The DCIT.., Central Circle-1(4), Ahmedabad V. Rekhaben K.Patel, Ahmedabad

ITSSA 60/AHD/2005

• Counselvise Citation: [2012] 121 COUNSELVISE.COM (IT) 8084 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 year(s) 2 month(s) 17 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 01-06-2012
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 17-05-2012
• Assessment Year: misc
• Appeal Filed On: 14-03-2005
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K GUPTA
• Assessee Lawyers: P M PATEL
• Keywords: Gift

Judgement Text

, , , , C, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, C BENCH . .. . . .. . , !' !' !' !', , , , #$ %&'( #$ %&'( #$ %&'( #$ %&'(, , , , )* + ) )* + ) )* + ) )* + ) ' ' ' ' BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND ANIL CHATURVEDI, ACCOUNTANT MEMBER) IT(SS)A NO.60/AHD/2005 WITH CO NO.124/AHD/2005 [BLOCK PERIOD 01.04.1995 TO 31.03.2001 & 1.4.2001 TO 13.12.2001] DCIT, CENT.CIR.1(4) AHMEDABAD. /VS. REKHABEN K. PATEL C/O. P.M. PATEL & CO., CHARTERED ACCOUNTANTS 2/3 RD FLOOR SAHYOG BUILDINGS LAL DARWAJA, AHEMDABAD. ( (( (-. -. -. -. / APPELLANT) ( (( (/0-. /0-. /0-. /0-. / RESPONDENT) + 1 2 )/ REVENUE BY : SHRI S.K. GUPTA, CIT-DR 4& 1 2 )/ ASSESSEE BY : SHRI P.M. PATEL 5 1 &(*/ DATE OF HEARING : 17 TH MAY, 2012 678 1 &(*/ DATE OF PRONOUNCEMENT : 1-06-2012 )9 / O R D E R PER G.C. GUPTA, VICE-PRESIDENT: THIS APPEAL BY THE REVENUE AND THE CO BY THE ASSESSEE FOR THE BLOCK PE RIOD 1.4.1995 TO 31.3.01 AND 1.4.2001 TO 13.12.2001 ARE DIRECTED AGA INST THE ORDER OF IT(SS)A NO.60/AHD/2005 WITH CO NO.124/AHD/2005 -2- THE COMMISSIONER OF INCOME TAX (APPEALS)-I, AHMEDAB AD DATED 21.12.2004. THESE ARE DISPOSED OF WITH THIS CONSOL IDATED ORDER. CO NO.124/AHD/2005 (ASSESSEES CO) 2. THE GROUND NOS.1 TO 4 OF THE ASSESSEES CO READ AS UNDER: 1. THE LD.CIT(A) IS NOT JUSTIFIED IN REJECTING GRO UND NO.1 & 2 WHILE HE HELD THAT RS.70,00,000/- WERE TAXABLE IN THE HANDS OF HER DECEASED HUSBAND AS LEGAL HEIR OF HER HUSBAND E SPECIALLY HE ALLOWED THE GROUND NO.18. 2. THE LD.CIT(A) IS NOT JUSTIFIED IN CONFIRMING RS.5,98,568.00 IN HER INDIVIDUAL STATUS WITHOUT BRI NGING ANY EVIDENCE ON RECORD THAT SAID INCOME WAS RECEIVED BY HER. 3. THE LD.CIT(A) HAS GROSSLY ERRED IN CONFIRMING AD DITION OF RS.75,98,568/- IN THE HANDS OF THE ASSESSEE WITHOUT APPRECIATING FACTS AND CIRCUMSTANCES OF THE CASE AN D ALSO PROVISION OF LAW. 4. THE LD.CIT(A) HAS ERRED IN CONFIRMING ADDITION O F RS.75,98,568/- IN THE HANDS OF THE ASSESSEE, AS THE ADDITION IS MADE ONLY ON THE BASIS OF STATEMENT OF RAVI BHATIA AND THE DIARY SEIZED FROM RESIDENTIAL PREMISES OF PIYUSH PA TEL WHO HAS NOT REBUTTED HIS BURDEN UNDER SECTION 132(4A) OF TH E IT ACT AND NOT SHIFTED BURDEN ON THE ASSESSEE. 3. THE LEARNED COUNSEL FOR THE ASSESSEE AT THE OUTS ET SUBMITTED THAT THE ADDITION AGITATED IN THESE GROUNDS OF CO OF THE ASSESSEE ARE LIABLE TO BE DELETED IN VIEW OF THE FACT THAT IT RELATES T O THE ADDITION MADE ON THE GROUND THAT SHRI K.K. PATEL (KKP FOR SHORT), THE LATE HUSBAND OF THE ASSESSEE HAS RECEIVED HUGE AMOUNT OF MONIES FRO M THE FIRM ON DIFFERENT DATES DURING HIS LIFE TIME AS PER ANNEXUR E A-30 (PAGE NOS.16-66) SEIZED FROM THE RESIDENCE OF ONE OF THE PARTNERS, SHRI PIYUSH PATEL AND THAT THE ASSESSEE WHO IS WIFE OF L ATE KKP WHO IT(SS)A NO.60/AHD/2005 WITH CO NO.124/AHD/2005 -3- EXPIRED ON 8.3.1999 AND AFTER THE DEMISE OF KKP, THE ASSESSEE BECAME 40% PARTNER IN THE FIRM. HE SUBMITTED THAT ON MERIT HE CAN DEMONSTRATE THAT NO ADDITION WAS CALLED FOR. BUT A PART FROM MERITS OF THE ISSUE, THE ADDITION IS NOT MAINTAINABLE SINCE P ERTAINS TO THE PERIOD WHEN THE HUSBAND OF ASSESSEE, KKP WAS ALIVE AND I F AT ALL ANY ACTION IS CALLED FOR, IT SHOULD HAVE BEEN INITIATED IN THE ASSESSMENT OF THE LATE HUSBAND OF THE ASSESSEE. THE LEARNED CIT -DR HAS OPPOSED THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSE SSEE. HE REFERRED TO RELEVANT PORTIONS OF THE ASSESSMENT ORDER IN SUPPOR T OF THE CASE OF THE REVENUE AND SUBMITTED THAT THE ASSESSEE COULD NOT E XPLAIN THE HUGE AMOUNT OF MONIES RECEIVED BY KKP WHO WAS INSTRUME NTAL BEHIND THE OPERATIONS OF THE FIRM AND THAT AFTER THE DEATH OF KKP, REIGNS OF THE BUSINESS OF THE PARTNERSHIP FIRM WAS TAKEN OVER BY THE PRESENT ASSESSEE AND SHE BECAME A 40% PARTNER IN THE FIRM. HE REFERRED TO PARA 2.2 AND 3.2 OF THE CIT(A)S ORDER WHEREIN SHE HAD RECORDED THAT KKP HAD EARNED SUCH UNDISCLOSED INCOME FOR WHICH, SHE WOULD BE LIABLE TO TAX AS HIS LEGAL HEIR AND THE APPELLANT W AS CALLED FOR GIVING NECESSARY EXPLANATION. THE CIT(A) HAS FURTHER RECO RDED THAT THE ASSESSEE HAS FAILED TO FILE SATISFACTORY EXPLANATIO N FOR THE AMOUNT OF MONIES BY HER HUSBAND OR BY HER, AND THEREFORE, THE CIT-DR ARGUED THAT THE GROUNDS OF THE CO OF THE ASSESSEE WERE LIA BLE TO BE REJECTED. 4. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE AO AND THE CIT(A) AND ALSO COPIES OF VARIOUS DO CUMENTS FILED BY THE REVENUE AS WELL AS THE ASSESSEE IN THE COMPILAT ION BEFORE US. WE FIND THAT THE PRELIMINARY OBJECTION RAISED BY THE A SSESSEE HAS TO BE DECIDED IN FAVOUR OF THE ASSESSEE IN RESPECT OF THE AMOUNT OF MONIES IT(SS)A NO.60/AHD/2005 WITH CO NO.124/AHD/2005 -4- RECEIVED BY KKP LATE HUSBAND OF THE ASSESSEE DURI NG HIS LIFT TIME. THE DATE OF DEATH OF KKP IS 8.3.1999. THE AO IN PARA.2 OF THE ASSESSMENT ORDER HAS RECORDED THAT THE RECEIPT OF M ONIES BY KKP, AS PER ANNEXURE A-30 SEIZED BY THE DEPARTMENT, ON VARI OUS DATES WHICH ARE PRIOR TO 8.3.1999, THE DATE OF DEATH OF HUSBAND OF THE ASSESSEE. SINCE THE UNDISPUTED FACT IN THIS CASE IS THAT THE RECEIPTS OF THE MONIES WERE BY KKP DURING HIS LIFETIME AND THERE IS NO E VIDENCE OR MATERIAL BROUGHT ON RECORD TO SUGGEST THAT THE ASSE SSEE (THE WIDOW) HAS EVER RECEIVED THESE AMOUNTS OF MONIES, AS RECOR DED IN ANNEXURE A-30, WE HOLD THAT NO ADDITION ON THIS COUNT COULD HAVE BEEN MADE IN THE HANDS OF THE ASSESSEE. THE ASSESSEE AS WELL AS HER LATE HUSBAND ARE CLEARLY SEPARATE LEGAL ENTITIES, ASSESSABLE TO TAX SEPARATELY. IF ANY ACTION WAS CALLED FOR, THE DEPARTMENT SHOULD HAVE I NITIATED THE SAME IN THE HANDS OF THE LATE KKP THROUGH HIS LEGAL HEIRS AND NOT IN THE PERSONAL ASSESSMENT CASE OF THE WIDOW OF THE DECEAS ED, WHICH IS THE APPELLANT IN THE PRESENT CASE BEFORE US. IN THESE FACTS OF THE CASE, WE HOLD THAT THE ADDITION OF RS.70,00,000/- MADE BY TH E DEPARTMENT ON ACCOUNT OF MONIES RECEIVED BY THE HUSBAND OF THE AS SESSEE DURING HIS LIFE TIME COULD NOT BE MADE IN THE HANDS OF THE ASS ESSEE, WHICH IS ACCORDINGLY DELETED. THE BALANCE ADDITION OF RS.5, 98,568/- IS ALSO NOT MAINTAINABLE SINCE THERE IS NO MATERIAL BROUGHT ON RECORD BY THE REVENUE TO SUGGEST THAT THE AMOUNT RELATES TO THE A SSESSEE AND WAS IN THE NATURE OF THE INCOME IN THE HANDS OF THE ASSESS EE. ACCORDINGLY, THE GROUND NOS.1 TO 4 OF THE ASSESSEES CO ARE ALLO WED. 5. THE GROUND NOS.5 AND 6 OF THE ASSESSEES CO READ AS UNDER: IT(SS)A NO.60/AHD/2005 WITH CO NO.124/AHD/2005 -5- 5. THE LD.CIT(A) HAS ERRED IN CONFIRMING ADDITION OF RS.65,000/- MADE ONLY ON THE BASIS OF TWO RECEIPTS IN THE NAME OF THE ASSESSEE FOUND FROM THE PREMISES OF THE THIR D PARTY NAMELY VAIKUNTH OFFICE. 6. THE LD.CIT(A) HAS ERRED WHILE CONFIRMING THE ADD ITION OF RS.65,000/- IN DECIDING THAT BURDEN LIES WITH THE A SSESSEE WITHOUT DISCHARGING OR SHIFTING BURDEN ON VAIKUNTH OFFICE BEARER WHO HAS PRIMARY BURDEN UNDER SECTION 132(4A) OF THE IT ACT. 6. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ADDITION OF RS.65,000/- MADE ON THE BASIS OF TWO RECEIPTS IN THE NAME OF THE ASSESSEE FOUND FROM THE PREMISES OF THIRD PARTY VIZ . VAIKUNTH OFFICE SHOULD NOT HAVE BEEN MADE IN THE HANDS OF THE ASSES SEE, AS THE ASSESSEE HAS NOT RECEIVED ANY RENTAL INCOME WHATSOE VER AND THE BURDEN IS ON THE REVENUE TO PROVE THAT THE AMOUNT W AS INCOME IN THE HANDS OF THE ASSESSEE. HE HAS REFERRED TO PAGE NO. 21 ONWARDS OF THE COMPILATION FILED BY THE ASSESSEE IN SUPPORT OF THE PLEA THAT THE AMOUNT IN QUESTION HAS NO RELATION WITH THE ASSESSE E. THE LEARNED DR HAS RELIED ON THE ORDER OF THE AO. 7. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND HAS PER USED THE ORDERS OF THE AO AND THE CIT(A). THE ASSESSEE HAS FILED A DETAILED EXPLANATION BEFORE THE AO IN SUPPORT OF ITS CASE TH AT THE AMOUNT IN QUESTION DOES NOT BELONG TO THE ASSESSEE AND THE AO HAS WRONGLY MIXED UP SHREEJI CORPORATION AND SHIVSHAKTI CONSULT ANCY WHICH ARE DISTINCT AND SEPARATE ENTITY AND THE ASSESSEE HAS N O CONNECTION WITH THEM AS SHE WAS NEITHER A SHAREHOLDER NOR DIRECTOR OF THE ABOVE ENTITIES. WE FIND THAT THE AO HAS NOT EXAMINED THE OFFICE BEARERS OF THE SAID TWO ENTITIES. THE REVENUE COULD NOT CONTR OVERT THE IT(SS)A NO.60/AHD/2005 WITH CO NO.124/AHD/2005 -6- SUBMISSIONS OF THE ASSESSEE THAT SHE WAS NOT A MEMB ER OR OFFICE BEARER OF TWO CO-OPERATIVE HOUSING SOCIETIES. IN T HESE FACTS OF THE CASE, WE HOLD THAT IN THE ABSENCE OF ANY EVIDENCE B ROUGHT ON RECORD TO SHOW THAT THE AMOUNT BELONGS TO THE ASSESSEE, NO AD DITION ON THIS COUNT COULD BE MADE, WHICH IS ACCORDINGLY DELETED A ND THE GROUND NOS.5 AND 6 OF THE ASSESSEES CO ARE ALLOWED. 8. THE GROUND NO.7 OF THE ASSESSEES CO IS AS UNDER : 7. THE LD.CIT(A) HAS ERRED IN CONFIRMING ADDITION OF RAS.3,31,215/- IN THE HANDS OF THE ASSESSEE AS THE SCHEME KANA APARTMENT WAS NETHER LAUNCHED BY THE ASSESSEE NOR S HE WAS A PARTNER IN THE SCHEME NOR OFFICE BEARER IN THE SCHE ME AND ASSESSEE NEVER RECEIVED SAID AMOUNT NOR SHE DEEM TO BE ACCRUED OR RECEIVED SAID AMOUNT. 9. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE AMOUNT OF RS.3,31,215/- WAS NEVER RECEIVED BY THE ASSESSEE AND SHE WAS NEVER A PARTNER OR MEMBER IN THE SCHEME KNOWN AS KANA AP ARTMENTS WHICH WAS NEVER LAUNCHED BY THE ASSESSEE AND THEREF ORE, THE ADDITION MADE SHOULD NOT BE SUSTAINED. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT THE DATE OF RECEIPTS AS RECO RDED BY THE AO IN PARA-5 OF THE ASSESSMENT ORDER RELATES TO THE PERIO D PRIOR TO THE DEATH OF THE LATE HUSBAND OF THE ASSESSEE, AND THEREFORE, IF AT ALL ADDITION IS CALLED FOR, IT SHOULD BE MADE IN THE HANDS OF KKP AND NOT THE ASSESSEE. THE LEARNED DR REFERRED TO THE RELEVANT PORTIONS OF THE ASSESSMENT ORDER IN SUPPORT OF THE CASE OF THE REVE NUE. HE SUBMITTED THAT THE ASSESSEE HAS FAILED TO DISCHARGE ITS ONUS UNDER SECTION 132(4A) OF THE ACT AND REFERRED TO SOME DECISIONS O F THE HIGH COURTS AS RECORDED BY THE AO IN PARA 5.4 OF THE ASSESSMENT ORDER. IT(SS)A NO.60/AHD/2005 WITH CO NO.124/AHD/2005 -7- 10. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSE D THE ORDERS OF THE AO AND THE CIT(A). WE FIND THAT FROM A PERUSAL OF THE DETAILS OF THE AMOUNTS ALLEGED TO HAVE BEEN RECEIVED FROM KAN A SCHEME LAUNCHED BY LATE HUSBAND OF THE ASSESSEE, KKP, AL L THE PAYMENTS TOTALING TO RS.3,31,215/- RELATED TO THE PERIOD PRI OR TO 8.3.1999, THE DATE OF DEATH OF HUSBAND OF THE ASSESSEE, KKP. F OR THE REASONS RECORDED WHILE DISPOSING OF THE GROUND NOS.1 TO 4 O F THE CO OF THE ASSESSEE, IN THE FOREGOING PARAS OF THIS ORDER, WE HOLD THAT NO ACTION FOR THE PAYMENTS DURING THE LIFE TIME OF THE HUSBAN D OF THE ASSESSEE COULD BE MADE IN THE INDIVIDUAL ASSESSMENT OF THE A SSESSEE, AND ACCORDINGLY, THE ADDITION MADE BY THE AO IS DELETED AND GROUND NO.7 OF THE CO OF THE ASSESSEE IS ALLOWED. 11. THE GROUND NO.8 OF THE ASSESSEES CO READS AS U NDER: 8. THE LD.CIT(A) HAS ERRED IN CONFIRMING ADDITION OF RS.4,76,000/- VARIOUS AMOUNTS DEPOSITED IN BANK ACC OUNT NO.8823, STATE BANK OF INDIA WITHOUT CONSIDERING FA CTS AND CIRCUMSTANCES OF THE CASE AND PRINCIPLE OF PREPONDE RANCE OF PROBABILITY. 12. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ADDITION HAS BEEN MADE ON MATERIAL NOT ARISING OUT OF THE SE ARCH. HE REFERRED TO DECISIONS OF THE COURTS AS DETAILED IN THE COMPI LATION FILED BY THE ASSESSEE. HE SUBMITTED THAT THE ASSESSEE HAS SOME AGRICULTURAL INCOME AND THAT THE DEPOSIT OF RS.21,500/- DTD. 26-3-1996 IS BELOW TAXABLE AND DEPOSITS OF RS.1,00,000/- ON 26.7.2000 WAS OUT OF WITHDRAWAL MADE FROM THE BANK ACCOUNT OF THE ASSESSEE ONLY FOU R DAYS AGO AND OTHER ENTRIES ARE COVERED BY THE AGRICULTURAL INCOM E EARNED BY THE IT(SS)A NO.60/AHD/2005 WITH CO NO.124/AHD/2005 -8- ASSESSEE. THE LEARNED DR HAS OPPOSED THE SUBMISSIO NS OF THE ASSESSEE AND SUBMITTED THAT THE ADDITION WAS MADE O N THE BASIS OF SEARCH MATERIAL. HE SUBMITTED THAT EXCEPT THE DIAR Y ENTRY OF RS.21,500/- DATED 26.3.96 ALL OTHER DEPOSITS ENTRIE S IN THE SBI ACCOUNTS BY THE ASSESSEE PERTAINED TO THE PERIOD AF TER THE DEATH OF HUSBAND OF ASSESSEE, KKP AND THEREFORE THE ADDITI ON WAS RIGHTLY MADE IN THE HANDS OF THE ASSESSEE. 13. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSE D THE ORDERS OF THE AO AND THE CIT(A). WE FIND THAT THE ASSESSEE COULD NOT ESTABLISH THAT THE ADDITION WAS MADE ON ACCOUNT OF MATERIAL N OT ARISING OUT OF SEARCH ACTION UNDERTAKEN BY THE DEPARTMENT. REGARD ING FIRST ENTRY OF RS.21,500/- DATED 26.3.1996 OF DEPOSIT IN THE BANK ACCOUNT WITH THE SBI, WE FIND THAT THE AMOUNT IS LESS THAN THE STATU TORY EXEMPTION IN THE INDIVIDUAL CAPACITY OF THE ASSESSEE, AND THEREF ORE, NO ADDITION ON THIS COUNT COULD BE MADE. THE NEXT ENTRY OF RS.1,0 0,000/- DATED 26.7.2000 IS STATED TO BE OUT OF WITHDRAWAL OF RS.1 ,00,000/- FROM THE BANK ACCOUNT OF THE ASSESSEE AND THIS CLAIM WAS MAD E BY THE ASSESSEE BEFORE THE AO ALSO. THE DEPARTMENT HAS NOT CONTROV ERTED THIS SUBMISSION OF THE ASSESSEE, AND ACCORDINGLY, WE HOL D THAT THE ADDITION OF RS.1,00,000/- IS NOT CALLED FOR. REGARDING THE BALANCE ADDITION, THE ASSESSEE HAS TRIED TO EXPLAIN THE SOURCE THEREOF BY GIVING A GENERAL EXPLANATION THAT IT IS OUT OF AGRICULTURAL INCOME E ARNED BY THE ASSESSEE. THE ASSESSEE HAS NOT SHOWN ANY EVIDENCE OF HAVING A GRICULTURAL INCOME AND NEXUS BETWEEN THE INCOME AND THE DEPOSIT S MADE IN THE BANK ACCOUNT, AND ACCORDINGLY, WE SUSTAIN THE ADDIT ION OF RS.3,54,500/- ON ACCOUNT OF ENTRIES IN THE BANK ACC OUNTS WITH THE SBI IT(SS)A NO.60/AHD/2005 WITH CO NO.124/AHD/2005 -9- OUT OF TOTAL ADDITION OF RS.4,76,000/- AND THE GROU ND NO.8 OF THE CO OF THE ASSESSEE IS PARTLY ALLOWED. 14. THE GROUND NO.9 OF THE CO OF THE ASSESSEE READS AS UNDER: 9. THE LD.CIT(A) HAS ERRED IN CONFIRMING ADDITION OF RS.1,24,000/- DEPOSITED IN VARIOUS ACCOUNTS NAMELY 8,500 IN THE NAME OF GUNJAN K. PATEL IN SARASPUR NAGRIK SAHAKARI BANK LTD. RS.31,500, IN THE NAME OF GUNJAN K. PATEL PPF ACCOUNT RS.12,500, IN THE NAME OF REKHABEN K. PATEL, PPF AC COUNT RS.12,5000 IN THE NAME OF REKHABEN IN SARASPUR NAGR IK SAHAKARI BANK LTD. RS.8,000 IN THE NAME OF REKHABEN IN BAPUNAGAR MAHILA CO-OPERATIVE BANK LTD., RS.6,500 I N THE NAME OF PRIYANKA IN SARASPUR NAGRIK SAHAKARI BANK L TD. AND RS.30,500 IN THE NAME OF PRIYANKA IN PPF ACCOUNT WI THOUT CONSIDERING FACTS AND CIRCUMSTANCES OF0 THE CASE AN D SOURCE OF AMOUNT. 15. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ADDITION OF RS.1,24,000/- WAS WRONGLY MADE ON ACCOUNT OF DEP OSIT ENTRIES IN THE ACCOUNTS OF SONS AND DAUGHTERS OF THE ASSESSEE. THE LEARNED DR RELIED ON THE ORDER OF THE AO. 16. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE AO AND THE CIT(A). WE FIND THAT THE ADDITION CONSI ST OF SMALL AMOUNTS OF DEPOSITS MADE IN THE NAMES OF SONS AND D AUGHTERS OF THE ASSESSEE, FOR WHICH NO ADVERSE VIEW COULD BE TAKEN IN THE HANDS OF THE ASSESSEE. THERE IS NO MATERIAL BROUGHT ON RECORD T O SUGGEST THAT THE AMOUNTS BELONGED TO THE ASSESSEE, AND ACCORDINGLY A DDITION MADE IS DELETED AND THE GROUND NO.9 OF THE ASSESSEES CO IS ALLOWED. 17. THE GROUND NO.10 OF THE ASSESSEES CO READS AS UNDER: IT(SS)A NO.60/AHD/2005 WITH CO NO.124/AHD/2005 -10- 10.THE LD.CIT(A) HAS ERRED IN CONFIRMING ADDITION OF RS.15,85,000/- MADE ON THE BASIS OF A SMALL TELEPHO NE DIARY WHICH WAS NOT BOOKS OF ACCOUNTS NOR A DOCUMENT BEFO RE CONFIRMING SUCH AMOUNTS THE LD.CIT(A) OUGHT TO HAVE DETAILED SUBMISSION AND VARIOUS JUDGMENTS PRODUCED BEFORE HI M. 18. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE BASIS OF ADDITION WAS A SMALL TELEPHONE DIARY WHICH IS NEITH ER BOOK OF ACCOUNTS NOR A DOCUMENT, AND THEREFORE WAS A DUMP D OCUMENT AND NO ADVERSE VIEW SHOULD HAVE BEEN TAKEN BY THE DEPARTME NT. THE LEARNED CIT-DR SUBMITTED THAT THE TELEPHONE DIARY WAS NOT A DUMP DOCUMENT AND IN FACT NAME OF THE PERSONS ALONG WITH THE AMOU NT AND THE DATE OF THEREOF WERE DULY MENTIONED IN THE DOCUMENT A/7 SEI ZED FROM THE RESIDENCE OF THE ASSESSEE. HE SUBMITTED THAT THE EN TRY PERTAINS TO THE PERIOD AFTER THE DEATH OF THE HUSBAND OF THE ASSESS EE. HE RELIED ON THE ORDERS OF THE AO AND THE CIT(A). 19. WE HAVE CONSIDERED RIVAL SUBMISSION AND PERUSED THE ORDERS OF THE AO AND THE CIT(A) AND ALSO PERUSED COPY OF SO-C ALLED TELEPHONE DIARY WHICH HAS BEEN FILED IN THE COMPILATION OF TH E ASSESSEE. WE FIND THAT THE IDENTITY OF THE SAID PERSONS WAS NOT ESTAB LISHED IN THIS CASE. MERELY BECAUSE SOME FIGURES ARE MENTIONED IN THE SE IZED DIARY WITHOUT ANY HEAD OR TAIL THEREOF, THE ADDITION OF T HE SAME, AS INCOME IN THE HANDS OF THE ASSESSEE COULD NOT BE MADE. THE A O HAS MADE THE ADDITION ON THE BASIS THAT ONUS WAS ON THE ASSESSEE TO EXPLAIN ALL THE ENTRIES SEIZED FROM THE RESIDENCE OF THE ASSESSEE A ND NO INDEPENDENT VERIFICATION WAS POSSIBLE IN VIEW OF NON-DISCLOSURE OF THE PARTICULARS OF THE PARTIES AND IN THE ABSENCE OF THE SAME, THE CONTENTION OF THE ASSESSEE IS NOT ACCEPTABLE. THE PRE-DOMINANCE OF P ROBABILITY WAS IN IT(SS)A NO.60/AHD/2005 WITH CO NO.124/AHD/2005 -11- FAVOUR OF THE ASSESSEE AS THERE IS NO CORROBORATIVE EVIDENCE PLACED ON RECORD TO SUGGEST THAT THE FIGURES MENTIONED IN THE COLUMN FOUND WAS IN FACT THE INCOME OF THE ASSESSEE. TO TREAT THE N OTING FOUND WITH THE ASSESSEE AS INCOME IN HER HAND, SOME EVIDENCE TO CO RROBORATE THAT THE SAME REPRESENTS THE UNDISCLOSED INCOME OF THE ASSES SEE HAS TO BE BOUGHT ON RECORD. IN THESE FACTS, WE DECIDE THE IS SUE IN FAVOUR OF THE ASSESSEE AND GROUND NO.10 OF THE ASSESSEES CO IS A LLOWED. 20. GROUND NOS.11 AND 12 OF THE ASSESSEES CO ARE G ENERAL IN NATURE AND REQUIRES NO ADJUDICATION. IT(SS)A.NO.60/AHD/2005 (REVENUES APPEAL) 21. THE GROUND NO.1 OF THE REVENUES APPEAL READS A S UNDER: 1. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIR ECTING TO DELETE THE ADDITION OF RS.50,000/- MADE ON ACCOUNT OF UNACCOUNTED RECEIPTS BY WAY OF CHEQUE RECEIVED FROM ABOARD. 22. THE LEARNED DR SUBMITTED THAT THE ISSUE IS SIMI LAR, AS THE ISSUE WAS IN GROUND NO.1 TO 4 OF THE ASSESSEES CO. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT ENTRIES OF RS.50,00 0/- REPRESENTS GIFT CHEQUE OF 1,000 DOLLARS GIVEN BY SHRI DEVENDRA PATE L AND HAS FILED PHOTO COPIES OF CHEQUE IN QUESTION IN COMPILATION B EFORE THE TRIBUNAL. 23. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSE D THE COPIES OF GIFT CHEQUES OF 1000 DOLLARS ISSUED BY SHRI DEVE NDRA PATEL IN WHICH HIS COMPLETE ADDRESS AND BANK ACCOUNT ETC. ARE GIVE N. NO FURTHER INQUIRY IN THIS REGARD WAS MADE BY THE DEPARTMENT A ND ACCORDINGLY, IT(SS)A NO.60/AHD/2005 WITH CO NO.124/AHD/2005 -12- WE FIND NO MERIT IN THE GROUND NO.1 OF THE REVENUE, WHICH IS ACCORDINGLY DISMISSED. 24. THE GROUND NO.2 OF THE REVENUES APPEAL READS A S UNDER: 2. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIR ECTING TO DELETE THE ADDITION OF RS.2,00,000/- MADE ON ACCOUN T OF UNACCOUNTED RECEIPTS BY WAY OF SUMS RECEIVED FROM S HRI L.D. RAJPUT. 25. THE LEARNED CIT-DR SUBMITTED THAT THE ASSESSEE COULD NOT GIVE ANY EVIDENCE IN RESPECT OF THE ENTRIES OF RS.2 LAKH S AND REFERRED TO THE RELEVANT PORTIONS OF THE ASSESSMENT ORDER IN SUPPOR T OF THE CASE OF THE REVENUE. THE LEARNED COUNSEL FOR THE ASSESSEE REFE RRED TO PHOTO-COPY OF GIFT CHEQUES OF RS.1,00,000/- EACH DATED 15-11-2 000 AND 12-10- 2000 WHICH WERE SEIZED BY THE DEPARTMENT AT TIME OF SEARCH AND HAVE NOT ENCASHED TILL DATE. 26. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND HAVE P ERUSED THE COPIES OF THE GIFT CHEQUES OF RS.1,00,000/- EACH TO TALING TO RS.2,00,000/-. WE FIND THAT THE ASSESSEE HAS CLAIM ED THAT THE CHEQUES IN QUESTION FOUND AT THE TIME OF SEARCH WERE SEIZED BY THE DEPARTMENT IS STILL LYING WITH THEM AND COULD NOT BE ENCASHED TILL DATE AND SINCE MONEY WAS NEVER TRANSFERRED TO THE ACCOUNT OF THE A SSESSEE, NO ADDITION COULD BE MADE IN THE HANDS OF THE ASSESSEE . ACCORDINGLY, WE CONFIRM THE ORDER OF THE CIT(A) ON THIS ISSUE AND T HE GROUND NO.2 OF THE REVENUES APPEAL IS DISMISSED. 27. THE GROUND NO.3 OF THE REVENUES APPEAL READS A S UNDER: IT(SS)A NO.60/AHD/2005 WITH CO NO.124/AHD/2005 -13- 3. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRECTING THAT CERTAIN INCOME IDENTIFIED AS INCLUDIBLE IN THE TOTAL UNDISCLOSED INCOME FOR THE BLOCK PERIOD WOULD BE IN CLUDED IN THE HANDS OF THE ASSESSEE ONLY IN HER REPRESENTATIV E CAPACITY AS LEGAL HEIR OF HER DECEASED HUSBAND AND IN FURTHER D IRECTING THAT THE ADDITION OF RS.70,00,000/- OUT OF ADDITION MADE OF RS.75,98,568/- ON ACCOUNT OF UNACCOUNTED RECEIPTS W AS INCLUDIBLE IN HER (THE ASSESSEES) HANDS AS LEGAL H EIR OF HER DECEASED HUSBAND. 28. BOTH PARTIES BEFORE US SUBMITTED THAT THE ISSUE RAISED IN THIS APPEAL OF THE REVENUE IS COVERED WITH THE GROUND NO S.1 TO 4 OF THE ASSESSEES CO IN THIS CASE. 29. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IN V IEW OF OUR DECISION WHILE DISPOSING OF THE GROUND NOS.1 TO 4 O F THE CO OF THE ASSESSEE AND FOR THE REASONS RECORDED THEREIN, IN T HE FOREGOING PARAS OF THIS ORDER, WE HOLD THAT THERE IS NO MERIT IN THE G ROUND NO.3 OF THE REVENUES APPEAL, WHICH IS ACCORDINGLY DISMISSED. 30. THE GROUND NO.4 OF THE REVENUES APPEAL READS A S UNDER: 4. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRECTING TO DELETE THE ADDITION OF RS.91,400/- MADE ON ACCOU NT OF UNDISCLOSED RENTAL INCOME. 31. THE LEARNED CIT-DR SUBMITTED THAT THESE ENTRIES PERTAIN TO THE PERIOD AFTER THE DEATH OF HUSBAND OF THE ASSESSEE. HE SUBMITTED THAT THE ADDITION WAS MADE OF RS.91,400/- ON PROTECTIVE BASIS, AS THE SUBSTANTIVE ADDITION WAS MADE IN THE HANDS OF SHREE JI CORPORATION. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AMOUNT IN QUESTION HAS ALREADY TAXED IN THE CASE OF THE FIRM AND THE ORDER HAS IT(SS)A NO.60/AHD/2005 WITH CO NO.124/AHD/2005 -14- BECOME FINAL AND THEREFORE THE SAME ADDITION COULD NOT BE MADE IN THE HANDS OF THE ASSESSEE. 32. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE AO AND THE CIT(A). WE FIND THAT THE REVENUE COULD NOT CONTROVERT TO THE SUBMISSIONS OF THE ASSESSEE THAT THE AMOUNT IN QUESTION HAS ALREADY TAXED IN THE HANDS OF THE FIRM AND THEREFOR E, THE SAME COULD NOT BE TAXED IN THE HANDS OF THE ASSESSEE EVEN ON P ROTECTIVE BASIS. THE CIT(A) HAS RECORDED THAT DIARY IN QUESTION WAS FOUND FROM THE PREMISES OF THE FIRM AND WAS NOT FOUND TO BE WRITTE N IN THE HAND- WRITING OF THE ASSESSEE, AND ACCORDINGLY DELETED TH E ADDITION MADE BY THE AO. THERE BEING NO MISTAKE IN THE ORDER OF THE CIT(A) ON THIS ISSUE, THE SAME IS CONFIRMED AND THE GROUND NO.4 OF THE REVENUES APPEAL IS DISMISSED. 33. THE GROUND NO.5 OF THE REVENUES APPEAL READS A S UNDER: 5. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIR ECTING TO DELETE THE SURCHARGE LEVIED U/S.113 OF THE IT ACT B Y HOLDING THAT SURCHARGE IS NOT LEVIABLE IN RESPECT OF SEARCHES CO NDUCTED PRIOR TO 01.06.2002, THOUGH THE PROVISO TO SECTION 113 OF THE ACT SPECIALLY PROVIDES THAT SURCHARGE IS LEVIABLE IN TH E CASE OF SEARCHES U/S.132 INITIATED ON OR AFTER 01.04.1999. 34. WE HAVE HEARD BOTH THE PARTIES. THIS ISSUE IS COVERED IN FAVOUR OF THE REVENUE BY THE DECISION OF HONBLE SUPREME C OURT IN THE CASE OF CIT VS. SURESH N. GUPTA, 297 ITR 322 (SC), AND A CCORDINGLY, THE ISSUE IS DECIDED IN FAVOUR OF THE REVENUE AND THE G ROUND NO.5 OF THE REVENUE IS ALLOWED. IT(SS)A NO.60/AHD/2005 WITH CO NO.124/AHD/2005 -15- 35. THE GROUND NO.6 AND 7 OF THE REVENUES APPEAL I S GENERAL IN NATURE AND NEEDS NO ADJUDICATION. 36. IN THE RESULT, THE ASSESSEES CO AND REVENUES APPEAL ARE PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( %&'( %&'( %&'( %&'( / ANIL CHATURVEDI) )* + )* + )* + )* + /ACCOUNTANT MEMBER ( . .. . . .. . /G.C. GUPTA) !' !' !' !' /VICE-PRESIDENT C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD