Shri Ashok V. Barot L/H of late Vijaysinh I. Barot, Mehsana V. The Dy.CIT., Cent.Circle-1(3), Ahmedabad

ITSSA 298/AHD/2011

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 2163 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 3 month(s) 20 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 12-07-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 07-07-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 23-03-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R I PATEL
• Assessee Lawyers: S N DIVATIA
• Keywords: Search and seizure; Question of law
• Section: 143(3); 142(1); 133A; 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH (BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER) IT(SS)A. NOS: 293 TO 299/AHD/2011 (ASSESSMENT YEARS: 2001-02 TO 2007-08) SHRI VIJAYSINH ISHWARLAL BAROT, AT: VILLAGE : KOCHAVA, NR. SHANKU WATER PARK, JAGUDAN, TAL. MEHSANA V/S THE D.C.I.T., CENTRAL CIRCLE 1(3), AHMEDABAD (APPELLANT) (RESPONDENT) PAN: ABAPB7847H APPELLANT BY : SHRI S.N. DIVATIA, A.R. RESPONDENT BY : SHRI R.I. PATEL, CIT/DR ( )/ ORDER DATE OF HEARING : 07-07-2016 DATE OF PRONOUNCEMENT : 12 -07-2016 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. THE ABOVE CAPTIONED APPEALS ARE BY THE ASSESSEE PRE FERRED AGAINST THE ORDER OF THE LD. CIT)(A)-I, AHMEDABAD DATED 28. 01.2011 PERTAINING TO A.Y. 2001-02 TO 2007-08. IT(SS)A NOS. 293 TO 299/AHD/2011 . A.YS. 2001-0 2 TO 2007-08 2 2. APPEALS FOR A.Y. 2001-02 & 2002-03 HAVE COMMON ISSU ES AND APPEALS OF A.Y. 2003-04 TO 2007-08 HAVE IDENTICAL ISSUES, T HEREFORE, ALL THESE APPEALS WERE HEARD TOGETHER AND ARE DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. IN IT(SS)A NO. 293 & 294/AHD/2011 PERTAINING TO A. Y. 2001- 02 AND 2002-03. 3. THE ASSESSEE HAS CHALLENGED THE VALIDITY OF THE ASS ESSMENT MADE U/S. 153A OF THE ACT R.W.S. 143(3). AS THE FACTS IN ISS UES INVOLVED ARE IDENTICAL FOR BOTH THESE YEARS, WE HEARD THE LD. CO UNSEL ON THE FACTS OF A.Y. 2001-02. 4. RIVAL SUBMISSIONS WERE HEARD AT LENGTH. BRIEFLY STA TED THE FACTS OF THE CASE ARE THAT A SEARCH AND SEIZURE OPERATION WAS CO NDUCTED AT THE RESIDENTIAL PREMISES OF THE ASSESSEE AT VILLAGE KOC HAVA, TAL. MEHSANA ON 01.11.2006. ACCORDINGLY, PROCEEDINGS U/S. 153A W AS INITIATED AND STATUTORY NOTICES U/S. 143(2) AND 142(1) OF THE ACT WERE ISSUED AND SERVED UPON THE ASSESSEE. 5. WHILE SCRUTINIZING THE RETURN OF INCOME, THE A.O. N OTICED THAT THE ASSESSEE HAS SHOWN PENSION INCOME, INCOME FROM SALE OF MILK, TUBE WELL, PASUPALAN AND INTEREST INCOME. ON PERUSAL OF THE INCOME AND EXPENDITURE ACCOUNT, THE A.O FOUND THAT THE ASSESSE E HAS SHOWN PASUPALAN INCOME OF RS. 95,785/- AGAINST WHICH HE H AS CLAIMED EXPENSES OF RS. 1,76,185/-. THE A.O. WAS OF THE OP INION THAT THE EXPENDITURE CLAIMED BY THE ASSESSEE IS VERY HIGH IN COMPARISON TO THE INCOME. IT(SS)A NOS. 293 TO 299/AHD/2011 . A.YS. 2001-0 2 TO 2007-08 3 6. THE A.O. ISSUED A SHOW CAUSE NOTICE ASKING THE ASSE SSEE AS TO WHY PROPORTIONATE EXPENSES SHOULD NOT BE DISALLOWED. TH E ASSESSEE FILED A DETAILED REPLY STATING THAT PASUPALAN INCOME ALSO I NCLUDES MILK SALE INCOME. IT WAS BROUGHT TO THE NOTICE OF THE A.O. TH AT THE ASSESSEE HAS SHOWN MILK SALE OF RS. 1,93,638/- AND PASUPALAN INC OME AT RS. 95,785/- TOTALING TO RS. 2,89,413/- AGAINST WHICH T HE TOTAL EXPENDITURE WAS RS. 1,76,185/-. THE ASSESSEE FURTHER STATED THA T THE EXPENDITURE IS VERY REASONABLE IN COMPARISON TO THE TOTAL INCOM E. THE A.O. FOUND THAT MOST OF THE EXPENDITURES CLAIMED BY THE ASSESS EE ARE NOT SUPPORTED BY ANY DOCUMENTARY EVIDENCES. THE A.O. FU RTHER NOTICED THAT THE ASSESSEE HAS ALSO INCURRED CERTAIN OTHER E XPENDITURE UNDER THE HEAD TRAVELLING EXPENSES, ELECTRICITY EXPENSES, SALARY EXPENSES AND PASUPALAN EXPENSES AND THE TOTAL OF SUCH EXPEND ITURE ALONG WITH OTHER EXPENDITURE COMES TO RS. 3,38,502/-. THE A.O. WAS OF THE FIRM BELIEF THAT THE ASSESSEE HAS CREATED LOSS UNDER THI S HEAD FOR SETTING OFF INCOME UNDER OTHER HEADS. THE A.O. ACCORDINGLY DISA LLOWED THE EXCESS EXPENDITURE CLAIMED BY THE ASSESSEE OVER AND ABOVE HIS INCOME THEREBY DENYING THE LOSSES CLAIMED BY THE ASSESSEE. 7. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) A ND IN ADDITION TO CHALLENGING THE DISALLOWANCES MADE BY THE A.O. ALSO CHALLENGED THE VALIDITY OF THE ASSESSMENT MADE U/S. 153A OF THE AC T. HOWEVER, THE FIRST APPELLATE AUTHORITY DID NOT ACCEPT THE CONTEN TIONS MADE BY THE ASSESSEE AND CONFIRMED THE ASSESSMENT. 8. AGGRIEVED BY THIS, THE ASSESSEE IS BEFORE US. THE L D. COUNSEL FOR THE ASSESSEE VEHEMENTLY STATED THAT THE LOWER AUTHORITI ES GROSSLY ERRED IN MAKING THE ASSESSMENT U/S. 153A OF THE ACT WITHOUT ANY INCRIMINATING MATERIAL FOUND AT THE TIME OF SEARCH FOR THE IMPUGN ED ASSESSMENT IT(SS)A NOS. 293 TO 299/AHD/2011 . A.YS. 2001-0 2 TO 2007-08 4 YEARS. THE LD. D.R. FAIRLY CONCEDED THAT THE ASSESS MENT IS NOT BASED ON ANY INCRIMINATING MATERIAL FOUND AT THE TIME OF SEARCH. 9. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORD ERS OF THE AUTHORITIES BELOW. IN OUR CONSIDERED OPINION, IF NO INCRIMINATING MATERIAL IS FOUND THEN THE ASSESSMENT MADE U/S. 153 A MADE WITHOUT ANY REFERENCE TO ANY INCRIMINATING MATERIAL IS BAD IN LAW. OUR VIEW IS FORTIFIED BY THE DECISION OF THE HONBLE BOMBAY HIG H COURT IN THE CASE OF CONTINENTAL WAREHOUSING CORPORATION 374 ITR 645 WHICH READS AS UNDER:- ONCE IT IS HELD THAT THE ASSESSMENT HAS ATTAINED FINALITY, THEN THE AO WHILE PASSING THE INDEPENDENT ASSESSMENT ORDER U/S. 153A R.W. S 143(3) OF THE IT. ACT COULD NOT HAVE DISTURBED THE ASSESSMENT/REASSESSMENT ORDER WHICH HAS ATTAINED FI NALITY, UNLESS THE MATERIALS GATHERED IN THE COURSE OF THE PROCEEDINGS U/S. 153A OF THE INCOME TAX ACT ESTABLISH THAT THE RELIEFS GRANTED U NDER THE FINALIZED ASSESSMENT/REASSESSMENT WERE CONTRARY TO THE FACTS UNEARTHED DURING THE COURSE OF 153A PROCEEDINGS. IF THERE IS NOTHING ON RECORD TO SUGGEST THAT ANY MATERIAL WAS UNEARTHED DURING THE SEARCH OR DURING THE 153A PROCEEDINGS, THE AO WHILE PASSING ORDER U/ S. 153A R.W.S. 143(3) CANNOT DISTURB THE ASSESSMENT ORDER.' 10.2. THE HON'BLE HIGH COURT HAD AN OCCASION TO CONSIDER THE FOLLOWING QUESTIONS OF LAW: '1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE HON'BLE ITAT IS CORRECT IN NARROWING DOWN THE SCOPE OF ASSESSMENT U/S. 153A IN RESPECT OF COMPLETED ASSESSMENTS BY HO LDING THAT ONLY UNDISCLOSED INCOME AND UNDISCLOSED ASSETS DETECTED DURING SEARCH COULD BE BROUGHT TO TAX? 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE HON'BLE ITAT IS CORRECT IN LAW IN HOLDING THAT THE SCOPE OF SEC. 153A IS LIMITED TO ASSESSING ONLY SEARCH RELATED INCOME, TH EREBY DENYING IT(SS)A NOS. 293 TO 299/AHD/2011 . A.YS. 2001-0 2 TO 2007-08 5 REVENUE THE OPPORTUNITY OF TAXING OTHER ESCAPED INC OME, THAT COMES TO THE NOTICE OF THE AO.? 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE HON'BLE ITAT WAS RIGHT IN LIMITING THE SCOPE OF SEC . 153A ONLY TO UNDISCLOSED INCOME WHEN AS PER THE SECTION THE AO H AS TO ASSESS THE TOTAL INCOME OF THE SIX ASSESSMENT YEARS?'- AND THE HONBLE HIGH COURT OF BOMBAY FINALLY HELD A S UNDER:- WE, THEREFORE, DISMISS THE REVENUES APPEAL AND AN SWER THE SUBSTANTIAL QUESTION OF LAW AGAINST THE REVENUE AND IN FAVOUR OF ASSESSEE. 10. OUR VIEW ALSO FIND SUPPORT FROM THE DECISION OF THE HONBLE HIGH COURT OF DELHI IN THE CASE OF KABUL CHAWLA 380 ITR 573 WHEREIN THE HONBLE HIGH COURT HAS SUMMARIZED THE LEGAL POSITIO N AS UNDER:- 37. ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT, READ WITH THE PROVISOS THERETO, AND IN THE LIGHT OF THE LAW EXPLA INED IN THE AFOREMENTIONED DECISIONS, THE LEGAL POSITION THAT E MERGES IS AS UNDER: I. ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF T HE ACT, NOTICE UNDER SECTION 153 A(L) WILL HAVE TO BE MANDATORILY ISSUED TO THE PERSON SEARCHED REQUIRING HIM TO FILE RETURNS FOR SIX AYS IMMEDIATELY PRECEDING THE PREVIOUS YEAR RELEVANT TO THE AY IN W HICH THE SEARCH TAKES PLACE. II. ASSESSMENTS AND REASSESSMENTS PENDING ON THE DA TE OF THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH AYS WILL HAV E TO BE COMPUTED BY THE AOS AS A FRESH EXERCISE. III. THE AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RESPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT AY IN WHICH THE SEARCH TAKES PLACE. THE AO HAS THE POWER TO ASSESS AND REASSESS THE 'TO TAL INCOME' OF THE AFOREMENTIONED SIX YEARS IN SEPARATE ASSESSMENT ORD ERS FOR EACH OF THE SIX YEARS. IN OTHER WORDS THERE WILL BE ONLY ON E ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX AYS 'IN WHICH BOTH TH E DISCLOSED AND THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX'. IT(SS)A NOS. 293 TO 299/AHD/2011 . A.YS. 2001-0 2 TO 2007-08 6 IV. ALTHOUGH SECTION 153 A DOES NOT SAY THAT ADDITI ONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF THE SEARCH, OR OTHER POST-SEARCH MATERIAL OR INFORMATIO N AVAILABLE WITH THE AO WHICH CAN BE RELATED TO THE EVIDENCE FOUND, IT D OES NOT MEAN THAT THE ASSESSMENT 'CAN BE ARBITRARY OR MADE WITHOUT AN Y RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOUSLY AN ASSESS MENT HAS TO BE MADE UNDER THIS SECTION ONLY ON THE BASIS OF SEIZED MATERIAL.' V. IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE CO MPLETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REAS SESSMENT CAN BE MADE. THE WORD 'ASSESS' IN SECTION 153 A IS RELATAB LE TO ABATED PROCEEDINGS (I.E. THOSE PENDING ON THE DATE OF SEAR CH) AND THE WORD REASSESS' TO COMPLETED ASSESSMENT PROCEEDINGS. VI. INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, T HE JURISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UND ER SECTION 153A MERGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARATELY FOR EACH AY ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER MATERIAL EXISTING OR BROUGHT ON THE RECORD OF THE A O. VII. COMPLETED ASSESSMENTS CAN BE INTERFERED WITH B Y THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153A ONLY ON TH E BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS OR UNDISCLOSED INCOME OR P ROPERTY DISCOVERED IN THE COURSE OF SEARCH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL A SSESSMENT. 11. AS THE DISALLOWANCES/ADDITIONS MADE IN BOTH THESE A SSESSMENTS ARE DEVOID OF ANY INCRIMINATING MATERIAL FOUND AT T HE TIME OF SEARCH. RESPECTFULLY FOLLOWING THE RATIO LAID DOWN BY THE H ONBLE HIGH COURT (SUPRA), WE SET ASIDE THE FINDINGS OF THE LD. CIT(A ) AND QUASHED THE ASSESSMENT YEARS FOR A.Y. 2001-02 & 2002-03. IT(SS) A NOS. 293 & 294/AHD/2011 ARE ACCORDINGLY ALLOWED. IT(SS)A NOS. 293 TO 299/AHD/2011 . A.YS. 2001-0 2 TO 2007-08 7 12. SINCE, WE HAVE QUASHED THE ASSESSMENT ORDERS, WE DO NOT FIND IT NECESSARY TO GO INTO THE MERITS OF THE CASE. IT(SS)A NOS. 295 TO 299/AHD/2011 PERTAINING TO A. YS. 2003- 04 TO 2007-08. 13. THE COMMON GRIEVANCE IN ALL THESE APPEALS ARE TWOFO LD-(I) DISALLOWANCES OF EXPENDITURE AND THEREBY DENYING TH E LOSSES INCURRED BY THE ASSESSEE TOWARDS SALE OF MILK AND PASUPALAN AND (II) ADDITIONS MADE ON ACCOUNT OF RENTAL INCOME ON THE ALLEGED GRO UND THAT THE ASSESSEE HAS EARNED SUCH INCOME BY LETTING OUT HIS PREMISES FOR BAKERY BUSINESS. 14. FACTS RELATING TO THE CLAIM OF EXPENDITURE ON PASUP ALAN ARE IDENTICAL TO THE FACTS DISCUSSED HEREINABOVE IN IT( SS)A NOS. 293 & 294/AHD/2011 FOR A.Y. 2001-02 & 2002-03. IT WOULD BE BETTER TO EXTRACT THE INCOME AND EXPENDITURE CHART IN RESPECT OF PASUPALAN/MILK SALE EXPENDITURE:- ASSESSMENT YEAR INCOME PASHUPALAN MILK SALE TOTAL PASHUPALAN INCOME PASHUPALAN EXPENSE 2001-02 95785 193628 289413 176185 2002-03 4700 152173 179446 2003-04 5800 127340 133140 176602 2004-05 33950 132054 166004 149244 15. THE ONLY REASON GIVEN BY THE A.O. AND ACCEPTED BY T HE LD. CIT(A) IN RESPECT OF THE DISALLOWANCE OF EXPENDITUR E IS THAT THE EXPENDITURES ARE NOT SUPPORTED BY ANY DOCUMENTARY E VIDENCES. A PERUSAL OF THE AFOREMENTIONED CHART SHOWS THAT THER E IS EXCESS OF EXPENDITURE OVER INCOME ONLY IN RESPECT OF ASSESSME NT YEARS 2005-06, IT(SS)A NOS. 293 TO 299/AHD/2011 . A.YS. 2001-0 2 TO 2007-08 8 2006-07 & 2007-08. FURTHER, THE A.O. HAS RESTRICTED THE EXPENDITURE ONLY TO THE EXTENT OF INCOME SHOWN BY THE ASSESSEE FROM PASUPALAN AND MILK SALE. 16. IN OUR CONSIDERED OPINION, ONCE THE A.O. HAS ACCEPT ED THE INCOME FROM PASUPALAN AND MILK SALE, IT CANNOT BE S AID THAT THE ASSESSEE HAS NOT INCURRED ANY EXPENDITURE AND FURTH ER THE EXPENDITURE INCURRED BY THE ASSESSEE HAVE TO BE ONLY TO THE EXT ENT OF INCOME SHOWN. EVEN, OTHERWISE CONSIDERING THE FACTUAL MATR IX AS MENTIONED HEREINABOVE, IN OUR HUMBLE OPINION, IT CANNOT BE SA ID THAT THE EXPENSES ARE EXORBITANT AND INFLATED. 17. THE OTHER ALLEGATION OF THE A.O. IS THAT BY SHOWING EXCESS LOSS, THE ASSESSEE IS SETTING OFF THE LOSSES FROM HIS OTH ER INCOME IS ALSO ILL FOUNDED BECAUSE THE ONLY OTHER INCOME OF THE ASSESS EE IS FROM SALARIES, DIVIDENDS AND INTEREST. INTEREST FROM BAN K IS EXEMPT U/S. 80L OF THE ACT AND INCOME FROM DIVIDENDS IS EXEMPT U/S. 10(34) & 10(35) OF THE ACT. THE ONLY OTHER INCOME IS AGRICULTURAL I NCOME WHICH IS OTHERWISE EXEMPT FROM TAX. 18. CONSIDERING THE TOTALITY OF THE FACTS, IN OUR CONSI DERED OPINION, THE EXPENDITURES CLAIMED BY THE ASSESSEE ARE NOT UN REASONABLE AND DESERVES TO BE ALLOWED. WE, ACCORDINGLY, DIRECT THE A.O. TO ALLOW THE EXPENDITURE CLAIMED BY THE ASSESSEE AS PER HIS COMP UTATION OF INCOME. THIS GRIEVANCE OF THE ASSESSEE IN ALL THE I MPUGNED APPEALS IS ALLOWED. IT(SS)A NOS. 293 TO 299/AHD/2011 . A.YS. 2001-0 2 TO 2007-08 9 19. THE SECOND GRIEVANCE RELATES TO THE ADDITIONS MADE ON ACCOUNT OF THE ALLEGED RENTAL INCOME FROM LETTING OUT OF PR OPERTY FOR BAKERY BUSINESS. 20. FACTS RELATING TO THIS ISSUE ARE THAT A SURVEY ACTI ON U/S. 133A OF THE ACT WAS CARRIED ON AT THE STUD FARM HOUSE OF TH E ASSESSEE. THE SURVEY TEAM FOUND THAT A BAKERY WAS ALSO RUNNING IN ADDITION TO AGRICULTURAL AND PASUPALAN ACTIVITIES. ON ENQUIRIES , THE AUTHORITIES CAME TO KNOW THAT THE BAKERY WAS RUNNING SINCE LAST 10 YEARS. STATEMENT OF ONE SHRI HARSHADBHAI BAROT WAS RECORDE D ON 01.11.2006 WHO ADMITTED THAT THE BAKERY WAS STARTED 10 YEARS B ACK IN THE NAME OF AVIRAJ FROM WHICH NO PROFIT WAS MADE. HE FURTHER STATED THAT SINCE THE LAST 5 YEARS, IT WAS GIVEN ON RENT TO ONE SHRI ANISH AHMED FOR A SUM OF RS. 2500 PER MONTH. THE FACTS MENTIONED IN T HE STATEMENT OF SHRI HARSHADBHAI BAROT WERE CONFIRMED BY SHRI ANISH AHMED IN HIS STATEMENT WHEREIN HE ADMITTED ON PAYING OF RENT OF RS. 2500 PER MONTH. 21. TAKING A LEAF OUT OF THESE TWO STATEMENTS, THE A.O. ASKED THE ASSESSEE TO EXPLAIN WHY RENTAL INCOME SHOULD NOT BE CONSIDERED FOR TAXATION PURPOSE. ASSESSEE STRONGLY OBJECTED TO THI S PROPOSITION OF THE A.O. AND STATED THAT SHRI HARSHADBHAI BAROT MAY BE RECEIVING RENTAL INCOME BUT THE ASSESSEE WAS NOT RECEIVING ANY INCOM E FROM THE SAID BAKERY. IN SUPPORT, THE ASSESSEE FILED THE AFFIDAV IT OF SHRI SHARSHADBHAI BAROT. 22. THE A.O. DID NOT BELIEVE IN THE STORY OF THE ASSESS EE AND PROCEEDED BY MAKING ADDITION OF THE RENTAL INCOME I N THE HANDS OF THE IT(SS)A NOS. 293 TO 299/AHD/2011 . A.YS. 2001-0 2 TO 2007-08 10 ASSESSEE THEREBY MAKING ADDITION OF RS. 30,000/- IN ALL THE IMPUGNED ASSESSMENT YEARS. 23. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) B UT WITHOUT ANY SUCCESS. 24. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE REITERA TED WHAT HAS BEEN STATED BEFORE THE LOWER AUTHORITIES. IT IS THE SAY OF THE LD. COUNSEL THAT ONCE SHRI HARSHADBHAI BAROT HAS FILED AN AFFID AVIT CLAIMING THAT HE WAS RECEIVING THE RENTAL INCOME, THE ADDITIONS IN T HE HANDS OF THE ASSESSEE CANNOT BE SUSTAINED. 25. PER CONTRA, THE LD. D.R. STRONGLY SUPPORTED THE FIN DINGS OF THE A.O. 26. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE S EQUENCE OF EVENTS. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIES BELOW. THE UNDISPUTED FACT IS THAT A BAKERY WAS RUNNING AT STUD FARM HOUSE OF THE ASSESSEE. IT IS ALSO AN UNDISPUTED FACT THAT SI NCE LAST 5 YEARS, THE BAKERY WAS RUN BY ONE SHRI ANIS ANSARI WHO WAS PAYI NG RENT OF RS. 2500 P.M. I.E. RS. 30,000 PER ANNUM TO SHRI HARSHAD BHAI BAROT. WHAT IS NOT UNDERSTANDABLE IS THE AUTHORITY OF SHRI HARS HADBHAI BAROT TAKING RENT FROM SHRI ANIS ANSARI WHEN HE IS NOT THE OWNER OF THE PROPERTY. IN ALL PROBABILITIES SHRI HARSAHDBHAI BAROT MUST BE CO LLECTING RENT FROM SHRI ANIS ANSARI ON BEHALF OF THE ASSESSEE. MUCH EM PHASIS HAS BEEN PLACED ON THE AFFIDAVIT OF SHRI HARSHADBHAI BAROT W HICH IS EXHIBITED AT PAGE 78 & 79 OF THE PAPER BOOK. 27. A PERUSAL OF THE CONTENTS OF THE SAID AFFIDAVIT SHO WS THAT IT IS NOT AN AFFIDAVIT AS PER THE LAW. THERE IS NO VERIFICATI ON SECTION IN THE SAID IT(SS)A NOS. 293 TO 299/AHD/2011 . A.YS. 2001-0 2 TO 2007-08 11 AFFIDAVIT WHICH IS MANDATORY. CLAUSE 4 OF THE SAID AFFIDAVIT IS ALSO AGAINST THE PROVISIONS OF THE LAW. CLAUSE 4 READS A S UNDER :- THAT I AM NOT GIVING ANY AMOUNT TO MR. VIJAYSING B AROT. I FURTHER STATE THAT MR. ANIS ANSARI IS NOT GIVING ANY AMOUNT TO VIJAYSI NH BAROT. 28. WE FAIL TO UNDERSTAND HOW CAN A DEPONENT DEPOSING F ACTS WHICH DO NOT EVEN PERTAIN TO HIM. HOW CAN SHRI HARSHABHAI BAROT IN HIS AFFIDAVIT CAN SAY THAT SHRI ANIS ANSARI IS ALSO NOT GIVING ANY AMOUNT TO SHRI VIJAYSINH BAROT. IN OUR UNDERSTANDING OF THE L AW, THE SAID AFFIDAVIT DOES NOT HAVE ANY LEGAL SANCTITY AND CANNOT BE RELI ED UPON AS A PIECE OF EVIDENCE. EXCEPT FOR THIS, THERE IS NOTHING ON R ECORD WHICH COULD SUPPORT THE CONTENTIONS OF THE ASSESSEE. 29. AS MENTIONED ELSEWHERE, THE STUD FARM BELONGS TO TH E ASSESSEE, THEREFORE, ONLY THE ASSESSEE HAS A RIGHT FOR ANY RE NTAL INCOME FROM THE USAGE OF THE PREMISES AND THERE IS A STRONG PRESUMP TION THAT SHRI HARSHADBHAI BAROT MUST BE COLLECTING RENT ON BEHALF OF THE ASSESSEE. THEREFORE, ON PREPONDERANCE OF PROBABILITIES, WE HO LD THAT THE RENTAL INCOME BELONGS TO THE ASSESSEE AND HAVE BEEN RIGHTL Y TAXED IN HIS HANDS. WE, CONFIRM THE FINDINGS OF THE FIRST APPELL ATE AUTHORITY. THIS GRIEVANCE OF THE ASSESSEE IS DISMISSED. 30. IN THE RESULT, THE IMPUGNED APPEALS ARE PARTLY ALLO WED. ORDER PRONOUNCED IN OPEN COURT ON 12 - 07 - 201 6. SD/- SD/- (RAJPAL YADAV) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: TRUE COPY