Appeal details
Counselvise Citation
[2014] 122 COUNSELVISE.COM (IT) 0121 (ITAT-AHMEDABAD)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
3 year(s) 8 month(s) 29 day(s)
Appellant
Respondent
Appeal Type
Income Tax (Search & Seizure) Appeal
Pronouncement Date
04-04-2014
Appeal Filed By
Department
Bench Allotted
C
Next Hearing Date
01-04-2014
Assessment Year
2006-2007
Appeal Filed On
06-07-2010
Judgement Text
, , , , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD . .. . . . . . , , , , ! '# ! '# ! '# ! '#, , , , $ $ $ $ BEFORE SHRI N. S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER IT(SS)A/ CO NO. ASSESSMENT YEAR APPELLANT RESPONDENT IT(SS)A NO. 580/AHD/2010 2005-06 DY. CIT, CENTRAL CIRCLE- 1(3), AHMEDABAD. SHRI HARESH R. VASANI 25, KRISHNA NAGAR SOCIETY, OPP. NARAN CHAMBERS, T.B. NAGAR ROAD, AHMEDABAD. PAN: AAKPV9716K IT(SS)A NO. 581/AHD/2010 2006-07 REVENUE ASSESSEE CO NO. 241/AHD/2010 2005-06 ASSESSEE REVENUE CO NO. 242/AHD/2010 2006-07 ASSESSEE REVENUE REVENUE BY : SH. T.P. KRISHNA KUMAR, DR ASSESSEE(S) BY : SH. VARTIK R. CHOKSI, AR !% & #'/ // / DATE OF HEARING : 01/04/2014 )*+ & #' / DATE OF PRONOUNCEMENT : 04/04/2014 , , , ,/ // / O R D E R PER SHRI N.S. SAINI, ACCOUNTANT MEMBER: THESE ARE THE APPEALS FILED BY THE REVENUE AND CROS S- OBJECTIONS FILED BY THE ASSESSEE AGAINST THE SEPARA TE ORDERS OF THE CIT(A)-I, AHMEDABAD FOR ASSESSMENT YEARS 2005-06 AN D 2006-07. 2. THE ONLY GROUND OF APPEAL TAKEN BY THE REVENUE IN ASSESSMENT YEAR 2005-06 IS THAT THE LD. CIT(A) ERRE D IN DELETING IT(SS)A NOS. 580 & 5 81 OF 2010 AND CO NOS. 240 & 241 OF 2010 HARESH R. VASANI VS. DCIT, CC-1(3), AHD FOR A.Y. 2005-06 & 2006- 07 - 2 - THE ADDITION OF RS 31,68,750/- MADE ON ACCOUNT OF U NEXPLAINED INVESTMENT U/S 69 OF THE I.T. ACT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS ING OFFICER OBSERVED THAT THE PAPERS FOUND FROM THE RESIDENTIAL PREMISES OF THE ASSESSEE SEIZED AND MARKED AS ANNEXURE A-2 PAGE NO. 4 READS AS UNDER: 4/7/2004 KALUBHAI 12,24,000 19,44,750 4. THE ASSESSING OFFICER OBSERVED THAT IT WAS MATT ER OF COMMON SENSE THAT NOBODY WILL MAKE UNNECESSARY JOTT INGS IN THE PERSONAL DIARY WHICH IS MAINTAINED FOR CONFIDENTIAL THINGS. HE, THEREFORE, INFERRED THAT THE SAID ENTRIES RELATE TO ADVANCE OR PAYMENT MADE TO ONE KALUBHAI ON 04.07.2004 AND THER EFORE, TREATED THE SAME AS UNEXPLAINED INVESTMENT AND MADE ADDITION FOR RS 31,68,750/-. 5. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING O FFICER, THE ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A) AND SUBMITTED AS UNDER: 4.1 THE APPELLANT, ON THIS ISSUE, SUBMITTED THAT DU RING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFF ICER HAD NEITHER ASKED ANY EXPLANATION NOR ANY SHOW CAUSE NO TICE WAS SERVED REGARDING AFORESAID NOTING AND JOTTINGS FOUND IN SEIZED DOCUMENT. HENCE THE ENTIRE ADDITION WAS WITH OUT GRANTING ANY OPPORTUNITY OF BEING HEARD AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE, AND THEREFORE WAS UN JUSTIFIED. IT WAS STATED THAT EXPLANATION OF AFORESAID SEIZED PAP ER WAS ASKED IN CASE OF KIRANBHAI R. VASANI, DIFFERENT LEG AL IDENTITY: THE APPELLANT HAS REFERRED TO THE EXPLANATION GIVEN IN CASE OF KIRANBHAI R. VASANI WHICH WAS AS UNDER: IT(SS)A NOS. 580 & 5 81 OF 2010 AND CO NOS. 240 & 241 OF 2010 HARESH R. VASANI VS. DCIT, CC-1(3), AHD FOR A.Y. 2005-06 & 2006- 07 - 3 - 'AS PER POINT NO. 12 YOUR GOOD SELVES HAVE ASKED TH E EXPLANATION OF PAGE NO. 4 OF ANNEXURE A-2 SEIZED FR OM 24/25, KRISHNANAGAR SHOWS NAME OF KALUBHAI 31.68.75 0/-. IN THIS MATTER, I STATE THAT THE NOTING WHICH YOUR GOOD SELVES REFERRING ON THE SAID PAPER CONTAINS THE NOTING FIG URE OF 12.24.000/- AND 19,44,750. IT IS STATED THAT IT IS NOT IN MY HAND WRITING. IT IS ROUGH NOTING AND FROM THE WRITI NG IT SEEMS THAT SOME LABOUR MAY HAVE WRITTEN THE FIGURES. U IS ALSO STATED THAT AGAINST THE FIGURE NOTHING MENTIONED LI KE RECEIPT/PAYMENT WHICH RESULTS INCOME OR EXPENSES. T HUS THE PAGE REFERRED IS DUMP PAPER AND NO FINANCIAL RELEVA NCE WHICH RESULTS INTO UNACCOUNTED INCOME OR UNACCOUNTE D EXPENSES.' APART FROM THIS, THE APPELLANT SUBMITTED AS UNDER- '1.4 WITHOUT PREJUDICE TO THE ABOVE, APPELLANT ST ATES DURING THE COURSE OF SEARCH, POST SEARCH AND ASSESSMENT PROCEEDINGS, IT HAD REPEATEDLY STATED THAT THE FIGU RES MENTIONED ON PAGE NO. 4 OF ANNEXURE - A/2 SEIZED FR OM THE RESIDENTIAL PREMISES OF APPELLANT CONTAINS ONLY NOT ING AND JOTTINGS PERTAINING TO FIGURES OF 12,24,000 AND 19, 44,750 ARE JUST ROUGH JOTTINGS AND HAVE NO IDEA ABOUT THE FIGU RES. APART FROM ABOVE, APPELLANT STATES AS UNDER WHY ADDITION SHOULD NOT BE MADE.. (I) THE PAPER IN QUESTION DOES NOT INDICATE THAT AN Y TRANSACTION HAD EVER TAKEN PLACE BECAUSE IT DOES NO T CONTAIN ANY INFORMATION AS TO WHAT WAS THE NATURE O F TRANSACTION. (II) IT DOES NOT CONTAIN ANY INFORMATION AS TO WHAT WAS THE NATURE OF THE TRANSACTION, IF AT ALL, ANY SUCH TRANSACTION TOOK PLACE, WHO WERE THE PARTIES TO THE TRANSACTION. EVEN, NAME OF ASSESSEE OR OTHER FAMILY MEMBERS ARE NOT MENTIONED. (III) THE ASSESSEE SUBMITS THAT AFORESAID LOOSE PAP ER IS NOT IN THE HANDWRITING OF IT. (IV) WHAT THE FIGURES NOTED IN THE PIECE OF PAPER R EPRESENT HAS NO RELEVANCE TO THE DETERMINATION OF INCOME IN THE HANDS OF THE ASSESSEE. (V) THE SAID LOOSE PAPER DOES NOT INDICATE THAT WHE THER IT PERTAINS AN ASSET, LIABILITY, LOAN, ADVANCE OR ANY OTHER DETAIL HENCE OBSERVATION/PRESUMPTION OF AO THAT IT RELATES TO ADVANCES/PAYMENT IS INCORRECT. THE LOOSE PAPER IS JUST A DUMB PIECE OF MATERIAL AND THEREFOR E SHOULD BE IGNORED. IN VIEW OF AFORESAID FACTS, MERE NOTING ON A LOOSE SHEET FOUND FROM THE RESIDENTIAL REMISE CANNOT LEAD TO AD DITION IN THE HANDS OF THE APPELLANT. IT(SS)A NOS. 580 & 5 81 OF 2010 AND CO NOS. 240 & 241 OF 2010 HARESH R. VASANI VS. DCIT, CC-1(3), AHD FOR A.Y. 2005-06 & 2006- 07 - 4 - 1.5 THE APPELLANT FURTHER SUBMITS THAT ENTIRE ADDIT ION HAVE BEEN MADE BY THE ASSESSING OFFICER ONLY ON PRESUMPTION AND SURMISES AND WITHOUT BRINGING ANY CORROBORATIVE EVIDENCE FOR ALLEGED UNEXPLAINED INVE STMENT OF RS.31,68,750. FURTHER ON THE PERUSAL OF THE ASSESSM ENT ORDER, YOUR GOOD SELVES WOULD APPRECIATE THE FACT T HAT EVEN WHILE MAKING THE IMPUGNED ADDITION THE ASSESSING OF FICER HAS NOT BROUGHT OUT ANY OTHER CORROBORATIVE EVIDENC E TO THAT APPELLANT HAS ACTUALLY MADE INVESTMENT OF RS. 31.68 .750. THUS IN VIEW OF THE FACT THAT EXCEPT THE NOTINGS ON THE LOOSE PAPER NO OTHER EVIDENCE HI AS BEEN FORWARDED BY THE ASSESSING OFFICER SO AS TO ALLEGE THAT RS. 31.68.75 0/- HAS BEEN ACTUALLY PAID TO MR. KALUBHAI ON 4.7.2004, THE IMPUGNED ADDITION MADE BY THE ASSESSING OFFICER DES ERVES TO BE DELETED. IN THIS CONNECTION THE APPELLANT RELIES ON FOLLOWING: (I) DECISION OF DELHI TRIBUNAL IN CASE OF MAHAN FOO DS LTD. V. CIT (2009) 27 DTR 185, WHEREIN THE HON'BLE ITAT HAVE HELD AS UNDER: SEARCH AND SEIZURE - BLOCK ASSESSMENT COMPUTATION OF UNDISCLOSED INCOME ALTHOUGH THE CONTENTS OF THE RE LEVANT SEIZED DOCUMENTS SHOW THAT THE AMOUNTS MENTIONED TH EREIN RELATE TO SOME EXPENDITURE, IN THE ABSENCE OF ANY O THER EVIDENCE FOUND DURING THE COURSE OF SEARCH OR BROUG HT ON RECORD BY THE AO TO SHOW THAT THE SAID EXPENDITURE WAS ACTUALLY INCURRED BY THE ASSESSEE, THE SAME CANNOT BE ADDED TO THE UNDISCLOSED INCOME OF THE ASSESSEE BY INVOKI NG PROVISIONS OF S. 69C-ASSESSEE EXPLAINED THAT THE SA ID ENTRIES REPRESENTED ESTIMATES MADE BY EMPLOYEES IN RESPECT OF PROPOSED EXPENDITURE THERE IS NO EVIDENCE ON RECO RD TO REBUT/CONTROVERT THE SAID EXPLANATION - ADDITIONS N OT SUSTAINABLE (II) DECISION OF GUJARAT HIGH COURT IN CASE OF DCIT V. JIVANLAL NEBHUMAL (HUF) [2004] 134 TAXMAN 660 (GUJ. ) WHEREIN THE HON'BLE HIGH COURT HAVE HELD AS UNDER, 'SECTION 69 OF THE INCOME-TAX ACT', 1961 - UNEXPLAI NED INVESTMENTS - TRIBUNAL HAVING R OUND THAT THERE WAS NO MATERIAL ON RECORD TO INDICATE THAT ASSESSEE - HUF, WHOSE FAMILY HAD 50 PER CENT SHARE IN J COMPANY, HAD IN F ACT PAID ANY 'ON-MONEY' TO SAID J COMPANY IN RESPECT OF SHOP S PURCHASED BY THEM OVER AND ABOVE AMOUNT RECORDED IN THEIR BOOKS OF ACCOUNT, DELETED ADDITION MADE BY ASSESSIN G OFFICER AND CONFIRMED BY COMMISSIONER (APPEALS), ON ACCOUNT OF UNEXPLAINED INVESTMENTS AND ALSO REDUCED ADDITION I N RESPECT OF LOW HOUSEHOLD EXPENSES - FURTHER, QUESTI ON WITH REGARD TO LEVY OF INTEREST UNDER SECTION 139(8)/215 WAS RESTORED BACK TO FILE OF ASSESSING OFFICER FOR FRES H IT(SS)A NOS. 580 & 5 81 OF 2010 AND CO NOS. 240 & 241 OF 2010 HARESH R. VASANI VS. DCIT, CC-1(3), AHD FOR A.Y. 2005-06 & 2006- 07 - 5 - ADJUDICATION IN ACCORDANCE WITH LAW AFTER GIVING OP PORTUNITY OF HEARING TO ASSESSEE - WHETHER SINCE TRIBUNAL HAD APPRECIATED FACTS AND EVIDENCE ON RECORD AND HAD CO ME TO CONCLUSION, NO SUBSTANTIAL QUESTION OF LAW, MUCH LE SS ANY QUESTION OF LAW, AROSE OUT OF TRIBUNAL'S ORDER - HE LD, YES (III) THE APPELLANT FURTHER SUBMITS THAT AS FAR AS THE ADDITION MADE ON THE BASIS OF THE NOTINGS ON THE LO OSE PAPER IS CONCERNED THE GUJARAT HIGH COURT HAS RECENTLY IN CASE OF CIT VS. MAULIK KUMAR K. SHAH 307 ITR 137 HAD HELD H AT LOOSE PAPERS CONTAINING ROUGH ESTIMATES CANNOT BE R ELIED UPON TO MAKE ADDITION ON ACCOUNT OF UNDISCLOSED INC OME IN THE ABSENCE OF ANY INDEPENDENT EVIDENCE. (IV) FURTHER THERE ARE ALSO CERTAIN OTHER LEGAL PRE CEDENTS WHICH CLARIFIES HAT LOOSE PAPERS ALONE CANNOT BE MA DE BASIS FOR ADDITION. WHERE LOOSE SHEETS ARE FOUND, THERE I S THE USUAL INTERFERENCE OF THE ASSESSING OFFICER, THAT THEY RE PRESENT CONCEALED TRANSACTIONS, SUCH INTERFERENCE DOES NOT READILY FOLLOW. SUCH INTERFERENCE CAN BE POSITIVELY MADE ON LY AFTER IDENTIFICATION OF PAPERS AND AFTER DUE VERIFICATION S. FIGURES THEREIN COULD NOT BE LIGHTLY INFERRED TO REPRESENT UNACCOUNTED INCOME, UNLESS THERE IS SOMETHING MORE TO IT. IT WAS HELD BY A THIRD MEMBER ON A DIFFERENCE BETWEEN THE OTHER MEMBERS OF THE TRIBUNAL IN GOYAL (S.P.) V DCI T (2004) 269 ITR 496 (HP). A SIMILAR VIEW WAS KEN AGAIN BY A THIRD MEMBER IN BABROS MACHINERY MANUFACTURES PVT. LTD V DCIT (2004) 269 ITR (AT) 36 (AHD). (V) THE APPELLANT STATES THAT THE HONOURABLE SUPREM E COURT IN THE CASE OF MOHD. YUSUF & ANR. VS.D & ANR. AIR 1968 BOM 112 HAS OBSERVED THAT THE CONTENT CONTAINE D IN DOCUMENT IS HEARSAY EVIDENCE UNLESS THE WRITER THER EOF EXAMINED BEFORE THE COURT. THE HONOURABLE COURT, TH EREFORE, HELD THAT ATTEMPT TO PROVE THE CONTENTS OF THE DOCU MENT BY PROVING THE SIGNATURE OF THE HANDWRITING OF THE AUT HOR THEREOF IS TO SET AT NAUGHT, THE WELL RECOGNIZED RU LE AT HEARSAY EVIDENCE CANNOT BE ADMITTED. IF WE CONSIDER THE SAID PIECE OF PAPER SEIZED DURING SEARCH IN LIGHT OF THE DEFINITION OF THE WORD 'DOCUMENT' IS GIVEN IN THE INDIAN EVIDE NCE ACT AND GENERAL CLAUSES ACT AND TRUTHFULNESS OF THE CON TENTS THEREOF IN LIGHT OF THE AFORECITED DECISIONS OF THE HONOURABLE SUPREME COURT, WE FIND THAT THE SAID PAPER CONTAINS JOTTINGS OF CERTAIN FIGURES BY THE SAME DOES NOT DESCRIBE OR EXPRESS THE SUBSTANCE OF ANY TRANSACTION AND EVEN IF THE SA ID PAPER HAS BEEN SEIZED FROM THE POSSESSION OF THE ASSESSEE THE CONTENTS THEREOF ARE NOT CAPABLE OF THE DESCRIBING THE TRANSACTIONS THE WAY THE ASSESSING OFFICER HAS DECI PHERED THEM WITHOUT SUPPORT OF CORROBORATIVE EVIDENCE OF T HE PARTIES ATTRIBUTED TO THE ALLEGED TRANSACTION. THE SAID PAPER, IT(SS)A NOS. 580 & 5 81 OF 2010 AND CO NOS. 240 & 241 OF 2010 HARESH R. VASANI VS. DCIT, CC-1(3), AHD FOR A.Y. 2005-06 & 2006- 07 - 6 - THEREFORE, DOES NOT COME WITHIN THE COMPASS OF THE DEFINITION OF THE WORD 'DOCUMENT 1 TO BE USED AS EVIDENCE. THE PAPER SEIZED, THEREFORE, HAS NO EVIDENTIARY VAL UE AND ACCORDINGLY THE SAME CANNOT FORM THE BASIS FOR ASSE SSING THE UNDISCLOSED INCOME. - (VI) DECISION OF DELHI ITAT IN CASE OF SMC BROKERS LIMITED V/S DCIT 109 TTJ 700 WHEREIN TRIBUNAL HAS HELD THAT DIARY SEIZED WAS NOT CONTAINING ANY EVIDENCE REGARDING AN Y RECEIPTS OF MONEY BY WAY OF CHEQUES OF RS. 50,00,00 0 EACH AND ALSO THE DIARY WAS NOT WRITTEN BY ASSESSEE OR H IS EMPLOYEES. THERE WAS NO EVIDENCE ON RECORD TO SUBST ANTIATE THAT ASSESSEE HAS EARNED ANY UNDISCLOSED INCOME HEN CE ADDITION BASED ON DUMB DOCUMENT IS DELETED. (VII) SIMILARLY, IT WAS OBSERVED IN ATULKUMAR JAIN VS DCIT 64 TTJ 786 THAT ADDITION BASED ON CHIT OF PAPER, SU RMISES, CONJECTURE, ETC. COULD NOT BE SUSTAINED IN THE ABSE NCE OF ANY CORROBORATIVE MATERIAL EVIDENCE. THE APPELLANT STATES THAT IN CASE BEFORE HAND ALSO NO EVIDENCE IS PRESENT EXCEPT THE NOTINGS ON THE LOOSE PAPER SO AS TO ALLEGE THAT THE APPELLANT HAS MADE ANY INVEST MENT OUTSIDE THE BOOKS OF ACCOUNTS HENCE IN VIEW OF THE ABOVE MENTIONED JUDICIAL PRONOUNCEMENTS AND THE FACTS OF THE CASE OF THE APPELLANT, IT IS SUBMITTED THAT THE ADDITION MADE BY THE ASSESSING OFFICER ONLY ON THE BASIS OF PRESUMPT IONS AND WITHOUT BRINGING ON ANY CORROBORATIVE EVIDENCE IN S UPPORT OF THE SAME, IS UNWARRANTED AND UNJUSTIFIED AND HENCE THE SAME DESERVES TO BE DELETED.' 6. THE LD. CIT(A) AFTER CONSIDERING THE ABOVE SUBM ISSIONS OF THE ASSESSEE DELETED THE ADDITION AND WHILE DOIN G SO, HELD AS UNDER: 4.3 I NAVE CAREFULLY CONSIDERED THE ASSESSMENT ORDE R AND THE ABOVE SUBMISSIONS. THE ASSESSING OFFICER HAS MA DE THE ADDITION FOR THE ONLY REASON THAT AS PER THE LOOSE PAPER FOUND, THE APPELLANT HAS MADE ADVANCES OR PAYMENT T O ONE KALUBHAI OF THE IMPUGNED AMOUNT. HOWEVER, IT IS SEE N THAT EXCEPT THE SEIZED MATERIAL, THE ASSESSING OFFICER H AS NOT INDEPENDENTLY ESTABLISHED THAT ANY SUCH TRANSACTION HAS IN FACT, TAKEN PLACE. FROM THE PERUSAL OF THE SEIZED M ATERIAL, IT IS ALSO NOT CLEAR WHETHER THE SAME PERTAINED TO AN ASSET, LIABILITY, LOAN, ADVANCE OR ANY OTHER DETAIL. THERE IS NO OTHER DOCUMENT O| EVIDENCE TO SUGGEST THAT THE ASSESSEE H AS ADVANCES/ PAID A SUM OF RS.31,68,750/- TO ONE KALUB HAI. IT(SS)A NOS. 580 & 5 81 OF 2010 AND CO NOS. 240 & 241 OF 2010 HARESH R. VASANI VS. DCIT, CC-1(3), AHD FOR A.Y. 2005-06 & 2006- 07 - 7 - HENCE THERE IS NO JUSTIFICATION FOR PRESUMING THAT THE APPELLANT MUST HAVE PAID A SUM OF RS.31,68,750/-. T HE ASSESSING OFFICER HAS ALSO NOT CARRIED OUT ANY INQU IRY WITH THE OTHER PARTY OF THE TRANSACTION TO FIND OUT THE FACTS AND HAS SIMPLY REJECTED THE EXPLANATION OF THE APPELLAN T AND ADDITION HAS BEEN MADE ON ESTIMATE BASIS. THEREFORE , CONSIDERING THE FACTS OF THE CASE, I AM OF THE VIEW THAT THERE IS NO JUSTIFICATION FOR MAKING THE ADDITION ON MERE LY PRESUMPTIVE BASIS. ACCORDINGLY, THE ADDITION OF RS.31,68,750/- IS DIRECTED TO BE DELETED. 7. THE LD. DR SUPPORTED THE ORDER OF THE ASSESSING OFFICER. 8. THE LD. AR OF THE ASSESSEE RELIED ON HIS SUBMIS SIONS MADE BEFORE LD. CIT(A) AND SUPPORTED THE ORDER OF T HE LD. CIT(A). 9. WE FIND THAT THE LD. DR COULD NOT POINT OUT ANY SPECIFIC ERROR IN THE ABOVE QUOTED ORDER OF THE LD. CIT(A). THE LD. DR COULD NOT BRING ANY MATERIAL BEFORE US TO SHOW THAT RS 31 ,68,750/- WAS ANY ACTUAL TRANSACTION MADE BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION AND THE RELEVANT SEIZED DOCUMENT WAS DUMB DOCUMENT HAVING NO CORROBORATIVE MATERIAL FOUND. W E, THEREFORE, DO NOT FIND ANY GOOD REASON TO INTERFERE WITH THE O RDER OF THE LD. CIT(A), AND THEREFORE, THE SAME IS CONFIRMED AND TH E GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 10. IN ASSESSMENT YEAR 2006-07, GROUND NO. 1 OF TH E APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A) DELETING THE ADDITION OF RS 3,44,497/- MADE ON ACCO UNT OF UNACCOUNTED INVESTMENT U/S 69B OF THE ACT. 11. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSES SING OFFICER OBSERVED THAT THE INVESTMENT SHOWN BY THE ASSESSEE IN THE IT(SS)A NOS. 580 & 5 81 OF 2010 AND CO NOS. 240 & 241 OF 2010 HARESH R. VASANI VS. DCIT, CC-1(3), AHD FOR A.Y. 2005-06 & 2006- 07 - 8 - PROPERTY SITUATED AT B-6, SHABRI KUTIR BUNGALOW, VA STRAPUR MIGHT BE MORE THAN THE VALUE OF PROPERTY SHOWN BY THE ASS ESSEE. HE REFERRED THE MATTER TO THE DVO TO DETERMINE THE VAL UE OF THE PROPERTY U/S 142A OF THE INCOME TAX ACT ON 31.08.20 08. THE DVO GAVE THE REPORT ON 11.12.2008 DETERMINING THE VALUE AT RS 25,45,847/-. THE ASSESSEE OBJECTED TO THE VALUATIO N MADE BY THE DVO ON THE GROUND THAT THE VALUATION WAS DONE AT CU RRENT MARKET RATE AND THAT THE METHOD ADOPTED FOR THE VALUATION WAS FAULTY. THE ASSESSING OFFICE BRUSHED ASIDE THE OBJECTIONS OF TH E ASSESSEE OBSERVING THAT THEY ARE NOT JUSTIFIED ON THE GROUND THAT THE SAME HAS BEEN CONSIDERED BY THE VALUATION OFFICER IN HIS REPORT. THE ASSESSING OFFICER FURTHER OBSERVED THAT DVO HAD STA TED THAT THE ASSESSEE HAS NOT ACCOUNTED FOR FULL QUANTITY OF VAR IOUS MATERIALS AND HAD TAKEN LOWER RATES FOR MATERIAL AND LABOUR. THEREFORE, THE ASSESSING OFFICER HELD THAT CONSIDERING THESE FACTO RS AND THE FACTORS AFFECTING THE LAND RATES, LOCATION, TIME LAG ETC. T HE VALUATION OFFICER CORRECTLY VALUED THE PROPERTY AT RS 25,45,847/-. H E OBSERVED THAT THE ASSESSEE HAD SHOWN THE INVESTMENT IN THE BUNGAL OW AT RS 22,01,350/- AND THEREFORE, MADE ADDITION OF THE DIF FERENCE AMOUNT OF RS 3,44,497/- AS UNEXPLAINED INVESTMENT BY THE A SSESSEE. 12. THE ASSESSEE FILED APPEAL BEFORE LD. CIT(A) AN D SUBMITTED AS UNDER: 5.1 THE APPELLANT, ON THIS POINT, SUBMITTED THAT H E HAD PURCHASED AFORESAID BUNGALOW FROM SH. BHARATBHAI AN D SMT. RESHABEN B. KAMDAR FOR RS 22,01M350/-. A SEARCH WA S CONDUCTED IN HIS CASE IN MAY 2006 AND ASSESSING OFF ICER HAS REFERRED TO VALUATION REPORT AFTER MORE THAN 2 YEAR S I.E. ON 21.08.2008 THOUGH NO EVIDENCE OF UNRECORDED EXPENDI TURE INCURRED/PAYMENT WAS FOUND DURING THE COURSE OF SEA RCH OR DURING THE ASSESSMENT PROCEEDINGS. THUS THE REFERE NCE TO DVO IS BAD IN LAW AND UNWARRANTED. THE APPELLANT I N THIS CONNECTION MADE REFERENCE TO THE DECISION OF ALLAHA BAD HIGH IT(SS)A NOS. 580 & 5 81 OF 2010 AND CO NOS. 240 & 241 OF 2010 HARESH R. VASANI VS. DCIT, CC-1(3), AHD FOR A.Y. 2005-06 & 2006- 07 - 9 - COURT: LUKHNOW BEHCH IN CASE OF CIT V/S B. K. AGRAW AL (2009) 227 CTR (ALL) 173 AND DECISION OF DELHI HIGH COURT IN CASE OF COMMISSIONER OF INCOME TAX V/S MANOJ JAIN 2 006- (287)-ITR -0285 -DEL. IT WAS SUBMITTED BY THE APPEL LANT THAT IT HAS MAINTAINED REGULAR BOOKS OF ACCOUNTS, A ND COPY OF ANNUAL ACCOUNTS ALONGWITH CAPITAL ACCOUNT OF ASSESS EE WERE FILED WITH ORIGINAL RETURN OF INCOME PRIOR TO SEARC H ACCORDING TO WHICH THE APPELLANT HAS SHOWN TOTAL INVESTMENT O F RS.22,01,350/- TOWARDS BUILDING PURCHASED DURING TH E YEAR. THE BOOKS WERE ALSO PRODUCED BEFORE THE A.O. FOR VERIFICATION, AND THE ASSESSING OFFICER HAS NOT POI NTED OUT ANY SINGLE DEFECTS IN SUCH BOOK'S OF ACCOUNTS AND A CCEPTED THE PAYMENT MADE TO SELLER OF BUNGALOW AS GENUINE TRANSACTIONS, HENCE, THERE WAS NO JUSTIFICATION IN CONSIDERING THE VALUE OF BUILDING AS PER DVO REPORT. 5.2 IT WAS ARGUED BY THE APPELLANT THAT THE ENTIRE PURCHASE DOCUMENT HAS BEEN REGISTERED WITH VALUATIO N OFFICER AND STAMP DUTY ON THE PROPERTY PURCHASED AN D STAMP DUTY COMPUTED ON PURCHASE DEED HAS BEEN UNDISPUTEDL Y ACCEPTED BY THE ASSESSING OFFICER SINCE THE ASSESSM ENT PROCEEDINGS WERE CARRIED ON. HENCE, IT WAS CLEAR TH AT ENTIRE TRANSACTIONS HAVE BEEN MADE AT JANTARI VALUE WHICH IS ACCEPTED BY SUB REGISTER. THE AO AND DVO HAS NO RIG HT TO SUBSTITUTE THE VALUE OF PURCHASE WITHOUT BRINGING A NY OTHER EVIDENCES OF UNACCOUNTED PAYMENT. THE APPELLANT IN THIS CONNECTION MADE REFERENCE TO THE DECISION OF MADRAS HIGH COURT IN CASE OF K. R. PALANISAMY & ORS. V. UNION O F INDIA & ORS. 2008-(306)-ITR -0061 -MAD. IT WAS ALSO CONTENDED THAT VALUATION IS VERY SUBJEC TIVE MATTER AND CHANGES ON PERSON TO PERSON BASIS. IT WA S STATED THAT THE DIFFERENCE BETWEEN ACTUAL COST .OF PURCHAS E AND FAIN VALUE ESTIMATED BY VALUER IS MINOR AMOUNT OF RS.3,4 4,497/- WHICH IS LESS THAN 15% OF VALUE DETERMINED BY DVO H ENCE THERE WAS NO JUSTIFICATION IN ADOPTING THE VALUE OF INVESTMENTS AS MADE BY DVO. RELIANCE WAS PLACED ON THE DECISION OF HARISH KANAYALAL THAWAKI & ORS. V. APPR OPRIATE AUTHORITY & ORS. 2009-(017)-DTR -0227 -BOM AND IN C ASE OF GOVKRDHANDAS ODHAVJI DHADKAN V. S. K. LAUL 2008-(30 4)- ITR -0168 -BOM. 5.3 APART FROM THE AFORESAID PRIMARY CONTENTIONS, T HE APPELLANT ALSO SUBMITTED AS UNDER: '2.5 WITHOUT PREJUDICE TO WHAT IS STATED ABOVE, APPELLANT VEHEMENTLY OBJECTS TO THE SAME ON THE FOLLOWING GRO UND AND ACCORDINGLY THE DVO'S REPORT IS VOID AB INITIO: IT(SS)A NOS. 580 & 5 81 OF 2010 AND CO NOS. 240 & 241 OF 2010 HARESH R. VASANI VS. DCIT, CC-1(3), AHD FOR A.Y. 2005-06 & 2006- 07 - 10 - (I) THE DVO HAS NOT GIVEN ANY COMPARABLE EVIDENCES SHOWING HIGHER VALUE OF DOCUMENT TO SUBSTITUTE ITS CLAIM THAT PURCHASE VALUE OF AFORESAID BUNGALOW IS RS.25,45,84 7/- AND NOT 22,01 ,350. HENCE SUCH VALUE CANNOT BE ADOPTED. (II) EVEN OTHERWISE, THE VALUATION OFFICER HAS ESTI MATED THE TOTAL VALUE OF THE PROPERTY IN DECEMBER-2005 AT RS.25,45,847. THE DEPARTMENTAL VALUATION OFFICER HA S CONSIDERED THE COST OF CONSTRUCTION AT RS 16,18,555 AND FROM THE SAME IT HAS GRANTED DEPRECIATION FOR THE BUILDI NG AS ON 8.12.2005 CONSIDERING THE TOTAL LIFE OF THE BUILDIN G AT 60 YEARS AT RS.2,30,644. THE ASSESSEE OBJECTS THE VALU ATION HAVING BEEN MADE AT THE CURRENT MARKET RATE. THE GOVERNMENT MUST HAVE AVAILABLE WITH IT THE RATES PR EVAILING IN THE YEAR 1996-97 WHEN THE PROPERTY WAS CONSTRUCT ED. IN PLACE OF VALUING THE PROPERTY AT CURRENT MARKET RAT E, AND THEN GRANTING DEPRECIATION AT A VERY SMALL PERCENTA GE (14.25% FOR 9 YEARS), THE CORRECT AND APPROPRIATE M ETHOD OF VALUATION WOULD HAVE BEEN TO ADD THE APPRECIATED VA LUE OF MATERIAL ON THE DATE OF PURCHASE OF PROPERTY TO THE VALUE OF PROPERTY ON THE DATE OF ITS CONSTRUCTION. BY ADOPTI NG THE SAID METHOD THE VALUE OF PROPERTY WOULD HAVE BEEN AROUND RS.22 LACS AS AGAINST RS.25.5 LACS ESTIMATED BY THE VALUE R. (III) THE APPELLANT HAS FURNISHED A COPY OF THE VAL UATION OF RS.9,32,779/- IN THE YEAR 1996-97. THE COST OF CONS TRUCTION AT THAT TIME WAS WORKED OUT AT RS.5,97,779/-. THE C OST OF CONSTRUCTION SHOULD BE ADJUSTED CONSIDERING SOME APPRECIATION IN THE COST OF CONSTRUCTION, BUT THE P ROPERTY CANNOT BE VALUED AT CURRENT MARKET RATE AND DEPRECI ATION CANNOT BE GRANTED THEREON TREATING THE LIFE OF PROP ERTY AT 60 YEARS. IN FACT, THE LIFE OF THE PROPERTY IS ONLY 35 YEARS. HENCE, THE ASSESSING OFFICER HAS ERRED IN VALUING T HE .TRUE LIFE OF THE PROPERTY. HENCE, THE DVO SHOULD HAVE THEREFO RE CONSIDERED THE HIGHER DEPRECIATION, AS THE QUALITY OF CONSTRUCTION IS NOT SO GOOD, THE PROPERTY HAVING BE EN CONSTRUCTED FOR SALE AND NOT FOR SELF RESIDENCE. (IV) PLINTH AREA RATE CONSIDERED BY THE VALUATION O FFICER PER SQUARE METER IS APPLICABLE TO FIRST-CLASS BUNGA LOWS CONSTRUCTED BY THE PRIVATE PARTIES IN THEIR OWN CAS E, WHILE IN THE PRESENT CASE THE PROPERTY CONSTRUCTED WAS ONLY FOR SALE AND MATERIAL USED THEREIN CANNOT BE OF THE HIGH QUA LITY, LIKE THOSE IN THE PRIVATE BUNGALOWS. IF THIS IS CONSIDER ED, THE ESTIMATE .WILL GO DOWN BY ABOUT 20%. 2.6 WITHOUT PREJUDICE TO WHAT IS STATED HEREIN ABOV E, APPELLANT STATES THAT AS REFERRED HEREIN ABOVE, APP ELLANT HAS MAINTAINED HIS BOOKS OF ACCOUNT WHEREIN AMOUNT PAID TO SELLER OF AFORESAID PROPERTY IS SHOWN AND NO UNACCO UNTED IT(SS)A NOS. 580 & 5 81 OF 2010 AND CO NOS. 240 & 241 OF 2010 HARESH R. VASANI VS. DCIT, CC-1(3), AHD FOR A.Y. 2005-06 & 2006- 07 - 11 - EXPENDITURE HAS BEEN FOUND DURING THE COURSE OF SEA RCH HENCE ADDITION SOLELY ON THE BASIS OF DVO'S REPORT IS REQUIRED TO BE DELETED. IT IS SUBMITTED THAT THE ASSESSEE IS ENTITLED TO THE BENEFIT OF THE RAJASTHAN HIGH COURT DECISION IN CIT VS. PRATAP SINGH AMROSINGH RAJENDRA SINGH & DEEPAK KUMA R (1993) 200 ITR 788 WHICH MAY BE NOTICED AND DIGESTE D AS FOLLOWS : 'ISSUE INVOLVED INCOME FROM UNDISCLOSED SOURCES - ADDITION PROPE R BOOKS MAINTAINED BOOKS NOT REJECTED - ADDITION ON THE BASIS OF REPORT OF VALUATION OFFICER AS REGARDS EXPENDITURE ON ADDITION AND ALTERATIONS TO BUILDING NOT JUSTIFIED SEC.69 OF I.T. ACT.' (EMPHASIS SUPPLIED) APART FROM ABOVE, APPELLANT RELIES ON FOLLOWING DEC ISIONS OF TRIBUNAL: (1) RUBY BUILDERS VS. INCOME TAX OFFICER, ITAT, AHMEDABAD 'A' BENCH - ITA NO.267/AHD/1998; A. Y. 19 92-93 (1999) 63 TTJ (AHD) 202: 'INCOME FROM UNDISCLOSED SOURCES - ADDITION UNDER S . 69C - COST OF CONSTRUCTION - A O REJECTED THE REPORT OF APPROVED VALUER SUBMITTED BY ASSESSEE AND RELIED ON THE REPO RT OF THE DVO ON ACCOUNT OF CERTAIN DISCREPANCIES WHICH HAVE BEEN FOUND TO BE NON-EXISTENCE COST OF CONSTRUCTION WA S DEBITED IN BOOKS ON THE BASIS OF BILLS ISSUED BY BU ILDER AO HAS NOT BEEN ABLE TO FIND ANY SPECIFIC DEFECT IN TH E BOOKS OF ACCOUNT OF THE ASSESSEE WITH REGARD TO THE COST OF CONSTRUCTION ADDITIONS MADE MERELY ON THE BASIS O F REPORT OF DVO CANNOT BE JUSTIFIED. ..' (EMPHASIS SUPPLIED) (2) ITO VS. PRAVINCHANDRA GIRDHARLAL, ITAT, AHMEDAB AD 'A' BENCH - HA NOS. 1341, 2939 & 2940/AHD/1991; A.YS. 1 980- 81 TO 1982-83 (1999) 63 TTJ (AHD) 357: 'INCOME FROM UNDISCLOSED SOURCES - ADDITION UNDER S . 69 UNEXPLAINED INVESTMENT IN CONSTRUCTION NEITHER TH E A O NOR THE DVO POINTED OUT ANY MATERIAL DEFECT IN THE BOOKS OF ACCOUNT OR IN THE COST OF CONSTRUCTION DECLARED BY ASSESSEE COST OF CONSTRUCTION AS REFLECTED IN THE BOOKS OF ACCOUNT CANNOT BE REJECTED DVO HAS CATEGORICALLY STATED THAT THE ESTIMATE MADE BY HIM WAS ON HIGHER SIDE FURTHER T HE A O HAS NOT GIVEN THE BASIS OF HIS OWN ESTIMATE - A O T OTALLY FAILED TO APPRECIATE THE REPORT OF REGISTERED VALUE R SUBMITTED BY ASSESSEE....' IT(SS)A NOS. 580 & 5 81 OF 2010 AND CO NOS. 240 & 241 OF 2010 HARESH R. VASANI VS. DCIT, CC-1(3), AHD FOR A.Y. 2005-06 & 2006- 07 - 12 - (EMPHASIS SUPPLIED) (III) VRISHALI HOTESL'PVT. LIMITED VS. ACLF 66 TTJ 692 (PUNE TRIBUNAL) (IV) ESSEM INTRA PORT SERVICES PVT. LIMITED VS. ACI T 72 ITD 228 (HYD TRIB) (V) PIONEER PUBLICITY CORPORATION & ORS. VS. DCIT 6 7 TTJ 471 (DEL TRI) 13. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIO NS OF THE ASSESSEE HELD AS UNDER: 5.4 I HAVE CONSIDERED THE ASSESSMENT ORDER AND THE ABOVE SUBMISSIONS. THE ASSESSING OFFICER WHILE MAKING TH E ADDITION HAS MERELY RELIED UPON THE REPORT OF THE D VO, HOWEVER, THE PURCHASE TRANSACTION AT JANTARI VALUE WHICH WAS ACCEPTED BY THE SUB-REGISTRAR. THE ASSESSING O FFICER HAS ALSO FAILED TO CONSIDER THE VITAL POINT THAT AP PELLANT HAS PURCHASED PROPERTY, WHICH WAS ALREADY CONSTRUCTED. ALSO THE PURCHASE DOCUMENT WAS REGISTERED WITH VALUATION OFFICER AND STAMP DUTY ON THE PROPERTY PURCHASED AND STAMP DUTY COMPUTED ON PURCHASE DEED WAS ALSO PAID BY THE APPE LLANT. FURTHER AS STATED BY THE APPELLANT, THE ASSESSING O FFICER HAD NOT POINTED OUT ANY SINGLE DEFECT IN THE BOOKS OF A CCOUNTS OF THE APPELLANT AND HAD ACCEPTED THE PAYMENT MADE TO SELLER OF BUNGALOW AS GENUINE TRANSACTIONS. IT IS ALSO NOT ICED THAT THE DIFFERENCE IN THE COST SHOWN AND THE COST ESTIM ATED BY THE DVO IS MINOR AND IS LESS THAN 15%. THE VALUATIO N MADE BY THE DVO IS-, ESTIMATE MADE BY HIM APPLYING CERTA IN RATES OF MATERIAL, LABOUR ETC. ON STANDARD BASIS, WHICH C ANNOT BE THE SAME IN ALL CASES. IN SUCH ESTIMATE, THUS THERE ARE BOUND TO BE DIFFERENCES BETWEEN ACTUAL AND ESTIMATE TO CE RTAIN EXTENT. THEREFORE, LOOKING TO THE FACTS IN ENTIRETY , AND HAVING REGARDS TO THE FACT THAT THE VALUE SHOWN BY THE ASS ESSEE FOR PURCHASE OF THE BUNGALOW WAS AS PER JANTRI VALUE WH ICH WAS ACCEPTED BY THE SUB REGISTER AND WAS ALSO ACCEPTED BY STATE AUTHORITIES FOR THE PURPOSE OF STAMP DUTY, AND FURT HER THE DIFFERENCE BETWEEN THE ACTUAL AND ESTIMATE IS LESS THAN 15%, THERE WAS NO JUSTIFICATION FOR ANY ADDITION FOR THE UNACCOUNTED INVESTMENT. IN VIEW OF THE DECISIONS CI TED BY THE APPELLANT, THE ADDITION MADE ON THIS ACCOUNT IS , THEREFORE, DELETED. 14. THE LD. DR SUPPORTED THE ORDER OF THE ASSESSIN G OFFICER. IT(SS)A NOS. 580 & 5 81 OF 2010 AND CO NOS. 240 & 241 OF 2010 HARESH R. VASANI VS. DCIT, CC-1(3), AHD FOR A.Y. 2005-06 & 2006- 07 - 13 - 15. THE LD. AR OF THE ASSESSEE RELIED ON THE SUBMI SSIONS MADE BEFORE THE LD. CIT(A) AND SUPPORTED THE ORDER OF LD. CIT(A). 16. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE ORDERS OF LOWER AUTHORITIES AND MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE LD. DR COULD NOT POINT OUT ANY SPECIF IC ERROR IN THE ORDER OF THE LD. CIT(A). NO MATERIAL COULD BE BROU GHT ON RECORD TO SHOW THAT THE ASSESSEE HAS MADE ANY PAYMENT OVER AN D ABOVE THE AMOUNT MENTIONED IN THE REGISTERED DEED WHICH WAS A LSO ACCEPTED BY THE STATE GOVERNMENT FOR THE PURPOSES OF LEVY OF STAMP DUTY. IN ABSENCE OF ANY SUCH MATERIAL HAVING BEEN BROUGHT ON RECORD BY THE REVENUE, WE DO NOT FIND ANY GOOD REASON TO INTE RFERE WITH THE ORDER OF THE LD. CIT(A). THE SAME IS CONFIRMED. T HE GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 17. IN THE ASSESSMENT YEAR 2006-07, GROUND NO. 2 O F THE REVENUES APPEAL IS DIRECTED AGAINST THE ORDER OF L D. CIT(A) IN DELETING THE ADDITION OF RS 10,00,000/- MADE ON ACC OUNT OF UNACCOUNTED BUSINESS RECEIPT. 18. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSES SING OFFICER OBSERVED THAT THE PAPER FOUND FROM THE RESIDENTIAL PREMISES OF THE ASSESSEE, SEIZED AND MARKED AS A-1 PAGE NO. 11 READ S AS UNDER: RECEIVED RS 5,00,000/- RECEIVED RS 5,00,000/- 10,00,000/- 3/6/05 IT(SS)A NOS. 580 & 5 81 OF 2010 AND CO NOS. 240 & 241 OF 2010 HARESH R. VASANI VS. DCIT, CC-1(3), AHD FOR A.Y. 2005-06 & 2006- 07 - 14 - 19. THE ASSESSING OFFICER OBSERVED THAT CONSIDERIN G THAT THE ASSESSEE IS IN THE BUSINESS OF PURCHASE AND SAL E OF LAND, THE ENTRIES RELATE TO MONEY RECEIVED IN CONNECTION WITH SALE OF LAND. HE, THEREFORE, TREATED RS 10,00,000/- AS UNACCOUNTE D BUSINESS RECEIPT OF THE ASSESSEE AND ADDED THE SAME TO THE I NCOME OF THE ASSESSEE. 20. BEING AGGRIEVED, THE ASSESSEE FILED APPEAL BEF ORE THE LD. CIT(A) AND SUBMITTED AS UNDER: 4.1 THE APPELLANT, ON THIS ISSUE, SUBMITTED THAT DU RING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFF ICER HAD NEITHER ASKED ANY EXPLANATION NOR ANY SHOW CAUSE NO TICE WAS SERVED REGARDING AFORESAID NOTING AND JOTTINGS FOUND IN SEIZED DOCUMENT. HENCE THE ENTIRE ADDITION WAS WIT HOUT GRANTING ANY OPPORTUNITY OF BEING HEARD AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE, AND THEREFORE WAS UN JUSTIFIED. IT WAS STATED THAT EXPLANATION OF AFORESAID SEIZED PAP ER WAS ASKED IN CASE OF KIRANBHAI R. VASANI, DIFFERENT LEG AL ENTITY. THE APPELLANT HAS REFERRED TO THE EXPLANATION GIVEN IN CASE OF KIRANBHAI R. VASANI WHICH WAS AS UNDER: 'AS PER POINT NO. 11 YOUR GOOD SELVES HAVE ASKED TH E EXPLANATION OF PAGE NO. 11 OF ANNEXURE A - 3 SEIZED FROM 24/25, KRISHNANAGAR SOCIETY SHOWS A RECEIPT OF RS. 10 LACS ON 30-06-2005. IN THIS MATTER, I STATE THAT THE SAI D PAPER CONTAINS THE NOTINGS OF FIGURE OF RS. 5,00,0007- TW O TIMES TOTAL 10.00.000/- WITH THE WORD WRITTEN AGAINST IT 'RECEIVED' AND NO ANY OTHER THING WRITTEN/MENTIONED ON THE SAI D PAPER. IT IS ALSO STATED THAT IT IS NOT IN MY HAND WRITING . IT IS ALSO STATED THAT ON THE SAME IT IS NOT MENTIONED FROM WH OM RECEIVED, WHO HAVE RECEIVED, EVEN THE SAID PAPER DO ES NOT HAVE SIGN OF ANY PERSON. THUS THE PAGE REFERRED IS DUMP PAPER AND NO FINANCIAL RELEVANCE WHICH RESULTS INTO UNACCOUNTED INCOME.'' 4.2 APART FROM THIS, THE APPELLANT SUBMITTED AS UND ER- '1.4 WITHOUT PREJUDICE TO THE ABOVE, APPELLANT STAT ES THAT AFORESAID SEIZED MATERIAL SEIZED FROM RESIDENTIAL P REMISES OF APPELLANT CONTAINS ONLY NOTING AND JOTTINGS PERTAIN ING TO FIGURES OF RS.10,00,000. APART FROM ABOVE, APPELLAN T STATES AS UNDER WHY ADDITION SHOULD NOT BE MADE. IT(SS)A NOS. 580 & 5 81 OF 2010 AND CO NOS. 240 & 241 OF 2010 HARESH R. VASANI VS. DCIT, CC-1(3), AHD FOR A.Y. 2005-06 & 2006- 07 - 15 - (I) THE PAPER IN QUESTION DOES NOT INDICATE THAT AN Y TRANSACTION HAD EVER TAKEN PLACE BECAUSE IT DOES NO T CONTAIN ANY INFORMATION AS TO WHAT WAS THE NATURE OF TRANSA CTION. (II) IT DOES NOT CONTAIN ANY INFORMATION AS TO WHAT WAS THE NATURE OF THE TRANSACTION, IF AT ALL, ANY SUCH TRAN SACTION TOOK PLACE, WHO WERE THE PARTIES TO THE TRANSACTION. IT IS STATED THAT NO WHERE THE NAME OF ASSESSEE HAS BEEN MENTION ED (III) WHAT THE FIGURES NOTED IN THE PIECE OF PAPER REPRESENT HAS NO RELEVANCE TO THE DETERMINATION OF INCOME IN THE HANDS OF THE ASSESSEE. (IV) IT IS STATED THAT AFORESAID LOOSE PAPER IS NOT IN THE HANDWRITING OF APPELLANT WHICH WAS ALSO STATED IN T HE ASSESSMENT PROCEEDINGS. ACCORDINGLY MERE NOTING ON A LOOSE SHEET FOUND FROM THE RESIDENTIAL PREMISE CANNOT LEAD TO ADDITION IN THE HANDS OF THE APPELLANT. 1.5 APPELLANT FURTHER STATES THAT ENTIRE ADDITION H AVE BEEN MADE BY THE ASSESSING OFFICER ONLY ON PRESUMPTION A ND SURMISES AND WITHOUT BRINGING ANY CORROBORATIVE EVI DENCE FOR ALLEGED UNEXPLAINED INVESTMENT OF RS. 10,00,000. IT IS FURTHER STATED THAT EVEN AO HAS ASSUMED THAT AFORES AID ENTRY MAY BE RELATING TO SALE OF SOME LAND WHICH SUBSTANTIATES THE APPELLANT'S CLAIM THAT THE ENTIRE ADDITIONS HAVE BEEN MADE ON THE BASIS OF ESTIMATES AND PRESUM PTION AS THE ASSESSING OFFICER HAS NOT BROUGHT OUT ANY OT HER CORROBORATIVE EVIDENCE TO PROVE THAT APPELLANT HAS ACTUALLY RECEIVED RS. 10.00.000 IN SALE OF LAND. THUS IN VIEW OF THE FACT THAT EXCEPT THE NOTINGS ON THE LOOSE PAPER NO OTHER EVIDENCE HAS BEEN FORWARDED BY THE ASSESSING OFFICE R SO AS TO ALLEGE THAT RS. 10,00,0007- HAS BEEN ACTUALLY RE CEIVED, THE IMPUGNED ADDITION MADE BY THE ASSESSING OFFICER DESERVES TO BE DELETED. IN THIS CONNECTION THE APPE LLANT RELIES ON FOLLOWING: (I) DECISION OF DELHI TRIBUNAL IN CASE OF MAHAN FOO DS LTD. V. CIT (2009) 27 DTR 185, WHEREIN THE HON'BLE IT AT HAVE HELD AS UNDER: SEARCH AND SEIZURE BLOCK ASSESSMENT - COMPUTATION OF UNDISCLOSED INCOME -ALTHOUGH THE CONTENTS OF THE RELEVANT SEIZED DOCUMENTS SHOW THAT THE AMOUNTS MENTIONED THEREIN RELATE TO SOME EXPENDITURE, IN THE ABSENCE OF ANY OTHER EVIDENCE FOUND DURING THE COURSE OF SEARCH OR BROUGHT ON RECORD BY THE AO TO SHOW THAT THE SAID EXPENDITURE WAS ACTUALLY INCURRED BY THE ASSESSEE, THE SAME CANNOT BE ADDED TO THE UNDISCLOSED INCOME OF THE ASSESSEE BY INVOKING PROVISIONS OF S. 69C ASSESSE E IT(SS)A NOS. 580 & 5 81 OF 2010 AND CO NOS. 240 & 241 OF 2010 HARESH R. VASANI VS. DCIT, CC-1(3), AHD FOR A.Y. 2005-06 & 2006- 07 - 16 - EXPLAINED THAT THE SAID ENTRIES REPRESENTED ESTIMAT ES MADE BY EMPLOYEES IN RESPECT OF PROPOSED EXPENDITURE THERE IS NO EVIDENCE ON RECORD TO REBUT/CONTROVERT THE SAID EXPLANATION ADDITIONS N OT SUSTAINABLE (II) DECISION OF GUJARAT HIGH COURT IN CASE OF DCIT V. JIVANLAL NEBHUMAL (HUF) [2004] 134 TAXMAN 660 (GUJ.) WHEREIN THE HON'BLE HIGH COURT HAVE HELD AS UNDER, SECTION 69 OF THE INCOME-TAX ACT, 1961 - UNEXPLAINE D INVESTMENTS - TRIBUNAL HAVING FOUND THAT THERE WAS NO MATERIAL ON RECORD TO INDICATE THAT ASSESSEE - HUF, WHOSE FAMILY HAD 50 PER CENT SHARE IN J COMPANY, HA D IN FACT PAID ANY 'ON-MONEY' TO SAID J COMPANY IN RESPECT OF SHOPS PURCHASED BY THEM OVER AND ABOVE AMOUNT RECORDED IN THEIR BOOKS OF ACCOUNT, DELETED ADDITION MADE BY ASSESSING OFFICER AND CONFIRMED BY COMMISSIONER (APPEALS), ON ACCOUNT OF UNEXPLAINED INVESTMENTS AND ALSO REDUCED ADDITION IN RESPECT OF LOW HOUSEHOLD EXPENSES - FURTHER, QUESTION WITH REGARD TO LEVY OF INTEREST UNDER SECTION 139(8)/215 WAS RESTORED BACK TO FILE OF ASSESSING OFFICER FOR FRESH ADJUDICATION IN ACCORDANCE WITH LAW AFTER GIVING OPPORTUNITY OF HEARING TO ASSESSEE - WHETHER SINCE TRIBUNAL HAD APPRECIATED FACTS AND EVIDENCE ON RECO RD AND HAD COME TO CONCLUSION, NO SUBSTANTIAL QUESTION OF-LAW, MUCH LESS ANY QUESTION OF LAW, AROSE OUT OF TRIBUNAL'S ORDER - HELD, YES (III) THE APPELLANT FURTHER SUBMITS THAT AS FAR AS THE ADDITION MADE ON THE BASIS OF THE NOTINGS ON THE LO OSE PAPER IS CONCERNED THE GUJARAT HIGH COURT HAS RECENTLY IN CASE OF CIT VS. MAULIK KUMAR K. SHAH 30 7 1TR 137 HAD HELD THAT LOOSE PAPERS CONTAINING .ROUG H ESTIMATES CANNOT BE RELIED UPON TO MAKE ADDITION ON ACCOUNT OF UNDISCLOSED INCOME IN THE ABSENCE OF ANY INDEPENDENT' EVIDENCE. (IV) FURTHER THERE ARE ALSO CERTAIN OTHER LEGAL PRE CEDENT WHICH CLARIFIES THAT LOOSE PAPERS ALONE CANNOT BE M ADE BASIS FOR ADDITION. WHERE LOOSE SHEETS ARE FOUND, T HERE IS THE USUAL INFERENCE OF THE ASSESSING OFFICER, TH AT THEY REPRESENT CONCEALED TRANSACTIONS SUCH INFERENC E DOES NOT READILY FOLLOW. SUCH INFERENCE CAN BE POSITIVELY MADE ONLY AFTER IDENTIFICATION OF PAPERS AND AFTER DUE VERIFICATIONS. FIGURES THEREIN COULD NOT BE LIGHTLY INFERRED TO REPRESENT UNACCOUNTED INCOME, UNLESS THERE IS SOMETHING MORE TO IT. IT WAS SO HEL D BY A THIRD MEMBER ON A DIFFERENCE BETWEEN THE OTHER IT(SS)A NOS. 580 & 5 81 OF 2010 AND CO NOS. 240 & 241 OF 2010 HARESH R. VASANI VS. DCIT, CC-1(3), AHD FOR A.Y. 2005-06 & 2006- 07 - 17 - MEMBERS OF THE TRIBUNAL IN GOYAL (S.P.) V DCIT (200 4) 269 ITR 496 (HP). A SIMILAR VIEW WAS TAKEN AGAIN BY A THIRD MEMBER IN BABROS MACHINERY MANUFACTURES PVT LTD V DCIT (2004) 269 TTR (AT) 36 (AHD). (V) FURTHER, THE HONORABLE SUPREME COURT IN THE CAS E OF MOHD. YUSUF & ANR. & ANR. AIR 1968 BOM 112 HAS OBSERVED THAT THE CONTENTS CONTAINED IN THE DOCUMEN T IS HEARSAY EVIDENCE UNLESS THE WRITER THEREOF IS EXAMINED BEFORE THE COURT THE HONOURABLE COURT, THEREFORE, HELD THAT ATTEMPT TO PROVE THE CONTENTS OF THE DOCUMENT BY PROVING THE SIGNATURE OF THE HANDWRITING OF THE AUTHOR THEREOF IS TO SET AT NOUG HT, THE WELL RECOGNIZED RULE THAT HEARSAY EVIDENCE CANN OT BE ADMITTED. IF WE CONSIDER THE SAID PIECE OF PAPER SEIZED DURING SEARCH IN LIGHT OF THE DEFINITION OF THE WORD 'DOCUMENT' IS GIVEN IN THE INDIAN EVIDENCE ACT AND GENERAL CLAUSES ACT AND TRUTHFULNESS OF THE INTENTS THEREOF IN LIGHT OF THE AFORECITED DECISION S OF THE HONOURABLE SUPREME COURT, WE FIND THAT THE SAID PAPER CONTAINS JOTTINGS OF CERTAIN FIGURES THE SAME DOES NOT DESCRIBE OR EXPRESS THE SUBSTANCE OF ANY TRANSACTION AND EVEN IF THE SAID PAPER HAS BEEN SEI ZED FROM THE POSSESSION OF THE ASSESSEE THE CONTENTS THEREOF ARE NOT CAPABLE OF THE DESCRIBING THE TRANSACTIONS THE WAY THE ASSESSING OFFICER HAS DECIPHERED THEM WITHOUT SUPPORT OF CORROBORATIVE EVIDENCE OF THE PARTIES ATTRIBUTED TO THE ALLEGED TRANSACTION. THE SAID PAPER, THEREFORE, DOES NOT CO ME WITHIN THE COMPASS OF THE DEFINITION OF THE WORD 'DOCUMENT TO BE USED AS EVIDENCE. THE PAPER SEIZED, THEREFORE, HAS NO EVIDENTIARY VALUE AND ACCORDINGLY THE SAME CANNOT FORM THE BASIS FOR ASSESSING THE UNDISCLOSED INCOME. (VI) DECISION OF DELHI TRIBUNAL IN CASE OF SK GUPTA V/S DCIT 63 TTJ 532 WHEREIN ITAT HAS HELD THAT ADDITION MADE ON THE BASIS OF LOOSE SHEETS CANNOT BE SUSTAIN ED AS SAME DOES NOT INDICATE THAT ANY TRANSACTION EVER TOOK PLACE ARID DOES NOT CONTAIN ANY INFORMATION IN RELATION TO NATURE AND PARTY TO THE TRANSACTION IN QUESTION. (VII) DECISION OF DELHI ITAT IN CASE OF SMC BROKERS LIMITED V/S DCIT 109 TTJ (700 WHEREIN TRIBUNAL HAS HELD THA T DIARY SEIZED WAS NOT CONTAINING ANY [EVIDENCE REGARDING ANY RECEIPTS OF MONEY BY WAY OF CHEQUES O F RS. 50,00,000 EACH AND ALSO THE DIARY WAS NOT WRITT EN BY ASSESSEE OR HIS EMPLOYEES. THERE WAS NO EVIDENCE ON RECORD TO SUBSTANTIATE THAT ASSESSEE HAS EARNED IT(SS)A NOS. 580 & 5 81 OF 2010 AND CO NOS. 240 & 241 OF 2010 HARESH R. VASANI VS. DCIT, CC-1(3), AHD FOR A.Y. 2005-06 & 2006- 07 - 18 - ANY UNDISCLOSED INCOME HENCE ADDITION BASED ON DUMB DOCUMENT IS DELETED. THE APPELLANT STATES THAT IN ITS CASE, ALSO NO EVID ENCE IS PRESENT EXCEPT THE NOTINGS ON THE LOOSE PAPER SO AS TO ALLEGE THAT THE APPELLANT HAS MADE ANY INVESTMENT OUTSIDE THE BOOKS OF ACCOUNTS. AND HENCE IN VIEW OF THE ABOVE MENTIONED JUDICIAL PRONOUNCEMENTS AND THE FACTS OF THE CASE OF THE APPELLANT, IT IS SUBMITTED THAT THE ADDITION MADE BY THE ASSESSING OFFICER ONLY ON THE BASIS OF PRESUMPT IONS AND WITHOUT BRINGING ON ANY CORROBORATIVE EVIDENCE IN S UPPORT OF THE SAME, IS UNWARRANTED AND UNJUSTIFIED AND HENCE THE SAME DESERVES TO BE DELETED.' 21. THE LD. CIT(A) AFTER CONSIDERING THE ABOVE SUB MISSIONS OF THE ASSESSEE DELETED THE ADDITION. 22. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE ORDERS OF LOWER AUTHORITIES AND MATERIAL AVAILABLE ON RECORD. THE ASSESSING OFFICER MADE ADDITION OF RS 10,00,000/- O N THE BASIS OF SEIZED DOCUMENT MARKED AS ANNEXURE A-1 PAGE NO. 11. IN THE OPINION OF THE ASSESSING OFFICER, THE SAID SEIZED D OCUMENT EVIDENCES RECEIPT OF RS 10,00,000/- BY THE ASSESSEE ON 03.06.2005 RELATING TO HIS BUSINESS. 23. ON APPEAL, THE LD. CIT(A) DELETED THE ABOVE AD DITION BY OBSERVING AS UNDER: 4.3 I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORDER AN D THE ABOVE SUBMISSIONS. THE ASSESSING OFFICER HAS M ADE THE ADDITION FOR THE ONLY REASON THAT AS PER THE LOOSE PAPER FOUND, THE APPELLANT HAS RECEIVED BUSINESS RECEIPT OF RS 10 LACS. HOWEVER IT IS SEEN THAT, EXCEPT THE SEIZED M ATERIAL, THE ASSESSING OFFICER HAS NOT INDEPENDENTLY ESTABLISHED THAT ANY SUCH TRANSACTION, HAS IN FACT, TAKEN PLACE. THERE IS NO OTHER DOCUMENT OR EVIDENCE TO SUGGEST THAT THE ASSESSEE H AS RECEIVED A SUM OF RS 10 LACS. HENCE, THERE IS NO J USTIFICATION FOR PRESUMING THAT THE APPELLANT MUST HAVE RECEIVED A SUM OF RS 10 LACS. THE ASSESSING OFFICER HAS ALSO FAIL ED TO BRING ON RECORD ANY DETAILS REGARDING THE OTHER PARTY INV OLVED IN IT(SS)A NOS. 580 & 5 81 OF 2010 AND CO NOS. 240 & 241 OF 2010 HARESH R. VASANI VS. DCIT, CC-1(3), AHD FOR A.Y. 2005-06 & 2006- 07 - 19 - THE TRANSACTION FROM WHICH SUM OF MONEY HAS BEEN RE CEIVED BY THE APPELLANT AND ADDITION HAS BEEN MADE PURELY ON ASSUMPTION. THEREFORE, CONSIDERING THE FACTS OF TH E CASE, I AM OF THE VIEW THAT THERE IS NO JUSTIFICATION FOR M AKING THE ADDITION ON MERELY PRESUMPTIVE BASIS. ACCORDINGLY, THE ADDITION OF RS 10 LACS IS DIRECTED TO BE DELETED. 24. BEFORE US, THE LD. DR RELIED UPON THE ORDER OF THE ASSESSING OFFICER AND SUBMITTED THAT THE SEIZED DOC UMENT EVIDENCES RECEIPT OF RS 10,00,000/- BY THE ASSESSEE DURING THE COURSE OF ITS BUSINESS AND AS THE SAID RECEIPT WAS NOT RECORDED IN THE REGULAR BOOKS OF ACCOUNT OF THE ASSESSEE, THE A SSESSING OFFICER RIGHTLY ADDED THE SAME TO THE INCOME OF THE ASSESSE E. 25. ON THE OTHER HAND, THE LD. AR OF THE ASSESSEE RELIED UPON THE ORDER OF THE LD. CIT(A) AND SUBMITTED THAT THE SEIZED DOCUMENT DOES NOT SPECIFY THE NATURE OF TRANSACTION , DETAILS OF THE RECIPIENT AND/OR PAYER OF THE AMOUNT AND THIS DOCUM ENT IS A DUM DOCUMENT WHEREIN THERE WAS EVEN NO SIGNATURE OF ANY PERSON AND THE DOCUMENT HAS NO EVIDENTIARY VALUE AND IS OF NO LEGAL CONSEQUENCE. THEREFORE, THE LD. CIT(A) WAS JUSTIFI ED IN HOLDING THAT NO ADDITION CAN BE MADE IN AN ASSESSMENT MEREL Y ON THE BASIS OF SUCH DUM DOCUMENT. 26. WE FIND THAT COPY OF SEIZED DOCUMENT IS PLACED AT PAGE NO. 27 OF THE PAPER BOOK FILED BY THE ASSESSEE. A PERUSAL OF THE SAME SHOWS THAT THE ONLY NOTING MADE THEREIN ARE AS UNDER: RECEIVED RS 5,00,000/- RECEIVED RS 5,00,000/- 10,00,000/- 3/6/05 IT(SS)A NOS. 580 & 5 81 OF 2010 AND CO NOS. 240 & 241 OF 2010 HARESH R. VASANI VS. DCIT, CC-1(3), AHD FOR A.Y. 2005-06 & 2006- 07 - 20 - 27. THE SAID DOCUMENT DOES NOT BEAR SIGNATURE OF A NY PERSON. THE DOCUMENT ALSO DOES NOT SPECIFY THE NAM E OF PARTY TO WHOM THIS DOCUMENT OR NOTING MADE THEREIN RELATES T O. THE SAID DOCUMENT DOES NOT SPECIFY THE NATURE OF THE TRANSAC TION WHETHER THE TRANSACTION, IF MADE AT ALL, WAS A REVENUE TRAN SACTION OR WAS CAPITAL TRANSACTION. WE FIND THAT NO MATERIAL HAS BEEN BROUGHT ON RECORD BY THE REVENUE BY MAKING PROPER INQUIRY IN R ELATION TO THE SAID SEIZED DOCUMENT TO SHOW THE IDENTITY OF THE PA RTY AND NATURE OF TRANSACTION FOR WHICH THE SAID DOCUMENT WAS DRAW N OR MADE. 28. IN OUR CONSIDERED OPINION, MERELY FROM THE ABO VE DOCUMENT IT CANNOT BE CONCLUDED THAT THE ASSESSEE I N FACT RECEIVED RS 10,00,000/- ON 03.06.2005 FROM ANY UNSPECIFIED P ERSON AND THAT TOO IN RESPECT OF HIS BUSINESS ON REVENUE ACCO UNT. WE FIND THAT NO MATERIAL COULD BE BROUGHT ON RECORD BY THE REVENUE BY MAKING A PROPER INQUIRY IN RESPECT OF THE SAID SEIZ ED DOCUMENT TO SHOW THAT THE SAID SEIZED DOCUMENT SHOWS BUSINESS R ECEIPT OF RS 10,00,000/- BY THE ASSESSEE ON 03.06.2005. IN ABSE NCE OF ANY SUCH MATERIAL HAVING BEEN BROUGHT ON RECORD BY THE ASSESSING OFFICER BY MAKING SPECIFIC INQUIRY, WE DO NOT FIND ANY GOOD REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A). IT IS CONFIRMED. THE GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 29. THE ASSESSEE HAS FILED CROSS-OBJECTIONS AGAINS T THE ORDERS OF LD. CIT(A)-I, AHMEDABAD IN ASSESSMENT YEA RS 2005-06 AND 2006-07. AT THE TIME OF HEARING, THE LD. AR OF THE ASSESSEE SUBMITTED THAT HE IS NOT PRESSING THE CROSS-OBJECTI ONS FILED BY THE ASSESSEE AND AN ENDORSEMENT TO THIS EFFECT IS ALSO MADE BY THE LD. AR OF THE ASSESSEE ON MEMO OF CROSS OBJECTION. WE, THEREFORE, IT(SS)A NOS. 580 & 5 81 OF 2010 AND CO NOS. 240 & 241 OF 2010 HARESH R. VASANI VS. DCIT, CC-1(3), AHD FOR A.Y. 2005-06 & 2006- 07 - 21 - DISMISS BOTH THE CROSS-OBJECTIONS FILED BY THE ASSE SSEE AS NOT PRESSED. 30. IN THE RESULT, THE APPEALS OF THE REVENUE AND THE CROSS- OBJECTIONS OF THE ASSESSEE, BOTH ARE DISMISSED. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 4 TH OF APRIL, 2014 AT AHMEDABAD. SD/- SD/- (KUL BHARAT) JUDICIAL MEMBER ( N.S. SAINI) ACCOUNTANT MEMBER AHMEDABAD;DATED 04/04/2014 GHANSHYAM MAURYA, SR. P.S. TRUE COPY , & -#. /.+# , & -#. /.+# , & -#. /.+# , & -#. /.+#/ COPY OF THE ORDER FORWARDED TO : 1. 01 / THE APPELLANT 2. -201 / THE RESPONDENT. 3. # !3 / CONCERNED CIT 4. !3() / THE CIT(A)-III, AHMEDABAD 5. .'6 -# , , / DR, ITAT, AHMEDABAD 6. 678 9% / GUARD FILE. ,! ,! ,! ,! / BY ORDER, : :: :/ // / ; ; ; ; ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD
