M/s. Patliputra International Trading Ltd., Noida V. DCIT, New Delhi

ITSSA 4/DEL/2012

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 3720 (ITAT-DELHI)
• Duration Of Justice: 6 year(s) 3 month(s) 13 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 24-04-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 12-06-2017
• Assessment Year: misc
• Appeal Filed On: 11-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARAMITA TRIPATHY
• Keywords: Principle of natural justice; Block assessment
• Section: 143(3); 132; 15

Judgement Text

1 IT(SS)A NO. 6 & ORS/DEL/2012 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: F NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT ME MBER AND MS SUCHITRA KAMBLE, JUDI CIAL MEMBER IT(SS) A .NO. 6/DEL/2012 (A.Y 1/4/198 6 TO 27/6/1996) KANDLA PETRO CHEMICALS CORPORATION LTD. E-10, SECTOR-15 NOIDA AACK4740L (APPELLANT) VS DCIT CENTRAL CIRCLE-23 NEW DELHI (RESPONDENT) IT(SS) A .NO. 4/DEL/2012 (A.Y 1/4/1986 TO 08/07/1996) PATLIPUTRA INTERNATIONAL TRADING LTD. E-10, SECTOR-15 NOIDA AAACP7221N (APPELLANT) VS DCIT CENTRAL CIRCLE-23 NEW DELHI (RESPONDENT) IT(SS) A .NO. 1/DEL/2012 (A.Y 1/4/198 6 TO 27/6/1996) ANNIE INVESTMENT AND FIANNCE PVT. LTD. E-10, SECTOR-15 NOIDA AAACA9913F (APPELLANT) VS DCIT CENTRAL CIRCLE-23 NEW DELHI (RESPONDENT) APPELLANT BY SH. VINOD KUMAR BINDAL, CA RESPONDENT BY SMT. PARAMITA TRIPATHY, CIT(DR) ORDER PER BENCH THESE APPEALS ARE FILED BY THE ASSESSEE AGAINST THE ORDERS DATED 12/12/2011 PASSED BY DCIT, NEW DELHI. DATE OF HEARING 06.02.2018 DATE OF PRONOUNCEMENT 2 4 .04.2018 2 IT(SS)A NO. 6 & ORS/DEL/2012 2. THE GROUNDS OF APPEAL ARE AS UNDER:- IT(SS) A .NO. 6/DEL/2012 1. THE ASSESSING OFFICER ERRED IN LAW AND ON FACTS IN MAKING ADDITIONS OF THE AMOUNTS DEPOSITED IN BANK OF THE ASSESSEE OTHER THAN RECEIVED FROM MR. ANIL SANGHI IGNORING THE FACTS AND EVIDENCES PLACED ON RECORD TO PROVE THE SOURCE OF SUCH DEPOSIT AND WITHOUT RAISING ANY QUER Y IN THIS REGARD. THUS THE SAID ADDITIONS SHOULD BE DELETED. 2. THE ASSESSING OFFICER ERRED IN LAW AND ON THE FA CTS IN MAKING AN ADDITION OF RS. 1,0007- BEING CASH DEPOSITED FOR OP ENING THE BANK ACCOUNT OF THE ASSESSEE OUT OF CASH IN HAND AVAILABLE WITH THE ASSESSEE ON ACCOUNT OF SUBSCRIPTION MONEY OF RS. 7,000/- RECEIVED FROM 7 I NITIAL SUBSCRIBERS. THUS THE ADDITION SO MADE SHOULD BE DELETED. 3. THE ASSESSING OFFICER ERRED IN LAW AND ON THE FA CTS IN MAKING AN ADDITION OF RS. 1,24,000/- RECEIVED BY THE ASSESSEE FROM M/S ANNIE INVESTMENT & FINANCE P LIMITED THROUGH BANKING CHAN NEL IGNORING THE FACTS AND EVIDENCES PLACED ON RECORD TO PROVE THE SOURCE OF DEPOSIT. THUS THE ADDITION SO MADE SHOULD BE DELETED. 4. THE ASSESSING OFFICER ERRED IN LAW AND ON THE FA CTS IN MAKING AN ADDITION OF RS. 25,00,000/- 'RECEIVED BY THE ASSESS EE FROM M/S GANPATI INVESTMENT CONSULTANTS WITHOUT PROPERLY APPRECIATIN G THE FACTS AND EVIDENCES PLACED ON RECORD AND WITHOUT RAISING ANY FURTHER QU ERY IN THIS REGARD. THUS THE ADDITION SO MADE SHOULD BE DELETED. 5. THE ASSESSING OFFICER ERRED IN LAW AND ON FACTS IN MAKING AN ADDITION OF RS(69,863/- IN AY 1996-97 BEING INTEREST ON FDR WIT H ANDHRA BANK IGNORING THE FACTS AND EVIDENCES PLACED ON RECORD THAT TRAN SACTIONS REGARDING FDR WERE DULY RECORDED IN THE BOOKS OF ACCOUNT AND THE INTEREST THEREON WAS DULY DECLARED AS INCOME IN THE REGULAR RETURN OF INCOME. THUS THE ADDITION SO MADE SHOULD BE DELETED. 6. WITHOUT PREJUDICE TO THE ABOVE SUBMISSIONS, IF T HE ADDITION OF RS. 69,863/- IS SUSTAINED IN THE BLOCK ASSESSMENT PERIO D, THEN DIRECTIONS SHOULD BE ISSUED TO EXCLUDE THE SAID INCOME OFFERED FOR TA XATION IN THE REGULAR ASSESSMENT AS THE SAME INCOME CANNOT BE TAXED TWICE . 7. THE ASSESSING OFFICER ERRED IN LAW AND ON FACTS IN MAKING AN ADDITION OF RS. 8,76,576/- IN THE AY 1997-98 BEING INTEREST ON DEPOSITS WITH COMPANIES IGNORING THE FACTS AND EVIDENCES PLACED ON RECORD T HAT TRANSACTIONS REGARDING DEPOSITS WERE DULY RECORDED IN THE BOOKS OF ACCOUNT AND THE INTEREST THEREON WAS DULY DECLARED AS INCOME IN THE REGULAR RETURN O F INCOME FILED BEFORE DUE DATE. THUS THE ADDITION SO MADE SHOULD BE DELETED. 3 IT(SS)A NO. 6 & ORS/DEL/2012 8. WITHOUT PREJUDICE TO THE ABOVE SUBMISSIONS, IF T HE ADDITION OF RS. 8,76,576/- IS SUSTAINED IN THE BLOCK ASSESSMENT PER IOD, THEN DIRECTIONS SHOULD BE ISSUED TO EXCLUDE THE SAID INCOME OFFERED FOR TAXATION IN THE REGULAR ASSESSMENT AS THE SAME INCOME CANNOT BE TAXED TWICE . 9. THE ASSESSING OFFICER ERRED IN LAW AND ON THE FA CTS IN MAKING AN ADDITION OF RS. 49,60,000/- ON THE BASIS OF ENTRIES IN SEIZED MATERIAL FOUND DURING THE COURSE OF SEARCH IN THE CASE OF MR. ANIL SANGHI ON 1/11/96 AND WITH A PREDETERMINED AND PREJUDICED MIND BY ALLEGIN G THAT NO DIRECTIONS WERE GIVEN BY THE HONBLE ITAT ON THIS ISSUE AND IGNORIN G THE FACTS AND EVIDENCES PLACED ON RECORD. THUS THE ADDITION SO MADE SHOULD BE DELETED. 10. THE ASSESSING OFFICER ERRED IN LAW AND ON THE F ACTS IN MAKING AN ADDITION OF RS. 2,02,695/- ON THE BASIS OF ENTRIES IN SEIZED MATERIAL FOUND DURING THE COURSE OF SEARCH IN THE CASE OF MR. ANIL SANGHI ON 1/11/96 AND WITH A PREDETERMINED AND PREJUDICED MIND BY ALLEGIN G THAT NO DIRECTIONS WERE GIVEN BY THE HONBLE ITAT ON THIS ISSUE AND IGNORIN G THE FACTS AND EVIDENCES PLACED ON RECORD. THUS THE ADDITION SO MADE SHOULD BE DELETED. 11. THE ASSESSING OFFICER ERRED IN LAW AND ON THE F ACTS IN MAKING AN ADDITION OF RS. 10,96,405/- ON THE BASIS OF ENTRIES IN SEIZED MATERIAL FOUND DURING THE COURSE OF SEARCH IN THE CASE OF MR. ANIL SANGHI ON 1/11/96 AND WITH A PREDETERMINED AND PREJUDICED MIND BY ALLEGIN G THAT NO DIRECTIONS WERE GIVEN BY THE HONBLE ITAT ON THIS ISSUE AND IGNORIN G THE FACTS AND EVIDENCES PLACED ON RECORD. THUS THE ADDITION SO MADE SHOULD BE DELETED. THE APPELLANT CRAVES THE LEAVE TO ADD, SUBSTITUTE, MODIFY, DELETE OR AMEND ALL OR ANY GROUND OF APPEAL EITHER BEFORE OR AT THE TIME OF HEARING . 3. THE ASSESSEE COMPANY IS RELATED TO SHRI PRAKASH CHANDRA YADAV GROUP OF CASES. SHRI PRAKASH CHANDRA YADAV IS ALLEG EDLY THE KEY PERSON ACCUSED IN THE RS.133-CRORE UREA IMPORT SCANDAL. SE ARCH WARRANT U/S 132 (1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED THE ACT) WAS ISSUED IN THE CASE OF THE ASSESSEE ON 27/06/1996 COVERING ITS BAN K ACCOUNT NUMBER 2385 IN ANDHRA BANK, ASAF ALI ROAD, NEW DELHI, WHIC H WAS EXECUTED ON 20/09/1996. THEREAFTER, NOTICE U/S 158 BC OF THE AC T WAS ISSUED ON 07/04/1997 AND ASSESSMENT U/S 158 BC (C) OF THE ACT WAS COMPLETED ON 29/09/1997 AT AN UNDISCLOSED INCOME OF RS. 3,97,46, 539/- AGAINST THE RETURNED UNDISCLOSED INCOME OF RS. NIL. 4. THE ASSESSEE FILED AN APPEAL AGAINST THIS ORDER BEFORE THE ITAT, NEW 4 IT(SS)A NO. 6 & ORS/DEL/2012 DELHI. THE ITAT, NEW DELHI VIDE ITS ORDER DATED 17/ 03/2006 IN IT(SS)A NO. 244/DEL/1997 OBSERVED THAT WARRANT OF AUTHORIZATION WAS NEVER ISSUED, NO SEARCH WARRANT WAS PRODUCED BEFORE IT FOR VERIFICAT ION. THUS, THE ITAT HELD THAT THE BLOCK ASSESSMENT PROCEEDINGS AS VOID AB IN ITIO. ACCORDINGLY, THE ASSESSMENT WAS DECLARED AS INVALID AND WAS QUASHED BY THE ITAT, NEW DELHI. THE DEPARTMENT FILED APPEAL BEFORE THE HON'B LE HIGH COURT OF DELHI AGAINST THIS ORDER AND PRODUCED THE WARRANT OF AUTH ORISATION BEFORE IT. THEREAFTER, THE HONBLE DELHI HIGH COURT VIDE ITS O RDER DATED 31/10/2007 RESTORED THE APPEAL TO THE ITAT, DELHI FOR CONSIDER ING IT AFRESH. 5. THE ITAT, NEW DELHI VIDE ITS ORDER DATED 30/04/2 008 IN IT(SS)A NO. 244/DEL/1997, HELD THAT THE BLOCK ASSESSMENT WAS NO T VALID BECAUSE SEARCH WARRANT ISSUED U/S 132 (1) WAS ILLEGAL; THE ASSESSMENT ORDER PASSED BY THE AO ON 29/09/1997 WAS PASSED BEYOND THE DATE OF LIMITATION SPECIFIED U/S 158 BE OF THE ACT AND ALSO THAT THE W ARRANT OF AUTHORIZATION SIGNED BY THE ADDITIONAL DIRECTOR OF INCOME TAX WAS WITHOUT ANY AUTHORITY. THE DEPARTMENT FILED AN APPEAL BEFORE THE HON'BLE H IGH COURT OF DELHI AGAINST THIS ORDER. THE HONBLE HIGH COURT VIDE ITS ORDER DATED 30/11/2009 HELD THAT THE WARRANT SIGNED BY THE ADDITIONAL DIRE CTOR OF INCOME TAX WOULD NOT BE INVALID AS HE HAD THE NECESSARY AUTHORITY, I N VIEW OF THE AMENDED PROVISIONS OF THE SECTION 132 OF THE ACT. ACCORDING LY, THE HON'BLE HIGH COURT SET ASIDE THE JUDGMENT OF THE TRIBUNAL AND RESTORED BACK THE APPEAL TO THE FILE OF THE TRIBUNAL FOR DECISION ON MERITS. 6. CONSEQUENTLY, THE ITAT, DELHI BENCH 'A', NEW DE LHI VIDE ITS ORDER DATED 10/01/2011 IN IT(SS)A NO. 244/DEL/97, SET ASI DE AND RESTORED BACK THE ISSUES INVOLVED IN THE APPEAL OF THE ASSESSEE T O THE FILE OF THE AO WITH THE DIRECTION TO DECIDE THE ISSUES IN QUESTION IN T HE LIGHT OF ITS OBSERVATIONS IN THE CASE OF M/S PATLIPUTRA CREDIT AND SECURITIES LIMITED IN IT(SS)A NO. 372/DEL/97 DATED 17/03/2006, AND IN IT(SS)A NO. 10/ DEL/08 DATED 31/03/2009. 7. IN ORDER TO COMPLY WITH THE DIRECTIONS OF THE I TAT, NOTICES U IS 143(2) AND 42(1) OF THE INCOME TAX ACT, 1961 ALONGWITH QUE STIONNAIRE WERE ISSUED 5 IT(SS)A NO. 6 & ORS/DEL/2012 TO THE ASSESSEE, ON 03/08/2011 FOR COMPLIANCE OF DI RECTION ISSUED ON 12/08/2011. IN RESPONSE TO THESE NOTICES, SHRI ANIL SANGHI, DIRECTOR OF THE COMPANY ATTENDED THE PROCEEDINGS AND FILED NECESSAR Y DETAILS AND CLARIFICATIONS WHICH WAS PLACED ON RECORD BY THE AS SESSING OFFICER. THE DETAILS SUBMITTED WERE DISCUSSED WITH HIM BY THE AS SESSING OFFICER. THE ASSESSING OFFICER MADE VARIOUS ADDITIONS AND PASSED ORDER DATED 12/12/2011 U/S 158 BC (C) /254 OF THE INCOME TAX AC T. 8. BEING AGGRIEVED BY THE SAME, THE ASSESSEE FILED APPEAL BEFORE US. 9. AS RELATES TO GROUND NOS. 1 AND 2 ADDITION OF RS . 1,000/- IN A.Y. 1996-97, THE LD. AR SUBMITTED THAT THIS ADDITION WA S MADE FOR THE AMOUNT OF RS. 1,000/- WHICH WAS DEPOSITED IN CASH IN A/C N O. 2385, IN ANDHRA BANK, ASAF ALI ROAD, NEW DELHI OF THE ASSESSEE ON 2 7.01.1996. THE LD. AR SUBMITTED THAT THE ASSESSEE RECEIVED RS. 7,000/- IN CASH AS SHARE CAPITAL AND RS.1,000/- WAS DEPOSITED IN BANK OUT OF THE SAM E AMOUNT. THE LD. AR SUBMITTED THAT THE TRIAL BALANCE AS ON 31.03.1996 W HICH SHOWS SHARE CAPITAL OF RS. 7,000/- WAS PRODUCED BEFORE THE ASSE SSING OFFICER ALONG WITH LEDGER ACCOUNT OF SHARE CAPITAL IN THE BOOKS OF ASS ESSEE SHOWING CASH RECEIPT OF RS.7,000/- TOWARDS SHARE CAPITAL AS WELL AS CASH BOOK OF THE ASSESSEE SHOWING RECEIPT OF RS.7,000/- AS SHARE CAP ITAL ON 03.01.1996 AND PAYMENT OF RS.1,000/- FOR OPENING A NEW ACCOUNT NO. 2385-3 WITH ANDHRA BANK ON 27.01.1996. THUS, THE SOURCE OF DEPOSIT OF CASH IN BANK STANDS EXPLAINED AND ADDITION OF RS.1,000/- SHOULD BE DELE TED. 10. THE LD. DR RELIED UPON THE ASSESSMENT ORDER. 11. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS. IT IS PERTINENT TO NOTE THAT THE ASSESSEE HAS GIVEN ALL T HE DETAILS TO THE ASSESSING OFFICER AND HAS EXPLAINED THE CASH DEPOSIT THROUGH THE BANK DETAILS. THEREFORE, THE ASSESSING OFFICER WAS NOT CORRECT IN MAKING ADDITION OF RS.1,000/-. THUS, GROUND NOS. 1 AND 2 OF THE APPEAL IS ALLOWED. 6 IT(SS)A NO. 6 & ORS/DEL/2012 12. AS RELATES TO GROUND NO. 3 FOR ADDITION OF RS. 1,24,000/- RECEIVED FROM ANNIE INVESTMENT & FINANCE CO. PVT. LTD. THE LD. AR SUBMITTED THAT THE AMOUNT OF RS. 1,24,000/- WAS RECEIVED FROM A/C NO. 1125, IN J&K BANK, NOIDA OF M/S ANNIE INVESTMENT AND FINANCE CO. PVT. LTD. THE ASSESSING OFFICER MADE THE ADDITION BY ALLEGING THAT THE ASSE SSEE DID NOT SUBMIT ANY CONFIRMATION OF THIS LOAN FROM M/S ANNIE INVESTMENT AND FINANCE CO. PVT. LTD. THE LD. AR SUBMITTED THAT THE ASSESSING OFFICE R ADMITTED THE FACT THAT THE AMOUNT WAS RECEIVED FROM ANNIE INVESTMENT & FIN ANCE CO. PVT. LTD., A GROUP COMPANY ASSESSED WITH THE SAME ASSESSING OFFI CER. THE TRIAL BALANCE UPTO THE DATE OF SEARCH SHOWING CREDIT BALANCE OF R S.1,24,000/- IN THE ACCOUNT OF ANNIE INVESTMENT & FINANCE CO. PVT. LTD. WHICH IS PLACED UNDER THE HEAD CURRENT LIABILITIES WAS PRODUCED BEFORE TH E ASSESSING OFFICER ALONG WITH THE LEDGER ACCOUNT OF ANNIE INVESTMENT & FINAN CE CO. PVT. LTD. IN THE BOOKS OF THE ASSESSEE SHOWING A CREDIT BALANCE OF R S. 1,24,000/- AS WELL AS THE BALANCE SHEET OF THE ASSESSEE FOR THE YEAR ENDE D 31.03.197 SHOWING BALANCE OF RS. 1,24,000/- OF ANNIE INVESTMENT & FIN ANCE CO. PVT. LTD. UNDER THE HEAD CURRENT LIABILITIES. THE LD. AR FURTHER SU BMITTED THAT THE ASSESSEE ALSO SUBMITTED BEFORE THE ASSESSING OFFICER THE BAL ANCE SHEET OF M/S ANNIE INVESTMENT & FINANCE CO. PVT. LTD. FOR THE YEAR END ED ON 31.03.1997 WHICH SHOWS AN AMOUNT OF RS.29,36,121/- AS LOANS AND ADVA NCES. THE BREAK-UP OF THE SAID AMOUNT OF LOANS AND ADVANCES IS GIVEN IN S CHEDULE B WHICH RECORDS AN AMOUNT OF RS.1,24,000/- AS LOAN TO KANDLA PETRO CHEMICAL CORP. LTD. ALONGWITH PHOTOCOPY OF BANK ACCOUNT OF ANNIE INVEST MENT & FINANCE CO. PVT. LTD. SHOWING PAYMENT OF RS.1,24,000/- AND PHOT OCOPY OF THE BANK ACCOUNT OF THE ASSESSEE SHOWING RECEIPT OF THE AMOU NT OF RS.1,24,000/- ON 07..06.1996 AND IS INCLUDED IN RS.26,24,000/- ALL T HESE DOCUMENTS WERE PRODUCED BEFORE THE ASSESSING OFFICER. AS REGARDS T HE PHOTOCOPY OF THE CONFIRMATION OF M/S ANNIE INVESTMENT & FINANCE CO. PVT. LTD. THE SAME WAS NOT PRODUCED BEFORE THE ASSESSING OFFICER AS THE SA ME WAS NOT CALLED FOR. THE LD. AR SUBMITTED THAT THE SAME COMPANY WAS ALSO ASSESSED WITH THE SAME AO AND HE COULD HAVE VERIFIED IT DIRECTLY FROM THE SAID COMPANY WHICH HAS NOT BEEN DONE. THUS, IT IS CLEAR THAT THE AMOUN T HAS BEEN RECEIVED FROM ANNIE INVESTMENT & FINANCE CO. PVT. LTD. AND HAS BE EN DULY DECLARED IN THE 7 IT(SS)A NO. 6 & ORS/DEL/2012 BALANCE SHEET OF ANNIE INVESTMENT & FINANCE CO. PVT . LTD. AND THEREFORE, THE ADDITION OF RS.1,24,000/- SHOULD BE DELETED. 13. THE LD. DR RELIED UPON THE ASSESSMENT ORDER. 14. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL THE RECORDS. IT IS PERTINENT TO NOTE THAT THE ASSESSEE HAS GIVEN ALL T HE DETAILS TO THE ASSESSING OFFICER EXCEPT CONFIRMATION OF ANNIE INVESTMENT & F INANCE CO. PVT. LTD. FROM THE BANK DETAILS AND THE BALANCE SHEET OF THE SAID COMPANY IT WAS CLEAR AT THE THRESHOLD THAT THE ASSESSEE HAS GIVEN PROPER EXPLANATION WITH THE EVIDENCE. MERELY NOT PRODUCING CONFIRMATION CAN NOT BE THE GROUND FOR MAKING ADDITION WHEN THE SAME ASSESSING OFFICER IS ALSO ASSESSING THE SAID COMPANY FOR THE SAID AMOUNT ITSELF DURING THE SAME PERIOD. THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING AN ADD ITION AND GROUND NO. 3 IS ALLOWED. 15. AS RELATES TO GROUND NO. 4 FOR ADDITION OF RS. 25,00,000/- RECEIVED FROM M/S GANPATI INVESTMENT CONSULTANT FOR THE AY 1997-98, THE LD. AR SUBMITTED THAT AN AMOUNT OF RS.25,00,000/- WAS RECE IVED FROM M/S GANPATI INVESTMENT CONSULTANT ( PROPRIETOR ANIL SAN GHI) BY WAY OF A CHEQUE ON 7/6/1996. THE LD. AR FURTHER SUBMITTED THAT THE ASSESSING OFFICER MADE THE ADDITION STATING THAT THOUGH SAID AMOUNT W AS CREDITED IN THE ACCOUNT OF M/S GANPATI INVESTMENT CONSULTANT ON 3/6 /1996 FROM M/S ANIL SANGHI & ASSOCIATES BUT NO SUCH AMOUNT WAS FOUND DE BITED IN THE ACCOUNTS OF M/S ANIL SANGHI & ASSOCIATES ON 3/6/1996 AND ANI L SANGHI HAS NOT OFFERED THIS AMOUNT FOR TAXATION AS HIS UNDISCLOSED INCOME. THE LD. AR SUBMITTED THAT THE ASSESSING OFFICER ADMITTED THE A MOUNT WAS RECEIVED FROM M/S GANPATI INVESTMENT. THE ASSESSEE PRODUCED LEDG ER ACCOUNT OF M/S GANPATI INVESTMENT CONSULTANT IN THE BOOKS OF THE A SSESSSEE SHOWING RECEIPT OF RS. 25,00,000/- ON 6/6/1996 VIDE CHEQUE NO. 676446 OF CITY BANK ACCOUNT NO. 0-412349-008. THE LD. AR FURTHER SUBMITTED THAT MR. ANIL SANGHI HAS TWO PROPRIETARY CONCERNED NAMELY AN IL SANGHI & ASSOCIATES AND GANPATI INVESTMENT CONSULTANTS. MR. ANIL SANGH I DECLARED UNDISCLOSED 8 IT(SS)A NO. 6 & ORS/DEL/2012 INCOME OF RS.27.64 CRORE IN HIS RETURN OF INCOME FI LED FOR BLOCK ASSESSMENT PERIOD :- PARTICULARS AY UNDISCLOSED INCOME (RS.) ANIL SANGHI & ASSOCIATES 1994-95 4,61 ,500/- 1995-96 1,58,27,900/- 1996-97 24,36,50,370/- GANPATI CONSULTANTS 1996-97 1,65,55,000/ - TOTAL UNDISCLOSED INCOME 27,64,94,770/- 16. THE LD. AR SUBMITTED THE ASSESSEE FURNISH THE B ALANCE SHEET SHOWING THE ASSET SIDE OF ANIL SANGHI REGARDING UTILIZATION OF UNDISCLOSED INCOME OF RS.27.64 CORE. THIS SHOWS THAT AN AMOUNT OF RS. 2, 19,21,285/- (RS.1,26,40,000/-) THROUGH GANPATI INVESTMENT CONSU LTANT AND RS.92,81,285/- THROUGH ANIL SANGHI AND ASSOCIATES (WAS GIVEN TO THE ASSESSEE BY ANIL SANGHI OUT OF UNDISCLOSED INCOME D ECLARED HIS RETURN OF INCOME. THE ASSESSEE ALSO FURNISHED PHOTOCOPY OF T HE STATEMENT OF CITY BANK ACCOUNT NO. 0-412349-008 OF M/S GANPATI INVEST MENT CONSULTANTS SHOWING RECEIPT OF A TOTAL SUM OF RS.25,00,000/- ON 1/6/1996 AND 3/6/1996 THROUGH 11 DIFFERENT CHEQUES AND PAYMENT O F THE SAME AMOUNT TO THE ASSESSEE THROUGH A SINGLE CHEQUE NO. 676446 ON 7/6/1996 AS WELL AS THE LEDGER ACCOUNT OF THE ASSESSSEE IN THE BOOKS OF GANPATI INVESTMENT CONSULTANT FROM 1/4/1996 TO 31/3/1997 SHOWING PAYME NT OF RS.25,00,000/- TO THE ASSESSEE ON 7/6/1996 THROUGH A CHEQUE ISSUED ON ITS CITY BANK ACCOUNT AND VICE VERSA. THE ASSESSEE ALS O SUBMITTED THE BALANCE SHEET OF THE ASSESSEE FOR THE YEAR ENDED 31/3/1997 SHOWING A TOTAL OUTSTANDING LIABILITY OF RS.1,26,40,000/- TO M/S GA NPATI INVESTMENT CONSULTANT. THUS, TOTAL AMOUNT RECEIVED FROM GANPA TI INVESTMENT IS RS.1,26,40,000/- WHICH TALLIES WITH THE AMOUNT MENT IONED BALANCE SHEET OF MR. ANIL SANGHI. PHOTOCOPY OF THE BANK ACCOUNT OF THE ASSESSEE SHOWING RECEIPT OF RS.26,24,000/- ON 7/6/1996 WHICH AMOUNT INCLUDES RS.25,00,000/- FROM M/S GANPATI INVESTMENT CONSULTA NT (PROP. ANIL SANGHI) AND RS.1,24,000/- FROM M/S ANNIE INVESTMENT AND FINANCE 9 IT(SS)A NO. 6 & ORS/DEL/2012 COMPANY PVT. LTD. THE CASH BOOK OF M/S ANIL SANGHI & ASSOCIATES FROM 1/4/1996 TO 1/11/1996 SHOWING OPENING BALANCE OF CA SH RS.54,15,122/-. THE LD. AR SUBMITTED THAT BANKERS CHEQUES/DD OF RS .25,00,000/- (RS.14,00,000/- ON 1/11/1996 AND RS. 11,00,000/- ON 3/6/1996 WERE PURCHASED IN CASH WHICH WERE DEPOSITED IN THE BANK ACCOUNT OF M/S GANPATI INVESTMENT CONSULTANT. SINCE THE BANKERS C HEQUES WERE PURCHASED IN CASH, THE AMOUNT WAS REDUCED FROM CASH BALANCE AND NOT FROM THE BANK ACCOUNT OF THE ANIL SANGHI & ASSOCIAT ES. THE ASSESSEE ALSO SUBMITTED A LETTER DATED 24.11.1997 SUBMITTED BY AN IL SANGHI TO THE THEN ASSESSING OFFICER IN HIS PERSONAL CASE ENCLOSING TH ESE BOOKS OF ACCOUNT FROM 01.04.1993 TO 01.11.1996 WHICH TALLIES WITH THE CAS H BOOK PRODUCED. THIS FACT CLEARLY PROVES AS PER THE LD. AR THE SOURCE OF RS.25,00,000/- AS AMOUNT RECEIVED FROM GANPATI INVESTMENT CONSULTANTS OUT OF THE UNDISCLOSED INCOME OF RS.27.64 CRORES OFFERED FOR T AXATION BY MR. ANIL SANGHI AND THUS THE ADDITION OF RS. 25,00,000/- SHO ULD BE DELETED. 17. THE LD. DR RELIED UPON THE ASSESSMENT ORDER. 18. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL THE RELEVANT RECORDS. IT IS PERTINENT TO NOTE THAT THE ASSESSEE HAS GIVEN ALL THE DETAILS TO THE ASSESSING OFFICER. AFTER GOING THOUGH THE BANKERS CHEQUES/DD OF RS.25,00,000/- (RS.14,00,000/- ON 1/11/1996 AND RS. 11,00,000/- ON 3/6/1996 WERE PURCHASED IN CASH WHICH WERE DEPOSITE D IN THE BANK ACCOUNT OF M/S GANPATI INVESTMENT CONSULTANT. SINC E THE BANKERS CHEQUES WERE PURCHASED IN CASH, THE AMOUNT WAS REDUCED FROM CASH BALANCE AND NOT FROM THE BANK ACCOUNT OF THE ANIL SANGHI & ASSO CIATES. THE ASSESSEE ALSO SUBMITTED A LETTER DATED 24.11.1997 SUBMITTED BY ANIL SANGHI TO THE THEN ASSESSING OFFICER IN HIS PERSONAL CASE ENCLOSI NG THESE BOOKS OF ACCOUNT FROM 01.04.1993 TO 01.11.1996 WHICH TALLIES WITH TH E CASH BOOK PRODUCED. THIS FACT CLEARLY PROVES THAT THE ASSESSEE HAS PROP ERLY DISCHARGED ITS ONUS. THUS, GROUND NO. 4 IS ALLOWED. 19. AS RELATES TO GROUND NO. 5 TO 8 IN RESPECT OF I NTEREST ON FDR WITH BANK FOR A.Y. 1996-97 FOR RS. 69,863/-, INTEREST FR OM COMPANIES FOR A.Y. 10 IT(SS)A NO. 6 & ORS/DEL/2012 1996-97 FOR RS. 8,76,576/- AND ALTERNATE GROUNDS, T HE LD. AR SUBMITTED THAT IDENTICAL ISSUE IS DECIDED BY THE ITAT IN THE FOLLOWING GROUP COMPANIES: I) SHILPI SECURITIES (P) LTD. ITA NO.2/DEL/2012 ORD ER DATED 29.01.2016 II) HARMONY PSYCHIATRY CENTRE PVT. LTD. IT(SS)A NO. 3/DEL/2012 ORDER DATED 07.10.2016 THE LD. AR FURTHER SUBMITTED THAT THIS ADDITION OF INTEREST WAS MADE BY THE ASSESSING OFFICER ON THE BASIS OF ENTRIES IN THE BA NK ACCOUNT AND NOT ON THE BASIS OF ANY SEIZED MATERIAL. SECTION 158BB PROVIDE S FOR COMPUTATION OF UNDISCLOSED INCOME FOR THE BLOCK PERIOD. THE INCOME S COMPUTED ON THE BASIS OF SECTION 158BB(1)(A) TO (F) HAS TO BE EXCLU DED WHILE COMPUTING UNDISCLOSED INCOME. SECTION 158BB (1)(D) PROVIDES T HAT IN A CASE WHERE THE PREVIOUS YEAR HAS NOT ENDED OR THE DATE OF FILING O F RETURN OF INCOME UNDER SECTION 139(1) HAS NOT EXPIRED, THEN INCOME DETERMI NED ON THE BASIS OF ENTRIES RELATING TO SUCH INCOME OR TRANSACTIONS AS RECORDED IN THE BOOKS OF ACCOUNT AND OTHER DOCUMENTS MAINTAINED IN THE NORMA L COURSE ON OR BEFORE THE DATE OF SEARCH SHALL BE EXCLUDED FROM THE UNDIS CLOSED INCOME. SEARCH WAS UNDERTAKEN ON THE ASSESSEE ON 27.06.1996. RETUR N OF INCOME FOR THE AYS 1996-97 AND 1997-98 WERE DUE TO BE FILED ON 30. 11.1996 AND 30.11.1997 RESPECTIVELY. THUS, BOTH THESE RETURNS W ERE NOT DUE FOR FILING AS ON THE DATE OF SEARCH. BOTH THE RETURNS WERE FILED ON 12.11.1997 (BELATED IN CASE OF AY 1996-97 AND BEFORE DUE DATE IN CASE OF A .Y. 1997-98). THE LD. AR SUBMITTED THAT THE ASSESSEE PRODUCED PHOTOCOPIES OF THE BOOKS OF ACCOUNT WHICH WAS MAINTAINED REGULARLY BEFORE THE ASSESSING OFFICER. THE SAME WERE FILED BEFORE THE THEN ASSESSING OFFICER DURING THE BLOCK ASSESSMENT PROCEEDINGS VIDE LETTER DATED 16.09.1997 WHICH PROV ES THAT BOOKS OF ACCOUNT WERE NOT ONLY MAINTAINED BUT WERE ALSO FILED BEFORE THE ASSESSING OFFICER IN THE FIRST ROUND OF ASSESSMENT AND MUST HAVE BEEN AV AILABLE TO THE ASSESSING OFFICER IN THE SECOND ROUND OF ASSESSMENT. THE AVER MENT OF THE ASSESSING OFFICER THAT THE BOOKS WERE NOT FOUND OR SEIZED DUR ING SEARCH IS BASELESS AS THE SEARCH WAS UNDERTAKEN ON THE BANK ACCOUNT OF TH E ASSESSEE. BOOKS OF ACCOUNTS ARE MAINTAINED ON THE REGISTERED OFFICER O F THE COMPANY OR ITS 11 IT(SS)A NO. 6 & ORS/DEL/2012 BRANCHES AND NOT AT THE BANK PREMISES. TDS OF RS.16 ,068/- AND RS.65,503/- ON BANK INTEREST ON FDR HAS BEEN DEDUCT ED FOR THE AY 1996-97 AND 1997-98 RESPECTIVELY AS IS EVIDENT FROM INTIMAT ION U/S 143(1). THE LD. AR SUBMITTED THAT IT IS SETTLED LAW THAT INCOME IN RESPECT OF WHICH TAX HAS BEEN DEDUCTED AT SOURCE CANNOT BE CONSTRUED AS UNDI SCLOSED INCOME U/S 158BC. THE MOMENT TDS IS DEDUCTED, THE INCOME STAND S DISCLOSED TO REVENUE. THE LD. AR RELIED ON THE DELHI HIGH COURT DECISION IN CASE OF DR. (MRS.) SURJIT TOSARIA VS. JCIT (2005) 92 TTJ 338 (D EL). THE INTEREST INCOME WAS DULY DECLARED IN THE PROFIT AND LOSS ACCOUNTS F OR THE YEARS ENDED 31.03.1996 AND 31.03.1997. THE SAME WERE ACCEPTED I N THE INTIMATION U/S 143 (1) AND ALSO IN THE REGULAR ASSESSMENT PASSED U /S 143(3) IN BOTH THE ASSESSMENT YEARS. SINCE INTEREST EARNED THEREON WAS DULY RECORDED IN BOOKS OF ACCOUNT AND THE RETURNS FOR THE AYS 1996-97 AND 1997-98 HAVE NOT FALLEN DUE AT THE TIME OF SEARCH, THE INTEREST INCOME CANN OT BE CONSIDERED AS UNDISCLOSED INCOME IN VIEW OF THE PROVISIONS OF SEC TION 158BB(1). IDENTICAL ISSUE HAS BEEN DECIDED BY THE ITAT IN THE CASE OF S HILPI SECURITIES (P) LTD., A GROUP COMPANY, IN IT (SS) /02/DEL/2012 PASSED ON 29 .01.2016 WHEREIN THE ADDITION OF INTEREST HAS BEEN DELETED FROM THE BLOCK ASSESSMENT SINCE TDS WAS DEDUCTED ON THE SAID INCOME AND THE SAME WA S ACCEPTED U/S 143(1) AND 143(3). THE LD. AR FURTHER SUBMITTED THA T WITHOUT PREJUDICE TO GROUND NO. 5 AND 7, RELATING TO GROUND NO. 6 AND 8, THE ASSESSEE HAS DECLARED THE IMPUGNED INTEREST INCOME IN ITS REGULA R RETURNS OF INCOME FILED FOR AY 1996-97 AND 1997-98 WHICH HAS BEEN ACCEPTED AS SUCH BY THE ASSESSING OFFICER IN REGULAR ASSESSMENT FRAMED U/S 143(3). THE ASSESSING OFFICER HAS ACCEPTED THE FACT THAT THE INTEREST AMO UNT AS STATED ABOVE IS THE SAME AMOUNT OF INTEREST INCOME DECLARED BY THE ASSE SSEE IN HIS REGULAR RETURNS OF INCOME AS THIS FACT HAS BEEN REBUTTED BY HIM IN THE ASSESSMENT ORDER. IF THE IMPUGNED INTEREST INCOME IS ASSESSED AS UNDISCLOSED INCOME U/S 158BC THEN THE SAME SHOULD BE EXCLUDED FROM THE INCOME ASSESSED IN REGULAR ASSESSMENTS FRAMED FOR THE AYS 1996-97 AND 1997-98 AS THE SAME INCOME CANNOT BE TAXED TWICE. 20. THE LD. DR RELIED UPON THE ASSESSMENT ORDER. 12 IT(SS)A NO. 6 & ORS/DEL/2012 21. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL THE RECORDS. IT IS PERTINENT TO NOTE THAT IDENTICAL ISSUE IS DECIDED B Y THE ITAT IN THE FOLLOWING GROUP COMPANIES: I) SHILPI SECURITIES (P) LTD. ITA NO.2/DEL/2012 ORD ER DATED 29.01.2016 II) HARMONY PSYCHIATRY CENTRE PVT. LTD. IT(SS)A NO. 3/DEL/2012 ORDER DATED 07.10.2016 THUS, THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESS EE. GROUND NO. 5 TO 8 ARE ALLOWED. 22. AS RELATES TO GROUND NO. 9 TO 11, 13 AND ADDITI ONAL GROUND REGARDING ADDITION ON THE BASIS OF ANNEXURE A-13 SEIZED FROM THE SEARCH CONDUCTED IN CASE OF MR. ANIL SANGHI ON 01.11.1996 AMOUNTING TO RS. 1,49,60,000/- AND LEGAL ADDITIONAL GROUND, THE LD. AR SUBMITS THAT FI RST OF ALL LEGAL GROUND IS DISCUSSED AS IF THIS IS ADMITTED AND ADJUDICATED IN FAVOUR OF THE ASSESSEE AS HAS BEEN DONE IN OTHER APPEALS OF THE GROUP, THE AD DITIONS STANDS DELETED. THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS PUR ELY LEGAL IN NATURE AND SHOULD BE ADMITTED IN VIEW OF THE JUDGMENT OF HONB LE SUPREME COURT IN CASE OF NTPC CO. LTD. VS. CIT 229 ITR 383 (SC). IDE NTICAL GROUND WAS RAISED IN THE CASE OF M/S HARMONY PSYCHIATRY CENTRE (P) LT D. IN IT(SS)/03/DEL/2012, GROUP COMPANY OF THE ASSESSEE, WHICH HAS BEEN ADMITTED BY THE ITAT VIDE ORDER DATED 07.10.2016 AS WELL AS M/S UIKAM INVESTMENT & FINANCE (P) LTD. IN IT(SS)/10/DEL/2013 , GROUP COMPANY OF THE ASSESSEE, VIDE ORDER DATED 07.10.2016. THUS, AD DITIONAL GROUND RAISED BY THE ASSESSEE SHOULD BE ADMITTED AND DECIDED. 23. THE LD. AR FOR ADDITIONAL GROUND NO. 13 SUBMITT ED THAT IN CASE OF ASSESSEE, THE SEARCH OPERATIONS WERE CARRIED OUT ON 27.06.1996 ONLY AT THE BANK ACCOUNT OF THE ASSESSEE AND NOWHERE ELSE. ANNE XURE A-13, PARTY S-3 WAS FOUND DURING THE COURSE OF SEARCH AT THE RESIDE NCE OF MR. ANIL SANGHI ON 01.11.1996 AND NOT FROM THE POSSESSION OF THE AS SESSEE COMPANY. THUS, THIS ANNEXURE HAS BEEN SEIZED AFTER THE SEARCH WAS CONCLUDED IN THE CASE OF THE ASSESSEE COMPANY AS THE BLOCK PERIOD OF THE ASS ESSEE COMPANY IS FROM 13 IT(SS)A NO. 6 & ORS/DEL/2012 01.04.1986 TO 08.07.1996. INFORMATION COLLECTED POS T SEARCH CAN BE USED IN THE ASSESSMENT FOR THE BLOCK PERIOD IF AND ONLY IF THE ASSESSING OFFICER WAS OF THE OPINION THAT THE SAID SEIZED MATERIAL WAS RE LATED TO THE ASSESSEE COMPANY AND HE HAS RECORDED HIS SATISFACTION U/S 15 8 BD TO THIS EFFECT. HOWEVER, THIS HAS NOT BEEN DONE IN THIS CASE. IT IS SETTLED LAW NO ADDITION CAN BE MADE ON THE BASIS OF MATERIAL SEIZED FROM TH E PREMISES OF SOME OTHER ASSESSEE AFTER CONCLUSION OF SEARCH IN CASE OF THE ASSESSEE COMPANY WITHOUT RECORDING SATISFACTION U/S 158BD. FURTHER THE SEIZE D ANNEXURE DID NOT RELATE TO THE MATERIAL SEIZED DURING THE COURSE OF SEARCH IN THE CASE OF THE ASSESSEE AS NOTHING HAS BEEN MENTIONED ABOUT THE SA ME IN THE ASSESSMENT ORDER. THUS, ADDITION MADE ON THE BASIS OF ANNEXURE A-13 SHOULD BE DELETED. 24. THE LD. AR FURTHER SUBMITTED THAT PERUSAL OF PA GE 89 OF ANNEXURE A- 13, PARTY S-3 SEIZED FROM THE RESIDENCE OF MR. ANIL SANGHI DURING THE COURSE OF SEARCH ON 01.11.1996 MENTIONS CERTAIN ENTRIES PE RTAINING TO THE ASSESSEE COMPANY. IT SHOWS DEPOSIT OF CHEQUES OF SOME CHEQUE S AGGREGATING TO RS. 2,49,39,695/- AND CERTAIN PAYMENTS OF RS.10,96,405/ -. THE ASSESSEE STATED THAT AN AMOUNT OF RS.1,49,60,000/- AND RS.2,02,695/ - OUT OF THE SAID CHEQUES FOR THE AY 1996-97 AND 1997-98 WERE TO BE D EPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE BUT WERE NEVER DEPOSITED BY MR. ANIL SANGHI FOR FURTHER INVESTMENT. AS PER PROVISIONS OF SECTION 13 2(4A) OF THE ACT, THE MATERIAL SEIZED DURING THE COURSE OF SEARCH IS TO B E CONSIDERED AS TRUE. SINCE ANNEXURE A-13 HAS BEEN FOUND AND SEIZED DURIN G THE COURSE OF SEARCH, IT CAN BE REASONABLY ASSUMED THAT THESE ENT RIES PERTAIN TO ASSESSEE COMPANY ONLY. THE ASSESSEE HAS NOT BEEN ABLE TO PRO DUCE ANY DOCUMENTARY EVIDENCE IN SUPPORT OF ITS CONTENTION THAT THE ENTR IES NOT REFLECTED IN THE ASSESSEES BOOK PERTAIN TO OTHER CONCERNS. 25. THE LD. AR FURTHER SUBMITTED THAT REGARDING GRO UND NO. 9 TO 11, THE FACTS OF THE CASE ARE THAT THE CHEQUES OF RS. 1,49, 60,000/- AND RS.2,02,695/- WERE NOT DEPOSITED IN THE BANK ACCOUN T OF THE ASSESSEE. IT WAS A PART OF PLANNING TO DEPOSIT THESE CHEQUES TO SUBSCRIBE TO THE SHARE ISSUE OF PATLIPUTRA CREDIT & SECURITIES LIMITED. HO WEVER, THIS PLANNING COULD 14 IT(SS)A NO. 6 & ORS/DEL/2012 NOT BE EXECUTED AND THESE CHEQUES WERE NEVER DEPOSI TED IN THE BANK ACCOUNT OF THE ASSESSEE. IT IS CATEGORICALLY SUBMIT TED THAT THERE WAS ONLY ONE BANK ACCOUNT OF THE ASSESSEE WHICH WAS WITHIN THE K NOWLEDGE OF THE DEPARTMENT AND THESE AMOUNTS HAVE NOT BEEN DEPOSITE D THEREIN. NO OTHER BANK ACCOUNT WAS FOUND DURING THE COURSE OF SEARCH OR CAME TO THE KNOWLEDGE OF THE DEPARTMENT WHERE THESE CHEQUES COU LD HAVE BEEN DEPOSITED. FURTHER THIS ANNEXURE WAS NOT FOUND FROM THE POSSESSION OF THE ASSESSEE COMPANY BUT WAS FOUND FROM THE POSSESSION OF MR. ANIL SANGHI THAT ALSO AFTER THE DATE OF SEARCH CARRIED OUT ON T HE ASSESSEE. SINCE THESE AMOUNTS HAVE NOT BEEN FOUND DEPOSITED INTO THE BANK ACCOUNT OF THE ASSESSEE, NO ADDITION OF THESE AMOUNTS CAN BE MADE IN THE HANDS OF THE ASSESSEE. THUS, THE ADDITION SHOULD BE DELETED. PER USAL OF THE SAID EXPENSES SHOWS THAT MANY OF THESE EXPENSES RELATE TO DSE I.E . DELHI STOCK EXCHANGE, PUBLIC ISSUE, LISTING ETC. IT IS CATEGORICALLY SUBM ITTED THAT NO PUBLIC ISSUE WAS BROUGHT OUT BY THE ASSESSEE WHICH SHOWS THAT TH ESE EXPENSES DOES NOT BELONG TO THIS COMPANY. THE LETTER DATED 18.09.1997 MENTIONS THAT THE ENTRIES BELONG TO MR. ANIL SANGHI AND NOT TO THE AS SESSEE COMPANY EXCEPT RS.1,57,000/- PAID TOWARDS ROC FEES. THE PROSPECTUS ISSUED FOR PUBLIC ISSUE OF M/S PATLIPUTRA CREDIT & SECURITIES LTD. AL SO SUPPORTS THAT EXPENSES INCURRED TOWARDS DELHI STOCK EXCHANGE FEES AND OTHE R PUBLIC ISSUE EXPENSES BELONG TO M/S PATLIPUTRA CREDIT & SECURITI ES LTD. AND NOT TO THE ASSESSEE. THE LEDGER ACCOUNT OF M/S PATLIPUTRA CRED IT & SECURITIES LTD. IN THE BOOKS OF ANIL SANGHI & ASSOCIATES SHOWS THOSE P UBLIC ISSUE EXPENSES AND VICE VERSA. LEDGER ACCOUNT OF ANIL SANGHI & ASS OCIATES IN THE BOOKS OF THE ASSESSEE SHOWS PRELIMINARY EXPENSES OF RS. 1,60 ,285/- SPENT ON ITS BEHALF BY ANIL SANGHI INCLUDING THEREIN RS. 1,57,00 0/-. THE LEDGER ACCOUNT OF ASSESSEE IN THE BOOKS OF ACCOUNT OF ANIL SANGHI & ASSOCIATES SHOWING PRELIMINARY EXPENSES OF RS.1,57,285/- SPENT ON ITS BEHALF INCLUDING THEREIN BANK CHARGES OF RS.285/-. THE LD. AR FURTHER SUBMIT TED THAT PRESUMING WITHOUT ADMITTING, IF THE ADDITIONS OF THESE AMOUNT S ARE CONFIRMED THEN NO SEPARATE ADDITION FOR THE EXPENSES OF RS. 10,96,405 /-, AS THE SAID AMOUNT HAS BEEN REDUCED FROM THE TOTAL AMOUNT RECEIVED AND THUS SHOWS THE UTILIZATION OF THE SAID AMOUNT AND NO SEPARATE ADDI TION FOR THE SAID AMOUNT 15 IT(SS)A NO. 6 & ORS/DEL/2012 CAN BE MADE. 26. THE LD. DR RELIED UPON THE ASSESSMENT ORDER. 27. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL THE RELEVANT RECORDS. THE LD. ARS CONTENTION WAS THAT DOCUMENTS WERE PRO DUCED BEFORE THE ASSESSING OFFICER AND THEREFORE, THE ASSESSING OFFI CER SHOULD HAVE TAKEN PROPER COGNIZANCE TO THAT EFFECT. THE CHEQUES OF RS . 1,49,60,000/- AND RS.2,02,695/- WERE NOT DEPOSITED IN THE BANK ACCOUN T OF THE ASSESSEE. IT WAS A PART OF PLANNING TO DEPOSIT THESE CHEQUES TO SUBSCRIBE TO THE SHARE ISSUE OF PATLIPUTRA CREDIT & SECURITIES LIMITED. HO WEVER, THIS PLANNING COULD NOT BE EXECUTED AND THESE CHEQUES WERE NEVER DEPOSI TED IN THE BANK ACCOUNT OF THE ASSESSEE. THUS, WHEN THE ASSESSEE DO ES THE TAX PLANNING THAT IS PERMISSIBLE UNDER INCOME TAX ACT. NO PUBLIC ISSU E WAS BROUGHT OUT BY THE ASSESSEE WHICH SHOWS THAT THESE EXPENSES DOES N OT BELONG TO THIS COMPANY. THE LETTER DATED 18.09.1997 MENTIONS THAT THE ENTRIES BELONG TO MR. ANIL SANGHI AND NOT TO THE ASSESSEE COMPANY EXC EPT RS.1,57,000/- PAID TOWARDS ROC FEES. THE PROSPECTUS ISSUED FOR PUBLIC ISSUE OF M/S PATLIPUTRA CREDIT & SECURITIES LTD. ALSO SUPPORTS THAT EXPENSE S INCURRED TOWARDS DELHI STOCK EXCHANGE FEES AND OTHER PUBLIC ISSUE EXPENSES BELONG TO M/S PATLIPUTRA CREDIT & SECURITIES LTD. AND NOT TO THE ASSESSEE. THE LEDGER ACCOUNT OF M/S PATLIPUTRA CREDIT & SECURITIES LTD. IN THE BOOKS OF ANIL SANGHI & ASSOCIATES SHOWS THOSE PUBLIC ISSUE EXPENS ES AND VICE VERSA. LEDGER ACCOUNT OF ANIL SANGHI & ASSOCIATES IN THE B OOKS OF THE ASSESSEE SHOWS PRELIMINARY EXPENSES OF RS. 1,60,285/- SPENT ON ITS BEHALF BY ANIL SANGHI INCLUDING THEREIN RS. 1,57,000/-. THE LEDGER ACCOUNT OF ASSESSEE IN THE BOOKS OF ACCOUNT OF ANIL SANGHI & ASSOCIATES SH OWING PRELIMINARY EXPENSES OF RS.1,57,285/- SPENT ON ITS BEHALF INCLU DING THEREIN BANK CHARGES OF RS.285/-. THUS, ALL THE EXPLANATION ALON G WITH THE DOCUMENTS WAS PRODUCED BEFORE THE ASSESSING OFFICER, BUT THE ASSESSING OFFICER HAS NOT TAKEN COGNIZANCE OF THE SAME. THEREFORE, IT WILL BE APPROPRIATE TO REMAND BACK THIS ISSUE TO THE FILE OF THE ASSESSING OFFICE R. NEEDLESS TO SAY, THE ASSESSEE BE GIVEN OPPORTUNITY OF HEARING BY FOLLOWI NG PRINCIPLES OF NATURAL JUSTICE. GROUND NOS. 9 TO 11 ARE ALLOWED FOR STATIS TICAL PURPOSE. 16 IT(SS)A NO. 6 & ORS/DEL/2012 28. GROUND NO. 12 IS GENERAL IN NATURE. HENCE, THE SAME IS NOT ADJUDICATED BY US. 29. ADDITIONAL GROUND NO. 13, THE LD. AR SUBMITTED THAT IN CASE OF ASSESSEE, THE SEARCH OPERATIONS WERE CARRIED OUT ON 27.06.1996 ONLY AT THE BANK ACCOUNT OF THE ASSESSEE AND NOWHERE ELSE. ANNE XURE A-13, PARTY S-3 WAS FOUND DURING THE COURSE OF SEARCH AT THE RESIDE NCE OF MR. ANIL SANGHI ON 01.11.1996 AND NOT FROM THE POSSESSION OF THE AS SESSEE COMPANY. THUS, THIS ANNEXURE HAS BEEN SEIZED AFTER THE SEARCH WAS CONCLUDED IN THE CASE OF THE ASSESSEE COMPANY AS THE BLOCK PERIOD OF THE ASS ESSEE COMPANY IS FROM 01.04.1986 TO 08.07.1996. INFORMATION COLLECTED POS T SEARCH CAN BE USED IN THE ASSESSMENT FOR THE BLOCK PERIOD IF AND ONLY IF THE ASSESSING OFFICER WAS OF THE OPINION THAT THE SAID SEIZED MATERIAL WAS RE LATED TO THE ASSESSEE COMPANY AND HE HAS RECORDED HIS SATISFACTION U/S 15 8 BD TO THIS EFFECT. HOWEVER, THIS HAS NOT BEEN DONE IN THIS CASE. IT IS SETTLED LAW NO ADDITION CAN BE MADE ON THE BASIS OF MATERIAL SEIZED FROM TH E PREMISES OF SOME OTHER ASSESSEE AFTER CONCLUSION OF SEARCH IN CASE OF THE ASSESSEE COMPANY WITHOUT RECORDING SATISFACTION U/S 158BD. FURTHER THE SEIZE D ANNEXURE DID NOT RELATE TO THE MATERIAL SEIZED DURING THE COURSE OF SEARCH IN THE CASE OF THE ASSESSEE AS NOTHING HAS BEEN MENTIONED ABOUT THE SA ME IN THE ASSESSMENT ORDER. 30. THE LD. DR VEHEMENTLY OPPOSED THE ADDITIONAL GR OUND AND SUBMITTED THAT THE DECISION OF NATIONAL THERMAL POWER CORPORA TION LTD. VS. CIT 229 ITR 383 (SC) IS NOT APPLICABLE IN THE PRESENT CASE. 31. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL THE RELEVANT RECORDS. THE ADDITIONAL GROUND IS A LEGAL GROUND WHICH HAS T O BE ADMITTED THAT AS THE SAME IS PURELY LEGAL IN NATURE AND THE DECISION OF THE HONBLE APEX COURT IN CASE OF NATIONAL THERMAL POWER CORPORATION LTD. IS SQUARELY APPLICABLE IN THE PRESENT CASE. IN FACT IDENTICAL G ROUND WAS RAISED IN CASE OF GROUP COMPANIES, M/S HARMONY PSYCHIATRY CENTRE (P) LTD. AND M/S UIKAM INVESTMENT FINANCE (P) LTD. WHEREIN THE ITAT DECIDE D THIS GROUND IN FAVOUR OF THE ASSESSEE. THEREFORE, WE ARE NOW DISCUSSING T HE MERIT OF THIS GROUND. 17 IT(SS)A NO. 6 & ORS/DEL/2012 THE SEIZED ANNEXURE DID NOT RELATE TO THE MATERIAL SEIZED DURING THE COURSE OF SEARCH IN THE CASE OF THE ASSESSEE AS NOTHING HA S BEEN MENTIONED ABOUT THE SAME IN THE ASSESSMENT ORDER. THEREFORE, ADDITI ONAL GROUND NO. 13 IS ALLOWED. 32. IN RESULT, APPEAL BEING IT(SS)A NO.6/DEL/2012 F ILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. NOW WE ARE TAKING UP APPEAL OF PATLIPUTRA INTERNATI ONAL TRADING LTD. 33. THE GROUNDS OF APPEAL ARE AS UNDER:- IT(SS) A .NO. 6/DEL/2012 1. THE ASSESSING OFFICER ERRED IN LAW AND ON FACTS IN MAKING ADDITIONS OF THE AMOUNTS DEPOSITED IN BANK OF THE ASSESSEE OTHER THAN RECEIVED FROM MR. ANIL SANGHI IGNORING THE FACTS AND EVIDENCES PLACED ON RECORD TO PROVE THE SOURCE OF SUCH DEPOSIT AND WITHOUT RAISING ANY QUER Y IN THIS REGARD. THUS THE SAID ADDITIONS SHOULD BE DELETED. 2. THE ASSESSING OFFICER ERRED IN LAW AND ON THE FA CTS IN MAKING AN ADDITION OF RS.2,50,000/- RECEIVED BY THE ASSESSEE FROM M/S PROFESSIONAL LEASING & CAPITAL SERVICES LTD. ON BEHALF OF MR. AN IL SANGHI IGNORING THE FACTS AND EVIDENCES PLACED ON RECORD TO PROVE THE SOURCE OF THE SAID AMOUNT AND WITHOUT RAISING ANY FURTHER QUERY IN THIS REGARD. THUS THE ADDITION SO MADE SHOULD BE DELETED. 3. THE ASSESSING OFFICER ERRED IN LAW AND ON FACTS IN MAKING AN ADDITION OF RS. 35,398/- OF PRELIMINARY EXPENSES INCURRED BY MR . ANIL SANGHI ON BEHALF OF THE ASSESSEE IGNORING THE FACTS AND EVIDENCES PLACE D ON RECORD AND WITHOUT RAISING ANY QUERY IN THIS REGARD. THUS THE ADDITION SO MADE SHOULD BE DELETED. 4. THE ASSESSING OFFICER ERRED IN LAW AND ON THE F ACTS IN MAKING AN ADDITION RS. 500/- BEING CASH DEPOSITED FOR OPENING THE BANK ACCOUNT OF THE ASSESSEE IGNORING THE FACT THAT THE SAME HAS BEEN D EPOSITED OUT OF SHARE SUBSCRIPTION MONEY OF RS. 7,000/- RECEIVED FROM THE INITIAL SUBSCRIBERS OF THE COMPANY WITHOUT RAISING ANY QUERY IN THIS REGARD. T HUS THE ADDITION SO MADE SHOULD BE DELETED. 5. THE ASSESSING OFFICER ERRED IN LAW AND ON THE FA CTS IN MAKING AN ADDITION OF RS. 9,99,474/- BEING INTEREST RECEIVED ON NCD WITH CITIBANK AND RS. 29,180/- BEING INTEREST RECEIVED FROM P C YADAV FOR AY 96-97, IGNORING THE FACTS AND EVIDENCES PLACED ON RECORD THAT TRANS ACTIONS REGARDING NCD AND LONG TO P. C. YADAV WERE DULY RECORDED IN THE B OOKS OF ACCOUNT AND THE 18 IT(SS)A NO. 6 & ORS/DEL/2012 SAID INTEREST WAS DULY DECLARED AS INCOME IN THE RE GULAR RETURN OF INCOME. THUS THE SAID ADDITION SHOULD BE DELETED. 6. WITHOUT PREJUDICE TO THE ABOVE SUBMISSIONS, IF T HE ADDITION OF RS. 9,99,474/- AND RS. 29,180/- IS SUSTAINED IN THE BLO CK ASSESSMENT PERIOD, THEN DIRECTIONS SHOULD BE ISSUED TO EXCLUDE THE SAI D INTEREST INCOME OFFERED FOR TAXATION IN THE REGULAR ASSESSMENT AS THE SAID INCOME CANNOT BE TAXED TWICE. 7. THE ASSESSING OFFICER ERRED IN LAW AND ON THE FACTS IN MAKING AN ADDITION OF RS. 12,83,917/- BEING INTEREST RECEIVED ON NCD WITH CITIBANK FOR AY 97-98 IGNORING THE FACTS AND EVIDENCES PLACED ON RECORD T HAT TRANSACTIONS REGARDING NCD WERE DULY RECORDED IN THE BOOKS OF ACCOUNT AND THE SAID INTEREST WAS DULY DECLARED AS INCOME IN THE REGULAR RETURN OF IN COME FILED BEFORE THE DUE DATE. THUS THE SAID ADDITION SHOULD BE DELETED. 8. WITHOUT PREJUDICE TO THE ABOVE SUBMISSIONS, IF THE ADDITION OF RS. 12,83,917/- IS SUSTAINED IN THE BLOCK ASSESSMENT PE RIOD, THEN DIRECTIONS SHOULD BE ISSUED TO EXCLUDE THE SAID INTEREST INCOM E OFFERED FOR TAXATION IN THE REGULAR ASSESSMENT AS THE SAME INCOME CANNOT BE TAX ED TWICE. 9. THE ASSESSING OFFICER ERRED IN LAW AND ON THE F ACTS IN MAKING AN ADDITION OF RS. 29,78,000/- ON THE BASIS OF ENTRIES IN SEIZED MATERIAL FOUND DURING THE COURSE OF SEARCH IN THE CASE OF MR. ANIL SANGHI ON 1/11/96 AND WITH A PREDETERMINED AND PREJUDICED MIND BY ALLEGIN G THAT NO DIRECTIONS WERE GIVEN BY THE HONBLE ITAT ON THIS ISSUE AND IGNORIN G THE FACTS AND EVIDENCES PLACED ON RECORD. THUS THE ADDITION SO MADE SHOULD BE DELETED. 10. THE APPELLANT CRAVES THE LEAVE TO ADD, SUBSTIT UTE, MODIFY, DELETE OR AMEND ALL OR ANY GROUND OF APPEAL EITHER BEFORE OR AT THE TIME OF HEARING. 34. THE ASSESSEE COMPANY IS RELATED TO SHRI PRAKASH CHANDRA YADAV GROUP OF CASES. SHRI PRAKASH CHANDRA YADAV IS THE K EY PERSON ACCUSED IN THE RS.133-CRORE UREA IMPORT SCANDAL. SEARCH WARRAN T U/S 132 (1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED THE ACT) W AS ISSUED IN THE CASE OF THE ASSESSEE ON 8/7/1996 AND 29/09/1996 COVERING IT S BANK ACCOUNT NUMBER 800351 IN ALLAHABAD BANK MADRAS HOTEL, CONNA UGHT PLACE, NEW DELHI, WHICH WAS EXECUTED ON 20/09/1996 & 24/9/1996 RESPECTIVELY. THEREAFTER, NOTICE U/S 158 BC OF THE ACT WAS ISSUED ON 07/04/1997 AND ASSESSMENT U/S 158 BC (C) OF THE ACT WAS COMPLETED ON 29/09/1997 AT AN UNDISCLOSED INCOME OF RS. 3,32,71,735/- AGAINST THE RETURNED UNDISCLOSED 19 IT(SS)A NO. 6 & ORS/DEL/2012 INCOME OF RS. NIL. 35. THE ASSESSEE FILED AN APPEAL AGAINST THIS ORDER BEFORE THE ITAT, NEW DELHI. THE ITAT, NEW DELHI VIDE ITS ORDER DATED 17/ 03/2006 IN APPEAL NO. IT(SS)A NO. 245/DEL/1997 OBSERVED THAT WARRANT OF A UTHORIZATION WAS NEVER ISSUED AS NO SEARCH WARRANT WAS PRODUCED BEFORE IT FOR VERIFICATION AND HELD THE BLOCK ASSESSMENT PROCEEDINGS AS VOID-AB-INITIO. ACCORDINGLY, THE ASSESSMENT WAS DECLARED AS INVALID AND WAS QUASHED BY THE ITAT, NEW DELHI. THE DEPARTMENT FILED APPEAL BEFORE THE HON'B LE HIGH COURT OF DELHI AGAINST THIS ORDER AND PRODUCED THE WARRANT OF AUTH ORISATION BEFORE IT. THEREAFTER, THE HONBLE DELHI HIGH COURT VIDE ITS O RDER DATED 31/10/2007 RESTORED THE APPEAL TO THE ITAT, DELHI FOR BEING CO NSIDERED AFRESH. 36. THE ITAT, NEW DELHI VIDE ITS ORDER DATED 30/04/ 2008 IN IT(SS)A NO. 245/DEL/1997, WITHOUT EXAMINING THE MERITS OF THE A DDITIONS MADE, HELD THAT THE BLOCK ASSESSMENT WAS NOT VALID BECAUSE SEA RCH WARRANT ISSUED U/S 132 (1) WAS ILLEGAL; THE ASSESSMENT ORDER PASSED BY THE AO ON 29/09/1997 WAS PASSED BEYOND THE DATE OF LIMITATION SPECIFIED U/S 158 BE OF THE ACT AND ALSO THAT THE WARRANT OF AUTHORIZATION SIGNED B Y THE ADDITIONAL DIRECTOR OF INCOME TAX WAS WITHOUT ANY AUTHORITY. THE DEPART MENT FILED AN APPEAL BEFORE THE HON'BLE HIGH COURT OF DELHI AGAINST THIS ORDER. THE HONBLE HIGH COURT VIDE ITS ORDER DATED 30/11/2009 HELD THAT THE WARRANT SIGNED BY THE ADDITIONAL DIRECTOR OF INCOME TAX WOULD NOT BE INVA LID AS HE HAD THE NECESSARY AUTHORITY, IN VIEW OF THE AMENDED PROVISI ONS OF THE SECTION 132 OF THE ACT. ACCORDINGLY, THE HON'BLE HIGH COURT SET AS IDE THE JUDGMENT OF THE TRIBUNAL AND RESTORED BACK THE APPEAL TO THE FILE O F THE TRIBUNAL FOR DECISION ON MERITS. 37. CONSEQUENTLY, THE ITAT, DELHI BENCH 'A', NEW DE LHI VIDE ITS ORDER DATED 10/01/2011 IN IT(SS)A NO. 245/DEL/97, SET ASIDE AND RESTORED BACK THE ISSUES INVOLVED IN THE APPEAL OF THE ASSESSEE TO TH E FILE OF THE AO WITH THE DIRECTION TO DECIDE THE ISSUES IN QUESTION IN THE L IGHT OF ITS OBSERVATIONS IN THE CASE OF M/S PATLIPUTRA CREDIT AND SECURITIES LI MITED IN IT(SS)A NO. 372/DEL/97 DATED 17/03/2006, AND IN IT(SS)A NO. 10/ DEL/08 DATED 20 IT(SS)A NO. 6 & ORS/DEL/2012 31/03/2009. 38. THE ITAT FURTHER HELD THAT THESE ORDERS OF THE TRIBUNAL, MUTATIS MUTANDIS WILL APPLY TO THE PRESENT CASE. VIDE PARA- 5 OF ITS ORDER DATED 10/01/2011, THE ITAT HAS RESTORED BACK THE ISSUES I NVOLVED IN THE APPEAL TO THE FILE OF THE AO WITH THE DIRECTIONS TO DECIDE THE ISSUES IN QUESTION IN THE LIGHT OF ITS OBSERVATIONS IN THE CASE OF PATLIP UTRA CREDIT AND SECURITIES LIMITED (SUPRA). 39. THE ASSESSING OFFICER ISSUED NOTICES. IN RESPON SE TO THE NOTICES, SHRI ANIL SANGHI, DIRECTOR OF THE COMPANY ATTENDED THE P ROCEEDINGS AND FILED NECESSARY DETAILS AND CLARIFICATIONS AS PLACED ON R ECORD. THE DETAILS SUBMITTED WERE DISCUSSED WITH HIM. 40. THE ASSESSING OFFICER MADE VARIOUS ADDITIONS AN D PASSED ORDER DATED 12/12/2011 U/S 158 BC (C) /254 OF THE INCOME TAX A CT. 41. BEING AGGRIEVED BY THE SAME, THE ASSESSEE FILED APPEAL BEFORE US. 42. AS RELATES TO GROUND NOS. 1 AND 2 FOR ADDITION OF RS. 2,50,000/- RECEIVED FROM PROFESSIONAL LEASING & CAPITAL SERVICES LTD., ANOTHER GROUP COMPANY, THE LD. AR SUBMITTED THAT THE AMOUNT OF RS . 2.50 LACS WAS RECEIVED BY THE ASSESSEE COMPANY FROM PROFESSIONAL LEASING & CAPITAL SERVICES LTD. ON BEHALF OF MR. ANIL SANGHI (PROP. A NIL SANGHI & ASSOCIATES). THE ASSESSING OFFICER MADE THE ADDITION BY ALLEGING THAT ONLY COPIES OF LEDGER ACCOUNTS WERE PROVIDED AND NO CONFIRMATION F ROM M/S PROFESSIONAL LEASING & CAPITAL SERVICES LTD. HAS BEEN FILED. HOW EVER, THIS HAS BEEN ADMITTED BY THE ASSESSING OFFICER IN THE ORIGINAL A SSESSMENT ORDER AS WELL AS IN THE PRESENT ASSESSMENT ORDER THAT THE AMOUNT WAS RECEIVED FROM THE SAID COMPANY. THE LD. AR SUBMITTED THAT THE ASSESSEE COM PANY RECEIVED AN AMOUNT OF RS. 2.50 LACS BY CHEQUE FROM PROFESSIONAL LEASING & CAPITAL SERVICES LTD. ON BEHALF OF MR. ANIL SANGHI. THUS TH E AMOUNT WAS RECEIVED FROM THE SAID COMPANY BUT CREDITED IN THE ACCOUNT O F MR. ANIL SANGHI IN THE BOOKS OF THE ASSESSEE. THE LD. AR SUBMITTED THAT TH E ASSESSEE PRODUCED BANK ACCOUNT OF PROFESSIONAL LEASING & CAPITAL SERV ICES LTD. SHOWING 21 IT(SS)A NO. 6 & ORS/DEL/2012 PAYMENT OF RS. 2.50 LACS TO THE ASSESSEE COMPANY BE FORE THE ASSESSING OFFICER ALONG WITH THE LEDGER ACCOUNT OF PROFESSION AL LEASING & CAPITAL SERVICES LTD. IN THE BOOKS OF ANIL SANGHI SHOWING P AYMENT OF MONEY BY THIS COMPANY TO ASSESSEE COMPANY ON BEHALF OF ANIL SANGH I AND THE LEDGER ACCOUNT OF ASSESSEE COMPANY IN THE BOOKS OF ANIL SA NGHI SHOWING RECEIPT OF MONEY FROM PROFESSIONAL LEASING ON BEHALF OF ANIL S ANGHI, LEDGER ACCOUNT OF ANIL SANGHI IN THE BOOKS OF PROFESSIONAL LEASING & CAPITAL SERVICES LTD. SHOWING PAYMENT TO THE ASSESSEE COMPANY ON BEHALF O F ANIL SANGHI & ASSOCIATES. THE LD. AR SUBMITTED THAT THE CHEQUE NU MBER MENTIONED THEREIN MATCHES WITH THE NUMBER MENTIONED IN BANK A CCOUNT. THE LEDGER ACCOUNT OF ANIL SANGHI & ASSOCIATES IN THE BOOKS OF ASSESSEE COMPANY SHOWING THE RECEIPT OF RS. 2.50 LACS ON BEHALF OF A NIL SANGHI. ALL THESE LEDGER ACCOUNTS PROVE BEYOND DOUBT THAT THE ASSESSEE RECEI VED A CHEQUE OF RS. 2,50,000/- FROM M/S PROFESSIONAL LEASING ON BEHALF OF ANIL SANGHI AND ASSOCIATES AND ALL THE THREE PARTIES HAVE RECORDED THIS TRANSACTION IN THEIR BOOKS OF ACCOUNT. CONFIRMATION FROM PROFESSIONAL LE ASING & CAPITAL SERVICES LTD THAT THE AMOUNT OF RS. 2.50 LACS HAS BEEN PAID BY IT TO THE ASSESSEE COMPANY. MR. ANIL SANGHI HAS TWO PROPRIETORSHIP CON CERNS NAMELY ANIL SANGHI & ASSOCIATES AND GANPATI INVESTMENT CONSULTA NTS. MR. ANIL SANGHI DECLARED UNDISCLOSED INCOME OF RS. 27.64 CRORES IN HIS RETURN OF INCOME FILED FOR BLOCK ASSESSMENT PERIOD AS PER DETAILS HE REUNDER: PARTICULARS A.Y UNDISCLOSED INCOME ANIL SANGHI & ASSOCIATES 1994-95 4,61,500/ - 1995-96 1,58,27,900/- 1996-97 24,36,50,370/- GANPATI CONSULTANTS 1996-97 1,65,55,000/- TOTAL UNDISCLOSED INCOME 27,64,94,770/ - A COPY OF THE BALANCE SHEET OF ANIL SANGHI PLACED B EFORE THE AO AS STATED IN SUBMISSIONS FILED BEFORE THE AO SHOWS THAT THE ASSE TS SIDE OF THE BALANCE SHEET OF ANIL SANGHI SHOWS THE UTILIZATION OF THE U NDISCLOSED INCOME OF RS. 27.64 CRORES. THIS SHOWS THAT AN AMOUNT OF RS. 2,79 ,81,164/- HAS BEEN 22 IT(SS)A NO. 6 & ORS/DEL/2012 GIVEN TO THE ASSESSEE BY ANIL SANGHI OUT OF HIS UND ISCLOSED INCOME DECLARED IN HIS RETURN OF INCOME WHICH INCLUDES THE FOLLOWIN G AMOUNTS:- PAID DIRECTLY BY ANIL SANGHI 4,61,000/- PAID BY PROFESSIONAL LEASING ON BEHALF OF ANIL SANGHI 1,58,27,900/- PRELIMINARY EXPENSES PAID BY MR. ANIL SANGHI 24,36,50,370/- INSURANCE EXPENSES PAID BY MR. ANIL SANGHI 1,65,55,000/- CLOSING BALANCE AS PER LEDGER ACCOUNT 27,64,94,770/ - THE LD. AR SUBMITTED THAT PERUSAL OF THE LEDGER ACC OUNT OF THE ASSESSEE COMPANY IN THE BOOKS OF ANIL SANGHI & ASSOCIATES AN D VICE VERSA, IT WOULD BE SEEN THAT ENTRY OF RS. 2.50 LACS HAS BEEN DULY R EFLECTED AND THE CLOSING BALANCES IN BOTH THE LEDGERS TALLY WHICH CONFIRMS T HE TRANSACTIONS AND EXPLAINS THE SOURCE OF RS. 2.50 LACS. THUS THE ADDI TION SO MADE SHOULD BE DELETED. ALL THE THREE PERSONS WERE ASSESSED BY THE SAME ASSESSING OFFICER WHO HAD ACCESS TO THEIR BOOKS OF ACCOUNT, BANK ACCO UNTS ETC. AND COULD HAVE EXAMINED THE ISSUE WHICH HAS NOT BEEN DONE. ONCE IT IS ESTABLISHED THAT THE ASSESSEE COMPANY HAS RECEIVED THE MONEY FROM PROFESSIONAL LEASING & CAPITAL SERVICES LTD. (ON BE HALF OF MR. ANIL SANGHI) WHO IS AN INDEPENDENT ASSESSEE, THEN THE SOURCE STA NDS EXPLAINED AND NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE C OMPANY AT ALL. 43. THE LD. DR RELIED UPON THE ASSESSMENT ORDER. 44. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL THE RECORDS. THE ASSESSEE HAS PRODUCED ALL THE RECORDS BEFORE THE AS SESSING OFFICER. IT IS PERTINENT TO NOTE THAT THE LEDGER ACCOUNT OF THE AS SESSEE COMPANY IN THE BOOKS OF ANIL SANGHI & ASSOCIATES AND VICE VERSA, I T WOULD BE SEEN THAT ENTRY OF RS. 2.50 LACS HAS BEEN DULY REFLECTED AND THE CLOSING BALANCES IN 23 IT(SS)A NO. 6 & ORS/DEL/2012 BOTH THE LEDGERS TALLY WHICH CONFIRMS THE TRANSACTI ONS AND EXPLAINS THE SOURCE OF RS. 2.50 LACS. BESIDES THAT THERE IS CONF IRMATION RECEIVED FROM THE SAID COMPANY. IN FACT, ALL THE THREE PERSONS WERE A SSESSED BY THE SAME ASSESSING OFFICER WHO HAD ACCESS TO THEIR BOOKS OF ACCOUNT, BANK ACCOUNTS ETC. AND COULD HAVE EXAMINED THE ISSUE WHICH HAS NO T BEEN DONE. ONCE IT IS ESTABLISHED THAT THE ASSESSEE COMPANY HAS RECEIVED THE MONEY FROM PROFESSIONAL LEASING & CAPITAL SERVICES LTD. (ON BE HALF OF MR. ANIL SANGHI) WHO IS AN INDEPENDENT ASSESSEE, THEN THE SOURCE STA NDS EXPLAINED AND NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE C OMPANY AT ALL. THUS, ALL THE EXPLANATION ALONG WITH THE DOCUMENTS WAS PRODUC ED BEFORE THE ASSESSING OFFICER THEREFORE, THE ASSESSING OFFICER IS NOT CORRECT IN MAKING THESE ADDITIONS. GROUND NOS. 1 TO 2 ARE ALLOWED. 45. AS REGARDS GROUND NO. 3 FOR ADDITION OF RS. 35,398/- OF PRELIMINARY EXPENSES, THE LD. AR SUBMITTED THAT T HE ASSESSING OFFICER HAS STATED THAT THESE EXPENSES WERE INCURRED BY MR. ANIL SANGHI IN CASH BUT THIS AMOUNT HAS NOT BEEN PAID OUT OF HIS UNDISCLOSE D INCOME AND THEREFORE THE ADDITION WAS MADE. THE ASSESSING OFFICER HAS AC CEPTED THE FACT THAT THE SAID AMOUNT HAS BEEN PAID IN CASH BY MR. ANIL SANGH I. ONCE IT IS ESTABLISHED THAT THE AMOUNT HAS BEEN SPENT BY MR. A NIL SANGHI WHO IS AN INDEPENDENT ASSESSEE, THEN THE SOURCE OF THESE EXPE NSES STANDS EXPLAINED AND NO ADDITION CAN BE MADE IN THE HANDS OF THE ASS ESSEE COMPANY. THE ASSESSEE PRODUCED THE CASH BOOK OF ANIL SANGHI & AS SOCIATES SHOWING THE PAYMENT OF THE SAID AMOUNT OUT OF ITS CASH BALANCE ON 01/05/1995 BEFORE THE ASSESSING OFFICER. THE LD. AR SUBMITTED THAT PE RUSAL OF LEDGER ACCOUNT OF THE ASSESSEE COMPANY IN THE BOOKS OF ANIL SANGHI & ASSOCIATES CLEARLY SHOWS THE PAYMENT OF PRELIMINARY EXPENSES IN CASH. THE CLOSING BALANCES OF THE LEDGER ACCOUNTS TALLY WITH EACH OTHER AND WITH THE BALANCE SHEET OF MR. ANIL SANGHI AFTER RECORDING THE SAID ENTRY. BALANCE SHEET OF MR. SANGHI SHOWS THAT AN AMOUNT OF RS. 2,79,81,164/- HAS BEEN GIVEN TO ASSESSEE COMPANY OUT OF HIS UNDISCLOSED INCOME OF RS.27,64,9 3,670/- WHICH INCLUDES THIS AMOUNT OF PRELIMINARY EXPENSES AS EXP LAINED ABOVE. THUS SOURCE OF THIS AMOUNT STANDS EXPLAINED. MR. ANIL SA NGHI HAS DECLARED THE 24 IT(SS)A NO. 6 & ORS/DEL/2012 UNDISCLOSED INCOME ON THE BASIS OF PEAK CALCULATED ON THE BASIS OF CASH RECEIPTS / PAYMENTS / DEPOSITS IN BANK ETC. ONCE TH E PEAK IS DECLARED AS INCOME THEN THE UTILIZATION OF FUNDS CANNOT BE ADDE D AGAIN. THIS AMOUNT OF RS. 35,398/- IS A UTILIZATION OF UNDISCLOSED INCOME OF MR. ANIL SANGHI AND THEREFORE CANNOT BE TAXED IN THE HANDS OF ASSESSEE COMPANY IN ANY MANNER. 46. THE DR RELIED UPON THE ASSESSMENT ORDER. 47. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL THE RELEVANT RECORDS. THE DOCUMENTS WERE PRODUCED BEFORE THE ASSESSING OF FICER AND THEREFORE, THE ASSESSING OFFICER SHOULD HAVE TAKEN PROPER COGN IZANCE TO THAT EFFECT. PERUSAL OF LEDGER ACCOUNT OF THE ASSESSEE COMPANY I N THE BOOKS OF ANIL SANGHI & ASSOCIATES CLEARLY SHOWS THE PAYMENT OF PR ELIMINARY EXPENSES IN CASH. THE CLOSING BALANCES OF THE LEDGER ACCOUNTS T ALLY WITH EACH OTHER AND WITH THE BALANCE SHEET OF MR. ANIL SANGHI AFTER REC ORDING THE SAID ENTRY. BALANCE SHEET OF MR. SANGHI SHOWS THAT AN AMOUNT OF RS. 2,79,81,164/- HAS BEEN GIVEN TO ASSESSEE COMPANY OUT OF HIS UNDISCLOS ED INCOME OF RS.27,64,93,670/- WHICH INCLUDES THIS AMOUNT OF PRE LIMINARY EXPENSES AS EXPLAINED ABOVE. THUS SOURCE OF THIS AMOUNT STANDS EXPLAINED. MR. ANIL SANGHI HAS DECLARED THE UNDISCLOSED INCOME ON THE B ASIS OF PEAK CALCULATED ON THE BASIS OF CASH RECEIPTS / PAYMENTS / DEPOSITS IN BANK ETC. ONCE THE PEAK IS DECLARED AS INCOME THEN THE UTILIZATION OF FUNDS CANNOT BE ADDED AGAIN. THIS AMOUNT OF RS. 35,398/- IS A UTILIZATION OF UNDISCLOSED INCOME OF MR. ANIL SANGHI AND THEREFORE CANNOT BE TAXED IN TH E HANDS OF ASSESSEE COMPANY IN ANY MANNER. THUS, ALL THE EXPLANATION AL ONG WITH THE DOCUMENTS WAS PRODUCED BEFORE THE ASSESSING OFFICER THEREFORE, THE ASSESSING OFFICER IS NOT CORRECT IN MAKING THESE AD DITIONS. GROUND NOS. 3 ARE ALLOWED. 48. AS REGARDS GROUND NO. 4 FOR ADDITION OF RS. 500/- BEING CASH F OR OPENING BANK ACCOUNT, THE LD. AR SUBMITTED THAT N OTHING HAS BEEN MENTIONED FOR MAKING ADDITION OF RS. 500/-. NO QUER Y WAS RAISED REGARDING THIS AMOUNT DURING ASSESSMENT PROCEEDINGS. THE SAID AMOUNT WAS DEPOSITED ON 28/9/95 IN ALLAHABAD BANK (TO OPEN THE BANK ACCOUNT) OUT OF 25 IT(SS)A NO. 6 & ORS/DEL/2012 RS. 7,000/- RECEIVED IN CASH ON 21/9/1995 AS SHARE APPLICATION MONEY FROM INITIAL SUBSCRIBERS. 49. THE LD. DR RELIED UPON THE ASSESSMENT ORDER. 50. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL THE RECORDS. IT IS PERTINENT TO NOTE THAT THE ASSESSEE HAS GIVEN ALL T HE DETAILS TO THE ASSESSING OFFICER. NO QUERY WAS RAISED REGARDING THIS AMOUNT DURING ASSESSMENT PROCEEDINGS. THE SAID AMOUNT WAS DEPOSITED ON 28/9/ 95 IN ALLAHABAD BANK (TO OPEN THE BANK ACCOUNT) OUT OF RS. 7,000/- RECEIVED IN CASH ON 21/9/1995 AS SHARE APPLICATION MONEY FROM INITIAL S UBSCRIBERS. THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING AN ADDITION AND GROUND NO. 4 IS ALLOWED. 51. AS REGARDS AS RELATES TO GROUND NO. 5 TO 8 IN R ESPECT OF INTEREST ON NCD WITH BANK FOR A.Y. 1996-97 FOR RS. 9,99,474/-, INTEREST FROM P. C. YADAV FOR A.Y. 1996-97 FOR RS. 29,180/- AS WELL AS INTEREST ON NCD WITH BANK OF RS.12,83,917/- FOR A.Y. 1997-98. THUS, ADDI TION TOTALLY TO RS.23,12,571/-, THE LD. AR SUBMITTED THAT IDENTICAL ISSUE IS DECIDED BY THE ITAT IN THE FOLLOWING GROUP COMPANIES: I) SHILPI SECURITIES (P) LTD. ITA NO.2/DEL/2012 ORD ER DATED 29.01.2016 II) HARMONY PSYCHIATRY CENTRE PVT. LTD. IT(SS)A NO. 3/DEL/2012 ORDER DATED 07.10.2016 THE LD. AR FURTHER SUBMITTED THAT THIS ADDITIONS WE RE MADE BY THE ASSESSING OFFICER ON THE BASIS OF NO BOOKS OF ACCOU NT WERE FOUND OR SEIZED DURING SEARCH AS HAS BEEN MENTIONED IN THE ORIGINAL ASSESSMENT ORDER. THE ASSESSING OFFICER FURTHER OBSERVED THAT THE ASSESSE E DID NOT PRODUCE ANY BOOKS OF ACCOUNT BEFORE INVESTIGATION WING OR BEFOR E THE ASSESSING OFFICER DURING BLOCK ASSESSMENT PROCEEDINGS. THE ASSESSEE D ID NOT FILE ITS RETURNS OF INCOME FOR THE AYS 1996-97 AND 1997- 98 TILL THE DATE OF COMPLETION OF BLOCK ASSESSMENT PROCEEDINGS U/S 158BC ON 29/9/97 B UT FILED THE SAME ON 12/11/97. THIS PROVES THAT THE ASSESSEE DID NOT HAV E ANY BOOKS OF ACCOUNT 26 IT(SS)A NO. 6 & ORS/DEL/2012 BUT PREPARED THE SAME AFTER COMPLETION OF ITS BLOCK ASSESSMENT TO GIVE THE COLOUR OF REGULAR INCOME TO ITS UNDISCLOSED INCOME. THE LD. AR SUBMITTED THIS ADDITION OF INTEREST HAS BEEN MADE BY THE ASSE SSING OFFICER ON THE BASIS OF ENTRIES IN THE BANK ACCOUNT AS HAS BEEN REFERRED TO IN THE ORIGINAL ASSESSMENT ORDER AT PAGE 8 PARA 28 AND NOT ON THE B ASIS OF ANY SEIZED MATERIAL. SECTION 158BB PROVIDES FOR COMPUTATION O F UNDISCLOSED INCOME FOR THE BLOCK PERIOD. THE INCOMES COMPUTED ON THE B ASIS OF SECTION 158BB(L)(A) TO (F) HAS TO BE EXCLUDED WHILE COMPUTI NG UNDISCLOSED INCOME. SECTION 158BB(L)(D) PROVIDES THAT IN A CASE WHERE T HE PREVIOUS YEAR HAS NOT ENDED OR THE DATE OF FILING OF RETURN OF INCOME UND ER 139(1) HAS NOT EXPIRED, THEN INCOME DETERMINED ON THE BASIS OF ENTRIES RELA TING TO SUCH INCOME OR TRANSACTIONS AS RECORDED IN THE BOOKS OF ACCOUNT AN D OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE ON OR BEFORE THE DA TE OF SEARCH SHALL BE EXCLUDED FROM THE UNDISCLOSED INCOME. SEARCH WAS UN DERTAKEN ON THE ASSESSEE ON 08/07/1996. RETURN OF INCOME FOR THE AY S 1996-97 AND 1997- 98 WERE DUE TO BE FILED ON 30/11/96 AND 30/11/97 RE SPECTIVELY. THUS BOTH THESE RETURNS WERE NOT DUE FOR FILING AS ON THE DAT E OF SEARCH. BOTH THE RETURNS WERE FILED ON 12/11/97 (BELATED IN CASE OF AY 1996-97 AND IN TIME IN CASE OF AY 1997-98). THE LD. AR SUBMITTED THAT T HE BOOKS OF ACCOUNT WERE MAINTAINED BY THE ASSESSEE REGULARLY. THE SAME WERE FILED BEFORE THE THEN AO DURING THE BLOCK ASSESSMENT PROCEEDINGS VID E LETTER DATED 12/9/97. THIS LETTER CLEARLY PROVES THAT BOOKS OF A CCOUNT WERE NOT ONLY MAINTAINED BUT WERE ALSO FILED BEFORE THE ASSESSING OFFICER IN THE FIRST ROUND OF ASSESSMENT AND MUST HAVE BEEN AVAILABLE TO THE A SSESSING OFFICER IN THE SECOND ROUND OF ASSESSMENT. THE AVERMENT OF THE ASS ESSING OFFICER THAT THE BOOKS WERE NOT FOUND OR SEIZED DURING SEARCH IS BAS ELESS AS THE SEARCH WAS UNDERTAKEN ON THE BANK ACCOUNT OF THE ASSESSEE AS M ENTIONED IN PARA 1 OF THE ASSESSMENT ORDER. BOOKS OF ACCOUNT ARE MAINTAIN ED ON THE REGISTERED OFFICE OF THE COMPANY OR ITS BRANCHES AND NOT AT TH E BANK PREMISES. THE INTEREST INCOME WAS DULY DECLARED IN THE PROFIT AND LOSS ACCOUNTS FOR THE YEARS ENDED 31/3/96 AND 31/3/1997. THE SAME WERE AC CEPTED IN THE INTIMATION U/S 143(1) AND ALSO IN THE REGULAR ASSES SMENT PASSED U/S 143(3) IN BOTH THE ASSESSMENT YEARS. SINCE NCD WAS MADE TH ROUGH BANKING 27 IT(SS)A NO. 6 & ORS/DEL/2012 CHANNEL AND THE INTEREST EARNED THEREON WAS DULY RE CORDED IN BOOKS OF ACCOUNT AND THE RETURNS FOR THE AYS 1996-97 AND 199 7-98 HAVE NOT FALLEN DUE AT THE TIME OF SEARCH, THE INTEREST INCOME CANN OT BE CONSIDERED AS UNDISCLOSED INCOME IN VIEW OF THE PROVISIONS OF SEC TION 158BB(1). AS REGARDS GROUNDS NO. 6 AND 8, THE LD. AR SUBMITTED THAT WITH OUT PREJUDICE TO GROUNDS NO. 5 AND 7, THE ASSESSEE HAS DECLARED THE IMPUGNED INTEREST INCOME IN ITS REGULAR RETURNS OF INCOME FILED FOR A Y 1996-97 AND 1997-98 WHICH HAS BEEN ACCEPTED AS SUCH BY THE ASSESSING OF FICER IN REGULAR ASSESSMENT FRAMED U/S 143(3). THE AO HAS ACCEPTED T HE FACT THAT THE INTEREST OF RS. 23,12,571/- AS STATED ABOVE IS THE SAME AMOUNT OF INTEREST INCOME DECLARED BY THE ASSESSEE IN HIS REGULAR RETU RNS OF INCOME AS THIS FACT HAS NOT BEEN REBUTTED BY HIM IN THE ASSESSMENT ORDE R. IF THE IMPUGNED INTEREST INCOME IS ASSESSED AS UNDISCLOSED INCOME U /S 158BC THEN THE SAME SHOULD BE EXCLUDED FROM THE INCOME ASSESSED IN REGULAR ASSESSMENTS FRAMED FOR THE AYS 1996-97 AND 1997-98 AS THE SAME INCOME CANNOT BE TAXED TWICE. 52. THE LD. DR RELIED UPON THE ASSESSMENT ORDER. 53. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL THE RECORDS. IT IS PERTINENT TO NOTE THAT IDENTICAL ISSUE IS DECIDED B Y THE ITAT IN THE FOLLOWING GROUP COMPANIES: I) SHILPI SECURITIES (P) LTD. ITA NO.2/DEL/2012 ORD ER DATED 29.01.2016 II) HARMONY PSYCHIATRY CENTRE PVT. LTD. IT(SS)A NO. 3/DEL/2012 ORDER DATED 07.10.2016 THUS, THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESS EE. GROUND NO. 5 TO 8 ARE ALLOWED. 54. AS REGARDS GROUND NO. 9 AND ADDITIONAL GROUND N O. 11, THE LD. AR SUBMITTED THAT ADDITION OF RS.29,78,000/- ON THE BA SIS OF SEIZED MATERIAL FOUND FROM THE RESIDENCE OF MR. ANIL SANGHI ON 01.1 1.1996 AS PER ANNEXURE A-13, THE ASSESSING OFFICER WAS TOTALLY INCORRECT I N ADDING THE SAID AMOUNT. THE LD. AR FURTHER SUBMITTED FOR THE ADDITIONAL GRO UND NO. 11 THAT IN CASE 28 IT(SS)A NO. 6 & ORS/DEL/2012 OF ASSESSEE, THE SEARCH OPERATIONS WERE CARRIED OUT ON 27.06.1996 ONLY AT THE BANK ACCOUNT OF THE ASSESSEE AND NOWHERE ELSE. ANNEXURE A-13, PARTY S-3 WAS FOUND DURING THE COURSE OF SEARCH AT THE RE SIDENCE OF MR. ANIL SANGHI ON 01.11.1996 AND NOT FROM THE POSSESSION OF THE ASSESSEE COMPANY. THUS, THIS ANNEXURE HAS BEEN SEIZED AFTER THE SEARCH WAS CONCLUDED IN THE CASE OF THE ASSESSEE COMPANY AS TH E BLOCK PERIOD OF THE ASSESSEE COMPANY IS FROM 01.04.1986 TO 08.07.1996. INFORMATION COLLECTED POST SEARCH CAN BE USED IN THE ASSESSMENT FOR THE B LOCK PERIOD IF AND ONLY IF THE ASSESSING OFFICER WAS OF THE OPINION THAT THE S AID SEIZED MATERIAL WAS RELATED TO THE ASSESSEE COMPANY AND HE HAS RECORDED HIS SATISFACTION U/S 158 BD TO THIS EFFECT. HOWEVER, THIS HAS NOT BEEN D ONE IN THIS CASE. IT IS SETTLED LAW NO ADDITION CAN BE MADE ON THE BASIS OF MATERIAL SEIZED FROM THE PREMISES OF SOME OTHER ASSESSEE AFTER CONCLUSION OF SEARCH IN CASE OF THE ASSESSEE COMPANY WITHOUT RECORDING SATISFACTION U/S 158BD. FURTHER THE SEIZED ANNEXURE DID NOT RELATE TO THE MATERIAL SEIZ ED DURING THE COURSE OF SEARCH IN THE CASE OF THE ASSESSEE AS NOTHING HAS B EEN MENTIONED ABOUT THE SAME IN THE ASSESSMENT ORDER. 55. THE DR RELIED UPON THE ASSESSMENT ORDER AND OP POSED THE ADDITIONAL GROUND. 56. THE LD. DR VEHEMENTLY OPPOSED THE ADDITIONAL GR OUND AND SUBMITTED THAT THE DECISION OF NATIONAL THERMAL POWER CORPORA TION LTD. VS. CIT 229 ITR 383 (SC) IS NOT APPLICABLE IN THE PRESENT CASE. 57. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL THE RELEVANT RECORDS. AS REGARDS GROUND NO. 9 IS CONCERNED THE LD. AR SUB MITTED THAT THE ASSESSEE HAS PRODUCED ALL THE RECORDS DESPITE THAT THE ASSESSING OFFICER MADE THE ADDITION. THUS, ALL THE EXPLANATION ALONG WITH THE DOCUMENTS WAS PRODUCED BEFORE THE ASSESSING OFFICER, BUT THE ASSE SSING OFFICER HAS NOT TAKEN COGNIZANCE OF THE SAME. THEREFORE, IT WILL BE APPROPRIATE TO REMAND BACK THIS ISSUE TO THE FILE OF THE ASSESSING OFFICE R. NEEDLESS TO SAY, THE ASSESSEE BE GIVEN OPPORTUNITY OF HEARING BY FOLLOWI NG PRINCIPLES OF NATURAL 29 IT(SS)A NO. 6 & ORS/DEL/2012 JUSTICE. GROUND NO. 9 IS ALLOWED FOR STATISTICAL PU RPOSE. THE ADDITIONAL GROUND IS A LEGAL GROUND WHICH HAS TO BE ADMITTED T HAT AS THE SAME IS PURELY LEGAL IN NATURE AND THE DECISION OF THE HON BLE APEX COURT IN CASE OF NATIONAL THERMAL POWER CORPORATION LTD. IS SQUARELY APPLICABLE IN THE PRESENT CASE. IN FACT IDENTICAL GROUND WAS RAISED I N CASE OF GROUP COMPANIES, M/S HARMONY PSYCHIATRY CENTRE (P) LTD. A ND M/S UIKAM INVESTMENT FINANCE (P) LTD. WHEREIN THE ITAT DECIDE D THIS GROUND IN FAVOUR OF THE ASSESSEE. THEREFORE, WE ARE NOW DISCUSSING T HE MERIT OF THIS GROUND. THE SEIZED ANNEXURE DID NOT RELATE TO THE MATERIAL SEIZED DURING THE COURSE OF SEARCH IN THE CASE OF THE ASSESSEE AS NOTHING HA S BEEN MENTIONED ABOUT THE SAME IN THE ASSESSMENT ORDER. THEREFORE, ADDITI ONAL GROUND NO. 13 IS ALLOWED. 58. IN RESULT, APPEAL BEING IT(SS)A NO.4/DEL/2012 F ILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. NOW WE ARE TAKING UP OF ANNIE INVESTMENT & FINANCE (P) LTD. 59. THE GROUNDS OF APPEAL ARE AS UNDER:- IT(SS) A .NO. 1/DEL/2012 1. THE ASSESSING OFFICER ERRED IN LAW AND ON FACTS IN MAKING ADDITIONS OF THE AMOUNTS DEPOSITED IN BANK OF THE ASSESSEE OTHER THAN RECEIVED FROM MR. ANIL SANGHI IGNORING THE FACTS AND EVIDENCES PLACED ON RECORD TO PROVE THE SOURCE OF SUCH DEPOSIT AND WITHOUT RAISING ANY QUER Y IN THIS REGARD. THUS THE SAID ADDITIONS SHOULD BE DELETED. 2. THE ASSESSING OFFICER ERRED IN LAW AND ON THE FA CTS IN MAKING AN ADDITION OF RS. 500/- (INCORRECTLY MENTIONED AS RS. 5,000/- WHILE COMPUTING ASSESSABLE INCOME) BEING CASH DEPOSITED FOR OPENING THE BANK ACCOUNT # 1125 WITH J&K BANK IGNORING THAT THE SAME HAS BEEN DEPOSITED OUT OF CASH IN HAND AVAILABLE WITH THE ASSESSEE. THUS THE ADDIT ION SO MADE SHOULD BE DELETED. 3. THE ASSESSING OFFICER ERRED IN LAW AND ON THE FACTS IN MAKING AN ADDITION OF RS. 1,00,000/- RECEIVED BY THE ASSESSEE FROM M/S PROFESSIONAL LEASING & CAPITAL SERVICES LIMITED THROUGH BANKING CHANNELS IGNORING THE FACTS AND EVIDENCES PLACED ON RECORD AND WITHOUT RA ISING ANY FURTHER QUERY IN THIS REGARD. THUS THE ADDITION SO MADE SHOULD BE DELETED. 4 THE ASSESSING OFFICER ERRED IN LAW AND ON THE FAC TS IN MAKING AN 30 IT(SS)A NO. 6 & ORS/DEL/2012 ADDITION OF RS. 1,90,000/- RECEIVED FROM ANIL SANGH I THROUGH BANKING CHANNEL AND NOT FROM PROFESSIONAL LEASING AND CAPIT AL SERVICES LTD. AS MENTIONED IN THE ASSESSMENT ORDER IGNORING THE FACT S AND EVIDENCES PLACED ON RECORD TO PROVE THE SOURCE OF THE SAID DEPOSIT. THUS THE ADDITION SO MADE SHOULD BE DELETED. 5. THE ASSESSING OFFICER ERRED IN LAW AND ON THE FA CTS IN MAKING AN ADDITION OF RS. 2,50,000/- RECEIVED BY THE ASSESSEE FROM SAVING BANK ACCOUNT NOS. 3323 TO 3327 WHICH IN TURN RECEIVED MO NEY FROM MR. ANIL SANGHI IGNORING THE FACTS AND EVIDENCES PLACED ON R ECORD TO PROVE THE SOURCE OF THE SAID DEPOSIT. THUS THE ADDITION SO MADE SHOU LD BE DELETED. 6. THE ASSESSING OFFICER ERRED IN LAW AND ON THE F ACTS IN MAKING AN ADDITION OF RS. 1,97,004/- BEING INTEREST AND OTHE R INCOME IGNORING THE FACTS AND EVIDENCES PLACED ON RECORD TO SHOW THAT T HE TRANSACTIONS REGARDING THE SAID INCOME WERE DULY RECORDED IN THE BOOKS OF ACCOUNT AND THE SAME WAS DULY DECLARED IN THE REGULAR RETURN OF INCOME. 1 ;IUS THE ADDITION SO MADE SHOULD BE DELETED. 7. WITHOUT PREJUDICE TO THE ABOVE SUBMISSIONS, IF T HE ADDITION OF RS. 1,97,004/- IS SUSTAINED IN THE BLOCK ASSESSMENT PER IOD, THEN DIRECTIONS SHOULD BE ISSUED TO EXCLUDE THE SAID INTEREST INCOM E OFFERED FOR TAXATION IN THE REGULAR ASSESSMENT AS THE SAME INCOME CANNOT BE TAXED TWICE. 8. THE ASSESSING OFFICER ERRED IN LAW AND ON THE FA CTS IN MAKING AN ADDITION OF RS. 1,000/- BEING CASH DEPOSITED FOR OP ENING THE BANK ACCOUNT #32249 WITH PUNJAB NATIONAL BANK IGNORING THE FACT THAT THE SAME HAS BEEN DEPOSITED OUT OF CASH IN HAND AVAILABLE WITH THE TH US THE ADDITION SO MADE SHOULD BE DELETED. 9. THE ASSESSING OFFICER ERRED IN LAW AND ON THE FA CTS IN MAKING AN ADDITION OF RS. 3,00,000/- RECEIVED BY THE ASSESSEE FROM M/S DEVYANI SECURITIES PRIVATE LIMITED THROUGH BANKING CHANNELS IGNORING THE FACTS AND EVIDENCES PLACED ON RECORD. THUS THE ADDITION SO MA DE SHOULD BE DELETED. 10. THE ASSESSING OFFICER ERRED IN LAW AND ON THE F ACTS IN MAKING AN ADDITION OF RS. 6,87,728/- BEING INTEREST ON DEPOSI TS AND OTHER INCOME IGNORING THE FACTS AND EVIDENCES PLACED ON RECORD T O SHOW THAT THE TRANSACTIONS REGARDING THE SAID INCOME WERE DULY RE CORDED IN THE BOOKS OF ACCOUNT AND THE SAME WAS DULY DECLARED IN THE REGUL AR RETURN OF INCOME BEFORE THE DUE DATE. THUS THE ADDITION SO MADE SHOU LD BE DELETED. 11. WITHOUT PREJUDICE TO THE ABOVE SUBMISSIONS, IF THE ADDITION OF RS. 6,87,728/- IS SUSTAINED IN THE BLOCK ASSESSMENT PER IOD, THEN DIRECTIONS SHOULD BE ISSUED TO EXCLUDE THE SAID INTEREST INCOM E OFFERED FOR TAXATION IN THE REGULAR ASSESSMENT AS THE SAME INCOME CANNOT BE TAXED TWICE. 31 IT(SS)A NO. 6 & ORS/DEL/2012 12. THE ASSESSING OFFICER ERRED IN LAW AND ON THE F ACTS IN MAKING AN ADDITION OF RS. 1,000/- BEING CASH DEPOSITED FOR O PENING THE BANK ACCOUNT # 1498 IN SYNDICATE BANK IGNORING THE FACT THAT THE SAME HAS BEEN DEPOSITED OUT OF CASH IN HAND AVAILABLE WITH THE AS SESSEE. THUS THE ADDITION SO MADE SHOULD BE DELETED. 13. THE ASSESSING OFFICER ERRED IN LAW AND ON FACT S IN MAKING AN ADDITION OF RS. 4,10,959/- BEING THE INTEREST RECEIVED ON DE POSIT WITH SURYA ROSHNI LTD. IGNORING THE FACT THAT DUE TDS WAS DEDUCTED ON THE SAID INTEREST AND THE TRANSACTIONS WERE DVLY RECORDED IN THE BOOKS OF THE ASSESSEE AND REGULAR BANK ACCOUNT AND THE INTEREST INCOME WAS DU LY DECLARED IN THE REGULAR RETURNS OF INCOME FILED BEFORE THE DUE DATE . THUS THE ADDITION SO MADE SHOULD BE DELETED. 14. THE ASSESSING OFFICER ERRED IN LAW AND ON FACTS IN NOT ALLOWING CREDIT OF TAX OF RS. 94,521/- DEDUCTED ON THE INTEREST INCOME OF RS. 4,10,959/- THOUGH THE CONDITIONS LAID DOWN BY THE LAW HAVE BEE N FULFILLED BY THE ASSESSEE. NECESSARY DIRECTIONS TO ALLOW CREDIT OF T DS OF RS. 94,521/- SHOULD BE GIVEN. 15. WITHOUT PREJUDICE TO THE ABOVE SUBMISSIONS, IF THE ADDITION OF RS. 4,10,959/- IS SUSTAINED IN THE BLOCK ASSESSMENT PER IOD, THEN DIRECTIONS SHOULD BE ISSUED TO EXCLUDE THE SAID INTEREST INCOM E OFFERED FOR TAXATION IN THE REGULAR ASSESSMENT AS THE SAME INCOME CANNOT BE TAXED TWICE. 16. THE ASSESSING OFFICER ERRED IN LAW AND ON FACTS IN MAKING AN ADDITION OF RS. 14,65,000/- BEING THE AMOUNT INVESTED TO PURCHA SE SHARES OF SOME LISTED COMPANIES IGNORING THE FACTS THAT THE CONSID ERATION FOR THE SAME HAS BEEN PAID TO THE SELLER (PROFESSIONAL LEASING AND C APITAL SERVICES LTD.) BY ISSUING SHARES OF THE ASSESSEE COMPANY. THUS THE AD DITION SO MADE SHOULD BE DELETED. 17. THE ASSESSING OFFICER ERRED IN LAW AND ON FACTS IN MAKING AN ADDITION OF RS. 20,00,000/- BEING THE AMOUNT EXCESS MENTIONED I N THE FORM NO. 2 FILED DURING THE COURSE OF SEARCH IGNORING THE FACT THAT A MISTAKE WAS MADE WHILE FILLING THE SAID FORM AND NO EVIDENCE WAS FOUND TO SHOW THAT ANY UNDISCLOSED INCOME WAS EARNED BY THE ASSESSEE. THUS THE ADDITION SO MADE SHOULD BE DELETED. 18. WITHOUT PREJUDICE TO THE ABOVE SUBMISSION, THE SHARE CAPITAL OF RS. 20 LACS HAS BEEN MENTIONED AGAINST PROFESSIONAL LEASIN G AND CAPITAL SERVICES LTD. WHO WAS BEING ASSESSED BY THE SAME ASSESSING O FFICER. SINCE THE ASSESSEE HAS BEEN ABLE TO ESTABLISH THE IDENTITY OF THE SHARE HOLDER, NO ADDITION COULD BE MADE IN THE HANDS OF THE ASSESSEE COMPANY. THUS THE ADDITION SO MADE SHOULD BE DELETED. 32 IT(SS)A NO. 6 & ORS/DEL/2012 19. WITHOUT PREJUDICE TO THE GROUNDS NO. 16,17 AND 18, IF THE ADDITION OF RS. 20 LACS IS SUSTAINED THEN TELESCOPING OF THE SA ID AMOUNT AGAINST PURCHASE OF SHARES WORTH RS. 14,65,000/- SHOULD BE ALLOWED AS THE ADDITION CANNOT BE MADE FOR RECEIPT OF MONEY AS WEL L AS UTILIZATION OF THE SAME. 20. THE APPELLANT CRAVES THE LEAVE TO ADD, SUBSTITU TE, MODIFY, DELETE OR AMEND ALL OR ANY GROUND OF APPEAL EITHER BEFORE OR AT THE TIME OF HEARING. 60. THE ASSESSEE COMPANY IS RELATED TO SHRI PRAKASH CHANDRA YADAV GROUP OF CASES. SHRI PRAKASH CHANDRA YADAV IS ALLEG EDLY THE KEY PERSON ACCUSED IN THE RS.133-CRORE UREA IMPORT SCANDAL. SE ARCH WARRANT U/S 132 (1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED THE ACT) WAS ISSUED IN THE CASE OF THE ASSESSEE ON 27/6/1996 AND 19/09/1996 CO VERING ITS BANK ACCOUNT NUMBER 1125 IN J & K BANK, NOIDA AND ACCO UNT NUMBER 1498 IN SYNDICATE BANK, MALIWARA, GHAZIABAD, RESPECTIVELY W HICH WERE EXECUTED ON 20/9/1996. THEREAFTER, NOTICE U/S 158 BC OF THE AC T WAS ISSUED ON 07/04/1997 AND ASSESSMENT U/S 158 BC (C) OF THE ACT WAS COMPLETED ON 29/09/1997 AT AN UNDISCLOSED INCOME OF RS. 2,18,47, 245/- AGAINST THE RETURNED UNDISCLOSED INCOME OF RS. 15,69,171/-. 61. THE ASSESSEE FILED AN APPEAL AGAINST THIS ORDER BEFORE THE HON'BLE ITAT, NEW DELHI. 'THE ITAT, NEW DELHI VIDE ITS ORDE R DATED 17/03/2006 IN APPEAL NO. IT(SS)A NO. 243/DEL/1997 OBSERVED THAT W ARRANT OF AUTHORIZATION WAS NEVER ISSUED AS NO SEARCH WARRANT WAS PRODUCED BEFORE IT FOR VERIFICATION AND HELD THE BLOCK ASSESSMENT PROC EEDINGS AS VOID AB INITIO. ACCORDINGLY, THE ASSESSMENT WAS DECLARED AS INVALID AND WAS QUASHED BY THE ITAT, NEW DELHI. THE DEPARTMENT FILED APPEAL BE FORE THE HON'BLE HIGH COURT OF DELHI AGAINST THIS ORDER AND PRODUCED THE WARRANT OF AUTHORISATION BEFORE IT. THEREAFTER, THE HONBLE DELHI HIGH COURT VIDE ITS ORDER DATED 31/10/2007 RESTORED THE APPEAL TO THE ITAT, DELHI F OR BEING CONSIDERED AFRESH. 62. THE ITAT, NEW DELHI VIDE ITS ORDER DATED 30/04/ 2008 IN IT(SS)A NO. 245/DEL/1997, WITHOUT EXAMINING THE MERITS OF THE A DDITIONS MADE, HELD THAT THE BLOCK ASSESSMENT WAS NOT VALID BECAUSE SEA RCH WARRANT ISSUED U/S 33 IT(SS)A NO. 6 & ORS/DEL/2012 132 (1) WAS ILLEGAL; THE ASSESSMENT ORDER PASSED BY THE AO ON 29/09/1997 WAS PASSED BEYOND THE DATE OF LIMITATION SPECIFIED U/S 158 BE OF THE ACT AND ALSO THAT THE WARRANT OF AUTHORIZATION SIGNED B Y THE ADDITIONAL DIRECTOR OF INCOME TAX WAS WITHOUT ANY AUTHORITY. THE DEPART MENT FILED AN APPEAL BEFORE THE HON'BLE HIGH COURT OF DELHI AGAINST THIS ORDER. THE HONBLE HIGH COURT VIDE ITS ORDER DATED 30/11/2009 HELD THAT THE WARRANT SIGNED BY THE ADDITIONAL DIRECTOR OF INCOME TAX WOULD NOT BE INVA LID AS HE HAD THE NECESSARY AUTHORITY, IN VIEW OF THE AMENDED PROVISI ONS OF THE SECTION 132 OF THE ACT. ACCORDINGLY, THE HON'BLE HIGH COURT SET AS IDE THE JUDGEMENT OF THE TRIBUNAL AND RESTORED BACK THE APPEAL TO THE FILE O F THE TRIBUNAL FOR DECISION ON MERITS. 63. CONSEQUENTLY, THE HON'BLE ITAT, DELHI BENCH 'A' , NEW DELHI VIDE ITS ORDER DATED 10/01/2011 IN IT(SS)A NO. 243/DEL/97, S ET ASIDE AND RESTORED BACK THE ISSUES INVOLVED IN THE APPEAL OF THE ASSES SEE TO THE FILE OF THE AO WITH THE DIRECTION TO DECIDE THE ISSUES IN QUESTION IN THE LIGHT OF ITS OBSERVATIONS IN THE CASE OF M/S PATLIPUTRA CREDIT A ND SECURITIES LIMITED IN IT(SS)A NO. 372/DEL/97 DATED 17/03/2006, AND IN IT( SS)A NO. 10/DEL/08 DATED 31/03/2009. 64. THE ITAT FURTHER HELD THAT THESE ORDERS OF THE TRIBUNAL, MUTATIS MUTANDIS WILL APPLY TO THE PRESENT CASE. VIDE PARA- 5 OF ITS ORDER DATED 10/01/2011, THE HON'BLE ITAT HAS RESTORED BACK THE ISSUES INVOLVED IN THE APPEAL TO THE FILE OF THE AO WITH THE DIRECTIONS TO DECIDE THE ISSUES IN QUESTION IN THE LIGHT OF ITS OBSERVATIONS IN THE CA SE OF PATLIPUTRA CREDIT AND SECURITIES LIMITED (SUPRA). 65. IN RESPONSE TO THESE NOTICES, SHRI ANIL SANGHI, DIRECTOR OF THE COMPANY ATTENDED THE PROCEEDINGS AND FILED NECESSAR Y DETAILS AND CLARIFICATIONS AS PLACED ON RECORD. THE DETAILS SU BMITTED WERE DISCUSSED WITH HIM. THE ASSESSING OFFICER MADE VARIOUS ADDIT IONS AND PASSED ORDER DATED 12/12/2011 U/S 158 BC (C) /254 OF THE INCOME TAX ACT. 66. BEING AGGRIEVED BY THE SAME, THE ASSESSEE FILED APPEAL BEFORE US. 34 IT(SS)A NO. 6 & ORS/DEL/2012 67. AS REGARDS GROUND NO. 1 IS GENERAL NATURE AS PE R THE SUBMISSIONS OF THE LD. AR. AS REGARDS, GROUND NOS. 2, 8, AND 12, T HE LD. AR SUBMITTED THAT ADDITION MADE FOR DEPOSIT OF CASH OF RS. 500/-, 1,0 00/- AND 1,000/- FOR OPENING THREE DIFFERENT BANK ACCOUNTS. THE SAID CAS H WAS DEPOSITED OUT OF CASH RECEIVED AS SHARE APPLICATION MONEY AND CASH I N HAND AVAILABLE IN THE BOOKS OF ACCOUNT. THESE BANK BALANCES HAVE BEEN DUL Y DISCLOSED IN THE BOOKS OF ACCOUNT AND AUDITED FINANCIAL STATEMENTS A ND THUS NO ADDITION IS CALLED FOR. 68. THE LD. DR RELIED UPON THE ASSESSMENT ORDER. 69. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL THE RECORD. IT IS PERTINENT TO NOTE THAT THE ADDITION MADE FOR DEPOSI T OF CASH OF RS. 500/-, 1,000/- AND 1,000/- FOR OPENING THREE DIFFERENT BAN K ACCOUNTS. THE SAID CASH WAS DEPOSITED OUT OF CASH RECEIVED AS SHARE AP PLICATION MONEY AND CASH IN HAND AVAILABLE IN THE BOOKS OF ACCOUNT. THE SE BANK BALANCES HAVE BEEN DULY DISCLOSED IN THE BOOKS OF ACCOUNT AND AUD ITED FINANCIAL STATEMENTS BY THE ASSESSEE BEFORE THE ASSESSING OFF ICER. THUS, THE ADDITION MADE ON THIS ACCOUNT BY THE ASSESSING OFFICER IS NO T JUST AND PROPER. THEREFORE, GROUND NOS. 2, 8 AND 12 ARE ALLOWED. 70. AS REGARDS GROUND NO. 3 RELATING TO ADDITION OF RS. 1,00,000/- RECEIVED FROM PROFESSIONAL LEASING & CAPITAL SERVICES LTD., ANOTHER GROUP COMPANY AVERMENTS OF THE AO (PARA 3.1 PAGE 6 OF THE ASSTT. ORDER), THE LD. AR SUBMITTED THAT A N AMOUNT OF RS. 1,00,000/- WAS RECEIVED THROUGH CHEQUE FROM M/S PROFESSIONAL LEASING & CAPITAL SERV ICES LTD. AND DEPOSITED INTO BANK ACCOUNT OF THE ASSESSEE. ADDITION WAS MAD E BY THE AO SINCE THE CONFIRMATION FROM THE SAID PARTY WAS NOT FILED. THE LD. AR FURTHER SUBMITS THAT BANK ACCOUNT OF THE ASSESSEE WHERE THE SAID AM OUNT HAS BEEN RECEIVED, BANK ACCOUNT OF THE SAID COMPANY FROM WHE RE THE PAYMENT HAS BEEN MADE, COPY OF LEDGER ACCOUNT OF THE ASSESSEE I N THE BOOKS OF THE SAID COMPANY SHOWING PAYMENT OF RS. 1 LAC VIDE CHEQUE NO . 1892227, A CONFIRMATION FROM THE SAID PARTY WERE PRODUCED BEFO RE THE ASSESSING OFFICER. A LETTER DATED 12/09/97 FILED DURING THE ORIGINAL A SSESSMENT PROCEEDINGS 35 IT(SS)A NO. 6 & ORS/DEL/2012 EXPLAINING THAT THE SAID AMOUNT WAS RECEIVED FROM T HE SAID COMPANY. ALL THESE LEDGER ACCOUNTS PROVE BEYOND DOUBT THAT THE A SSESSEE RECEIVED A CHEQUE OF RS. 1,00,000/- FROM M/S PROFESSIONAL LEAS ING AND BOTH THE PARTIES HAVE RECORDED THIS TRANSACTION IN THEIR BOO KS OF ACCOUNT. SINCE THE AMOUNT HAS BEEN RECEIVED FROM ANOTHER COMPANY OF TH E GROUP, WHO IS AN INDEPENDENT ASSESSEE, THE SOURCE STANDS EXPLAINED A ND NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE COMPANY AT ALL. 71. THE LD. DR RELIED UPON THE ASSESSMENT ORDER. 72. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS. THE EVIDENCES WERE PRODUCED BEFORE THE ASSESSING OFFICE R BY THE ASSESSEE. IT IS PERTINENT TO NOTE THAT BANK ACCOUNT OF THE ASSESSEE WHERE THE SAID AMOUNT HAS BEEN RECEIVED, BANK ACCOUNT OF THE SAID COMPANY FROM WHERE THE PAYMENT HAS BEEN MADE, COPY OF LEDGER ACCOUNT OF TH E ASSESSEE IN THE BOOKS OF THE SAID COMPANY SHOWING PAYMENT OF RS. 1 LAC VIDE CHEQUE NO. 1892227, A CONFIRMATION FROM THE SAID PARTY WERE PR ODUCED BEFORE THE ASSESSING OFFICER. A LETTER DATED 12/09/97 FILED DU RING THE ORIGINAL ASSESSMENT PROCEEDINGS EXPLAINING THAT THE SAID AMO UNT WAS RECEIVED FROM THE SAID COMPANY. ALL THESE LEDGER ACCOUNTS PROVE T HAT THE ASSESSEE RECEIVED A CHEQUE OF RS. 1,00,000/- FROM M/S PROFESSIONAL LE ASING AND BOTH THE PARTIES HAVE RECORDED THIS TRANSACTION IN THEIR BOO KS OF ACCOUNT. SINCE THE AMOUNT HAS BEEN RECEIVED FROM ANOTHER COMPANY OF TH E GROUP, WHO IS AN INDEPENDENT ASSESSEE, THE SOURCE STANDS EXPLAINED A ND THUS, THE LD. ARS CONTENTION THAT NO ADDITION CAN BE MADE IN THE HAND S OF THE ASSESSEE COMPANY AT ALL IS RIGHT. THE ASSESSING OFFICER IGNO RED THIS IN ENTIRETY. GROUND NO. 3 IS ALLOWED. 73. AS REGARDS GROUND NO. 4 RELATING TO ADDITION OF RS. 1,90,000/- RECEIVED FROM MR. ANIL SANGHI (INCORRECTLY MENTIONED AS PROFESSIONAL LEASING IN THE ASSESSMENT ORDER) WHICH ARE THE AVERMENTS OF THE AO (PARA 3.2.2 PAGE 6 OF THE ASSTT. ORDER), THE LD. AR SUBMITTED T HAT AN AMOUNT OF RS. 1,90,000/- WAS RECEIVED THROUGH CHEQUE FROM M/S ANI L SANGHI & ASSOCIATES PROP. ANIL SANGHI AND DEPOSITED INTO BANK ACCOUNT O F THE ASSESSEE. ADDITION 36 IT(SS)A NO. 6 & ORS/DEL/2012 WAS MADE BY THE AO SINCE THE CONFIRMATION FROM THE SAID PARTY WAS NOT FILED. THE LD. AR SUBMITTED THAT THE ASSESSEE SUBMI TTED BANK ACCOUNT OF THE ASSESSEE WHERE THE SAID AMOUNT HAS BEEN RECEIVED, B ANK ACCOUNT OF MR. ANIL SANGHI FROM WHERE THE PAYMENT HAS BEEN MADE, A CONFIRMATION FROM THE SAID PARTY CONFIRMING THE PAYMENT OF THE SAID A MOUNT TO THE ASSESSEE. COPY OF LEDGER ACCOUNT OF THE BANK IN THE BOOKS M/S ANIL SANGHI & ASSOCIATES SHOWING PAYMENT OF RS. 1,90,000/- TO THE ASSESSEE, A COPY OF LEDGER ACCOUNT OF THE ASSESSEE IN THE BOOKS M/S ANI L SANGHI & ASSOCIATES SHOWING PAYMENT OF RS. 1,90,000/-, ALL THESE DOCUME NTS WERE PRODUCED BEFORE THE ASSESSING OFFICER. THE SAID PAYMENT WAS MADE BY MR. ANIL SANGHI OUT OF THE PROFESSIONAL FEES OF RS. 1,80,000/- RECE IVED IN HIS BANK AND AVAILABLE BANK BALANCE, COPY OF HIS ASSESSMENT ORDE RS SHOWS THAT THE SAID AMOUNT WAS DULY TAXED IN HIS HANDS. SINCE THE SAID AMOUNT HAS BEEN RECEIVED FROM MR. ANIL SANGHI, WHO WAS ALSO BEING A SSESSED BY THE SAME ASSESSING OFFICER WHO HAD ACCESS TO THEIR BOOKS OF ACCOUNT, BANK ACCOUNTS ETC. AND COULD HAVE EXAMINED THE ISSUE WHICH HAS NO T BEEN DONE. THUS, THE LD. AR SUBMITTED THAT ONCE IT IS ESTABLISHED THAT T HE ASSESSEE COMPANY HAS RECEIVED THE MONEY FROM MR. ANIL SANGHI, WHO IS AN INDEPENDENT ASSESSEE AND WHOSE ENTIRE UNDISCLOSED INCOME HAS BEEN ASSESS ED, THEN THE SOURCE STANDS EXPLAINED AND NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE COMPANY AT ALL. 74. THE LD. DR RELIED UPON THE ASSESSMENT ORDER. 75. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL THE RECORDS. IT IS PERTINENT TO NOTE THAT AN AMOUNT OF RS. 1,90,000/- WAS RECEIVED THROUGH CHEQUE FROM M/S ANIL SANGHI & ASSOCIATES PROP. ANIL SANGHI AND DEPOSITED INTO BANK ACCOUNT OF THE ASSESSEE. THE ADDITION WAS MADE BY THE AO SINCE THE CONFIRMATION FROM THE SAID PARTY WAS NOT FILED. THE ASSESSEE SUBMITTED BEFORE THE ASSESSING OFFICER HIS BANK ACCOUNT DETAI LS WHERE THE SAID AMOUNT WAS RECEIVED, BANK ACCOUNT OF MR. ANIL SANGHI FROM WHERE THE PAYMENT HAS BEEN MADE, A CONFIRMATION FROM THE SAID PARTY CONFI RMING THE PAYMENT OF THE SAID AMOUNT TO THE ASSESSEE ALONG WITH COPY OF LEDGER ACCOUNT OF THE BANK IN THE BOOKS M/S ANIL SANGHI & ASSOCIATES SHOW ING PAYMENT OF RS. 37 IT(SS)A NO. 6 & ORS/DEL/2012 1,90,000/- TO THE ASSESSEE, A COPY OF LEDGER ACCOUN T OF THE ASSESSEE IN THE BOOKS M/S ANIL SANGHI & ASSOCIATES SHOWING PAYMENT OF RS. 1,90,000/-. THE SAID PAYMENT WAS MADE BY MR. ANIL SANGHI OUT OF THE PROFESSIONAL FEES OF RS. 1,80,000/- RECEIVED IN HIS BANK AND AVAILABL E BANK BALANCE, COPY OF HIS ASSESSMENT ORDERS SHOWS THAT THE SAID AMOUNT WA S DULY TAXED IN HIS HANDS. SINCE THE SAID AMOUNT HAS BEEN RECEIVED FROM MR. ANIL SANGHI, WHO WAS ALSO BEING ASSESSED BY THE SAME ASSESSING OFFIC ER WHO HAD ACCESS TO THEIR BOOKS OF ACCOUNT, BANK ACCOUNTS ETC. AND COUL D HAVE EXAMINED THE ISSUE WHICH HAS NOT BEEN DONE. THUS, IT IS ESTABLIS HED THAT THE ASSESSEE COMPANY HAS RECEIVED THE MONEY FROM MR. ANIL SANGHI , WHO IS AN INDEPENDENT ASSESSEE WHOSE ENTIRE UNDISCLOSED INCOM E HAS BEEN ASSESSED, THUS THE SOURCE STANDS EXPLAINED AND THERE CANNOT B E ANY ADDITION IN THE HANDS OF THE ASSESSEE COMPANY. FROM THE BANK DETAIL S AND THE BALANCE SHEET OF THE SAID COMPANY IT WAS CLEAR AT THE THRES HOLD THAT THE ASSESSEE HAS GIVEN PROPER EXPLANATION WITH THE EVIDENCE. MERELY NOT PRODUCING CONFIRMATION CANNOT BE THE GROUND FOR MAKING ADDITI ON WHEN THE SAME ASSESSING OFFICER IS ALSO ASSESSING THE SAID COMPAN Y FOR THE SAID AMOUNT ITSELF DURING THE SAME PERIOD. THEREFORE, THE ASSES SING OFFICER IS NOT JUSTIFIED IN MAKING AN ADDITION AND GROUND NO. 4 IS ALLOWED. 76. AS RELATES TO GROUND NO. 5 REGARDING ADDITION O F RS. 2,50,000/- BEING AMOUNT RECEIVED FROM SOME PARTIES ON BEHALF OF MR. ANIL SANGHI, THE LD. AR SUBMITTED THAT AN AMOUNT OF RS. 2,50,000/- WAS TRAN SFERRED FROM FIVE BANK ACCOUNTS NUMBER 3323 TO 3327 WHICH IN TURN WERE TRA NSFERRED FROM MR. ANIL SANGHI. THE ASSESSING OFFICER MADE ADDITION SI NCE NO SUPPORTING DOCUMENT WAS FILED. THE LD. AR FURTHER SUBMITS THAT THE ASSESSEE PRODUCED BEFORE THE ASSESSING OFFICER A COPY OF LEDGER ACCOU NT OF OTHER PARTIES IN THE BOOKS OF M/S ANIL SANGHI AND ASSOCIATES WHO HAS ISS UED FIVE CHEQUES OF DIFFERENT AMOUNTS AGGREGATING TO 2,50,000/-. THE LD . AR SUBMITS THAT THIS AMOUNT RECEIVED BY THEM FROM MR. ANIL SANGHI HAS BE EN TRANSFERRED BY THEM TO THE ASSESSEE COMPANY FOR WHICH THE LD. AR R ELIED UPON THE COPY OF THE BANK STATEMENT OF M/S ANIL SANGHI & ASSOCIATES SHOWING PAYMENT OF THE SAID FIVE CHEQUES, COPIES OF THE FIVE BANK STAT EMENTS SHOWING RECEIPT OF 38 IT(SS)A NO. 6 & ORS/DEL/2012 MONEY FROM MR. ANIL SANGHI & ASSOCIATES AND ASSESSM ENT ORDER OF MR. ANIL SANGHI, ALL OF THESE DOCUMENTS WERE SUBMITTED BEFOR E THE ASSESSING OFFICER. THUS, THE LD. AR SUBMITS THAT ONCE IT IS ESTABLISHE D THAT THE THOSE FIVE PERSONS RECEIVED THE MONEY FROM MR. ANIL SANGHI (WH O IS AN INDEPENDENT ASSESSEE AND WHOSE ENTIRE UNDISCLOSED INCOME HAS BE EN ASSESSED) AND THEN PAID THE SAME TO THE ASSESSEE COMPANY, THE SOURCE S TANDS EXPLAINED AND NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSE E COMPANY AT ALL. 77. THE LD. DR RELIED UPON THE ASSESSMENT ORDER. 78. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL THE RECORDS. IT IS PERTINENT TO NOTE THAT THE ASSESSEE PRODUCED BEFORE THE ASSESSING OFFICER A COPY OF LEDGER ACCOUNT OF OTHER PARTIES IN THE BOOK S OF M/S ANIL SANGHI AND ASSOCIATES WHO HAS ISSUED FIVE CHEQUES OF DIFFERENT AMOUNTS AGGREGATING TO 2,50,000/-. THIS AMOUNT RECEIVED BY THEM FROM MR. A NIL SANGHI HAS BEEN TRANSFERRED BY THEM TO THE ASSESSEE COMPANY FOR WHI CH THE LD. AR RELIED UPON THE COPY OF THE BANK STATEMENT OF M/S ANIL SAN GHI & ASSOCIATES SHOWING PAYMENT OF THE SAID FIVE CHEQUES, COPIES OF THE FIVE BANK STATEMENTS SHOWING RECEIPT OF MONEY FROM MR. ANIL S ANGHI & ASSOCIATES AND ASSESSMENT ORDER OF MR. ANIL SANGHI, ALL OF THE SE DOCUMENTS WERE SUBMITTED BEFORE THE ASSESSING OFFICER. THUS, IT IS ESTABLISHED THAT THE THOSE FIVE PERSONS RECEIVED THE MONEY FROM MR. ANIL SANGHI (WHO IS AN INDEPENDENT ASSESSEE AND WHOSE ENTIRE UNDISCLOSED I NCOME HAS BEEN ASSESSED) AND THEN PAID THE SAME TO THE ASSESSEE CO MPANY, THUS SOURCE WAS EXPLAINED BY THE ASSESSEE. THEREFORE, THE ADDIT ION WAS NOT CORRECTLY MADE BY THE ASSESSING OFFICER IN THE HANDS OF THE A SSESSEE COMPANY AT ALL. GROUND NO. 5 IS ALLOWED. 79. AS REGARDS TO GROUND NO. 6, 7, 10 AND 11, RELAT ING TO ADDITION OF RS. 1,97,004/- FOR THE AY 1996-97 AND RS. 6,87,728/- FO R THE AY 1997-98, THE LD. AR SUBMITTED THAT THE ASSESSING OFFICER MADE TH E ADDITION OBSERVING THAT NO SUPPORTING DOCUMENTS WERE FURNISHED. THE LD . AR FURTHER SUBMITTED THAT IDENTICAL ISSUE HAS BEEN DECIDED BY THE ITAT IN THE CASE OF HARMONY PSYCHITARY CENTRE P LTD., A GROUP COMPANY, IN APPEAL NO. IT 39 IT(SS)A NO. 6 & ORS/DEL/2012 (SS) /03/DEL/2012 PASSED ON 07/10/16, WHEREIN THE A DDITION OF INTEREST HAS BEEN DELETED FROM THE BLOCK ASSESSMENT SINCE TH E SAME WAS DECLARED BY THE ASSESSEE IN ITS REGULAR RETURNS OF INCOME AND A CCEPTED BY THE AO IN THE REGULAR ASSESSMENT U/S 143(3) OF THE ACT. THE LD. A R ALSO R ELIED ON THE DECISION OF SHILPI SECURITIES (P) LTD. IN ITA NO. 02/DEL/2012 D ATED 29/01/16. THUS, THE LD. AR SUBMITTED THAT THE ADDIT ION OF RS. 1,97,004/- FOR THE AY 1996-97 AND RS. 6,87,728/- FOR THE AY 19 97-98 SHOULD BE DELETED. THE LD. AR FURTHER SUBMITTED THAT SECTION 158BB PROVIDES FOR COMPUTATION OF UNDISCLOSED INCOME FOR THE BLOCK PER IOD. THE INCOMES COMPUTED ON THE BASIS OF SECTION 158BB(L)(A) TO (F) HAS TO BE EXCLUDED WHILE COMPUTING THE UNDISCLOSED INCOME. SECTION 158BB(L)( D) PROVIDES THAT IN A CASE WHERE THE PREVIOUS YEAR HAS NOT ENDED OR THE D ATE OF FILING OF RETURN OF INCOME UNDER 139(1) HAS NOT EXPIRED, THEN INCOME DE TERMINED ON THE BASIS OF ENTRIES RELATING TO SUCH INCOME OR TRANSACTIONS AS RECORDED IN THE BOOKS OF ACCOUNT AND OTHER DOCUMENTS MAINTAINED IN THE NO RMAL COURSE ON OR BEFORE THE DATE OF SEARCH SHALL BE EXCLUDED FROM TH E UNDISCLOSED INCOME. SEARCH WAS UNDERTAKEN ON THE ASSESSEE ON 27/06/1996 . THE LD. AR SUBMITTED THAT RETURN OF INCOME FOR THE AYS 1996-97 AND 1997-98 WERE DUE TO BE FILED ON 30/11/96 AND 30/11/97 RESPECTIVELY. THUS BOTH THESE RETURNS WERE NOT DUE FOR FILING AS ON THE DATE OF S EARCH. THESE INCOMES WERE DULY RECORDED IN THE BOOKS OF ACCOUNT OF THE ASSESS EE AND HAVE BEEN DECLARED IN THE AUDITED BALANCE SHEETS AS WELL AS R ETURNS OF INCOME BY THE AND HAVE BEEN ACCEPTED IN THE REGULAR ASSESSMENTS B Y THE ASSESSING OFFICER AS EXPLAINED BELOW. THUS, THE LD. AR SUBMITTED THAT NO ADDITION CAN BE MADE FOLLOWING THE ABOVE JUDGMENTS. AS RELATES TO A DDITION OF RS. 1,97,004/- FOR THE AY 1996-97, THE LD. AR SUBMITTED THAT THE ASSESSING OFFICER HAS MADE ADDITION ON THE BASIS OF AMOUNTS R ECEIVED IN THE BANK ACCOUNT. THE LD. AR SUBMITTED THAT THE ASSESSEE SUB MITTED BEFORE THE ASSESSING OFFICER A COPY OF ACKNOWLEDGEMENT FOR FIL ING RETURN OF INCOME FOR THE AY 1996-97 ON 29/11/96 SHOWING THAT THE RETURN OF INCOME HAS BEEN FILED WITHIN DUE DATE ALONG WITH AUDITED BALANCE SH EET AND PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31/3/96 WHEREIN THE AMOU NTS OF RS. 1,97,004/- HAS BEEN DECLARED AS INCOME. COPY OF LEDGER ACCOUNT OF INTEREST RECEIVED IN 40 IT(SS)A NO. 6 & ORS/DEL/2012 THE BOOKS OF THE ASSESSEE SHOWING THAT THE AMOUNT O F RS. 1,67,246/- IS INCLUDED IN THE AMOUNT OF RS. 3,76,075/-. MISC INCO ME OF RS. 4,758/- AND PROFESSIONAL FEES OF RS. 25,000/- ARE DECLARED TOGE THER IN THE PROFIT AND LOSS ACCOUNT AND ARE PART OF MISC. INCOME OF RS. 29,758/ -. THE ASSESSEE ALSO SUBMITTED BEFORE THE ASSESSING OFFICER BANK ACCOUNT IN THE BOOKS OF THE ASSESSEE SHOWING THE RECEIPT OF THE FOUR AMOUNTS, C OPY OF TDS CERTIFICATE SHOWING THEREIN THE INTEREST OF RS. 2,17,200/- WHIC H WAS EARNED ON WHICH TDS OF RS. 49,957/- HAS BEEN DEDUCTED AND BALANCE A MOUNT OF RS. 1,67,243/- WAS RECEIVED IN BANK ACCOUNT FOR WHICH A DDITION HAS BEEN MADE. THEREFORE, THE LD. AR SUBMITTED THAT SINCE TA X HAS BEEN DEDUCTED AT SOURCE ON THIS INCOME, IT CANNOT BE CONSIDERED AS U NDISCLOSED INCOME IN ANY MANNER. THE LD. AR RELIED UPON THE FOLLOWING CASES WHEREIN IT HAS BEEN HELD THAT THE INCOMES WHICH ARE SUBJECT TO TDS CANNOT BE TAXED UN DER THE BLOCK ASSESSMENT PERIOD: 1. CIT & ANR. VS. H.E. MYNUDDIN PASHA (2011) 338 ITR 5 33 (KAR) 2. DCIT VS. DAMODARDAS JERAMBHAI WADHWA (2005) 2 SOT 9 8 (KOL) 3. P.R. PATEL VS. DCIT (2001) 73 TTJ (MUMBAI) 262 : ( 2001) 78 ITD 51 (MUMBAI) 4. DR. (MRS.) SURJIT TOSARIA VS. JCIT (2005) 92 TTJ (D EL) 338 THE LD. AR FURTHER SUBMITTED THAT COPY OF LETTER DA TED 22/9/97 FILED BEFORE THE ASSESSING OFFICER ALONG WITH BOOKS OF ACCOUNT F OR THE BLOCK PERIOD HAVE BEEN SUBMITTED TO THE ASSESSING OFFICER DURING THE ORIGINAL ASSESSMENT PROCEEDINGS ON 10/09/97 WHEREIN THIS INCOME WAS DUL Y RECORDED. THE ASSESSEE ALSO SUBMITTED THAT COPY OF THE ASSESSMENT ORDER PASSED U/S 143(3) FOR THE AY 1996-97 IN CASE OF THE ASSESSEE W HERE THE RETURNED INCOME HAS BEEN ACCEPTED BY THE AO. THE ASSESSING O FFICER MADE THE ADDITION OF RS. 6,87,728/- FOR THE AY 1997-98 ON THE BASIS OF AMOUNTS RECEIVED IN THE BANK ACCOUNT. THE LD. AR SUBMITTED THAT BANK ACCOUNT IN TOTAL INCOME (RS.) TDS RECEIVED IN BANK TDS CERT, ON PAGE NO. 2,17,200/ - 49,957/ - 1,67,243/ - 87 41 IT(SS)A NO. 6 & ORS/DEL/2012 THE BOOKS OF THE ASSESSEE SHOWING THE RECEIPT OF TH E 7 AMOUNTS FOR WHICH ADDITION HAS BEEN MADE WERE PRODUCED BEFORE THE ASS ESSING OFFICER, ALONG WITH COPY OF THE ACKNOWLEDGEMENT FOR FILING RETURN OF INCOME FOR THE AY 1997-98 ON 12/11/97 SHOWING THAT THE RETURN OF INCO ME HAS BEEN FILED WITHIN DUE DATE AND AUDITED BALANCE SHEET AND PROFI T AND LOSS ACCOUNT FOR THE YEAR ENDED 31/3/97 WHERE THE AMOUNT OF RS. 6,87 ,728/- HAS BEEN DECLARED AS INCOME. THE TWO FIGURES OF RS. 61,515/- AND 60,816/- RECEIVED IN THE BANK ACCOUNT DURING THE AY 97-98 WERE PART O F INTEREST RECEIVABLE FOR WHICH INCOME HAS BEEN RECORDED IN THE PRECEDING YEA R THE AY 1996-97. FOR DEMONSTRATING THE SAME COPY OF LEDGER ACCOUNT OF IN TEREST RECEIVABLE IN THE BOOKS OF THE ASSESSEE FOR THE YEAR ENDED 31/3/97 WE RE PRODUCED BEFORE THE ASSESSING OFFICER. THE LD. AR SUBMITTED THAT THIS F ACT CAN BE TALLIED FROM THE BOOKS OF ACCOUNT OF THE PRECEDING YEAR AND TDS CERTIFICATES. THE LD. AR SUBMITTED THAT A COPY OF LEDGER ACCOUNT OF PROFESSIONAL FEES FOR THE YEAR ENDED 31/3/97 WHEREIN ALL THE OTHER AMOUNT S FOR WHICH ADDITION HAVE BEEN MADE HAVE BEEN DECLARED AS INCOME BY THE ASSESSEE. IN CASE OF THE FOLLOWING THREE AMOUNTS, TAX HAS BEEN DEDUCTED AT SOURCE AND HAS ALSO BEEN CLAIMED IN THE RETURN OF INCOME FILED BY THE A SSESSEE. NO ADDITION CAN BE MADE FOR THE AMOUNTS ON WHICH TDS HAS BEEN MADE AS HAS BEEN HELD IN THE AUTHORITIES. THE LD. AR FURTHER SUBMITTED THAT COPY OF INTIMATIO N U/S 143(1) FOR THE AY 1997-98 WHEREIN RETURNED INCOME HAS BEEN ACCEPTED B Y THE DEPARTMENT TOTAL INCOME (RS.) TDS RECEIVED IN BANK TDS CERT, ON PAGE NO. 79,890/ - 18,375/ - 61,515/ - 85 78,982/- 18,166/- 60,816/- 86 TOTAL INCOME (RS.) TDS RECEIVED IN BANK TDS CERT, ON PAGE NO. 4,43,835/ - 25,521/ - 4,18,314/ - 108 66,575/ - 3,828/ - 62,747/ - 109 81,370/ - 4,679/ - 76,691/ - 110 42 IT(SS)A NO. 6 & ORS/DEL/2012 AND THE ASSESSMENT ORDER U/S 143(3) FOR THE AY 1997 -98 WHEREIN RETURNED INCOME HAS BEEN ACCEPTED. IN VIEW OF THE ABOVE FACT S, THE LD. AR SUBMITTED THAT THE SAID INCOME WAS DULY RECORDED IN BOOKS OF ACCOUNT, DULY DECLARED IN RETURN OF INCOME, WAS SUBJECT TO TDS AND THE RET URNED INCOME HAS BEEN ACCEPTED BY THE ASSESSING OFFICER IN REGULAR ASSESS MENT PROCEEDINGS, THE ADDITION OF RS. 1,97,004/- AND RS. 6,87,728/- CANNO T BE MADE AND THE SAME SHOULD BE DELETED. AS REGARDS TO GROUNDS NO. 7 AND 11, THE LD. AR SUBMITTED THAT WITHOUT PREJUDICE TO GROUND NO. 6 AN D 10, THE ASSESSEE HAS DECLARED THE IMPUGNED INCOMES IN ITS REGULAR RETURN S OF INCOME FILED FOR AY 1996-97 AND 1997-98 WHICH HAS BEEN ACCEPTED AS SUCH BY THE ASSESSING OFFICER IN REGULAR ASSESSMENT FRAMED U/S 143(3). IF THE IMPUGNED INTEREST INCOME IS ASSESSED AS UNDISCLOSED INCOME U/S 158BC THEN THE SAME SHOULD BE EXCLUDED FROM THE INCOME ASSESSED IN REGULAR ASS ESSMENTS FRAMED FOR THE AYS 1996-97 AND 1997-98 AS THE SAME INCOME CANN OT BE TAXED TWICE. THUS NECESSARY DIRECTIONS SHOULD BE GIVEN. 80. THE LD. DR RELIED UPON THE ASSESSMENT ORDER. 81. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL THE RECORDS. IT IS PERTINENT TO NOTE THAT IDENTICAL ISSUE IS DECIDED B Y THE ITAT IN THE FOLLOWING GROUP COMPANIES: I) SHILPI SECURITIES (P) LTD. ITA NO.2/DEL/2012 ORD ER DATED 29.01.2016 II) HARMONY PSYCHIATRY CENTRE PVT. LTD. IT(SS)A NO. 3/DEL/2012 ORDER DATED 07.10.2016 THUS, THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESS EE. GROUND NO. 6, 7, 10 AND 11 ARE ALLOWED. 82. AS REGARDS TO GROUND NO. 9, RELATING TO ADDITIO N OF RS. 3,00.000/- RECEIVED FROM DEVYANI SECURITIES (P) LTD., THE LD. AR SUBMITTED THAT THE ASSESSEE FURNISHED BANK ACCOUNT OF THE ASSESSEE WHE RE THE SAID AMOUNT HAS BEEN RECEIVED ALONG WITH COPY OF LEDGER ACCOUNT OF THE ASSESSEE IN THE BOOKS OF THE SAID COMPANY SHOWING PAYMENT OF RS. 3, 00,000/- VIDE CHEQUE 43 IT(SS)A NO. 6 & ORS/DEL/2012 NO. 24234, COPY OF LEDGER ACCOUNT OF THE SAID COMPA NY IN THE BOOKS OF THE ASSESSEE SHOWING RECEIPT OF RS. 3,00,000/- FROM THE SAID COMPANY AND COPY OF BANK STATEMENT OF THE SAID COMPANY SHOWING PAYME NT OF THE SAID AMOUNT. THE LD. AR SUBMITTED THAT A COPY OF CONFIRM ATION FROM THE SAID PARTY IS ALSO AVAILABLE AT THIS JUNCTURE. THUS, THE LD. AR SUBMITTED THAT ALL THESE LEDGER ACCOUNTS PROVE BEYOND DOUBT THAT THE A SSESSEE RECEIVED A CHEQUE OF RS. 3,00,000/- FROM M/S DEVYANI SECURITIE S AND BOTH THE PARTIES HAVE RECORDED THIS TRANSACTION IN THEIR BOOKS OF AC COUNT. SINCE THE AMOUNT HAS BEEN RECEIVED FROM ANOTHER COMPANY OF THE GROUP , WHO IS AN INDEPENDENT ASSESSEE, THE SOURCE STANDS EXPLAINED A ND NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE COMPANY AT ALL. 83. THE LD. DR RELIED UPON THE ASSESSMENT ORDER. 84. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL THE RECORDS. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL THE RECORDS. IT IS PERTINENT TO NOTE THAT THE ASSESSEE PRODUCED BEFORE THE ASSESSING OFF ICER A COPY OF BANK ACCOUNT OF THE ASSESSEE WHERE THE SAID AMOUNT HAS B EEN RECEIVED ALONG WITH COPY OF LEDGER ACCOUNT OF THE ASSESSEE IN THE BOOKS OF THE SAID COMPANY SHOWING PAYMENT OF RS. 3,00,000/- VIDE CHEQUE NO. 2 4234, COPY OF LEDGER ACCOUNT OF THE SAID COMPANY IN THE BOOKS OF THE ASS ESSEE SHOWING RECEIPT OF RS. 3,00,000/- FROM THE SAID COMPANY AND COPY OF BA NK STATEMENT OF THE SAID COMPANY SHOWING PAYMENT OF THE SAID AMOUNT. FR OM THE BANK DETAILS AND THE BALANCE SHEET OF THE SAID COMPANY IT WAS CL EAR AT THE THRESHOLD THAT THE ASSESSEE HAS GIVEN PROPER EXPLANATION WITH THE EVIDENCE. MERELY NOT PRODUCING CONFIRMATION CANNOT BE THE GROUND FOR MAK ING ADDITION WHEN THE SAME ASSESSING OFFICER IS ALSO ASSESSING THE SAID C OMPANY FOR THE SAID AMOUNT ITSELF DURING THE SAME PERIOD. THEREFORE, TH E ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING AN ADDITION AND GROUND NO. 9 IS ALLOWED. 85. AS REGARDS TO GROUND NO. 13, 14 AND 15, RELATIN G TO ADDITION OF RS. 4,10,959/- BEING INTEREST RECEIVED FROM SURVA ROSHN I LTD., THE LD. AR SUBMITS THAT THE AVERMENT OF THE ASSESSING OFFICER THAT THE BOOKS WERE NOT FOUND OR SEIZED DURING SEARCH IS BASELESS AS THE SE ARCH WAS UNDERTAKEN ON 44 IT(SS)A NO. 6 & ORS/DEL/2012 THE BANK ACCOUNT OF THE ASSESSEE AS MENTIONED IN PA RA 1 OF THE ASSESSMENT ORDER. THE LD. AR SUBMITTED THAT THE BOOKS OF ACCOU NT ARE MAINTAINED ON THE REGISTERED OFFICE OF THE COMPANY OR ITS BRANCHE S AND NOT AT THE BANK PREMISES. THE RETURNS FOR BOTH THE AYS 1996-97 AND 1997-98 HAVE BEEN FILED BEFORE DUE DATE FOR FILING THE RETURNS OF INC OME. BOOKS OF ACCOUNT WERE PRODUCED BEFORE THE ASSESSING OFFICER ON 10/09/97 A S MENTIONED IN THE LETTER DATED 22/9/97 (DULY STAMPED) FILED BEFORE TH E ASSESSING OFFICER IN THE ORIGINAL ASSESSMENT PROCEEDINGS ALONG WITH COPY OF PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31/3/97 WHEREIN THE INTEREST INC OME OF RS. 4,10,959/- RECEIVED FROM SURYA ROSHNI HAS BEEN DULY DECLARED, COPY OF THE TDS CERTIFICATE WHICH SHOWS THAT TDS OF RS. 94,521/- HA S BEEN DEDUCTED ON THE SAID AMOUNT. THE LD. AR ALSO SUBMITTED THAT THE ASS ESSING OFFICER ALSO ACCEPTED THE FACT THAT TDS HAS BEEN DEDUCTED ON THE SAID INCOME IN PARA 4.5 OF THE ASSESSMENT ORDER AND INCREASED THE ADDIT ION. THUS, NO ADDITION CAN BE MADE FOR THE AMOUNT ON WHICH TDS HAS BEEN MA DE RELYING UPON THE AUTHORITIES, COPIES OF THE ASSESSMENT ORDERS U/S 14 3(1) AND 143(3) WHEREIN RETURNED INCOME HAS BEEN ACCEPTED. SINCE TAX HAS BE EN DEDUCTED AT SOURCE ON THE SAID INCOME WHICH DULY RECORDED IN BOOKS OF ACCOUNT AND THE RETURNS FOR THE AY 1997-98 HAVE NOT FALLEN DUE AT THE TIME OF SEARCH, THE INTEREST INCOME CANNOT BE CONSIDERED AS UNDISCLOSED INCOME I N VIEW OF THE PROVISIONS OF SECTION 158BB(1). THE LD. AR RELIED U PON THE DECISION IN THE CASE OF HARMONY PSYCHIATRY (P) AND SHILPI SECURITIES (P) LTD. AS RELATES TO GROUND NO. 14, THE LD. AR SUBMITS THAT WITHOUT PREJUDICE TO GROUND NO. 13, THE ASSESSING OFFICER DID NOT ALLOW CREDIT OF TDS OF RS. 94,521/- DEDUCTED ON THE INTEREST INCOME OF RS. 4,10,959/- A DDED TO THE INCOME OF THE ASSESSEE. PRESUMING WITHOUT ADMITTING, IF THE A DDITION OF INTEREST OF RS. 4,10,959/- IS SUSTAINED IN THE BLOCK ASSESSMENT PER IOD, THEN CLAIM FOR THE TDS SHOULD ALSO BE ALLOWED. NECESSARY DIRECTIONS IN THIS REGARD SHOULD BE ISSUED. AS RELATES TO GROUND NO. 15, THE LD. AR SUBMITS THAT WITHOUT PREJUDICE TO GROUND NO. 13, THE ASSESSEE HAS DECLAR ED THE IMPUGNED INCOMES IN ITS REGULAR RETURN OF INCOME FILED FOR T HE ASSESSMENT YEAR 1997-98 WHICH HAS BEEN ACCEPTED AS SUCH BY THE ASSE SSING OFFICER IN REGULAR ASSESSMENT FRAMED U/S 143(3). THE LD. AR FU RTHER SUBMITS THAT 45 IT(SS)A NO. 6 & ORS/DEL/2012 I F THE IMPUGNED INTEREST INCOME IS ASSESSED AS UNDIS CLOSED INCOME U/S 158BC THEN THE SAME SHOULD BE EXCLUDED FROM THE INC OME ASSESSED IN REGULAR ASSESSMENT FRAMED FOR THE AY 1997-98 AS THE SAME INCOME CANNOT BE TAXED TWICE. THUS THE LD. AR SUBMITTED THAT NECESSARY DIRECTIONS SHOULD BE GIVEN. 86. THE LD. DR RELIED UPON THE ASSESSMENT ORDER. 87. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL THE RECORDS. IT IS PERTINENT TO NOTE THAT IDENTICAL ISSUE IS DECIDED B Y THE ITAT IN THE FOLLOWING GROUP COMPANIES: I) SHILPI SECURITIES (P) LTD. ITA NO.2/DEL/2012 ORD ER DATED 29.01.2016 II) HARMONY PSYCHIATRY CENTRE PVT. LTD. IT(SS)A NO. 3/DEL/2012 ORDER DATED 07.10.2016 THUS, THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESS EE. GROUND NO. 13, 14 AND 15 ARE ALLOWED. 88. AS RELATES TO GROUND NOS. 16 TO 19 AND ADDITION AL GROUND NO. 21, THE LD. AR SUBMITTED THAT THE SHARE CAPITAL AS PER FORM 2 FILED BY THE ASSESSEE SHOWS ISSUED CAPITAL AT RS. 34,70,000/- WHEREAS THE BALANCE SHEET SHOWS THE CAPITAL AT RS. 14,70,000/-. AS PER THE PROVISIO NS OF SECTION 132(4), BOOKS OF ACCOUNT FOUND DURING THE COURSE OF SEARCH ARE PRESUMED TO BE TRUE. THE NUMBER OF SHARES AND PAID UP SHARE CAPITA L HAS BEEN MENTIONED AT FOUR PLACES AND SAME MISTAKE CANNOT BE COMMITTED WHILE WRITING A GIVEN NUMBER. IT IS SIGNED BY ONE OF THE DIRECTORS WHO AD MITTED TO HAVE ALLOTTED 3,46,500/- SHARES TO PROFESSIONAL LEASING. MR. ANIL SANGHI, ANOTHER DIRECTOR COULD NOT EXPLAIN WHY THIS MISTAKE WAS NOT RECTIFIE D. FURTHER ASSESSEE HAS SHOWN PURCHASE OF SHARES WORTH RS. 14,65,000/- DURI NG THE FY 1994-95. THE ADDITION OF RS. 34,65,000/- WAS MADE FOR THE DI FFERENCE IN SHARE CAPITAL (RS. 20 LACS ) AND VALUE OF SHARES PURCHASED (RS. 1 4.65 LACS). COPY OF FORM 2 WHICH WAS SEIZED AS PAGE 51 OF ANNEXURE A- 8 FROM THE RESIDENCE OF MR. ANIL SANGHI ON 01/11/96 WHEREIN THE NUMBER OF SHARES ALL OTTED WAS MENTIONED 46 IT(SS)A NO. 6 & ORS/DEL/2012 AS 3,46,800/-. THE LD. AR SUBMITTED THAT AUDITED BA LANCE SHEET OF THE ASSESSEE AS ON 31/3/95 SHOWS THE SHARE CAPITAL OF R S. 14,70,000/-. THE LD. AR SUBMITS THAT A COPY OF LETTER DATED 22/9/97 BY T HE ASSESSEE TO THE AO STATING THAT THERE WAS THE AMOUNT OF CAPITAL WAS ME NTIONED AS 34,68,000/- INSTEAD OF RS. 14,68,000/- AND THIS FACT CAN BE VER IFIED FROM PROFESSIONAL LEASING (AGAINST WHOSE NAME THESE SHARES WERE MENTI ONED). AUDITED BALANCE SHEET OF M/S PROFESSIONAL LEASING AND CAPIT AL SERVICES (P) LTD. FOR THE YEAR ENDED 31/3/95 WHICH SHOWS INVENTORIES OF R S. 48.99 LACS. DETAILS OF THE SAME SHOWS THAT THE SAID COMPANY HAS PURCHAS ED 1,46,600/- SHARES OF THE ASSESSEE COMPANY FOR RS. 14,66,000/-. LETTER DATED 22/9/97 FROM THE SAID COMPANY TO THE ASSESSING OFFICER STATING T HAT THE SHARES WERE ALLOTTED TO IT AGAINST SALE OF SHARES WORTH RS. 14, 65,000/- AND GIVING DETAILS OF THE SHARES SOLD BY IT. THE LD. AR SUBMITTED THAT THE ADDITIONAL GROUND NO. 21 RELATING TO ADDITION OF RS. 34,65,000/- ON T HE BASIS OF SEIZED MATERIAL FOUND FROM THE RESIDENCE OF MR. ANIL SANGHI ON 1-11-1996 AS PER AN NEXURE A-8 OBSERVATION OF THE ASSESSING OFFICER, THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE. THE LD. AR SUBMITTED THAT ADDITIONAL GROUND RAISED BY THE ASSESSEE IS PURELY LEGAL IN NATURE AND SHOULD BE AD MITTED IN VIEW OF THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF NTPC CO. LTD. VS CIT 229 ITR 383 (SC). IDENTICAL GROUND WAS RAISED IN THE CASE M/S HARMON Y PSYCHIATRY CENTRE (P) LTD. IN IT(SS) /03/D/2012, GR OUP COMPANY OF THE ASSESSEE, WHICH HAS BEEN ADMITTED BY THE ITAT. IDEN TICAL GROUND WAS RAISED IN THE CASE OF M/S UIKAM INVESTMENT & FINANCE (P) L TD. IN IT(SS)/10/D/13, GROUP COMPANY OF THE ASSESSEE, WHICH HAS BEEN ADMIT TED BY THE ITAT. THUS THE ADDITIONAL GROUND RAISED BY THE ASSESSEE SHOULD BE ADMITTED AND DECIDED. IN CASE OF ASSESSEE, THE SEARCH OPERATIONS WERE CARRIED OUT ON 27/06/1996 ONLY AT THE BANK ACCOUNTS OF THE ASSESSE E AND NOWHERE ELSE. ANNEXURE A-8 WAS FOUND DURING THE COURSE OF SEARCH AT THE RESIDENCE OF MR. ANIL SANGHI ON 01/11/1996 AND NOT FROM THE POSSESSI ON OF THE ASSESSEE COMPANY. THUS THIS ANNEXURE HAS BEEN SEIZED AFTER T HE SEARCH WAS CONCLUDED IN THE CASE OF THE ASSESSEE COMPANY AS TH E BLOCK PERIOD OF THE ASSESSEE COMPANY IS FROM 01/04/86 TO 27/06/96. INFO RMATION COLLECTED POST SEARCH CAN BE USED IN THE ASSESSMENT FOR THE B LOCK PERIOD IF AND ONLY IF 47 IT(SS)A NO. 6 & ORS/DEL/2012 THE ASSESSING OFFICER WAS OF THE OPINION THAT THE S AID SEIZED MATERIAL WAS RELATED TO THE ASSESSEE COMPANY AND HE HAS RECORDED HIS SATISFACTION U/S 158BD TO THIS EFFECT. HOWEVER, THIS HAS NOT BEEN DO NE IN THIS CASE. IT IS A SETTLED LAW NO ADDITION CAN BE MADE ON THE BASIS OF MATERIAL SEIZED FROM THE PREMISES OF SOME OTHER ASSESSEE AFTER CONCLUSION OF SEARCH IN CASE OF THE ASSESSEE COMPANY WITHOUT RECORDING SATISFACTION U/S 158BD. FURTHER THE SEIZED ANNEXURE DID NOT RELATE TO THE MATERIAL SEIZ ED DURING THE COURSE OF SEARCH IN THE CASE OF THE ASSESSEE AS NOTHING HAS B EEN MENTIONED ABOUT THE SAME IN THE ASSESSMENT ORDER. IDENTICAL ISSUE WAS D ECIDED BY THE HONBLE ITAT IN FAVOUR OF THE ASSESSEE IN THE CASE M/S HARM ONY PSYCHIATRY CENTRE (P) LTD. IN IT(SS) /03/D/2012. IDENTICAL ISSUE WAS DECIDED BY THE HONBLE ITAT IN FAVOUR OF THE ASSESSEE IN THE CASE M/S UIKA M INVESTMENT & FINANCE (P) LTD. IN IT(SS)/10/D/2013, THE LD. AR SUBMITTED THAT THE SAID DECISIONS ON IDENTICAL GROUND IN CASE OF GROUP COMPANIES, THE ADDITION MADE ON THE BASIS OF ANNEXURE A-8 SHOULD BE DELETED. 89. THE LD. DR OPPOSED TO ADMIT THE ADDITIONAL GROU ND AND RELIED UPON THE ASSESSMENT ORDER. 90. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL THE RELEVANT RECORDS. ALL THE DETAILS WERE GIVEN BEFORE THE ASSESSING OFF ICER. THE ASSESSEE HAS SHOWN THE PURCHASE OF SHARES WORTH RS. 14,65,000/- DURING THE F.Y. 1994- 95 FOR WHICH THE ASSESSEE HAS GIVEN DETAILS OF AUDI TED BALANCE SHEET OF M/S PROFESSIONAL LEASING AND CAPITAL SERVICES (P) LTD. FOR THE YEAR ENDED 31.03.1995 WHICH SHOWS INVENTORIES OF RS. 48.99 LAC S OF WHICH DETAILS SHOWS THE SAID COMPANY HAS PURCHASED 1,46,600/- SHA RES OF THE SSESSEE COMPANY FOR RS. 14,66,000/-. THUS, THE ASSESSING OF FICER WAS NOT CORRECT IN IGNORING THIS EVIDENCE AND MAKING THE SAID ADDITION S. THUS, ALL THE EXPLANATION ALONG WITH THE DOCUMENTS WAS PRODUCED B EFORE THE ASSESSING OFFICER, BUT THE ASSESSING OFFICER HAS NOT TAKEN CO GNIZANCE OF THE SAME. THEREFORE, IT WILL BE APPROPRIATE TO REMAND BACK TH IS ISSUE TO THE FILE OF THE ASSESSING OFFICER. NEEDLESS TO SAY, THE ASSESSEE BE GIVEN OPPORTUNITY OF HEARING BY FOLLOWING PRINCIPLES OF NATURAL JUSTICE. GROUND NOS. 16 TO 19 ARE 48 IT(SS)A NO. 6 & ORS/DEL/2012 ALLOWED FOR STATISTICAL PURPOSE. THE ADDITIONAL GRO UND IS A LEGAL GROUND WHICH HAS TO BE ADMITTED THAT AS THE SAME IS PURELY LEGAL IN NATURE AND THE DECISION OF THE HONBLE APEX COURT IN CASE OF NATIO NAL THERMAL POWER CORPORATION LTD. IS SQUARELY APPLICABLE IN THE PRES ENT CASE. IN FACT IDENTICAL GROUND WAS RAISED IN CASE OF GROUP COMPANIES, M/S H ARMONY PSYCHIATRY CENTRE (P) LTD. AND M/S UIKAM INVESTMENT FINANCE (P ) LTD. WHEREIN THE ITAT DECIDED THIS GROUND IN FAVOUR OF THE ASSESSEE. THER EFORE, WE ARE NOW DISCUSSING THE MERIT OF THIS GROUND. THE SEIZED ANN EXURE DID NOT RELATE TO THE MATERIAL SEIZED DURING THE COURSE OF SEARCH IN THE CASE OF THE ASSESSEE AS NOTHING HAS BEEN MENTIONED ABOUT THE SAME IN THE ASSESSMENT ORDER. THEREFORE, ADDITIONAL GROUND NO. 21 IS ALLOWED. 91. IN RESULT, APPEAL BEING IT(SS)A NO.1/DEL/2012 F ILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 24TH APRIL, 2 018 . SD/- SD/- (R. K. PANDA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL M EMBER DATED: 24/04/2018 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 49 IT(SS)A NO. 6 & ORS/DEL/2012 DATE 1. DRAFT DICTATED ON 17.04.2018 PS 2. DRAFT PLACED BEFORE AUTHOR 17.04.2018 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .2018 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 24 .04.2018 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 2 4 .04.2018 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.