Mohd. Atique, Bhopal V. The ACIT 3(1), Bhopal

ITSSA 315/IND/2012

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 8672 (ITAT-INDORE)
• Duration Of Justice: 7 month(s) 4 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 31-01-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 26-06-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R A VERMA; DARSHAN SINGH
• Assessee Lawyers: H P VERMA; SAKSHI VERMA
• Keywords: Unexplained investment; Unexplained expenditure; Gift; Search and seizure; Source of fund; Additional evidence; Cost of acquisition; Fair market value
• Section: 142(1); 133A; 153A; 68; 139

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER IT(SS) A NOS. 310 TO 316/IND/2012 A.YS. 2001-02 TO 2007-08 MOHD. ATIQUE BHOPAL PAN AGWPA 6383N :: APPELLANT VS ACIT 3(1) BHOPAL :: RESPONDENT IT(SS) A NOS. 295 TO 299/IND/2012 A.YS. 2001-02 TO 2004-05 & 2006-07 MOHD. SHAFIQUE BHOPAL PAN ANIPS 2739K :: APPELLANT VS ACIT 3(1) BHOPAL :: RESPONDENT 2 IT(SS) A NOS. 285 TO 287/IND/2012 A.YS. 2002-03 TO 2004-05 ACIT 3(1) BHOPAL :: APPELLANT VS MOHD. YUSUF BHOPAL PAN - AAVPU 4612R :: RESPONDENT ASSESSEES BY SHRI H.P. VERMA AND MISS SAKSHI VERMA RESPONDENT BY SHRI DARSHAN SINGH AND SHRI R.A. VERMA DATE OF HEARING 8.11.2012 DATE OF PRONOUNCEMENT 3 1 .1.201 3 O R D E R PER JOGINDER SINGH, JUDICIAL MEMBER THIS GROUP OF 15 APPEALS IS FILED BY DIFFERENT AS SESSEES AND THE REVENUE CHALLENGING THE RESPECTIVE ORDERS D ATED 21.3.2012, 21.3.2012 AND 27.3.2012 OF THE LEARNED FIRST APPELL ATE AUTHORITY, BHOPAL ON VARIOUS GROUNDS AS CONTAINED IN THE GROUN DS OF APPEAL OF THE RESPECTIVE APPEALS. IN THE CASE OF MOHD. A TIQUE THE ASSESSEE HAS ALSO FILED ADDITIONAL GROUNDS FOR A.YS. 2002-03 TO 2007-08 CHALLENGING THE ORDER PASSED U/S 153C ON THE PLEA T HAT THE ORDER IS 3 ILLEGAL, INVALID AND UNTENABLE IN LAW. IN THE CASE OF MOHD. ATIQUE, FOLLOWING COMMON GROUNDS HAVE BEEN RAISED :- (I) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LEARNED CIT(A) WAS NOT JUSTIFIED IN NOT ACCEPTING T HE DOCUMENTS FILED AS ADDITIONAL EVIDENCE BEFORE HIM. (II) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) WAS NOT JUSTIFIED IN MAKING THE DETE RMINATION OF INCOME AT RS.3,87,640/- AGAINST THE RETURNED INC OME OF RS.1,68,088/-. (III) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LEARNED CIT(A) WAS NOT JUSTIFIED IN NOT ACCEPTING T HE AGRICULTURAL INCOME SHOWN BY THE ASSESSEE AT RS. 6, 86,548/- AND IN TREATING THE SAME AS INCOME FROM OTHER SOURC ES AND CONSEQUENT ADDITION OF THE SAME. (IV) THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) WAS NOT JUSTIFIED IN NOT ALLOWING TH E DEDUCTION U/S 24 AT 30% OF THE HOUSE PROPERTY, RENTAL RECEIPT SHOWN BY THE ASSESSEE AT RS. 33,000/-BY TREATINGTHE SAME AS INCOME FROM OTHER SOURCES AND THUS CONSEQUENT ADDITION. 2. DURING HEARING OF THESE APPEALS, IN THE CASE OF MOHD. ATIQUE, THE ASSESSEE HAS CHALLENGED THE ACTION U/S 153C OF THE ACT. THE LEARNED COUNSEL FOR THE ASSESSEE INVITED OUR ATTENT ION TO THE RECORDED REASONS FOR TAKING ACTION U/S 153C OF THE ACT BY SUBMITTING THAT THE DOCUMENTS WERE IMPOUNDED U/S 13 3A OF THE ACT, THEREFORE, SUCH ACTION IS WITHOUT JURISDICTION . IT WAS PLEADED THAT NO RETURN WAS FILED BY THE ASSESSEE, THEREFORE , NO ASSESSMENT 4 WAS MADE PRIOR TO PROCEEDINGS UNDER CONSIDERATION M EANING THEREBY THAT NO PROCEEDINGS WERE PENDING IN THE CAS E SINCE NO ORIGINAL ASSESSMENT WAS MADE. A PLEA WAS ALSO RAISE D THAT NO ADVERSE MATERIAL WAS FOUND IN SEARCH, CONSEQUENTLY, NO ACTION U/S 153A OF THE ACT COULD BE TAKEN. ON THE OTHER HAND, THE LEARNED CIT DR STRONGLY DEFENDED THE PROCEEDINGS U/S 153C/153A OF THE ACT. RELIANCE WAS PLACED UPON THE DECISION OF THE SPECIA L BENCH IN THE CASE OF ALLCARGO LOGISTICS LIMITED V. DCIT; 20 ITJ 45 (MUM) (SB). OUR ATTENTION WAS INVITED BY THE LEARNED CIT DR TO SECTION 292B OF THE ACT. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD. THE FACTS IN BRIEF A RE THAT THE ASSESSEE WAS HAVING MAIN SOURCE OF INCOME FROM AGRICULTURE. IN ADDITION TO IT, THE ASSESSEE WAS ALSO ENGAGED IN THE BUSINESS O F REAL ESTATE AND TRANSPORTATION BUSINESS. THE ASSESSEE DID NOT FILE RETURN OF INCOME U/S 139 OF THE ACT. A SEARCH AND SEIZURE ACTION U/ S 132(1) OF THE ACT WAS CARRIED OUT IN MOHD. SHAFIQUE GROUP WHEREIN CERTAIN DOCUMENTS AND INFORMATION RELATING TO THE ASSESSEE I.E. MOHD. ATIQUE WERE FOUND. THE ASSESSEE IS THE SON OF SHRI MOHD. SHAFIQUE. THE ASSESSING OFFICER ISSUED NOTICE U/S 153A AFTER RECORDING 5 REASONS IN RESPONSE TO WHICH THE ASSESSEE FILED THE RETURN OF INCOME FOR VARIOUS ASSESSMENT YEARS. THE INCOME RETURNED BY THE ASSESSEE AND ASSESSED BY THE ASSESSING OFFICER IS SUMMARISED AS UNDER :- SL.NO. A.YS. INCOME RETURNED RS. ASSESSED BY AO. 1 2001 - 02 1,68,088 8,87,640 2 2002 - 03 1,72,005 8,05,950 3 2003 - 04 2,48,908 11,07,220 4 2004 - 05 2,06,024 11,66,590 5 2005 - 06 49,67,512 60,70,890 6 2006 - 07 4,47,340 20,12,860 7 2007 - 08 1,46,350 67,64,680 4. GROUND NOS. 2 AND 3 RAISED BY THE ASSESSEE ARE W ITH RESPECT TO AGRICULTURAL INCOME SHOWN BY THE ASSESSEE AND DETER MINATION THEREOF BY THE AUTHORITIES BELOW. THE LEARNED COUN SEL FOR THE ASSESSEE CONTENDED THAT THE ASSESSEE IS HAVING OWN LAND AS WELL AS LAND TAKEN ON LEASE, THEREFORE, THERE IS NO REASON TO DISBELIEVE THE REASONABLENESS OF AGRICULTURAL INCOME WHEREAS THE L EARNED CIT DR DEFENDED THE ORDER OF THE LEARNED CIT(A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT IN RESP ONSE TO NOTICE U/S 6 153A THE ASSESSEE FILED ITS RETURN OF INCOME DISCLO SING AGRICULTURAL INCOME FOR VARIOUS YEARS UNDER CONSIDERATION. THE S TAND OF THE REVENUE IS THAT SINCE THE ASSESSEE FILED THE RETURN SHOWING AGRICULTURAL INCOME FOR VARIOUS YEARS FOR THE FIRST TIME, THEREFORE, IN REAL SENSE THERE IS NO INCOME FROM AGRICULTURE AND THE ASSESSING OFFICER TREATED THE AGRICULTURAL INCOME AS INCOME F ROM OTHER SOURCES ACCORDINGLY ADDITIONS WERE MADE U/S 68 OF T HE ACT. THE RETURNED INCOME AS WELL AS THE ASSESSED INCOME ARE SUMMARISED AS UNDER :- SL.NO. A.Y. AGRI. INCOME ON OWN LAND AGRI. INCOME ON LEASE HOLD LAND AMOUNT OF ADDITION MADE BY TREATING AGRICULTURAL INCOME AS INCOME FROM OTHER SOURCES 1 2001 - 02 2,82,348 4,04,200 6,86,548 2 2002 - 03 3,02,841 4,42,900 7,45,741 3 2003 - 04 3,25,611 4,85,900 8,11,511 4 2004 - 05 3,59,766 5,50,400 9,10,166 5 2005 - 06 4,88,376 5,93,400 10,81,776 6 2006 - 07 8,12,536 7,31,382 15,43,918 7 2007 - 08 7,88,000 7,86,930 15,74,930 6. IF THE TABLE REPRODUCED IN THE IMPUGNED ORDER/ ASSESSMENT ORDER IS ANALYSED, WE FIND THAT THE ASSESSEE HAS SH OWN AGRICULTURAL INCOME, PER ACRE, RANGING FROM RS. 6200/- TO RS. 10 ,000/-, RESPECTIVELY IN THE IMPUGNED ASSESSMENT YEARS FROM AGRICULTURAL 7 LAND (OWNED BY THE ASSESSEE) RANGING FROM 45.54 ACR ES TO 78.80 ACRES AND FROM THE AGRICULTURAL LAND TAKEN ON LEASE THE NET AGRICULTURAL INCOME COMES TO RS. 6,146/- TO RS. 10, 050/- (PER ACRE) AND AFTER GIVING THE LEASE RENTAL AS MENTIONED AT P AGE 4 (TABLE NO. 2 OF THE IMPUGNED ORDER), THE TOTAL AGRICULTURAL INCO ME HAS BEEN SHOWN AT RS. 4,04,200/- TO 7,86,930/- OUT OF LAND O F 87 ACRES TO 93.58 ACRES IN THE RESPECTIVE ASSESSMENT YEARS. THE ASSESSING OFFICER RAISED VARIOUS QUERIES AND SOME PERSONS WER E ASKED TO BE PRODUCED. MOHD. LAEEK WAS PRODUCED FOR VERIFICATIO N WHOSE STATEMENT WAS RECORDED. THE AFFIDAVIT OF MOHD. LAEE K WAS FILED. THE ASSESSING OFFICER DID NOT ACCEPT THE CLAIM OF AGRIC ULTURAL INCOME ON THE GROUNDS WHICH HAVE BEEN MENTIONED IN THE ASSESS MENT ORDER AND ALSO SUMMARISED AT PAGE 6 OF THE IMPUGNED ORDER . IT IS AN UNDISPUTED FACT THAT EVEN AS ADMITTED IN PARA 5.3 ( PAGE 7) OF THE IMPUGNED ORDER THE ASSESSEE FURNISHED THE COPY OF K HASRA BEFORE THE LEARNED CIT(A) IN SUPPORT OF AGRICULTURAL INCOM E. SINCE THIS KHASRA WAS NOT PRODUCED BEFORE THE ASSESSING OFFICE R, IT WAS NOT ADMITTED. THE CLAIM OF THE ASSESSEE WAS REJECTED F OR EARNING AGRICULTURAL INCOME ON THE GROUND THAT SINCE THE AS SESSEE IS RESIDING AT BHOPAL AND ENGAGED IN BUSINESS OF TRANS PORT AND REAL 8 ESTATE, EVIDENCE OF EXPENSES FOR EARNING AGRICULTUR AL INCOME WAS ALSO NOT PRODUCED, THEREFORE, THE CLAIM WAS REJECTE D. HOWEVER, THE FACT REMAINS THAT THE ASSESSEE IS OWNING AGRICULTUR AL LAND AND ALSO SOME LAND WAS TAKEN ON LEASE. THE INCOME SHOWN AS A GRICULTURAL INCOME WAS THUS ADDED U/S 68 OF THE ACT. IT IS NOT THE CASE THAT THE ASSESSING OFFICER MADE INQUIRIES FROM NEARBY LAND H OLDERS CONTRADICTING THE CLAIM OF THE ASSESSEE EVIDENCING THAT NEITHER ANY AGRICULTURAL OPERATION WAS DONE BY THE ASSESSEE HIM SELF NOR SUCH OPERATION WAS GOT DONE WITH THE HELP OF LABOUR, ETC . SIMPLY REJECTION OF CLAIM AND MAKING ADDITION U/S 68 IS NO T JUSTIFIED. NOW THE QUESTION ARISES WHETHER AGRICULTURAL PRODUCTION TO THE EXTENT AS HAS BEEN CLAIMED BY THE ASSESSEE CAN BE MADE. THE AFFIDAVIT, FILED BY ONE OF THE PERSONS, WAS REJECTED MERELY ON THE G ROUND THAT IT WAS NOT DEPOSED BEFORE THE ASSESSING OFFICER. WE A RE OF THE CONSIDERED OPINION THAT IF A FALSE AFFIDAVIT HAS BE EN FILED, IT HAS ITS OWN REPERCUSSION. INSTEAD OF FALSIFYING THE AFFIDA VIT, IT WAS MERELY REJECTED ON THE GROUND THAT IT WAS NOT FILED DURING ASSESSMENT PROCEEDINGS. THE ASSESSEE IS BASICALLY AN AGRICULTU RIST FOR THE LAST 40 YEARS THOUGH HAVING TWO TRUCKS AND ALSO DOING RE AL ESTATE BUSINESS. SO FAR AS KHASRA KHATAUNIES ARE CONCERNE D, THESE ARE 9 DOCUMENTS ISSUED BY THE LAND REVENUE DEPARTMENT OF THE GOVERNMENT AND CANNOT BE DISBELIEVED UNLESS AND UNT IL ANY ADVERSE MATERIAL IS BROUGHT ON RECORD. THE STATEMENT OF MOHD. ATIQUE WAS RECORDED U/S 133A AND IN REPLY TO QUESTI ON NO. 3 HE HAS STATED THAT HE HAS INCOME FROM AGRICULTURE AND IN R EPLY TO QUESTION NO. 6, HE HAS CLAIMED THAT HE IS HAVING 30 40 ACR ES OF AGRICULTURAL LAND IN OWN NAME AND NEARLY 150 -250 ACRES OF LAND BY OTHER MEMBERS OF THE FAMILY. NEARLY 200 ACRES OF AGRICULT URAL LAND WAS CLAIMED TO BE TAKEN ON LEASE (PAPER BOOK PAGES 33 T O 35 SUPPORTS THE CLAIM OF THE ASSESSEE). VIDE STATEMENT DATED 24 .9.2006 (ANNEXURE 5-10) QUESTION NO. 8, SHRI ATIQUE AHMED T ENDERED IN HIS STATEMENT THAT THEY ARE DOING BUSINESS FOR THE FIRS T TIME BUT THEIR MAIN OCCUPATION IS AGRICULTURE WHERE THEY ARE NOT M AINTAINING ANY ACCOUNT. IN STATEMENT DATED 26.9.2006 SHRI SHAFIQU E KHAN (FATHER OF THE ASSESSEE) IN REPLY TO QUESTION NO. 4 (ANNEXU RE 12) CLAIMED THAT THEY ARE HAVING A FARM HOUSE ON AIRPORT ROAD S INCE 1991 AND THE FAMILY IS HAVING ABOUT 150 ACRES OF LAND AND AB OUT 100 TO 150 ACRES ARE TAKEN ON LEASE. THESE STATEMENTS WERE NE ITHER FALSIFIED BY THE REVENUE NOR ANY ADVERSE MATERIAL WAS BROUGHT ON RECORD, THUS TOTALITY OF FACTS INDICATES THAT THE FAMILY IS HAVI NG AGRICULTURAL 10 INCOME. EVEN IN THE KHASRA (COPY AVAILABLE ON RECOR D) VARIOUS CROPS HAVE BEEN SHOWN BY THE ASSESSEE. IT IS PERTINENT TO MENTION HERE THAT THE ASSESSEE APPLIED FOR GETTING A REVOLVER LI CENCE AND MADE AN AFFIDAVIT (LPS PAGE 8) (PAGES 262 AND 263) WHEREIN VARIOUS SOURCES OF INCOME HAVE BEEN MENTIONED AND CATEGORICALLY SWO RN THAT THEY ARE HAVING AGRICULTURAL LAND IN VILLAGE LAMBAKHEDA WHICH IS ABOUT 100 ACRES. ALL THESE DOCUMENTS CANNOT BE FALSIFIED . 7. WITH REFERENCE TO THE EVIDENCE FILED BEFORE THE LEARNED CIT(A) WHICH HE HAS NOT ACCEPTED ON THE PLEA THAT THE SAME WERE NOT PRODUCED BEFORE THE AO, AS PER OUR CONSIDERED VIEW, THE ASSESSEES RIGHT TO FILE ADDITIONAL EVIDENCE IS ENUMERATED IN THE CIRCUMSTANCES SPECIFIED UNDER RULE 46A OF THE IT RULES BUT AT THE VERY SAME TIME, THE CIT(A) HAS WIDE POWERS UNDER WHICH HE MAY ALLO W THE APPELLANT TO PRODUCE ADDITIONAL EVIDENCE SUBJECT TO THE CONDITION THAT DUE OPPORTUNITY SHOULD BE PROVIDED TO THE AO A ND FOR THIS PROPOSITION, RELIANCE MAY BE PLACED ON THE DECISION OF THE ALLAHABAD HIGH COURT IN THE CASE OF M/S MRS MOHINDER KAUR; 10 4 ITR 120 AND SMT. PRABHAVATI S. SHAH; 231 ITR 1. THE POWERS OF THE CIT(A) ARE CO-TERMINUS TO ADMIT FRESH EVIDENCE WITH THE POWERS OF THE AO AND THESE POWERS ARE STRESSED REPEATEDLY BY M.P. HIGH C OURT AS WELL AS 11 SUPREME COURT IN THE CASE REPORTED AT 53 ITR 225 (S C) IN THE CASE OF KAPUR COAL SYNDICATE; 187 ITR 688 (SCC) IN THE CASE OF JUTE CORPORATION OF INDIA; 224 ITR 610 (SC) IN THE CASE OF NIRBHAY RAM DALURAM AND 166 ITR 484 IN THE CASE OF INDERMAL NAT WARLAL. WHERE THE ADDITIONAL EVIDENCE GOES TO THE ROOT OF T HE MATTER, THE SAME HAS TO BE ACCEPTED. THERE IS NO LAW THAT ADDI TIONAL EVIDENCE SHOULD NOT BE ADMITTED. ONLY IT HAS TO BE SEEN THA T THE RIGHT OF THE OTHER PARTY TO REBUT THE SAME SHOULD NOT BE VIOLATE D. IN THE INSTANT CASE, COPY OF KHASRA COULD NOT BE OBTAINED BY THE A SSESSEE WHEN THE CASE WAS GOING ON BEFORE THE AO. HOWEVER, THE SAME WAS ACQUIRED AND FILED BEFORE THE CIT(A). COPY OF SUCH KHASRA IS ALSO PLACED AT PAGES 6 TO 30 FOR THE A.YS. 2001-02 AND 2 002-03 AND FOR THE A.Y. 2004-05. IN RESPECT OF KHASRA FOR THE A.Y . 2003-04, THE SAME ARE PLACED AT PAGES 7 TO 30 AND FOR THE A.Y. 2 005-06 AT PAGES 7 TO 31 AND FOR THE A.YS. 2006-07 AND 2007-08 AT PA GES 7 TO 56 OF THE PAPER BOOK FILED FOR THE RESPECTIVE YEARS. COP IES OF THE PURCHASE DEEDS SHOWING PURCHASE OF LAND IN THE NAME OF THE ASSESSEE AND OTHER FAMILY MEMBERS ARE PLACED AT PAG ES 81 TO 184 OF THE PAPER BOOK. 12 8. ADDITIONAL EVIDENCE IS NECESSARY FOR PROPER APPR ECIATION OF THE ISSUE IN APPEAL AND FOR ADJUDICATION OF SUBS TANTIAL JUSTICE. SUCH EVIDENCE MAY ULTIMATELY TURN OUT TO BE TO THE BENEFIT OF EITHER TAX PAYER OR THE REVENUE. EVEN I N THE MATTERS WHICH WERE EARLIER DECIDED, FRESH EVIDENCE MAY BE ADMITTED, THOUGH IT MAY HAVE THE EFFECT OF DIFFEREN T INFERENCE BECAUSE RES JUDICATA HAS NO APPLICATION TO INCOME T AX PROCEEDINGS. FROM RECORD WE FIND THAT THE ASSESSEE HAS BEEN ALLOWED VERY SHORT TIME BY THE AO TO COMPLY WITH A NUMBER OF INQUIRIES AND TO PRODUCE VARIOUS PERSONS BEFORE THE AO. LESS THAN A MONTHS TIME WAS GIVEN BY THE AO IN CASE OF 44 APPEALS OF GROUP, THEREFORE, SOME OF THE EVIDENCES WERE FIL ED BEFORE THE CIT(A) WHICH HE SHOULD HAVE ACCEPTED AND PROPER OPP ORTUNITY SHOULD HAVE BEEN GIVEN TO THE AO FOR COMMENTING ON SUCH ADDITIONAL EVIDENCE. 9. IT WAS CONTENDED BY THE LEARNED COUNSEL FOR THE ASSESSEE THAT WHERE ALL NECESSARY MATERIALS ARE AVAILABLE, T HE TRIBUNAL IS NOT JUSTIFIED IN REMITTING THE MATTER BACK TO TH E LOWER AUTHORITIES AND FOR THIS PURPOSE, RELIANCE MAY BE P LACED ON 13 RAM GORSI CONSTRUCTION LTD.; 308 ITR 290 (MAD.). T HE LEARNED COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT THE ADDITIONAL EVIDENCE IS SUCH THAT IT CANNOT BE REBUT TED, IT IS AN EXERCISE IN FUTILE TO SET ASIDE FOR REBUTTAL AND IN THIS CATEGORY, GENERALLY GOVERNMENT DOCUMENTS FALL. ACCORDINGLY, I T WAS REQUESTED THAT THE ISSUE MAY NOT BE SET ASIDE WHERE THE ADDITIONAL EVIDENCE IS NOT DOUBTFUL/NOT REBUTTABLE. 10. IN VIEW OF THE ABOVE DISCUSSION AND THE DOC UMENTARY EVIDENCE PLACED ON RECORD WITH REGARD TO THE LAND O WNED BY THE ASSESSEE, WE DIRECT THE ASSESSING OFFICER TO AL LOW AGRICULTURAL INCOME @ RS. 6000/- PER BIGHA. THE AS SESSING OFFICER IS DIRECTED TO WORK OUT THE ACTUAL HOLDING OF LAND BY THE ASSESSEE AND HIS FAMILY MEMBERS AND TO COMPUTE THE AGRICULTURAL INCOME THEREON BY MULTIPLYING WITH RS. 6,000/- PER BIGHA PER ANNUM. IN RESPECT OF THE LAND TAKEN O N LEASE, THE MATTER IS RESTORED BACK TO THE FILE OF THE ASSE SSING OFFICER FOR DETERMINING THE TOTAL LAND TAKEN ON LEASE AFTER CONSIDERING THE ADDITIONAL EVIDENCE FILED BEFORE CIT(A) AS DISC USSED HEREINABOVE, AND AFTER ALLOWING DEDUCTION ON ACCOUN T OF LEASE 14 RENT PAID BY THE ASSESSEE THEREON, THE ASSESSING OF FICER IS TO COMPUTE THE AGRICULTURAL INCOME OUT OF SUCH LEASE H OLD LANDS. WE DIRECT ACCORDINGLY. THIS CONCLUSION IS APPLICAB LE TO ALL THE ASSESSMENT YEARS, UNDER CONSIDERATION. 11. A LEGAL GROUND HAS BEEN TAKEN BY THE ASSESSEE WITH REGARD TO FRAMING OF ASSESSMENT U/S 153-C OF THE AC T WHERE THE SEARCH WAS UNDERTAKEN IN THE ASSESSEES PREMISES IT SELF. AS PER THE LEARNED COUNSEL FOR THE ASSESSEE, THE ASSESSMENT SH OULD HAVE BEEN FRAMED U/S 153A AND SINCE THE ASSESSMENT HAS NOT BE EN FRAMED U/S 153A BUT THE ASSESSING OFFICER HAS WRONGLY MENT IONED SECTION 153C, THE ASSESSMENT IS NULL AND VOID. WE DO NOT FI ND ANY MERIT IN THIS CONTENTION OF THE ASSESSEE INSOFAR AS SUCH MIS TAKE IS COVERED BY THE PROVISIONS OF SECTION 292-B OF THE ACT. ACC ORDINGLY, THE LEGAL GROUND TAKEN BY THE ASSESSEE IN THE A.YS. 2002-03 T O 2007-08 IS HEREBY DISMISSED. 12. FOR THE A.Y. 2007-08 (GROUND NOS. 5 TO 7) THE A DDITIONS HAVE BEEN MADE ON THE BASIS OF ENTRIES MADE IN THE BOOK MARKED AS BS- 1. THE TOTAL OF SUCH ENTRIES COMES TO RS.50,21,800/ - (CASH FROM BHAI JAN RS.17,09,800/- AND CASH PAID RS.33,12,000/ -). FROM THE ASSESSMENT STAGE ITSELF IT HAS BEEN EXPLAINED BY TH E ASSESSEE THAT 15 BHAI JAN IS THE NICK NAME OF MOHD. ATIQUE. THE CASH BOOK AND BOOKS OF ACCOUNTS WERE IMPOUNDED ON 31.9.2006 (ANNE XURE 22 AND 21). THE CLAIM OF THE ASSESSEE IS THAT THESE CASH T RANSACTIONS WERE WITH RESPECT TO NAVIN NAV YUVAK (NN) AND A.A. REAL ESTATE (AA). IT WAS CONTENDED THAT THE ASSESSEE (MOHD. ATIQUE) CONT ROLS BOTH THE CONCERNS AND USED TO KEEP THE CASH OF BOTH THE CONC ERNS WITH HIM. THE CLAIM OF THE ASSESSEE WAS REJECTED BY THE ASSES SING OFFICER. THE LEARNED FIRST APPELLATE AUTHORITY IN PARA 7.2 PAGE 12 OBSERVED AS UNDER :- THE PRINTOUT SUBMITTED BEFORE ME IS PREPARED ON COMPUTER JUST TO SUPPORT THE THEORY THAT THE EXPENS ES ARE ENTERED IN THE CASH BOOK OF THE TWO CONCERNS. THE C ASH BOOK SUBMITTED BEFORE THE A.O. DID NOT HAVE THESE ENTRIES. THIS CLEARLY SHOWS THAT THE PRINTOUT OF CA SH BOOK SUBMITTED BEFORE ME ARE NOT RELIABLE. IN VIEW OF TH E ABOVE, IT IS HELD THAT THE ADDITION OF RS.50,21,800 /- FOR UNACCOUNTED EXPENDITURE IS VALID HENCE THE SAME IS CONFIRMED. THE CRUX OF ARGUMENTS ON BEHALF OF THE ASSESSEE IS THAT THE ACCOUNTS WERE MAINTAINED ON COMPUTER AND THE PRINTO UT OF THE SAME WAS DULY PRODUCED BEFORE THE CIT(A). ON THE OT HER HAND, THE LD. DR SUPPORTED TWO ORDERS OF LOWER AUTHORITIE S. WE HAVE CONSIDERED RIVAL CONTENTIONS AND FOUND THAT IN THE A.Y. 2007- 08 AN ADDITION OF RS.50,21,800/- WAS MADE. WITH REF ERENCE TO 16 THE ABOVE, THE ADDITION MADE IN RESPECT OF LOOSE PA PERS FOUND WHEREIN THE CASH PAYMENT OF RS. 17,09,800/- AND CAS H RECEIPT OF RS. 33,12,000/- WAS COMPUTED. THE ASSESSING OFF ICER HAS MADE THE ADDITION ON THE BASIS OF ENTRIES IN THE BO OK MARKED AS BS-1. THE TOTAL OF SUCH ENTRIES UNDER TWO HEADS OF RECEIPT AND PAYMENT WAS RS. 50,21,800/- (17,09,800 + 33,12, 000). IT WAS ALSO EXPLAINED BEFORE THE ASSESSING OFFICER THA T BHAI JAN IS THE NICK NAME OF THE ASSESSEE WHO IS ELDEST SON OF MOHD. SHAFIQ AND ALL KNOWN PERSONS CALL HIM BY THAT NAME. DURING THE COURSE OF SURVEY, CASH BOOK OF M/S NAVIN NAV YU VAK (IN SHORT NN) AND M/S A.A. REAL ESTATE (IN SHORT AA ) WAS ALSO IMPOUNDED U/S 133A ON 21.9.2006. IT WAS ALSO EXPLA INED THAT THESE WERE CASH TRANSACTIONS WITH NN/AA. AS THE AS SESSEE, M/S MOHD. ATIQU LOOKING AFTER THE WORK OF BOTH THE CONCERNS AND ALSO USED TO KEEP CASH OF BOTH THE CONCERNS, TH ESE TRANSACTIONS WERE FOUND RECORDED ON THE LOOSE PAPER RECOVERED FROM THE PREMISES OF THE ASSESSEE. HOWEVER, THE AS SESSING OFFICER INFERRED THAT THESE TRANSACTIONS ARE IN THE NATURE OF EXPENSES WHICH WERE NOT FOUND RECORDED IN THE RESPE CTIVE BOOKS OF THESE CONCERNS. WE FIND THAT THE FINDINGS RECORDED BY 17 THE ASSESSING OFFICER TO THE EFFECT THAT THE CASH B OOK DOES NOT SUPPORT ENTRIES IN THE PAPERS IS NOT CORRECT INSOFA R AS COPIES OF CASH BOOK OF NN/AA WERE FILED BEFORE THE LOWER AUTH ORITIES. THE ASSESSEE ALSO FILED RECONCILIATION STATEMENT BE FORE THE CIT(A). WITHOUT VERIFYING THE RECONCILIATION STATEM ENT AND ITS CORRECTNESS, THE CIT(A) CONFIRMED THE ADDITION MADE BY THE ASSESSEE. AS PER OUR CONSIDERED VIEW, THE AMOUNT RE CEIVED AS WELL AS AMOUNT PAID CANNOT BE THE INCOME OF THE ASS ESSEE. THE TOTAL OF THESE ENTRIES INDICATING RECEIPT OF CASH W AS RS. 17,09,800/- WHEREAS TOTAL OF SUCH CASH PAYMENT WAS RS. 33,12,000/-. THUS, OUT OF THE TOTAL CASH PAYMENT O F RS. 33,12,000/-, A SUM OF RS.17,09,800/- ITSELF WAS THE RECEIPT INDICATED ON THE SAME SET OF PAPERS, THEREFORE, AS PER OUR CONSIDERED VIEW, AMOUNT PAID BY THE ASSESSEE IN EXC ESS OF WHAT HE HAS RECEIVED, CAN BE TREATED AS HIS UNEXPLA INED INCOME. THUS, THE MAXIMUM ADDITION WHICH CAN BE MAD E WORKS OUT TO BE RS. 16,02,200/- (RS.33,12,000/- (-) RS. 17,09,800/-). ACCORDINGLY, THE ASSESSING OFFICER I S DIRECTED TO RESTRICT THE ADDITION TO THE EXTENT OF RS. 16,02,20 0/- IN PLACE OF RS. 50,91,800/-. 18 13. THE LAST GROUND PERTAINS TO NOT ALLOWING DEDUCT ION CLAIMED U/S 24 AT 30% OF THE HOUSE PROPERTY RENTAL RECEIPT AT RS.33,000/- BY TREATING THE SAME AS INCOME FROM OTHER SOURCES A ND CONSEQUENT ADDITION TO THE TOTAL INCOME. THE CRUX OF ARGUMENT S ON BEHALF OF THE ASSESSEE IS THAT THE RENTAL INCOME FROM VARIOUS PROPERTIES SITUATED AT SAFIA COLLEGE ROAD, JAWAHAR CHOWK, JUME RATI, BHOPAL WAS CLAIMED TO HAVE BEEN RECEIVED. THESE PROPERTIE S WERE CLAIMED TO HAVE BEEN PURCHASED ON 31.1.1987 AND PERMISSION FOR CONSTRUCTION OF THE SAME WAS OBTAINED ON 28.12.2003 . THE CRUX OF ARGUMENTS IS THAT THE PERMISSION CERTIFICATE (GOVER NMENT DOCUMENT) AND AFFIDAVIT OF TENANT WERE NOT ACCEPTED BY THE LEARNED CIT(A) BEING ADDITIONAL EVIDENCE AND ESPECIALLY WHE N THESE WERE NOT PRODUCED BEFORE THE ASSESSING OFFICER. ON QUESTION ING FROM THE BENCH AS TO WHY THESE DOCUMENTS WERE NOT PRODUCED D URING THE ASSESSMENT PROCEEDINGS, IT WAS EXPLAINED THAT SINCE THE TENANTS WERE EVICTED, COULD NOT BE TRACED DURING THE ASSESS MENT STAGE. IT WAS PLEADED THAT THE AFFIDAVITS WERE FILED. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE ARE OF THE VIEW THAT THE PURC HASE DEEDS, CONSTRUCTION PERMISSION CERTIFICATE AND THE AFFIDAV IT OF TENANTS CLEARLY INDICATE THAT THE ASSESSEE WAS HAVING RENTA L INCOME. THE 19 RENTAL INCOME SHOWN IN THE A.Y. 2001-02 IS RS.33,00 0/-, 43,200/- (A.Y. 2002-03), RS. 46,800/- (A.Y. 2003-04), RS. 50 ,400/- (A.Y. 2004-05), RS. 21,600/- (A.YS. 2005-06 TO 2007-08), THEREFORE, DESERVES TO BE CONSIDERED IN THE LIGHT OF THESE MAT ERIALS WHICH HAVE BEEN BROUGHT ON RECORD BY THE ASSESSEE. IF THE LEA RNED CIT(A) HAD ANY DOUBT, NOTHING PREVENTED HIM TO GET THE SAME VE RIFIED EITHER FROM THE OFFICE OF THE ASSESSING OFFICER OR BY ANY OTHER MEANS TO HIS SATISFACTION BUT THAT WAS NOT DONE. EVEN THE ASSESS ING OFFICER HAS NOT DOUBTED OR DISPUTED THE EXISTENCE OF BUILDINGS CLAIMED TO BE RENTED OUT BY THE ASSESSEE. 14. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND FIND FROM RECORD THAT THE ASSESSEE IS IN RECEIPT OF RENTAL IN COME FROM THE FOLLOWING :- PARTICULARS A.Y. 2001-02 A.Y. 2002-03 A.Y. 2003-04 A.Y. 2004-05 A.Y. 2006-07 NAZAR GANJ, LAXMI TALKIES, BHOPAL, MOHD. NAVED 36,000 39,600 43,200 48,000 54,000 -DO- MOHD. NAWAB 9,600 9,600 9,600 9,600 9,600 JAWAHAR CHOWK, JUMERATI,BHOPAL 60,000 66,000 72,000 78,000 84,000 20 MR.BAGHMAT PAWAIA -DO- PAWAN TRANSPORT CO. 60,000 66,000 72.00 78,000 84,000 TOTAL 1,65,800 1,81,200 1,96,800 2,13,600 2,31,600 THE PROPERTY AT JUMERATI WAS PURCHASED IN THE YEAR 1987 AND PERMISSION FOR CONSTRUCTION WAS OBTAINED ON 28.12.1 993. AFFIDAVITS OF TENANTS CONFIRMING PAYMENT OF RENT TO THE ASSESS EE WERE BEING SUBMITTED BEFORE THE CIT(A) . THESE ARE IN CONFIRMA TIONS OF ASSESSEES PLEA ALREADY TAKEN BEFORE THE LD. A.O. T HESE AFFIDAVITS COULD NOT BE PRESENTED BEFORE THE LD. A.O. AS DURIN G THE ASSESSMENT PROCEEDINGS THE TENANTS WERE EVICTED. THE TENANTS C OULD BE LOCATED AFTER EFFORTS. 15. THE ADDITIONAL EVIDENCE SO FILED BY THE ASSESSE E BEFORE THE CIT(A) IS NECESSARY FOR PROPER APPRECIATION OF ISSU E IN APPEAL AND FOR THE CAUSE OF SUBSTANTIAL JUSTICE. SUCH EVIDENC E MAY ULTIMATELY TURN OUT TO THE BENEFIT OF EITHER TAX PAYER OR THE DEPARTMENT. WE ALSO FIND THAT THE ASSESSEE WAS ALSO ALLOWED VERY S HORT TIME BY THE ASSESSING OFFICER TO COMPLY WITH A NUMBER OF INQUIR IES, SUBMISSION OF DOCUMENTS AND PRODUCTION OF VARIOUS PERSONS BEFO RE THE 21 ASSESSING OFFICER. THE POWERS OF THE CIT(A) ARE CO -TERMINUS TO ADMIT FRESH EVIDENCE WITH THE POWERS OF THE ASSESSI NG OFFICER AND THESE POWERS ARE STRESSED REPEATEDLY BY THE HONBLE M.P. HIGH COURT AS WELL AS THE HONBLE SUPREME COURT. FOR THI S PURPOSE, RELIANCE MAY BE PLACED ON 1. CIT VS. KANPUR COAL SYNDICATE; 53 ITR 225(SC) 2. INDERMAL NATWARLAL VS. ITO; 166 ITR 484 (MP) 3. ITO VS. JUTE CORPN. OF INDIA LTD.; 187 ITR 688 (SC) 4. CIT VS. NIRBHAYRAM DALURAM; 224 ITR 610 (SC) IF THE ADDITIONAL EVIDENCE IS MATERIAL IN DECIDING THE CONTROVERSY AND GOES TO THE ROOT OF THE MATTER, THE SAME HAS TO BE ACCEPETED AS LAID DOWN IN THE CASE OF CIT VS. SHIYA DAWOODI BOHR A SAMAJ (2008) 10ITJ 502 (MP) AND CIT VS. KU. SATYA SETIA; 143 ITR 486 16. THERE IS ALSO NO LAW THAT THE ADDITIONAL EVIDEN CE SHOULD NOT BE ADMITTED. ONLY IT HAS TO BE SEEN THAT THE RIGHT OF OTHER PARTY TO REBUT THE SAME SHOULD NOT BE VIOLATED AS LAID DOWN BY THE HONBLE M.P. HIGH COURT IN THE CASE OF CIT VS. SONIBAI WAHA BBHAI; 232 ITR 900. 17. IN VIEW OF THE ABOVE DISCUSSION, THE ISSUE WITH REGARD TO ALLOWING THE DEDUCTION U/S 24 IN RESPECT OF THE INC OME SHOWN 22 UNDER THE HEAD HOUSE PROPERTY IS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING AFRESH AFTER CONSIDE RING THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE BEFORE THE CIT(A). T HE ASSESSING OFFICER IS ALSO AT LIBERTY TO CALL FOR ANY OTHER EV IDENCE WHICH HE THINKS FIT FOR DECIDING THE ISSUE AND THE ASSESSEE IS ALSO AT LIBERTY TO FILE ANY EVIDENCE BEFORE HIM FOR PROPER ADJUDICATIO N AND TO SUBSTANTIATE HIS CLAIM OF RENTAL INCOME. WE DIRECT ACCORDINGLY. 18. NOW WE SHALL TAKE UP THE APPEALS IN THE CASE O F MOHD. SHAFIQUE, FOLLOWING GROUNDS HAVE BEEN RAISED :- 01. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE ID. CIT{A) WAS NOT JUSTIFIED IN NOT ACCEPTING THE DOCUMENTS FILED BEFO RE HIM AS THE ADDITIONAL EVIDENCE. 02. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE ID. CIT{A) WAS NOT JUSTIFIED IN CONFIRMING THE FINDING OF THE ASSESSING OFFICER THAT THERE IS NO AGRICULTURAL INCOME OF THE APPELLANT AND IN CONFIRMING THE ADDITION OF RS. 50,624/- AS INCOME FROM OTHER SOURCES IN THE HANDS OF THE APPELLANT. 03. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE ID. CIT{A) WAS NOT JUSTIFIED IN CONFIRMING THE DISALLOWANCE OF DEDUCTI ON OF 30% CLAIMED BY THE APPELLANT U/S. 24 OF THE IT ACT AGAINST THE RENTAL RECEIPTS SHOWN BY THE APPELLANT AND IN TREATING THE WHOLE RENTAL RECEIPTS AS INCOME FROM OTHER SOURCES OF THE APPELLANT. 04. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE ID. CIT{A) WAS NOT JUSTIFIED IN NOT ACCEPTING THE INCOME FROM TRUCK OP ERATION AS RETURNED BY THE APPELLANT U/S. 44AE OF THE IT ACT AND IN CONFIRMING THE ADDITION OF RS. 16,658/- BY APPLYING THE N.P. RATE OF 8% ON THE GROSS RECEIPTS AS DONE BY THE ASSESSING OFFICER. 05. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE ID. CIT{A) WAS NOT JUSTIFIED IN CONFIRMING THE CALCULATION OF THE LONG TERM CAPITAL GAIN AT RS. 13,69,402/- FOR EACH OF THE THREE MINOR SONS IN PLACE OF RS. 77 ,849/- SHOWN BY THE APPELLANT AND IN CONFIRMING THE ADDITION OF RS. 38,74,659/- TOWAR DS SHARE OF THREE MINOR SONS IN THE CAPITAL GAIN. 06. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE ID. CIT{A) WAS NOT JUSTIFIED IN NOT APPLYING THE PROVISIONS OF SEC. 11 2 OF THE IT ACT ON SHARES OF LONG TERM CAPITAL GAIN INCLUDED IN THE HANDS OF THE APPE LLANT AND IN CHARGING THE TAX ON THE NORMAL RATE IN PLACE OF 20% APPLICABLE IN THE C ASE OF THE APPELLANT. 23 07. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE ID. CIT{A) WAS NOT JUSTIFIED IN NOT ACCEPTING THE OPENING CASH BALANCE OF RS. 5,00,000/- AS ON 01-04- 2000 AND IN CONFIRMING ADDITION OF RS. 5,00,000/- I N THE HANDS OF THE APPELLANT 08. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE ID. CIT{A) WAS NOT JUSTIFIED IN CONFIRMING THE ACT OF THE ASSESSING OF FICER OF NOT GIVING THE CREDIT FOR TOS , WHILE ASSESSING THE INCOME OF THE APPELLANT ON TH E BASIS OF GROSS RECEIPTS FROM DIFFERENT GOVT. UNDERTAKINGS. 19. SO FAR AS GROUND NO. 1 IS CONCERNED, IT IS EVID ENT FROM RECORD THAT THE ASSESSEE FILED SOME ADDITION EVIDENCES BEF ORE THE CIT(A) BUT HE DID NOT ACCEPT THE SAME ON THE GROUND THAT T HE ASSESSEE DID NOT FILE THE SAME BEFORE THE LEARNED ASSESSING OFFI CER. IN OUR VIEW, IF THIS WAS THE GROUND FOR NOT ACCEPTING THE ADDITI ONAL EVIDENCES, IT WAS OPEN FOR THE LEARNED CIT(A) TO HAVE ACCEPTED TH E SAME AND CALLED FOR REMAND REPORT FROM THE ASSESSING OFFICER ON THE SAME BUT THIS COURSE OF ACTION WAS NOT TAKEN BY THE LEARNED CIT(A). WE, HOWEVER, AFTER CONSIDERING THE ARGUMENTS ADVANCED B Y THE PARTIES, ACCEPT THESE EVIDENCES FOR HEARING. 20. SO FAR AS GROUND NO. 2 IS CONCERNED, IT IS APPA RENT FROM RECORD THAT THE ASSESSEE DECLARED AGRICULTURAL INCOME FOR THE FIRST TIME WHICH WAS DECLINED BY THE ASSESSING OFFICER AND THE AGRICULTURAL INCOME WAS ASSESSED AS INCOME FROM OTHER SOURCES. THE LEARNED CIT(A) ALSO CONFIRMED THE ACTION OF THE ASSESSING O FFICER ON THE PLEA 24 THAT NO EVIDENCE IN SUPPORT OF THE AGRICULTURAL INC OME WAS SUBMITTED BEFORE HIM. 21. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED A COPY OF KHASRA IN SUPPORT OF THE CLAIM OF AGRICULTU RAL INCOME. THE LEARNED CIT DR SUPPORTED THE ORDERS OF THE AUTHORIT IES BELOW. 22. AFTER CONSIDERING THE RIVAL SUBMISSIONS OF THE PARTIES, WE ARE OF THE VIEW THAT SINCE KHASRA, WHICH IS A REVENUE R ECORD, WAS PRODUCED, ASSESSING OFFICER CANNOT DISBELIEVE THE S AME WITHOUT CONTROVERTING THE ENTRIES MADE THEREIN. AS SUCH, T HE AUTHORITIES BELOW WERE NOT JUSTIFIED IN REJECTING THE CLAIM OF THE ASSESSEE. IN TERMS OF OUR DISCUSSION ON THIS ISSUE IN CASE OF MO HD. ATIQUE, THE MATTER IS RESTORED TO THE ASSESSING OFFICER WITH TH E SAME DIRECTION. 23. SO FAR AS GROUND NO. 3 IS CONCERNED, A SIMILAR ISSUE HAS BEEN DEALT WITH BY US IN PARA 15, 16 & 17 ABOVE IN THE C ASE OF MOHD. ATIQUE AND SINCE THE FACTS ARE THE SAME, FOLLOWING THE REASONING GIVEN THEREIN, WE RESTORE THE MATTER BACK TO THE AS SESSING OFFICER FOR DECIDING AFRESH THE ASSESSEES CLAIM OF DEDUCTI ON U/S 24 IN RESPECT OF INCOME FROM HOUSE PROPERTY SHOWN BY HIM. ACCORDINGLY, THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 25 24. SO FAR AS GROUND NO. 4 IS CONCERNED, IT IS NOTE D FROM RECORD THAT THE ASSESSEE DECLARED INCOME FROM BUSINESS OF TRUCK U/S 44AE OF THE ACT. THE ASSESSING OFFICER REJECTED THE CLA IM OF THE ASSESSEE ON THE PLEA THAT THE ASSESSEE HAS NOT MAINTAINED AN Y BOOKS OF ACCOUNTS, VOUCHERS AND BILLS, ETC. HE, THEREFORE, E STIMATED THE PROFIT @ 8% OF THE TOTAL RECEIPTS AND MADE THE ADDITION OF RS. 16,658/-. ON APPEAL ALSO THE ASSESSEE DID NOT FIND ANY FAVOUR FROM THE LEARNED CIT(A) AS IN THE OPINION OF THE LEARNED CI T(A) SINCE THE ASSESSEE IS NOT THE TRUCK OPERATOR BUT HAS DONE THE BUSINESS OF TRANSPORTATION UNDER THE CONTRACT, THE CASE OF THE ASSESSEE WAS NOT COVERED U/S 44AE OF THE ACT. 25. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THOUGH THE TRUCKS WERE RUN ON CONTRACT BASIS BUT TH EY WERE EXCLUSIVELY IN POSSESSION OF THE ASSESSEE AND THE A SSESSEE WAS DERIVING INCOME THEREFROM, THE CASE OF THE ASSESSEE IS CLEARLY COVERED U/S 44AE OF THE ACT. ON THE OTHER HAND, TH E LEARNED CIT DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW WI TH THE SUBMISSION THAT SINCE THE ASSESSEE IS NOT THE TRUCK OWNER, NO DEDUCTION U/S 44AE COULD BE GRANTED TO HIM. 26 26. CONSIDERING THE RIVAL SUBMISSIONS IN THE GUISE OF THE FACTS OBTAINING IN THIS CASE, WE FIND THAT THE ASSESSING OFFICER HAS MADE ADDITIONS BY ESTIMATING NET PROFIT AT 8% ON THE INC OME RECEIVED FROM OPERATION OF TRUCKS. THE ASSESSEE HAS CLAIMED COMPUTATION OF INCOME FROM TRUCK OPERATION U/S 44AE WHICH WAS DECL INED BY THE ASSESSING OFFICER. THE FACTS OF THE ISSUE IN BRIEF ARE THAT THE APPELLANT HAS DECLARED HIS INCOME FROM BUSINESS OF TRUCK OPERATION U/S 44AE. THE ASSESSING OFFICER OBSERVED THAT THE A SSESSEE HAS TAKEN TRUCKS ON HIRE FROM ANAND TRANSPORT COMPANY, BOMBAY TRANSPORT COMPANY AND EKTA TRANSPORT WITH A PURPOSE TO EXECUTE CONTRACT FOR TRANSPORT OF GOODS. THE ASSESSING OFFI CER HELD THAT SECTION 44AE IS NOT APPLICABLE IN THE ASSESSEES CA SE SINCE THE ASSESSEE HAD NOT MAINTAINED ANY BOOKS OF ACCOUNTS A ND NOT PRODUCED BILLS AND VOUCHERS OF EXPENSES. HE ESTIMA TED PROFIT @ 8% OF THE TOTAL RECEIPT. AFTER GIVING THESE FINDINGS HE MADE THE FOLLOWING ADDITIONS IN VARIOUS YEARS :- A.Y. AMOUNT OF ADDITION (IN RS.) 2001 - 02 16658 2002 - 03 2003 - 04 20785 2004 - 05 437456 2006 - 07 27 27. BY THE IMPUGNED ORDER, THE CIT(A) CONFIRMED THE ASSESSING OFFICERS ACTION AFTER HAVING MADE THE FOLLOWING OB SERVATIONS ON EXAMINATION IT IS FOUND THAT THE APPELLANT IS NOT A OPERATOR OF GOODS CARRIAGE. PROVISIONS OF SEC TION 44AE APPLY ONLY IN CASE WHERE AN OPERATOR OF GOODS CARRIAGE OWNS LESS THAN 10 GOODS CARRIAGE. THE APPELLANT IS NOT A TRUCK OPERATOR BUT HAS DONE THE BUSINESS OF TRANSPORTATION UNDER CONTRACT. HE HAS TAKEN TRUCKS FROM THIRD PARTIES FOR THIS PURPOSE. THIS SHOWS THAT APPELLANTS CASE IS NOT COVERED BY SECTI ON 44AE. THE APPELLANT HAVE NOT MAINTAINED BOOKS OF A/C AND BILLS AND VOUCHERS. IN THESE CIRCUMSTANCES THE A.O. IS JUSTIFIED TO REJECT THE BOOK RESULT AND ESTIMATE THE PROFIT. THE ESTIMATE OF PROFIT IS DONE @ 8% WHICH IS ALSO FAIR. IN VIEW OF THE ABOVE, THE FOLLOWING ADDITIONS ARE CONFIRMED :- A.Y. AMOUNT OF ADDITION (IN RS.) 2001 - 02 16658 2002 - 03 2003 - 04 20785 2004 - 05 437456 2006 - 07 2007 - 08 28. IT WAS PLEADED BY THE LEARNED COUNSEL FOR THE A SSESSEE THAT THE ASSESSEE WAS HAVING TWO TRUCKS, THEREFORE, PROVISIO NS OF SECTION 44AE ARE APPLICABLE BENEFIT OF WHICH WAS NOT GIVEN BY THE LOWER AUTHORITIES. 28 29. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND FI ND FROM RECORD THAT DURING THE COURSE OF SEARCH VARIOUS DEP OSITS WERE FOUND IN THE BANK ACCOUNT, WHICH WERE EXPLAINED BY THE AS SESSEE AS OUT OF BUSINESS OF TRUCK OPERATION. IN THE A.Y. 2004-0 5 A TOTAL SUM OF RS. 1,45,83,387/- WAS FOUND DEPOSITED IN TWO BANK A CCOUNTS OF THE ASSESSEE. SUCH HUGE DEPOSIT CANNOT BE SAID TO BE O UT OF INCOME OF TWO TRUCKS ONLY. HOWEVER, A CATEGORICAL FINDING HA S BEEN RECORDED BY THE LEARNED CIT(A) TO THE EFFECT THAT THE ASSESS EE WAS A TRUCK OPERATOR, DOING BUSINESS OF TRANSPORTATION UNDER CO NTRACT BY HIRING TRUCKS FROM OTHERS. SINCE THE ASSESSEE WAS NOT OWNI NG THE TRUCKS OF HIS OWN, BUT WAS HIRING TRUCKS FROM OUTSIDE PARTIES , THEREFORE, PROVISIONS OF SECTION 44AE WERE NOT APPLICABLE. NO W WE SHALL DELIBERATE ON THE REASONABLENESS OF PROFIT RATE APP LIED BY THE ASSESSING OFFICER AT 8%. THE PROFIT RATE OF 8% IS APPLICABLE IN CASE OF CONTRACT RECEIPTS BUT HERE IS A CASE OF TRANSPOR TATION. FROM THE NET PROFIT DECLARED ON TRUCK OPERATION, WE FIND THA T THE ASSESSEE HAS SHOWN NET PROFIT RATE OF 3.8% AND 5.1% IN THE A.YS. 2003-04 AND 2004-05, RESPECTIVELY. IN THE A.Y. 2004-05 TOTAL RE CEIPTS FROM TRANSPORT BUSINESS INCREASED TO RS. 1,45,83,387/- A S COMPARED TO TRANSPORT RECEIPT FOR THE IMMEDIATELY PRECEDING ASS ESSMENT YEAR 29 2003-04 AMOUNTING TO RS. 32,47,740/-. IN THE A.Y. 2003-04, THE ASSESSEE HAD SHOWN NET PROFIT RATE OF 3.8% ON THE T RANSPORT RECEIPT OF RS. 32.47 LACS WHEREAS IN THE A.Y. 2004-05, THE ASSESSEE HAD SHOWN TRANSPORT RECEIPT OF RS.145.83 LACS AND NP RA TE OF 5.1%. THUS, IT IS CLEAR THAT EVEN AFTER INCREASE IN TRANS PORT RECEIPTS BY MORE THAN FOUR TIMES, THE ASSESSEE HAS SHOWN BETTER NP RATE OF 5.1% IN PLACE OF 3.8% IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR. KEEPING IN VIEW THE NATURE OF THE ASSESSEES BUSINESS, MORE THAN FOUR TIMES INCREASE IN TURNOVER/RECEIPTS VIS- -VIS BETTER NET PROFIT RATE SHOWN BY THE ASSESSEE AS COMPARED TO IM MEDIATELY PRECEDING YEAR, WE THINK IT APPROPRIATE TO APPLY NP RATE OF 5.5% IN THE A.Y. 2004-05. ACCORDINGLY, THE ASSESSING OFFIC ER IS DIRECTED TO RE-WORK OUT THE PROFIT FROM TRANSPORT BUSINESS IN T HE A.Y. 2004-05 BY APPLYING NP RATE OF 5.5% IN PLACE OF NP RATE OF 8% APPLIED BY HIM. WE DIRECT ACCORDINGLY. 30. SO FAR AS GROUND NOS. 5 AND 6 ARE CONCERNED, IT IS NOTED FROM RECORD THAT THE ASSESSEE WAS CO-OWNER OF LAND ADMEA SURING 25,765 SQ.FT. SITUATED AT AHMEDABAD PALACE, KOHEFIZA. BHOP AL, WHICH WAS INHERITED BY THE ASSESSEE AND CO-PARTNERS. THE SAM E WAS SOLD 30 DURING THE YEAR UNDER CONSIDERATION AND THE ASSESSE E DECLARED LONG TERM CAPITAL GAINS BY CLAIMING THE MARKET VALUE AS ON 1.4.1981 AT RS. 100/- PER SQ.FT. HOWEVER, THE ASSESSING OFFICER , ON THE BASIS OF SALE VALUE OF SOME OTHER LAND, HE APPLIED THE FAIR MARKET VALUE AS ON 1.4.1981 AT RS. 17/- PER SQ.FT. ON THE APPEAL, T HE LEARNED CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 31. BEFORE US, THE LEARNED COUNSEL FOR THE ASSE SSEE SUBMITTED THAT THE ASSESSEE AND HIS CO-OWNERS LAND WAS ON TH E MAIN ROAD LEADING TO AHMEDABAD PALACE OF NAWAB AND JUST OPPOS ITE THE FLAG HOUSE WHICH WAS AGAINST THE HOUSE OF NAWAB WHILE TH E TRANSACTION CITED BY THE ASSESSING OFFICER RELATES TO THE SMALL PIECE OF LAND FAR BEHIND FROM THE MAIN ROAD WITH A SMALL SERVICE LANE . 32. IT WAS FURTHER CONTENDED BY THE LEARNED COUNS EL FOR THE ASSESSEE THAT THE ASSESSEES PLOT WAS SITUATED AT M OST ADVANTAGEOUS POSITION ON THE MAIN ROAD, THEREFORE, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN COMPARING THE VALUE FE TCHED BY THIS TRANSACTION WITH THE VALUE OF A PLOT WHICH WAS NOT LOCATED ON THE MAIN ROAD BUT WAS ON THE SMALL SERVICE LANE AND WAS NOT HAVING ADVANTAGEOUS POSITION AS THAT OF THE ASSESSEE. HE REITERATED THAT IN 31 SUCH CIRCUMSTANCES, THE MOST RELIABLE METHOD IS TO APPLY THE COST INFLATION INDEX BACKWARDS :- INDEX IN FY 2005-06 497 INDEX IN FY 1980-81(ACTUALLY FY 81-83) 100, SAY CALCULATION 1,15,35,000X100 497 = 23,20,925 COST PER SQFT AS ON 1.4.1981 = 23,20,925 23,070 = 100.6 PER SQ.FT. THE COST OF ACQUISITION DURING FY 1981-82 TAKEN BY THE ASSESSEE IS CORRECT AND MAY KINDLY BE SO UPHELD. THE ADDITION M AY KINDLY BE DELETED. 33. ON THE OTHER HAND, THE LEARNED DR RELIED ON THE ORDERS OF THE LOWER AUTHORITIES AND CONTENDED THAT THE ASSESSING OFFICER WAS JUSTIFIED IN ADOPTING THE FAIR MARKET VALUE AS ON 1 .4.1981 BY COMPARING THE ASSESSEES TRANSACTION WITH THE SALE TRANSACTION DATED 23.10.1982 FOR PLOT OF 1410 SQ.FT. GIVING RIS E TO THE RATE OF RS. 17.73 PER SQ.FT. 32 34. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE FIN D THAT THE ASSESSEE WAS CO-OWNER OF LAND ADMEASURING 25765 SQ. FT. SITUATED AT AHMEDABAD PALACE, KOHEFIZA. BHOPAL. THIS PROPERTY W AS ACQUIRED BY THE APPELLANT AND CO-PARTNERS AS INHERITED PROPE RTY IT WAS SOLD DURING THE YEAR. WHILE WORKING OUT LONG TERM CAPIT AL GAIN ON SALE OF THIS LAND, THE ASSESSEE CLAIMED THE FAIR MARKET VAL UE AS ON 1.4.81 AT RS 100 PER SQ.FT. THE A.O. ADOPTED THE FAIR MARKET VALUE AS ON 1.4.81 AT RS.17 PER SQ. FT. THE ASSESSING OFFICER H AS ADOPTED MARKET VALUE AS ON 1.4.1981 AT RS. 17/- PER SQ.FT. ON THE BASIS OF SALE TRANSACTION DATED 23.10.1982 FOR THE PLOT OF 1410 S Q.FT. SOLD FOR CONSIDERATION OF RS. 25,000/- WHICH RESULTED IN RAT E OF RS. 17.73 PER SQ. FT. AND ACCORDINGLY WORKED OUT THE LONG TER M CAPITAL GAINS AT RS. 95,85,816/- AND THE SHARE OF THE ASSESSEE WAS W ORKED OUT AT RS. 13,69,402/-. AS THE ASSESSEE HAS SHOWN LONG TE RM CAPITAL GAINS AT RS. 77,849/-, THE ASSESSING OFFICER MADE A DDITION OF RS. 12,91,553/-. 35. AFTER APPLYING RATE OF RS. 17/- PER SQ. FT., TH E ASSESSING OFFICER HAS COMPUTED THE ADDITION ON ACCOUNT OF LONG TERM C APITAL GAINS IN THE HANDS OF 7 CO-OWNERS AS UNDER :- 33 1 PLOT/AREA (IN SQ.FT.) 23.70 2 COST OF ACQUISITION PER SQ.FT. AS ON 1.4.1981 17.00 3 TOTAL COST OF ACQUISITION AS ON 1.4.81 292.190 4 YEAR OF TRANSFER 2005-06 5 INDEXEDNCOST OF ACQUISITION 1949184 6 MARKET VALUE ON THE DATE OF TRANSFER PER SQ.FT. 500 7 TOTAL SALE CONSIDERATION 11535000 8 CAPITAL GAIN 9585816 SHARE OF CAPITAL GAIN OF CO-OWNERS 1 MOHD SHAKEEL 1369402 2 MOHD YUSUF 1369402 3 MOHD. UMAR 1369402 4 MOHD. RAFIQUE 1369402 5 MOHD. DANISH 1369402 6 MOHD. RUMMAN 1369402 7 MOHD. SHAYAN 1369402 TOTAL 9585816 THEREFORE, AS PER ABOVE TABLE, FOLLOWING ADDITIONS WERE MADE IN THE RELEVANT ASSESSMENT YEAR I.E. A.Y. 2006-07 AS LONG TERM CAPITAL GAIN :- 34 NAME OF PERSONS ACTUAL CAPITAL GAINS CAPITAL GAIN SHOWN ADDITION ON ACCOUNT OF LTCG 1 MOHD. SHAKEEL 1369402 77849 1291553 2 MOHD. YUSUF 1369402 77849 1291553 3 MOHD. UMAR 1369402 77849 1291553 4 MOHD. RAFIQUE 1369402 77849 1291553 5 MOHD. DANISH 1369402 77849 1291553 6 MOHD. RUMMAN 1369402 77849 1291553 7 MOHD. SHAYAN 1369402 77849 1291553 MOHD. DANISH, MOHD. RUMMAN & MOHD. SHAYAN ARE MINOR S AND FATHER OF THESE THREE MINORS IS MOHD. SHAFIQUE. 36. IN THE CASE OF MOHD. DANISH, MOHD. RUMMAN & MO HD. SHAYAN, ASSESSEE SUBMITTED THAT ALL OF THE ABOVE AR E MINORS AND HAVING NO INCOME. THEREFORE, INCOME OF THESE MINORS I.E. RS. 38,74,659/- (1291553 X 3) WILL BE CLUBBED AS INCOME OF THEIR FATHER SHRI MOHD. SHAFIQUE. 37. THE SUBMISSIONS OF THE ASSESSEE BEFORE THE LEA RNED CIT(A) WERE AS UNDER :- THE MINOR SONS OF THE APPELLANT MOHD. DANISH, MOHD. RUMAN AND MOHD. SHAYAN AND THEIR 4 CO-OWNERS OWNED THE PLOT AT 23070 SQ. FT. WHICH THEY HAD RECE IVED IN HIBA FROM THE APPELLANT SH. MOHD. SHAFIQUE. ALL THE 35 CO-OWNERS ESTIMATED THE MARKET VALUE AS ON 1.4.1981 AT RS. 100/- AND WORKED OUT THE SHARE OF LONG CAPITAL GAIN AT RS. 77849/- AS THE PROPERTY WAS SOLD IN THEA.Y. 2006-07 FOR THE CONSIDERATIONOF RS. 1,15,35,000/- W HICH WORKED OUT TO RS. 500 PER SQ. FT. THE LD. A.O. ADOP TED THE MARKET VALUE AS ON 1.4.1981 AT RS. 17/- ON THE BASIS OF THE SALE TRANSASCTION DATED 23.10.1982 FOR THE P LOT OF 1410 SQ. FT @ 17.73 SQ.FT. I.E. FOR THE CONSIDERATI ON OF RS. 25,000/- AND ACCORDINGLY WORKED OUT THE LONG TERM CAPKITAL GAINAT RS. 95,85,816/- AND THE SHARE OF TH E MINOR SONS OF THE APPELLANT IS RS. 41,08,206/-. S INCE THE APPELLANT HAS SHOWN THE LONG TERM CAPITAL GAIN AT RS. 2,33,547/- THE ASSESSING OFFICER MADE THE ADDIT ION OF RS. 38,74,659/- AND TAXED THE SAME AS IN NORMAL INCOME. IN THIS CONNECTION, IT IS SUBMITTED THAT T HE LAND OF THE APPELLANT AND HIS CO OWNERS WAS ON THE MAIN ROAD LEADING TO AHMEDABAD PALACE OF NAWAB AND JUST OPPOSITE OF THE FLAT HOUSE WHICH WAS AGAINST THE HO USE OF NAWAB. WHILE THE TRANSACTION CITED BY THEA.O. RE LATES TO THE SMALL PATCH OF LAND FAR BEHIND FROM THE MAIN ROAD WITH A SMALL SERVICE OF LAND. IN VIEW OF THE ABOVE , BOTH THE TRANSACTIONS CANNOT BE TREATED AS IDENTICAL AND THE MARKET VALUE AS ESTIMATED BY THE A.O. AT RS. 17/- P ER SQ.FT. IN THE YEAR 1981 IS TOO LOW. IT IS REQUESTE D THEREFORE THE MARKET VALUE AT RS. 100 PER SQ. FT. B E KINDLY ACCEPTED OR THE SAME BE KINDLY INCREASED SUITABLY FROM RS. 17/- PER SQ.FT. AND THE SHARE OF LONG TERM CAPITAL GAIN BE KINDLY WORKED OUT AND THE ADDI TION OF RS. 12,91,553/- BE KINDLY SUITABLY REDUCED. IT IS SUBMITTED THAT THE A.O. HAS LEVIED THE INCOM E TAX ON THE LONG TERM CAPITAL GAIN AT THE NORMAL RAT E. BUT THE SAME SHOULD BE @ 20% AS PER PROVISIONS OF SEC.1 12 OF THE IT ACT. THE A.O. BE KINDLY DIRECTED ACCORDIN GLY. 38. THE ACTION OF THE ASSESSING OFFICER WAS CONFIR MED BY THE CIT(A) AGAINST WHICH THE ASSESSEE IS IN APPEAL BEFO RE US. 36 39. WE HAVE CONSIDERED THE RIVAL CONTENTIONS, CAREF ULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FIN D FROM RECORD THAT SEVEN CO-OWNERS OWNED THE PLOT OF 23,070 SQ. F T WHICH THEY RECEIVED IN HIBA (GIFT) FROM THEIR FATHER, MOHD. SH AFIQUE. IN THE A.Y. 2006-07 THIS PLOT WAS SOLD FOR A CONSIDERATION OF R S. 1,15,35,000/- WHICH WORKED OUT TO RS. 500/- PER SQ. FT. WHILE WOR KING OUT THE LONG TERM CAPITAL GAINS, THE ASSESSEE HAS ESTIMATED FAIR MARKET VALUE AS ON 1.4.1981 AT RS. 100/- AND WORKED OUT TH E SHARE OF LONG TERM CAPITAL GAINS AT RS. 77,849/- SINCE THE PROPER TY WAS SOLD IN THE A.Y. 2006-07. HOWEVER, THE ASSESSING OFFICER D ID NOT AGREE WITH THE FAIR MARKET VALUE ARRIVED AT BY THE ASSESSEE AS ON 1.4.1981 AND AFTER COMPARING TRANSACTION WITH THE SALE TRANSACTI ON DATED 23.10.1982 IN RESPECT OF A PLOT OF 1410 SQ. FT. @ R S. 17.73 PER SQ. FT. I.E. FOR CONSIDERATION OF RS. 25,000/-, WORKED OUT THE LONG TERM CAPITAL GAIN AT RS. 95,85,816/- WHEREIN THE ASSESSE E WAS HAVING HIS SHARE OF RS. 13,69,402/-. THUS, WE FIND THAT AS ON 1.4.1981 THE ASSESSEE HAS TAKEN VALUE OF PLOT AT RS. 100/- PER S Q. FT. WHEREAS THE ASSESSING OFFICER HAS TAKEN IT AT RS. 17/- PER SQ.F T. BY REFERRING TO AN EXAMPLE WHICH IS NOT AT ALL COMPARABLE. THE COMP ARABLE CASE TAKEN BY THE ASSESSING OFFICER IS OF ONE SHRI GYAS HUSSAL SARAF. 37 THE PLOT WAS MEASURING 1410 SQ. FT. ONLY WHEREAS TH E ASSESSEES PLOT WAS OF 23070 SQ. FT. WE ALSO FIND THAT THE AS SESSEES PLOT WAS LOCATED BY THE SIDE OF AHMEDABAD PALACE, RESIDENCE OF ERSTWHILE RURAL OF BHOPAL ESTATE WHEREAS THE COMPARABLE CASE TAKEN BY THE ASSESSING OFFICER WAS FAR BEHIND THE PALACE. FURTHE RMORE, THE ASSESSEES PLOT WAS ON THE MAIN ROAD WHEREAS COMPAR ABLE CASE TAKEN BY THE ASSESSING OFFICER WAS FAR AWAY FROM TH E MAIN ROAD SERVED WITH SMALL SERVICE LANE. THE ASSESSEES LAN D WAS JUST OPPOSITE THE FLAG HOUSE WHEREAS THE COMPARABLE CASE TAKEN BY THE ASSESSING OFFICER WAS NOT AT ALL CONCERNED WITH THI S. THERE IS NO DISPUTE TO THE FACT THAT THE VALUE OF LAND IS ALWAY S DETERMINED AS PER ITS LOCATION WHETHER ON THE MAIN ROAD OR ON SER VICE ROAD, NEAR TO THE LAND-MARKS OR AWAY FROM LAND-MARKS. THUS, W E FIND THAT COMPARISON MADE BY THE ASSESSING OFFICER WAS NOT PR OPER AND HE HAS TAKEN THE VALUE OF PLOT WHICH WAS SITUATED AT A VERY POOR POSITION AS DISCUSSED HEREINABOVE. KEEPING IN VIEW THE LOCATION OF THE ASSESSEES PLOT WHICH WAS ON THE MAIN ROAD, JUS T OPPOSITE THE FLAG HOUSE AND BY THE SIDE OF AHMEDABAD PALACE RESI DENCE OF ERSTWHILE RURAL OF BHOPAL ESTATE, THE FAIR MARKET V ALUE OF THIS PLOT TAKEN BY THE ASSESSEE AT RS. 100/- PER SQ. FT. AS O N 1.4.1981 WAS 38 QUITE JUSTIFIED. THE APPLICATION OF METHOD OF COST INFLATION INDEX BACKWARDS ALSO SUPPORTS THE RATE OF RS. 100/- PER S Q. FT. TAKEN BY THE ASSESSEE AS ON 1.4.1981. ACCORDINGLY, THE ADDI TION MADE BY THE ASSESSING OFFICER IS HEREBY DELETED. 40. WITH REGARD TO ADDITION OF RS. 5 LACS ON ACCOUN T OF OPENING BALANCE CLAIMED DURING THE A.Y. 2001-02, THE FACTS ARE THAT DURING THE ASSESSMENT PROCEEDINGS THE APPELLANT SUBMITTED A CASH FLOW STATEMENT IN WHICH THE OPENING BALANCE AS ON 1.4.20 00 WAS SHOWN AT RS. 5,00,000/-. THE ASSESSING OFFICER ASKED THE ASSESSEE TO SUBMIT EVIDENCE IN SUPPORT OF THE SAME. IN RESPONS E THE ASSESSEE SUBMITTED BALANCE SHEET AND PROFIT AND LOSS OF EARL IER YEARS. THE ASSESSING OFFICER WAS OF THE VIEW THAT THESE BALANC E SHEETS\AND P&L ACCOUNT WERE PREPARED ONLY AFTER SEARCH WITH TH E PURPOSE TO EXPLAIN SOME UNEXPLAINED INVESTMENTS. HENCE, THE A SSESSING OFFICER REJECTED THE CLAIM OF OPENING BALANCE OF RS .5,00,000/- AND MADE AN ADDITION OF SAME AMOUNT TO THE TOTAL INCOME . 41. BY THE IMPUGNED ORDER, THE CIT(A) CONFIRMED THE ASSESSING OFFICERS ACTION AND THE ASSESSEE IS IN APPEAL BEFO RE US. 39 42. WE HAVE CONSIDERED THE RIVAL CONTENTIONS, CAREF ULLY GONE THROUGH THE MATERIAL AVAILABLE ON RECORD AND FIND T HAT THE ADDITION WAS MADE IN RESPECT OF OPENING CASH BALANCE OF RS. 5 LACS SHOWN BY THE ASSESSEE AS ON 1.4.2001. THE ASSESSEE HAS SHOW N OPENING CASH BALANCE OF RS. 5 LACS FOR THE YEAR ENDING ON 3 1.3.2001 WHICH IS REFLECTRED IN THE RECEIPTS AND PAYMENTS ACCOUNT WHICH IS ALREADY ON RECORD. THE ASSESSEE HAD INCOME FROM RENT, TRUCK PLYING AND AGRICULTURE FROM PAST MORE THAN 40 YEARS. EARLIER HE WAS HAVING INCOME FROM TRANSPORT BUSINESS. HE WAS OBTAINING C ONTRACTS FROM THE GOVERNMENT BUT HE BELIEVED THAT SINCE THE TAX H AS BEEN RECOVERED AS TDS, HE DID NOT FILE HIS IT RETURNS IN THE EARLIER YEARS. HOWEVER, HE HAD SUFFICIENT INCOME IN THE EARLIER YE ARS AS WELL. 43. AS DISCUSSED HEREINABOVE, THE ASSESSEE HAD AGR ICULTURAL LAND SINCE LAST 40 YEARS AND ALSO HAVING SUBSTANTIAL INC OME FROM OPERATION OF TRUCKS. THE ASSESSEE WAS ALSO HAVING INCOME FROM HOUSE PROPERTY SINCE LAST MANY YEARS. EVEN THOUGH THE ASSESSING OFFICER HAS NOT ACCEPTED THE INCOME FROM HOUSE PROP ERTY BUT THE SAME WAS ASSESSED AS INCOME FROM OTHER SOURCES BY D ECLINING 40 DEDUCTION CLAIMED U/S 24 BUT THE FACT REMAINS THAT THE ASSESSEE HAS DECLARED INCOME WHICH WAS ASSESSED BY THE ASSES SING OFFICER UNDER DIFFERENT HEAD. ALL THESE FACTS INDICATE THA T THE ASSESSEE COULD HAVE CASH IN HAND OF RS. 5 LACS AS ON 1.4.200 1. ACCORDINGLY, THE ASSESSING OFFICER IS DIRECTED TO DELETE THE ADD ITION OF RS. 5 LACS SHOWN AS OPENING CASH BALANCE. 44. SO FAR AS GROUND NO. 8 IS CONCERNED, IT IS NOTE D FROM RECORD THAT THE ASSESSING OFFICER DID NOT GIVE CREDIT FOR PRE-P-AID TAXES AND TDS AGAINST THE TAX PAYABLE. AFTER GOING THROUGH T HE FACTS OF THE CASE, WE ARE OF THE VIEW THAT IT IS MANDATORY TO GI VE CREDIT FOR PRE- PAID TAXES AND TDS AGAINST THE TAX PAYABLE AND DIRE CT THE ASSESSING OFFICER TO DO SO AFTER VERIFYING THE FACT UAL POSITION. 45. IN THE CASE OF MOHD. YUSUF, THE REVENUE HAS TA KEN THE FOLLOWING COMMON GROUND FOR THE A.YS. 2002-03, 2003 -04 AND 2004-05 :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(APPEAL) HAS ERRED IN DELETING THE SUBSTANTIVE ADDITION OF RS.66,24,490/- (A.Y. 2002-03), RS. 26,86,989/- (A.Y. 2003-04), RS. 6,58,332/- (A.Y. 20 04- 05) MADE BY THE ASSESSING OFFICER. 41 46. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSES SEE WAS A WORKING PARTNER OF M/S ANAND TRANSPORT COMPANY. A SEARCH AND SEIZURE OPERATION U/S 132(1) OF THE ACT WAS CARRIED OUT IN THE CASE OF MOHD. SHAFIQUE GROUP OF CASES. THE ASSESSEE IS THE SON OF MOHD. SHAFIQUE. DURING THE SEARCH AND SEIZURE OPERATION U /S 132(1) DOCUMENTS RELATING TO THE ASSESSEE WERE FOUND. AFT ER RECORDING REASONS, NOTICE U/S 153C WAS ISSUED. AGAIN A NOTICE U/S 142(1) READ WITH SECTION 153C OF THE ACT WAS ISSUED. THE RETURN OF INCOME WAS FILED U/S 153C. THE ASSESSEE, IN RESPONSE TO N OTICE U/S 153C, APPEARED BEFORE THE ASSESSING OFFICER WHEREIN HE WA S ASKED TO FURNISH CERTAIN DETAILS AS GIVEN IN THE QUESTIONNAI RE U/S 142(1) OF THE ACT. THESE DETAILS WERE SUBMITTED BY THE ASSES SEE. HOWEVER, THE ASSESSING OFFICER DID NOT ACCEPT THE SAME ON TH E GROUND THAT THIS IS THE FIRST YEAR OF FILING OF THE RETURN AND BEFORE THIS YEAR, THE ASSESSEE HAD NO INCOME. THE ASSESSING OFFICER HELD THAT SINCE THE ONLY KNOWN PERSON FROM THE PARTNERS IS MOHD. YUSUF, WHO WAS A WORKING PARTNER, THE ADDITION AS DISCUSSED IN THE O RDER OF ANAND TRANSPORT FOR THE RELEVANT ASSESSMENT YEAR WAS ADDE D TO THE TOTAL 42 INCOME OF THE ASSESSEE ON SUBSTANTIVE BASIS WHEREAS THE ADDITION WAS MADE ON PROTECTIVE BASIS IN THE CASE OF ANAND T RANSPORT. ON APPEAL, THE LEARNED CIT(A) OBSERVED THAT AS HELD BY HIM IN THE CASE OF M/S ANAND TRANSPORT COMPANY, THE INCOME OF THE F IRM WAS TO BE ASSESSED IN THE HANDS OF THE FIRM ON SUBSTANTIVE BA SIS. HE, THEREFORE, DELETED THE ADDITIONS MADE IN THE HANDS OF THE ASSESSEE ON SUBSTANTIVE BASIS. AGAINST THIS FINDING OF THE L EARNED CI(A), THE REVENUE IS IN APPEAL BEFORE US. 47. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS A ND ARE OF THE VIEW THAT SIMPLY BECAUSE THE ASSESSEE WAS A WORKING PARTNER IN M/S ANAND TRANSPORT COMPANY, IT CANNOT BE HELD THAT INCOME EARNED BY PARTNERSHIP FIRM M/S ANAND TRANSPORT COMP ANY BELONGED TO THE ASSESSEE. NO OTHER MATERIAL OR EVI DENCE HAS BEEN BROUGHT ON RECORD BY THE ASSESSING OFFICER FOR TREA TING THE INCOME EARNED BY FIRM AS INCOME OF ASSESSEE IN HIS INDIVID UAL CAPACITY. WITHOUT BRINGING SUFFICIENT EVIDENCE ON RECORD, NO ADDITION COULD BE MADE IN THE HANDS OF THE ASSESSEE ON SUBSTANTIVE BA SIS. AS THE CIT(A) HAS CONFIRMED THE ADDITION ON SUBSTANTIVE BA SIS IN THE 43 HANDS OF PARTNERSHIP FIRM M/S ANAND TRANSPORT COMPA NY, WE, THEREFORE, CONFIRM THE ORDER OF THE LEARNED CIT(A) AND ACCORDINGLY DISMISS THIS COMMON GROUND OF APPEAL FOR ALL THE AS SESSMENT YEARS INVOLVED. 48. FINALLY, THE APPEALS OF THE ASSESSEE ARE ALLOWE D IN PART, IN TERMS INDICATED HEREINABOVE WHEREAS APPEALS OF THE REVENUE ARE DISMISSED. THIS ORDER WAS PRONOUNCED ON 31.1.2013 SD/- SD/- (R.C.SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 31.1.2013 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, GU ARD FILE DN/-3030.11 2828 2829.1 6,7,8.10.\2 44