Sri. SATRAMDAS G. FATECHANDANI, MUMBAI V. ACIT CEN. CIR. - 2- THANE, MUMBAI

ITSSA 586/MUM/2004

• Counselvise Citation: [2010] 124 COUNSELVISE.COM (IT) 8947 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 9 month(s) 11 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 06-08-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 06-07-2010
• Assessment Year: misc
• Appeal Filed On: 26-10-2004
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A P SINGH
• Keywords: Unexplained investment; Gift; Search and seizure; Loose papers; Period of limitation; Block assessment
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'F' BENCH, MUMBAI BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER IT(SS) NO. 586/MUM/2004 (BLOCK PERIOD: 01-04-1995 TO 27.09.2001) SHRI SATRAMDAS G. FATEHCHANDANI ACIT, CENTRAL CIRCL E - 2 FLAT NO. 101, A-WING, VISHNU 2 ND FLOOR, PAWAR INDUSTRIAL AREA DARSHAN BLDG., NEAR AMAN TALKIES VS. EDULJI ROAD, CHARAI ULHASNAGAR 421002 THANE 400061 PAN - AAEPF 2441G APPELLANT RESPONDENT APPELLANT BY: SHRI K. GOPAL RESPONDENT BY: SHRI A.P. SINGH O R D E R PER B. RAMAKOTAIAH, A.M. THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER OF THE CIT(A)- I THANE DATED 15.09.2004. 2. THE ASSESSEE IS AN INDIVIDUAL, IS A FINANCE BRO KER. SEARCH AND SEIZURE OPERATION U/S. 132(1) WAS CARRIED OUT AT THE RESIDE NTIAL PREMISES OF THE ASSESSEE NAMELY 111, VISHNU DARSHAN BUILDING, ULHAS NAGAR. OFFICE PREMISES OF THE ASSESSEE NAMELY ROOM NO. 212, 213, 2 ND FLOOR, DASS CHAMBERS, FURNITURE BAZAR, ULHASNAGAR-3 WAS ALSO SE ARCHED. SEARCH OF THE RESIDENTIAL PREMISES TOOK PLACE ON 27.9.2001. PURSU ANT TO THE AFORESAID SEARCH, BLOCK ASSESSMENT ORDER WAS PASSED ON 31.10. 2003 AGAINST WHICH, THE ASSESSEE FILED AN APPEAL WHICH WAS PARTLY ALLOW ED BY LEARNED CIT(A). 3. AGGRIEVED BY THE ORDER OF LEARNED CIT(A), THE AS SESSEE HAS FILED THE AFORESAID APPEAL BEFORE THE TRIBUNAL. 4. GROUND NO. 2 RAISED BY THE ASSESSEE READS AS FOL LOWS :- 2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, LEARNED CIT(A) ERRED IN UPHOLDING THE VALIDITY OF PASSING B LOCK ASSESSMENT ORDER WITHOUT APPRECIATING THAT THE BLOCK ASSESSMEN T ORDER PASSED IS VALID AB INTIO AND BAD IN LAW AS PASSED BEYOND T HE PERIOD OF LIMITATION. IT(SS) NO. 586/MUM/2004 SHRI SATRAMDAS G. FATEHCHANDANI 2 5. FACTS WHICH ARE MATERIAL FOR ADJUDICATION OF THE AFORESAID GROUND OF APPEAL ARE AS FOLLOWS :- AS ALREADY SEEN THE ASSESSEES RESIDENTIAL PREMISE WAS SEARCHED ON 27.9.2001. SEARCH COMMENCED AT 8.30 AM AND SEARCH W AS CONCLUDED ON SAME DAY AT 11.45 PM. AS FAR AS AT THE OFFICE PREMI SE IS CONCERNED, SEARCH COMMENCED ON 27.9.2001 AT 7.30 PM. PROCEEDINGS WERE TEMPORARILY CONCLUDED ON 28.9.2001 AT 3.30 AM. A PANCHANAMA D RAWN ON 28.9.2001 MENTIONS THAT SEARCH IS TEMPORARILY CONCLUDED FOR T HE DAY TO BE COMMENCED SUBSEQUENTLY. THE AUTHORISED OFFICER CONDUCTING THE SEARCH HAD PLACED A SEAL ON THE DRAWER OF THE COUNTER TABLE IN ROOM NO. 212. A PROHIBITORY ORDER U/S. 132(3) WAS ALSO PASSED RESTRAINING ANY P ERSON FROM OPENING THE AFORESAID DRAWER WHICH WAS PUT UNDER SEAL. THE ORDE R U/S. 132(3) WAS SERVED ON ONE MS. TINA MOTWANI. ON 18.10.2001, AUTH ORIZED OFFICER WHO CONDUCTED SEARCH AT THE OFFICE PREMISES ON 27.9.200 1 AGAIN VISITED THE SAID PREMISES AT 1.30 PM. ON 18.10.2001. THE DRAWER THA T HAD BEEN SEALED WAS OPENED AND AN INVENTORY OF PAPERS THAT WERE FOUND I N THE DRAWER WAS TAKEN AND THE PROHIBITORY ORDER WAS LIFTED. THE SEARCH FI NALLY CONCLUDED AT 4 PM. ON 8.10.2001. UNDER PROVISIONS OF SECTION 158BE OF THE ACT, TIME LIMIT FOR COMPLETING THE BLOCK ASSESSMENT HAS BEEN PRESCRIBED . TIME LIMIT SO PRESCRIBED IS TWO YEARS FROM THE END OF THE MONTH I N WHICH THE LAST OF THE AUTHORIZATIONS FOR SEARCH UNDER SECTION 132 WAS EXE CUTED. EXPLANATION 2 TO SECTION 158BE READS AS FOLLOWS :- EXPLANATION 2.FOR THE REMOVAL OF DOUBTS, IT IS HE REBY DECLARED THAT THE AUTHORISATION REFERRED TO IN SUB-SECTION (1) SHALL BE DEEMED TO HAVE BEEN EXECUTED, (A) IN THE CASE OF SEARCH, ON THE CONCLUSION OF SE ARCH AS RECORDED IN THE LAST PANCHANAMA DRAWN IN RELATION TO ANY PERSON IN WHOSE CASE THE WARRANT OF AUTHORISATION HAS BEEN ISSUED; (B) IN THE CASE OF REQUISITION UNDER SECTION 132A, ON THE ACTUAL RECEIPT OF THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR ASSET S BY THE AUTHORISED OFFICER.] THUS IT CAN BE SEEN THAT DATE OF EXECUTION OF AUTHO RIZATION FOR SEARCH U/S. 132 WOULD BE THE DATE ON WHICH CONCLUSION OF THE SE ARCH IS RECORDED IN THE LAST PANCHANAMA DRAWN. IT(SS) NO. 586/MUM/2004 SHRI SATRAMDAS G. FATEHCHANDANI 3 6. THE BLOCK ASSESSMENT ORDER WAS PASSED BY THE ASSESS ING OFFICER ON 31.10.2003. ACCORDING TO THE ASSESSEE WARRANT OF SE ARCH SHOULD BE TREATED AS HAVING BEEN EXECUTED AS ON 28.9.2001 AND THUS, A CCORDING TO THE ASSESSEE, LAST DATE OF THE MONTH IN WHICH LAST PANC HANAMA WAS DRAWN WOULD BE 31.8.2001. A PERIOD OF TWO YEARS FROM THAT DATE WOULD END ON 31.8.2003. SINCE, BLOCK ASSESSMENT ORDER WAS PASSED ON 31.10.2003, THE SAME IS BARRED BY TIME. ACCORDING TO THE REVENUE, L AST PANCHANAMA DRAWN ON 18.10.2001 AND THE LAST DAY OF THE MONTH IN WHIC H LAST PANCHANAMA WAS DRAWN WAS 31.10.2001 AND THE PERIOD OF TWO YEARS TH EREFROM WOULD EXPIRE ON 31.10.2003; AND THEREFORE BLOCK ASSESSMENT ORDER IS WELL WITH THE TIME. THE CONTENTION OF LEARNED COUNSEL FOR THE ASSESSEE WAS THAT ON 27.9.2001 WHEN THE OFFICE PREMISE WAS SEARCH, THERE IS NO NEC ESSITY TO PLACE SEAL ON THE DRAWER OF THE COUNTER TABLE AND PASSING A PROHI BITORY ORDER U/S. 132(3) IN RESPECT OF THE SAME. ACCORDING TO HIM, PROHIBITO RY ORDER U/S. 132(3) CAN BE PASSED ONLY WHEN THERE IS ANY PRACTICAL DIFFICUL TY IN SEIZING AN ITEM WHICH IS LIABLE TO BE SEIZED. ACCORDING TO HIM, THE ASSES SING OFFICER BY PASSING AN ORDER U/S. 132(3) OF THE ACT AND COMPLETING A SEIZU RE ON A SUBSEQUENT DATE HAS UNDULY GOT AN EXTENDED TIME OF LIMITATION FOR F RAMING ASSESSMENT ORDER. HE THEREFORE SUBMITTED THAT THE DATE OF DRAWING OF THE LAST PANCHANAMA SHOULD BE CONSIDERED AS 28.9.2001 AND PERIOD OF LIM ITATION SHOULD BE RECKONED FROM THAT DATE. IF SO RECKONED, ORDER OF A SSESSMENT WOULD BE BARRED BY TIME. IN THIS REGARD, LEARNED COUNSEL FO R THE ASSESSEE PRIMARILY PLACED RELIANCE ON THE DECISION OF HON'BLE BOMBAY H IGH COURT IN THE CASE OF CIT VS. MRS. SANDHYA P. NAIK, 253 ITR 534 (BOM), WH EREIN, ACCORDING TO THE LEARNED COUNSEL, ON IDENTICAL FACTS, HON'BLE BOMBAY HIGH COURT HAD HELD THAT THE ORDER OF BLOCK ASSESSMENT WAS BARRED BY TI ME. FURTHER RELIANCE WAS PLACED BY LEARNED COUNSEL FOR THE ASSESSEE ON THE T HIRD MEMBERS DECISION IN THE CASE OF NANDLAL M. GANDHI VS. ACIT, 115 ITD 1 (MUM)(TM), WHEREIN, ACCORDING TO THE LEARNED COUNSEL FOR THE ASSESSEE, ON IDENTICAL FACTS, FOLLOWING THE DECISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF MRS. SANDHYA P. NAIK (SUPRA) IT WAS HELD THAT BLOCK ASSE SSMENT ORDER WAS BARRED BY TIME. FURTHER RELIANCE WAS ALSO PLACED ON THE DE CISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. S.K. KATYAL, 308 ITR 168 (DEL) FOR IDENTICAL IT(SS) NO. 586/MUM/2004 SHRI SATRAMDAS G. FATEHCHANDANI 4 PROPOSITION REFERRED TO EARLIER. FURTHER RELIANCE W AS ALSO PLACED ON THE DECISION OF SARV CONSULATE MARINE PRODUCTS P. LTD., 294 ITR 444 (DEL). 7. LEARNED DR SUBMITTED THAT IN ACCORDANCE WITH THE LA W LAID DOWN BY SPECIAL BENCH OF THE ITAT DELHI IN THE CASE OF PROM AIN LTD. VS. DCIT, 95 ITD 489 (DEL)(SB), THE TRIBUNAL CAN ONLY EXAMINE THE RE CORDS OF SEARCH TO FIND OUT THE FACTUM OF LAST PANCHANAMA AND CANNOT GO INT O THE QUESTION WHETHER IT WAS VALIDLY DRAWN. HE FURTHER RELIED ON THE DECI SION OF THE SPECIAL BENCH OF ITAT DELHI IN THE CASE OF SMT. KRISHNA VERMA VS. ACIT, 113 ITD 655 (DEL)(SB), WHEREIN AFTER CONSIDERING THE DECISION O F HON'BLE BOMBAY HIGH COURT IN THE CASE OF MRS. SANDHYA P. NAIK (SUPRA), THE TRIBUNAL HELD THAT THE BLOCK ASSESSMENT ORDER WAS PASSED WITHIN THE PE RIOD OF LIMITATION. IT WAS ALSO SUBMITTED BY LEARNED DR THAT THIRD MEMBER DECISION IN THE CASE OF NANDALAL M. GANDHI (SUPRA) WAS NOT APPLICABLE TO TH E FACTS OF THE PRESENT CASE. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE DECIS ION OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF SANDHYA P. NAIK (S UPRA) IS A CASE WHERE AUTHORIZED OFFICER WHO CONDUCTED A SEARCH TEMPORARI LY CONCLUDED THE SAME WITHOUT FINALLY CONCLUDING IT BY PASSING AN ORDER U /S. 132(3) OF THE ACT. LATER ON ANOTHER OFFICER OF THE REVENUE WHO WAS NOT AUTHORIZED OFFICER U/S.132(1) REMOVED THE SEAL WHICH WAS PLACED EARLIE R AND MADE A PANCHANAMA. THE HON'BLE BOMBAY HIGH COURT HELD THAT SECOND PANCHANAMA MADE BY A PERSON WHO WAS NOT A PERSON AU THORIZED TO CONDUCT THE SEARCH, WAS NOT LEGALLY VALID AND THEREFORE PER IOD OF LIMITATION WAS COMPUTED WITH REFERENCE TO THE FIRST PANCHANAMA DRA WN BY THE AUTHORIZED OFFICER. CONSEQUENTLY HON'BLE BOMBAY HIGH COURT HEL D THAT THE ORDER OF BLOCK ASSESSMENT WAS BARRED BY TIME. FURTHER FINDIN G IN THE AFORESAID CASE WAS THAT SILVER ARTICLES WERE PLACED IN THE CUPBOAR D AND SEALED; AND ORDER U/S. 132(3) PASSED. IT IS IN THE BACKGROUND OF THE AFORESAID FACTS THAT HON'BLE BOMBAY HIGH COURT HELD THAT THE ORDER U/S. 132(3) AND THE SUBSEQUENT PANCHANAMA DRAWN WERE NOT LAST PANCHANAM A. IN OUR VIEW, FACTS IN THE ASSESSEES CASE STAND ON A TOTALLY DIF FERENT FOOTING. AS WE HAVE ALREADY SEEN ON 27.9.2001 AT 7.30 PM OFFICE PREMISE S WAS SEARCHED BY THE IT(SS) NO. 586/MUM/2004 SHRI SATRAMDAS G. FATEHCHANDANI 5 AUTHORIZED OFFICER. PROCEEDINGS WENT UPTO MID NIGHT AND THEREAFTER ON 28.9.2001 AT 3.30 AM (MID NIGHT) SEARCH WAS TEMPORA RILY CONCLUDED TO BE COMMENCED SUBSEQUENTLY. THE DRAWER OF THE COUNTER T ABLE WAS SEALED AND PROHIBITORY ORDER WAS PASSED. ON 18.10.2001 AT 1.30 PM AUTHORIZED OFFICER AGAIN VISITED THE OFFICE PREMISES BROKE OPEN THE SE AL OF THE DRAWER AND TOOK AN INVENTORY OF LOOSE PAPERS AND TELEPHONE DIARY. T HE PROHIBITORY ORDER WAS LIFTED AND SEARCH WAS FINALLY CONCLUDED AT 4 PM ON 18.10.2001. A PANCHANAMA WAS DULY DRAWN IN THIS REGARD. WE FAIL T O SEE AS TO HOW PASSING OF THE ORDER U/S. 132(3) WAS IMPROPER. THERE ARE TW O REASONS AS TO WHY SEARCH WAS NOT CONCLUDED ON 28.9.2001. FIRSTLY, PRO CEEDINGS CONTINUED UP TO 3.30 AM AND OFFICERS THOUGHT IT FIT TO TEMPORARI LY CONCLUDE SEARCH. SECONDLY, ASSESSEE WAS NOT AVAILABLE AT THE TIME OF SEARCH ON 28.9.2001. WHEN THE OFFICERS VISITED ASSESSEES OFFICE PREMISE S ON 18.10.2001, THE ASSESSEE WAS PRESENT IN THE PREMISES AND AN INVENTO RY OF LOSS SHEETS WAS TAKEN AFTER DULY ASKING FOR EXPLANATION REGARDING E ACH OF THE SEIZED PAPERS. WE DO NOT FIND ANY INFIRMITY OR REGULARITY IN EITHE R PASSING AN ORDER U/S. 132(3) OF THE ACT OR IN THE SEARCH CONDUCTED AND CO NCLUDED ON 18.10.2001. IN OUR VIEW PANCHANAMA DRAWN ON 18.10.2001 IS A PRO PER AND VALID PANCHANAMA DRAWN AND WAS THE LAST PANCHANAMA DRAWN IN THE CASE OF ASSESSEE. THE PERIOD OF LIMITATION HAD TO BE RECKON ED FROM THE SAID DATE. IN FACT, IN THE CASE OF MRS. KRISHNA VERMA (SUPRA), HO N'BLE SPECIAL BENCH AFTER REFERRING TO THE DECISION OF HON'BLE BOMBAY HIGH CO URT IN THE CASE OF MRS. SANDHYA P. NAIK (SUPRA) HAS HELD THAT IT IS ONLY WH ERE THERE ARE NO VALID REASON FOR NOT CONCLUDING A SEARCHARE ASSIGNED THAT THE LATER PANCHANAMA HAVE TO BE VIEWED WITH SUSPICION AS ONE MADE JUST T O GET AN EXTENDED PERIOD OF LIMITATION. IN THE PRESENT CASE, WE ARE OF THE VIEW THAT THERE ARE NO SUCH CIRCUMSTANCES WHICH CAN VITIATE THE VALIDITY OF PAN CHANAMA DRAWN ON 18.10.2001. WE HAVE ALSO PERUSED THE OTHER DECISION S CITED BY LEARNED COUNSEL FOR THE ASSESSEE. THE DECISION IN THE CASE OF THIRD MEMBER IN THE CASE OF NANDALAL M. GHANDI (SUPRA) IS IDENTICAL TO THE CASE OF MRS. SANDHYA P. NAIK (SUPRA) AND THE FINDINGS OF THE TRIBUNAL IN THE AFORESAID CASE WAS THAT THERE WAS NO JUSTIFICATION FOR A PROHIBITORY O RDER U/S. 132(3) AND THE SAME WAS DONE ONLY WITH A VIEW TO GET AN EXTENDED P ERIOD OF LIMITATION. THE IT(SS) NO. 586/MUM/2004 SHRI SATRAMDAS G. FATEHCHANDANI 6 DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF SARV CONSULATE MARINE PRODUCTS (SUPRA) WAS AGAIN A CASE WHERE THERE WAS N O CIRCUMSTANCES WARRANTING PASSING OF PROHIBITORY ORDER U/S. 132(3) OF THE ACT. IN THOSE CIRCUMSTANCES, HON'BLE DELHI HIGH COURT WAS OF THE VIEW THAT SECOND PANCHANAMA WILL NOT GIVE EXTENDED PERIOD OF LIMITAT ION. SIMILARLY, IN THE CASE OF S.K. KATYAL (SUPRA), HON'BLE DELHI HIGH COU RT FOND THAT BETWEEN THE DATE OF SEARCH AND DRAWING OF THE FIRST PANCHANAMA AND THE SECOND PANCHANAMA, THERE WAS AN UNEXPLAINED DELAY AND UNDE R THOSE CIRCUMSTANCES SECOND PANCHANAMA WAS IGNORED AND PER IOD OF LIMITATION WAS COMPUTED WITH REFERENCE TO THE FIRST PANCHANAMA . THUS, IT CAN BE SEEN THAT DECISIONS RELIED UPON BY LEARNED COUNSEL FOR T HE ASSESSEE CAN BE APPLIED ONLY ON THE FACTS OF THE RELEVANT CASE. IN THE PRESENT CASE, WE HAVE ALREADY SEEN THAT PANCHANAMA DRAWN ON 18.10.2001 WA S A VALID PANCHANAMA AND THE PERIOD OF LIMITATION HAS TO BE R ECKONED ACCORDINGLY. WE THEREFORE DO NOT FIND ANY MERIT IN GROUND NO. 2 RAISED BY THE ASSESSEE AND THE SAME IS DISMISSED. 9. GROUND NO. 3 PERTAINS TO CONFIRMING THE ESTIMATION OF BROKERAGE INCOME AT 0.25% AS AGAINST 0.10% DECLARED BY THE AS SESSEE. AS STATED ABOVE, IN THE SEARCH AND SEIZURE PROCEEDINGS FEW DI ARIES AND HUNDIS WERE SEIZED AND THE A.O. HAS QUANTIFIED THE BROKERAGE AT 0.25% ON THE BASIS OF THE DETAILS ARRIVED AT AND FEW TRANSACTIONS AS ANNE XURES A TO E. VIDE ANNEXURE A THE TOTAL OF THE AMOUNT ADVANCED IN THE LISTED TRANSACTIONS WAS ` 33,45,000/- ON WHICH BROKERAGE WAS ARRIVED AT ` 25,587.50 AND FOR 3 MONTHS PERIOD THIS WAS WORKED OUT TO 0.25%. LIKEWIS E HE WORKED IN ANNEXURE B BROKERAGE OF ` 29,629/- ON A TURNOVER OF ` 36,90,000/-, ANNEXURE C ` 36051/- ON A TURNOVER OR ` 47,00,000/-, ANNEXURE D ` 51,218/- ON A TURNOVER OF ` 66,75,000/- AND ANNEXURE E ` 72,825/- ON A TURNOVER OF ` 93,55,000/-. ON THE BASIS OF THESE DETAILS THE ENTI RE TURNOVER OF THE ASSESSEE WERE CONSIDERED THAT ASSESSEE WAS RECE IVING BROKERAGE AT 0.25% PER MONTH. IT IS THE CONTENTION OF THE LEARNE D COUNSEL THAT THERE ARE FEW INSTANCES WHERE THE BROKERAGE WAS MORE THAN THE AVERAGE AND THE A.O. SEGREGATED FEW INSTANCES OF BROKERAGE WHEREAS THE D IFFERENCE IN RATE CAN BE IT(SS) NO. 586/MUM/2004 SHRI SATRAMDAS G. FATEHCHANDANI 7 ANALYSED FROM 0.1% TO 0.6% TO 0.9% AND ON THE BASIS OF THESE ANNEXURES THE A.O. CAME TO A CONCLUSION THAT AVERAGE RATE OF BROKERAGE WAS 0.25% OF THE LOANS ADVANCED BY THE ASSESSEE. SINCE IT IS A S EARCH AND SEIZURE ASSESSMENT AND ASSESSEES TRANSACTIONS INDICATE THA T IT HAS RECEIVED ONLY 0.1% OF COMMISSION ON WHICH THE ASSESSEE HAS ARRIVE D AT THE BROKERAGE INCOME OUTSIDE THE BOOKS OF ACCOUNT CORRECTLY AND D ECLARED THE INCOME, ASSESSING OFFICERS BASIS FOR MULTIPLYING IT BY 2.5 TIMES HOLDING THAT IT WAS 0.25% WAS NOT CORRECT. HE THEN EXPLAINED THE METHOD OLOGY ADOPTED BY THE ASSESSEE IN TAKING THE LOANS AND COMMISSION ARRIVED AT IN HIS BUSINESS OF ARRANGING LOANS ON COMMISSION BASIS. 10. THE LEARNED D.R., HOWEVER, REFERRED TO THE ASSESSME NT ORDER IN WHICH THE ASSESSEE USED VARIOUS CODES IN RECORDING TRANSA CTIONS LIKE D, D-1, D-2 AND HOW ASSESSEES EXPLANATION WAS NOT CORRECT AND THE A.O. HAS BEEN PAIN- STAKINGLY WORKED OUT THE COMMISSION AND SINCE THE A VERAGE COMMISSION WAS COMING TO 0.25% THE SAME CAN BE CONFIRMED, WHICH TH E CIT(A) HAS DONE. ACCORDINGLY IT WAS HIS CONTENTION THAT THE BROKERAG E COMMISSION OF 0.25% IS CORRECT. 11. WE HAVE CONSIDERED THE ISSUE AND EXAMINED THE DETAI LS. AS SEEN FROM ANNEXURES A TO E THE A.O. HAS ARRIVED AT THE DIFFER ENCE IN THE RATE OF COMMISSION STARTING FROM 0.1% TO 0.9% IN VARIOUS AN NEXURES A-E. HE ALSO CONSIDERED THE SEIZED MATERIAL IN TWO DIFFERENT BUN DLES, AND ARRIVED AT THE RATE OF INTEREST, THE DIFFERENCE OF INTEREST AND DE TERMINED THE BROKERAGE. FOR EXAMPLE, THE FIST ENTRY IN ANNEXURE A IS A LOAN OF ` 25,000/- ON 26.03.2000 TO ONE MR. NANDLAL TALREJA. THE SEIZED PAPER N/3/12 /30 INDICATE THE AMOUNT OF INTEREST AT ` 1125. SEIZED PAPER IN N/3/5/38 INDICATE THE LOAN AT ` 25,000/- AND RATE OF INTEREST AT 1.4%. SINCE THE DE RIVED RATE OF INTEREST WAS 1,5% THE A.O. ARRIVED AT THE DIFFERENCE IN RATE AT 0.1% AND BROKERAGE OF ` 75/- FOR THREE MONTH PERIOD. LIKEWISE HE HAS COMPAR ED THE SEIZED MATERIAL IN TWO DIFFERENT BUNDLES AND PAIN STAKINGLY MADE A CHART IN ANNEXURES A TO E. AS SEEN FROM THESE ANNEXURES THE BROKERAGE RATE IS VARYING FROM 0.1% TO 0.9% ON VARIOUS TRANSACTIONS. SINCE THE ENTIRE SEIZ ED MATERIAL RUNS INTO THOUSANDS OF TRANSACTIONS, IT WAS ASSESSEES CONTEN TION THAT THERE ARE FEW IT(SS) NO. 586/MUM/2004 SHRI SATRAMDAS G. FATEHCHANDANI 8 TRANSACTIONS IN WHICH MORE AMOUNT HAS BEEN RECEIVED BUT THE AVERAGE RATE WAS 0.1% AND THE ASSESSEE HAS DISCLOSED THE COMMISS ION BY 0.1% ITSELF AT ` 16,18,995/- WHICH WAS MULTIPLIED BY THE A.O. BY 2.5 TIME TO MAKE THE BROKERAGE COMMISSION AT ` 40,47,480/-. THE 0.1% BROKERAGE ADMITTED BY THE ASSESSEE ITSELF INDICATES THAT ASSESSEE HAD A TURNO VER OF ` 161.89 CRORES DURING THE PERIOD. COMPARED TO THE WHOLE TURNOVER, WHAT THE A.O. HAS SEGREGATED FROM THE LIST IS HARDLY 2% OF THE TOTAL TURNOVER. JUST BECAUSE THERE ARE FEW ENTRIES FOR WHICH MORE COMMISSION WAS RECEIVED IT CANNOT BE STATED THAT THE ASSESSEE WAS RECEIVING THE COMMISSI ON AT 0.25% ON THE ENTIRE TURNOVER. SINCE THE SEIZED MATERIAL FOR THE UNACCOUNTED TRANSACTIONS WAS COMPLETE AND SINCE ONLY FEW TRANSACTIONS INDICA TED HIGHER BROKERAGE, IT WOULD BE PROPER IF THE HIGHER BROKERAGE AS WORKED O UT BY THE A.O. IN ANNEXURES A TO E TO THE EXTENT OF ` 2,15,310/- AS REDUCED BY 0.1% BROKERAGE ACCOUNTED FOR IN THE ANNEXURES CAN ONLY BE CONSIDER ED AS THE BROKERAGE RECEIVED OVER AND ABOVE 0.1% BROKERAGE. THERE IS NO EVIDENCE WITH REFERENCE TO RECEIPT OF BROKERAGE ABOVE 0.1% EXCEPT IN FEW CA SES LISTED BY THE A.O. SINCE THE ANNEXURES ALSO INDICATE SOME OF THE TRANS ACTIONS WITH 0.1% BROKERAGE, THE A.O. IS DIRECTED TO EXCLUDE THIS AMO UNT AS THIS TURNOVER WAS ALREADY CONSIDERED BY THE ASSESSEE WHILE DECLARING THE INCOME AND TO TAX ONLY THE ADDITIONAL AMOUNT RECEIVED OVER AND ABOVE 0.1% STATED IN ANNEXURE A TO E. BEFORE PARTING WITH THE ISSUE WE HAVE TO STATE THAT THE A.O. HAS TAKEN PAINS IN ANALYSING THE COMMISSION AS NOTED BY THE ASSESSEE IN THE CODES D, D1, D-2. D-3, D-5, D-8 AND LIKE THA T. HE HAS REFERRED IN PAGES 3 & 4, OF THE ORDER TO ANALYSE THAT THE CODE S D, D-2, D-3 DOES NOT INDICATE THE COMMISSION RECEIVED BY THE ASSESSEE PE R MONTH AT A ` 10, B ` 15/-, C ` 20/-, D ` 25/-, D-2 ` 50/- BUT THESE INDICATE THE AMOUNTS ADVANCED AT A ` 10,000/-, B ` 15,000/-, C ` 20,000, D ` 25,000, D-2 ` 50,000/- LIKEWISE. WE ARE OF THE OPINION THAT THERE IS NO MISMATCH IN THE SUBMISSION OF THE ASSESSEE AND THE FINDINGS OF THE A.O. ACCORDING TO THE ASSESSEE 0.1% OF THE AMOUNT ADVANCED IS CODED AS A, B, C, D AND D-2 ETC. AS PER THE ASSESSEES BUSINESS PRACTICE OF RECORDIN G THE BUSINESS COMMISSION. 1000 TIMES OF THAT COMMISSION IS THE AM OUNT ADVANCED AS IT(SS) NO. 586/MUM/2004 SHRI SATRAMDAS G. FATEHCHANDANI 9 ASSESSEE WAS ENTITLED ONLY FOR 0.1% COMMISSION. IT IS A SIMPLE MATHEMATICAL CALCULATION THAT ` 50,000/- ADVANCE GIVEN AT 0.1% WILL YIELD ` 50/- COMMISSION PER MONTH WHICH THE ASSESSEE HAS RECORDE D AS D IN THE DIARY WHICH THE A.O. FOUND AS AN ADVANCE OF ` 50,000/- BOTH THE STATEMENTS ARE CORRECT IN DIFFERENT PERSPECTIVES. AS FAR AS THE AS SESSEE IS CONCERNED HIS STATEMENT THAT THESE CODES INDICATE COMMISSION PER MONTH HAS TO BE ACCEPTED. THIS ALSO INDICATES THAT THE COMMISSION I S AT 0.1% ONLY AND IS A GENERAL PRACTICE. IN VIEW OF THIS, THE A.O. IS DIRE CTED TO ACCEPT 0.1% AS ADMITTED AND IN THE SPECIFIC CASES WHERE THE ASSES SEE HAS RECEIVED COMMISSION MORE THAN 0.1% AS DETAILED IN ANNEXURES A TO E THE ADDITIONAL COMMISSION. TO THAT EXTENT THE ADDITIONS ARE TO BE REWORKED OUT. WITH THESE DIRECTIONS THE GROUND 3 IS CONSIDERED PARTLY ALLOWE D. 12. GROUND NOS. 4, 5 & 6 PERTAIN TO ADDITION OF HUNDIS FOUND IN ASSESSEES PREMISES. THE FACTS LEADING TO THE PRESENT ISSUE WA S THAT DURING THE COURSE OF SEARCH HUNDIS TO THE EXTENT OF ` 65,40,000/- WAS SEIZED FROM THE ASSESSEES HOUSE AND BUSINESS PREMISES. THE DETAILS OF THE HUNDIS AS MADE OUT BY THE A.O. ARE AS UNDER: - SR.NO. AMOUNT ( ` ) DESCRIPTION REMARKS (A) 22,95,000 THESE ARE THE CHEQUE HUNDIS RELATING TO APPELLANTS BUSINESS FOR WHICH NO ADDITIONS WERE MADE ACCEPTED BY THE A.O. (B) 19,50,000 THESE ARE THE HUNDIS FOR WHICH NO TRANSACTION TOOK PLACE SOME OF THE PARTIES CALLED & VERIFIED BY DDIT (INV.), KALYAN. (CONFIRMATION ENCLOSED) (C) 22,75,000 THESE HUNDIS ARE THE CASH HUNDIS PERTAINING TO THE APPELLANTS BUSINESS TRANSACTION AND DULY REFLECTED IN THE REGULAR DIARIES. NORMAL BUSINESS TRANSACTION, REFLECTED IN REGULAR DIARIES. (D) 20,000 --------------- THIS HUNDI IS GIVEN BY THE APPELLANTS FRIEND FOR RECEIVING THE AMOUNT FROM BORROWER M/S. NIRANKARI TYRE WORKS M/S. NIRANKARI TYRE WORKS REFUSED TO PAY THE AMOUNT TO HIS FRIENDS. 65,50,000 IT(SS) NO. 586/MUM/2004 SHRI SATRAMDAS G. FATEHCHANDANI 10 13. AS PER THE REMARKS ABOVE THE AMOUNT OF ` 22,95,000/- WAS HUNDI RELATING TO ASSESSEES CHEQUE BUSINESS FOR WHICH BO OKS OF ACCOUNTS ARE MAINTAINED AND DECLARED TO THE DEPARTMENT. ACCORDIN GLY THOSE INCOMES OF BROKERAGE/AMOUNTS WERE ACCEPTED BY THE A.O. AND NO ADDITION WAS MADE IN THE BLOCK ASSESSMENT. WITH REFERENCE TO THE BALANCE AMOUNT THE HUNDI PERTAINING ` 19,50,000/- AT ITEM (B) ABOVE ARE STATED TO BE BLAN K HUNDIS FOR WHICH NO FINANCING WAS UNDERTAKEN BY THE ASSESSEE A ND THOSE ARE AVAILABLE ON THE DAY OF SEARCH. THE ASSESSEE SUBMITTED THE DE TAILS OF THE PARTIES AND MANY OF THEM ARE VERIFIED BY THE DIT (INV), KALYAN WHO SUBMITTED THAT THEY HAVE NOT AVAILED FINANCE BUT, FOR AVAILING FINANCE THEY PROVIDED THE HUNDIS TO THE ASSESSEE. THE A.O. DISBELIEVED ASSESSEES CONTE NTION AND MADE ADDITION OF THE VALUE OF THE HUNDIS AS ASSESSEES OWN INVEST MENT IN HUNDI BUSINESS. GROUND NO. 4 IS RAISED ACCORDINGLY. 14. WITH REFERENCE TO THE AMOUNT OF ` 22,75,000/-, THESE ARE THE HUNDIS PERTAINING TO ASSESSEES BUSINESS WHICH IS NOT DISC LOSED TO THE DEPARTMENT BUT BOOKS OF ACCOUNT IN THE FORM OF DIARIES WERE MA INTAINED ON THE BASIS OF WHICH THE ASSESSEE HAS DISCLOSED BROKERAGE INCOME I N THE BLOCK ASSESSMENT AND THE A.O. REWORKED OUT THE BROKERAGE COMMISSION AS DISCUSSED IN THE EARLIER GROUND 3. IN ADDITION TO THE ADDITION OF B ROKERAGE INCOME THE A.O. ALSO CONSIDERED THE AMOUNT INVOLVED THEREIN AS ASSE SSEES OWN MONEY IN THE ABSENCE OF DETAILS OF THE LENDERS. GROUND NO. 5 PER TAINS TO THIS AMOUNT. 15. THE NEXT IS A SMALL AMOUNT OF HUNDI OF ` 20,000/- FOUND IN ASSESSEES PREMISES STATED TO HAVE BEEN PERTAINING TO A FRIEND OF THE ASSESSEE WHO REFUSED TO PAY THE AMOUNT AND ASSESSEE WAS ASKED TO COLLECT THE AMOUNT FROM HIS FRIEND BY THE LENDER. IT IS ASSESSEES CON TENTION WAS THAT THE HUNDI DOES NOT PERTAIN TO HIM. 16. THE A.O. DID NOT ACCEPT THE CONTENTIONS AND ADDED THE ABOVE THREE TYPES OF HUNDI VALUE. THE CIT(A) ALSO HAS NOT ACCEP TED ASSESSEES CONTENTION AND CONFIRMED THE SAME BY OBSERVING AS UNDER: - IT(SS) NO. 586/MUM/2004 SHRI SATRAMDAS G. FATEHCHANDANI 11 3.4 I HAVE GONE THROUGH THE BLOCK ASSESSMENT ORDER AND THE SUBMISSIONS MADE DURING THE APPELLATE PROCEEDINGS. I HAVE ALSO GONE THROUGH THE REMAND REPORT DATED 26.02.2004. IT IS S EEN THAT HUNDI OF RS.65,40,000/- WERE FOUND AND SEIZED FROM THE RESID ENTIAL PREMISES OF THE APPELLANT. OUT OF THESE, HUNDI OF RS. 22,95,000 /- WERE RELATED TO THE CHEQUE HUNDI. THESE WERE ALREADY REFLECTED IN THE R EGULAR BOOKS OF ACCOUNTS OF THE APPELLANT. THIS HAS BEEN ACCEPTED B Y THE ASSESSING OFFICER. THE HUNDI OF RS.19,50,000/- PERTAINING TO HUNDI WERE NO TRANSACTION WAS CLAIMED TO HAVE BEEN MADE. IT IS, H OWEVER, SEEN THAT SUM MENTIONED IN HUNDI ARE RECORDED IN CASH. HUNDIS WERE FOUND FROM THE POSSESSION OF THE APPELLANT. IT IS A SIGNED DOC UMENT ON WHICH BORROWER IS EXPECTED TO HAVE RECEIVED THE MONEY. IN SUCH A CIRCUMSTANCES, DENIAL BY BOTH THE PARTIES OF THE HU NDIS CANNOT BE ACCEPTED. APPELLANT, HOWEVER, HAS NOT FURNISHED ANY FURTHER EVIDENCES FROM THE LENDER IN SUPPORT OF ITS CLAIM. IN VIEW OF THESE FACTS, ADDITION ON ACCOUNT OF HUNDIS OF RS.19,50,000/- IS FULLY JUSTIF IED. SO FAR AS HUNDI OF RS.22,75,000/- ARE CONCERNED, I T IS SEEN THAT THEY ARE REFLECTED IN THE SEIZED DIARIES. HOWEVER, ENTRIES IN THESE DIARIES ARE NOT REFLECTED IN THE REGULAR BOOKS OF ACCOUNTS. IT IS FURTHER SEEN THAT NAME OF THE LENDER IS GIVEN IN A CODED MANNER. INSP ITE OF BEING ASKED, APPELLANT COULD NOT FURNISH CONFIRMATIONS FROM THE LENDERS OF HAVING GIVEN AMOUNTS MENTIONED AGAINST THE HUNDI DURING TH E APPELLATE PROCEEDINGS. IN VIEW OF THESE FACTS AND CIRCUMSTANC ES, ADDITION OF ` 22,75,000/- BY THE ASSESSING OFFICER WAS FULLY JUST IFIED ON THE BASIS OF SEIZED PAPERS. SO FAR AS HUNDI OF RS.20,000/- IN THE NAME OF BORR OWERS M/S. NIRANKARI TYRE WORKS IS CONCERNED, APPELLANT HAD NO T GIVEN THE NAME OF M/S. NIRANKARI TYRE WORKS IN ITS SUBMISSION. IT IS FURTHER SEEN THAT APPELLANT HAS FAILED TO FURNISH ANY EVIDENCE TO SUP PORT HIS CLAIM. THERE IS NO REGULAR ENTRY OF THIS HUNDI IN THE BOOKS OF A CCOUNTS OF THE APPELLANT OR M/S. NIRANKARI TYRE WORKS DURING THE BLOCK ASSES SMENT PROCEEDINGS OR DURING THE APPELLATE PROCEEDINGS. ADDITION OF RS .20,000/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE FORM OF HUNDI OF M /S. NIRANKARI TYRE WORKS IS THUS FULLY JUSTIFIED. IN SHORT, I HEREBY CONFIRM THE ADDITION OF RS.42,4 5,000/- (19,50,000 + 22,75,000 + 20,000) ON ACCOUNT OF UNEX PLAINED INVESTMENT IN HUNDI FOR THE BLOCK PERIOD AS MADE IN THE BLOCK ASSESSMENT ORDER. 17. THE LEARNED COUNSEL REFERRED TO THE PAPER BOOKS AND THE ORDERS ON THIS ISSUE TO SUBMIT THAT DETAILS OF HUNDIS FOUND AND SE IZED ARE AVAILABLE IN THE PAPER BOOK AT PAGE NO. 49 AND CONFIRMATIONS GIVEN B Y THE PARTIES FOR ARRANGING FINANCE BUT NOT AVAILED FINANCE WERE AVAI LABLE AT PAGE NOS. 50, 52,57 & 59. THE LEARNED COUNSEL REFERRED TO THE REM AND REPORT OF THE A.O. AT PAGE NO. 189 OF THE PAPER BOOK TO SUBMIT THAT THE A .O. ACCEPTED THAT THE PARTIES HAVE APPEARED BEFORE THE DEPARTMENT. HE THE N REFERRED TO THE IT(SS) NO. 586/MUM/2004 SHRI SATRAMDAS G. FATEHCHANDANI 12 OBSERVATIONS OF THE A.O. AND THE CIT(A) TO SUBMIT T HAT THE DEPARTMENT HAS VERIFIED FROM THE PARTIES TO CONFIRM THAT THEY HAVE NOT AVAILED ANY FINANCE BUT GAVE SIGNED BLANK HUNDIS FOR ARRANGEMENT OF FIN ANCE, WHICH DID NOT MATERIALISE. IT WAS HIS CONTENTION THAT SINCE NO TR ANSACTION HAS TAKEN PLACE, NO ADDITION CAN BE MADE EVENTHOUGH THE SAID BLANK H UNDIS WERE AVAILABLE WITH THE ASSESSEE. WITH REFERENCE TO THE ADDITION O F ` 22,75000/- IT WAS SUBMITTED THAT THIS HUNDI PERTAINS TO THE TRANSACTI ONS WHICH ARE ENTERED IN THE DIARIES AND THESE DIARIES ARE EXAMINED AND CONS IDERED FOR COMPUTING UNDISCLOSED BROKERAGE INCOME FOR THE BLOCK PERIOD. IT IS ALSO HIS SUBMISSION THAT NAMES OF THE LENDERS AND BORROWERS WERE FURNIS HED TO THE A.O. AND REFERRED TO PAGES 61 & 62 IN THE PAPER BOOK AND PAG ES 312 AND 313 TO SUBMIT THAT THE DETAILS OF THE LENDERS AND BORROWER S WITH ADDRESSES WERE FURNISHED. HE FURTHER REFERRED TO ASSESSEES LETTER DATED 28.03.2003 FILED BEFORE THE A.O. TO STATE THAT THESE FINANCES ARE AR RANGED-THROUGH TRANSACTIONS AND ASSESSEE IS ONLY GOT COMMISSION AN D NOT OWNER OF THE MONIES. IT WAS HIS FURTHER SUBMISSION THAT THE A.O. HAS ACCEPTED THAT THE ASSESSEE WAS ONLY GETTING BROKERAGE AND THE INTERES T INCOME WAS NOT TAXED AS THERE ARE CLEAR ENTRIES IN THE DIARY ABOUT INTER EST RECEIVED AND INTEREST PAYMENT. IT IS ALSO FURTHER SUBMITTED THAT THE DIAR Y ALSO CONTAINS TELEPHONE NUMBERS ACCORDINGLY THE ASSESSEE HAS MADE AVAILABLE THE ADDRESS AND TELEPHONE NUMBERS OF THE PARTIES. FURTHER IT WAS HI S CONTENTION THAT ALL THE DISCHARGED HUNDIS ARE REFLECTED IN THE DIARIES WHIC H HAVE BEEN CONSIDERED FOR THE PURPOSE OF COMPUTING UNDISCLOSED BROKERAGE INCOME, HENCE, ADDITION ON ACCOUNT OF INVESTMENT IN HUNDIS WILL AMOUNT TO D OUBLE ADDITION. WITH REFERENCE TO THE HUNDI OF ` 20,000/- IT WAS SUBMITTED THAT THE FACTS ARE INDICATED TO THE A.O. AND REFERRED TO PAGE 175 OF T HE PAPER BOOK TO SUBMIT THAT CONFIRMATION WAS FILED FROM THE FRIEND ON WHOS E BEHALF THE HUNDI WAS OBTAINED AND IT IS ONLY A ZEROX COPY OF THE HUNDI A ND NOT THE ORIGINAL, FOR THE PURPOSE OF COLLECTING MONEY. IT WAS HIS SUBMISSION THAT NO ADDITION ON THIS ACCOUNT CAN BE MADE. 18. THE LEARNED D.R. IN REPLY SUBMITTED THAT FROM THE P ROVISIONS OF THE ACT THE SUMS WHICH ARE FOUND IN THE PREMISES OF THE ASS ESSEE IS DEEMED TO BE IT(SS) NO. 586/MUM/2004 SHRI SATRAMDAS G. FATEHCHANDANI 13 THE OWNER OF THE HUNDI AND ACCORDINGLY THE A.O. WAS CORRECT IN BRINING THE FACTS OF THE SAME. 19. WE HAVE CONSIDERED THE ISSUE AND EXAMINED THE RECOR D AND ANALYSED THE CONTENTIONS OF THE ASSESSEE AND THE REVENUE. TH ERE IS NO DENIAL OF THE FACT THAT THE HUNDI TO THE EXTENT OF ` 65,00,000/- WAS SEIZED FROM ASSESSEES PREMISES. FURTHER, AS RIGHTLY CATEGORISED BY THE A. O. THESE HUNDIS FORM INTO DIFFERENT CATEGORIES. THE A.O. HIMSELF HAS ACCEPTED THAT HUNDI PERTAINING TO ` 22,95,000/- WERE ACCOUNTED FOR IN ASSESSEES BUSIN ESS DISCLOSED TO THE DEPARTMENT, WHICH CALLED CHEQUE HUNDI BUSINESS. WIT H REFERENCE TO THE BALANCE OF HUNDIS ON WHICH ADDITION IS MADE, WE DO NOT SEE ANY REASON TO UPHOLD ASSESSING OFFICERS ACTION IN BRINING TO TAX THE AMOUNTS AS ASSESSEES UNEXPLAINED INVESTMENT. FIRST OF ALL THE A.O. ACCEP TED THAT THE AMOUNT OF ` 22,75,000/- OF HUNDIS PERTAIN TO ASSESSEES CASH HU NDI BUSINESS FOR WHICH METICULOUS ENTRIES IN THE FORM OF DIARIES MAINTAINE D AND THE A.O. HAS TAKEN PAINS TO ANALYSE THE INTEREST RECEIVED, INTEREST PA ID, BROKERAGE EARNED ON THESE HUNDIS BY CORRELATING WITH THE DIARIES MAINTA INED IN THIS REGARD. HE ALSO MADE ANNEXURE A TO E TO ANALYSE THAT ASSESSEE WAS RECEIVING MORE COMMISSION THAN WHAT WAS DISCLOSED IN THE BLOCK ASS ESSMENT. THESE WERE ALREADY CONSIDERED IN GROUND NOS. 3. SUFFICE TO SAY THAT THE AMOUNTS WHICH WERE ADVANCED BY THESE HUNDIS DOES NOT PERTAIN TO T HE ASSESSEE AS THE TRANSACTIONS INVOLVED THEREIN RUN INTO CRORES OF RU PEES AND THESE HUNDIS ARE RENEWED EVERY THREE MONTHS. THE MONIES INVOLVED THE REIN DO PERTAIN TO THIRD PARTIES AND THIS FACT WAS ALSO ACCEPTED BY THE A.O. THE A.O. IN FACT HAS NOT BROUGHT ANY INTEREST TO TAX AS ASSESSEES INCOME. O THERWISE THE INTEREST INCOME EARNED SHOULD HAVE BEEN TAXED IN ASSESSEES HANDS. THE OVERWHELMING EVIDENCE IN THE FORM OF SIZED MATERIAL DO INDICATE THAT ASSESSEE WAS EARNING ONLY COMMISSION AND THE RATE O F COMMISSION WAS ONLY DISPUTED WHEREAS RECEIPT OF INTEREST AND PAYMENT OF INTEREST WAS NOT DOUBTED AT ALL. THIS INDICATES THAT THE ENTIRE CASH HUNDI BUSINESS WAS ON THE BASIS OF FUNDS OF THIRD PARTIES AND ASSESSEE WA S ONLY GETTING COMMISSION. IN VIEW OF THIS, THERE IS NO NEED TO CO NSIDER THE HUNDIS AVAILABLE IN ASSESSEES PREMISES AS PERTAINING TO T HE ASSESSEE. MOREOVER, THE IT(SS) NO. 586/MUM/2004 SHRI SATRAMDAS G. FATEHCHANDANI 14 A.O. ALSO GIVES A FINDING THAT THERE IS NO CORRESPO NDING SEIZURE OF ASSETS SO AS TO JUSTIFY THAT THESE ARE ASSESSEES FUNDS. SINC E THE A.O. ACCEPTED THE DIARY TRANSACTIONS IN ARRIVING AT THE BROKERAGE INC OME, THE HUNDIS PERTAINING TO THAT TRANSACTIONS ARE ALSO TO BE EXCL UDED AS WAS DONE IN THE CHEQUE HUNDI BUSINESS. BOTH THE HUNDIS STAND ON THE SAME FOOTING EVENTHOUGH ONE SET OF TRANSACTIONS IS RECORDED IN T HE BOOKS OF ACCOUNT AND DISCLOSED EARLIER AND OTHER SET OF TRANSACTIONS NOW COMPLETE IN ALL RESPECTS AND VERIFIABLE BASED ON THE SEIZED MATERIAL. IN VIE W OF THIS, THERE IS NO JUSTIFICATION FOR ADDING THE AMOUNT OF ` 22,75,000/- AS ASSESSEES INCOME. IN LINE WITH THE ABOVE DECISION WE ARE ALSO OF THE OPI NION THAT THE HUNDIS OF ` 19,50,000/- ALSO CANNOT BE CONSIDERED AS ASSESSEES UNDISCLOSED INVESTMENT. FIRST OF ALL IT IS THE CONTENTION THAT ASSESSEE HAS NOT ADVANCED/ARRANGED ANY FINANCE AND THOSE PARTIES WHO SE NAMES HUNDIS ARE AVAILABLE HAVE APPEARED BEFORE THE DDIT AND CONFIRM ED THAT NO FINANCE WAS ARRANGED. EXCEPT THE BLANK SIGNED HUNDIS, THERE IS NO OTHER EVIDENCE THAT THE ASSESSEE HAS ADVANCED FUNDS. IN FACT THE SEIZED MATERIAL IN THE FORM OF DIARIES CONTAIN THE ENTIRE TRANSACTIONS OF THE ASSE SSEES CASH HUNDI BUSINESS AND THIS INDICATES THAT THE HUNDIS PERTAINING TO ` 19,50,000/- WERE NOT AL ALL A FINANCED HUNDI BUT BLANK HUNDI. HAD ASSESSEE ADVA NCED FUNDS/ARRANGED FUNDS PERTAINING TO THESE HUNDIS THE ASSESSEE WOULD HAVE MAINTAINED THE DETAILS IN THE DIARIES AS PER THE MODUS OPERANDI BE ING FOLLOWED WITH REFERENCE TO CASH HUNDIS. SINCE THERE IS NO EVIDENC E OF ARRANGING FINANCE EITHER IN THE CHEQUE HUNDI BUSINESS OR IN THE CASH HUNDI BUSINESS THE ASSESSEES ARGUMENT THAT NO FINANCE WERE ARRANGED A ND BLANK SIGNED CHEQUES WERE ISSUED FOR ARRANGING FINANCE HAS TO BE ACCEPTED. IN VIEW OF THIS, WE ARE OF THE OPINION THAT THE AMOUNT INVOLVE D IN THESE ALSO NEED NOT BE CONSIDERED AS UNEXPLAINED INVESTMENT OF ASSESSEE WHEN THE ASSESSEE HAS NOT UNDERTAKEN ANY BUSINESS ON THESE HUNDIS AND FUR THER THERE IS NO EVIDENCE TO INDICATE THAT ASSESSEE HAS UNDERTAKEN T HE BUSINESS OF FINANCING ON THESE HUNDIS. SIMILAR IS THE CASE WITH ` 20,000/-, PHOTOCOPY OF WHICH WAS AVAILABLE WITH THE ASSESSEE. IT IS THE EXPLANATION THAT THE AMOUNT WAS BORROWED BY M/S. NIRANKARI TYRE WORKS THROUGH A FRI END OF THE ASSESSEE BUT REFUSED TO PAY THE AMOUNT TO THE LENDER. THESE TYPE S OF TRANSACTIONS ARE IT(SS) NO. 586/MUM/2004 SHRI SATRAMDAS G. FATEHCHANDANI 15 GENERALLY OCCUR IN THE MARKET. SINCE ONLY A SMALL A MOUNT OF ` 20,000/-, THAT TOO A PHOTOCOPY WAS AVAILABLE WITH THE ASSESSEE, CAN NOT BE STATED THAT THE AMOUNT PERTAINS TO THE ASSESSEE. SINCE THE ASSESSE E IS ONLY ARRANGING FINANCE ON BROKERAGE AND NOWHERE IT WAS ID ENTIFIED/DETECTED IN THE SEARCH THAT THE ASSESSEE HAS OWNED CASH FOR CASH HUNDI BUSINESS THE HUNDI AMOUNT CANNOT BE CONSIDERED AS INC OME OF THE ASSESSEE. ACCORDINGLY THE ASSESSEES CONTENTIONS WERE ACCEPTED. GROUNDS ARE ALLOWED. A.O. IS DIRECTED TO DELETE THE AD DITION OF ` 19,50,000/- OF GROUND NO. 4, ` 25,75,000/- OF GROUND NO. 5 AND ` 20,000/- OF GROUND NO. 6. 20. GROUND NO. 7 PERTAINS TO ADDITION OF ` 2,13,273/- TOWARDS FURNITURE AS PART OF UNDISCLOSED INCOME WITHOUT APPREC IATING THAT THE SAME WAS DULY DISCLOSED IN THE RETURN OF THE ASSESSEE AND HIS WIFE AND BALANCE OF ` 51,029/- WERE DULY ADMITTED IN THE BLOCK RETURNS. 21. IT WAS ASSESSEES CONTENTION THAT THE ASSESSEE HAS DISCLO SED INVESTMENT OF ` 2,26,000/- IN REGULAR RETURNS AND HENCE THE SAME CANNOT BE ADDED IN THE ASSESSMENT. BALANCE AMOUNT OF ` 51,029/- WAS DULY ADMITTED IN THE BLOCK RETURNS. IT WAS ASSESSEES CO NTENTION THAT THE ASSESSEE HAS SHOWN AN AMOUNT OF ` 1,57,600/- IN THE BALANCE SHEET FOR FINANCIAL YEAR 1997-98 AND ` 51,000/- IN WIFES BALANCE SHEET AND AN AMOUNT OF ` 51,029/- STAND ADDED IN THE BLOCK RETURNS. THE A.O. DID NOT AGREE WITH THE ABOVE STATING THAT THE AMOU NTS SEIZED IN BUNDLE 7 ARE ENTIRELY DIFFERENT WITHOUT STATING WHAT IS S TATED IN BUNDLE 7 . THE CIT(A) ALSO STATES IN PARA 4.3 THAT BUNDLE 7 S EIZED BY PARTY NO. N-2 INDICATES THAT THE ASSESSEE HAS SPENT AN AMOUNT OF ` 2,13,273/- DURING F.Y. 1998-99 TOWARDS PAINTING AND POLISHING W ORK. THESE AMOUNTS ARE DIFFERENT FROM PURCHASES SHOWN, ACCORDIN GLY HE CONFIRMED THE SAME. HOWEVER, THERE IS NO FINDING WITH REFERENCE TO THE AMOUNT OF ` 51,029/- ADMITTED BY THE ASSESSEE IN THE BLOCK RETURN. I T WAS ASSESSEES CONTENTION THAT SINCE THE BLOCK ASSESSME NT WAS OFFERED IT(SS) NO. 586/MUM/2004 SHRI SATRAMDAS G. FATEHCHANDANI 16 ON SOURCE BASIS AND UNEXPLAINED INVESTMENT/ASSETS ARE TO BE GIVEN CREDIT. AS SEEN FROM THE DISCLOSURE OF INCOME IN THE BLOCK ASSESSMENT, THE ASSESSEE HAS DISCLOSED ` 15,81,648/- TOWARDS COMMISSION AND UNDISCLOSED INCOME AND TOOK CREDIT FOR THE FOLLOWING A MOUNTS: (I) CASH ` 10,47,700/-, (II) BELONGING TO HEENA TRADERS ` 1,00,000/- AND, (III) FURNITURE ACCOUNT ` 51,029/-. SO THERE IS TRUTH IN ASSESSEES CONTENTION THAT AN AMOUNT OF ` 51,029/- WAS DISCLOSED IN BLOCK RETURNS. WITH REFERENCE TO THE BALANCE AMOUNT THE ASSESS EE CLAIMS DEDUCTION FOR THE AMOUNT OF ` 2,26,000/- DISCLOSED IN THE RETURN. THIS ASPECT HAS NOT BEEN EXAMINED BY THE A.O. AT ALL. WE ARE ALSO NOT SURE WHAT BUNDLE 7 INDICATES AND HOW THESE ARE NOT PERTAINING TO THE AMOUNT DISCLOSED, FINANCIAL YEAR BEING THE SAME 1998- 99. THESE REQUIRE EXAMINATION. ACCORDING, WHILE GIVING CREDIT TO RS.51,029/- DISCLOSED BY THE ASSESSEE THE BALANCE AMOUNT ONLY IS D IRECTED TO BE VERIFIED BY THE A.O. WHETHER THIS IS ALREADY DISCLOSE D IN THE BOOKS OF ACCOUNT OR CAN BE GIVEN CREDIT TO THE INCOME ALREADY DISCLOSED. THE A.O. ALSO, VIDE PARA 27 OF THE ORDER, GIVES CREDIT FO R THE CASH FOUND OF ` 10.47,700/- TO THE UNDISCLOSED INCOME. THEREFORE THE A.O. IS DIRECTED TO EXAMINE AND GIVE CREDIT IF ACCOUNTED AND DISCLOSED AS SUBMITTED. IF FOUND UNACCOUNTED HE CAN EXAMINE WHETHER THE SAME CAN BE GIVEN CREDIT OUT OF THE AMOUNT DISCLOSED. THIS ISSUE IS RESTOR ED TO THE FILE OF THE A.O. FOR DOING THE NEEDFUL. 22. GROUND NO. 8 PERTAINS TO CONFIRMATION OF ` 68,979/- PERTAINING TO HUNDIS WHICH THE ASSESSEE CLAIMS PERTAINS TO REGULAR B USINESS TRANSACTIONS. THE FACT INDICATE THAT HUNDIS TO THE EXTENT O F ` 2,43,797/- WERE FOUND IN THE OFFICE PREMISES OF THE A SSESSEE IN THE COURSE OF SEARCH OUT OF WHICH HUNDIS TO THE EXTENT OF ` 1,75,000/- WERE DISCLOSED IN THE REGULAR RETURN. SINCE THE ASSESSEE HA S NOT FURNISHED ANY EXPLANATION OR EVIDENCES REGARDING THE BALANCE H UNDIS OF ` 68,979/- THE SAME WERE TREATED AS ASSESSEES INCOME UNDER SECTION IT(SS) NO. 586/MUM/2004 SHRI SATRAMDAS G. FATEHCHANDANI 17 132(4A) PRESUMPTIONS. BEFORE THE CIT(A) IT WAS SUBMITT ED THAT THESE HUNDIS DOES NOT BELONG TO THE ASSESSEE. THE CIT(A), VI DE PARA 5.3 OF THE ORDER CONFIRMED THE ADDITION AS THE SAME WAS NOT EX PLAINED. THIS GROUND WAS NOT TAKEN BEFORE THE LOWER AUTHORITIES. WE ARE ALSO NOT PLACED WITH ANY EVIDENCE TO EXAMINE WHETHER THESE HUNDI S ARE DISCLOSED HUNDIS OR UNDISCLOSED HUNDIS. AS SEEN FRO M THE ORDER OF THE A.O., HUNDIS TO THE EXTENT OF ` 2,43,797/- WERE SEIZED AND EXPLANATION WAS GIVEN TO THE EXTENT OF ` 1,75,000/-, CONSEQUENTLY ADDITION WAS MADE. SINCE THERE ARE CONTRARY STATEMENTS BEFORE THE LOW ER AUTHORITIES AND THE GROUND RAISED BEFORE US, IN THE INTEREST OF JUS TICE, THE ISSUE IS RESTORED BACK TO THE FILE OF THE A.O. TO EXAMINE WHETHER THERE IS ANY EXPLANATION FURNISHED BY THE ASSESSEE THAT THESE HUNDIS ARE PERTAINING TO THE ASSESSEES REGULAR BUSINESS TRANSAC TIONS. THE A.O. IS DIRECTED TO EXAMINE THIS ASPECT VIS--VIS THE REGULAR TRANSACTIONS FROM THE RECORD AND DECIDE ACCORDINGLY. GROUND IS PARTLY A LLOWED. 23. GROUND NO. 9 PERTAINS TO THE ISSUE OF CONFIRMING THE ADDITION OF ` 1,00,000/- TOWARDS JEWELLERY WITHOUT APPRECIATING THAT T HE SAID JEWELLERY PERTAINS TO HIS WIFE AND WITHOUT ESTABLISHIN G THAT THE ASSESSEE WAS OWNER THEREOF. 24. DURING THE COURSE OF SEARCH JEWELLERY TO THE EXTENT OF ` 5,63,062/- WAS FOUND AND ASSESSEES WIFES STATEMENT RECORDED W HEREIN IT WAS STATED THAT MAJORITY OF THE JEWELLERY WAS RECEIVED A T THE TIME OF MARRIAGE AND SHE HAD MADE FEW JEWELLERY FROM TIME TO TIME AN D ALSO RECEIVED SMALL AMOUNTS OF GIFTS. IT WAS FURTHER STATED THAT TH E JEWELLERY PURCHASED WERE FROM THE WITHDRAWALS FROM HER ACCOUNT AND SAVINGS FROM HOUSEHOLD EXPENSES. THE A.O. GIVES THE CONCLUS ION THAT WITHDRAWALS SHOWN BY THE ASSESSEE ARE BARELY SUFFICI ENT FOR THE DAY-TO- DAY HOUSEHOLD EXPENSES AND THERE ARE NO RECIPROCAL G IFTS SHOWN IN THE BALANCE SHEET. ACCORDINGLY, OUT OF AN AMOUNT, IT WA S SUBMITTED THAT AN AMOUNT OF ` 1,00,000/- STATED IS UNDISCLOSED INCOME. THE CIT(A) HAS IT(SS) NO. 586/MUM/2004 SHRI SATRAMDAS G. FATEHCHANDANI 18 CONFIRMED THE SAME. THE ASSESSEES OBJECTION WAS THA T THE JEWELLERY BELONGS TO HIS WIFE AND NO ADDITION CAN BE MADE IN TH E HANDS OF THE ASSESSEE. EVEN OTHERWISE THE A.O. HAS NO BASIS IN NO T GIVING CREDIT TO THE JEWELLERY RECEIVED AT THE TIME OF MARRIAGE AND PURCHASES. ONLY AN AMOUNT OF ` 1,00,000/- WAS CONSIDERED. WITH OUT PREJUDICE SINCE THE ASSESSEE HAS DISCLOSED MORE AMOUNT THAT TAKEN CREDIT IN THE BLOCK ASSESSMENT, THIS AMOUNT ALSO CAN BE CONSIDERED BY W AY OF CREDIT. 25. WE HAVE HEARD THE LEARNED COUNSEL AND THE LEARNED D. R. AS SEEN FROM THE FACTS THERE IS NO BASIS FOR ARRIVING AT ` 1,00,000/- NOTIONAL INVESTMENT OUT OF THE JEWELLERY FOUND OF ` 5,63,062/-. FIRST OF ALL THE A.O. HAS NOT EXAMINED WHETHER THE ADDITION WAS TO B E MADE IN THE HANDS OF THE ASSESSEE OR HIS WIFE AND HER STATEMENT WAS RECORDED, WHICH WAS EXTRACTED BY THE A.O. IN THE ASSESSMENT OR DER. THE REASONS MENTIONED BY THE A.O. IN ARRIVING AT ` 1,00,000/- UNEXPLAINED INVESTMENT IN JEWELLERY IS NOT SUPPORTED BY ANY EVI DENCE. MOREOVER, OUT OF ` 15,81,648/- DISCLOSED THE ASSESSEE HAS TAKEN CREDIT TOWARDS ASSESSEE IN THE INVESTMENT TO AN EXTENT OF ` 12,14,234/- WHILE FILING THE BLOCK ASSESSMENT, WHICH IS MORE THAN DISCLOSED BY TH E ASSESSEE TO COVER UP ANY SHORTFALL IN THIS REGARD. THEREFORE, ` 1,00,000/- INVESTMENT IN JEWELLERY ALSO CAN BE GIVEN CREDIT. THEREFORE, W E ARE OF THE OPINION THAT SINCE THE BLOCK ASSESSMENT IS DONE ON SOURCE B ASIS, THIS INVESTMENT IN JEWELLERY CAN BE CONSIDERED OUT OF THE INCOME DISCLOSED. THEREFORE, THE A.O. IS DIRECTED TO DELETE THE DEDUC TION SO MADE. 26. GROUND NO. 10 PERTAINS TO THE INCOME DISCLOSED IN THE H ANDS OF THE WIFE BEING TREATED AS INCOME OF THE ASSESSEE OF ` 3,23,170/-. 27. DURING THE BLOCK ASSESSMENT PROCEEDINGS THE A.O. NOT ED THAT STATEMENT OF THE ASSESSEES WIFE WAS RECORDED ON 27 .09.2001. SHE WAS ASKED TO EXPLAIN WHETHER SHE WAS RUNNING ANY BUSINE SS/ OCCUPATION. SHE HAD STATED THAT SHE WAS NOT KNOWING ANYTHING. D URING THE BLOCK ASSESSMENT PROCEEDINGS, ASSESSEE HAD EXPLAINED THAT HIS WIFE MRS. IT(SS) NO. 586/MUM/2004 SHRI SATRAMDAS G. FATEHCHANDANI 19 KIRAN FATEHCHANDANI HAD THOUGHT THAT THE DEPARTMENT W ANTED TO KNOW WHETHER HER HUSBAND WAS CONDUCTING ANY BUSINESS IN H ER NAME. IT WAS BECAUSE OF THIS REASON THAT SHE HAD REPLIED THAT SHE DID NOT KNOW. ASSESSEE HAD CONTENDED THAT DURING THE DAY OF SEARCH , ASSESSEES WIFE WAS ALONE AND THEREFORE SHE WAS UNDER TREMENDOUS MEN TAL STRESS AND COULD NOT USE HER MIND PROPERLY. A.O. NOTED THAT ALL EGED BUSINESS OF STITCHING SHOWN IN ASSESSEES WIFES RETURN WAS NEV ER CARRIED OUT BY HER. A.O. NOTED THAT NO STITCHING ACTIVITY WAS NOTICE D DURING THE COURSE OF SEARCH. NO SEWING MACHINE WAS REFLECTED IN THE L IST OF VALUABLES INVENTORISED DURING THE COURSE OF SEARCH. AS PER A.O . THE ASSESSEE HAD DIVERTED HIS UNDISCLOSED INCOME IN THE NAME OF HIS WIFE. SINCE THE ASSESSEES UNDISCLOSED INCOME FOR F.Y. 1999-2000 AN D FOR THE BROKEN PERIOD OF F.Y 2000-01 WAS TAXED SEPARATELY, INCOME SHOWN IN WIFES RETURN FOR THIS YEARS WERE TREATED AS APPLICATION OF THAT INCOME. INCOME OF THE REMAINING PERIOD SHOWN IN THE HANDS OF THE WIF E WAS TAXED AS ASSESSEES UNDISCLOSED INCOME AT ` 3,23,170/- AS UNDER: - F.Y. UNDISCLOSED INCOME ( ` ) 1996-97 40,670/- 1997-98 56,400/- 1998-99 64,800/- 1999-2000 67,500/- 2000-01 93,800/- 3,23,170/- DURING THE APPELLATE PROCEEDINGS, ASSESSEE HAS TAK EN STRONG OBJECTION TO THE ADDITION OF ` 3,23,170/- IN THE HANDS OF THE ASSESSEE OUT OF RETU RN OF INCOME SHOWN IN THE NAME OF ASSESSEES WIFE. ASSESS EE HAS CONTENDED THAT A.O. HAD MADE WRONG ADDITION OF ` .3,23,170/- OUT OF WIFES RETURNED INCOME FOR F.Y. 1996-97 TO F.Y. 2000-01. ASSESSEE HAS CONT ENDED THAT ADDITION WAS WITHOUT AN IOTA OF EVIDENCE. ADDITION WAS SIMPLY BA SED ON THE ANSWER TO ONE QUESTION ASKED BY THE ASSESSEES WIFE DURING THE CO URSE OF SEARCH. THE ASSESSEE HAS CONTENDED THAT ASSESSEES WIFE WAS ALO NE DURING THE COURSE OF SEARCH. SHE WAS UNDER TREMENDOUS MENTAL STRESS WHEN SHE SAW SEVERAL IT(SS) NO. 586/MUM/2004 SHRI SATRAMDAS G. FATEHCHANDANI 20 OFFICIALS INTERROGATING HER. AS PER ASSESSEE, ADDIT ION HAS TO BE MADE ON THE BASIS OF MATERIAL FOUND AS A RESULT OF SEARCH IN A BLOCK ASSESSMENT ORDER. BLOCK ASSESSMENT ORDER CANNOT BE MADE ON THE BASIS OF GUESS WORK AND PRESUMPTION. ASSESSEE HAS CONTENDED THAT VALUE OF S EWING MACHINE WAS BELOW ` 1,500/-. SEARCH PARTY HAD NOT TAKEN THE INVENTORY O F SUCH ITEM. ASSESSEE HAS CONTENDED THAT IT IS COMMON EXPERIENCE THAT THE FEMALE MEMBER OF ANY FAMILY WOULD BE UNDER MENTAL STRESS A ND TENSION DURING THE COURSE OF SEARCH. THIS CANNOT BE ACCEPTED AS CLINCH ING EVIDENCE. ASSESSEE HAS RELIED UPON THE DECISION OF HON'BLE AHMEDABAD T RIBUNAL IN THE CASE OF GAURI SHANKAR OMKARMAL VS. ITO REPORTED IN 37 TTJ 3 53. THE CIT(A) DID NOT AGREE WITH THE CONTENTIONS. 28. THE LEARNED COUNSEL SUBMITTED THAT THE ASSESSEE HAS DISCLOSED RETURN OF INCOME IN REGULAR COURSE OF HER BUSINESS AND THE RE IS NO EVIDENCE TO INDICATE THAT ASSESSEE WAS DOING ANY BUSINESS IN HE R NAME AND SHE IS THE BENAMI OF THE ASSESSEE. JUST BECAUSE SHE HAS GIVEN A STATEMENT THAT NO BUSINESS WAS DONE BY HER IT CANNOT BE STATED THAT H ER INCOMES DISCLOSED CAN BE BROUGHT TO TAX IN ASSESSEES HANDS. 29. THE LEARNED D.R., HOWEVER, SUPPORTED THE ORDERS OF THE A.O. AND THE CIT(A). 30. WE HAVE EXAMINED THE ISSUE. THE INCOMES PERTAINING TO THE ASSESSEE FROM F.Y. 1996-97 TO 2000-01 TO THE EXTENT OF ` 2,23,170/- WERE ADDED IN ASSESSEES HANDS ON THE SO CALLED STATEMENT MADE DU RING THE SEARCH. EXCEPT THE STATEMENT THERE IS NO OTHER EVIDENCE TO SHOW TH AT THE ASSESSEE DOING ANY BINAMI BUSINESS IN THE NAME OF WIFE. JUST BECAUSE T HE RETURNS WERE FILED BY THE WIFE, THE SAME CANNOT BE BROUGHT TO TAX IN THE HANDS OF THE HUSBAND UNLESS THERE IS AN EVIDENCE THAT SHE IS COMPLETELY BENAMI OF THE ASSESSEE. NO SUCH ISSUE IS HERE. NO EVIDENCE WAS ALSO AVAILAB LE. SINCE THE INCOMES WERE DECLARED MUCH BEFORE THE SEARCH, THESE INCOMES CANNOT BE BROUGHT TO TAX IN THE HANDS OF THE ASSESSEE AS UNDISCLOSED INC OME. CONSEQUENTLY, WE ARE OF THE OPINION THAT THERE IS NO BASIS FOR MAKIN G ADDITION OF THE DISCLOSED RETURNED INCOMES IN THE BLOCK ASSESSMENT. ACCORDING LY THE GROUND IS ALLOWED. A.O. IS DIRECTED TO DELETE THE ADDITION. IT(SS) NO. 586/MUM/2004 SHRI SATRAMDAS G. FATEHCHANDANI 21 31. GROUND NO. 11 PERTAINS TO LEVY OF INTEREST UNDER SE CTION 158FBA(1). THE INTEREST IS CONSEQUENTIAL IN NATURE AND SINCE A SSESSEE GETS RELIEF IN SOME OF THE ADDITIONS, THE A.O. IS DIRECTED TO REWO RK OUT THE INTEREST. ACCORDINGLY THE GROUND IS CONSIDERED PARTLY ALLOWED . 32. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH AUGUST 2010. SD/- SD/- (N.V. VASUDEVAN) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 6 TH AUGUST 2010 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) I, THANE 4. THE CIT CENTRAL, PUNE 5. THE DR, F BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.