DCIT CC-40, MUMBAI V. GAMMAN INDIA LTD, MUMBAI

ITSSA 211/MUM/2005

• Counselvise Citation: [2012] 124 COUNSELVISE.COM (IT) 7429 (ITAT-MUMBAI)
• Duration Of Justice: 6 year(s) 11 month(s) 14 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 30-04-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 04-04-2012
• Assessment Year: misc
• Appeal Filed On: 16-05-2005
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A C TAJPAL
• Assessee Lawyers: SSHRIFAROKHIRANIVINODMODI
• Keywords: Unexplained expenditure; Document seized; Peak credit; Block assessment; Documents seized
• Section: 69C; 37; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G MUMBAI BEFORE SHRI N.V. VASUDEVAN(AM) AND SHRI N.K. BILLAIYA (ACCOUNTANT MEMBER) IT(SS)A NO. 211/MUM/2005 BLOCK PERIOD-1.4.1995 TO 30.1.2002 THE DY. CIT, CENT. CIR.40, AAYAKARBHAVAN, MUMBAI-400 020 VS. M/S. GAMMON INDIA LTD., GAMMON HOUSE, VEER SAVARKARMARG, PRABHADEVI, MUMBAI-400 025 PAN-AAACG 3821A (APPELLANT) (RESPONDENT) IT(SS)A NO. 213/MUM/2005 BLOCK PERIOD-1.4.1995 TO 30.1.2002 M/S. GAMMON INDIA LTD., GAMMON HOUSE, VEER SAVARKARMARG, PRABHADEVI, MUMBAI-400 025 VS. THE DY. CIT, CENT. CIR.40, AAYAKARBHAVAN, MUMBAI-400 020 (APPELLANT) (RESPONDENT) ASSESSEE BY: S/SHRIFAROKHIRANI&VINODMODI DEPARTMEN T BY: SHRI A.C. TAJPAL DATE OF HEARING :04.04.2012 DATE OF PRONOUNCEMENT:30.4.2012 O R D E R PER N.K. BILLAIYA(AM): THESE CROSS APPEALS ARE FILED BY DEPARTMENT AND A SSESSEE AGAINST THE VERY SAME ORDERS OF LD. CIT(A)-VII DATED 1.3.200 5. IT(SS)A NO. 211/MUM/2005- REVENUES APPEAL 2. THE ASSESSEE IS A COMPANY. THE FACTS EMERGING O UT OF THE ASSESSMENT ORDER ARE THAT THE SEARCH AND SEIZUR E ACTION ITA NOS.211 & 213/M/05 2 U/S. 132(1) OF I.T. ACT, 1961 WAS CONDUCTED AT THE BUSINESS PREMISES OF THE ASSESSEE. THE BLOCK PERIOD WAS FROM 1.4.1995 TO 31.01.2001 AND 1.4.2001 TO 30.01.2002. THE RETU RN FOR THE BLOCK PERIOD WAS FILED ON 15.9.2002. 3. DURING THE COURSE OF SEARCH, CERTAIN DIARIES WER E FOUND WHICH HAS BEEN MARKED AS A-1, A-2, A-3, A-4 & A-12. THESE DIARIES WERE WRITTEN BY PERSONAL SECRETARY TO THE M ANAGING DIRECTOR MRS. NILOUFER CONTRACTOR SINGH. THE STATE MENT OF MRS. NILOUFER CONTRACTOR WAS RECORDED U/S. 132(4)OF THE ACT. MRS. NILOUFER CONTRACTOR WAS CONFRONTED WITH THE QU ESTION RELATING TO THE ENTRIES IN THE DIARY. MRS. NILOUFER CONTRACTOR REPLIED THAT THE ENTRIES IN THE DIARY PERTAINS TO A MOUNT OF MONEY RECEIVED FROM VARIOUS PERSONS AND ALSO DETAIL S OF MONEY PAID IS ALSO RECORDED. RECEIPTS ARE INDICATED AS +(PLUS) AND PAYMENTS ARE INDICATED AS (MINUS). M RS. NILOUFER CONTRACTOR ACCEPTED THAT THE DIARY WAS WRI TTEN IN HER OWN HANDWRITING. 4. INCIDENTALLY, SHRIABHIJITRAJAN, THE MANAGING DIR ECTOR OF THE ASSESSEE COMPANY WAS ALSO EXAMINED AND WAS ASKE D ABOUT THE ENTRIES RECORDED IN THE DIARY TO WHICH M. D. REPLIED THAT AMOUNTS WRITTEN IN THE DIARY ARE NOTHING BUT A MOUNTS GENERATED OUT OF SALE OF SCRAP, EARTH AND STONES ET C. AND ADMITTED THAT THE AMOUNTS MENTIONED IN THE DIARY AR E NOT ACCOUNTED IN THE BOOKS OF ACCOUNT. 5. TAKING INTO CONSIDERATION OF THE ABOVE STATEMENT , THE ASSESSING OFFICER PROPOSE TO DETERMINE THE UNDISCLO SED INCOME AS PER THE ENTRIES OF THE DIARY INVENTORISED AS A-1 TO A-4 AND A-12 AT RS. 5,26,48,810/-. THE ASSESSEE WA S CONFRONTED WITH THIS FACTS AND EXPLANATION WAS SOUG HT. THE ASSESSEE IN ITS REPLY STATED THAT ALL THE RECEIPTS IN THE DIARY ITA NOS.211 & 213/M/05 3 OUT OF SALE OF SCRAP AND OTHER MATERIALS NOT DISCLO SED IN THE BOOKS OF ACCOUNT BUT ALSO WERE RETURN OF MONIES TO WHOM THE PAYMENTS HAD BEEN MADE AND INTER SE MOVEMENT OF FUN DS BETWEEN THE VARIOUS CUSTODIANS WHOSE NAMES ARE REF ERRED IN THE DIARY. IT WAS ALSO EXPLAINED THAT SOME OF THE CASH OUT FLOW IN THE HANDS OF THE CUSTODIAN IS OUT OF THE CA SH INFLOWS IN HANDS OF THE SAID CUSTODIAN UPTO ANY PARTICULAR DATE. IN OTHER WORDS, THE SAME CASH MOVED AMONGST THE CUSTOD IANS, UNLESS A FRESH INFLOW WAS INJECTED. THE ASSESSEE W ENT ON TO EXPLAIN THAT WHEREVER THERE WAS A NEGATIVE CASH INF LOW THAT AMOUNT HAS BEEN ADDED AS UNDISCLOSED INCOME FOR THE BLOCK PERIOD AND THE SUM TOTAL OF ALL THESE NEGATIVE ENTR IES COME TO RS. 3,20,37,000/- AND THEREFORE IT WAS OBJECTED AT THE ASSESSMENT STAGE THAT THE SUM TOTAL TAKEN BY THE AO AT RS. 5,26,48,810/- IS CONTRARY TO THE FACTS OF THE CASE AND AGAINST THE CANONS OF THE LAW IN AS MUCH AS IT HAS BEEN HE LD BY THE MUMBAI ITAT C BENCH IN THE CASE OF SURENDRA M. KHANDHARVS ACIT 76 ITD 121 THAT FOR THE PURPOSE OF DETERMINING UNDISCLOSED INCOME, PEAK SHOULD BE WORK ED OUT BY ARRANGING THE TRANSACTIONS DATEWISE AND BALANCES TO BE WORKED OUT DATEWISE. 6. THIS CONTENTION OF THE ASSESSEE DID NOT FIND ANY FAVOUR FROM THE AO WHO FINALLY CONCLUDED THAT UNDISCLOSED INCOME AS PE R THE ENTRIES IN THE DIARY IS RS. 5,20,23,810/- WHILE COMING TO THIS FIGURE, T HE AO HAS TAKEN INTO CONSIDERATION AMOUNT PAID TO ONE MR. VINOD MODY, CH ARTERED ACCOUNTANT RS. 6,25,000/- AS EXPENDITURE U/S. 37 OF THE ACT. THE PAYMENT OF THE SAID AMOUNT OF RS. 6,25,000/- WAS BASED UPON THE ENTRIES IN THE DIARIES INVENTORISED AS ANNEXURE-A-1 TO A-4 AND A-12. THE AO HAS FURTHER OBSERVED THAT THE SAID SHRI VINOD MODI HAS BEEN PAID A TOTAL AMOUNT OF RS. 66,75,000/- OUT OF WHICH, ONLY A SUM OF RS. 6,25,000/- IS REFLE CTED IN THE DIARY THEREFORE THE BALANCE AMOUNT OF RS. 60,50,000/- HAS TO BE UNE XPLAINED EXPENDITURE ITA NOS.211 & 213/M/05 4 AND ACCORDINGLY WENT ON TO ADD RS. 60,50,000/- AS U NEXPLAINED EXPENDITURE U/S. 69C OF THE ACT. THE AO FINALLY COMPLETED THE BLOCK ASSESSMENT AFTER MAKING OTHER ADDITIONS OTHER THAN DISCUSSED HEREIN ABOVE. SINCE THESE ADDITIONS ARE NOT A PART OF THE PRESENT APPEAL. TH EREFORE, FACTS RELATING TO THEM HAVE NOT BEEN DISCUSSED. 7. THE ASSESSEE TOOK THIS MATTER BEFORE LD. CIT(A). 8. AS REGARDS ADDITION MADE AS UNDISCLOSED INCOME B ASED ON THE ENTRIES IN THE DIARY.THE MAIN CONTENTION OF THE ASSESSEE BE FORE THE LD. CIT(A) WAS THAT THE ACTION OF THE AO AT ALL THE RECEIPTS IN TH E DIARIES IS NOT CORRECT AS THE ENTRIES IN THE DIARY ALSO SHOWN THE PAYMENT. IT WAS SUBMITTED BEFORE THE LD. CIT(A) THAT ONLY PEAK CREDITS SHOULD BE TAKEN AS UN DISCLOSED INCOME AS HAS BEEN ALREADY ACCEPTED BY THE ASSESSEE IN THE RETURN FILED FOR THE BLOCK PERIOD. IT WAS CONTENTED BY THE COUNSEL OF THE ASSESSEE BEFO RE LD. CIT(A) THAT WHEN THE DIARIES REPRESENTED (+) SIGN AND SIGN AND MAN Y PLACES, THE NAME OF THE SAME PERSONS IN ABBREVIATED FORM APPEARED, THEN IT WAS CONCOMITANT ON THE PART OF THE AO TO GIVE CREDIT FOR MOVEMENT OF FUNDS AMONGST CUSTODIANS AND IT IS ONLY SUCH MONEY NOT REPRESENTED BY RETURN OF MONEY FROM THE CUSTODIANS THAT CAN PART TAKE THE CHARACTER OF INCOME FROM SA LE OF SCRAP ETC. BEFORE THE LD. CIT(A), ASSESSEE FILED A DETAILED STATEMENT SHO WING MOVEMENT OF FUNDS IN THE HANDS OF EACH AND EVERY CUSTODIAN AS REFLECTED IN THE DOCUMENTS SEIZED. AFTER CONSIDERING THE SUBMISSION OF ASSESSEE AND TH E DOCUMENTS FILED IN SUPPORT OF THE CONTENTION OF THE ASSESSEE, THE LD. CIT(A) HELD THAT IN MY VIEW, THE STATEMENT OF MRS. NILOUFER CONTRACTOR SIN GH EXPLAINS THE METHODOLOGY OF TRANSACTION IN THE DIARIES AS PER MA NNER IN WHICH THE NATURE OF TRANSACTIONS ARE DEPICTED IN THE SEIZED DOCUMENT . THE STATEMENT OF MR. ABHIJITRAJAN U/S. 132(4) ALSO FURTHER EXPLAINS THE NATURE OF TRANSACTIONS IN THE SAID DIARIES. CONSIDERING ALL THE ABOVE FACTS AND ON CONJOINT READING OF STATEMENTS AND RELYING ON THE RATIO OF THE DECISION OF THIRD MEMBER OF ITAT, JODHPUR BENCH IN THE CASE OF RAMESHWARLALSONIVS ACI T (JD.) (SUPRA) BEING A FULL BENCH DECISION IN VIEW OF DELHI HIGH C OURT OBSERVATION IN THE CASE OF P.C. PURIVS CIT, DELHI-II, REPORTED AT 151 ITR 5 84 OBSERVED AT PAGE 604) ITA NOS.211 & 213/M/05 5 THAT BENEFIT OF TELESCOPING HAS TO BE ALLOWED OF RS . 1,99,69,500/- IN COMPUTING UNDISCLOSED INCOME DETERMINE UNDER CHAPTE R XIVB OF I.T. ACT OF THE APPELLANT. I AM OF THE VIEW THAT THE APPELLANT S CONTENTION NEEDS ACCEPTANCE IN RESPECT OF SUCH ENTRIES IN THE DIARIE S AMOUNTING TO RS. 1,99,69,500/- (RS. 5,26,48,810/- - RS. 3,20,37,000/ -). THE APPELLANT, THEREFORE, GETS PART RELIEF OF RS. 1,99,69,500/- IN RESPECT OF DISCUSSION MADE ABOVE. 9. AS PER THE ADDITIONS MADE U/S. 69C OF THE ACT TO THE TUNE OF RS. 60,50,000/-, ASSESSEES MAIN CONTENTION BEFORE THE LD. CIT(A) WAS THAT IN THE RETURN OF INCOME FILED BY ASSESSEE, THE ASSESSEE HA S CLAIMED THE PAYMENT MADE TO SHRI VINOD MODY AT RS. 66,75,000/-. IT WAS EXPLAINED THAT THE VARIOUS CUSTODIANS HAVE IN TURN PAID THE MONEY TO S HRI VINOD MODI ON VARIOUS DATES TOWARDS CONSULTATIONS FEES HENCE THE CLAIM O F THE ASSESSEE THAT THIS PAYMENT OF RS. 66,75,000/- TO ITS C.A. SHOULD BE AL LOWED AS DEDUCTION FROM THE UNDISCLOSED INCOME FOR THE BLOCK PERIOD. THE A SSESSEE ALSO EXHIBITED VARIOUS ENTRIES IN THE DIARY IN WHICH AMOUNT PAID T O THE C.A BY THE VARIOUS CUSTODIANS. THE SUM TOTAL OF ALL THESE PAYMENTS CO ME TO RS. 48,00,000/-. HOWEVER, ALL THESE SUBMISSIONS BY ASSESSEE WERE REJ ECTED BY THE LD. CIT(A) WHO CAME TO A FINDING THAT THE SEIZED PAPER FOUND F ROM MRS. NILOUFER CONTRACTOR DEBITED ONLY RS. 6,25,000/- TO SHRI VINO D MODI. THE LD. CIT(A) FURTHER OBSERVED THAT THE ADDITIONAL AMOUNT OF RS. 60,50,000/- ALLEGED TO HAVE BEEN PAID TO SHRI VINOD MODI IS NOT REFLECTED IN THE SEIZED DIARY AND ALSO THE DETAILS OF AVAILABILITY OF FUNDS WITH CUSTODIAN DO NOT SHOW THE TOTAL AMOUNT AVAILABLE WITH THEM FOR PAYMENT TO SHRI VINO D MODI WAS WITH THEM AMOUNTING TO RS. 60.50 LAKHS. THE LD. CIT(A) HENCE REJECTED THE CONTENTION OF ASSESSEE THAT DEDUCTION OF RS. 66,50,000/- SHOU LD BE GIVEN AS EXPENDITURE FROM THE UNDISCLOSED INCOME AND HELD THAT THE ASSES SEE IS ENTITLED ONLY FOR AN AMOUNT OF RS. 6,25,000/- AS ALLOWED BY AO. HOWEVER , THE LD. CIT(A) CANCELLED THE ADDITION MADE BY AO U/S. 69C OF THE A CT AT RS. 60,50,000/- AND HELD THAT IN MY VIEW, SINCE CHAPTER XIVB IS IN ITSELF A CODI FIED PROVISION DEALING WITH ASCERTAINING OF UNDISCLOSED INCOME OF THE APPELLANT ON THE BASIS ITA NOS.211 & 213/M/05 6 OF EVIDENCE FOUND AS A RESULT OF SEARCH AND MATERIA LS/DOCUMENTS/INFORMATION AVAILABLE WITH AO AND RELATABLE TO SUCH EVIDENCE TO SHOW THAT PAYMENT TO SHRI VINOD MODI WAS MADE TO THE EXTENT OF RS. 66.2 5 LAKHS (BUT ONLY RS. 6.25 LAKHS) THE ADDITION CANNOT BE MADE ON ACCOUNT OF UN DISCLOSED EXPENDITURE U/S. 69C IN THE HANDS OF THE APPELLANT ON THE BASIS OF A DISCLOSURE MADE BY SHRI VINOD MODI IN HIS BLOCK RETURN (AND ASSESSED W ITH A WRONG FINDING BY AO) ON THE BASIS OF AFFIDAVITS OF EMPLOYEES OF THE APPELLANT THAT ADDITIONAL AMOUNT OF RS. 60.50 LAKHS WAS PAID TO SRI V. MODI, ASSTT. UNDER CHAPTER XIV-B CAN BE MADE. IN MY VIEW, ON THE BASIS OF ENTRIES FO UND IN THE SEIZED PAPERS AND ONLY THOSE CAN BE CONSIDERED FOR DETERMINATION OF UNDISCLOSED INCOME. I HOLD THAT SINCE THE PAYMENT TO MR. VINOD MODI TO TH E EXTENT OF RS. 60.50 LAKHS IS NOT BELIEVED WHILE DECIDING GROUND NO. 5 O F APPEAL, ADDITION CANNOT BE MADE ON ACCOUNT OF UNEXPLAINED EXPENDITURE ON TH E BASIS OF RETURN FILED BY MR. VINOD MODI SHOWING RECEIPT FROM THE APPELLAN T THOUGH NOT FOUND TO BE RECORDED IN SEIZED MATERIALS. HENCE, NO ADDITION C AN BE MADE UNDER SECTION 69C OF UNEXPLAINED EXPENDITURE ON THIS COUNT IN THE HANDS OF THE APPELLANT. THE ADDITION OF RS. 60,50,000/- MADE BY THE AO U/S. 69C IS HEREBY DELETED. 10. AGGRIEVED BY THE ORDER OF LD. CIT(A), REVENUE A S WELL AS ASSESSEE IS IN APPEAL BEFORE US. 11. THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SU PPORTED THE ORDER OF THE AO. THE ARGUMENTS OF THE LD. DR THAT ADDITIONS HAVE BEEN MADE AS PER THE ENTRIES RECORDED IN THE DIARY SEIZED DURING TH E SEARCH PROCEEDINGS INVENTORISED AS ANNEXURE-A-1 TO A-4 AND A-12 AND TH E STATEMENTS OF MR. ABHIJIT RAJAN, MANAGING DIRECTOR AND MRS. NILOUFER CONTRACTOR, THE ADDITIONS MADE BY AO ARE JUSTIFIED AS PER THE SEIZED MATERIAL AND ACCORDING TO LAW AND THEREFORE PRAYED THAT ORDER OF THE AO SHOULD BE CON FIRMED. 12. THE LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY ARG UED THAT THE ACTION OF THE AO WAS IMPROPER TAKING INTO CONSIDERATION ONLY THE RECEIPTS IN THE DIARY AS UNDISCLOSED INCOME IGNORING THE PAYMENT MENTIONE D IN THE DIARY ITSELF. IT WAS ARGUED THAT THE DOCUMENT HAS TO BE READ AS A WH OLE. TO SUBSTANTIATE HIS ITA NOS.211 & 213/M/05 7 CLAIM, THE LD. COUNSEL EXPLAINED THE MOVEMENT OF CA SH FLOW AS REFLECTED IN THE DIARY. HE DREW OUR ATTENTION TO THE NOTINGS CO NTAINED IN THE DIARY A-1 AND FOR EXAMPLE EXPLAINED THAT + 50,000/- AC-MD-NC 21/7 DENOTES THAT RS. 50,000/- WERE GIVEN BY AC I.E. SHRI ANURAG CHOWDHA RY TO MANAGING DIRECTOR AND BY MD TO NC ON 21.7.2001 WHICH MEANS THAT RS. 5 0,000/- HAS BEEN SHOWN AS CASH OUTFLOW IN THE COLUMN MARKED O F AC AND RS. 50,000/- AS CASH INFLOW IN THE COLUMN MARKED + OF MD AND RS. 50,000/- AS CASH INFLOW IN THE COLUMN MARKED + MD. THE LD. COUNSEL FURTH ER ARGUED THAT IN THE SIMILAR ENTRIES AS AND WHEN NEGATIVE CASH OUTFLOW O CCURS, THE SAME HAS BEEN TREATED AS UNDISCLOSED INCOME AND HAS ALREADY BEEN OFFERED FOR TAXATION. THE LD. AR DREW OUR ATTENTION TO EXHIBIT-81 OF PAPER BO OK WHICH IS A STATEMENT SHOWING RECONCILIATION OF DIARY FIGURES WHICH IS AS UNDER: CULARS AS PER ASSESS - MENT ORDER RUPEES AS PER ASSESSEES CONTENTION RUPEES DIFFERENCE RUPEES DISPUTED AMOUNT RUPEES DIARY A - 1 32,787,000 12,817,500 19,969,5000 19,969,500 DIARY A - 2 633,000 633,000 NIL -- DIARY A - 3 3,020,000 3,020,000 NIL ---- DIARY - A - 4 4,570,000 4,570,000 NIL -- DIARY A - 12 11,638,810 10,996,500 642,310 -- DEDUCTION U/S. 37 52,648,810 (-)6,25,000 32,037,000 (-)6675000 20,611,810 6,050,000 19,969,500 6,050,000 5,20,23,810 25,362,000 26,661,810 26,019,500 13. THE LD. COUNSEL FOR THE ASSESSEE CONCLUDED THAT THE CASH MOVEMENTS AMONGST THE CUSTODIANS HAVE TO BE TESTED ON THE BAS IS OF PEAK CREDITS AS HAS BEEN CONSIDERED BY THE ASSESSEE WHILE FILING ITS RE TURN OF INCOME. 14. WE HAVE HEARD THE RIVAL CONTENTIONS OF THE ASSE SSEE. WE HAVE ALSO GONE THROUGH THE ORDERS OF AUTHORITIES BELOW AND CO PIES OF THE SEIZED MATERIAL AS EXHIBITED BY THE ASSESSEE IN ITS PAPER BOOK. WE FIND THAT THE ONLY FACT IN DISPUTE RELATES TO THE ENTRIES MADE IN DIAR Y A-1 AS CAN ALSO BEEN SEEN IN THE CHART EXHIBIT HEREIN ABOVE. THE CONTENTION OF THE ASSESSEE THAT PEAK ITA NOS.211 & 213/M/05 8 CREDIT SHOULD BE CONSIDERED AS UNDISCLOSED INCOME A ND SINCE THE PEAK CREDIT HAS ALREADY BEEN CONSIDERED BY THE ASSESSEE IN ITS RETURN OF INCOME FOR THE BLOCK PERIOD. ADDITIONS MADE BY AO SEEM TO BE UNWA RRANTED. THE LD. CIT(A) AFTER CONSIDERING ALL THE FACTS HAS HELD THA T ASSESSEE IS ENTITLED FOR THE BENEFIT OF PEAK CREDIT ENTRIES AND THAT THE ACTION OF THE AO WHICH IS BASED ON ADDING ONLY THE RECEIPT SIDE OF THE DIARY IS UNCALL ED FOR, WE DO NOT FIND ANY INFIRMITY OR ERROR IN THE FINDING OF THE LD. CIT(A) . THEREFORE, THE ORDER OF THE LD. CIT(A) IS CONFIRMED. THIS GROUND OF THE REVENU E IS DISMISSED. 15. GROUND NO. 2 IN REVENUES APPEAL AND GROUND NO. 1 IN THE CROSS APPEAL BY THE ASSESSEE RELATES TO THE SAME SET OF F ACTS THEREFORE BOTH THESE GROUNDS ARE TAKEN UP TOGETHER. 16. THE GRIEVANCE OF THE REVENUE IS THAT THE LD. CIT(A) SHOULD HAVE CONFIRM THE ADDITION U/S. 69C OF THE ACT AT RS. 60, 50,000/- AND THE ASSESSEES GRIEVANCE IS THAT ASSESSEE SHOULD HAVE BEEN ALLOWED RS. 66,75,000/- FROM THE UNDISCLOSED INCOME. 17. BEFORE US, THE LD. DEPARTMENTAL REPRESENTATIVE REITERATED WHAT HAS BEEN CONSIDERED BY AO IN HIS ASSESSMENT ORDER. THE LD. COUNSEL FOR THE ASSESSEE ON HIS TURN ARGUED THAT PAYMENT OF RS. 66, 75,000/- ARE RECORDED IN THE DIARIES AND THESE PAYMENTS HAVE BEEN MADE BY VA RIOUS CUSTODIANS OF CASH TO THE C.A. SHRI VINOD MODI AND ALL THESE PAYM ENTS ARE DULY REFLECTED IN THE DIARY. THEREFORE, THE CLAIM OF THE ASSESSEE FO R THE ALLOWANCE OF THE EXPENDITURE OF RS. 66,75,000/- SHOULD BE ACCEPTED. 18. THE LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTEN TION TO EXHIBIT 189 OF THE PAPER BOOK WHICH IS THE BLOCK ASSESSMENT ORDER OF SHRI VINOD MODI AND POINTED OUT THAT IN THE CASE OF C.A. SHRI VINOD MOD I WHO HAS RETURNED RS. 65,66,000/- AS PAYMENTS RECEIVED FROM THE ASSESSEE COMPANY AS UNDISCLOSED INCOME FOR THE BLOCK PERIOD HAS BEEN ASSESSEE AS SU CH BY THE SAME AO WHO HAS PASSED THE ASSESSMENT ORDER ON THE VERY SAME DA TE IN WHICH THE ASSESSMENT ORDER OF THE ASSESSEE COMPANY IS PASSED. IT WAS ARGUED BY THE ITA NOS.211 & 213/M/05 9 COUNSEL THAT HOW COME ONE PERSON PASSING TWO ORDERS ON THE SAME DATE CAN TAKE TWO DIFFERENT VIEWS. 19. THE LD. DR ARGUED THAT ONLY RS. 6,25,000/- HAS BEEN MENTIONED IN THE DIARY AND SINCE EVEN THE CUSTODIANS HAD NO SUFFICIE NT FUNDS TO MAKE THE PAYMENTS TO THE C.A. ADDITIONS OF RS. 60,50,000/- U /S. 69C OF THE ACT IS JUSTIFIED. 20. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND THE SEIZED DOCUMENTS AS EXHIBITED I N THE PAPER BOOK. 21. ADMITTEDLY, PAYMENT OF RS. 6,25,000/- TO THE CA IS DIRECTLY REFLECTED IN THE DIARY. HOWEVER, IT IS ALSO SEEN THAT ON VARIOU S DATES THE CUSTODIANS OF THE CASH HAVE MADE PAYMENTS OF RS. 48 LAKHS TO SHRI VIN OD MODI. THIS FACT HAS ALSO BEEN DISCUSSED BY THE LD. CIT(A) AT PAGE-27 OF HIS ORDER. WE HAVE ALSO GONE THROUGH THE ASSESSMENT ORDER OF SHRI VINOD MOD I. AS POINTED OUT BY LD. AR, WE FIND THAT THE AO AND THE DATE OF ORDER IS TH E SAME AS THE CASE OF THE ASSESSEE. HOWEVER, AFTER GOING THROUGH THE SAID AS SESSMENT ORDER, WE FIND THAT THE SAID C.A. SHIR VINOD MODI HAS OFFERED PEA K CREDIT OF RS. 65,66,000/- AS HIS INCOME FOR THE BLOCK PERIOD. THESE PEAK CRE DIT ARE NOTHING BUT DEPOSITED IN THE BANK ACCOUNT OF SHRI VINOD MODI WH O CLAIMED TO HAVE BEEN DEPOSITED THESE AMOUNTS OUT OF THE PAYMENT RECEIVED FROM M/S. GAMMON INDIA LTD. (ASSESSEE). WE ALSO FIND THAT THE SAME AO HAS EXHIBITED THE PAYMENTS RECEIVED BY SHRI VINOD MODI TO THE TUNE OF RS. 66,75,000/- AT PARA- 2 PAGE-3 OF THE ASSESSMENT ORDER OF SHRI VINOD MODI . THESE ENTRIES ARE AS PER THE DIARIES SEIZED FROM THE PREMISES OF M/S. GA MMON INDIA LTD I.E. ASSESSEE AND INVENTORISED AS A-1 AND A-4. WE FIND FORCE IN THE CONTENTION OF LD. COUNSEL THAT THE AO CANNOT BLOW HOT AND COOL I N THE SAME BREATH. IN THE CASE OF THE ASSESSEE, THE AO HAS ADDED RS. 60,50,00 0/- AS UNEXPLAINED EXPENDITURE AND WHEREAS IN THE HANDS OF THE RECIPIE NT I.E. SHRI VINOD MODI, THE SAME AO IS ACCEPTING THE RECEIPT OF RS. 66,75,0 00/- AS PAYMENT RECEIVED FROM THE ASSESSEE COMPANY AS PER THE ENTRIES IN THE DIARY HANDWRITTEN BY MRS. NILOUFER CONTRACTOR AS THE ASSESSEE HAS EXPLAI NED THE PAYMENTS MADE TO ITA NOS.211 & 213/M/05 10 SHRI VINOD MODI AND AS THE SAID PAYMENTS HAVE BEEN ACCEPTED BY THE AO IN THE HANDS OF SHRI VINOD MODI HAVE NOT BEEN RECEIVED FROM THE ASSESSEE COMPANY. THE AO IS DIRECTED TO ALLOW THE EXPENDITU RE OF RS. 60,50,000/- AS CLAIMED BY ASSESSEE. THE CROSS APPEAL FILED BY THE ASSESSEE IS ALLOWED AS WE HAVE ALREADY HELD THAT ASSESSEE HAS EXPLAINED THE P AYMENTS MADE AS PER THE ENTRIES IN THE DIARIES, WE CANNOT ACCEPT THAT IT I S UNEXPLAINED EXPENDITURE, THEREFORE, THE CLAIM OF THE REVENUE IS DISMISSED. 22. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED, WHEREAS CROSS APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS 30 TH DAY OF APRIL, 2012 SD/- SD/- (N.V. VASUDEVAN) (N.K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED 30 TH APRIL, 2012 RJ COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-CONCERNED 4. THE CIT(A)-CONCERNED 5. THE DR G BENCH TRUE COPY BY ORDER ASSTT. REGISTRAR, I.T.A.T, MUMBAI