Pt. Laxmi Narayan Gaur, JODHPUR V. ACIT, UDAIPUR

ITSSA 16/JODH/2008

• Counselvise Citation: [2012] 121 COUNSELVISE.COM (IT) 8261 (ITAT-JODHPUR)
• Duration Of Justice: 3 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 27-07-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 23-07-2012
• Assessment Year: misc
• Appeal Filed On: 24-12-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: G R KOKANI
• Keywords: Gift; Income from undisclosed sources; Loose papers; Block assessment; Notional interest; Onus to prove
• Section: 133A; 15

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH JODHPUR. ( BEFORE SHRI R.K. GUPTA AND SHRI N.K. SAINI ) ITSSA NO. 16/JU/2008 BLOCK PERIOD: 1997-98 TO 2002-03 & UPTO 02-05-2002 PAN : AAYPG 6516 H PT. LAXMI NARAYAN GAUR VS. THE ACIT PROP: M/S. BHARAT TANKER TRANSPORT CO. CENTRAL CI RCLE- 2 UDAIPUR UDAIPUR (APPELLANT) (RESPONDENT) ITA NO. 670/JU/2008 ASSESSMENT YEAR : 2003-04 PAN : AAYPG 6516 H PT. LAXMI NARAYAN GAUR VS. THE ACIT PROP: M/S. BHARAT TANKER TRANSPORT CO. CENTRAL CI RCLE- 2 UDAIPUR UDAIPUR (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI G.R. KOKANI ASSESSEE BY : SHRI AMIT KOTHARI DATE OF HEARING : 23.07.2012. DATE OF PRONOUNCEMENT : 27.07.2012 ORDER DATED : 27 /07/2012. PER R.K. GUPTA, J.M. BOTH THESE APPEALS HAVE BEEN FILED BY THE ASSESSEE AGAINST TWO DIFFERENT ORDERS OF THE LD.CIT(A), JAIPUR (CAMP AT UDAIPUR ) DATED 10-1 1-2008. 2 2.0 FIRST OF ALL, WE TAKE UP THE APPEAL IN ITSSA NO . 16/JU/2008 FOR THE BLOCK PERIOD 1997-98 TO 2002-03 I.E. UPTO 02-05-2002. 3.1 THE ASSESSEE IS OBJECTING AS TO CONFIRMING THE NOTICE ISSUED U/S 158 U/S 158BD WITHOUT SATISFACTION AND CONFIRMING THE ADDITION OF RS. 25.50 LACS BEING THE AMOUNT OF LOAN ADVANCED TO VARIOUS PARTIES AND ADDITION OF NO TIONAL INTEREST INCOME AGGREGATING T RS. 6,51,700/- ON THE ALLEGED LOANS AND ADVANCES OF RS. 25.50 LACS. 3.2 THE BRIEF FACTS OF THE CASE ARE AS UNDER:- A SEARCH WAS CARRIED OUT BY THE INCOME TAX DEPART MENT AT THE RESIDENTIAL PREMISES OF SHRI GANESH LAL SARUPARIA S ITUATED AT ASHISH VATIKA, OPP. MAHAVEER VIDHYA MANDIR, SECTOR 13, HIR AN MAGRI, UDAIPUR ON 2.5.2002. DURING THE COURSE OFSEARCH AT THE SAID PREMISES,CER TAIN LOOSE PAPERS WERE FOUND FROM ONE RED BAG. A STATEMENT OF SHRI GANESH LAL SARUPARIA WAS RECORDED REGARDING THE OWNERSHIP OF T HE SAID BAG IN WHICH HE INTERALIA STATED THAT THE SAID BAG BELONGED TO H IS FRIEND SHRI PANDIT LAXMI NARAYAN GAUR AND THAT ONLY HE CAN EXPLAIN ABO UT THE LOOSE PAPERS THEREIN. THAT IN VIEW OF THE STATEMENT OF SHRI GANESH LAL SA RUPARIA, THE INCOME TAX DEPARTMENT HAS IMMEDIATELY CARRIED OUT T HE SURIVEY PROCEEDINGS U/S 133A OF THE ACT AT THE BUSINESS PRE MISES OF THE APPELLANT ON EVEN DATE I.E. ON 2.5.2002 AND RECORDED THE STAT EMENT OF THE APPELLANT U/S 133A OF THE ACT WHEREIN INTERALIA IN REPLY TO Q UESTION NO.9. HE CONFIMRMED THAT THE SAID RED BAG (BRIEDF CASE) FOUN D FROM THE PREMISES OF SHRI GANESH LAL SARUPARIA BELONGED TO HIM AND THERE ARE SOME PAPERS IN THE SAID BRIEF CASE BUT HE DID NOT REMEMBER THE PAP ERS THEREIN. HE FURTHER STATED THAT THE SAID BRIEF CASE WAS KEPT AT THE RES IDENCE OF SHRI GANESH LAL SARUPARIA BEFORE 3 TO 4 YEARS. THE AUTHORIZED OFFIC ER OF THE SURVEY PROCEEDINGS ALSO RAISED THE QUESTIONS IN RESPECT OF THE CONTENTS OF LOOSE PAPERS FOUND AND SEIZED FROM THE SAID BRIEF CASE. 3 THAT SUBSEQUENT5LY THE BLOCK ASSESSMENT PROCEEDINGS IN THE CASE OF SHRI GANESH LAL SARUPARIA WERE FINALIZED WHEREIN IT HAS BEEN STATED BY SHRI GANESH LAL SARUPARIA THAT THE SAID BAG PERTAIN S TO SHRI PANDIT LAXMI NARAYAN GAUR. ACCORDINGLY A NOTICE U/S 158BD WAS ISSUED AND SERVE D UPON THE APPELLANT ON 22.1.2003 TO FILE THE RETURN FOR THE B LOCK PERIOD FROM A.Y. 1997-98 TO 2002-03 AND UPTO 02.5.2002 WITHIN 40 DYA S OF THE SERVICE OF THE NOTICE. IN RESPONSE TO THE SAID NOTICE, THE APP ELLANT FILED THE RETURN OF INCOME FOR THE BLOCK PERIOD WITHIN THE TIME GIVEN I .E. ON 03.03.2003 DECLARING UNDISCLOSED INCOME OF RS.NIL. THE A.O. HAS SUBSEQUENTLY ISSUED THE NOTICES U/S 15 8BD R.W.S. 143(2) WHICH WAS SERVED UPON THE APPELLANT ON 4.12. 2003, 22.6.2004 & 17.11.2004 ASKING VARIOUS INFORMATION AND EXPLANATI ON ON THE POINTS MENTIONED THEREIN MORE PARTICULARLY IN RESPECT OF T HE LOOSE PAPERS FOUND FROM THE BAG FOUND AND SEIZED FROM THE PREMISES OF SHRI GANESH LAL SARUPARIA WHO WAS SERARCHED ON 2.5.2002. THE APPELLANT IN RESPONSE TO THE SAID NOTICE FILED DETAILED SUBMISSIONS AND EVIDENCES VIDE SUBMISSIONS DATED 8. 12.2003, NIL (FILED ON 30.7.2004 & 23.11.2004. THE COPIES OF THE SAID SUBM ISSIONS ALONGWITH RELEVANT EVIDENCES ARE ENCLOSED HEREWITH VIDE EXHIB IT-3. THE A.O. HOWEVER WHILE REJECTING AND DISBELIEVING T HE SUBMISSIONS AND EVIDENCES FILED IN RESPECT OF LOOSE PAPERS IN QUESTION PROCEEDED TO ASSESS UNDISCLOSED INCOME OF RS.25,50, 000/- ON ACCOUNT OF ALLEGED ADVANCES TO VARIOUS PARTIES AS NOTED IN THE LOOSE PAPERS AND THE NOTIONAL INTEREST OF RS.6,51,700/- THEREON ESTIMATE BASIS. THE SAID ADDITIONS ARE IN DISPUTE AND APPEAL IS PREFERRED. 4 3.3 A DETAILED SUBMISSIONS WERE FILED BEFORE THE LD .CIT(A) WHICH HAS BEEN INCORPORATED IN THE ORDER OF THE LD.CIT(A) PAGES 23 TO 25 OF HIS ORDER. IN THESE SUBMISSIONS, IT HAS BEEN STATED THAT THOUGH A BAG C ONTAINING CERTAIN LOOSE PAPERS AND SIGNED CHEQUES WERE FOUND AT THE PREMISES OF SHRI G ANESH LAL SARUPARIA ON WHICH SEARCH WAS CONDUCTED. HOWEVER, IT WAS STATED THAT THESE PA PERS DOES NOT BELONG TO THE ASSESSEE. THE AFFIDAVITS OF THE PARTIES TO WHOM LOANS WERE AD VANCED WERE ALSO FILED, DENYING TO HAVE RECEIVED ANY ADVANCE FROM THE ASSESSEE. THE DE TAILS OF THE LOANS ADVANCED TO THE PARTIES HAS BEEN MENTIONED AT PAGE 3 OF LD.CIT(A)S ORDER. THESE LOANS WERE ADVANCED BY THE ASSESSEE IN ASSESSMENT YEAR 2001-02 AND 2002-03 3.4 THE LD.CIT(A) HAS CONFIRMED THE ADDITION AS WEL L AS INTEREST ON THE LOANS ADVANCED FOR THE REASON THAT A BAG CONTAINING THESE PAPERS WERE FOUND AT THE PREMISES OF SHRI GANESH LAL SARUPARIA WHO INFORMED TO THE SEARC H PARTY THAT THIS BAG BELONGS TO THE ASSESSEE AND IMMEDIATELY A SURVEY U/S 133A OF THE A CT ON EVEN DATE I.E. 02-05-2002, THE DATE OF SEARCH ON SHRI GANESH LAL SARUPARIA WAS MAD E ON THE ASSESSEE AND IN THAT SURVEY PROCEEDINGS, THE ASSESSEE HAS ADMITTED THAT THIS BA G BELONGS TO HIM. FROM THE CONTENTS OF THE DOCUMENTS FOUND IN THE BAG WHICH CLEARLY SUGGES T THAT THE ASSESSEE HAD ADVANCED LOANS TO VARIOUS PARTIES RANGING BETWEEN 1.00 LAC T O RS. 5.00 LAS TOTALING TO RS. 25.50 LACS. THERE WERE EVEN FOUND SIGNED CHEQUES WHICH INCLUDED THE AMOUNT OF LOANS PLUS INTEREST GIVEN BY THE LOAN SEEKERS TO THE ASSESSEE. ACCORDIN GLY, THE LD.CIT(A) HELD THAT IT IS AMPLY PROVES THAT THE ASSESSEE HAD ADVANCED THE LOAN IN C ASH TO THESE PARTIES FROM TIME TO TIME . ACCORDINGLY, THE LD.CIT(A) CONFIRMED THE ADDITION M ADE BY THE AO. THE FINDINGS BY THE LD.CIT(A) HAVE BEEN RECORDED IN PARA 4.2 AT PAGES 2 6 TO 29 OF HIS ORDER WHICH IS REPRODUCED AS UNDER:- 5 4.2 I HAVE CONSIDERED THE SUBMISSIONS OF THE LD. A/R AND ALSO PERUSED THE ASSESSMENT ORDER OF THE LD. AO CAREFULLY. THE L D. A/R IN HIS WRITTEN SUBMISSION COVERED ONLY MONEY RECEIPT FROM DEBTORS AS UNDER :- SR. NO. NAME OF PARTY AMOUNT OF ADVANCE (RS.) DATE OF ADVANCE YEAR OF TAXATION (A.Y.) PAGE OF ASSTT. ORDER 1 M/S PUSHPA HANDICRAFTS EMPORIUM UDAIPUR 5,00,000 5.6.2001 2002-03 3 TO 7 2 M/S HIRALAL SUKH LAL TRANSPORT CO. UDAIPUR 5,00,000 1.7.2001 2002-03 7 TO 11 3 M/S YASHWANT MARBLE, UDAIPUR 1,00,000 24.6.2001 2002-03 11 TO 15 FROM REST FOUR CASES HE DID NOT OFFER ANY SUBMISSIO N. HOWEVER, THE FACTS ARE SIMILAR AND NO FURTHER HEARING IS REQUIRED SEPA RATELY AGAINST THESE DEBTORS FOR WHICH NO SUBMISSION IS MADE BY THE APPELLANT. THE V ARIOUS CASH RECEIPTS IN BUSINESS LETTER HEAD AND SOME TIME IN STAMP PAPER I SSUED BY SEVERAL DEBTORS MENTIONED IN THE TABULAR FORM GIVEN IN BEGINNING OF THE WRITTEN SUBMISSIONS WAS FOUND ALONG WITH SOME POST DATED CHEQUES KEPT IN A SECURED BAG (RED BRIEF CASE) SEIZED FROM ONE SH. GANESH LAL SARUPARIA IN A SEARC H AND SEIZURE OPERATION IN HIS RESIDENTIAL PREMISES. SH. GANESH LAL SARUPARIA STAT EMENT STATED THAT THE CONTENTS OF THIS BRIEF CASE BELONG TO SH. PD. LAXMI NARAYAN GAUR, HIS PERSONAL FRIEND WHO IS PROP. OF BHARAT TANKER TRANSPORT COMPANY, UDAIPU R. AS A RESULT, ACTION U/S 158BD OF THE I.T. ACT 1961 WAS INITIATED AGAINST TH E ASSESSEE APPELLANT PD. LAXMI NARAYAN GAUR FOR THE BLOCK PERIOD FROM A.Y. 1997-98 TO 2002-03 AND UPTO 2.5.2002. THE ASSESSEE PD. LAXMI NARAYAN GAUR ADMIT TED THAT THE PAPERS OF CASH RECEIPTS FROM VARIOUS PARTIES AND THE POST DATED CH EQUES FOUND IN THE SAID BRIEF CASE BELONGS TO HIM BUT HE DENIED THAT ANY TRANSACT IONS TOOK PLACE BETWEEN HIM AND THE PARTIES WHO HAS ISSUED THE CASH RECEIPTS FO R LOAN. THE CASH RECEIPTS ISSUED BY VARIOUS PARTIES ARE CATEGORICALLY MENTIONED THAT SUCH MONEY RECEIPTS ARE FOR THE 6 PURPOSE OF LOAN REPAYABLE WITH INTEREST FOR THE SAM E MENTIONED THEREIN. THE POST DATED CHEQUES ARE KEPT IN A NATURE OF SECURITY. THU S IT IS A LIVING CASH LOAN TRANSACTION NOT RECORDED IN THE BOOKS OF ACCOUNTS O F ASSESSEE AND THE DOCUMENTS KEPT IN A SECURED PLACE IN HIS TRUSTED FRIENDS RESI DENCE. ALTHOUGH, IN A STATEMENT AND IN THEIR AFFIDAVITS THE CREDITORS DENIED HAVING EXECUTED ANY LOAN TRANSACTIONS, THEY COULD NOT DENY THAT THEY HAVE NOT ISSUED THE C ASH RECEIPTS FOR LOAN AND ISSUED THE POST DATED CHEQUES FOR SECURITY. RATHER, ALL OF THEM HAVE ADMITTED THEY HAVE ISSUED THE RECEIPTS AND THE POST DATED CHEQUES FOR THE PURPOSE OF LOAN REPAYABLE WITH INTEREST MENTIONED THEREON. THE CASH RECEIPTS ARE ISSUED IN THEIR BUSINESS LETTERHEAD AND IN SOME CASES IN A STAMP PAPER. THUS , THIS INSTRUMENT IS A VALID AND ENFORCEABLE DOCUMENT BEFORE THE COURT OF LAW FOR RE COVERY OF DEBT. LIKEWISE, THE POST DATED CHEQUES ARE VALID NEGOTIABLE INSTRUMENT ENFORCEABLE IN THE COURT OF LAW FOR ITS ENCASHMENT. THEREFORE, THE DENIAL BY THE VA RIOUS DEBTORS THAT THEY DID NOT EXECUTED ANY TRANSACTION AGAINST THIS DOCUMENTS WIT H THE ASSESSEE IS NOT ACCEPTABLE. THEY HAVE NOT DECLARED THE RECEIPTS AS INOPERATIVE AND NEVER ISSUES ANY INSTRUCTION TO INVALIDATE THE POST DATED CHEQUE S, RATHER THESE DOCUMENTS WERE KEPT IN A SECURED MANNER WHICH DEFINITELY INDICATE FOR THE USE OF THE ASSESSEE FOR ENFORCING THE TERMS AND CONDITIONS FOR THE LOAN TRA NSACTIONS WITH THE DEBTORS TO ENSURE THE RECOVERY OF DEBT. WHEN THE ASSESSEE HIMSELF ADMITTED THAT THE DOCUMEN TS FOUND IN THE SAID BRIEFCASE BELONGS TO HIM AND THE PARTIES WHO HAVE I SSUED THE RECEIPTS AND THE POST DATED CHEQUES ADMITTED THAT THERE ARE ISSUED BY THE M IT HAS BECOME SELF PROVED FACTUM. THERE IS NOTHING MORE FOR THE AO TO DISCHAR GE HIS ONUS TO PROVE THAT THE AFORESAID CASH RECEIPTS ARE AGAINST THE LOAN TRANSA CTION OF THE ASSESSEE WITH THE DEBTORS. IT IS SELF CONTAINED AND SELF PROVED FROM THE DOCUMENTS ITSELF. IT IS TO BE MENTIONED THAT THE ASSESSEES BUSINESS INCLUDES EAR NING OF INTEREST FROM THE LOANS AND ADVANCES. THE CASH RECEIPTS RECEIVED FROM THE V ARIOUS DEBTORS DEFINITELY CONFIRM THE LOAN TRANSACTIONS FROM THE ASSESSEE OUT OF HIS BOOKS OF ACCOUNTS. THE LD. A/RS RELIANCE ON THE DOCTRINE OF LAW IN RE SPECT OF LAW ON BURDEN LYING UPON ONE WHO ALLEGES AND NOT UPON WHO DENIES THE EXISTENCE OF THE FACTS IS 7 NOT APPLICABLE IN THIS CASE. THE DOCUMENTS ARE SELF CONTAINED AND SELF PROVED AGAINST THE ASSESSEE. THE DOCUMENTS ARE ADMITTEDLY BELONG TO HIM AND THE BURDEN IS HEAVILY LIED WITH HIM THAT THE FACTS MENTIONED I N THE DOCUMENTS DOES NOT EXIST. THIS COULD NOT BE SUCCESSFULLY PROVED WITH THE DOCU MENTARY EVIDENCE BY THE ASSESSEE. NONE OF THE CASE LAWS RELIED BY THE LD. A /R ARE APPLICABLE IN THIS CASE. R.Y. DURLABHJI (1995) 211 ITR 178 (RAJ.) WHERE IT W AS HELD THAT WHEREVER THE REFERENCE HAVE TO BE DRAWN FROM THE MATERIAL GATHER ED THE AO HAS TO CONSIDER THE MATERIAL BOTH FROM THE ANGLE OF THE ASSESSEE AS WEL L AS THE REVENUE AND COME TO A CONCLUSION WHICH IS NOT UNBIASED BUT SHOULD APPEAR TO BE UNBIASED. IN THIS CASE, THERE IS NO QUESTION OF BIASNESS BUT THERE IS QUEST ION OF FACTS ONLY. THE FACT IS THAT THERE IS VALID CASH RECEIPTS AGAINST CASH LOAN ADVA NCED BY THE ASSESSEE ON RECEIPT OF POST DATED CHEQUES AS SECURITY. THUS, THERE IS N O ELEMENT OF ANY BIASNESS. IT IS NOT A CASE OF MERE BOOK KEEPING ALSO. IT IS CLEARLY RECEIPTS AGAINST THE CASH ADVANCE WITH SECURITY IN THE FORM OF POST DATED CHE QUES AS SECURITY. THUS THERE IS NO ELEMENT OF ANY BIASNESS. IT IS NOT A CASE OF MER E BOOK KEEPING ALSO. IT IS CLEARLY RECEIPTS AGAINST THE CASH ADVANCE WITH SECURITY IN THE FORM OF POST DATED CHEQUES ISSUED BY THE DEBTORS. THEREFORE, THE ASSESSEE WAS HAVING UNDISCLOSED CASH WHICH WAS ADVANCED FOR LOAN IN THE ABOVE MANNER TO THE VA RIOUS DEBTORS. THEREFORE, HIS RELIANCE IN THE OTHER CASE LAWS MENTIONED IN HIS WR ITTEN SUBMISSION ARE ALSO NOT APPLICABLE IN THIS CASE. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE SUBMISSION OF THE LD. A/R VIS--VIS ASSESSMENT ORDER AND THE SUBM ISSIONS AND STATEMENTS OF THE PARTIES THE DOCUMENTS OF CASH RECEIPTS WITH POST DA TED CHEQUES IN THE NATURE OF SECURITY THE TRANSACTIONS ARE CONSIDERED EXISTED VE RY MUCH AS A LOAN TO THE PARTIES ADVANCED BY THE ASSESSEE AND THE SOURCE OF SUCH CAS H ADVANCES WAS NOT EXPLAINED AND THUS THE AOS CONSIDERATION OF THE TRANSACTIONS ARE OUT OF HIS INCOME FROM UNDISCLOSED SOURCES ARE FACTUALLY CORRECT AND THE A DDITION OF RS. 25,50,000/- ON THIS ACCOUNT IS JUSTIFIED AND THE SAME IS CONFIRMED . 8 GROUND NO. 2 RELATES TO INTEREST OF RS. 6,51,700/- 5.1 THE INTEREST IS CHARGED IN ACCORDANCE WITH THE RATE OF INTEREST IN ACCORDANCE WITH THE CASH RECEIPT MENTIO NED IN THE CASH RECEIPTS OF THE LOANS BY THE PARTIES, THEREFORE, IT HAS BEEN CORRECTLY INCLUDED IN THE INCOME AS INTEREST RECEIPTS. THIS IS ALSO JUSTIFIED WHICH IS ONLY CONSEQUENTIAL OF THE CONFIRMATION OF LOAN INVESTED FROM UNDISCLOSED INCOME DECIDED IN GROUND NO. 1 ABOVE. THUS, THIS IS ALSO CONFIRMED. 3.5 NOW THE ASSESSEE IS IN APPEAL HERE BEFORE THE T RIBUNAL. 3.6 THE CONTENTIONS RAISED BEFORE THE LD.CIT(A) WER E REITERATED HERE BEFORE THE TRIBUNAL BY LD. AR. 3.7 THE LD. DR ON THE OTHER HAND STRONGLY PLACED RE LIANCE ON THE ORDER OF THE LD.CIT(A). 3.8 AFTER CONSIDERING THE ORDERS OF THE AO AND THE LD.CIT(A) , WE FOUND NO INFIRMITY IN THE FINDINGS OF THE LD.CIT(A) AS THE LD.CIT(A) H AS EXAMINED THE FACTUAL MATRIX OF THE CASE AND THEN ARRIVED AT THE CONCLUSION THAT THE AS SESSEE HAD ADVANCED THE LOANS TO VARIOUS PERSONS DURING THE ASSESSMENT YEARS 2001-02 AND 2002-03. THE LD.CIT(A) HAS ALSO CONFIRMED THE INTEREST INCOME EARNED ON THE LO ANS ADVANCED AS IT WAS CLEAR FROM THE PAPERS FOUND THAT THE LOAN WAS GIVEN ON INTEREST. T HE FINDINGS OF THE LD.CIT(A) IS ALREADY REPRODUCED SOMEWHERE ABOVE IN THIS ORDER. AS STATED , THE FINDINGS OF THE LD.CIT(A) IN OUR CONSIDERED VIEW IS THE FINDING OF THE FACT WHICH DO ES NOT REQUIRE ANY INTERFERENCE. WE CONFIRM THE ORDER OF THE LD.CIT(A). 4.0 NOW WE TAKE UP THE APPEAL IN ITA NO.670/JU /2008 FOR THE ASSESSMENT YEAR 2003-04. 9 5.1 IN THIS APPEAL, THE ASSESSEE IS OBJECTING AS TO CONFIRMING THE ADDITION OF RS. 35.00 LACS BEING THE AGGREGATE AMOUNT OF GIFT RECEIVED BY THE ASSESSEE FROM VARIOUS DONORS AND CONFIRMING THE ADDITION OF RS. 33,750/- BEING THE A MOUNT OF ALLEGED COMMISSION. THE ASSESSEE IS ALSO OBJECTING AS TO THE CONFIRMING THE ADDITION OF RS. 5.28 LACS BEING INTEREST ON THE LOANS ADVANCED IN EARLIER YEARS. 5.2 ALTERNATE GROUND HAS ALSO BEEN TAKEN BY THE ASS ESSEE THAT IF THE GROUND OF THE ASSESSEE IN RESPECT OF RS. 35.00 LCS IS NOT ACCEPT ED THEN THE ADDITION CONFIRMED ON ACCOUNT OF LOANS AND ADVANCES TO VARIOUS PARTIES IN EARLIER YEARS SHOULD BE ALLOWED SET OFF AS THE AMOUNT OF LOAN ADVANCED BY THE ASSESSEE WAS AVAILABLE WITH THE ASSESSEE. 5.3 BRIEF FACTS OF THE CASE ARE THAT THE DURING THE ASSESSMENT PROCEEDINGS, THE AO NOTICED THAT THE ASSESSEE HAS SHOWN THE GIFTS RECEI VED AMOUNTING TO R 35.00 LACS FROM VARIOUS PERSONS. THE ASSESSEE WAS REQUIRED TO PROVE THE GENUINENESS OF THE GIFTS RECEIVED ALONGWITH CREDITWORTHINESS OF THE CREDITORS. THE AS SESSEE WAS ALSO REQUIRED TO PRODUCE THE PARTIES. VARIOUS DETAILS I.E. AFFIDAVIT OF THE PARTIES, DECLARATION OF THE GIFTS, PHOTOCOPY OF THE DEMAND DRAFT, ACKNOWLEDGMENT OF THE INCOME T AX RETURN OF THE RESPECTIVE PARTIES, COPY OF THE ACCOUNT, SOURCE OF LOANS ETC. WERE FILE D BEFORE THE AO. THEREAFTER THE INFORMATION WAS SOUGHT FROM THE BANK BY THE AO AND ON INFORMATION, IT WAS GATHERED THAT THE CASH HAS BEEN DEPOSITED IN THE RESPECTIVE BANK ACCOUNT BEFORE ISSUING DRAFT OF CHEQUE IN THE NAME OF THE ASSESSEE FOR GIFTS. THIS FACT WA S ALSO BROUGHT TO THE KNOWLEDGE OF THE ASSESSEE. THEREAFTER ON RECEIVING THE REPLY FROM TH E ASSESSEE TO VERIFY THE FACTS, FURTHER INVESTIGATION ABOUT THE DONOR WAS MADE IN DELHI THR OUGH INVESTIGATION WING IN DELHI. THE OUTCOME OF THE INVESTIGATION WAS THAT SHRI DEEP AK GUPTA HAS BANK ACCOUNTS IN VARIOUS BANKS IN DIFFERENT FAKE INDIVIDUAL NAMES AS WELL AS COMPANIES. HE HAS STATED THAT 10 HE RECEIVED CASH FROM DIFFERENT PARTIES AND HAD ISS UED CHEQUE OR DRAFT OF THE SAME AMOUNT TO THEM IN LIEU OF COMMISSION. SHRI ASHOK VINDAL IS ONE OF THE FAKE NAMES USED BY HIM AS PER THE LIST GIVEN BY HIM. THE STATEMENT OF ONE SHRI MAHESH GAUR WAS ALSO RECORDED AND HE ADMITTED THAT HE IS HAVING BANK ACCOUNT IN T HE NAME OF SEVERAL INDIVIDUALS AND COMPANIES AND HE RECEIVES CASH AND GIVEN CHEQUE OR DRAFT OF THE SAME AMOUNT TO THE PARTIES ON COMMISSION. THE LIST OF INDIVIDUALS FURN ISHED BY HIM CONTAINS THE NAME OF SHRI CHETAN PRAKASH AGARWAL AND SHRI KESHO RAM GUPTA FRO M WHOM THE ASSESSEE HAS RECEIVED GIFT OF RS. 7.50 LACS. 5.4 THE GIFT OF RS. 10.00 LACS WAS RECEIVED FROM SH RI DEEPAK GUPTA WHO HAS ALSO GIVEN SIMILAR STATEMENT AS MENTIONED ABOVE. IN THE MEANTIME, THE ADIT (INVESTIGATION), AHEMDABAD ALSO CONDUCTED AN ENQUIRY ABOUT THE DONOR S AND THE DRAFT ISSUING BANK AND BANK ACCOUNT. IT WAS INFORMED THAT SEVERAL FAKE ACC OUNT IN VARIOUS NAMES HAVE BEEN OPENED FOR ISSUING BOGUS CHEQUES UNDER THE GARB OF THE GIFTS THEREAFTER, THE LD. AR OF THE ASSESSEE WAS CONFRONTED FROM ALL THESE FACTS AND OP PORTUNITY WAS GIVEN TO HIM TO REBUT THESE FINDINGS VIDE QUERY LETTER DATED 17-03-2006. THE ASSESSEE FILED THE REPLY AND AGAIN STATED THAT HE HAS ALREADY FILED THE REQUIRED DETAI LS ALONGWITH AFFIDAVITS OF THE DONORS. THEREFORE, THE ONUS LAYS UPON HIM HAVE BEEN DULY DI SCHARGED. RELIANCE WAS PLACED ON VARIOUS CASE LAWS. HOWEVER, THE AO WAS NOT SATISFIE D AND HE MADE THE IMPUGNED ADDITION OF RS. 35.00 LACS BY REJECTING THE CLAIM O F THE ASSESSEE AS GENUINE GIFTS. 5.5 THE AO ALSO MADE ADDITION OF RS. 33,750/- ON AC COUNT OF ALLEGED COMMISSION PAID FOR RECEIVING THE GIFTS FROM VARIOUS PARTIES. 5.6 DETAILED SUBMISSIONS WERE FILED BEFORE THE LD.C IT(A). THE CONTENTIONS RAISED BEFORE THE AO WERE REITERATED. THE SUBMISSIONS OF T HE ASSESSEE WERE CONSIDERED. 11 HOWEVER, THEY WERE NOT FOUND SATISFACTORY BY THE LD .CIT(A). ACCORDINGLY, HE CONFIRMED THE ORDER OF THE AO CONFIRMING THE ADDITION OF RS. 35.00 ACS AS WELL AS ALLEGED COMMISSION. 5.7 THE ALTERNATE COMMISSION OF THE ASSESSEE WAS AL SO REJECTED AS IN HIS VIEW, THERE WAS NO NEXUS BETWEEN THE ASSETS UNDISCLOSED INCOME OF THE BLOCK PERIOD AND THE GIFTS RECEIVED BY THE ASSESSEE DURING THIS YEAR. 5.8 THE LD. AR REITERATED THE CONTENTIONS RAISED BY THE LOWER AUTHORITIES. 5.9 ON THE OTHER HAND, THE LD. DR PLACED RELIANCE O N THE ORDER OF THE LD.CIT(A). 5.10 AFTER CONSIDERING THE ORDERS OF THE AO AND THE LD.CIT(A), WE FIND THAT THE ASSESSEE COULD NOT PROVE THE GENUINENESS OF THE GIF TS RECEIVED. AFTER FILING THE DETAILS, THE INVESTIGATION WAS MADE AND DONORS HAVE CATEGORI CALLY DENIED IN HAVING GIVEN ANY GENUINE GIFT AS THEY HAVE STATED THAT THEY HAVE GIF TED THE AMOUNT IN LIEU OF COMMISSION. THESE FINDINGS COULD NOT BE CONTROVERTED BY BRINGIN G ANY POSITIVE MATERIAL. NO CONFIRMATION AFTER THIS QUERY CONDUCTED BY THE INVE STIGATION WING HAVE BEEN FILED FROM THE DONORS. THEREFORE, THE LAST STATEMENT GIVEN BY THEM PROVE THAT THE GIFTS WERE NOT GENUINE. ACCORDINGLY, WE ARE OF THE CONSIDERED VIEW THAT THE AO AND THE LD.CIT(A) WILL JUSTIFY IN MAKING AND CONFIRMING THE ADDITIONS RESP ECTIVELY. HOWEVER, WE FOUND WEIGHT IN THE ALTERNATE CONTENTIONS OF THE ASSESSEE THAT T ELESCOPING AGAINST UNDISCLOSED INCOME ON ACCOUNT OF LOANS AND ADVANCES GIVEN BY THE ASSESSEE TO VARIOUS PARTIES SHOULD BE GIVEN. WE HAVE CONFIRMED THE ADDITION ON ACCOUNT OF UNEXPL AINED MONEY ADVANCED TO VARIOUS PERSONS. THOUGH THE ASSESSEE HAD FILED AFFIDAVITS O F THOSE PARTIES THAT THE HAVE NOT TAKEN ANY LOAN FROM THE ASSESSEE. IT MEANS THAT THE MONEY WAS WITH THE ASSESSEE WHICH WAS UNEXPLAINED. ONCE THEY HAVE DENIED IN HAVING RECEIV ED ANY LOAN FROM THE ASSESSEE THEN IT 12 MEANS THAT THE HAVE RETURNED THE LOAN TO THE ASSESS EE IN CASH. THEREFORE, IN OUR CONSIDERED VIEW, THE AMOUNT OF LOAN ADVANCED BY THE ASSESSEE W HICH IS HELD AS UNEXPLAINED WAS AVAILABLE WITH THE ASSESSEE TO USE THE SAME UNDER THE GARB OF THE GIFT. ACCORDINGLY WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE DESERVES T O GET TELESCOPING AGAINST THE AMOUNT OF LOAN WHICH IS HELD AS UNEXPLAINED AND INTEREST THER EON EARNED. ACCORDINGLY, WE DIRECT TO ALLOW THE TELESCOPING OF RS. 25.50 LACS PLUS INTERE ST EARNED ON THAT AMOUNT WHICH HAS BEEN ASSESSED IN THE BLOCK PERIOD. FOR THE SAKE OF CLARITY, ENTIRE AMOUNTS WERE ADVANCED FOR THE ASSESSMENT YEAR 2001-02 AND 2002-03 AND THE REFORE, THOSE AMOUNTS WERE AVAILABLE WITH THE ASSESSEE FOR ROUTING THROUGH THE GIFTS. WE ORDER ACCORDINGLY. THUS THE GROUND NO. 1 TO 3 OF THE ASSESSEE ARE DISMISSED WHI LE THE ALTERNATE GROUND NO. 5 OF THE ASSESSEE IS ALLOWED. 6.1 THE REMAINING GROUND I.E. GROUND NO. 4 IS AGAIN ST CONFIRMING THE ADDITION OF RS. 5.28 LACS ON ACCOUNT OF INTEREST EARNED ON LOAN ADVANCED FOR THE BLOCK PERIOD. 6.2 WE HAVE ALREADY HELD THAT THE AMOUNT OF LOAN AD VANCES FOR THE ASSESSMENT YEAR 2001-02 AND 2002-03 HAVE BEEN UTILIZED BY THE ASSES SEE FOR ROUTING UNDER THE GARB OF GIFT. THEREFORE, IN OUR CONSIDERED VIEW, THERE WAS NO JUS TIFICATION FOR ASSESSING THE INCOME ON ACCOUNT OF INTEREST EARNED ON LOAN ADVANCED. ALL TH E PARTIES TO WHOM THE LOAN WAS GIVEN HAVE ALREADY DENIED IN HAVING RECEIVED THE LOANS WH ICH CLEARLY ESTABLISHES THAT WHATEVER LOAN AMOUNT WAS GIVEN BY THE ASSESSEE THAT HAS BEEN RECEIVED BACK. THEREFORE, THAT AMOUNT WAS AVAILABLE FOR USING THE SAME UNDER THE G ARB OF GIFT. IN VIEW OF THESE FACTS AND CIRCUMSTANCES OF THE CASE, WE DELETE THE ADDITION O F RS. 5.28 LACS. WE ORDER ACCORDINGLY. 13 7.0 IN THE RESULT, APPEAL OF THE ASSESSEE FOR THE B LOCK PERIOD 1997-98 TO 20002-03 IS DISMISSED AND APPEAL FOR THE ASSESSMENT YEAR 2003-0 4 IS ALLOWED IN PART 8.0 THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 27 -07-2012.. SD/- SD/- ( N.K. SAINI ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER JODHPUR, *MISHRA COPY FORWARDED TO :- 1.PT. LAXMI NARAYAN GAUR, UDAIPUR 2.THE ACIT, CENTRAL CIRCLE- 2, UDAIPUR 3. THE LD.CIT(A) . 4. THE CIT,. 5. THE D/R 6. GUARD FILE (ITSSA NO.16/JU/2008) BY ORDER, AR ITAT JODHPUR.