The ACIT, Central Circle-2(4), Ahmedabad V. Shri Jayendrabhai M.Desai, Ahmedabad

ITSSA 484/AHD/2011

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 0920 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 04-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 19-08-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 02-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M P SINGH
• Assessee Lawyers: P M MEHTA
• Keywords: Unexplained investment; Income from undisclosed sources; Search and seizure; Loose papers; Document seized; Question of law; Block assessment; Documents seized
• Section: 69C; 143(3); 153A; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH BEFORE: S H RI G. D. AGRAWAL , VICE PRESIDENT AND SHR I S. S. GODARA , JUDICIAL MEMBER ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 2(4), AHMEDABAD (APPELLANT) VS JAYENDRA M. DESAI, D - 602, GAURAV TOWER, PRABHAT CHOWK, AHMEDAD PAN: AOFPD0660Q (RESPONDENT) REVENUE BY : S H RI M.P SINGH, CIT - D . R. ASSESSEE BY: S H RI P.M. MEHTA , A.R. DATE OF HEARING : 20 - 08 - 2 015 DATE OF PRONOUNCEMENT : 04 - 09 - 2 015 / ORDER P ER : S. S. GODARA , JUDICIAL MEMBER : - THIS REVENUE S APPEAL FOR A.Y. 2007 - 08, AR ISES FROM ORDER OF THE CIT(A) - III, AHMEDABAD DATED 19 - 05 - 2011 IN APPEAL NO. CIT(A) - III/176 / ACIT/ CC - 2(4)/ 10 - 11 , IN PROCEEDINGS UNDER SECTION 153A R.W.S. 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . I T (SS) A NO . 484 / A HD/20 11 A SSESSMENT YEAR 200 7 - 08 I.T. (SS) A NO. 484 /AHD/20 11 A.Y. 2007 - 08 PAGE NO ACIT VS. JAYENDRA M. DESAI 2 2. THE SOLE SUBSTANTIVE GROUND RAISED IN THE APPEAL READS AS FOLLOWS: - 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS AND CIRCUMSTANCES OF THE CASE BY DELETING TH E ADDITION MADE OF RS.31,03,000/ - RELYING ON THE SUBMISSION OF THE ASSESSEE THAT THE PAGES 73 TO 91 AND 96 TO 98 OF ANNEX. - A - 2 DID NOT BELONG TO THE ASSESSEE BUT BELONGED TO THE ASSESSEE'S FATHER AND OTHER PERSONS NOTWITHSTANDING TH E FACT THAT THE NO EVIDENCE WAS SUBMITTED DURING THE COURSE OF ASSESSMENT PROCEEDINGS THAT THE LAND BELONGED TO THE ASSESSEE'S FATHER AND OTHER PERSONS. 3. THE ASSESSEE IS ASSESSED AS AN INDIVIDUAL. THE DEPARTMENT CONDUCTED A SEARCH ON 23 - 05 - 2008 IN HIS GROUP CASES. THE SAME CULMINATED IN A SECTION 153A NOTICE DATED 09 - 03 - 2009. THE ASSESSEE FILED HIS RETUR N ON 15 - 06 - 2009 ADMITTING INCOME OF RS. 55,240/ - WITH AGRICULTURAL INCOME OF RS.1,64,188/ - ONLY. THE ASSESSING OFFICER TOOK UP SCRUTINY. HE INTER ALIA REFERRED TO SEIZED MATERIAL ANNEXURE A - 2 PAGES 73 - 91 AND 96 - 98 ALLEGEDLY REVEALING CASH SUM TOTALING TO RS. 31,03,333/ - RECEIVED FROM VARIOUS PERSONS. THE ASSESSEE APPEARS TO HAVE DEPOSED THAT NONE OF THE ABOVE STATED DOCUMENTS RELATED TO HIM, HE HAD NO FINANCIAL INTEREST THEREIN AND THE SAME WERE ONLY KEPT FOR REFERENCE PURPOSE. THE ASSESSING OFFICER OB SERVED IN THE ASSESSMENT ORDER THAT ASSESSEE WAS A LAND BROKER INVOLVED IN SALE PURCHASE OF THE LANDS HIMSELF. HE TREATED THE ABOVE STATED SUMS AS HIS UNACCOUNTED INCOME FOR MAKING THE IMPUGNED ADDITION. 4. THE ASSESSEE PREFERRED APPEAL CHALLENGING VALIDITY O F SECTION 153A PROCEEDINGS AND ALSO CORRECTNESS OF THE IMPUGNED I.T. (SS) A NO. 484 /AHD/20 11 A.Y. 2007 - 08 PAGE NO ACIT VS. JAYENDRA M. DESAI 3 ADDITION ON MERITS. THE CIT(A) HAS REJECTED THE FORMER PLEA AND ACCEPTS THE LATTER ONE AS UNDER: - 5. THE NEXT GROUND IS REGARDING ADDITION OF RS. 31,03,000/ - ON ACCOUNT OF UNACCOUNTED INCOM E BASED ON SEIZED LOOSE PAPERS. THE RELEVANT SUBMISSION OF THE APPELLANT ON THIS ISSUE IS REPRODUCED AS UNDER: - '3. ADDITION ON ACCOUNT OF LOOSE PAPERS RS.31,03,000/ - (GROUND NO.2) 3.1 THE ASSESSING OFFICER WHILE PASSING THE IMPUGNED ORDER H AS ADDED TO THE INCOME OF APPELLANT RS.31,03,000/ - ON THE BASIS OF SEIZED MATERIAL AS PER PAGE NO 73 TO 91 AND 96 TO 98 OF ANNEXURE - A - 2 FOUND AND SEIZED FROM THE RESIDENCE OF APPELLANT. THE SAID AMOUNT HAS BEEN ADDED TO THE INCOME OF THE APPELLANT ON PRE SUMPTION THAT VARIOUS AMOUNTS MENTIONED THEREIN REPRESENT CASH RECEIVED BY THE APPELLANT IN RESPECT OF SALE OF LAND AT MOTI BHOYAN. 3.2 IN THIS CONNECTION, THE APPELLANT SUBMITS THAT AFORESAID LOOSE PAPERS AT PAGE NO 73 TO 91 AND 96 TO 98 OF ANNEXUR E - A - 2 CONSISTS OF VARIOUS .PAYMENT VOUCHERS IN RESPECT OF SALE OF LAND AT MOTI BHOYAN. (COPY OF SEIZED MATERIALS IS ENCLOSED HEREWITH AS ANNEXURE - 1) FROM THE PERUSAL OF THE SEIZED MATERIALS YOUR HONOUR MAY KINDLY OBSERVE THAT THE RECIPIENT OF THE AMOUNTS MENTIONED IN THE VOUCHERS IS NOT APPELLANT BUT THE THIRD PARTIES. IN FACT, DURING THE COURSE OF SEARCH PROCEEDINGS, THE APPELLANT IN HIS STATEMENT .RECORDED U/S 132(4 ) OF THE ACT ON 23.05.2008; HAD EXPLAINED THE CONTENTS OF THE LOSE PAPERS FOUND AND SEIZE D AS ANNEXURE A - 2. RELEVANT EXTRACTS FROM THE FREE ENGLISH TRANSLATION OF THE SAME ARE REPRODUCED HEREUNDER FOR YOUR KIND PERUSAL 'Q.16 NOW I AM SHOWING YOU LOOSE PAPER FILE [A - 2] IN WHICH THERE ARE 132 PAGES. PLEASE SEE THEM AND GIVE YOUR EXPLANATION. A.16 IN THE ABOVE MENTIONED FILE, PAGE NOS. 99 TO 132'CONSISTS OF FORM NOS. 7 AND 12, RELATED TO THE LANDS OF KAROLI AND BHOYAN, WHICH WERE PURCHASED BY MY FATHER ALONG WITH OTHER ABOUT 9 TO 10 OTHER PARTNERS. AN AMOUNT OF RS. 21,00,000/ - WAS ADVANCED BY THE PURCHASER FOR THE PURPOSE OF I.T. (SS) A NO. 484 /AHD/20 11 A.Y. 2007 - 08 PAGE NO ACIT VS. JAYENDRA M. DESAI 4 DISTRIBUTING THE SAME TO THE 'POWER OF ATTORNEY HOLDER AS WELL AS TO THE FARMERS, THE RECEIPT OF I WHICH DATED 20 - 10 - 06 IS ON THE PAGE NO. 98. FURTHER THERE ARE RECEIPTS OF RS. 150,000/ - + RS. 3,50,000 PAID BY THE LAND PURC HASERS FOR THE LAND OF BLOCK NO. 1735 TO BE PAID TO THE POWER OF ATTORNEY HOLDER SHRI DINESHBH AI AMBALAL, WHICH ARE RESPECTIVELY DATED 12 - 1 - 07 AND 11 - 1 - 07, WHICH WAS PAID BY MY FATHER AS WELL AS THE REST OF THE PARTNERS. TWILL LATER ON GIVE YOU THE INFORM ATION ABOUT THE PARTNERS. THE REST OF THE PAPERS LYING IN THIS FILE ARE RELATED TO THE ABPVE REFERRED LAND.' COPY OF THE STATEMENT RECORDED U/S 132(4) OF THE ACT, IS ATTACHED HEREWITH AS ANNEXURE - 2. IN VIEW O F THE ABOVE, THE APPELLANT SUBMITS THAT THE LA ND AT MOTI BHOYAN IN RESPECT OF WHICH THE PRESENT ADDITION HAS BEEN MADE, HAS BEEN PURCHASED BY THE APPELLANT'S FATHER JOINTLY WITH OTHER PARTNERS AND PAYMENT IN RESPECT OF SUCH LAND WAS ALSO MADE NOT BY APPELLANT BUT BY APPELLANT'S FATHER ALONG WITH OTHER PARTNERS TO THE PURCHASERS OF THOSE LAND. THE APPELLANT WAS CLEARLY NOT A PARTY TO THE VARIOUS TRANSACTION OF PURCHASE AND/OR SALE OF LAND AT MOTI BHOYAN IN RESPECT OF WHICH PAYMENT VOUCHERS HAS BEEN FOUND AND SEIZED FROM: THE PREMISES OF APPELLANT. THIS FACT MAY ALSO BE APPRECIATED FROM THE COPY OF 7/12 ABSTRACT OF VARIOUS LANDS AT VILLAGE BHOYAN MOTI; WHICH ARE FORMING PART OF THE PAGE NO. 3 TO 22 AND 99 TO 111 OF ANNEXURE A - 2 THAT THE LAND IN QUESTION DID NOT BELONG TO APPELLANT NEITHER HE WAS A SELLER SO AS TO RECEIVE ANY MONEY IN RESPECT OF SUCH LAND. FURTHER AS MENTIONED ABOVE, THE LAND WAS PURCHASED BY THE FATHER OF APPELLAN T ALONG WITH OTHER PARTNERS AND THAT THE LAND IN QUESTION WAS SUBSEQUENTLY TRANSFERRED IN THE NAME OF SUCH PERSONS WHICH MAY BE APPRECIATED FROM THE COPY OF 7/12 ABSTRACTS IN RESPECT OF LAND IN QUESTION AT VILLAGE BHOYAN MOTI, SUBMITTED HEREWITH AS ANNEXURE - 3. AFORESAID FACTS CLEARLY PROVES THAT THE APPELLANT HAS NEVER BEEN A PARTY TO THE TRANSACTION IN RESPECT OF LAND, AT VILL AGE BHOYAN MOTI AND THAT HE DOES NOT HAVE ANY FINANCIAL INVOLVEMENT OR INTEREST IN THESE TRANSACTION. IT IS THEREFORE, SUBMITTED THAT THE IMPUGNED ADDITION MADE IN THE HANDS OF THE APPELLANT PURELY ON SURMISES AND I.T. (SS) A NO. 484 /AHD/20 11 A.Y. 2007 - 08 PAGE NO ACIT VS. JAYENDRA M. DESAI 5 PRESUMPTION, IS ENTIRELY UNJUSTIFIED AND ' UNWARRANTED AND HENCE DESERVES TO BE DELETED, 3.3 APART FROM THE AFORESAID FACTUAL ASPECTS, AND IN ORDER SO AS TO APPRECIATE THE ABSURDNESS OF THE IMPUGNED ADDITION IN THE HANDS OF APPELLANT, THE APPELLANT BEGS TO INVITE YOUR HONOUR'S KIND AND SYMPA THETIC CONSIDERATION TO SOME OF THE OTHER TRAITS EMERGING FROM THE SIZED MATERIALS AND SUMMARIZED HEREIN UNDER AS FOLLOWS: (I) NONE OF THE VOUCHERS SEIZED FROM APPELLANT'S PREMISES, NAME OF APPELLANT IS MENTIONED. (II) NOTHING IS EMANATING FRO M VOUCHERS THAT AMOUNT MENTIONED IN VOUCHERS HAVE BEEN RECEIVED BY APPELLANT. (II I) EVEN THE VOUCHERS FOUND DURING THE COURSE OF SEARCH WHICH HAS BEEN CONSIDERED AS BASIS FOR MAKING ADDITION, CLEARLY REFLECTS RECIPIENT OF AMOUNT OTHER THAN APPELLANT. (IV) WHAT THE FIGURES NOTED IN THE PIECE OF PAPER REPRESENT HAS NO RELEVANCE TO THE DETERMINATION OF INCOME IN THE HA NDS OF THE ASSESSEE. EVEN FROM SUCH DOCUMENTS, IT IS NOT EMANATING LAND TRANSACTIONS AS ALLEGED BY ASSESSING OFFICER HAS BEEN DONE F OR APPELLANT OR RELATING TO APPELLANT. (V) IT IS STATED THAT AFORESAID LOOSE PAPER IS NOT IN THE HANDWRITING OF APPELLANT WHICH WAS ALSO STATED IN THE ASSESSMENT PROCEEDINGS. UNDER SUCH CIRCUMSTAN CES THE PRESUMPTION MADE BY THE ID. ASSESSING OFFICE R THAT SINCE THE APPELLANT IS IN THE BUSINESS OF LAND BROKER AND ALSO ENGAGED IN PURCHASE AND SALE OF LAND BY HIMSELF, THE AMOUNT MENTIONED IN THE SEIZED MATERIAL IS THE ACTUALLY RECEIVED BY APPELLANT FROM VARIOUS PARTIES AS PROFIT IS ENTIRELY FALLACIOUS A ND UNWARRANTED. ACCORDINGLY APPELLANT BEGS TO SUBMIT THAT THE MERE NOTING ON A LOOSE SHEET FOUND FROM RESIDENTIAL PREMISE CANNOT LEAD TO ADDITION IN THE HANDS OF THE APPELLANT. IN THIS CONNECTION RELIANCE IS PLACED ON THE FOLLOWING: (I) DECISION I N CASE OF ASSTT. CIT V. DR. KAMLA PRASAD SINGH [2010] 3 ITR (TRIB.) 533 (PATNA) I.T. (SS) A NO. 484 /AHD/20 11 A.Y. 2007 - 08 PAGE NO ACIT VS. JAYENDRA M. DESAI 6 NEITHER ANY ENQUIRY REPORT NOR ANY DOCUMENT PROCURED EITHER BEFORE OR AFTER THE SEARCH CAN BE CONSIDERED WHILE COMPUTING THE UNDISCLOSED INCOME. SIMILARLY, IT IS ALSO SETTLED LAW THAT ANY DOCUMENT FOUND AND SEIZED DURING THE COURSE OF SEARCH HAS TO BE INTERPRETED LITERALLY AND NOTHING CAN BE ADDED OR SUBTRACTED. WHERE THE DOCUMENTS FOUND AND SEIZED AND RELIED UPON FOR MAKING THE ADDITION UNDER APPEAL BY THE REVENUE HAD NEITHER DATE NOR THE NAME OF THE ASSESSEE, IT COULD NOT BE ASSUMED OR PRESUMED AS TO WHEN AND BY WHOM THE NOTINGS WERE RECORDED; IT WAS ALSO NOT KNOWN AS TO IN WHAT CONNECTION THE NOTIN GS, EVEN IF CONSIDERED AS GIVING AND TAKING OF MONEY, WERE MADE, MEANING THERE BY THAT THESE DOCUMENTS BEING DUMB DOCUMENTS, NO ADDITION COULD BE MADE ON THE BASIS OF ASSUMING OR PRESUMING THE NOTINGS IN THOSE DOCUMENTS RELATING TO ANY OTHER TRANSACTION NOT RECORDED IN THE DOCUMENTS. (II) THE GUJARAT HIGH COURT HAS RECENTLY IN CASE OF CIT VS. MAULIK KUMAR K. SHAH 307 ITR 137 HAD HELD THAT LOOSE PAPERS CONTAINING ROUGH ESTIMATES CANNOT BE RELIED UPON TO MAKE ADDITION ON ACCOUNT OF UNDISCLOSED INCOME : IN THE ABSENCE OF ANY INDEPENDENT EVIDENCE. (II I) FURTHER THERE ARE ALSO CERTAIN OTHER LEGAL PRECEDENTS WHICH CLARIFIES THAT LOOSE PAPERS ALONE CAN NOT BE MADE BASIS FOR ADDITION. WHERE LOOSE SHEETS ARE FOUND, THERE IS THE USUAL INTERFERENCE OF THE ASSESSING OFFICER, THAT THEY REPRESENT CONCEALED TRANSACTIONS, SUCH INTERFERENC E DOES NOT READILY FOLLOW. SUCH INTERFERENCE CAN BE POSITIVELY MADE ONLY AFTER IDENTIFICATION OF PAPERS AND AFTER DUE VERIFICATIONS. FIGURES THEREIN COULD NOT BE LIGHTLY INFERRED TO REPRESENT UNACCOUNTED INCOME, UNLESS THERE IS SOMETHING MORE TO IT. IT WAS SO HELD BY A THIRD MEMBER ON A DIFFERENCE BETWEEN THE OTHER MEMBERS OF THE TRIBUNAL IN GOYAL (S.P.) V DCIT (2004) 269 ITR 496 (HP). A SIMILAR VIEW WAS TAKEN AGAIN BY A THIRD MEMBER IN BABROS MACHINERY MANUFACTURES PVT LT D V DCIT (2004) 269 ITR (AT) 36( AHD ). (IV) FURTHER, THE HONORABLE SUPREME COURT IN THE CASE OF MOHD. YUSUF & ANR. VS.D & ANR. AIR 1968 BOM 112 HAS OBSERVED THAT THE CONTENTS CONTAINED IN DOCUMENT IS HEARSAY EVIDENCE UNLESS THE WRITER THEREOF IS EXAMINED BEFORE THE COURT. THE HONOURABL E COURT, THEREFORE, HELD THAT ATTEMPT TO PROVE THE CONTENTS OF THE DOCUMENT BY PROVING THE SIGNATURE OF THE HANDWRITING OF THE AUTHOR THEREOF IS TO SET AT NOUGHT, THE WELL RECOGNIZED RULE THAT HEARSAY EVIDENCE CAN NOT BE ADMITTED. IF WE CONSIDER THE SAID PIECE OF PAPER SEIZED DURING SEARCH IN LIGHT OF THE DEFINITION OF THE WORD 'DOCUMENT' IS GIVEN IN THE I.T. (SS) A NO. 484 /AHD/20 11 A.Y. 2007 - 08 PAGE NO ACIT VS. JAYENDRA M. DESAI 7 INDIAN EVIDENCE ACT AND GENERAL CLAUSES ACT AND TRUTHFULNESS OF THE CONTENTS THEREOF IN LIGHT OF THE AFORECITED DECISIONS OF THE HONOURABLE SUPREME COURT, WE FIND THAT THE SAID PAPER CONTAINS JOTTINGS OF CERTAIN FIGURES BY THE SAME DOES NOT DESCRIBE OR EXPRESS THE SUBSTANCE OF ANY TRANSACTION AND EVEN IF THE SAID PAPER HAS BEEN SEIZED FROM THE POSSESSION OF THE ASSESSEE THE CONTENTS THEREOF ARE NOT CAPABLE OF THE DESCRIBING THE TRANSACTIONS THE WAY THE ASSESSING OFFICER HAS DECIPHERED THEM WITHOUT - SUPPORT OF CORROBORATIVE EVIDENCE OF THE PARTIES ATTRIBUTED TO THE ALLEGED TRANSACTION. THE SAID PAPER, THEREFORE, DOES NOT COME WITHIN THE COMPASS OF THE DEFINI TION OF THE WORD, 'DOCUMENT' TO BE USED AS AN EVIDENCE. THE PAPER SEIZED, THEREFORE, HAS NO EVIDENTIARY VALUE AND ACCORDINGLY THE SAME CANNOT FORM THE BASIS FOR ASSESSING THE UNDISCLOSED INCOME. (V) DECISION OF DELHI ITAT IN CASE OF SMC BROKERS LIM ITED V/S DCIT 109 TTJ 700 WHEREIN TRIBUNAL HAS HELD THAT DIARY SEIZED WAS NOT CONTAINING ANY EVIDENCE REGARDING ANY RECEIPTS OF MONEY BY WAY OF CHEQUES OF RS. 50,00,000 EACH AND ALSO THE DIARY WAS NOT WRITTEN BY ASSESSEE OR HIS EMPLOYEES. THERE WAS NO EVID ENCE ON RECORD TO SUBSTANTIATE THAT ASSESSEE HAS EARNED ANY UNDISCLOSED INCOME HENCE ADDITION BASED ON DUMB DOCUMENT IS DELETED. 3.4 FURTHER IT MAY ALSO BE KINDLY NOTED THAT, EXCEPT FOR THE AFORESAID DUMB DOCUMENTS, NO INCRIMINATING DOCUMENTS AND EVIDENCE S WERE FOUND DURING THE COURSE OF SEARCH IN CASE OF THE APPELLANT WHICH WOULD ESTABLISH THAT ANY MONEY IN RESPECT OF THE ALLEGED LAND TRANSACTION HAS EVER BEEN RECEIVED BY THE APPELLANT. IT IS SUBMITTED THAT THE ENTIRE ADDITION HAVING BEEN MADE BY THE ID. ASSESSING OFFICER ONLY ON PRESUMPTION AND SURMISES AND WITHOUT BRINGING ANY CORROBORATIVE EVIDENCE FOR ALLEGED CASH RECEIPT OF RS.31,03,000/ - BY THE APPELLANT, DESERVES TO BE DELETED. IN THIS CONNECTION THE APPELLANT RELIES ON FOLLOWING: (I) DECISION OF DELHI TRIBUNAL IN CASE OF MAHAN FOODS LTD. V. CIT (2009) 27 DTR 185, WHEREIN THE HON'BLE ITAT HAVE HELD AS UNDER: SEARCH AND SEIZURE - BLOCK ASSESSMENT - COMPUTATION OF UNDISCLOSED INCOME - ALTHOUGH THE CONTENTS OF THE RELEVANT SEIZED DOCUMENTS SHOW THAT THE AM OUNTS MENTIONED THEREIN RELATE TO SOME EXPENDITURE, IN THE ABSENCE OF ANY OTHER EVIDENCE FOUND DURING THE COURSE OF SEARCH OR BROUGHT ON I.T. (SS) A NO. 484 /AHD/20 11 A.Y. 2007 - 08 PAGE NO ACIT VS. JAYENDRA M. DESAI 8 RECORD BY THE AO TO SHOW THAT THE SAID EXPENDITURE WAS ACTUALLY INCURRED BY THE ASSESSEE, THE SAME CANNOT BE ADDED TO T HE UNDISCLOSED INCOME OF THE ASSESSEE BY INVOKING PROVISIONS OF S. 69C - ASSESSEE EXPLAINED THAT THE SAID ENTRIES REPRESENTED ESTIMATES MADE BY EMPLOYEES IN RESPECT OF PROPOSED EXPENDITURE - THERE IS NO EVIDENCE ON RECORD TO REBUT/CONTROVERT THE SAID EXPLA NATION - ADDITIONS NOT SUSTAINABLE (II) DECISION OF GUJARAT HIGH COURT IN CASE OF DCIT V. JIVANLAL NEBHUMAL (HUF) [2004] 134 TAXMAN 660 (GUJ.) WHEREIN THE HON'BLE HIGH COURT HAVE HELD AS UNDER, SECTION 69 OF THE INCOME - TAX ACT, 1961 - UNEXPLAINED INVESTMENTS - TRIBUNAL HAVING FOUND THAT THERE WAS NO MATERIAL ON RECORD TO INDICATE THAT ASSESSEE - HUF, WHOSE FAMILY HAD 50 PER CENT SHARE IN J COMPANY, HAD IN FACT PAID ANY 'ON - MONEY' TO SAID J COMPANY IN RESPECT OF SHOPS PURCHASED BY THEM OVER AND ABOVE AMOUNT RECO RDED IN THEIR BOOKS OF ACCOUNT, DELETED ADDITION MADE BY ASSESSING OFFICER AND CONFIRMED BY COMMISSIONER (APPEALS), ON ACCOUNT OF UNEXPLAINED INVESTMENTS AND ALSO REDUCED ADDITION IN RESPECT OF LOW HOUSEHOLD EXPENSES - FURTHER, QUESTION WITH REGARD TO LEVY OF INTEREST UNDER SECTION 139(8)7215 WAS RESTORED BACK TO FILE OF ASSESSING OFFICER FOR FRESH ADJUDICATION IN ACCORDANCE WITH LAW AFTER GIVING OPPORTUNITY OF HEARING TO ASSESSEE - WHETHER SINCE TRIBUNAL HAD APPRECIATED FACTS AND EVIDENCE ON RECORD AND HAD COME TO CONCLUSION, NO SUBSTANTIAL QUESTION OF LAW, MUCH LESS ANY QUESTION OF LAW, AROSE OUT OF TRIBUNAL'S ORDER - HELD, YES THE APPELLANT STATES THAT IN ITS CASE, ALSO NO EVIDENCE IS PRESENT EXCEPT THE NOTINGS ON THE LOOSE PAPER SO AS TO ALLEGE THAT THE APPELLANT HAS MADE RECEIVED SUCH INCOME AS ALLEGED.BY ASSESSING OFFICER HENCE ENTIRE ADDITION MADE BY AO BII THE BASIS OF PRESUMPTIONS AND WITHOUT BRINGING ON ANY CORROBORATIVE EVIDENCE IN SUPPORT OF THE SAME, IS UNWARRANTED AND UNJUSTIFIED AND HENCE THE S AME DESERVES TO BE DELETED. 3.5 WITHOUT PREJUDICE TO ABOVE, APPELLANT SUBMITS THAT AS STATED ABOVE AT PARA 3.2, THE LAND IN QUESTION WAS PURCHASED BY THE FATHER OF APPELLANT ALONG WITH OTHER PARTNERS AND THAT THE APPELLANT WAS NEVER A PARTY TO THE T RANSACTION. HENCE, UNDER SUCH CIRCUMSTANCES THE ADDITION, IF ANY, IS CONFIRMED IN THE HANDS OF THE APPELLANT IN VIEW OF THE FACT THAT THE LAND IS PURCHASED BY THE FATHER OF THE APPELLANT, I.T. (SS) A NO. 484 /AHD/20 11 A.Y. 2007 - 08 PAGE NO ACIT VS. JAYENDRA M. DESAI 9 THEN ALSO THE AMOUNT OF ADDITION IS TO BE RESTRICTED TO THE SHARE OF APPELLANT'S FATHER IN THE IMPUGNED LAND AND THAT THE ENTIRE AMOUNT OF RS.31,03,POP/ - CAN NEVER BE TAXED IN THE HANDS OF APPELLANT.' . 6. I HAVE CONSIDERED THE SUBMISSIONS OF TH E APPELLANT. I HAVE ALSO GONE THROUGH THE COPIES OF THE SEIZED DOCUMENTS ON T HE BASIS - OF WHICH, THE AO HAS MADE ADDITION AND ALSO GONE THROUGH THE STATEMENT OF THE APPELLANT RECORDED DURING THE COURSE OF SEARCH. IN RESPONSE TO QUESTION NUMBER 16 OF THE STATEMENT OF THE APPELLANT RECORDED ON 23/5/2008 DURING THE COURSE OF SEARCH, TH E APPELLANT HAS CATEGORICALLY STATED THAT - THE AMOUNT OF RS. 21 LACS WAS ADVANCED BY THE PURCHASER FOR THE PURPOSE OF DISTRIBUTING THE SAME TO THE POWER OF ATTORNEY HOLDERS AS WELL AS TO THE FARMERS, THE RECEIPT OF WHICH IS DATED 20/10/2006 AND IS PLACED AT P AGE NUMBER 98 OF THE SEIZED ANN EXURE. FURTHER THE RECEIPTS OF RS. 1.50 LACS AND RS. 3.50 LACS PAID BY THE LAND PURCHASERS FOR THE LAND OF BLOCK' NUMBER 1735 TO BE PAID TO THE POWER OF ATTORNEY HOLDER SHRI DINESH BHAI AMBALAL, WHICH ARE RESPECTIVELY DATED 12/1/2007 AND 11/1/2007 WHICH WAS PAID BY THE FATHER OF THE APPELLANT AS WELL AS THE REST OF THE PARTNERS. ON THE PERUSAL OF 7/12 EXTRACTS OF THE LAND IT IS SEEN THAT THE LAND HAS 'BEEN REGISTERED IN THE NAME OF THE FOLLOWING PERSONS: JAYENDRA MAVJIBHAI DESAI DETAILS OF ADDITION OF RS. 31,00,033 IN A. Y. 2007 - 08 S.N O PAGE NO. OF SEIZED DOCUM ENT VOUCHE R NO. AMOUNT BLOCK NO. NAME OF SELLER AS PER SIZED MATERIAL NAME OF OWNERS AS PER 7/12 1 73 10,000 NA THAKOR KALAJI BHALAJI 7/1 2 NOT AVAILABLE 2 74 25,000 NA THAKOR RAMANJI MATHURJI I.T. (SS) A NO. 484 /AHD/20 11 A.Y. 2007 - 08 PAGE NO ACIT VS. JAYENDRA M. DESAI 10 3 75 6,000 NA 4 76 11,000 1767 THAKOR PANKAJJI KHERAJI RAMCHANDRA RAGHABHAI PATEL, KANUBHAI NATVERBHAI PATEL, MAVJIBH HARIBHA I, LIMESHBHAI GOVINDBHAI, GOVINDBHAI.JQITARAM HUF, LEELABEI SHAKARABHAI.AND NIRAHJANBHAI JAYANTILAL. 5 77 11,000 6 78 14,000 7 79 5,000 N.A. THAKOR BHUPATJI CHELAJI 7/1 2 NOT AVAILABLE 8 80 50,000 NA. 10 82 5,000 NA. THAKOR KANTIJI VANAJI 7/1 2 NOT AVAILABLE 11 83 50,000 1752, 1758 AND 1763 THAKOR ISHWARJI SHAKARAJI AN D/OR THAKOR PRAHLADJI SHAKARAJI RAMCHANDRA RAGHABHAI PATEL, KANUBHAI NATVERBHAI PATEL, MAVJIBRI HARIBHAI, UMESHBHAI GOVINDBHAI, GOVINDBHA I JOITARAM HUF, LEELABEI SHAKARABHAI AND NIRANJANBHAI JAYANTILAL. 12 84 50,000 13 85 50,000 14 86: 50,000 I.T. (SS) A NO. 484 /AHD/20 11 A.Y. 2007 - 08 PAGE NO ACIT VS. JAYENDRA M. DESAI 11 15 87 5,000 BHUYANMOTI BLOCK NO. 1755 THAKOR BHAGAJI BHUPTAJI THAKOR JENAJI BHUPATAPATAJI 16 88 10,000 BHUYANMOTI BLOCK NO. 1768 THAKOR BHUPATJI CHELAJI 7/1 2 NOT AVAILABLE 17 89 50,000 BHUYANMOTI BLOCK NO. 1747 & 1743 THAKOR RAMANJI GHABAJI THAKOR SHANKERJI NATHAJI KANAJI, THAKOR RAMAJI GHABHAJI. THAKOR RAMCHANDRA RAGHABHAI PATEL, 18 90 51,000 BHUYANMOTI BLOCK NO. 1752, 1758 AND 1763 PRAHLADJI SHAKARAJI KANUBHAI NATVERBHAI PATEL, MAVJIBH HARIBHAI, UMESHBHAI GOVINDBHAI, THAKOR LS HWARJI GOVINDBHAI JOITARAM HUF, LEELABEI SHAKARABHAI AND NIRANJANBHAI 19 91 50,000 1758, 1752 AND 1763 SHAKARAJI JAYANTILAL. RAMCHANDRA RAGHABHAI PATEL, KANUBHAI NATVERBHAI PATEL, MAVJIBH HARIBHAI, UMESHBHAI GOVINDBHAI, 20 96 350,000 BHUYANMOTI BLOCK NO. 1735 PATEL GOVINDBHAI JOITARAM HUF, LEELABEI SHAKARABHAI AND NIRANJANBHAI JAYANTILAL. I.T. (SS) A NO. 484 /AHD/20 11 A.Y. 2007 - 08 PAGE NO ACIT VS. JAYENDRA M. DESAI 12 BHUYANMOTI BLOCK NO. DINESHBHAI 21 97 150,000 1735 AMBALAL RAMCHANDRA RAGHABHAI PATEL, KANUBHAI NATVERBHAI PATEL, MAVJIBH HA RIBHAI, UMESHBHAI GOVINDBHAI, BHUYANMOTI BLOCK NO. GOVINDBHAI JOITARAM HUF, LEELABEI BLOCK NO 1737BAND KALABHAI SHAKARABHAI AND NIRANJANBHAI 22 98 2,100,000 1739, 1741 AND 1740 GHELABHAI JAYANTILAL, . . TOTAL 3,103,000 7. FROM THE ABOVE, IT IS CLEAR THAT THE LAND IN QUESTION IS NOT REGISTERED IN THE NAME OF THE APPELLANT BUT IN THE NAME OF HIS FATHER SHRI MAVJI BHAI HARIBHAI ALONGWITH OTHER - PERSONS. THIS FACT WAS ALSO STATED BY THE APPELLANT IN HIS STATEMENT REC ORDED DURING THE COURSE OF SEARCH ON 23/5/2008. EVEN, DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE SAME STAND WAS TAKEN BY THE APPELLANT. IT WAS STATED BEFORE THE AO THAT THE TRANSACTIONS IN THE SEIZED PAPERS DO NOT PERTAIN TO THE APPELLANT. HOWEVER, TH E AO DID NOT ACCEPT THE CONTENTION OF THE APPELLANT AND MADE ADDITION OF RS. 31, 03, 000 IN THE HANDS OF THE APPELLANT WITHOUT GIVING ANY VALID REASON FOR THE SAME. IN MY OPINION, THE AO WAS NOT JUSTIFIED IN TREATING THE TRANSACTIONS RECORDED IN THE SEIZED PAPERS AS BELONGING TO THE APPELLANT FOR THE REASONS: I.T. (SS) A NO. 484 /AHD/20 11 A.Y. 2007 - 08 PAGE NO ACIT VS. JAYENDRA M. DESAI 13 A. NOWHERE IN THE SEIZED PAPERS, THE NAME OF THE APPELLANT IS APPEARING. B. IN FACT, THE LAND HAS BEEN PURCHASED BY THE FATHER OF THE APPELLANT ALONGWITH 7 - 8 OTHER PARTNERS - AND THIS FACT WAS ALSO DIS CLOSED BY THE APPELLANT IN HIS STATEMENT RECORDED AT THE TIME OF SEARCH. C. THE AO HAS WRONGLY CONSIDERED THE TRANSACTIONS RECORDED IN THE SEIZED PAPERS AS SALE OF THE LAND WHEREAS IN FACT, THE TRANSACTIONS RECORDED REPRESENT THE PURCHASE OF LAND. THIS FA CT IS CORROBORATED FROM THE FACT THAT THE SAID LAND HAS BEEN REGISTERED IN THE NAME OF THE FATHER OF THE APPELLANT AS WELL AS OTHER CO - OWNERS BEFORE THE DATE OF SEARCH DURING THE PERIOD RELEVANT TO ASSESSMENT YEAR 2007 - 2008. D. MY ATTENTION WAS ALSO DRAWN TO THE NOTICE UNDER SECTION 153C OF THE INCOME TAX ACT ISSUED BY THE INCOME TAX OFFICER WARD 3 MEHSANA DATED 30/12/2010 IN THE NAME OF THE FATHER OF THE APPELLANT SHRI MAVJIBHAI HARIBHAI. IT WAS STATED BY THE AR THAT MOST PROBABLY THIS NOTICE HAS BEEN ISS UED BY THE AO ON THE GROUND THAT THE INVESTMENT IS MADE BY THE FATHER OF THE APPELLANT AS THE LAND IN QUESTION IS NOT REGISTERED IN THE NAME OF THE APPELLANT BUT IN THE NAME OF HIS FATHER. 8. I AM SATISFIED THAT THE SEIZED DOCUMENTS IN THE NATURE OF VOUCH ERS REPRESENT THE INVESTMENT MADE BY THE FATHER OF THE APPELLANT AS WELL AS OTHER CO - OWNERS. THE AO HAS 'WRONGLY MADE ADDITION OF THE WHOLE INVESTMENTS IN THE HANDS OF THE APPELLANT WHEREAS IN FACT, THERE IS NO INDICATION THAT THE APPELLANT HAS MADE ANY IN VESTMENT. IN FACT, SOME OF THE INVESTMENTS HAVE BEEN MADE BY THE FATHER OF THE APPELLANT AND IF AT ALL, THE ADDITION WAS WARRANTED, THE SAME SHOULD HAVE BEEN MADE IN THE HANDS OF THOSE PERSONS WHO HAVE MADE INVESTMENTS AND NOT IN THE HANDS OF ONE SINGLE PE RSON. AS CAN BE SEEN FROM HAK PATRAK OF THE SURVEY NUMBER 1741, THE SHARE OF INVESTMENT OF THE FATHER OF THE APPELLANT IS ONLY 20% AS AGAINST 10% SHARE EACH OF RAMACHANDRA R PATEL AND KANUBHAI PATEL, 12 .5% SHARE EACH OF SHRI UMESH BHAI GOVIND BHAI AND GOV INDBHAI JOITARAM HUF, 30% SHARE OF LEELABEN SHANKARBHAI AND 5% SHARE OF NIRANJAN BHAI JAYANTILAL. SIMILARLY, THE SHARE OF THE FATHER OF THE APPELLANT IN THE LAND BEARING SURVEY NUMBER 1767 IS ONLY 20%. THERE ARE SIX OTHER CO - OWNERS OF THIS LAND WHICH WAS R EGISTERED IN THEIR NAME ON 21/2/2007, THAT IS, BEFORE THE DATE OF THE SEARCH. IT I.T. (SS) A NO. 484 /AHD/20 11 A.Y. 2007 - 08 PAGE NO ACIT VS. JAYENDRA M. DESAI 14 WAS ALSO STATED BY THE AR THAT THE APPELLANT HAS NOT INVESTED ANYTHING IN THE SAID PROPERTIES. THE SOURCE OF THE INVESTMENT SHOULD HAVE BEEN EXAMINED BY THE AO IN THE HANDS OF THE FATHER OF THE APPELLANT AS WELL AS OTHER CO - OWNERS. IN OTHER WORDS, THERE IS NO INVESTMENT OF THE APPELLANT IN THE PROPERTY AS MENTIONED ABOVE. THE AO WAS THEREFORE, NOT JUSTIFIED IN MAKING THE ADDITIO N OF RS. 31,03,000 IN THE HANDS OF THE APPELLANT. HE IS DIRECTED TO BE DELETED THE ADDITION. 5. HEARD BOTH SIDES. RECORDS PERUSED. RELEVANT FACTS NARRATED HEREIN ABOVE ARE NOT REPEATED FOR THE SAKE OF BREVITY. THE REVENUE S ARGUMENTS SEEK TO RESTORE THE IMPUGNED ADDITION OF RS. 31,3000/ - BEING MADE I N THE ASSESSEE S HANDS AS HIS UNACCOUNTED INCOME RECEIVED AS PROFITS FROM THE PARTIES HEREINABOVE. THE ASSESSEE S STAND FROM THE BEGINNING DENIES ANY INTEREST IN THE LAND PURCHASED BY HIS FATHER AND OTHER VENDEES. THIS CASE FILE CONTAINS RELEVANT REVENUE RECORD FORM 7/12 PERTAINING TO VILLAGE BHOYAN MOTI. THE REVENUE DOES NOT POINT OUT ASSESSEE S NAME AT ANY PLACE THEREIN. THE CIT(A) S FINDINGS EXTRACTED HEREINABOVE SPECIFICALLY NAME VENDORS AND VENDEES OF THE LAND SOLD/PURCHASED. AND ALSO THAT THE ASS ESSEE S FATHER AND SIX OTHER CO - OWNERS ARE THE PURCHASERS IN SALE DEED DATED 21 - 02 - 2007 EXECUTED MUCH PRIOR TO THE IMPUGNED SEARCH BEING CONDUCTED ON 23 - 03 - 2008. THERE IS NO REBUTTAL FORTHCOMING T O THE FINDINGS THAT ASSESSEE S FATHER AND OTHER VENDEES AL READY STAND ASSESSED. WE QUOTE ALL THIS OVERWHELMING EVIDENCE AND HOLD THAT THE CIT(A) HAS RIGHTLY DELETED THE IMPUGNED ADDITION OF UNACCOUNTED INCOME OF RS. 31,3000/ - MADE BY THE ASSESSING OFFICER . THE REVENUE S SOLE SUBSTANTIVE GROUND IS REJECTED. I.T. (SS) A NO. 484 /AHD/20 11 A.Y. 2007 - 08 PAGE NO ACIT VS. JAYENDRA M. DESAI 15 6. THIS REVENUE S APPEAL IS DISMISSED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 04 - 0 9 - 2015 SD/ - SD/ - ( G.D. AGRAWAL ) ( S. S. GODARA ) VICE PRESIDENT JUDICIAL MEMBER AHMEDABAD : DATED 04 /0 9 /2015 AK / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,