Birender Narang, V. DCIT, Circle-23(1),

ITSSA 525/DEL/2003

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 3833 (ITAT-DELHI)
• Duration Of Justice: 14 year(s) 8 month(s) 8 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 23-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 25-04-2017
• Assessment Year: misc
• Appeal Filed On: 14-11-2003
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S RANA
• Keywords: Unexplained investment; Unexplained expenditure; Income from undisclosed sources; Search and seizure; Loose papers; Document seized; Opportunity of being heard; Principle of natural justice; Peak credit; Retrospective amendment; Question of law; Non passing of speaking order; Block assessment; Onus to prove; Documents seized
• Section: 69C; 69; 132

Judgement Text

1 ITA NO. 525 & 548/DEL/2003 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: G NEW DELHI MS SUCHITRA KAMBLE, JUDICIAL MEMBER AND SH. PRASHANT MAHARISHI, ACCOUNTANT MEMBER IT(SS)A NO. 525/DEL/2003 ( A.Y 1/4 /1989 TO 17/12/1999) M/S VIRENDER NARANG D-39, PANCHSHEEL ENCLAVE NEW DELHI (APPELLANT) VS DCIT CIRCLE-23(1) NEW DELHI (RESPONDENT) IT(SS)A NO. 548/DEL/2003 ( A.Y 1/ 9/1989 TO 17/12/1999) ACIT CIRCLE-23(1) NEW DELHI (APPELLANT) VS SH. VIRENDER NARANG D-38, PANCHSHEEL ENCLAVE NEW DELHI (RESPONDENT) APPELLANT BY SH. SATISH AGARWAL, CA RESPONDENT BY SH. S. S. RANA, CIT DR ORDER PER BENCH 01 THESE APPEALS ARE FILED BY THE ASSESSEE AS WELL AS BY THE REVENUE AGAINST THE ORDER DATED 1/9/2003 PASSED BY CIT(A) -XVI, NEW DELHI IN CASE OF MR. V. K. NARANG FOR A BLOCK PERIOD OF 1/4/ 1989 TO 17/12/1999. 02 THE MAIN CONCISE GROUND RAISED BY THE ASSESSEE ARE 7 GROUNDS AS UNDER:- IT(SS)A NO. 525/DEL/2003 1. THAT THE LD. CIT(A) HAS ERRONEOUSLY UPHELD THE ILLE GAL DATE OF HEARING 29.05.2018 DATE OF PRONOUNCEMENT 23.07.2018 2 ITA NO. 525 & 548/DEL/2003 ACTION OF THE DEPARTMENT TAKEN AGAINST THE ASSESSEE UNDER SECTION 132(1) OF THE INCOME TAX ACT. NONE OF THE C ONDITIONS OF THE SAID SUB-SECTION HAVE BEEN COMPLIED, NO VALI D AUTHORIZATION WAS ISSUED. THE SEARCH CONDUCTED ON T HE ASSESSEE WAS CONSEQUENTLY ILLEGAL. THE PROCEEDINGS TAKEN UNDER SECTION 158BC CONSEQUENTLY RESULTING IN THE O RDER PASSED UNDER THE SAID SECTION IS ALSO ILLEGAL. THE ASSESSMENT MADE BY THE AO THEREFORE, DESERVED TO BE ANNULLED. 2. THAT THE ASSESSMENT FRAMED BY THE LD. AO BY WAY OF UNDISCLOSED INCOME AT A HUGE FIGURE OF RS. 20, 51,1 2 300/- WAS UNSUPPORTED BY ANY CORROBORATION OR MATERIAL. T HERE WAS NO INCRIMINATING SEARCH MATERIAL. RELIANCE PLAC ED BY THE LD. AO ON SOME ANNEXURES IN SUPPORT OF HER STAN D, WAS WITHOUT ANY LEGAL JUSTIFICATION. THE ENTIRE ADDITIO N OF RS. 20, 51,12,300/- AS ASSESSEES UNDISCLOSED INCOME FO R THE BLOCK PERIOD DESERVED TO BE DELETED. 3. THAT THE LD. CIT(A) HAVING AGREED THAT THE AOS OR DER BEING SKETCHY AND NON SPEAKING ORDER PASSED IN HAST E, THE SAME DESERVED TO BE VACATED AND ASSESSMENT ANNULLED AS WAS IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. 4. THAT THE RELIEF GRANTED BY THE CIT(A) IS INADEQUAT E. HAVING FOUND THAT THERE WAS NO MATERIAL TO SUPPORT AOS OR DER, HE SHOULD HAVE DELETED THE ENTIRE ADDITION. THE CONCLU SION ARRIVED BY THE LD. CIT(A) IS BASED ON WRONG FACTS. THAT THE LD. CIT(A) HAS GONE WRONG IN CONFIRMING A PART OF THE ILLEGAL ORDER PASSED BY THE AO ESTIMATING THE A LLEGED UNDISCLOSED INCOME BY FIXING THE SAME ON PEAK BASIS AT RS. 4.76 CRORES FOR THE BLOCK PERIOD , THERE IS NO RELE VANT MATERIAL TO SUPPORT THE ADDITIONS MADE BY THE LD. A O AND ALSO THE WRITTEN SUBMISSIONS MADE BEFORE THE LD.CIT (A) HAVE NOT BEEN PROPERLY APPRECIATED LEADING TO ERRON EOUS ORDER. THE ADDITIONS MADE, WERE PURELY BASED ON CONJECTURES AND SURMISES. 5. THAT THE LD. CIT(A) HAS FURTHER GONE WRONG TO CONFI RM THE LEVY OF SURCHARGE AND INTEREST U/S 158BFA (2) OF TH E ACT. 6. THAT THE ILLEGAL ORDER PASSED BY THE AO HAS BEEN ERRONEOUSLY CONFIRMED BY THE LD, CIT(A) WITHOUT APPRECIATING THAT THE SAME DOES NOT HAVE A PROPER APPROVAL UNDER SECTION 158BG. INA ANY CASE, THE APP ROVAL WAS MECHANICAL. HASTY ORDER WHICH IS NON SPEAKING A ND 3 ITA NO. 525 & 548/DEL/2003 SKETCHY ORDER HAS BEEN PASSED VIOLATING THE PRINCIP LES OF NATURAL JUSTICE. 7. THAT THE ORDER PASSED BY THE LD. CIT(A) IS BAD IN LAW AND AGAINST THE FACTS OF THE CASE. THE REVENUE HAS ALSO RAISED GROUNDS AS UNDER:- IT(SS)A NO. 548/DEL/2003 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) ERRED IN RESTRICTING THE UNDISCLOSED INCO ME OF RS.205112300/- TO RS.47679207/- THEREBY GIVING THE ASSESSEE A RELIEF OF RS.157433093/- BY ADMITTING FRESH EVIDENCE AND CALCULATING THE UNEXPLAINED INVESTMENT ON PEAK INVESTMENT BASIS IGNORING THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, (I) THE ASSESSEE DID NOT POINT OUT ANY MISTAKE IN T HE PROJECT-WISE INVESTMENT AS (II) THE ASSESSEE HAD NOT COME UP WITH THE PROPOSAL OF PEAK CREDITS. 03 THE BRIEF FACTS OF THE CASE SHOW THAT THE ASSESSEE IS AN INDIVIDUAL. HE IS ALSO A PARTNER OF M/S SONAL CONSTRUCTION AND MR. SAHIL BUILDERS. HE HAS ALSO CARRYING ON THE DEVELOPMENT AND SALE O F IMMOVABLE PROPERTY ON HIS OWN. HE IS ALSO A SHAREHOLDER - DIRECTOR IN M/S MIDLAND PROMOTERS PVT. LTD. AS WELL AS CERTAIN OTHE R COMPANIES. 04 ON 7/12/1999 A SEARCH U/S 132 OF THE ACT WAS CARRIE D OUT AT THE RESIDENCE OF THE ASSESSEE AT 38, PANCHSHEEL ENCLAVE , AS WELL AS AT M/S SONAL CONSTRUCTION. IN M/S SONAL CONSTRUCTION, THE ASSESSEE IS A PARTNER WITH MR. S. S. SODHI HAVING EQUAL SHARE AND IN SAHIL BUILDER, ASSESSEE IS A PARTNER WITH HIS BROTHER AND ASSES SEE IS HAVING 80% SHARE. DURING THE COURSE OF SEARCH, CERTAIN DOCUME NTS ARE SEIZED FROM THE PREMISES OF THE TWO FIRMS AS WELL AS THE RESIDE NCE OF THE ASSESSEE WHEREIN IT WAS FOUND THAT THE ASSESSEE HAS EARNED U NACCOUNTED INCOME ON SALE AND DEVELOPMENT OF THE PROPERTIES JO INTLY IN THE NAME OF THE FIRMS, OTHER PERSONS, IN HIS HUF AND ALONG W ITH HIS WIFE ALSO. SUBSEQUENT TO THE SEARCH, THE STATEMENT OF THE ASSE SSEE WAS RECORDED WHERE HE DID NOT EXPLAIN THE CONTENTS OF THE SEIZED DOCUMENTS BUT HAS 4 ITA NO. 525 & 548/DEL/2003 GIVEN EVASIVE REPLY. MR. S. S. SODHI, HIS PARTNER , WAS ALSO EXAMINED BUT HE ALSO TOOK THE SAME PATH AND DID NOT EXPLAIN THE CORRECT NATURE OF THE DOCUMENTS. THE NOTICE U/S 158BC WAS ISSUED AND CONSEQUENT TO THAT THE ASSESSEE FILED NIL RETURN. THE COPY OF THE SEIZED MATERIAL WAS REQUESTED AND THE SAME WAS GIVEN TO THE ASSESSE E. CONSEQUENT TO THAT THE ASSESSMENT U/S 158BC OF THE ACT WAS PASSED IN THE HANDS OF THE ASSESSEE ON 31/12/2001 WHERE THE TOTAL INCOME O F THE ASSESSEE WAS DETERMINED AT RS. 20.51 CRORES. THE ASSESSEE C HALLENGED THE SAME BEFORE THE CIT(A) WHO PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. HOWEVER, WITH RESPECT TO THE TOTAL ADDITION OF RS. 20.51 CRORES HE RESTRICTED IT TO RS. 4.76 CRORES ON PEAK BASIS AS UNEXPLAINED INVESTMENT. THEREFORE, THE ASSESSEE AS WELL AS REVE NUE BOTH ARE IN APPEAL BEFORE US. 05 COMING TO THE APPEAL OF THE ASSESSEE , MAIN GROUND CHALLENGED BEFORE US IS THAT THE WHOLE ADDITION MADE BY THE ASSESSING OFFICER OF RS. 205172300/- DESERVES TO BE DELETED. IN THE CONCISE GROUND OF APPEAL, ALL OTHER GROUND WERE SUPPORTING THIS GROUND. 06 THE LD. AR SUBMITTED BEFORE US THE WRITTEN SUBMISSI ON CONTAINING 17 PAGES WHICH IS AS UNDER:- 1) THE ASSESSING OFFICER MADE ADDITION ON ACCOUNT OF UNDISCLOSED INVESTMENT IN PROPERTIES, UNDISCLOSED P ROFIT ON SALE OF PROPERTIES AND SUPERVISION CHARGES FOR OVER SEEING THE CONSTRUCTION OF CERTAIN PROPERTIES ON THE BASIS OF ROUGH JOTTINGS ON SEIZED LOOSE PAPERS AS WORKED OUT BY THE AO IN ASSESSMENT ORDER AND COMMON ANNEXURE FOR M/S SONAL CONSTRUCTIONS, MRS. NEERA NARANG AND THE APPELLANT ATTACHED TO THE ASSESSMENT ORDER FOR THE BLOCK PERI OD. 2) THE ADDITIONS HAD BEEN MADE BY THE ASSESSING OFFICE R ON THE BASIS OF ROUGH JOTTINGS ON LOOSE SHEETS SEIZ ED WHICH FIGURES HAVE NOT BEEN CORROBORATED NOR VERIFIED EIT HER FROM THE SELLERS OR BUYERS OF THE PROPERTY OR THE CONTRACTOR S OF THE PROPERTY DURING THE COURSE OF ASSESSMENT PROCEEDING S. 3) THE APPELLANT HAD FURNISHED COMPLETE DETAILS OF REGISTERED DOCUMENTS FOR SALE PURCHASE OF PROPERTIE S, THE EVIDENTIARY VALUE OF WHICH CANNOT BE DISREGARDED IN THE ABSENCE OF CLINCHING EVIDENCE. REFER JUDGMENT OF DE LHI HIGH COURT IN THE CASE OF NARESH KHATTAR (HUF) 261 ITR 6 64 5 ITA NO. 525 & 548/DEL/2003 (DEL) AND C1T VS. K.C. AGNES 26 1TR 354 (KER). 4) THE ASSESSMENT HAS BEEN MADE BY SIMPLY ADOPTING THE ROUGH JOTTED FIGURES ON VARIOUS SEIZED ANNEXURE S AS UNDISCLOSED INVESTMENT OR UNDISCLOSED INCOME AS IS EVIDENT FROM VARIOUS PARAS OF THE ASSESSMENT ORDER AND THE ANNEXURE ATTACHED TO THE ASSESSMENT ORDER. 5) THE APPELLANT HAD SUBMITTED TO THE ASSESSING OFFICE R DURING THE COURSE OF ASSESSMENT PROCEEDINGS UNDER S ECTION 158BC THAT THE SEIZED ANNEXURES WERE ROUGH JOTTINGS AND DID NOT CONTAIN THE RECORD OF ANY UNDISCLOSED INVESTMEN T OR UNDISCLOSED INCOME AS ALLEGED BY HIM IN HIS SHOW CA USE NOTICE. THE ALLEGATIONS IN THE FORM OF QUERIES RAIS ED BY THE ASSESSING OFFICER HAVE BEEN TREATED TO BE THE CONCL USIONS WITHOUT MAKING INDEPENDENT ENQUIRY. THE ASSESSING O FFICER HAS NOT BEEN ABLE TO CONCLUSIVELY ESTABLISH NEXUS O F UNDISCLOSED INCOME WITH SCRIBBLED AMOUNTS ON LOOSE SHEETS OF SEIZED PAPERS. 6) IT IS IN THE ABOVE BACKGROUND, THAT THE DELHI HIGH COURT HAD DECIDED TO SET ASIDE THE CASE OF M/S SONA L CONSTRUCTIONS BACK TO THE ASSESSING OFFICER FOR MAK ING DE- NOVO ASSESSMENT. REFERENCE IS INVITED TO THE OBSERV ATIONS OF DELHI HIGH COURT IN THE CASE OF SONAL CONSTRUCTIONS VS. DEPUTY COMMISSIONER OF INCOME TAX 359 ITR 532 (PARA 19 & 21) WHICH IS A CONNECTED CASE. 19. COUNSEL FOR THE ASSESSEE STRONGLY OBJECTED TO THE REMAND, THOUGH HE WOULD CONTEND THAT NEITHER NARANG NOR SOD HI WAS EXAMINED IN THE COURSE OF THE ASSESSMENT PROCEEDING S AND ASKED TO EXPLAIN THE SEIZED DOCUMENTS AND THAT NO C ROSS- EXAMINATION OF SODHI WAS AFFORDED TO NARANG. HE WOU LD ALSO SUBMIT THAT THE FINDINGS RECORDED BY THE TRIBUNAL A RE PURE FINDINGS OF FACT AND IT IS NOT OPEN TO THIS COURT T O INTERFERE WITH THEM LIGHTLY. WE DO AGREE THAT THIS COURT HAS LIMIT ED JURISDICTION TO INTERFERE WITH FINDINGS OF FACT REC ORDED BY THE TRIBUNAL. INTERFERENCE WOULD BE JUSTIFIED ONLY IF S UCH FINDINGS ARE IRRATIONAL, PERVERSE OR UNREASONABLE. IT WOULD ALSO BE JUSTIFIED IF A FINDING OF FACT IS ARRIVED AT BY THE TRIBUNAL WITHOUT ANY EVIDENCE. IT IS EQUALLY TRUE THAT WHILE EXAMINING THE EVIDENCE, THE TRIBUNAL IS NOT EXPECTED TO PUT O N BLINKERS; WHEREVER NECESSARY, IT SHOULD SCRATCH THE SURFACE, PROBE DEEPER AND DRAW THE APPROPRIATE INFERENCES WHICH AC CORD WITH THE NORMAL COURSE OF HUMAN CONDUCT AND PROBABI LITIES IT IS AGAIN TRUE THAT MERELY BECAUSE THE APPELLATE COU RT WOULD HAVE REACHED A DIFFERENT CONCLUSION ON THE SAME EVI DENCE, INTERFERENCE WITH THE FINDINGS OF THE FACT OF THE L OWER COURT WOULD NOT BE JUSTIFIED. EVEN IF WE APPROACH THE IMP UGNED 6 ITA NO. 525 & 548/DEL/2003 ORDER OF THE TRIBUNAL KEEPING IN MIND THE ABOVE WEL L SETTLED PRINCIPLES, WE ARE AFRAID WE CANNOT RESIST THE NEED TO REMAND THE MATTER TO THE ASSESSING OFFICER FOR A DENOVO CO NSIDERATION OF THE ASSESSMENT. 21. IN THE ABOVE CIRCUMSTANCES, WE ARE OF THE CONSI DERED VIEW THAT THE ORDER OF THE TRIBUNAL AS IT STANDS CANNOT BE COUNTENANCED. WE VACATE THE SAME AND REMAND THE MAT TER TO THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL AFFORD ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND COMPLETE THE ASSESSMENT AFRESH IN ACCORDANCE WITH L AW. THE SUBSTANTIAL QUESTION OF LAW IS ANSWERED IN THE NEGA TIVE, IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE, SUB JECT TO THE ORDER OF REMIT TO THE ASSESSING OFFICER. THE APPEAL FILED BY THE REVENUE IS ALLOWED IN THE ABOVE TERMS, WITH NO ORDE R AS TO COSTS. 7) M/S. SONAL CONSTRUCTIONS CARRIED THE MATTER TO SUPREME COURT IN SLP WHICH WAS DECIDED BY THE SUPRE ME COURT BY MODIFYING THE ORDER OF THE HIGH COURT TO T HE EXTENT THAT THE CASE WAS RESTORED TO ITAT. THE SUPREME COU RT WHILE DISPOSING OF THE SLP FURTHER OBSERVED THAT THE TRIB UNAL IF IT SO FEELS COULD SEND THE MATTER BACK TO THE ASSESSING O FFICER. REFERENCE IS INVITED TO THE LAST 5 LINES OF PARA 4 OF THE SUPREME COURT ORDER: QUOTE WE MAKE IT CLEAR THAT IF AT THE TIME OF CONSIDERATI ON OF THE APPEAL, THE TRIBUNAL FEELS THAT THE MATTER NEEDS CR OSS- EXAMINATION OF CERTAIN WITNESSES OR FURTHER EVIDENC E, IT WILL BE OPEN TO THE TRIBUNAL TO SEND THE MATTER BACK TO THE ASSESSING OFFICER. 8) WITHOUT PREJUDICE TO ABOVE, AO HAS MADE AN ASSESSMENT OF UNDISCLOSED INCOME OF RS. 20,51,12,30 0/- ON PURE GUESS WORK, PROBABILITIES, CONJECTURES-SURMISE S AND WITHOUT EXAMINING THE APPELLANT OR THE BUYERS AND S ELLERS OF PROPERTIES FOR WHICH HE HAS COMPUTED UNDISCLOSED PR OFIT OR UNDISCLOSED INVESTMENT. 9) THE ASSESSING OFFICER HAS INVOKED THE PROVISIONS O F SECTION 132(4A) WHICH PUTS ONUS ON THE SEARCHED PER SON TO EXPLAIN THE CONTENTS OF SEIZED DOCUMENTS, WHICH IS A REBUTTABLE PRESUMPTION. 10) THE PROPERTIES WERE SOLD AND PURCHASED AFTER OBTAI NING REQUISITE CLEARANCE U/S 230A OF THE ACT, FROM THE D EPARTMENT 7 ITA NO. 525 & 548/DEL/2003 AS APPLICABLE AT THAT TIME FOR PURCHASE AND SALE OF IMMOVEABLE PROPERTY. THE ASSESSING OFFICER DID NOT CHOOSE TO EXAMINE EITHER THE SELLER OF THE PROPERTY OR THE BU YER OF THE PROPERTY AND ON THE BASIS OF JOTTING ON THE SEIZED PAGES MADE THE ADDITION. 11) WE ARE TAKING YOUR HONOURS PARA WISE TO EACH OF T HE ADDITIONS TO DEMONSTRATE THAT THE ADDITIONS MADE BY THE ASSESSING OFFICER WERE ON CONJECTURES-SURMISES, PRO BABILITIES, GUESS WORK WITHOUT BRINGING ON RECORD ANY CORROBORA TIVE EVIDENCE OR MATERIAL ON RECORD TO JUSTIFY THE SAME AND THE ASSESSMENT ORDER WAS PASSED IN HASTE WITHOUT EXAMIN ING THE APPELLANT, MR. S.S. SODHI OTHER PARTNER OF M/S. SON AL CONSTRUCTIONS OR ANY OTHER PARTY WHETHER, BUYER, SE LLER OR CONTRACTOR OF PROPERTIES FOR WHICH UNDISCLOSED INCO ME HAS BEEN COMPUTED BY THE DEPARTMENT. (A) REG. PARA 3(1) OF THE ASSESSMENT ORDER AND PARA 3 OF THE ANNEXURE ATTACHED TO ASSESSMENT ORDER AN ADDITION OF RS. 1,02,17,611/- HAS BEEN MADE FOR PROPERTY BEARING X-14, HAUZ KHAS, NEW DELHI, ANNEXU RE A- 1, PAGE NO. 21 (REFER PAGE 2 OF THE COMPILATION OF REL EVANT SEIZED MATERIAL) FURTHER SPLIT INTO: I) SUPERVISION CHARGES RS. 19,26,994/-. II) UNDISCLOSED PROFIT RS. 43,35,737/- III) UNDISCLOSED INVESTMENT RS. 39,54,880/- (REFER PARA 3 OF THE ANNEXURE TO THE ASSESSMENT ORDER). THE ABOVE PROPERTY WAS IN THE NAME OF MR. VIRENDER NARANG, MRS. NEERA NARANG, M/S. SONAL CONSTRUCTION AND MR. S.S. SODHI. THE APPELLANTS SHARE IN THE PROPERTY WAS FO R BASEMENT FLOOR. REFER PARA 9(IV) PAGE 130 FOR SUBMISSION MADE BEFOR E AO. ALSO REFER PARA 30A&B AT PAGE NO.27-30 OF THE PAPER BOOK FOR SUBMISSION BEFORE CIT (APPEALS). THE APPELLANT HAD PURCHASED THE ABOVE PROPERTY FRO M SHRI RAM LAI SACHDEV THROUGH POWER OF ATTORNEY HOLDER SH RI GOVIND LAI SIKKA. ASSESSING OFFICER SUMMONED SHRI GOVIND LAI SIKKA AN D EXAMINED HIM. THE AO HAS DRAWN ADVERSE INFERENCE 8 ITA NO. 525 & 548/DEL/2003 PERHAPS FROM THE STATEMENT OF SHRI GOVIND LAI SIKKA IN VIEW OF WHICH CROSS EXAMINATION OF HIM IS REQUIRED. AS PER THE KNOWLEDGE OF THE APPELLANT NO ADDITION O R RATHER NO PROCEEDINGS UNDER SECTION 158BD HAD BEEN INITIATED AGAINST MR. S.S. SODHI WHO WAS L/4 TH OWNER OF THE PROPERTY. THE DEPARTMENT HAS NOT CONSIDERED THE AVERMENTS OF THE ASSESSING OFFICER AS INCRIMINATING IN THE CASE OF O NE OF THE OWNERS, I.E. MR. S.S. SODHI INEXPLICABLY THE SEIZED PAPER HAS BEEN CONSIDERED AS INCRIMINATING IN THE HANDS OF TH E OTHER CO- OWNER. THE EVIDENTIARY VALUE OF SEIZED PAPER CANNOT BE DIFFERENT FOR CO-OWNERS OF THE SAME PROPERTY . (B) REG. PARA 3 (2) OF THE ASSESSMENT ORDER & PARA-1 OF THE ANNEXURE ATTACHED TO ASSESSMENT ORDER :- REF: SEIZED PAPER - ANNEXURE A- 1. PAGE NO. 21 (REFER PA GE 2 OF THE COMPILATION OF RELEVANT SEIZED MATERIAL ) THE ADDITION OF RS. 10,05,400/- @ 20% AS UNDISCLOSE D INCOME FROM PROPERTY J-12, SAKET, NEW DELHI HAS BEEN INCLU DED IN THE INCOME OF THE APPELLANT TOWARDS ALLEGED UNDISCL OSED RECEIPT OF SUPERVISION CHARGES FOR THE ASSESSMENT Y EAR 1994- 95. THE APPELLANT HAS CLARIFIED IN THE AFFIDAVIT AN D ALSO BEFORE THE C1T (APPEALS) THAT THE ADDITION TOWARDS SUPERVI SION CHARGES WAS WITHOUT THE APPELLANT BEING IN RECEIPT OF ANY SUCH INCOME. THERE WAS NO AGREEMENT WITH THE JOINT VENTURE PARTIES OR WITH THE PARTNERSHIP FIRMS FOR ANY SUCH PAYMENTS TO BE MADE TO THE APPELLANT. NEITHER ANY SUCH INCOME W AS RECEIVED BY THE APPELLANT. IT IS SETTLED LAW THAT R EAL INCOME SHOULD BE TAXED AND NOT NOTIONAL INCOME. REFER SUPR EME COURT JUDGMENT IN THE CASE OF SOORJI VALABHDAS VS. CIT. 4 6 ITR 144 (SC) (C) REG. PARA 3(3) OF THE ASSESSMENT ORDER AND PARA 2 OF THE ANNEXURE ATTACHED TO ASSESSMENT ORDERREF: ANNEXURE A-1, PAGE NO. 21 (REFER PAGE 2 OF THE COMPILATION OF RELEVANT SEIZED MATERIAL ) SIMILAR ADDITION OF RS. 14,87,100/- HAS BEEN MADE I N THE HANDS OF APPELLANT TOWARDS SUPERVISION CHARGES WITH OUT ANY BASIS FOR SUPERVISION OF PROPERTY C-40 ANAND NIKETA N, NEW DELHI WHICH WAS IN THE NAME OF M/S SONAL CONSTRUCTI ON, A PARTNERSHIP FIRM IN ' WHICH THE APPELLANT WAS A PAR TNER. THE NOTIONAL ADDITION HERE AGAIN IS WITHOUT ANY CORROBO RATION OR CONFIRMATION FROM THE OTHER PARTNER MR. S.S. SODHI OF THE FIRM. (D) REG. PARA 3(4) OF THE ASSESSMENT ORDER AND PARA 4 OF THE ANNEXURE ATTACHED TO ASSESSMENT ORDER ANNEXURE A- 1, PAGE NO. 21 (REFER PAGE 2 OF THE COMPILATION OF RELEVANT SEIZED MATERIAL) 9 ITA NO. 525 & 548/DEL/2003 AN AMOUNT OF RS, 1,15,100/- HAS BEEN ADDED AS UNDIS CLOSED INCOME OF THE APPELLANT TOWARDS SUPERVISION CHARGES OF PROPERTY D-16 PAMPOSH ENCLAVE, NEW DELHI WHICH IS O NLY NOTIONAL AND HAS NEITHER BEEN RECEIVED NOR HAS ACCR UED TO THE ASSESSE. (E) REG. PARA 3(5) OF THE ASSESSMENT ORDER AND PARA 5 OF THE ANNEXURE ATTACHED TO ASSESSMENT ORDER ANNEXURE A1, PAGE NO.21 (REFER PAGE 2 OF THE COMPILATION OF RELEVANT SEIZED MATERIAL) AN ADDITION OF RS.24,12,000/- HAS BEEN MADE IN THE HANDS OF THE ASSESSEE AS UNDISCLOSED PROFIT ALONG WITH UNDIS CLOSED INVESTMENT OF RS.83,90,000/- FOR PROPERTY AT D-198, SAKET, NEW DELHI. REFER PARA 9(VI) PAGE 131 OF WRITTEN SUBMISSION MAD E TO THE ASSESSING OFFICER AND PARA 32 AT PAGE NO.30-32 OF T HE PAPER BOOK FOR SUBMISSION MADE BEFORE THE CIT (APPE ALS). THE ASSESSEE HAD FILED COMPLETE PARTICULARS OF PURCHASE , SALE AND PROFIT DECLARED FOR ABOVE PROPERTY ALONG WITH COPIE S OF BALANCE SHEET. THE ASSESSEE HAS PURCHASED THE PROPERTY D-198, SAKE T, NEW DELHI FROM MR. RAMESH PASI WHO WAS EXAMINED BY ADI. SIMILARLY MR. RAJIV SURI BUYER OF THE PROPERTY WAS SUMMONED BY THE ADI DURING THE COURSE OF POST SEARCH ENQUIRY WHICH FACT IS ON RECORD THE ASSESSING OFFICER DID NOT CHOOSE T O MAKE FURTHER INQUIRY ON THE ISSUE DESPITE THE APPELLANT SPECIFICALLY REQUESTING THE AO TO SUMMON MR.PASI AND MR. SURI RESPECTIVELY IF WANTED TO MAKE ANY ADVERSE INFEREN CE. THE ASSESSING OFFICER DID NOT DISCHARGE HIS ONUS DESPIT E THE EXPRESS SUBMISSION OF THE ASSESSEE ON THE ISSUE. TH E ADI HAD EXAMINED BOTH DURING POST SEARCH ENQUIRIES AND APPA RENTLY NO ADVERSE FINDING WAS RECORDED BY HIM. THE ADDITIO N HAS BEEN MADE ON CONJECTURES SURMISES WITHOUT ANY CORRO BORATION DESERVES TO BE DELETED. THE EXAMINATION OF THESE TWO WITNESSES ONE BEING SE LLER, THE OTHER BEING THE BUYER IS ESSENTIAL FOR CORROBORATIO N OF ADDITION, IF IT IS TO BE SUSTAINED. (F) REGARDING : PARA 3(6) OF THE ASSESSMENT ORDER AND PARA 6 OF THE ANNEXURE ATTACHED TO ASSESSMENT ORDER REGARDING ASOLA PROPERTY:- ANNEXURE A- 1, PAGE NO. 29 (REFER PAGE 3 OF THE COMPILATION OF RELEVANT SEIZED MATERIAL). AN ADDITION OF RS. 37,32,362/- HAS BEEN MADE BY THE ASSESSING OFFICER WHICH WAS ENHANCED BY A SUM OF RS 10 ITA NO. 525 & 548/DEL/2003 48,86,134/- AT PAGE 18 (THIRD LINE OF TOP) WHILE MA KING CALCULATION OF PEAK CREDIT BY THE CIT(APPEALS) . TH E ADDITION WAS MADE WITHOUT ANY BASIS AS SIMPLE SUMS WITHOUT A NY NARRATION THAT HAVE BEEN MENTIONED ON PAGE-29 OF ANNEXURE-AL AT THE BOTTOM STATING COST 85 LAKHS AND SALE 1.85 CRORES HAS BEEN TREATED AS COST AND SALES RESP ECTIVELY. THE ABOVE AMOUNT WAS PROJECTED COST AND THE PROJECT ED SALE PRICE NEITHER THE COST WAS INCURRED NOR SALE WAS EF FECTED. THE LAND WAS A FARM LAND AND THERE WAS A RESTRICTION IN BY-LAWS FOR CONSTRUCTING A FARM HOUSE BEYOND A PARTICULAR P ERCENTAGE OF AREA (FAR WAS RESTRICTED) AND THE FIGURE OF RS.8 5 LAKHS WAS EXPECTED COST AND EXPECTED SALE PRICE OF RS. 1. 85 CRORES WAS MENTIONED IN THE PAPER AS A PROJECTED PLANNING WHICH COULD NOT BE THE BASIS FOR ADDITION WITHOUT BRINGIN G ON RECORD ANY FURTHER EVIDENCE AS ALREADY STATED ABOVE. THE ASSESSEE VIDE HIS SUBMISSION BEFORE C1T (APPEAL S) IN PARA 33 A & B AT PAGE NO.32-34 OF THE PAPER BOOK HA D EXPLAINED THE COMPLETE FACTS AS ALSO POINTED OUT TH E FACT THAT THE DISCLOSED PROFITS WAS FULLY VOUCHED AND WAS BAC KED WITH REQUISITE SALE AND PURCHASE AGREEMENTS WHICH WERE S EIZED DURING THE COURSE OF SEARCH ACTION. (G) REGARDING : PARA 3(7) OF THE ASSESSMENT ORDER AND PARA 11 OF THE ANNEXURE ATTACHED TO ASSESSMENT ORDER :- ANNEXURE A- F, PAGE NO. 29 (REFER PAGE 3 OF THE COMPILATION OF RELEVANT SEIZED MATERIAL) AN ADDITION OF RS.8,79,500/- WAS MADE IN THE HANDS OF MR. VIRENDER NARANG FOR UNDISCLOSED PROFIT FROM SALE OF TERRACE RIGHTS OF PROPERTY NO.53 HEMKUNT COLONY, NEW DELHI. THE ASSESSEE HAD EXPLAINED TO THE AO AS ALSO TO THE CIT (APPEALS) THAT THE APPELLANT WAS NOT THE OWNER IN VIEW OF WHI CH ADDITION COULD NOT BE MADE IN HIS HANDS REFER PARA 34 PAGE NO.34-35 OF THE PAPER BOOK FOR SUBMISSION BEFORE CI T (APPEALS), PARA 9(VIII) PAGE NO.134 OF THE PAPER BO OK FOR SUBMISSION MADE BEFORE THE ASSESSING OFFICER. THE ADDITION DESERVES TO BE DELETED. (H) REG. PARA 3(8) OF THE ASSESSMENT ORDER AND NARA 13 OF THE ANNEXURE (RS. 35.60.000/- FOR PROPERTY BEARING NUMBER S-5, BASEMENT, EAST OF KAILASH, NEW DELHI) ANNEXURE A- 2, PAGE NO. 26-27 (REFER PAGE 6 OF THE COMPILATION OF RELEVANT SEIZED MATERIAL) THE ABOVE PROPERTY WAS NOT OWNED BY THE APPELLANT. THE AO COULD BE REFERRING TO PROPERTY S-5, GREATER KAILASH INSTEAD OF S-5, EAST OF KAILLASH. 11 ITA NO. 525 & 548/DEL/2003 THE ASSESSING OFFICER BY HIS OWN WORKING HAS ESTIMA TED THE UNEXPLAINED INVESTMENT VIDE PARA 13 OF ANNEXURE TO THE ASSESSMENT ORDER AT RS. 3,56,000/- WHEREAS HE HAS D UE TO A CLERICAL ERROR MADE AN ADDITION OF RS. 35;60,000/- AS UNDISCLOSED INCOME ON ACCOUNT OF ABOVE PROPERTY. HO WEVER THE C1T (APPEALS) HAD CORRECTED THE AMOUNT OF ADDIT ION WHILE COMPUTING PEAK CREDIT. THE ABOVE PROPERTY WAS OWNED BY M/S. SAHIL BUILDERS IN VIEW OF WHICH NO ADDITION CO ULD BE MADE IN THE HANDS OF THE APPELLANT WHICH FACT HAD B EEN POINTED OUT TO THE LOWER AUTHORITIES. THE SAME ASSESSING OFFICER HAD MADE BLOCK ASSESSMEN T UNDER SECTION 158BC OF THE PARTNERSHIP FIRM M/S. SA HIL BUILDERS IN WHICH HE HAS NOT MADE ANY ADDITION ON T HIS ACCOUNT. (REFER PAGE 35 PAGE 35 OF PAPER BOOK FOR SUBMISSION MADE BEFORE THE CIT (APPEALS). THE APPEL LANT HAD EXPLAINED TO THE CIT (APPEALS) AND THE AO THAT THERE WAS NO SUCH PROPERTY THAT WAS EVER OWNED BY THE APPELLA NT. (I) REG. PARA 3(9) AND 3(10) OF THE ASSESSMENT ORDER AND PARA 14 OF THE ANNEXURE (RS. 18,00,000/- FOR PROPERTY E-266, GREATER KAILASH, PART-1, NEW DELHI AND H- 43A) :- ANNEXURE A- 2, PAGE NO. 26-27 (REFER PAGE 5-6 OF THE COMPILATION OF RELEVANT SEIZED MATERIAL) AN ADDITION OF RS. 18 LAKHS HAS BEEN MADE FOR INVES TMENT IN PROPERTY E-266, GREATER KAILASH, PART-1, NEW DELHI. THIS PROPERTY WAS OWNED BY MRS. NEERA NARANG AS 100% OWN ER. MOREOVER, 1 ST FLOOR OF PROPERTY E-266, GREATER KAILASH-1 WAS PURCHASED IN 1984 AND SOLD IN THE YEAR 1990 {REFER PAGE 37, LAST PORTION OF PARA 36 OF PAPER BOOK CONTAININ G SUBMISSION BEFORE CIT(A)}. THE AMOUNT WAS EXPECTED SALE REALIZATION WHICH IS E VIDENT FROM PERUSAL OF SEIZED PAGE-26-27 OF ANNEXURE A2. THE AMOUNT OF RS. 27.25 LAKHS FOR PROPERTY BEARING NO. H- 43A, KALKAJI, NEW DELHI. (PAGE-26-27 OF ANNEXURE A2 ) WAS ALSO ADDED IN THE HANDS OF THE ASSESSEE. THE SAID P ROPERTY WAS OWNED BY M/S SAHIL BUILDERS. THE ADDITION WITH RESPECT TO BOTH THE PROPERTIES DE SERVES TO BE DELETED. (J) REG. PARA 3(11) OF THE ASSESSMENT ORDER AND PAR A 15 OF THE ANNEXURE ATTACHED TO ASSESSMENT ORDER : R-L NEHRU ENCLAVE, NEW DELHI- (ANNEXURE A15 PAGE-1-3) AN ADDITION OF RS. 35,81,863/- WAS MADE BY THE ASSE SSING OFFICER VIDE PARA 15 OF THE ANNEXURE TO THE ASSESSM ENT ORDER 12 ITA NO. 525 & 548/DEL/2003 FOR PROPERTY BEARING NUMBER R-L, NEHRU ENCLAVE, NEW DELHI. THIS PROPERTY WAS NOT OWNED BY THE ASSESSEE. M/S. S AHIL BUILDERS HAD ACTED AS A CONTRACTOR ONLY FOR THIS PR OPERTY AND THE APPELLANT DID NOT HAVE OWNERSHIP OF THE PROPERT Y IN VIEW OF WHICH THE QUESTION OF UNEXPLAINED INVESTMENT DOE S NOT ARISE. (REFER SUBMISSION BEFORE AO (REFER PARA 18, PAGE 139 OF PAPER BOOK FOR SUBMISSION BEFORE AO FOR CLARIFICATION GIVEN TO THE AO THAT THE PROPERTY WAS NOT OWNED BY THE APPELLANT AND M/S. SAHIL BUILDERS HAD ACTED AS CONTRACTOR FOR CONSTRUCTION OF THE PROPERT Y). (K) REG. PARA 3(12) OF THE ASSESSMENT ORDER AND PAR A 16 OF THE ANNEXURE ATTACHED TO ASSESSMENT ORDER (AS PER AO BASED ON PAGE 5 OF ANNEXURE A-40) (REFER PAGE 16 OF THE COMPILATION OF RELEVANT SEIZED MATERIAL) AN ADDITION OF RS.98,15,177/- HAS BEEN MADE FOR THE ASSESSMENT YEAR 1997-98 FOR ALLEGED UNEXPLAINED INV ESTMENT IN GRANDLAY CINEMA COMMERCIAL COMPLEX PROJECT. AN A DDITION OF RS. 98,15,771/- WAS MADE ALLEGEDLY ON ACCOUNT OF UNDISCLOSED EXPENDITURE INCURRED FOR PURCHASE OF CO MMERCIAL COMPLEX IN GRANDLAY CINEMA COMMERCIAL COMPLEX. THE FIGURE OF THE UNDISCLOSED INVESTMENT ARRIVED AT BY THE ASSESSING OFFICER IS NOT EVIDENT FROM THE REFERRED SEIZED PAPER. THE ASSESSE ALONG WITH HIS WIFE PURCHASED THE PROPE RTY FOR RS. 35.50 LAKHS (INCLUDING BROKERAGE CHARGES OF RS. 50,000/-). WITHOUT PREJUDICE TO THE FACT THAT THE A DDITION DOES NOT DESERVE TO BE MADE, THE ASSESSING OFFICER DEDUC TED 50% OF DISCLOSED COST FROM THE AMOUNT OF RS. 1,15,90.771/' - AS STATED IN PARA 16 OF THE ANNEXURE TO THE ASSESSMENT ORDER. MRS. NEERA NARANG HAD ALSO SPENT RS. 17.75 LAKHS ON THIS PROPERTY/THE ASSESSING OFFICER HAS NOT REDUCED THE SAME AS WELL. AS PER THE ASSESSEE THE PROPERTY WAS OWNED JOINTLY WITH MRS. NEERA NARANG WHEREAS ADDITION WAS MADE IN THE HANDS OF ASSESSEE ONLY. (REFER PARA 37 PAGE 36 OF SUBMISSION TO CIT (APPEALS). THE ABOVE FACTS ARE BEING HIGHLIGHTE D TO DEMONSTRATE AT THE ADDITIONS HAVE BEEN SUSTAINED BY THE CIT (APPEALS) WITHOUT CORRELATING THE SAME WITH THE FAC TS BROUGHT TO HIS NOTICE. (L) REG. PARA 3(13) OF THE ASSESSMENT ORDER AND PAR A 18 OF THE ANNEXURE ATTACHED TO ASSESSMENT ORDER (REFER PAGE 5- 6 OF COMPILATION) ANNEXURE A 2 PAGE 27) 13 ITA NO. 525 & 548/DEL/2003 THE ADDITION OF RS. 19,46,340/- HAS BEEN MADE FOR UNDISCLOSED INCOME FROM PROPERTY B- 38, PANCHSHEEL ENCLAVE, NEW DELHI. THE FIGURE OF UNDISCLOSED INCOME IS NOT EVIDENT FROM THE SEIZED PAPER. (REFER PARA 38A /38B PAGE-38 OF THE SUBMISSION MADE TO CIT (APPEALS), PARA -9(X) PAGE 1 34- 135 OF THE PAPER BOOK FOR SUBMISSION BEFORE AO). THE ASSESSEE ALONG WITH HIS WIFE AND HUF HAD PURCHASED AN OLD HOUSE BEING B -38, PANCHSEEL ENCLA VE, NEW DELHI. NO SALE WAS MADE IN ASSESSMENT YEAR 1990 - 91, THEREFORE, THERE CAN BE NO QUESTION OF ANY ADDI TION IN ASSESSMENT YEAR 1990- 91.SECOND FLOOR OF THE HOUSE WAS SOLD IN ASSESSMENT YEAR 1991-92 AND ASSESSEES SHAR E OF INCOME RS. 56,330/- WAS DISCLOSED. FIRST FLOOR OF T HE PROPERTY WAS SOLD IN 1993-94 AND THE ASSESSEE DECLARED A PRO FIT OF RS. 1,38,132/-. THE VERY BASIS OF ADDITION HAS NOT BEEN MADE CLEAR TO THE ASSESSEE NOR THE FIGURES ADOPTED BY THE AO (PARA 18 TO THE ANNEUXURE OF THE ASSESSMENT ORDER) COMPREHENSIBLE. THE ASSESSEE HAD FURNISHED A DETAILED REPLY TO THE CIT (APPEALS) IN PARA 38A AND 38B OF HIS SUBMISSION AT PAGE 38 WH EREIN THE ASSESSEE HAD POINTED OUT THAT HE HELD ONLY 1 /3 RD SHARE IN THE PROPERTY. THE TOTAL ADDITION HAS BEEN MADE BY THE A O IN THE HANDS OF THE APPELLANT THOUGH IT IS NOT EVIDENT FRO M THE SEIZED FIGURES HOW TO UNDISCLOSED INCOME HAVE BEEN ARRIVED AT. THE ADDITION DOES NOT DESERVE TO SURVIVE. (M) REG. PARA 3(14) OF THE ASSESSMENT ORDER AND PAR A 19 OF THE ANNEXURE ATTACHED TO ASSESSMENT ORDER FOR PROPERTY BEARING NUMBER A-7, HAUZ KHAS, NEW DELHI ANNEXURE A- 1, PAGE NO. 10 (REFER PAGE 1 OF THE COMPILATION OF RELEVANT SEIZED MATERIAL) THE ASSESSING OFFICER HAS MADE THE ABOVE ADDITION B Y REFERRING IT TO AS UNDISCLOSED INVESTMENT FOR PAYME NT MADE TO SH. ANIL KAPOOR ON THE ALLEGED FAILURE OF THE ASSES SEE TO PRODUCE SH. ANIL KAPOOR. THE DEAL IN THE ABOVE PROPERTY WAS CANCELLED AND TH E ASSESSEE RECEIVED BACK THE AMOUNT PAID. A REGULAR D EED OF CANCELLATION WAS EXECUTED ON 8 TH DAY OF JUNE, 2000 BETWEEN THE APPELLANT AND OWNERS. THE ADDITION MADE ON ACCO UNT OF UNEXPLAINED INVESTMENT IN THIS PROPERTY DOES NOT DE SERVE TO SURVIVE. (N) REG. PARA 3(15) OF THE ASSESSMENT ORDER AND PAR A 20 OF THE ANNEXURE ATTACHED TO ASSESSMENT ORDER (REFER PAGE 14 ITA NO. 525 & 548/DEL/2003 3 OF COMPILATIOU OF SEIZED PAPERS) (ANNEXURE A-L, PAGE 29 OF SEIZED PAPERS) AN ADDITION OF RS. 80 LAKHS HAD BEEN MADE VIDE PARA 20 OF THE ANNEXURE TO THE ASSESSMENT ORDER FOR ALLEGED UNDISCLOSED INVESTMENT IN PROPERTY BEARING NUMBER W -56, GREATER KAILASH-1 FOR WANT OF ANY DOCUMENTARY EVIDE NCE TO THE CONTRARY. THE AO HAS MADE THE ADDITION BY TA KING UP THE FIGURES OF 80 LAKHS SCRIBBLED ON THE LOOSE SHEE T OF PAPER AND TREATED THE SAME AS UNDISCLOSED INVESTMENT. THE ONUS WAS ON THE AO TO CORRELATE THE FIGURE WITH ANY UNDI SCLOSED INVESTMENT, IF ANY, WHEREAS HE HAS CRYPTICALLY STAT ED IN THE ANNEXURE TO THE ASSESSMENT ORDER THAT THE ADDITION WAS BEING MADE FOR WANT OF ANY DOCUMENTARY EVIDENCE TO THE CONTRARY. IT IS SETTLED LAW THAT AN ASSESSEE CANNOT BE EXPECT ED TO PROVE A NEGATIVE. A) IT IS ON REVENUE TO ESTABLISH THAT ASSESSEE HAS C ERTAIN RECEIPT FROM A CERTAIN SOURCE IF ASSESSEE MAKES OUT A PRIMA FACIE CASE NEGATING THE SAME - VIDE AIR 1956 NAG 157. B) WHERE AN ASSESSEE STATES THAT HE HAS NO INCOME F ROM A CERTAIN SOURCE AND THE ASSESSING OFFICER DISBELIE VES HIM, IT IS FOR THE LATTER TO PROVE THAT THE FORMER HAS SUCH IN COME AND NOT FOR THE ASSESSEE TO PROVE THE CONTRARY. ANY ASSESSM ENT BASED ON THE INABILITY OF THE ASSESSEE TO PROVE HIS NEGAT IVE STATEMENT AND ON GENERAL ASSUMPTION ONLY, IS BAD AN D SHOULD BE CANCELLED (AIR 1956 NAS.157). C) CIT VS. DAULAT RAM RAWAT MULL 87 ITR, 349 SC. WHEREIN IT WAS HELD THAT THE ONUS BY THE DEPARTMENT CAN BE CONSIDERED TO BE DISCHARGED ONLY WHEN THE DEPARTMEN T IS ABLE TO BRING ON RECORD EVIDENCE/ MATERIAL TO SHOW THAT THE ALLEGED INVESTMENT WAS IN FACT MADE BY THE RESPONDENT. D) REFER G.S. PARKAR VSB.B. PALEKAR 94 ITR, 16(MUM). THE PRECONDITION FOR INVOKING SECTION 69 IS THAT TH ERE MUST BE CONCLUSIVE ESTABLISHMENT OF AN INVESTMENT ON EVIDEN CE HAVING BEEN MADE BY THE ASSESSEE. THE REVENUE HAS FAILED T O ESTABLISH THAT THE RESPONDENT HAD MADE ANY INVESTME NT. (REFER PARA 3(VII) PAGE 133 & PAGE 40 AND 41 (PARA 40) OF PB FOR SUBMISSION BEFORE AO AND CIT (APPEALS) RESPECTI VELY). THE APPELLANT HAD EXPLAINED DURING THE COURSE OF HE ARING 15 ITA NO. 525 & 548/DEL/2003 BEFORE THE CIT (APPEALS) VIDE PARA 40 PAGE 40 OF HI S SUBMISSION THAT THE DEAL FOR ABOVE PROPERTY HAD BEE N CANCELLED AND THE PROPERTY WAS NEVER OWNED BY THE A PPELLANT. THE APPELLANT HAD PAID RS. 2 LAKHS AS ADVANCE AT TH E TIME OF ENTERING INTO AGREEMENT TO SELL FOR PROPERTY BEARIN G W-56, GREATER KAILASH-1. THE AGREEMENT TO SELL OF RS. 2 L AKHS AND CANCELLATION DEED THEREOF IS PART OF THE SEIZED DOC UMENTS, (PAGE 41 OF PARA 40 OF SUBMISSION BEFORE CIT(A). THE ADDITION HAS BEEN MADE WITHOUT ANY BASIS OR EVI DENCE AT ALL HENCE DESERVES TO BE DELETED. REFER DHAKESWARI COTTON MILLS VS. CIT (1954) 26 ITR 775. (O) REGARDING: ADDITIONS AS PER PARA 4 OF THE ASSESSMENT ORDER, PAPER BOOK PAGE NUMBER 64 FOR ASSESSMENT YEAR 1993-94 TO 1997-98 (REFER PAGE 4 OF COMPILATION OF SEIZED PAPERS) (ANNEXURE A-L, PAGE 30 OF SEIZED PAPERS). A) THE ASSESSING OFFICER VIDE PARA 4 OF THE ASSESSMENT ORDER ON THE BASIS OF (PAGE NO.30 OF ANNEXURE -AL) HAD MA DE AN ADDITION OF RS. 3,50,24,646/- UNDER SECTION 69A FOR INVESTMENT IN PROPERTIES WHICH WERE NOT OWNED BY TH E APPELLANT. THE CIT (APPEALS) IN HIS ORDER VIDE PARA 7.5 PAGE 14 HAD RESTRICTED THE ADDITION TO RS.57.90 LAKHS. B) THE CIT (APPEALS) HAD DELETED THE ADDITION UNDER SE CTION 69A AMOUNTING TO RS.2,92,34, 646/- BY RECORDING HIS FIN DING IN PARA 7.5 PAGE 14 THAT THE ADDITION IN RESPECT OF PR OPERTIES TO THE EXTENT OF RS.2,92,34, 646/- COULD NOT BE SUSTAI NED IN APPELLANTS INCOME AS THE PROPERTIES IN RESPECT OF WHICH ADDITION HAD BEEN MADE BELONGED TO DIFFERENT ASSESS EES. C) THE CIT (APPEALS) HOWEVER, SUSTAINED THE ADDITION O F RS.57.90 LACS BY OBSERVING THAT THE SOURCE OF INVESTMENT IN ASSETS AS GIVEN HEREUNDER AS PER THE SEIZED LOOSE PAPER REFER RED TO ABOVE WAS NOT EXPLAINED BY OBSERVING: HOWEVER, THE APPELLANT HAS NOT GIVEN ANY EVIDENCE T O SUBSTANTIATE THE INVESTMENTS IN RESPECT OF FOLLOWING PROPERTIES/ INVESTMENT: 1. F.20 :14,35,000 2. 4 PLOTS OF GREENFIELD . : 23,80,000 3. BANK BALANCE : 4,75,000 4. CARS : 10,00,000 5. SANIL BUILDERS : 5,00,000 16 ITA NO. 525 & 548/DEL/2003 (ONLY RS.85000 HAS BEEN SHOW IN THE SALE DEED REMAINING INVESTMENT REMAINED UNVERIFIABLE) TOTAL 57,90,000 D) OUR COMMENTS ON THE ABOVE ADDITION OF RS. 57.90 LAKHS SUSTAINED BY THE C1T(A) ARE AS UNDER: I) THE CIT (APPEALS) IN PARA 7.4 PAGE 13 OF HIS ORDER HAS RECORDED THE CONTENTION OF THE APPELLANT THAT P ROPERTY BEARING NUMBER S-5, GK-1 WAS OWNED BY M/S. SAHIL BUILDERS A DIFFERENT ASSESSEES. THE CIT (APPEALS) H AS TREATED THE VALUE OF PROPERTY AT RS. 85,000/- ON THE BASIS OF SALE DEED. II) THE AO HAD COMPUTED THE ADDITION WITH RESPECT TO T HE ABOVE PROPERTY VIDE PARA 13 OF ANNEXURE TO ASSESSME NT ORDER AND HAD MADE AN ADDITION OF RS. 3.56 LAKHS. (INCORRECTLY ADOPTED IN THE ORDER AT RS. 35.60 LAKH S, FURTHER THE ADDRESS OF THE PROPERTY HAS BEEN INCORRECTLY ME NTIONED BY THE AO IN HIS ORDER AS EAST OF KAILASH, INSTEAD OF GK-1) THE CIT (APPEALS) WHILE CALCULATING THE PEAK CREDIT CONSIDERED THE INVESTMENT OF RS. 3.56 LAKHS WHICH A LSO DESERVES TO BE DELETED AS THE PROPERTY BELONGED TO M/S SAHIL BUILDERS WHICH IS A SEPARATE ASSEESSEE AND WHOSE ASSESSMENT HAD BEEN COMPLETED BY THE SAME ASSESSING OFFICER FOR THE BLOCK PERIOD UNDER SECTION 158BC. THE ADDITION OF RS. 57.90 LAKHS SUSTAINED BY THE CI T (APPEALS) INCLUDED VALUE OF CARS OF RS. 10 LAKHS AN D BANK BALANCE OF RS. 4.47 LAKHS. THE VALUE OF CARS STATED AS RS. 10 LAKHS COULD HAVE BEEN THE INSURANCE VALUE OR MARKET VALUE AS THE VEHICLES WERE DECLARED ASSETS AND THE WRITTE N DOWN VALUE OF WHICH AS AT 31 ST MARCH 1997 IN THE HANDS OF THE ASSESSEE AND HIS WIFE WAS DECLARED AND WAS AS UNDER : MR. VIRENDER KUMAR NARANG RS.2,24,678/- MRS. NEERA NARANG RS.1,94,589/- THE CARS WERE FULLY DISCLOSED IN THE AUDITED BOOKS OF ACCOUNTS. THE BANK BALANCES WERE ALSO DISCLOSED IN BOOKS OF A CCOUNTS. THE APPELLANT DID NOT HAVE ANY UNDISCLOSED BANK ACC OUNT NOR WAS ANY FINDING TO THAT EFFECT WAS GIVEN BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER RENDERING THE ADDITION UNSUSTAINABLE WHICH DESERVES TO BE DELETED . THE ADDITION EVEN IF IT WAS TO BE SUSTAINED (THOUGH THE APPELLANT DOES NOT ADMIT THE SAME) COULD NOT HAVE B EEN FOR MORE THAN 50% OF THE VALUE OF RS. 38.43 LAKHS I .E. THE 17 ITA NO. 525 & 548/DEL/2003 ADDITION SHOULD HAVE BEEN RESTRICTED TO RS. 19.22 L AKHS AS THE LOOSE PAPER WHICH HAD BEEN MADE THE BASIS FOR A DDITION REFERRED TO THE APPELLANT AS 50% OWNER. THE CIT (APPEALS) HAD SUSTAINED THE ADDITION WHICH SHOULD BE RESTRICTED TO RS. 19.22 LAKHS INSTEAD OF RS. 57. 90 LAKHS IF IT ALL IT WAS TO BE SUSTAINED WHICH OUGHT TO BE CON SIDERED FOR COMPUTING PEAK INVESTMENT AND NO SEPARATE ADDITION DESERVED TO BE MADE ON THIS ACCOUNT. IN OTHER WORDS , THE TREATMENT FOR ABOVE ADDITION SHOULD HAVE BEEN SIMIL AR TO OTHER ADDITIONS SUSTAINED BY THE CIT(A). (P) REGARDING: PARA 5 ADDITION OF RS. 24,16,500/- O N THE BASIS OF PAGE 46 AND 47 OF ANNEXURE A-2 FOR UNDISCLOSED INVESTMENT WITHOUT SPECIFYING IN WHICH PROPERTY BV SIMPLY OBSERVING THAT THE ASSESSEE FAILED TO EXPLAIN THE INVESTMENT OF RS. 24,16,500/-. (REFER PAGE 13-14 OF COMPILATION OF RELEVANT SEIZED PAPERS). HOW THE AO HAS ARRIVED AT THE FIGURE OF RS. 24,16,5 00/- IS NOT DISCERNIBLE FROM THE PHOTO COPY OF PAGE 46 AND PAGE 47 ANNEXURE A-2 OBTAINED BY THE ASSESSEE FROM DR ON 14.05.2018. THE FACT THAT THE ASSESSEE WAS NOT FURNISHED THE SE IZED PAPER WAS POINTED OUT TO THE CIT (APPEALS) IN THE R EJOINDER TO THE REMAND REPORT (REFER PARA 3 PAGE NUMBER 6 OF PA PER BOOK WHICH IS A COPY OF SUBMISSION FILED WITH CIT (APPEALS)). WITHOUT PREJUDICE TO ABOVE, THE PAGE 46 AND 47 OF ANNEXURE A-2 IS A DUMB DOCUMENT ON WHICH CERTAIN FI GURES HAVE BEEN SCRIBBLED, MORE PARTICULARLY, ON PAGE 46 RECORDING OF SOME CHEQUE ENTRIES AND ON PAGE 47 SOME CHEQUE A ND CASH AMOUNT IS MENTIONED WHICH IS A ROUGH SCRIBBLIN G OF FIGURES UNCONNECTED WITH ANY UNDISCLOSED INCOME OR EXPENDITURE. REFER: - COMMISSIONER OF INCOME TAX VS. GIRISH CHAUDHARY (20 07) 75 CCH 0490 DELHC, (2008) 296 ITR 0619, (2007) 163 TAX MAN 0608. SEARCH AND SEIZUREBLOCK ASSESSMENTUNDISCLOSED INCOMEBEFORE AN ADDITION OF AN UNDISCLOSED INCOME CAN BE MADE, THE AO HAS TO BRING ON RECORD THE MATERIAL FO UND AS A RESULT OF SEARCH TO SHOW THAT THERE IS AN UNDISCLOS ED INCOMEAO TREATED RS. 48 LAKHS AS ASSESSEES UNDISC LOSED INCOME ON THE BASIS OF SEIZURE OF A DOCUMENT WHICH SHOWED CERTAIN UNEXPLAINED ENTRIES TOTALLING 48 NOT JUST IFIED THERE IS NO MATERIAL ON RECORD TO SHOW AS TO AN WHA T BASIS THE AO HAS REACHED THE CONCLUSION THAT THE FIGURE 48 IS TO BE READ AS RS. 48 LACSSAID DOCUMENT IS A DUMB DOCU MENT 18 ITA NO. 525 & 548/DEL/2003 AND LEADS TO NOW HERE ADDITION RIGHTLY DELETED BY THE TRIBUNALTHERE IS NO ERROR IN THE ORDER OF THE TRIB UNAL AND IT DOES NOT GIVE RISE TO A QUESTION OF LAW, MUCH LESS A SUBSTANTIAL QUESTION OF LAW HELD: CONCLUSION ASSESSEE'S UNDISCLOSED INCOME COULD NOT BE TAKEN AS RS. 48 LAKHS ON THE BASIS OF SEIZURE OF A DUMB DOCUMENT WH ICH SHOWED CERTAIN UNEXPLAINED ENTRIES TOTALING '48 'IN THE ABSENCE OF ANY MATERIAL ON RECORD TO COME TO THE CO NCLUSION THAT THE FIGURE 48 IS TO BE READ AS RS. 48 LACS; TRIBUNAL HAVING RIGHTLY DELETED THE ADDITION OF RS. 48 LAKHS , THE ORDER OF THE TRIBUNAL DOES NOT GIVE RISE TO A QUESTION OF LAW, MUCH LESS A SUBSTANTIAL QUESTION OF LAW. (Q) REGARDING: PARA 6 OF THE ASSESSMENT ORDER OF RS . 2,20,80,000/- PAGE 48 OF ANNEXURE A 2 (PAGE 11, 12 OF COMPILATION OF RELAVANT SEIZED PAPERS). I) THE COPY OF SEIZED PAPER 48 OF ANNEXURE A 2 WHICH HAS BEEN OBTAINED FROM THE DR ON 14.05.2018 THERE IS AN OPENING BALANCE REFLECTED IN THE SCRIBBLING OF RS. 1.09 CRORES AND CERTAIN NOTINGS HAVE BEEN MADE. THE FIGURES DO NOT POINT OUT ANY UNRECORDED INCOME OR INVESTMENT. II) THE ASSESSING OFFICER HAS MADE THE ADDITION AS THE ASSESSEE AS PER THE ASSESSING OFFICER FAILED TO EXP LAIN IDENTITY OF ONE SH. R.K. DHAWAN. THERE IS NO MENTIO N OF ANY NAME AS MR. R.K. DHAWAN IN THE SCRIBBLED PAPER EVEN IF FOR THE SAKE OF ARGUMENT IF THE CONTENTS OF THE PAPER A RE TO BE TREATED AS CORRECT. III) THE SCRIBBLING ON THE LOOSE PAPER OF AMOUNT OF RS. 2,20,80,000/- IN THE TOTAL OF THE LOOSE SEIZED PAPE R CANNOT BE TREATED AS UNDISCLOSED INCOME UNDER SECTION 69 FROM ASSESSMENT YEAR 1993-94 TO 1997-98 WITHOUT THERE BE ING ANYTHING FURTHER TO PROVE THAT THE AMOUNT REPRESENT ED THE UNDISCLOSED INVESTMENT AS MADE OUT BY THE ASSESSING OFFICER. (R) REGARDING: PARA 7 FOR RS. 75,000/- ALLEGEDLY HE LD AS UNEXPLAINED EXPENDITURE AS PER ANNEXURE A 2 PAGE 40 (PAGE NO. 15 OF RELEVANT PAGES OF COMPILATION). A COPY OF PAGE NUMBER 40, A-2 IS RECORD OF SOME CON STRUCTION MATERIAL IN THE HAND WRITING OF SOME CONTRACTOR OR LABOUR WHICH HAS NOTHING TO DO WITH THE COMPUTATION OF UND ISCLOSED INCOME AS DONE BY THE LEARNED ASSESSING OFFICER WHI CH DESERVES TO BE DELETED. 19 ITA NO. 525 & 548/DEL/2003 (S) REGARDING: PARA 9 PAGE 22 OF RS. 46,88,281/- RE FER ANNEXURE A- 3, PAGE NO. 56 (PAGE 7 OF THE COMPILATION OF RELEVANT SEIZED PAPERS). AN AMOUNT OF RS. 46,88,281/- WAS ADDED AS PEAK INVESTMENT FOR THE ASSESSMENT YEAR 2000-01 VIDE PAR A 9 OF THE ASSESSMENT ORDER WITHOUT ANY BASIS. THE SE IZED PAPER IS A SLIP WHERE NO PARTY/PROPERTY PARTICULARS ARE MENTIONED AND IT WAS SIMPLY A ROUGH PAGE MERITING N O CONSIDERATION. THE SCRUTINY OF THE PAGE REVEALS THAT IT IS NOTING WHICH IS RELATED WITH ANY INCOME OR INVESTMENT AND ROUGH JOTTING HAS BEEN ADDED AS INCOME WITHOUT ANY BASIS WHICH DESERVES TO BE DELETED. THE PRESUMPTION U/S 132(4A) AS REPEATEDLY EMPHASIZED BY VARIOUS JUDICIAL PRECEDENT S IS REBUTTABLE. (T) REGARDING: PARA 10 OF THE ASSESSMENT ORDER (PAG E 8 OF THE COMPILATION OF SEIZED PAPERS) REFER ANNEXURE A- 4, PAGE NO. 1 I) AN ADDITION OF RS. 47,00,000/- WAS MADE AS UNDISCL OSED INVESTMENT IN PROPERTY F-38A, OKHLA INDUSTRIAL AREA BY REFERRING TO ANNEXURE A 4 PAGE NUMBER 1 (THE AO INCORRECTLY MENTIONED PAGE 1 ANNEXURE A 1). II) THE BASIS AS TO HOW THE FIGURE OF UNDISCLOSED INVE STMENT OF RS. 47,00,000/- HAS BEEN ARRIVED AT IS UNCLEAR. THE PERUSAL OF ABOVE, SEIZED PAPER REVEALS THAT THE SEIZED PAPE RS IS ONLY COPY OF ALLOTMENT LETTER BY DDA IN FAVOUR OF M/S. N ATIONAL TRADERS. REFER PARA 9(XI) OF SUBMISSION MADE TO THE ASSESSING OFFICER AT PAGE 135 OF THE PAPER BOOK (U) REGARDING: PARA 11 OF THE ASSESSMENT ORDER OF R S. 14 LAKHS IS TREATED AS UNEXAMINED AND ADDED BACK TO THE INCO ME AS UNDISCLOSED INCOME FOR THE ASSESSMENT YEAR 1997-98 UNDER SECTION 69A WITHOUT ANY BASIS OR ANY REFERENCE TO A NY SEIZED JOTTINGS WHICH ALSO DESERVES TO BE DELETED. THERE IS NO REFERENCE TO ANY PAGE OF SEIZED ANNEXUR E FOR THIS ADDITION WHICH IS AGAIN WITHOUT ANY BASIS. (V) REGARDING: PARA 12 AN ADDITION OF RS. 27,99,561 /- HAS BEEN MADE AS UNEXPLAINED EXPENDITURE UNDER SECTION 69C @ OF RS. 4,66,593/- PER YEAR FROM 1995- 96 TO 2000- 01 ON THE BASIS OF PAGE 25 -28 OF ANNEXURE 37 AND ANNEXURE 24 AND 36. (PAGE NUMBER 199-242 AND 261-262 OF OLD PAPER BOOK OF SEIZED MATERIAL). 20 ITA NO. 525 & 548/DEL/2003 REFER PARA 23(C) PAGE NUMBER 20 OF THE PAPER BOOK F OR COPY OF REPLY FURNISHED TO THE CIT (APPEALS). THE BASIS AND THE RATIONAL OF ADDITION CANNOT BE JUSTIFIED IN THE ABS ENCE OF ANY CREDIBLE EVIDENCE HAVING BEEN BROUGHT ON RECORD TO TREAT THE SAME AS UNEXPLAINED EXPENDITURE UNDER SECTION 69C O F THE ACT. (W)PARA 13 OF ASSESSMENT ORDER OF RS. 7,56,582/- PA GE 9-10 OF THE COMPILATION OF RELEVANT SEIZED PAPERS). REFER ANNEXURE A- 49, PAGE NO. 61 I) AN ADDITION OF RS. 7,56,582/- HAS BEEN MADE FOR AL LEGED PERSONAL EXPENDITURE FOR PROPERTY BEARING NUMBER B- 38, PANCH-SHEEL ENCLAVE, DELHI. II) THE AMOUNT TREATED AS UNEXPLAINED PERSONAL EXPENDI TURE WAS THE AMOUNT OF ELECTRICITY CHARGES COLLECTABLE F ROM VARIOUS TENANTS AND DID NOT PERTAIN TO THE APPELLAN T. ADDITION MADE ON ESTIMATE GUESSWORK, DESERVES TO BE DELETED. (X) REGARDING: PARA 15 OF THE ASSESSMENT ORDER OF R S. 3,75,00,000/- A PROTECTIVE ADDITION OF RS. 3,75,00,000/- WAS MADE BY THE ASSESSING OFFICER VIDE PARA 15 OF THE ASSESSMENT OR DER FOR WHICH SUBSTANTIVE ADDITION WAS MADE IN THE HANDS OF M/S RAVICO. THE ADDITION WAS DELETED BY THE CIT (APPEAL S) WHICH DELETION DESERVES TO BE SUSTAINED. 12) THE ASSESSING OFFICER HAS INVOKED THE PROVISIONS OF SECTION 132(4A). THE SECTION WAS INSERTED BY TAXATION LAWS AMENDMENT ACT, 1975 W.E.F. 01.10.1975. THE PROVISIO N RAISES A PRESUMPTION AGAINST THE ASSESSEE THAT ANY DOCUMENT, MONEY, BULLION ETC IS FOUND IN POSSESSION OR CONTROL OF ANY PERSON IN THE COURSE OF SEARCH MAY B E PRESUMED THAT THE CONTENTS OF SUCH BOOKS OF ACCOUNT S AND OTHER DOCUMENTS ARE TRUE WHICH ARE IN THE HAND WRIT ING OF ANY PARTICULAR PERSON WHICH IS A REBUTTAL PRESUMPTI ON. 13) THERE ARE JUDICIAL PRECEDENTS WHICH HAVE LAID DOWN THAT THE PRESUMPTION IS A REBUTTABLE PRESUMPTION AND THE ONU S IS ON THE PERSONS SEARCHED TO REBUT THE PRESUMPTION. HOWE VER, THE PRESUMPTION CANNOT BE INVOKED ON FLIMSY GROUNDS OR ON CONJECTURES AND SURMISES WITHOUT THE ASSESSING OFFI CER BRINGING ON RECORD ANY CORROBORATIVE EVIDENCE OR MA TERIAL TO JUSTIFY THE ADDITION. 14) IN THE CASE OF S.P. GOYAL VS. DCIT 82 ITD 85 (MUM) TM IT WAS HELD THAT THE LOOSE PAPER IN ITSELF HAS NO INTR INSIC VALUE, 21 ITA NO. 525 & 548/DEL/2003 WHEN IT IS MERE ENTRY ON LOOSE SHEET OF PAPER AND I F THE ASSESSEE CLAIMS THAT IT WAS A PLANNING ONLY NOT SUP PORTED BY ACTUAL CASH. THEN THERE HAS TO BE CIRCUMSTANTIAL EVIDENCE TO SUPPORT THAT THE ENTRY CONTAINED IN THE LOOSE PA PER REPRESENTED CASH OF RS. 60 LAKHS. 15) IN THE ABSENCE OF CIRCUMSTANTIAL EVIDENCE IN THE F ORM OF CASH, JEWELLERY OR INVESTMENT OUTSIDE THE BOOKS FOU ND DURING THE COURSE OF SEARCH ACTION, THE TRIBUNAL RIGHTLY H ELD THAT THE EXPLANATION OF THE ASSESSEE COULD NOT BE REJECTED A ND DELETED THE ADDITION. REFER COMMISSIONER OF INCOME TAX VS. P.V. KALYANASUNDARAM 294 ITR 49 (SC). THE SUPREME COURT IN THIS CASE DISMISSED THE SLP DI RECTED AGAINST THE JUDGMENT OF DIVISION BENCH OF MADRAS HI GH COURT BY OBSERVING THAT NO SUBSTANTIAL QUESTION OF LAW AR OSE IN VIEW OF WHICH THE APPEAL WAS RIGHTLY DISMISSED BY T HE HIGH COURT. IN THIS CASE, THE ASSESSEE IN A STATEMENT SU BMITTED THAT HE COULD NOT REMEMBER WHY THE NOTING HAD BEEN MADE AND CONTRARY STATEMENT OF THE SELLER OF PROPERTY MR . RAJA RATHINAM WAS NOT RELIED UPON. THE TRIBUNAL IN THIS CASE HELD THAT THE NOTINGS ON THE LOOSE PIECES OF PAPER ON TH E BASIS OF WHICH THE INITIAL SUSPICION WITH REGARD TO UNDER VA LUATION HAD BEEN RAISED WERE WAIVED AND COULD NOT BE RELIED UPON. 16) REFERENCE IS ALSO INVITED TO THE DECISION OF CIT V S. D.K. GUPTA 308 ITR 230 (DEL) WHEREIN THE HIGH COURT HELD THAT MERELY WHERE IN CASE NOTINGS OF OFFERS RECEIVED WER E RECORDED, DOES NOT MEAN THAT THE TRANSACTION HAD AC TUALLY TAKEN PLACE AND THAT SECTION 132(4A) DID NOT AUTHOR IZE THE ASSESSING OFFICER TO RAISE SUCH A PRESUMPTION PARTI CULARLY WHEN THE ASSESSEE HAD OFFERED THE EXPLANATION ALONG WITH THE DOCUMENTS AND EVIDENCE AND HAD ALSO FURNISHED A N AFFIDAVIT TO THIS EFFECT AND THE ASSESSING OFFICER ALSO HAD MADE ENQUIRIES WITH RESPECT TO SUCH REPLY GIVEN BY THE ASSESSEE. THE TRIBUNAL IN THE ABOVE CASE HAD GIVEN A FINDING OF FACT THAT THERE WAS NO CORROBORATIVE OR DIRECT EVIDENCE TO PRESUME THAT THE NOTTINGS/ JOTTINGS HAD MATERIALIZED INTO T RANSACTIONS GIVING RISE TO INCOME NOT DISCLOSED IN THE REGULAR BOOKS OF ACCOUNTS. 17) THE WORDS MAY PRESUME LEAVE IT TO THE COURT OR T HE AUTHORITY TO MAKE OR NOT TO MAKE THE PRESUMPTION KE EPING IN VIEW THE CIRCUMSTANCES OF THE CASE. SUCH PRESUMPTIO N IS OPTIONAL AND THE COURT OR THE AUTHORITY IS NOT BOUN D TO MAKE IT EVEN IF THE COURT MAKE SUCH PRESUMPTION, THE SAM E IS REBUTTABLE UNDER THE PROVISIONS OF THE ACT. IT IS T HE REAL INCOME WHICH HAS TO BE TAXED AND NOT THE HYPOTHETIC AL 22 ITA NO. 525 & 548/DEL/2003 INCOME. 18) REFER ASSISTANT CIT VS. RADHEYSHYAM PODDAR 41 ITD 447 (CAL) WHEREIN THE TRIBUNAL HAD HELD THAT NO INC OME HAS RESULTED AT ALL ON THE BASIS OF UNSIGNED MEMO, THER E IS NEITHER ACCRUAL NOR RECEIPT OF INCOME IN VIEW OF WH ICH NO ADDITION COULD BE MADE ON THE BASIS OF MEMO. 19) REFER BRIJ LAI RUPCHAND VS. ITO 40 TTJ 668 WHICH L AYS DOWN THAT ONE CANNOT BE PERMITTED TO DRAW FREELY AN Y PRESUMPTION UNSUPPORTED BY REASONS. 20) THE KARNATAKA HIGH COURT IN THE CASE OF ITO VS. T. ABDUL MAJEED 169 ITR 440 (KER) HELD THAT IT IS NOT NECESS ARY THAT THE COURT HAS TO DRAW A PRESUMPTION UNDER SECTION 1 32(4A) REGARDING THE CONTENTS OF SEIZED DOCUMENTS IRRESPEC TIVE OF OTHER FACTORS WHICH MAY DISSUADE THE COURT OR AUTHO RITY FROM DOING SO. 21) IN P.K. NARAYANAN VS. INCOME TAX OFFICER 48 TTJ 12 5 (COACHIN) TM IT WAS HELD THAT ADDITION BURDEN MUST BE DISCHARGED BY REVENUE BY INDEPENDENT ENQUIRY AND DOCUMENTS SEIZED DURING THE SEARCH. 22) CIT VS. D.K. GUPTA (2009) 308 ITR 230 (DEL) IN RESPECT OF NOTINGS AND JOTTINGS IN THE DOCUMENTS SEIZED DURING SEARCH, THE ASSESSEE OFFERED EXPLANATION ALO NG WITH DOCUMENTS, EVIDENCE AND AFFIDAVIT. IN SUCH A CASE T HE BURDEN TO PROVE THAT THE ASSESSEEE WAS WRONG WOULD BE ON THE DEPARTMENT. SINCE THE TRIBUNAL RECORDED A FINDI NG THAT NO EVIDENCE WAS THERE TO PRESUME THAT NOTINGS MATER IALIZED INTO TRANSACTION, THE ASSESSEE COULD BE MADE LIABLE TO TAX ONLY RECEIPT PROVED TO BE INCOME OF THE ASSESSEE. 23) ITO VS. MOHAN LAI VIG 139 ITR 681 (P & II) WHEREIN IT WAS HELD IN THE CONTEXT OF PROSECUTION OF PARTNERS UNDE R SECTION 277/193, 1PC THAT 'EVEN IF IT BE PRESUMED THAT THE RECOVERY OF THE DASTI BAHI FROM THE BUSINESS PREMISES OF THE FIRM STOOD PROVED, IT COULD NOT BE SAID THAT PROOF OF TH E RECOVERY OF DASTI BAHI ALSO AMOUNTED TO THE PROOF OF THE TRUTH OF THE CONTENTS OF DASTI BAHI. IN ORDER TO SHOW THAT THE B AHI CONTAINED A TRUE ACCOUNT RELATING TO THE BUSINESS C ONDUCTED BY THE FIRM, SOME EVIDENCE SHOULD HAVE BEEN LED BY RESPONDENTS OR SOMEBODY AT THEIR INSTANCE BUT NO EV IDENCE HAS BEEN PRODUCED TO PROVE THE CONTENTS OF THE BAHI '. UNDISCLOSED INCOME OF THE BLOCK PERIOD HAS TO BE DE TERMINED ON THE BASIS OF EVIDENCE FOUND A RESULT OF SEARCH O R 23 ITA NO. 525 & 548/DEL/2003 REQUISITION OF BOOKS OF ACCOUNT OR OTHER DOCUMENTS AND SUCH OTHER MATERIALS OR INFORMATION AS ARE AVAILABLE WIT H THE ASSESSING AUTHORITY AND RELATABLE TO SUCH EVIDENCE WITH CERTAIN OTHER CONDITIONS. IT IS NOT OPEN TO THE ASS ESSING AUTHORITY TO COMPUTE THE INCOME ON THE BASIS OF BES T JUDGEMENT. (COMMISSIONER OF INCOME TAX VS. DR. RATA N KUMAR SINGH (2013) 357 ITR 35 (ALL). IN ACIT VS. SATYA PAL WASSAN (2007) 295 ITR (AT) 35 2 (LAB), ASSESSEE DENIED KNOWLEDGE OF LOOSE PAPERS DU RING SEARCH AND FDED AFFIDAVITS OF PERSONS NAME IN THE L OOSE PAPERS TO SHOW THAT TRANSACTIONS DID NOT BELONG TO HIM. AO WITHOUT FURTHER INVESTIGATION.OR INQUIRY HELD THAT DOCUMENTS REPRESENTED LOANS MADE BY ASSESSEE IN PARTICULAR YE AR. HELD THAT ASSESSEE HAD REBUTTED THE PRESUMPTION THAT DOC UMENTS BELONGED TO HIM. ONUS SHIFTED ON TO THE AO WHO WAS CONSEQUENTLY BOUND TO COLLECT EVIDENCE TO PROVE THA T DOCUMENT BELONGED TO ASSESSEE. AO HAD DRAWN PRESUMP TION ON THE BASIS OF SURMISES AND ADDITIONS MADE UNDER T HESE PRESUMPTIONS WERE NOT SUSTAINABLE. 24) ELITE DEVELOPERS VS. DEPUTY COMMISSIONER OF INCOME TAX (2000) 73 ITD 379 (NAG), IT WAS HELD AS UNDER: (I) SEIZED PAPERS WERE NOT SPEAKING DOCUMENTS AS TH EY DID NOT CONTAIN ANY NARRATION OR DESCRIPTION ABOUT THE DIFFERENT FIGURES NOTED THEREIN. NO DOCUMENT CONTAI NED ANY NARRATION OF ON-MONEY. REVENUE HAD NOT EXAMINED THE PURCHASERS AND HAD NOT COLLECTED EVIDENCE OR MATERIAL TO CORROBORATE THE ALLEGATION REGARDING ON - MONEY. SECTION 132(4A) DID NOT PERMIT THE AO TO PRESUME THE RECEIPT OF ON-MONEY. ASSESSMENT ON THE BASIS OF THESE SEIZED PAPERS WAS NOT JUSTIFIED. (II) PRESUMPTION UNDER SECTION 132(4A) ABOUT THE CO RRECTNESS WOULD APPLY ONLY TO DOCUMENTS FOUND AT THE TIME OF SEARCH AND NOT TO ITS DEEMED CHANGED VERSION. (III) AO HAD ESTIMATED ON BASIS OF PROBABILITIES, P OSSIBILITIES, GUESS, SURMISES AND CONJECTURES. (IV) ESTIMATED INCOME ON THE BASIS OF ALLEGED ON-MO NEY COULD NOT BE INCLUDED UNDER SECTION 158B. 07 THE MAIN CONTENTION OF THE ASSESSEE WAS THAT THE WH OLE ADDITION WAS MADE ON THE BASIS OF PURE GUESS WORK, PROBABILITIES , CONJECTURES- SURMISES AND WITHOUT EXAMINING THE ASSESSEE OR THE BUYERS AND SELLERS 24 ITA NO. 525 & 548/DEL/2003 OF PROPERTY. THE LD. ARS MAIN CONTENTION IS THAT CERTAIN PROPERTIES FOR WHICH THE TRANSACTION HAS TAKEN PLACE WERE CANCELLE D LATER ON EVEN THEN THE LD ASSESSING OFFICER HAS MADE THE ADDITI ON OF THEIR PROPERTY. HE FURTHER STATED THAT THE INVESTIGATION WING HAS CARRIED OUT POST SEARCH ENQUIRIES WHERE NO ADVERSE MATERIAL WAS F OUND AGAINST THE ASSESSEE. THE ASSESSING OFFICER DID NOT ISSUE SUMM ONS TO SOME OF THE PARTIES DESPITE ASSESSEE REQUESTED SPECIFICALLY. THE LD. AR FURTHER STATED THAT CERTAIN PROPERTIES WERE OWNED BY ANOTHE R PARTNERSHIP FIRM M/S SAHIL BUILDERS AND FOR WHICH THE ADDITION WAS M ADE IN THE HANDS OF THE ASSESSEE WHICH SHOULD HAVE BEEN MADE IN THE HANDS OF THE FIRM. CERTAIN ADDITIONS MADE BY THE ASSESSING OFFICER ARE NOT BORNE OUT FROM THE SEIZED DOCUMENTS BUT ARE PURE GUESS WORK OF TH E LD ASSESSING OFFICER. THE LD. AR FURTHER STATED THAT THE ASSESS ING OFFICER HAD MADE THE ADDITION WITH RESPECT TO ONE MR. R. K. DHAWAN W HICH IS MENTIONED IN THE SEIZED DOCUMENTS. HOWEVER, THE ASSESSEE DOE S NOT KNOW THAT GENTLEMAN AS WELL AS THE ASSESSING OFFICER DID NOT EXPLAIN THE IDENTITY OF THAT GENTLEMAN. THE LD. AR FURTHER ARGUED THAT T HE PROVISIONS OF SECTION 132(4A) AND 292C ARE THE REBUTTABLE PRESUMP TIONS. HOWEVER, NO OPPORTUNITY WAS GIVEN TO THE ASSESSEE TO REBUT T HE SAME. THE LD. AR FURTHER STATED THAT BOTH THESE SECTIONS DO NOT G IVE ANY RIGHT TO THE ASSESSING OFFICER TO PRESUME CONTENTS OF INCOME IN THOSE SEIZED PAPERS. HE ALSO HARPED UPON THE ARGUMENTS THAT THE SEIZED PAPERS ARE DUMB DOCUMENTS, DOES NOT BELONG TO THE ASSESSEE, DO ES NOT CONTAIN ANY INCOME CHARGEABLE TO TAX, THE DOCUMENTS DO NOT GIVE ANY INDICATION OF INCOME CONTAINED THEREIN. HE FURTHER STATED THAT THE ASSESSING OFFICER FAILED TO CORROBORATE ANY SUPPORT ING EVIDENCES TO SHOW THAT THE INCOME HAS BEEN EARNED BY THE ASSESSE E. THE LD. AR FURTHER STATED THAT AN ESTIMATED INCOME ON THE BASI S OF ALLEGED ON MONEY TRANSACTIONS SHOULD NOT BE INCLUDED U/S 158BC OF THE ACT. 08 THE LD. DR VEHEMENTLY CONTESTED THE ARGUMENTS OF T HE LD. AR AND HE SUBMITTED THAT EACH AND EVERY SEIZED DOCUMENTS WERE PROVIDED TO THE ASSESSEE. THE COMPLETE OPPORTUNITY WAS GRANTED TO THE ASSESSEE TO EXPLAIN THE CONTENT OF THOSE PAPERS. THE PARTNERS OF THE ASSESSEE MR. 25 ITA NO. 525 & 548/DEL/2003 S. S. SODHI WAS ALSO GIVEN AN OPPORTUNITY TO EXPLAI N. BOTH THE PERSONS, ASSESSEE AND MR SODHI DID NOT EXPLAIN THE CONTENTS OF THE SEIZED PAPERS. NONE OF THE ADDITION IS MADE BY THE ASSESSING OFFICER WITHOUT ANY CORROBORATING EVIDENCE BUT IS EMPHATIC ALLY BORNE OUT OF THE SEIZED MATERIAL WHERE THE DETAILED CALCULATION S WERE GIVEN. IN NUT SHELL, THE LD. DR SUBMITTED THAT EACH AND EVERY CAL CULATION OF UNACCOUNTED INCOME MADE BY THE ASSESSING OFFICER IS CLEARLY VISIBLE FROM THE INCRIMINATING EVIDENCES FOUND DURING THE C OURSE OF SEARCH. HE ALSO POINTED OUT THE PAPER BOOK AND SUBMITTED TH AT THE DOCUMENTS WHICH LD. AR SHOWED ARE ALL THE PAPERS WHICH ARE SE IZED BY THE DEPARTMENT AND BASED ON WHICH THE ADDITIONS HAVE BE EN MADE ARE ALREADY EXISTING ON RECORD. IN THE END, AFTER OBTA INING THE COPY OF THE PAPER BOOK OF THE LD. AR, THE DR SUBMITTED A DETA ILED CHART SHOWING THAT EACH AND EVERY PARAGRAPH OF THE ASSESSMENT ORD ER IS LINKED TO THE SEIZED PAPER MENTIONED AND THOSE PAPERS ARE A VAILABLE IN THE PAPER BOOK FURNISHED BY THE ASSESSEE. THE LD. DR S MAIN CONTENTION WAS THAT THE ASSESSEE WAS GIVEN AMPLE OPPORTUNITIES BUT THE ASSESSEE ALWAYS TOOK THE SHELTER UNDER THE LEGAL ARGUMENTS A ND NEVER CAME OUT WITH THE CORRECT FACTS MENTIONED IN SEIZED DOCUMEN TS. HE FURTHER REFERRED TO THE PROVISIONS OF SECTION 292C OF THE A CT AND SUBMITTED THAT PRESUMPTION ON BOOKS OF ACCOUNTS AND ASSETS IS AVAILABLE TO THE REVENUE FOR ALL THE PROCEEDINGS. HE STATED THAT ON CONJOINT READING OF SECTION 132A OF THE ACT AS WELL AS THE PROVISIONS O F SECTION 292C OF THE ACT THERE DOES NOT REMAIN ANY DOUBT THAT IT IS FOR THE ASSESSEE TO COME OUT WITH THE CLEAN HANDS AND SHOW THAT WHAT IS UNDI SCLOSED INCOME IN THE HANDS OF THE ASSESSEE BASED ON THESE SEIZED PA PERS. THE LD. DR SUBMITTED THAT NEITHER BEFORE THE ASSESSING OFFICE R NOR BEFORE THE CIT(A) THE ASSESSEE HAS SHOWN ANY EFFORT TO EXPLAI N THOSE PAPERS. HE FURTHER STATED THAT THE ASSESSEE AS WELL AS MR. S. S. SODHI BOTH ARE EXAMINED BY THE ASSESSING OFFICER BUT BOTH OF THEM TACTFULLY IGNORED TO SHOW THE CONTENT OF THE SEIZED MATERIAL AND UNDISCL OSED INCOME THEREIN. 26 ITA NO. 525 & 548/DEL/2003 09 COMING TO THE APPEAL OF THE REVENUE, HE STATED THAT THE CIT(A) HAS ERRED IN INTRODUCING THE CONCEPT OF PEAK CREDIT IN CASE OF BLOCK ASSESSMENT. HE SUBMITTED THAT THERE IS NO PROVISIO N IN THE ACT TO INCORPORATE AND GIVE BENEFIT OF PEAK CREDIT TO THE ASSESSEE. HE FURTHER STATED THAT ASSESSEE HAS PAID MONEY AS ADVANCE FOR PURCHASE OF PROPERTY TRANSACTIONS, HOWEVER, SOURCE OF SUCH PAY MENT OF MONEY WAS NOT DISCLOSED BY THE ASSESSEE. HE FURTHER STATED T HAT IT DOES NOT MATTER THAT WHETHER SUBSEQUENTLY THE DEAL IS CANCEL LED OR NOT. HE SUBMITTED THAT WHEN THE DEAL HAPPENS THEN PROFIT OF THE IS REQUIRED TO BE TAXED AS UNDISCLOSED PROFIT. HOWEVER, THE ASSES SEE HAS MADE THE CASH PAYMENT FOR THE PURCHASE OF THE PROPERTY WHIC H WAS CANCELLED. THERE IS NO EVIDENCE HOW THE MONEY WAS PAID INITIAL LY BY THE ASSESSEE AND WHAT IS THE SOURCE OF SUCH MONEY. HE FURTHER ST ATED THAT SUBSEQUENTLY WHEN THE DEAL IS CANCELLED , THERE IS NO EVIDENCE HOW SUCH MONEY IS USED BY THE ASSESSEE. THE LD CIT (A) HAS IGNORED THIS FACT COMPLETELY. HE SUBMITTED THAT ASSESSEE IS REQ UIRED TO EXPLAIN THE SOURCE OF CASH. HE SUBMITTED THAT THE ASSESSEE HAS PAID RS. 1.04 CRORES WHICH ARE NOT RECORDED IN THE BOOKS OF THE A SSESSEE. THEREFORE, WITHIN THE ADDITION OF RS. 2.10 CRORES, THIS ADDITI ON CANNOT BE DELETED. THE LD. DR SPECIFICALLY REFERRED TO PARA NO. 8 TOWA RDS ALLEGED CASH PAYMENT MADE FOR THE PROPERTY AT A-7, HAUZ KHAS ENC LAVE, NEW DELHI. HE STATED THAT THE ASSESSEE DOES NOT HAVE ANY EXPLA NATION FOR THE ABOVE TRANSACTION OF CASH PAID. WITH RESPECT TO TH E OTHER TRANSACTIONS, HE SUBMITTED THAT THE ASSESSING OFFICER HAS CORRE CTLY APPRECIATED THE SEIZED DOCUMENT, AND THEREFORE, THE TOTAL ADDITION IS REQUIRED TO BE UPHELD. 10 THE LD. AR DURING THE COURSE OF APPELLATE PROCEEDIN GS FILED AN AFFIDAVIT OF THE ASSESSEE INVOKING RULE 10 OF THE INCOME TAX APPELLATE TRIBUNAL RULE, 1963 AND SUBMITTED THAT CERTAIN ADDITION MADE BY THE ASSESSING OFFICER ARE WITH RESPECT TO THE PROPERTIES NOT OWNE D AND HELD BY THE ASSESSEE. HE THEREFORE, STATED THAT THE INCOME IS REQUIRED TO BE TAXED IF ANY, ONLY IN THE HANDS OF THE REAL OWNER OF THE PROPERTY AND NOT TO THE ASSESSEE. HE FURTHER REFERRED THAT THERE ARE C ERTAIN TOTALING ERRORS 27 ITA NO. 525 & 548/DEL/2003 IN THE ASSESSMENT ORDER MADE BY THE ASSESSING OFFIC ER WHICH ARE REQUIRED TO BE CORRECT. HE FURTHER STATED THAT THE TOTAL ADDITION OTHERWISE INSTEAD OF RS. 20.51 CRORES CAN BE ONL Y OF RS. 18.15 CRORES. HE FURTHER STATED THAT THERE IS NO BREAK UP OR EVID ENCE OF THE ADDITION ON ACCOUNT OF SUPERVISIONS CHARGES MADE BY THE ASSE SSING OFFICER. HE FURTHER REFERRED TO THE SEVERAL FACTUAL INACCURACIE S IN THE ORDER OF THE ASSESSING OFFICER. FOR THIS, THE LD. AR SUBMITTED ANNEXURE-2 ALONG WITH THE AFFIDAVIT. HE FURTHER STATED THAT HEMKUNT COLONY WAS NOT A PROPERTY IN THE NAME OF THE ASSESSEE BUT IN THE NAM E OF HIS HUF. PROPERTY OF BLOCK-E NO H-43 A IS IN THE NAME OF M/S SAHIL BUILDERS AND FURTHER PROPERTY AT NEHRU ENCLAVE, NEW DELHI I S NEITHER OWNED BY THE ASSESSEE NOR BY ANY OF GROUP ENTITIES. HE FURT HER STATED THAT M/S SAHIL BUILDERS ONLY ACTED AS A CONTRACTOR. HE FUR THER STATED THAT WITH RESPECT TO THE GRINDLAY CINEMA COMMERCIAL COMPLEX WHERE THE ASSESSEE AND HIS WIFE ARE EQUAL OWNERS AND WHICH IS RECORDED IN THE BOOKS OF ACCOUNT AT RS. 1775000/- HAS NOT BEEN GRAN TED AS DEDUCTION BY THE ASSESSING OFFICER WHILE MAKING ADDITION. H E FURTHER REFERRED TO THE FACT THAT CERTAIN SEIZED DOCUMENTS ARE NOT AVA ILABLE AND IT IS NOT POSSIBLE TO QUANTIFY THE AMOUNT PAID BY THE ASSESSE E ON THE BASIS OF THE SEIZED DOCUMENTS. THE LD. AR LISTED SEARCH INS TANCES IN ANNEXURE-3 OF HIS AFFIDAVIT SAME IS AS UNDER :- 11 THE LD DR FAIRLY AGREED THAT IN CASE OF ANY FACTUAL INACCURACIES ARE CONCERNED SAME MAY BE VERIFIED BY THE LD AO. 12 WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND ALSO PERUSED THE ORDERS OF THE LOWER AUTHORITIES. AS DECIDED IN THE CASE OF M/S SONAL CONSTRUCTION (SUPRA) THE SEIZED DOCUMENTS WERE FOUN D DURING THE COURSE OF SEARCH WHICH WAS NOT EXPLAINED BY THE ASS ESSEE BEFORE THE LOWER AUTHORITIES. HOWEVER, THE LD. AR CONTENDED T HAT THE ABOVE DOCUMENTS ARE DUMB DOCUMENTS, DO NOT RELATE TO THE ASSESSEE, WE ARE OF THE VIEW THAT THE PROVISION OF SECTION 132(4A) A S WELL AS SECTION 292C OF THE ACT RAISED A PRESUMPTION AGAINST THE AS SESSEE WITH RESPECT TO THE ASSETS AND DOCUMENTS SEIZED AND FUND DURING THE COURSE OF SEARCH FROM THE ASSESSEE. IT IS EXPECTED THAT SUCH PRESUMPTION ARE 28 ITA NO. 525 & 548/DEL/2003 REBUTTABLE PRESUMPTIONS AND, THEREFORE, TO REBUT SU CH PRESUMPTIONS IT IS FOR THE ASSESSEE TO DISPEL THE DOUBT ABOUT TAXAB ILITY OF ITS INCOME BY PRODUCING THE COGENT AND RELEVANT AND CREDIBLE EVID ENCES. IF THE ASSESSEE FAILS TO DO SO NO FAULT CAN BE FOUND AT TH E DOOR STEP OF THE ASSESSING OFFICER FOR MAKING ANY ADDITION BASED O N THOSE SEIZED MATERIAL. IN THIS CASE, THE ASSESSEE HAS TRIED TO TAKE SHELTER UNDER THE LEGAL ARGUMENTS BEFORE THE LOWER AUTHORITIES WHICH COULD NOT SUCCEED. TIME AND AGAIN THE ASSESSEE WAS ASKED BY THE ASSES SING OFFICER TO EXPLAIN THE CONTENTS OF THE SEIZED MATERIAL. THE A SSESSEE WAS EXAMINED BUT HE DID NOT GIVE ANY EXPLANATION OF THE SEIZED MATERIAL. HIS PARTNERS MR. S. S. SODHI WAS ALSO EXAMINED BUT NO EXPLANATION WAS FORTHCOMING FROM HIM. IN ABSENCE OF ANY EXPLAN ATION FROM THE SIDE OF THE ASSESSEE AND AS THERE IS NO FULL COOPER ATION ON THE PART OF THE ASSESSEE, THE ASSESSING OFFICER MADE THE ABOVE ADDITION. NOW, THE ASSESSEE IS RAISING THE ISSUE OF SEVERAL FACTUAL IN ACCURACIES, CANCELLATION OF SALE-ABILITY, NON-EXAMINATION TO CE RTAIN PERSONS DESPITE MAKING REQUEST TO THE ASSESSING OFFICER ETC. IDENT ICAL ISSUES HAVE BEEN DECIDED BY US IN CASE OF M/S SONAL CONSTRUCTION A S WELL AS IN THE CASE OF THE WIFE OF THE ASSESSEE. THE ISSUE IN M/S SONAL CONSTRUCTION HAS BEEN DECIDED VIDE PARA NO. 16 TO 29 HEREUNDER:- 16. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENT IONS AND ALSO PERUSED THE ORDERS OF THE LD ASSESSING OFFICER AND LD CIT(A). WE HAVE ALSO METICULOUSLY READ THE ORDERS OF THE HON'BLE HI GH COURT AND HON'BLE SUPREME COURT FOR FOLLOWING GUIDANCE PROVIDED BY TH EM TO DECIDE THE APPEAL. APPARENTLY IN THIS CASE SEARCH U/S 132 OF T HE ACT WAS CARRIED OUT IN THE RESIDENTIAL PREMISES V-38, PANCHSHEEL, N EW DELHI OF SHRI V.K. NARANG WHO IS ONE OF THE PARTNER OF THE ASSESSEE. T HEREFORE, THE LD ASSESSING OFFICER ISSUED NOTICE U/S 158BC OF THE AC T TO APPELLANT TO SUBMIT ITS RETURN OF INCOME FOR THE BLOCK PERIOD 01 .04.1989 TO 17.12.1999 I.E. DATE OF THE SEARCH. THE ASSESSMENT WAS MADE BY THE LD ASSESSING OFFICER MAKING THE ADDITION ON ACCOUNT OF PROFIT EARNED ON SOME OF THE PROPERTIES AND PASSED ASSESSMENT ORDER ON 31.12.2001 COMPUTING THE UNDISCLOSED INCOME AT RS. 36937587/-. ON APPEAL BEFORE THE LD CIT(A) THE ADDITION WAS RESTRICTED AT RS. 26 787137/- ON PEAK BASIS. THE MATTER WAS CARRIED BY THE ASSESSEE AND R EVENUE BEFORE THE COORDINATE BENCH, WHO VIDE ORDER DATED 02.03.2007 D ISMISSED THE APPEAL OF THE REVENUE AND DELETED THE ENTIRE ADDITI ON HOLDING THAT THE ADDITION MADE BY THE LD ASSESSING OFFICER IS NOT SU STAINABLE IN LAW. THE 29 ITA NO. 525 & 548/DEL/2003 REVENUE AGGRIEVED WITH THE ORDER OF THE COORDINATE BENCH PREFERRED APPEAL BEFORE THE HON'BLE DELHI HIGH COURT WHEREIN THE ORDER OF THE COORDINATE BENCH WAS VACATED AND WHOLE ISSUE WAS SE T ASIDE TO THE FILE OF THE LD ASSESSING OFFICER TO MAKE A FRESH ASSESSM ENT IN ACCORDANCE WITH THE LAW. THE ASSESSEE CHALLENGED THE ORDER OF THE HON'BLE HIGH COURT BEFORE THE HON'BLE SUPREME COURT WHEREIN, THE HON'BLE COURT WAS PLEASED TO SET ASIDE THE ISSUE BEFORE THE COORDINAT E BENCH FOR FRESH HEARING AND CONSIDERATION. THE HON'BLE SUPREME COUR T ALSO MADE IT ABSOLUTELY CLEAR THAT IF AT THE TIME OF CONSIDERATI ON OF THE APPEAL, THE TRIBUNAL FEELS THAT THE MATTER NEEDS CROSS EXAMINAT ION OF CERTAIN WITNESS AND FURTHER EVIDENCE THEN THE MATTER MAY BE SENT BACK TO THE FILE OF THE LD ASSESSING OFFICER. IN THE BACKDROP O F ABOVE FACTS, THE ABOVE APPEALS NEED TO BE DECIDED. THE LD ASSESSING OFFICE R HAS MADE THE ADDITION TO THE TOTAL INCOME OF THE ASSESSEE WITH R ESPECT TO THE FOUR PROPERTIES. THESE PROPERTIES AND THE RELEVANT TRANS ACTIONS CONTAINED IN THE SEIZED PAPER ARE EXPLAINED AS UNDER:- (I) IN RESPECT OF PROPERTY NO. J-12, SAKET, N. DELH I IT WAS FOUND BY THE AO FROM THE DOCUMENTS SEIZED DURING THE SEARCH THAT THERE WAS UNDISCLOSED NET PROFIT OF RS. 40,21,600 WHICH W AS HELD AS UNDISCLOSED INCOME OF RELEVANT AND RS. 42.48,000 WAS HELD AS UNDISCLOSED INVESTMENT IN THE SAID PROPERTY BY THE APPELLANT CO. THE INFERENCE WAS DRAWN BY THE AO ON THE BASIS OF DOCUMENTS WHICH HAVE BEEN REFERRED IN ANNEXURE A -1 PAGE 21 AND 29 & WHICH HAVE ALSO BEEN MENTIONED IN ANNEX URE TO THE ASSESSMENT ORDER. THEREBY, ADDITION OF RS. 8269 600/- FOR THIS PROPOSAL. (II) PROPERTY NO. C-40, ANAND NIKETAN, NEW DELHI IT WAS OBSERVED BY THE AO THAT AN AGREEMENT WAS EXECUTED BETWEEN TH E APPELLANT WITH THE OWNER OF THE PROPERTY WHEREIN TH E OWNER WAS TO GET RS. 70 LACS AND FIRST FLOOR OF CONSTRUCT ED PROPERTY IN THE A.Y. 96-97. THE TOTAL COST WAS RS. 1,43,42,000/ - AND OUT OF THE PROFIT DERIVED, 10% SUPERVISION CHARGES AT R S. 14,87,100/- WAS TAXED AS UNDISCLOSED INCOME OF SH. VIRENDER NARANG AND THE TOTAL UNDISCLOSED PROFIT OF RS. 1,33 ,74,900/- WAS HELD BY THE AO AS UNDISCLOSED INCOME OUT OF WHICH RS. 48,39,000/- WAS HELD AS UNDISCLOSED INVESTMENT OF THE APPELLANT FIRM. THEREBY ADDITION OF RS. 18213900/- WAS MADE. (III) PROPERTY NO. X-14, HAUZ KHAS, N. DELHI IS CO NCERNED; IT WAS NOTICED BY THE AO THAT THIS PROPERTY WAS PURCHASED BY SH. VIRENDER NARANG IN FOUR NAMES JOINTLY WITH HIM, WIF E NEERA NARANG, M/S SONAL CONSTRUCTIONS, SH. S.S.SODHI (I.E . 25% SHARE EACH) IN THE A.Y. 97-98 FOR A DECLARED CONSID ERATION OF RS. 32 LACS FROM SH. R.L. SACHDEV, R/O REGENCY COUR T, SOI-20, SIKHMIT ROAD, BANGKOK. THE TOTAL COST WORKED OUT TO RS. 2,52,04,518/, THE AO AFTER CONSIDERING ALL THE MATE RIAL, EVIDENCES AVAILABLE IN THE SEIZED DOCUMENTS AND CON SIDERING 30 ITA NO. 525 & 548/DEL/2003 TIRE REGULAR' BOOKS OF ACCOUNTS TO BE THE VALUE OF THE PROPERTY AT RS. 1,92,69,942/- AND CALCULATED THE APPELLANTS SHARE ON THE UNDISCLOSED INVESTMENT IN THE PROPERTY NO. X-14, HAUZ KHAS AT RS. 43,35,737/. (IV) IN RESPECT OF PROPERTY NO. D-16. PAMPOSH ENCLA VE. N. DELHI, THE AO NOTED THAT THE PROPERTY WAS PURCHASED BY THE APP ELLANT AND DEVELOPED INTO A THREE STOREYED HOUSE IN THE A. Y. 97-98. THE AO ALTER CONSIDERING THE SEIZED DOCUMENTS AND O N THE BASIS OF MATERIAL AVAILABLE ON RECORD, COMPUTED THE UNDISCLOSED INCOME AND UNDISCLOSED PROFIT IN RESPECT OF THE APPELLANT AT RS. 61,08,350/- 17. THEREFORE, IT IS APPARENT THAT LD AO BASED ON H IS READING OF LOOSE PAPERS HAS FIXED UNDISCLOSED INCOME AS WELL AS UNDI SCLOSED INVESTMENT BOTH WITH RESPECT TO THESE PROPOSALS. 18. NOW WE COME TO THE DECISION OF THE HON'BLE HIGH COURT WITH RESPECT TO SEVERAL OBSERVATIONS MADE THEREIN. I. THE PRESUMPTION U/S 292C OF THE ACT PERMITS THE LD AO TO INVOKE THE PRESUMPTION THAT THE SEIZED DOCUMENTS BE LONG TO THE ASSESSEE AND THE CONTENTS OF THESE DOCUMENTS AR E TRUE. THEREFORE, NOW THE ASSESSEE CANNOT SAY THAT THE DOC UMENTS ARE MERELY SCRIBBLES AND CANNOT BE USED TO DETERMIN E THE INCOME OF THE ASSESSEE. II. THAT THE CORRELATION BETWEEN THE SEIZED MATERIAL AN D THE BOOKS OF ACCOUNTS WAS SUFFICIENT FOR THE PURPOSE OF MAKING ADDITION. III. REGARDING DENIAL BY MR. NARANG OR NON EXAMINATION O F THE PARTNER BY THE ASSESSING OFFICER AT THE TIME OF THE ASSESSMENT IT CANNOT BE STATED THAT NO RELIANCE CAN BE PLACED ON THEM FOR THE PURPOSE OF MAKING ADDITION. IV. THE CORROBORATION OF THE MATERIAL FOUND IS NOT AN I NVIOLABLE RULE. MANY A TIMES CORROBORATION IS DIFFICULT TO OB TAIN. IT IS FURTHER STATED THAT IF THE CALCULATION AND THE COMP UTATION HAVE BEEN MADE IN SUCH A MANNER THEN ITS PROBATIVE VALUE AND GENUINENESS CANNOT BE DOUBTED, THE AO MAKE AN ADDIT ION ON THE BASIS OF SUCH DOCUMENTS IN ABSENCE OF CORROBORA TION. V. THE DOCUMENTS FOUND DURING THE COURSE OF SEARCH CAN NOT BE DISCOUNTED FOR THE FLIMSY REASONS. TO REBUT SUCH DO CUMENTS, STRONG EVIDENCE IN REBUTTAL ARE REQUIRED. VI. THE MERE PROCEDURAL REQUIREMENT DOES NOT INVALIDATE OR GIVE POWER TO DELETE THE ADDITION BUT THE PROPER COURSE WOULD BE TO REMAND THE MATTER TO CORRECT THE ERRORS PROVIDED TH ERE ARE NO LAPSES OF JURISDICTION. VII. THE TRIBUNAL IS NOT EXPECTED TO PUT ON BLINKERS WHI LE EXAMINING THE EVIDENCE, WHENEVER NECESSARY, IT SHOULD SCRATCH THE SURFACE PROBE DIPPER AND DRAW THE APPROPRIATE INFER ENCE WHICH ACCORD WITH NORMAL COURSE OF HUMAN CONDUCT AN D PROBABILITIES. 31 ITA NO. 525 & 548/DEL/2003 VIII. THE NON EXAMINATION OF MR. SODHI OR MR. NARANG DURI NG ASSESSMENT PROCEEDINGS OR LACK OF OPPORTUNITY TO MR . NARANG TO CROSS EXAMINE MR. SODHI ARE ALL PROCEDURAL IRREG ULARITIES WHICH CAN BE CURED BY REMITTING THE MATTER TO THE A O WHICH STEP THE COORDINATE BENCH OUGHT TO HAVE TAKEN. THE DOCUMENT SEIZED FROM THE PLACE OF MR. NARANG IS A VITAL PIEC E OF EVIDENCE AGAINST THE ASSESSEE FIRM. 19. HONORABLE HIGH COURT IN PARA NO 11 HAS HELD WHERE THE COORDINATE BENCH HAS FAULTED. WE HAVE CAREFULLY ANA LYZED THE WHOLE ISSUE AGAIN IN VIEW OF THE ABOVE DIRECTION OF THE HON'BLE SUPREME COURT AND HIGH COURT. 20. COMING TO THE DOCUMENTS SEIZED WE FOUND THAT RU PEE WISE ANALYSIS GIVEN IN THOSE PAPERS AND ANALYZED BY THE LD AO CLE ARLY SHOWS THAT THOSE DOCUMENTS ARE NOT DUMB DOCUMENTS AND EVEN WIT HOUT CORROBORATION THEY CAN BE USED TO DETERMINE THE UND ISCLOSED INCOME OF THE ASSESSEE. WE HAVE GIVEN THE DETAILED ANALYSI S OF EACH PROPERTY IN EARLIER PART OF THIS ORDER. 21. NOW COMING TO THE SPECIFIC ARGUMENT OF THE LD A UTHORISED REPRESENTATIVE THAT THE LD AO HAS NOT EXAMINED THE PERSON SUCH AS MR. NARAG AND MR. SODHI DURING THE COURSE OF ASSESS MENT PROCEEDINGS. FURTHER, IT IS THE CLAIM OF THE LD AR THAT MR. NARANG IS NOT GIVEN AN OPPORTUNITY TO CROSS EXAMINE MR. S.S. SODHI. WE HAVE CAREFULLY PERUSED THE STATEMENT RECORDED OF SHRI VI RENDRA NARANG ON 17.12.1999. WITH RESPECT TO THE SEIZED PAPERS HE WAS ASKED THE SPECIFIC QUESTION VIDE Q NO. 19 WHEREIN, THE DETAIL S OF FIVE PROPERTIES WERE GIVEN AND THE ACCOUNT OF MR. SODHI WAS MENTION ED. SHRI NARANG REPLIED THAT HE IS NOT ABLE TO GIVE REPLY OF THIS QUESTION PRESENTLY. WITH RESPECT TO Q NO. 20 THE OTHER PAPER TO THAT ANNEXURE TO PAGE NO. 28 WAS ALSO SHOWN TO WHICH HE EXPRESSED HIS INABILITY TO EXPLAIN; TO OTHER LOOSE PAPER ALSO VIDE Q NO. 21 AND 22 HIS REPLY WAS SIMILAR. THEREFORE, DESPITE ADEQUATE OPPORTUNIT Y AVAILABLE TO MR. NARANG HE DID NOT EXPLAIN ANYTHING ABOUT THOSE PAPERS. ONLY WITH RESPECT TO Q NO. 22 SOME SMALL NOTE BOOK PREPA RED ON MONTHLY BASIS WERE SHOWN TO HIM AND ONLY FOR THAT DOCUMENT HE STATED THAT HE WILL EXPLAIN THE DETAILS OF SUCH TRANSACTION LAT ER ON. WE ARE NOT CONCERNED WITH THAT PAPER IN THIS APPEAL. DURING TH E COURSE OF ASSESSMENT PROCEEDINGS AND EVEN THE APPELLATE PROCE EDINGS AND FURTHER, EVEN BEFORE US THE ASSESSEE DID NOT MAKE A NY ATTEMPT TO EXPLAIN THOSE PAPERS. COMING TO THE STATEMENT OF MR . SODHI RECORDED ON 31.08.2000 DURING THE COURSE OF ASSESSM ENT HE HAS SPECIFICALLY IN ANSWER TO Q NO. 8 STATED THAT THESE DOCUMENTS BELONG TO THE FIRM. MR. SODHI HAS STATED IN ANS TO SO MANY QUESTION THAT HE IS JUST A SLEEPING PARTNER AND HE DOES NOT KNOW ANYTHING ABOUT THE PROFITS EARNED BY THE FIRM. HE FURTHER ST ATED THAT HE WAS MEDICALLY NOT FIT. HE ALSO DENIED KNOWING MR. RK DH AWAN WHOSE NAME WAS MENTIONED IN THOSE PAPERS. THEREFORE, ON W HOLESOME READING OF THE STATEMENT OF MR. SODHI NO EXPLANATIO N WITH RESPECT TO 32 ITA NO. 525 & 548/DEL/2003 THE SEIZED DOCUMENTS WAS FORTHCOMING. THEREFORE, IT IS APPARENT THAT BOTH THE PARTNERS OF THE ASSESSEE FIRM DID NOT MAKE ANY ATTEMPT TO EXPLAIN THOSE PAPERS FOUND FROM THE RESI DENCE OF MR. NARANG. IN VIEW OF THIS WE DO NOT FIND ANY INFIRMIT Y IN THE ORDER OF THE LD ASSESSING OFFICER INFERRING THAT THOSE DOCUM ENTS SHOW THE UNDISCLOSED INCOME OF THE ASSESSEE. 22. FURTHER, THE CLAIM OF THE LD AR THAT ALL THESE PROPERTIES ARE PROPERLY DISCLOSED IN THE BOOKS OF ACCOUNTS AND THE LD ASSES SING OFFICER HAS NOT EXAMINED THE PERSONS WHO HAVE PURCHASED FROM OR SOLD TO THESE PROPERTIES. THESE ARGUMENTS DESERVES TO BE REJECTED AT THE THRESHOLD ITSELF FOR THE SIMPLE REASON THAT THE DOC UMENT SHOWS THAT THE SALE, PURCHASE PRICE AND THE CONSTRUCTION EXPEN DITURE SHOWN IN THE BOOKS OF ACCOUNT ARE FAR LESS THAN THE AMOUNT S HOWN IN A METHODICAL MANNER IN THE SEIZED DOCUMENTS. FURTHER, NO FRUITFUL PURPOSE WOULD HAVE BEEN SERVED BY CALLING INFORMATI ON OR EXAMINING THOSE PERSONS, WHO HAVE EITHER PAID OR RE CEIVED UNACCOUNTED MONEY WITH RESPECT TO THE TRANSACTION O F THESE PROPERTIES. NATURALLY, THOSE PARTIES WOULD HAVE CON FIRMED ONLY THE TRANSACTIONS ENTERED INTO IN THEIR BOOKS OF ACCOUNT S. IN FACT, IT SHOULD HAVE BEEN THE ASSESSEE WHO SHOULD HAVE PRODU CED THEM BEFORE THE LD ASSESSING OFFICER TO SHOW THAT THERE IS NO UNACCOUNTED TRANSACTIONS WITH THOSE PERSONS. THE ASSESSEE COULD HAVE PRODUCED SUCH AN ACTION OF THE ASSESSEE WITH OTHER STRONG EV IDENCES REBUTTING THE SEIZED PAPER. THEREFORE, NO FAULT OR IRREGULARITY CAN BE SAID TO HAVE BEEN COMMITTED BY THE ASSESSING OFFICE R BY NOT CALLING THE PURCHASER OR SELLER OR EXAMINING THEM. WHAT IS TO BE DONE BY THE ASSESSEE TO PROVE ITS CASE, THE LD AO CANNOT BE ASK ED TO DO SO. 23. NOW COMING TO THE STRONG OBJECTION OF THE REVEN UE AGAINST THE SETTING ASIDE THE ORDER BACK TO THE FILE OF THE LD ASSESSING OFFICER WE ARE GUIDED BY PARA NO. 21 OF THE ORDER OF THE HON'B LE HIGH COURT AS WELL AS PARA NO. 4 OF THE HON'BLE SUPREME COURT. TH E HON'BLE SUPREME COURT HAS HELD THAT ONLY IF THE MATTER NEE DS CROSS EXAMINATION OF CERTAIN WITNESSES OR FURTHER EVIDENC ES ARE REQUIRED, THAN ONLY TRIBUNAL IS ALLOWED TO SET ASIDE THE MATT ER BACK TO THE LD ASSESSING OFFICER. THEREFORE, IT IS OUR BOUNDEN DUT Y TO SEE WHETHER THERE IS ANY NEED FOR CROSS EXAMINATION OF CERTAIN WITNESSES OR FURNISHING OF FURTHER EVIDENCE. HON'BLE HIGH COUR T HAS HELD THAT IN VIEW OF THE PROVISION OF SECTION 292C OF THE ACT ST RONG EVIDENCE ARE REQUIRED TO REBUT THE INFORMATION CONTAINED IN THOS E DOCUMENTS. THE APPELLANT FIRM AND ITS PARTNERS MR. V.K. NARANG AND MR S.S. SODHI CAN PLACE THAT STRONG EVIDENCE IN REBUTTAL. BOTH OF THEM, INITIALLY, MR NARANG DURING THE SEARCH AND LATER ON MR. SODH I DURING THE ASSESSMENT PROCEEDINGS HAVE NOT GIVEN ANY EXPLANAT ION TO THE INCOME TAX AUTHORITIES. IN FACT LOOKING TO THEIR ST ATEMENTS, IT IS APPARENT THAT THEY HAVE TRIED TO DODGE THE INCOME T AX AUTHORITIES AND AVOIDED IN SUBMITTING ANYTHING ON THOSE PAPERS. NEITHER BEFORE THE LD AO NOR BEFORE THE LD CIT (A) THOSE PERSONS A PPEARED AND SUBMITTED THEIR VERSION OF THOSE PAPERS. IT SEEMS T HAT THEY WERE 33 ITA NO. 525 & 548/DEL/2003 UNDER THE IMPRESSION THAT PRESUMPTION U/S 132 (4) O F THE ACT DOES NOT EXTEND TO THE ASSESSMENT PROCEEDINGS AND TH EREFORE HEAVY BURDEN LIED AT THAT TIME ON REVENUE TO PROVE THE CO NTENTS OF THE PAPER. ACCORDING TO PROVISIONS OF SUB-SECTION (4 A) OF SECTION 132, IT PROVIDES THAT THE BOOKS OF ACCOUNT, MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING FOUND IN THE POSSES SION OR CONTROL OF ANY PERSON IN THE COURSE OF A SEARCH UNDER SECTION 132 WILL BE PRESUMED TO BELONG TO THE SAID PERSON. IT IS FURTHE R PROVIDED THAT IT WILL BE PRESUMED THAT THE CONTENTS OF SUCH BOOKS OF ACCOUNT AND OTHER DOCUMENTS ARE TRUE; AND THAT THE SIGNATURE AN D EVERY OTHER PART OF SUCH BOOKS OF ACCOUNT AND OTHER DOCUMENTS W HICH PURPORT TO BE IN HANDWRITING OF ANY PARTICULAR PERSON OR WHICH MAY REASONABLY BE ASSUMED TO HAVE BEEN SIGNED BY, OR TO BE IN THE HANDWRITING OF, ANY PARTICULAR PERSON, ARE IN THAT PERSON'S HANDWRITING, AND IN THE CASE OF A DOCUMENT STAMPED, EXECUTED OR ATTESTED, THAT IT WAS DULY STAMPED AND EXECUTED OR ATTESTED BY THE PERSON BY WHOM IT PURPORTS TO HAVE BEEN SO EXECUTED OR ATTESTED. BY THE FINANCE ACT 2007 WITH RETROSPECTIVE EFFECT F ROM 1/10/1975, A NEW SECTION 292C WAS INSERTED TO CLARIFY THOSE PRES UMPTIONS PROVIDED IN SUB-SECTION (4A) OF SECTION 132 CAN BE MADE IN ANY PROCEEDINGS UNDER THIS ACT. SECTION 292C OF THE IN COME-TAX ACT PROVIDES FOR A REBUTTABLE PRESUMPTION WITH RESPECT TO BOOKS OF ACCOUNT, OTHER DOCUMENTS, MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING FOUND IN THE POSSESSION O R CONTROL OF ANY PERSON IN THE COURSE OF A SEARCH UNDER SECTION 132 AS STATED IN CIRCULAR NO. 1/2009 DATED 27/3/2009. THEREFORE, ON THE CONJOINT READING OF ALL THE AMENDMENTS MADE IN THIS SECTIO N IT IS OBVIOUS THAT SUCH PRESUMPTION PROVIDED U/S 292 C OF THE ACT IS REBUTTABLE. THEREFORE, IT IS APPARENT THAT SUCH AN OPPORTUNIT Y OF REBUTTAL WAS NOT AVAILABLE TO THE APPELLANT. SUCH FURTHER EVID ENCES NEEDS TO BE LEAD BY THE ASSESSEE TO REBUT THE PRESUMPTION AVAIL ABLE WITH THE LD AO FOR MAKING ASSESSMENT ON THE BASIS OF THE SEIZED PAPERS. HIGHER BURDEN NOW LIES ON THE ASSESSEE BY PRODUCING THE EVIDENCES. THE ONLY ROLE OF THE AO LEFT IS TO APPRE CIATE THOSE EVIDENCES, EXAMINE THEM AND PASS THE FRESH ASSESSME NT. 24. REPEATEDLY THE LD AR HAS HARPED UP ON GRANTIN G AN OPPORTUNITY TO CROSS EXAMINE MR S.S. SODHI TO THE APPELLANT. IT IS REQUIRED TO BE APPRECIATED THAT MR S.S. SODHI IS ONE OF THE PARTNE R OF THE APPELLANT FIRM, HE HAS ALSO DEALT WITH IN ALL SUCH PROPERTIES , THE SEIZED DOCUMENTS FOUND ALSO SHOWS THE DETAILS OF HIS PROF IT SHARING, IN HIS STATEMENT HE HAS NOT DENIED RECEIVING SUCH PROFITS , THEREFORE NOW THE REQUEST OF THE ASSESSEE TO ASK ITS OWN PARTNER TO BE CROSS EXAMINED BY THE APPELLANT IS MERELY AN ATTEMPT BY T HE ASSESSEE TO SCUTTLE THE VARIOUS ISSUES. AS MR. S.S. SODHI IS TH E PARTNER OF THE APPELLANT FIRM, IT IS THE DUTY OF THE APPELLANT FIR M TO PRODUCE MR S S SODHI AND MR V.K. NARANG BEFORE THE LD AO TO GIVE ANY EVIDENCES IN REBUTTING THE DOCUMENTS SEIZED. HENCE, WE DO NO T FIND ANY REASON TO DIRECT THE LD AO TO GRANT OPPORTUNITY TO APPELLANT TO CROSS EXAMINE MR. S. S. SODHI. WE HAVE ON PERUSAL OF STAT EMENT OF SHRI S. 34 ITA NO. 525 & 548/DEL/2003 S. SODHI ARE ALSO NOT CONVINCED THAT HE HAS STATED SOMETHING WHICH IS INCRIMINATING AGAINST THE ASSESSEE. FURTHER, THE LD AO HAS NOT USED STATEMENT OF MR. S.S. SODHI FOR MAKING ADDITIO N OF UNDISCLOSED INCOME BUT SEIZED PAPERS FOUND FROM SHRI V.K. NARAN G. 25. ONE OF THE ARGUMENTS OF THE LD AR IS THAT PROVI SIONS OF SECTION 292C DOES NOT EXTEND TO CHARGEABILITY OF INCOME. WE AGRE E WITH ABOVE VIEW BUT WE ALSO HURRIEDLY ADD THAT WHEN THE DOCUME NTS ARE SO EMPHATIC THAT THEY SPEAK LOUDER THAN THE REAL BOOKS OF ACCOUNTS, THE ONUS IS ON THE ASSESSEE TO SHOW THAT THEY DO NO T SHOW THE UNDISCLOSED INCOME EARNED BY THE ASSESSEE. IT IS AL WAYS THE MATTER OF FACTS THAT WHETHER THE DOCUMENT SHOWS THE INCOME OR NOT. IT DEPENDS ON THE NATURE OF DOCUMENT AND WHAT IT DESCR IBES. THERE IS NO UNIVERSALLY APPLICABLE LAW EVEN PRONOUNCED THAT WHAT ARE THE DUMB DOCUMENTS AND WHAT ARE NOT. IN THE PRESENT CAS E, ON THE DOCUMENTS, HON'BLE HIGH COURT HAS SAID IN SO MANY W ORDS THAT THESE DOCUMENTS PRIMA FACIE SHOWS THE INCOME EARNED BY THE ASSESSEE. 26. FURTHER, THE LD AR HAS RELIED ON SEVERAL DECISI ONS COVERED IN THE PAPER BOOK. WE HAVE ALSO CONSIDERED ALL OF THEM FOR DECIDING THE APPEAL, HOWEVER, WHEN IN THE CASE OF THE APPELLANT THE MATTER HAS REACHED UP TO HON'BLE SUPREME COURT , WE DO NOT FIN D ANY REASON TO DEVIATE FROM THE GUIDANCE PROVIDED BY THE HON'BLE S UPREME COURT AND HON'BLE DELHI HIGH COURT IN ASSESSEES OWN CASE ON THE SAME FACTS. 27. WITH RESPECT TO THE APPEAL OF THE REVENUE THAT THE LD CIT(A) HAS ALLOWED THE ASSESSEE BENEFIT OF PEAK INVESTMENT, WE FIND NO INFIRMITY IN THAT. AS STATED EARLIER THE ASSESSEE H AS EARNED UNDISCLOSED INCOME IN BLOCK PERIOD AND HAS ALSO MAD E UNDISCLOSED INVESTMENT IN THOSE PROPERTIES, THEREFORE, NATURALL Y THE ASSESSEE WAS HAVING UNDISCLOSED INCOME WHICH COULD HAVE BEEN INVESTED IN THOSE UNDISCLOSED INVESTMENT MADE BY THE FIRM. REVE NUE COULD NOT SHOW US ANY EVIDENCE FOUND DURING THE COURSE OF HEA RING THAT UNDISCLOSED INCOME EARNED BY THE ASSESSEE IS INVEST ED SOMEWHERE ELSE. FURTHER, WE HAVE ALSO ANALYZED THE WORKING GI VEN BY THE LD CIT (A) IN HIS ORDER WHERE THE PEAK INVESTMENT IS W ORKED OUT. WE HAVE OUR RESERVATION ABOUT THE WORKING OF THE PEAK INVESTMENTS. IN FACT, THE AMOUNT OF INCOME I.E. EARNED BY THE ASSES SEE CAN BE USED FOR APPLICATION FOR MAKING INVESTMENT. THEREFORE, I F THE ASSESSEE HAS MADE UNDISCLOSED PROFIT IN EARLIER YEARS THEN NATUR ALLY THE ASSESSEE WOULD BE ENTITLED TO SET OFF OF THE SALE WHILE WORK ING OUT UNDISCLOSED INVESTMENT IN SUBSEQUENT YEARS. THE DE CISIONS RELIED UPON BY THE LD CIT DR DOES NOT APPLY TO THE FACTS O F THE CASE BECAUSE THE HON'BLE DELHI HIGH COURT WAS CONCERNED WITH A CASE OF THE ENTRY OPERATOR WHO COULD NOT EXPLAIN THAT WHO H AS GIVEN HIM THE CASE WHICH WERE DEPOSITED IN THE BANK ACCOUNT. SUCH ARE NOT THE FACTS HERE. IN THE CASE BEFORE US THERE ARE CLEAR C UT DETAILS AVAILABLE THAT HERE THERE ARE KNOWN UNDISCLOSED INCOME WHICH CAN BE UTILIZED FOR THE PURPOSES OF SUBSEQUENT PURCHASE OF PROPERTI ES. HENCE, THE 35 ITA NO. 525 & 548/DEL/2003 RELIANCE PLACED UPON CIT VS. D.K. GARG (SUPRA) CANN OT BE USED TO DENY THE BENEFIT OF PEAK CREDIT TO THE ASSESSEE. FU RTHER, RELIANCE PLACED ON 34 TAXMANN.COM 5 IS ALSO PERTAINING TO TH E CASH DEPOSIT. IN THAT CASE TOO THERE WERE CASH DEPOSITS AND CASH WITHDRAWALS AND THE EXPLANATION OF THE ASSESSEE WAS FOUND TO BE VAGUE AND UNSUBSTANTIATED. THE ASSESSEE ALSO COULD NOT EXPLAI N THE QUANTUM OF THE CASH DEPOSIT WITH RESPECT TO THE PATTERN OF WITHDRAWAL. SAME IS ALSO DISTINGUISHABLE ON THE FACTS. IN THE PRESEN T CASE ASSESSEE HAS EARNED UNDISCLOSED PROFIT IN AY 1994-95 OF RS. 4021600/- WHICH HAS BEEN GRANTED AS SET OFF BY THE LD CIT(A) FOR AY 1996-97. HOWEVER, LOOKING AT THE WHOLE STATEMENT PREPARED BY HIM AT PARA NO. 9.6 IT IS APPARENT THAT UNDISCLOSED PROFIT EARN ED BY THE ASSESSEE FOR AY 1997-98 REMAINED UNTAXED BY ADOPTIN G THE METHOD EMPLOYED BY THE LD CIT(A). BECAUSE IF THE PEAK IS T AXED WHICH IS THE PEAK BALANCE FOR AY 1997-98 BUT THE INCOME EARNED O F UNDISCLOSED PROFIT FOR AY 1997-98 CAN NO CASE BE SET OFF AGAINS T THIS PEAK. THEREFORE, THE PEAK WORKED BY THE LD CIT(A) FOR AY 1997-98 OF RS. 26787137/- IS FURTHER REQUIRED TO BE INCREASED BY R S. 11.51 LAKHS, HENCE, THE PEAK WOULD BE RS. 27938137/-. IN ANY CAS E WE FIND ERROR IN THE COMPUTATION MADE BY THE LD CIT(A) TO T HAT EXTENT. IN VIEW OF THIS WE DO NOT FIND ANY REASON TO INTERFERE IN THE FINDING OF THE LD CIT(A) IN GRANTING BENEFIT OF SET OFF OF UND ISCLOSED INCOME FOR UTILIZING IN UNDISCLOSED INVESTMENT EXCEPT TO THE E XTENT OF THE COMPUTATION ERROR. 28. IN VIEW OF THE ABOVE FINDINGS, WE SET ASIDE BOT H THE APPEALS FOR BLOCK PERIOD BACK TO THE FILE OF THE LD AO WITH A D IRECTION TO THE ASSESSEE TO REBUT THE EVIDENCE FOUND DURING THE COU RSE OF SEARCH BY EXPLAINING THE CONTENTS OF THOSE PAPERS WITH STRONG , COGENT AND RELIABLE EVIDENCES. ASSESSEE MAY PRODUCE MR. V.K. N ARANG AND M.R S. S. SODHI BEFORE THE LD AO TO GIVE REBUTTAL ABOUT THE SEIZED DOCUMENTS. THE LD AO MAY EXAMINE THEM, IF PRODUCED BY ASSESSEE, AND ALSO APPRECIATE OTHER EVIDENCE SO PRODUCED BEFO RE HIM, AND DECIDE THE ISSUE AFRESH. THE LD AO MAY ALSO MAKE AN Y ENQUIRY HE DEEMS FIT BEFORE DECIDING THE ISSUE. 13 ON SIMILAR GROUNDS WE HAVE ALREADY SET ASIDE THE A PPEAL OF THE REVENUE AS WELL AS MRS NEERA NARAG, WIFE OF THE ASS ESSEE BACK TO THE FILE OF THE LD AO TO DECIDE THE ISSUE AFRESH. 14 AS THE PROPERTIES ARE OWNED BY THE ASSESSEE ALONG WITH THE PROPERTIES OF M/S SONAL CONSTRUCTION AND HIS WIFE WHOSE APPEAL S ARE SET ASIDE BY US BACK TO THE FILE OF THE ASSESSING OFFICER WIT H SPECIFIC DIRECTION TO THE ASSESSEE TO PRODUCE THE PARTIES BEFORE THE ASSE SSING OFFICER FOR HIS EXAMINATION INCLUDING MR. S. S. SODHI. BURDEN WOUL D NOT BE ON THE ASSESSING OFFICER TO FIND THESE PARTIES AND TO SEA RCH A CORROBORATIVE 36 ITA NO. 525 & 548/DEL/2003 MATERIAL IN THE WHOLE WORLD. IT WOULD BE THE DUTY OF THE ASSESSEE TO REBUT THE PRESUMPTIONS CONTAINED U/S 292C OF THE AC T. FURTHER, THE ASSESSING OFFICER IS ALSO DIRECTED TO EXAMINE THE S OURCE PAYMENT OF RS. 1.04 CRORES MADE BY THE ASSESSEE, FOR WHICH THE EXPLANATION OF THE ASSESSEE IS THAT THE DEAL IS CANCELLED. THEREFORE, WITH SIMILAR DIRECTIONS, WE ALSO SET ASIDE THE WHOLE ADDITION OF RS. 20.51 CRORES BACK TO THE FILE OF THE ASSESSING OFFICER WITH SIM ILAR DIRECTION TO THE ASSESSEE AS IT IS GIVEN IN THE OTHER CASES OF M/S S ONAL CONSTRUCTION AND NEERA NARANG. THE ASSESSING OFFICER HAS TO EXA MINE THE PARTIES IF PRODUCED BY THE ASSESSEE. THE ASSESSING OFFICER MA Y ALSO CONSIDER THE EXPLANATION OF THE ASSESSEE AFTER GIVING PROPER OPP ORTUNITY OF HEARING. 15 IN VIEW OF THIS, THE APPEAL OF THE ASSESSEE AND REV ENUE ARE ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD JULY, 2018 . SD/- SD/- (SUCHITRA KAMBLE) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 23/07/2018 R.N* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 37 ITA NO. 525 & 548/DEL/2003 DATE OF DICTATION 29.05.2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 29.05.2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 24.07.2018 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 2 4 .07.2018 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 24. 07.2018 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER 38 ITA NO. 525 & 548/DEL/2003