Sri Gouri Shankar Jain, Kolkata V. ACIT, Central Circle - XX, Kolkata

ITSSA 23/KOL/2007

• Counselvise Citation: [2011] 124 COUNSELVISE.COM (IT) 7857 (ITAT-KOLKATA)
• Duration Of Justice: 4 year(s) 8 month(s) 26 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 29-12-2011
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 22-04-2010
• Assessment Year: misc
• Appeal Filed On: 02-04-2007
• Court: TRIBUNAL
• Department Lawyers: S K ROY
• Assessee Lawyers: S M SURANA
• Keywords: Search and seizure; Loose papers; Document seized; Reasonable cause; Block assessment; Documents seized
• Section: 143(3); 142(1); 131; 132

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA () BEFORE , /AND , . ! . '# ) [BEFORE SRI MAHAVIR SINGH, JM & SHRI C. D. RAO, AM] ( #$ % $& ) ' / I.T(SS).A NO. 23/KOL/2007 # () *+/ BLOCK PERIOD: 01.04.1990 TO 10.08.2000 SRI GOURI SHANKAR JAIN V ASSTT. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-XX, KOLKATA. (-. /APPELLANT ) (/0-./ RESPONDENT ) & ( #$ % $& ) ' / I.T(SS).A NO. 1/KOL/2006 # () *+/ BLOCK ASSESSMENT YEAR: 01.04.1990 TO 10.08.2000 ASSTT. COMMISSIONER OF INCOME-TAX, V GOURI SHANKA R JAIN CENTRAL CIRCLE-XX, KOLKATA. (-. /APPELLANT ) (/0-./ RESPONDENT ) DATE OF HEARING: 08.11.2011 DATE OF PRONOUNCEMENT: 29.12.2011 FOR THE APPELLANT: SHRI S. M. SURANA FOR THE RESPONDENT: SHRI S. K. ROY '1 / ORDER PER MAHAVIR SINGH, JM ( , , , , ) THESE CROSS APPEALS ARE ARISING OUT OF ORDER OF CIT (A), CENTRAL-III, KOLKATA IN APPEAL NO.351/CC-XX/CIT(A)C-III/02-03 DATED 31.10.2005. BL OCK ASSESSMENT WAS FRAMED BY ACIT, CENTRAL CIRCLE-XX, KOLKATA U/S. 158BC R.W.S. 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR THE BLOCK PERIOD 01.0 4.1990 TO 10.08.2000 VIDE HIS ORDER DATED 29.08.2002. 2. AT THE OUTSET, ASSESSEES APPEAL IS DELAYED BY 4 51 DAYS AND ASSESSEE HAS FILED CONDONATION PETITION DATED 26.3.2007 ALONG WITH AFF IDAVIT. THE CONTENTS OF THE SAID AFFIDAVIT ARE AS UNDER: I, SUDHIR KUMAR JAIN, SON OF LT. CHETAN DAS JAIN, AGED ABOUT 55 YEARS RESIDING AT 797, TAKE TOWN, BLOCK A, KOLKATA-700 089 BY PROFESSION ADVOCATE DO HEREBY SOLEMNLY AFFIRM AND DECLARE AS UNDER: 2 IT(SS)A 23 /K/2007 & 1/K/2006 GOURI SHANKAR JAIN BLOCK A.Y.1991-92 TO 2001-02 THAT I AM AN ADVOCATE BY PROFESSION, I LOOK AFTER A ND REPRESENT SRI GOURI SHANKAR JAM BEFORE THE ASSESSING OFFICERS, COMMISSIONER OF THE INCOME TAX (A) AND BEFORE THE HONBLE ITAT, KOLKATA. THAT I APPEARED BEFORE THE HONBLE ITAT IN THE APPE AL FILED BY THE SAID GOURI SHANKAR JAM IN THE ITA NO. 12/KOL/2005. THE HONBLE ITAT RE STORED THE ISSUE WITH REGARD TO THE MAINTAINABILITY OF THE APPEAL FILED BY THE ASSESSEE (BEFORE THE LD. CIT(A) TO THE FILE OF LD. C.I.T.(A). THAT THE LD. C.I.T.(A) RE-DECIDED THE SAID ISSUE VI DE HIS ORDER 31.10.2005 WITH REGARD TO THE MAINTAINABILITY OF APPEAL IN FAVOUR FOR THE AS SESSEE AND SO FAR AS THE MERITS WERE CONCERNED SIMPLY FOLLOWED HIS EARLIER ORDER ONLY. THAT ON RECEIPT OF THE SAID ORDER I ADVISED SRI GOU RI SHANKAR JAIN THAT NO FRESH APPEAL SHALL BE REQUIRED TO BE FILED BEFORE THE ITAT AGAIN ST THE ORDER OF THE LD. C.I.T.(A) DATED 31.10.2005 AND THE EARLIER APPEAL NO. 12/KOL/2005 S HALL BE REVIVED ON MERITS FOR WHICH A PETITION SHALL BE MADE AFTERWARDS. THAT I GAVE THE ADVICE GENUINELY AND I WAS OF THE I MPRESSION THAT THE EARLIER APPEAL BEFORE THE ITAT SHALL BE REVIVED AND NO SECOND APPE AL SHALL BE NEEDED TO BE FILED AGAINST THE FRESH ORDER PASSED BY THE LD. CIT(A) SINCE THE LD. CIT(A) DID NOT PASS ANY FRESH ORDER WITH REGARD TO THE ISSUES ON MERITS BUT RELIE D ON THE ORDER PASSED BY HIM EARLIER. THAT IN FACT ON MY ADVICE THE SAID GOURI SHANKAR JA IN HAS FILED A MISC. PETITION ON 17.01.2007 FOR REVIVAL OF THE SAID EARLIER APPEAL. THAT I HAVE NOW BEEN ADVISED BY MY SENIORS THAT THE EARLIER APPEAL BEING APPEAL NO. 12(SS) 2005 CANNOT BE REVIVED AND A FRESH APPEAL HA S TO BE FILED AGAINST THE ORDER DATED 31.10.2005 PASSED BY THE C.I.T.(A). THAT THE AFORESAID STATEMENT IS TRUE TO THE BEST OF MY KNOWLEDGE AND BELIEF. 3. ON THIS AFFIDAVIT, LD. COUNSEL FOR THE ASSESSEE ARGUED THAT ONCE THE ASSESSEE WAS ADVISED BY HIS COUNSEL SHRI SUDHIR KR. JAIN, ADVOCA TE THAT APPEAL BEARING NO. 12(SS)/KOL/2005 WILL BE REVIVED ON MERITS AND ADVISED TO FILE MISCE LLANEOUS PETITION FOR RECALLING OF THE ORDER. IN VIEW OF THIS, HE ARGUED THAT THERE IS REASONABLE CAUSE FOR NOT FILING THE APPEAL IN TIME AND HENCE, HE WAS UNDER GENUINE IMPRESSION THAT NO APPE AL IS TO BE FILED IN TERM OF THE ORDER OF CIT(A) IN APPEAL NO.351/CC-XX/CIT(A)C-3/2002-03 ORD ER DATED 31.10.2005. SUBSEQUENTLY, THE ASSESSEE WAS ADVISED BY SR. LAWYER THAT ONLY A FRESH APPEAL HAS TO BE FILED AGAINST THIS ORDER AND NO MISC. PETITION WILL LIE AGAINST ITATS ORDER NO. 12/KOL/2005. ON THIS, LD. CIT, DR OPPOSED THE STAY PETITION BUT HE COULD NOT MAKE OUT ANY CASE. IN VIEW OF THE ABOVE REASONS, WE ARE CONVINCED THAT THE ASSESSEE WAS UND ER BONAFIDE BELIEVE THAT IN VIEW OF MISC. PETITION ITATS ORDER IN APPEAL NO. 12/KOL/2005 WIL L BE RECALLED AND THEREBY WILL BE NO FURTHER APPEAL IS TO BE FILED AGAINST CIT(A)S ORDE R DATED 31.10.2005. IN VIEW OF THE ABOVE REASONS, WE CONDONE THE DELAY OF 451 DAYS AND ADMIT THE APPEAL OF THE ASSESSEE. 3 IT(SS)A 23 /K/2007 & 1/K/2006 GOURI SHANKAR JAIN BLOCK A.Y.1991-92 TO 2001-02 4. THE FIRST INTERCONNECTED AND COMMON ISSUE IN THE SE CROSS APPEALS IS AS REGARD TO THE ORDER OF CIT(A) RESTRICTING THE ADDITION AT RS.2,46 ,061/- OUT OF THE ADDITION MADE BY AO AT RS.46,26,358/-. FOR THIS, ASSESSEE IN HIS APPEAL N O. IT(SS)A 23/K/2007 HAS RAISED FOLLOWING THREE GROUNDS: 2. FOR THAT THE LD. CIT(A) CENTRAL CIRCLE-III, KOL KATA ERRED IN CONFIRMING THE ORDER OF LD. ACIT, CC-XX, KOL THAT THE TRANSACTIONS NOTED IN PAGE 11 TO 18 OF JF-11 MARKED RB ACCOUNT RELATED TO THE APPELLANT IN HIS INDIVIDUAL CAPACITY AND AS SUCH ARE HIS UNDISCLOSED INCOME. 3. FOR THAT THE LD. CIT(A)CENTRAL CIRCLE-III, KOLKA TAS ORDER SUSTAINING THE ADDITIONS TO THE EXTENT OF RS.2,46,061/- ON THE BASIS OF PAGES 1 1 TO 18 OF JF-11 IS CONTRADICTORY TO THE OBSERVATIONS MADE BY HIMSELF IN HIS ORDERS. 4. FOR THAT THE LD. CIT(A) CENTRAL CIRCLE-III, KOLK ATA ERRED FOR UPHOLDING THE ADDITIONS OF 2 ZEROS BY THE A.OS. FOR THIS, REVENUE IN IT(SS)A NO. 1/K/2006 HAS RAISE D FOLLOWING GROUND NO.4: THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED ON FACTS AS WELL IN LAW IF ALLOWING RELIEF OF RS.43,80,297/- OU T OF TOTAL ADDITION OF RS.46,26,358/- MADE IN RESPECT OF NOTING ON SEIZED DOCUMENTS MARKE D PAGES 11 TO 18 OF JF-11 WITHOUT APPRECIATING THE DETAILED REASONS GIVEN BY AO IN HI S ASSESSMENT ORDER. 5. THE BRIEF FACTS LEADING TO THE ABOVE ISSUE ARE T HAT A SEARCH AND SEIZURE OPERATION WAS CONDUCTED ON ASSESSEES RESIDENCE AS WELL AS BUSINE SS PREMISES ON 10.08.2000 U/S. 132 OF THE ACT BY REVENUE. DURING THE COURSE OF SEARCH BOOKS OF ACCOUNT MARKED AS GS-1 TO GS-3 WERE SEIZED FROM ASSESSEES RESIDENCE ALONG WITH CASH OF RS.69,000/-, JEWELLERY OF RS.6,00,349/- AND IVPS OF RS. 30,200/-. THE AO IN VIEW OF SEARCH PRO CEEDINGS ISSUED NOTICE U/S. 158BC OF THE ACT ON 05.07.2001, WHICH WAS SERVED ON 10.07.2001. SUBSEQUENTLY, NOTICE U/S. 142(1) WAS ISSUED AND BLOCK ASSESSMENT WAS FRAMED. AS REGARDS TO THE ABOVE ISSUE, THE A.O NOTED FROM PAGE NO. 11 TO 18 OF LOOSE PAPER BUNCH MARKED AS JF -11 SEIZED FROM THE OFFICE OF M/S. JAIN FINANCE CORPORATION, A PROPRIETARY CONCERN OF ASSES SEES BROTHER SHRI P. L. JAIN. EVEN PAGE NO. 12 AND 16 ARE ALSO WRITTEN ON THE REVERSE SIDE. AC CORDING TO AO, SHRI P. L. JAIN VIDE QUESTION NO. 224 OF HIS STATEMENT DATED 14.02.2001 RECORDED U/S. 131 OF THE ACT STATED THAT RB ACCOUNT, RELATING TO THIS DOCUMENT JF-11, RELATES TO SHRI G. S. JAIN AND IT IS RECORDED BY HIM ONLY. HE FURTHER DEPOSED THAT THESE TRANSACTIONS ARE MADE IN CASH AND TWO ZEROS ARE SUPPRESSED FROM THESE TRANSACTIONS. ON THESE, ASSESSEE REPLIED VID E LETTER DATED 22.07.2002 THAT PAGES 11 TO 18 OF LOOSE PAPERS MARKED JF-11 SEIZED FROM THE OFFICE OF SHRI PREM LAL JAIN BELONGS TO ASSESSEES FATHERS INVESTMENTS AND ALSO JOINT FAMILY DISPUTES AND ENTRIES OF HIS FATHER MADE BY HIM. THE ASSESSEE REPLIED THAT THESE TRANSACTIONS ARE IN THE NATURE OF SUSPENSE ACCOUNT ON BEHALF OF HIS FATHERS INVESTMENTS AND THESE PAYMENTS HAD BEEN RE CORDED AS AND WHEN RECEIVED BY HIM, BUT 4 IT(SS)A 23 /K/2007 & 1/K/2006 GOURI SHANKAR JAIN BLOCK A.Y.1991-92 TO 2001-02 ON BEHALF OF HIS FATHER. THE ASSESSEE FURTHER VIDE LETTER DATED 22.07.2002 STATED THAT HE DOES NOT HAVE ANY RECORDS WHATSOEVER OF THESE ENTRIES, SINCE THESE ARE VERY OLD ENTRIES. THE ASSESSEE FURTHER, VIDE LETTER DATED 23.08.2002, EXPLAINED TH AT THESE DOCUMENTS WERE FOUND FROM THE PREMISES OF SHRI P. L. JAIN AND HE IS NOT RESPONSIB LE TO EXPLAIN THE SAME. IT WAS EXPLAINED THAT THE DOCUMENTS MARKED AS JF-11 FOUND FROM THE OFFICE OF SHRI P. L. JAIN IS RB ACCOUNT BELONGS TO ASSESSEES FATHER AND NOT TO THE ASSESSEE. BUT THE AO AFTER COMPUTING THE ENTIRE TRANSACTION ON THESE PAGES 11 TO 18 OF JF-11 TREATED THE ENTIRE TRANSACTION BELONGING TO ASSESSEE AT RS.46,26,358/- AND TREATED THE SAME AS UNDISCLOSED INCOME OF THE ASSESSEE. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A), WHO RESTRI CTED THE ADDITION AT RS.2,46,061/- BY GIVING FOLLOWING FINDING: IN VIEW OF THE ABOVE, IT IS HELD THAT THE ENTIRE S EIZED DOCUMENTS OF THE ASSESSEE MUST BE ACCEPTED. IF THAT IS SO ADDITION TO THE EX TENT MENTIONED IN THIS ORDER CAN BE SUSTAINED ON THE MATERIALS MENTIONED ABOVE. THE LOOSE PAPERS WERE MAINTAINED AND KEPT BY THE ASSESSEE AND HIS BROTHER SHRI PREM LAL JAIN FOR THEIR PRIVATE KNOWLEDGE AND INFORMATION AND WERE NOT MEANT FOR DISCLOSING T O THE DEPARTMENT, IF THE SEIZED DOCUMENTS OF THE ASSESSEE ARE TO BE REJECTED IN TOT O, THEN NO ADDITION CAN BE MADE ON THE BASIS OF LOOSE PAPERS SINCE THOSE WOULD BE DUMB AND IRRELEVANT PAPERS AS DISCUSSED IN THE EARLIER PART OF THE ORDER. IF THE SEIZED DOCUMENTS OF THE ASSESSEE ARE ACCEPTED IN TOTO, THEN CONTENTS OF THE DOCUMENTS ARE TO BE ACCEPTED AND TH EN ADDITION TO THE EXTENT MENTIONED WOULD BE JUSTIFIED. NO DOUBT, THE PRESUMPTION TO T HE CORRECTNESS OF THE DOCUMENTS CAN BE REBUTTED BY THE ASSESSING OFFICER, BUT THE ASSESSIN G OFFICER HAS NOT BEEN ABLE TO BRING ANY MATERIAL ON THE RECORD FOR REBUTTAL. FURTHER, THER E IS NOTHING ON THE RECORD TO SUGGEST THAT CONTENTS OF THE SEIZED DOCUMENTS PAGES 11 TO 18 OF JF-11 WERE FALSE. THE ASSESSING OFFICER SHOULD HAVE TAKEN INTO ACCOUN T BOTH THE DEBIT AND CREDIT SIDE AND ADDED THE DIFFERENCE TO THE UNDISCLOSED INCOME. AC CORDINGLY, ADDITION TO THE EXTENT OF RS.246061 IS SUSTAINED. AGGRIEVED, BOTH CAME IN APPEAL BEFORE US. 6. WE HAVE HEARD RIVAL PARTIES AND HAVE GONE THROUG H FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE ASSESSEE HAS ENCLOSED COMPLETE SEI ZED PAPERS MARKED AS JF-11 PAGES 11 TO 18 IN HIS PAPER BOOK AT PAGES 48 TO 55. THESE DOCUMEN TS WERE FOUND FROM ASSESSEES BROTHER SHRI P. L. JAIN, PROPRIETARY CONCERN M/S. JAIN FINANCE C ORPORATION AND SHRI P. L. JAIN VIDE HIS DEPOSITION U/S. 131 OF THE ACT ON 14.02.2001 STATED THAT THESE ARE TRANSACTIONS ON ACCOUNT OF RB ACCOUNT SUPPRESSING TWO ZEROS AND PERTAINS TO ASSES SEE SHRI BARABABU AND SHRI PREMBABU. ASSESSEE ALSO EXPLAINED VIDE LETTERS DATED 22.07.20 02 AND 23.08.2002 THAT THESE PAPERS ARE IN HIS HAND WRITING BUT ARE INVESTMENTS MADE BY ASSESS EES FATHER, TRANSACTIONS RELATING TO JOINT FAMILY DISPUTES AND ENTRIES RECORDED ON ACCOUNT OF AMOUNT RECEIVED FROM HIS FATHER DURING THE PERIOD NOTED IN THE ABOVE PAPERS. WE FIND FROM THE BLOCK ASSESSMENT ORDER THAT THE ASSESSING OFFICER ON THE BASIS OF STATEMENT OF SHRI P. L. JAI N MADE ADDITION BY APPLYING TWO ZEROS TO EACH TRANSACTION AND HENCE, ASSESSED UNDISCLOSED INCOME TO THE ASSESSEE AT RS.46,26,358/- ON THE 5 IT(SS)A 23 /K/2007 & 1/K/2006 GOURI SHANKAR JAIN BLOCK A.Y.1991-92 TO 2001-02 BASIS OF ABOVE MARKED DOCUMENT JF-11. THE ASSESSEE CATEGORICALLY REPLIED BEFORE ASSESSING OFFICER AND EVEN BEFORE CIT(A) THAT THESE DOCUMENTS PERTAIN TO ASSESSEES FATHER AND TRANSACTIONS RELATING TO FAMILY DISPUTE. WE, AFTER GOING THROUGH THESE DOCUMENTS FOUND AND SEIZED, ARE ANNEXED IN ASSESSEES PAPER BOOK AT PAG ES 48 TO 55, ARE OF THE VIEW THAT THE ASSESSING OFFICER COULD HAVE IDENTIFIED THESE TRANS ACTIONS, REASON BEING THESE ARE TRANSACTIONS RECORDED IN THE SHAPE OF JOURNAL LEDGER BUT FROM TH E VERY READING OF THE JOURNAL LEDGER THIS RB ACCOUNT PERTAINS TO BARABABU AND PREM BABU AND NOT TO ASSESSEE. IT WAS EXPLAINED BY SHRI P. L. JAIN DURING HIS DEPOSITION U/S. 131 OF THE ACT T HAT THESE TRANSACTIONS PERTAINS TO BABABABU AND PREMBABU AND HE WAS NOT FURTHER QUERIED WHETHER THESE PARTICULAR TRANSACTIONS HAVE ANY RELATION WITH THE ASSESSEE OR NOT. EVEN OTHERWISE, THE ASSESSING OFFICER DESPITE HAVING CLEAR CUT ENTRIES IN DIFFERENT NAMES NEVER TRIED TO GET T HE EXPLANATION FROM SHRI P. L. JAIN, PARTICULARLY THE NATURE OF TRANSACTIONS. IN THIS REGARD, WE ARE OF THE VIEW THAT THE REVENUE COULD NOT ESTABLISH THE OWNERSHIP OF THESE PAPERS AS TO WHOM IT PERTAINS WHETHER TO ASSESSEE OR TO PREMBABU OR TO BARABABU. EVEN THE ASSESSING OFFICE R HAS NOT TRIED TO FIND OUT THE REAL OWNERSHIP OF THESE DOCUMENTS EVEN THOUGH THIS WAS F OUND DURING THE COURSE OF SEARCH FROM THE PREMISES OF SHRI P. L. JAIN, THE BROTHER OF ASSESSE E. ONCE THE OWNERSHIP IS NOT ESTABLISHED, THE DOCUMENTS CANNOT BE ADDED IN THE HANDS OF THE ASSES SEE. IN VIEW OF THE ABOVE, WE HAVE NO HESITATION IN TREATING THESE DOCUMENTS AS NOT PERTA INING TO THE ASSESSEE AND DELETE THE ADDITION IN ENTIRETY. THE APPEAL OF THE REVENUE IS DISMISSE D ON THIS ISSUE AND ASSESSEES APPEAL IS ALLOWED. 7. THE NEXT ISSUE IN REVENUES APPEAL IS AGAINST TH E ORDER OF CIT(A IN ADMITTING APPEAL AS MAINTAINABLE. FOR THIS, REVENUE HAS RAISED FOLLOWI NG GROUND NO.1: 1.THAT FROM THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE ASSESSEE PAID ADMITTED TAX BEFORE FILING OF APPEAL AND THEREFORE, APPEAL IS MAINTAINABLE. 8. AT THE OUTSET, THE LD. CIT,DR FAIRLY STATED THAT HE IS NOT PRESSING THIS ISSUE, HENCE THE SAME IS DISMISSED AS NOT PRESSED. 9. THE NEXT ISSUE IN THIS APPEAL OF REVENUE IS AGAI NST THE ORDER OF CIT(A) DELETING THE ADDITION OF TRANSACTIONS NOTED IN SEIZED DIARY GS-3 . FOR THIS, REVENUE HAS RAISED FOLLOWING GROUND NO.2: 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD. CIT(A) ERRED ON FACTS AS WELL AS IN LAW IN DELETING THE ADDITION OF RS.19 ,00,000/- MADE IN RESPECT OF CONNECTIONS NOTED IN SEIZED DIARY G-3 AND OWNED UP BY THE ASSES SEE, WITHOUT APPRECIATING THE DETAILED REASONS GIVEN BY THE A.O. IN HIS ASSESSMEN T ORDER. 6 IT(SS)A 23 /K/2007 & 1/K/2006 GOURI SHANKAR JAIN BLOCK A.Y.1991-92 TO 2001-02 10. THE BRIEF FACTS LEADING TO THE ABOVE ISSUE ARE THAT THE ASSESSING OFFICER AFTER GOING THROUGH THE SEIZED DIARY MARKED AS GS-3, SEIZED FRO M THE RESIDENCE OF ASSESSEE NOTED THAT THE ASSESSEES SON IN HIS DEPOSITION U/S. 132(4) OF THE ACT ON 10.08.2000 ADMITTED THAT THIS DIARY HAS BEEN WRITTEN BY HIM I.E. SHRI ANIL JAIN AND IT IS ROUGH ACCOUNTING OF HIS BUSINESS ACTIVITY. IT RELATES TO ALL RECEIPTS AND PAYMENTS OF HIS BUSINES S AND ENTRIES ARE REFLECTED IN THE BOOKS OF ACCOUNT. THE ASSESSEE CLARIFIED VIDE LETTER DATED 23.08.2002 AS UNDER: 4. I HAVE ALREADY CLARIFIED MY POSITION RELATING T O THE DIARY OF SHRI ANIL JAIN SEIZED FROM MY RESIDENCE AND MARKED GS-3, THE SAID DIARY W AS BEING MAINTAINED BY MY SON SRI ANIL JAIN, WHO IS RESIDING WITH ME AND MEANT FO R NOTINGS THE TRANSACTIONS RELATING TO THE OFFICE AND FOR NOTINGS REMINDERS MY SON SHRI AN IL JAIN USED TO BRING THE DIARY AT HIS RESIDENCE IN NIGHT FOR HIS NOTINGS AND TO CARRY THE SAME TO OFFICE ON THE NEXT WORKING DAY IN HIS BRIEF CASE. THE ENTIRE DIARY IS RELATING TO OFFICE MATTERS. 5. AS DESIRED BY YOU, I AM ALSO ENCLOSING HEREWITH THE DETAILS OF THE NOTINGS IN PAGES NO. 75, 93,136 AND ALSO SOME OF THE NOTINGS IN PAGES NO . 36, 43,45,63,70,72,88,90 AND 104 OF G-3 ALONG WITH THE DETAILS OF THE TRANSACTIONS I N BRIEF AND THE NAMES OF THE PERSONS AND /OR FIRMS TO WHICH THE TRANSACTIONS BELONGS. O UT OF THESE TRANSACTIONS ONLY THE UNDER NOTED TRANSACTIONS ARE RELATED TO ME IN THE I NDIVIDUAL CAPACITY. ANNEXURE C. 11. THE ASSESSEE CONTENDED THAT THE TRANSACTIONS AR E RELATING TO GOVIND AGARWAL OF RS.3 LACS, SUGANDH CONSTRUCTION PVT. LTD. RS.2,10,600/- AND MFL RS. 2 LACS PERTAINS TO HIM AND APART FROM THAT, NO OTHER TRANSACTIONS PERTAINS TO ASSESSEE BUT THE ASSESSING OFFICER NOTED THE FOLLOWING TRANSACTIONS PERTAINING TO THE ASSESSEE A ND MADE ADDITION OF RS.19 LACS AS UNDISCLOSED INCOME OF THE ASSESSEE FOR THE BLOCK PE RIOD. NAME AMOUNT OF GS-3 PAGE NO. CALENDAR DATE OF RELEVANT PAGE OF GS-3 AGARWAL 3,00,000/- PAGE-75 27.04.2000 SUGANDH 10,00,000/- PAGE-93 19.05.2000 MFL 8,00,000/- PAGE-93 19.05.2000 AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A ). CIT(A) DELETED THE ADDITION BY GIVING FOLLOWING FINDING: THE ABOVE MENTIONED SEIZED DOCUMENTS ARE PAGES OF THE DIARIES WRITTEN BY SHRI ANIL JAIN WHICH WAS SEIZED FROM THE PREMISES OF JAIN HIR E PURCHASE CO. LTD. THE SAID COMPANY HAD THE INITIAL ONUS OF EXPLAINING THE SEIZ ED DIARY UNDER SECTION 132(4A). THE ASSESSING OFFICER DID NOT VERIFY FROM SHRI ANIL JAN THOUGH HE WAS ASSESSED TO TAX BY THE SAME ASSESSING OFFICER AS TO WHETHER HE HAD WRITTEN THE DIARY AND WHAT WAS THE SIGNIFICANCE OF THE CONTENTS OR ENTRIES IN THE DIAR Y. THE PRINTED DATES MENTIONED ON THE TOP OF THE SAID PAGES HAVE NO RELEVANCE AS ONE CANN OT INFER FROM THESE DATES THAT TRANSACTION DATES HAD ANYTHING TO DO WITH THE PRINT ED DATES MENTIONED ON THE SEIZED PAGES. IF THE ASSESSING OFFICER WANTED TO DRAW ANY INFERENCE ON THE BASIS OF THESE PAGES OF THE DIARY AS A FIRST STEP HE SHOULD HAVE ASCERTA INED FROM SHRI ANIL JAIN AS WHETHER OR NOT HE WAS THE AUTHOR OF THE ENTRIES MADE IN THE DI ARY AND ON OWNING UP THE DIARY BY HIM, THE ASSESSING OFFICER SHOULD HAVE ASKED FOR HI S EXPLANATION OF THE ENTRIES MADE THEREIN. IN CASE, HE WAS SATISFIED THAT THESE ENTRI ES REPRESENTED HIS UNDISCLOSED INCOME HE COULD HAVE INITIATED PROCEEDINGS UNDER SECTION 1 58BD AGAINST SHRI ANIL JAIN. THE 7 IT(SS)A 23 /K/2007 & 1/K/2006 GOURI SHANKAR JAIN BLOCK A.Y.1991-92 TO 2001-02 ASSESSING OFFICER HAS NOT EXPLAINED AS TO WHAT WAS THE NEXUS OF THE ASSESSEE WITH THE ENTRIES MADE IN A DIARY BY SOMEONE WHO WAS AN INCOM E TAX ASSESSEE ASSESSED BY HIM. IN VIEW OF THE ABOVE, IMPUGNED ADDITION OF RS.19,00 ,000/- IS DELETED. AGGRIEVED, NOW REVENUE IS IN APPEAL BEFORE US. 12. WE HAVE HEARD RIVAL SUBMISSIONS AND HAVE GONE T HROUGH FACTS AND CIRCUMSTANCES OF THE CASE. THE ASSESSEE ADMITTED THE TRANSACTIONS NOTED IN GS-3 IN RESPECT TO GOVIND AGARWAL A SUM OF RS. 3 LACS. IT WAS EXPLAINED THAT A SUM OF RS. 5 LAC WAS ADVANCED TO M/S. DEPO, A PROPRIETARY CONCERN HAVING ITS OFFICE AT 30A, NIRMA L CHANDRA STREET, KOLKATA ON 10.12.1996 BY ACCOUNT PAYEE CHEQUE. THE PROPRIETOR OF THE SAID F IRM MR. GOVIND AGARWAL SIGNED THE PROMISSORY NOTE AS PROPRIETOR OF M/S. DEPO AND THIS IS OUT OF EXPLAINED TRANSACTIONS. THE LD. COUNSEL FOR THE ASSESSEE BEFORE US FILED COPY OF RE TURN OF INCOME WHEREBY IN THE BALANCE SHEET OF THE YEAR ENDING 31.3.1998 THIS AMOUNT OF DEPO OF RS.5 LACS IS DISCLOSED IS ENTERED. THE NEXT TRANSACTION OF SUGANDH CONSTRUCTION PVT. LTD. AMOUN TING TO RS.2,10,600/- WAS EXPLAINED BY STATING THAT A TOTAL SUM OF RS.2,50,000/- WAS LENT BY ASSESSEE TO SUGUNDH CONSTRUCTION PVT. LTD. ON 12.06.1995 AND OUT OF THE SAID SUM OF RS.2.50 LA CS A SUM OF RS.40,000/- WAS RECEIVED BACK ON 02.09.1997. HENCE, THE BALANCE SUM OF RS.2,10,0 00/- WAS REMAINED WITH THAT PARTY. IT WAS EXPLAINED THAT THIS IS ALSO REFLECTED IN THE BALANC E SHEET FOR THE YEAR ENDING 31.3.1998. SIMILARLY, TRANSACTION WITH MFL AMOUNTING TO RS.2 L ACS IS TAGADA TO BE MADE TO MFL FOR REALISATION OF THE AMOUNT LENT AGAINST FIXED DEPOSI T RECEIPT. THE ASSESSEE FILED COPIES OF FIXED DEPOSIT RECEIPT AGAINST WHICH THIS AMOUNT WAS RECEI VED. THE ASSESSING OFFICER HAS NOT DOUBTED THESE TRANSACTIONS BUT MADE ADDITION OF THE ABOVE N OTED TRANSACTIONS OF RS.19 LACS. WE FIND THAT THE SEIZED DOCUMENTS ARE WRITTEN BY SHRI ANIL JAIN AND SEIZED FROM THE PREMISES OF JAIN HIRE PURCHASE CO. LTD., WHERE SHRI ANIL JAIN HAS BU SINESS INTEREST. THE ASSESSING OFFICER HAS NOT INITIATED ANY ACTION ON THE SAID COMPANY AND IN ITIAL ONUS, EVEN THOUGH DISCHARGED BY THE ASSESSEE, NO ACTION WAS TAKEN BY ASSESSING OFFICER AGAINST THAT COMPANY. AS ANIL JAIN, AS WELL AS JAIN HIRE PURCHASE CO. LTD, ARE ASSESSED TO TAX BY THE SAME ASSESSING OFFICER, THE ASSESSING OFFICER SHOULD HAVE ASKED EXPLANATION FROM THESE PA RTIES AND NOT FROM THE ASSESSEE. THE ASSESSEE IS NOT THE OWNER OF THE DIARY AND EVEN ENT RIES DO NOT RELATE TO ANY DATE. AFTER GOING THROUGH THE DOCUMENTS WE FIND THAT THE DATES TAKEN BY THE AO FOR ASSESSING UNDISCLOSED INCOME OF THE ASSESSEE FOR THE BLOCK PERIOD IS THAT OF CAL ENDAR MENTIONED IN THE DIARY. IT MEANS THAT ON THESE ENTRIES, WHICH ARE ANNEXED IN ASSESSEES PAPE R BOOK AT PAGES 44 AND 45, WHICH REVEALED THAT NO DATE WHATSOEVER ARE WRITTEN AGAINST THE ENT RIES AND THE ASSESSING OFFICER HAS TAKEN THE DATES PRINTED IN THE DIARY, WHICH HAS BEEN MADE ON THE BASIS FOR MAKING ADDITION OF UNDISCLOSED 8 IT(SS)A 23 /K/2007 & 1/K/2006 GOURI SHANKAR JAIN BLOCK A.Y.1991-92 TO 2001-02 INCOME. IN VIEW OF THE ABOVE DISCUSSION, WE ARE OF THE VIEW THAT THE CIT(A) HAS RIGHTLY DELETED THE ADDITION AND WE CONFIRM THE SAME. THIS ISSUE O F REVENUES APPEAL IS DISMISSED. 13. THE NEXT ISSUE OF REVENUES APPEAL IS AGAINST T HE ORDER OF CIT(A) DELETING THE ADDITION OF RS.8 LACS IN RESPECT OF PAYMENT MADE TO SULOCHAN ABAI. FOR THIS, REVENUE HAS RAISED FOLLOWING GROUND NO.3: THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED ON FACT AS WELL AS IN LAW IN DELETING THE ADDITION OF RS.8,00, 000/- MADE IN RESPECT OF PAYMENT TO SULOCHANABAI, WITHOUT APPRECIATING THE DETAILS REAS ONS GIVEN BY THE A.O. IN HIS ASSESSMENT ORDER. 14. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUG H FACTS AND CIRCUMSTANCES OF THE CASE. THE AO WHILE FRAMING BLOCK ASSESSMENT NOTICED FROM SEIZED DOCUMENT GS-1 PAGE 34 THAT AN AMOUNT OF RS.8 LAC HAS BEEN PAID TO SULOCHANABAI. HENCE, HE REQUIRED THE ASSESSEE TO EXPLAIN THE TRANSACTIONS. ASSESSEE EXPLAINED THAT THIS PAP ER IS NEITHER RELATED TO HIM NOR HE IS CONNECTED WITH SULOCHANABAI IN ANY WAY. WHEN ASSES SEE WAS INFORMED THAT THESE PAPERS WERE SEIZED FROM HIS RESIDENCE AND ONUS IS ON HIM TO EXP LAIN, IT WAS STATED THAT THE ALLEGED NOTING REGARDING SULOCHANABAI IS IN NO WAY RELATED TO HIM. ON THIS, THE AO TREATED THE ENTIRE TRANSACTION OF RS.8 LAC AS UNDISCLOSED INCOME OF TH E ASSESSEE. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A), WHO DELETED THE ADDITION BY G IVING FOLLOWING FINDING: THERE IS NO EVIDENCE THAT THE ABOVE LOSE PAPERS WA S WRITTEN BY THE APPELLANT OR BY SOMEONE ON BEHALF OF THE APPELLANT. THE APPELLANT HAS NOT BEEN FOUND TO BE THE AUTHOR OF THE LOOSE PAPER. IN ABSENCE OF CORROBORATIVE EVIDE NCE LINKING THE APPELLANT WITH THE CONTENTS OF THE SAID LOOSE PAPER AND SULOCHANABAI, NO ADVERSE INFERENCE CAN BE DRAWN AGAINST THE APPELLANT. IN VIEW OF THE ABOVE, IT IS CONCLUDED THAT FROM THE ABOVE SEIZED PAPER GS-34, IT IS OBVIOUS THAT IT HAS NO RELATION WITH THE APPELLANT AND NO A DVERSE INFERENCE IN ABSENCE OF CORROBORATIVE EVIDENCE CAN BE DRAWN AGAINST THE APP ELLANT. THERE IS NO EVIDENCE OTHER THAN THE LOOSE PAPER GS-34 TO ESTABLISH THAT ANY PA YMENT WAS MADE TO SULOCHANABAI WHO WAS NOT FOUND. HAD SHE CONFIRMED HAVING RECEIVED T HE IMPUGNED PAYMENTS THERE WOULD HAVE SOME MATERIAL TO CORROBORATE THE CONTENTS OF G S-43. THE IMPUGNED ADDITION OF RS.8,00,000/- IS DELETED. AGGRIEVED, REVENUE CAME IN APPEAL BEFORE. 15. WE FIND FROM THE ABOVE SEIZED PAPER GS-1, PAGE 34, WHICH BEARS STAMP IN THE NAME OF SOME RAJ WITH SOME NARRATION OF GARDEN AND BELOW WH ICH SOME ADDRESS IS NOTED AS 402, BHAVAN. AGAINST ONE ENTRY THE NAME SULOCHANABAI IS WRITTEN, WHICH CLEARLY REVEALED THAT ONLY ONE ENTRY RELATES TO SULOCHANABAI BUT THIS DOES NOT PROVE THAT THIS DOCUMENT BELONGS TO ASSESSEE. THE ASSESSEE VIDE LETTER DATED 22.07.200 2 CLEARLY DENIED THAT THIS DOCUMENT DOES NOT BELONG TO HIM AND THIS DOES NOT RELATE OR CONNECTED TO HIM IN ANY WAY. THE AO HAS NOT VERIFIED 9 IT(SS)A 23 /K/2007 & 1/K/2006 GOURI SHANKAR JAIN BLOCK A.Y.1991-92 TO 2001-02 FROM THE ABOVE ADDRESS NOTED IN THE DOCUMENT, WHETH ER ANY SUCH PERSON RESIDE IN THE ADDRESS OR NOT. IT SEEMS THAT THIS IS A VERY OLD DOCUMENT AND SOME ENTRIES ARE NOTED, WHICH CANNOT BE CO- RELATED TO THE ASSESSEE IN ANY WAY. EVEN THE AO HA S NOT TRIED TO READ THIS DOCUMENT CORRECTLY THAT IN SOME OF THE ENTRIES IT IS WRITTEN THAT AMOU NT GIVEN AND IN SOME ENTRIES NOTHING IS NARRATED. ONCE THE AO IS UNABLE TO CORROBORATE THE SE ENTRIES OR COULD NOT FIND OUT THE TRUE NATURE, THE DOCUMENT CANNOT BE TREATED AS DOCUMENT HAVING ENTRIES RELATING TO THE ASSESSEE. IN VIEW OF THESE, WE CONFIRM THE ORDER OF CIT(A) AND T HIS ISSUE OF REVENUES APPEAL IS DISMISSED. 16. THE NEXT ISSUE OF THIS APPEAL OF REVENUE IS AGA INST THE ORDER OF CIT(A) DELETING THE ADDITION OF RS.22,91,560/- OUT OF THE ADDITION OF R S.27,54,536/- BEING THE AMOUNT OF CREDIT SIDE OF TRIAL BALANCE AS PER PAGE 6 OF GF-13. FOR THIS, REVENUE HAS RAISED FOLLOWING GROUND NO.5: THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED ON FACT AS WELL IN LAW IN DELETING THE ADDITION TO THE EXTENT OF RS.22,91,560/- OUT OF TOTAL ADDITION OF RS.27,54,357/- BEING THE AMOUNT OF CREDIT SIDE O F THE TRIAL BALANCE AS PER PAGE 6 OF JF-13, WITHOUT APPRECIATING THE DETAILED REASONS GI VEN BY THE A.O. IN HIS ASSESSMENT ORDER. 17. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUG H FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTICED FROM LOOSE PAPERS MARKED AS JF-13 THAT THE TRANSACTIONS BELONGING TO ABC & CO., FOUND FROM THE OFFICE OF JAIN FINANCE CORPORATION, PROPRIETARY CONCERN OF ASSESSE ES BROTHER SHRI P. L. JAIN THAT THESE TRANSACTIONS BELONG TO THE ASSESSEE. THIS WAS BASE D ON THE STATEMENT OF SHRI P. L. JAIN RECORDED ON 14.02.2002 U/S. 131 OF THE ACT THAT PAGE 6 CONTA INS TRIAL BALANCE OF ABC & CO. CONTROLLED BY HIS ELDER BROTHER SHRI G. S. JAIN, THE ASSESSEE. THE ASSESSEE VIDE REPLY DATED 22.07.2002 EXPLAINED AS UNDER: AS REGARD PARAGRAPH 12 RELATING TO THE EXPLANATION SOUGHT BY YOU IN RESPECT OF PAGE NO. 6 OF LOOSE PAPER BUNCH MARKED JH-13 SEIZED IN T HE OFFICE OF JAIN FINANCIAL CORPORATION, THE PROPRIETORSHIP CONCERN OF MR. P. L . JAIN, IT CONTAINS TRIAL BALANCE OF ABC CO. FOR THE PERIOD 1.4.98 TO 31.3.99, I WOULD L IKE TO INFORM YOU THAT THIS TRIAL BALANCE OF SPARK DEALERS PVT. LTD. IT RELATES TO T HE SUMMARY OF TRANSACTIONS RELATING TO THE SAID FIRM M/S. SPARK DEALERS PVT. LTD. THE ASSESSEE FURTHER REPLIED VIDE LETTER DATED 23.0 8.2002 AS UNDER: AS ALREADY INFORMED BY ME THAT I DO NOT HAVE ANY R ECORDS OF TRANSACTIONS AS REFERRED TO BY SRI P. L. JAINS STATEMENT IN YOUR LETTER AND I DO NOT OWN ANY OF THEM. THE ENTIRE NOTINGS WERE FOUND FROM THE OFFICE OF SHRI P. L. JA IN AND IT IS THE RESPONSIBILITY OF P. L. JAIN TO EXPLAIN THE SAME. I AM NOT IN ANY WAY RESP ONSIBLE AND/OR ACCOUNTABLE FOR THE SAME. ON THE BASIS OF STATEMENT OF SHRI P. L. JAIN AND RE PLY OF ASSESSEE, AO TREATED THESE TRANSACTIONS PERTAINING TO THE ASSESSEE ON PROTECTIVE BASIS AND ON SUBSTANTIVE BASIS THESE WERE TREATED IN THE 10 IT(SS)A 23 /K/2007 & 1/K/2006 GOURI SHANKAR JAIN BLOCK A.Y.1991-92 TO 2001-02 HANDS OF SHRI P. L. JAIN. AGGRIEVED, ASSESSEE CAME IN APPEAL BEFORE CIT(A), WHO DELETED THE ADDITION BY GIVING FOLLOWING FINDING: AS THE ASSESSING OFFICER IS SATISFIED ON THE BASIS OF THE SEIZED DOCUMENT THAT THE UNDISCLOSED INCOME BELONGED TO THE SAID COMPANY, TH ERE IS NO NEED TO HAVE THE ADDITION MADE ON PROTECTIVE BASIS IN THE HANDS OF THE ASSESS EE. THE IMPUGNED ADDITION MADE ON PROTECTIVE BASIS IS DELETED. IT MAY HERE BE MENTIO NED THAT THE AMOUNT SHOWN IN THE TRIAL BALANCE OF SPARK DEALERS P. LTD. IN THE NAME OF THE APPELLANT HAS WAS VERIFIED BY THE ASSESSING OFFICER. 18. WE FIND THAT THE SUBSTANTIVE ADDITION HAS ALRE ADY BEEN MADE IN THE HANDS OF SHRI P. L. JAIN EVEN THOUGH THE TRANSACTIONS PERTAIN TO THE TR IAL BALANCE OF SPARK DEALERS PVT. LTD. THE PROTECTIVE ADDITION, IF AT ALL, SHOULD HAVE BEEN MA DE IN THE HANDS OF SPARK DEALERS PVT. LTD., WHICH IS A COMPANY AND INDEPENDENT ASSESSABLE ENTIT Y. IN ANY WAY, THIS PARTICULAR DOCUMENT DOES NOT BELONG TO THE ASSESSEE AND EVEN TRANSACTIO NS ALSO BELONG TO SPARK DEALERS PVT. LTD., WHICH IS NOT DENIED BY REVENUE. THE DELETION MADE BY CIT(A) IS CONFIRMED AND THIS ISSUE OF REVENUES APPEAL IS ALSO DISMISSED. 19. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED AN D THAT OF REVENUE IS DISMISSED. 20. ORDER PRONOUNCED IN OPEN COURT ON 29.12.2011 SD/- SD/- . ! . '# , (C. D. RAO) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( !# !# !# !#) )) ) DATED : 29 TH DECEMBER, 2011 23 (4$ 5 JD.(SR.P.S.) '1 6 /7 8'7*9- COPY OF THE ORDER FORWARDED TO: 1 . -. / APPELLANT SHRI GOURI SHANKAR JAIN, 46A, RAFI AHME D KIDWAI ROAD, 6 TH FLOOR, KOLKATA-16. 2 /0-. / RESPONDENT, ACIT, CENTRAL CIRCLE-XX,. KOLKATA. 3 . 1( ( )/ THE CIT(A), KOLKATA 4. 1( / CIT, KOLKATA 5 . @A /( / DR, KOLKATA BENCHES, KOLKATA 07 // TRUE COPY, '1(B/ BY ORDER, $ /ASSTT. REGISTRAR .