Abhishek Verma, New Delhi V. DCIT, New Delhi

ITSSA 2/DEL/2011

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 7022 (ITAT-DELHI)
• Duration Of Justice: 10 year(s) 17 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 25-01-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 17-07-2017
• Assessment Year: misc
• Appeal Filed On: 07-01-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SATPAL GULATI
• Keywords: Bogus purchase; Unexplained expenditure; Income from undisclosed sources; Residential status; Search and seizure; Document seized; Period of limitation; Wholly owned subsidiary; Block assessment; Tax effect; Documents seized; Liquidation
• Section: 143(2); 207; 158BC; 13; 158BD; 22; 131; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI FRIDAY BENCH A : NEW DELHI (THROUGH VIDEO CONFERENCING) BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER IT(SS)A NO. 2/DEL/2011 BLOCK PERIOD 01.04.1988 TO 23.03.1999 ABHISHEK VERMA, C/O MR. JITENDRA GARG, ADVOCATE, CHAMBER NO. 137, PATIALA HOUSE COURT, NEW DELHI 110 003 (PAN: ABMPV5153C) VS. DY. CIT, CENTRAL CIRCLE-12, ARA CENTRE, JHANDEWALAN EXTN., NEW DELHI (APPELLANT) (RESPONDENT) IT(SS)A NO. 3/DEL/2011 BLOCK PERIOD 01.04.1988 TO 23.03.1999 DY. CIT, CENTRAL CIRCLE-12, ROOM NO. 330, ARA CENTRE, JHANDEWALAN EXTN., NEW DELHI VS. ABHISHEK VERMA, C/O MR. JITENDRA GARG, ADVOCATE, CHAMBER NO. 137, PATIALA HOUSE COURT, NEW DELHI 110 003 (PAN: ABMPV5153C) (APPELLANT) (RESPONDENT) AND C.O. NO. 189/DEL/2011 (IN IT(SS)A NO. 3/DEL/2011) BLOCK PERIOD 01.04.1988 TO 23.03.1999 ABHISHEK VERMA, C/O MR. JITENDRA GARG, ADVOCATE, CHAMBER NO. 137, PATIALA HOUSE COURT, NEW DELHI 110 003 (PAN: ABMPV5153C) VS. DY. CIT, CENTRAL CIRCLE-12, ARA CENTRE, JHANDEWALAN EXTN., NEW DELHI (APPELLANT) (RESPONDENT) IT(SS)A-2 & 3/DEL/2011& CO NO. 189/DEL/2011 (BP-01.04.1988 TO 23.03.1999) 2 APPELLANT BY : SH. HIMANSHU AGGARWAL & SH. LALIT MOHAN, CA RESPONDENT BY : SH. SATPAL GULATI, CIT(DR) ORDER PER H.S. SIDHU, JM : THE CROSS APPEALS HAVE BEEN FILED BY THE ASSESSEE A ND REVENUE AGAINST THE IMPUGNED ORDER DATED 29.10.202 10 PASSED BY THE LD. CIT(A)-I, NEW DELHI FOR THE BLOCK PERIOD 0 1.04.1988 TO 23.03.1999 AND AGAINST THE REVENUES APPEAL NO. 03/ DEL/2011, THE ASSESSEE HAS ALSO FILED THE CROSS OBJECTION NO. 189 /DEL/2011. 2. THE ASSESSEE HAS FILED THE FOLLOWING GROUNDS IN IT(SS)A NO. 02/DEL/2011 :- 1. THE LD. CIT(A)-1, NEW DELHI DID NOT PROVIDE PROPER OPPORTUNITY OF HEARING TO THE APPELLANT AND ORDER O F THE LD. CIT(A) IS A NON-SPEAKING ORDER. 2. THE LD. CIT(A) FAILED TO CONSIDER AND DECIDE THE GROUNDS OF APPEAL NO. 35, I.E. ALL THE RECEIPTS AND PAYMENTS HAVE BEEN CONSIDERED AS UNDISCLOSED INCOME AND PEAK AMOUNT SHOULD HAVE BEEN CONSIDERED. 3. THE LD. CIT(A) FAILED TO CONSIDER AND DECIDE THE GROUNDS OF APPEAL NO. 36, I.E. THE UNDISCLOSED INCO ME HAS BEEN DETERMINED EVEN ON THE BASIS OF DOCUMENTS SEIZED FROM MS. ASMITA AGGARWAL AND EASAN INDIA LTD. WITHOUT THERE BEING ANY EVIDENCE TO SHOW THE SATISFACTION OF THEIR RESPECTIVE AOS, AS REQUIRED BY SECTION 158BD OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT') AND IT(SS)A-2 & 3/DEL/2011& CO NO. 189/DEL/2011 (BP-01.04.1988 TO 23.03.1999) 3 HANDING OVER OF THE DOCUMENTS TO THE LD. DCIT, CENTRAL CIRCLE-12, NEW DELHI. 4. THE ASSESSMENT BEING TIME BARRED IS NULL AND VOID A B INITIO AND DESERVE TO BE QUASHED. 5. ANY VALID NOTICE U/S. 143(2) OF THE INCOME TAX INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'T HE ACT'), 1961 WAS NEITHER ISSUED NOT SERVED UPON THE ASSESSEE. 6. THE LD. ASSESSING OFFICER, WHO PURPORTEDLY ISSUED T HE VARIOUS NOTICE UNDER THE PROVISIONS OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT' ), AND MADE THE ASSESSMENT WAS NOT AUTHORIZED TO EXERCISE POWER AND PERFORM FUNCTIONS OF THE ASSESSING OFFICER AND THEREFORE THE SAID NOTICE AS WELL AS THE ASSESSMENT MADE ARE INVALID, NULL AND VOID AB INITIO. THE LD. ASSESSING OFFICER HAS NO JURISDICTION OVER THE CASE OF THE ASSESSEE. THE LD. CIT(A) FAILED TO APPRECIATE THAT THE ONUS T O PROVE THAT THE ASSESSING OFFICER WAS SO AUTHORIZED WAS ON THE ASSESSING OFFICER AND THUS ERRED IN HOLDING THAT THE ASSESSEE HAS NOT BROUGHT ANY MATERIAL ON RECORD. THE CIT(A) ERRED IN UPHOLDING THE FOLLOWING ADDITIO NS: ( RS.) 1 INVESTMENTS IN M/S ESAM INDIA LTD. 37,00,000 2 COMMISSION INCOME 35,00,000 3 FOREIGN TRAVEL EXPENDITURE (RS. 3,32,757/- + 69,800/-) 4,02,557 4 DEPOSITS IN BANK ACCOUNTS. 29,88,526 5 EXPENDITURE ON REPAIR AND RENOVATION. 1,19,41,0 51 6 EXPENDITURE ON PURCHASE OF CELL PHONES. 1,90,360 7 INVESTMENTS IN PURCHASE OF CARS 1,95,44,196 IT(SS)A-2 & 3/DEL/2011& CO NO. 189/DEL/2011 (BP-01.04.1988 TO 23.03.1999) 4 8 UNEXPLAINED EXPENDITURE 38,74,444 9 DEPOSITS 7,24,71,120 10 INCOME AS PER DIARY 1,42,10,625 11 INVESTMENT IN HOUSE HOLD AND PERSONAL ITEMS. 79,68,269 12 INVESTMENT FOR PURCHASE OF FOREIGN EXCHANGE. 1,27,688 13 PAYMENT MADE TO RITA LUTHER 2,00,000 14 PAYMENT TO SH. SANDEEP PURI 1,00,000 15 PROFIT OF M/S DELHI EXPORTS 2,77,00,000 16 PROFIT OF M/S GLOBETROTTERS 3,34,00,000 17 CASH EXPENDITURE 1,05,250 18 INCOME RECEIVED THROUGH M/S VINO VERITAS 7,67,30,400 19 INCOME RECEIVED THROUGH M/S EUROPEAN CAPITAL LTD. 1,33,00,000 20 CASH PAYMENTS RECEIVED 8,06,800 21 RECEIPTS FROM SH. SC BHARJATIA 75,00,000 22 BOGUS PURCHASES 17,39,40,857 23 DEPOSITS MADE IN GENERAL CREDITS FINANCE LTD. 54,00,000 24 INCOME ON ACCOUNT OF PAYMENT MADE TO SH. ARJUN AMLA. 3,20,40,000 25 INCOME AS PER DOCUMENTS SEIZED FROM MS. ASMITA AGGARWAL. 11,00,42,100 8. THE SUBMISSIONS AND EVIDENCES OF THE ASSESSEE HA VE NOT BEEN CONSIDERED AT ALL AND WITHOUT PREJUDICE, T HE SAME HAS NOT BEEN APPRECIATED IN TRUE PERSPECTIVE. 9. THE LOWER AUTHORITIES ERRED ON FACTS AND IN LAW IN BY RELYING UPON THE EVIDENCES, WHICH ARE NOT ADMISSIBLE. 10. THE OBSERVATIONS AND ORDERS OF THE LOWER AUTHORITIES ARE AGAINST THE FACTS OF THE CASE AS WE LL AS LAW. 11. THE INTEREST CHARGED U/S. 158BFA(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'T HE IT(SS)A-2 & 3/DEL/2011& CO NO. 189/DEL/2011 (BP-01.04.1988 TO 23.03.1999) 5 ACT') IS AGAINST THE FACTS OF THE CASE AS WELL AS L AW AND WITHOUT PREJUDICE IS EXCESSIVE. ASSESSEES IT(SS)A NO. 2/DEL/2011 3. THE FACTS RELATING TO THE ISSUES IN DISPUTE AS NARRATED BY THE REVENUE AUTHORITIES ARE THAT A SEARCH AND SEIZURE ACTION AS PER PROVISIONS OF SECTION 132 OF THE INCOME TAX ACT, 19 61 (IN SHORT ACT) WAS CARRIED OUT AT THE RESIDENTIAL PREMISES OF THE ASSESSEE ON 23.3.1999. THE SEARCH WAS COMPLETED ON 17.7.1999. THE SEARCH AS PER THE PROVISIONS OF SECTION 132 OF THE ACT WAS A LSO CONDUCTED AT THE BUSINESS PREMISES OF THE ASSESSEE M/S ESAM INDI A LTD. ON 23.3.1999 WHICH WAS CONCLUDED ON 14.3.2000. NOTI CE U/S. 158BC OF THE ACT WAS ISSUED TO THE ASSESSEE ON 30.11.2000 REQUIRING ASSESSEE TO FILE BLOCK PERIOD RETURN WITHIN 15 DAYS OF RECEIPT OF NOTICE. THE NOTICE WAS SERVED UPON THE ASSESSEE O N 01.12.2000 THROUGH REGISTERED POST. THE LETTER CONTAINING NO TICE U/S. 158BC OF THE ACT WAS RECEIVED BACK UNDELIVERED. THEREAFTER A NOTICE WAS SERVED AT THE THEN RESIDENTIAL ADDRESS OF THE ASSES SEE I.E. 141, NORTH AVENUE, NEW DELHI ON 21.12.2000 THROUGH NOTIC E SERVER. 3.1 IN RESPONSE TO THE SAME THE ASSESSEE FILED TH E REPLY DATED 21.12.2000 THROUGH HIS AUTHORISED REPRESENTATIVE STATING THAT ASSESSEE WAS BEING TRIED IN THE COURT OF ACMM, PATI ALA HOUSE, NEW DELHI IN THE CASE TITLED ENFORCEMENT DIRECTORATE VS . ABHISHEK VERMA, IN WHICH THE QUESTION WHETHER SH. ABHISHEK V ERMA WAS NRI OR NOT WAS PENDING CONSIDERATION. IT WAS CLAIMED IN THIS LETTER THAT SINCE THE RESIDENTIAL STATUS OF SH. ABHISHEK VERMA WAS SUB-JUDICE, THEREFORE, BLOCK RETURN COULD NOT BE FILED BY SH. A BHISHEK VERMA. 3.2 ON 26.2.2001, ASSESSEE WAS REQUESTED TO FURNISH PROOF IN SUPPORT OF HIS CLAIM THAT HE WAS A NON- RESIDENT IN DIAN AND NOT SUBJECT TO TAX LAWS OF INDIA AND ASSESSEE WAS ONCE AGAIN REMINDED TO FILE BLOCK PERIOD RETURN WITHOUT DELAY. IN RESP ONSE TO THE SAME, IT(SS)A-2 & 3/DEL/2011& CO NO. 189/DEL/2011 (BP-01.04.1988 TO 23.03.1999) 6 ASSESSEE FILED HIS RETURN ON 01.03.2001 THROUGH HIS COUNSEL, ASSESSEE TOOK THE SAME PLEA, BUT COULD NOT FILE ANY EVIDENCE SUPPORTING HIS VERSION. 3.3 ON 29.5.2001, THE SUMMONS U/S. 131 OF THE ACT W ERE ISSUED TO THE AASSESSEE FOR COMPLIANCE ON 12.6.2001. IN RE SPONSE TO THE SAME, THE ASSESSEE DID NOT RESPOND AND DID NOT FILE ANY REPLY MENTIONING THE REASONS FOR HIS NON-ATTENDANCE. 3.4 IN THE ABSENCE OF BLOCK PERIOD RETURN FILED BY THE ASSESSEE THE PROCEEDINGS WERE GETTING TIME BARRED. ON 31.7.2001, THE QUESTIONNAIRE ALOGNWITH NOTICES U/S. 143(2) AND 14 2(1) OF THE ACT WAS ISSUED TO THE ASSESSEE ON 07.6.2001. ON 7.6.20 01 ASSESSEE WAS ISSUED A LETTER STATING THAT ASSESSEE WAS ALREA DY ALLOWED AN OPPORTUNITY BY THE INCOME TAX INVESTIGATION WING TO OBTAIN THE PHOTOCOPIES OF THE SEIZED MATERIAL. THE ASSESSEE WA S AGAIN GIVEN OPPORTUNITY TO OBTAIN THE PHOTOCOPIES OF THE SEIZED MATERIAL REFERRED IN THE QUESTIONNAIRE ISSUED TO THE ASSESSE E WHICH WAS ALLOWED TO THE ASSESSEE. 3.5 ON 2.7.2001, ASSESSEE FILED A LETTER DATED 21. 6.2001 STATING THAT BOOKS OF ACCOUNTS, DOCUMENTS ETC. SHOULD BE RE TURNED TO THE ASSESSES SINCE, NO REASONS WERE RECORDED NOR APPROV AL OF HIGHER AUTHORITIES WAS OBTAINED FOR RETENTION OF THE SAME. ASSESSEE WAS ASKED TO ATTEND ON 03.7.2001, TO RECEIVE THE COPY O F RETENTION ORDER AND ASKED TO INSPECT THE SEIZED RECORDS AND OBTAINE D ANY PHOTOCOPIES OF THE SEIZED RECORDS. ON 2.7.2001, THE ASSESSEE DID NOT INSPECT ANY RECORD ON 2.7.2001. THE COPY OF RETENTION ORDER DATED 31.01.2001 AND 16.2.2001 FOR SEIZED DOCUMEN TS WAS GIVEN TO ASSESSEE ON 3.7.2001. ON 2.7.2001 ANOTHER LET TER WAS FIELD BY THE ASSESSEE MENTIONING THAT THE PHOTOCOPIES OF DOC UMENTS SUPPLIED TO THE ASSESSEE EARLIER WERE INCOMPLETE AN D SPECIFIC REQUEST FOR CERTAIN ANNEXURES AND PAGES WERE MADE W HICH WAS GIVEN TO THE ASSESSEE. ON 6.7.2001 SUMMONS WERE ISS UED TO SH. ABHISHEK VERMA FOR COMPLIANCE ON 13.7.2001 SO AS TO EXPLAIN THE IT(SS)A-2 & 3/DEL/2011& CO NO. 189/DEL/2011 (BP-01.04.1988 TO 23.03.1999) 7 SEIZED DOCUMENTS. THESE SUMMONS WERE SERVED ON THE ASSESSEE ON 09.7.2001. ASSESSEE DID NOT ATTEND AT THE GIVEN DATE AND TIME NOR ANY REPLY HAS BEEN FILED BY THE ASSESSEE STATI NG REASONS FOR HIS NON-ATTENDANCE. ON 9.7.2001 ASSESEE MADE ANOTHER RE QUEST THROUGH HIS LETTER DATED 6.7.2001 REQUESTING FOR RE TURNING THE ORIGINAL SEIZED MATERIAL AND ASSESSEE WAS ALLOWED T HE OPPORTUNITY TO INSPECT AND PHOTOCOPIES OF SEIZED MATERIAL. BUT ASSESSEE DID NOT INSPECT ANY SEIZED MATERIAL AND FILED ANOTHER LETTE RS DATED 10.7.2001 AND 13.7.2001 STATING THAT SEIZED DOCUM ENTS SHOULD BE RETURNED TO THE ASSESSEE. ON 16.7.2001 ASSESSEE FI LED THE PETITION U/S. 144A OF THE ACT BEFORE THE ADDITIONAL CIT, C ENTRAL RANGE-3, NEW DELHI REQUESTING FOR DIRECTIONS TO AO TO RETURN IN ORIGINAL SEIZED MATERIAL AND WITHOUT PREJUDICE TO THIS SUPPLY THE C ERTIFIED COPIES OF THE SEIZED MATERIAL. THE CASE WAS HEARD BY THE ADD L. CIT, CENTRAL RANGE-3, ON 18.7.2001. AS PER THE DIRECTIONS OF THE ADDL. CIT, CENTRAL RANGE-3, NEW DELHI ASSESSEE THROUGH HIS COU NSEL GAVE A LIST IN RESPECT OF WHICH PHOTOCOPIES WAS REQUIRED BY HIM AND THE PHOTOCOPIES OF THOSE DOCUMENTS WERE PROVIDED TO THE ASSESSEE ON 20.7.2011. ON 24.7.2001 ASSESSEE FILED BLOCK RETURN DECLARING UNDISCLOSED INCOME NIL. NOTICE U/S. 143(2) AND 142 (1) OF THE ACT WAS ISSUED ON 24.7.2001 REQUESTING THE ASSESSEE TO REPLY THE QUESTIONNAIRES ISSUED AND SERVED EARLIER. ASSESSEE THROUGH HIS COUNSEL ATTENDED ON 24.7.2001 FILED A WRITTEN REPLY TO THE QUESTIONNAIRES ISSUED TO THE ASSESSEE. THE BLOCK ASSESSMENT RETURN HAS BEEN FILED BY THE ASSESSEE UNDER PROTES T. ASSESSEE HAS DECLARED HIS STATUS AS NON RESIDENT INDIAN. ASSES SEE IN HIS REPLY FILED THROUGH HIS COUNSEL ON 24.07.2001 HAS STATED THAT HE WAS NON- RESIDENT DURING THE WHOLE OF THE BLOCK PERIOD UNDE R CONSIDERATION. IT HAS BEEN FURTHER STATED THAT ASSESSEE HAD NO IN COME IN INDIA AND BEING NON-RESIDENT, ASSESSEE IS NOT LIABLE UNDE R THE INCOME TAX ACT, 1961 REGARDING INCOME EARNED OUT OF INDIA /FOREIGN COUNTRIES. IN SUPPORT OF THIS VERSION, ASSESSEE HA S NOT FILED ANY IT(SS)A-2 & 3/DEL/2011& CO NO. 189/DEL/2011 (BP-01.04.1988 TO 23.03.1999) 8 EVIDENCE REGARDING NON-RESIDENT DURING THE WHOLE OF THE BLOCK PERIOD. IN THE ABSENCE OF THE EVIDENCES SUPPORTING THIS CLAIM OF THE ASSESSEE, THE AO TREATED THE ASSESSEE AS RESIDENT F OR THE PURPOSE OF THIS BLOCK ASSESSMENT YEAR. 3.6 KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES AND THE EVIDENCES FILED BY THE ASSESSEE, THE AO ELABORATELY ASSESSED THE UNDISCLOSED INCOME OF THE ASSESSEE FROM PAGE NO. 4 TO 35 OF THE ASSESSMENT ORDER AND DETERMINED THE INCOME UNDER 26 HEADINGS AND COMPLETED THE ASSESSMENT VIDE ORDER DATED 25.7. 2001 FOR THE BLOCK PERIOD 01.04.1988 TO 23.03.1999. THE RELEVANT PAGE NO. 34 & 35 OF THE ASSESSMENT ORDER IS REPRODUCED AS UNDER:- ON THE BASIS OF THE ABOVE DISCUSSIONS, THE UNDISCL OSED INCOME OF THE ASSESSEE IS DETERMINED AS FOLLOWS:- ( RS.) 1 UNDISCLOSED INVESTMENTS IN M/S ESAM INDIA LTD. 37,00,000 2 UNDISCLOSED COMMISSION INCOME 35,00,000 3 UNDISCLOSED FOREIGN TRAVEL EXPENDITURE (RS. 3,32,757/ - + 69,800/ - ) 4,02,557 4 UNDISCLOSED DEPOSITS IN BANK ACCOUNTS. 29,88,526 5 UNDISCLOSED EXPENDITURE ON REPAIR AND RENOVATION. 1,19,41,051 6 UNDISCLOSED EXPENDITURE ON PURCHASE OF CELL PHONES. 1,90,360 7 UNDISCLOSED INVESTMENTS IN PURCHASE OF CARS 1,95,44,196 8 UNEXPLAINED EXPENDITURE (AS PER 8 ABOVE) 38,74,444 9 UNEXPLAINED DEPOSITS 7,24,71,120 10 UNDISCLOSED INCOME AS PER DIARY 1,42,10,625 11 UNDISCLOSED INVESTMENT IN HOUSE HOLD AND PERSONAL ITEMS. 79,68,269 12 UNDISCLOSED INVESTMENT FOR PURCHASE OF FOREIGN EXCHANGE. 1,27,688 13 UNDISCLOSED PAYMENT MADE TO RITA LUTHER 2,00,000 14 UNDISCLOSED PAYMENT TO SH. SANDEEP PURI 1,00,000 IT(SS)A-2 & 3/DEL/2011& CO NO. 189/DEL/2011 (BP-01.04.1988 TO 23.03.1999) 9 15 UNDISCLOSED PROFITS OF M/S DELHI EXPORTS 2,77,0 0,000 16 UNDISCLOSED PROFITS OF M/S GLOBETROTTERS 3,34,0 0,000 17 UNDISCLOSED CASH EXPENDITURE 1,05,250 18 UNDISCLOSED INCOME RECEIVED THROUGH M/S VINO VERITAS 7,67,30,400 19 UNDISCLOSED INCOME RECEIVED THROUGH M/S EUROPEAN CAPITAL LTD. 1,33,00,000 20 UNDISCLOSED CASH PAYMENTS RECEIVED 8,06,800 21 UNDISCLOSED RECEIPTS FROM SH. SC BHARJATIA 75,00,000 22 BOGUS PURCHASES 17,39,40,857 23 UNDISCLOSED DEPOSITS MADE IN GENERAL CREDITS FINANCE LTD. 54,00,000 24 UNDISCLOSED INCOME AS PER 24 ABOVE. 1,19,03,000 25 UNDISCLOSED INCOME ON ACCOUNT OF PAYMENT MADE TO SH. ARJUN AMLA 3,20,40,000 26 UNDISCLOSED INCOME AS PER DOCUMENTS SEIZED FROM MS. ASMITA AGGARWAL. 11,00,42,100 TOTAL UNDISCLOSED INCOME 63,40,87,243 TAX @ 60% ON THE ABOVE 38,04,52,346 INTEREST U/S. 158BFA(1) [FOR 8 MONTHS @ 2%] 6,08,72,375 TOTAL DEMAND 44,13,24,721 PENALTY PROCEEDINGS U/S. 158BFA(2) OF THE I.T. ACT, 1961 HAS BEEN INITIATED SEPARATELY. THE ORDER HAS BEEN PASSED WITH THE PRIOR APPROVAL OF THE ADDL. CIT, CENTRAL RANGE-III, NEW DELHI. 3.7 AGGRIEVED WITH THE AFORESAID ASSESSMENT ORDER D ATED 25.7.2001 PASSED U/S. 158BC OF THE I.T. ACT, 1961, ASSESSEE FILED THE APPEAL BEFORE THE LD. CIT(A), WHO VIDE HIS IMPU GNED ORDER DATED 29.10.2010 PARTLY ALLOWED THE APPEAL OF THE A SSESSEE. AGGRIEVED WITH THE IMPUGNED ORDER DATED 29.10.2010, ASSESSEE AS WELL AS REVENUE BOTH ARE IN APPEALS BEFORE THE TRIB UNAL ON THE GROUNDS MENTIONED, AS REPRODUCED ABOVE. IT(SS)A-2 & 3/DEL/2011& CO NO. 189/DEL/2011 (BP-01.04.1988 TO 23.03.1999) 10 4. THE AFORESAID APPEALS AND CROSS OBJECTION CAME UP FOR HEARING BEFORE THE BENCH ON 15.10.2020. BOTH THE PA RTIES ARGUED ON LEGAL ISSUES AND FILED THEIR WRITTEN SUBMISSION ON LEGAL ISSUES AND RELIED UPON THE SAME. AFTER HEARING THE LD. COUNSEL FOR THE ASSESSEE COMPLETELY ON LEGAL ISSUES, THE LD. CIT(DR ) ARGUED THE MATTER PARTLY ON 15.10.2020 AND WE ADJOURNED THE MA TTER AS PART-HEARD FOR THE ARGUMENTS OF THE LD. CIT(DR) ON 19.10.2020. ON 19.10.2020, WE HAVE HEARD BOTH THE PARTIES ON THE L EGAL ISSUES. ON 18.12.2020. WE HAVE FIXED THE CASE FOR ARGUMENTS O F BOTH THE PARTIES ON MERIT ALSO. AT THE TIME OF HEARING BOTH THE PARTIES ARGUED AT LENGTH AND ALSO RELIED UPON THEIR WRITTE N SUBMISSIONS AND COMPLETED THE ARGUMENTS ON LEGAL AS WELL AS MERIT S ALSO. 5. LD. COUNSEL FOR THE ASSESSEE ARGUED THAT THE ASS ESSEE HAS FILED THE PRESENT APPEAL AGAINST THE IMPUGNED ORDER DATED 29.10.2010 PASSED BY THE LD. CIT(A) AGAINST THE ORD ER OF THE ASSESSING OFFICER PASSED U/S. 158 BC OF THE ACT FOR THE BLOCK PERIOD 1.4.1988 TO 23.3.1999. HE STATED THAT THE ASSESSEE IS CHALLENGING THE ORDER OF THE ASSESSMENT FRAMED U/S. 158 BC OF T HE ACT DATED 25.07.2001 BEING BARRED BY LIMITATION AND HE DRAW O UR ATTENTION TOWARDS SECTION 158BE(1) AND THE ASSESSMENT ORDER PASSED U/S. 158 BC OF THE ACT AND STATED THAT IN TERMS OF THIS PROVISION, AO IS REQUIRED TO COMPLETE THE ASSESSMENT U/S. 158 BC OF THE ACT WITHIN 02 YEARS FROM THE END OF THE MONTH FOR WHICH THE LA ST AUTHORIZATION FOR SEARCH U/S. 132 OF THE ACT WAS EXECUTED. THE EXPLANATION CONTAINED IN THE SAID SECTION CLARIFIES THAT THE AU THORIZATION FOR THE SEARCH INITIATED U/S. 132 OF THE ACT IS CONSIDERED TO BE EXECUTED WHEN THE SEARCH IS RECORDED TO BE CONCLUDED BY THE SEARCH TEAM IN THE PANCHNAMA DRAWN AFTER SUCH SEARCH. THE WORD PA NCHNAMA IS NOT DEFINED IN THE ACT OR RULES, EVEN THE CODE OF C RIMINAL PROCEDURE, 1973, THE PROVISIONS OF WHICH RELATING T O SEARCH AND SEIZURE ARE APPLICABLE TO SEARCHES AND SEIZURE U/S . 132 OF THE ACT, DO NOT DEFINE THE SAID WORD, HOWEVER IT PRESCRIBES THE FORMAT IN IT(SS)A-2 & 3/DEL/2011& CO NO. 189/DEL/2011 (BP-01.04.1988 TO 23.03.1999) 11 WHICH THE PANCHNAMA IS REQUIRED TO BE DRAWN. LD. COUNSEL FOR THE ASSESSEE STATED THAT IN THE CASE OF THE ASSESSE AUT HORIZATION / WARRANT OF SEARCH WAS GIVEN ON 22.3.1999, BUT IN CONSEQUENCE THEREOF 03 PANCHNAMAS WERE DRAWN ON THREE DIFFERENT DATED AT THE SAME RESIDENTIAL PREMISES OF THE ASSESSEE I.E. DATE D 23.03.1999; 21.5.1999 AND 16.7.1999. HE STATED THAT ACCORDING TO THE DEPARTMENT THE SEARCH WAS CONCLUDED ON 16.7.1999, T HE DATE OF LIMITATION FOR PASSING THE ASSESSMENT ORDER U/S. 15 8 BC OF THE ACT WAS TREATED AS 31.7.2001 AND ACCORDINGLY THE ORDER U/S. 158 BC OF THE ACT WAS PASSED ON 25.7.2001 I.E. WITHIN LIMITA TION PERIOD. BUT ACCORDING TO THE ASSESSEE SEARCH IN THE CASE OF THE ASSESSEE WAS INITIATED U/S. 132 OF THE ACT AFTER DRAWING 1 ST PANCHNAMA ITSELF, AND THEREFORE THE LIMITATION TO COMPLETE THE ASSESSMENT WAS TO BE COUNTED FROM THE 1 ST PANCHNAMA AND AS A RESULT THE LIMITATION FOR FRAMING ASSESSMENT WOULD BE 31.3.2001 I.E. 2 YEARS FROM THE END OF THE MONTH IN WHICH THE LAST PANCHNAMA FOR SEARCH U/S. 132 OF THE ACT WAS EXECUTED. BUT IN THE ASSESSEES CASE TH E IMPUGNED ASSESSMENT ORDER U/S. 158BC OF THE ACT WAS PASSED O N 25.7.2001, COUNTED AS PER THE 3 RD PANCHNAMA WHICH WAS BARRED BY LIMITATION PROVISIONS OF SECTION 158 BE OF THE ACT. 5.1 LD. COUNSEL FOR THE ASSESSEE FURTHER DRAW OUR A TTENTION TOWARDS THE 1 ST PANCHNAMA WHICH WAS DRAWN ON 23.3.1999 AS SEARCH PREMISES OF THE ASSESSEE. COPY OF THE SAME I S AT PAGE NO. 1- 4 OF THE PAPER BOOK VOLUME I. AS PER PAGE NO. 1-4 OF THE PAPER BOOK VOLUME I THERE ARE SOME DOCUMENTS AND BOOKS O F ACCOUNTS WERE FOUND AND SEIZED, WHICH THE LD. COUNSEL FOR TH E ASSESSEE HAS REPRODUCED IN HIS WRITTEN SUBMISSIONS I.E. ANNEXURE A (A-I TO A- 11), ANNEXURE (A-2 TO A-14) (ACCORDING TO THE ASSE SSEE THESE ITEMS WERE FOUND, BUT NOT SEIZED). AS REGARDS THE 1 ST PANCHNAMA, LD. COUNSEL FOR THE ASSESSEE MAINLY STATED THAT THE 1 ST PANCHNAMA DATED 23.3.1999 AND THE REVENUE IN ORDER TO EXTEN D THE PERIOD OF LIMITATION ARTIFICIALLY ADOPTED A COLORABLE MECHANI SM OF KEEPING FEW IT(SS)A-2 & 3/DEL/2011& CO NO. 189/DEL/2011 (BP-01.04.1988 TO 23.03.1999) 12 ITEMS INVENTORISED IN A SEAL UNDER A SEPARATE ROOM. THUS THE PERIOD OF LIMITATION ARE TO BE COUNTED FROM 31.3.19 99 TO END ON 31.3.2001. 5.1.1 AS REGARDS THE 2 ND PANCHNAMA, LD. COUNSEL FOR THE ASSESSEE DRAW OUR ATTENTION TOWARDS THE SECOND PANCHNAMA WHI CH WAS DRAWN ON 21.5.1999 WHICH IS AT PAGE NO. 23-26 OF TH E PAPER BOOK VOLUME-I. FROM THIS PANCHNAMA, NO FRESH DOCUMENT OR ANY MATERIAL WAS FOUND / SEIZED FROM THE RESIDENTIAL PR EMISES OF THE ASSESSEE. THE PERIOD OF VISIT ON THE SAID DATE WAS FROM 1.30 PM TO 4.00 PM I.E. ABOUT 2.5 HOURS. HE STATED THAT THAT 2 ND PANCHNAMA IS ONLY TO EXTEND THE PERIOD OF LIMITATION. 5.1.2 AS REGARDS TO 3 RD PANCHANAMA WHICH WAS DRAWN ON 16.7.1999 AT THE SAME SEARCHED PREMISES OF THE ASSESSEE WHICH THE ASSESSEE HAS ATTACHED AT PAGES 29-32 IN THE ASSESSEES PAPE R BOOK VOLUME- 1. ACCORDING TO THE ASSESSEE NO NEW DOCUMENT OR AN Y VALUABLE MATERIAL WAS FOUND AND SEIZED FROM THE SEARCHED PRE MISES OF THE ASSESSEE, NOR ANY FURTHER RESTRAINED ORDER U/S. 132 (3) OF THE ACT WAS PASSED. LASTLY, ON THIS LEGAL ISSUE OF LIMITAT ION, LD. COUNSEL FOR THE ASSESSEE STATED THAT NOTHING FURTHER REMAINED T O BE INVESTIGATED AT THE SEARCH PREMISES AFTER 1 ST PANCHANAMA, THE ONLY REASONS BEHIND IS NOT TO CONCLUDE THE SEARCH AND KE EPING IT PENDING FOR A LONG DURATION OF APPROXIMATELY 4 MONTHS WAS, IN ONLY THE GAIN TIME OR, IN OTHER WORDS, EXTEND THE PERIOD OF LIM ITATION TO COMPLETE THE ASSESSMENT UPON THE ASSESSEE, WHICH IS NOT PERM ISSIBLE IN LAW AND THEREFORE THE ASSESSMENT PASSED U/S. 158BC OF T HE ACT DATED 25.7.2001 IS TIME BARRED. IN SUPPORT OF THESE ARGUM ENTS ADVANCED BY THE LD. COUNSEL FOR THE ASSESSEE, HE CITED VARIO US JUDGMENTS RENDERED BY THE HONBLE HIGH COURTS WHICH INCLUDES CIT VS. SANDHYA P. NAIK : 253 ITR 534 (HONBLE BOMBAY HIGH COURT); CIT VS. SARB CONSULTATE MARINE PRODUCTS PVT. LTD. 294 I TR 444 (HONBLE DELHI HIGH COURT); CIT VS. SK KATYAL REPORTED IN 2 21 CTR 310 OF THE HONBLE DELHI HIGH COURT; A RAKESH KUMAR JAIN V S. JCIT IN ITA IT(SS)A-2 & 3/DEL/2011& CO NO. 189/DEL/2011 (BP-01.04.1988 TO 23.03.1999) 13 NO. 1240/2016 OF THE HONBLE MADRAS HIGH COURT; CIT VS. TS CHANDRASHEKAR : 221 CTR 385 OF THE HONBLE KARNATAK A HIGH COURT; DCIT VS. ADOLF PATRIC PINTO 284 ITR (AT) 207 OF THE ITAT, MUMBAI BENCH; PR. CIT VS. PPC BUSINESS AND PRODUCTS (P) LT D. 398 ITR 71 (DELHI); CIT VS. DD AXLES P LTD. 323 ITR 558 (DELHI ); C. RAMAIAH REDDY VS. ACIT 339 ITR 210 (KARNATAKA); DR. C.BALAK RISHNAN NAIR VS. CIT 237 ITR 70 (KERALA); ACIT VS. VIJAY KUMAR R AICHAND ITA NO. 6437 TO 6442/DEL/2012 AND CAPT. VIJAY KUMARRAIC HAND VS. ACIT ITA NO. 102 TO 107/DEL/2013 (ITAT, DELHI); SV IL MINES LTD. VS ACIT (ITA NO. 832 AND 833/DE/2014) (ITAT, DELHI) AND NANDLAL M. GANDHI VS. ACIT 115 ITD 1 (ITAT, MUMBAI). HE RE QUESTED THAT KEEPING IN VIEW THE AFORESAID ARGUMENTS SUPPORTED BY HIS WRITTEN SUBMISSIONS ALONGWITH THE DOCUMENTARY EVIDENCES FIL ED IN THE SHAPE OF PAPER BOOKS AND CASE LAWS, THE APPEAL FILED BY THE ASSESSEE MAY BE ACCEPTING BY QUASHING THE ASSESSMENT ORDER D ATED 25.7.2001 PASSED BY THE AO U/S. 158BC OF THE ACT. 6. ON THE CONTRARY, LD. CIT(DR) ON THE ARGUMENTS AD VANCED BY THE LD. COUNSEL FOR THE ASSESSEE ON THE LEGAL ISSUE S, RELIED UPON THE ORDERS PASSED BY THE REVENUE AUTHORITIES AND AL SO FILED HIS WRITTEN SUBMISSIONS CONTAINING PAGES 1-8 IN WHICH H E HAS CONTROVERTED THE ARGUMENTS ADVANCED BY THE LD. COUN SEL FOR THE ASSESSEE ON THE BASIS OF VARIOUS DOCUMENTARY EVIDEN CES FILED BY THE DEPARTMENT IN THE SHAPE OF VARIOUS PAPER BOOKS. LD. CIT(DR) STATED THAT IN COMPLIANCE OF THE DIRECTIONS OF THE ITAT, THE DEPARTMENT HAS FILED THE COPIES OF THE SEIZED DOCUM ENTS IN THE SHAPE OF VARIOUS PAPER BOOKS WHICH ARE AVAILABLE WI TH THE BENCH. THE SAME WAS ALSO SUPPLIED TO THE ASSESSEE. HE ARGU ED THAT THE SEARCH WAS EFFECTIVELY CONCLUDED AFTER THE 1 ST PANCHNAMA DRAWN ON 23.3.1999 AND THE SUBSEQUENT PART OF SEARCH CARRIED OUT IN MAY, 1999 AND FINALLY IN THE MONTH OF JULY, 1999. TO REP LY THE ARGUMENTS ADVANCED BY THE LD. COUNSEL FOR THE ASSESSEE, LD. C IT(DR) STATED THAT 1 ST PANCHNAMA WAS DRAWN ON 23.3.1999 AND VARIOUS IT(SS)A-2 & 3/DEL/2011& CO NO. 189/DEL/2011 (BP-01.04.1988 TO 23.03.1999) 14 DOCUMENTS AND BOOKS OF ACCOUNTS WERE FOUND AND SEI ZED FROM THE PREMISES OF THE ASSESSEE WHICH THE ASSESSEE HAS HIM SELF ADMITTED BY PLACING THE EVIDENCES ON RECORD I.E. PAGES 1-4 O F THE PAPER BOOK VOLUME 1 THAT ARE ANNEXURE A-1 TO A-11, ANNEXURE A- 2 TO A14; A-6 TO A-21 OF THE ASSESSEES PAPER BOOK VOLUME NO. 1. THE CONTENTION RAISED BY THE ASSESSEE IS NOT CORRECT, BECAUSE IT C AN BE SEEN FROM THE COPY OF THE 3 RD AND FINAL PANCHNAMA DATED 16.7.1999 PLACED BY THE ASSESSEE IN HIS PAPER BOOK VOLUME NO. 1 PAGE 29-32 IN WHERE NEW VALUABLE ITEMS WERE FOUND AND INVENTORIZ ED BY THE SEARCH TEAM WHICH HAD BEEN FOUND AT THE TIME OF DRA WING THE 1 ST AND 2 ND PANCHNAMA IN THE MONTH OF MARCH, 1999 AND MAY, 1 999 RESPECTIVELY. ACCORDING TO THE 3 RD PANCHNAMA DATED 16.7.1999 COLUMN 5(B)(I) VARIOUS ITEMS WERE FOUND THAT ARE AN N-2, INVENTORY OF CREDIT CARDS; ANN-3, INVENTORY OF FOREIGN VISITS ; ANN-4, INVENTORY OF MOBILE. 6.1 HE SUBMITTED THAT ASSESSEE HAS NOT PLACED IN TH E PAPER BOOK THESE DOCUMENTS, THE COPIES OF THE ANNEXURES ANN-2 TO ANN-4, PREPARED AT THE TIME OF DRAWING THE 3 RD AND FINAL PANCHNAMA DATED 16.7.1999. BUT THE COMPARISON OF THE NAMES OF THE SE ANNEXURES WITH THE ANNEXURES PREPARED AT THE TIME OF DRAWIN G THE 1 ST PANCHANAMA DATED 23.3.1999 WHICH HAS BEEN PLACED BY THE AR AT PAGE 1-4, ALONGWITH THE ANNEXURE 1 TO 14 IN ASSESS EES PAPER BOOK PAGE 5 TO 22 WILL REVEAL THAT ABOVE STATED ANNEXURE S ANN-2 TO ANN- 4, PREPARED AT THE TIME OF DRAWING OF THIRD AND F INAL PANCHNAMA DATED 16.7.1999 WERE ENTIRELY DIFFERENT THAN THE AN NEXURE ANN-1 TO ANN-14, PREPARED AT THE TIME OF DRAWING OF FIRST PANCHNAMA DATED 23.3.1999. LD. CIT(DR) STATED THAT AT THE TI ME OF DRAWING OF 1 ST PANCHANAMA DATED 23.3.1999 NO INVENTORY WAS PREPAR ED IN RESPECT OF MOBILES AND FOREIGN VISITS, AND SUCH VAL UABLE WERE FOUND ONLY AT THE TIME OF DRAWING OF THIRD AND FINAL PANC HAMA DATED 16.7.1999. AS REGARDS THE CREDIT CARDS, WHILE THE C REDIT CARDS FOUND AT THE TIME OF DRAWING OF FIRST PANCHANAMA DATED 23 .3.1999 WERE IT(SS)A-2 & 3/DEL/2011& CO NO. 189/DEL/2011 (BP-01.04.1988 TO 23.03.1999) 15 LISTED / INVENTORISED AT ANNEXURE-7 WHICH THE ASSES SEE HAS ATTACHED AS APB PAGE 12, THE CREDIT CARD FOUND AT THE TIME O F DRAWING OF THIRD AND FINAL PANCHANAMA DATED 16.7.1999 WERE LIS TED / INVENTORISED AT ANNEXURE-2. LD. CIT(DR) FINALLY S UBMITTED THAT AS THE STATUTE DOES NOT PLACE ANY LIMITATION ON THE A UTHORISED OFFICER THAT SEARCH MUST BE TEMPORARILY SUSPENDED AND RESTR AINT ORDER MUST BE PASSED, ONLY AND ONLY IN THE SITUATION WHEN HE / SHE IS FULLY AWARE THAT IN THE SUBSEQUENT FUTURE DATE(S), WHEN T HE RESTRAINT ORDER WILL BE LIFTED, THE VALUABLE MUST BE FOUND AN D / OR SEIZED. IN THE END, LD. CIT(DR) STATED THAT THE ARGUMENTS ADVA NCED BY THE LD. COUNSEL FOR THE ASSESSEE IS CONTRARY TO THE REC ORD AVAILABLE WITH THE BENCH AND IT IS A MATTER OF RECORD THAT VARIOUS NEW VALUABLE ITEMS WERE FOUND AND INVENTORISED BY THE SEARCH TEA M AT THE TIME OF SUBSEQUENT SEARCH CARRIED OUT IN JULY, 1999 AND 3 RD PANCHANAME WAS DRAWN, WHICH HAD NOT BEEN FOUND AT THE TIME OF DRAWING OF FIRST OR SECOND PANCHANAM DRAWN IN THE MONTH OF MAR CH AND MAY, 1999 RESPECTIVELY MEANING THEREBY THAT IN THE 3 RD PANCHANMA DRAWN IN THE MONTH OF JULY, 1999 VARIOUS NEW VALUAB LE ITEMS WERE FOUND BY THE SEARCH TEAM, RESULTED IN DISCOVERY OF VARIOUS NEW VALUABLES ITEMS IN THE POSSESSION OF THE ASSESSEE MERELY BECAUSE NO SEIZURE WAS EFFECTED ON THE NEW VALUABLE FOUND I N THE SEARCH CARRIED OUT IN JULY, 1999, IT CANNOT LEAD TO THE CO NCLUSION THAT SEARCH WAS CARRIED OUT JUST TO EXTEND THE TIME LIMI T TO PASS THE ASSESSMENT ORDER. ACCORDINGLY, THE SEARCH WAS VAL IDLY CONCLUDED ONLY IN JULY, 1999, AND THEREFORE, THE ASSESSMENT W AS CORRECTLY FRAMED WITHIN THE TIME LIMIT WHICH EXPIRED ONLY ON 31.7.2001, BEING TWO YEARS FROM THE END OF THE MONTH IN WHICH SEARCH WAS CONCLUDED, AS THE ASSESSMENT ORDER WAS PASSED ON 2 5.7.2001. LASTLY, LD. CIT(DR) STATED THAT THE CASE LAWS RELIE D UPON BY THE LD. COUNSEL FOR THE ASSESSEE ARE NOT APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE CASE OF THE ASSESSEE AND REQUE STED THAT THE LEGAL ISSUES RAISED BY THE LD. COUNSEL FOR THE ASSE SSEE MAY BE IT(SS)A-2 & 3/DEL/2011& CO NO. 189/DEL/2011 (BP-01.04.1988 TO 23.03.1999) 16 DECIDED IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE AND ON THE OTHER LEGAL ISSUES, HE RELIED UPON THE IMPUGNED ORDER OF THE LD. CIT(A). 7. NO OTHER LEGAL ISSUES HAVE BEEN ARGUED BY BOTH T HE PARTIES. 8. WE HAVE HEARD BOTH THE PARTIES ON THE LEGAL ISS UE RAISED BY THE ASSESSEE BY STATING THAT ASSESSMENT ORDER DATED 25.7.2001 IN THE CASE OF THE ASSESSEE WAS PASSED U/S. 158BC OF THE INCOME TAX ACT, 1961 IS BARRED BY LIMITATION. WE HAVE GONE THROUGH THE ORDERS PASSED BY THE REVENUE AUTHORITIES ALONGWITH THE RELEVANT PROVISIONS OF LAW I.E. SECTION 158BE OF THE ACT AS WELL AS DOCUMENTARY EVIDENCES FILED BY THE ASSESSEE AND THE REVENUE ESPECIALLY THREE PANCHNAMAS AS REFERRED BY BOTH TH E PARTIES IN THEIR WRITTEN SUBMISSIONS. WE ARE OF THE VIEW THAT AS POINTED OUT BY BOTH THE PARTIES THAT 1 ST PANCHNAMA IN PURSUANCE OF SECTION 132 OF THE I.T. ACT WAS DRAWN ON 23.03.1999 AT THE SEAR CHED PREMISES OF THE ASSESSEE. ASSESSEE HAS ENCLOSED THE SAME AT PAGES 1-4 OF THE PAPER BOOK VOLUME I. AS PER THE 1 ST PANCHNAMA VARIOUS DOCUMENTS AND BOOKS OF ACCOUNTS WERE FOUND AND SEIZ ED BY THE DEPARTMENT THAT ARE ANNEXURE A(A-1 TO A-11); ANNEXU RE (A-2 TO A- 14) WHICH AT PAGE NO. 6 TO 21 OF THE ASSESSEES PAP ER BOOK VOLUME- 1. ACCORDING TO THE SECOND PANCHNAMA DATED 21.5. 1999 WHICH IS AT PAGES 23-26 OF THE ASSESSEES PAPER BOOK VOLUME NO. 1 AT THE SAME SEARCHED PREMISES OF THE ASSESSEE. ACCORDING T O THE ASSESSEE NO FRESH DOCUMENT OR MATERIAL WAS FOUND / SEIZED FROM THE RESIDENTIAL PREMISES OF THE ASSESSEE. BUT RESTRAIN ED ORDER DATED 21.5.1999 WAS PASSED U/S. 132(3) OF THE ACT IN RES PECT OF ROLLS ROYCE CAR NO. DL1CE1233 PARKED IN THE GARAGE AND (I I) FRONT DOOR OF THE ROOM OF THE ASSESSEE, WERE CONTINUED (PLACED AT PAPER BOOK VOL. 1 AT PAGES 27-28). THE PERIOD OF VISIT ON THE SAID DATE FROM 1.30 PM TO 4.00 PM I.E. ABOUT 2.5 HOURS. ACCORDING TO THE ASSESSEE SEARCH WAS CONCLUDED ON 1 ST PANCHANMA ITSELF I.E. 23.3.1999, BUT AS STATED BY THE ASSESSEE IN HIS WRITTEN SUBMISSIONS A ND AS PER HIS IT(SS)A-2 & 3/DEL/2011& CO NO. 189/DEL/2011 (BP-01.04.1988 TO 23.03.1999) 17 PAPER BOOK PAGES MENTIONED ABOVE RESTRAINED ORDER D ATED 21.5.1999 WAS PASSED U/S. 132(3) OF THE ACT MEANING THEREBY THAT THE SEARCH WAS NOT CONCLUDED ON THE 1 ST PANCHNAMA ITSELF I.E. ON 23.3.1999, IT IS CONTINUED VIDE PANCHNAMA DATED 21. 5.1999. SIMILARLY, THE 3 RD PANCHNAMA WAS ALSO DRAWN ON 16.7.1999 AT THE SAME SEARCHED PREMISES OF THE ASSESSEE WHICH THE AS SESSE HAS PLACED IN HIS PAPER BOOK AT PAGES 29-32 OF THE APB VOL.I. WE HAVE PERUSED THESE THREE PANCHNAMS DATED 23.3.1999; 21.5 .1999 AND 16.7.1999 AND WE ARE OF THE VIEW THAT VARIOUS NEW V ALUABLE ITEMS WERE FOUND AND INVENTORIZED BY THE SEARCH TEAM WHIC H HAVE BEEN FOUND AT THE TIME OF DRAWING OF 1 ST PANCHANAMA AND 2 ND PANCHNAMA DRAWN IN THE MONTH OF MARCH, 1999 AND MAY, 1999 RES PECTIVELY. ASSESSEE HAS FILED ONE PAPER BOOK DATED 4.3.2011 CO NTAINING PAGES 1-54 IN WHICH HE HAS ATTACHED THE (1) PANCHNAMA DAT ED 23.3.1999 (PAGES 1-4); (2) (ANNEXURE A-1 TO A-11) WERE FOUND AND SEIZED (PAGE 5); (3) ANNEXURE A-2 TO A-4 FOUND BUT NOT SEI ZED (PAGE 6- 21); (4) ORDER U/S. 132(3) DATED 23.3.1999 DATED 23 .3.1999 ISSUED IN RESPECT OF : GARAGE IN WHICH ROLLS ROYS CAR IN I S PARKED AND ONE ROOM OF ABHISHEK VERMA, IN WHICH CLOTHES, ELECTRICA L ITEMS AND OTHER VALUABLES ARE KEPT (PAGES 11); (5) PANCHNAMA DATED PANCHAMA DATED 21.5.1999 (PAGES 23-26); (6) ORDER U /S. 132(3) DATED 21.5.1999 ISSUED IN RESPECT OF ROLLS ROYS CAR PARKED IN GARAGE, AND ROOM OF ABISHEK VERMA IN WHICH CLOTHES, ELECTRICAL ITEMS AND OTHER VALUABLES ARE KEPT (PAGES 27 & 28); (7) PANCHNAMA DATED PANCHAMA DATED 16.7.1999 (29-32); ( 8) ORDER SHEET OF PROCEEDINGS BEFORE THE CIT(A) (PAGES 33-41 ); (9) WRITTEN SUBMISSIONS DATED 14.7.2009 FILED BEFORE THE CIT(A) ; (10) LETTER DATED 12.10.1999 OF THE CIT(A) SEEKING COMMENTS AND REPORT OF THE AO AND (11) LETTER DATED 11.10.2010 OF THE AO. ASSESSEE HAS ALSO CERTIFIED THAT ALL THE DOCUMENTS AT SERIAL NO. 1 TO 7 WERE AVAILABLE BEFORE THE AO AND THE CIT(A) AND REST AR E PART OF PROCEEDINGS / HEARING BEFORE THE CIT(A). IT(SS)A-2 & 3/DEL/2011& CO NO. 189/DEL/2011 (BP-01.04.1988 TO 23.03.1999) 18 8.1 KEEPING IN VIEW THE AFORESAID DOCUMENTARY EV IDENCES WHICH THE ASSESSEE HAS HIMSELF FILED, WE ARE OF THE VIEW THAT AS PER THE 3 RD PANCHNAMA DATED 16.7.1999 WHICH THE ASSESSEE HAS AT TACHED IN THE PAPER BOOK AT PAGE NO. 29, BUT AT COLUMN NO. 5(B)(I ) FOLLOWING ISSUES WERE FOUND:- (I) ANN-2, INVENTORY OF CREDIT CARDS. (II) ANN-2, INVENTORY OF FOREIGN VISITS. (III) ANN-4, INVENTORY OF MOBILE. 8.2 AT THE TIME OF DRAWING THE 1 ST PANCHNAMA DATED 23.3.1999 NO INVENTORY WAS PREPARED IN RESPECT OF THE MOBILE AND FOREIGN VISITS AND SUCH VALUABLES WERE FOUND ONLY AT THE TIME OF DRAWING OF 3 RD PANCHNAMA DATED 16.7.1999. AS THE ASSESSEE HIMSELF ADMITTED IN THE DOCUMENTARY EVIDENCES FILED BY THE ASSESSEE TH AT IN THREE PANCHNAMAS THE SEARCH TEAM HAS TAKEN IN POSSESSION VARIOUS VALUABLES ITEMS WHICH CLEARLY ESTABLISH THE SEARCH CARRIED OUT IN THE MONTH OF JULY, 1999 I.E. THE LAST PANCHNAMA DATED 1 6.7.1999 AND VARIOUS VALUABLE ITEMS WERE TAKEN INTO POSSESSION W ERE NOT SEIZED. MERELY BECAUSE NO SEIZURE WAS EFFECTED ON THE NEW VALUABLES FOUND IN THE SEARCH CARRIED OUT JUST TO EXTEND THE TIME LIMIT TO PASS THE ASSESSMENT ORDER. KEEPING IN VIEW OF THE FACTS AN D CIRCUMSTANCES EXPLAINED ABOVE, AFTER EXAMINING THE THREE PANCHNAM AS DATED 23.3.1999; 21.5.1999 AND 16.7.1999, WE ARE OF THE C ONSIDERED VIEW THAT SEARCH WAS VALIDLY CONCLUDED ONLY IN JULY , 1999 AND ASSESSMENT WAS SEPARATELY FRAMED WITHIN THE TIME LI MIT WHICH EXPIRES ONLY ON 31.7.2001 BEING 2 YEARS FROM THE EN D OF THE MONTH IN WHICH THE SEARCH WAS CONDUCTED AS THE ASSESSMENT ORDER WAS PASSED ON 25.7.2001. THEREFORE, IN OUR VIEW THE LE GAL GROUNDS RAISED BY THE ASSESSEE IS NOT SUPPORTED BY ANY VALI D DOCUMENTARY EVIDENCES, BUT ON THE CONTRARY, REVENUES CASE IS W ELL SUPPORTED BY THE DOCUMENTARY EVIDENCES, AS PER THE PAPER BOOKS F ILED BY DEPARTMENT ALSO. THE CASE LAWS CITED BY THE LD. CO UNSEL FOR THE ASSESSEE ARE HAVING THE DIFFERENT FACTS AND ARE NOT RELEVANT TO THE IT(SS)A-2 & 3/DEL/2011& CO NO. 189/DEL/2011 (BP-01.04.1988 TO 23.03.1999) 19 PRESENT CASE. THEREFORE, THE LEGAL ISSUE INVOLVED IN GROUND NO. 4, AS ARGUED BY BOTH THE PARTIES IS DECIDED AGAINST TH E ASSESSEE AND IN FAVOUR OF THE REVENUE BY UPHOLDING THE ORDER OF THE LD. CIT(A) ON THIS ISSUE. SINCE NO OTHER LEGAL ISSUES HAVE BE EN ARGUED BY THE BOTH THE PARTIES, HENCE, NEED NOT BE ADJUDICATED. 9. AS REGARDS THE MERITS OF THE CASE, WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW ALONGWITH THE DOCUMENTARY EVIDENCES FILED BY BOTH THE PARTIE S IN THE SHAPE OF PAPER BOOKS. WE ARE OF THE CONSIDERED VIEW THAT THE ISSUE INVOLVED IN GROUND NO. 1 REGARDING NON-OPPORTUNITY OF HEARIN G TO THE ASSESSEE BY THE LD. CIT(A), WE HAVE GONE THROUGH TH E ORDER PASSED BY THE LD. CIT(A) AND WE ARE OF THE VIEW THAT FULL OPPORTUNITY WAS PROVIDED BY THE LD. CIT(A) TO THE ASSESSEE. THE ASS ESSEE HAS ARGUED HIS CASE BY FILING VARIOUS DOCUMENTARY EVIDE NCES BEFORE THE LD. CIT(A) AND THE LD. FIRST APPELLATE AUTHORITY HA S PASSED A VERY ELABORATE ORDER BY PARTLY ALLOWING THE APPEAL FILED BY THE ASSESSE. THEREFORE, THE ISSUE RAISED IN GROUND NO. 1 IS DISM ISSED. 9.1 AS REGARDS GROUND NO. 2, 3, 5 & 6 ARE CONCERNED , WE NOTE THAT THESE ISSUES WERE NOT ARGUED, AT THE TIME OF HEARIN G BY BOTH THE PARTIES, HENCE, THE SAME NEED NOT BE ADJUDICATED. 9.2 AS REGARDS THE GROUND NO. 7 RAISED BY THE ASSES SEE IN WHICH THE ASSESSEE HAS CHALLENGED THE ADDITIONS ON MERITS WHICH WERE UPHELD BY THE LD. CIT(A) I.E. TOTAL 25 ADDITIONS WH ICH THE ASSESSEE HAS MENTIONED IN GROUND NO. 7 AT PAGE 3-4 OF THE GR OUNDS OF APPEAL. AFTER HEARING BOTH THE PARTIES AND PERUSIN G THE ORDERS OF THE REVENUE AUTHORITIES, WE ARE OF THE VIEW THAT AS REGARDS TO ADDITION OF RS. 37 LACS ON ACCOUNT OF INVESTMENT OF M/S ESAM INDIA LTD. AS UNDISCLOSED INCOME OF THE ASSESSEE, WE HAV E PERUSED THE SEIZED MATERIAL WHICH AT PAGE 8, 11, & 12 TO ANNE XURE 4 SEIZED FROM 4, SAFDARJUNG LANE, NEW DELHI ON 23.3.1999, M ENTIONED BY THE AO. NO DOUBT THAT ASSESSEE HAS DENIED THESE D EPOSITS, BUT AS PER THE FINDING OF THE REVENUE AUTHORITIES BELOW SU PPORTED BY THE IT(SS)A-2 & 3/DEL/2011& CO NO. 189/DEL/2011 (BP-01.04.1988 TO 23.03.1999) 20 SEIZED MATERIAL M/S ESAM INDIA LTD. WAS INCORPORATE D ON 10.1.1990.THE ASSESSEE IS NO. 1 OF THE ORIGINAL SUB SCRIBER TO THE MEMORANDUM OF ASSOCIATION OF THE COMPANY. THE NAM E OF M/S ESAM TRADING CO. LTD. WAS CHANGED TO M/S ESAM IND IA LTD. AND TO M/S ALTA VISTA (INDIA) LTD. THE ASSESSEE WAS THE DI RECTOR OF M/S ESAM TRADING INDIA LTD. TILL 21.11.1993, THE BALANC E SHEET AND PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDING ON 31.3 .1993 SIGNED BY THE ASSESSEE IN THE CAPACITY OF DIRECTOR FILED WITH THE REGISTRAR OF COMPANIES, NEW DELHI SHOWS THAT M/S ESAM TRADING IN DIA LTD. HAS OUTSTANDING LOAN OF RS. 37 LACS AS ON 31.3.1993 REC EIVED FROM THE DIRECTORS. DURING THE SEARCH OPERATION IN THE CASE OF THE ASSESSEE ON 23.3.1999 ARE SUPPORTED BY THE CASH BOOK OF M/S ESAN TRADING INDIA LTD. WHEREIN THESE DEPOSITS HAVE BEEN RECORDE D IN THE NAME OF ABHISHEK VERMA (ASSESSEE). THE ASSESSEE WAS THE DIRECTOR AT THAT TIME AS THE AUDITED BALANCE SHEET OF M/S ESAM TRADING COMPANY LTD. AS ON 31.3.1993 FILED WITH THE REGISTR AR OF COMPANIES, NEW DELHI. THEREFORE, KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES AS EXPLAINED ABOVE, WITH THE SUP PORT OF DOCUMENTARY EVIDENCES, WE ARE OF THE VIEW THAT INVE STMENT OF RS. 37 LACS MADE BY THE ASSESSEE AS PER THE DOCUMEN TS SEIZED FROM HIS RESIDENCE DURING THE SEARCH, HENCE, THE ADDITIO N IN DISPUTE HAS BEEN RIGHTLY MADE BY THE AO AS UNDISCLOSED INCOME OF THE ASSESSEE WHICH WAS ALSO RIGHTLY UPHELD BY THE LD. CIT(A). HE NCE, WE UPHOLD THE ORDER OF THE LD. CIT(A) ON THIS ISSUE OF UNDISC LOSED INCOME AMOUNTING TO RS. 37 LACS ON ACCOUNT OF INVESTMENTS IN M/S ESAM INDIA LTD. 9.3 AS REGARDS THE COMMISSION INCOME OF RS. 35 LACS . THE AO HAS MADE THE ADDITION AND DISCUSSED THE ISSUE IN PAGE 5-6 VIDE PARA NO. 2 AND THE LD. CIT(A) HAS UPHELD THE SAME IN PAR A NO. 6 TO 6.2 AT PAGE NO. 35 AND 36 OF THE IMPUGNED ORDER. WE HA VE GONE THROUGH THE FINDINGS GIVEN BY THE REVENUE AUTHORITI ES ALONGWITH THE ARGUMENTS ADVANCED BY BOTH THE PARTIES AS WELL AS T HE IT(SS)A-2 & 3/DEL/2011& CO NO. 189/DEL/2011 (BP-01.04.1988 TO 23.03.1999) 21 DOCUMENTARY EVIDENCES FILED. WE ARE OF THE VIEW THA T VIDE QUESTIONNAIRE DATED 17.6.2001 ASSESSEE WAS GIVEN OP PORTUNITY BY THE AO TO EXPLAIN THIS AMOUNT. IN RESPONSE TO THE QUESTIONNAIRE DATED 17.6.2001 THE ASSESSEE RECORDED HIS STATEMEN T DATED 16.7.1999 BY STATING THAT THE ONLY INVESTMENT IN T HE SHARE CAPITAL OF M/S ESAM INDIA LTD. HAS BEEN MADE IN 1991-92 WHI CH IS A CASH DEPOSIT IN COMPANY ACCOUNT AMOUNTING TO RS. 35 LAC S. THIS WAS MADE FROM HIS UNDISCLOSED AND UNACCOUNTED INCOME, W HICH HE WAS OFFERING FOR TAXATION AND HE SHALL FILE THE RETURN OF INCOME DECLARING SUCH AMOUNT AND PAY THE NECESSARY TAXES ON THIS INC OME. WE ARE OF THE VIEW THAT IN VIEW OF THE STATEMENT MADE BY T HE ASSESEE AND NON-FURNISHING OF ANY EVIDENCE SHOWING THAT ASSESSE E HAS NOT RECEIVED THIS COMMISSION INCOME. THE AO HAS RIGHTL Y MADE THIS ADDITION AND LD. CIT(A) HAS ALSO RIGHTLY UPHELD THE SAME, HENCE, WE UPHOLD THE ORDER OF THE LD. CIT(A) ON THIS ISSUE. 9.4 AS REGARDS THE ADDITION OF RS. 4,02,557/- ON AC COUNT OF FOREIGN TRAVELS EXPENDITURE. AFTER HEARING BOTH THE PARTIES AND PERUSING THE DOCUMENTARY EVIDENCES FILED BY THE ASS ESSEE WHICH IS AT ANNEXURE A2 & A-6. THE ASSESSEE HAS NOT FILED ANY EVIDENCE IN SUPPORT OF HIS CLAIM ON THIS ADDITION AND BY MEREL Y DENYING THAT ASSESSEE HAS NOT INCURRED ANY EXPENDITURE. HENCE, THIS ADDITION IS LIABLE TO BE MADE IN THE ABSENCE OF ANY EVIDENCE FI LED BY THE ASSESSEE. WE ARE OF THE VIEW THAT AMOUNT OF RS. 166 40 + 89465 + 226652 + 69800 TOTALING TO RS. 402557/- ON ACCOUNT OF FOREIGN TRAVEL EXPENSE HAS RIGHTLY BEEN MADE BY THE ASSESSI NG OFFICER AND UPHELD BY THE LD. CIT(A), BECAUSE THE ASSESSEE HAS NOT PRODUCED ANY DOCUMENTARY EVIDENCES SUPPORTING HIS CLAIM. HEN CE, WE UPHOLD THE IMPUGNED ORDER ON THIS ISSUE. 9.5(I). AS REGARDS ADDITION OF RS. 29,88,526/- ON A CCOUNT OF DEPOSIT IN THE BANK. THE ASSESSING OFFICER HAS PROVIDED OPP ORTUNITY TO THE ASSESSEE TO EXPLAIN THIS DEPOSITS, BUT THE ASSESSE E HAS NOT AVAILED THE SAME AND HAS NOT FILED ANY EVIDENCE, EVEN NO EX PLANATION IT(SS)A-2 & 3/DEL/2011& CO NO. 189/DEL/2011 (BP-01.04.1988 TO 23.03.1999) 22 REGARDING THIS DEPOSIT HAS BEEN GIVEN BY THE ASSESS EE. THEREFORE, THE REVENUE AUTHORITIES HAVE RIGHTLY TREATED THE SA ME AS UNDISCLOSED INCOME OF THE ASSESSEE, HENCE, WE UPHOL D THE ORDER OF THE LD. CIT(A) ON THIS ISSUE. 9.5(II) AS REGARDS THE ADDITION OF RS. 1,19,41,051/ - MADE ON ACCOUNT OF EXPENDITURE ON REPAIR AND RENOVATION ON THE ACCOMMODATION OWNED BY THE CENTRAL GOVERNMENT OF IN DIA. THE AO HAS GIVEN OPPORTUNITY TO THE ASSESSEE TO EXPLAIN THE EXPENDITURE ON REPAIR AND RENOVATION ON THE ACCOMMODATION. BUT AFTER PERUSING THE ORDERS PASSED BY THE REVENUE AUTHORITIES, WE AR E OF THE VIEW THAT REVENUE HAS MADE THIS ADDITION ON THE BASIS O F THE DOCUMENTS WHICH WERE FOUND AND SEIZED AT THE RESIDENTIAL PREM ISES OF THE ASSESSEE AND FROM THE OFFICE PREMISES OF THE COMPAN Y ESAM INDIA LTD. WHEREIN 99.98% EQUITY SHARES IS HELD BY THE AS SESSEE. THESE DOCUMENTS WERE RECORDED IN RESPECT OF REPAIR AND R ENOVATION. ASSESSEE HAS NOT EXPLAINED THE SOURCE OF SUCH EXPEN SES AND HENCE, WE ARE OF THE VIEW THAT IN THE ABSENCE OF ANY EXPLA NATION AND DOCUMENTARY EVIDENCES, THE AO HAS RIGHTLY MADE THE ADDITION IN DISPUTE AND LD. CIT(A) HAS RIGHTLY UPHELD THE SAME, THEREFORE, WE UPHOLD THE ORDER ON THIS ISSUE AND UPHELD THE IMPUG NED ORDER OF THE LD CIT(A) ON THIS ISSUE. 9.6 THE AO HAS MADE THE ADDITION OF RS. 1,90,360/- ON ACCOUNT OF EXPENDITURE ON PURCHASE OF CELL PHONES AND TREATED THE SAME AS UNDISCLOSED INCOME OF THE ASSESSEE. ON THE BASIS OF ANNEXURE A-1 SEIZED DURING THE SEARCH OPERATION IN THE CASE OF T HE ASSESSEE ON 23.3.1999 FOR THE PURCHASE OF CELL PHONES, AFTER GI VING OPPORTUNITY TO THE ASSESSEE. THE ASSESSEE HAS NOT ATTENDED THE AO AND NOT FILED ANY REPLY. THEREFORE, IN OUR VIEW THIS ADDI TION HAS RIGHTLY BEEN MADE AND UPHELD BY THE LD. CIT(A). HENCE, WE U PHOLD THE ORDER OF THE LD. CIT(A) ON THIS ISSUE. 9.7 THE AO HAS MADE THE ADDITION OF RS. 1,95,44,196 /- ON ACCOUNT OF INVESTMENTS IN PURCHASE OF CARS AND TREA TED THE SAME AS IT(SS)A-2 & 3/DEL/2011& CO NO. 189/DEL/2011 (BP-01.04.1988 TO 23.03.1999) 23 UNDISCLOSED INCOME OF THE ASSESSEE. AFTER GOING THR OUGH THE ORDERS PASSED BY THE REVENUE AUTHORITIES, WE ARE OF THE VI EW THAT NO DOUBT THE ASSESSEE HAS DENIED THE OWNERSHIP OF THESE VEHI CLES, BUT HAS NOT SUBSTANTIATED HIS VERSION WITH THE SUPPORT OF A NY EVIDENCE. ON THE CONTRARY, THE ROLLS ROYCE CAR NO. DLIC1233 AND FERRARI AND CONTESSA WERE FOUND AND MENTIONED IN THE DOCUMENTS SEIZED FROM THE PREMISES OF THE ASSESSEE OWNED BY THE ASSESSEE AND THE ASSESSEE HAS NOT ABLE TO EXPLAIN THE SOURCE OF INVE STMENTS IN THESE VEHICLES. THEREFORE, WE UPHOLD THE IMPUGNED ORDER ON THIS ISSUE. 9.8. AS REGARDS THE UNEXPLAINED EXPENDITURE OF RS. 38,74,444/-, THE AO TREATED THE SAME AS UNDISCLOSED INCOME OF T HE ASSESSEE AND THE AO HAS MADE THE ADDITION ON THE BASIS OF TH E SEIZED DOCUMENTS AND AFTER GIVING THE OPPORTUNITY TO THE ASSESSEE TO EXPLAIN THE SAME. ASSESSEE NEITHER ATTENDED THE AO IN RESPONSE TO THE SUMMONS TO EXPLAIN THE SEIZED DOCUMENTS NOR FIL ED ANY REPLY STATING THE REASONS FOR NON-ATTENDANCE IN SPITE OF THE FACT THAT PHOTOCOPIES OF THE DOCUMENTS WERE GIVEN TO THE ASSE SSEE AT THE TIME OF SEIZED OF THESE DOCUMENTS. AFTER GIVING O PPORTUNITY TO THE ASSESSEE AND ON THE BASIS OF THE DOCUMENTARY EVIDE NCE FILED BY THE ASSESSEE ALONGWITH THE EXPLANATION, THE LD. CIT(A) IN PARA NO. 12.3 AT PAGE NO. 53-54 OF THE IMPUGNED ORDER HELD THAT O PPORTUNITY GIVEN BY THE AO WAS NOT AVAILED BY THE ASSESSEE AND DUE TO LACK OF EVIDENCES SUPPORTING THE CLAIM OF THE ASSESSEE, THE LD. CIT(A) HAS GIVEN THE RELIEF OF RS. 2,20,940/- AND THE BALANCE OF RS. 36,53,504/- WAS RIGHTLY BEEN UPHELD BY THE LD. CIT( A) AS UNDISCLOSED INCOME OF THE ASSESSEE FOR THIS BLOCK P ERIOD. IN SPITE OF THE FACT THAT THE ASSESSEE REMAINED NON-COOPERAT IVE BEFORE THE REVENUE AUTHORITIES, SUFFICIENT RELIEF HAS BEEN GIV EN TO THE ASSESSEE, HENCE, NO INTERFERENCE IS CALLED FOR IN THE WELL RE ASONED ORDER OF THE LD. CIT(A) ON THIS ISSUE, THEREFORE, WE UPHOLD THE FINDING OF THE LD. CIT(A) ON THIS ISSUE. IT(SS)A-2 & 3/DEL/2011& CO NO. 189/DEL/2011 (BP-01.04.1988 TO 23.03.1999) 24 9.9. AS REGARDS THE ADDITION OF RS. 7,24,71,120/- O N ACCOUNT OF DEPOSITS IN THE BANK OF MAHARASTARA AND TREATING TH E SAME AS UNDISCLOSED INCOME OF THE ASSESSEE. ACCORDING TO TH E ASSESSSEE, THE AO HAS NOT CONSIDERED THE DETAILED REPLY FILED BY T HE ASSESSEE AND WRONGLY MADE THE ADDITION IN DISPUTE AND AO HAS NO T BROUGHT ON RECORD ANY EVIDENCE OR EVIDENCE TO ESTABLISH THE AL LEGATIONS OF HEAVY CASH DEPOSIT MADE BY THE ASSESSEE. BUT AS PER THE ORDER OF THE AO AS WELL AS LD. CIT(A) THE AO HAS GIVEN OPPOR TUNITY BY ISSUING THE QUESTIONNAIRE DATED 7.6.2001 TO THE ASS ESSEE REQUIRING TO EXPLAIN THE DEPOSITS MADE IN BANK OF MAHARASTARA , BUT THE ASSESSEE HAS DENIED THE SAME. ACCORDING TO AO THI S BANK ACCOUNT IN THE NAME OF M/S TANGERINE INFORMATIQUE SYSTEMS WAS INTRODUCED BY SH. ABHISHEK VERMA, SH. MANISH BHATNA GAR WAS THE AUTHORIZED PERSON TO OPERATE THIS ACCOUNT. SH. M ANISH BHATNAGAR WAS DIRECTOR IN COMPANY NAMED M/S KUDOS EXPORTS PV T. LTD. WHICH IS A 100% SUBSIDIARY OF M/S ESAM INDIA LTD. THE MOR E THAN 90% OF EQUITY CAPITAL OF M/S ESAM INDIA LTD. IS OWNED BY S H. ABHISHEK VERMA. AFTER GOING THROUGH THE ORDERS PASSED BY THE REVENUE AUTHORITIES, WE ARE OF THE VIEW THAT ADDITION OF RS . 7,24,71,120/- WAS MADE ON ACCOUNT OF UNDISCLOSED INCOME DEPOSIT ED IN THE BANK OF MAHARASTARA, NEW DELHI IN THE BANK ACCOUNT OF M/ S TANGERINE INFORMATIQUE SYSTEMS, KUDOS EXPORTS PRIVATE LTD., A K EXPORTS, AKANSHA EXPORTS. THE CHAIN OF OWNERSHIP AND AUTHO RIZED SIGNATORIES OF EACH OF THESE CONCERNS AS BROUGHT OU T BY THE AO IN THE ASSESSMENT ORDER CLEARLY PROVE THAT THE MAIN PE RSON TO WHOM ALL THESE ACCOUNTS BELONGED IS THE ASSESSEE ONLY AS THIS CHAIN STARTED WITH THE BANK ACCOUNT OF KUDOS EXPORTS PV T. LTD. WHICH IS A 100% SUBSIDIARY OF ESAM INDIA LTD. WHEREIN THE ASSE SSEE HAS OWNERSHIP OF 99.98% EQUITY. LD. CIT(A) HAS ELABOR ATELY DISCUSSED THE SAME AT PAGE NO. 55-56 OF THE IMPUGNED ORDER A ND HELD THAT ALL THESE FIRMS WERE FOUND TO BE NON-EXISTENCE AT T HE GIVEN ADDRESS AND THEREFORE, IN OUR VIEW THE AO HAS RIGHTLY BEEN MADE THE IT(SS)A-2 & 3/DEL/2011& CO NO. 189/DEL/2011 (BP-01.04.1988 TO 23.03.1999) 25 ADDITION WHICH THE LD. CIT(A) HAS UPHELD. HENCE, W E UPHOLD THE IMPUGNED ORDER ON THIS ISSUE. 9.10. THE AO MADE THE ADDITION OF RS. 1,42,10,625/- ON ACCOUNT OF ALLEGED TRANSACTIONS RECORDED IN THE DIARY ALLEGED TO BE HANDED OVER BY MS. ASMITA AGGARWAL ON 16.7.1999 AND TREATED THE SAME AS UNDISCLOSED INCOME OF THE ASSESSEE. ASSESSEE HAS GI VEN THE OPPORTUNITY TO THE ASSESSEE TO EXPLAIN THIS AMOUNT AND ASSESSEE HAS STATED THAT MS. ASMITA AGGARWAL HAVING BITTER R ELATIONS WITH THE ASSESSEE AND FINALLY RESULTED IN LEGAL DIVORCE AND THERE IS NO EVIDENCE OR MATERIAL TO ESTABLISH THAT THE TRANSACT IONS RECORDED IN THE DIARY ACTUALLY TOOK PLACE. AFTER CONSIDERING THE REPLY FILED BY THE ASSESSEE AND DETAILED DISCUSSIONS, THE AO HAS M ADE THE ADDITION IN DISPUTE ON THE BASIS OF DOCUMENTARY EVI DENCES AS REFERRED BY THE AO IN THE ASSESSMENT ORDER AND THE LD. CIT(A) IN THE IMPUGNED ORDER ELABORATELY AND FINALLY UPHELD T HE ADDITION ON THE GROUND THAT THIS ADDITION HAS BEEN MADE ON THE BASIS OF THE DIARY WHICH WAS HANDED OVER TO THE DEPARTMENT BY TH E WIFE OF THE ASSESSEE MRS. ASMITA AGGARWAL. THIS ADDITION HAS BE EN MADE BY THE REVENUE AUTHORITIES ON THE BASIS OF DOCUMENTARY EVI DENCES AND ESPECIALLY TO THE ASSESSEE WHO REMAINED NON-COOPERA TIVE WITH THE REVENUE AUTHORITIES AND FOR LACK OF EVIDENCE. ASS ESSEE HAS NOT DISCHARGED HIS BURDEN OF HIS ONUS LAID UPON HIM TO PROVE THAT THIS DIARY DID NOT BELONG TO HIM, BUT HE FAILED TO PROVE THE SAME AND IN THE ABSENCE OF ANY VALID EXPLANATION AND EVIDENCE, THE AO HAS RIGHTLY MADE THE ADDITION OF RS. 1,42,10,625/- FOUN D RECORDED IN THE DIARY AND WHICH HAS BEEN RIGHTLY BEEN UPHELD BY TH E LD. CIT(A). WE ARE OF THE VIEW THAT NO INTERFERENCE IS CALLED F OR IN THE WELL REASONED ORDER PASSED BY THE LD. CIT(A) ON THIS IS SUE, HENCE, WE UPHOLD THE FINDING OF THE LD. CIT(A) ON THIS ISSUE. 9.11 THE ASSESSEE HAS CHALLENGED THE ADDITION OF RS . 79,68,269/- MADE BY THE AO ON ACCOUNT OF INVESTMENTS IN HOUSE H OLD ITEMS AND PERSONAL BELONGINGS AS UNDISCLOSED INCOME OF THE AS SESSEE. THE AO IT(SS)A-2 & 3/DEL/2011& CO NO. 189/DEL/2011 (BP-01.04.1988 TO 23.03.1999) 26 HAS MADE THIS ADDITION AFTER GIVING OPPORTUNITY TO THE ASSESSEE FOR SUBSTANTIATING HIS CLAIM AS WELL AS ON THE BASIS OF THE EVIDENCES. THE LD. CIT(A) HAS UPHELD THE SAME BY HOLDING THAT DURING THE SEARCH OPERATION AT THE RESIDENCE OF THE ASSESSEE ON 23.3.1999 TRAVELLER CHEQUE WORTH RS. 1100 US$ WERE FOUND. A SSESSEE WAS REQUESTED TO EXPLAIN THE SOURCE OF ACQUISITION OF T HESE TRAVELER CHEQUES FAILING WHICH AN AMOUNT OF RS. 38,500/- WAS PROPOSED TO BE TREATED AS UNDISCLOSED INCOME. VIDE HIS REPLY DATED 24.7.2001 ASSESSEE HAS STATED THAT THE TRAVELER CHEQUES WERE PURCHASED OUT OF INCOME EARNED OUT OF INDIA. DURING THE BLOCK AS SESSMENT PROCEEDINGS, ASSESSEE HAS NOT BROUGHT ON RECORD ANY INFORMATION SHOWING THAT HE IN FACT EARNED INCOME OUT OF INDIA DURING THE BLOCK PERIOD. THE AO AS WELL AS LD. CIT(A) HAS RIGHTLY M ADE THE ADDITION OF RS. 79,68,269/- ON ACCOUNT OF UNDISCLOSED INCOME OF THE ASSESSEE, HENCE WE UPHOLD THE SAME ON THIS ISSUE. 9.12 AS REGARDS THE ADDITION OF RS. 1,27,688/- ON A CCOUNT OF FOREIGN EXCHANGE AS UNDISCLOSED INCOME OF THE ASSES SEE. THE AO HAS MADE THE ADDITION ON THE BASIS OF SEIZED MATERI AL AND AFTER GIVING OPPORTUNITY TO THE ASSESSEE, WHICH THE ASSES SE HAS NOT AVAILED THE SAME AND THE LD. CIT(A) HAS RIGHTLY UPH ELD THIS ADDITION IN DISPUTE BY DISMISSING THE GROUND OF THE ASSESSEE , HENCE, WE UPHOLD THE SAME ON THIS ISSUE. 9.13 THE AO HAS MADE THE ADDITION OF RS. 2 LACS ON ACCOUNT OF PAYMENT MADE TO MS. RITA LUTHER AND TREATED THE SAM E AS UNDISCLOSED INCOME OF THE ASSESSEE. THE AO HAS MAD E THE ADDITION ON THE BASIS OF SEIZED MATERIAL MENTIONED IN THE AS SESSMENT ORDER AND THE IMPUGNED ORDER. NO CONTRARY EVIDENCE HAS BE EN FILED BY THE ASSESSEE. THEREFORE, THE AO HAS RIGHTLY MADE THIS A DDITION AND LD. CIT(A) HAS RIGHTLY UPHELD THE SAME, WHICH DOES NO T REQUIRE ANY INTERFERENCE ON OUR PART, HENCE, WE UPHOLD THE SAME . 9.14. AS REGARDS THE ADDITION OF RS. 1 LAC ON ACCOU NT OF PAYMENT TO SH. SANDIP PURI AND TREATING THE SAME AS UNDISCLOSE D INCOME OF THE IT(SS)A-2 & 3/DEL/2011& CO NO. 189/DEL/2011 (BP-01.04.1988 TO 23.03.1999) 27 ASSESSEE. THE REVENUE AUTHORITIES HAS MADE THIS ADD ITION ON THE BASIS OF SEIZED MATERIAL MENTIONED IN THE IMPUGNED ORDER AND ASSESSEE HAS FAILED TO EXPLAIN THE SAME THEREFORE, THIS ADDITION IS UPHELD. 9.15. THE AO HAS MADE THE ADDITION OF RS. 2,77,00,0 00/- ON ACCOUNT OF PROFIT OF M/S DELHI EXPORTS AND TREATED THE SAME AS UNDISCLOSED INCOME OF THE ASSESSEE. ACCORDING TO TH E ASSESSEE, THE AO HAS FAILED TO APPRECIATE THE PROVISIONS OF INCOM E TAX ACT, 1961 AND PARTICULARLY OF SECTION 2(31) WHICH DEFINES PER SON AND FURTHER FAILED TO APPRECIATE THAT THE INCOME OF PARTNERSHIP FIRM IS SEPARATELY ASSESSABLE AND WITHOUT PREJUDICE THE ASSESSEE HAS S UBMITTED THAT AO HAS NOT IN POSSESSION OF ANY EVIDENCE OR MATERIA L TO ESTABLISH THAT M/S DELHI EXPORTS EARNED A PROFIT OF RS. 2,77, 00,000/- AND CONSIDERED THIS PROFIT FOR THE BLOCK PERIOD UPTO 2 3.3.1999. THE AO HAD MADE THE ADDITION IN DISPUTE ON THE BASIS OF QU ESTIONNAIRE DATED 18.6.2001 ASKING THE ASSESSEE TO EXPLAIN THE PAGE NO. 76-77 OF ANNEXURE A-29 SEIZED FROM M/S ESAM INDIA LTD. DU RING THE SEARCH OPERATION ON 23.3.1999. AS PR THIS PAPERS M/ S DELHI EXPORTS EARNED THIS PROFIT. IN REPLY TO THE QUESTION RAISE D BY THE AO THE ASESSEE HAS NOT FURNISHED ANY PROOF OF HAVING FILED THE INCOME TAX RETURN OF HIS CONCERN M/S DELHI EXPORTS, HENCE, ASS ESSING OFFICER HAS MADE THE ADDITION IN DISPUTE. LD. CIT(A) HAS A LSO UPHELD THE IMPUGNED ADDITION ON THE BASIS OF THE FINDING GIVEN BY THE AO. WE HAVE GONE THROUGH THE ORDERS PASSED BY THE REVENUE AUTHORITIES AND WE ARE OF THE VIEW THAT ASSESSEE HAS NOT FURNI SHED ANY PROOF, WHICH IS CONTRARY TO THE EVIDENCE COLLECTED BY THE REVENUE AUTHORITIES THEREFORE, IN THE ABSENCE OF THE SAME T HE ADDITION IN DISPUTE IS DESERVE TO BE UPHELD, HENCE, WE UPHOLD T HE SAME. 9.16. AS REGARDS THE ADDITION OF RS. 3,34,00,000/- ON ACCOUNT OF PROFIT OF M/S GLOBETROTTERS. THE AO HAS MADE THE A DDITION BY HOLDING THAT M/S GLOBETROTTERS, 4, VASANT VIHAR, NE W DELHI IS A PARTNERSHIP FIRM FORMED IN NOVEMBER, 1996 WITH PART NERS M/S ESAM IT(SS)A-2 & 3/DEL/2011& CO NO. 189/DEL/2011 (BP-01.04.1988 TO 23.03.1999) 28 INDIA LTD., A COMPANY PROMOTED BY SH. ABHISHEK VERM A AND M/S AV PORTFOLIO (P) LTD. AND IN THE ABSENCE OF ANY EVIDEN CE, ADDITION IN DISPUTE WAS MADE BY THE AO. LD. CIT(A) HAS UPHELD THE ADDITION IN DISPUTE. WE HAVE GONE THROUGH THE ORDERS PASSED BY THE REVENUE AUTHORITIES AND WE ARE OF THE VIEW THAT VIDE QUESTI ON NO. 4 OF THE QUESTIONNAIRE DATED 18.6.2001 ASSESSEE WAS REQUESTE D TO EXPLAIN PAGES 89-90 OF ANNEXURE A-29 SEIZED FROM M/S ESAM I NDIA LTD. DURING THE SEARCH OPERATION ON 23.3.1999. AFTER CO NSIDERING THE EXPLANATION GIVEN BY THE ASSESSEE, THE AO MADE THE ADDITION AND LD. CIT(A) HAS UPHELD THE SAME ON THE GROUND THAT A DDITION IN DISPUTE ON ACCOUNT OF PROFIT OF M/S GLOBETROTTERS I S A PARTNERSHIP BETWEEN THE ASSESSEE AND AN EMPLOYEE OF M/S ESAM IN DIA LTD. AND ON THE BASIS OF THE SEIZED MATERIALS WHICH IS OWNED BY THE ASSESSEE, THE ADDITION HAS BEEN MADE ON THE BASIS O F THE PROFIT AND LOSS ACCOUNT OR BALANCE SHEET OF THIS FIRM FOUND AN D SEIZED DURING THE COURSE OF SEARCH. TO NEGATIVE THE VERSION OF THE REVENUE AUTHORITIES ASSESSEE HAS NOT GIVEN ANY EXPLANATION WHATSOEVER THE AMOUNT OF RS. 3.34 CRORES IS VERIFIABLE FROM THE SE IZED DOCUMENTS IS HELD TO BE CORRECTLY ADDED BY THE AO TO THE UNDISCL OSED INCOME OF THE ASSESSEE, WHICH WAS UPHELD BY THE LD. CIT(A). HENCE, WE UPHOLD THE ACTION OF THE LD. CIT(A) WHICH HAS BEEN MADE ON THE BASIS OF THE SEIZED MATERIAL. HENCE, WE UPHOLD THE FINDINGS OF THE LD. CIT(A) ON THIS ISSUE. 9.17. AS REGARDS ADDITION OF RS. 1,05,200/- ON AC COUNT OF CASH EXPENDITURE INCURRED BY M/S DELHI EXPORTS. THE ASSE SSING OFFICER HAS DISALLOWED THE SAME BY HOLDING THAT THE ASSESSE E IS A REAL OWNER OF M/S DELHI EXPORTS AND LIABLE TO PAY THE T AX ON INCOME EARNED BY M/S DELHI EXPORTS AND ON THE BASIS OF PA GE NO. 5 ANNEXURE A-28 SEIZED FROM M/S ESAM INDIA LTD. DURI NG THE SEARCH OPERATION ON 23.3.1999 SHOWING THAT THE CASH EXPEN DITURE OF RS. 1,05,250/- WAS NOT BOOKED IN THE BOOKS OF M/S D ELHI EXPORTS. ASSESSEE DENIED THE SAME BUT WITHOUT ANY EVIDENCE. LD. CIT(A) IT(SS)A-2 & 3/DEL/2011& CO NO. 189/DEL/2011 (BP-01.04.1988 TO 23.03.1999) 29 HAS ALSO UPHELD THE SAME. AFTER PERUSING THE ORDER S PASSED BY THE REVENUE AUTHORITIES, WE ARE OF THE VIEW THAT THE AD DITION OF RS. 1,05,200/- MADE TO THE TAXABLE INCOME ON ACCOUN T OF EXPENDITURE INCURRED BY M/S DELHI EXPORTS. ASSESS EE HAS NOT GIVEN ANY EVIDENCE OR PLAUSIBLE EXPLANATION TO CONTRO VERT THE VERSION OF THE ASSESSING OFFICER. THEREFORE, THE LD. CIT(A) HA S RIGHTLY UPHELD THE SAME, HENCE, WE UPHOLD THE ORDER OF THE LD. CIT (A) ON THIS ISSUE. 9.18. AS REGARDS TO THE UNDISCLOSED INCOME OF RS. 7,67,30,400/- ON ACCOUNT OF RECEIPT BY M/S VINO VERITAS. THE ASSE SSING OFFICER MADE THE ADDITION ON ACCOUNT OF SEIZED DOCUMENTS. ASSESSING OFFICER HAS ALSO ASKED THE ASSESSEE VIDE QUESTIONNA IRE DATED 18.6.2001 FOR THE EXPLANATION FROM THE ASSESSEE AND REQUESTED THAT ANNEXURE A-48 SEIZED FROM D-4/2, VASANT VIHAR, NEW DELHI, ASSESSEE HAS TRANSFERRED FUNDS TOTALING US$ 21,31, 000/- FROM M/S ESAM INDIA LTD. TO M/S VINO VERITAS, A CONCERN OF ASSESSEE OPERATED IN THE NAME OF MR. JOHN FERITAS. THE AMOUNT OF RS . 7,67,30,400/- WAS RECEIVED BY THE ASSESSEE IN THE NAME OF M/S VIN O VERITAS. ASSESSEE HAS DENIED THE SAME WITHOUT ANY DOCUMENTAR Y EVIDENCES AND REMAINED NON-COOPERATIVE BEFORE THE REVENUE AUT HORITIES. THE ASSESSING OFFICER IS OF THE VIEW THAT THE ASSESSEE IS A REAL BENEFICIARY OF THE AMOUNT TRANSFERRED TO THE ORDER OF VINO VERITAS AND ADDED THIS AMOUNT AS UNDISCLOSED INCOME OF THE ASSESSEE. LD. CIT(A) HAS ALSO UPHELD THE ORDER OF THE ASSESSING O FFICER BY HOLDING THAT ASSESSEE HAS NOT ABLE TO EXPLAIN THE SOURCE OF RS. 7,67,30,400/- HAVING BEEN TRANSFERRED FROM M/S ESAM INDIA LTD. TO VINO VERITAS. AFTER GOING THROUGH THE ORDERS PAS SED BY THE REVENUE AUTHORITIES, WE ARE OF THE VIEW THAT REVENU E AUTHORITIES HAVE RIGHTY MADE THE ADDITION IN DISPUTE FOR LACK O F EVIDENCE AND NON-COOPERATION OF THE ASSESEE, HENCE, THERE IS NO NEED TO INTERFERENCE IN THE IMPUGNED ORDER ON THIS ISSUE, T HEREFORE, WE UPHOLD THE SAME. IT(SS)A-2 & 3/DEL/2011& CO NO. 189/DEL/2011 (BP-01.04.1988 TO 23.03.1999) 30 9.19 THE ASSESSING OFFICER MADE THE ADDITION OF RS. 1,33,00,000/- ON ACCOUNT OF TRANSFER BY M/S INFOCOM DIGITAL SYSTE MS LTD. TO M/S EUROPEAN CAPITAL LTD., BUT HAS NOT BROUGHT ANY EVID ENCE ON RECORD ESTABLISHING HIS VERSION AND ASSESSING OFFICER HAS MADE THE ADDITION IN DISPUTE AND LD. CIT(A) HAS UPHELD THE SAME. AFTE R GOING THROUGH THE ORDERS PASSED BY THE REVENUE AUTHORITIES, WE AR E OF THE VIEW THAT ASSESSING OFFICER AND THE LD. CIT(A) HAS MADE THE ADDITION FOR LACK OF EVIDENCE AND DUE TO NON-COOPERATION OF THE ASSESSEE MERELY HAVING THE QUESTION OF THE ASSESSING OFFICER THAT D OES NOT MEAN THAT ADDITION IN DISPUTE SHOULD BE DELETED WITHOUT SUPPORTING THE EVIDENCE. WE ARE OF THE VIEW THAT THIS MONEY WAS TR ANSFERRED TO M/S EUROPEAN CAPITAL LTD., THE ASSESSEE IS HOLDING THE POWER OF TRANSFER OF THE BANK ACCOUNT OF EUROPEAN CAPITAL LT D. AND IS A BENEFICIARY OF RS. 1,33,00,000/- TRANSFERRED DURIN G 1997 AND 1998 BY M/S INFOCOM DIGITAL SYSTEMS LTD. TO M/S EUROPEAN CAPITAL LTD. THEREFORE, THE AMOUNT OF RS. 1,33,00,000/- HAS RIG HTLY BEEN TREATED AS THE UNDISCLOSED INCOME OF THE ASSESSEE B Y THE REVENUE AUTHORITIES, BECAUSE THIS ADDITION HAS BEEN MADE O N THE BASIS OF THE SEIZED DOCUMENTS IN ANNEXURE A-43 FOUND FROM TH E PREMISES OF M/S ESAM INDIA LTD. AND ASSESSEE COULD NOT FURNISH ANY EVIDENCE TO SUPPORT HIS CONTENTION, HENCE, WE UPHOLD THE FINDI NG OF THE LD. CIT(A) ON THIS ISSUE. 9.20 AS REGARDS THE ADDITION OF RS. 8,06,800/- ON A CCOUNT OF CASH PAYMENT RECEIVED FROM M/S INFOCOM DIGITAL SYSTEMS LTD.. AFTER GOING THROUGH THE ORDERS OF THE REVENUE AUTHORITIE S, WE ARE OF THE VIEW THAT THIS ADDITION HAS BEEN MADE ON THE BASIS OF THE SEIZED MATERIAL ANNEXURE A-48 FROM M/S ESAM INDIA LTD. ON 23.3.1999. NO EXPLANATION HAS BEEN GIVEN BY THE ASSESSEE TO TH E REVENUE AUTHORITIES. THEREFORE, THIS ADDITION HAS RIGHTLY B EEN MADE BY THE ASSESSING OFFICER AND UPHELD BY THE LD. CIT(A), HEN CE, NO INTERFERENCE IS CALLED FOR IN THE IMPUGNED ORDER ON THIS ISSUE AND WE UPHOLD THE SAME. IT(SS)A-2 & 3/DEL/2011& CO NO. 189/DEL/2011 (BP-01.04.1988 TO 23.03.1999) 31 9.21 THE ADDITION OF RS. 75,00,000/- ON ACCOUNT O F RECEIPTS FROM SH. SC BHARJATIA. ACCORDING TO THE ASSESSING OFFICE R M/S INFOCOM DIGITAL SYSTEMS LTD. TO BE A CONCERN OF THE ASSESSE E AND MODE AND MANNER IN WHICH THE ASSESSEE WAS ACTUALLY BENEFITTE D. THE QUESTIONNAIRE DATED 18.6.2001 ISSUED BY THE ASSESSE E REGARDING THIS AMOUNT REQUESTED THE ASSESSEE TO EXPLAIN THIS AMOUNT RECEIVED FROM BY HIM THROUGH M/S INFOCOM DIGITAL SYSTEMS LTD . IN THE REPLY DATED 24.7.2001 ASSESSEE HAS DENIED HAVING RECEIVED ANY PAYMENT OF RS. 75,00,000/- FROM SH. SC BHARJATIA. TWO CHEQU ES WORTH RS. 50,00,000/- AND RS. 25,00,000/- WERE DEPOSITED INTO THE ACCOUNT OF M/S INFOCOM DIGITAL SYSTEMS LTD. THEIR A BN AMRO BANK ACCOUNT ON 22.12.1997 AND 23.12.1997. THESE PAYMENT S WERE MADE BY SH. SC BHARJATIA FROM HIS FIRM M/S PRECIOUS ARTS AND JEWELS AT THE BEHEST OF SH. ABHISHEK VERMA CONSIDER ING M/S INFOCOM DIGITAL SYSTEMS LTD. TO BE A CONCERN BELONG ING TO SH. ABHISHEK VERMA AND ASSESSEE IS A REAL BENEFICIA RY OF THIS SUM RECEIVED FROM SH. SC BHARJATIYA. AFTER CONSIDERING THE ASSESSEES REPLY, THE ASSESSING OFFICER HAS MADE THE ADDITION IN DISPUTE AND LD. CIT(A) HAS CONFIRMED THE SAME BY HOLDING THAT T HIS AMOUNT IN DISPUTE RECEIVED BY M/S INFOCOM DIGITAL SYSTEMS LTD . FROM ONE SH. SC BHARJATIYA. ACCORDING TO THE ASSESSING OFFICER, M/S INFOCOM DIGITAL SYSTEMS LTD. WAS RAISED BY THE ASSESSEE TO TRANSFER THE FUNDS TO M/S EUROPENA CAPITAL LTD. WHOSE BANK ACCOU NT WAS AUTHROISED TO BE OPENED BY THE ASSESSEE. THEREFORE, THE ASSESSEE IS A REAL BENEFICIARY OF THIS AMOUNT, HENCE, WE ARE OF THE VIEW THAT THE FINDINGS GIVEN BY THE LD. CIT(A) IS AS PER RECORD A ND EVIDENCE AND THEREFORE, THE SAME IS UPHELD. 9.22 ASSESSING OFFICER HAS MADE THE ADDITION OF RS. 17,39,40,857/- ON ACCOUNT OF PAYMENT MADE BY M/S KUDOS EXPORTS LTD . AS UNDISCLOSED INCOME OF THE ASSESSEE. ASSESSING OFFIC ER ISSUED THE QUESTIONNAIRE DATED 23.7.2001 ASKING THE ASSESSEE T O EXPLAIN THAT AS PER PAGE NO. 3 TO 22 OF ANNEXURE A-1 SEIZED FROM THE RESIDENCE IT(SS)A-2 & 3/DEL/2011& CO NO. 189/DEL/2011 (BP-01.04.1988 TO 23.03.1999) 32 OF MS. ASMITA AGGARWAL DURING SEARCH PROCEEDINGS ON 23.3.1999, ASSESSEE WAS THE REAL OWNER OF M/S GANTON LTD. M/S KUDOS EXPORTS PVT. LTD., A COMPANY OWNED BY M/S ESAM INDIA LTD., SHARES OF WHICH ARE OWNED BY THE ASSESSEE SUBSTANTIALLY, HAS MADE IMPORTS FROM M/S GANTON LTD. IN RESPONSE TO THE QUESTIONNA IRE DATED 23.7.2001 ASSESSEE HAD NOT GIVEN ANY REPLY TO THE C ONCERN. THE ASSESSING OFFICER HAS MADE THE ADDITION IN DISPUTE AND LD. CIT(A) HAS UPHELD THE FINDING OF THE ASSESSING OFFICER. I N APPEAL BEFORE US, WE HAVE NO OTHER ALTERNATIVE, EXCEPT TO UPHOLD THE IMPUGNED ORDER ON THIS ADDITION BECAUSE FOR LACK OF EVIDENCE ON THE ISSUE IN DISPUTE FILED BY THE ASSESSEE, THEREFORE, THE ADDIT ION OF RS. 17,39,40,857/- MADE BY THE ASSESSING OFFICER AND CO NFIRMED BY THE LD. CIT(A) IS AS PER LAW AND RECORD, HENCE, WE UPH OLD THE SAME. 9.23 THE ASSESSING OFFICER HAD MADE THE ADDITION OF RS. 54,00,000/- ON ACCOUNT OF DEPOSITS MADE WITH GE NERAL CREDITS FINANCE LTD. AS UNDISCLOSED INCOME OF THE ASSESSEE. DURING THE ASSESSMENT PROCEEDINGS ASSESSING OFFICER ISSUED THE QUESTIONNAIRE DATED 7.6.2001 TO THE ASSESSEE ASKING HIM TO EXPLAI N THE UNDISCLOSED DEPOSITS. ASSESEE HAS DENIED THE SAME AND HAS NOT FILED ANY EVIDENCE SUPPORTING HIS DENIAL, HENCE, TH E ASSESSING OFFICER HAS MADE THE ADDITION IN DISPUTE AND LD. CI T(A) HAS UPHELD THE SAME BY HOLDING THAT THE ASSESSEE HAD SUBMITTED IN HIS STATEMENT RECORDED ON 16.7.1999 THAT HE HAS MADE TH E DEPOSITS OF RS. 54 LACS IN THE BANK AND THAT BANK HAD GONE INTO THE LIQUIDATION AND A CLAIM HAD BEEN LODGED THROUGH THE BANK OF ENG LAND AND ASSESSEE HAS FILED DECLARATION UNDER VDIS DECLARING SUCH DEPOSITS, BUT HAS NOT MADE THE PAYMENT OF TAX THEREON. HIS A PPLICATION WAS NOT ENTERTAINED AND NO CERTIFICATE WAS ISSUED. THE ASSESSING OFFICER ON THE BASIS OF DOCUMENTS NO. 1-3 OF ANNEXURE A-3 S EIZED FROM THE RESIDENCE OF MRS. ASMITA AGGARWAL, EX-WIFE OF THE A SSESSEE ALSO SHOWS THAT SUCH PAYMENTS WERE MADE BY THE ASSESSEE FOR DEPOSITING IN THE BANK BEGINNING FROM OCTOBER, 1991 TILL JULY, 1992. IT(SS)A-2 & 3/DEL/2011& CO NO. 189/DEL/2011 (BP-01.04.1988 TO 23.03.1999) 33 ASSESSEE HAS NOT EXPLAINED THE SOURCE OF THIS AMOUN T BY FILING ANY DOCUMENTARY EVIDENCES, THEREFORE, THE ASSESSING OFF ICER HAS RIGHTLY MADE THE ADDITION AND LD. CIT(A) HAS ALSO RIGHTLY U PHELD THIS ADDITION. WE ARE FULLY AGREE WITH THE FINDINGS OF THE REVENUE AUTHORITIES AND UPHELD THE ADDITION IN DISPUTE. 9.24 THE ASSESSING OFFICER HAD MADE THE ADDITION OF RS. 3,20,40,000/- ON ACCOUNT OF PAYMENT TO SH. ARJUN AM LA AS UNDISCLOSED INCOME OF THE ASSESSEE. ASSESSING OFFIC ER VIDE QUESTION NO. 7 OF QUESTIONNAIRE DATED 18.6.2001 ASKED THE AS SESSEE TO EXPLAIN THE AMOUNT RECEIVED BACK FROM M/S VINO VERI TAS AMOUNTING TO US DOLLAR 8,90,000/- ON 19.2.1996 WHICH WERE ARR ANGED BY PAYMENT OF RS. 3,20,40,000/- TO SH. ARJUN AMLA OF M/S CAMELOT TRADING CO. IN THE REPLY DATED 24.7.2001 ASSESSEE H AS STATED THAT THE STATEMENT RECORDED BEFORE THE ENFORCEMENT DIREC TORATE HAD BEEN WITHDRAWN IN THE COURT ON 17.12.1999. BUT IN SUPPORT OF HIS CONTENTION, ASSESSEE HAS NOT FILED ANY DOCUMENTARY EVIDENCES AND ASSESSING OFFICER HAS MADE THE ADDITION IN DISPUTE AND THE LD. CIT(A) HAS UPHELD THE SAME. AFTER GOING THROUGH THE ORDERS PASSED BY THE REVENUE AUTHORITIES AND THE REPLY FILED BY T HE ASSESSEE, WHICH IS FOR WANT OF EVIDENCE, SUPPORTING THE STATE MENT OF THE ASSESEE, WE ARE OF THE VIEW THAT NO INTERFERENCE IS CALLED FOR IN THE WELL REASONED ORDER OF THE LD. CIT(A) ON THIS ISSU E, HENCE, WE UPHOLD THE IMPUGNED ORDER ON THIS ISSUE. 9.25 THE ADDITION OF RS. 11,00,42,100/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF INCOME AS PER THE DOCUMENTS S EIZED FROM MRS. ASMITA AGGARWAL. THE ASSESSING OFFICER VIDE QUESTIO N NO. 39(B) OF QUESTIONNAIRE DATED 07.06.2001 WHO ASKED THE ASSESS EE TO EXPLAIN THESE DEPOSITS MADE BY HIM AS PER PAGE NO. 24 OF TH E ANNEXURE A-1 SEIZED FROM THE RESIDENCE OF MRS. ASMITA AGGARWAL D URING THE SEARCH OPERATION ON 23.3.1999. ASSESSEE HAS EXPLAIN ED THAT THE PAGES RELIED UPON ARE THE PHOTOCOPIES OF SOME TYPED MATTER AND EVEN THIS DOES NOT BEAR THE NAME AND SIGNATURES OF THE ASSESSEE. IT(SS)A-2 & 3/DEL/2011& CO NO. 189/DEL/2011 (BP-01.04.1988 TO 23.03.1999) 34 HE FURTHER SUBMITTED THAT THE NAME OF THE BANK INTO WHICH THE DEPOSITS HAS BEEN MADE IS NOT THERE AND HE DENIED T HESE DEPOSITS. THE ASSESSING OFFICER HAS SUPPLIED ALL THE DOCUMEN TARY EVIDENCES TO THE ASSESEE AND THE STATEMENTS RECORDED ON 16.7. 1999 OF THE ASSESSEE WAS ALSO GIVEN TO THE ASSESSEE IN WHICH TH E ASSESSEE HAS ADMITTED THAT HE WAS HAVING BANK ACCOUNT IN LI ECHTENSTEIN. DURING MARCH, 1995, US DOLLAR 2,67,500/- EQUIVALENT TO RS. 93,62,500/- HAVE BEEN DEPOSITED BY ASSESSEE, THE SOURCE OF WHICH ASSESSEE HAS NOT EXPLAINED AND ASSESSING OFFI CER HAS MADE THIS ADDITION AS UNDISCLOSED INCOME OF THE ASSESSEE . SIMILARLY, AS PER THE QUESTION NO. 39(C) OF QUESTIONNAIRE DATED 7 .6.2001 ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN THE TRANSFER OF MONEY FROM ACCOUNT NO. 520062 MADE BY HIM AS PER PA GES 30 TO 46 OF ANNEXURE A-1 SEIZED FROM THE RESIDENCE OF MS. ASMITA AGGARWAL DURING SEARCH OPERATIONS ON 23.3.1999. ASS ESSEE HAS NOT FURNISHED ANY EXPLANATION OF THE AMOUNT IN DISPUTE AND THE ASSESSING OFFICER HAS MADE THE ADDITION OF RS. 3,58 ,60,300/- AS UNDISCLOSED INCOME OF THE ASSESSEE. SIMILARLY, VIDE QUESTION NO. 39(D) OF QUESTIONNAIRE DATED 7.6.2001 ASSESSEE WAS ASKED TO EXPLAIN THE PAYMENT OF TOTALING USD 5,00,000 TO KD USA. VIDE HIS REPLY DATED 24.7.2001 ASSESSEE HAS STATED THAT THE PAGES RELIED UPON ARE THE PHOTOCOPIES OF SOME TYPED MATTER AND D O NOT CARRY THE NAME AND SIGNATURES OF THE ASSESSEE, BUT ASSESS EE HAS NOT GIVEN ANY EXPLANATION TO THE SAME AND ASSESSING OFF ICER HAS MADE THE ADDITION IN DISPUTE. EXACTLY, ON SIMILAR FACTS AND CIRCUMSTANCES OF THE CASE THE TOTAL AMOUNT OF RS. 11,00,42,000/- WAS ADDED AS UNDISCLOSED INCOME OF THE ASSESSEE HAS BEEN MADE ON THE BASIS OF DOCUMENTARY EVIDENCES BY GIVING THE OPPORTUNITY TO THE ASSESSEE FOR EXPLAINING THE SAME, BUT ASSESSEE RAISED THE QU ESTION ON THE QUESTIONNAIRE, BUT DID NOT FILE ANY REPLY. LD. CIT (A) HAS UPHELD THE ADDITION OF RS. 11,00,42,000/- AS UNDISCLOSED INCOM E OF THE ASSESSEE WHICH HAS BEEN MADE ON THE BASIS OF DOCUME NTARY IT(SS)A-2 & 3/DEL/2011& CO NO. 189/DEL/2011 (BP-01.04.1988 TO 23.03.1999) 35 EVIDENCES SEIZED DURING THE SEARCH OPERATION IN THE CASE OF THE MS. ASMIT AGARWAL. LD. CIT(A) HAS UPHELD THE ADDITION OF RS. 11,00,42,000/- MADE TO THE UNDISCLOSED INCOME O F THE ASSESSEE ON ACCOUNT OF ENTRIES RECORDED IN THE DOCUMENTS SEI ZED FROM THE RESIDENTIAL PREMISES OF MS. ASMITA AGGARWAL EX-WIFE OF THE ASSESSEE. WE HAVE GONE THROUGH THE ORDERS PASSED BY THE REVENUE AUTHORITIES AND WE ARE OF THE VIEW THAT THE ASSESSI NG OFFICER HAS MADE THE ADDITION IN DISPUTE ON THE BASIS OF THE SE IZED MATERIAL I.E. ANNEXURE A-1 PAGES 60 TO 70, BUT NO EXPLANATION HAS BEEN GIVEN BY THE ASSESSEE. ASSESEE HAS NOT GIVEN ANY EXPLANATION REGARDING THE NATURE OF THESE ENTRIES RECORDED IN THESE DOCUMENTS AND HAS RAISED THE QUESTION ON THE QUESTIONNAIRE ISSUED BY THE ASS ESSING OFFICER. WE ARE OF THE VIEW THAT THE ASSESSEE REMAINED NON-C OOPERATIVE BEFORE THE REVENUE AUTHORITIES AND THE REVENUE AUTH ORITIES HAS GIVEN FULL OPPORTUNITY TO THE ASSESSEE BEFORE MAKI NG THE ADDITIONS IN DISPUTE, THEREFORE, WE UPHOLD THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) ON THE ADDITIONS OF RS. 11,00,42,100/-. THE AFORESAID ADDITIONS MADE BY THE ASSESSING OFFICER AND UPHELD BY THE LD. CIT(A) MENTIONED IN GROUND NO. 7 ARE DISMISSED BY UPHOLDING THE ORDER OF THE LD. CIT(A) ON THESE ADDITIONS. 10. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE AND THE ISSUES INVOLVED IN APPEAL FILED BY THE ASSESSEE AND AFTER GOING THROUGH THE ARGUMENTS ADVANCED BY BOTH THE PARTIES ALONGWITH THE DOCUMENTARY EVIDENCES FILED BY BOTH T HE PARTIES IN THE SHAPE OF PAPERS BOOKS, WE ARE OF THE CONSIDERED VIEW THAT ASSESSING OFFICER AS WELL AS LD. CIT(A) HAS GIVEN FULL OPPORTUNITY TO THE ASSESSEE FOR SUBSTANTIATING HIS CLAIM ON LEGAL AS WELL AS ON MERITS, BUT THE ASSESEE REMAINED NON-COOPERATIVE BE FORE THE REVENUE AUTHORITIES, HENCE, ASSESSING OFFICER HAS M ADE THE ADDITIONS IN DISPUTE ON THE BASIS OF THE SEARCH MAT ERIAL, AFTER CONFRONTING THE SAME TO THE ASSESSEE, BUT THE ASSES SEE HAS NOT SUBSTANTIATED HIS CLAIM BY FILING ANY EVIDENCE BEF ORE THE AUTHORITIES IT(SS)A-2 & 3/DEL/2011& CO NO. 189/DEL/2011 (BP-01.04.1988 TO 23.03.1999) 36 BELOW. THEREFORE, NO INTERFERENCE IS CALLED FOR IN THE WELL REASONED ORDERS OF THE REVENUE AUTHORITIES, HENCE, WE UPHOL D THE IMPUGNED ORDER OF THE LD. CIT(A) BY DISMISSING THE APPEAL FI LED BY THE ASSESSEE. IN THE RESULT, THE IT(SS)A NO. 2/DEL/201 1 FILED BY THE ASSESSEE IS DISMISSED. 11. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS IN IT(SS)A NO. 03/DEL/2011:- 1. THE ORDER OF THE LD. CIT(A) IS NOT CORRECT IN LA W AND FACTS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN LAW AND FACTS IN DELETING THE ADDITION OF RS. 1,19,03,000/- MADE BY THE AO ON THE BASIS OF SEIZED DOCUMENTS WITHOUT APPRECIATING FACTS ON RECORD. 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEN D ANY / ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF THE HEARING OF THE APPEAL. 11.1 AT THE TIME OF HEARING, LD. COUNSEL FOR THE A SSESSEE STATED THAT THE TAX EFFECT INVOLVED IN THE APPEAL FILED BY THE REVENUE IS BELOW THE PRESCRIBED TAX LIMIT OF RS. 50 LACS, IN V IEW OF THE LATEST CBDT CIRCULATED VIDE CIRCULAR NO.17/2019 DATED 08.08.2019, HENCE THE APPEAL OF THE REVENUE MAY BE DISMISSED. 11.2 LD. CIT(DR) HAS NOT RAISED ANY OBJECTION ON TH E REQUEST OF THE ASSESSEES COUNSEL. 11.3 KEEPING IN VIEW THE ADDITION IN DISPUTE CHALLE NGED BY THE REVENUE IN THE PRESENT APPEAL AND IN VIEW OF THE L ATEST CBDTS INSTRUCTIONS, AS AFORESAID, THE APPEAL OF THE REVEN UE IS DISMISSED ON ACCOUNT OF LOW TAX EFFECT. IN THE RESULT, THE APPEA L OF THE REVENUE IS DISMISSED. 12. ASSESSEE HAS ALSO FILED THE CROSS OBJECTION NO. 189/DEL/2011 IN REVENUES APPEAL IT(SS)A NO. 03/DEL/2011 ON THE FOLLOWING GROUND:- IT(SS)A-2 & 3/DEL/2011& CO NO. 189/DEL/2011 (BP-01.04.1988 TO 23.03.1999) 37 IN VIEW OF BOARDS INSTRUCTION NO. 1894 DATED 16.06.1992 AND CASE OF K.K. HOUSE VS. ITO (2007) 11 SOT 445 (HYD) AND ACIT VS. JUSTICE MOTILAL B. NAIK (2004) 270 ITR (AT 141 (HYD.), THE APPEAL OF THE AO IS NOT MAINTAINABLE. 12.1 AS REGARDS THE CROSS OBJECTION FILED BY THE A SSESSEE AGAINST THE REVENUES APPEAL IS CONCERNED, SINCE WE HAVE DISMISSED THE REVENUES APPEAL ON ACCOUNT OF LOW TAX EFFECT, HEN CE, THE CROSS OBJECTION FILED BY THE ASSESEE HAS BECOME INFRUCTOU S AND DISMISSED AS SUCH. 13. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASSESSEE AS WELL AS REVENUE STAND DISMISSED AND ALSO THE CROSS OBJE CTION FILED BY THE ASSESSEE STAND DISMISSED. ABOVE DECISION WAS ANNOUNCED ON 25 TH JANUARY, 2021 IN THE OPEN COURT. SD/- SD/- (PRASHANT MAHARISHI) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER SRB. COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR