The ACIT, 1(1), Bhopal V. Shri Vinod Sharma, Bhopal

ITSSA 229/IND/2012

• Counselvise Citation: [2017] 119 COUNSELVISE.COM (IT) 3115 (ITAT-INDORE)
• Duration Of Justice: 4 year(s) 7 month(s) 5 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 10-01-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 04-01-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 05-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LALCHAND
• Assessee Lawyers: YESHWANT SHARMA
• Keywords: Unexplained investment; Income from undisclosed sources; Search and seizure; Loose papers
• Section: 69C; 143(3); 153A; 68; 145; 63

Judgement Text

IT(SS) A NOS.227 TO 231/IND/2012 ACIT VS. VINOD SHARMA 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE .., ..!', #$ # !% BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER ..&./ I . T.(SS)A. NOS.227 TO 231/IND/2012 ASSESSMENT YEARS: 2004-05, 2005-06, 2007-08, 2008-0 9 & 2009-10 ACIT 1(1) BHOPAL :: APPELLANT VS VINOD SHARMA BHOPAL PAN ANHPS 8104M :: RESPONDENT REVENUE BY SHRI LALCHAND ASSESSEE BY SHRI YESHWANT SHARMA DATE OF HEARING 4 .1.2017 !'#$% DATE OF PRONOUNCEMENT 1 0 .1.2017 ( O R D E R PER SHRI D.T. GARASIA, JM ALL THESE APPEALS RELATE TO THE ASSESSMENT YEARS 2004- 05, 2005-06, 2007-08, 2008-09 & 2009-10. THESE APPEAL S IT(SS) A NOS.227 TO 231/IND/2012 ACIT VS. VINOD SHARMA 2 HAVE BEEN FILED AGAINST THE CONSOLIDATED ORDER DATED 29.3.2012 OF THE LEARNED CIT(A), RAIPUR CAMP AT BHOPAL IN THE MATTER OF ORDERS PASSED BY THE ASSESSING OFFICER U/S 153A READ WITH SECTION 143(3) OF THE ACT. 2. THE SHORT FACTS OF THE CASE ARE THAT THE ASSESSEE IS A REAL ESTATE BROKER AND ALSO EXECUTED DEVELOPMENT ON COMMISSION BASIS. VARIOUS ADDITIONS WERE MADE BY THE ASSESSING OFFICER TO THE INCOME RETURNED AND ASSESSE D IN EACH OF THE ASSESSMENT YEARS. IN ALL THESE APPEALS, THE COMMON GROUND IS AGAINST ESTIMATION OF PROFIT OF EACH Y EAR UNDER CONSIDERATION AT 5 TIMES DEPOSIT IN ALL THE BANK ACCOUNTS OF THE ASSESSEE AND ESTIMATED NP @ 10% OF SUCH ESTIMATED RECEIPT. THE ASSESSEE FAILED TO PRODUCE THE DOCUMENTARY EVIDENCE ON WHICH THE RETURN OF INCOME W AS FILED, VOUCHERS IN RESPECT OF VARIOUS EXPENSES CLAIME D IN TRADING AND PROFIT AND LOSS ACCOUNT. THE ASSESSEE EXPLAI NED THAT MOST OF THE EXPENSES WERE FROM WITHDRAWALS FROM THE IT(SS) A NOS.227 TO 231/IND/2012 ACIT VS. VINOD SHARMA 3 BANK ACCOUNT AND DEPOSITS IN THE BANK ACCOUNT WERE EXPLAINED. THE ASSESSING OFFICER HAS NOT ACCEPTED THE EXPLANATION OF THE ASSESSEE. AS PER THE ASSESSING OFFI CER THE BANK DEPOSITS WERE MORE THAN THE NET RECEIPT SHOW N BY THE ASSESSEE. THE ASSESSEE HAS TAKEN THE CONTENTION THA T THE NET RECEIPT IS LESS THEN OVERALL DEPOSIT INCLUDE D IN THE MONEY RECEIVED IN ADVANCE. THE ASSESSING OFFICER REJE CTED THE EXPLANATION B Y STATING THAT THE LOOSE PAPERS FOUND AND SEIZED DURING SEARCH INDICATED THAT THE ASSESSEE WAS DO ING SUBSTANTIAL BUSINESS IN CASH TRANSACTIONS AND THE ASSESSE E HAS NOT FILED ANY DETAILS OF LOANS FROM RELATIONS, ADVANCE FROM CUSTOMERS AND SUNDRY EXPENSES SHOWN IN THE BALANC E SHEET AND GROSS RECEIPTS FROM THE BUSINESS AND NP SHO WN IN THE RETURN CANNOT BE ACCEPTED. THE ASSESSING OFFIC ER FOUND THAT DURING THE COURSE OF SEARCH, COPY OF SALE D EEDS OF THE LANDS SOLD BY PANCH SEVA GRAH NIRMAN SANSTHA WERE FOUND AND SEIZED FROM THE OFFICE OF THE ASSESSEE AND AS PER IT(SS) A NOS.227 TO 231/IND/2012 ACIT VS. VINOD SHARMA 4 THE ASSESSING OFFICER THE ASSESSEE COULD NOT GIVE DE TAILS OF WORK CARRIED OUT BY HIM FOR THE MEMBERS OF THE SOCIE TY AND THE AMOUNT CHARGED BY HIM. THEREFORE, THE ASSESSING OFFICER WAS OF THE VIEW THAT VARIOUS LOOSE PAPERS SUGG EST THAT VARIOUS PAYMENTS WERE MADE IN CASH TOWARDS LABOUR PAYMENT, BUILDING MATERIAL, ETC. AND, THEREFORE, THIS TRANSACTION IS NOT RECORDED IN THE BOOKS OF ACCOUNTS. THE ASSESSING OFFICER, THEREFORE, INVOKED THE PROVISION S OF SECTION 145(3) OF THE ACT AND SINCE THE TRANSACTIONS O F THE ASSESSEE WERE PRESUMED BY THE ASSESSING OFFICER TO B E MOSTLY IN CASH, SOME OF THE TRANSACTIONS WERE ROUTED THROUGH BANKING CHANNEL. THEREFORE, THE ASSESSING OFF ICER HAS ESTIMATED THE NP RATE AT 10% OF SUCH ESTIMATED RECEI PT RESULTING INTO ADDITION OF RS. 11,60,366/- FOR THE ASSESSMENT YEAR 2004-05, RS.14,69,801/- FOR THE ASSESSMENT YEAR 2005-06, RS.3,27,757/- FOR THE ASSESSMENT YEAR 2007-08, RS.21,92,334/- FOR THE IT(SS) A NOS.227 TO 231/IND/2012 ACIT VS. VINOD SHARMA 5 ASSESSMENT YEAR 2008-09 AND RS. 20,72,173/- FOR THE ASSESSMENT YEAR 2009-10. 3. THE MATTER WAS CARRIED IN APPEAL AND THE LEARNED CIT(A) GRANTED RELIEF BY OBSERVING AS UNDER :- 1.4 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MAD E ON BEHALF OF THE APPELLANT WITH REFERENCE TO THE FACTS OBTAINING FRO M THE RECORD. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT THE APPELLA NT MAINTAINED REGULAR BOOKS OF ACCOUNT AND MOST OF THE TRANSACTIONS REFLE CTED IN THESE BOOKS WERE ROUTED THROUGH BANKING CHANNELS. 1.5 THE AO HAD NOT BROUGHT ANY EVIDENCE ON RECORD TO CO NCLUSIVELY PROVE THAT THE SCRIBBLING/JOTTINGS/ROUGH WORKINGS IN THE IMPUGNED LOOSE PAPERS, WERE IN FACT THE MATERIALIZED MONITORY TRA NSACTIONS RELATING TO THE SUPPRESSED RECEIPTS OF THE APPELLANT. IN THE EV ENT OF ANY DOUBT OR DISPUTE,BEFORE ANY ADVERSITY WAS TO BE HELD AGAINST THE APPELLANT, IT WAS INCUMBENT UPON THE AO TO HAVE SUMMONED AND EXAMINED THE CONCERNED PARTIES TO FIND OUT TRUTH IN THE MATTER, BUT THEN, THIS ESSENTIAL EXERCISE WAS NOT CARRIED OUT BY THE AO SINCE HE CHOSE A SHOR TCUT METHOD TO RESORT TO HYPOTHETICAL ESTIMATIONS OF THE RECEIPTS AND NP WHICH, IN MY CONSIDERED VIEW, DOES NOT SUBSTANTIATE FRAMING OF Q UALITATIVE ASSESSMENTS FOR DETERMINING THE REAL INCOME. 1.6 AS ALREADY STATED, THE ROUGH JOTTINGS NEITHER REPRE SENT PURCHASES NOR SALESMUCH LESS THEY REPRESENT ANY INVESTMENT OR RE CEIPT IN RESPECT OF ANY DEALINGS FINALIZED. SUCH DUMP DOCUMENTS HAVE NO EVIDENTIARY VALUE FOR THE PURPOSE OF RESORTING TO DEEMING PROVISIONS OF SECTIONS 68 TO 69C AND NO ADDITION CAN BE MADE ON ACCOUNT OF UNDISCLO SED INCOME MERELY BY ARITHMETICALLY TOTALING VARIOUS FIGURES JOTTED D OWN ON LOOSE DOCUMENTS FOUND DURING SEARCH IN THE ABSENCE OF ANY ADEQUATE MATERIAL AS TO THE NATURE AND OWNERSHIP NOR COULD SUCH UNMATERIALIZED ROUGH JOTTINGS , CONSTITUTE VALID BASIS FOR RESORTING TO WILD AND AR BITRARY ESTIMATION OF RECEIPTS AND NP, U/S,132(4A) THERE IS A PRESUMPTION AGAINST THE APPELLANT THAT SUCH LOOSE PAPERS PERTAIN TO THE APPELLANT AND ITS I CONTENTS ARE CORRECT. HOWEVER, SUCH PRESUMPTION IS REBUTTABLE. L OOSE PAPERS, QUESTION, CONTAIN SCRUBBLINGS OR ROUGH NOTES AND DO NOT MEAN ANYTHING. HENCE, IT(SS) A NOS.227 TO 231/IND/2012 ACIT VS. VINOD SHARMA 6 INCOME SHOULD NOT HAVE BEEN ESTIMATED ON THE BASIS AT SUCH UNMATERIALIZED ROUGH JOTTINGS. OVER THE COURSE OF T IME, THE COURTS HAVE HELD THAT THE DEPARTMENT HAS NO SUCH AUTHORITY AND UNLES S MEANINGFUL DATA CAN BE CULLED OUT WHICH CAN BE CORROBORATED FROM OT HER MATERIAL, NO ADDITION IS CALLED FOR ON THE BASIS OF SUCH DUMP DO CUMENTS. IT IS FOR THE DEPARTMENT TO SUPPLY LANGUAGE TO DUMP DOCUMENTS, SU BSTANTIATED ON THE STRENGTH OF EVIDENCE. IN THE ABSENCE OF ANY EVIDENC E ABOUT THE NATURE OF FIGURES NOTED ON LOOSE PAPERS SEIZED, DATE, NAME OF THE PARTY ETC,, NO ADDITION CAN BE MADE MERELY ON SUSPICION (ACIT V SH AILESH S. SHAH (1997) 63 1.TR 153 (BORN.). IN THE INSTANT CASE, THE ONLY KNOWN FACTS ARE THAT CERTAIN PAPERS WERE FOUND IN THE BUSINESS PREMISES OF THE APPELLANT AND THEY CONTAINED CERTAIN CALCULATIONS. (ORIGIN AND CO NNECTION OF WHICH IS NOT KNOWN) AND NO INTELLIGIBLE INFERENCE THEREFROM CAN BE DRAWN. NO SENSIBLE INFERENCE OF ANY FACT CAN BE DRAWN FROM SUCH KNOWN FACTS. THE APPELLANT'S MATERIALIZED FINANCIAL INVOLVEMENT WAS ALSO NOT AUT HENTICATED AND PROVED FROM SUCH LOOSE PAPERS SEIZED. IN THIS VIEW OF THE MATTER, ALL THE ADDITIONS MADE WERE HELD IMAGINARY AS A RESULT OF SUSPICION ( BRINJAL RUPCHAND V ITO (1991) 40 TN. 668 (INDORE). IT IS TRITE LAW THA T IF AN INCOME NOT ADMITTED BY AN ASSESSEE IS TO BE ASSESSED IN THE HANDS OF TH E ASSESSEE, THE BURDEN TO ESTABLISH THAT THERE IS SUCH INCOME CHARGEABLE T O TAX IS_ON THE AO.WITH A VIEW TO THE AO AND TO REDUCE THE RIGOUR OF THE BU RDEN THAT LAY UPON THE AO, PROVISION OF SECTIONS 68,69,69A TO 69D HAVE PRO VIDED FOR CERTAIN DEEMING PROVISIONS, WHERE AN ASSUMPTION OF INCOME I S RAISED IN THE ABSENCE OF SATISFACTORY EXPLANATION FROM THE ASSESS EE. AS THESE ARE DEEMING PROVISIONS, THE CONDITIONS PRECEDENT FOR IN VOKING SUCH PROVISIONS ARE REQUIRED TO BE STRICTLY CONSTRUED. THE FACTS AN D CIRCUMSTANCES GIVING RISE TO THE PRESUMPTION HAVE TO BE ESTABLISHED WITH REASONABLE CERTAINTY. THE AO CANNOT FIRST MAKE CERTAIN CONJECTURES AND SU RMISES AND THEREAFTER APPLY' THE DEEMING PROVISIONS BASED ON SUCH CONJECT URES AND SURMISES. IN THE ABSENCE OF ADEQUATE MATERIAL AS TO THE NATURE A ND OWNERSHIP OF THE TRANSACTION, UNDISCLOSED INCOME COULD NOT BE ASSESS ED IN THE HANDS OF THE ASSESSEE MERELY BY ARITHMETICALLY TOTALING VARIOUS FIGURES JOTTED DOWN ON THE LOOSE DOCUMENTS. IN OTHER WORDS, FOR THE PURPOS E OF RESORTING TO DEEMING PROVISIONS, DUMP DOCUMENTS OR DOCUMENTS WIT H NO CERTAINTY/ CONSPICUOUSNESS HAVE, EVIDENTIARY VALUE. 1.7 RECORD ALSO EVIDENCES THE FACT THAT DESPITE DEEP SCRU TINY OF THE BOOKS OF ACCOUNT, WITH REFERENCE TO THE SEIZED DOCUM ENTS, THE AO WAS NOT IN A POSITICN TO IDENTIFY, SPECIFY AND QUANTI FY THE EXACT AMOUNT OF UNRECORDED RECEIPTS, IF THERE BE ANY. THE ESTIMATION OF IT(SS) A NOS.227 TO 231/IND/2012 ACIT VS. VINOD SHARMA 7 RECEIPTS IT FIVE TIMES OF THE BANK DEPOSITS AND NP 1 0%, AS MADE BY THE AO WERE ALSO NOT SUBSTANTIATED AND CO-RELATED WITH THE MATERIAL EVIDENCE FOUND/SEIZED, IF ANY, DURING EACH WERE CORROB ORATED BY THE AO ON THE STRENGTH OF EVIDENCE BROUGHT BY HIM ON REC ORD AGAINST THE APPELLANT. NONE OF THE INCOMINGS/OUTGOINGS, FOUND RE CORDED IN THE BOOKS, WERE ESTABLISHED TO HAVE NOT BEEN GENUINE AND NONE SUPPORTED ON THE STRENGTH OF NECESSARY BILLS AND VOUC HERS RECORD ALSO EVIDENCES THE FACT THAT MOST OF THE TRANSACTIO NS WERE ROUTED THROUGH BANKING CHANNELS AND THEY REFLECTED SALE PROC EEDS OF LAND OWNED BY THE APPELLANT AND IN CASE OF SALE THROUGH P OWER OF ATTORNEY OR SALES MADE ON COMMISSION BASIS, SUCH PR OCEEDS RECEIVED IN CASH/CHEQUE/DD, WERE PROVED TO HAVE BEEN EITHER GIVEN TO THE SELLER (LAND OWNER) OR ROUTED THROUGH APPELLANT'S BAN K ACCOUNTS AND IN SUCH TRANSACTIONS, THE APPELLANT ESTABLISHED TO HAVE RECEIVED ONLY COMMISSION WHICH WAS DULY ACCOUNTED FOR IN THE BOOKS OF ACCOUNT. IN CASE OF SALE PROCEEDS RECEIVED IN CASH IN RESPECT OF LAND/PLOT/FARM HOUSE, BELONGING TO OTHERS, SUCH SALE PROCEEDS RECE IVED IN CASH WERE PROVED TO HAVE BEEN DEPOSITED IN THE BANK ACCOUNT OF THE APPELLANT AND SUBSEQUENTLY TRANSFERRED TO THE LAND OWNERS, TH ROUGH CHEQUES, AFTER DEDUCTING COMMISSION, DEVELOPMENT CHARGES ETC, ON SUCH SALES, THE YEAR-WISE TRANSACTIONS REFLECTED IN THE APPELLAN T'S BANK ACCOUNT, EXTRACTED FROM THE REGULAR BOOKS OF ACCOUNT, ARE TA BULATED BELOW: ASSESSMENT YEAR TOTAL ACTUAL BANKING TOTAL SALE OF LAND TURNOVER ESTIMATED BY THE AO 2004-05 RS.27,27,692/- ONLY PETTY CONTRACT WORKS RS.1,36,38,460/- 2005-06 RS.33,60,322/- ONLY PETTY CONTRACT WORKS RS.1,68,01,610/- 2007-08 RS.20,41,812/- SALE OF LAND OF SUYOG MISHRA LAND OF SEWANIA GOND RS.12.33 LAKHS WITH DEVELOPMENT WORK RS.1,02,09,060/- 2008-09 RS.60,05,568/- SALE OF LAND OF SUYOG MISHRA, SEWANIA GOND ANJU RS.3,00,27,840/- IT(SS) A NOS.227 TO 231/IND/2012 ACIT VS. VINOD SHARMA 8 JAI KOTHARI KAMLA DEVIL SANJECV KUMAR RS.36.24 LAKHS 2009-10 RS.70,45,426/- SALE AT LAND OF ANJU . JAI KOTHARI SEWANIA GOND, MEENA PANT RS.31,56 LAKHS. RS.3,52,27,130/- 1.8 AS ALREADY STATED, THERE WAS NO BASIS AND EVIDENCE BR OUGHT BY THE AO ON RECORD TO SUBSTANTIATE SUCH HYPOTHETICAL AND AR BITRARY ESTIMATION OF RECEIPTS. DETAILS AVAILABLE ON RECORD DEMONSTRATE THE FACT THAT IN A.Y. 2004-05, THERE WAS NO SALE OF FAR M HOUSE OR PIECE OF LAND ON COMMISSION BASIS/DEVELOP-NET-IT BASIS AND TH AT THERE WERE NO SUBSTANTIAL CASH TRANSACTIONS IN ANY OF THE ASSESSM ENT YEARS:, UNDER CONSIDERATION, AS INCORRECTLY PRESUMED BY THE AO. TH E APPELLANT UNDISPUTEDLY IS A REAL-ESTATE BROKER AND HIS INTERE ST WAS NORMALLY LIMITED TO 2% COMMISSION ON THE SALE PRICE OF THE LA ND WHILE THE AO ESTIMATED THE SAME (A), 10% WHICH, IN MY CONSIDERED VIEW, WAS HIGHLY UNREASONABLE AND UNSUBSTANTIATED ON THE STRE NGTH OF CORROBORATIVE EVIDENCE. RECORD ALSO EVIDENCES THE F ACT THAT, IN PROCEEDINGS BEFORE THE A.O, THE APPELLANT HAD SUBMI TTED DETAILS OF THE LAND, PART OF THE LAND, PLOT, FARM LAND SOLD DURING E ACH OF THE ASSESSMENT YEARS, UNDER CONSIDERATION, ALONG WITH PH OTOCOPIES OF THE TITLE DEEDS OF SUCH PROPERTIES SOLD EITHER DIRECTLY OR ON COMMISSION BASIS, THE SOURCE OF PURCHASE AND SALE WERE ALSO EXP LAINED AND NONE OF THE PROPERTIES, COVERED BY THE TITLE DEEDS, SEIZE D DURING SEARCH FROM THE APPELLANT'S PREMISES, WERE PROVED BY THE A O TO HAVE NOT BEEN DISCLOSED BY THE APPELLANT. THE APPELLANT HAD GI VEN BEFORE THE A.O DETAILED CHART OF THE LAND OWNED BY THE APPELLANT AND SOLD IN PIECES TO VARIOUS PARTIES ALONG WITH THEIR MODE OF PAYMENT/RECEIPT FROM THE BUYER/SELLER, TOGETHER WITH COST OF DEVELOP MENT, COMMISSION RECEIVED/PAID ON SUCH TRANSACTIONS WHICH STOOD REFLECT ED IN THE BANK STATEMENTS AND CASH BOOK FILED IN PROCEEDINGS BEFORE THE AO. THE AO HAD NOT FOUND ANY DISCREPANCY IN ANY OF THE AFOREMEN TIONED DETAILS FILED BY THE APPELLANT. NO SUPPRESSION IN RECEIPTS N OR INFLATION IN IT(SS) A NOS.227 TO 231/IND/2012 ACIT VS. VINOD SHARMA 9 EXPENSES, WAS DETECTED BY THE AO AND THE AO HAD ALSO NOT DETECTED ANY SERIOUS OMISSION OR COMMISSION IN THE BOOKS OF ACCOUNT REGULARLY MAINTAINED BY THE APPELLANT AND THERE WAS ALSO NO E VIDENCE BROUGHT ON RECORD BY THE AO TO CONCLUSIVELY PROVE THAT THE APPELLANT HAD SUPPRESSED THE PROFIT. IN THE GIVEN FACTS AND CIRCU MSTANCES OF THE CASE, I AM OF THE CONSIDERED VIEW THAT PROVISIONS OF SECTION 145(3) OF THE ACT WERE INCORRECTLY INVOKED AND SINCE THE ESTI MATION OF RECEIPTS AND ESTIMATION OF NP MADE BY THE AO, AS ENUMERATED A BOVE, WERE WITHOUT ANY BASIS OF FACTS OR EVIDENCE, THE ADDITION S BASED ON SUCH UNSUBSTANTIATED HYPOTHETICAL ESTIMATIONS OF AO, ARE UNSUSTAINABLE ON FACTS AND IN LAW. 1.9 DURING SEARCH, SOME POWER OF ATTORNEYS WERE FOUND/SE IZED AND WHEN CONFRONTED BY THE AO IT WAS EXPLAINED ON BEHAL F OF THE APPELLANT THAT THE PROPERTY COVERED BY THE POWER OF ATTORNEY BELONGED TO THE OWNERS AND SINCE THE APPELLANT HAD TO SEEK A PROSPECTIVE BUYER, THE SAME WAS HELD BY THE APPELLANT: ON THE BA SIS OF POWER OF ATTORNEY, WITHOUT RECEIVING ANY CONSIDERATION FROM THE CONCERNED LAND OWNERS AND AS AND WHEN THE SAID PROPERTY WAS SOLD TO THE PROSPECTIVE BUYER, THE TITLE WAS TRANSFERRED FROM TH E LAND OWNER TO THE BUYER AND THE SALE PROCEEDS RECEIVED WERE DIRECTL Y TRANSFERRED FROM THE BUYER TO THE OWNER AND IF THEY WERE RECEIVE D BY THE APPELLANT, THE SAME WERE TRANSFERRED TO THE OWNER AF TER DEDUCTING THE BROKERAGE DUE TO THE APPELLANT AND., AS SUCH, FOR ALL PRACTICAL PURPOSES, THE APPELLANT WAS NOT THE OWNER OF SUCH P ROPERTIES COVERED BY THE POWER OF ATTORNEY. 1.10 THE SUPREME COURT IN ITS DECISION REPORTED IN 219 ITR 330 (SC) HELD THAT THERE CANNOT BE TAX ON INCOME ON PRESUMPTIVE B ASIS. INCOME IN FACT EARNED, IS ONLY TAXABLE AND NOT, THE ONE PRESU MED TO HAVE BEEN EARNED. 1.11 SIMPLY BECAUSE THE RECEIPTS WERE PRESUMED TO HAVE BE EN SUPPRESSED, BOOKS COULD NOT BE REJECTED, UNLESS SPEC IFIC DEFECTS WERE FOUND IN THE BOOKS. IT IS UNDISPUTED THAT THE AO HAD NOT DETECTED ANY SPECIFIC DEFECT IN THE BOOKS EXAMINED BY HIM. IN JAG DISH OIL MILLS V IT(SS) A NOS.227 TO 231/IND/2012 ACIT VS. VINOD SHARMA 10 ITO(1995) 52 TTJ (102) INDORE AND IN CIT V K.S. BHAT IA (2004) 269 ITR 577 (P&H), IT WAS HELD THAT REJECTION OF BOOKS O F ACCOUNT ON ACCOUNT OF EITHER LOW PROFIT OR PRESUMED SUPPRESSIO N IN RECEIPTS, WAS NOT SUSTAINABLE, IF NO DEFECTS ARE POINTED OUT IN TH E BOOKS. THE CORRECTNESS OF THE ENTRIES MADE IN THE CASH BOOK FO RMING PART OF BOOKS OF ACCOUNT, WAS NOT DISPUTED. EXCEPTING THIS, NO OTH ER REASON WAS GIVEN FOR REJECTION OF BOOK RESULTS. THE DEFECTS IN THE BOOKS SHOULD BE OF THE NATURE OF INFLATION IN EXPENSES OR SUPPRESSI ON OF RECEIPTS WHICH SHOULD BE PROVED BEYOND ALL SHADOWS OF DOUBT. THERE BE ING NO SUCH FINDING BY THE AO, REJECTION OF BOOK RESULTS, WAS NO T JUSTIFIED. 1.12 IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CAS E, THE IMPUGNED ESTIMATION MADE BY THE AO, IN -MY CONSIDERED VIEW, A RE UNSUSTAINABLE ON FACTS AND IN LAW. NOTHING INCRIMINA TING WAS FOUND EITHER IN KIND OR IN COIN TO SUBSTANTIATE THE IMPUGN ED PRESUMPTIVE ADDITION MADE BY THE AO. 1.13 IN CIT V. GOTAM LIME KHANIJ UDHYOG, (2002) 256 ITR 2 43 (RAJ.) IT WAS HELD SECTION 145 OF THE IT ACT, 1961, ONLY PROVIDES THE BASIS ON WHICH COMPUTATION OF INCOME IS TO BE MADE FOR THE PURPOSE OF DETERMINING THE AMOUNT OF TAX. THE PROVISIONS BY ITSELF DO NOT DE AL WITH UNSUBSTANTIATED ADDITIONS TO BE MADE ON PRESUMPTIONS. THEREFORE, MERE REJECTION OF, OR SOME DEFICIENCY IN, THE BOOKS OF ACCOUNT WOULD NOT MEAN THAT IT MUST NECESSARILY LEAD TO ADDITIONS TO THE RETURNED INCOME, WHERE AS IN THE CASE OF THE APPELLANT, UNDE R CONSIDERATION NO DEFICIENCY WHATSOEVER WAS FOUND/DETECTED JUSTIFYING RE JECTION OF BOOK RESULTS. 1.14 THE RESULTS SHOWN ON THE BASIS OF ACCOUNT BOOKS MAI NTAINED IN REGULAR COURSE OF BUSINESS, SHOULD NOT HAVE BEEN SUB STITUTED BY IRRELEVANT, PRESUMPTIVE AND ERRONEOUS CONSIDERATIONS . MERELY BECAUSE THE AO PRESUMED THAT THE RECEIPTS MIGHT HAVE BEEN SUPPRESSED, THAT COULD NOT BE THE CORRECT SCIENTIFI C YARDSTICK EITHER - FOR REJECTION OF THE BOOK RESULTS OR FOR RESORTING TO WILD ESTIMATION OF RECEIPTS AND NP. IN CIT V. PARADISE HOLIDAYS(2010) 325 ITR 13(DEL.) IT WAS HELD THAT: 'THE ACCOUNTS WHICH ARE REGULARLY . M AINTAINED IN THE IT(SS) A NOS.227 TO 231/IND/2012 ACIT VS. VINOD SHARMA 11 COURSE OF BUSINESS SHOULD NORMALLY BE TAKEN AS CORR ECT UNLESS THERE ARE ADEQUATE REASONS TO INDICATE THAT THEY ARE INCO RRECT OR UNRELIABLE. THE ONUS IS UPON THE REVENUE TO SHOW THAT EITHER TH E BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE WERE INCORRECT OR INCOMPLETE OR METHOD OF ACCOUNTING ADOPTED BY HIM WAS SUCH THAT TR UE PROFITS OF THE ASSESSEE COULD NOT BE DEDUCED THEREFROM. THE AO HA D NOT POINTED OUT ANY SPECIFIC DEFECT OR DISCREPANCY IN THE ACCOUN T BOOKS MAINTAINED BY THE ASSESSEE. ADMITTEDLY, THE ASSESSEE HAD BEEN MAINTAINING REGULAR BOOKS OF ACCOUNT, AND THE FINANC IAL RESULTS WERE FULLY SUPPORTED BY THE ASSESSEE WITH VOUCHERS AND TH E BOOKS OF ACCOUNT WERE COMPLETE AND CORRECT IN ALL RESPECTS. IF ANY PARTICULAR RECEIPT, OR EXPENSE REMAINED TO BE ACCOUNTED FOR OR UNVERIFIED, THE AO COULD HAVE ADDED SUCH SUPPRESSED RECEIPT OR DISALLOWE D THAT PARTICULAR EXPENSE. BUT, THAT BY ITSELF COULD NOT BE A GROUND FOR REJECTION OF ACCOUNTS AS A WHOLE. FURTHER THE A.0 C OULD NOT REJECT ACCOUNTS ON THE GROUND THAT THE PROFIT: REPORTED BY THE ASSESSEE WAS ON THE LOWER SIDE. WHILE IN THE CASE OF THE APPELLAN T THIS IS NO SO, SINCE THE A.0 HIMSELF ADMITTED THAT THE NP SHOWN WAS REASONABLE. THUS, REJECTION OF ACCOUNTS WAS HELD NOT JUSTIFIED.' 1.15 IN CIT V PADARNCHAND RANIGOPAL (1970) 76 ITR 719 (SC) IT WAS HELD THAT: THE AO HAS TO FIND OUT SOME INHERENT DEFECT IN THE SYSTEN-, FOLLOWED BY THE APPELLANT AND SHOULD PROVE THAT CORR ECT PROFITS CANNOT BE DEDUCED FROM THE BOOKS MAINTAINED SINCE IN SIGNIFICANT MISTAKES FOUND, IN THE BOOKS, CANNOT PROMPT THE AO T O SIMPLY REJECT THE BOOKS OF ACCOUNT AND TO MAKE ADHOC ESTIMATIONS. 1.16 IN INTERNATIONAL FOREST CO. V CIT 101 ITR. 721. (J& K.) IT WAS HELD THAT: IN ABSENCE OF ANY OMISSION, IRREGULARITY OR O THER DEFECT IN THE METHOD OF ACCOUNTING OR POSITIVE EVIDENCE TO SHOW TH AT THE ACCOUNTS DID NOT DISCLOSE THE WHOLE INCOME OF THE APPELLANT, THE BOOKS CANNOT BE REJECTED, IT WAS ALSO HELD BY THE J&K HC THAT IF THE AO OPINED THAT THE PROFIT SHOWN AS PER BOOKS WAS LESS, THEN I T IS FOR THE AO TO BRING EVIDENCE ON RECORD TO PROVE THAT THE ASSESSEE MADE MORE PROFITS. IN THE CASE OF THE APPELLANT, UNDER CONSID ERATION, NO SUCH EVIDENCE WAS BROUGHT BY THE LEARNED AO ON RECORD, TO SUBSTANTIATE THE IMPUGNED ESTIMATION OF GP. IT(SS) A NOS.227 TO 231/IND/2012 ACIT VS. VINOD SHARMA 12 1.17. SIMILAR WAS THE VIEW HELD IN GEETANJALI WOOLLE NS P. LTD V ACIT (1994) 50 ITD 558 (AHD.) WHEREIN THE LEARNED MEMBER S OF THE ITAT AHMEDABAD BENCH TOOK NOTE OF THE FACT THAT THE ACCO UNTS WERE REGULARLY MAINTAINED AND THE AO HAD NOT SHOWN THAT N O METHOD OF ACCOUNTING WAS REGULARLY FOLLOWED BY THE APPELLANT AND HENCE, REJECTION OF BOOK RESULTS WAS HELD TO BE INCORRECT. THE KERALA HC IN ST. TERESSA'S OIL MILLS V STATE OF KERALA (1970) 76 ITR 365 (KER.) HELD THAT ACCOUNTS REGULARLY MAINTAINED IN THE COURSE OF BUSINESS HAVE TO HE TAKEN AS CORRECT UNLESS THERE ARE STRONG AND SUF FICIENT REASONS TO INDICATE THAT THEY ARE UNRELIABLE. THE DEPARTMENT HA S TO PROVE SATISFACTORILY THAT THE ACCOUNTS ARE UNRELIABLE, IN CORRECT OR INCOMPLETE BEFORE IT CAN REJECT THE ACCOUNTS. REJECTION OF BOO KS SHOULD NOT BE DONE LIGHT HEARTEDLY. IT WAS FURTHER HELD THAT ACCOUN TS MAY BE REJECTED, IF IMPORTANT TRANSACTIONS ARE OMITTED OR, IF PROPER PARTICULARS AND VOUCHERS ARE NOT FORTHCOMING OR, IF THEY DO NOT INCLUDE ENTRIES RELATING TO A PARTICULAR CLASS OF BUSINESS. FURTHER IN SHANKAR RICE CO. V ITO (2000) 72 ITD 139 (ASR.) (SB), IT WAS HELD THAT WHERE NO DEFECTS WERE POINTED OUT IN THE BOOKS OR REGISTER/RECORDS M AINTAINED BY THE APPELLANT, BOOKS COULD NOT BE REJECTED, 1.18. NO EVIDENCE WHATSOEVER WAS BROUGHT ON RECORD NOR COMMUNICATED TO THE APPELLANT TO JUSTIFY ESTIMATION OF EITHER RECEIPTS OR NP. RELIANCE FOR THIS PROPOSITION IS PLA CED ON THE DECISIONS IN CIT V POPULAR ELECTRIC CO. (P)LTD. (1993) 203 ITR 630 (CAL.) AND GANGA PRASAD SHARMA V CIT (1981) 127 I TR 27 (MP.) AND VARIOUS OTHER DECISIONS MENTIONED IN CHHATT ISHGARH STEEL CASTING PVT. LTD. V ACTT (2009) 12 ITJ 741 (ITA T- BILASPUR BENCH) WHEREIN IT WAS HELD BY THE JURISDIC TIONAL BENCH OF THE ITAT THAT ASSESSMENT OF INCOME HAS TO BE MADE ON AVAILABLE EVIDENCES AS PER SECTION 143(3)(II), WHICH EMPOWERS THE AO TO GO THROUGH THE EVIDENCES FOR FRA MING SCRUTINY ASSESSMENT ORDER VIZ., (A) EVIDENCE PROD UCED BY THE ASSESSEE (B) EVIDENCE REQUIRED FROM THE AO TO BE PRO DUCED AND (C) AFTER TAKING INTO ACCOUNT ALL RELEVANT MATERIAL GATHERED BY THE AO. IT IS, THEREFORE, CLEAR FROM PLAIN READING OF SECTION 143(3) THAT ASSESSMENT OF THE INCOME SHOULD BE BASE D ON RELEVANT AND GATHERED MATERIAL AND NOT BEYOND THAT. IT WAS IT(SS) A NOS.227 TO 231/IND/2012 ACIT VS. VINOD SHARMA 13 FURTHER HELD BY THE ITAT THAT ADDITIONS TO THE BOOK RESULTS BASED ON HYPOTHETICAL CALCULATION OF TURNOVER AND E STIMATION OF PROFIT RATE MERELY ON PRESUMPTIONS AND SURMISES, ARE NOT SUSTAINABLE. FOR THIS PROPOSITION, RELIANCE IS PLAC ED ON THE DECISIONS IN MAHESH CHAND V CIT (1993) 199 ITR 247 (A LL.); R.Y DURLABHIJ, (1995) 211 1TR 178 (RAJ.) AND VARIOUS OTHE R DECISIONS MENTIONED THEREIN. 1.19. NO EVIDENCE WHATSOEVER WAS BROUGHT BY THE AO O N RECORD TO SUBSTANTIATE THE IMPUGNED ESTIMATED ADDITIONS MADE B Y HIM. THESE ESTIMATES WERE BASED ONLY ON HIS IMAGINATIONS AND O PPOSED TO THE SETTLED LEGAL POSITION THAT THE PROFIT IS TO BE ESTI MATED ON THE BASIS OF PROPER MATERIAL AVAILABLE WITH THE AO AS HELD IN DAB ROS INDUSTRIAL CO. (P) LTD. V CIT (1977) 108 ITR 424 (CAL.), MAKIN G ARBITRARY AND UNREASONABLE ESTIMATE IS NOT PERMISSIBLE IN LAW AS HELD IN SANGRUR VANASPATI MILLS LTD V ACIT (2003) 133 TAXMAN 37 (CHD. )(MAG.). THE IMPUGNED ESTIMATION OF RECEIPTS AND NP DID NOT HAVE N EXUS WITH THE MATERIAL ON RECORD. THE AO HAD NOT GIVEN OPPORTUNITY TO THE APPELLANT TO CONTRADICT THE MATERIAL, IF ANY, UPON WHICH HE B ASED HIS ESTIMATE AND HENCE, THE AO'S ACTION IN THIS REGARD IS OPPOSED TO THE RATIO HELD IN ADDL. ITO V PONKUNNAM TRADERS (1976) 102 ITR 366, 370, 371(KER.). THE AO IS REQUIRED TO GIVE REASON FOR AR RIVING AT A PARTICULAR FIGURE OF THE ESTIMATE AS HELD IN CIT V R ANICHERRA TEA CO. LTD (1994) 207 ITR 979,983(CAL.) AND TO GIVE BASIS F OR FIXING HIS ESTIMATE, BY AFFORDING OPPORTUNITY TO THE APPELLANT , TO REBUT THE SAME. THIS WAS NOT DONE. IN THE ASSESSMENT PROCEEDIN GS, THE APPELLANT WAS NEVER CONFRONTED WITH THE INTENTION OF THE AO THAT HE WANTED TO ESTIMATE BOTH THE RECEIPTS AND NP. THUS, TH ERE WAS VIOLATION OF MANDATORY REQUIREMENT OF LAW. IN N. RA JA PULAIAH V DCTO (1969) 73 ITR 224 (AP) & RATANLAL OMPRAKASH V CIT (1984) 17 TAXMAN 201 (ORR.) IT WAS HELD THAT WHERE THE ESTIMA TE WAS MADE BY THE AO WITHOUT GIVING THE BASIS OF ITS ,FIXATION TH E ASSESSMENT WAS BAD. THE PRESENT CASE IS COVERED BY THE RATIO LAID IN AFORESAID CASES. WHERE THE BOOKS OF ACCOUNT ARE REJECTED, THERE MUST EXIST CO-RELATION BETWEEN ADDITIONS MADE AND THE DEFECTS DETECTED. THIS HAS BEEN HELD IN CF.KRISHNANLAL & CO, V STATE OF KERALA (200 1) 123 STC 124, 126 (KER.). IT(SS) A NOS.227 TO 231/IND/2012 ACIT VS. VINOD SHARMA 14 1.20 IT IS SETTLED POSITION OF LAW THAT, UNLESS THER E IS SOME EVIDENCE TO PROVE THE CONTRARY, ESTIMATED ADDITION ON PRESUMPTION S, IS UNSUSTAINABLE ON FACTS AND IN LAW PARTICULARLY WHEN THE IMPUGNED ASSESSMENTS WERE CLAIMED TO HAVE BEEN MADE AS SCRUT INY ASSESSMENTS COMPLETED AFTER SEARCH. THE IMPUGNED ADDI TIONS MADE ON MERE GUESS-WORK AND WITHOUT ANY COGENT EVIDENCE ARE ALSO OPPOSED TO THE SUPREME COURT DECISION IN 26 ITR775 (SC )(SUPRA) AND THE DECISION OF ALL. IHIC IN 199 ITR 247 (ALL.) AND RAJ. HC DECISION IN 211 ITR178 (RAJ.). THE LAW DOES NOT OBLIGE A BUSINE SS MAN/PROFESSIONAL TO MAKE THE MAXIMUM PROFITS THAT H E CAN OUT OF HIS TRADING TRANSACTIONS. INCOME WHICH ACCRUES TO A TRA DER IS TAXABLE IN HIS HANDS, INCOME WHICH HE COULD HAVE, BUT HAS NOT E ARNED, IS NOT MADE TAXABLE AS INCOME ACCRUED TO HIM(CIT V. A. RAMA N & CO. (1968) 67 ITR PAGE 11-17 (SC). 1.21. SINCE EXTENSIVE SEARCH OPERATIONS WERE CONDUCT ED AND VOLUMINOUS DOCUMENTS WERE SEIZED, COUPLED WITH THE BOOKS OF ACCO UNT OF THE APPELLANT, THE AO SHOULD HAVE DILIGENTLY MADE A MEAN INGFUL EXERCISE TO SURFACE THE INSTANCES OF SUPPRESSION IN SALES/RE CEIPTS OR INFLATION IN PURCHASES/EXPENSES AS ALSO THE UNDISCLOSED INVEST MENT, MADE BY THE APPELLANT, IF ANY, AND SHOULD HAVE ALSO APPRAISE D THE APPELLANT WITH THE JUSTIFICATION FOR REJECTION OF BOOK FOR IN VOKING PROVISIONS OF SECTION 145(3) OF THE ACT AND WITHOUT CONFRONTING TH E APPELLANT WITH SUCH SERIOUS DISCREPANCIES, I AM AFRAID THAT THE AO HAS NO POWER/JURISDICTION TO SUMMARILY REJECT THE BOOKS AN D TO CHOOSE A SHORT-CUT METHOD FOR ESTIMATING THE RECEIPTS AND PR OFIT MARGIN. IN THE ASSESSMENTS TO BE COMPLETED AFTER SEARCH AND SEIZURE OPERATION, IN MY CONSIDERED VIEW, THERE IS NO SCOPE FOR RESORTING TO ANY ESTIMATIONS UNLESS THE SAME ARE CORROBORATED WITH THE SPECIFIC M ATERIAL FOUND/SEIZED DURING SEARCH. UNDISCLOSED INCOME ASSESSE D, IF ANY MUST INVARIABLY BE MATCHED WITH THE UNRECORDED ASSETS FOUND/SEIZED DURING SEARCH. 1.22. FOR THE REASONS EXTENSIVELY ENUMERATED ABOVE, I HAVE ABSOLUTELY NO HESITATION IN HOLDING THAT THE ESTIMATION OF RECEIP TS AND NP, AS MADE BY THE AO, FOR EACH OF THE ASSESSMENT YEARS, UNDER C ONSIDERATION, WERE UNSUBSTANTIATED ON THE STRENGTH. OF CORROBORATI VE EVIDENCE IT(SS) A NOS.227 TO 231/IND/2012 ACIT VS. VINOD SHARMA 15 BROUGHT AGAINST THE APPELLANT ON RECORD. I HAVE ALSO GIVEN EXTENSIVELY ENUMERATED IN THE PRECEDING PARAGRAPHS THE REASONS A S TO WHY THE REJECTION OF BOOK RESULTS, AS MADE BY THE AO, WAS U NSUSTAINABLE. IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE, THE ESTIMATED ADDITION MADE BY THE AO IN EACH OF THE ASSESSMENT YEARS, UNDE R CONSIDERATION, IN MY CONSIDERED VIEW, ARE UNSUSTAINAB LE ON FACTS AND IN LAW. THE SAME ARE THEREFORE DELETED. THE APPELLANT ACCORDINGLY GETS RELIEF OF RS.11,60,366/- FOR THE AY.2004-05; R S.14,69,801/- FOR THE AY.2005-06; RS,3,27,757/- FOR THE AY.2007-0 8; RS.21,92,334/- FOR THE AY.2008-09; AND RS.20,72,173 /- FOR THE AY.2009-10. 2. FOR THE ASSESSMENT YEAR 2005-06, ADDITION OF RS. 10,94,000/- MADE BY THE AO, VIDE PARA NO.2.3 OF THE ASSESSMENT ORDER FOR THAT YEAR, WAS ALSO OBJECTED BY THE APPELLANT. ACCORDING TO THE AO, LOO SE PAPER MARKED AS LPS 3/24 CONTAINING DETAILS OF PROPERTIES, WAS FOUND/SEI ZED; PAGES NO.78 TO 97 WAS COPY OF SALE DEED DATED 31.03,2005; THE SELLE R WAS MLS LINKERS SECURITIES LTD., 22, VAISHALI NAGAR, BHOPAL AND THE PURCHASER WAS SHRI ANCHIT GOYAL AND THE APPELLANT VINOD SHARMA. STAMP DU TY WAS RS,1,88,000/- AND SELLING PRICE OF RS.20,00,000/- W AS PAID THROUGH CHEQUE NO.463012 DATED 30.05.2005 OF CENTRAL BANK OF INDIA, IMAMI GATE BRANCH, BHOPAL FOR RS.10,00,000/- AND CHEQUE NO.787 195 DATED 30.05.2005 OF PNB BHOPAL FOR RS.10,00,000/-; THE AP PELLANT HAD PURCHASED THIS PROPERTY JOINTLY WITH SHRI ANCHIT GOYA L. THE AO OBSERVED THAT THE BANK ACCOUNT OF THE APPELLANT DID NOT REFL ECT DEBIT OF SUCH PAYMENT. SINCE THE PAYMENT MADE BY THE APPELLANT TO M/S LINKERS SECURITY LIMITED WAS NOT VERIFIABLE FROM THE BANK ACC OUNT OF THE APPELLANT, THE TOTAL INVESTMENT OF RS.10,94,000/- WAS TREATED AS UNEXPLAINED INVESTMENT AND ASSESSED AS SUCH IN THE HANDS OF THE A PPELLANT. 2.1. AGAINST THE ABOVE, IN PROCEEDINGS BEFORE ME, IT WAS SUBMITTED ON BEHALF OF THE APPELLANT THAT THE APPELLANT HAD PURC HASED 6.93 ACRES OF LAND JOINTLY WITH ANCHIT GOYAL FOR RS.21.88 LAKHS WI TH 50% OF THE REGISTRY CHARGES BORN BY BOTH THE APPELLANT AND THE OTHER PUR CHASER ANCHIT GOYAL. THE APPELLANT HAD PAID ITS SHARE VIDE CHEQUE NO.7871 95 DATED 30.05.2005 THROUGH PNB, NEHRU NAGAR BRANCH BUT DUE T O PERSONAL REASONS THE SELLER HAD GOT THE CASH PAYMENT OF RS.1 0,00,000/- FROM THE IT(SS) A NOS.227 TO 231/IND/2012 ACIT VS. VINOD SHARMA 16 APPELLANT BEFORE THE DUE DATE OF PAYMENT OF THE CHEQ UE; THAT THE APPELLANT HAD MADE PAYMENT IN PARTS OUT OF THE VARIOUS RECEI PTS FROM CONSTRUCTION, COMMISSION AND DEVELOPMENT, TO THE SELLER M/S LINKERS SECURITIES LIMITED AND CONFIRMATIONS OF THE SAME FROM THE SELLER WAS F ILED IN PROCEEDINGS BEFORE THE AO AND, AS SUCH, THE IMPUGNED ADDITION AC CORDING TO THE LEARNED COUNSEL FOR THE APPELLANT, WAS NOT JUSTIFIE D 2.2 . THE RIVAL SUBMISSIONS HAVE BEEN CAREFULLY CONSIDERE D WITH REFERENCE TO THE FACTS OBTAINING FROM THE RECORD. THE FACTS S TATED BY THE APPELLANT REGARDING PAYMENT OF HIS SHARE IN THE IMPUGNED PURC HASE MADE TO THE SELLER, WAS VERIFIABLE FROM THE CONFIRMATION OBTAIN ED FROM THE SELLER AND FILED IN PROCEEDINGS BEFORE THE AO. THE AO HAD NOT E XAMINED THE SELLER NOR HAD HE BROUGHT ANY EVIDENCE ON RECORD TO DISPROVE THE GENUINENESS OF THE CONFIRMATION FILED BY THE APPELLANT. THE APPELLANT WAS PROVED TO HAVE SUFFICIENT FUNDS AVAILABLE AS PER HIS BOOKS OF ACCOU NT FOR MAKING THE IMPUGNED PAYMENT AND, AS SUCH, THE IMPUGNED ADDITION MADE BY THE AO, ON UNVERIFIED FACTS, IN MY CONSIDERED VIEW, IS UNSUST AINABLE. THE SAME IS, THEREFORE, DELETED. THE APPELLANT ACCORDINGLY GETS RELIEF OF RS.10,94,000/- FOR THE AY 2005-06. 3. FOR THE ASSESSMENT YEAR 2007-08, THE APPELLANT HAD ALSO OBJECTED TO THE ADDITION OF RS.12,00,000/- MADE BY THE AO VIDE PARA NO.2.4 OF THE ASSESSMENT ORDER APPEALED AGAINST. ACCORDING TO THE AO, INFORMATION RECEIVED FROM REGISTRAR OFFICE, BHOP AL REVEALED THAT THE APPELLANT HAD PURCHASED 0.809 ACRES AT VILLAGE MANDO RY FROM ,SHRI SUYOGE KUMAR MISHRA AND COMPLETE DETAILS AS PER REGIST ERED SALE DEED WERE GIVEN IN PARA NO.2.4 OF THE ASSESSMENT ORDER. THE DETAILS OF PAYMENT; ACCORDING TO THE AO, WERE NOT VERIFIABLE F ROM THE BANK ACCOUNT OF THE APPELLANT AND, AS SUCH, THE TOTAL INVESTMENT OF RS.12,00,000/- WAS ASSESSED AS UNEXPLAINED AND ADDED TO THE INCOME RETURNE D FOR THE AY.2007-08. 3.1. I HAVE VERIFIED THE DETAILS OF THE PAYMENTS MAD E BY THE APPELLANT, AVAILABLE ON RECORD AND I FIND THAT THE PURCHASE PRIC E OF RS.12,00,000/- WAS PAID BY THE APPELLANT AS UNDER: (A) CHEQUE NO.903506 DATED 26.04.2006 OF PNB, NEHRU NAGAR BRANCH OF VINOD SHARMA (AO HAS WRONGLY MENTIONED AS UNION BANK OF INDIA, WHERE IT(SS) A NOS.227 TO 231/IND/2012 ACIT VS. VINOD SHARMA 17 AS IT PNB); (B) CHEQUE NO.340893 DATED 27.01.2006 O F VINOD SHARMA ISSUED FOR THE MAKING DEMAND DRAFT IN FAVOUR OF SUYOGE MISHRA FROM PNB NEHRU NAGAR BRANCH; AND (C) CHEQUE NO.340893 DTD. 27.01.2006 OF VINOD SHARMA ISSUED FOR THE MAKING DEMAND DRAFT IN FAVOUR OF MISHRA FROM PNB NEHRU NAGAR BRANCH. TO SUBSTANTIATE THESE FACTS, TH E APPELLANT FILED COPY OF RELEVANT BANK STATEMENTS AND CONFIRMATIONS FROM THE CONCERNED PARTIES AND NONE OF THEM WERE PROVED BY THE AO AS FALSE. ALL THE PAYMENTS WERE MADE THROUGH ACCOUNT PAYEE CHEQUES AND EVIDENT FROM THE RELEVANT BANK STATEMENTS AVAILABLE ON RECORD AND AS SUCH THE IMPUGN ED ADDITION MADE BY THE AO ON UNVERIFIED FACTS, IN MY CONSIDERED VIEW, IS UNJUSTIFIED. THE SAME IS, THEREFORE, DELETED. THE APPELLANT ACCORDINGLY GETS RELIEF OF RS.12,00,000/- FOR THE AY.2007-08. 4. FOR THE ASSESSMENT YEAR 2007-08, THE APPELLANT H AD ALSO OBJECTED TO THE ADDITION OF RS.11,00,000/- MADE BY THE AO VIDE PARA NO.2.8 OF THE ASSESSMENT ORDER APPEALED AGAINST. ACCORDING TO THE AO, DURING SEARCH IN THE OFFICE PREMISES OF SHRI ASHOK. GOYAL, COPY OF PA RTNERSHIP DEED DULY SIGNED BY ALL THE PARTNERS WAS FOUND/SEIZED. THIS DEED W AS SIGNED ON 30.09.2006 AND APPELLANT WAS ONE OF THE PARTNERS. AS PER THIS DEED RS.11,00,000/- WAS. CONTRIBUTED BY THE APPELLANT AS HIS SHARE OF INITIAL CAPITAL. HOWEVER, THE SOURCE OF INVESTMENT WAS NOT DISCLOSED IN THE BOOKS OF THE APPELLANT AND AS SUCH THE SAME WAS TREATED AS UNDISCLOSED INCOME OF THE APPELLANT AND ADDED TO THE INCOME RETURNED FOR T HE AY .2007-08. 4.1. IN PROCEEDINGS BEFORE ME AS WELL AS IN PROCEED INGS BEFORE THE AO, IT WAS ASSERTED THAT IN THE BUSINESS ACTIVITIES IN WHI CH THE APPELLANT WAS ENGAGED, HE USE TO WORK FOR SHRI ASHOK GOYAL AND SHR I ASHOK GOYAL FORMED A PARTNERSHIP AND THE APPELLANT WAS SHOWN TO H AVE CONTRIBUTED RS.11,00,000/- AS HIS SHARE IN THE SAID PARTNERSHIP . THE FIRM WAS DISSOLVED ON 07.07.2007 AND NO SUM WAS PAID BY THE AP PELLANT AS HIS SHARE OF CAPITAL AND AS SUCH THE IMPUGNED ADDITION, ACCORDING TO THE LEARNED COUNSEL FOR THE APPELLANT, WAS UNJUSTIFIED. 4.2. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MAD E ON BEHALF OF THE APPELLANT WITH REFERENCE TO THE FACTS OBTAINING FRO M THE RECORD. IT IS UNDISPUTED THAT THE IMPUGNED DEED OF PARTNERSHIP, F OUND/SEIZED DURING SEARCH IN THE PREMISES OF ASHOK GOYAL, CONTAINED TH E SIGNATURES OF THE APPELLANT AFFIXED THEREIN. IF THE APPELLANT IN FACT HAD NOT PAID THE SUM OF IT(SS) A NOS.227 TO 231/IND/2012 ACIT VS. VINOD SHARMA 18 RS.11,00,000/- AS HIS INITAL. SHARE CAPITAL, THERE W AS NO NECESSITY FOR HIM TO HAVE SIGN SUCH AN INSTRUMENT OF PARTNERSHIP AND THE APPELLANT'S SIGNATURE AFFIXED THEREIN CLEARLY FORTIFIES THE FACT THAT ALL THAT WAS MENTIONED THEREIN WAS FULLY CORRECT AND THE APPELLANT 'S SIGNATURE IN THE PARTNERSHIP DEED ALSO TESTIFIES HIS CONSENT AND AGR EEMENT TO ALL THE FACTS AND TERMS INCORPORATED IN THE SAID PARTNERSHIP DEED. IT WAS IN THIS BACKGROUND, IT HAS TO BE HELD THAT THE SUBSEQUENT D ENIAL WAS ONLY SELF- SERVING SINCE THE APPELLANT HAD NO EVIDENCE TO PROVE THE SOURCE OF THE IMPUGNED INVESTMENT MADE IN THE SAID PARTNERSHIP AS HIS INITIAL SHARE CAPITAL CONTRIBUTION. DESPITE SPECIFIC OPPORTUNITY GIVEN BY THE AO AND ALSO IN APPEAL PROCEEDINGS, BY ME, THE APPELLANT COULD N OT ADDUCE ANY EVIDENCE TO SUBSTANTIATE HIS ASSERTION OF HAVING NOT CONTRIBUTED RS.11,00,000/- AS HIS INITIAL SHARE CONTRIBUTION IN THE SAID PARTNERSHIP. FOR THE REASONS AFOREMENTIONED, I HAVE ABSOLUTELY NO HE SITATION IN HOLDING THAT THE IMPUGNED SUM OF RS.11,00,000/- WAS CONTRIBUTED B Y THE APPELLANT AS HIS INITIAL SHARE CONTRIBUTION IN THE SAID PARTNERSH IP, FROM SOURCES UNDISCLOSED TO THE DEPARTMENT AND, AS SUCH, THE ADDI TION OF. RS.11,00,000/- MADE BY THE AO, IS CONFIRMED. THIS GROUND OF APPEAL RELATING TO THE AY.2007-08 IS ACCORDINGLY, DISMISSE D. 5. FOR THE ASSESSMENT YEAR 2008-09, THE APPELLANT HAD ALSO OBJECTED TO THE ADDITION OF RS.18,20,000/- MADE BY THE AO VIDE PARA NO.2.2 OF THE ASSESSMENT ORDER APPEALED AGAINST. ACCORDING TO THE AO, PAGE NO.185. TO .188 OF LPS 3/21 WAS COPY OF POW ER OF ATTORNEY GIVEN BY SHRI ALAY JOSHI AMD SMT.ASHA JOSHI TO SHRI HARISH PATEL IN RESPECT OF 8 ACRES OF LAND AT VILLAGE FATEHPUR DOBRA. ACCORDING TO SHRI HARISH PATEL, THIS LAND WAS PURCHASED BY THE APPELLANT AND POWER OF ATTORNEY WAS ISSUED IN HIS NAME TO SELL THE LAND ON COMMISSION B ASIS. ACCORDING TO SHRI ALAY JOSHI, HE HAD RECEIVED SALE CONSIDERATION OF RS .17,00,000/- ONLY THOUGH THE TOTAL DEED WAS FOR RS.20,00,000/-. AS PE R THE APPELLANT, THE COST OF LAND FOR HIM WAS RS.18,20,000/-. THE AO NOT ED THE DETAILS OF PAYMENT MADE BY THE APPELLANT TO SHRI ALAY JOSHI WER E NOT GIVEN AND HENCE, THE TOTAL INVESTMENT OF RS.18,20,000/- WAS T REATED AS UNEXPLAINED INVESTMENT AND ASSESSED AS SUCH IN THE ASSESSMENT FO R THE AY 2008-09. 5.1. AGAINST THE ABOVE, AS RIGHTLY SUBMITTED ON BEHA LF OF THE APPELLANT IN PROCEEDINGS BEFORE THE AO DETAILS EXTRACTED FROM TH E RELEVANT BAN IT(SS) A NOS.227 TO 231/IND/2012 ACIT VS. VINOD SHARMA 19 ACCOUNTS DEMONSTRATE THE FACT THAT THE PAYMENT OF R .S.18,20,000/- MADE BY THE APPELLANT TO SHRI ALAY JOSHI WAS AS UNDER: DATE BANK ACCOUNT CHEQUE AMOUNT 07.03.2007 MP RAJYA SAHKARI BANK 386129 3.00 LAKHS 20.03.2007 MP RAJYA SAHKARI BANK 386133 0.2 LAKHS MP RAJYA SAHKARI BANK 386131 2.00 LAKHS 26.03.2007 AXIS BANK 422568 6.00 LAKHS 10.04.2007 PNB 480640 5.00 LAKHS 16.07.2007 SBI 890299 TOTAL 18.20 LAKHS COPY OF BANK STATEMENT OF THE SELLER AND RECEIPT OF CONFIRMATION WITH EXPLANATION FROM THE SELLER WERE FILED IN PROCEEDIN GS BEFORE THE AO TOGETHER WITH ALL THE RELEVANT BANK ACCOUNTS. PAYME NT WAS MADE ON 26.03.2007 THROUGH MADHAN MOHAN SHARMA, PAYMENT DATE D 10.04.2007 WAS MADE BY SHRI S.D.SHARMA AND PAYMENT DATED 16.07.20 07 WAS PAID BY M.N.SINGHON BEHALF OF VINOD SHARMA. WITHOUT PROVIN G FALSITY IN THE AFOREMENTIONED FACTS EVIDENT FROM THE RELEVANT BANK STATEMENTS, THE IMPUGNED ADDITION WAS MADE BY THE AO, PRESUMING THE SAME TO HAVE BEEN MET FROM UNDISCLOSED INCOME OF THE APPELLANT. F ACTS VERIFIABLE FROM THE RECORDS WERE NOT VERIFIED AND THIS LED TO THIS U NSUBSTANTIATED ADDITION. THE SAME IS, THEREFORE, DELETED. THE APPELLANT, ACCORDINGLY, GETS RELIEF OF RS.18,20,000/- FOR THE AY.2008-09. 6. FOR THE ASSESSMENT YEAR 2008-09, THE APPELLANT H AD ALSO OBJECTED TO THE ADDITION OF RS.11,35,000/- MADE BY THE AO VIDE PARA NO.2.7 OF THE ASSESSMENT ORDER / APPEALED AGAINST. ACCORDING TO THE AO, PAGES NO.61 AND 62 OF LPS 2/3 SEIZED DURING SEARC H, WAS A SALE AGREEMENT DATED 11.05.2008 BETWEEN THE APPELLANT DR .NEHA KHARE, E- 8/104 BASANT KUNJ, ARERA COLONY, BHOPAL FOR SALE OF FARM LAND DELUXE 12 MEASURING 10900SQ.FT FOR RS.16,35,000/-. AS PER AGR EEMENT ADVANCE OF RSI,00,000/- WAS GIVEN, TO THE SELLER ON 11.05.2008 IN CASH AND BALANCE OF RS.I5,35,000/- WAS AGREED TO BE PAID BY 10.08.200 8. ON PAGE NO.77 IT WAS MENTIONED THAT RS.1,00,000/- WAS PAID AS ADVANCE AND E PAID IN IT(SS) A NOS.227 TO 231/IND/2012 ACIT VS. VINOD SHARMA 20 THREE MONTHS. THE AO NOTED THAT IN THE BOOKS OF ACCO UNT OF THE APPELLANT, TOTAL RECEIPTS FROM SMT.NEHA KHARE WERE SHOWN CITRS .5,00,000/- AND, AS SUCH, RS. 11,35,000/- WAS TREATED AS UNDISCLOSED INC OME OF THE APPEILANT AND ADDED TO THE INCOME RETURNED FOR THE A V.2008-09 . 6.1. AGAINST THE ABOVE, IN PROCEEDINGS BEFORE ME, I T WAS SUBMITTED ON BEHALF OF THE APPELLANT THAT THE APPELLANT HAD DRAFT ED A PRO-FORMA AGREEMENT WITH NEHA KHARE FOR SALE OF A FARM HOUSE. THE DRAFT AGREEMENT WAS PREPARED FOR SALE OF FARM HOUSE WITH 'DEVELOPMENT WHICH INCLUDED GATE, BOUNDARY WALL, PLANTATION, CHARCOAL ROAD, MAI N GATE AND OTHER AMENITIES AND THIS AGREEMENT WAS NOT SIGNED BY THE CONCERNED PARTIES SINCE IT WAS ONLY A DRAFT AND SUBSEQUENTLY NEHA KHARE REFUSED FOR THE DEVELOPMENT WORK AND PURCHASED THE BARE FARM LAND WITH OUT DEVELOPMENT FOR RS.5,00,000/- AND PAID THE SAME TO THE APPELLAN T AND, AS SUCH, THERE WAS NO MONITORY RECEIPT OF RS.15,35,300/- TO THE AP PELLANT AS PRESUMED BY THE AO. 6.2. I HAVE SEEN THE RELEVANT COPIES OF THE AGREEME NT AND I FIND THAT THE SAME WAS A DRAFT NOT SIGNED BY THE CONCERNED PARTIES AND THE APPELLANT HAD NOT RECEIVED ANY SUM AS PRESUMED BY THE AO. IN T HE EVENT OF ANY DOUBT OR DISPUTE, BEFORE HOLDING ANY ADVERSITY AGAIN ST THE APPELLANT, THE CONCERNED PARTY VIZ. DR.NEHA KHARE SHOULD HAVE BEEN S UMMONED AND EXAMINED BY THE AO, TO FIND OUT TRUTH IN THE STATED F ACTS. THIS ESSENTIAL EXERCISE WAS NOT CARRIED OUT BY THE A.O. IN. THIS V IEW OF THE MATTER, THE ADDITION OF RS.11,35,000/- IN MY CONSIDERED VIEW, WA S UNSUBSTANTIATED ON THE STRENGTH OF EVIDENCE AND HENCE, THE SAME IS DE LETED. THE APPELLANT, ACCORDINGLY, GETS RELIEF OF RS.11,35,000 /- 7. FOR THE ASSESSMENT YEAR 2008-09, THE APPELLANT H AD ALSO OBJECTED TO THE ADDITION OF RS.34,50,000/- MADE BY THE AO VIDE PARA NO.2.10 OF THE ASSESSMENT ORDER APPEALED AGAINST. ACCORDING TO THE AO, PAGES NO.171 TO 174 OF LPS 3/21 WERE THE ORIGINA L COPY OF SALE LETTER OF LAND OF 3 ACRES SITUATED AT VILLAGE MANDORI. THIS LAND WAS JOINTLY HELD BY SHRI VIJIT RAJ PATNI, SHRI HUKUNT CHAND JAIN, SHRI K ISHORE KOTWANI AND JAWHARLAL KOTWANI. THEY HAD SOLD THIS LAND TO THE APPELLANT AND HARISH PATEL FOR TOTAL SALE CONSIDERATION OF RS.2,77 ,04,160 .ON THE DATE OF EXECUTION OF SALE LETTER RS.44,00,000/- WERE PAID I N CASH AND RS.6,00,000/- THROUGH CHEQUE BY THE APPELLANT AND SH RI. HARISH PATEL ON IT(SS) A NOS.227 TO 231/IND/2012 ACIT VS. VINOD SHARMA 21 22.03.2008. THE AO OBSERVED THAT ON ANOTHER LOOSE PA PER NO.39 OF LPS3/20 , IT WAS SEEN THAT SHRI ASHOK GOYAL HAD ACKNO WLEDGED PAYMENT OF RS.25,00,000/- ON 08,02.2008 TOWARDS THIS MANDORI LAND. BEFORE THE SEARCH TEAM, THE APPELLANT ADMITTED THAT THE LAND DE ED WAS DONE ALONG WITH HARISH PATEL AND SOURCE OF PAYMENT WOULD BE EX PLAINED AFTER ASKING FROM HARISH PATEL. THE APPELLANT ALSO ADMITTED HAVIN G PAID RS.25,00,000/- TO ASHOK GOYAL TOWARDS PART PAYMENT O F THE ABOVE SAID LAND DEAL. IN ASSESSMENT PROCEEDINGS BEFORE THE AO, IT WAS EXPLAINED THAT ONLY RS.6,00,000/- WAS PAID THROUGH CHEQUE AND SINCE THE DEAL WAS CANCELLED LATER, THE SUM PAID THROUGH CHEQUE WAS RE TURNED BY THE SELLERS. ACCORDING TO THE AO, THE APPELLANT FAILED TO EXPLAI N THE SOURCE OF PAYMENT MADE IN CASH BY HIM AS MENTIONED IN THE SALE LETTER AND IN THE ACKNOWLEDGEMENT ISSUED BY ASHOK GOYAL. SINCE THE APP ELLANT AND HARISH PATEL HAD JOINTLY INVESTED AMOUNT IN CASH. RS.34,50, 000/- WAS TREATED AND ASSESSED AS APPELLANT'S UNEXPLAINED INVESTMENT F OR THE AY.2008-09. 7.1. AS RIGHTLY SUBMITTED ON BEHALF OF THE APPELLANT , THE AFOREMENTIONED AGREEMENT WAS NOT SIGNED BY THE OTHER PARTIES NOR W AS IT EXECUTED OR ENFORCED. SINCE THE PROPOSAL WAS NOT MATERIALIZED, T HE ADVANCE OF RS.6,00,000/- WAS RETURNED AND IT STOOD REFLECTED I N THE BANK ACCOUNT OF THE APPELLANT. COPIES OF CONFIRMATIONS FROM ALL THE CONCERNED PARTIES, AFFIRMING THE AFOREMENTIONED FACTS, WERE FILED IN PRO CEEDINGS BEFORE THE AO, WHICH WERE NOT PROVED BY THE AO AS FALSE, THE A DVANCE RECEIVED BY THE SELLER, WAS RETURNED BY HIM THROUGH ACCOUNT PAY EE CHEQUE TO THE APPELLANT AS PER DETAILS AVAILABLE ON RECORD. IN THIS VIEW OF THE MATTER, THE IMPUGNED ADDITION OF RS.34,50,000/- MADE BY THE AO, ON EXTRANEOUS CONSIDERATIONS, UNSUBSTANTIATED ON THE STRENGTH OF C ORROBORATIVE EVIDENCE, IN MY CONSIDERED VIEW, IS UNSUSTAINABLE. THE SAME IS, THEREFORE, DELETED. THE APPELLANT, ACCORDINGLY, GETS RELIEF OF RS.34,50 ,000/-. 8. FOR THE ASSESSMENT YEAR 2009-10, THE APPELLANT H AD ALSO OBJECTED TO THE ADDITION OF RS.51,20,000/- MADE BY THE AO VIDE PARA NO.2.6 OF THE ASSESSMENT ORDER APPEALED AGAINST. ACCORDING TO THE AO, PAGES NO.58 TO 60 OF LPS 2/3 WERE COPY OF AGREEM ENT DATED 10,03.2008 BETWEEN HE APPELLANT AND SMT.SANGEETA MAL AVIYA, HIG-17, OLD SUBHASH NAGAR, BHOPAL FOR SALE OF FARM LAND NUMBE R DELUXE NO.4,5,10 AND 11. MEASURING 43,600 SQ.FT AT VILLAGE MANDORI. A S PER GOVERNMENT IT(SS) A NOS.227 TO 231/IND/2012 ACIT VS. VINOD SHARMA 22 RECORDS THE SAID LAND BELONGED TO THE JOINT FAMILY OF SHRI KHUBILAL MARAN WHO OWNED 3.12. ACRES OF AGRL, LAND AND AGREEMENT WAS ALREADY EXECUTED FOR DEVELOPMENT AND SALE OF THE SAID LAND BY THE APPEL LANT . THE SAID LAND WAS AGREED TO BE SOLD TO SANGEETA MALAVIYA FOR RS.6 3,20,000/-AND ADVANCE OF RS.6,00,000/- WAS PAID TO THE SELLER IE. RS.5,50,000/- CASH PAID 10.03.2008 AND R.S.50,000/- WAS PAID ON 10.03.2 008 BY CHEQUE NO.108818 THROUGH BANK OF INDIA, ARM COLONY, BHOPAL . OUT OF THE BALANCE PAYMENT, A SUM OF RS.17,20,000/- WAS AGREED TO BE P AID ON 30.04.2008 AND THE REMAINING BY 30.05.2008. ACCORDING TO THE A O, IN THE BOOKS OF ACCOUNT OF THE APPELLANT, THE APPELLANT HAD SHOWN S ALE OF THIS LAND ON POWER OF ATTORNEY GIVEN BY SHRI KHUBILAL MARAN ON CO MMISSION BASIS @. RS.5/- PER SQ.FT. TOTAL TRANSACTION SHOWN IN THE HA NDS OF KHUBILAL MARAN AND THE APPELLANT WAS FOR RS.12,00,000/- ONLY AND RE ST OF THE AMOUNT OF .RS.51,20,000/- WAS NOT SHOWN IN THE BOOKS OF ACCOU NT AND AS SUCH THIS SUM OF RS.51,20,000/- WAS TREATED AS UNDISCLOSED INCO ME OF THE APPELLANT ADDED TO THE INCOME RETURNED FOR THE AY.2009 -10. 8.1. AGAINST THE ABOVE, AS RIGHTLY SUBMITTED ON BEHA LF OF THE APPELLANT IN PROCEEDINGS BEFORE THE AO, SMT.SANGEETA MALAVIYA FE LT THAT AFTER DEVELOPMENT THE LAND WOULD BE VERY COSTLY AND AS SUCH SHE HAD NOT GONE FURTHER WITH THIS AGREEMENT AND HAD NOT PAID ANY PUR CHASE CONSIDERATION OR ADVANCEMENT AS MENTIONED IN THE AGREEMENT. COPY O F BANK STATEMENT OF SANGEETA MALAVIYA AVAILABLE ON RECORD ALSO SHOWS TH AT THE CHEQUE NO.108818 OF BANK OF INDIA WAS NOT CLEARED TILL DATE TO COMPLETE THE AGREEMENT. SMT.SANGEETA MALAVIYA HAS PURCHASED TWO B ARE FARRN LAND FROM ORIGINAL OWNER WITHOUT DEVELOPMENT WORK I.E. F ROM KHUBILAL MARAN OUT OF FOUR FARM HOUSES MENTIONED IN THE SAID AGREE MENT AND IN THIS DEA1, THE APPELLANT CHARGED BROKERAGE @ RS.5/- PER SQ.FT. FROM THE PARTY SINCE THE FARM LAND SOLD BY THE ORIGINAL OWNER TO SMT.SAN GEETA MALAVIYA WAS WITHOUT DEVELOPMENT WHICH FACT IS EVIDENT FROM COPY OF REGISTRY AND ALSO BANK STATEMENT OF THE SELLER AND CONFIRMATION OF THE BUYER, AVAILABLE ON RECORD. FROM THE ABOVE DOCUMENTARY EVIDENCES IT IS V ERY CLEAR THAT SMT.SANGEETA MALAVIYA PURCHASED THE LAND FROM KHUB ILAL MARAN AND DIRECTLY PAID THE CONSIDERATION TO HIM AND THE COMM ISSION RECEIVED BY THE APPELLANT WAS DULY ACCOUNT ACCOUNTED FOR IN THE BOOK S. THE AO HAD NOT PROVED FALSITY IN THE AFORESTATED FACTS AND CONFIRMA TION AVAILABLE ON RECORD. IN THIS VIEW THE MATTER THE ADDITION OF RS. 51,20,000/- MADE BY THE IT(SS) A NOS.227 TO 231/IND/2012 ACIT VS. VINOD SHARMA 23 AO, ON INCORRECT APPRECIATION OF FACTS CANNOT BE SU STAINED. THE SAME IS, THEREFORE, DELETED. THE APPELLANT ACCORDINGLY GET R ELIEF OF RS.51,20,000/- FOR THE AY 2009-10. 9. THE RELIEF ALLOWED TO THE APPELLANT, YEAR-WISE, I S SUMMARIZED BELOW: VIDE PARA NO ASSESSMENT YEARS 04-05 05-06 07-08 08-09 09-10 1.21. RS.11,60,366/- RS.14,69,801/- RS.3,27,757/- RS.21,92,334/- RS.20,72,173/- 2.2. RS.10,94,000/- 3.1 RS.12,00,000/- 4.1. 5.1. RS.18,20,000/- 6. RS.11,35,000/- 7.1 RS.34,50,000/- 8.1. RS.51,20,000/- TOTAL RS.11,60,366/- RS.25,63,801/- RS.15,27,757/- RS.85,97,334/- RS.71,92,173/- 10. IN THE RESULT, THE APPEALS ARE PARTLY ALLOWED. 4. NOW THE DEPARTMENT IS IN APPEAL BEFORE THE TRIBUNAL. 5. BEFORE US, THE LEARNED DR SUBMITTED THAT THERE WAS SEARCH AND SEIZURE OPERATION CONDUCTED AT THE RESIDENTI AL PREMISES OF THE ASSESSEE AND THE ASSESSEE IS CLOSELY ASSOCIATED WITH RAJESH RAJORA, IAS, AND FAMILY MEMB ERS AND DURING THE SEARCH, SOME INCRIMINATING DOCUMENTS WE RE FOUND AND THE ASSESSEE WAS FOUND TO BE A BROKER FOR SALE AND PURCHASE OF PROPERTY AND INVOLVED IN BUSINESS OF ROAD WORK FOR DEVELOPING COLONIES ON CONTRACT BASIS. THE ASSESSEE WAS NOT MAINTAINING BOOKS OF ACCOUNTS AND IT(SS) A NOS.227 TO 231/IND/2012 ACIT VS. VINOD SHARMA 24 DURING THE COURSE OF SEARCH, IT WAS FOUND THAT THE ASSE SSEE IS MAINLY IN THE BUSINESS OF SALE AND PURCHASE OF LAND ON COMMISSION BASIS. THE AGRICULTURAL LAND BOUGHT FROM TH E LAND OWNERS ON POWER OF ATTORNEY AND DEVELOPED INTO FAR M HOUSES. THESE FARM HOUSES WERE SHOWN TO THE INDIVIDU AL CUSTOMERS. THE POWER OF ATTORNEY IS TAKEN FROM THE LAN D OWNERS AND THEREAFTER THE LAND HAS BEEN SOLD, THEREFOR E, IT WAS ONLY A TRANSACTION OUT OF UNACCOUNTED INCOME. DURING THE COURSE OF SEARCH AND SEIZURE, POWER OF ATTORNEY WAS GIVEN BY HARISH PATEL IN RESPECT OF 8 ACRES OF LAND AND THE LAND WAS PURCHASED BY VINOD SHARMA AND HE HAS RECEIVED MONEY AND VINOD SHARMA HAS NOT ACCOUNTED THIS INCOME IN HIS BOOKS OF ACCOUNTS. THE VARIOUS LOOSE PAPERS SU GGEST THAT THE ASSESSEE HAS PURCHASED MANY LANDS IN VARIOUS VILLAGES AND THE DOCUMENTS SUGGEST THAT THE ASSESSEE HAS EARNED UNACCOUNTED INCOME. THEREFORE, THE ASSESSING OFFICER IS JUSTIFIED IN ADOPTING 10% NP RATE AND THE LEARNED IT(SS) A NOS.227 TO 231/IND/2012 ACIT VS. VINOD SHARMA 25 CIT(A) WITHOUT REFERRING TO THE DOCUMENTS HAS SIMPLY REDUCED THE NP. THE LEARNED CIT(A) WITHOUT CONSIDE RING THE CASH TRANSACTION, HAS GRANTED RELIEF. 6. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE ASSESSEE WHILE SUPPORTING THE ORDER OF THE LEARNED CIT(A), STRONGLY SUBMITTED THAT SINCE THE ASSESSEE HAS FILED AL L THE RELEVANT DOCUMENTS AND THE ASSESSING OFFICER HAS UTTER LY FAILED TO NEGATE THE SAME, THE LEARNED CIT(A) WAS VERY MUCH JUSTIFIED IN GRANTING RELIEF TO THE ASSESSEE. TH E LEARNED COUNSEL FOR THE ASSESSEE, THEREFORE, PRAYED T HAT THESE APPEALS DESERVE TO BE DISMISSED. 4. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE SIDES. WE FIND THAT IN THIS CASE THE REVENUE HAS NOT DISPUTED THE MAINTENANCE OF REGULAR BOOKS OF ACCOUNTS AN D AS SUCH HAS NOT APPLIED THE PROVISIONS OF SECTION 145( 3) OF THE ACT. WE FURTHER FIND THAT MOST OF THE TRANSACTIONS REFLECTED IN THE BOOKS OF ACCOUNTS WERE ROUTED THROU GH IT(SS) A NOS.227 TO 231/IND/2012 ACIT VS. VINOD SHARMA 26 BANKING CHANNELS. FURTHER, THE ASSESSING OFFICER HAD N OT BROUGHT ANY EVIDENCE ON RECORD TO CONCLUSIVELY PROVE THAT THE SCRIBBLING/JOTTINGS/ROUGH WORKINGS IN THE IMPUG NED LOOSE PAPERS, WERE IN FACT THE MATERIALIZED MONITORY TRANSACTIONS RELATING TO THE SUPPRESSED RECEIPTS OF TH E ASSESSSS. IN THE EVENT OF ANY DOUBT OR DISPUTE, BEFOR E ANY ADVERSITY WAS TO BE HELD AGAINST THE ASSESSSS, IT WAS INCUMBENT UPON THE AO TO HAVE SUMMONED AND EXAMINED THE CONCERNED PARTIES TO FIND OUT TRUTH IN THE MATTER , BUT THIS ESSENTIAL EXERCISE WAS NOT CARRIED OUT BY THE ASS ESSING OFFICER. THERE WAS NO BASIS AND EVIDENCE BROUGHT BY T HE AO ON RECORD TO SUBSTANTIATE SUCH HYPOTHETICAL AND ARBITRARY ESTIMATION OF RECEIPTS. DETAILS AVAILABLE ON REC ORD DEMONSTRATE THE FACT THAT IN A.Y. 2004-05, THERE WAS NO SALE OF FARM HOUSE OR PIECE OF LAND ON COMMISSION BASI S AND THAT THERE WERE NO SUBSTANTIAL CASH TRANSACTIONS IN ANY OF THE ASSESSMENT YEARS, UNDER CONSIDERATION. THE IT(SS) A NOS.227 TO 231/IND/2012 ACIT VS. VINOD SHARMA 27 ASSESSSS UNDISPUTEDLY IS A REAL-ESTATE BROKER AND HIS INTEREST WAS NORMALLY LIMITED TO 2% COMMISSION ON THE SALE PRICE OF THE LAND WHILE THE ASSESSING OFFICER ESTIMAT ED THE SAME @ 10% WHICH WAS HIGHLY UNREASONABLE AND UNSUBSTANTIATED ON THE STRENGTH OF CORROBORATIVE EVIDE NCE. RECORD ALSO EVIDENCES THE FACT THAT, IN PROCEEDINGS BE FORE THE A.O, THE ASSESSSS HAD SUBMITTED DETAILS OF THE LAND , PART OF THE LAND, PLOT, FARM LAND SOLD DURING EACH OF TH E ASSESSMENT YEARS, UNDER CONSIDERATION. 5. WE FURTHER FIND THAT DURING SEARCH, SOME POWERS OF ATTORNEYS WERE FOUND/SEIZED AND WHEN CONFRONTED BY TH E ASSESSING OFFICER IT WAS EXPLAINED ON BEHALF OF THE ASS ESSEE THAT THE PROPERTY COVERED BY THE POWER OF ATTORNEY BE LONGED TO THE OWNERS AND SINCE THE ASSESSSS HAD TO SEEK A PROSPECTIVE BUYER, THE SAME WAS HELD BY THE ASSESSSS O N THE BASIS OF POWER OF ATTORNEY, WITHOUT RECEIVING ANY CONSIDERATION FROM THE CONCERNED LAND OWNERS AND AS AND IT(SS) A NOS.227 TO 231/IND/2012 ACIT VS. VINOD SHARMA 28 WHEN THE SAID PROPERTY WAS SOLD TO THE PROSPECTIVE BU YER, THE TITLE WAS TRANSFERRED FROM THE LAND OWNER TO THE B UYER AND THE SALE PROCEEDS RECEIVED WERE DIRECTLY TRANSFERR ED FROM THE BUYER TO THE OWNER AND IF THEY WERE RECEIVE D BY THE ASSESSSS, THE SAME WERE TRANSFERRED TO THE OWNER AF TER DEDUCTING THE BROKERAGE DUE TO THE ASSESSSS AND AS SUCH FOR ALL PRACTICAL PURPOSES, THE ASSESSSS WAS NOT THE OWN ER OF SUCH PROPERTIES COVERED BY THE POWER OF ATTORNEY. HON'BLE SUPREME COURT IN ITS DECISION REPORTED IN 2 19 ITR 330 (SC) HELD THAT THERE CANNOT BE TAX ON INCOME ON PRESUMPTIVE BASIS. INCOME IN FACT EARNED, IS ONLY TAXAB LE AND NOT, THE ONE PRESUMED TO HAVE BEEN EARNED. MERE REJECTION OF THE BOOKS OF ACCOUNT WOULD NOT MEAN THAT IT MUST NECESSARILY LEAD TO ADDITIONS TO THE RETURNED INC OME. IN OUR OPINION, THE RESULTS SHOWN ON THE BASIS OF ACC OUNT BOOKS MAINTAINED IN REGULAR COURSE OF BUSINESS, SHOULD NOT HAVE BEEN SUBSTITUTED BY IRRELEVANT, PRESUMPTIVE AND IT(SS) A NOS.227 TO 231/IND/2012 ACIT VS. VINOD SHARMA 29 ERRONEOUS CONSIDERATIONS. IT IS A SETTLED POSITION OF LAW THAT UNLESS THERE IS SOME EVIDENCE TO PROVE THE CONTRARY, ESTIMATED ADDITION ON PRESUMPTIONS, IS UNSUSTAINABLE ON FACTS AND IN LAW PARTICULARLY WHEN THE IMPUGNED ASSESSMENTS WERE CLAIMED TO HAVE BEEN MADE AS SCRUTINY ASSESSMENTS COMPLETED AFTER SEARCH. THE IMPUGNED ADDITIONS MADE ON MERE GUESS-WORK AND WITHOUT ANY COGENT EVIDENCE ARE ALSO OPPOSED TO THE SUPREME COURT DECISION IN 26 ITR 775 (SC)(SUPRA) AND THE DECISION O F ALL. IHIC IN 199 ITR 247 (ALL.) AND RAJ. HC DECISION IN 2 11 ITR178 (RAJ.). FOR THE REASONS EXTENSIVELY ENUMERAT ED ABOVE, WE HAVE ABSOLUTELY NO HESITATION IN HOLDING THAT THE ESTIMATION OF RECEIPTS AND NP, AS MADE BY THE AO, FOR E ACH OF THE ASSESSMENT YEARS, UNDER CONSIDERATION, WERE UNSUBSTANTIATED ON THE STRENGTH OF CORROBORATIVE EVIDE NCE BROUGHT AGAINST THE ASSESSSS ON RECORD. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ESTIMATED ADDITION MADE B Y IT(SS) A NOS.227 TO 231/IND/2012 ACIT VS. VINOD SHARMA 30 THE AO IN EACH OF THE ASSESSMENT YEARS, UNDER CONSIDERATION ARE UNSUSTAINABLE IN LAW. THE SAME ARE, THEREFORE, DELETED. 6. SO FAR AS THE ASSESSMENT YEAR 2005-06 IS CONCERNED, WE FIND THAT THE ASSESSING OFFICER HAS MADE THE ADDITI ON OF RS.10,94,000/-. ACCORDING TO THE AO, LOOSE PAPER MAR KED AS LPS 3/24 CONTAINING DETAILS OF PROPERTIES, WERE FOU ND AND SEIZED. ; PAGES NO.78 TO 97 WAS COPY OF SALE DEED DATED 31.03,2005; THE SELLER WAS MLS LINKERS SECURITIES LT D., 22, VAISHALI NAGAR, BHOPAL AND THE PURCHASER WAS SHRI ANCHIT GOYAL AND THE ASSESSSS VINOD SHARMA. STAMP DUTY WAS RS,1,88,000/- AND SELLING PRICE OF RS.20,00,000/- WAS PAID THROUGH CHEQUE NO.463012 DATED 30.05.2005 OF CENTRAL BANK OF INDIA, IMAMI GATE BRANCH, BHOPAL FOR RS.10,00,000/- AND CHEQUE NO.787195 DATED 30.05.2005 OF PNB BHOPAL FOR RS.10,00,000/-; THE ASSESSSS HAD PURCHASED THIS PROPERTY JOINTLY WITH SHRI ANCHIT GOY AL. THE IT(SS) A NOS.227 TO 231/IND/2012 ACIT VS. VINOD SHARMA 31 AO OBSERVED THAT THE BANK ACCOUNT OF THE ASSESSSS DID N OT REFLECT DEBIT OF SUCH PAYMENT. SINCE THE PAYMENT MAD E BY THE ASSESSSS TO M/S LINKERS SECURITY LIMITED WAS NOT VERIFIABLE FROM THE BANK ACCOUNT OF THE ASSESSSS, THE T OTAL INVESTMENT OF RS.10,94,000/- WAS TREATED AS UNEXPLAIN ED INVESTMENT AND ASSESSED AS SUCH IN THE HANDS OF THE ASSESSSS BY THE ASSESSING OFFICER. ON APPEAL, THE LEARN ED CIT(A) GRANTED RELIEF OF RS.10,94,000/-. 7. BEFORE US, THE LEARNED DR RELIED UPON THE ORDER OF THE ASSESSING OFFICER WHEREAS THE LEARNED COUNSEL FOR TH E ASSESSEE RELIED UPON THE ORDER OF THE LEARNED CIT(A). 8. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE SI DES. WE FIND THAT THE ASSESSING OFFICER HAD NOT EXAMINED TH E SELLER NOR HAD HE BROUGHT ANY EVIDENCE ON RECORD TO DISPROVE THE GENUINENESS OF THE CONFIRMATION FILED B Y THE ASSESSSS. THE ASSESSSS PROVED TO HAVE SUFFICIENT FUND S AVAILABLE AS PER HIS BOOKS OF ACCOUNT FOR MAKING THE IT(SS) A NOS.227 TO 231/IND/2012 ACIT VS. VINOD SHARMA 32 IMPUGNED PAYMENT AND, AS SUCH, THE IMPUGNED ADDITION MADE BY THE ASSESSING OFFICER IS UNSUSTAINABLE. WE, THEREFORE, DISMISS THIS GROUND OF APPEAL OF THE REVEN UE. 9. FOR THE ASSESSMENT YEAR 2007-08, THE REVENUE HAD ALSO TAKEN THE GROUND THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION OF RS. 12 LACS MAD E BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTMEN T. 10. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE SIDES . WE FIND THAT THE PURCHASE PRICE OF RS.12,00,000/- WAS PAID BY THE ASSESSSS AS UNDER :- (A) CHEQUE NO.903506 DATED 26.04.2006 OF PNB, NEHRU NAGAR BRANCH OF VINOD SHARMA (AO HAS WRONGLY MENTIO NED AS UNION BANK OF INDIA, WHERE AS IT PNB); (B) CHEQUE NO.340893 DATED 27.01.2006 OF VINOD SHAR MA ISSUED FOR THE MAKING DEMAND DRAFT IN FAVOUR OF SUY OGE MISHRA FROM PNB NEHRU NAGAR BRANCH; AND (C) CHEQUE NO.340893 DTD. 27.01.2006 OF VINOD SHARMA ISSUED FOR THE MAKING DEMAND DRAFT IN FAVOUR OF MIS HRA FROM PNB NEHRU NAGAR BRANCH. TO SUBSTANTIATE THESE FACTS, THE ASSESSEE FILED COPY OF RELEVANT BANK STATEMENTS AND CONFIRMATIONS FROM THE IT(SS) A NOS.227 TO 231/IND/2012 ACIT VS. VINOD SHARMA 33 CONCERNED PARTIES BEFORE THE ASSESSING OFFICER AND NO NE OF THEM WERE PROVED BY THE ASSESSING OFFICER AS FALSE. ALL THE PAYMENTS WERE MADE THROUGH ACCOUNT PAYEE CHEQUES AND EVIDENT. WE, THEREFORE, FIND NO FLAW IN THE ORDER O F THE LEARNED CIT(A) AND CONFIRM THE SAME. 11. FOR THE ASSESSMENT YEAR 2008-09, THE REVENUE HAS ALSO OBJECTED TO THE DELETION OF ADDITION OF RS.18,20 ,000/- AS MADE BY THE ASSESSING OFFICER. 12. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE SIDE S. WE FIND THAT ACCORDING TO THE AO, PAGE NO.185. TO 188 OF LPS 3/21 WAS COPY OF POWER OF ATTORNEY GIVEN BY SHRI AJAY JOSHI AND SMT.ASHA JOSHI TO SHRI HARISH PATEL IN RESPE CT OF 8 ACRES OF LAND AT VILLAGE FATEHPUR DOBRA. ACCORDING TO SHRI HARISH PATEL, THIS LAND WAS PURCHASED BY THE ASSESSSS AND POWER OF ATTORNEY WAS ISSUED IN HIS NAME TO SELL THE L AND ON COMMISSION BASIS. ACCORDING TO SHRI AJAY JOSHI, H E HAD RECEIVED SALE CONSIDERATION OF RS.17,00,000/- ONLY TH OUGH IT(SS) A NOS.227 TO 231/IND/2012 ACIT VS. VINOD SHARMA 34 THE TOTAL DEED WAS FOR RS.20,00,000/-. AS PER THE ASSE SSEE, THE COST OF LAND FOR HIM WAS RS.18,20,000/-. THE ASSE SSING OFFICER NOTED THE DETAILS OF PAYMENT MADE BY THE ASSES SSS TO SHRI AJAY JOSHI WERE NOT GIVEN AND HENCE, THE TOT AL INVESTMENT OF RS.18,20,000/- WAS TREATED AS UNEXPLAIN ED INVESTMENT BY THE ASSESSING OFFICER AND ASSESSED AS SU CH. ON APPEAL, THE LEARNED CIT(A) GRANTED RELIEF OF THE ADDI TION MADE BY THE ASSESSING OFFICER AGAINST WHICH THE REVENU E IS IN APPEAL BEFORE THE TRIBUNAL. WE FIND THAT THE ASSESSE E HAS MADE THE PAYMENT TO SHRI AJAY JOSHI AS UNDER :- DATE BANK ACCOUNT CHEQUE AMOUNT 07.03.2007 MP RAJYA SAHKARI BANK 386129 3.00 LAKHS 20.03.2007 MP RAJYA SAHKARI BANK 386133 0.2 LAKHS MP RAJYA SAHKARI BANK 386131 2.00 LAKHS 26.03.2007 AXIS BANK 422568 6.00 LAKHS 10.04.2007 PNB 480640 5.00 LAKHS 16.07.2007 SBI 890299 TOTAL 18.20 LAKHS WE FIND THAT COPY OF BANK STATEMENT OF THE SELLER AND RECEIPT OF CONFIRMATION WITH EXPLANATION FROM THE SELL ER WERE FILED IN PROCEEDINGS BEFORE THE AO TOGETHER WI TH ALL THE IT(SS) A NOS.227 TO 231/IND/2012 ACIT VS. VINOD SHARMA 35 RELEVANT BANK ACCOUNTS. PAYMENT WAS MADE ON 26.03.2007 THROUGH MADHAN MOHAN SHARMA, PAYMENT DATED 10.04.2007 WAS MADE BY SHRI S.D.SHARMA AND PAYMENT DATED 16.07.2007 WAS PAID BY M.N.SINGH ON BEHALF OF VINOD SHARMA. WE ARE OF THE VIEW THAT WITHOUT PROVING FALSITY IN THE AFOREMENTIONED FACTS EVIDENT FROM THE R ELEVANT BANK STATEMENTS, THE IMPUGNED ADDITION WAS MADE BY THE ASSESSING OFFICER ON THE BASIS THAT SAME HAVE BEEN MADE FROM UNDISCLOSED INCOME OF THE ASSESSEE. WE, THEREFO RE, CONFIRM THE ORDER OF THE LEARNED CIT(A) ON THIS ISSU E. 13. FURTHER, FOR THE ASSESSMENT YEAR 2008-09, THE REVENUE HAD ALSO OBJECTED TO THE RELIEF OF RS.11,35,0 00/- GIVEN BY THE LEARNED CIT(A) BY DELETING THE ADDITION MADE BY THE ASSESSING OFFICER. 14. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE S IDES. WE FIND THAT ACCORDING TO THE AO, PAGES NO.61 AND 62 O F LPS 2/3 SEIZED DURING SEARCH, WAS A SALE AGREEMENT DATED IT(SS) A NOS.227 TO 231/IND/2012 ACIT VS. VINOD SHARMA 36 11.05.2008 BETWEEN THE ASSESSSS DR.NEHA KHARE, E-8/104 BASANT KUNJ, ARERA COLONY, BHOPAL FOR SALE OF FARM LAND DELUXE 12 MEASURING 10900SQ.FT FOR RS.16,35,000/-. A S PER AGREEMENT ADVANCE OF RSI,00,000/- WAS GIVEN, TO THE SE LLER ON 11.05.2008 IN CASH AND BALANCE OF RS.I5,35,000/- WAS AGREED TO BE PAID BY 10.08.2008. ON PAGE NO.77 IT WAS MENTIONED THAT RS.1,00,000/- WAS PAID AS ADVANCE AND E PAID IN THREE MONTHS. THE AO NOTED THAT IN THE BOOKS OF ACCOUNT OF THE ASSESSSS, TOTAL RECEIPTS FROM SMT.NEHA KHARE WERE SHOWN CITRS.5,00,000/- AND, AS SUCH, RS. 11,35,000/- WAS TREATED AS UNDISCLOSED INCOME OF THE ASSESSSS AND ADDED TO THE INCOME OF THE ASSESSEE. ON APPEAL, THE ADDITION WAS DELETED BY THE LEARNED CIT(A) AGAINST WHICH THE REVENUE IS IN APPEAL BEFORE US. 15. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE S IDES. WE FIND THAT THE ASSESSEE HAD DRAFTED A PROFORMA AGREEMENT WITH NEHA KHARE FOR SALE OF A FARM HOUSE. THE IT(SS) A NOS.227 TO 231/IND/2012 ACIT VS. VINOD SHARMA 37 DRAFT AGREEMENT WAS PREPARED FOR SALE OF FARM HOUSE WITH 'DEVELOPMENT WHICH INCLUDED GATE, BOUNDARY WALL, PLANTATION, CHARCOAL ROAD, MAIN GATE AND OTHER AMENITIES AND THIS AGREEMENT WAS NOT SIGNED BY THE CONCERNED PARTIES SINCE IT WAS ONLY A DRAFT AND SUBSEQUENTLY NEHA KHARE REFUSED FOR THE DEVELOPMENT WORK AND PURCHASED T HE BARE FARM LAND WITHOUT DEVELOPMENT FOR RS.5,00,000/- AN D PAID THE SAME TO THE ASSESSSS AND, AS SUCH, THERE WAS NO MONITORY RECEIPT OF RS.15,35,300/- TO THE ASSESSSS AS PRESUMED BY THE AO. IN THE EVENT OF ANY DOUBT OR DIS PUTE, BEFORE HOLDING ANY ADVERSITY AGAINST THE ASSESSSS, THE CONCERNED PARTY VIZ. DR.NEHA KHARE SHOULD HAVE BEEN SUMMONED AND EXAMINED BY THE AO, TO FIND OUT TRUTH IN THE STATED FACTS. THIS ESSENTIAL EXERCISE WAS NOT CARRIE D OUT BY THE A.O. IN THIS VIEW OF THE MATTER, WE HAVE NO ALT ERNATE BUT TO CONFIRM THE FINDINGS OF THE LEARNED CIT(A). W E, THEREFORE, CONFIRM THE SAME. IT(SS) A NOS.227 TO 231/IND/2012 ACIT VS. VINOD SHARMA 38 16. FURTHER THE REVENUE HAS OBJECTED TO THE ADDITION OF RS.34,50,000/- MADE BY THE ASSESSING OFFICER. ACCORD ING TO THE AO, PAGES NO.171 TO 174 OF LPS 3/21 WERE THE ORIGINAL COPY OF SALE LETTER OF LAND OF 3 ACRES SITUATED AT VILLAGE MANDORI. THIS LAND WAS JOINTLY HELD BY SHRI VIJ IT RAJ PATNI, SHRI HUKUNT CHAND JAIN, SHRI KISHORE KOTWANI AND JAWHARLAL KOTWANI. THEY HAD SOLD THIS LAND TO THE ASSESSSS AND HARISH PATEL FOR TOTAL SALE CONSIDERATION OF RS.2,77,04,160 .ON THE DATE OF EXECUTION OF SALE LETT ER RS.44,00,000/- WERE PAID IN CASH AND RS.6,00,000/- THROUGH CHEQUE BY THE ASSESSSS AND SHRI. HARISH PATEL ON 22.03.2008. THE AO OBSERVED THAT ON ANOTHER LOOSE PAPE R NO.39 OF LPS3/20 , IT WAS SEEN THAT SHRI ASHOK GOYAL H AD ACKNOWLEDGED PAYMENT OF RS.25,00,000/- ON 08,02.2008 TOWARDS THIS MANDORI LAND. BEFORE THE SEARCH TEAM, THE ASSESSSS ADMITTED THAT THE LAND DEED WAS DONE ALONG WITH HARISH PATEL AND SOURCE OF PAYMENT WOULD BE EXPLAINED IT(SS) A NOS.227 TO 231/IND/2012 ACIT VS. VINOD SHARMA 39 AFTER ASKING FROM HARISH PATEL. THE ASSESSSS ALSO ADMITTE D HAVING PAID RS.25,00,000/- TO ASHOK GOYAL TOWARDS PART PAYMENT OF THE ABOVE SAID LAND DEAL. IN ASSESSMENT PROCEEDINGS BEFORE THE AO, IT WAS EXPLAINED THAT ONLY RS.6,00,000/- WAS PAID THROUGH CHEQUE AND SINCE THE DEAL WAS CANCELLED LATER, THE SUM PAID THROUGH CHEQUE WAS RETURNED BY THE SELLERS. ACCORDING TO THE AO, THE AS SESSSS FAILED TO EXPLAIN THE SOURCE OF PAYMENT MADE IN CASH BY HIM AS MENTIONED IN THE SALE LETTER AND IN THE ACKNOWLEDGEMENT ISSUED BY ASHOK GOYAL. SINCE THE ASSESSSS AND HARISH PATEL HAD JOINTLY INVESTED AMOUNT IN CASH. RS.34,50,000/- IT WAS TREATED AND ASSESSED AS ASSESSSS'S UNEXPLAINED INVESTMENT. 17. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE S IDES. WE FIND THAT THE AFOREMENTIONED AGREEMENT WAS NOT SIGNE D BY THE OTHER PARTIES NOR WAS IT EXECUTED OR ENFORCED. SINCE THE PROPOSAL WAS NOT MATERIALIZED, THE ADVANCE OF IT(SS) A NOS.227 TO 231/IND/2012 ACIT VS. VINOD SHARMA 40 RS.6,00,000/- WAS RETURNED AND IT STOOD REFLECTED IN THE BANK ACCOUNT OF THE ASSESSSS. COPIES OF CONFIRMATIONS F ROM ALL THE CONCERNED PARTIES, AFFIRMING THE AFOREMENTION ED FACTS, WERE FILED IN PROCEEDINGS BEFORE THE AO, WHIC H WERE NOT PROVED BY THE AO AS FALSE, THE ADVANCE RECEIVED BY THE SELLER, WAS RETURNED BY HIM THROUGH ACCOUNT PAYEE CH EQUE TO THE ASSESSSS AS PER DETAILS AVAILABLE ON RECORD. IN T HIS VIEW OF THE MATTER, THE IMPUGNED ADDITION OF RS.34,50,000/- MADE BY THE AO, ON EXTRANEOUS CONSIDERATIONS, UNSUBSTANTIATED ON THE STRENGTH OF CORROBORATIVE EVIDENCE. WE, THEREFORE, SUSTAIN THE OR DER OF THE LEARNED CIT(A) ON THIS ISSUE. 18. SO FAR AS ASSESSMENT YEAR 2009-10 IS CONCERNED, TH E REVENUE HAS OBJECTED TO THE DELETION OF ADDITION OF RS.51,20,000/- MADE BY THE ASSESSING OFFICER. ACCORD ING TO THE ASSESSING OFFICER, PAGES NO.58 TO 60 OF LPS 2 /3 WERE COPY OF AGREEMENT DATED 10,03.2008 BETWEEN HE ASSESSSS IT(SS) A NOS.227 TO 231/IND/2012 ACIT VS. VINOD SHARMA 41 AND SMT.SANGEETA MALAVIYA, HIG-17, OLD SUBHASH NAGAR, BHOPAL FOR SALE OF FARM LAND NUMBER DELUXE NO.4,5,10 AND 11. MEASURING 43,600 SQ.FT AT VILLAGE MANDORI. AS PER GOVERNMENT RECORDS THE SAID LAND BELONGED TO THE JOIN T FAMILY OF SHRI KHUBILAL MARAN WHO OWNED 3.12. ACRES OF AGRL, LAND AND AGREEMENT WAS ALREADY EXECUTED FOR DEVELOPMENT AND SALE OF THE SAID LAND BY THE ASSESSSS . THE SAID LAND WAS AGREED TO BE SOLD TO SANGEETA MALAVIYA FOR RS.63,20,000/-AND ADVANCE OF RS.6,00,000/- WAS PAID TO THE SELLER IE. RS.5,50,000/- CASH PAID 10.03.2008 AND R.S.50,000/- WAS PAID ON 10.03.2008 BY CHEQUE NO.108818 THROUGH BANK OF INDIA, ARM COLONY, BHOPAL. OUT OF THE BALANCE PAYMENT, A SUM OF RS.17,20,000/- W AS AGREED TO BE PAID ON 30.04.2008 AND THE REMAINING BY 30.05.2008. ACCORDING TO THE AO, IN THE BOOKS OF ACC OUNT OF THE ASSESSSS, THE ASSESSSS HAD SHOWN SALE OF THIS LAN D ON POWER OF ATTORNEY GIVEN BY SHRI KHUBILAL MARAN ON IT(SS) A NOS.227 TO 231/IND/2012 ACIT VS. VINOD SHARMA 42 COMMISSION BASIS @. RS.5/- PER SQ.FT. TOTAL TRANSACTION SHOWN IN THE HANDS OF KHUBILAL MARAN AND THE ASSESSSS WAS FOR RS.12,00,000/- ONLY AND REST OF THE AMOUNT OF .RS.51,20,000/- WAS NOT SHOWN IN THE BOOKS OF ACCOUNT AND AS SUCH THIS SUM OF RS.51,20,000/- WAS TREATED AS UNDISCLOSED INCOME OF THE ASSESSSS WHICH WAS ADDED BY THE ASSESSING OFFICER TO THE INCOME OF THE ASSESSEE. 19. ON APPEAL, THE LEARNED CIT(A) DELETED THE ADDITION AGAINST WHICH THE REVENUE IS IN APPEAL BEFORE THE TRIBU NAL. 20. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE S IDES. WE FIND THAT DURING THE PROCEEDINGS BEFORE THE AO, S MT. SANGEETA MALAVIYA STATED THAT SHE FELT THAT AFTER DEVELOPMENT THE LAND WOULD BE VERY COSTLY AND AS SUCH SHE HAD NOT GONE FURTHER WITH THIS AGREEMENT AND HAD N OT PAID ANY PURCHASE CONSIDERATION OR ADVANCEMENT AS MENTIONED IN THE AGREEMENT. COPY OF BANK STATEMENT OF SANGEETA MALAVIYA AVAILABLE ON RECORD ALSO SHOWS THAT THE IT(SS) A NOS.227 TO 231/IND/2012 ACIT VS. VINOD SHARMA 43 CHEQUE NO.108818 OF BANK OF INDIA WAS NOT CLEARED TILL D ATE TO COMPLETE THE AGREEMENT. SMT.SANGEETA MALAVIYA HAS PURCHASED TWO BARE AND FROM ORIGINAL OWNER WITHOUT DEVELOPMENT WORK I.E. FROM KHUBILAL MARAN OUT OF FOUR FARM HOUSES MENTIONED IN THE SAID AGREEMENT AND IN THIS DEA1, THE ASSESSSS CHARGED BROKERAGE @ RS.5/- PER SQ.FT. FROM THE PARTY SINCE THE FARM LAND SOLD BY THE ORIGINAL OWNER TO SMT.SANGEETA MALAVIYA WAS WITHOUT DEVELOPMENT WHICH FACT IS EVIDENT FROM COPY OF REGISTRY AND ALSO B ANK STATEMENT OF THE SELLER AND CONFIRMATION OF THE BUYER, AVAILABLE ON RECORD. FROM THE ABOVE DOCUMENTARY EVIDENCES IT IS VERY CLEAR THAT SMT.SANGEETA MALAVIYA PURCHASED THE LAND FROM KHUBILAL MARAN AND DIRECTLY PAID THE CONSIDERATION TO HIM AND THE COMMISSION RECEIVED BY THE ASSESSSS WAS DULY ACCOUNT ACCOUNTED FOR IN THE BOO KS. WE, THEREFORE, CONFIRM THE ACTION OF THE LEARNED CIT( A) IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER. IT(SS) A NOS.227 TO 231/IND/2012 ACIT VS. VINOD SHARMA 44 21. IN THE RESULT, THE APPEALS OF THE REVENUE ARE DISMISSE D. THE ORDER HAS BEEN PRONOUNCED IN OPEN COURT ON 10 TH JANUARY, 2017. SD/- SD/- ( ..!') (..) #$ (O.P.MEENA) (D.T.GARASIA) ACCOUNTANT MEMBER JU DICIAL MEMBER *'& / DATED : 10 TH JANUARY, 2017. DN/