Shri Jignesh N. Thakor, Ahmedabad V. The Income Tax Officer, Ward-7(1), Ahmedabad

ITSSA 151/AHD/2014

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8699 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 2 month(s) 18 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 28-06-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 17-07-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 09-04-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: O P SHARMA
• Keywords: Unexplained investment; Unexplained expenditure; Income from undisclosed sources; Search and seizure; Period of limitation; Valuation report; Set aside
• Section: 271(1)(c); 201; 69; 132

Judgement Text

PAGE 1 OF 26 , IN THE INCOME TAX APPELLATE TRIBUNAL , C BENCH, AHMEDABAD BEFORE , SHR I MAHAVIR PRASAD , JUDICIAL MEMBER AND SHRI WASEEM AHMED , ACCOUNTANT MEMBER SR.NO. IT (SS) A NO. AND ASSTT.YEAR APPELLANT RESPONDENT 1 - 3 IT (SS)A NO. 151/AHD/2014 2009 - 2010 NO.237/AHD/2015 A.Y. 2009 - 10 AND NO.152/AHD/2014 A.Y. 2010 - 11 JIGNESH N. THAKOR, RANGOLI FARM , SHILAJI, TALUKA, DASKROI, AHMEDABAD - 38 0 058 . PAN: AAWPT1866F ACIT, CENTRAL CIRCLE, 1(4), AHMEDABAD (PRESENT JURISDICTION WITH ITO, WARD 7(1) AHMEDABAD) 4 . NO. 190/AHD/2013 A.Y 2010 - 11 ACIT, CENTRAL CIRCLE 1(4), AHMEDABAD. JIGNESH N. THAKOR, AHMEDABAD. ASSESSEE BY : SHRI SAKAR SHARMA , A.R REVENUE BY : SHRI O.P. SHARMA , CIT . DR / DATE OF HEARING : 13 / 06 / 201 9 / DATE OF PRONOUNCEMENT: 28 /06 /2 01 9 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THESE ARE FOUR APPEALS . T HREE APPEALS ARE BY THE ASSESSEE AND ONE BY THE REVENUE. ASSESSEE IS CHALLENGING SEPARATE ORDERS OF THE LD.CIT(A) I, AHMEDABAD DATED 14.2.2013 AND 3.9.2015 FOR THE AY 2009 - 10 . WHEREAS THE ASSESSEE AND THE REVENUE ARE IN CROSS - APPEAL S AGAINST THE ORDER OF THE LD.CIT(A) DATED 14.2.2013 PASSED FOR THE ASSTT.YEAR 2010 - 11 . SINCE ISSUES A RE EITHER INTER - CONNECTED OR COMMON, FOR THE SAKE OF CONVENIENCE, WE DISPOSE OF ALL THESE APPEALS BY THIS CONSOLIDATED ORDER. IT(SS)A NO.151,237,152/AHD/2014 - 15 ASSTT. YEARS 2009 - 10 & 2010 - 11 PAGE 2 OF 26 FIRST, WE TAKE UP ITA NO. 151 /AHD/ 2014 AN APPEAL BY THE ASSESSEE. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE LD.CIT(A) ERRED ON FACTS AND IN LAW IN CONFIRMING BROKERAGE/COMMISSION AMOUNTING TO RS.10,000/ - INSPITE OF HAVING SATISFIED HIMSELF THAT NO BROKERAGE/COMMISSION WAS PAID TO APPELLANT BY SHRI BHIKHUBHAI N. PADSALA. 2. THE ''LD.CIT(A) ERRED ON FACTS AND IN LAW IN CONFIRMING ADDITION OF RS.20,00,000/ - BY HOLDING THE SAME TO BE UNEXPLAINED INSPITE OF SUCH EXPENDITURE ALREADY RECORDED IN THE BOOKS OF APPELLANT PRODUCED BEFORE THE ASSESSING OFFICER AND NO EVIDENCE OF UNACCOUNTED EXPENDITURE NOTICED IN THE COURSE OF SEARCH. THE APPELLANT CRAVES PERMISSION TO ADD, ALTER, AMEND OR WITHDRAW ANY GROUND OR GROUNDS OF APPEAL EITHER BEFORE OR DURING THE COURSE OF HEARING OF THE APPEAL. THE 1 ST ISSUE RAISED BY THE ASSESSEE IS THAT THE LEARNED CIT (A) ERRED IN CONFIRMING THE ADDITION MADE BY THE AO TO THE TUNE OF RS. 10,000.00 ON ACCOUNT OF BROKERAGE/COMMISSION INCOME. 2. T HE LEARNED AR BEFORE US HAS NOT PRESSED THIS GROUND OF APPEAL RAISED BY T HE ASSESSEE ON ACCOUNT OF THE SMALLNESS OF AMOUNT. AC CORDINGLY, WE DISMISS THE SAME A S NOT PRESSED. THE 2 ND ISSUE RAISED BY THE ASSESSEE IS THAT THE LEARNED CIT (A) ERRED IN CONFIRMING THE ADDITION OF 20.00 LAKHS ON ACCOUNT OF UNEXPLAINED EXPENDITURE. 3. AS PER THE SEIZED MATERIAL BEARING NUMBER A NNEXURE - A2 , IT WAS REVEALED THAT THE ASSESSEE HA D INCURRED UNEXPLAINED EXPENDITURE ON THE CONSTRUCTION OF HIS RESIDENCE LOCATED AT RANGOLI FARM. THE ASSESSEE IN THE STATEMENT FURNISHED UNDER SECTION 132(4) OF THE ACT ALSO ADMITTED UNACCOUNTED INVESTMENT OF 25 LAKHS ONLY. IT(SS)A NO.151,237,152/AHD/2014 - 15 ASSTT. YEARS 2009 - 10 & 2010 - 11 PAGE 3 OF 26 3.1 THE MATTER FOR DETERMINING THE VALUE OF EXPENDITURE INCURRED MADE BY THE ASSESSEE IN THE CONSTRUCTION OF HIS RESIDENCE WAS ALSO REFERRED TO THE VALUATION OFFICER WHO SUBMITTED HIS REPOR T DATED 19 - 12 - 2011 AS DETAILED UNDER: SR.NO. FINANCIAL YEAR COST OF CONSTRUCTION THE BUILDING AS DECLARED BY THE ASSESSEE(RS.) ESTIMATED BY THIS OFFICE(RS.) XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX FARM HOUSE (NEW BUILDING) 4. 2008 - 09 30,00,000/ - 31,58,994/ - 5. 2009 - 10 25,00,000/ - 26,82,696/ - 6. 2010 - 11 8,01,030/ - 8,53,640/ - TOTAL= 63,01,030/ - 66,95,330/ - 3.2 HOWEVER, THE ASSESSEE IN HIS RETURN OF INCOME DID NOT MAKE ANY DISCLOSURE OF 25 LAKHS AS DISCUSSED ABOVE. BUT THE ASSESSEE TO JUSTIFY THE INVESTMENT HAS PASSED ONE JOURNAL ENTRY IN BOOKS OF ACCOUNTS DATED 31 ST MARCH 2010 DEBITING THE INVESTMENT IN RANGOLI FARM AND CREDITING THE ACCOUNT OF THE PARTY NAMELY SHRI RAMESH BHAI V. PORIYA FOR THE AMOUNT OF RS. 33,25,000.00. ACCORDINGLY, THE ASSESSEE CLAIMED TO HAVE INCURRED INTER - ALIA A SUM OF 33,25,000.00 FOR THE CONSTRUCTION OF THE RESIDENCE WHICH WAS DISCLOSED IN THE BOOKS OF ACCOUNTS. 3.3 HOWEVER, THE AO DISAGREED WITH THE CONTENTION OF THE ASSESSEE BY OBSERVING AS UN DER: I. THE VOUCHERS JUSTIFYING THE PAYMENTS TO SHRI RAMESH BHAI V. PORIYA ARE SELF - SERVING VOUCHERS. THEREFOR E THE SAME CANNOT BE RELIED . IT(SS)A NO.151,237,152/AHD/2014 - 15 ASSTT. YEARS 2009 - 10 & 2010 - 11 PAGE 4 OF 26 II. THE ASSESSEE DID NOT PROVIDE THE IDENTITY OF THE PARTY , I.E. , SHRI RAMESH BHAI V. PORIYA AND GENUINENESS OF THE TRANSA CTIONS. III. DURING THE SEARCH PROCEEDING, THERE WAS NO VOUCHER AVAILABLE/ FOUND SUGGESTING THAT THE ASSESSEE HAS MADE ANY PAYMENT TO THE PARTY FOR THE CONSTRUCTION OF THE RESIDENCE AS DISCUSSED ABOVE. 3.4 IN VIEW OF THE ABOVE, THE AO TREATED THE INVESTMENT I N SUCH PROPERTY AMOUNTING TO 31,58,994.00 AS UNEXPLAINED EXPENDITURE OUT OF THE UNDISCLOSED INCOME AND ACCORDINGLY ADDED TO THE TOTAL INCOME OF THE ASSESSEE. THE A GGRIEVED ASSESSEE PREFERRED AN APPEAL TO THE LEARNED CIT (A). 4. THE ASSESSEE BEFORE THE LEARNED CIT (A) SUBMITTED THAT HE HA D MADE THE PAYMENT OF RS. 20 LACS IN CASH TO SHRI RAMESH BHAI V. PORIYA FOR THE YEAR UNDER CONSIDERATION. SIMILARLY , HE HAS INCURRED A SUM OF RS. 1,15,090.00 IN CONNECTION WITH THE RANGOLI FARM. THE ASSESSEE FURTHER CLA IMED THAT THE ABOVE TRANSACTIONS WERE DULY REFLECTED IN THE REGULAR BOOKS OF THE ACCOUNTS. 4.1 THE ASSESSEE FURTHER SUBMITTED THAT HE HA D DECLARED THE COST INCURRED IN RESPECT OF RANGOLI FARM TILL 31 - 3 - 2009 FOR RS. 30 LACS ONLY. ON THE CONTRARY , THE VALU ATION OFFICER HAS DETERMINED THE VALUE OF SUCH CONSTRUCTION COST AT 31,58,994.00 LEAVING A DIFFERENCE OF RS. 1,58,994.00 ONLY WHICH IS QUITE INSIGNIFICANT. 4.2 THE ASSESSEE ALSO SUBMITTED THAT THE STATEMENT FURNISHED UNDER SECTION 132(4) OF THE ACT CANN OT BE RELIED UPON AS THE SAME HAS BEEN RETRACTED SUBSEQUENTLY. IT(SS)A NO.151,237,152/AHD/2014 - 15 ASSTT. YEARS 2009 - 10 & 2010 - 11 PAGE 5 OF 26 4.3 HOWEVER, THE LEARNED CIT (A) OBSERVED THAT AT THE TIME OF THE SEARCH , THERE WAS NO SUCH ENTRY RECORDED IN THE BOOKS OF ACCOUNTS REGARDING THE EXPENDITURE OF 33.25 LAKHS. THUS THE TRANSAC TION NOT RECORDED IN THE BOOKS OF ACCOUNTS ON THE DATE OF SUCH SHALL BE TREATED AS UNACCOUNTED TRANSACTIONS. 4.4 THE ASSESSEE FAILED TO PROVE THE IDENTITY AND GENUINENESS OF THE PARTY SHRI RAMESH BHAI V. PORIYA. 4.5 T HE VALUATION OF THE RESIDENCE WAS BASED ON THE REPORT OF THE VALUATION OFFICER , WHICH WAS MADE ON AN ESTIMATED BASIS. AS SUCH , THE DIFFERENCE , AS SHOWN BY THE ASSESSEE , AND THE VALUATION MADE BY THE VALUATION OFFICER , WAS NOT SIGNIFICANT ENOUGH. THEREFORE THE LEARNED CIT (A) DID NOT MAKE ANY CONFIRMATION OF THE ADDITION CONSIDERING THE VALUATION REPORT. IN VIEW OF THE ABOVE, THE LEARNED CIT (A) CONFIRMED THE ADDITION IN PART MADE BY THE AO BY OBSERVING AS UNDER: 6. I HAVE GONE THROUGH THE ASSESSMENT ORDE R AND SUBMISSION OF THE A.R. OF THE APPELLANT CAREFULLY. I HAVE ALSO CONSIDERED THE DOCUMENTARY EVIDENCES AND SUBMISSIONS MADE BY THE AR OF THE APPELLANT AND THE REPORT OF THE DVO. 1 FIND THAT IT IS NOT IN DISPUTE THAT THE APPELLANT MADE DISCLOSURE OF'RS. 25,00,000/ - IN STATEMENT U/S 132(4). IT IS SEEN THAT THE AO HAS GIVEN SEVERAL REASONS WHY THE ENTRIES RENTING TO SHRI RAMESH PONYAJIREJIOT GENUINE. IT IS ALSO SEEN THAT TO VERIFY THE CORRECTNESS OF EXPENDITURE INCURRED ON THE RANGOLI FARM, ASSESSING OFFICE R HAD ASKED THE APPELLANT TO PRODUCE SHN RAMESH PORIYA BUT THE APPELLANT CHOSE NOT TO DO SO. IT IS ALSO SEEN THAT TILL THE DATE 01 SEARCH NO ENTRIES HAD BEEN MADE IN THE BOOKS OF ACCOUNTS OF THE APPELLANT REGARDING ANY WORK DONE BY SHRI RAMESH PORIYA. SEC TION 292C STIPULATES THAI THE ENTRIES REC ORDED IN THE BOOKS OF ACCOUNTS A RE TO BE TREATED AS CORRECT AND IF ENTRIES ARC NOT RECORDED IN THE BOOKS THEN IT CAN BE PRESUMED THAT THEY WERE NOT TO BE RECORDED IN THE BOOKS OF ACCOUNTS. 1'HIS MEANS THAT THOSE ENT RIES WHICH ARE NOT RECORDED IN THE BOOKS OF ACCOUNTS CANNOT BE ACCEPTED AS DISCLOSED ENTRIES. A TRANSACTION NOT RECORDED IN THE BOOKS OF ACCOUNTS ON THE DATE OF SEARCH IS TO BE TREATED AS UNACCOUNTED TRANSACTIONS. IN THE INSTANT CASE, IT IS SEEN THAT NO EN TRIES WHAT SO EVER WERE MADE IN ANY BOOKS OF ACCOUNTS IN RESPECT OF SHRI RCIR.ESH PORIYA AS ON THE DATE OF SEARCH. THIS MAKES IT CLEAR THAT THE ENTRIES IN RESPECT OF SHRI RAMESH PORIYA HAVE BEEN INSERTED LATER ON. IT IS ALSO SEEN THAT THE ENTIRE PAYMENTS M ADE TO SIIRI RAMESH PORIYA ARE CASH PAYMENT. IN VIEW IT(SS)A NO.151,237,152/AHD/2014 - 15 ASSTT. YEARS 2009 - 10 & 2010 - 11 PAGE 6 OF 26 THE FACT THAT SHRI RAMESH PORIYA WAS NEVER PRODUCED BEFORE THE A.O., ALL THE PAYMENTS MADE TO HIM ARE STATED TO BE IN CASH, NO ENTRIES WERE MADE IN ANY BOOKS OF ACCOUNTS IN RESPECT OF SUCH PAYMENTS, THE ENTRIES WERE INSERTED BY WAY OF A JOURNAL ENTRY AFTER THE SEARCH AND THE FACT THAT THE APPELLANT HAD MADE A DISCLOSURE ON ACCOUNT OF UNDISCLOSED INVESTMENT IN THE HOUSE U/S. 132(4) OF RS.25,00,000/ - ON THE DATE OF SEARCH CLEARLY INDICATES THAT THE CONTENTI ON OF THE APPELLANT THAT HE HAD PAID A SUM OF RS.33,25,000/ - TO SHN RAMESH PORIYA IS NOT CORRECT AND IS CLEARLY AN AFTERTHOUGHT. 6.1 I HAVE EXAMINE THE REPORT OF THE DVO WHEREIN HE ESTIMATED EXPENDITURE ON THE CONSTRUCTION OF THE HOUSE AT RS.66,95,330/ - AS AGAINST THE DECLARED COST BY THE APPELLANT OF RS.63,01,0307 - . IT IS S - JEN THAT THE VARIATION BETWEEN THE VALUE DECLARED BY THE APPELLANT AND THAT ESTIMATED BY THE A.O. IS ONLY RS.3,94,300/. THIS MEANS THAT THE ESTIMATION BY THE A.O. IS ONLY 6.26% HIGHER THAN THAT DECLARED BY THE APPELLANT IN ITS BOOKS OF ACCOUNTS. THE REPORT OF THE DVO IS BASED ON ESTIMATES ONLY. I; IS ALSO SEEN THAI THE VALUATION. OFFICER HAS ADDED AN AMOUNT OF 10% ON ACCOUNT OF CONTRACTOR'S PROFIT. IN THE INSTANT CASE, THE CLAIM OF T HE APPELLANT THAT THE WORK HAD BEEN DONE THROUGH A CONTRACTOR SHRI RAMESH PORIYA HAS NOT BEEN ACCEPTED. IN SUCH A SITUATION, ADDING AN AMOUNT OF 10% ON ACCOUNT OF CONTRACTOR'S PROFIT WOULD NOT BE THE CORRECT ESTIMATE FOR THE COST OF CONSTRUCTION. IN MOST C ASES, WHEN THE EXISTENCE OF A CONTRACTOR IS DENIED A REBATE OF 10% ON AMOUNT OF SELF SUPERVISION IS ALLOWED DURING VALUATION. IN VIEW OF THE R ACT THAT THERE IS ONLY MARGINAL DIFFERENT OF 6.26%. THE CONTENTION OF THE APPELLANT THAT THE SAME MAY BE IGNORED IS CORRECT. IN VIEW OF THE ABOVE, IT IS HELD THAT THE INVESTMENT IN THE HOUSE PROPERTY WOULD BE RS.63,01,0307 - AS DECLARED BY THE APPELLANT SINCE THERE IS NO REASON TO VARY THE INVESTMENT BECAUSE OF THE SMALLNESS OF THE DIFFERENCE BETWEEN THE VALUE ESTIMAT ED BY THE DVO AND AS DECLARED BY THE APPELLANT. 6.2 HOWEVER, THE CONTENTION OF THE APPELLANT THAT HE HAD GOT THE WORK DONE BY SHRI RAMEBH PORIYA IS NOT CORRECT. THE PAYMENTS MADE FOR INVESTMENT IN THE HOUSE PROPERTY WERE UNACCOUNTED TO THE EXTENT AS SHOWN PAID TO SHRI RAMESH PORIYA. THE APPELLANT HAS SHOWN TOTAL CASH PAYMENT OF RS.33.25,000/ - TO SHRI RAMESH PORIYA. OUT OF THE ABOVE, A SUM OF RS.20,00,000/ - HAS BEEN STATED TO HAVE BEEN PAID IS CASH IN A.Y.2008 - 09 RELEVANT TO A.Y.2009 - 10 AND RS.L3,25,000/ - HAS BEEN STATED TO HAVE BEEN PAID IN CASH IN F.Y.2009 - 10 RELEVANT TO A.Y.2010 - 11. DURING THE YEAR, THE APPELLANT HAS CLAIMED WHO HAS MADE PAYMENT TO SHRI RAMSSH PORIYA TO THE EXTENT OF RS.20.00,000/ - . IN VIE - .V OF THE ABOVE, AND THE FACT THAT THE APPELLANT HAD DECLARED UNACCOUNTED INVESTMENT OF RS.25,00,0007 - IN THE HOUSE PROPERTY IN THE STATEMENT MADE U7S. 132(4) OF THE I.T. ACT AND THE FACT THAT THE PAYMENT MADE TO SHRI RAMESH PORIYA IS BOGUS AND NOT RECORDED IN THE BOOKS UF ACCOUNTS, THE ADDITION MADE BY THE A.O. OF RS.31,58,9947 - IS REDUCED TO RS.20,00,000/ - . THIS GROUND IS PARTLY ALLOWED . BEING AGGRIEVED BY THE ORDER OF THE LEARNED CIT (A) THE ASSESSEE IS IN APPEAL BEFORE US. IT(SS)A NO.151,237,152/AHD/2014 - 15 ASSTT. YEARS 2009 - 10 & 2010 - 11 PAGE 7 OF 26 5. THE LEARNED AR BEFORE US SUBMITTED THAT THE ENTRY IN THE BOOKS OF ACCOUNTS WAS DULY RECORDED FOR THE EXPENDITURE INCURRED ON THE RANGOLI RESIDENCE AS DISCUSSED ABOVE. AS SUCH , THE BOOKS OF ACCOUNTS OF THE ASSESSEE WERE NOT DOUBTED , BUT THE SAME WERE ALSO ACCEPTED IN THE ASSESSMENT PROCEEDINGS. THUS THE LEARNED AR CLAIMED THAT NO ADDITION ON ACCOUNT OF THE EXPENDITURE INCURRED ON THE RESIDENCE OF THE ASSESSEE CAN BE MADE. 6. ON THE OTHER HAND, THE LEARNED DR SUBMITTED THAT THERE CANNOT BE ANY RE LIEF TO THE ASSESSEE AS THE ADDITION WAS BASED ON THE SEIZED MATERIALS AVAILABLE ON RECORD. THE LD. DR VEHEMENTLY SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. 7. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABL E ON RECORD. THE ISSUE IN THE INSTANT CASE RELATES WHETHER THE ASSESSEE HAS INCURRED ANY EXPENDITURE FROM THE UNDISCLOSED SOURCES ON HIS RANGOLI RESIDENCE. 7.1 FROM THE PRECEDING DISCUSSION, WE NOTE THAT THE ASSESSEE BEFORE THE VALUATION OFFICER HAS CLAI MED TO HAVE INCURRED AN EXPENSE OF 30 LAKHS ON HIS RESIDENCE AT RANGOLI FARM. HOWEVER , ON PERUSAL OF THE LEDGER COPY OF RANGOLI FARM, IT REVEALS THE TOTAL COST INCURRED TILL 31 ST MARCH 2009 AT RS. 4,62,861.00 ONLY. AS SUCH THE AMOUNT OF 20 LAKHS PAID TO SHRI RAMESH BHAI V. PORIYA MIGHT HAVE DEBITED IN HIS PERSONAL ACCOUNT AS EVIDENT FROM THE LEDGER COPY PLACED ON PAGES 47 - 48 OF THE PAPER BOOK. THUS IT IS INFERRED THAT THE ASSESSEE HAS SHOWN THE PAYMENT TO SHRI RAMESH BHAI V. PORIYA AS AN ADVANCE IN HIS BALANCE - SHEET AS ON 31 ST MARCH 2009. THE COPY OF THE BALANCE SHEET IS PLACED ON PAGES OF THE PAPER BOOK WHERE THE ASSESSEE HAS SHOWN LOANS AND ADVANCES IT(SS)A NO.151,237,152/AHD/2014 - 15 ASSTT. YEARS 2009 - 10 & 2010 - 11 PAGE 8 OF 26 OF 1,90,55,838.68 ONLY. HOWEVER, WE FIND THAT THERE WAS NO BREAKUP GIVEN BY THE ASSESSEE OF SUCH LOAN S AND ADVANCES. 7.2 IT IS ALSO PERTINENT TO NOTE THAT THE ASSESSEE IS MAINTAINING TWO BALANCE SHEETS , ONE FOR HIS BUSINESS AND THE SECOND IN HIS PERSONAL CAPACITY. THE PAYMENT TO SHRI RAMESH BHAI V. PORIYA WAS RECORDED IN HIS PERSONAL BALANCE SHEET. 7.3 EVEN WE ASSUME THAT THE ASSESSEE HAS MADE PAYMENT IN CASH TO THE TUNE OF RS. 20 LAKHS TO SHRI RAMESH BHAI V. PORIYA, STILL THE ASSESSEE FAILED TO JUSTIFY THE EXPENDITURE OF 30 LAKHS. AS SUCH, AS PER THE ASSESSEE , THE EXPENDITURE INCURRED TILL 31 ST OF MARCH 2009 AS RECORDED IN THE BOOKS OF ACCOUNTS COMES TO RUPEES 24,62,861( 20 LA C S PLUS 4,62,861.00) ONLY WHEREAS HE HAS CLAIMED AN EXPENDITURE OF 30 LAKHS BEFORE THE VALUATION OFFICER. THUS THE ASSESSEE HAS NOT EXPLAINED THE DIFFERENCE OF 5 , 37 , 139 .00 ON LY. 7.4 HOWEVER, THE ISSUE BEFORE US IS LIMITED TO THE EXTENT OF THE AMOUNT OF RS. 20 LAKHS PAID TO SHRI RAMESH BHAI V. PORIYA IN THE YEAR UNDER CONSIDERATION. REGARDING THIS , WE FIND THAT THE LEARNED CIT (A) HAS GIVEN A VERY CLEAR FINDING THAT THERE WAS NO ENTRY IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE AS ON THE DATE OF THE SEARCH. HOWEVER, WE NOTE THAT A LL THE PAYMENTS TO SHRI RAMESH BHAI V. PORIYA WERE MADE IN CASH AND THE ASSESSEE CLAIMED THAT SUCH CASH WAS AVAILABLE WITH HIM AS OPENING BALANCE WITH EFFECT FROM 1 ST APRIL 2003. THE COPIES OF THE CASH BOOK WERE MADE AVAILABLE BY THE LEARNED AR FOR THE ASSESSEE BEFORE US WHICH ARE PLACED ON RECORD. NONE OF THE AUTHORITY BELOW HAS POINTED OUT ANY DEFECT IN THE CASH BOOK FILED BY THE ASSESSEE. IT(SS)A NO.151,237,152/AHD/2014 - 15 ASSTT. YEARS 2009 - 10 & 2010 - 11 PAGE 9 OF 26 W E ALSO NOT E THAT THE ASSESSEE HAS FILED THE COPY OF THE ITR OF SHRI RAMESH BHAI V. PORIYA WHICH IS PLACED ON PAGES 44 TO 46 OF THE PAPER BOOK. THEREFORE, WE DISAGREE WITH THE FINDINGS OF THE AUTHORITIES BELOW THAT THE ASSESSEE HAS NOT FURNISHED THE IDENTI T Y OF SHRI RAMESH BHAI V. PORIYA . THE PAN AND THE ADDRESS OF THE PARTY W ERE AVAILABLE WITH THE AUTHORITIES BELOW YET ; THEY DID NOT VERIFY HIM BY ISSUING A NOTICE UNDER SECTION 131/133(6) OF THE ACT. 7.5 IN VIEW OF THE ABOVE, WE ARE NOT INCLINED TO UPHOLD THE FINDIN G OF THE LEARNED CIT (A). HENCE THE GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. COMING TO THE ITA NO. 237/A/2015 FOR THE AY 2009 - 10 THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE LD.CIT(A) ERRED ON FACTS AND IN LAW IN CONFIRMING PENALTY U/S.271(1)(C) OF THE ACT AMOUNTING TO RS.6,87,713/ - YOUR APPELLANT CRAVES LEAVE TO ADD, ALTER AND/OR AMEND ALL OR ANY OF GROUNDS BEFORE THE FINAL HEARING OF APPEAL. THE ISSUE RAISED BY THE ASSESSEE IS THAT THE LEARNED CIT (A) ERRED IN CONFIRMING THE PENALTY UNDER SECTION 271 ( 1 )(C) THE ACT FOR 6 , 87 , 713.00 ONLY. 8. AT THE OUTSET , WE NOTE THAT WE HAVE DELETED THE QUANTUM ADDITION IN RESPECT OF WHICH THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT WAS LEVIED IT(SS)A NO.151,237,152/AHD/2014 - 15 ASSTT. YEARS 2009 - 10 & 2010 - 11 PAGE 10 OF 26 VIDE PARAGRAPH NUMBER 7 OF THIS ORDER IN ITA NO. 151 /AHD/2014. THEREFORE WE ARE OF THE VIEW THAT THE PENALTY LEVIED UNDER SECTION 271(1) OF THE ACT DOES NOT SURVIVE. 8.1 REGAR D I N G THE PENALTY ON THE ADDITION OF RS. 10 , 000.00, WE ARE NOT INCLINED TO UPHOLD THE SAME DUE TO SMALLNESS OF THE AMOUNT. 8.2 ACCORDINGLY, WE DELETE THE PENALTY IMPOSED BY THE AO , WHICH WAS CONFIRMED BY THE LEARNED CIT (A). HENCE THE GROUND OF APPEAL OF TH E ASSESSEE IS ALLOWED. IN THE RESULT , THE APPEAL OF THE ASSESSEE IS ALLOWED. COMING TO THE ITA NO. 152/AHD/2014 AN APPEAL BY THE ASSESSEE . T HE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. THE LD. CIT (A) ERRED ON FACTS AND IN LAW IN CONFIRMING BROKERAGE/ COMMISSION AMOUNTING TO RS. 4,92,000/ - INSPITE OF HAVING SATISFIED HIMSELF THAT NO BROKERAGE/ COMMISSION WAS PAID TO APPELLANT BY SHRI BHIKHUBHAI N PADSALA. 2. THE LD. CIT (A) ERRED ON FACTS AND IN LAW IN CONFIRMING ADDITION OF RS. 13,2 5,000/ - BY HOLDING THE SAME TO BE UNEXPLAINED INSPITE OF SUCH EXPENDITURE ALREADY RECORDED IN THE BOOKS OF APPELLANT PRODUCED BEFORE THE ASSESSING OFFICER AND NO EVIDENCE OF UNACCOUNTED EXPENDITURE NOTICED IN THE COURSE OF SEARCH. 3. THE LD. CIT (A) ERRED ON FACTS AND IN LAW IN CONFIRMING ADDITION OF RS. 14,58,696/ - BY HOLDING THE SAME TO BE UNEXPLAINED INSPITE OF SUCH INVESTMENT ALREADY RECORDED IN THE BOOKS OF APPELLANT PRODUCED BEFORE THE ASSESSING OFFICER AND NO EVIDENCE OF UNACCOUNTED INVESTMENT NOTICED IN THE COURSE OF SEARCH. THE APPELLANT CRAVES PERMISSION TO ADD, ALTER, AMEND OR WITHDRAW ANY GROUND OR GROUNDS OF APPEAL EITHER BEFORE OR DURING THE COURSE OF HEARING OF THE APPEAL. IT(SS)A NO.151,237,152/AHD/2014 - 15 ASSTT. YEARS 2009 - 10 & 2010 - 11 PAGE 11 OF 26 9. A T THE OUTSET , WE NOTE THAT THE APPEAL OF THE ASSESSEE WAS LATE BY 34 1 DAYS. THE LEARNED AR BEFORE US SUBMITTED THAT THE LAST DATE FOR FILING THE APPEAL WAS 3 RD M AY 2013 , AND ACCORDINGLY , THE APPEAL FILING FEE WAS DEPOSITED ON 8 TH OF MAY 2013. HOWEVER , IN THE MEANTIME , THE R EVENUE FILE D THE APPEAL DATED 9 TH OF MAY 2 013 BEFORE THE ITAT. AS SUCH , THE ASSESSEE WAS OF THE VIEW THAT HE DOESN T REQUIRE TO FILE THE APPEAL AS THE REVENUE HAS PREFERRED THE APPEAL BEFORE THE ITAT. HE WAS ALSO OF THE VIEW THAT HE CAN RAISE HIS GRIEVANCES IN THE APPEAL P REFERRED BY THE R EVENUE BEFOR E THE ITAT. THE ASSESSEE IN SUPPORT OF HIS CLAIM ALSO FURNISHED THE AFFIDAVIT DATED 22 APRIL 2014 EXPLAINING THE REASONS FOR THE DELAY IN FILING THE APPEAL AS DISCUSSED ABOVE. ACCORDINGLY , THE LEARNED AR BEFORE US SUBMITTED THAT THE DELAY OCCU R RED IN FILIN G THE APPEAL BY THE ASSESSEE WAS BONA FIDES AND PLEADED TO CONDONE THE DELAY. 10. ON THE OTHER HAND, THE LEARNED DR CONSIDERING THE REASONS FOR THE DELAY IN FILING THE APPEAL DID NOT RAISE ANY OBJECTION ON THE CON DONATION OF THE DELAY. 11. HEARD BOTH TH E PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. CONSIDERING THE NATURE OF THE DELAY AS DISCUSSED ABOVE AND THE CONCESSION GIVEN BY THE LEARNED DR, WE ARE OF THE VIEW THAT THE DELAY CAN BE CONDONE D IN THE CASE ON HAND. ACCORDINGLY , WE CONDONE THE D ELAY AND PROCEED TO ADJUDICATE THE ISSUE ON MERIT. THE 1 ST ISSUE RAISED BY THE ASSESSEE IS THAT THE LEARNED CIT (A) ERRED IN CONFIRMING THE ADDITION MADE BY THE AO TO THE TUNE OF RS. 4, 92 , 000 ON ACCOUNT OF BROKERAGE/COMMISSION INCOME. IT(SS)A NO.151,237,152/AHD/2014 - 15 ASSTT. YEARS 2009 - 10 & 2010 - 11 PAGE 12 OF 26 12. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUAL AND ENGAGED IN THE BUSINESS OF TRADING IN LANDS AND COMMISSION INCOME. THERE WAS A SEARCH CONDUCTED AT THE RESIDENCE OF SHRI SANDEEP PADSALA UNDER SECTION 132 OF THE ACT DATED 4 TH OF MARCH 2 010. DURING SUCH VARIOUS INCRIMINATING DOCUMENTS WERE FOUND SHOWING THE TRANSACTIONS OF PURCHASE AND SALES OF LAND BETWEEN SHRI KALPESH BHAI, MUKESH BHAI , AND B. NANJI GROUP. ONE OF THE DOCUMENT B EARING PAGE NO. 142 OF THE ANNEXURE BS - 2 WAS SHOWING A PAYME NT TO THE ASSESSEE. THE DETAILS OF THE PAYMENT TO THE ASSESSEE BY SHRI SANDEEP PADSALA STANDS AS UNDER: SR.NO. DATE OF PAYMENT AMOUNT PAID PAID FOR THE BLOCK NO. AY TO WHICH PERTAINS 1. 02.09.2007 500000 - 2008 - 09 2. 05.09.2007 500000 - 2008 - 09 3. 13.09.2007 1000000 - 2008 - 09 4. 08.01.2009 500000 97 & 107 2009 - 10 5. 24.07.2009 2000000 97 & 107 2010 - 11 6. 28.07.2009 500000 97 & 107 2010 - 11 TOTAL 5000000 12.1 HOWEVER, THE ASSESSEE CLAIMED THAT HE HA D NOT RECEIVED ANY COMMISSION RECEIVED FROM SHRI SANDEEP PADSALA. AS PER THE ASSESSEE, THE PAYMENT RECEIVED BY HIM WAS PAID TO THE AGRICULTURIST AS A MIDDLEMAN AND WITHOUT EARNING ANY INCOME THEREON. ACCORDINGLY, THE ASSESSEE DID NOT OFFER THE COMMISSION IN COME IN HIS INCOME TAX RETURN DESPITE THE FACT HE DISCLOSED SUCH COMMISSION INCOME OF 40 LAKHS IN THE STATEMENT FURNISHED UNDER SECTION 132 (4) OF THE ACT. HOWEVER , THE ASSESSEE SUBSEQUENTLY RETRACTED FROM THE STATEMENT FURNISHED UNDER SECTION 132 ( 4 ) OF TH E ACT. IT(SS)A NO.151,237,152/AHD/2014 - 15 ASSTT. YEARS 2009 - 10 & 2010 - 11 PAGE 13 OF 26 12.2 HOWEVER, THE AO DISAGREED WITH THE CONTENTION OF THE ASSESSEE BY OBSERVING THAT THERE WAS HIS INVOLVEMENT IN THE DEAL OF THE LAND TRANSACTION AS THE PAYMENT WAS RO U TED T HROUGH HIM. THE ASSESSEE WAS PROVIDED THE OPPORTUNITY OF THE CROSS - EXAMIN ATION OF SHRI SANDEEP PADSALA , BUT HE FAILED TO AVAIL THE SAME. ACCORDINGLY , THE AO TREATED THE AMOUNT OF 25 LAKHS PERTAINING TO THE YEAR UNDER CONSIDERATION AS BROKERAGE/COMMISSION INCOME AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. THE A GGRIEVED ASSESSEE PREFERRED AN APPEAL TO THE LEARNED CIT (A). 13. THE ASSESSEE BEFORE THE LEARNED CIT (A) SUBMITTED THAT TH E DOCUMENT B EARING PAGE NO. 142 OF THE ANNEXURE BS - 2 IS A DUM B DOCUMENT AS IT DOES NOT BE AR ANY SIGNATURE, CONTAINS NO HEADINGS AND TITLE. THEREFORE THE SAME CANNOT BE TREATED AS A PIECE OF EVIDENCE UNDER THE E VIDENCE ACT. 13.1 THE AMOUNT RECEIVED FROM SHRI SANDEEP PADSALA WAS SUBSEQUENTLY GIVEN TO THE AGRICULTURIST. THE DETAILS OF SUCH AGRICULTURIST STAND AS UNDER: 1. RS.5,00,000/ - 02/09/2007 THAKOR BALDEVJI RAMAJI 2. RS.5,00,000/ - 05/09/2007 THAKOR ARJANJI RAMAJI 3. RS.10,00,000/ - 13/09/2007 THAKOR ARJANJI RAMAJI 4. RS.20,00,000/ - 24/07/2009 THAKOR SHAMBHUJI NATHAJI 5. RS.5,00,000/ - 28/07/2009 THAKOR SHAILESH AMARSINGH 6. RS.5,00,000/ - 08/01/2009 THAKOR SHAILESH AMARSINGH 13.2 T HE LEARNED CIT (A) DURING THE PROCEEDINGS OBSERVED THAT SHRI SANDEEP PADSALA HA D FURNISHED THE CASH FLOW STATEMENT BEFORE THE SETTLEMENT COMMISSION , WHICH WAS ACCEPTED. AS SUCH, THE NAME OF THE ASSESSEE DID NOT APPEAR IN THE LIST OF SUCH CASH FLOW STATEMENT FURNISHED TO THE SETTLEMENT COMMISSION , BUT THE NAME OF THE FARMERS APPEARED IN SUCH CASH FLOW STATEMENT. IT(SS)A NO.151,237,152/AHD/2014 - 15 ASSTT. YEARS 2009 - 10 & 2010 - 11 PAGE 14 OF 26 13.3 THE CLAIM OF THE ASSESSEE THAT HE HAS MADE THE PAYMENT TO THE FARMERS FOR THE AMOUNT RECEIVED FROM SHRI SANDEEP PADSALA WAS NOT VERIFIED BY THE AO DESPITE THE FACT THE NECESSARY DETAILS WERE FURNISHED ABOUT THE FARMERS BY THE ASSESSEE. IN VIEW OF THE ABOVE, THE LEARNED CIT (A) WAS OF THE OPINION THAT THE AMOUNT OF 25 LAKHS DURING THE YEAR ALLEGED TO HAVE BEEN RECEIVED BY THE ASSESSEE FROM SHRI SANDEEP PADSALA DOES NOT REPRESENT THE COMMISSION INCOME OF THE ASSESSEE. HOWEVER, THE LEARNED CIT (A) HAS HELD THAT THE FACT THAT THE ASSESSEE WAS INVOLVED IN THE LAND TRANSACTION DEAL CANNOT BE IGNORED. THEREFORE HE WAS OF THE VIEW THAT THE ASSESSEE MUST HAVE EARNED MINIMUM COMMISSION /BROKERAGE AT THE RATE 2% OF THE VALUE OF THE DEAL , I.E. 2.71 CRORES AMOUNTING T O 5,42,000.00 ONLY. 13.4 THE LEARNED CIT (A) FURT HER FOUND THAT THE AMOUNT OF 4 0 , 000 .00 AND 10 , 000 .00 ON ACCOUNT OF SUCH COMMISSION/BROKERAGE INCOME HAS BEEN TAXED IN THE ASSESSMENT YEARS 2008 - 09 AND 200 9 - 10 , RESPECTIVELY. THEREFORE, THE LEARNED CIT ( A) CONFIRMED THE ADDITION OF THE BALANCE AMOUNT OF RUPEES 4 , 92 , 000 .00 (5,42,000 - 50000) AS INCOME OF THE ASSESSEE. BEING AGGRIEVED BY THE ORDER OF THE LEARNED CIT (A) BOTH THE ASSESSEE AND THE REVENUE ARE IN APPEAL BEFORE US. 14. THE ASSESSEE IS IN APPE AL BEFORE US AGAINST THE CONFIRMATION OF THE ADDITION OF RUPEES 4,92,000 ONLY ON ACCOUNT OF BROKERAGE/COMMISSION INCOME WHEREAS THE R EVENUE IS IN AN APPEAL AGAINST THE DELETION MADE BY THE AO FOR IT(SS)A NO.151,237,152/AHD/2014 - 15 ASSTT. YEARS 2009 - 10 & 2010 - 11 PAGE 15 OF 26 20 , 08 , 000 .00 ONLY. THE RELEVANT GROUND OF APPEAL (NO. 1) IN THE REVENUE APPEAL BEARING ITA NO. 190/AHD/2013 READS AS UNDER: 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.20,08,000/ - OUT OF TOTAL ADDITION OF RS.25,00,000/ - BEING UNACCOUNTED BROKERAGE/COMMISSION MADE ON THE BASIS OF ENTRIES IN ANNEXURE BS - 2 SEIZED FROM SHRI SANDIP PADSALA AND ADMITTED BY THE ASSESSEE IN THE STATEMENT RECORDED U/S.132(4) OF THE ACT DATED 23.04.100 15. THE LEARNED AR BEFORE US SUBMITTED THAT THERE WAS NO DOCUMENTARY EVIDENCE AVAILABLE ON RECORD SUGGESTING THAT THE ASSESSEE HAS EARNED ANY COMMISSION INCOME OUT OF SUCH LAND TRANSACTION DEAL. 16. ON THE OTHER HAND , THE LEARNED DR BEFORE US SUBMITTED THAT T HE AMOUNT OF COMMISSION INCOME OF 25 LAKHS IS BASED ON THE SEIZED MATERIAL AS OBSERVED BY THE AO IN HIS ASSESSMENT ORDER. 17. BOTH THE LEARNED AR AND THE DR BEFORE US RELIED ON THE ORDER OF THE AUTHORITIES BELOW AS FAVORABLE TO THEM. 18. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE ISSUE IN THE INSTANT CASE RELATES TO THE FACT WHETHER THE AMOUNT RECORDED IN THE SEIZED MATERIAL APPEARING ON PAGE NO. 142 OF ANNEXURE BS - 2 REPRESENTS THE COMMISSI ON INCOME EARNED BY THE ASSESSEE FROM SHRI SANDEEP PADSALA OUT OF THE LAND TRANSACTION DEAL. INDEED, THE ASSESSEE IN THE STATEMENT FURNISHED UNDER SECTION 132 ( 4 ) OF THE ACT HAS ACCEPTED TO HAVE EARNED COMMISSION INCOME OF 4 0 LAKHS FROM SHRI SANDEEP PADSAL A OUT OF LAND TRANSACTION DEAL , BUT THE SAME STATEMENT WAS RETRACTED BY THE ASSESSEE SUBSEQUENTLY. NOW THE QUESTION ARISES WHETHER SUCH STATEMENT WAS BASED ON THE SEIZED MATERIAL FOUND DURING THE COURSE OF S EARCH . IN THIS REGARD, WE NOTE THAT THE ASSESSEE CLAIMED THAT THE AMOUNT RECEIVED FROM SHRI IT(SS)A NO.151,237,152/AHD/2014 - 15 ASSTT. YEARS 2009 - 10 & 2010 - 11 PAGE 16 OF 26 SANDEEP PADSALA WAS GIVEN SUBSEQUENTLY TO THE AGRICULTURIST. THE ASSESSEE IN SUPPORT OF HIS CLAIM HAS FURNISHED THE DETAILS OF THE AGRICULTURIST , WHICH HAS BEEN REPRODUCED IN THE PRECEDING PARAGRAPH. IN SUCH CIRCU MSTANCES, WE NOTE THAT THE ASSESSEE HAS DISCHARGED HIS ONUS BY FURNISHING THE NECESSARY DETAILS ABOUT THE AGRICULTURIST. ACCORDINGLY, T HE ONUS SHIFTS ON THE R EVENUE TO PROVE THE ASSESSEE WRONG BY COLLECTING THE EVIDENCE CONTRARY TO THE SUBMISSIONS FILED BY THE ASSESSEE. BUT WE NOTE THAT THE R EVENUE HAS NOT DONE SUCH EXERCISE. 18.1 WE ALSO NOTE THAT THE AO MADE A SIMILAR ADDITION IN THE ASSESSMENT YEAR 2008 - 0 9 FOR RS. 20 LAKHS , WHICH WAS REDUCED BY THE LEARNED CIT (A) TO THE EXTENT OF 40,000. ONLY. THE LEARNED DR BEFORE US HAS NOT BROUGHT ANYTHING ON RECORD SUGGESTING THAT WHETHER ANY APPEAL HAS BEEN PREFERRED AGAINST THE FINDING OF THE LEARNED CIT (A) FOR THE ASSESSMENT YEAR 2 008 - 0 9. 18.2 WE ALSO NOTE THAT THE SIMILAR ADDITION WAS MADE BY THE AO IN THE ASSESSMENT YEAR 2009 - 10 FOR 5 LAKHS WHICH WAS REDUCED BY THE LEARNED CIT (A) TO THE EXTENT OF 10,000.00 ONLY. THE LEARNED DR BEFORE US HAS NOT BROUGHT ANYTHING ON RECORD SUGG ESTING THAT WHETHER ANY APPEAL HAS BEEN PREFERRED AGAINST THE FINDING OF THE LEARNED CIT (A) FOR THE ASSESSMENT YEAR 2009 - 10. 18.3 SIMILARLY, WE ALSO NOTE THAT THE LEARNED CIT (A) HAS GIVEN CLEAR FINDING THAT SHRI SANDEEP PADSALA IN THE CASH FLOW STATEME NT FURNISHED TO THE SETTLEMENT COMMISSION HAS SHOWN SUCH PAYMENTS TO THE AGRICULTURIST AND NOT TO THE ASSESSEE. THE LEARNED DR BEFORE US HAS NOT BROUGHT ANY IOTA OF EVIDENCE CONTRARY TO THE FINDING OF THE LEARNED CIT (A). IN VIEW OF THE ABOVE, IT(SS)A NO.151,237,152/AHD/2014 - 15 ASSTT. YEARS 2009 - 10 & 2010 - 11 PAGE 17 OF 26 WE DO NOT FI ND ANY REASON TO DISTURB THE FINDING OF THE LEARNED CIT (A) FOR THE DELETION OF THE ADDITION MADE BY THE AO. 18.4 REGARDING THE CONFIRMATION OF THE ADDITION OF THE COMMISSION ON THE AMOUNT RS. 2.71 CRORES REPRESENTING THE VALUE OF THE LAND DEAL IN WHICH THE ASSESSEE WAS INVOLVED. INDEED, IN THE LAND DEALS , THE COMMISSION IS VERY MUCH PREVALENT AS PER THE BUSINESS PRACTICES. BUT IN OUR CONSIDERED VIEW, NO ADDITION CAN BE MADE MERELY BASED ON PREVAILING PRACTICES UNTIL AND UNLESS IT IS NOT SUPPORTED BASED ON SOME DOCUMENTARY EVIDENCE. HOWEVER, IN THE GIVEN FACTS AND CIRCUMSTANCES WE NOTE THAT THE LEARNED CIT (A) HAS GIVEN VERY CLEAR - CUT FINDING THAT THERE WAS AN ADDITION CONFIRMED BY HIM FOR 40,000 ON ACCOUNT OF THE COMMISSION PERTAIN ING TO THE ASSESSMENT YEAR 2008 - 0 9. BUT THE LEARNED AR HAS NOT BROUGHT ANY EVIDENCE SUGGESTING THAT THE ASSESSEE HAS PREFERRED AN APPEAL AGAINST SUCH ADDITION. THUS, IN THE ABSENCE OF ANY INFORMATION , IT IS INFERR ED THAT THE ASSESSEE HAS ACCEPTED SUCH ADDITION. THEREFORE, WE ARE INCLINED TO UPHOLD SUCH ADDITION AS IT IS ARISING OUT OF THE SAME LAND DEAL TRANSACTIONS. HENCE WE NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF THE LEARNED CIT (A). HENCE THE GROUND OF APPEAL OF THE REVENUE IS DISMISSED AND THE GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED. THE 2 ND ISSUE RAISED BY THE ASSESSEE IS THAT THE LEARNED CIT (A) ERRED IN CONFIRMING THE ADDITION OF 13.25 LAKHS ON ACCOUNT OF UNEXPLAINED EXPENDITURE. 19. AT THE OUTSET, WE NOTE THAT THE IMPUGNED ISSUES RAISED BY THE ASSESSEE IS IDENTICAL TO THE ISSUE RAISED BY THE ASSESSEE IN ITA NO. 151/AHD/2014 WHICH WE HAVE ALLOWED IN FAVOR OF THE ASSESSEE AND AGAINST THE REVENUE VIDE PARA IT(SS)A NO.151,237,152/AHD/2014 - 15 ASSTT. YEARS 2009 - 10 & 2010 - 11 PAGE 18 OF 26 NUMBER 7 OF THIS ORDER. FOR THE DETAI LED DISCUSSION, PLEASE REFER TO THE RELEVANT PARAGRAPH. ACCORDINGLY, WE ALLOW THE GROUND OF APPEAL RAISED BY THE ASSESSEE. THE NEXT ISSUE RAISED BY THE ASSESSEE IS THAT THE LD. CIT - A ERRED IN CONFIRMING THE ADDITION OF RS. 14,58,696.00 ON ACCOUNT OF UNEX PLAINED INVESTMENT. 20. AT THE OUTSET , WE NOTE THAT THERE IS NO GRIEVANCE TO THE ASSESSEE AS THE LD. CIT - A HAS DELETED THE IMPUGNED ADDITION MADE BY THE AO. HENCE WE DISMISS THE GROUND OF APPEAL OF THE ASSESSEE AS INFRUCTUOUS. IN THE RESULT , THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. COMING TO THE ITA NO. 190 /AHD/2013 T HE R EVENUE HAS RAISED THE FOLLOWING THE GROUNDS OF APPEAL: 1) THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.20,08,000/ - OUT OF TOTAL ADDITION OF RS.25,00,000/ - BEING UNACCOUNTED BROKERAGE/COMMISSION MADE ON THE BASIS OF ENTRIES IN ANNEXURE BS - 2 SEIZED FROM SHRI SANDIP PADSALA AND ADMITTED BY THE ASSESSEE IN THE STATEMENT RECORDED U/S 132(4) OF THE ACT DATED 23.04.100. 2) THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.13,57,696/ - OUT OF TOTAL ADDITION OF RS.26,82,696/ - MADE ON ACCOUNT OF UNEXPLAINED EXPENDITURE. 3) THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.14,58,696/ - MADE ON ACCOUNT OF UNEX PLAINED INVESTMENT. 4) THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 13,57,6967 - OUT OF TOTAL ADDITION OF RS.26,82,696/ - MADE ON ACCOUNT OF UNEXPLAINED EXPENDITURE. 5) THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE AD DITION OF RS.29,49,825/ - MADE U/S 41 (1) OF THE ACT. IT(SS)A NO.151,237,152/AHD/2014 - 15 ASSTT. YEARS 2009 - 10 & 2010 - 11 PAGE 19 OF 26 6) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE A.O. 7) IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE CIT (A) BE SET ASIDE AND THAT OF THE A.O. BE RESTORED TO THE ABOVE EXTENT. T HE 1 ST ISSUE RAISED BY THE R EVENUE IS THAT THE LEARNED CIT (A) ERRED IN RESTRICTING THE ADDITION MADE BY THE AO TO RS. 4,92,000.00 OUT OF THE TOTAL ADDITION OF 25 LAKHS ON ACCOUNT OF COMMISSION INCOME. 21. WE HAVE ALREADY ADJUDICATED THE AFORESAID ISSUE ALONG WITH THE APPEAL OF THE ASSESSEE BEARING ITA 152/AHD/2014 V IDE PARAGRAPH NUMBER 18 OF THIS ORDER. FOR A DETAILED DISCUSSION, PLEASE REFER THE RELEVANT PARAGRAPH. RESPECTFULLY FOLLOWING THE SAME , WE DISMISS THE G ROUND OF APPEAL OF THE R EVENUE. THE 2 ND AND 4 TH ISSUE RAISED BY THE R EVENUE IS THAT THE LEARNED CIT (A) ERRED IN RESTRICTING THE ADDITION 13.25 LACS OUT OF THE TOTAL ADDITION MADE BY THE AO AT 26 , 82 , 696. 00 22. AT THE OUTSET, WE NOTE THAT WE HAVE ALREADY ADJUDICATED THE IDENTICAL ISSUE RAISED BY THE ASSESSEE IN THE APPEAL OF THE ASSESSEE BEARING ITA 151 /AHD/2014 VIDE PARAGRAPH NUMBER 7 OF THIS ORDER. FOR A DETAILED DISCUSSION, PLEASE REFER THE RELEVANT PARAGRAPH. RESPECTFULLY FOLLOWING THE SAME , WE DISMI SS THE GROUND OF APPEAL OF THE R EVENUE. THE 3 RD ISSUE RAISED BY THE REVENUE IS THAT THE LEARNED CIT (A) ERRED IN DELETING THE ADDITION MADE BY THE AO FOR 14 , 58 , 696 .00 AS AN UNEXPLAINED INVESTMENT . IT(SS)A NO.151,237,152/AHD/2014 - 15 ASSTT. YEARS 2009 - 10 & 2010 - 11 PAGE 20 OF 26 23. THE ASSESSEE HAS AGREED (BANAKHAT) FOR THE PURCHASE OF THE LAND SITUATED AT VILLAGE MANIPUR BEARING SURVEY/BLOCK NO. 166 AS PER THE SEIZED MATERIALS BEARING PAGE NO. 43 TO 52 OF ANNEXURE - B 10. AS PER THE AGREEMENT THE ASSESSEE HAS PAID CASH OF 14 , 58 , 696 .00 ONLY , BUT THE SOURCE OF THE SAME WAS NOT EXPLAINED BASED ON ANY DOCUMENTARY EVIDENCE. AS SUCH , THE ASSESSEE AGREED TO DISCLOSE 14 , 51 , 000 AS INCOME IN THE INCOME TAX RETURN. BUT THE SAME WAS NOT OFFERED BY HIM IN THE RETURN OF INCOME. THE ASSESSEE ALSO CLAIMED TO ADJUST THE SA ME OUT OF THE TELESCOPING EFFECT AGAINST THE PAYMENT TO THE FARMERS. 23.1 HOWEVER, THE AO DISAGREED WITH THE CONTENTION OF THE ASSESSEE BY OBSERVING THAT HE HAS FAILED TO JUSTIFY THE SOURCE OF THE PAYMENT. ACCORDINGLY, THE AO MADE THE ADDITION AS UNEXPLA INED INVESTMENT TO THE TOTAL INCOME OF THE ASSESSEE. 24. THE A GGRIEVED ASSESSEE PREFERRED AN APPEAL TO THE LEARNE D C IT - A THE ASSESSEE BEFORE THE LEARNED CIT (A) SUBMITTED THAT HE HA D PAID THE A MOUNT ABOVE OUT OF THE CASH AVAILABLE WITH HIM WHICH WAS DUL Y DISCLOSED IN HIS PERSONAL BOOKS OF ACCOUNTS. 24.1 THE ASSESSEE BEFORE THE LEARNED CIT (A) ALSO REQUESTED TO PROVIDE THE BENEFIT OF THE TELESCOPING OF THE INCOME ADMITTED BY HIM ON ACCOUNT OF COMMISSION ET C. 25. THE LEARNED CIT (A) AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE DELETED THE ADDITION MADE BY HIM BY OBSERVING AS UNDER: IT(SS)A NO.151,237,152/AHD/2014 - 15 ASSTT. YEARS 2009 - 10 & 2010 - 11 PAGE 21 OF 26 10. I HAVE GONE THROUGH THE ASSESSMENT ORDER AND SUBMISSION OF THE A.R. OF THE APPELLANT CAREFULLY. IT IS SEEN THAT THE APPELLANT HAD MADE A BANAKHAT ON THE BASIS OF WHICH IT WAS SEEN THAT THE APPELLANT HAD PAID A SUM OF RS. 14,58,6967 - . DURING THE COURSE OF SEARCH AND SEIZURE PROCEEDINGS, THE APPELLANT MADE A DISCLOSURE OF RS. 14,51,000 / - ON THIS ACCOUNT. HOWEVER, THE SAID AMOUNT W AS NOT INCLUDED IN THE RETURN OF INCOME. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE APPELLANT STATED THAT THE SAID BANAKHAT HAD BEEN CANCELLED THROUGH A UNUTILIZED AGREEMENT ON 03.07.2010. .HE ALSO STATED THAT FACT OF TELESCOPING SHOULD BE GIVEN TO H IM. THE APPELLANT HAD STATED THAT THE INVESTMENTS IN THE BANAKHAT HAD DULY BEEN REFLECTED IN HIS PERSONAL BOOKS OF ACCOUNTS. 10.1 THE ABOVE CONTENTION OF THE APPELLANT IS NOT BELIEVABLE IN LIGHT OF THE FACT THAT NO PERSONAL BOOKS OF ACCOUNT WERE RECOVERED DURING THE COURSE OF SEARCH AND SEIZURE PROCEEDINGS. FURTHER, THE APPELLANT HAD DISCLOSED INCOME U/S. 132(4) OF THE I.T. ACT. NO PERSON WOULD MAKE A DISCLOSURE OF SUCH A HIGH AMOUNT IF ALL THE PAYMENTS WERE REFLECTED IN THE BOOKS OF ACCOUNT. IT IS ALSO SE EN THAT CANCELLATION OF THE BANAKHAT BY WAY OF A NOTORISED AGREEMENT ON 03.07.2010 HAS NO BEARING ON THE ADDITION REQUIRED TO BE MADE IN THE CASE OF THE APPELLANT BECAUSE THE COST OF INVESTMENTS WAS INCURRED ON THE DAY OF BANAKHAT THAT IS THE CASH PAID. TH E SOURCE OF THIS CASH REMAINED UNEXPLAINED WHEN THE INVESTMENT WAS MADE. SUBSEQUENT CANCELLATION OF THE BANAKHAT DOES NOT EFFECT THE ADDITION REQUIRED TO BE MADE U/S 69 OF THE ACT IN A.Y. 2010 - 11. HOWEVER, IT IS SEEN THAT THE APPELLANT HAD UNDISCLOSED INCO ME BY WAY OF COMMISSION TO THE EXTENT OF RS. 12,00,0007 - FROM WHICH HE HAD RECEIVED FROM SHRI BHIKHUBHAI N. PADSALA AND AS PER THE APPELLANT HAD BEEN OFFERED IN THE RETURN OF INCOME AND HAD BEEN DECLARED U/S.132(4) OF THE I.T. ACT. WHILE DECIDING GROUND NO .2, IT HAS BEEN HELD THAT THE APPELLANT HAD UNDISCLOSED INCOME IN THE FORM OF BROKERAGE TO THE EXTENT OF RS. 12,00,0007 - . IT IS ALSO SEEN THAT WHILE DECIDING GROUND NO.L, IT HAS BEEN HELD THAT THE UNDISCLOSED INCOME IN RESPECT OF JAGATPUR LAND HAD BEEN COM PUTED AT RS.4,92,0007 - DURING THIS YEAR. THE ABOVE UNACCOUNTED INCOMES ARE SUFFICIENT TO RECOVER THE UNDISCLOSED INVESTMENT IN THE BANAKHAT IN RESPECT OF LAND I.E. VILLAGE MANIPUR SURVEY NO.166 OF RS. 14,58,6967 - . IT IS CLEAR THAT THE ASSESSING OFFICER CAN NOT MAKE ADDITION FOR UNDISCLOSED INCOME AS WELL AS UNDISCLOSED INVESTMENTS UNLESS IT IS PROVED THAT SOME OTHER FUNDS WERE UTILISED FOR MAKING THE UNDISCLOSED INCOME. THE BENEFIT OF TELESCOPING OF UNDISCLOSED INCOME TO COVER UNDISCLOSED INVESTMENT HAS TO B E GRANTED. 10.2 IN VIEW OF THE ABOVE, SINCE THE APPELLANT HAD SUFFICIENT UNDISCLOSED INCOME BY WAY OF BROKERAGE 7 COMMISSION TO THE EXTENT OF RS. 12,00,00 07 - + RS.4,92,0007 - = 16,92,000/ - TO COVER THE UNEXPLAINED EXPENDITURE. HENCE, NO SEPARATE ADDITION NEEDS TO BE MADE FOR INVESTMENT OF RS.14,58,696/ - . B EING AGGRIEVED BY THE ORDER OF THE LEARNED CIT (A), THE R EVENUE IS IN APPEAL BEFORE US. IT(SS)A NO.151,237,152/AHD/2014 - 15 ASSTT. YEARS 2009 - 10 & 2010 - 11 PAGE 22 OF 26 26. THE LEARNED DR BEFORE US SUBMITTED THAT TH E ADDITION WAS BASED ON THE SEIZED MATERIAL AS DISCUSSED ABOVE. THEREFORE THERE CANNOT BE ANY BENEFIT OF TELESCOPING . THE LEARNED DR VEHEMENTLY SUPPORTED THE ORDER OF THE AO. 27. ON THE OTHER HAND , THE LEARNED AR VEHEMENTLY SUPPORTED THE ORDER OF THE LEARNE D C IT - A. 28. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE , THE ISSUE RELATES TO THE INVESTMENT MADE BY THE ASSESSEE FOR THE PURCHASE OF T HE LAND. THE ASSESSEE AS PER THE AGREEMENT HAS MADE THE PAYMENT OF 14.58 LAKHS , BUT THE ASSESSEE FAILED TO EXPLAIN THE SOURCE OF THE CASH. 28.1 THE LEARNED CIT (A) IN THE GIVEN CASE HAS DELETED THE ADDITION MADE BY THE AO AFTER G IVING THE TELESCOPING BEN EFIT. REGAR D ING THE SOURCE OF THE CASH IN THE HANDS OF THE ASSESSEE, WE NOTE THAT THERE WAS SUFFICIENT CASH AVAILABLE WITH HIM IN HIS PERSONAL CAPACITY . THIS FACT CAN BE VERIFIED FROM THE PERSONAL CASH BOOK , WHICH WAS ALSO FURNISHED BEFORE THE AUTHORITIES BELOW. THE IMPUGNED CASH BOOK WAS ALSO NOT DOUBTED BY THE AUTHORITIES BELOW BASED ON ANY COGENT REASONS. THE COPY OF THE LEDGER SHOWING THE INVESTMENT IS PLACED ON PAGE 154 OF THE PB. 28.2 WE ALSO NOTE THAT THAT THE INCOME OFFERED BY THE ASSESSEE AS A RE SULT OF SEARCH DESERVES FOR THE TELESCOPING BENEFIT AS HELD BY THE LD. CIT - A. ACCORDINGLY , WE CONCUR WITH THE ORDER OF THE LEARNED CIT (A) . HEN CE THE GROUND OF APPEAL OF THE R EVENUE IS DISMISSED . IT(SS)A NO.151,237,152/AHD/2014 - 15 ASSTT. YEARS 2009 - 10 & 2010 - 11 PAGE 23 OF 26 28.3 THE LAST ISSUE RAISED BY THE R EVENUE IN GROUND NO. 5 I S THAT THE LEARNED CIT (A) ORDER IN DELETING THE ADDITION MADE BY THE AO FOR 2 9 , 49 , 825 .00 ON ACCOUNT OF THE CESSATION OF LIABILITY. 28.4 THE AO DURING THE ASSESSMENT PROCEEDINGS FOUND THAT THE ASSESSEE HAS SHOWN OUTSTANDING LIABILITIES IN THE BOOKS OF AC COUNTS ON ACCOUNT OF UNSECURED LOAN AND THE CREDITORS AMOUNTING TO RS. 2 9 , 49 , 825. 00 THE DETAILS OF THE PARTIES ARE AVAILABLE ON PAGE 18 OF THE AO ORDER. THE AO FURTHER NOTED THAT THERE WAS NO TRANSACTION WITH THE AFORESAID PARTIES FOR THE LAST SEVERAL YEARS. ACCORDINGLY , HE WAS OF THE VIEW THAT SUCH LIABILITY IS NOT PAYABLE BY THE ASSESS EE. ACCORDINGLY , THE AO TREATED THE SUM OF RS. 29 , 49 , 825 .00 AS INCOME UNDER SECTION 41 OF THE ACT AS THE LIABILITY HAS CEASED TO EXIST. ACCORDINGLY , THE AO ADDED THE SUM OF RS. 29 , 49 , 825 .00 TO THE TOTAL INCOME OF THE ASSESSEE. 29. THE A GGRIEVED ASSESSEE P REFERRED AN APPEAL TO THE LEARNED CIT (A) WHO HAS DELETED THE ADDITION MADE BY THE AO BY OBSERVING AS UNDER: 12. I HAVE CONSIDERED THE FINDINGS OF THE ASSESSING OFFICER IN THE ASSESSMENT ORDER AND SUBMISSION OF THE A.R. OF THE APPELLANT CAREFULLY. IT IS SEEN THAT THE ASSESSING OFFICER HAS TAXED AN AMOUNT OF RS.29,49,825/ - DURING THE YEAR. IT IS SEEN THAT IN RESPECT OF THE SAID ENTRIES, THE APPELLANT HAS NOT MADE ANY CHANGE IN THE ENTRIES IN THE BOOKS OF ACCOUNTS. THE ASSESSING OFFICER HAS NOT DISPUTED THE FACTS THAT ALL THE LIABILITIES ARE OLD LIABILITIES. HE HAS NOT GIVEN ANY FINDING THAT THE LIABILITIES WERE INCURRED DURING CURRENT YEAR. HE HAS ALSO NOT ESTABLISHED THE FACT THAT THE LIABILITIES HAVE CEASED, THE ASSESSING OFFICER HAS ONLY ATTEMPTED TO VER IFY THE PRESENT POSITION OF LIABILITIES BY ASKING THE APPELLANT TO ESTABLISH THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE PERSON AGAINST WHOM THESE LIABILITIES ARE SAID TO BE OUTSTANDING. 12.1 IN THE CASE OF NEW COMMERCIAL MILLS CO. LTD. VS. DCIT REPORTED IN (2002) 125 TAXMAN 179 (AHD.) (MAG.), IT HAS BEEN HELD THAT UNLESS IT IS PROVED BY THE ASSESSING OFFICER THAT THE LIABILITIES HAD CEASED BECAUSE OF THE ENTRIES IN THE BOOKS OF ACCOUNTS BY THE ASSESSEE REGARDING THE CESSATION, SECTION 41(1) CANN OT BE INVOKED MERELY BECAUSE THE APPELLANT IS UNABLE TO FURNISH THE CURRENT ADDRESS AND CONFIRMATION OF THE PARTIES. 12.2 THE FULL BENCH OF GUJARAT HIGH COURT IN THE CASE OF CFT VS. BHARAT IRON & STEEL INDUSTRIES REPORTED IN (1992) 105 CTR 331 (GUJ.) FULL BENCH HAS HELD .IN THIS REGARD AS UNDER : - IT(SS)A NO.151,237,152/AHD/2014 - 15 ASSTT. YEARS 2009 - 10 & 2010 - 11 PAGE 24 OF 26 'THE KEY WORDS IN SECTION 41(1) ARE 'THE ASSESSEE HAS OBTAINED, WHETHER IN CASH OR IN ANY OTHER MANNER WHATSOEVER, ANY AMOUNT IN RESPECT OF SUCH LOSS OR EXPENDITURE OR SOME BENEFIT IN RESPECT OF SUCH TRADING LI ABILITY BY WAY OF REMISSION OR CESSATION THEREOF. IT IS THE OBTAINING IN 'CASH OR IN ANY OTHER MANNER WHATSOEVER, ANY AMOUNT... OR SOME BENEFIT IN RESPECT OF SUCH TRADING LIABILITY... ' WHICH WAS CONTEMPLATED BY THE LEGISLATURE WHEN IT USED THE WORDS 'HAS OBTAINED'. SECTION 41(1) INTRODUCES A FICTION BY WHICH AN ALLOWANCE OR DEDUCTION HAS BEEN MADE IN THE ASSESSMENT FOR ANY YEAR IN RESPECT OF LOSS, EXPENDITURE OR TRADING LIABILITY INCURRED BY THE ASSESSEE, AND SUBSEQUENTLY, DURING ANY PREVIOUS YEAR. WHERE T HE ASSESSEE HAS OBTAINED, WHETHER IN CASH OR IN ANY OTHER MANNER WHATSOEVER, ANY AMOUNT IN RESPECT OF SUCH LOSS OR EXPENDITURE OR SOME BENEFIT IN RESPECT OF SUCH TRADING LIABILITY BY WAY OF REMISSION OR CESSATION THEREOF, THE AMOUNT OBTAINED BY HIM OR THE VALUE OF BENEFIT ACCRUING TO HIM, SHALL BE DEEMED TO BE PROFITS AND GAINS OF THE BUSINESS OR PROFESSION AND, ACCORDINGLY, SHALL BE CHARGEABLE TO INCOME - TAX AS INCOME OF THAT PREVIOUS YEAR, WHETHER THE BUSINESS OR PROFESSION IN RESPECT OF WHICH THE ALLOWAN CE OR DEDUCTION HAS BEEN MADE IS IN EXISTENCE IN THAT YEAR OR NOT. THE FICTION IS AN INDIVISIBLE ONE. IT CANNOT BE ENLARGED BY IMPORTING ANOTHER FICTION, NAMELY, THAT IF THE AMOUNT WAS OBTAINABLE OR RECEIVABLE DURING THE PREVIOUS YEAR, IT MUST BE DEEMED TO HAVE BEEN OBTAINED OR RECEIVED DURING THAT YEAR. IN VIEW OF THE DECISIONS OF THE SUPREME COURT IN CIT V. MOON MILLS LTD. [1966] 59_ 777? 574 AND CIT V. HINDUSTAN HOUSING & LAND DEVELOPMENT TRUST LTD. [1986] 161 ITR 524 AND THE VIEW EXPRESSED BY THE DIVISION BENCH IN CIT V. RASHMI TRADING [1976] 103 ITR 312 (GUJ.), THE WORDS 'OBTAINED, WHETHER IN CASH OR IN ANY OTHER MANNER WHATSOEVER, ANY AMOUNT IN RESPECT OF SUCH LOSS OR EXPENDITURE' OCCURRING IN SECTION 41(1) CLEARLY REFER TO THE ACTUAL RECEIVING O F THE CASH OF THAT AMOUNT. THE AMOUNT MAY BE ACTUALLY RECEIVED OR IT MAY BE ADJUSTED BY WAY OF AN ADJUSTMENT ENTRY OR A CREDIT NOTE OR IN ANY OTHER FORM WHEN THE CASH OR THE EQUIVALENT OF THE CASH CAN BE SAID TO HAVE BEEN RECEIVED BY THE ASSESSEE. BUT IT M UST BE THE OBTAINING OF THE ACTUAL AMOUNT WHICH IS CONTEMPLATED BY THE LEGISLATURE WHEN IT USED THE ABOVE WORDS. IN THE CONTEXT IN WHICH THESE WORDS OCCUR, NO OTHER MEANING WAS POSSIBLE. ' 12.3 THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. SUGAULI SUGA R WORKS PVT.LTD. REPORTED IN (1999) 236 ITR 518 (SC) HAS HELD AS UNDER: 'THE FOLLOWING WORDS IN THE SECTION ARE IMPORTANT : 'THE ASSESSEE HAD OBTAINED, WHETHER IN CASH OR IN ANY OTHER MANNER WHATSOEVER ANY AMOUNT IN RESPECT OF SUCH LOSS OR EXPENDITURE OR S OME BENEFIT IN RESPECT OF SUCH TRADING LIABILITY BY WAY OF REMISSION OR CESSATION THEREOF, THE AMOUNT OBTAINED BY HIM'. THUS, THE SECTION CONTEMPLATES THE OBTAINING BY THE ASSESSEE OF AN AMOUNT EITHER IN CASH OR IN ANY OTHER MANNER, WHATSOEVER, OR A BENEFI T BY WAY OF REMISSION OR CESSATION AND IT SHOULD BE OF A PARTICULAR AMOUNT OBTAINED BY HIM. THUS, THE OBTAINING BY THE ASSESSEE OF A BENEFIT BY VIRTUE OF REMISSION OR CESSATION IS SINE QUA NON FOR THE APPLICATION OF THIS SECTION. THE MERE FACT THAT THE ASS ESSEE HAS MADE AN ENTRY OF TRANSFER IN HIS ACCOUNTS UNILATERALLY WILL NOT ENABLE THE DEPARTMENT TO SAY THAT SECTION 41 WOULD APPLY AND THE AMOUNT SHOULD BE INCLUDED IN THE TOTAL INCOME OF THE ASSESSEE. THE PRINCIPLE THAT EXPIRY OF PERIOD OF LIMITATION PRES CRIBED UNDER THE LIMITATION ACT CANNOT EXTINGUISH THE DEBT BUT IT WILL ONLY PREVENT THE CREDITOR FROM ENFORCING THE DEBT IS WELL - SETTIED. IF THAT PRINCIPLE IS APPLIED, IT IS CLEAR THAT MERE ENTRY IN THE BOOKS OF ACCOUNT OF THE DEBTOR MADE UNILATERALLY WITH OUT ANY ACT ON THE PART OF THE CREDITOR WILL NOT ENABLE THE DEBTOR TO SAY THAT THE LIABILITY HAS COME TO AN END. APART FROM THAT, THAT WILL NOT BY ITSELF CONFER ANY BENEFIT ON THE DEBTOR AS CONTEMPLATED BY THE SECTION. ' IT(SS)A NO.151,237,152/AHD/2014 - 15 ASSTT. YEARS 2009 - 10 & 2010 - 11 PAGE 25 OF 26 12.4 IN VIEW OF THE FACT THAT THER E IS NO ACTION ON THE PART OF THE ASSESSEE TO WRITE OFF THE LIABILITIES IN HIS BOOKS OF ACCOUNTS OR THAT OF THE CREDITORS STATING THAT THEY HAVE FORGONE LIABILITIES PENDING WITH THE APPELLANT AND THAT THE ASSESSING OFFICER HAS ALSO NOT ESTABLISHED THE FACT THAT THE LAIBILITES WERE TRADING LIABILITIES AND THAT THE APPELLANT HAD BENEFITED IN ANY MANNER BY WAY OF REDUCING THE INCOME WHEN SUCH LIABILITIES WERE INCURRED, ACTION OF THE ASSESSING OFFICER IN INVOKING SECTION 4(1) OF THE I.T ACT IS NOT JUSTIFIED. SE CTION 41(1) CANNOT BE INVOKED BY ASSUMING THAT THE LIABILITIES HAD CEASED BECAUSE THE APPELLANT WAS UNABLE TO FURNISH THE ADDRESS AND ONFIRMSATIONS FROM THE PERSONS IN RESPECT OF WHOM THE LIABILITIES EXISTED. B EING AGGRIEVED BY THE ORDER OF THE LEARNE D C IT - A , R EVENUE IS IN APPEAL BEFORE US. 30. THE LEARNED DR AND THE AR BEFORE US RELIED ON THE ORDER OF THE AUTHORITIES BELOW AS FAVORABLE TO THEM. 31. W E HAVE HEAR D THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS AN ADMITTED FACT THAT THE LIABILITIES AS SHOWN BY THE ASSESSEE WERE NOT WRITTEN OFF IN THE BOOKS OF ACCOUNTS. THEREFORE IN OUR CONSIDERED VIEW , THE SAME CANNOT BE TREATED AS INCOME UNDER THE PROVISIONS O F SECTION 41 ( 1 ) OF THE ACT. IT IS THE SETTLED LAW AN ITEM OF CURRENT LIABILITY CAN BE TREATED AS INCOME OF THE ASSESSEE IF IT IS WRITTEN O F F BY THE ASSESSEE IN THE BOOKS OF ACCOUNTS. AS SUCH , THE PERIOD SPECIFIED UNDER THE L IMITATION ACT DOES NOT APPLY TO THE INCOME TAX PROCEEDINGS. ACCORDINGLY , WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF THE LEARNE D C IT - A. HENCE THE GROUND OF APPEAL OF THE R EVENUE IS DISMISSED. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. 32. IN THE COMBINED RESULTS , APPEALS OF THE ASSESSEE BEARING IT(SS)A NOS. 151 - 152/AHD/2014 ARE PARTLY ALLOWED AND NO. 237/AHD/2015 IS ALLOWED IT(SS)A NO.151,237,152/AHD/2014 - 15 ASSTT. YEARS 2009 - 10 & 2010 - 11 PAGE 26 OF 26 WHEREAS THE APPEAL OF REVENUE BEARING IT(SS)A NO.190/AHD/2013 IS DISMISSED. O RDER PRONOUNCED IN THE COURT ON 28 /06 / 2019 AT AHMEDABAD. - SD - - SD - (MAHAVIR PRASAD ) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER (TRUE COPY) A HMEDABAD; DATED 28 / 06 /2019 M ANISH / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT 5. , / DR, ITAT, 6. / GUARD FILE .