The ACIT, Central Circle-1(2), Ahmedabad V. Shri Amthabhai V.Desai, Ahmedabad

ITSSA 576/AHD/2010

• Counselvise Citation: [2017] 122 COUNSELVISE.COM (IT) 3205 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 year(s) 10 month(s) 22 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 24-05-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 29-03-2017
• Assessment Year: 2004-2005
• Appeal Filed On: 02-07-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R I PATEL CIR
• Assessee Lawyers: PRITESH L SHAH
• Keywords: Unexplained investment; Income from undisclosed sources; Document seized; Documents seized
• Section: 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH BEFORE: SHR I S. S. GODARA , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER THE ACIT, CENTRAL CIRCLE - 1(2), ROOM NO. 305, 3 RD FLOOR, AAYKAR BHAVAN, ASHRAM ROAD, AHMEDABAD (APPELLANT) VS SHRI AMTHABHAI V. DESAI, MALDHARI SOCIETY, ZAVERI PARK WADAJ, AHMEDABAD PAN: ABCPD5217F (RESPONDENT) REVENUE BY : S H RI R.I. PATEL, CIR - D . R. ASSESSEE BY: S H RI PRITESH L. SHAH , A.R. DATE OF HEARING : 29 - 03 - 2 017 DATE OF PRONOUNCEMENT : 24 - 05 - 2 017 / O RDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THESE THREE REVENUE S APPEAL S FOR A.Y S . 1999 - 2000, 2001 - 02 & 2004 - 05 , AR ISE FROM ORDER OF THE CIT(A) - III, AHMEDABAD DATED 12 - 05 - 2010 IN APPEAL NO S. CIT(A) - III/145 - 147/CC - 1(2)/08 - 09 , DELETING ADDITIONS OF RS. 32,24,000, RS.3,01,500/ - & RS. 25,90,000/ - I T (SS) A NO S . 574 TO 576 / A HD/20 10 A . Y . 1999 - 2000, 2001 - 02 & 2004 - 05 I.T. (SS) A NO. 574 TO 576 /AHD/20 10 A.Y. 1999 - 2000, 2001 - 02 & 2004 - 05 PAGE NO ACIT VS. SHRI AMTHABHAI V. DESAI 2 RESPECTIVELY, IN PROCEEDINGS UNDER SECT ION 153C R.W.S. 153A OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . IT (SS) A NO.574/AHD/2010 - A.Y.1999 - 00 2 . IN THIS CASE, SEARCH ACTION U/S. 132 OF THE ACT WAS CARRIE D OUT ON 9 TH FEB, 2005 AND VARIOUS DOCUMENT/BOOKS OF ACCOUNT/OTHER VALUABLE ARTICLE/OTHER THINGS WERE FOUND AND SEIZED FROM THE VEHICLE NO. GJ - 01HF251 OWNED AND CLAIMED BY SHRI VIKAS A. SHAH. ON V ERIFICATION OF DOCUMENT SEIZED A - 01 TO A - 271 IT WAS NOTICED THAT PAGE 30 OF ANNEXURE A - 73 WAS THE MEMORANDUM OF UNDERSTANDING BETWEEN SHRI CHHAGAN BHAI V DESAI , AMTHABHAI V. DESAI AND SHRI VIKAS A. SHAH. THE ASSESSING OFFICER FURTHER STATED THAT FROM THESE DOCUMENTS , IT WAS EVIDENT THAT THE SAID DOCUMENT BELONG ED TO THE ASSESSEE , THEREFOR E , PROCEEDINGS U/S. 153C R.W.S. 153A OF THE ACT W ERE INITIATED AGAINST THE ASSESSEE BY ISSUING OF NOTICE U/S. 153C R.W.S. 153 OF THE ACT ON 25 TH OCTOBER, 2005. IN RESPONSE TO THE NOTICE, THE ASSESSEE HAS FILED RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 35 , 230 AND AGRICULTURAL INCOME OF RS. 2 , 61 ,17 2 ON 29 TH NOVEMBER, 2005. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ON THE PERUSAL OF THE ITEM NO. A - 124 OF SEIZED MATERIAL WHICH WAS SEIZED FRO M THE CUSTODY OF SHRI VIKAS A SHA H, I T WAS NOTICED THAT CERTAIN AMOUNT WERE SHOWN TO BE RECEIVED AND PAID IN THE NAME OF THE ASSESSEE A MTHABHAI V. DESAI. IT WAS FURTHER NOTICED THAT ASSESSEE HAS NOT SHOWN SUCH TRANSACTION IN HIS REGULAR BOOKS OF ACCOUNTS. THEREAFTER, THE COPY OF LEDGE R ACCOUNT OF THE ASSESSE APPEARING IN THE BOOKS OF ACCOUNTS OF VIK A S A SHAH AND I.T. (SS) A NO. 574 TO 576 /AHD/20 10 A.Y. 1999 - 2000, 2001 - 02 & 2004 - 05 PAGE NO ACIT VS. SHRI AMTHABHAI V. DESAI 3 MANSI BUILDERS LTD WAS PREPARED ON THE BASIS OF SEIZED MATERIAL AND COPY OF THE SAME WAS PROVIDED TO THE ASSESSEE ALONG WITH SHOW CAUSE NOTICE. THE CONTENTS OF THE SHOW CAUSE NOTICE IS REPRODUCED AS UNDER: - 1. ON VERIFICATION OF THE SEIZED MATERIAL FOUND .AND SEIZED FROM THE VEHICLE NO.GJLHF251 OWNED BY VIKAS SHAH IT IS NOTICED THAT YOU HAVE RECEIVED THE FOLLOWING AMOUNT FROM TIME TO TIME (COPY OF SEIZED PAPER ENCLOSED). ANNEX URE PAGE NO. AMOUNT DATE A - 124 43 25,000 10.04.98 A - 124 47 45,000 27.04.98 A - 124 53 8,80,000 19.05.98 A - 124 61 1,00,000 15.06.98, A - 124 86 6,50,000 20.08.98 A - 124 87 9,50,000 22.08.98 A - 124 93 4,50,000 06.09.98 A - 12 4 111 20,000 15.10.98 A - 124 141 15,000 21.O2.99 A - 124 147 20,000 22.03.99 IN THIS REGARD, YOU ARE REQUIRED TO SHOW CAUSE THAT WHY THE SAME SHOULD NOT BE CONSIDERED AS UNACCOUNTED RECEIPT FOR RESPECTIVE YEARS AND ACCORDINGLY ADDED IN YOUR T OTAL INCOME.' IN RESPONSE TO THAT THE ASSESSEE SUBMITTED REPLY VIDE LETTER DATED 30.11.2006 AS UNDER: - ' THE DETAILS AND TRANSACTIONS SHOWN IN YOUR NOTICE ARE NOT PERTAINING TO ME. I DO NOT ACCEPT ALL TRANSACTIONS AND DETAILS. I SUBMIT I.T. (SS) A NO. 574 TO 576 /AHD/20 10 A.Y. 1999 - 2000, 2001 - 02 & 2004 - 05 PAGE NO ACIT VS. SHRI AMTHABHAI V. DESAI 4 HEREWITH AFFIDAVITS IN WHICH I HAVE SUBMITTED ALL FACTS FOR ALL POINTS OF YOUR NOTICE. THEREFORE, YOU ARE REQUESTED TO CONSIDER THE ALL FACTS OF THE AFFIDAVITS BEFORE FINALIZATION OF ASSESSMENT.' THE ASSESSEE SUBMITTED AFFIDAVIT STATING THAT HE HAS NOT RECEIVED ANY AMOUNT A S ALLEGED IN THE NOTICE OF THE ASSESSING OFFICER. HE FURTHER STATED THAT HIS RELATION WITH MR. VIKAS A. SHAH WAS A N EMPLOYEE ONLY A ND FURTHER CONTENDED THAT HE HA D NOT RECEIVED ANY AMOUNT. THE ASSESSING OFFICER HAS NOT ACCEPTED THE EXPLANATION OF T HE AS SESSEE ON THE FOLLOWING GROUNDS. I. THE ASSESSEE HAS HIMSELF ADMITTED IN THE AFFIDAVIT THAT HE HAS BEEN EMPLOYEE OF VIKAS A SHAH. HE ALSO ADMITTED THAT HE HAS BEEN ENGAGED IN THE BUSINESS OF DALALI / BROKER AGE OF LAND. IT WAS F URTHER NOTICED THAT SHRI VIK AS A SHAH WAS ALSO ENGAGED IN THE SAME LINE OF BUSINESS , TRADING AND DEVELOPING OF LAND FOR WHICH HE HA D TO PA Y THE DALALI TO THE PERSON WHO ARRANGED LAND FOR HIS BUSINESS PURPOSE. II. DURING THE COURSE OF SEARCH ON VEHICLE N6.SJ1 - HF - 251 OWNED BY VIKAS A. SHAH M O U DATED 18.06.1998 WAS FUND AND SEIZED DULY SIGNED BY VIKAS A. SHAH, CHHAGANBHAI V. DESAI AND ALSO AMTHABHAI V. DESAI, THE ASSESSEE, RELATED TO AMOUNT PAID/PAYABLE BY ASSESSEE TO VIKAS A. SHAH FOR TWO FLATS AND OTHER CONSIDERATIONS. DU RING THE COURSE OF POST SEARCH INVESTIGATION TH E ASSESSEE HAS ADMITTED THAT HE HAD PURCHASED A FLAT NO.903 AT ANUSHRUTI IN THE NAME OF HIS DAUGHTER REKHA A. DESAI. THEREFORE, CLAIM OF THE ASSESSEE THAT HE HAS NOT ENTERED INTO ANY TRANSACTION WITH VIKAS A. SHAH WAS NOTHING BUT A WILLFUL ATTEMPT TO DENY THE OTHER TRANSACTIONS NOTED ON SAID I.T. (SS) A NO. 574 TO 576 /AHD/20 10 A.Y. 1999 - 2000, 2001 - 02 & 2004 - 05 PAGE NO ACIT VS. SHRI AMTHABHAI V. DESAI 5 M O U AND OTHER SEIZED PAPERS . MR. VIKAS A. SHAH HAS STATED IN HIS STATEMENT THAT THE TRANSACTIONS NOTED ON ANNEXURE - A/124 WERE DAILY CASH REP O RT PREPARED BY HIS EMPLOYEE AND AFTER VERIFICATION OF THE SAME HE USED TO PUT IN SIGNATURE . THEREAFTER ON VERIFICATION OF LEDGER ACCOUNT OF THE ASSESSEE APPEARING IN THE BOOKS OF VIKAS A. SHAH AS STATED ABOVE THE ASSESSING OFFICER OBSERVED THAT ASSESSEE HAS RECEIVED AN AMOUNT OF RS. RS. 32,24,00 0 / - WHICH WAS NOT DISCLOSED IN THE RETURN OF INCOME PERTAINING TO ASSESSMENT YEAR 1999 - 2000 . THEREFORE, THE SAME WAS ADDED TO THE INCOME OF ASSESSEE AS UNACCOUNTED RECEIPT. IT(SS)A NOS. 575/AHD/2010(ASSESSMENT YEAR 2001 - 02) 3 . THE FACT PERTA INING TO THIS YEAR ALSO SIMILAR TO THE FACT MENTIONED AS ABOVE PERTAINING TO ASSESSMENT YEAR 1999 - 2000. FOR THIS YEAR ALSO THE ASSESSING OFFICER HAS COMPLETED THE ASSESSMENT U/S. 153C R.W.S. 153A(B) OF THE ACT ON 18 TH DECEMBER, 2006. DURING THIS YEAR AL SO ON PERUSAL OF THE ITEM A - 124 SEIZED MATERIAL FOUND AND SEIZED FROM THE CUSTODY OF THE SHRI VIKAS A. SHAH, IT WAS NOTICED THAT CERTAIN AMOUNTS WERE SHOWN TO BE RECEIVED AND PAID IN THE NAME OF ASSESSEE. FURTHER AS IN THE ASSESSMENT YEAR 1999 - 2000 THE C OPY OF LEDGER OF ASSESSEE APPEARED IN THE BOOKS OF ACCOUNTS VIKAS A SHAH AND MANSHI BUILDER WAS PREPARED . ASSESSEE HAS SUBMITTED THE SAME REPLY TO THE SHOW CAUSE NOTICE ISSUED DURING THE YEAR AS ABOVE IN THE ASSESSMENT YEAR 1999 - 2000 AND ON THE SIMILAR GR OUND THE ASSESSING OFFICER HAS NOT ACCEPTED THE REPLY OF THE ASSESSEE. THE ASSESSING I.T. (SS) A NO. 574 TO 576 /AHD/20 10 A.Y. 1999 - 2000, 2001 - 02 & 2004 - 05 PAGE NO ACIT VS. SHRI AMTHABHAI V. DESAI 6 OFFICER CONCLUDED THAT ON VERIFICATION OF THE LEDGER OF THE ASSESSEE APPEARING IN THE BOO KS OF ACCOUNT OF VIKAS A. SHAH IT WAS OBSERVED THAT ASSESSEE HAD RECEIVED A N AMOUNT OF RS. 3,01,500/ - DURING THE YEAR WHICH WAS NOT DISCLOSED IN THE RETURN OF INCOME. AS THE ISSUE WAS IDENTICAL TO THE ASSESSMENT YEAR 1999 - 2000, THEREFORE, ADDITION OF RS. 3,01,500/ - WAS MADE TO THE TOTAL INCOME OF THE ASSESSEE AS UNACCOUNTED REC EIPT. IT(SS)A NOS. 57 6 /AHD/2010( ASSESSMENT YEAR 2004 - 05 ) 4 . DURING THIS YEAR ASSESSMENT IN THE CASE OF THE ASSESSEE WAS COMPLETED U/S. 153C R.W.S. 153A(B) OF THE ACT ON THE SAME FACT AS ELABORATED IN THE ASSESSMENT YEAR 1999 - 2000. DURING THIS YEAR , THE ASSESSEE HAS FILED HIS ORIGINAL RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 1,00,600 AND AGRICULTURAL INCOME OF RS. 1,52,523 ON 28ND JUNE, 2004. IN RESPONSE TO NOTICE U/S. 153C R.W.S. 153A THE ASSESSEE STATED THAT HIS ORIGINAL RETURN OF INCOME FI LED BE TREATED AS FILED IN RESPONSE TO THE NOTICE U/S. 153C R.W.S. 153A. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ON PERUSAL OF ITEM A - 195 SEIZED AND FOUND FROM THE CUSTODY OF SHRI VIKASH A. SHAH IT WAS NOTICED THAT CERTAIN AMOUNT WERE SHOWN TO BE RE CEIVED AND PAID IN THE NAME OF ASSESSEE. IT WAS FURTHER NOTICED BY THE ASSESSING OFFICER ON VERIFICATION OF THE CASE RECORD THAT SUCH TRANSACTIONS WERE NOT REPORTED IN REGULAR BOOKS OF ACCOUNT OF THE ASSESSEE. THEREFORE, THE ASSESSING OFFICER ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE AND PROVIDED COPY OF LEDGER ACCOUNT OF THE ASSESSEE APPEARING IN THE I.T. (SS) A NO. 574 TO 576 /AHD/20 10 A.Y. 1999 - 2000, 2001 - 02 & 2004 - 05 PAGE NO ACIT VS. SHRI AMTHABHAI V. DESAI 7 BOOKS OF ACCOUNT VIKAS A. SHAH AND MANSHI BUILDER PREPARED ON THE BASIS OF SEIZED MATERIAL. THE CONTENTS OF THE NOTICE IS REPRODUCED AS UNDER: - 1. ON VERIF ICATION OF THE SEIZED MATERIAL FOUND AND SEIZED FROM THE VEHICLE NO.6JLHF251 OWNED BY VIKAS SHAH IT IS NOTICED THAT YOU HAVE RECEIVED THE FOLLOWING AMOUNT FROM TIME TO TIME (COPY OF SEIZED PAPER ENCLOSED). ANNEXURE PAGE NO. AMOUNT DATE A - 195 80 90, 000 20.07.03 THE ASSESSEE HAS NOT ACCEPTED THIS TRANSACTION. THE ASSESSING OFFICER HAS NOT ACCEPTED THE SUBMISSION OF THE ASSESSEE ON SIMILAR REASONS AS ELABORATED ABOVE WHILE MAKING ADDITIONS IN A.Y.1999 - 2000 ON THE IDENTICAL FACTS. 5 . AGGRIEVED AGAINST THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A). VIDE COMMON ORDER FOR THE THREE ASSESSMENT YEARS ON THE IDENTICAL ISSUE, T HE LD. CIT(A) HAS DELETED THE ADDITION MADE BY THE ASSESSING OFFICER BY OBSERVING A S UNDER: - THE CONTENTIONS/DETAILS ON RECORD AND FILED WITH THE PAPER BOOK, WERE CAREFULLY CONSIDERED. IT IS SEEN THAT THERE IS NO EVIDENCE OF THE APPELLANT HAVING BEEN PROVIDED, WITH COPIES OF THE STATEMENTS OF SHRI VIKAS SHAH AND/OR THE OPPORTUNITY TO C ROSS EXAMINE HIM. FROM THE STATEMENT OF SHRI VIKAS SHAH, RECORDED IN THE POST SEARCH ENQUIRIES AND REFERRED TO BY THE APPELLANT, THE VERACITY OF THE STATEMENT OF SHRI VIKAS SHAH, IN RESPECT OF THE APPELLANT, IS NOT ESTABLISHED. THE APPELLANT IN HIS AFFI DAVIT DATED 28/11/2006, FILED BEFORE THE AO, HAD POINTED OUT THAT HE HAD THREE DAUGHTERS AND HE I.T. (SS) A NO. 574 TO 576 /AHD/20 10 A.Y. 1999 - 2000, 2001 - 02 & 2004 - 05 PAGE NO ACIT VS. SHRI AMTHABHAI V. DESAI 8 WAS TENDING TO CATTLE AND SELLING MILK AND HAD INCOME FROM AGRICULTURE. THE APPELLANT LIVED IN RABARI COLONY ALONG WITH SIX MINOR CHILDREN. HE STATED IN THE AFFIDAVIT THAT HE HAD NOT RECEIVED/PAID ANY AMOUNT FROM TO VIKAS SHAH, AS WAS MENTIONED IN THE SEIZED DOCUMENTS. HIS INVOLVEMENT WITH VIKAS SHAH, WAS ONLY THAT OF AN OCCASIONAL EMPLOYEE AND EXTENDED TO THE PURCHASE OF A FLAT NO.903, IN NAME OF HIS DAUGHTER , FOR THE AMOUNT OF RS.5.75 LAKHS, THE SOURCE OF WHICH WAS EXPLAINED. THE AO HAS NOT CHOSEN TO EXAMINE THE DEPONENT / APPELLANT IN RESPECT OF HIS AFFIDAVIT AND HAS NOT CONTROVERTED IT. THE APPELLANT HAD NOT BEEN GRANTED THE BENEFIT OF CROSS EXAMINATION, FO R WHICH THE AO HAS REFERRED TO THE DECISION REPORTED IN RAJ RANI GUPTA, 72 ITD 155, ALOK AGARWAL, 67 ITR 109 (DELHI), ETC. THE APPELLANT HAS SUBMITTED DETAILED EXPLANATION AND HAS REBUTTED THE OBSERVATIONS OF THE AO, (AS REPRODUCED IN PARA 7 OF THIS ORDER) . THE APPELLANT HAS POINTED OUT THAT THERE WAS NO NARRATION/DESCRIPTION FOR THE ENTRIES IN NAME OF THE APPELLANT AND SO ADDITION WAS NOT WARRANTED, AS HELD IN THE DECISION IN CASE OF JAGDAMBA RICE MILL, 67 TTJ 838, ELITE DEVELOPERS, 73 ITD 379(NAGPUR), PUN JAB TRADERS 88 TTJ 394 (CHANDIGARH), ETC. IN THE EVENT, THE STATED TRANSACTIONS IN THE NAME OF THE APPELLANT, ENTERED IN THE PAGES/DOCUMENTS SEIZED FROM VIKAS SHAH AND ADDED, WERE NOT VALIDATED/CORROBORATED BY ANY EVIDENCE. IN THESE FACTS AND THE RATIO OF THE DECISIONS, CITED BY THE APPELLANT, THE ADDITIONS MADE BY THE AO, ON THE BASIS OF THE ENTRIES IN PAGES CONTAINED IN ANNEXURE A/124, ANNEXURE A/17, ANNEXURE A/29 AND ANNEXURE A/195, IN RESPECT OF THE AFOREMENTIONED ASSESSMENT YEARS ARE NOT S USTAINABLE AND ARE DELETED. THE RELATED GROUNDS OF APPEAL ARE THUS ALLOWED. IT(SS)A NOS. 57 6 /AHD/2010( ASSESSMENT YEAR 2004 - 05 ) 6. FURTHER ON VERIFICATION OF PAGE 30 OF A - 73 WHICH WAS MEMORANDUM OF UNDERSTANDING DATED 18 - 06 - 1988 BETWEEN ASSESSEE, CHHAGA NBHAI V.DESAI AND VIKAS A. SHAH THAT ASSESSSEE WAS TO PAY AN AMOUNT OF RS. 25 LACS TO VIKAS A SHAH FOR TWO FLATS OF RS. 14.8 LACS AND OTHER CONSIDERATION. T HE ASSESEEE DURING THE POST S EA R CH INVESTIGATION HAS ADMITTED THAT HE HAS MADE PAYMENT OF RS. I.T. (SS) A NO. 574 TO 576 /AHD/20 10 A.Y. 1999 - 2000, 2001 - 02 & 2004 - 05 PAGE NO ACIT VS. SHRI AMTHABHAI V. DESAI 9 5.75 LACS AGAINST PURCHASE OF FLAT NO. 9 0 3 AT ANUKRITI. IN VIEW OF THIS, THE ASSESSEE WAS AKSED TO EXPLAIN THE SAME VIDE SHOW CAUSE NOTICE DATED 24 NOVEMBER, 2006 REPRODUCED AS UNDER. 'PLEASE REFER TO PAGE NO.30 OF ANNEXURE A - 73 I.E. MEMORANDUM OF UNDERSTANDI NG BETWEEN YOU, VIKAS A. SHAH & CHHAGANBHAI V. DESAI DULY SIGNED BY YOU AND OTHER TWO PERSON. AS PER THE MOU YOU HAVE TO PAY RS.25 LAKHS FOR TWO FLATS AND OTHER CONSIDERATION ON OR BEFORE 15.08.1998. IT WAS ALSO MENTIONED IN THE SAID M&U THAT IF YOU ARE NO T ABLE TO MAKE THE PAYMENT WITHIN THE STIPULATED TIME I.E. (15.08.1998) THE INTEREST WILL ALSO WILL CHARGED. FURTHER ON VERIFICATION OF THE CASE RECORDS AND SUBMISSION MADE BY YOU IT IS NOTICED THAT YOU HAVE MADE TOTAL PAYMENT OF RS.5,75,000/ - AGAINST THE P URCHASE OF FLAT AT 903, ANUSHRUTI FLATS IN THE NAME OF YOUR DAUGHTER REKHABEN A. BESAI. DATE WISE PAYMENT WAS MADE AS UNDER: - RS. 51,000/ - 18.07.01 RS.1,20,000/ - 28.02.02 RS.1,15,000/ - 30.04.02 RS.1,44,000/ - 14.10.02 RS. 70,000/ - 28.06.03 RS. 30,000/ - 09 .07.03 RS.45,000/ - 24.07.03 RS.5,75,000 ALL SUCH PAYMENTS HAVE BEEN MADE BY CASH ONLY. IN THIS REGARD YOU ARE REQUIRED TO SHOW CAUSE THAT WHY THE DIFFERENTIAL AMOUNT OF RS. 19,25,000/ - (25,00,000 - 5,75,000) SHOULD NOT BE ADDED TO YOUR TOTAL INCOME. YOU A RE ALSO REQUIRED TO PROVE WITH DOCUMENTARY EVIDENCES THAT THE PAYMENT OF RS.5,75,000/ - WAS MADE OUT OF YOUR DISCLOSED INCOME TO THE EXCHEQUER AND NOT FROM UNACCOUNTED SOURCE OF INCOME. PLEASE NOTE THAT FAILING TO WHICH SAME WILL BE CONSIDERED AS UNDISCLOSE D INCOME FOR THE RESPECTIVE YEARS.' IN RESPONSE TO THIS SHOW CAUSE NOTICE THE ASSESSEE HAS STATED THAT THE DETAILS AND TRANSACTION SHOWN IN THE SHOW CAUSE NOTICE WERE NOT PERTAINED TO HIM. THE ASSESSING OFFICER HAS NOT ACCEPTED THE SUBMISSION OF THE ASSE SSEE ON THE FOLLOWING GROUNDS : - I) AS ALREADY ESTABLISHED THAT ASSESSEE HAS BEEN ENTERED INTO VARIOUS TRANSACTIONS WITH VIKAS SHAH AND HE HAS BEEN CLOSELY I.T. (SS) A NO. 574 TO 576 /AHD/20 10 A.Y. 1999 - 2000, 2001 - 02 & 2004 - 05 PAGE NO ACIT VS. SHRI AMTHABHAI V. DESAI 10 ASSOCIATED WITH VIKAS A. SHAH AND MANSI BUILDERS LTD. IT CAN BE CONCLUDED BEYOND THE SHADOW OF DOUB T THAT TRANSACTIONS NOTED ON SAID SEIZED PAPERS ARE GENUINE AND ASSESSEE HAS PAID AN AMOUNT OF RS.25,00,000/ - TO VIKAS A. SHAH AS PER MOU. II) IN HIS SUBMISSION ASSESSEE HAS CONTENDED THAT HE HAS NO BUSINESS CONNECTION WITH VIKAS A. SHAH AND HE HAS NOT S IGNED ON THE MOU REFERRED. IN THIS REGARD, IT CAN BE SAID THAT ASSESSEE HIMSELF HAS SUBMITTED VIDE LETTER DATED 25.08.2006 THAT HE HAS BEEN EMPLOYEE OF VIKAS A. SHAH AND ALSO HE HAS BEEN OCCASIONALLY DOING THE DALALI WORK IN FAVOUR OF VIKAS A. SHAH. IN ADD ITION TO THAT ASSESSEE HAS CONFIRMED IN HIS STATEMENT RECORDED U/S.131(1A)BEFORE ADIT, MEHSANA THAT HE HAS PURCHASE FLAT NO.903 AT ANUSHRUTI IN THE NAME HIS DAUGHTER REKHABEN A. DESAI AND SAID FLATS WERE CONSTRUCTED BY VIKAS A. SHAH AND MANSI BUILDERS. IN HIS SUBMISSION ALSO ASSESSEE HAS CONFIRMED THE SAID FACTS. MOREOVER, AS PER MOU ASSESSEE HAD TO PAY RS.14.8 LAKHS FOR TWO FLATS WHICH INCLUDES 903, ANUSHRUTI FLATS ALSO. FROM THE ABOVE IT IS CRYSTAL CLEAR THAT THE SUBMISSION MADE BY THE ASSESSEE IS SELF CO NTRADICTORY AND HAVING NO BASIS. IN FACT, THIS IS A WILLFUL ATTEMPT TO ESCAPE FROM THE TAX LIABILITY BY WAY OF DISOWNING THE TRANSACTIONS NOTED ON SAID SEIZED PAPERS. III) EXPLANATION OF SECTION 132(4A) OF THE ACT THAT ALL THE SEIZED MATERIAL SHOULD BE D EALT WITH IN TOTALITY AND NOT IN ISOLATION. THEREFORE, ACCEPTING THE ONE TRANSACTION OF SEIZED PAPER AND DENYING OTHERS AS PER HIS CONVENIENCE BY THE ASSESSEE IS NOTHING BUT AN ATTEMPT TO ESCAPE FROM THE TAX LIABILITY AND MISGUIDE THE DEPARTMENT. ACCORDING LY, CONTENTIONS MADE BY THE ASSESSEE IS REJECTED. IV) AS ASSESSEE HAS NOT DISCLOSED SAID EXPENDITURE/INVESTMENT IN HIS BOOKS OF ACCOUNT SAME IS LIABLE TO BE CONSIDERED AS UNDISCLOSED INVESTMENT/EXPENSES FOR THE YEAR. V) HERE IT IS ALSO PERTINENT TO N OTE THAT AS PER AAOU ASSESSEE HAS TO PAY THE TOTAL AMOUNT ON OR BEFORE 15.08.1998. HOWEVER, ON VERIFICATION OF THE RELEVANT SEIZED MATERIAL AND ALSO SUBMISSION MADE BY THE ASSESSEE IT IS CLEAR THAT ASSESSEE HAS MADE TOTAL PAYMENT FOR 903 ANUSHRUTI FLATS IN THE ASSESSMENT YEAR 2003 - 04 & 2004 - 05 AND POSSESSION OF THE SAME WAS GIVEN TO HIM IN A.Y.2004 - 05 ONLY. SINCE, NO DOCUMENTARY EVIDENCES/PROOF WAS SUBMITTED BY I.T. (SS) A NO. 574 TO 576 /AHD/20 10 A.Y. 1999 - 2000, 2001 - 02 & 2004 - 05 PAGE NO ACIT VS. SHRI AMTHABHAI V. DESAI 11 THE ASSESSEE OR FOUND DURING THE COURSE OF SEARCH IT IS SUGGEST THAT PAYMENT WAS MADE IN WHICH YE AR. IT CAN BE PRESUMED THAT OTHER PAYMENTS (IN ADDITION TO 5.75 LAKHS) WAS ALSO MADE IN THE F.Y.2003 - 04 ONLY. SINCE ALL THESE PAYMENTS WERE NOT DISCLOSED TO THE DEPARTMENT SAME ARE LIABLE TO BE ADDED IN THE TOTAL INCOME OF THE ASSESSEE AS UNDISCLOSED INVE STMENT/EXPENSES. IN VIEW OF THE ABOVE DISCUSSION MADE RS. 25,00,000/ - WHICH INCLUDES RS. 5.75 LACS TOWARDS PURCHASE OF 903 ANUSHRUI FLATS IS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. IN VIEW OF THE ABOVE STATED FACTS AND FINDINGS, THE ASSESSING OFFICER CONCLUDED THAT OUT OF UNACCOUNTED INVESTMENT/EXPENSES OF RS. 25 , 90 ,000 / WAS MADE OUT OF THE UNACCOUNTED INCOME, THEREFORE , UNACCOUNTED INCOME OF RS. 25 ,00000 / - LACS WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 7. AGGRIEVED AGAINST THIS, THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAD DELETED THE ADDITION BY OBSERVING AS UNDER: - ' THE APPELLANT HAS ALSO FILED A COPY OF THE IMPUGNED DOCUMENT AND ITS FREE ENGLISH TRANSCRIPTION, AT PAGES 45 TO 47 OF THE PAPER BOOK. THE PERUSAL OF THE COPY OF THE MOU DATED 18/6/1998, INDICATES THAT THE SECOND LINE OF THE MOU STATING THE NAME OF THE APPELLANT IS APPARENTLY INTERPOLATED .LATER, IN DIFFERENT HAND WRITING. THE APPELLANT HAS POINTED OUT TO THE OTHER ANOMALIES (REPRODUCED IN PARA 7 AND PA RA - 9 OF THIS ORDER) IN RESPECT OF THIS MOU. THE APPELLANT HAD FILED AFFIDAVIT DATED 28/11/2000, WHICH WAS CLARIFICATORY IN NATURE. THE AO DID NOT EXAMINE THE DEPONENT/APPELLANT AND ALSO DID NOT CONTROVERT THE AFFIRMATIONS MADE THEREIN. IN THE FACTS AND CIR CUMSTANCES, THE RATIO OF THE DECISIONS CITED BY THE APPELLANT, IS ALSO APPLICABLE. THUS ON A HOLISTIC CONSIDERATION OF THE FACTS AND FOR THE REASONS DISCUSSED (PARA 8 OF THIS ORDER) IN RESPECT OF THE OTHER ADDITIONS, THE ADDITION OF RS. 25 LAKHS MADE BY TH E A.O. IS NOT SUSTAINABLE IN A.Y. 2004 - 05 AND IS THEREFORE DELETED. I.T. (SS) A NO. 574 TO 576 /AHD/20 10 A.Y. 1999 - 2000, 2001 - 02 & 2004 - 05 PAGE NO ACIT VS. SHRI AMTHABHAI V. DESAI 12 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD CAREFULLY WE HAVE NOTICED THAT LD. CIT(A) HAS DELETED THE ADDITION MADE BY THE ASSESSING OFFICER MAINLY BY OB SERVING THAT : - (I) T HERE IS NO EVIDENCE OF THE APPELLANT HAVING BEEN PROVIDED, WITH COPIES OF THE STATEMENTS OF SHRI VIKAS SHAH AND/OR THE OPPORTUNITY TO CROSS EXAMINE HIM. (II) T HE VERACITY OF THE STATEMENT OF SHRI VIKAS SHAH, IN RESPECT OF THE A SSESSE E WAS NOT ESTABLISHED. (III) THE A SSESSEE IN HIS AFFIDAVIT DATED 28/11/2006, FILED BEFORE THE AO, HAD POINTED OUT THAT HE HAD THREE DAUGHTERS AND HE WAS TENDING TO CATTLE AND SELLING MILK AND HAD INCOME FROM AGRICULTURE. (IV) THE A SSESSEE LIVED IN RABARI COLONY ALONG WITH SIX MINOR CHILDREN. HE STATED IN THE AFFIDAVIT THAT HE HAD NOT RECEIVED/PAID ANY AMOUNT FROM TO VIKAS SHAH, AS WAS MENTIONED IN THE SEIZED DOCUMENTS. (VI) THE AO HAS NOT CHOSEN TO EXAMINE THE DEPONENT / A SSESSEE IN RESPECT OF HIS AFFIDA VIT AND HAS NOT CONTROVERTED IT. ON THE CONTRADICTORY TO THE FINDING OF THE LD. CIT(A) WE HAVE NOTICED THE FOLLOWING FACTS: - (I) T HERE WAS NO EVIDENCE AS PER ASSESSMENT ORDER AND AS PER THE SUBMISSION OF THE ASSESSEE THAT HE WAS DENIED THE COPIES OF THE STATEMENTS OF SHRI VIKAS SHAH BY THE ASSESSING OFFICER. (II) THERE WAS NO EVIDENCE THAT ASSESSEE HAD DEMANDED CROSS EXAMIN ATION WHICH WAS DENIED BY THE ASSESSING OFFICER. I.T. (SS) A NO. 574 TO 576 /AHD/20 10 A.Y. 1999 - 2000, 2001 - 02 & 2004 - 05 PAGE NO ACIT VS. SHRI AMTHABHAI V. DESAI 13 (III) AS PER THE ASSESSMENT ORDER IN THE AFFIDAVIT THE ASSESEE HAS SIMPLY STATE D THAT HE HAD NOT RECEIVED ANY AMOUNT. (IV) WE HAVE FURTHER NOTICED THAT THE LD.CIT(A) HAD NOT DESIRED ANY REMAND REPORT FROM THE ASSESSING OFFICER FOR CLARIFICATION OF ANY FACTS. (V) T HE ASSESSEE HAS HIMSELF ADMITTED IN THE AFFIDAVIT THAT HE HAS BEEN EM PLOYEE OF VIKAS A SHAH. HE ALSO ADMITTED THAT HE HAS BEEN ENGAGED IN THE BUSINESS OF DALALI/ BROKERAGE OF LAND. (VI) DURING THE COURSE OF POST SEARCH INVESTIGATION TH E ASSESSEE HAS ADMITTED THAT HE HAD PURCHASED A FLAT NO.903 AT ANUSHRUTI IN THE NAME OF HIS DAUGHTER REKHA A. DESAI FROM SH.VIKAS A SHAH . A S PER MEMORANDUM OF UNDERSTANDING DATED 18 - 06 - 1988 BETWEEN ASSESSEE, CHHAGANBHAI V.DESAI AND VIKAS A. SHAH THAT ASSESSSEE WAS TO PAY AN AMOUNT OF RS. 25 LACS TO VIKAS A SHAH FOR TWO FLATS OF RS. 14.8 LACS AND OTHER CONSIDERATION. (VII) FURTHER THE ASSESEEE DURING THE POST REACH INVESTIGATION HAD ADMITTED THAT HE HAS MADE PAYMENT OF RS. 5.75 LACS AGAINST PURCHASE OF FLAT NO. 903 AT ANUKRITI. IN THE NAME HIS DAUGHTER REKHABEN A. DESAI AND SAID FLATS WERE CO NSTRUCTED BY VIKAS A. SHAH AND MANSI BUILDERS. AFTER CONSIDERING THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE WE OBSERVED THAT LEARNED CIT APPEAL HAS NOT DECIDED THE APPEAL OF THE ASSESSEE ON MERIT AND THE FACTS REPORTED BY THE ASSESSING OFFICER WERE NOT PROPERLY EXTRAPOLATED BY THE LD.CIT(A) . FURTHER IT IS ALSO EVIDENT FROM THE LETTER DATED 16TH JANUARY,2014 OF THE LD. DR TO THE ASSESSING OFFICER THAT THE BENCH WANTED TO KNOW ABOUT THE ADDITION MADE IN THE CASE OF SH. VIKAS A SHAH IN RESPECT OF TH E SAME SEIZED I.T. (SS) A NO. 574 TO 576 /AHD/20 10 A.Y. 1999 - 2000, 2001 - 02 & 2004 - 05 PAGE NO ACIT VS. SHRI AMTHABHAI V. DESAI 14 MATERIAL ETC . AFTER CONSIDERING THE ABOVE DICHOTOMY IN THE FACTS AND FINDING IT IS NOT FEASIBLE TO DECIDE THIS CASE ON MERIT AT THIS STAGE. THEREFORE, IN THE INTEREST OF JUSTICE WE RESTORE THIS MATTER TO THE FILE OF ASSESSING OFFICER TO D ECIDE IT A FRESH AFTER TAKING THE FOLLOWING STEPS: - (I) TO PROVIDE THE COPIES OF STATEMENTS TO THE ASSESS IF IT WAS NOT PROVIDED AS PER THE REQUISITION OF THE ASSESSEE. (II) TO PROVIDE THE OPPORTUNITIES OF CROSS EXAMINATION TO THE ASSESSEE. (III) TO EXAM INE THE ASSESSEE ON BASIS OF ANY AFFIDAVIT SUBMITTED BY HIM IN SUPPORT OF ANY CLAIM. (IV) TO CONSIDER AND EXAMINE THE FACTS ON THE BASIS IF ANY ADDITION WAS MADE IN THE CASE OF SH.VIKAS A. SHAH IN RESPECT OF THE SAME SEIZED MATERIAL ETC. 9. IN THE RESULT, ALL THE THREE APPEAL S OF THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSE. ORDER PR ONOUNCED IN THE OPEN C OURT ON 24 - 05 - 201 7 SD/ - SD/ - ( S.S. GODARA ) ( AMARJIT SINGH ) JUDICIAL MEMBER A CCOUNTANT MEMBER AHMEDABAD : DATED 24 /05 /2017 / COPY OF ORDER FORWARDED TO: - I.T. (SS) A NO. 574 TO 576 /AHD/20 10 A.Y. 1999 - 2000, 2001 - 02 & 2004 - 05 PAGE NO ACIT VS. SHRI AMTHABHAI V. DESAI 15 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,