The Income Tax Office, Srinagar V. Sh Akash Amin, Srinagar

ITSSA 4/ASR/2014

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6842 (ITAT-AMRITSAR)
• Duration Of Justice: 4 year(s) 6 month(s) 14 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 02-01-2019
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 04-12-2018
• Assessment Year: misc
• Appeal Filed On: 18-06-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MALIK MUKHTAR AHMAD
• Assessee Lawyers: DEVENDER SINGH
• Keywords: Business income; Search and seizure; Block assessment; Documents seized
• Section: 143(3); 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR. BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER AND SH. N. K. CHOUDHRY, JUDICIAL MEMBER I. T. (SS) A. NO. 03/(ASR)/2014 BLOCK PERIOD : 01.04.1997 TO 11.05.2003 AKASH AMIN S/O ABDUL REHMAN BHAT MEDIA ENCLAVE, LAMBERT LANE THE BUND, SRINAGAR [PAN: ALDPB 5320N] VS. ASST. CIT, CIRCLE-3, SRINAGAR (APPELLANT) (RESPONDENT) I. T. (SS) A. NO. 04/(ASR)/2014 BLOCK PERIOD : 01.04.1997 TO 11.05.2003 ASST. CIT, CIRCLE-3, SRINAGAR VS. AKASH AMIN S/O ABDUL REHMAN BHAT MEDIA ENCLAVE, LAMBERT LANE THE BUND, SRINAGAR [PAN: ALDPB 5320N] (APPELLANT) (RESPONDENT) APPELLANT BY : SH. MALIK MUKHTAR AHMAD (ADV.) RESPONDENT BY: SH. DEVENDER SINGH, CIT-DR DATE OF HEARING: 04.12.2018 DATE OF PRONOUNCEMENT: 02.01.201 9 ORDER PER SANJAY ARORA, AM: THESE ARE CROSS APPEALS BY THE ASSESSEE AND THE REV ENUE, AGITATING THE PART ALLOWANCE OF THE ASSESSEES APPEAL CONTESTING HIS A SSESSMENT U/S. 158BC READ WITH SECTION 158BD AND SEC. 144/145 OF THE INCOME TAX AC T, 1961, DATED 31/12/2007 (FOR THE BLOCK PERIOD 01/4/1997 TO 11/5/2003), BY T HE COMMISSIONER OF INCOME TAX (APPEALS), JAMMU (CIT(A) FOR SHORT) VIDE HIS ORDE R DATED 27/3/2014. IT (SS)A NOS. 03&04/ASR/2014 (BP 01.04.1997 TO 11.05.2003) AKASH AMIN BHAT V. ASST. CIT 2 2. THE ASSESSEES APPEAL IS DELAYED BY A PERIOD OF THREE DAYS, WHICH WAS, UPON HEARING THE PARTIES, CONDONED BY THE BENCH ON 09.04 .2018, AND THE HEARING IN THE MATTER PROCEEDED WITH. THE DELAY, WE MAY MENTION, S TANDS EXPLAINED AS ON ACCOUNT OF POSTAL DELAY. 3. THE ASSESSMENT IS FRAMED U/S. 144, I.E., AS A BE ST JUDGMENT ASSESSMENT, PURSUANT TO A SEARCH U/S. 132 OF THE ACT ON 11.05.2 003 AT THE RESIDENCE AND BUSINESS PREMISES OF ONE, SH. GHULAM MOHI-UDIN BHAT , THE ASSESSEES BROTHER, BLOCK ASSESSMENT U/S. 158 BC IN WHOSE CASE WAS FRAM ED ON 31.05.2005. IT WAS ON THE BASIS OF THE EVIDENCES FOUND DURING THE SAID SE ARCH AND CONSEQUENT PROCEEDINGS THAT PROCEEDINGS U/S. 158 BC R/W SEC. 158BD WERE I NITIATED IN THE CASE OF THE ASSESSEE. THE VARIOUS GROUNDS RAISED IN APPEAL, ARE AS UNDER: 1. THAT THE CIT (APPEALS) ERRED IN LAW AND ON FACT S, WHILE REJECTING GROUND NO 2 IN OUR 1ST APPEAL. HE HAS MISQUOTED OUR PRAYERS, WERE IN H E, DISALLOWED OUR GROUND, WITH OBSERVATIONS THAT WE HAVE NOT QUESTIONED THE TIME L IMIT OF ASSESSMENT, BUT ONLY THE SERVICE OF NOTICES. 2. THAT THE CIT APPEALS J&K HAS ERRED ON FACTS, WHI LE REJECTING OUR 5 TH GROUND. WE HAD ARGUED THAT GOVERNMENT ADVERTISEMENTS COULD BE PUBL ISHED, ONLY AFTER FORMAL APPROVAL BY THE INFORMATION DEPARTMENT OF J&K GOVT, THE DATED O F APPROVAL BEING 26/03/2003. THE INCOME EARNED FROM THESE ADVERTISEMENTS, AS PER THE DOCUMENTS SEIZED IS FROM 28/03/2003. THE CIT APPEALS ERRED WHILE ALLOWING THE ASSESSMENT OF A.O, IN THIS REGARD. 3. THAT THE CIT APPEALS ERRED AGAIN ON FACTS, WHILE CONFORMING THE PROFIT AND LOSS FORMULATED BY THE A.O, AS NO NEWSPAPER, LOCAL OR NATIONAL, HAS EVER SHOWN NET PROFIT MARGIN OF MORE THAN TWO HUNDRED PERCENT. THE MEAGRE EXPENS ES SHOWN BY THE A.O CANNOT BE COMPARED, IN WHOLE OF THE COUNTRY. EVEN THE DCIT KA SHMIR IN HIS REMAND REPORT HAS POINTED TO THE FACT THAT THE EXPENSES ALLOWED ARE NOT SUFFI CIENT. 4. THAT THE CIT APPEALS J&K ERRED IN LAW WHILE ALLO WING THE ASSESSMENT BASED ON THE ASSUMPTIONS AND SURMISES. THE DOCUMENTS SEIZED WERE ALL IN SHAPE OF LOOSE SHEETS AND NO COMPLETE BOOKS WERE FOUND DURING THE SEARCH. THE DO CUMENTS FOUND DURING THE SEARCH AND SEIZURE, WERE NOT ASSESSED UPON, AS THE SALES FIGUR ES HAVE BEEN CALCULATED ON THE BASIS OF ASSUMPTIONS, THE APEX COURT AND DIFFERENT HIGH COUR TS HAVE TIME AND AGAIN HELD, THAT THE ASSESSMENTS IN CASE OF SEARCH AND SEIZURE, MUST BE ON THE BASIS OF THE MATERIALS SEIZED AND NOT ON PRESUMPTIONS. THE COURTS HAVE HELD IN VARIOU S CASES THAT ASSESSMENT BASED ON THE LOOSE SHEETS SEIZED IS BAD IN LAW. IT (SS)A NOS. 03&04/ASR/2014 (BP 01.04.1997 TO 11.05.2003) AKASH AMIN BHAT V. ASST. CIT 3 5. THAT THE CIT APPEALS J&K ERRED ON FACTS, WHILE U PHOLDING THE ASSESSMENT OF KPS BY THE A.O. THE FACT IS THAT EVEN TODAY KPS IS A NON P ROFIT EARNING NEWS SERVICE AND THE PURCHASERS OF THE NEWS FROM KPS ARE IN FACT THE NEW SPAPER VENDORS, TO WHO TAMELI IRSHAD NEWSPAPER SELLS NEWSPAPERS, WE URGED THIS FORUM TO KINDLY ANALYZE THE ANNEXURE ON WHICH THE ASSESSMENT IS BASED. 6. THAT THE CIT APPEALS ERRED ON FACTS WHILE, REJEC TING OUR GROUND, WHERE IN WE HAD ARGUED THAT THE ASSESSMENT BY THE A.O. IS BASED ON WRONG FACTS AND FIGURES. THE CIT APPEALS WHILE ALLOWING OUR GROUNDS HAS CONTRADICTED HIMSELF . THE ASSESSMENT IS NOT AT ALL BASED ON FACTS OR FIGURES, THE A.O. HAS NOT RELIED ON THE DO CUMENTS SEIZED BY HIM, BUT HAS ONLY TRIED TO CREATE AN EXCESSIVE DEMAND BASED ON ASSUMPTIONS. THE SAME, SAVE GROUND 1, ARE IN RESPECT OF THE QUAN TUM ASSESSMENT. GROUND 1 WAS NOT PRESSED DURING HEARING AND, ACCORDINGLY, NOT RE SPONDED TO BY THE OPPOSING SIDE. THE SAME IS ACCORDINGLY DISMISSED AS NOT PRES SED. THE LD. CIT(A) HAS IN FACT CORRECTLY APPRECIATED THE ISSUE, AND HELD, FOR THE REASONS STATED AT PARA 5 (READ WITH PARAS 4.1, 4.2 AND 4.2.1) OF HIS ORDER, THAT THERE WAS PROPER SERVICE OF THE NOTICE U/S. 158 BC R/W S. 158 BD. ON QUANTUM, THE ASSESSEE BEING FOUND TO BE THE OWNE R OF A NEWSPAPER BY THE NAME TAMEEL-I-IRSHAD (TII FOR SHORT), AS WELL A S RUNNING A NEWS AGENCY BY THE NAME KASHMIR PRESS SERVICE (KPS FOR SHORT), WAS ASSESSED AT RS.81,66,932/-, AS UNDER: INCOME FROM TAMEEL-I-IRSHAD FOR F. YEAR 2001-2002 RS.21,84,680/- INCOME FROM TAMEEL-I-IRSHAD FOR F. YEAR 2002-2003 RS.21,84,680/- INCOME FROM TAMEEL-I-IRSHAD FOR THE PERIOD 01/04/03 TO 11/05/03 RS. 2,49,420/- INCOME FROM SALE OF TAMEEL-I-IRSHAD FOR THE PERIOD 01/04/03 TO 11/05/03 RS.20,00,000/- INCOME FROM KASHMIR PRESS SERVICE FOR F. YEAR 2001- 2002 RS. 7,32,276/- INCOME FROM KASHMIR PRESS SERVICE FOR F. YEAR 2002- 2003 RS. 7,32,276/- INCOME FROM KASHMIR PRESS SERVICE FOR THE PERIOD 01 /04/03 TO 11/05/03 RS. 83,600/- AKASH AMIN BHAT BLOCK PERIOD 01-04-1997 TO 11-05-2003 TOTAL INCOME ASSESSED : RS.81,66,932/- IT (SS)A NOS. 03&04/ASR/2014 (BP 01.04.1997 TO 11.05.2003) AKASH AMIN BHAT V. ASST. CIT 4 THE WORKING OF THE INCOME WAS BASED ON THE CIRCULAT ION OF THE NEWSPAPER (TII), TAKING IT AS A DAILY NEWSPAPER, AS WELL AS THE SALE OF KPS, ON THE BASIS OF THE SEIZED MATERIAL. THE ASSESSEE IN THE APPELLATE PROCEEDINGS SHOWING, ON THE BASIS OF THE MATERIAL ON RECORD (ANNEXURE 1) THAT THE PAPER (TII ) WAS A WEEKLY UP TO NOVEMBER, 2002, I.E., HAD FOUR ISSUES PER MONTH, AS AGAINST 30, DIRECTED A PRO-RATA REDUCTION (I.E., AT 4:30) OF THE INCOME UP TO THAT DATE (30/11/2002). THE ADDITION TOWARD SALE OF BUSINESS (RS.20 LACS) WAS ALSO DELET ED. BOTH THE DELETIONS ARE SUBJECT MATTER OF THE REVENUES APPEAL, RAISING THE FOLLOWING TWO GROUNDS: 1. WHETHER THE COMMISSIONER OF INCOME TAX (APPEALS ), JAMMU WAS RIGHT IN LAW IN DELETING THE ADDITION ON ACCOUNT OF INCOME FROM SAL E OF NEWSPAPER (TAMEEL-I-IRSHAD) FOR THE PERIOD 01.04.2003 TO 11.05.2003. 2. WHETHER THE COMMISSIONER OF INCOME TAX (APPEALS) , JAMMU WAS RIGHT IN LAW IN DELETING THE ADDITION ON ACCOUNT OF INCOME FROM SAL E OF NEWSPAPER (TAMEEL-I-IRSHAD) TILL NOV. 2002. 4.1 WE SHALL TAKE UP THE ASSESSEES APPEAL FIRST. A T THE OUTSET, WE, HOWEVER, OBSERVE THAT THE FRAMING OF ASSESSMENT U/S. 144, I. E., AS A BEST JUDGMENT ASSESSMENT, IS NOT IN DISPUTE, HAVING NEITHER BEEN CONTESTED BEFORE THE FIRST APPELLATE AUTHORITY NOR BEFORE US. WE MAY AT THIS S TAGE ALSO CLARIFY THAT THE ASSESSMENT IS BASED ON THE SEIZED MATERIAL, AS IS R EQUIRED UNDER LAW TO BE, DRAWING INFERENCES THAT FLOW THERE-FROM. AS SUCH, TO CONTEN D, AS ASSESSEE DOES VIDE GD. 3, AND STRONGLY REFUTED BEFORE US BY THE LD. CIT-DR, T HAT THE ASSESSMENT IS BASED ON PRESUMPTION AND CONJECTURES, IS NOT CORRECT. WHY, T HE ASSESSMENT BEING OF UNDISCLOSED INCOME, AS DEFINED U/S. 158B, IT CANN OT PER SE TRAVEL OUTSIDE ITS PURVIEW. THE ONLY QUESTION THE ASSESSMENT BEING A BEST JUDGMENT ASSESSMENT, IS, THEREFORE, TO SEE IF THE INFERENCES DRAWN ARE REASO NABLE, OR STAND SATISFACTORILY REBUTTED BY THE ASSESSEE IN THE ASSESSMENT AND THE APPELLATE PROCEEDINGS. IN FACT, AS A PERUSAL OF THE APPELLATE ORDER REVEALS, THE LD. C IT(A) HAS ALSO, ACCEPTING THE IT (SS)A NOS. 03&04/ASR/2014 (BP 01.04.1997 TO 11.05.2003) AKASH AMIN BHAT V. ASST. CIT 5 ASSESSEES CONTENTION THAT THE MATTER IS PRIMARILY FACTUAL, ALSO CALLED FOR A REMAND REPORT FROM THE ASSESSING OFFICER (AO). TOWARD THIS , THE LD. COUNSEL FOR THE ASSESSEE, SH. AHMAD, WOULD SUBMIT WITH REFERENCE TO THE SEIZED MATERIAL (ANNEXURE-A8), PLACING A COPY OF THE SAME ON RECORD , THAT THE SAME RELATES TO THE SALE OF NEWSPAPER ONLY. THE AO HAD WRONGLY CONSIDER ED IT AS THE REVENUE OF THE NEWS AGENCY, WORKING OUT THE ASSESSEES INCOME (FRO M KPS) ON ITS BASIS. IN FACT, HE WOULD CONTINUE, THE AO WAS WRONG IN INFERRING TH E ASSESSEE TO BE RUNNING A SEPARATE, ALLIED BUSINESS OF THE NEWS AGENCY. DRAWI NG OUR ATTENTION TO ANNEXURE A-8, THE SAME, HE EXPLAINED, LISTS THE DETAILS OF T HE COPIES SUPPLIED TO DIFFERENT VENDORS DURING THE PERIOD FEBRUARY TO APRIL, 2003. THE FIGURE OF RS. 61023, WHICH IS TAKEN BY THE AO AS THE AVERAGE SALE OF THE NEWS AGENCY (KPS) FOR THE MONTHS OF FEB. TO APRIL, 2003, IS IN FACT THE CIRCULATION (SA LE) OF THE NEWSPAPER TII FOR THOSE MONTHS, I.E., IN NUMBERS. THE NAMES OF THE VARIOUS NEWS AGENCIES STATED THEREIN ARE IN FACT THAT OF THE VARIOUS NEWS VENDORS. THERE IS, ACCORDINGLY, NO SEPARATE INCOME OF KPS. ON BEING QUESTIONED, THEN, ABOUT THE BASIS OF THE CIRCULATION (SALE) FIGURES ADOPTED FOR TII WHICH, BASED ON SEIZED MATERIAL (AN NEXURE A18, BEING THE EXPENDITURE ON PRINTING), WORKED OUT AT 45,820, HE WOULD EXPLAIN THAT THE SAME IS NOT THE SALE FIGURE, BUT, AS APPARENT, THAT OF THE TOTAL NEWSPAPER PRINTED. WE FIND MERIT IN THE ASSESSEES CONTENTION EVEN AS, AS SUBM ITTED BY THE LD. CIT-DR, THE SALES FIGURES AS AVAILABLE FOR THE MONTHS COVERED B Y ANN. A8, BEING 60 K+ FOR FEBRUARY, 2003 AND 65K + FOR APRIL, 2003, BE SUBSTI TUTED INSTEAD OF THE ADMITTEDLY WRONG FIGURES TAKEN BY THE AO, TO NO REBUTTAL BY TH E LD. COUNSEL, SH. AHMAD. WE, ACCORDINGLY, DIRECT FOR DELETION OF THE INCOME OF K PS INCLUDED IN INCOME AS ASSESSED, I.E., AT RS. 15,48,152/- . WE MAY THOUGH HASTEN TO ADD THAT WHEN WE SAY SO, WE ARE NOT IN ANY MANNER STATING THAT KPS IS NO T A NEWS AGENCY, SEPARATE AND DISTINCT FROM THE NEWSPAPER TII, WHICH IT SURELY IS , BUT ONLY THAT NO MATERIAL IT (SS)A NOS. 03&04/ASR/2014 (BP 01.04.1997 TO 11.05.2003) AKASH AMIN BHAT V. ASST. CIT 6 RELATING TO ITS INCOME, OR INCOME GENERATED THERE- FROM, STANDS FOUND DURING SEARCH, SO THAT IT COULD NOT BE ASSESSED UNDER BLOC K ASSESSMENT. PER CONTRA, THE SALES FIGURES FOR THE MONTHS COVERE D BY ANNEXURE-A8 BE TAKEN ON THE BASIS OF THE ACTUALS, REVISING THE PUR CHASE COST ALSO CORRESPONDINGLY. WE ARE CONSCIOUS THAT THE SALES AS PER ANN. 8 MAY N OT REPRESENT TOTAL SALES FOR THE RELEVANT MONTHS; THE LD. COUNSEL, SH. AHMAD, HIMSEL F EXPLAINING DURING HEARING THE SAME TO BE THE LIST OF VENDORS LOCATED ON THE OUTSK IRTS OF SRINAGAR, SO THAT, CLEARLY, THE SAME IS NOT A COMPLETE DETAIL. THE UNDISCLOSED INCOME, HOWEVER, COULD ONLY BE DETERMINED ON THE BASIS OF MATERIALS FOUND DURING O R AS A RESULT OF SEARCH. EVEN THE CIRCULATION FIGURES ON THE BASIS OF SEIZED MATERIAL DO NOT SUGGEST A HIGHER SALES, WHICH MUST THEREFORE BE BASED ON ANN. 8 ONLY. WE MA Y HERE ALSO ADDRESS ANOTHER GRIEVANCE BY THE ASSESSEE, I.E., THAT THE FIGURES A VAILABLE ARE ONLY FOR THE MONTH OF FEBRUARY, 2003 ONWARDS, WHICH DATE HAS BEEN EXTRAPO LATED BY THE AO TO THE EARLIER PERIOD, I.E., FOR FY 2001-02 AND FY 2002-03, DURING WHICH THE NEWSPAPER WAS IN EXISTENCE . HOW, WE WONDER, THEN, THE ASSESSEE HAVING ADMITTE DLY NOT RETURNED ANY INCOME, MUCH LESS FROM THE NEWSPAPER, FOR THOSE YEA RS, THE AO WORKOUT HIS INCOME; IT BEING PERMISSIBLE TO DRAW REASONABLE INF ERENCES THEREFROM? THE CASE LAW IN THE MATTER IS LEGION EVEN AS WE MAY, ONLY TO SIGNIFY THE LAW IN THE MATTER, REFER TO THE DECISION IN CST V. H.M. ESUFALI H.M. ABDULALI [1973] 90 ITR 271 (SC). THERE IS NOTHING TO SUGGEST THAT THE CIRCULAT ION FOR THOSE YEARS WAS NOT THE SAME, OR IN THE SAME RANGE, I.E., AS OBTAINING FOR THESE, LATTER MONTHS (FEBRUARY TO APRIL, 2003). RATHER, THE ASSESSEE HAS HIMSELF EXPL AINED THE PAPER TO BE A WEEKLY UP TO NOVEMBER, 2002, SO THAT THE SALES AND INCOME WOULD NEED TO ADJUSTED DOWNWARD. ON THE CONTRARY, A WEEKLY SEEKING PERMISS ION FOR BEING ALLOWED TO ISSUE PAPER ON A DAILY BASIS ONLY SUGGESTS OF ITS G ROWING ACCEPTANCE AND POPULARITY WITH THE NEWS READING PUBLIC. IT IS, HOWEVER, REASO NABLE TO PRESUME THAT THE IT (SS)A NOS. 03&04/ASR/2014 (BP 01.04.1997 TO 11.05.2003) AKASH AMIN BHAT V. ASST. CIT 7 CIRCULATION WOULD STAND TO INCREASE ONLY WITH THE A CCEPTABILITY OF THE NEWSPAPER WITH THE PUBLIC, WHICH TAKES TIME. ACCORDINGLY, WE REGARD IT APPROPRIATE TO APPLY A DISCOUNT FACTOR OF 20% PER ANNUM, PROCEEDING ON CAL ENDAR-YEAR BASIS, SO THAT THE SALES SHOW A PROGRESSION OF 20% P.A., WHICH MAY BE EXHIBITED AS UNDER: YEAR SALES QUANTITY (SAY) REMARKS 1 APRIL TO DEC., 2001 900 @ 100 P.M. (SAY) JANUARY TO MARCH, 2002 360 1260 @ 120 P.M. 2 APRIL TO DEC., 2002 1080 @ 1 20 P.M. JANUARY TO MARCH, 2003 432 1512 @ 144 P.M. 3 APRIL TO MAY 11, 2003 197 197 @ 144 P.M. (#) (#) THE AVERAGE SALE FOR THE MONTHS OF FEBRUARY TO APRIL, 2003 WOULD STAND SUBSTITUTED FOR 144, A DERIVED FIGURE BASED ON INITIAL SALE OF 1 00, AND THE OTHER FIGURES WORKED OUT ACCORDINGLY. FURTHER, THE SALES FOR THE PERIOD APRIL, 2001 TO NO VEMBER, 2002, ARE TO BE FURTHER SCALED DOWN TO REFLECT THE FACT OF THE NEWSPAPER BE ING A WEEKLY UP TO NOVEMBER, 2002. WE SHALL ADVERT TO THIS ASPECT IN DETAIL LATE R, I.E., THE REDUCTION, DIRECTED IN THE RATIO OF 4:30 BY THE LD. CIT(A), WHILE CONSIDER ING THE REVENUES APPEAL. 4.2 THE ASSESSEE NEXT RAISES THE ISSUE THAT THE ADV ERTISEMENT FROM GOVERNMENT DEPARTMENTS, WHICH IS THE MAIN SOURCE OF REVENUE FO R A PAPER, AS ALSO IN FACT, AS PER THE WORKING BY THE AO, TABLED AS UNDER, CAME ABOUT ONLY W.E.F. APRIL, 2003 IN-AS- MUCH AS THE APPROVAL FOR GOVERNMENT ADVERTISEMENT W AS GIVEN TO THE NEWSPAPER ONLY ON 26.03.2003 (ANNEXURE-3/COPY ON RECORD): EXPENSES (IN RS.) INCOME (IN RS.) PURCHASE (A-18) 9,45,720 SALARIES (A-12) 2,52,000 SALE OF NEWSPAPER 10,99,680 SALE OF ADV. SPACE 23,62,720 IT (SS)A NOS. 03&04/ASR/2014 (BP 01.04.1997 TO 11.05.2003) AKASH AMIN BHAT V. ASST. CIT 8 ELECTRICITY, TELEPHONE & OTHERS (A-16, A-18) 80,000 PROFIT 21,84,680 TOTAL 34,62,400 34,62,400 THE SALE OF THE ADVERTISEMENT SPACE IS BASED ON ANN EXURE A-13, I.E., FOR THE MONTH OF APRIL, 2003. NO ADVERTISEMENT REVENUE CAN THUS B E TAKEN FOR THE PERIOD PRIOR TO APRIL, 2003. THAT IS, THE ADVERTISEMENT FROM GOVERN MENT DEPARTMENTS DURING APRIL, 2003, WHICH FORMS THE BASIS OF THE AOS WORK ING, CANNOT BE IMPUTED FOR THE PERIOD PRIOR TO APRIL, 2003. THE LD. CIT(A) HAS NOT REGARDED THIS AS A VALID ARGUMENT AS THE SAID APPROVAL BY THE DEPARTMENT OF INFORMATION OF THE GOVERNMENT OF J&K IS VIDE LETTER NUMBER 14/2003, DA TED 27.05.2003 , SO THAT THE ASSESSEES PLEA IS NOT TENABLE, I.E., ON THE FACE O F IT. THAT IS, THE COMMUNICATION BY THE DEPARTMENT OF INFORMATION, KASHMIR DIVISION, GO VERNMENT OF J&K, OF THE APPROVAL DATED 26.03.2003, IS ONLY VIDE ITS LETTER DATED 27.05.2003. THE ASSESSEE COULD THEREFORE RECEIVE IT EARLIEST BY 27/05/2003. THE ADVERTISEMENT FROM GOVERNMENT DEPARTMENTS PRIOR TO THIS PERIOD, IN APR IL 2003, REMAINS UNEXPLAINED. FURTHER, THE ADVERTISEMENTS INCLUDES THAT FROM MUNI CIPAL CORPORATION, SRINAGAR; NORTHERN RAILWAY, ETC., WHICH ARE NOT DEPARTMENTS O F THE GOVERNMENT OF J&K. THE REJECTION OF THE ASSESSEES CLAIM BY THE LD. CIT(A) IS, IN OUR VIEW, THEREFORE, VALID. WE MAY, HOWEVER, ADD THAT THE SALE OF ADVERTISEMENT SPACE, WHICH IS ALSO BASED ON CIRCULATION, BE ALSO WORKED OUT PROPORTIONATE TO TH E NEWSPAPER SALES, I.E., AS TABULATED HEREINABOVE, INASMUCH AS THE SAME CANNOT, SIMILARLY, BE REGARDED AS A CONSTANT, AND CAN ONLY BE REASONABLY BE EXPECTED TO HAVE INCREASED WITH TIME. THE ASSESSEE HAS ALSO IMPUGNED THE ESTIMATION OF TH E BUSINESS INCOME ON THE GROUND THAT THE MATERIAL FOUND IS NOT A VALID MATER IAL, I.E., BEING LOOSE SHEETS, ETC. IT (SS)A NOS. 03&04/ASR/2014 (BP 01.04.1997 TO 11.05.2003) AKASH AMIN BHAT V. ASST. CIT 9 THE ARGUMENT IS MISCONCEIVED. THE ONLY THING RELEVA NT IS IF THE MATERIAL FOUND IS A VALID MATERIAL, TO WHICH IN FACT THE PRESUMPTION OF TRUTH OF ITS CONTENTS WOULD ALSO APPLY IN VIEW OF S. 292C OF THE ACT. IN FACT, EACH DOCUMENT FOUND AND RELIED UPON IS, WE OBSERVE, ONE MAINTAINED IN THE REGULAR COURS E OF BUSINESS, VIZ. LEDGER, COPY OF BILLS, WORKING OF SALES, ADVERTISEMENT RECEIPT, ETC. WHY, THE ASSESSEE HAS, ON THE BASIS OF THE SAME DOCUMENTS, RAISED PLEAS AS TO WRO NG ESTIMATION, WRONG INFERENCE THEREFROM, ETC. WHICH HAS FOUND ACCEPTANCE BY THE L D. CIT(A), AS ALSO BY US. FURTHER, WE DO NOT OBSERVE ANY WILD GUESS BY THE RE VENUE NOR HAS ANY BEEN CONTENDED BEFORE US. THE ASSESSEE GETS PART RELIEF IN TERMS OF THE ABOVE. 5. WE, NEXT, COME THE REVENUES APPEAL. WE SHALL TA KE UP THE SECOND GROUND WHICH RELATES THE DELETION OF THE ADDITION ON ACCOU NT OF PROFIT OF THE NEWSPAPER TII, FIRST. THOUGH THE FORM B (ANNEXURE-1), AS FILED BY THE ASSESSEE AS ITS PUBLISHER/PRINTER/EDITOR WITH THE DEPUTY COMMISSION ER, KUPWARA, DECLARING THE CHANGE OF PERIODICITY OF THE PAPER FROM WEEKLY TO D AILY BASIS, IS DATED 26.09.2002, WE OBSERVE THAT NO DISPUTE HAS BEEN RAISED AT ANY S TAGE WITH REGARD TO THE SAME BEING A WEEKLY UP TO NOVEMBER, 2002. THE ONLY QUEST ION, THEREFORE, IS IF THE SCALING DOWN, APPLYING THE RATIO OF 4:30 ON THE INC OME DERIVED ON DAILY BASIS, IS CORRECT. WE FIND IT TO BE SERIOUSLY FLAWED, BOTH WA YS. FIRSTLY, THE PROPORTIONATE REDUCTION WOULD ONLY BE OF THE DIRECT INCOME AND EX PENDITURE, VIZ. SALES OF PRINT AS WELL AS ADVERTISEMENT, AND PURCHASES, AND NOT IN DIRECT EXPENDITURE . THIS IS AS THE ESTABLISHMENT EXPENDITURE, VIZ., ON SALARIES, ELECT RICITY, TELEPHONE ETC., WOULD REMAIN LARGELY THE SAME. THIS IS PARTICULARLY SO IN THE PRESENT CASE AS IT IS BEING INCURRED AT MINIMAL LEVELS. AS REGARDS THE SCALING DOWN DIRECTED ON THE BASIS OF A NUMBER OF ISSUES (4:30), THE WEEKLY AND DAILY A RE TWO SEPARATE AND INCOMPARABLE PRODUCTS, SO THAT THEIR NUMBER ALONE W ILL NOT BE DETERMINATIVE OF THE MATTER. A WEEKLY CANNOT BE CONSIDERED TO BE OF TH E SAME BULK AND, RESULTANTLY, IT (SS)A NOS. 03&04/ASR/2014 (BP 01.04.1997 TO 11.05.2003) AKASH AMIN BHAT V. ASST. CIT 10 PRICE, I.E., AS THE DAILY. IF NOT HAVING SEVEN (7 ) TIMES MORE PRINTED MATTER, A WEEKLY SURELY WOULD HAVE 2-3 TIMES THAT OF THE DAIL Y, AND ALSO PRIZED ACCORDINGLY, SAY AT RS.5-6 PER COPY, AS AGAINST RS.2 PER COPY AT WHICH THE TII (DAILY) IS PRICED (REFER FORM B). RATHER, THE CIRCULATION OF A DAILY BEING MORE AFFORDABLE AND FREQUENT, SHOULD BE MORE. IN FACT, EVEN APPLYING A STRAIGHT, LINEAR RATIO (ON THE BASIS OF FREQUENCY ALONE), AS THE LD. CIT(A) HAS, 1:7 IS MORE APPROPRIATE RATIO THAN 4:30, WHICH WORKS TO A RATIO OF 1:7.5. THE INCONGRUITY OF APPLYING SUCH A RATIO IS THAT IT PRESUMES THAT THE ASSESSEES TURNOVER, ALMOST OVERN IGHT, INCREASED 7(7.5) TIMES, AND WHICH WOULD BE PRESUMPTUOUS IN VIEW OF THE OTHE R INCIDENT FACTORS WHICH SUCH A RATIO OVERLOOKS. AN INCREASE OF 2-3 TIMES, HOWEVE R, IS NOT OUT OF BOUNDS. WE, ACCORDINGLY, PROPOSE A RATIO OF 1:3. ACCORDINGLY, T HE SALES AND DIRECT (PURCHASE) EXPENDITURE FOR THE PERIOD APRIL, 2001 TO NOVEMBER, 2002 (20 MONTHS) BE SCALED DOWN TO 1/3. THE ESTABLISHMENT EXPENDITURE IS TO BE ALLOWED IN FULL, I.E., AS ALREADY WORKED OUT. THE INCOME IS TO BE COMPUTED ACCORDINGL Y, ADOPTING THE CIRCULATION FIGURES AS INDICATED EARLIER, RATHER THAN AT THE CO NSTANT LEVEL AS TAKEN BY THE REVENUE FOR THE ENTIRE PERIOD. WE DECIDED ACCORDING LY. 6. WE, NEXT, CONSIDER THE DELETION QUA THE ADDITION OF RS.20 LACS ON THE BASIS THAT THE NEWSPAPER (TII) STANDS SOLD FOR THAT CONSI DERATION, OF WHICH A PART (RS.5 LACS) (BY WAY OF FIRST INSTALMENT) STANDS ALREADY R ECEIVED BY THE ASSESSEE ON APRIL 15, 2003. THE ASSESSEE STANDS ALLOWED RELIEF BY THE LD. CIT(A) ON THE BASIS THAT THE SAME IS BASED ON AN AFFIDAVIT BY A THIRD PARTY, WHO IS NEITHER THE OWNER NOR COMPETENT TO SELL THE SAME. FURTHER, THE AO, TO WHO M THIS MATTER WAS SPECIFICALLY REFERRED TO BY THE LD. CIT(A), HAS CHOSEN TO REMAIN SILENT THEREON, EVEN AS HE COULD HAVE VERIFIED THE AUTHENTICITY OF THE TRANSACTION, EXAMINING THE DEPONENT, SH. GHULAM MOHI-UD-DIN, AS WELL AS THE PERSON/S IN WHOS E FAVOUR THE PROPOSED TRANSFER IS MADE. BEFORE US, THE LD. COUNSEL, SH. A HMAD WOULD, BESIDES RELYING ON IT (SS)A NOS. 03&04/ASR/2014 (BP 01.04.1997 TO 11.05.2003) AKASH AMIN BHAT V. ASST. CIT 11 THE IMPUGNED ORDER, SUBMIT THAT THE ASSESSEE CONTIN UES TO BE THE OWNER OF THE NEWSPAPER TO DATE. HOW COULD THAT BE, HE WOULD ADD, IF HE HAD SOLD IT WAY BACK IN APRIL, 2003 ? BESIDES, THE TRANSFER OF A NEWSPAPER IS NOT A SIM PLE PROPERTY WHICH COULD BE SOLD MERELY ON THE BASIS OF AN AFFIDAVIT, AND WOULD ATTRACT THE PROVISIONS OF TRANSFER OF PROPERTY ACT, 1882. FURTHER, HOW COU LD AN AFFIDAVIT, EXECUTED ON APRIL 5, 2003, RECORD THE RECEIPT OF PAYMENT ON APR IL 15, 2003? THE LD. CIT(A) HAS, ACCORDINGLY, RIGHTLY DELETED THE SAID ADDITION . ON BEING QUESTIONED BY THE BENCH AS TO IF, THEN, THE ASSESSEE, BEING THE OWNER , HAD DISCLOSED ANY INCOME FROM THE SAID NEWSPAPER BUSINESS FOR THE SUBSEQUENT PERI ODS, HE COULD NOT FURNISH ANY SATISFACTORY ANSWER. THE LD. CIT-DR WOULD, ON THE OTHER HAND, SUBMIT TH AT SH. GHULAM MOHID-UD-DIN IS NOT, AND CANNOT BE REGARDED AS, A THIRD PARTY. THERE IS NO INCONSISTENCY IN THE SEIZED DOCUMENT IN-AS-MUCH AS IT IS A USUAL PRACTICE TO, AFTER EXECUTING A DOCUMENT, RECORD THE DATES OF PAYMENTS, AS ENVISAGED THEREIN, AND WHICH WOULD ONLY BE SUBSEQUENT, ON A PART/BACK SIDE THEREOF. THE PAYMENT IS IN CASH, AS APPARENT FROM THE ABSENCE OF ANY CHEQUE DE TAILS, SO THAT, BEING NOT ACCOUNTED OR OTHERWISE DISCLOSED BY THE ASSESSEE, I S UNDISCLOSED INCOME, AS WOULD THEREFORE BE, THE BALANCE RS.15 LACS, THE TRANSACTI ON ITSELF BEING UNDISCLOSED. FURTHER, IF THE AO HAD OMITTED OR FAILED TO VERIFY THE TRANSACTION, EVEN ASSUMING THE SAME TO FORM PART OF THE TERMS OF THE REFERENCE OF REMAND THERETO, THE LD. CIT(A) OUGHT TO HAVE DIRECTED HIM TO DO SO, SO THAT THE MATTER COULD BE DECIDED ON THE BASIS OF PROPER FINDINGS IN THE MATTER. 7. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. OUR FIRST OBSERVATION IS THE MATTER IS THAT THE SA ME IS PRINCIPALLY AND ESSENTIALLY FACTUAL, I.E., WHETHER THE DOCUMENT FOU ND COULD FORM A VALID BASIS OF SALE OF THE ASSESSEES NEWSPAPER BUSINESS IN THE FA CTS AND CIRCUMSTANCES OF THE CASE. THE STATUTORY PRESUMPTION IN THE MATTER IN LA W IS ENSHRINED U/S. 292C OF THE IT (SS)A NOS. 03&04/ASR/2014 (BP 01.04.1997 TO 11.05.2003) AKASH AMIN BHAT V. ASST. CIT 12 ACT, WHICH PROVIDES THAT, INTER ALIA , ANY DOCUMENT FOUND DURING SEARCH OR SURVEY IS TO BE REGARDED AS BELONGING TO THE PERSON FROM WHOS E POSSESSION AND CONTROL IT IS FOUND; THE CONTENTS OF THE DOCUMENT ARE TRUE AND, T HIRDLY, THE SIGNATURE/S AND THE HAND-WRITING IS OF THE PERSON TO WHOM IT PURPORTS. THE SECTION, WHICH IS IN CONSONANCE WITH THE PRINCIPLES OF COMMON LAW JURISP RUDENCE, IT SHALL BE APPARENT, IS ENACTED TO ESCHEW DISOWNING OF EVIDENCE FOUND DURING SEARCH/SURVEY, OR DUBBING THE SAME AS A DUMB DOCUMENT. THE ASSESSEE IN THE INSTANT CASE, TO BE FAIR TO HIM, HAS NEITHER DISOWNED THE DOCUMENT NOR STATE D IT TO BE A DUMB DOCUMENT. THE SAME, ACCORDINGLY, NEEDS TO BE EXPLAINED, PARTI CULARLY AS ITS CONTENTS ARE, BY LAW, PRESUMED TO BE TRUE. WHY, THE DOCUMENT, WHICH IS IN THE FORM OF AN ORIGINAL AFFIDAVIT, WAS EXECUTED BY SH. GHULAM MOHID-UD-DIN, CAN ONLY BE EXPLAINED BY HIM OR BY THE ASSESSEE, THE OWNER OF THE NEWSPAPER. DID THE BROTHERS PLAN TO DUPE THE PROPOSED BUYER BY PROJECTING HIM OR ACTING AS T HE OWNER? IT IS IN FACT, BY ANY STRETCH OF IMAGINATION, DIFFICULT TO REGARD HIM AS A THIRD OR AN OUTSIDE PARTY. THE SEARCH WAS AT HIS RESIDENCE AND BUSINESS PREMISES. ALL THE DOCUMENTS AND MATERIALS FOUND IN SEARCH ARE, THUS, FROM HIS PREMISES. IN FA CT, IT IS ONLY ON HIS STATEMENT THAT NOT HE, BUT THE ASSESSEE, HIS YOUNGER BROTHER, IS T HE OWNER OF THE NEWSPAPER TII, AND THAT HE WAS ONLY AN EMPLOYEE IN THE SAID PAPE R, FURNISHING THE REGISTRATION OF THE PAPER IN FORM B, DULY SIGNED BY THE ASSESSEE, T HAT THE REVENUE CAME TO THE CONCLUSION THAT IT IS THE ASSESSEE, AND NOT HE, WHO IS OWNER OF THE SAID PAPER, REGISTERED ON 29.06.1988. AGAIN, IT IS ON THE BASIS OF HIS STATEMENT THAT THE INCOME OF THE NEWS GATHERING AND CIRCULATING AGENCY KPS, STATED TO BE OPERATIVE SINCE 1984, WAS REGARDED AS ASSESSABLE IN THE ASSESSEES HANDS (REFER PG. 2 OF THE ASSESSMENT ORDER). THESE STATEMENTS HAVE NOT BEEN R EFUTED OR DISPUTED AT ANY STAGE, WHICH, WHERE SO, OUGHT TO HAVE IN FACT BEEN, HAVING JURISDICTIONAL IMPLICATIONS AS WELL, AT THE INCEPTION, AND THE ENTIRE PROCEEDINGS HAVE PROCEEDED ON THE TRUTH OF IT (SS)A NOS. 03&04/ASR/2014 (BP 01.04.1997 TO 11.05.2003) AKASH AMIN BHAT V. ASST. CIT 13 THOSE STATEMENTS. HOW COULD HE BE REGARDED AS A THIRD PARTY ? BY ALL ACCOUNTS, IT IS A FAMILY AFFAIR, WITH THE THIRD BROTHER, SH. MOHAMM ED AMIN BHATT, BEING ALSO INVOLVED THEREIN, EVEN THOUGH THE OWNERSHIP OF THE BUSINESS AND, INDUBITABLY, IS WITH THE ASSESSEE, AND WHICH COULD POSSIBLY BE FOR THE REASON THAT ONLY A PERSON WHO COULD FUNCTION AS AN EDITOR ASSUME THE RISK OF THE OWNERSHIP OF THE PAPER. IN FACT, ALL THE THREE BROTHERS WERE NOT AT THE PREMIS ES AT THE TIME OF SEARCH, AND APPARENTLY IN HIDING. IT IS NOT UNUSUAL FOR THE ELD ERS IN THE FAMILY TO AGREE TO A TRANSACTION, SIGNED BY ONE, IN PRESENCE OF WITNESSE S KNOWING BOTH THE SIDES, WHICH APPEARS SO IN THE PRESENT CASE AS WELL, WITH THE WI TNESSES BEING ALSO IN THE SAME TRADE, WITH ONE OF THEM, SH. ASHRAF BHATT S/O MOHAM MED SHABAN BHATT, EDITOR OF A DAILY ALSAFA, ALSO GUARANTEEING THE TRANSACTION O N BEHALF OF THE PURCHASER. WHERE IS THE QUESTION OF AN AFFIDAVIT BEING WITNESSED OR THE STATED TRANSACTION THEREIN BEING GUARANTEED, SO THAT THE SAME, NOTWITHSTANDING IT BEING TITLED AS AN AFFIDAVIT, IS IN THE NATURE OF AN AGREEMENT. THE EXECUTION OF THE DOCUMENT BY SH. GHULAM MOHID-UD-DIN, THUS, CANNOT BE DISMISSED ON THE BASI S OF HE BEING NOT THE OWNER OF THE BUSINESS. AS REGARDS THE CONTENTION THAT THE SA ME IS NOT A PROPER DOCUMENT OF SALE, IT IS NOBODYS CASE THAT IT IS. THE QUESTION BEFORE US IS NOT IF THE NEWSPAPER BUSINESS COULD BE VALIDLY SOLD ON THE BASIS OF THE SAID DOCUMENT. FOR ALL WE KNOW, THE SAID SALE WAS TO BE KEPT UNDISCLOSED, OR THE PR OPER DOCUMENT OF SALE, DISCLOSING A LOWER CONSIDERATION, EXECUTED LATER ON THE CONCLU SION OF THE TRANSACTION, WHICH WAS, AT THE TIME OF SALE, IN THE PROCESS OF BEING I MPLEMENTED. WHY, FOR THAT MATTER, THE AFFIDAVIT, WHICH IS NOT ON RECORD, MAY NOT EVEN BE NOTARIZED, BUT, IN VIEW OF SECTION 292C, IS A VALID AND TRUE DOCUMENT, UNLESS OF COURSE, WHICH IT HAS NOT BEEN, SHOWN OTHERWISE. THE MATTER, IT MAY BE APPRECIATED, IS TO BE EXAMINED NOT FROM A DE JURE STAND-POINT OR PERSPECTIVE BUT A DE FACTO ONE. WHO ARE THE PERSONS TO THE TRANSACTIONS; THEIR CREDENTIALS, AS ALSO THAT OF TH E WITNESSES AND THE GUARANTOR. ALL IT (SS)A NOS. 03&04/ASR/2014 (BP 01.04.1997 TO 11.05.2003) AKASH AMIN BHAT V. ASST. CIT 14 THE SIGNATURES, NONE OF WHICH HAS BEEN RESILED, ARE TRUE, I.E., OF THE PERSONS TO WHOM THEY PURPORT TO. THE EXISTENCE AND, IN FACT, T HE TRUTH OF THE AGREEMENT IS NOT IN DOUBT; I.E., IN LAW. IT IS NOT A CASE OF DOCUMEN T PERTAINING TO A THIRD PARTY BEING FOUND FROM THE PREMISES SEARCHED, THE EXISTENCE OF WHICH ALSO HAS NOT BEEN ADEQUATELY EXPLAINED. CONTINUING FURTHER, THE ASSESSEE NOT COOPERATING I N THE ASSESSMENT PROCEEDINGS, THE AO WAS CONSTRAINED TO FRAME A BEST JUDGMENT ASSESSMENT, THE STATUS OF WHICH AS SUCH IS NOT IN DISPUTE AND, THUS , CONFIRMED. THE ONLY CONDITION THEREFORE IS THAT THE SAME IS TO BE BASED ON MATERI AL ON RECORD, DRAWING REASONABLE INFERENCES THEREFROM. FURTHER, THE ASSESSMENT BEING OF UNDISCLOSED INCOME WOULD NECESSARILY BE LIMITED TO OR BASED ON THE MATERIAL FOUND IN OR AS A RESULT OF SEARCH. IT IS OPEN FOR AN APPELLATE AUTHORITY TO REAPPRAISE THOSE EVIDENCES AND DRAW DIFFERENT INFERENCE THERE-FROM, OR ARRIVE AT DIFFER ENT FINDING/S ON THE SAME MATERIALS, I.E., CONSIDERING THE EXPLANATION/S, IF ANY, AS ALREADY ADVANCED. IT IS, HOWEVER, NOT OPEN FOR IT TO SEEK FURTHER EXPLANATIO N OR CLARIFICATION THEREON. THAT WOULD AMOUNT TO CONVERTING A SECTION 144 ASSESSMENT INTO A SECTION 143(3) ASSESSMENT. REFERENCE IN THIS CONTEXT BE MADE TO TH E DECISION IN CIT V. RAYALA CORPORATION PVT. LTD . [1995] 215 ITR 883 (MAD). BE THAT AS IT MAY, THE LD. CIT(A) HAVING REMANDED THE MATTER BACK TO THE AO TO ENABLE THE ASSESSEE ANOTHER OPPORTUNITY TO CANVASS HIS CASE, THE MATTER CANNOT BE DECIDED IN THE ABSENCE OF THE ASSESSEE FURNISHING AN EXPLANATION IN THE SAID PROC EEDINGS, LEADING TO A POSITIVE FINDING/S BY THE AO, OR EVEN GRANTING HIS CONFIRMIN G HIS EARLIER FINDINGS, THEIR REVERSAL, BY ISSUING A POSITIVE FINDING/S IN REVERS AL/MODIFICATION OF THAT BY THE AO, BY THE FIRST APPELLATE AUTHORITY. THAT IS, THE BASI S OF A REVISION COULD ONLY BE THE EXPLANATION/S OR CLARIFICATION/S ISSUED BY THE ASSE SSEE, WHICH IS CONSPICUOUS BY ITS ABSENCE. THE AOS SILENCE COULD THEREFORE NOT BE IN TERPRETED AS A REVERSAL OF HIS IT (SS)A NOS. 03&04/ASR/2014 (BP 01.04.1997 TO 11.05.2003) AKASH AMIN BHAT V. ASST. CIT 15 EARLIER FINDINGS, MORE SO, AS IT APPEARS, IN THE AB SENCE OF ANY PLEADINGS MADE BY THE ASSESSEE. THAT IS, THE ABSENCE OF ANY FINDINGS IN T HE REMAND PROCEEDINGS COULD NOT PER SE BE A GROUND TO OBLITERATE HIS EARLIER FINDINGS. IN SHORT, THE SILENCE OR THE ABSENCE OF ANY FINDINGS IN THE REMAND PROCEEDINGS W OULD NOT OPERATE TO REVERSE THE EARLIER FINDING WHICH COULD ONLY BE ON THE BASIS OF , AS AFORE-NOTED, A POSITIVE FINDING/S. THE AO OMITTING TO DO SO, IT WAS INCUMBE NT ON THE LD. CIT(A) TO SEEK HIS SPECIFIC OBSERVATIONS IN THE MATTER, IN CASE HE CON SIDERED IT RELEVANT TO DO SO, OF COURSE, AFTER PROVIDING OPPORTUNITY OF HEARING TO T HE ASSESSEE. AS EXPLAINED IN KAPURCHAND SHRIMAL V. CIT [1981] 131 ITR 451 (SC), AN APPELLATE AUTHORITY HA S THE JURISDICTION AS WELL AS THE DUTY TO CORRECT ALL ERRORS IN THE PROCEEDINGS UNDER APPEAL AND TO, IF NECESSARY, APPROPRIATE DIRECTIONS TO THE AUTHORITY AGAINST WHOSE DECISION THE APPEAL IS PREFERRED IN DISPOSING THE M ATTER BEFORE IT. IN THE INSTANT CASE WE OBSERVE THAT THE LD. CIT(A) HIMSELF OBSERVES THA T THE AO OUGHT TO HAVE VERIFIED AND EXAMINED THE AUTHENTICITY OF THE TRANSACTION. WHAT, THEREFORE, WE WONDER, PREVENTED HIM FROM REQUIRING THE AO TO DO SO ? IT WAS EQUALLY OPEN FOR THE LD. CIT(A) TO ISSUE HIS INDEPENDENT FINDINGS ON THE BAS IS OF THE SAME MATERIAL AND THE SAME SET OF EXPLANATIONS, I.E., WITHOUT EXTENDING T HE SCOPE OF THE ENQUIRY OR VERIFICATION AS BY THE AO. IT IS, AS EXPLAINED IN RAYALA CORPORATION PVT. LTD . (SUPRA), AFTER ALL, THE BEST JUDGMENT OF THE ASSESS ING AUTHORITY, AND NOT OF ANY OTHER. AS SUCH, NO POSITIVE INFERENCE COULD BE DRAWN UNDER THE CIRCUMSTANCES BY THE LD. CIT(A), AS SOUGHT TO BE BY HIM, FROM THE AO REMAINI NG SILENT IN THE REMAND REPORT, EVEN AS THE TERMS OF REFERENCE THEREOF, NOT ON RECORD, MAY HAVE INCLUDED THE SAID ADDITION. WE HAVE ALREADY CONSIDERED THE OTHER ARGUMENTS THAT PREVAILED WITH THE LD. CIT(A), FINDING THEM AS NOT VALID. THE STAT UTORY PRESUMPTION OF SEC.292C HAS TO BE ADEQUATELY MET, AND WHICH WE FIND HAS NOT BEEN. IT (SS)A NOS. 03&04/ASR/2014 (BP 01.04.1997 TO 11.05.2003) AKASH AMIN BHAT V. ASST. CIT 16 UNDER THE CIRCUMSTANCES, WE ONLY CONSIDER IT PROPE R TO RESTORE THE MATTER BACK TO THE FILE OF THE AO TO ALLOW THE ASSESSEE TO REBUT THE STATUTORY PRESUMPTION IN RELATION TO THE TRUTH OF THE DOCUMENT DATED APRI L 5, 2003 FOUND DURING SEARCH, PURPORTING TO SELL THE ASSESSEES NEWSPAPER BUSINES S FOR A CONSIDERATION OF RS.20 LACS, BY LEADING POSITIVE EVIDENCES TO THE CONTRARY . WE DO SO GIVING THE ASSESSEE A BENEFIT OF DOUBT OF BEING PREVENTED BY SUFFICIENT C AUSE FOR NOT BEING ABLE TO REPRESENT HIS CASE AT THE ASSESSMENT STAGE, I.E., I N THE FACT AND CIRCUMSTANCES OF THE CASE. THE AO SHALL EXAMINE ALL ASPECTS OF THE MATTE R. WHY, FOR INSTANCE, THE DOCUMENT WAS EXECUTED IN THE FIRST PLACE? THE ASSES SEES ARGUMENT THAT THE TRANSACTION WAS NOT CARRIED THROUGH, WHERE CANVASSE D, MAY ALSO BE EXAMINED ON MERITS. WAS THE DEAL ABORTED, OR WAS IT SUSPENDED I N VIEW OF THE SEARCH OPERATION? FURTHER, THE LEGAL IMPORT OF IT BEING CANCELLED LAT ER, WHICH COULD WELL BE TRUE, WOULD ALSO HAVE TO BE EXAMINED, I.E., ASSUMING SUCH A FINDING BY THE AO. WAS THE AMOUNT, DULY RECEIVED, REFUNDED BACK? THAT IS, COUL D IT, ON THE BASIS OF THE SAID CANCELLATION, BE SAID THAT NO CAPITAL GAIN ACCRUED TO THE ASSESSEE? THE AO SHALL DECIDE IN ACCORDANCE WITH LAW, ISSUING DEFINITE FIN DINGS OF FACT, AFTER HEARING THE ASSESSEE AND THE EVIDENCES LED BY HIM. IT IS AN OPE N SET ASIDE, AND WE MAY NOT BE CONSTRUED AS HAVING ISSUED ANY DEFINITE FINDINGS OF FACT. FURTHER, SUBJECT TO THE FULFILLMENT OF THE CONDITIONS OF SECTION 150 AND OT HER APPLICABLE PROVISIONS, IT IS OPEN FOR THE AO TO TAKE THE STEPS CONSEQUENT TO THE SAID PROCEEDINGS. WE DECIDE ACCORDINGLY. 8. IN THE RESULT, BOTH THE ASSESSEES AND REVENUES APPEALS ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON JANUARY 02, 2 019 SD/- SD/- (N. K. CHOUDHRY) (SANJAY ARORA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 02.01.2019 IT (SS)A NOS. 03&04/ASR/2014 (BP 01.04.1997 TO 11.05.2003) AKASH AMIN BHAT V. ASST. CIT 17 /GP/SR PS. COPY OF THE ORDER FORWARDED TO: (1) THE APPELLANT: AKASH AMIN S/O ABDUL REHMAN BHAT MEDIA ENCLAVE, LAMBERT LANE THE BUND, SRINAGAR (2) THE RESPONDENT: ASST. CIT, CIRCLE-3, SRINAG AR (3) THE CIT(APPEALS), JAMMU (4) THE CIT CONCERNED (5) THE SR. DR, I.T.A.T. TRUE COPY BY ORDER