Shri Radhey Shyam Samdani, BHILWARA V. ACIT, BHILWARA

ITSSA 5/JODH/2009

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 9200 (ITAT-JODHPUR)
• Duration Of Justice: 4 year(s) 20 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 26-04-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 12-03-2013
• Assessment Year: misc
• Appeal Filed On: 06-04-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DEEPAK SEHGAL
• Assessee Lawyers: U C JAIN SHRI RAJENDRA JAIN
• Keywords: Search and seizure; Loose papers; Document seized; Reasonable cause; Corroborative evidences; Block assessment; Documents seized
• Section: 273B; 143(3)

Judgement Text

1 IN THE INCOME TAX APPELALTE TRIBUNAL: JODHPUR BENCH : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITSSA NOS. 02, 05/JODH/2009) (A. YS. B P. 1997-98 TO 2002-03 UPTO 17.7.2002) SHRI RADHEY SHYAM SAMDANI VS. ACIT 23, MAHESH COLONY BHILWARA BHILWARA PAN NO. : ADQPS 6316 Q ITSSA NO. 04/JODH/2009) (A. YS. B P. 1997-98 TO 2002-03 UPTO 17.7.2002) DY. CIT VS. SHRI RADHEY SHYAM SAMDANI CIRCLE 23, MAHESH COLONY BHILWARA BHILWARA PAN NO. : ADQPS 6316 Q (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI U.C. JAIN SHRI RAJENDRA JAIN DEPARTMENT BY : SHRI DEEPAK SEHGAL - DR DATE OF HEARING : 12/03/2013. DATE OF PRONOUNCEMENT : 26/04/2013. PER HARI OM MARATHA: J.M. ALL THE ABOVE-CAPTIONED APPEALS ARE BEING DECIDED B Y A COMMON ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 2 IT[SS]A NOS 2 & 5/JU/2009 2. THESE ARE CROSS-APPEALS DIRECTED AGAINST THE ORD ER OF THE LD. CIT(A) DATED 22.12.2008 EMANATING FROM THE BLOCK AS SESSMENT ORDER DATED 22.11.2007 PASSED U/S 158BC R.W.S 143(3) OF T HE INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT', FOR SHO RT] FOR THE BLOCK PERIOD COMPRISING OF A.YS 1997-98 TO 2002-03 AND UP TO 17.7.2002. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT A SEARCH AND SEIZURE OPERATION U/S 132A OF THE ACT WAS CONDUCTED IN THE SAMDHANI GROUP INCUDING AT THE RESIDENCE OF SHRI RADHEY SHYAM SAMD HANI, THE ASSESSEE BEFORE US ON 17.7.2002. DURING THIS SEARCH, A SUM OF RS. 2,34,405/- WAS FOUND IN CASH AT HIS RESIDENCE. IN HIS STATEME NT RECORDED POST SEARCH, THE ASSESSEE STATED THAT THIS CASH BELONGED TO ELEVEN OF HIS FAMILY MEMBERS SEPARATELY ASSESSED TO INCOME-TAX IN THEIR INDIVIDUAL RIGHTS. DURING THE COURSE OF SEARCH, APART FROM CA SH, GOLD/SILVER JEWELLERY AND CERTAIN LOOSE PAPERS WERE FOUND AND S EIZED MARKED AS ANNEXURE A-3. CONSEQUENTLY, BLOCK ASSESSMENT WAS CO MPLETED U/S 158BC R.W.S 143(3) OF THE ACT, ORIGINALLY, ON 30.7. 2004 IN WHICH ADDITION OF RS. 20,20,750/- WAS MADE ON ACCOUNT OF UNRECORDED INVESTMENT IN LOANS ON THE BASIS OF ENTRIES FOUND R ECORDED ON THE LOOSE 3 PAPER NO. 58 OF ANNEXURE A-3. THE ASSESSEE FILED A PPEAL AND THE LD. CIT(A) VIDE HIS ORDER DATED 30.3.2005 HAS RESTRICTE D THE ADDITION TO RS. 1,90,025/- ONLY. THE DEPARTMENT WENT IN APPEAL AND THE ITAT, VIDE THEIR ORDER DATED 20.10.2006 HAD RESTORED THE MATTE R TO THE FILE OF THE A.O. WITH THE FOLLOWING OBSERVATIONS AND DIRECTIONS : 'WE HAVE PERUSED THE FACTS OF THE CASE AND ALSO THE SEIZED PAPER. THE ASSESSEE IN HIS STATEMENT US 132(4) HAS ADMITTE D THAT THESE ARE CASH LOANS AND THIS IS CONFIRMED BY THE ASSESSE E IN HIS SUBMISSION BEFORE THE ID CIT(A) ALSO. THEREFORE, TH ERE IS NO DOUBT THAT THE TRANSACTIONS NOTED ON THE LOOSE PAPER NO. 58 ARE THE TRANSACTIONS PERTAINING TO CASH LOANS AND THE TRANS ACTIONS ON LOOSE PAPER NO. 53 HAD BEEN DELETED BY THE ID CIT(A) WITH OUT VERIFYING ANY EVIDENCE IN THAT REGARD. THE LOWER AUTHORITIES AND THE ASSESSEE ARE MAKING A CASE ONLY ON THE BASIS OF THE STATEMEN T GIVEN BY THE ASSESSEE AT THE TIME OF SEARCH AND THE INTERPRETATI ONS ABOUT TWO ZEROS AND THREE ZEROS WHICH HAS TO BE FIXED ON THE CODED AMOUNT HAS CREATED A CONFUSION AMONGST THE MINDS OF LOWER AUTHORITIES. BUT NONE OF THE LOWER AUTHORITIES HAS TRIED TO VERI FY THE SAID TRANSACTIONS FROM THE CONCERNED PERSONS NOTED AT LO OSE PAPER NO. 58 AND 53 WITH RESPECT TO WHICH THE AO HAD MADE AN ADDITION OF RS.20,20,750/-. THE FACTS OF THE MATTER CAN ONLY BE CONFIRMED FROM THE PERSONS WITH WHOM THE ASSESSEE HAS DEALT W ITH AND/OR HAS GIVEN THE CASH LOANS. ON PERUSAL OF THE LOOSE P APER A-58 IT IS NOT CLEAR WHETHER THE SAID AMOUNT IS A CASH LOAN OR AN INTEREST ON CASH LOAN. IF IT IS FOUND TO BE AN INTEREST, THEN I T HAS TO BE FOUND 4 OUT WHETHER THE ASSESSEE HAS DECLARED THE CASH LOAN S OR NOT. IF IT IS CASH LOAN, THEN WHAT IS THE ACTUAL AMOUNT OF CAS H LOAN GIVEN TO VARIOUS PARTIES NOTED IN THE LOOSE PAPER NO. 58. TH EREFORE, THE MATTER HAS TO BE EXAMINED IN DETAIL FROM THE VARIOU S PARTIES NOTED IN THE LOOSE PAPER NO. 58 AND SIMILARLY ON THE LOOS E PAPER NO. 53 WITH RESPECT TO WHICH AN ADDITION OF AN AMOUNT OFRS .20,20,750/- HAS BEEN MADE BY THE AO. THE AO IS DIRECTED TO TAKE THE DETAILS AND ADDRESSES OF THE SAID PARTIES FROM THE ASSESSEE OR FIND OUT THE SAME AND ISSUE SUMMONS TO ALL THE PARTIES AND CONFI RM THE ACTUAL AMOUNT OF CASH LOAN AND/OR INTEREST INVOLVED IN THE SAID LOOSE PAPERS AND DECIDE THE MATTER ACCORDINGLY. IN THE IN TEREST OF JUSTICE, THEREFORE, THE MATTER IS RESTORED TO THE F ILE OF THE AO WHO WILL FOLLOW THE DIRECTIONS AS MENTIONED HEREINB EFORE. ' 4. PURSUANT TO THE ABOVE DIRECTIONS A FRESH BLOCK A SSESSMENT WAS TO BE COMPLETED BY THE A.O. BUT THE A.O. HAS REPEATED THE IMPUGNED ADDITION VIDE HIS ORDER DATED 22.11.2007 BY MAKING THE FOLLOWING OBSERVATIONS: ACCORDINGLY THE CASE WAS FIXED ON 03.10.2007 BY IS SUE OF NOTICE U/S 143(2) FOR 15.10.2007. ON THE FIXED DATE , SHRI ASHOK KUMAR KABRA, ADVOCATE/AR OF THE ASSESSEE ATTENDED O N BEHALF OF THE ASSESSEE AND SUBMITTED THAT THE ASSESSEE HAS FI LED AN APPEAL TO THE HON'BLE HIGH COURT, JODHPUR ON THE SET-ASIDE ISSUE. HE HAS ALSO REQUESTED TO ADJOURN THE CASE TILL THE DECISIO N OF APPEAL. CONSIDERING HIS REQUEST THE CASE IS ADJOURNED FOR 1 2.11.2007. ON 12.11.2007, AGAIN SHRI KABRA ATTENDED AND STATED TH AT THE CASE 5 HAS BEEN FIXED FOR HEARING ON 14.11.2007 AT HIGH CO URT, JODHPUR AND THE CASE WAS ADJOURNED FOR 19.11.2007 ON HIS RE QUEST. ON 19.11.2007, SHRI RAJESH SAMDANI, SON OF THE ASSESSE E ATTENDED THE OFFICE ALONGWITH APPLICATION SIGNED BY SHRI ASH OK KUMAR KABRA, ADVOCATE/AR STATING THEREIN THAT 'DUE TO MAR RIAGE OF MY DAUGHTER I UNDERSIGNED (SIC-AM) UNABLE TO PREPARE T HE CASE. THEREFORE, YOU ARE REQUESTED KINDLY (SIC-TO) ADJOUR N THE CASE FOR NEXT SUITABLE DATE AFTER 10 TH DAY OF DECEMBER 2007'. SINCE THE CASE IS GOING TO BE TIME BARRED BY 31 S ' DECEMBER 2007 AND THREE OPPORTUNITIES HAVE ALREADY BEEN ALLOWED TO THE ASSE SSEE WITHOUT ANY RESPONSE FROM HIM. IN VIEW OF THE ABOVE FACTS, IT IS CRYSTAL CLEAR THA T THE ASSESSEE IS NOT INTERESTED TO COMPLETE THE ASSESSMENT AT THIS S TAGE AND HE IS ONLY INTERESTED IN THE DECISION OF HON'BLE HIGH COU RT, JODHPUR ON THE SET ASIDE ISSUE. THE ASSESSEE HAS FAILED TO FUR NISH ANY SUBMISSION WITH REGARD TO SET ASIDE ISSUE AND THERE FORE, THE ADDITION OF RS.20,20,750/- MADE BY THE AO AND RESTR ICTED TO RS.1,90,025/- BY THE CIT(A) IS HEREBY REINSTATED. ' 5. AGAINST THIS ORDER, THE ASSESSEE AGAIN FILED APP EAL BEFORE THE LD. CIT(A). BEFORE HIM, THE ASSESSEE HAS FILED A DETAIL ED WRITTEN SUBMISSIONS, IN SUPPORT OF GROUNDS RAISED IN MEMO O F APPEAL. THE SUBMISSIONS OF THE ASSESSEE WERE AS UNDER: 6 'ADDITION WAS MADE ON THE BASIS OF LOOSE PAPER NO. 58 OF ANNEXURE A-3 BY LINKING WITH OTHER IRRELEVANT LOOSE PAPER NO. 53 WHICH WAS FOUND & SEIZED DURING THE COURSE OF SEARC H ON 17.07.2002. STATEMENT OF THE ASSESSEE APPELLANT RECORDED ON 05. 09.2002 AND STATED IN ANSWER TO QUESTION NO. 10 IN RESPECT OF A MOUNT WRITTEN ON THE SAID LOOSE PAPER NO. 58 OF ANNEXURE A-3 THAT BY PUTTING & ADDING OF '00 BEHIND THE FIGURES THE ACTUAL AMOUNT WILL BE ARRIVED & CALCULATED BUT THE LEARNED A.O. HAVING OF PREDETE RMINED VIEWS PUTTING & ADDING OF '000 INSTEAD OF '00 & CALCULATE D THE FIGURES AND MADE THE ADDITIONS THE AMOUNT OF RS.2020750/-. IN RESPECT OF OTHER IRRELEVANT LOOSE PAPER NO. 53 WHICH WAS FO UND & SEIZED DURING THE SEARCH WITHOUT GOING ON THE ACTUAL FACTS OF THE EASY LINKED WITH THE LOOSE PUPA:* NO. 58 OF ANNEXURE A-3 & WITHOUT CONSIDERING WORD TO WORD & POINT TO POINT RECORDING OF STATEMENT OF THE ASSESSEE APPELLANT AND PRESUMING OBSERVING WRONGFUL CONCLUSION LINKING WITH OTHER RELEVANT LOOSE PAPER NO. 53 OF ANNEXURE A-3 MADE THE ADDITIONS ON ACCOUNT OF UNREC ORDED INVESTMENT IN LOANS IS INCORRECT. TOTAL EXPLANATIONS WITH CORROBORATE EVIDENCES WELL SUBMITTED BEFORE THE LEARNED A.0. DURING THE COURSE OF ASSESS MENT PROCEEDING U,S 158BC BUT WITHOUT CONSIDERING THE FA CTS OF THE CASE PASSED AN IMPUGNED ORDER AGAINST WHICH WHAT SO EVER EVIDENCES THE ASSESSEE APPELLANT REPRODUCED & ARGUE D BEFORE THE WORTHY COMMISSIONER OF INCOME TAX (APPEALS), GA NDHI NAGAR, HOLDING CONCURRENT JURISDICTION OF CIT(APPEA LS), AJMER & BY 7 FOLLOWING OUR VIEWS DELETED THE ADDITIONS OF RS.183 0725/- AND SUSTAINED THE ADDITION OF RS.190025/- MARKING TO TH E STRENGTH OF DOCUMENTS/LOOSE PAPERS NO. 53 & 58. IN SUPPORT THER EOF THE COPY OF WRITTEN SUBMISSION/ARGUMENTS DATED 18.03.2005 AL ONGWITH CORROBORATIVE EVIDENCES SUBMITTED BEFORE THE WORTHY CIT(APPEALS) HERETO ENCLOSED BEFORE YOUR GOOD HONOUR & ALSO ENCL OSED THE COPY OF ORDER OF THE INCOME TAX APPELLATE TRIBUNAL, JAIP UR BENCH, JAIPUR WHICH DECIDED IN THE CASE OF SON OF THE ASSE SSEE APPELLANT SHRI RAJESH SAMDANI WHERE DECIDED THE MATTER AT PAG E 18 OF THE SAID ORDER WHICH HIGHLIGHTED & MENTIONING TO THAT T HE DOCUMENTS WERE SIMILAR TO PAGE 58 WHEREIN APPELLANT'S FATHER ADMITTED THAT THE ACTUAL FIGURE COULD BE WORKED FOR PUTTING TWO ' 00 AFTER THE FIGURES -WRITTEN ON THE DOCUMENTS & SIMULTANEOUSLY GIVEN THE FINDING CONSIDERING VARIOUS FACTS THAT IN RESPECT O F THESE DOCUMENTS I.E. PAGE 45 & 46 FIGURES SUPPLEMENTED BY TWO '00 WOULD REPRESENT THE ACTUAL AMOUNT OF TRANSACTION AN D IN THE END OF THE SAID ORDER AT PAGE 26 IN LAST THE ITAT HAS G IVEN THE DECISION & WELL FOLLOWED THE ORDER OF THE ID. CIT ( A) WHO RIGHTLY OBSERVED WITH REGARD TO THE EXPLANATION OF THE ASSE SSEE AS INDICATED IN ANSWER TO QUESTION NO. 12 OF THE STATE MENT DATED 05.09.2002 THAT TWO ZEROS SUPPLEMENTED TO THE FIGUR ES REPRESENTED THE ACTUAL AMOUNT OF TRANSACTIONS SAME SHOULD BE CONSIDERED AFTER PUTTING TWO ZEROS AFTER THE FIGURE S IN RESPECT OF LOOSE PAPER NO. 58 OF ANNEXURE A-3 WHICH FOUND & SE IZED DURING THE COURSE OF SEARCH. IN RESPECT OF SUSTAINING AMOUNT OF RS.190025/- WE S UBMIT THE TOTAL AMOUNT BELONGS TO THE PETTY LOANS GIVEN TO THE VARI OUS PARTIES & SAME WERE RECOVERED WITH INTEREST FROM THEM BEFORE THE DATE OF 8 SEARCH 17.07.2002 & TOTALLY ARE MENTIONED IN DECODI NG ON THE SEIZED LOOSE PAPER NO. 58 WHICH WERE CONFIRMED BY T HE ASSESSEE APPELLANT DURING THE RECORDING OF THE STATEMENT ON 05.09.2002. THE AFORESAID LOANING AMOUNT OF RS.190025/- BELONGS TO THE PART OF REGULAR BUSINESS & RELATED TO THE ASSESSEE & HIS FAMILY MEMBERS COMING FROM EARLIER PERIOD OF 31.03.2002 WHICH WERE CONFIRMED BY THE ASSESSEE APPELLANT ON 05.09.2002 WHEN THE ST ATEMENT RECORDED U/S 132(4). THE REGULAR RETURNS OF THE ASS T. YEAR 2002- 2003 RELATED TO THE ASSESSEE & HIS FAMILY MEMBERS H AS ALREADY BEEN SUBMITTED TO THE DEPARTMENT BEFORE THE DATE OF SEARCH ON 17.07.2002 WHERE SUNDRY DEBTORS & CASH BALANCE PERF ECTLY SHOWN IN THE BALANCE SHEET OF ALL THE MEMBERS BUT THE SAM E IS ALSO NOT CONSIDERED BY THE LEARNED A.O. & PASSED THE ORDER W ITHOUT MENTIONING OF THIS FACT. DURING THE COURSE OF HEARING OF THE CASE THE CASH F LOW CHART FOR THE PERIOD FROM 01.04.2002 TO 17.07.2002 AND STATEM ENT OF AFFAIRS AS ON 17.07.2002 SHOWING THE TOTAL TRANSACT IONS/LOANS WITH INCOME/RECEIPTS & EXPENDITURE OF THE ASSESSEE AND H IS FAMILY MEMBERS WELL SUBMITTED BUT AGAIN HAVING OF PREDETER MINED VIEWS NEITHER CONSIDERED NOR MENTIONED THE FACTS OF THE C ASE IN THE ORDER. THE SAME FACTS IN RESPECT OF CASH FLOW CHART & STAT EMENT OF AFFAIRS WHICH SUBMITTED TO THE LEARNED A.O. WELL CONFIRMED THROUGH REMAND REPORT DATED 21.03.2005 WHICH CALLED FOR BY THE WORTHY CIT(APPEALS) DURING THE HEARING OF THE APPEAL WHICH RIGHTLY FOLLOWED & MENTIONED THE TOTAL FACTS OF THE CASE IN THE APPEAL ORDER. WE REFER THE SAME FOR RECONSIDERATION. 9 THE LEARNED A.O. HAS IGNORED TO ALL THE FACTS WITHO UT MENTIONING & CONSIDERING TO THE APPEAL ORDER OF THE WORTHY CIT (APPEALS) PASSED THE SET ASIDE ORDER ON THE SPECIFIC ISSUE ON THE BASIS OF LOOSE PAPER NO. 58 OF ANNEXURE A-3 & MADE THE UNWAR RANTED ADDITION IS ILLEGAL. THE LEARNED A. O. HAVING OF PREDETERMINED VIEWS NOT CONSIDERED OF OUR ADJOURNMENT ; APPLICATIONS AND WITHOUT FOLL OWING THE DIRECTION OF THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCH, JAIPUR ON SET ASIDE ISSUE PASSED AN ERRONEOUS ORDER BY MAKING THE ADDITION OF RS. 202075 O/- (1830725+190025) IS ABSO LUTELY WRONG. THE VERSION MENTIONED IN THE ORDER BY THE LEARNED A.O. THE ASSESSEE IS NOT INTERESTED TO COMPLETE THE ASSESSME NT WHICH IS ALSO WRONG, ACTUALLY AT LAST THE A.G. PREDETERMINED VIEWS OUR LAST APPLICATION OF ADJOURNMENT DATED 19.11.2007 RE JECTED AND PASSED THE ORDER ON 22.11.2007 WITHOUT GIVING OF PR OPER OPPORTUNITY WHILE THE CASE GOING ON BARRED BY TIME ON 31.12.2007 THE LEARNED A.O. ALSO MENTIONED IN THE ORDER THE AS SESSEE FAILED TO FURNISH ANY SUBMISSIONS WITH REGARD TO SE T ASIDE ISSUE WHICH IS ALSO ABSOLUTELY WRONG, IN FACT TOTAL EXPLA NATIONS WITH PROPER CORROBORATIVE EVIDENCES LIKE AS TOTAL BALANC E SHEETS WITH COMPUTATION OF INCOME, INCOME & EXPENDITURE ACCOUNT OF WHOLE OF THE BLOCK PERIOD AND STATEMENT OF AFFAIRS AS ON 17. 07.2002 & CASH FLOW CHARTS FROM 01.04.2002 TO 17.07.2002 RELATED T O THE ASSESSEE & HIS FAMILY MEMBERS WELL SUBMITTED DURING THE COUR SE OF ORIGINAL 10 ASSESSMENT PROCEEDING & SAME WERE NEITHER FOLLOWED NOR MENTIONED IN THE ORDER. THE WORTHY PREDECESSOR CIT( APPEALS) HAS RIGHTLY CONSIDERED THE SAME & TOTAL FACTS WORD TO W ORD WELL MENTIONED IN THE APPEAL ORDER DATED 30.03.2005 AT P AGE NO. 50 TO 65. IN ADDITION TO ABOVE SUBMISSIONS IN RESPECT OF LOOS E PAPER NO. 58 SOME AFFIDAVITS OF AVAILABLE PERSONS WHOSE NAMES ME NTIONED ON THE PAPER GIVING OF THEIR PROPER ADDRESSES & WHAT S O EVER TRANSACTIONS MADE WITH THEM AND WHAT SO EVER INCOME EARNED FROM THE PARTIES CONFIRMING TO THAT HERETO ENCLOSED BEFORE YOUR GOOD HONOUR. IN GENERAL PUTTING OF DECODING WE WISH TO SUBMIT TH E ASSESSEE IS NOT HABITUAL TO WRITE THE PAPER IN CODING EXCEPT TO THE LOOSE PAPER NO. 58 WHILE OTHER LOOSE PAPERS LIKE AS LOOSE PAPER NO. 33 & IT BACK SIDE, LOOSE PAPER NO. 34, 43, 44, 57 & 59 W ERE SEIZED WHEREIN THE COMPLETE FIGURE OF AMOUNT ARE MENTIONED AND WELL ACCEPTED BY THE LEARNED A. O. IN ABSENCE OF CONCRETE/POSITIVE/COGENT EVIDENCES AG AINST THE ASSESSEE NO ADDITION CAN BE MADE IN BLOCK ASSESSMEN T. TWO ASYMMETRIC MATTER CANNOT BE COMPARED AND CALCUL ATED IN ONE DIRECTION ON ASSUMPTION BASIS WITHOUT HAVING AN Y CORROBORATIVE EVIDENCES. THEREFORE THE FINDINGS OF THE A. O. ADDING OF DECOD ING '000 INSTEAD OF '00 FOR PARTICULAR LOOSE PAPER NO. 58 & ITS BACK SIDE ON PRESUMPTION BASIS IS ABSOLUTELY ILLEGAL & WITHOUT A NY BASIS & LOOSE PAPER NO. 53 IS IRRELEVANT SHOWING TO THE FACTS THA T THE FIGURE 15 11 MENTIONED IN THE NAME OF MAHESH SONI RELATED TO THE PLOT NO. 135- C, PANCHAVATI YOJANA RS. 15/- PER SQ.FT. THE RATE O F PLOT & MENTIONED THE FIGURE RS.50/- ON 13.04. & RS.50/- ON 16.04 PERSON NAME RAJESH CHATURVEDI RELATED TO THE PARMARTH SEWA RTH ACTIVITIES HENCE TOTAL UNWARRANTED & ARBITRARY ADDI TION MADE ON THIS ACCOUNT DESERVE TO BE DELETED IN WHOLE. ' 6. THE ASSESSEE ALSO FURNISHED EVIDENCE IN THE FORM OF AFFIDAVITS OF VARIOUS PERSONS WHICH WERE SENT TO THE CONCERNED A. O. FOR SEEKING HIS REMAND REPORT ON THE NEW EVIDENCE AND DURING THIS R EMAND PROCEEDINGS, HE EXAMINED TEN PERSONS ON OATH AND RE CORDED THEIR STATEMENTS. 7. AFTER CONSIDERING THE DETAILED REPORT OF THE A.O AND THE SUBMISSIONS OF THE ASSESSEE, IT WAS NOTICED BY THE LD. CIT(A) THAT STATEMENT OF THE ASSESSEE WAS NOT RECORDED DURING S EARCH PROCEEDINGS BUT WAS RECORDED POST SEARCH ON 5.9.2002 I.E. AFTER ABOUT A FORTNIGHT. REGARDING ENTRIES ON PAGE 58 WHILE REPLYING TO QUES TION NO. 12 THE ASSESSEE STATED THAT PAGE 58 CONTAINED A SUMMARY OF PETTY AMOUNTS GIVEN ON LOAN, OUT OF THE BALANCES OF VARIOUS FAMIL Y MEMBERS AND THAT THE ACTUAL AMOUNT WOULD COME AFTER SUFFIXING TWO ZE ROS. HE HAS FURTHER OBSERVED THAT UNDER IDENTICAL FACTS AND CIR CUMSTANCES, THE 12 JAIPUR BENCH OF THE ITAT VIDE ORDER DATED 31.3.2008 IN ITA NO. 124/JP/2005 IN THE CASE OF SHRI RAJESH SAMDHANI, WH O IS THE SON OF THIS ASSESSEE, HAS MADE THE FOLLOWING OBSERVATIONS REGAR DING THE SEIZED DOCUMENTS: I FIND THAT DOCUMENTS AT PAGE 45 & 46 WERE APPAREN TLY INDICATING THE AMOUNTS GIVEN BY THE APPELLANT TO SU NDRY PERSONS, AS ON THESE DOCUMENTS DATE OF ADVANCEMENT, RATE OF INTEREST AND THE DATE OF RETURN OF SAME WAS WRITTEN. FOR PETTY L OANS THERE WAS NO UNIFORM INTEREST RATE AND IT WAS THE MARKET PRAC TICE THAT RATE WOULD DEPEND ON THE AMOUNT, PERIOD AND RELIABILITY OF OTHER PARTY AND MAY SUBSTANTIALLY VARY FROM 0.25 TO 0.6 AS MENT IONED ON THESE DOCUMENTS. THESE DOCUMENTS WERE SIMILAR TO PAGE 58 WHEREIN APPELLANT'S FATHER ADMITTED THAT THE ACTUAL FIGURE COULD BE WORKED FOR PUTTING TWO '00' AFTER THE FIGURES WRITT EN ON THE DOCUMENTS. CONSIDERING VARIOUS FADS AS IN THE CASE OF APPELLANT'S FATHER, SHRI RADHEY SHYAM SAMDANI, I FIND THAT IN R ESPECT OF THESE DOCUMENTS I.E. PAGE 45 AND 46 ALSO FIGURES SUPPLEME NTED BY TWO '00' WOULD REPRESENT THE ACTUAL AMOUNT OF TRANSACTI ON. THIS IS IN TUNE WITH THE MODUS OPERANDI OF THE MONEY LENDING B USINESS OF THE APPELLANT AS BROUGHT OUT IN PARA 2 ABOVE WHICH CLEARLY INDICATED THAT HE WAS NOT ADVANCING SUBSTANTIAL AMO UNTS AS LOAN WITHOUT KEEPING A SECURITY. THE RULE OF DECODING BY PUTTING TWO '00' OR THREE '000' DID NOT APPLY TO MANY OTHER DOC UMENT SUCH AS PAGE NO. 34, 43, 44, 57 & 59 AS POINTED OUT BY THE ID COUNSEL FOR THE APPELLANT. THIS ONLY SHOWS THAT NO UNIFORM METH OD OF DECODING 13 WAS FOLLOWED BY THE APPELLANT WHICH COULD BE APPLIE D TO ALL DOCUMENTS. ' 8. FINALLY, THE LD. CIT(A) HAS OBSERVED THAT THE A. O. DID NOT CARRY OUT THE DIRECTIONS OF THE ITAT IN ITS LETTER AND SP IRIT WHILE FRAMING REMAND ASSESSMENT ORDER DURING REMAND PROCEEDINGS, ALL THE TEN PARTIES, WHOSE NAMES ARE MENTIONED IN PAGE 58, WERE PRODUCED BEFORE THE A.O. WHO RECORDED THEIR SWORN STATEMENTS. NO MA JOR DISCREPANCIES HAVE BEEN NOTICED OR POINTED OUT BY THE A.O. IN THE SE STATEMENTS WHICH SUPPORT THE CONTENTION OF THE ASSESSEE. NO F URTHER MATERIAL HAS BEEN BROUGHT ON RECORD TO DISPROVE THE CLAIM OF THE ASSESSEE REGARDING THE AMOUNT OF LOANS MENTIONED IN THESE AFFIDAVITS. THEREFORE, HE HAS SUSTAINED ONLY AN ADDITION OF RS. 1,90,025/- OUT OF TOTAL ADDITION OF RS. 20,20,750/- AND HAS DELETED THE REMAINING AMOUNT. 9. IN THE SECOND ROUND BEFORE ITAT, BOTH THE PARTIE S ARE AGGRIEVED. THE REVENUE HAS CHALLENGED THE DELETION OF RS. 18,3 0,725/- WHEREAS THE ASSESSEE HAS DISPUTED EVEN THE SUSTAINED ADDITI ON OF AN AMOUNT OF RS. 1,90,025/-. WE HAVE HEARD THE RIVAL SUBMISSION S AND HAVE CAREFULLY PERUSED THE ENTIRE MATERIAL ON RECORD. THE APPEAL O F THE REVENUE IS DELAYED BY ONE DAY. THE REASONS MENTIONED IN THE P ETITION FOR CONDONATION SUBMITTED BY THE APPELLANT HAVE BEEN PE RUSED AND FOUND 14 TO BE REASONABLE AND SUFFICIENT ENOUGH TO EXPLAIN T HIS DELAY. THEREFORE, WE CONDONE THIS DELAY AND ADMIT THE APPE AL OF THE REVENUE. 11. IT WAS FOUND THAT THE ITAT, JAIPUR BENCH WHILE DECIDING THE CASE OF THIS ASSESSEES SON SHRI RAJESH SAMDHANI, COPY O F ORDER ENCLOSED AT PB PAGES 77 TO 105 HAS ACCEPTED SIMILAR ARGUMENTS T O DELETE THE RESPECTIVE ADDITION. THE AVERMENTS OF THE AFFIDAVIT S ARE FURTHER EXPLAINED IN THEIR SWORN-STATEMENTS RECORDED BY THE A.O. THE LD. A.R. HAS SUMMARIZED A STATEMENT SHOWING THE TOTAL SUNDRY DEBTORS DISCLOSED ALREADY BY ALL THE MEMBERS OF ASSESSEES FAMILY AS ON 31.3.2002, IN THEIR RETURN OF INCOME FILED BEFORE T HE DATE OF SEARCH. ALL THE RELEVANT DOCUMENTS HAVE BEEN ENCLOSED IN TH E PAPER-BOOK. THE FOLLOWING CHART EXPLAINS THE FACTUAL MATRIX IN THIS REGARD, AS UNDER; SL. NO. NAME OF FAMILY MEMBER DEBTORS P.B. P AGE 1 RADHEY SHYAM SAMDANI 34500.00 107 TO 110 [110] 2 RAJENDRA SAMDANI 21500.00 116 TO 120 [120] 3 KU. SURBHI SAMD ANI 26380.00 143 TO 144 [144] 4 MASTER SAURABH SAMDANI 19400.00 145 TO 146 [146] 5 RAJENDRA SAMDANI, HUF 95500.00 121 TO 125 [125] 15 6 MASTER SHUB AM SAMDANI 228 00.00 14 7 TO 1 48 [14 8 ] 7 RAJESH SAMDANI 66200.00 135 TO 138 [138] 8 SMT. SHOBGA SAM DANI 52450.00 139 TO 142 [142] TOTAL SUNDRY DEBTORS AS ON 31.3.2002 338730.00 12. THUS THE TOTAL SUNDRY DEBTOR OF THE ENTIRE FAMI LY, AS ON 31.3.2002, COMES TO RS. 3,38,730/- WHICH IS OBVIOUS LY MORE THAN RS. 1,90,025/- SUSTAINED BY THE LD. CIT(A). WE DO NOT FIND ANY FALLACY IN THE IMPUGNED ORDER WHEN IT COMES TO DELETION OF AN AMOUNT OF RS. 18,30,725/- ADDED ON ACCOUNT OF TRANSACTION RECORDE D ON LOOSE PAPER NO. 58 OF ANNEXURE A-3. THE JAIPUR BENCH HAS ALREA DY TAKEN A VIEW THAT THE CORRECT AMOUNT OF ADVANCE GIVEN TO THE PAR TIES WORKS OUT AFTER PUTTING TWO ZEROS [00] AGAINST EACH AMOUNT ME NTIONED AT PAGE 58. THE ASSESSEE HAS ALSO STATED THAT THIS PAGE CO NTAINS THE OUTSTANDING DEBTORS OF ALL THE FAMILY MEMBERS. THE REFORE, THE GROUND RAISED BY THE REVENUE WOULD FAIL. NO MAJOR DISCREP ANCIES HAVE BEEN POINTED OUT BY THE A.O. IN RESPECT OF STATEMENTS OF TEN PERSONS. NO MATERIAL HAS BEEN BROUGHT ON RECORD BY THE A.O. TO PROVE THAT THE CLAIM OF THE ASSESSEE REGARDING AMOUNTS OF LOAN MEN TIONED IN THE AFFIDAVITS ARE INCORRECT. IN SUCH A SITUATION THER E IS NO BASIS TO JUSTIFY ADDITION OF RS. 20,20,750/-. THEREFORE, WITH OUR F OREGOING 16 OBSERVATION, WE ALLOW THE APPEAL OF THE ASSESSEE AN D DISMISS THE APPEAL OF THE REVENUE. ITSSA NO. 05/JU/2009 13. THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A), AJMER DATED 27.02.2009 VIDE WHICH HE HA S CONFIRMED THE PENALTY OF RS. 18,86,091/- IMPOSED U/S 158BFA(2) OF THE ACT. 14. THE FACTS LEADING TO THIS PENALTY ARE THAT AFTE R GIVING EFFECT TO THE APPEAL THE REVISED INCOME IS AS UNDER: 1. CASH RS. 1,34,405/- 2. GOLD JEWELLERY RS. 30,797/- 3. SILVER ORNAMENTS RS. 66,532/- 4. MARRIAGE OF DAUGHTER RS. 50,000/- 5. SHARES RS. 60,500/- 6. HOUSEHOLD EXPENSES RS. 5,85,413/- 7. LOOSE PAPER ANNEXURE A-3/31 RS. 45,400/- 8. LOOSE PAPER ANNEXURE A-3/58 RS. 1,90,025/- TOTAL RS. 11,63,072/- 17 15. THE A.O. HAS IMPOSED A PENALTY OF RS. 18,86,091 /- @ 100% OF TAX EVADED WHICH IS CALCULATED ON THE BASIS OF EVADED T AX ON THE TOTAL UNDISCLOSED INCOME COMPUTED FOR THE BLOCK PERIOD. THE APPEAL AGAINST THE LD. CIT(A)S ORDER BY BOTH THE PARTIES WERE HEA RD BY US AS ABOVE IN WHICH WE HAVE DELETED THE ADDITION SUSTAINED ON ACC OUNT OF LOOSE PAPER NO. 58 AT RS. 1,90,025/-. THIS APPEAL WAS AL SO SIMULTANEOUSLY HEARD BY US. 16. IT WAS ARGUED BY THE LD. A.R. SHRI U.C. JAIN TH AT PENALTY IN BLOCK ASSESSMENT ORDER U/S 158BFA(2) OF THE ACT IS NOT AU TOMATIC AND MANDATORY AND THIS PENALTY ALSO ADMITS REASONABLE C AUSE AND EXCUSES WHICH ARE AVAILABLE TO ANY ASSESSEE U/S 273B OF THE ACT. HE HAS ARGUED THAT THE IMPOSITION OF PENALTY U/S 158BFA(2) OF THE ACT IS DISCRETIONARY AND WHEN THE ASSESSEE FURNISHES REASONABLE EXPLANAT ION REGARDING EACH ADDITION WHICH ARE NOT ACCEPTED BY THE A.O, BUT HAS NOT BEEN FOUND TO BE INCORRECT AND ARE PARTIALLY ACCEPTED, THEN IN TH AT CASE IT CANNOT BE SAID THAT PENALTY HAS TO BE IMPOSED UNDER THAT SECT ION. HE ARGUED THAT WHEN THE ADDITIONS ARE ESTIMATED, NO PENALTY C AN BE LEVIED EVEN UNDER THIS SECTION BECAUSE EVEN THE UNDISCLOSED INC OME HAS TO BE TREATED AT PAR WITH CONCEALMENT OF INCOME AS DISCUS SED IN DETAIL IN SECTION U/S 271(1)(C) OF THE ACT. 18 17. ON THE OTHER HAND, THE LD. D.R. HAS SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND HAS STATED THAT THE PARAMETER S FOR IMPOSITION OF PENALTY U/S 158BFA ARE ENTIRELY DIFFERENT FROM THOS E U/S 271(1)(C) OF THE ACT. HE HAS ARGUED THAT WHEN UNDISCLOSED INCOM E IS FOUND TO BE MORE THAN THE ASSESSED INCOME THAN WHAT THE ASSESSE E HAS DISCLOSED, THEN PENALTY HAS TO BE MANDATORILY LEVIED. 18. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE HAV E FOUND THAT MOST OF THE ADDITIONS SUSTAINED AND DISCUSSED ABOVE ARE BASED ON ESTIMATIONS MADE ON THE BASIS OF DOCUMENT FOUND DUR ING SEARCH PROCEEDINGS. ON AN IN-DEPTH SEARCH MADE REGARDING PROVISIONS OF SECTION 158BFA(1) OF THE ACT WE HAVE FOUND THAT IMP OSITION OF THIS PENALTY IS NOT MANDATORY BUT IT IS DISCRETIONARY. U PON THE PERUSAL OF SUB-SECTION (2) OF SECTION 158BFA IT EMERGES THAT T HE A.O. HAS THE POWER TO IMPOSE PENALTY ON THE UNDISCLOSED INCOME D ETERMINED UNDER CLAUSE (C) OF SECTION 158BC, AS PRESCRIBED. BUT TH E PROVISO TO SUB- SECTION (2) OF SECTION 158BFA PROVIDES FOR FOUR CON DITIONS UPON THE SATISFACTION OF WHICH THE ASSESSEE WOULD GET IMPUNI TY FROM SUCH PENALTY. THE PENALTY SHALL NOT BE IMPOSED IF THE A SSESSEE FURNISHED A RETURN U/S 158BC(A); PAYS TAX ON THE BASIS OF THE R ETURN OR OFFERS FOR ADJUSTMENT OF ANY MONEY SEIZED, OR PRODUCES EVIDENC E OF HAVING PAID 19 SUCH TAX, AND DOES NOT FILE APPEAL ON THAT PART OF INCOME RETURNED. PROVISO 2 ND TO 158BFA(2) CLARIFIES PROVISO 1 ST WHERE THE UNDISCLOSED INCOME SO DETERMINED AND WHICH AMOUNT IS IN EXCESS OF THE AMOUNT OF UNDISCLOSED INCOME RETURNED, PENALTY SHALL BE IMPOS ED ON THAT PORTION OF THE UNDISCLOSED INCOME DETERMINED. CLOSELY SEEN , SUB-SECTION (2) OF SECTION 158BFA MAKES IT CLEAR THAT IT IS WELL WITHI N THE DISCRETION OF THE A.O. WHILE FRAMING THE ASSESSMENT FOR THE BLOCK PERIOD, WHETHER OR NOT TO IMPOSE ANY PENALTY. THE WORDS MAY DIRECT HAS TO BE GIVEN THEIR NORMAL MEANING, LEAVING DISCRETION TO THE OFF ICER. SECTION 273B OF THE ACT PROVIDES THAT PENALTY SHALL NOT BE IMPOS ED ON CERTAIN CASES ON THE ASSESSEE PROVING THAT THERE WAS REASONABLE C AUSE FOR FAILURE TO PAY TAX REFERS TO SEVERAL PROVISIONS SUCH AS SECTIO N 271, 271A, ETC, MAKES NO MENTION OF SECTION 158BFA(2). BUT IT STIL L DOES NOT MEAN THAT PENALTY U/S 158BFA(2) IS MANDATORY. RECENTLY, THE HON'BLE HIGH COURT OF DELHI WHILE DECIDING THE CASE OF CIT VS. HARIRAM DAS VED PAL PASSED IN ITA NO. 1005/2007/12.11.2008 HAVE TAKEN A SIMILA R VIEW. THUS, LEVY OF PENALTY U/S 158BFA(2) IS DISCRETIONARY AND NOT A UTOMATIC NOTWITHSTANDING THE USE OF THE WORD SHALL IN THE SECTION WHEN ADDITIONS ARE MADE ON ESTIMATE BASIS. WE HAVE TAKE N A SIMILAR VIEW WHILE DECIDING THE CASE OF ITO VS. SHRI DAMODAR LAL LODHA IN IT[SS]A 20 NO. 10/JU/2009 ORDER DATED 28.9.2012. PARA 9 OF THI S ORDER IS RELEVANT AND EXTRACTED BELOW. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE CAREFULLY PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS TRUE THAT PENALTY U/S 158BFA(2) IS DISCRETIONARY AN D NOT AUTOMATIC AND THE LD. CIT(A) HAS CORRECTLY CANCELLE D THIS PENALTY AS DISCUSSED IN PARA 3.3 AT PAGE 6 & 7 OF HIS ORDER. IN ANY CASE, THE ASSESSEE FURNISHED EXPLANA TION REGARDING EACH ADDITION, WHICH WERE NOT FOUND TO BE INCORRECT AND WERE PARTIALLY ACCEPTED. THE PENALTY PROCEEDINGS OF ANY SECTION UNDER THE ACT ADMIT REASONABLE CAUSE IN THE LIGHT OF SECTION 273B OF TH E ACT. THE FOLLOWING DECISIONS DULY SUPPORT THE CLAIM OF T HE ASSESSEE: 1. N.R. SIRKAR 111 ITR 281 [GAU] 2. VEERSINGHAIAN & CO. VS. CIT 123 ITR 457[SC] 3. CIT VS. SATYENDRA DOSI 222 CTR 258 [RAJ] 4. DCIT VS KOATEX INFRASTRUCTURE LTD 286 ITR [AT] 40 5. DCIT VS. SURESH KUMAR 284 ITR (AT) 104 6. SMT. MALA DAYANITHI VS. DCIT 270 ITR [AT] 56 7. ACIT VS. B.P. KHANDELWAL ITSSA NO. 146/JP/2005 21 19. THEREFORE, BY RESPECTFULLY FOLLOWING THE ABOVE DECISIONS, WE HAVE TO DELETE THE ENTIRE PENALTY LEVIED IN THIS CA SE. THE ADDITIONS ARE EXPLAINED IN THE ENCLOSED CHART. THESE ARE ESTIMAT ED ADDITIONS. ACCORDINGLY, WE ORDER TO DELETE THE ENTIRE PENALTY LEVIED U/S 158BFA(2) AND ALLOW THIS APPEAL. 20. TO SUM UP, IN THE RESULT, THE APPEALS OF THE A SSESSEE ARE ALLOWED WHEREAS THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH APRIL 2013. SD/- SD/- [N.K. SAINI] [HARI OM MARATHA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 26 TH APRIL, 2013. VL COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ASSISTANT REGISTRAR