Shri Harshad M. Shukla, Baroda V. The ACIT, Central Circle-1, Baroda

ITSSA 189/AHD/2014

• Counselvise Citation: [2017] 122 COUNSELVISE.COM (IT) 2950 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 28 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 23-02-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 12-01-2017
• Assessment Year: 1999-2000
• Appeal Filed On: 25-04-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M K PATEL AR MS VIBHA BHALLA
• Keywords: Unexplained investment; Loose papers
• Section: 133A; 132; 144

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD , , BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER SL. NOS. IT(SS)A NO(S) ASSESSMENT YEAR (S) APPEAL(S) BY APPELLANT VS. RESPONDENT APPELLANT RESPONDENT 1. 189/AHD/2014 1999-2000 HARSHAD M. SHUKLA C/O. MAINTENANCE MALHAR POINT OLD PADRA ROAD BARODA PAN : AFKPS 2706 N THE ACIT CENTRAL CIR-1 BARODA 2. 190/AHD/2014 2001-02 -DO- ASSESSEE REVENUE 3. 191/AHD/2014 2002-03 -DO-ASSESSEE REVENUE 4. 192/AHD/2014 2004-05 -DO- ASSESSEE REVENUE ASSESSEE BY : SHRI M.K. PATEL, AR REVENUE BY : MS. VIBHA BHALLA, CIT-DR !' / DATE OF HEARING 12/01/2017 #$%&!' / DATE OF PRONOUNCEMENT 23/02/2017 / O R D E R PER PRADIP KUMAR KEDIA, AM: THE ASSESSEE HAS FILED THREE APPEALS AGAINST T HE COMBINED ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-IV [CI T(A) IN SHORT, AHMEDABAD FOR ASSESSMENT YEARS (AYS) 1999-2000, 2 001-02 & 2002- 03 DATED 27/01/2014. THE ASSESSEE HAS ALSO FILED A NOTHER APPEAL FOR AY 2004-05 ASSAILING THE ORDER OF THE CIT(A) DATED 27/ 01/2014. IT(SS)A NOS. 189 TO 192/AHD/2014 HARSHAD M. SHUKLA VS. ACIT - 2 - 2. ALL FOUR APPEALS ARE DISPOSED OF BY COMMON ORDE R OWING TO INTER- CONNECTED FACTS AND SIMILARITY IN THE ISSUES INVOLV ED. IT(SS)A NO.189/AHD/2014 FOR AY 1999-2000 ASSESSEE S APPEAL 3. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE REA D AS UNDER:- 1. THE LEARNED CIT(APPEALS) ERRED IN HOLDING THAT YOU R APPELLANT HAD MADE INVESTMENT OF RS.24,11,819/- IN M/S.SHREE CORPORATION AND FURTHER ERRED IN CONFIRMING ADDITIO N OF RS.24,11,819/-. 2. THE LEARNED CIT(APPEALS) ERRED IN ENHANCING THE ADD ITION MADE IN THE ASSESSMENT ORDER BY RS.22,50,000/- BEIN G ALLEGED UNEXPLAINED INVESTMENT IN SIDDHARTH INDUSTRIES IN W HICH THE APPELLANT IS NEITHER A PARTNER NOR ASSOCIATED IN AN Y MANNER. 4. BRIEFLY STATED, A SEARCH ACTION UNDER SECTION 13 2 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT') WA S CARRIED OUT ON 04/03/2005 ON KABHAI CHAUHAN GROUP OF CASES INCLUDI NG THE CASE SHRI DINESH B.PATEL. IN THE COURSE OF SEARCH, CERTAIN DOCUMENTS PERTAINING TO DIVYASHRAY PROJECT OF A PARTNERSHIP-FIRM M/S.SHREE CORPORATION WERE FOUND WHERE THE ASSESSEE HAPPENS TO BE PARTNER. CO NSEQUENTLY, A SURVEY ACTION UNDER SECTION 133A OF THE ACT WAS CARRIED OU T ON THE OFFICE PREMISE OF THE ASSESSEE. PROVISIONS OF SECTION 153 C OF THE ACT INVOKED IN THE CASE OF THE ASSESSEE HAVING REGARD TO THE FA CT THAT CERTAIN IT(SS)A NOS. 189 TO 192/AHD/2014 HARSHAD M. SHUKLA VS. ACIT - 3 - DOCUMENTS PERTAINING TO THE ASSESSEE WERE FOUND DUR ING THE SEARCH. IN CONSEQUENCE, A NOTICE UNDER SECTION 153C OF THE ACT WAS ISSUED TO THE ASSESSEE AFTER RECORDING SATISFACTION NOTE. THE AS SESSEE DID NOT RESPOND TO THE NOTICE UNDER SECTION 153C AND NO RETURN WAS FILED IN RESPONSE THEREOF AS CALLED FOR. THE ASSESSING OFFICER (AO) ALSO OBSERVED THAT NO ORIGINAL RETURNS UNDER S.139 WERE FILED EITHER. SH OW-CAUSE NOTICE (SCN) FOR EX-PARTE ASSESSMENT ISSUED ALSO WENT IN VAIN. NO REPLY FRO M THE ASSESSEE WAS RECEIVED BY THE AO. ACCORDINGLY, THE ASSESSMENT WAS FINALIZED ON THE BASIS OF SEIZED MATERIAL EX-PARTE UNDER SECTION 144 OF THE ACT. 4.1. A PERUSAL OF THE ASSESSMENT ORDER REVEALS THAT A DOCUMENT REFERRED TO AS ANNEXURE A-4 AT PAGE NO.28 INTER ALIA WAS SEIZED FROM THE OFFICE OF THE ASSESSEE WHICH IS STATED TO BE A COPY OF THE CAPITAL ACCOUNT OF THE ASSESSEE IN THE BOOKS OF PARTNERSHIP-FIRM OF THE AS SESSEE M/S.SHREE CORPORATION. IT WAS NOTICED BY THE AO THAT THE CA PITAL ACCOUNT OF THE ASSESSEE AS PER SEIZED DOCUMENT IS DIFFERENT FROM O NE FILED ALONG WITH THE RETURN OF INCOME BY THE PARTNERSHIP-FIRM. THE CAP ITAL ACCOUNT SUMMARIZED BY AO AS PER SEIZED PAPER AS UNDER:- YEAR OP. BALANCE EXP.INCURRED TOTAL AMT. RECD. (IN CASH) BALANCE 98-99 26,61,819 2,50,000 24,11,819 99-00 24,11,819 - 1,50,000 22,61,819 00-01 22,61,819 - - 22,61,819 IT(SS)A NOS. 189 TO 192/AHD/2014 HARSHAD M. SHUKLA VS. ACIT - 4 - 4.2. THE AO ALSO SUMMARIZED THE CAPITAL ACCOUNT OF THE ASSESSEE IN THE PARTNERSHIP-FIRM FOR DIFFERENT ASSESSMENT YEARS FOU ND AS PER ANNEXURE A-14 TO A-20 AS FOLLOWS: YEAR OP. BALANCE EXP.INCURRED TOTAL AMT. RECD. (IN CASH) BALANCE 98-99 68,517 - - 68,517 99-00 1,06,679 - - 1,06,679 00-01 2,48,118 1,35,000 - 1,14,118 4.3. THE AO BASED ON THE ABOVE DATA NOTICED WIDE VA RIATION IN THE CAPITAL ACCOUNT REFLECTED IN THE SEIZED PAPER AND THE CAPITAL ACCOUNT AS PER THE BOOKS OF ACCOUNTS OF THE PARTNERSHIP-FIRM W HICH WERE ALSO SEIZED. IT WAS ALSO OBSERVED BY THE AO THAT THE OPENING BAL ANCE ALSO DO NOT MATCH WITH THE CLOSING BALANCE OF THE PRECEDING YEA R. THE VARIATION BETWEEN THE SEIZED PAPER AND THE RECORDING IN THE B OOKS WERE TABULATED BY THE AO AS UNDER:- YEAR CL.BAL. AS PER SEIZED PAPER CL.BAL.AS PER BOOKS DIFFERENCE 98-99 24,11,819 68,517 23,43,302 99-00 22,11,819 1,06,679 21,55,140 00-01 22,61,819 1,14,118 21,47,701 IT(SS)A NOS. 189 TO 192/AHD/2014 HARSHAD M. SHUKLA VS. ACIT - 5 - 4.4. IN THE LIGHT OF AFORESAID VARIATIONS DETECTED IN THE COURSE OF SEARCH ACTION, THE ASSESSEE WAS ASKED AS TO WHY THE DIFFER ENCE IN THE CAPITAL ACCOUNT SHOULD NOT BE TREATED AS HIS UNACCOUNTED IN VESTMENT. AS PER THE AO, THE ASSESSEE STATED IN REPLY THEREOF THAT THE D IFFERENCE IN THE CLOSING BALANCES MAY BE DUE TO THE REASONS THAT SOME OF THE AMOUNTS MAY BE REFLECTED IN THE ACCOUNTS OF SOME OF THE GROUP CONC ERNS RUN BY HIM. THE AO DID NOT FIND ANY WEIGHT IN SUCH GENERAL REPLY AN D ACCORDINGLY PROCEEDED TO TREAT UNRECORDED AMOUNT OF RS.24,11, 829/- AS UNEXPLAINED INCOME OF THE ASSESSEE IN THE ABSENCE OF ANY EXPLAN ATION FORTHCOMING FROM THE ASSESSEE IN THE COURSE OF ASSESSMENT PROCE EDINGS. 4.5 AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE MOVED APPEAL BEFORE THE CIT(A). THE CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE ON THE GROUND THAT NO COMPLIANCE WAS MADE BY THE ASSES SEE TO THE NOTICES ISSUED FOR HEARING IN SPITE OF SUFFICIENT OPPORTUNI TIES. 4.6 THE ORDER OF THE CIT(A) WAS CHALLENGED BY THE A SSESSEE BEFORE THE ITAT. THE COORDINATE BENCH OF THE ITAT VIDE ORDER DATED 24/10/2008 SET ASIDE THE AFORESAID EX-PARTE ORDER OF THE CIT(A) FOR RE-ADJUDICATION IN APPEAL FILED BY THE ASSESSEE. 4.7 IN THE SECOND ROUND OF PROCEEDINGS BEFORE THE C IT(A) PURSUANT TO THE ORDER OF THE ITAT, A REMAND REPORT WAS CALLED F ROM THE AO. THE AO IT(SS)A NOS. 189 TO 192/AHD/2014 HARSHAD M. SHUKLA VS. ACIT - 6 - IN ITS REMAND REPORT DATED 27/12/2013 ONCE AGAIN AL LEGED THAT IN SPITE OF SEVERAL OPPORTUNITIES NO COMPLIANCE WAS MADE BY THE ASSESSEE. THE ASSESSEE IN THE SECOND ROUND OF PROCEEDINGS BEFORE THE CIT(A) DEFENDED ITS CASE BY WAY OF WRITTEN SUBMISSIONS AS NOTED IN THE PARA-5.2 OF THE CIT(A) ORDER WHICH IS REPRODUCED HEREUNDER:- 5.2. THE RELEVANT PORTION OF THE SUBMISSIONS FURNI SHED B Y THE APPELLANT IS REPRODUCED AS UNDER:- WITHOUT PREJUDICE TO THE ABOVE IT IS SUBMITTED THA T THE ADDITION OF RS.24,11,819/- MADE BY THE ASSESSING OFFICER AS ON THE BASIS OF THE SEIZED MATERIAL FOUND DURING THE COURSE OF SEARCH, COPY OF WHICH IS ENCLOSED WITH THE SUBMISSION. A PERUSAL OF THE SAI D LOOSE PAPERS REVEALS AS UNDER: H.M.S. RECEIPT UP TO 31.3.99 70000.00 16.1.99 ANILBHAI CHAUDHARI 101 80000.00 8.3.9 T NARSIHRAO 109 50000.00 ASHWIN UPADHYAY 202 50000.00 S K AGARWAL 301 250000.00 TOTAL 2000000 LAND 661819 EXP & PAID TO B.B.PATEL _______________ 2661819 TOTAL RECEIPT 250000 2411819 EXCESS PAID BY H.M.S. IT(SS)A NOS. 189 TO 192/AHD/2014 HARSHAD M. SHUKLA VS. ACIT - 7 - THE LEARNED ASSESSING OFFICER WAS OF THE VIEW THAT THESE REPRESENTED THE CAPITAL ACCOUNT FROM THE BOOKS OF M /S.SHREE CORPORATION. IT MAY BE SUBMITTED HERE THAT THE CONTENTION OF TH E LEARNED ASSESSING OFFICER THAT THESE LOOSE PAPERS REPRESENT ED THE CAPITAL ACCOUNT OF THE APPELLANT FROM THE BOOKS OF M/S.SHRE E CORPORATION IS INCORRE3CT AND UNJUSTIFIED. IT WOULD BE PERTINENT TO STATE HERE THAT THE NOTING ON THE LOOSE PAPERS PERTAINS TO RECEIPT DETA ILS TILL 31.03.1999. THE CONTENTION OF THE ASSESSING OFFICER THAT THE AM OUNT OF RS.26,61,819/- WAS EXPENSES INCURRED BY THE APPELLA NT DURING FINANCIAL YEAR AGAINST WHICH THE AMOUNT OF RS.2,50,000/- WAS RECEIVED BY HIM FROM M/S.SHREE CORPROAITON AND HENCE SHE WAS OF THE VIEW THAT AN AMOUNT OF RS.24,11,819/- WAS INVESTED BY THE APPELL ANT AND THE SAME REPRESENTED UNACCOUNTED INVESTMENT. IT MAY BE SUBM ITTED HERE THAT DURING THE COURSE OF SEARCH STATEMENT OF THE APPELL ANT WAS RECORDED WHEREIN HE HAS STATED THESE BALANCES REPRESENTED TH E CLOSING BALANCES IN VARIOUS OTHER FIRMS OF THE GROUP AND THEREFORE N O ADMISSION WAS MADE REGARDING UNEXPLAINED INVESTMENT. IT MAY BE S UBMITTED HERE THAT THE NOTING ON THE SAID LOOSE PAPERS ARE NOT IN THE HANDS OF THE APPELLANT OR ANY OF THE PARTNER OF M/S.SHREE CORPORATION, IT IS A TYPED LOOSE PAPER. THE LEARNED ASSESSING OFFICER MERELY ON CON JECTURES AND SURMISES PROCEEDED TO HOLD THAT THE APPELLANT HAD M ADE AN INVESTMENT OF RS.24,11,819/- DURING FINANCIAL YEAR 1998-99 REL EVANT TO A.Y. 1999- 2000. IT MAY BE SUBMITTED HERE THAT THE LAND AND E XPENSES STATED IN THE SAID LOOSE PAPERS CANNOT BE PRESUMED TO BE AN EXPEN DITURE OF THE CURRENT YEAR. IT MAY BE SUBMITTED HERE THAT M/S.SHREE CORPORTION WAS INEXISTENCE PRIOR TO A.Y. 1999-2000 AS IS EVIDENT FROM PAGE NO. 2 OF THE ASSESSMENT ORDER WHEREIN THE LEARNED ASSESSING OFFICER HAS STA TED IN THE BOOKS OF ACCOUNTS OF SHREE CORPORATION AND OPENING BALANCE O F RS.68517/- WAS SHOWN IN THE CAPITAL ACCOUNT OF THE APPELLANT. THE NOMENCLATURE OF THE LOOSE PAPERS AS STATED AS U NDER. IT(SS)A NOS. 189 TO 192/AHD/2014 HARSHAD M. SHUKLA VS. ACIT - 8 - HMS RECEIPT UPTO 23.03.1999 NO WHERE IN THE LOOSE P APERS IT IS MENTIONED THAT THE APPELLANT HAD MADE AN INVESTMENT DURING F.Y. 1998- 99 RELEVANT TO 1999-2000. IT IS SUBMITTED THAT IT IS TRI-TRITE LAW THAT THE L OOSE PAPER FOUND DURING THE COURSE OF SEARCH NEED TO BE ANALYZED IN TOTAL A ND CANNOT BE ISOLATED SO AS TO COME TO CONCLUSION THAT THE SAID LOOSE PAP ERS PERTAINS TO FINANCIAL YEAR RELEVANT TO A.Y. UNDER REFERENCE. H ENCE THE ADDITION MADE IS MERELY ON CONJECTURES AND SURMISES AND WITH OUT APPRECIATION OF FACTS. FOR THIS PURPOSE RELIANCE IS PLACED ON THE DECISION OF ASHOK KUMAR AGGARWAL 38 TTJ 189, WHEREIN IT WAS HELD THAT SUSPICION THOUGH A GROUND FOR SCRUTINY OF EVIDENCE , CANNOT BE MADE THE FOUNDATION OF A DECISION. CONJECTURES IS NOT A SUBSTITUTE FOR LEGAL PROOF. SUSPICION, HOWEVER STRONG, CANNOT TAKE THE PLACE OF PROOF. THE ITO WOULD NOT BE JUSTIFIED IN DECIDING A CASE UPON HIS OWN SUSPICION OR UPON MERE SUPPOSITION AFTER DISCARDING THE EVIDENCE PRODUCED BY THE ASSESSEE. ONE MUST BE CAREFUL NOT TO CARRY CAUTION TO AN EXTREME LENGTH AND NOT TO DISCARD ORAL EVIDENCE MERELY BECAUSE IT IS ORAL AND UNLESS THE IMP0EACHING AND DISCREDITING CIRCUMSTANCES ARE CLEA RLY FOUND TO EXIST. THE GENERAL RULE IS THAT WHENEVER IT IS INTENDED TO IMPEACH THE CREDIT OF A PERSON WHOSE STATEMENT HAS BEEN RECORDED, HIS ATT ENTION MUST BE DRAWN TO THE DISCREDITING FACTS SO THAT HE MAY HAVE AN OPPORTUNITY OF EXPLAINING THEM. IN VIEW OF THE AFORESAID FACTS AND SUBMISSION IT IS SUBMITTED THAT THE ADDITION OF RS.24,11,819/- MADE BY THE LEARNED ASSE SSING OFFICER IS MERELY ON CONJECTURES AND SURMISES AND THEREFORE BE DELETED. COMMENTS ON REMAND REPORT : DURING THE COURSE OF SEARCH THE APPELLANT HAD STATE D THAT AN AMOUNT OF RS.18 20 LACS WAS PAID BY HIM FROM HIS ACCOUNTS A ND THEREFORE ACCORDING TO HIM THE SAID LOOSE PAPERS REFLECTED TH E INVESTMENTS MADE IN THE PROJECT BY HIM OR HIS CONCERNS. THE CONTENT ION OF THE LEARNED IT(SS)A NOS. 189 TO 192/AHD/2014 HARSHAD M. SHUKLA VS. ACIT - 9 - ASSESSING OFFICER THAT THE APPELLANT HAD MADE INVES TMENT OF RS.26,11,819/- DURING THE YEAR UNDER REFERENCE IS M ERELY ON CONJECTURES AND SURMISES. IT WOULD BE PERTINENT TO STATE HERE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS IN THE CASE OF SHREE CORPORATION NO ADV ERSE INFERENCE BE DRAWN IN RELATION TO THE SAID LOOSE PAPER WHICH ALS O REFLECTED AN AMOUNT OF RS.2,50,000/- BEING PURPORTED TO HAVE BEE N RECEIVED BY THE APPELLANT FROM THE SAID CONCERN HENCE THE CONTENTIO N OF THE LEARNED ASSESSING OFFICER THAT THE APPELLANT HAD MADE INVES TMENT AND SAME WAS NOT PRO9PERLY EXPLAINED BY HIM CANNOT BE MADE A BAS IS FOR MAKING THE ADDITION WHEN THE SAID LOOSE PAPER HAS NOT BEEN TAK EN INTO CONSIDERATION WHILE FRAMING THE ASSESSMENT ORDER IN THE CASE OF SHREE CORPORATION. 4.8 THE CIT(A) HOWEVER WAS NOT IMPRESSED BY VARIOUS PLEAS CANVASSED BEFORE IT. THE RELEVANT OPERATIVE PARA O F THE ORDER OF THE CIT(A) IS REPRODUCED HEREUNDER:- 5.3. I HAVE CONSIDERED THE ASSESSMENT ORDER, ITAT S ORDER, REMAND REPORT AND THE SUBMISSIONS FURNISHED BY THE APPELLANT. 5.3.1. THE CLAIM OF THE APPELLANT THAT NOTINGS ON T HE LOOSE PAPER WERE NOT IN HIS HAND WRITING BUT IT WAS A TYPED LOO SE PAPER IS IRRELEVANT. THERE IS NO DENYING OF THE FACT THAT T HIS LOOSE PAPER WAS SEIZED FROM THE PREMISES OF THE APPELLANT. AS PER SECTION 292C OF THE ACT, THE PRESUMPTION IS THAT THE LOOSE PAPER FOUND IN POSSESSION OR CONTROL OF THE ASSESSEE BELONGS TO HI M/HER AND THE CONTENTS RECORDED THEREIN ARE CORRECT. THE ONUS IS ON THE ASSESSEE TO EXPLAIN THE CONTENTS THEREIN. THE ABBREVIATION WRITTEN ON THE LOOSE PAPER I.E. HMS REPRESENTS THE NAME OF THE A PPELLANT SHRI HARSHAD M.SHUKLA. THE RELIANCE OF THE APPELLANT ON THE JUDGEMENT IT(SS)A NOS. 189 TO 192/AHD/2014 HARSHAD M. SHUKLA VS. ACIT - 10 - IN THE CASE OF SHRI ASHOKKUMAR AGRAWAL IS NOT RELEV ANT AS IN THE CASE OF THE APPELLANT WHAT HAS BEEN FOUND IS A DETA ILED ACCOUNT OF THE APPELLANT WITH SPECIFIC NAMES OF THE PERSONS FR OM WHOM THE MONEY HAS BEEN RECEIVED ALONG WITH THE DATES. EVEN ON THE EXPENDITURE SIDE THE AMOUNT PAID TO SHRI B.B. PATEL OF RS.6,61,819/- HAS BEEN SPECIFICALLY MENTIONED. THE RE IS SPECIFIC MENTION OF INVESTMENT IN LAND OF RS.20 LAKHS. THER EFORE, THIS LOOSE PAPER IS NOT A DUMB DOCUMENT BUT IS A DETAILED SYST EMATIC ACCOUNT HAVING DETAILS OF RECEIPTS SOURCES OF WHICH CANNOT BE EXPLAINED BY THE APPELLANT EITHER DURING ASSESSMENT PROCEEDINGS, ORIGINAL APPEAL PROCEEDINGS OR DURING SET ASIDE APPEAL PROCE EDINGS. THE FACT THAT APPELLANT IS A PARTNER IN M/S.SHREE CORPO RATION IS ALSO AN ADMITTED FACT. IN VIEW OF THIS, IT IS CLEAR THAT A PPELLANT HAS MADE UNACCOUNTED INVESTMENT IN HIS CAPITAL ACCOUNT IN M/ S.SHREE CORPORATION, THE DETAILS OF WHICH ARE GIVEN IN THE SEIZED LOOSE PAPER. THERE WAS A DIFFERENCE OF RS.24,11,819/- AS PER THE CAPITAL ACCOUNT FILED WITH THE RETURN OF INCOME OF M/S.SHRE E CORPORATION AND THE CAPITAL OF THE APPELLANT AS PER SEIZED PAPE R. AS APPELLANT HAS NOT BEEN ABLE TO EXPLAIN THE DIFFERENCE IN THE CAPITAL ACCOUNT, IT IS HELD THAT AO WAS JUSTIFIED IN MAKING ADDITION OF RS.24,11,819/- AND THIS ADDITION IS CONFIRMED. THI S GROUND OF APPEAL IS DISMISSED. AS PER THE REASONINGS NOTED ABOVE, THE CIT(A) DENI ED RELIEF TO THE ASSESSEE. 5. THE CIT(A) ALSO WHILE ADJUDICATING THE APPEAL O F THE SUBSEQUENT YEAR OF THE ASSESSEE FOR AY 2001-02 NOTICED CERTAIN DISC REPANCIES IN THE ASSESSMENT ORDER OF THE AO IN RELATION TO NON-INCLU SION OF ESCAPED INCOME OF RS.22,50,000/- TOWARDS ADVANCES GIVEN TO ONE M/S.SIDDHARTH INDUSTRIES ON INTEREST IN THE LIGHT OF LOOSE-PAPER FOUND IN THE COURSE OF IT(SS)A NOS. 189 TO 192/AHD/2014 HARSHAD M. SHUKLA VS. ACIT - 11 - SEARCH MARKED ANNEXURE A-4 AT PAGE-28. ENHANCEMEN T NOTICE WAS ACCORDINGLY ISSUED CALLING FOR EXPLANATION FROM THE ASSESSEE IN RESPECT OF THE AFORESAID LOOSE-PAPER. 5.1. THE ASSESSEE WHILE RESPONDING TO THE APPEAL FO R AY 2001-02 RESPONDED TO THE ENHANCEMENT NOTICE RECORDED IN PAR A NO.6 OF THE CIT(A)S ORDER AS UNDER:- 6. THE APPEAL PROCEEDINGS IN THE CASE OF APPELLA NT FOR AY 1999- 2000 AND AY 2001-02 WERE CARRIED OUT SIMULTANEOUSLY . THE FINDINGS GIVEN BY THE AO IN THE ASSESSMENT ORDER OF AY 2001-02 ARE AS BELOW: ANNEXURE A-3 PG. 28 SEIZED FROM THE ASSESSEES PRE MISE IS THE CAPITAL LOAN ACCOUNT OF THE ASSESSEE IN THE BOOKS O F SIDDHARTH INDUSTRIES. AS PER THIS ACCOUNT INITIAL INVESTMENT OF THE ASSESSEE IN APRIL 2000 IS RS.22,50,000/- AND THE INTEREST IS CH ARGED @ 2.5% PER MONTH. THEREFORE, THE INTEREST INCOME FOR THE YEAR WORKS OUT TO RS.7,76,000/- FOR THE AY 2001-02 AND RS.1,53,1 91/- (FOR 2 MONTHS) FOR THE AY 2002-03. AS THE ASSESSEE HAS NO T OFFERED ANY EXPLANATION WRT THE SOURCE AND HAS NOT SHOWN THE IN TEREST INCOME IN HIS RETURNS, BOTH THE AMOUNTS ARE ADDED AS HIS U NDISCLOSED INCOME. IN THE PRESET AY, THEREFORE, AN ADDITION O F RS.30,26,000/- IS MADE TO THE INCOME OF THE ASSESSEE. 6.1. THE RELEVANT PORTION OF THE SUBMISSIONS FURNI SHED BY THE APPELLANT IS REPRODUCED AS UNDER: THE LEARNED ASSESSING OFFICER MADE AN ADDITION OF RS.30,26,000/- FOR THE YEAR UNDER REFERENCE. THE S AID ADDITION IS MADE ON THE BASIS OF THE LOOSE PAPERS FOUND DURING THE COURSE OF IT(SS)A NOS. 189 TO 192/AHD/2014 HARSHAD M. SHUKLA VS. ACIT - 12 - SEARCH. THE LEARNED ASSESSING OFFICER HAS REFERRED TO ANNEXURE A- 3 PAGE 28 OF THE LOOSE PAPERS FOUND DURING THE COUR SE OF SEARCH, COPY OF WHICH IS ENCLOSED HEREWITH. THE LEARNED AS SESSING OFFICER HAS STATED THAT THE APPELLANT WAS A PARTNER IN M/S.SIDDHARTH INDUSTRIES. IN THIS REGARD IT IS SUB MITTED THAT DURING THE COURSE OF SEARCH NO EVIDENCES WAS FOUND TO INDI CATE THAT THE FACT THAT THE APPELLANT WAS PARTNER IN M/S.SIDDHART H INDUSTRIES HENCE THE CONTENTION OF THE ASSESSING OFFICER THAT THE SAID LOOSE PAPERS PERTAINED TO CAPITAL OF THE APPELLANT IN THE BOOKS OF M/S.SIDDHARTH INDUSTRIES IS INCORRECT AND UNJUSTIFI ED. IT MAY SUBMITTED HERE THAT A PERUSAL OF THE LOOSE PAPERS W OULD REVEAL ON THE BOOK OF THE LOOSE PAPERS FOLLOWING NORMS ARE ME NTIONED: SIDDHARTH INDUSTRIES CAPITAL LOAN INT A/C. 45,00,000/ 2 I.E. 2250,000 BALANCE FREEZED @ 2.5% 3.3.99 I.E. 1/4/2000 ONWARDS MONTH PRINCIPAL INTEREST ON MONTH CONSOLIDATED AMT. APRIL, 2000 22,50,000 56250 23,06,250 MAY, 2000 23,06,250 57656 2363906 JUNE, 2000 23,63,906 59,098 24,23,004 JULY, 2000 24,23,004 60575 28,83,579 AUGUST, 2000 24,83,579 62089 25,45,668 SEPTEMBER, 2000 25,45,668 63,642 26,09,310 OCTOBER, 2000 26,09,310 65233 26,74,543 NOVEMBER, 2000 27,41,404 66864 27,41,404 DECEMBER, 2000 27,41,404 68535 28,09,939 JAN-2001 28,09,939 70248 28,80,187 FEB-2001 28,80,187 72005 29,52,192 MARCH-2001 29,52,192 73805 30,25,997 APRIL-2001 30,25,997 75650 31,01,647 MAY - 2001 31,01,647 77,541 31,79,188+2 31,79,190 IT(SS)A NOS. 189 TO 192/AHD/2014 HARSHAD M. SHUKLA VS. ACIT - 13 - THUS THE CONTENTION OF THE ASSESSING OFFICER THE AP PELLANT HAD INVESTED AN AMOUNT OF RS.22,50,000/- ON APRIL,2000 IS INCORRECT AND UNJUSTIFIED. IT MAY BE SUBMITTED HERE THAT THE LOOSE PAPER IS NO THING BUT THE AMOUNT RECEIVABLE OR AMOUNT PAYABLE BY M/S.SIDDHART H INDUSTRIES ON THE LOAN TAKEN BY IT. THERE IS NO EVIDENCE ON ACCOUNT IN THE POSSESSION OF THE DEPARTMENT TO SHOW THAT THE APPEL LANT HAD MADE ADVANCES OF RS.22,50,000/- TO M/S.DIDDHARTH INDUSTR IES. FURTHER THE LEARNED ASSESSING OFFICER HAS ALSO ADDED INTERE ST INCOME AMOUNTING TO RS.7,76,000/- TO THE INCOME OF THE APP ELLANT. IT MAY BE SUBMITTED HERE THAT THE SAID ADDITION IS MERELY ON CONJECTURES AND SURMISES WITHOUT EVIDENCES. IT MAY BE SUBMITTE D HERE THAT NO STATEMENT WAS RECORDED DURING THE COURSE OF SURVEY TO CONFIRM THAT THE APPELLANT HAD GIVEN THE ADVANCES TO M/S.SIDDHAR TH INDUSTRIES OR AN INTEREST ON THE OUTSTANDING BALANCE WAS RECEI VABLE BY HIM AS PER THE STATEMENT. IT WOULD BE PERTINENT TO STATE HERE THAT THE SAID STATEMENT HAVE BEEN PREPARED ON 26.5.2001 AND HENCE IT IS MERELY ON ESTIMATION OF THE AMOUNT PAYABLE BY M/S.SIDDHART H INDUSTRIES NOT TO THE APPELLANT ON AN AMOUNT TAKEN BY IT. IT IS TRI-TRITE LAW THAT NO EVIDENCES REFERRED TO INDICATE THAT THE APPELLAN T HAD MADE INVESTMENT IN M/S.SIDDHARTH INDUSTRIES. FOR THIS PURPOSE RELIANCE IS PLACED ON THE DECISION OF ASHOK KUMAR AGGARWAL 38 TTJ 189, WHEREIN IT WAS HELD THAT SUSPICION THOUGH A GROUND FOR SCRUTINY OF EVIDENCE , CANNOT BE MADE THE FOUNDATION OF A DECISION. CONJECTURES IS NOT A SUBSTITUTE FOR LEGAL PROOF. SUSPICION, HOWEVER STRONG, CANNOT TAKE THE PLACE OF PROOF. THE ITO WOULD NOT BE JUSTIFIED IN DECIDI NG A CASE UPON HIS OWN SUSPICION OR UPON MERE SUPPOSITION AFTER DISCAR DING THE EVIDENCE PRODUCED BY THE ASSESSEE. ONE MUST BE CAR EFUL NOT TO CARRY CAUTION TO AN EXTREME LENGTH AND NOT TO DISCA RD ORAL IT(SS)A NOS. 189 TO 192/AHD/2014 HARSHAD M. SHUKLA VS. ACIT - 14 - EVIDENCE MERELY BECAUSE IT IS ORAL AND UNLESS THE I MPEACHING AND DISCREDITING CIRCUMSTANCES ARE CLEARLY FOUND TO EXI ST. THE GENERAL RULE IS THAT WHENEVER IT IS INTENDED TO IMPEACH THE CREDIT OF A PERSON WHO STATEMENT HAS BEEN RECORDED, HIS ATTENTION MUST BE DRAWN TO THE DISCREDITING FACTS SO THAT HE MAY HAVE AN OPPORTUNITY OF EXPLAINING THEM. IN VIEW OF THE AFORESAID FACT IT IS SUBMITTED THAT THE ADDITION OF RS.30,26,000/- IS MERELY ON CONJECTURES AND SURMISE S AND THEREFORE BE DELETED. COMMENTS ON REMAND REPORT REGARDING CAPITAL ACCOUNT AND INTEREST ACCOUNT IN T HE BOOKS OF SIDDHARTH INDUSTRIES IT IS SUBMITTED THAT THE APPEL LANT IS NEITHER A PARTNER NOR ASSOCIATED IN ANY MANNER WITH SIDDHARTH INDUSTRIES. THE LEARNED ASSESSING OFFICER HAS REFERRED TO QUEST ION NO.59 OF THE STATEMENT OF THE APPELLANT WHEREIN HE HAS ONLY STATED THAT THE SAME PERTAINS TO SIDDHARTH INDUSTRIES. IN THIS REGARD IT IS SUBMITTED THAT SIDDHARTH INDUS TRIES IS NEITHER SAID TO HAVE BEEN A FIRM OF THE APPELLANT NOR THE A PPELLANT IS PARTNER OR ASSOCIATED IN ANY MANNER WITH THE SAID F IRM. FURTHER A COPY OF THE LOOSE PAPER WOULD REVEAL THAT THESE ARE CALCULATION OF THE PRINCIPAL INTEREST FOR THE PERIOD FROM APRIL, 2 000 ONWARDS. A PERUSAL OF THE SAID LOOSE PAPER ALSO REVEAL THAT TH E BALANCE OF RS.22,50,000/- HAS BEEN SET TO BE FREEZED ON 31.03. 1999 . HENCE IT CANNOT BE SAID THAT THE SAID AMOUNT PERTAINS TO THE INVESTMENT MADE BY THE APPELLANT DURING THE YEAR UNDER REFEREN CE. FURTHER A PERUSAL OF THE LOOSE PAPER WOULD ALSO REVEAL THAT T HERE IS NO MENTION OF THE DATE OF PAYMENT OF INTEREST OR RECEI PT OF INTEREST BY THE APPELLANT. FURTHER TERMS USED ARE PRINCIPAL IN TEREST CONSOLIDATED AMOUNT WHICH CANNOT BE SAID TO BE PERT AINING TO IT(SS)A NOS. 189 TO 192/AHD/2014 HARSHAD M. SHUKLA VS. ACIT - 15 - INVESTMENT MADE BY THE APPELLANT IN SIDDHARTH INDUS TRIES. NO IOTA OF EVIDENCE OR ANY OTHER DOCUMENT PERTAINING TO SID DHARTH INDUSTRIES WAS FOUND FROM THE BUSINESS PREMISES OR RESIDENTIAL PREMISES OF THE APPELLANT DURING THE COURSE OF SEAR CH. THE MERE FACT THAT THERE WAS SOME WORKING PERTAINING TO SIDD HARTH INDUSTRIES CANNOT BE MADE A BASIS FOR MAKING ADDITI ON IN THE HANDS OF THE APPELLANT. DURING THE REMAND PROCEEDI NGS THE APPELLANT HAD CATEGORICALLY SUBMITTED THAT HE WAS N OT CONNECTED WITH SIDDHARTH INDUSTRIES NOR HE WAS PARTNER IN SID DHARTH INDUSTRIES. REGARDING PRODUCTION OF EVIDENCE OR EXPLANATION OF ENTRIES PERTAINING TO THE SAID LOOSE PAPER THE APPELLANT HA D SUBMITTED THAT THESE PERTAINING SOME WORKING OF SOME INTEREST CALC ULATION ON THE AMOUNT BORROWED BY SIDDHARTH INDUSTRIES WITH WHICH HE WAS NEVER ASSOCIATED. FURTHER THE LEARNED ASSESSING OFFICER DURING THE AS SESSMENT PROCEEDINGS AND REMAND PROCEEDING HAD NOT BROUGHT O N RECORD ANY IOTA OF EVIDENCE (EXCEPT THE LOOSE PAPER FOUND DURING THE COURSE OF SEARCH ) THAT M/S.SIDDHARTH INDUSTRIES WAS CONCERN OF THE APPELLANT OR THE APPELLANT HAD MADE INVESTMENT IN T HE SAID CONCERN. 5.2. THE CIT(A) DID NOT FIND MERIT IN THE RESPONSE OF THE ASSESSEE ON PROPOSED ADDITION OF RS.22,50,000/-. THE CIT(A) AC CORDINGLY WHILE ENHANCING THE ASSESSED INCOME BY AN AMOUNT OF RS.22 ,50,000/- FOR AY 1999-2000 OBSERVED AS UNDER:- 6.2. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MADE BY THE APPELLANT AND HAVE GONE THROUGH THE ASSESSMENT ORDERS AS WELL. IT(SS)A NOS. 189 TO 192/AHD/2014 HARSHAD M. SHUKLA VS. ACIT - 16 - 6.2.1. THE FIRST CONTENTION OF THE APPELLANT THAT C ONTENTS OF THIS PAPER DO NOT BELONG TO HIM CANNOT BE ACCEPTED. AS PER SE CTION 292C OF THE ACT, THE PRESUMPTION IS THAT THE LOOSE PAPER FOUND IN POSSESSION OR CONTROL OF THE ASSESSEE BELONGS TO HIM/HER AND THE CONTENTS RECORDED THEREIN ARE CORRECT. THE ONUS IS ON THE ASSESSEE T O EXPLAIN THE CONTENTS THEREIN. HERE AGAIN WHAT HAS BEEN SEIZED IS A MONT HWISE DETAILED SYSTEMATIC CAPITAL ACCOUNT GIVING DETAILS OF MONTHL Y INTEREST AND THE CLOSING BALANCE. IF APPELLANT HAD NO CONNECTION WI TH SIDDHARTH INDUSTRIES THERE WAS NO REASON FOR SUCH A KIND OF D ETAILED CAPITAL ACCOUNT TO BE FOUND FROM THE PREMISES OF THE APPELL ANT. THE APPELLANT HAS NOT BEEN ABLE TO PROVE THAT THIS ACCOUNT BELONG S TO SOME OTHER PERSON. AGAIN, THE RELIANCE OF THE APPELLANT ON TH E JUDGEMENT IN THE CASE OF SHRI ASHOK KUMAR AGRAWAL 38 TTJ 189 IS MISP LACED AS IN THE CASE OF THE APPELLANT WHAT HAS BEEN FOUND IS A DETA ILED ACCOUNT OF THE APPELLANT WITH EVEN DETAILS OF MONTHLY INTEREST EAR NED BY THE APPELLANT. IN VIEW OF THIS, IT IS CLEAR THAT APPELLANT HAS EAR NED TOTAL INTEREST OF RS.7,76,000/- DURING P.Y. 2000-01 WHICH IS REQUIRED TO BE TREATED AS INCOME OF THE APPELLANT. THEREFORE, THE AO WAS JUS TIFIED IN MAKING ADDITION OF RS.7,76,000/- AND THIS PART OF THE ADDI TION IS CONFIRMED. 6.2.2. THE SECOND CONTENTION OF THE APPELLANT IS TH AT AS PER THE SEIZED PAPER THERE WAS A BALANCE OF RS.22,50,000/- WHICH W AS FREEZED ON 31- 03-1999. IT IS, THEREFORE, CONTENDED THAT THIS AMO UNT OF RS.22,50,000/- CANNOT BE ADDED TO THE INCOME OF THE PY 2000-01. T HIS ISSUE WAS DISCUSSED WITH THE AUTHORIZED REPRESENTATIVE OF THE APPELLANT DURING APPEAL PROCEEDINGS. THIS CONTENTION OF THE APPELLA NT IS FOUND TO BE CORRECT AS IT IS WRITTEN ON THE SEIZED PAPER THAT T HIS AMOUNT OF RS.22,50,000/- WAS FREEZED ON 31-03-1999. THEREFOR E, THIS AMOUNT CANNOT BE ADDED AS INCOME OF THE APPELLANT FOR A LA TER YEAR I.E. AY 2001-02. ACCORDINGLY, VIDE ORDER SHEET NOTING DTD. 24-01-2014, THE AR OF THE APPELLANT WAS GIVEN AN ENHANCEMENT SHOW CAUS E FOR ENHANCING THE INCOME OF THE APPELLANT OF AY 1999-2000 BY RS.2 2,50,000/- AS THIS AMOUNT WAS REQUIRED TO BE ADDED IN AY 1999-2000. T HE AR OF THE APPELLANT DID NOT ACCEPT THE ENHANCEMENT SHOW CAUSE BUT AT THE SAME TIME SUBMITTED THAT HE DID NOT WANT TO FILE ANY FU RTHER SUBMISSION IN IT(SS)A NOS. 189 TO 192/AHD/2014 HARSHAD M. SHUKLA VS. ACIT - 17 - THIS REGARD EXCEPT THE SUBMISSIONS ALREADY FILED FO R BOTH THE RELEVANT YEARS. THEREFORE, IN VIEW OF ABOVE FACTS, IT IS HE LD THAT ADDITION OF RS.22,50,000/- IS TO BE MADE IN THE CASE OF THE APP ELLANT IN AY 1999- 2000 AND ACCORDINGLY THE INCOME OF THIS AY 1999-200 0 IS ENHANCED BY RS.22,50,000/-. 6. AGGRIEVED BY THE ORDER OF THE CIT(A) DISMISSING THE APPEAL OF THE ASSESSEE AND FURTHER ENHANCING THE ASSESSMENT ORDE R IN THE SECOND ROUND OF THE PROCEEDINGS, THE ASSESSEE ONCE AGAINST KNOCK ED THE DOOR OF THE ITAT FOR REDRESSAL OF GRIEVANCES. 7. THE LD.AR FOR THE ASSESSEE MR. M.K. PATEL, BROAD LY REITERATED VARIOUS SUBMISSIONS MADE BEFORE THE CIT(A) AND SUBM ITTED THAT THE CIT(A) HAS WRONGLY APPRECIATED THE FACTUAL POSITION . THE LD.AR IN FURTHERANCE SUBMITTED WITH REFERENCE TO GROUND NO.1 OF THE APPEAL MEMO THAT THE ADDITION OF RS.24,11,829/- CONFIRMED BY TH E CIT(A) IS NOT SYNC WITH THE FACTUAL POSITION. IT WAS CONTENDED THAT I N THE STATEMENT RECORDED IN THE COURSE OF SEARCH, THE ASSESSEE HAS ASSERTED THAT THE BALANCE FOUND IN THE LOOSE-PAPER (ANNEXURE A-4 PAGE 28) REPRESENTED THE CLOSING BALANCES IN THE VARIOUS FIRMS IN THE GROUP AND THER EFORE NO ADMISSION WAS MADE REGARDING UNEXPLAINED INVESTMENT. IT WAS FURT HER EXHORTED BY THE LD.AR THAT THE LOOSE-PAPER FOUND WAS TYPED AND IS N OT IN THE HANDS OF THE ASSESSEE OR ANY OF THE PARTNERS OF THE SHREE CORPO RATION AND THUS CANNOT BE RELIED UPON. THE LD.AR NEXT CONTENDED THAT THE IMPUGNED LOOSE- PAPER PERTAINS TO RECEIPT DETAILS UPTO 31/03/1999 . THUS, IT CANNOT BE IT(SS)A NOS. 189 TO 192/AHD/2014 HARSHAD M. SHUKLA VS. ACIT - 18 - PRESUMED THAT THE INVESTMENT TOWARDS LAND AND EXPE NSES ALLEGEDLY INCURRED ON BEHALF OF THE PARTNERSHIP-FIRM AS NOTED IN THE LOOSE-PAPER TO BE RELATABLE TO CURRENT FINANCIAL YEAR (FY) 1998-99 . THIS IS MORE SO BECAUSE SHREE CORPORATION WAS IN EXISTENCE PRIOR TO FY 1998-99 AS CAN BE SEEN FROM THE OPENING BALANCE REFLECTED AT RS.68 ,157/- AGAINST THE CAPITAL ACCOUNT OF THE ASSESSEE. THE LD.AR EMPHASI ZED THAT THE NOMENCLATURE OF THE LOOSE-PAPER NOWHERE INDICATES T HAT ALL THE TRANSACTIONS AS MENTIONED THEREIN EXCLUSIVELY PERTA IN TO FY 1998-99 ALONE RELEVANT TO AY 1999-2000. HE THEREFORE SUBMI TTED THAT THE LOOSE- PAPER FOUND IS VAGUE AND SIMULTANEOUSLY, DO NOT BEL ONG TO THE ASSESSEE. IT WAS THUS PLEADED THAT THE ADDITION MADE TOWARDS UNACCOUNTED INVESTMENT BASED ON VAGUE NOTINGS IN AN UNIDENTIFIE D LOOSE-PAPER IS DEVOID OF LEGAL FOUNDATION AND THEREFORE ADDITIONS MADE OF RS.24,11,819/- DESERVES TO BE STRUCK DOWN AS PER GR OUND NO.1 OF THE APPEAL MEMO. 8. WITH REFERENCE TO GROUND NO.2 OF THE APPEAL MEMO , THE LD.AR ONCE AGAIN RELIED UPON THE SUBMISSIONS MADE BEFORE THE CIT(A) AND SUBMITTED THAT THE CONCLUSION ARRIVED AT BY THE CIT (A) IS MARRED BY CONJECTURES AND SURMISES. THE CONCLUSION THUS DRAW N IS NOT SUSTAINABLE IN LAW. THE LD.AR SUBMITTED THAT THE BASIS FOR ENH ANCEMENT BY THE CIT(A) IS ANNEXURE A-3 AT PAGE-28 IN THE ORDER OF T HE CIT(A) WHICH IS ALLEGEDLY CAPITAL LOAN ACCOUNT OF THE ASSESSEE IN T HE BOOKS OF IT(SS)A NOS. 189 TO 192/AHD/2014 HARSHAD M. SHUKLA VS. ACIT - 19 - M/S.SIDDHARTH INDUSTRIES. IT WAS CONTENDED BY THE LD.AR THAT OBSERVATION OF THE CIT(A) THAT THE ASSESSEE IS A P ARTNER IN THE AFORESAID M/S.SIDDHARTH INDUSTRIES IS WITHOUT ANY TANGIBLE BA SIS. NO EVIDENCE WAS FOUND IN THE SEARCH TO DEMONSTRATE THE AFORESAID OB SERVATION. IT WAS FURTHER SUBMITTED THAT READING OF LOOSE-PAPER DOES NOT INCRIMINATE THE ASSESSEE IN ANY MANNER. THERE IS NO REVELATION IN THE LOOSE-PAPER TO THE EFFECT THAT IT WAS ASSESSEE WHO MADE PURPORTED ADVA NCES OF RS.22,50,000/- TO M;/S.SIDDHARTH INDUSTRIES. THE L OOSE-PAPER MERELY REVEALS THAT CERTAIN AMOUNT RECEIVABLE OR PAYABLE B Y M/S.SIDDHARTH INDUSTRIES ON LOAN TAKEN BY IT. THE BASIS FOR PRO VING NEXUS OF THE AFORESAID LOOSE-PAPER VIS--VIS THE ASSESSEE IS ABS ENT. IN CONTINUATION, IT WAS FURTHER CONTENDED BY THE LD.AR THAT THE AO FUR THER COMMITTED ERROR IN MAKING THE ADDITION TOWARDS INTEREST INCOME AMOU NTING TO RS.7,76,000/- IN THE HANDS OF THE ASSESSEE FOR SUBS EQUENT AY 2001-02 ALSO IN APPEAL BY PLACING RELIANCE ON SUCH DUMB-DO CUMENT BY INDULGING IN CONJECTURES AND SURMISES. IT WAS POINTED OUT TH AT NO QUESTION WAS ASKED IN THE COURSE OF SURVEY TO SEEK CLARIFICATION ON THE LOOSE-PAPER AS TO WHETHER THE ASSESSEE HAD GIVEN THE ALLEGED ADVANCES TO M/S.SIDDHARTH INDUSTRIES ON INTEREST ETC. IT WAS FURTHER SUBMITT ED THAT THE LOOSE-PAPER WAS PURPORTEDLY PREPARED ON 26/05/2001 AND HENCE I T IS MERELY ON ESTIMATION OF THE AMOUNT PAYABLE BY M/S.SIDDHARTH I NDUSTRIES NOT TO ASSESSEE ON THE AMOUNT TAKEN BY IT. THE LD.AR ALSO REFERRED TO THE COMMENTS MADE BEFORE THE CIT(A) IN RESPONSE TO THE REMAND REPORT OF IT(SS)A NOS. 189 TO 192/AHD/2014 HARSHAD M. SHUKLA VS. ACIT - 20 - THE AO AND REITERATED THAT THE ASSESSEE IS NEITHER A PARTNER NOR ASSOCIATED IN ANY MANNER WITH M/S.SIDDHARTH INDUSTRIES. IN ES SENCE, THE LD.AR CONTENDED THAT THE ACTION OF THE CIT(A) IN MAKING E NHANCEMENT OF RS.22,50,000/- IN AY 1999-2000 AND ESTIMATION OF IN TEREST INCOME THEREON IN SUBSEQUENT YEARS AS PER APPEAL MEMO BASE D ON A NON-SPEAKING LOOSE-PAPER IS DEVOID OF ANY SOUND BASIS AND THEREF ORE REQUIRES TO BE CANCELLED IN TERMS OF GROUND NO.2 OF THE APPEAL MEM O. 9. THE LD.DR MS.VIBHA BHALLA , ON THE OTHER HAND , PLACED EXTENSIVE RELIANCE ON THE ORDER OF THE CIT(A). THE LD.DR POI NTED OUT THAT THE ASSESSEE HAS NOT AVAILED THE OPPORTUNITIES GIVEN TO HIM BEFORE THE AO AND THE CIT(A) IN THE FIRST ROUND OF PROCEEDINGS. IN THE SECOND ROUND OF PROCEEDINGS, THE ASSESSEE HAS MERELY DENIED THE COR RECTNESS OF THE LOOSE- PAPERS FOUND FROM THE PREMISES OF THE ASSESSEE OR I TS PARTNERSHIP FIRMS. IT WAS CONTENDED THAT THE OBLIGATION RESTS UPON THE ASSESSEE TO DISCHARGE ONUS WHICH LAY UPON IT ON THE PAPERS FOUND AND SEIZ ED IN THE COURSE OF SEARCH/SURVEY PROCEEDINGS. THE PRESUMPTION AVAILAB LE TO THE REVENUE UNDER SECTION 292C WAS NOT BEEN REBUTTED BY THE ASS ESSEE AT ALL. THE ASSESSEE HAS REMAINED INDIFFERENT TO SUCH ONUS BY NOT MAKING APPEARANCE BEFORE THE AUTHORITY OF THE AO AND THE C IT(A) AND THUS THE ORDER OF THE CIT(A) BASED ON MATERIAL AVAILABLE ON RECORD IS REASONABLE AND JUSTIFIED HAVING REGARD TO THE TOTALITY OF THE CIRCUMSTANCES OF THE IT(SS)A NOS. 189 TO 192/AHD/2014 HARSHAD M. SHUKLA VS. ACIT - 21 - CASE. THE LD.DR ACCORDINGLY PLEADED THAT NO INTERF ERENCE WITH THE ORDER OF THE CIT(A) IS REQUIRED. 10. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS AND THE ORDERS OF THE AUTHORITIES BELOW AND MATERIAL AND DOCUMENTS RELIED UPON BY THE ASSESSEE AT THE TIME OF HEARING. 10.1. IN THE INSTANT CASE, CERTAIN ADDITIONS HAVE B EEN CARRIED OUT BY THE AO BASED ON LOOSE-PAPER FOUND AND SEIZED IN THE COU RSE OF SEARCH PROCEEDINGS ON SOME KABHAI CHAUHAN GROUP AND SURVEY PROCEEDINGS ON THE ASSESSEE. NOTICE UNDER SECTION 153C WAS SERVED ON THE ASSESSEE SEEKING TO ASSESS TRUE INCOME OF THE ASSESSEE. THE ASSESSEE DEFAULTED IN FILING THE ORIGINAL RETURN AND ALSO RETURN IN RESPO NSE TO AFORESAID NOTICE UNDER SECTION 153C OF THE ACT. THE ASSESSEE ALSO D ID NOT COME FORWARD BEFORE THE AO AS WELL AS BEFORE THE CIT(A) IN RESPO NSE TO SCN ISSUED TO HIM. THE ASSESSMENT WAS ACCORDINGLY FRAMED EX-PARTE UNDER SECTION 144 OF THE ACT AND ADDITION OF RS.24,11,819/- WAS MADE BY THE AO ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE PARTNERSHI P-FIRM NAMELY, M/S.SHREE CORPORATION. THE CIT(A) IN FIRST APPEAL SUSTAINED THE AFORESAID ADDITION AND ALSO ENHANCED IT FURTHER BY ANOTHER AMOUNT OF RS.22,50,000/- FOR AY 1999-2000 BY TAKING COGNIZANC E OF ANOTHER LOOSE- PAPER FOUND IN THE SEARCH AS ELABORATED IN THE PREC EDING PARAS. THE ASSESSEE HAS ASSAILED THE AFORESAID ACTION OF THE C IT(A) IN SUSTAINING THE IT(SS)A NOS. 189 TO 192/AHD/2014 HARSHAD M. SHUKLA VS. ACIT - 22 - ADDITION AND ENHANCEMENT THEREON. THE ASSESSEE IS AGGRIEVED BY THE ORDER OF THE CIT(A) BROADLY ON FOLLOWING TWO COUNT S:- (I) CONFIRMATION OF ADDITION TOWARDS UNEXPLAINED IN VESTMENT OF RS.24,11,819/- IN M/S.SHREE CORPORATION. (II) ENHANCEMENT TOWARDS UNEXPLAINED INVESTMENT OF RS.22,50,000/- IN M/S.SIDDHARTH INDUSTRIES. 10.2. WITH REFERENCE TO FIRST ADDITION TOWARDS UNEX PLAINED INVESTMENT IN M/S.SHREE CORPORATION, IT TRANSPIRES THAT ASSESSEE IS A PARTNER IN THE AFORESAID FIRM. A LOOSE-PAPER WAS FOUND, CONTENTS WHEREOF ARE REPRODUCED IN THE PRECEDING PARAS WHICH SEEKS TO UN RAVEL ACCOUNT OF THE ASSESSEE (HARSHAD M.SHUKLA) QUA THE PARTNERSHIP-FIR M. IT IS THE CASE OF THE AO THAT ABBREVIATED EXPRESSION HMS DENOTES TH E NAME OF THE ASSESSEE. SPECIFIC ENTRIES HAVE BEEN FOUND IN THE LOOSE-PAPER WITH DATE AND NAME OF THE PERSON INVOLVED ETC. AT SOME OCCASI ONS. THE ULTIMATE PAYMENT OF RS.24,11,819/- REPRESENTS EXCESS PAYMENT BY THE ASSESSEE TO THE PARTNERSHIP-FIRM. IT IS ADMITTED POSITION THAT THE AFORESAID LOOSE- PAPER WAS FOUND FROM THE PREMISES OF THE SEARCHED P ERSONS THE TRANSACTION NOTED IN THE LOOSE-PAPER ARE CONNECTED TO THE ASSESSEE AND THEREFORE PROVISIONS OF SECTION 153C OF THE ACT WAS INVOKED. THE ASSESSEE HAS NOT CHALLENGED THE JURISDICTION OF THE AO UNDER SECTION 153C OF THE ACT. THUS, IT CAN BE SAFELY CAN BE INF ERRED THAT THE CONTENTS OF THE LOOSE-PAPER WERE CONNECTED TO THE ASSESSEE. THE CONTENTS OF LOOSE PAPERS WERE CONFRONTED TO THE ASSESSEE BEFORE AO TI ME AND AGAIN AND IT(SS)A NOS. 189 TO 192/AHD/2014 HARSHAD M. SHUKLA VS. ACIT - 23 - THEREAFTER BEFORE THE CIT(A). THE ASSESSEE NEITHER FILED THE RETURN OF INCOME IN RESPONSE TO NOTICE UNDER SECTION 153C OF THE ACT NOR RESPONDED TO THE STATUTORY NOTICES ISSUED TO THE CO MPLETION OF THE ASSESSMENT. THE ASSESSEE CONTINUED ITS APATHY EV EN IN THE FIRST ROUND OF PROCEEDING BEFORE CIT(A). IT IS ONLY IN THE SECOND ROUND OF PROCEEDINGS, AFTER THE MATTER WAS SET ASIDE B Y THE ITAT THAT TH E ASSESSEE HAS COME OUT WITH CERTAIN SUBMISSIONS AS NOTED IN THE ORDER OF T HE CIT(A) AS REPRODUCED IN THE EARLIER PARAS. ON PERUSAL OF THE SUBMISSIONS, IT IS CLEARLY REFLECTED THAT THE ASSESSEE IS IN MERE DENI AL MODE WITHOUT BRINGING FORTH ANY CORROBORATIVE MATERIAL ON CONVIN CING EXPLANATION IS REBUTTAL. IT IS ADMITTED POSITION THAT THE ASSESSE E IS PARTNER OF THE PARTNERSHIP-FIRM M/S.SHREE CORPORATION. THEREFORE HE HOLDS MUTUAL AGENCY ON BEHALF OF THE FIRM. HAVING SQUANDERED AL L THE OPPORTUNITIES MADE AVAILABLE TO HIM BEFORE THE LOWER AUTHORITIES AT INITIAL STAGES, IT HAS NOW COME UP WITH THE EXPLANATION THAT THE LOOSE-PAP ER IS VAGUE AND NON- DESCRIPT AND WITH CONTENTION THAT THE TRANSACTIONS ARE SHOWN TO BE UPTO 31/03/2009 WHICH MAY ALSO MEAN THAT THE TRANSACTION RELATES TO EARLIER YEAR ALSO. WE ARE NOT IMPRESSED BY SUCH LINE OF AR GUMENT. THE ASSESSEE APPEARS TO FIRST DENY THE LOOSE-PAPER ITSELF AS NOT WRITTEN BY HIM OR BY ANY OTHER PARTNER BUT IS A EXTRANEOUS PAPER AND TH EN ALSO SEEKS TO QUESTION THE PERIOD OF TRANSACTION. WE NOTE THAT S OME TRANSACTIONS ON THE TOP OF THE LOOSE-PAPER RELATES TO JANYARY-1999 AND MARCH-1999. IT WOULD ORDINARILY FOLLOW THAT THE OTHER TRANSACTIONS ARE A LSO OF ABOUT DATE IN NEAR IT(SS)A NOS. 189 TO 192/AHD/2014 HARSHAD M. SHUKLA VS. ACIT - 24 - VICINITY. IT WAS FOR THE ASSESSEE TO EXPLAIN THE CAUSE FOR MAKING SUCH PAPER TOGETHER WITH NATURE OF TRANSACTIONS. THE CO NTENTS OF LOOSE-PAPER IS MYSTIFYING. IN OUR VIEW, THE CIT(A) HAS APPRECIATED THE ENTIRETY OF THE MATTER IN CORRECT PERSPECTIVE. IN OUR VIEW, THE AS SESSEE HAS TOTALLY FAILED TO DISCHARGE THE ONUS WHICH LAY UPON HIM. THE TANG IBLE PAPER WAS FOUND SHOWING UNRECORDED TRANSACTIONS WITH THE PARTNERSH IP-FIRM TO WHICH HE HOLDS MUTUAL AGENCY. THE LOOSE-PAPER FOUND IN THE UNPRECEDENTED ACTION OF THE DEPARTMENT LEAVES NO SCOPE FOR DIFFERENT INT ERPRETATION SOUGHT TO BE PROPOUNDED ON BEHALF OF THE ASSESSEE. IN THE AB SENCE OF ANY CONCRETE REBUTTAL, WE DO NOT FIND ANY SUBSTANCE IN THE PLEA RAISED BY THE ASSESSEE. ACCORDINGLY GROUND NO.1 OF THE APPEAL OF THE ASSESS EE IS DISMISSED. 11. WE SHALL NOW ADVERT TO GROUND NO.2 OF THE APPEA L OF THE ASSESSEE. THE GROUND NO.2 OF THE APPEAL OF THE ASSESSEE CONCE RNS ENHANCEMENT OF UNDISCLOSED INCOME BY RS.22,50,000/- ON ACCOUNT OF ALLEGED UNDISCLOSED INVESTMENT IN M/S.SIDDHARTH INDUSTRIES. AS NOTED A BOVE, THE GENESIS OF ENHANCEMENT IS LOOSE-PAPER (ANNEXURE A-3 PG28) SEIZ ED FROM THE PREMISES OF THE ASSESSEE. AFORESAID LOOSE-PAPER FO UND IS HANDWRITTEN TITLED SIDDHARTH INDUSTRIES CAPITAL LOAN AND INTER EST ACCOUNT. A PERUSAL OF THE LOOSE-PAPER AS PLACED IN THE PAPER-BOOK INDI CATES THAT INTEREST HAS BEEN CALCULATED ON MONTHLY BASIS ON A SUM OF RS.22, 50,000/- FROM 01/04/2000 ONWARDS WHEREAS ORIGINAL AMOUNT WAS SHOW N TO BE RS.45 LACS, 50% THEREOF HAS BEEN STATED TO BE BALANCE FR EED ON 31/03/1999. IT(SS)A NOS. 189 TO 192/AHD/2014 HARSHAD M. SHUKLA VS. ACIT - 25 - THE CIT(A) TOOK A VIEW THAT THE AMOUNT FREEZED QUAN TIFIED AT RS.22,50,000/- RELATES TO AY 1999-2000 WHICH REMAIN S UNDISCLOSED AND HAS EVENTUALLY ESCAPED ASSESSMENT OF TRUE INCOME IN SECTION 153C PROCEEDINGS. WE TAKE NOTE OF THE ALLEGATION BY THE CIT(A) THAT ASSESSEE HAS NOT OFFERED ANY EXPLANATION WITH RESPECT TO THE SOURCE OF THE AFORESAID AMOUNT AND HAS NOT SHOWN INTEREST INCOME THEREON IN HIS RETURN OF INCOME. IT IS THE CASE OF THE CIT(A) THAT THE A FORESAID AMOUNT OF RS.22,50,000/- FREEZED AS PER LOOSE-PAPER PERTAININ G TO AY 1999-2000 REPRESENTS CAPITAL LOAN GIVEN BY THE ASSESSEE TO M/ S. SIDDHARTH INDUSTRIES. IN REBUTTAL, THE ASSESSEE CONTENDS THAT THERE IS NO MATERIAL AVAILABLE ON RECORD THAT HE WAS PARTNER IN M/S.SIDDHARTH INDUSTR IES. THE BOOKS OF ACCOUNTS OF M/S. SIDDHARTH INDUSTRIES IS ALSO NOT A VAILABLE. THE ASSESSEE HAS DENIED TO HAVE GIVEN SUCH ADVANCES TO SIDDHARTH INDUSTRIES AS ALLEGED. IT WAS CONTENDED THAT NO PROOF OF INVESTM ENT HAS BEEN BROUGHT ON RECORD BY THE CIT(A). NO QUERRY HAS BEEN RECORD ED IN THE SURVEY PROCEEDINGS ON THE POINT IN ISSUE. IT IS NEXT CONT ENTION OF THE ASSESSEE THAT MERE FACT OF SOME WORKING PERTAINING TO SIDDHA RTH INDUSTRIES FOUND CANNOT BE MADE A BASIS FOR MAKING AN ADDITION IN TH E HANDS OF THE ASSESSEE. IT IS THE FURTHER CONTENTION OF THE ASSE SSEE THAT HE IS NEITHER CONNECTED WITH SIDDHARTH INDUSTRIES NOR IS A PARTNE R THEREIN. IT(SS)A NOS. 189 TO 192/AHD/2014 HARSHAD M. SHUKLA VS. ACIT - 26 - 12. WE HAVE CAREFULLY WEIGHED THE ISSUE. ADMITTEDL Y, THE LOOSE-PAPER WAS FOUND FROM THE PREMISES OF THE ASSESSEE. THE L OOSE-PAPER IS HAND- WRITTEN AND EXPLICIT IN SHOWING MONTHLY PRINCIPAL A MOUNT AND ACCUMULATED INTEREST THEREON ADDRESSED TO ONE SIDD HARTH INDUSTRIES. IN TERMS OF SECTION 292C, WHEN A DOCUMENT, LOOSE-PAPER , DIARY, ETC. ARE FOUND IN THE POSSESSION OF A PERSON, STATUTORY PRES UMPTION OPERATES AGAINST THE ASSESSEE. IT IS FOR THE ASSESSEE TO E XPLAIN THE CONTENTS NOTED THEREIN. THE ASSESSEE HAS NOT COME FORWARD TO EXPL AIN THE PURPORT OF SUCH DOCUMENT FOUND IN HIS PREMISES. HE HAS MERELY DENIED THAT HE IS NOT A PARTNER OR CONNECTED PERSON. HE HAS FAILED T O EXPLAIN AT ANY STAGE BEFORE THE AO OR BEFORE THE CIT(A) AS TO WHAT THIS LOOSE-PAPER STANDS FOR. THE WHEREABOUTS OF SIDDHARTH INDUSTRIES WERE ALSO NOT POINTED OUT. WE TAKE NOTE OF THE FACT WITH DISMAY THAT THE ASSES SEE HAS REMAINED DEFIANT TO THE STATUTORY NOTICES ISSUED BY THE AO C ONCERNING THE AFORESAID LOOSE-PAPER IN AY 2001-02 AND THE CIT(A) AS WELL IN THE FIRST ROUND OF PROCEEDINGS. THE INVALUABLE TIME FOR MAKING ENQUIR Y, IF ANY, WAS THEREFORE LOST. THE ASSESSEE HAS SOUGHT TO SHIFT ONUS ON REVENUE WHICH PRIMARILY LAID UPON IT. TO REITERATE, THE P RIMARY ONUS TO EXPLAIN THE CONTENTS OF LOOSE-PAPER WAS ON THE ASSESSEE FOR WHICH THE OPPORTUNITY WAS MADE AVAILABLE IN THE ASSESSMENT PROCEEDINGS AS WELL AS PROCEEDINGS BEFORE THE CIT(A). THE LOOSE-PAPER IS FAIRLY DETAI LED ONE SHOWING ASSERTIONS TOWARDS AMOUNT, OUTSTANDING AND INTEREST MONTH-WISE THEREON. ONE CANNOT FATHOM THAT SUCH DOCUMENTS ARE PREPARED AND RETAINED IN IT(SS)A NOS. 189 TO 192/AHD/2014 HARSHAD M. SHUKLA VS. ACIT - 27 - VACUUM. IN OUR VIEW, THE CIT(A) WAS JUSTIFIED IN D RAWING ADVERSE INFERENCE AGAINST THE ASSESSEE IN THE ABENCE OF ANY EXPLANATION IN THIS REGARD. THE ONLY EXPLANATION THAT THE ASSESSEE IS NOT A PARTNER IN M/S.SIDDHARTH INDUSTRIES IS NOT BY ITSELF SUFFICIEN T. THE ONUS WAS ON THE ASSESSEE TO REBUT THE CONTENTS OF THE LOOSE-PAPER A CTUALLY FOUND IN THE PREMISES OF THE ASSESSEE BY BRINGING TO THE NOTICE OF THE REVENEU CONCERNING THE PARTY NAMELY M/S.SIDDHARTH INDUSTRI ES. IN THE ABSENCE OF ONUS HAVING BEEN DISCHARGED BY THE ASSESSEE, WE INC LINED TO ACCEPT THE ENHANCEMENT MADE BY THE CIT(A) IN THIS REGARD. A S A RESULT, GROUND NO.2 OF THE APPEAL OF THE ASSESSEE IS DISMISSED. 13. IN THE RESULT, APPEAL OF THE ASSESSEE IN IT(SS) A NO.189/AHD/2014 FOR AY 1999-2000 IS DISMISSED. IT(SS)A NO.190/AHD/2014 FOR AY 2001-02 ASSESSEES APPEAL 14. THE GROUND OF APPEAL RAISED BY THE ASSESSE E READS AS UNDER:- 1. THE LEARNED CIT(APPEALS) ERRED IN CONFIRMING AD DITION OF RS.7,76,000/- BEING ALLEGED UNEXPLAINED INTEREST RE CEIVED BY THE APPELLANT DURING THE YEAR ON ACCOUNT OF ALLEGED UNE XPLAINED INVESTMENT MADE IN SIDDHARTH INDUSTRIES IN WHICH TH E APPELLANT IS NEITHER A PARTNER NOR ASSOCIATED IN ANY MANNER. IT(SS)A NOS. 189 TO 192/AHD/2014 HARSHAD M. SHUKLA VS. ACIT - 28 - 15. THE SOLITARY GROUND IS TOWARDS ADDITION OF RS.7 ,76,000/- ON ACCOUNT OF INTEREST INCOME ARISING FROM UNEXPLAINED INVESTMENT MADE IN M/S.SIDDHARTH INDUSTRIES. 16. IN VIEW OF OUR FINDINGS WITH REFERENCE TO GROUN D NO.2 OF THE APPEAL OF THE ASSESSEE IN IT(SS)A NO.89/AHD/2014 FO R AY 1999-2000, THE IMPUGNED INTEREST INCOME ON UNEXPLAINED INVESTM ENT IS ALSO REQUIRED TO BE UPHELD. 17. IN THE RESULT, APPEAL OF THE ASSESSEE IN IT(SS) A NO.190/AHD/2014 FOR AY 2001-02 IS DISMISSED. IT(SS)A NO.191/AHD/2014 FOR AY 2002-03 ASSESSEES APPEAL 18. THE GROUND OF APPEAL RAISED BY THE ASSESSEE REA DS AS UNDER:- 1. THE LEARNED CIT(APPEALS) ERRED IN CONFIRMING ADDIT ION OF RS.1,53,191/- BEING ALLEGED INTEREST RECEIVED BY YO UR APPELLANT FROM ALLEGED INVESTMENT MADE IN SIDDHARTH INDUSTRIE S IN WHICH NEITHER THE APPELLANT IS PARTNER NOR ASSOCIATED IN ANY MANNER, MERELY BASED ON LOOSE PAPER FOUND DURING THE COURSE OF SURVEY AND FURTHER ERRED IN CONFIRMING ADDITION OF RS.1,53 ,191/-. 20. THE ISSUE INVOLVED IS IDENTICAL TO IT(SS)A NO.1 90/AHD/2014 FOR AY 2001-02. FOR THE PARITY OF REASONING, GROUND RA ISED BY THE ASSESSEE IS REJECTED AND THE APPEAL OF THE ASSESSEE IS DISMI SSED. 21. IN THE RESULT, APPEAL OF THE ASSESSEE IN IT(SS) A NO.191/AHD/2014 FOR AY 2002-03 IS DISMISSED. IT(SS)A NOS. 189 TO 192/AHD/2014 HARSHAD M. SHUKLA VS. ACIT - 29 - IT(SS)A NO.192/AHD/2014 FOR AY 2004-05 ASSESSEE S APPEAL 22. THIS APPEAL EMANATES FROM THE ORDER OF THE COMM ISSIONER OF INCOME TAX (APPEALS)-IV, AHMEDABAD [CIT(A) IN SHORT ] DATED 27/01/2014 PASSED FOR AY 2004-05. 23. THE ASSESSEE HAS RAISED THE FOLLOWING GROUND OF APPEAL:- 1. THE LEARNED CIT(APPEALS) ERRED IN CONFIRMING ADDIT ION OF RS.2,00,000/- BEING ALLEGED ADDITION TO CAPITAL ACC OUNT IN SHREE CORPORATION AND FURTHER ERRED IN ADDING THE S AME OF RS.2,00,000/- AS ALLEGED UNEXPLAINED INVESTMENT BY THE APPELLANT IN SHREE CORPORATION. 24. THE AO MADE AN ADDITION OF RS.2 LACS IN THE HAN DS OF THE ASSESSEE ON ACCOUNT OF INCREASE IN THE CAPITAL ACCOUNT OF M/ S.SHREE CORPORATION THE SOURCE OF WHICH REMAINED UNEXPLAINED. THE CIT (A) JUSTIFIED THE ADDITION AS PER FOLLOWING OBSERVATIONS:- 5.2.1 THE ADDITION HAS BEEN MADE BY THE AO ON THE BASIS OF LOOSE- PAPER WHICH WAS SEIZED DURING SEARCH. ON THIS SEIZ ED PAPER THERE WERE DETAILED CAPITAL ACCOUNTS OF ALL THE PARTNERS OF M/S.SHREE CORPORATION AS ON 31-03-2004 AS PER WHICH THE ACCOU NT OF THE APPELLANT IS AS BELOW: NAME OPENING BALANCE ADDITION INTEREST REMUNERATIO N PROFIT NET BALANCE HARDHADBH AI M.SHUKLA 334413.8 3 200000.0 0 96194.0 0 64000.00 2538.2 4 697146.0 7 IT(SS)A NOS. 189 TO 192/AHD/2014 HARSHAD M. SHUKLA VS. ACIT - 30 - FROM THE ABOVE, IT CAN BE SEEN THAT IT IS A DETAILE D ACCOUNT GIVING OPENING BALANCE, THE ADDITION MADE BY THE APPELLANT DURING YEAR, THE INTEREST EARNED BY THE APPELLANT AND ALSO THE D ETAILS OF REMUNERATION AND PROFIT OF THE FIRM CREDITED TO THE ACCOUNT OF THE APPELLANT. THE APPELLANT HAS NOT BEEN ABLE TO SHOW THAT THE OTHER FIGURES REFLECTED IN THIS LOOSE PAPER LIKE INTEREST INCOME, REMUNERATION ETC. ARE NOT CORRECT. THIS LOOSE PAPE R GIVES SIMILAR DETAILS IN CASE OF ALL THE OTHER PARTNERS ALSO. TH E APPELLANT HAS NOT BEEN ABLE TO PROVIDE ANY EVIDENCE TO SHOW THAT THE NOTINGS IN THIS LOOSE PAPERS WERE NOT CORRECT. AS PER SECTION 292C OF THE ACT, THE PRESUMPTION IS THAT THE LOOSE PAPER FOUND IN POSSES SION OR CONTROL OF THE ASSESSEE BELONGS TO HIM/HER AND THE CONTENTS RECORDED THEREIN ARE CORRECT. THE ONUS IS ON THE ASSESSEE T O EXPLAIN THE CONTENTS THEREIN. THE ALTERNATIVE CLAIM OF THE APP ELLANT IS THAT THE INVESTMENT WAS MADE BY HIM DURING THE YEAR OUT OF H IS CAPITAL ACCOUNT WITH SOME OTHER FIRM NAMED MAINTENANCE CORP ORATION. HOWEVER, NO PROOF LIKE COPY OF RETURN, COPY OF ACC OUNT OF APPELLANT IN THE BOOKS IN CASE OF M/S.MAINTENANCE C ORPORATION HAVE BEEN FILED. THE CLAIM OF THE APPELLANT THAT D ATE OF INVESTMENT HAS NOT BEEN GIVEN BY THE AO IN THE ORDER IS TOTALL Y UNJUSTIFIED AND UNACCEPTABLE AS IT IS THE APPELLANT WHO HAS MADE TH E INVESTMENT SO HE SHOULD BE IN THE KNOWLEDGE OF THE DATE OF MAKING SUCH INVESTMENT. ANOTHER CLAIM OF THE APPELLANT THAT EN TRIES WERE FOUND IN THE BOOKS OF M/S.SHREE CORPORATION AND THAT IS W HY ADDITION SHOULD NOT BE MADE IN HIS CASE, CANNOT BE ACCEPTED. THE INTRODUCTION IN THE CAPITAL WITH M/S.SHREE CORPORAT ION WAS MADE BY THE APPELLANT HIMSELF AND, THEREFORE, THE BURDEN IS ON THE APPELLANT TO EXPLAIN THE SOURCE OF SUCH INVESTMENT. SIMILARLY, THE FACT THAT SUCH ENTRIES ARE FOUND IN THE BOOKS OF AC COUNT OF THE FIRM DOES NOT ABSOLVE THE APPELLANT FROM THE BURDEN TO E XPLAIN THE SOURCES OF INVESTMENT MADE BY HIM IN THE CAPITAL AC COUNT WITH THE FIRM. IN VIEW OF ABOVE FACTS, IT IS HELD THAT APPE LLANT HAS MADE UNDISCLOSED INVESTMENT OF RS.2,00,000/- IN HIS CAPI TAL ACCOUNT WITH M/S.SHREE CORPORATION DURING THE RELEVANT F.Y., THE SOURCES OF IT(SS)A NOS. 189 TO 192/AHD/2014 HARSHAD M. SHUKLA VS. ACIT - 31 - WHICH COULD NOT BE EXPLAINED. THEREFORE, AO WAS JU STIFIED IN MAKING ADDITION OF RS.2,00,000/-. THIS GROUND IS A CCORDINGLY, DISMISSED. 25. ON CONSIDERATION OF THE FACTS AS BORN OUT FROM THE RECORDS, WE ARE IN AGREEMENT WITH THE FINDINGS OF THE CIT(A) NOTED ABOVE. WE NOTE THAT THE ASSESSEE HAS CHALLENGED THE ACTION OF THE AO ME RELY ON THE GROUND THAT THE AO HAS NOT BROUGHT ON RECORD ANY IOTA OF E VIDENCE TO PROVE THE IMPUGNED AMOUNT. THE ASSESSEE WAS ASKED ABOUT CORR OBORATION ON THE LOOSE-PAPER FOUND. WE HAVE ALREADY EXPRESSED OU R OPINION THAT WHEN THE LOOSE-PAPER IS FOUND AT THE PREMISE OF THE ASSE SSEE, THE ONUS LIES ON THE ASSESSEE AND NOBODY ELSE TO EXPLAIN THE CONTENT S THEREOF. SECTION 292-C OF THE I.T.ACT IS EXPLICIT IN THIS REGARD. T HE ASSESSEE HAS SOUGHT TO WRONGLY SHIFT ONUS ON THE AO. WE TAKE NOTE OF THE FACT FROM THE ORDER OF THE CIT(A) THAT SEIZED PAPER CLEARLY NOTES THE NAME OF ASSESSEE AS PARTNER OF M/S.SHREE CORPORATION AS ON 31/03/2004 ALONG WIT H PENDING BALANCE, ADDITIONS TO THE CAPITAL, INTEREST CHARGEABLE ON CA PITAL, REMUNERATION ENTITLED TO THE ASSESSEE AND SHARE OF PROFIT. ON T HE FACE OF SUCH DETAILED ACCOUNT AGAINST THE ASSESSEE, IT IS VERY DIFFICULT TO DISLODGE OF THE FINDINGS OF THE CIT(A). THUS, WE DECLINE TO INTERFERE WITH THE ORDER OF THE CIT(A). AS A RESULT, THE APPEAL OF THE ASSESSEE IN IT(SS)A NO.192/AHD/2014 FOR AY 2004-05 IS DISMISSED. IT(SS)A NOS. 189 TO 192/AHD/2014 HARSHAD M. SHUKLA VS. ACIT - 32 - 26. IN THE RESULT, ALL THE FOUR APPEALS OF THE ASSE SSEE ARE DISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 23 / 02/2017 SD/- SD/ () ( ) (RAJPAL YADAV) ( PRADIP KUMAR KEDIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 23/ 02 /2017 ,..,.../ T.C. NAIR, SR. PS ! ' / COPY OF THE ORDER FORWARDED TO : 1. ./0 / THE APPELLANT 2. 1/0 / THE RESPONDENT. 3. 234' 5' / CONCERNED CIT 4. 5' ( . ) / THE CIT(A)-IV, AHMEDABAD 5. 678'34 , ..34& , .2 / DR, ITAT, AHMEDABAD 6. 8: / GUARD FILE. / BY ORDER, 16'' //TRUE COPY // / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION ..24.1.17 (DICTATION-PAD 52- PAGES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 24.1.17/9.2.17 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.23.2.17 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 23.2.17 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER