THE DCIT, CIRCIE.1(2), Ahmedabad V. Shri Kawaljeetsingh P.Chhabda L/h of late Pradhansingh Chhabda., Ahmedabad

ITSSA 374/AHD/2002

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 9377 (ITAT-AHMEDABAD)
• Duration Of Justice: 10 year(s) 8 month(s) 28 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 24-09-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 02-09-2013
• Assessment Year: misc
• Appeal Filed On: 27-12-2002
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P VAISHNAV
• Keywords: Unexplained investment; Loose papers; Valuation report; Bogus loan
• Section: 6

Judgement Text

, , , , , , , , IN THE INCOME TAX APPELLATE TSRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI D.K. TYAGI, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER 1. (SS) ./ I.T(SS).A.NO.374/AHD/2002 2. (SS) ./ I.T(SS).A.NO.375/AHD/2002 (BLOCK PERIOD : 1/4/1989 TO 20/05/1999) 1. DY.CIT CENTRAL CIRCLE-1(2) AHMEDABAD 2. KAWARJEETSINGH P. CHHABDA,AHMEDABAD / VS. 1. KAWARJEETSINGH P. CHHABDA L/H. OF SHRI PRADHANSINGH S.CHHABDA 5, MAHARSHI COMPLEX NR.BANK OF BARODA SARDAR PATEL COLONY, NARANPURA AHMEADBAD-14 2. DY.CIT CENTRAL CIRCLE-1(2),AHD ./ ./ PAN/GIR NO. : AAHPC 3315 M ( ! / // / APPELLANTS ) .. ( '#! / RESPONDENTS ) REVENUE BY : SHRI O.P.VAISHNAV, CIT-DR ASSESSEE BY : SHRI MEHUL THAKKAR $%& ' () / / / / DATE OF HEARING : 02/09/2013 *+, ' () / DATE OF PRONOUNCEMENT : 24/09/2013 - / O R D E R PER SHRI A.K.GARODIA ACCOUNTANT MEMBER : THESE ARE CROSS-APPEALS DIRECTED AGAINST THE ORDE R OF THE LD.CIT(A)-II, AHMEDABAD DATED 28.10.2002 FOR THE BLOCK PERIOD FRO M 1.4.89 TO 31.3.99. 2. GROUND NO.1 OF THE REVENUES APPEAL AND GROUND N O.1 OF THE ASSESSEES APPEAL ARE INTER-CONNECTED WHICH READ AS UNDER:- IT(SS)A NOS.374 (BY REVENUE) & 375/AHD/2002(BY ASSESSEE) DCIT VS. KAWARJEETSINGH P.CHHABDA(L/H) BLOCK PERIOD - 1.4.89 TO 20.5.99 - 2 - REVENUES GROUND OF APPEAL:- 1. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION MADE OF RS.8,31,000/- OUT OF THE TOTAL ADD ITION OF RS.48,31,000/- ON ACCOUNT OF UNACCOUNTED INVESTMENT IN BUNGALOW. ASSESSEES GROUND OF APPEAL:- 1. ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE TH E LD.CIT(A) HAS ERRED IN NOT DELETING THE ADDITION OF RS.40,00,000/ - IN RESPECT OF INVESTMENT IN BUNGALOW EVEN THOUGH IT WAS FULLY EXP LAINED. 2.1. BRIEF FACTS REGARDING THIS ISSUE AND THE DECIS ION OF LD.CIT(A) IS AS PER PARA-4 OF THE ORDER OF THE LD.CIT(A) WHICH IS REPRO DUCED BELOW: 04. THE FIRST GROUND OF APPEAL IS REGARDING AN A DDITION OF RS.48,31,000/- ON ACCOUNT OF INVESTMENT IN BUNGLOW NO.154, SUNRISE PARK, DRIVE-IN-ROAD, AHMEDABAD. THE ASSESSING OFFI CER HAS OBSERVED THAT ANNEXURE A-6, A-18, A-23, A-24 AND A-50 CONTAI N THE DETAILS OF INVESTMENT AS WELL AS EXPENSES INCURRED IN THE PURC HASE AND RENOVATION OF THE SAID BUNGALOW. SMT. BIMLAJEET KAUR, WIFE OF THE APPELLANT STATED ON OATH ON 20 TH MAY, 1999 THAT THE BUNGALOW AT SUNRISE PARK WAS PURCHASED IN 1994 FROM SHRI C.V. SOMAIYA FOR RS.30 LAKHS AND THEREAFTER EXPENSES WERE INCURRED ON RENOVATION OF THE BUNGALO W UP TO 1996. THE DOCUMENTED PRICE OF THE ABOVE PROPERTY IS AT RS.8 L AKHS WHICH IS REGISTERED IN THE JOINT NAMES OF SMT.BIMLAJEET KAUR AND SHRI PRADHAN SINGH. THE ASSESSING OFFICER HAS OBSERVED THAT THE APPELLANT INVESTED RS.30 LAKHS ON PURCHASE OF THE PROPERTY AND FURTHER RS.26.31 LAKHS ON ITS RENOVATION. THE PROPERTY WAS ALSO REFERRED TO THE DISTRICT VALUATION OFFICER UNDER SECTION 131(1)(D) OF THE I.T. ACT 196 1 WHO VALUED THE SAME AT RS.23,52,000/- VIDE HIS REPORT DATED 25 TH MAY, 2001. THE ASSESSING OFFICER DID NOT ACCEPT THE REPORT OF THE DISTRICT V ALUATION OFFICER AS THE APPROVED VALUER OF THE APPELLANT HAD VALUED THE BUN GALOW AT RS.71,11,600/-. THE APPELLANT HAD EXPLAINED DURING THE COURSE OF ASSESSMENT PROCEEDINGS THAT THE SAID VALUATION WAS SUBMITTED TO THE BANK FOR OBTAINING LOANS. THE ASSESSING OFFICER HAS MAD E TOTAL ADDITION OF RS.48,31,000/- AFTER GIVING A SET OFF OF RS.8 LAKHS WHICH WAS A DOCUMENTED PRICE AND WAS SHARED BY THE APPELLANT A ND HIS WIFE. THE APPELLANT HAS SUBMITTED THAT THE ASSESSING OFFICER HAS MADE THE ABOVE ADDITION ARBITRARILY BECAUSE ACTUAL PAYMENTS WHICH ARE TREATED IN THE HANDS OF THE APPELLANT WERE MADE BY THE ORIGINAL OW NER OF THE PROPERTY. IT(SS)A NOS.374 (BY REVENUE) & 375/AHD/2002(BY ASSESSEE) DCIT VS. KAWARJEETSINGH P.CHHABDA(L/H) BLOCK PERIOD - 1.4.89 TO 20.5.99 - 3 - THE APPELLANT FURTHER CLARIFIED THAT THE EXPENSES O N RENOVATION WERE MIXED WITH OTHER EXPENSES OVER THE PERIOD OF SEVERA L YEARS AND HENCE THE ENTIRE EXPENSES SHOULD NOT BE TREATED AS INCURRED F OR THE RENOVATION OF THE BUNGALOW. THE APPELLANT ARGUED THAT THE PROPERTY W AS ON RENT, THEREFORE, ITS COST COULD NOT BE AT RS.30 LAKHS. HOWEVER, I H AVE PERUSED THE ARGUMENTS RAISED BY THE APPELLANT AND ALSO LOOKED I N TO THE MERITS OF THE ABOVE ADDITION. LOOKING TO THE EXPLANATION OF THE APPELLANT REGARDING COST AS WELL AS RENOVATION OF THE PROPERTY ADDITION OF RS.40 LAKHS IS SUSTAINED AND REMAINING ADDITION OF RS.8,31,000/- I S DELETED. 3. NOW, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US FOR THE PART ADDITION OF RS.40 LACS CONFIRMED BY LD.CIT(A), WHEREAS THE REVE NUE IS IN APPEAL BEFORE US FOR THE DELETION OF PART ADDITION OF RS.8.31 LACS B Y THE LD.CIT(A). 4. THE LD.DR OF THE REVENUE SUPPORTED THE ASSESSMEN T ORDER. AS AGAINST THIS, IT WAS SUBMITTED BY THE LD.AR OF THE ASSESSE E THE ADDITION WAS MADE BY THE AO ONLY ON THE BASIS OF STATEMENT OF THE WIFE OF T HE ASSESSEE, WHICH IS NOT JUSTIFIED. HE ALSO SUBMITTED THAT AS PER VALUATION REPORT OF THE DVO OBTAINED BY THE AO, THE PROPERTY IN QUESTION WAS VALUED BY T HE DVO AT RS.23.52 LACS ONLY AND HENCE, VALUE OF THE PROPERTY IN QUESTION C ANNOT BE SAID TO BE MORE THAN THIS AMOUNT. HE ALSO SUBMITTED THAT IN ADDITION TO THE AMOUNT DISCLOSED BY THE ASSESSEE REGARDING PURCHASE VALUE OF THIS PROPERTY, I.E. RS.8 LACS, LD.CIT(A) HAS ALLOWED THE BENEFIT OF TELESCOPING OF RS.10,56,530/ -, RS.3.74 LACS AND RS.53,258 AGAINST THE ADDITION SUSTAINED BY HIM IN RESPECT OF THIS PROPERTY AND, HENCE, IF THIS TOTAL AMOUNT IS CONSIDERED WHICH IS RS.22,84,7 88/- AS AGAINST THE VALUE AS PER DVO OF RS.23.52 LACS, IT SHOULD BE ACCEPTED THA T NO FURTHER ADDITION OVER AND ABOVE RS. 22,84,788/- IS CALLED FOR BECAUSE THE MINOR DIFFERENCE WITH VALUE AS PER DVO ON ESTIMATE BASIS DOES NOT CALL FOR ANY ADDITION. HE SUBMITTED THAT IT(SS)A NOS.374 (BY REVENUE) & 375/AHD/2002(BY ASSESSEE) DCIT VS. KAWARJEETSINGH P.CHHABDA(L/H) BLOCK PERIOD - 1.4.89 TO 20.5.99 - 4 - THIS IS ALSO WORTH NOTING THAT THE PROPERTY IN QUES TION IS JOINTLY OWNED BY THE ASSESSEE AND HIS WIFE AND THIS IS ADMITTED BY THE A O ALSO BECAUSE HE HAS ALSO NOTED THAT OUT OF THE PAYMENT OF RS.8 LACS DISCLOSE D BY THE ASSESSEE HAVING BEEN MADE BY CHEQUE/DRAFT, AN AMOUNT OF RS.3.50 LACS WAS PAID BY WIFE OF THE ASSESSEE AND, THEREFORE, EVEN IF THERE IS ANY CASH EXPENDITURE FOR ACQUIRING THIS PROPERTY, ONLY 50% OF THE SAME CAN BE CONSIDERED IN THE HANDS OF THE ASSESSEE. HE SUBMITTED THAT UNDER THESE FACTS, THE ENTIRE ADD ITION MADE BY THE AO IN THE HANDS OF THE ASSESSEE ON THIS ACCOUNT SHOULD BE DEL ETED. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND WE FIND FORCE IN THE SUBMISSIONS OF THE LD.AR OF THE ASSESSEE. THIS IS AN ADMITTED POSITION THAT OUT OF THE DECLARED VALUE OF THE PROPERTY IN QUESTION, I.E. RS.8 LACS, AN AMOUNT OF RS.4.50 LACS ONLY WAS PAID BY THE ASSESSEE BY WAY O F DRAFTS AS SHOWN IN THE BOOKS AND THE BALANCE AMOUNT OF RS.3.50 LACS WAS PA ID BY THE WIFE OF THE ASSESSEE SMT.BIMALJEET KAUR BY WAY OF DRAFT AND, HE NCE, EVEN IF IT IS HELD THAT THERE WAS SOME CASH EXPENSES INCURRED IN RESPECT OF ACQUIRING THIS PROPERTY, THE ENTIRE AMOUNT CANNOT BE CONSIDERED IN THE HANDS OF THE ASSESSEE. IN ADDITION TO RS.8 LACS ALREADY DECLARED BY THE ASSESSEE, LD.CIT( A) HAD CONFIRMED THREE ADDITION ON SOME DIFFERENT HEADS OF RS.10,56,530/-, RS.3.74 LACS AND RS.53,258/- TOTALING RS.14,83,788/-. THE AO HAD D ETERMINED THE TOTAL VALUE OF THE PROPERTY AT RS.56.31 LACS AND AFTER DEDUCTING R S.8 LACS BEING THE DISCLOSED AMOUNT, HE HAD MADE AN ADDITION OF RS.48,31 LACS. OUT OF THIS ADDITION OF RS.48.31 LACS, THE LD.CIT(A) HAD ALLOWED RELIEF OF RS.8.31 LACS AND CONFIRMED THE BALANCE ADDITION OF RS.40 LACS. IN OUR CONSIDE RED OPINION, IN THE FACTS OF THE PRESENT CASE, THE TOTAL VALUE OF THIS PROPERTY SHOU LD BE CONSIDERED AT RS.38 LACS WHICH IS IN BETWEEN OF VALUE AS PER DVO AND VALUE A S PER A.O. AND OUT OF THIS, IT(SS)A NOS.374 (BY REVENUE) & 375/AHD/2002(BY ASSESSEE) DCIT VS. KAWARJEETSINGH P.CHHABDA(L/H) BLOCK PERIOD - 1.4.89 TO 20.5.99 - 5 - ADMITTEDLY, PAYMENT OF RS.8 LACS WAS MADE BY WAY OF CHEQUE/DRAFT AS PER DISCLOSURE OF THE ASSESSEE AND HIS WIFE. HENCE, THE TOAL PAYMENT IN CASH ON ACCOUNT OF THIS PROPERTY HAS TO BE CONSIDERED AT RS .30 LACS. SINCE THE PROPERTY IN QUESTION IS HELD JOINTLY BY THE ASSESSEE AND HIS WIFE, A TOTAL CASH PAYMENT TO BE CONSIDERED IN THE HANDS OF THE ASSESSEE CANNOT E XCEED RS. 15 LACS OUT OF THIS TOTAL CASH PAYMENT OF RS.30 LACS. HENCE, WE CONFIR M THE ADDITION OF THIS ACCOUNT TO THE EXTENT OF RS.15 LACS ONLY. WE WANT T O MAKE IT CLEAR THAT AGAINST THIS ADDITION OF RS.15 LACS BEING CONFIRMED BY US, THE ASSESSEE WILL GET THE BENEFIT OF TELESCOPING AS ALLOWED BY THE LD.CIT(A) OF RS.1056,530/-, RS.3,74,000/- AND RS.53,258/- TOTALING TO RS.14,83, 788/- AND THE NET ADDITION CONFIRMED BY US WILL REMAIN THE BALANCE AMOUNT OF R S.16,212/-. THE GROUND RAISED BY THE REVENUE IS REJECTED, WHEREAS THE GROU ND RAISED BY THE ASSESSEE IS PARTLY ALLOWED. 6. GROUND NO.2 RAISED BY THE REVENUE IS INTER-CONNE CTED WITH GROUND NO.2 RAISED BY THE ASSESSEE. THESE TWO GROUNDS ARE AS U NDER:- REVENUES GROUND OF APPEAL :- 2. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACT S IN DELETING THE ADDITION OF RS.5 LACS OUT OF TOTAL ADDITION OF RS.8 LACS IN RESPECT OF UNACCOUNTED INVESTMENT IN THE PURCHASE OF PLOT. ASSESSEES GROUND OF APPEAL :- 2. ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE , THE LD.CIT(A), HAS ERRED IN NOT DELETING THE ADDITION OF RS.3,00,0 00/- IN RESPECT OF INVESTMENT IN RADHE ACRE EVENTHOUGH IT WAS FULLY EX PLAINED. 6.1. BRIEF FACTS REGARDING THIS ISSUE AND THE DECIS ION OF THE LD.CIT(A) IS AS PER PARA-5 OF HIS ORDER WHICH IS REPRODUCED BELOW: IT(SS)A NOS.374 (BY REVENUE) & 375/AHD/2002(BY ASSESSEE) DCIT VS. KAWARJEETSINGH P.CHHABDA(L/H) BLOCK PERIOD - 1.4.89 TO 20.5.99 - 6 - 5. THE SECOND GROUND IS REGARDING AN ADDITION OF R S.8 LAKHS ON ACCOUNT OF INVESTMENT IN PLOT. THE ASSESSING OFFIC ER HAS MADE ADDITION OF RS.8 LAKHS BY OBSERVING THAT THE APPELLANT PURCH ASED A PLOT NO.40-A BY PAYING RS.10 LAKHS, OUT OF WHICH RS.2,00,700/- WAS PAID BY CHEQUE AND THE REST RS.8,00,000/- WAS PAID IN CASH. THE ASSES SING OFFICER OBSERVED THAT THE APPELLANT HAS SHOWN THE VALUATION REPORT O F THE ABOVE PLOT AT RS.39,68,800/-. THE ASSESSING OFFICER ALSO REFERRE D THE PROPERTY TO THE DISTRICT VALUATION OFFICER UNDER SECTION 131(1)(D) OF THE I.T.ACT TO VALUE THE SAME AT RS.2,31,000/-. THE APPELLANT PLEADED A T THE TIME OF ASSESSMENT PROCEEDINGS THAT HE VALUATION REPORT SHO WING HIGHER VALUE WAS PREPARED TO OBTAIN BANK LOANS. HOWEVER, ASSESS ING OFFICER PROCEEDED TO MAKE THE ABOVE ADDITION. I HAVE PERUS ED THE CONTENTION RAISED BY THE APPELLANT AS WELL AS NOTED FACTS OF T HIS CASE. THE ELEMENT OF ON MONEY INVOLVED IN THE ABOVE TRANSACTION CAN NO T BE RULED OUT. IN VIEW OF THE FACTS OF THIS CASE AN ADDITION OF RS.3, 00,000/- IS UPHELD AND THE REMAINING ADDITION OF RS.500,000/- IS DELETED. 7. THE REVENUE IS IN APPEAL FOR THE RELIEF ALLOWED BY LD.CIT(A) OF RS.5 LACS OUT OF TOAL ADDITION MADE BY THE AO OF RS.8 LACS AN D THE ASSESSEE IS IN APPEAL BEFORE US FOR THE PART ADDITION CONFIRMED BY LD.CIT (A) OF RS.3 LACS. THE DR OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER, WHEREAS IT IS SUBMITTED BY THE LD.AR OF THE ASSESSEE THAT THE VALUE OF THE PROPERT Y AS PER THE VALUATION DONE BY THE DVO WAS ONLY RS.2.31 LACS AND THE AMOUNT DECLAR ED BY THE ASSESSEE IS RS.2,00,700/- AND SINCE THE VALUATION IS AN ESTIMAT E ONLY AND IS VERY CLOSE TO THE AMOUNT DECLARED BY THE ASSESSEE, NO ADDITION IS JUS TIFIED. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT AS PER THE REPORT OF THE DVO REGARDING THIS PROPERTY, THIS PROPERTY W AS VALUED BY HIM AT RS.2.31 LACS AS AGAINST THE VALUE DECLARED BY THE ASSESSEE OF RS.2,00,700/-. THE AO HAS ALSO MENTIONED REGARDING VALUATION REPORT OBTAINED BY THE ASSESSEE FROM REGISTERED VALUER IN RESPECT OF THIS PROPERTY AT RS .39,63,800/-. REGARDING THIS IT(SS)A NOS.374 (BY REVENUE) & 375/AHD/2002(BY ASSESSEE) DCIT VS. KAWARJEETSINGH P.CHHABDA(L/H) BLOCK PERIOD - 1.4.89 TO 20.5.99 - 7 - VALUATION REPORT, IT WAS EXPLAINED BY THE ASSESSEE BEFORE THE AO THAT THE SAME WAS OBTAINED FOR THE PURPOSE OF OBTAINING THE LOAN FROM THE BANK AND, THEREFORE, THE SAME SHOULD NOT BE RELIED UPON. THE AO HAS ALS O IGNORED THE VALUATION REPORT OF THE REGISTERED VALUER VALUING THIS PROPER TY AT RS.39,63,800/- BECAUSE HE HAS ALSO ADOPTED THE VALUE OF THIS PROPERTY AT RS.1 0 LACS ONLY AS AGAINST, THE AMOUNT PAID BY CHEQUE OF RS.2 LACS AND IN THIS MANN ER, HE HAS MADE ADDITION OF RS.8 LACS ONLY. THE ADDITION MADE BY THE AO OF RS. 8 LACS WAS ON THIS BASIS THAT RECEIPT OF RS.10 LACS IS ON RECORD. THE LD.AR OF T HE ASSESSEE STRONGLY SUBMITTED THAT THIS OBSERVATION OF THE AO IS NOT CORRECT AND RECEIPT OF RS.10 LACS IS NOT AVAILABLE ON RECORD. LD.DR OF THE REVENUE COULD NO T PRODUCE BEFORE US ANY SUCH RECEIPT OF RS.10 LACS ALTHOUGH COPY OF SEIZED MATERIALS IS AVAILABLE IN PAPER BOOK. IN VIEW OF THIS FACTUAL POSITION THAT THIS A DDITION OF RS.8 LACS WAS MADE BY THE AO WITHOUT ANY VALID BASIS AND LD.DR OF THE REVENUE COULD NOT PRODUCE BEFORE US THE ALLEGED RECEIPT OF RS.10 LACS IN RESP ECT OF THIS PROPERTY, WE ARE OF THE CONSIDERED OPINION THAT NO ADDITION IS JUSTIFIE D IN RESPECT OF THIS PROPERTY IN THE FACTS OF THE PRESENT CASE. WE, THEREFORE, DELE TE THE ENTIRE ADDITION. GROUND NO.2 OF THE REVENUE IS REJECTED, WHEREAS GROUND NO. 2 OF THE ASSESSEE IS ALLOWED. 9. GROUND NO.3 OF THE REVENUE READS AS UNDER:- 3. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FAC TS IN DELETING THE ADDITION OF RS.29,25,540/- IN RESPECT OF POST-DATED CHEQUES FOUND. 9.1. BRIEF FACTS REGARDING THIS ISSUE AND THE DECIS ION OF THE LD.CIT(A) IS AS PER PARA-6 OF HIS ORDER WHICH IS REPRODUCED BELOW: IT(SS)A NOS.374 (BY REVENUE) & 375/AHD/2002(BY ASSESSEE) DCIT VS. KAWARJEETSINGH P.CHHABDA(L/H) BLOCK PERIOD - 1.4.89 TO 20.5.99 - 8 - 6. THE THIRD GROUND OF APPEAL IS REGARDING AN ADD ITION OF RS.29,25,540/- IN RESPECT OF ITEMS OF ANNEXURE-II M ENTIONED IN PARA 11 OF THE ASSESSMENT ORDER. THE ASSESSING OFFICER HAS MADE THE ABOVE ADDITION ON THE BASIS OF POST DATED CHEQUES BELONGI NG TO OTHER PARTIES WHICH ARE STATED TO BE UNEXPLAINED. THE DETAILS OF CHEQUES ARE REPRODUCED FROM THE RELEVANT PARA AS UNDER: RS. 5,000/- DELTA STAR CORPN. RS. 10,540/- OF S.P. THAKKAR RS. 10,000/- OF PRAKASH PATEL RS. 5,00,000/- OF CHAMUNDA PLYWOOD TRADERS RS.18,00,000/- OF SAGAR CONSULTANCY RS. 1,00,000/- OF VAALINATH CORPORATION RS. 5,00,000/- OF H.H. GAMI RS.2925,540/- (TOTAL) THE APPELLANT SUBMITTED BEFORE ME THAT IT WAS EXPLA INED DURING THE COURSE OF ASSESSMENT PROCEEDINGS THAT THE ABOVE CHE QUES WERE OBTAINED AS SECURITY FOR ARRANGING FINANCE FOR THE VEHICLES AND THE APPELLANT HAS NOT ENTERED INTO ANY TRANSACTION WITH THE CUSTOMERS FOR GIVING FINANCE OR RECOVERY OF THE SAME. THE RELEVANT PORTION OF THE APPELLANTS EXPLANATION BEFORE THE ASSESSING OFFICER IS REPRODUCED FOR THE SAKE OF CLARITY AS UNDER: AT THE OUTSET I WISH TO STATE THAT I AM A SOLE PRO PRIETOR OF M/S.PUNJAB MOTOR, AHMEDABAD BASICALLY DOING THE BUS INESS OF COMMISSION AGENCY IN THE PURCHASE AND SALE OF OLD A ND NEW CARS. THE MAIN SOURCE OF INCOME IS IN THE FORM OF COMMISS ION RECEIVED FROM THE SELLER AND PURCHASER OF VEHICLES WHICH ARE MOSTLY FOUR WHEELERS AND TWO WHEELERS. SOMETIME, THERE ARE COM MISSIONS WHEN I ARRANGE/TIE UP FINANCE ON BEHALF OF THE PROS PECTIVE CUSTOMERS EITHER FROM THE SELLER HIMSELF OR THROUGH OTHER SOURCES. TO THE FINANCE I AM ALSO STANDING AS A GUARANTOR FO R THE LOAN AMOUNT TAKEN BY THE PURCHASER AS I AM TAKING SUITAB LE SECURITY FROM THE PURCHASER FOR ARRANGING THE REQUIRED FINAN CE. I DO NOT EXPECT ANY INCOME FROM THIS BUSINESS BECAUSE I CONS IDER IT AS A PART OF MY BUSINESS WHICH IN TURN INCREASES MY CLIE NTELE. IT(SS)A NOS.374 (BY REVENUE) & 375/AHD/2002(BY ASSESSEE) DCIT VS. KAWARJEETSINGH P.CHHABDA(L/H) BLOCK PERIOD - 1.4.89 TO 20.5.99 - 9 - THE PURPOSE OF REPRODUCTION OF THE ABOVE VERSION OF THE APPELLANT IS TO ASCERTAIN THE GENUINENESS OF TRANSACTIONS WHICH WIL L BE DISCUSSED IN THE FOLLOWING PARES. NOW ON THE FACT OF THE CHEQUES OF OTHER PARTIES WHICH COULD NEITHER BE ENCASHED BY THE APPELLANT NOR THER E IS ANY EVIDENCE TO INDICATE THAT THE APPELLANT DIRECTLY OR INDIRECTLY RECEIVED THE EQUIVALENT AMOUNT CAN NOT BE TREATED AS BELONGING TO THE APPEL LANT. NOT ONLY THAT THE CHEQUES ARE VERY OLD AND EVEN THE NUMBER OF VEH ICLES ARE MENTIONED AGAINST THEM. IN VIEW OF THE REASONS GIVEN BY THE APPELLANT AND NATURE OF THE VERY OLD CHEQUES, ADDITION OF RS.29,25,540/- IS DELETED. 10. THE LD.DR OF THE REVENUE SUPPORTED THE ASSESSME NT ORDER, WHEREAS THE LD.AR OF THE ASSESSEE SUPPORTED THE ORDER OF THE L D.CIT(A). 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE F IND THAT THIS ADDITION WAS DELETED BY THE LD.CIT(A) MAINLY ON THIS BASIS THAT THE CHEQUES OF OTHER PARTIES COULD NEITHER BE ENCASHED BY THE ASSESSEE NOR THERE IS NO EVIDENCE TO INDICATE THAT THE ASSESSEE DIRECTLY OR INDIRECTLY RECEIVED T HE EQUIVALENT AMOUNT AND, THEREFORE, IN OUR CONSIDERED OPINION, NO INTERFEREN CE IS CALLED FOR IN THE ORDER OF THE LD.CIT(A) ON THIS ISSUE BECAUSE LD.DR OF THE RE VENUE COULD NOT CONTROVERT THIS CLEAR FINDING OF LD.CIT(A). ACCORDINGLY, GROU ND NO.3 OF REVENUES APPEAL IS REJECTED. 12. GROUND NO.4 OF REVENUES APPEAL READS AS UNDER :- 4. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACT S IN DELETING, (I) ADDITION OF RS.70,000/- IN RESPECT OF LOAN GIV EN TO SMT.KUSUMBEN AND (II) ADDITION OF RS.55,000/- IN RESPECT OF UNEXPLAI NED PAYMENT MADE TO ONE SHRI JATINBHAI, ADVOCATE. 12.1. BRIEF FACTS REGARDING THIS ISSUE AND THE DECI SION OF THE LD.CIT(A) IS AS PER PARA-7 OF HIS ORDER WHICH IS REPRODUCED BELOW: IT(SS)A NOS.374 (BY REVENUE) & 375/AHD/2002(BY ASSESSEE) DCIT VS. KAWARJEETSINGH P.CHHABDA(L/H) BLOCK PERIOD - 1.4.89 TO 20.5.99 - 10 - 07. THE FOURTH GROUND OF APPEAL IS REGARDING AN AD DITION OF RS.1,25,000/ IN RESPECT OF ITEMS MENTIONED IN PARA 11 OF THE ASSESSMENT ORDER. THE ASSESSING OFFICER HAS MADE ADDITION OF RS.70,000/- ON ACCOUNT OF LOAN GIVEN TO KUSUMBEN AND ANOTHER ADDIT ION OF RS.55,000/- ON ACCOUNT OF RECEIPT BY JATIN ADVOCATE. THE APPEL LANT HAS EXPLAINED THAT LOAN OF RS.70,000/- WAS ARRANGED FROM A PARTY OF BARODA WHOSE NAME AND TELEPHONE NUMBER IS MENTIONED ON THE SEIZE D PAPER ITSELF. SIMILARLY SHRI JATIN ADVOCATE HAD ISSUED RECEIPT OF RS.55,000/- TO SHRI I.K. BAXI WHICH HAS NOTING TO DO WITH THE AFFAIRS O F THE APPELLANT. IT APPEARS THAT THE ASSESSING OFFICER HAS NOT CAREFULL Y LOOKED INTO THE TRANSACTIONS. IN VIEW OF THE APPELLANTS EXPLANATI ON AND FACTS OF THE CASE, THE TOTAL ADDITION OF RS.1,25,000/- IS DELETED. 13. THE LD.DR OF THE REVENUE SUPPORTED THE ASSESSME NT ORDER, WHEREAS THE LD.AR OF THE ASSESSEE SUPPORTED THE ORDER OF THE L D.CIT(A). 14. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE F IND THAT FOR THE RECOVERY OF LOAN OF RS.70,000/-, IT WAS EXPLAINED BY THE ASS ESSEE THAT THE SAME WAS ARRANGED FROM THE PARTY OF BARODA WHOSE NAME AND TE LEPHONE NUMBER IS MENTIONED ON THE SEIZED PAPER ITSELF. REGARDING SE COND AMOUNT OF RS.55,000/-, IT WAS EXPLAINED BY THE ASSESSEE THAT ONE SHRI JATI N ADVOCATE HAD ISSUED THE RECEIPT OF THIS AMOUNT TO SHRI I.K.BAXI AND HE HAS NOTHING TO DO WITH THE AFFAIRS OF THE ASSESSEE. THE LD.CIT(A) HAD DELETED BOTH TH ESE ADDITIONS BY OBSERVING THAT THE AO HAS NOT CAREFULLY LOOKED INTO THESE TRA NSACTIONS. THE LD.DR OF THE REVENUE COULD NOT CONTROVERT THIS FINDING OF THE LD .CIT(A) AND, HENCE, WE DECLINE TO INTERFERE WITH THE ORDER OF THE LD.CIT(A ) ON THIS ISSUE ALSO. THEREFORE, GROUND NO.4 OF REVENUES APPEAL IS REJECTED. 15. GROUND NO.5 OF REVENUES APPEAL WHICH READS AS UNDER:- IT(SS)A NOS.374 (BY REVENUE) & 375/AHD/2002(BY ASSESSEE) DCIT VS. KAWARJEETSINGH P.CHHABDA(L/H) BLOCK PERIOD - 1.4.89 TO 20.5.99 - 11 - 5. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FA CTS IN DELETING THE ADDITION OF RS.3,17,500/- IN RESPECT OF UNACCOUNTED MONEY ADVANCED TO JAGDISH CHAVANA SWEET MART FOR THE PURCHASE OF SHOP . 15.1. BRIEF FACTS REGARDING THIS ISSUE AND THE DECI SION OF THE LD.CIT(A) IS AS PER PARA-8 OF HIS ORDER WHICH IS REPRODUCED BELOW: 8. THE SIXTH GROUND OF APPEAL IS REGARDING AN O RDER OF RS.3,17,500/- IN RESPECT OF ITEM OF ANNEXURE 12 MENTIONED IN PARA 15 OF THE ASSESSMENT ORDER. THE ASSESSING OFFICER HAS JOTTED ONLY ONE L INE I.E. RELATES TO MONEY ADVANCED TO JAGDISH CHAWANS SWEET MART FOR PU RCHASE OF SHOP:. HOWEVER, THE APPELLANT EXPLAINED THAT ALTHOUGH FINA NCE OF RS.3,17,500/- WAS TO BE ARRANGED FOR PURCHASE OF SHOP BY JAGDISH CHAWAN SWEET MART BUT THE TRANSACTION DID NOT MATERIALIZE. THE ANNEX URES ARE JUST PAPERS PREPARED FOR THE SAME AND CHEQUE LYING WITH THE APP ELLANT WAS 4 YEARS OLD. IN THIS CASE THE ASSESSING OFFICER SHOULD HAV E ESTABLISHED THAT THE TRANSACTION TOOK PLACE I.E. THE FINANCE WAS ACTUALL Y GIVEN BY THE APPELLANT TO THE CONCERNED PARTY FOR PURCHASE OF SHOP. WHEN SUCH AN EVENT COULD NOT TAKE PLACE THE ASSESSING OFFICER WAS NOT JUSTIF IED IN MAKING SUCH ADDITION. IN VIEW OF THESE FACTS THE ADDITION OF R S.3,17,500/- IS DELETED. 16. THE LD.DR OF THE REVENUE SUPPORTED THE ASSESSM ENT ORDER, WHEREAS THE LD.AR OF THE ASSESSEE SUPPORTED THE ORDER OF THE L D.CIT(A). 17. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND W E FIND THAT THIS ISSUED HAD BEEN DECIDED BY LD.CIT(A) ON THIS BASIS THAT THE PA PERS PREPARED ALONG WITH CHEQUE WERE LYING WITH THE ASSESSEE AND THESE WERE FOUR YEARS OLD. HE HAS GIVEN A CLEAR FINDING THAT THE AO COULD NOT ESTABLI SH THAT THE TRANSACTION TOOK PLACE IN ACTUAL. LD.DR COULD NOT CONTROVERT THIS F INDING OF THE LD.CIT(A) BY PRODUCING ANY EVIDENCE TO ESTABLISH THAT THE TRANSA CTION ACTUALLY TOOK PLACE. WE, THEREFORE, DECLINE TO INTERFERE WITH THE ORDER OF THE LD.CIT(A) ON THIS ISSUE ALSO. GROUND NO.5 OF REVENUES APPEAL IS REJECTED. IT(SS)A NOS.374 (BY REVENUE) & 375/AHD/2002(BY ASSESSEE) DCIT VS. KAWARJEETSINGH P.CHHABDA(L/H) BLOCK PERIOD - 1.4.89 TO 20.5.99 - 12 - 18. GROUND NO.6 OF REVENUES APPEAL READS AS UNDER: - 6. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACT S IN DIRECTING TO ALLOW SET-OFF OF THE AMOUNT OF RS.10,56,530/- REPRESENTIN G THE ADDITION MADE ON ACCOUNT OF LOAN AMOUNTS TO BE RECOVERED FROM VARIOU S PARTIES AS ALSO CERTAIN UNEXPLAINED EXPENSES AGAINST THE ADDITION O F RS.40 LAKHS SUSTAINED BY HIM [CIT(A)] ON ACCOUNT OF INVESTMENT IN BUNGALOW. 18.1. ON THIS ISSUE, LD.DR OF THE REVENUE SUPPORTE D THE ASSESSMENT ORDER, WHEREAS LD.AR OF THE ASSESSEE SUPPORTED THE ORDER OF THE LD.CIT(A). 19. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE F IND THAT THIS GROUND OF THE REVENUE IS MISPLACED BECAUSE, IN FACT, THE LD.C IT(A) HAS CONFIRMED THE ADDITION OF THIS AMOUNT AND HE HAS SIMPLY ALLOWED S ET OFF OF THIS AMOUNT AGAINST THE ADDITION OF RS.40 LAKHS SUSTAINED BY HIM ON ACC OUNT OF INVESTMENT IN BUNGALOW. THIS ADDITION WAS MADE BY THE AO AND CON FIRMED BY LD.CIT(A) ON THIS BASIS THAT THESE AMOUNTS WERE MOSTLY IN THE FO RM OF CREDITS AND, THEREFORE, THE ADDITION IS SUSTAINED, BUT SET OFF IS ALLOWED A GAINST THE ADDITION OF RS.40 LAKHS ON ACCOUNT OF INVESTMENT IN BUNGALOW. IN O UR CONSIDERED OPINION, THE GROUND RAISED BY THE REVENUE HAS NO MERIT BECAUSE A DDITION IS ALREADY CONFIRMED BY LD.CIT(A) AND SET OFF ALLOWED BY HIM O F THIS ADDITION AGAINST ADDITION SUSTAINED BY HIM IN RESPECT OF INVESTMENT IN BUNGALOW CANNOT BE FAULTED BECAUSE THIS ADDITION IS ON ACCOUNT OF CRED IT ENTRIES AND ADDITION IN RESPECT OF BUNGALOW IS ON ACCOUNT OF DEBIT ENTRIES AND, THEREFORE, THE SET OFF ALLOWED BY THE LD.CIT(A) CANNOT BE FAULTED WITHOUT SHOWING THAT THIS AMOUNT WAS USED ELSEWHERE AND NOT IN THE BUNGALOW. WE, TH EREFORE, UPHOLD THE ORDER OF THE LD.CIT(A) ON THIS ISSUE AND THIS GROUND OF REVE NUES APPEAL IS ALSO REJECTED. 20. GROUND NO.7 OF REVENUES APPEAL READS AS UNDER :- IT(SS)A NOS.374 (BY REVENUE) & 375/AHD/2002(BY ASSESSEE) DCIT VS. KAWARJEETSINGH P.CHHABDA(L/H) BLOCK PERIOD - 1.4.89 TO 20.5.99 - 13 - 7. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FAC TS IN DELETING THE ADDITION OF RS.2,63,00,000/- IN RESPECT OF UNACCOUN TED LOAN GIVEN TO SHRI BHOLABHAI PATEL. 20.1. BRIEF FACTS REGARDING THIS ISSUE AND THE DECI SION OF THE LD.CIT(A) ARE AS PER PARAS-10 & 10.1 OF HIS ORDER WHICH ARE REPRODU CED BELOW: 10. THE TWELFTH GROUND OF APPEAL IS REGARDING ADDI TION OF RS.3,35,97,610/-. THE ASSESSING OFFICER HAS MADE T HE ABOVE ADDITION ON THE GROUND THAT THE APPELLANT ADVANCED RS.2,63,00,0 00/- TO BHOTABHAI AS PER ANNEXURE A 31 PAGE 1 AS THE APPELLANT WAS FOUND TO BE IN POSSESSION OF DOCUMENTS LIKE POWER OF ATTORNEY FOR 119 SUNRISE PARK, MANGAL MURTI COMPLEX ETC. AND THE VALUE OF THAT PROPERTY WAS ARO UND 2 CRORES. THE APPELLANT HAS SUBMITTED THAT HE IS NOT HAVING ANY L ICENCE FOR GIVING FINANCE. HE IS MERELY EARNING COMMISSION FROM SALE AND PURCHASE OF NEW AS WELL AS OLD CARS. THE APPELLANT ADMITTED THAT H E GOT SOLD NUMBER OF IMPORTED CARS TO SHRI BHOLABHAI AND OTHER MEMBERS O F HIS FAMILY FOR THE PAST 15 YEARS WHICH IS DULY REFLECTED IN THE BOOKS OF ACCOUNT. THE APPELLANT HAS REFERRED TO THE QUESTION ANSWERS RAIS ED DURING THE COURSE OF ASSESSMENT PROCEEDINGS, WHICH ARE REPRODUCED AS UNDER: Q2- I SAW YOU PAGE 1 OF ANNEXURE A-41 AND ANNEXUR E A-43 WHICH HAS SEIZED BY US AND ACCORDING TO THAT YOU HAVE GIVEN A LOAN OF RS.2,65,00,000/- TO BHOLABHAI PATEL. PLEASE EXPLAI N. A-2- I KNOW BHOLABHAI SINCE LAST 10-15 YEARS AND WE ARE HAVING GOOD RELATION. HIS SON RAJ BHOLABHAI AND HIS DAUGHTER R EKHA BHOLABHAI ARE INTERESTED IN HAVING NEW CAR. THEREFORE THEY USED TO ASK US THE RATES OF IMPORTED AND PREMIUM CAR BECAUSE OF OUR OLD DEALING WITH THEM. AS REGARDS ASSETS OF BHOLABHAI, THESE ARE ALL COPIES O F THE DOCUMENTS WITH US OBTAINED FOR SECURITY AGAINST CAR LOANS. WHATEVER AMOUNT WE HAVE TO RECEIVED FROM THEM IS SHOWN IN OUR BOOKS OF ACCOUNT S. QUESTION NO.5- HOW MUCH FINANCE YOU GAVE TO BHOLAB HAI? A-5- I HAVE GIVEN FINANCE TO BHOLABHAI AND HIS FA MILY MEMBERS ARE REFLECTED IN OUR BOOKS OF ACCOUNTS. IT MAY BE PLEA SE BE CONFIRMED WITH MR.BHOLABHAI AFTER CALLING HIM PERSONALLY. IT(SS)A NOS.374 (BY REVENUE) & 375/AHD/2002(BY ASSESSEE) DCIT VS. KAWARJEETSINGH P.CHHABDA(L/H) BLOCK PERIOD - 1.4.89 TO 20.5.99 - 14 - Q-6- WHETHER BHOLABHAI CONFIRMED OR NOT, HOW MUCH F INANCE YOU GAVE TO HIM? A-6- THERE IS A MORTGAGE LOAN ON BHOLABHAIS BUNGL OW ABOUT RS.15,00,000/- (WITH INTEREST AND EXACT CAN BE SAID AFTER VERIFYING THE BOOKS. THIS BUNGALOW IS IN THE NAME OF RAJ BHOLABH AI AND REKHABEN BHOLABHAI. ALL THESE TRANSACTIONS ARE LEGAL AND DO CUMENTS ARE NOTARIZED BEFORE NOTARY. Q-7- I SHOW YOU PAGE 1 OF ANNEXURE A-31 OF ANNEXUR E A-36, WHICH WERE SEIZED FROM YOUR OFFICE, THERE IS AN ACCOUNT OF BHO LABHAI. I ALSO SAW YOU ANNEXURE A-2 IN WHICH THERE ARE CHEQUES OF MAHALAXM I ENTERPRISE. PLEASE REFER THIS AND TELL US HOW MUCH YOU GIVEN TO BHOLABHAI AND HOW MUCH AMOUNT YOU HAVE TO RECOVER FROM HIM? A-7- BHOLABHAI IS MY FRIEND AND I KNOW HIM SINCE LA ST 15 YEARS. WE ARE RESIDING IN THE SAME SOCIETY. BECAUSE MR.BHOLABHAI WANTED TO PURCHASE CAR ON INSTALLMENT BASIS, HE HAS TO PUT A PROPOSAL, QUOTATION FOR THE CAR, ADVANCE CHEQUES AND DOCUMENTS OF THE PROPERTY FOR S ECURITY. BEING A MIDDLEMAN AND RESPONSIBILITY OF THE LOAN LIES ON TH E APPELLANT, THE APPELLANT HAS TO OBTAIN THESE DOCUMENTS FOR SECURIT Y. THESE ARE ALL TRANSACTIONS TO CAR DEALINGS ONLY AND NOT AN ACCOUN T OF FINANCE. A-8- I SHOW YOU PAGE 1 OF ANNEXURE A-31 AND PAGE 31 OF THE ANNEXURE A-36, PLEASE REFER THIS AND EXPLAIN REGARDING CREDI T 50 SHOP. A-8- THIS MAY BE NOTE REGARDING SHOP DEALINGS. SAR DARJI IS WRITTEN ON THE PAGE. THERE MAY BE A TALK ON SOME SARDARJI. Q-9- ON BACK SIDE OF PAGE 1 OF ANNEXURE A-31, IN WH ICH 10-08-98, 10- 09-98 AND 10-10-98, 3.40, 3.40, 3.40 WRITTEN AND TH IS MATTER IS ALSO WRITTEN ON PAGE 31 OF ANNEXURE A-36. A-9- I KNOW BHOLABHAI SINCE LAST 15 YEARS, THESE FI GURES ARE RELATED TO BOOKING OF SHOP, THERE IS NO LOAN TRANSACTION. THI S MAY BE CONFIRMED WITH MR.BHOLABHAI FOR FURTHER VERIFICATION. IT(SS)A NOS.374 (BY REVENUE) & 375/AHD/2002(BY ASSESSEE) DCIT VS. KAWARJEETSINGH P.CHHABDA(L/H) BLOCK PERIOD - 1.4.89 TO 20.5.99 - 15 - Q-10- PLEASE REFER PAGE 1 OF ANNEXURE A-31 AND TELL US WHAT IS THE MEANING OF FIGURES WRITTEN IN ) CIRCLE. A-10- THESE ARE THE SHOP NUMBERS AND NOT ANY BUSINE SS TRANSACTIONS. YOU ARE SHOWING CIRCLES BUT IT IS NEITHER ANY TRANS ACTION NOR ANY RUPEES WRITTEN. Q-11- I SHOW YOU PAGE 1 OF ANNEXURE A-31 AGAIN ON THIS 10, 13-08-96, 10, 10-09-96, 10, 23-09-96, 10, 03-11-96, 10, 03-03 -97 ADVANCE IS WRITTEN. PLEASE EXPLAIN. A-11- WHEN ANY BUILDER PUTS A SCHEME, THEY START AD VANCE BOOKING. THIS MAY BE A TALK REGARDING BOOKING OF SHOP NO.10 IN VE RY RAW OF GHANTAKARN MARKET. (PLEASE REFER SEIZED MATERIAL WHEREIN NUMB ER OF PAMPHLETS OF SCHEME OR GHANTAKARN MARKET LAUNCHED BY BHOLABHAI P ATEL). Q-12 I SHOW YOU PAGE 2 OF ANNEXURES A-31, IN WHICH FROM 10 TH JUNE, 1998 ON JANUARY 99 FULL AND FINAL PAGE IS WRITTEN 4% PLEASE EXPLAIN. A-12- I HAVE TO GET 4% COMMISSION FOR THE DEAL OF S HOP AND FULL AND FINAL PAYMENT TO BE COMPLETED AT HE TIME OF POSSESSION IN JANUARY 1999. Q-13- ON PAGE NO.31 ANNEXURE A-36, 3 PENDING, 10-1 1-98, 3 PENDING, 10-12-98, 3 PENDING, 10-12-98, 3 P3NDING 10-02-99, 3 PENDING, 10-03-99. A-13- IT IS A NOTE OF OUR R.T.O. AGENT, TO WE HAVE GIVEN R.C.BOOK FOR REGISTRATION OF THE VEHICLES WHICH ARE PENDING IN T HE VARIOUS MONTHS. Q-14- PLEASE REFER PAGE 1 OF ANNEXURE A-31, WE UNDE RSTAND THAT YOUR FINANCE IS RS.2,90,00,000/- TO BHOLABHAI ON INTERES T, IN WHICH RS.27,00,000/- RECEIVED BACK, THUS TOTAL RS.2,63,00 ,000/- YOU HAVE TO RECEIVE FROM BHOLABHAI. PLEASE EXPLAIN. A-14- RESPECTED SIR, PLEASE REFER THIS PAGE VERY CA REFULLY. NOTHING IS WRITTEN IN RUPEES HUNDREDS, THOUSANDS, LACS, CRORES . SO HOW CAN YOU UNDERSTAND IT IS IN CRORES? I REQUEST YOU TO PLEAS E CLARIFY. Q-15- YOU HAVE TAKEN CHEQUES OF 35+1+4+6+1+1+12+0.5 0 = RS.60.50 FROM BHOLABHAI. PLEASE EXPLAIN THIS. IT(SS)A NOS.374 (BY REVENUE) & 375/AHD/2002(BY ASSESSEE) DCIT VS. KAWARJEETSINGH P.CHHABDA(L/H) BLOCK PERIOD - 1.4.89 TO 20.5.99 - 16 - A-15- I HAVE ALREADY EXPLAINED YOU IN EARLIER QUES TIONS I HAVE NOT MADE ANY TRANSACTION WITH BHOLABHAI. THESE ARE THE CHEQUES RECEIVED TOWARDS QUOTATIONS OF THE CARS, PROPOSAL OF THE LOA N FOR SECURITY, THE CHEQUES ARE NOT VALID ON THIS DATE. 10.1 THE APPELLANT FURTHER REFERRED TO THE CLARIFIC ATIONS GIVEN BY SHRI BHOLABHIA TO THE ASSESSING OFFICER. EXTRACTS FROM THESE CONFIRMATIONS ARE REPRODUCED AS UNDER: I HAVE APPEARED BEFORE YOUR KIND HONOUR TWICE IN R ESPONSE TO SAID NOTICES AND EXPLAINED THE POSITION. IT IS SUB MITTED FOR YOUR RECORD THAT INDUBHAI DAHYABHAI EXHIBITORS PVT.LTD. IS A PRIVATE LIMITED COMPANY. IT CLOSED ITS CINEMA BUSINESS LON G BACK AND OTHER BUSINESS THEREAFTER. THE COMPANY IS NOT DOIN G ANY BUSINESS OPERATIONS FOR THE LAST 6 TO 7 YEARS AND IS THIS NO N-FUNCTION COMPANY. WE HAVE CHECKED UP AND THERE ARE NO RECORDS OR DETA ILS SHOWING ANY BUSINESS DEALINGS OR TRANSACTIONS WITH M/S.PUNJ AB MOTORS OR PRADHAN SINGH CHHABRA BY THE SAID COMPANY. (EXTRACT FROM LETTER DATED 29/05/2002 TO THE DCIT, CENTRAL CIRCLE.1(2), AHMEDABAD) I HAVE APPEARED BEFORE YOUR KIND HONOUR TWICE IN R ESPONSE TO SAID NOTICES AND EXPLAINED THE POSITION. IT IS SUB MITTED HEREWITH A COPY OF MY INCOME TAX RETURN FILED FOR THE FINANCIA L YEAR 31.3.2000 (A.Y. 2000-2001) AS DESIRED BY YOU. I ALSO SUBMIT THAT I DO NOT HAVE ANY DETAILS OF TRA NSACTIONS WITH SHRI PRADHAN SINGH CHHABRA OR PUNJAB MOTORS. (EXTRACT FROM LETTER DATED 29/05/2001 TO DCIT, CC.1 (2), AHMEDABAD.) IN VIEW OF THE AFORESAID DISCUSSION IT APPEARS THAT THE ASSESSING OFFICER DID NOT APPLY HIS MIND PROPERLY. THE CHEQUE IS VER Y OLD AND WAS NOT ENCASHED. THE CONCERNED PARTY HAS DENIED HAVING AN Y SUCH TRANSACTION. THE ASSESSING OFFICER WAS REQUIRED TO ESTABLISH AFT ER MAKING INDEPENDENT IT(SS)A NOS.374 (BY REVENUE) & 375/AHD/2002(BY ASSESSEE) DCIT VS. KAWARJEETSINGH P.CHHABDA(L/H) BLOCK PERIOD - 1.4.89 TO 20.5.99 - 17 - ENQUIRIES THAT SUCH A TRANSACTION TOOK PLACE WITH T HE APPELLANT AND THE MONEY ACTUALLY CHANGED HANDS. HOWEVER, NO SUCH TRA NSACTION APPEARS TO HAVE TAKEN PLACE. SUCH A HUGE ADDITION APPEARS TO HAVE BEEN MADE IN A VERY CALLOUS MANNER. IT MAY NOT BE OUT OF PLACE TO MENTION THAT I HAVE PERUSED THE DECODING OF A LARGE NUMBER OF ITEMS, CO NTAINED IN THE SHOW CAUSE LETTER, WHERE IN THE ASSESSING OFFICER HAS AD DED THREE ZEROS (000) AND TOTALED UP THE FIGURE TO SEVERAL CRORES OF RUPE ES. THE LOOSE PAPERS, WITHOUT ANY PARTICULARS OR DATE OR NAME ETC. ARE DU MB PAPERS AND CAN NOT BE MADE THE BASIS FOR ADDITION. IN THE ABOVE A DDITION THE ASSESSING OFFICER HAS NOT ESTABLISHED ANY CONCLUSIVE EVIDENCE SO AS TO MAKE THE APPELLANT SOLELY RESPONSIBLE FOR THE TRANSACTION. A CORROBORATIVE EVIDENCE TO INDICATE THAT THE FUNDS HAVE GONE TO TH E POCKET OF THE APPELLANT MUST HAVE BEEN ESTABLISHED BY THE ASSESSI NG OFFICER. IN VIEW OF THESE FACTS ADDITION OF THE PRINCIPAL AMOUNT ALONG WITH INTEREST ETC. AT RS.2,63,00,000/- IS DELETED. 21. THE LD.DR OF THE REVENUE SUPPORTED THE ASSE SSMENT ORDER, WHEREAS THE LD.AR OF THE ASSESSEE SUPPORTED THE ORDER OF THE L D.CIT(A). 22. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE F IND THAT THIS ADDITION WAS DELETED BY THE LD.CIT(A) ON THIS BASIS THAT THE LOO SE-PAPERS ON THE BASIS OF WHICH THE ADDITION ARE MADE BY THE AO ARE WITHOUT A NY PARTICULARS OR DATE OR NAME ETC. AND, THEREFORE, THESE ARE DUMP-PAPERS AND CANNOT BE MADE THE BASIS FOR ADDITION. THIS FINDING OF THE LD.CIT(A) COULD NOT BE CONTROVERTED BY THE LD.DR OF THE REVENUE BY BRINGING ANY EVIDENCE ON RE CORD TO SHOW THAT THIS ESSENTIAL INFORMATION SUCH AS DATE, NAME OR PARTICU LARS ARE AVAILABLE ON THE SEIZED PAPER ON THE BASIS OF WHICH THE ADDITION WAS MADE BY THE AO AND, HENCE, ON THIS ISSUE ALSO, WE DO NOT FIND ANY REASON TO IN TERFERE WITH THE ORDER OF THE LD.CIT(A). THEREFORE, THIS GROUND OF THE REVENUE I S ALSO REJECTED. IT(SS)A NOS.374 (BY REVENUE) & 375/AHD/2002(BY ASSESSEE) DCIT VS. KAWARJEETSINGH P.CHHABDA(L/H) BLOCK PERIOD - 1.4.89 TO 20.5.99 - 18 - 23. GROUND NO.8 RAISED BY THE REVENUE IS INTER-CO NNECTED WITH GROUND NO.3 RAISED BY THE ASSESSEE. THESE TWO GROUNDS ARE AS U NDER:- REVENUES GROUND OF APPEAL :- 8. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACT S IN DELETING THE ADDITION OF RS.56,96,060/- OUT OF THE TOTAL ADDITIO N MADE OF RS.67,97,610/- IN RESPECT OF UNACCOUNTED LOANS GIVE N BY THE ASSESSEE TO VARIOUS PERSONS. ASSESSEES GROUND OF APPEAL :- 3. ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CAS E, THE LD.CIT(A), HAS ERRED IN NOT DELETING THE ADDITION OF RS.11,01,550/ - IN RESPECT OF UNEXPLAINED ITEMS CONTAINED IN PARA 35 OF THE ASSES SMENT ORDER OF THE LD.A.O. EVEN THOUGH IT WAS FULLY EXPLAINED. 23.1. BRIEF FACTS REGARDING THIS ISSUE AND THE DECI SION OF THE LD.CIT(A) IS AS PER PARA-10.2 OF HIS ORDER WHICH IS REPRODUCED BELOW: 10.2 THE SECOND PART OF THE ADDITION RELATING TO U NEXPLAINED ITEMS IS CONTAINED IN PARA 35 OF THE ASSESSMENT ORDER. THE ASSESSING OFFICER HAS MADE ADDITION OF RS.67,97,610/- WHICH INCLUDE DEBIT AS WELL AS CREDIT ENTRIES. THE APPELLANT HAS EXPLAINED THE ENTRIES A S UNDER: PARA 35 RELEVANT ANNEXURES NAME OF DEBTOR LAST DEBIT BALANCE ANNEXURE-A-31 ANNEXUREA-31 PAGE-4 GHANSHYAM,DARIAPUR RS.90, 000/- IT IS RS.10,000/- FOR SALE OF CAR. ACCOUNT IS OLD AND SETTLED. ANNEXURE A-31 PAGE9 PRAVIN PRAJAPATI RS.4,500/ - IT IS FOR THE SCOOTER ADV. ACCOUNT OLD AND SETTLED. ANNEXURE-A-31 PAGE10 SURESH JOITARAM ANNEXURE-A-31 PAGE 15 AMARJIT RS.45,000/- I T IS FOR THE MARUTI VAN AND ARRANGED LOAN FOR AMARJIT. ANNEXURE-A-31 PAGE18 GURUMUKA SARDARJI RS.50, 000/- IT IS A ROUGH WORK BACK IT(SS)A NOS.374 (BY REVENUE) & 375/AHD/2002(BY ASSESSEE) DCIT VS. KAWARJEETSINGH P.CHHABDA(L/H) BLOCK PERIOD - 1.4.89 TO 20.5.99 - 19 - SIDE. ANNEXURE-A-31 PAGE 21 MAHESH RS.26,500/- IT IS LOAN ARRANGED FOR MAHESH FOR PURCHASE OF VAN. ANNEXURE-A-31 PAGE 24 S.P.THAKKAR RS.58,000/- IT IS REGARDING CAR DEAL- ING AND LOAN ARRANGED THROUGH GARDEN FINANCE ANNEXURE-A-31 PAGE 21 RAJENDRASINGH CHAVLA RS.35 ,000/- VAN LOAN ARRANGE ANNEXURE-A-31 PAGE 27 RAJENDRA RS.15,000/- CAR ACCOUNT ALREADY SETTLED. ANNEXURE A-31 PAGE 28 JAIPAL RS.47,550/- A CCOUNT SETTLED SINCE LONG. ANNEXURE A-31 PAGE30 RAVINDER,JAIPUR RS.50,000/- ACCOUNT SETTLED SINCE LONG. ANNEXURE A-31 PAGE 32 BOSS RS.1,00,000/- A CCOUNT SETTLED SINCE LONG. ANNEXUREA-31 PAGE 34 JASU PISTOL RS.70,000/- CAR LOAN ARRANGE. ACCOUNT OLD AND SETTLED. ANNEXURE-A-31 PAGE 34 JAGJITSINGH RS.80,0 0 CAR LOAN ARRANGE. ACCOUNT OLD AND SETTLED. BACKSIDE ANNEXURE-A-31 PAGE 36 DILIPKUMAR RS.3,90,000/- PAGE 36 BACKSIDE IS A LOOSE PAPER NO TRANSACTION ANNEXURE A-31 PAGE 38 INDERJIT LAL RS.30,00000/- RO UGH WORK DECODING ANNEXURE A-31 PAGE 40 S.P. RS.13,00,000/- ROUGH WO RK DECODING ANNEXURE-A-36 ANNEXURE A-36 PAGE 2 GUPTA R.P. RS.17,190 /- ROUGH WORK NO DEALING ANNEXURE A-36 PAGE 11 RAGHUVIR CYCLE RS.44,675/-EST IMATE OF CAR NO DEALING ANNEXURE A-36 PAGE 11 SURJEET RS.5,000/- SCOOTER E STIMATE. IT(SS)A NOS.374 (BY REVENUE) & 375/AHD/2002(BY ASSESSEE) DCIT VS. KAWARJEETSINGH P.CHHABDA(L/H) BLOCK PERIOD - 1.4.89 TO 20.5.99 - 20 - ANNEXURE A-36 PAGE 30 PANKHI RS.1,50,000/- T EA ETC.MISC.EXPENSES AND DECODING. ANNEXURE A-36 PAGE 30 RAMESH TRIVEDI RS.3,50,000/- TEA ETC.MISC.EXPENSES AND DECODING. ANNEXURE-A 36 PAGE 31-13 EXPENSES INCURRED RS.5,22, 223/- THESE ARE ALL ROUGH WORK AND DECODING AND NOT ACCOUNTS OF ANYBODY - CAR DETAILS ALSO MENTIONED. ANNEXURE A-36 PAGE 37 MAHESH TRIVEDI RS.5,000/- ROUGH WORK ANNEXURE A-36 PAGE 38 JASHIR AND SUKHBIR RS.30,000/ - ROUGH WORK ANNEXURE A-36 PAGE 39 RUPAREL RS.8,972/- CANCELL ED WRITTEN ANNEXURE A-36 43 INDERJIT RS.1,00,000 /- ROUGH WORK NO NAME MENTIONED ANNEXURE-A-36 PAGE 45 P.BHATIA & S.P. RS.30,00 0/- ROUGH WORK AND CROSSED ANNEXURE A-36 PAGE 46 MAHESH POPAT RS.58,000/- ROU GH WORK AND CROSSED ANNEXURE A-36 PAGE 47 RAMESH CHOSHI RS.60,000/- ROUGH WORK AND CROSSED. ------------------- TOTAL : RS.67,97,610/- THE APPELLANT EXPLAINED THAT MOST OF THE ACCOUNTS W ERE SETTLED IN THE PAST. SOME ARE DUMB AND ROUGH PAPERS. PERUSAL OF THE EXP LANATION GIVEN BY THE APPELLANT INDICATES THAT ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING ADDITION OF DEBIT ENTRIES WHICH ARE EITHER EXPENSES OR INFLA TED FIGURES DUE TO DECODING EXERCISED BY THE ASSESSING OFFICER. THE ASSESSING OFFICER CAN NOT ARBITRARILY MAKE ADDITION ON ACCOUNT OF BOTH INCOME AND EXPENDI TURE. IN VIEW OF THESE FACTS ADDITION OF RS.56,96,060/- IS DELETED AND ADD ITION OF RS.11,01,550/- IS SUSTAINED. 24. THE LD.DR OF THE REVENUE SUPPORTED THE ASSESSME NT ORDER, WHEREAS THE LD.AR OF THE ASSESSEE SUPPORTED THE ORDER OF THE L D.CIT(A) FOR THE GROUND RAISED BY THE REVENUE. REGARDING THE PART ADDITION OF RS.11,01,550/- SUSTAINED IT(SS)A NOS.374 (BY REVENUE) & 375/AHD/2002(BY ASSESSEE) DCIT VS. KAWARJEETSINGH P.CHHABDA(L/H) BLOCK PERIOD - 1.4.89 TO 20.5.99 - 21 - BY THE LD.CIT(A), HE SUBMITTED THAT NO PART OF THIS ADDITION DESERVES TO BE CONFIRMED BECAUSE THE ENTIRE ADDITION WAS MADE BY T HE AO ON THE BASIS OF DUMB AND ROUGH PAPERS ONLY. 25. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE F IND THAT THE ADDITION WAS MADE BY THE AO ON THE BASIS OF SEIZED PAPERS CONTAI NING ONLY NAME AND AMOUNT WITHOUT ANY DATE THEREON. IN THE ASSESSMENT ORDER ALSO, THE AO HAD NOT MENTIONED ANY DATE OF THESE TRANSACTIONS, ALTHOUGH HE HAD NOTED EACH AND EVERY AMOUNT. BEFORE LD.CIT(A), IT WAS EXPLAINED BY THE A SSESSEE THAT MOST OF THE ACCOUNTS WERE SETTLED IN THE PAST AND THESE ARE DUM B AND ROUGH PAPERS. SINCE NO DATE WAS MENTIONED ON THESE LOOSE-PAPERS, IN OUR CONSIDERED OPINION, NO SUCH ADDITION IS JUSTIFIED ON THE BASIS OF SUCH DUM B DOCUMENTS. HENCE, WE DELETE THE ENTIRE ADDITION. ACCORDINGLY, GROUND NO .8 OF REVENUES APPEAL IS REJECTED, WHEREAS GROUND NO.3 OF ASSESSEES APPEAL IS ALLOWED. 26. GROUND NO.9 OR REVENUES APPEAL READS AS UNDER: - 9. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACT S IN DELETING THE ADDITION OF RS.50,00,000/- IN RESPECT OF UNACCOUNTE D LOAN GIVEN TO SHRI K.I.BAKSHI. 26.1. BRIEF FACTS REGARDING THIS ISSUE AND THE DECI SION OF THE LD.CIT(A) IS AS PER PARA-12 OF HIS ORDER WHICH IS REPRODUCED BELOW: 12. THE FOURTEENTH GROUND IS REGARDING AN ADDITION OF RS.50,00,000/- IN RESPECT OF K.I.BAKSHI MENTIONED IN PARA 37 OF TH E ASSESSMENT ORDER. THE ASSESSING OFFICER HAS MADE THE ABOVE ADDITION O N THE BASIS OF STATEMENT MADE BEFORE THE DDIT WHEREIN THE APPELLAN T STATED THAT HE HAD ADVANCED RS.50,00,000/-. HOWEVER, THE APPELLANT ST ATED THAT THE ASSESSING OFFICER DID NOT APPRECIATE THE COMPLETE F ACTS OF THE CASE AND IT(SS)A NOS.374 (BY REVENUE) & 375/AHD/2002(BY ASSESSEE) DCIT VS. KAWARJEETSINGH P.CHHABDA(L/H) BLOCK PERIOD - 1.4.89 TO 20.5.99 - 22 - HASTILY CONCLUDED THAT ADDITION OF RS.50 LAKHS IS T O BE MADE IN THE HANDS OF THE APPELLANT. IT IS EXPLAINED BY THE APPELLANT BEFORE ME THAT K.I.BAKSHI OF BOMBAY MET HIM AND PROMISED TO PAY LO AN OF RS.5000,000/- AT THE RATE OF 15%. SHRI BAKSHI GAVE A CHEQUE FOR RS.50,000/- WHICH COULD NEVER BE ENCASHED. THE PARTICULARS OF PROPER TIES GIVEN BY SHRI BAKSHI WERE ALSO FALSE AND IN FACT THERE WAS NO SUC H PROPERTY IN HIS NAME. IT WAS FURTHER CLARIFIED BY THE APPELLANT TH AT SHRI BAKSHI EVEN TOOK A FIAT CAR BUT NEVER RETURNED NOR COULD BE TRACED. IT WAS GATHERED FROM NEWSPAPER REPORT ONLY THAT SHRI K.I.BAKSHI DIED DUR ING EARTHQUAKE IN BHUJ. EXPLANATION OF THE APPELLANT IS FURTHER EXTR ACTED AS UNDER: IT IS RESPECTFULLY SUBMITTED THAT MR.BHARATBHAI BH ATT HAS INTRODUCED MR.K.I. BAKSHI AS A INDUSTRIALIST AND THE CHAIRMAN AND MANA GING DIRECTOR OF DEHYD FOODS LTD. AT BHUJ AND CHAIRMAN OF SAJAWAT GROUP OF COMPANIES AT BOMBAY AND ACCORDINGLY WE WERE HIGHLY IMPRESSED. HE HAS P URCHASED COSTLY PREMIUM CARS THOUGH US OFTER AND OFTEN. IN THE MEANTIME, HE OFFERED US TO ARRANGE LOANS AT A CHEAPER FROM FOREIGN COUNTRIES. THE APP ELLANT THEREFORE PAID HIM IN ADVANCE COMMISSION TO HIM AND RECEIVED CHEQUES O F RS.50,00,000/- FROM HIM AS A LOAN. MR.BAKSHI INFORMED APPELLANT THAT T HE LOANS SHALL BE ARRANGED WITHIN A FORTNIGHT AND AFTER A CALL FROM AMERICA TO DEPOSIT THE CHEQUE. THEREAFTER BAKSHI NEVER TURNED UP. THEREFORE IT WA S A CLEAR CASE OF CHEATING WITH YOUR APPELLANT. AFTER VARIOUS INQUIRIES, IT W AS CAME TO YOUR APPELLANTS NOTICE THAT MR.BAKSHI WAS A GREAT CHEATER, WHICH WA S CONFIRMED WHEN YOUR APPELLANT READ THE NEWS IN THE NEWSPAPER THAT MR.BA KSHI HAS MADE A CHEATING WITH THE PUNJAB NATIONAL BANK, DELHI FOR RS.33,00,0 0,000/-. THE SAID CUTTING IS ENCLOSED WITH THE SEIZED MATERIAL FOR YOUR READY REFERENCE. IT WAS ALSO CAME TO THE NOTICE TO THE APPELLANT THAT SECURITY E XCHANGE BOARD OF INDIA (SEBI) HAS ALSO LAUNCHED A CRIMINAL COMPLAINT AGAIN ST MR.K.I.BAKSHI (GUJARAT DEHYD LTD., BHUJ) FOR ISSUING BOGUS SHARES TO THE PUBLIC. THE EXPLANATION GIVEN BY THE APPELLANT HAS BEEN CAR EFULLY PERUSED BY ME. IT APPEARS THE ASSESSING OFFICER DID NOT MAKE EVEN AN ATTEMPT TO VERIFY WHETHER THE PERSON INVOLVED WAS ACTUALLY IN A POSIT ION TO ISSUE A CHEQUE OF SUCH AMOUNT. THE ASSESSING OFFICER HAS NOT BEEN ABLE TO BRING ON RECORD ANY MATERIAL INDICATING THAT THE APPELLANT W AS EITHER A RECIPIENT OR PAYEE OF SUCH A HUGE AMOUNT. THE WORST PART OF THE ADDITIONS MADE IN THE APPELLANTS CASE IS THAT THE SAME DO NOT MATCH WITH THE SEIZED VALUABLES OR ASSETS OWNED BY THE APPELLANT. THE AD DITION IS TOTALLY UNWARRANTED AND WITHOUT ANY CORROBORATIVE EVIDENCE. PERUSAL OF THE RELEVANT PARA OF THE ASSESSMENT ORDER REVEALS THAT THE ASSESSING OFFICER IT(SS)A NOS.374 (BY REVENUE) & 375/AHD/2002(BY ASSESSEE) DCIT VS. KAWARJEETSINGH P.CHHABDA(L/H) BLOCK PERIOD - 1.4.89 TO 20.5.99 - 23 - HAS MADE SUCH A HEAVY ADDITION IN A VERY CASUAL MAN NER. IN VIEW OF THESE FACTS ADDITION OF RS.50,00,000/- IS DELETED. 27. THE LD.DR OF THE REVENUE SUPPORTED THE ASSESSME NT ORDER, WHEREAS THE LD.AR OF THE ASSESSEE SUPPORTED THE ORDER OF THE L D.CIT(A). 28. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. FROM THE FACTS NOTED BY THE LD.CIT(A) IN PARA-12 AS REPRODUCED ABOVE, WE FIND T HAT A CHEQUE OF RS.50 LACS WAS GIVEN BY SHRI K.I.BAKSHI OF BOMBAY TO THE ASSES SEE FOR A LOAN @ 15%. THE SAID CHEQUE SHOULD NEVER BE ENCASHED. IT WAS ALSO SUBMITTED BY THE ASSESSEE BEFORE LD.CIT(A) THAT SHRI BAKSHI TOOK A FIAT-CAR OF THE ASSESSEE BUT NEVER RETURNED AND HE IS NOT TRACEABLE. IT IS ALSO SUBMI TTED BEFORE THE LD.CIT(A) THAT AS PER NEWSPAPER REPORT, SHRI K.I.BAKSHI HAS ALREAD Y DIED DURING EARTHQUAKE IN BHUJ. UNDER THESE FACTS, IN OUR CONSIDERED OPINION , NO SUCH ADDITION IS JUSTIFIED BECAUSE THE AO COULD NOT ESTABLISH THAT ANY AMOUNT WAS RECEIVED BY THE ASSESSEE FROM SHRI K.I.BHAKSHI OR ANY AMOUNT WAS G IVEN BY THE ASSESSEE TO SHRI BHAKSHI. HENCE, WE DECLINE TO INTERFERE WITH THE ORDER OF THE LD.CIT(A) ON THIS ISSUE. THEREFORE, GROUND NO.9 OF REVENUES APP EAL IS ALSO REJECTED. 29. GROUND NO.10 OF REVENUES APPEAL READS AS UNDER :- 10. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FAC TS IN DELETING THE PROTECTIVE ADDITION OF RS.7,50,000/- IN RESPECT OF UNACCOUNTED ADVANCE PAID TO SANJEEV RAJIV SHUKLA. 29.1. BRIEF FACTS REGARDING THIS ISSUE AND THE DECI SION OF THE LD.CIT(A) IS AS PER PARA-13 OF HIS ORDER WHICH IS REPRODUCED BELOW: 13. THE FIFTEENTH GROUND OF APPEAL IS REGARDING AN ADDITION OF RS.7,50,000/- IN RESPECT OF SANJIV RAJIV MENTIONED IN PARA 38 OF THE ASSESSMENT ORDER. THE APPELLANT HAS SUBMITTED THAT THE INVESTMENT IS NOT IT(SS)A NOS.374 (BY REVENUE) & 375/AHD/2002(BY ASSESSEE) DCIT VS. KAWARJEETSINGH P.CHHABDA(L/H) BLOCK PERIOD - 1.4.89 TO 20.5.99 - 24 - RELATED TO HIM BUT MADE BY SMT.MOHINDER KAUR SURI. THE ADDITION IS MADE ON PROTECTIVE BASIS. FACTS OF THE CASE INDICA TE THAT THE ASSESSING OFFICER DID NOT APPLY HIS MIND PROPERLY BECAUSE ACT ION WAS REQUIRED TO BE TAKEN IN THE HANDS OF THE CONCERNED PERSON. ADDITI ON CAN NOT BE MADE ON THE BASIS OF SOMEBODY ELSES PAPER LYING WITH THE A PPELLANT. IN VIEW OF THESE FACTS ADDITION OF RS.7,50,000/- IS DELETED. 30. THE LD.DR OF THE REVENUE SUPPORTED THE ASSESSME NT ORDER, WHEREAS THE LD.AR OF THE ASSESSEE SUPPORTED THE ORDER OF THE L D.CIT(A). 31. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE F IND THAT IT IS NOTED BY THE LD.CIT(A) THAT THE ADDITION IS MADE ON PROTECTIVE B ASIS. HE HAS ALSO GIVEN A FINDING THAT ADDITION CANNOT BE MADE ON THE BASIS O F SOMEBODY ELSES PAPER LYING WITH THE APPELLANT. THIS FINDING OF THE LD.C IT(A) COULD NOT BE CONTROVERT BY THE LD.DR OF THE REVENUE AND, HENCE, WE DECLINE TO INTERFERE WITH THE ORDER OF THE LD.CIT(A) ON THIS ISSUE ALSO. REVENUES GRO UND NO.10 IS REJECTED. 32. GROUND NOS.11 & 12 OF REVENUES APPEAL READ AS UNDER:- 11. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACT S IN ALLOWING SET- OFF OF THE AMOUNT OF RS.3,74,000/- REPRESENTING THE ADDITION MADE ON ACCOUNT OF LOANS GIVEN TO VARIOUS PARTIES, DISCUSSE D IN PARES 40 & 41 OF THE ASSESSMENT ORDER, AGAINST THE ADDITION OF RS.40 LAKHS SUSTAINED ON ACCOUNT OF INVESTMENT IN BUNGALOW. 12. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FAC TS IN DIRECTING TO ALLOW SET-OFF OF THE AMOUNT OF RS.53,258/- REPRESEN TING THE ADDITION MADE ON ACCOUNT OF UNACCOUNTED HOUSE-HOLD EXPENSES AGAIN ST THE ADDITION OF RS.40 LAKHS SUSTAINED ON ACCOUNT OF INVESTMENT IN B UNGALOW. 32.1. AS PER THESE GROUNDS, WE FIND THAT THE REVENU E IS DISPUTING REGARDING SET OFF ALLOWED BY LD.CIT(A) FOR THESE TWO AMOUNTS AGAI NST THE ADDITION OF RS.40 LAKHS SUSTAINED BY HIM ON ACCOUNT OF INVESTMENT IN BUNGALOW. SINCE BOTH THESE ADDITIONS ARE UPHELD BY THE LD.CIT(A) AND ONL Y SET OFF WAS ALLOWED BY IT(SS)A NOS.374 (BY REVENUE) & 375/AHD/2002(BY ASSESSEE) DCIT VS. KAWARJEETSINGH P.CHHABDA(L/H) BLOCK PERIOD - 1.4.89 TO 20.5.99 - 25 - HIM, WE DO NOT FIND ANY REASON TO INTERFERE WITH TH E ORDER OF LD.CIT(A) ON THIS ISSUE. ACCORDINGLY, BOTH THESE GROUNDS ARE REJECTE D. 33. GROUND NO.13 & 14 ARE GENERAL IN NATURE AND DO NOT CALL FOR ANY SEPARATE ADJUDICATION. 34. THE ONLY REMAINING GROUND IS GROUND NO.4 AS PER ASSESSEES APPEAL WHICH READS AS UNDER:- I4. ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CA SE, THE LD.CIT(A), HAS ERRED IN NOT DELETING THE ADDITION OF RS.5,00,000/- IN RESPECT OF ADVANCE TO SHRI SURESH JOITARAM EVEN THOUGH IT WAS FULLY EX PLAINED. 34.1. BRIEF FACTS REGARDING THIS ISSUE AND THE DECI SION OF THE LD.CIT(A) IS AS PER PARA-11 OF HIS ORDER WHICH IS REPRODUCED BELOW: 11.THE THIRTEENTH GROUND OF APPEAL IS REGARDING AD DITION OF RS.5,00,000/- ON ACCOUNT OF ADVANCE TO SHRI SURESH JOITARAM. THE ASSESSING OFFICER HAS MADE THE ABOVE ADDITION AFTER POINTING OUT THE DETAILS OF RECOVERY ETC. THE APPELLANT HAS STATED THAT THE ADDITION MADE ONLY AFTER DECODING 2+3 MEANING THEREBY RS.5,00,000 /-. HOWEVER, THE DETAILED ACCOUNTS REFLECTS THE AMOUNT HENCE EXPLANA TION GIVEN BY THE APPELLANT IS NOT VALID. THE ASSESSING OFFICER WAS JUSTIFIED IN MAKING THE ABOVE ADDITION HENCE THE SAME IS UPHELD. 35. THE LD.AR OF THE ASSESSEE REITERATED THE SAME A RGUMENTS WHICH WERE MADE BEFORE THE LD.CIT(A). THE DR OF THE REVENUE S UPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 36. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE F IND THAT A CLEAR FINDING IS GIVEN BY THE LD.CIT(A) THAT THIS ADDITION WAS MADE BY THE AO AFTER POINTING OUT THE DETAILS OF RECOVERY, ETC. HE HAS ALSO GIVEN A FINDING THAT IN ADDITION TO DECODING DONE BY THE AO, THE DETAILED ACCOUNTS ALSO REFLECT THE AMOUNT AND, THEREFORE, THE EXPLANATION OF THE ASSESSEE HAS NO M ERIT THAT THIS ADDITION IS NOT JUSTIFIED BECAUSE THE SAME IS ON THE BASIS OF DECOD ING DONE BY THE AO. WE, IT(SS)A NOS.374 (BY REVENUE) & 375/AHD/2002(BY ASSESSEE) DCIT VS. KAWARJEETSINGH P.CHHABDA(L/H) BLOCK PERIOD - 1.4.89 TO 20.5.99 - 26 - THEREFORE, UPHOLD THE ORDER OF THE LD.CIT(A) ON THI S ISSUE. GROUND NO.4 OF ASSESSEES APPEAL IS REJECTED. 37. IN THE COMBINED RESULT, REVENUES APPEAL IS DIS MISSED, WHEREAS ASSESSEES APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED ON THE DATE MENTIONED ON CAPTION PAGE SD/- SD/- ( D.K. TYAGI ) ( A. K. G ARODIA ) JUDICIAL MEMBER A CCOUNTANT MEMBER AHMEDABAD; DATED 24/ 09 /2013 ORDER P RONOUNCED ON 24.9.13 SD/- SD/- A.M. J.M. (TRM) (DKT) .).., %.../ T.C. NAIR, SR. PS - ' '(/ 0/,( - ' '(/ 0/,( - ' '(/ 0/,( - ' '(/ 0/,(/ COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. '#! / THE RESPONDENT. 3. ( $1 / CONCERNED CIT 4. $1() / THE CIT(A)-II, AHMEDABAD 5. /%45 '( , , / DR, ITAT, AHMEDABAD 6. 567 8& / GUARD FILE. -$ -$ -$ -$ / BY ORDER, #/( '( //TRUE COPY// 9 99 9/ // / ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DICTATION 16.9.13 (DICTATION-PAD 35 PAGES ATTACHED WITH THE FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 16.9.13 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH FAIR ORDER PLACED BEFORE OTHER MEMBER 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.25.9.13 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 25.9.13 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER