The ACIT, Mehsana Circle, Mehsana V. Shri Manibhai V.Patel, Mehsana

ITSSA 35/AHD/2006

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 9650 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 year(s) 10 month(s) 6 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 17-12-2013
• Appeal Filed By: Department
• Bench Allotted: C
• Next Hearing Date: 19-12-2012
• Assessment Year: misc
• Appeal Filed On: 10-02-2006
• Court: TRIBUNAL
• Keywords: Unexplained investment; Corroborative evidences; Block assessment
• Section: 143(3); 131; 132

Judgement Text

, , , , LH LHLH LH IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI T. R. MEENA, ACCOUNTANT MEMBER ITA NO. 905/AHD/2006 AY 2001-02 ITA NO. 906/AHD/2006 AY 2001-02 ITA(SS) NO. 35/AHD/2006 BLOCK PERIOD 01.04.1990 TO 20.10.2000 ACIT, MEHSANA CIRCLE, MEHSANA SH. MANIBHAI VIRCHAND PATEL, MEHSANA PAN: AHKPP8276C APPELLANT RESPONDENT CROSS OBJECTION NO. 86/AHD/2006 BLOCK PERIOD 01.04.1990 TO 20.10.2000 SH. MANIBHAI VIRCHAND PATEL, MEHSANA PAN: AHKPP8276C ACIT, MEHSANA CIRCLE, MEHSANA APPELLANT RESPONDENT REVENUE BY : SH. D.C. PATWARI WITH SH. SHANKAR LAL MEENA, DR ASSESSEE(S) BY : SHRI S.N. DIVETIA WITH SH. ANIL K HATRIYA, AR / // / DATE OF HEARING : 19/09/2013 !' / DATE OF PRONOUNCEMENT: 17/12/2013 #$/ O R D E R PER BENCH : 1. THESE THREE APPEALS AND ONE CROSS-OBJECTION ARE CONNECTED, HENCE A CONSOLIDATED ORDER IS HEREBY PASSED. A. ITSS/35/AHD/2006 FOR THE BLOCK PERIOD 01.04.990 TO 20.10.2000. 2. THIS APPEAL HAS BEEN FILED AGAINST THE ORDER OF CIT(A)-XXI DATED 30.11.2005. ITA NO S.905/AHD/2006,906/AHD/2006, ITA(SS) 35/AHD/2006 & CO NO. 86/AHD/2006 ACIT, MEHSANA CIRCLE VS. MANIBHAI V. PATEL AYS 2001-02 & 1.4.90 TO 20.10.2000 - 2 - 3. GROUND NO.1 OF THE REVENUE IS REPRODUCED BELOW: THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIR ECTING TO DELETE THE ADDITION OF RS 1,05,00,000/- MADE BY THE A.O. U /S 158BD. 4. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT YEAR PASSED U/S 158BD READ WITH SECTION 143(3) DATED 30. 12.2004 WERE THAT CONSEQUENT UPON A SEARCH U/S 132 DATED 20 .10.2000 CONDUCTED IN THE CASE OF MASTER GROUP AN ACTION W AS TAKEN AGAINST THIS ASSESSEE BY ISSUING NOTICE U/S 158BD R EAD WITH SECTION 158BC. THE ASSESSEE HAS CONTESTED BEFORE T HE AO THAT THE SATISFACTION WAS WRONGLY RECORDED BECAUSE THE ASSES SEE IS NOT THAT PERSON WHOSE NAME IS NOTE IN THE IMPUGNED DIARY. I N THIS CONNECTION, THE ASSESSEE HAS MENTIONED A STATEMENT/ AFFIDAVIT OF THE SAID ACCOUNTANT NAMELY SH. ARVINDBHAI A. SHAH WHO H AS STATED THAT THE NAME MENTIONED ON PAGE NO. 145 OF THE DIAR Y HAS MANIBHAI PATEL APOLLO WAS NOTED WITHOUT ANY DEFI NITE KNOWLEDGE ABOUT THE SAID PERSON. HOWEVER, THE A.O. HAS REJECTED THAT CONTENTION AND MADE THE ADDITION IN THE FOLLOW ING MANNER: IN THE ABOVE SUBMISSION DATED 23.12.2004, THE ASSES SEE HAS PLEADED THAT IN ANSWER NO. 14 OF HIS STATEMENT DATE D 20.10.2000 SHRI ARVINDBHAI A. SHAH HAS CATEGORICALL Y STATED THAT THE PARTICULARS APPEARING ON PRINTED PAGE NO. 60 TO 285 ARE DIFFERENT PARTIES TO WHOM FINANCE HAVE BEEN GIV EN BY THEIR GROUP AND THERE PROPOSED ACTION TO ADD THE NE GATIVE PEAK IS DEVOID OF ANY MERIT AND NOT PERMISSIBLE AS THE REFERRED PAGE IN HIS CASE IS FALLING IN THIS CATEGO RY AND THEREFORE THE SOURCE OF SAME IS PROVED AND ESTABLIS HED, IT IS ITA NO S.905/AHD/2006,906/AHD/2006, ITA(SS) 35/AHD/2006 & CO NO. 86/AHD/2006 ACIT, MEHSANA CIRCLE VS. MANIBHAI V. PATEL AYS 2001-02 & 1.4.90 TO 20.10.2000 - 3 - MENTION THAT IT IS TRUE THAT SHRI ARVINDBHAI A. SHA H HAS STATED IN HIS STATEMENT THAT PARTICULARS APPEARING ON PRINTED PAGE NO. 60 TO 285 ARE DIFFERENT PARTIES TO WHOM FINANCE HAVE BEEN GIVEN BY THEIR GROUP. FURTHER SU BSTANTIVE ADDITION HAS BEEN MADE IN THE HANDS OF SHRI JIVRAJB HAI V. DESAI IN HIS BLOCK ASSESSMENT WITH REGARD CONTENTS OF LOAN TRANSACTIONS MENTIONED ON PAGE NO. 145 OF THE ABOVE SEIZED DIARY. AGAIN ADDITIONS MADE ON SUBSTANTIVE BASIS I N THE CASE OF SHRI JIVRAJBHAI MASTER ON THE BASIS OF ABOV E SEIZED DIARY HAVE BEEN CONFIRMED BY THE CIT(A) ALSO-AND TH E ASSESSEE HAS PREFERRED SECOND APPEAL TO ITAT AGAINS T THE DECISIONS OF CIT(A). HOWEVER, IT IS NECESSARY THAT NEGATIVE PEAK OF RS 1,05,00,000/- BE MADE IN THE HANDS OF AS SESSEE (I.E. SHRI MANIBHAI V. PATEL) ON PROTECTIVE BASIS I N VIEW OF THE FOLLOWING ACTS. IT IS UNDISPUTED FACT THAT DIARY MARKED AS ANNEXUR E A-1 HAS BEEN SEIZED FROM THE PREMISE OF SHRI ARVINDBHAI A. SHAH AND ON PAGE NO. 145 (PRINTED PAGE NO. 208) OF SUCH DIARY ACCOUNTS MANIBHAI PATEL APOLLO IS APPEARING. ON THE BASIS OF EVIDENCE AND FACTS OF THE CASE, IT IS FULL Y ESTABLISHED THAT MANIBHAI V. PATEL-APOLL STANDS FRO SHRI MANI BHAI V. PATEL AND HE IS THE PERSON WITH WHOM SHRI JIVRAJBHA I HAS DONE THE TRANSACTIONS. IT IS FURTHER STATED THAT S UBSTANTIVE ADDITION HAS BEEN MADE IN THE CASE OF SHRI JIVRAJBH AI V. DESAI IN HIS BLOCK ASSESSMENT AND THIS ADDITION HAS BEEN CONFIRMED BY CIT(A). HOWEVER, SHRI JIVRAJBHAI MASE R HAS PREFERRED FURTHER APPEAL BEFORE ITAT. IN CASE, IF SUBSTANTIVE ADDITION MADE IN THE HANDS OF SHRI JIVRAJBHAI V. DE SAI DOES ITA NO S.905/AHD/2006,906/AHD/2006, ITA(SS) 35/AHD/2006 & CO NO. 86/AHD/2006 ACIT, MEHSANA CIRCLE VS. MANIBHAI V. PATEL AYS 2001-02 & 1.4.90 TO 20.10.2000 - 4 - NOT SUSTAIN, THEN IT IS OBVIOUS THAT THIS INCOME MU ST BE ADDED IN THE HANDS OF ASSESSEE. IN VIEW OF THESE FACTS T HE PEAK DEBIT BALANCE OF RS 1,05,00,000/- IS HEREBY ADDED O N PROTECTIVE BASIS AS UNDISCLOSED INCOME OF THE ASSES SEE. 5. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER BEFORE THE FIRST APPELLATE AUTHORITY. 5.1 BEFORE THE LEARNED CIT(A), THE CONTENTION OF TH E ASSESSEE WAS THAT THE NEGATIVE PEAK OF RS 1,05,00,000/- SHOULD NOT BE ADDED PROTECTIVELY IN MY HAND BECAUSE SUBSTANTIA L ADDITIONS HAVE BEEN MADE IN THE CASE OF JIVRAJBHAI DESAI AND THAT BEFORE THE ITAT HE HAS TAKEN A PLEA THAT T HESE ADDITIONS SHOULD BE DATED. IN THIS REGARD THE SUBM ISSIONS MADE IN PARAGRAPH 2 ABOVE ARE AGAIN REITERATED AND RELIED UPON. FURTHER MORE, IN SUPPORT OF MY CONTENTION THAT I AM NOT THE PERSON REFERRED IN THE ALLEGED DIARY AND THAT THE S AID SUMS ARE TRANSFERRED BY ME. I RELY ON THE DEPOSITIONS G IVEN BY SHRI ARVINDBHAI AMRITLAL SHAH BEFORE YOUR HONOUR. I, THEREFORE, ONCE AGAIN SAY AND STATE THAT IN VIEW OF ABOVE ALL, THE PROCEEDINGS INITIATED AGAINST ME ARE TOTALLY MISCONCEIVED. AS THE PERSON REFERRED IN THE DIARY IS NOT MYSELF AND THERE IS NO MATERIAL ON RECORD TO HOLD A ND ESTABLISH THAT THE SAID MANIBHAI PATEL IS MYSELF. IT IS PERTINENT TO MENTION HERE THAT A THOROUGH SEARCH IN THE CASES OF MASTER GROUP WAS CARRIED OUT AND AN NO OTH ER CORROBORATIVE EVIDENCE TO IMPLICATE ME WAS FOUND OR SEIZED FROM ANY OF THE CONNECTED PERSONS. HAD IT BEEN THE CASE ITA NO S.905/AHD/2006,906/AHD/2006, ITA(SS) 35/AHD/2006 & CO NO. 86/AHD/2006 ACIT, MEHSANA CIRCLE VS. MANIBHAI V. PATEL AYS 2001-02 & 1.4.90 TO 20.10.2000 - 5 - THAT SUCH HUGE SUM WAS ADVANCED IN THE NATURE OF SH ARAFFI TRANSACTION, THEN OTHER CORROBORATIVE EVIDENCES IN THE FORM OF PROMISSORY NOTE, OR SOME SCRUTINY MIGHT HAVE ALS O BEEN FOUND. THERE IS NO WHISPER OF SUCH THING IN THE AS SESSMENT PROCEEDINGS. I THEREFORE CALL UPON YOU TO PROVIDE ME WITH THE MATERIAL AVAILABLE ON RECORD, WHICH PROVES THAT THE SAID PERSON AND ALLOW ME TO SUBMIT IN REBUTTAL INSTEAD O F TAKING ANY UNILATERAL DECISION WITHOUT AFFORDING SUCH OPPO RTUNITY AT THIS STAGE AND COMPEL ME TO FIGHT IT OUT IN THE APPELLATE PROCEEDINGS. 5.2 THE LEARNED CIT(A) HAS ACCEPTED THE CONTENTION OF THE ASSESSEE AND DELETED THE ADDITION AS FOLLOWING: I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT AND PERUSED THE FACTS OF THE CASE. THE CONTENTION OF T HE APPELLANT THAT NO PROTECTIVE ASSESSMENT OF THE AMOU NT ADDED IN THE CASE OF OTHER PERSON SHRI JIVRAJBAI DESAI CA N BE MADE IN THE CASE OF THE APPELLANT APPEARS TO BE ACCEPTAB LE. FURTHER, I FIND THAT AS STATED IN THE ASSESSMENT OR DER ALSO, THE ADDITION OF RS 1,05,00,000/- OF THE TOTAL AMOUN T OF TRANSACTIONS APPEARING ON PAGE 145 OF THE SEIZED DI ARY REFERRED TO IN THE ORDER HAS ALREADY BEEN ADDED IN THE CASE OF SHRI JIVRAJBHAI MASTER AND THIS ADDITION AS MENT IONED BY THE ASSESSING OFFICER HIMSELF HAS BEEN CONFIRMED BY THE CIT(A) IN THE CASE OF JIVRAJBHAI DESAI. I THEREFOR E, HOLD THAT THE ADDITION OF RS 1,05,00,000/-ON PROTECTIVE BASIS IN THE CASE OF THE APPELLANT IS NOT JUSTIFIED AND THER EFORE SAME IS DELETED. ITA NO S.905/AHD/2006,906/AHD/2006, ITA(SS) 35/AHD/2006 & CO NO. 86/AHD/2006 ACIT, MEHSANA CIRCLE VS. MANIBHAI V. PATEL AYS 2001-02 & 1.4.90 TO 20.10.2000 - 6 - 5.3 HAVING HEARD THE SUBMISSION OF BOTH THE SIDES A ND AFTER PRONOUNCING OUR VIEW IN THE CASE OF SH. JIVRAJ DESA I WERE HEREBY HOLD THAT THERE WAS NO LEGAL BASIS FOR THE A .O. TO ASSESS THE IMPUGNED AMOUNT IN THE HANDS OF THE ASSE SSEE MERELY ON PROTECTIVE BASIS. WE THEREFORE HOLD THAT IN THE LIGHT OF THE VIEW TAKEN BY US IN THE CASE OF JIVRAJ DESAI, THE IMPUGNED PROTECTIVE ADDITION DONT SURVIVE IN THE C ASE OF THIS ASSESSEE. THE VIEW TAKEN BY THE LEARNED CIT(A ) IS HEREBY CONFIRMED. 5.4 THIS GROUND OF THE REVENUE IS THEREFORE DISMISS ED. 6. GROUND NO. 2 RAISED BY THE REVENUE IS AS FOLLOWS : THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIR ECTING TO DELETE THE ADDITION OF RS 3,52,000/- MADE BY THE A. O. U/S 158BD BEING TREATED AS INTEREST PAYMENT NOT FROM DI SCLOSED SOURCES. 7. THE IMPUGNED ADDITION OF INTEREST IS CONSEQUENTI AL IN NATURE. ACCORDING TO US, THE LEARNED CIT(A) HAS RIGHTLY DEL ETED THIS ADDITION AS WELL. THE RELEVANT PORTION OF THE ORDE R OF LEARNED CIT FOR READY REFERENCE IS REPRODUCED BELOW: THE FACTS AS PER THE ASSESSMENT ORDER AS UNDER: IT IS FURTHER STATED THAT SINCE THE ASSESSEE HAS T AKEN THE AMOUNTS OF LOAN FROM SHRI JIVRAJBHAI MASTER IN CASH AND HAS REPAID THE SAME ALONG WITH AMOUNTS OF INTEREST IS NOT FROM DISCLOSED SOURCES AND THEREFORE ADDITION OF RS ITA NO S.905/AHD/2006,906/AHD/2006, ITA(SS) 35/AHD/2006 & CO NO. 86/AHD/2006 ACIT, MEHSANA CIRCLE VS. MANIBHAI V. PATEL AYS 2001-02 & 1.4.90 TO 20.10.2000 - 7 - 3,52,000/- IS MADE IN THE HANDS OF ASSESSEE ON SUBS TANTIVE BASIS FOR THE ABOVE BLOCK PERIOD. IN THIS REGARD THE APPELLANT STATED THAT FOR RS 3, 52,000/- ON PAGE NO. 145 THE NARRATION IS HAVALA INTEREST. I T WAS CONTENDED THAT FROM THE ABOVE NARRATION, IT IS CLEA R THAT THE ABOVE TRANSACTION DOES NOT SHOW ANY KIND OF CASH TRANSACTIONS MADE. I HAVE CONSIDERED THE SUBMISSIONS F THE APPELLANT AND PERUSED THE FACTS OF THE CASE. IT IS CLEAR THAT TH E ENTRY OF RS 3,52,000/- AS APPEARING ON PAGE NO. 146 OF THE SEIZ ED DIARY CONTAINS THE NARRATION OF HAVALA INTEREST AND THE REFORE I AGREE WITH THE CONTENTION OF THE APPELLANT THAT THI S DOES NOT REPRESENT CASH TRANSACTION OF ANY TYPE. THEREFORE, THE ADDITION OF THIS AMOUNT OF RS 3,52,000/- IS NOT JUS TIFIED. HENCE, ADDITION OF RS 3,52,000/- IS DELETED. 8. THE VIEW TAKEN BY THE LEARNED CIT(A) IS HEREBY C ONFIRMED AND THIS GROUND OF THE REVENUE IS DISMISSED AS WELL. B. CROSS OBJECTION NO. 86/AHD/2006 9. THE ASSESSEE HAS FILED CROSS OBJECTION NO. 86/AH D/2006 AND THE OBJECTIONS ARE AS FOLLOWS: 9.1 THE LD. CIT(A)-XXI, AHMEDABAD HAS ERRED IN NOT APPRECIATING THE PECULIAR FACTS AND CIRCUMSTANCES O F THE APPELLANTS CASE AND THEREBY ALSO ERRED IN LAW IN D ISMISSING THE APPELLANTS GROUND NO. 1 THAT INITIATION OF PRO CEEDINGS ITA NO S.905/AHD/2006,906/AHD/2006, ITA(SS) 35/AHD/2006 & CO NO. 86/AHD/2006 ACIT, MEHSANA CIRCLE VS. MANIBHAI V. PATEL AYS 2001-02 & 1.4.90 TO 20.10.2000 - 8 - U/S 158BD IN THE CASE BY THE ASSESSING OFFICER IS B AD IN LAW. 9.2 IN VIEW OF GROUND NO. 1, IT MAY BE HELD THAT TH E APPELLANT IS NOT THE PERSON MENTIONED IN THE DIARY AND THEREFORE INITIATION OF PROCEEDINGS U/S 158BD IN THE CASE OF APPELLANT I S ALSO BAD IN LAW AND AS SUCH THE CONSEQUENT ORDER OF ASSE SSMENT IS ANNULLED, QUASHED AND SET ASIDE IN FULL. 10. THE MAIN CONTENTION OF THE LEARNED AR OF THE AS SESSEE IS THAT THERE WAS NO SATISFACTION OF THE REVENUE DEPARTMENT IN TH E CASE OF THIS ASSESSEE THAT THERE WAS AN ELEMENT OF UNDISCLOSED I NCOME. IN THIS REGARD, OUR ATTENTION HAS BEEN DRAWN TO A CONFIDENT IAL OFFICE LETTER DATED 29.10.2002 ADDRESSED TO ACIT, MEHSANA CIRCLE WHEREIN ON THE LAST PAGE IT WAS NOTED AS UNDER: SUB: INTIMATION OF SATISFACTION FOR INITIATING PR OCEEDINGS U/S 159BD CONNECTED TO THE MASTER GROUP OF CASES DA TE OF SEARCH 20.10.2000. MANIBHAI PATEL, APOLLO PAN NO. AHKPP8276C ASSESSED UNDER MEHSANA RANGE, UNDER CIT- GANDHINAGAR, CCIT-IV, ABAD OFFICIAL ADDRESS: APPOLO ORGANIZERS AND BUILDERS, APPOLO ENCLAVE BLDG., OPP. JAINTEMPLE HIGHWAY, MEHSANA- 384002. DEBIT ENTRIES/ DEBIT BALANCES ITA NO S.905/AHD/2006,906/AHD/2006, ITA(SS) 35/AHD/2006 & CO NO. 86/AHD/2006 ACIT, MEHSANA CIRCLE VS. MANIBHAI V. PATEL AYS 2001-02 & 1.4.90 TO 20.10.2000 - 9 - ON THE BASIS OF THE SEIZED MATERIAL AND POST SEARCH ENQUIRY IT IS ESTABLISHED HAT THE SHARAFI TRANSACTIONS NOTE D IN DIARY A PERTAIN TO MASTER GROUP. THE DEBIT BALANCES REFLEC TED IN THE LEDGER ACCOUNTS IN A-1 ARE THUS CASH LOANS FORWARDE D BY MASTER GROUP TO THESE PERSONS. THESE SHARAFI LOANS ARE FI NANCED FROM UNDISCLOSED INCOME OF THE MASTER GROUP THUS THE DEB IT BALANCES HAVE BEEN COVERED IN THE ASSESSMENT OF MASTER GROUP . THE ONLY POSSIBLE ACTION IN THE CASES OF THE PARTIE S HAVING DEBIT ENTRIES/DEBIT BALANCES IS U/S 269SS OF THE I. T. ACT. HOWEVER, AS PER THE DECISION OF THE SUPREME COURT IN THE CAS E OF ASSTT. DIRECTOR OF INSPECTION VS. KUM. A.B. SHANTI 255 ITR 258 PROCEEDINGS U/S 269SS IN THESE CASES MAY NOT SUSTAI N. THIS VIEW IS ALSO REINFORCED BY THE CIRCULAR NO. 387 DTD. 6.7 .1984. AS PER THE ABOVE MENTIONED CIRCULAR, THE PROVISIONS OF SECTION 269SS ARE ATTRACTED ONLY IN CASES WHEN UNAC COUNTED CASH FOUND DURING SEARCH IS EXPLAINED BY CASH LOANS FROM DIFFERENT PARTIES. IN THE PRESENT CASE, NO SEARCH HAS BEEN C ONDUCTED ON THE PARTIES IN WHOSE ACCOUNTS DEBIT BALANCES ARE OCCURR ING FURTHER, EVEN THE VERACITY OF THE LOANS REPRESENTED BY DEBIT BALANCES IS NOT SUSPECT, AS FROM THE SEIZED MATERIAL ITSELF THE SOU RCE OF THESE LOANS IS ESTABLISHED TO BE UNDISCLOSED INCOME OF THE MAST ER GROUP. 11. ALTHOUGH THE LEARNED AR HAS VEHEMENTLY CHALLENG ED PROCEEDINGS U/S 158BD BUT IN THE LIGHT OF THE RELIEF ALREADY GR ANTED IN RESPECT OF THE QUANTUM ADDITION, WE DEEM IT JUSTIFIABLE NOT TO ADJUDICATE THIS LEGAL CONTROVERSY. ONCE THE ASSESSEE HAS ALRE ADY BEEN GIVEN THE RELIEF IN RESPECT OF THE QUANTUM ADDITION, THEN NO GRIEVANCE IS LEFT ANY MORE. ANY ADJUDICATION ON THIS LEGAL GROU ND SHALL BE A ITA NO S.905/AHD/2006,906/AHD/2006, ITA(SS) 35/AHD/2006 & CO NO. 86/AHD/2006 ACIT, MEHSANA CIRCLE VS. MANIBHAI V. PATEL AYS 2001-02 & 1.4.90 TO 20.10.2000 - 10 - FUTILE EXERCISE. RESULTANTLY, THIS CROSS-OBJECTION IS HEREBY DISMISSED BECAUSE IT HAS BECOME REDUNDANT. IN THE RESULT, THE REVENUES APPEAL AND THE CORRESP ONDING CROSS- OBJECTION OF THE ASSESSEE BOTH ARE DISMISSED. C. ITA NO. 905/AHD/2006 & ITA NO. 906/AHD/2006 (AY 2001-02) 12. THESE TWO APPEALS HAVE BEEN FILED BY THE REVENU E ARISING FROM THE ORDER OF CIT(A)-XXI, AHMEDABAD BOTH DATED 25.01.200 6. THE REVENUE HAS RAISED GROUNDS RESPECTIVELY IN THESE TW O APPEALS AS FOLLOWS: 12.1 THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS O F THE CASE IN DIRECTING TO DELETE THE PENALTY OF RS 1,05,00,000/- LEVIED U/S 271D OF THE I.T. ACT. 12.2 THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS O F THE CASE IN DIRECTING TO DELETE THE PENALTY OF RS 53,52,900/- L EVIED U/S 271E OF THE I.T. ACT. 13. AN ORDER U/S 271D AND AN ORDER U/S 271E WAS PAS SED BY THE A.O. ON 28.06.2005. IN RESPECT OF THE PROVISIONS OF SEC TIONS 269(SS), THE A.O. HAS NOTED THAT THE FOLLOWING TRANSACTIONS OF LOAN WERE IN CASH: AMOUNTS DATE RS 50,00,0000 06/07/2000 RS 35,00,000 07/07/2000 RS 5,00,000 07/07/2000 RS 15,00,000 08/07/2000 ITA NO S.905/AHD/2006,906/AHD/2006, ITA(SS) 35/AHD/2006 & CO NO. 86/AHD/2006 ACIT, MEHSANA CIRCLE VS. MANIBHAI V. PATEL AYS 2001-02 & 1.4.90 TO 20.10.2000 - 11 - 13.1 IN RESPECT OF THE DEFAULT U/S 269(T) FOR REPAY MENT OF LOAN IN CASH, THE DETAILS OF THE TRANSACTIONS AS PER A.O. W ERE AS UNDER: AMOUNTS DATE RS 50,00,0000 11/09/2000 RS 3,52,900 30/09/2000 14. FOR BOTH THE ALLEGED DEFAULTS, THE MAIN CONTENT ION OF THE ASSESSEE WAS THAT THE ALLEGATION OF CASH TRANSACTION WAS BAS ELESS. RATHER, THE SUBSTANTIVE ADDITION WAS MADE IN THE CASE OF JI VRAJBHAI MASTER AND IT WAS HELD THAT THE ENTRIES IN THE ALLEGED DIA RY BELONGED TO HIM. ONLY A PROTECTIVE ADDITION WAS MADE IN THE HA NDS OF THE ASSESSEE. IT HAS ALSO BEEN CONTESTED THAT THE NAME MENTIONED IN THE DIARY DID NOT PERTAIN TO THE ASSESSEE BECAUSE THE A SSESSEE WAS NOT THE PERSON WHOSE NAME WAS NOTED IN THE DIARY. ACCO RDING TO THE ASSESSEE, IT WAS A CASE OF WRONG IDENTITY. HENCE, NO PENALTY SHOULD BE LEVIED ON HIM. HOWEVER, THE A.O. WAS NOT CONVINCED AND REJECTED ALL THESE CONTENTIONS AND THEREAFTER L EVIED PENALTY OF RS 1,05,00,000/- U/S 269(SS) OF I.T. ACT AND ANOTHE R PENALTY OF RS 53,52,900/- U/S 269(T) OF I.T. ACT WAS IMPOSED. 14.1 THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE A UTHORITY WHO HAS EXAMINED THE FACTS OF THE CASE IN DETAILS A ND THEREAFTER GRANTED RELIEF IN THE FOLLOWING MANNER: I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT AND PERUSED THE FACTS OF THE CASE. THE CONTENTS OF PAG E NO. 145 OF THE IMPUGNED SEIZED DIARY ARE AS UNDER: MANIBHAI PATEL APPOLO CREDIT DEBIT DATE ITA NO S.905/AHD/2006,906/AHD/2006, ITA(SS) 35/AHD/2006 & CO NO. 86/AHD/2006 ACIT, MEHSANA CIRCLE VS. MANIBHAI V. PATEL AYS 2001-02 & 1.4.90 TO 20.10.2000 - 12 - 5000/- 5,000/- 6-7-2000 3,500/- 7.7.2000 500/- 7.7.2000 1,500/- 8.7.2000 352/- HAVALA 30.9.2000 FROM THE PERUSAL OF THIS PAGE NO. 145, IT IS CLEAR THAT IT DOES NOT BEAR DETAILS OF THE ADDRESS OR TELEPHONE NUMBER OF THE PERSON REFERRED TO IN THIS PAGE. THIS DIARY WAS SEIZED FROM ARVIND A. SHAH, ACCOUNTANT OF MASTER GROUP FROM HIS RESIDENCE AT B-3, SULABH FLAT , NEAR MEERAMBICA HIGH SCHOOL, NARANPURA WHICH IS SITUATED IN AHMEDAB AD. I FIND THAT THE CONTENTS OF THE ABOVE PAGE OF THE SEIZED DIARY DOES NOT IN ANY WAY HINT THAT THE APPELLANT IS THE PERSON WHOSE NAME IS MENT IONED THEREIN. WHEN THE ABOVE DIARY HAS BEEN SEIZED FROM AHMEDABAD AND PAGE NO. 145 BEARING THE NAME OF MANIBHAI PATEL DOES NOT HAVE AN Y OTHER NARRATION ABOUT THE ADDRESS OR TELEPHONE NUMBER, THE LINKING OF THAT PAPER TO THE APPELLANT ON FLIMSY GROUND AND SO WITHOUT LYING ANY FURTHER EVIDENCE ON RECORD IS NOT JUSTIFIED. FURTHER, AS MENTIONED BY THE ADDL. CIT HIMSELF, IN AFFIDAVIT FILED DURING THE COURSE OF BLOCK ASSESSME NT PROCEEDINGS IT HAS BEEN CLEARLY STATED BY SHRI ARVIND A. SHAH AS UNDER : THOUGH SHRI ARVIND A SHAH IN HIS STATEMENT RECORDE D U/S 131 OF THE I.T. ACT AT THE TIME OF CROSS EXAMINATION ON 21 .12.2004 HAS SQUARELY DENIED THAT THE TRANSACTIONS OF PAGE NO. 145 OF THE SEIZED DIARY PERTAIN OR RELATE TO THE APPELLANT. IN THE AFFIDAVIT SHRI ARVIND A SHAH AGAIN EXPRESSLY STATED THAT THE APPELLANT IS NOT THE PERS ON MENTIONED ON PAGE NO. 145 OF THE SEIZED DIARY (ANNEXURE A-1), I FIND THAT THE ADDL. CIT DID NOT CROSS EXAMINE HIM. IN THIS SITUATION THE PRESUMPTION THAT THE APPELLA NT IS THE SAME PERSON WHOSE NAME IS MENTIONED ON PAGE NO. 145 OF T HE SEIZED DIARY APPEARS TO BE WITHOUT ANY PROPER BASIS. EXCEPT THI S SEIZED DIARY THERE IS NO OTHER MATERIAL ON RECORD WHICH LINK OR HINT THE TRANSACTIONS ITA NO S.905/AHD/2006,906/AHD/2006, ITA(SS) 35/AHD/2006 & CO NO. 86/AHD/2006 ACIT, MEHSANA CIRCLE VS. MANIBHAI V. PATEL AYS 2001-02 & 1.4.90 TO 20.10.2000 - 13 - ENUMERATED ON PAGE NO. 145 OF THE SEIZED DIARY, TO THE APPELLANT. THERE IS NOTHING ON RECORD NOT EVEN ANY KIND OF STATEMENT OF SHRI JIVRAJBHAI MASTER WHO ACTUALLY HAS CARRIED OUT THE TRANSACTION S MENTIONED ON PAGE NO. 145 OF DIARY A-1 TO STATE THE FACT THAT THE PER SON MENTIONED THEREIN IS THE APPELLANT. A COPY OF ASSESSMENT ORDER FOR THE AY 91-92 IN THE CASE OF APPELLANT HAS BEEN FILED BEFORE ME. ON PERUSAL OF THIS ASSESSMENT ORDER, IT IS NOTED THAT THE NAME OF THE APPELLANT MENTIONE D IS SHRI MANIBHAI VIRCHANDDAS PATEL AND ADDRESS GIVEN IS HIGHWAY, MEH SANA. AS POINTED OUT EARLIER THAT PAGE NO. 145 OF THE SEIZED DIARY M ENTIONS THE NAME OF PERSONS ONLY AS MANIBHAI PATEL, SO IT IS CLEAR TH AT THE ADDL. CIT IS NOT ABLE TO ESTABLISH THAT THE APPELLANT IS THE PERSON WHOSE NAME IS APPEARING ON THE PAGE NO. 145 OF THE SEIZED DIARY. IN VIEW OF THIS, I HOLD THAT THEREFORE, PENALTY LEVIED U/S 271D OF THE I.T. ACT IS NOT JUSTIFIED. 14.2 ON IDENTICAL FACTS AS WELL AS ASSIGNING THOSE FROM VERY REASONS WHILE DECIDING THE PENALTY U/S 271D, ON THE SAME LINE, THE LEARNED CIT(A) HAS DELETED THE PENALTY U/ S 271E OF I.T. ACT. 15. WE HAVE HEARD BOTH THE SIDES. WE PERUSED THE M ATERIAL PLACED BEFORE US. AS FAR AS THE PENALTIES IN QUESTION ARE CONCERNED, WE HAVE NOTED THAT ALTHOUGH THE REVENUE DEPARTMENT HAD PROCEEDED TO TAX THE AMOUNT AS UNEXPLAINED INVESTMENT IN THE HAN DS OF THE ASSESSEE BUT THE REVENUE DEPARTMENT WAS UNDER CONFU SION. HENCE, A PROTECTIVE ADDITION WAS MADE. NOW, THE TRIBUNAL HAS DELETED THE PROTECTIVE ADDITION ON THE BASIS OF THE EVIDENCES G ATHERED, IN THE CASE OF JIVRAJ V. DESAI (IT(SS) 99 & 106/AHD/20104) , ORDER PASSED BY ITAT, C BENCH, AHMEDABAD. EVEN THE IDE NTITY OF THE ITA NO S.905/AHD/2006,906/AHD/2006, ITA(SS) 35/AHD/2006 & CO NO. 86/AHD/2006 ACIT, MEHSANA CIRCLE VS. MANIBHAI V. PATEL AYS 2001-02 & 1.4.90 TO 20.10.2000 - 14 - PERSON WAS HEAVILY CONTESTED BY THIS ASSESSEE. WE FIND NO FALLACY IN THE ORDER OF THE LEARNED CIT(A). HIS ORDER IS P ASSED UPON COGENT MATERIAL AND OTHER SURROUNDING CIRCUMSTANCES THROUGH WHICH HE OPENED THAT IT WAS NOT A FIT CASE TO LEVY THE IMPUGNED PENALTIES. FINDINGS ON FACTS ARE HEREBY APPROVED A ND GROUNDS OF APPEAL OF REVENUE ARE DISMISSED. 16. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE COURT ON TUESDAY, THE 17 TH OF DECEMBER, 2013 AT AHMEDABAD. (T. R. MEENA) ACCOUNTANT MEMBER (MUKUL KR. SHRAWAT) JUDICIAL MEMBER AHMEDABAD; DATED 17/12/2013 GHANSHYAM MAURYA, SR. P.S. TRUE COPY #$ %& '#&' #$ %& '#&' #$ %& '#&' #$ %& '#&'/ COPY OF THE ORDER FORWARDED TO : 1. () / THE APPELLANT 2. %*() / THE RESPONDENT. 3. ++ , / CONCERNED CIT 4. ,() / THE CIT(A)-III, AHMEDABAD 5. &/0 % , , / DR, ITAT, AHMEDABAD 6. 012 3 / GUARD FILE. #$ #$ #$ #$ / BY ORDER, 4 44 4/ // / +5 +5 +5 +5 ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD