Shri Gautam A.Parmar, Ahmedabad V. The Jt.CIT.,(OSD)Circle-5, Ahmedabad

ITSSA 15/AHD/2012

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 2341 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 6 month(s) 12 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 08-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 23-06-2016
• Assessment Year: misc
• Appeal Filed On: 27-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAGDISH
• Assessee Lawyers: G C PIPARA
• Keywords: Bogus purchase; Unexplained cash credit; Unexplained investment; Depreciation; Search and seizure; Loose papers; Document seized; Block assessment; Documents seized
• Section: 143(3); 153A; 68; 69; 148; 263; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMEDABAD BEFORE SHRI S. S. GODARA, JM, & SHRI MANISH BORA D, AM. 1. GAUTAMBHAI A. PARMAR, 6, POOJA BUNGLOWS, ASHWAMEGH PART-1, RINGH ROAD, SATELLITE, AHMEDABAD. VS. JT. CIT(OSD), CIRCLE-5, AHMEDABAD. 2. GAUTAMBHAI A. PARMAR, 6, POOJA BUNGLOWS, ASHWAMEGH PART-1, RINGH ROAD, SATELLITE, AHMEDABAD. VS. JT. CIT(OSD), CIRCLE-5, AHMEDABAD. 3. GAUTAMBHAI A. PARMAR, 6, POOJA BUNGLOWS, ASHWAMEGH PART-1, RINGH ROAD, SATELLITE, AHMEDABAD. VS. JT. CIT(OSD), CIRCLE-5, AHMEDABAD. 4. GAUTAMBHAI A. PARMAR, 6, POOJA BUNGLOWS, ASHWAMEGH PART-1, RINGH ROAD, SATELLITE, AHMEDABAD. VS. JT. CIT(OSD)-5, AHMEDABAD 5. ACIT, CIRCLE-5, AHMEDABAD VS. GAUTAMBHAI A. PARM AR, 6, POOJA BUNGLOWS, ASHWAMEGH PART-1, RINGH ROAD, SATELLITE, AHMEDABAD. 6. GAUTAMBHAI A. PARMAR 6, POOJA BUNGLOWS, ASHWAMEGH PART-1, RINGH ROAD, SATELLITE, AHMEDABAD. VS. JT. CIT(OSD)-5, AHMEDABAD APPELLANT RESPONDENT PAN AJUPP 6745Q APPELLANT BY SHRI G. C. PIPARA, AR RESPONDENT BY SHRI JAGDISH, CIT, DR DATE OF HEARING: 23/6/2016 DATE OF PRONOUNCEMENT: 8/8/2016 O R D E R IT(SS)A/ ITA NO. ASST. YEAR 1. IT(SS)A NO.15/AHD/2012 1.4.85 TO 23.11.95 2. ITA NO.1811/AHD/2012 1991-92 3. ITA NO.1812/AHD/2012 1992-93 4. ITA NO.1813/AHD/2012 1993-94 5. ITA NO.1601/AHD/2013 1994-95 6. CO NO.203/AHD/2013 1994-95 IT(SS)A NO.15 & ITA NOS.1811, 1812 & OTHERS ASST. YEAR 1.4.85 TO 23.11.95 & OTHERS 2 PER BENCH OUT OF THE FIVE APPEALS, FOUR APPEALS HAVE BEEN FI LED BY THE ASSESSEE, ONE APPEAL BY THE REVENUE AND ONE CROSS O BJECTION BY THE ASSESSEE. 1. APPEAL OF ASSESSEE IN IT(SS)A NO.15/AHD/2012 FOR BLOCK ASSESSMENT PERIOD 01.04.1985 TO 23.11.1995 IS DIREC TED AGAINST ASSESSMENT ORDER U/S 143(3) R.W.S. 254 R.W.S.158BD OF THE IT ACT, 1961 (IN SHORT THE ACT) PASSED 27.12.2011 BY JT. CI T(OSD), CIRCLE-5, AHMEDABAD. 2. ASSESSEES APPEALS IN ITA NO.1811-1813/AHD/2012 FOR ASST. YEARS 1991-92 TO 1993-94 ARE DIRECTED AGAINST SEPAR ATE ORDERS OF CIT(A) XI, AHMEDABAD, DATED 16.06.2012, 18.6.2012 & 18.6.2012 IN APPEAL NOS.CIT(A)-XI/422-424/JCIT(OSD)/10-11 & 11-1 2, RESPECTIVELY, PASSED AGAINST SEPARATE ORDERS U/S 14 3(3) R.W.S. 254 OF THE ACT FRAMED ON 27.12.2011BY JT. CIT (OSD), CIRCL E-5, AHMEDABAD. 3. REVENUES APPEAL IN ITA NO.1601/AHD/2013 AND CRO SS OBJECTION OF ASSESSEE ARE FILED AGAINST ORDER OF LD . CIT(A)-XI, AHMEDABAD, DATED 15.03.2013 IN APPEAL NO.CIT(A)-XI/ 425/JCIT, CIR- 5/11-12 PASSED AGAINST ORDER U/S 143(3) R.W.S. 254 OF THE ACT FRAMED ON 27.12.2011 BY JT. CIT, CIRCLE-5, AHMEDABAD. IT(SS)A NO.15 & ITA NOS.1811, 1812 & OTHERS ASST. YEAR 1.4.85 TO 23.11.95 & OTHERS 3 4. SINCE THE ASSESSEE IN ALL THESE APPEALS AND CROS S OBJECTION IS THE SAME AND ISSUES ARE SIMILAR THESE WERE HEARD TO GETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 5. FIRST WE TAKE UP APPEAL IN IT(SS)A NO.15/AHD/201 2 WHEREIN THE GROUNDS RAISED ARE AS UNDER :- 1. THE PRESENT ASSESSMENT ORDER UNDER SECTION 143(3 ) R.W.S. 254, R.W.S. 158BD DATED 27/12/2011 IS BAD IN LAW AS THE SAME HAS BEEN PASSED WITHOUT PRIOR APPROVAL OF THE C.I.T. AND THUS REQUIRED TO BE QUAS HED. 2. THE IMPUGNED ORDER OF ASSESSMENT IS ALSO BAD IN LAW, AS THERE BEING NO SATISFACTION RECORDED AS REQUIRED UNDER SECTION 158 BD, THE PRESENT ASSESSMENT PROCEEDINGS ARE BAD IN LAW AND THUS ENTI RE ASSESSMENT REQUIRED TO BE QUASHED. 3. THE ID. A.O. HAS ERRED IN CONSIDERING AN AMOUNT OF RS. 10,29,001/- AS UNEXPLAINED CREDIT/LOAN. THERE BEING NO UNEXPLAINED CREDIT, ADDITION IS BASED ON SURMISES AND CONJECTURED AND SAME HAS BEEN MADE BY THE A.O. WITHOUT VERIFYING FACTS AND THEREFORE, ENTIRE ADDITION OF R S. 10,29,001/- IS REQUIRED TO BE DELETED. 4. THE ID. A.O. HAS ALSO ERRED IN CONSIDERING AN AM OUNT OF RS. 3,00,000/- AS UNEXPLAINED DEPOSIT IN BANK. SINCE THE SOURCE OF TH E SAME WAS EXPLAINED AND FOUND APPEARING IN REGULAR BOOKS OF ACCOUNTS, T HE SAME WILL NOT FALL WITHIN THE DEFINITION OF UNDISCLOSED INCOME AND THUS REQUI RED TO BE DELETED. 5. THE ID. A.O. HAS ALSO ERRED IN CONSIDERING AN AM OUNT OF RS. 17,50,000/- AS UNEXPLAINED DEPOSITS IN REGULAR BANK ACCOUNT. IN VI EW OF THE SOURCE AS EXPLAINED AND THE SAME BEING REGULAR TRANSACTION IN REGULAR BANK ACCOUNT, ADDITION IN THE BLOCK ASSESSMENT REQUIRES TO BE DEL ETED. 6. THE ID. A.O. HAS ALSO ERRED IN CONSIDERING AN AM OUNT OF RS. 40,91,450/- AS UNEXPLAINED DEPOSITS IN REGULAR BANK ACCOUNT. IN VI EW OF THE SOURCE AS EXPLAINED AND THE SAME BEING REGULAR TRANSACTION IN REGULAR BANK ACCOUNT, ADDITION IN THE BLOCK ASSESSMENT REQUIRES TO BE DEL ETED. 7. THE ID. A.O. HAS ALSO ERRED IN CONSIDERING AN AM OUNT OF RS. 1,85,00,000/- AS DEPOSIT IN CANARA BANK. THERE BEING NO SUCH DEPOSIT AND FURTHER ADDITION HAS BEEN MADE ON BASIS OF SEIZED PAPER, COPY OF WHICH H AVING NOT BEEN PROVIDED, THE ADDITION IS BAD IN LAW AND THUS REQUI RED TO BE DELETED. IT(SS)A NO.15 & ITA NOS.1811, 1812 & OTHERS ASST. YEAR 1.4.85 TO 23.11.95 & OTHERS 4 8. THE ID. A.O. HAS ALSO ERRED IN CONSIDERING AN AM OUNT OF RS. 5,21,000/- AS UNEXPLAINED DEPOSIT IN BANK. IN VIEW OF EXPLANATION SUBMITTED AND DEPOSITS BEING IN REGULAR BANK ACCOUNT, THE ADDITION IN THE PRESEN T BLOCK ASSESSMENT REQUIRES TO BE DELETED. 9. THE ID. A.O. HAS ALSO ERRED WHILE MAKING ADDITIO N OF RS. 3,80,000/- ON THE BASIS OF LOOSE PAPER, COPY OF WHICH HAVING NOT BEEN PROVI DED, AND THUS THE ADDITION OF RS.3,80,000/- REQUIRES TO BE DELETED. 10.THE ID. A.O. HAS ALSO ERRED IN CONSIDERING AN AM OUNT OF RS. 1,87,59,170/- BEING DEPOSIT IN THE BANK AS UNEXPLAINED. IN VIEW OF EXPL ANATION FURNISHED THE ADDITION OF RS. 1,87,59,170/- IS REQUIRED TO BE DELETED FROM BLOCK ASSESSMENT. 11. THE ID. A.O. HAS ALSO ERRED IN CONSIDERING RS. 24,45,500/- AS DEPOSITS IN BANK AS UNEXPLAINED AND UNDISCLOSED. IN VIEW OF EXPLANATION FURNISHED, THERE BEING NO UNDISCLOSED DEPOSITS, ADDITION OF RS. 24,45,500/- R EQUIRES TO BE DELETED. 12. THE ID. A.O. HAS ALSO ERRED IN CONSIDERING AN A MOUNT OF RS. 9,48,000/- DEPOSIT IN BANK AS UNDISCLOSED. IN VIEW OF THE FACTS AND DETAI LS, THE ADDITION OF RS. 9,48,000/-IS REQUIRED TO BE DELETED. 13. THE ID. A.O. HAS ALSO ERRED IN CONSIDERING RS. 5,30,728/- DEPOSITS IN BANK AS UNDISCLOSED. IN VIEW OF EXPLANATION AND DETAILS FUR NISHED, THE ADDITION OF RS. 5,30,728/- IS REQUIRED TO BE DELETED. 14. THE A.O. HAS ALSO ERRED IN CONSIDERING AN AMOUN T OF RS. 23,22,0007- DEPOSITS IN BANK AS UNEXPLAINED. IN VIEW OF THE FACTS AND DETAI LS FURNISHED, THE ADDITION OF RS. 23,22,000/- IS BAD IN LAW AND REQUIRED TO BE DE LETED. 15. THE ID. A.O. HAS ALSO ERRED IN CONSIDERING AN A MOUNT OF RS. 25,00,000/- BEING AMOUNT WITHDRAWN FROM RENCO FINANCE LTD. AS UNEXPLA INED. IN VIEW OF THE FACTS AND DETAILS FURNISHED, THE ADDITION OF RS. 25,00,00 0/- IS BAD IN LAW AND THUS REQUIRED TO BE DELETED 16. THE ID. AO. HAS ERRED IN CONSIDERING RS. 6,20,0 00/- FOR THE PURPOSE OF ADDITION WITHOUT EXPLAINING THE NATURE OF TRANSACTION AND WITHOUT PROVIDING THE COPY OF THE LOOSE PAPER ON THE BASIS OF WHICH ADDITION HAS BEEN MADE. IN VIEW OF THE FACTS AND EXPLANATION, THE ADDITION OF RS. 6,20,000/- IS REQUIRED TO BE DELETED. 17. THE ID. A.O. HAS ERRED IN CONSIDERING AN AMOUNT OF RS. 1,04,42,0007- AS UNEXPLAINED RELATING TO B. S. PANCHAL. THERE BEING NO SUCH INVESTMENT BEING MADE BY THE APPELLANT AND IN VIEW OF THE FACTS AND DETAILS FURNISHED, THE ADDITION MADE BY THE A.O. IS BASED ON SURMISES AND CONJECTUR ES AND FAR FROM THE FACTS AND THUS REQUIRED TO BE DELETED. 18. THE ID. A.O. HAS ALSO ERRED IN CONSIDERING AN A MOUNT OF RS. 9,00,000/- AS UNEXPLAINED INVESTMENT IN PURCHASE OF A CAR. THERE BEING NO SUCH INVESTMENT, THE ADDITION OF RS. 9,00,000/- IS REQUIRED TO BE DE LETED. IT(SS)A NO.15 & ITA NOS.1811, 1812 & OTHERS ASST. YEAR 1.4.85 TO 23.11.95 & OTHERS 5 19. THE ID. A.O. HAS ALSO ERRED IN CONSIDERING AN A MOUNT OF RS. 28,75,000/- ON ADHOC BASIS AS UNEXPLAINED INVESTMENT IN TWO VEHICL ES. THERE BEING NO SUCH INVESTMENT MADE BY THE APPELLANT, THE ENTIRE ADDITI ON BASED ON SURMISES AND CONJECTURES AND THUS REQUIRED TO BE DELETED. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER, MO DIFY OR DELETE ANY OF THE ABOVE GROUNDS AS WELL AS TO SUBMIT ADDITIONAL GROUN DS AT THE TIME OF HEARING OF THE APPEAL. 6. BRIEFLY STATED FACTS OF THE CASE ARE THAT A SEAR CH U/S 132 OF THE ACT WAS CONDUCTED ON 23.11.1995 IN THE CASE OF RENC O FINANCE LTD. ASSESSEE IS A DIRECTOR OF RENCO FINANCE LTD. BLOCK PERIOD OF SEARCH IS FROM 1.4.1985 TO 23.11.1995. RETURN OF INCOME WA S FILED ON 30.12.1994 DECLARING TOTAL INCOME AT RS.46,67,787/- . NOTICE U/S 158BD OF THE ACT WAS ISSUED ON 4/7/1997 AND DULY SE RVED ON THE ASSESSEE ON 2/9/1997. ASSESSMENT U/S 143(3) R.W.S 2 54 R.W.S.158BD/158BG OF THE ACT WAS COMPLETED ON 27/ 12/2011 AT TOTAL INCOME OF RS.7,32,05,849/- FOR THE BLOCK PERIOD. AS IT WAS AN EX PARTE ORDER FRAMED U/S 158BD R.W.S. 144 OF THE ACT, THE T RIBUNAL VIDE ITS ORDER IN IT(SS)A NO.266/AHD/2002 DATED 31.01.2011 S ET ASIDE THE SAME AND RESTORED THE ISSUE BACK TO THE ASSESSING O FFICER. ACCORDINGLY NOTICE U/S 143(2) OF THE ACT DATED 20/0 7/2011 WAS ISSUED FOR THE SET ASIDE PROCEEDINGS. ASSESSMENT U/S 143(3 ) R.W.S. 254 R.W.S. 158BD/158BG OF THE ACT WAS FRAMED ON 27/12/2 011 AT AN INCOME OF RS.7,32,05,849/- WHICH HAPPENED TO BE SAM E INCOME AS WAS ASSESSED EARLIER U/S 158BD R.W.S 144 DATED 28/9 /1998. 7. AGGRIEVED, ASSESSEE IS NOW IN APPEAL BEFORE THE TRIBUNAL. 8. FIRST WE TAKE UP GROUND NOS. 1 & 2, WHICH ARE AS UNDER :- IT(SS)A NO.15 & ITA NOS.1811, 1812 & OTHERS ASST. YEAR 1.4.85 TO 23.11.95 & OTHERS 6 1. THE PRESENT ASSESSMENT ORDER UNDER SECTION 143(3 ) R.W.S. 254, R.W.S. 158BD DATED 27/12/2011 IS BAD IN LAW AS THE SAME HAS BEEN PASSED WITHOUT PRIOR APPROVAL OF THE C.I.T. AND THUS REQUIRED TO BE QUAS HED. 2. THE IMPUGNED ORDER OF ASSESSMENT IS ALSO BAD IN LAW, AS THERE BEING NO SATISFACTION RECORDED AS REQUIRED UNDER SECTION 158 BD, THE PRESENT ASSESSMENT PROCEEDINGS ARE BAD IN LAW AND THUS ENTI RE ASSESSMENT REQUIRED TO BE QUASHED. 9. LD. AR SUBMITTED THAT THE ORDER PASSED UNDER SEC TION 143(3) R.W.S. 254 R.W.S. 158BD/158BG OF THE ACT ON 27/12/2 011 IS BAD IN LAW AS IT HAS BEEN PASSED WITHOUT PRIOR APPROVAL OF THE COMMISSIONER OF INCOME TAX (CIT). LD. AR FURTHER SUBMITTED THAT EX PARTE ORDER U/S 158BD/158BG R.W.S. 144 WAS PASSED WHEREIN THERE IS A MENTION THAT THE ASSESSMENT ORDER IS PASSED WITH PRIOR APPROVAL OF CIT-1, AHMEDABAD, WHEREAS IN THE IMPUGNED ASSESSMENT ORDER U/S 143(3) R.W.S 254 R.W.S.158BD/158BG OF THE ACT THERE IS NO SUCH MENTION ABOUT THE PRIOR APPROVAL OF THE CIT WHICH ITSELF MA KES THE PROCEEDINGS NULL AND VOID. FURTHER LD. AR SUBMITTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS REQUEST WAS MADE B Y ASSESSEE TO PROVIDE HIM WITH THE COPY OF THE SATISFACTION NOTE RECORDED BY THE ASSESSING OFFICER HAVING JURISDICTION OVER THE SEAR CH PERSON MENTIONING THEREIN THE DETAILS OF ASSETS/DOCUMENTS PERTAINING TO THE ASSESSEE HANDING OVER THE SAME TO THE ASSESSING OFF ICER HAVING JURISDICTION OVER THE ASSESSEE. HOWEVER, NO SUCH CO PY OF SATISFACTION FOR THE INITIATION OF PROCEEDINGS U/S 158BD/158BG O F THE ACT WAS PROVIDED BY THE LD. ASSESSING OFFICER GIVING SPECIF IC FINDING IN THE ORDER THAT THERE IS NO SUCH PROVISION IN THE ACT FO R GIVING A SATISFACTION NOTE. FURTHER LD. AR SUBMITTED THAT FROM GOING THRO UGH THE ORIGINAL IT(SS)A NO.15 & ITA NOS.1811, 1812 & OTHERS ASST. YEAR 1.4.85 TO 23.11.95 & OTHERS 7 BLOCK ASSESSMENT IT IS SEEN THAT NOTICE U/S 158BD/1 58BG OF THE ACT WAS ISSUED ON 4.7.1997 BUT THE SAME HAS BEEN CLAIME D TO BE SERVED ON 2.9.1997 AND ACCORDINGLY THE BLOCK ASSESSMENT IS COMPLETED ON 28.9.1998. THIS MAKES THE BLOCK ASSESSMENT BARRED B Y LIMITATION U/S 158BD/158BG OF THE ACT AS IT WAS TO BE COMPLETED WI THIN A PERIOD OF ONE YEAR FROM THE END OF THE MONTH IN WHICH THE NOT ICE UNDER THIS CHAPTER IS SERVED. LD. AR REFERRED AND RELIED ON TH E JUDGMENT OF HON. SUPREME COURT IN THE CASE OF MANISH MAHESHWARI VS. ACIT 289 ITR 341 (SC), JUDGMENT OF HON. JURISDICTIONAL HIGH COUR T IN THE CASE DCIT VS. LALITKUMAR M. PATEL 222 TAXMAN 96 (GUJ) UP HOLDING THE ORDER OF ITAT IN IT(SS)A 61/AHD/2007 AND THE ORDER OF THE TRIBUNAL IN IT(SS) 1, 2 & 3/AHD/2011 IN THE CASE OF SHAILESH R. DAXINI VS. ACIT DATED 22/4/2016. ALL THESE JUDGMENTS AND DECISION H AVE BEEN RELIED ON BY THE LD. AR IN RESPECT OF HIS CONTENTIONS THAT THE BLOCK ASSESSMENT NEEDS TO BE QUASHED AS NO SATISFACTION N OTE WAS PREPARED BY THE ASSESSING OFFICER OF THE SEARCHED P ERSON IN THE NAME OF ASSESSEE MENTIONING SPECIFICALLY ABOUT EACH AND EVERY SEIZED DOCUMENT/ASSETS WHICH WERE GATHERED DURING T HE SEARCH PROCEEDINGS WHICH PERTAINED TO THE ASSESSEE. 10. LD. AR FURTHER REFERRING TO THE PROVISIONS OF S ECTION 158BG OF THE ACT SUBMITTED THAT THE AUTHORITY COMPETENT TO M AKE BLOCK ASSESSMENT CANNOT PASS THE ORDER WITHOUT PREVIOUS A PPROVAL OF THE COMMISSIONER OR DIRECTOR OF INCOME-TAX. THIS SPECIF IC CONDITION HAS NOT BEEN ADHERED TO BY THE ASSESSING OFFICER WHILE FRAMING DE NOVO ASSESSMENT ORDER U/S 143(3) R.W.S. 254 R.W.S. 158BD /158BG OF THE ACT. IN SUPPORT OF HIS CONTENTION LD. AR REFERRED A ND RELIED ON THE IT(SS)A NO.15 & ITA NOS.1811, 1812 & OTHERS ASST. YEAR 1.4.85 TO 23.11.95 & OTHERS 8 JUDGMENT OF HON. SUPREME COURT AND THE DECISIONS OF THE TRIBUNAL WHEREIN IT HAS BEEN HELD THAT ONCE THE ASSESSMENT I S SET ASIDE BY HIGHER APPELLATE AUTHORITY, THE ORIGINAL ORDER GETS WIPED OFF AND ALL THE PROVISIONS OF THE ACT WHICH ARE NEEDED TO FRAME SUC H ASSESSMENT ORDER NEEDS TO BE COMPLIED WITH. LD. AR SUBMITTED T HAT - I) AS PER DECISION OF HON'BLE ITAT, BANGALORE BENCH IN THE CASE OF ACIT VS. SMT. KAMAKSHIDEVI AVARU (1993) 46 ITD 4 9 (BANG.) 'IF THE ORIGINAL ASSESSMENTS WERE OF THE NATURE OF REGU LAR-ASSESSMENTS AND THE ASSESSMENTS IN THEIR ENTIRETY, WERE SET ASI DE BY THE APPELLATE AUTHORITY FOR SOME REASON OR OTHER WITH A DIRECTION TO THE ASSESSING OFFICER TO REDO THEM, THE REASSESSMENTS DONE ACCORD INGLY WOULD SIMPLY TAKE PLACE OF THE ORIGINAL ASSESSMENTS AND S HOULD, THEREFORE, POSSESS ALL THE CHARACTERISTICS OF THE ORIGINAL ASS ESSMENTS. IN SUCH CASES, THEREFORE, THERE SHOULD BE NO REASON WHY THE SE RE- ASSESSMENTS SHOULD ALSO NOT BE CONSIDERED AS REGULA R ASSESSMENTS, ESPECIALLY WHEN THESE REASSESSMENTS ARE REQUIRED TO BE DONE ESSENTIALLY IN ACCORDANCE WITH THE PROVISIONS OF SE CTION 143(3) OR 144. HERE, THE ASSESSMENTS ARE NOT BEING DONE AFRES H IN ACCORDANCE WITH THE PROVISIONS OF SECTION 250, BUT THE ORIGINA L ASSESSMENTS ARE MERELY SET ASIDE BY THE APPELLATE AUTHORITY IN ACCO RDANCE WITH THE PROVISIONS OF SECTION 250. ONCE THE ORIGINAL ASSESS MENTS ARE SET ASIDE, ALL THE INCIDENCE PERTAINING TO THE MAKING O F THE ORIGINAL ASSESSMENTS SHOULD REAPPEAR AND THE FRESH ASSESSMEN TS THUS COMPLETED WOULD PARTAKE OF THE CHARACTER OF 'REGULA R ASSESSMENTS' ONLY.' IT(SS)A NO.15 & ITA NOS.1811, 1812 & OTHERS ASST. YEAR 1.4.85 TO 23.11.95 & OTHERS 9 II) AS PER THE BELOW MENTIONED DECISIONS, ONCE THE ORIGINAL ASSESSMENT ORDER IS SET-ASIDE BY AN APPELLATE AUTHO RITY, IT WIPES OUT THE SAID ORIGINAL ORDER. ITO V. SEOHU BUCHIAH SETTV T19641 52 ITR 538 (SC) THEREFORE IF A DEBT IS TO CEASE TO EXIST IT MUST BE BECAUSE THE SOURCE FROM WHICH IT SPRANG, NAMELY, THE ORIGINAL O RDER, HAS BEEN ANNIHILATED BY THE APPELLATE ORDER ANNULLING IT, IN FACT SECTION 31(3)(A) CONTEMPLATES AN ANNULMENT OF THE ORIGINAL ASSESSMENT ORDER ITSELF; THE DEMAND UNDER SECTION 29 OR SECTIO N 45 IS NOT ANNULLED DIRECTLY BY IT. THEREFORE, IN THE CASE OF AN ORDER OF ANNULMENT UNDER SECTION 31 THE ORIGINAL ORDER OF AS SESSMENT IS ITSELF DESTROYED. IF IT DISAPPEARS, I CANNOT CONCEI VE THE DEFAULT BASED ON IT CONTINUING IN FORCE. LIKEWISE, WHERE UN DER CLAUSE (B) OF SECTION 31(3) THE APPELLATE ORDER SETS ASIDE THE ASSESSMENT, THE SAME RESULT MUST CLEARLY FOLLOW. THERE IS NOT M UCH DIFFERENCE BETWEEN ANNULLING AN ORDER AND SETTING IT ASIDE; BO TH WIPE OUT THE ORIGINAL ORDER, INCOME TAX OFFICER VS KALVAN KUMAR ROY TRUST (20011 75 ITD 36 (CAL) I HAVE HEARD THE PARTIES AND CONSIDERED THEIR RIVAL SUBMISSIONS. AN APPARENT LOOK OF THE FIRST TWO ORDERS OF D.C.(A) OF EVEN DATE 28-4- 1988 SHOW THAT THE ASSESSMENTS APPEALED AGAINST WER E SET ASIDE. THIS IS BECAUSE IN BOTH THE ORDERS THE LAST SENTENCE IS 'IN THE RESULT THE ASSESSMENT IS SET ASIDE'. / FIND MYS ELF IN AGREEMENT WITH THE ASSESSEE'S CONTENTION THAT THE TERM 'SET A SIDE' SIMPLICITOR MAY MEAN NOTHING BUT ANNULMENT IN THE SENSE THAT IN BOTH THE CASES ASSESSMENT IS WIPED OUT. SEE IN THIS CONNECTI ON THE DECISION OF THE SUPREME COURT IN THE CASE OF SEGHU BUCHIAH SETTY(SUPRA). CONCLUSION: ONCE THE ORIGINAL ASSESSMENT ORDER IS WIPED OUT AS HELD IN THE ABOVE DECISIONS, THE AO WAS BOUND TO TAKE APPROVAL IN TER MS OF SECTION IT(SS)A NO.15 & ITA NOS.1811, 1812 & OTHERS ASST. YEAR 1.4.85 TO 23.11.95 & OTHERS 10 158BG BEFORE PASSING THE SET-ASIDE ORDER. SINCE, IT IS UNDISPUTED FACT THAT NO SUCH APPROVAL HAS BEEN OBTAINED, THE IMPUGN ED BLOCK ASSESSMENT ORDER REQUIRES TO BE QUASHED AS VOID-AB- INITIO AND BAD IN LAW. 11. ON THE OTHER HAND, LD. DR COULD NOT PLACE ANYTH ING NEW BEFORE THE TRIBUNAL. WHEN THE QUESTION WAS PROPOSED ABOUT FURNISHING OF APPROVAL OF CIT BEFORE PROCEEDINGS U/S 143(3) R.W. S. 254 R.W.S. 158BD/158BG OF THE ACT, LD. DR DENIED TO HAVE ANY S UCH PROOF OF APPROVAL BEING GRANTED BY THE CIT AND SIMILARLY COU LD NOT THROW ANY LIGHT ON THE ISSUE FOR SUPPLYING THE SATISFACTION N OTE. 12. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD AND JUDGMENTS AND DECISION REFERRED BY TH E LD. AR. IN THESE TWO GROUNDS RAISED BY THE ASSESSEE IT IS CONTEMPLAT ED THAT THE BLOCK ASSESSMENT ORDER U/S 143(3) R.W.S. 254 R.W.S. 158BD /158BG OF THE ACT ON 27/12/2011 IS BAD IN LAW AS THE SAME HAS BEE N PASSED WITHOUT PRIOR APPROVAL OF COMMISSIONER AND ALSO NO SATISFACTION WAS RECORDED AS REQUIRED U/S 158BG/158BD OF THE ACT RES PECTIVELY. WE OBSERVE THAT SEARCH IN THE CASE OF RENCO FINANCE LT D. WAS CONDUCTED ON 23.11.1995. DURING THE COURSE OF SEARC H CERTAIN DOCUMENTS/ASSETS RELATING TO THE DIRECTOR OF THE CO MPANY I.E. ASSESSEE SHRI GAUTAM A. PARMAR WERE ALSO SEIZED AND THE SAME WERE HANDED OVER TO THE ASSESSING OFFICER HAVING JU RISDICTION OVER THE ASSESSEE ON 4.7.1997. DURING THE COURSE OF ASSE SSMENT PROCEEDINGS ASSESSEE REQUESTED FOR A COPY OF THE SA TISFACTION NOTE RECORDED BY THE ASSESSING OFFICER WHICH NEEDS TO BE DONE BEFORE INITIATING PROCEEDINGS U/S 158BD OF THE ACT BUT THE REQUEST OF THE IT(SS)A NO.15 & ITA NOS.1811, 1812 & OTHERS ASST. YEAR 1.4.85 TO 23.11.95 & OTHERS 11 ASSESSEE WAS NOT ACCEPTED BY ASSESSING OFFICER WITH SPECIFIC OBSERVATION THAT THERE IS NO SUCH PROVISIONS IN THE ACT. 13. WE FURTHER OBSERVE THAT SIMILAR ISSUE CAME UP B EFORE THE CO- ORDINATE BENCH IN THE CASE OF LALITKUMAR M. PATEL ( SUPRA) WHICH WAS UPHELD BY HON. JURISDICTIONAL HIGH COURT, WHEREIN I T WAS OBSERVED AS UNDER :- 8. THE LEARNED COUNSEL FOR THE ASSESSEE HAS CHALLE NGED THE VALIDITY OF THE INITIATION OF THE PROCEEDINGS UNDER SECTION 158 BD MAINLY ON TWO COUNTS (I) THAT THE PROCEEDINGS WERE INITIATED AF TER COMPLETION OF THE ASSESSMENT IN THE CASE OF JAYARAJ GROUP OF CASES AN D (II) DURING THE ASSESSMENT PROCEEDINGS OF JAYRAJ GROUP NO SATISFACT ION WAS RECORDED BY THE AO OF JAYARAJ GROUP BUT REASONS WAS RECORDED BY THE AO OF THE ASSESSEE FOR ISSUING OF NOTICE UNDER SECTION 158BD. IN SUPPORT OF HIS CONTENTION, HE RELIED UPON THE DECISION OF THE HON BLE APEX COURT IN THE CASE OF MANISH MAHESHWARI VS. ACIT, 289 ITR 341 AND SPECIAL BENCH OF THE ITAT IN THE CASE OF MANOJ AGARWAL VS. DCIT, 113 ITD 377. THE LEARNED DR, ON THE OTHER HAND, RELIED UPON THE ORDE RS OF THE AUTHORITIES BELOW AND STATED THAT THE SATISFACTION RECORDED BY THE AO UNDER SECTION 158BC IS A VALID SATISFACTION BECAUSE THE PERSONS W HO RECORDED THE SATISFACTION WAS THE AO FOR JAYARAJ GROUP OF CASES AS WELL AS THE ASSESSEE. HE ALSO SUBMITTED THAT NOTICE UNDER SECTI ON 158BD WAS DULY ISSUED BEFORE THE COMPLETION OF THE ASSESSMENT UNDE R SECTION 158BC READ WITH SECTION 263, IN THE JAYRAJ GROUP OF CASES . 9. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED BEFORE US. THE PROVISIONS OF SECTION 158BD HAS BEEN CONSIDERED BY THE HONBLE APEX COURT IN THE CASE OF MANISH MAHESHWARI (SUPRA). AT PAGE NO.348 OF THE REPORT, THEIR LORDSHIPS HELD AS UNDER : THE CONDITION PRECEDENT FOR INVOKING A BLOCK ASSES SMENT IS THAT A SEARCH HAS BEEN CONDUCTED UNDER SECTION 132, OR DOC UMENTS OR ASSETS HAVE BEEN REQUISITIONED UNDER SECTION 132A. THE SAID PROVISION WOULD APPLY IN THE CASE OF ANY PERSON IN RESPECT OF WHOM SEARCH HAS BEEN CARRIED OUT UNDER SECTION 132A OR D OCUMENTS OR ASSETS HAVE BEEN REQUISITIONED UNDER SECTION 132A. SECTION 158BD, HOWEVER, PROVIDES FOR TAKING RECOURSE TO A B LOCK ASSESSMENT IN TERMS OF SECTION 158BC IN RESPECT OF ANY OTHER PERSON, THE CONDITIONS PRECEDENT WHEREFOR ARE : (I) SATISFACTION MUST IT(SS)A NO.15 & ITA NOS.1811, 1812 & OTHERS ASST. YEAR 1.4.85 TO 23.11.95 & OTHERS 12 BE RECORDED BY THE ASSESSING OFFICER THAT ANY UNDIS CLOSED INCOME BELONGS TO ANY PERSON, OTHER THAN THE PERSON WITH R ESPECT TO WHOM SEARCH WAS MADE UNDER SECTION 132 OF THE ACT ; (II) THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR ASSETS SEIZED OR REQU ISITIONED HAD BEEN HANDED OVER TO THE ASSESSING OFFICER HAVING JU RISDICTION OVER SUCH OTHER PERSON ; AND (III) THE ASSESSING OFFICER HAS PROCEEDED UNDER SECTION 158BC AGAINST SUCH OTHER PERSON. THE CONDITIONS PRECEDENT FOR INVOKING THE PROVISION S OF SECTION 158BD, THUS, ARE REQUIRED TO BE SATISFIED BEFORE TH E PROVISIONS OF THE SAID CHAPTER ARE APPLIED IN RELATION TO ANY PER SON OTHER THAN THE PERSON WHOSE PREMISES HAD BEEN SEARCHED OR WHOSE DO CUMENTS AND OTHER ASSETS HAD BEEN REQUISITIONED UNDER SECTI ON 132A OF THE ACT. 10. THAT THE SPECIAL BENCH OF THE ITAT IN THE CASE OF MANOJ AGGARWAL (SUPRA) HAS CONSIDERED THE ABOVE DECISION OF THE HO NBLE APEX COURT AND ALSO OTHER DECISIONS OF VARIOUS COURTS AND EXAMINED IN DETAIL THE CONDITIONS WHICH ARE TO BE SATISFIED BEFORE THE ISS UE OF NOTICE UNDER SECTION 158BD. THE SPECIAL BENCH HELD AS UNDER: SECTION 158BD PROVIDES FOR ASSUMPTION OF JURISDICT ION TO MAKE A BLOCK ASSESSMENT IN THE CASE OF A PERSON NOT SEARCH ED AND AGAINST WHOM NO PROCEEDINGS HAVE BEEN INITIATED. IT CANNOT BE SAID THAT SUCH JURISDICTION CAN BE ASSUMED WITHOUT RECORDING SATISFACTION. IT HAS TOTE NOTED THAT THE PROCEEDINGS UNDER SECTION 1 58BC ARE AGAINST THE PERSON SEARCHED AND IF IN THE COURSE OF SUCH PROCEEDING THE ASSESSING OFFICER ASSESSING THE PERS ON SEARCHED COMES ACROSS MATERIAL INDICATING THE PRESENCE OF UN DISCLOSED INCOME IN THE HANDS OF THE PERSON NOT SEARCHED, THE RE HAS TO BE A PROVISION FOR MAKING A SIMILAR ASSESSMENT IN THE CA SE OF THE OTHER PERSON. AS SECTION 158BC RELATES TO A PERSON SEARCH ED THERE HAS TO BE DIFFERENT PROVISION FOR MAKING A SIMILAR ASSE SSMENT IN THE CASE OF THE OTHER PERSON AND HENCE SECTION 158BD HA S BEEN ENACTED. SO, THE SAID SECTION STATES THAT IF THE AS SESSING OFFICER IS SATISFIED THAT THE UNDISCLOSED INCOME BELONGS TO TH E OTHER PERSON, THEN HE SHALL HAND OVER THE SEIZED MATERIAL SO AS T O ENABLE THE SECOND ASSESSING OFFICER TO MAKE A BLOCK ASSESSMENT IN A SIMILAR MANNER AND THAT IS NOT POSSIBLE IF THE SATISFACTION IS NOT RECORDED. AND THIS CAN BE RECORDED ONLY AND ONLY IN THE COURS E OF THE SECTION 158BC PROCEEDING AND NOWHERE ELSE. IT IS THE ASSESS ING OFFICER ASSESSING THE PERSON SEARCHED WHO GOES, THROUGH THE SEIZED MATERIAL AND COMES TO A DECISION AS TO WHETHER THER E IS ANY UNDISCLOSED INCOME UNEARTHED AS A RESULT OF SEARCH, IF SO ITS NATURE AND TO WHOM IT BELONGS. IF THE SAID UNDISCLOSED INC OME BELONGS TO THE PERSON SEARCHED THAT IS THE END OF THE MATTER. IF, ON THE OTHER IT(SS)A NO.15 & ITA NOS.1811, 1812 & OTHERS ASST. YEAR 1.4.85 TO 23.11.95 & OTHERS 13 HAND, THE MATERIAL EXAMINED SHOWS THAT THE UNDISCLO SED INCOME PERTAINS TO SOME OTHER PERSON HE HAS TO GIVE A FIND ING TO THIS EFFECT AND THEREUPON TRANSMIT THE RELATED SEIZED MATERIAL TO THE ASSESSING OFFICER HAVING JURISDICTION OVER THE OTHER PERSON. ALL THESE FINDINGS HAVE TO BE RECORDED AFTER AN HONEST APPRECIATION OF THE SEIZED MATERIAL WITH AN OBJECTIVE MIND AND THERE HAS TO BE A RECORD REFLECTING SUCH FINDINGS ON THE BASIS OF WHICH ALON E THE OTHER ASSESSING OFFICER CAN ASSUME JURISDICTION TO PROCEE D AGAINST THE OTHER PERSON AND IT IS THIS RECORD WHICH FORMS THE 'NOTE OF SATISFACTION' OR THE 'RECORD OF SATISFACTION. IN S UCH CIRCUMSTANCE, THE RECORDING OF SUCH SATISFACTION IS IMPLIEDLY TO BE D ONE IN THE COURSE OF THE SECTION 158BC PROCEEDING AS THE SATISFACTION HAS TO BE RECORDED ONLY BY THE ASSESSING OFFICER MAKING THE B LOCK ASSESSMENT IN THE CASE OF THE PERSON SEARCHED WHICH IN TURN MEANS THE SECTION 158BC PROCEEDINGS SUCH SATISFACTI ON CANNOT BE RECORDED BEYOND THE DATE OF THE BLOCK ASSESSMENT IN THE SECTION 158BC PROCEEDING AND THE DATE OF THE BLOCK ASSESSME NT IS THE OUTER LIMIT FOR RECORDING SUCH SATISFACTION. THIS I S FOR THE REASON THAT THE SATISFACTION HAS TO BE RECORDED BY THE ASSESSIN G OFFICER EXAMINING THE MATERIAL IN THE CASE OF THE PERSON SE ARCHED AND HE WILL HAVE TO FIND OUT WHETHER THERE IS ANY UNDISCLO SED INCOME AT ALL UNEARTHED WHICH AGAIN CAN ONLY BE IN THE COURSE OF SUCH PROCEEDING. AFTER FINDING THAT THERE IS UNDISCLOSED INCOME, HE WILL HAVE TO GIVE A FINDING AS TO WHETHER SUCH INCOME BE LONGS TO THE PERSON SEARCHED AND THIS TOO HAS TO BE IN THE COURS E OF THE SAID PROCEEDING ONLY. IF HE FINDS THAT ANY OR ALL OF SUC H INCOME BELONGS TO A PERSON NOT SEARCHED, THEN HE HAS TO RECORD SUC H FINDING IN THIS BEHALF AND TAKES FOLLOW-UP ACTION AS ENVISAGED IN S ECTION 158BD WHICH AGAIN HAS TO BE ONLY IN THE COURSE OF SECTION 158BC PROCEEDING AND, HENCE, IF NO SUCH SATISFACTION IS R ECORDED IN COURSE OF SECTION 158BC PROCEEDING, THEN ASSUMPTION OF JUR ISDICTION UNDER SECTION 158BD IS NOT POSSIBLE. IN THE CIRCUMSTANCES , THE ABSENCE OF THE WORDS 'IN THE COURSE OF THE PROCEEDING IN THE SECTION IS NO MATERIAL TO THE ISSUE IN THE CONTEXT OF THE SAID SE CTION ITSELF. 11. LET US EXAMINE THE FACTS OF THE ASSESSEES CAS E IN THE LIGHT OF THE ABOVE DECISION OF THE HONBLE APEX COURT AND THE SP ECIAL BENCH OF THE ITAT. AS PER THE DECISION OF THE HONBLE APEX COURT , BEFORE THE ISSUE OF NOTICE UNDER SECTION 158BD, SATISFACTION MUST BE RE CORDED BY THE AO OF THE PERSON SEARCHED, THAT THE UNDISCLOSED INCOME BE LONGS TO THE PERSON OTHER THAN THE PERSON SEARCHED AND THEN BOOKS OF AC COUNTS OR OTHER DOCUMENTS SEIZED HAS TO BE HANDED OVER TO THE AO OF THE PERSON TO WHOM THE UNDISCLOSED INCOME BELONGS. THEREAFTER ON THE B ASIS OF SUCH SATISFACTION, THE AO OF THE PERSONS TO WHOM THE UND ISCLOSED INCOME BELONGS WILL TAKE PROCEEDINGS UNDER SECTION 158BD. SPECIAL BENCH OF THE ITAT HAS FURTHER HELD THAT SUCH SATISFACTION BY THE AO OF THE PERSON IT(SS)A NO.15 & ITA NOS.1811, 1812 & OTHERS ASST. YEAR 1.4.85 TO 23.11.95 & OTHERS 14 SEARCHED HAS TO BE RECORDED IN THE COURSE OF PROCEE DINGS UNDER SECTION 158BC AND NOT THEREAFTER. MEANING THEREBY, THE SATI SFACTION MUST BE RECORDED BEFORE THE COMPLETION OF THE ASSESSMENT OF THE PERSON SEARCHED. NOW IN THE CASE OF THE ASSESSEE WE HAVE R EPRODUCED THE SATISFACTION NOTE IN PARA-7 ABOVE. 12. FROM THE SATISFACTION NOTE, IT SEEMS THAT IT I S RECORDED BY THE AO OF THE ASSESSEE AND NOT THE AO OF JAYRAJ GROUP OF CASE S. THIS INFERENCE OF OURS IS ON THE FOLLOWING BASIS: I) HEADING OF THE NOTE IS REASONS FOR ISSUE OF NO TICE U/S.158BD OF THE ACT. THUS, IT IS THE REASONS RECO RDED BY THE AO BEFORE THE ISSUE OF NOTICE UNDER SECTION 158 BD. OBVIOUSLY, THE REASON IS RECORDED BY THE AO WHO ISS UED THE NOTICE UNDER SECTION 158BD. IT SEEMS THAT THE AO CONSIDERED THE PROVISION OF SECTION 158BD SIMILAR T O SECTION 148 AND THEREFORE BEFORE THE ISSUE OF NOTICE, HE RE CORDED THE REASONS FOR ISSUING OF SUCH NOTICE. II) THE NAME OF THE ASSESSEE MENTIONED IN THE SATI SFACTION NOTE IS SHRI UPENDRA N. PATEL, SHRI LALIT M. PATEL & SHR I CHAMPAK M. PATEL. THUS, THE REASON IS RECORDED IN THE CASE OF THESE ASSESSEE AND NOT IN THE CASE OF JAYRAJ GROUP OF CAS ES. HAD THE SATISFACTION RECORDED BY THE AO OF JAYRAJ GROUP OF CASES, THEN THE NAME OF THE ASSESSEE WOULD HAVE BEE N JAYRAJ GROUP OF CASES AND NOT AS SHRI UPENDRA N. PATEL, SHRI LALIT M. PATEL & SHRI CHAMPAK M. PATEL. III) IN THE FIRST LINE OF THE SATISFACTION NOTE, T HE AO HAS MENIONED THE SEARCH AND SEIZURE ACTION IN THE JAYRAJ GROUP OF CASES WAS CARRIED OUT UNDER SECTION 132(1) ON 19-12-2001 . IF THE SATISFACTION NOTE WAS RECORDED BY THE AO OF JAYRAJ GROUP OF CASES, HE WOULD HAVE MENTIONED A SEARCH AND SEIZUR E ACTION HAS TAKEN PLACE IN THE CASE OF THE ASSESSEE. IV) AT THE END OF THE NOTICE, THE AO HAS MENTIONED SINCE THIS FACT COULD BE DISCOVERED FROM THE VARIOUS MOUS SEIZ ED DURING THE COURSE OF SEARCH IN JAYRAJ GROUP, THE NO TICES U/S.158BD ARE ISSUED TO THE ASSESSEES. THIS NOTING CLEARLY PROVES THAT THE REASON WAS RECORDED BY THE AO OF SH RI LALIT M. PATEL AND NOT OF THE AO OF JAYRAJ GROUP. IF THE SATISFACTION HAS BEEN RECORDED BY THE AO OF JAYRAJ GROUP CASES, HE WOULD HAVE MENTIONED THAT DURING THE COURSE OF SEA RCH IN THE CASE OF THE ASSESSEE, VARIOUS MOUS BELONGED TO SHRI UPENDRA N. PATEL, SHRI LALIT M. PATEL & SHRI CHAMPA K M. IT(SS)A NO.15 & ITA NOS.1811, 1812 & OTHERS ASST. YEAR 1.4.85 TO 23.11.95 & OTHERS 15 PATEL WERE FOUND. THE SAME ARE BEING FORWARDED TO T HEIR AO FOR TAKING ACTION UNDER SECTION 158BD IN THEIR CASE S. IN VIEW OF THE ABOVE, WE ARE OF THE OPINION THAT TH E SATISFACTION WAS RECORDED BY THE AO OF THE ASSESSEE AND NOT BY THE A O OF THE PERSON SEARCHED. AS PER THE DECISION OF THE HONBLE APEX C OURT IN THE CASE OF MANISH MAHESHWARI (SUPRA) AS WELL AS SPECIAL BENCH DECISION IN THE CASE OF MAJOJ AGGARWAL (SUIPRA), THE SATISFACTION IS TO BE RECORDED BY THE AO OF THE PERSONS SEARCHED THAT TOO DURING THE COURSE OF ASSESSMENT PROCEEDINGS UNDER SECTION 158BC OF THE PERSON SEARC HED. 13. THAT THE REASONS RECORDED FOR ISSUE OF NOTICE UNDER SECTION 158BC WAS DATED 23-2-2004,WHILE THE ASSESSMENT OF JAYRAJ GROUP WAS ORIGINALLY COMPLETED UNDER SECTION 158BC ON 30-1-2004. THAT TH EREAFTER UNDER SECTION 263 SUCH ORDER WAS SET ASIDE AND FRESH ASSE SSMENT ORDER WAS PASSED ON 29-12-2006. HOWEVER, IT IS NOT THE CASE O F THE REVENUE THAT THE ORDER UNDER SECTION 263 WAS PASSED WITH REGARD TO S OME FINDING PERTAINING TO UNDISCLOSED INCOME OF THE ASSESSEE VI Z. SHRI LALIT M. PATEL. IN THE FRESH ASSESSMENT ORDER PASSED IN PURSUANCE O F SECTION 263 ALSO THERE IS NO MENTION WITH REGARD TO UNDISCLOSED INCO ME, IF ANY BELONGED TO SHRI LALIT M. PATEL. 14. IN VIEW OF THE TOTALITY OF THE ABOVE FACTS, WE ARE OF THE OPINION THAT THE REASONS RECORDED FOR ISSUE OF NOTICE UNDER SECT ION 158BD BY THE AO OF THE ASSESSEE CANNOT BE SAID TO BE VALID SATISFAC TION FOR ISSUE OF NOTICE UNDER SECTION 158BD, WE THEREFORE RESPECTFULLY FOLL OWING THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF MANISH MAHESH WARI (SUPRA) AND THE DECISION OF THE SPECIAL BENCH OF THE ITAT IN THE CA SE OF MANOJ AGGARWAL (SUPRA), HOLD THAT THE ISSUE OF NOTICE UNDER SECTIO N 158BD IN THE CASE OF THE ASSESSEE WAS NOT VALID. WE QUASH THE SAME. ONCE THE NOTICE UNDER SECTION 158BD ITSELF IS QUASHED, THE ASSESSMENT ORD ER PASSED UNDER SECTION 158BC IN PURSUANCE TO THE NOTICE ISSUED UND ER SECTION 158BD IS ALSO QUASHED. 14. FURTHER THE CO-ORDINATE BENCH IN THE CASE OF SH AILESH R. DAXINI VS. ACIT (SUPRA) HAS DEALT WITH SIMILAR ISSUE WHERE IN NO SATISFACTION NOTE WAS PREPARED BY THE ASSESSING OFFICER OF THE S EARCHED PERSON AND ALSO NO SUCH COPY OF SATISFACTION NOTE WAS PROV IDED TO THE ASSESSEE BY THE ASSESSING OFFICER HAVING THE JURISD ICTION OVER THE ASSESSEE. THE CO-ORDINATE BENCH HAS OBSERVED AS BEL OW :- IT(SS)A NO.15 & ITA NOS.1811, 1812 & OTHERS ASST. YEAR 1.4.85 TO 23.11.95 & OTHERS 16 12. WE HAVE HEARD RIVAL SUBMISSIONS. CASE FILES ST ANDS PERUSED. THERE IS NO DISPUTE THAT THIS ASSESSEE IS NOT THE ONE SEARCHED SINCE THE IMPUGNED PROCEEDINGS ARE UNDER SECTION 153C OF THE ACT CONDU CTED ON 25.03.2008 IN CASE OF M/S. KUNVARJI COMMODITIES BROKERS PVT. LTD. THE RE IS FURTHER NO ISSUE THAT THE DCIT CENTRAL CIRCLE 1(1) IS THE COMMON ASSESSING AU THORITY IN CASE OF BOTH THE ASSESSEES. THE LEGAL POSITION ENVISAGED UNDER SECT ION 153C OF THE ACT IS VERY CLEAR THAT THE ASSESSING OFFICER OF THE SEARCHED AS SESSEE HAS TO SATISFY HIMSELF THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABL E ARTICLES ETC. BELONGS TO SOME OTHER PERSONS AND NOT THE SEARCHED ASSESSEE. THIS HAS TO BE FOLLOWED BY ANOTHER EXERCISE IN CASE OF SUCH OTHER ASSESSEE THA T THE SAME IS CAUSED ESCAPEMENT OF ANY INCOME. IT IS AT THIS STAGE THAT BOTH PARTIES HAVE CROPPED UP THE INSTANT ISSUE. THE ASSESSEES CASE IS THAT THE RE IS NO SATISFACTION AT FIRST LEVEL IN CASE OF THE SEARCHED ENTITY OPPOSED BY THE REVEN UE BY SAYING THAT THE ASSESSING OFFICER IS THE SAME WHO HAS EXPRESSED SAT ISFACTION IN ASSESSEES CASE. THE LAW ABOUT ENTERING OF SUCH A SATISFACTIO N IS VERY WELL SETTLED NOW. HONBLE APEX COURT IN THE CASE OF MANISH MAHESHWARI VS. ACIT (2007) 289 ITR 341 (SC) HOLDS THAT SUCH A SATISFACTION IS INDEED M ANDATORY. WE DEEM IT APPROPRIATE TO OBSERVE THAT THIS CASE DEALT WITH BL OCK ASSESSMENT SCHEME UNDER SECTION 158BD OF THE ACT AS IT EXISTED IN THE ERSTW HILE AVATAR UNDER CHAPTER XIV- B OF THE ACT. THE SAME STANDS REPEALED BY NEWLY IN SERTED SECTIONS 153A TO 153C BY THE FINANCE ACT 2003. IT COMES TO OUR NOTI CE THAT THE CENTRAL BOARD OF DIRECT TAXES HAS ISSUED ITS CIRCULAR NO.24 OF 2015 ALREADY ACCEPTING THAT RIGOR OF SECTION 153C VIS-A-VIS 158BD IS SUBSTANTIALLY SIMIL AR/PARI MATERIA AS HELD BY VARIOUS HONBLE COURTS. IT FURTHER CLARIFIES THAT RECORDING OF SECTION 153C/158BD SATISFACTION IS A MUST IN CASE OF SEARCHED PERSON F OLLOWED BY TRANSMISSION OF THE CASE RECORDS TO THE ASSESSING OFFICER OF THE OTHER ASSESSEE. PARA NO.4 OF THIS CIRCULAR FURTHER ENVISAGES THAT THIS DUAL EXERCISE IS TO BE COMPLIED WITH EVEN IF THE ASSESSING OFFICER HAPPENS TO BE THE SAME IN BOT H CASES. WE DEEM IT APPROPRIATE TO OBSERVE IN THIS FACTUAL AND LEGAL BA CKDROP THAT AN ASSESSING OFFICER HAS TO MANDATORILY FOLLOW THE ABOVE STATED DUAL SATISFACTION EXERCISE BEFORE INITIATING SECTION 153C PROCEEDINGS. WE FIN D THAT NEITHER THE JURISDICTIONAL TRIBUNALS DECISION NOR THAT OF KOLKATA BENCH (SUPR A) DEVIATE FROM THIS PRINCIPLE. THE FORMER DEALS WITH A SITUATION WHEREIN THE DEPAR TMENT CARRIED OUT A SEARCH IN CASE M/S. JAIRAJ GROUP, FOLLOWED BY ASSESSING OFFIC ERS ACTION RECORDING SATISFACTION FORMING BASIS FOR INITIATING SECTION 1 53C PROCEEDINGS IN CASE OF A THIRD PARTY WITHOUT FOLLOWING THE FIRST HURDLE OF S ATISFACTION THAT THE MONEY, BULLION OR JEWELLERY ETC. BELONGED TO SOME THIRD PERSON AND NOT THE SEARCHED PARTY. THE LATTER DECISION PRECEDES A STEP FURTHER. IT HOLDS THAT THE ASSESSING OFFICER IN CASE OF SEARCHED AND THIRD PARTY IS THE SAME. AND IT IS VERY DIFFICULT TO CREATE A DISTINCTION TO FIND OUT WHEN SUCH SATISFACTION WAS RECORDED SINCE BOTH FILES WERE LYING TOGETHER ON THE ASSESSING AUTHORITYS TABLE. IT IS THEREFORE CLEAR TO US THAT THERE IS NO DISTINCTION ON LEGAL PRINCIPLE OF THE S ATISFACTION PRECONDITION BEFORE INITIATION OF SECTION 153C PROCEEDINGS IN BOTH THES E DECISIONS. THE LATTER DECISION IS OF THE VIEW THAT THE TIMING OF THIS SAT ISFACTION BEING RECORDED IN CASE OF SEARCHED ASSESSEE AND THIRD PARTY IS PURELY A FA CTUAL ISSUE. WE DEEM IT IT(SS)A NO.15 & ITA NOS.1811, 1812 & OTHERS ASST. YEAR 1.4.85 TO 23.11.95 & OTHERS 17 APPROPRIATE TO OBSERVE THAT THERE IS NO MUTUAL CONT RADICTION SO FAR AS RATIO OF THESE TRIBUNALS DECISIONS IS CONCERNED. 13. WE TAKE NOTE OF OUR DISCUSSION HEREINABOVE AND REVERT BACK TO FACTS OF THE INSTANT CASE. WE REITERATE THAT THE ASSESSEES CAS E IS THAT ONCE THE ASSESSING OFFICER DOES NOT SPECIFICALLY RECORD SATISFACTION I N SEARCHED ENTITYS CASE THAT THE MONEY, BULLION, JEWELLERY ETC. IN QUESTION BELONGS TO A THIRD PERSON, PLACES THE SAME IN ITS FILE FOLLOWED BY AN OPINION OF THE ABO VE STATED MATERIAL HAVING CAUSED ESCAPEMENT OF ANY INCOME. IT IS ACCORDINGLY ARGUED THAT THE IMPUGNED SATISFACTION DOES NOT ADHERE TO ABOVE STATED SETTLE D LAW. THE REVENUE ON THE OTHER HAND MAKES OUT A CASE THAT THE ASSESSING OFFI CERS SATISFACTION HAS COME ONLY AFTER CAREFUL EXAMINATION OF THE ABOVE STATED INCRIMINATING MATERIAL BEING EXAMINED TOGETHER IN THE CASES OF M/S. KUNVARJI AS WELL AS THE ASSESSEE. WE FIND NO REASON TO AGREE WITH THIS CONTENTION. AS O BSERVED BY THE LEARNED CO- ORDINATE BENCH IN LALIT KUMAR M. PATELS CASE, THE ASSESSING OFFICER IN THE IMPUGNED SATISFACTION MENTIONS ONLY ASSESSEES NAME ON TOP OF THE SATISFACTION NOTE AND NOT THAT OF THE SEARCHED ENTITY. THERE IS NO MATERIAL PLACED ON RECORD BEFORE US THAT THE ASSESSING OFFICER HAD KEPT THE C ASE FILES OF THE SEARCHED PARTY AND THAT OF THE ASSESSEE TOGETHER BEFORE DRAWING TH E IMPUGNED SATISFACTION NOTE. IT IS MADE CLEAR THAT THE REVENUES CONTENTION BASE D ON KOLKATA BENCH DECISION OF THE TRIBUNAL PUTS A HEAVY ONUS ON THE DEPARTMENT TO POSITIVELY PROVE THAT THE SAME ASSESSING OFFICER IN CASE OF SEARCHED ASSESSEE AS WELL AS THE THIRD PARTY HAD COLLECTIVELY EXAMINED THE CASE FILES BEFORE REC ORDING A SATISFACTION NOTE CONTEMPLATED UNDER SECTION 153C OF THE ACT. NEEDLE SS TO SAY, THIS BURDEN STANDS UN-DISCHARGED. WE HOLD IN THESE PECULIAR FA CTS AND CIRCUMSTANCES THAT THE REVENUES ARGUMENTS JUSTIFYING THE IMPUGNED SAT ISFACTION NOTE ARE DEVOID OF MERITS BEING NOT SUPPORTED BY ANY EVIDENCE MUCH LES S IN THE NATURE OF SUBSTANTIVE MATERIAL. WE CONCLUDE IN VIEW OF THE A BOVE STATED LEGAL POSITION, BOARDS CIRCULAR AND OUR DISCUSSION HEREINABOVE THA T THE ASSESSING OFFICER HAS NOT RECORDED A VALID SATISFACTION BEFORE INITIATING SECTION 153C PROCEEDINGS IN QUESTION. THE IMPUGNED ASSESSMENT IS ACCORDINGLY QU ASHED. IT(SS)A NO.01/AHD/2011 IS ALLOWED. 15. FROM GOING THROUGH THE JUDGMENT OF HON. APEX CO URT IN THE CASE OF MANISH MAHESHWARI VS. ACIT (SUPRA) AS DULY CONSIDERED BY THE CO-ORDINATE BENCH IN THE CASE OF DCIT VS. LALIT KUMAR M. PATEL (SUPRA) UPHELD BY THE HON. JURISDICTIONAL HIGH COUR T AND THE DECISION OF CO-ORDINATE BENCH IN THE CASE OF SHAILESH P. DAX INI (SUPRA) WHEREIN UNIFORM VIEW HAS BEEN TAKEN TAKING RECOURSE WITH THE BLOCK ASSESSMENT U/S 158BD/158BG OF THE ACT THE PRECEDING CONDITIONS IT(SS)A NO.15 & ITA NOS.1811, 1812 & OTHERS ASST. YEAR 1.4.85 TO 23.11.95 & OTHERS 18 ARE THAT FIRSTLY SATISFACTION MUST BE RECORDED BY T HE ASSESSING OFFICER OF THE SEARCHED PERSON THAT ANY UNDISCLOSED INCOME BELONGS TO ANY PERSON OTHER THAN THE PERSON WHO HAS BEEN SEARCHED U/S 132 OF THE ACT AND SECONDLY DOCUMENTS OR ASSETS OR BOOKS OF AC COUNTS SEIZED IN RELATION TO SUCH OTHER PERSONS HAVE BEEN HANDED OVE R TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTH ER PERSON. EXAMINING THE FACTS OF THE CASE IN LIGHT OF ABOVE D ISCUSSION, WE FIND THAT THERE IS NO DISPUTE TO THIS FACT THAT NO SUCH SATISFACTION NOTE WAS PROVIDED TO THE ASSESSEE WHICH HAS BEEN SPECIFICALL Y MENTIONED BY THE ASSESSING OFFICER IN HIS ASSESSMENT ORDER AND A LSO REVENUE HAS NOT PLACED ON RECORD THE COPY OF SATISFACTION NOTE, IF ANY, MADE. IN ALL, THE JUNCTURE AT WHICH PROCEEDINGS U/S 158BD OF THE ACT COMMENCED FOR BLOCK ASSESSMENT OF A PERSON OTHER TH AN THE SEARCHED PERSON, ASSESSING OFFICER COMPLETELY FAILE D TO SATISFY THE PROVISIONS OF SECTION 158BD OF THE ACT. WE ARE, TH EREFORE, OF THE VIEW THAT THE IMPUGNED ASSESSMENT ORDER FOR THE BLO CK PERIOD PASSED UNDER SECTION 143(3),R.W.S. 254 R.W.S. 158BD OF THE ACT NEEDS TO BE QUASHED IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE WHEREIN NO SATISFACTION HAS BEEN RECORDED AS PER THE PROVISION S OF SECTION 158BD OF THE ACT BEFORE FRAMING THE BLOCK ASSESSMEN T. WE QUASH THE BLOCK ASSESSMENT ORDER. ACCORDINGLY, GROUND NO. 2 OF ASSESSEES APPEAL IS ALLOWED. 16. AS FAR AS GROUND NO.1 IS CONCERNED THROUGH WHIC H ASSESSEE HAS PLEADED THAT ASSESSMENT U/S 143(3) R.W.S. 254 R .W.S. 158BD OF THE ACT NEEDS TO BE QUASHED AS IT HAS BEEN PASSED W ITHOUT PRIOR APPROVAL OF THE COMMISSIONER OF INCOME-TAX. LD. AR PLEADED THAT IN IT(SS)A NO.15 & ITA NOS.1811, 1812 & OTHERS ASST. YEAR 1.4.85 TO 23.11.95 & OTHERS 19 THE FIRST ROUND OF ASSESSMENT NECESSARY APPROVAL WA S TAKEN FROM THE COMMISSIONER OF INCOME-TAX FOR FRAMING THE ASSESSME NT UNDER SECTION 158BD OF THE ACT. HOWEVER, IN THE SECOND RO UND OF ASSESSMENT POST THE DECISION OF CO-ORDINATE BENCH I N ASSESSEES CASE FOR FRAMING DE NOVO ASSESSMENT ORDER, NECESSAR Y APPROVAL AS REQUIRED U/S 158BG WAS NOT TAKEN. AS WE HAVE ALREAD Y QUASHED THE BLOCK ASSESSMENT PROCEEDINGS PASSED U/S 143(3) R.W. S. 254 R.W.S. 158BD OF THE ACT WHILE ADJUDICATING GROUND NO. OF A SSESSEES APPEAL IT WILL BE ACADEMIC TO ADJUDICATE GROUND NO.1 RAISE D AT THE BEHEST OF ASSESSEE CHALLENGING THE ASSESSMENT PROCEEDINGS U/S 158BD OF THE ACT FOR NON-COMPLIANCE OF SECTION 158BG OF THE ACT. ACCORDINGLY, WE DISMISS GROUND NO.1 OF ASSESSEES APPEAL. 17. REMAINING GROUND NOS. 3 TO 19 NEED NO ADJUDICA TION ON MERITS AND SO BECOME INFRUCTUOUS AS WE HAVE QUASHED THE IM PUGNED ASSESSMENT ORDER WHILE ADJUDICATING GROUND NOS. 1 & 2 OF THE APPEAL, WE DISMISS THE GROUND NOS. 3 TO 19 AS INFRUCTUOUS. IT(SS)A NO.15/AHD/2012 IS ALLOWED. 18. NOW WE TAKE ASSESSEES APPEALS IN ITA NOS. 1811 , 182 & 183/AHD/2012 FOR ASST. YEARS 1991-92, 1992-93 & 199 3-94 RESPECTIVELY. COMMON ISSUES INVOLVED IN ALL THESE T HREE APPEALS OF ASSESSEE ARE AGAINST THE ACTION OF LD. CIT(A) CONFI RMING ADDITION U/S 68 OF THE ACT AT RS. 46,62,471/-, RS.1,85,29,421/- & RS.1,04,29,093/- FOR ASST. YEARS 1991-92, 1992-93 & 1993-94 RESPECTI VELY. IT(SS)A NO.15 & ITA NOS.1811, 1812 & OTHERS ASST. YEAR 1.4.85 TO 23.11.95 & OTHERS 20 19. AS THE ISSUES ARE SIMILAR, WE WILL ADJUDICATE A SSESSEES APPEAL IN ITA NO.1811/AHD/2012 FOR ASST. YEAR 1991-92 WHER EIN FOLLOWING GROUNDS HAVE BEEN RAISED:- 1. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION OF RS.46,62,471/- ON ACCOUNT OF UNEXPLAINE D CASH CREDIT U/S. 68 OF THE ACT. IN VIEW OF THE FACT THAT SINCE NO SU CH AMOUNT HAS BEEN RECEIVED AND THERE BEING NO CREDITS IN THE REVISED AUDITED BALANCE SHEET, THE IMPUGNED ADDITION OF RS.46,62,471/-REQUI RES TO BE DELETED AS THE SAME WILL NOT FALL WITHIN THE DEFINITION OF SECTION 68 OF THE ACT. 2. THE LEARNED CIT(A) HAS FURTHER ERRED IN LAW IN R ELYING UPON THE ORIGINAL AUDITED BALANCE SHEET, WHEREAS THE ISSUE THAT THE S AID BALANCE SHEET WAS NOT CORRECT AND NOT BASED ON BOOKS OF ACCOUNT H AS ALREADY ATTAINED FINALITY. THUS, EVEN OTHERWISE IN VIEW OF THE SAID FACTS, THE IMPUGNED ADDITION REQUIRES TO BE DELETED. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER, MO DIFY OR DELETE ANY OF THE ABOVE GROUNDS AS WELL AS TO SUBMIT ADDITIONAL GROUN DS AT THE TIME OF HEARING OF THE APPEAL. 20. BRIEFLY STATED FACTS OF THE CASE ARE THAT ASSES SMENT U/S 143(3) R.W.S. 147 OF THE ACT WAS COMPLETED ON 18/02/1998. THE TRIBUNAL VIDE ITS ORDER IN ITA NO.1032/AHD/2003 DATED 31.01.2011 SET ASIDE THE ORDER AND RESTORED THE ISSUE BACK TO THE FILE OF AS SESSING OFFICER. THEREAFTER ASSESSMENT U/S 143(3) R.W.S. 254 OF THE ACT WAS FRAMED ON 27.12.2011 WITH ONLY ADDITION TOWARDS UNEXPLAINE D CASH CREDIT OF RS.46,62,471/-. LD. ASSESSING OFFICER DURING THE CO URSE OF MAKING ADDITION U/S 68 ON ACCOUNT OF UNEXPLAINED CASH CRED IT OBSERVED AS BELOW :- 2.2 THE SUBMISSIONS MADE BY THE ASSESSEE HAVE BEEN CAREFULLY CONSIDERED AND NOT ACCEPTABLE AS THE ONUS OF PROVING THE CASH CREDITS IS ON THE ASSESSEE. THE ASSESSEE HAS STATED THAT THE CREDIT BALANCES WERE S HOWN IN THE NAMES OF NON- EXISTENT PERSONS TO BALANCE THE EFFECT OF INFLATION IN PURCHASES, STOCK, SALES AND MACHINERY WHICH WERE NOT GENUINE. THE SUBMISSION TH AT THE ORIGINAL ACCOUNTS WERE IT(SS)A NO.15 & ITA NOS.1811, 1812 & OTHERS ASST. YEAR 1.4.85 TO 23.11.95 & OTHERS 21 FALSIFIED AND THE ACCOUNTS THAT ARE SUBMITTED NOW I S THE CORRECTED AND ACTUAL VERSION IS NOT ACCEPTABLE AS THE ASSESSEE HAS NOT PRODUCED THE BOOKS OF ACCOUNTS IN ORIGINAL DURING THE COURSE OF THIS ASSESSMENT PROCEEDING. IN THE ABSENCE OF ANY EVIDENCES/SUPPORTING DOCUMENTS, THE AUDITED ACCOUNT S FILED NOW CANNOT BE CONSIDERED AS PRESENTING THE TRUE AND CORRECT ACCOUNTS OF THE ASSESSEE. THE ASSESSEE, EVEN AT THE TIME OF THE ORIGINAL ASSESSMENT PROCEEDINGS FAILED TO PRODUCE THE BOOKS OF ACCOUNTS. THE ASSESSEE'S SUBMISSION THAT THE CASH CREDITS WER E ACTUALLY NOT RECEIVED BUT WAS ONLY CREATED TO BALANCE THE BOGUS PURCHASE OF MACHINERY IS NOT ACCEPTABLE. ONCE THE CREDITS ARE FOUND NOT GENUINE AND HAS BEEN ADMITTED BY THE ASSESSEE THESE REMAIN UNEXPLAINED AND THEREFORE, HAS TO BE TREATED AS UNE XPLAINED CASH CREDITS. THEREFORE, THE AMOUNT OF RS.46,62,471/-(AFTER REDUCING THE OPENING BALANCE OF RS.11,00,600/- IN THE CASE OF MAHESH ENG.. WORKS AND RS.19,000/- IN THE C ASE AJAY INDUSTRIES FROM THE ADDITION MADE U/S.68 OF RS.57,82,071/-) IS TREATED AS UNEXPLAINED CASH CREDITS AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. : (DISALLOWANCE: 46,62,471/-) 21. AGGRIEVED, ASSESSEE WENT IN APPEAL BEFORE LD. C IT(A) BUT COULD NOT SUCCEED AS THE APPEAL WAS DISMISSED BY LD. CIT( A). 22. AGGRIEVED, ASSESSEE IS NOW IN APPEAL BEFORE THE TRIBUNAL. LD. AR SUBMITTED THAT AUDITED FINANCIAL STATEMENTS OF T HE SOLE PROPRIETARY CONCERN OF THE ASSESSEE NAMELY RENCO ENGINEERING W ORKS OF THE GROUP COMPANY WHICH COULD HAVE HELPED IN ATTRACTING CAPITAL FROM GENERAL PUBLIC AT THE TIME OF PUBLIC ISSUE OF RENCO GEARS LTD. LD. AR FURTHER SUBMITTED THAT PURSUANT TO SEARCH ASSESSEE GOT THE ACTUAL AND REAL BOOKS OF ACCOUNT AUDITED BY INDEPENDENT AUDITO R WHICH DO NOT HAVE ANY BOGUS CREDIT BALANCE AND INFLATED PURCHASE S AND SALES. AS FAR AS THE ISSUE OF UNEXPLAINED CASH CREDIT AND UNE XPLAINED INCOME IT IS ACCEPTED FACT THAT ASSESSEE HAD SHOWN CREDIT BAL ANCE IN THE NAMES OF NON-EXISTENT PERSONS IN HIS RETURN OF INCO ME. SUCH BALANCES WERE MERELY MADE SO AS TO COMPLETE THE SEC OND EFFECT OF INFLATING PURCHASES, PROFIT, STOCK, SALES AND MACHI NERY, WHICH WERE NOT GENUINE AND NO SUCH AMOUNTS OF MONEY WERE ACTUA LLY RECEIVED BY THE ASSESSEE. IT IS ALSO IMPORTED TO NOTE THAT S UCH MONEY WAS IT(SS)A NO.15 & ITA NOS.1811, 1812 & OTHERS ASST. YEAR 1.4.85 TO 23.11.95 & OTHERS 22 NEVER RECEIVED BY THE ASSESSEE. THUS ASSESSEE DID N OT ENJOY THE POSSESSION OF THE AMOUNT ADDED BACK TO HIS INCOME N EITHER IN ANY FORM AND RECORDS WHATSOEVER. THEREFORE, PROVISIONS OF SECTION 68 ARE NOT APPLICABLE AND HENCE ANY ADDITION ON THIS BASIS CANNOT BE WARRANTED BECAUSE THE ACTUAL BOOKS OF ACCOUNTS DO NOT CONSIST OF ANY SUCH ENTRIES BECAUSE THE ASSESSEE HAS NEVER REC EIVED THESE AMOUNTS. 23. ON THE OTHER HAND, LD. DR SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 24. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. SOLITARY GRIEVANCE OF THE ASSESSEE IN TH IS APPEAL IS AGAINST THE ORDER OF LD. CIT(A) CONFIRMING THE ADDITION U/S 68 OF THE ACT ON ACCOUNT OF UNEXPLAINED CASH CREDIT OF RS.46,62,471/ -. WE OBSERVE THAT OBSERVE THAT ASSESSEE OWNED SOLE PROPRIETARY C ONCERN M/S RENCO ENGINEERING WORKS. AT THE TIME OF FILING OF R ETURN OF INCOME AUDITED FINANCIAL STATEMENTS INCLUDING TAX AUDIT RE PORTS FRAMED AS PER BOOKS OF ACCOUNTS CONTAINED CASH CREDITS TAKEN DURING THE YEAR AT RS.46,62,471/-. DURING THE ASSESSMENT PROCEEDINGS A SSESSING OFFICER REQUIRED THE ASSESSEE TO FILE DOCUMENTARY E VIDENCES TO PROVE THE IDENTITY OF THE CREDITORS, GENUINENESS OF THE T RANSACTIONS AND CREDITWORTHINESS. ASSESSEE SUBMITTED THAT THESE LOA NS HAVE NEVER BEEN RECEIVED BY IT AND THE LOANS DECLARED IN THE B ALANCE SHEET ARE FICTITIOUS. THEREAFTER ASSESSEE PLACED ON RECORD NE W AUDITED BALANCE SHEET WHICH DID NOT HAVE THE AMOUNT OF UNSECURED LO ANS AND CASH CREDITS. IT(SS)A NO.15 & ITA NOS.1811, 1812 & OTHERS ASST. YEAR 1.4.85 TO 23.11.95 & OTHERS 23 25 WE FURTHER OBSERVE THAT LD. CIT(A) DISMISSED THE APPEAL BY OBSERVING AS UNDER :- 3.4 I HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. I HAVE ALSO PERUSED THE SUBMISSIONS MADE BY THE APPELLANT DURING THE APPELL ATE PROCEEDINGS AND VARIOUS CASE LAWS RELIED UPON BY THE APPELLANT. IT IS A MAT TER OF FACT THAT THE APPELLANT HAS ANNEXED ALONG WITH THE RETURN OF INCOME DATED 31/3/ 92 DULY VERIFIED FORM NO.3CD. THIS CLEARLY PROVES THAT THE APPELLANT HAS FURNISHED COPIES OF AUDIT REPORT DULY VERIFIED BY THE AUDITOR ALONG WITH THE INCOME-TAX RETURN. THE RETURN WAS ALSO DULY VERIFIED BY THE APPELLANT WHERE THE A PPELLANT HAD VERIFIED ALL THE CONTENTS OF THE RETURN. EVEN THE BALANCE SHEET AND P & L A/C. AND OTHER RELEVANT ANNEXURES OF BALANCE SHEET FILED WITH INCOME-TAX RE TURN ARE ALSO VERIFIED BY THE STATUTORY AUDITOR AND THE APPELLANT. IT IS STRANGE THAT IN SPITE OF THESE SPECIFIC VERIFICATIONS, THE APPELLANT IS STATING THAT THE CO NTENTS OF BALANCE SHEET AS SUBMITTED ALONG-WITH THE INCOME-TAX RETURN ARE FALS E. 3.5 IT IS A MATTER OF FACT THAT M/S. RENCO ENGIN EERING WORKS IS A PROPRIETORSHIP CONCERN OF THE APPELLANT. THE APPELLANT IS ALSO INT ERESTED IN -ANOTHER SISTER CONCERN IN THE NAME AND STYLE OF M/S. RENCO GEARS L TD. IN THIS COMPANY THE APPELLANT ALONG WITH HIS FATHER IS DIRECTOR. IN THE YEAR 1993, M/S. RENCO GEARS LTD. HAS BROUGHT PUBLIC ISSUE, WHEREIN 30,00,000 EQ UITY SHARES WERE ISSUED TO THE PUBLIC AT THE RATE OF RS. 17.50 PER SHARE, WHIC H INCLUDES RS.10 PER SHARE AS FACE VALUE AND RS. 7.5 PER SHARE AS SHARE PREMIUM. THIS WAY THE APPELLANT HAS COLLECTED RS. 5,25,00,000/-(30,00,000 X 17.5) BY WA Y OF THIS PUBLIC ISSUE. IT IS SUBMITTED BY THE APPELLANT THAT THE SALES OF M/S. R ENCO ENGINEERING WORKS WERE INFLATED TO SHOW A ROSY PICTURE AND TO MAKE THE PUB LIC ISSUE OF M/S. RENCO GEARS LTD. SUCCESSFUL AS BOTH THE CONCERNS ARE INTRICATEL Y CONNECTED. IT IS FURTHER SUBMITTED THAT THE EQUITY SHARE OF M/S. RENCO GEARS LTD., HAD TOUCHED A HEIGHT OF RS. 270/- PER SHARE. IN 1995 M/S. RENCO GEARS LT D. BROUGHT RIGHT-CUM-PUBLIC ISSUE AT A PRICE OF RS.90 PER SHARE WHICH INCLUDES FACE VALUE OF RS. 10 PER SHARE AND A SHARE PREMIUM OF RS. 80/- PER SHARE. THE APPE LLANT SUBMITTED THAT THE MANIPULATION IN THE ACCOUNTS WERE DONE TO MAKE THE PUBLIC OFFERS SUCCESSFUL. . 3.6 THE PROMOTERS OF RENCO GEARS LTD., HAS PUBLICAL LY STATED HUGE TURNOVER AND NOT PAID EXCISE DUTY, ACCORDINGLY, EXCISE DEPAR TMENT SEARCHED THE PREMISES OF RENCO GEARS LTD. ON 7/9/95. THE INCOME-TAX SEARC H WERE ALSO CONDUCTED ON THE BUSINESS PREMISES OF RENCO GEARS AND OTHER ASSO CIATED PERSONS ON 23/11/95. THE APPELLANT CONTENDED THAT FALSIFICATIO N OF ACCOUNT CAME TO THE NOTICE OF VARIOUS GOVERNMENT AGENCIES AS A RESULT OF THESE SEARCHES. : 3.7 THE ABOVE FACTS MAKE IT VERY CLEAR THAT THE APP ELLANT ALONG WITH ANOTHER SISTER CONCERN IWS. RENCO GEARS HAS INFLICTED A HUG E FRAUD ON PUBLIC. AT FIRST INSTANCE THEY COLLECTED A SUM OF RS.5,25,00,000/- F ROM PUBLIC AT THE TIME OF FIRST IT(SS)A NO.15 & ITA NOS.1811, 1812 & OTHERS ASST. YEAR 1.4.85 TO 23.11.95 & OTHERS 24 PUBLIC ISSUE. IT IS ALSO A MATTER OF FACT THAT TH E HIGHEST PRICE OF RENCO GEARS LTD. SHARE HAD TOUCHED RS.270/- PER SHARE. THIS INDICATE THAT THE APPELLANT HAS UNDERTAKEN LOT OF INSIDE TRADING IN THESE SHARES AN D MIGHT HAVE MADE SUBSTANTIAL MONEY OUT OF INSIDE TRADING. THE APPELLANT HAS ALSO COLLECTED SUBSTANTIAL AMOUNTS FROM PUBLIC IN THE YEAR 1995 AT THE TIME OF .SECOND PUBLIC OFFER. THESE FACTS CLEARLY INDICATE THAT THE APPELLANT HAD ENJOY ED GAINFULLY FRAUDULENTLY COLLECTED MONEY FROM PUBLIC AND USED THE SAME FOR HIS PERSONAL BENEFITS. THE PUBLIC MONEY WAS COLLECTED BY SHOWING A ROSY PICTUR E ON THE BASIS OF ALLEGED FALSIFICATION OF THE ACCOUNTS. HOWEVER, WHEN THE TAX DUES ARE RAISED ON THE BASIS OF SO CALLED FALSIFIED ACCOUNTS THE APPELLANT S CONTENTION IS THAT THESE ACCOUNTS ARE FICTITIOUS AND SHOULD NOT BE CONSIDERE D FOR THE TAX PURPOSES. IN MY CONSIDERED VIEW, THE APPELLANT CANNOT BE ALLOWED TO PRESENT THE DIFFERENT FACTS ON DIFFERENT OCCASIONS. THE APPELLANT IS PRESENT ING DIFFERENT FACTS WHICH BENEFIT IT AT DIFFERENT POINT OF TIME. IN THE INSTANT CASE THE APPELLANT HAS FILED DULY VERIFIED BALANCE SHEET WHICH HAS ALSO BEEN DULY AUDITED. THE AUDITOR AND APPELLANT BOTH ARE DUTY BOUND TO VERIFY VARIOUS FIGURES FROM THE B OOKS OF ACCOUNTS AND REPORT THE SAME FOR THE PURPOSE OF TAXATION. AFTER GETTING SATISFIED WITH THE CORRECTNESS OF FIGURES AS PER BOOKS OF ACCOUNTS, THE FINANCIAL STATEMENTS ARE TO BE DRAWN AND VERIFIED. THESE DULY VERIFIED FINANCIAL STATEMENTS ARE FILED ALONG WITH RETURN OF INCOME. AFTER SUCH DUE DILIGENCE, IN MY CONSIDERED VIEW IT WILL NOT BE PROPER IF SUCH ACCOUNTS ARE DIS-OWNED AS BY ADOPTING THESE AC COUNTS THE APPELLANT IS AFFECTED ADVERSELY. DURING THE ASSESSMENT PROCEEDIN GS THE APPELLANT CONTESTED THAT THE REAL BOOKS WERE LYING WITH THE OFFICIAL LI QUIDATOR WHICH HAS BEEN RELEASED BY OFFICIAL LIQUIDATOR AFTER A LOT OF PERSUASION. D URING THE APPELLATE PROCEEDINGS AS WELL AS ASSESSMENT PROCEEDINGS THE APPELLANT FILED AN AUDITED BALANCE SHEET STATEDLY DRAWN ON THE BASIS OF THESE BOOKS AND CONT ENDED THAT THE SAME SHOULD BE ACCEPTED FOR THE TAXATION PURPOSES. I AM NOT INC LINED TO AGREE WITH THE CONTENTIONS OF THE APPELLANT. AS DISCUSSED ABOVE, T HE CONTENTIONS OF THE APPELLANT CANNOT BE ACCEPTED AS THE APPELLANT IS- A DMITTEDLY ENGAGED IN FRAUDS. THE .POSSIBILITY OF NOT PRESENTING THE BOOKS WHICH WERE AUDITED BEFORE FILING THE INCOME-TAX RETURN DATED 31/3/92 CANNOT BE RULED OUT AS THESE BOOKS OF ACCOUNT REFLECTS HIGHER PROFITS. THE APPELLANT ONLY PRESENT S FACTS, WHICH SUITS TO IT AND IS CONTENDING TO DISOWN A FINANCIAL STATEMENT DULY VER IFIED BY HIM AND STATUTORY AUDITORS, WHICH IS NOT AN ACCEPTED PRACTICE. IN VIE W OF ABOVE, I HOLD THAT THE APPELLANT CANNOT BE ALLOWED TO DIS-OWN THE AUDIT RE PORT AND OTHER FINANCIAL STATEMENT WHICH ARE DRAWN ON THE BASIS OF FACTS AS IT PREVAILED AT THE RELEVANT TIME AND DULY OWNED UP THE APPELLANT AS PER THE PRO VISIONS OF LAW, AS THESE DOCUMENTS WILL FASTEN HIGHER TAX LIABILITIES ON THE APPELLANT. 3.8 IT IS FURTHER SEEN THAT THE A.O. HAD MADE AN AD DITION OF RS. 46,62,471/- U/S.68 OF THE I.T. ACT. DURING THE ASSESSMENT PROCEEDINGS AS WELL AS APPELLATE PROCEEDINGS THE APPELLANT HAS FAILED TO FURNISH DOC UMENTARY EVIDENCES TO PROVE THE IDENTITY OF THE CREDITOR, GENUINENESS OF TRANSA CTION AND CREDITWORTHINESS OF THE CREDITOR. THIS WAY THE APPELLANT HAS FAILED TO DISC HARGE ITS ONUS AS MANDATED BY SEC.68 OF THE I.T. ACT. THE APPELLANTS CONTENTION T HAT THESE ENTRIES ARE FICTITIOUS CANNOT BE ACCEPTED AS THE BALANCE SHEET WAS DULY VE RIFIED BY THE STATUTORY IT(SS)A NO.15 & ITA NOS.1811, 1812 & OTHERS ASST. YEAR 1.4.85 TO 23.11.95 & OTHERS 25 AUDITOR AND THE APPELLANT. THE APPELLANT HAD PLACED RELIANCE ON VARIOUS CASE LAWS IN HIS WRITTEN SUBMISSIONS. I HAVE GONE THROUG H THESE CASE LAWS AND IN NONE OF THESE CASES THE DULY VERIFIED BALANCE SHEET AND PROFIT & LOSS ACCOUNT FILED ALONG WITH THE INCOME-TAX RETURN HAS BEEN DISOWNED. ALL THESE CASE LAWS CAN BE DISTINGUISHED ON THIS SINGLE FACT. ACCORDINGLY THE RATIO OF THESE CASE LAWS CANNOT BE APPLIED IN THE CASE OF APPELLANT. IN VIEW OF THE SE FACTS, I HOLD THAT THE APPELLANT HAS CLEARLY FAILED TO DISCHARGE ONUS CAST UPON HIM BY THE PROVISIONS OF SEC.68 OF THE IT. ACT AND ACCORDINGLY, ADDITION OF RS. 46,62,471/- IS CONFIRMED. THIS GROUND OF APPEAL IS DISMISSED. 3.9 DURING THE APPELLATE PROCEEDINGS THE APPELLANT FURTHER CONTENDED THAT AGAINST THE ADDITION MADE U7S.68 OF THE IT.ACT, BENEFIT OF INFLATED FIXED ASSETS SHOULD BE ALLOWED. IT WAS FURTHER CONTENDED THAT SUCH BENEFIT S HAS BEEN ALLOWED BY THE CIT(A) IN FIRST ROUND OF APPEAL. (APPEA! NO. CIT(A) XIII7254/98-99 DATED 31/12/2002). IN MY CONSIDERED VIEW, THIS IS NOT SUB JECT MATTER OF DISPUTE NOW. EVEN THE APPELLANT HAS NOT RAISED THIS ISSUE IN GRO UNDS OF APPEAL. ACCORDINGLY, THIS ISSUE CANNOT BE ADJUDICATED. IT IS ALSO OBSERV ED THAT THE ADDITION OF RS. 46,62,471/- HAS BEEN MADE U/S.68 OF THE I.T. ACT, W HICH IS A RESIDUARY SECTION. THE ADDITIONS MADE UNDER SECTION 68 ARE ASSESSED AS INCOME FROM OTHER SOURCES'. AS PER THE SCHEME OF THE I.T. ACT, NO DED UCTION OR SET OFF ARE ALLOWABLE AGAINST THIS ADDITION. IN VIEW OF ABOVE THIS GROUND OF APPEAL IS DISMISSED. 26. WE FURTHER FIND THAT LD. CIT(A) HAS MADE DETAIL ED DISCUSSION ON THIS ISSUE. WE ARE, THEREFORE, OF THE VIEW THAT ASS ESSEE HAS MISERABLY FAILED TO EXPLAIN THE CASH CREDITS APPEARING IN THE AUDITED FINANCIAL STATEMENTS ATTACHED WITH THE ORIGINAL RETURN OF INC OME. THE LATER SUBMISSIONS MADE BY ASSESSEE THAT THE PREVIOUS AUDI T REPORT WAS FICTITIOUS (EVEN WHEN SIGNED BY INDEPENDENT AUDIT) AND THE REVISED BALANCE SHEET AUDITED BY ANOTHER AUDITOR IS CORRECT , IS NOT CONVINCING. IT SEEMS THAT ASSESSEE IS INDULGED INTO MAL PRACTIC ES OF FABRICATING BOOKS OF ACCOUNTS AND DEPICTING UNREALISTIC FINANCI AL DATA WITH A VIEW TO CHEAT THE PUBLIC AND, THEREFORE, DESERVES NO MER CY. WE FIND NO REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A). T HE APPEAL OF THE ASSESSEE IS DISMISSED ON THIS ISSUE. IT(SS)A NO.15 & ITA NOS.1811, 1812 & OTHERS ASST. YEAR 1.4.85 TO 23.11.95 & OTHERS 26 27. OTHER GROUND IS GENERAL IN NATURE, WHICH NEED N O ADJUDICATION. 28. ACCORDINGLY ITA NO.1811/AHD/2012 FOR ASST. YEAR 1991-12 IS DISMISSED. 29. NOW WE TAKE UP ITA NOS.1812/AHD/2012 FOR ASST. YEAR 1992- 93 AND ITA NO.1813/AHD/2012 FOR ASST. YEAR 1993-94. 30. IN BOTH THESE APPEALS ASSESSEE HAS RAISED GROUN DS AGAINST CONFIRMATION OF ADDITION MADE U/S 68 OF THE ACT AT RS. 1,85,29,421/- FOR ASSESSMENT YEAR 1992-93 AND RS. 1,04,29,093/- FOR ASST. YEAR 1993-94. 31. WE OBSERVE THAT THE FACTS IN THESE APPEALS ARE VERBATIM SIMILAR TO THAT OF APPEAL FOR ASST. YEAR 1991-92, WHEREIN F ABRICATED A/C AND FABRICATED AUDIT REPORTS WERE PLACED ALONG WITH THE RETURN OF INCOME. DURING THE COURSE OF ASSESSMENT PROCEEDINGS WHEN TH E ASSESSEE WAS CONFRONTED TO PROVE THE GENUINENESS, CREDITWORT HINESS AND IDENTITY OF THE CASH CREDITORS, ASSESSEE CAME UP WI TH NEW SET OF FINANCIAL DOCUMENTS WHICH DID NOT HAVE THE IMPUGNED CASH CREDITS. WE, THEREFORE, FOLLOW THE DECISION TAKEN BY US IN I TA NO.1811/AHD/2012 FOR ASST. YEAR 1991-92 AND APPLYIN G THE SAME TO THESE CASES, WE DISMISS THE APPEALS OF ASSESSEE. 32. OTHER GROUNDS RAISED IN THESE APPEALS ARE OF GE NERAL NATURE, WHICH NEED NO ADJUDICATION. IT(SS)A NO.15 & ITA NOS.1811, 1812 & OTHERS ASST. YEAR 1.4.85 TO 23.11.95 & OTHERS 27 33. IN THE RESULT, ALL THE THREE APPEALS OF THE ASS ESSEE IN ITA NO.1811, 1812 & 1813/AHD/2012 ARE DISMISSED. 34. NOW WE TAKE UP REVENUES APPEAL IN ITA NO.1601 /AHD/2013 AND ASSESSEES CROSS OBJECTION NO.203/AHD/2013 FOR ASST. YEAR 1994-95. 35. BRIEFLY STATED FACTS ARE THAT FOR ASST. YEAR 19 94-95 RETURN OF INCOME WAS FILED ON 30.12.1994 DECLARING TOTAL INCO ME AT RS.46,67,787/-. ASSESSMENT U/S 143(3) R.W.S. 144 O F THE ACT WAS COMPLETED ON 25/3/1997 AND THE SAME WAS SET ASIDE B Y THE TRIBUNAL VIDE ITS ORDER IN ITA NO.912/AHD/2003 & 1034/AHD/20 03 DATED 31/01/2011 AND THE ISSUE WAS RESTORED BACK TO THE F ILE OF ASSESSING OFFICER. ACCORDINGLY NOTICE U/S 143(2) OF THE ACT D ATED 20/07/2011 WAS ISSUED. AFTER MAKING VARIOUS ADDITIONS INCOME W AS ASSESSED AT RS.4,36,92,671/- ON 27/12/2011. ASSESSEE GOT PART RELIEF FROM LD. CIT(A). 36. AGGRIEVED, REVENUE IS NOW IN APPEAL BEFORE US A ND THE ASSESSEE HAS FILED CROSS OBJECTION. 37. WE TAKE REVENUES APPEAL IN ITA NO.1601/AHD/201 3 FOR ASST. YEAR 1994-95. IT(SS)A NO.15 & ITA NOS.1811, 1812 & OTHERS ASST. YEAR 1.4.85 TO 23.11.95 & OTHERS 28 GROUND NO. (I) THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETIN G THE ADDITION OF RS.30,80,000/- ON ACCOUNT OF UNACCOUNTED INVESTMENT IN SHARES OF RENCO GEARS LTD. 38. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, WH ILE GOING THROUGH PAGE NOS.1 TO 36 OF LOOSE PAPERS FILE NO.A/ 5 SEIZED IN THE CASE OF RECO FINANCE LTD. THE ASSESSING OFFICER OBS ERVED THAT LIST OF SHARES TRANSFERRED IN THE NAME OF SHRI B. S. PANCHA L WHICH COMPRISED 1764 SHARE APPLICATIONS AGAINST WHICH SHARES WERE F IRST ISSUED IN THE NAME OF APPLICANT BUT LATER ON THEY WERE TRANSFERRE D IN THE NAME OF B. S. PANCHAL WHO HAPPENS TO BE THE BROTHER IN LAW OF THE ASSESSEE. B. S. PANCHAL DOES NOT HAVE ANY SOURCE OF INCOME AND A CCORDINGLY THE INVESTMENT IN SHARES OF RS.30,80,000/- WAS ADDED TO THE INCOME OF ASSESSEE AS UNACCOUNTED INVESTMENT. 39. LD. AR REITERATED THE SUBMISSIONS MADE BEFORE L OWER AUTHORITIES. 40. LD. DR SUPPORTED THE ORDER OF ASSESSING OFFICER . 41. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT LD. CIT(A) HAS DELETED THE IMPUGNED ADDITION OF RS.30,87,000/- BY OBSERVING AS UNDER :- 2.3 I HAVE CAREFULLY CONSIDERED THE RIVAL CONTEN TIONS. IT IS SEEN THAT THE IMPUGNED ADDITION HAS BEEN MADE BY THE A.O. ON THE LINES OF THE ORIGINAL ASSESSMENT ORDER DATED 25.3.97. THE LD. CIT(A) IN A PPEAL NO.CIT(A)-XLLI/256/97- IT(SS)A NO.15 & ITA NOS.1811, 1812 & OTHERS ASST. YEAR 1.4.85 TO 23.11.95 & OTHERS 29 98 DATED 31.12.2002 HAD ADJUDICATED THIS ISSUE IN D ETAIL. THE LD. CIT(A) HAD DECIDED THIS ISSUE IN FAVOUR OF THE APPELLANT IN PA RA NO.8 OF THE ABOVE SAID ORDER. THE CONCLUDING PARA HAD BEEN REPRODUCED BY THE APPE LLANT IN ITS REPLY AND THE SAME IS MADE PART OF THIS ORDER. THE FACTS AVAILABL E ON RECORD INDICATE THAT THE IMPUGNED ADDITION HAS BEEN MADE ON THE BASIS OF LIS T OF SHARES TRANSFERRED IN THE NAME OF SHRI B.S. PANCHAL, THIS LIST WAS SEIZED AS PAGE NO,1 TO 36 OF LOOSE PAPER FILE NO. A-5 SEIZED FROM THE BUSINESS PREMISE S OF RENCO FINANCE LTD. IT IS ALSO SEEN THAT ADDITION OF RS.30,87,000/- HAS BEEN MADE IN THE BLOCK ASSESSMENT OF THE ASSESSEE VIDE ASSESSMENT ORDER DA TED 28.9.1998. SIMILAR ADDITION HAS ALSO BEEN MADE OH PROTECTIVE BASIS IN THE ASSESSMENT OF RENCO GEARS LTD. FOR THE A.Y.I 994-Q5. THE PROTECTIVE ADD ITION OF RS.30,87,000/- HAS BEEN MADE IN THE HANDS OF REHCO GEARS LTD. VIDE ASS ESSMENT ORDER DATED 25.3,1997. SINCE THE IMPUGNED ADDITION HAS BEEN MAD E ON THE BASIS OF SEIZED DOCUMENTS, ACCORDINGLY, I AM OF THE CONSIDERED VIEW THAT THESE ADDITIONS CAN ONLY BE MADE IN THE BLOCK ASSESSMENT, WHICH THE A.O . HAD ALREADY MADE. PERUSAL OF RECORDS FURTHER REVEALS THAT THE A.O. HA D FAILED TO BRING ANY EVIDENCE ON RECORD TO PROVE THAT THE INVESTMENT OF RS.30,87, 000/- WAS MADE BY THE APPELLANT. IN VIEW OF ABOVE, I HOLD THAT ADDITION OF RS.30,87,000/- IN THE HANDS OF THE APPELLANT IS UNTENABLE AND THE SAME IS ORDERED TO BE DELETED. THIS GROUND OF APPEAL IS ALLOWED. 42. WE FURTHER OBSERVE THAT THE IMPUGNED ADDITION O F RS.30,80,000/- HAS BEEN MADE IN THE BLOCK ASSESSMEN T OF THE ASSESSEE AS WELL AS ON PROTECTIVE BASIS IN THE CASE OF RENCO GEARS LTD. FURTHER ASSESSEE HAS FAILED TO SUBSTANTIATE WI TH ANY MATERIAL EVIDENCE WHICH COULD PROVE THAT INVESTMENT DID NO T FLOW THROUGH THE FUNDS OF ASSESSEE. FURTHER WE HAVE ALREADY QUASHED THE BLOCK ASSESSMENT PROCEEDINGS IN OUR DECISION VIDE IT(SS)A NO.15/AHD/2012 FOR BLOCK PERIOD 1.4.1985 TO 23.11.1 995. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT ADDITION OF RS.30,80,000/- IS JUSTIFIED. THIS GROUND OF THE APPEAL OF REVENUE IS DISMISSED. GROUND NO.(II) THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETIN G THE ADDITION OF RS.1,87,68,750/- ON ACCOUNT OF UNACCOUNTED INVESTME NT IN SHARES OF REHCO GEARS LTD. IT(SS)A NO.15 & ITA NOS.1811, 1812 & OTHERS ASST. YEAR 1.4.85 TO 23.11.95 & OTHERS 30 43. SO FAR AS GROUND NO.(II) IS CONCERNED, DURING T HE COURSE OF EXAMINATION OF EXAMINATION OF ANNEXURE A/5 CONTAIN ING CERTAIN LOOSE PAPERS, LD. ASSESSING OFFICER CAME THROUGH TH E SHARES ALLOTTED AGAINST APPLICATION MONEY OF RS.2,08,66,250/- WHICH WERE NOT OWNED BY THE APPLICANT. ASSESSING OFFICER OBSERVED THAT A SSESSEE HAS FAILED TO ESTABLISH THAT THE SAID INVESTMENTS WERE NOT MAD E BY HIM, TREATED THE SHARE APPLICATION MONEY OF RS.2,08,66,250/- AS UNACCOUNTED INVESTMENT. LD. CIT(A) DELETED THE ADDITION OF RS. 1,87,68,750/- AGAINST WHICH THE REVENUE IS IN APPEAL. 44. LD. AR RELIED ON THE ORDER OF LD. CIT(A) WHEREA S LD. DR SUPPORTED THE ORDER OF LD. ASSESSING OFFICER. 45. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. FROM GOING THROUGH THE ORDER OF LD. CIT( A) WE FIND THAT DELETION OF ADDITION AT RS.1,87,68,750/- HAS BEEN M ADE BY LD. CIT(A) BY OBSERVING AS UNDER :- 3.2 I HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIO NS. IT IS SEEN THAT ADDITION OF RS.2,08,86,250/- HAS BEEN MADE BY THE A.O. MECHANIC ALLY. THESE ADDITIONS HAVE BEEN MADE ON THE LINES OF ORIGINAL ASSESSMENT ORDER DATED 25.3.1997. IN THE ORIGINAL ASSESSMENT ORDER THERE WERE SOME TYPOGRAPH ICAL MISTAKES. THE A.O. HAS NOT BOTHERED EVEN TO CORRECT THESE TYPOGRAPHICA L MISTAKES. FOR EXAMPLE IN THE IMPUGNED AS WELL AS ORIGINAL ASSESSMENT ORDER T HE A.O. HAS TAKEN INVESTMENT IN 41000 SHARES OF RENCO GEARS LTD. FROM THE ADDRESS 9, PARVATI APPARTMENT, ARIKUR ROAD, NARANPURA, AHMEDABAD AT RS . 71,75,000/-. THE CORRECT FIGURE OF THIS INVESTMENT IS RS. 7,17,500/- . A.O. HAD NOT CORRECTED EVEN THIS FIGURE. NOT ONLY THIS, IN PARA 2.5 OF THE IMPU GNED ASSESSMENT ORDER, THE A.O.HAD PROPOSED AN ADDITION OF RS.2,08,86,250/-. I N THE COMPUTATION THE A.O. HAD MADE AN ADDITION OF RS.1,87,68,750/- ONLY. THES E GLARING INACCURACIES IN THE ASSESSMENT ORDER SHOWS THE NON-APPLICATION OF MIND BY THE A.O. IN THE EARLIER ROUND OF APPEALS, THE LD. CIT(A) HAD DISCUSSED THIS ISSUE IN PARA 8.1 OF APPEAL NO.CIT(A)-XIII/256797-98 DATED 31.12.2002. THE FACT S AVAILABLE ON RECORD IT(SS)A NO.15 & ITA NOS.1811, 1812 & OTHERS ASST. YEAR 1.4.85 TO 23.11.95 & OTHERS 31 CLEARLY INDICATES THAT INVESTMENT IN THE SHARES OF RENCO GEARS LTD. OF RS. 1,87,68,750/-(21,87,500 + 1,29,06,250 + 36,75,000) HAS BEEN OWNED BY THE INVESTORS. THE SOURCE OF THIS INVESTMENT IS FROM DE NA BANK, AMBAWADI BRANCH, AHMEDABAD. MONEY IN DENA BANK AMBAWADI BRANCH HAS C OME FROM FCNR ACCOUNT OF SHRI JASHWANT SHAH. THE TOTAL AMOUNT TRA NSFERRED IN THIS ACCOUNT BY SHRI JASHWANT SHAH WAS $ 6,00,000 APPROXIMATELY. SI NCE INVESTMENT TO THE EXTENT OF RS. 1,87,68,750/- STAND EXPLAINED, ACCORD INGLY, ADDITION TO THE EXTENT OF RS. 1 ( 87,68,750/- IS ORDERED TO BE DELETED. THE APPELLANT WILL GET RELIEF TO THIS EXTENT. 3.3 AS FAR AS INVESTMENT IN 8000 SHARES OF RENCO GE ARS LTD. OF RS.14,00,000/-, FROM THE ADDRESS 4, SUSHILANAGAR SOCIETY, MEMNAGAR, AHMEDABAD AND INVESLMENT IN 41000 SHARES OF RENCO GEARS LTD. OF R S. 7,17,500/- FROM THE ADDRESS 9, PARVATI APARTMENTS, ANKUR ROAD, NARANPUR A, AHMEDABAD IS CONCERNED, THE APPELLANT HAS FAILED TO FILE COGENT EVIDENCES TO PROVE THE IDENTITY AND EXISTENCE OF THE ALLEGED SHARE HOLDERS BY GIVIN G THEIR PA NOS. THE APPELLANT HAD ALSO NOT FILED ANY EVIDENCES TO PROVE THE SOURC E OF THESE INVESTMENTS. SINCE THE APPELLANT HAS FAILED TO DISCHARGE ITS ONUS CAST UPON HIM BY THE PROVISIONS OF SEC.69 OF THE I.T. ACT, 1961, ACCORDINGLY, ADDITION OF RS. 7,17,500/- AND RS. 14,00,000/-IS CONFIRMED. 3.4 AS A RESULT, ADDITION OF RS.1,87,86,750/- IS DE LETED. ADDITION TO THE EXTENT OF RS. 21,17,500/- IS CONFIRMED. THIS GROUND OF APPEAL IS PARTLY ALLOWED. 46. FROM GOING THROUGH THE FACTS DISCUSSED BY LD. C IT(A) IN HIS ORDER, WE FIND THAT INVESTMENT IN SHARES OF RENCO G EARS LTD. AT RS.1,87,86,750/- HAVE BEEN DULY OWNED BY THE INVEST OR AND THE SOURCE OF INVESTMENT WAS FROM FCNR ACCOUNT WITH DEN A BANK, AMBAWADI, AHMEDABAD AND THE IMPUGNED AMOUNT WAS GIV EN TOWARDS SHARE APPLICATION MONEY THROUGH BANKING CHA NNEL BUT LATER ON THESE SHARES HAVE BEEN TRANSFERRED TO JASHWANT S HAN AND MRUDULA SHAH. SURPRISINGLY THESE TWO PERSONS HAVE D ENIED THE OWNERSHIP OF THE SHARES. IN SUCH SITUATION COMPLETE TRANSACTION LOOKS DOUBTFUL. FROM GOING THROUGH THE FACTS WE ARE OF TH E VIEW THAT ADDITION WAS RIGHTLY MADE AT RS.1,87,86,750/- FOR U NACCOUNTED IT(SS)A NO.15 & ITA NOS.1811, 1812 & OTHERS ASST. YEAR 1.4.85 TO 23.11.95 & OTHERS 32 INVESTMENT AND LD. CIT(A) HAS ERRED IN DELETING THE SAME. THE GROUND RAISED BY THE REVENUE IS ALLOWED. GROUND NO.(III) LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETIN G THE ADDITION OF RS.40,05,000/- ON ACCOUNT OF UNACCOUNTED INVESTMENT IN SHARES OF RENCO GEARS LTD. 47. AS FAR AS GROUND NO.(III) IS CONCERNED IN RELAT ION TO DELETING THE ADDITION OF RS.40,05,000/-- ON ACCOUNT OF UNACCOUNT ED INVESTMENT IN SHARES OF RENCO GEARS LTD., THE IMPUGNED ADDITION M ENTIONED AT RS.40,05,000/- WAS MADE ON SIMILAR LINE AS DISCUSSE D BY US ABOVE IN GROUND NO.(II). WE FIND THAT LD. CIT(A) HAS DELETED THIS ADDITION BY OBSERVING AS UNDER :- 5.2 I HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIO NS. IT IS SEEN THAT THIS ISSUE HAD BEEN DECIDED IN FAVOUR OF THE APPELLANT IN APPEAL N O.CIT(A)-XLLI/256/97-98 DATED 31.12.2002. THE FACTS AVAILABLE ON RECORD CLEARLY I NDICATES THAT THESE INVESTMENTS HAS BEEN PROPERLY OWNED BY JASWANT SH AH, MRUDULA SHAH AND NALINI T. VASA. THE INVESTMENTS HAVE BEEN MADE THRO UGH BROKERS MS. HLNA VORA, MR. KIRIT VASA. THIS FACT HAS ALSO BEEN ADMIT TED BY MS. HINA VORA & MR. KIRIT SHAH. THE INVESTMENT HAS BEEN MADE FROM THE A CCOUNT OF JASHWANT SHAH AND MRUDULA SHAH WHO ARE U.S. CITIZENS. THESE SHARE S WERE SUBSEQUENTLY SOLD THROUGH CALCUTTA BROKER NAMELY VCK SHARES AND STOCK BROKING PVT. LTD. SINCE THE DOCUMENTS AVAILABLE ON RECORD CLEARLY EXPLAIN T HE SOURCE OF INVESTMENTS IN THESE SHARES, ACCORDINGLY, I AM INCLINED TO AGREE W ITH THE CONTENTIONS OF LD. A.R. IN VIEW OF ABOVE, ADDITION OF RS.40,25,000/- IS ORD ERED TO BE DELETED. THIS GROUND OF APPEAL IS ALLOWED. 48. WE OBSERVE THAT DURING THE POST SEARCH OPERATIO N, ALL THE THREE PERSONS- MRUDULA SHAH, NALINI T. VASSA & JASWANT J. SHAH DENIED TO HAVE MADE ANY SUCH SHARE APPLICATION. IT(SS)A NO.15 & ITA NOS.1811, 1812 & OTHERS ASST. YEAR 1.4.85 TO 23.11.95 & OTHERS 33 49. DURING THE COURSE OF HEARING ASSESSEE COULD NOT PLACE ANYTHING NEW TO PROVE CONTRARY TO THE VIEW TAKEN BY LD. ASSE SSING OFFICER. THEREFORE, WE ARE OF THE VIEW THAT SOURCE OF SHARE APPLICATION MONEY IS NOT EXPLAINED AND THERE IS NO IOTA OF EVIDENCE W HICH CAN PROVE THAT INVESTMENT HAS NOT BEEN MADE BY THE ASSESSEE. WE AR E INCLINED TO DISAGREE WITH THE VIEW TAKEN BY LD. CIT(A). WE HERE BY CONFIRM THE ADDITION OF RS.40,25,000/-. THIS GROUND OF REVENUE IS ALLOWED.. GROUND NO.(IV) THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DEL ETING THE ADDITION OF RS.25,00,000/- ON ACCOUNT OF INVESTMENT IN MACHINER Y. 50. AS REGARDS GROUND NO.(IV) IN DELETING THE ADDIT ION OF RS.25,00,000/- ON ACCOUNT OF INVESTMENT IN MACHINER Y, THE LD. ASSESSING OFFICER THE ADDITION AS HE WAS NOT CONVIN CED BY THE EXPLANATION GIVEN BY THE ASSESSEE. LD. CIT(A) HAS D ELETED THE IMPUGNED ADDITION OF RS.25,00,000/- BY OBSERVING AS UNDER :- '9.2 / HAVE CONSIDERED THE SUBMISSIONS OF THE APPEL LANT CAREFULLY AND HAVE GONE THROUGH THE IMPUGNED ORDER IN APPEAL. ON PERUSAL OF THE FACTS AND DETAILS FURNISHED BY THE APPELLANT AND THE AGREEMENT DATED 30.1.1995 REFERRED TO BY THE AO,, IT IS SEEN THAT THE MACHINERIES IN QUESTION AR E IN FACT RECORDED IN THE BOOKS OF ACCOUNTS AND THE PAYMENTS FOR THE SAME HAVE ALSO BEEN MADE BY CHEQUE/DRAFT, THE RECEIPT OF WHICH HAS BEEN DULY AC KNOWLEDGED BY HMT LTD., AS EVIDENT FROM THE COPIES OF SUCH RECEIPTS FURNISHED BEFORE ME. I AGREE WITH THE CONTENTION OF THE APPELLANT THAT THE AGREEMENT DATE D 30.1.1995 AND THE OBSERVATIONS OF THE A.O. ON THE SAME ARE IRRELEVANT , THE SAME NOT BEING PERTAINING TO THE YEAR IN QUESTION I.E. A.Y.1994-95 . IT IS FOUND THAT THE APPELLANT HAS PURCHASED MACHINERIES WORTH OF RS. 47,79,664/- DURING THE YEAR IN APPEAL FROM HMT LTD. THE THREE MACHINERIES REFERRED ARE C. N.C. LATHE, RADIAL DRILL AND HOBBER, ALL THREE OF HMT MAKE. IT IS FOUND FROM THE DETAILS FILED BY THE APPELLANT THAT THE RADIAL DRILLING MACHINE REFERRED TO IN THE ASSESSMENT ORDER AS RADIAL GRILL WAS PURCHASED BY REW FROM HMT LTD. UNDER INVO ICE NO.V/60804 DATED 18/10/93 FOR AN AMOUNT OF RS. 4,67J52/-. PAYMENT TH EREOF WAS MADE BY CHEQUE IT(SS)A NO.15 & ITA NOS.1811, 1812 & OTHERS ASST. YEAR 1.4.85 TO 23.11.95 & OTHERS 34 NO.384576 DATED 16/10/93. THE OTHER MACHINERY VIZ. GEAR HOBBING MACHINE WAS PURCHASED BY REW FROM HMT LTD. UNDER INVOICE NO.V/6 0835 DATED 6/11/93 FOR AN AMOUNT OF RS. 20,15,40S/-, PAYMENT THEREOF WAS M ADE BY DRAFT NO.384579 DATED 27/10/93. I AGREE WITH THE APPELLANT THAT THE THIRD MACHINE VIZ. CNC LATHE, WAS A PART OF THE MACHINERIES ACQUIRED IN THE EARLI ER YEARS, WHICH WERE SHOWN IN THE BOOKS OF ACCOUNTS AND THEREFORE, THE SALE CONSI DERATION AS PER THE SALE AGREEMENT OF RS. 25,00,000/- IS PERTAINING TO PLANT AND MACHINERY SHOWN IN THE BOOKS OF ACCOUNTS AND THEREFORE, THERE IS NO LOGIC FOR THE ADDITION OF RS. 25,00,000/-, CONSIDERING THE INVESTMENT IN SUCH PLA NT AND MACHINERY AS UNEXPLAINED. IT HAS BEEN FOUND THAT THE APPELLANT HAS SHOWN BOGU S PURCHASE OF MACHINERIES IN A.Y.91-92 AND A.Y.92-93 WHICH HAVE NOT BEEN ACCEPTE D BY THE ASSESSING OFFICER. SINCE THE NECESSARY EVIDENCES PERTAINING T O INVESTMENT IN MACHINERIES HAVE BEEN FURNISHED IN SUPPORT OF THE CLAIM THAT TH E SAME ARE DULY ACCOUNTED FOR, THE ADDITION OF RS.25,00,000/- BY THE A.O, CONSIDER ING THE INVESTMENT AS UNEXPLAINED IS HEREBY DELETED.' 6.3 THE FACTS AVAILABLE ON RECORD INDICATE THAT ALL THE INVESTMENT IN MACHINERY HAS BEEN MADE THROUGH BANKING CHANNELS. THE PURCHAS E OF MACHINERY IS DULY EVIDENCED BY THE VOUCHERS OF A PUBLIC SECTOR UNDERT AKING NAMELY HMT LTD. ALL THESE FACTS HAS BEEN MENTIONED BY THE LD. CIT(A) IN THE ABOVE MENTIONED APPELLANT ORDER RESPECTFULLY FOLLOWING THE RATIO OF APPEAL NO.CLT(A)-XIII/256/97- 98 DATED 31.12.2002, I AM INCLINED TO AGREE WITH TH E CONTENTIONS OF LD. A.R. ACCORDINGLY, ADDITION OF RS.25,00,000/- IS ORDERED TO BE DELETED. THIS GROUND OF APPEAL IS ALLOWED. 51. WE OBSERVE THAT LD. ASSESSING OFFICER HAS COMPL ETELY IGNORED THE FACTS SO MUCH SO THAT ALL NECESSARY DETAILS INC LUDING PURCHASE BILLS CONTAINING INVOICE NO., DATE AND AMOUNT, DETA ILS OF PAYMENT, WHICH WERE MADE IN THE FINANCIAL YEAR 1993-94 ITSEL F AND THE SALE CONSIDERATION WAS RECEIVED AGAINST THE SALE OF THES E MACHINES ONLY. THEREFORE, WHEN THE SOURCE OF INVESTMENT IN MACHINE S IS PROVED, THERE CANNOT BE ANY QUESTION MARK ON THE SALE CONSI DERATION RECEIVED AGAINST SALE OF MACHINERY. LD. CIT(A) HAS RIGHTLY D ELETED THE ADDITION OF RS.25,00,000/-. WE UPHOLD THE SAME. THIS GROUND IS ALSO DISMISSED. IT(SS)A NO.15 & ITA NOS.1811, 1812 & OTHERS ASST. YEAR 1.4.85 TO 23.11.95 & OTHERS 35 52. GROUND NOS. (V) & (VI) ARE OF GENERAL NATURE, W HICH NEED NO ADJUDICATION. REVENUES APPEAL IN ITA NO.1601/AHD/2 013 IS PARTLY ALLOWED. 53. NOW WE TAKE UP ASSESSEES CROSS OBJECTION NO.20 3/AHD/2013 FOR ASST. YEAR 1994-95 :- 1. THE LD. CTT(A) HAS ERRED IN PARTLY CONFIRMING TH E ADDITION OF RS.21,17,500/- OUT OF TOTAL ADDITION OF RS.2,08,86,250/- MADE BY T HE AO ON ACCOUNT OF UNACCOUNTED INVESTMENT IN SHARE APPLICATION MONEY. IN VIEW OF FACTS OF THE CASE AND MORE PARTICULARLY SINCE NO SUCH INVESTMENT HAS BEEN MADE BY THE APPELLANT; THE ADDITION BEING BASED ON SURMISES AND CONJECTURES AND THUS REQUIRED TO BE DELETED. 2. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF R S.7,91,000/- MADE BY THE AO AS UNACCOUNTED INVESTMENT IN RENCO GEARS LTD. SHARE S. IN VIEW OF FACTS OF THE CASE AND MORE PARTICULARLY SINCE NO SUCH INVESTMENT HAS BEEN MADE BY THE APPELLANT, THE ADDITION BEING BASED ON SURMISES ON CONJECTURES AND THUS REQUIRED TO BE DELETED. 3. THE ID. CIT(A) HAS ERRED IN CONFIRMING THE ADDIT ION OF RS.21,11,446/- MADE BY THE AO AS UNEXPLAINED CASH CREDIT UNDER SECTION 68. THERE BEING NO SUCH CREDIT AND IN VIEW OF EXPLANATION AND EVIDENCES SUB MITTED DURING THE COURSE OF ASSESSMENT AS WELL APPELLATE PROCEEDINGS, THE AD DITION OF RS.21,11,446/- REQUIRED TO BE DELETED. 4. THE ID. CIT(A) HAS ERRED IN ISSUING DIRECTIONS T O THE AO FOR VERIFICATION OF THE CLAIM OF THE APPELLANT REGARDING DEPRECIATION ON PL ANT AND MACHINERY OF RS.8,51,494/-. IN VIEW OF THE FACTS AND DETAILS FUR NISHED, THE ID. CIT(A) OUGHT TO HAVE ALLOWED FULL DEPRECIATION CLAIMED BY THE AP PELLANT SINCE THE ENTIRE BASIS ADOPTED BY THE AO IS ON ESTIMATION AS WELL AS WITHOUT ANY FACTUAL POSITION. 5. THE ID. CIT(A) HAS ERRED IN CONFIRMING THE ADDIT ION OF RS.2,32,000/- MADE BY THE AO ON ACCOUNT OF UNEXPLAINED CASH DEPOSIT IN BA NK ACCOUNT. THAT SINCE THE ENTIRE DEPOSIT OF RS.2,32,000/- BEING OUT OF TH E CASH WITHDRAWN ON EARLIER DATE FROM THE VERY SAME BANK ACCOUNT, THE ADDITION MADE BY THE AO REQUIRED TO BE DELETED. 6. THE ID. CIT(A) HAS ALSO ERRED IN NOT GIVING BENE FIT OF EXTRA INCOME SHOWN IN THE ORIGINAL RETURN AS COMPARED TO AUDITED BALANCE SHEET FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THAT SINCE EXTRA INCOME WAS ALREADY SHOWN TO THAT EXTENT, NO ADDITION SHOULD HAVE BEEN MADE BY THE AO AND CONFIRMED BY THE ID. CIT(A). IT(SS)A NO.15 & ITA NOS.1811, 1812 & OTHERS ASST. YEAR 1.4.85 TO 23.11.95 & OTHERS 36 THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER, MO DIFY OR DELETE ANY OF THE ABOVE GROUNDS AS WELL AS TO SUBMIT ADDITIONAL GROUN DS AT THE TIME OF HEARING OF THE APPEAL. 54. CROSS OBJECTION NO.1 OF THE ASSESSEE. WHILE ADJ UDICATING GROUND NO.2 OF REVENUES APPEAL WE OBSERVED THAT LD . ASSESSING OFFICER MADE AN ADDITION OF RS.2,08,86,250/- OUT OF WHICH WE HAVE DELETED ADDITION OF RS.1,87,68,750/-. FOR THE REMAI NING AMOUNT OF RS. 21,17,500/- ASSESSEE HAS RAISED THIS GROUND. WE OBS ERVE THAT THIS AMOUNT RELATES TO RENCO GEARS LTD. AT RS.14 LACS FO R 8000 SHARES AND RS.71,75,000/- FOR 41000 SHARES OF RENCO GEARS LTD. 55. WE OBSERVE THAT ASSESSEE HAS COMPLETELY FAILED TO PLACE ON RECORD TO EXPLAIN THE INVESTMENT OF RS.21,71,500/- AS NO COGENT EVIDENCE REGARDING ADDRESSES WHERE THE SHARE HOLDER S ARE AVAILABLE. AS THE ASSESSEE HAS COMPLETELY FAILED TO DISCHARGE ITS ONUS CAST UPON HIM AS PER PROVISIONS OF SECTION 69, NO RELIEF CAN BE GRANTED. ADDITION OF RS.27,71,500/- IS CONFIRMED. THIS GROUN D OF CROSS OBJECTION IS DISMISSED. 56. GROUND NO.2 OF CROSS OBJECTION AGAINST CONFIRMA TION OF THE ADDITION OF RS.7,91,000/- MADE BY THE AO AS UNACCOU NTED INVESTMENT IN RENCO GEARS LTD. SHARES. ADDITION OF RS.7,91,000 /- WAS MADE FOR INVESTMENT IN SHARES OF RENCO GEARS LTD. AND THE SO URCE OF INVESTMENT IS SHOWN AT PAGES 41 & 42, OF ANNEXURE M ARK-A/5 GIVING DETAILS OF 90 APPLICATIONS FOR 45200 SHARES. ASSESS EE WAS UNABLE TO PROVE THE IDENTITY, EXISTENCE OF SHARE HOLDERS AND THE SOURCE OF IT(SS)A NO.15 & ITA NOS.1811, 1812 & OTHERS ASST. YEAR 1.4.85 TO 23.11.95 & OTHERS 37 INVESTMENT BEFORE BOTH THE LOWER AUTHORITIES. IN TH IS SITUATION, WE FIND THAT LD. CIT(A) HAS RIGHTLY UPHELD THE ADDITION BY OBSERVING AS UNDER :- 4.2 I HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIO NS. IT IS SEEN THAT THE LD. CIT(A) IN APPEAL NO.CIT(A)-XIII/256/97-98 DATED 31.12.2003 HAD DECIDED THIS ISSUE IN FAVOUR OF REVENUE. THE CONCLUDING PARA OF THIS ORDE R IS REPRODUCED AS UNDER FOR THE SAKE OF READY REFERENCE :- '8.2 AS REGARDS THE ADDITION OF RS. 7,91,000/~ FOR INVESTMENT IN THE SHARES OF RENCO GEARS LTD., I FIND THAT THE ADDITION HAS B EEN MADE ON THE BASIS OF PAGE NO.41 & 42 OF THE SEIZED DOCUMENT MARKED AS ANNEXURE A-5 WHEREIN LIST OF SHAREHOLDERS FOR 90 APPLICATIONS FO R 45,200 SHARES WAS FOUND. THE ADDRESSES OF THE SHAREHOLDERS WERE NOT F URNISHED BY THE APPELLANT AND THE LIST OF SHARES WAS FOUND FROM THE POSSESSION OF THE APPELLANT DURING THE COURSE OF SEARCH AND THE APPEL LANT HAS NOT PROVED THE IDENTITY AND EXISTENCE OF THE SHAREHOLDERS BY GIVIN G THEIR PA NOS. OR THEIR L. T. ASSESSMENT PARTICULARS. SO THE ADDITION OF RS . 7,91,000/-MADE BY THE ASSESSING OFFICER IS CONFIRMED.' IT IS SEEN THAT THIS ADDITION HAS BEEN MADE AGAINST INVESTMENTS IN 45200 SHARES OF RENCO GEARS LTD. THIS INVESTMENT HAS BEEN MADE V IDE 90 SHARE APPLICATIONS. THE APPELLANT DURING THE ASSESSMENT PROCEEDINGS AS WELL AS APPELLATE PROCEEDINGS HAS FAILED TO FILE COGENT EVIDENCE TO P ROVE THE IDENTITY OF THE INVESTORS AND THE CREDITWORTHINESS OF THE INVESTORS . DURING THE APPELLATE PROCEEDINGS THE APPELLANT HAS MADE GENERAL SUBMISSI ONS. THESE CONTENTIONS CANNOT BE ACCEPTED IN THE ABSENCE OF CLINCHING EVID ENCES. ACCORDINGLY, I HOLD THAT THE LD. A.R. HAS FAILED TO DISCHARGE HIS ONUS CAST UPON HIM BY THE PROVISIONS OF SECTION 69 OF THE I.T. ACT, 1961. IN VIEW OF ABO VE, ADDITION OF RS. 7,91,000/- MADE BY THE A.O. IS CONFIRMED. THIS GROUND OF APPEA L IS DISMISSED. WE FIND NO REASON TO INTERFERE WITH THE ORDER OF LD . CIT(A) ON THIS ISSUE. THIS GROUND OF CROSS OBJECTION IS DISMISSED. 57. AS REGARDS GROUND NO.3 OF THE CROSS OBJECTION, ADDITION ON ACCOUNT OF UNEXPLAINED CASH CREDIT AT RS.21,11,446/ - WAS MADE. WE HAVE DEALT WITH THIS ISSUE WHILE DEALING WITH ASSES SEES APPEALS IN ITA NOS.1811, 1812 & 1813/AHD/2012 FOR ASST. YEARS 1991-92 TO 1993-94. WE FIND SIMILARITY ON THE FACTS IN THIS CA SE ALSO. LD. IT(SS)A NO.15 & ITA NOS.1811, 1812 & OTHERS ASST. YEAR 1.4.85 TO 23.11.95 & OTHERS 38 ASSESSING OFFICER WAS NOT CONVINCED WITH THE EXPLAN ATION GIVEN TOWARDS CASH CREDIT OF RS.21,11,446/- OUT OF WHICH RS.20,00,000/- PERTAINED TO SINGLE PARTY LEO ENGINEERING WORKS. W E OBSERVE THAT IN THE RECORDS SHOWN BY THE ASSESSEE THERE IS A CASH D EPOSIT OF RS.20,00,000/- WHICH IS PERTAINING TO A/C OF LEO EN GINEERING WORKS BUT IS APPEARING IN THE BOOKS OF RENCO GEARS LTD. A S LOAN RECEIVED BY CHEQUE. BOTH THESE FACTS ARE COMPLETELY CONTRADI CTORY AND ASSESSEE HAS FAILED TO FURNISH ANY DOCUMENTARY EVID ENCE TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF C ASH CREDIT OF RS.21,11,446/-. AS WE HAVE EARLIER HELD WHILE ADJUD ICATING APPEALS IN ITA NOS.1811, 1812 & 1813/AHD/2012 FOR ASST. YEARS 1991-92 TO 1993-94 THAT ASSESSEE USED TO SUBMIT FABRICATED BOO KS OF ACCOUNT AND FINANCIAL STATEMENTS AND THERE REMAINS NO AUTHE NTICITY. WE ARE, THEREFORE, OF THE VIEW THAT LD. CIT(A) HAS RIGHTLY CONFIRMED THE ADDITION OF RS.21,11,446/-. WE UPHOLD THE SAME. THIS GROUND OF C.O. IS DISMISSED. 58. GROUND NOS.4 & 5 ARE NOT PRESSED. HENCE DISMISS ED AS NOT PRESSED. 59. AS REGARDS GROUND NO.6 OF THE CROSS OBJECTION, WE OBSERVE THAT EVEN BEFORE THE TRIBUNAL ALSO ASSESSEE HAS NOT MADE ANY SUBMISSIONS IN RESPECT OF THIS GROUND ABOUT THE SOU RCE OF EXTRA INCOME AND ADJUSTMENT THEREOF TO A PARTICULAR HEAD. IN ABSENCE OF THIS INFORMATION, WE REJECT THIS GROUND OF CROSS OB JECTION. IT(SS)A NO.15 & ITA NOS.1811, 1812 & OTHERS ASST. YEAR 1.4.85 TO 23.11.95 & OTHERS 39 60. IN THE RESULT ASSESSEES APPEAL IN IT(SS)A NO.1 5/AHD/2012 IS ALLOWED, ITA NOS. 1811, 1882 & 1883/AHD/2012 ARE DI SMISSED AND REVENUES APPEAL IN ITA NO.1601/AHD/2013 IS PARTLY ALLOWED. CROSS OBJECTION OF ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH AUGUST, 2016 SD/- SD/- (S. S. GODARA) JUDICIAL MEMBER (MANISH BORAD) ACCOUNTANT MEMBER DATED 8/8/2016 MAHATA/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, AHMEDABAD 1. DATE OF DICTATION: 03/08/2016 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 05/08/2016 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: __________ 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 882016 7.. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: