The DCIT, Central Circle-1, RAJKOT-GUJARAT V. Shri Hitesh Mansukhlal Bagdai, RAJKOT-GUJARAT

ITSSA 3/RJT/2013

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 3386 (ITAT-RAJKOT)
• Duration Of Justice: 7 year(s) 22 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 28-02-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 05-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M N MAURYA
• Keywords: Capital asset; Income from undisclosed sources; Loose papers; Document seized; Cost of acquisition; Fair market value; Accommodation entries; Documents seized; Set aside
• Section: 48; 13; 22; 132

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI WASEEM AHMED , ACCOUNTANT MEMBER AND MS MADHUMITA ROY, JUDICIAL MEMBER SR. NO. IT (SS) A/C.O. NO. ASSTT. YEAR NAME OF APPELLANT NAME OF RESPONDENT 1 . 03/RJT /201 3 2008 - 0 9 DCIT, CIRCLE - 1 , RAJKOT SHRI HITESH MANUSUKHLAL BAGDAI, 1 ST FLOOR, MARUTI SHOPPING CENTRE, RAJKOT. PAN: ACNPB1978P 2 - 3 . 04/RJT /201 3 WITH C.O. NO.05/RJT /201 3 2009 - 1 0 DCIT, CIRCLE - 1 , RAJKOT SHRI HITESH MANUSUKHLAL BAGDAI, 1 ST FLOOR, MARUTI SHOPPING CENTRE, RAJKOT. PAN: ACNPB1978P 4 - 5 . 30 / RJT /201 3 WITH C.O. NO.06/RJT/2013 2010 - 1 1 DCIT, CIRCLE - 1 , RAJKOT SHRI HITESH MANUSUKHLAL BAGDAI, 1 ST FLOOR, MARUTI SHOPPING CENTRE, RAJKOT. PAN: ACNPB1978P ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI M.N. MAURYA , CIT. D.R / RESPONDENT BY : SHRI VIMAL DESAI, A.R / DATE OF HEARING 25 /02 /20 20 / DATE OF PRONOUNCEMENT 28 / 0 2 /20 20 / O R D E R PER BENCH : THE ABOVE APPEALS AND CO S HAVE BEEN FILED BY THE REVENUE AND THE ASSESSEE AGAINST THE ORDERS OF THE L D. COMMISSIONER OF INCOME - TAX (APPEALS) - IV INVOLVING RESPECTIVE ASSESSMENT Y EARS. SINCE ISSUE S INVOLVE IN ALL THESE APPEALS ARE 2 IT(SS)A NO.3/RJT/2013 A.Y.2008 - 09 AND OTHER IDENTICAL, WE PROCEED TO DISPOSE OF ALL THE APPEALS BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY 2. FIRST WE TAKE IT(SS)A NO.03/RJT/2013. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE LD.CIT9A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.4,52,39,000/ - MADE ON ACCOUNT OF DIFFERENTIAL LONG TERM CAPITAL GAIN ON SALE OF LAND. IN THE PROCESS, THE LD.CIT(A) FAILED TO APPRECIATE THAT AS PER SATAKHATS SEIZED AT THE TIME OF SEARCH ACTION, THE SALE PRICE OF LAND IS RS.4.65 CRORES. THEREAFTER, THE ASSESSEE CLAIMED TO HAVE SOLD SAID LAND TO A FAMILY CONCERN FOR A PITY CONSIDERATION OF RS.12.61 LAKHS I.E AT THE RATE OF RS.100/ - PER SQ. METER WHICH IS HIGHLY IMPROBABLE. ON THE FACTS AND IN THE CIRCU MSTANCES OF THE CASE THE LD.CIT( A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER ON THE ABOVE POINTS. T HE 1 ST ISSUE RAISED BY THE R EVENUE IS THAT THE LEARNED CIT - A ERRED IN DELETING THE ADDITION MADE BY THE AO FOR 4,52,39,000.00 ON ACCOUNT OF LONG TERM CAPITAL GAIN. 3. THE FACTS OF CASE ARE THAT ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUAL AND ENGAGED THE BUSINESS OF OWING AND RUNNING A PETROL PUMP IN THE NAME A ND STYLE OF HITRAJ PETROLEUM. ASSESSEE IS ALSO ENGAGED IN THE BUSINESS OF TRADING IN FURNACE OIL AND LDO IN THE NAME AND STYLE OF HITRAJ TRADERS. THERE WAS A SEARCH CARRIED OUT AT THE PREMISES OF THE ASSESSEE DATED 15/09/ 2009. DURING THE COURSE OF SEARCH C ERTAIN DOCUMENTS WERE UNEARTHED MARKED AS ANNEXURE - BS - 10. ON THE BASIS OF THESE DOCUMENTS CERTAIN FACTS EMERGED FOR THE SALE OF THE LAND SITUATED AT MOTA MAVA SURVEY NO. 38, RAJKOT DISTRICT ON SATAKHAT BASIS AS SUMMARISED UNDER: ANNEXURE BS - 10 PAGE NO. 36 TO 39 33 TO 35 27 TO 32 SATAKHAT MADE BETWEEN SHRI HITESH M BAGDAI (SELLER) & RAJAT FINANCE PUBLIC LTD. (PURCHASER) CANCELLATION OF SATAKHAT SHRI HITESH M BAGDAI (SELLER) & RAJAT FINANCE PUBLIC LTD. (PURCHASER) HITRAJ DEVELOPERS PVT. LTD. DIRECTOR HITESH M BAGDAI (SELLER) & RAJAT FINANCE PUBLIC LTD. DIRECTOR PUNAMBEN H BAGDAI (PURCHASER) LAND SIZE 12.609.08 SQ. 12.609.08 SQ. 12,672.57 SQ. 3 IT(SS)A NO.3/RJT/2013 A.Y.2008 - 09 AND OTHER MTRS MTRS MTRS. AMOUNT (RS.) 4,65,00,000 4,65,00,000 4,65,00,000 ADVANCE RECEIVED RS.2,65,00,000 BY CHEQUE NO. 383175 DATED 12/04/2007 RS.2,65,00,000 RETURNED BY CHEQUE NO.041014 DATED 22/04/2007 RS.14,00,000 BY CHEQUE NO.491654 DATED 06/05/2008 DATE OF SATAKHAT 04/12/2007 22/04/2008 05/06/2008 3.1 HOWEVER THE ASSE SSEE CLAIMED TO HAVE SOLD SUCH LAND TO M/S HITRAJ DEVELOPERS PVT. LTD. F OR RS. 12.61 LACS ONLY DATED 27/03/ 2008 AND THUS THE ASSESSEE HAS DECL ARED LONG TERM CAPITAL GAIN OF RS. 2,90,418 / - ONLY. 3.2 THE ASSESSEE ALSO CLAIMED THAT THE TRANSACTIONS WITH RAJATH FINANCE LTD . ARE NOT REAL TRANSACTIONS BUT ACCOMMODATION ENTRIES FOR AVAILING THE FUNDS FROM THE COMPANY. ACCORDINGLY THE ASSESSEE CLAIMED NOT TO MAKE ANY REFERENCE SUCH SATAKHAT FOUND DURING THE COURSE OF SEARCH . 3.3 THE ASSESSEE ALSO CLAIMED TH A T HE HAS PURCHASED IMPUGNED LAND AT RS. 8.15 LAKHS THE ASSESSMENT YEAR 2004 - 0 5 AND IT IS IMPOSSIBLE TO SALE THE SAME LAND IN A PERIOD OF 4 YEARS AT THE VALUE OF RS. 4.65 CRORES. 3.4 HOWEVER, THE AO WAS NOT SATISFIED WITH THE CONTENTION OF THE ASSESSEE BY OBSERVING THAT THE ASSESSEE HA S ENTERED INTO AN AGREEMENT ON TWO OCCASIO NS FOR THE SALE OF THE LAND AT RS. 4.65 CRORES. THE ASSESSEE HAS ALSO RECEIVED THE P ART CONSIDERATION AMOUNTING TO RS. 2.65 CRORES WHICH WAS UTILIZED BY HIM FOR CERTAIN PERIOD OF TIM E. ACCORDINGLY, THE ASSESSEE TO ESCAPE FROM THE TAX LIABILITY HAS SHOWN THE SALE OF THE LAND AT RS. 12.61 CRORES TO HITRAJ DEVELOPERS PVT. LTD. IN WHICH HE WAS THE DIRECTOR. FINALLY, SAID LAND WAS TRANSFERRED TO M/S RAJAT FINANCE PUBLIC LIMITED BY HITRAJ D EV ELOPERS PVT. LTD. AT RS. 4.65 CRORES. ACCORDINGLY THE AO WAS OF THE VIEW THAT THE ASSESSEE TO AVOID THE PAYMENT OF TAX HAS USED THE COLOURABLE DEVICE WHICH IS PROHIBITED BY THE JUDG MENT OF THE HO N BLE SUPREME COURT IN THE 4 IT(SS)A NO.3/RJT/2013 A.Y.2008 - 09 AND OTHER CASE OF MCDOWELL & CO LTD VERSUS CIT REPORTED IN 154 ITR 148. THUS THE AO HAS DETERMINED THE LONG - TERM CAPITAL GAIN IN THE MANNER AS GIVEN UNDER: IN THE LIGHT OF THE ABOVE, DISCUSSION, IT IS HELD THAT THE VALUE OF LAND ACCRUING TO THE ASSESSEE ON ITS TRANSFER WAS NOT RS.12.61 LACS BUT R S.4.65 CRORES, WHICH IS THE SUM ACCRUABLE TO THE ASSESSEE OUT OF THE SAID TRANSACTION AND CAPITAL GAIN ON THE SAME IS COMPUTED ACCORDINGLY. PENALTY PROCEEDINGS U/S.271 (1)(C) OF THE ACT IS INITIATED FOR CONCEALMENT OF INCOME. THE CAPITAL GAIN IS ACCORDINGLY REWORKED OUT AS UNDER: SALE PRICE OF THE LAND RS.4,65,00,000/ - ( - ) INDEXED COST OF ACQUISITION RS.9,70,582/ - CAPITAL GAIN RS.4,55,29,418/ - ( - ) CAPITAL GAIN DECLARED BY THE ASSESSEE RS.2,90,418/ - ADDITION ON ACCOUNT OF LONG TERM CAPITAL GAIN RS.4,52,39,000/ - A GGRIEVED ASSESSEE PREFERRED AN APPEAL TO THE LEARNED CIT (A) 4. T HE ASSESSEE BEFORE THE LEARNED CIT (A) SUBMITTED THAT THE CONSI DERATION RECEIVED BY HIM IS OF RS. 12.61 LAKHS AS PER THIS AGREEMENT WHICH HAS TO BE TAKEN AS FULL VALUE OF CONSIDERATION FOR COMPUTING THE CAPITAL GAIN AS PROVIDED UNDER SECTION 48 OF THE ACT. THE ASSESSEE REITERATED THE SUBMISSIONS AS MADE BEFORE THE LEARNED CIT (A). 4.1 THE LEARNED CIT (A) AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE OBSERVED THAT THE PROVISIONS OF SECTION 48 OF THE ACT REQUIRES TO TAKE THE SALE CONSIDERATION AS THE VALUE OF THE CONSIDERATION AND NOT AS THE FAIR MARKET VALUE WHI CH IS PROVIDED UNDER SECTION 50 C OF THE AC T. THE PROVISIONS OF SECTION 50 C OF THE ACT MANDATES TO ADOPT THE STAMP VALUE AS THE FULL VALUE OF THE CONSIDERATION. AS SUCH IN THE PRESENT CASE THE STAMP VALUE HAS BEEN TREATED AS THE FULL VALUE OF THE CONSIDERATION UNDER SECTION 48 OF THE ACT. 4.2 THE LEARNED CIT (A) A LSO FOUND THAT THE DVO ON REFERENCE BY THE AO HAS DETER MINED THE VALUE OF THE LAND AS RS. 13.87 LACS ONLY AS ON 22 APRIL 2008. 5 IT(SS)A NO.3/RJT/2013 A.Y.2008 - 09 AND OTHER 4.3 MOREOVER, THERE IS NO INFORMATION AVAILABLE ON RECORD SUGGESTING THAT THE ASSESSEE HAS RECEIVE D CONSIDERATION OVER AND ABOVE RS. 12.61 LAKHS. IN VIEW OF THE ABOVE THE LEARNED CIT (A) DELETED THE ADDITION MADE BY THE AO AND ALLOW ED THE GROUND OF APPEAL OF THE ASSESSEE. BEING AGGRIEVED BY THE ORDER OF THE LEARNED CIT (A) THE REVENUE IS IN APPEAL BEFORE US. 5. THE LEARNED DR BEFORE US REITERATED THE FINDINGS CONTAINED IN THE ORDER OF THE AO. ON THE OTHER HAND THE LEARNED AR FOR THE ASSESSEE BEFORE US REITERATED THE FINDING OF THE LEARNED CIT (A). BOTH THE LEARNED DR AND THE AR BEFORE US VEHEMENTLY SUPPORTED THE ORDER OF THE AUTHORITIES BELOW AS FAVOURABLE TO THEM. 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD BEFORE US. THE ISSUE BEFORE US RELATES WHETHER THE ASSESSEE HAS SOLD THE LAND IN DISPUTE TO M/S HITRAJ DEVELOPERS PVT. LTD. AT 4.65 CRORES OR 12.61 LAKHS AS DISCLOSED IN THE REGISTERED DOCUMENT. THE BASIS ADOPTED BY THE AO FOR TREATING THE SALE CONSIDERATION AT 4.65 CRORES WAS THE SANAKHAT FOUND DURING THE COURSE OF SEARCH UNDER SECTION 132 OF THE ACT. ADMITTEDLY, THESE SANAKHAT HAVE NOT BEEN DISPUTED BY THE ASSESSEE. HOWEVER, THE ASSESSEE CLAIMED THAT SUCH SANAKHAT WERE MADE FOR THE ACCOMMODATION ENTRIES PURPOSES. THE AMOUNT RECEIVED BY THE ASSESSEE FOR RS. 2.65 CRORES WAS RETURNED BACK THROUGH THE BANKING CHANNEL. 6. 1 THERE IS NO PROVISION UNDER THE ACT TO SUBSTITUTE THE FULL VALUE OF THE CONSIDERATION WITH THE FAIR MARKET VALUE. THE PROVISIONS OF SECTION 48 OF THE ACT MANDATES TO TAKE THE ACTUAL AMOUNT OF CONSIDERATION RECEIVED BY THE ASSESSEE 6 IT(SS)A NO.3/RJT/2013 A.Y.2008 - 09 AND OTHER AGAINST THE TRANSFER OF THE CAPITAL ASSETS. THE PROVISIONS OF SECTION 48 OF THE ACT DOES NOT REFER TO TAKE THE FAIR MARKET VALUE AS THE SALE CONSIDERATION. 6.2 WE ALSO NOTE THAT THE ENTIRE T H RUST OF THE AO FOR MAKING THE ADDITION WAS BASED ON SANAKHAT FOUND DURING THE COURSE OF S EARCH . BUT THE AO HAS NOT BROUGHT ANYTHING ON RECORD FOR ANY MOVEMENT OF THE FUND RECEIVED BY THE ASSESSEE OVER AND ABOVE THE VALUE DECLARED IN THE REGISTER ED DOCUME NTS. REGARDING THE RECEIPT OF MONEY OF 2.65 CRORES FROM RAJAT FINANCE PRIVATE LTD, WE FIND THAT SUCH MONEY WAS RETURNED BACK BY THE ASSESSEE IN THE SUBSEQUENT YEAR AND THIS FACT WAS NOT DOUBTED BY THE AUTHORITIES BELOW. ACCORDINGLY, THE RECEIPT OF SUCH MO NEY CANNOT BE TREATED AS CONSIDERATION RECEIVED BY THE ASSESSEE AGAINST THE TRANSFER OF THE LAND. 6.3 EVEN THE VALUE DETERMINED BY THE DVO SU GGEST THE FAIR MARKET VALUE AT RS. 13.87 LACS ONLY. THUS WE ARE OF THE VIEW THAT THE VALUE AS ADOPTED BY THE AO FO R RS. 4.65 CRORES TREATING THE SALE CONSIDERATION IS NOT SUSTAINABLE. 6.3 IN VIEW OF THE ABOVE, WE HOLD THAT THE IMPUGNED TRANSACTION CANNOT BE TREATED AS COLOURABLE DEVICE ADOPTED BY THE ASSESSEE TO ESCAPE FROM THE INCOME TAX LIABILITY. ACCORDINGLY WE AR E OF THE OPINION THAT THE PRINCIPLES LAID DOWN IN THE CASE OF MCDOWELLS (SUPRA) CANNOT BE APPLIED IN THE CASE ON HAND. IN VIEW OF THE ABOVE, THE GROUND OF APPEAL OF THE REVENUE IS DISMISSED. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. 7. NOW COMING TO THE IT(SS)A NO .04/RJT/2013 FOR A.Y. 2009 - 10. ( APPEAL BY THE REVENUE ) THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE LD.CIT9A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.2.10 CRORE MADE BEING THE INCOME ADMITTED DURING THE SEARCH ACTION. 7 IT(SS)A NO.3/RJT/2013 A.Y.2008 - 09 AND OTHER 1.1 IN THE PROCESS, THE LD.CIT9A) FAILED TO TAKE COGNIZANCE OF THE FACT THAT INCOME OF RS.2.10 CRORE WAS ADMITTED IN THE STATEMENT RECORDED ON OATH AT THE TIME OF SEARCH ACTION AND ASSESEE HAS FAIL ED TO SUBMIT PLAUSIBLE EXPLANATION OF OTHER EVIDENCES, DISCOVERED AT THE TIME OF SEARCH ACTION. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER ON THE ABOVE POINT. COMING TO THE CO 5/RJT/ 2013 F OR A.Y. 2009 - 10 (IN ITA NO.04/RJ T/2013) . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE CIT( A) HAS ERRED IN LAW AS WELL AS ON FACTS IN HOLDING ON THE BASIS OF PAGE 75 OF ANNEXURE - B10 AND IN DISREGARDED OF EVIDENCE COLLECTED FROM M/S.J.Y. RESOURCES PRIVATE LIMITED BY THE SEARCH TEAM THAT THE ASSESSEE HAD RECEIVED THE CASH OF RS.2.00 CR. 2. IN CASE IF THE AMOUNT OF RS.2.10 CR. DECLARED IN STATEMENT RECORDED U/S.132(4) DURING THE COURSE OF SEARCH IS HELD TO BE INCOME OF THE ASSESSEE, ADDITIONAL INCOME OFFERED BY THE ASSESSEE IN EARLIER YEARS SHOULD BE ALLOWED TO BE SET OFF AGAINST THE SAME. 8. T HE ONLY ISSUE RAISED BY THE REVEN UE IS THAT THE LEARNED CIT (A) ER R ED IN DELETING T HE ADDITION MADE BY THE AO FOR R S. 2.10 CRORES ADMITTED DU RING THE SEARCH PROCEEDINGS. 9. THE ASSESSEE IN ITS STATEMENT UNDER SECTION 132( 4 ) DURING THE SEARCH PROCEEDINGS HAS MADE THE DISCLO SURE OF UNACCOUNTED INCOME FOR RS. 2.50 CRORES WHICH WAS BIFURCATED INTO DIFFER ENT ASSESSMENT YEARS. A SUM OF RS. 2.10 CROR ES PERTAINED TO THE YEAR UNDER CONSIDERATION I.E. ASSESSMENT YEAR 2009 - 10 AND THE BALANCE AMOUNT OF 40 LAK HS FOR THE ASSESSMENT YEAR 2010 - 11. HOWEVER THE ASSESSEE RETRACTED FROM THE DISCLOSURE MADE DURING SEARCH PROCEEDINGS BY FILING AN AFFIDAVI T DATED 8 OCTOBER 2009 BY LETTER DATED 27 OCTOBER 2009. THE ASSESSEE CLAIMED THA T THE DISCLOSURE WAS MADE ON AD HOC BASIS AND WITHOUT HAVING ANY CORROBORATIVE MATERIAL FOR SUCH ADDITION. 9.1 HOWEVER, THE AO FOUND THAT THERE WAS A SEIZED DOCUMENT AT PAGE NO. 75 OF ANNEXURE - BS - 10, DULY SIGNED BY THE ASSESSEE DATED 26 JUNE 2008, EVIDENCIN G THE RECEIPT OF CASH OF RS. 2 CRORES FROM M/S J.Y. RESOURCES PVT. LTD. AS SUCH THE ASSESSEE HAS ISSUED TWO CHEQUES BEARING NO. 703971 AND 703972 DATED 26 JUNE 8 IT(SS)A NO.3/RJT/2013 A.Y.2008 - 09 AND OTHER 2008 AS SHAREHOLDER DEPO SITS TO THE COMPANY M/S J.Y. RESOURCES PVT. LTD. AND RECEIVED CASH OF RS. 2 CRORES FROM THE COMPANY. AS SUCH THE ASSESSEE BASED ON THIS DOCUMENTARY EVIDENCE MADE AN ADHOC DISCLOSURE OF RS. 2.50 CRORES IN THE MANNER AS DISCUSSED ABOVE. IN VIEW OF THE A BOVE TH E AO TREATED THE SUM OF RS. 2.10 CRORES AS INCOME FOR THE YEAR UN DER CONSIDERATION AND A SUM OF RS. 40 LAKHS FO R THE ASSESSMENT YEAR YEAR 2010 - 11 AS DISCLOSED IN THE STATEM ENT FURNISHED UNDER SECTION 132( 4 ) OF THE ACT AND ADDED THE SAME TO THE TOTAL INCOME O F THE ASSESSEE. AGGRIEVED ASSESSEE PREFERRED AN APPEAL TO THE LEARNED CIT (A) 10. T HE ASSESSEE BEFORE THE LEARNED CIT (A) SUBMITTED THAT THE SEARCH WAS CONDUCTED ON 15 SEPTEMBER 2009 WHICH WAS CONTINUED FOR 39 HOURS. BUT THE ASSESSEE WAS NOT FOUND TO BE THE OWNER OF ANY UNACCOUNTED MONEY, BULLION, JEWELLERY OR ANY OTHER VALUABLE ARTICLE. IN FACT S EARCH TEAM PRESSURIZED TO M AKE THE DISCLOSURE FOR RS. 10 CRORES. AS SUCH THE ASSESSEE UNDER THE TREM ENDOUS PRESSURE ADMITTED UNDISCLOSED INCOME OF RS.2.50 CRORES ON ADHOC BASIS IN THE STATEM ENT FURNISHED UNDER SECTION 132( 4 ) OF THE ACT. BUT THE SAME WAS IMMEDIATELY RETRACTED WITHIN A PERIOD OF 41 DAYS ONLY BEFORE THE CONCLUSION OF THE SEARCH PROCEEDINGS. 10.1 THE ASSESSEE ALSO CLAIMED THAT THE AD HOC DISCLOSURE MADE DURING S EARCH PROCEEDINGS WAS NOT BASED ON ANY INCRIMINATING DOCUMENT. 10.2 REGARDING THE SEIZED DOCUMENT V IDE PAGE NO. 75, THE ASSESSEE SUBMITTED THAT HE HAS NOT RECEIVED ANY CASH. HAD HE RECEIVED ANY CASH, THEN THE RECEIPT SHOULD HAVE BEEN WITH THE COMPANY NAMELY M/S J.Y. RESOURCES PVT. LTD.. THEREFORE HE HAS NOT RECEIVED ANY CASH AGAINST THE SHARE DEPOSITS OF RS. 2 CRORES GIVEN BY HIM AS DISCUSSED ABOVE. 10.3 THE ASSESSEE ALSO CLAIMED THAT THERE WAS A SURVEY PROCEEDINGS ON THE PREMISES OF M/S J.Y. RESOURCES PVT. LTD. DATED 16 TH OF SEPTEMBER 2009 BUT THERE 9 IT(SS)A NO.3/RJT/2013 A.Y.2008 - 09 AND OTHER WAS NO DOCUMENTARY EVIDENCE FOUND SUGGESTING THAT THE ASSESSEE HAS RECEIVED ANY CASH FROM THE COMPANY. MOREOVER THE DIRECTORS OF M/S J.Y. RESOURCES PVT. LTD. HAVE DENIED TO HAVE PAID ANY CASH TO THE ASSESSEE AS ALLEGED BY THE AO. 10.4 THE ASSESSEE ALSO CLAIMED THAT HE HAS RECEIVED INTEREST ON THE DEPOSITS MADE WITH M/S J.Y. RESOURCES PVT. LTD. WHICH WAS OFFERED TO TAX. THUS, THE IMPUG NED TRANSACTION EVIDENCES THAT THE AMOUNT HAS BEEN DEPOSITED BY THE ASSESSEE AND THE SAME HAS NOT COME BACK TO HIM. 10.5 THE ASSESSEE WITHOUT PREJUDICE TO THE ABOVE ALSO SUBMITTED THAT EVEN IF IT IS BELIEVED THAT HE HAS RECEIVED THE CASH OF RS. 2 CRORES THEN THE SAME CANNOT BE ASSUMED /TREATED AS INCOME. IT IS BECAUSE IT IS THE SAME MONEY WHICH WAS ADVANCED BY HIM HAS COME BACK TO HIM IN THE YEAR UNDER CONSIDERATION. AS SUCH, THE TRANSACTION OF RETURNING THE CASH DOES NOT PARTAKE THE CHARACTER OF THE INCO ME IN THE GIVEN FACTS AND CIRCUMSTANCES. 11. THE LEARNED CIT (A) AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE HELD THAT THE ASSESSEE HAS RECEIVED A SUM RS. 2 CRORES IN CASH FROM M/S J.Y. RESOURCES PVT. LTD. TH E VIEW OF THE LEARNED CIT (A) WAS BASED ON THE FACT THAT THE ASS ESSEE HAS GIVEN A SUM OF RS. 2 CRORES THROUGH BANKING CHANNEL TO M/S J.Y. RESOURCES PVT. LTD. AND THIS FACT IS VERY MUCH AVAILABLE ON RECORD. ACCORDINGLY THE LEARNED CIT (A) PRESUMED THE CONTENTS OF THE RECEIPT FOUND DURING THE COURS E OF S EARCH IS CORRECT. 11.1 THE LEARNED CIT (A) FURTHER OBSERVED THAT THE RECEIPT IN THE PRESENT CASE CAN NOT BE TREATED AS INCOME OF THE ASSESSEE. IT IS BECAUSE THE RECEIPT WAS AGAINST THE MONEY PROVIDED BY THE ASSESSEE TO THE COMPANY M/S J.Y. RESOURCES PVT. LTD. WHICH IS UNDISPUTED FACT. 11.2 THE LEARNED CIT (A) ALSO OBSERVED THAT THE A D D ITIONS OF RS. 2.50 CRORES FOR BOTH THE YEARS WAS BASED MERELY ON THE STATEM ENT FURNISHED UNDER SECTION 132( 4 ) 10 IT(SS)A NO.3/RJT/2013 A.Y.2008 - 09 AND OTHER OF THE ACT WITHOUT THE SUPPORT OF ANY CORROBORATIVE EVIDE NCE. ACCORDINGLY THE LEARNED CIT (A) CONCLUDED THAT THE ADDITION CANNOT BE MADE MERELY ON THE BASIS OF THE STATEMENT. THUS THE LEARNED CIT (A) DELETED THE ADDITION MADE BY THE AO FOR THE BOTH THE ASSESSMENT YEARS BY OBSERVING AS UNDER: 7.9 CONSIDERING TH E ENTIRE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE CONSIDERED OPINION THAT THE ADDITION THAT VESTS ONLY ON THE BASIS OF STATEMENT WITHOUT CORROBORATIVE MATERIAL CANNOT BE JUSTIFIED. THEREFORE, THE ADDITION MADE BY THE ASSESSING OFFICER OF RS.2.10 CR ORES AND RS.40LAKHS FOR AY 2009 - 10 AND AY 2010 - 11 RESPECTIVELY IS HEREBY DELETED. 7.10 SO FAR AS ALTERNATIVE CONTENTION OF THE APPELLANT REQUESTING FOR SET OFF ADDITIONAL INCOME OF RS.40.15 LAKHS OFFERED IN THE RETURNS FILED IN RESPONSE TO NOTICE U/S.153 A OF THE ACT ON THE CONCEPT OF TELESCOPING TO AVOID DOUBLE TAXATION IS CONCERNED, SINCE THE ADDITION BY WAY OF DISCLOSURE HAS ALREADY BEEN DELETED THIS ALTERNATIVE GROUND OF APPEAL DOES NOT SURVIVE. B EING AGGRIEVED BY THE ORDER OF THE LEARNED CIT (A) THE REVENUE IS IN APPEAL BEFORE US. 12. BOTH THE LEARNED DR AND THE AR BEFORE US REITERATED THE FINDINGS CONTAINED IN THE ORDER OF THE RESPECTIVE AUTHORITIES BELOW AS FAVORABLE TO THEM. 13. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD BEFORE US. THE 1 ST ISSUE IN THE PRESENT CASE RELATES WHETHER THE AMOUNT MENTION IN THE SEIZED DOCUMENTS REPRESENTS THE INCOME OF THE ASSESSEE AS ALLEGED BY THE AO. 13.1 ADMITTEDLY, THE RECEIPT/ SEIZED DOCUMENT WAS FOUND FROM THE PREMISE OF THE ASSESSEE AND AS PER THE PROVISIONS OF SECTION 292C OF THE ACT IT IS PRESUMED THAT SUCH DOCUMENTS BELONG TO THE ASSESSEE. BUT THE PRESUMPTION UNDER SECTION 292C OF THE ACT, IS THE REBUTTABLE PRESUMPTION. IN THIS REGARD WE DRAW GUIDANCE AND SUPPORT FROM THE ORDER OF THE HON BLE DELHI HIGH COURT ORDER IN THE CASE OF PCIT VS. DELCO INDIA (P) LTD. REPORTED IN 67 TAXMANN.COM 357 RELEVANT EXTRACT OF ORDER ARE AS UNDER: 11 IT(SS)A NO.3/RJT/2013 A.Y.2008 - 09 AND OTHER SECTION 292C, INTER ALIA , PROVIDES THAT WHERE ANY BOOKS OF ACCO UNT OR OTHER DOCUMENTS ARE FOUND IN POSSESSION OR CONTROL OF ANY PERSON IN THE COURSE OF SEARCH UNDER SECTION 132 OR SURVEY UNDER SECTION 133A, IT MAY BE PRESUMED THAT SUCH BOOKS OR DOCUMENTS BELONG TO SUCH PERSON. UNDISPUTEDLY, SUCH PRESUMPTION IS REBUTTA BLE. 13.2 INDEED, THE RECEIPT OF CASH WAS FOUND FROM THE POSSESSION OF THE ASSESSEE BUT THE QUESTION ARISES WHETHER SUCH RECEIPT REPRESENT THE INCOME OF THE ASSESSEE. THE ANSWER IS NO IN THE GIVEN FACTS AND CIRCUMSTANCES. IT IS BECAUSE THERE WAS NO CORROB ORATIVE EVIDENCE FOUND DURING THE COURSE OF SEARCH ABOUT THE RECEIPT OF SUCH AMOUNT FROM THE PARTY. MOREOVER, THE ASSESSING OFFICER ALSO VERIFIED THE SAME FACT FROM THE PARTY WHICH DENIED TO HAVE RETURN ANY MONEY TO THE ASSESSEE. 13.3 WE ALSO FIND THAT I F THE ASSESSEE HAS RECEIVED THE MONEY FROM THE PARTY THEN THE SAME SHOULD HAVE BEEN IN THE POS SESSION OF THE PARTY. BUT THERE WAS NO SUCH DOCUMENT BROUGHT ON RECORD. FURTHERMORE, THE ASSESSEE ON THE LOAN ADVANCED TO THE PARTY HAS SHOWN INTEREST INCOME WHIC H HAS BEEN ACCEPTED BY THE REVENUE. 13.4 THE LEARNED AR AT THE TIME OF HEARING ALSO CLAIMED THAT THE ASSESSEE HAS RECEIVED MONEY BACK FROM THE PARTY IN THE SUBSEQUENT YEAR WHICH WAS ADJUSTED AGAINST THE SHAREHOLDER DEPOSITS AND THE SAME WAS ALSO ACCEPTED BY THE REVENUE. 13.5 WE ALSO NOTE THAT THE INFORMATION CONTAINED IN THE SEIZED DOCUMENTS ARE JUST THE INFORMATION WITHOUT ANY SUPPORT AND THEREFORE NO CREDENTIALS CAN BE GIVEN TO SUCH INFORMATION UNTIL AND UNLESS IT IS BASED ON SOME MATERIALS. AS SUCH, SEIZED LOOSE DOCUMENTS FOUND DURING THE SEARCH SHOULD BE READ IN ASSOCIATION WITH THE OTHER MATERIALS BEFORE REACHING TO THE CONCLUSION THAT SUCH SEIZED MATERIAL REPRESENT THE INCOME OF THE ASSESSEE. WE ALSO NOTE THAT IN THE CASE OF CBI V. V.C. SHUKLA 1998 TAXMANN.COM 2155 (SC) , THE HON BLE APEX COURT HAS OBSERVED THAT LOOSE SHEETS HAVE BEEN RULED OUT AS OF ANY EVIDENTIARY VALUE. LOOSE SHEETS CANNOT BE ACCOUNTS BOOKS OF A PARTY. EVEN IF IT IS TAKEN AS AN INFORMAL ACCOUNTING IT IS NOT THE RECORD OF THE ASSESSEE. EVEN ASSUMING SUCH ENTRIES AS CORRECT AND AUTHENTIC 12 IT(SS)A NO.3/RJT/2013 A.Y.2008 - 09 AND OTHER THEY CANNOT WITHOUT INDEPENDENT EVIDENCE FIX A LIABILITY UPON A PERSON. IN THAT CONNECTION THE COURT ALSO REFERRE D TO SECTION 9 OF THE EVIDENCE ACT AND OBSERVED THAT EVEN IF SUCH ENTRIES ARE ADMISSIBLE UNDER THE SAID PROVISIONS TO SUPPORT AN INFERENCE ABOUT CORRECTNESS OF THE ENTRIES STILL SUCH ENTRIES WOULD NOT SUFFICE WITHOUT SUPPORTIVE INDEPENDENT EVIDENCE. THEY H AVE NO PROBATIVE VALUE IN THE ABSENCE OF SOME CORROBORATIVE PRIMARY EVIDENCE OF THE REALITY OF SUCH TRANSACTION SHOWN IN THE NOTING IN SUCH LOOSE SHEETS OF PAPER. EVEN ENTRIES IN THE BOOKS OF ACCOUNT NEED CORROBORATION BEFORE ACTING AGAINST THE THIRD PARTY ON THE BASIS OF ANY ENTRY IN THE BOOKS OF ACCOUNT OF A PERSON. 13.6 WE ALSO NOTE THAT THE LOSE PAPER FOUND DURING THE COURSE OF SEARCH DID HOLD EVIDENTIARY VALUE UNLESS THE SAME IS SUPPORTED BY COGENT MATERIAL . I N THIS REGARD WE FIND GUIDANCE AND SUPPORT FROM ORDER OF THE HON BLE SUPREME COURT IN THE CASE OF COMMON CAUSE (A REGISTERED SOCIETY) VS UNION OF INDIA REPORTED IN 394 ITR 220 THE RELEVANT EXTRACT OF ORDER ARE AS UNDER: 16. WITH RESPECT TO THE KIND OF MATERIALS WHICH HAVE BEEN PLACED ON RECORD, T HIS COURT IN V.C. SHUKLA'S CASE ( SUPRA ) HAS DEALT WITH THE MATTER THOUGH AT THE STAGE OF DISCHARGE WHEN INVESTIGATION HAD BEEN COMPLETED BUT SAME IS RELEVANT FOR THE PURPOSE OF DECISION OF THIS CASE ALSO. THIS COURT HAS CONSIDERED THE ENTRIES IN JAIN HAWAL A DIARIES, NOTE BOOKS AND FILE CONTAINING LOOSE SHEETS OF PAPERS NOT IN THE FORM OF 'BOOKS OF ACCOUNT' AND HAS HELD THAT SUCH ENTRIES IN LOOSE PAPERS/SHEETS ARE IRRELEVANT AND NOT ADMISSIBLE UNDER SECTION 34 OF THE EVIDENCE ACT, AND THAT ONLY WHERE THE ENT RIES ARE IN THE BOOKS OF ACCOUNT REGULARLY KEPT, DEPENDING ON THE NATURE OF OCCUPATION, THAT THOSE ARE ADMISSIBLE. 17. IT HAS FURTHER BEEN LAID DOWN IN V.C. SHUKLA ( SUPRA ) AS TO THE VALUE OF ENTRIES IN THE BOOKS OF ACCOUNT, THAT SUCH STATEMENT SHALL NOT A LONE BE SUFFICIENT EVIDENCE TO CHARGE ANY PERSON WITH LIABILITY, EVEN IF THEY ARE RELEVANT AND ADMISSIBLE, AND THAT THEY ARE ONLY CORROBORATIVE EVIDENCE. IT HAS BEEN HELD EVEN THEN INDEPENDENT EVIDENCE IS NECESSARY AS TO TRUSTWORTHINESS OF THOSE ENTRIES WH ICH IS A REQUIREMENT TO FASTEN THE LIABILITY IN VIEW OF THE ABOVE, WE HOLD THAT THE DOCUMENTS SEIZED DURING THE SEARCH PROCEEDINGS IS NOTHING BUT REPRESENTING THE DUMB DOCUMENTS AND THEREFORE NO ADDITIONS BASED ON THE SAME CAN BE MADE IN THE HANDS OF THE ASSESSEE. ACCORDINGLY. WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF THE LD. CIT - A AND DIRECT THE AO TO DELETE THE ADDITION MADE BY HIM. HENCE THE GROUND OF APPEAL 13 IT(SS)A NO.3/RJT/2013 A.Y.2008 - 09 AND OTHER OF THE REVENUE IS DISMISSED AND THE GROUND RAISED BY THE ASSESSEE IN THE CO IS ALLO WED. 13.7 THE OTHER GROUNDS RAISED BY THE ASSESSEE IN THE CO DOES NOT SURVIVE AS THE MAIN GROUND HAS BEEN DECIDED BY US IN HIS FAVOUR. HENCE WE DISMISS THE SAME. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS DISMISSED AND THE CO FILED BY THE ASSESSEE IS PARTLY ALLOWED. 14. COMING TO THE ITA NO. 30/RJ T/2013, AN APPEAL BY THE REVENUE. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEALS. 1. THE LD.CIT9A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.40 LAKH S MADE BEING THE INCOME ADMITTED DURING THE SEARCH ACTION. 1.1 IN THE PROCESS, THE LD.CIT(A) FAILED TO TAKE COGNIZANCE OF THE FACT THAT INCOME OF RS.40.00 LAKHS WAS ADMITTED IN THE STATEMENT RECORDED ON OATH AT THE TIME OF SEARCH ACTION AND ASSESSEE HAS FAILED TO SUBMIT PLAUSIBLE EXPLANATION OF OTHER EVIDENCES DISCOVERED AT THE TIME OF SEARCH ACTION. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) UGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER ON THE ABOVE POINT. 15. THE ONLY ISSUE RAISED BY THE REVENUE IS THAT THE LEARNED CIT (A) ERRED IN DELETING THE ADDITION MADE BY THE AO FOR RS.40 LACS ADMITTED DURING THE SEARCH PROCEEDINGS. 16. AT THE OUTSET WE NOTE THAT THE IDENTICAL ISSUE RAISED BY THE REVENUE IN THE SIMILAR C ASE OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2009 - 10 HAS BEEN DECIDED BY US IN FAVOUR OF THE ASSESSEE AND AGAINST REVENUE IN ITA NO. 04/ RJT/2013 VIDE PARAGRAPH NUMBER13 OF THIS ORDER. FOR THE DETAILED DISCUSSION, PLEASE REFER THE RELEVANT PARAGRAPH. RESPEC TFULLY FOLLOWING THE SAME, WE ARE NOT CONVINCED WITH THE FINDING OF THE AUTHORITIES BELOW. ACCORDINGLY WE SET ASIDE THE FINDING OF THE LEARNED CIT (A) AND DIRECT THE AO TO DELETE THE ADDITION MADE BY HIM. HENCE THE GROUND OF APPEAL OF THE REVENUE IS DISM ISSED. 14 IT(SS)A NO.3/RJT/2013 A.Y.2008 - 09 AND OTHER 17. C OMIN G TO THE CO NO. 06/RJT/2013( IN ITA NO.30/RJT/2013). THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL. 1. THE CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN HOLDING ON THE BASIS OF PAGE 75 OF ANNEXURE - B10 AND IN DISREGARD OF EVIDENCE COL LECTED FROM M/S.J.Y. RESOUORCES PRIVATE LIMITED BY THE SEARCH TEAM THAT THE ASSESSEE HAD RECEIVED THE CASH OF RS.2.00 CR. 2. IN CASE IF THE AMOUNT OF RS.0.40CT. DECLARED IN STATEMENT RECORDED U/S.132(4) DURING THE COURSE OF SEARCH IS HELD TO BE INCOME OF THE ASSESSEE, ADDITIONAL INCOME OFFERED BY THE ASSESSEE IN EARLIER YEARS BE ALLOWED TO BE SET OFF AGAINST THE SAME. 18 . AT THE OUTSET WE NOTE THAT THE IDENTICAL ISSUE RAISED BY THE ASSESSEE IN THE OWN CASE OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2009 - 10 HAS BEEN DECIDED BY US IN FAVOUR OF THE ASSESSEE IN C.O. NO.05/RJT/2014 (IN ITA NO. 04/R JT/2013) VIDE PARAGRAPH NUMBER 13 OF THIS ORDER. FOR THE DETAILED DISCUSSION, PLEASE REFER THE RELEVANT PARAGRAPH. RESPECTFULLY FOLLOWING THE SAME, THE CROSS OBJECTION FIL ED BY THE ASSESSEE IS ALLOWED. 19. IN THE COMBINED RESULTS, ALL THE APPEALS OF THE REVENUE ARE DISMISSED AND CROSS OBJECTIONS FILED BY THE ASSESSEE ARE PARTLY ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 2 8 / 02 /20 20 - S D - - S D - (MADHUMITA ROY ) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER RAJKOT, DATED 2 8 /02 /20 20 MANISH