DCIT, Chandigarh V. M/s Brinsar Foods Pvt. Ltd., Chandigarh

ITSSA 6/CHANDI/2007

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 0298 (ITAT-CHANDIGARH)
• Duration Of Justice: 7 year(s) 7 month(s) 16 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 19-09-2014
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 28-04-2014
• Assessment Year: misc
• Appeal Filed On: 02-02-2007
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Unexplained expenditure; Income from undisclosed sources; Search and seizure; Loose papers; Document seized; Documents seized
• Section: 69C; 143(3); 6; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B, CHANDIGARH BEFORE SHRI T.R.SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER IT(SS)A NO.6 /CHD/2007 BLOCK PERIOD : 1990-91 TO 1999-2000 AND 01.4.2000 TO 20.07.2000) THE D.C.I.T., VS. M/S BRINSAR FOODS PVT. LTD. , CIRCLE 4(1) # 114, SECTOR 18-A, CHANDIGARH. CHANDIGARH. PAN: AAACB6742K (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MANJIT SINGH, DR RESPONDENT BY : SHRI VINEET KRISHAN DATE OF HEARING : 21.08.2014 DATE OF PRONOUNCEMENT : 19.09.2014 O R D E R PER SUSHMA CHOWLA, J.M. : THE APPEAL FILED BY THE REVENUE IS AGAINST THE ORD ER OF THE COMMISSIONER OF INCOME TAX(APPEALS), CHANDIGARH DAT ED 24.01.2006 RELATING TO BLOCK PERIOD 1990-91 TO 1999-2000 AGAIN ST THE ORDER PASSED UNDER SECTION 158BC R.W.S. 143(3) OF INCOME TAX ACT , 1961 (IN SHORT THE ACT). 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) VIDE APPELLATE ORDER NO. 280/P/02-03 DATED 24.11.20 06 HAS ERRED IN DELETING THE ADDITION OF RS. 8 LACS MADE ON ACCOUNT OF LOAN REPAYMENT TO M/S OBERAI PLASTICS LTD. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 29 ,27,821/-MADE ON ACCOUNT OF UNDISCLOSED SALES OF EGGS, TREATING THE SEIZED DOCUMENTS AS DUMB DOCUMENTS. 2 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE CITA HAS ERRED IN DELETING THE ADDITION OF RS. 5,67,133/ - ON ACCOUNT OF UNACCOUNTED EXPENDITURE U/S 69C OF THE ACT BY WAY O F PAYMENT OF INTEREST TO SH. RAMESH NIKHANJ AND FAMILY AND SH.H. S. CHADHA & FAMILY. 4. IT IS PRAYED THAT THE ORDER OF THE LD.CIT(A) BE CANCELLED AND THAT OF THE ASSESSING OFFICER MAY BE RESTORED. 5. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY G ROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD OR DISPOSED OFF. 3. THE GROUND NO.1 RAISED BY THE REVENUE IS AGAINST THE DELETION OF ADDITION OF RS.8 LACS. 4. THE BRIEF FACTS OF THE CASE ARE THAT SEARCH AND SEIZURE OPERATIONS WERE CARRIED OUT UNDER SECTION 132 OF THE ACT AT TH E RESIDENTIAL OF THE ASSESSEE AND ALSO AT POULTRY FARM LOCATED AT V & PO KOT BILLA, DISTRICT PANCHKULA. DURING THE COURSE OF SEARCH AND SEIZUR E OPERATIONS, THE BOOKS OF ACCOUNT OF THE ASSESSEE COMPANY AND RELATE D DOCUMENTS WERE FOUND AND SEIZED. SUBSEQUENTLY NOTICE UNDER SECTI ON 158BC OF THE ACT WAS ISSUED TO THE ASSESSEE AND THE ASSESSEE FURNISH ED RETURN OF INCOME FOR THE BLOCK PERIOD. DURING THE COURSE OF SEARC H ANNEXURE A-8, PAGE NOS.39 TO 42 WERE SEIZED FROM THE RESIDENTIAL PREMI SES OF THE DIRECTOR SHRI RAMESH NIKHANJ. THESE DOCUMENTS PERTAINED T O FOUR RECEIPTS OF RS.2 LACS EACH RECEIVED IN CASH. THE PAYMENTS HA VE BEEN MADE BY BRINSAR FOODS PVT. LTD. IN CASH AMOUNTING TO RS.8 A CS IN TOTAL. THE ASSESSEE WAS ASKED TO EXPLAIN THE NATURE OF THE PAY MENTS AND RECONCILE THE SAME WITH THE REGULAR BOOKS OF ACCOUNT. IN RE PLY THE ASSESSEE SUBMITTED THAT NOTHING WAS PAID BACK OUT OF THE LOA N OF RS.8 LACS AND THE PRE-RECEIPTED RECEIPTS COULD NOT BE RETURNED THROUG H AN OVERSIGHT. THE ASSESSING OFFICER REJECTED THE CLAIM OF THE ASSESSE E ON ACCOUNT OF THE FOLLOWING: I) THE ASSESSEE HAS NOT PRODUCED ANY CONFIRMATION REGARDING LOAN OF RS.8 LAKHS INSPITE OF HIS CLAIM. THIS FACT HAS BEEN BROUGHT 3 TO THE NOTICE OF THE ASSESSEE VIDE ORDER SHEET ENTR Y DATED 18.7.2002, WHICH HAS ALSO BEEN ACCEPTED BY THE ASSE SSEE. II) THE ASSESSEE HAS NOT BEEN ABLE TO RECONCILE THE SE AMOUNTS WITH REGULAR BOOKS OF ACCOUNTS MAINTAINED BY THE AS SESSEE COMPANY. III) THIS TRANSACTION OF RS.8 LAKHS, IN CASH HAS AL SO NOT BEEN FOUND RECORDED IN THE BOOKS OF PREVIOUS YEAR 2000-0 1 WHICH HAVE BEEN SEIZED FROM THE ASSESSEES PREMISES DURING THE COURSE OF SEARCH. IV) IN THE LEDGER BOOKS OF PREVIOUS YEAR 2000-01 TH ERE IS LEDGER ACCOUNT OF M/S OBROI PLASTIC LTD. WHICH DOES NOT HA VE ANY CREDIT OR DEBIT ENTRY IN IT. THE ASSESSEE HAS ALSO NOT F URNISHED ANY CONFIRMATION IN SPITE OF ITS CLAIM TO DO SO. 5. IN VIEW THEREOF, THE ASSESSING OFFICER CONSIDERE D THE AMOUNT OF RS.8 LACS HAVING PAID TO SHRI ANIL OBEROI OUTSIDE T HE BOOKS OF ACCOUNT AND SINCE THE SOURCE HAD NOT BEEN EXPLAINED, THE SA ID SUM OF RS.8 LACS WAS TREATED AS UN-DISCLOSED SOURCES UNDER SECTION 6 9C OF THE ACT. ANOTHER ADDITION MADE IN THE HANDS OF THE ASSESSEE WAS ON ACCOUNT OF EGGS PRODUCTION. DURING THE COURSE OF SEARCH OPER ATION SMALL POCKET DIARY WAS SEIZED AS PER ANNEXURE A-12. THIS DIAR Y CONTAINED THE DETAILS OF EGGS PRODUCED FOR THE PERIOD PRIOR TO TH E DATE OF SEARCH I.E. 20.7.2000. AT PAGE 36 OF THE PAD, THERE WERE FIG URES OF 2731 AND 17, WHICH THE ASSESSING OFFICER INTERPRETED AS 2731 TRA YS OF EGGS PRODUCED ON 20.7.2000. EACH TRAY CONTAINED 30 EGGS. TH EREFORE, TOTAL NUMBER OF EGGS PRODUCED ON 20.7.2000 CAME TO 81947N (2713X 30+17). ON THE BACK SIDE OF PAGE 35 OF DIARY, FIGURES OF 82140 WER E MENTIONED, WHICH AS PER THE ASSESSING OFFICER WAS OPENING STOCK. IT INCLUDED 40,000 EGGS FOND LOADED IN CANTER NO.HR 38C-2281 WHICH WAS PARKED IN THE PREMISES OF THE ASSESSEE WHEN THE SEARCH PARTY ARRI VED IN THE MORNING OF 20.7.2000. ON THE REMAINING PAGES OF THE DIARY A LSO, VARIOUS FIGURES OF 4 DAILY PRODUCTION OF EGGS WERE MENTIONED. THE TAB ULATED DETAILS OF PAGE-WISE FIGURES ARE AVAILABLE UNDER PARA 4.1 AT P AGES 3 TO 5 OF THE ASSESSMENT ORDER. THE ASSESSING OFFICER HAD ASSUM ED THAT THE SAID FIGURES RELATED TO THE FIGURES BEFORE 20.7.2000 BUT AFTER 1.4.2000 AND THE FIGURES RELATED TO THE PRODUCTION OF EGGS FOR VARIO US DATES. THE ASSESSING OFFICER COMPUTED GROSS NUMBER OF EGGS PRO DUCED DURING THE PERIOD AT RS.1,18,22,689/-, WHOSE VALUE @ RS.1/-PER EGG WAS WORKED OUT TO RS.1,18,22,689/-. AS PER THE BOOKS OF ACCOUNT THE SALE ACCOUNT DECLARED TOTAL SALE OF RS.72,36,275/- AND DIFFERENC E OF RS.45,86,414/- AS ON THE DATE OF SEARCH OF THE SALE OF EGGS FOR THE P ERIOD 1.4.2000 TO 20.7.2000 WERE WORKED OUT. THE ASSESSEE WAS ASKE D TO FURNISH THE DETAILS AND RECONCILE THE FIGURES CONTAINED IN THE DIARY WITH THE BOOKS OF ACCOUNT. IN REPLY THE ASSESSEE STATED THAT THE SA ID DIARY CONTAINED ROUGH CALCULATIONS MADE BY THE STAFF MEMBERS AND ROUGH PA PERS HAD NO EVIDENTIARY VALUE. THE ASSESSING OFFICER FOUND NO FORCE IN THE SUBMISSIONS MADE BY THE ASSESSEE AND ADOPTED THE AC TUAL PRODUCTION OF EGGS FROM THE PERIOD 1.4.2000 TO 20.7.2000 AT 1,18, 22,689. THE ASSESSEE HAD DECLARED THE PRODUCTION OF EGGS AT 88, 94,868. THE DIFFERENCE IN THE ACCOUNT WORKED TO 29,27,821 AND A DOPTING THE AVERAGE SALE PRICE PER EGG AT RS.1/-, THE ADDITION OF RS.29 ,27,821/- WAS HELD OUTSIDE THE BOOKS OF ACCOUNT. 6. ANOTHER ADDITION MADE IN THE HANDS OF THE ASSESS EE WAS ON ACCOUNT OF UNACCOUNTED EXPENDITURE BY WAY OF PAYMENT OF INT EREST MADE TO SHRI RAMESH NIKHANJ FAMILY AND SHRI H.S.CHADHA FAMILY UN DER SECTION 69C OF THE ACT AT RS.5,67,133/-. 7. THE CIT (APPEALS) NOTED THAT SUM OF RS.8 LACS WA S STILL OUTSTANDING IN THE BOOKS OF ACCOUNT OF THE ASSESSEE AND AS ALSO IN THE BOOKS OF ACCOUNT OF M/S OBEROI PLASTICS LTD. FUR THER THE SUBMISSION OF 5 THE ASSESSEE BEFORE THE CIT (APPEALS) WAS THAT EVEN FOR THE SAKE OF ARGUMENT ASSUMING THAT THE LOAN OF RS.8 LACS WAS PA ID BACK, THE ASSESSEE HAD ENOUGH FUNDS IN SO FAR AS THE SOURCE OF REPAYME NT WAS CONCERNED. SHRI RAMESH NIKHANJ AND H.S.CHADHA, AOP IN THEIR R ETURN FOR THE BLOCK PERIOD HAD DECLARED THE UN-DISCLOSED INCOME OF RS.9 5,77,200/- AND HENCE THERE WAS NO MERIT IN THE ADDITION. THE CIT (APPE ALS) DELETED HE IMPUGNED ADDITION ON THIS ACCOUNT. 8. IN RESPECT OF THE SECOND ADDITION OF RS.29,27,82 1/- MADE ON ACCOUNT OF ALLEGED PRODUCTION OF EGGS OVER AND ABOV E THE AMOUNT SHOWN IN THE BOOKS OF ACCOUNT. THE CONTENTION OF THE AS SESSEE BEFORE THE CIT (APPEALS) WAS THAT ANNEXURE A-12 I.E. THE SPIRAL DI ARY WAS FOUND FROM THE PREMISES BUT NONE OF THE PAGES BORE ANY DATE, M ONTH OR THE YEAR AND ALL THE PAGES HAVE BEEN MARKED BY THE SEARCH PARTY WHERE NONE OF THE PAGES INDICATED THE WORD TRAY OR EGG WAS WRITTE N ANY WHERE OR AT ANY PAGE. FURTHER THE DIARY DOES NOT BEAR THE NAME OF THE ASSESSEE COMPANY AND IT WAS NOT WRITTEN IN THE HANDS OF ANY DIRECTOR OF THE ASSESSEE COMPANY. IT WAS ADMITTED BY THE LEARNED A.R. FOR THE ASSESSEE THAT SOME OF COMPANY EMPLOYEES MAY HAVE JOTTED DOWN CERT AIN FIGURES BUT THE IMPUGNED FIGURES DO NOT REFLECT COMPLETE AND C ORRECT FACTS. THE LEARNED A.R. FOR THE ASSESSEE FURTHER EXPLAINED THA T THERE WAS NO DISCREPANCY IN THE PRODUCTION OR SALE AND POINTED OUT THAT THE ASSESSING OFFICER HAD FAILED TO CONSIDER THE OPENING STOCK AN D CLOSING STOCK OF THE EGGS BEFORE WORKING OUT THE PRODUCTION FOR THE PERI OD UNDER CONSIDERATION. FURTHER THERE WAS TOTALING ERROR A ND THAT CORRECT TOTAL WORKED OUT TO 84,34,627/- AND NOT 1,18,22,689. AS AGAINST THE CORRECT TOTAL, THE ASSESSEE HAD SHOWN PRODUCTION OF EGGS AT 88,94,868 AND IT WAS CONTENDED THAT THE FIGURES JOTTED DOWN IN ANNEXURE A-12 WERE NOT RELIABLE. THE PLEA OF THE ASSESSEE WAS THAT NOT O NLY VARIOUS FIGURES 6 JOTTED DOWN WITHOUT ANY DATE OR DAY OR THE NATURE O F FIGURES, CONTAINED NOTHING OF ANY SUBSTANCE AND WERE IN THE NATURE OF DUMB FIGURES. FURTHER THE LEARNED A.R. FOR THE ASSESSEE STATED TH AT HOW COULD THE ASSESSING OFFICER PRESUME THAT THE FIGURES RELATED TO THE PERIOD PRIOR TO 20.7.2000 WHEN THERE WERE NO DATES MENTIONED AGAINS T THE SO-CALLED FIGURES OF PRODUCTION. WITH REGARD TO 40,000 EGGS FOUND LOADED AT THE PREMISES OF THE ASSESSEE, IT WAS CONTENDED BY THE L EARNED A.R. FOR THE ASSESSEE THAT THE TRUCK BEING FOUND AT THE PREMISES OF THE ASSESSEE BEFORE THE SURVEY TEAM ENTERED THE PREMISES AND THERE WAS NO MERIT IN THE ALLEGATION OF THE ASSESSING OFFICER THAT THE SALE O F 47,000/- EGGS WAS UN- ACCOUNTED FOR IN THE BOOKS OF ACCOUNT AND THE STOCK WAS ACCORDINGLY RE- WORKED. THE LEARNED A.R. FOR THE ASSESSEE FURTHER EXPLAINED THE PROCESS OF EGGS HATCHING. 9. BEFORE THE CIT (APPEALS) THE SUBMISSIONS OF THE ASSESSEE ARE REFERRED TO BY THE CIT (APPEALS) AT PAGES 6 TO 11. THE CIT (APPEALS) PLACING RELIANCE ON THE RATIO LAID DOWN IN JAGDAMBA RICE MILLS VS. CIT REPORTED IN 67 TTJ 838 (CHD) AND ALSO IN NATVARLAL SHAH VS. ACIT, REPORTED IN 59 TTJ 454 OBSERVED THAT THESE DOCUME NTS DID NOT CONTAIN DATE AND MONTH AND NO YEAR WAS MENTIONED, THEN THER E COULD BE NO BASIS FOR ADDITION. THE CIT (APPEALS) THUS HELD THAT TH ERE WAS NO MERIT IN THE IMPUGNED ADDITION BASED ON DUMB DOCUMENTS. 10. IN RESPECT OF THE THIRD ADDITION, THE CIT (APPE ALS) HELD THAT THE ISSUE HAD BEEN DISCUSSED IN DETAIL IN THE CASE OF T HE AOP I.E. SHRI RAMESH NIKHANJ AND SHRI H.S.CHADHA BY HIM IN HE APP ELLATE ORDER DATED 15.4.2004 AND THE ISSUE STOOD DECIDED IN FAVOUR OF THE ASSESSEE. CONSEQUENTLY, THERE WAS NO MERIT IN SEPARATE ADDITI ON IN INDIVIDUAL CASES OR THE CASES OF GROUP COMPANY ON THE SAME SET OF FA CTS. 7 11. THE REVENUE IS IN APPEAL AGAINST THE ORDER OF T HE CIT (APPEALS). IT WAS POINTED OUT THAT IN RESPECT OF THE FIRST ADD ITION OF RS.8 LACS ADMITTEDLY THERE WAS CASH PAYMENT, THE PROOF OF WHI CH WAS FOUND FROM THE POSSESSION OF THE ASSESSEE DURING THE SEARCH. IN VIEW OF THE EVIDENCE AVAILABLE WITH THE DEPARTMENT, THE LEARNED D.R. FOR THE REVENUE POINTED OUT THAT THERE WAS NO MERIT IN THE DELETION OF ADDITION MADE BY THE CIT (APPEALS). 12. THE LEARNED A.R. FOR THE ASSESSEE POINTED OUT T HAT BEFORE THE CIT (APPEALS) THE CONFIRMATION WAS FILED WHICH REFLECT ED THE SAID LOAN AND FURTHER AMOUNT OF RS.95 LACS WAS SURRENDERED BY THE AOP AND THE CASH TO THE EXTENT OF RS.8 LACS WAS AVAILABLE. THE LEARNE D A.R. FOR THE ASSESSEE FURTHER POINTED OUT THAT THE CONFIRMATION, IF ANY F ILED BEFORE THE CIT (APPEALS) WAS NOT SENT BACK TO THE ASSESSING OFFICE R FOR REMAND PROCEEDINGS. 13. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE FIRST ISSUE RAISED BY THE REVENUE IS IN RELATION TO DELETION OF ADDITION OF RS.8 LACS. DURING THE COURSE OF SEARCH PROCEEDING S ANNEXURE A-8, PAGES 39 TO 42 OF THE PANCHNAMA SEIZED FROM THE RES IDENTIAL PREMISES OF THE ASSESSEE WERE FOUR RECEIPTS OF RS.2 LACS EACH S IGNED BY SHRI ANIL OBEROI, EXECUTIVE DIRECTOR OF M/S OBEROI PLASTICS L TD.. AS PER THE SAID RECEIPTS, THE LOAN WAS TAKEN ON 13.1.1995. HOWEVE R, THE RECEIPT FOR RETURN OF LOAN DID NOT BEAR ANY DATE AND THE ENTIRE PAYMENT OF RS.8 LACS WAS TAKEN AS UN-DISCLOSED INCOME OF THE ASSESSEE FO R THE PREVIOUS YEAR 2000-01. THE PLEA OF THE ASSESSEE WAS THAT THESE WERE PRE-RECEIPTED RECEIPTS AND THE SAME WERE NOT RETURNED BY OVERSIGH T. THE ASSESSEE CLAIMED THAT THE AMOUNT OF RS.8 LACS WAS STILL OUTS TANDING IN THE BOOKS OF THE ASSESSEE AS ALSO IN THE BOOKS OF M/S OBEROI PLASTICS LTD. AND CONSEQUENTLY THERE WAS NO MERIT IN ANY ADDITION. 8 14. WE FIND NO MERIT IN THE PLEA OF THE ASSESSEE IN VIEW OF THE FACTUM OF RECEIPTS FOUND FROM THE POSSESSION OF THE ASSESS EE FOR THE RETURN OF LOAN BY THE ASSESSEE TO SHRI ANIL OBEROI. THE SAI D LOAN WAS RETURNED IN CASH. THE RECEIPTS WERE FOUND FROM THE POSSESSIO N OF THE ASSESSEE DURING THE COURSE OF SEARCH CARRIED OUT AT THE RESI DENTIAL PREMISES OF THE ASSESSEE ON 20.7.2000 AND THE SAME EVIDENCES THE TR ANSACTION OF PAYMENT OF MONEY BY THE ASSESSEE. THE ASSESSEE HAD FAILE D TO OFFER ANY EXPLANATION VIS--VIS THE SOURCE OF THE PAYMENT OF SAID AMOUNT OF RS.8 LACS REPAID BY THE ASSESSEE. WE FIND NO MERIT IN THE CLAIM OF THE ASSESSEE THAT THE LOAN OF RS.8 LACS WAS STILL OUTST ANDING IN ITS BOOKS OF ACCOUNT AND THE BOOKS OF ACCOUNT OF M/S OBEROI PLAS TICS LTD. FURTHER THE UN-DISCLOSED INCOME DECLARED BY SHRI RAMESH NIK HANJ AND SHRI H.S.CHADHA, AOP HAD NO RELEVANCE TO THE DOCUMENTS F OUND IN THE CASE OF THE ASSESSEE. WE REVERSE THE ORDER OF THE CIT (AP PEALS) AND CONFIRM THE ADDITION OF RS.8 LACS MADE BY THE ASSESSING OFF ICER. THE GROUND OF APPEAL NO.1 RAISED BY THE REVENUE IS THUS ALLOWED. 15. THE ISSUE RAISED VIDE GROUND NO.2 IS AGAINST DE LETION OF ADDITION MADE ON ACCOUNT OF UN-DISCLOSED SALE OF EGGS. A S PIRAL DIARY MARKED AS ANNEXURE A-12 WAS FOUND FROM THE BUSINESS PREMISES OF THE ASSESSEE, WHICH CONTAINED CERTAIN FIGURES ON DIFFERENT PAGES. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE SAID PAGES WERE I N RELATION TO SALE OF EGGS BY THE ASSESSEE AND CONSEQUENTLY THE PRODUCTIO N OF EGGS WAS CALCULATED BY THE ASSESSING OFFICER. AN ADDITION WAS MADE ON ACCOUNT OF DIFFERENCE IN SALES I.E. AS PER DIARY AND AS PER THE BOOKS OF ACCOUNT. THE ASSESSEE HAD PLACED COPY OF ANNEXURE-12 AT PAGE S 25 TO 69 OF THE PAPER BOOK. ON THE FRONT PAGE OF THE SAID DIARY I S THE NAME OF ONE SUBHAS RANA, BARWALA WAS MENTIONED AND THERE WERE O THER TELEPHONE NUMBERS. THE PERUSAL OF THE NOTINGS OF THE DIARY REFLECT CERTAIN 9 CALCULATION BEING MADE FROM PAGE TO PAGE. HOWEVE R, NO DATE WAS MENTIONED ON ANY OF THE PAGES. THE ADDITION IN TH E HANDS OF THE ASSESSEE WAS MADE UNDER SECTION 158BC OF THE ACT R. W.S. 143(3) OF THE ACT. AS PER SECTION 158BC OF THE ACT THE COMPUTAT ION OF UN-DISCLOSED INCOME OF THE BLOCK PERIOD SHALL BE AGGREGATE OF TH E TOTAL INCOME OF THE PREVIOUS YEAR FALLING WITHIN THE BLOCK PERIOD, COM PUTED ON THE BASIS OF EVIDENCE FOUND AS A RESULT OF SEARCH OR REQUISITION OF BOOKS OF ACCOUNT AND/OR OTHER DOCUMENTS OR INFORMATION AS IS AVAILAB LE WITH THE ASSESSING OFFICER, REDUCED BY THE TOTAL INCOME DECLARED BY TH E ASSESSEE. THE BASIS FOR COMPUTING THE UN-DISCLOSED INCOME OF THE BLOCK PERIOD IN THE HANDS OF ANY ASSESSEE IS ON THE BASIS OF THE EVIDEN CE FOUND AS A RESULT OF SEARCH. THE SEARCH OPERATIONS WERE CARRIED OUT A T THE PREMISES OF THE ASSESSEE ON 20.7.2000 AND A SPIRAL DIARY WAS IMPOUN DED. HOWEVER, THE DIARY THOUGH HAD CERTAIN NOTINGS, BUT DO NOT BEAR A NY DATE AND IT CANNOT BE PRESUMED THAT THE SAID DIARY RELATE TO THE PERIO D PRIOR TO 20.7.2000 I.E. THE DATE OF SEARCH. THE ADDITION MADE ON SUC H SURMISES CANNOT STAND AND WE CONFIRM THE ORDER OF THE CIT (APPEALS) IN THIS REGARD. 16. THE SECOND ASPECT OF THE SAID ADDITION WAS EXPL ANATION GIVEN BY THE ASSESSEE DURING THE APPELLATE PROCEEDINGS THAT EVEN THE TOTAL OF THE FIGURES WAS INCORRECT AND THE ASSESSING OFFICER HAD FAILED TO CONSIDER BOTH THE OPENING AND CLOSING STOCK WHILE COMPUTING THE SALES IN THE HANDS OF THE ASSESSEE. THE ADDITION ON THIS ACCOU NT ALSO IS DELETED. THE DOCUMENTS SEIZED DURING THE COURSE OF SEARCH AT BEST ARE DUMB DOCUMENTS AND CANNOT BE RELIED UPON TO MAKE THE AFO RESAID ADDITION. UPHOLDING THE ORDER OF THE CIT (APPEALS) WE DISMISS THE GROUND OF APPEAL NO.2 RAISED BY THE REVENUE. 17. THE GROUND NO.3 RAISED BY THE REVENUE IS LINKED TO THE ISSUE IN GROUND NO.1(V) OF IT(SS)A NO.4/CHD/2007. WE HAVE ADJUDICATED THE 10 ISSUE IN THE SAID APPEAL VIDE ORDER OF EVEN DATE AN D THE FINDINGS ARE AS UNDER: 25. THE ISSUE IN GROUND OF APPEAL NO.1(V) RAISED B Y THE REVENUE IS AGAINST THE DELETION OF ADDITION OF RS.8,77,156/ -. THE ASSESSING OFFICER NOTED THAT THE ASSESSEE WAS THE DIRECTOR OF M/S BRINSAR INDIA PVT. LTD. AND M/S BRINSAR FOODS PVT. LTD. D URING THE COURSE OF SEARCH AND SEIZURE OPERATIONS, CERTAIN DO CUMENTS WERE FOUND, WHICH CONTAINED DETAILS OF COMPUTATION OF IN TEREST PAYMENT MADE BY THE TWO COMPANIES TO THE ASSESSEE. THE R ELEVANT DOCUMENTS WERE PART OF ANNEXURE A-13, PAGE NOS.3,4, 5,20 TO 23, 28 AND 29, SEIZED FROM THE RESIDENCE OF THE ASSESSEE. AS PER THE ASSESSEE, THE SAME WERE ROUGH CALCULATIONS AND IN T HE ABSENCE OF ANY SATISFACTORY REPLY FROM THE ASSESSEE, THE ASSES SING OFFICER COMPUTED THE INTEREST RECEIVED BY THE ASSESSEE FROM THE TWO CONCERNS AS PER APPENDIX-I AND CONFRONTED THE SAME TO THE ASSESSEE. THE ASSESSING OFFICER UNDER PARA 8.4 H AD REPRODUCED THE NOTINGS ON THE DIFFERENT PAGES IN WHICH THERE I S NOTING OF PUCCA/ KACHCHA INTEREST AND THEN NET TO BE CREDIT ED. THE ASSESSING OFFICER IN VIEW THEREOF, MADE AN ADDITION OF RS.8,77,156/-. 26. THE LEARNED A.R. FOR THE ASSESSEE POINTED OUT T HAT SIMILAR ISSUE AROSE BEFORE THE TRIBUNAL IN THE CASE OF DCIT VS. SHRI H.S.CHADHA IN IT(SS)A NO.1/CHD/2007 AND VIDE ORDER DATED 30.9.2009 THE MATTER HAD BEEN RESTORED BACK TO THE CIT (APPEALS). THE RELEVANT FINDINGS OF THE TRIBUNAL IN PARAS 17 T O 24 ARE AS UNDER: 17. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE RECORDS. THE ASSESSING OFFICER WHILE COMPUTING THE UNDISCLOSED INCOME FOR THE BLOCK PERIOD ON THE PERUSAL OF CERTA IN DOCUMENTS SEIZED BEING PART OF ANNEXURE A-13, FROM THE RESIDE NCE OF SHRI ROMESH NIKHANJ VIDE PANCHNAMA DATED 20.7.2000, COMP UTED THE INTEREST INCOME OF THE ASSESSEE FROM THE TWO COMPAN IES M/S BRINSAL FOODS (P) LTD AND BRINSAL INDIA (P) LTD FOR THE BL OCK PERIOD BEING NOT REFLECTED IN THE BOOKS OF ACCOUNT AND WORKED OU T THE ADDITION OF RS. 15,58,750/- RELATING TO ASSESSMENT YEARS 1993-9 4 TO 2001-02. 18. THE PLEA OF THE ASSESSEE BEFORE THE CIT(A) WAS THAT THE SAID ENTRIES IN THE SEIZED DIARIES DID NOT RELATE TO THE TWO COMPANIES IN WHICH ASSESSEE WAS DIRECTOR. HOWEVER, THE SAID EN TRIES IN SEIZED DIARIES RELATED TO THE FINANCE BUSINESS CARRIED ON BY THE AOP OF ROMESH NIKHANJ AND ASSESSEE. THE CLAIM OF THE ASSES SEE WAS THAT AFTER FILING THE RETURN FOR THE BLOCK PERIOD IN THE CASE OF AOP, NOTHING REMAINS UNACCOUNTED OR UNDISCLOSED. THE AO P CONSISTED OF THE ASSESSEE AND SHRI ROMESH NIKHANJ WHICH CARRIES ON THE BUSINESS OF MONEY LENDING AND NO REGULAR BOOKS OF ACCOUNT W ERE MAINTAINED. HOWEVER, ON THE BASIS OF DOCUMENTS FOUND DURING THE COURSE OF SEARCH, THE SAID AOP HAD MADE A DISCLOSURE OF RS. 9 5,77,200/- WHICH AS PER THE CLAIM OF THE ASSESSEE WAS INCLUSIV E OF INTEREST EARNED ON SUCH ADVANCES. THE ASSESSEE CLAIMS THAT THE ABOVE SAID FIGURES OF UNDISCLOSED INVESTMENT AND INTEREST EARN ED THEREON WAS BY THE TWO GROUPS OF FAMILIES AND WAS WORKED OUT BY TH E DEPARTMENT ON THE BASIS OF DOCUMENTS, DIARIES AND OTHER MATERIAL FOUND AND SEIZED 11 FROM THE RESIDENCE OF SHRI ROMESH NIKHANJ. THE ASS ESSEE THUS CLAIMS THAT WHATEVER WAS UNDISCLOSED OR UNACCOUNTED ON THE BASIS OF SEIZED DOCUMENTS INCLUDING A-13 HAS BEEN DISCLOSED AND ASSESSED IN THE HANDS OF THE AOP WHICH INCLUDES THE ASSESSEE AN D HIS FAMILY MEMBERS AND SHRI ROMESH NIKHAJ AND HIS FAMILY MEMBE RS. 19. THE SECOND PLEA OF THE ASSESSEE WAS AGAINST THE ADDITION ON ACCOUNT OF ALLEGED INTEREST FOR AND FROM ASSESSMENT YEAR 1996-97 TO ASSESSMENT YEAR 2001-02 BEING MADE ON HYPOTHETICAL BASIS. THE ASSESSEE EXPLAINED BEFORE THE CIT(A) THAT NO MATERI AL OR DOCUMENTS WERE FOUND / SEIZED DURING THE COURSE OF SEARCH REL ATING TO THESE YEARS. IN THE ABSENCE OF ANY EVIDENCE FOUND, THE ADDITION RELATING TO ASSESSMENT YEARS 1996-97 TO 2000-01 WERE TO BE D ELETED. REGARDING THE ASSESSMENT YEARS 1993-94 AND 1995-96, THE CLAIM OF THE ASSESSEE WAS THAT THE SAME HAD BEEN INCLUDED IN THE PEAK AMOUNT AND ACCEPTED IN THE HANDS OF THE AOP OF ROMESH NIKH ANJ AND ASSESSEE. 20. BEFORE THE CIT(A), ASSESSEE ALSO ELABORATELY EX PLAINED THE FIGURES OF INTEREST RELATING TO ASSESSMENT YEARS 19 93-94 TO 1995-96 ADOPTED AT RS. 8,01,730/-, RS 4,97,723/- AND RS. 30 ,567/- RESPECTIVELY, IN CONNECTION WITH THE NOTINGS AT PAG E 34 OF A-13, SEIZED DURING SEARCH PROCEEDINGS AND CLAIMED THAT A S THE INTEREST PAYABLE ON INVESTMENT OF SHRI CHADHA & FAMILY, WAS HIGHER THAN THAT OF SHRI ROMESH NIKHAJ AND FAMILY, ONLY INTERE ST CHARGED ON THE DIFFERENTIAL AMOUNT WAS CREDITED IN THE CASH BOOK O F ASSESSEE AND ACCORDINGLY THE WORKING OF INTEREST BY THE ASSESSIN G OFFICER WAS CHALLENGED. FURTHER, THE PLEA OF THE ASSESSEE WAS THAT THE ACTUAL INTEREST HAD ALREADY BEEN ACCOUNTED FOR IN THE HAND S OF AOP. 21. THE LEARNED AR BEFORE US POINTED OUT THAT DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS OF THE AOP, ADDITION ON A CCOUNT OF ADDITIONAL INTEREST WAS MADE IN ADDITION TO THE PEA K INVESTMENT WORKED OUT IN THE HANDS OF THE ASSESSEE. HOWEVER, THE SAID ADDITION WAS DELETED BY THE CIT(A) AND THE TRIBUNAL IN ITA N O. 47/CHANDI/2004 DATED 17.2.2006 IN THE CASE OF AOP H AD UPHELD THE ORDER OF THE CIT(A). 22. THE CIT(A) THOUGH HAS REFERRED TO THE SUBMISSIO NS OF THE ASSESSEE BEFORE HIM INCLUDING THE WRITTEN SUBMISSIO NS FILED DURING THE COURSE OF APPELLATE PROCEEDINGS, BUT HAS FAILED TO GIVE A FINDING IN RESPECT OF THE ISSUES RAISED BY THE ASSESSEE. T HE CLAIM OF THE ASSESSEE IS THAT THE MONEY LENDING BUSINESS OR FINA NCING BUSINESS WAS CARRIED ON BY THE ASSESSEE AND SHRI ROMESH NIKH AJ, AOP APART FROM THE BUSINESS SHOWN IN THE TWO CONCERNS M/S BRI NSAR INDIA (P) LTD AND BRINSAR FOODS (P) LTD. THE CLAIM OF THE AS SESSEE AGAINST NON INCLUSION OF THE INCOME IN THE HANDS OF THE ASS ESSEE ARE MULTIFOLD AND ARE BEING ENUMERATED HEREUNDER FOR TH E SAKE OF BREVITY: A) THE ENTRIES APPEARING IN THE SEIZED DOCUMENTS ON TH E BASIS OF WHICH ADDITION ON ACCOUNT OF INTEREST IN T HE HANDS OF THE ASSESSEE HAS BEEN WORKED OUT HAVE NO CONNECTION WITH THE TWO CONCERNS M/S BRINSAR INDIA (P) LTD AND BRINSAR FOODS (P) LTD. 12 B) THE AFORESAID ENTRIES WORKED OUT BY THE ASSESSING O FFICER ON THE BASIS OF SEIZED DIARIES ARE RELATABLE TO THE INCOME REFLECTED IN THE HANDS OF THE AOP CONSISTING OF ASS ESSEE AND SH. ROMESH NIKHANJ EARNED FROM THEIR BUSINESS O F MONEY LENDING. C) THE INCOME ARISING TO THE ASSESSEE AND SHRI ROMESH NIKHANJ AND THEIR FAMILY MEMBERS ARE PART OF THE IN COME DECLARED IN THE HANDS OF THE AOP. D) THE FIGURE OF DISCLOSURE OF RS. 95,77,200/- IN THE HANDS OF AOP IS INCLUSIVE OF INTEREST EARNED AND PLOUGHED BA CK UPTO 23.11.1994 WHICH IN TURN IS CLAIMED TO HAVE BE EN WORKED OUT BY THE INVESTIGATION WING OF THE I.T. DEPARTMENT. E) THE BASIS OF WORKING THE DISCLOSURES OF RS. 95.77 L AKHS IN THE HANDS OF AOP WAS THE ENTRIES IN DOCUMENTS AND DIARIES AND OTHER MATERIAL FOUND INCLUDING A-13 AND SEIZED FROM THE RESIDENCE OF ROMESH NIKHANJ, WHICH ARE ALSO THE BASIS FOR MAKING ADDITIONS IN THE HANDS OF ASSESSEE. F) WHATEVER WAS UNDISCLOSED OR UNACCOUNTED INCOME EITH ER IN THE HANDS OF THE ASSESSEE AND HIS FAMILY MEMBERS AND SHRI ROMESH NIKHAJ AND HIS FAMILY MEMBERS ON THE BA SIS OF SEIZED DOCUMENTS WAS DISCLOSED IN THE HANDS OF A OP AND NOTHING REMAINS TO BE ASSESSED IN THE HANDS OF ASSESSEE AND HIS FAMILY MEMBERS AND SHRI ROMESH NIKHANJ AND HIS FAMILY MEMBERS. G) AS REGARDS ASSESSMENT YEARS 1995-96 (W.E.F. 24.11.1 994) TO ASSESSMENT YEAR 2001-02, THE ADDITION HAS BEEN W ORKED OUT ON HYPOTHETICAL BASIS AND NO MATERIAL OR DOCUME NTS WERE FOUND OR SEIZED DURING THE COURSE OF SEARCH RE LATING TO THESE YEARS. H) REGARDING ASSESSMENT YEAR 1993-94 TO PART OF ASSESS MENT YEAR 1995-96, THE INTEREST INCOME IS INCLUDED IN TH E PEAK AMOUNT DECLARED IN THE HANDS OF AOP AND THE SAME IS APART FROM THE INTEREST INCOME RECEIVED FROM TWO CONCERNS I.E. BRINSAR INDIA (P) LTD AND BRINSAR FOO DS (P) LTD. I) IN RESPECT OF 1993-94, AFTER REFERRING TO THE ENTR IES ON THE RESPECTIVE PAGES OF THE SEIZED DIARY, THE PLEA OF THE ASSESSEE WAS THAT AS THE INTEREST PAYABLE ON INVEST MENT OF ASSESSEE AND HIS FAMILY WAS HIGHER THAN THAT OF ROM ESH NIKHAJ AND HIS FAMILY, THE INTEREST WAS ALLOWED ONL Y ON THE EXCESS AMOUNT WHICH IN TURN WAS CREDITED TO THE CASH BOOK OF AOP. THE INCOME BEING ALREADY INCLUDED IN THE HANDS OF AOP IS NOT TO BE INCLUDED IN THE HANDS OF THE ASSESSEE BEFORE US. THE ASSESSEE VIDE PARAS 6.4 TO 6.6 OF WRITTEN SUBMISSIONS FILED BEFORE CIT(A), ELABORATEL Y EXPLAINED THE NATURE OF ENTRIES RELATABLE TO WORKIN G OF INTEREST FOR ASSESSMENT YEARS 1993-94 TO 1995-96. 13 23. IN THE FACTS OF THE PRESENT CASE, IN THE HANDS OF THE AOP, ADDITION ON ACCOUNT OF PEAK INVESTMENT UPTO ASSESSM ENT YEAR 1995-96 WAS WORKED OUT BY THE INVESTING WING OF THE INCOME TAX DEPARTMENT ON THE BASIS OF DOCUMENTS / DIARIES ETC. SEIZED DURING THE COURSE OF SEARCH AT THE PREMISES OF SHRI ROMESH NIKHANJ. THE FIGURE OF PEAK INVESTMENT WAS WORKED OUT AT RS. 95, 77,200/-. THE PLEA OF THE ASSESSEE IS THAT THE SAID PEAK INVESTME NT INCLUDES THE INCOME EARNED BY ASSESSEE AND HIS FAMILY MEMBERS AN D SHRI ROMESH NIKHANJ AND HIS FAMILY MEMBERS. FURTHER PLE A IS THAT ONCE INCOME IS ASSESSED IN THE HANDS OF AOP, NO OTH ER ENTRY REMAINS ON SEIZED DOCUMENTS WHICH IS INCLUDIBLE IN CASE OF ASSESSEE OR ROMESH NIKHANJ AND THEIR FAMILY MEMBERS . HOWEVER, IT NEEDS TO BE VERIFIED WHETHER THE INTEREST APPEAR ING IN THE HANDS OF THE ASSESSEE AND HIS FAMILY MEMBERS ARE INCLUDED IN THE AFORESAID PEAK INVESTMENT DECLARED AND ACCEPTED IN THE HANDS OF THE AOP. IT ALSO NEEDS TO BE VERIFIED WHETHER THE SAID INCOME RELATES TO THE TWO CONCERNS BRINSAR INDIA (P) LTD A ND BRINSAR FOODS (P) LTD. OR RELATES TO THE AOP. FROM THE PERUSAL OF THE SEIZED DOCUMENTS, THE ASSESSING OFFICER IN THE CASE OF THE ASSESSEE BEFORE US HAD WORKED OUT THE FIGURES OF INTEREST RE LATING TO ASSESSMENT YEARS 1993-94 TO 1995-96 AND THE EXERCIS E OF DETERMINING WHETHER THE SAME IS A PART OF THE AFORE SAID PEAK INVESTMENT ASSESSED IN THE HANDS OF THE AOP HAS NOT BEEN EXAMINED BY THE CIT(A). 24. WE FIND THAT THE CIT(A) HAS FAILED TO ADDRESS THE ISSUES IN THEIR PROPER PERSPECTIVE. THE CIT(A) UNDER THE PROV ISION OF SECTION 250(6) OF THE I.T. ACT IS TO PASS A SPEAKING ORDER ON THE FACTS AND CIRCUMSTANCES BEFORE IT. HOWEVER, WE FIND THAT THE CIT(A) HAS FAILED TO GIVE A FINDING IN RESPECT OF THE ISSUES R AISED BEFORE IT EXCEPT FOR UPHOLDING THE CLAIM OF THE ASSESSEE THAT ALL THE ABOVE SAID AMOUNTS ARE INCLUDED IN THE PEAK INVESTMENT TAXED I N THE HANDS OF THE AOP. THE CIT(A) REFERS TO THE ARGUMENTS OF THE ASSESSEE IN RESPECT OF ASSESSMENT YEARS 1995-96 TO 2001-02 BEIN G OUTSIDE THE PURVIEW PROVISIONS OF CHAPTER XIV B, BEING WORKED O UT ON HYPOTHETICAL BASIS, AND THE DELETION MADE BY THE CI T(A) IS NOT APPEALED BY THE REVENUE. IN THE INTEREST OF JUSTIC E, WE DEEM IT FIT TO RESTORE THE ISSUE BACK TO THE FILE OF THE CIT(A) TO RE-ADJUDICATE THE ISSUES POINTED OUT BY US IN PARAS 22 & 23 IN LINE W ITH OUR DIRECTIONS IN THE PARA HEREINABOVE AND AFTER CONSIDERING THE F ACTS AND TOTALITY AND AFTER DUE VERIFICATION OF THE DETAILS OF PEAK I NVESTMENT WORKED OUT IN THE HANDS OF THE AOP, BOTH IN RESPECT OF THE QUANTUM AND THE PERSONS WHOSE INCOME IS INCLUDED IN SUCH PEAK INVES TMENTS. THE CIT(A) SHALL ALLOW A REASONABLE OPPORTUNITY OF HEAR ING TO THE ASSESSEE. IT IS CLARIFIED THAT ISSUE RAISED BEFORE BY THE REVENUE IS ONLY IN RESPECT OF DELETION OF ADDITION ON ACCOUNT OF INTEREST EARNED FOR ASSESSMENT YEARS 1993-94 TO 1995-96 AND THUS IS SUES SENT BACK TO THE FILE OF CIT(A) ARE ONLY IN RESPECT OF THE AF ORESAID ASSESSMENT YEARS. GROUND NO.2 RAISED BY THE REVENUE IS ALLOWE D FOR STATISTICAL PURPOSES. 27. THE ISSUE BEFORE US IS IDENTICAL TO THE ISSUE R AISED BEFORE THE TRIBUNAL IN THE CASE OF DCIT VS. H.S.CHADHA (SUPRA) AND FOLLOWING THE SAME PARITY OF REASONING, WE REMIT THE ISSUE BA CK TO THE FILE OF THE CIT (APPEALS). 14 18. IN VIEW THEREOF, WE SET ASIDE THIS ISSUE ALSO T O THE FILE OF THE CIT (APPEALS) TO DECIDE THE SAME IN LINE WITH THE RATIO LAID DOWN IN THE CASE OF SISTER CONCERN. 19. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 19 TH DAY OF SEPTEMBER, 2014. SD/- SD/- (T.R.SOOD) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 19 TH SEPTEMBER, 2014 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH