORESAID CASE, THE TRIBUNAL HAS PASSED A DE TAILED ORDER, THEREFORE, WITHOUT GOING INTO THE MERITS OF THE CAS E AND RESPECTFULLY FOLLOWING THE AFORESAID DECISION, THIS APPEAL OF TH E REVENUE IS DISMISSED. -: 14: - 14 ORDER PRONOUNCED IN OPEN COURT IN THE PRESENCE OF LEARNED REPRESENTATIVES OF BOTH THE SIDES AT THE CONCLUSION OF HEARING ON 26 TH MAY, 2010. IN VIEW OF THE ABOVE, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES OF BOTH THE SIDES AT THE CONCLUSION OF THE HEARING ON 28.10.2010. 4. HOWEVER, THE CBDT VIDE INSTRUCTION NO.3/2011 DAT ED 9.2.2011 REVISED/RAISED THE MONETARY LIMIT FOR FILI NG THE APPEAL BY THE DEPARTMENT AS UNDER: S.NO. AUTHORITY MONETARY LIMIT(IN RS.) 1 ITAT 3,00,000/ - 2 APPEAL UNDER SECTION 260A BEFORE HIGH COURT 10,00,000/ - 3 SUPREME COURT 25,00,000/ - THE ABOVE INSTRUCTIONS ARE APPLICABLE TO THE APPEAL S FILED ON OR AFTER 9.2.2011, ISSUED U/S 268A(1) OF THE I.T. ACT, 1961. AS FAR AS THE MERIT OF THE CASE IS CONCERNED, IT HAS ALREADY BEEN EXAMINED BY THE LD. CIT(A) BY KEEPING THE PROVISIONS OF SEC. 275(1)(A) OF THE ACT. SINCE THE APPEAL OF THE ASSESSEE WAS DECID ED BY THE LD. CIT(A) VIDE ORDER DATED 4.11.2004, CONSEQUENTLY, TH E PENALTY PROCEEDINGS WERE SUPPOSED TO BE DISPOSED OF BY 31.3 .2006 WHEREAS THE SAME WAS DECIDED VIDE ORDER DATED 22.4. 2009. IN VIEW OF THIS FACT, THE ORDER WAS RIGHTLY QUASHED, C ONSEQUENTLY, WE FIND NO INFIRMITY IN THE STAND OF THE LD. CIT(A). T HE SAME IS UPHELD. ORDER PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES OF BOTH THE SIDES AT THE CONCLUSION OF THE HEARING ON 31.5.2011. IDENTICALLY THE BENCH IN THE CASE OF VINOD BANSAL, ITA NO. 275/IND/2010 VIDE ORDER DATED 22.6.2011 DISMISSED T HE APPEAL OF THE REVENUE ON THE ISSUE OF TAX EFFECT. T HE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V. ASH OK KUMAR MANIBHAI & COMPANY (2009) 317 ITR 386 HELD AS UNDER :- THIS COURT CAN VERY WELL TAKE JUDICIAL NOTICE OF T HE FACT THAT BY PASSAGE OF TIME MONEY VALUE HAS GONE DOWN, THE COST OF LITIGATION EXPENSES HAS GONE UP, THE ASSESS EE ON THE FILE OF THE DEPARTMENT HAVE BEEN INCREASED CONSEQUE NTLY, THE BURDEN ON THE DEPARTMENT HAS ALSO INCREASED TO A TREMENDOUS EXTENT. THE CORRIDORS OF THE SUPERIOR CO URTS ARE CHOKED WITH HUGE PENDENCY OF CASES. IN THIS VIEW O F THE MATTER, THE BOARD HAS RIGHTLY TAKEN A DECISION NOT TO FILE -: 15: - 15 REFERENCES IF THE TAX EFFECT LESS THAN RS. 2 LAKHS. THE SAME POLICY FOR OLD MATTERS NEEDS TO BE ADOPTED BY THE DEPARTMENT. IN OUR VIEW, THE BOARDS CIRCULAR DATE D MARCH 27, 2000 IS VERY MUCH APPLICABLE EVEN TO THE OLD RE FERENCES WHICH ARE STILL UNDECIDED. THE DEPARTMENT IS NOT J USTIFIED IN PROCEEDING WITH THE OLD REFERENCE WHEREIN THE TAX I MPACT IS MINIMAL. THUS, THERE IS NO JUSTIFICATION TO PROCEED WITH DECADES OLD REFERENCES HAVING NEGLIGIBLE TAX EFFECT . 4. VIDE BOARD INSTRUCTION NO. 5/2008 DATED 15.5.200 8 THE MONETARY LIMIT AND OTHER CONDITIONS FOR FILING THE APPEAL OF THE DEPARTMENT (IN INCOME TAX MATTERS) BE FORE THE APPELLATE TRIBUNAL, HIGH COURT AND SUPREME COUR T WAS SPECIFIED. HOWEVER, IN SUPPRESSION OF THESE INSTRUCTIONS, VIDE INSTRUCTION NO. 3/2011 DATED 9.2 .2011 THE BOARD INCREASED THE MONETARY LIMIT AS DISCUSSED ABOVE (TABLE). THE TRIBUNAL (MUMBAI BENCH) IN THE CASE O F M/S LAXMI J. JEWEL PRIVATE LIMITED (ITA NO. 2165/MUM/20 10) BY FOLLOWING THE DECISION IN THE CASE OF HONBLE BO MBAY HIGH COURT IN CIT V. MADHUKAR K. INAMDAR (HUF) WHER EIN IT WAS HELD THAT THE CIRCULAR WILL BE APPLICABLE TO THE CASES PENDING BEFORE THE COURT EITHER FOR ADMISSION OR FO R FINAL DISPOSAL AND HELD THAT INSTRUCTION NO. 3 DATED 9.2. 2011 IS APPLICABLE FOR THE APPEAL PREFERRED BY THE REVENUE AND DISMISSED THE SAME ON TAX EFFECT BY FURTHER CONSIDE RING THE DECISION IN THE CASE OF LIVING STONES JEWELLERY PRI VATE LIMITED VS. DCIT; 31 SOT 323. RESPECTFULLY FOLLOWIN G THE AFORESAID DECISIONS, WE DISMISS THE APPEAL OF THE R EVENUE ON THE ISSUE OF TAX EFFECT/MONETARY LIMIT. 4. THERE IS UNCONTROVERTED FACT THAT THE TAX EFFECT IN THE AFORESAID APPEALS IS BELOW PRESCRIBED MONETARY LIMI T. THE TRIBUNAL IN THE AFORESAID ORDER HAS ALREADY CONSIDE RED VARIOUS JUDICIAL PRONOUNCEMENTS INCLUDING FROM HONBLE APEX COURT & HIGH COURTS ALONG WITH THE CIRCULARS OF THE CBDT IN CLUDING THE LATEST CIRCULAR NO.3/11 DATED 9.2.2011, AS PER WHIC H, THE MONETARY LIMIT FOR FILING THE APPEAL WAS ENHANCED. IN VIEW OF THESE FACTS, THE APPEALS OF THE REVENUE ARE DISMISS ED BEING NOT MAINTAINABLE. 4. IN VIEW OF THE ABOVE AND THE UNCONTROVERTED POSI TION THAT THE TAX EFFECT IN THE IMPUGNED APPEAL IS RS.2,69,241/- AS PER CALCULATION SUBMITTED BY THE LEARNED COUNSEL FOR TH E ASSESSEE AND NOT CONTROVERTED BY THE REVENUE, THEREFORE, BEI NG THE TAX EFFECT IS BELOW MONETARY PRESCRIBED LIMIT, THE APPE AL OF THE REVENUE DESERVES TO BE DISMISSED BEING NOT MAINTAIN ABLE. FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED. -: 16: - 16 THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES OF BOTH SIDES AT THE CONCLUS ION OF THE HEARING ON 14.2.2013. 9. IN VIEW OF THE ABOVE DISCUSSION, THE APPEALS OF THE REVENUE IN I.T(SS).A.NO. 130/IND/2012 IN THE CASE O F SHRI MANOJ CHAUASIA AND I.T(SS).A.NOS. 137 TO 139/IND/20 12 IN THE CASE OF SHRI MANOHAR CHAURASIA ARE HEREBY DISMI SSED. 10. ON MERITS OF ADDITIONS MADE BY ASSESSING OFFICER, W E FOUND THAT AFTER GIVING YEAR-WISE FINDING IN EACH Y EAR, THE CIT(A) HAD DELETED THE ADDITIONS. PRECISE OBSERVATI ON OF CIT(A) WAS AS UNDER :- IN THE CASE OF MANOJ CHAURASIA - 1.3 THE RIVAL SUBMISSIONS HAVE BEEN CAREFULLY CONSIDERED WITH REFERENCE TO THE FACTS OBTAINING FR OM THE RECORD. IN PROCEEDINGS BEFORE ME, COPIES OF DOCUMENTARY EVIDENCE, IN THE FORM OF CASH BOOK AND DAILY CASH BALANCES FOR THE RELEVANT PERIODS, PRODU CED IN PROCEEDINGS BEFORE THE AO, WERE FILED. ALL THESE DOCUMENTARY EVIDENCES WERE CLAIMED TO HAVE BEEN FILED IN PROCEEDINGS BEFORE THE AO AND IN PROOF THE REOF, COPY OF THE COVERING LETTER, ENCLOSING THEREWITH AL L THESE DOCUMENTS, SUBMITTED BEFORE THE AO WAS FILED, WHICH WAS DULY ACKNOWLEDGED BY THE OFFICE OF THE AO . FOR PROPER ENLIGHTENMENT OF FACTS AND FOR ARRIVING AT RIGHT AND REASONABLE CONCLUSIONS ON THE CRUX OF THE -: 17: - 17 ISSUE, I HAVE MINUTELY GONE THROUGH THE ENTRIES MAD E IN THE CASH BOOK FOR THE RELEVANT PREVIOUS YEARS AN D ALSO THE SUMMARY OF THE DAILY CASH BALANCES, EXTRACTED THERE FROM FOR THE RELEVANT PREVIOUS YEAR S. 1.3(A). FOR THE ASSESSMENT YEAR 2003-04, ANALIZATIO N OF THE ENTRIES FOR THE RELEVANT PERIOD REVEALED THAT D URING THIS PERIOD, THE APPELLANT HAD DEPOSITED RS.2,90,10 0/- BUT AT THE SAME TIME, THERE WERE CASH WITHDRAWALS O F RS.13,03,400/- WHICH ABUNDANTLY PROVES THAT THE APPELLANT HAD SUFFICIENT CASH AVAILABLE WITH HIM FO R EXPLAINING THE IMPUGNED DEPOSITS WITH THE BANK AS AND WHEN REQUIRED. AS PER THE DAILY CASH FLOW BREAKUP FOR THE WHOLE YEAR, THE INWARD CASH FLOW WA S RS.28,93,387/- DURING THIS YEAR AND THE OUTFLOW OF CASH WAS RS. 29,90,393/-. THUS, THERE WAS EXCESS OUTFLOW OF ONLY RS. 97,006/-. RECORD EVIDENCES THE FACT THAT THE APPELLANT IS ASSESSED TO INCOME-TAX FOR TH E LAST MORE THAN SEVENTEEN YEARS AND IT WAS EXPLAINED THAT THE APPELLANT HAD ACCUMULATED CASH BALANCE WHICH WAS AVAILABLE IN REGULAR BUSINESS CASH BOOK. IF ALL THESE FACTS OBTAINING FROM THE RECORD ARE CUMULATIVELY CONSIDERED, THE APPELLANT WAS FOUND WI TH SUFFICIENT CASH BALANCE WHICH WAS UTILIZED FOR MEET ING THE LEGITIMATE BUSINESS REQUIREMENTS. THE DOCUMENTARY EVIDENCES FILED IN PROCEEDINGS BEFORE T HE AO AS ALSO IN PROCEEDINGS BEFORE ME, IN THE FORM OF CASH BOOK AND DAILY CASH BALANCES EXTRACTED THERE FROM, FOR THE RELEVANT PREVIOUS YEAR, CLEARLY DEMONSTRATES THE FACT THAT DURING THE WHOLE YEAR, T HE APPELLANT HAD SUFFICIENT CASH BALANCE AND AT THE YE AR END, THE CASH BALANCE AVAILABLE WAS RS.11,15,594/. 1.4(A). FOR THE ASSESSMENT YEAR 2004-05, AS RIGHTLY SUBMITTED ON BEHALF OF THE APPELLANT, THE CORRECTNE SS OF THE WORKING GIVEN BY THE AO WAS VERIFIED WITH REFERENCE TO THE ENTRIES MADE IN THE RELEVANT -: 18: - 18 DOCUMENTS. ENTRY DATED 26.04.2003 WAS FOR RS.18,000/- AND NOT FOR RE.1/- AS INCORRECTLY MENTIONED BY THE AO. SIMILARLY ENTRY DATED 23.05.2003 WAS FOR RS.14,700/- AND NOT FOR RS.140/-. DIFFERENCE OF THESE TWO MISTAKES COMMITTED BY THE AO, WORKED OUT TO RS.32,559/- (I.E.RS.18,000/- PLUS RS.14,700/- MINUS RE.L/- MINU S RS.140/-) FURTHER, ENTRY DATED 07.07.03 WAS FOR RS.47,000/- AND NOT FOR RS.4,70,000/-. THIS MISTAKE COMMITTED BY THE AO RESULTED IN INCORRECT ADDITION OF RS.4,23,000/-. THE NET RESULT OF THESE MISTAKES COMMITTED BY THE AO, COMES TO RS.3,90,441/- (RS 4,23,000/MINUS RS.32,559/-). --------------------------------------------------- --------------------------------------------------- ---------------------------- CLOSING BALANCE IN BANK ON 26.04.2003 :RS.1,30,52 4/- DEPOSITS ON 23.05.2003 :RS. 18,000/- CLOSING BALANCE :RS.L,12,556/- THIS TALLIES WITH BANK STATEMENT OF THE DAY CLOSING BALANCE IN BANK ON 20.05.2003 :RS.1,43,18 6/- DEPOSITS ON 23.05.2003 :RS. 14,700/- CLOSING BALANCE :RS. L,28,486/- THIS TALLIES WITH BANK STATEMENT OF THE DAY CLOSING BALANCE IN BANK ON 03.07.2003 :RS.1,32,14 4/- DEPOSITS ON 07.07.2003 :RS. 47,000/- CLOSING BALANCE :RS. 85,144/- THIS TALLIES WITH BANK STATEMENT OF THE DAY --------------------------------------------------- --------------------------------------------------- --------------------------------------------------- -------- AS PER THE DAILY CASH FLOW BREAKUP, THE INWARD CASH RECEIPTS WERE RS. 16,19,711/- DURING THE RELEVANT PREVIOUS YEAR AND CASH PAYMENTS WERE -: 19: - 19 RS.20,30,439/-. THUS, THERE WAS EXCESS OUTFLOW OF RS.4,10,728/-. RECORD EVIDENCES THE FACT THAT THE APPELLANT IS ASSESSED TO INCOME-TAX FOR THE LAST MO RE THAN SEVENTEEN YEARS AND IT WAS EXPLAINED THAT THE APPELLANT HAD ACCUMULATED CASH BALANCE WHICH WAS AVAILABLE IN REGULAR BUSINESS CASH BOOK. IF ALL THE SE FACTS OBTAINING FROM THE RECORD ARE CUMULATIVELY CONSIDERED, THE APPELLANT WAS FOUND WITH SUFFICIENT CASH BALANCE WHICH WAS UTILIZED FOR MEETING THE LEGITIMATE BUSINESS REQUIREMENTS. THE DOCUMENTARY EVIDENCES FILED IN PROCEEDINGS BEFORE THE AO AS ALS O IN PROCEEDINGS BEFORE ME, IN THE FORM OF CASH BOOK AND DAILY CASH BALANCES EXTRACTED THERE FROM, FOR THE RELEVANT PREVIOUS YEAR, CLEARLY DEMONSTRATES THE FA CT THAT DURING THE WHOLE YEAR, THE APPELLANT HAD SUFFICIENT CASH BALANCE AND AT THE YEAR END, THE CA SH BALANCE AVAILABLE WAS RS.7,04,866/-. ALL THE ENTRIE S OF DEPOSITS IN BANK, ADDED BY THE AO, FOUND THEIR REFLECTION IN THE REGULAR CASH BOOK AND THIS SUBSTANTIALLY PROVES THAT THE IMPUGNED DEPOSITS WER E MADE OUT OF THE SUFFICIENT CASH BALANCE AVAILABLE W ITH THE APPELLANT, IN NORMAL COURSE OF HIS BUSINESS. 1.5.(A) FOR ASSESSMENT YEAR 2005-06, IT IS SEEN THA T THE IMPUGNED DEPOSITS ADDED BY THE AO, WERE THE ENTRIES FROM DIFFERENT BANK STATEMENTS FOR THE RELE VANT PREVIOUS YEAR. AS PER THE ANALIZATION OF THE CASH B OOK WITH DAILY CASH FLOW BREAKUP, GIVEN BY THE APPELLAN T BEFORE THE AO AND ALSO IN PROCEEDINGS BEFORE ME, REVEALS THAT THE INWARD CASH FLOW WAS RS.27,41,832/ - AND THE OUT FLOW WAS RS.30,66,638/-. THUS, THERE WA S EXCESS OUT FLOW OF RS.3,24,806/-. AFTER TAKING INTO -: 20: - 20 ACCOUNT THE OPENING BALANCE OF RS.7,04,866/-, THE APPELLANT HAD SUFFICIENT CASH AVAILABLE WITH HIM TO MAKE THE DEPOSITS IN THE BANK. RECORD EVIDENCES THE FACT THAT THE APPELLANT IS ASSESSED TO INCOME-TAX F OR THE LAST MORE THAN SEVENTEEN YEARS AND IT WAS EXPLAINED THAT THE APPELLANT HAD ACCUMULATED CASH BALANCE WHICH WAS AVAILABLE IN REGULAR BUSINESS CASH BOOK. IF ALL THESE FACTS OBTAINING FROM THE RECORD ARE CUMULATIVELY CONSIDERED, THE APPELLANT WAS FOUND WI TH SUFFICIENT CASH BALANCE WHICH WAS UTILIZED FOR MEET ING THE LEGITIMATE BUSINESS REQUIREMENTS. THE DOCUMENTA RY EVIDENCES FILED IN PROCEEDINGS BEFORE THE AO AS ALS O IN PROCEEDINGS BEFORE ME, IN THE FORM OF CASH BOOK AND DAILY CASH BALANCES EXTRACTED THERE FROM, FOR THE RELEVANT PREVIOUS YEAR, CLEARLY DEMONSTRATES THE FA CT THAT DURING THE WHOLE YEAR, THE APPELLANT HAD SUFFI CIENT CASH BALANCE AND AT THE YEAR END, THE CASH BALANCE AVAILABLE WAS RS.3,80,060/-. ALL THE ENTRIES OF DEP OSITS IN BANK, ADDED BY THE AO, FOUND THEIR REFLECTION IN THE REGULAR CASH BOOK AND THIS SUBSTANTIALLY PROVES THA T THE IMPUGNED DEPOSITS WERE MADE OUT OF THE SUFFICIE NT CASH BALANCE AVAILABLE WITH THE APPELLANT, IN NORMA L COURSE OF HIS BUSINESS. 1.6.(A) FOR THE AY 2006-07, IT WAS SUBMITTED BY THE APPELLANT, AT ALL STAGES OF PROCEEDINGS, THAT BANK ACCOUNT NO. 901010100016055 WITH BANK OF INDIA, SEHORE, DID NOT BELONG TO THE APPELLANT BUT THE SAME BELONGS TO SMT.MOUNIKA CHOURASIA. NONE OF THE TRANSACTIONS IN THIS ACCOUNT PERTAINED TO THE APPELLANT'S BUSINESS AND THE AO WRONGLY ADDED RS.7,90,700/-, APPEARING AS DEPOSITS IN THIS ACCOUNT WHICH DID NOT BELONG TO -: 21: - 21 THE APPELLANT AT ALL. THEREFORE, THE SUM OF RS.7,90,700/-, WRONGLY ADDED BY THE AO, IS DELETED. 1.6.(B) THE AO ADDED RS.3,12,000/-, BEING DEPOSITS IN ACCOUNT NO. SB/GEN/3656, TREATING THE SAME AS UNEXPLAINED. THIS ACCOUNT WAS ADMITTED TO BE BELONGING TO THE APPELLANT, BUT THE FOLLOWING ENTRIES IN THAT ACCOUNT, CONSIDERED BY THE AO FOR ADDITION, RELATED TO THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 2007-08: DATE DESCRIPTION AMOUNT OF DEPOSIT 20.04.2006 BY CASH RS 50,000/- 27.04.2006 BY CASH RS.1,60,000/- 06.10.2006 BY CASH RS.1,00,000/- 07.10.2006 BY CASH RS. 2,000/- TOTAL RS.3,12,000/- THE AFOREMENTIONED FACT THAT THESE ENTRIES RELATED TO A.Y. 2007-08 IS EVIDENT FROM COPY OF THE BANK STATEMENT AVAILABLE ON RECORD. THEREFORE, THIS SUM OF RS.3,12,000/-, MISTAKENLY ADDED BY THE AO IN AY 2006-07, IS DELETED. 1.6.(C) THUS, OUT OF THE ADDITION OF RS.18,92,467/- MADE BY THE AO, ON ACCOUNT OF CASH DEPOSITS IN THE BANK ACCOUNTS, ADDITION TO THE EXTENT OF RS.11,02,700/-AS MENTIONED ABOVE, STANDS DELETED. ADDITION OF RS.7,89,767/- , IS ONLY REMAINING FOR CONSIDERATION. ANALIZATION OF THE CASH BOOK WITH DA ILY CASH FLOW BREAKUP, GIVEN BY THE APPELLANT BEFORE TH E AO AND ALSO IN PROCEEDINGS BEFORE ME, REVEALED THAT THE INWARD CASH FLOW OF THE APPELLANT DURING THE YE AR WAS RS.32,58,832/- AND THE OUT FLOW OF CASH WAS RS.35,26,755/-. THUS THERE WAS EXCESS OUT FLOW OF RS.2,67,923/-. AFTER TAKING INTO ACCOUNT THE OPENIN G BALANCE OF RS.3,80,060/-, THE APPELLANT HAD SUFFICI ENT -: 22: - 22 CASH AVAILABLE WITH HIM TO MAKE THE IMPUGNED DEPOSITS IN THE BANK. RECORD EVIDENCES THE FACT THA T THE APPELLANT IS ASSESSED TO INCOME-TAX FOR THE LAS T MORE THAN SEVENTEEN YEARS AND IT WAS EXPLAINED THAT THE APPELLANT HAD ACCUMULATED CASH BALANCE WHICH WAS AVAILABLE IN REGULAR BUSINESS CASH BOOK. IF ALL THESE FACTS OBTAINING FROM THE RECORD ARE CUMULATIV ELY CONSIDERED, THE APPELLANT WAS FOUND WITH SUFFICIENT CASH BALANCE WHICH WAS UTILIZED FOR MEETING THE .LEGITIMATE BUSINESS REQUIREMENTS. THE DOCUMENTARY EVIDENCES FILED IN PROCEEDINGS BEFORE THE AO AS ALS O IN PROCEEDINGS BEFORE ME, IN THE FORM OF CASH BOOK AND DAILY CASH BALANCES EXTRACTED THERE FROM, FOR T HE RELEVANT PREVIOUS YEAR, CLEARLY DEMONSTRATES THE FA CT THAT DURING THE WHOLE YEAR, THE APPELLANT HAD SUFFICIENT CASH BALANCE AND AT THE YEAR END, THE CA SH BALANCE AVAILABLE WAS RS.1,12,137/-. ALL THE ENTRIE S OF DEPOSITS IN BANK, ADDED BY THE AO, FOUND THEIR REFLECTION IN THE REGULAR CASH BOOK AND THIS SUBSTANTIALLY PROVES THAT THE IMPUGNED DEPOSITS WER E MADE OUT OF THE SUFFICIENT CASH BALANCE AVAILABLE W ITH THE APPELLANT, IN NORMAL COURSE OF HIS BUSINESS. IN THIS VIEW OF THE MATTER, THE AVAILABILITY OF CASH F OR DEPOSIT IN BANKS, STANDS SATISFACTORILY PROVED. THE AO HAD ADDED THE ENTIRE CASH DEPOSITS IN THE BANK ACCOUNTS, TOTALING TO RS.18,92,467/-, IGNORING THE WITHDRAWALS AND RECEIPTS OF CASH AS PER CASH BOOK. THE WITHDRAWALS AND RECEIPTS OF CASH AS PER CASH BOOK WERE RS.32,58,832/-. THIS AVAILABILITY OF CASH IN THE FORM OF WITHDRAWALS AND RECEIPTS, IN MY CONSIDERED VIEW, WAS SUFFICIENT ENOUGH TO EXPLAIN T HE SOURCE FOR MAKING THE IMPUGNED CASH DEPOSITS IN THE BANKS. FOR THE REASONS AFOREMENTIONED, THE BALANCE OF THE ADDITION OF RS.7,89,767/-, IS ALSO HELD UNSUSTAINABLE. THE SAME IS, THEREFORE, DELETED. 1.7.(A) FOR ASSESSMENT YEAR 2007-08, THE ADDITION MADE BY THE AO WAS RS.21,01,500/- . IT IS SEEN THAT THE IMPUGNED DEPOSITS ADDED BY THE AO, WERE THE -: 23: - 23 ENTRIES FROM DIFFERENT BANK STATEMENTS FOR THE RELEVANT PREVIOUS YEAR. AS ALREADY STATED IN MY FINDINGS FOR THE AY 2006-07 (SUPRA), I HAD ALREADY HELD THAT DEPOSITS TOTALING TO RS.3,12,000/- ADDED BY THE AO IN AY 2006-07, PERTAINED TO THIS YEAR AND HENCE, THE SAME HAS TO BE TAKEN INTO CONSIDERATION FOR THIS YEAR. THUS, DISPUTED DEPOSITS EXPLAINABLE FOR THE YEAR, UNDER CONSIDERATION, TOTALED TO RS.24,13,500/- (RS.21,01,500/- PLUS RS.3,12,000/-). 1.7.(B) IT WAS SUBMITTED BY THE APPELLANT, AT ALL STAGES OF PROCEEDINGS, THAT ACCOUNT NO. 901010100016055 WITH BANK OF INDIA, SEHORE, DID NOT BELONG TO THE APPELLANT BUT THE SAME BELONGS TO SMT.MOUNIKA CHOURASIA. NONE OF THE TRANSACTIONS IN THIS ACCOUNT PERTAINED TO THE APPELLANT'S BUSINESS AND THE AO WRONGLY ADDED RS.8,34,500/-, APPEARING AS DEPOSITS IN THIS ACCOUNT WHICH DID NOT BELONG TO THE APPELLA NT AT ALL. THEREFORE, THE SUM OF RS.8,34,500/-, WRONGL Y ADDED BY THE AO, IS DELETED. 1.7.(C) THE AO ADDED RS.4,85,000/-, BEING DEPOSITS IN ACCOUNT NO. SB/GEN/3656, WITH BANK OF MAHARASTRA, SEHORE, TREATING THE SAME AS UNEXPLAINED. THIS ACCOUNT WAS ADMITTED TO BE BELONGING TO THE APPELLANT, BUT THE FOLLOWING ENTRI ES IN THAT ACCOUNT, CONSIDERED BY THE AO FOR ADDITION, RELATED TO THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 2008-09: DATE DESCRIPTION AMOUNT OF DEPOSIT 26.07.2007 BY CASH RS. 21,000/- 03.09.2007 BY CASH RS. 14,000/- 03.10.2007 BY CASH RS.4 ,50,000/ - TOTAL RS.4,85,000/- -: 24: - 24 TILE AFOREMENTIONED FACT THAT THESE ENTRIES RELATED TO A.Y. 2008-09 AND NOT TO THE A..Y 2007-08, IS EVIDENT FROM COPY OF THE BANK STATEMENT AVAILABLE ON RECORD. THEREFORE, THIS SUM OF RS.4,85,000/-, MISTAKENLY ADDED BY THE AO IN AY 2007-08, IS DELETED. 1.7.(D) THUS, OUT OF THE ADDITION OF THE EXPLAINABLE DEPOSITS OF RS.24,13,500/- REMAINING FOR CONSIDERATION, ON ACCOUNT OF CASH DEPOSITS IN THE BANK ACCOUNTS, ADDITION TO THE EXTENT OF RS.13,19,500/- (RS.8,34,500/- PLUS RS.4,85,000/-), AS MENTIONED ABOVE, STANDS DELETED. ADDITION OF RS.10,94,000/-, IS ONLY REMAINING FOR CONSIDERATION. ANALIZATION OF THE CASH BOOK WITH DAILY CASH FLOW BREAKUP, GIVEN BY THE APPELLANT BEFORE THE AO AND ALSO IN PROCEEDINGS BEFORE ME, REVEALED THAT THE INWARD CASH FLOW OF THE APPELLANT DURING THE YEAR WAS RS.36,81,494/- AND THE OUT FLOW OF CASH WAS RS.33,08,847/. THUS THERE WAS EXCESS INFLOW OF RS.3,72,647/-. AFTER TAKING INTO ACCOUNT THE OPENING BALANCE OF RS.12,137/-, THE APPELLANT HAD SUFFICIENT CASH AVAILABLE WITH HIM TO MAKE THE IMPUGNED DEPOSITS IN THE BANK. RECORD EVIDENCES THE FACT THAT THE APPELLANT IS ASSESSED TO INCOME-TAX FOR THE LAST MORE THAN SEVENTEEN YEARS AND IT WAS EXPLAINED THAT THE APPELLANT HAD ACCUMULATED CASH BALANCE WHICH WAS AVAILABLE IN REGULAR BUSINESS CASH BOOK. IF ALL THESE FACTS OBTAINING FROM THE RECORD ARE CUMULATIVELY CONSIDERED, THE APPELLANT WAS FOUND WITH SUFFICIENT CASH BALANCE WHICH WAS UTILIZED FOR MEETING THE LEGITIMATE BUSINESS REQUIREMENTS. THE DOCUMENTARY EVIDENCES FILED IN PROCEEDINGS BEFORE THE AO AS ALSO IN PROCEEDINGS BEFORE ME, -: 25: - 25 IN THE FORM OF CASH BOOK AND DAILY CASH BALANCES EXTRACTED THERE FROM, FOR THE RELEVANT PREVIOUS YEAR, CLEARLY DEMONSTRATES THE FACT THAT DURING THE WHOLE YEAR, THE APPELLANT HAD SUFFICIENT CASH BALANCE AND AT THE YEAR END, THE CASH BALANCE AVAILABLE WAS RS.4,84,784/-. ALL THE ENTRIES OF DEPOSITS IN BANK, ADDED BY THE AO, FOUND THEIR REFLECTION IN THE REGULAR CASH BOOK AND THIS SUBSTANTIALLY PROVES THAT THE IMPUGNED DEPOSITS WERE MADE OUT OF THE SUFFICIENT CASH BALANCE AVAILABLE WITH THE APPELLANT, IN NORMAL COURSE OF HIS BUSINESS. IN THIS VIEW OF THE MATTER, THE AVAILABILITY OF CASH FOR DEPOSIT IN BANKS, STANDS SATISFACTORILY PROVED. 1.7.(E) THE AO HAD ADDED THE ENTIRE CASH DEPOSITS IN THE BANK ACCOUNTS, TOTALING TO RS.21,01,500/-, IGNORING THE WITHDRAWALS AND RECEIPTS OF CASH AS PER CASH BOOK. THE WITHDRAWALS AND RECEIPTS OF CASH AS PER CASH BOOK WERE RS.36,81,494/-. THIS AVAILABILITY OF CASH IN THE FORM OF WITHDRAWALS AND RECEIPTS, IN MY CONSIDERED VIEW, WAS SUFFICIENT ENOUGH TO EXPLAIN THE SOURCE FOR MAKING THE IMPUGNED CASH DEPOSITS IN THE BANKS. FOR THE REASONS AFOREMENTIONED, THE BALANCE OF THE ADDITION OF RS.10,94,000/-, IS ALSO HELD UNSUSTAINABLE. THE SAME IS, THEREFORE, DELETED. 1.8.(A) FOR THE ASSESSMENT YEAR 2008-09 THE ADDITION MADE BY THE AO WAS RS.63,78,742/. IT IS SEEN THAT THE IMPUGNED DEPOSITS ADDED BY THE AO, WERE THE ENTRIES FROM DIFFERENT BANK STATEMENTS FOR THE RELEVANT PREVIOUS YEAR. AS -: 26: - 26 ALREADY STATED IN MY FINDINGS FOR THE AY 2007- 08 (SUPRA), I HAD ALREADY HELD THAT DEPOSITS TOTALING TO RS.4,85,000/- ADDED BY THE A.O. IN AY 2007-08, PERTAINED TO THIS YEAR AND HENCE, THE SAME HAVE TO BE TAKEN INTO CONSIDERATION FOR THIS YEAR. THUS, DISPUTED DEPOSITS EXPLAINABLE FOR THE YEAR, UNDER CONSIDERATION, TOTALED TO RS.68,63,742/- (RS.63,78,742/- PLUS RS.4,85,000/-). 1.8.(B) IT WAS SUBMITTED BY THE APPELLANT, AT ALL STAGES OF PROCEEDINGS, THAT ACCOUNT NO. 901010100016055 WITH BANK OF INDIA, SEHORE, DID NOT BELONG TO THE APPELLANT BUT THE SAME BELONGS TO SMT.MOUNIKA CHOURASIA. IN PARA NO 7.9 OF THE ASSESSMENT ORDER, UNDER CONSIDERATION, THE AO MENTIONED IN UNAMBIGUOUS TERMS THAT THE DEPOSITS IN THIS BANK ACCOUNT WERE IN THE NAME OF SMT.MOUNIKA CHOURASIA ACCOUNT NO.16055 NEW ACCOUNT NO.901010100016055. NONE OF THE TRANSACTIONS IN THIS ACCOUNT PERTAINED TO THE APPELLANT'S BUSINESS AND THE AO WRONGLY ADDED RS.77,000/-, APPEARING AS DEPOSITS IN THIS ACCOUNT WHICH DID NOT BELONG TO THE APPELLANT AT ALL. THEREFORE, THE SUM OF RS.77,000/-, WRONGLY ADDED BY THE AO, IS DELETED. 1.8.(C) THUS, OUT OF THE ADDITION OF THE EXPLAINABLE DEPOSITS OF RS.68,63,742/-, THE ADDITION REMAINING FOR CONSIDERATION WAS ONLY RS.67,28,742/- (RS.68,63,742/- MINUS -: 27: - 27 RS.77,000/-). 1.8.(D) ANALIZATION OF THE CASH BOOK WITH DAILY CASH FLOW BREAKUP, GIVEN BY THE APPELLANT BEFORE THE AO AND ALSO IN PROCEEDINGS BEFORE ME, REVEALED THAT THE INWARD CASH FLOW OF THE APPELLANT DURING THE YEAR WAS RS. 80,64,070/- AND THE OUTFLOW OF CASH WAS RS. 84,98,869/-. THUS THERE WAS EXCESS OUTFLOW OF RS.4,34,798/-. AFTER TAKING INTO ACCOUNT THE OPENING BALANCE OF RS.4,84,784/-, THE APPELLANT HAD SUFFICIENT CASH AVAILABLE WITH HIM TO MAKE THE IMPUGNED DEPOSITS IN THE BANK. RECORD EVIDENCES THE FACT THAT THE APPELLANT IS ASSESSED TO INCOME-TAX FOR THE LAST MORE THAN SEVENTEEN YEARS AND IT WAS EXPLAINED THAT THE APPELLANT HAD ACCUMULATED CASH BALANCE WHICH WAS AVAILABLE IN REGULAR BUSINESS CASH BOOK. IF ALL THESE FACTS OBTAINING FROM THE RECORD ARE CUMULATIVELY CONSIDERED, THE APPELLANT WAS FOUND WITH SUFFICIENT CASH BALANCE WHICH WAS UTILIZED FOR MEETING THE LEGITIMATE BUSINESS REQUIREMENTS. THE DOCUMENTARY EVIDENCES FILED IN PROCEEDINGS BEFORE THE AO AS ALSO IN PROCEEDINGS BEFORE ME, IN THE FORM OF CASH BOOK AND DAILY CASH BALANCES EXTRACTED THEREFROM, FOR THE RELEVANT PREVIOUS YEAR, CLEARLY DEMONSTRATES THE FACT THAT DURING THE WHOLE YEAR, THE APPELLANT HAD SUFFICIENT CASH BALANCE AND AT THE YEAR END, THE CASH BALANCE AVAILABLE WAS RS.49,985/-. ALL THE ENTRIES OF DEPOSITS IN BANK, ADDED BY -: 28: - 28 THE AO, FOUND THEIR REFLECTION IN THE REGULAR CASH BOOK AND THIS SUBSTANTIALLY PROVES THAT THE IMPUGNED DEPOSITS WERE MADE OUT OF THE SUFFICIENT CASH BALANCE AVAILABLE WITH THE APPELLANT, IN NORMAL COURSE OF HIS BUSINESS. IN THIS VIEW OF THE MATTER, THE AVAILABILITY OF CASH FOR DEPOSIT IN BANKS, STANDS SATISFACTORILY PROVED. 1.8.(E) THE AO HAD ADDED THE ENTIRE CASH DEPOSITS IN THE BANK ACCOUNTS, TOTALING TO RS.65,28,742/- (THE AO HAD TAKEN THIS FIGURE AS RS.63,78,742/-)., IGNORING THE WITHDRAWALS AND RECEIPTS OF CASH AS PER CASH BOOK. THE WITHDRAWALS AND RECEIPTS OF CASH AS PER CASH BOOK WERE RS.80,64,070/-. THIS AVAILABILITY OF CASH IN THE FORM OF WITHDRAWALS AND RECEIPTS, IN MY CONSIDERED VIEW, WAS SUFFICIENT ENOUGH TO EXPLAIN THE SOURCE FOR MAKING THE IMPUGNED CASH DEPOSITS M THE BANKS. FOR THE REASONS AFOREMENTIONED, THE BALANCE OF THE ADDITION OF RS.67,28,742/-, IS ALSO HELD UNSUSTAINABLE. THE SAME IS, THEREFORE, DELETED. 1.9.(A) FOR THE ASSESSMENT YEAR 2009-10 THE ADDITION MADE BY THE AO WAS RS.19,27,900/-. IT WAS SUBMITTED BY THE APPELLANT, AT ALL STAGES OF PROCEEDINGS, THAT ACCOUNT NO. 901010100016055 WITH BANK OF INDIA, SEHORE, DID NOT BELONG TO THE APPELLANT BUT THE SAME BELONGS TO SMT.MOUNIKA CHOURASIA. IN PARA NO 7.9 OF THE ASSESSMENT ORDER, UNDER -: 29: - 29 CONSIDERATION, THE AO MENTIONED IN UNAMBIGUOUS TERMS THAT THE DEPOSITS IN THIS BANK ACCOUNT WERE IN THE NAME OF SMT.MOUNIKA CHOURASIA ACCOUNT NO.16055 NEW ACCOUNT NO.901010100016055. NONE OF THE TRANSACTIONS IN THIS ACCOUNT PERTAINED TO THE APPELLANT'S BUSINESS AND THE AO WRONGLY ADDED RS.1,43,000/-, APPEARING AS DEPOSITS IN THIS ACCOUNT WHICH DID NOT BELONG TO THE APPELLANT AT ALL. THEREFORE, THE SUM OF RS.1,43,000/-, WRONGLY ADDED BY THE AO, IS DELETED. 1.9.(B) THUS, OUT OF THE ADDITION OF THE EXPLAINABLE DEPOSITS OF RS. 19,27,900/-, THE ADDITION REMAINING FOR CONSIDERATION WAS ONLY RS.17,84,900/- (RS.19,27,900/- MINUS RS.L,43,000/-). 1.9.(C) ANALIZATION OF THE CASH BOOK WITH DAILY CASH FLOW BREAKUP, GIVEN BY THE APPELLANT BEFORE THE AO AND ALSO IN PROCEEDINGS BEFORE ME, REVEALED THAT THE INWARD CASH FLOW OF THE APPELLANT DURING THE YEAR WAS RS.37,70,799/- AND THE OUTFLOW OF CASH WAS RS.36,83,644/-. THUS THERE WAS EXCESS INFLOW OF RS.87,155/-. AFTER TAKING INTO ACCOUNT THE OPENING BALANCE OF RS.49,985/-, THE APPELLANT HAD SUFFICIENT CASH AVAILABLE WITH HIM TO MAKE THE IMPUGNED DEPOSITS IN THE BANK. RECORD EVIDENCES THE FACT THAT THE APPELLANT IS ASSESSED TO INCOME-TAX FOR -: 30: - 30 THE LAST MORE THAN SEVENTEEN YEARS AND IT WAS EXPLAINED THAT THE APPELLANT HAD ACCUMULATED CASH BALANCE WHICH WAS AVAILABLE IRREGULAR BUSINESS CASH BOOK. IF ALL THESE FACTS OBTAINING FROM THE RECORD ARE CUMULATIVELY CONSIDERED, THE APPELLANT WAS FOUND WITH SUFFICIENT CASH BALANCE WHICH WAS UTILIZED FOR MEETING THE LEGITIMATE BUSINESS REQUIREMENTS. THE DOCUMENTARY EVIDENCES FILED IN PROCEEDINGS BEFORE THE AO AS ALSO IN PROCEEDINGS BEFORE ME, IN THE FORM OF CASH BOOK AND DAILY CASH BALANCES EXTRACTED THERE FROM, FOR THE RELEVANT PREVIOUS YEAR, CLEARLY DEMONSTRATES THE FACT THAT DURING THE WHOLE YEAR, THE APPELLANT HAD SUFFICIENT CASH BALANCE AND AT THE YEAR END, THE CASH BALANCE AVAILABLE WAS RS.1,37,140/-. ALL THE ENTRIES OF DEPOSITS IN BANK, ADDED BY THE AO, FOUND THEIR REFLECTION IN THE REGULAR CASH BOOK AND THIS SUBSTANTIALLY PROVES THAT THE IMPUGNED DEPOSITS WERE MADE OUT OF THE SUFFICIENT CASH BALANCE AVAILABLE WITH THE APPELLANT, IN NORMAL COURSE OF HIS BUSINESS. IN THIS VIEW OF THE MATTER, THE AVAILABILITY OF CASH FOR DEPOSIT IN BANKS, STANDS SATISFACTORILY PROVED. 1.9.(D) THE AO HAD ADDED THE ENTIRE CASH DEPOSITS IN THE BANK ACCOUNTS, TOTALING TO RS.17,84,900/- (THE AO HAD TAKEN THIS FIGURE AS RS.19,27,900/-)., IGNORING THE WITHDRAWALS AND RECEIPTS OF CASH AS PER CASH BOOK. THE WITHDRAWALS AND RECEIPTS OF CASH AS PER CASH -: 31: - 31 BOOK WERE RS.37,70,799/-. THIS AVAILABILITY OF CASH IN THE FORM OF WITHDRAWALS AND RECEIPTS, IN MY CONSIDERED VIEW, WAS SUFFICIENT ENOUGH TO EXPLAIN THE SOURCE FOR MAKING THE IMPUGNED CASH DEPOSITS IN THE BANKS. FOR THE REASONS AFOREMENTIONED, THE BALANCE OF THE ADDITION OF RS.17,84,900/-, IS ALSO HELD UNSUSTAINABLE. THE SAME IS, THEREFORE, DELETED. 1.10. MY FINDINGS COMMON FOR ALL THE ASSESSMENT YEARS 2003-04 TO 2009-10: AS ALREADY STATED, THE AO HAD NOT CONTROVERTED THE AFOREMENTIONED FINDINGS OF FACTS AND FIGURES, OBTAINING FROM THE AFOREMENTIONED DOCUMENTARY EVIDENCES, ON THE STRENGTH OF REBUTTAL EVIDENCE BROUGHT ON RECORD AGAINST THE APPELLANT. THE AO HAD ALSO NOT OBTAINED AND CONSIDERED THE CONFIRMATIONS SUBMITTED BY VARIOUS CLIENTS, FROM THE RECORDS OF THE INVESTIGATION WING OF THE IT DEPARTMENT, WHO WERE EXPLAINED TO HAVE CONDUCTED ENQUIRIES FROM SOME OF THE CLIENTS, FOR ASCERTAINING THE GENUINENESS OF THE APPELLANT'S CLAIM IN THIS REGARD. IN THE CASE OF SHRI MANOHAR CHAURASIA 1.3. THE RIVAL SUBMISSIONS HAVE BEEN CAREFULLY CONSIDERED WITH REFERENCE TO THE FACTS OBTAINING FROM THE RECORD. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT THE AFOREMENTIONED BANK ACCOUNTS WERE IN THE NAME OF SHRI PIYUSH CHOURASIA AND THERE IS ALSO NO EVIDENCE -: 32: - 32 BROUGHT BY THE SEARCH TEAM OR BY THE AO TO CONCLUSIVELY PROVE THAT THE DEPOSITS IN THE BANK ACCOUNTS OF MR.PIYUSH CHOURASIA, WERE OUT OF THE INCOME EARNED BY THE APPELLANT, DURING THE RELEVANT PREVIOUS YEARS, FROM SOURCES UNDISCLOSED TO THE DEPARTMENT. IT IS UNDISPUTED THAT DURING THE YEAR 2003-04 MR.PIYUSH WAS STUDYING AT SEHORE AND THAT THE SMALL AMOUNTS RECEIVED FROM HIS PARENTS AND OTHER RELATIONS, WERE DEPOSITED BY HIM IN HIS BANK ACCOUNT IN BANK OF MAHARASHTRA. THE DETAILS OF THE DEPOSITS CONSIDERED FOR ADDITION IN THE A. Y 2004-05, REVEALED THAT THE SUMS SO DEPOSITED RANGED FROM RS.150/- TO RS.1,450/- EXCEPT ONE ENTRY FOR RS.5,000/-. IN THE EVENT OF ANY DOUBT OR DISPUTE, THE PARENTS AND OTHER CONCERNED RELATIONS OF MR.PIYUSH CHOURASIA SHOULD HAVE BEEN SUMMONED AND EXAMINED ON OATH FOR ASCERTAINING THE TRUTHFULNESS IN THE STATED FACTS. THIS WAS NOT DONE. RECORD ALSO EVIDENCES THE FACT THAT THE IMPUGNED ADDITIONS WERE MADE WITHOUT MAKING SPECIFIC QUERY AS TO WHY THE SAID DEPOSITS APPEARING IN THE BANK ACCOUNTS OF MR.PIYUSH CHOURASIA SHOULD NOT BE ASSESSED AS UNDISCLOSED INCOME OF THE APPELLANT. NO EVIDENCE WHATSOEVER WAS FOUND/SEIZED DURING SEARCH NOR BROUGHT ON RECORD AFTER SEARCH BY THE AO TO CONCLUSIVELY PROVE THAT THE IMPUGNED DEPOSITS IN THE BANK ACCOUNTS OF SHRI PIYUSH CHOURASIA, WERE MADE BY THE APPELLANT OR RELATED TO THE INCOME EARNED BY THE APPELLANT DURING THE RELEVANT PREVIOUS YEARS FROM SOURCES UNDISCLOSED TO THE DEPARTMENT. IN DR.G.G.DHIR V. ACIT (2010) 129 TTJ (AGRA) (TM), ALMOST SIMILAR ISSUE CAME UP FOR CONSIDERATION BEFORE THE ITAT AGRA BENCH. IN THAT CASE, THERE WAS A SEARCH OPERATION IN THE CASE OF DR.G.G.DHIR. THE DEPOSITS IN THE BANK ACCOUNTS OF THE WIFE AND SON OF DR.DHIR, -: 33: - 33 WERE ASSESSED AS UNDISCLOSED INCOME OF DR.DHIR. IN THE DECISION DELIVERED BY THE THIRD MEMBER OF IT AT AGRA BENCH, IT WAS HELD THAT, IN THE ABSENCE OF ANY MATERIAL EVIDENCE TO CONCLUSIVELY ESTABLISH THAT THE DEPOSITS IN THE BANK ACCOUNTS OPENED BY DR.DHIR'S WIFE AND SON, WERE MADE BY DR.DHIR OR RELATED TO THE INCOME EARNED BY DR.DHIR DURING THE RELEVANT PREVIOUS YEARS, FROM SOURCES UNDISCLOSED TO THE DEPARTMENT, THE SAME COULD NOT BE TREATED AND ASSESSED AS UNDISCLOSED INCOME OF DR.DHIR. RECORD ALSO EVIDENCES THE FACT THAT AS AND WHEN SHRI PIYUSH CHOURASIA WAS CONFRONTED TO EXPLAIN THE DEPOSITS, APPEARING IN HIS AFOREMENTIONED BANK ACCOUNTS, HE HAD DEPOSED AND EXPLAINED IN CATEGORICAL TERMS THAT THE SAME REPRESENTED THE SUMS RECEIVED FROM HIS FATHER AND OTHER RELATIONS; THAT AFTER COMPLETION OF HIS STUDIES, HE JOINED ON SALARY BASIS TO WORK WITH MANOJ CHOURASIA, LIC AGENT AND USED TO DEPOSIT THE PREMIUM SUMS COLLECTED FROM CLIENTS AND AS AND WHEN NEEDED, HE USED TO WITHDRAW THE SAME FOR REMITTING TO LIC THROUGH MANOJ CHOURASIA. THESE DEPOSITIONS OF SHRI PIYUSH CHAURASIA WERE NOT PROVED BY THE AO AS FALSE. 1.4. FROM THE PREVIOUS YEAR RELEVANT TO THE A Y 2005-06, SHRI PIYUSH CHOURASIA STARTED WORKING WITH SHRI MANOJ CHOURASIA ON SALARIED BASIS. WHILE EXPLAINING THE ENTRIES IN THE AFOREMENTIONED BANK ACCOUNTS FOR THE A Y 2005-06, EXCEPT ENTRY FOR RS.600/- DATED 20.08.2005, IT WAS EXPLAINED THAT THE REMAINING SUMS WERE COLLECTED BY MR.PIYUSH FROM SMT.KIRAN SONI WHO HAD POLICY NO. 351507938 PREMIUM OF WHICH WAS RS.73,727/- PER ANNUM; THAT SMT.KIRAN SONI -: 34: - 34 USED TO GIVE REGULAR CASH TO MR.PIYUSH ALMOST ON DAILY BASIS I.E., SHE WAS GIVING RS.575/- EVERY DAY AND THE AMOUNT SO COLLECTED WAS BEING RECORDED IN A DIARY ALSO WHICH SMT.KIRAN SONI USED TO SIGN EVERY TIME. IT WAS EXPLAINED THAT SHRI PIYUSH USED TO DEPOSIT THESE AMOUNTS IN HIS BANK ACCOUNT, FOR ONWARD PAYMENT OF PREMIUM TO LIC. COPY OF SUBMISSIONS MADE IN PROCEEDINGS BEFORE THE AG, FILED IN PROCEEDINGS BEFORE ME, EVIDENCES THE FACT THAT THE AFOREMENTIONED FACTS WERE SUBMITTED BEFORE THE AO. THE DETAILS RECEIVED FROM THE LIC AND SUBMITTED BEFORE THE AO IN ASSESSMENT PROCEEDINGS ALSO DEMONSTRATES THE CORRECTNESS OF THE STATED FACTS. THE REASON/JUSTIFICATION FOR IGNORING THESE FACTS, WAS NOT EVIDENT FROM THE IMPUGNED ASSESSMENT' ORDERS, UNDER CONSIDERATION. DURING THE PREVIOUS YEAR RELEVANT TO A.Y. 2005-06, IT WAS EXPLAINED THAT MR.PIYUSH WAS STUDYING FIRST YEAR OF GRADUATION AT SEHORE AND HE WAS ALSO WORKING FOR MANOJ CHOURASIA ON SALARY BASIS. FOR THE A Y 2005-06 ONLY RS.600/- WERE DEPOSITED BY HIM IN STATE BANK OF INDIA AND REST OF THE EXPENSES WERE MET FROM THE SALARY RECEIVED BY HIM FROM SHRI MANOJ CHOURASIA. 1.5. FOR THE AY 2006-07, IN PROCEEDINGS BEFORE THE AO, IT WAS EXPLAINED THAT RS.2,00,000/- WAS RECEIVED ON 08.08.2005 FROM SMT.VINITA MEHROTRA FOR DEPOSITING LIC PREMIUM AGAINST HER POLICY NO. 352320334, 35, 36 AND 27 AND THAT THE SAID SUM WAS DEPOSITED ON THE SAME DAY. SIMILARLY RS.4,92,000/- WAS EXPLAINED TO HAVE BEEN RECEIVED FROM SHRI KAILASH AGRAWAL FOR DEPOSITING LIC PREMIUM AGAINST POLICY NO. 352368403 AND THE SAME WAS DEPOSITED ON THE NEXT DAY. REGARDING THE REMAINING ENTRIES FOR RS.1,90,190/-, IT WAS EXPLAINED THAT THEY -: 35: - 35 WERE COLLECTED BY MR.PIYUSH FROM SMT.KIRAN SONI WHO HAD POLICY NOS. 351507938, 352163682, 351508090 AND 352163383 PREMIUM OF WHICH WAS RS.2,10,066/- PER ANNUM AND AS ALREADY STATED, THE PETTY AMOUNT OF RS.575/- RECEIVED EVERY DAY FROM HER WAS KEPT IN THE BANK ACCOUNT OF MR.PIYUSH FOR ONWARD PAYMENT OF PREMIUM TO LIC. THE DETAILS RECEIVED FROM LIC AND SUBMITTED IN ASSESSMENT PROCEEDINGS BEFORE THE AO, FORTIFYING THE CORRECTNESS OF THE STATED FACTS, WERE NOT DISPROVED BY THE AO, BY BRINGING REBUTTAL EVIDENCE. IN THE EVENT OF ANY DOUBT OR DISPUTE, BEFORE HOLDING ANY ADVERSITY AGAINST THE APPELLANT IN THIS REGARD, IT WAS INCUMBENT UPON THE AO TO HAVE VERIFIED THE VERIFIABLE FACTS FROM THE CONCERNED AUTHORITIES OF LIC OF INDIA AND ALSO FROM THE CONCERNED CUSTOMERS WHOSE DETAILS WERE FILED BEFORE THE AO. THIS NEEDED VERIFICATION WAS NOT CARRIED OUT BY THE AO NOR ANY JUSTIFICATION FOR NOT CARRYING OUT THE NEEDED INVESTIGATION, WAS ASSIGNED BY THE AO IN THE IMPUGNED ORDERS, UNDER CONSIDERATION. 1.6. FOR THE AY 2007-08, IT WAS EXPLAINED THAT MR.PIYUSH, BESIDES STUDYING HIS THIRD YEAR GRADUATION AT SEHORE, WAS WORKING AS AN EMPLOYEE OF MANOJ CHOURASIA, USED TO COLLECT PREMIUM FROM CLIENTS, FOR BEING DEPOSITED WITH LIC. THE SUMS RECEIVED FROM CLIENTS AND APPEARING IN THE AFOREMENTIONED BANK ACCOUNTS OF MR.PIYUSH CHOURASIA AND THEIR ONWARD TRANSMISSION TO LIC, EXPLAINED BEFORE THE AO, ARE TABULATED BELOW: DATE OF RECEIPT AMOUNT NAME OF POLICY HOLDER POLICY NO. DATE OF DEPOSIT WITH 16.10.2006 RS.1,00,000/- SHRI SUNDARI MAGHANI 352669845 24.10.2006 25.10.2006 RS.1,08,625/ - SHRI KARUNA 352669543 28.10.2006 -: 36: - 36 ACHARYA 06.11.2006 RS.1,00,000/- SHRI P.R.K.NAIR 352670476 07.11.2006 11.12.2006 RS.5,00,000/- SHRI NEERAJ, M.K CHOURASIA, SHEWTA JAIN 352671623, 352672706, 701, 703, 352672828 13.12.2006 10.01.2007 RS.4,25,000/- SHRI SAMARTH AGRAWAL 352674436, 37, 38, 39, 40 & 41 11.10.2007 17.02.2007 RS.60,000/- MANISH MANJUSHA, PRAFUL 352678773, 788, 789 28.02.2007 28.02.2007 RS.1,08,000/- MUKESH KAKKAR 351822346 01.03.2007 03.03.2007 RS.97,000/- JYOTI SINGH PARIHAR 352677992 06.03.2007 13.03.2007 RS.2,00,000/- PRENA, RISHABH TIWARI 352684950, 352684941, 352665020, 353581088 13.03.2007 TOTAL RS.16,98,625/ - FROM THE ABOVE, IT IS MOST EVIDENT THAT NO SUM WAS DEPOSITED BY THE APPELLANT AND EVERY AMOUNT COLLECTED AND PAID FOR AND ON BEHALF OF THE CLIENTS WAS AGAINST THEIR LIC POLICIES OR IN MUTUAL FUND. SINCE ALL THE ENTRIES IN THE AFOREMENTIONED BANK ACCOUNTS HAVING BEEN SATISFACTORILY EXPLAINED, NO SUM REMAINED UNEXPLAINED AND HENCE, THE IMPUGNED ADDITION MADE BY THE AO, WAS UNSUBSTANTIATED ON THE STRENGTH OF COGENT EVIDENCE. 1.7. FOR THE AY 2008-09 MR.PIYUSH WAS IN FOURTH YEAR OF HIS GRADUATION AT SEHORE AND HE WAS ALSO WORKING WITH LIC AGENT MANOJ CHOURASIA. HE USED TO COLLECT PREMIUM FROM CLIENTS, FOR BEING DEPOSITED WITH LIC. THE SUMS RECEIVED FROM CLIENTS AND APPEARING IN THE AFOREMENTIONED BANK ACCOUNTS OF MR.PIYUSH CHOURASIA AND THEIR ONWARD TRANSMISSION TO LIC, EXPLAINED BEFORE THE AO, ARE TABULATED BELOW: -: 37: - 37 DATE OF RECEIPT AMOUNT NAME OF POLICY HOLDER POLICY NO. DATE OF DEPOSIT WITH 16.04.2007 RS.95,000/- SAMEER VYAS 352169326 17.04. 2007 23.05.2007 RS.3,00,000/- POONAM TOMAR 352179063 25. 05.2007 18.06.2007 RS.1,03,900/- SAHAJ SINGHAL 353589753 19 .06.2007 19.06.2007 RS.2,00,000/- SUSHMA TOMAR 351830991, 353588607 21.06.2007 09.07.2007 RS.1,00,000/- SUSHMA TOMAR 353588606 11. 07.2007 16.08.2007 RS.1,00,000/- SHEWTA JAIN 353606050 23.08 .2007 22.08.2007 RS.1,00,000/- SHEWTA JAIN 352672828 23.08 .2007 25.08.2007 RS.2,32,600/- SUSHMA TOMAR 353591187 29. 09.2007 03.09.2007 RS.1,00,000/- KARUNA ARCHARYA 352669543 05.09.2007 31.08.2007 RS.2,00,000/- R.R. GANGAREKARSAMEER VYAS RELIANCE M.F. 01.09.2007 17.01.2008 RS.55,200/- MAHENDRA K MAHINDRA 353604132 17.01.2008 TOTAL RS.15,86,700/- FROM THE ABOVE, IT IS MOST EVIDENT THAT NO SUM WAS DEPOSITED BY THE APPELLANT AND EVERY AMOUNT COLLECTED AND PAID FOR AND ON BEHALF OF THE CLIENTS WAS AGAINST THEIR LIC POLICIES OR IN MUTUAL FUND. 1.8. DETAILS OF THE REMAINING SUMS, TOTALING TO RS. 75,100/- , SUBMITTED BEFORE THE AO, WERE AS UNDER: DATE AMOUNT PARTICULARS 03.06.2007 RS.700/- SELF 19.02.2007 RS.2,400/- SELF 01.03.2007 RS.1,100/- SELF 12.04.2007 RS.5,400/- SELF 18.04.2007 RS.5,000/- SELF 11.05.2007 RS.7,000/- SELF 11.07.2007 RS.9,500/- SELF 06.09.2007 RS.22,000/- COLLEGE FEE 20.09.2007 RS.22,000/- COLLEGE FEE TOTAL RS.75,000/- THE FACT THAT MR.PIYUSH CHOURASIA RECEIVED -: 38: - 38 COLLEGE FEE FROM HIS FATHER, WAS NOT DISPROVED BY THE AO BY BRINGING CONTRARY EVIDENCE ON RECORD. THE RETURN FILED BY MR.PIYUSH FOR THE A Y. 2008-09 SHOWED THAT HE RECEIVED SALARY OF RS.1,22,000/- FROM MR.MANOJ CHOURASIA AND THIS FACT DISCLOSED IN HIS RETURN, WAS NOT PROVED BY THE AO AS FALSE. RECORD ALSO EVIDENCES THE FACT THAT AT ALL STAGES OF PROCEEDINGS, MR.PIYUSH ATTENDED BEFORE THE AO AND EXPLAINED ALL THE AFOREMENTIONED ENTRIES IN HIS BANK ACCOUNTS. THE AO HAD NOT DISPUTED THE FACTS EXPLAINED BY MR.PIYUSH. SINCE ALL THE ENTRIES IN THE AFOREMENTIONED BANK ACCOUNTS HAVING BEEN SATISFACTORILY EXPLAINED, NO SUM REMAINED UNEXPLAINED AND HENCE, THE IMPUGNED ADDITION MADE BY THE AO, WAS UNSUBSTANTIATED ON THE STRENGTH OF COGENT EVIDENCE. 1.9. FOR THE A Y 2009-10, THE EXPLANATION SUBMITTED BY THE APPELLANT, EVIDENCES THE FACT THAT THE FOLLOWING DEPOSITS REPRESENTED THE PREMIUMS RECEIVED FROM THE CLIENTS WHICH WERE DEPOSITED AGAINST THEIR RESPECTIVE POLICIES: DATE OF RECEIPT AMOUNT NAME OF POLICY HOLDER POLICY NO. DATE OF DEPOSIT WITH 15.01.2008 RS.7,00,000/- SHOBHA SHARMA, GOPAL SONI, VIVEK SHRIVASTAVA, REKHA SHARMA, VIKAS SHARMA, RANI RAJPAL, SHAILENDRA VISHWAKARMA RELIANCE MUTUAL FUND 15.01.2008 15.01.2008 RS.7,00,000/- SAROJ TIWARI, POOJA TIWARI , PRAVEEN TIWARI, MAHENDRA TIWARI, VIJAY TIWARI, SHIVANSHU SHARMA, SHAILESH GUPTA RELIANCE MUTUAL FUND 15.01.2008 16.01.2008 RS.5,00,000/- SUDESH RAI, RAJ KUMAR, JAISWAL, AKHILESH SUMIT ARORA, NIRMALA KUMARE. RELIANCE MUTUAL FUND 16.01.2008 21.01.2008 RS.1,60,000/- VAISHALI SINGH CHANDEL 353 595157 21.01.2008 30.01.2008 RS.1,50,000/- RATAN JAIN 353592243 30.01 .2008 10.03.2008 RS.1,25,000/- MANISH, MANJUSHA, PRAFUL THAKUR, DR. SISODIA 352678788, 789, 406, 773 13.03.2008 14.03.2008 RS.63,000/ - SHASHI BHUSHAN TOMAR 352678778 15.03.2008 15.03.2008 RS.1,00,000/- PRENNA TIWARI 352684950 17 .03.2008 -: 39: - 39 11.07.2008 RS.4,97,400/- R.R.GANGAREKAR RELIANCE MUTUAL FUND 11.07.2008 29.09.2008 RS.1,00,000/- ARYAMANN GARG 353604634 01 .10.2008 10.10.2008 RS.49,000/- RADHE SHYAM SISODIA 35358512 5 10.10.2008 02.01.2009 RS.1,70,000/- ANAND SHARMA 253920675, 677, 350088807, 250083354 03.01.2009 16.01.2009 RS.1,65,000/- A.N.TIWARI 353921209, 218, 1006 17.01.2009 17.01.2009 RS.50,000/- A.N.TIWARI 353921209, 218, 1006 17.01.2009 20.01.2009 RS.1,00,000/ - MAHESH BHATKARIA 353921197 21.01.2009 TOTAL RS.36,29,400/- FROM THE ABOVE, IT IS MOST EVIDENT THAT NO SUM WAS DEPOSITED BY THE APPELLANT AND EVERY AMOUNT COLLECTED AND PAID F OR AND ON BEHALF OF THE CLIENTS WAS AGAINST THEIR LIC POLICIE S OR IN MUTUAL FUND. 1.10. THE REMAINING DEPOSITS, TOTALING TO RS.L,17,8 00/-, DETAILED BELOW, WERE EXPLAINED TO HAVE BEEN MET FROM THE SAL ARY INCOME OF RS.1,44,000/- RETURNED BY THE APPELLANT FOR THE A Y 2009-10. DATE AMOUNT PARTICULARS 19.05.2008 RS. 3,000/ - SELF 31.05.2008 RS. 3,800/ - SELF 12.06.2008 RS. 3,000/ - SELF 07.07.2008 RS. 2,000/ - SELF 26.08.2008 RS. 20,000/ - SELF 10.10.2008 RS. 1,500/ - SELF 27.10.2008 RS. 4,500/ - SELF 04.11.2008 RS . 1,000/ - SELF 05.11.2008 RS. 19,000/ - SELF 11.11.2008 RS.10,000/ - SELF 21.11.2008 RS. 30,000/ - SELF 20.09.2008 RS. 20,000/ - SELF TOTAL RS.1,17,800/ - THE RETURN FILED BY MR.PIYUSH FOR THE A Y. 2009- 10 DISCLOSING SALARY INCOME OF RS.1,44,000/-, WAS NOT DISPROVED BY THE AO. RECORD ALSO -: 40: - 40 EVIDENCES THE FACT THAT AT ALL STAGES OF PROCEEDINGS. MR.PIYUSH ATTENDED BEFORE THE AO AND EXPLAINED ALL THE AFOREMENTIONED ENTRIES IN HIS BANK ACCOUNTS. THE AO HAD NOT DISPUTED THE FACTS EXPLAINED BY MR.PIYUSH. SINCE ALL THE ENTRIES IN THE AFOREMENTIONED BANK ACCOUNTS HAVING BEEN SATISFACTORILY EXPLAINED, NO SUM REMAINED UNEXPLAINED AND HENCE, THE IMPUGNED ADDITION MADE BY THE AO, WAS UNSUBSTANTIATED ON THE STRENGTH OF COGENT EVIDENCE BROUGHT ON RECORD. 1.11. AS ALREADY STATED TIME AND AGAIN, THE AFOREMENTIONED DEPOSITS WERE IN THE BANK ACCOUNTS OF MR. PIYUSH CHOURASIA. THE AO HAD NOT BROUGHT ANY EVIDENCE ON RECORD TO CONCLUSIVELY PROVE THAT THE BANK ACCOUNTS IN THE NAME OF MR.PIYUSH CHOURASIA WERE IN FACT THE UNDISCLOSED BANK ACCOUNTS OF THE APPELLANT. SINCE THE AFOREMENTIONED BANK ACCOUNTS WERE NOT PROVED TO BE THE BOOKS OF ACCOUNT OF THE APPELLANT, PROVISIONS OF SECTION 68 OF THE ACT HAD NO APPLICATION AT ALL FOR TREATING THE DEPOSITS IN THE BANK ACCOUNTS OF OTHERS, AS UNEXPLAINED CREDITS ASSESSABLE IN THE HANDS OF THE APPELLANT. THE DEEMING PROVISIONS OF SECTIONS 69 TO 69B WERE ALSO NOT APPLICABLE SINCE THE IMPUGNED DEPOSITS IN THE AFOREMENTIONED BANK ACCOUNTS OF MR.PIYUSH, WERE NOT PROVED TO HAVE BEEN FLOWN FROM THE UNRECORDED INCOME EARNED BY THE APPELLANT DURING THE RELEVANT PREVIOUS YEARS FROM SOURCES UNDISCLOSED TO THE DEPARTMENT. FOR INVOKING THE DEEMING PROVISIONS OF SECTIONS 69 TO 69B, THERE MUST BE INVESTMENT WHICH WAS PROVED TO HAVE NOT BEEN RECORDED IN THE BOOKS OF THE APPELLANT. SINCE THE IMPUGNED BANK ACCOUNTS OF SHRI PIYUSH -: 41: - 41 CHOURASIA WERE NOT ESTABLISHED TO HAVE BEEN THE BOOKS OF ACCOUNT OF THE APPELLANT, THE IMPUGNED DEPOSITS COULD NOT BE PRESUMED AS THE UNRECORDED INVESTMENT MADE BY THE APPELLANT AND UNLESS THAT IS PROVED, BEYOND ALL SHADOWS OF DOUBT, THE DEEMING PROVISIONS OF SECTIONS 69 TO 69B, IN MY CONSIDERED VIEW, HAD NO APPLICATION AT ALL. 1.12. REFERRING TO THE PROVISIONS OF S. 69 TO 69B OF THE ACT DEALING WITH UNEXPLAINED INVESTMENT, BEFORE ARRIVING AT THE CONCLUSION OF DEEMED INCOME, THE AO HAS TO GIVE A FINDING THAT THE SAME CONSTITUTES INCOME/DEEMED INCOME OF THE ASSESSEE AND IT HAS TO BE EXAMINED AS TO WHETHER THE FINDING OF AO IS SUBSTANTIATED BY EVIDENCE AND WHETHER THE EXPLANATION FURNISHED BY THE ASSESSEE IS SATISFACTORY OR NOT. RELIANCE IS PLACED ON THE DECISION IN NEETA SYAL VS. ASSTT. CIT ( 1999 ) 70 ITD 62 (CHD) WHEREIN THE TRIBUNAL NOTED AT PAGE NO. 69-70, THE DECISIONS IN CIT VS. BAI VINA ( 1965 ) 58 ITR 100 ( GUJ), CIT VS. RAMPUR TIMBER & TURNERY CO. LTD. ( 1973 ) 89 ITR 150 (ALL), CIT VS. DEEPAK TEXTILE INDUSTRIES LTD. ( 1987) 168 ITR 773 (GUJ), CIT VS. S. TEJA SINGH (1959) 35 ITR 408 (SQ, CIT VS. CHHOTE LAL KANHAIYALAL ( 1971) 80 ITR 656 (MP ) ON THE SCOPE OF THE PROVISION OF SECTIONS 69, 69A AND 69B. IN VIEW OF THE ABOVE DECISIONS, CORROBORATIVE EVIDENCE WAS NECESSARY TO CONCLUDE THAT THERE WAS UNEXPLAINED INVESTMENT AND IT CONSTITUTED DEEMED INCOME OF THE ASSESSEE. THERE WAS NOT A SINGLE IOTA OF EVIDENCE FOUND DURING SEARCH TO PROVE THAT THE ASSESSEE HAD IN FACT MADE THE IMPUGNED DEPOSITS FROM ITS UNDISCLOSED INCOME EARNED DURING THE RELEVANT PREVIOUS YEAR. -: 42: - 42 1.13. DEEMING PROVISIONS, OF SECTIONS 68 TO 69C, HAVE TO BE STRICTLY CONSTRUED AND THE ONUS TO SHOW THAT THE NECESSARY AND REQUISITE CONDITIONS FOR THE APPLICATION OF THESE SECTIONS, SO THAT THE SAME ARE ATTRACTED IN THE FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE, STAND MET, WAS ON THE AO, WHO SOUGHT TO APPLY/INVOKE THE SAME. NO DOUBT, THE PARTICULAR FACTS ARE ONLY IN THE INTIMATE KNOWLEDGE OF THE ASSESSEE, WHO, ACCORDING TO THE AO, FOR THE REASONS BEST KNOWN TO HIM, ARE PERHAPS EVEN FOR APPARENT REASONS, CHOOSES NOT TO DIVULGE THE SAME. HOWEVER, THAT BY ITSELF WOULD NEITHER SATISFY THE MANDATE OF THE SECTION NOR ENTITLE THE AO TO PRESUME OR CONSIDER THE REQUIRED CONDITIONS AS HAVING BEEN SATISFIED OR PROVED. IN OTHER WORDS, THE SAME, THOUGH NOT DISPROVED, WERE, YET, NOT PROVED, I.E., REMAINED UNPROVED, SO THAT THE DEEMING PROVISIONS COULD NOT BE INVOKED. IT WAS INCUMBENT ON THE AO, IN CASE SHE WANTED TO, UNDER THE CIRCUMSTANCES, APPLY THE DEEMING PROVISIONS, BROUGHT ON RECORD MATERIAL EVIDENCE WHICH COULD BE SAID TO LEAD TO THE SATISFACTION OF THE AO AS WELL, MAKING REQUISITE INVESTIGATION OR ADOPT SUCH OTHER MEANS PERMISSIBLE IN LAW AT HER COMMAND. THE AO, THUS, HAVING NOT DISCHARGED THE ONUS FOR PROVING THE SATISFACTION OF THE PRECEDENT CONDITIONS FOR APPLICATION OF THE DEEMING SECTIONS, HER CONCLUSIONS IN THE CASE OF THE APPELLANT, UNDER CONSIDERATION, IN MY CONSIDERED VIEW, COULD NOT MERIT JUDICIAL APPROVAL [SAI CONSTRUCTION V. ITO (2010) 127 TTJ (CTK.) (UO) 15]. 1.14. SUPREME COURT IN CIT VS. SMT. P.K. NOORJAHAN (1999) 237 ITR 570 (SQ, HELD THAT -: 43: - 43 THE LANGUAGE USED IN THE DEEMING PROVISIONS OF SECTIONS 68 TO 69C, IS 'MAY' AND NOT 'SHALL' AND HENCE SIGNIFICANT AMOUNT OF DISCRETION HAS BEEN VESTED WITH THE A.O. WHICH HAS TO BE JUDICIOUSLY EXERCISED. IN THE CASE OF THE ASSESSEE, UNDER CONSIDERATION, THE ASSESSEE URGES THAT THE PRINCIPLES LAID DOWN BY THE SUPREME COURT IN THE ABOVE DECISION WERE NOT FOLLOWED SINCE THE ENTIRE DEPOSITS APPEARING IN THE BANK ACCOUNTS OF MR.PIYUSH CHOURASIA, WERE PRESUMED AND ASSESSED BY THE AO AS UNEXPLAINED CREDITS IN THE HANDS OF THE APPELLANT, THAT TOO, WITHOUT BRINGING ANY CORROBORATIVE EVIDENCE ON RECORD TO SUBSTANTIATE SUCH PRESUMPTIONS AND SUSPICIONS. 1.15. THE ASSESSEE RELIES ON THE DECISION IN ROSHAN DI RATTI VS. CIT(1977) 107 ITR 938 (SC) FOR THE PROPOSITION THAT POSSIBILITY OF EARNING THE ALLEGED INCOME, WHICH IS DEEMED AS INCOME OF THE ASSESSEE BY AO HAS TO BE SEEN. THE INCOME DEEMED BY AO MUST BE REPRESENTED BY MOVABLE/IMMOVABLE ASSETS IN THE FORM OF LIQUIDITY WITH REFERENCE TO UTILIZATION OF THE ALLEGED INCOME. SOME DISPROPORTIONATE ASSET, EITHER IN KIND OR IN COIN, SHOULD BE FOUND BY AO BEFORE CONCLUDING THAT THE ASSESSEE HAS DEEMED INCOME OF SO MUCH PROPORTION. 1.16. THE ONUS IS ON THE REVENUE TO PROVE ON THE STRENGTH OF EVIDENCE THAT THE APPELLANT HAD MADE THE IMPUGNED DEPOSITS FROM HIS UNDISCLOSED INCOME KEPT OUTSIDE THE BOOKS OF ACCOUNT WHICH IS CARDINAL PRINCIPLE OF JURISPRUDENCE. IN MIRAH EXPORTS (P) LTD. VS. COLLECTOR OF CUSTOMS (1998) 3 SCC 292 (SC) IT WAS OBSERVED THAT: 'THE BURDEN OF PROVING A CHARGE LIES UPON THE REVENUE AND THE REVENUE -: 44: - 44 HAS TO PRODUCE NECESSARY EVIDENCE TO PROVE THE SAID CHARGE. ORDINARILY, THE COURT SHOULD PROCEED ON THE BASIS THAT THE APPARENT TENOR OF THE AGREEMENT REFLECTS THE REAL STATE OF AFFAIRS AND WHAT IS TO BE EXAMINED IS WHETHER THE REVENUE HAS SUCCEEDED IN SHOWING THAT THE APPARENT IS NOT THE REAL AND THAT THE IMPUGNED CLAIMS MADE BY THE APPELLANT DOES NOT REFLECT THE TRUE STATE OF AFFAIRS.' 1.17. IT IS SETTLED POSITION THAT ASSESSMENT PROCEEDINGS UNDER THE ACT, ARE QUASI JUDICIAL PROCEEDINGS AND AS SUCH ADDITIONS MADE ON MERE SUSPICION OR PERSONAL IMAGINATIONS OF THE AO, UNSUBSTANTIATED ON THE STRENGTH OF CORROBORATIVE EVIDENCE, ARE UNSUSTAINABLE. SINCE THE APPELLANT TENDERED SOME EXPLANATION, EXPLAINING THE QUESTIONED DEPOSITS, ON THE BASIS OF DOCUMENTARY EVIDENCE, WHICH WERE PRIMA FACIE REASONABLE, THE AO WAS BOUND TO ACCEPT THE SAME UNLESS DISPROVED BY HIM, BY BRINGING CORROBORATIVE EVIDENCE AND THE SAME COULD NOT BE REJECTED LIGHT HEARTEDLY ON CAPRICIOUS OR ARBITRARY GROUNDS OR 0:1 MERE SUSPICIONS AND IRRELEVANT CONSIDERATIONS. FOR THIS PROPOSITION, I PLACE RELIANCE ON THE DECISIONS IN RBN. NAIDU V. CIT (1956) 29 ITR 194 (NAG.); LAJWANTI SIAL V.CIT (1956) 30 ITR 228 (NAG.); AND KANPUR STEEL COMPANY LTD. V. CIT (1957) 32 ITR 56 (ALL.). 1.18. THE PRESUMPTIONS AND HYPOTHETICAL OBSERVATIONS MADE BY THE A.O. FOR MAKING THE IMPUGNED ADDITION, WERE EXTRANEOUS, IRRELEVANT AND OPPOSED TO THE FACTS OBTAINING FROM THE RECORD. THE FATE OF THE APPELLANT COULD NOT BE DECIDED BY THE A.O. ON MERE SURMISES OR PROBABILITIES (NORTHERN BENGAL JUTE MILLS TRADING CO. LTD. V. CIT (1968) 70 ITR 407 -: 45: - 45 (CAL.). THE MERE EXISTENCE OF REASONS FOR SUSPICION WOULD NOT TANTAMOUNT TO EVIDENCE (CAL. HC IN NARAYAN CHANDRA BAIDYA V. CIT (1951) 20 ITR 287 (CAL.). IF THE AO PRESUMED THAT THE EXPLANATION OF THE APPELLANT THAT THE IMPUGNED DEPOSITS IN BANK ACCOUNTS OF MR.PIYUSH CHOURASIA, WERE EITHER FROM THE SUMS RECEIVED BY PIYUSH FROM HIS PARENTS OR FROM THE SALARY INCOME EARNED BY HIM DURING THE RELEVANT PREVIOUS YEARS OR THE SUMS RECEIVED FROM THE CLIENTS FOR DEPOSITING WITH THE LIC/MUTUAL FUNDS, WAS NOT ACCEPTABLE, THEN, IT WAS INCUMBENT UPON THE AO, TO HAVE CONDUCTED THE NEEDED INVESTIGATION TO SUBSTANTIATE THE FACT THAT THE IMPUGNED SUM WAS NOTHING BUT THE INCOME OF THE APPELLANT EARNED DURING THE RELEVANT PREVIOUS YEAR, FROM SOURCES UNDISCLOSED TO THE DEPARTMENT. THE AO HAD NOT BROUGHT ANY INCRIMINATING EVIDENCE TO PROVE THIS FACT AGAINST THE APPELLANT. IN DHAKESWARI COTTON MILLS LTD. V. CIT (1954) 26 ITR 775 (SC) IT WAS HELD THAT: THE AO IS NOT ENTITLED TO MAKE A PURE GUESS AND MAKE ESTIMATED ADHOC ADDITIONS/DISALLOWANCES TO THE INCOME RETURNED, WITHOUT REFERENCE TO ANY EVIDENCE OR ANY MATERIAL AT ALL. THE RULE OF LAW ON THIS SUBJECT HAS BEEN FAIRLY AND RIGHTLY STATED BY THE LAHORE HC IN SETH GURMUKH SINGH V. CIT (1944) 12 ITR 393 (LAH.). SINCE THE AO DISREGARDED THE FACTUAL SUBMISSIONS MADE BY THE APPELLANT AND RESORTED TO AFOREMENTIONED UNSUBSTANTIATED ADDITIONS, HE OUGHT TO HAVE RELATED THE SAME TO SOME EVIDENCE OR MATERIAL ON RECORD AS IT IS NOW WELL SETTLED THAT IF THE RESULTS SHOWN BY THE APPELLANT IN HIS RETURN, ARE NOT ACCEPTABLE, IT IS FOR THE TAXING AUTHORITIES TO PROVE THAT THE APPELLANT HAD MADE MORE PROFITS THAN RETURNED. [INTERNATIONAL FOREST CO. V. CIT (1975) -: 46: - 46 101 ITR 721 (J & K)]. IT WAS OBSERVED BY THE SC IN DY. COMMISSIONER OF AGRICULTURAL INCOME- TAX AND SALES TAX V. TRAVANCORE RUBBER AND TEA CO. (1967) 20 STC 520 THAT 'IN ALL CASES OF TAXATION, THE BURDEN OF PROVING NECESSARY INGREDIENT LAID DOWN BY LAW TO JUSTIFY TAXATION IS UPON THE AUTHORITIES.' SINCE THIS WAS NOT PROVED AGAINST THE APPELLANT ON THE STRENGTH OF EVIDENCE, THE AO'S ACTION IN THIS REGARD IS OPPOSED TO THE LEGAL STANDARDS ENUMERATED ABOVE. THE HON'BLE SC HAS REAFFIRMED ITS EARLIER STAND IN CIT V. K.Y. PILLIAH & SONS (1967) 64 ITR 411 (SC) WHEREIN IT WAS DECIDED THAT ANY LUMP SUM ADD BACKS TO THE INCOME SHOWN, IF FOUND JUSTIFIED, MUST BE DONE IN PROPER EXERCISE OF DISCRETION OBJECTIVELY AND JUDICIOUSLY ON THE BASIS OF RELEVANT MATERIAL. IN THE CASE OF THE APPELLANT, UNDER CONSIDERATION, NO EVIDENCE WHATSOEVER WAS BROUGHT ON RECORD BY THE AO, TO JUSTIFY THE IMPUGNED ADDITIONS. HENCE, FOR THE REASONS AFOREMENTIONED, THE IMPUGNED ADDITIONS MADE BY THE AO CANNOT BE SUSTAINED. 1.19. IN CIT VS NAGPUR GAS & DOMESTIC APPLIANCES (1984) 147 ITR 440 ( BORN), IT WAS HELD THAT: SECTION 69A WAS ENACTED TO TREAT THE VALUE OF CERTAIN ITEMS AS INCOME BY A DEEMING PROVISION BUT FACTS MUST BE FOUND TO BRING A CASE WITHIN THE DEEMING PROVISION. IN THE CASE OF DEEMING PROVISION THE COURT HAS TO ASSUME AN UNREAL STATE OF THINGS TO BE REAL. IN THE CASE OF THE APPELLANT, UNDER CONSIDERATION, NO EVIDENCE WAS BROUGHT ON RECORD BY THE AO, TO PROVE THAT THE APPELLANT WAS THE OWNER OF THE IMPUGNED BANK ACCOUNT AND DEPOSITS MADE THEREUNDER. 1.20. AS PER THE DEEMING PROVISIONS OF SECTION -: 47: - 47 69A OF THE ACT, A PERSON FOUND TO BE IN POSSESSION OF MONEY CAN BE DEEMED TO BE THE OWNER IN ABSENCE OF SATISFACTORY EXPLANATION AND IN THE CASE OF THE APPELLANT, IT WAS CERTAINLY NOT THE APPELLANT WHO WAS PROVED TO BE THE OWNER OF THE IMPUGNED BANK ACCOUNT, WHICH WAS UNDISPUTEDLY IN THE NAME OF SHRI PIYUSH CHAURASIA. IN SUCH CIRCUMSTANCES, IT WAS INCUMBENT UPON THE AO TO HAVE MADE EXHAUSTIVE ENQUIRIES AND GATHERED SOME CORROBORATIVE MATERIAL EVIDENCE, BEFORE MAKING THE IMPUGNED ADDITION, PRESUMING THE SAME TO BE THE UNDISCLOSED INCOME OF THE APPELLANT. RECORD EVIDENCES THE FACT THAT THE AO HAD NOT CONDUCTED EXHAUSTIVE ENQUIRIES AND GATHERED ANY MATERIAL EVIDENCE, TO SUBSTANTIATE THE ADVERSE INFERENCES DRAWN BY HIM, AGAINST THE APPELLANT. HENCE, THE AO'S INACTION IN THIS REGARD IS OPPOSED TO THE DECISION IN YADU HARI DALMIA V. CIT (1980)126 ITR 48(DEL.), WHEREIN IT WAS HELD THAT: THE BURDEN TO PROVE THAT THE APPELLANT IS THE OWNER OF THE ASSETS SO FOUND, WAS ON THE REVENUE. 1.21. IT IS SETTLED POSITION OF LAW THAT ONCE A PERSON WAS FOUND IN POSSESSION, CUSTODY AND CONTROL OF MONEY, BULLION OR OTHER VALUABLE ARTICLES OR THINGS, BURDEN TO PROVE THAT HE WAS NOT THE OWNER, SHIFTS ON HIM. IF HE FAILS TO GIVE SATISFACTORY EXPLANATION AND DISCHARGE THE BURDEN, VALUE OF SUCH ASSETS FOUND FROM HIS POSSESSION COULD BE ADDED AS INCOME U/S 69A OF THE ACT. IN CHUHARMAL TAKANMAL V. CIT (1987) 166 ITR 12 (MP), IT WAS HELD THAT: IN VIEW OF PROVISIONS OF SECTION 110 OF THE EVIDENCE ACT, SINCE THE ASSESSEE WAS FOUND IN THE POSSESSION OF THE WATCHES, HE WAS PRESUMED TO BE THE OWNER OF THEM UNTIL THE OWNERSHIP OF SOME OTHER PERSON WAS PROVED. -: 48: - 48 AS THE ASSESSEE HAD NOT TAKEN ANY STEPS TO PROVE THAT THE WATCHES DID NOT BELONG TO HIM, THE VALUE OF THE WATCHES HAD TO BE DEEMED TO BE THE INCOME OF THE ASSESSEE IN VIEW OF THE FICTION CREATED BY SECTION 69A OF THE ACT AND THE VALUE OF THE WATCHES WAS RIGHTLY INCLUDED IN HIS ASSESSMENT. THIS VIEW STANDS AFFIRMED BY THE SUPREME COURT IN CHUHARMAL V. CIT (1988) 172 ITR 250(SC). IN THE CASE OF THE APPELLANT, UNDER CONSIDERATION, AS STATED TIME AND AGAIN, THE AFOREMENTIONED BANK ACCOUNT WAS IN THE NAME OF MR. PIYUSH CHOURASIA AND THE DEPOSITIONS OF VARIOUS EMPLOYEES OF THE APPELLANT, RECORDED BY THE AO, CLEARLY FORTIFIED THE FACT THAT THE SUMS DEPOSITED IN THE SAID BANK ACCOUNT WERE ALWAYS GIVEN BY SHRI PIYUSH CHOURASIA AND NONE ELSE. THE AO HAD NOT BROUGHT ANY EVIDENCE ON RECORD TO PROVE THAT THE IMPUGNED BANK ACCOUNT IN THE NAME OF SHRI PIYUSH CHOURASIA AND THE DEPOSITS MADE THEREIN, WERE FLOWN FROM THE APPELLANT'S SOURCES UNDISCLOSED TO THE DEPARTMENT. IN SUCH CIRCUMSTANCES, APPARENT HAS TO BE ACCEPTED AS REAL SINCE THE CONTRARY WAS NOT PROVED BY THE AO. THEREFORE, IN THE LIGHT OF THE NUMEROUS JUDICIAL PRONOUNCEMENTS ON THE SUBJECT INCLUDING THAT OF THE SUPREME COURT IN CHUHARMAL, (SUPRA), SINCE THE QUESTIONED BANK ACCOUNT WAS IN THE NAME OF SHRI PIYUSH CHOURASIA AND IT WAS HE WHO WAS PROVED TO HAVE BEEN DEPOSITING THE SUMS IN THE SAID BANK ACCOUNT, THE IMPUGNED DEPOSITS, UNDISPUTEDLY APPEARING IN HIS BANK ACCOUNT HAVE TO BE CONSIDERED IN THE ASSESSMENT OF THE OWNER OF THE SAID BANK ACCOUNT VIZ., SHRI PIYUSH CHOURASIA AND CERTAINLY NOT IN THE ASSESSMENT OF THE APPELLANT. 1.22. THE FOREIGN EXCHANGE REGULATION BOARD -: 49: - 49 IN RAJINDER PAUL V. DIRECTOR OF ENFORCEMENT (1988) 40 TAXMAN 45 (FERA) DESIRED THAT IT HAS TO BE A CONSCIOUS POSSESSION, I.E. CONTROL OVER THE PROPERTY WITH A FEELING OF BELONGING. IT HELD THAT A MAN CANNOT BE SAID TO BE IN POSSESSION OF A THING UNLESS HE IS AWARE OF ITS EXISTENCE AND HAS A MENTAL AS WELL AS PHYSICAL CONTROL ON ITS DISPOSITION. IN ULTIMATE ANALYSIS, THE STATEMENT WHERE THE DEPONENT DENIED KNOWLEDGE OR POSSESSION OF THE FOREIGN CURRENCY, STATING THAT IT DID NOT BELONG TO HIM, SUGGESTING FURTHER THAT SOME TOURIST OR GUEST MIGHT HAVE DROPPED THE SAME WITHOUT HIS KNOWLEDGE IN THE RESTAURANT, WAS NOT ACCEPTED. THE CALCUTTA HIGH COURT IN CIT V. SOORAJMAL NAGARMUL (1990) 181 ITR 340 (CAL), DID NOT APPROVE ASSESSMENT OF THE VALUE OF JEWELLERY FOUND IN THE ROOM OCCUPIED BY THE WIFE AND MOTHER OF ONE OF THE PARTNERS IN THE COURSE OF SEARCH CONDUCTED FOR THE REASON THAT THERE IS A PRIMA FACIE PRESUMPTION THAT THOSE WHO ARE FOUND IN THE POSSESSION OF CERTAIN ARTICLES, ARE THE OWNERS THEREOF, HOWEVER, THE PRESUMPTION CAN BE REBUTTED BY COGENT EVIDENCE. IN THE INSTANT CASE JEWELLERY WAS FOUND IN THE POSSESSION OF THE WIFE AND MOTHER OF THE PARTNER OF THE FIRM, THE INCOME TAX DEPARTMENT HAD NOT PROVED THAT ANY PART OF THE JEWELLERY BELONGED TO THE ASSESSEE FIRM AND MERE FACT THAT THE ASSESSEE'S BUSINESS WAS CARRIED ON IN THE SAME BUILDING, WOULD NOT LEAD TO THE CONCLUSION THAT THE JEWELLERY BELONGED TO THE ASSESSEE. THE CALCUTTA HIGH COURT HAD ALSO HELD THAT: THERE IS A PRIMA FACIE PRESUMPTION THAT THOSE WHO ARE FOUND IN POSSESSION OF CERTAIN ARTICLES ARE THE OWNERS THEREOF. WHERE THE JEWELLERY WAS FOUND IN POSSESSION OF THE WIFE AND MOTHER OF THE PARTNER OF THE FIRM, THE MERE FACT THAT THE ASSESSE'S BUSINESS WAS IN -: 50: - 50 THE SAME PREMISES WOULD NOT LEAD TO THE CONCLUSION THAT THE JEWELLERY BELONGED TO THE ASSESSEE. IN THE CASE OF THE APPELLANT, UNDER CONSIDERATION, AS REITERATED TIME AND AGAIN, THE AFOREMENTIONED BANK ACCOUNT WAS IN THE NAME OF SHRI PIYUSH CHOURASIA AND THE DEPOSITS/WITHDRAWALS MADE THEREIN WERE ALSO FORTIFIED TO HAVE BEEN MADE BY HIM AND THE AO HAD NOT BROUGHT ANY EVIDENCE TO PROVE THE APPELLANT'S INVOLVEMENT, OWNERSHIP AND CONTROL OVER THE SAID ACCOUNT OF SHRI PIYUSH CHOURASIA. IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE, IN THE LIGHT OF THE RATIO LAID DOWN BY THE CALCUTTA HIGH COURT IN SOORAJMAL'S CASE (SUPRA), THERE WAS ABSOLUTELY NO JUSTIFICATION FOR CONSIDERING AND ASSESSING THE IMPUGNED DEPOSITS IN CASES, OTHER THAN THAT OF SHRI PIYUSH CHOURASIA. 1.23. THE EXPRESSION 'INCOME' USED IN THIS SECTION HAS A WIDE MEANING WHICH MEANS ANYTHING WHICH COMES IN OR RESULTS IN GAIN (CHUHARMAL VS. CIT (1988) 70 (1988) 172 ITR 250 (SC)). IN THE CASE OF THE APPELLANT, UNDER CONSIDERATION, NO EVIDENCE WHATSOEVER WAS BROUGHT BY THE AO ON RECORD TO PROVE THAT THE APPELLANT HAD GAINED ANYTHING FROM THE IMPUGNED BANK ACCOUNT IN THE NAME OF SHRI PIYUSH CHOURASIA. THE WITHDRAWALS MADE BY SHRI PIYUSH CHOURASIA FROM THE SAID BANK ACCOUNT WERE NOT PROVED TO HAVE BEEN TAKEN IN AND UTILIZED BY THE APPELLANT FOR HIS BUSINESS PURPOSES. SIMILARLY IT WAS ALSO NOT PROVED THAT THE DEPOSITS MADE IN THE AFOREMENTIONED BANK ACCOUNT WERE FLOWN FROM THE DISCLOSED OR UNDISCLOSED INCOME OF THE APPELLANT. THE AO HAD ALSO NOT BROUGHT ANY EVIDENCE ON RECORDS -: 51: - 51 TO PROVE THAT THE APPELLANT IN FACT EARNED, DURING THE RELEVANT PREVIOUS YEARS, MORE THAN THAT DISCLOSED AS PER HIS BOOKS OF ACCOUNT. UNLESS ALL THESE ESSENTIAL INGREDIENTS ARE PROVED, AGAINST THE APPELLANT, ON THE BASIS OF CORROBORATIVE EVIDENCE, THE IMPUGNED ADDITIONS, MADE ON MERE SUSPICIONS AND SURMISES, IN M CONSIDERED VIEW, ARE OPPOSED TO THE RATIO LAID DOWN IN VARIOUS JUDICIAL PRONOUNCEMENTS ON THE SUBJECT INCLUDING THAT OF THE SUPREME COURT IN DHAKESHWARI COTTON MILLS LTD. V. CIT (1954) 26 ITR 775, 782 (SC), WHEREIN IT WAS HELD THAT THERE MUST BE SOMETHING MORE THAN BARE SUSPICION TO SUPPORT THE ASSESSMENT. SIMILAR WAS THE VIEW HELD IN PANKAJ DIAMOND V. ASST. CIT[201O] 5 ITR (TRIB.) 469 (AHD.) IT IS SETTLED POSITION OF LAW THAT SUSPICION, HOWEVER GAVE, DOES NOT TAKE PLACE OF THE TRUTH. 1.24. POSSESSION OF MONEY OR ASSET IS PRIMA FACIE PROOF OF OWNERSHIP AND THE ONUS IS ON THE PERSON IN POSSESSION OF THE SAME, TO SHOW THAT HE IS NOT THE OWNER (ASHOK KUMAR V. CIT (1986) 160 ITR 497 (MP); CIT V. K.T.M.S. MOHAMAD (1997) 228 ITR 113 (MAD.); KANTILAL CHANDULAL & CO. V. CIT (1982) 136 ITR 889 (CAL); AND CHUHARMAL V. CIT (SUPRA). IN CIT V. PAVUNNY (KI) (1998) 232 ITR 837 (KER), IT WAS HELD THAT: THE ONUS IS ON THE PERSON FOUND IN POSSESSION TO PROVE THAT IT BELONGS TV SOMEONE ELSE. IN THE CASE OF THE APPELLANT, UNDER CONSIDERATION, THE IMPUGNED BANK ACCOUNT WAS IN THE NAME OF SHRI PIYUSH CHOURASIA AND NEITHER HE NOR THE AO BROUGHT ON RECORD ANY EVIDENCE TO PROVE THAT THE SAME BELONGED TO THE APPELLANT. HENCE, THE CONCLUSIONS ARRIVED AT BY THE AO AGAINST THE APPELLANT IN THIS REGARD, ARE OPPOSED TO THE RATIO LAID DOWN BY THE KERALA -: 52: - 52 HIGH COURT IN PAVUNNY'S CASE, SUPRA. 1.25. IN CIT V. K. CHINNATHAMBAN (2007) 292 ITR 682 (SC}, IT WAS HELD THAT: WHERE A DEPOSIT STANDS IN THE NAME OF A THIRD PERSON, THEN, IN SUCH A CASE THE PROPER COURSE WOULD BE TO CALL UPON THE PERSON IN WHOSE BOOKS THE DEPOSIT APPEARS OR THE PERSON IN WHOSE NAME THE DEPOSIT STANDS SHOULD BE CALLED UPON TO EXPLAIN SUCH DEPOSIT. ONUS OF PROVING THE SOURCE OF DEPOSIT PRIMARILY RESTED ON THE PERSONS IN WHOSE NAMES THE DEPOSIT APPEARED IN VARIOUS BANKS. IN THE CASE OF THE APPELLANT, UNDER CONSIDERATION, THE AFOREMENTIONED BANK ACCOUNT WAS IN THE NAME OF SHRI PIYUSH CHOURASIA AND NOT IN THE NAME OF THE APPELLANT AND SINCE THE IMPUGNED DEPOSITS WERE APPEARING IN THE BANK ACCOUNT OF SHRI PIYUSH CHOURASIA, THE ONUS OF PROVING THE SOURCE OF DEPOSITS PRIMARILY RESTED ON THE PERSON (SHRI PIYUSH CHOURASIA) IN WHOSE NAME THE DEPOSITS APPEARED IN THE AFOREMENTIONED BANK ACCOUNT. SHRI PIYUSH CHOURASIA AT ALL STAGES OF PROCEEDINGS HAD EXTENSIVELY EXPLAINED THE SOURCE FOR THE IMPUGNED DEPOSITS APPEARING IN HIS AFOREMENTIONED BANK ACCOUNTS. THE AO HAD WRONGLY PRESUMED THAT SUCH ONUS WAS ON THE APPELLANT. THE AO'S CONCLUSIONS IN THIS REGARD, AGAINST THE APPELLANT, IN MY CONSIDERED VIEW, ARE AGAINST THE RATIO OF THE SUPREME COURT IN CHINNTHAMBAN'S CASE, SUPRA. 1.26. IN BRINJAL RUPCHAND V ITO (1991) 40 TTJ 668 (INDORE), IT WAS HELD THAT: IT IS TRITE LAW THAT, IF AN INCOME NOT ADMITTED BY AN APPELLANT IS TO BE ASSESSED IN THE HANDS OF THE APPELLANT, THE BURDEN TO ESTABLISH THAT THERE IS SUCH INCOME CHARGEABLE TO TAX, IS ON THE AO. WITH A VIEW TO ASSIST THE AO AND TO REDUCE THE RIGOR OF -: 53: - 53 THE BURDEN THAT LAY UPON THE AO, PROVISIONS OF SEC.68, 69,69A TO 69C HAVE PROVIDED FOR CERTAIN DEEMING PROVISIONS, WHERE AN ASSUMPTION OF INCOME IS RAISED, IN THE ABSENCE OF SATISFACTORY EXPLANATION FROM THE APPELLANT. AS THESE ARE DEEMING PROVISIONS, THE CONDITIONS PRECEDENT FOR INVOKING SUCH PROVISIONS, ARE REQUIRED TO BE STRICTLY CONSTRUED. THE FACTS AND CIRCUMSTANCES GIVING RISE TO THE PRESUMPTIONS HAVE TO BE ESTABLISHED, WITH REASONABLE CERTAINTY. THE AO CANNOT FIRST MAKE CERTAIN CONJECTURES AND SURMISES AND THEREAFTER APPLY THE DEEMING PROVISIONS BASED EN SUCH CONJECTURES AND SURMISES. IN THE ABSENCE OF ADEQUATE MATERIAL AS TO THE NATURE AND OWNERSHIP OF THE IMPUGNED TRANSACTIONS, UNDISCLOSED INCOME COULD NOT BE ASSESSED IN THE HANDS OF THE APPELLANT. 1.27. THE SEIZED DOCUMENTS, IN QUESTION, MAY CREATE A DOUBT BUT SUCH A DOUBT, IF EXTENSIVELY CLARIFIED ON THE STRENGTH OF CIRCUMSTANTIAL EVIDENCE TO BE OTHERWISE, SHOULD NOT HAVE BEEN SUBSTITUTED FOR PROOF. IN CIT V. CHAMANLAL DHINGRA (1994) 121 TAXATION 272 (ALL.), THE ALL HC, FOLLOWING THE DECISION OF THE BOM. HC~ IN ADDL. CIT V. LATA MANGESHKAR (1974) 9'7 ITR 696 (BOM.) HELD THAT: ' THE SEIZED DOCUMENTS CANNOT TAKE THE PLACE OF PROOF, RATHER THEY MERELY CREATE SUSPICION AND SUSPICION, HOWEVER, GRAVE DOES NOT TAKE PLACE OF THE TRUTH. 1.28. IN KISHAN CHAND CHELLARAM V. CIT (1980) 125 ITR 713 (SC) IT WAS HELD THAT THE BURDEN LAY ON THE DEPTT. TO PROVE, BY BRINGING PROPER EVIDENCE ON RECORD, THAT THE IMPUGNED TRANSACTIONS BELONG TO THE APPELLANT AND THAT THE SUMS PRESUMED AS HIS UNDISCLOSED -: 54: - 54 INCOME/INVESTMENT, WERE IN FACT THE INCOME OF THE APPELLANT EARNED DURING THE RELEVANT PREVIOUS YEARS AND THAT THE APPELLANT COULD NOT BE EXPECTED TO CALL THE THIRD PARTIES IN EVIDENCE TO HELP THE DEPTT. TO DISCHARGE THE BURDEN THAT LAY UPON IT. IT WAS ALSO HELD THAT IN THE ABSENCE OF CORROBORATIVE EVIDENCE OF THE THIRD PARTIES, NO ADDITION ON PRESUMPTIONS COULD BE MADE. IN THE CASE OF THE APPELLANT, UNDER CONSIDERATION, IN THE ABSENCE OF CORROBORATIVE EVIDENCE BROUGHT BY THE AO, TO CONCLUSIVELY PROVE THAT THE IMPUGNED DEPOSITS WERE FLOWN FROM THE UNDISCLOSED INCOME OF THE APPELLANT, NO ADDITION ON PRESUMPTIONS, IN MY CONSIDERED VIEW, COULD BE MADE IN THE CASE OF THE APPELLANT. 1.29. FOR THE REASONS EXTENSIVELY ENUMERATED ABOVE, THE IMPUGNED ADDITIONS MADE BY THE AO, UNSUBSTANTIATED ON THE STRENGTH OF MATERIAL EVIDENCE BROUGHT AGAINST THE APPELLANT, IN MY CONSIDERED VIEW, ARE UNSUSTAINABLE ON FACTS AND IN LAW. THE SAME ARE, THEREFORE, DELETED. THE APPELLANT ACCORDINGLY GETS RELIEF OF RS.12,500/- FOR THE AY 2003-04; RS.9,750/- FOR THE AY 2004-05; RS.77,845/- FOR THE AY 2005-06; RS.8,82,190/- FOR THE AY 2006-07; RS.17,51,765/- FOR THE AY 2007-08; RS.16,06,600/-FOR THE AY 2008-09; AND RS.31,44,500/- FOR THE AY 2009-10. 11. WITH RESPECT TO THE MERIT OF THE ADDITIONS IN RESPE CT OF OTHER APPEALS, WE FOUND THAT THE ASSESSEE HAS FILED DETAILED CHART OF CASH RECEIPT FROM ITS CLIENTS FOR DEPOSIT IN THE ACCOUNT OF L.I.C. THE AVAILABILITY OF CASH WAS ALSO EXPLAIN ED FROM CASH -: 55: - 55 BOOK, WHICH WAS PRODUCED BEFORE THE LOWER AUTHORITI ES. AS PER THE CHART FURNISHED BY THE LD. AUTHORIZED REPRESENT ATIVE, WE FOUND THAT THE AMOUNT OF CASH WAS ULTIMATELY USED F OR PAYMENT OF PREMIUM IN THE ACCOUNT OF ITS CLIENTS WI TH LIC. HOWEVER, TO SUBSTANTIATE ITS CLAIM THAT AMOUNT OF C ASH WAS RECEIVED FROM ITS CLIENTS, CONFIRMATION FROM THESE CLIENTS FOR PAYMENT OF CASH TO ASSESSEE FOR DEPOSIT IN THEIR PR EMIUM ACCOUNT WITH LIC WAS NOT FILED. IN THE INTEREST OF JUSTICE, TO THE LIMITED EXTENT OF VERIFYING THE CONFIRMATION IN RES PECT OF CASH GIVEN BY CLIENTS TO THE ASSESSEE FOR DEPOSIT IN THE IR RESPECTIVE ACCOUNTS, WE RESTORE THE MATTER BACK TO THE FILE OF ASSESSING OFFICER. THE ASSESSEE IS ACCORDINGLY DIRECTED TO FI LE THE CONFIRMATION FROM THEIR CLIENTS REGARDING PAYMENT O F CASH IN EXCESS OF RS. 20,000/- TO ASSESSEE ON ACCOUNT OF PR EMIUM DUE FROM THEM TOWARDS LIC. THE ASSESSING OFFICER IS FUR THER DIRECTED TO RESTRICT ITS SCOPE OF INQUIRY TO THE EX TENT OF VERIFYING THESE CONFIRMATIONS. IF THE ASSESSING OFFICER FINDS THAT THE ASSESSEE HAS FILED CONFIRMATIONS IN RESPECT OF AMOU NT EXCEEDING RS. 20,000/-, NO ADDITION IS WARRANTED. W E DIRECT ACCORDINGLY. -: 56: - 56 12. IN THE RESULT, THE APPEALS OF REVENUE IN I.T(SS).A. NOS. 130, 137, 138 AND 139/IND/2012 ARE DISMISSED, WHERE AS APPEALS IN I.T(SS).A.NOS. 131 TO 136/IND/2012 AND 1 39 TO 143/IND/2012 ARE ALLOWED IN PART FOR STATISTICAL PU RPOSES. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 12 TH AUGUST, 2013. SD/ - SD/ - (JOGINDER SINGH) (R. C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 12 TH AUGUST, 2013. CPU* 2529307