Shri Smitaben S.Patel, Baroda V. The ACIT., Cent.Circle-2, Baroda

ITSSA 43/AHD/2006

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 3072 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 year(s) 8 month(s) 5 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 31-10-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 20-06-2012
• Assessment Year: misc
• Appeal Filed On: 23-02-2006
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D P GUPTA
• Assessee Lawyers: J P SHAH
• Keywords: Unexplained investment; Unexplained expenditure; Revision of order; Search and seizure; Document seized; Opportunity of being heard; Principle of natural justice; Corroborative evidences; Block assessment; Onus to prove; Documents seized
• Section: 37(1)

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD , ! '#, $% $ & BEFORE SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER 1. (SS) ./ I.T(SS).A. NO.43/AHD/2006 2. (SS) ./ I.T(SS)A.NO.153/AHD/2007 (BLOCK PERIOD FROM 1.4.90 TO 25.7.2000) SMITABEN S.PATEL PROP.SMITAL LAND DEVELOPERS 32, SARVODAYA SOCIETY NIZAMPURA BARODA ! ! ! ! / VS. ASST.CIT CENTRAL CIRCLE-2 / CENTRAL CIRCLE-2(2) BARODA ) $% ./*+ ./ PAN/GIR NO. : ADHPP 8950 E ( ), / // / APPELLANT ) .. ( -.), / RESPONDENT ) ), / $ / APPELLANT BY : SHRI J.P.SHAH, A.R. -.), 0 / $ / RESPONDENT BY : SHRI D.P.GUPTA, CIT-D.R. !1 0 % / / / / DATE OF HEARING : 24/08/2012 234 0 % / DATE OF PRONOUNCEMENT : 31/10/12 $5 / O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : [A] IT(SS)A NO.43/AHD/2006 THIS IS AN APPEAL FILED BY THE ASSESSEE ARISING FROM THE ORDER OF LEARNED CIT(APPEALS)-IV, AHMEDABAD DATED 16/12/2005 . GROUNDS RAISED ARE HEREBY DECIDED AS FOLLOWS:- 2 . GROUND NO.1 READS AS UNDER:- IT(SS)A NO.43/A HD/2006 & IT(SS)A NO.153/AHD/2007 SMITABEN S.PATEL VS. ASST.CIT BLOCK PERIOD - 1.4.90 TO 25.7.2000 - 2 - 1. THE CIT(APPEALS) ERRED IN HOLDING THAT THE BLOC K ASSESSMENT ORDER WAS VALID. [PARA 4 AND 5 OF THE ORDER OF C.I. T. (APPEALS)]. 2.1. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDI NG BLOCK ASSESSMENT ORDER PASSED U/S.158BC R.W.S. 158BG OF THE IT ACT D ATED 30.07.2002 WERE THAT A SEARCH U/S.132 WAS CONDUCTED ON 25.07. 2000. A NOTICE U/S.158BC WAS ISSUED ASKING THE ASSESSEE TO FILE TH E RETURN OF INCOME. THE ASSESSEE IS STATED TO BE A PROPRIETOR OF A BUSI NESS NAMELY, SMITAL LAND DEVELOPERS. THE SAID PROPRIETORSHIP-CONCERN HAD CARRIED OUT THE DEVELOPMENT OF SUN RISE PLOTS AT VASNA ROAD, BAR ODA. IT HAS ALSO BEEN NOTED BY THE AO THAT THE ASSESSEE-LADY HAD GIV EN A POWER OF ATTORNEY TO HER HUSBAND SHRI SUBODH S.PATEL. DURI NG THE COURSE OF SEARCH CASH, GOLD ORNAMENTS, NSCS AND DOCUMENTS WER E FOUND. THE APPELLANT HAD FURNISHED THE RETURN OF INCOME ON 15/ 01/2001 AT RS.NIL, HOWEVER, THE ASSESSMENT WAS FINALIZED ON AN UNDISCL OSED INCOME OF RS.2,18,47,970/-. THE APPELLANT HAS CHALLENGED T HE VALIDITY OF THE BLOCK ASSESSMENT ON THE GROUND THAT THE REVENUE OFFICER W HO HAD CONDUCTED THE RAID IN THE CAPACITY AS DEPUTY DIRECTOR HAS ALS O SUPERVISED THE BLOCK ASSESSMENT PROCEEDINGS IN THE CAPACITY AS JOINT COM MISSIONER OF INCOME-TAX. IN THAT CAPACITY, THE JCIT HAD GRANT ED STATUTORY APPROVAL FOR THE COMPLETION OF THE ASSESSMENT ORDER. THE NA ME OF THAT OFFICER IS STATED TO BE SHRI A.R. BALWAR. ACCORDING TO THE AP PELLANT, THE OFFICER WHO HAD CONDUCTED THE RAID AND PREPARED A APPRAISAL REPORT MUST NOT EITHER BE AO OR SUPERVISORY OFFICER. CASE LAW RELI ED UPON WAS VIPINKUMAR JAIN VS. UNION OF INDIA 249 ITR 728. IT(SS)A NO.43/A HD/2006 & IT(SS)A NO.153/AHD/2007 SMITABEN S.PATEL VS. ASST.CIT BLOCK PERIOD - 1.4.90 TO 25.7.2000 - 3 - 2.2. THIS CONTENTION OF THE ASSESSEE WAS DULY CONSI DERED BY LD.CIT(A). THE FIRST OBSERVATION OF LD.CIT(A) WAS THAT THIS LE GAL OBJECTION WAS NOT RAISED BEFORE THE REVENUE AUTHORITIES ALTHOUGH THE ASSESSEE WAS AWARE ABOUT THE FACT THAT THE SAME OFFICER WAS INVOLVED I N BOTH THE PROCEEDINGS AND SUPERVISED THE FUNCTIONING OF THE REVENUE DEPAR TMENT. NO SUCH OBJECTION WAS RAISED AT THE TIME OF ASSESSMENT PROC EEDINGS. THE LD.CIT(A) HAS ALSO REMARKED THAT THE AO WHO HAD FIN ALIZED THE ASSESSMENT; BEING A DIFFERENT PERSON; HAPPENED TO B E NOT THE HEAD OF THE SEARCH PARTY. DUE TO THIS REASON, LD.CIT(A) HAS C ONCLUDED THAT THE DECISION OF VIPINKUMAR JAIN (SUPRA) WAS NOT APPLICA BLE TO THE FACTS OF THE CASE. THE CONCLUSION DRAWN BY LD.CIT(A) IS REPROD UCED BELOW:- 4.1. THE SUBMISSION OF THE APPELLANT IS DULY CONSI DERED. IN MY VIEW THIS IS NOT THE RIGHT FORUM TO RAISE THIS OBJE CTION. THE DAY THE ASSESSMENT PROCEEDINGS STARTED, THE ASSESSEE WAS VE RY WELL AWARE OF THE FACT THAT THE PROCEEDINGS ARE GOING TO BE FI NALIZED UNDER THE SUPERVISION AND GUIDANCE OF SHRI A.R. BALWAR. AS A N ABUNDANCE PRECAUTION, HE SHOULD HAVE RAISED THIS OBJECTION AT THE TIME OF ASSESSMENT PROCEEDINGS ITSELF. IF AT ALL, IT WAS F ELT THAT THE NATURAL JUSTICE WOULD BE DENIED TO HIM OR HE WAS FEELING CE RTAIN TYPE OF THREAT FROM SHRI A.R. BALWAR, IT SHOULD HAVE BEEN B ROUGHT O THE NOTICE OF THE DEPARTMENT. THE FACTS OF THE CASE RE LIED UPON BY THE APPELLANT IS DISTINGUISHABLE. THE ASSESSING OFFIC ER, WHO HAS FINALIZED THE ASSESSMENT, WAS NOT THE HEAD OF THE S EARCH PARTY, AS ALLEGED BY THE ASSESSEE. THE ASSESSEE IS TRYING TO TAKE THE SHELTER OF A DECISION, WHICH IS NOT RELEVANT AT ALL TO THE PRESENT CASE. IN FACT, THE HEAD OF THE SEARCH PARTY HAS ACTED AS ONL Y SUPERVISORY AUTHORITY IN THE PRESENT CASE AND HIS FUNCTION CANN OT BE TERMED AS A QUASI-JUDICIAL AUTHORITY. MOREOVER, IT SHOULD BE UNDERSCORED THAT THE ASSESSING OFFICER HAS ACTED HONESTLY AND D ILIGENTLY, WHICH IS MORE RELEVANT. THE ALLEGATION THAT HE OFFICER H AS ACTED AS JUDGE IN HIS OWN CASE, IS ABSOLUTELY BASELESS, AS THE APP ELLANT WAS IT(SS)A NO.43/A HD/2006 & IT(SS)A NO.153/AHD/2007 SMITABEN S.PATEL VS. ASST.CIT BLOCK PERIOD - 1.4.90 TO 25.7.2000 - 4 - AFFORDED OPPORTUNITY OF BEING HEARD BY THE ASSESSIN G OFFICER. THE ASSESSEE IS TRYING TO EQUATE A SUPERVISORY CHARGE T O THE ASSESSING AUTHORITY BY DISTORTING THE FACTS TO GAIN HER ENDS. HOWEVER, IN THE APPELLATE PROCEEDINGS, THIS GROUND OF APPEAL HAS BE EN WITHDRAWN BY THE APPELLANT, AS THE DECISION OF HON'BLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF VIPINKUMAR JAIN V/S. UNIO N OF INDIA, ON WHICH THE APPELLANT HAD RELIED AND CHALLENGED THE V ALIDITY OF THE BLOCK ASSESSMENT, HAS BEEN REVERSED BY THE HON'BLE SUPREME COURT (260 ITR 1) HENCE, BEING INFRUCTUOUS, THE SAM E IS DISMISSED. 3. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES, WE ARE OF THE CONSIDERED VIEW THAT THIS LEGAL OBJECTION HAS NO SU BSTANCE. THE LD.OFFICER WHO HAS CONDUCTED THE RAID HAS ACTED IN THE CAPACITY AS DY.DIRECTOR OF INCOME-TAX DEPARTMENT. IN THAT CAPA CITY, THE SEARCH AND SEIZURE ACTION WAS TAKEN AGAINST THE ASSESSEE. AN OFFICER CAN BE TRANSFERRED OR CAN HAVE OTHER RESPONSIBILITY TO LOO K AFTER THE PROCEEDINGS OF THE REVENUE DEPARTMENT. DUE TO THIS REASON, THE SAID OFFICER HAD SUPERVISED THE ASSESSMENT PROCEEDINGS IN THE CAPACI TY OF JT.COMMISSIONER OF INCOME-TAX. IT DID NOT MEAN TH AT AN OFFICER CANNOT FUNCTION IN TWO CAPACITY. THERE IS NO RESTRICTION OR LEGAL BAR IN THE STATUTE. WE FIND NO LOGIC IN THIS ARGUMENT THAT AN OFFICER WHO HAS CONDUCTED THE RAID CANNOT SUPERVISE THE ASSESSMENT PROCEEDINGS. ACCORDING TO US, BOTH THE FUNCTIONS ARE APPARENTLY INDEPENDENT TO EACH OTHER HAVING TWO DIFFERENT AREAS OF PROCEEDINGS. RATHER, IN OUR CONSIDERED OPINION, EITHER IN THE CASE OF TRANSFER/ SHIFT OF DUTY OR ACTING IN DUAL CAPACITY HOLDING BOTH THE CHARGES, THE OFFICER CAN PERFORM BOTH THE FUNCTIONS INDEPENDENTLY. THIS QUESTION HAS DULY BE EN ADDRESSED BY IT(SS)A NO.43/A HD/2006 & IT(SS)A NO.153/AHD/2007 SMITABEN S.PATEL VS. ASST.CIT BLOCK PERIOD - 1.4.90 TO 25.7.2000 - 5 - HONBLE SUPREME COURT IN THE CASE OF UNION OF INDIA VS. VIPIN KUMAR JAIN & OTHERS 260 ITR PG 1, WHEREIN THE PRINCIPLE LAID DOWN WAS THAT IN A SITUATION WHERE AN OFFICER WAS HEADING A SEARC H PARTY AND LATER ON ALSO ACTED AS AN AO FOR DETERMINING THE TAX LIABILI TY, THAT MERE FACT ALONE DID NOT JUSTIFY AN APPREHENSION ON THE PART OF THE ASSESSEE OF BIAS ON THE PART OF THE SAID OFFICER. THE HONBLE COURT HAS F URTHER NOTED THAT IN A SITUATION WHERE AN OFFICER IS AUTHORIZED TO GATHER INFORMATION AND ALSO TO ASSESS ON THE BASIS OF THAT INFORMATION, THEN THE P ROVISIONS OF THE ACT DO NOT IMPOSE RESTRICTION THAT THE OFFICER GATHERING T HE INFORMATION AND THAT THE AO WHO IS MAKING THE ASSESSMENT SHOULD NOT BE T HE SAME. THERE IS NOTHING UNCONSTITUTIONAL IN PERMITTING THE AO TO AS SESS THE INCOME ON THE BASIS OF THE INFORMATION GATHERED. THE QUESTION O F BIAS HAVE TO BE DECIDED ON THE FACTS OF EACH CASE AND THE ASSESSEE SHOULD BE ABLE TO ESTABLISH THE FACT OF BIAS ON THE PART OF THE AO. THERE IS NOTHING ON RECORD TO SAY THAT THE ASSESSING OFFICER HAS NOT AC TED JUDICIOUSLY OR HONESTLY A DILIGENCY. BIAS CANNOT BE SAID TO BE EST ABLISHED ONLY BECAUSE THE AUTHORIZED OFFICER U/S.132 AND THE AO ARE ONE A ND THE SAME PERSON. ON THE OTHER HAND, IN THE PRESENT CASE, THE SAID OF FICER WAS NOT THE AO BUT HE HAS ONLY SUPERVISED AS JCIT. THEREFORE ON TH E FACTS EVEN IT IS ALSO WRONG TO BLAME THAT THE SAID OFFICER HAD ACTED AS A JUDGE OF HIS OWN CASE. DUE TO THIS REASON AS WELL, THAT THE ASSESSING OFFI CER BEING A DIFFERENT PERSON WHO HAS PASSED THE IMPUGNED ASSESSMENT ORDER U/S.158BC DATED 30.07.2002 WAS IN THE RANK OF ACIT, CENTRAL CIRCLE -2 BARODA (SHRI MUKUND KUMAR), WE HEREBY HOLD THAT THE ISSUE RAISED IN THIS GROUND HAS NO LEGAL FORCE. THEREFORE THE LEGAL OBJECTION RAIS ED BY THE ASSESSEE IS IT(SS)A NO.43/A HD/2006 & IT(SS)A NO.153/AHD/2007 SMITABEN S.PATEL VS. ASST.CIT BLOCK PERIOD - 1.4.90 TO 25.7.2000 - 6 - WITHOUT ANY BASIS AND DESERVES TO BE REJECTED. GROUND NO.1 IS DISMISSED. 4. GROUND NO.2 READS AS UNDER:- 2. THE CIT(APPEALS) ERRED IN HOLDING THAT 206.780 GRAMS OF JEWELLERY WAS UNEXPLAINED INVESTMENT OF THE ASSESSE E. [PARA 6 TO 6.11 OF THE ORDER OF CIT(APPEALS)] 4.1. DURING THE COURSE OF SEARCH, TOTAL GOLD JEWELL ERY WEIGHING 2147.700 GRAMS WORTH RS.7,72,500/- WAS FOUND. OUT OF WHICH 849.500 GRAMS WAS SEIZED. THE VALUE OF THE SAID SEIZED JE WELLERY WAS CALCULATED AT RS.3,05,825/-. OUT OF WHICH THE WAS THAT THE SA ME BELONGED TO THE ASSESSEELADY, DAUGHTER AND SISTER-IN-LAW. THE SHA RE OF THE ASSESSEE IN THE ITEMS OF JEWELLERY WAS 669.400 GRAMS. IT WAS A LSO EXPLAINED THAT 500GRAMS WAS DISCLOSED IN THE WEALTH-TAX RETURN BY THE ASSESSEE. IT HAS ALSO BEEN CLAIMED THAT JEWELLERY WEIGHING 461.620 G RAMS WAS PURCHASED BY THE ASSESSEE DURING THE PERIOD OF 16.6.1995 TO 1 0.08.1999, AS PER THE DATE-WISE CHART WITH THE DETAILS OF BILLS APPEARING ON PAGE-11 OF CIT(A). ALTHOUGH THE AO HAD MADE AN ELABORATE DISCUSSION AN D REPRODUCED CERTAIN QUESTION-ANSWERS, BUT THE FACT REMAINED THA T THE JEWELLERY WORTH RS.3,05,825/- WAS HELD AS UNEXPLAINED INVESTMENT U/ S.69 OF IT ACT. BEFORE LD.CIT(A), OUT OF THE WEIGHT OF 849.500GRAMS THE ASSESSEES CLAIM OF HAVING ONLY 669.400 GRAMS WAS ACCEPTED AND OUT OF WHICH IT WAS FURTHER ACCEPTED BY LD.CIT(A) THAT THE ASSESSEE HAD PROOF OF 461.620 GRAMS AS PER THE DETAILS AVAILABLE ON RECO RD. SINCE THE IT(SS)A NO.43/A HD/2006 & IT(SS)A NO.153/AHD/2007 SMITABEN S.PATEL VS. ASST.CIT BLOCK PERIOD - 1.4.90 TO 25.7.2000 - 7 - ASSESSEE HAD PRODUCED THE BILLS IN RESPECT OF ITEMS OF JEWELLERY PURCHASED AND THE PAYMENT WAS MADE THROUGH CHEQUE, THEREFORE IT WAS ACCEPTED BY LD.CIT(A). ONLY THE BALANCE INVESTMENT OF 207.780 GRAMS WAS UPHELD. 5. WITH THIS BRIEF BACKGROUND, WE HAVE HEARD BOTH T HE SIDES. THE ONLY CONTENTION WHICH WAS RAISED BEFORE US BY LD.AR IS THAT THE AO IS EXPECTED TO FOLLOW INSTRUCTION NO.1916 [F.NO.286/63 /93-IT (INV.II) DATED 11 TH MAY, 1994] :: [120 TAXATION 98] THROUGH WHICH IT IS DIRECTED THAT ORNAMENTS TO THE EXTENT OF 500GRAMS PER MARRIED-LAD Y, 250 GRAMS PER UNMARRIED-LADY AND 100 GRAMS PER MALE-MEMBER OF THE FAMILY NEED NOT TO BE SEIZED. IN THIS REGARD, FEW CASE LAWS ARE A LSO AVAILABLE, HENCE WE DEEM IT PROPER TO RESTORE THIS ISSUE BACK TO THE ST AGE OF THE CIT(A) TO RECONSIDER THE BENEFITS AS SUBSCRIBED BY VARIOUS HO NBLE COURTS. IF IT IS FOUND THAT THE BENEFIT HAS ALREADY NOT BEEN GRANTED AS PER THE BENEFIT GIVEN BY THE BOARDS CIRCULAR, THEN ONLY THE REST O F THE AMOUNT CAN BE SUBJECT TO TAX. RESULTANTLY, FOR THE LIMITED PUR POSE THIS GROUND OF THE ASSESSEE MAY BE TREATED AS ALLOWED BUT FOR STATISTICAL PURPOSES. 5. GROUND NO.3 READS AS UNDER:- THE CIT(APPEALS) ERRED IN ADDING RS.5,00,000/- BY W AY OF UNEXPLAINED INCOME IN THE HANDS OF THE ASSESSEE ON THE BASIS OF ALLEGATIONS IN THE NOTICE DATED 29.9.94 GIVEN BY DR .NARENDRA PARMAR, ADVOCATE ON BEHALF OF THE ASSESSEE TO ONE S HRI ARVINDBHAI AMBALAL PATEL FORGETTING ALL THE OTHER FACTS TO THE CONTRARY. [PARA 7 TO 7.2 OF THE ORDER OF C.I.T. (APPEALS)]. IT(SS)A NO.43/A HD/2006 & IT(SS)A NO.153/AHD/2007 SMITABEN S.PATEL VS. ASST.CIT BLOCK PERIOD - 1.4.90 TO 25.7.2000 - 8 - 5.1. A LOOSE-PAPER MARKED AS PAGES NO.1 TO 4 WAS SEIZED FROM HOTEL GRG DURING THE COURSE OF SEARCH. THE SAID LOOSE-PA PER WAS A LEGAL NOTICE DATED 29.9.1994 GIVEN BY AN ADVOCATE, NAMELY , SHRI NARENDRA PARMAR ON BEHALF OF THIS ASSESSEE-CLIENT. THE NOTI CE IS ISSUED TO ONE SHRI ARVINDBHAI AMBALAL PATEL, PROPRIETOR OF M/S.SHREE M ONALI ENTERPRISES. THE NOTICE WAS ABOUT A DEFAULT IN REPAYMENT OF AN A DVANCE OF RS.5 LACS GIVEN IN CASH BY THE ASSESSEE TO THE SAID SHRI ARVI NDBHAI PATEL. AS PER THE SUIT, A CHEQUE OF RS.5 LACS DATED 20/06/1994 WA S ISSUED BY SHRI ARVINDBHAI AMBALAL PATEL IN FAVOUR OF THE ASSESSEE, HOWEVER THE SAME WAS DISHONOURED BY THE BANK. THROUGH THE SAID NOT ICE, THE REPAYMENT WAS DEMANDED. ASSESSEES HUSBAND HAS ALSO BEEN Q UESTIONED. HE HAS NARRATED SOME OTHER FACTS WHICH WERE DISCARDED BY T HE AO AND HELD THAT THE FACTS HAVE BEEN DISTORTED IN RESPECT OF THE SAI D TRANSACTION. THE AO HAS CONCLUDED AS FOLLOWS:- THE ASSESSEE HAS MADE AN ATTEMPT TO EXPLAIN AWAY T HE SOURCE BY RELYING UPON THE COUNTERFOILS OF SOME CHEQUES ISSUE D BY KIRAT BUILDERS AND SUBMITTED BY HER HUSBAND IN HIS CASE. IT IS QUITE SIGNIFICANT TO MENTION THAT THE MONEY WAS ADVANCED IN THE MONTH OF JUNE, 1994 WHEREAS THE COUNTERFOIL OF THE CHEQUE PERTAINED TO THE PERIOD 1989 AND 1990. A CLOSE LOOK AT THE COU NTER FOILS FURNISHED BY THE ASSESSEE REVEAL THAT SOME OF THE C HEQUES ARE ISSUED FOR LABOUR PAYMENTS, OFFICE EXPENSES, ETC. WHICH BY NO STRETCH OF IMAGINATION CAN BE CONSIDERED AS PAYMENT TO GAYATRI BUILDERS. THUS, THE EXPLANATION OF THE ASSESSEE IS NOTHING BUT A CONCOCTED STORY WITH A VIEW TO HIDING THE REAL NATU RE OF THE TRANSACTION. UNDER THE INDIAN EVIDENCE ACT, 1872, WHERE THERE IS A STATUTORY REBUTTABLE PRESUMPTION AGAINST THE ASSE SSEE, AS IN CASE OF CASH CREDIT ETC. U/S.68 OR UNEXPLAINED INVESTMEN T U/S.69 OF THE ACT, THE INITIAL BURDEN OF PROOF IS ON THE ASSESSEE TO SHOW THAT THE IT(SS)A NO.43/A HD/2006 & IT(SS)A NO.153/AHD/2007 SMITABEN S.PATEL VS. ASST.CIT BLOCK PERIOD - 1.4.90 TO 25.7.2000 - 9 - CASH CREDIT IS GENUINE OR THE INVESTMENT IS NOT UNE XPLAINED. THE ASSESSEE HAS FAILED TO DISCHARGE HER ONUS AS REQUIR ED BY LAW. UNDER THE ABOVE CIRCUMSTANCES, THE EXPLANATION IS N OT SATISFACTORY OR ACCEPTABLE AND HENCE THE SAME ARE REJECTED. THE UNEXPLAINED INVESTMENT IN THE FORM OF ADVANCE TO SHRI ARVINDBHA I PATEL OF RS.5,00,000/- IS BROUGHT TO TAX U/S.69 OF THE I.T.ACT. 6. BEFORE LD.CIT(A), THE ASSESSEE COULD NOT IMPROVE THE CASE, THEREFORE LD.CIT(A) HAS HELD THAT IN THE LIGHT OF A N EVIDENCE FOUND IN THE POSSESSION OF THE ASSESSEE, I.E. THE NOTICE, THE ON US WAS TO EXPLAIN THE CONTENTS OF THE SAID EVIDENCE. AN ATTEMPT WAS MADE BY THE ASSESSEE BY GIVING REFERENCE OF ONE KIRAN BUILDERS BUT THAT EXP LANATION HAD NO CONNECTION WITH THE ASSESSEE. IN THE RESULT, LD.CI T(A) HAS CONFIRMED THE ADDITION. 7. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES A ND ON DUE CONSIDERATION OF THE EVIDENCES PLACED ON RECORD, WE ARE ALSO OF THE OPINION THAT THE NOTICE IN QUESTION WAS UNAMBIGUOU S AND HENCE CORRECTLY HELD THAT AN UNEXPLAINED INVESTMENT OF RS.5 LACS WA S MADE BY THE ASSESSEE, THEREFORE WE HOLD THAT THE SAME WAS RIGH TLY TAXED BY THE REVENUE DEPARTMENT. THIS GROUND IS DISMISSED. 8. GROUND NO.4 READS AS UNDER:- 4.THE CIT(APPEALS) ERRED IN UPHOLDING THE ADDITION OF RS.1,96,04,141/- BY WAY OF ALLEGED UNACCOUNTED INCO ME FOR DEVELOPING A SCHEME KNOWN AS SUNRISE FREEHOLD PLOT S IN SPITE OF THE FACT TO THE CONTRARY AND IN SPITE OF THE FACTS THAT RS.1,56,00,000/- THEREFROM WAS PAID AND PAYABLE TO M/S.ASHISH ENTERPRISES FROM WHOM THE ASSESSEE ACQUIRED DEVELOP MENT RIGHTS IT(SS)A NO.43/A HD/2006 & IT(SS)A NO.153/AHD/2007 SMITABEN S.PATEL VS. ASST.CIT BLOCK PERIOD - 1.4.90 TO 25.7.2000 - 10 - AND WITH WHOM A COMPROMISE DECREE DATED 26.7.200 WA S ENTERED INTO AND PLOTS 10,14,18,19 AND 39 RETURNED TO SAID ASHISH ENTERPRISES AND OTHER FACTS. [PARA 8 TO 8.34 OF TH E ORDER OF C.I.T. (APPEALS)]. 8.1. THE AO HAS NOTED THE BRIEF BACKGROUND THAT THE HUSBAND OF THE ASSESSEE-LADY SHRI SUBODH S.PATEL WAS A POWER OF AT TORNEY HOLDER IN RESPECT OF A SCHEME DEVELOPED AS SUNRISE FREEHOLD PLOTS PROJECT VASNA ROAD, BARODA. THE ASSESSEE-LADY AS A PROPRIETOR OF M/S.SMITAL LAND DEVELOPERS HAD OBTAINED DEVELOPMENT RIGHTS FROM M/S .ASHISH ENTERPRISE, BARODA. M/S.ASHISH ENTERPRISE WAS EARLIER DEVELOP ING THE SAID LAND. IT WAS ALSO NOTED BY THE AO THAT THERE WAS SOME DISPUT E BETWEEN THE ASSESSEE AND M/S.ASHISH ENTERPRISES, HOWEVER LATER ON THE MATTER WAS SETTLED VIDE A COMPROMISE DECREE DATED 26.7.2000. ACCORDING TO AO, IN THE COURSE OF DEVELOPMENT OF THE PLOTS THE HUSBAND OF THE ASSESSEE HAD COLLECTED ON-MONEY. THE AO HAS THEREUPON DISCUSS ED CERTAIN EVIDENCES WHICH WERE STATED TO BE FOUND AND SEIZED IN THE FORM OF LOOSE- PAPERS AND REGISTERS AT THE TIME OF SEARCH CONDUCTE D ON 25/26.07.2000. (A) LOOSE-PAPER FILE NO.A-3 (PAGE NO.64) SEIZED FROM HO TEL GRG BARODA. IN FILE NO.A-13 THERE WAS A MENTION O F A LETTER APPEARING ON PAGES 1 & 28 OF THE FILE. (B) FULL-SCAPE BOOK NO.ANNEXURE A-22 SEIZED FROM HOTEL GRG BARODA, WHEREIN IT WAS ALLEGED THAT RECEIPT OF ON- MONEY ON BOOKING OF SUNRISE FREEHOLD PLOTS SCHEME WAS MENT IONED. ACCORDING TO AO, IN THE SAID BOOK NO.A-22 DETAILS OF CHEQUE IT(SS)A NO.43/A HD/2006 & IT(SS)A NO.153/AHD/2007 SMITABEN S.PATEL VS. ASST.CIT BLOCK PERIOD - 1.4.90 TO 25.7.2000 - 11 - PAYMENT AS ALSO DETAILS OF ON-MONEY RECEIPTS IN C ASH IN RESPECT OF VARIOUS PLOTS OF THE SAID SCHEME WAS MEN TIONED ON SEPARATE PAGES. (C) REGISTERS, BOOKS OF ACCOUNTS, LOOSE-PAPERS, NOTE-BO OKS, RECEIPT BOOKS MARKED AS ANNEXURE-A IN RESPECT OF SUNRISE FREEHOLD PLOTS OF M/S.SMITAL LAND DEVELOPERS WAS S EIZED FROM HOTEL GRG BARODA. 8.2. THE NATURE OF THE EVIDENCES COLLECTED IS HEREB Y SUMMARIZED HEREUNDER:- [A] LOOSE-PAPER FILE (ANNEXURE-A.3) PAGE NO.64 THE AO HAS REPRODUCED THE CONTENTS OF PAGE NO.64 OF ANNEXURE A-3 BY DESCRIBING THE NAME OF THE PERSONS AND THE COMPONENTS OF THE DOCUMENTED PRICE AND THE COMPON ENT OF THE ON-MONEY ON CERTAIN PLOTS. THE AO HAS DISTINCTLY MENTIONED PLOT NUMBER, NAME OF THE PERSON AND THE SAID TWO FI GURES. THE TOTAL OF THE ENTIRE LISTS OF PAGE NO.64 WAS COMPUTE D BY AO AT RS.87.39 LACS (27.59 + 60.30). IT IS WORTH TO MENTION AT THIS PLACE ITSELF THAT ON PG. 16 OF ASTT.ORDER THERE IS A LIST OF ALL THE PLOTS BARRING PLOT NO. 10,14,18,19,39 . THE CONTROVERSY IN RESPECT OF THESE PLOTS SHALL BE ADDRESSED AT THE TIME OF DE CIDING THE OTHER APPEAL OF THIS APPELLANT ( IT(SS) 153/AHD/2007), AL SO FIXED FOR HEARING TODAY. IN THE LIGHT OF THE ABOVE SEIZED MA TERIAL, A STATEMENT OF SHRI SUBODH PATEL, HUSBAND OF THE ASSE SSEE WAS RECORDED ON 26.7.2000, I.E. DURING THE COURSE OF SE ARCH. IN AN ANSWER TO QUESTION NO.14, HE HAS GIVEN THE DESCRIPT ION OF THE FOUR IT(SS)A NO.43/A HD/2006 & IT(SS)A NO.153/AHD/2007 SMITABEN S.PATEL VS. ASST.CIT BLOCK PERIOD - 1.4.90 TO 25.7.2000 - 12 - COLUMNS APPEARING ON PAGE NO.64 (SEIZED MATERIAL) A ND THAT QUESTION IS REPRODUCED BY THE AO AS FOLLOWS:- Q.NO.14 I WOULD LIKE TO REMIND YOU THAT THIS STATE MENT IS RECORDED UNDER OATH AND IF YOU DO NOT SPEAK TRUTH O R TRY TO CONCEAL SOMETHING WHICH IS KNOWN TO YOU THEN YOU MAY BE LIABLE TO CRIMINAL PROSECUTION AS LAID O UT IN THE INCOME TAX ACT. PLEASE RETHINK AND THEN GIV E ANSWER TO A.NO.12. ANS. I HAVE AGAIN GONE THROUGH THIS THIS PAPER. THERE ARE FOUR COLUMNS IN PAGE NO.64 WHICH ACCORDING TO ME ARE AS FOLLOWS: 1. PLOT NO., 2. NAME OF PURCHASER, 3. MONEY RECEIVED THE CHEQUE AND 4. ON MONEY RECEIVED IN CASH. THIS PAPER PERTAINS TO SUN RISE FREE HOLD PROJECT, VASANA ROAD, BARODA. THE FIGURES WRITTEN AT THE BOTTOM ARE IN LACS. THIS ON MONEY WAS RECEIVED BY US ON BEHALF OF M/S.ASHISH ENTERPRISE, 7 TH FLOOR, STERLING CENTRE, R.C. DUTT ROAD, BARODA WHO WERE THE OWNERS OF LAND. 8.3. A QUESTION HAS ALSO BEEN ASKED ABOUT THE EVIDENCE OF PASSING ON THE ON-MONEY TO M/S.ASHISH ENTERPRISES AND THE SA ME WAS ANSWERED VIDE QUESTION NO.15 AS UNDER:- Q.NO.15. DO YOU HAVE ANY PROOF OF GIVING THIS CASH MENTIONED IN PAGE 64 TO M/S.ASHISH ENTERPRISES? ANS. THIS SUN RISE PROJECT WAS DEVELOPED BY M/S.SMI TAL LAND DEVELOPERS. WE HAD SOLD THE PLOTS OF LAND TO VARIOUS PARTIES ON BEHALF OF M/S.ASHISH ENTERPRIS ES WHO WERE THE OWNERS OF LAND. WE HAD ONLY DEVELOPED INFRASTRUCTURE. WE HAD ENTERED INTO AGREEMENT WITH IT(SS)A NO.43/A HD/2006 & IT(SS)A NO.153/AHD/2007 SMITABEN S.PATEL VS. ASST.CIT BLOCK PERIOD - 1.4.90 TO 25.7.2000 - 13 - M/S.ASHISH ENTERPRISES THAT THE ON MONEY RECEIVED BY US FROM VARIOUS PARTIES WILL BE TRANSFERRED TO T HEM. BUT PRESENTLY I AM NOT HAVING THT COPY OF AGREEMENT . AGAIN, A QUESTION WAS ASKED ABOUT THE SHARING OF TH E ON- MONEY AND IN REPLY VIDE QUESTION NO.16, IT WAS STA TED AS UNDER:- Q.NO.16 DO YOU MEAN TO SAY, YOU HAD NOT SHARED THE ON MONEY RECEIVED FROM VARIOUS PURCHASERS? ANS. I MIGHT HAVE GOT 5 TO 10% OF THE ON MONEY WHIC H I HAD NOT ENTERED INTO OUT BOOKS. WE WOULD HAVE RECEIVED ABOUT RS.6 LACS IN CASH. 8.4. SO, THE ASSESSEE, I.E. ON BEHALF HUSBAND HAS NARRATED THAT SHE MIGHT HAVE GOT 5 TO 10% OF THE ON-MONEY. FURTHER, A QU ESTION WAS ASKED ABOUT THE AGREEMENT BETWEEN THE ASSESSEE AND M/S.AS HISH ENTERPRISES AND MR.PATEL HAS ANSWERED AS FOLLOWS:- Q.NO.18 WHO WAS THE MAIN WORKING PARTNER OF M/S.AS HISH ENTERPRISE WHO WAS AWARE OF THE SAID AGREEMENT BETWEEN YOU AND M/S.ASHISH ENTERPRISES REGARDING COLLECTION OF ON MONEY BY YOU AND SUBSEQUENTLY PASSING IT TO M/S.ASHISH ENTERPRISES? ANS. THIS AGREEMENT WAS KNOWN TO BOTH SHRI ANIL THA KKER AND SHRI SWARAJ PANERI. THE CASH MONEY WAS GIVEN BY ME TO BOTH THESE PERSONS IN THEIR OFFICE. 8.5. ACCORDING TO AO, SHRI SUBODH S.PATEL HAD AD MITTED THAT THE ON- MONEY WAS ACCEPTED WHILE BOOKING THE PLOTS. IN T HE STATEMENT, HE HAS STATED THAT THE ON-MONEY SO RECEIVED IN CASH WAS HANDED OVER TO SHRI ANIL THAKKER AND SHRI SWARAJ PANERI, PARTNERS OF M/ S.ASHISH ENTERPRISES. IT(SS)A NO.43/A HD/2006 & IT(SS)A NO.153/AHD/2007 SMITABEN S.PATEL VS. ASST.CIT BLOCK PERIOD - 1.4.90 TO 25.7.2000 - 14 - HE HAS ACCEPTED THAT ONLY 5 TO 10% OF THE ON-MONEY WAS RETAINED BY HIM. HE HAS ADMITTED THAT ON-MONEY OF RS.6 LAC S WAS THE INCOME. THE AO HAD THEREFORE STRESSED UPON THE EXISTENCE O F THE ON-MONEY IN THE SAID LEVEL TRANSACTIONS; BUT TO DETERMINE THE Q UANTUM OF THE AO HAD MADE FURTHER INVESTIGATION. THE AO DID NOT ACCEPT T HE SAID PLEA OF THE ASSESSEE THAT SINCE THE PARTNERS OF M/S.ASHISH ENTE RPRISES WERE AWARE ABOUT THE AGREEMENT, THEREFORE THEY HAVE BEEN HANDE D OVER THE ON- MONEY. AS PER AO, THE ASSESSEE HAD ACQUIRED THE C OMPREHENSIVE DEVELOPMENT RIGHTS FROM M/S.ASHISH ENTERPRISES THER EFORE ON-MONEY WAS SHARED BETWEEN THE SAID TWO PARTIES. THAT THER E WAS NO REFERENCE OF ANY LOOSE-PAPER REGARDING THE SHARING OF ON-MONEY WHICH WERE PAID TO M/S.ASHISH ENTERPRISES, THEREFORE THERE WAS NO SHA RING OF ON-MONEY. 8.6. THERE IS A MENTION OF A STATEMENT RECORDED O N OATH U/S.131 OF SHRI ANIL THAKKER, MANAGING PARTNER OF M/S.ASHISH ENTERP RISES, WHEREIN VIDE QUESTION NO.5 HE HAS INFORMED AS UNDER:- Q.NO.5 WHEN DID YOU ENTER INTO AGREEMENT WITH SHRI SUBODH S.PATEL AND WHAT WAS THE TERMS AND CONDITION REGARDING THE WORK RELATED TO DEVELOPMENT AND PAYMENT WITH HIM? PLEASE EXPLAIN. ANS. THE AGREEMENT WITH M/S.SMITAL LAND DEVELOPERS WAS ENTERED INTO IN THE YEAR 1994. WE HAD SPECIFIC TER MS FOR PAYMENT AND AS PER THOSE TERMS M/S.SMITAL LAND DEVELOEPRS WHERE SUPPOSED TO PAY US THE TOTAL CONSIDERATION WITHIN A YEAR IN 4 QUARTERLY INSTALME NTS FROM THE DATE OF AGREEMENT. THEY WERE AT LIBERTY T O MAKE THE DEVELOPMENT THEY DESIRE FOR A SPECIFIED PR ICE OF THE AGREEMENT. IT(SS)A NO.43/A HD/2006 & IT(SS)A NO.153/AHD/2007 SMITABEN S.PATEL VS. ASST.CIT BLOCK PERIOD - 1.4.90 TO 25.7.2000 - 15 - SHRI ANIL THAKKER HAD DENIED OF RECEIVING ANY ON-M ONEY FROM M/S.SMITAL LAND DEVELOPERS, VIDE QUESTION NO.8, REP RODUCED BELOW:- Q.NO.8 DID YOU RECEIVE ANY CONSIDERATION FOR THE S ELLING OF DEVELOPMENT RIGHTS FROM M/S.SMITAL LAND DEVELOPERS IN ADDITION TO THE RATE MENTIONED IN THE AGREEMENT? PLEASE EXPLAIN. ANS. NO. OUR FIRM HADNT RECEIVED ANY ADDITIONAL AMOUNT FROM M/S.SMITAL LAND DEVELOPERS OVER AD ABOVE THE SAID AGREEMENTS. I WOULD LIKE TO FURTHER CLARIFY T HAT WE DIDNT RECEIVE THE FULL PAYMENT AS PER THE SAID AGREEMENT AS AND WHEN IT WAS DUE. IT IS BECAUSE OF HIS FAILURE TO MAKE THE PAYMENTS OUR FIRM HAD TO FI LE A SUIT AGAINST HIM SOMEWHERE IN 1997/98. IN VIEW OF THE ABOVE FACTS, THE AO HAS CONCLUDED TH AT NO PART OF THE ON-MONEY, WHICH WAS CHARGED BY M/S.SM ITAL LAND DEVELOPERS WAS HANDED OVER TO M/S.ASHISH ENTERPRISE S. ACCORDING TO AO, THE ASSESSEE HAS NOT PLACED ANY EV IDENCE TO PROVE THAT THE ON-MONEY WAS INDEED HANDED OVER TO M/S.ASHISH ENTERPRISES. THE AO HAS ALSO REFERRED EXPLANATIO N TO SECTION 37(1) WHICH PROHIBITS ALLOWANCE OF ANY EXPENDITURE WHICH IS AN OFFENCE OR WHICH IS PROHIBITED BY LAW. THE AO HAS FINALLY HELD THAT THE TOTAL ON-MONEY AS APPEARED ON PAGE 64 OF ANNEXURE A.3 OF RS.60.30 LACS WAS THE UNACCOUNTED MONEY RECEIVE D ON BOOKING OF SUNRISE FREEHOLD PLOTS SCHEME. IT(SS)A NO.43/A HD/2006 & IT(SS)A NO.153/AHD/2007 SMITABEN S.PATEL VS. ASST.CIT BLOCK PERIOD - 1.4.90 TO 25.7.2000 - 16 - 8.6 AS PER ANNEXURE A.3, THERE WAS ALSO A REFEREN CE OF PAGE NO.28 WHICH WAS A LETTER WRITTEN BY SHRI S.N. PANERI TO S HRI SUBODH PATEL. CONTENTS OF THE LETTER ARE REPRODUCED BELOW: 3.4.99 SHRI SUBODHBHAI SENT HEREWITH ARE CHEQUE OF RS.1,82,250/- @ RS.75/ - PER SQ.FT. OF 2431 OF PLOT NO.39 BY SHRI V.K.SHASH TRI AND MRS. K.V.SHASHTRI CLOSE FRIENDS OF MINE. THE PRICE FIX IS RS.401/- - 25/- PER SQ.FT. OF DEVELOPMENT CHARGES. CASH IS MY RESPONSIBILITY . HE HAS PROMISED TO PAY BY 5 TH MAY. KINDLY SEND CHEQUE OF RS.91,008 TO ASHISH ENTERPRISES AS AGREED. THANKS, S.N. PANERI THE AO HAS INTERPRETED THE SAID LETTER IN THE MANNE R THAT SHRI SUBODH PATEL HAD AGREED THAT ON-MONEY WAS TO BE CHARGED OF RS.25/- IN ADDITION TO THE PRICE FIXED OF RS.401 /- PER SQ.FT. THE AO HAS THUS REFERRED THAT ON BOOKING OF PLOT NO.39 IN THE NAME OF ONE SHRI V.K.SHASTRI AND MRS.SHASTRI THERE WAS AN I NVOLVEMENT OF ON-MONEY WHICH WAS DULY REFLECTED IN THE SAID LE TTER. [B] FULL-SCAPE BOOK NO.ANNEXURE A-22 SEIZED FROM H OTEL GRG BARODA THIS REGISTER, AS PER AO, CONTAINED THE MOST IMPORT ANT PIECE OF EVIDENCE, I.E. PLOT-WISE DETAILS OF CHEQUE PAYMENT (NOTED IN PEN- IT(SS)A NO.43/A HD/2006 & IT(SS)A NO.153/AHD/2007 SMITABEN S.PATEL VS. ASST.CIT BLOCK PERIOD - 1.4.90 TO 25.7.2000 - 17 - INK) AND DETAILS OF ON-MONEY CASH RECEIVED (NOTED IN PENCIL). THE AMOUNTS WERE IN CODED LANGUAGE AND THREE ZEROS ARE OMITTED. IN THIS CONNECTION, A QUESTION WAS ASKED AND IN REP LY SHRI SUBODH PATEL HAS EXPRESSED HIS UNAWARENESS AND TOLD THAT H E WAS NOT ABLE TO PROVIDE ANY EXPLANATION. HOWEVER, THE ALLEGATIO N OF THE AO WAS THAT IN THE SAID ANNEXURE A-22, THE NOTINGS WER E IN THE HANDWRITING OF SHRI SUBODH PATEL. THE DENIAL OF T HE KNOWLEDGE OF THE ENTRIES IN THE SAID BOOK ALTHOUGH IN HIS HANDWR ITING WAS THE NON-CO-OPERATIVE ATTITUDE OF THE ASSESSEE. THE BO OK WAS FOUND UNDER CONTROL AND IN POSSESSION OF SHRI SUBODH PATE L. ACCORDING TO AO, ANNEXURE A-22 HAD CONTAINED INCRIMINATING NO TING OF RECEIPT OF ON-MONEY. THE AO HAS REPRODUCED THE E XTRACT OF SOME OF THE PAGES OF A-22. THE EXTRACT WAS IN RE SPECT OF CERTAIN PLOTS AND THE AO HAD COMPUTED THE AMOUNT OF ON-MON EY AFTER DECODING THE FIGURES NOTED IN THOSE FULL-SCAPE PAPE R. SEVERAL INSTANCES OF CERTAIN PLOTS WERE QUOTED BY THE AO, S UCH AS, PLOT NO.10 ALLEGED TO BE SOLD TO HASMUKHBHAI B.PAREKH AN D THE ON- MONEY COMPUTED WAS INFERRED TO BE RS.3,30,000/-. THERE WAS AN ANOTHER MENTION OF PLOT NO.12/A IN THE NAME OF PRA VEENABEN B.JALA AND THE ON-MONEY COMPONENT WAS TAKEN AT RS .2,63,250/-. THERE ARE SEVERAL SUCH INSTANCES NEED NOT TO BE MEN TIONED KEEPING BREVITY IN MIND. BASED UPON THE DETAILED DISCUSSI ON AND AFTER SCRUTINIZING PAGES NO.1/28 TO PAGE 40 OF ANNEXURE A -3 AND ANNEXURE A-22 THE AO HAS SUMMARIZED IN THE TABULATI ON FORM THE PLOT NUMBER, AREA OF THE PLOT, RATE PER SQUARE FOOT AND THE IT(SS)A NO.43/A HD/2006 & IT(SS)A NO.153/AHD/2007 SMITABEN S.PATEL VS. ASST.CIT BLOCK PERIOD - 1.4.90 TO 25.7.2000 - 18 - COMPONENT OF THE ON-MONEY. THE TOTAL OF THE ENTI RE LIST WAS AMOUNTED TO RS.1,95,94,141/-. THE RELEVANT PORTION OF THE CONCLUSION OF THE ASSESSING OFFICER IS EXTRACTED BE LOW:- 7.3. THE LENGTHY BUT ALMOST HOLLOW EXPLANATION O F THE ASSESSEE HAS BEEN CAREFULLY CONSIDERED. AS CAN BE SEEN FROM THE BODY OF THE ORDER, AFTER SHIFTING THROUGH THE SEIZED MATERIAL A ND IN DEPTH EXAMINATION DURING THE COURSE OF POST SEARCH PROCEE DINGS AND DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AMO UNT OF ON MONEY OF RS.1,95,94,141/- WORKED OUT. DESPITE AMPL E AND ADEQUATE OPPORTUNITY, THE ASSESSEE COULD NOT ADDUCE ANY COGENT GENUINE AND CORROBORATIVE EVIDENCE TO REBUT THE FIN DING GIVEN ABOVE. IN FACT, THE ASSESSEE OR HER HUSBAND NOT DE NIED TOTALLY AT THE TIME OF SEARCH OR AFTERWARDS THAT ON MONEY HAS BEEN RECEIVED. THE ELABORATE PRECEDING DISCUSSION AND THE RECORDIN G OF NOTINGS BY SHRI SUBODHBHAI S.PATEL IN HIS OWN HANDWRITING P ROVE BEYOND DOUBT THAT THE ON MONEY HAS BEEN RECEIVED BY THE AS SESSEE ONLY THROUGH HER HUSBAND SHRI SUBODH S.PATEL. THE ASSES SEE HAS MADE A VAIN ATTEMPT TO SHY AWAY FROM AN INEVITABLE CONSE QUENCE BY ALLEGING THAT THE DEPARTMENT IS TRYING TO ACT HIGH HANDEDLY BY BASING ITS FINDINGS ON SURMISES AND CONJECTURES. T HE DEPARTMENT HAS SQUARELY DISCHARGED ITS ONUS OF PROVING UNACCOU NTED ON MONEY RECEIPT BY THE ASSESSEE IN THE SUNRISE COMPLE X BY PLACING RELIANCE ON PROXIMATE RELEVANT EVIDENCE SEIZED DURI NG THE COURSE OF SEARCH. FURTHER, NO DETAILS OF DEDUCTIBLE EXPEN SES HAVE BEEN PUT FORTH BY THE ASSESSEE. IN VIEW OF THE SAME AD EARLIER DISCUSSION REGARDING LEGAL POSITION, ENTIRE ON MONEY RECEIPTS ARE TREATED AS INCOME OF THE ASSESSEE. IN THE ABSENCE OF SATISFAC TORY EXPLANATION ON THE PART OF THE ASSESSEE WITH COGENT DOCUMENTARY EVIDENCE AND FIRM FOOTED FINDING BY THE DEPARTMENT AGAINST THE A SSESSEE, THE AMOUNT OF RS.1,95,94,141/- IS TREATED AS UNDISCLOSE D INCOME OF THE ASSESSEE AND BROUGHT TO TAX FOR THE BLOCK PERIOD. IT(SS)A NO.43/A HD/2006 & IT(SS)A NO.153/AHD/2007 SMITABEN S.PATEL VS. ASST.CIT BLOCK PERIOD - 1.4.90 TO 25.7.2000 - 19 - [C] REGISTERS, BOOKS OF ACCOUNTS, LOOSE-PAPERS, NO TE-BOOKS, RECEIPT BOOKS MARKED AS ANNEXURE-A IN RESPECT OF SUNRISE FREEHOLD PLOTS OF M/S.SMITAL LAND DEVELOPERS WAS S EIZED FROM HOTEL GRG BARODA. THE SEIZED MATERIAL HAS NOT BEEN DISCUSSED BY THE ASSESSING OFFICER IN THE CONTEXT OF THE ON-MON EY TAXED, BUT SIMPLY REFERRED FOR THE PURPOSE THAT THE REGULAR DO CUMENTS AOBUT THE RUNNING OF THE BUSINESS WERE ALSO SEIZED DURING SEARCH OPERATION. 9. THIS ADDITION OF RS.1,95,94,141/- ON ACCOUN T OF ON-MONEY RECEIPTS WAS CHALLENGED BEFORE LD.CIT(A). BEFORE LD.CIT(A), IT WAS PLEADED THAT M/S.ASHISH ENTERPRISES WERE THE OWNER OF THE LAND. THERE WAS AN AGREEMENT BY THE ASSESSEE WITH M/S.ASHISH EN TERPRISES ACCORDING TO WHICH THE ON-MONEY RECEIVED WAS TO BE TRANSFER RED TO THE OWNERS. HOWEVER, IT IS WORTH TO MENTION THAT THE SAID AGREE MENT IN ORIGINAL WAS NOT AVAILABLE, HENCE IT WAS NOT PRODUCED BEFORE LD. CIT(A). THE CLAIM OF THE ASSESSEE WAS THAT A PORTION OF THE ON-MONEY O NLY UPTO 5 TO 10% WAS TO BE RETAINED BY THE ASSESSEE AND DUE TO THIS REASON, HUSBAND OF THE ASSESSEE SHRI SUBODH PATEL HAD OFFERED RS.6 LACS ON LY. IT WAS ALSO PLEADED THAT SHRI ANIL THAKKER, PARTNER OF ASHISH E NTERPRISES WAS NOT CROSS-EXAMINED BY THE ASSESSEE. AN ALTERNATE PLEA HAS ALSO BEEN RAISED THAT THE ON-MONEY BEING TRADING RECEIPT, THEREFOR E ONLY PROFIT SHOULD BE TAXED. THEREFORE, IT WAS ARGUED THAT ONLY A PERCEN TAGE OF THE PROFIT WAS TO BE ESTIMATED AND NOT THE ENTIRE AMOUNT OF ON-MO NEY SHOULD BE SUBJECTED TO TAX. CASE LAWS RELIED UPON WAS, S.C. KOTHARI VS. CIT 82 ITR 794 (SC), ABHISHEK CORPORATION 63 TTJ 61, AGRAWAL M OTORS 68 ITD IT(SS)A NO.43/A HD/2006 & IT(SS)A NO.153/AHD/2007 SMITABEN S.PATEL VS. ASST.CIT BLOCK PERIOD - 1.4.90 TO 25.7.2000 - 20 - 407. IT WAS ALSO ARGUED THAT THE ASSESSEE WAS MERE LY A DEVELOPER AND THE AMOUNT COLLECTED ON ALLOTMENT OF PLOT WAS PASSED ON TO THE LAND OWNERS/BANAKHAT HOLDERS. IT WAS ALSO INFORMED THAT AS PER THE FIVE AGREEMENTS ENTERED INTO BY THE ASSESSEE ON 24.02.19 94 WITH M/S.ASHISH ENTERPRISES THE ASSESSEE WAS REQUIRED TO PAY A CONS IDERATION FOR DEVELOPMENT RIGHTS OF RS.93,58,972. THERE WAS A RE FERENCE OF AN ANOTHER AGREEMENT STATED TO BE EXECUTED ON A STAMP PAPER OF RS.20/- ACCORDING TO WHICH THE ASSESSEE WAS REQUIRED TO PAY AN ALLEGED S UM OF RS.1.56 CRORES OF ON-MONEY IN FOUR EQUAL INSTALLMENTS OF RS.39 L ACS AND THE DETAILS OF THE INSTALLMENTS WERE INFORMED AS UNDER:- AMOUNT DATE RS.39,00,000 17/7/94 RS.39,00,000 25/10/94 RS.39,00,000 30/1/95 RS.39,00,000 10/2/95 THE CLAIM OF THE ASSESSEE WAS THAT THE SAID FOUR IN STALLMENTS WERE PAID TO SHRI PANERI, PARTNER OF M/S.ASHISH ENT ERPRISES. 9.1. IN RESPECT OF THE IMPUGNED AGREEMENT, THE LD .CIT(A) HAS TAKEN AN ACTION AND SENT THE ISSUE BACK TO THE AO FOR EXAMIN ATION OF THE ALLEGED AGREEMENT. BUT IT WAS NOTED BY THE REVENUE AUTHOR ITIES THAT THE SAID AGREEMENT IN ORIGINAL WAS NEVER PRODUCED . ON THE OTHER HAND, IT(SS)A NO.43/A HD/2006 & IT(SS)A NO.153/AHD/2007 SMITABEN S.PATEL VS. ASST.CIT BLOCK PERIOD - 1.4.90 TO 25.7.2000 - 21 - REVENUE HAS INFORMED THAT SHRI ANIL THAKKER, PARTNE R M/S.ASHISH ENTERPRISES HAD CATEGORICALLY DENIED TO HAVE RECEIV ED ANY ON-MONEY FROM THE ASSESSEE. REPORT OF THE AO WAS ALSO COMMU NICATED TO THE ASSESSEE. AN OBJECTION OF THE ASSESSEE WAS THAT TH E WORKING OF RS.1,95,94,141/- WAS INCORRECT AND THE CORRECT SHOU LD HAVE BEEN RS.1,62,92,400/-. THE CONTENTION WAS THAT OUT OF RS.1,62,92,400/-, THE ASSESSEE HAD PAID A SUM OF RS.1,56,00,000/- TO M/S. ASHISH ENTERPRISES AS PER THE AGREEMENT CALLED SAMJODA KARAR DATED 24.0 2.1994. THE LD.CIT(A) HAS DISCUSSED THE CONNECTED FACTS AND THE OTHER CORRESPONDENCE IN THIS REGARD AND OPINED THAT SINCE THE EVIDENCE OF COLLECTION OF ON-MONEY WAS FOUND AT THE TIME OF S EARCH, BUT THERE WAS NO EVIDENCE SEIZED OF PASSING IT OVER TO M/S.ASHISH ENTERPRISES, THEREFORE, BY NOT DISCLOSING THE ON-MONEY THE ASS ESSEE WAS SHRINKING AWAY FROM THE RESPONSIBILITY OF PAYMENT OF LEGITIMA TE TAX. LD.CIT(A) HAS REFUTED THE CLAIM OF THE ASSESSEE THAT A SUM OF RS.1,56,00,000/- WAS PAID OVER AND ABOVE THE REGULAR CONSIDERATION IN FO UR EQUAL QUARTERLY INSTALMENTS OF RS.39,00,000/- AS PER THE AGREEMENT DATED 24.2.1994. LD.CIT(A) HAS DOUBTED THE SAID AGREEMENT BECAUSE TH E SAME WAS ONLY SIGNED BY S.N.PANERI AND NOT SIGNED BY OTHER PARTNE R SHRI ANIL THAKKER. ACCORDING TO LD.CIT(A), BOTH THE PARTIES, I.E. THE ASSESSEE AND M/S.ASHISH ENTERPRISES WERE GIVING CERTAIN DIFFERENT EVIDENCES AND IN THIS MANNER, BOTH THE PARTIES HAVE TRIED TO SHIELD EACH OTHER. LD.CIT(A) HAS HELD THAT SINCE IT WAS NOT PROVED CONCLUSIVELY THAT AN AMOUNT OF RS.1,56,00,000/- WAS ACTUALLY PASSED ON TO M/S.ASHISH ENTERPRISES, T HEREFORE IN THE LIGHT OF IT(SS)A NO.43/A HD/2006 & IT(SS)A NO.153/AHD/2007 SMITABEN S.PATEL VS. ASST.CIT BLOCK PERIOD - 1.4.90 TO 25.7.2000 - 22 - PROVISIONS OF SECTION 132(4A) OF THE IT ACT, THE AD DITION WAS CONFIRMED IN THE HANDS OF THE ASSESSEE. 9.2. AS FAR AS THE CORRECT AMOUNT WAS CONCERNED, THE CONTENTION OF THE ASSESSEE WAS THAT THE AMOUNT SHOULD BE RS.1,62,92,4 00/- INSTEAD OF RS.1,95,94,141/-. LD.CIT(A) HAS NOTED THAT ONLY A RELIEF OF RS.22,52,335/- COULD HAVE BEEN GIVEN OUT OF THE TOT AL ADDITION OF RS.1,96,04,441/-. THE LD.CIT(A) HAS CONCLUDED TH AT THE CALCULATION CAN BE EXAMINED BY THE AO AND IF THE CONTENTION IS FOUN D CORRECT, THEN AFTER GIVING THE DUE CREDIT ONLY THE NET ADDITION TO THE EXTENT OF RS.1,73,51,806/- WAS TO BE TAXED IN THE HANDS OF TH E ASSESSEE. WITH THESE OBSERVATIONS, THE GROUND WAS DISMISSED. 10. FROM THE SIDE OF THE APPELLANT, LD.AR MR.J.P.SH AH APPEARED. HE HAS INFORMED THAT THE HUSBAND OF THE APPELLANT IS A N ARCHITECT. BECAUSE OF HIS QUALIFICATION, HE HAS ONLY ENTERED INTO AN A GREEMENT WITH M/S.ASHISH ENTERPRISES ONLY FOR THE DEVELOPMENT TH E PROJECT. THEREFORE, ONLY THE DEVELOPMENT RIGHTS WERE GIVEN B Y THE BANAKHAT OWNERS; I.E. ASHISH ENTERPRISES. IN THE CASE OF A SHISH ENTERPRISES, AN ORDER U/S.158BD R.W.S. 158BC WAS MADE ON 29.08.2007 WHEREIN THE ON- MONEY RECEIPTS OF RS.1,56,00,000/- WAS TAXED ON PR OTECTIVE BASIS. HE HAS THEREFORE PLEADED THAT THE REVENUE DEPARTMENT H AS ACCEPTED THE FACT THAT A SUM OF RS.1,56,00,000/- WAS PASSED OVER BY T HE ASSESSEE TO THE SAID FIRM ON ACCOUNT OF THE ON-MONEY RECEIVED. EVEN THE FIRST APPELLATE AUTHORITY, AHMEDABAD VIDE AN ORDER DATED 21.02.2008 HAS TAKEN THE VIEW IT(SS)A NO.43/A HD/2006 & IT(SS)A NO.153/AHD/2007 SMITABEN S.PATEL VS. ASST.CIT BLOCK PERIOD - 1.4.90 TO 25.7.2000 - 23 - IN FAVOUR OF THE REVENUE. ON AN ENQUIRY FROM THE B ENCH, IT WAS INFORMED THAT THE ITAT B BENCH AHMEDABAD IN THE A PPEAL OF M/S.ASHISH ENTERPRISES BEARING IT(SS)A NO.56/AHD/20 08 (BLOCK PERIOD 1.4.1994 TO 25.07.2000) VIDE AN ORDER DATED 30-01-2 009 HAS HELD THAT THE TIME LIMIT PRESCRIBED IN SECTION 158BE APPLIES TO S ECTION 158BD AND, THEREFORE, FOLLOWING THE DECISION OF SPECIAL BENCH IN THE CASE OF MANOJ AGRAWAL 113 ITD 377 (DEL)[SB] HAS HELD THAT THE NOT ICE DATED 8.8.2005 ISSUED U/S.158BD WAS TIME-BARRED, THEREFORE FURTHE R HELD THAT THE ASSESSMENT FRAMED ON 29.08.2007 U/S.158BD R.W.S.158 BC WAS WITHOUT JURISDICTION AND VOID AB INITIO. THE SAID ASSESSME NT WAS QUASHED. 10.1. LD.AR HAS DRAWN OUR ATTENTION ON THE AGREEMEN T DATED 24.02.1994, COPY PLACED IN THE COMPILATION ON PAGES 44 ONWARDS. THE PARTY OF THE FIRST PART IN THE SAID AGREEMENT WAS F OUND TO BE THE ASSESSEE AS A PROPRIETOR OF SMITAL LAND DEVELOPERS. THE AGR EEMENT HAS BEEN SIGNED BY SMT.SMITABEN SUBODHBHAI PATEL, I.E. THE A PPELLANT ON ONE HAND AND ON THE OTHER HAND, IT WAS SIGNED BY THE PARTNER OF M/S.ASHISH ENTERPRISES AS A CONFIRMING PARTY NO.3. THE LD. AR HAS INFORMED THAT THERE WERE SIX PERSONS WHO WERE MADE PARTY OF THE S ECOND PART BEING THE OWNER OF THE LAND AND BANAKHAT HOLDER AND LATER ON THE SAID LAND WAS GIVEN FOR DEVELOPMENT TO OTHER PARTIES AND, THEREFO RE, THERE WAS AN ANOTHER CONFIRMING PARTY NO.2 NAMELY, M/S.LANDMAR K STRUCTURES. HOWEVER, THE LAST BANAKHAT HOLDER WAS THE FIRM M/S. ASHISH ENTERPRISES AND THEY WERE THE DE FACTO OWNER OF THE LAND. HOW EVER, LD.AR HAS PLACED STRONG RELIANCE ON AN ANOTHER AGREEMENT THAT TOO DATED IT(SS)A NO.43/A HD/2006 & IT(SS)A NO.153/AHD/2007 SMITABEN S.PATEL VS. ASST.CIT BLOCK PERIOD - 1.4.90 TO 25.7.2000 - 24 - 24.02.1994 WHICH WAS EXECUTED ON A STAMP PAPER OF RS.20/- AND WRITTEN IN GUJARATI LANGUAGE. ITS ENGLISH TRANSLATION WAS ALSO PLACED BEFORE US AND THROUGH WHICH LD.AR HAS EMPHASIZED THAT THE EX TRA-MONEY AMOUNTING TO RS.1,56,00,000/- WAS TO BE PAID BY SM ITAL LAND DEVELOPERS TO M/S.ASHISH ENTERPRISES WITHIN A PERIO D OF 12 MONTHS IN FOUR EQUAL QUARTERLY INSTALLMENTS OF RS.39,00,000/- EACH. THIS AGREEMENT WAS SIGNED BY ONE OF THE PARTNER SHRI S.N .PANERI OF ASHISH ENTERPRISES. 10.2. THEREAFTER, LD.AR HAS ALSO PLACED RELIANCE ON THE STATEMENT OF SHRI SUBODH PATEL WHICH WAS RECORDED ON 26.7.2000 AND VI DE QUESTION NOS.15 TO 18 HE HAS ANSWERED AS FOLLOWS:- Q.15. DO YOU HAVE ANY PROOF OF GIVING THIS CASH MENTIONED IN PAGE-64 TO M/S.ASHISH ENTERPRISE? ANS. THIS SUNRISE PROJECT WAS DEVELOPED BY M/S.SMI TAL LAND DEVELOPERS. WE HAD SOLD THE PLOTS OF LAND TO VARIO US PARTIES ON BEHALF OF M/S.ASHISH ENTERPRISE WHO WERE THE OWNERS OF LAND. WE HAD ONLY DEVELOPED INFRASTRUCTUR4E. WE HAD ENHANCE D INTO AGREEMENT WITH M/S.ASHISH ENTERPRISE THAT THE ON M ONEY RECEIVED BY US FROM VARIOUS PARTIES WILL BE TRANSFERRED TO T HEM. BUT PRESENTLY I AM NOT HAVING THAT COPY OF AGREEMENT. Q.16 DO YOU MEAN TO SAY YOU HAD NOT SHARED THE ON MONEY RECEIVED FROM VARIOUS PURCHASERS? ANS. I MIGHT HAVE GOT 5 TO 10% OF THE ON MONEY, WH ICH I HAD NOT ENTERED INTO OUR BOOKS. WE WOULD HAVE RECEIVED ABO UT RS.6 LACS IN CASH. IT(SS)A NO.43/A HD/2006 & IT(SS)A NO.153/AHD/2007 SMITABEN S.PATEL VS. ASST.CIT BLOCK PERIOD - 1.4.90 TO 25.7.2000 - 25 - Q.17 WHO ARE THE PERSONS INVOLVED IN M/S.ASHISH ENT ERPRISE? PLEASE GIVE THEIR ADDRESSES. ANS. M/S.ASHISH ENTERPRISES IS PARTNERSHIP FIRM. ITS PARTNERS ARE 1. ANIL KANTILAL THAKKAR, 2. SHRI SWARAJ N PANERI, 3. SMT.MAHER S PANERI (WIFE OF SHRI S.N.PANERI) THE ADDRESS OF M/S .ASHISH ENTERPRISES IS ACTUALLY 7 TH FLOOR IVORY TERRACE AND NOT STERLING CENTRE AS I STATED EARLIER. Q.18 WHO WAS THE MAIN WORKING PARTNER OF M/S.ASHISH ENT? WHO WAS AWARE OF THE SAID AGREEMENT BETWEEN YOU AND M/S .ASHISH ENTERPRISES REGARDING COLLECTION OF MONEY BY YOU AN D SUBSEQUENTLY PASSING IT TO M/S.ASHISH ENTERPRISES? ANS. THIS AGREEMENT WAS KNOWN TO BOTH SHRI ANIL THA KKAR AND SHRI SWARAJ PANERI. THE CASH MONEY WAS GIVEN BY ME TO BOTH THESE PERSONS IN THEIR OFFICE. 10.3. LD.AR MR.SHAH HAS THEREFORE VEHEMENTLY PLEA DED THAT ON THE VERY NEXT DAY OF THE SEARCH WHEN THE STATEMENT OF MR.SUB ODH WAS RECORDED, THEN HE HAS INFORMED THAT THE ON-MONEY RECEIVED W AS TRANSFERRED TO M/S.ASHISH ENTERPRISES. THE SAID STATEMENT OF MR.S UBODH HAS TO BE CONSIDERED AS TRUE AND CORRECT. THE BENCH HAS ENQ UIRED WHETHER THE SAID STATEMENT WAS CONFRONTED TO OTHER SIDE AND IN REPLY LD.AR HAS INFORMED THAT SHRI ANIL THAKKER, PARTNER, ASHISH ENTERPRISES WAS ALSO EXAMINED BUT HE HAS APPARENTLY DENIED ANY RECEIPT OF ON-MON EY. LD.AR HAS INFORMED THAT THE PASSING OVER OF THE CONSIDERATIO N, WHICH WAS RECEIVED AS PER THE AGREEMENT, WAS ONLY ACCEPTED. THEN LD .AR HAS DRAWN OUR ATTENTION ON A LETTER WHICH WAS NOTED BY THE AO ON PAGE NO.21 OF ASSESSMENT ORDER THROUGH WHICH ONE OF THE PARTNER O F M/S.ASHISH ENTERPRISES MR. S.N.PANERI HAS ACCEPTED THAT THE CA SH WAS HIS IT(SS)A NO.43/A HD/2006 & IT(SS)A NO.153/AHD/2007 SMITABEN S.PATEL VS. ASST.CIT BLOCK PERIOD - 1.4.90 TO 25.7.2000 - 26 - RESPONSIBILITY. THE INTENTION OF THE SAID PARTY WA S THUS CLEAR THAT THE CASH COMPONENT WAS THERE SHARE OF MONEY. 10.4. LD.AR HAS FURTHER ADVANCED HIS ARGUMENT THAT THE PARTNERS OF M/S.ASHISH ENTERPRISES WERE NOT CO-OPERATIVE WITH T HE ASSESSEE, HENCE THEY HAVE DENIED THE RECEIPT OF THE SAID ON-MONEY . RATHER, THIS FACT WAS MENTIONED TO THE REVENUE AUTHORITIES, WRITTEN S UBMISSION REFERRED PAGE 237/238 OF PAPER-BOOK, INFORMING THAT THERE WA S A DISPUTE AND A CIVIL SUIT WAS FILED. IT WAS ARGUED BY HIM THAT T HE ASSESSEE WAS REQUIRED TO MAKE A TOTAL PAYMENT OF RS.93,58,972/- BUT ASSES SEE ONLY PAID RS.67,45,000/- AND FOR THE BALANCE A CIVIL SUIT WAS FILED. MR.SHAH HAS PLEADED THAT MR.PANERI HAPPENED TO BE A WELL-KNOWN BUILDER OF BARODA AND WOULD NOT HAVE AGREED TO GIVE HIS LAND AT SUCH A LOW COST WHILE ON THE OTHER HAND THE ASSESSEE WAS ALLEGED TO HAVE EAR NED A HUGE AMOUNT OF RS.1,95,00,000/- APPROXIMATELY. HE HAS CONCLUDED H IS ARGUMENT BY STATING THAT WHEN THE SALE PRICE OF THE LAND WAS TA XED IN THE HANDS OF M/S.ASHISH ENTERPRISES, THEN THE UNACCOUNTED ON-MO NEY SHOULD ALSO HAVE BEEN TAXED IN THE HANDS OF THE LAND OWNERS. I T IS A COMMON KNOWLEDGE THAT BOTH THE AMOUNTS OUGHT TO HAVE BEEN TAXED IN THE HANDS OF THE LAND OWNER. IT WAS WRONG ON THE PART OF THE REVENUE DEPARTMENT TO TAX THE NON-WHITE MONEY ELSEWHERE I.E. IN THE HA NDS OF THE ASSESSEE. ONE OF THE PARTNER, MR.PANERI HAD RECEIVED THE FOUR INSTALLMENTS OF RS.39 LACS EACH AND THE SIGNATURE WAS VERY MUCH PRESENT O N THE SAID AGREEMENT WHICH WAS ALSO TEST VERIFIED. LD.AR HAS ALSO MEN TIONED THAT THE IT(SS)A NO.43/A HD/2006 & IT(SS)A NO.153/AHD/2007 SMITABEN S.PATEL VS. ASST.CIT BLOCK PERIOD - 1.4.90 TO 25.7.2000 - 27 - APPELLANT HAD MOVED FOR WAIVER OF PENALTY LEVIED U/ S.158BFA(2) BY INVOKING THE PROVISIONS OF SECTION 273A(4) OF IT AC T AND SUCCEEDED. 11. ON THE OTHER HAND, FROM THE SIDE OF THE REVENU E, LD.CIT-D.R. MR.D.P. GUPTA APPEARED AND STRONGLY SUPPORTED THE ORDERS OF THE REVENUE AUTHORITIES. HE HAS PLEADED THAT THE E VIDENCES OF EXISTENCE OF ON-MONEY WERE SEIZED DURING THE COURSE OF SEA RCH. THE APPELLANT HAS NOT DENIED THE FACT THAT THE ON-MONEY WAS TRA NSACTED AT THE TIME OF ALLOTMENT OF PLOTS. NOW THE QUESTION IS THAT IN W HOSE HANDS THE ON- MONEY WAS TO BE TAXED. ON THE BASIS OF THE EVIDEN CES WHICH WERE RECOVERED FROM THE POSSESSION OF THE ASSESSEE THE ON-MONEY WAS RIGHTLY TAXED IN THE HANDS OF THE ASSESSEE. THAT ON-MONEY WAS ASSESSED ON PROTECTIVE BASIS IN THE HANDS OF M/S.ASHISH EN TERPRISES. EVEN THAT ASSESSMENT ORDER DID NOT SURVIVE IN THE EYES OF LAW AND LATER ON IT WAS QUASHED BY THE RESPECTED TRIBUNAL ON TECHNICAL GROU NDS. IN RESPONSE TO THE WAIVER OF PENALTY AS CLAIMED BY THE LD.AR, M R.GUPTA, CIT-DR HAS PLEADED THAT THE SAID REVISONARY ORDER WAS NOT MAIN TAINABLE BECAUSE THE APPELLATE PROCEEDINGS WERE PENDING BEFORE THE ITAT AS IS PRESENTLY APPARENT, THEREFORE NO REVISONARY ORDER SHOULD HAVE BEEN PASSED BY THE LD.COMMISSIONER DURING THE PENDENCY OF AN APPEAL BE FORE THE TRIBUNAL. ACCORDING TO LD.DR MR.GUPTA THAT REVISONARY ORDER I S BAD IN LAW. ON MERITS HE HAS FURNISHED A WRITTEN SUBMISSION AS FOL LOWS:- NO.CIT(ITAT-IV)/AHD/APPEAL/2012-13 DATE : 30. 04.2012 THE HONBLE MEMBERS, INCOME-TAX APPELLATE TRIBUNAL IT(SS)A NO.43/A HD/2006 & IT(SS)A NO.153/AHD/2007 SMITABEN S.PATEL VS. ASST.CIT BLOCK PERIOD - 1.4.90 TO 25.7.2000 - 28 - D BENCH AHMEDABAD NAME OF THE ASSESSEE : SMT.SMITABEN S.PATEL APPEAL NO. : IT(SS)43/AHD-2008 AND IT(SS)153/AHD-2 007 THE APPEAL UNDER REFERENCE IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE ID. CIT(APPEALS) PASSED WITH REFERENCE TO TH E BLOCK ASSESSMENT ORDER IN THE CASE OF THE APPELLANT FOR THE BLOCK PE RIOD 1.4.90 TO 25.7.2000. GROUND NO.4 OF THE APPEAL (IT(SS)43/AHD-2006) RELATES TO THE ADDITION OF RS.1,96,04,141/- AS UNACCOUNTED INC OME OF THE ASSESSEE, BEING 'ON-MONEY' RECEIVED BY THE APPELLAN T FROM THE PROJECT SUNRISE FREEHOLD PLOTS. THIS WAS MADE ON THE BASIS OF SPECIFIC ENTRIES FOUND IN THE SEIZED DOCUMENTS WHICH ARE DISCUSSED I N DETAIL IN THE ASSESSMENT ORDER AND TABULATED IN PAGE 36, 37 OF TH E AO'S ORDER. DURING THE COURSE OF LAST HEARING CONDUCTED IN THE ABOVE MENTIONED APPEAL ON 12.1.2012 YOUR HONOUR'S HAVE OB SERVED AS UNDER:- 'THE LD.DR SEEKS TIME TO FILE ORDER OF IT AT IN THE CASE OF ASHISH ENTERPRISE. THE LD.DR IS ALSO DIRECTED TO FI LE WRITTEN REPLY FROM THE DEPARTMENT REGARDING THE STAND OF TH E DEPARTMENT, ON THE ORDER PASSED BY THE CIT(1), BARO DA U/S. 264 DATED 8.7.2010 IN THE CASE OF SMITABEN S. PATEL . CASE IS ADJOURNED TO 09.02.2012. PARTIES INFORMED.' 2. WITH REGARD TO THE ABOVE, IT IS SUBMITTED THAT I N THE BLOCK ASSESSMENT PROCEEDINGS THE ON MONEY RECEIPTS ON SAL E OF PLOTS OF LAND HAVE BEEN TAXED IN THE HANDS OF SMT. SMITABEN S.PATEL ON SUBSTANTIVE BASIS. THESE ADDITIONS ARE BASED UPON T HE EVIDENCES OF ON MONEY RECEIPT FOUND AND SEIZED DURING THE COURSE OF SEARCH AT THE ASSESSEE'S PREMISES AND ADMISSION OF SUCH ON MONEY RECEIPTS IN THE STATEMENT RECORDED U/S. 132(4) OF THE IT. ACT OF SH RI SUBODH S. PATEL, A POWER OF ATTORNEY HOLDER OF ASSESSEE. 3. SUBSEQUENTLY, THESE ADDITIONS WERE ALSO CONFIRME D VIDE ORDER OF THE CIT(A) IN THE CASE OF ASSESSEE. THEREAFTER, THE A.O . LEVIED THE PENALTY U/S. 158BFA(2) OF THE IT. ACT ON THE AFORESAID ADDI TIONS AND THE PENALTY ORDER WAS ALSO CONFIRMED BY THE LD. CIT(A) VIDE ITS APPELLATE ORDER NO.CAB/11-59/09-10 DATED 24.12.2009. HOWEVER, THE CIT-I, BARODA ON THE REVISION APPLICATION RECEIVED FROM TH E ASSESSEE VIDE ITS IT(SS)A NO.43/A HD/2006 & IT(SS)A NO.153/AHD/2007 SMITABEN S.PATEL VS. ASST.CIT BLOCK PERIOD - 1.4.90 TO 25.7.2000 - 29 - OFFICE ORDER PASSED U/S. 264 OF IT. ACT DATED 8.7.2 010 QUASHED THE PENALTY SO LEVIED BY THE A.O. STATING AS UNDER 'RS.1,56,00,000 IS UNDISCLOSED INCOME OF M/S. ASHIS H ENTERPRISE AS HAS BEEN HELD BY THE DEPARTMENT AND H ENCE IT CANNOT BE SIMULTANEOUSLY THE UNDISCLOSED INCOME OF SMT. SMITABEN PATEL. I, THEREFORE, DIRECT THAT PENALTY L EVIED IN RESPECT OF THE ON MONEY RECEIVED OF RS.1,56,00,000 IS TO BE DELETED (REF. PARA 4.3 OF ORDER U/S. 264)'. 4. HERE IT IS ALSO SUBMITTED THAT THE CIT-I, BARODA VIDE ITS ORDER U/S. 264 HAS QUASHED THE PENALTY LEVIED BY THE A.O. IN T HE CASE OF ASSESSEE AND NOT THE ADDITION OF ON MONEY RECEIPTS MADE IN THE BLOCK ASSESSMENT PROCEEDINGS IN THE HANDS OF ASSESSEE. TH E PENALTY PROCEEDINGS U/S. 158BFA(2) ARE ALTOGETHER DIFFERENT FROM THE BLOCK ASSESSMENT PROCEEDINGS U/S. 158BC UNDER THE INCOME TAX ACT. THUS ANY OBSERVATION MADE BY CIT-I, BARODA IN THE REVISI ONARY ORDER PASSED U/S. 264 IN RESPECT OF PENALTY PROCEEDINGS U/S. 158 BFA ARE NOT BINDING UPON THE QUANTUM APPEAL PENDING IN THIS CASE. FOR L EVYING THE PENALTY U/S. 158BFA REQUISITES OF THE SAID SECTIONS OF IT. ACT ARE DIFFERENT FROM THE REQUISITES FOR MAKING THE ADDITION U/S. 158BC O F IT. ACT. IT SO HAPPENS THAT IN A NUMBER OF CASES ADDITIONS ARE CON FIRMED BUT PENALTY IS DELETED BECAUSE OF THE DIFFERENT BASIS OF INVOKI NG TWO DIFFERENT PROVISIONS OF IT. ACT. HENCE ANY FINDINGS GIVEN IN REVISIONARY ORDER PASSED U/S. 264 OF THE IT. ACT HAS NO BEARING AT AL L ON THE QUANTUM APPEAL PENDING BEFORE THE HON'BLE BENCH ON THE ISSU E OF ON-MONEY RECEIPT. 5. FURTHER IT IS ALSO SUBMITTED THAT ASSESSEE HAD P REFERRED APPEAL BEFORE THE HON'BLE ITAT, AHMEDABAD ON 5.3.2010 AS A GAINST THE ORDER OF CIT(A) CONFIRMING THE PENALTY LEVIED BY THE A.O. U/S. 158BFA(2) OF IT. ACT. THUS WHILE PASSING THE REVISIONARY ORDER U /S. 264 BY THE CIT-I, BARODA ON 8.7.2010 THE APPELLATE PROCEEDINGS WERE P ENDING BEFORE THE HON'BLE ITAT AND ACCORDINGLY, THE REVISION PETI TION PENDING BEFORE THE CIT-I, BARODA WAS NOT MAINTAINABLE WHICH OUGHT TO HAVE BEEN REJECTED IN VIEW OF THE SPECIFIC PROVISION OF SECTI ON 264(4)(C) OF IT. ACT. THUS CIT-I, BARODA OUGHT NOT TO HAVE PASSED THE ORD ER U/S. 264 OF IT. ACT AS THE APPELLATE PROCEEDINGS WERE PENDING BEFOR E HON'BLE ITAT ON THE DATE OF PASSING THE SAID ORDER I.E. 8.7.2010. T HUS THE ORDER PASSED U/S. 264 ITSELF IS NOT MAINTAINABLE AND THE SAME IS BAD IN LAW. THEREFORE THE ORDER U/S. 264 WHICH IS BAD IN LAW CA NNOT BE RELIED UPON IT(SS)A NO.43/A HD/2006 & IT(SS)A NO.153/AHD/2007 SMITABEN S.PATEL VS. ASST.CIT BLOCK PERIOD - 1.4.90 TO 25.7.2000 - 30 - TO DRAW ANY INFERENCE WHILE DECIDING THE ISSUE OF Q UANTUM APPEAL ON MERITS. RELIANCE IS PLACED ON THE FOLLOWING CASES. SUPER SPINNING MILLS LTD VS. CIT (2010) & TAXMAN. C OM 251 (MAD) KADRI MILLS (COIMBATORE) LTD VS. CIT(2003) 1 31 TAXMAN 215 (MAD) HINDUSTAN AERONAUTICS LTD V/S. CIT 243 ITR 808 (SC) 6. AS DESIRED A COPY OF THE ORDER OF HON'BLE ITAT P ASSED IN IT(SS)56/AHD/2008 DATED 30.1.2009 IN THE CASE OF M/ S. ASHISH ENTERPRISE IN WHOSE CASE BLOCK ASSESSMENT ORDER U/S . 158BD PASSED BY THE A.O. IS ENCLOSED FOR KIND REFERENCE.. IT IS WORTH TO MENTION THAT THE HON'BLE ITAT, 'B' B ENCH, AHMEDABAD IN ITS ORDER IN IT(SS)56/AHD/2008 DATED 3 0.1.2009 HAS QUASHED THE BLOCK ASSESSMENT ORDER IN THE CASE OF M /S. ASHISH ENTERPRISE FOR THE REASON THAT NOTICE ISSUED BY THE A.O. U/S. 158BD IN THAT CASE WAS TIME BARRED (REF PARA 8 AT PAGE NO.6) . THEREFORE, THE ADDITIONS MADE ON ACCOUNT OF ON MONEY RECEIPT WAS N OT DECIDED ON MERITS AS THE ASSESSMENT ORDER ITSELF WAS QUASHED O N TECHNICAL GROUNDS. THUS THERE IS NO FINDING OF THE HON'BLE IT AT IN THE AFORESAID CASE AS TO THE TAXABILITY OF ON MONEY RECEIPTS IN T HE HANDS OF M/S. ASHISH ENTERPRISES OR IN THE CASE OF ASSESSEE. IT W ILL NOT BE OUT OF PLACE TO MENTION THAT THE ADDITION OF MONEY RECEIPT S WAS MADE ONLY ON PROTECTIVE BASIS IN THE CASE OF M/S. ASHISH ENTERPR ISE. 7. THE IMPORTANT ISSUES AND FINDINGS HAVING A BEARI NG ON THIS GROUND OF APPEAL ARE MENTIONED BELOW: EVIDENCE REGARDING RECEIPT OF 'ON-MONEY' BY THE ASS ESSEE. I. SHRI SUBODHBHAI S. PATEL, THE APPELLANTS HUSB AND AND POWER OF ATTORNEY, IN HIS STATEMENT RECORDED ON 26.7.2000 U/ S. 132(4) HAS ADMITTED THAT ON MONEY WAS RECEIVED BY THE APPE LLANT (ANS. TO Q.NO.14, ASSESSMENT ORDER PAGE 17). II ENTRIES IN THE SEIZED DOCUMENTS (ANNEXURE A- 22) DISCUSSED IN ASSESSMENT ORDER ON PAGE 24 TO 34 CLEARLY INDICATE THAT 'ON- MONEY' WAS RECEIVED BY THE APPELLANT FROM THE PROJE CT UNDER CONSIDERATION. IT(SS)A NO.43/A HD/2006 & IT(SS)A NO.153/AHD/2007 SMITABEN S.PATEL VS. ASST.CIT BLOCK PERIOD - 1.4.90 TO 25.7.2000 - 31 - III. THESE DOCUMENTS (ANNEXURE A-22) WERE SEIZED FROM THE SEARCH PREMISES WHICH CLEARLY INDICATE THAT PART OF THE SA LE CONSIDERATION FOR THE PLOTS RECEIVED IN CASH AND AL SO THE TOTAL AMOUNT RECEIVED BY THE APPELLANT FOR EACH PLOT. IV. BASED ON THE ENTRIES FOUND IN THE SEIZED DOCU MENTS, THE ASSESSING OFFICER HAS QUANTIFIED THE TOTAL AMOUNT A S ON MONEY RECEIVED BY THE APPELLANT (TABLE IN PAGE 36 OF ASSE SSMENT ORDER) 8. ASSESSEE, ALONGWITH HER HUSBAND AND POWERR OF ATTORNEY HAVING TOTAL CONTROL OF THE PROJECT. ALTHOUGH THE APPELLANT CLAIMS THAT SHE WAS ONLY A D EVELOPER AND NOT THE ACTUAL LAND OWNER, THE EVIDENCES GATHER ED DURING THE SEARCH CLEARLY PROVES THAT THE APPELLANT ALONGWITH HER HUSBAND AND POWER OF ATTORNEY (POA) SHRI SUBODHBHAI S. PATEL WE RE IN TOTAL CONTROL OF THE PROJECT. THIS IS EVIDENCED FROM - (I) THE DEVELOPMENT AGREEMENT (PAGE 55 TO 60 OF AS SESSEE'S PAPER BOOK) IN PARA 6,7, AND 9 CLEARLY INDICATES TH AT THE APPELLANT WAS IN ABSOLUTE CONTROL OF THE PROJECT. (II) THE ABOVE AGREEMENT STATES THAT THE APPELLAN T HAD ALL AUTHORITY TO EXECUTE AGREEMENT FOR EFFECTING SALES, EXECUTE S ALE DEEDS IN FAVOUR OF THE MEMBERS OF THE SOCIETY. IT ALSO EMPOW ERED THE ASSESSEE TO EXECUTE AGREEMENT TO SELL, TO ACCEPT AM OUNT OF MONEY / FUNDS FROM THE MEMBERS AND TO ISSUE RECEIPT S ETC. (III) SHRI ANIL THAKKER, MANAGING PARTNER OF ASHISH ENTERPRISES (LAND OWNERS) HAS CLEARLY STATED IN HIS STATEMENT THAT TH E APPELLANT WAS AT LIBERTY TO MAKE THE DEVELOPMENT THEY DESIRE FOR A SPECIFIED PRICE (ANSWER TO Q.NO.5 PAGE 19 OF ASSESS MENT ORDER). 9. WHETHER MONEY WAS PAID BY THE APPELLANT TO ASH ISH ENTERPRISE AS CLAIMED BY THE APPELLANT: THE AGREEMENT DATED 24.2.94 BETWEEN THE APPELLANT A ND ASHISH ENTERPRISE IS CLEARLY AN AFTERTHOUGHT BY THE ASSESSEE TO AVOID TAX. THE GENUINENESS OF THIS DOCUMENT IS VERY MUCH DOUBTFUL. THIS IS CLEARLY ESTABLISHED FROM THE FOLL OWING FACTS:- IT(SS)A NO.43/A HD/2006 & IT(SS)A NO.153/AHD/2007 SMITABEN S.PATEL VS. ASST.CIT BLOCK PERIOD - 1.4.90 TO 25.7.2000 - 32 - I. THE ASSESSEE HAS ONLY PRODUCED A COPY OF THE AG REEMENT DATED 24.2.94 AND THE ORIGINAL DOCUMENT HAS NEVER B EEN FURNISHED FOR INSPECTION, EVEN AFTER REPEATED OPPOR TUNITIES. II. THE AGREEMENT IS ONLY SIGNED BY THE APPELLANT AND NOT BY BOTH THE PARTIES, WHICH IS THE MAIN REQUISITE OF ANY CON TRACT AS PER THE INDIAN CONTRACT ACT. III. IN FACT, THE SIGNATURE OF MR. PANERI FOUND ON THE COPY OF THE RECEIPTS IS V VERY DOUBTFUL. IT IS SEEN THAT T HE SIGNATURE IS MADE ON 'S M PANERI' WHEREAS THE ACTUAL NAME OF MR. PANERI IS S N PANERI. THE SIGNATURE IS J CLEARLY DIFFEREN T FROM THE ORIGINAL. THIS IS ALSO EVIDENT FROM PAGE 13 OF I ASSESSEE'S PAPER BOOK DATED 5.7.2010 AND PAGE 140 OF ASSESSEE' S PAPER BOOK DATED 29.4.2009. IV. THE ORIGINAL AGREEMENT HAS NEVER BEEN FURNISHE D. AS PER SECTION 114 OF INDIAN EVIDENCE ACT, THE COURT MAY PRESUME THAT - THE EVIDENCE WHICH COULD NOT BE PRODUCED WOULD, I F PRODUCED, BE UNFAVORABLE TO THE PERSONS WHO WITHHOL DS IT. AS THE ASSESSEE COULD NOT PRODUCE THE AGREEMENT IN ORIGINAL, AN ADVERSE INFERENCE IN TERMS OF SECTION 114 OF THE INDIAN EVIDENCE ACT IS TO BE DRAWN TO THE EFFECT THAT HAD THE AGREEMENT BEEN PRODUCED, THE SAME WOULD HAVE GONE AGAINST THE INTEREST OF THE ASSESSEE. [CIT V MOTOR GENERAL FINANCE LTD. 122 TAXMAN 447 (DELHI)]. V. IT IS ESTABLISHED LAW THAT THE A GENUINENESS A ND CORRECTNESS OF A DOCUMENT HAVE TO BE PROVIDED BY THE PERSON WHO BELI EVES UPON IT, BY COGENT AND DIRECT EVIDENCE (ASHOKKUMAR UTAMCHAND SHAH VS. PATEL MOHD. ASMAL CHANCHAND, AIR 1999 GUJ. 108). BUT IN THE INSTANT CASE THE ASSESSEE HAS FAILED TO LAY ANY VALID EVIDENCE TO SUBSTANTIATE HER CLAIM THAT THE ' ON- ! MONEY' COLLECTED WAS PAID TO ASHISH ENTERPRISES. EVEN THE ORIGINAL AGREEMENT HAS NEVER BEEN FURNISHED. VI. SHRI ANIL THAKKER, MANAGING PARTNER OF ASHISH ENTERPRISES IN HIS STATEMENT HAS CLEARLY STATED THAT M/S.ASHI SH ENTERPRISES DID NOT RECEIVED ANY ADDITIONAL AMOUNT FROM M/S. SM ITAL LAND DEVELOPERS OVER AND ABOVE THE AMOUNT AS PER THE FIV E AGREEMENTS ENTERED ON 24.2.94. (REFER PAGE 19. 20 O F AO'S ORDER). IT(SS)A NO.43/A HD/2006 & IT(SS)A NO.153/AHD/2007 SMITABEN S.PATEL VS. ASST.CIT BLOCK PERIOD - 1.4.90 TO 25.7.2000 - 33 - VII. ALTHOUGH THE APPELLANT'S CONTENTION THAT THE AMOUNT OF RS. 1,56,00,000/- WAS RECEIVED BY MR. PANERI, DURING TH E COURSE OF INVESTIGATION, INSPITE OF REPEATED OPPORTUNITIES, M R. PANERI DID NOT RESPOND TO THE SUMMONS / NOTICES OF THE AO TO C ONFIRM THAT THE AMOUNT AS CLAIMED BY THE APPELLANT WAS ACTUALLY RECEIVED BY HIM. VIII. IT IS ALSO IMPORTANT TO NOTE THAT WHEN THE A SSESSEE WAS UNABLE TO MAKE PAYMENTS TO M/S. ASHISH ENTERPRISES, THE LA ND OWNERS, AS PER THE ORIGINAL AGREEMENT BEFORE 25.2.95, IT IS SURPRISING THAT THE ASSESSEE HAS CLAIMED TO HAVE ACTUALLY PAID RS. 1,56,00,000/- OVER AND ABOVE THE AGREEMENT PRICE BE FORE 10.2.95 TO M/S. ASHISH ENTERPRISES. IX. WHEN THE ASSESSEE CLAIMS THAT ALL THE PLOTS WE RE NOT SOLD OUT, THE SOURCES OF RS.1.56 CRORES WHICH IS CLAIMED TO H AVE BEEN PAID TO M/S. ASHISH ENTERPRISES BEFORE 10.2.95 WITH IN ONE YEAR OF LAUNCHING THE PROJECT SEEMS DOUBTFUL. X. THE FACT THAT THE APPELLANT HAS NOT PAID THE A MOUNT OF RS.1,56,00,000/- TO MR. PANERI IN FOUR INSTALLMENTS BEFORE 10.2.95 ALSO GETS PROVED BY THE FACT THAT IN THE CO MPROMISE DEED ENTERED WITH ASHISH ENTERPRISES IN THE YEAR 19 98, THE ASSESSEE HAS CONFIRMED THAT SHE HAS PAID ONLY RS.67,45,OO/- BY 25.2.95. (PAGE 4 OF ASSESSEE'S PAPER BOOK DATED 5.7.2010). THIS CLEARLY CONTRADICTS THE CLAIM OF THE ASSESSEE. 10. THE EVIDENCES FOUND IN THE SEIZED BOOKS PARTIC ULARLY THE ENTRIES IN A-3 AND A-22 AND THE FINDINGS NARRATED ABOVE CLE ARLY INDICATES THAT THE ASSESSEE DID COLLECT ADDITIONAL AMOUNT IN CASH AS ON MONEY ON THE SALE OF PLOTS. IN THE CASE OF F IFTH AVENUE V. CIT, 319 ITR 127. KARNATAKA, (COPY ENCLOSED) IT HAS BEEN HELD THAT PRESUMPTION U/S. 132(4) AND SECTION 292C IS CL EARLY ATTRACTED AND WHEN DOCUMENTS BELONGING TO THE ASSES SEE WERE SEIZED FROM THE ASSESSEE, THE ONUS LIES ON THE ASSE SSEE TO PROVE THAT THE UNDISCLOSED MONEY WAS NOT RECEIVED B Y THEM. RELIANCE IS ALSO PLACED IN THE CASE OF SURENDRA M K HANDHAR V ACIT, 321 ITR 254, (BOM). ACCORDINGLY, THE TOTAL AMOUNT HAS BEEN COMPUTED ON THE BASIS OF ENTRIES FOUND IN THE SEIZED DOCUMENTS WHICH CLEARLY SHOWS THAT EXTRA CONSIDERAT ION WAS COLLECTED IN CASH BY ASSESSEE FROM THE SALE OF PLOT S. THE FACTS IT(SS)A NO.43/A HD/2006 & IT(SS)A NO.153/AHD/2007 SMITABEN S.PATEL VS. ASST.CIT BLOCK PERIOD - 1.4.90 TO 25.7.2000 - 34 - AND OTHER FINDINGS AS EXPLAINED IN PARA 3 ABOVE CLE ARLY SHOWS THAT THE ASSESSEE'S CLAIM THAT SHE HAS PAID RS.1.56 CRORES TO SHRI ASHISH KUMAR ENTERPRISES OVER AND ABOVE THE SA LE DEED PRICE IS ONLY AND AFTER THOUGHT WITH A CLEAR INTENT ION OF EVADING TAX. THIS IS FURTHER CONFIRMED FROM THE FACT THAT N O BODY FROM M/S. ASHISH ENTERPRISES HAS CONFIRMED THE RECEIPT O F THE ADDITIONAL AMOUNT OF RS.1.56 CRORES. THE ONLY EVIDENCE WHICH THE ASSESSEE HAS PRODUCED DURING THE COURSE OF INVE STIGATION / ASSESSMENT PROCEEDINGS IS A COPY OF AN AGREEMENT HA VING A NUMBER OF INFIRMITIES AS DISCUSSED ABOVE. THE CONTE NTION OF THE ASSESSEE IS ALSO NOT ACCEPTABLE IN VIEW OF THE CIRC UMSTANTIAL EVIDENCES. RELIANCE IS PLACED ON THE DECISION IN TH E CASE OF SUMATI DAYAL V. CIT, 214 ITR 801 (SO AND CIT V DURG A PRASAD MORE, 82 ITR 540 SC. IN VIEW OF THE ABOVE, THE ON-MONEY RECEIVED BY THE ASSESSEE SHOULD BE TAXED AS ITS UNACCOUNTED RECEIPT S AND THE ADDITION OF RS.1,96,04,1417- MADE BY THE ASSESS ING OFFICER AND CONFIRMED BY THE CIT(A) SHOULD BE SUSTA INED. YOURS FAITHFULLY, SD/- 30.4.12 (D. P. GUPTA) COMMISSIONER OF INCOME TAX, ENCL: AS ABOVE ITAT-IV, AHMEDABAD. 12. WE HAVE HEARD BOTH THE SIDES AT LENGTH. WE HAV E ALSO CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIES BELOW. WE HA VE ALSO EXAMINED THE CONTENTS OF THE PAPER-BOOK FILED BEFORE US. A SE ARCH U/S.132 OF THE IT ACT WAS CONDUCTED ON THE ASSESSEE ON 25/07/2000. AT THE TIME OF SEARCH, CERTAIN DOCUMENTS AND EVIDENCES WERE SEIZED . ON THE BASIS OF THOSE DOCUMENTS, AS ALREADY REFERRED HEREINABOVE WH ILE DISCUSSING THE ASSESSMENT ORDER, THE REVENUE DEPARTMENT HAS UNEART HED THE EXISTENCE OF ON-MONEY ON THE ALLOTMENT OF PLOTS IN RESPECT OF A DEVELOPMENT PROJECT KNOWN AS SUNRISE FREEHOLD PLOTS, BARODA. THE EXAMINATION OF IT(SS)A NO.43/A HD/2006 & IT(SS)A NO.153/AHD/2007 SMITABEN S.PATEL VS. ASST.CIT BLOCK PERIOD - 1.4.90 TO 25.7.2000 - 35 - PAGE NO.64 OF ANNEXURE A-3 AS ALSO ON EXAMINATION O F FULLSCAPE REGISTER MARKED AS ANNEXURE A-22, THE TRANSACTION O F ON-MONEY WAS FOUND TO BE NOT IN DISPUTE. THE DISPUTE IS THAT WH O HAD RETAINED/KEPT THE ALLEGED ON-MONEY? IN THIS REGARD, IT IS WORTH T O MENTION THAT A STATEMENT OF SHRI SUBODH PATEL, HUSBAND AS ALSO PO WER OF ATTORNEY HOLDER OF THE ASSESSEE, WAS RECORDED U/S.132(4) OF IT ACT ON 26.7.2000, I.E. ON THE NEXT DAY OF THE SEARCH. IN THAT STATE MENT VIDE QUESTION NO.14, HE HAS ANSWERED IN THE FOLLOWING MANNER:- 14. I WOULD LIKE TO REMIND YOU THAT THIS STATEMEN T IS RECORDED UNDER OATH AND IF YOU DO NOT SPEAK TRUTH OR TRY TO CONCEAL SOMETHING WHICH IS KNOWN TO YOU THEN YOU MAY BE LIA BLE TO CRIMINAL PROSECUTOR. PLEASE RETHINK AND THEN GIVE ANSWER TO Q.NO 12? ANS. I HAVE AGAIN GONE THROUGH THIS PAPER. THERE ARE FOUR COLUMNS IN PAGE NO.64, WHICH ACCORDING TO ME ARE AS FOLLOWS. 1. PLOT NO, 2. NAME OF PURCHASER, 3. MONEY RECEIVED T HROUGH CHEQUE AND 4. ON MONEY RECEIVED IN CASH. THIS PAPER PERT AINS TO SUNRISE FREE HOLD PROJECT. THE FIGURES WRITTEN AT THE BOTT OM ARE IN LACS. VASANA ROAD BARODA. THIS ON MONEY WAS RECEIVED BY US ON BEHALF OF M/S.ASHISH ENTERPRISE, 7 TH FLOOR, STERLING CENTER, R.C.DUTT ROAD, BARODA WHO WERE THE OWNERS OF LAND. 11.1. THIS STATEMENT BEING RECORDED U/S.132(4) HAS ITS OWN IMPORTANCE. AT THIS JUNCTURE, WE WANT TO CLARIFY THAT WE HAVE T O EXAMINE THIS STATEMENT AS A WHOLE, MEANING THEREBY THAT WE HAVE NOT ONLY TO EXAMINE THE ANSWERS IN RESPECT TO QUESTION NO.14 BUT ALSO T O EXAMINE HIS ANSWERS IN RESPECT TO QUESTION NOS.15 TO 18, ALREADY REPROD UCED SUPRA. IT(SS)A NO.43/A HD/2006 & IT(SS)A NO.153/AHD/2007 SMITABEN S.PATEL VS. ASST.CIT BLOCK PERIOD - 1.4.90 TO 25.7.2000 - 36 - 11.2. AT THIS JUNCTURE, WE MAY ALSO LIKE TO OPINE T HAT THE STATEMENTS IN QUESTION ARE NOT THE BALD STATEMENT. STATEMENT WIT HOUT ANY CORROBORATIVE EVIDENCE; BUT THE TRUTH IS THAT CERTAIN INCRIMINATI NG MATERIAL WAS DETECTED BY THE SEARCH PARTY AND AFTER SHOWING THOSE PAPERS/ REGISTERS THOSE STATEMENTS WERE RECORDED. WE THEREFORE HOLD THAT T HE STATEMENTS HAVE THEIR OWN VALUE THEREFORE SUBJECT TO DUE JUDICIAL S CRUTINY. AN ARGUMENT BEFORE US THAT MERELY A STATEMENT OUGHT NOT BE MADE THE BASIS OF ON ACTION AGAINST THE ASSESSEE AND SHOULD BE OVER-LOOK ED; IS HEREBY REJECTED. 13. AS FAR AS THE EXISTENCE OF ON-MONEY OR THE RE CEIVING OF THE ON- MONEY IS CONCERNED, WE HAVE NOTED THAT DURING THE ENTIRE LENGTH OF ARGUMENT EVEN LD.AR MR.J.P.SHAH HAS NOT CHALLENGED THE EXISTENCE OF ON-MONEY. WE HAVE ALSO NOTED THAT EVEN BEFORE THE AO OR BEFORE LD.CIT(A) THE APPELLANT HAD NOT CONTROVERTED THE FI NDING OF THE REVENUE AUTHORITIES GIVEN IN RESPECT OF THE EXISTENCE OF O N-MONEY. THERE ARE SUFFICIENT EVIDENCES ON RECORD THROUGH WHICH IT WAS PROVED BY THE REVENUE DEPARTMENT THAT ON-MONEY WAS RECEIVED ON THE ALLOCATION OF PLOTS. THE EVIDENCES WERE SO EXPRESSIVE AND CLEAR THAT THE AO HAS EXPLICITLY COMPUTED THE SAID AMOUNT. ALTHOUGH THE AMOUNT AS COMPUTED BY THE AO WAS AT RS.1,95,94,141/- BUT THAT QUANTUM WAS CONTESTED TO THE EXTENT THAT THE CORRECT FIGURE SHOULD HAVE BEEN RS. 1,62,92,400/-. AT THIS JUNCTURE, WE ARE OF THE OPINION THAT THE CORRECT AM OUNT IS ONLY A MATTER OF CALCULATION. THE CORRECT CALCULATION CAN AGAIN BE DONE BY THE AO. IN THIS REGARD, WE ALSO DIRECT THE ASSESSEE TO ASSIST THE AO WITH THE FIGURES OF ON-MONEY AS DETECTED FROM THE SEIZED MATERIAL, SO THAT THE CORRECT IT(SS)A NO.43/A HD/2006 & IT(SS)A NO.153/AHD/2007 SMITABEN S.PATEL VS. ASST.CIT BLOCK PERIOD - 1.4.90 TO 25.7.2000 - 37 - COMPUTATION OF ON-MONEY BE MADE BY THE AO FOR THE PURPOSE OF TAXATION. 13.1. NOW THE VITAL QUESTION IS THAT WHEN THE ON-M ONEY HAD ACTUALLY BEEN TRANSACTED, THEN IT HAS TO BE ASSESSED IN SOME BODYS HANDS. ON ONE HAND, THE ASSESSEE IS CLAIMING THAT THE SAID ON-MO NEY HAD BEEN PASSED ON TO M/S.ASHISH ENTERPRISES. ON THE OTHER HAND, O NE OF THE PARTNER OF M/S. ASHISH ENTERPRISES HAS CATEGORICALLY DENIED TH E RECEIPT OF ANY ADDITIONAL AMOUNT FROM M/S.SMITAL LAND DEVELOPERS, I.E. THE ASSESSEE. IN THIS CONNECTION, A STATEMENT RECORDED U/S.131 OF SHRI ANIL THAKKER, RELEVANT QUESTION NO.8, HAS ALREADY BEEN REPRODUCE D HEREINABOVE. ONCE IT IS PROVED THAT THE ON-MONEY HAD FACTUALLY CHAN GED THE HANDS, THEN THE IMPUGNED AMOUNT OUGHT TO HAVE BEEN TAXED AT SOM E PLACE EITHER IN THE HANDS OF MR. A OR IN THE HANDS OF MR.B. S UCH AN AMOUNT WHO IS OTHERWISE ESTABLISHED TO HAVE BEEN EARNED SHOULD NO T REMAIN UNTAXED ONLY DUE TO SOME REASON OR THE OTHER. IT IS LIKE THIS THAT A MURDER TOOK PLACE, BUT STILL THE DEFENCE WAS THAT NO ONE KILLE D JESSICA?. THE JUDICIAL CONSCIOUS DO NOT PERMIT SUCH STRATEGY. WE HAVE TO ARRIVE AT A CORRECT AND JUDICIAL DECISION, SO THAT THE WRONG-DOER, IF ANY, SHOULD BE BROUGHT TO LAW. IN THE PRESENT CASE, THE SEQUENCE OF EVENTS HAVE DEMONSTRATED THAT A SEARCH TOOK PLACE AND AT THE TIME OF SEARCH CERTA IN DOCUMENTS AND REGISTERS WERE FOUND IN POSSESSION OF THE ASSESSEE. IN THOSE REGISTERS, THERE WAS A SYSTEMATIC RECORDING OF PLOT-WISE TRANS ACTION OF ON-MONEY. THE PROVISIONS OF THE ACT ARE UNAMBIGUOUS THAT CONS EQUENCE UPON A SEARCH IF ANY BOOKS OF ACCOUNTS, MONEY, BULLION, DO CUMENT ARE FOUND IN IT(SS)A NO.43/A HD/2006 & IT(SS)A NO.153/AHD/2007 SMITABEN S.PATEL VS. ASST.CIT BLOCK PERIOD - 1.4.90 TO 25.7.2000 - 38 - POSSESSION OR CONTROL OF ANY PERSON, THEN SUCH DOCU MENT SHOULD BE HELD AS BELONGED TO SUCH PERSON. IT IS ALSO TO BE HELD THAT THE CONTENTS OF THE BOOKS OF ACCOUNTS OR OTHER DOCUMENTS ARE TRUE AND C ORRECT UNLESS AND UNTIL CONCLUSIVELY PROVED OTHERWISE. WE HEREBY REF ER SECTION 132(4A) OF IT ACT, IN SUPPORT OF THIS FINDING. IN THE LIGHT OF THIS SECTION OF IT ACT, WE HAVE FOUND THAT THE REGISTER AND OTHER SEIZED MA TERIAL WAS FOUND IN POSSESSION OF THIS ASSESSEE. WHAT WE HAVE NOTED TH AT IN ALL THE LD. AR HAS PLACED RELIANCE ON THREE EVIDENCES I.E. THE AGR EEMENT 24.2.94 , AN ANOTHER ALLEGED RECEIPT ALSO DATED 24.2.94 , A LETT ER WRITTEN BY MR. PANERI DATED 3.4.99 TO MR. SUBODH AND THE STATEMENTS. WE H AVE EXAMINED AND DULY CONSIDERED ALL OF THEM. WE THEREFORE HOLD THA T THE MONEY RECORDED IN THOSE DOCUMENTS BELONGED TO THE ASSESSEE. THE B URDEN WAS ON THE ASSESSEE TO DISPROVE IT. AN ATTEMPT WAS MADE BUT THAT ATTEMPT WAS UNSUCCESSFUL. THERE WERE SEVERAL SHORT-COMINGS IN THE EXPLANATION OF THE ASSESSEE AS FOLLOWS:- (I) THAT, THE ASSESSEE HAS TOTALLY FAILED TO PLACE ON R ECORD IN ORIGINAL THE ALLEGED AGREEMENT CLAIMED TO BE DATED 24.2.1994. THE ORIGINAL DOCUMENT WAS NEVER PRODUCE D BEFORE THE AUTHORITIES AND NOT EVEN BEFORE US THUS CREATED A SERIOUS DOUBT. (II) THAT, EVEN AFTER THE STEP OF SEARCH TAKEN PLACE BY THE REVENUE DEPARTMENT THAT AGREEMENT COULD NOT BE SEAR CHED OR DETECTED, ALTHOUGH ALL OTHER ACCOUNTED AND UNACCOUNTED/RECORDED OR UNRECORDED DOCUMENTS WERE RECOVERED. IT(SS)A NO.43/A HD/2006 & IT(SS)A NO.153/AHD/2007 SMITABEN S.PATEL VS. ASST.CIT BLOCK PERIOD - 1.4.90 TO 25.7.2000 - 39 - (III) THAT, THE EVIDENCE OF PAYMENT OF ON-MONEY OF RS.1,56,00,000/- TO M/S.ASHISH ENTERPRISES WAS NOT CONCLUSIVELY PROVED. THE SAID OTHER AGREEMENT ALS O DATED 24.2.1994 ON A STAMP OF RS.20/- WAS FULL OF DOUBTS . (IV) THAT, THE SIGNATURE OF ONE OF THE PARTNER, SHRI S.N .PANERI WAS UNDER DISPUTE AND THAT ONE OF THE OTHER PARTNER , NAMELY SHRI ANIL THAKKER HAS DENIED THE RECEIPT OF ANY SUC H AMOUNT. (V) THAT, APART FROM THIS ALLEGED AGREEMENT DATED 24.2. 1994, THE APPELLANT HAD NOT PLACED ANY SUPPORTING EVIDENCE TO CORROBORATE THE QUARTERLY PAYMENT IN INSTALLMENTS O F RS.39 LACS EACH. EVEN NO RECEIPT OR ANY OTHER SUCH TYPE OF EVIDENCE WAS TRACED AT THE TIME OF SEARCH. 13.3 AN ALTERNATE PLEA HAS BEEN RAISED BY LD.AR MR. SHAH THAT ONLY THE PROFIT COMPONENT IS TO BE TAXED IN RESPECT OF THE ON-MONEY ALLEGED TO HAVE BEEN EARNED BY THE ASSESSEE. FROM THE SIDE O F THE REVENUE, IT WAS STRONGLY CONTESTED THAT ONCE THE ENTIRE EXPENDITURE TOWARDS THE DEVELOPMENT OF THE SAID PROJECT AND ALL OTHER EXPEN DITURE WAS DULY BOOKED IN THE ACCOUNTS, THEN THERE WAS NO SCOPE LEF T FOR GIVING ANY OTHER DEDUCTION OF EXPENDITURE BUT TO ASSESS THE ENTIRE O VER AND ABOVE AMOUNT TO BE TAXED ENTIRELY IN THE HANDS OF THE ASSESSEE. WE ARE IN CONFIRMITY WITH THE ARGUMENTS OF LD.DR BECAUSE APART FROM RAIS ING THIS ARGUMENT, NO EVIDENCE IS BEFORE US TO DEMONSTRATE THAT THERE WAS UNACCOUNTED EXPENDITURE WHICH WAS TO BE ADJUSTED AGAINST THE SA ID UNACCOUNTED IT(SS)A NO.43/A HD/2006 & IT(SS)A NO.153/AHD/2007 SMITABEN S.PATEL VS. ASST.CIT BLOCK PERIOD - 1.4.90 TO 25.7.2000 - 40 - RECEIPT OF ON-MONEY. IN THE ABSENCE OF SUCH AN E VIDENCE, WE HEREBY DISMISS THIS ALTERNATE PLEA OF THE ASSESSEE. IN T HE RESULT, GROUND RAISED BY THE ASSESSEE IS DISMISSED. 14. AS A RESULT, ASSESSEES APPEAL, I.E. IT(SS)A NO .43/AHD/2006 IS PARTLY ALLOWED. [B] IT(SS)A NO.153/AHD/2007 15. THIS IS AN APPEAL FILED BY THE ASSESSEE ARISING FROM THE ORDER OF THE LD.CIT(A)-II, BARODA DATED 24.9.2007 AND THE GR OUNDS RAISED ARE AS FOLLOWS:- 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(APPEALS) ERRED IN UPHOLDING THE ADDITION OF RS.22,52,335/- ON ACCOUNT OF PLOTS NO.10,14,18,19 & 39 MADE BY ASSESSING OFFICER. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(APPEALS) ERRED IN UPHOLDING THE ADDITION OF RS. 10,000/- MADE BY ASSESSING OFFICER ON THE PRETEXT OF THERE BEING A DIFFERENCE IN THE ON MONEY RECEIPT. 15.1. THIS IS THE SECOND ROUND OF THIS APPEAL. EA RLIER AN ORDER WAS PASSED BY CIT(A)-IV AHMEDABAD DATED 16.12.2005. VIDE PARA 8.34, LD.CIT(A) HAS REFERRED THE ISSUE BACK TO THE AO IN RESPECT OF CERTAIN PLOTS BEARING NOS.10,14, 18, 19 & 39. THE AMOUNT IN QUES TION WAS RS.22,52,366/-. SINCE THE MATTER WAS RESTORED BA CK TO THE FILE OF THE IT(SS)A NO.43/A HD/2006 & IT(SS)A NO.153/AHD/2007 SMITABEN S.PATEL VS. ASST.CIT BLOCK PERIOD - 1.4.90 TO 25.7.2000 - 41 - AO, THEREFORE IN CONSEQUENCE THEREOF THE AO HAS PAS SED AN ORDER GIVING EFFECT TO THE ORDER OF CIT(A). THIS IS THE IMPUGN ED ORDER NOW BEFORE US DATED 30.03.2007. IN THIS ORDER, THE AO HAS MENTI ONED THE BACKGROUND AS FOLLOWS:- ORDER GIVING EFFECT TO CIT (APPEALS)-IV, AHMEDABAD S ORDER IN THIS CASE, THE ASSESSMENT ORDER WAS PASSED U/S.1 58BC R.W.S. 158BG OF THE ACT ON 30.07.2002 DETERMINING THE TOTA L UNDISCLOSED INCOME OF THE ASSESSEE FOR THE ABOVE BLOCK PERIOD A T RS.2,18,47,970/-. THE ASSESSEE WENT IN APPEAL BEFO RE THE CIT(APPEAL)-IV, AHMEDABAD. AFTERWARDS, THE HONBLE CIT(APPEALS)-IV, AHMEDABAD, HAS PASSED HER APPELLAT E ORDER ON 16.12.005. VIDE HER APPELLATE ORDER IN APPEAL NO.C IT(A)- IV/CC.2.V/77/2002-03 DATED 16.12.2005 AT PARA 8.34 THE CIT(APPEALS)-IV, AHMEDABAD, HAS DIRECTED THE ASSESS ING OFFICER AS UNDER:- HOWEVER, WITH REGARD TO PLOT NO.10,14,18,19 AND 39, THE ASSESSING OFFICER IS DIRECTED TO VERIFY THE CLAIM A ND IF THE CONTENTION RAISED BY THE APPELLANT, AS DISCUSSED AB OVE, ARE FOUND TO BE CORRECT THEN THE ASSESSING OFFICER IS DIRECTE D TO GIVE RELIEF OF RS.22,52,335/- OUT OF THE TOTAL ADDITION OF RS.1,96 ,04,141/- ON ACCOUNT OF FLAT NOS. 10,14,18,19 AND 39. IN NUTSHE LL, IN PRINCIPAL, THE ADDITION OF RS.1,96,04,141/- CONFIRMED. HOWEVE R, IF THE APPELLANT IS ABLE TO PROVE HER CASE BEFORE THE ASSE SSING OFFICER IN RESPECT OF FLAT NO.10,14,18,19 AND 39, IN WHICH AN AMOUNT OF RS.22,52,335/- IS INVOLVED THE ADDITION TO THE EXTE NT OF RS.1,73,51,806/- SHOULD BE CONSIDERED AS CONFIRMED. THESE GROUNDS OF APPEAL ARE DECIDED ACCORDINGLY. 15.2. THE AO THEREAFTER DISCUSSED THE TRANSACTION I N RESPECT OF THESE PLOTS AND FINALLY CAME TO THE CONCLUSION THAT THERE WAS NO SATISFACTORY IT(SS)A NO.43/A HD/2006 & IT(SS)A NO.153/AHD/2007 SMITABEN S.PATEL VS. ASST.CIT BLOCK PERIOD - 1.4.90 TO 25.7.2000 - 42 - EXPLANATION ON THE PART OF THE ASSESSEE. IN THE RE SULT, THE ADDITION WHICH WAS MADE IN THE FIRST ROUND OF ASSESSMENT WAS REPEA TED. AGAIN THE MATTER GONE IN APPEAL. 16. BEFORE LD.CIT(A) THE MAIN CONTENTION OF THE ASS ESSEE WAS THAT THERE WAS A COMPROMISE DEED THROUGH WHICH THE PLOTS IN QUESTION WERE RETURNED BACK TO M/S.ASHISH ENTERPRISE, THEREFORE, THERE WAS NO QUESTION OF RECEIVING ANY ON-MONEY BY THE ASSESSEE. HOWE VER, THE LD.CIT(A) HAS HELD THAT THERE WAS NO SATISFACTORY EVIDENCE IN SUPPORT OF THE COMPROMISE DEED AND THE ASSESSEE HAS ACTED AS A DEV ELOPER, THEREFORE THE PLOTS IN QUESTION HAVE BEEN DEVELOPED BY THE ASSESS EE. THE ASSESSEE HAD BECOME A DE FACTO OWNER, THEREFORE RECEIVED THE ON -MONEY. AS PER LD.CIT(A), THE ON-MONEY HAS BEEN EVALUATED ON THE BASIS OF THE SEIZED DOCUMENTS. HE HAS CONCLUDED THAT THE EVIDENCE IN THE FORM OF THE COMPROMISE DECREE COULD NOT ABSOLVE THE ASSESSEE FR OM THE RESPONSIBILITY TO PROVE THAT THERE WAS NO ELEMENT OF ON-MONEY. ACCORDING TO LD.CIT(A), THE SALE CONSIDERATION ITSELF WAS INCLUS IVE OF ON-MONEY. THE LD.CIT(A) HAS CONCLUDED THAT IT WAS UNBELIEVABL E THAT NO ON- MONEY WAS INVOLVED IN RESPECT OF THESE FIVE PLOTS. IN THE RESULT, THE ADDITION WAS CONFIRMED. 17. NOW BEFORE US, LD.AR MR.J.P.SHAH, HAS INFO RMED THAT IN RESPECT OF PLOT NO.10 THE SAME WAS EARLIER SOLD TO ONE SHRI HASMUKHBHAI PARIKH THAT DEED WAS CANCELLED AND THE PLOT WAS SOLD TO SH RI MANISH GOPALDAS IT(SS)A NO.43/A HD/2006 & IT(SS)A NO.153/AHD/2007 SMITABEN S.PATEL VS. ASST.CIT BLOCK PERIOD - 1.4.90 TO 25.7.2000 - 43 - SHAH AND SMT. MAMTA MANISH SHAH. THERE WAS NO TR ANSACTION OF ON- MONEY SINCE THE DEAL WAS CANCELLED. AFTER CANCE LLATION, THE PLOT WAS DIRECTLY SOLD BY M/S.ASHISH ENTERPRISES. IN RESPECT OF PLOT NO.14, LD.AR HAS INFORMED THAT THE PLOT WAS RETURNED TO M/ S.ASHISH ENTERPRISES AS PER THE COMPROMISE-DEED. REGARDING PLOT NO.18, IT WAS INFORMED THAT THE SAID PLOT WAS RETURNED TO M/S.ASHISH ENTER PRISES. AN AMOUNT OF RS.4 LACS WAS RETURNED BACK TO THE PURCHASER. IN THE SEIZED PAPER, THERE WAS A CLEAR NARRATION ABOUT THE SAID AMOUNT. REG ARDING FOURTH PLOT, I.E. PLOT NO.19, IT WAS STATED THAT THE PLOT WAS RETURNED TO M/S.AS HISH ENTERPRISES AS PER THE COMPROMISE DECREE. THE AS SESSEE HAS NOT RECEIVED ANY ON-MONEY. IN RESPECT OF 5 TH PLOT, I.E . PLOT NO.39, LD.AR HAS INFORMED THAT THE SAID PLOT WAS SOLD BY SHRI S. M.PANERI. THERE WAS NO MENTION OF ON-MONEY IN THE SEIZED PAPER. IN TERMS OF THE COURT DECREE THE PLOT WAS RETURNED TO M/S.ASHISH ENTERPRI SES. 18. WE HAVE HEARD BOTH THE SIDES. CERTAIN DATES ARE WORTH TO MENTION. AS PER THE SAMJODA KARAR DATED 24.02.9 4 THE ASSESSEE HAS ENTERED INTO AN AGREEMENT WITH M/S.ASHISH ENTERPRIS ES. THE ASSESSEE WAS HANDED OVER THE POSSESSION OF THE PROPERTY AND THEREUPON THE ASSESSEE HAD STARTED DEVELOPMENT OF THE PROJECT. T HE COMPROMISE DECREE WHICH IS BEING MENTIONED IN RESPECT OF THESE FIVE P LOTS IS DATED 26.07.2000. SEARCH WAS CONDUCTED ON 25.7.2000. AT THE TIME OF SEARCH, IT WAS ALLEGED THAT THERE WERE EVIDENCE IN RESPECT OF EXISTENCE OF ON-MONEY PERTAINING TO THESE PLOTS, REFER ANX A-2 2 PG. 1/28 AND 40 OF IT(SS)A NO.43/A HD/2006 & IT(SS)A NO.153/AHD/2007 SMITABEN S.PATEL VS. ASST.CIT BLOCK PERIOD - 1.4.90 TO 25.7.2000 - 44 - ANX. 3. THE REVENUE AUTHORITY HAS THUS HELD THAT T HE ASSESSEE HAS TRANSACTED THESE PLOTS PRIOR TO THE DATE OF SEARCH AND WHATEVER WAS THE ON-MONEY, THAT WAS RECEIVED AT THE TIME OF BOOKI NG OF THESE PLOTS. LATER ON, DUE TO A COMPROMISE DECREE THOSE PLOTS WE RE RETURNED BACK TO M/S.ASHISH ENTERPRISES, AS CLAIMED BY THE ASSESSEE. SO THE ASSESSEE WAS UNDER OBLIGATION TO PLACE ON RECORD THE EVIDENCE OF SALE OF THESE PLOTS BY ASHISH ENT. ON THE OTHER HAND, REVENUES CONTEN TION WAS THAT THE PLOTS WERE HANDED OVER TO M/S.ASHISH ENTERPRISES AFTER GE TTING THE ON- MONEY, IF THE THEORY OF COMPROMISE DEED WAS TO BE ACCEPTED. MERELY RELYING UPON THE COMPROMISE DECREE WAS NOT SUFFICIE NT. THERE IS NO EVIDENCE IN POSSESSION OF THE ASSESSEE THAT IN RESP ECT OF THE PLOTS WHICH WERE ACQUIRED IN THE YEAR 1994, THE ASSESSEE HAS NO T RECEIVED ANY ON- MONEY AT THE TIME OF BOOKING - TRANSACTION. THE A SSESSEE HAS ENTERED INTO A COMPROMISE DECREE BUT THE SAME WAS VERY LATE IN THE YEAR 2000. DURING THIS PERIOD, THESE PLOTS MUST HAVE BEEN EITH ER SOLD OR BOOKED BY THE ASSESSEE AND THE EVIDENCE OF ON-MONEY HAVI NG BEEN RECEIVED BY THE ASSESSEE WAS UNEARTHED. THE SUBSEQUENT COMPRO MISE DECREE DID NOT HAVE ANY BEARING ON THE EVIDENCES COLLECTED. THE A DDITION MADE IN RESPECT OF THESE PLOTS ARE HEREBY SUSTAINED. IN THE RESULT, THIS GROUND IS DISMISSED. IT(SS)A NO.43/A HD/2006 & IT(SS)A NO.153/AHD/2007 SMITABEN S.PATEL VS. ASST.CIT BLOCK PERIOD - 1.4.90 TO 25.7.2000 - 45 - 19. IN THE RESULT, IT(SS)A NO.43/AHD/2006 IS PARTLY ALLOWED, WHEREAS IT(SS)A NO.153/AHD/2007 IS DISMISSED. SD/- SD/- ( ! '# ) ( ) $% ( ANIL CHATURVEDI ) ( MUKU L KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 31/ 10 /2012 6..!, .!../ T.C. NAIR, SR. PS $5 0 -7 8$74 $5 0 -7 8$74 $5 0 -7 8$74 $5 0 -7 8$74/ COPY OF THE ORDER FORWARDED TO : 1. ), / THE APPELLANT 2. -.), / THE RESPONDENT. 3. 9 / CONCERNED CIT 4. 9() / THE CIT(A)-IV, AHMEDABAD 5. 7<= -! , , / LEARNED DEPARTMENTAL REPRESENTATIVE, ITAT, AHMEDABAD 6. = >1 / GUARD FILE. $5! $5! $5! $5! / BY ORDER, .7 - //TRUE COPY// ? ?? ?/ // / * * * * ( DY./ASSTT.REGISTRAR) , , , , / ITAT , AHMEDABAD 1. DATE OF DIRECT DICTATION ON COMPUTER 9/10.10.12 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 11.10.12 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S31.10.12 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 31.10.12 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER