M/s. LILASONS INFRASTRUCTURE PVT. LTD., Bhopal V. The ACIT 1(2), Bhopal

ITSSA 277/IND/2014

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 2253 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 30-06-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 26-04-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 07-11-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJEEV VARSHANEY
• Assessee Lawyers: N D PATWA S
• Keywords: Unexplained expenditure; Income from undisclosed sources; Loose papers; Document seized; Accommodation entries; Documents seized

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI B.C.MEENA, ACCOUNTANT MEMBER I.T.(SS)A.NOS. 277 AND 278/IND/2014 A.YS. : 2009-10 AND 2010-11 M/S.LILASONS INFRASTRUCTURES PRIVATE LIMITED, VS. ACIT, 1(2), BHOPAL BHOPAL APPELLANT RESPONDENT PAN NO. AAACL2350H I.T.A.NO. 699/IND/2014 A.Y. 2011-12 M/S.LILASONS INFRASTRUCTURES PRIVATE LIMITED, VS. ACIT, 1(2), BHOPAL BHOPAL APPELLANT RESPONDENT I.T.A.NO. 676/IND/2014 A.Y. : 2011-12 ACIT, 1(2), BHOPAL VS. M/S.LILASONS INFRASTRUCTURE PVT. LTD. BHOPAL BHOPAL M/S.LILASON INFRASTRUCTURE PVT. LTD. VS. ACIT,1(2), BHOPAL I.T.(SS)A.NOS. 277 -278/IND/2014 I.T.A.NO. 676, 699 /IND/2014 A.YS. 2009-10, 2010-11 & 2011-12 2 2 APPELLANT RESPONDENT APPELLANT BY : SHRI ASHISH GOYAL AND SHRI N. D.PATWA, ADVOCATES RESPONDENT BY : SHRI RAJEEV VARSHANEY, CIT DR O R D E R PER D.T.GARASIA, J.M. APPEALS OF THE ASSESSEE AND DEPARTMENT ARE DIRECTED AGAINST THE ORDER OF CIT(A)-I, BHOPAL, DATED 20.08. 2014. 2. THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEAL I N I.T.(SS)A.NO. 277/IND/2014 FOR ASSESSMENT YEAR 2009 -10 :- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN PASSING THE APPELLATE ORDER ON DIFFERENT FOOTINGS AND ON DIFFERENT PERCEPTIONS OTHER THAN AS HELD BY THE AO IN ASSESSMENT ORDER AND, THUS, THE ORDER PASSED BY THE LD. CIT(A) BY GIVING PART RELIEF ONLY BY FURTH ER ENHANCING THE INCOME IS UNJUST, UNFAIR AND BAD IN LAW AND, THUS, DESERVES TO BE QUASHED. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITI ON OF RS. 57,50,000/- IN ASSESSMENT YEAR 2009-10 WITHOUT ACCEPTING THE EXPLANATION OFFERED BY THE ASSESSEE AND WITHOUT ACCEPTING THE FACT THAT THE NET OF RECEIPTS MINUS EXPENDITURE ON THE BASIS OF DIARY A-10 AND LPS-2 AMOUNTING TO RS. 1,18,39,000/- DATE OF HEARING : 04 . 0 5 .2016 DATE OF PRONOUNCEMENT : 30 . 0 6 .2016 M/S.LILASON INFRASTRUCTURE PVT. LTD. VS. ACIT,1(2), BHOPAL I.T.(SS)A.NOS. 277 -278/IND/2014 I.T.A.NO. 676, 699 /IND/2014 A.YS. 2009-10, 2010-11 & 2011-12 3 3 WAS DECLARED BY SHRI ARUN KUMAR LILA IN HIS PERSONAL RETURN WHICH IS ACCEPTED BY THE DEPARTMENT ALSO AND THUS, IT AMOUNTS TO DOUBLE ADDITION, ONE IN THE HANDS OF APPELLANT AND OTHER I N THE HANDS OF SHRI ARUN KUMAR LILA. THUS, UNDER THE CIRCUMSTANCES, THE LD. CIT(A) MUST OUGHT TO CONSIDER THIS FACT AND SHOULD GIVE FULL RELIEF IN T HIS CASE. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN FURTHER ENHANCING TH E INCOME BY RS. 25,75,000/- WITHOUT CONSIDERING THE FACTS PROPERLY AND WITHOUT CONSIDERING THE ISSUE THAT THE NET OF RECEIPTS MINUS EXPENDITURE ON THE BASIS OF DIARY A-10 AND LPS-2 WAS DECLARED BY SHRI ARUN KUMAR LILA AND, THUS, THERE REMAINS NO SCOPE FOR FURTHER ENHANCEMENT. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN NOT CONSIDERING THE F ACT THAT ALL THE EXPENDITURE AS PER DIARY A-10 AND LPS- 2 ARE NOT ENTIRELY EXPENDITURE BUT INCLUDES THE SHARE APPLICATION MONEY AND UNSECURED LOANS RECEIVED FROM DIFFERENT PERSONS BY CHEQUES AS PER ACCOMMODATION ENTRIES AND HENCE, SHOULD NOT BE INCLUDED IN THE LIST OF EXPENDITURE. THUS, THE ORDE R PASSED BY THE LD. CIT(A) BY NOT DEDUCTING THE SAME FROM THE LIST OF EXPENDITURE IS UNJUSTIFIED. 3. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL IN I.T.(SS)A.NO. 278/IND/2014 FOR ASSESSMENT YEAR 2010-11 :- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN PASSING THE APPELLATE ORDER ON DIFFERENT FOOTINGS AND ON DIFFERENT M/S.LILASON INFRASTRUCTURE PVT. LTD. VS. ACIT,1(2), BHOPAL I.T.(SS)A.NOS. 277 -278/IND/2014 I.T.A.NO. 676, 699 /IND/2014 A.YS. 2009-10, 2010-11 & 2011-12 4 4 PERCEPTIONS OTHER THAN AS HELD BY THE AO IN ASSESSMENT ORDER AND, THUS, THE ORDER PASSED BY THE LD. CIT(A) BY FURTHER GIVING PART RELIEF ONLY IS UNJUST, UNFAIR AND BAD IN LAW AND, THUS, DESERVES TO BE QUASHED. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITI ON OF RS. 90,56,000/- OUT OF THE TOTAL ADDITION OF RS. 90,90,000/- AND THEREBY GIVING RELIEF OF RS. 34,000/- ONLY IN ASSESSMENT YEAR 2010-11 WITHOUT ACCEPTING THE EXPLANATION OFFERED BY THE ASSESSEE AND WITHOUT ACCEPTING THE FACT THAT THE NET OF RECEIPTS MINUS EXPENDITURE ON THE BASIS OF DIARY A- 10 AND LPS-2 AMOUNTING TO RS. 1,18,39,000/- WAS DECLARED BY SHRI ARUN KUMAR LILA IN HIS PERSONAL RETURN WHICH IS ACCEPTED BY THE DEPARTMENT ALSO AND THUS, IT AMOUNTS TO DOUBLE ADDITION, ONE IN THE HANDS OF APPELLANT AND OTHER IN THE HANDS OF SHRI ARUN KUMAR LILA. THUS, UNDER THE CIRCUMSTANCES, THE LD. CIT(A) MUST OUGHT TO CONSIDER THIS FACT AND SHOULD GIVE FULL RELIEF IN THIS CASE. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN NOT CONSIDERING THE F ACT THAT ALL THE EXPENDITURE AS PER DIARY A-10 AND LPS- 2 ARE NOT ENTIRELY EXPENDITURE BUT INCLUDES THE SHARE APPLICATION MONEY AND UNSECURED LOANS RECEIVED FROM DIFFERENT PERSONS BY CHEQUES AS PER ACCOMMODATION ENTRIES AND HENCE, SHOULD NOT BE INCLUDED IN THE LIST OF EXPENDITURE. THUS, THE ORDE R PASSED BY THE LD. CIT(A) BY NOT DEDUCTING THE SAME FROM THE LIST OF EXPENDITURE IS UNJUSTIFIED. M/S.LILASON INFRASTRUCTURE PVT. LTD. VS. ACIT,1(2), BHOPAL I.T.(SS)A.NOS. 277 -278/IND/2014 I.T.A.NO. 676, 699 /IND/2014 A.YS. 2009-10, 2010-11 & 2011-12 5 5 4. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL IN I.T.A.NO. 699/IND/2014 FOR ASSESSMENT YEA R 2011- 12 :- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN PASSING THE APPELLATE ORDER ON DIFFERENT FOOTINGS AND ON DIFFERENT PERCEPTIONS OTHER THAN AS HELD BY THE AO IN ASSESSMENT ORDER AND, THUS, THE ORDER PASSED BY THE LD. CIT(A) BY FURTHER GIVING PART RELIEF ONLY OR BY FURTHER ENHANCING THE INCOME IS UNJUST, UNFAIR AND BAD IN LAW AND, THUS, DESERVES TO BE QUASHED. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDIT ION OF RS. 39,41,500/- OUT OF THE TOTAL ADDITION OF RS.2,04,63,500/- ONLY IN ASSESSMENT YEAR 2011-12 WITHOUT ACCEPTING THE EXPLANATION OFFERED BY THE ASSESSEE AND WITHOUT ACCEPTING THE FACT THAT THE NET OF RECEIPTS MINUS EXPENDITURE ON THE BASIS OF DIARY A-10 AND LPS-2 AMOUNTING TO RS. 1,18,39,000/- WAS DECLARED BY SHRI ARUN KUMAR LILA IN HIS PERSONAL RETURN WHICH IS ACCEPTED BY THE DEPARTMENT ALSO AND THUS, IT AMOUNTS TO DOUBLE ADDITION, ONE IN THE HANDS OF APPELLANT AND OTHER I N THE HANDS OF SHRI ARUN KUMAR LILA. THUS, UNDER THE CIRCUMSTANCES, THE LD. CIT(A) MUST OUGHT TO CONSIDER THIS FACT AND SHOULD GIVE FULL RELIEF IN T HIS CASE. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN FURTHER ENHANCING THE INCOME BY RS. 8,00,000/- ON ACCOUNT OF AMOUNT DEPOSITED IN PASS BOOK WITHOUT CONSIDERING THE FACT THAT SHRI ARUN KUMAR LILA HAS SURRENDERED THE M/S.LILASON INFRASTRUCTURE PVT. LTD. VS. ACIT,1(2), BHOPAL I.T.(SS)A.NOS. 277 -278/IND/2014 I.T.A.NO. 676, 699 /IND/2014 A.YS. 2009-10, 2010-11 & 2011-12 6 6 SAME AND IS INCLUDED IN THE CASH FOUND DURING THE COURSE OF SEARCH. THUS, THE ORDER PASSED BY THE LD. CIT(A) ENHANCING THE INCOME BY RS. 8,00,000/- IS UNJUSTIFIED, UNWARRANTED AND BAD IN LAW. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN NOT CONSIDERING THE F ACT THAT ALL THE EXPENDITURE AS PER DIARY A-10 AND LPS- 2 ARE NOT ENTIRELY EXPENDITURE BUT INCLUDES THE SHARE APPLICATION MONEY AND UNSECURED LOANS RECEIVED FROM DIFFERENT PERSONS BY CHEQUES AS PER ACCOMMODATION ENTRIES AND HENCE, SHOULD NOT BE INCLUDED IN THE LIST OF EXPENDITURE. THUS, THE ORDE R PASSED BY THE LD. CIT(A) BY NOT DEDUCTING THE SAME FROM THE LIST OF EXPENDITURE IS UNJUSTIFIED. 5. THE REVENUE HAS ALSO FILED APPEAL IN I.T.A.NO. 676/IND/2014 FOR ASSESSMENT YEAR 2011-12 AND HAS TA KEN FOLLOWING GROUND OF APPEAL :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIA(A) ERRED, THE LD. CIT(A) HAS ERRED IN ALLOWING THE RELIEF OF RS. 1,96,63,500/- OUT OF TOTA L ADDITION OF RS. 2,44,05,000/- MADE BY THE AO FOR THE ASSESSMENT YEAR 2011-12 ON ACCOUNT OF UNDISCLOSED RECEIPTS AND UNEXPLAINED TRANSACTION. 6. THE GROUNDS TAKEN FOR ASSESSMENT YEARS 2009-10 ,2010-11 AND FURTHER GROUND NO. 1, 2 & 4 FOR ASSESS MENT YEAR 2011-12 ARE COMMON. FURTHER GROUND TAKEN IN APPEAL BY THE M/S.LILASON INFRASTRUCTURE PVT. LTD. VS. ACIT,1(2), BHOPAL I.T.(SS)A.NOS. 277 -278/IND/2014 I.T.A.NO. 676, 699 /IND/2014 A.YS. 2009-10, 2010-11 & 2011-12 7 7 REVENUE FOR ASSESSMENT YEAR 2011-12 IS ALSO RELATIN G TO COMMON ISSUE AND ARE CONSIDERED TOGETHER. 7. THE BRIEF FACTS RELATING TO THESE GROUNDS ARE THAT THE ASSESSEE-COMPANY IS ENGAGED IN CONSTRUCTION OF RESI DENTIAL AND COMMERCIAL COMPLEXES. THE COMPANY LAUNCHED A HO USING PROJECT IN E-3, ARERA COLONY, BHOPAL IN THE NAME OF KANHA TOWER CONSISTING OF 252 FLATS AND ALSO A MALL. 8. AS PER AO, DURING THE COURSE OF SEARCH CERTAIN DOCUMENTS SHOWING UNACCOUNTED RECEIPTS AND EXPENSES WERE FOUND, SUCH DIARY A-1 PG. 1-50 (WRITTEN 15 PAGES ). THE YEAR-WISE TOTAL OF UNACCOUNTED RECEIPTS IN RESPE CT OF CONCERNED PARTIES WERE AS UNDER: - A.Y. AMOUNT (RS.) 2009 - 10 83,25,000 2010 - 11 90,56,000 2011 - 12 9,50,000 TOTAL 1,83,31,000 9. DURING SEARCH, STATEMENT OF ARUN LILA WAS RECORDED. STATEMENT DATED 28.10.2010 IS RELEVANT. IN REPLY TO QUESTION M/S.LILASON INFRASTRUCTURE PVT. LTD. VS. ACIT,1(2), BHOPAL I.T.(SS)A.NOS. 277 -278/IND/2014 I.T.A.NO. 676, 699 /IND/2014 A.YS. 2009-10, 2010-11 & 2011-12 8 8 NO. 4 TO 7 HE SURRENDERED AN AMOUNT OF RS. 1,18,39, 000 IN RESPECT OF THESE PAPERS. FURTHER, ANOTHER STATEMENT WAS RECORDED DURING SEARC H ON 12.11.2010. IN THIS STATEMENT, IN REPLY TO QUESTION NO. 3, ARUN LILA STATED THAT HE HAS SURRENDERED A SUM OF RS. 2,18,00,000/- TOWARDS LOOSE PAPERS AND CASH. HE CLAR IFIED THAT RS. 4,00,00,000 WAS SURRENDERED TO COVER ALL LOOSE P APERS AND CASH. 10. THE AO IN PARA 8 REFERRED TO DIARY A-10 AND LPS 2 (I.E. LPS A-1 PG. 2) (PB 95). ON LPS A-1 PG. 2, A FIGURE WAS MENTIONED AT RS. 165.81 LACS WHIC H SHOWED THE BOOKING ADVANCES, WHICH WAS A TOTAL OF VARIOUS BO OKING ADVANCES RECEIVED, MENTIONED IN DIARY A-1 UPTO 01.1 0.2009. IN THE SEARCH, ARUN LILA, DIRECTOR HAD STATED THAT THE AMOUNT WAS ALREADY COVERED IN THE SURRENDER AMOUNT. LD AO I N PARA 8 MADE ADDITION OF RS. 1,65,81,000/- AND HELD THAT T HE SUBMISSION OF THE ASSESSEE HAS BEEN CONSIDERED AND EXAMINED BUT THE SAME IS NOT ACCEPTABLE BECAUSE THE TRANSACT IONS MENTIONED ON THE LOOSE PAPERS ARE NEITHER TALLIED WI TH BOOKS OF ACCOUNT OF THE ASSESSEE NOR THE ASSESSEE HAS BEEN A BLE TO M/S.LILASON INFRASTRUCTURE PVT. LTD. VS. ACIT,1(2), BHOPAL I.T.(SS)A.NOS. 277 -278/IND/2014 I.T.A.NO. 676, 699 /IND/2014 A.YS. 2009-10, 2010-11 & 2011-12 9 9 RECONCILE THEM WITH ANY PLAUSIBLE EXPLANATION AND HE NCE, ADDITION OF RS. 1,65,81,000/- IS MADE TO THE TOTAL INCOME OF THE ASSESSEE FOR THE AY 2011-12. THEREAFTER, THE LD AO IN PARA 9, REFERRED TO DIARY A-10 AND HELD THAT THE SUBMISS ION OF THE ASSESSEE HAS BEEN CONSIDERED AND EXAMINED BUT THE S AME IS NOT ACCEPTABLE BECAUSE THE TRANSACTIONS MENTIONED O N THE LOOSE PAPERS ARE NEITHER TALLIED WITH BOOKS OF ACCOU NT OF THE ASSESSEE NOR THE ASSESSEE HAS BEEN ABLE TO RECONCIL E THEM WITH ANY PLAUSIBLE EXPLANATION AND HENCE, ADDITION O F RS. 10,00,000/- IN AY 2008-09, RS. 57,50,000/- IN AY 20 09-10, RS. 90,90,000 IN AY 2010-11 AND RS. 51,00,000/- IN AY 2011- 12 IS MADE TO THE TOTAL INCOME OF THE ASSESSEE. FUR THER THE LD AO IN PARA 10 (REFERRED TO LPS A-1 PG 2, PB 95) [HE MENTIONED IT AS LPS 2], AND HELD THAT THE SUBMISSION OF THE A SSESSEE HAS BEEN CONSIDERED AND EXAMINED BUT THE SAME IS NOT AC CEPTABLE BECAUSE THE RECEIPTS MENTIONED ON THE LOOSE PAPERS ARE NEITHER TALLIED WITH BOOKS OF ACCOUNT OF THE ASSESSE E NOR THE ASSESSEE HAS BEEN ABLE TO RECONCILE THEM WITH ANY PL AUSIBLE EXPLANATION. THE AMOUNT OF RS. 2,18,00,000/- OUT OF THIS LPS IS SURRENDERED WHICH CLEARLY SPEAKS OF ELEMENT OF UN DISCLOSED M/S.LILASON INFRASTRUCTURE PVT. LTD. VS. ACIT,1(2), BHOPAL I.T.(SS)A.NOS. 277 -278/IND/2014 I.T.A.NO. 676, 699 /IND/2014 A.YS. 2009-10, 2010-11 & 2011-12 10 10 RECEIPTS. THEREFORE, BALANCE AMOUNT OF RS. 27,24,00 0/- REMAINING OUT OF TOTAL RECEIPTS OF RS. 2,45,24,000/ - IS ADDED TO THE TOTAL INCOME OF THE ASSESSEE IN AY 2011-12. THUS, THE LD AO MADE YEAR-WISE ADDITION AS UNDER: - DIARY A-10 AND LPS A- 1 PG. 2 DIARY A-10 LPS A-1 PG. 2 TOTAL 2009 - 10 - 57,50,000 - 57,50,000 2010 - 11 - 90,90,000 - 90,90,000 2011 - 12 1,65,81,000 51,00,000 27,24,000 2,44,05,000 THE UNACCOUNTED EXPENSES, AS PER LD. CIT(A) FOR A.Y . 2011-12 WAS RS. 2,13,22,500/- [RS. 3,31,61,500 (AS PER LPS A -1 PG. 11) - RS. 1,18,39,000 (ALREADY SURRENDERED)]. HE H ELD THAT THE EXCESS OF RECEIPTS OR EXPENDITURE, WHICHEVER IS LESS SHALL BE ADDED. HE ADDED RS. 83,25,000/- FOR A.Y. 2009-10, R S. 90,56,000 FOR A.Y. 2010-11 AS UNACCOUNTED RECEIPTS. FOR A.Y. 2011-12, HE HELD THAT THE UNACCOUNTED EXPENDITURE WA S MORE AT RS. 2,13,22,500/-. HOWEVER, SINCE THE UNACCOUNTE D RECEIPTS OF RS. 83,25,000 AND RS. 90,56,000 WERE AVAILABLE, ADDITION M/S.LILASON INFRASTRUCTURE PVT. LTD. VS. ACIT,1(2), BHOPAL I.T.(SS)A.NOS. 277 -278/IND/2014 I.T.A.NO. 676, 699 /IND/2014 A.YS. 2009-10, 2010-11 & 2011-12 11 11 WAS MADE OF EXCESS AMOUNT I.E. RS. 39,41,500/- [RS. 2,13,22,500 RS. 83,25,000 RS. 90,56,000]. A.Y RELIEF BY LD CIT(A) ENHANCEMENT BY LD CIT(A) DUE TO CHANGE OF YEAR CONFIRMED BY LD CIT(A) 2009 - 10 - 25,75,000 83,25,000 2010 - 11 34,000 - 90,56,000 2011 - 12 2,04,63,500 8,00,000 47,41,500 TOTAL 2,04,97,500 33,75,000 2,21,22,500 11. THE MATTER CARRIED TO THE LD. CIT(A) AND THE LD. CI T(A) HAS SUSTAINED THE ADDITION AT RS. 2,21,22,500/- BY OBSERVING AS UNDER :- 3.5 I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE APPELLANT, FACTS OF THE CASE AND ALSO PERUSED THE R ELEVANT SEIZED MATERIAL RELIED UPON BY THE ASSESSING OFFICE R FOR MAKING ADDITIONS IN A.YRS. 2008-09 TO 2011-12 UNDER CONSIDERATION. IT IS NOTICED THAT THE LD. A.O. HAD NOT PROPERLY APPRECIATED THE TRANSACTIONS RECORDED IN THE SEIZED DOCUMENTS A-1 DIARY AND LPS SEIZED FROM THE PREMISE S OF THE APPELLANT COMPANY. THE TRANSACTIONS RECORDED IN A-1 DIARY WERE RELATED TO UNACCOUNTED RECEIPTS RECEIVED BY THE APPELLANT FROM THE CUSTOMERS ON BOOKING OF FLATS IN ITS PROJECT WHEREAS, IN THE LOOSE PAPERS ON PAGE NOS. 1,2,3 & 1 1 OF LPS, THE TRANSACTIONS WERE RELATED TO UNACCOUNTED EXPENSES/OUTFLOW. THE A.O. COULD NOT DIFFERENTIATE THE TRANSACTIONS BETWEEN THE RECEIPTS AND OUTFLOWS, SUC H AS THE A.O. TREATED THE AMOUNT OF RS. 51,00,000/- AS RECEI PT OF SHARE APPLICATION MONEY FROM SHRI SUBODH VARSHNEY A ND THE AMOUNT OF RS. 30,90,000/- FROM SHRI VIMAL CHHAJED A S ADVANCE RECEIVED ON THE BASIS OF ENTRIES RECORDED O N PAGES M/S.LILASON INFRASTRUCTURE PVT. LTD. VS. ACIT,1(2), BHOPAL I.T.(SS)A.NOS. 277 -278/IND/2014 I.T.A.NO. 676, 699 /IND/2014 A.YS. 2009-10, 2010-11 & 2011-12 12 12 1,2,3 & 11 OF LPS. IN FACT, THESE ENTRIES WERE RELA TED TO THE PAYMENTS MADE/OUTFLOW BY THE APPELLANT TO THESE PER SONS IN VIEW OF ACCOMMODATION ENTRIES TAKEN FROM THEM. 1. THE APPELLANT HAD RECEIVED A CHEQUE OF RS. 50,00,00 0/- FROM SHRI SUBODH VARSHNEY IN THE FORM OF SHARE APPLICATION MONEY AND FOR THAT ACCOMMODATION ENTRY, CHARGES IN CASH. 2. SIMILARLY, IN THE CASE OF SHRI VIMAL CHHAJED, TH E APPELLANT HAD TAKEN LOAN BY CHEQUES IN THE NAME OF SMT. MAMTA CHHAJED W/O SHRI VIMAL CHHAJED FOR RS. 30,00,000/- AND SHRI VIMAL CHHAJED WAS RETURNED THE AMOUNT IN CASH IN LIEU OF PRINCIPAL AMOUNT OF RS. 30,00,000/- PLUS ENTRY FEE OF RS. 90,000/-. 3. THE AO ALSO MADE ADDITION OF RS. 10,00,000/- IN A.Y. 2008-09 ON ACCOUNT OF BOOKING ADVANCES RECEIVED FRO M SHRI SHYAM RATHORE WHEREAS, AS PER THE ENTRIES RECORDED IN A-1 DIARY, THE APPELLANT HAD RECEIVED TOTAL UNACCOUNTED PAYMENTS OF RS. 18,00,000/- IN CASH FOR BOOKING OF A FLAT FROM SHRI SHYAM RATHORE I.E. RS. 5,00,000/- ON 26.10.2008; RS. 5,00,000/- ON 01.10.2009 AND RS. 3,00,000/- ON 09.10.2009, TOTALLING TO RS. 18,00,00 0/-. THUS, THE APPELLANT HAD NOT RECEIVED ANY AMOUNT FRO M SHRI SHYAM RATHORE IN THE PERIOD RELEVANT TO A.Y. 2008-0 9 AS CONSIDERED BY THE LD. ASSESSING OFFICER BUT RECEIVE D IN A.Y. 2009-10 AND A.Y. 2010-11. IT MAY FURTHER BE NOTED T HAT THE LD. A.O., IN PARA NO. 10.3 OF THE ASSESSMENT ORDER, WHILE MAKING ADDITION OF RS. 27,24,000/- IN A.Y. 2011- 12,OBSERVED THAT OUT OF TOTAL RECEIPTS OF AMOUNT OF RS. 2,18,00,000/- AND, THEREFORE, THE BALANCE AMOUN T OF RS. 27,24,000/- WAS ADDED. BUT, IN FACT THE APPELLANT C OMPANY HAD NOT MADE ANY SURRENDER OF RS. 2,18,00,000/- AND HAD NOT DECLARED ANY SUCH INCOME FOR A.Y. 2011-12,WHICH IS EVIDENTLY CLEAR FROM TAXABLE INCOME AT RS. 3,125/- ONLY. FURTHER, THE AMOUNT OF RS. 2,45,24,000/- RECORDED I N SEIZED PAPERS OF LPS RELATED TO UNEXPLAINED EXPENSES/OUTFL OW AND NOT RECEIPTS. SIMILARLY THESE ARE CASES OF CONSIDER ING THE M/S.LILASON INFRASTRUCTURE PVT. LTD. VS. ACIT,1(2), BHOPAL I.T.(SS)A.NOS. 277 -278/IND/2014 I.T.A.NO. 676, 699 /IND/2014 A.YS. 2009-10, 2010-11 & 2011-12 13 13 SAME AMOUNTS TWICE IN THE ASSESSMENT YEAR, SUCH AS THE A.O. HAD MADE ADDITION OF RS. 1,65,81,000/- IN A.Y. 2011- 12 ON THE BASIS OF TRANSACTIONS RECORDED IN PAGE NO . 2 OF LPS, WHICH WAS THE TOTAL OF UNACCOUNTED BOOKING REC EIPTS RECEIVED IN CASH FROM VARIOUS CUSTOMERS UPTO 1 ST OCTOBER 2009 AND AGAIN SEPARATE ADDITIONS WERE MADE IN RELA TION TO THE BOOKING ADVANCES RECEIVED FROM THESE PERSONS AS RECORDED IN A-1 DIARY IN THE NAMES OF SHRI SHYAM RA THORE, SHRI ARVIND JOSHI, MRS. BHAVNA GUPTA & OTHERS. 3.6 THE SUBMISSION OF THE APPELLANT IS ALSO NOT FULLY ACCEPTABLE. THE CONTENTION OF THE APPELLANT DURING ASSESSMENT PROCEEDING THAT ENTRIES AT SR. 39 ON PAG E 11 OF LPS OF RS.13,75,000/- AND AT SR. NO. 46 ON PAGE 11 OF RS. 17,00,000/- IN THE NAME OF SHRI V. CHHAJED ARE DOUB LE ENTRY AS THE AMOUNT OF RS. 30,62,500/- WAS ALREADY ENTERED AT SR. NO. 12 OF PAGE 11 OF LPS IN THE NAME OF SHRI VIMAL CHHAJED, IS NOT FOUND CORRECT. ON VERIFICATIO N OF FACTS, IT IS NOTICED THAT THE APPELLANT HAD TAKEN ACCOMMOD ATION ENTRIES OF LOANS OF TOTAL AMOUNT OF RS. 60,00,000/- BY CHEQUES IN THE NAME OF SMT. MAMTA CHHAJED ON VARIOU S DATES AS UNDER :- DATE AMOUNT (RS.) 17.07.2008 25,00,000 01.05.2009 3,00,000 14.05.2009 2,00,000 04.02.2010 3,00,000 05.04.2010 5,00,000 13.04.2010 5,00,000 07.10.2010 2,00,000 07.10.2010 4,00,000 12.10.2010 11,00,000 TOTAL 60,00,000 ACCORDINGLY, THE APPELLANT HAD PAID CASH OF RS. 30,62,500/- IN LIEU OF EARLIER CHEQUES OF RS. 30,00 ,000/- PLUS ENTRY FEE/COMMISSION FOR ACCOMMODATION ENTRY A ND AGAIN PAID RS.13,75,000/- AND RS. 17,00,000/- FOR M/S.LILASON INFRASTRUCTURE PVT. LTD. VS. ACIT,1(2), BHOPAL I.T.(SS)A.NOS. 277 -278/IND/2014 I.T.A.NO. 676, 699 /IND/2014 A.YS. 2009-10, 2010-11 & 2011-12 14 14 ACCOMMODATION ENTRIES OF THE BALANCE AMOUNT OF RS. 30,00,000/- IN LIEU OF THE PRINCIPAL AMOUNT AND ENT RY FEE/COMMISSION. THUS, THERE WAS NO DOUBLE ENTRIES O F PAYMENTS MADE TO SHRI VIMAL CHHAJED AS CLAIMED BY T HE APPELLANT. THE EXPLANATION OF THE APPELLANT THAT SU RRENDER OF RS. 1,18,39,000/- BY THE DIRECTOR, SHRI ARUN LIL A, COVERED ALL THE TRANSACTIONS RECORDED IN SEIZED DOCUMENTS A ND NO FURTHER ADDITION WAS REQUIRED TO BE MADE IS ALSO NO T FOUND ACCEPTABLE AS DISCUSSED IN DETAIL, HEREIN UNDER. 3.7 ON EXAMINATION AND VERIFICATION OF THE SEIZED DOCUMENTS I.E. A-1 DIARY AND LPS SEIZED DURING SEAR CH & SEIZURE OPERATION AS APPEARING AT S.NO. 1 & 10 RESP ECTIVELY OF ANNEXURE A OF THE PANCHNAMA, ON THE BASIS OF WHI CH THE A.O. HAD MADE ADDITIONS, IN THE PRESENCE OF THE ASS ESSING OFFICER AND ALSO ON DISCUSSION WITH THE AUTHORISED REPRESENTATIVE OF THE APPELLANT DURING APPELLATE PROCEEDINGS, THE FACTS EMERGE IN RESPECT OF EACH DO CUMENT ARE DISCUSSED HEREIN UNDER :- 3.8 DIARY A-1 THIS IS A DIARY CONSISTING OF 50 PAGES OUT OF WHICH 15 PAGES ONLY WERE WRITTEN. THIS DIARY CONTAINS THE ENTRY OF UNACCOUNTED RECEIPTS RECEIVED BY THE APPELLANT FROM VARIOUS CUSTOMERS FOR BOOKING OF FLA TS ON 14 PAGES. FOR EXAMPLE, IN THE CASE OF SHRI SUNIL DANDIR, HE HAD BOOKED A FLAT IN THE NAME OF SHRI. R .P. DANDIR AND PAID AND AMOUNT OF RS. 21,00,000/- BY CHEQUES IN OCTOBER 2008, OCTOBER 2009 AND DECEMBER 2009 FROM HIS BANK AMOUNT WITH PUNJAB NATIONAL BANK AND AS PER ENTRIES RECORDED IN PAGE 6 OF THE DIARY, HE HAD PAID AN AMOUNT OF RS. 25,00,000/- ALSO IN CASH. THE AMOUNTS PAID BY THE CUSTOMER BY CHEQUES HAD BEEN RECORDED BY THE APPELLANT COMPANY IN ITS REGULAR BOOKS OF ACCOUNT, BUT THE CASH COMPONENT OF THE RECEIPTS WAS NOT RECORDED AND, THUS, REPRESENTED UNRECORDED RECEIPTS RECEIVED BY THE APPELLANT. SIMILARLY, IN THE CASE O F SHRI SHYAM RATHORE, THE APPELLANT COMPANY HAD M/S.LILASON INFRASTRUCTURE PVT. LTD. VS. ACIT,1(2), BHOPAL I.T.(SS)A.NOS. 277 -278/IND/2014 I.T.A.NO. 676, 699 /IND/2014 A.YS. 2009-10, 2010-11 & 2011-12 15 15 RECEIVED PAYMENT OF RS. 12,01,000/- FROM SHRI SHYAM RATHORE AND HIS WIFE, SMT. SHILPA RATHORE BY CHEQUES AND HAD ALSO RECEIVED AMOUNT IN CASH OF RS. 18,00,000/- ON DIFFERENT DATES, AS RECORDED IN PAGE NO. 6 OF THE DIARY. THE APPELLANT HAD ACCOUNTED FOR THE PAYMENTS RECEIVED BY CHEQUES IN ITS REGULAR BOOKS OF ACCOUNT BUT THE PAYMENTS RECEIVED IN CASH WERE NOT ACCOUNTED FOR IN THE REGULAR BOOKS OF ACCOUNT AND, THUS, REPRESENTED UNDISCLOSED RECEIPTS OF THE APPELLANT. SIMILAR IS THE POSITION WITH REGA RD TO OTHER CLIENTS AGAINST WHOM THE CASH PAYMENTS RECEIVED HAD BEEN RECORDED IN DIARY A-1 SIZED FROM THE PREMISES OF THE APPELLANT. THE TOTAL OF PARTY W ISE AMOUNTS RECEIVED BY THE APPELLANT IN CASH FROM THE CUSTOMERS AS RECORDED IN DIARY A -1 CAN BE SUMMARIZED AS UNDER :- S.NO. NAME OF THE CLIENT AMOUNT RECEIVED IN CASH (RS.) 1 BHAWNA GUPTA 49,00,000/- 2 NARESH GOEL 23,50,000/- 3 ARVIND JOSHI 3,00,000/- 4 SUNIL DANDIR 25,00,000/- 5 SHYAM RATHORE 18,00,000/- 6 BILLU (RANVIR SINGH) 4,50,000/- 7 SURESH PATEL 8,25,000/- 8 ANIL TIWARI 10,00,000/- 9 GAGAN 1,00,000/- 10 MAHENDRA SHUKLA 20,00,000/- 11 SHASHAM KOTHARI 19,06,000/- 12 DR. LAHRI 2,00,000/- TOTAL 18,31,000/ - DATE NAME AMOUNT (RS. IN LAKHS) 22.10.2008 BHAWNA GUPTA 15 M/S.LILASON INFRASTRUCTURE PVT. LTD. VS. ACIT,1(2), BHOPAL I.T.(SS)A.NOS. 277 -278/IND/2014 I.T.A.NO. 676, 699 /IND/2014 A.YS. 2009-10, 2010-11 & 2011-12 16 16 26.10.2008 SUNIL DANDIR 5 26.10.2008 SHYAM RATHORE 5 26.10.2008 RANVIR 2 27.10.2008 SUNIL DANDIR 5 04.11.2008 RANVIR 2.5 05.11.2008 SUNIL DANDIR 5 07.11.2008 SURESH PATEL 8.25 09.11.2008 NARESH 7.5 26.11.2008 SHYAM RATHORE 5 30.11.2008 ARVIND JOSHI 3 05.12.2008 BHAWNA GUPTA 9 ANIL TIWARI 10 31.01.2009 GAGAN 1 09.04.2009 MAHENDRA SHUKLA 20 14.04.2009 NARESH 16 30.04.2009 SHASHAM KOTHARI 5 05.05.2009 SHASHAM KOTHARI 6.56 22.07.2009 BHAWNA GUPTA 10 02.08.2009 BHAWNA GUPTA 15 01.10.2009 SUNIL DANDIR 5 01.10.2009 SHYAM RATHORE 5 TOTAL 165.81 09.10.2009 SUNIL DANDIR 5 09.10.2009 SHYAM RATHORE 3 13.04.2010 DR. LAHRI 2 26.05.2010 SHASHAM KOTHARI 7.5 TOTAL 17.5 GRAND TOTAL 183.31 IT MAY BE PERTINENT TO NOTE THAT ALL THE ABOVE TRANSACTIONS RECORDED IN DIARY A-1 HAD BEEN INCORPORATED IN PAGE NO. 10 OF LPS SEIZED FROM THE BUSINESS PREMISES OF THE APPELLANT SHOWING THE AGGREGATE RECEIPTS OF RS. 1,83,31,000/-. IN THE DIARY A-1, THE TRANSACTION WERE RECORDED IN SMALL FIGURE IN LAKHS WHEREAS, IN PAGE NO. 10 THE FULL FIGURE OF THE AMOUNTS HAD BEEN WRITTEN. IT MAY ALSO BE NOTED THAT THE FIGURE OF 165.81 MENTIONED ON M/S.LILASON INFRASTRUCTURE PVT. LTD. VS. ACIT,1(2), BHOPAL I.T.(SS)A.NOS. 277 -278/IND/2014 I.T.A.NO. 676, 699 /IND/2014 A.YS. 2009-10, 2010-11 & 2011-12 17 17 PAGE 2 OF LPS WAS THE SAME AMOUNT OF UNACCOUNTED RECEIPTS AS RECORDED IN DIARY A-1 UPTO 01.10.2009. THE ASSESSMENT YEAR-WISE BREAKUP OF THE ABOVE TRANSACTIONS RECORDED IN DIARY A-1 ARE AS UNDER: A.Y. AMOUNT (RS.) 2009-10 83,25,000 2010-11 90,56,000 2011-12 9,50,000 3.9 PAGE NO. 1,2,3 & 11 OF LPS : IT IS NOTICED FROM LOOSE PAPERS 1,2,3 & 11 THAT THE APPELLANT HAD INCURRED UNACCOUNTED EXPENSES WHICH WERE RECORDED ON THESE PAGES. THE ENTRIES MADE ON PAGE 1 WERE REPEATED IN PAGE 2, THEN IN PAGE 3 AND FINALLY ALL THE ENTRIES MADE ON PAGE 1 WERE REPEATED IN PAGE 2, THEN IN PAGE 3 AND FINALLY ALL THE ENTRIES WERE INCORPORATED IN PAGE 11 OF THE LPS. PAGE 2 CONTAINS THE TOTAL OF EXPENSES/OUTFLOW OF RS. 2,45,24,000/- AND AFTER INCORPORATING OTHER EXPENSES, THE TOTAL UNACCOUNTED EXPENSES/OUTFLOW BY THE APPELLANT COMPANY AS RECORDED ON PAGE 11 OF LPS WERE RS. 3,31,61,500/-. IT MAY BE NOTED THAT ON WRITTEN PAGE 15 OF A-1 DIARY ALSO, THERE ARE ENTRIE S RELATING TO UNEXPLAINED EXPENSES/OUTFLOW, WHICH HAD ALSO BEEN INCORPORATED IN PAGE NO. 11 OF LPS. IT WOULD BE RELEVANT TO REPRODUCE THE ENTRIES AS APPEARING ON PAGE 11 OF THE LPS AS UNDER: - M/S.LILASON INFRASTRUCTURE PVT. LTD. VS. ACIT,1(2), BHOPAL I.T.(SS)A.NOS. 277 -278/IND/2014 I.T.A.NO. 676, 699 /IND/2014 A.YS. 2009-10, 2010-11 & 2011-12 18 18 EXPECTED OUTFLOW UPDATED ON 12 OCT 2010 1 SECURITY 1,69,000 2 NAZUL 10,35,000 3 TNCP 21,43,000 4 SALARY 1,57,000 5 ROAD 60,00,000 6 MISC. EXPS. 70,000 7 ENTERTAINMENT 30,000 8 TICKETS 99,000 9 CONSULTANTS 2,86,000 10 N NIGAM 18,50,000 11 S. VARSHNEY (5000 + 150) 0 51,50,000 12 VIMAL CHHAJER 30,62,500 13 SALARY 1,00,000 14 PATEL (HC) 5,00,000 15 P R MAROO 1,00,000 16 RI 50,000 17 PF 65,000 18 N NIGAM 55,000 19 PROPERTY TAX 15,000 20 T.I. THANA 25,000 21 SALARY 60,000 22 ELECTION M CORPN 50,000 23 ALOK SHARMA 1,50,000 24 SANJAY JAIN 1,50,000 25 MANU DAGA 1,00,000 26 DHRUV S 1,00,000 27 UMASHANKAR GUPTA 1,00,000 28 R. SINGH (2000 + 200) 22,00,000 29 R.N. SINGH 50,000 30 ARUNESHWAR 1,00,000 31 CHANDER SHARMA 2,00,000 32 BANSAL (LIASON) 1,75,000 33 SAHU TNCP M/S.LILASON INFRASTRUCTURE PVT. LTD. VS. ACIT,1(2), BHOPAL I.T.(SS)A.NOS. 277 -278/IND/2014 I.T.A.NO. 676, 699 /IND/2014 A.YS. 2009-10, 2010-11 & 2011-12 19 19 50,000 34 ASHWINI RATHORE (ADV. SBI) 50,000 35 SHANKAR AGRAWAL 2,50,000 36 NARESH GOEL 21,00,000 37 MAHENDRA SHUKLA (20+2) 22,00,000 38 DANDER 8,00,000 39 VIMAL CHHAJER 13,75,000 40 VERMA 25,000 41 CASH EXP. 60,000 42 NAZUL 10,000 43 K.K.SINGH CHAUHAN 75,000 44 PROPERTY VALUATION 30,000 45 NAGAR NIGAM 40,000 46 V CHHAJED (12-10-10) 17,00,000 TOTAL PAYMENT 3,31,61,500 TOTAL RECT 1,83,31,000 DEFICIT 1,48,30,500 FROM THE ABOVE, IT MAY BE NOTED THAT APPELLANT HAD MADE CERTAIN PAYMENTS TO OFFICIALS OF NAZUL, TNCP AND OTHER DEPARTMENTS AS WELL AS HAD ALSO CONTRIBUTED PAYMENTS FOR ELECTION PURPOSES TO POLITICIANS AND OTHERS. WHEN THE DIRECTOR OF THE APPELLANT COMPANY, SHRI ARUN LILA, WAS CONFRONTED WITH THESE DOCUMENTS DURING SEARCH OPERATIONS, HE HAD SURRENDERED UNEXPLAINED EXPENDITURE IN HIS OWN M/S.LILASON INFRASTRUCTURE PVT. LTD. VS. ACIT,1(2), BHOPAL I.T.(SS)A.NOS. 277 -278/IND/2014 I.T.A.NO. 676, 699 /IND/2014 A.YS. 2009-10, 2010-11 & 2011-12 20 20 HAND TO THE EXTENT OF RS. 1,18,39,000/-, WHICH REPRESENTED UNEXPLAINED EXPENDITURE RECORDED IN FIRST TEN ITEMS AS MENTIONED IN PAGE NO. 11 OF LPS REFERRED ABOVE, AS UNDER :- 1 SECURITY 1,69,000 2 NAZUL 10,35,000 3 TNCP 21,43,000 4 SALARY 1,57,000 5 ROAD 60,00,000 6 MISC. EXPS. 70,000 7 ENTERTAINMENT 30,000 8 TICKETS 99,000 9 CONSULTANTS 2,86,000 10 N NIGAM 18,50,000 TOTAL 1,18,39,000 SHRI ARUN LILA HAD ALSO REFERRED THIS AMOUNT FOR TA XATION IN HIS RETURN OF INCOME FOR A.Y. 2011-12 AND PAID T AX THEREON. THEREFORE, THE BALANCE AMOUNT OF UNEXPLAIN ED EXPENDITURE INCURRED BY THE APPELLANT COMPANY RECOR DED IN THESE SEIZED DOCUMENTS WORKED OUT TO RS. 2,13,22,500/- (RS. 3,31,61,500 RS. 1,18,39,000). IT MAY ALSO BE NOTED THAT ON THESE PAGES, THE DATES WE RE MENTIONED AS APRIL 2009 ONLY AGAINST SOME OF THE EXPENSES, BUT AGAINST OTHER EXPENSES, DATES WERE NO T MENTIONED, THEREFORE, THE BALANCE EXPENSES HAVE TO BE PRESUMED TO BE INCURRED DURING THE FINANCIAL YEAR I N WHICH THE SEARCH & SEIZURE OPERATIONS WERE CONDUCTE D I.E. IN A.Y. 2011-12. 3.10 SECTION 292C(1)(II) OF THE ACT PROVIDES THAT WHERE ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS ARE FOUND IN THE POSSESSION OR CONTROL OF ANY PERSON IN THE COURSE OF A SEARCH UNDER SECTION 132, IT MAY, IN AN Y PROCEEDINGS UNDER THIS ACT, BE PRESUMED THAT THE CONTENTS OF SUCH BOOKS OF ACCOUNT AND OTHER DOCUMEN TS M/S.LILASON INFRASTRUCTURE PVT. LTD. VS. ACIT,1(2), BHOPAL I.T.(SS)A.NOS. 277 -278/IND/2014 I.T.A.NO. 676, 699 /IND/2014 A.YS. 2009-10, 2010-11 & 2011-12 21 21 ARE TRUE. THE APPELLANT HAD NOT DENIED THE CONTENTS OF THESE DOCUMENTS. THE VERY FACT THAT THE DIRECTOR OF THE APPELLANT COMPANY OFFERED FOR TAXATION AN AMOUNT OF RS. 1,18,39,000/- OUT OF UNEXPLAINED EXPENSES RECORDED ON THESE DOCUMENTS SHOW THAT THE APPELLANT IN FACT ADMITTED THAT THE CONTENTS OF SUCH DOCUMENTS ARE TR UE. 3.11 NOW, ON APPRAISAL OF SEIZED DOCUMENTS DIARY A- 1 AND LOOSE PAPERS 1,2,3, 10 & 11 OF LPS, THE POSIT ION WHICH EMERGES OUT IS THAT THESE PAPERS CONTAINED TRANSACTIONS OF UNACCOUNTED RECEIPTS AMOUNTED TO RS . 1,83,31,000/- HAD BEEN DECLARED BY THE DIRECTOR, SH RI ARUN LILA, IN HIS OWN HANDS AND PAID TAX THEREON AN D, THUS, THE NET UNACCOUNTED EXPENSES WERE RS. 2,13,22,500/- (RS. 3,31,61,500 RS. 1,18,39,000). THUS, THE UNACCOUNTED EXPENSES WERE MORE THAN THE UNACCOUNTED RECEIPTS WERE USED TO MAKE UNACCOUNTED EXPENDITURE WOULD BE RS. 2,13,22,500/- I.E. UNACCOUNTED RECEIPTS OR UNACCOUNTED EXPENSES WHICH EVER WAS MORE. THEREFORE, THE TOTAL ADDITION REQUIR ED TO BE MADE ON ACCOUNT OF THESE UNACCOUNTED TRANSACTION S OF RECEIPTS AND UNACCOUNTED EXPENDITURE WORKED OUT AT RS. 2,13,22,500/-. NOW, THE ISSUE IS THE YEAR OF TAXABILITY OF THESE UNACCOUNTED TRANSACTIONS. AS MENTIONED ABOVE, IN THE DIARY A-1, WHICH CONTAINS TRANSACTIONS OF THE UNACCOUNTED RECEIPTS ON BOOKING OF FLATS FROM VARIOUS CUSTOMERS, THE DATE OF EACH RECE IPT HAD BEEN WRITTEN. AS MENTIONED EARLIER, THE TOTAL RECEIPTS RECEIVED BY THE APPELLANT DURING THE PERIO DS RELEVANT TO DIFFERENT ASSESSMENT YEAR UNDER CONSIDERATION WERE AS UNDER :- A.Y. 2009-10 RS. 83,25,000 A.Y. 2010-11 RS. 90,56,000 A.Y. 2011-12 RS. 9,50,000 TOTAL RS. 1,83,31,000 M/S.LILASON INFRASTRUCTURE PVT. LTD. VS. ACIT,1(2), BHOPAL I.T.(SS)A.NOS. 277 -278/IND/2014 I.T.A.NO. 676, 699 /IND/2014 A.YS. 2009-10, 2010-11 & 2011-12 22 22 THEREFORE, IN A.Y. 2009-10, AN ADDITION OF RS. 83,25,000/- AND IN A.Y. 2010-11, AN ADDITION OF RS. 90,56,000/- WAS REQUIRED TO BE MADE AS UNACCOUNTED RECEIPTS WERE MORE THAN THE UNACCOUNTED EXPENSES. BUT IN THE A.Y. 2011-12, THE ADDITION REQUIRED WOULD BE THE BALANCE AMOUNT OF EXPLAINED EXPENSES ADDITION OF RS. 83,25,000/- IN A.Y. 2009-10 ADDITION OF RS. 90,56,000/- IN A.Y. 2010-11), AS THE UNACCOUNTED EXPENSES WERE MORE THAN UNACCOUNTED RECEIPTS. THUS, CONSIDERING THE TOTALITY OF FACTS OF THE CASE AND AFTER PROPER APPR AISAL OF THE SEIZED DOCUMENTS, THE A.O. IS DIRECTED TO MA KE ADDITIONS IN DIFFERENT ASSESSMENT YEARS, AS UNDER : - A.Y. 2009-10 RS. 83,25,000 A.Y. 2010-11 RS. 90,56,000 A.Y. 2011-12 RS. 39,41,500 TOTAL RS. 2,13,22,500 12. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THESE DOCUMENTS WERE FOUND DURING SEA RCH. LPS A-1 PG. 11 IS ONE OF THE IMPORTANT DOCUMENTS (P B 97). IT IS TITLED AS EXPECTED OUTFLOW UPDATED ON 12.10.2010. IT IS PERTINENT TO NOTE THAT SOON AFTER THIS DOCUMENT WAS GENERATED, A SEARCH TOOK PLACE ON 28.10.2010. ANY DOCUMENT WHIC H WAS FOUND IN SEARCH, SHALL NOT BE READ IN A HALF MANNER , BUT SHALL M/S.LILASON INFRASTRUCTURE PVT. LTD. VS. ACIT,1(2), BHOPAL I.T.(SS)A.NOS. 277 -278/IND/2014 I.T.A.NO. 676, 699 /IND/2014 A.YS. 2009-10, 2010-11 & 2011-12 23 23 BE READ FULLY. AS PER SECTION 292C, WHICH WAS QUOTED BY THE LD CIT(A) HIMSELF, THE CONTENTS OF ANY DOCUMENT FOUND DURING SEARCH MAY BE ASSUMED TO BE TRUE, UNLESS DEPARTMENT PROVES THE CONTENTS TO BE FALSE. NOW SINCE THIS DOCUMENT I S TITLED AS EXPECTED, HOW CAN ALL ENTRIES IN THIS DOCUMENT BE ASSUMED TO BE CORRECT. IN FACT, IN MOST OF THE ENTRIES, DAT ES ARE NOT MENTIONED. THE DEPARTMENT DID NOT CHOOSE TO VERIFY/ ENQUIRE THE DATES OF PAYMENTS, IF ANY. IT WAS, THEREFORE, S UBMITTED THAT THESE WERE EXPECTED OUTFLOWS. EVEN IF THEY ARE RE AL OUTFLOWS, IT IS NOT CLEAR AS TO WHICH YEAR THEY RELATE. ONLY I N RESPECT OF A VERY FEW TRANSACTION, EITHER THE DATE IS MENTIONED O R IT WAS CORRELATED BY LD CIT(A). THE ALLOCATION OF LD CIT(A ) FOR ALLOCATION OF EXPENSES YEAR-WISE IS BASED ON PRESUMPTIONS AND ASSUMPTIONS. THERE IS NO BASIS AT ALL FOR DOING SO. NO DATE IS WRITTEN ON THE PAYMENTS. THUS, THE SAME IS A DUMB DOCUMENT. NO ENQUIRY WAS CONDUCTED TO RELATE THE PAY MENT TO ANY YEAR. MERELY HOLDING THAT THE ENTRIES ARE PRESU MED TO BE RELATED TO F.Y. 2010-11 IS BASELESS. A DUMB DOCUME NT, NOT SPECIFYING THE YEAR, TO WHICH IT RELATES WILL NOT HAV E ANY EVIDENTIARY VALUE AND CANNOT BE USED FOR MAKING THE ADDITION M/S.LILASON INFRASTRUCTURE PVT. LTD. VS. ACIT,1(2), BHOPAL I.T.(SS)A.NOS. 277 -278/IND/2014 I.T.A.NO. 676, 699 /IND/2014 A.YS. 2009-10, 2010-11 & 2011-12 24 24 IN ANY YEAR. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE RELIED UPON THE FOLLOWING DECISIONS :- ACIT VS ASHOK KUMAR VIG 15 SOT 85 (RANCHI)(URO) CIT VS GIRISH CHAUDHARY 163 TAXMAN 608 (DEL.) BANSAL STRIPS 99 ITD 177 (DEL.) ACIT VS DR. KAMLA PRASAD SINGH, 3 ITR (TRIB.) 533 (PATNA) GYANKUMAR AGRAWAL, 30 TAXMANN.COM 114 (HYD.) IT WAS FURTHER SUBMITTED BY THE LD. AUTHORIZED REPR ESENTATIVE FOR THE ASSESSEE THAT DURING THE COURSE OF SEARCH, THESE DOCUMENTS WERE SEIZED FROM SHRI ARUN LILA. SHRI ARUN LILA IN HIS STATEMENT HAS CATEGORICALLY MADE A SURRENDER BA SED ON THESE DOCUMENTS. IT WAS REITERATED THAT THE SURRENDE R ALREADY COVERS ALL THE LOOSE PAPERS. HIS STATEMENT WAS RECOR DED, WHICH IS AS FOLLOWS : QUESTION NO. 4-7 OF THE STATEMENT DATED 28.10.2010 IS RELEVANT. 4 : , E-4/ 131, , ' ' ) M/S.LILASON INFRASTRUCTURE PVT. LTD. VS. ACIT,1(2), BHOPAL I.T.(SS)A.NOS. 277 -278/IND/2014 I.T.A.NO. 676, 699 /IND/2014 A.YS. 2009-10, 2010-11 & 2011-12 25 25 LPS 1 . 1 ' , . ' ? - 1 . 3 ' LPS 1 LPS 2 ) . 6 ' 5 - LPS 1/3 ' , ) 1 . 7 8 3 ' , 1 CURRENT FINANCIAL YEAR ' , SECURITY 169000, 1035000 1,18,39,000 , ) ? - . 1,18,39,000 7 , ) 6 - ' @ (EXP ) ' , ' RS. 1400000 RS. 26,00,000 ' - TNPC DATE 13.04.2009 . ) ? - 8 6 @ 2 ) ' , ) 7 7 - ) A -1 ' ) ENTRIES ' - ' ( 8 ) ) , LPS 1 ' 6 . ' , 7 ' 6 ' ' , REGULAR BOOKS ) ENTERED ) ) E 11839000 7 M/S.LILASON INFRASTRUCTURE PVT. LTD. VS. ACIT,1(2), BHOPAL I.T.(SS)A.NOS. 277 -278/IND/2014 I.T.A.NO. 676, 699 /IND/2014 A.YS. 2009-10, 2010-11 & 2011-12 26 26 THUS, SHRI ARUN LILA HAD ALREADY OFFERED RS. 1,18,39,000/-. THIS ADDITION WAS BASED ON THE LOOSE PAPERS. IT IS PERTINENT TO NOTE THAT THE LPS A-1 PG . 11 ITSELF SHOWS THAT THE EXPECTED RECEIPTS WERE RS. 1,83,31,000/-, AS REDUCED BY THE EXPECTED PAYMENT S OF RS. 3,31,61,500/-. THUS THE NET DEFICIT ARRIVED AT IS RS. 1,48,30,500. FURTHER, AN AMOUNT OF ENTRY OF SHRI VI MAL CHHAJED OF RS. 30,75,000/- WAS MADE MULTIPLE TIMES. THUS, IN A NUTSHELL, OUT OF THE NET FIGURE OF RS. 1,48,30,500, IF RS. 30,75,000 REDUCED, BEING DOUBLE ENTRY DUE TO ROTATION OF FUNDS, THEN THE NET AMOUNT COMES TO RS. 1,17,55,500/-. THE ASSESSEE HAD ALREAD Y OFFERED RS. 1,18,39,000/- WHICH COVERS THE AFORESAID ADDITION. NO FURTHER ADDITION IS CALLED FOR IN THE MATTER. WHEN UNACCOUNTED INCOME IS FOUND, THE RECEIPTS HAVE TO BE NETTED WITH THE EXPENSES, SO AS TO TAX THE NET IN COME. PG. 10 IS THE RECEIPTS, PG. 11 IS THE EXPENSES. THE SE ENTRIES NEED TO BE NET OFF SO AS TO MAKE THE SAME B ALANCE AND TAX THE NET AMOUNT. M/S.LILASON INFRASTRUCTURE PVT. LTD. VS. ACIT,1(2), BHOPAL I.T.(SS)A.NOS. 277 -278/IND/2014 I.T.A.NO. 676, 699 /IND/2014 A.YS. 2009-10, 2010-11 & 2011-12 27 27 13. IN RESPECT TO THE ENTRIES OF VIMAL CHHAJED AND MAMT A CHHAJED, IT WAS SUBMITTED THAT ON LPS A-1 PG. 11, FO LLOWING ENTRIES ARE WRITTEN IN RESPECT OF VIMAL CHHAJED: - SR. NO. AMOUNT FURTHER NOTING 12 30,62,500 - 39 13,75,000 A/C CLEAR TILL 31-05- 10 46 17,00,000 12-10-10 14. IT WAS SUBMITTED THAT IN THE BALANCE SHEET AS ON 31.03.2009, THE UNSECURED LOANS ARE SHOWN AS NIL. (P B 23). THE LOAN IF ANY RECEIVED HAS BEEN REPAID. THUS, THE RE IS A ROTATION OF FUNDS. IF THE LD CIT(A) HOLDS THAT THE ENTRY OF SMT. MAMTA CHHAJED WAS ACCOMMODATION ENTRY, THEN IT WAS RE PAID. AND THE AMOUNT WAS AGAIN AVAILABLE WITH THE APPELLANT . THIS AMOUNT COULD HAVE BEEN USED FOR MAKING A FRESH ENTR Y SUBSEQUENTLY. THUS, DURING THE PERIOD, ANY LOAN FRO M SMT. MAMTA CHAJJED CAN BE ADDED ONLY ON THE BASIS OF PEA K FIGURE AND NOT THE ENTIRE AMOUNT. THIS ASPECT WAS NOT CONSI DERED BY THE LD CIT(A). IT WAS THEREFORE SUBMITTED THAT THE P EAK WAS NOT M/S.LILASON INFRASTRUCTURE PVT. LTD. VS. ACIT,1(2), BHOPAL I.T.(SS)A.NOS. 277 -278/IND/2014 I.T.A.NO. 676, 699 /IND/2014 A.YS. 2009-10, 2010-11 & 2011-12 28 28 RS. 60 LACS, AS THE LOAN TAKEN IN F.Y. 2008-09 WAS S HOWN TO HAVE BEEN REPAID AND WAS NOT A PART OF BALANCE SHEET ON 31.03.2009. THUS, CONSIDERING THIS ASPECT, THE ASSE SSEE PRAYED THAT THE ENTRIES IN THE NAME OF SMT. VIMAL/ MAMTA CHHAJED BE GIVEN CREDIT OF. 15. IT IS THEREFORE SUBMITTED THAT IT CAN BE EXAMINED F ROM THE RECORDS THAT THE LOOSE PAPERS LPS A-1 PG. 10 TI TLED AS EXPECTED FUND FLOW WHICH IS A SUMMARY OF UNACCOUN TED CASH RECEIPTS IN RESPECT OF BOOKING ADVANCES. OF TH E TOTAL BOOKINGS ADVANCES WHICH WERE RECORDED ON THIS PAGE AT RS. 1,83,31,000, RS. 51,50,000 WERE RETURNED BACK TO TH E CUSTOMERS, AS POINTED OUT IN THE PAGE ITSELF. THUS THE NET UNACCOUNTED RECEIPTS ARE RS. 1,31,61,000. IT IS FUR THER SUBMITTED THAT ON LPS A-1 PG. 1, CERTAIN UNRECORDED EXPENSES WERE RECORDED. THESE EXPENSES WERE REPEATED ON LPS A -1 PG. 2, AND THEN ON LPS A-1 PG. 3 AND A COMPUTER PRINTED SHEET LPS A-1 PG. 11. THESE PAGES ARE PLACED AT PAPER BOO K PAGES 94, 95, 96, 97. PAGE 97 CONTAINS ALL THE ENTRIES OF EXPENSES. THE COMPUTER PRINTED SHEET IS TITLED AS EXPECTED OUTFLOWS UPDATED 12.10.2010. THERE IS NO DATE OF EXPENSES NOTED ON M/S.LILASON INFRASTRUCTURE PVT. LTD. VS. ACIT,1(2), BHOPAL I.T.(SS)A.NOS. 277 -278/IND/2014 I.T.A.NO. 676, 699 /IND/2014 A.YS. 2009-10, 2010-11 & 2011-12 29 29 THESE PAGES. HOWEVER, PERUSAL OF EARLIER PAGES SHOW C ERTAIN DATES, ONLY IN RESPECT OF 5-6 ENTRIES. OTHER ENTRIE S HAVE NO DATES. EVEN WHERE DATES ARE MENTIONED, SOME OF THEM RELATE TO F.Y. 2007-08 RELEVANT TO A.Y. 2008-09. HOW, THE LD C IT(A) CAME TO THE CONCLUSION THAT ALL THE EXPENSES RELATE TO THE F.Y. OF SEARCH I.E. F.Y. 2010-11 IS NOT KNOWN. NO BASIS H AS BEEN GIVEN BY HIM. HE MERELY MENTIONED THAT SINCE THE F. Y. OF EXPENDITURE IS NOT MENTIONED, THE SAME IS TAKEN AS F.Y. 2010- 11. SUCH A PRESUMPTION HAS NO LEGS TO STAND. THE NE T RECEIPTS AND PAYMENTS WILL HAVE TO BE THEREFORE ADJUSTED AND THE YEAR- WISE CALCULATION ARRIVED AT BY THE LD CIT(A) HAS NO LEGS TO STAND, AS ALTHOUGH THE YEAR OF RECEIPTS IS CLEAR, B UT THE YEAR OF PAYMENTS IS NOT CLEAR AND SOME OF THE PAYMENTS MAY ALSO GO BEYOND THE YEARS UNDER APPEAL. 16. IT NEEDS TO BE MENTIONED THAT DURING SEARCH, A SURRENDER WAS MADE IN RESPECT OF LOOSE PAPER LPS A- 1 PG. 1,2,3, 11 AND LPS A-1 PG. 10. THE SURRENDER OF RS. 1,18,39,000 IS TO BE GIVEN CREDIT OF. THE LD AO WRON GLY MENTIONED THIS FIGURE AS RS. 2,18,00,000 WHICH WAS CO RRECTED M/S.LILASON INFRASTRUCTURE PVT. LTD. VS. ACIT,1(2), BHOPAL I.T.(SS)A.NOS. 277 -278/IND/2014 I.T.A.NO. 676, 699 /IND/2014 A.YS. 2009-10, 2010-11 & 2011-12 30 30 BY LD CIT(A). THE FIGURE OF SURRENDER IS TAKEN AS R S. 1,18,39,000. 17. IN ANY CASE, IT IS SUBMITTED THAT ON PAGE 97 OF THE PAPER BOOK, LPS A-1 PG. 11 CLEARLY MENTIONS THE E XPECTED OUTFLOWS AT RS. 3,31,61,500. OF THESE ENTRIES, EN TRY NO. 35 TO 38 CLEARLY MENTIONS THE RETURN OF THE BOOKING ADVAN CE AT RS. 51,50,000. THUS, THE NET EXPENSES REFLECTED ON PAGE LPS A-1 PG. 11 IS RS. 2,80,11,500. ON THIS PAGE ITSELF, THE RECEIPTS OF RS. 1,83,31,000 ARE REDUCED FROM THE GROSS EXPENSES OF RS. 3,31,61,500, RESULTING IN NET EXCESS OF EXPENSES OF RS. 1,48,30,500. IT IS A SETTLED LAW THAT A PART OF THE LOOSE PAPER CANNOT BE ACCEPTED, REJECTING A PART OF SAME. ONCE THE RECEIPTS ARE ACCEPTED, THE EXPENSES HAVE TO BE CONSIDERED, A ND THE TRANSACTIONS IN THE LOOSE PAPERS HAVE TO BE NETTED TO ARRIVE AT THE CORRECT POSITION. A DOCUMENT HAS TO BE READ AS A WHOLE. IN THE PRESENT CASE, READING THIS DOCUMENT AS A WHOLE, THE RECEIPTS AND EXPENSES, WHEN THEY ARE NETTED, IT RESU LTS IN A NET FIGURE OF RS. 1,48,30,500 AS UNDER : M/S.LILASON INFRASTRUCTURE PVT. LTD. VS. ACIT,1(2), BHOPAL I.T.(SS)A.NOS. 277 -278/IND/2014 I.T.A.NO. 676, 699 /IND/2014 A.YS. 2009-10, 2010-11 & 2011-12 31 31 PARTICULARS AMOUNT AMOUNT AFTER REDUCING BOOKING ADVANCE TOTAL PAYMENT AS PER LPS A - 1 PG. 11 3,31,61,500 2,80,11,500 LESS : TOTAL RECEIPTS LPS A - 1 PG. 11 (ALSO LPS A-1 PG. 10 AND DIARY A-1) 1,83,31,000 1,31,81,000 NET DEFICIT 1,48,30,500 1,48,30,500 THE LD CIT(A) HAS DONE A DETAILED EXAMINATION ON TH E MATTER AND HELD THAT THE ENTRY IN RESPECT OF VIMAL CHHAJED REPRESENTED AMOUNT PAID TO HIM OBTAINING UNSECURED LOAN ENTRY IN THE NAME OF HIS WIFE MAMTA CHAJJED. THE LD CIT(A) NOTED THAT EVEN THE COMMISSION COMPONENT WAS MENTION ED IN THE ENTRIES. HE THEREFORE CONCLUDED THAT THE TOTAL ENTRIES OBTAINED OVER DIFFERENT YEARS WAS RS. 60,00,000/-. IT IS FURTHER SUBMITTED THAT CREDIT IN THE NAME OF MAMTA CHHAJJED WAS RS. 25,00,000 ON 31.03.2009; THEREAFTER ON 31.03.2010 THE CREDIT TURNED OUT TO RS. 33,00,000; AND THEN THE AMOUNT WAS TAKEN AT RS. 20,96,978 ON 31.03.2011. THEREFORE, THE PEAK AMOUNT SHALL ONLY BE CONSIDERED WHILE MAKING THE ADDITION, WHICH IS RS. 33,00,000. OUT OF THE TOTAL CREDITS OF RS. 60,00,000 REFLECTED ON LPS A-1 PG. 1 1 IN THE NAME OF MAMTA CHHAJED, THE PEAK OF RS. 33,00,000 IS TO BE M/S.LILASON INFRASTRUCTURE PVT. LTD. VS. ACIT,1(2), BHOPAL I.T.(SS)A.NOS. 277 -278/IND/2014 I.T.A.NO. 676, 699 /IND/2014 A.YS. 2009-10, 2010-11 & 2011-12 32 32 CONSIDERED, IN ANY CASE, WHILE TOTALLING THE EXPENSE S, AND A RELIEF OF RS. 27,00,000 SHALL BE GIVEN WHILE COMPUTI NG THE TOTAL EXPENSES. THUS THE TOTAL EXPENSES OF RS. 3,31,61,50 0 SHALL BE REDUCED BY BOOKING ADVANCE RETURNED RS. 51,50,000 A ND THEREAFTER BY THE ROTATION OF ENTRY IN THE NAME OF MAMTA CHHAJED AT RS. 27,00,000, BEING AMOUNT OVER AND ABO VE THE PEAK. BALANCE AMOUNT OF RS. 2,53,11,500 SHALL BE NE TTED WITH THE NET BOOKING RECEIPTS OF RS. 1,31,81,000. THUS, IT IS SUBMITTED THAT THE BALANCE AMOUNT RS. 1,21,30,500 I S THE NET UNACCOUNTED INCOME, IN ANY CASE. THE AMOUNT OF RS. 1,18,39,000, WHICH HAS BEEN SURRENDERED DURING SEARC H ITSELF HAS TO BE GIVEN CREDIT OF. THUS, THE NET FIGURE OF RS. 2,91,500 REMAINS TO BE ADDED. TO SUMMARIZE, IN ANY CASE, IT IS SUBMITTED THAT THE NET ADDITION IS WOULD BE AS UNDER : PARTICULARS AMOUNT TOTAL PAYMENT AS PER LPS A - 1 PG. 11 3,31, 61,500 LESS : REPAYMENT OF BOOKING ADVANCE 51,50,000 LESS : CREDIT OF RS. 27,00,000 IN RESPECT OF ROTATION OF FUNDS OF VIMAL CHHAJED IN THE NAME OF MAMTA CHHAJED 27,00,000 2,53,11,500 LESS : NET RECEIPTS (NET OF BOOKING ADVANCE) 1,31,8 1,000 1,21,30,500 LESS : AMOUNT ALREADY SURRENDERED 1,18,39,000 BALANCE AMOUNT 2,91,500 M/S.LILASON INFRASTRUCTURE PVT. LTD. VS. ACIT,1(2), BHOPAL I.T.(SS)A.NOS. 277 -278/IND/2014 I.T.A.NO. 676, 699 /IND/2014 A.YS. 2009-10, 2010-11 & 2011-12 33 33 18. IT IS PRAYED THAT THE ADDITION OF THE LD CIT(A) BE ,THEREFORE, DELETED. 19. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE FINDINGS OF THE LD. AO ARE PROPER. THEREFORE, T HE ADDITION NEEDS TO BE SUSTAINED. HE SUBMITTED THAT THE PAPERS WERE FOUND DURING THE COURSE OF SEARCH, WHICH DEPICTED EN TRIES. PART OF THE ENTRIES WERE EVEN SURRENDERED BY SHRI A RUN LILA DURING THE COURSE OF SEARCH. FURTHER, EVEN DURING T HE COURSE OF ASSESSMENT, THE ASSESSEE WAS UNABLE TO TALLY THES E ENTRIES WITH THE BOOKS OF ACCOUNTS. THEREFORE, THEY WERE UNR ECORDED. EVEN TODAY THE ASSESSEE IS UNABLE TO ESTABLISH THAT THE ENTRIES ARE RECORDED IN THE BOOKS OF ACCOUNTS. THESE RELATE TO UNRECORDED TRANSACTIONS OF THE ASSESSEE, WHICH HAS B EEN ACCEPTED BY SHRI ARUN LILA DURING THE COURSE OF SEA RCH. THE TOTAL OF THESE ENTRIES SHALL BE ADDED AS UNRECORDED INCOME/EXPENDITURE OF THE ASSESSEE. 20. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE ASSESSEE COMPANY IS ENGAGED IN THE CONSTRUCTION OF RESIDENTIAL AND COMMERCIAL COMPLEXE S. THE M/S.LILASON INFRASTRUCTURE PVT. LTD. VS. ACIT,1(2), BHOPAL I.T.(SS)A.NOS. 277 -278/IND/2014 I.T.A.NO. 676, 699 /IND/2014 A.YS. 2009-10, 2010-11 & 2011-12 34 34 ASSESSEE-COMPANY LAUNCHED A HOUSING PROJECT IN E-3, ARERA COLONY, BHOPAL, IN THE NAME OF KANHA TOWER CONSIS TING OF 252 FLATS AND ALSO A MALL. DURING THE COURSE OF SEA RCH, A DIARY CONSISTING OF 50 PAGES OUT OF WHICH 15 PAGES WERE WR ITTEN. THE DIARY CONTAINS THE ENTRY OF ACCOUNTED AND UNACCOUNT ED RECEIPTS BY THE ASSESSEE FROM VARIOUS CUSTOMERS FOR BOOKING OF FLATS. THE AMOUNT RECEIVED BY THE CHEQUE HAS BEEN RECORDED IN THE BOOKS OF ACCOUNTS. THE AMOUNT RECEIVED IN CA SH WAS UNACCOUNTED RECEIPTS. THE ASSESSEE HAS WRITTEN CASH PAYMENT IN HIS DIARY A-1 SEIZED FROM THE PREMISES OF THE AS SESSEE. THE TOTAL PARTY-WISE AMOUNT RECEIVED BY THE ASSESSEE IS RS. 1,83,31,000/-. IN ASSESSMENT YEAR 2009-10, THE TOT AL RECEIPT IN LAKHS IS RS. 83,25,000/-. SIMILARLY, IN ASSESSME NT YEAR 2010-11, THE ASSESSEE HAS RECEIVED AMOUNT OF RS. 90 ,56,000/- AND IN ASSESSMENT YEAR 2011-12, THE ASSESSEE HAS RE CEIVED AMOUNT OF RS. 9,50,000/-. DURING THE COURSE OF SEAR CH, ONE LOOSE PAPER WAS FOUND WHICH IS MARKED AS LPS A-1 PAGE 10, WHEREIN IT IS SHOWN THAT THE ASSESSEE WAS EXPECTED FUN D FLOW AND AFTER EXPECTED FUND FLOW, WHICH IS THE AMOUNT RET URNED IS RS. 51,50,000/-. ON PAGE 98, RS.2,50,000/- WAS REPAI D TO M/S.LILASON INFRASTRUCTURE PVT. LTD. VS. ACIT,1(2), BHOPAL I.T.(SS)A.NOS. 277 -278/IND/2014 I.T.A.NO. 676, 699 /IND/2014 A.YS. 2009-10, 2010-11 & 2011-12 35 35 SHRI SHANKAR AGRAWAL AND SMT. KAMLA KOTHARI WAS REPAI D THE AMOUNT OF RS. 19,06,000/-. DURING THE COURSE OF SEA RCH, THE ASSESSEE HAS SURRENDERED THE AMOUNT OF RS. 1,18,39, 000/- IN RESPECT OF THESE PAPERS. SHRI ARUN LILA HAS ALSO S URRENDERED RS. 2,18,00,000/- TOWARDS LOOSE PAPERS AND CASH. THU S, RS. 4,00,00,000/- WAS SURRENDERED TO COVER ALL LOOSE PAP ERS AND CASH ETC. THE AO HAS VERIFIED THE DOCUMENTS AND DIA RY. HE HAS MADE THE ADDITION OF RS. 1,65,81,000/- AND AFTER CO NSIDERING THIS, THE AO FOUND THAT THE AMOUNT MENTIONED IN THE LOOSE PAPERS NEITHER TALLIED WITH THE BOOKS OF ACCOUNTS OF THE ASSESSEE NOR THE ASSESSEE WAS ABLE TO RECONCILE WITH THEM WITH ANY PLAUSIBLE EXPLANATION AND HE MADE THE ADDITION IN VARIOUS YEARS. THE LD. CIT(A), AFTER EXAMINING THE DOCUMENT S AND DIARY AND DISCUSSING EACH AND EVERY INCOME, HAS CONSIDERE D UNACCOUNTED INCOME AND CASH. THE LD. CIT(A) DIRECT ED THE AO TO ASSESS THE INCOME IN ASSESSMENT YEAR 2009-10 AT RS. 83,25,000/-, IN ASSESSMENT YEAR 2010-11 AT RS. 90,5 6,000/- AND IN ASSESSMENT YEAR 2011-12 AT RS. 39,41,500/-. THE ASSESSEE IS IN APPEAL BEFORE US ON THE GROUND THAT THE LD. CIT(A) IS NOT JUSTIFIED IN GIVING THE DIRECTION REG ARDING M/S.LILASON INFRASTRUCTURE PVT. LTD. VS. ACIT,1(2), BHOPAL I.T.(SS)A.NOS. 277 -278/IND/2014 I.T.A.NO. 676, 699 /IND/2014 A.YS. 2009-10, 2010-11 & 2011-12 36 36 ASSESSING THE INCOME AND THE DEPARTMENT IS IN APPEA L FOR DELETING THE SAME. WE HOLD THAT FROM THE RECORD A L OOSE PAPER LPS A-10 IS EXPECTED FUND FLOW WHICH IS SUMMARY OF UNACCOUNTED CASH RECEIPTS IN RESPECT OF BOOKING ADV ANCE. OUT OF TOTAL BOOKING ADVANCE, WHICH WAS AT RS. 1,83,31,0 00/-, RS. 51,50,000/- WERE RETURNED BACK. THUS, THE NET RECEI PTS IS AT RS. 1,31,81,000/-. IN LPS A-1, CERTAIN UNRECORDED E XPENSES WERE RECORDED. THE COMPUTER BRIEF SHEET IS TITLED AS EXPECTED OUT FLOW UPDATED 12.10.2010. THERE IS NO DATE OF E XPENSES NOTED ON THESE PAGES. HOWEVER, PERUSAL OF EARLIER P AGES SHOW CERTAIN DATES ONLY IN RESPECT OF 5-6 ENTRIES AND OT HER ENTRIES HAVE NO DATES. EVEN WHERE THE DATES ARE MENTIONED, S OME OF THEM RELATE TO FINANCIAL YEAR 2007-08 I.E. ASSESSME NT YEAR 2008-29. THEREFORE, THE LD. CIT(A) HAS NO BASIS TO PRESUME THAT THE ASSESSEE HAS RECEIVED THE AMOUNT IN PARTIC ULAR YEAR. DURING THE COURSE OF SEARCH, A SURRENDER WAS ALSO MA DE IN LOOSE PAPERS. THE SURRENDER IS AT RS. 1,18,39,000/- . PAGE 97 OF LPS A-1 MENTIONED THE EXPECTED OUT FLOW AT RS. 3,31,61,500/-. THE ASSESSEE HAS ALSO RETURNED THE B OOKING ADVANCE. THUS, THE NET EXPENSES IS AT RS. 2,80,11,5 00/-. M/S.LILASON INFRASTRUCTURE PVT. LTD. VS. ACIT,1(2), BHOPAL I.T.(SS)A.NOS. 277 -278/IND/2014 I.T.A.NO. 676, 699 /IND/2014 A.YS. 2009-10, 2010-11 & 2011-12 37 37 THUS, THE RECEIPT IS REDUCED FROM GROSS EXPENSES RE SULTING TO NET EXCESS EXPENSES AT RS. 1,48,30,500/-. DURING TH E COURSE OF HEARING, THE LD. AUTHORIZED REPRESENTATIVE FOR T HE ASSESSEE SUBMITTED THAT THE CREDIT IN THE NAME OF MAMTA CHHA JED OF RS. 25 LAKHS ON 31.03.2009, THEREAFTER ON 31.3.2010, WHE N THE CREDIT TURNED OUT TO RS. 33 LAKHS, THEN THE AMOUNT WAS TAKEN AT RS. 20,96,978/- ON 31 ST MARCH, 2011. THEREFORE, THE PEAK AMOUNT IS CONSIDERED WHILE MAKING THE ADDITION, WHICH IS RS. 33 LAKHS. THUS, CONSIDERING THE TOTAL RECEIPT AT RS . 60 LAKHS IN THE NAME OF MAMTA CHHAJED, A RELIEF OF RS. 27 LAKHS WAS GIVEN WHILE COMPUTING THE TOTAL EXPENSES. THUS, THE TOTAL EXPENSES OF RS. 3,31,61,500/- SHALL BE REDUCED BY BOOKING AD VANCE RETURNED TO RS. 51,50,000/- AND THEREAFTER BY ROTAT ION OF ENTRY IN THE NAME OF VIMAL CHHAJED/MAMTA CHHAJED AT RS. 2 7 LAKHS BEING AMOUNT OVER AND ABOVE THE PEAK. THE BALANCE A MOUNT OF RS. 2,53,11,500/- SHALL BE NETTED WITH NET RECEIPT. THUS, OUT OF THE BALANCE AMOUNT OF RS. 1,21,30,500/-, THE ASS ESSEE SURRENDERED THE AMOUNT OF RS. 1,18,39,000/- DURING THE COURSE OF SEARCH. THEREFORE, RS. 2,91,500/- IS TO BE ADDED TO THE INCOME OF THE ASSESSEE. M/S.LILASON INFRASTRUCTURE PVT. LTD. VS. ACIT,1(2), BHOPAL I.T.(SS)A.NOS. 277 -278/IND/2014 I.T.A.NO. 676, 699 /IND/2014 A.YS. 2009-10, 2010-11 & 2011-12 38 38 21. IN THE RESULT, DEPARTMENTAL APPEAL IS DISMISSED AND ASSESSEES APPEAL IS PARTLY ALLOWED. A.Y. 2011-12 : GROUND NO.3 OF ASSESSEE : ERRED IN FURTHER ENHANCI NG INCOME BY RS. 8,00,000/- 22. WHILE DECIDING THE APPEAL, LD CIT(A) ENHANCED INCOM E BY RS. 8,00,000/- IN RESPECT OF KVPS WHICH WERE REPO RTED IN THE PASS BOOK FOUND DURING THE COURSE OF SEARCH. TH E PASS BOOKS WERE IN THE NAME OF DIFFERENT PERSONS WHO WERE NOT FAMILY MEMBERS. TOTAL 8 PASS BOOKS WERE FOUND SHOWIN G A DEPOSIT OF RS. 1,00,000/- EACH. THEREFORE, VIDE THI S OFFICE LETTER DATED 13.08.2014, THE APPELLANT WAS GIVEN AN OPPORTU NITY TO EXPLAIN AS TO WHY THE ADDITION OF RS. 8,00,000/- ON ACCOUNT OF UNEXPLAINED DEPOSITS MADE IN THE ACCOUNTS OF THE AB OVE PERSONS SHOULD NOT BE MADE IN THE HANDS OF THE ASSE SSEE COMPANY FOR A.Y. 2011-12. 23. IN RESPONSE, THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ORIGINAL AMOUNT OF KVP INVESTED M/S.LILASON INFRASTRUCTURE PVT. LTD. VS. ACIT,1(2), BHOPAL I.T.(SS)A.NOS. 277 -278/IND/2014 I.T.A.NO. 676, 699 /IND/2014 A.YS. 2009-10, 2010-11 & 2011-12 39 39 EARLIER WAS RS. 50,000/- WHICH BY ADDING INTEREST, MA TURED FOR RS. 1,00,000/- AFTER EIGHT YEARS FOR EIGHT PERSONS AND THE PROCEEDS ARE CREDITED IN BANK. THEREAFTER, THESE PE RSONS HAVE WITHDRAWN THE MONEY FROM BANKS AND DEPOSITED THE SAME WITH SHRI ARUN KUMAR LILA. THIS IS INCLUDED IN THE T OTAL CASH FOUND DURING THE COURSE OF SEARCH. SHRI ARUN KUMAR LILA, TO PURCHASE THE PEACE OF MIND, HAS SURRENDERED THIS RS . 8,00,000/- AS IT IS INCLUDED IN THE CASH FOUND DURI NG THE COURSE OF SEARCH. NECESSARY EXPLANATION IN THIS REG ARD WAS SUBMITTED TO THE AO, WHO AFTER SATISFYING, ACCEPTED THE INCOME SURRENDERED BY THE ASSESSEE. 24. THE MATTER CARRIED TO THE LD. CIT(A) AND THE LD. CI T(A) HAS DIRECTED THE AO TO MAKE FURTHER ADDITION OF RS. 8,00,000/- BY OBSERVING AS UNDER :- 3.14 I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE APPELLANT, BUT IT WAS NOT FOUND ACCEPTABLE. THE CONTENTION OF THE APPELLANT WAS THAT THE AMOUNT OF RS. 8,00,000/- HAD BEEN SURRENDERED BY SHRI ARUN LILA, THE DIRECTOR OF THE APPELLANT COMPANY, IN HIS RETURN OF INCOME FOR A.Y. 2011-12 AND, THEREFORE, N O M/S.LILASON INFRASTRUCTURE PVT. LTD. VS. ACIT,1(2), BHOPAL I.T.(SS)A.NOS. 277 -278/IND/2014 I.T.A.NO. 676, 699 /IND/2014 A.YS. 2009-10, 2010-11 & 2011-12 40 40 SEPARATE ADDITION WAS REQUIRED TO BE MADE IN THE HANDS OF THE APPELLANT COMPANY. BUT, IT WAS FOUND THAT SHRI ARUN LILA HAD DISCLOSED TOTAL AMOUNT OF R S. 4,30,55,119/- IN DIFFERENT ASSESSMENT YEARS, AS UNDER :- A.Y. PARTICULARS AMOUNT (RS.) AMOUNT (RS.) 2005-06 LIC POLICIES 93071 2006-07 LIC POLICIES 113341 2007-08 LIC POLICIES 443290 2008-09 LIC POLICIES & EXPENSES 947428 2009-10 LIC POLICIES & EXPENSES 1035181 2010-11 LIC POLICIES 1728928 2011-12 (I) CASH FOUND AT BEDROOM OF ARUN LILA/MONIKA LILA 1260280 (II) CASH FOUND AT BEDROOM OF RAKESH LILA 8649000 (III) CASH FOUND AT BEDROOM OF CHAMPA DEVI LILA 902600 M/S.LILASON INFRASTRUCTURE PVT. LTD. VS. ACIT,1(2), BHOPAL I.T.(SS)A.NOS. 277 -278/IND/2014 I.T.A.NO. 676, 699 /IND/2014 A.YS. 2009-10, 2010-11 & 2011-12 41 41 (IV) CASH FOUND LOCKER NO. 2 114 IOB, HAMIDIA ROAD, BHOPAL 16000000 (V) LOOSE PAPER FOUND FROM E- 4/131, ARERA COLONY, BHOPAL. 11839000 (VI) LIC IN THE NAME OF DHARMENDRA KUMAR LILA OF KOTAL LIFE INSURANCE PAID ON 19.05.2010 43,000 39693880 TOTAL 43055119 FROM THE ABOVE, IT CAN BE SEEN THAT SHRI ARUN KUMAR LILA HAD NOT DISCLOSED ANY AMOUNT OF INCOME ON ACCOUNT OF UNEXPLAINED DEPOSITS OF RS. 8,00,000/- IN THE ABOVE PAAS BOOKS. IT MAY ALSO BE RELEVANT TO REPRODUCE THE RELEVANT PORTION OF STATEMENT OF SHRI ARUN KUMAR LILA, DIRECTOR OF THE APPELLANT COMPANY, RECORDED U/S. 132(4) OF THE ACT DURING THE COURSE OF SEARCH & SEIZURE OPERATION ON 28.10.2010, AS UNDER: - 8 - F DEPARTMENT OF POSTS - -2 G ) ' ANNEXURE A -2 ANNEXURE A -9 8 ) . ' ENTRIES M/S.LILASON INFRASTRUCTURE PVT. LTD. VS. ACIT,1(2), BHOPAL I.T.(SS)A.NOS. 277 -278/IND/2014 I.T.A.NO. 676, 699 /IND/2014 A.YS. 2009-10, 2010-11 & 2011-12 42 42 - ' J . . G E ) COMPANY ) 7 IN VIEW OF THE ABOVE, CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE CONSIDERED VIEW THAT THE AMOUNT OF RS. 8,00,000/- DEPOSITED IN THE ABOVE PASSBOOKS REPRESENTS INCOME OF THE APPELLANT COMPANY FROM UNDISCLOSED SOURCES FOR A.Y. 2011-12. THEREFORE, THE A.O. IS DIRECTED TO MAKE FURTHER ADDITION OF RS. 8,00,000/- IN THE HANDS OF THE APPELLANT COMPANY FOR A.Y. 2011-12. 25. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE PASSBOOKS WERE FOUND DURING THE COURSE OF SEARCH FROM THE PREMISES OF THE ASSESSEE. THESE PAS S-BOOKS RELATE TO DIFFERENT PERSONS NOT RELATED TO THE ASSE SSEE. THE PASS BOOKS CONTAIN DEPOSIT OF RS. 1,00,000/- EACH TOTALL ING TO RS. 8,00,000/- IN ALL THE PASS BOOKS. IT IS SUBMITTED T HAT THE AMOUNTS WERE WITHDRAWN FROM THE POST OFFICE ON 21.09. 2010. IT WAS ARGUED THAT AT THE TIME OF SEARCH, CASH OF RS . 1,08,11,880/- WAS FOUND AT THE RESIDENCE OF ARUN LIL A WHO SURRENDERED THE SAME. THIS CASH INCLUDES WITHDRAWAL O F RS. 8,00,000/- FROM THE POST OFFICE MENTIONED IN THESE PASS BOOKS. M/S.LILASON INFRASTRUCTURE PVT. LTD. VS. ACIT,1(2), BHOPAL I.T.(SS)A.NOS. 277 -278/IND/2014 I.T.A.NO. 676, 699 /IND/2014 A.YS. 2009-10, 2010-11 & 2011-12 43 43 LD CIT(A) CONFIRMED THE ADDITION MERELY ON THE BASI S OF STATEMENT OF THE ASSESSEE THAT THE SAME WOULD BE OFF ERED IN THE HANDS OF THE COMPANY. BUT, IT IS SUBMITTED THAT ON VERIFICATION OF THE FACTS, IT WAS NOTICED THAT CASH BALANCE HAS ALREADY BEEN OFFERED CONSISTING OF THIS RS. 8 LACS ALSO AND ANY FURTHER ADDITION WOULD AMOUNT TO DOUBLE ADDITION. 26. IT IS FURTHER SUBMITTED THAT FROM THE PERUSAL OF TH E PASS BOOK, IT WILL BE CLEAR THAT AS TO WHEN THE AMOU NT WAS DEPOSITED/WITHDRAWN. THE AMOUNT WAS WITHDRAWN ON 21.09.2010 BEING THE MATURITY PROCEEDS OF THE KVPS DEPOSITED IN EARLIER YEARS. THE AMOUNT WAS WITHDRAWN IN CASH BE FORE THE DATE OF SEARCH VIDE MULTIPLE WITHDRAWAL ENTRIES. THI S WAS A PART OF THE CASH BALANCE FOUND AT THE TIME OF SEARC H OF RS. 1,08,11,880/-. THE DEPARTMENT HAS NOT BROUGHT ANY E VIDENCE TO ESTABLISH THAT THE CASH WAS DEPOSITED OR EXPENDE D SOMEWHERE ELSE. IT IS CLEAR THAT THE AMOUNT WAS SURRE NDERED BY ARUN LILA IN THE HANDS OF COMPANY, YET THE CASH WAS OFFERED IN THE HANDS OF ARUN LILA IN THE FORM OF CA SH OF RS. 1,08,11,880/-, WHICH SURRENDER HAS BEEN ACCEPTED BY THE DEPARTMENT. MAKING ADDITION IN THE HANDS OF COMPANY WOULD M/S.LILASON INFRASTRUCTURE PVT. LTD. VS. ACIT,1(2), BHOPAL I.T.(SS)A.NOS. 277 -278/IND/2014 I.T.A.NO. 676, 699 /IND/2014 A.YS. 2009-10, 2010-11 & 2011-12 44 44 AMOUNT TO DOUBLE ADDITION. IT IS A SETTLED LAW THAT THE ADMISSION DURING SEARCH IS IMPORTANT BUT IT IS NOT CONCLUSIVE AND THE ASSESSEE CAN SHOW THAT THE ADDITION IS NOT C ALLED FOR AT A LATER STAGE. THUS, IT IS PRAYED THAT THE ADDIT ION OF RS. 8,00,000/- MAY KINDLY BE DELETED. 27. LD. DEPARTMENTAL REPRESENTATIVE IN CONTRA JUSTIFIE D THE ORDER OF LD CIT(A). HE SUBMITTED THAT THE PASS BOOK WAS FOUND FROM THE PREMISES OF THE ASSESSEE. THESE PASS BOOK ENTRIES WERE OWNED BY ASSESSEE HIMSELF AND IT WAS ACC EPTED THAT THE AMOUNT WOULD BE SURRENDERED IN THE RETURN. SAME WAS NOT SURRENDERED IN THE RETURN. IT IS CLEAR FROM THE PASS BOOK THAT THE AMOUNT WAS WITHDRAWN BEFORE THE DATE OF SEARCH, BUT NO EVIDENCE WAS BROUGHT ON RECORD TO EST ABLISH THAT THE AMOUNT WAS SAME, WHICH WAS FOUND FROM THE PREMISES OF SHRI ARUN LILA. SINCE THE ASSESSEE WAS U NABLE TO JUSTIFY THAT THE AMOUNT WITHDRAWN WAS THE SAME AS FOUN D DURING SEARCH, ADDITION DESERVES TO BE CONFIRMED. 28. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. WE FIND THAT THE SURRENDER WAS NOT MADE IN THE RETURN FOR THESE DEPOSITS. WE FIND THAT THE LD. CIT (A) FAILED TO M/S.LILASON INFRASTRUCTURE PVT. LTD. VS. ACIT,1(2), BHOPAL I.T.(SS)A.NOS. 277 -278/IND/2014 I.T.A.NO. 676, 699 /IND/2014 A.YS. 2009-10, 2010-11 & 2011-12 45 45 APPRECIATE THAT THE CASH FOUND DURING THE COURSE OF SEARCH INCLUDED THE AMOUNT OF WITHDRAWN FROM THE KVPS. WE AL SO FIND THAT THE PASS BOOKS ENTRIES ARE ALREADY ON REC ORD, WHICH CLEARLY INDICATE THE DEPOSITS/WITHDRAWAL. THIS WOULD AMOUNT TO DOUBLE ADDITION SINCE CASH OF RS. 8,00,000/- IS ALREADY INCLUDED IN SURRENDER AMOUNT OF RS. 1,08,11,880/- B Y SHRI ARUN LILA. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, NO ADDITION IS CALLED. THEREFORE, THIS GROUND OF ASSESSEE IS ALLOWED. 29. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED AND DEPARTMENTAL APPEAL IS DISMISSED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 30 TH JUNE, 2016. SD/- (B.C.MEENA) ACCOUNTANT MEMBER SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 30TH JUNE, 2016. CPU*