Bahadur Singh Sabarwal, V. ACIT, Ragne-II,

ITSSA 223/DEL/2005

• Counselvise Citation: [2010] 124 COUNSELVISE.COM (IT) 9158 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 1 month(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 02-06-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Next Hearing Date: 07-04-2010
• Assessment Year: misc
• Appeal Filed On: 02-05-2005
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M MOHSIN ALAM
• Assessee Lawyers: ASHWANI TANEJA; DR RAKESH GUPTA
• Keywords: Unexplained investment; Search and seizure; Document seized; Opportunity of being heard; Block assessment; Retraction; Documents seized
• Section: 133A

Judgement Text

I.T. (SS) A. NO.223 & 297 /DEL/05 1/49 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH I NEW DELHI) BEFORE THE HON'BLE PRESIDENT SHRI VIMAL GANDHI AND SHRI A. K. GARODIA, ACCOUNTANT MEMBER I.T.(SS). A. NO.223 /DEL/2005 BLOCK PERIOD FROM 1.4.89 TO 31.3.99 SHRI BAHADUR SINGH SABHARWAL, ACIT, 1 J/6, NIT, RANGE-II, FARIDABAD. V. FARIDABAD.. AND I.T.(SS). A. NO. 297/DEL/2005 BLOCK PERIOD FROM 1.4.89 TO 31.3.99 ACIT, SHRI BAHADUR SINGH SABHARWAL, RANGE-II, 1 J/6, NIT, FARIDABAD. V. FARIDABAD. (APPELLANT) (RESPONDENT) APPELLANT BY : DR. RAKESH GUPTA & SHRI ASHWANI TANEJA ADVOCATE. RESPONDENT BY : SHRI M. MOHSIN ALAM, DR. ORDER . I.T.(SS).A. NO.223 & 297/DEL/05 2/49 PER A.K. GARODIA, AM: 1. THESE ARE CROSS APPEALS FILED BY THE ASSESSEE AN D REVENUE AND THESE ARE DIRECTED AGAINST THE ORDER OF LD CIT(A), FARIDABAD DATED 28.3.2005 FOR THE BLOCK PER IOD FROM 1.4.1989 TO 12.3.1999. 2. FIRST, WE TAKE UP THE APPEAL OF THE ASSESSEE I.E . I.T.A. NO.223/DE/2005. 3. THE GROUNDS RAISED BY THE ASSESSEE READ AS UNDER :- 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE, LD CIT(A) HAS ERRED IN LAW AND ON FACT S IN CONFIRMING AN AGGREGATE ADDITION OF RS.8,80,000/- O N ACCOUNT OF ALLEGED UNEXPLAINED INVESTMENT IN TWO CA RS WITHOUT ANY BASIS, MATERIAL OR EVIDENCE, MERELY ON THE BASIS OF SUSPICION, SURMISES AND CONJECTURES. 2. IN ANY VIEW OF THE MATTER AND IN ANY CASE, ADDIT ION OF RS.8,80,000/- MADE BY THE LD ASSESSING OFFICER A ND CONFIRMED BY LD CIT(A) IS BAD IN LAW AND AGAINST TH E FACTS AND CIRCUMSTANCES OF THE CASE. 3. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE, LD CIT(A) HAS ERRED IN LAW AND ON FACT S IN CONFIRMING THE ACTION OF THE LD ASSESSING OFFICER I N FRAMING THE IMPUGNED ASSESSMENT WITHOUT ASSUMPTION VALID JURISDICTION AND AS SUCH IMPUGNED ASSESSMENT WAS LIABLE TO BE DECLARED NULL AND VOID, MORE SO WH EN NOTICE U/S 158BC WAS VOID. 4. THAT THE APPELLANT CRAVES THE LEAVE TO ADD, AMEN D, MODIFY DELETE ANY OF THE GROUNDS OF APPEAL BEFORE O R AT THE TIME OF HEARING AND ALL THE ABOVE GROUNDS ARE WITHOUT PREJUDICE TO EACH OTHER. . I.T.(SS).A. NO.223 & 297/DEL/05 3/49 4. IT WAS SUBMITTED BY THE LD AR OF THE ASSESSEE TH AT GROUND NO. 3 IS NOT PRESSED AND ACCORDINGLY THE SAM E IS DISMISSED AS NOT PRESSED. GROUND NO.4 IS GENERAL AND IN GROUND NO. 1 & 2, THE ISSUE INVOLVED IS COMMON. 5. THE FACTS IN BRIEF ARE THAT IT IS NOTED BY THE A SSESSING OFFICER ON PAGE NO.7 OF THE ASSESSMENT ORDER THAT DURING THE COURSE OF SEARCH, TWO CARS BEARING NO. H R-5- D-0939 AND UP-14-D-5428 (CEILO) WERE FOUND AT THE RESIDENT OF THE ASSESSEE. IT IS ALSO NOTED BY THE ASSESSING OFFICER THAT THE KEYS OF THESE CARS WERE FOUND AT THE RESIDENCE OF SHRI INDERJIT SINGH SABHARWAL, THE BROTHER OF THE ASSESSEE. IT IS ALSO NOTED BY THE AS SESSING OFFICER THAT SHRI INDERJIT SINGH SABHARWAL IN HIS STATEMENT RECORDED IN THE COURSE OF SEARCH HAD ADMI TTED THAT THESE CARS KEYS ARE OF THE ASSESSEE PRESENT BE FORE US. IT IS ALSO NOTED BY THE ASSESSING OFFICER THAT SHRI INDERJIT SINGH SABHARWAL ADMITTED THAT SERVICE JOBS CARDS FROM JAINSONS AUTOMOBILES, MATHURA ROAD, FARIDABAD, DOCUMENT A-6, SEIZED FROM THE RESIDENCE OF SHRI BAHADUR SINGH SABRAWAL I.E. PRESENT ASSESSEE I N THE NAME OF SHRI SUBASH CHANDER RELATE TO CEILO CAR . I.T.(SS).A. NO.223 & 297/DEL/05 4/49 UP-14-D-5428. IT IS HELD BY THE ASSESSING OFFICER T HAT SINCE THESE CARS WERE FOUND AT THE RESIDENCE OF THE PRESENT ASSESSEE I.E. SHRI BAHADUR SINGH SABHARWAL AND SERVICE JOB CARDS AND CARS KEYS WERE FOUND FROM THE RESIDENCE OF SHRI INDERJIT SINGH SABHARWAL SOLIDLY PROVE THAT BOTH THESE CARS ARE BENAMI CARS OF SHRI BAHADUR SINGH. IT IS NOTED BY THE ASSESSING OFFICER THAT ON THESE JOB CARDS, TELEPHONE OF SHRI BAHADUR SINGH SABHARWAL I.E. 4175106 IS WRITTEN. THE ASSESSING OFFICER FURTHER NOTED THAT THE VALUE OF ONE CAR IS RS2.30 LAKHS AND VALUE OF CEILO CAR IS RS.5.50 LAKHS. TOT AL OF BOTH THESE FIGURES COMES TO RS.7.80 LAKLHS BUT THE ASSESSING OFFICER MADE ADDITION OF RS.8.80- LAKHS O N THIS ACCOUNT. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE LD CIT(A). BEFORE LD CIT(A) , IT WAS SUBMITTED BY THE ASSESSEE THAT THERE IS A MI STAKE IN THE AMOUNT BECAUSE AS PER BREAK UP OF THE VALUE OF THESE TWO CARS TOTAL COMES TO RS.7.80 LAKHS BUT THE ASSESSING OFFICER HAS MADE ADDITION OF RS.8.80 LAKH S. ON ACCOUNT OF THIS CONTRADICTION IN FIGURES, LD CIT (A) HAS DIRECTED THE ASSESSING OFFICER TO VERIFY THE FA CTS AND MAKE CORRECTION IF REQUIRED. ON MERIT, IT WAS SUBMITTED BEFORE THE LD CIT(A) THAT THE FINDING OF THE . I.T.(SS).A. NO.223 & 297/DEL/05 5/49 ASSESSING OFFICER THAT THESE TWO CARS WERE FOUND AT THE RESIDENCE OF THE ASSESSEE IS WITHOUT ANY EVIDENCE. IT WAS ALSO SUBMITTED THAT IN FACT, THERE IS NO SPACE IN THE HOUSE OF THE ASSESSEE WHERE ANY CAR CAN BE PARKED. IT WAS ALSO SUBMITTED THAT THERE IS NO MENTION OF ANY CAR HAVING BEEN FOUND AT THE RESIDENCE OF THE ASSESSEE IN THE PANCHNAMA. IT WAS ALSO POINTED OUT BEFORE LD CIT(A) THAT TO THE BEST OF ASSESSEES KNOWLEDGE, SH RI INDERJIT SINGH SABHARWAL BROTHER OF THE ASSESSEE HA S NOT ADMITTED THAT THESE CARS BELONGED TO THE ASSESSEE. LD CIT(A) HAS UPHELD THE ASSESSMENT ORDER ON THIS ISSU E ON THE BASIS THAT A PERUSAL OF THE STATEMENT OF SHR I INDERJIT SINGH SABHARWAL CLEARLY SHOWS THAT THESE VEHICLES BELONGED TO HIS BROTHER SHRI BAHADUR SINGH SABHARWAL I.E. THE PRESENT ASSESSEE. NOW, THE ASSES SEE IS IN FURTHER APPEAL BEFORE US. 6. IT WAS SUBMITTED BY LD AR OF THE ASSESSEE THAT PANCHNAMA IS AVAILABLE ON PAGES 5-19 OF THE PAPER BOOK AND THERE IS NO MENTION IN THE PANCHNAMA THAT ANY CAR WAS FOUND OR ANY CAR KEY WAS FOUND IN THE COURS E OF SEARCH. REGARDING THE STATEMENT OF SHRI INDERJIT S INGH SABHARWAL, IT WAS SUBMITTED THAT THE SAME IS AVAILA BLE ON PAGE NO.461 OF THE PAPER BOOK IN DEPARTMENTAL . I.T.(SS).A. NO.223 & 297/DEL/05 6/49 APPEAL IN THE CASE OF SHRI INDERJIT SINGH SABHARWAL . OUR ATTENTION WAS ALSO DRAWN TO THE STATEMENT OF TH E ASSESSEE RECORDED ON 26.4.1998 WHICH IS AVAILABLE O N PAGES 406-414 OF THE PAPER BOOK IN DEPARTMENTAL APPEAL IN ASSESSEES OWN CASE AND IT IS SUBMITTED T HAT IN THIS STATEMENT, NO QUESTION WAS ASKED FROM THE ASSE SSEE WITH REGARD TO THESE CARS WHICH ARE ALLEGED TO BE O WNED BY THE ASSESSEE. IT IS ALSO SUBMITTED THAT A QUESTI ONNAIRE DATED 22.3.2001 WAS ISSUED BY THE ASSESSING OFFICER AND COPY OF WHICH IS AVAILABLE ON PAGES 20-24 OF TH E PAPER BOOK AND IN THE SAID QUESTIONNAIRE, A QUERY W AS RAISED BY THE ASSESSING OFFICER REGARDING THAT THES E TWO CARS ARE ALLEGED TO BE OWNED BY THE ASSESSEE. A REP LY WAS SUBMITTED BY THE ASSESSEE TO THE ASSESSING OFFI CER VIDE LETTER DATED 26.3.2001, COPY OF WHICH IS AVAIL ABLE ON PAGES 28-31 OF THE PAPER BOOK IN WHICH IT WAS SUBMITTED THAT THE KEYS OF THE CARS WERE NOT FOUND AT THE RESIDENCE OF THE ASSESSEE. REGARDING THIS ALLEGATIO N THAT THE ASSESSEE IS BENAMI OWNER OF THESE CARS, WHICH A RE REGISTERED IN THE NAME OF ONE SHRI DINESH KUMAR, IT WAS SUBMITTED THAT THIS ALLEGATION IS BASELESS AND INCORRECT. REGARDING CEILO CAR, THE ASSESSING OFFIC ER HIMSELF HAS MENTIONED THAT THIS CEILO CAR BELONGED TO . I.T.(SS).A. NO.223 & 297/DEL/05 7/49 SHRI SUBASH CHANDER AND ASSESSEE NEVER OWNED ANY OF THESE VEHICLES AND ENQUIRY MAY BE MADE FROM SHRI SUBASH CHANDER AND SHRI DINESH KUMAR. IT WAS ALSO SUBMITTED THAT THE ADDITION UPHELD BY THE LD CIT(A) SHOULD BE DELETED. IT WAS ALSO SUBMITTED BY LD COU NSEL OF THE ASSESSEE THAT THE ISSUE MAY BE RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER FOR A FRESH DECIS ION. 7. IN REPLY, LD DR OF THE REVENUE SUPPORTED THE ORD ERS OF THE AUTHORITIES BELOW. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE GON E THROUGH THE MATERIAL AVAILABLE ON RECORD. WE FIND T HAT THE ISSUE HAS BEEN DECIDED BY THE AUTHORITIES BELOW WITHOUT MAKING PROPER ENQUIRY. IN THE STATEMENT OF THE ASSESSEE RECORDED BY THE ASSESSING OFFICER ON 26.4.1999, NO QUESTION WAS ASKED FROM THE ASSESSEE REGARDING THESE TWO CARS. IN THE STATEMENT OF SHRI INDERJIT SINGH SABHARWAL RECORDED ON THE DATE OF SE ARCH I.E. ON 12.3.1999, QUESTION NO.2 WAS ASKED WITH REG ARD TO KEYS OF JAINSONS AUTOMOBILES, REGARDING CAR HR51 - D-0939 AND INVOICE OF M/S VIPUL MOTORS LTD. FOUND FROM HIS RESIDENCE THAT WHO IS THE OWNER OF THESE VEHICLES AND IN REPLY IT WAS SUBMITTED BY HIM THAT THIS IS HIS BROTHERS VEHICLE AND THE QUESTION MAY BE AS KED . I.T.(SS).A. NO.223 & 297/DEL/05 8/49 FROM SHRI BAHADUR SINGH SABHARWAL. IN SPITE OF THIS , NO QUESTION WAS ASKED FROM THE ASSESSEE IN THE COURSE OF HIS STATEMENT RECORDED ON 26.4.1999. NO ENQUIRY WAS MADE FROM SHRI DINESH KUMAR OR FROM SHRI SUBASH CHANDER. THE ASSESSEE WAS ALSO NOT GIVEN AN OPPORTUNITY TO CROSS EXAMINE HIS BROTHER SHRI INDER JIT SINGH SABHARWAL WITH REGARD TO HIS STATEMENT AS PER WHICH IT WAS STATED BY HIM THAT THE CAR BELONGS TO THE PRESENT ASSESSEE. UNDER THESE FACTS, WE FEEL THAT THIS MATTER SHOULD GO BACK TO THE FILE OF THE ASSESSING OFFICER FOR A FRESH DECISION AFTER MAKING DETAILED ENQUIRIES AND AFTER RECORDING STATEMENT OF THE ASSE SSEE WITH REGARD TO THESE TWO CARS AND AFTER MAKING ENQU IRIES FROM SHRI DINESH KUMAR AND SHRI SUBASH CHANDER. IF REQUIRED, THE ASSESSEE MAY BE ALLOWED TO CROSS EXAM INE HIS BROTHER SHRI INDERJIT SINGH SABHARWAL AND AFTER DETAILED ENQUIRY, THE ASSESSING OFFICER SHOULD DECI DE THIS ISSUE AFRESH AND PASS NECESSARY ORDER AS PER L AW AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS PARTLY ALLOWED FOR STATISTICAL PURPOSES. . I.T.(SS).A. NO.223 & 297/DEL/05 9/49 10. NOW, WE TAKE UP REVENUES APPEAL IN I.T.(SS).A. NO.297/DEL/2005. 11. GROUND NO.1 OF THE APPEAL READS AS UNDER:- ON THE FACTS AND CIRCUMSTANCES OF THE CASE WHETHER THE CIT(A) WAS RIGHT IN LAW IN DELETING THE ADDITION OF RS.5,00,000/- ON ACCOUNT OF UNDISCLOSED INVESTMENT IN PURCHASE OF LAND FROM SMT. SARLA DEVI. 12. BRIEF FACTS OF THE CASE ARE THAT IT IS NOTED BY THE ASSESSING OFFICER ON PAGE NO.2 THAT THE ASSESSEE HAS PURCHASE D LAND FROM SMT. SARLA DEVI FOR RS.5 LAKHS. IT IS ALSO NO TED THAT THIS WAS ADMITTED BY SMT. SARLA DEVI IN HER STATEME NT, THE ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN THE SOURCE OF THIS INVESTMENT. IT IS ALSO NOTED BY THE ASSESSI NG OFFICER THAT AS PER ASSESSEES LETTER DATED 7.3.200 3, THE ASSESSEE HAS DENIED THE PURCHASE OF LAND FROM SMT. SARLA DEVI. THE ASSESSING OFFICER SAYS THAT AS PER THE EV IDENCE AVAILABLE ON RECORD, THE ASSESSEE HAS INVESTED A SU M OF RS. 5 LAKHS FOR PURCHASE OF LAND FROM SMT. SARLA DEVI A ND SINCE THE SOURCE OF THIS INVESTMENT HAS NOT BEEN EX PLAINED, THE SAME AMOUNT OF RS.5 LAKHS IS ADDED TO THE INCOM E OF THE ASSESSEE. IT IS FURTHER NOTED BY THE ASSESSING OFFICER IN PARA NO.5.1. OF THE ASSESSMENT ORDER THAT AS PER AG REEMENT DATED 1.1.1998 BETWEEN SMT. SARLA DVI WIFE OF SHRI RAM RICH OF VILLAGE PALLI, SHRI BAHADUR SINGH I.E. THE PRESENT . I.T.(SS).A. NO.223 & 297/DEL/05 10/49 ASSESSEE PAID RS. 5 LAKHS FOR 4 KANALS AND 3 MARLAS LAND AT VILLAGE PALLI ON 1.1.1998. BEING AGGRIEVED, THE AS SESSEE CARRIED THE MATTER IN APPEAL BEFORE LD CIT(A). IT W AS ALSO SUBMITTED BEFORE LD CIT(A) THAT THE ASSESSING OFFIC ER HAS NOT BROUGHT ON RECORD ANY EVIDENCE TO SHOW THAT THE ASSESSEE HAS MADE ANY INVESTMENT BY PAYING ANY AMOU NT TO SMT. SARLA DEVI. IT IS ALSO SUBMITTED THAT IN T HE COURSE OF SEARCH, NO EVIDENCE WAS FOUND WHICH COULD SUGGES T EVEN REMOTELY THAT THE ASSESSEE HAS PAID ANY SUM OF RS. 5 LAKHS TO SMT. SARLA DEVI. IT IS FURTHER SUBMITTED BEFORE LD CIT(A) THAT THE ASSESSING OFFICER IN HIS NOTICE DAT ED 7.2.2003 AT PAGE 10 THEREOF MENTIONS ABOUT THE RECE IPT AND EKRARNAMA PLACED AT LOOSE PAGES 88-89 IN THE CASE O F SHRI ML SAINI AND FURTHER LEASE DEEDS AT PAGES 82-83 WAS FILED BUT COPIES OF THESE PAGES HAVE NOT BEEN MADE AVAILA BLE. LD CIT(A) HAS DELETED THIS ADDITION ON THE BASIS TH AT AS PER PERUSAL OF THESE DOCUMENTS, IT IS FOUND THAT TH IS IS AN AGREEMENT TO SELL BETWEEN ONE SHRI VIJAY KUMAR AROR A AND THIS DOCUMENT DOES NOT EVEN CONTAIN THE NAME OF THE ASSESSEE. IT IS FURTHER NOTED BY THE LD CIT(A) THAT PAGE 90 CONTAIN THE NAME OF ONE SHRI BAHADUR SINGH SABHARWA L WITH MONTHS SCRIBBLED OF DECEMBER, JANUARY & FEBRUA RY AMOUNT OF RS.21,000/- ETC. IT IS HELD BY HIM THAT I T IS . I.T.(SS).A. NO.223 & 297/DEL/05 11/49 INDEED DIFFICULT TO EVEN COMPREHEND HOW THE ASSESSI NG OFFICER HAS GIVEN A FINDING THAT THE ASSESSEE HAS M ADE INVESTMENT IN LAND, TRANSACTED WITH SMT. SARLA DEVI AND MADE AN UNDISCLOSED INVESTMENT OF RS. 5 LAKHS. IT IS HELD BY HIM THAT THE FINDING OF THE ASSESSING OFFICER IS ENTIRELY MISPLACED AND MISCONCEIVED. HENCE, THE TREATMENT O F RS.5 LAKHS AS UNDISCLOSED INCOME OF THE ASSESSEE IS DELETED. NOW, THE REVENUE IS IN APPEAL BEFORE US. 13. LD. D.R. FOR THE REVENUE SUPPORTED THE ASSES SMENT ORDER WHEREAS IT IS SUBMITTED BY THE LD. A.R. FOR THE ASS ESSEE THAT THERE WAS NO AGREEMENT DATED 01.01.1998 EVER E NTERED INTO BY THE ASSESSEE WITH SMT. SARLA DEVI AS ALLEGE D AND NOTHING WAS FOUND DURING THE COURSE OF SEARCH AND H ENCE THE ADDITION WAS RIGHTLY DELETED BY THE LD. CIT(A). HE SUPPORTED THE ORDER OF LD. CIT(A). IT WAS SUBMITTED THAT THE DOCUMENTS FOUND FROM ONE MR. M L SAINI ARE AVAILABLE AT PAGES 310-314. 14. WE HAVE CONSIDERED THE RIVAL SUBMISSION AND PER USED THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. WE FIND THAT THE PAGES 310-311 OF THE PAPER BOOK IS AN AGREEMENT DATED 11 TH NOVEMBER 1998 BETWEEN ONE MR. VIJAY KUMAR ARORA BEING THE SELLER AND THERE IS NO NAME MENTIONED IN THE AGREEMENT OF THE BUYER. . I.T.(SS).A. NO.223 & 297/DEL/05 12/49 THIS AGREEMENT IS WITH REGARD TO SALE OF A LAND AT FARIDABAD OF 500 SQ. YARDS. THE RATES FIXED AS PER THIS AGREEMENT IS @ RS.2,200/- PER SQ. YARD AND IT IS AL SO NOTED IN THE AGREEMENT THAT THE BUYER HAS PAID RS.1 LACS IN ADVANCE AND THE BALANCE AMOUNT OF RS.10 LACS WILL B E PAID UP TO 25.12.1998. IN VIEW OF THESE FACTS, THIS AGR EEMENT IS NOWHERE RELATED TO THE ALLEGATION OF THE A.O. IN PA RA 5.1 OF THE ASSESSMENT ORDER THAT AS PER THE AGREEMENT DATE D 01.01.1998 BETWEEN SMT. SARLA DEVI AND THE ASSESSEE , THE ASSESSEE HAS PAID RS.5 LACS FOR 4 CANALS AND 3 MARL AS LAND AT VILLAGE PALI. LETTER DATED 18.03.2005 WRITTEN B Y THE A.O. TO LD. CIT(A) IS AVAILABLE A PAGES 399-401 OF THE PAPER BOOK. IN THE SAME LETTER, IT IS STATED BY TH E A.O. WITH REGARD TO THIS ADDITION OF RS.5 LACS ON ACCOUN T OF PURCHSE OF LAND FROM SMT. SALRA DEVI THAT THIS ADDI TION IS BASED ON PAGES 88-90 AND 82-83 OF THE DOCUMENT NO.8 OF SHRI M L SAINI WHICH HAD BEEN GIVEN TO THE ASSESSEE VIDE HIS OFFICE LETTER DATED 28.01.2005. THE SAID LETTE R DATED 28.01.2005 WRITTEN BY THE A.O. TO THE ASSESSEE IS A LSO AVAILABLE AT PAGES 293-328 OF THE PAPER BOOK. IN T HIS LETTER DATED 28.012005, THE A.O. HAS MENTIONED PAGE S 56, 82, 83 AND 88-90 OF A-8 OF SHRI M L SAINI. THESE P AGES ARE THE SEIZED PAPERS FROM SHRI M L SAINI AVAILABLE IN THE . I.T.(SS).A. NO.223 & 297/DEL/05 13/49 PAPER BOOK BUT THESE PAPERS ARE NOT CONTAINING ANY AGREEMENT OF THE ASSESSEE WITH SMT. SARLA DEVI. LD . D.R. ALSO COULD NOT PRODUCE BEFORE US ANY SUCH AGREEMENT , WHICH IS REFERRED BY THE A.O. IN PARA 5.1 OF THE AS SESSMENT ORDER. UNDER THIS FACTUAL POSITION, WE FIND NO REA SON TO INTERFERE IN THE ORDER OF LD. CIT(A) ON THIS ISSUE WHEREIN HE HAS DELETED THE ADDITION OF RS.5 LACS ON THE BAS IS THAT THE FINDINGS OF A.O. IS ENTIRELY MISPLACED AND MISCONCEIVED. WE, THEREFORE, CONFIRM THE ORDER OF THE LD. CIT(A) ON THIS ISSUE. GROUND NO.1 OF THE REVENUE I S REJECTED. 15. THE GROUND NO.2 OF THE REVENUE READS AS UNDER: ON THE FACTS AND CIRCUMSTANCES OF THE CASE WHETHER THE CIT(A) WAS RIGHT IN LAW IN DELETING THE ADDITION OF RS.8,40,000/- ON ACCOUNT OF UNDISCLOSED INCOME IN PURCHASE OF PLOT NO.3D/46, NIT, FARIDABAD. 16. THE BRIEF FACTS OF THE CASE ARE THAT IT IS NOTE D BY THE A.O. AT PAGE 5 OF THE ASSESSMENT ORDER THAT THE ASSESSEE SHRI BAHADUR SINGH HAD ADMITTED IN THE STATEMENT RECORDE D ON 26.04.1999 THAT HE ALONG WITH HIS BROTHER HAD PURCH ASED A PLOT IN FARIDABAD IN JANUARY 1997 MEASURING 300 SQ. YARDS ALLEGEDLY FOR RS.4 LACS AND THE SAME WAS DECLARED B Y HIM IN HIS INCOME TAX RETURN FOR THE ASSESSMENT YEAR 19 97-98. IT IS FURTHER NOTED BY THE A.O. THAT MARKET RATE OF THE LAND . I.T.(SS).A. NO.223 & 297/DEL/05 14/49 IN MOST POSH LOCALITY OF FARIDABAD RANGES FROM RS.7 ,000/- TO RS.10,000/- PER SQ. YARD AND THE A.O. HAD STATED THAT THE VALUE OF THIS PLOT PURCHASED BY THE ASSESSEE IN JAN UARY 1997 HAS TO BE ASSESSED @ RS.7,000/- PER SQ. YARD RESULTING IN THE TOTAL VALUE OF THE LAND AT RS.21 L ACS AND THE 40% SHARE OF THE ASSESSEE COMES TO RS.8.40 LACS. T HUS THE ADDITION OF THIS AMOUNT IN THE INCOME OF THE ASSESS EE BY THE A.O. BEING AGGRIEVED, ASSESSEE CARRIED THE MAT TER IN APPEAL BEFORE THE LD. CIT(A) WHO HAVE DECIDED THIS ISSUE AT PARA 4.3 TO 4.4 OF HIS ORDER AND THIS ADDITION W AS DELETED BY HIM AND NOW THE REVENUE IS IN APPEAL BEFORE US. 17. THE LD. D.R. FOR THE REVENUE SUPPORTED THE ASSE SSMENT ORDER WHEREAS THE LD. A.R. FOR THE ASSESSEE SUPPORT ED THE ORDER OF THE LD. CIT(A). 18. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. WE FIND THAT IN PARA 4 OF THE ASSESSMENT ORDER, THE A.O. IS REFERRING TO THE PREV AILING MARKET RATES IN FARIDABAD AREA IN JANUARY 1997. IN THAT PARA, IT IS NOTED BY THE A.O. THAT THE PLOT IN 3F/1 4B OF 300 SQ. YARDS WAS SOLD FOR RS.9.03 LACS @ RS.3010/- PER SQ. YARD. HE FURTHER STATED THAT BLOCK 3F IS VERY MUCH INFERIOR THEN BLOCK 3D AND THEREAFTER, HE SIMPLY JUMPED TO T HE . I.T.(SS).A. NO.223 & 297/DEL/05 15/49 CONCLUSION THAT THE MARKET VALUE OF THE PLOT PURCHA SED BY THE ASSESSEE ALONG WITH HIS BROTHER CANNOT BE LESS THAN RS.7,000/- PER SQ. YARD IN JANUARY 1997. IN THE LI GHT OF THESE FACTS, WE FIND THAT THERE IS NO SUCH MATERIAL REFERRED TO BY THE A.O. FOR MAKING THIS ADDITION AND THIS AD DITION WAS MADE BY HIM ON THE BASIS OF DIFFERENCE OF ALLEG ED MARKET PRICE OF THE PLOT PURCHASED BY THE ASSESSEE IN JANUARY 1997 WHICH WAS DULY DISCLOSED BEFORE THE IN COME TAX DEPARTMENT AND NO INCRIMINATING MATERIAL IS ALL EGED TO HAVE BEEN FOUND IN THE COURSE OF SEARCH INDICATING THAT ANY EXTRA PAYMENT IN CASH WAS MADE BY THE ASSESSEE ON ACCOUNT OF PURCHASE OF THIS PLOT. IN THE ABSENCE O F ANY SUCH MATERIAL FOUND IN THE COURSE OF SEARCH, NO ADD ITION CAN BE MADE IN THE COURSE OF BLOCK ASSESSMENT ON TH E BASIS OF ESTIMATING OF MARKET PRICE. HENCE WE DO NOT FIN D ANY REASON TO INTERFERE IN THE ORDER OF LD. CIT(A) ON T HIS ISSUE ALSO. GROUND NO.2 OF THE REVENUE IS REJECTED. 19. GROUND NO.3 OF THE REVENUE READS AS UNDER: ON THE FACTS AND CIRCUMSTANCES OF THE CASE WHETHER THE CIT(A) WAS RIGHT IN LAW IN DELETING THE ADDITION OF RS.30,90,000/- AS UNDISCLOSED INVESTMENT IN PURCHAS E OF LAND MEASURING 15 KANAL 4 MARLAS IN VILLAGE PALI. 20. THE BRIEF FACTS OF THE CASE ARE THAT IT IS NOTE D BY THE A.O. ON PAGE 5 & 6 OF THE ASSESSMENT ORDER THAT AS PER T HE . I.T.(SS).A. NO.223 & 297/DEL/05 16/49 STATEMENT OF SHRI GAURI SHANKER, 2 ACRES OF LAND WA S PURCHASED IN VILLAGE PALI AT SOHNA ROAD @ RS.16 LAC S PER ACRE TOTALING RS.32 LACS. THE A.O. HAS STATED THAT SHRI GAURI SHANKER HAS STATED THAT IN JULY/AUGUST 1997, HE SOLD THIS LAND MEASURING 15 CANALS 4 MARLAS IN VILLAGE P ALI AT SOHNA ROAD TO BAHADUR SINGH, FARIDABAD FOR RS.3000- 4000/-. I IS FURTHER NOTED BY THE A.O. THAT A FURT HER INQUIRY MADE BY THE DDI FROM SHRI RAMESH CHAND AND SOHAN LALA OF VILLAGE PALI FROM WHOM GAURI SHANKER PURCHA SED THAT LAND, IT IS STATED BY THEM THAT THEY HAD SOLD 8 BIGHAS LAND TO GAURI SHANKER FOR RS.6.60 LACS IN 1995-96. THEREAFTER IT IS STATED BY THE A.O. THAT IT IS CLEA R THAT GAURI SHANKER HAD PAID RS.10 LACS FOR PURCHASE OF 15 CANA LS AND 9 MARLAS INSTEAD OF RS.2000-3000/- AS STATED BEFORE HIM. THEREAFTER, THE A.O. HOLDS THAT OBVIOUSLY AFTER 2 Y EARS, THE RATES OF LAND IN JULY 1997 WHEN THE ASSESSEE PURCHA SED THE LAND WERE RS.16 LACS PER ACRE. THEREAFTER, THE A.O . HAS STATED THAT @ RS.16 LACS PER ACRE, THE VALUE OF THE LAND PURCHASED BY THE ASSESSEE TO THE EXTENT OF 15 CANAL S 9 MARLAS COMES TO RS.30,00,900/-. THE A.O. MADE ADDI TION OF THE SAME. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) WHO HAS DELETED THIS A DDITION . I.T.(SS).A. NO.223 & 297/DEL/05 17/49 AS PER PARA 5 OF HIS ORDER AND NOW THE REVENUE IS I N APPEAL BEFORE US. 21. THE LD. D.R. FOR THE REVENUE SUPPORTED THE ASSE SSMENT ORDER WHEREAS THE LD. A.R. FOR THE ASSESSEE SUPPORT ED THE ORDER OF LD. CIT(A). WE FIND THAT HIS ISSUE WAS DE CIDED BY THE LD. CIT(A) AS PER PARA 5.3 OF HIS ORDER WHIC H IS REPRODUCED BELOW: 5.3 THE ISSUE HAS BEEN EXAMINED. VIDE LETTER DATE D 18.03.2005 THE A.O. HAS INFORMED THAT THE STATEMENT OF VARIOUS PERSONS INVOLVED HAD BEEN SENT TO THE ASSES SEE ON 14.03.2005. I HAVE CAREFULLY GONE THOUGH THE ASSESSMENT ORDER, THE WRITTEN SUBMISSIONS AND THE VARIOUS STATEMENTS RELIED UPON BY THE A.O. ALL THE STATEMENT OF VARIOUS PERSON MAKING A VERY REVEALING READING AND FACTS REVEALED FROM ALL THE ABOVE STATE MENTS IS THAT THE A.O. HAS HEAVILY RELIED ON IMAGINATION. PAGE 3 OF THE STATEMENT OF SH. GAURI SHANKAR RECORDED ON 03.07.1999 CLEARLY STATES THAT THE LAND HAD BEEN SO LD IN JULY 1999 TO SH. BAHADUR SINGH SABARWAL FOR AROUND RS.3,000/- TO RS.4,000/- ON LEASE AND THAT THIS LAN D WAS REGISTERED AND HAD EARLY BEEN ACQUIRED FOR AMOUNT O F RS.2,000/- TO RS.3,000/- IN 12995-96. THE PATTA WH ICH IS A REGISTERED DOCUMENT REFERS TO THE LEASE AT RS. 3,000/. A PERUSAL OF THE STATEMENT OF SH. SUNIL KUMAR RECOR DED ON 23.07.1999 REVERSALS THAT HE HAD SOLD 8 BIGHAS O F LAND TO SH. VAURI SHANKAR FOR A SUM OF RS6,61,000/- AND ON PAGE 4 HE CATEGORICALLY DENIES ANY TRANSACTI ON WITH SH. BAHADUR SINGH SABARWAL. A PERUSAL OF THE STATEMENT OF SH. RAMESH CHAND ALSO DOES NOT REFER T O THE TRANSACTION WITH SH. BAHADRU SINGH SABARWAL BUT REFERS TO THE SAID HAVING BEEN SOLD TO SH. GAURI SH ANKAR . I.T.(SS).A. NO.223 & 297/DEL/05 18/49 FOR A SUM OF RS.30,00,000/- AND THIS REFERS TO SOME LAND MEASURING 3 CANALS. THIS IS THE SUMMARY OF THE STATEMENT WHICH HAS BEEN RELIED UPON BY THE A.O. FROM THE ABOVE FACTS AND CIRCUMSTANCES, IT BECOMES APPARENT THAT THERE IS NO EVIDENCE, WHICH HAS BEEN FOUND DURING THE SEARCH AND SEIZURE PROCEEDINGS TO SUPPORT THE CONCLUSION DRAWN BY THE A.O. WHAT HAS BEEN RELIED UPON BY THE A.O. ARE STATEMENTS OF DIFF ERENT PERSONS, STATEMENTS WHICH HAVE NOT EVEN TO BE CONFRONTED TO THE APPELLANT AND STATEMENTS WHICH HA S AS EARLIER BEEN SHOWN DO NOT AT ALL EVEN REMOTELY SUGG EST THE UNDISCLOSED INVESTMENT OF THE APPELLANT IN PROP ERTY REFERRED TO BY THE A.O. AND TO THE EXTENT OF RS.30,00,900/-. UNDER THE CIRCUMSTANCES THE STAND OF THE A.O. CANNOT BE ACCEPTED AND THE TREATMENT OF RS.30,00,900/- AS UNDISCLOSED INCOME/INVESTMENT IS ACCORDINGLY DELETED. 22. FROM THE ABOVE PARA OF THE ORDER OF LD. CIT(A), WE FIND THAT THIS LAND WAS TAKEN ON LEASE BY THE ASSESSEE A ND AS PER THE REGISTERED DOCUMENT, THIS LAND WAS TAKEN BY HIM ON LEASE @ RS.3,000/-. IN THE ASSESSMENT ORDER ALSO, THE A.O. HAS NOT REFERRED TO ANY MATERIAL FOUND IN THE COURS E OF SEARCH SUGGESTING ANY OUTRIGHT PURCHASE OF LAND BY THE ASSESSEE AT VILLAGE PALI. A STATEMENT OF SHRI GAUR I SHANKAR REFERRED TO BY THE A.O. SUPPORTS THE CASE O F THE ASSESSEE AS PER WHICH IT WAS STATED BY SHRI GAURI S HANKAR THAT THE LAND MEASURING 15 CANALS 4 MARLAS IN VILLA GE PALI WAS GIVEN BY HIM TO THE ASSESSEE FOR RS.3,000-4,000 /-. . I.T.(SS).A. NO.223 & 297/DEL/05 19/49 THE A.O. HAS ALSO REFERRED TO ONE MORE STATEMENT OF SHRI GAURI SHANKAR AS PER WHICH THE LAND WAS TAKEN ON LE ASE BY HIM AT RS.2,000/--3,000/-. THEREAFTER, THE A.O. DE CIDED THIS ISSUE ON THE BASIS OF SOME FURTHER INQUIRES MA DE BY DDI FROM SHRI RAMESH CHANDER AND SOHAN LAL. IN THE ABSENCE OF ANY SEIZED MATERIAL INDICATING ANY PURCH ASE OF LAND BY THE ASSESSEE WHICH IS NOT DISCLOSED BEFORE THE DEPARTMENT, THE ADDITION MADE BY THE A.O. IN BLOCK ASSESSMENT CANNOT BE JUSTIFIED AND HENCE WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF LD. CIT(A) ON THIS ISSUE ALSO. HENCE, THE GROUND NO.3 OF THE REVENUE S APPEAL IS ALSO REJECTED. 23. GROUND NO.4 OF THE REVENUES APPEAL READS AS UN DER: ON THE FACTS AND CIRCUMSTANCES OF THE CASE WHETHER THE CIT(A) WAS RIGHT IN LAW IN DELETING THE ADDITION OF RS.15 LACS UNDISCLOSED INVESTMENT IN PURCHASE OF LAND FRO M SMT. SARLA DEVI & SHRI TEK CHAND. 24. THE BRIEF FACTS OF THE CASE ARE THAT IT IS NOTE D BY THE A.O. IN PARA 5.1 OF THE ASSESSMENT ORDER THAT AS PER THE AGREEMENT DATED 01.01.1998 BETWEEN SMT. SARLA DEVI OF VILLAGE PALI AND THE ASSESSEE, THE ASSESSEE HAS PAI D RS.5 LACS FOR 4 CANALS 3 MARLAS OF LAND AT VILLAGE PALI ON 01.01.1998. THIS ADDITION WAS SEPARATELY MADE BY T HE . I.T.(SS).A. NO.223 & 297/DEL/05 20/49 A.O., WHICH IS THE SUBJECT MATTER OF GROUND NO.1 OF THE REVENUES APPEAL. IN THE SAME PARA THE A.O. FURTHE R SAYS THAT IT IS STATED BY SHIR TEK CHAND AND BUDH RAM BR OTHER- IN-LAW OF MRS. SARLA DEVI, IN THEIR STATEMENT THAT THEY HAVE SOLD 10 ACRES OF LAND ON 13.07.1999 FOR RS.10 LACS TO SHRI BAHADUR SINGH SABHARWAL ON 26.08.1998. IT IS FURTH ER NOTED IN THE ASSESSMENT ORDER THAT THE SHARE OF SHR I BUDH RAM WAS GIVEN @ RS.4.20 LACS AT THE TIME OF REGISTR Y OF THE DEED. SHRI TEK CHAND WAS GIVEN RS.5 LACS IN MA NY INSTALLMENTS OVER A PERIOD OF ONE YEAR. THE A.O. M ADE ADDITION OFRS.10 LACS ON ACCOUNT OF THE LAND ALLEGE D TO HAVE BEEN PURCHASED OF BY THE ASSESSEE FROM SHRI BU DH RAM AND SHRI TE CHAND FOR RS.10 LACS. BEING AGGRIE VED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE TH E LD. CIT(A) WHO HAS DELETED THIS ADDITION BY MAKING VARI OUS OBSERVATIONS IN AS PER PARA 6.4 OF HIS ORDER AND NO W THE REVENUE IS IN APPEAL BEFORE US. 25. THE LD. D.R. FOR THE REVENUE SUPPORTED THE ASSE SSMENT ORDER WHEREAS LD. A.R. FOR THE ASSESSEE SUPPORTED T HE ORDER OF LD. CIT(A). 26. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUS ED THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. WE FIND THAT THE TOTAL ADDITION OF RS.15 . I.T.(SS).A. NO.223 & 297/DEL/05 21/49 LACS WAS MADE BY THE A.O. ON ACCOUNT OF ALLEGED PUR CHASE OF LAND BY THE ASSESSEE FROM SMT. SARLA DEVI AND TE K CHAND AND BUDH RAM. THE REVENUE HAS RAISED A SEPAR ATE GROUND I.E. GROUND NO.1 WITH REGARD TO ALLEGED PURC HASED OF LAND FOR RS.5 LACS FROM SMT. SARLA DEVI HENCE GR OUND NO.4 SHOULD HAVE BEEN FOR DELETION OF THE ADDITION OFRS.10 LACS ONLY WITH REGARD TO THE ALLEGED PURCHASE OF LA ND BY THE ASSESSEE FROM SHIR TEK CHAND AND SHRI BUDH RAM. THIS ADDITION WAS DELETED BY THE LT. CIT(A) AS PER PARA 6.4 OF HIS ORDER WHICH IS REPRODUCED BELOW: THE ISSUE HAS BEEN CAREFULLY EXAMINED AND I THIS REGARD REFERENCE IS MADE TO THE STATEMENT OF SH. TE K CHAND. IN THE STATEMENT RECORDED OF SH. TEK CHAND ON 28.08.1999. IT HAS BEEN STATED THAT HE HAS RECEIVE D A SUM OFRS.2,70,000/- ON VARIOUS DATES AFTER ENTERING INTO AN AGREEMENT OF A SALE OF LAND TO ONE SH. MULAK RAJ BHATIA AND ONE SH. MADAN LAL SAINI. IN THE STATEME NT HE WAS CATEGORICALLY DENIED KNOWINGLY SH. BAHADUR SINGH (PAGE 5 OF THE STATEMENT). THIS STATEMENT IS THE SOLE DOCUMENT ON WHICH THE A.O. HAS RELIED UPON AND FROM THE FACTS AS IS APPARENT FORM RECORD EVEN THIS STATEMENT WHICH HAS NO REFERENCE WITH THE ALLEGED UNDISCLOSED INVESTMENT MADE BY SH. BAHADUR SINGH SABHARWAL WAS NOT EVEN CONFRONTED. MOREOVER THE REFERENCE TO THE BANK ACCOUNTS OF SH. TEK CHAND IS TOTALLY IRRELEVANT AS IT NO WHERE INDICATES THAT TH E ALLEGED UNACCOUNTED FUNDS WHICH HAD BEEN APPLIED BY THE APPELLANT IN THE LAND HAD FOUND ITS PLACE IN TH ESE ACCOUNTS. IT IS ALSO TRUE THAT NO SUCH EVIDENCE HA D BEEN . I.T.(SS).A. NO.223 & 297/DEL/05 22/49 FOUND FROM THE APPELLANT DURING THE SEARCH AND SEIZ URE PROCEEDINGS CARRIED OUT IN HIS CASE. IN VIEW OF TH E ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, THE STAN D OF HT A.O. CANNOT BE ACCEPTED. THE TREATMENT OF RS.15,00,000/- AS UNDISCLOSED INVESTMENT IS ACCORDI NGLY DELETED. 27. FROM THE ABOVE PARA OF THE ORDER OF LD. CIT(A), WE FIND THAT AS PER THE STATEMENT OF SHRI TEK CHAND RECODED ON 28.08.1999, IT IS STATED BY HIM THAT HE HAS SOLD LA ND TO ONE SHIR MULAK RAJ BHATIA AND ONE SHIR MADAN LAL SAINI. IT IS FURTHER NOTED BY THE LD. CIT(A) THAT IN ANOTHER STA TEMENT HE WAS CATEGORICALLY ASKED AS TO WHETHER HE KNEW SH RI BAHADUR SINGH SABHARWAL AND HE CATEGORICALLY DENIED THE NAME OF SHRI BAHADUR SINGH. THE BASIS OF ADDITION I S STATEMENT OF SHRI TEK CHAND IN WHICH HE HAS NOT STA TED THE NAME OF THE ASSESSEE. RATHER HE HAS STATED NAME OF ONE SHRI MULAK RAJ AND ONE SHRI MADAN LAL SAINI AND EVE N AFTER ASKING THE SPECIFIC QUESTION AS TO WHETHER HE KNOWS SHRI BAHADUR SINGH SABHARWAL, HE HAS DENIED. IN TH E LIGHT OF THESE FACTS, WE FEEL THAT NO INTERFERENCE IS CAL LED FOR IN THE ORDER OF THE CIT(A) ON THIS ISSUE BECAUSE FOR M AKING THE ADDITION ALSO THERE IS NO REFERENCE BY THE A.O. TO ANY MATERIAL FOUND IN THE COURSE OF SEARCH FOR MAKING T HE . I.T.(SS).A. NO.223 & 297/DEL/05 23/49 ADDITION. WE, THEREFORE, DECIDE THIS ISSUE ALSO IN FAVOUR OF THE ASSESSEE. HENCE THE GROUND NO.4 IS ALSO REJECT ED. 28. GROUND NO.5 OF THE APPEAL READS AS UNDER: ON THE FACTS AND CIRCUMSTANCES OF THE CASE WHETHER THE CIT(A) WAS RIGHT IN LAW IN DELETING THE ADDITION OF RS.9.35 LACS IN PURCHASE OF LAND AT VILLAGE PALI IN THE NAM E OF SHRI MULAK RAJ BHATIA WHO WAS THE BENAMIDAR OF THE ASSESSEE. 29. THE BRIEF FACTS OF THE CASE ARE THAT AS PER PAR A 5.2 OF THE ASSESSMENT ORDER, THE A.O. HAS MADE AN ADDITION OF RS.9.35 LACS ON THE BASIS OF TWO REGISTERED DEEDS D ATED 11.03.1999 IN FAVOUR OF M L SAINI AND MULAK RAJ BHA TIA. IT IS ALLEGED THAT MULAK RAJ BHATIA IS BENAMI OF SH RI BAHADUR SINGH SAHBARWAL AND THE VALUE OF THE LAND PURCHASED COMES TO RS.9.35 LACS AS AGAINST RS.18.70 LACS BEING THE VALUE OF THE LAND PURCHASED BY SHRI M. L. SAINI. HE MADE AN ADDITION OF RS.9.35 LACS IN THE HANDS OF THE ASSESSEE ON THE ALLEGATION OF LAND PURCHASED IN BEN AMI NAME, WHICH HAS BEEN DELETED BY LD. CIT(A) AS PER P ARA 7.3 OF HIS ORDER AND NOW THE REVENUE IS IN APPEAL B EFORE US. 30. THE LD. D.R. FOR THE REVENUE SUPPORTED THE ASSE SSMENT ORDER AND THE LD. A.R. FOR THE ASSESSEE SUPPORTED T HE ORDER OF LD. CIT(A). . I.T.(SS).A. NO.223 & 297/DEL/05 24/49 31. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE F IND THAT THIS ISSUE HAS BEEN DECIDED BY THE LD. CIT(A) AS PE R PARA 7.3 OF HIS ORDER WHICH IS REPRODUCED BELOW: IN THE ASSESSMENT ORDER THE A.O. UPON TWO REGISTER ED DEEDS WHICH WERE MADE AVAILABLE TO THE APPELLANT ON 28.01.2005. IT IS, THEREFORE, IMPORTANT NOW TO COM E TO THE TWO REGISTRIES, WHICH HAVE BEEN MADE AVAILABLE FOR PERUSAL OF THE UNDERSIGNED. NOW THESE REGISTRIES S HOW THAT THE TRANSACTION TOOK PLACE BETWEEN ONE SH. TEK CHAND ON ONE SIDE AND SH. MADAN LAL SAINI AND SH. MULAK RAJ BHATIA ON THE OTHER SIDE. THERE IS NO MENTION IN THESE DEEDS OF ANY TRANSACTION HAVING TA KEN PLACE WITH THE APPELLANT SH. BAHADUR SINGH SABHARWA L. IT IS DIFFICULT TO UNDERSTAND HOW THE A.O. CAME TO THE CONCLUSION THAT SH. BAHADUR SINGH SABHARWAL WAS THE BENAMIDAR OF SH. MULAK RAJ BHATIA. ON PERUSAL THER E IS NO EVIDENCE ON RECORD OF ANY SORT WHICH CAN EVEN REMOTELY INDICATE THAT SH. BAHADUR SINGH SABHARWAL HAD ANYTHING TO DO WITH SH. MULAK RAJ BHATIA AND TH AT THE FUNDS INVESTED IF AT ALL BY SH. MULAK RAJ BHATI A TO THE TUNE OF RS.9,35,000/- WAS ACTUALLY THE FUNDS OF SH. BAHADUR SINGH SABARWAL AND WHO HAD UTILIZED THE NAM E OF SH. MULAK RAJ BHATIA TO MAKE THIS BENAMI INVESTMENT. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE THE TREATMENT OF A SUM OF RS.9,35,000/- AS UNDISCLOSED INVESTMENT OF THE APPELLANT CANNOT BE SUSTAINED AND IS ACCORDINGLY DELETED. 32. FROM THE ABOVE PARA OF THE ORDER OF LD. CIT(A), WE FIND THAT IT IS NOTED BY THE CIT(A) THAT THESE 2 REGISTE RED DEEDS WERE EXAMINED BY HIM AND AS PER THESE DEEDS, TRANSA CTION . I.T.(SS).A. NO.223 & 297/DEL/05 25/49 TOOK PLACE BETWEEN ONE SHRI TEK CHAND ON ONE SIDE A ND SHRI M L SAINI AND M. R. BHATIA ON THE OTHER SIDE A ND THERE IS NO MENTION IN THESE DEEDS OF ANY TRANSACTI ON HAVING BEEN TAKEN PLACE WITH THE ASSESSEE, SHRI BAH ADUR SINGH SABHARWAL. IT IS FURTHER OBSERVED BY THE LD. CIT(A) THAT THERE IS NO BASIS FOR THE A.O. TO CONCLUDE THA T THE ASSESSEE WAS BENAMIDAR OF SHRI M R BHATIA. IN THE ASSESSMENT ORDER, WE DO NOT FIND ANY BASIS OF THIS ALLEGATION BY THE A.O. THAT SHRI M R BHATIA IS BEN AMIDAR OF THE ASSESSEE. CONSIDERING THESE FACTS, WE FIND NO REASON TO INTERFERE IN THE ORDER OF LD. CIT(A) ON THIS ISS UE ALSO. THE GROUND NO.5 OF THE REVENUES APPEAL IS ALSO REJ ECTED. 33. THE GROUND NO.6 OF THE REVENUE APPEAL READS AS UNDER: ON THE FACTS AND CIRCUMSTANCES OF THE CASE WHETHER THE CIT(A) WAS RIGHT IN LAW IN DELETING THE ADDITION OF RS.6,61,267/- MADE ON ACCOUNT OF INCOME FROM MONEY LENDING. 34. THE BRIEF FACTS OF THE CASE ARE THAT IT IS NOTE D BY THE A.O. ON PAGE 6 & 7 OF THE ASSESSMENT ORDER THAT AS PER DOCUMENT A-9, POCKET DIARY SEIZED FORM THE RESIDENC E OF SHRI BAHADUR SINGH SABHARWAL DURING SEARCH, VARIOUS TRANSACTIONS OF MONEY LENDING OF SHRI BAHADUR SINGH ARE AVAILABLE. THE A.O. FURTHER STATED THAT THIS PROVE S THAT SURPLUS MONEY LEFT WITH THE ASSESSEE IS LENT ON INT EREST BY . I.T.(SS).A. NO.223 & 297/DEL/05 26/49 HIM @ 2%. IT IS FURTHER NOTED BY THE A.O. THAT AS PER DOCUMENT A-9, THE TOTAL INTEREST HAS BEEN WORKED OU T AS PER ANNEXURE 3 AND TOTAL INTREST AS PER THESE TRANS ACSITONS BY THE ASSESSEE COMES TO RS.6,61,261/- AND HE MADE THE ADDITION OF THE SAME AMOUNT. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD . CIT(A) WHO ALSO DELETED THE ADDITION BY MAKING VARI OUS OBSERVATIONS IN PARA 8.3 OF HIS ORDER. NOW, THE R EVENUE IS IN APPEAL BEFORE US. 35. THE LD. D.R. FOR THE REVENUE SUPPORTED THE ASSE SSMENT ORDER WHEREAS THE LD. A.R. FOR THE ASSESSEE SUPPORT ED THE ORDER OF LD. CIT(A). 36. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE R EPRODUCE PARA 8.3 OF THE ORDER OF LD. CIT(A) AS UNDER: POCKET DIARY A-9 HAS BEEN PERUSED AND THIS DIARY R EFER TO NAMES OF VARIOUS PERSONS AGAINST WHOM CERTAIN AMOUNTS HAVE BEEN WRITTEN. WHAT THE A.O. HAS DONE IN THE ANNEXURE INCORPORATING THESE ENTRIES IS THAT HE HAS ADDED TWO ZEROS TO ALL THE TRANSACTIONS AND THERE A FTER COMPUTED THE UNDISCLOSED INVESTMENT AND OUT OF THIS UNDISCLOSED INVESTMENT COMPUTED THE TOTAL UNDISCLOS ED INTEREST EARNED AT THE RATE OF 2% AND HELD THAT THE ASSESSEE HAD EARNED AN UNDISCLOSED INTEREST INCOME OF RS.6,61,261/-. HOW AND WHY THE A.O. HAD ADDED TWO MORE ZEROS TO ALL THE FIGURES IS IMPOSSIBLE TO UNDERSTAND. THERE ARE ONLY TWO POSSIBILITIES-EITHE R THERE IS SOME OTHER CORROBORATIVE EVIDENCE, NO EVID ENCE . I.T.(SS).A. NO.223 & 297/DEL/05 27/49 IS MENTIONED IN THE ORDER OR INDICATED BY THE A.O., WHICH CLEARLY SHOWS THAT THE AMOUNTS MENTIONED IN T HIS DIARY WERE ACTUALLY NOT WHAT HAS BEEN MENTIONED AND THE ACTUAL AMOUNTS ARE DIFFERENT THAN WHAT AHS BEEN MENTIONED IN THE DIARY. THE OTHER POSSIBILITY COUL D BE THAT THIS DOCUMENT HAS BEEN CONFRONTED TO THE APPEL LANT AND THE APPELLANT IN HIS STATEMENT HAS INDICTED OR ADMITTED THAT THE ENTRIES IN THESE DOCUMENTS ARE NO T THE ACTUAL ENTRIES AND THAT TWO MORE ZEROS ARE TO BE AD DED TO THESE ENTRIES. UNFORTUNATELY, BOTH THE POSSIBIL ITIES DO NOT EXIST IN THIS CASE. IN FACT, WHATEVER RECORDS HAVE BEEN MADE AVAILABLE DO NOT CONTAIN ANY SUCH STATEME NT, WHICH SHOWS THAT THIS DIARY HAS BEEN CONFRONTED AT ALL TO THE APPELLANT OR THAT THE APPELLANT IN ANY OTHER OR AL EVIDENCE HAS INDICATED TO THE ALLEGED MANIPULATION. MOREOVER, THERE IS NO OTHER DOCUMENTARY EVIDENCE WHICH HAS BEEN BROUGHT TO MY ATTENTION WHICH CAN CORROBORATE THE CONCLUSION DRAWN BY THE A.O. UNDER THE CIRCUMSTANCES THE STAND OF THE A.O. CANNOT BE SUSTAINED AND THE ADDITION IS ACCORDINGLY DELETED. 37. IN THE ABOVE PARA OF THE ORDER OF LD. CIT(A), W E FIND THAT SPECIFIC FINDING HAS BEEN GIVEN BY THE CIT(A) THAT IN THE FIGURES NOTED IN THE SEIZED DOCUMENTS THE A.O. HAD ADDED TWO ZEROS TO THE AMOUNTS OF ALL THE TRANSACTION AND THEREAFTER COMPUTED THE AMOUNT OF UNDISCLOSED INVESTMENT, AND ON SUCH UNDISCLOSED INVESTMENT HE COMPUTED INTEREST @ 2% WHICH AS PER HIM COMES TO RS.6,61,261/-. IT IS OBSERVED BY THE LD. CIT(A) TH AT HOW AND WHY THE A.O. HAS ADDED TWO ZEROS TO ALL THE FIG URES IS . I.T.(SS).A. NO.223 & 297/DEL/05 28/49 IMPOSSIBLE TO UNDERSTAND. IT IS FURTHER OBSERVED B Y THE LD. CIT(A) THAT THE A.O. HAS NOT REFERRED TO ANY OTHER CORROBORATIVE EVIDENCE FOR ADDING THESE TWO ZEROS TO ALL THE AMOUNTS. WE ALSO FIND THAT NO BASIS IS INDICAT ED BY THE A.O. IN THE ASSESSMENT ORDER FOR ADDING TWO ZEROS T O THE VARIOUS FIGURES NOTED IN THE SEIZED DOCUMENTS. CONSIDERING THESE FACTS AND CIRCUMSTANCES, WE FIND NO REASON TO INTERFERE IN THE ORDER OF LD. CIT(A) ON T HIS ISSUE ALSO. THE GROUND NO.6 OF THE REVENUES APPEAL IS AL SO REJECTED. 38. THE GROUND NO.7 OF THE REVENUES APPEAL READS A S UNDER: ON THE FACTS AND CIRCUMSTANCES OF THE CASE WHETHER THE CIT(A) WAS RIGHT IN LAW IN DELETING THE ADDITION OF RS.5 LACS IN PLOT NO.64, NEELAM BATA ROAD, FARIDABAD. 39. THE BRIEF FACTS OF THE CASE ARE THAT IT IS NOTE D BY THE A.O. AT PAGE 7 OF THE ASSESSMENT ORDER THAT THE ASSESSEE IS ALSO DOING REAL ESTATE BUSINESS IN THE NAME OF SABHARWAL ESTATE AGENCY, NEELAM BATA ROAD, FARIDABAD. THE A.O. FURT HER SAYS THAT THIS ESTATE AGENCY IS HAVING PLOT 64, NEE LAM BATA ROAD, WHERE SURVEY U/S 133A WAS CONDUCTED. IT IS F URTHER OBSERVED BY THE A.O. THAT AS PER THE ASSESSEE, THIS PLOT BELONGS TO HIS MATERNAL GRAND MOTHER AND ITS MARKET VALUE IS RS.5 LACS. AFTER MAKING THESE OBSERVATIONS, THE A.O. . I.T.(SS).A. NO.223 & 297/DEL/05 29/49 CAME TO THE CONCLUSION THAT THIS ALSO REPRESENTS UNDISCLOSED INCOME OF THE ASSESSEE IN THE BENAMI NA ME OF HIS MATERNAL GRAND MOTHER. ON THIS BASIS, HE MADE ADDITION OF RS.5 LACS. THE ASSESSEE CARRIED THE MA TTER IN APPEAL BEFORE CIT(A) WHO HAS DELETED THE ADDITION A S PER PARA 9.3 OF HIS ORDER AND NOW THE REVENUE IS IN APP EAL BEFORE US. 40. THE LD. D.R. FOR THE REVENUE SUPPORTED THE ASSE SSMENT ORDER WHEREAS THE LD. A.R. FOR THE ASSESSEE SUPPORT ED HT ORDER OF LD. CIT(A). 41. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE RELEVANT PARA OF THE ORDER OF LD. CIT(A) I.E. PARA 9.3 IS RE PRODUCED BELOW: THE A.O. HAS NOW SENT FOR PERUSAL THE SURVEY REPOR T AND WHAT THE SURVEY REPORT REVEALS IS THAT THERE IS A PROPERTY SITUATED AT 64, NEELAM BZAA CHOWK AND THAT IT ALLEGEDLY BELONGS TO THE MATERNAL GRAND MOTHER. FR OM THIS SURVEY REPORT HOW THE A.O. HAS COME TO THE CONCLUSION THAT THIS PROPERTY BELONGS TO THE ASSESS EE OR HOW THIS PROPERTY WHICH BELONGS TO THE ASSESSEE HAS A MARKET VALUE OF RS.5,00,000/- IS DIFFICULT RATHER IMPOSSIBLE THE COMPREHEND. IT MAY BE TRUE THAT THE ASSESSEE MAY BE IN THE REAL ESTATE BUSINESS BUT THE E IS NO EVIDENCE TO SUGGEST THAT THIS PROPERTY SITUATED AT 64, NEELAM BAA CHOWK BELONGS TO HIM OR IT IS HIS BENAMI INVESTMENT IN THE NAME OF HIS MATERNAL GRAND MOTHER OR THAT THE MARKET VALUE OF THIS PROPERTY IS RS.5,00,0 00/-. THE STAND OF THE A.O. CANNOT BE UPHELD AND THE . I.T.(SS).A. NO.223 & 297/DEL/05 30/49 TREATMENT OF RS.5,00,000/- AS UNDISCLOSED INCOME IS DELETED. 42. FROM THE ABOVE PARA OF THE ORDER OF LD. CIT(A), WE FIND THAT A CLEAR FINDING HAS BEEN GIVEN BY THE LD. CIT( A) THAT THERE IS NO EVIDENCE TO SUGGEST THAT HIS PROPERTY H AS SITUATED AT 64, NEELAM BATA ROAD BELONGS TO THE ASS ESSEE AND IT IS HIS BENAMI INVESTMENT IN THE NAME OF HIS MATERNAL GRANDMOTHER. 43. WE HAVE ALSO GONE THROUGH THE ASSESSMENT ORDER AND WE DO NOT FIND ANY BASIS OF THIS ALLEGATION THAT THIS PROPERTY IS BELONGING TO THE ASSESSEE AND IS A BENAMI INVESTMEN T IN THE NAME OF HIS MATERNAL GRANDMOTHER. SINCE, NO AD VERSE MATERIAL IS FOUND IN THE COURSE OF SEARCH REGARDING THIS ALLEGED BENAMI INVESTMENT IN THE NAME OF MATERNAL GRANDMOTHER OF THE ASSESSEE WE DO NOT FIND ANY REAS ON TO INTERFERE IN THE ORDER OF LD. CIT(A) ON THIS ISSUE. HENCE, THE GROUND NO.7 OF THE REVENUES APPEAL IS ALSO REJ ECTED. 44. THE GROUND NO.8 OF THE REVENUES APPEAL IS AS U NDER: ON THE FACTS AND CIRCUMSTANCES OF THE CASE WHETHER THE CIT(A) WAS RIGHT IN LAW IN DELETING THE ADDITION OF RS.18,973/-, RS.3,181/-, RS.2,56,666/-, RS.,1,41,75 0/- & RS.,4,600/- AS UNDISCLOSED INCOME FROM REAL ESTATE BUSINESS. . I.T.(SS).A. NO.223 & 297/DEL/05 31/49 45. ON PAGE 7 OF THE ASSESSMENT ORDER, THE A.O. HAS MADE FOLLOWING OBSERVATIONS AND THEREAFTER, MADE ADDITIO N OF RS.18,973/-, RS.3,181/-, RS.2,56,666/-, RS.1,41,750 /- AND RS.4,600/-. RELEVANT PORTION OF ASSESSMENT ORDER A T PAGE 7 IS REPRODUCED HERE AS UNDER: SARURPUR LAND 2286 SQ. YARD @ 415 PER SQ. YARD 9, 48,690/- COMMISSION @ 2% (50%) SHARE OF BAHADUR SINGH 18 ,973/- 1605 SQ. YEARDS PLOT FOR RS.318114/0 (50%) 3,180/- PROPERTY PURCHASED FORM SH. RAGHBIR RATTAN, BALBIR, DUDEJA, MALIK ALONGWITH SAINI AND SOLD FOR 39,03,600/- DOCUEMTN A -2 PAGE 12 OF SAINI 27,33,600/- TOTAL PROFIT IN THIS DEAL WAS 11,70,000/- 4 LACS PA ID FOR VACATION AND NET PROFIT COME TO RS.7,70,000/- 1/3 RD OF SH. BAHADUR SINGH 2,56,666/- PAGE 6 OF DOCUMENT NO.A-2 OF M L SAINI, BAHADUR SIN GH ENTERED IN TO A DEAL WITH SH. SAINI ON 20.01.97 AND PURCHASED AND S OLD MANY PLOTS. SH. BAHADUR SINGH WAS TO RECEIVE RS.4,03,289/-. THIS A MOUNT INCLUDE A PROFIT OF RS.1,77,500/- + 1,06,000/- HALF SHARE OF BAHADUR SINGH IN THIS PROPERTY COMES TO RS.1,41,750/- 1,41,750/- PLOT AT PALI ROAD PAGE 7 DOCUEMTN A-2, COMMISSION A DMITTED BY SAINI 9200 SHARE OF BAHADUR SINGH SABHARWAL. 4,60 0/- 46. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATER IN APPEAL BEFORE LD. CIT(A). HE DELETED THIS ADDITION ALSO B Y MAKING OBSERVATION IN PARA 10.3 OF HIS ORDER AND NO W THE REVENUE IS IN APPEAL BEFORE US. 47. LD. D.R. OF THE REVENUE SUPPORTED THE ASSESSMEN T ORDER WHEREAS THE LD. A.R. FOR THE ASSESSEE SUPPORTED THE ORDER OF LD. CIT(A). 48. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE RELEVANT PARA OF THE ORDER OF LD. CIT(A) IS REPRODUCED HERE AS UNDER: . I.T.(SS).A. NO.223 & 297/DEL/05 32/49 THE ISSUE RAISED IN APPEAL HAVE BEEN CAREFULLY EXAMINED. IT HAS BEEN CORRECTLY BROUGHT ON RECORD BY THE LD. COUNSEL THAT THESE DOCUMENTS HAVE NOT BEEN RECOVERED FORM THE POSSESSION OF THE ASSESSEE. IT I S ALSO AN UNDISPUTED FACT THAT THE A.O. DID NOT EVEN CONSI DER IT FIT TO EXAMINE THE ASSESSEE IN THE CONTEXT OF THESE DOCUMENTS SO AS TO COME TO ANY CONCLUSION REGARDING THE RELATIONSHIP OF THE ASSESSEE WITH SH. M L SAINI , IF AT ALL, AND AS NOTED IN THE DOCUMENTS. FROM THE RECOR DS IT IS ALSO APPARENT THAT THE A.O. DID NOT EVEN CONSIDE R FIT TO EXAMINE THE ASSESSEE REGARDING THE STATEMENT OF A THIRD PARTY WHICH ALLEGEDLY BROUGHT THE ASSESSEE IN TO AN ALLEGED TRANSACTIONS. THESE PAPERS RECOVERED FORM SH. M L SAINI ARE REFLECTING REAL ESTATE TRANSACTIONS O F VARIOUS LANDS AND AT FEW PLACES REFERS TO THE SCRIB BLING AS BSS OR BS OR B S SABARWAL. HOW THE A.O. COULD COME TO A CONCLUSION THAT THE APPELLANT HAS DERIVED UNDISCLOSED SOURCES FROM THE VARIOUS TRANSACTIONS B ASED ON THE DOCUMENTS ALLEGEDLY FOUND IN THE CASE OF SH. M L SAINI IS DIFFICULT TO UNDERSTAND. LAW DOES NOT P ERMIT THE USE OF SUCH EVIDENCE TO FASTEN UNDISCLOSED INCO ME IN THE HANDS OF AN ASSESSEE WITHOUT SUCH EVIDENCE B EING CORROBORATED THROUGH OTHER EVIDENCE WHICH HAS BEEN FOUND FORM THE APPELLANT AND OR WHICH IS INDICATED BY ANY ORAL EVIDENCE OF THE APPELLANT. AS HAS BEEN INDICATED ABOVE, THE A.O. DID NOT AT ANY STAGE , EV EN FULFILL THE BASIC REQUIREMENT OF LAWS OF EVIDENCE A ND SUCH DEPENDENCE ON ISOLATED THIRD PARTY EVIDENCE IS NOT ACCEPTABLE IN THE EYES OF LAW. THE A.O. DOES NOT H AVE ANY RIGHT TO DETERMINE ANY INCOME UNDISCLOSED OR OTHERWISE, ON THE BASIS OF SUCH EVIDENCES. UNDER T HE CIRCUMSTANCES, THE TREATMENT OF RS.128,973/-, RS.3,181/-, RS.2,56,666/-, RS.1,41,756/- & RS.4,600 /- AS UNDISCLOSED INCOME IS DELETED. . I.T.(SS).A. NO.223 & 297/DEL/05 33/49 49. IN THE ABOVE PARA THE LD. CIT(A)S ORDER, A CLE AR FINDING IS GIVEN BY HIM THAT THESE PAPERS ON THE BASIS OF WHIC H THESE ADDITIONS ARE MADE BY THE A.O. WERE NOT FOUND OR RECOVERED FROM THE POSSESSION OF THE ASSESSEE BUT T HESE WERE FOUND IN THE POSSESSION OF SHRI M L SAINI. IT IS ALSO OBSERVED BY HIM THAT THE A.O. DID NOT EVEN CONSIDER IT FIT TO EXAMINE THE ASSESSEE REGARDING THE STATEMENT OF A 3 RD PARTY. WE HAVE ALSO REPRODUCED THE RELEVANT PORTIO N OF THE ASSESSMENT ORDER FROM PAGE 7 OF THE ASSESSMENT ORDE R AND THERE ALSO, WE FIND NO BASIS IS INDICATED BY THE A. O. FOR MAKING THESE ADDITIONS. IN THE ABSENCE OF ANY VALI D BASIS FOR MAKING THE ALLEGATION ABOUT THESE UNDISCLOSED I NCOME, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF LD. CIT(A) ON THIS ISSUE. THIS GROUND OF REVENUE IS AL SO REJECTED. 50. THE GROUND NO.9 OF REVENUES APPEAL READS AS UN DER: ON THE FACTS AND CIRCUMSTANCES OF THE CASE WHETHER THE CIT(A) WAS RIGHT IN LAW IN DELETING THE ADDITION OF RS.98,000/- ON ACCOUNT OF UNEXPLAINED PURCHASE OF HOUSEHOLD GOODS. 51. THE BRIEF FACTS OF THE CASE ARE THAT IT IS NOTE D BY THE A.O. AT PAGE 8 OF THE ASSESSMENT ORDER THAT IN THE COURS E OF SEARCH, VARIOUS HOUSE HOLD ITEMS LIKE TV, WASHING . I.T.(SS).A. NO.223 & 297/DEL/05 34/49 MACHINE, AIR CONDITIONER, MUSIC SYSTEM, MOPED ETC. WERE FOUND. THE A.O. HAD ESTIMATED THE VALUE OF THESE 8 ITEMS AT RS.1.10 LACS. IT IS FURTHER NOTED BY THE A.O. T HAT AS PER THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 1997-9 8, TV IS DISCLOSED IN THE BALANCE SHEET OF THE ASSESSEE. AFTER EXCLUDING THE VALUE OF THE TV OF RS.12,000/-, THE A .O. MADE ADDITION OF RS.98,000/- BEING THE BALANCE AMOU NT OF THE REMAINING 7 ITEMS. BEING AGGRIEVED, THE ASSESS EE CARRIED THE MATER IN APPEAL BEFORE CIT(A) WHO HAS DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE AS PER PARA 12.3 OF HIS ORDER AND NOW THE REVENUE IS IN APPEAL BEFORE US. 52. THE LD. D.R. FOR THE REVENUE SUPPORTED THE ASSE SSMENT ORDER WHEREAS THE LD. A.R. FOR THE ASSESSEE SUPPORT ED THE ORDER OF LD. CIT(A). 53. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE F IND THAT A CLEAR FINDING IS GIVEN BY THE LD. CIT(A) THAT THE A SSESSEE LIVES WITH HIS FOUR BROTHERS AND PARENTS UNDER THE SAME ROOF. IT IS FURTHER OBSERVED BY THE LD. CIT(A) THA T HOUSE HOLD GODS TO THE EXTENT OFRS.30,000/- HAVE BEEN DEC LARED BY THE SPOUSE OF THE ASSESSEE IN HER RETURN OF INCO ME WHICH HAVE BEEN FILED PRIOR TO THE DATE OF SEARCH. IT IS HELD BY HIM THAT THERE IS NOTHING TO SUGGEST THAT . I.T.(SS).A. NO.223 & 297/DEL/05 35/49 INVESTMENT IN SUCH SMALL HOUSEHOLD GOODS WERE OUT O F UNACCOUNTED FUNDS. OUT OF THE TOTAL ASSETS FOUND A T RS.1.10 LACS, THE A.O. HIMSELF FOUND EXPLANATION TO THE EXTENT OF RS.12,000/-. LD. CIT(A) HAS FOUND THAT T HE HOUSE HOLD GOODS OF RS.30,000/- WERE DECLARED BY TH E SPOUSE OF THE ASSESSEE. FOR THE BALANCE AMOUNT OF RS.68,000/-, IT CANNOT BE HELD THAT THE SAME WAS OU T OF UNDISCLOSED INCOME OF THE ASSESSEE PARTICULARLY WHE N THE ASSESSEE IS LIVING WITH FOUR BROTHERS AND PARENTS U NDER THE SAME ROOF. CONSIDERING ALL THESE FACTS, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF LD. CIT(A) ON T HIS ISSUE ALSO. THIS GROUND NO.9 OF THE REVENUES APPEAL IS ALSO REJECTED. 54. GROUND NO.10 OF THE REVENUES APPEAL READS AS U NDER: ON THE FACTS AND CIRCUMSTANCES OF THE CASE WHETHER THE CIT(A) WAS RIGHT IN LAW IN DELETING THE ADDITION OF RS.43,27,400/- AS INCOME FROM LUCKY CAR DRAW SCHEME . 55. THE BRIEF FACTS OF THE CASE ARE THAT IN THE ASS ESSMENT ORDER, THE A.O. HAS REFERRED TO LUCKY CAR DRAW SCHEME AND IN THIS REGARD HE HAS DEALT WITH THE ISSUE IN THE ASSESSMEN T ORDER AT PAGES 3 & 4. ON PAGE 4 OF THE ASSESSMENT ORDER, THE A.O. REFERRED TO A STATEMENT OF ONE SHRI GULSHAN BA GGA RECORDED ON 02.07.1999 WHEREIN HE HAS STATED THAT S HRI B . I.T.(SS).A. NO.223 & 297/DEL/05 36/49 S SABHARWAL AND SHRI HARJEET SINGH WERE DOING CHIT BUSINESS THROUGH M/S. SABHARWAL INTERNATIONAL. THEREAFTER, THE A.O. HAS GIVEN IN DETAIL HOW SHRI G ULSHAN BAGGA HAS DEALT WITH THE TRANSACTION, WHICH HE HAD THROUGH HIS PROPRIETARY CONCERN M/S. AMIT SALES AGE NCY VIS--VIS M/S. SABHARWAL INTERNATIONAL. A.O. HAS R EFERRED TO A STATEMENT OF ONE SHRI SATISH CHANDER WHO WAS S TATED TO BE A MEMBER OF THE LUCKY CAR DRAW SCHEME THROUGH M/S. SABHARWAL INTERNATIONAL. THEREAFTER, THE A.O. STAT ED THAT LUCKY CAR DRAW SCHEME WAS SIMILAR TO THE ONE RUN BY HIS BROTHER SHRI INDERJEDEET SINGH. THEREAFTER, THE A. O. SAYS THAT LUCKY CAR DRAW SCHEME WAS STARTED IN MARCH 199 7 AND WAS RUN WITH HIS BROTHER SHRI HARJEET SINGH THROUGH A FIRM M/S. SABHARWAL INTERNATIONAL. THEREAFTER, THE A.O. REFERRED TO TWO DIARIES SEIZED FROM THE RESIDENCE O F THE ASSESSEE AND HAS REFERRED TO TWO ANNEXURE OF THE ASSESSMENT ORDER I.E. ANNESUREA-2 AND A-1 TO SHOW T HAT THE ASSESSEE HAD SURPLUS MONEY OF RS.167.20 LACS ON WHICH INTEREST INCOME UNDISCLOSED CAME TO RS.43,27, 400/- WHICH WAS TREATED BY HIM AS UNDISCLOSED INCOME OF T HE ASSESSEE. BEING AGGRIEVED, THE ASSESSEE CARRIED TH E MATTER IN APPEAL BEFORE THE LD. CIT(A) WHO HAS DELETED THI S ADDITION ALSO AND NOW THE REVENUE IS IN APPEAL BEFO RE US. . I.T.(SS).A. NO.223 & 297/DEL/05 37/49 56. THE LD. D.R. FOR THE REVENUE SUPPORTED THE ASSE SSMENT ORDER AND THE LD. A.R. FOR THE ASSESSEE SUPPORTED T HE ORDER OF LD. CIT(A). 57. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE F IND THAT IN PARA 13.4 OF HIS ORDER, A CLEAR FINDING IS GIVEN BY THE LD. CIT(A) THAT THE A.O. HAS RELIED UPON TWO STATEMENTS OF SHRI S CHANDER AND SHRI GULSHAN BAGGA BUT IN BOTH T HESE STATEMENTS, NO REFERENCE HAS BEEN MADE TO THE ASSES SEE. IT IS FURTHER STATED BY THE LD. CIT(A) THAT THE A.O. H AS AGAIN REFERRED TO THE DOCUMENTS SEIZED FROM ONE SHRI M L SAINI AND IT IS ALSO STATED BY HIM THAT AS PER THE PERUSA L OF THESE DOCUMENTS, IT IS FOUND THAT THESE DOCUMENTS DO NOT REFER TO THE ALLEGED LOTTERY BEING CARRIED OUT ALLEGEDLY BY THE ASSESSEE EXCEPT AT ONE PLACE WHERE IT IS WRITTEN ( B S SABHARWAL LOTTERY MARCH 10 TH , 97 APR 97). REGARDING THIS NOTING ALSO IT WAS ARGUED BY THE LD. A.R. BEFO RE CIT(A) THAT THIS NOTING IN A DOCUMENT FOUND AT THE 3 RD PERSONS RESIDENCE CAN NEVER BE UTILIZED FOR DETERM INING THE UNDISCLOSED INCOME OF THE ASSESSEE IN AS MUCH A S THIS DOCUMENT WAS NEVER CONFRONTED AND THE ASSESSEE HAS NEITHER ADMITTED TO ANY TRANSACTION AS RECORDED IN THIS DOCUMENT. IT IS ALSO OBSERVED BY THE LD. CIT(A) TH AT AS PER THE ASSESSEE, THERE IS NO DOCUMENT THAT HAVE BE EN . I.T.(SS).A. NO.223 & 297/DEL/05 38/49 MADE AVAILABLE WITH THE A.O. WHICH WAS FOUND IN THE COURSE OF SEARCH WHICH CAN CORROBORATE THE EVIDENCE FOUND FROM THE RESIDENCE OF THE 3 RD PERSON NAMELY SHRI M L SAINI. IT IS ALSO OBSERVED BY THE LD. CIT(A) THAT AS PER ASSESSEE, EVEN THE STATEMENT OF SHRI M L SAINI WAS NEVER CONFRONTED TO THE ASSESSEE. THE A.O. HAD RELIED UP ON THE DIARY ALLEGED TO BE SEIZED FORM THE RESIDENCE OF TH E ASSESSEE AND DRAWN A CONCLUSION THAT LOTTERY BUSINE SS WAS RUN AND TOTAL SURPLUS MONEY TO THE TUNE OF RS.167.2 0 LACS WAS INVESTED ON WHICH INTEREST INCOME OF RS.43.27 L ACS WAS EARNED. A CLEAR FINDING WAS GIVEN BY THE LD. C IT(A) THAT THESE TWO DIARIES A-4 & A-5 HAVE BEEN CAREFULL Y PERUSED AND THE ENTRIES THEREIN DO NOT INDICATE THA T SOME SORT OF LOTTERY BUSINESS WAS CARRIED OUT IN THE FOR M OF LUCKY CAR DRAW SCHEME. IT IS OBSERVED BY THE LD. C IT(A) THAT THESE DOCUMENTS INDICATE A FEW NAMES SCRIBBLED AGAINST WHICH PETTY AMOUNTS OF MONEY HAVE BEEN MENTIONED. THE LD. A.R. FOR THE ASSESSEE BEFORE LD . CIT(A) HAS ALSO CHALLENGED THE STAND OF THE A.O. TH AT THESE DOCUMENTS WERE RECOVERED FROM THE RESIDENCE O F SHRI INDER SINGH SABHARWAL AND SHRI BAHADUR SINGH SABHARWAL, THE ASSESSEE. IT WAS ARGUED BY THE ASSE SSEE BEFORE THE LD. CIT(A) THAT THESE DOCUMENTS WERE FOU ND . I.T.(SS).A. NO.223 & 297/DEL/05 39/49 FROM THE CHAIWALA SHRI YASHPAL, WHO WAS HAVING HIS SHOP OUTSIDE THE RESIDENCE OF THE ASSESSEE AND BOTH IN T HE STATEMENT AND THE AFFIDAVIT OF MR. YASHPAL THESE FA CTS HAVE BEEN CONFIRMED. IT WAS ALSO ARGUED BY THE LD. A.R. BEFORE THE LD. CIT(A) THAT EVEN TWO PANCHAS WHO WERE WITNE SS TO THE SEARCH CATEGORICALLY DENIED THAT THESE DOCUM ENTS WERE FOUND FROM THE RESIDENCE OF SHRI INDERJEET SIN GH AND BROTHER OF THE ASSESSEE. ON THE BASIS OF THESE OBSERVATIONS BY THE LD. CIT(A) THAT THESE FACTS CLE ARLY POINT OUT THAT THE A.O. HAS ERRED IN HOLDING THAT T HE ASSESSEE WAS RUNNING LUCKY CAR DRAW SCHEME HE HAS DELETED THIS ADDITION. THE FINAL FINDING OF THE LD . CIT(A) IS AVAILABLE AT PARA 13.3 13.8 WHICH IS REPRODUCE D BELOW: 13.3 I HAVE CAREFULLY EXAMINED THE ENTIRE ISSUE AND HAVE GONE THROUGH THE WRITTEN SUBMISSIONS, THE ASSESSMENT ORDER AND THE REPORT OF THE A.O. THE VARIOUS POINTS, WHICH NEED TO BE CONSIDERED ARE AS UNDER: 13.4 THE STATEMENT OF SH. SATISH CHANDER HAS BEEN CAREFULLY PERUSED. A PERUSAL OF THE STATEMENT SHOWS THAT NO WHERE DOES SH. SATISH CHANDER MENTIONS THE NAME OF THE APPELLANT. WHAT HE DOES MENTION IS THAT THE LOTTERY WAS BEING RUN BY M/S. SABARWAL INTERNATIONAL AND ONE SH. HARJEET SINGH USED TO RUN THIS LOTTERY. A PERUSAL OF THE STATEME NT OF SH. GULSHAN BAGGA, WHICH HAS AGAIN BEEN RELIED UPON BY THE A.O., REVEALS THAT THIS STATEMENT DOES NOT AT ALL REFER TO THE APPELLANT. IT . I.T.(SS).A. NO.223 & 297/DEL/05 40/49 HAS BEEN STATED BY SH. GULSHAN BAGA THAT ONE SH. HARJEET SINGH RAN A LOTTERY SCHEME AND HE THEREAFTER GAVE THE VARIOUS DETAILS OF THE METHOD BY WHICH THIS TRANSACTION WAS CARRIED OUT. BEFORE ANY CONCLUSION CAN BE DRAWN IT MUST BE CATEGORICALLY BROUGHT OUT ON RECORD THAT THE STATEMENT OF SH. SATISH CHANDER AND SH. GULSHAN BAGGA, RELIED UPON BY THE A.O., DOES NOT MAKE ANY REFERENCE TO THE APPELLANT- SH. BAHADUR SINGH SABARWAL. AT BEST THE STATEMENT MAKES A REFERENCE TO ONE SH. HARJEET SINGH. IT MAY ALSO BE AT THIS POINT CATEGORICALLY STATED THAT THE STATEME NT OF SH. GULSHAN BAGA AND SH. SATISH CHANDER HAVE BEEN USED AGAINST THE APPELLANT WITHOUT CONFRONTING THE SAME TO THE APPELLANT AND WITHOUT GIVING AN OPPORTUNITY TO THE APPELLANT TO EXPLAIN AND NOR WERE SH. GULSHAN BAGGA AND SH. SATISH CHANDER CROSS EXAMINED BY THE APPELLANT. IT HAS BEEN ARGUED BY THE LD. COUNSEL, AND CORRECTLY SO, THAT THE A.O. COULD NOT UNDER LAW RELY ON SUCH UNSUBSTANTIATED UNCORROBORATED STATEMENTS. THE A.O. HAS AGAIN REFERRED TO THE DOCUMENTS SEIZED FORM ONE SH. M L SAINI. ONCE AGAIN A PERUSAL OF THESE DOCUMENTS DO NOT REFER TO THE ALLEGED LOTTERY BUSINESS CARRIED OUT ALLEGEDLY BY THE APPELLANT EXCEPT AT ONE PLACE WHERE IT IS WRITTEN (B.S. SABARWAL LOTTERY MARCH 10 TH 97 TO APRIL 97). IN THIS REGARD THE LD. COUNSEL HAS ARGUED THAT THIS NOTING IN A DOCUMENT FOUND A THE THIRD PERSONS RESIDENCE CAN NEVER BE UTILIZED FOR DETERMINING THE UNDISCLOSED INCOME OF THE APPELLANT IN AS MUCH AS THIS DOCUMENT WAS NEVER CONFRONTED AND APPELLANT HAS NEVER EVER ADMITTED TO ANY TRANSACTIONS AS RECORDED IN THE DOCUMENT. IT HAS . I.T.(SS).A. NO.223 & 297/DEL/05 41/49 BEEN ARGUED THAT THERE IS NO DOCUMENT OR EVIDENCE AVAILABLE WITH THE A.O. WHICH WAS FOUND DURING THE SEARCH WHICH CAN CORROBORATE THE EVIDENCE FOUND FORM THE RESIDENCE OF A THIRD PERSON NAMELY SH. M L SAINI. THE LD. COUNSEL HAS FURTHER ARGUED THAT EVEN THE STATEMENT OF SH. M L SAINI WAS NEVER CONFRONTED TO THE APPELLANT AND SO THE A.O. COMMITTED AN ERROR IN USING THIS PIECE OF THIRD PARTS STATEMENT OF AGAINST THE APPELLANT TO DETERMINE THAT HE LOTTERY SCHEME WAS BEING RUN WHICH RESULTED IN HUGE UNDISCLOSED INCOME. THE A.O. HAS RELIED ON THE TWO DIARIES SEIZED FORM THE RESIDENCE OF SH. BAHADUR SINGH SABARWAL TO DRAW THE CONCLUSION THAT LOTTERY BUSINESS WAS RUN AND THAT TOTAL SURPLUS MONEY TO THE TUNE OF RS.1,67,20,000/- AND THAT THE UNDISCLOSED INTEREST INCOME ON THIS INCOME WOULD BE TO THE TUNE OF RS.43,27,400/-. THE DOCUMENT A-4 AND A-5 HAVE BEEN CAREFULLY PERUSED AND THE ENTRIES THEREIN DO NOT AT ALL INDICATE THAT SOME SORT OF LOTTERY BUSINESS WAS CARRIED OUT IN THE FORM OF LUCKY CAR DRAW SCHEME. THESE DOCUMENTS INDICATE A FEW NAMES SCRIBBLED AND AGAINST WHICH PETTY AMOUNTS OF MONEY HAVE BEEN UNMENTIONED. IT HAS BEEN ARGUED BY THE LD. COUNSEL IT IS IMPOSSIBLE TO ARRIVE AT A CONCLUSION BASED ON SUCH ENTRIES THAT THE APPELLANT WAS CARRYING ON LOTTERY BUSINESS AND THAT HUGE AMOUNTS OF UNDISCLOSED INCOME WAS BEING GENERATED. THE LD. COUNSEL IN HIS WRITTEN SUBMISSIONS HAS ALSO CHALLENGED THE STAND OF THE A.O. THAT THESE DOCUMENTS WERE RECOVERED FORM THE RESIDENCE OF SH. INDERJEET SINGH SABARWAL AND SH. BAHADUR SINGH SABARWAL, THE APPELLANT. IT HAS BEEN VEHEMENTLY ARGUED THAT SH. INDERJEET SINGH, . I.T.(SS).A. NO.223 & 297/DEL/05 42/49 THE BROTHER OF SH. BAHADUR SINGH SABARWAL HAS REFUSED TO SIGN THESE DOCUMENTS AND IN HIS STATEMENT ITSELF RECORDED ON THE DATE OF SEARCH AND HAD DENIED THAT THESE DOCUMENTS HAD BEEN FOUND FROM HIS RESIDENCE. THE LD. COUNSEL HAS ALSO VEHEMENTLY ARGUED THAT THESE DOCUMENTS WEE FOUND FROM THE CHAIWALA, SH. YASHPAL, WHO WAS HAVING HIS SHOP OUTSIDE THE RESIDENCE OF THE APPELLANT AND THAT BOTH IN THE STATEMENT AND THE AFFIDAVIT OF MR. YASHPAL THESE FACTS HAVE BEEN CONFIRMED. IT HAS ALSO VEHEMENTLY BEEN ARGUED BY THE LD. COUNSEL THAT EVEN THE TWO PANCHAS WHO WEE WITNESSED TO THE SEARCH CATEGORICALLY DENIED THAT THESE DOCUMENTS WERE FOUND FROM THE RESIDENCE OF SH. INDERJEET SING HAND HIS BROTHER, THE APPELLANT SH. BAHADUR SINGH SABARWAL. 13.5 THE ISSUES AS DISCLOSED ABOVE CLEARLY POINTS O UT TO THE FACT THAT THE A.O. HAS ERRED IN HOLDING THAT TH E APPELLANT WAS RUNNING THE LUCKY CAR DRAW SCHEME. NONE OF THE STATEMENTS RELIED UPON INDICATE THE NAME OF THE APPELLANT. NONE OF THE STATEMENTS RELIED UPON HAVE BEEN CONFRONTED. NOWHERE HAS THE APPELLANT INDICATED THAT HE WAS RUNNING A LUCKY CAR DRAW SCHEME. THE A.O. HAS NOT POINTED OUT TO ANY DOCUMENT OR EVIDENCE SEIZED FROM THE APPELLANT WHICH CAN CORROBORATE THE EVIDENCE RELIED UPON REGARDING THE DOCUMENTS FOUND FROM THE PREMISES OF ONE SH. M L SAINI. AND COMING TO THE DIARIES WHICH HAVE BEEN RELIED UPON IT CANNOT AT ALL BE UNDERSTOOD AND COMPREHENDED HOW THE A.O. HAS BEEN ABLE TO DECIPHER THESE DIARIES TO COME TO A CONCLUSION THAT UNDISCLOSED INTEREST INCOME HAD BEEN EARNED FROM THESE LUCKY CAR DRAW SCHEME. MOREOVER, ANY . I.T.(SS).A. NO.223 & 297/DEL/05 43/49 RELIANCE ON THIS EVIDENCE APPEARS TO BE GROSSLY UNJUSTIFIED SH. INDERJEET SINGH THE BROTHER OF TH E APPELLANT HAD IN HIS STATEMENT RECORDED DURING THE SEARCH ITSELF OBJECTED TO THESE DOCUMENTS. Q.NO.21: I AM SHOWING YOU A-4 AND A-5 A. : I WILL NOT SIGN ON THESE DIARIES AS THESE ARE NOT MINE DOCUMENTS. THIS STATEMENT WAS RECORDED DURING THE SEARCH AND SEIZURE PROCEEDINGS AND HAS SIGNIFICANT EVIDENTIARY VALUE AND THIS STATEMENT GETS FURTHER CEMENTED WITH THE AFFIDAVIT OF SH. HARISH RATRA AND SH. INDERPAL SINGH (PB83-84 CASE OF SH. INDERJEET SINGH SABARWAL). IN FACT THE STATEMENT OF SH. INDERJEET SINGH THE PANCH RECORDED ON 29.03.2001 FURTHER CONFIRMS THE STAND OF THE APPELLANT. THE EXTRACT O THE STATEMENT IS AS UNDER : SH. INDERJEET SINGH SABARWAL, I J /6 IN THE CAPACITY OF PANCH DURING THE SEARCH TWO DOCUMENTS NOW SEEN AS A-4 AND A-5 WERE NOT FOUND FROM THE PREMISES OF SH. INDERJIT SABHARWAL BUT THESE WERE BROUGHT FROM OUTSIDE AND THE SAME WAS OBJECTED BY SH. INDERJEET SINGH SABHARWAL AND HIS BROTHER SH. BAHADUR SINGH SABHARWAL AND THEY DID NOT SIGNED THE DIARY IN PROTEST. HOWEVER SAME WERE SIGNED BY ME ON ALL THE PAPERS INCLUDING THOSE DIARIES ON REQUEST OF SEARCH TEAM AND I W3ASNOT KNOWN THE IMPLICATION OF THE SAME. I KNOW TO SHRI INDERJIT SINGH SABHARWAL FORM LAST 15 YEARS. HE IS HAVING SHOP OF ELECTRONICS GOODS AND HE WAS CANCELLER OF OUR AREA AND IS A SOCIAL WORKER. HE USE TO COLLECT DONATION FROM DIFFERENT PERSONS FOR SOCIAL AND RELIGIOUS PURPOSES. AS PER MY KNOWLEDGE SH. INDERJIT SINGH SABHARWAL OR . I.T.(SS).A. NO.223 & 297/DEL/05 44/49 SH. BAHADUR SINGH SABHARWAL WAS NOT RUNNING ANY CHIT BUSINESS OR CAR DRAW LOTTERY SCHEME. 13.6 THE A.O. IN FACT ALSO EXAMINED SH. YASH PAL WHOSE STATEMENT IS ON PB167-168 (FILE OF SH. INDERJEET SINGH SABARWAL) WHEREIN HIS AFFIDAVIT WAS EXAMINED IN THE PRESENCE OF THE AUTHORIZED REPRESENTATIVE AND IN WHICH SH. YASHPAL STATED ON OATH THAT HE IS A OWNER OF A KABARI SHOP AND THAT THESE DIARIES DO NOT HAVE ANY RELATIONSHIP; TO SH. INDERJEET SINGH SABARWAL OR TO THE APPELLANT SH. BAHADUR SINGH SABARWAL. THE A.O. HAS ARGUED THAT THE DIARIES WERE FOUND FROM THE PREMISES AND THAT SH. INDERJEET SINGH AND HIS BROTHER SH. BAHADUR SINGH SABARWAL HAS CONCOCTED THE ENTIRE STORY AND THAT THE STATEMENT OF SH. N K MALHOTRA CLEARLY POINTED OUT TO THE CHIT AND LOTTERY BUSINES S AND THAT HIS RETRACTION IS NOT ACCEPTABLE IN LAW. 13.7 THESE ARGUMENTS OF THE A.O. LACK CREDENCE. WH AT IS IMPORTANT TO NOTE HERE IS THAT A) SH. INDERJEET SINGH, IN HIS STATEMENT RECORDED DURING THE SEARCH AND SEIZURE PROCEEDINGS ITSELF DENIED THAT THE DOCUMENTS PERTAINED TO HIM; B) THAT THE PANCHAS THEMSELVES WHO WERE WITNESSES TO THE SEARCH AND SEIZURE PROCEEDINGS SUBSTANTIATED THE STATEMENT OF SHJ. INDERJEET SINGH. C) THAT THE A.O. HIMSELF RECORDED THE STATEMENTS OF THE PANCHAS IN WHICH IT COULD NOT BE BROUGHT OUT BY THE A.O. THAT THE AFFIDAVITS SWORN BY THEM WAS FACTUALLY INCORRECT. 13.8 KEEPING IN VIEW THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE THE STAND OF THE A.O. CANNOT BE ACCEPTED AND THE TREATMENT OF . I.T.(SS).A. NO.223 & 297/DEL/05 45/49 RS.43,27,400/- AS THE UNDISCLOSED INTEREST INCOME IS DELETED. 58. FROM THE ABOVE PARAGRAPHS OF THE ORDER OF LD. C IT(A), WE FIND THAT THE FINDING OF LD. CIT(A) IS BASED ON THE SE FACTS THAT SHRI INDERJEET SINGH, BROTHER OF THE ASSESSEE HAS DENIED IN THE COURSE OF SEARCH PROCEEDINGS ITSELF T HAT THESE DOCUMENTS DO NOT PERTAIN TO HIM. IT IS ALSO NOTED BY THE LD. CIT(A) THAT THE PANCHAS THEMSELVES WHO WERE THE WITNESSES, SUBSTANTIATED THE STATEMENT OF SHRI INDE RJEET SINGH AND IT IS STATED BY THEM THAT THESE DOCUEMTNS WERE NOT FOUND FROM THE PREMISES OF SHRI INDERJEET SINGH SABHARWAL. IN ADDITION TO THIS, WE ALSO FIND THAT ADDITION WAS MADE BY THE A.O. ON THE BASIS OF THE STATEMENT OF MR. SATISH KUMAR AND MR. GULSHAN BAGGA BUT IN THESE STATEMENTS, THESE PERSONS HAVE NOT MENTIONED THE NA ME OF THE ASSESSEE. THE DOCUMENTS SEIZED FORM SHRI M L S AINI ALSO DO NOT REFER TO THE NAME OF THE ASSESSEE. FUR THER ALLEGATION OF THE A.O. THAT THERE WAS SURPLUS FUNDS WITH THE ASSESSEE ON WHICH ASSESSEE WAS EARNING INTEREST IS NOT SUPPORTED BY ANY ADVERSE MATERIAL FOUND IN THE COUR SE OF THE SEARCH AND IT IS A MERE GUESS WORK OF THE A.O. UNDER THESE FACTS AND CIRCUMSTANCES, WE DO NOT FIND ANY R EASON . I.T.(SS).A. NO.223 & 297/DEL/05 46/49 TO INTERFERE IN THE ORDER OF LD. CIT(A) ON THIS ISS UE ALSO. THIS GROUND OF THE REVENUE IS ALSO REJECTED. 59. THE GROUND NO.11 OF THE REVENUES APPEAL READS AS UNDER: ON THE FACTS AND CIRCUMSTANCES OF THE CASE WHETHER THE CIT(A) WAS RIGHT IN LAW IN DELETING THE ADDITION OF RS.20,41,050/- ON ACCOUNT OF UNDISCLOSED COMMISSION INCOME FORM CHITS BUSINESS. 60. THE BRIEF FACTS OF THE CASE ARE THAT BY ALLEGIN G THAT THE ASSESSEE IS CARRYING ON LUCKY CAR DRAW SCHEME, THE A.O. HAS MADE ADDITION ON ACCOUNT OF ALLEGED INTEREST IN COME ON SURPLUS FUNDS ALLEGED TO BE LYING WITH THE ASSES SEE WHICH WAS THE SUBJECT MATTER OF GROUND NO.10 ABOVE. IN ADDITION TO THIS, HE HAS MADE ADDITION OF RS.20,41, 050/- ON ACCOUNT OF ALLEGATION THAT THE ASSESSEE HAS EARNED 3% COMMISSION ON THE TOTAL AMOUNT OF INSTALLMENTS OF C HITS. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) WHO HAS DELETED THIS ADDITION ALSO ON THE BASIS OF HIS OBSERVATION IN PARA 14.3 OF HIS ORDER AND NOW THE REVENUE IS IN APPEAL BEFORE US. 61. THE LD. D.R. FOR THE REVENUE SUPPORTED THE ASSE SSMENT ORDER WHEREAS THE LD. A.R. FOR THE ASSESSEE SUPPORT ED THE ORDER OF THE LD. CIT(A). . I.T.(SS).A. NO.223 & 297/DEL/05 47/49 62. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE RELEVANT PARA OF THE ORDER OF LD. CIT(A) I.E. PARA 14.3 IS REPRODUCED BELOW: THE A.O. HAS REFERRED TO DOCUMENT A-10 PAGE 17 TO ARRIVE AT HIS CONCLUSION THAT THE APPELLANT HAD EAR NED AN UNDISCLOSED INCOME OF RS.20,41,050/-. THE RELEVANT PAPERS ARE ON PB252 AND 222. A CAREFUL PERUSAL OF THE DOCUMENTS DOES NOT AT ALL INDICATE WHAT HAS BEEN CONCLUDED BY THE A.O. PAGES 222 (PAGE 17 OF DOCUMENT A-10) REFERS TO SOME CALCULATION IN THE NA ME OF SHRI ASHOK TENT OR SH. HARJEET SINGH OR SH. LAL ID GARG ETC. AGAINST WHICH THE TOTAL AMOUNTS REFERRED TO ARE AS PETTY AS RS.400/-, RS.1,000/-, RS.3,000/-. SIMI LARLY PAGE 95 DOCUMENT A-10 (PAPER BOOK-252) REFERS TO SOME TRANSACTIONS AMOUNTING TO RS.24,76,980/- OR TO SH. HARISH RS.1,500/-. IT IS ABSOLUTELY INCOMPREHENSIBLE HOW THE A.O. HAS RELYING ON THESE DOCUMENTS COME TO A CONCLUSION ABOUT THE MONTHLY INSTALLMENTS, THE NUMBER OF PERSON INVOLVED AND THE NUMBER OF MONTHS TO DETERMINE AN UNDISCLOSED COMMISSION INCOME AT THE RATE OF 3% AMOUNTING TO RS.20,41,050/-. THE DOCUMENTS DO NOT IN ANY CONTEX T REFERRED TO THE ABOVE CALCULATION AND CONCLUSION OF THE A.O. TO CLARIFY FURTHER, THERE IS NO OTHER EVIDENC E WHICH HAS BEEN RELIED UPON NOR HAS ANY EVIDENCE EVE N BEEN CONFRONTED FOR THE A.O. TO ARRIVE AT ANY CONCL USION LEAST THE CONCLUSION ARRIVED AT BY THE A.O. UNDER THE CIRCUMSTANCES THE TREATMENT OF UNDISCLOSED INCOME AMOUNTING TO RS.20,41,050/- STANDS DELETED. 63. IN THE ABOVE PARA, THE LD. CIT(A), HAS GIVEN A CLEAR FINDING THAT REGARDING THE NOTING OF THE CALCULATIO N ON PAGE . I.T.(SS).A. NO.223 & 297/DEL/05 48/49 222 & 252 CONTAINING PAGE 17 OF THE DOCUMENT A-10 , THE NOTINGS ARE REGARDING PETTY AMOUNTS OF RS.400/-, RS..1,000/-, RS.3,000/-. IT IS ALSO NOTICED BY THE LD. CIT(A) THAT IT IS ABSOLUTELY INCOMPREHENSIBLE THAT HOW THE A.O. RELYING ON THESE DOCUMENTS COME TO THE CONCLUS ION ABOUT THE MONTHLY INSTALLMENTS AND NUMBER OF PERSON S INVOLVED AND NUMBER OF MONTHS TO DETERMINE UNDISCLO SED COMMISSION INCOME @ 3% AMOUNTING TO RS.20.41 LACS. THE LD. D.R. COULD NOT POINT OUT ANY SPECIFIC MISTA KE IN THE ORDER OF LD. CIT(A) ON THIS ISSUE AND CONSIDERI NG THE FACTS & CIRCUMSTANCES, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF LD. CIT(A) ON THIS ISSUE ALSO. THE GROUND NO.11 OF THE REVENUES APPEAL IS ALSO REJECT ED. 64. IN THE RESULT, APPEAL OF THE ASSESSEE STANDS AL LOWED FOR STATISTICAL PURPOSE WHEREAS THE APPEAL OF THE REVEN UE IS DISMISSED. 65. THIS DECISION WAS PRONOUNCED IN THE OPEN COURT ON 02.06 2010. SD./- SD./- (VIMAL GANDHI) (A.K. GARODIA) PRESIDENT ACCOUNTANT MEMBER DT. 02.06 .2010. SP. . I.T.(SS).A. NO.223 & 297/DEL/05 49/49 COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DELHI. TRUE COPY. BY ORDER (ITAT, NEW DELHI).