The ITO, Ward-2(2), Surat V. Shri Laxminarayan Soni, Surat

ITSSA 565/AHD/2010

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 9268 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 23 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 14-06-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 05-06-2013
• Assessment Year: misc
• Appeal Filed On: 21-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T SANKAR
• Keywords: Search and seizure; Corroborative evidences; Block assessment; Retraction
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER IT(SS)A NO. 565/AHD/2010 ITO, WARD-2(2), SURAT. VS SHRI LAXMINARAYAN SONI, 49- RSHAMWALA MARKET RING ROAD, SURAT PAN: ADIPS 9838D (APPELLANT) (RESPONDENT) REVENUE BY : SHRI T. SANKAR, SR.D.R. ASSESSEE(S) BY : SHRI MEHUL SHAH, AR / // / DATE OF HEARING : 05/06/2013 / DATE OF PRONOUNCEMENT: 14/06/2013 / O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE ARISING FROM THE ORDER OF LEARNED CIT(A)-II, SURAT, DATED 22.03.2010. THE REV ENUE HAS RAISED A SUBSTANTIVE GROUND AS FOLLOWS: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF UNDISCLOSED I NCOME OF RS.37,00,000/. 2. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED UNDER SECTION 158BC OF THE I.T. ACT, D ATED 09.03.2001 WERE THAT A SEARCH UNDER SECTION 132 OF THE I.T. AC T WAS CARRIED OUT ON 21.12.1999 AT THE BUSINESS PREMISES OF M/S. VRIN DAVAN DEVELOPERS. THE SAID DEVELOPER IS STATED TO BE ENGA GED IN THE BUSINESS OF CONSTRUCTION OF A RESIDENTIAL COMPLEX ( VIZ.), DUMBHAL PROJECT. IT WAS NOTED THAT THE LAND FOR THE SAID PR OJECT WAS PURCHASED ITA NO.565/ AHD/2010 ITO, SURAT VS. SHRI LAXMINARAYAN SONI. - 2 - FROM THE ASSESSEE, I.E., SRI LAXMINARAYAN SONI. THE REUPON IN CONSEQUENCE OF THE SEARCH ACTION A STATEMENT ON OAT H OF THE ASSESSEE WAS RECORDED ON 19.1.2000. THE AO HAS NOTED THAT IN REPLY TO A QUESTION NO.10, THE ASSESSEE HAD ADMITTED UNDISCLO SED INCOME OF RS.24,00,000/-. THE SAID AMOUNT WAS ALLEGED TO HAVE BEEN RECEIVED AGAINST THE TRANSFER OF THE LAND BY THE ASSESSEE TO THE SAID DEVELOPER FOR THE PURPOSE OF DUMBHAL PROJECT. SINCE DURING TH E COURSE OF SEARCH AT THE DEVELOPERS PREMISES, IT WAS NOTED THAT CERTA IN PAYMENT WAS MADE TO THE ASSESSEE, THEREFORE, A NOTICE UNDER SEC TION 158BC WAS ISSUED TO THE ASSESSEE ON 1.3.2000. IN RESPONSE TO THE NOTICE, THE ASSESSEE HAD FILED THE RETURN OF UNDISCLOSED INCOME AT RS.NIL/-. IT HAS ALSO BEEN NOTED THAT A RETRACTION HAS BEEN MADE BY THE ASSESSEE ON 19 TH OF JANUARY, 2000. FACTS OF THE CASE AS RECORDED BY THE AO HAVE REVEALED THAT IN THE SAID STATEMENT THE ASSESSEE HA D ADMITTED THAT TOTAL LAND WAS AGREED TO BE SOLD FOR A CONSIDERATION OF R S.1,13,00,000/- TO THE SAID DEVELOPER M/S. VRINDAVAN DEVELOPERS. IT HA S ALSO BEEN NOTED THAT UP TILL THE DATE OF SEARCH THE POSSESSION OF O NLY 1/3 PORTION OF THE LAND WAS HANDED OVER TO THE SAID DEVELOPER. ON THE BASIS OF THE ADMISSION; 1/3 RD AMOUNT OF THE TOTAL CONSIDERATION WAS WORKED OUT A S UNDISCLOSED INCOME AT RS.37,00,000/-. AS AGAINST TH AT THE ASSESSEE HAD ADMITTED UNDISCLOSED INCOME OF RS.24,00,000/- O NLY, AS MENTIONED ABOVE. 2.1 DURING THE COURSE OF SEARCH A HAND WRITTEN DIAR Y OF ONE SRI NARENDRA GARG WAS DETECTED, WHEREIN THERE WAS A MEN TION OF PAYMENT OF RS.24,00,000/- ON DIFFERENT DATES MADE T O THE ASSESSEE. THE ASSESSEE HAS CONFIRMED THE AFORESAID AMOUNT REC EIVED IN CASH AS PER STATEMENT RECORDED UNDER SECTION 131(1A) OF THE IT ACT RECORDED ITA NO.565/ AHD/2010 ITO, SURAT VS. SHRI LAXMINARAYAN SONI. - 3 - ON 19 TH OF JANUARY, 2000. IN THE SAID STATEMENT IT WAS QUE STIONED THAT WHETHER THE SAID AMOUNT WAS REFLECTED IN THE REGULA R BOOKS OF ACCOUNT? THE ASSESSEE HAS INFORMED THAT THE SAID AM OUNT WAS NOT REFLECTED IN HIS PROPRIETY CONCERN, BUT THE MONEY R ECEIVED WAS SHOWN IN HIS PERSONAL BOOKS OF ACCOUNT. IT WAS ALSO INFOR MED THAT THE SAID AMOUNT WAS INVESTED IN A BANK AS FIXED DEPOSIT. IT WAS ALSO INFORMED THAT THE INTEREST RECEIVED FROM THE FD WAS SHOWN IN THE INCOME TAX RETURN. ON ACCOUNT OF THOSE FACTS, THE CONTENTION O F THE ASSESSEE WAS THAT THE IMPUGNED AMOUNT OF RS.24,00,000/- WAS NOT SHOWN IN THE BLOCK RETURN FILED BY HIM BECAUSE THE SAID SUM HA D ALREADY BEEN REFLECTED IN THE PERSONAL SET OF BOOKS OF ACCOUNTS. IT WAS VEHEMENTLY CONTESTED THAT SINCE THE AMOUNT WAS RECORDED IN THE PERSONAL SET OF ACCOUNTS, THEREFORE, THE SAME SHOULD NOT BE TREATED AS UNDISCLOSED INCOME FOR THE BLOCK PERIOD. 2.2 HOWEVER, THE AO WAS NOT CONVINCED AND HELD THAT THERE WERE SUFFICIENT EVIDENCES ABOUT WITH THE LAND FOR THE DU MBHAL PROJECT AGREED TO BE SOLD FOR A CONSIDERATION OF RS.1,13,00 ,000/- BY THE ASSESSEE AND IN LIEU IN FACT THE ASSESSEE HAD RECEI VED A CASH OF RS.24,00,000/- AT VARIOUS DATES AND THE NOTING IN R ESPECT OF THE SEIZED DI-ARY, MARKED AS ANNEXURE BS-3 PAGE 11 AS REPRODUC ED BELOW: 30-5 RS.1,13,00,000/- 15-6-1999 RS.7,00,000/ - 23-6.1999 RS.4,00,000/- 30-5-1999 RS.13,00,000/ - 3. BEFORE LEARNED CIT(A), THE MAIN CONTENTION OF TH E ASSESSEE WAS THAT MONEY WAS DEPOSITED IN THE BANK ON 18 TH OF JANUARY, 2000, HOWEVER, THE STATEMENT WAS RECORDED ON 19 TH OF JANUARY, 2000. ON THE OTHER HAND, THE PLEA F THE AO WAS THAT THE DEPOSIT IN THE BANK AND THE ENTRIES MADE IN THE PERSONAL SETS OF BOOKS OF ACCOU NTS WAS NOTHING ITA NO.565/ AHD/2010 ITO, SURAT VS. SHRI LAXMINARAYAN SONI. - 4 - BUT AN AFTERTHOUGHT. HOWEVER, LEARNED CIT(A) WAS OF THE VIEW THAT ALTHOUGH A STATEMENT WAS RECORDED BY DDIT, WHEREIN THE ASSESSEE HAD OFFERED RS.24,00,000/- BUT THAT STATEMENT WAS N OT CONCLUSIVE BEING DEVOID OF ANY CORROBORATIVE EVIDENCE. RATHER LEARNED CIT(A) HAS NARRATED FEW CASE LAWS AS LISTED BELOW: (I) PULLANGOD RUBBER PRODUCE CO. LTD VS. STATE OF KERALA & ANR (91 ITR 18). (II) KAILASHBEN MANHARLAL CHOKSI 174 TAXMAN 44 (GUJ.) (III) ASSISTANT COMMISSIONER OF INCOME-TAX VS. SUSHILADEV I AGARWAL, 49 TTJ 663(AHD). (IV) COMMISSIONER OF INCOME-TAX VS. BHUVANENDRAN AND OTHERS 303 ITR 235 (AHD). 3.1 LEARNED CIT(A) WAS OF THE VIEW THAT ONCE THE IM PUGNED AMOUNT WAS DEPOSITED IN THE BANK AND THAT AMOUNT WA S ACTUALLY ACCOUNTED IN THE PERSONAL BOOKS OF ACCOUNTS, THEREF ORE, OUT OF THE CLUTCHES OF THE BLOCK ASSESSMENT. HE HAS ALSO OPINE D THAT THOSE PERSONAL BOOKS OF ACCOUNTS WERE NOT FOUND TO BE BOG US BY THE AO. IT WAS NOTED BY LEARNED CIT(A) THAT IN THE RETURN FILE D BY THE ASSESSEE, IN THE REGULAR COURSE, THE SAID AMOUNT WAS DISCLOSE D AND CAPITAL GAIN OF LAND HAS ALSO BEEN OFFERED. HE HAS HELD THAT AO HAD ERRED IN TREATING THE SAID AMOUNT AS UNDISCLOSED INCOME FO R THE BLOCK PERIOD. RESULTANTLY, THE ADDITION WAS DELETED. 4. FROM THE SIDE OF THE REVENUE, SHRI T. SANKAR, LE ARNED SR. D.R. APPEARED. HE HAS VEHEMENTLY CONTESTED THAT IN THE S EARCH ACTION ON 21.12.1999 IT WAS DETECTED THAT THE ASSESSEE HAD SO LD LAND TO M/S. VRINDAVAN DEVELOPERS BUT FAILED TO RECORD THE AMOUN T RECEIVED IN THE BOOKS OF ACCOUNTS, THEREFORE, THE ASSESSEE HAD EARN ED UNDISCLOSED ITA NO.565/ AHD/2010 ITO, SURAT VS. SHRI LAXMINARAYAN SONI. - 5 - INCOME. HE HAS FURNISHED WRITTEN SUBMISSION, RELEVA NT PORTION IS REPRODUCED BELOW: BASIC FACTS O SEARCH TOOK PLACE IN M/S. VRINDAVAN DEVELOPER S ON 21/12/1999 IN WHICH ASSESSEE'S SONS WERE 40% PARTNERS. O ENTRIES AS PER PAGE 11 OF ANNEXURE BS-3 CLEARLY SHOW CASH RECEIPTS (PARA 7 OF AO ORDER) O ASSESSEE HAS DEPOSITED RS.24 LAKHS IN CASH IN BANK A/C ON 18/01/2000. IN THE STATEMENT RECORDED ON 19/01/2000 , ASSESSEE HAS ADMITTED THAT THE CASH RECEIPTS ARE NOT RECORDED IN REGULAR BOOKS OF ACCOUNTS. CIT(A) HAS FAILED TO CONSIDER SEVERAL CRUCIAL A SPECTS: O PARA 10.3: 'THE ONLY CONCLUSION WHICH COULD BE DRAWN IS THAT THE STATEMENT WAS MADE UNDER MENTAL PRESSURE WHICH ANY PERSON COULD NORMALLY BE EXPECTED TO EXPERIENCE WHILE HIS STATEM ENT IS BEING RECORDED BY AN OFFICIAL OF THE I-T DEPT'. SUCH COMMENT IS TOTALLY CONTRADICTORY TO THE DECISI ON OF HON'BLE APEX COURT IN THE CASE OF SURJEET SINGH CHHABRA AIR 1197 SC 2560 (LAST PAGE OF AO ORDER). AS HELD IN T S KURNARASMY VS ACIT, 65 ITD 188, BY T HE HON'BLE MADRAS ITAT, 'IT IS WELL KNOWN THAT THE INCOME-TAX OFFICERS ARE NOT POLICE OFFICERS AND THEY DO NOT USE OR RESORT TO UN FAIR MEANS OR THIRD DEGREE METHODS IN RECORDING OATH STATEMENTS AND THE REFORE WHATEVER IS CONFESSED AND ADMITTED BEFORE THEM DURING THE CO URSE OF SEARCH OPERATIONS OR DURING THE COURSE OF ANY PROCEEDINGS BEFORE THEM THEN WE THINK SUCH STATEMENTS, ADMISSIONS AND CONFESSIONS ARE BINDING AND CANNOT BE RETRACTED, UNLESS AND UNTIL, WE REPEAT, UNLESS AND UNTIL IT IS PROVED BY LEGALLY ACCEPTABLE EVIDENCE THAT SUCH ADMISSION, CONFESSION OR OATH STATEMENT WAS IN VOLUNTARY OR TENDERED UNDER COERCION OR DURESS. NO SUCH CIRCUMSTANCES EXISTED OR PROVED TO HAVE EXISTED.' NO SUCH EVIDENCE OF STA TEMENT HAVING BEEN RECORDED UNDER DURESS HAS BEEN BROUGHT ON RECO RD. IT MAY BE NOTED THAT STATEMENT WAS RECORDED AFTER A MONTH OF SEARCH AND THE ASSESSEE WAS NOT A SEARCHED PARTY HIMSELF. THUS, THERE WAS NO NEED FOR MENTAL PRESSURE IF THE ASSESSEE WAS NOT AT FAULT. IF THE CONCLUSION OF CIT(A) IS ACCEPTED, THEN A LL STATEMENTS RECORDED BY DEPARTMENT WOULD HAVE TO CEASE. PARA 10.4: 'AS JUST SHOWN, THE RECEIPTS HAD ALREADY BEEN ACCOUNTED FOR IN THE BOOKS BEFORE THE DATE OF SEARCH EVEN THO UGH THE FIXED DEPOSITS MAY HAVE BEEN PURCHASED AT A LATER DATE' NO SUPPORTING EVIDENCE OR MATERIAL HAS BEEN GIVEN BY CIT(A) TO SHOW HOW HE DREW THE ABOVE CONCLUSION. WHY WILL A PRUDENT PERSON KEEP CASH IDLE FOR 7 MONT HS? WHY WAS THE CASH DEPOSITED IN BANK JUST ONE DAY PRI OR TO RECORDING TO STATEMENT? ITA NO.565/ AHD/2010 ITO, SURAT VS. SHRI LAXMINARAYAN SONI. - 6 - THE ASSESSEE HAD ALSO CONFIRMED IN THE STATEMENT ON 19/01/2000 THAT THE RECEIPTS WERE UNACCOUNTED. CIT(A) HAS NOT EXAMINED ANY CONTEMPORANEOUS EVIDENC E AS TO WHETHER ASSESSEE HAD PAID ADVANCE TAX INSTALMENT ON SUCH RECEIPTS IN SEPTEMBER 1999 AND DECEMBER 1999. THE DETAILS OF AD VANCE TAXES PAID (PAGE 24, 26 OF PB) REVEAL THE FOLLOWING: DATE OF ADVANCE TAX AMOUNT RS. 09-09-1999 6,000 10-12-1999 5,000 15-03-2000 4,80,000 31-03-2000 1,29,792 THE ABOVE TABLE CLEARLY BRINGS OUT THE FACTUAL ASPE CT THAT THE CASH RECEIPTS WERE NOT RECORDED IN THE BOOKS AS ON THE D ATE OF SEARCH, AS OTHERWISE THE ASSESSEE WOULD HAVE PAID ADVANCE TAXE S THEREON. HOWEVER, IT IS NOT THE CASE AND ADVANCE TAXES HAVE BEEN PAID ONLY IN MARCH 2000, CLEARLY SHOWING THE AFTER-THOUGHT AC TION OF THE ASSESSEE. IF THE FUNDS WERE ACTUALLY RECORDED, WHY DID THE AS SESSEE KEEP THEM IDLY AS CASH AND SUFFER INTEREST U/S.234C AT THE SAME TIME? THE RELEVANT PAGES OF CASHBOOK (PAGES 19-20 OF PB) ARE MERELY SELF- SERVING EVIDENCES OF THE ASSESSEE. THE USAGE OF FUNDS BY THE ASSESSEE FROM MAY/JUNE 19 99 TILL JANUARY 2000 HAS NOT BEEN CONSIDERED AT ALL, AND WHETHER IT WAS KEPT IDLE DURING THE INTERVENING PERIOD? IN A CASE OF SEARCH (PARTICULARLY WHERE ASSESSEE'S SONS' FIRM WAS SEARCHED) AND DOCUMENT SHOWING CASH RECEIPT WAS SEIZED, THE PRESUMPTION IS ON ASSESSEE TO SHOW THAT THE SAM E WAS RECORDED IN REGULAR BOOKS. THE ONUS CANNOT BE PLACE D ON DEPARTMENT, PARTICULARLY WHEN CASH WAS DEPOSITED IN BANK A/C ONLY ON 18/01/2000. AS REGARDS RETRACTION BY WAY OF AFFIDAVIT DATED 19/ 01/2000 (PAGES 17,18 OF PB), THERE IS NO MENTION IN ANY OF THE SUB MISSION OF THE ASSESSEE AS TO WHETHER THIS WAS GIVEN TO DDIT(INV)- SURAT, WHO HAD RECORDED THE STATEMENT OF THE ASSESSEE ON THE VERY SAME DAY. ALSO, IN THE LETTER DATED 19/12/2000 ADDRESSED TO THE AO (PA GES 10, 11 OF PB), THERE IS NO MENTION OF THIS AFFIDAVIT. IN THE ENTIRE SUBMISSIONS OF THE ASSESSEE, THERE IS NO CLAIM AS TO WHEN THE AFFIDAVI T WAS GIVEN TO DEPARTMENTAL AUTHORITIES BY THE ASSESSEE. WHY WAS THE AFFIDAVIT NOT GIVEN ON 19/1/2000 ITSELF TO DEPARTMENTAL AUTHORITI ES? THIS ASPECT HAS BEEN COMPLETELY IGNORED BY THE CIT(A). IN PARA 10, CIT(A) HAS RELIED ON VARIOUS DECISIONS. THE CASE LAW OF 174 TAXMAN 44 IS NOT AVAILABLE IN THE DATABASE OF T AXMAN AND CANNOT BE COMMENTED UPON. AS REGARDS OTHER DECISIONS, THEY ARE RELATED TO CASES WHERE ADMISSIONS WAS BASED ON SOLELY STATEMEN TS RECORDED DURING SEARCH. HOWEVER, IN OUR CASE, THE ASSESSEE W AS NEITHER SEARCHED NOR SURVEYED. HE DEPOSITED CASH JUST ONE D AY PRIOR TO DEPOSITION AND ALSO ACCEPTED THAT RECEIPTS WERE UNA CCOUNTED. THE AO ITA NO.565/ AHD/2010 ITO, SURAT VS. SHRI LAXMINARAYAN SONI. - 7 - HAD MADE ADDITION BASED ON SEIZED DOCUMENT AND NOT MERELY ON THE BASIS OF STATEMENT. HENCE, THE CASELAWS ARE DISTING UISHABLE. IN PARA 10.5, CIT(A) HAS FAULTED AO FOR ADDING RS.3 7 LAKHS INSTEAD OF RS.24 LAKHS. WHILE DOING SO, HE HAS OVERLOOKED THE REASONS GIVEN BY AO IN THE ASSESSMENT ORDER (PARA 6). ALSO, THE ASSE SSEE HIMSELF HAS ACCEPTED THAT RS.37 LAKHS OUGHT TO BE TAXED (PARA 2 OF PAGE 10 OF PB). CIT(A)'S DECISION TO FIND FAULT WITH THE AO REGARDI NG TAXING TAXATION AT 20% INSTEAD OF MAXIMUM RATE IS ALSO BASED ON INCORR ECT PROVISIONS OF LAW, INASMUCH AS THE DECISION OF COCHIN BENCH OF IT AT IN THE CASE OF PA CHANDRAN VS ACIT, 69 TTJ 556, HAS BEEN OVER-RULE D IN SUBSEQUENT DECISION OF ITAT IN THE CASE OF KRISHNAGOPAL NAGPAL VS DCIT, 82 TTJ 481 (PUNE) AFTER CONSIDERING THE AFORESAID DECISION . IN SHORT, CIT(A) HAS COMPLETELY OVERLOOKED THE FACT THAT THE CASH RECEIPTS WERE NOT RECORDED BY THE ASSESSEE ON THE D ATE OF SEARCH, AND THE ONUS WAS ON ASSESSEE TO PROVE THAT THEY HAD BEEN RECORDED AND ACCOUNTED FOR. 4.1 BEFORE WE PROCEED FURTHER, AT THIS STAGE JUNCTU RE, IT IS WORTH TO MENTION THE EFFORTS TAKEN BY LEARNED SR. D.R. IN PL ACING BEFORE US ALL THE FACTS IN DETAILS, THUS EFFICIENTLY ASSISTED THE COURT. 5. FROM THE SIDE OF THE RESPONDENT ASSESSEE, SRI ME HUL SHAH, LEARNED A.R. APPEARED. HE HAS PLEADED THAT THERE WA S NO AFTERTHOUGHT. IN FACT THE ASSESSEE HAS ALWAYS INTENDED TO DISCLOS E THE IMPUGNED AMOUNT, THEREFORE, IN GOOD FAITH IT WAS DEPOSITED I N THE BANK. THE STATEMENT WHICH WAS RECORDED WAS MADE UNDER CONFUSI ON. THE ASSESSEE WANTED TO EXPLAIN THAT THE SAID AMOUNT WAS NOT RECORDED IN HIS PROPRIETORSHIP BUSINESS ACCOUNTS BUT IT WAS REC ORDED IN THE PERSONAL BOOKS. THAT STATEMENT WAS LATER ON RETRACT ED. THE ASSESSEE WAS NEVER RAIDED BY THE REVENUE DEPARTMENT. THIS IS NOT THE CASE OF THE REVENUE THAT THE PERSONAL BOOKS OF ACCOUNTS WER E SEIZED AT THE TIME OF SEARCH AND SO IN THE SEIZED MATERIAL THERE WAS NO ENTRY OF THE IMPUGNED AMOUNT. THE ASSESSEE WAS CALLED UPON BY DD IT (INVESTIGATION), (SUPRA) ON 19 TH OF JANUARY, 2000. HIS STATEMENT WAS RECORDED UNDER SECTION 131(1A). THE ASSESSEE WAS AS KED ABOUT THE ITA NO.565/ AHD/2010 ITO, SURAT VS. SHRI LAXMINARAYAN SONI. - 8 - TRANSACTION WITH M/S. VRINDAVAN DEVELOPERS. THE ASS ESSEE HAD CONFIRMED THAT THE SUM OF RS.24,00,000/- WAS RECEIV ED. THEREAFTER, THE ASSESSEE WAS QUESTIONED WHETHER THE MONEY RECEI VED WAS SHOWN IN THE ACCOUNTS. THE ASSESSEE HAS GIVEN THE ANSWER UNDER THE PRESSURE AND THOUGHT THAT HE WAS REQUIRED TO DISCLOSE THE SA ME IN THE ACCOUNTS OF HIS PROPRIETORSHIP CONCERN. BECAUSE OF THE SAID CONFUSION, THE ASSESSEE HAS STATED THAT IT WAS NOT REFLECTED IN TH E REGULAR BOOKS ACCOUNTS. LATER ON THROUGH AN AFFIDAVIT DATED 19 TH OF JANUARY, 2000, IT WAS CLARIFIED THROUGH A RETRACTION. HE HAS CORRECTE D THE SAID STATEMENT AND AFFIRMED THE FACT THAT THE AMOUNT IN QUESTION W AS RECORDED IN THE PERSONAL BOOKS OF ACCOUNTS. IT WAS ALSO STATED ON O ATH THAT THE SAID AMOUNT WAS DEPOSITED IN FIXED DEPOSIT WITH A BANK. 5.1 SHRI SHAH HAS DRAWN OUR ATTENTION TO THE PERSON AL SETS OF BOOKS OF ACCOUNTS, RELEVANT EXTRACT OF LEDGER IS PLACED I N THE COMPILATION. HE HAS ALSO DRAWN OUR ATTENTION ON THE RETURN FILED BY THE ASSESSEE WHEREIN THE ASSESSEE HAS WORKED OUT THE LONG TERM C APITAL GAIN ON THE SALE OF LAND. THE ASSESSEE HAS ALSO INFORMED THAT A DVANCE TAX WAS ALSO PAID. HE HAS CONCLUDED HIS ARGUMENT BY MENTIONING T HAT TWO TIMES LEARNED CIT(A) HAD DELETED THE ADDITION. IN THE FIR ST ROUND, LEARNED CIT(A) VIDE ORDER DATED 25 TH OF MARCH, 2002 HAS DECIDED THE APPEAL IN FAVOUR OF THE ASSESSEE. AGAIN IN THE SECOND ROUN D OF APPEAL IN THE IMPUGNED ORDER, NOW UNDER APPEAL, DATED 22 ND OF MARCH, 2010. THE ASSESSEE WAS GRANTED RELIEF WHICH SHOWS THAT THE CA SE OF THE REVENUE DEPARTMENT WAS VERY WEAK SINCE INCEPTION. 6. WE HAVE HEARD BOTH THE SIDES AT SOME LENGTH. WE HAVE ALSO PERUSED THE MATERIAL PLACED BEFORE US. AT THE OUTSE T, SRI SHAH HAS ITA NO.565/ AHD/2010 ITO, SURAT VS. SHRI LAXMINARAYAN SONI. - 9 - DRAWN OUR ATTENTION ON ONE OF THE PROVISIONS OF IT ACT, I.E., SECTION 158 BA(3) FOR THE LEGAL PROPOSITION THAT IN A SITUA TION WHERE THE PREVIOUS ORDER HAS NOT ENDED AND THE DATE OF FILING OF THE RETURN HAS NOT EXPIRED, THEN SUCH INCOME WHICH IS RECORDED IN THE NORMAL COURSE, THE SAME SHOULD NOT BE INCLUDED IN THE BLOC K PERIOD. FOR READY REFERENCE, RELEVANT SECTION IS REPRODUCED BEL OW: WHERE THE ASSESSEE PROVES TO THE SATISFACTION OF TH E ASSESSING OFFICER THAT ANY PART OF INCOME REFERRED TO IN SUB- SECTION (1) RELATES TO AN ASSESSMENT YEAR FOR WHICH THE PREVIOU S YEAR HAS NOT ENDED OR THE DATE OF FILING THE RETURN OF INCOM E AND SUCH INCOME OR THE TRANSACTIONS RELATING TO SUCH INCOME ARE RECORDED ON OR BEFORE THE DATE OF THE SEARCH OR REQ UISITION IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE RELATING TO SUCH PREVIOUS YEARS, THE SAID INCOME SHALL NOT BE INCLUDED IN THE BLOCK PERIOD. 6.1 AS FAR AS THIS PROVISION IS CONCERNED, THERE IS NO AMBIGUITY. IF THE ASSESSEE PROVES THAT THE ALLEGED INCOME IS DULY RECORDED ON OR BEFORE THE DATE OF SEARCH IN THE NORMAL COURSE IN T HE BOOKS OF ACCOUNT IN RESPECT OF AN ASSESSMENT YEAR FOR WHICH THE PREV IOUS YEAR HAS NOT ENDED THEN SUCH INCOME IS NOT REQUIRED TO BE INCLUD ED IN THE BLOCK PERIOD. ACCORDING TO US, SUB SECTION (3) OF SECTION 158BA IS BASED UPON THE PRINCIPLE OF EQUITY AND COMMON SENSE. NATU RALLY, IF AN INCOME HAS ALREADY BEEN DISCLOSED IN THE BOOKS OF A CCOUNT THEN SUCH AN INCOME SHOULD NOT BE TREATED AS UNDISCLOSED INCO ME AS IF UNEARTHED CONSEQUENCE UPON A SEARCH. IN THE PRESENT APPEAL, THE REVENUE DEPARTMENT HAD DOUBTED THE CORRECTNESS OF T HE CLAIM OF THE ASSESSEE WHETHER THE IMPUGNED AMOUNT IN QUESTION WA S RECORDED IN THE BOOKS OF ACCOUNT BEFORE THE SEARCH CONDUCTED. T HE ALLEGATION OF THE REVENUE DEPARTMENT IS THAT IT WAS A CAMOUFLAGE ON THE PART OF THE ASSESSEE. WE HAVE GIVEN OUR CAREFUL THOUGHT OVER TH IS ARGUMENT OF THE ITA NO.565/ AHD/2010 ITO, SURAT VS. SHRI LAXMINARAYAN SONI. - 10 - REVENUE DEPARTMENT. WE HAVE NOTED THAT THE CASE OF THE REVENUE WAS NOT THAT THE ASSESSEES PERSONAL BOOKS OF ACCOU NT WERE SEIZED AT THE TIME OF SEARCH AND IN THOSE SET OF BOOKS OF ACC OUNT THERE WAS NO ENTRY OF DEPOSIT OF RS.24,00,000/- ON THREE DIFFERE NT DATES, AS NOTED (SUPRA). THE CORRECT FACTUAL POSITION WAS THAT NO S EARCH ACTION AT ALL WAS CARRIED OUT ON THE ASSESSEE. THE ASSESSEE WAS D IRECTED TO FILE THE RETURN OF THE BLOCK PERIOD CONSEQUENCE UPON A SEARC H CONDUCTED ON DEVELOPER, VIZ., M/S. VRINDAVAN DEVELOPERS. IN THAT CASE OF M/S. VRINDAVAN DEVELOPERS A SEARCH WAS CARRIED ON 21.12. 1999 AND THEREUPON IT WAS NOTED THAT A LAND WAS AGREED TO BE SOLD BY THE ASSESSEE AND IN LIEU RECEIVED AN ADVANCE CONSIDERAT ION OF RS.24,00,000/-. THAT WAS THE START POINT OF ACTION AGAINST THE ASSESSEE. AT THAT POINT WHEN THERE WAS AN APPREHENSION OF ALL EGED UNACCOUNTED TRANSACTION IN THE EYES OF REVENUE DEPARTMENT THEN FURTHER INVESTIGATION COULD HAVE BEEN DONE THEN AND THERE. IF THE REVENUE DEPARTMENT HAD FAILED TO TAKE APPROPRIATE MEASURES THEN THE ASSESSEE IS AT LIBERTY TO TAKE THE LEGAL ADVANTAGE OF THOSE FALLACIES. THEREFORE, FOR ARGUMENT SAKE, EVEN IF IT WAS AN AFTER THOUGHT ON THE PART OF THE ASSESSEE, BUT THE ACTION WAS TAKEN BY HIM WITHIN TI ME, AS PRESCRIBED IN THE SECTION REFERRED ABOVE. CERTAIN MEASURES WER E TAKEN BY THE ASSESSEE, SUCH AS, DEPOSIT OF ADVANCE-TAX, ENTRIES IN THE PERSONAL SET OF BOOKS OF ACCOUNTS, FIXED DEPOSIT IN THE BANK, FILIN G OF THE INCOME TAX RETURN AND DISCLOSURE OF CAPITAL GAIN PERTAINING TO THE SAID LAND. WE THEREFORE HOLD, CONSIDERING ALL THESE CIRCUMSTANCES , THAT THE ASSESSEE HAD WISELY TAKEN THE LEGAL ADVANTAGE OF THE PROVISI ON OF THE ACT, ESPECIALLY WHEN THE REVENUE HAD FAULTED IN NOT TAKI NG A TIMELY ACTION. FURTHER THIS FACT CAN ALSO NOT BE IGNORED T HAT ON LAST TWO ITA NO.565/ AHD/2010 ITO, SURAT VS. SHRI LAXMINARAYAN SONI. - 11 - OCCASIONS THE LEARNED FIRST APPELLATE AUTHORITIES H AVE CONSISTENTLY ACCEPTED THE CLAIM OF THE ASSESSEE AS IF APPROVING THOSE STEPS A LEGITIMATE PLANNING. THEREFORE, IN THE ABSENCE OF A NY COGENT MATERIAL, WE ARE NOT INCLINED TO UNSETTLE THE LEGAL AS ALSO F ACTUAL FINDINGS OF LEARNED CIT(A). RESULTANTLY, THIS GROUND OF THE REV ENUE IS HEREBY DISMISSED. SD/ - SD/ - ( ANIL CHATURVEDI ) ( MUKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 14/06/2013 PRABHAT KR. KESARWANI, SR. P.S. TRUE COPY TRUE COPY TRUE COPY TRUE COPY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT. 3. #$#% ' '& / CONCERNED CIT 4. ' '&() / THE CIT(A)-III, AHMEDABAD 5. )*' %, ' ' % , ,-$ / DR, ITAT, AHMEDABAD 6. *./ 0 / GUARD FILE. / BY ORDER, 1 11 1/ // /,' #2 ,' #2 ,' #2 ,' #2 ( DY./ASSTT.REGISTRAR) ' ' % ' ' % ' ' % ' ' % , , , , ,-$ ,-$ ,-$ ,-$ / ITAT, AHMEDABAD