SHRI CHITRESH KUMAR MEHTA, Indore V. THE ACIT-2(1), Indore

ITSSA 228/IND/2015

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 2799 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 5 month(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 08-12-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 08-09-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 08-07-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: LALCHAND
• Assessee Lawyers: DEVENDRA BANSAL CAS
• Keywords: Unexplained investment; Gift; Search and seizure; Loose papers; Period of limitation; Source of fund; Valuation report; Validity of assessment; Competent authority; Block assessment; Retraction; Documents seized; Reassessment proceedings
• Section: 143(3); 153A; 147; 263; 132; 15; 139

Judgement Text

CHITRESH MEHTA SS 228 OF 2015 AND OTHERS 1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER IT(SS)A NOS.228 TO 232/IND/2015 A.YS. 2005-06 TO 2008-09 & 2010-11 ITA NO.517/IND/2015 A.Y. 2011-12 CHITRESH KUMAR MEHTA, INDORE PAN ACRPM 6745 P :: APPELLANT VS ACIT-2(1), BHOPAL :: RESPONDENT ASSESSEE BY SHRI ANIL KAMAL GARG AND SHRI DEVENDRA BANSAL, CAS RESPONDENT BY SHRI LAL CHAND, CI T DATE OF HEARING 08 . 12 .2016 DATE OF PRONOUNCEMENT 08 .1 2 .2016 O R D E R PER SHRI D.T. GARASIA, JM THE ABOVE APPEALS BY THE ASSESSEE ARE DIRECTED AGA INST THE DIFFERENT ORDERS OF THE LD. CIT(A)-I, INDORE, DATED 23.2.2015. GROUND NO. 1 (FOR ALL ASSESSMENT YEARS) 2. THIS GROUND OF APPEAL OF THE ASSESSEE IS DIRECTE D AGAINST THE ACTION OF THE LD. CIT(A) IN CONFIRMING THE AOS ACTION OF FRAMING THE ASSESSMENT ORDER UNDER S.153A R.W.S. 143(3) OF THE I T ACT, 19 61 BEYOND THE TIME LIMIT CHITRESH MEHTA SS 228 OF 2015 AND OTHERS 2 PRESCRIBED U/S. 153B(1)(A) OF THE ACT. IT WAS SUBMI TTED THAT ALTHOUGH IN THE ASSESSMENT ORDER, THE DATE OF PASSING THE ORDER HAS BEEN STATED AS 28-03-2013, BUT IN FACT IT WAS PASSED AFTER 31-03-2 013 I.E. AFTER THE EXPIRY OF THE LIMITATION. 3. MATTER CARRIED TO LD. CIT(A), WHO DISMISSED THE GROUND BY HOLDING THAT THE ASSESSEE COULD NOT PRODUCE ANY PROOF FOR E STABLISHING THAT THE ASSESSMENT ORDER WAS NOT FRAMED ON 31-03-2013. THE CIT(A) HELD THAT SENDING OF SOME ENVELOPE WITH BLANK PAPERS COULD BE A CLERICAL ERROR. THE CIT(A) FURTHER HELD THAT IT WAS NOT NECESSARY FOR T HE DEPARTMENT TO SERVE THE ASSESSMENT ORDER ON THE ASSESSEE WITHIN THE PRE SCRIBED PERIOD OF LIMITATION. 4. HOWEVER, BEFORE US, LEARNED COUNSEL FOR THE ASSE SSEE DID NOT PRESS THIS GROUND, THEREFORE, SAME IS DISMISSED BEING NOT PRESSED. GROUND NO. 2 (FOR A.Y. 2005-06, A.Y. 2006-07, A.Y. 2007-08 AND A.Y. 2008-09) 5. THIS GROUND OF APPEAL IS DIRECTED AGAINST THE AC TION OF LD. CIT(A) IN UPHOLDING THE VALIDITY OF ASSESSMENT PROCEEDINGS U/ S. 153A OF THE ACT IN THE ASSESSEES CASE WHEN NO INCRIMINATING MATERIAL PERTAINING TO THE CHITRESH MEHTA SS 228 OF 2015 AND OTHERS 3 RELEVANT ASSESSMENT YEARS WAS FOUND FROM THE POSSES SION AND CONTROL OF THE ASSESSEE. 6. MATTER CARRIED TO LD. CIT(A), WHO DISMISSED THE GROUND BY HOLDING THAT ASSESSMENT UNDER SECTION 153A OF THE INCOME-TA X ACT COMBINE BOTH SEARCH ASSESSMENT AND NORMAL ASSESSMENT INTO ONE AN D, THEREFORE, IT WAS NOT NECESSARY THAT VALUABLE ARTICLES OR INCRIMINATI NG MATERIAL FOR EACH OF THE SIX YEARS IS FOUND. ACCORDING TO THE CIT(A), EV EN IF NO SUCH THING IS FOUND, A NORMAL ASSESSMENT HAS TO BE MADE UNDER S. 153A OF THE ACT. FOR SUCH PROPOSITION, THE CIT(A) RELIED UPON THE DECIS ION OF HONBLE DELHI HIGH COURT IN THE CASE OF FILATEX INDIA LTD. (2014) 49 TAXMANN.COM 465 (DELHI) , SUNNY JACOB JEWLLERS & WEDDING CENTRE (2014) 362 IT R 664 (KER.) AND ANIL KUMAR BHATIA (2012) 24 TAXMAN.COM 98 (DELHI) . 7. HOWEVER, BEFORE US, LEARNED COUNSEL FOR THE ASSE SSEE DID NOT PRESS THIS GROUND STATING THAT IN VIEW OF THE VARIOUS JUD ICIAL PRONOUNCEMENTS, AN ASSESSING OFFICER IS VERY MUCH ENTITLED TO FRAME THE ASSESSMENT, UNDER S.153A, FOR ALL THE SIX ASSESSMENT YEARS PRECEDING THE ASSESSMENT YEAR IN WHICH THE SEARCH IS INITIATED IRRESPECTIVE OF THE F ACT THAT WHETHER OR NOT ANY INCRIMINATING MATERIAL OR UNDISCLOSED ASSET FOR ANY YEAR IS FOUND OR NOT. THUS, WE DISMISS THIS GROUND BEING NOT PRESSED . CHITRESH MEHTA SS 228 OF 2015 AND OTHERS 4 GROUND NO. 3 (FOR A.Y. 2005-06, A.Y. 2006-07, A.Y. 2007-08 AND A.Y. 2008-09) 8. THIS GROUND OF APPEAL IS DIRECTED AGAINST THE AC TION OF LD. CIT(A) IN UPHOLDING THE AOS ACTION OF MAKING ADDITION ON THO SE ISSUES IN RESPECT OF WHICH NO INCRIMINATING MATERIAL WAS FOUND OR SEIZED , DESPITE THE FACT THAT FOR THE RELEVANT ASSESSMENT YEAR, THE ASSESSEE HAD FILED ORIGINAL RETURN UNDER S. 139 OF THE ACT MUCH BEFORE THE DATE OF THE SEARCH. 9. SHORT FACTS OF THE ISSUE ARE THAT THE ASSESSEE H AD FURNISHED HIS ORIGINAL RETURN OF INCOME FOR A.Y. 2005-06, A.Y. 20 06-07, A.Y. 2007-08 AND A.Y. 2008-09 RESPECTIVELY ON 27-02-2006, 13-03-2007 , 13-12-2007 AND 13- 12-2009, UNDER S.139 OF THE INCOME-TAX ACT, 1961. I N RESPONSE TO SUCH RETURNS, NO NOTICE UNDER S.143(2) WAS ISSUED AND TH E TIME LIMIT FOR ISSUANCE OF THE NOTICES, FOR RESPECTIVE YEARS, HAD GOT EXPIRED MUCH PRIOR TO THE DATE OF SEARCH WHICH WAS INITIATED ON 25-11- 2010. THE AO MADE ADDITION FOR SUCH YEARS ON ACCOUNT OF LOW HOUSEHOLD WITHDRAWALS, DISALLOWANCE OF ROUTER EXPENSES, ADDITION UNDER S.6 8 IN RESPECT OF UNSECURED LOANS. BESIDES FOR A.Y. 2006-07 TO A.Y. 2 008-09, ADDITION WAS ALSO MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN C ONSTRUCTION OF HOUSE. EXCEPT FOR MAKING ADDITION ON ACCOUNT OF UNEX PLAINED INVESTMENT CHITRESH MEHTA SS 228 OF 2015 AND OTHERS 5 IN CONSTRUCTION OF HOUSE, NO OTHER ADDITION WAS MAD E ON THE BASIS OF ANY INCRIMINATING MATERIAL OR ANY OTHER EVIDENCE FOUND DURING THE COURSE OF SEARCH. 10. MATTER CARRIED TO LD. CIT(A), WHO DISMISSED THE GROUND BY HOLDING THAT ASSESSMENT UNDER SECTION 153A OF THE INCOME-TA X ACT COMBINE BOTH SEARCH ASSESSMENT AND NORMAL ASSESSMENT INTO ONE AN D, THEREFORE, IT WAS NOT NECESSARY THAT VALUABLE ARTICLES OR INCRIMINATI NG MATERIAL FOR EACH OF THE SIX YEARS IS FOUND. ACCORDING TO THE CIT(A), EV EN IF NO SUCH THING IS FOUND, A NORMAL ASSESSMENT HAS TO BE MADE UNDER S. 153A OF THE ACT. FOR SUCH PROPOSITION, THE CIT(A) RELIED UPON THE DECIS ION OF HONBLE DELHI HIGH COURT IN THE CASE OF FILATEX INDIA LTD. (2014) 49 TAXMANN.COM 465 (DELHI) , SUNNY JACOB JEWLLERS & WEDDING CENTRE (2014) 362 IT R 664 (KER.) AND ANIL KUMAR BHATIA (2012) 24 TAXMAN.COM 98 (DELHI) . 11. THE LD. AR FOR THE ASSESSEE HAS MADE ORAL AS WE LL AS WRITTEN SUBMISSION AS UNDER: I) IN THE INSTANT CASE, THE APPELLANT HAD FURNISHE D HIS ORIGINAL RETURN OF INCOME FOR A.Y. 2005-06 TO A.Y. 2008-09, UNDER S.13 9 OF THE INCOME- TAX ACT, 1961, AS PER THE DETAILS GIVEN IN THE SEPA RATE CHART WHICH IS BEING FURNISHED BEFORE THE HONBLE BENCH. IN RESPON SE TO SUCH RETURNS, NO NOTICE UNDER S.143(2) WAS ISSUED AND THE TIME LI MIT FOR ISSUANCE OF THE NOTICE HAD GOT EXPIRED UP TILL 30-09-2010 I.E. MUCH PRIOR TO THE DATE OF SEARCH ON 25-11-2010. CHITRESH MEHTA SS 228 OF 2015 AND OTHERS 6 II) THE IMPUGNED ASSESSMENT ORDER HAS BEEN PASSED B Y THE LEARNED ASSESSING OFFICER ONLY ON THE BASIS OF A SEARCH UND ER S.132 CARRIED OUT IN THE RESIDENTIAL PREMISES OF THE APPELLANT. THE L EARNED AO HAS MADE CERTAIN ADDITIONS IN THE RETURNED INCOME OF THE APP ELLANT, FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, WITHOUT HAVING ANY RECOURSE TO ANY INCRIMINATING MATERIAL OR DOCUMENT OR VALUABLE ARTICLE OR THING FOUND DURING THE COURSE OF THE SEARCH PROCEEDINGS. SUCH AN ACT OF THE LEARNED AO IS PATENTLY WRONG, UNJUSTIFIED, UNWARRAN TED AND BAD IN LAW IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND LEGAL POSITION AS DISCUSSED IN THE ENSUING PARAS. III) THE PROVISIONS OF SECTION 153A, 153B AND 153C ENJOINING SCHEME FOR ASSESSMENT IN CASE OF SEARCH OR REQUISITION HAVE BE EN BROUGHT TO THE STATUTE BY THE FINANCE ACT, 2003 W.E.F. 01-06-2003. ON A PLAIN READING OF THE PROVISIONS OF SECTION 153A IT BECOMES ABUNDA NTLY CLEAR THAT SUCH PROVISIONS ARE MEANT TO CARRY THE OPERATION OF SEARCH UNDER S. 132 OR THE OPERATION OF REQUISITION UNDER S. 132A T O ITS LOGICAL END BY WAY OF FRAMING AN ASSESSMENT OR REASSESSMENT OF SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR REL EVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITION IS MADE. IN THIS CONTEXT, BEFORE PROCEEDING FURTHER, IT SHAL L BE USEFUL TO REPRODUCE THE PROVISIONS OF SECTION 153A AS UNDER: 153A. [(1)] NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECTION 153D, IN THE CASE OF A PERSON WHERE A SEARCH IS INITIATED UN DER SECTION 132 OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ANY ASSETS ARE REQUISITIONED UNDER SECTION 132A AFTER THE 31 ST DAY OF MAY, 2003, THE ASSESSING OFFICER SHALL (A) ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO FU RNISH WITHIN SUCH PERIOD, AS MAY BE SPECIFIED IN THE NOTI CE, THE RETURN OF INCOME IN RESPECT OF ASSESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS REFERRED TO IN CLAUSE (B), IN THE PRESCRIBED FORM AND VERIFIED IN THE PRE SCRIBED MANNER AND SETTING FORTH SUCH OTHER PARTICULARS AS MAY BE PRESCRIBED AND THE PROVISIONS OF THIS ACT SHALL, SO FAR AS MAY BE, APPLY ACCORDINGLY AS IF SUCH RETURN WERE A RETURN REQUIRED TO BE FURNISHED UNDER SECTION 139; (B) ASSESS OR REASSESS THE TOTAL INCOME OF SIX ASSE SSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITION IS MADE: PROVIDED THAT THE ASSESSING OFFICER SHALL ASSESS OR REASSESS THE TOTAL INCOME IN RESPECT EACH ASSESSMENT YEAR FALLIN G WITHIN SUCH SIX ASSESSMENT YEARS; CHITRESH MEHTA SS 228 OF 2015 AND OTHERS 7 PROVIDED FURTHER THAT ASSESSMENT OR REASSESSMENT, IF ANY, RELATING TO ANY ASSESSMENT YEAR FALLING WITHIN THE PERIOD OF SIX ASSESSMENT YEARS REFERRED TO IN THE [SUB-SECTION] P ENDING ON THE DATE OF INITIATION OF THE SEARCH UNDER SECTION 132 OR MAKING OF REQUISITION UNDER SECTION 132A, AS THE CASE MAY BE, SHALL ABATE; PROVIDED ALSO THAT THE CENTRAL GOVERNMENT OF MAY BY RULES MADE BY IT AND PUBLISHED IN THE OFFICIAL GAZETTE (E XCEPT IN CASES WHERE ANY ASSESSMENT OR REASSESSMENT HAS ABAT ED UNDER THE SECOND PROVISO), SPECIFY THE CLASS OR CLA SSES OF CASES IN WHICH THE ASSESSING OFFICER SHALL NOT BE REQUIRE D TO ISSUE NOTICE FOR ASSESSING OR REASSESSING THE TOTAL INCOM E FOR SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSME NT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SEARCH IS CO NDUCTED OR REQUISITION IS MADE. [(2) IF ANY PROCEEDING INITIATED OR ANY ORDER OF AS SESSMENT OR REASSESSMENT MADE UNDER SUB-SECTION (1) HAS BEEN AN NULLED IN APPEAL OR ANY OTHER LEGAL PROCEEDING, THEN, NOTWITH STANDING ANYTHING CONTAINED IN SUB-SECTION (1) OR SECTION 15 3, THE ASSESSMENT OR REASSESSMENT RELATING TO ANY ASSESSME NT YEAR WHICH HAS ABATED UNDER THE SECOND PROVISO TO SUB-SE CTION (1), SHALL STAND REVIVED WITH EFFECT FROM THE DATE OF RE CEIPT OF THE ORDER OF SUCH ANNULMENT BY THE COMMISSIONER. PROVIDED THAT SUCH REVIVAL SHALL CEASE TO HAVE EFFE CT, IF SUCH ORDER OF ANNULMENT IS SET ASIDE.] EXPLANATION FOR THE REMOVAL OF DOUBTS, IT IS HERE BY DECLARED THAT - (I) SAVE AS OTHERWISE PROVIDED IN THIS SECTION, SECTION 153B AND SECTION 153C, ALL OTHER PROVISIONS OF THIS ACT SHALL APPLY TO THE ASSESSMENT MADE UNDER THIS SECTION; (II) IN AN ASSESSMENT OR REASSESSMENT MADE IN RESPECT OF AN ASSESSMENT YEAR UNDER THIS SECTION, THE TAX SHALL BE CHARGEABLE AT THE RATE OR RATES AS APPLICABLE TO SUCH ASSESSMENT YEAR.' IV) ON A PLAIN READING OF THE PROVISIONS OF SECTION 153A, ONE MAY NOTE THAT THESE PROVISIONS CAN BE SET INTO MOTION ONLY I N THE CASE OF A PERSON WHERE A SEARCH IS INITIATED UNDER S. 132 OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ANY ASSETS ARE REQUISITIONED UND ER S. 132A. EVEN, THE CAPTION OF THE PROVISION IS READ AS ASSESSMENT IN CASE OF SEARCH OR REQUISITION. THUS, THERE REMAINS NO DOUBT TO THE P ROPOSITION THAT THE SECTION 153A CANNOT BE INVOKED IN EACH AND ANY CASE BUT IT CAN BE INVOKED ONLY FOR THE PURPOSE OF MAKING AN ASSESSMEN T OR REASSESSMENT IN THE CASE OF A PERSON IN WHOSE CASE EITHER A SEARCH UNDER S. 132 IS INITIATED OR A REQUISITION UNDER S. 132A IS MADE. THE CHITRESH MEHTA SS 228 OF 2015 AND OTHERS 8 SOLE PURPOSE OF THE SECTION 153A IS TO BRING HOME THE TAX ON THE UNDISCLOSED INCOME, UNEARTHED DURING THE COURSE OF ACTION UNDER S. 132/ 132A, TO THE KITTY OF THE EX-CHEQUER. IT IS SU BMITTED THAT THE SECTION 153A IS NOT MEANT FOR ASSESSING/ REASSESSIN G ANY INCOME WHICH IN THE OPINION OF REVENUE AUTHORITIES HAS ESC APED TO THE ASSESSMENT AND FOR THAT THERE ARE OTHER PROVISIONS SUCH AS SECTION 147 AND SECTION 263 IN THE STATUTE. ALTHOUGH, NOT EXPLI CITLY STATED, THE PROVISIONS OF SECTION 153A ARE AIMED FOR MAKING THE ASSESSMENT/ REASSESSMENT, FOR SIX ASSESSMENT YEARS, OF THE PERS ONS SEARCHED/ REQUISITIONED, ONLY, ON THE BASIS OF MONEY, BULLION , JEWELLERY, OTHER VALUABLE ARTICLES OR THINGS OR BOOKS OF ACCOUNT OR DOCUMENTS FOUND AND SEIZED EITHER UNDER S. 132 OR REQUISITIONED UND ER S. 132A. IN OTHER WORDS, SUBJECT TO CERTAIN EXCEPTIONS, AS DISCUSSED HERE-IN-AFTER, UNDER THE SCHEME OF THE LAW ANY ASSESSMENT/ REASSESSMENT UNDER THE PROVISIONS OF SECTION 153A HAS TO BE MADE ONLY ON T HE BASIS OF INCRIMINATING MATERIAL OR UNDISCLOSED ASSETS FOUND DURING THE COURSE OF ACTION UNDER S. 132/ 132A AND IT CANNOT BE MADE ON THOSE ISSUES IN RESPECT OF WHICH NO INCRIMINATING MATERIAL/ UNDISCL OSED ASSET WAS FOUND. V) IT IS SUBMITTED THAT NORMALLY PROVISIONS OF SECT ION 132 ARE INVOKED ONLY WHEN THE AUTHORIZING OFFICER BEING THE DIRECTOR GEN ERAL OR DIRECTOR OR CHIEF COMMISSIONER OR COMMISSIONER OR ADDITIONAL DI RECTOR OR ADDITIONAL COMMISSIONER OR JOINT DIRECTOR OR JOINT COMMISSIONER, IN CONSEQUENCE OF INFORMATION IN HIS POSSESSION, HAS R EASON TO BELIEVE THAT ANY PERSON IS IN POSSESSION OF SOME MONEY, BUL LION, JEWELLERY OR OTHER VALUABLE ARTICLES OR THINGS OR BOOKS OF ACCOU NT OR DOCUMENTS WHICH HAVE NOT BEEN OR WOULD NOT HAVE BEEN DISCLOSE D BY SUCH PERSON FOR THE PURPOSE OF THE INCOME-TAX ACT, 1961. THE PU RPOSE OF THE PROVISIONS OF SECTION 132 IS NOT TO MAKE ANY ASSESS MENT OR REASSESSMENT BUT TO GATHER THE MATERIAL NECESSARY F OR THE PURPOSE OF MAKING ASSESSMENT OR REASSESSMENT. IT IS SUBMITTED THAT THE PROVISIONS OF SECTION 132 ARE NOT AIMED FOR DISCOVE RY OF THOSE ASSETS, BOOKS OR DOCUMENTS OR TRANSACTIONS, WHICH ARE ALREA DY IN THE SPECIFIC KNOWLEDGE OR DOMAIN OF THE REVENUE OR IF REQUIRED M AY COME IN THE SPECIFIC KNOWLEDGE OR DOMAIN OF THE REVENUE. IT SHA LL THUS BE APPRECIATED THAT THE PROVISIONS OF SECTION 132 ARE NOT MEANT FOR VERIFYING THE TRANSACTIONS WHICH ARE ALREADY RECORD ED IN THE REGULAR BOOKS OF ACCOUNT OF AN ASSESSEE. FOR SUCH VERIFICAT ION, THE POWERS OF ASSESSMENT OR REASSESSMENT ARE DULY VESTED WITH THE AO UNDER THE PROVISIONS OF SECTION 143/ 147 OF THE ACT. AS A NAT URAL COROLLARY IT THUS FOLLOWS THAT VERY PURPOSE OF INITIATING ACTION UNDE R S. 132 IS TO UNEARTH OR DISCOVER ANY UNDISCLOSED INCOME OR UNDISCLOSED A SSET OF AN ASSESSEE AND ITS OBJECTIVE IS NOT AT ALL TO VERIFY THE VERAC ITY OF THE TRANSACTIONS ALREADY RECORDED IN THE REGULAR BOOKS OF ACCOUNT OR IN RESPECT OF WHICH ASSESSMENTS HAVE ALREADY ATTAINED FINALITY. SINCE, THE PROVISIONS OF SECTION 153A HAVE THE SOLE OBJECTIVE OF FRAMING THE ASSESSMENT/ CHITRESH MEHTA SS 228 OF 2015 AND OTHERS 9 REASSESSMENT IN THE CASE OF A PERSON IN WHOSE CASE SEARCH UNDER S. 132 IS INITIATED OR REQUISITION UNDER S. 132 IS MAD E, IT HAS TO BE NECESSARILY CONCLUDED THAT THE SCOPE OF THE ASSESSM ENT/ REASSESSMENT UNDER THE PROVISIONS OF SECTION 153A IS LIMITED AND RESTRICTED ONLY TO THE UNDISCLOSED INCOME BASED UPON THE INCRIMINATING MATERIAL/ UNDISCLOSED ASSETS FOUND DURING THE COURSE OF SEARC H/ REQUISITION. VI) IT IS SUBMITTED THAT THE SCHEME OF SECTION 153A TAKES WITHIN ITS SWEEPS NOT ONLY THE ASSESSMENT/ REASSESSMENT FOR THOSE COM PLETED ASSESSMENT YEARS IN RESPECT OF WHICH EITHER THE ASS ESSMENTS UNDER S. 143(3) HAVE ALREADY GOT COMPLETED PREVIOUSLY OR THE TIME LIMIT FOR ISSUANCE OF NOTICE UNDER S. 143(2) HAVE GOT EXPIRED BUT IT ALSO INCLUDE THOSE ASSESSMENT YEARS IN RESPECT OF WHICH EITHER T HE ASSESSMENT PROCEEDINGS WERE PENDING OR THE STATUTORY TIME LIMI T FOR ISSUANCE OF NOTICE UNDER S. 143(2) WERE ALIVE, ON THE DATE OF I NITIATION OF THE SEARCH. THE LATER SITUATION HAS BEEN CONTEMPLATED U NDER CLAUSE (B) OF SUB-SECTION (1) TO SECTION 153A OF THE ACT WHICH PR ESCRIBES THAT ALL THE ASSESSMENT PROCEEDINGS WHICH ARE PENDING ON THE DAT E OF SEARCH SHALL GET ABATE. IT IS SO BECAUSE WHILE LEGISLATING THE LAW THE LEGISLATURE WERE NOT INTENDING TO CARRY OUT TWO PARALLEL ASSESS MENT/ REASSESSMENT PROCEEDINGS FOR THE SAME ASSESSMENT YE ARS UNDER TWO DIFFERENT SECTIONS WHICH WAS THE SITUATION PREVALEN T IN THE OLD BLOCK ASSESSMENT SCHEME UNDER CHAPTER XIV-B OF THE ACT IN RESPECT OF SEARCH INITIATED UP TILL 31 ST DAY OF MAY, 2003. IT IS THEREFORE, IT HAS BEEN PRESCRIBED THAT NO SOONER ANY SEARCH UNDER S. 132 T AKES PLACE IN CASE OF ANY ASSESSEE, ALL THE ASSESSMENT PROCEEDINGS WHI CH WERE EITHER IN THE MOTION OR WHICH WERE PENDING SHALL COME TO A HA LT. VII) IT IS SUBMITTED THAT UNDER THE PROVISIONS OF S ECTION 153A OF THE ACT, ASSESSMENT OR REASSESSMENT OF TOTAL INCOME OF THE P ERSON SEARCHED OR REQUISITIONED FOR SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WH ICH SEARCH IS CONDUCTED OR REQUISITION IS MADE HAS TO BE MADE BY THE CONCERNING ASSESSING OFFICER. UNDER THE SECOND PROVISO TO SECT ION 153A, IT HAS BEEN ENJOINED THAT ASSESSMENT OR REASSESSMENT, IF A NY, RELATING TO ANY OF THE SIX ASSESSMENT YEARS WHICH IS PENDING ON THE DATE OF INITIATION OF THE SEARCH OR MAKING THE REQUISITION SHALL ABATE . ON A PLAIN READING OF THE PROVISO, IT BECOMES ABUNDANTLY CLEAR THAT ON LY THE ASSESSMENT PROCEEDINGS WHICH WERE PENDING ON THE DATE OF INITI ATION OF SEARCH OR REQUISITION SHALL GET ABATE WHEREAS THE ASSESSMENT PROCEEDINGS FOR OTHER ASSESSMENT YEARS, WHICH HAVE ATTAINED FINALIT Y, SHALL NOT GET ABATED. THUS, A CLEAR CUT DISTINCTION HAS BEEN MADE IN THE SECTION ITSELF IN RESPECT OF THOSE ASSESSMENT YEARS IN RESPECT OF WHICH PROCEEDINGS HAVE ATTAINED FINALITY AT THE AO STAGE AND THOSE AS SESSMENT YEARS WHERE THE ASSESSMENT PROCEEDING HAVE NOT SO ATTAINE D THE FINALITY AT AO STAGE. IT IS SUBMITTED THAT WHILE MAKING THE ASS ESSMENT UNDER S. CHITRESH MEHTA SS 228 OF 2015 AND OTHERS 10 153A, AN AO HAS TO MAKE A SPECIFIC DISTINCTION FOR NON-ABATED ASSESSMENT YEARS WITH THAT OF THE ABATED ASSESSMENT YEARS. VIII) IT IS SUBMITTED THAT THE ISSUE RELATING TO SC OPE OF ASSESSMENT UNDER S. 153A/153C IS NOT RES INTEGRA. THE VARIOUS CONTROVER SIES AND INTRICACIES INVOLVED IN THE ISSUE HAS FINALLY BEEN SET AT REST BY HON'BLE ITAT, MUMBAI SPECIAL BENCH, IN THE CASE OF ALL CARGO GLOB AL LOGISTICS LTD. & ORS. VS. DCIT (2012) 74 DTR (MUMBAI) (SB) (TRIB) 89 IN ITS LANDMARK DECISION PRONOUNCED ON 06-07-2012. IT IS SUBMITTED THAT THE HON'BLE SPECIAL BENCH AT PARA (58) OF ITS ORDER, WAS PLEASE D TO LAY DOWN THE RATIO AS UNDER: '58. THUS, QUESTION NO.1 BEFORE US IS ANSWERED AS U NDER: (A) IN ASSESSMENTS THAT ARE ABATED, THE AO RETAINS THE ORIGINAL JURISDICTION AS WELL AS JURISDICTION CONFERRED ON H IM UNDER S. 153A FOR WHICH ASSESSMENTS SHALL BE MADE FOR EACH O F THE SIX ASSESSMENT YEARS SEPARATELY; (B) IN OTHER CASES, IN ADDITION TO THE INCOME THAT HAS ALREADY BEEN ASSESSED, THE ASSESSMENT UNDER S. 153A WILL BE MADE ON THE BASIS OF INCRIMINATING MATERIAL, WHICH IN THE CONTE XT OF RELEVANT PROVISIONS MEANS (I) BOOKS OF ACCOUNT, OTHER DOCU MENTS, FOUND IN THE COURSE OF SEARCH BUT NOT PRODUCED IN T HE COURSE OF ORIGINAL ASSESSMENT, AND (II) UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH.' IX) THE HON'BLE SPECIAL BENCH OF ITAT IN THE CASE O F ALL CARGO (SUPRA) AT PARA (5) OF THE ORDER HAS IMPLIEDLY STATED THAT EVE N IN A CASE WHERE THE ASSESSMENT PROCEEDINGS ARE COMPLETED UNDER S. 1 43(1)(A), IT HAS TO BE TAKEN THAT THE PROCEEDINGS ARE COMPLETED AND THE SE ARE NOT PENDING AND CONSEQUENTLY SUCH PROCEEDINGS WOULD NOT GET ABATED. X) THE HON'BLE MUMBAI 'A' BENCH OF ITAT IN THE CASE OF ATITHI N. PATEL VS. ACIT IN ITA NO. 43/MUM/2010 FOLLOWING THE DECISION OF THE HON'BLE SPECIAL BENCH IN THE CASE OF ALL CARGO HELD THAT IN RESPECT OF THOSE ASSESSMENT YEARS FOR WHICH ASSESSMENT PROCEEDINGS H AD ATTAINED FINALITY, THE ADDITIONS CAN BE MADE ONLY ON THE BAS IS OF INCRIMINATING MATERIAL. ACCORDINGLY, THE HON'BLE BENCH FOR THE AS SESSMENT YEAR 2004-05, IN WHICH THE TIME LIMIT FOR ISSUANCE OF NO TICE UNDER S. 143(2) HAD GOT EXPIRED DELETED THE ADDITION MADE ON ACCOUN T OF DISALLOWANCE OF INTEREST WHICH WAS NOT BASED UPON ANY SEIZED MAT ERIAL OR DOCUMENT. SINCE, IN THE INSTANT CASE TOO, THE ADDIT IONS MADE FOR THE ASSESSMENT YEAR UNDER CONSIDERATION ARE NOT BASED U PON ANY SEIZED MATERIAL OR DOCUMENT, THE ENTIRE ADDITIONS SO MADE DESERVES TO BE DELETED IN TOTO. CHITRESH MEHTA SS 228 OF 2015 AND OTHERS 11 XI) THE RATIO LAID DOWN BY THE ITAT SPECIAL BENCH, MUMBAI IN THE CASE OF AL CARGO SUPRA HAS BEEN APPROVED EXPLICITLY BY THE HON'BLE HIGH COURT OF RAJASTHAN IN THE CASE OF JAI STEEL (INDIA) VS. C IT (2013) 259 CTR 281 (RAJ.) AND IMPLIEDLY BY THE HON'BLE HIGH COURT OF D ELHI IN THE CASE OF CIT VS. ANIL KUMAR BHATIA (2012) 211 TAXMAN 453 (DE L.). XII) RECENTLY, THE HONBLE HIGH COURT OF DELHI IN T HE CASE OF CIT VS. KABUL CHAWLA (2015) 93 CCH 0210 (DEL HC), AFTER CONSIDERI NG ALL THE AVAILABLE DECISIONS ON THE ISSUE HAS HELD THAT IN R ESPECT OF THE COMPLETED ASSESSMENT, ADDITIONS CAN BE MADE ONLY ON THE BASIS OF INCRIMINATING DOCUMENTS. XIII) IT IS SUBMITTED THAT FOLLOWING THE JUDGMENT OF THE HONBLE DELHI HIGH COURT, IN THE CASE OF KABUL CHAWLA, THE HONBLE JUR ISDICTIONAL BENCH OF ITAT IN CASE OF KALANI BROTHERS IN IT(SS)A NO. 7 1/IND/2014 AND AGAIN IN THE CASE OF ANANT STEEL PVT. LTD. IN IT(SS )A NOS. 31, 28, 29 & 30/IND/2010, HAS HELD THAT IN RESPECT OF THE COMPLE TED ASSESSMENT YEARS, IN ABSENCE OF ANY INCRIMINATING DOCUMENTS FO UND AND SEIZED DURING THE COURSE OF SEARCH, NO ADDITION CAN BE MAD E. XIV) THE RELIANCE IS ALSO PLACED ON THE FOLLOWING J UDICIAL PRONOUNCEMENTS: I) ACIT VS. DELHI HOSPITAL SUPPLY P. LTD. (2015) 45 CCH 0092 DEL. TRIB II) VIMAL KUMAR RATHI VS. DCIT (2015) 45 CCH 0122 M UM. TRIB. III) SANJAY AGARAWAL VS. DCIT (2015) 169 TTJ 0282 (DEL) IV) SHRI YAMUNA PROTEINS, DAHOD VS. ACIT [APPEAL NO . IT(SS) NOS. 227 TO 232/AHD/2010 ORDER DATED 18-10- 2012] V) VEE GEE INDUSTRIAL ENTERPRISES NEW DELHI VS. ACI T [ITA NO. 1/DEL/2011 ORDER DATED 12-07-2013] VI) MARIGOLD MERCHANDISE (P) LTD. VS. DCIT (2014) 104 D TR (DEL)(TRIB) 113 VII) ACIT VS. M/S. PRITHVI SOUND PRODUCTS CO. PVT. LTD. [ITA NO.3422 TO 3426/DEL/2011 ORDER DATED 17-04-2014] VIII) ACIT VS. M/S. KS. FOOD PRODUCTS [ITA NO.519/A GRA/2012 & C.O. NO.10/AGRA/2013 ORDER DATED 17-05-2013] CHITRESH MEHTA SS 228 OF 2015 AND OTHERS 12 IX) SMT. SUNITA BAI VS. DCIT (2015) 68 SOT 0098 (PA NAJI) (URO) X) DCIT VS. RELIANCE GRANITE P LTD. (2015) 43 CCH 0 028 (HY. TRIB.) XV) IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE C ASE OF THE APPELLANT AND VARIOUS JUDICIAL PRONOUNCEMENTS, IT IS SUBMITTED TH AT SINCE THE ASSESSMENT YEARS UNDER CONSIDERATION WERE THE YEARS IN RESPECT OF WHICH ASSESSMENT PROCEEDINGS HAD GOT COMPLETED AND THE SAME WERE NOT PENDING ON THE DATE OF THE SEARCH, ANY ADDITION WHICH IS NOT BASED ON ANY INCRIMINATING MATERIAL FOUND DURING THE COUR SE OF SEARCH IS NOT LEGALLY SUSTAINABLE AND THE SAME DESERVES TO BE KNO CKED OUT ON THE THRESHOLD ITSELF. 12. LD. DR RELIED ON THE ORDERS OF THE REVENUE AUTH ORITIES AND SUBMITTED THAT LD. CIT(A) HAS, DEALING WITH THE ISS UE, RELIED ON JUDICIAL PRONOUNCEMENTS AND RIGHTLY DISMISSED THE GROUND OF THE ASSESSEE, WHICH MAY BE UPHELD. 13. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF BOT H THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON THE FILE. IF WE GO THROUGH THE CHART FURNISHED BEFORE US, WE FIND THAT IN THE INSTANT CA SE, THE ASSESSEE FURNISHED HIS ORIGINAL RETURN OF INCOME FOR A.Y. 20 05-06 TO A.Y. 2008-09, UNDER S.139 OF THE INCOME-TAX ACT, 1961 AND IN RESP ONSE TO SUCH RETURNS, NO NOTICE UNDER S.143(2) WAS ISSUED AND THE TIME LI MIT FOR ISSUANCE OF THE NOTICE HAD GOT EXPIRED UP TILL 30-09-2010 I.E. MUCH PRIOR TO THE DATE OF SEARCH ON 25-11-2010. THE IMPUGNED ASSESSMENT ORDER S HAVE BEEN CHITRESH MEHTA SS 228 OF 2015 AND OTHERS 13 PASSED BY THE ASSESSING OFFICER ONLY ON THE BASIS O F A SEARCH UNDER S.132 CARRIED OUT IN THE RESIDENTIAL PREMISES OF THE ASSE SSEE. THE ASSESSING OFFICER MADE CERTAIN ADDITIONS IN THE RETURNED INCO ME OF THE ASSESSEE FOR THE ASSESSMENT YEARS UNDER CONSIDERATION, WITHOUT H AVING ANY RECOURSE TO ANY INCRIMINATING MATERIAL OR DOCUMENT OR VALUAB LE ARTICLE OR THING FOUND DURING THE COURSE OF THE SEARCH PROCEEDINGS. IN NUTSHELL, THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE IS T HAT FOR THE ASSESSMENT YEARS 2005-06 TO 2008-09, ASSESSMENT ORDERS ARE BAD IN LAW SINCE NO INCRIMINATING DOCUMENTS WERE FOUND DURING THE COURS E OF SEARCH. THE ASSESSEE HAD ALREADY FILED THE RETURNS FOR VARIOUS YEARS IN TIME AND SUBMITTED ALL THE DETAILS IN TAR. FOR AND UPTO THE A.Y. 2008-09, THE TIME LIMIT FOR ISSUANCE OF NOTICE UNDER 143(2)/142 HAD A LREADY EXPIRED. WITHOUT FINDING ANY INCRIMINATING MATERIAL DURING T HE COURSE OF THE SEARCH, NO ADDITION CAN BE MADE ON ESTIMATES OR ON THE BASIS OF ENTRIES IN THE BOOKS OF ACCOUNTS WHICH ARE ALREADY RECORDED AN D INCORPORATED IN THE BALANCE SHEET WHICH ARE FILED ALONG WITH THE RE TURNS. THUS, THE ASSESSMENTS ARE NOT ABATED AND WITHOUT FINDING ANY INCRIMINATING MATERIAL, NO ADDITIONS CAN BE MADE. IN THE PRESENT APPEALS, WE FIND THAT NO INCRIMINATING MATERIAL WAS FOUND IN RESPECT OF A NY OF THESE YEARS AND CHITRESH MEHTA SS 228 OF 2015 AND OTHERS 14 THE ASSESSING OFFICER MADE ADDITIONS ON THE MATERIA L WHICH ARE ALREADY DISCLOSED IN THE BOOKS. THE LD. CIT(A) AFTER DISCUS SING SOME VARIOUS CASE LAWS DISMISSED THIS GROUND. HE WAS OF THE VIEW THAT EVEN IF NO INCRIMINATING MATERIAL IS FOUND, A NORMAL ASSESSMEN T HAS TO BE MADE UNDER S. 153A OF THE ACT. WE FIND THAT NO INCRIMINA TING DOCUMENTS WERE FOUND DURING THE COURSE OF THE SEARCH FOR AND UPTO THE A.Y. 2008-09 WHICH IS EVIDENT FROM THE ASSESSMENT ORDERS FOR VAR IOUS YEARS WHEREIN THE ADDITIONS WERE MADE ON THE MATERIALS WHICH HAVE ALREADY BEEN SHOWN IN THE BOOKS OF ACCOUNTS AND ALSO SHOWN IN TH E VARIOUS BALANCE SHEETS WHICH WERE FILED ALONG WITH THE RETURNS OR D ISCLOSED IN THE RETURNS. LD. DR HAS DEFENDED THE ACTION OF THE REVENUE AUTHO RITIES AS ABOVE BUT COULD NOT CONTROVERT THE FACTUAL SUBMISSION MADE BY THE LD. AR OF THE ASSESSEE ON THE ISSUE OF INCRIMINATING MATERIAL. KE EPING IN VIEW THE FACTS AND SUBMISSIONS THEREOF, WE FIND THAT THE PRESENT I SSUE WITH REGARD TO ABSENCE OF ANY INCRIMINATING MATERIAL OR DOCUMENTS SEIZED DURING THE COURSE OF SEARCH HAS BEEN DECIDED BY INDORE BENCH I N THE CASE OF KALANI BROS. IN IT(SS)A NO.71/IND/2014 AND OTHERS WHEREIN INDORE BENCH, HAVING CONSIDERING VARIOUS JUDICIAL PRONOUNCEMENTS, DECIDE D THAT IN THE ABSENCE OF INCRIMINATING MATERIAL DURING THE COURSE OF SEAR CH, THE ASSESSING CHITRESH MEHTA SS 228 OF 2015 AND OTHERS 15 OFFICER CANNOT PASS ORDER U/S 153A R.W.S. SEC. 143( 3) OF THE I.T. ACT. THE RELEVANT PORTION OF THE ORDER IS REPRODUCED HEREUND ER: 8. IN RESPECT OF 153A BAD IN LAW ON THE GROUND THA T ORIGINAL ASSESSMENT PROCEEDINGS U/S 143(3) WAS COMPLETED ON 29.12.2006 (HEREINAFTER REFERRED AS ORIGINAL ASSESSMENT ORDER FOR EASE OF REFERENCE ), THE AO TREATED THE SAID LEASE TRANSACTION AS SALE TRANSACTION AND TAXED THE TOTAL SECURITY DEPOSIT RECEIVABLE AS SALE CONSIDERATION OF SALE OF LAND. T HE ADDITION MADE IN THE SEARCH ASSESSMENT ORDER PERTAINED TO THE ISSUE ALRE ADY DEALT IN THE ORIGINAL ASSESSMENT ORDER I.E. LEASE TRANSACTION CATEGORIZED AS SALE TRANSACTION. THE FACT THAT THE AFORESAID ISSUE BEARS NO RELATION TO THE ANY OF THE MATERIAL / DOCUMENTS / RECORDS FOUND AND SEIZED DURING THE SEA RCH ACTION ON 16.04.2009. LD. CIT(A) HAS RELIED UPON THE CIRCULAR NO. 7 OF 2003 WHICH CLARIFIES THE POSITION OF THE PENDING APPEALS AS ON THE DATE OF THE SEARCH. THE RELEVANT PORTION IS PRODUCED HEREWITH 'THE ASSESSING OFFICER SHALL ASSESS OR REASSESS THE TOTAL INCOME OF EACH OF THESE SIX ASSESSMENT YEARS. ASSESSMENT OR REASSESSMENT, IF ANY, RELATING TO ANY ASSESSMENT YEAR FALLING WIT HIN THE PERIOD OF SIX ASSESSMENT YEARS PENDING ON THE DATE OF INITIAT ION OF THE SEARCH UNDER SECTION 132 OR REQUISITION UNDER SECT ION 132A, AS THE CASE MAY BE, SHALL ABATE. IT IS CLARIFIED THAT THE APPEAL, REVISION OR RECTIFICATION PROCEEDINGS PENDING ON THE DATE OF IN ITIATION OF SEARCH UNDER SECTION 132 OR REQUISITION SHALL NOT A BATE..' ACCORDINGLY, AS FAR AS COMPLETED ASSESSMENTS ARE CO NCERNED, THEY DO NOT ABATE. THE AO CANNOT PROCEED TO MAKE THE SAME ADDIT ION IN THE BLOCK ASSESSMENT WITHOUT ANY INCRIMINATING MATERIAL FOUND IN THE COURSE OF SEARCH. THE SAID VIEW PREVENTS THE AO TO UNDO WHAT HAS ALREADY BEEN COMPLETED AND HAS BECOME FINAL IN THE ORIGINAL ASSE SSMENT PROCEEDINGS. 9. WE HAVE HEARD BOTH THE SIDES. WE HAVE ALSO GONE THROUGH THE CASE LAWS RELIED UPON BY BOTH THE SIDES. WE HAVE ALSO CO NSIDERED VARIOUS RELEVANT CHITRESH MEHTA SS 228 OF 2015 AND OTHERS 16 FACTS OF THE CASE. IT IS A SETTLED LEGAL POSITION T HAT ONCE A SEARCH AND SEIZURE ACTION HAS TAKEN PLACE U/S 132 OF THE ACT OR A REQU ISITION HAS BEEN MADE U/S 132A, THE PROVISIONS OF SECTION 153A TRIGGED AND AS SESSING OFFICER IS BOUND TO ISSUE NOTICE U/S 153A OF THE ACT. ONCE NOTICES ARE ISSUED U/S 153A OF THE ACT THEN ASSESSEE IS LEGALLY OBLIGED TO FILE RETURN OF INCOME FOR SIX YEARS. THE ASSESSMENT AND REASSESSMENT FOR SIX YEARS SHALL BE FINALISED BY THE ASSESSING OFFICER. IT IS ALSO HELD BY VARIOUS COURTS THAT ON CE NOTICE U/S 153A OF THE ACT ISSUED, THEN ASSESSMENT FOR SIX YEARS SHALL BE AT L ARGE BOTH FOR ASSESSING OFFICER AND ASSESSEE HAVE NO WARRANT OF LAW. IT HAS BEEN ALSO HELD THAT IN THE ASSESSMENT YEARS WHERE ASSESSMENTS HAVE BEEN ABATED IN TERMS OF SECOND PROVISO TO SECTION 153A THEN ASSESSING OFFICER ACTS UNDER ORIGINAL JURISDICTION AND ONE ASSESSMENT IS MADE FOR TOTAL INCOME INCLUDI NG THE ADDITION MADE ON THE BASIS OF SEIZED MATERIAL. BUT WHERE THERE IS NO ABATEMENT OF ASSESSMENTS AND ASSESSMENTS WERE COMPLETED ON THE DATE OF SEARC H THEN ADDITION CAN BE MADE ONLY ON THE BASIS OF INCRIMINATING DOCUMENTS O R UNDISCLOSED ASSETS, ETC. IN THESE CASES THERE WAS NO INCRIMINATING DOCUMENT FOUND AND SEIZED. NO ASSESSMENT PROCEEDINGS WERE ABATED IN THESE ASSESSE ES. THUS ASSESSMENTS FOR THESE ASSESSMENT YEARS WERE COMPLETED ON THE DA TE OF SEARCH. THE ASSESSMENTS WERE COMPLETED U/S 143(3) OF THE ACT RE AD WITH SECTION 153A/153C OF THE ACT AFTER THE SEARCH. THERE WAS NO ABATEMENT OF ANY PROCEEDINGS IN THESE CASES FOR THESE ASSESSMENT YEA RS IN TERMS OF SECOND PROVISO TO SECTION 153A OF THE ACT. THERE IS NO SEI ZED MATERIAL BELONGING TO THE ASSESSEE WHICH WAS FOUND AND SEIZED IN RELATION TO ADDITIONS MADE. IN A RECENT DECISION, HON'BLE DELHI HIGH COURT IN THE CA SE OF CIT VS. KABUL CHAWLA (SUPRA) HAS HELD THAT COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY THE ASSESSING OFFICER WHILE MAKING ASSESSMENT U/S 153A OF THE ACT, ONLY ON THE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURI NG THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS OR UNDISCLOSED INCOME O R PROPERTY DISCOVERED IN THE COURSE OF SEARCH WHICH WAS NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT. IN ALL THESE CASES NO ASSESSMENTS WERE PENDING ON THE DATE OF SEARCH FOR THESE ASSESSMENT YEARS. CHITRESH MEHTA SS 228 OF 2015 AND OTHERS 17 NO ASSESSMENTS WERE ABATED IN TERMS OF SECOND PROVI SO TO SECTION 153A OF THE ACT. HON'BLE DELHI HIGH COURT IN THE CASE OF C IT VS. KABUL CHAWLA (SUPRA) HAS CONSIDERED VARIOUS HIGH COURT DECISIONS RELIED UPON BY THE LEARNED DR. THE HON'BLE DELHI HIGH COURT HAS CONSIDERED THE CAS ES OF CANARA HOUSING DEVELOPMENT CO. VS. DCIT; MADUGULA VS. DCIT; CIT VS . CHETANDAS LAXMANDAS AND CIT VS. ANIL KUMAR BHATIA (SUPRA). THE ONLY DE CISION OF THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. RAJ KUM AR ARORA; 367 ITR 517 RELIED ON BY THE LEARNED DR WAS NOT CONSIDERED BY H ON'BLE DELHI HIGH COURT WHILE DECIDING THE ISSUE IN THE CASE OF KABUL CHAWL A. THE HON'BLE ALLAHABAD HIGH COURT HAS REVERSED THE ORDER OF THE TRIBUNAL A ND REMANDED THE ISSUE TO THE TRIBUNAL TO CONSIDER THE APPEAL OF THE DEPARTME NT ON MERITS. IT IS A SETTLED LEGAL POSITION THAT WHEN TWO VIEWS ARE POSS IBLE ON A PARTICULAR ISSUE THEN THE VIEW FAVOURABLE TO THE ASSESSEE SHOULD BE FOLLOWED AS HELD BY THE HON'BLE APEX COURT IN THE CASE OF CIT VS. VEGETABLE PRODUCTS; 88 ITR 192. RESPECTFULLY FOLLOWING THE DECISION OF THE HON'BLE APEX COURT, WE DISMISS THE GROUND OF APPEALS OF THE REVENUE. DEPARTMENTAL APPE ALS ARE DISPOSED ACCORDINGLY. 13.1 WE ALSO FIND SUPPORT FROM THE DECISION OF HON BLE GUJRAT HIGH COURT IN CASE OF PRINCIPAL CIT VS. SUMAYA CONSTRUCT ION P. LTD., 387 ITR 529 (GUJ) WHEREIN THE HON'BLE HIGH COURT HAS FOLLOWED T HE DECISION OF RAJASTHAN HIGH COURT IN THE CASE JAI STEEL VS. ACIT , 1 ITR OL 371. THE GUJARAT HIGH COURT HAS ALSO APPROVED THE DECISION O F KABUL CHAWLA, 380 ITR 573 (DELHI). THUS, WE, FOLLOWING THE ABOVE ORDE R OF THIS BENCH AND VARIOUS HIGH COURTS AS CITED ABOVE, ALLOW THE PRESE NT APPEALS FILED BY THE ASSESSEE FOR THE ASSESSMENT YEARS 2005-06 TO 2008-0 9 ON THE ISSUE OF SECTION 153A R.W.S. SECTION 143(3) OF THE I.T. ACT WHEREIN IT HAS BEEN HELD CHITRESH MEHTA SS 228 OF 2015 AND OTHERS 18 THAT IN ABSENCE OF ANY INCRIMINATING DOCUMENTS FOUN D AND SEIZED DURING THE COURSE OF SEARCH, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING THE ADDITIONS IN NON-ABATED ASSESSMENTS WHILE PASSING T HE ORDERS U/S 153A R.W.S. 143(3) OF THE ACT. THUS, WE HOLD THE NON-AB ATED ASSESSMENTS FOR THE A.YS. 2005-06 TO 2008-09 AS AB INITIO VOID. CON SEQUENTLY, THE PRESENT ASSESSMENT ORDERS PASSED U/S 153A/143(3) FOR THE AS SESSMENT YEARS 2005-06 TO 2008-09 ARE QUASHED. ACCORDINGLY, THIS I SSUE OF INCRIMINATING MATERIAL INVOLVED IN THE ASSESSEES APPEALS IT(SS)A NOS.228 TO 231/IND/2015 IS ALLOWED. GROUND NO. 4 IN APPEAL NO. IT(SS)A NO.228/IND/2015 (FOR A.Y. 2005- 06) 14. THIS GROUND OF APPEAL IS DIRECTED AGAINST THE A CTION OF THE LD. CIT(A) IN CONFIRMING THE ADDITION MADE BY THE AO, UNDER S. 68 OF THE ACT, IN THE ASSESSEE INCOME ON ACCOUNT OF UNSECURED LOAN OF RS .5,00,000/- EACH OBTAINED BY THE ASSESSEE FROM TWO PERSONS NAMELY SH RI NILESH MEHTA AND SMT. VANDANA MEHTA. 15. SHORT FACTS OF THE ISSUE ARE THAT DURING THE CO URSE OF THE ASSESSMENT PROCEEDINGS, FROM THE BANK ACCOUNT OF THE ASSESSEE WITH ICICI BANK FOR F.Y. 2004-05, THE AO NOTED THAT THE ACCOUNT OF THE ASSESSEE WAS CREDITED CHITRESH MEHTA SS 228 OF 2015 AND OTHERS 19 WITH RS.10,00,000/- IN THE MONTH OF AUGUST 2004. TH E AMOUNT WAS RECEIVED FROM SHRI NILESH MEHTA AND SMT. VANDANA ME HTA, BOTH THESE PERSONS WERE THE RELATIVES OF THE ASSESSEE. ACCORDI NG TO THE AO, DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE ASSES SEE WAS DIRECTED TO PRODUCE THE CREDITORS ALONG WITH THEIR BOOKS OF ACC OUNTS, FUND FLOW STATEMENT, BALANCE SHEET, CAPITAL ACCOUNT, ETC. VID E QUESTIONNAIRE DATED 04-02-2013 BUT THE ASSESSEE FAILED TO PRODUCE THE C REDITORS AND COULD ONLY PRODUCE THEIR CONFIRMATION AND BANK STATEMENTS . DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE AO NOTED THAT ON E OTHER GROUP ASSESSEE NAMELY SMT. BHARTI MEHTA, WHOSE CASE WAS A LSO SCRUTINIZED UNDER S.153A R.W.S. 143(3) OF THE I.T. ACT, 1961, H AD ALSO SHOWN RECEIPT OF GIFT FROM AFORESAID PERSONS AND IN THE CASE OF SUCH GROUP ASSESSEE, THE GIFT WAS FOUND TO BE NON-GENUINE. IN VIEW OF THIS F ACT AND IN VIEW OF NON- PRODUCTION OF CREDITORS BY THE ASSESSEE, THE AO MAD E AN ADDITION OF RS.10,00,000/- IN THE HANDS OF THE ASSESSEE UNDER S .68 OF THE ACT. 16. MATTER CARRIED TO LD. CIT(A), WHO UPHELD THE AD DITION MADE BY THE AO BY HOLDING THAT THE ASSESSEE FAILED TO ESTABLISH GENUINENESS AND CREDITWORTHINESS OF BOTH THESE CREDITORS BECAUSE BO TH SHRI NILESH MEHTA AND SMT. VANDANA MEHTA HAVE VERY SMALL INCOME OF RS .1,38,560/- AND CHITRESH MEHTA SS 228 OF 2015 AND OTHERS 20 RS.1,08,082/- FROM DALALI AND MCX TRADING AND NONE OF THESE AMOUNTS WERE FOUND DEPOSITED IN THEIR BANK ACCOUNTS IN BANK OF RAJASTHAN LTD.. THE CIT(A) OBSERVED THAT ON 02-09-2014, A SUM OF RS .5,00,000/- WAS FOUND CREDITED IN BANK ACCOUNT OF EACH OF THE CREDI TORS THROUGH INSTRUMENTS AND IMMEDIATELY ON THE NEXT DATE, THE F UNDS WERE TRANSFERRED ON 03-09-2014 IN THE BANK ACCOUNT OF TH E ASSESSEE WITH THE SAME BANK. THE CIT(A) THUS HELD THAT THE BANK ACCOU NTS OF THE CREDITORS WERE MERELY USED BY THE ASSESSEE AND FAMILY MEMBERS TO ROTATE THEIR FUNDS IN THE GUISE OF LOANS/ GIFTS. THE CIT(A) ALSO FOUND THAT THE ASSESSEE HAD NOT PRODUCED ANY CREDITOR BEFORE AO FOR VERIFIC ATION. IN SUCH CIRCUMSTANCES, THE CIT(A) RELYING UPON VARIOUS DECI SIONS, CONFIRMED THE ADDITION OF RS.10,00,000/- MADE IN THE ASSESSEES H ANDS UNDER S.68 OF THE ACT. 17. THE LD. AR FOR THE ASSESSEE RELIED UPON HIS WRI TTEN SUBMISSION MADE BEFORE THE LD. CIT(A) WHICH IS PLACED AT PAGE NO. 1 3 & 14 AND VARIOUS DOCUMENTARY EVIDENCES SUCH AS COPIES OF CONFIRMATIO N LETTERS OF THE CREDITORS, COPIES OF BANK STATEMENTS, COPIES OF PAN CARDS, COPIES OF INCOME-TAX RETURNS OF THE CREDITORS FURNISHED BEFOR E THE LD. CIT(A), WHICH ARE PLACED AT PAGE NO. 58 TO 69 OF THE PAPER BOOK. IT WAS FURTHER CHITRESH MEHTA SS 228 OF 2015 AND OTHERS 21 SUBMITTED THAT SINCE THE ASSESSMENT YEAR UNDER CONS IDERATION IS A NON- ABATED ASSESSMENT YEAR, NO ADDITION COULD HAVE BEEN MADE WITHOUT HAVING RECOURSE TO ANY INCRIMINATING MATERIAL AND I N THE INSTANT CASE, THE AO HAS MADE THE ADDITION MERELY ON HIS OWN ASSUMPTI ONS AND FOR THE REASON OF NON-PRODUCTION OF CREDITORS WITHOUT HAVIN G ANY OTHER EVIDENCE ON RECORD, THEREFORE, DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF KABUL CHAWLA AND DECISION OF THIS HONBLE BENCH IN THE CASE OF KALANI BROS. AND OTHERS WILL BE APPLICABLE. 18. LD. DR RELIED ON THE ORDERS OF THE REVENUE AUTH ORITIES. 19. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF BOT H THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON THE FILE. WE ARE OF THE VIEW THAT WE HAVE ALREADY GIVEN OUR FINDING ABOVE THAT IN ABS ENCE OF ANY INCRIMINATING MATERIAL, NO ADDITION COULD BE MADE F OR NON-ABATED ASSESSMENT YEAR. IN THE INSTANT CASE, WE FOUND THAT THE ADDITION IS NOT BASED UPON ANY INCRIMINATING MATERIAL AND THE ASSES SMENT YEAR IS ONE IN RESPECT OF WHICH NO ASSESSMENT PROCEEDINGS WAS PEND ING ON THE DATE OF SEARCH. ACCORDINGLY, ON THIS LEGAL ASPECT ALONE, WE ALLOW THE APPEAL OF THE ASSESSEE ON THIS GROUND. CHITRESH MEHTA SS 228 OF 2015 AND OTHERS 22 GROUND NO. 5 IN APPEAL NOS. IT(SS)A NOS. 228, 229 & 230/IND/2015 (FOR A.Y. 2005-06, A.Y. 2006-07 AND A.Y. 2007-08) 20. THESE GROUNDS OF APPEAL FOR ALL THREE ASSESSMEN T YEARS ARE COMMON AND ARE DIRECTED AGAINST THE ACTION OF THE LD. CIT( A) IN CONFIRMING THE ADDITION MADE BY THE AO, IN THE ASSESSEE INCOME ON ACCOUNT OF DISALLOWANCE OF ROUTER EXPENSES INCURRED BY THE ASS ESSEE. 21. SHORT FACTS OF THE ISSUE ARE THAT DURING THE CO URSE OF THE ASSESSMENT PROCEEDINGS, FROM THE EXAMINATION OF PROFIT & LOSS ACCOUNT, FOR VARIOUS ASSESSMENT YEARS, THE AO NOTED THAT THE ASSESSEE HA D CLAIMED ROUTER CHARGES AMOUNTING TO RS.4,96,899/-, RS.5,23,092/- A ND RS.4,20,311/- RESPECTIVELY FOR A.Y. 2005-06, A.Y. 2006-07 AND A.Y . 2007-08. THE AO REQUIRED THE ASSESSEE TO PRODUCE BILLS AND VOUCHERS FOR THESE EXPENSES WHICH ACCORDING TO THE AO, THE ASSESSEE FAILED TO P RODUCE. ACCORDING TO THE AO, THESE EXPENSES ARE BORNE BY THE TRADING MEM BER THROUGH WHOM THE ASSESSEE HAS CARRIED OUT HIS TRADING AND SUCH E XPENSES WERE NOT BORNE BY THE ASSESSEE. THE AO FURTHER OBSERVED THAT IN SUBSEQUENT ASSESSMENT YEARS, I.E. A.Y. 2008-09 TO A.Y. 2011-12 , THE ASSESSEE HAD NOT CLAIMED THESE EXPENSES THOUGH THE NATURE OF BUSINES S ACTIVITY REMAINED TO BE CONTINUED BY THE ASSESSEE IN SUBSEQUENT YEARS . THUS, THE AO HELD CHITRESH MEHTA SS 228 OF 2015 AND OTHERS 23 SUCH EXPENSES BEING NON-GENUINE AND BOGUS AND ADDED SUCH EXPENSES TO THE INCOME OF THE ASSESSEE. 22. MATTER CARRIED TO LD. CIT(A), WHO UPHELD THE AD DITION MADE BY THE AO. THE CIT(A) NOTED THAT THE BILLS FURNISHED BY TH E ASSESSEE ON ACCOUNT OF SUCH ROUTER CHARGES WERE NOT IN THE NAME OF THE ASSESSEE BUT THESE WERE IN THE NAMES OF MEHTA & SONS. THE CIT(A) ALS O OBSERVED THAT THE ASSESSEE COULD NOT PROVE ANY CORRELATION OF THE EXP ENSES INCURRED WITH THE BROKERAGE INCOME SHOWN. ACCORDINGLY, THE CIT(A) CONFIRMED THE ADDITION FOR ALL THREE YEARS MADE BY THE AO BY DISA LLOWANCE OF ENTIRE ROUTER CHARGES CLAIMED BY THE ASSESSEE. 23. THE LD. AR FOR THE ASSESSEE HAS MADE ORAL AS WE LL AS WRITTEN SUBMISSION AS UNDER: IN THIS CONTEXT, IT IS SUBMITTED THAT THE ASSESSEE WISH TO PLACE RELIANCE ON HIS WRITTEN SUBMISSION MADE BEFORE THE LD. CIT(A) WHICH IS PLACED AT PAGE NO. 14 TO 16 AND VARIOUS DOCUMENTARY EVIDENCES SUCH AS COP IES OF LEDGER ACCOUNT OF ROUTER CHARGES, COPY OF ACCOUNT OF REUTERS INDIA PV T. LTD. IN THE BOOKS OF THE ASSESSEE, COPY OF THE EXPENSES INVOICES, COPY OF TH E BANK STATEMENTS ETC. WHICH ARE PLACED AT PAGE NO. 70 TO 90 OF THE PAPER BOOK FOR A.Y. 2005-06. IT IS FURTHER SUBMITTED THAT THE ASSESSMENT YEARS UNDER C ONSIDERATION ARE NON- ABATED ASSESSMENT YEARS AND THEREFORE, NO ADDITION COULD HAVE BEEN MADE WITHOUT HAVING RECOURSE TO ANY INCRIMINATING MATERI AL. IN THE INSTANT CASE, THE AO HAS MADE THE ADDITION MERELY ON HIS OWN ASSUMPTI ONS AND FOR THE IRRELEVANT CONSIDERATIONS WITHOUT HAVING ANY OTHER EVIDENCE ON RECORD. IN SUCH CIRCUMSTANCES, WE WISH TO RELY UPON THE DECISI ON OF THE HONBLE DELHI HIGH COURT IN THE CASE OF KABUL CHAWLA AND DECISION OF THIS HONBLE BENCH IN THE CASE OF KALANI BROS. AND OTHERS. CHITRESH MEHTA SS 228 OF 2015 AND OTHERS 24 24. THE LD. DR RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. 25. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF BOT H THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON THE FILE. WE ARE OF THE VIEW THAT WE HAVE ALREADY GIVEN OUR FINDING ABOVE THAT IN ABS ENCE OF ANY INCRIMINATING MATERIAL, NO ADDITION COULD BE MADE F OR NON-ABATED ASSESSMENT YEAR. IN THE INSTANT CASE, WE FOUND THAT THE ADDITION IS NOT BASED UPON ANY INCRIMINATING MATERIAL AND THE ASSES SMENT YEAR IS ONE IN RESPECT OF WHICH NO ASSESSMENT PROCEEDINGS WAS PEND ING ON THE DATE OF SEARCH. ACCORDINGLY, ON THIS LEGAL ASPECT ALONE, WE ALLOW THE APPEAL OF THE ASSESSEE ON THIS GROUND FOR THE ASSESSMENT YEARS 20 05-06 TO 2007-08. GROUND NO. 4(A), 4(B) & 4(C) (FOR A.Y. 2006-07, A.Y . 2007-08 AND A.Y. 2008-09) 26. THESE GROUNDS OF APPEAL FOR THE THREE ASSESSMEN T YEARS ARE COMMON AND ARE DIRECTED AGAINST THE ACTION OF THE L D. CIT(A) IN UPHOLDING THE AOS ACTION IN MAKING ADDITIONS ON ACCOUNT OF U NEXPLAINED INVESTMENT IN CONSTRUCTION OF HOUSE AT E-17, SAKET NAGAR, INDORE, ON THE BASIS OF DVOS REPORT. 27. SHORT FACTS OF THE ISSUE ARE THAT DURING THE CO URSE OF THE ASSESSMENT PROCEEDINGS, THE AO NOTED THAT THE ASSESSEE AND HIS WIFE SMT. ARCHANA CHITRESH MEHTA SS 228 OF 2015 AND OTHERS 25 MEHTA HAD PURCHASED ONE RESIDENTIAL HOUSE AT E-17, SAKET NAGAR, INDORE IN EQUAL OWNERSHIP ON 26-06-2004. ACCORDING TO THE AO, THE RENOVATION IN THE HOUSE WAS DONE IN F.Y. 2005-06 TO F.Y. 2007-08 AND A REFERENCE FOR DETERMINING THE COST OF RENOVATION WAS REFERRED TO THE DVO UNDER S.142A OF THE ACT. THE AO PRODUCED A TABLE IN THE ASSESSME NT ORDER IN WHICH THE DETAILS OF EXPENSES ON RENOVATION SHOWN BY THE ASSE SSEE AND AS VALUED BY THE DVO HAVE BEEN DEPICTED AS UNDER : RENOVATION DURING THE F.Y. RENOVATION COST AS SHOWN BY THE ASSESSEE RENOVATION COST AS PER VALUATION REPORT DIFFERENCE 2005-06 3,05,232 20,95,520 17,90,288 2006-07 2,41,867 16,60,498 14,18,631 2007-08 36,941 2,53,612 2,16,671 THE AO FURTHER NOTED THAT THE ASSESSEE DID NOT PROV IDE THE DETAILS OF EXPENDITURE INCURRED BY HIM DURING F.Y. 2005-06 TO F.Y. 2007-08. THE AO OBSERVED THAT THE ASSISTANT VALUATION OFFICER IS TH E COMPETENT AUTHORITY OF THE GOVERNMENT OF INDIA AND A TECHNICAL EXPERT T O DETERMINE THE COST OF CONSTRUCTION/ RENOVATION. THE AO OVERRULED THE C ONTENTION OF THE ASSESSEE THAT THE MAJOR RENOVATION WAS MADE BY HIM DURING THE F.Y. 2010-11. THE AO HELD THAT THE AVO IS A COMPETENT PE RSON TO DETERMINE THE ACTUAL EXPENDITURE INCURRED IN EACH YEAR. THE A O ALSO OBSERVED THAT CHITRESH MEHTA SS 228 OF 2015 AND OTHERS 26 THE ASSESSEE HAD DECLARED UNDISCLOSED INCOME OF RS. 30 LAKHS IN HIS STATEMENT U/S. 132(4) RECORDED DURING THE COURSE OF SEARCH FOR A.Y. 2011- 12 ON THE BASIS OF LPS-2 WHICH IS AN ESTIMATE OF TH E CONTRACTOR DATED 16- 04-2010. ACCORDING TO THE AO, IT WAS QUITE POSSIBLE THAT THE ASSESSEE HAD INCURRED THE EXPENDITURE MUCH MORE THAN REFLECTED I N BALANCE SHEET FOR A.Y. 2006-07 TO A.Y. 2008-09. FINALLY, THE AO ACCEP TING THE COST OF RENOVATION VALUED BY THE AVO, MADE ADDITIONS OF RS. 17,90,288/-, RS.14,18,631/- AND RS.2,16,671/- RESPECTIVELY FOR A .Y. 2006-07, A.Y. 2007- 08 AND A.Y. 2008-09 UNDER S.69B OF THE ACT. 28. MATTER CARRIED TO LD. CIT(A), WHO UPHELD THE AD DITION MADE BY THE AO. THE LD. CIT(A) OBSERVED THAT AS PER THE VALUATI ON REPORT OF DVO DATED 18-03-2013, THE TOTAL COST OF CONSTRUCTION OF THE B UNGALOW WAS DETERMINED AT RS.50,66,329/- AS AGAINST RS.7,37,938 /- JOINTLY SHOWN BY THE ASSESSEE AND HIS WIFE DURING F.Y. 2005-06 TO F. Y. 2007-08. ACCORDING TO THE CIT(A), THE ASSESSEE FAILED TO PRODUCE BEFOR E DVO OR BEFORE AO OR BEFORE HIM ANY BILLS FOR CONSTRUCTION EVEN FOR THE COST OF RS.7,37,938/- DEBITED IN THE BOOKS AND ALSO FAILED TO PRODUCE STR UCTURAL DRAWING/ ARCHITECTURAL DRAWING OR ANY PROOF THAT THE CONSTRU CTION OF HOUSE WAS DONE IN ANY YEAR OTHER THAN A.Y. 2006-07 TO A.Y. 20 08-09. ACCORDING TO CHITRESH MEHTA SS 228 OF 2015 AND OTHERS 27 THE CIT(A), THE ESTIMATE OF THE CONTRACTOR DATED 16 -04-2010 WAS IN RESPECT OF RENOVATION OF THE HOUSE AND NOT IN RESPE CT OF CONSTRUCTION OF ANY BUNGALOW. THUS, THE CIT(A) HELD THAT THE NEW BU NGALOW WAS CONSTRUCTED IN THREE YEARS FROM A.Y. 2006-07 TO A.Y . 2008-09. FINALLY, THE LD. CIT(A) CONFIRMED THE ADDITIONS FOR VARIOUS YEAR S MADE BY THE AO. 29. THE LD. AR FOR THE ASSESSEE HAS MADE ORAL AS WE LL AS WRITTEN SUBMISSION AS UNDER: 1. A SEARCH WAS INITIATED U/S. 132 ON 25-11-2010. 2. ADDITIONS HAVE BEEN MADE BY THE AO ON ACCOUNT OF UNEXPLAINED INVESTMENT IN CONSTRUCTION OF HOUSE AT E-17, SAKET NAGAR, INDORE, ON THE BASIS OF DVOS REPORT IN 3 ASSESSMENT YEARS IN THE CASE OF THE ASSESSEE, AS UNDER: 3. BRIEF SUMMARY OF ADDITIONS ASSESSME NT YEAR EXPENSES RECORDED BY ASSESSEE & HIS WIFE RENOVATION COST ESTIMATED BY DVO & AO DIFFERENCE (ADDITION) APPELLANT (RS.) SMT. ARCHANA MEHTA (RS.) TOTAL APPELLANT (RS.) SMT. ARCHANA MEHTA (RS.) TOTAL APPELLANT (RS.) SMT. ARCHANA MEHTA (RS.) TOTAL 2006 - 07 3,05,232 64,200 3,69,432 20,95,520 4,40,755 25,36,275 17,90,288 3,76,555 21,66,843 2007 - 08 2,41,867 89,718 3,31,585 16,60,498 6,15,944 22,76,442 14,18,631 5,26,226 19,44,857 2008 - 09 36,941 -- 36,941 2,53,612 -- 2,53,612 2,16,671 -- 2,16,671 2011 - 12 30,00,000 -- 30,00,000 -- -- -- TOTAL 35,84,040 1,53,918 37,37,958 40,09,630 10,56,699 50,66,329 34,25,590 9,02,781 43,28,371 4. APPELLANT HAD PURCHASED THE SUBJECT HOUSE SITUAT ED AT E-17, SAKET NAGAR, INDORE, DURING THE FINANCIAL YEAR 2004-05, I .E. ON 20-06-2004, IN CO-OWNERSHIP WITH HIS WIFE SMT. ARCHANA MEHTA UNDER A REGISTERED SALE-DEED. THE HOUSE WAS PURCHASED FOR A CONSIDERAT ION OF ASSESSMENT YEAR AMOUNT IN RS. 2006-07 17,90,288 2007-08 14,18,631 2008-09 2,16,671 TOTAL 34,25,590 CHITRESH MEHTA SS 228 OF 2015 AND OTHERS 28 RS.41,00,000/- AND BOTH THE CO-OWNERS INCURRED A SU M OF RS. 4,27,674/- TOWARDS STAMP DUTY AND REGISTRATION CHAR GES OF THE SAID HOUSE. THUS, THE TOTAL COST OF PURCHASE OF THE HOUS E WORKED OUT AT RS.45,27,674/- OUT OF WHICH THE APPELLANT'S SHARE C AME OUT TO BE AT RS. 22,63,837/-. A COPY OF THE PURCHASE DEED OF THE HOUSE IS BEING PLACED ON PB PAGE NO. 32 TO 44. 5. SUBSEQUENT TO THE PURCHASE OF THE HOUSE, SOME RE NOVATION WORK THEREIN WAS CARRIED OUT BY BOTH THE CO-OWNERS. THE RENOVATION WORK WAS COMMENCED DURING THE FINANCIAL YEAR 2005-06 [A. Y. 2006-07] AND GOT FINALLY FINISHED DURING THE FINANCIAL YEAR 2009 -10 [A.Y. 2010-11]. IN THE SAID RENOVATION, THE APPELLANT AND HIS WIFE SMT . ARCHANA MEHTA, THE CO-OWNER, JOINTLY INCURRED A SUM OF RS.37,37,95 8/- IN VARIOUS YEARS AS PER DETAILS GIVEN IN THE TABLE BELOW: FINANCIAL YEAR ASSESSMENT YEAR EXPENSES INCURRED BY TOTAL EXPENSES APPELLANT (RS.) SMT. ARCHANA MEHTA (RS.) 2005-06 2006-07 3,05,232 64,200 3,69,432 2006-07 2007-08 2,41,867 89,718 3,31,585 2007-08 2008-09 36,941 -- 36,941 2010-11 2011-12 30,00,000 -- 30,00,000 TOTAL 35,84,040 1,53,918 37,37,958 6. THE INVESTMENT IN PURCHASE OF THE SAID HOUSE AS WELL AS THE INVESTMENT IN RENOVATION OF THE SAID HOUSE UP TILL FINANCIAL YEAR 2007- 08 [A.Y. 2008-09] WAS DULY MADE BY THE APPELLANT AN D HIS WIFE OUT OF THEIR REGULAR SOURCES OF INCOME. FURTHER, THE FACTU M OF SUCH INVESTMENTS AS WELL AS SOURCES THEREOF WERE DULY SH OWN BY THE APPELLANT AND HIS WIFE SMT. ARCHANA MEHTA RESPECTIV ELY IN THEIR REGULAR RETURNS OF INCOME FURNISHED UNDER S. 139 OF THE ACT. HOWEVER, THE MAJOR INVESTMENT IN THE RENOVATION I.E. OF RS.3 0,00,000/- WAS MADE DURING THE FINANCIAL YEAR 2010-11 RELEVANT TO THE ASSESSMENT YEAR 2011-12 BY THE APPELLANT OUT OF HIS UNDISCLOSE D SOURCES OF INCOME. IT SHALL BE PERTINENT TO NOTE THAT DURING T HE COURSE OF THE SEARCH OPERATIONS, A LOOSE PAPER IN THE FORM OF AN ESTIMATE DATED 16-04-2010 GIVEN BY A CONTRACTOR SHRI UDAY SINGH RA WAT, FOR RENOVATION OF THE SUBJECT HOUSE FOR AN ESTIMATED CO ST OF RS.29,77,000/- WAS DULY FOUND AND INVENTORISED BY T HE SEARCH PARTY AS LPS-2 . A COPY OF THE SUBJECT LOOSE PAPER IS BEING PLACED ON PB PAGE NO. 45 TO 45 . 7. IN THE APPELLANT'S CASE THE SEARCH UNDER S. 132( 1) WAS CONDUCTED ON 25-11-2010 AND BY THIS DATE THE ABOVE NAMED CONTRAC TOR HAD COMPLETED THE ENTIRE RENOVATION WORK AND SUCH FACT WAS DULY NOTED BY THE SEARCH PARTY THEMSELVES WHILE CARRYING OUT THE SEARCH OPERATIONS. CHITRESH MEHTA SS 228 OF 2015 AND OTHERS 29 SUCH FACT COUPLED WITH THE ABOVE SAID LOOSE PAPER W AS EVIDENCE BEFORE THE SEARCH PARTY THAT THE APPELLANT MADE SIZ ABLE INVESTMENT IN RENOVATION OF THE HOUSE DURING THE YEAR IN WHICH TH E SEARCH WAS CONDUCTED I.E. DURING F.Y. 2010-11. ACCORDINGLY, TH E APPELLANT, VIDE QUESTION NO.19 OF HIS STATEMENT RECORDED UNDER S. 1 32(4) OF THE ACT, WAS CONFRONTED WITH THE SAID LPS-2 AND IN REPLY TO THE QUESTION, THE APPELLANT ADMITTED THAT HE HAD GOT MAJOR RENOVATION WORK OF HIS HOUSE FROM SHRI UDAY SINGH RAWAT, CONTRACTOR, DURIN G THE FINANCIAL YEAR 2010-11 AND ALSO ADMITTED TO HAVE MADE AN INVE STMENT OF RS.30,00,000/- TOWARDS SUCH RENOVATION AS HIS UNEXP LAINED INCOME FOR THE FINANCIAL YEAR 2010-11 RELEVANT TO A.Y. 2011-12 . A COPY OF THE STATEMENT OF THE APPELLANT IS BEING PLACED ON PB PA GE NO. 46 TO 56. 8. ALTHOUGH, THE APPELLANT AND HIS WIFE SMT. ARCHAN A MEHTA, HAD SUO MOTO DISCLOSED THE ENTIRE COST ON RENOVATION OF THE SAID HOUSE ALONG WITH THE SOURCES THEREOF, AT RS.37,37,958/-, AS SHO WN IN THE TABLE ABOVE, DESPITE SUCH FACT, THE LEARNED AO CHOSE TO R EFER THE VALUATION OF THE RENOVATION COST TO THE DVO. ACCORDINGLY, THE DVO MADE HIS REPORT ON 18-03-2013 BY DETERMINING THE TOTAL COST OF RENOVATION AT RS.50,66,329/- AS AGAINST THE SAME SHOWN BY THE APP ELLANT AND HIS WIFE SMT. ARCHANA MEHTA, JOINTLY, AT RS.37,37,958/- . A COPY OF THE DVO'S REPORT IS BEING PLACED ON PB PAGE NO 57 TO 66 . 9. ON A PERUSAL OF THE DVO'S REPORT AND ITS COMPARI SON WITH THE RENOVATION COST SHOWN BY THE APPELLANT AND HIS WIFE , AS DEPICTED IN THE TABLE ABOVE, IT MAY BE OBSERVED THAT BASICALLY THERE ARE TWO POINTS OF VARIATION BETWEEN THE DVO'S VALUATION AND THE AP PELLANT'S CLAIM. THE FIRST VARIATION IS AS REGARD TO THE PERIOD OF R ENOVATION INASMUCH ACCORDING TO THE DVO'S ESTIMATION THE RENOVATION WOR K WAS CARRIED OUT ONLY DURING THE PERIOD FROM THE FINANCIAL YEAR 2005-06 TO THE FINANCIAL YEAR 2007-08 WHEREAS ACCORDING TO THE APP ELLANT'S CLAIM, WHICH ALSO GETS FORTIFIED FROM THE LOOSE PAPERS AND OTHER ATTENDING CIRCUMSTANCES FOUND DURING THE COURSE OF SEARCH, TH E RENOVATION WORK LASTED TILL FINANCIAL YEAR 2010-11 . THE SECOND POINT OF VALUATION IS AS REGARD TO THE ESTIMATION OF THE RENOVATION CO ST. THE DVO ESTIMATED THE TOTAL RENOVATION COST AT RS. 50,66,329/- AS AGAINST THE SAME CLAIMED BY THE APPELLANT AND THE CO-OWNER TO B E AT RS. 37,37,958/- . 10. THE LEARNED AO AFTER MAKING ESTIMATION OF THE R ENOVATION COST OF THE HOUSE AT RS.50,66,329/- AND BY ESTIMATING THE PERIO D OF RENOVATION ONLY FROM F.Y. 2005-06 TO F.Y. 2007-08, ALLOCATED A ND APPROPRIATED THE COST OF RENOVATION IN THE HANDS OF THE APPELLANT AN D HIS WIFE SMT. ARCHANA MEHTA, IN THREE YEARS, IN THE SAME PROPORTI ON IN WHICH THE INCURRENCE OF COST OF RENOVATION WAS CLAIMED BY THE M IN THESE THREE YEARS. ACCORDINGLY, FOR THE ASSESSMENT YEAR UNDER C ONSIDERATION, THE ESTIMATED COST OF RENOVATION, AS PER THE DVO, WORKE D OUT AT CHITRESH MEHTA SS 228 OF 2015 AND OTHERS 30 RS.20,95,520/- , AS AGAINST THE SAME SHOWN BY THE APPELLANT IN HIS STATEMENT OF AFFAIRS FOR THE RELEVANT YEAR AT RS.3,05,232/- THEREBY RESULTING IN A DIFFERENCE OF RS.17,90,288/- WHICH BECAME SUBJECT MATTER OF THE IMPUGNED ADDITION. 11. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS , THE APPELLANT WAS PROVIDED WITH A COPY OF THE DVO'S REPORT FOR HIS CO MMENTS. ACCORDINGLY, THE APPELLANT, VIDE HIS COUNSEL'S LETT ER DATED 25-03-2013 [KINDLY REFER PB PAGE NO.29 TO 31]. 12. IN NUTSHELL, THE VARIOUS DEFECTS IN THE DVO'S R EPORT CAN BE SUMMARIZED AS UNDER: I) THE DVO, ON GUESS WORK, ESTIMATED THE PERIOD OF RENOVATION FROM THE FINANCIAL YEAR 2005-06 TO FINANCIAL YEAR 2007-08 ON LY WITHOUT ANY MATERIAL OR BASIS OR ANY COGENT EVIDENCE AVAILABLE WITH HIM. THE DVO'S ESTIMATION WAS PURELY BASED UPO N THE YEAR AND THE COST OF RENOVATION SHOWN BY THE APPELL ANT AND HIS WIFE IN THEIR REGULAR RETURNS OF INCOME FURNISHED P RIOR TO THE SEARCH. HOWEVER, FROM THE MATERIAL PARTICULARLY FRO M THE LOOSE PAPER INVENTORIZED AS LPS-2 [PB PAGE NO. 45], IT IS EVIDENT BEYOND ALL DOUBTS THAT THE RENOVATION WORK GOT COMP LETED DURING THE FINANCIAL YEAR 2010-11 ONLY. II) DUE TO NON-CONSIDERATION OF THE FINANCIAL YEAR 2010-11 AS THE CONCLUDING YEAR OF RENOVATION WORK AND NON-CONSIDER ATION OF THE RENOVATION COST OF RS.30,00,000/- SHOWN BY THE APPELLANT FOR F.Y. 2010-11, THE PROPORTIONATE BREAK-UP OF THE ESTIMATED RENOVATION COST BY THE DVO HAS GOT INCREASED SUBSTA NTIALLY FOR F.Y. 2005-06 [A.Y. 2006-07], F.Y. 2006-07 [A.Y. 200 7-08] AND F.Y. 2007-08 [A.Y. 2008-09]. III) THE DVO HAS MADE THE ESTIMATION ON THE BASIS OF CPWD RATES WHEREAS THE APPELLANT WAS REQUIRED TO INCUR THE EXP ENDITURE AS PER THE ACTUAL BILL AND QUOTATION WHICH WAS RECEIVE D BY HIM FROM THE CONTRACTORS WHO EXECUTED THE WORK. IT IS S UBMITTED THAT NEITHER THE DVO NOR THE AO HAS CONTRAVENED OR REBUTTED THE GENUINENESS OF THE LPS-2 IN WHICH THE RATES AND SPECIFICATIONS OF THE MATERIALS USED FOR MAJOR RENO VATION WORK HAVE BEEN STATED. IT SHALL BE APPRECIATED THAT VERA CITY AND RELIABILITY OF AN ACTUAL UN-CONTRAVENED TRANSACTION WOULD ALWAYS PREVAIL OVER AN OPINION OF DVO WHICH IS MERE LY AN ART AND NOT A DEFINITE SCIENCE. IV) THE DVO, WHILE FRAMING HIS REPORT, HAS NOT TAKE N INTO CONSIDERATION THE APPELLANT'S CONTENTION THAT THE ACTUAL AREA OF THE GROUND FLOOR OF THE HOUSE, AT THE TIME OF PU RCHASE, WAS OF 154.43 SQ. MTRS. AND NOT OF 92 SQ. MTRS . V) THE DVO HAS ESTIMATED THE COST OF RENOVATION AT QUITE A HIGHER SIDE WITHOUT CONSIDERING THE MATERIAL FACT THAT THE APPELLANT PROCURED THE MATERIAL FROM THE LOCAL CONTRACTOR AND THE ENTIRE CHITRESH MEHTA SS 228 OF 2015 AND OTHERS 31 RENOVATION WORK WAS CARRIED OUT UNDER SUPERVISION O F THE CO- OWNERS ONLY THEREBY RESULTING IN A SUBSTANTIAL COST SAVING. 13. THE LEARNED AO WITHOUT CONSIDERING THE EXPLANAT ION AND COMMENT OF THE APPELLANT ON THE DVO'S REPORT, MADE THE IMPUGNE D ADDITION MERELY ON THE BASIS OF THE VALUATION REPORT OF THE DVO. IT IS A SETTLED LAW THAT WHEN A REPORT BY THE DVO HAS BEEN SUFFERIN G FROM VARIOUS INFIRMITIES AND GLARING MISTAKES, THE ASSESSING OFF ICER CANNOT MAKE ASSESSMENT ON THE BASIS OF SUCH VALUATION. RELIANCE IS PLACED ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS: I) PAUL JOHN VS. CIT(A) & ANR. (1995) 215 ITR 92 (K ER.) II) CIT VS. MEERUT CEMENT CO. (P) LTD. (2006) 202 C TR (ALL.) 506 30. THE LD. DR RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. 31. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF BOT H THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON THE FILE. WE FIND THAT IN THE INSTANT CASE, BASICALLY THERE ARE TWO POINTS OF DIFFERENCES BETWEEN THE ASSESSEE AND THE ASSESSING OFFICER. ACCORDING TO THE ASSESSI NG OFFICER, THE RENOVATION/CONSTRUCTION WORK WAS DONE FROM F.Y. 200 5-06 TO 2007-08 ONLY WHEREAS AS PER THE ASSESSEE, THE RENOVATION WO RK GOT COMPLETED DURING F.Y. 2010-11. THE SECOND POINT OF DIFFERENCE IS AS REGARD TO THE COST OF CONSTRUCTION/RENOVATION. AS PER THE DVO AND ASSESSING OFFICER, THE ASSESSEE AND HIS WIFE HAVE JOINTLY INCURRED A S UM OF RS.50,66,329/- TOWARDS RENOVATION/CONSTRUCTION OF THE HOUSE WHEREA S ACCORDING TO THE ASSESSEE, THE TOTAL COST OF RENOVATION INCURRED WAS RS.37,37,958/- ONLY. WE FIND THAT DURING THE COURSE OF SEARCH, ONE LPS I NVENTORISED AS LPS-2 IN CHITRESH MEHTA SS 228 OF 2015 AND OTHERS 32 THE FORM OF ONE ESTIMATE OF CONTRACTOR MR. UDAY SIN GH DATED 16.4.2010 FOR A SUM OF RS.29,77,000/-WAS FOUND AND WHEN DURIN G THE COURSE OF RECORDING THE STATEMENT UNDER SEC. 132(4), THE ASSE SSEE WAS CONFRONTED WITH SUCH ESTIMATE, THE ASSESSEE ADMITTED THAT HE H AD ACTUALLY MADE AN INVESTMENT OF RS.30 LACS DURING THE F.Y. 2010-11 RE LEVANT TO ASSESSMENT YEAR 2011-12 IN RENOVATION OF HIS HOUSE SITUATED AT E-17, SAKET NAGAR, INDORE. WE FIND THAT SUBSEQUENTLY, THE ASSESSEE IN HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2011-12, FILED POST SEARCH, HAD DISCLOSED AN INCOME OF RS.1,62,94,946/-. WE FIND THAT THE BREAK- UP OF SUCH ADDITIONAL INCOME IS PLACED AT PAGE NO.21 OF THE PAPER BOOK FO R THE ASSESSMENT YEAR 2011-12 AND AS PER SUCH BREAK-UP, A SUM OF RS.30 LA CS HAS BEEN DECLARED BY THE ASSESSEE ON ACCOUNT OF RENOVATION OF THE HOU SE. SUCH BREAK-UP HAS ALSO BEEN GIVEN BY THE LD. CIT(A) IN HIS ORDER PASS ED FOR THE ASSESSMENT YEAR 2011-12 AT PARA 6, PAGE NO.28. WE FIND THAT SU CH ADDITIONAL INCOME HAS DULY BEEN ACCEPTED BY THE ASSESSING OFFICER HIM SELF. WE FIND THAT EXCEPT SUCH LOOSE PAPER AND THE STATEMENT OF THE AS SESSEE, THERE WAS NO OTHER MATERIAL AVAILABLE WITH THE ASSESSING OFFICER . IN OUR OPINION, IF THE REVENUE AUTHORITIES WERE NOT ACCEPTING THIS LOOSE P APER, THEN THERE WAS ABSOLUTELY NO JUSTIFICATION FOR MAKING ANY ADDITION ON THIS COUNT FOR THE CHITRESH MEHTA SS 228 OF 2015 AND OTHERS 33 REASON THAT THE ASSESSMENT YEARS IN RESPECT OF WHIC H THE ADDITION HAS BEEN MADE ARE COMPLETED ASSESSMENT YEARS FOR WHICH NO ADDITION COULD HAVE BEEN MADE IN ABSENCE OF ANY INCRIMINATING MATE RIAL. IN SUCH A SITUATION, THERE COULD NOT HAVE BEEN ANY OCCASION O R JUSTIFICATION FOR THE ASSESSING OFFICER EVEN TO MAKE ANY REFERENCE TO THE DVO U/S 142A OF THE ACT. WE FIND FORCE IN THE CONTENTION OF THE LD. AR OF THE ASSESSEE THAT DURING THE COURSE OF SEARCH PROCEEDINGS, WHICH WERE CARRIED OUT ON 25.11.2010, THE SEARCH PARTY HAD FOUND THE ESTIMATE OF THE CONTRACTOR AND HAD ALSO FOUND SOME LEFT OUT MATERIALS AND BASE D UPON SUCH ESTIMATE OF THE CONTRACTOR ONLY, THE ASSESSEE WAS GRILLED RE SULTING INTO SURRENDER OF INCOME OF RS.30 LACS BY THE ASSESSEE. WE FIND THAT SUBSEQUENTLY, THE ASSESSEE HAS SURRENDERED SUCH INCOME IN HIS RETURN AND THE SAME WAS ALSO ACCEPTED AND ASSESSED BY THE ASSESSING OFFICER . IN SUCH CIRCUMSTANCES, IN OUR VIEW, THE ASSESSING OFFICER C OULD NOT BLOW HOT BLOW COLD AND COULD NOT BRUSH ASIDE THE YEAR OF CONSTRUC TION/RENOVATION, WHICH OBVIOUSLY WAS F.Y. 2010-11 AS CLAIMED BY THE ASSESSEE. IN SUCH CIRCUMSTANCES, WE FIND NO JUSTIFICATION IN NOT ACCE PTING THE ASSESSEES CLAIM THAT THE CONSTRUCTION/RENOVATION WORK LASTED FROM F.Y. 2005-06 TO F.Y. 2010-11. ACCORDINGLY, IN OUR VIEW, WHILE DETER MINING THE UNEXPLAINED CHITRESH MEHTA SS 228 OF 2015 AND OTHERS 34 AMOUNT OF INVESTMENT, THE CREDIT AS REGARD TO THE I NCOME OF RS.30 LACS SURRENDERED BY THE ASSESSEE ON THIS COUNT DESERVES TO BE GIVEN TO THE ASSESSEE. ONCE SUCH CREDIT IS GIVEN, THERE WOULD RE MAIN DIFFERENCE OF A SUM OF RS.13,28,371/- ONLY BETWEEN THE VALUATION OF THE COST OF CONSTRUCTION/RENOVATION DETERMINED BY THE DVO AND T HAT SHOWN JOINTLY BY THE ASSESSEE AND HIS WIFE I.E. RS.50,66,329/- DE TERMINED BY THE DVO AND RS.37,37,958/- SHOWN JOINTLY BY THE ASSESSEE AN D HIS WIFE SMT. ARCHANA MEHTA. 31.1 AS REGARDS TO DIFFERENCE OF RS.13,28,371/-, W E FIND SOME MERIT IN THE CONTENTION OF THE LD. AR OF THE ASSESS EE THAT THE DVO HAS ADOPTED THE CPWD RATE AND HAS NOT TAKEN INTO CONSID ERATION THAT THE CONSTRUCTION WAS MADE BY THE ASSESSEE IN HIS OWN SU PERVISION THEREBY RESULTING IN SOME SAVING. CONSIDERING THESE ASPECTS , WE RESTRICT THE ADDITION ON THIS COUNT TO RS.10 LACS WHICH SHALL BE MADE IN DIFFERENT ASSESSMENT YEARS IN THE HANDS OF THE ASSESSEE AND H IS WIFE SMT. ARCHANA MEHTA IN THE SAME RATIO IN WHICH THEY HAVE DECLARED THE INVESTMENT. ACCORDINGLY, THESE GROUND NOS. 4(A), 4(B) AND 4(C) OF THE ASSESSEE FOR THE ASSESSMENT YEARS 2006-07 TO 2008-09 ARE PARTLY ALLO WED. CHITRESH MEHTA SS 228 OF 2015 AND OTHERS 35 GROUND NO. 6 IN APPEAL NOS. IT(SS)A NOS. 229 & 230/ IND/2015 (FOR A.Y. 2006-07 AND A.Y. 2007-08), GROUND NO. 5 IN APP EAL NO. IT(SS)A NO.231/IND/2015 (FOR A.Y. 2008-09) AND GROUND NO. 3 IN APPEAL NO. IT(SS)A NO. 232/IND/2015 (FOR A.Y. 2010-11) 32. THESE GROUNDS OF APPEAL FOR ALL FOUR ASSESSMENT YEARS ARE COMMON AND ARE DIRECTED AGAINST THE ACTION OF THE LD. CIT( A) IN CONFIRMING THE ADDITION MADE BY THE AO, IN THE ASSESSEE INCOME ON ACCOUNT OF LOW HOUSEHOLD WITHDRAWALS. 33. SHORT FACTS OF THE ISSUE ARE THAT DURING THE CO URSE OF THE ASSESSMENT PROCEEDINGS, FROM THE PERUSAL OF THE CAPITAL ACCOUN T FOR VARIOUS ASSESSMENT YEARS, THE AO NOTED THAT THE ASSESSEE HA D SHOWN TO HAVE MADE MEAGER WITHDRAWALS IN COMPARISON TO THE INCOME EARNED. THE AO OBSERVED THAT LOOKING TO THE RATE OF INFLATION, HIG H STANDARD OF LIVING AND SOCIAL STATUS OF THE FAMILY OF THE ASSESSEE, THE EX PENDITURE ON HOUSEHOLD ARTICLES SHOWN BY THE ASSESSEE IS VERY LESS. ACCORD INGLY, THE AO MADE ADDITIONS OF RS.31,999/-, RS.65,000/-, RS.88,676/- AND RS.1,55,826/- RESPECTIVELY FOR A.Y. 2006-07, A.Y. 2007-08, A.Y. 2 008-09 AND A.Y. 2010- 11. CHITRESH MEHTA SS 228 OF 2015 AND OTHERS 36 34. MATTER CARRIED TO LD. CIT(A), WHO UPHELD THE AD DITION MADE BY THE AO. THE CIT(A) NOTED THAT THE FAMILY OF THE ASSESSE E WAS CONSISTING OF THE ASSESSEE HIMSELF, HIS WIFE SMT. ARCHANA MEHTA, HIS BROTHER SHRI SHAILESH MEHTA, WIFE OF HIS BROTHER SMT. BHARTI MEHTA AND CH ILDREN. THE CIT(A) OBSERVED THAT THE ASSESSEE WAS ASKED TO EXPLAIN THE REASON FOR LOW HOUSEHOLD WITHDRAWALS BUT THE ASSESSEE FAILED TO FU RNISH THE AMOUNT OF ITEM-WISE EXPENSES INCURRED ON FOOD, VEGETABLE, FRU ITS, MILK, MEDICINE, CLOTH, FURNITURE, SHOES, ELECTRONIC GADGETS, EDUCAT ION, MOBILE EXPENSES, ELECTRIC BILLS, TRIPS, ETC. THE CIT(A) ALSO OBSERVE D THAT THE ASSESSEES FAMILY IS AN AFFLUENT BUSINESS FAMILY AND THEREFORE, HOUSE HOLD EXPENSES SHOWN IN DIFFERENT YEARS ARE QUITE ON A LOWER SIDE. ACCOR DINGLY, THE CIT(A) CONFIRMED THE ADDITION FOR ALL FOUR YEARS MADE BY T HE AO ON ACCOUNT OF LOW HOUSEHOLD WITHDRAWALS. 35. THE LD. AR FOR THE ASSESSEE PLACED RELIANCE ON HIS WRITTEN SUBMISSION MADE BEFORE THE LD. CIT(A) WHICH IS PLAC ED AT PAGE NO. 13 TO 15 OF THE PAPER BOOK FOR A.Y. 2006-07. IT WAS FURTH ER SUBMITTED THAT FOR THE ASSESSMENT YEARS 2006-07 TO 2008-09, BEING NON- ABATED ASSESSMENT YEARS, NO ADDITION COULD HAVE BEEN MADE WITHOUT HAV ING RECOURSE TO ANY INCRIMINATING MATERIAL AND IN THE INSTANT CASE, THE AO HAS MADE THE CHITRESH MEHTA SS 228 OF 2015 AND OTHERS 37 ADDITION MERELY ON HIS OWN ASSUMPTIONS AND FOR THE IRRELEVANT CONSIDERATIONS WITHOUT HAVING ANY OTHER EVIDENCE ON RECORD, THEREFORE, THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF KABUL CHAWLA AND DECISION OF THIS HONBLE BENCH IN THE CASE OF K ALANI BROS. AND OTHERS WILL BE APPLICABLE. 36. THE LD. DR RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. 37. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF BOT H THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON THE FILE. WE ARE OF THE VIEW THAT WE HAVE ALREADY GIVEN OUR FINDING ABOVE THAT IN ABS ENCE OF ANY INCRIMINATING MATERIAL, NO ADDITION COULD BE MADE F OR NON-ABATED ASSESSMENT YEARS. IN THE INSTANT CASE, WE FOUND THA T FOR THE ASSESSMENT YEARS 2006-07 TO 2008-09, THE ADDITION IS NOT BASED UPON ANY INCRIMINATING MATERIAL AND THESE ASSESSMENT YEARS A RE THOSE IN RESPECT OF WHICH NO ASSESSMENT PROCEEDINGS WAS PENDING ON THE DATE OF SEARCH. ACCORDINGLY, ON THIS LEGAL ASPECT ALONE, WE ALLOW T HE APPEALS OF THE ASSESSEE FOR ALL THREE ASSESSMENT YEARS ON THIS GRO UND. FOR ASSESSMENT YEAR 2010-11, FOLLOWING OUR OWN FINDINGS GIVEN IN T HE CASE OF SHRI SHAILESH MEHTA & OTHERS, IN APPEAL NOS. IT(SS)A NOS. 13 TO 1 7/IND/2015, IT(SS)A NOS.19TO 21/IND/2015 AND IT(SS)A NOS.7 TO 12/IND/20 15, VIDE OUR CHITRESH MEHTA SS 228 OF 2015 AND OTHERS 38 COMMON ORDER DATED 22.9.2016, WE RESTRICT THE ADDIT IONS MADE TOWARDS HOUSEHOLD EXPENSES TO 50% OF THAT MADE BY THE ASSES SING OFFICER. WE ORDER ACCORDINGLY. GROUND NO. 2 (FOR A.Y. 2011-12) 38. THIS GROUND OF APPEAL IS DIRECTED AGAINST THE C IT(A)S ACTION OF CONFIRMING ADDITION OF RS.30,46,650/- OUT OF THE AD DITION OF RS.40,35,231/- MADE BY THE AO IN THE APPELLANTS IN COME ON ACCOUNT OF UNEXPLAINED JEWELLERY. 39. SHORT FACTS OF THE ISSUE ARE THAT DURING THE CO URSE OF THE ASSESSMENT PROCEEDINGS, THE AO NOTED THAT DURING THE COURSE OF SEARCH, CERTAIN JEWELLERIES WERE FOUND FROM THE BEDROOM OF THE ASSE SSEE AND FROM THE LOCKERS JOINTLY OWNED BY THE ASSESSEE AND HIS WIFE SMT. ARCHANA MEHTA. THE AO PRODUCED A TABLE IN THE ASSESSMENT ORDER IN WHICH THE DETAILS OF JEWELLERIES FOUND BY THE SEARCH PARTY HAVE BEEN GIV EN AS UNDER : GOLD VALUE DIAMOND VALUE SILVER VALUE TOTAL BEDROOM 1786.520 3124048/- 1234.150 3710046/- 17.09 5 641183/- 7475277/- LOCKER NO. 37, SBI, PATRAKAR COLONY INDORE 126.390 223350/- -- ---- 223350/- 7698627/- THE AO FURTHER OBSERVED THAT THE ASSESSEE HAD ADMIT TED UNDISCLOSED INVESTMENT IN JEWELLERIES IN HIS STATEMENT U/S. 132 (4) RECORDED DURING THE CHITRESH MEHTA SS 228 OF 2015 AND OTHERS 39 COURSE OF SEARCH FOR A.Y. 2011-12. THE AO ALSO NOTE D THAT THE ASSESSEE HAS DISCLOSED THE ADDITIONAL INCOME OF RS.37,10,046 /- AND RS.2,23,350/- RESPECTIVELY ON ACCOUNT OF UNEXPLAINED JEWELLERIES FOUND FROM RESIDENCE AND LOCKER IN HIS RETURN UNDER S.153A FILED POST SE ARCH. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE AO REQUIRED THE ASSESSEE TO FURNISH HIS EXPLANATION AS REGARD TO SOURCE OF JEWELLERY FO UND ALONG WITH DOCUMENTARY EVIDENCES. IN RESPONSE, THE ASSESSEE FI LED HIS SUBMISSION WHICH ACCORDING TO THE AO WAS NOT JUSTIFIABLE. ACCO RDING TO THE AO, IT CANNOT BE BELIEVED THAT JEWELLERIES OF ALL THE FAMI LY MEMBERS WERE KEPT IN THE BEDROOM AND LOCKER OF THE ASSESSEE. ACCORDIN G TO THE AO, THE ASSESSEE HAS KEPT ON CHANGING HIS STATEMENT AS REGA RD TO ISSUE OF SOURCE AND OWNERSHIP OF DIAMOND JEWELLERY. THE AO FURTHER OBSERVED THAT THE ASSESSEE COULD NOT SUBMIT THE IDENTIFICATION/ BELON GINGNESS DETAILS OF THE JEWELLERIES FOUND. THE AO NOTED THAT THE ASSESSEE F AILED TO SUBSTANTIATE THE JEWELLERIES RECEIVED BY FAMILY MEMBERS BY WAY O F INHERITANCE, GIFT, STRIDHAN ETC. THROUGH COGENT EVIDENCE. FINALLY, THE AO BY RELYING UPON CERTAIN JUDICIAL AUTHORITIES MADE THE ADDITION OF R S.40,35,231/- UNDER S.69A ON ACCOUNT OF UNDISCLOSED INVESTMENT IN JEWEL LERIES. CHITRESH MEHTA SS 228 OF 2015 AND OTHERS 40 40. MATTER CARRIED TO LD. CIT(A), WHO OBSERVED THAT THE ASSESSEE, WHILE RECORDING STATEMENT U/S. 132(4) OF THE ACT BEFORE T HE SEARCH PARTY, ADMITTED AN UNDISCLOSED INVESTMENT OF RS.67,10,046/ - IN JEWELLERIES WHICH WAS SUBSEQUENTLY REDUCED IN THE RETURN OF INC OME FURNISHED U/S. 153A AT RS.39,33,396/- INCLUDING DIAMOND JEWELLERY OF RS.37,10,046/- AND JEWELLERY FOUND IN LOCKER OF RS.2,23,350/-. ACCORDI NG TO THE CIT(A), NEITHER DURING THE SEARCH NOR DURING THE COURSE OF ASSESSME NT PROCEEDINGS, ANY ITEM WISE IDENTIFICATION OF JEWELLERY PERTAINING TO THE LADIES WAS MADE BY THE ASSESSEE AND THEREFORE, THE ASSESSEE FAILED TO MAKE A VALID RETRACTION OF HIS STATEMENT U/S. 132(4) OF THE ACT WHEREIN GOL D JEWELLERY BELONGING TO THE WIFE OF THE ASSESSEE IN RESPECT OF WHICH RS. 30 LAKHS WAS ADMITTED BY THE ASSESSEE. ACCORDINGLY, THE CIT(A) MAINTAINED THE ADDITION AT RS.30,00,000/- WHICH WAS ADMITTED BY THE ASSESSEE D URING THE COURSE OF GIVING STATEMENT UNDER S.132(4) IN RESPECT OF JEWEL LERIES WHICH MIGHT HAVE BEEN FOUND IN THE LOCKER NO. 37 MAINTAINED WIT H STATE BANK OF INDIA. HOWEVER, THE CIT(A) DELETED THE REMAINING ADDITION OF RS.9,88,581/- BY HOLDING THE SAME TO BE EXPLAINED BY WAY OF STRIDHAN AND GIFTS. 41. THE LD. AR FOR THE ASSESSEE HAS MADE ORAL AS WE LL AS WRITTEN SUBMISSION AS UNDER: CHITRESH MEHTA SS 228 OF 2015 AND OTHERS 41 ON A PERUSAL OF THE COMPUTATION OF TOTAL INCOME OF THE APPELLANT PLACED AT PAGE NO. 17 OF THE PAPER BOOK FOR A.Y. 2011-12, IT MAY BE OBSERVED THAT THE APPELLANT HAD DECLARED AN ADDITIONAL INCOME OF RS.1 ,62,94,646/-. THE BREAK- UP OF SUCH INCOME IS GIVEN AT PAGE NO. 21 OF THE PA PER BOOK. ON A PERUSAL OF THE BREAK-UP, IT MAY BE OBSERVED THAT THE APPELLANT HAS SHOWN AN INCOME OF RS.2,22,350/- IN RESPECT OF THE JEWELLERY FOUND IN LOCKER NO. 37 WITH STATE BANK OF INDIA. IT IS SUBMITTED THAT DURING THE COUR SE OF THE SEARCH, THE SEARCH PARTY ENQUIRED THAT HOW MUCH JEWELLERY WAS KEPT IN THE SAID LOCKER. THE APPELLANT UNDER A WRONG NOTION, STATED THAT JEWELLE RIES VALUE RS.30,00,000/- MIGHT HAVE BEEN KEPT IN SUCH LOCKER. IT IS SUBMITTE D THAT AT THE RELEVANT TIME, THE WIFE OF THE APPELLANT IN WHOSE NAME THE LOCKER STOOD, WAS SUFFERING FROM PARALYTICAL ATTACK AND THEREFORE, HE COULD NOT CONS ULT WITH HIS WIFE. HOWEVER, UPON OPERATION OF THE LOCKER, THE JEWELLERIES WERE RS.2,23,350/- ONLY WAS FOUND. IT IS SUBMITTED THAT SINCE THE JEWELLERIES W ORTH OF RS.30,00,000/- WAS NOT FOUND THERE CANNOT BE ANY PRESUMPTION AS REGARD TO UNEXPLAINED INVESTMENT TO THIS EXTEND. ACCORDINGLY, NO ADDITION CAN BE MADE. 42. THE LD. DR RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. 43. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF BOT H THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON THE FILE. WE FIND FORCE IN THE CONTENTION OF THE LD. AR OF THE ASSESSEE THAT DURIN G THE COURSE OF THE RECORDING OF STATEMENT U/S 132(4), THE ASSESSEE COU LD NOT BE EXPECTED TO HAVE EXACT ESTIMATION OF THE JEWELLERIES KEPT IN TH E LOCKER OF HIS WIFE WHEN IN THE GIVEN CIRCUMSTANCES, THE WIFE OF THE AS SESSEE BEING SUFFERING FROM NEURO DISEASE, THE ASSESSEE WAS NOT EVEN ABLE TO CONSULT HIS WIFE AND UNDER A WRONG NOTION, HE MADE THE STATEMENT. IN SUCH CIRCUMSTANCES, WHEN AT THE TIME OF OPERATION OF LOC KER, THE JEWELLERIES VALUTIN RS.2,23,350/- ONLY WERE FOUND AS AGAINST TH E ESTIMATED JEWELLERY CHITRESH MEHTA SS 228 OF 2015 AND OTHERS 42 OF RS.30 LACS, NO ADVERSE INFERENCE CAN BE DRAWN. I N OUR VIEW, AS PER THE PROVISIONS OF SEC. 69/69B OF THE ACT, AN ADDITION I N RESPECT OF UNEXPLAINED INVESTMENT CAN BE MADE ONLY TO THE EXTENT TO WHICH AN ASSESSEE IS FOUND TO HAVE ACTUALLY MADE SUCH UNEXPLAINED INVESTMENT A ND NOT IN RESPECT OF ANY HYPOTHETICAL OR NON-EXISTENT INVESTMENT. WE FIN D THAT IN RESPECT OF THE JEWELLERIES SO FOUND AT RS.2,23,350/-, THE ASSE SSEE HAS ALREADY DISCLOSED CORRESPONDING INCOME IN HIS RETURN OF INC OME FOR THE ASSESSMENT YEAR 2011-12 FILED POST SEARCH, NO FURTH ER ADDITION ON THIS COUNT MERELY ON THE BASIS OF STATEMENT U/S 132(4) W AS WARRANTED. ACCORDINGLY, THE GROUND NO.2 OF THE APPEAL OF THE A SSESSEE FOR THE ASSESSMENT YEAR 2011-12 IS ALLOWED. GROUND NO. 3 (FOR A.Y. 2011-12) 44. THIS GROUND OF APPEAL IS DIRECTED AGAINST THE C IT(A)S ACTION OF CONFIRMING ADDITION OF RS.1,25,000/- IN THE APPELLA NTS INCOME ON ACCOUNT OF UNEXPLAINED CASH FOUND DURING THE COURSE OF THE SEARCH. 45. SHORT FACTS OF THE ISSUE ARE THAT DURING THE CO URSE OF THE SEARCH, CASH AMOUNTING TO RS.11,52,550/- WAS FOUND FROM THE RESIDENCE OF THE ASSESSEE. DURING THE COURSE OF GIVING THE STATEMENT BEFORE THE SEARCH PARTY U/S. 132(4) OF THE ACT, THE ASSESSEE STATED T HAT OUT OF THE CASH OF CHITRESH MEHTA SS 228 OF 2015 AND OTHERS 43 RS.11,52,550/-, A SUM OF RS.1,25,000/- BELONGED TO HIS FATHER NAMELY SHRI SURENDRA MEHTA WHO IS SEPARATELY ASSESSED TO INCOME -TAX. FOR REMAINING CASH OF RS.10,27,550/-, THE ASSESSEE COULD NOT OFFE R ANY EXPLANATION AND THE SAME WAS OFFERED BY HIM AS HIS UNDISCLOSED INCO ME FOR A.Y. 2011-12. SUBSEQUENTLY, IN THE RETURN FILED, THE ASSESSEE HAD DULY DISCLOSED SUCH ADMITTED EXCESS CASH OF RS.10,27,550/- AS HIS ADDIT IONAL INCOME WHICH WAS PART AND PARCEL OF TOTAL UNDISCLOSED INCOME OF RS.1,62,94,946/-. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, FO R JUSTIFYING THE SOURCE OF REMAINING CASH OF RS.1,25,000/-, THE ASSE SSEE FILED AN AFFIDAVIT OF HIS FATHER SHRI SURENDRA KUMAR MEHTA ALONG WITH RETURN OF INCOME OF SUCH SHRI SURENDRA KUMAR MEHTA FOR A.Y. 2010-11 AN D A.Y. 2011-12. HOWEVER, THE AO DISBELIEVED THE AFFIDAVIT FILED BY THE ASSESSEES FATHER AND FOUND THAT CASH BOOK OR CASH FLOW STATEMENT AND BANK STATEMENT IN RESPECT OF SHRI SURENDRA KUMAR MEHTA WERE NOT PRODU CED. ACCORDINGLY, THE AO MADE AN ADDITION OF RS.1,25,000/- IN THE HAN DS OF THE ASSESSEE. 46. MATTER CARRIED TO LD. CIT(A), WHO UPHELD THE AD DITION OF RS.1,25,000/- ON THE GROUND THAT THE APPELLANT FAIL ED TO ESTABLISH THE SOURCE OF CASH IN THE HANDS OF HIS FATHER. CHITRESH MEHTA SS 228 OF 2015 AND OTHERS 44 47. THE LD. AR FOR THE ASSESSEE HAS MADE ORAL AS WE LL AS WRITTEN SUBMISSION AS UNDER: IN THIS CONTEXT, IT IS SUBMITTED AS UNDER: 1. THAT, AN ADDITION OF RS.1,25,000/- ON ACCOUNT OF UNEXPLAINED CASH FOUND DURING THE COURSE OF SEARCH HAS BEEN MADE BY THE LEARNED ASSESSING OFFICER MERELY ON CONJECTURES, SURMISES, GUESS-WORK AND PERSONAL WHIMS, WITHOUT CONSIDERING THE EXPLANATION OF THE APPELLANT AND FURTHER WITHOUT CONSIDERING THE MATERIAL FACT T HAT THE APPELLANT DULY DISCLOSED THE ENTIRE AMOUNT OF UNEXPLAINED CAS H IN THIS RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR FILED POST- SEARCH. 2. THAT, DURING THE COURSE OF THE SEARCH PROCEEDING S, THE CASH AMOUNTING TO RS.11,52,550/- WAS FOUND FROM THE RESIDENTIAL PR EMISES OF THE APPELLANT. DURING THE COURSE OF RECORDING THE STATE MENT UNDER SECTION 132(4) OF THE INCOME-TAX ACT, 1961, ON 25-11-2010, THE APPELLANT IN REPLY TO THE QUESTION NO. 5 HAD CATEGORICALLY STATE D THAT THE CASH AGGREGATING TO RS.11,52,550/- FOUND FROM THE RESIDE NTIAL PREMISES WAS BELONGING TO ALL THE FAMILY MEMBERS OF THE APPE LLANT. FURTHER, IN THE SAME STATEMENT, THE APPELLANT IN REPLY TO QUEST ION NO. 16 HAD STATED THAT OUT OF THE CASH AMOUNTING TO RS.11,52,5 50/-, CASH TO THE EXTENT OF RS.1,25,000/- WAS BELONGING TO HIS FATHER NAMELY SHRI SURENDRA KUMAR MEHTA. IT SHALL BE PERTINENT TO NOTE THAT DURING THE COURSE OF THE SEARCH, SUCH CASH AMOUNTING TO RS.1,2 5,000/- WAS FOUND FROM THE BED-ROOM OCCUPIED BY SHRI SURENDRA KUMAR M EHTA ONLY. 3. SINCE THE APPELLANT FOUND HIMSELF UNABLE TO SUBS TANTIATE THE SOURCES OF REMAINING CASH AMOUNTING TO RS.10,27,550/- WITH THE COGENT DOCUMENTARY EVIDENCES AND THEREFORE, THE APPELLANT AT PARA (27) OF THE STATEMENT RECORDED UNDER S. 132(4) ON 25-11-201 0 VOLUNTARILY CAME FORWARD TO SURRENDER THE ABOVE SAID CASH AS HI S ADDITIONAL INCOME FOR THE PREVIOUS YEAR RELEVANT TO THE ASSESS MENT YEAR 2011-12. THE APPELLANT, WHILE FURNISHING HIS RETURN OF INCOM E FOR THE ASSESSMENT YEAR 2011-12 HAS SHOWN AN ADDITIONAL INC OME OF RS.1,62,94,946/- WHICH COVERS THE UNEXPLAINED CASH AMOUNTING TO RS.10,27,550/- FOUND DURING THE COURSE OF SEARCH AS AFORESAID. 4. SHRI SURENDRA MEHTA, FATHER OF THE APPELLANT, IS HAVING INDEPENDENT SOURCES OF INCOME FOR THE LAST MANY YEARS AND HE IS REGULARLY ASSESSED TO INCOME-TAX UNDER PAN-AFBPM3584M WITH THE INCOME- TAX OFFICER- 1(2), INDORE. IN ORDER TO ESTABLISH THAT CASH AMOUN TING TO RS.1,25,000/-, AS FOUND FROM THE BEDROOM OF SHRI SURENDRA MEHTA WAS BELONGING TO HIM ONLY, THE APPELLANT HAD FURNISHED NECESSARY DOCUMENTARY EVIDENCES. A COPY O F EACH OF THE CHITRESH MEHTA SS 228 OF 2015 AND OTHERS 45 FOLLOWING DOCUMENTS, AS FURNISHED BEFORE THE LEARNE D AO AND CIT(A), ARE BEING SUBMITTED HEREWITH: I) A COPY OF AFFIDAVIT DULY SWORN-IN BEFORE NOTARY PUBLIC BY SHRI SURENDRA MEHTA. [ANNEXURE A-7.00] [PB PAGE NO. 48 & 49] II) A COPY OF COMPUTATION OF INCOME ALONG WITH ACKNOWLEDGEMENT OF RETURN OF SHRI SURENDRA MEHTA PE RTAINING TO A.Y. 2010-11 & A.Y. 2011-12. [ANNEXURE A-8.01 & A-8.02] [PB PAGE NO. 50 TO 55] III) A CASH FLOW STATEMENT PREPARED BY SHRI SURENDR A MEHTA FOR THE RELEVANT PERIOD SHOWING DATE-WISE AVAILABILITY OF CASH WITH HIM [ANNEXURE A-9.00] [PB PAGE NO. 56] IV) A COPY OF BANK STATEMENT OF SHRI SURENDRA MEHTA FOR THE RELEVANT PERIOD SHOWING CASH WITHDRAWALS AND CASH D EPOSITS MADE BY HIM [ANNEXURE A-10.00 [PB PAGE NO. 57 TO 58 ] ON A PERUSAL OF THE AFORESAID DOCUMENTS, IT SHALL B E APPRECIATED BY YOUR HONOURS THAT THE APPELLANT'S FATHER WAS ACTUAL LY HAVING CASH OF RS.1,25,000/- AS ON THE DATE ON WHICH IT WAS SEIZED FROM HIS BEDROOM AND THE SAME BELONGED TO HIM ONLY. THUS, THE SOURCE S OF AFORESAID CASH STANDS ESTABLISHED IN THE HANDS OF SHRI SUREND RA MEHTA AND THEREFORE, THE LEARNED AO MADE A FACTUAL ERROR IN T REATING THE AFORESAID CASH TO BE THAT OF THE APPELLANT. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, IT IS SUBMITTED THAT THE ADDITION OF RS.1,25,000/- SO MADE BY THE LEARNED AS SESSING OFFICER ON ACCOUNT OF UNEXPLAINED CASH DESERVES TO BE DELETED IN TOTO. 48. THE LD. DR RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. 49. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF BOT H THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON THE FILE. WE FIND THAT DURING THE COURSE OF SEARCH, THE IMPUGNED CASH OF RS.1,25,000/ - WAS FOUND FROM THE BEDROOM OF THE FATHER OF THE ASSESSEE NAMELY, SHRI SURENDRA KUMAR MEHTA, WHO WAS RESIDING WITH THE ASSESSEE ONLY. WE ALSO FIND THAT DURING CHITRESH MEHTA SS 228 OF 2015 AND OTHERS 46 THE COURSE OF GIVING STATEMENT U/S 132(4) ITSELF, T HE ASSESSEE HAD EXPLAINED THAT THE CASH AMOUNTING TO RS.1,25,000/- FOUND FROM SHRI SURENDRA KUMAR MEHTA WAS BELONGING TO HIM ONLY. WE FIND THAT SHRI SURENDRA KUMAR MEHTA IS SEPARATELY ASSESSED TO INCO ME TAX UNDER PAN AFBPM 3584 M AND FOR THE ASSESSMENT YEARS 2010-11 A ND 2011-012, SHRI SURENDRA KUMAR MEHTA HAS SHOWN TAXABLE INCOME OF RS .4,47,420/- AND RS.4,14,840/- RESPECTIVELY. WE FOUND THAT SHRI SURE NDRA KUMAR MEHTA HAD GIVEN AN AFFIDAVIT WHICH COULD NOT BE CONTROVER TED BY THE ASSESSING OFFICER. IN OUR VIEW, THE HOLDING OF MEAGER CASH BA LANCE OF RS.1,25,000/- IN THE HANDS OF AN ASSESSEE AGED NEARLY 70 YEARS WH O IS HAVING INDEPENDENT SOURCE OF INCOME IN LACS CANNOT BE DISB ELIEVED. ACCORDINGLY, WE FIND NO JUSTIFICATION IN THE ADDITION OF RS.1,25 ,000/- SO MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CASH. T HUS, GROUND NO.3 OF THE APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2011-12 IS ALLOWED. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE PAR TLY ALLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 08.12.20 16. SD/- SD/- (O.P. MEENA) (D.T. GARASIA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 08.12.2016