Shri Surendra Mehta, Bhopal V. The ACIT 3(1), Bhopal

ITSSA 158/IND/2012

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 8798 (ITAT-INDORE)
• Duration Of Justice: 10 month(s) 15 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 22-03-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 07-05-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MRIDULA BAJPAI
• Assessee Lawyers: YESHWANT SHARMA
• Keywords: Unexplained investment; Unexplained expenditure; Gift; Income from undisclosed sources; Search and seizure; Salary income; Source of fund; Additional evidence; Corroborative evidences
• Section: 143(3); 142(1); 153A; 234B; 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARM A, A.M. PAN NO. : ABFPM9882E I.T(SS).A.NOS. 149 TO 153/IND/2012 A.YS. : 2003-04 TO 2007-08 SHRI HITESH MEHTA, ACIT, BHOPAL VS 3(1), BHOPAL APPELLANT RESPONDENT PAN NO. : ABFPM9683F I.T(SS).A.NOS. 160 TO 166/IND/2012 A.YS. : 2003-04 TO 2009-10 SHRI SANDEEP MEHTA, ACIT, BHOPAL VS 3(1), BHOPAL APPELLANT RESPONDENT PAN NO. : AFSPM8170Q I.T(SS).A.NOS. 268 TO 273/IND/2012 A.YS. : 2003-04 TO 2008-09 ACIT, SHRI SURENDRA MEHTA, 3(1), VS BHOPAL BHOPAL APPELLANT RESPONDENT PAN NO. : AFSPM8170Q I.T(SS).A.NOS. 154 TO 159/IND/2012 A.YS. : 2003-04 TO 2008-09 SHRI SURENDRA MEHTA, ACIT, BHOPAL VS 3(1), BHOPAL APPELLANT RESPONDENT PAN NO. : ABFPM9882E I.T(SS).A.NOS. 206 TO 212/IND/2012 2 2 A.YS. : 2003-04 TO 2009-10 SHRI SANJAY MEHTA, ACIT, BHOPAL VS 3(1), BHOPAL APPELLANT RESPONDENT PAN NO. : AFSPM8168A I.T(SS).A.NOS. 167 TO 172/IND/2012 A.YS. : 2003-04 TO 2008-09 SMT.PRIYA MEHTA, ACIT, BHOPAL VS 3(1), BHOPAL APPELLANT RESPONDENT ASSESSEE BY : SHRI YESHWANT SHARMA, C.A. DEPARTMENT BY : SMT. MRIDULA BAJPAI, CIT DR DATE OF HEARING : 13 . 0 2 . 201 3 DATE OF PRONOUNCEMENT : 22 . 0 3 .201 3 O R D E R PER R. C. SHARMA, A.M. HITESH METHA : I.T(SS).A.NOS. 149 TO 153/IND/2012 : THESE ARE THE APPEALS FILED BY THE ASSESSEE AGAINS T THE ORDER OF CIT(A) DATED 2.3.2012 FOR THE ASSESSMENT Y EAR 2003-04 TO 2007-08 IN THE MATTER OF ORDER PASSED U/ S 153A READ WITH SECTION 143(3) OF THE INCOME-TAX ACT, 196 1. 3 3 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. THERE WAS SEARCH & SEIZURE OPERATION U/S 1 32(1) AT THE RESIDENTIAL PREMISES OF THE ASSESSEE AT E-5/ 148, ARERA COLONY, BHOPAL, ON 30.5.2008. DURING COURSE O F SEARCH INCRIMINATING MATERIAL WAS FOUND ON THE BASI S OF WHICH ASSESSMENTS WERE FRAMED U/S 153A IN RESPECT O F ALL THE YEARS UNDER CONSIDERATION. THE ADDITIONS WERE M ADE BY THE ASSESSING OFFICER ON THE BASIS OF CASH DEPOSITE D IN THE BANK AS WELL AS AGRICULTURAL INCOME NOT ACCEPTED BY THE ASSESSING OFFICER AND THE SAME WAS TREATED AS INCOM E FROM OTHER SOURCES. 3. BY THE IMPUGNED ORDER, THE LD. CIT(A) CONFIRMED THE ACTION OF ASSESSING OFFICER ON ACCOUNT OF TREATING AGRICULTURAL INCOME AS INCOME FROM OTHER SOURCES. H OWEVER, ADDITIONS MADE ON ACCOUNT OF CASH DEPOSITED WERE DE LETED BY THE LD.CIT(A) BY OBSERVING THAT CASH DEPOSITED I N THE BANK IS LOWER THAN THE ADDITION ON ACCOUNT OF AGRIC ULTURAL INCOME IN ALL THE YEARS UNDER CONSIDERATION. AGAINS T THE ABOVE ORDER OF CIT(A), THE ASSESSEE IS IN FURTHER A PPEAL BEFORE US. HOWEVER, NO APPEALS HAVE BEEN FILED BY T HE 4 4 REVENUE WITH REGARD TO DELETION MADE ON ACCOUNT OF CASH DEPOSITED IN THE BANK ACCOUNT. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAV E GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AN D FOUND FROM RECORD THAT DURING THE COURSE OF ASSESSMENT, T HE ASSESSING OFFICER FOUND THAT THE ASSESSEE WAS NOT C ARRYING ON AGRICULTURAL ACTIVITY HIMSELF. THE ASSESSING OFF ICER ALSO FOUND THAT ORIGINAL COPY OF LEASE AGREEMENTS WERE N OT PRODUCED. AFTER RECORDING HIS REASONS, HE TREATED AGRICULTURAL INCOME AS INCOME FROM OTHER SOURCES. S AME REASONING WAS GIVEN BY ASSESSING OFFICER AS GIVEN I N THE CASE OF ARUN SEHLOT. PRECISE OBSERVATION OF ASSESSI NG OFFICER WAS AS UNDER :- 1. THE ENTIRE AGRICULTURE OPERATION HAS BEEN DONE ON LEASE HOLD LAND ONLY, NO LAND OWNED BY THE ASSESSEE HAS BEEN USED FOR AGRICULTURE OPERATION. AS PER THE PHOTOCOPY PRODUCED, THE LEASE HAS BEEN SIGNED BETWE EN THE ASSESSEE AND VARIOUS FARMERS/LANDOWNERS. DESPIT E BEING ASKED SPECIFICALLY, THE ASSESSEE DID NOT PROD UCE THE ORIGINAL AGREEMENT OF THE LEASE SIGNED WITH THE VARIOUS FARMERS. THE PHOTOCOPY OF A DOCUMENT WHICH 5 5 HAS NOT BEEN VERIFIED BY ANY APPROVED AUTHORITY IS NOT A VALID DOCUMENT. THIS FACT HAS BEEN ESTABLISHED IN VARIOUS CASES AND IN VARIOUS COURTS OF THIS COUNTRY . THE ASSESSEE IN HIS REPLY IN POINT NO. I STATED THAT HE SHALL SUBMIT THE SAME TO YOUR GOOD SELF NO SOONER THESE A RE LOCATED. THE ASSESSEE HOWEVER DID NOT SUBMIT THE ORIGINAL LEASE AGREEMENT TILL THE END OF ASSESSMENT PROCEEDINGS. HISTORY OF ASSESSMENT PROCEEDING U/S 143(3) OR RAJ GROUP OF INDUSTRIES FOR AY 2005-06:- DURING THE ASSESSMENT PROCEEDINGS OF A Y 2005-06 FOR VARIOUS COMPANIES (M/S RAJ HOMES PVT. LTD. M/S MINAL BUILDERS PVT. LTD., M/S RAJ EVENTS & ENTERTAINMENT PVT. LTD.) IN WHICH MR. ARUN SEHLOT IS DIRECTOR/PARTNER OR HAS SUBSTANTIAL INTEREST), IT WAS FOUND THAT THE COMPANIES HAVE CLAIMED AGRICULTURE INCOME, SHOWN TO HAVE DONE THRO UGH LEASE AGREEMENTS. THE ISSUE OF AGRICULTURE INCOME W AS ENQUIRED INTO BY THE ACIT-3(1) DURING THE SCRUTINY PROCEEDINGS U/S 143(3) FOR A.Y, 2005-06. TO VERIFY THE AUTHENTICITY OF LEASE AGREEMENT, VARIOUS FANNERS WHOSE NAME APPEARS IN THE LEASE AGREEMENTS, PROVIDED BY THE VARIOUS COMPANIES. WERE CALLED. MAJORITY OF THE FAN NERS 6 6 APPEARING BEFORE THE ACIT -3(1) DURING THE ASSESSME NT PROCEEDINGS GA VE A STATEMENT ON OATH DENYING THAT THEY HAD EVER GIVEN A LEASE TO ANY OF THE RAJ GROUP OF COMPANIES SOME OF THE FARMERS GAVE SWORN AFFIDAVITS DULY NOTARIZED STATING THAT THEY DON'T KNOW ARUN SEHLOT. HIS FAMILY MEMBERS OR RAJ GROUP OF INDUSTRIES AND THE LEASE AGREEMENTS PRODUCED DURING THE ASSESSMENT PROCEEDIN GS ARE BOGUS. FACED WITH THE TRUTH THE AR OF RAJ GROUP OF COMPANIES AGREED TO SURRENDER THE ENTIRE AGRICULTUR E INCOME EXEMPTION CLAIMED AND ASKED FOR THE AGRICULT URE INCOME TO BE TREATED AS INCOME FROM OTHER SOURCES V IDE A LETTER SUBMITTED TO THE OFFICE OF ACLT-3(L). FURTH.ER SOME OF THESE FARMERS WERE CROSS EXAMINED BY THE COUNSEL OF THE RAJ GROUP OF INDUSTRIES DURING PENALTY PROCEEDINGS U/S 271(1)(C) AND EVEN THEN, THEY DENIED GIVING ANY LAN D ON LEASE TO RAJ GROUP OF INDUSTRIES. 2. THE ASSESSING OFFICER ALSO RECORDED STATEMENT OF THESE FARMERS ON THE BASIS OF WHICH HE REACHED TO T HE CONCLUSION THAT THE LEASE AGREEMENT ALLEGED TO BE E NTERED BY THE ASSESSEE WITH THE FARMERS WAS UNTRUE. PRECISE OBSERVATION OF ASSESSING OFFICER WAS AS UNDER :- 7 7 AFTER THE LEASE AGREEMENTS WERE FOUND TO BE UNTRUE DURING ASSESSMENT PROCEEDINGS FOR A.Y.2005--06 FOR HIS VARIOUS COMPANIES, THE ASSESSEE WAS INTENTIONALLY AVOIDING PRESENTING ORIGINAL OF THE L EASE DOCUMENTS DURING THE CURRENT ASSESSMENT PROCEEDINGS. THIS LEADS TO THE SUSPICION THAT THE DOCUMENTS WERE NOT GENUINE AND HENCE THE ASSESSEE WAS UNWILLING TO PRODUCE THE FORGED DOCUMENTS. IT IS NOTE WORTHY TO MENTION THAT DURING TILE SEARC H AND SURVEY PROCEEDINGS CONDUCTED ON 30.05.2008 AT ALL THE PREMISES OF THE ASSESSEE AND HIS VARIOUS COMPANIES ORIGINAL AGRICULTURE LEASE DOCUMENT WERE NOT FOUND. CONSIDERING THAT THE ASSESSEE HIS FAMILY MEMBERS AND THE VARIOUS COMPANY IN WHICH HE HAS A DIRECTOR HAVE SIGNED ANNUAL LEASE CONTRACTS FOR A PERIOD A.Y. 2002-03 TO 2007-08 WITH UPTO 10 INDIVIDUAL FARMERS PER YEAR IT IS SURPRISING THAT NO AGREEMENT WAS FOUND DURING SEARCH AND SEIZURE OPERATION NOR HAVE BEEN PRODUCED BY THE ASSESSEE HIMSELF DURING THE ASSESSMENT PROCEEDINGS. THE ASSESSEE SEEMS TO BE INTENTIONALLY AVOIDING PRESENTING SUCH AGREEMENTS. THE ASSESSEE 8 8 ALSO CLAIMS THAT HE HAS SHIFTED HIS OFFICE TWO OR THREE TIMES. HE WAS ASKED THE PROOF OF SUCH SHIFTING WHICH HE WAS UNABLE TO PROVIDE. IN REPLY TO QUESTION 27 (II) OF THE QUESTIONNAIRE U/S 142(1) WHERE THE ASSESSEE WAS ASKED TO PRODUCE LAND RECORD BOOK ETC. THE ASSESSEE VIDE POINT-2 OF SUBMISSION DATED 12.08,2010 ENCLOSED COPY OF KHASRA KHATONI AND FORM P-II, AS A ZEROX COPY. AGAIN THE ORIGINAL OF THE KHASRA KHATONI AND FORM P-II WAS NOT PRODUCED AND AS SUCH THE AUTHENTICITY OF THE SUBMISSION MADE IS DOUBTFUL. THE KHASRA KHATONI WAS SUBMITTED FOR VARIOUS YEARS. BOTH THE KHASRA KHATONI AND FORM P-II HAVE THE NAME OF FARMER ON IT AND DID NOT MENTION THE NAME OF ASSESSEE ON IT. NONE OF THE DOCUMENTS PROVED THAT T HE ASSESSEE HAS DONE AGRICULTURE OPERATIONS ON THE ABOVE MENTIONED LAND, AS A MATTER OF FACT THE FORM P-II FOR VARIOUS YEARS E.G. F .Y. 2002-03 MENTIONS THAT THE FARMER HIMSELF IS DOING AGRICULTURE OPERATIONS ON THE SAID LAND. SIMILAR FACTS EXIST FOR ALL THE AY'S. IN REPLY TO QUESTION 27 (III) OF THE QUESTIONNAIRE U/S 142(1) WHERE THE ASSESSEE WAS ASKED TO PRODUCE COMPLETE 9 9 LOCATION OF THE LAND THE ASSESSEE GAVE AN EVASIVE REPLY SAYING THAT DETAILS OF LAND ARE GIVEN IN POINT NO. 9 BELOW. GOING TO POINT 9 OF THE ASSESSEE SUBMISSION IT WAS FOUND THAT ONLY THE NAME OF THE VILLAGE, TEHSIL AND DISTRICT WAS MENTIONED NO SPECIFIC LOCATION OF THE LAND WAS PROVIDED. DESPITE BEING ASKED THE ASSESSEE DID NOT PROVIDE ANY SUCH DETAIL, PROBABLY WITH THE VIEW TO PREVENT ANY FIELD ENQUIRY. IN REPLY TO QUESTION 27(V) OF THE QUESTIONNAIRE U/S 142(1) WHERE THE ASSESSEE WAS ASKED TO PRODUCE DETAILS OF CROP TAKEN, EXPENDITURE SEED. FERTILIZER, PESTICIDE, LAB OUR ETC. THE ASSESSEE REPLIED VIDE POINT 8 OF SUBMISSION STATED THAT EVIDENCES FOR EXPENDITURE IN SEED, FERTILIZER. PESTICIDE, LABOUR ETC. ARE NOT READILY TRACEABLE, AGRICULTURE OPERATION OF THE SCALE WHICH THE ASSESS EE CLAIMS TO HAVE DONE REQUIRES LARGE AMOUNT OF INPUTS . THESE HAVE TO BOUGHT ON A REGULAR BASIS AND IN LARG E QUANTITIES. DURING THE COURSE OF SEARCH AND SEIZURE OPERATION HELD ON ASSESSEE'S PREMISES AS WELL AS ON VARIOUS COMPANIES IN WHICH HE IS A DIRECTOR, NO SUCH BILLS 10 10 WERE FOUND. IF THE ASSESSEE IS DOING SUCH REGULAR OPERATIONS WHY CAN'T BE PRODUCE BILLS RELATING TO VARIOUS INPUTS WHICH ARE REQUIRED FOR AGRICULTURE. IN REPLY TO QUESTION 27(VI) OF THE QUESTIONNAIRE U/ S 142(1) WHERE THE ASSESSEE WAS ASKED TO PRODUCE DETA ILS AS TO WHERE THE CROP WAS SOLD WITH SUPPORTING EVIDENCE THEREOF, THE ASSESSEE CLAIMED THAT COPY OF MANDI RECEIPT / S ALE BILL WAS NOT READILY TRACEABLE. DURING THE COURSE OF SEARCH AND SURVEY OPERATION HE LD CONDUCTED ON 30.05.2008. ON THE VARIOUS PREMISES OF THE ASSESSEE HIS FAMILY MEMBERS AND VARIOUS CONCERNS IN WHICH HE IS A DIRECTOR ETC. IT WAS NOTICED THAT NO SALE BILL RELATED TO AGRICULTURE SALES WAS FOUND. THIS IS VERY SURPRISIN G CONSIDERING THAT ASSESSEE CLAIMED TO PRODUCE FIVE D IFFERENT KINDS OF CROPS HAS SOLD THEM IS VARIOUS MANDIS AND HAS CLAIMED GROSS RECEIPT OF MORE THAN 10 LAC RS. IN VA RIOUS YEARS DURING THE ASSESSMENT PROCEEDINGS THE ASSESSE E WAS REPEATEDLY ASKED TO PRODUCE VARIOUS SALE BILLS WHIC H HE DID NOT PRODUCED TILL THE END OF ASSESSMENT ASSESSEE HO WEVER DID PRODUCED AN ACCOUNT STATEMENT OF VARIOUS SALES IN THE FOLLOWING FORMAT:- 11 11 S.NO. ITEM DATE BEGS (SIC. BAGS) RATE AMOUNT TOTAL SA PLACE OF SALE FOR VARIOUS ASSESSMENT-YEARS THE PLACE OF SALE WAS MENTIONED AS FOLLOWS:- A.Y.2003-04 KRISHI UPAJ MANDI SAMITI UDAIPURA RAISEN, KRISHI UPAJ MANDI SARNITI KARELI, A.Y.2004-05 KRISHI UPAJ MANDL SAMITI UDAIPURA RAISEN, KRISHI UPAJ MANDI SAMITI TENDUKHEDA A.Y.2005-06 KRISHI UPAJ MANDI SAMITI UDAIPURA RAISEN, LOCAL A.Y.2006-07 KRISHI UPAJ MANDI SAMITI UDAIPURA RAISEN, A.Y.2007-08 KRISHI UPAJ MANDI SAMITI ASHTA, SEHORE, LOCAL A.Y.200809 NO DETAIL SUBMITTED REGISTER, WEIGHING REGISTER FOR VARIOUS MONTHS IN W HICH THE ASSESSEE HAS CLAIMED TO MAKE SALES THROUGH THE MANDIS. TO UNDERSTAND THE LOGIC OF SENDING SUMMONS A BRIEF DISCUSSION ON THE PROCESS OF SALE OPERATION OF MANDI'S IS HERE BY ARRANGED IN A FLOW CHART FORMAT. 1. FARMERS APPEAR AT THE GATE OF MANDI WITH HIS 12 12 AGRICULTURE PRODUCED. IS GIVEN A TOKEN AND ENTRY MADE IN THE GATE REGISTER. 2. FARMERS GOES TO A COUNTER WHERE AN EMPLOYEE OF THE MANDI DOES OPEN BIDDING ON BEHALF OF FARMER AND THE HIGHEST BIDDER GETS THE RIGHT TO PROCURE. THE MANDI EMPLOYEE ISSUES A VOUCHER IN, GIVING ONE COPY TO THE FARMER, ONE TO THE TRADER AND ONE IS KEPT FOR MANDI RECORDS. THE VOUCHERS CONTAINS NAME OF FARMER, TRADER, QUANTITY, DESCRIPTION AND AGRICULTUR E PRODUCE. 3. THE FARMER AND THE TRADER THEN GO TO A MANDI - ISSU ED WEIGHING SCALE WHERE THE PRODUCE IS MEASURED, ANOTHER BILL IN TRIPLICATE IS ISSUED DECLARING THE QUANTITY OF GOODS BROUGHT. THE TRADER PAYS THE FARMER HIS DUES AS PER THE SALE AGREEMENT AND THE NEELAMI PATRAK. 4. THE TRADER TAKES THE GOODS OUT OF MANDI AFTER PAYING 2% MANDI TAX ON THE TOTAL PURCHASE. A COPY OF THE TOTAL PURCHASE AND MANDI TAX PAID ON IT, IS SUBMITTED TO THE MANDI OFFICE, ENTERED IN A REGISTE R AND THE BILL PRESERVED BY THE MANDI OFFICE FOR RECORDS. 13 13 GOING BY THE ABOVE DISCUSSION IT IS CLEAR THAT IF A FARMER SELLS THROUGH A MANDI HIS NAME WILL APPEAR O N THE A. ENTRY GATE REGISTER, B. ON THE NILAMI REGISTER, C. ON THE NILAMI DOCUMENT, AND D. ON THE WEIGHING REGISTER ALL MANDIS IN M.P. REGION DILIGENTLY MAINTAIN THESE RECORDS SPECIALLY THE NILAMI REGISTER AND NILAMI PATRAK, 5. BEFORE THE CIT(A), THE ASSESSEE FURNISHED ADDITI ONAL EVIDENCE UNDER RULE 46A IN THE FORM OF ORIGINAL LEA SE AGREEMENTS, ORIGINAL AFFIDAVITS OF FARMERS, ORIGINA L AFFIDAVITS OF ASSESSEE AFFIRMING DERIVING OF AGRICULTURAL INCO ME, ORIGINAL KHASRA, KHATAUNI AND FORM NO. P-2 WHICH AR E PLACED ON PAGE 234-257 OF THE PAPER BOOK AND ORIGIN AL RECEIPT OF PAYMENT OF LEASE RENT WHICH WAS PLACED A T PAGE 232 TO 457 OF THE PAPER BOOK. HOWEVER, THE CIT(A) D ID NOT ADMIT IT ON THE PLEA THAT THESE WERE NOT PRODUCED B EFORE THE ASSESSING OFFICER DESPITE OPPORTUNITY. THE LD. CIT( A) 14 14 CONFIRMED THE ADDITION BY ENDORSING THE FINDINGS GI VEN BY THE ASSESSING OFFICER. 6. IT WAS ARGUED BY THE LD. AUTHORIZED REPRESENTATI VE THAT THE DOCUMENTS PRODUCED BEFORE THE CIT(A) GOES TO THE ROOT OF THE ISSUE TO EXPLAIN TO AGRICULTURAL INCOME EARNED BY THE ASSESSEE. HE FURTHER SUBMITTED THAT IN ASSESSEE S OWN CASE FOR THE ASSESSMENT YEAR 2003-04, SCRUTINY ASSE SSMENT WAS FRAMED U/S 143(3) WHEREIN AGRICULTURAL INCOME RETURNED BY THE ASSESSEE AT RS. 5,59,383/- WERE ACC EPTED BY THE ASSESSING OFFICER TO THE EXTENT OF RS. 5,48,820 /-. HE FURTHER CONTENDED THAT EVEN IN ASSESSMENT YEAR 2004 -05, THE ASSESSMENT WAS FRAMED U/S 143(3) I.E. UNDER SCR UTINY SCHEME, WHEREIN AGRICULTURAL INCOME OF RS. 7,02,100 /- SHOWN BY THE ASSESSEE WERE FULLY ALLOWED BY THE ASS ESSING OFFICER. AS PER LD. AUTHORIZED REPRESENTATIVE, EVEN IN THE BLOCK RETURN, THE ASSESSEE HAS OFFERED THE SAME AGR ICULTURAL INCOME, WHICH WERE ALREADY OFFERED IN THE REGULAR R ETURN WHICH WAS ACCEPTED BY THE ASSESSING OFFICER U/S 143 (3), ACCORDINGLY, DISALLOWANCE OF ENTIRE AGRICULTURAL IN COME BY THE ASSESSING OFFICER AND TREATING THE SAME AS INCO ME FROM OTHER SOURCES WERE NOT JUSTIFIED. 15 15 7. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. WE HAD ALSO GONE THROUGH THE ADDITIONAL DOCUMENTS FILED BEFORE THE CIT(A) UNDER RULE 46A. 8. WITH REGARD TO AGRICULTURAL INCOME DECLARED BY T HE ASSESSEE, THE OBSERVATION OF THE ASSESSING OFFICER FOR DECLINE OF ASSESSEES CONTENTION REGARDING AGRICULTURAL INC OME WAS THAT THE ASSESSEE HAD NOT SHOWN AGRICULTURAL INCOME UP TO ASSESSMENT YEAR 2000-01. THAT ASSESSEE WAS MAINLY I N THE BUSINESS AND ALSO HAVING SALARY INCOME, THEREFORE, IT IS UNLIKELY TO HAVE TIME FOR AGRICULTURAL OPERATION. T HE ASSESSING OFFICER DECLINED THE CLAIM ALSO BY OBSERV ING THAT ONLY PHOTOCOPY OF LEASE AGREEMENTS WERE FILED AND N OT THE ORIGINAL LEASE AGREEMENTS. THE THRUST OF ASSESSING OFFICER FOR DECLINING THE ASSESSEES CLAIM WAS ALSO BASED ON TH E SURRENDER OF AGRICULTURAL INCOME MADE BY THREE GROU P COMPANIES IN THE ASSESSMENT YEAR 2005-06, NAMELY, R AJ HOMES PRIVATE LIMITED, MINAL BUILDERS AND RAJ EVENT AND ENTERTAINMENT PRIVATE LIMITED. THE ASSESSING OFFICE R OBSERVED THAT THESE COMPANIES HAVE SURRENDERED AGRICULTURAL INCOME IN THE ASSESSMENT YEAR 2005-06, THEREFORE, CLAIM OF OTHER ASSESSEES BELONGING TO SA ME GROUP 16 16 WITH RESPECT TO THE SAME NATURE OF INCOME CANNOT BE ACCEPTED. THE ASSESSING OFFICER ALSO OBSERVED THAT SOME FARMERS, WERE CROSS EXAMINED BY COUNSEL OF RAJ GROU P OF INDUSTRIES DURING PENALTY PROCEEDINGS U/S 271(1)(C) , WHEREIN THEY HAVE DENIED HAVING ANY LAND GIVEN ON L EASE. THE ASSESSING OFFICER STATED THAT PHOTOCOPY OF KHAS RA, KHATAUNI AND FORM P-II WERE FILED AND THE ASSESSEE DID NOT PRODUCE ORIGINAL OF THESE CERTIFICATES, HENCE AUTHE NTICITY OF THESE DOCUMENTS WERE DOUBTFUL. THE ASSESSING OFFICE R ALSO STATED THAT BILLS OF EXPENDITURE LIKE SEEDS, FERTIL IZERS, PESTICIDES, LABOUR AND OTHER RELATED DETAILS LIKE TRANSPORTATION WAREHOUSE ETC. WERE NOT FILED. WE FO UND THAT THE CIT(A) BROADLY CONFIRMED THE OBSERVATION OF THE ASSESSING OFFICER. TO OVERCOME THE FINDINGS OF ASSE SSING OFFICER, THE ASSESSEE HAS FILED DOCUMENTS UNDER RUL E 46A BEFORE THE CIT(A), BUT HE DECLINED TO ACCEPT THE SA ME ON THE PLEA THAT DESPITE OPPORTUNITY, THE ASSESSEE DID NOT PRODUCE THESE DOCUMENTS BEFORE THE ASSESSING OFFICER. THE C IT(A) FURTHER OBSERVED THAT DURING THE ASSESSMENT YEAR 20 08-09 VERY NOMINAL AGRICULTURAL INCOME WAS SHOWN, THEREFO RE, THE ASSESSEES CLAIM OF AGRICULTURAL INCOME IN EARLIER YEARS 17 17 CANNOT BE ACCEPTED. IT WAS ALSO OBSERVED BY CIT(A) THAT ALL THE DIRECTORS IN BUSINESS RESIDE IN BHOPAL, WHILE AGRICULTURAL LAND WAS SITUATED AT A DISTANT AREA. 9. AFTER GOING THROUGH THE REASONING GIVEN BY THE ASSESSING OFFICER AND CIT(A) FOR DECLINE OF DEDUCTI ON AND AFTER VERIFYING THE ADDITIONAL EVIDENCE FILED BEFOR E THE CIT(A) UNDER RULE 46A, WE FOUND THAT THE ASSESSEE HAS FILE D ORIGINAL LEASE AGREEMENTS BEFORE THE CIT(A). ONE OF THE REASONS GIVEN BY THE ASSESSING OFFICER FOR DECLINE WAS THAT ORIGINAL LEASE AGREEMENT WAS NOT PRODUCED. IT WAS SUBMITTED BY THE ASSESSEE THAT DUE TO CHANGE IN OFF ICE ADDRESS, THE ORIGINAL LEASE AGREEMENTS WERE NOT TRA CEABLE DURING THE RELEVANT POINT OF TIME, THEREFORE, THEY WERE FILED BEFORE THE CIT(A). THE OTHER REASON GIVEN BY THE AS SESSING OFFICER WAS THAT ORIGINAL KHASRA, KHATAUNI AND FORM P-II WAS NOT FILED, THEREFORE, CLAIM OF AGRICULTURAL INCOME CANNOT BE ACCEPTED. BEFORE THE CIT(A), THE ASSESSEE HAS FILED ORIGINAL KHASRA, KHATAUNI AND FORM NO. P-II TO SUBSTANTIATE ITS CLAIM OF AGRICULTURAL INCOME BUT THE SAME WERE NOT ACCEPT ED. BEFORE THE CIT(A), THE ASSESSEE HAS FILED ORIGINAL KHASRA, KHATAUNI AND FORM P-II TO SUBSTANTIATE ITS CLAIM OF 18 18 AGRICULTURAL INCOME AND SAME ARE PLACED AT PAGE 230 TO 457 OF THE PAPER BOOK. THE ASSESSEE HAS ALSO FILED ORIG INAL RECEIPTS OF PAYMENT OF LEASE RENT, WHICH ARE PLACED AT PAGE 230 TO, 457 OF THE PAPER BOOK. WE FOUND THAT ASSESS EE WAS PREVENTED BY SUFFICIENT CAUSE FOR NOT SUBMITTING TH E SAME BEFORE ASSESSING OFFICER, SINCE THESE DOCUMENTS WER E MISPLACED DUE TO SHIFTING OF OFFICE. IF ASSESSEE CO ULD FILE PHOTOCOPY BEFORE THE ASSESSING OFFICER, HE COULD FI LE ORIGINAL ALSO, AS FILED BEFORE THE CIT(A). THE ASSESSEE BY N OT FILING THESE DOCUMENTS BEFORE THE ASSESSING OFFICER CANNOT SPOIL HIS CASE. SINCE THESE DOCUMENTS WERE NECESSARY TO DETERMINE THE CORRECT NATURE OF INCOME HAVING BEEN OFFERED BY THE ASSESSEE, THE CIT(A) WAS NOT JUSTIFIED IN NO T ACCEPTING THESE DOCUMENTS WHICH GOES TO THE ROOT OF THE ISSUE . AFTER ACCEPTING THE DOCUMENTS FILED UNDER RULE 46A, THE C IT(A) COULD HAVE CALLED FOR REMAND REPORT FROM THE ASSESS ING OFFICER AND AFTER CONSIDERING THE SAME HE SHOULD HA VE ARRIVED AT CORRECT CONCLUSION WITH REGARD TO THE N ATURE OF INCOME OFFERED BY THE ASSESSEE. AS PER RECORD, THE CLAIM OF ASSESSEE WAS THAT THE AGRICULTURAL OPERATION OF THE ASSESSEE WAS BEING LOOKED AFTER BY AJAB SINGH, WHO WAS EMPLO YED BY 19 19 THE ASSESSEE. INSPITE OF MAKING REQUEST TO ASSESSIN G OFFICER AND CIT(A), THE NONE OF THE AUTHORITIES HAVE CALLED AJAB SINGH TO VERIFY THE WORK UNDERTAKEN BY HIM AND CORR ECTNESS OF AGRICULTURAL INCOME HAVING BEEN EARNED BY THE AS SESSEE. WE ALSO FOUND THAT CONCLUSION OF ASSESSING OFFICER WAS MORE INFLUENCED BY THE SURRENDER OF AGRICULTURAL INCOME BY THREE GROUP COMPANIES. THROUGH THE DOCUMENTS PLACED ON RE CORD, IT WAS CLARIFIED BY THE ASSESSEE THAT FARMERS, WHO HAVE DECLINED TO GIVE LOAN TO THE ASSESSEE WERE OF DIFFE RENT VILLAGER AND THE LAND WAS ALSO SITUATED AT DIFFERENT LOCATIO N. AS THE FARMERS FROM WHOM LAND WAS TAKEN BY THE ASSESSEE WA S DIFFERENT FROM FARMERS, WHO HAVE GIVEN LAND TO THE THREE COMPANIES, WHICH HAVE SURRENDERED THEIR CLAIM OF AGRICULTURAL INCOME, THEREFORE, NO FRUITFUL PURPOSE WAS SERVE BY RELYING ON THE STATEMENT OF THOSE FARMERS, WHO H AD GIVEN LAND TO THESE THREE COMPANIES AND NOT THE ASSESSEE BEFORE US. WE FOUND THAT IN THE ASSESSMENT YEAR 2005-06, T HREE GROUP COMPANIES HAD SURRENDERED THEIR AGRICULTURAL INCOME, BECAUSE FARMERS OF THOSE COMPANIES HAD GIVEN ADVERS E STATEMENT TO THE EFFECT THAT THEY HAD NOT GIVEN LAN D TO THE COMPANIES AND DO NOT KNOW THEIR DIRECTORS. AS PER L D. 20 20 AUTHORIZED REPRESENTATIVE , THESE FARMERS BECAME HO STILE AND WERE MISLED UNDER INTIMIDATION. WE FOUND THAT T HE ASSESSEE HAVE ALREADY DECLARED AGRICULTURAL INCOME MUCH PRIOR TO THE SEARCH RIGHT FROM ASSESSMENT YEAR 2001 -02. IN THE ASSESSMENT YEAR 2003-04 AND 2004-005, THERE WAS SCRUTINY ASSESSMENT ORDER, WHEREIN AGRICULTURAL INC OME OF RS. 4,99,400/- DURING THE ASSESSMENT YEAR 2003-04 W AS ACCEPTED BY THE ASSESSING OFFICER AT RS. 4,70,790/- . SIMILARLY, IN THE ASSESSMENT YEAR 2004-05, THE ASSE SSEES CASE WAS DECIDED U/S 143(3) AND AGRICULTURAL INCOME OF RS. 8,52,569/- WAS ACCEPTED AT RS. 8,20,530/-. THUS, IN BOTH THE SCRUTINY ASSESSMENTS KEEPING IN VIEW THE LAND T AKEN ON LEASE, AGRICULTURAL INCOME AT RS. 9000/- PER ACRE W AS ACCEPTED BY THE ASSESSING OFFICER. WHEN IN THE SCRU TINY ASSESSMENT, THE INCOME HAS BEEN ACCEPTED, WITHOUT G IVING COGENT REASONING, THE SAME CANNOT BE DECLINED. SINC E ORIGINAL AND XEROX COPY OF LEASE AGREEMENTS ARE SAM E, NO REASON FOR ASSESSEE NOT TO SUBMIT ORIGINAL BEFORE T HE ASSESSING OFFICER, IF HE COULD SUBMIT IT BEFORE CIT (A). SIMILAR IS THE POSITION WITH REGARD TO KHASRA, KHATAUNI AND FORM P- II. EVEN IN ABSENCE OF ORIGINAL LEASE AGREEMENT AND KHASRA 21 21 KHATAUNI, THE ASSESSING OFFICER COULD MAKE INQUIRY EVEN ON PHOTOCOPY. THE ASSESSEE HAD FURNISHED ADDRESSES OF ALL THE FARMERS, THE FARMERS IN THE AGREEMENT ARE RESIDENTS OF VILLAGE AND FULL ADDRESS WAS GIVEN. MANY SUMMONS WE RE SERVED AS PER THE OBSERVATION OF THE ASSESSING OFFI CER HIMSELF, BUT NO EFFECTIVE EFFORTS WERE MADE TO ENSU RE ABOUT THE FARMERS PRESENCE. EVEN A REQUEST WAS FILED BY T HE ASSESSEE BEFORE THE ASSESSING OFFICER TO SUMMON FAR MERS U/S 131. THE ASSESSEE HAS ALSO REQUESTED THE ASSESS ING OFFICER TO SUMMON MR.AJAB SINGH RAGHUVANSHI WHO WAS TAKING CARE OF ASSESSEES AGRICULTURAL ACTIVITY AND ITS SALES REALIZATION ETC. HOWEVER, MR. AJAB SINGH WAS NOT CA LLED FOR. COPY OF KHASRA ISSUED BY PATWARI CONFIRMING THE PRO DUCTION OF CROP WAS FILED BEFORE THE ASSESSING OFFICER WHIC H HAS NOT BEEN DISPROVED BY HIM. IT WAS ALSO CONTENTION OF LD . AUTHORIZED REPRESENTATIVE THAT STATEMENT OF MANDI PERSONS WHICH WERE RECORDED BEHIND THE BACK OF THE ASSESSEE , HENCE CANNOT BE USED AGAINST HIM, AS THE SAME WERE NOT CONFRONTED TO HIM. FOR THIS PURPOSE RELIANCE WAS PL ACED ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE K ISHAN CHAND CHELARAM, 125 ITR 713. LD. AUTHORIZED 22 22 REPRESENTATIVE ALSO CLARIFIED THAT THERE IS NO PRA CTICE OF MENTIONING NAMES OF BATAIDAR/LESSEE ON THE KHASRA, KHATAUNI AND FORM P-II, BECAUSE THIS AT TIMES HAS G IVEN RISE TO PLETHORA OF CIVIL SUITS BEING FILED BY THE BATAI DAR/LESSEE FOR OWNERSHIP OF LAND DUE TO CULTIVATION DONE BY TH EM FOR LONGER PERIOD. HENCE, NOT MENTIONING THE NAME OF L ESSEE, BATAIDAR IN KHASRA , KHATAUNI AND FORM NO. P-II CA NNOT BE VIEWED AGAINST THE ASSESSEE. THUS, THE OBSERVATION OF ASSESSING OFFICER IN THIS REGARD DO NOT CARRY MUCH FORCE. HE FURTHER SUBMITTED THAT IT WAS DULY STATED BEFORE TH E ASSESSING OFFICER THAT ENTIRE AGRICULTURAL OPERATIO N ON THE LAND WERE DONE BY MR. AJAB SINGH RAGHUVANSHI, BAZAR MOHALLA, VILLAGE DEORI, TAHSIL UDAIPUR, DISTT. RAIS EN. MR. AJAB SINGH WAS GIVEN IMPREST AND HE USED TO PAY SAL E PROCEEDS TO THE ASSESSEE. AS THE ENTIRE WORK WAS BE ING TAKEN CARE OF BY AJAB SINGH RAGHVANSHI, THE ASSESSE E DID NOT KNOW THE PURCHASER OF THE CROP. THE INTERMEDIAR Y SOLD THE CROP AND GAVE MONEY AND MANDI RECEIPTS TO ASSES SEE, THEREFORE, AS PER LD. AUTHORIZED REPRESENTATIVE , T HERE WAS NO REASON FOR ASSESSEE TO DOUBT THE MANDI RECEIPTS GIVEN BY HIM. 23 23 10. IN VIEW OF THE ABOVE DISCUSSION, WE RESTORE THE MATTER OF AGRICULTURAL INCOME IN ALL THE YEARS UNDER CONSI DERATION TO THE FILE OF ASSESSING OFFICER FOR DECIDING AFRES H AFTER CONSIDERING THE DOCUMENTS FILED BEFORE CIT(A) UNDER RULE 46A, WHICH GOES TO THE ROOT OF THE ISSUE. WE DIRECT ACCORDINGLY. 11. WITH REGARD TO THE LEGAL GROUND TAKEN BY THE AS SESSEE U/S 153A, IT WAS ARGUED BY THE LD. AUTHORIZED REPRESENTATIVE THAT NO INCRIMINATING DOCUMENTS WER E FOUND DURING SEARCH, THEREFORE, ASSESSMENT SO FRAME D U/S 153A WAS NOT JUSTIFIED IN VIEW OF THE DECISION OF T HE I.T.A.T. SPECIAL BENCH IN THE CASE OF ALCARGO GLOBAL LOGISTI C LIMITED (SUPRA). 12. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HA VE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AN D FOUND FROM RECORD THAT DURING THE COURSE OF SEARCH RECEIP TS OF DEPOSITS OF CASH IN BANK WAS FOUND, THEREFORE, PLEA TAKEN BY THE ASSESSEE THAT NO INCRIMINATING MATERIAL WAS FOU ND, DOES NOT SURVIVE. ACCORDINGLY, WE CONFIRM THE ACTION OF A SSESSING OFFICER FOR FRAMING ASSESSMENT U/S 153A IN VIEW OF THE FACT 24 24 THAT INCRIMINATING DOCUMENTS WAS FOUND DURING COURS E OF SEARCH. 13. IN THE RESULT, THE APPEALS FOR ALL THE YEARS AR E ALLOWED IN PART FOR STATISTICAL PURPOSES . SANDEEP MEHTA : I.T(SS).A.NOS. 160 TO 166/IND/2012 : 14. THESE ARE THE APPEALS FILED BY THE ASSESSEE AGA INST THE ORDER OF CIT(A) DATED 2.3.2012 FOR THE ASSESSMENT Y EARS 2003-04 TO 2009-10 IN THE MATTER OF ORDER PASSED U/ S 153A READ WITH SECTION 143(3) OF THE INCOME-TAX ACT, 196 1. 15. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. THERE WAS SEARCH AT THE ASSESSEES RESIDEN TIAL PREMISES AT E-5/148, ARERA COLONY, BHOPAL, ON 30.05 .2008. AFTER RECORDING REASONS, THE ASSESSING OFFICER ISSU ED NOTICES U/S 153A. DURING THE COURSE OF ASSESSMENT, ADDITION S WERE MADE ON ACCOUNT OF CASH AND JEWELLERY SO FOUND. THE ASSESSING OFFICER ALSO MADE ADDITION BY NOT ACCEPTI NG AGRICULTURAL INCOME RETURNED BY THE ASSESSEE AND TH E SAME WAS TREATED AS INCOME FROM OTHER SOURCES. THE ASSES SING OFFICER ALSO MADE ADDITION ON ACCOUNT OF CASH DEPOS ITED IN THE BANK ACCOUNT IN THE ALL THE YEARS UNDER CONSIDE RATION. 25 25 16. BY THE IMPUGNED ORDER THE LD. CIT(A) DELETED AD DITION ON ACCOUNT OF CASH AND JEWELLERY FOUND DURING SEARC H AND CASH DEPOSITED IN BANK ACCOUNT, AND REVENUE IS NOT IN APPEAL BEFORE US. 17. AFTER HAVING THE SAME OBSERVATION AS IN THE CAS E OF HITESH MEHTA (SUPRA), THE ASSESSING OFFICER MADE A DDITION ON ACCOUNT OF AGRICULTURAL INCOME. BEFORE THE CIT(A ), THE ASSESSEE FILED ADDITIONAL EVIDENCE IN THE FORM OF O RIGINAL LEASE AGREEMENT, NOTARIZED COPY/AGREEMENTS, WHICH A RE PLACED AT PAGE 131 135 OF THE PAPER BOOK. ORIGINA L AFFIDAVITS OF FARMERS WHICH ARE PLACED AT PAGES 456 TO 507 OF PAPER BOOK, NOTARIZED COPY OF AFFIDAVITS OF FARMERS WHICH ARE PLACED AT PAGE 456 TO 507, ORIGINAL KHASRA, KHATAUN I AND FORM NO. P-II WHICH ARE PLACED AT PAGE NOS. 131 TO 351 OF THE PAPER BOOK. THE ASSESSEE ALSO FILED ORIGINAL RECEIP TS OF PAYMENT OF LEASE RENT WHICH ARE ALSO PLACED IN THE PAPER BOOK. HOWEVER, THE CIT(A) DID NOT ADMIT THE SAME ON THE GROUND THAT THESE WERE NOT FILED BEFORE THE ASSESSI NG OFFICER DESPITE OPPORTUNITY AND ARE WITHOUT SUFFICIENT CAUS E. BY ENDORSING THE ASSESSING OFFICERS VIEW, THE CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER FOR TREATING AG RICULTURAL 26 26 INCOME AS INCOME FROM OTHER SOURCES AGAINST WHICH T HE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 18. THE LD. AUTHORIZED REPRESENTATIVE REITERATED T HE SUBMISSION AS DISCUSSED IN THE CASE OF ARUN SAHLOT AND FURTHER CONTENDED THAT THE ASSESSEE HAVE ALREADY OF FERED AGRICULTURAL INCOME IN THE ASSESSMENT YEARS 2003-04 AND 2004-05 WHICH WERE ACCEPTED BY THE ASSESSING OFFICE R UNDER SCRUTINY ASSESSMENT. IN THE ASSESSMENT YEAR 2 003- 04, AGRICULTURAL INCOME WAS OFFERED AT RS. 5,67,000 /- OUT OF WHICH AGRICULTURAL INCOME OF RS. 4,71,330/- WERE AC CEPTED BY THE ASSESSING OFFICER U/S 143(3) ASSESSMENT. SIM ILARLY, IN THE ASSESSMENT YEAR 2004-05, AGRICULTURAL INCOME OF RS. 6,66,600/- RETURNED BY THE ASSESSEE WERE ACCEPTED IN SCRUTINY ASSESSMENT IN TOTAL WITHOUT MAKING ANY DISALLOWANCE. IN THE ASSESSMENT YEAR 2003-04, WE FO UND THAT AGRICULTURAL INCOME HAS BEEN ACCEPTED @ RS. 90 00/- PER ACRE WHEREAS IN THE ASSESSMENT YEAR 2004-05 IT WORKS OUT TO BE RS. 8383/- PER ACRE. FOLLOWING THE SAME R EASONING GIVEN HREINABOVE IN THE CASE OF HITESH MEHTA (SUPRA ), WE RESTORE THIS GROUND IN ALL THE YEARS TO THE FILE OF ASSESSING 27 27 OFFICER FOR DECIDING AFRESH AFTER CONSIDERING ADDIT IONAL EVIDENCE FILED BEFORE THE CIT(A). WE DIRECT ACCORDI NGLY. 19. WITH REGARD TO LEGAL GROUND TAKEN BY THE ASSESS EE FOR FRAMING ASSESSMENT U/S 153A, WE DO NOT FIND ANY JUSTIFICATION IN SO FAR AS INCRIMINATING DOCUMENTS IN THE FORM OF CASH DEPOSIT SLIPS IN THE BANK WAS FOUND DU RING COURSE OF SEARCH. 20. WITH REGARD TO CASH DEPOSITED IN BANK ACCOUNT, THE CIT(A) DELETED THE ADDITION TO THE EXTENT OF AGRICU LTURAL INCOME AND CONTRACT RECEIPTS, WHICH WAS TREATED BY THE ASSESSING OFFICER AS INCOME FROM OTHER SOURCES IN T HE ASSESSMENT YEAR 2003-04, 2005-06, 2006-07 AND 2007- 08. HOWEVER, IN THE ASSESSMENT YEAR 2004-05, AN ADDITIO N OF RS. 53,400/- WAS RETAINED. SIMILARLY, FOR ASSESSMEN T YEAR 2008-09, AN ADDITION OF RS. 5,96,266/- AND IN ASSES SMENT YEAR 2009-10 AN ADDITION OF RS. 8000/- WAS RETAINED AGAINST WHICH THE ASSESSEE IS IN FURTHER APPEAL BEF ORE US. HOWEVER, THE REVENUE HAS NOT FILED ANY APPEAL AGAIN ST THE ADDITION DELETED BY THE LD.CIT(A) IN ASSESSMENT YEA R 2003- 04, 2005-06 TO 2007-08. PRECISE OBSERVATION OF CIT( A) WAS AS UNDER :- 28 28 7.4 I HAVE EXAMINED THE MATTER. THE ADDITIONAL EVIDENCES SUBMITTED BEFORE ME NOT CONSIDERED FOR DECIDING THE ISSUE DUE TO THE REASON GIVEN ABOVE. THE FACTS OR THE CASH DEPOSIT MADE IN VARIOUS BANK ACCOUNTS WERE DEPOSIT DURING THE COURSE OR SEARCH HENCE THE APPELLANTS PLED THAT THE IMPUGNED ADDITION IS NOT BASED ON ANY MATERIAL FOUND DURING THE COURSE OF SEARCH IS NOT VALID. DURING THE HEARI NG I HAVE EXAMINED THE SOURCE OF ALL DEPOSITS BOTH ABOVE RS. 50000/- AND BELOW RS. 50000/-. BEFORE THE ASSESSING OFFICER THE APPELLANT HAS CLAIMED THAT THE CASH DEPOSITS MADE IN THESE BANK ACCOUNTS WERE OUT OF AGRICULTURE INCOME AND CONTRACT RECEIPT. IN THIS APPEAL ORDER THE ADDITIONS ON ACCOUNT OR AGRICULTURE INCOME AND CONTRACT RECEIPT HAVE BEEN CONFIRMED, IN THE APPELLANTS CASE THE RATIO LAID IN ACIT VS. KULWANT SINGH AND OTHERS IT(SS) 57 TO 63/IND/2008 (INDORE ITAT) IS DIRECTLY APPLICABLE. TH E UNACCOUNTED INCOME CLAIMED AS AGRICULTURE INCOME AND CONTRACT RECEIPT HAVE BEEN BROUGHT TO TAX HENCE TAXING THE CASH DEPOSITED IN THE BANK TO THE EXTENT OR 29 29 ADDITIONS CONFIRMED WILL AMOUNT TO DOUBLE ADDITION. IN VIEW OF THE ABOVE, IT IS HELD THAT THE ADDITION MADE ON ACCOUNT OF CASH DEPOSITS MADE IN BANK ACCOUNT IS TO BE REDUCED BY THE ADDITIONS CONFIRMED ON ACCOUNT OR CLAIM OR AGRICULTURE INCOME AND CONTRACT RECEIPT. THE AMOUNT OR ADDITION FOR VARIOUS YEARS IS REDUCED AS UNDER: A.Y. ADDITION ON ACCOUNT OF CASH DEPOSIT AMOUNT OF ADDITION CONFIRMED ON ACCOUNT OF AGRICULTURAL INCOME AND CONTRACT RECEIPT AMOUNT OF CONFIRMED ADDITION ON ACCOUNT OF CASH DEPOSIT IN BANK 2003 - 04 150 000 567000 NIL 2004 - 05 720000 666600 53400 2005 - 06 450000 534258 NIL 2006 - 07 605000 886893 NIL 2007 - 08 12000 1317377 NIL 2008 - 09 640000 43734 596266 2009 - 10 8000 0 8000 21. AGAINST THE ABOVE ORDER OF CIT(A), ASSESSEE IS IN FURTHER APPEAL BEFORE US. 22. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND FO UND FROM RECORD THAT THE FOLLOWING ADDITIONS WERE MADE ON ACCOUNT OF CASH DEPOSIT WHEREIN CREDIT FOR AGRICULT URAL INCOME AND CONTRACT RECEIPT WAS GIVEN BY CIT(A) AS UNDER :- 30 30 A.Y. ADDITION ON ACCOUNT OF CASH DEPOSIT AMOUNT OF ADDITION CONFIRMED ON ACCOUNT OF AGRICULTURAL INCOME AND CONTRACT RECEIPT AMOUNT OF CONFIRMED ADDITION ON ACCOUNT OF CASH DEPOSIT IN BANK 2003-04 150000 567000 NIL 2004-05 720000 666600 53400 2005-06 450000 534258 NIL 2006-07 605000 886893 NIL 2007-08 12000 1317377 NIL 2008-09 640000 43734 596266 2009-10 8000 0 8000 23. IT IS CLEAR FROM THE ABOVE CHART, WHICH HAS BEE N GIVEN AT PAGE 53 OF THE CIT(A)S ORDER THAT THERE WAS ADD ITION OF RS. 25,85,000/- ON ACCOUNT OF CASH DEPOSIT DURING T HE ASSESSMENT YEARS 2003-04 TO 2009-10. HOWEVER, WE FO UND THAT DURING THE ASSESSMENT YEAR 2003-04 TO 2009-10 AGRICULTURAL INCOME AND CONTRACT RECEIPTS WHICH ARE ALLOWED AS SET OFF AGAINST THE CASH DEPOSIT WORKS OUT TO BE RS. 40,15,862/-. THUS, THE INCOME ACCEPTED BY THE CIT(A ) WAS MUCH MORE THAN THE CASH DEPOSITED. TO FIND OUT THE CORRECTNESS OF ADDITIONS RETAINED BY THE LD.CIT(A), WE WORK OUT THE CUMULATIVE POSITION OF CASH IN HAND IN THE FORM OF INCOME FROM AGRICULTURE AND CONTRACT RECEIPT VIS-- VIS CASH DEPOSITED IN THE BANK ACCOUNT IN RESPECTIVE YEARS. 31 31 24. THE WORKING GIVEN BELOW CLEARLY INDICATE THAT IN EACH YEAR THERE WAS SUFFICIENT CASH BALANCE, WHICH WAS U SED FOR DEPOSIT IN BANK ACCOUNT. ACCORDINGLY, WE DO NOT FIN D ANY JUSTIFICATION FOR ADDITION SO RETAINED BY THE LD.CI T(A) IN THE ASSESSMENT YEAR 2004-05, 2008-09 AND 2009-10 :- A.Y. ADDITION ON ACCOUNT OF CASH DEPOSIT CUMULATIVE BALANCE OF CASH DEPOSITED AMOUNT OF ADDITION CONFIRMED ON ACCOUNT OF AGRICULTURAL INCOME AND CONTRACT RECEIPT CUMULATIVE BALANCE OF CASH AVAILABLE 2003-04 1,50,000 1,50,000 5,67,000 5,67,000 2004-05 7,20,000 8,70,000 6,66,600 12,33,600 2005-06 4,50,000 13,20,000 5,34,258 17,67,858 2006-07 6,05,000 19,25,000 8,86,893 26,54,751 2007-08 12,000 19,37,000 13,17,377 39,72,128 2008-09 6,40,000 25,77,000 43,734 40,15,862 2009-10 8,000 25,85,000 0 40,15,862 25. FURTHER, WE ALSO FOUND THAT THE ASSESSEE HAS CL EARLY DEMONSTRATED AVAILABILITY OF CASH OUT OF AGRICULTUR E AND CONTRACT RECEIPTS AS WELL AS OUT OF WITHDRAWAL FROM THE OTHER BANK ACCOUNT SO AS TO EXPLAIN DEPOSIT OF CASH IN TH E RESPECTIVE YEARS. ACCORDINGLY, THE ADDITION RETAIN ED BY THE LD.CIT(A) ARE DELETED. 26. WITH REGARD TO CONTRACT RECEIPTS, WE FOUND THAT NO SATISFACTORY EXPLANATION WAS GIVEN BY ASSESSEE WITH REGARD 32 32 TO NATURE OF INCOME. ACCORDINGLY, ASSESSING OFFICER WAS JUSTIFIED IN ADDING ENTIRE CONTRACT RECEIPTS OF RS. 1,50,000/- IN ASSESSMENT YEAR 2004-05, RS. 1,50,000/- IN ASSES SMENT YEAR 2005-06 AND RS. 1,50,000/- IN ASSESSMENT YEAR 2006- 07 IN ASSESSEES INCOME. ACCORDINGLY, WE CONFIRM TH E ACTION OF CIT(A) IN THIS REGARD. 27. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED IN PART. SURENDRA MEHTA : I.T(SS).A.NOS. 154 TO 159/IND/2012 REVENUES APPEALS : I.T(SS).A.NOS. 268 TO 273/IND/2 012: 28. THESE ARE THE CROSS APPEALS FILED BY ASSESSEE A ND REVENUE AGAINST THE ORDER OF CIT(A) DATED 1 ST MARCH, 2012, FOR THE ASSESSMENT YEARS 2003-04 TO 2008-09. 29. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. FACTS IN BRIEF ARE THAT THE ASSESSEE IS A DIRECTOR OF RAJ HOMES PRIVATE LIMITED. ON 30.05.2008, SEARCH AN D SEIZURE UNDER SECTION 132(1) WAS CONDUCTED AT HIS RESIDENTIAL PREMISES AT E-3/10, ARERA COLONY, BHOPA L. DURING THE COURSE OF SEARCH DOCUMENTS AND INFORMATI ON RELATING TO THE ASSESSEE WERE FOUND. AFTER RECORDIN G THE 33 33 REASONS THE ASSESSING OFFICER ISSUED NOTICE U/S 153 A. IN RESPONSE TO THE ASSESSEE FILED THE RETURN OF INCOME OF VARIOUS YEARS. 30. DURING THE COURSE OF ASSESSMENT, ADDITIONS WERE MADE BY THE ASSESSING OFFICER ON ACCOUNT OF AGRICULTURAL INCOME, CASH DEPOSITED IN BANK ACCOUNT AND CONTRACT RECEIPT S. 31. BY THE IMPUGNED ORDER THE ADDITIONS MADE ON ACCOUNT OF CASH DEPOSITED IN BANK ACCOUNT WERE DELE TED FOR THE ASSESSMENT YEARS 2003-04 TO 2007-08, HOWEVER, T HE ADDITION MADE FOR ASSESSMENT YEAR 2008-09 WAS REDUC ED FROM RS. 5,00,000/- TO RS. 4,76,832/-. PRECISE OBSERVATIONS OF CIT(A) ARE AS UNDER :- 7.4 I HAVE EXAMINED THE MATTER. THE ADDITIONAL EVIDENCES SUBMITTED BEFORE ME NOT CONSIDERED FOR DECIDING THE ISSUE DUE TO THE REASON GIVEN ABOVE. T HE FACTS OR THE CASH DEPOSIT MADE IN VARIOUS HANK ACCOUNTS WERE DEPOSIT DURING THE COURSE OR SEARCH HENCE THE APPELLANTS PLED THAT THE IMPUGNED ADDITION IS NOT BASED ON ANY MATERIAL FOUND DURING THE COURSE O F SEARCH IS NOT VALID. DURING THE HEARING I HAVE EXAM INED THE SOURCE OF ALL DEPOSITS BOTH ABOVE RS. 50000/- AN D 34 34 BELOW RS. 50000/- THE APPELLANT HAS CLAIMED BEFORE THE A.O, THAT THE CASH DEPOSITS MADE IN THESE BANK ACCOUNTS WERE OUT OF AGRICULTURE INCOME AND CONTRAC T RECEIPT. IN THIS APPEAL ORDER THE ADDITIONS ON ACCOUN T OR AGRICULTURE INCOME AND CONTRACT RECEIPT HAVE BEEN CONFIRMED, IN THE APPELLANTS CASE THE RATIO LAID IN ACIT VS. KULWANT SINGH AND OTHERS IT(SS) 57 TO 63/IND/2008 (INDORE ITAT) IS DIRECTLY APPLICABLE. T HE UNACCOUNTED INCOME CLAIMED AS AGRICULTURE INCOME AN D CONTRACT RECEIPT HAVE BEEN BROUGHT TO TAX HENCE TAXI NG THE CASH DEPOSITED IN THE BANK TO THE EXTENT OR ADDITIONS CONFIRMED WILL AMOUNT TO DOUBLE ADDITION. IN VIEW OF THE ABOVE, IT IS HELD THAT THE ADDITION MAD E ON ACCOUNT OF CASH DEPOSITS MADE IN BANK ACCOUNT IS TO BE REDUCED BY THE ADDITIONS CONFIRMED ON ACCOUNT OR CLAIM OR AGRICULTURE INCOME AND CONTRACT RECEIPT. T HE AMOUNT OR ADDITION FOR VARIOUS YEARS IS REDUCED AS UNDER: ASSESSMENT YEAR ADDITION ON ACCOUNT OF CASH DEPOSIT AMOUNT OF ADDITION CONFIRMED ON ACCOUNT OF AGRICULTURE INCOME AND CONTRACT RECEIPT AMOUNT OF CONFIRMED ADDITION ON ACCOUNT OF CASH DEPOSIT IN BANK A.Y.2003-04 252000 366300 NIL A.Y.2004-05 305000 324600 NIL A.Y.2005-06 251000 278950 NIL A.Y.2006-07 150000 442950 NIL 35 35 A.Y.2007-08 450000 530624 NIL A.Y.2008-09 500000 23168 476832 32. ADDITIONS WERE MADE BY ASSESSING OFFICER IN RESPECT OF AGRICULTURAL INCOME GIVING THE SAME REASONING AS GIVEN IN CASE OF HITESH MEHTA. BY THE IMPUGNED ORDE R, CIT(A) CONFIRMED THE ADDITION AND ASSESSEE IS IN FU RTHER APPEAL BEFORE US. 33. IT WAS ARGUED BY THE LD. AUTHORIZED REPRESENTAT IVE THAT NO INCRIMINATING MATERIAL WAS FOUND DURING COU RSE OF SEARCH INDICATING INCOME HAVING NOT BEEN EARNED OUT OF AGRICULTURE. HE FURTHER SUBMITTED THAT NOT EVEN A S INGLE FARMER DENIED THAT THEY HAVE NOT GIVEN LAND ON LEAS E TO THE ASSESSEE. HE FURTHER INVITED OUR ATTENTION TO THE S CRUTINY ASSESSMENT FRAMED U/S 143(3), WHEREIN AGRICULTURAL INCOME OFFERED IN THE ASSESSMENT YEAR 2003-04 AMOUNTING TO RS. 3,66,300/- WAS ACCEPTED BY THE ASSESSING OFFICER AT RS. 3,40,560/-. SIMILARLY, IN THE ASSESSMENT YEAR 2004- 05, THE AGRICULTURAL INCOME RETURNED BY THE ASSESSEE AT RS. 3,24,600/- WAS ACCEPTED BY THE ASSESSING OFFICER AT RS. 3,14,370/-. OUR ATTENTION WAS ALSO INVITED TO COPY OF ADDITIONAL DOCUMENTS FILED BEFORE THE CIT(A), WHICH INCLUDED, INTER ALIA, ORIGINAL LEASE AGREEMENTS, OR IGINAL 36 36 AFFIDAVITS OF FARMERS, ORIGINAL AFFIDAVITS OF ASSES SEE, ORIGINAL KHASRA AND KHATAUNI AND FORM P-II, PLACED AT PAGE 8 7 TO 250 OF THE PAPER BOOK. ORIGINAL RECEIPTS OF PAYMENT OF LEASE RENT. AS PER LD. AUTHORIZED REPRESENTATIVE , ALL TH ESE DOCUMENTS GO TO THE ROOT OF THE ISSUE AND SINCE THE RE WAS CHANGE IN THE OFFICE PREMISES, THESE DOCUMENTS WERE MISPLACED AND, THEREFORE, FILED BEFORE THE CIT(A), WHICH GOES TO THE ROOT OF THE ISSUE FOR DECIDING ASSESSEES CL AIM OF AGRICULTURAL INCOME. 34. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HA VE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AN D ALSO HAVE GONE THROUGH THE ADDITIONAL EVIDENCE FILED BEF ORE THE CIT(A) AND ALSO REASONS GIVEN BY THE ASSESSING OFFI CER FOR DECLINE OF ASSESSEES CLAIM OF AGRICULTURAL INCOME. WE HAD ALSO PERUSED SCRUTINY ASSESSMENT ORDER FOR ASSESSME NT YEAR 2003-04 AND 2004-05, WHEREIN ASSESSEES CLAIM FOR AGRICULTURAL INCOME WAS ACCEPTED @ RS. 9000/- PER A CRE. IN VIEW OF THE REASONING GIVEN HEREINABOVE IN THE CASE OF HITESH MEHTA, THE MATTER FOR ALL THE YEARS UNDER CONSIDERATION ARE RESTORED BACK TO THE FILE OF ASSE SSING OFFICER FOR DECIDING AFRESH AFTER CONSIDERING ADDIT IONAL 37 37 EVIDENCE FILED BEFORE THE CIT(A) WHICH GOES TO THE ROOT OF THE ISSUE. 35. THE ASSESSEE IS ALSO AGGRIEVED FOR ADDING THE E NTIRE AMOUNT OF CONTRACT RECEIPTS IN THE INCOME OF ASSESS EE IN PLACE OF TAXING IT AT 8% ON PRESUMATIVE BASIS. 36. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND FO UND FROM RECORD THAT THE ASSESSEE HAS OFFERED 8 % OF CO NTRACT RECEIPT AS ITS INCOME. THE ASSESSEE HAD SHOWN ENTIR E AMOUNT OF CONTRACT RECEIPT AS HAVING BEEN DEPOSITED IN THE BANK ACCOUNT, WHICH WERE UTILIZED TO SUPPORT THE SO URCE OF EXPENDITURE/PAYMENT. HOWEVER, INSPITE OF GIVING OPPORTUNITIES, THE ASSESSEE COULD NOT TELL THE NAME OF PARTIES FROM WHOM CONTRACT RECEIPTS WERE RECEIVED A ND THE NATURE OF CONTRACT. EVEN BEFORE US, NOTHING COULD B E BROUGHT ON RECORD BY THE LD. AUTHORIZED REPRESENTA TIVE TO PERSUADE US TO ACCEPT THAT THE RECEIPTS WERE IN THE NATURE OF CONTRACT ON WHICH 8% PROFIT RATE CAN BE APPLIED. ACCORDINGLY, WE CONFIRM THE ACTION OF THE ASSESSING OFFICER FOR TREATING ENTIRE CONTRACT RECEIPTS AS ASSESSEES INCOME IN THE ASSESSMENT YEAR 2005-06 AS ASSESSEES INCOME. 38 38 37. THE ADDITIONS HAVE ALSO BEEN MADE BY THE ASSESS ING OFFICER IN THE ASSESSMENT YEARS 2003-04 TO 2008-09 IN RESPECT OF CASH DEPOSITED IN THE BANK ACCOUNT. 38. BY THE IMPUGNED ORDER BY CONSIDERING AGRICULTUR AL INCOME AND CONTRACT RECEIPTS IN THE FORM OF CASH AV AILABLE WITH THE ASSESSEE, THE CIT(A) DELETED THE ADDITION IN ASSESSMENT YEAR 2003-04 TO 2007-08 AFTER OBSERVING THAT SUFFICIENT CASH WAS AVAILABLE WITH THE ASSESSEE IN RESPECT OF RESPECTIVE YEARS, WHICH WAS MUCH MORE THAN THE CASH DEPOSIT IN BANK ACCOUNT. IN THE ASSESSMENT YEAR 200 8-09, THE LD. CIT(A) CONFIRMED THE ADDITION OF RS. 4,76,8 42/- BY OBSERVING THAT CASH DEPOSITED IN THE BANK ACCOUNT W AS MORE THAN THE CONTRACT RECEIPT AND AGRICULTURE INCO ME SHOWN AT RS. 23,168/-. PRECISE OBSERVATION OF CIT(A ) WAS AS UNDER :- 7.4 I HAVE EXAMINED THE MATTER. THE ADDITIONAL EVIDENCES SUBMITTED BEFORE ME NOT CONSIDERED FOR DECIDING THE ISSUE DUE TO THE REASON GIVEN ABOVE. THE FACTS OR THE CASH DE POSIT MADE IN VARIOUS HANK ACCOUNTS WERE DEPOSIT DURING THE CO URSE OR SEARCH HENCE THE APPELLANTS PLED THAT THE IMPUGNED A DDITION IS NOT BASED ON ANY MATERIAL FOUND DURING THE COURSE O F SEARCH IS 39 39 NOT VALID. DURING THE HEARING I HAVE EXAMINED THE S OURCE OF ALL DEPOSITS BOTH ABOVE RS. 50000/- AND BELOW RS. 50000/ - THE APPELLANT HAS CLAIMED BEFORE THE A.O, THAT THE CASH DEPOSITS MADE IN THESE BANK ACCOUNTS WERE OUT OF AGRICULTURE INCOME AND CONTRACT RECEIPT. IN THIS APPEAL ORDER THE ADDIT IONS ON ACCOUNT OR AGRICULTURE INCOME AND CONTRACT RECEIPT H AVE BEEN CONFIRMED, IN THE APPELLANTS CASE THE RATIO LAID IN ACIT VS. KULWANT SINGH AND OTHERS IT(SS) 57 TO 63/IND/2008 (INDORE ITAT) IS DIRECTLY APPLICABLE. THE UNACCOUNTED INCOME CLAIMED AS AGRICULTURE INCOME AND CONTRACT RECEIPT HAVE BEEN BROUGHT TO TAX HENCE TAXING THE CASH DEPOSITED IN THE BANK TO THE EXTENT OR ADDITIONS CONFIRMED WILL AMOUNT TO DOUBLE ADDITI ON. IN VIEW OF THE ABOVE, IT IS HELD THAT THE ADDITION MADE ON ACCOUNT OF CASH DEPOSITS MADE IN BANK ACCOUNT IS TO BE REDUCED BY THE ADDITIONS CONFIRMED ON ACCOUNT OR CLAIM OR AGRICULT URE INCOME AND CONTRACT RECEIPT. THE AMOUNT OR ADDITION FOR VARIOUS YEARS IS REDUCED AS UNDER: ASSESSMENT YEAR ADDITION ON ACCOUNT OF CASH DEPOSIT AMOUNT OF ADDITION CONFIRMED ON ACCOUNT OF AGRICULTURE INCOME AND CONTRACT RECEIPT AMOUNT OF CONFIRMED ADDITION ON ACCOUNT OF CASH DEPOSIT IN BANK A.Y.2003-04 252000 366300 NIL A.Y.2004-05 305000 324600 NIL A.Y.2005-06 251000 278950 NIL A.Y.2006-07 150000 442950 NIL 40 40 A.Y.2007-08 450000 530624 NIL A.Y.2008-09 500000 23168 476832 39. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HA VE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AN D FOUND FROM RECORD THAT BEFORE THE ASSESSING OFFICER ASSES SEE HAS FURNISHED CASH FLOW CHART INDICATING AVAILABILITY O F CASH ON THE RESPECTIVE DATES OF DEPOSITS. IN THE SOURCE OF FUND, THE ASSESSEE HAS INDICATED THE INCOME OUT OF AGRICULTUR E, CONTRACT RECEIPT AND ALSO WITHDRAWALS FROM OTHER BA NK ACCOUNT. WE FOUND THAT CASH SO AVAILABLE WITH THE A SSESSEE ON THE RESPECTIVE DATES WERE MUCH MORE THAN THE CAS H DEPOSITED IN THE RESPECTIVE BANK ACCOUNTS IN VARIOU S YEARS. THUS, THE CASH DEPOSITED IN THE BANK HAVE COME OUT OF THE OVER ALL CASH AVAILABLE IN CASH BOOK ON THE PARTICU LAR DATE. THUS, AS PER CASH FLOW EVERY DEPOSIT OF CASH IN THE BANK ACCOUNT WAS EXPLAINED THROUGH OVERALL AVAILABILITY OF CASH IN THE CASH BOOK OF THE PARTICULAR DATE. EVEN AS PER T HE CHART GIVEN BY THE LD.CIT(A) AT PAGE 53 OF HIS APPELLATE ORDER, WE FOUND THAT TOTAL AMOUNT OF CASH DEPOSIT IN ALL THE SIX YEARS WORKED OUT TO BE AT RS. 19,08,000/- AGAINST WHICH C ASH AVAILABLE WITH THE ASSESSEE ON ACCOUNT OF AGRICULTU RE AND 41 41 CONTRACT RECEIPTS WORKS OUT TO BE AT RS. 19,65,918/ - WHICH IS MORE THAN CASH DEPOSIT IN THE BANK ACCOUNT. EVEN IF WE TAKE ONLY THIS CHART OF THE CIT(A), WE FOUND THAT P OSITION OF CUMULATIVE CASH AS AT THE BEGINNING OF THE YEAR VIS --VIS CUMULATIVE CASH DEPOSITED IN BANK ACCOUNT, WE FOUND THAT EVERY YEAR THERE WAS SUFFICIENT CASH BALANCE AVAILA BLE, THE DETAILS OF WHICH ARE AS UNDER :- ASSESSMENT YEAR ADDITION ON ACCOUNT OF CASH DEPOSIT CUMULATIVE BALANCE OF CASH DEPOSITED AMOUNT OF ADDITION CONFIRMED ON ACCOUNT OF AGRICULTURE INCOME AND CONTRACT RECEIPT CUMULATIVE BALANCE OF CASH AVAILABLE A.Y.2003-04 2,52,000 2,52,000 3,66,300 3,66,300 A.Y.2004-05 3,05,000 5,57,000 3,24,600 6,90,900 A.Y.2005-06 2,51,000 8,08,000 2,78,950 9,69,850 A.Y.2006-07 1,50,000 9,58,000 4,42,276 14,12,126 A.Y.2007-08 4,50,000 14,08,000 5,30,624 19,42,750 A.Y.2008-09 5,00,000 19,08,000 23,168 19,65,918 40. IN VIEW OF THE ABOVE, NO ADDITION IS WARRANTED EVEN IN ASSESSMENT YEAR 2008-09. ACCORDINGLY, APPEALS OF R EVENUE ON THIS ISSUE IN ALL THE YEARS ARE DISMISSED, WHERE AS APPEAL OF ASSESSEE IS ALLOWED. 41. THE ASSESSING OFFICER HAS ALSO MADE ADDITION OF RS. 1 CRORE IN THE ASSESSMENT YEAR 2008-09 ON ACCOUNT OF MARRIAGE OF DAUGHTER ALKA MEHTA. 42 42 42. THE FACTS OR THE CASE IN BRIEF ARE THAT THE MARRIAG E OF APPELLANT DAUGHTER KU. ALKA WITH SHRI AMIT WAS SOLE MNIZED ON 18.01/2008 VRINDAVAN GARDEN. HOSHANGABAD ROAD. BHOP AL. MANY DIGNITARIES ATTENDED THE MARRIAGE. THE A.O. HELD TH AT THE MARRIAGE EXPENSES WERE SUPPRESSED AND HE MADE ADDITION OF RS.1 CRORE ON ACCOUNT OR UNACCOUNTED EXPENDITURE FOR MARRIAGE ON PROTECTIVE BASIS AND MADE SUBSTANTIVE ADDITION OF RS.1,00,02,0 00/- IN CASE OF SHRI ARUN SAHLOT ON THIS ACCOUNT. 43. BEFORE THE ASSESSING OFFICER, THE ASSESSEE CLAIMED THAT THE EXPENSES OF MARRIAGE WAS DONE BY HIM AND SUBMIT TED A CASH FLOW STATEMENT AND A LEDGER OF ALKA MEHTA MARR IAGE EXPANSE ACCOUNT. THE PERUSAL OF THE LEDGER A/C SHOW ED THAT ON VARIOUS DATES HE MENTIONED CASH CONTRIBUTION FRO M MR. HITESH MEHTA AND OTHERS TO JUSTIFY THE SOURCE OF EX PENDITURE IN THE MARRIAGE CEREMONY. E.G. ON 15.01.2008 HE MEN TIONS CASH RECEIVED FROM ONE S. MEHTA FOR MARRIAGE EXPENS ES, HOWEVER, IN HIS CASH BOOK SUCH ENTRY FINDS NO MENTI ON. IN THE REVERSE, HE SHOWN IN THE CASH BOOK AN EXPENDITU RE OF RS. 4,00,000 FOR MARRIAGE EXPENSES, HOWEVER IN THE LEDGER OF THE MARRIAGE EXPENSES ACCOUNT NO SHOW EXPENDITURE F INDS ANY MENTION. THE CASH BOOK ITSELF IS NOT TRUE AS TH E VARIOUS 43 43 CASH ENTRIES IN THE BOOKS HAVE BEEN CLAIMED AS AGRI CULTURE INCOME, WHICH AS PER DISCUSSION ABOVE HAVE ALREADY BEEN FOUND TO BE BOGUS. NO CONFIRMATION OF VARIOUS CASH RECEIPTS AND PAYMENTS REFLECTED IN THE CASH BOOK HAS BEEN PR OVIDED BY THE ASSESSEE DESPITE BEING ASKED SPECIFICALLY T O DO SO. THE CASH BOOK HAS BEEN PRODUCED POST SEARCH AND IS ONLY AN AFTERTHOUGHT TO JUSTIFY VARIOUS CASH AMOUNTS WHI CH HAS BEEN CLAIMED TO HAVE BEEN RECEIVED/PAID BY ASSESSEE FROM VARIOUS SOURCES. THE ASSESSEE HIMSELF IS NOT OF THE STATURE TO ORGANIZE A MARRIAGE OF THIS SCALE. 44. AFTER MAKING DETAILED INQUIRY, THE ASSESSING OF FICER ESTIMATED COST OF MARRIAGE AT RS. 1,00,02,000/- AND ADDED THE SAME IN ASSESSEES INCOME AS UNEXPLAINED EXPEND ITURE. THE SUBMISSION OF THE ASSESSEE BEFORE THE CIT(A) WA S AS UNDER :- NO ADDITION IS WARRANTED IN VIEW OF IMPROPRIETY OF ASSTT. CHALLENGED BY US IN EARLIER GROUND. 2 PARTIC ULARLY AS- NO MATERIAL WAS FOUNDED OR BROUGHT ON RECORD FOR SU BJECT ADDITION II) ADDITION HAS BEEN MADE SUBSTANTIVELY IN THE HEA DS OF 44 44 MR. ARUN SAHLOT AND PROTECTIVELY IN THE HANDS OF TH E ASSESSEE. III) MR. ARUN SAHLOT IS MATERNAL UNCLE OF GIRL ALKA . MOST OF THE PAYMENTS FOR MARRIAGE WERE MADE BY FATHER SHRI SURENDRA MEHTA AND BROTHER OF ALKA MR. HITESH MEHT A WHO LIVE IN BHOPAL. ONLY A SUM OF RS. 50,000/- WAS CONT RIBUTED BY MR. ARUN SAHLOT. THAT IS WHY MR.ARUN SAHLOT COUL D NOT GIVE DETAILS OF EXPENDITURE ON THE MARRIAGE OF HIS NIECE, AS DULY INFORMED TO THE AO BY HIM AS UNDER IN THE REP LY DATED 20.12.2010: POINT NO. 32 / QUESTIONNAIRE DTD. 17.06.2010 AS REGARDS EXPENSES ON THE MARRIAGE OF ALKA MEHTA (MY NIECE SISTERS DAUGHTER) ESTIMATED BY YOUR GOODSE LF AT RS. 1 CRORE, IT IS SUBMITTED THAT YOURSELFS ESTIMATION I S GROSSLY INCORRECT AND WITHOUT ANY BASIS. I HAVE NOWHERE STA TED IN MY STATEMENT DURING SEARCH THAT EXPENSES ON ALKAS MAR RIAGE WERE DONE ONLY BY ME. IN FACT, EXPENSES ON ALKAS M ARRIAGE WERE DONE BY HIS FATHER SHRI SURENDRA MEHTA IN WHIC H SOME OF RELATIVES LIKE ME ALSO CONTRIBUTED. HENCE DETAIL S OF EXPENSES ON THE MARRIAGE OF ALKA MEHTA MAY BE EXPLA INED ONLY BY HIS FATHER SHRI SURENDRA MEHTA. I CONTRIBUT ED RS. 45 45 50000/- TOWARDS MARRIAGE EXPENSES WHICH ARE DULY ACCOUNTED FOR IN MY CAPITA A/C ENCLOSED AS ANNEXURE . WE, HOWEVER, EMPLOYED STAFF OF RAJ HOMES GROUP TO ASSIS T IN THE MARRIAGE FUNCTIONS. THE STAFF-PEOPLE OF RAJ HOMES WERE DEPLOYED TO SEE THAT THE ARRANGEMENTS MADE IN THE MARRIAGE CEREMONY WERE ADE QUATE AND DO NOT SUFFER FROM ANY DEFICIENCY SO AS TO NOT TO BRING ANY DISREPUTE TO THE PARENTS OF THE GIRL AS WELL AS TO THE ASSESSEE. V) NO BASIS OR EVIDENCE OF SUCH CONJECTURAL ESTIMAT ION WAS GIVEN BY AO. VI) ASSESSEE, FATHER OF GIRL, DULY EXPLAINED BEFORE ASSESSING OFFICER, DURING THE COURSE OF ASSESSMENT PROCEEDING S, BY WAY OF DETAILED BOOKS OF ACCOUTS / STATEMENT, ALL HEAD WISE EXPENDITURE DONE ON THE MARRIAGE OF HIS DAUGHTER AL KA TO THE EXTENT OF RS. 18,47,557/- (EXCLUDING JEWELLERY BEIN G STRIDHAN OF ASSESSEES WIFE LATE SMT. BADAMI BAI GIFTED TO D AUGHTER WEIGHING 220.900 GM) WHICH HAS NOT BEEN DISPROVED O R DISPUTED BY THE ASSESSING OFFICER. THIS FACT OF EXPLANATION FILED BY ASSESSEE HAS BEEN STATED BY ASSESSING OFFICER AT PG. 33 PARA 2 OF HIS 46 46 ORDER. OTHER THAN THE INDIVIDUAL DETAILS GIVEN IN THE SUMM ARY, THE EXPENSES ON REMAINING HEADS / ITEMS HAVE BEEN DEBITED IN MISC EXPENSES A/C TO THE EXTENT OF RS. 6,84,190/-, INCLUDED IN THE TOTAL AMOUNT SPENT, AS ABOVE. VII) DISBELIEVING THE SAID STATEMENT OF EXPENDITUR E / BOOKS OF ACCOUNT, THE LD. ASSESSING OFFICER WITHOUT ANY MATERIAL, ON THE BASIS OF SURMISES, CONJECTURES AND ESTIMATE, HAS COMPUTED EXPENSES AS GIVEN IN HIS ASSESSMENT ORDER WHICH WOULD HAVE BEEN INCURRED BY THE ASSESSEE. THE TOTAL OF AFORESAID ESTIMATE ADDS UPTO RS. 1,00,00,000/- (RS. ONE CRORE). IT IS SUBMITTED THAT THE ASSESSEE DOES NOT HAVE SUCH WORTH WHICH WOULD MADE HIM TO SPENT THE EXPENSES TO THE EXTENT ESTIMA TED BY THE ASSESSING OFFICER. THE CAPITAL ACCOUNT OF TH E ASSESSEE BEING FILED IN THIS SUBMISSION EVIDENCES T HIS. THERE IS NO EVIDENCE THAT ASSESSEE HAS TAKEN ANY LO AN FROM OUTSIDE TO INCUR THE EXPENSES BEYOND HIS CAPAC ITY. IT IS NORMAL HUMAN CONDUCT THAT A PERSON WOULD NOT MAKE HIM MONEY LESS OR INSOLVENT FOR INCURRING MARR IAGE 47 47 EXPENSES OF HIS GIRL. IT IS ALSO NOT HUMANLY POSSIB LE TO MAINTAIN THE RECORD OF THE EXPENSES INCURRED ON VAR IOUS FUNCTIONS OF THE CEREMONY TAKING PLACE IN THE COURS E OF MARRIAGE: TO EXPLAIN SUCH DETAILS IS HUMANLY IMPOSS IBLE. BUT THEN, THE ASSESSEE EVEN SUBMITTED AVAILABLE BIL LS OF MOST OF THE ITEMS BEFORE ASSESSING OFFICER ALONGWIT H DETAILED BOOKS OF ACCOUNTS / STATEMENT FOR MARRIAGE EXPENSES WHICH HAVE NOT BEEN DISPROVED OR DISPUTED BY THE ASSESSING OFFICER. VIII) HIS ARBITRARINESS IS PROVED FROM THE FACT THA T HE HAS NOT EVEN REDUCED THE EXPENSES OF RS. 18, 47,557 /- (EXCLD. JEWELERY) DONE BY ASSESSEE WHILE MAKING ADDITION. IX) IN FACT, AO ALREADY HAD ALREADY MADE UP HIS MIN D ARBITRARILY TO MAKE ADDITION OF RS.1,00,00,000/- IN THE HANDS OF THE ASSESSEE AND MR. ARUN SAHLOT WHICH IS PROVED FROM THE FACT THAT EVEN BEFORE STARTING TO T OUCH UPON THE ISSUE, HE HAD PRE-DECIDED IMAGINARY FIGURE OF RS. 1,00,00,000/- ALLEGED TO HAVE BEEN SPENT BY THE ASSESSEE. THIS IS CLEAR FROM HIS FIRST QUERY WAY BA CK DATED 17.06.2010 VIDE POINT NO 32 IN THE CASE OF AR UN 48 48 SAHLOT (AS MENTIONED AT PG.32/PARA 1 OF HIS ORDER) ESTIMATING EXP. AT RS. 1,00,00,000/- HEREBY HE HAD ALREADY MADE UP HIS MIND THOUGH HE HAS STATED TO HA VE SUMMONED OWNERS OF HOTEL VRINDAVAN PALACE AND HOTEL MARK AS LATE AS ON 14 TH DEC. 2010. X) HIS ESTIMATION OF NO OF GUESTS IS PURELY IMAGINARY AND ARBITRARY. EVEN HIS SO- CALLED ESTIMATION FOR N OS. OF GUESTS HAVE BEEN VARYING AS CAN BE SEEN FROM HIS OBSERVATIONS AT PG. 29/PARA 2.1. (3000-4000 PERSONS ), PG. 31/POINT 5(VI) J(RECEPTION DINNER @ 190/- FOR 3500 PERSONS AMOUNTING TO RS. 6,65000/-) AND AT PG. 34/PARA 2 (U PTO 3000 PEOPLE HAD ATTENDED THE MARRIAGE CEREMONY). SI MILAR VARIATIONS ARE PERCEPTIBLE WHILE MAKING GUESS OF NO S. OF GUESTS AT OTHER PLACES. XI) IT IS CLEAR FROM ABOVE THAT THE LD ASSESSING OF FICER HAD PREDETERMINED MIND OF MAKING ADDITION OF RS.1,00,00,000/- ON THIS ISSUE WITHOUT ANY VERIFICA TION OR INVESTIGATION. THE SAME IS PROVED FROM THE TOTAL LY IMAGINARY FIGURES GIVEN BY HIM IN HIS CALCULATION WITHOUT ANY BASIS OR EVIDENCE WHICH EVEN A LAYMAN CANNOT DIGEST. 49 49 XII) ACTUALLY, WE ASKED THE ASSESSING OFFICER TO PR OVIDE BASIS OF HIS CLAIM OF EXPENDITURE OF RS. 1,00,00,00 0/- WHICH HE DID NOT PROVIDE. IN ORDER TO JUSTIFY HIS W ILD ESTIMATION, HE CHOSE TO DO BACK- CALCULATION OF VAR IOUS IMAGINARY FIGURES TO STRETCH IT TO CROSS HIS PREDETERMINED BORDERLINE OF RS. 1,00,00,000/-. XIII) RECEPTION WAS ACTUALLY ARRANGED FOR 1200 PERS ONS ONLY WHICH IS SUPPORTED BY PAYMENT MADE TO CATERER M/S. BHANDARY CATERERS, APPOLLO SQUARE 206 & 215 & IIND FLOOR OPP. NARAIN KOTHI 7/2 RACE COURSE ROAD, INDOR E (M.P.) THROUGH CHEQUE. BILL OF THE CATERER WITH COM PLETE ADDRESS WAS GIVEN TO THE AO. THE CATERER HAS NOT BE EN EXAMINED BY AO; HE HAS NOWHERE STATED THAT HE HAS BEEN PAID FOR 3000-4000 PERSONS. THE CATERER WAS PA ID FOR COOKING CHARGES, SUPERVISION CHARGES, SUPPLY OF SERVICE-WAITERS, CROCKERY ETC. ALL RAW MATERIAL LIK E GROCERY, PROVISIONS AND OTHER FOOD ITEMS ETC. WERE GIVEN BY US. XIV) NUMBER OF BARATIS COULD NEVER BE AND WERE NOT 1500 AS STATED BY AO. BARAT CAME FROM POONA (MAHARASHTRA) B Y TRAIN. EXPENSES ON TRANSPORTATION WAS DONE BY 50 50 BRIDEGROOM FAMILY. BARATIS FROM POONA (MAHARASHTRA) WERE ONLY 30-35 PERSONS. XV) HALF ROAD TRAFFIC, AS STATED BY AO, WAS DUE TO REGULAR TRAFFIC DURING WEDDING SEASONS ON THE HOSHANGABAD ROAD WHERE THE VENUE IS SITUATED. THIS ROAD REMAINS JAMMED DURING WEDDING SEASONS AS MOST OF THE WEDDING HALLS / WEDDING GARDENS ARE SITUATED ON THI S ROAD ONLY. XVI) OUTSIDE GUESTS WERE AROUND 10-12 IN NUMBER, MO ST OF THE RELATIVES OF THE ASSESSEE ARE LOCAL, IN HOTEL M ARK, 10 ROOMS WERE BOOKED ALONWITH ROOM IN THE HOTEL VRINDAVAN WHICH AS PER THE PRACTICE IN VOGUE OF WEDDING LAWNS / GARDENS WAS INCLUDED IN THE PACKAGE OF RS. 84,270/- PAID TO HOTEL VRINDAVAN. WE ALSO HA VE LOCALLY TWO SPACIOUS HOUSES OF RELATIVES. ALL THE B ARATIS / GUESTS WERE HOUSED IN THESE HOTELS AND HOUSES. NO OTHER HOTEL WAS BOOKED AND THE BOOKING OF ONLY TWO HOTELS WAS PROVED FROM HOTEL HIRING CHARGES LEDGER A/C AND GARDEN WITH DECORATION EXPENSES LEDGER A/C IN T HE MARRIAGE EXPENSES BOOKS OF ACCOUNTS FILED AND EXPLAINED BEFORE A.O. THE ESTIMATION OF 100 NO. OF 51 51 OUTSIDE GUEST BY AO IS UNILATERAL AND WITHOUT ANY BASIS. THERE IS NO EVIDENCE BROUGHT BY AO ON RECORD REGARDING STAYING OF 100 NO. OF OUTSIDE GUESTS IN HOTELS. IT IS A PURE GUESS WORK. MOREOVER, AS PER S ETTLED LAW, ANY VAGUE, IMAGINARY AND HYPOTHETICAL STATEMEN T OF THIRD PARTY BEHIND THE BACK OF ASSESSEE CAN NOT BE RELIED UPON, AS DONE BY AO, UNLESS THE SAME IS CONFRONTED TO THE ASSESSEE AND PROPER AND FAIR OPPORTUNITY IS GIVEN TO REBUT THE SAME. BUT THE SAM E WAS NOT DONE. XVII) LIGHTING ARRANGEMENT IN THE LAWN WAS PART OF THE FIXED FACILITIES PROVIDED BY HOTEL INCLUDING THE BRIDGE PERMANENTLY MADE BY THE HOTEL ITSELF. THE HOTEL CHARGED FIXED AMOUNT FOR PROVIDING LAWN FULLY DECORATED BY THEM ALONGWITH ROOMS ONLY AS PART OF T HE PACKAGE IN VOGUE. A SUM OF RS.84,270/- WAS PAID TO HOTEL VRINDAVAN THROUGH CHEQUE. XVIII) PAYMENT TO THE DANCE GROUP WAS MADE TO THE E XTENT OF RS. 60,000/- AS PER BILL FILED BEFORE AO XXI) NO EVIDENCE WAS FOUND DURING SEARCH OR BROUGHT ON RECORD BY THE AO THAT ASSESSEE HAS INCURRED EXPENSE S 52 52 TO THE EXTENT ARBITRARILY ESTIMATED BY AO WHICH HAV E NOT BEEN RECORDED IN THE BOOKS OF ACCOUNTS. HAD THE ASSESSEE INCURRED SUCH HUGE EXPENSES OUT OF BOOKS, AT AN IOTA OF EVIDENCE OF EVEN A PALTRY EXPENSES COULD HAVE BEEN FOUND DURING SEARCH. BUT THERE IS NOT EV EN A WHISPER OF IT IN THE ORDER OF A.O. XXII) NEITHER THE ASSESSEE NOR ANY OR THE PARTY REL ATED WITH MARRIAGE FUNCTION HAS EVER STATED OR AFFIRMED INCUR RING OF SUCH HUGE EXPENSES BY ASSESSEE TO THE EXTENT ARBITRARILY ESTIMATED BY AO. XXIV) AS REGARDS AOS OBSERVATION AT PG. 33/PARA 2, RELATING TO RS. 4,00,000/- WITHDRAWN IN CASH ON 15.01.2008 BUT STATED TO HAVE NOT BEEN SHOWN IN THE CASH BOOK, THE SAME IS DULY SHOWN IN THE CASH BOOK AS WITHDRAWAL FILED BEFORE AO AND CORRESPONDING AMOUNT IS DULY SHOWN AS RECEIPT / INFLOW IN THE CASH BOOK OF MARRIAGE EXPENSES RELIED ON: WE HAVE TO KEEP IN MIND THAT THE ASSESSEE WAS MARRIED FOR MORE THAN 25-30 YEARS. THE JEWELLERY IN QUESTION IS NOT VERY SUBSTANTIAL. THE LEARNED COUNS EL 53 53 FOR THE APPELLANT / ASSESSEE IS CORRECT IN HER SUBMISSION THAT IT IS A NORMAL CUSTOM FOR WOMAN TO RECEIVE JEWELLERY IN THE FORM OF STREE DHAN OR O N OTHER OCCASIONS SUCH AS BIRTH OF A CHILD ETC. COLLECTING JEWELLERY OF 906.900 GRAMS BY A WOMAN IN A MARRIED LIFE OF 25-30 YEARS IS NOT ABNORMAL. FURTHERMORE, T HERE WAS NO VALID AND / OR PROPER YARDSTICK ADOPTED BY T HE ASSESSING OFFICER TO TREAT ONLY 400 GRAMS AS REASONABLE ALLOWANCE AND TREAT THE OTHER AS UNEXPLAINED. MATTER HAVE BEEN DIFFERENT IF THE QUANTUM AND VALUE OF THE JEWELLERY FOUND SUBSTANTIA L. WE ARE, THEREFORE, OF THE OPINION THAT THE FINDINGS OF THE TRIBUNAL ARE TOTALLY PERVERSE AND FAR FROM THE REALITIES OF LIFE. IN THE PECULIAR FACTS OF THIS CASE WE ANSWER THE QUESTION IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE THEREBY DELETING THE AFORESAID ADDITION OF RS. 3,87,364/-. ASHOK, CHADHA VS. ITO (2011) 202 TAXMAN 395 (DELHI HC) IN CASE OF SEARCH IN THE CASE OF ANANDILAL V. ACIT (2004) 86 TTJ 1135 (INDORE), GOLD 54 54 JEWELLERIES WERE EXPLAINED BY LADIES THROUGH AFFIDAVITS. THE HONBLE TRIBUNAL HELD AS UNDER (HEAD NOTE): GOLD ORNAMENTS FOUND DURING SEARCH- ASSESSEE EXPLAINED THAT VARIOUS GOLD ORNAMENTS BELONGED TO UNMARRIED MEMBERS OF THE JOINT FAMILY OF THE ASSESSEE AND HIS BROTHER WITH WHOM HE WAS RESIDING AND TO THE LADIES MARRIED INTO THE FAMILY AFFIDAVITS FILED BY THE PARENTS OF SAID TWO LADIES EXPLAINING THE GOLD FOUND FROM THEIR POSSESSION UNLESS REBUTTED CANNOT BE DISBELIEVED IT IS CUSTOMARY TO GIFT ORNAMENTS TO CHILDREN ON FESTIVAL OCCASIONS IN HINDU FAMILIES OF STATUS EXPLANATION FURNISHED BY THE ASSESSEE DOES NOT APPEAR TO BE UNREASONABLE HAVING REGARD TO THE SIZE OF THE FAMILY AS WELL AS THE STATUS OF THE FAMILY (BESIDES, NO DOCUMENT HAS BEEN FOUND DURING THE SEARCH INDICATING RECENT ACQUISITION OF THESE GOLD ORNAMENTS BY THE ASSESSEE- THUS THE ADDITION IN THIS REGARD DELETED. IN VIEW OF ABOVE CIRCUMSTANCES, AND FOR WANT OF SUPPORTING MATERIAL BY THE AO OF THE ESTIMATE SO MA DE BY HIM, THE ADDITION MADE MAY KINDLY BE QUASHED AND 55 55 THE VERSION OF THE ASSESSEE BASED ON DETAILS FURNIS HED BY HIM MAY KINDLY BE ACCEPTED BY YOURHONOUR. 45. BY THE IMPUGNED ORDER, THE CIT(A) HELD THAT EXPENDITURE WAS INCURRED BY THE ASSESSEE AND NOT BY ARUN SAHLOT. AFTER CONSIDERING VARIOUS EVIDENCES FILED B Y THE ASSESSEE TO SUPPORT THE ACTUAL EXPENDITURE INCURRED BY ASSESSEE AND TAKING INTO ACCOUNT THE ESTIMATION MAD E BY THE ASSESSING OFFICER, HE DETERMINED MARRIAGE EXPEN DITURE AT RS. 40 LAKHS. AFTER REDUCING THE EXPENDITURE SHO WN BY THE ASSESSEE, THE BALANCE ADDITION WAS UPHELD BY TH E CIT(A). THUS, THE CIT(A) DELETED ADDITION IN THE HANDS OF A RUN SEHLOT, WHICH WAS MADE ON SUBSTANTIVE BASIS BUT CON FIRMED THE ADDITION IN THE HANDS OF THE ASSESSEE WHO IS F ATHER OF KU.ALKA. PRECISE OBSERVATION OF THE CIT(A) WAS AS U NDER :- 8.4 I HAVE EXAMINED THE ISSUE. THE APPELLANT IS BUSINESSMAN. HE IS BROTHER IN LAW OF, SHRI ARUN SAHLOT, WHO IS PUBLISHING A NEWS PAPER CALLED RAJ EXPRESS. SHRI SAHLOT IS VERY ACTIVE IN SOCIAL-POLITICAL CIRCLE OF M.P. IT APPEARS THAT THE MARRIAGE GOT PUBLICITY DUE TO THE FACT THAT IT WAS 56 56 MARRIAGE OF THE DAUGHTER OF SHRI SAHLOT'S SISTER. THESE REASONS ARE NOT ADEQUATE AND SUFFICIENT TO HOLD THAT THE MARRIAGE WAS SOLEMNIZED BY SHRI SAHLOT. THE BRIDES FATHER HIMSELF IS AN ESTABLISHED BUSINESSMAN. AS PER INDIAN CUSTOMS, BRIDES FATHER AND FATHER'S FAMILY BEARS THE EXPENSES FOR MARRIAGE OF DAUGHTER. THE APPELLANT HAS CLAIMED THAT HE AND HIS BROTHER HAVE BORNE THE EXPENSES OF MARRIAGE. IN THESE CIRCUMSTANCES THE APPELLANT IS ACCOUNTABLE FOR EXPENSES DONE ON MARRIAGE AND NOT SHRI SAHLOT. 8.5 THE APPELLANT HAS SHOWN TOTAL EXPENSES ON MARRIAGE AT RS.1,84,557/- THE EXPENSES INCURRED FOR JEWELLERY IS NOT INCLUDED IN THIS AMOUNT. IT IS CLAIMED THAT NO JEWELLERY HAS BEEN PURCHASED FOR THE MARRIAGE AND JEWELLERY GIVEN WAS THE ONE ACCUMULATED OVER YEARS. THE A.O. HAS ESTIMATED THE EXPENSES BUT THE ESTIMATE IS NOT SUPPORTED BY ANY MATERIAL. THE A.O. HAS STATED THAT BARAT PROCESSION CONSIST OR 1500 MEMBERS AND 57 57 RECEPTION WAS ARRANGED FOR 3000-4000 PERSONS. THE APPELLANT HAS CLAIMED THAT VRINDAVAN GARDENS, THE VENUE OF RECEPTION CANNOT ACCOMMODATE SO MANY PERSONS AND THAT IT HAS CAPACITY TO ACCOMMODATE ONLY 400 PERSONS. IT IS ALSO SLATED BY THE APPELLANT THAT THE BARAT HAD COME FROM MAHARASHTRA HENCE IT WAS NOT FEASIBLE TO BRING 1500 BARATIS FROM M AHARASHTRA. AFTER EXAMINING THE ISSUE IT IS FOUND THAT NEITHER THE ESTIMATE MADE BY THE A.O. NOR THE DETAIL OR EXPENSES SUBMITTED BY THE APPELLANT IS RELIABLE. IN THESE CIRCUMSTANCES THE ONLY WAY POSSIBLE TO ARRIVE AT A DECISION IS THE ESTIMATION OF VARIOUS, EXPENSES AFTER CONSIDERING ALL MATERIAL ON RECORD. THE APPELLANTS CLAIM THAT NO JEWELLERY IS PURCHASED FOR GIVING TO THE BRIDE AND THE BRIDEGROOM IS NOT PLAUSIBLE. THIS SHOWS THAT THE MAJOR PART OF JEWELLERY GIVEN TO THE BRIDE AND THE BRIDEGROOM ARE PURCHASED FROM UNACCOUNTED SOURCES. THE UNACCOUNTED EXPENDITURE ON ACCOUNT OF PURCHASE OR JEWELLERY IS ESTIMATED AT 58 58 RS.10,00,000/- KEEPING IN VIEW THE SOCIO- ECONOMIC STATURE OF THE APPELLANT AND HIS FAMILY. THE EXPENDITURE ON ALL OTHER ITEMS IS ESTIMATED AT RS.3000000/- THE APPELLANT HAS SHOWN EXPENDITURE OF RS. 1847557/- THE TOTAL EXPENDITURE ON MARRIAGE IS DETERMINED AT RS. 4000000/- AFTER REDUCING THE EXPENSES SHOWN AT RS.1847557/- THE UNACCOUNTED EXPENDITURE IS DETERMINED AT RS.2152443/- IN VIEW OF THE ABOVE THE AMOUNT OF ADDITION OF RS. 1 CRORE IS REDUCED TO RS.2152443 AND IS CONFIRMED ON SUBSTANTIVE BASIS IN HANDS OF THE APPELLANT. 46. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BEL OW AND FOUND FROM RECORD THAT ON THE BASIS OF VIDEO SHOOTI NGS AND LOCAL INQUIRY, THE ASSESSING OFFICER HAS ESTIMATED MARRIAGE EXPENDITURE AT RS. 1 CRORE. THE ASSESSEE HAS FURNIS HED DETAILS OF ACTUAL EXPENDITURE INCURRED BY HIM AMOUN TING TO RS. 18,47,557/-. BY CONSIDERING THE REASONS GIVEN BY THE ASSESSING OFFICER FOR ESTIMATING THE MARRIAGE EXPEN SES, THE LD. CIT(A) DETERMINED MARRIAGE EXPENDITURE AT RS. 4 0 LAKHS. 59 59 WHILE ESTIMATING MARRIAGE EXPENDITURE OF DAUGHTER, THE GIFTS GIVEN BY THE RELATIVE AND CLOSE FRIEND ATTENDING TH E MARRIAGE CANNOT BE BRUSHED ASIDE. EVEN AS PER THE FINDINGS R ECORDED BY THE ASSESSING OFFICER VARIOUS RELATIVES AND RESP ECTABLE PERSONS OF THE SOCIETY ATTENDED THE MARRIAGE, A REA SONABLE GIFT RANGING FROM RS. 500/- TO RS. 1000/- BY SUCH RELATIVES FAMILY FRIENDS CANNOT BE OVERLOOKED AND ,THEREFORE, KEEPING IN VIEW THE NUMBER OF GUESTS ATTENDING THE FUNCTION AND TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, WE MODIFY THE ORDER OF CIT(A) AND THE MARRIAGE EXPENDITURE E STIMATED BY THE LD.CIT(A) AT RS. 40 LAKHS IS REDUCED TO RS. 35 LAKHS. ACCORDINGLY, THE ASSESSING OFFICER IS DIRECTED TO R ETAIN THE ADDITION AFTER CONSIDERING THE ACTUAL EXPENDITURE S HOWN BY THE ASSESSEE AMOUNTING TO RS. 18,42,557/-. WE DIREC T ACCORDINGLY. 47. REVENUE IS ALSO IN APPEAL BEFORE US WITH RESPEC T TO THE ADDITION DELETED BY THE LD.CIT(A) ON ACCOUNT OF CAS H DEPOSIT IN THE BANK ACCOUNT. AS DISCUSSED HEREINABOVE, THE ASSESSEE WAS HAVING SUFFICIENT CASH AVAILABLE AS PE R THE CASH FLOW CHART GIVEN BEFORE THE ASSESSING OFFICER. WE DO NOT 60 60 FIND ANY INFIRMITY IN DELETING THE ADDITION BY CIT( A), IN RESPECT OF CASH DEPOSIT IN THE BANK ACCOUNT. 48. IN THE RESULT, APPEALS OF ASSESSEE ARE ALLOWED IN PART, WHEREAS APPEALS OF REVENUE ARE DISMISSED. SANJAY METHA : I.T(SS).A.NOS. 206 TO 212/IND/2012 : 49 . THESE ARE THE APPEALS FILED BY THE ASSESSEE AGAINS T THE ORDER OF CIT(A) DATED 1 ST MARCH, 2012, FOR THE ASSESSMENT YEARS 2003-04 TO 2009-10 IN THE MATTER OF ORDER PAS SED U/S 153A READ WITH SECTION 143(3) OF THE INCOME-TAX ACT , 1961. 50. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. THERE WAS SEARCH AT THE ASSESSEES RESIDEN TIAL PREMISES AT E5/148, ARERA COLONY, BHOPAL. DURING TH E COURSE OF SEARCH, SOME INCRIMINATING DOCUMENTS WERE FOUND. AFTER RECORDING REASONS, THE ASSESSING OFFIC ER ISSUED NOTICES U/S 153A IN COMPLIANCE TO WHICH THE ASSESSE E FILED RETURN ON INCOME. 51. THE ASSESSING OFFICER MADE ADDITION IN RESPECT OF AGRICULTURAL INCOME DECLARED BY THE ASSESSEE IN THE ASSESSMENT YEARS 2003-04 TO 2008-09 ON THE SAME REASONING AS GIVEN IN CASE OF OTHER GROUP ASSESSEE , THE 61 61 ASSESSING OFFICER TREATED AGRICULTURAL INCOME AS IN COME FROM OTHER SOURCES. BY THE IMPUGNED ORDER, THE CIT( A) CONFIRMED THE ADDITION. 52. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND FO UND FROM RECORD THAT TO SUBSTANTIATE THE CLAIM OF AGRIC ULTURAL INCOME, THE ASSESSEE HAS FILED ADDITIONAL EVIDENCE UNDER RULE 46A BEFORE THE CIT(A) IN THE FORM OF ORIGINAL LEASED AGREEMENT, ORIGINAL AFFIDAVITS OF FARMERS, ORIGINAL AFFIDAVITS OF ASSESSEE, ORIGINAL KHASRA, KHATAUNI AND FORM P-I I WHICH ARE PLACED AT PAGE 102 TO 382 OF THE PAPER BOOK. TH E ASSESSEE HAS ALSO FILED ORIGINAL RECEIPTS FOR PAYME NT OF LEASE RENT. HOWEVER, THE CIT(A) DID NOT ADMIT THE SAME ON THE GROUND THAT THESE WERE NOT FILED BEFORE THE ASSESSI NG OFFICER DESPITE OPPORTUNITY AND OR WITHOUT SUFFICIENT CAUSE . IT WAS ARGUED BY LD. AUTHORIZED REPRESENTATIVE THAT THESE DOCUMENTS WERE MISPLACED DUE TO SHIFTING OF OFFICE AND THAT THE ASSESSEE GAINED NOTHING BY NOT FILING THE DOCUM ENTS BEFORE THE ASSESSING OFFICER AS NOBODY WOULD LIKE T O SPOIL HIS OWN CASE. HE ALSO INVITED OUR ATTENTION TO THE SCRUTINY ASSESSMENT ORDER FRAMED BY THE ASSESSING OFFICER FO R THE ASSESSMENT YEAR 2003-04 AND 2004-05 WHEREIN AGRICUL TURAL 62 62 INCOME OF RS. 5,86,500/- OFFERED FOR THE ASSESSMENT YEAR 2003-04 WAS ACCEPTED AT RS. 4,93,830/-. IN THE ASSE SSMENT YEAR 2004-05, THE ASSESSEE HAS RETURNED AGRICULTURA L INCOME OF RS. 6,08,100/-, WHICH WERE ACCEPTED BY TH E ASSESSING OFFICER WHILE FRAMING ASSESSMENT U/S 143( 3). THUS, THE AGRICULTURAL INCOME OFFERED AT RS. 10,690 /- PER ACRE IN THE ASSESSMENT YEAR 2003-04 WAS ACCEPTED AT RS. 9000/-, WHEREAS AGRICULTURAL INCOME OF RS. 8532/- P ER ACRE IN THE ASSESSMENT YEAR 2004-05 WAS ACCEPTED BY THE ASSESSING OFFICER ON THE VERY SAME FIGURE. FOLLOWIN G THE REASONING GIVEN BY US IN THE CASE OF HITESH MEHTA ( SUPRA), THE MATTER IS RESTORED BACK TO THE FILE TO THE ASSE SSING OFFICER FOR ALL THE YEARS UNDER CONSIDERATION FOR D ECIDING AFRESH AFTER CONSIDERING ADDITIONAL EVIDENCE FILED BY THE ASSESSEE. 53. THE ASSESSING OFFICER HAS ALSO MADE ADDITION IN RESPECT OF INVESTMENT IN HOUSE NO. E-3/4, ARERA COL ONY, BHOPAL IN THE ASSESSMENT YEAR 2006-07 TO 2009-10 10 .1 THE FACTS OF THE CASE IN BRIEF ARE THAT THE APPELLA NT HAVE TAKEN A LEASE HOLD PLOT OF LAND AT E-3/4, ARERA COL ONY, BHOPAL FROM BHOPAL MUNICIPAL CORPORATION. AS PER TH E LEASE 63 63 AGREEMENT THE APPELLANT HAD PAID RS.98,00,000/- AND ANNUAL LEASE WAS TO BE PAID AT RS. 4,90,000/- THE A .O. HELD THAT OUT OF PREMIUM PAID AT RS.98,00,000/- THE SOUR CE OF RS. 23,00,000/- WAS NOT EXPLAINED HENCE HE MADE THE ADDITION OF RS.23,00,000/- IN A.Y. 2006-07. HE ALSO FOUND THAT THE APPELLANT HAS NOT EXPLAINED THE SOURCE OF PAYMENT OF LEASE RENT OF RS. 4,90,000/- FOR ASSESSMENT DURI NG THE PREVIOUS YEARS RELEVANT TO ASSESSMENT YEAR 2007 -08 TO 2009-10. THE A.O. GOT VALUATION OF THE PROPERTY CLONE AND MADE ADDITION ON ACCOUNT OF THE DIFFERENCE BETWEEN THE COST OF CONSTRUCTION ASSESSED BY THE DYO AND COST OF CONSTRUCTION SHOWN BY THE APPELLANT. ON THIS ISSUE THE A.O. MADE FOLLOWING ADDITIONS: I) ON ACCOUNT OF UNEXPLAINED PAYMENT OR PREMIUM = RS. 23,00,000/- IN A Y 2006-07. II) ON ACCOUNT OF UNEXPLAINED PAYMENT OF LEASE RENT: A.Y. 2007 - 08 4,90,000/ - A.Y. 2008 - 09 4,90, 000/ - A.Y. 2009 - 10 4,90,000/ - III) ON ACCOUNT OF UNEXPLAINED INVESTMENT FOR COST OF CONSTRUCTION: 64 64 A.Y. 2006-07 34,930/- A.Y. 2007-08 4,53,611/- A.Y. 2008-09 35,12,768/- A.Y. 2009-10 27,26,711/- 54. BEFORE THE CIT(A), THE SUBMISSION OF THE ASSESS EE WAS AS UNDER :- 1. ) ASSESSEE PURCHASED A PLOT AT E-3/4, A RERA COLONY, BHOPAL IN JOINT NAME WITH HIS WIFE MRS. SEEMA MEHTA . THE LAND WAS PURCHASED FROM BHOPAL DEVELOPMENT AUTHORIT Y AT PREMIUM O F RS. 98,00,000/ AND ANNUAL RENT OF RS. 4,90,000/. 2. THE COST OF PLOT, COST OF CONSTRUCTION AND LOAN FROM HDFC (TAKEN IN FOUR NAMES) FOR PURCHASING /CONSTRUCTING THIS HOUSE WAS DISTRIBUTED EQUALLY AND SHOWN IN THE BALA NCE SHEETS FILED BEFORE AO OF FOLLOWINGS AND AS SUBMITT ED BEFORE HIM DURING ASSESSMENT : NAME OF THE ASSESSEE/ APPELLANT AMOUNT SHOWN IN B/S RS. PAYMENT MADE BY RAJ HOMES DIRECTLY TOTAL REMARK SANJAY MEHTA- ASSESSEE 67,42,262/- 2,50,000/- 69,92,262/- LETTER DTD. 20.12.2010 BEFORE AO COPY AT PG. 597 LETTER DTD. 23.12.2010 65 65 3. THE SAID L OAN FROM HDFC WAS DISBURSED IN DIFFERENT INSTALLMENTS. PRIOR TO THE ENTIRE DISBURSAL OF THE LOAN, INVESTME NT IN THE HOUSE WAS MADE FROM VARIOUS SOURCES LIKE _ I. FROM RAJ HOMES PVT. LTD THROUGH CHEQUES II. PERSONAL BANK ACCOUNT OF SANJAY MEHTA (ASSESSEE ) THROUGH CHEQUES III. PERSONAL BANK ACCOUNT SANDEEP MEHTA BROTHER OF ASSESSEE THROUGH CHEQUES ETC. 4. ALL THE MONEY RECEIVED WERE THROUGH CHEQUES, EITHER IT IS BY WAY OF LOAN OR CONTRIBUTION B Y SANJAY MEHTA OR SANDEEP MEHTA OR PAYMENTS FROM RAJ HOMES PVT. LTD. ALL THESE BANK ACCOUNTS WHEREFROM MONEY WERE RE CEIVED EITHER OF ASSESSEE SANJAY MEHTA OR BROTHER SANDEEP MEHTA W ERE DULY DISCLOSED BEFORE AO. LEDGER OF BANK ACCOUNTS OF RAJ HOMES PVT. BEFORE AO COPY AT PG. 600 SANDEEP MEHTA- BROTHER 67,42,262/- 2,50,000/- 69,92,262/- -- SEEMA MEHTA- WIFE OF ASSESSEE 67,42,262/- 2,50,000/- 69,92,262/- -- PRIYA MEHTA WIFE OF SANDEEP MEHTA 67,42,262/- 2,50,000/- 69,92,262/- -- TOTAL INVESTMENT 2,69,69,048/- 10,00,000/- 2,79,69,049/- 66 66 LTD. WERE IN SEIZED RECORDS WITH A 0. 5, SIMILARLY, ALMOST ALL THE PAYMENTS (EXCEPT FOR SOME SMALL AMOUNTS) WERE MADE THROUGH CHEQUES AND THIS FACT WAS CLEARLY SUBMITTED BEFORE AO REPEATEDLY AND NO PAYMENTS WERE MADE OUT OF BOOKS. ALL THESE BANK ACCOUNTS WERE DULY DISCLOSED BEFORE AO / AVAILABLE IN SEIZED RECORDS W ITH AO, AS ABOVE. 6. NO UNDISCLOSED BANK ACCOUNTS WERE FOUND. ASSESSEE FILED CASH F LOW STATEMENT TO AO, IN A SUMMARY F ORM, TO EXPLAIN THE SOURCE OF INVESTMENT HOWEVER, DUE TO EN ORMOUS PRESSURE OF MAKING COMPLIANCE OF AROUND 60-70 SEARCH CASES AT A TIME OF THE GROUP BEFORE AO, INADVERTENTLY THE STAFF OF THE ASSESSEE FILED INCORRECT DETAILS OF SOURCES AND EXPENSES BEFO RE AO; THOUGH IT WERE ONLY THROUGH CHEQUES AND IN TOTALITY IT WAS CORRECT WHICH IS CLEAR FROM THE FACTS THAT TOTAL INVESTMENT SHOWN TO HAVE BEEN MADE BY THESE FOUR PERSONS WAS CORRECTLY SHOWN AT RS. 2,79,69,049/- . LD. AO HAS ALSO REFERRED TOTAL INVESTMENT AT RS. 2, 79,69,049/- AS PER TABLE GIVEN AT PAGE 35, PARA 3.1 OF HIS ORDER. AS SOON AS THIS MISTAKE CAME TO OUR NOTICE, WE IMMEDIATELY FILED A LETTER TO THE AO ON 27.12.2011 ( ASSTT. ORDER DTD. 30.12.2011) BRINGING OUT THIS FACT AND PRAYED FOR GIVING ONLY ONE DAYS TI ME TO 67 67 FURNISH CORRECT DETAILS OF THE INVESTMENT. WE CATEG ORICALLY STATED THAT : 'REGARDING INVESTMENT IN H OUSE NO. E-3/4, ARERA COLONY, BHOPAL : AS REGARDS TO INVESTMENT IN HOUSE NO. E-3/4, A RERA COLONY, BHOPAL, IT IS SUBMITTED AS UNDER: 1. THERE WAS LOT OF PRESSURE ON THE STAFF OF ACCOUNTS DEPTT. FOR MAKING COMPLIANCE OF FREQUENT & PENDING QUERIES OF THE INDIVIDUALS OF THE GROUP. (DUE TO THIS ENORMOUS PRESS URE, THEY HAVE AGAIN NOT REPORTED PROPER FIGURE OF INVESTMENT V IS-A-VIS SOURCE OF THAT HOUSE, WHICH IS DEEP[Y REGRETTED. 2. ALL THE PAYMENTS FOR THE CONSTRUCTION OF THE HOUSE HAVE BEEN MADE ONLY THROUGH CHEQUES FROM DECLARED AND DISCLOS ED BANK ACCOUNTS. ALL THE ENTRIES IN THE SAID BANKS ARE FRO M DECLARED SOURCES OF INCOME. ALL YOUR ABOVE ASSESSEES, AND FOR THAT MATTER NONE OF THE ASSESSEE IN THE GROUP, HAS GOT ANY UNDISCLOSED BANK ACCOUNT. FURTHER, NONE OF YOUR ASS ESSEE HAS ANY UNDISCLOSED SOURCE OF INCOME. 3. KINDLY ALLOW US ONLY ONE DAYS TIME TO ENABLE US TO PREPARE REVISED BOOKS OF ACCOUNTS CONTAINING DETAILED SOURC E OF INVESTMENTS, PAYMENTS AND OBLIGE. 4 . PAYMENTS HAVE BEEN MADE THROUGH CHEQUES FOR PURCHASE OF 68 68 LAND AS WELL AS FOR CONSTRUCTION EXPS. THROUGH VARI OUS SMALL- SMALL ENTRIES SCATTERED IN DIFFERENT ASSESSMENT YEA RS FROM THE DIFFERENT BANK A/CS OF RAJ HOMES PVT. LTD. , SANJAY MEHTA & OTHERS. 5. EVEN THERE ARE MISTAKES IN THE FIGURES AND YEA R OF INVESTMENT & EXPENSES EARLIER REPORTED. THERE ARE OTHER MISTAKES ALSO. BUT WE ASSURE YOU, SIR, THAT ALL ARE HUMAN, CLERICAL AN D UNINTENDED MISTAKES DUE TO HEAVY LOAD OF WORK, BY OUR ACCOUNTS STAFF PEOPLE ONLY. 6. HOWEVER, SOURCE OF INVESTMENT INTO LAND I S AS UNDER :- COPY OF BANK ABOVE A/CS ARE ENCLOSED AS ANNEXURE LAND COST 98,00,000/- 98,00,000/- SOURCE PAID TO COLLECTOR, BHOPAL DIRECTLY THROUGH ICICI CH EQUE- CHQ. NO. 624860 30.08.2005 50,00,000/- CHQ. NO. 624862 30.08.2005 23,50,000/- 73,50,000/- PAID BY SANDEEP MEHTA 14,50,0 00/- SBI GOVINDPURA CHQ. NO. 338840 RAJ HOMES CHQ. 04.08.2005 5,00,000/- NO. 15593 69 69 RAJ HOMES CHQ. 04.08.2005 5,00,000/- 24,50,000/- NO. 15594 TOTAL 98,00,000/- WE REITERATE OUR MOST HUMBLE PRAYER TO ALLOW US ON LY ONE DAYS TIME TO PREPARE MINUTE DETAILS BECAUSE, AS STATED ABOVE, VARIOUS SMALL-SMALL ENTRIES HAVE ROUT ED THROUGH MANY BANK ACCOUNT OF RAJ HOMES PVT. LTD., SANJAY MEHTA & OTHERS AND TRACING THOSE ENTRIES IS TAKING TIME. BUT WE ASSURE YOU SIR, ALL PAYMENTS HA VE BEEN MADE THROUGH CHEQUES AND OUT OF DISCLOSED SOURCES ONLY AND THERE IS NOT EVEN A SINGLE PENNY OF UNDISC LOSED INVESTMENT IN TO THAT HOUSE. IN CASE YOURHONOUR ALLOWS US ONLY ONE DAYS TIM E, THE ACCOUNTS STAFF OF THE GROUP SHALL BE HIGHLY OBLIGED BECAUSE OTHERWISE THEY WILL HAVE TO BEAR BRUNT OF ANY ADVER SE INFERENCE DRAWN BY YOURHONOUR DUE TO THEIR HUMAN, C LERICAL & : UNINTENTIONAL PERSONAL MISTAKE, AS ABOVE. SIR, IF WE ARE ALLOWED ONLY DAY'S TIME, WE W ILL ALSO MAKE PENDING SUBMISSIONS, I F ANY, AS OUR COUNSEL IS HEAVILY HARD PRESSED AND WORKING DAY AND NIGHT IN REPLYING & PRE PARING FOR DETAILED AND FREQUENT QUERIES FOR INDIVIDUALS OF TH E GROUP. KINDLY, 70 70 THEREFORE, GRANT ONLY ONE DAY'S ADJOURNMENT AND OBL IGE' 8. HOWEVER, THE LD. AO IGNORED OUR REQUEST AND MADE THE ADDITION IGNORING THE FACT THAT INVESTMENT I N TO THE SAID HOUSE WAS DULY DISCLOSED IN THE BALANCE SHEET FILED BEFORE HI M OF HIS FOUR ASSESSEES, AS ABOVE. HE EVEN IGNORED THIS FACT BROU GHT BY US BEFORE HIM DURING ASSESSMENT. 9. WE ARE ENCLOSING HEREWITH-DETAILED BOOKS OF ACCOUNTS FOR THE SAID HOUSE NO. E -3/4 AT ALONG WITH APPLICATION U/R 46A. AS PER THE SAID BOOKS/CASH FLOW, INVESTMENT IN THE SAID HOUSE AND AS VALUED BY DVO ARE AS UNDER: COST OF LAND COST OF CONSTRUCTION TOTAL AS PER DVO 98,00,000/- 2,07,51,909/- 3,05,51,209/- AS PER ASSESSEE 98,00,000/- 1,81,69,049/- 2,79,69, 049/- DIFFERENCE - 25,82,860/- 25,82,160/- THUS, THE DIFFERENCE WAS WITHIN PERMISSIBLE LIMITS, AND HENCE NO ADDITION WAS REQUIRED. 10. THE DETAILED BOOKS OF ACCOUNTS CLEARLY EVIDENCE : YEARWISE SOURCES. YEARWISE INVESTMENT. PAYMENTS FOR CONSTRUCTION OF HOUSE MATCHING WITH BA NK LOANS AND VARIOUS AMOUNTS DEPOSITED IN THE BANK 71 71 ACCOUNT. LINKING WITHDRAWLS FROM ALL BANK ACCOUNTS WITH PAYMENTS MADE. LEDGER ACCOUNT O F SANJAY MEHTA IN THE BOOKS OF RAJ HOMES (AS APPEARING IN THE SEIZED RECORDS O F RAJ HOMES PVT. LTD. WITH AO) IN THE CASE OF SANJAY MEHTA (ASSESS EE): COPY OF BALANCE SHEET OF SANJAY MEHTA AS ALREADY F ILED BEFORE A O SHOWING YEARWISE INVESTMENT IN HOUSE . COPY OF PASS BOOK OF BANK ACCOUNTS WHERE FROM MONEY WAS WITHDRAWN BY HIM . IN THE CASE OF SANDEEP MEHTA: COPY OF BALANCE SHEET OF SANJAY MEHTA AS ALREADY FILED BEFORE AO SHOWING YEARWISE INVESTMENT IN HOUSE . COPY OF PASS BOOK OF BANK ACCOUNTS WHERE FROM MONEY WAS WITHDRAWN BY HIM . IN THE CASE OF SEEMA MEHTA : COPY OF BALANCE SHEET OF SANJAY MEHTA AS ALREADY FILED BEFORE AO SHOWING YEARWISE INVESTMENT IN 72 72 HOUSE . COPY OF PASS BOOK OF BANK ACCOUNTS WHERE FROM MONEY WAS WITHDRAWN BY HER . IN THE CASE OF PRIYA MEHTA : COPY OF BALANCE SHEET OF SANJAY MEHTA AS ALREADY FILED BEFORE AO SHOWING YEARWISE INVESTMENT IN HOUSE . COPY OF PASS BOOK OF BANK ACCOUNTS WHERE FROM MONEY WAS WITHDRAWN BY HER . ALL WITHDRAWALS FROM PERSONAL BANK ACC OUNTS LINKED EACH ENTRY IN CASE OF : SANJAY MEHTA . SANDEEP MEHTA SEEMA MEHTA PRIYA MEHTA RECEIPTS FROM RAJ HOMES LINKED EACH ENTRYWISE. LOAN RECEIVED FROM HDFC BANK LINKED ENTRYWISE FROM THEIR B ANK STATEMENT. 12. PURCHASE OF LAND : AS REGARDS ADDITIONS OF RS. 23,OO,OOO/- MADE BY THE AO ON ACCOUNT OF PURCHASE OF LAND, SOURCE OF INVESTMENT O F ENTIRE AMOUNT 73 73 OF RS. 98,OO,OOO/- IN TO LAND WAS EXPLAINED TO AO WIDE ABOVE LETTER DATED 24.12.2010 FILED ON 27.12.2010 (ASSESS EE ORDER IS DATED 30.12.2010) ALONG WITH EVIDENCE AS UNDER : LAND COST 98,00,000/- 98,00,000/- SOURCE PAID TO COLLECTOR, BHOPAL DIRECTLY THROUGH HDFC CHEQUE CHQ. NO. 624860 30.08.2005 50,00,000/- PG. 976-97 7 CHQ. NO. 624862 30.08.2005 23,50,000/- 73,50,000/- PG. 976-977 PAID BY SANDEEP MEHTA, SBI GOVINDPURA CHQ. NO. 338840 14,50,000/- PG.603 RAJ HOMES, CHQ.NO. 155393 04.08.2005 5,00,000/- PG. 978 RAJ HOMES, CHQ.NO. 155394 04.08.2005 5,00,000/- 24,50,000/- PG. 978 TOTAL 98,00,000/- IN VIEW OF ABOVE, THE SOURCE OF INVESTMENT FOR PURCHASE OF LAND WAS DULY EXPLAINED TO AO ALONG WITH EVIDENCE AND HENCE THE ADDITION MADE BY THE AO OF RS. 23,00,000/--WAS NOT REQUIRED ON FACTS AND HENCE BE KINDLY DELETED BY YOURHONOUR. 13. AS A REGARDS INVESTMENT INTO CONSTRUCTION OF HOUSE , WE ARE 74 74 ENCLOSING HEREABOVE, ALL THE SOURCES OF RECEIPTS OF MONEY AND PAYMENT WHICH ARE THROUGH CHEQUES AND HENCE NO ADDITIONS ARE REQUIRED EVEN FOR THE COST OF CONSTRUCTION PARTICULARLY IN VIEW OF THE FACT THAT DIFFERENCE IN THE VALUATION DONE BY DVO IS LESS THAN PERMISSIBLE LIMIT OF 15%. REGARDING ADDITION FOR ANNUAL LEASE RENT: AO MADE ADDITION ON ACCOUNT OF A ALLEGED PAYMENT O F ANNUAL LEASE RENT @ RS. 4,90,000/- FOR THESE YEARS TOTALING TO RS. 14,70,000/- ON THE GROUND THAT HE WOULD HAVE HAD TO PAY ON ANNUAL RENT FOR AY 2007-08, 2008-09 AND 2009-10. FIRST OF ALL, NO SUCH DETAIL OF ANNUAL LEASE RENT WAS ASKED BY AO. FURTHER, THE ADDITION WAS WRONG AND BASED ON PRESUM PTION ONLY AS THE ASSESSEE HAS ACTUALLY NOT MADE ANY PAYMENT OF LE ASE RENT DURING THE BIOCK PERIOD. SUCH PAYMENT WAS INFACT MAD E ONLY ON 17 TH MARCH, 2011 THROUGH CHEQUE. ENCLOSED WITH APPLICATION U/R 46A. COMPLETE BILLS, VOUCHERS PRODUCED BEFORE AO : THE ASSESSEE PRODUCED COMPLETE BILLS, VOUCHERS AND ALL SUPPORTING FOR CONSTRUCTION OF SAID HOUSE IN ORIGINAL BEFORE AO . TH E BAGFUL OF ORIGINAL BILLS & VOUCHER WERE LIFTED FROM THE OFFICE O F THE LD. AO ON 14.03.2011 . 75 75 55. IT WAS ARGUED BY THE LD. AUTHORIZED REPRESENTAT IVE THAT THE ASSESSEE HAS FURNISHED COMPLETE DETAILS OF EXPE NDITURE INCURRED ON ACQUISITION OF PLOT AS WELL AS CONSTRUC TION MADE THEREON. BILLS OF ALL MAJOR EXPENDITURE WERE SUBMIT TED BEFORE THE ASSESSING OFFICER AND ALL THE MAJOR PAYMENTS WE RE MADE BY ACCOUNT PAYEE CHEQUES WHICH WERE REFLECTED IN TH E ASSESSEES BOOKS OF ACCOUNT AND OTHER PERSONS FROM WHOM THE AMOUNT WAS TAKEN. THE COST OF LAND WAS RS. 98 L AKHS FOR WHICH PAYMENT WAS MADE TO COLLECTOR VIDE CHEQUE NO. 624860 DATED 30.8.2005 RS. 50 LAKHS, VIDE CHEQUE NO . 624862 DATED 30.8.2005 RS. 23.50 LAKHS, TOTAL OF WH ICH WORKS OUT TO RS. 73.50 LAKHS. A SUM OF S. 40.50 LAK HS. A SUM OF RS. 40.50 LAKHS WAS GIVEN BY SANDEEP MEHTA O UT OF HIS SBI GOVINDPURA BRANCH VIDE CHEQUE NO. 338840. FURTHER TWO CHEQUES WERE ISSUED BY RAJ HOMES DATED 4.8.2005, AMOUNTING TO RS. 5 LAKHS EACH. COPY OF BA NK ACCOUNT AND ACCOUNT OF THESE PERSONS WERE ALSO ENCL OSED AND PLACED IN THE PAPER BOOK. 56. OUR ATTENTION WAS ALSO INVITED TO THE DETAILS O F COST OF PLOT, COST OF CONSTRUCTION, LOAN FROM HDFC, WHICH W AS TAKEN 76 76 IN FOUR NAMES, FOR PURCHASING/CONSTRUCTION OF THIS HOUSE. THE RESPECTIVE INVESTMENTS WERE SHOWN IN THE BALANC E SHEET OF 4 PERSONS VIZ. SANJAY MEHTA, SANDEEP MEHTA, SIMA MEHTA, PRIYA MEHTA, TOTAL AMOUNTS SHOWN IN THE BALA NCE SHEET WORKED OUT AT RS. 2,69,69,048/-. A SUM OF RS. 10 LAKHS WAS PAID BY RAJ HOMES DIRECTLY. THUS, THE TOT AL INVESTMENT OF RS. 2,79,69,049/- WAS SHOWN. AS PER THE DETAILS FILED BEFORE THE LOWER AUTHORITIES, THE ASS ESSEE HAS INCURRED THE EXPENDITURE, PRIOR TO LOAN DISBURSEMEN T BY HDFC FROM RAJ HOMES PRIVATE LIMITED, PERSONAL BANK ACCOUNTS OF FAMILY MEMBERS. THE THRUST OF LD. AUTHO RIZED REPRESENTATIVES ARGUMENT WAS THAT ENTIRE DETAIL WA S FURNISHED BEFORE THE LOWER AUTHORITIES, WHICH COULD NOT BE PROPERLY APPRECIATED BEFORE ARRIVING AT A CONCLUSIO N. ON THE OTHER HAND, THE LD. SENIOR DR RELIED ON THE ORDERS OF LOWER AUTHORITIES. 57. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND FO UND FROM RECORD VARIOUS DETAILS FILED BY THE ASSESSEE B EFORE THE CIT(A). WE FOUND THAT THE ASSESSEE HAS FILED COMPLE TE DETAILS OF EXPENDITURE INCURRED FOR ACQUISITION OF LAND AS WELL AS FOR CONSTRUCTION OF BUILDING. THE SOURCE OF FUND WAS OU T OF LOAN 77 77 FROM HDFC FROM RAJ HOMES. THE INVESTMENT WAS DEBITE D IN THE BOOKS OF ACCOUNT OF FOUR PERSONS, NAMELY, SANJA Y MEHTA, ASSESSEE, AMOUNTING TO RS. 69,92,262/-, SAND EEP MEHTA, BROTHER RS. 69,92,263/-, SIMA MEHTA, WIFE OF ASSESSEE WAS RS. 69,92,262/-, PRIYA MEHTA RS. 69,92,262/-. THUS, THE TOTAL INVESTMENT WORKS OUT T O RS. 2,79,69,049/-. WE FOUND THAT ALL THE PAYMENTS SO RE CEIVED WERE THROUGH CHEQUES, WHICH WERE EITHER IN THE FORM OF LOAN OR CONTRIBUTION BY OTHER FAMILY MEMBERS OR PAYMENT FROM RAJ HOMES PRIVATE LIMITED. THE ASSESSEE HAS FURNISH ED BANK ACCOUNT OF ALL THESE FAMILY MEMBERS AND ALSO B ANK ACCOUNT OF RAJ HOMES PRIVATE LIMITED BEFORE THE LOW ER AUTHORITIES TO SUBSTANTIATE THE SOURCE OF FUND. NOT ONLY THE AMOUNT WAS RECEIVED THROUGH CHEQUE, BUT THE EXPENDI TURE ON ACCOUNT OF HOUSE WAS MAINLY THROUGH CHEQUES. EVE N A CASH FLOW STATEMENT WAS FILED BEFORE THE ASSESSING OFFICER IN SUMMARY FORM TO EXPLAIN THE SOURCE OF INVESTMENT, W HEREIN SOME INADVERTENT MISTAKE WAS POINTED OUT BY THE ASS ESSING OFFICER. IMMEDIATELY THEREAFTER, THE ASSESSEE HAS F ILED A LETTER TO THE ASSESSING OFFICER ON 27.12.2011 ALONG WITH ASSESSMENT ORDER DATED 30.12.2011 AND PRAYED FOR GI VING 78 78 ONE DAY TIME TO FURNISH THE CORRECT DETAILS OF INVE STMENT. HOWEVER, AS THE ASSESSMENT WAS TIME BARRED, THE ASS ESSING OFFICER DID NOT GIVE THE TIME AND COMPLETED THE ASS ESSMENT. IT APPEARS THAT DUE TO PAUCITY OF TIME, THE DETAILS FURNISHED REGARDING SOURCE OF FUND AND THE INVESTMENT MADE IN THE HOUSE PROPERTY COULD NOT BE PROPERLY APPRECIATED BY THE LOWER AUTHORITIES. THERE ALSO APPEARS TO BE SOME LA CUNA ON THE PART OF THE ASSESSEE TO CLARIFY THE MISTAKES IN CASH FLOW STATEMENT. KEEPING IN VIEW THE SUBSTANTIAL INTEREST OF JUSTICE, WE RESTORE THIS ISSUE IN ALL THE YEARS UND ER CONSIDERATION TO THE FILE OF ASSESSING OFFICER FOR DECIDING AFRESH AFTER CONSIDERING THE DETAILS SO FILED BEFOR E THE LOWER AUTHORITIES AS DISCUSSED HEREINABOVE. THE ASSESSEE IS AT LIBERTY TO FILE EVIDENCE TO SUBSTANTIATE THE COST I NCURRED ON THE CONSTRUCTION AND THE RESPECTIVE MODE OF PAYMENT ALONGWITH SOURCE OF FUND. WE DIRECT ACCORDINGLY. 58. THE ASSESSING OFFICER HAS ALSO MADE ADDITION ON ACCOUNT OF CASH DEPOSIT MADE IN BANK ACCOUNT IN VAR IOUS YEARS. BY THE IMPUGNED ORDER, THE LD. CIT(A) DELETE D THE ADDITION IN ASSESSMENT YEAR 2003-04, 2005-06, 2006- 07 AND 2007-08. HOWEVER, PART OF ADDITIONS WERE RETAIN ED IN 79 79 ASSESSMENT YEAR 2004-05 AMOUNTING TO RS. 2,01,400/- IN ASSESSMENT YEAR 2008-09 RS. 9,10,673/-. PRECISE OBSERVATION OF THE CIT(A) WAS AS UNDER :- 7.4 I HAVE EXAMINED THE MATTER. THE ADDITIONAL EVIDENCES SUBMITTED BEFORE ME ARE NOT CONSIDERED FO R DECIDING THE ISSUE DUE TO THE REASON GIVEN ABOVE. THE FACTS OF THE CASH DEPOSIT MADE IN VARIOUS BANK ACCOUNTS WERE DISCOVERED DURING THE COURSE OF SEARC H HENCE THE APPELLANTS PLEA THAT THE IMPUGNED ADDITIO N IS NOT BASED ON ANY MATERIAL FOUND DURING THE COURSE OF SEARCH IS NOT VALID. DURING THE HEARING I HAVE EXAMIN ED THE SOURCE OF ALL DEPOSITS BOTH ABOVE RS.50000/- AND BELOW RS.50000/- .BEFORE THE A.O. THE APPELLANT HAS CLAIMED THAT THE CASH DEPOSITS MADE IN THESE BANK ACCOUNTS WERE OUT OF AGRICULTURE INCOME AND CONTRACT RECEIPT. IN THIS APPEAL ORDER THE ADDITIONS ON ACCOUN T OF AGRICULTURE INCOME AND CONTRACT RECEIPT HAVE BEEN CONFIRMED. IT IS NOT FOUND THAT THE CASH AVAILABLE O UT OF UNDISCLOSED INCOME WAS INVESTED ELSEWHERE. IN THE APPELLANTS CASE THE RATIO LAID IN ACIT VS. KULWANT SINGH AND OTHERS IT(SS) 57 TO 63/IND/2008 (INDORE ITAT) IS DIRECTLY APPLICABLE. THE UNACCOUNTED INCOME CLAIMED AS AGRICULTURE INCOME AND CONTRACT RECEIPT HAVE BEEN BROUGHT TO TAX HENCE TAXING THE CASH DEPOSITED IN THE BANK TO THE EXTENT OF AVAILABILITY OF CASH ON AC COUNT OF ADDITIONS CONFIRMED WILL AMOUNT TO DOUBLE ADDITION. IN VIEW OF THE ABOVE, IT IS HELD THAT THE ADDITION MADE 80 80 ON ACCOUNT OF CASH DEPOSITS MADE IN BANK ACCOUNT IS TO BE REDUCED BY THE ADDITIONS CONFIRMED ON ACCOUNT OF CLAIM OF AGRICULTURE INCOME AND CONTRACT RECEIPT AND THAT THE SOURCE OF BALANCE AMOUNT DEPOSITED IN BANK IS NOT EXPLAINED. THE AMOUNT OF ADDITION FOR VARIOUS Y EARS IS REDUCED AS UNDER: ASSESSMENT YEAR AMOUNT OF ADDITION CONFIRMED ON ACCOUNT OF AGRICULTURE INCOME AND CONTRACT RECEIPT ADDITION ON ACCOUNT OF CASH DEPOSIT AMOUNT OF CONFIRMED ADDITION ON ACCOUNT OF CASH DEPOSIT IN BANK A.Y.2003-04 586500 437000 NIL A.Y.2004-05 608100 + 185000 994500 201400 A.Y.2005-06 610443 345000 NIL A.Y.2006-07 1031887 810000 NIL A.Y.2007-08 996780 68000 NIL A.Y.2008-09 93527 1004200 910673 IN VIEW OF THE ABOVE THE AMOUNT OF ADDITIONS ON ACC OUNT OF CASH DEPOSIT FOR A.Y.S 2003-04, 2005-06 TO 2007-08 ARE D ELETED AND ADDITION FOR A. Y. 2004-05 IS REDUCED TO RS.201400/ - AND THE ADDITION FOR A.Y. 2008-09 IS REDUCED TO RS.910673/- . 59. AGAINST THE ABOVE ORDER OF CIT(A), BOTH ASSESSE E AND REVENUE ARE IN APPEAL BEFORE US. 60. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HA VE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AN D FOUND FROM RECORD THAT BEFORE THE ASSESSING OFFICER, THE ASSESSEE HAS FILED CASH FLOW STATEMENT INDICATING SOURCE OF FUND ON THE RESPECTIVE DATE OF DEPOSIT IN THE BANK ACCOUNT. AS PER 81 81 THE CASH FLOW STATEMENT, THE ASSESSEE WAS HAVING SU FFICIENT CASH BALANCE AVAILABLE WITH HIM FOR DEPOSIT IN THE BANK ACCOUNT. ON EACH DAY OF DEPOSIT. HOWEVER, THE CIT(A ) WHILE CONFIRMING PART OF ADDITION IN ASSESSMENT YEAR 2004 -05 AND 2008-09 DID NOT TAKE INTO ACCOUNT THE FUNDS AVAILAB LE WITH ASSESSEE OUT OF WITHDRAWALS MADE FROM OTHER BANK AC COUNT. ACCORDINGLY, NO ADDITIONS WERE WARRANTED IN ANY OF THE YEARS UNDER CONSIDERATION. HOWEVER, WHILE CONSIDERING AVAILABILITY OF FUND, TH E CIT(A) HAS ONLY CONSIDERED INCOME FROM AGRICULTURE AND CON TRACT RECEIPTS. THE LD. CIT(A) OBSERVED THAT IN THE ASSES SMENT YEAR 2004-05, TOTAL CASH AVAILABLE WAS RS. 7,93,100/- AG AINST WHICH ASSESSEE HAS DEPOSITED A SUM OF RS. 9,94,500/ -. ACCORDINGLY, THE ADDITION OF RS. 2,01,400/- ( RS. 9 ,94,500/- (-) RS. 7,93,100/-) WAS MADE. SIMILARLY, IN THE ASS ESSMENT YEAR 2008-09, THE LD. CIT(A) FOUND THAT CASH DEPOSI T IN THE BANK WAS MORE BY RS. 9,10,673/- AS COMPARED TO THE CASH AVAILABLE IN THE FORM OF AGRICULTURE INCOME AND CON TRACT RECEIPTS. EVEN IF WE SEE INDEPENDENTLY, THE CHART P RINTED AT PAGE 56 OF CIT(A)S ORDER, THE TOTAL AVAILABILITY O F CASH OUT OF AGRICULTURAL INCOME AND CONTRACT RECEIPT RIGHT FROM 82 82 ASSESSMENT YEAR 2003-04 TO 2008-09 WAS RS. 14,12,27 3/- AGAINST WHICH THE ASSESSEE HAS DEPOSITED CASH OF RS . 36,58,700/-. THUS, THE AVAILABLE CASH EVEN WITHOUT TAKING INTO ACCOUNT THE WITHDRAWALS MADE BY THE ASSESSEE F ROM OTHER BANK ACCOUNT, WHICH HE HAS DULY INCORPORATED IN HIS CASH FLOW STATEMENT, WAS MORE THAN THE CASH DEPOSIT ED IN THE BANK ACCOUNT. FOLLOWING IS THE CUMULATIVE CHART OF CASH, WHICH CLEARLY INDICATE THAT CASH AVAILABLE AT THE BEGINNING OF EACH YEAR WAS MUCH MORE THAN THE CASH DEPOSITED IN THE RESPECTIVE YEARS. ACCORDINGLY, NO ADDITION IS WARRANTED IN ANY OF THE ASSESSMENT YEARS UNDER CONSIDERATION. REVISED MODIFIED CHART IS AS UNDER :- ASSESSMENT YEAR AMOUNT OF ADDITION CONFIRMED ON ACCOUNT OF AGRICULTURE INCOME AND CONTRACT RECEIPT CUMULATIVE BALANCE OF CASH DEPOSITED ADDITION ON ACCOUNT OF CASH DEPOSIT CUMULATIVE BALANCE OF CASH AVAILABLE A.Y.2003-04 5,86,500 5,86,500 437000 4,37,000 A.Y.2004-05 6,08,100 + 1,85,000 13,79,606 994500 14,31,500 A.Y.2005-06 6,10,443 19,90,043 345000 17,76,500 A.Y.2006-07 10,31,887 30,21,930 810000 25,86,500 A.Y.2007-08 9,96,780 40,18,710 68000 26,54,500 A.Y.2008-09 93,527 41,42,237 1004200 36,58,700 83 83 61. IN VIEW OF ABOVE, NO ADDITION IS WARRANTED IN R ESPECT OF DEPOSIT OF CASH IN ANY YEAR UNDER CONSIDERATION. IN THE RESULT, GROUND TAKEN BY ASSESSEE IS ALLOWED, WHEREA S APPEAL OF REVENUE IS DISMISSED. 62. WITH REGARD TO CONTRACT RECEIPT OF RS. 85,000/- IN THE ASSESSMENT YEAR 2004-05, THE ASSESSEE HAS OFFERED 8 % PROFIT ON PRESUMATIVE SCHEME. HOWEVER, THE ASSESSIN G OFFICER CONFIRMED ENTIRE ADDITION OF CONTRACT RECEI PT ON THE PLEA THAT THE ASSESSEE COULD NOT SUBSTANTIATE THE N ATURE OF INCOME. BY THE IMPUGNED ORDER, THE CIT(A) CONFIRMED THE ADDITION. IN VIEW OF THE REASONING DISCUSSED IN THE CASE OF OTHER GROUP OF ASSESSEE SHRI SANDEEP MEHTA, WE CONF IRM THE ACTION OF CIT(A) FOR TREATING THE ENTIRE CONTRACT R ECEIPTS AS ASSESSEES INCOME. 63. THE ASSESSING OFFICER HAS ALSO MADE ADDITION IN RESPECT OF FOREIGN TRAVEL EXPENDITURE INCURRED BY T HE ASSESSEE BUT NOT SHOWN IN THE BOOKS OF ACCOUNT IN T HE ASSESSMENT YEARS 2004-05 & 2007-08 TO 2009-10. THE FACTS OF THE CASE IN BRIEF ARE THAT THE APPELLANT H AS MADE VARIOUS VISITS DURING THE PREVIOUS YEAR RELEVANT TO A.Y.S IN DISPUTE. THE .A.O. ESTIMATED EXPENDITURE FOR THESE VISITS AND 84 84 ASKED THE APPELLANT TO SHOW CAUSE AS TO WHY ADDITIO N FOR EXPENDITURE TOTALING TO RS. 14,65,000/- SHOULD NOT BE ADDED. THE APPELLANT DID NOT SUBMIT REPLY TO THE SH OW CAUSE, HENCE THE A.O. MADE THE FOLLOWING ADDITION F OR UNACCOUNTED EXPENDITURE: A.Y. 2004-05 60000/- A.Y. 2007-08 600000/- A.Y. 2008-09 615000/- A.Y.2009-10 190000/- THE ASSESSING OFFICER HAS OBSERVED AND MENTIONED IN HIS ORDER REGARDING VARIOUS DETAILS IN DIFFERENT ASSESS MENT YEARS REGARDING FOREIGN VISITS OF MR. SANJAY MEHTA. THE ASSESSEE WAS ASKED THE DETAILS OF EXPENSES IN SUCH TRAVEL AND WAS ASKED TO PRODUCE BILLS AND VOUCHERS OF EXPE NSES INCURRED IN THE TRAVEL. HE WAS ALSO ASKED TO EXPLAI N THE SOURCE OF EXPENDITURE IN THE ABOVE MENTIONED JOURNE YS ABROAD. THE ASSESSEE CLAIMED THAT THE TRAVEL DONE W ITH HIS FAMILY WAS DONE BY SELF WHILE THE REST OF THE TRIPS WERE SPONSORED BY VARIOUS ORGANIZATIONS LIKE ZEE TV, ESP N ETC. THE ASSESSING OFFICER ASKED AS TO WHY SUCH TRIPS HA VE BEEN SPONSORED BY SUCH ORGANIZATIONS AS TRIPS TO FOREIGN COUNTRIES ARE USUALLY EXPENSIVE. REGARDING THE TRAVELS DONE B Y SELF 85 85 AND FAMILY THE ASSESSEE GAVE CHART OF EXPENDITURE. HOWEVER, HE DID NOT PROVIDE ANY BILL OR VOUCHERS AB OUT THE TRAVEL AGENCY FROM WHOM FLIGHT TICKETS HAVE BEEN B OUGHT. HE DID NOT PROVIDE ANY ORIGINAL HOTEL RECEIPTS OF T HE PLACES IN WHICH HE HAD STAYED AND DID NOT PRODUCE ANY DETAILS OF EXPENDITURE. THE ASSESSING OFFICER WAS FORCED TO DO AN APPROXIMATION OF THE EXPENDITURE ON THE SAID TRIP A ND ARRIVED AT AN EXPENDITURE FIGURE OF RS. 14,65,000/- . ASSUMING TO BE HIS EXPENDITURE ON VARIOUS FOREIGN T RIPS AND CONSIDERING THAT NO REPLY EXPLAINING THE SOURCE OF EXPENDITURE HAS BEEN GIVEN WHY SHOULD IT NOT BE TRE ATED AS UNEXPLAINED. HOWEVER, THE ASSESSEE DID NOT PROVIDE ANY REPLY TI FF THE END OF ASSESSMENT PROCEEDINGS. ACCORDINGLY FOLLOWING AM OUNTS ARE BEING ADDED TO THE INCOME OF THE ASSESSEE FOR V ARIOUS AY AS PER THE YEAR IN WHICH SUCH AMOUNTS WERE SPENT : A.Y.2004-05: RS.60,000 A.Y.2007-08:RS.6,00,000 A.Y.2008-09:RS.6,15,000 A.Y.2009-10:RS.1.90,000 64. BY THE IMPUGNED ORDER, THE LD. CIT(A) CONFIR MED THE ADDITION. 86 86 65. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HA VE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AN D FOUND FROM RECORD THAT INSPITE OF GIVING OPPORTUNITIES, T HE ASSESSEE COULD NOT SUBSTANTIATE SOURCE OF EXPENDITURE INCURR ED ON FOREIGN TRAVEL IN VARIOUS YEAR UNDER CONSIDERATION. AFTER MAKING DETAILED INQUIRY AND RECORDING DETAILED FIND INGS, THE ASSESSING OFFICER HAS MADE THE ADDITION WHICH WAS F URTHER FORTIFIED BY THE LD.CIT(A). EVEN BEFORE US, NOTHING COULD BE BROUGHT ON RECORD BY THE ASSESSEE TO PERSUADE US TO DEVIATE FROM THE FINDINGS RECORDED BY THE LOWER AUTHORITIES . WE, THEREFORE, CONFIRM THE ACTION OF CIT(A) FOR THE ADD ITIONS MADE ON ACCOUNT OF FOREIGN TRAVEL IN THE ASSESSMENT YEAR 2004-05 AT RS.60,000/-, 2007-08 AT RS.6,00,000/-, 2 008- 09 AT RS. 6,15,000/- AND 2009-10 AT RS.1,90,000/-. PRIYA MEHTA : I.T(SS).A.NOS. 167 TO 172/IND/2012 : 66. THESE ARE THE APPEALS FILED BY THE ASSESSEE AGA INST THE ORDER OF CIT(A) DATED 2.3.2012 FOR THE ASSESSMENT YEARS 2003-04 TO 2009-10, IN THE MATTER OF ORDER PASSED U /S 153A READ WITH SECTION 143(3) OF THE INCOME-TAX ACT, 196 1. 67. FIRST COMMON ISSUE RELATES TO AGRICULTURAL INCO ME OFFERED BY THE ASSESSEE WHICH WAS TREATED BY THE AS SESSING 87 87 OFFICER AS INCOME FROM OTHER SOURCES. AFTER GIVING THE SAME REASONING AS GIVEN IN OTHER ASSESSEES AS DISCUSSED HEREINABOVE. BY THE IMPUGNED ORDER, THE CIT(A) CONF IRMED THE ADDITION GIVING THE SAME REASONING AS IN THE CA SE OF OTHER ASSESSEES. IT WAS ARGUED BY THE LD. AUTHORIZE D REPRESENTATIVE THAT TO SUBSTANTIATE THE AGRICULTUR AL INCOME, ADDITIONAL DOCUMENTS WERE FILED BEFORE THE CIT(A) I N THE FORM OF ORIGINAL LEASE AGREEMENTS, ORIGINAL AFFIDAV ITS OF FARMERS, NOTARIZED COPY OF LEASE AGREEMENT ORIGINAL KHASRA- KHATAUNI AND FORM P-II, ORIGINAL RECEIPTS OF PAYMEN T OF LEASE RENT. ALL THESE DOCUMENTS ARE PLACED AT PAGES 94 TO 294 OF THE PAPER BOOK. IT WAS FURTHER ARGUED BY THE LD. AU THORIZED REPRESENTATIVE THAT AGRICULTURAL INCOME OFFERED IN ASSESSMENT YEARS 2003-04 & 2004-05, MUCH PRIOR TO T HE DATE OF SEARCH WERE ACCEPTED BY THE DEPARTMENT UNDE R SCRUTINY ASSESSMENT U/S 143(3), ACCORDINGLY, DECLIN E FOR ASSESSEES CLAIM FOR ENTIRE AGRICULTURAL INCOME WAS NOT JUSTIFIED. 68. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HA VE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AN D FOUND FROM RECORD THAT BY REPEATING THE SAME REASONING AS GIVEN 88 88 IN OTHER ASSESSEES, THE ASSESSING OFFICER HAS MADE THE ADDITION AND CIT(A) HAS CONFIRMED THE SAME. WE HAVE ALREADY DISCUSSED IN DETAIL HEREINABOVE IN CASE OF HITESH MEHTA, WHERE THE ISSUE HAS BEEN RESTORED BACK TO TH E FILE OF ASSESSING OFFICER. FOLLOWING THE SAME REASONING AS GIVEN IN THE CASE OF AFORESAID ASSESSEES, THIS ISSUE IS REST ORED BACK TO THE FILE OF ASSESSING OFFICER IN ALL THE YEARS U NDER CONSIDERATION. 69. THE ASSESSING OFFICER HAS ALSO MADE ADDITION ON ACCOUNT OF CASH DEPOSITED IN THE BANK ACCOUNT. BY T HE IMPUGNED ORDER, THE CIT(A) DELETED THE ADDITION EX CEPT THE ASSESSMENT YEARS 2004-05 AND 2008-09 BY OBSERVING T HAT AGRICULTURAL INCOME AND CONTRACT RECEIPT WAS AVAIL ABLE TO THE ASSESSEE FOR DEPOSIT IN THE BANK ACCOUNT. PRECI SE OBSERVATION OF CIT(A) WAS AS UNDER :- 7.4 I HAVE EXAMINED THE MATTER. THE ADDITIONAL EVIDENCES SUBMITTED BEFORE ME NOT CONSIDERED FOR DECIDING THE ISSUE DUE TO THE REASON GIVEN ABOVE. THE FACTS OR THE CASH DEPOSIT MADE IN VARIOUS BANK ACCOUNTS WERE DEPOSIT DURING THE COURSE OR SEARCH HENCE THE APPELLANTS PLED THAT THE IMPUGNED 89 89 ADDITION IS NOT BASED ON ANY MATERIAL FOUND DURING THE COURSE OF SEARCH IS NOT VALID. DURING THE HEARI NG I HAVE EXAMINED THE SOURCE OF ALL DEPOSITS BOTH ABOVE RS. 50000/- AND BELOW RS. 50000/-. BEFORE THE ASSESSING OFFICER THE APPELLANT HAS CLAIMED THAT THE CASH DEPOSITS MADE IN THESE BANK ACCOUNTS WERE OUT OF AGRICULTURE INCOME AND CONTRACT RECEIPT. IN THIS APPEAL ORDER THE ADDITIONS ON ACCOUNT OR AGRICULTURE INCOME AND CONTRACT RECEIPT HAVE BEEN CONFIRMED, IN THE APPELLANTS CASE THE RATIO LAID IN ACIT VS. KULWANT SINGH AND OTHERS IT(SS) 57 TO 63/IND/2008 (INDORE ITAT) IS DIRECTLY APPLICABLE. TH E UNACCOUNTED INCOME CLAIMED AS AGRICULTURE INCOME AND CONTRACT RECEIPT HAVE BEEN BROUGHT TO TAX HENCE TAXING THE CASH DEPOSITED IN THE BANK TO THE EXTENT OR ADDITIONS CONFIRMED WILL AMOUNT TO DOUBLE ADDITION. IN VIEW OF THE ABOVE, IT IS HELD THAT THE ADDITION MADE ON ACCOUNT OF CASH DEPOSITS MADE IN BANK ACCOUNT IS TO BE REDUCED BY THE ADDITIONS CONFIRMED ON ACCOUNT OR CLAIM OR AGRICULTURE INCOME AND CONTRACT RECEIPT. THE AMOUNT OR ADDITION FOR VARIOUS 90 90 YEARS IS REDUCED AS UNDER: A.Y. AMOUNT OF ADDITION CONFIRMED ON ACCOUNT OF AGRICULTURAL INCOME AND CONTRACT RECEIPT ADDITION ON ACCOUNT OF CASH DEPOSIT AMOUNT OF CONFIRMED ADDITION ON ACCOUNT OF CASH DEPOSIT IN BANK 2003-04 389000 240000 NIL 2004-05 499425 535000 35575 2005-06 511530 441000 NIL 2006-07 815639 535000 NIL 2007-08 1075397 631100 NIL 2008-09 38720 1300000 1261280 IN RESPECT OF ADDITION OF RS.1300000/- FOR A.Y.2009-10, IT IS FOUND THAT IN THE ASSESSMENT ORDER, THE A.O. HAS NOT GIVEN ANY DESCRIPTION OF CASH DEPOSITS IN THE A.Y. 2008-09 BUT IN THE COMPUTATION HE HAS MADE ADDITION OF RS. 1300000/- ON ACCOUNT OF CASH DEPOSIT IN BANK. IT SHOWS THAT THE ADDITION OF RS.1300000/- IN A.Y. 2009-10 IS INADVERTENTLY MADE IN THE COMPUTATION. IN VIEW OF THESE FACTS THE ADDITION OF RS.1300000/- IN A.Y. 2009-10 IS DELETED. 5.5 IN THE RESULT THE ADDITIONS FOR A.Y. 2003-04, 2004-05 TO 2007-08 ARE DELETED AND THE ADDITION FOR A.Y. 2004-05 IS REDUCED FROM RS.535000/- TO 91 91 RS.35575/- AND ADDITION FOR A.Y. 2008-09 IS REDUCED FROM 1300000/- TO RS.1261280/-. 70. THE REVENUE IS NOT IN APPEAL FOR DELETION OF A DDITION, HOWEVER, THE ASSESSEE IS IN APPEAL FOR ASSESSMENT Y EARS 2004-05 TO 2008-09 WHEREIN ADDITION HAS BEEN SUSTAI NED BY THE LD.CIT(A). 71. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AN D HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AN D FOUND FROM RECORD THAT BEFORE THE LOWER AUTHORITIES, THE ASSESSEE HAVE FILED CASH FLOW STATEMENT GIVING AVAILABILITY OF CASH OUT OF AGRICULTURAL INCOME, CONTRACT RECEIPTS AND WITHD RAWALS FROM OTHER BNAK. HOWEVER, WHILE SUSTAINING ADDITION , THE CIT(A) HAS ONLY CONSIDERED THE CASH AVAILABLE THROU GH AGRICULTURAL INCOME AND CONTRACT RECEIPTS. WE FOUND THAT AS PER CASH FLOW STATEMENT, THE ASSESSEE WAS HAVING SU FFICIENT CASH BALANCE ON EACH DAY OF DEPOSIT. EVEN TOTAL OF INCOME DECLARED BY ASSESSEE DURING ASSESSMENT YEARS 2003-0 4 TO 2008-09 AS PER CHART GIVEN BY CIT(A) AT PAGE NO. 48 IS MORE THAN TOTAL CASH DEPOSITED IN BANK ACCOUNT DURING TH E ASSESSMENT YEARS 2003-04 TO 2008-09. ACCORDINGLY, N O 92 92 ADDITION IS WARRANTED ON ACCOUNT OF CASH DEPOSITED IN BANK ACCOUNT. 72. IN THE RESULT, THIS GROUND OF ASSESSEE IN ASSES SMENT YEARS 2004-05 AND 2008-09 IS ALLOWED. 73. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED IN PART. 74. A COMMON GROUND HAS BEEN TAKEN REGARDING CHARGI NG OF INTEREST U/S 234B IN CASE OF ALL THE AFORESAID A SSESSEES IN ALL THE YEARS UNDER CONSIDERATION. 75. PLEA OF LD. AUTHORIZED REPRESENTATIVE WAS THAT IN VIEW OF THE DECISION OF I.T.A.T. MUMBAI BENCH IN THE CAS E OF DATAMATICS LIMITED VS. ACIT, (2008) 299 ITR 286 (A. T.) (MUM. I.T.A.T.), WHERE THERE WAS NO DEFAULT ON THE PART OF THE ASSESSEE IN PAYMENT OF ADVANCE TAX, NO INTEREST WAS LIABLE U/S 234B IN REGULAR ASSESSMENT. FOLLOWING WA S THE PRECISE OBSERVATION OF THE BENCH :- THE CHARGING OF INTEREST U/S 234B IS MANDATORY. MANDATORY DOES NOT MEAN THAT IT IS MANDATORY UNDER ALL CIRCUMSTANCES. IT IS MANDATORY WHEN THE CONDITIONS ARE FULFILLED. THE CONDITION IS THAT THE ASSESSEE SHOULD HAVE DEFAULTED. A READING OF 93 93 SECTION 234B(3) MAKES IT CLEAR THAT WHERE, AS A RESULT OF AN ORDER OF ORDER OF REASSESSMENT OR RE- COMPUTATION U/S 147 OR SECTION 153A, THE AMOUNT ON WHICH INTEREST WAS PAYABLE UNDER SUB SECTION (1) IS INCREASED, THE ASSESSEE SHALL BE LIABLE TO P AY SIMPLE INTEREST AT THE RATE OF ONE PERCENT. THE SECTION FURTHER MAKES IT CLEAR THAT FIRST OF ALL TH ERE SHOULD BE A DEFAULT ON THE PART OF THE ASSESSEE IN THE REGULAR ASSESSMENT AND THE ASSESSEE SHOULD HAVE BEEN HELD LIABLE TO PAY INTEREST U/S 234B.IN THAT CASE, IF THERE WAS REASSESSMENT OR RE- COMPUTATION U/S 147 OR 153A, THE LIABILITY OF THE ASSESSEE IS INCREASED AND NOT OTHERWISE. IN THE INSTANT CASE, THERE WAS NO DEFAULT ON THE PART OF THE ASSESSEE, IN PAYING THE ADVANCE TAX. FOR THE FIRST TIME, THE DISPUTE AROSE CONSEQUENT TO THE REASSESSMENT DONE U/S 143(3) READ WITH SECTION 147, INTEREST COULD NOT BE CHARGED U/S 234B. 76. IT WAS FURTHER ARGUED THAT IN VIEW OF THE DECIS ION OF KERALA HIGH COURT IN THE CASE OF B.LAKSHMIKANTHAN , (2011) 198 TAXMAN 485, INTEREST SHOULD BE CHARGED ON INCRE MENTAL 94 94 INCOME ONLY I.E., ADDITIONAL INCOME ASSESSED U/S 15 3A AS COMPARED TO THE INCOME DETERMINED U/S 143(1)/143(3) . 77. WE HAVE CONSIDERED THE RIVAL CONTENTIONS. IN VI EW OF DECISION OF KERALA HIGH COURT IN THE CASE OF LAKSHMIKANTHAN (SUPRA), WE DIRECT THE ASSESSING OFF ICER TO RECOMPUTE THE INTEREST U/S 234B WHICH PROVIDES THAT WHERE ORIGINAL ASSESSMENT COMPLETED U/S 143 IS REVISED EI THER U/S 147 OR U/S 153A, THEN INTEREST FOR NON-PAYMENT OR S HORT PAYMENT OF ADVANCE TAX IS PAYABLE ONLY FOR THE PERI OD MENTIONED IN SECTION 234B(3) WHICH PROVIDES FOR INT EREST FROM THE DATE OF COMPLETION OF REGULAR ASSESSMENT U /S 143(1) TILL THE DATE OF COMPLETION OF REASSESSMENT. THE ASSESSING OFFICER IS DIRECTED ACCORDINGLY. 78. A COMMON ISSUE HAS BEEN TAKEN IN THE CASE OF AL L THE ASSESSEES TO ALLEGE THAT ASSESSMENTS FRAMED IN INDI VIDUAL CAPACITY WAS NOT JUSTIFIED. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND FOUND FROM RECORD THAT A WARRANT WA S ISSUED AUTHORIZING SEARCH IN CASE OF ALL THE INDIVI DUALS. NEITHER ANY AOP WAS EXISTING NOR ANY WARRANT WAS IS SUED IN THE NAME OF AOP, THEREFORE, NO SEARCH WAS POSSIBLE IN THE CASE OF AOP, WHICH DID NOT EXIST. SINCE THE WARRANT HAVE 95 95 BEEN ISSUED IN THE INDIVIDUAL CASES, THE ASSESSMENT S HAVE BEEN PROPERLY DONE IN THE CAPACITY OF INDIVIDUALS. ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE OR DER OF ASSESSING OFFICER FOR MAKING ASSESSMENTS IN INDIVID UAL CAPACITY RATHER THAN IN CAPACITY OF AOP. IN THE RES ULT, GROUND TAKEN BY ALL THE ASSESSEES IN ALL THE YEARS UNDER CONSIDERATION ARE DISMISSED. 79. IN THE RESULT, THE APPEALS OF ASSESSEE ARE ALLO WED IN PART IN TERMS INDICATED HEREINABOVE. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT O N 22 ND MARCH, 2013. SD/- SD/- (JOGINDER SINGH) (R. C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 22 ND MARCH, 2013. CPU* 183213