Lakhmi Chand, V. ACIT, Circle,

ITSSA 237/DEL/2005

• Counselvise Citation: [2011] 124 COUNSELVISE.COM (IT) 7973 (ITAT-DELHI)
• Duration Of Justice: 6 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 31-10-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: I
• Next Hearing Date: 30-08-2011
• Assessment Year: misc
• Appeal Filed On: 04-05-2005
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MOHANISH VERMA
• Assessee Lawyers: DR RAKESH GUPTA
• Keywords: Opportunity of being heard; Block assessment; Retraction
• Section: 132; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH I : NEW DELHI) SMT. DIVA SINGH, JUDICIAL MEMBER AND BEFORE SHRI B.C. MEENA, ACCOUNTANT MEMBER IT(SS)A.NO.237/DEL./2005 (BLOCK PERIOD : 01.04.1987 TO 18.02.1997) SHRI LAKHMI CHAND, VS. ACIT, CIRCLE, C/O RAKESH RAJ & ASSOCIATES, GURGAON. 565, SECTOR 7B, GURGAON. IT(SS)A.NO.263/DEL./2005 (BLOCK PERIOD : 01.04.1987 TO 18.02.1997) ACIT, CIRCLE, VS. SHRI LAKHMI CHAND, GURGAON. C/O RAKESH RAJ & ASSOCIATES, 565, SECTOR 7B, GURGAON. (APPELLANT) (RESPONDENT) ASSESSEE BY : DR. RAKESH GUPTA, ADVOCATE REVENUE BY : SHRI MOHANISH VERMA, CIT DR ORDER PER B.C. MEENA, ACCOUNTANT MEMBER : BOTH THESE CROSS APPEALS FILED BY ASSESSEE AND REV ENUE ARE AGAINST THE ORDER PASSED BY CIT(A), PANCHKULA ON 30-03-2005 FOR THE BLOCK PERIO D 1-4-1987 TO 18-2 1997. 2. GROUNDS OF APPEAL IN ASSESSEES IT(SS)A.NO.237/D EL/2005 AND IN REVENUES IT(SS)A.NO.263/DEL./2005 ARE AS UNDER :- ITA NOS.237 & 263/DEL/2005 2 IT(SS)A.NO.237/DELHI/2005 (ASSESSEES APPEAL) 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES O F THE CASE, LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT DIRECTI NG LEARNEDA.O. TO EXCLUDE A SUM OF RS. 15,000/- I.E. THE INCOME BELOW THE TAXABLE LIMIT OF A.Y. 1995-96, FROM THE UNDISCLOSED INCOME. 2. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES O F THE CASE, LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT DIRECTE D LEARNED A.O. TO EXCLUDE THE INCOME UPTO THE BASIC EXEMPTION LIMITS APPLICABLE IN VARIOUS YEARS FROM THE PURVIEW OF UNDISCLOSED INCOME, MORE SO IN VIEW OF THE JUDICIAL DECISIONS CONTAINED IN THIS REGARD. 3. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES O F THE CASE, LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT DIRECTE D LEARNED A.O. TO EXCLUDE THE INCOME OF A.Y. 1997-98, AMOUNTING TO RS . 1,20,000/- FROM THE PURVIEW OF UNDISCLOSED INCOME, MORE SO WHEN PRE VIOUS YEARS ITSELF HAD NOT COME TO AN END AS ON THE DATE OF SEARCH. 4. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES O F THE CASE, LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING ACTION OF LEARNED A.O. IN NOT GIVING HE APPEAL EFFECT IN TERMS OF THE ORDE R OF LEARNED CIT(A) DATED 10.03.2000. 5. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES O F THE CASE, LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING ACTION OF LD A.O. IN NOT GIVING PROPER AND ADEQUATE OPPORTUNITY OF BEING HEARD AND IN NOT SUPPLYING THE STATEMENTS OF MR. S.K. SETHI AND MR. M.K. JAIN DESPITE CLEAR CUT DIRECTIONS IN THE APPEAL ORDER PASSED ON 10.03. 2000. 6. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES O F THE CASE, LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION OF RS. 54,49,125/- MADE BY LEARNED A.O. AND LEARNED CIT(A) HAS FURTHER ERRED IN ENHANCING ADDITION BY FURTHER SUM OF RS.50,000/- 7. IN ANY VIEW OF THE MATTER AN IN ANY CASE, ADDITION OF RS. 54,99,125/- IS BAD IN LAW AND AGAINST THE FACTS AND CIRCUMSTANCES OF T HE CASE. 8. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES O F THE CASE, LEARNED CIT(A) HAS ERRED IN LAW ON FACTS IN CONFIRMING THE ADDITION OF RS. 30,000/- MADE BY LEARNED A.O. AS UNDISCLOSED INCOME AND HAS FURTHER ERRED IN NO ACCEPTING THE ALTERNATIVE CONTENTION OF THE APPELLA NT 9. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES O F THE CASE, LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION OF RS. 2,86,875/- AS UNDISCLOSED INCOME. ITA NOS.237 & 263/DEL/2005 3 10. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES O F THE CASE, LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN SUSTAINING THE ADDITION OF RS. 80,000/- OUT OF THE TOTAL ADDITION OF RS.2,00,000/- AS UNDISCLOSED INCOME OF THE ASSESSEE. 11. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES O F THE CASE, LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION OF RS. 5,00,000/- BEING THE AMOUNT DEPOSITED IN CO-OPERATI VE BANK. 12. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES O F THE CASE, LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION OF RS.99,750/- BEING THE AMOUNT DEPOSITED IN NEW BANK OF INDIA. 13. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES O F THE CASE, LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION OF RS.3,00,000/- BEING THE AMOUNT DEPOSITED IN UNION B ANK OF INDIA 14. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES O F THE CASE, LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE FACTION OF LEARNED A.O. FOR CHARGING INTEREST U/S 158BFA. 15. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES O F THE CASE, LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING ACTION OF LEARNED A.O. IN FRAMING THE BLOCK ASSESSMENT ORDER EVEN THOUGH I MPUGNED ASSESSMENT WAS NO FRAMED PURSUANT TO A VALID SEARCH. 16. IN ANY VIEW OF THE MATTER AND IN ANY CASE, IMPUGNED ASSESSMENT ORDER FRAMED WITHOUT JURISDICTION AND IS NULLITY. 17. THAT THE APPELLANT CRAVES THE LEAVE TO ADD, AMEND, MODIFY, DELETE ANY OF THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEAR ING AND ALL THE ABOVE GROUNDS ARE WITHOUT PREJUDICE TO EACH OTHER. IT(SS)A.NO.263/DEL. /2005 (REVENUES APPEAL) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, WHETH ER THE COMMISSIONER OF INCOME TAX (APPEAL) WAS RIGHT IN LAW : 1. IN RESTRICTING THE ADDITION FROM RS. 200000/- TO RS . 80000/- MADE ON ACCOUNT OF ADVANCE GIVEN TO SMT. RAJ RANI W/O SH. R AMESH CHAND ON 5.12.1996 BY THE ASSESSEE FOR PURCHASE OF A HOUSE O N THE LETTER HEAD OF NEW INDIA PROPERTY CONSULTANT, TUGLAKABAD EXTENSION , NEW DELHI. 2. IN DELETING THE ADDITION OF RS. 4,00,000/- MADE ON ACCOUNT OF CASH DEPOSITED ON 10.11.1995 IN ACCOUNT NO. 8033 MAINTAI NED WITH UNION BANK ITA NOS.237 & 263/DEL/2005 4 OF INDIA AND NOT APPRECIATING THE FACT THAT THE ASS ESSEE HAS FAILED TO FURNISH SUFFICIENT EVIDENCE IN THIS REGARD. THAT THE APPELLANT CRAVES FOR THE PERMISSION TO ADD , DELETE OR AMEND THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING OF APPEA L. 3. ON GROUND NOS.1 AND 2 : LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT INCOME TO THE EXTENT OF THE BASIC EXEMPTION LIMIT FOR EACH OF THE YEARS INCLUDED IN THE BLOCK PERIOD SHOULD BE EXCLUDED FROM THE AGGREGATE UNDISCLOSED INCOME AND BALANCE AMOUNT ALONE SHOULD BE TREATED AS UNDISCLOSED INCOME. FOR THIS PROPOSITION, LEARNE D COUNSEL FOR THE ASSESSEE PLACED RELIANCE ON THE DECISION OF RAJASTHAN HIGH COURT IN THE CASE OF CHAIN SUKH RATHI 270 ITR 368. LEARNED COUNSEL FURTHER SUBMITTED THAT THE INCOME OF A.Y. 1 995-96 RETURNED BY THE ASSESSEE IN RESPONSE TO THE NOTICE U/S 158BC WAS RS. 15,000/- W HICH WAS BELOW THE BASIC EXEMPTION LIMIT AND THEREFORE, THE SAME IS NOT LIABLE TO BE TREATED AS UNDISCLOSED INCOME AND HE PRAYED THAT THE RELIEF TO THIS EXTENT MAY BE ALLOWED FOR A.Y. 1995- 96. 4. LEARNED CIT DR ARGUED THAT THERE IS NO SUCH PR OVISION IN THE ACT AND THUS THE PRAYER OF THE ASSESSEE MAY NOT BE ACCEPTED. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS. IN THE CAS E OF CHAIN SUKH RATHI, CITED SUPRA, THE HON'BLE RAJASTHAN HIGH COURT HELD AS UNDER :- CONCEALED INCOME SHOULD BE COMPUTED IN CASES OF S EARCH IN ACCORDANCE WITH THE PROVISIONS OF SECTION 158BB OF THE INCOME-TAX ACT, 1961, AND AFTER COMPUTING THE TOTAL CONCEALED INCOM E, IT SHOULD BE TAXED AS PER THE RATES SPECIFIED FOR THE CONCEALED INCOME , IN EACH YEAR. WHEN SOME MATERIAL IS SEIZED DISCLOSING CONCEALMENT OF I NCOME, THE INCOME-TAX ACT CAN COMPUTE THE INCOME ON THAT BASIS BUT THAT S HOULD BE COMPUTED AND TAXED IN ACCORDANCE WITH THE PROVISIONS OF THE ACT OF 1961, THEREFORE, THE TAX EXEMPTION LIMIT HAS TO BE KEPT IN MIND. CONSIDERING THE PROVISION OF SECTION 158BB AND DECI SION OF RAJASTHAN HIGH COURT, WE ARE OF THE CONSIDERED VIEW THAT INCOME UP TO THE BASIC EXE MPTION LIMIT FOR EACH YEAR INCLUDED IN THE BLOCK PERIOD SHOULD NOT BE TREATED AS UNDISCLOSED I NCOME. HENCE, WE DIRECT LEARNED AO TO ITA NOS.237 & 263/DEL/2005 5 EXCLUDE INCOME UP TO THE BASIC EXEMPTION LIMIT WHIC H IS INCLUDED IN THE BLOCK PERIOD FROM THE PURVIEW OF UNDISCLOSED INCOME COMPUTED. ACCORDINGL Y BOTH THESE GROUNDS VIZ. GROUND NO. 1 & 2 OF THE ASSESSEES APPEAL ARE ALLOWED. 6. ON GROUND NO. 3, LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT SEARCH TOOK PLACE ON 18-02-1997. ON THE DATE OF SEARCH, THE PREVIOUS YE AR 1996-97 WAS NOT OVER. DUE DATE OF FILING OF RETURN U/S 139(1) WAS ALSO DID NOT FALL DUE , ON THE DATE OF SEARCH, THEREFORE, LEARNED COUNSEL PLEADED THAT INCOME OF PREVIOUS YEAR 1996-9 7, THOUGH RETURNED AT A SUM OF RS. 120000/- BY THE ASSESSEE IN BLOCK RETURN CANNOT BE TREATED AS UNDISCLOSED INCOME WITH IN THE MEANING ASCRIBED U/S 158B(B) READ WITH SECTION 158B B.FOR THIS PROPOSITION, HE RELIED UPON THE DECISION OF VISHAKAPATNAM BENCH IN THE CASE OF MADH VI FINVEST P LTD. VS ASST. CIT 99 TTJ 933. ON THE OTHER HAND, LEARNED CIT DR RELIED ON TH E ORDER OF CIT(A) IN THIS REGARD. 7. HAVING HEARD THE RIVAL SUBMISSIONS, WE HOLD THAT THERE IS FORCE IN ASSESSEES PLEA. SECTION 158B(B) DEFINES UNDISCLOSED INCOME. UNDISCL OSED INCOME, INTER ALIA, IS SUCH WHICH WOULD NOT HAVE BEEN DISCLOSED. THERE IS NO INCRIMIN ATING MATERIAL FOUND SUGGESTING THAT THE INCOME RETURNED WAS UNDISCLOSED INCOME OR THAT SUCH RETURNED INCOME WOULD NOT HAVE BEEN DISCLOSED BY THE ASSESSEE. DATE OF SEARCH WAS 18.02 .1997 AND PREVIOUS YEAR 1996-97 WAS NOT YET ENDED ON THE DATE OF SEARCH. THEREFORE, INCOME SHOWN BY THE ASSESSEE IN THE RETURN OF THE BLOCK PERIOD FOR THE YEAR 96-97 (UP TO THE DATE OF SEARCH I.E. 18.2.1997) IN RESPONSE TO NOTICE U/S 158BC CANNOT BE TREATED AS UNDISCLOSED INCOME F OR THE PURPOSE OF CHAPTER XIVB. IN THE CASE OF MADHVI FINVEST (P) LTD. VS. ACIT, CITED SUP RA, HON'BLE VISHAKAPATNAM BENCH HELD AS UNDER :- BLOCK ASSESSMENT UNDER CHAPTER XIV-B IS NOT INTEND ED TO BE A SUBSTITUTE FOR REGULAR ASSESSMENT. ITS SCOPE AND AMBIT IS LIM ITED IN THAT SENSE TO MATERIAL UNEARTHED DURING SEARCH. THEREFORE, IF TH E SEARCH ACTION DOES NOT DISCLOSE UNDISCLOSED INCOME, THE QUESTION OF ANY AS SESSMENT BEING FRAMED ITA NOS.237 & 263/DEL/2005 6 UNDER THAT CHAPTER IS SIMPLY IMPROPER AND OUTSIDE T HE PURVIEW OF THAT CHAPTER. NO CONTRARY DECISION CITED BY LEARNED DR. IN VIEW OF THESE FACTS, LEARNED A.O. IS DIRECTED TO EXCLUDE THE RETURNED INCOME OF RS. 1,20,000/- FROM THE PURVIEW OF THE UNDISCLOSED INCOME. 8. GROUND NO. 4 WAS NOT PRESSED BY LEARNED COUNSEL, THEREFORE, THE SAME IS DISMISSED FOR WANT OF NON-PROSECUTION. 9. IN GROUND NOS. 5, 6 & 7, THE ASSESSEE HAS AGITAT ED THE ADDITION OF RS.54,49,125/-MADE BY LEARNED A.O. WHICH WAS ENHANCED FURTHER BY RS.50 ,000/- BY LEARNED CIT(A). THIS ADDITION HAS BEEN DISCUSSED IN ORIGINAL ASSESSMENT ORDER AT PAGE 1-4 OF THE ORDER, APPEARING AT PAGE 28- 31 OF THE ASSESSEES PAPER BOOK. ACCORDING TO THE A O, A DOCUMENT A-8 WAS SEIZED FROM THE POCKET OF ASSESSEE ON 18.02.1997, WHEN ASSESSEE WAS AT THE RESIDENCE OF SHRI AMRIT LAL JAIN WHOSE PREMISES WERE UNDER SEARCH. ASSESSEES STATEM ENT WAS ALSO RECORDED AT THE RESIDENCE OF SHRI JAIN AND AFTER THAT, CONSEQUENTIAL SEARCH ACTI ON WAS ALSO TAKEN AT THE ASSESSEES RESIDENTIAL PREMISES. ACCORDING TO THE AO THE PAPER FOUND FROM THE POCKET OF THE ASSESSEE AND THE STATEMENT OF THE ASSESSEE PROVE THAT ASSESSEE PURCH ASED 40 KANAL, 16 MARLA LAND ALONG WITH ONE SHRI M.K. JAIN FROM SHRI S.K. SETHI AND SMT. LEELA SETHI FOR AN AGGREGATE AMOUNT OF RS. 10898250/-WHICH WAS TREATED AS UNDISCLOSED INVESTME NT ON FAILURE OF THE ASSESSEE TO EXPLAIN THE SOURCE AND SINCE ASSESSEE WAS 50% OWNER, 50% OF THE ABOVE SUM VIZ. RS. 5449125/- WAS TREATED AS UNDISCLOSED INVESTMENT OF THE ASSESSEE B Y AO. 10. LEARNED COUNSEL FOR THE ASSESSEE AT THE OUTSET MADE A LEGAL ARGUMENT THAT THE DOCUMENT WAS SEIZED NOT DURING THE COURSE OF SEARCH OF THE A SSESSEE BUT DURING THE COURSE SEARCH OF SHRI AMRIT LAL JAIN AND THUS, NO ADDITION COULD BE MADE U/S 158BC IN THE HANDS OF THE ASSESSEE BASED UPON SUCH DOCUMENT AND LEARNED A.O. COULD HAV E INVOKED PROVISION OF SECTION 158BD. ITA NOS.237 & 263/DEL/2005 7 LEARNED COUNSEL RELIED ON DELHI BENCH DECISION IN T HE CASE OF KALPANA MINDA IT(SS)A. NO. 529/DEL/2003 AND AGRA BENCH DECISION IN THE CASE OF DCIT VS. KAMLESH KHANNA 91 TTJ 633. ON MERIT, IT WAS SUBMITTED BY LEARNED COUNSEL THAT ASSESSEES STATEMENT WAS NOT FREE AND FAIR AND ADDITION WAS MADE IN THE HANDS OF MR. S.K. SETH I ALSO BASED UPON THE STATEMENT OF THE ASSESSEE AND PAPER FOUND FROM ASSESSEE WHICH WAS DE LETED BY CIT(A) AND WHICH ORDER WAS CONFIRMED BY TRIBUNAL IN THE CASE OF MR. S.K. SETHI . LEARNED COUNSEL PLACED THE COPY OF TRIBUNAL ORDER IN THE CASE OF MR. S.K. SETHI. IT WA S FURTHER ARGUED BY THE LEARNED COUNSEL THAT EVEN ASSESSEE HAD RETRACTED HIS STATEMENT WHICH WAS ALSO TAKEN NOTE OF BY TRIBUNAL IN THE CASE OF MR. S.K. SETHI. ARGUING FURTHER, LEARNED COUNSEL FURTHER SUBMITTED THAT MR. MANMOHAN WHO WAS MIDDLE MAN AND MR. SETHI BOTH IN THEIR STAT EMENTS HAD NOT STATED ANYTHING WHICH CAN JUSTIFY THAT PAYMENT OF RS. 1,09,00,000/- WAS PAID BY THE ASSESSEE AND MR. M.K. JAIN. THUS, LEARNED COUNSEL SUBMITTED THAT ADDITION MADE WAS BA D AND MAY BE DELETED. 11. ON THE OTHER HAND, LEARNED CIT DR SUBMITTED THA T THE ADDITION MADE WAS JUSTIFIED IN AS MUCH AS IT WAS BASED UPON THE DOCUMENT FOUND FRO M THE ASSESSEE. IT WAS FURTHER SUBMITTED BY HIM THAT EVEN MR. MANMOHAN SINGH WHO ACTED ON BE HALF OF MR. S.K. SETHI IN HIS STATEMENT HAS ALSO ADMITTED THAT A PAYMENT OF RS. 25,00,000/- TO RS.30,00,000/- WAS MADE OVER AND ABOVE THE CHEQUE AND THUS THE FACT OF ON-MONEY PAID STANDS PROVED. HE FURTHER SUBMITTED THAT RETRACTION OF THE STATEMENT OF THE ASSESSEE WAS AFT ER THE LAPSE OF CONSIDERABLE TIME AND THEREFORE, SUCH RETRACTION SHOULD NOT BE RELIED UPO N. HE FURTHER SUBMITTED THAT SINCE, MR. SETHI HIMSELF SURRENDERED A SUM OF RS. 70,00,000/-IN HIS RETURN OF INCOME, THAT SHOWS HE RECEIVED THE ON-MONEY FROM THE ASSESSEE AND THUS ADDITION MADE W AS JUSTIFIED ON THAT SCORE ALSO. COUNTERING THE LEGAL SUBMISSION ADVANCED BY LEARNED COUNSEL FOR THE ASSESSEE THAT THE ADDITION CAN BE MADE U/S 158BD NOT U/S 158BC, LEARN ED CIT DR SUBMITTED THAT WHEN ITA NOS.237 & 263/DEL/2005 8 ASSESSMENT OF THE ASSESSEE WAS BEING DONE U/S 158BC , THERE WAS NO JUSTIFICATION FOR UNDERTAKING THE PARALLEL ASSESSMENT AND THUS, THERE IS NO INFIRMITY IN THE ACTION OF ASSESSING OFFICER. LEARNED COUNSEL FOR THE ASSESSEE AT THE R EPLY STAGE SUBMITTED THAT THE TRIBUNAL IN ITS ORDER IN THE CASE OF SH. S.K. SETHI HAS DEALT WITH THE STATEMENT AND THE RETRACTION OF THE ASSESSEE AND THEREFORE, A DIFFERENT VIEW MAY NOT BE TAKEN ON THAT ASPECT. HE POINTED OUT THAT ACCEPTANCE OF ON-MONEY BY MR. MANMOHAN SINGH DOES N OT REFER TO THE ASSESSEE AND IT CAN BE IN RESPECT OF THE OTHER LAND SOLD BY MR. SETHI. SIM ILARLY, SURRENDER MADE BY MR. SETHI WAS NOT IN RESPECT OF THE SUBJECT LAND OF THE ASSESSEE. 12. HAVING HEARD THE RIVAL CONTENTIONS, ORDERS OF T HE AUTHORITIES BELOW AND THE PAPER BOOK FILED BEFORE US, WE FIND THAT THE SELLER MR. S.K. S ETHI WAS ALSO SEARCHED U/S 132 OF THE INCOME TAX ACT, 1961 ON 19.2.1997 AND IN HIS HANDS, THE AD DITION WAS MADE TO THE TUNE OF RS. 2,18,41,000/- ON ACCOUNT OF SALE OF 13.25 ACRES OF LAND WHICH INCLUDED 5.1 ACRE (14 KANALS AND 16 MARALAS) OF LAND WHICH IS THE SUBJECT MATTER OF DISPUTE IN THE PRESENT APPEAL ALSO. THIS ADDITION WAS MADE IN THE HANDS OF MR. SETHI BASED O N THE STATEMENT OF ASSESSEE IN THE PRESENT CASE AND THE DOCUMENT FOUND FROM THE PRESENT ASSESS EE ON 18.2.1997 DURING THE COURSE OF SEARCH OF SHRI AMRIT LAL JAIN AT GURGAON. TRIBUNAL IN THE CASE OF MR. S.K. SETHI IN IT (SS) A. NO. 220/ DEL/ 2004 VIDE ITS ORDER DATED 29.02.2008 HELD THAT THE ADDITION COULD NOT BE MADE IN THE HAND OF MR. S.K. SETHI BASED UPON THE PAPER/DOC UMENT FOUND FROM MR. LAKHMI CHAND AND THE STATEMENT OF MR. LAKHMI CHAND AND TRIBUNAL HAS RAISED SERIOUS DOUBTS ON THE CREDIBILITY OF THE EVIDENCES IN THIS REGARD. WE HAVE ALSO GONE THR OUGH THE ABOVE SAID ORDER OF TRIBUNAL AND WE FIND THAT CIT(A) IN THE CASE OF SH. S.K. SETHI H AS RECORDED THE FINDINGS ABOUT THE PRESENT ASSESSEE THAT SH. LAKHMI CHAND WAS NOT INCOME TAX O R WEALTH TAX ASSESSEE AND WAS NOT A MAN OF MEANS OR STATUS. HE WAS A MILK MAN HAVING 5-7 BI GHAS OF LAND AND HE WAS A SMALL TIME ITA NOS.237 & 263/DEL/2005 9 BROKER OF LAND. FINDINGS RECORDED ARE THAT THE PRIC E OF LAND COULD NOT BE AS HIGH AS RS. 20,00,000/- PER ACRE AND THE SUBJECT LAND WAS SITUA TED ON STONE HILLS IN VILLAGE GWALPURI AND THAT THE CHIT FOUND FROM SH. LAKHMI CHAND DID NOT H AVE AN EVIDENTIARY VALUE AND STATEMENT OF SH. LAKHMI CHAND WAS UNSTABLE AND UNRELIABLE AND TH AT HE RETRACTED HIS STATEMENT. TRIBUNAL IN THE CASE OF SH. S.K. SETHI AFFIRMED THE ABOVE FINDI NGS OF THE CIT(A). WE ALSO FIND THAT THE STATEMENT OF SH. MANMOHAN SINGH OR ANY SURRENDER BY MR. S.K. SETHI CANNOT BE ATTRIBUTED TO THE ADDITION MADE IN THE HANDS OF THE ASSESSEE IN A S MUCH AS SH. S.K. SETHI SOLD 13.25 ACRES OF LAND WHEREAS THE LAND ATTRIBUTED TO THE ASSESSEE WA S ONLY 5.1 ACRES AND THAT THERE IS NO EVIDENCE TO SAY THAT ANY ON- MONEY WAS IN RESPECT OF 5.1 ACR E OF LAND AND NOT IN RESPECT OF OTHER PART OUT OF 13.25 ACRES OF LAND. WE ALSO FIND THAT THERE IS NO MATERIAL BROUGHT ON RECORD BY REVENUE AS TO WHAT HAS HAPPENED ABOUT ANY ADDITION IN THE HAND S OF THE OTHER CO-OWNER NAMELY SH. M. K. JAIN / SH. DEEPAK JAIN. TRIBUNAL IN THE CASE OF SH. S. K. SETHI HAS RECORDED HIS FINDING THAT SH. DEEPAK JAIN, S/O. SH. M.K. JAIN WHO JOINTLY PURCHA SED THE LAND WITH SH. LAKHMI CHAND WAS NEVER EXAMINED NOR ANY ENQUIRY WAS MADE FROM HIM OR FROM ANY OTHER WITNESS OF THE SALE DEEDS EXECUTED BY THE ASSESSEE. TRIBUNAL FURTHER RE CORDED IN THE CASE OF SH. S.K. SETHI THAT NO ENQUIRY WAS MADE FROM THE REVENUE AUTHORITIES REGAR DING THE MARKET VALUE OF THE LAND SOLD BY THE ASSESSEE AND ABOUT OTHER TRANSACTIONS OF SALE O F LAND IN THE SAME VILLAGE DURING THE PERIOD IN WHICH SUBJECT SALE OF LAND MADE BY MR. S.K. SETHI. IT WAS ALSO NOTED BY TRIBUNAL IN ITS ORDER IN THE CASE OF MR. S.K. SETHI THAT THOUGH SH. LAKHMI C HAND WAS FOUND AT THE RESIDENT OF SH. AMRIT LAL JAIN BUT STATEMENT OF SH. AMRIT LAL JAIN WAS NOT EVEN RECORDED AS WITNESS IN RELATION TO THE PRESENCE OF SHRI LAKHMI CHAND AND IN RELATIO N TO THE DOCUMENTS FOUND FROM THE POSSESSION SH. LAKHMI CHAND. TRIBUNAL FURTHER RECOR DED THAT SH. DHEERAJ KUMAR OF SULTANPUR WHO PURPORTEDLY TOOK COMMISSION OF RS. 1,00,000/- F OR EFFECTING THE TRANSACTION OF SALE WAS ITA NOS.237 & 263/DEL/2005 10 NOT ALSO EXAMINED. THUS, TRIBUNAL IN THE HANDS OF M R. SETHI WHO WAS THE SELLER DELETED THE ADDITION. THEREFORE, IN VIEW OF THE FINDINGS AS REC ORDED BY TRIBUNAL IN THE CASE OF SH. S.K. SETHI AFFIRMING THE FINDINGS OF CIT(A) IN THAT CASE AND HAVING REGARD TO ALL FACTS AND CIRCUMSTANCES, WE OF THE CONSIDERED VIEW THAT THE A DDITION OF RS.54,49,125/- MADE BY AO AND CONFIRMED BY CIT(A) AND FURTHER ENHANCED BY RS. 50, 000 BY CIT(A) IS HERE BY DELETED. SINCE, WE HAVE DELETED THE ADDITION ON MERIT, WE DO NOT CO NSIDER IT NECESSARY TO GO INTO THE LEGAL QUESTION RAISED BY LEARNED COUNSEL FOR THE ASSESSEE . THESE GROUNDS ARE ALLOWED. 13. IN GROUND NO. 8, GRIEVANCE OF THE ASSESSEE IS R EGARDING THE ADDITION OF RS.30,000/- MADE BY AO AS UNDISCLOSED INVESTMENT IN LAND SITUATED AT VILLAGE BALOLA. ACCORDING TO THE CASE OF ASSESSING OFFICER, ASSESSEE HAS PURCHASED A LAND AN D PAID RS.30,000 TO SMT. NATHO IN F.Y. 1989-90, THE SOURCE OF WHICH WAS NOT EXPLAINED BY T HE ASSESSEE. THIS ADDITION WAS CONFIRMED BY LEARNED CIT(A) VIDE PARA 10.3 AND 10.4 OF THE AP PEAL ORDER. 14. THE ONLY CONTENTION OF LEARNED COUNSEL FOR THE ASSESSEE IS THAT PAGE 1-6 OF THE PAPER BOOK IS THE COPY OF REGISTRY OF THE LAND PURCHASED FROM SMT. NATHO ACCORDING TO WHICH THE DATE ON THIS DOCUMENT IS 26.10.1988 WHICH FALLS IN PREVI OUS YEAR RELEVANT TO ASSESSMENT YEAR 1989- 90 AND NOT IN A.Y. 1990-91 AS CONTENDED BY AO BY WR ONGLY READING THE DATE OF TRANSACTION. LEARNED COUNSEL SUBMITTED THAT SINCE ASSESSEE HAS A LREADY DECLARED INCOME OF RS. 50,000 IN A.Y. 1989-90 WHICH COVERS THE ABOVE INVESTMENT AND THEREFORE, THERE IS NO CASE FOR SEPARATE ADDITION. ON THE OTHER HAND, CONTESTING THE CLAIM O F THE ASSESSEE, LEARNED CIT DR SUBMITTED THAT TELESCOPING CANNOT BE DONE IN THE ABSENCE OF A NY EVIDENCE. 15. WE HAVE HEARD THE RIVAL CONTENTIONS AND IT IS N OTED THAT ASSESSEE DOES NOT MAINTAIN ANY BOOKS OF ACCOUNTS. IT IS ADMITTED THAT INCOME OF RS . 50,000 WAS DECLARED FOR A.Y. 1989-90 AND NO SPECIFIC DETAILS WERE GIVEN. HOWEVER, THE ADDITI ON OF RS.30,000/- IS LESS THAN THE INCOME OF ITA NOS.237 & 263/DEL/2005 11 RS. 50,000 DECLARED AND THEREFORE, IS VERY WELL COV ERED BY THE INCOME SO DECLARED. THEREFORE, IN THE ABSENCE OF ANY CONTRARY EVIDENCE TO SHOW THA T THE SAID INCOME OF RS.50,000/- WAS DECLARED TO COVER ANY OTHER ASSET, BENEFIT OF TELES COPING NEEDS TO BE GIVEN AND A.O. IS DIRECTED TO DELETE THE ADDITION OF RS. 30,000/- 16. GROUND NO. 9 OF THE APPELLANTS GROUNDS OF APPE AL RELATES TO THE ADDITION OF RS.2,86,875/- WHICH WAS MADE BY AO ON THE BASIS OF PAGE NO.15 OF DOCUMENT NO. A-6. ACCORDING TO THE CASE OF A.O., PAGE 5 OF DOCUMENT N O. A-6 IS THE RECEIPT OF RS. 2,86,875/-, WHICH SHOWS THAT THIS AMOUNT WAS PAID BY THE ASSESS EE FOR PURCHASING THE LAND IN VILLAGE BALOLA, WHICH ACCORDING TO THE AO REMAINED UNEXPLAI NED. THIS ADDITION WAS CONFIRMED BY CIT(A) IN PARA 11.4 OF THE APPEAL ORDER BY RELYING THE REMAND REPORT, WHICH REITERATED THE ALLEGATION MADE IN THE ASSESSMENT ORDER THAT THE DO CUMENT CLEARLY SHOWS THAT A SUM OF RS. 2,86,875/- WAS PAID BY THE ASSESSEE. 17. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT ASSESSEE WAS A PROPERTY BROKER AS NOTED BY AO IN PARA 2 OF THE ASSESSMENT ORDER ALSO AND DURING THE COURSE OF PROPERTY DEALING, TRANSACTIONS ARE ENTERED BY THE PARTIES BETWEEN THE MSELVES AND SUCH TRANSACTIONS ARE FACILITATED BY THE ASSESSEE AS A BROKER. LEARNED COUNSEL FOR TH E ASSESSEE DREW OUR ATTENTION TO PAGE 79 OF THE PAPER BOOK WHICH IS AGREEMENT TO SELL BETWEE N THE SELLER MR. MUNSHI AND THE PURCHASER SH. VIJAY KUMAR JAIN. LEARNED COUNSEL FOR THE ASSES SEE FURTHER DREW OUR ATTENTION TO PAGE 10 WHICH IS A RECEIPT ISSUED BY MR. MUNSHI TO THE EFFE CT HE HAS RECEIVED THE AMOUNT FROM SH. VIJAY KUMAR JAIN. THEREAFTER, LEARNED COUNSEL DREW OUR ATTENTION TO PAGE 11 OF THE PAPER BOOK, WHICH IS A RECEIPT ISSUED BY MR. MUNSHI SAYIN G THAT HE HAS RECEIVED BY THE PAYMENT OF RS. 2,86,875/- FROM THE ASSESSEE. ARGUING FURTHER L EARNED COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO PAGE 12-13 OF THE PAPER BOOK WHICH IS THE COPY OF THE REGISTRY DONE BY MR. ITA NOS.237 & 263/DEL/2005 12 MUNSHI, WHICH SHOWS THAT THIS PROPERTY WAS SOLD NOT TO THE ASSESSEE BUT THE ASSESSEE WAS ONLY A POWER OF ATTORNEY HOLDER. HE THUS ARGUED THAT WHE N THIS PROPERTY WAS NOT PURCHASED BY THE ASSESSEE, THERE WAS NO QUESTION OF ATTRIBUTING THE SAID PAYMENT HAVING BEEN MADE BY THE ASSESSEE. HE ARGUED THAT SINCE ASSESSEE WAS THE POW ER OF ATTORNEY HOLDER AND THAT IS WHY HIS NAME FINDS MENTION IN ONE OF THE RECEIPTS. HE THUS CONCLUDED THAT ADDITION WAS WRONGLY MADE IN THE HANDS OF THE ASSESSEE AS NO AMOUNT HAS BEEN PAID BY THE ASSESSEE. ON THE OTHER HAND, LEARNED CIT DR SUBMITTED THAT RECEIPT FILED BY THE ASSESSEE IN HIS PAPER BOOK CLEARLY SHOWS THAT THE SELLER RECEIVED THE PAYMENT FROM THE ASSES SEE AND THUS, ADDITION WAS RIGHTLY MADE. 18. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE PAPER BOOK PAGES TO WHICH OUR ATTENTION WAS DRAWN. WE FIND THAT PROPERTY WAS SOL D BY MR. MUNSHI TO MR. VIJAY KUMAR JAIN AND ASSESSEE WAS THE POWER OF ATTORNEY HOLDER. WE A LSO FIND THAT ASSESSEE WAS A BROKER AND THEREFORE, THE PAYMENT MADE BY THE PURCHASER HAS BE EN ROUTED THROUGH THE ASSESSEE AND ACCORDINGLY THE NAME OF THE ASSESSEE APPEARS OF ONE OF THE RECEIPTS EXECUTED BY THE SELLER. BUT SINCE PROPERTY WAS NOT PURCHASED BY THE ASSESSEE, T HERE WAS NO QUESTION OF ANY PAYMENT MADE BY THE ASSESSEE AND HENCE ADDITION BY PRESUMING THE PAYMENT FLOWING FROM THE ASSESSEE CANNOT BE SUSTAINED AND ACCORDINGLY THE ADDITION OF RS.2,86,875/- IS DELETED. 19. GROUND NO.10 HAS NOT BEEN PRESSED BY THE LEARNE D COUNSEL FOR THE ASSESSEE AND THEREFORE, THE SAME IS DISMISSED FOR THE WANT OF PR OSECUTION. 20. IN GROUND NOS.11, 12 & 13, THE APPELLANT HAS RA ISED OBJECTIONS TO THE ADDITIONS OF RS. 5,00,000/- BEING THE AMOUNT OF DEPOSITED IN CORPORA TION BANK, ANOTHER SUM OF RS. 99,750/- IN NEW BANK OF INDIA AND ANOTHER SUM OF RS. 3,00,000/- IN UNION BANK OF INDIA MADE BY AO ON THE GROUND THAT SOURCE OF THESE DEPOSITS WAS NOT SA TISFACTORILY EXPLAINED. ACCORDING TO A.O., A SUM OF RS. 5,00,000/- WAS DEPOSITED BY THE ASSESSEE IN HIS BANK ACCOUNT ON 06.06.1996 IN CASH, ITA NOS.237 & 263/DEL/2005 13 WHICH WAS CLAIMED TO BE THE ADVANCE RECEIVED FROM S H. K.P. SINGH REGARDING WHICH NO EVIDENCE WAS FILED. ACCORDING TO LEARNED A.O., A SU M OF RS.99,750/- WAS DEPOSITED ON 25.05.1990 IN NEW BANK OF INDIA, WHICH WAS RECEIVED FROM DLF UNIVERSAL LTD. BUT IT WAS NOT EXPLAINED. SIMILARLY REGARDING THE DEPOSIT OF RS. 3 ,00,000/- ON 07.06.1990 IN UNION BANK OF INDIA A/C NO. 7204, NO EVIDENCE WAS FURNISHED. THES E ADDITIONS WERE CONFIRMED BY CIT(A). 21. IN RESPECT OF THESE THREE ADDITIONS, LEARNED CO UNSEL FOR THE ASSESSEE RAISED A LEGAL PLEA THAT THE BANK ACCOUNTS ON THE BASIS OF WHICH THESE ADDITIONS HAVE BEEN MADE WERE NOT FOUND IN THE COURSE OF SEARCH AND THEREFORE, SUCH ADDITIO N WAS NOT POSSIBLE TO BE MADE IN LAW U/S 158BC AS THE ADDITION UNDER CHAPTER XIVB CAN BE MAD E ON THE BASIS OF MATERIAL FOUND AS A RESULT OF SEARCH. HE PLACED ON RELIANCE THE DECISIO N OF TRIBUNAL IN THE CASE OF SH. AMARJIT SINGH CHADHA VS. ACIT IT (SS) A. NO. 213/DEL/2005, DATED 23.05.2008 (DEL) AND SURJIT TOSARIA VS. JOINT CIT 92 TTJ 338 (DEL). ARGUING ON MERIT, IT W AS SUBMITTED BY LEARNED COUNSEL FOR THE ASSESSEE THAT A SUM OF RS. 5,00,000/- WAS A CASH RE CEIVED FROM SH. K.P. SINGH AS AN ADVANCE VIDE AGREEMENT PLACED AT PAGE 19-23 OF THE PAPER B OOK ACCORDING TO WHICH THE ADVANCE OF RS. 5,00,000/- WAS PAID BY MR. K.P. SINGH TO THE ASSESS EE ON 20.12.1995 AND IT WAS SO STATED IN THE SAID AGREEMENT. IT WAS FURTHER MENTIONED IN THE SAI D AGREEMENT THAT AMOUNT WAS PAID IN CASH AS THE ASSESSEE REFUSED TO ACCEPT CHEQUE SINCE THERE W AS NO BANK IN THE VILLAGE OF THE ASSESSEE. LEARNED COUNSEL FOR THE ASSESSEE FURTHER DREW OUR A TTENTION AT PAGE 18 OF THE PAPER BOOK, WHICH IS A LETTER FROM MR. K.P. SINGH TO THE ASSESS EE IN WHICH MR. K.P. SINGH REQUESTED TO THE ASSESSEE TO REFUND THE AMOUNT PAID AS EARNEST MONEY AND FURTHER REQUESTED THAT THE AMOUNT BE PAID TO HIM BY CHEQUE. THUS, LEARNED COUNSEL FOR TH E ASSESSEE SUBMITTED THAT SINCE EARNEST MONEY WAS TO BE REFUNDED BY CHEQUE AND THAT IS WHY CASH WAS DEPOSITED IN THE BANK ACCOUNT. ACCORDING TO LEARNED COUNSEL FOR THE ASSESSEE, THE SOURCE FOR RS. 5,00,000/- BEING CASH ITA NOS.237 & 263/DEL/2005 14 DEPOSITED IN THE BANK ACCOUNT WAS THE EARNEST MONEY RECEIVED BY THE ASSESSEE EARLIER AND ALL THE EVIDENCES WERE FILED BEFORE ASSESSING OFFICER A ND THE FINDING OF THE ASSESSING OFFICER THAT NO EVIDENCE WAS FILED WAS NOT CORRECT. LEARNED COUN SEL FOR THE ASSESSEE DID NOT MAKE ANY SUBMISSION ON MERIT REGARDING THE ADDITION OF RS. 99,750/-. LEARNED COUNSEL FOR WHILE EXPLAINING THE SOURCE OF RS.3,00,000/- FOUND DEPOSI TED IN UNION BANK, DREW OUR ATTENTION TO PAGE 26 OF THE PAPER BOOK WHICH WAS THE BANK STATEM ENT WHICH SHOWS THAT IT WAS NOT THE CASH DEPOSITED BUT IT WAS A DEPOSIT BY WAY OF CLEARING. HE SUBMITTED THAT THIS AMOUNT WAS RECEIVED FROM MR. DLF UNIVERSAL LTD. BY WAY OF ADVANCE VIDE CHEQUE NO. 541796, DATED 31.05.1990 WHICH WAS EVIDENT THROUGH THE RECEIPT PLACED AT PAG E 27 OF THE PAPER BOOK. THUS LEARNED COUNSEL CONCLUDED ARGUMENT BY SAYING THAT SOURCE OF THIS AMOUNT WAS ALSO CLEARLY EXPLAINED. ON THE OTHER HAND, LEARNED CIT DR SUBMITTED THAT AS SESSEE RECEIVED BY THE ADVANCE FROM SH. K.P. SINGH IN DECEMBER, 1995 BUT THIS AMOUNT WAS FO UND DEPOSITED IN BANK ACCOUNT IN JUNE, 1996 AND THUS, IT CANNOT BE BELIEVED THAT THE DEPOS IT IN JUNE, 1996 WAS THE SAME AMOUNT WHICH WAS RECEIVED AS ADVANCE. HE FURTHER SUBMITTED THAT THERE IS NO EVIDENCE TO PROVE THE DEPOSIT OF RS.3,00,000/-IN UNION BANK OF INDIA. HE THUS SUBMIT TED THAT THE ADDITIONS WERE RIGHTLY MADE AND BE CONFIRMED. 22. HAVING HEARD THE RIVAL SUBMISSIONS, IT IS NOTIC ED THAT LEARNED CIT DR COULD NOT CONTROVERT THE SUBMISSION ADVANCED ON BEHALF OF THE ASSESSEE THAT THE BANK ACCOUNTS IN QUESTION WERE NOT FOUND DURING THE COURSE OF SEARCH . WE FIND THAT COPY OF PUNCHANAMA IS PLACED AT PAGE 66-71 OF THE PAPER BOOK WHICH ALSO D O NOT SHOW THAT THESE BANK ACCOUNTS WERE FOUND DURING THE COURSE OF SEARCH. THEREFORE, THERE IS MERIT AND SUBSTANCE IN THE ARGUMENT OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT ADDITION U/S 158BC CANNOT BE MADE BASED UPON THESE BANK ACCOUNTS WHICH WERE NOT FOUND DURING THE COURS E OF SEARCH. IT IS SETTLED LAW THAT ADDITION ITA NOS.237 & 263/DEL/2005 15 U/S 158BB READ WITH SECTION 158BC CAN BE MADE ONLY ON THE BASIS OF EVIDENCE FOUND AS A RESULT OF SEARCH AS HELD IN THE CASES RELIED UPON B Y THE LEARNED COUNSEL. THEREFORE, WE HOLD THAT THE ADDITIONS COVERED BY GROUND NO. 11, 12 & 1 3 CANNOT BE SUSTAINED UNDER CHAPTER XIVB AND ARE THEREFORE DELETED ON THIS LEGAL GROUND IT SELF. HOWEVER, ON MERIT ALSO, WE FIND THAT THE EVIDENCES PLACED AT PAGE 19-23 WHICH IS TH E COPY OF AGREEMENT ENTERED BETWEEN ASSESSEE AND SHRI K.P. SINGH SHOWS THAT CASH OF RS. 5,00,000/- WAS RECEIVED BY THE ASSESSEE IN CASH IN DECEMBER, 1995 FROM SH. K.P. SINGH WHICH WA S HOWEVER DEMANDED BACK IN THE FORM OF CHEQUE VIDE MR. K.P. SINGHS LETTER PLACED AT PA GE 18 OF THE PAPER BOOK. WHEN, THE REFUND WAS DEMANDED BY CHEQUE, THERE IS NO JUSTIFICATION F OR US NOT TO BELIEVE THE EXPLANATION OF THE ASSESSEE THAT IN ORDER TO COMPLY WITH THE REQUEST O F SH. K.P. SINGH, THE AMOUNT WAS DEPOSITED IN CASH IN THE BANK ACCOUNT WHICH WAS IMMEDIATELY C LEARED BY WAY OF REFUND OF EARNEST MONEY THROUGH CHEQUE. HAVING REGARD TO THE PLAUSIBILITY I N THE EXPLANATION OF THE ASSESSEE AND THAT THERE IS NO EVIDENCE THAT THE ADVANCED RECEIVED BY THE ASSESSEE WAS SPENT / INVESTED BY THE ASSESSEE SOMEWHERE, WE FIND THAT THE SOURCE OF THE DEPOSIT STANDS EXPLAINED. THEREFORE, THE ADDITION OF RS. 5,00,000/- COVERED BY GROUND NO. 11 IS DELETED ON MERIT ALSO. COMING TO THE ADDITION OF RS. 3,00,000/- ON ACCOUNT OF THE DEPOS IT IN UNION BANK OF INDIA, IT IS SEEN THAT THE AMOUNT DEPOSITED WAS NOT BY WAY OF CASH. WE HAVE SE EN THE COPY OF BANK STATEMENT PLACED AT PAGE 26 OF THE PAPER BOOK AND WHICH IS QUITE LEGIBL E TO SHOW THAT THE DEPOSIT IN QUESTION WAS NOT BY WAY OF CASH BUT WAS BY WAY OF JAMA SAMASHOD HAN WHICH MEANS DEPOSIT BY WAY OF CLEARING. PAGE 27 OF THE PAPER BOOK IS THE RECEIPT SHOWING THE RECEIPT OF CHEQUE OF RS. 3,00,000/- FROM M/S DLF UNIVERSAL LTD., WHICH HAS N OT BEEN CONTROVERTED BY LEARNED CIT DR. THEREFORE IN VIEW OF THESE EVIDENCES, THERE IS NO JUSTIFICATION FOR THE ADDITION OF RS. 3,00,000/- AND THE SAME IS DELETED ON MERIT ALSO. ITA NOS.237 & 263/DEL/2005 16 23. IN GROUND NO.14, THE ASSESSEE HAS AGITATED THE LEVY OF INTEREST U/S 158BFA(1) BUT LIMITED PRAYER MADE BY LEARNED COUNSEL FOR THE ASSE SSEE WAS THAT THE NOTICE U/S 158BC HAVING BEEN ISSUED ON 10.10.1997 AND RETURN HAVING BEING F ILED 17.12.1997, INTEREST U/S 158BFA(1) COULD BE LEVIED ONLY FOR THE PERIOD OF DEFAULT. LEA RNED COUNSEL BROUGHT TO OUR ATTENTION TYPOGRAPHICAL ERROR IN THE ASSESSMENT ORDER PARA 2 TO SHOW THAT RETURN WAS FILED ON 17.12.1997, WHEREAS LEARNED AO RECORDS IN PARA 2 TH AT IT WAS FILED ON 17.12.1998, WHICH IS NOT POSSIBLE AS THE ASSESSMENT ORDER IT SELF WAS PA SSED ON 26.02.1998. THEREFORE, LEARNED COUNSEL PRAYED THAT IF THERE WAS ANY PERIOD OF DEFA ULT IN FILING THE RETURN, LEVY OF INTEREST BE RESTRICTED TO THE PERIOD OF DEFAULT ONLY. LEARNED C IT DR FAIRLY ADMITTED THAT THE INTEREST IS LEVIABLE ONLY FOR THE PERIOD OF DEFAULT. 24. AFTER HEARING BOTH SIDES, WE HOLD THAT LEVY OF INTEREST U/S 158BFA(1) IS CONSEQUENTIAL AND MANDATARY, THEREFORE, AO IS DIRECTED TO LEVY T HE INTEREST U/S 158BFA(1) FOR THE PERIOD OF DEFAULT IN FILING THE RETURN IN TERMS OF THE PROVIS ION OF SECTION 158BFA(1). IT IS ORDERED ACCORDINGLY. 25. GROUND NOS.15 TO 17 ARE GENERAL IN NATURE AND WERE ALSO NOT PRESSED AND HENCE THESE ARE ALSO DISMISSED. 26. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLO WED. 27. IN THE DEPARTMENTAL APPEAL, LEARNED CIT DR RELI ED UPON THE ASSESSING OFFICERS ORDER, WHEREAS LEARNED A.R. FOR THE ASSESSEE RELIED UPON T HE ORDER OF CIT (A). CIT(A) HAS DELETED THE ADDITION BY HOLDING AS UNDER :- CIT(A)S ORDER PARA 12.4 IN RESPECT OF FIRST GROUN D AND PARA 13.4 IN RESPECT OF THE SECOND GROUND ARE AS UNDER : I HAVE CONSIDERED THE FACTS AND SUBMISSIONS MADE C AREFULLY. IN THE COMPUTATION SHEET, FILED ALONG WITH THE RETURN FOR THE BLOCK PERIOD, IN THE NOTE OF THE COMPUTATION SHEET, THE ASSESSEE STATED THAT AN ADVANCE OF RS. ITA NOS.237 & 263/DEL/2005 17 2,00,000/- WAS GIVEN TO NEW INDIA PROPERTY FOR PURC HASE OF A HOUSE. CONSIDERING THE ASSESSING OFFICERS SUBMISSION IN T HE REMAND REPORT, AND ASSESSEES SUBMISSION THAT RS. 1,20,000/- MAY BE AD JUSTED, THE ADDITION ON THIS ACCOUNT IS SUSTAINED TO THE EXTENT OF RS. 80,0 00/- REGARDING THE DEPOSIT OF RS. 4,00,000/- ON 10.11.1 995, I HAVE PERUSED PAGE NO. 24 & 25 OF THE PAPER BOOK. PAGE 24 IS THE COPY OF THE ASSESSEES ACCOUNT IN THE SAVING BANK NO. 7204 IN UNION BANK O F INDIA, GURGAON. ON 10.11.1995, THERE IS A CASH WITHDRAWAL OF RS. 4,00, 000/-. PAGE 25 IS THE COPY OF THE ACCOUNT NO. 8053/80/23, WHICH IS A COPY OF CURRENT ACCOUNT WITH UNION BANK OF INDIA. THE ASSESSING OFFICERS C ONTENTION IS THAT FOR TRANSFER FROM ONE ACCOUNT TO ANOTHER, IN THE SAME B ANK, CASH WITHDRAWAL WAS NOT NECESSARY AND, THEREFORE, THE AMOUNT OF WIT HDRAWAL WAS UTILIZED IN SOME OTHER INVESTMENT AND THE AMOUNT DEPOSITED IN T HE ACCOUNT NO. 8033 WAS FROM UNDISCLOSED SOURCE. I AM, HOWEVER, UNABLE TO AGREE WITH THE ASSESSING OFFICER, AS THE ASSESSING OFFICER HAS NO EVIDENCE TO SAY SO. MERELY ON THE BASIS OF ASSUMPTION, THE ASSESSING OF FICERS CONTENTION CANNOT BE ACCEPTED. AS ON THE SAME, DATE THE WITHDR AWALS FROM ONE ACCOUNT AND DEPOSIT IN ANOTHER ACCOUNT IS THERE, AN D THERE IS NO CONTRARY EVIDENCE THAT THE WITHDRAWALS WAS UTILIZED FOR SOME OTHER PURPOSE, THE ASSESSEES CONTENTION IS TO BE ACCEPTED. THE ADDITI ON OF RS. 4,00,000/- IS THEREFORE DELETED. 28. AFTER HEARING BOTH SIDES ON THESE GROUNDS AND I N VIEW OF THE FACTUAL FINDINGS RECORDED BY CIT(A) AND IN THE ABSENCE OF ANY CONTRARY MATERI AL TO DISPLACE THE FACTUAL FINDINGS, WE UPHOLD THE ORDER OF THE CIT(A) ON BOTH THE GROUNDS OF APPEAL IN DEPARTMENTAL APPEAL. HENCE DEPARTMENTAL APPEAL IS DISMISSED. 29. TO SUM UP : THE APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED AND THE APPEAL OF THE DEPARTMENT IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 31 ST DAY OF OCTOBER, 2011. SD/- SD/- (DIVA SINGH) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 31 ST DAY OF OCTOBER, 2011 TS ITA NOS.237 & 263/DEL/2005 18 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A), PANCHKULA. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.