Shri Ashok Gupta, Bhopal V. The DCIT (CENTRAL), Bhopal

ITSSA 64/IND/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9888 (ITAT-INDORE)
• Duration Of Justice: 3 year(s) 3 month(s) 29 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 30-06-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 05-03-2020
• Assessment Year: 2011-2012
• Appeal Filed On: 01-03-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S B PRASAD
• Assessee Lawyers: S S DES
• Keywords: Unexplained investment; Sale consideration of property below Jantri Value; Unexplained expenditure; Capital asset; Income from undisclosed sources; Search and seizure; Loose papers; Document seized; Share purchase agreement; Source of fund; Cost of acquisition; Valuation report; Validity of assessment; Onus to prove; Retraction; Documents seized; Set aside; Capital Gains
• Section: 69C; 143(3); 50C; 142(1); 153A; 195; 69B; 201; 69A; 191; 139(1); 64; 113; 43; 48; 73; 72; 13; 153; 119; 22; 131; 69; 145; 132; 139

Judgement Text

ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE HONBLE KUL BHARAT, JUDICIAL MEMBER AND HONBLE MANISH BORAD, ACCOUNTANT MEMBER IT(SS) NOS.64 & 161/IND/2017 ASSESSMENT YEARS 2011-12 & 2012-13 IT(SS) NOS.66, 67 & 162/IND/2017 ASSESSMENT YEARS 2006-07, 2011-12 & 2012-13 REVENUE BY SHRI S. B. PRASAD , CIT ASSESSEE BY SHRI S.S. DESPANDE, CA DATE OF HEARING 11.03.2020 DATE OF PRONOUNCEMENT 30 . 0 6 .20 20 DR. ASHOK GUPTA, B-253, SHAHPURA BHOPAL VS. DCIT ( CENTRAL ) , BHOPAL (APPELLANT) (RESPONDENT ) PAN NO.AEKPG3970P DR. NEERAJ KUMAR GUPTA, A-12, SUBHASH NAGAR, BHOPAL VS. DCIT (CENTRAL) , BHOPAL (APPELLANT) (RESPONDENT ) PAN NO.AJRPK0363K ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 2 O R D E R PER MANISH BORAD, AM THE ABOVE CAPTIONED BUNCH OF APPEALS FILED AT THE INSTANCE OF THE ASSESSEE(S) PERTAINING TO ASSESSMENT YEARS 200 6-07, 2011-12 & 2012-13 ARE DIRECTED AGAINST THE ORDERS OF LD. CO MMISSIONER OF INCOME TAX (APPEALS)-3 (IN SHORT LD.CIT(A)], BHOP AL DATED 20.01.2017 & 19.01.2017 WHICH ARE ARISING OUT OF TH E ORDER U/S 153A R.W.S 143(3) OF THE INCOME TAX ACT 1961(IN S HORT THE ACT) DATED 14.03.2014 FRAMED BY DCIT(CENTRAL), BHOPAL. 2. ASSESSEE(S) HAS RAISED FOLLOWING GROUNDS OF APPEAL S; (A) DR. ASHOK GUPTA IT(SS) NO.64/IND/2017 ASSESSMENT YEAR 2011-12 1. THAT THE ASSESSMENT MADE U/S 153A R.W.S.143(3) OF T HE INCOME-TAX ACT BE HELD TO BE BAD IN LAW AND ON FACTS AND BE QU ASHED. 2. THAT THE ADDITION OF RS.75.000/- ON ACCOUNT OF UNEX PLAINED FOREIGN EXPENDITURE U/S 69C AS DISCUSSED BY THE LEARNED DCI T IN PARA NO.11.4 OF THE ASSESSMENT ORDER BE HELD TO BE BAD AND UNJUS TIFIED ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND BE QUASHED AND DELETED. 3. THAT THE ADDITION OF RS.40,OO,OOO/- ON ACCOUNT OF VOLUNTARY DISCLOSURE U/S 132(4) AGAINST THE CASH RECEIVED FRO M BANSAL GROUP FOR SALE OF SHARES OF AYUSHMAN MEDICAL DIAGNOSTIC PVT. LTD. AS DISCUSSED BY THE LEARNED DCIT IN PARA NO.20.9 OF THE ASSESSME NT ORDER BE HELD TO BE BAD AND UNJUSTIFIED ON THE FACTS AND IN THE CIRC UMSTANCES OF THE CASE AND BE QUASHED AND DELETED. ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 3 4. THAT THE ADDITION OF RS.4,50,OOO/- ON ACCOUNT OF UN DISCLOSED CASH INVESTMENT U/S 69B AS DISCUSSED BY THE LEARNED DCIT IN PARA NO.14.4 OF THE ASSESSMENT ORDER BE HELD TO BE BAD AND UNJUS TIFIED ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND BE QUASHED AND DELETED. 5. THAT IN THE ALTERNATIVE AND WITHOUT PREJUDICE TO TH E GROUNDS STATED ABOVE THE ADDITIONS MADE BE HELD TO BE HIGHLY UNREA SONABLE AND EXCESSIVE AND BE REDUCED. 6. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY GROU ND OF APPEAL BEFORE OR DURING THE COURSE OF HEARING OF THE CASE. IT(SS) NO.161/IND/2017 ASSESSMENT YEAR 2012-13 1. THAT THE ASSESSMENT MADE U/S 153A R.W.S.143(3) OF T HE INCOME-TAX ACT BE HELD TO BE BAD IN LAW AND ON FACTS AND BE QU ASHED. 2. THAT THE ADDITION OF RS.16,26,897/- MAINTAINED AND CONFIRMED BY CIT(A) ON ACCOUNT OF CASH AND FOREIGN CURRENCY FOUN D U/S 69 AS DISCUSSED BY THE LEARNED DCIT IN PARA NO.10.5 OF TH E ASSESSMENT ORDER BE HELD TO BE BAD AND UNJUSTIFIED ON THE FACT S AND IN THE CIRCUMSTANCES OF THE CASE AND BE QUASHED AND DELETE D. 3. THAT THE ADDITION OF RS.1 ,40,914/- ON ACCOUNT OF V OLUNTARY DISCLOSURE U/S 132(4) AS DISCUSSED BY THE LEARNED D CIT IN PARA NO.19.6 OF THE ASSESSMENT ORDER BE HELD TO BE BAD A ND UNJUSTIFIED ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND BE QUASHED AND DELETED. 4. THAT THE ADDITION OF RS.1,75,00,000/- ON ACCOUNT OF VOLUNTARY DISCLOSURE U/S 132(4) AGAINST THE CASH RECEIVED FRO M BANSAL GROUP FOR SALE OF SHARES OF AYUSHMAN MEDICAL DIAGNOSTIC P VT LTD. AS DISCUSSED BY THE LEARNED DCIT IN PARA NO.20.9 OF TH E ASSESSMENT ORDER BE HELD TO BE BAD AND UNJUSTIFIED ON THE FACT S AND IN THE CIRCUMSTANCES OF THE CASE AND BE QUASHED AND DELETE D. 5. THAT THE ADDITION OF RS.1,85,00,000/- ON ACCOUNT OF CASH RECEIVABLE FROM BANSAL GROUP FOR SALE OF SHARES OF AYUSHMAN ME DICAL DIAGNOSTIC PVT LTD. AS DISCUSSED BY THE LEARNED DCI T IN PARA NO.20.10 OF THE ASSESSMENT ORDER BE HELD TO BE BAD AND UNJUSTIFIED ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND BE QUASHED AND DELETED. 6. THAT THE ADDITION OF RS.13,00,000/- ON ACCOUNT OF U NEXPLAINED EXPENDITURE U/S 69C AS DISCUSSED BY THE LEARNED DCI T IN PARA NO.12.6 OF THE ASSESSMENT ORDER BE HELD TO BE BAD A ND UNJUSTIFIED ON / THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND BE QUASHED AND DELETED. 7. THAT THE ADDITION OF RS.1 ,86,478/- MAINTAINED AND CONFIRMED BY CIT(A) ON ACCOUNT OF SHORT-TERM CAPITAL GAIN U/S 50 C BY ADOPTING COST OF ACQUISITION AT RS.59,76,625/- IN PLACE OF R S.61,23,103/- AS DISCUSSED BY THE LEARNED DCIT IN PARA NO.17.5 OF TH E ASSESSMENT ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 4 ORDER BE HELD TO BE BAD AND UNJUSTIFIED ON THE FACT S AND IN THE CIRCUMSTANCES OF THE CASE AND BE QUASHED AND DELETE D. 8. THAT THE ADDITION OF RS. 4,46,086/- ON ACCOUNT OF U NEXPLAINED INVESTMENT U/S 69B AS DISCUSSED BY THE LEARNED DC I T IN PARA NO.18.11 OF THE ASSESSMENT ORDER BE HELD TO BE BAD AND UNJUSTIFIED ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND BE QUASHED AND DELETED. THAT IN THE ALTERNATIVE AND WITHOUT PREJUDICE TO TH E GROUNDS STATED ABOVE THE ADDITIONS MADE BE HELD TO BE HIGHLY UNREASONABL E AND EXCESSIVE AND BE REDUCED. 9. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY GROU ND OF APPEAL BEFORE OR DURING THE COURSE OF HEARING OF THE CASE. (B) DR. NEERAJ GUPTA IT(SS) NO.66/IND/2017 ASSESSMENT YEAR 2006-07 1. THAT THE ASSESSMENT MADE U/S 153A R.W.S. 143(3) OF THE INCOME-TAX ACT BE HELD TO BE BAD IN LAW AND ON FACTS AND BE QUASHED. 2. THAT THE ADDITION OF RS.13,OO,OOO/- MAINTAINED AND CONFIRMED BY CIT(A) MADE ON THE BASIS OF PAGE NO.122 OF LPS-3 FOUND FROM THE OFFICE PREMISES OF AYUSHMAN COLLEGE BE HELD TO BE BAD AND UNJUSTIFIED ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND BE QUASHED AND DELETE D. 3.THAT IN THE ALTERNATIVE AND WITHOUT PREJUDICE TO THE GROUNDS STATED ABOVE THE ADDITIONS MADE BE HELD TO BE HIGHLY UNREASONABLE AND EXCESSIVE AND BE REDUCED. 4.THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY GR OUND OF APPEAL BEFORE OR DURING THE COURSE OF HEARING OF THE CASE. IT(SS) NO.67/IND/2017 ASSESSMENT YEAR 2011-12 1. THAT THE ASSESSMENT MADE U/S 153A R.W.S.143(3) OF THE INCOME-TAX ACT BE HELD TO BE BAD IN LAW AND ON FACTS AND BE QUASHE D. 2. THAT THE ADDITION OF RS.90,00,000/- MADE ON THE BASIS OF PAGE NO.30 OF LPS-6 FOUND FROM THE OFFICE PREMISES OF AYUSHMAN CO LLEGE BE HELD TO BE BAD AND UNJUSTIFIED ON THE FACTS AND IN THE CIRCUMS TANCES OF THE CASE AND BE QUASHED AND DELETED. 3. THAT THE ADDITION OF RS.1 ,52,000/- MADE ON THE BASIS OF PAGE NO.61 OF ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 5 BS-1 FOUND FROM THE OFFICE PREMISES OF AYUSHMAN COL LEGE BE HELD TO BE BAD AND UNJUSTIFIED ON THE FACTS AND IN THE CIRCUMS TANCES OF THE CASE AND BE QUASHED AND DELETED. THAT IN THE ALTERNATIVE AND WITHOUT PREJUDICE TO TH E GROUNDS STATED ABOVE THE ADDITIONS MADE BE HELD TO BE HIGHLY UNREASONABL E AND EXCESSIVE AND BE REDUCED. 4. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY G ROUND OF APPEAL BEFORE OR DURING THE COURSE OF HEARING OF THE CASE. IT(SS) NO.162/IND/2017 ASSESSMENT YEAR 2012-13 1. THAT THE ASSESSMENT MADE U/S 153A R.W.S.143(3) OF THE INCOME-TAX ACT BE HELD TO BE BAD IN LAW AND ON FACTS AND BE QUASHE D. 2. THAT THE ADDITION OF RS.1,93,040/- MAINTAINED AN D CONFIRMED BY CIT(A) MADE AS PER PARA NO.9.5 OF THE ASSESSMENT ORDER BE HELD TO BE BAD AND UNJUSTIFIED ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND BE QUASHED AND DELETED. 3.THAT THE ADDITION OF RS.55,00,000/- MADE AS PER P ARA NO.15.15 OF . THE ASSESSMENT ORDER BE HELD TO BE BAD AND UNJUSTIFIED ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND BE QUASHED AND DELETE D. 4. THAT THE ADDITION OF RS.2,80,00,000/- MADE AS PE R PARA NO.15.16 OF THE ASSESSMENT ORDER BE HELD TO BE BAD AND UNJUSTIFIED ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND BE QUASHED AND DELETE D. 5. THAT THE ADDITION OF RS.15,00,000/- MADE AS PER PARA NO.1 0.6 OF THE ASSESSMENT ORDER BE HELD TO BE BAD AND UNJUSTIFIED ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND BE QUASHED AND DELETE D. 6. THAT THE ADDITION OF RS.39,500/- MADE AS PER PAR A NO.11.4 OF THE ASSESSMENT ORDER BE HELD TO BE BAD AND UNJUSTIFIED ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND BE QUASHED AND DELETE D. 7. THAT THE ADDITION OF RS.21, 16,800/- MADE AS PER PARA NO.12.9 OF THE ASSESSMENT ORDER BE HELD TO BE BAD AND UNJUSTIFIED ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND BE QUASHED AND DELETE D. THAT IN THE ALTERNATIVE AND WITHOUT PREJUDICE TO TH E GROUNDS STATED ABOVE THE ADDITIONS MADE BE HELD TO BE HIGHLY UNREASONABL E AND EXCESSIVE AND BE REDUCED. ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 6 8. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY G ROUND OF APPEAL BEFORE OR DURING THE COURSE OF HEARING OF THE CASE. 3. SINCE MOST OF THE ISSUES RAISED AND FACTS AND CIRC UMSTANCES RAISED ARE COMMON, THESE APPEALS WERE HEARD TOGETHE R AND ARE BEING DISPOSED OFF BY THIS COMMON ORDER FOR SAKE OF CONVENIENCE AND BREVITY. 4. FIRST WE WILL TAKE UP IT(SS) NO.64/IND/2017 RELATI NG TO THE ASSESSEE NAMELY SHRI ASHOK GUPTA FOR ASSESSMENT YEA R 2011-12 AND 2012-13. 5. BRIEF FACTS OF THE CASE AS CULLED OUT FROM THE REC ORDS ARE THAT 3 DOCTORS NAMELY DR. ASHOK GUPTA, DR. NEERAJ KUMAR GU PTA AND DR. GOPAL BATNI WERE RUNNING HOSPITAL IN THE NAME OF M/ S. AYUSHMAN MEDICAL DIAGNOSTIC PVT. LTD (HEREIN AFTER CALLED AY USHMAN). THIS HOSPITAL WAS SOLD TO BANSAL GROUP THROUGH ITS KEY P ERSON NAMELY SHRI SUNIL BANSAL. SEARCH U/S 132 OF THE ACT WAS CO NDUCTED AT THE BUSINESS AND RESIDENTIAL PREMISES OF BANSAL GROUP O N 02.06.2011. SINCE THE APPELLANT(S) WERE HAVING BUSINESS CONNECT ION WITH THE BANSAL GROUP THEY WERE ALSO SUBJECTED TO SEARCH. S EARCH ACTION WAS CARRIED OUT AT THE RESIDENTIAL PREMISES OF ALL THE 3 DOCTORS. DURING THE COURSE OF SEARCH VARIOUS DOCUMENTS AND L OOSE PAPERS ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 7 WERE SEIZED. STATEMENT OF THE ASSESSEE NAMELY DR. ASHOK GUPTA WERE ALSO RECORDED. IN THE STATEMENT INCOME WAS SU RRENDERED. SUBSEQUENTLY NOTICE U/S 153A OF THE ACT WERE SERVED UPON TO THE ASSESSEE FOR FILING OF RETURN OF INCOME. THE ASSES SEE HAD BEEN FILING REGULAR INCOME TAX RETURN IN THE PAST. NOTICES WER E ISSUED FOR ASSESSMENT YEAR 2006-07 TO ASSESSMENT YEAR 2012-13. THE INSTANT APPEALS RELATES TO ASSESSMENT YEARS 2011-12 AND 201 2-13. SINCE THE DUE DATE OF FILING OF RETURN OF INCOME FOR ASSE SSMENT YEAR 2011- 12 DID NOT EXPIRE AS THE DATE OF SEARCH WAS 02.06.2 011, ASSESSEE FILED THE INCOME TAX RETURN FOR ASSESSMENT YEARS 20 11-2 AND 2012- 13 ON 26.8.2013 DECLARING INCOME OF RS.11,58,557/- AND RS. 54,04,161/-. FOR ASSESSMENT YEAR 2012-13 ASSESSEE HAS ALSO OFFERED ADDITIONAL INCOME OF RS.13,07,502/-. DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS ASSESSEE WAS CONFRONTED WITH VARIOUS INCRIMINATING MATERIALS, STATEMENT RECORDED DURING THE COURSE OF SEARCH AND VARIOUS INFORMATION RECEIVED DURING SEAR CH PROCEEDINGS. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE A SSESSMENT WERE COMPLETED AFTER MAKING VARIOUS ADDITIONS THEREBY AS SESSING INCOME AT RS.56,83,590/- AND RS.4,61,35,960/- FOR ASSESSME NT YEAR 2011- 12 AND 2012-13 RESPECTIVELY. ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 8 6. AGGRIEVED WITH THESE ADDITIONS ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) BUT PARTLY SUCCEEDED. NOW THE ASS ESSEE IS IN APPEAL BEFORE THE TRIBUNAL RAISING VARIOUS GROUNDS OF APPEAL. 7. APROPOS TO GROUND NO.1 COMMONLY RAISED FOR ASSESSM ENT YEARS 2011-12 AND 2012-13 CHALLENGING THE ASSESSMEN T MADE U/S 153A R.W.S. 143(3) OF THE ACT BEING BAD IN LAW AND ON FACTS DESERVING TO BE QUASHED, LD. COUNSEL FOR THE ASSESS EE REQUESTED FOR NOT PRESSING THIS GROUND. SINCE COMMON GROUND NO.1 CHALLENGING THE VALIDITY OF ASSESSMENT PROCEEDINGS U/S 153A R.W .S. 143(3) OF THE ACT HAS NOT BEEN PRESSED, WE ACCORDINGLY DISMISS GR OUND NO.1 RAISED IN IT(SS) NO. 64/IND/2017 AND IT(SS) NO.161 /IND/2017. 8. NOW WE TAKE UP GROUND NO.2 FOR ASSESSMENT YEAR 201 1-12 (IT (SS) NO.64/IND/2017) RAISED BY THE ASSESSEE WHICH R EADS AS FOLLOWS:- THAT THE ADDITION OF RS.75.000/- ON ACCOUNT OF UNEX PLAINED FOREIGN EXPENDITURE U/S 69C AS DISCUSSED BY THE LEARNED DCI T IN PARA NO.11.4 OF THE ASSESSMENT ORDER BE HELD TO BE BAD AND UNJUSTIF IED ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND BE QUASHED AND DE LETED. 9. IN THE ABOVE GROUND ASSESSEE HAS CHALLENGED TH E FINDING OF LD. CIT(A) CONFIRMING THE ADDITION OF RS.75,000/- ON AC COUNT OF ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 9 UNEXPLAINED FOREIGN EXPENDITURE U/S 69C OF THE ACT. VARIOUS INCRIMINATING MATERIAL WERE FOUND DURING THE COURSE OF SEARCH SHOWING THAT THE ASSESSEE HAS CARRIED OUT FOREIGN T RAVELLING. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, LD. A. O MADE ADDITION FOR UNEXPLAINED EXPENDITURE AT RS. 75,000/- U/S 69C OF THE ACT FOR THE FOREIGN TRAVEL TO THAILAND FOR TWO PERSONS WHIC H TOOK PLACE ON 30.11.2010 TO 04.12.2010 OBSERVING AS FOLLOWS:- II. VIDE REPLY DATED 21.02.2014 ASSESSEE HAS STATED THA T THE ABOVE EXPENDITURE WAS NEITHER RECORDED IN HIS BOOKS OF AC COUNTS NOR IN THE BOOKS ACCOUNTS OF HIS FAMILY MEMBERS. III. THE ASSESSEE IS ALSO NOT HAVING ANY CONFIRMATI ON REGARDING THE CLAIM OF ASSESSEE THAT THE ABOVE FOREIGN TRIP WAS SPONSORED BY OTHER COMPANIES FOR ATTENDING MEDICAL CONFERENCES. IV. THE ASSESSEE HAS NOT OFFERED THE ABOVE EXPENDIT URE FOR TAXATION, DURING THE FILING OF RETURN U/S 139(1) OF THE IT AC T, NOR IN RESPONSE TO NOTICE U/S 153A. V. HOWEVER, THE ASSESSEE IN HIS SUBMISSION HAS ADMI TTED THESE AMOUNTS TO BE ADDED AS HIS UNDISCLOSED INCOME. 11.4 IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES O F THE CASE, IT IS ESTABLISHED THAT THE ASSESSEE HAS MADE ABOVE EXPEND ITURE OF RS.75,000/- IN AY. 2011-12 IN FOREIGN TOURS, WHICH WAS NOT RECORDED IN THE BOOKS OF ACCOUNTS. THEREFORE, THE AMOUNT OF RS. 75,000/- FOR A.Y. 2011-12 ARE HEREBY ADDED TO THE TOTAL INCOME OF ASS ESSEE ON ACCOUNT OF ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 10 UNEXPLAINED EXPENDITURE U/S 69C. 10. AGGRIEVED ASSESSEE PREFERRED APPEAL BEFORE LD. CIT (A) BUT FAILED TO SUCCEED AND THE ADDITION MADE BY THE LD. A.O WAS CONFIRMED AS LD. CIT(A) OBSERVED THAT NO OTHER DET AILS HAVE BEEN FILED BEFORE LD. A.O AND DURING THE APPELLATE PROCE EDINGS WHICH COULD PROVE THAT FOREIGN TRIPS WERE SPONSORED BY PH ARMACEUTICAL COMPANIES FOR ATTENDING MEDICAL CONFERENCES. 11. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 12. LD. COUNSEL FOR THE ASSESSEE REFERRED TO THE FOLL OWING WRITTEN SUBMISSIONS; GROUND NO. 2 : ADDITION ON ACCOUNT OF FOREIGN TOURS OF RS.75,OOO /- . THE LD. AO HAS MADE THE ADDITIONS ON THE BASIS OF THE E STIMATES IN PARA 11.3 PG.15 OF THE ASSESSMENT ORDER ON THE GROUND THAT TH IS IS AN UNEXPLAINED EXPENDITURE INCURRED BY THE ASSESSEE FOR THE VARIOU S FOREIGN TOURS UNDERTAKEN BY HIM. IT WAS SUBMITTED BEFORE THE LD. AO THAT THE ASSESSEE IS A DOCTOR AND RUNNING A REPUTED HOSPITAL. THE PHA RMACEUTICAL MANUFACTURING COMPANIES SPONSOR SUCH TOURS AS ADVER TISEMENTS AND THE EXPENDITURE HAS BEEN INCURRED BY THEM. HOWEVER, THE ASSESSEE COULD NOT FILE ANY CERTIFICATES OF THE SPONSORSHIP OF THE TOU RS AND AS SUCH THE ADDITIONS HAVE BEEN MADE. THE LD. AO WHILE ESTIMATI NG THE EXPENSES HAS TAKEN THE FIGURES OF 2014 ON THE BASIS OF THE PACKA GED TOURS ADVERTISEMENTS AND HAS TAKEN THE RATE OF THE DOLLAR AND POUND AS WAS EXISTED IN THE YEAR 2014. IT IS HUMBLY SUBMITTED TH AT IT IS A KNOWN FACT ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 11 THAT THE TOURS ARE NORMALLY SPONSORED BY THE PHARMA COMPANIES AND AS SUCH THE ADDITIONS ARE UNCALLED FOR AND DESERVE TO BE DELETED. 13. PER CONTRA DEPARTMENTAL REPRESENTATIVE VEHEMENTLY ARGUED SUPPORTING THE ORDERS OF BOTH THE LOWER AUTHORITIES . 14. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS LACED BEFORE US. THROUGH GROUND NO.2 FOR ASSESSMEN T YEAR2011- 12 ASSESSEE HAS CHALLENGED THE FINDING OF LD. CIT(A ) CONFIRMING THE ADDITION FOR UNEXPLAINED EXPENDITURE FOR FOREIGN TR AVEL AT RS.75,000/-. WE FIND THAT SIMILAR ADDITION WERE MA DE IN THE HANDS OF THE ASSESSEE FOR UNEXPLAINED FOREIGN EXPENDITURE FOR ASSESSMENT YEARS 2007-08 TO 2010-11 AND THAT ISSUE CAME BEFORE US FOR ADJUDICATION IN APPEAL VIDE IT(SS) NO.59 TO 63/IND/ 2017 AND IN THE ORDER DATED 24.10.2019 WE HAVE DECIDED THIS ISSUE O BSERVING AS FOLLOWS:- 15. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US. THE COMMON ISSUE RAISED FOR 2007-08, 20 08-09, 2009-10 AND 2010-11 RELATES TO ADDITION OF FOREIGN TOURS EXPEND ITURE OF FOLLOWING AMOUNTS; ASSESSMENT YEAR AMOUNT 2007-08 RS. 68,763/- 2008-09 RS.1,12,500/- 2009-10 RS.1,50,000/- 2010-11 RS. 72,737/- ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 12 16. THE ENQUIRY ABOUT THE FOREIGN TOUR EXPENSES WAS INITIATED AGAINST THE ASSESSEE DURING THE COURSE OF SEARCH AS FOREIGN CURRENCY IN US DOLLAR AND THAILAND CURRENCY WAS FOUND AT THE ASSESSEES P REMISES. THEREFORE THIS CONTENTION OF THE ASSESSEE THAT NO INCRIMINATI NG MATERIAL WAS FOUND RELATING TO THIS ADDITION IS UNCALLED FOR BECAUSE P OSSESSION OF FOREIGN CURRENCY ITSELF SHOWS THAT THE ASSESSEE OR HIS FAMI LY MEMBERS HAS UNDERTAKEN SOME FOREIGN TOURS AND THUS THE NATURE A ND ACCOUNT OF FOREIGN TOURS NEEDS TO BE EXPLAINED BY THE ASSESSEE IN CASE THE SAME IS NOT MENTIONED IN THE REGULAR RETURNS OF INCOME. THEREF ORE THE LEGAL GROUND OF THE ASSESSEE DOES NOT STAND AND WE PROCEED TO DEAL WITH THE MERITS OF THE CASE. 17. FROM GOING THROUGH THE ASSESSMENT ORDER WE OBSE RVE THAT ON PAGE- 15 OF THE IMPUGNED ASSESSMENT ORDER IT IS MENTIONED THAT VIDE REPLY DATED 21.2.2014 ASSESSEE STATED THAT THE ALLEGED FOREIGN EXPENDITURE WAS NEITHER RECORDED IN HIS BOOKS OF ACCOUNTS NOR IN TH E BOOKS OF ACCOUNTS AGAINST FAMILY MEMBERS. HE IS ALSO NOT HAVING ANY CONFIRMATION REGARDING THE CLAIM THAT THE FOREIGN TRIP WAS SPONSORED BY TH E COMPANIES. SUCH EXPENDITURE WAS ALSO NOT OFFERED FOR TAXATION IN TH E RETURN FILED U/S 139(1) OF THE ACT NOR IN RESPONSE TO NOTICE U/S 153A OF TH E ACT. HOWEVER THE ASSESSEE IN ITS SUBMISSION HAS ADMITTED THIS AMOUNT TO BE ADDED AS HIS UNDISCLOSED INCOME THEREFORE THE A.O MADE THE ADDIT ION. 18. WHEN THE MATTER WAS TAKEN UP WITH LD. CIT(A), I N ITS WRITTEN SUBMISSION THE ASSESSEE ONLY CLAIMED THE RELIEF OF THE FOLLOWING AMOUNTS; ASSESSMENT YEAR PACKAGE RATE ON 21.02.2014 TOTAL EXPENDITURE AT TIME OF VISIT RELIEF REQUESTED 2007-08 68763 66000 2763 2008-09 112500 84000 28500 2009-10 150000 112000 38000 ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 13 2010-11 72737 62400 10337 2011-12 75000 75000 NIL 19. THE ABOVE STATED RELIEF WAS REQUESTED BECAUSE T HE LD. A.O APPLIED THE RATES AS OF 21.02.2014 FOR ALL THE YEARS WITHOU T CONSIDERING THE FACT THAT THE RATES WERE LOWER IN THE PREVIOUS YEARS. L OOKING TO THESE SERIES OF FACTS THERE IS NO DISPUTE TO THE FACT THAT THE ASSE SSEE HAS VERY MUCH ACCEPTED TO OFFER UNACCOUNTED FOREIGN EXPENDITURE. HE HAS ALSO ACCEPTED THAT THE AMOUNT OF RS.66,000/-, RS.84,000/-, RS.1,1 2,000/- AND RS.62,400/- WAS INCURRED ON HIS FOREIGN TOUR WHICH IS NOT RECORDED IN THE BOOKS OF ACCOUNTS NOR OFFERED AS INCOME IN THE RETU RNS FILED. RELIEF HAS ONLY BEEN CLAIMED FOR THE PACKAGE RATES WRONGLY APPLIED BY THE LD. A.O FOR THE PRECEDING YEARS. WE FIND MERITS IN THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE LD. A.O OUGHT TO HAVE APPLIED LOWER PACKAGE RATES FOR THE PRECEDING YEARS AND SHOULD NOT HAVE UNIFORM LY APPLIED THE PACKAGE RATE AS ON 21.02.2014. THEREFORE THE ASSES SEE DESERVES THE RELIEF REQUESTED BY HIM BEFORE THE FIRST APPELLATE AUTHORI TY. WE ACCORDINGLY DELETE THE ADDITION OF RS.2763/-, RS.28,500/-, RS.3 8,000/- AND RS.10,337/- FOR ASSESSMENT YEARS 2007-08, 2008-09, 2009-10 AND 2010- 11. THUS THIS COMMON ISSUE IS PARTLY ALLOWED. IN THE RESULT THE ASSESSEES APPEAL FOR 2007-08, 2008-09 AND 2009-10 IS PARTLY A LLOWED. 15. AFTER PERUSING THE ABOVE FINDING WE FIND THAT FOR ASSESSMENT YEAR 2011-12 ASSESSEE HAS NOT REQUESTED FOR ANY REL IEF IN THE WRITTEN SUBMISSION FILED BEFORE LD. CIT(A). THE RE LIEF CLAIMED FOR OTHER YEARS WAS ONLY REGARD TO WRONG APPLICATION OF PACKAGE RATES FOR PRECEDING YEARS. SINCE FOR ASSESSMENT YEAR 201 1-12 NO RELIEF ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 14 HAS BEEN REQUESTED BY THE ASSESSEE HIMSELF AS THERE IS NO DIFFERENCE IN THE EXPENDITURE INCURRED AT THE TIME OF VISIT AN D THE PACKAGE RATES. WE THUS FIND NO MERIT IN GROUND NO.2 RAISED BY THE ASSESSEE AND THE SAME DESERVES TO BE DISMISSED. WE ACCORDING LY DISMISS GROUND NO.2 RAISED BY THE ASSESSEE IN IT(SS) NO.64/ IND/2017 RELATING TO ASSESSMENT YEAR 2011-12. 16. NOW WE WILL TAKE GROUND NO.4 OF IT(SS) NO.64/IND/ 2017 FOR ASSESSMENT YEAR 2011-12 WHICH READS AS FOLLOWS; THAT THE ADDITION OF RS.4,50,OOO/- ON ACCOUNT OF UN DISCLOSED CASH INVESTMENT U/S 69B AS DISCUSSED BY THE LEARNED DCIT IN PARA NO.14.4 OF THE ASSESSMENT ORDER BE HELD TO BE BAD AND UNJUSTIF IED ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND BE QUASHED AND DE LETED. 17. BRIEF FACTS RELATING TO THIS GROUND ARE THAT DURI NG THE COURSE OF SEARCH CARRIED OUT AT THE RESIDENTIAL PREMISES O F THE ASSESSEE LOOSE PAPER NO.1 AND 1A AS PER ANNEXURE A-I/5 WERE FOUND AND SEIZED. THESE TWO LOOSE PAPERS WERE SIGNED CHEQUES OF STANDARD CHARTERED BANK OF RS. 2,00,000/- AND RS. 2,50,000/- ISSUED BY M/S UNIVERSAL AGRO FARM IN WHICH NAME OF THE RECIPI ENT IS NOT WRITTEN. THE ASSESSEE WAS ASKED TO EXPLAIN AND RECO NCILE THE TRANSACTION WITH REGULAR BOOKS OF ACCOUNTS AND WHY SHOULD NOT RS. ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 15 4,50,000/- BE TREATED AS UNDISCLOSED INCOME. THE A SSESSEE VIDE REPLY DATED 21.12.2014 STATED THAT THE DOCUMENTS ME NTIONED IN THE QUESTIONNAIRE (LPS-3, A-1/5 PAGE NO.I & LA) ARE TWO CHEQUES (CH.NO. 862874 FOR RS.2, 00,000/- AND CH . NO. 862875 FOR RS.2,50,000/-). BOTH THE CHEQUES ARE SIGNED BY SHAR DCNDU KUMAR MISHRA PROP. M/S UNIVERSAL AGRO FARM AND ARE DRAWN ON STANDARD CHARTERED BANK. M. P. NAGAR. BHOPAL. BOTH THESE CHEQUES DO NOT BEAR ANY DATE NOR THE NAME OF THE PERSON IN WHOSE F AVOUR THE CHEQUES HAVE BEEN DRAWN. REGARDING THE CHEQUES HAVI NG BEEN FOUND AT THE RESIDENCE OF THE ASSESSEE, IT IS SUBMI TTED THAT ASSESSEE'S WIFE SMT. ALKA GUPTA HAD PURCHASED A PLO T SITUATED AT GRAM BORDA, KOLAR ROAD, BHOPAL VIDE REGISTERED DEED DATED 07-06- 2010 FROM SHARDENDU KUMAR MISHRA. THE MUTATION OF T HIS PLOT IN FAVOUR OF SMT. ALKA GUPTA WAS DUE TO BE DONE. THE A FORESAID CHEQUES WERE OBTAINED AS SECURITY TILL THE COMPLETI ON OF LEGAL FORMALITIES OF MUTATION. AFTER THE COMPLETION OF MU TATION IN FAVOUR OF SMT. ALKA GUPTA THE CHEQUES WERE TO BE RETURNED TO SHRI SHARDENDU KUMAR MISHRA. ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 16 18. LD. A.O WAS NOT CONVINCED WITH THE SUBMISSIONS AND HE MADE THE ADDITION U/S 69B OF THE ACT FOR UNEXPLAINED CAS H INVESTMENT OF RS. 4,50,000/-OBSERVING AS FOLLOWS:- 14.3 THE SUBMISSION OF THE ASSESSEE HAS BEEN CONSI DERED AND EXAMINED BUT THE SAME IS NOT ACCEPTABLE :- I. THE ASSESSEE HAS NOT SUBMITTED ANY MATERIAL EVI DENCE TO SUBSTANTIATE HIS CLAIM. II. THE ABOVE LOOSE PAPERS SHOWS THAT THE ASSESSEE HAS MADE CASH LOAN TO M/5 UNIVERSAL AGRO FARM AND TAKEN CHEQUE OF RS. 4,50,000/- FORM M/S UNIVERSAL AGRO FARM AS SECURITY. THE ABOVE CHEQUES RELEVANT FOR F. Y.20 1 0-11 RELEVANT FOR A. Y 2011-12. III. THE ABOVE CHEQUES HAVE BEEN RECEIVED BY THE AS SESSEE AGAINST THE CASH LOAN, WHICH WAS NOT RECORDED IN THE BOOKS OF ACCOUNTS. IV. THIS CHEQUES HAS BEEN FOUND AND SEIZED FROM TH E RESIDENCE OF THE ASSESSEE. THEREFORE, IN VIEW OF PROVISIONS OF SECTI ON 132(4A) OF THE INCOME TAX ACT, 1961, IT IS PRESUMED THAT THE TRANS ACTIONS RECORDED IN THIS LOOSE PAPER PERTAIN TO THE ASSESS EE AND THE CONTENT OF THESE TRANSACTIONS IS TRUE. 19. AGGRIEVED ASSESSEE PREFERRED APPEAL BEFORE LD. CIT (A) BUT COULD NOT SUCCEED SINCE THE ADDITION MADE BY THE LD . A.O WAS CONFIRMED BY LD. CIT(A) OBSERVING AS FOLLOWS:- ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 17 I HAVE PERUSED THE SUBMISSIONS OF THE LEARNED AR, T HE VARIOUS DECISION CITED, AND THE ASSESSMENT ORDER. THE CLA IM OF THE ASSESSEE CANNOT BE ACCEPTED BECAUSE NO MATERIAL EVIDENCE TO SUBSTANTIATE IT HAS BEEN FILED EITHER BEFORE THE A.O OR AT THE APPELLA TE STAGE. THE TWO CHEQUES OF RS. 2,00,000/- AND RS. 2,50,000/- SIGNED BY SHR I SHARDENDU KUMAR MISHRA (PROP M/S UNIVERSAL AGRO FARMS) AND DRAWN O N STANDARD CHARTERED BANK, MP NAGAR, BHOPAL. BOTH THE CHEQUE S DO NOT BEAR ANY DATE OR NAME OF THE PERSON IN WHOSE FAVOUR THE CHE QUES HAVE BEEN DRAWN. THE APPELLANT STATED THAT HIS WIFE SMT ALKA GUPTA HAD PURCHAWED A PLOT SITUATED AT GRAM BORDA, KOLAR ROAD, BHOPAL FROM SH RI SHARDENDU MISHRA ON 07.06.2010 AND AS THE MUTATION OF THIS PLOT WAS NOT DONE, THESE CHEQUES WERE KEPT AS A SECURITY TILL THE LEGAL FOR MALITIES WERE COMPLETED. THE PLEA OF THE APPELLANT CANNOT BE ACCEPTED BECAU SE EVEN IF THE CHEQUES WERE KEPT AS SECURITY AT LEAST THE NAME OF THE PUR CHASER I.E. SMT. ALKA GUPTA, WIFE OF THE APPELLANT SHOULD HAVE BEEN MENT IONED WHICH WAS NOT DONE N THIS CASE. THE FINDING OF THE A.O THAT THE SUM OF RS. 4,50,00 0/- IS A CASH LOAN MADE TO M/S UNIVERSAL AGRO WHICH IS NOT RECORDED IN THE BOOKS OF ACCOUNTS IS IN ORDER AND CALLS FOR NO INTERFERENCE. 20. AGGRIEVED ASSESSEE IS NOW IN APPEAL BEFORE THE TR IBUNAL. 21. LD. COUNSEL FOR THE ASSESSEE REFERRED TO FOLLOWING WRITTEN SUBMISSIONS:- GROUND NO. 4 (PAGE 19 AND 20 OF PB A-3): ADDITION OF RS.4,50,000/- ON ACCOUNT OF ALLEGED CASH INVESTMENTS - THE LD. AO HA S MADE THE ADDITION AT PAGE 19, PARA 14 ON ACCOUNT OF THE LOOSE PAPER A-1/5 PAGE 1 AND LA. THESE TWO PAPERS ARE THE BLANK CHEQUES SIGNED BY UN IVERSAL AGRO FARM DRAWN ON STANDARD CHARTERED BANK FOR RS.2,00,000/- AND RS.2,50,000/-. IT ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 18 IS HUMBLY SUBMITTED THAT THE ASSESSEE'S WIFE AND TH E ASSESSEE'S FATHER- IN-LAW HAD PURCHASED TWO PLOTS FROM UNIVERSAL AGRO FARM PROP. SHRI SHARDENDU KUMAR MISHRA VIDE REGISTERED DEEDS DATED 7.6.2010. THE MUTATION WAS TO BE DONE ON THE PLOTS AND AS SUCH AS A SECURITY THESE TWO BLANK CHEQUES WERE TAKEN FROM HIM. NO ADVANCE W AS GIVEN TO HIM. ON THE CONTRARY, THE PLOTS WERE PURCHASED BY MAKING THE PAYMENTS BY CHEQUES. THE COPY OF THE REGISTRIES CLEARLY INDICAT ES THIS FACT. THE ASSUMPTION OF THE LD. AO THAT THE CASH LOAN WAS GIV EN TO HIM AGAINST WHICH THE CHEQUES ARE RECEIVED IS TOTALLY BASED ON SUSPICION AND SURMISES. IT IS THEREFORE PRAYED THAT THE ADDITIONS MAY PLEASE BE DELETED. 22. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE VEHEMEN TLY ARGUED SUPPORTING THE ORDERS OF BOTH THE LOWER AUTH ORITIES. 23. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RE CORDS PLACED BEFORE US AND GONE THROUGH THE WRITTEN SUBMI SSION MADE BY THE ASSESSEE. THE ISSUE RELATES TO UNEXPLAINED INV ESTMENT U/S 69B OF RS. 4,50,000/-. TWO CHEQUES BEARING NO. 862874 AND 862875 ISSUED BY SHRI SHARDENDU KUMAR MISHRA, PROP. M/S UN IVERSAL AGRO FARM DRAWN ON STANDARD CHARTERED BANK, BHOPAL FOR R S. 2,00,000/- AND RS. 2,50,000/- RESPECTIVELY WERE ISS UED IN WHICH THE NAME OF RECIPIENT WAS NOT MENTIONED. THE ALLEG ATION OF THE REVENUE AUTHORITIES IS THAT THE ASSESSEE MAY HAVE G IVEN CASH LOAN ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 19 TO MS/ UNIVERSAL AGRO FARM AND HAS KEPT THE BLANK S IGNED CHEQUES AS SECURITY. HOWEVER THERE IS NO OTHER MATERIAL EV IDENCE ON RECORD WHICH COULD PROVE THAT CASH LOAN WAS GIVEN TO SHRI SHARDENDU KUMAR MISHRA. ON THE OTHER HAND THE SUBMISSIONS MA DE BY THE ASSESSEE HAS MORE STRENGTH SINCE IT IS SUPPORTED BY DOCUMENTARY EVIDENCE. TWO PLOTS WERE PURCHASED BY THE ASSESSEE S WIFE AND HIS FATHER IN LAW BY REGISTERED DEED DATED 13.6.2010. THE MUTATION WAS PENDING FOR THESE TWO PLOTS AND THE TWO CHEQUES WERE KEPT AS SECURITY FROM UNIVERSAL AGRO FARM. APPARENTLY REVEN UE AUTHORITIES HAVE FAILED TO PROVE ANY LIVE CONNECTION BETWEEN TH E ASSESSEE AND UNIVERSAL AGRO FARM RELATING TO THE TWO CHEQUES FOU ND DURING THE COURSE OF SEARCH. WHEREAS THE DOCUMENTARY EVIDENCE FILED BY THE ASSESSEE CLARIFIES THE TRANSACTIONS. NO OTHER EFFO RTS WERE MADE BY THE REVENUE AUTHORITIES TO CONFRONT SHRI SHARDENDU KUMAR MISHRA. 24. IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND NO JUSTIFICATION IN THE ACTION OF THE LD. A.O MAKING T HE ADDITION OF UNEXPLAINED CASH INVESTMENT OF RS.4,50,000/- SINCE THE ADDITION MADE BY THE LD. A.O SEEMS TO BE MADE MERELY ON THE SUSPICION AND SURMISES. WE ACCORDINGLY SET ASIDE THE FINDING OF LD. CIT(A) AND ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 20 DELETE THE ADDITION OF RS.4,50,000/- MADE U/S 69B O F THE ACT AND ALLOW GROUND NO.4 OF THE ASSESSEES APPEAL IT(SS) N O. 64/IND/2017 FOR ASSESSMENT YEAR 2011-12. 25. AS FAR AS GROUND NO.3 RELATING TO ADDITION OF RS.4 0,00,000/- ON ACCOUNT OF VOLUNTARY DISCLOSURE U/S 132(4) OF TH E ACT FOR THE ALLEGED CASH RECEIPT FROM BANSAL GROUP FOR SALE OF SHARES OF AYUSHMAN MEDICAL DIAGNOSTIC PVT. LTD THE SAME CAN B E DEALT ALONG WITH GROUND NO.4 & 5 RAISED BY THE SAME ASSESSEE IN ASSESSMENT YEAR 2012-13 WHEREIN THE ADDITION HAS ALSO BEEN MAD E FOR THE COMMON ISSUE. 26. GROUND NO. 5 & 6 OF THE APPEAL FOR ASSESSMENT YEAR 2011-12 ARE GENERAL IN NATURE WHICH NEEDS NO ADJUDICATION. 27. NOW WE TAKE UP GROUND NO.2 OF IT(SS) NO.161/IND/20 17 FOR ASSESSMENT YEAR 2012-13 IN THE CASE OF DR. ASHOK GU PTA AND THE SAME READS AS FOLLOWS:- 2.THAT THE ADDITION OF RS.16,26,897/- MAINTAINED AN D CONFIRMED BY CIT(A) ON ACCOUNT OF CASH AND FOREIGN CURRENCY FOUND U/S 6 9 AS DISCUSSED BY THE LEARNED DCIT IN PARA NO.10.5 OF THE ASSESSMENT ORDE R BE HELD TO BE BAD AND UNJUSTIFIED ON THE FACTS AND IN THE CIRCUMSTANC ES OF THE CASE AND BE QUASHED AND DELETED. ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 21 28. BRIEF FACTS RELATING TO THIS GROUND IS THAT DURING THE SEARCH AND SEIZURE ACTION AT VARIOUS PREMISES OF LOCKERS O WNED BY THE ASSESSEE FOLLOWING CASH AND FOREIGN CURRENCY WAS SE IZED:- S. NO. PLACE FOUND (IN RS.) SEIZED (IN RS.) 1 H.NO.B - 253, SHAHPURA, BHOPAL 2,65,030/ - 2,01,000/ - 2 5000 USD AND THAI CURRENCY 2,62,000/ - - 3 LOCKER NO.2/23 STATE BANK OF INDIA, PB BRANCH AREA COLONY, BHOPAL IN THE NAME OF ASSESSEE 2,00,000/ - 2,00,000/ - 4 LOCKER NO.10 KARNATAKA BANK, M.P NAGAR, BHOPAL IN THE NAME OF ASSESSEE 9,00,000/ - 9,00,000/ - TOTAL 16,27,030/ - 13,01,000/ - 29. WHEN THE ASSESSEE WAS DIRECTED TO EXPLAIN THE SOUR CE OF CASH AND FOREIGN CURRENCY, THE ASSESSEE VIDE ITS REPLY DATED 02.01.2014 STATED THAT; A. DURING THE COURSE OF SEARCH THE CASH OF RS..2,65 ,030/- FOUND AT THE RESIDENCE OF THE ASSESSEE AT B-253, SHAHPURA, BHOPA L CAN BE UNDERSTOOD WITH REFERENCE TO THE CASH PROFESSIONAL RECEIPTS AN D THE COSH RECEIVED FROM BANSAL GROUP BEFORE THE DATE OF SEARCH. THE C ASH FLOW CHART FOR ALL THE RELEVANT YEARS ARE ENCLOSED AND THE CASH FLOW MAY B E VERIFIED FROM THE SAID STATEMENTS. THE ASSESSEE IS NOT MAINTAINI NG ANY PERSONAL BOOKS SUCH AS CASH-BOOK AND LEDGER. THE 5000 US DO LLARS FOUND AT THE RESIDENCE OF THE ASSESSEE BELONGED TO HIS FRIEND DR . AKHIL KUMAR S/O SHRI J.K TIWARI. THIS WAS EXPLAINED BY THE ASSESSE E IN HIS STATEMENT RECORDED DURING THE COURSE OF SEARCH. THE STATEMENT OF. DR: AKHIL KUMAR WAS ALSO RECORDED BY THE AUTHORISED OFFICER WAS ON 04-07--2011. COPY OF THIS STATEMENT IS WITH YOU. 1N HIS STATEMENT DR. AKHIL KUMAR HAS ADMITTED AND HAS EXPLAINED THE CIRCUMSTANCES UNDE R WHICH THE AFORESAID DOLLARS WERE KEPT AT THE RESIDENCE OF THE ASSESSEE. DR. AKHIL K'UMAR HAS ALSO EXPLAINED HIS SOURCES OF INCOME AND THE FACT THAT HE IS ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 22 EMPLOYED IN SAUDI ARABIA. HE HAS ALSO REFERRED TO A I-RAJ HI BANK OF SAUDI ARABIA FROM WHICH HE HAD WITHDRAWN THE DOLLAR S. COPY OF BANK A/C OF DR. AKHIL KUMAR IS ENCLOSED. YOU MAY KINDL Y APPRECIATE THE FACT THAT AT THE TIME OF SEARCH ON 02-06-2011 THE ASSESSEE WAS AWAY IN USA. IF THE DOLLARS 'WOULD HAVE BELONGED TO THE ASSESSEE HE WOULD HAVE TAKEN THE SAME ALONG WITH HIM TO USA. B. THE CASH RS.2 LACS FOUND AND SEIZED FROM LOCKER NO.S-2/23 AT STATE BANK 0F INDIA, ARERA COLONY, BHOPAL BELONGS TO THE ASSESSEE AND WAS RECEIVED BY HIM FROM THE BANSAL GROUP. THE CASH-FLO W STATEMENT FOR F.Y. 2011-12 COVERS THIS CASH FOUND AND SEIZED. C. THE CASH RS.9 LACS FOUND AND SEIZED FROM LOCKER NO. 143 AT KOTAK MAHINDRA BANK MP. NAGAR, BHOPAL BELONGS TO THE ASSESSEE AND WAS RECEIVED BY HIM FROM THE BANSAL GROUP. THE CASH FLO W STATEMENT FOR F.Y 2011-12 COVERS THIS CASH FOUND AND SEIZED. 30. THE EXPLANATION FURNISHED BY THE ASSESSEE WAS NOT FOUND ACCEPTABLE TO THE LD. A.O AND THE ADDITION OF RS.16 ,27,030/- WAS MADE U/S 69A OF THE ACT FOR UNEXPLAINED CASH AND FO REIGN CURRENCY OBSERVING AS FOLLOWS:- 10.3 THE EXPLANATION FURNISHED BY THE ASSESSEE HAS BEEN CONSIDERED. THE EXPLANATION OF THE ASSESSEE IS NOT ACCEPTABLE B ECAUSE AT THE TIME OF SEARCH THE ASSESSEE HAS NOT RECONCILED THE CASH AND FOREIGN CURRENCY FOUND WITH THE BOOKS OF ACCOUNTS. THE EXPLANATION N OW GIVEN STATING THAT THE CASH OF RS. 16,27,030/- IS TALLIED WITH THE BOOKS IS SELF SERVING AFTER THOUGHT BECAUSE IF THERE WOULD HAVE BEEN CASH BALANCE IN THE' CASH BOOK AS ON DATE OF SEARCH, THE ASSESSEE COULD HAVE EXPLAINED THE SAME AT THAT TIME ONLY. THE ARGUMENT OF THE ASSESSE E IS THEREFORE NOT ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 23 SUBSTANTIATED WITH SUPPORTING DOCUMENTS SATISFACTORILY. 10.4 IN SECTIONS 69A OF THE INCOME-TAX ACT, 1961, WHAT I S PROVIDED IS THAT IF AN ASSESSEE IS FOUND TO BE THE OWNER OF ANY MONEY, JEW ELLERY OR ANY OTHER VALUABLE ARTICLES NOT RECORDED IN THE BOO KS OF ACCOUNT AND FAILS TO OFFER ANY EXPLANATION ABOUT THE 'NATURE AND SOUR CE THEREOF OR IN CASE ANY SUCH EXPLANATION, IF OFFERED, IS NOT SATISFACTO RY IN THE OPINION OF THE ASSESSING OFFICER, THEN THIS MAY BE DEEMED TO BE TH E INCOME OF THE ASSESSEE FOR SUCH FINANCIAL YEAR. ULTIMATELY; THERE FORE, IT WOULD BE DEPENDENT ON THE NATURE OF THE EXPLANATION SUBMITTE D BY THE ASSESSEE AND THE SATISFACTION OF THE ASSESSING OFFICER ABOUT THE ACCEPTABILITY THEREOF, WHICH IS THE SINE QUA NON FOR INVOKING THE PROVISIONS CONTAINED IN SECTIONS 69A OF THE ACT. IT IS IN THIS CONTEXT T HAT THE SATISFACTION OF THE ASSESSING OFFICER ABOUT THE CORRECTNESS AND COMPLET ENESS OF THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE IN ACCORDANCE WI TH THE PROVISIONS CONTAINED IN SECTION 145 OF THE ACT EO-RELATES WITH THE SATISFACTION OF THE ASSESSING OFFICER ARRIVED AT UNDER SECTIONS 69A OF THE ACT. CONSIDERING THE FACTS OF THE CASE, THE CORRECTNESS AND COMPLETE NESS OF THE CASH FLOW STATEMENT SUBMITTED BY THE ASSESSEE IS HELD TO BE N ON-SATISFACTORY AND THEREFORE THE EXPLANATION OF THE ASSESSEE IS LIABLE TO BE REJECTED. IN THIS CONNECTION RELIANCE IS PLACED ON THE DECISION OF TH E RAJASTHAN HIGH COURT IN THE CASE OF RAJENDRA PRASAD SUBHASH CHAND V. UNION OF INDIA (344 ITR 533), WHEREIN THE CASH FOUND DURING A SURVEY VAS HELD TO BE UNEXPLAINED MONEY U/S 69A OF THE ACT. SIMILARLY THE KERALA HIGH COURT IN THE CASE OF CIT VS B RAJASHEKHARAN !LAIR (329 ITR 123) WHEREIN THE HON'BLE COURT REJECTED THE EXPLANATION ON THE SOURC E OF CASH AND THEREFORE HELD IT TO BE UNEXPLAINED MONEY U/S 69A OF THE ACT. 31. AGGRIEVED ASSESSEE PREFERRED APPEAL BEFORE LD. CIT (A) AND PARTLY SUCCEEDED GETTING RELIEF OF RS.133/- AND THE REMAINING ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 24 ADDITION OF RS.16,26,897/- WAS CONFIRMED OBSERVING AS FOLLOWS:- I HAVE PERUSED THE SUBMISSIONS OF THE LEARNED AR, AND THE ASSESSMENT ORDER. THE APPELLANT ASSESSEE HAS NOT BEEN ABLE TO EXPLAIN SOURCE OF CASH AND F OREIGN CURRENCY FOUND DURING THE SEARCH. THE CASH OF RS. 16,27,030/- COULD NOT BE TALLIED WITH THE BOOKS. THE CASH AMOUNTING TO RS 2,00,000/- AND RS 9,00,000/- HAS BEEN FOUND FROM THE TWO LOCKERS. CASH KEPT IN LOCKER POINTS TO THE FACT THAT IT IS UNACCOUNTED AND NOT RECORDED IN THE BOOKS. FOR SAFE TY REASONS THE CASH CAN BE DEPOSITED IN BANK ACCOUNT FROM WHERE IT CAN BE UTILIZED AS AND WHEN NEEDED. THE PLEA TAKEN BY THE ASSESSEE THAT CA SH OF RS. 2,00,000/- & RS 9,OO,OOO/- FOR F Y 2011-12 WAS RECEIVED FROM BANSAL GROUP BUT HAS NOT BEEN RECORDED IN THE BOOKS OF ACCOUNT AS IT WAS KEPT IN THE LOCKERS AND COULD NOT BE RECONCILE WITH THE BOOKS OF ACCOUNT. I N VIEW OF THE ABOVE THE A.O HAS RIGHTLY HELD THAT THE CASH AND FOREIGN CURR ENCY HAS NOT BEEN SATISFACTORILY EXPLAINED. BESIDES, THE APPELLANT AS SESSEE HAS NOT BEEN ABLE TO GIVE THE REASONS FOR RECEIVING SUCH HUGE AM OUNTS IN CASH AND KEEPING THE SAME IN LOCKER WHERE IT IS NOT READILY AVAILABLE FOR USE. 10.2 REGARDING THE FOREIGN CURRENCY FOUND DURING THE SEA RCH THE PLEA TAKEN BY THE APPELLANT THAT US$ 5000 BELONGS TO HIS FRIEND DR. AKHIL KUMAR S/O SHRI J.K TIWARI IS NOT REASONABLE. THE APPELLANT HA S NOT BEEN ABLE TO EXPLAIN THE REASON FOR KEEPING US$ 5000 AT HOME AS PER RBI GUIDELINES FOREIGN EXCHANGE SHOULD HAVE BEEN DEPOSI TED IN THE BANK ACCOUNT OR CONVERTED INTO INDIAN CURRENCY. IN VIEW OF THE ABOVE THE ADDITION AMOUNTING TO US$ 5000 IS CONFIRMED. REGARDING 90 BHAT AMOUNTING TO RS 133/- BEING A VERY SMALL AMOUNT THE ADDITION ON THIS ACCOUNT IS DELETED. THEREFORE, THE CASH FOUND IN LOCKERS AND THE BALANC E FOREIGN CURRENCY OF ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 25 US-$ 5000 FOUND DURING THE COURSE OF SEARCH TOTALLI NG TO RS. 16,26,897/- IS UNEXPLAINED CASH AND FOREIGN CURRENCY AND THE ADDIT ION OF RS. 16,26,897/- MADE BY THE A.O U/S 69A FOR A.Y 2012-13 IS CONFIRMED. 32. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 33. LD. COUNSEL FOR THE ASSESSEE REFERRED TO THE FOLLO WING WRITTEN SUBMISSIONS:- GROUND NO. 2 : ADDITION OF RS.16,26,897/- BEING CASH FOUND AND THE FOREIGN CURRENCY FOUND - THE LD. AO HAS MADE THE A DDITION AT PAGE 12, PARA 10. THE CASH WAS FOUND AT RS.13,65,030/-- FROM THE RESIDENCE AND BANK LOCKER ALONG WITH THE FOREIGN CURRENCY IN USD OF RS.2,62,000/-. IT WAS EXPLAINED TO THE LD. AO THAT THE ASSESSEE HAS RECEIVED RS.2.15 CRORE IN APRIL AND MAY 2011. FROM THE SAID AMOUNT THE CASH IN HAND WAS KEPT AND WAS AVAILABLE. REGARDING FOREIGN CURRE NCY, IT WAS SUBMITTED THAT IT BELONGED TO THE FRIEND OF THE ASSESSEE DR. AKHIL KUMAR FROM SAUDI ARABIA WHO HAD COME TO BHOPAL FOR THE MARRIAGE OF H IS DAUGHTER TO BE PERFORMED ON 24/6/2011. DR. AKHIL KUMAR WAS STAYING WITH THE ASSESSEE AND WAS PRESENT DURING THE COURSE OF THE SEARCH. AT THE TIME OF THE SEARCH, THE ASSESSEE HAD GONE TO THE USA FOR A SMAL L COURSE ON ARTHRITIS. THE AMOUNT BROUGHT BY DR. AKHIL KUMAR WAS FOUND AT THE RESIDENCE OF THE ASSESSEE. HIS STATEMENT WAS RECORDED AND HE CL EARLY ASSERTED THAT HE HAD BROUGHT THIS AMOUNT FROM SAUDI. THE COPY OF THE CERTIFICATE FROM THE BANK WAS ALSO FILED. THE SON-IN-LAW IS SETTLED IN USA AND THE AMOUNT ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 26 OF $5000 WAS KEPT TO BE PAID TO THE DAUGHTER FOR TA KING THE SAME TO USA. THE THAILAND BAHT WERE WORTH RS.133/- AND WERE KEPT AS A SOUVENIR. 34. LD. COUNSEL FOR THE ASSESSEE ALSO SUBMITTED THAT T HE LD.AO DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE AND HAS MADE THE ADDITION AND EVEN DID NOT MENTION IN THE ORDER THAT THE STATEMENT OF DR. AKHIL KUMAR WAS TAKEN IN WHICH HE HAS CLEARL Y GIVEN ALL THE FACTS (PAGE 44 TO 49 OF PB A-4). THE ADDITIONS MADE ARE UNWARRANTED FOR AND HENCE DESERVE TO BE DELETED. 35. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE VEHEMEN TLY ARGUED SUPPORTED THE ORDERS OF BOTH THE LOWER AUTHO RITIES. 36. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE R ECORDS PLACED BEFORE US AND GONE THROUGH THE SUBMISSION MA DE BY THE ASSESSEE. 37. THROUGH THIS GROUND NO.2 ASSESSEE HAS CHALLENGED T HE FINDING OF LD. CIT(A) CONFIRMING THE ADDITION FOR UNEXPLAIN ED CASH AND FOREIGN CURRENCY AT RS.16,26,897/-. THIS ADDITION MADE U/S 69A CONSTITUTES TWO AMOUNTS ONE IS CASH SEIZED BY THE I NCOME TAX DEPARTMENT AT RS. 13,65,030/- AND THE REMAINING AMO UNT IS THE INDIAN VALUE OF US $ 5000 FOUND AT THE RESIDENTIAL PREMISES OF THE ASSESSEE. AS REGARDS THE EXPLANATION GIVEN BY THE ASSESSEE FOR THE ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 27 SOURCE OF US $ 5000 IT HAS BEEN CLAIMED THAT THIS F OREIGN CURRENCY BELONGS TO THE ASSESSEES FRIEND DR. AKHIL KUMAR WH O WAS IN SAUDI ARABIA. DR. AKHIL KUMAR CAME TO BHOPAL FOR PERFORMI NG THE MARRIAGE OF HIS DAUGHTER SCHEDULED ON 24.06.2011. IN THE STATEMENT RECORDED BY THE INCOME TAX AUTHORITIES OF DR. AKHIL KUMAR PLACED AT PAGE 44 TO 48 OF PAPER BOOK, DR. AK HIL KUMAR CLEARLY STATED THAT US $ 5000 BELONGS TO HIM. HE H AD WITHDRAWN US $ 10000 ON 29.01.2011 FROM BANK AT SAUDI ARABIA FOR DAUGHTERS MARRIAGE. US $ 5000 WAS SPENT FOR DUTY FR EE SHOPPING AND REMAINING US $ 5000 WAS PLANED TO SPENT IN WEDD ING. THIS STATEMENT OF DR. AKHIL KUMAR IS SELF SERVING AND EX PLAINED THE TRANSACTION AS WELL AS SOURCE OF US $ 5000. REVENU E AUTHORITIES FAILED TO TAKE NOTE OF THIS STATEMENT IN THE FINDIN G GIVEN IN THEIR ORDERS. ALONG WITH THIS STATEMENT GIVEN BEFORE INC OME TAX AUTHORITIES BANK CERTIFICATE HAS ALSO BEEN FILED PL ACED AT PAGE 50 OF THE PAPER BOOK PAPER BOOK A-4 SHOWING CASH WITHDRAW AL OF US $ 10000 FROM AL-RAJ HI BANK. WE ARE THUS SATISFIED W ITH THE DOCUMENTARY EVIDENCE AND FACTS BEFORE US AND IN OUR CONSIDERED VIEW BOTH THE LOWER AUTHORITIES ERRED IN MAKING ADD ITION FOR ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 28 UNEXPLAINED FOREIGN CURRENCY OF US $ 5000 AND THE SAME DESERVES TO BE DELETED. 38. AS REGARDS REMAINING CASH OF RS.13,65,030/- WHICH WAS FOUND IN THE HOUSE AND LOCKER, LD. COUNSEL FOR THE ASSES SEE HAS REFERRED TO THE CASH FLOW STATEMENT PLACED AT PAGE 22 OF THE PAPER BOOK. IT IS NOTEWORTHY THAT THE ASSESSEE ACCEPTED TO HAVE RECEI VED CASH OF RS. 2,15,00,000/- FROM BANSAL GROUP AS ADVANCE FOR SALE OF EQUITY SHARES HELD IN AYUSHMAN MEDICAL DIAGNOSTIC PVT. LTD . THIS CASH AMOUNT OF RS. 2,15,00,000/- WAS RECEIVED DURING APR IL AND MAY, 2011 I.E. JUST BEFORE A MONTH OF DATE OF SEARCH. IN THE CASH FLOW STATEMENT THE ASSESSEE HAS SHOWN THE CASH RECEIVED FROM PROFESSIONAL RECEIPTS, CASH WITHDRAWN FROM BANK AND CASH RECEIVED FROM BANSAL GROUP AND AGAINST THE CASH AVAILABLE VA RIOUS EXPENDITURE HAVE BEEN INCURRED INCLUDING DEPOSIT OF CASH IN THE BANK AND CASH SEIZED BY INCOME TAX DEPARTMENT AT RS . 13,65,030/-. SINCE THE CASH AMOUNT OF RS. 2,15,00, 000/- HAS BEEN ACCEPTED TO HAVE BEEN RECEIVED BY THE ASSESSEE CASH FOUND AT THE RESIDENTIAL PREMISES AND LOCKER OF THE ASSESSEE GET DULY EXPLAINED AND IN THE CASH FLOW STATEMENT ALSO THE AMOUNT SEIZ ED BY THE INCOME TAX DEPARTMENT HAS BEEN CONSIDERED. SINCE TH E REVENUE ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 29 AUTHORITIES HAVE FAILED TO CHALLENGE THE CORRECTNES S OF THE CASH FLOW STATEMENT AND WERE MERELY QUESTIONING THAT WHY THE CASH WAS KEPT IN LOCKER AND NOT DEPOSITED IN BANK ARE NOT GOOD GR OUND TO MAKE ADDITION FOR UNEXPLAINED CASH IN THE HANDS OF THE A SSESSEE. 39. WE THEREFORE IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE ARE OF CONSIDERED VIEW THAT SINCE ASSESSEE HAS SUCC ESSFULLY EXPLAINED THE SOURCE OF CASH FOUND DURING THE COURS E OF SEARCH, ADDITION FOR UNEXPLAINED INCOME U/S 69A AT RS. 13,6 5,030/- OF THE ACT DESERVES TO BE DELETED. WE ACCORDINGLY SET ASI DE THE FINDINGS OF LD. CIT(A) AND DELETE THE ADDITION OF RS. 16,26,827 /- AND ALLOW GROUND NO.2 RAISED BY THE ASSESSEE IN IT(SS) NO.161 /IND/2017 FOR ASSESSMENT YEAR 2012-13. 40. NOW WE TAKE UP GROUND NO.3 FOR ASSESSMENT YEAR 2012-13 WHICH READS AS FOLLOWS:- 3.THAT THE ADDITION OF RS.1 ,40,914/- ON ACCOUNT OF VOLUNTARY DISCLOSURE U/S 132(4) AS DISCUSSED BY THE LEARNED DCIT IN PARA NO.19.6 OF THE ASSESSMENT ORDER BE HELD TO BE BAD AND UNJUSTIFIED ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND BE QUASHED AND DELETE D. 41. BRIEF FACTS RELATING TO THIS GROUND ARE THAT DURIN G THE SEARCH PROCEEDINGS ASSESSEE ADMITTED TO OFFER UNDISCLOSED INCOME FROM ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 30 PROFESSIONAL RECEIPT AND OTHER SOURCES AT RS.35,00, 000/- BUT IN THE INCOME TAX RETURN FILED IN RESPONSE TO THE NOTICE U /S 153A OF THE ACT THE TOTAL ADDITIONAL INCOME OFFERED IN VARIOUS ASSESSMENT YEARS TOTALED TO RS. 33,39,086/- AND THE MAJOR AMOUNT WAS OFFERED DURING THE ASSESSMENT YEAR 2012-13 AT RS.30,07,502/ -. THE DIFFERENCE OF AMOUNT ADMITTED DURING THE COURSE OF SEARCH I.E. RS. 35,00,000/- AND THE ACTUAL AMOUNT OFFERED IN THE IN COME TAX RETURN I.E. 33,39,086/- COMES TO RS. 1,60,914/-. L D. A.O HOWEVER WRONGLY CALCULATED THE DIFFERENCE AMOUNT OF RS. 1,4 0,914/- AND MADE THE ADDITION FOR THE SAME WHILE COMPLETING THE ASSESSMENT. AGAINST THE ADDITION OF RS.1,40,914/- THE GROUND RA ISED BY THE ASSESSEE BEFORE LD. CIT(A) DID NOT GET ANY RELIEF A ND THE ADDITION WAS CONFIRMED BY HIM OBSERVING AS FOLLOWS:- I HAVE PERUSED THE SUBMISSIONS OF THE LEARNED AR AND THE ASSESSMENT ORDER. THE APPELLANT ASSESSEE VOLUNTARILY DECLARED U/S 132(4) TO HAVE PROFESSIONAL RECEIPTS OF RS. 2 5,00,000/- AND ADMITTED TO HAVE RECEIVED A SUM OF RS. 10,00,000/- IN THE NAME OF DR ALKA GUPTA (WIFE OF THE APPELLANT ) AS INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES. HOWEVER PERUSAL OF THE RETURN FILED BY THE ASSESSEE FOR A.Y 2006-07 TO 2012-13 IT IS SEEN THAT THE ASSESSEE HAS OFFERED FOLLOWING ADDITIONAL UNDIS CLOSED INCOME FOR TAXATION. ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 31 A.Y RETURNED INCOME U/S 193(1) (IN RS.) DECLARED INCOME IN RETURN U/S 153A INCOME (IN RS.) ADDITIONAL INCOME OFFERED BY THE ASSESSEE (IN RS.) 2006-07 3,64,253/- 3,69,380/- 5,127/- 2007-08 3,70,203/- 4,84,835/- 1,14,637/- 2008-09 3,77,220/- 4,33,749/- 56,530/- 2009-10 3,99,770/- ,23,443/- 23,670/- 2010-11 5,94,730/- 7,26,346/- 1,31,620/- 2011-12 - 11,58,587/- - 2012-13 - 54,04,161/- 30,07,502/- TOTAL 33,39,086/- THE APPELLANT ASSESSEE WAS ASKED DURING THE COURSE OF ASSESSMENT PROCEEDINGS TO EXPLAIN WHY RS 1,40,914/- ( RS. 35,00,000 - RS. 33,39,086) SHOULD NOT BE TREATED AS UNDISCLOSED INCOME FROM PR OFESSIONAL RECEIPTS AND OTHER SOURCES. THE APPELLANT HAD VOLUNTARILY SU RRENDERED RS. 35,00,000/- DURING THE COURSE OF SEARCH AND STATEMENT WAS RECOR DED U/S 132(4). THE APPELLANT ASSESSE HAS NOT BEEN ABLE TO GIVE ANY MATERIAL EVIDENCES AS TO WHY ONLY-RS. 33,39,086/- HAS BEEN OFFERED AS ADDITIONAL INCOME IN RETURNS FILED U/S 153A WHERE AS HE HAD VO LUNTARILY ADMITTED RS. 35,00,000/- AS UNDISCLOSED INCOME. NO EVIDENCE WAS FILED EITHER AT ASSESSMENT STAGE OR AT THE APPELLATE STAGE. IN VIEW OF THE ABOVE DISCUSSION AND LACK OF MATERIA L EVIDENCES I DO NOT FIND ANY REASON TO INTERFERE WITH THE A.OS ORDER AN D ADDITION OF RS. 1,40,914/- U/S 132(4) FOR A.Y 2012-13 IS CONFIRMED. 42. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST THE FINDING OF LD. CIT(A) CONFIRMING THE ADDITION OF R S.1,40,914/-. ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 32 43. LD. COUNSEL FOR THE ASSESSEE REFERRED TO THE FOLLO WING WRITTEN SUBMISSION :- GROUND NO. 3 : ADDITION OF RS.1,40,914/- BEING THE DIFFERENCE BETWEEN THE DECLARED INCOME OF RS. 35,00,000/- U/S 132(4) AND THE ACTUAL DECLARATION - THE LD. AO HAS MADE THIS ADDITION AT PAGE 28, PAR A 19.5 ON THE GROUND THAT THE ASSESSEE HAS OFFERED THE INCOME OF RS.35,00,000/- U/S 132(4). HOWEVER, HE HAS DECLARED ONLY RS.33,39,086/- DURING THE VARIOUS YEARS AND AS SUCH THIS INCOME IS TAXED ON THE BASIS OF TH E DECLARATION. IT IS HUMBLY SUBMITTED THAT THE TOTAL DECLARATION OUT OF THE PROFESSIONAL RECEIPTS AND OTHER SOURCES WERE DECLARED ON AN ESTI MATED BASIS. THE ADDITIONS MADE ON HYPOTHETICAL GROUNDS PURELY ON TH E BASIS OF DECLARATION WITHOUT FINDING ANY PAPER DESERVE TO BE DELETED. 44. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE VEHEMEN TLY ARGUED SUPPORTED THE ORDERS OF BOTH THE LOWER AUTHO RITIES. 45. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RE CORDS PLACED BEFORE US. 46. THROUGH THIS GROUND NO.3 FOR ASSESSMENT YEAR 2012- 13 ASSESSEE HAS CHALLENGED THE FINDING OF LD. CIT(A) C ONFIRMING THE ADDITION OF RS. 1,40,914/- BEING THE DIFFERENCE BET WEEN THE AMOUNT ADMITTED TO BE OFFERED DURING THE COURSE OF SEARCH AND THE AMOUNT ACTUALLY OFFERED TO TAX IN INCOME TAX RETURN. AGAI NST THE INCOME ADMITTED TO BE OFFERED AT RS. 35,00,000/- ASSESSEE DECLARED ONLY ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 33 RS.33,39,086/- SPREAD OVER VARIOUS YEARS. THOUGH T HE DIFFERENCE WORKS TO RS. 1,60,914/- THE ADDITION WAS MADE AT RS .1,40,914/- AND EVEN BEFORE LD. CIT(A) FINDING WAS ONLY RELATIN G TO RS.1,40,914/- . 47. WE FIND THAT IT IS NOT THE CASE THAT AGAINST UNDIS CLOSED INCOME SURRENDERED DURING THE COURSE OF SEARCH U/S 69B OF THE ACT NO ACTUAL INCOME HAS BEEN OFFERED IN THE INCOME TAX RE TURN FOR WANT OF MATERIAL EVIDENCE OR NOT HAVING ANY NEXUS WITH I NCRIMINATING MATERIAL. IN THIS CASE STATEMENT OF OATH WAS RECOR DED U/S 132(4) OF THE ACT AND A SUM OF RS.35,00,000/- WAS ADMITTED AS UNDISCLOSED INCOME TO BE SURRENDERED. AGAINST THIS ADMISSION I NCOME HAS BEEN OFFERED TO TAX AT RS.33,39,086/- SO THERE IS A SHOR T DISCLOSURE. THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE IS T HAT THE AMOUNT SURRENDERED DURING THE COURSE OF SEARCH WAS ON ESTI MATED BASIS BUT WHEN THE RETURN OF INCOME WAS FILED THE ACTUAL FIGURES WERE DISCLOSED. IT IS WELL ADMITTED BY THE ASSESSEE TH AT THERE WAS AN UNDISCLOSED INCOME WHICH WAS NOT OFFERED IN THE EAR LIER YEARS. LUMP SUM AMOUNT WAS SURRENDERED AND AGAINST THE LUM P SUM AMOUNT OF RS.35,00,000/- INCOME HAS BEEN OFFERED. SO THE ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 34 STATEMENT GIVEN DURING THE COURSE OF SEARCH HAS A C LEAR NEXUS WITH THE INCOME OFFERED TO TAX. IT SEEMS THAT THE ASSES SEE WHILE FILING THE RETURN HAS TAKEN TELESCOPING BENEFIT OF VARIOUS INC OME WHICH WERE NOT OFFERED TO TAX IN EARLIER YEARS. FOR ASSESSMEN T YEAR 2012-13 THE AMOUNT OF RS.33,39,086/- HAS BEEN OFFERED TO TA X BUT THAT HAS BEEN LINKED TO THE VALUATION OF GOLD AND DIAMOND JE WELLERY FOUND AT LOCKER NO.23 AND THE SAME HAS BEEN MENTIONED IN THE COMPUTATION OF INCOME AT PAGE 14-15 OF PAPER BOOK PB A-4. THER E IS NO EVIDENCE PLACED ON RECORD TO SHOW THAT UNACCOUNTED PROFESSIO NAL RECEIPTS WHICH ASSESSEE FAILED TO OFFER IN THE PREVIOUS YEAR S HAS BEEN OFFERED TO TAX AS SURRENDERED AMOUNT SO AS TO COVER UP THE UNDISCLOSED GOLD AND DIAMOND JEWELLERY AND PAID INCOME FROM OTH ER SOURCE WHICH THE ASSESSEE FAILED TO OFFER IN THE EARLIER Y EARS. IN THIS SITUATION THE STATEMENT GIVEN UNDER OATH U/S 132(4) OF THE ACT IS A PERFECT DOCUMENTARY EVIDENCE BECAUSE THE AMOUNT SUR RENDERED IS NOT LINKED TO ANY MATERIAL EVIDENCE FOUND DURING TH E COURSE OF SEARCH ON THE BASIS OF WHICH THE INCOME COULD HAVE BEEN COMPUTED AND THE ASSESSEE HAS HIMSELF HONOURED THE SURRENDER MADE DURING SEARCH. WE ARE THUS OF THE CONSIDERED VIEW THAT T HE ASSESSEE WAS REQUIRED TO HONOUR THE SURRENDERED INCOME AND OFFER ED IT TO TAX IN ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 35 THE INCOME TAX RETURN. THOUGH THE DIFFERENCE IS OF RS. 1,69,014/- BUT SINCE THE ADDITION IN CHALLENGE IS ONLY RS.1,4 0,914/- WE CONFIRM THE SAME AND DISMISS ASSESSEES GROUND NO.3 . THE FINDING OF LD. CIT(A) STANDS CONFIRMED AND GROUND NO.3 OF T HE ASSESSEE IS DISMISSED. 48. NOW WE TAKE UP GROUND NO.6 OF IT(SS) NO.161/IND/20 17 FOR ASSESSMENT YEAR 2012-13 WHICH READS AS UNDER:- 6.THAT THE ADDITION OF RS.13,00,000/- ON ACCOUNT OF UNEXPLAINED EXPENDITURE U/S 69C AS DISCUSSED BY THE LEARNED DCI T IN PARA NO.12.6 OF THE ASSESSMENT ORDER BE HELD TO BE BAD AND UNJUSTIF IED ON / THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND BE QUASHED AND DELETED. 49. BRIEF FACTS RELATING TO THIS GROUND ARE THAT DURI NG THE COURSE OF SEARCH AT THE RESIDENTIAL PREMISE OF ASSESSEE LO CATED AT B-253, SHAHPURA BHOPAL DAIRY AS PER ANNEXURE-A-11L PAGE NO . 9-10 FOUND AND SEIZED. THESE PAGES ARE RELATED TO CASH EXPENSE S OF RS. 13,00,000/- FOR THE MONTH SEPTEMBER, OCTOBER, NOVEMBER, DECEMBER. IN THE ABOVE PAPER VARIOUS EXPENSES WERE ALSO SHOWN I.E. LAND ADVANCE, HOUSE HOLD ETC. FURTHER CALCULAT ION SHOWS THAT 1 LAKH HAS BEEN ADVANCED TOWARDS HOUSE, 2.00 LAKHS FO R LAND, RS 22,000/- FOR KITCHEN, RS 38,000/- FOR HOUSE HOLD ITEMS AND OTHER ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 36 CALCULATION OF RS 800/- (MEANS RS 80,000/-), RS 82500/-(MEANS RS 8.25 LAKHS). THE TOTALLING OF CALCULATION WAS SHOWN TO RS 13,00,000/- ETC. VIDE SHOW CAUSE NOTICE U/S 142(1) DATED 17/02/2014 THE ASSESSEE WAS ASKED TO FURNISH NATURE OF ABOVE TRAN SACTION AND RECONCILE WITH HIS BOOKS OF ACCOUNTS. HE WAS ALSO S HOW-CAUSE AS WHY THE AMOUNT OF RS. 13,00,000/- SHOULD NOT BE ADDED AS UNDISCLOSED CASH RECEIPT FOR RELEVANT ASSESSMENT YE AR. 50. THE ASSESSEE VIDE REPLY DATED 04/12/2013 ASSESSEE HAS STATED THAT :_ 'THESE PAPER CONTAINED DETAIL OF AN EXPENDITURE OF RS. 13 LACS. THE AMOUNT OF RS. 13 LACS BELONGS TO MRS. SUDHA JAIN AND MR. BHARAT JAIN , WHO ARE THE PARENTS OF MY WIFE MRS. ALKA GUPTA. MRS . SUDHA JAIN, MR. BHARAT JAIN RECEIVED ADVANCE MONEY FROM. THE SALE O F THEIR LANDS FROM TIME TO TIME AND THEY KEPT RS. 13 LACS WITH MY WIFE MRS. ALKA GUPTA FOR THE PURPOSE OF BUYING SOME SUITABLE PROPERTY IN BHO PAL. THE VARIOUS AMOUNTS MENTION IN THESE PAPERS TOTALING TO RS. 13 LACS PERTAIN TO PURCHASE OF A HOUSE BY MRS. SUDHA JAIN AND A PLOT B Y MR. BHARAT JOIN AND OTHER SUNDRY EXPENSES FOR THE RENOVATION OF THE HOUSE PURCHASED BY MRS. SUDHA JAIN. SMT. SUDHA JAIN, AND SHRI BHARAT JAIN SOLD IMMOVABL E PROPERTIES AS UNDER.- A. AGRICULTURAL LAND AT DELORA, RAGHURAJ NAGAR, SATNA TO MR. IRFAN ELAHI FOR RS. 5,00,000/- VIDE SALE DEED DATED 29~'O1-2007. ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 37 B.AGRICULTURAL LAND TO MRS. CHARULATA SOI FOR RS. 9 ,87,200/- VIDE SALE DEED DATED 02-12-2010: C.AGRICULTURAL LAND AT DELLORA, RAGHURAJ NAGAR, SAT NA TO MR. RAJIV SOI FOR RS. 31,51,100/- VIDE SALE DEED DATED 22-12-2010. OUT OF THE AFORESAID SALE CONSIDERATION RECEIVED BY THEM THEY KEPT RS. 13 LACS WITH MRS. ALLZA GUPTA TO BUY SOME SUITABLE PRO PERTY FOR THEM IN BHOPAL. THE AMOUNT OF RS. 13 LACS WAS UTILIZED IN THE PURCHASE OF FOLLOWING PROPERTIES FOR SMT. SUDHA JAIN AND SHRI B HARAT JAIN:- . A.DUPLEX HOUSE SITUATED AT SURVA DHARMA COLONY, BHO PAL FROM MR. SANJAY JAIN FOR TOTAL COST OF RS. 10,19,300/- VIDE REGISTERED DEED DATED 31-12-2009. B.PLOT AT GRAM BORDA, KOLAR READ, BHOPAL FROM MR. S HRDENDU KUMAR MISHRA FOR TOTAL COST OF RS. 5,20,4251- VIDE REGIST ERED DEED DATED 15-07- 2010. COPY OF AFORESAID ALL PURCHASE AND SALE DEEDS ARE E NCLOSED. 51. THE SUBMISSION OF THE ASSESSEE WERE CONSIDERED BY THE LD. A.O BUT NOT ACCEPTABLE TO HIM AND MADE ADDITION OF RS.13,00,000/- AS UNDISCLOSED INCOME. 52. AGAINST THE ADDITION OF RS.13,00,000/- ASSESSEE PR EFERRED APPEAL BEFORE LD. CIT (A) BUT FAILED TO SUCCEED. A CTION OF THE LD. A.O WAS CONFIRMED BY LD. CIT(A) OBSERVING AS FOLLOW S:- ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 38 THE PLEA TAKEN BY THE ASSESSEE THAT THE SUM RS.13, 00,000/- BELONGS TO SMT. SUDHA JAIN AND SHRI BHARAT JAIN BEING SALE CON SIDERATION OF DIFFERENT PROPERTIES SOLD BY THEM AND WAS KEPT TO BUY A SUITA BLE PROPERTY FOR THEM. THE APPELLANT FAILED TO FURNISH ANY CONFIRMATION IN THIS REGARD FROM SMT SUDHA JAIN AND SHRI BHARAT JAIN. THE APPELLANT ASS ESSEE WAS ALSO ASKED TO PRODUCE SMT. SUDHA JAIN AND SHRI BHARAT JA IN HOWEVER THEY WERE NOT PRODUCED BEFORE THE A.O NOR ANY INABILITY IN THIS REGARD WAS SHOWN. NO DOCUMENT OR ANY MATERIAL EVIDENCE WAS PR ODUCED BY THE APPELLANT ASSESSEE TO PROVE HIS CLAIM EITHER AT THE ASSESSMENT PROCEEDINGS OR AT THE APPELLATE STAGE. IN VIEW OF THE FOREGOING FACTS AND CIRCUMSTANCES, I DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE A.O AND ADDITION OF RS.13,00,000/- FOR A.Y 2012-13 ON ACCOUNT OF UNEXPLAINED EXPENDITURE U /S 69C IS CONFIRMED. 53. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 54. LD. COUNSEL FOR THE ASSESSEE MADE FOLLOWING WRITTE N SUBMISSION:- GROUND NO. 6 (PAGE 51 OF PH A-4) ; ADDITION OF RS.13,OO,OOO/- ON ACCOUNT OF UNEXPLAINED EXPENDITURE. THE LD. AO HAS MADE THI S ADDITION AT PAGE 16, PARA 12 ON THE BASIS OF LOOSE PAPER A-I/1, PAGE 9 AND 10 WHICH IS IN THE HANDWRITING OF MRS. ALKA GUPTA W/O THE ASSESSEE. THIS PAPER CONTAINS THE RECEIPT AND PAYMENT OF SOME AMOUNT. IT WAS SUBMITTED BEFORE THE LD. AO THAT THE ASSESSEE'S FATHER-IN-LAW AND MOTHER-IN-LAW HAD PURCHASED A DUPLEX HOUSE AT BHOPAL (PAGE 17 OF PB A-2). FOR THE PURCHASE AND RENOVATION OF THIS HOUSE, THE AMOUNT H AS BEEN RECEIVED AND SPENT ON THEIR BEHALF THIS IS A ROUGH ACCOUNT O F RECEIPT AND PAYMENT FOR THE SAID DUPLEX HOUSE. THE LD. AO HAS MADE THE ADDITION ON THE ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 39 HYPOTHESIS THAT THE ASSESSEE HAS INVESTED THIS MONE Y FROM HIS UNDISCLOSED SOURCES. THE LD. CIT(A) HAS UPHELD THE ADDITION. FROM THE SAID LOOSE PAPER, IT WOULD BE SEEN THAT T HE NAME OF SHRI B.K. JAIN, THE FATHER-IN-LAW OF THE ASSESSEE HAS BEEN M ENTIONED. THE PAPER AS A WHOLE WILL HAVE TO BE CONSIDERED. THE AFFIDAVIT OF THE MOTHER-IN-LAW STATING ALL THE FACTS WAS FILED BEFORE THE LD.CIT( A) WHICH CLEARLY STATED THAT THE FAMILY HAS ADVANCED THE MONEY FOR THE REN OVATION OF THE HOUSE. THE APPLICATION U/S 46A WAS ALSO MADE ALONGWITH THE DETAILS OF THE SALE OF THE AGRICULTURE LAND WHICH IS THE SOURCE OF THE SE INVESTMENTS. WITHOUT CONSIDERING ALL THESE PAPERS, THE ADDITION HAS BEE N MADE WHICH DESERVES TO BE DELETED. 55. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE VEHEMEN TLY ARGUED SUPPORTED THE ORDERS OF BOTH THE LOWER AUTHO RITIES. 56. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RE CORDS PLACED BEFORE US. THROUGH GROUND NO.6 ASSESSEE HAS CHALLENGED THE FINDING OF LD. CIT(A) CONFIRMING THE ACTION OF LD. A.O ON MAKING ADDITION OF RS.13,00,000/- TOWARDS UNDISCLOSED INCO ME ARISING OUT OF THE LOOSE PAPER BEARING NO. 9 & 10 OF THE SEIZED DIARY AS PER ANNEXURE A-I/1. WE OBSERVE THAT IN HE SEIZED LOOSE PAPER NO. 9 & 10 ANNEXURE A-I/1 AND PAGE 151 OF THE PAPER BOOK A- 4 VARIOUS TYPES OF FIGURES ARE MENTIONED. SOME ARE STRIKED O FF AND SOME ARE IN THE SHAPE OF ACCOUNT AND IT HAS SOME DETAILS OF EXPENSES. ON THE ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 40 SHEET FIGURE OF RS. 13,00,000/- WHICH IS APPEARING WHICH THE BASIS OF THE ADDITION MADE BY THE LD. A.O TREATING IT AS UNDISCLOSED INCOME. LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THIS LOOSE PAPER IS NOT SIGNED BY ANYONE AND NOT CONTAINING TH E NAME OF THE ASSESSEE. THE TRANSACTION APPEARING IN THE LOOSE P APER ARE CLAIMED TO BE SOME DETAILS OF EXPENDITURE/INVESTMENT MADE B Y ASSESSEES WIFE MRS. ALKA GUPTA ON BEHALF OF HER PARENTS I.E. SHRI BHARAT JAIN AND SMT. SUDHA JAIN. AFTER GOING THROUGH THE PAPER BOOK AND VARIOUS DOCUMENTS INCLUDING THE AFFIDAVIT OF SMT. S UDHA JAIN PLACED AT PAGE 88-89 AND COPY OF SALE DEED OF AGRIC ULTURE LAND SOLD BY SHRI BHARAT JAIN AND SMT. SUDHA JAIN PLACED AT P AGE NO. 62 TO 87 OF THE PAPER BOOK, WE FIND THAT SHRI BHARAT JAIN AND SMT. SUDHA JAIN SOLD AGRICULTURE LAND ON 29.01.2007, 02. 12.2010 AND 22.12.2010 FOR WHICH AN AGGREGATE SALE CONSIDERATIO N OF RS. 46,38,300/- WAS RECEIVED. OUT OF THIS SALE CONSIDE RATION SOME AMOUNT WAS PLANNED TO BE UTILIZED FOR PURCHASING A DUPLEX HOUSE AT BHOPAL AND TO PURCHASE A PLOT AT GRAM BORDA, BHO PAL. THE PARENTS OF MRS. ALKA GUPTA WERE RESIDING AT SATNA, MADHYA PRADESH AND SINCE THE DAUGHTER WAS LIVING IN BHOPAL THEY GA VE HER CASH AMOUNT FOR DOING NECESSARY PURCHASE OF HOUSE/PLOT A ND TO INCUR ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 41 CERTAIN EXPENSES FOR UP KEEP OF THE HOUSE. IT WAS ALSO PLACED ON RECORD THAT AGAINST THE EXCESS AMOUNT INCURRED, SMT . ALKA GUPTA WAS ALSO REIMBURSED BY HER PARENTS BY DEPOSITING CA SH AMOUNT IN HER BANK HELD WITH HDFC BANK ON 10.12.2010 AND 12.1 2.2010 OF RS.98,000/-. SHRI BHARAT JAIN EXPIRED AND ALL THE FACTS MENTIONED ABOVE HAVE BEEN SWORN IN THE AFFIDAVIT SIGNED BY SM T. SUDHA JAIN. 57. AS FAR AS THE LOOSE PAPER IS CONCERNED UNDOUBTEDLY IT IS ROUGH SHEET ON WHICH NO PROPER ACCOUNT OR DETAIL HAVE BEE N MENTIONED. MOST OF THE WRITTEN FIGURES HAS BEEN STRIKED OFF AN D AT SOME PLACE NAME OF SHRI BHARAT JAIN APPEARED BUT NOWHERE THE N AME OF ASSESSEE IS MENTIONED. THIS PAPER ALSO CONTAINED TH E DETAIL OF EXPENDITURE FOR HOUSE INCLUDING KITCHEN ACCESSORIES AND HOUSEHOLD ITEMS. THE SUBMISSION MADE BY THE ASSESSEE TO EXPL AIN THE TRANSACTIONS APPEARING IN THE LOOSE SHEETS FINDS WE IGHTAGE SINCE DIRECT NEXUS HAS BEEN BROUGHT ON RECORD BY WAY OF R EGISTERED SALE DEED OF THE LAND SOLD BY SHRI BHARAT JAIN AND MRS. SUHA .JAIN, NAME OF SHRI BHARAT JAIN APPEARING IN THE LOOSE SHE ET, AMOUNT MENTIONED TOWARDS ADVANCE PAID FOR PURCHASE OF LAND /HOUSE AND OTHER PAID EXPENDITURE. THOUGH IT IS WELL SETTLED THAT ADDITIONS CANNOT BE MADE ON THE BASIS OF UNSIGNED LOOSE PAPER S UNLESS AND ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 42 UNTIL ANY CORROBORATIVE EVIDENCE IS AVAILABLE WHICH SHOWS THE NEXUS OF THE TRANSACTION APPEARING IN SUCH LOOSE SHEET. IN THE INSTANT CASE ALSO THOUGH THERE IS NO DIRECT NEXUS OF THE A SSESSEE WITH THIS LOOSE PAPER EXCEPT THAT IT WAS FOUND AT HIS RESIDEN TIAL PREMISES. BUT ONLY BECAUSE THE LOOSE SHEET IS WRITTEN IN THE HAND WRITING OF THE ASSESSEES WIFE AND THE INCOMPLETE TRANSACTIONS/ENT RIES APPEARING IN THIS LOOSE SHEETS ARE CONNECTED TO ASSESSEES FA THERE IN LAW AND MOTHER IN LAW PRIMA FACIE NO ADDITION IS CALLED FOR IN THE HANDS OF THE ASSESSEE. EVEN OTHERWISE SUFFICIENT MATERIAL H AVE BEEN PLACED ON RECORD TO EXPLAIN THE ROUGH JOTTINGS IN THE LOOS E SHEET WHICH ARE BASICALLY THE CASH AMOUNT ADVANCED TO ASSESSEES WI FE FROM HER PARENTS TO BE SPEND FOR PURCHASE/MAINTENANCE OF DUP LEX/HOUSE AT BHOPAL AND SMT. ALKA GUPTA MAINTAINED THE DETAILS O N BEHALF OF HER PARENTS. IN THIS GIVEN FACTS AND CIRCUMSTANCES OF T HE CASE NO ADDITION WAS CALLED FOR BY THE LD.A.O IN THE HANDS OF THE ASSESSEE FOR UNDISCLOSED INCOME OF RS.13,00,000/- BASED ON T HE LOOSE PAPER APPEARING IN PAGE NO.9 & 10 ANNEXURE A-I/1 SEIZED D URING THE COURSE OF SEARCH. THUS WE SET ASIDE THE FINDINGS OF LD. CIT(A) AND DELETE THE ADDITION OF RS.13,00,000/- AND ALLOW GRO UND NO.6 RAISED IN APPEAL NO. IT(SS) 161/IND/2017 FOR ASSESSMENT YE AR 2012-13. ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 43 58. NOW WE TAKE UP GROUND NO.7 OF APPEAL NO. IT(SS) 161/IND/2017 FOR ASSESSMENT YEAR 2012-13 WHICH READ S AS UNDER:- 7.THAT THE ADDITION OF RS.1 ,86,478/- MAINTAINED AN D CONFIRMED BY CIT(A) ON ACCOUNT OF SHORT-TERM CAPITAL GAIN U/S 50C BY A DOPTING COST OF ACQUISITION AT RS.59,76,625/- IN PLACE OF RS.61 ,2 3,103/- AS DISCUSSED BY THE LEARNED DCIT IN PARA NO.17.5 OF THE ASSESSME NT ORDER BE HELD TO BE BAD AND UNJUSTIFIED ON THE FACTS AND IN THE CIRCUMS TANCES OF THE CASE AND BE QUASHED AND DELETED. 59. BRIEF FACTS RELATING TO THIS GROUND ARE THAT ASSES SEE SOLD RESIDENTIAL PLOT BEARING KHASRA NO.85, 296, 85/2 ME ASURING 2324 SQ.FT AT RAVISHANKAR NAGAR, BHOPAL ON 27.02.2012 TO SHRI VINOD KUMAR BHATIA FOR CONSIDERATION OF RS.86 LAKHS. ASS ESSEE CLAIMED DEDUCTION FOR COST OF ACQUISITION AT RS.61,23,103/- AND EXPENDITURE ON TRANSFER AT RS.10,31,295/-. SHORT TERM CAPITAL GAIN OF RS.14,45,602/- DECLARED IN THE INCOME TAX RETURN. LD. A.O AFTER CONSIDERING THE DETAILS WAS NOT SATISFIED WITH THE DEDUCTION CLAIMED BY THE ASSESSEE AND AFTER DISALLOWING CERTAIN DEDUC TIONS RECOMPUTED THE SHORT TERM CAPITAL GAIN AND MADE ADD ITION OF RS.12,17,773/-. AGAINST THIS ADDITION ON ACCOUNT O F SHORT TERM ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 44 CAPITAL GAIN, ASSESSEE PREFERRED APPEAL BEFORE CIT( A) AND PARTLY SUCCEEDED AS LD. CIT(A) ALLOWED SOME CLAIM TOWARDS DEDUCTION CLAIMED BY THE ASSESSEE BUT STILL CONFIRMED THE ADD ITION OF RS.1,86,478/- OBSERVING AS FOLLOWS:- I HAVE .CONSIDERED THE SUBMISSIONS OF THE LEARNED A R, THE ASSESSMENT ORDER AND ALSO PERUSED THE CASE RECORD. PERUSAL OF THE COPY OF REGISTRY SHOWS THAT AS PER T HE AGREEMENT BETWEEN THE APPELLANT ASSESSEE WHO IS THE SELLER AND THE PU RCHASER SHRI VINOD KUMAR BHATIYA SLO SHRI CHARNAN LAL BHABYA, THE STAM P DUTY CHARGES AND ALL OTHER EXPENSES RELATING TO TRANSFER OF THE PROP ERTY HAVE TO BE PAID BY THE S ELLER. PAGE 3 OF THE SALE DEED CLEARLY MENTIONS THAT STAMP DUTY CHARGES, REGISTRATION CHARGE AND OTHER CHARGES RELA TING TO THE SALE OF SAID PROPERTY HAVE TO BE BORNE BY THE SELLER. IN VIEW OF THE ABOVE, ADDITIONS ON ACCOUNT OF STAMP DUTY CHARGES OF RS. 6,30,000/-, REGISTRATION FEES OF RS. 69,295/- AND TRANSFER FEE PAYMENT TO AWAS RAHAT GRAH NIRMAN SAHAKARI SAMITI OF RS. 1 ,72,000/- ARE HEREBY DELETED. 13.2 BROKERAGE OF RS. 1,60,000/- HAS BEEN PAID TO S HRI. RAVI MANWANI. BROKERAGE IS GENERALLY PAID @ 1-2%. THE TOTAL SALE CONSIDERATION OF THE PROPERTY HAS BEEN SHOWN BY THE APPELLANT AS RS. 86, 00,000/- AND BROKERAGE CHARGES OF RS. 1,60,000/- AS CLAIMED IS FALLING IN BETWEEN 1-2% OF THE TOTAL SALE CONSIDERATION, THEREFORE, THE ADD ITION OF RS. 1,60,000/- ON THIS ACCOUNT IS DELETED. 13.3 THE COST OF ACQUISITION AS TAKEN BY THE A.O IN THE ASSESSMENT ORDER IS RS.59,76,625/- . ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 45 THE APPELLANT HAS SHOWN COST OF ACQUISITION AT RS. 61,23,103/- WHEREAS THE A.O HAS TAKEN COST OF ACQUISITION AT RS. 59,76, 625/-. THE COST OF ACQUISITION AS TAKEN BY A.O AT RS. 59,76,625/-IS CO NFIRMED. THE GROUND OF APPEAL IS PARTLY ALLOWED . 60. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 61. LD. COUNSEL FOR THE ASSESSEE REFERRED TO THE FOLLO WING WRITTEN SUBMISSIONS:- GROUND NO. 7 (PAGE 90 TO 125 OF PB A-4} : ADDITION OF RS.L,86,478/- ON ACCOUNT OF SHORT TERM CAPITAL GAINS _ THE LD. AO HA S MADE THIS ADDITION OF RS.12,17,773 AT PAGE 22, PARA 17 ON THE GROUND THAT THE ASSESSEE HAS GAINED THIS INCOME ON ACCOUNT OF SALE OF PLOT AT MANIPURAM COLONY, BHOPAL. COMPLETE DETAILS WERE FILED BEFORE HIM. THE LD. AO DID NOT CONSIDER THE REGISTRATION EXPENSES AND BROKERAG E INCURRED BY THE ASSESSEE ON PURCHASE AND SALE OF THIS PLOT. THE LD. CIT(A) HAS DELETED THE ADDITION OF RS.L0,31 ,295/- AT PAGE 71 OF THE ORDER. HOWEVER, THE LD. CIT(A) DID NOT CONSIDER THE TRANSFER CHARGES OF RS.L,08,073/- PAID TO THE SOCIETY AND MC CHARGES OF RS.11,030/- PAID TO THE BANK FOR DRAFTS PREPARED AND RS.23,000/- PAID TO THE ADVOCATES. THE DETAILS HAVE BEEN GIVEN AT PAGE 70 OF THE LD. CIT(A)'S ORDER. IT IS H UMBLY SUBMITTED THAT ALL THESE PAYMENTS ARE MADE WHICH CONSTITUTES THE COST OF THE PLOT. THE DIFFERENCE OF RS.40,000/- BETWEEN THE VALUATION OF THE STAMP DUTY AUTHORITIES AND ACTUAL CONSIDERATION RECEIVED IS DI SALLOWABLE. 62. LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY ARGUED SUPPORTED THE ORDERS OF LD. CIT(A). ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 46 63. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RE CORDS PLACED BEFORE US. THE SHORT FACTS OF ISSUE RAISED IN GROUND NO.7 OF THE ASSESSEES APPEAL FOR ASSESSMENT YEAR 2012-13 R ELATES TO ADDITION OF RS.1,86,478/- ON ACCOUNT OF SHORT TERM CAPITAL GAIN. FROM PERUSAL OF THE SUBMISSION MADE BY THE ASSESSEE AS WELL AS DETAILS PLACED BEFORE US, WE OBSERVE THAT EXPENSES, BROKERAGE INCURRED BY THE ASSESSEE AT THE TIME OF PURCHASE OF PLOT WERE NOT CONSIDERED BY LD. CIT(A) WHICH INCLUDES TRANSFER CH ARGES OF RS.1,08,073/- PAID TO THE SOCIETY, BANK CHARGES FOR DRAFT PREPARATION OF RS. 11,030/- AND LEGAL FEES OF RS.20 ,000/-. THESE EXPENSES OF RS. 1,42,103/- HAVE BEEN INCURRED IN CO NNECTION WITH PURCHASE OF THE PROPERTY AND THIS FORM THE PART OF TOTAL COST OF THE LAND AND SAME DESERVES TO BE ALLOWED AGAINST THE SA LE CONSIDERATION RECEIVED BY THE ASSESSEE. REVENUE AUTHORITIES HAVE NOT CHALLENGED THE GENUINENESS OF THIS EXPENDITURE, WE THEREFORE A LLOW THE DEDUCTION OF RS. 1,42,103/- AND FOR THE REMAINING A MOUNT OF RS.44,375/- THE ADDITION FOR SHORT TERM CAPITAL GAI N STANDS CONFIRMED. IN THE RESULT GROUND NO.7 OF THE ASSESS EES APPEAL IS PARTLY ALLOWED. ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 47 64. NOW WE TAKE GROUND NO.8 OF IT(SS) NO.161/IND/2017 FOR ASSESSMENT YEAR 2012-13 WHICH READS AS UNDER:- 8. THAT THE ADDITION OF RS. 4,46,086/- ON ACCOUNT OF U NEXPLAINED INVESTMENT U/S 69B AS DISCUSSED BY THE LEARNED DCIT IN PARA NO.18.11 OF THE ASSESSMENT ORDER BE HELD TO BE BAD AND UNJUS TIFIED ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND BE QUASHED AND DELETED. 65. BRIEF FACTS RELATING TO THIS GROUND ARE THAT DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS LD. A.O OBSERVED THAT ASSESS EE HAD MADE SOME INVESTMENT IN THE CONSTRUCTION OF HOUSE LOCATE D AT 253, SHAHPURA, BHOPAL. ASSESSEE DECLARED SUM OF RS.1,75 ,500/- BEING INCURRED FOR RENOVATION OF THE CLINIC LOCATED IN TH E HOUSE AT SHAHPURA, BHOPAL. LD. A.O MADE REFERENCE TO THE DE PARTMENTAL VALUATION OFFICER VIDE LETTER DATED 6.8.2013 AND RE PLY OF DEPARTMENTAL VALUATION OFFICER WAS RECEIVED ON 4.3. 2014 ESTIMATING VALUATION OF CONSTRUCTION AT RS.6,21,586 /-. DURING THE ASSESSMENT YEAR 2012-13 DIFFERENCE OF RS.4,46,086/- WAS TREATED AS UNEXPLAINED INVESTMENT AND ADDITION MADE U/S 69B OF THE ACT. AGAINST THE ADDITION MADE BY THE LD. A.O AT RS.4,46 ,086/- U/S 69B OF THE ACT, THE APPEAL PREFERRED BY THE ASSESSEE BE FORE LD. CIT(A) DID NOT BROUGHT ANY RELIEF AND ADDITION WAS CONFIRMED BY THE LD. CIT(A) OBSERVING AS FOLLOWS:- ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 48 1 HAVE CONSIDERED THE FACTS OF THE CASE, SUBMISSIONS OF THE LEARNED A .R., THE ASSESSMENT ORDER AND PERUSED THE CASE RECORD. T HE SUBMISSION OF ME APPELLANT ASSESSEE THAT THE INVESTMENT IN THE RENOV ATION OF CLINIC IS ONLY OF RS.L,75,500/ AS AGAINST RS 6,21,586/ ESTIMATED BY THE DVO HAS NO MERIT. THE PLEA TAKEN THAT THE CLINIC PORTION EXIST ED AT THE TIME OF PURCHASE OF PROPERTY FROM SHRI DEVDENDRA KUMAR SINGH WHO WAS A PRACTICIN G SURGEON AND RESIDING IN THE SAME HOUSE DOES NOT SHO W THAT THE INVESTMENT AS ESTIMATED BY THE D.V.O IS INCORRECT. THE COPY OF THE MAP OF THE HOUSE MED BY THE APPELLANT ONLY SHOWS THAT THE CLINIC PORTION EXISTED AT THE TIME OF PURCHASE OF THE HOUSE, IT DOES NOT GIVE ANY DETAIL AS TO THE QUALITY OF CONSTRUCTION AND RENOVATION DONE. THE RE NOVATION WAS DONE LATER AND THE ESTIMATE MADE BY THE D.V.O IS IN ORDER. NO EVIDENCE REGARDING THE SAME WAS FILED EITHER BEFORE THE A.O OR DURING THE APPELLATE PROCEEDINGS, THE INVESTMENT IN THE RENOVATION OF THE CLINIC RELA TES TO THE PERIOD F .Y 2011- I 2. IN VIEW OF THE ABOVE, THE ESTIMATE TAKEN BY THE A.O AS PER THE VALUATION REPORT CALLS FOR NO INTERFERENCE AND THE ADDITION O F RS. 4,46,086/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN CONSTRUCTION U/S 69B IS UPHELD. G ROUND OF APPEAL IS DISMISSED. 66. AGGRIEVED ASSESSEE IS IN APPEAL BEFORE THE TRIBUNA L. 67. LD. COUNSEL FOR THE ASSESSEE REFERRED TO THE FOLLO WING WRITTEN SUBMISSIONS:- GROUND NO. 8 (PAGE 140 TO 186 OF PB A-4} : ADDITION OF RS.4,46,086/- ON ACCOUNT OF VALUATION OF RENOVATION OF HOUSE - THE L D. AO HAS MADE THE ADDITION IN PAGE 24, PARA 18.110F THE ASSESSMENT OR DER. THE ASSESSEE HAD PURCHASED THE HOUSE ON 30.4.2003 OF 300 SQ METE RS. DURING THE FY ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 49 2003-04, THE ASSESSEE CONSTRUCTED ABOUT 191 SQ. MET ERS FOR HIS CLINIC AND INCURRED AN EXPENDITURE OF ABOUT RS.9.5 LACS. D URING THE AY 2012- 13, THE CLINIC PORTION WAS RENOVATED BY CHANGE OF T ILES AND FALSE CEILING. THE MATTER WAS REFERRED TO THE VALUATION CELL AND T HE LD. VALUATION OFFICER VALUED THE RENOVATED PORTION OF THE WHOLE B UILDING OF 191 SQ. METERS AS ON THE DATE OF INSPECTION AND BIFURCATED THE ENHANCED VALUATION ON THE BASIS OF THE VALUE DECLARED BY THE ASSESSEE. THE WHOLE APPROACH OF THE DVO WAS WRONG. HE SHOULD HAVE VALUE D ONLY THE RENOVATED PORTION OF THE BUILDING FOR FALSE CEILING AND CHANGE OF FLOORING. THE ADDITION MADE ON THE NOTIONAL CONSTRUCTION IS B AD IN LAW AND DESERVES TO BE DELETED. 68. PER CONTRA DEPARTMENTAL REPRESENTATIVE VEHEMENTLY ARGUED SUPPORTED THE ORDER OF BOTH THE LOWER AUTHORITIES. 69. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RE CORDS PLACED BEFORE US. THROUGH GROUND NO.8 ASSESSEE HAD CHALLENGED THE FINDING OF LD. CIT(A) CONFIRMING THE ADDITION F OR UNEXPLAINED INVESTMENT OF RS.4,46,086/- IN THE RENOVATION OF HO USE SITUATED AT SHAHPURA, BHOPAL. LD. COUNSEL FOR THE ASSESSEE HAS CHALLENGED THE CORRECTNESS OF THE VALUATION REPORT CONTENDING THAT DURING THE ASSESSMENT YEAR 2012-13 ONLY THE CLINIC PORTION WAS RENOVATED BY CHANGING THE TILES AND FALSE CEILING FOR WHICH AN A MOUNT OF RS.1,75,500/- WAS INCURRED. THE REMAINING CONSTRUC TION IN THE HOUSE MEASURING 191 SQ. METERS WAS INCURRED DURING FINANCIAL YEAR ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 50 2003-04 RELEVANT TO ASSESSMENT YEAR 2004-05 BUT THE DEPARTMENTAL VALUATION OFFICER (IN SHORT DVO) WRO NGLY VALUED THE RENOVATED PORTION OF THE WHOLE BUILDING OF 191 SQ. METER AS ON THE DATE OF INSPECTION AND ENHANCED THE VALUATION. IT WAS FURTHER CLAIMED ON BEHALF OF THE ASSESSEE THAT THE DVO SHOU LD HAVE VALUED THE RENOVATED PORTION OF THE BUILDING FOR FALSE CEI LING AND CHANGE OF FLOORING. ON THE OTHER HAND LD. CIT(A) HAS GIVEN IN HIS FINDING THAT IN THE COPY OF MAP OF THE HOUSE ONLY CLINIC PORTION EXISTED AT THE TIME OF PURCHASE AND ASSESSEE DID NOT GIVE ANY DETA ILS OF QUALITY OF CONSTRUCTION AND RENOVATION. 70. WE HOWEVER ON PERUSAL OF THE PURCHASE DEED OF THE SAID HOUSE PLACED AT PAGE 153 TO 186 FIND THAT AT THE TIME OF PURCHASE OF THE PROPERTY ON 30.04.2003 THERE STOOD CONSTRUCTED HOUS E WITH GROUND FLOOR MEASURING 204.46 SQ.M, FIRST FLOOR 46.67 SQ.M AND SECOND FLOOR 49.72 SQ.M. PAGE NO.3 OF THE DEED FURTHER READS THAT SELLER BUILT THE HOUSE ON THE SAID PLOT OF LAND AFTER TAKI NG PERMISSION FROM BHOPAL MUNICIPAL CORPORATION ON 13.7.88. SO THE FIN DING OF LD. CIT(A) ONLY CLINIC WAS CONSTRUCTED AND THERE WAS NO OTHER CONSTRUCTION AT THE TIME OF PURCHASE OF THE HOUSE D O NOT HAVE ANY ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 51 MERIT. THE DVO HAS ESTIMATED THE TOTAL VALUATION O F THE RENOVATION OF THE HOUSE WHICH IS ALSO NOT JUSTIFIED SINCE ONLY THE RENOVATION OF THE CLINIC WAS IN QUESTION. HOWEVER LOOKING TO THE FACT THAT DETAILS PREPARED BY THE ASSESSEE FOR THE EXPENDITURE INCURR ED ON RENOVATION IS NOT FULLY DOCUMENTED, WE THEREFORE BE ING FAIR TO BOTH THE PARTIES AND LOOKING TO THE SMALLNESS OF THE ISS UE CONFIRM THE ADDITION OF RS.1,00,000/- FOR THE UNDISCLOSED INVES TMENT AND DELETE REMAINING AMOUNT OF RS.3,36086/-. THUS THE ASSESSEE GETS PARTIAL RELIEF. GROUND NO.8 OF THE ASSESSEES APPEAL IS PA RTLY ALLOWED. 71. NOW WE TAKE UP GROUND NO.3 FOR ASSESSMENT YEAR 201 1-12 AND GROUND NO.4 & 5 FOR ASSESSMENT YEAR 2012-13 OF APPEAL NO. IT(SS) NO.64/IND/2017 & IT(SS) NO.161/IND/2017 OF S HRI ASHOK GUPTA WHICH READS AS FOLLOWS:- ASSESSMENT YEAR 2011-12 GROUND NO.3. THAT THE ADDITION OF RS.40,OO,OOO/- ON ACCOUNT OF VOLUNTARY DISCLOSURE U/S 132(4) AGAINST THE CASH RECEIVED FROM BANSAL GROUP FOR SALE OF SHARES OF AYUSHMAN MEDICAL DIAGNOSTIC PVT. LTD. AS DISCUSSED BY THE LEARNED DCIT IN PARA NO.20.9 OF THE ASSESSMENT ORDER BE HELD TO BE BAD AND UNJUSTIFIED ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND BE QUASHED AND DELETED. ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 52 ASSESSMENT YEAR 2012-13 GROUND NO.4 THAT THE ADDITION OF RS.1,75,00,000/- ON ACCOUNT OF VOLUNTARY DISCLOSURE U/S 132(4) AGAINST THE CASH RECEIVED FROM BANSAL G ROUP FOR SALE OF SHARES OF AYUSHMAN MEDICAL DIAGNOSTIC PVT LTD. AS D ISCUSSED BY THE LEARNED DCIT IN PARA NO.20.9 OF THE ASSESSMENT ORD ER BE HELD TO BE BAD AND UNJUSTIFIED ON THE FACTS AND IN THE CIRCUMS TANCES OF THE CASE AND BE QUASHED AND DELETED. GROUND NO.5: THAT THE ADDITION OF RS.1,85,00,000/- ON ACCOUNT OF CASH RECEIVABLE FROM BANSAL GROUP FOR SALE OF SHARES OF AYUSHMAN MEDICAL DIAGNOSTIC PVT LTD. AS DISCUSSED BY THE LEARNED DCIT IN PARA NO.20.10 O F THE ASSESSMENT ORDER BE HELD TO BE BAD AND UNJUSTIFIED ON THE FACT S AND IN THE CIRCUMSTANCES OF THE CASE AND BE QUASHED AND DELETE D. 72. SINCE THE ADDITIONS CHALLENGED IN THE ABOVE REFERR ED GROUNDS ARE BASED ON THE COMMON ISSUE THEY HAVE BEEN DEALT TOGETHER. ADDITIONS ON SIMILAR ISSUE HAVE ALSO BEEN MADE IN T HE CASE OF OTHER TWO DIRECTORS NAMELY DR. NEERAJ KUMAR AND DR. GOPAL BATNI. IN THIS BUNCH OF APPEALS WE ARE DEALING WITH THE CASE OF SHRI ASHOK GUPTA AND DR. NEERAJ KUMAR. GROUNDS RELATES TO THE COMMON ISSUE OF ADDITION MADE ON ACCOUNT OF MEMORANDUM OF UNDERS TANDING FOR THE SALE OF SHARES OF AYUSHMAN DIAGNOSTIC PVT. LTD FOUND DURING ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 53 THE COURSE OF SEARCH AND THE CASH SUM RECEIVED FROM THE BUYERS AND ADMITTED DURING THE COURSE OF SEARCH IS BEING D EALT HERE AND THE FINDING SHALL BE APPLIED WHILE ADJUDICATING THE GROUNDS RAISED ON THIS COMMON ISSUE IN THE CASE OF DR. NEERAJ KUMA R IN THE APPEALS NO. IT(SS) NO.67/IND/2017 AND IT(SS) NO.162 /IND/2017 TO BE DEALT IN THE SUBSEQUENT PARAS. 73. BRIEF FACTS RELATING TO GROUND NO.3 FOR ASSESSMENT YEAR 2011- 12, GROUND NO. 4 & 5 FOR ASSESSMENT YEAR 2012-13 AR E THAT DURING THE COURSE OF SEARCH LOOSE PAPERS AND DOCUMENTS WER E FOUND AND SEIZED FROM THE OFFICE PREMISES AT HIG-3, LAKE VIEW APARTMENT, SHAHPURA, BHOPAL REFERRED AS PAGE NO.30 OF LPS-6 CO NDUCTED ON 2.6.2011. THE SAID PAPER IS THE MEMORANDUM OF UNDER STANDING (IN SHORT MOU) ENTERED INTO BETWEEN THE DIRECTORS OF AY USHMAN DIAGNOSTICS PVT. LTD (AMDPL) AND THE REPRESENTATIVE OF BANSAL GROUP REGARDING TRANSFER OF 100% EQUITY SHARES OF T HE SAID COMPANY. THIS MOU WAS EXECUTED ON 24.10.10 AND REF ERES TO THE GROSS CONSIDERATION OF RS.26.75 CRORES FROM WHICH T HE LIABILITIES OF THE COMPANY WERE TO BE ADJUSTED. IN CONSEQUENCE OF THIS MOU THE SHARE PURCHASE AGREEMENTS WERE LATER EXECUTED ON 13 .8.2012. SUBSEQUENT TO ENTERING INTO THE MOU THE SHARE HOLDE RS OF AMDPL ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 54 NAMELY DR. ASHOK GUPTA, MRS ALKA GUPTA, DR. GOPAL B ATNI , DR. NEERAJ KUMAR AND SMT. CHARU KUMAR RECEIVED VARIOUS CONSIDERATION THROUGH CHEQUES. APART FROM CONSIDERA TION IN CHEQUE CASH SUM OF RS.2.15 CRORES WAS RECEIVED BY DR. ASHO K GUPTA IN APRIL AND MAY 2011, CASH OF RS.90 LAKHS AND RS.50 L AKHS WAS RECEIVED BY DR. GOPAL BATNI DURING 3 RD QUARTER OF2010-11 AND APRIL, MAY 2011. DR. NEERAJ KUMAR ALSO RECEIVED CASH OF R S.90 LAKHS DURING 25.10.2011 TO 31.3.2011 AND RS.55 LAKHS DURI NG APRIL AND MAY, 2011. WHEN THE ASSESSEE WAS CONFRONTED WITH T HESE DOCUMENTS IT WAS SUBMITTED THAT THERE IS NO DISPUTE WITH REGARD TO THE AMOUNT RECEIVED IN CASH AND CHEQUE AND THE TOTA L CONSIDERATION RECEIVED HAS BEEN OFFERED TO TAX IN THE RETURN OF I NCOME FILED FOR FINANCIAL YEAR 2012-13 RELEVANT TO ASSESSMENT YEAR 2013-14 WHEN THE EQUITY SHARES WERE TRANSFERRED. IT WAS FURTHER SUBMITTED THAT SINCE AGAINST THE SAID CONSIDERATION ASSESSEE HAS D ULY CLAIMED THE INDEXED COST OF ACQUISITION AND OTHER INCIDENTAL EX PENSES AND HAS PAID DUE TAXES, THEREFORE NO ADDITION WITH RESPECT TO ADVANCE CONSIDERATION RECEIVED DURING THE FINANCIAL YEAR 20 10-11 AND 2011- 12 SHOULD BE MADE SINCE EQUITY SHARES WERE NOT TRAN SFERRED IN THESE TWO YEARS BUT THEY WERE TRANSFERRED IN FINANC IAL YEAR 2012- ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 55 13. LD. A.O AFTER CONSIDERING THE SUBMISSION OF TH E ASSESSEE WAS NOT CONVINCED AND HE WAS OF THE VIEW THAT THE ASSES SEE SHOULD HAVE OFFERED THE AMOUNTS TO TAX IN THE YEAR WHEN THEY WE RE RECEIVED. THE SUBMISSION OF THE ASSESSEE THAT ADVANCE TAX HAS BEEN PAID FOR ASSESSMENT YEAR 2013-14 AND INCOME IS TO BE OFFERED IN THE RETURN OF INCOME OF ASSESSMENT YEAR 2013-14 DID NOT FIND A NY MERIT BY THE LD. A.O AND HE AFTER GIVING A DETAILED FINDING AND JUDICIAL PRECEDENCES COMPLETED THE ASSESSMENT AFTER MAKING ADDITION FOR RS.40,00,000/- AND RS.1,75,00,000/- RECEIVED BY THE ASSESSEE IN CASH DURING ASSESSMENT YEAR 2011-12 AND ASSESSMENT YEAR 2012- 13 AS UNDISCLOSED INCOME. LD. A.O ALSO MADE ADDITI ON OF RS.1,85,00,000/- OBSERVING THAT THE MOU WAS ENTERED ON 24.10.10 AND THE AMOUNT WHICH WAS NOT RECEIVED TILL THE DATE OF SEARCH I.E. 2.6.2011 CALCULATED AT RS. 1,85,00,000/- WHICH WAS NOT RECEIVED BY THE ASSESSEE ALSO NEEDS TO BE ADDED AS INCOME FOR A SSESSMENT YEAR 2012-13. WHILE MAKING ADDITION FOR RS. 1,85,00,000 /- LD. A.O FURTHER OBSERVED THAT THE ASSESSEE HAS NOT OFFERED ANY SATISFACTORY EXPLANATION WHY THE AMOUNT OF RS.1,85,00,000/- WAS NOT SHOWN IN THE BOOKS OF ACCOUNTS. SIMILAR TYPE OF ADDITION WE RE ALSO MADE IN THE CASE OF DR. NEERAJ KUMAR AT RS.90 LAKHS AND RS. 55 LAKHS FOR ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 56 CASH RECEIVED DURING ASSESSMENT YEAR 2011-12 AND 2 012-13 AND ALSO ADDITION OF RS.2,80,00,000/- IN ASSESSMENT YEA R 2012-13 FOR THE AMOUNT RECEIVABLE AFTER THE DATE OF SEARCH I.E. 02.06.2011. AGAINST THE ADDITIONS MADE IN THE HANDS OF DR. ASHO K GUPTA FOR ASSESSMENT YEAR 2011-12 AND 2012-13 WITH REGARD TO THE AMOUNT RECEIVED ON ACCOUNT OF MOU, ASSESSEE PREFERRED APPE AL BEFORE LD. CIT(A) BUT DID NOT FIND ANY FAVOUR. BEFORE LD. CIT (A) IT WAS SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE THAT THERE IS NO DISPUTE WITH REGARD TO THE CONSIDERATION RECEIVED I N CASH AND CHEQUE BUT SINCE DUE TO CERTAIN DISPUTES WITH M/S W OCKHARD HOSPITAL LTD DUE TO WHICH THE DEAL WITH BANSAL GROU P CAME TO A HALT AND FINALLY AFTER THE ARBITRATION AWARD WHEN T HE MATTER WAS SETTLED, EQUITY SHARES WERE TRANSFERRED. IN THE SU BMISSION BEFORE LD. CIT(A) IT WAS MADE CLEAR THAT TOTAL CONSIDERATI ON RECEIVED IN CASH AND CHEQUE HAS BEEN SHOWN AS SALE CONSIDERATIO N OF THE EQUITY SHARES SOLD BY THE ASSESSEE AND DUE TAXES PA ID AFTER CLAIMING INDEXED COST OF ACQUISITION IN THE RETURN OF INCOME FILED FOR ASSESSMENT YEAR 2013-14 BUT THIS SUBMISSIONS OF THE ASSESSEE DID NOT FIND ANY FAVOUR AND THE ACTION OF THE LD. A.O W AS CONFIRMED BY LD. CIT(A) OBSERVING AS FOLLOWS:- ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 57 I HAVE PERUSED THE SUBMISSIONS OF THE LEARNED AR , THE ASSESSMENT ORDER AND CASE RECORD. DURING THE COURSE OF SEARCH AT THE OFFICE PREMISES OF DR. NEERAJ KUMAR LOOSE PAPERS WERE FOUND AND SEIZED, THIS DOCUMENT I S MOU DATED 24.10.2010 BETWEEN AUSHMAN MEDICAL DIAGNOSTIC S PVT. LTD ALONG WITH ITS 100 SHARE HOLDERS NAMELY DR ASHOK GUPTA, DR GOPAL BATANI, DR NEERAJ GUPTA AND MR ANIL BANSAL FOR TRANSFER OF SHA RES (OR A TOTAL CONSIDERATION OF RS 26.15 CRORES. ALL THREE DIRECT ORS OF AYUSHMAN HOSPITAL HAVE ADMITTED THAT THE DEAL HAS BEEN FINAL WITH BAN SAL GROUP FOR AN AMOUNT 'OF RS.26.75 CRORES, THEY ALSO ADMITTED THAT THEY HAVE RECEIVED AMOUNT OF RS.5.00 CRORES CASH AND RS.2.85 CRORES BY CHEQUE TILL THE DATE OF SEARCH. THE BALANCE AMOUNT OF RS.7.50 CRORES WA S RECEIVABLE ON THE DATE OF SEARCH. THE AO HAS CLEARLY WORKED OUT DETA ILS OF RECEIVABLE AS UNDER:- NAME OF DOCTOR/DIRECTOR REMAINING AMOUNT NOT RECEIVED TILL THE DATE OF SEARCH I.E. 02.06.2011 DR. ASHOK GUPTA RS. 1.85 CRORES DR. GOPTAL BATNI RS. 2.85 CRORES DR. NEERAJ KUMAR RS. 2.80 CRORES TOTAL RS. 7.5 CRORES ALSO, DURING THE COURSE OF SEARCH AT THE OFFICE PRE MISES OF BANSAL GROUP SITUATED AT 3 RD FLOOR TAWA COMPLEX, BITTAN MARKET, BHOPAL INCRIMIN ATING DOCUMENTS WERE FOUND AND SEIZED WHICH CONTAIN DETAI LS OF CASH PAYMENT MADE TO DR. ASHOK GUPTA, DR. GOPAL BATNI AND DR. NE ERAJ KUMAR TOTALLING TO RS. 5.00 CRORES [PAGE NO. 3 & 4 OF LPS 4/2 (PAGE NO 1 TO 9)] WHEN CONFRONTED TO THIS SHRI ANIL BANSAL AND SHRI SUNIL BANSAL HAVE ADMITTED TO PAYMENT OF RS.5.00 CRORES IN CASH TO DR. ASHOK GUPT A, DR. GOPAL BATNI AND DR. NEERAJ KUMAR. EVEN THE DIRECTORS OF AYUSHM AN DIAGNOSTICS PVT. LTD DR. ASHOK GUPTA, DR. GOPAL BATNI AND DR. NEERAJ KUMAR ADMITTED TO ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 58 HAVE RECEIVED THE ADVANCE IN CASH FROM BANSAL GROUP AND STATED THAT IT WAS THEIR UNDISCLOSED INCOME APART FROM REGULAR INC OME. THE DETAILS OF SUCH UNDISCLOSED INCOME IS AS UNDER: DR. GOPAL BATNI - RS. 1,40,00,000/- DR. NEERAJ KUMAR - RS. 1,45,00,000/- DR. ASHOK GUPTA - RS. 2,15,00,000/- TOTAL - RS. 5,00,00,000/- DURING THE COURSE OF ASSESSMENT PROCEEDINGS DR. GOP AL BATNI & DR. NEERAJ KUMAR ACCEPTED AS UNDER: S.NO. NAME OF THE DIRECTOR A.YS & PERIOD AMOUNT 1 DR. GOPAL BATNI A.Y. 2011-12 (25/10/2010 TO 31/12/2010) A.Y. 2012-13 (APRIL &MAY 2011) RS. 90,00,000/- RS. 50,00,000/- 2 DR. NEERAJ KUMAR A.Y. 2011-12 (25/10/2010 TO 31/12/2010) A.Y. 2012-13 (APRIL &MAY 2011) RS. 90,00,000/- RS. 55,00,000/- THE ABOVE DETAILS SHOW THAT DR. GOPAL BATNI AND DR. NEERAJ KUMAR HAVE ACCEPTED TO HAVE RECEIVED AN AMOUNT TOTALING TO RS . I.8 CRORES FOR A.Y. 2011-12 AND RS 1.05 CRORES FOR A.Y 2012 -13 RESPE CTIVELY. THEREFORE, BALANCE AMOUNT OF RS 40,00,000/- FOR AY 2011-12 AND RS.1.75 CRORES FOR AY 2012-13 HAVE BEEN RECEIVED BY DR. ASHOK GUPTA. 'IHE ABOVE VERSION HAS ALSO BEEN CORROBORATED BY THE STATEMENT RECO RDED U/S 132(4) ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 59 DURING SEARCH. THE SAID AMOUNT TOTALING TO RS. 2.15 CRORES WAS ALSO VOLUNTARILY DISCLOSED U/S 132(4). L1OWEVER, NO TA X HAVE BEEN PAID ON THE SAID AMOUNT. 8.2 IN VIEW OF THE ABOVE, THE SUBMISSION OF THE AP PELLANT THAT THE ENTIRE AMOUNT OF RS 2.15 CRORES HAS BEEN RECEIVED IN AY 2012-13 IS NOT ACCEPTABLE. THE ADDITION OF RS. 40,00,000/- FOR AY 2011-12 AND RS 1.75 CRORES .FOR AY 2012-13 HAVE BEEN MADE ON THE BASIS OF LOOSE P APER FOUND AND SEIZED FROM THE RESIDENTIAL AND BUSINESS PREMISES OF THE DIRECTORS OF AYUSHMAN DIAGNOSTIC PVT. LTD (SELLERS) AND FROM T HE BUSINESS PREMISES OF BANSAL GROUP. THE STATEMENTS RECORDED DURING THE COURSE OF SEARC H SHOW THAT THE ABOVE FACTS HAVE BEEN ADMITTED BY THE DIRECTORS OF AYUSH MAN DIAGNOSTIC PVT. LTD AND ALSO BY SHRI ANIL BANSAL. WHEN THE BALANCE AMO UNT OF RS.5.00 CRORES HAVE BEEN PAID TO THE TWO DIRECTORS DR. GOPAL BATN I AND DR. NEEERAJ KUMAR DURING A.Y 2011-12 AND 2012-13, THE PLEA OF THE APPELLANT IS NOT CONVINCING THAT HE WOULD HAVE RECEIVED HIS SHARE O F RS 2.15 CRORES IN A.Y 2012-13 ONLY. WHEN THE TWO OTHER DIRECTORS AS STAT ED ABOVE HAVE ADMITTED HAVE RECEIVED THEIR RESPECTIVE SHARES' DURING A.Y 2011-12 & 2012-13 THE THIRD DIRECTOR DR. ASHOK GUPTA, THE APPELLANT WOUL D HAVE RECEIVED HIS ENTIRE SHARE O( RS. 2. I5 CRORES ONLY IN A.Y 2012- 13 IS NOT CONVINCING. 8.3 THE A.O HAS GIVEN CLEAR CUT FINDING IN THE ASS ESSMENT ORDER AS TO THE BIFURCATION OF PAYMENTS MADE TO THE DIRECTORS. TH E APPELLANT HAS SIMPLY RETRACTED FROM THE DISCLOSURE MADE U/S 132(4). TH E UNCONTROVERTED FACT REMAINS THAT THE APPELLANT ASSESSEE COULD NOT EXPL AIN THE AVAILABILITY OF RS. 50,00,000/- FOR AY 2011-12, RS. 1,75,00,000/- & RS. 1,85,00,000/- FOR A.Y. 2012-13 WITH HIM. THE APPELLANT OWNED UP HAVING RECEIVED THE SAID MONEY IN STATEMENT MADE U/S 132(4) AT THE TIM E OF SEARCH. HIS SUBSEQUENT ATTEMPT TO EXPLAIN THE ABOVE MONEY BY W AY OF ADVANCE ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 60 RECEIVED FROM BANSAL GROUP HAS FAILED AND FOUND TO BE UNTENABLE. IT IS CLEAR THAT THE APPELLANT WAS IN RECEIPT OF RS. 40, 00,000/- FOR A.Y 2011-12, RS. 1,75,00,000/- FOR A.Y 2012-13 &RS. 1,85,00,000 /- BEING THE BALANCE PAYMENT FOR A.Y 2012-13 FROM BANSAL GROUP WHICH WA S NOT DISCLOSED BY HIM. THE ASSESSEE HAVING OWNED CASH RECEIPT AT TH E TIME OF SEARCH IN HIS STATEMENT U/S 132(4) LATER RETRACTION WITHOUT ANY BACKING SUPPORTED BY EVIDENCE IS OF NO AVAIL. 8.4 IN THE CASE DHUNJIBHOY STUD & AGRICULTURAL FARM VS DCIT ITAT, PUNE THIRD MEMBER BENCH (2002) 21 CCH 0059 PUNE TRIB; (2 002) 76 TTJ 0339 (TM) IT HAS BEEN HELD: .. T HAD MADE A CONFESSIONAL STATEMENT BEFORE THE SEARCH PARTY OF THE DEPARTMENT, WHO WERE NOT POLICE OFFICERS. THER EFORE, THE ADMISSION MADE BY HIM OF SEARCH WAS ADMISSIBLE AGA INST THE ASSESSEE. LOOKING TO THE ASPECT OF THE MATTER FROM ANOTHER ANGLE, T WAS A FAMOUS DOCTOR. WHILE MAKING A STATEMENT, IT WAS NOT EXPECTED OF A PERSON HIGHLY EDUCATED AND HIGHLY PL ACED IN THE SOCIETY TO MAKE A STATEMENT WITHOUT REALISING ITS IMPLICATIONS. IT WAS ALSO FOUND THAT THERE WAS NO ALLEGATION OF COER CION OR PRESSURE FOR MAKING A STATEMENT BY HIM AT THE TIME OF SEARCH AND THIS ALLEGATION HAD ALSO NOT BEEN MADE BEFORE THE ASSESS ING OFFICER. THE APPELLANT ASSESSEE IS HIGHLY EDUCATED AND HI GHLY PLACED IN SOCIETY. ONCE THE APPELLANT ASSESSEE HAS ACCEPTED RECEIPT OF MONEY AT THE TIME OF SEARCH AND THE RETRACTION IS NOT BASED UPON SOUND R EASONING AND CORROBORATIVE EVIDENCE, MERE DENIAL IS NOT ENOUGH. IN RETRACTION OF SURRENDER BURDEN OF PROOF IS ON THE PERSON RETRACTI NG AND HENCE, THE ONUS IS ON HIM AND NOT ON THE DEPARTMENT. IN VIEW OF THE ABOVE, THE SUBMISSION OF THE APPELLA NT THAT THE ENTIRE AMOUNT OF RS. 2.15 CRORES HAVING BEEN RECEIVED IN A .Y. 2012-13 IS NOT ACCEPTABLE AND THE STAND TAKEN BY A.O TO HOLD THE D ISCLOSURE MADE BY THE APPELLANT ASSESSEE AS BONA FIDE AND ADDITION OF RS. 40,00,000/- IN A.Y. 2011-12 AND RS. 1,75,00,000/- & RS. 1,85,00,000/- I N A.Y 2012-13 ARE CONFIRMED. 74. AGGRIEVED ASSESSEE IS NOW IN APPEAL BEFORE THE TRI BUNAL. ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 61 75. LD. COUNSEL FOR THE ASSESSEE MADE FOLLOWING WRITTE N SUBMISSIONS:- THE ABOVE ASSESSEES WITH DR. GOPAL PATNI JOINTLY ES TABLISHED THE HOSPITAL IN THE NAME OF M/S AYUSHMAN MEDICAL DIAGNOSTIC PRIVATE LIMITED (HEREINAFTER CALLED 'AYUSHMAN') IN THE YEAR 1995. D R. ASHOK GUPTA, DR. GOPAL BATNI AND DR. NEERAJ KUMAR ARE THE DIRECTORS OF THE COMPANY DRAWING THE SALARY. REGULAR RETURNS ARE BEING FILED EVERY YEAR. THE RETURNS FOR AY 2011-12 WERE YET TO BE FILED BEFORE THE DATE OF THE SEARCH, SINCE THE DUE DATE WAS 31.7.2011. 2. A SEARCH WAS CONDUCTED ON BANSAL GROUP OF BUSIN ESS AND SIMULTANEOUSLY ON AYUSHMAN AND ALSO THE RESIDENTIAL PREMISES OF THE THREE DOCTORS ON 2.6.2011. SOME LOOSE PAPERS WERE S EIZED. IN RESPONSE TO NOTICES U/S. 153A OF THE LT. ACT, THE RETURNS OF IN COME IN THE RESPECTIVE CASES HAVE BEEN FILED. DURING THE COURSE OF THE SE ARCH, THE RESPECTIVE ASSESSEES DECLARED THAT HE HAS RECEIVED A SPECIFIC AMOUNT IN CASH AS AN ADVANCE AGAINST THE SALE CONSIDERATION OF THE SHARE S IN THE HOSPITAL FROM BANSAL GROUP, AND THIS AMOUNT IS OFFERED AS INCOME. HOWEVER, THE AMOUNT WAS NOT DECLARED IN THE RETURNS FOR THE A. Y . 2011-12 AND 2012- 13, BUT THE SAME WAS OFFERED FOR THE A. Y. 2013-14. 3. FOR THE PURPOSES OF EXPANSION, M/S AYUSHMAN ENTERED INTO AN AGREEMENT WITH WOCKHARDT HOSPITALS LIMITED, MUMBAI ON 7.10.2006 WHEREIN IT WAS AGREED THAT WOCKHARDT WOULD CONDUCT, MANAGE AND OPERATE THE HOSPITAL OWNED BY AYUSHMAN. THE INITIAL PERIOD AS PER CLAUSE 4 WAS FOR TEN YEARS WHICH WAS RENEWABLE. AN ADVANCE OF RS.50 LACS WAS GIVEN BY WOCKHARDT DURING THE FINANCIAL Y EAR 2006-07. IT WAS FURTHER AGREED AS PER CLAUSE 5(A)(R) AND 5(A)(S) TH AT AYUSHMAN SHALL CONSTRUCT THE ADDITIONAL BUILT UP AREA OF 25000 SQ. FT. IN CLAUSE 6, IT IS ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 62 STIPULATED THAT AYUSHMAN WILL COMPLETE THE ENTIRE C IVIL CONSTRUCTION WORK BEFORE THE EFFECTIVE DATE. IT WAS FURTHER AGRE ED IN CLAUSE 5(B)(H) THAT WOCKHARDT WOULD INITIALLY INVEST ABOUT RS.1200 LACS ON EQUIPMENTS, UTILITIES, ETC AND CONTINUE TO MAKE CAPITAL INVESTM ENT ON A REGULAR AND NEED BASED BASIS. AYUSHMAN INITIALLY INVESTED ABOUT RS.8.17 CRORES DURING THE FY 2007-08 AND 2008-09 FOR CONSTRUCTION OF BUILDING AND ACQUISITION OF EQUIPMENTS AND PLANTS. AYUSHMAN ACQU IRED HUGE LOANS FROM THE BANKS AND MPFC OF APPROXIMATELY RS.7 CRORE S FOR THE SAID INVESTMENTS. WOCKHARDT INITIALLY INVESTED ABOUT RS. 4 CRORES BUT SUBSEQUENTLY, IT BACKED OUT FOR ANY FURTHER INVESTM ENTS BECAUSE OF THEIR FINANCIAL CONSTRAINTS AND MARKETABILITY. DURING THI S PERIOD WOCKHARDT SOLD NEARLY TEN HOSPITALS WHICH WERE RUN BY THEM. M /S AYUSHMAN REQUESTED WOCKHARDT AND TRIED TO PERSUADE THEM TO T AKEOVER THE MANAGEMENT AND FURTHER INVEST THE MONEY BUT M/S WOC KHARDT CONTINUOUSLY AVOIDED FOR MAKING ANY INVESTMENTS. SI NCE M/S AYUSHMAN HAD OBTAINED A HUGE LOAN, IT WAS VERY DIFFICULT TO MANAGE THE HOSPITAL WITH THE INTEREST BURDEN THEREON AND THE RESPONSIBI LITY OF REPAYING THE LOAN. UP TO 31 ST OF MARCH 2011 THE LIABILITY FOR P AYING INTEREST ROSE UP TO 246 LACS AND OTHER EXPENSES CAPITALIZED WERE UP TO 100 LACS. BECAUSE OF FINANCIAL STRINGENCY THE HOSPITAL WAS PRACTICALLY C LOSED IN THE BEGINNING OF THE YEAR 2010. M/S WOCKHARDT WANTED TO MODIFY TH E ORIGINAL AGREEMENT AND ENTER INTO A FRESH AGREEMENT BUT THE PARTIES COULD NOT COME TO THE CONSENSUS ON ANY OF THE TERMS. ON ACCOU NT OF DISTRESS CONDITION, M/S AYUSHMAN DECIDED TO TRANSFER THE MAN AGEMENT AND ACCORDINGLY ENTERED INTO AN MOU WITH BANSAL GROUP O F BUSINESS. THE MOU DATED 24.10.2010 CLEARLY PROVIDED THAT THE PAYM ENT TO THE ERSTWHILE DIRECTORS (SELLERS) WOULD BE OF RS.13.50 CRORES AGAINST THE SALE OF SHARES. WHEN THE NEWS OF TRANSFER OF THE HOSPITA L CAME OUT IN THE MARKET M/S WOCKHARDT FILED A PETITION BEFORE THE AD DITIONAL DISTRICT JUDGE, BHOPAL FOR INJUNCTION WHICH WAS DISMISSED VI DE ORDER DATED 14.2.2011. AGAINST THIS ORDER, A PETITION WAS FILED BY WOCKHARDT IN THE ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 63 HIGH COURT OF MADHYA PRADESH FOR CANCELLING THE ORD ER OF THE DISTRICT JUDGE AND MAINTAINING THE STATUS QUO IN THE MATTER. THE HON'BLE HIGH COURT VIDE ORDER DATED 28.6.2011 APPOINTED AN ARBIT RATOR SHRI A.K. MISHRA TO RESOLVE THE DISPUTES. SUBSEQUENTLY, SHRI VIKAS JAIN WAS APPOINTED AS THE SOLE ARBITRATOR. THIS DISPUTE WAS RESOLVED BY THE ARBITRATOR ON 13.2.2012. IN THE MEANTIME, THE DIREC TORS OF AYUSHMAN RECEIVED THE PAYMENT THROUGH THREE CHEQUES TOTALING TO RS.1 CRORE. RS. 50 LACS IN THE NAME OF ASHOK GUPTA, RS.25 LACS IN T HE NAME OF GOPAL BATNI AND RS.25 LACS IN THE NAME OF NEERAJ KUMAR. S INCE THE PETITION WAS FILED IN THE HIGH COURT BY WOCKHARDT, THE ASSES SEE WANTED TO SAFEGUARD ITS INTEREST AND INSISTED FOR A FURTHER P AYMENT. THE THREE DIRECTORS RECEIVED IN CASH THE PAYMENT OF RS.5 CROR ES. DR. ASHOK GUPTA RECEIVED RS.2.15 CRORES, DR. GOPAL BATNI RECEIVED R S.1.40 CRORES AND DR. NEERAJ KUMAR RECEIVED RS.1.45 CRORES. SUBSEQUENTLY, AFTER THE ARBITRATION AWARD, THE THREE DIRECTORS RECEIVED THE BALANCE PAYMENT BY CHEQUES. THE TOTAL CONSIDERATION RECEIVED IS RS.12,28,37,8501-. THE TOTAL CONSIDERATION RECEIVABLE WAS RS. 13.5 CRORES. HOWEVER, FOR SOME BANK LIABILITIES AND INTEREST, APPROXIMATELY, RS.1. 21 CRORES WAS DEDUCTED FROM THE FINAL PAYMENT. THE SHARES WERE TRANSFERRED AFTER THE RECEIPT OF THE ARBITRATION AWARD AND RECEIPT OF FULL PAYMEN T. HERE, IT MAY BE NOTED THAT AFTER THE ARBITRATION AWARD, ALL PAYMENT S WERE RECEIVED THROUGH CHEQUES. THE CHRONOLOGICAL DATES OF EVENT ARE GIVE HERE UNDE R: CHRONOLOGICAL ORDER DATES I. 07/1 0/2006 - AGREEMENT WITH WOCKHARDT FOR MANAGEMENT FOR 10 YEA RS WITH THEIR INVESTMENT OFRS.12 CRORES (PARA 6 PG.47 OF PB). II. THE ASSESSEE INVESTED IN BUILDING ABOUT 3.87CRO RES FROM 01/04/2007 TO 31/03/2008 (PG.140 OF PB) AND RS. 8.18 CRORES UP TO 31/03/2009 (PG.155 OF PB). ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 64 III. THE ASSESSEE RAISED LOANS FOR CONSTRUCTION OF BUILDING AND THE POSITION OF LOANS ARE 96.50 LAKHS ON 31/03/2007; RS. 475 LAKHS ON 31/03/2008 (PG. 137 OF PB) AND RS. 924 LAKHS ON 31/03/2009 (PG. 152 OF PB). IV. THE PROFIT FOR THE 5 FINANCIAL YEARS AND INTERE ST CAPITALIZED IS AS UNDER 2006-07 2007-08 2008 -09 2009 -10 2010-11 PROFIT 16.3OLAKHS 22.491AKHS 26.531AKHS 30.821AKHS 5.741AKHS LOSS PG.124 PG.138 PG.153 PG.174 PG.190 INTEREST 10.891AKHS 76.731AKHS 1591AKHS 2461AKHS CAPITALIZED - PG.143 PG. 158 PG.178 PG. 195 V. 24/10/2010 - MEMORANDUM OF UNDERSTANDING WITH BANSAL GROUP REGARDING TRANSFER OF SHARES FOR A TOTAL CONSIDERAT ION OF RS. 13.5 CRORES. TOTAL AMOUNT OF TAKEOVER INCLUDING LIABILITIES IS R S. 26.75 CRORES. (PG. 1 OF PB) VI. 01/12/2010 - THE WORKING OF THE HOSPITAL WAS PRACTICALLY STOPPED BECAUSE OF FINANCIAL CONSTRAIN, RENOVATION OF BUIL DING AND FOR CHANGING THE MANAGEMENT.( PG. 190 & 2010 OF PB) VII. 03/01/2011 - THE WOCKHARDT FILED PETITION FOR POSSESSION OF PROPERTY AND INJUNCTION BEFORE THE DISTRICT JUDGE. VIII 14/02/2011 - THE PETITION OF WOCKHARDT WAS DISMISSED BY THE DISTRICT JUDGE. (PG. 76 OF PB). IX. 07/03/2011 - WOCKHARDT FILED THE APPEAL BEFORE THE HON'BLE HIGH COURT FOR ARBITRATION. (PG. 86 OF PB). X. 28/06/2011 - THE HON'BLE HIGH COURT APPOINTED ARBITRATOR (PG. 1 04 ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 65 OF PB) AND SUBSEQUENTLY CHANGED THE ARBITRATOR (PG. 109 0F PB). XI. 08/02/2012 - THE CONSENT ARBITRATION AWARD (PG. 114 OF PB) XII 1 4/08/2012 - REGISTRATION OF TRANSFER OF SHARES (PG.33 OF PB) 4. WHILE FRAMING THE ASSESSMENT THE LD. AO OBSERVED THAT THE DIRECTORS HAVE ADMITTED THE RECEIPT OF CASH OF RS.5 CRORES AND DECLARED IT AS UNDISCLOSED INCOME. THE LOOSE PAPERS WERE FOUND IN THE OFFICE PREMISES OF BANSAL GROUP ABOUT PAYMENT OF CASH OF R S.5 CRORES. HE, THEREFORE, CONCLUDED THAT THIS IS AN UNDISCLOSED IN COME OF THE ASSESSEE. THE LD. AO HAS HYPOTHETICALLY ON SURMISES AND CONJE CTURES ARRIVED AT THE CONCLUSION THAT THE MOU FOR SALE OF SHARES MENT IONS THE TOTAL CONSIDERATION OFRS.13.5 CRORES AND AS SUCH, THE BAL ANCE MUST HAVE BEEN RECEIVED BY THE DIRECTORS. ON THIS ASSUMPTION, THE LD. AO FURTHER INCLUDED AN AMOUNT OF RS.7.5 CRORES (13.5CRORES - 6 CRORES) AS INCOME OF THE THREE DIRECTORS. HE, ACCORDINGLY, INCLUDED RS.1 .85 CRORES IN THE HANDS OF ASHOK GUPTA, RS.2.80 CRORES IN THE HANDS O F NEERAJ KUMAR AND RS.2.85 CRORES IN THE HANDS OF GOPAL BATNI. ALL THE SE NOTIONAL AMOUNTS HAVE BEEN INCLUDED AS UNDISCLOSED INCOME FOR THE AY 2012-13. IN THE CASE OF SHRI ASHOK GUPTA, HE HAS BIFURCATED THE AMO UNT IN TWO YEARS, RSAO LACS FOR AY 2011- 12 AND THE BALANCE FOR THE A Y 2012-13. THE LD. AO AT PAGE 34 PARA 20.8(V) OBSERVED AS UNDER: REGARDING THE MOU DATED 24/10/2010 IT CAN BEEN SEE N THAT THE AMOUNT OF RS. 7,50,00,000/- IS RECEIVABLE IN THE H ANDS OF DR. GOPAL BATNI, DR. NEERAJ KUMAR & DR. ASHOK GUPTA TILL THE DATE OF SEARCH AND THE SHARE OF THE ASSESSEE IS RS. 1,85,0 0,000/-. HOWEVER, THE ASSESSEE HAS NOT FILED ANY SATISFACTO RY EXPLANATION, WHY THE ABOVE AMOUNT HAS NOT BEEN SHOWN IN THE BOO KS OF ACCOUNTS. AS PER MOU DATED 24/10/2010 ALL AMOUNT OF RS. 26,75,00,000/- IS PAID BY BANSAL GROUP TO DR. GOPA L BATNI, DR. ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 66 NEERAJ KUMAR & DR. ASHOK GUPTA. THEREFORE RS. 1,85,00,000/- IS REQUIRED TO BE ADDED IN THE HANDS OF THE ASSESSEE FOR A.Y. 2012-13. HE THEREFORE MADE ADDITION ON THE HYPOTHETICAL GROU ND THAT THE ASSESSEE HAS RECEIVED THIS AMOUNT. IN APPEAL, THE LD. CIT(A) HAS MERELY REPEATED THE C ONCLUSIONS OF THE LD. AO AND WITHOUT APPRECIATING THE ARGUMENTS ADVANCED HAS SUMMARILY DISMISSED THE APPEALS. THE LD. CIT(A) MERELY STATED THAT THE APPELLANT HAS SIMPLY RETRACTED FROM THE DISCLOSURE BUT THE FA CT REMAINS THAT THE ASSESSEE HAS RECEIVED THESE MONIES IN CASH AND AS S UCH IT IS TAXABLE. ARGUMENTS IT IS HUMBLY SUBMITTED THAT THE ADDITIONS MADE BY T HE LD. AO ON HYPOTHETICAL GROUNDS AND ON PURE SURMISES ARE TOTAL LY ILLEGAL AND BAD IN LAW. THE MOU CLEARLY DEMONSTRATES THAT AN AMOUNT OF RS.13.5 CRORES WOULD BE PAID AS A CONSIDERATION AGAINST THE SALE O F SHARES. THE SAID AMOUNT HAS BEEN OFFERED AS A CAPITAL GAIN IN THE RE SPECTIVE HANDS OF THE DIRECTORS WHEN THE SHARES WERE ACTUALLY TRANSFERRED III THE NAME OF THE BANSAL GROUP. IN THE STATEMENTS RECORDED U/ S 13 2( 4), ALL THE DIRECTORS HAVE CLEARLY STATED THAT THE AMOUNTS HAVE BEEN RECE IVED IN ADVANCE AS A SALE CONSIDERATION. UNDER NO CIRCUMSTANCES THE ADVA NCE RECEIVED CAN BE TAXED. THE SAID AMOUNT IS ALREADY OFFERED AND HAS B EEN TAXED FOR AY 2013-14 WHEN THE SHARES WERE ACTUALLY TRANSFERRED. IT IS A FACT THAT DURING THE COURSE OF THE STATEMENT THE ASSESSEE CLE ARLY STATED THAT IT IS AN ADVANCE RECEIVED AGAINST THE SALE OF SHARES, AND THEY ARE DECLARING IT AS UNDISCLOSED INCOME. THE WORD 'UNDISCLOSED' WAS N OT CORRECT. THE DIRECTORS MEANT THAT IT IS AN 'UNDECLARED' INCOME A ND WOULD BE DISCLOSED AS INCOME AND ACCORDINGLY AFTER THE TRANSFER OF SHA RES THE CONSIDERATION HAS BEEN SHOWN AS CAPITAL GAINS AND HAS ALSO BEEN T AXED TREATING THE AMOUNT AS A CONSIDERATION RECEIVED AGAINST THE SALE OF SHARES. THUS, IT IS ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 67 SUBMITTED THAT IT WOULD AMOUNT TO A DOUBLE TAXATION ONCE IN THE YEAR IN WHICH THE ADVANCE IS RECEIVED AND SECONDLY IN THE Y EAR IN WHICH THE SHARES ARE TRANSFERRED. THE MOOT POINTS FOR CONSIDE RATIONS ARE AS UNDER. (I) THE ADDITIONS NAVE BEEN MADE ON THE BASIS OF L OOSE PAPER IN THE SHAPE OF MOU. IF THIS PAPER IS ANALYZED THEN IT WO ULD BE SEEN THAT THE CONSIDERATION IS PAID AGAINST THE SALE OF SHAR ES. THUS, THE TAXABILITY WOULD ARISE ONLY ON THE TRANSFER OF TH E SHARES. THE SHARES ARE TRANSFERRED IN THE A.Y. 2013-14 AND THE GAINS HAVE BEEN OFFERED AND TAXED IN THAT YEAR. (II) IN THE STATEMENTS RECORDED U/ S 132(4), ALL THE DIRECTORS HAVE CLEARLY STATED THAT THE AMOUNTS HAVE BEEN RECEI VED IN ADVANCE AS A SALE CONSIDERATION. UNDER NO CIRCUMSTANCES THE ADVANCE RECEIVED CAN BE TAXED. THE TAXABILITY WILL ARISE ONLY ON THE TRANSFER OF THE SHARES WHICH WAS DONE IN THE A.Y. 2013-14. (III) THE INCOME ARISING FROM THE TRANSFER OF T HE SHARES HAS BEEN OFFERED IN THE A. Y. 2013-14. TAXING THE ADVANCE IN THE A.Y. 2011-12 AND 2012-13 WOULD AMOUNT TO A DOUBLE TAXATION OF SAME INCOME, WHICH IS NOT PERMITTED UNDER THE LAW. (IV) THE PAYER OF THE AMOUNT OF RS, 5 CRORES HA VE ADMITTED THIS AMOUNT AS THEIR INCOME AND HAVE OFFERED THE SAME IN TH E RETURN AND HAVE PAID TAXES ON THE SAME. THUS, THE AMOUNT RECEIV ED HAS ALREADY BEEN SUBJECTED TO TAX WHICH CANNOT BE ADDED AS INCOME IN THE HANDS OF THE ASSESSEE. A CERTIFICATE FROM THE PA YERS IS NOW ATTACHED AND PLACED AT PAGE 255. THIS CERTIFIC ATE IS A STATEMENT OF FACT FROM THE RECORDS. IT IS HUMBLY PRAYED TH AT THE SAME MAY KINDLY BE CONSIDER WHILE PASSING THE ORDER. (V) THE PAPERS ALL ARE DISCLOSED TO THE VARIOUS COURTS AND HAS BEEN ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 68 ADHERED TO AND AS SUCH NO ADVERSE VIEW CAN BE TAKEN SINCE IT IS NOT AN INCRIMINATING DOCUMENT. IN VIEW OF THIS, IT IS HUMBLY PRAYED THAT THE ADDIT IONS MADE BY THE LD. AO AND SUSTAINED BY THE LD. CIT(A) ARE BAD IN L AW AND DESERVES TO BE DELETED. 76. LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THA T :- THIS ADDITION HAS BEEN MADE AS PER PARA NO. 20.9 (P G. NO. 28-35) OF THE ASSESSMENT ORDER AND IS ON ACCOUNT OF CASH RECEIVED BY THE ASSESSEE AS ADVANCE FROM BANSAL GROUP AGAINST THE SALE OF 71135 NOS. EQUITY SHARES HELD BY THE ASSESSEE IN AMDPL. IT IS SUBMITTED THAT DURING THE COURSE OF SEARCH A MOU DATED 24-10-2010 WAS FOUND AND SEIZED FROM THE OFFICE PREMISES OF AMDPL SITUATED AT HIG-3, LAKE VIEW APAR TMENT, SHAHPURA, BHOPAL. THIS MOU WAS COMPILED BY THE DEPARTMENT AS PG. NO. 30 OF LPS-6 AN D COPY OF WHICH IS AVAILABLE ON PG, NO, 29 OF THE A SSESSMENT ORDER. IT WAS SUBMITTED BY THE ASSESSEE BEFORE THE AO THAT THIS PAPER IS MOU REACHED BETWEEN THE DIRECTORS OF AMDPL AND THE REPRESENTATIVES OF BANSAL GROUP REGARDING TRANSFER OF 100 EQUITY SHARES OF AM DPL. THIS MOU REFERS TO THE GROSS CONSIDERATION OF RS.26.75 C RORES FROM WHICH THE LIABILITIES OF THE SAID COMPANY WERE TO BE ADJUSTED . IN CONSEQUENCE OF THIS MOU, THE SHARE PURCHASE AGREEMENT WAS LATER EXECUTED ON 13-08- 2012 AND THE EQUITY SHARES WERE FINALLY TRANSFERRED TO THE BANSAL GROUP ON 14-08-2012. COPY OF SHARE PURCHASE AGREEME NT DATED 13-08- 2012 WAS PLACED BY THE ASSESSEE ON RECORD OF THE LE ARNED AD. THIS SHARE PURCHASE AGREEMENT REFERS TO THE MOU DATED 24-10-20 10 AND ACCORDINGLY THE SHAREHOLDERS OF AMOPL RECEIVED FOLL OWING AMOUNTS AGAINST THE TRANSFER OF THEIR SHARES TO THE BANSAL GROUP: NAME O0F SHAREHOLDER NO. OF SHARES HELD AMOUNT RECEIVED DR. ASHOK GUPTA 71135 4,05,46,950 ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 69 MRS. ALKA GUPTA (W/O DR. ASHOK GUPTA) 700 3,99,000 DR. GOPAL BATN I 71835 4,09,45,950 DR. NIRAJ KUMAR 70640 4,02,64,800 MRS. CHARU KUMAR (W/O DR. NIRAJ KUMAR) 1195 6,81,150 TOTAL 215505 12.28,37,850 THE AMOUNT OF RS.12,28,37,850/- WAS RECEIVED BY THE SHAREHOLDERS AS UNDER: DR. ASHOK GUPTA S.NO. PARTICULARS AMOUNT (RS.) , A. CHQ NO.851465 DATED 15 - 11 - 2010 OF UCO. BANK 50,00,000 . B. CASH RECEIVED IN APRIL AND MAY, 2011 2,15,00,000 T C. CHQ NO.870089 DATED 01 - 05 - 2012 OF UCO BANK 50,00,000 D. CHQ NO.870189 DATED 24 - 05 - 2012 OF UCO BANK 50,00,000 E. CHQ NO.871131 DATED 27 - 06 - 2012 OF UCO BANK 30,00,000 F. CHQ NO.863612 DATED 13 - 08 - 2012 OF UCO BANK 10,46,950 TOTAL 4,05,46,950 MRS. ALKA GUPTA S.NO. PARTICULARS AMOUNT (RS.) A. CHQ NO.863613 DATED 13 - 08 - 2012 OF UCO BANK 3,99,000 ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 70 TOTAL 3,99,OOO DR. GOPTAL BATNI S.NO PARTICULARS AMOUNT A CHQ NO. 852253 DATED OF UCO BANK 25,00,000 B CASH RECEIVED FROM 25.10.2010 TO 31.12.2010 90,00,000 C CASH RECEIVED IN APRIL AND MAY 2011 50,00,000 D CHQ N O.8070088 DATED 01.05.2012 OF UCO BANK 75,00,000 E CHQ NO.870132 DATED 11.05.2012 OF UCO BANK 50,00,000 F CHQ NO.871133 DATED 27.06.2012 OF UCO BANK 30,00,000 G CHQ NO.863608 DATED 13.08.2012 OF UCO BANK 25,00,000 H CHQ NO.863609 DATED 13.08.2012 OF UC O BANK 25,00,000 I CHQ NO.863610 DATED 13.08.2012 OF UCO BANK 25,00,000 J CHQ NO.863611 DATED 13.08.2012 OF UCO BANK 14,45,950 TOTAL 4,09,45,950 DR. NIRAJ KUMAR S.NO PARTICULARS AMOUNT A CHQ NO.852254 DATED 01.12.2010 TO UCO BANK 25,00,000 B CASH R ECEIVED FROM 25.10.2010 TO 31.03.2011 90,00,000 C CASH RECEIVED IN APRIL AND MAY 2011 55,00,000 D CHQ NO.870087 DATED 30.04.2012 OF UCO BANK 75,00,000 E CHQ NO.870131 DATED 11.05.2012 OF UCO BANK 50,00,000 F CHQ NO.869612 DATED 11.06.2012 OF UCO BANK 35,00,000 G CHQ NO.871132 DATED 27.06.2012 OF UCO BANK 30,00,000 H CHQ NO.863606 ATED 13.08.2012 OF UCO BANK 20,00,000 I CHQ NO.863607 DATED 13.08.2012 OF UCO BANK 20,64,800 J CHQ NO.863615 DATEDF 13.08.2012 OF UCO BANK 2,00,000 TOTAL 4,02,64,800 SMT . CHARU KUMAR S.NO. PARTICULARS AMOUNT ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 71 (RS.) A CHQ NO.863614 DATED 13.08.2012 OF UCO BANK 6,81,150 TOTAL 6,81,150 IT MAY BE SEEN THAT PURSUANT TO THE MOU DATED 24.10 .2010 AND THE SUBSEQUENT SHARE PURCHASE AGREEMENT DATED 13.08.201 2 THE SHAREHOLDERS RECEIVED FOLLOWING AMOUNTS IN CASH DR. ASHOK GUPTA RS.2,15,00,000 DR. GOPAL BATNI RS.1,40,00,000 DR. NIRAJ KUMAR RS.1,45,00,000 TOTAL RS.5,00,00,000 DURING THE COURSE OF SEARCH DR. ASHOK GUPTA, DR. GO PAL BATNI AND DR. NIRAJ KUMAR ALL ACCEPTED HAVING RECEIVED THE AFORES AID AMOUNTS IN CASH FROM THE BANSAL GROUP AS ADVANCE AGAINST THE SALE O F THEIR RESPECTIVE SHAREHOLDING IN AMDPL. THE DEPARTMENT ALSO ACCEPTS THIS FACT AND THERE IS NO DISPUTE THAT THE CASH WAS RECEIVED AS ADVANCE AGAINST THE TRANSACTION FOR TRANSFER OF EQUITY SHARES IN AMDPL TO THE BANSAL GROUP MEMBERS. THE LEARNED AO ALSO DOES NOT DISPUTES THE FACT THAT OUT OF TOTAL RS.5 CRORES RECEIVED BY THE AFORESAID 3 PERSONS, TH E CASH AMOUNT RECEIVED BY THE ASSESSEE WAS RS.2,15,00,000/-. THE LEARNED AO HAS PRESUMED THAT OUT OF THE TOTAL AMOUNT OF RS.2,15,00 ,000/- DR. ASHOK GUPTA RECEIVED RS 4O,OO,OOO/- IN FY 2010-11 AND RS.-1,75,OO,OOO/- IN FY 2011-12. THE LEARNED AO HAS BASED HIS PRESUMPTI ON ON PG. NO. 3 & 4 OF LPS-4/2 SEIZED FROM THE BUSINESS PREMISES OF B ANSAL GROUP LOCATED AT 3 RD FLOOR, TAVA COMPLEX, BITTAN MARKET, BHOPAL. COPY O F THESE SEIZED DOCUMENTS WERE NOT PROVIDED TO THE ASSESSEE AND NO QUERY REGARDING THE SAME WAS PUT TO THE ASSESSEE FOR EXPLANATION. SCANN ED IMAGE OF THESE SEIZED PAPERS ARE AVAILABLE ON PG. NO. 32 OF THE AS SESSMENT ORDER. FROM THESE SCANNED IMAGE IT CAN BE SEEN THAT TOTAL RS.5 CRORES WERE PAID IN CASH BY THE BANSAL GROUP TO THE AFORESAID 3 DOCTORS BUT THE DATES OF ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 72 PAYMENT ARE NOT AVAILABLE ON THE SCANNED IMAGES. IT CANNOT FURTHER BE IDENTIFIED THAT WHICH PARTICULAR PAYMENT WAS MADE T O WHICH DOCTOR. THEREFORE THERE IS NO BASIS ON WHICH THE LEARNED AO COULD PRESUME THAT OUT OF RS.5 ORORES THE PAYMENT IN FY 2010-11 WAS RS.2:20 CRORES .AND IN 'F-Y- 2011-12 WAS RS.2.80 CRORES. EVEN THE BANSAL GROUP H AS NOT VERIFIED OR ADMITTED TO THIS PRESUMPTION MADE BY THE LEARNED AO. ON THE BASIS OF THE SAID PRESUMPTION AND ON THE BASIS OF ADMISSION MADE BY DR. GOPAL BATNI AND DR. NIRAJ KUMAR THAT THEY HAVE BOTH RECEI VED RS. 90 LAKHS EACH IN FY 2010-11 THE LEARNED AO CONCLUDED THAT OU T OF RS.215 LAKHS THE ASSESSEE MUST HAVE RECEIVED RS 40 LAKHS IN FY 2 010-11 AND RS.175 LAKHS IN FY 2011-12. THEREFORE THESE AMOUNTS HAVE B EEN ADDED TO THE INCOME OF THE APPELLANT (RS 4O LAKHS IN AY 2011-12 AND RS.175 LAKHS IN AY 2012- 13). BUT AS ALREADY SUBMITTED BY THE APPEL LANT THE ENTIRE CASH RECEIVED BY HIM WAS AN ADVANCE AGAINST THE PROPOSED SALE OF HIS EQUITY SHAREHOLDING IN AMOPL. EVEN THE LEARNED AO HAS ACCE PTED THAT THE CASH WAS AGAINST THE SALE OF EQUITY SHARES. SINCE NO TRA NSFER OF EQUITY SHARES WAS MADE BY THE ASSESSEE EITHER IN FY 2010-11 OR IN FY 2011-12 HENCE ALL AMOUNTS RECEIVED BY THE ASSESSEE FROM THE BANSA L GROUP EITHER IN CASH OR THROUGH CHEQUES BEFORE THE DATE OF TRANSFER OF EQUITY SHARES ON 14-08-2012 REMAINED AS ADVANCE. THE EQUITY SHARES H ELD BY THE ASSESSEE IN AMDPL HAVING FINALLY BEEN TRANSFERRED TO THE BANSAL GROUP ON 14-08-2012 THE ENTIRE CASH/CHEQUES RE CEIVED AS CONSIDERATION AGAINST SUCH TRANSFER WERE INCLUDABLE FOR COMPUTATION OF CAPITAL GAINS IN AY 2013-14. ANY AMOUNT RECEIVED AG AINST TRANSFER OF A CAPITAL ASSET IS NOT LIABLE FOR TAX BEFORE THE ACTUAL TRANSFER TAKES PLACE. AS ALREADY SUBMITTED, THE ASSESSEE HAS SHOWN THE CO MPUTATION OF CAPITAL GAINS ON TRANSFER OF HIS 71135 NOS. EQUITY SHARES FOR TOTAL CONSIDERATION OF RS.4,05,46,950/- IN AY 2013-14. THE ADDITION OF RS.40,00,OOO/-- AND RS.1,75,00,000/- IN THE RELEVANT YEAR IS THEREFORE TOTALLY UNJUSTIFIED AND MAY PLEASE BE DELETED. ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 73 SUBMISSION FOR GROUND 4 FOR A. Y 2012-13 (ADDITION OF RS.1,85,00,000/- ): THIS ADDITION HAS BEEN MADE AS PER PARA NO. 20.1 0 (PG. NO. 28-35) OF THE ASSESSMENT ORDER AND IS ON ACCOUNT OF CASH PRESUMABLY RECEIVABLE BY THE ASSESSEE FROM BANSAL GROUP AGAINST THE SALE OF 71135 NOS. EQUITY SHARES HELD BY THE ASSESSEE IN AMDPL. AS ALREADY SU BMITTED BY THE ASSESSEE IN GROUND NO. - 3 ABOVE THE TOTAL SALE CON SIDERATION OF 71135 NOS. EQUITY SHARES WAS RS.4,05,46,950/- OUT OF WHIC H ONLY RS.215 LAKHS HAD BEEN RECEIVED BY THE ASSESSEE IN CASH. THE REMA INING AMOUNT WAS RECEIVED THROUGH CHEQUES. NO AMOUNT OVER AND ABOVE THE SAID AMOUNT OF RS.4,05,46,950/- WAS EITHER RECEIVED OR WAS RECEIVA BLE. NO EVIDENCE TO SUPPORT THE PRESUMPTION MADE BY THE LEARNED AO WAS FOUND DURING THE COURSE OF SEARCH. THE LEARNED AA HAS PRESUMED THAT SINCE THE AMOUNT OF RS.5 CRORES HAD BEEN RECEIVED BY THE ASSESSEE, DR. GOPAL BATNI AND DR. NIRAJ KUMAR IN CASH THEREFORE THE REMAINING AMOUNT OF RS. 7.50 CRORES WAS ALSO RECEIVABLE BY THE SAID PERSONS IN CASH OUT OF WHICH THE SHARE OF THE APPELLANT WAS RS.185 LAKHS. ON THE BASIS OF SAI D PRESUMPTION THE LEARNED AO HAS MADE THE ADDITION OFRS.185 LAKHS IN THE INCOME OF THE APPELLANT FOR AY 2012-13. THE CHEQUE PAYMENTS RECEI VED AGAINST THE SALE OF EQUITY SHARES HAVE TOTALLY BEEN IGNORED. THIS AD DITION BEING ENTIRELY BASED ON PRESUMPTIONS AND SURMISES AND BEING DEVOID OF ANY EVIDENCE IS REQUESTED TO BE DELETED. ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 74 77. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE VEHEMEN TLY ARGUED SUPPORTED THE ORDERS OF BOTH THE LOWER AUTHO RITIES AND ALSO FILED WRITTEN SUBMISSION ON 14.10.2019 WHICH IS DRA FTED BOTH IN ENGLISH AND HINDI. THROUGH THIS WRITTEN SUBMISSION LD. DEPARTMENTAL REPRESENTATIVE CONTENDED THAT THE MEMO RANDUM OF UNDERSTANDING DATED 24.10.2010 FOUND DURING THE COU RSE OF SEARCH READS THAT THE ASSESSEE AND OTHER SHARE HOLDERS WIL L GET RS. 13.50 CRORES AFTER PAYING OFF ALL THE LIABILITIES STANDIN G IN THE BOOKS OF ASSESSMENT YEAR IN QUESTION. DURING THE COURSE OF SEARCH ALL THE DIRECTORS HAVE STATED TO HAVE RECEIVED TOTAL SUM OF RS. 5 CRORES IN CASH AS PART OF THE SALE CONSIDERATION WHICH IS INC LUDED IN THE NET CONSIDERATION OF RS. 13.50 CRORES. THIS SUM WAS PAR TIALLY RECEIVED IN ASSESSMENT YEAR 2011-12 AND PARTLY IN ASSESSMENT YEAR 2012- 13. THE AMOUNT RECEIVED IN CHEQUE AFTER THE DATE O F SEARCH IS ALSO NOT DISPUTED AND THEREFORE THEY HAVE BEEN RIGHTLY T AXED BY THE LD. A.O IN THE YEAR OF RECEIPT OF THE AMOUNT IN CASH/CH EQUE. HE THUS SUPPORTED THE FINDING OF LD. CIT(A). 78. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE RE CORDS BEFORE US AND CAREFULLY GONE THROUGH THE WRITTEN SU BMISSION FILED ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 75 BY BOTH THE PARTIES. THROUGH GROUND NO.3 FOR ASSES SMENT YEAR 2011-12 AND GROUND NO. 4 & 5 FOR ASSESSMENT YEAR 20 12-13 THE ASSESSEE NAMELY DR. ASHOK GUPTA HAS CHALLENGED THE FINDING OF LD. CIT(A) CONFIRMING THE ACTION OF LD. A.O MAKING ADDI TION ON ACCOUNT OF VOLUNTARY DISCLOSURE MADE U/S 132(4) OF THE ACT AND ALSO ON ACCOUNT OF AMOUNT RECEIVABLE DURING POST SEARCH PER IOD ON ACCOUNT OF THE DEAL STRUCK BETWEEN THE AYUSHMAN DIAGNOSTIC PVT. LTD (IN SHORT AMDPL) AND BANSAL GROUP THROUGH MR. ANIL BA NSAL. ADDITION IN SIMILAR FACTS AND CIRCUMSTANCES HAVE AL SO BEEN MADE IN THE HANDS OF OTHER DIRECTORS. IN THESE BUNCH OF A PPEALS WE ARE ALSO DEALING WITH THE APPEALS FILED BY DR. NEERAJ K UMAR WHICH WILL BE DEALT IN THE SUBSEQUENT PARAS AND OUR FINDING IN THE CASE OF DR. ASHOK GUPTA ON THIS COMMON ISSUE ON ADDITION ON ACC OUNT OF VOLUNTARY DISCLOSURE MADE U/S 132(4) AND THE AMOUNT RECEIVABLE ON ACCOUNT OF SALE OF SHARES SHALL BE APPLIED MUTANDIS MUTANDIS IN THE CASE OF DR. NEERAJ KUMAR ALSO FOR ASSESSMENT YEAR 2 011-12 AND 2012-13. 79. WE OBSERVE THAT THE ASSESSEE ALONG WITH D. GOPAL B ATNI ESTABLISHED THE HOSPITAL UNDER THE NAME OF M/S. AY USHMAN ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 76 DIAGNOSTIC PVT. LTD IN THE YEAR 1995. DR. NEERAJ K UMAR FURTHER JOINED THE COMPANY AND THREE WERE RUNNING THE COMPA NY UNDER THE ABOVE NAME. DURING FINANCIAL YEAR 2006-07 AMDPL EN TERED INTO AN AGREEMENT WITH WOCKHARDT HOSPITAL LTD, MUMBAI ( IN SHORT WHL), ON 10.07.2006. AS PER THE AGREEMENT AGAINST THE CONSIDERATION TO BE RECEIVED FROM WHL, M/S AMDPL TO OK UP THE WORK OF CIVIL CONSTRUCTION OF VARIOUS PARTS OF HOS PITAL. AMDPL INVESTED THE AMOUNT DURING THE FINANCIAL YEAR 2007- 08 AND 2008- 09 FOR CONSTRUCTION OF BUILDING AND ACQUISITION OF EQUIPMENTS. M/S WHL INITIALLY INVESTED RS. 4 CRORES SUBSEQUENTLY BA CKED OUT FOR ANY FURTHER INVESTMENT. AS STATED BY LD. COUNSEL FOR T HE ASSESSEE M/S AMDPL AFTER SECURING LOANS FROM MADHYA PRADESH FINA NCIAL CORPORATION INVESTED APPROXIMATELY ABOUT 8.17 CRORE S DURING FINANCIAL YEAR 2007-08 AND 2008-09. WHEN M/S AMDPL TRIED TO PERSUADE WHL TO TAKE UP THE MANAGEMENT AND FURTHER INVEST THE MONEY, SOME DISPUTES ARISES BETWEEN THE TWO. BECAUS E OF THESE FINANCIAL STRINGENCIES THE HOSPITAL WAS BROADLY CLO SED IN THE BEGINNING OF FINANCIAL YEAR 2009-10. M/S WHL WANTED TO MODIFY THE AGREEMENT AND ENTER INTO A FRESH AGREEMENT BUT THE PARTIES COULD NOT CAME TO THE CONSENSUS ON ANY OF THE TERMS . ON ACCOUNT ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 77 OF THIS DISTRESS CONDITIONS M/S. AMDPL DECIDED TO T RANSFER THE MANAGEMENT AND ACCORDINGLY ENTERED INTO AN MEMORAND UM OF UNDERSTANDING (IN SHORT MOU) WITH BANSAL GROUP. AS PER THIS MOU DATED 24.10.2010 ENTERED BETWEEN M/S AMDPL ALON G WITH ITS 100% SHARE HOLDERS THROUGH ITS DIRECTORS NAMELY DR. ASHOK GUPTA, DR. NEERAJ KUMAR AND DR. GOPAL BATNI WITH SHRI ANIL BANSAL S/O SHRI K.C. BANSAL AGREED TO TAKE OVER THE HOSPITAL W ITH EXISTING LIABILITIES FOR TOTAL CONSIDERATION OF RS.26.75 CRO RES. THE AMOUNT WAS TO BE ADJUSTED IN THE FOLLOWING MANNER :- I . TAKE OVER OF LIABILITIES OF INSTITUTIONAL LIABILITI ES AND SUBSTITUTION OF PERSONAL GUARANTEES OF RS. 7.25 CRORES II. SETTLEMENT OF WORCKHARDT AND OTHER LIABILITIES RS.6.0 CRORES III. PAYMENT TO SHARE HOLDERS OF RS. 13.50 CRORES. FURTHER IN THE SAID AGREEMENT IS ALSO WRITTEN PAYMENT TERM OF RS.13,50,00,000/- TO THE SELLERS. 25% ON DATE OF DEFINITIVE MOU ON 26 TH OCTOBER 25% ON CUT-OFF DATE/ON POSSESSION I.E. 1 ST DECEMBER 2010. ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 78 BALANCE 50% IN FIVE EQUAL MONTHLY INSTALMENTS COMMENCING ON 1 ST JUNE 2011. 80. AFTER ENTERING INTO THIS MOU DURING THE PERIOD NOV EMBER, 2010 TO MAY, 2011 BANSAL GROUP PAID SOME AMOUNT IN CASH AS WELL AS CHEQUE TO THREE DIRECTORS. THE ASSESSEE IN QUES TION RECEIVED RS. 50 LAKHS BY CHEQUE ON 15.11.10 AND CASH SUM OF RS.2 ,15,00,000/- UP TO MAY, 2011. A SEARCH U/S 132(4) OF THE ACT WAS CONDUCTED ON 02.06.2011 OF BANSAL GROUP. SINCE THERE WERE BUSIN ESS CONNECTION BETWEEN M/S AMDPL SEARCH WAS ALSO CONDUCTED AT THE RESIDENTIAL AND BUSINESS PREMISES OF ALL THE SHARE HOLDERS. DU RING THE SEARCH MOU WAS ALSO FOUND WHICH APPEARS AT LPS-6 PAGE NO.3 0 PLACED AT PAGE NO.1 OF THE COMMON PAPER BOOK DATED 14.06.2017 . WHEN THE STATEMENTS WERE RECORDED U/S 132(4) OF THE ACT THE ASSESSEE AS WELL AS OTHER DIRECTORS ACCEPTED TO HAVE RECEIVED CASH S UM OF RS. 5 CRORES, THE DETAILS OF WHICH IS AS UNDER :- (I) DR. ASHOK GUPTA RS.2.15 CRORES (II) DR. GOPAL BATNI RS. 1.14 CRORES (III) DR. NEERAJ KUMAR RS. 1.14 CRORES ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 79 81. AS REGARDS DR. ASHOK GUPTA OUT OF RS.2,15,00,000/ - RS. 40,00,000/- WAS RECEIVED DURING ASSESSMENT YEAR 201 1-12 AND RS. 1,75,00,000/- DURING ASSESSMENT YEAR 2012-13. FURT HER ALL THE CASH PAYMENT RECEIVED BY ALL THE 3 DIRECTORS WAS AC CEPTED BY MR. SUNIL BANSAL DURING THE COURSE OF SEARCH STATEMENT RECORDED U/S 132(4) OF THE ACT DATED 03.06.2011 AND THE UNACCOUN TED INVESTMENT IS CLAIMED TO HAVE BEEN OFFERED TO TAX B Y THE BANSAL GROUP. DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND SUBSEQUENT TO SEARCH CARRIED OUT U/S 153A R.W.S. 14 3(3) OF THE ACT (WHICH WAS COMPLETED ON 14.3.2014) WHEN THE LD. A.O CONFRONTED THE ASSESSEE WITH THE MOU, COMPLETE DETAILS WERE FI LED BY THE ASSESSEE REGARDING THE AMOUNT RECEIVED FROM BANSAL GROUP IN CASH AS WELL AS CHEQUE WHICH TOTALLED TO RS. 12,28,37,85 0/- RECEIVED BY THE SHARE HOLDERS AGAINST THE NUMBER OF SHARES HELD IN THE FOLLOWING MANNER :- NAME OF SHAREHOLDER NO. OF SHARES HELD AMOUNT REC EIVED DR. ASHOK GUPTA 71135 4,05,46,950 MRS. ALKA GUPTA (W/O DR. ASHOK GUPTA) 700 3,99,000 DR. GOPAL BATNI 71835 4,09,45,950 DR. NIRAJ KUMAR 70640 4,02,64,800 ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 80 MRS. CHARU KUMAR (W/O DR. NIRAJ KUMAR) 1195 6,81,150 TOTAL 215505 12.28,37,850 82. THE ABOVE SUM OF RS.12,28,37,850/- INCLUDES THE CA SH SUM OF RS.5 CRORES RECEIVED BY THE THREE DIRECTORS DISCUSS ED ABOVE. THE LD. A.O WAS OF THE VIEW THAT THE AMOUNT SHOULD HAVE BEEN OFFERED TO TAX AS AND WHEN THEY HAVE BEEN RECEIVED. IN OTH ER WORDS IN THE CASE OF THE ASSESSEE RS. 40 LAKHS AND RS. 1.85 CROR ES SHOULD HAVE BEEN OFFERED TO TAX DURING ASSESSMENT YEAR 2011-12 AND ASSESSMENT YEAR 2012-13 RESPECTIVELY. LD. A.O WAS ALSO OF THE VIEW THAT THE AMOUNT AS PER THE MOU DATED 24.10.2010 WHI CH WAS NOT RECEIVED ON THE DATE OF SEARCH I.E. 02.06.2011 TOTA LLING TO RS. 7.5 CRORES SHOULD HAVE BEEN OFFERED TO TAX. THE SHARE OF THE ASSESSEE IN THIS RS.7.5 CRORES WAS CALCULATED AT RS. 1.85 CRORE S BY THE LD. A.O WHICH WAS FINALLY ADDED TO THE INCOME OF THE ASSESS EE FOR ASSESSMENT YEAR 2012-13. AS REGARDS THE SUBMISSION S AND CONTENTION MADE BY THE ASSESSEE THROUGH ITS LD. COU NSEL AT VARIOUS STAGES SUMMARIES THAT AS PER THE MOU THE AMOUNT WAS TO BE RECEIVED BY THE SHARE HOLDERS AGAINST THE SALE OF S HARES IN M/S ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 81 AMDPL TO BANSAL GROUP. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ADVANCE AMOUNTS IN CASH/CHEQUE WERE RECEIVED B UT DUE TO THE ONGOING LITIGATION WITH M/S WHL WHICH DELAYED THE C OMPLETION OF THE TRANSACTIONS AND FINALLY ON 8.02.2012 THE ARBIT RATION AWARD WAS ISSUED AS PER THE DIRECTIONS OF HONBLE HIGH COURT OF MADHYA PRADESH WHICH BROUGHT AN END TO THE LITIGATION BETW EEN THE ASSESSEE AND M/S WHL THE COPY OF THE ARBITRATION A WARD IS PLACED AT PAGE 114 OF THE COMMON PAPER BOOK. IT WAS ON 08 .02.2012 THAT THE DEAL BETWEEN M/S. AMDPL AND BANSAL GROUP GOT A CLEAR WAY. SUBSEQUENT TO IT ON 14.08.2012 THE SHARES WERE TRAN SFERRED. THE CLAIM OF THE ASSESSEE IS THAT THE TOTAL CONSIDERATI ON OF RS. 4,05,46,950/- RECEIVED BY HIM AGAINST THE SALE OF 7 1135 EQUITY SHARES HELD IN M/S AMDPL HAVE BEEN SHOWN AS SALE CO NSIDERATION IN THE RETURN OF INCOME FOR ASSESSMENT YEAR 2013-1 4 AS PER THE PROVISIONS OF SECTION 45(1) OF THE INCOME TAX ACT. IT WAS ALSO CLAIMED THAT ADVANCE TAX OF RS.37,11,100/- STOOD PA ID UP TO 01.03.2013 FOR THE INCOME TO BE SHOWN UNDER THE HEA D LONG TERM CAPITAL GAIN FOR ASSESSMENT YEAR 2013-14. THIS FAC T OF PAYING ADVANCE TAX FOR ASSESSMENT YEAR 2013-14 AS WELL AS THE SALE CONSIDERATION FROM SALE OF SHARES HAVE BEEN OFFERED TO TAX DURING ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 82 ASSESSMENT YEAR 2013-14 WAS VERY MUCH BEFORE LD. CI T(A). ON THE BASIS OF THESE FACTS LD. COUNSEL FOR THE ASSESSEE H AS CONTENDED THAT THE ACTION OF LD. A.O MAKING ADDITION DURING ASSESS MENT YEARS 2011-12 AND 2012-13 TANTAMOUNT TO DOUBLE ADDITION SINCE AMOUNT RECEIVED TOWARDS SALE OF SHARES HAS BEEN OFFERED AN D ASSESSED TO TAX IN THE INCOME TAX RETURN FOR ASSESSMENT YEAR 20 13-14. 83. ON EXAMINING ALL THE FACTS AND THE VIEW TAKEN BY B OTH THE LOWER AUTHORITIES FIRSTLY THERE REMAINS NO DISPUTE ABOUT THE CASH AND CHEQUE AMOUNT RECEIVED BY THE ASSESSEE ON ACCOU NT OF THE MOU ENTERED INTO BETWEEN M/S AMDPL AND BANSAL GROUP . HOWEVER IT SEEMS THAT BOTH THE LOWER AUTHORITIES HA VE ONLY TAKEN NOTE OF THE AMOUNT OF CASH OR CHEQUE RECEIVED BY T HE ASSESSEE AS PER MOU BUT THEY HAVE NOT DEALT THE AMOUNTS RECEIVE D AS PART OF THE TRANSACTION OF SALE OF EQUITY SHARES. AS PER T HE AUDITED BALANCE SHEET OF FINANCIAL YEAR 2006-07 PLACED AT PAGE 122 TO 133 OF M/S. AMDPL PAID UP CAPITAL WAS RS.26,54,800/- AGAINST 1 26548 EQUITY SHARES ALLOTTED. AS ON 31.03.2009 AS PER THE AUDIT ED BALANCE SHEET OF M/S. AMDPL 213448 EQUITY SHARES WERE ISSUED FOR PAID UP CAPITAL OF RS.2,13,44,800/- AGAINST THE AUTHORISED SHARE CAPITAL OF ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 83 RS. 2,25,00,000/-FOR 22500000 OF EQUITY SHARES OF R S.100/- EACH. WHEN THE DEAL WAS STRUCK BETWEEN M/S. AMDPL AND BAN SAL GROUP 215505 EQUITY SHARES WERE HELD BY THE DIRECTORS AND THEIR FAMILY MEMBERS FOR WHICH TOTAL CONSIDERATION OF RS.12,28,3 7,850/- WAS RECEIVED. LD. A.O HAS ONLY DEALT WITH THE AMOUNT O F CASH/CHEQUE BUT HAS NOT DEALT WITH THE COMPLETE TRANSACTION WI TH THE SALE OF SHARES. THE ASSESSEE IS ENTITLED TO DEDUCTION OF IN DEXED COST OF ACQUISITION AND OTHER INCIDENTAL EXPENSES INCURRED AGAINST THE SALE CONSIDERATION RECEIVED FROM SALE OF SHARES. 84. THERE IS NO AMBIGUITY IN THE MOU WHICH CLEARLY SPE LLED OUT THAT THE AMOUNT WILL BE PAID FOR PAYING ALL THE LIA BILITIES RELATING TO LOANS TAKEN AND OTHER CREDITORS AS ON THE DATE OF T AKE OVER APPROXIMATELY CALCULATED AT RS. 7.25 CRORES AND THE PORTION OF RS. 6 CRORES FOR SETTLEMENT OF M/S WOCKHARDT AND OTHER L IABILITIES AND REMAINING AMOUNT APPROXIMATELY RS. 13.50 CRORES WAS TO BE GIVEN TO THE SHARE HOLDERS. IT WAS CLEARLY A TRANSACTION OF PURCHASE OF RUNNING BUSINESS AND PAYING THE SHARE HOLDERS FOR P URCHASE OF SHARES WHICH NEEDS TO BE TAXED IN THE HANDS OF THE ASSESSEE. ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 84 85. NOW THE QUESTION COMES HERE IS WHEN THE ASSESSEE S HOULD HAVE OFFERED THE AMOUNT TO TAX I.E. WHETHER THE AMOUNT SHOULD HAVE OFFERED TO TAX AS AND WHEN IT WAS RECEIVED BY SHOWING IT AS LONG TERM CAPITAL GAIN IN THE YEAR WHEN IT WAS RECE IVED OR WHETHER IT IS TO BE OFFERED TO TAX WHEN THE AGREEM ENT FOR SALE OF SHARES IS ENTERED INTO. 86. IN THE INSTANT CASE THE ASSESSEE BEFORE FINALISING THE DEAL WITH BSNSAL GROUP HAD ENTERED INTO AN AGREEMENT WITH M/S WHL FOR TAKE OVER OF THE HOSPITAL. BUT DUE TO DISPUTES ARIS ING BETWEEN THE TWO PARTIES THE DEALT COULD NOT MATERIALISE AND WEN T INTO LITIGATION. IN THE SUBMISSIONS MADE BY THE COUNSEL FOR THE ASSE SSEE CHRONOLOGY OF THE EVENTS OCCURRED FROM 7.10.2006 TO 14.08.2012 HAVE BEEN MENTIONED WHEREIN AFTER ENTERING INTO AGREEMENT WITH M/S. WHL DISPUTES ARISED BETWEEN THE TWO. M/S WHL FILING PETITION FOR POSSESSION OF PROPERTY ON 03.1.2011 WH ICH WAS DISMISSED ON 14.02.2011. THEREAFTER M/S WHL FILED AN APPEAL BEFORE HONBLE HIGH COURT OF MADHYA PRADESH ON 07. 03.2011 FOR ARBITRATION AND ON 28.06.2011 HONBLE HIGH COURT OF MADHYA PRADESH APPOINTED THE ARBITRATOR WHICH WAS SUBSEQUE NTLY CHANGED ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 85 AND FINALLY ON 08.02.2012 ARBITRATION AWARD WAS ISS UED AND THE DISPUTES BETWEEN M/S AMDPL AND M/S WOCKHARDT CAME T O AN END. FINALLY EQUITY SHARES WERE TRANSFERRED TO BANSAL GR OUP ON 14.08.2012. THE DEAL WITH M/S BANSAL GROUP HAPPENED IN BETWEEN ON 24.10.2010. PART OF THE CONSIDERATION WAS RECE IVED IN CASH AND CHEQUE BY THE DIRECTORS ON VARIOUS DATES WHICH IS A LSO MENTIONED IN THE PRECEDING PARAS IN THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE. SO THE CRUX OF THE SERIES OF FACTS IS TH AT TILL 08.02.2012 THERE WAS NO SURETY OF HONOURING THE MOU ENTERED IN TO BETWEEN M/S. AMDPL AND BANSAL GROUP. THEREFORE ALL THE AMOU NTS RECEIVED BY ALL THE DIRECTORS OR SHARE HOLDERS WERE MERELY I N THE SHAPE OF AN ADVANCE AND IN CASE OF CONTRARY OUTCOME BETWEEN M/S AMDPL AND M/S WHL THE SALE OF SHARES COULD NOT BE COMPLETED. IN THE INSTANT CASE TRANSACTION OF SALE OF EQUITY SHARES OF M/S AM DPL HELD BY ASSESSEE FALLS IN THE CATEGORY OF TRANSFER PROVIDED IN SECTION 45(1) OF THE ACT WHICH READS AS FOLLOWS:- ANY PROFITS OR GAINS ARISING FROM THE TRANSFER OF A CAPITAL ASSET EFFECTED IN THE PREVIOUS YEAR SHALL, SAVE AS OTHERWISE PROVIDED IN SECTIONS 54, 54B, 54D, 54E, 54F, 54G AND 54H, BE CHARGEABLE TO INCOME- TA X UNDER THE HEAD' CAPITAL GAINS', AND SHALL BE DEEMED TO BE TH E INCOME OF THE PREVIOUS YEAR IN WHICH THE TRANSFER TOOK PLACE. ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 86 THE EXCEPTIONS PROVIDED IN SUB SECTION 2 TO (6) OF SECTION 45 DO NOT APPLY TO THE ISSUED INVOLVED IN CASE OF ASSESSE E. THEREFORE SINCE THE TRANSFER OF EQUITY SHARES WAS EFFECTED DURING FINANC IAL YEAR 2012-13 I.E. ON 14.08.2012, THE LONG TERM CAPITAL GAIN FOR SALE OF EQUITY SHARES OF M/S. AMDPL HELD BY SHAREHOLDER IS TAXABLE IN ASSESS MENT YEAR 2013-14 ONLY. 87. IN OUR CONSIDERED VIEW ALL THE AMOUNT RECEIVED B Y THE ASSESSEE OR SHARE HOLDERS TILL THE COMMENCEMENT OF ARBITRATION AWARD ISSUED ON 08.02.2012 WERE ONLY THE ADVANCES AGAINST THE INCOM PLETE DEAL AND LIABILITY TO PAY BACK WAS VERY MUCH LYING TILL 08.0 2.2012. SUBSEQUENT TO THE ARBITRATION AWARD AND HONOURING THE SAME IT WAS FINALLY ON 14.08.2012 WHEN THE REGISTRATION OF TRANSFER OF SHA RES COMPLETED AND 215505 EQUITY SHARES WHICH INCLUDED 71135 EQUITY SH ARES HELD BY DR. ASHOK GUPTA WERE TRANSFERRED TO BANSAL GROUP FOR TO TAL CONSIDERATION OF RS. 12,28,37,850/-. AS REGARDS THE ASSESSEES REC EIVING TOTAL SALE CONSIDERATION OF RS.4,05,46,950/- FROM THE TRANSFER OF EQUITY SHARES HELD IN AMDPL THE SAME HAS BEEN DISCLOSED IN THE RETURN OF INCOME FILED FOR ASSESSMENT YEAR 2013-14 ON 28.3.2014 AND CLAIMING T HE DEDUCTIONS THE INCOME HAS BEEN OFFERED TO TAX. 88. NOW AS FAR AS THE SALE CONSIDERATION OF 4,05,56,9 50/- IS CONCERNED T HE SAME HAS BEEN DISCLOSED IN THE RETURN OF INCOME ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 87 AGAINST WHICH THE ASSESSEE HAS CLAIMED INDEX COST O F 1,36,57,842/- ON THE TOTAL COST OF ACQUISITION OF RS.71,64,500/-. THE FACT THAT THE ASSESSEE HAS OFFERED THESE SHARE OF SALE CONSIDERAT ION TO TAX DURING ASSESSMENT YEAR 2013-14 WAS BROUGHT ON RECORD BEFOR E LD. CIT(A) ALSO AND THE SUBMISSIONS FILED TO LD. CIT(A). 89. IN THE CASE OF OTHER SHARE HOLDERS ALSO SALE CONSI DERATION HAS BEEN OFFERED IN ASSESSMENT YEAR 2013-14. THE MAJOR AMOUNT WAS RECEIVED BY 3 DIRECTORS AND THE AMOUNT SHOWN AS SAL E CONSIDERATION THROUGH WHICH INCOME TAX RETURN FILED FOR ASSESSMENT YEAR 2013-14 IS AS FOLLOWS:- NAME AMOUNT DR. ASHOK GUPTA RS. 4,05,46,950/- DR. NEERAJ KUMAR RS. 4,02,64,800/- DR. GOPAL BATNI RS. 4,09,45,950/- TOTAL RS.12,17,57,700/- 90. THE REMAINING CONSIDERATION I.E. TOTAL CONSIDERATI ON OF RS. 12,28,37,850/- LESS RS,12,17,57,700/- COMES TO RS.1 0,80,150/- ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 88 WHICH CONSTITUTES TWO SHARE HOLDERS NAMELY DR. ASHO K GUPTA AT RS.3,99,000/- AND SMT. CHARU KUMAR AT RS.6,81,150/ - AND THE SAME IS CLAIMED TO HAVE BEEN OFFERED TO TAX DURING ASSESSMENT YEAR 2013-14. IT IS FURTHER BROUGHT TO OUR NOTICE THAT THE ASSESSMENT FOR ASSESSMENT YEAR 2013-14 IN THE CASE OF DR. ASHOK GU PTA AS WELL AS DR. NEERAJ KUMAR WAS COMPLETED U/S 143(3) OF THE AC T VIDE ORDER DATED 31.03.2016 AND THE INCOME UNDER THE HEAD LONG TERM CAPITAL GAIN FOR SALE OF EQUITY SHARES OF AMDPL HAS BEEN ACCEPTED BY LD. A.O. THUS THERE REMAINS NO DISPUTE TO THE FA CT THAT TOTAL SALE CONSIDERATION OF RS.12,28,37,850/- TOWARDS SALE OF EQUITY SHARES HELD IN AMDPL BY THE THREE DIRECTORS INCLUDING THE ASSESSEE HAVE BEEN OFFERED TO TAX AND HAVE BEEN ASSESSED U/S 143( 3) OF THE ACT. 91. ONE MORE FACT BROUGHT TO OUR NOTICE THAT THE ALLEG ED CASH OF RS. 5 CRORES PAID BY BANSAL GROUP TO THE 3 DIRECTOR S HAVE ALSO BEEN OFFERED TO TAX DURING ASSESSMENT YEARS 2011-12 AND 2012-13 BY THE BANSAL FAMILY. LD. COUNSEL FOR THE ASSESSEE AS OFFICER IN COURT HAS GIVEN THIS INFORMATION IN WRITING ALONG WITH TH E CERTIFICATE ISSUED BY SHRI ANIL BANSAL WHEREIN INFORMATION ABOU T THE NAME OF THE ASSESSEE, PAN NUMBER, ASSESSMENT YEAR AND THE A MOUNT ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 89 SURRENDERED AND OFFERED TO TAX HAS BEEN MENTIONED. IT SPECIFICALLY SHOWS THAT TAX AND SURRENDERED INCOME OF RS.5 CRORE S HAS BEEN PAID AND THE ISSUE IS NOT CONTESTED IN APPEAL BEFOR E CIT(A) AND ITAT. 92. THEREFORE IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE WE COME TO THE CONCLUSION THAT THE AMOUNTS RECEIVED FO R SALE OF EQUITY SHARES BY THE SHARE HOLDERS AS PER THE MOU DATED 24 .10.2010 WHICH WAS SEIZED DURING THE SEARCH APPEARING IN PAG E 30 OF LPS-6 HAS BEEN OFFERED TO TAX BY RESPECTIVE SHARE HOLDERS IN THEIR REGULAR INCOME TAX RETURN FOR ASSESSMENT YEAR 2013-14. THE FACT THAT THE ASSESSEE HAS SHOWN THE INCOME UNDER THE HEAD LO NG TERM CAPITAL GAIN FOR ASSESSMENT YEAR 2013-14 IS CORRECT AND IN OUR VIEW SINCE THE DELAY IN TRANSFERRING THE SHARES ARI SED DUE TO THE DISPUTE BETWEEN M/S. AMDPL & M/S WHL WHICH DELAYED TO COMPLETE THE DEAL AS PER MOU DATED 24.10.2010 BETWE EN M/S. AMDPL & M/S BANSAL GROUP. THE ASSESSEE RECEIVED THE VALUE FOR THE EQUITY SHARES HELD. THIS AMOUNT WAS RECEIVED I N PART OF WHICH SOME WAS IN CASH (WHICH WAS DULY ACCEPTED BY THE A SSESSEE DURING THE COURSE OF SEARCH) AND THE REMAINING PART IN CHE QUE. SINCE DUE ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 90 TO ONGOING LITIGATION BETWEEN ASSESSEE AND WHL DELA YED THE COMPLETION OF DEAL BETWEEN THE BANSAL GROUP AND THE ASSESSEE AND IT WAS ONLY ON 08.02.2012 THAT THE LITIGATION BETW EEN AMDPL AND WHL CAME TO AN END. THE REGISTRATION OF TRANSFER O F SHARES TOOK PLACE ON 14.8.2012 AND ON THE BASIS OF THESE DOCUME NTS TRANSACTION OF SALE OF SHARES COMPLETED IN FINANCIA L YEAR 2012-13. THUS THE ASSESEE AND OTHER DIRECTORS/SHARE HOLDERS HAS RIGHTLY DISCLOSED THE LONG TERM CAPITAL GAIN FROM SALE OF S HARES IN THEIR REGULAR RETURN OF INCOME FOR ASSESSMENT YEAR 2013-1 4. THEREFORE THE ACTION OF THE LD. A.O MAKING THE ADDITION FOR A DVANCE CASH RECEIVED ON SALE OF SHARES AT RS.40,00,000/- AND RS .1,75,00,000/- DURING ASSESSMENT YEAR 2011-12 AND 2012-13 AND ADDI TION OF RS.1,85,00,000/- FOR THE AMOUNT RECEIVABLE POST SEA RCH WAS NOT JUSTIFIED AND IS LIABLE TO BE DELETED. WE ACCORDIN GLY ORDER SO AND SET ASIDE THE FINDING OF LD. CIT(A) AND ALLOW GROUN D NO.3 FOR ASSESSMENT YEAR 2011-12 AND GROUND NO. 4 & 5 FOR AS SESSMENT YEAR 2012-13 RAISED BY THE ASSESSEE NAMELY DR. ASHO K GUPTA KUMAR IN IT(SS) NO.64 AND 161/IND/2017. ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 91 93. IN THE RESULT APPEAL OF THE ASSESSEE DR. ASHOK GUP TA FOR ASSESSMENT YEARS 2011-12 AND 2012-13 ARE PARTLY ALL OWED. 94. NOW WE TAKE UP THE CASE OF DR. NEERAJ KUMAR FOR AS SESSMENT YEAR 2006-07, 2011-12 AND 2012-13 VIDE IT(SS) NO.66 ,67 & 162/IND/2017. BRIEF FACTS OF THE CASE ARE THAT DR. NEERAJ KUMAR IS ALSO THE DIRECTOR AND SHAREHOLDER OF M/S. AMDPL. R ESIDENTIAL PREMISES WERE ALSO SUBJECTED TO SEARCH ALONG WITH T HE SEARCH CONDUCTED AT BANSAL GROUP AND OTHER DIRECTORS AND S HARE HOLDERS OF M/S. AMDPL ON 02.06.2011 AND SOME LOOSE PAPERS W ERE SEIZED. IN RESPONSE TO NOTICE ISSUED U/S 153A OF THE ACT IN COME TAX RETURNS WERE FILED FOR ASSESSMENT YEARS 2006-07 TO 2011-12. 95. WE WILL FIRST TAKE UP THE APPEAL FOR ASSESSMENT YE AR 2006-07 WHEREIN FOUR GROUNDS OF APPEAL HAVE BEEN RAISED WHI CH READS AS FOLLOWS:- 1.THAT THE ASSESSMENT MADE U/S 153A R.W.S. 143(3) OF THE INCOME-TAX ACT BE HELD TO BE BAD IN LAW AND ON FACTS AND BE QUASHED. 2. THAT THE ADDITION OF RS.13,OO,OOO/- MAINTAINED AND CONFIRMED BY CIT(A) MADE ON THE BASIS OF PAGE NO.122 OF LPS-3 FOUND FROM THE OFFICE PREMISES OF AYUSHMAN COLLEGE BE HELD TO BE BAD AND UNJUSTIFIED ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND BE QUASHED AND DELETE D. ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 92 3.THAT IN THE ALTERNATIVE AND WITHOUT PREJUDICE TO THE GROUNDS STATED ABOVE THE ADDITIONS MADE BE HELD TO BE HIGHLY UNREASONABLE AND EXCESSIVE AND BE REDUCED. 4.THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY GR OUND OF APPEAL BEFORE OR DURING THE COURSE OF HEARING OF THE CASE. 96. AT THE OUTSET LD. COUNSEL FOR THE ASSESSEE REQUEST ED FOR NOT PRESSING GROUND NO.1 CHALLENGING THE VALIDITY OF TH E ASSESSMENT MADE U/S 153A R.W.S. 143(3) OF THE ACT. SINCE GROU ND NO.1 HAS NOT BEEN PRESSED THE SAME STANDS DISMISSED AS NOT PRESS ED. 97. APROPOS GROUND NO.2 RELATING TO THE ADDITION OF RS.13,00,000/- MADE ON THE BASIS OF PAGE NO.122 OF LPS-3 FOUND FROM THE OFFICE PREMISES OF AYUSHMAN COLLEGE, AS PE R LD. A.O THIS PAGE CONTAINS THE DETAILS OF PAYMENT MADE TO ASSESS EE TOTALING TO RS.13,00,000/- AND DIVIDEND OF RS.3,40,600/-. THOUG H IT WAS CLAIMED BY THE ASSESSEE THAT ALL THE PAYMENTS WERE MADE BEFORE 31.3.2005 AND ARE DULY RECORDED IN THE BOOKS OF ACC OUNTS AND NO ADDITION COULD BE MADE FOR ASSESSMENT YEAR 2006-07. LD. AO DID NOT FIND ANY MERIT MADE THE ADDITION OF RS.16,40,60 0/- AS UNACCOUNTED INCOME NOT RECORDED IN BOOKS OF ACCOU NTS. ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 93 98. AGGRIEVED ASSESSEE PREFERRED APPEAL BEFORE LD. CIT (A) AND PARTLY SUCCEEDED SINCE THE FINDING OF LD. A.O WAS P ARTLY CONFIRMED BY LD. CIT(A) OBSERVING AS FOLLOWS:- I HAVE CONSIDERED THE FACTS OF THE CASE, THE WRITTE N SUBMISSIONS OF THE LEARNED AR, THE ASSESSMENT ORDER AND ALSO PERUSED T HE CASE RECORD. IT IS SEEN THAT THE APPELLANT ASSESSEE HAS FILLED REGULAR RETURN U/S 139 FOR AY 2005-06 ON 23.03.2006. THE STATEMENT OF TOTAL INCOME AND THE DETAILS OF AC COUNT FILED ALONG WITH THE REGULAR RETURN FILED U/S 1 39 FOR A.Y 2005-06 CLEARLY SHOWS RECEIPT OF COMPANY DIVIDEND OF RS. 3,40,600/-. THE SAME AMOUNT OF RS. 3,40,600/-IS REFLECTED IN THE LOOSE PAPER (PAGE NO 122 OF LPS-3) FOUND DURING THE COURSE OF SEARCH AT THE OFFICE PREMISES OF AYUSHMAN COLLEGE SITUATED AT LLLG-3, LAKE VIEW SOCIETY, SHAHPURA, BHOPAL. FROM THE ABOVE IT IS CLEAR THAT THE SUM OF RS 3,40,600/- IS DIVIDEND RECEIVED BY THE APPELLANT FOR AY 2005-06 WHICH IS A LSO SHOWN IN REGULAR RETURN OF INCOME FILED U/S 139(1) ON 23.03.2006. IN VIEW OF THE ABOVE, IT IS CLEAR THAT THE SUM OF R S. 3,40,600/- PERTAINS TO AY 2005-06 AND IS REFLECTED IN THE RETURN. U/S 139(1) AND IS THEREFORE DELETED. 4.2 REGARDING THE BALANCE OF RS. 13,00,000/-, WHICH IS TREATED BY THE A.O AS UNDISCLOSED CASH RECEIPT FOR A.Y 2006-07 IS CONF IRMED. THE ARGUMENT TAKEN BY THE APPELLANT THAT THE SUM OF RS. 13,00,00 0/- RELATES TO YEARS PRIOR TO A.Y 2006-07 HAS NO HAS NO EVIDENCE REGARDI NG THE SAME WAS FILED EITHER BEFORE THE A.O OR AT THE TIME OF LATE PROCEE DINGS AND IS THEREFORE, REJECTED. ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 94 THE GROUND OF APPEAL IS PARTLY ALLOWED. 99. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 100 . LD. COUNSEL FOR THE ASSESSEE REFERRED TO FOLLOWIN G WRITTEN SUBMISSION:- AY 2006-07: ADDITION OF RS.13 LACS (PAGE 3 OF PB B- L) THE LD. AO, IN PARA 13.4, PAGE 13 OF THE ASSESSMENT ORDER, HAS MADE THE ADDITION OF RS.16,40,600/- - ON THE BASIS OF LOOSE PAPER LPS-3 PAGE 122. THE SAID PAPER IS A CALCULATION OF INVESTMENTS MADE BY THE GROUP DIRECTORS IN THE CASE OF THE COMPANY. IT ALSO INDIC ATES THE DIVIDENDS OF RS.3,40,600/- BEING DECLARED TO THE DIRECTOR. THE LD. AO HAS REMA RKED IN PARA 13.3 THAT THE ASSESSEE HAS NOT SUBMITTED ANY E VIDENCE TO SUBSTANTIATE ITS CLAIMS ABOUT THE SHARE INVESTMENTS AND ALSO THE DIVIDENDS RECEIVED. HE FURTHER OBSERVED THAT THE AS SESSEE HAS RECEIVED CASH AND DIVIDEND OF RS.16,40,600/- AND WOULD BE ADDED AS THE INCOME OF THE ASSESSEE ON ACCOUNT OF UNDISCLOSED CASH RECE IPTS FOR AY 2006-07. THE LD. CIT(A) HAS DELETED THE ADDITION OF RS.3,40,600/- AFTER VERIFICATION THAT THE DIVIDENDS HAVE BEEN DECLARED AND SHOWN IN THE RETURN FOR AY 2005-06. IT IS HUMBLY SUBMITTED THAT ALL THE PAYMENTS ARE EN TERED IN THE BOOKS OF M/S AYUSHMAN AND AS SUCH IT CANNOT BE TREATED AS UN DISCLOSED INCOME OF THE ASSESSEE. IT IS FURTHER SUBMITTED THAT THE A DDITIONS HAVE BEEN MADE ON THE BASIS OF LOOSE PAPERS LPS 3 PAGE 122. T HE PAPER WILL HAVE TO BE READ AS A WHOLE AND CONCLUSIONS SHOULD BE DRAWN ON THE BASIS OF THE ENTRIES ON THE PAPER. THE PAPER CLEARLY STATES THE AMOUNTS PRIOR TO 31.3.2005 AND AS SUCH THEY CANNOT BE TAXED FOR AY 2 006-07 AS INCOME OF THIS YEAR. THE ADDITION MADE IS BAD IN LAW AND D ESERVES TO BE DELETED. ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 95 101. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE VEHEMEN TLY ARGUED SUPPORTED THE FINDINGS OF LD. CIT(A). 102 . WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE R ECORDS PLACED BEFORE US. THROUGH GROUND NO.3 ASSESSEE HAS CHALLENGED THE FINDING OF LD. CIT(A) CONFIRMING THE ADDITION O F RS.13,00,000/- MADE BY LD. A.O ON THE BASIS OF LOOSE SHEET FOUND D URING THE COURSE OF SEARCH APPEARING IN PAGE NO.122 OF LPS-3. COPY OF THIS LOOSE PAPER IS PLACED AT PAGE-3 OF PB/B-1 DATED 14. 06.2017. ON GOING THROUGH THIS LOOSE PAPER WE FIND THAT ASSESSE E RECEIVED VARIOUS PAYMENTS DURING THE PERIOD 06.08.2003 TO 14 .03.2005 TOTALLING TO RS.13,00,000/-. LD. A.O HAS MADE ADDIT ION DURING ASSESSMENT YEAR 2006-07. FIRST AND FOREMOST WHEN T HE ADDITION HAS BEEN MADE ON THE BASIS OF LOOSE SHEET WHEREIN D ATE OF PAYMENT IS CLEARLY MENTIONED THERE HARDLY REMAIN ANY ROLE O F LD. A.O TO ASSESS INCOME IN SOME OTHER YEAR WHICH IN THIS CASE IS ASSESSMENT YEAR 2006-07. THE CONTENTION OF THE ASSESSEE IS THA T ALL THE ENTRIES MENTIONED IN THIS LOOSE SHEET NO.122 OF LPS-3 ARE T HROUGH BANKING CHANNEL AS EVIDENCED BY THE COPY OF BANK STATEMENTS FILED BY THE LD. COUNSEL FOR THE ASSESSEE ON 17.03.2019. ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 96 103. IN THESE GIVEN FACTS AND CIRCUMSTANCES OF THE CAS E WE ARE OF THE CONSIDERED VIEW THAT THE TRANSACTIONS APPEAR ING IN THE ALLEGED LOOSE SHEET NO.122 OF LPS-3 DO NOT PERTAIN TO ASSESSMENT YEAR 2006-07 AND THUS NO ADDITION WAS CALLED FOR IN ASSESSMENT YEAR 2006-07 AND FURTHER ALL THE TRANSACTIONS APPEA RING IN THIS LOOSE SHEET ARE DULY RECORDED IN THE IN THE BOOKS O F ACCOUNTS. WE THEREFORE SET ASIDE THE FINDING OF LD. CIT(A) AND D ELETE THE ADDITION OF RS.13,00,000/- AND ALLOW GROUND NO.2 FOR ASSESSM ENT YEAR 2006-07 IN IT(SS) NO.66/IND/2017. 104 . GROUND NO.3 & 4 ARE GENERAL IN NATURE WHICH NEEDS NO ADJUDICATION. 105. IN THE RESULT APPEAL FOR ASSESSMENT YEAR 2006-07 I S PARTLY ALLOWED. 106. NOW WE TAKE UP IT (SS) NO. 67/IND/2017 FOR ASSES SMENT YEAR 2011-12 IN THE CASE OF DR. NEERAJ KUMAR WHEREI N FOLLOWING GROUNDS ARE RAISED:- 1. THAT THE ASSESSMENT MADE U/S 153A R.W.S.143(3) OF THE INCOME-TAX ACT BE HELD TO BE BAD IN LAW AND ON FACTS AND BE QUASHE D. ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 97 2. THAT THE ADDITION OF RS.90,00,000/- MADE ON THE BASIS OF PAGE NO.30 OF LPS-6 FOUND FROM THE OFFICE PREMISES OF AYUSHMAN CO LLEGE BE HELD TO BE BAD AND UNJUSTIFIED ON THE FACTS AND IN THE CIRCUMS TANCES OF THE CASE AND BE QUASHED AND DELETED. 3. THAT THE ADDITION OF RS.1 ,52,000/- MADE ON THE BASIS OF PAGE NO.61 OF BS-1 FOUND FROM THE OFFICE PREMISES OF AYUSHMAN COL LEGE BE HELD TO BE BAD AND UNJUSTIFIED ON THE FACTS AND IN THE CIRCUMS TANCES OF THE CASE AND BE QUASHED AND DELETED. 4. THAT IN THE ALTERNATIVE AND WITHOUT PREJUDICE TO THE GROUNDS STATED ABOVE THE ADDITIONS MADE BE HELD TO BE HIGHLY UNREA SONABLE AND EXCESSIVE AND BE REDUCED. 5.THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY GR OUND OF APPEAL BEFORE OR DURING THE COURSE OF HEARING OF THE CASE. 107. AT THE OUTSET LD. COUNSEL FOR THE ASSESSEE REQUEST ED FOR NOT PRESSING GROUND NO.1 CHALLENGING THE VALIDITY OF TH E ASSESSMENT MADE U/S 153A R.W.S. 143(3) OF THE ACT. SINCE GROU ND NO.1 HAS NOT BEEN PRESSED THE SAME STANDS DISMISSED AS NOT PRESS ED. 108. APROPOS GROUND NO.2 IS ADDITION OF RS.90,00,000/- ON ACCOUNT OF PAGE-30 OF LPS-6 RELATING TO ADVANCE REC EIVED FROM BANSAL GROUP AS PART OF THE DEAL MENTIONED IN MOU D ATED 24.10.2010. THIS ISSUE HAS ALREADY BEEN DECIDED BY US IN THE PRECEDING PARAS71-92 IN THE CASE OF DR. ASHOK GUPTA WHILE DECIDING ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 98 GROUND NO.3 FOR ASSESSMENT YEAR 2011-12 AND GROUND NO. 4 & 5 FOR ASSESSMENT YEAR 2012-13 WHEREIN WE HAVE HELD TH AT ADDITION MADE BY THE LD. A.O FOR THE ADVANCE SUM RECEIVED AG AINST SALE OF SHARES WAS TO BE TAXED IN THE YEAR WHEN SHARES HAVE BEEN TRANSFERRED I.E. IN THE ASSESSMENT YEAR 2013-14 AND SINCE TOTAL CONSIDERATION RECEIVED BY THE SHARE HOLDERS/DIRECTO RS IN CASH AND CHEQUE HAVE BEEN ACCOUNTED FOR AND OFFERED TO TAX U NDER THE HEAD LONG TERM CAPITAL GAIN IN RETURN OF INCOME FILED FO R ASSESSMENT YEAR 2013-14, NO ADDITION WAS CALLED FOR DURING THE ASSESSMENT YEAR 2011-12 AND 2012-13. WE THEREFORE DELETE THE ADDITION OF RS.90,00,000/- MADE IN THE CASE OF THE ASSESSEE FOR ADVANCE CASH RECEIVED DURING THE ASSESSMENT YEAR 2011-12 FROM BA NSAL GROUP. THE FINDING OF LD. CIT(A) IS SET ASIDE AND GROUND NO.2 OF THE ASSESSEES APPEAL IS ALLOWED. 109. APROPOS GROUND NO.3 RELATING TO ADDITION OF RS. 1, 52,000/- MADE ON THE BASIS OF PAGE-61 OF BS-1 FOUND DURING T HE COURSE OF SEARCH SHOWS SOME TRANSACTION OF THE CASH RECEIVED AGAINST RS. 1,50,000/-. INADVERTENTLY THE TOTAL OF FOUR ENTRIES HAS BEEN ADOPTED AT RS. 1,52,000/- AND THE SAME FIGURE HAS BEEN CARR IED TILL NOW. THE ACTUAL POSITION IS THAT 10.09.2010, 18.09.2010, 21.09.2010 AND ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 99 25.09.2010 AN AMOUNT OF RS.30,000/-, RS.30,000/-, R S.50,000/- AND RS.40,000/- RESPECTIVELY ARE SHOWN. SUBMISSION S MADE BY THE ASSESSEE BEFORE THE LD.A.O THAT THESE ENTRIES ACTUA LLY RELATES TO TRANSACTION OF PURCHASE OF 1000 EQUITY SHARES OF AM DPL FROM SMT. BHARTI PATEL THROUGH ACCOUNT PAYEE CHEQUE WAS NOT A CCEPTED BY THE LD. A.O AND HE MADE THE ADDITION OF RS.1,52,000/- O BSERVING AS FOLLOWS:- 14.3 THE SUBMISSION OF THE ASSESSEE HAS BEEN CONSIDERED AND EXAMINED BUT THE SAME IS NOT ACCEPTABLE:- I THE ABOVE LOOSE PAPERS SHOWS THAT THE ASSESSEE HAS RECEIVED CASH OF RS. 1,52,000/- FROM MR. BHARAT PATEL FOR SHARE I N THE MONTH OF SEPTEMBER 20 1 O. THE ABOVE EXPENDITURE HAS NOT BE EN ENTERED IN THE BOOKS OF ACCOUNTS OF ASSESSEE. II. THE ABOVE LOOSE PAPERS SHOWS THAT THE ASSESSEE HAS RECEIVED CASH OF RS. 1,52,000/- FROM MR. BHARAT PATEL FOR SHARE IN T HE MONTH OF SEPTEMBER 2010. THE ABOVE EXPENDITURE HAS NOT BEEN ENTERED IN THE BOOKS OF ACCOUNTS OF ASSESEE. III. ON REQUEST OF ASSESSEE SUMMON U/S 131 HAS BEEN ISSUED TO SHRI. BHARAT PATEL ON 26/12/20 13, HOWEVER HE HAS NOT ATTENDED THE PROCEEDINGS TILL DATE. IV. THIS HANDWRITTEN LOOSE PAPER HAS BEEN FOUND AND SEIZED FROM THE RESIDENCE OF THE ASSESSEE. THEREFORE, IN VIEW OF PR OVISIONS OF SECTION 132( 4A) OF THE INCOME TAX ACT, 1961, IT IS PRESUME D THAT THE ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 100 TRANSACTIONS RECORDED IN THIS LOOSE PAPER PERTAIN T O THE ASSESSEE AND THE CONTENT OF THESE TRANSACTIONS IS TRUE. V. THE EXPLANATION OFFERED BY THE ASSESSEE HAS NOT BEEN SUPPORTED WITH ANY DOCUMENTARY EVIDENCE. 14.4 IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES O F THE CASE, IT IS ESTABLISHED AND HELD THAT THE ASSESSEE HAS RECEI VED CASH OF RS. 1,52,000/- FROM SHRI BHARAT PATEL, WHICH WAS NO T RECORDED IN THE BOOKS OF ACCOUNTS. THEREFORE, THE AMOUNT OF RS.1,52,000/- IS ADDED TO THE TOTAL INCOME OF ASSES SEE ON ACCOUNT OF UNEXPLAINED CASH RECEIVED FOR A.Y 2011-12 . 110. AGGRIEVED ASSESSEE PREFERRED APPEAL BEFORE LD. CIT (A) BUT FAILED TO SUCCEED SINCE THE FINDING OF LD. A.O WAS CONFIRMED OBSERVING AS FOLLOWS :- 1 HAVE CONSIDERED THE SUBMISSIONS OF THE LEARNED AR, THE ASSESSMENT ORDER AND ALSO PERUSED THE CASE RECORD. THE SUBMISS IONS OF THE LEARNED AR THAT RS .1,50,000/- HAVE BEEN PAID TO SMT BBARTI PATEL THRO UGH CHEQUE CB.NO.0374599 DRAWN ON HIS SB A/E NO.0062100000748 9 WITH HDFC BANK FOR ACQUIRING 1000 NOS. EQUITY SHARES OF AYUSH MAN MEDICAL DIAGNOSTICS PVT LTD W HICH WERE HELD BY HER. TO ACQUIRE THE SHARES FROM SMT. NHARTI PATEL THE APPELLANT ASSESSEE HAD RECEIV ED A LOAN OF RS.1,50,000/- FROM SHRI AVINASH GALANDE. THE LEARNED AA CONTENTED THAT THE NARRATION 'CASH' WRITTEN ON THIS PAPER IS NOT C ORRECT. THE LOAN FROM SHRI AVINASH GALANDE WAS RECEIVED THROUGH TWO ACCOUNT PA YEE CHEQUES OF RS.L,25,000/- AND RS.25,000/- IMMEDIATELY BEFORE MAKING PAYMENT TO SMT. BHARTI PATEL. THE APPELLANT ALSO STATED THAT HE DID NOT RECEIVE ANY CASH AMOUNT FROM MR. BHARAT PATEL. THE ADDRESS OF MR. BH ARAT PATEL WAS ALSO ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 101 GIVEN BY THE APPELLANT ASSESSEE AND REQUEST WAS MAD E TO ISSUE SUMMONS U/S 131 TO HIM. 6.2 THE PLEA TAKEN BY THE APPELLANT HAS NO MERIT. T HE HANDWRITTEN LOOSE PAPER HAS B EEN FOUND AND SEIZED FROM THE PREMISES OF THE APPELLANT ASSESSEE AT THE TIME OF SEARCH. THE SAID HANDWRITTE N PAPER CLEARLY MENTIONS THE NAME MR. BHARAT PATEL THE CHANGING OF NAME FROM BHARAT PATEL TO BHARTI PATEL BY THE APPELLANT IS CLEARLY A N AFTERTHOUGHT. THE APPELLANT HAS GONE ON TO STATE FURTHER THAT THE NAR RATION WRITTEN AS 'CASH' ON THIS PAPER IS CORRECT. THIS IS A CONCOCTED STORY , AS NO EVIDENCE WAS FILED IN THIS REGARD EITHER BEFORE THE A.O OR AT THE APPE LLATE STAGE. AT THE REQUEST OF THE APPELLANT ASSESSEE WHEN SUMMONS WERE ISSUED TO SHRI BHARAT PATEL WHOSE ADDRESS WAS PROVIDED BY THE APPELLANT HIMSELF , NONE ATTENDED. IN VIEW OF THE FOREGOING DISCUSSION IT IS CLEAR THA T THE SUM OF RS. 1,52,000/- CLEARLY SHOWS UNEXPLAINED CASH RECEIPT FOR A.Y 2011 -12 AND THE ADDITION MADE BY THE A.O ON THIS COUNT IS CONFIRMED. THE GROUND OF APPEAL IS DISMISSED. 111. LD. COUNSEL FOR THE ASSESSEE CHALLENGED THE FINDIN G OF LD. CIT(A) AND REFERRED FOLLOWING WRITTEN SUBMISSIONS:- GROUND NO. 3 (PAGE 7 OF PB B-2): ADDITION OF RS. 1,52,000/- ON ACCOUNT OF ALLEGED CASH INVESTMENTS.- THE LD. AO HAS MADE THE ADDITION AT PAGE 14, PARA 14.4 ON ACCOUNT OF ENTRY IN BS-L PAGE 61. THE SAID WRITING STATES CASH RECEIVED PAID TO BHARAT PATEL FOR SHARES. IT WAS EX PLAINED TO THE LD. AO THAT THE ASSESSEE HAD MADE THE PAYMENT OF RS.L,50,0 00/- TO SMT. B.S. PATEL FOR ACQUIRING 1000 SHARES OF AYUSHMAN. THE SH ARES WERE TRANSFERRED IN THE NAME OF THE ASSESSEE. THE ASSESS EE HAS FURTHER MADE THE PAYMENT OF RS.L,50,000/- TO BHARAT PATEL WHICH WAS RECEIVED FROM ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 102 BANSAL GROUP. SINCE, IN THE PAPER IT IS MENTIONED A BOUT THE RECEIPT AND PAYMENT, NO INCOME ARISES TO THE ASSESSEE AND AS SU CH NO ADDITION CAN BE MADE ON THIS ACCOUNT. IT IS THEREFORE PRAYED THAT T HE ADDITIONS MAY PLEASE BE DELETED. 112. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE VEHEMEN TLY ARGUED SUPPORTED THE ORDER OF BOTH THE LOWER AUTHOR ITIES. 113. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE REC ORDS PLACED BEFORE US. THE ADDITION OF RS. 1,52,000/- I S CHALLENGED BEFORE US MADE BY THE LD. A.O ON THE BASIS OF PAGE NO.61 OF DIARY BS-1. THE COPY OF THE SHEET IS PLACED BY THE ASSES SEE AT PB/B-2 OF PAPER BOOK DATED 14.06.2017. ON PERUSAL OF THE SHE ET THE DETAILS OF THE TRANSACTION WHICH READS THAT THE CASH RECEIV ED AGAINST RS. 1,50,000/- PAID TO SMT. BHARATI PATEL FOR SHARE OF AMDPL FOLLOWING AMOUNT ON VARIOUS DATES HAVE BEEN PAID :- DATE AMOUNT 10.09.2010 RS.30,000/- 18.09.2010 RS.30,000/- 21.09.2010 RS.50,000/- 25.09.2010 RS.40,000/- TOTAL RS.1,50,000/- ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 103 114. TO EXPLAIN THE ABOVE ENTRIES ASSESSEE HAS MADE THE SUBMISSION THAT THE ACTUAL TRANSACTION DO NOT TOOK PLACE WITH MR. BHARAT PATEL BUT IT WAS WITH SMT. BHARATI PATEL WHI CH WAS IN CONNECTION WITH PURCHASE OF 1000 EQUITY SHARES OF A MDPL. PAYMENT WERE MADE THROUGH CHEQUES. IT WAS ALSO ADD ED IN THE ASSESSEES SUBMISSION THAT LOAN WAS RECEIVED FROM A VINASH GALANDE AT RS. 1,25,000/- AND RS.25,000/- . IT WAS ALSO SUB MITTED THAT THE NARRATION OF CASH WAS WRONGLY WRITTEN. WE HOWEVER FIND NO MERIT IN THE CONTENTION OF THE ASSESSEE AND SUBMISSION MADE BEFORE LOWER AUTHORITIES. NO DOCUMENTARY EVIDENCE FILED TO SHOW THAT LOAN OF RS.1,25,000/- AND RS.25,000/- WAS RECEIVED FOR PUR CHASE OF EQUITY SHARES FROM SMT. BHARTI PATEL AND EVEN THE N OTICE ISSUED TO SHRI BHARAT PATEL AT THE ADDRESS SHOWN BY THE ASSES SEE WAS NOT SERVED. IN ALL THE FACTS AND CIRCUMSTANCES OF THE CASE WHEREIN THE ASSESSEE HAS NOT DENIED THAT THE TRANSACTION APPEARING IN THE LOOSE SHEET AND EXPLANATION GIVEN IS NOT SUFFICIENT TO JU STIFY THE SUBMISSION MADE BY THE ASSESSEE, WE FIND NO REASON TO INTERFERE IN THE FINDING OF LD. CIT(A) AND THUS CONFIRM THE ADDI TION OF RS. 1,50,000/- AND DISMISS THE ASSESSEES GROUND NO.3 F OR ASSESSMENT YEAR 2011-12 IN IT(SS) NO.67/IND/2017. ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 104 115. GROUND NO. 4 & 5 ARE GENERAL IN NATURE WHICH NEEDS NO ADJUDICATION. 116. IN THE RESULT APPEAL OF THE ASSESSEE FOR ASSESSMEN T YEAR 2011- 12 IS PARTLY ALLOWED. 117. NOW WE TAKE UP IT(SS) NO.162/IND/2017 FOR ASSESSME NT YEAR 2012-13 WHEREIN FOLLOWING GROUNDS OF APPEAL WERE RA ISED:- 1.THAT THE ASSESSMENT MADE U/S 153A R.W.S.143(3) OF THE INCOME-TAX ACT BE HELD TO BE BAD IN LAW AND ON FACTS AND BE QUASHE D. 2. THAT THE ADDITION OF RS.1,93,040/- MAINTAINED AN D CONFIRMED BY CIT(A) MADE AS PER PARA NO.9.5 OF THE ASSESSMENT ORDER BE HELD TO BE BAD AND UNJUSTIFIED ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND BE QUASHED AND DELETED. 3.THAT THE ADDITION OF RS.55,00,000/- MADE AS PER P ARA NO.15.15 OF . THE ASSESSMENT ORDER BE HELD TO BE BAD AND UNJUSTIFIED ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND BE QUASHED AND DELETE D. 4.THAT THE ADDITION OF RS.2,80,00,000/- MADE AS PER PARA NO.15.16 OF THE ASSESSMENT ORDER BE HELD TO BE BAD AND UNJUSTIFIED ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND BE QUASHED AND DELETE D. 5. THAT THE ADDITION OF RS.15,00,000/- MADE AS PER PARA NO.1 0.6 OF THE ASSESSMENT ORDER BE HELD TO BE BAD AND UNJUSTIFIED ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND BE QUASHED AND DELETE D. 6. THAT THE ADDITION OF RS.39,500/- MADE AS PER PAR A NO.11.4 OF THE ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 105 ASSESSMENT ORDER BE HELD TO BE BAD AND UNJUSTIFIED ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND BE QUASHED AND DELETE D. 7.THAT THE ADDITION OF RS.21, 16,800/- MADE AS PER PARA NO.12.9 OF THE ASSESSMENT ORDER BE HELD TO BE BAD AND UNJUSTIFIED ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND BE QUASHED AND DELETE D. 8. THAT IN THE ALTERNATIVE AND WITHOUT PREJUDICE TO THE GROUNDS STATED ABOVE THE ADDITIONS MADE BE HELD TO BE HIGHLY UNREA SONABLE AND EXCESSIVE AND BE REDUCED. 9.THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY GR OUND OF APPEAL BEFORE OR DURING THE COURSE OF HEARING OF THE CASE. 118. AT THE OUTSET LD. COUNSEL FOR THE ASSESSEE REQUEST ED FOR NOT PRESSING GROUND NO.1 CHALLENGING THE VALIDITY OF TH E ASSESSMENT MADE U/S 153A R.W.S. 143(3) OF THE ACT. SINCE GROU ND NO.1 HAS NOT BEEN PRESSED THE SAME STANDS DISMISSED AS NOT PRESS ED. 119. APROPOS GROUND NO.2 FOR THE ADDITION OF UNEXPLAINE D CASH OF RS.1,93,040/- WHICH WAS FOUND AT THE ASSESSEES RES IDENTIAL PREMISES THE EXPLANATION GIVEN BY THE ASSESSEE WERE NOT ACCEPTED BY THE LD. A.O AND ADDITION U/S 69A OF THE ACT WAS MADE. ASSESSEES APPEAL AGAINST THE ADDITION OFRS.1,94,34 0/- WAS PARTLY ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 106 ALLOWED SINCE LD. CIT(A) DELETED THE ADDITION OF RS .1300/- AND CONFIRMED THE REMAINING ADDITION OBSERVING AS FOLLO WS:- I HAVE PERUSED THE SUBMISSIONS OF THE LEARNED AR AN D THE ASSESSMENT ORDER. THE APPELLANT ASSESSEE HAS NOT BEEN ABLE TO EXPLAIN THE SOURCE OF CASH FOUND DURING THE SEARCH. THE CASH OF RS. 1,93,040/- COULD NOT BE TALLIED WITH THE BOOKS. THE CASH HAS BEEN FOUND FROM THE RESIDENCE AND LOCKER AMOUNT ING TO RS 70,540/- AND RS 1,22,500/- RESPECTIVELY. CASH KEPT IN LOCKER POINTS TO THE FAC T THAT IT IS UNACCOUNTED AND NOT RECORDED IN THE BOOKS. FOR S AFETY REASONS THE CASH CAN BE DEPOSITED IN BANK ACCOUNT FROM WHERE IT CAN BE UTILIZED AS AND WHEN NEEDED, AS ONCE THE CASH HAS BEEN KEPT IN LOCK ER IT IS NOT READILY AVAILABLE FOR USE. THE PLEA TAKEN BY THE ASSESSEE T HAT CASH OF RS. 1,22,500/- FOR F.Y 2011- 12 WAS RECEIVED FROM BANSAL GROUP CAN NOT BE ACCEPTED AS IT IS NOT RECORDED IN BOOKS OF ACCOUNT. THE CASH FOUND AT THE RESIDENCE DID NOT TALLY WITH THE BOOKS OF ACCOUNT. THE A.O HAS RIGHTLY HELD THAT THE CASH AMOUNTING TO RS. 1,93,040/- HAS NOT BEEN SATISFACTORILY EXPLAINED EVEN THOUGH CLAIMED BY THE APPELLANT THAT THE CASH HAS BEEN RECEIVED FROM BANSAL GROUP THE SAME COULD NOT BE RE CONCILED WITH THE. BOOKS OF ACCOUNTS. BESIDES, THE APPELLANT ASSESSEE HAS NOT BEEN ABLE TO GIVE THE REASONS FOR RECEIVING SUCH HUGE AMOUNTS IN CASH AND THEN KEEPING THE SAME IN BANK LOCKER. THEREFORE, THE CASH FOUND AT RESIDENCE AND LOCKER D URING THE COURSE OF SEARCH AMOUNTING TO RS. 1,93,040/- IS UNEXPLAINED CASH. THE ADDITION MADE BY THE A.O U/S 69A FOR A.Y 2012-13 IS CONFIRMED. 7.2 REGARDING THE FOREIGN CURRENCY FOUND DURING THE SEA RCH THE PLEA TAKEN BY THE APPELLANT THAT US$ 24 BELONGS TO HIS YOUNGER BROTHER SHRI PANKAJ GUPTA WHO IS A US CITIZEN IS REASONABLE. ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 107 IN VIEW OF THE STATUS OF THE APPELLANT AND THE AMOU NT BEING VERY SMALL THE ADDITION ON ACCOUNT OF US$ 24 IS DELETED. 120. AGGRIEVED ASSESSEE IS APPEAL BEFORE THE TRIBUNAL A GAINST THE ADDITION OF RS.1,93,040/-. 121. LD. COUNSEL FOR THE ASSESSEE REFERRED TO THE WRITT EN SUBMISSIONS FILED BEFORE LD. CIT(A) AND ALSO SUBMIT TED THAT ASSESSEE RECEIVED CASH SUM OF RS. 1,45,00,000/-BEFO RE THE DATE OF SEARCH TOWARDS ADVANCE AMOUNT ON ACCOUNT OF DEAL FO R SALE OF EQUITY SHARES HELD IN AMDPL TO BANSAL GROUP. THE S OURCE OF CASH IN HAND IS FROM THE ADVANCE SO RECEIVED. 122. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE VEHEMEN TLY ARGUED SUPPORTED THE ORDER OF LD. CIT(A). 123. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RE CORDS PLACED BEFORE US. THE ADDITION OF RS. 1,93,040/- IS IN DISPUTE WHICH RELATES TO CASH FOUND AT THE RESIDENTIAL PREMISE AN D ADDITION WAS MADE FOR NOT EXPLAINING THE SOURCE OF CASH. WE HOW EVER IN THE INSTANT CASE HAVE DISCUSSED THE FACTS IN THE PRECED ING PARAS. THE ASSESSEE HAD RECEIVED CASH OF RS.90,00,000/- AND RS .55,00,000/- FROM BANSAL GROUP DURING FINANCIAL YEAR 2010-11 AND DURING APRIL ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 108 AND MAY2011 I.E. BEFORE THE DATE OF SEARCH. THUS T HE SOURCE OF CASH IS DULY EXPLAINED WITH THE FACTS EMERGING FROM RECORDS. WE THEREFORE ARE OF THE CONSIDERED VIEW THAT ADDITION OF RS.1,93,040/- NEEDS TO BE DELETED AND WE ACCORDINGLY ORDER SO AND SET ASIDE THE FINDING OF LD. CIT(A) AND ALLOW GROUND NO.2 RAISED BY THE ASSESSEE IN IT(SAS)NO.162/IND/2017. 124. APROPOS GROUND NO.3 & 4 FOR THE ADDITION OF RS.55, 00,000/- AND RS.2,80,00,000/- WE FIND THAT THIS ISSUE WAS CO MMON IN THE CASE OF DR. ASHOK GUPTA ALSO WHICH HAS BEEN ADJUDIC ATED IN THE PRECEDING PARAS WHEREIN WE HAVE DECIDED THAT ADDITI ON MADE BY THE LD. A.O FOR THE ADVANCE SUM RECEIVED AGAINST SALE O F SHARES WAS TO BE TAXED IN THE YEAR WHEN SHARES HAVE BEEN TRANSFER RED I.E. IN THE ASSESSMENT YEAR 2013-14 AND SINCE TOTAL CONSIDERATI ON RECEIVED BY THE SHARE HOLDERS/DIRECTORS IN CASH AND CHEQUE HAVE BEEN ACCOUNTED FOR AND OFFERED TO TAX UNDER THE HEAD LON G TERM CAPITAL GAIN IN ASSESSMENT YEAR 2013-14, NO ADDITION WAS CA LLED FOR IN THE ASSESSMENT YEAR 2011-12 AND 2012-13. WE THEREFORE DELETE THE ALLEGED ADDITION OF RS.55,00,000/- AND RS.2,80,00,0 00/- MADE BY THE LD. A.O FOR THE ADVANCES RECEIVED IN CASH/CHEQU E FROM BANSAL ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 109 GROUP. THE FINDING OF LD. CIT(A) IS SET ASIDE AND GROUND NO.3 & 4 OF THE ASSESSEES APPEAL IS ALLOWED. 125. NOW WE TAKE UP GROUND NO.5 FOR ASSESSMENT YEAR 201 2-13 WHICH RELATES TO ADDITION OF RS.15,00,000/- FOR THE ALLEGED UNEXPLAINED CASH PAYMENTS. THE LD. A.O ON THE BASI S OF THE SEIZED DOCUMENT ANNEXURE BS-3 PAGE 14 TO 17 MADE THIS ADDI TION FOR THE ALLEGED CASH BRIBE GIVEN BY THE ASSESSEE. THE SUBM ISSION OF THE ASSESSEE THAT THESE PAGES 14 TO 17 ARE ROUGH CALCUL ATIONS FOR THE PROJECTS TO BE UNDERTAKEN IN FUTURE AND THERE IS NO ACTUAL TRANSACTION EVER TAKEN PLACE WAS NOT ACCEPTED BY TH E LD. A.O AND HE MADE THE ADDITION FOR RS.15,00,000/-. 126. AGGRIEVED ASSESSEE PREFERRED APPEAL BEFORE LD. CIT (A) BUT FAILED TO SUCCEED AS THE IMPUGNED ADDITION WAS CONF IRMED BY LD. CIT(A) OBSERVING AS FOLLOWS:- I HAVE PERUSED THE SUBMISSIONS OF THE LEARNED AR, THE ASSESSMENT ORDER AND ALSO PERUSED THE CASE RECORD. THE SUBMISSION OF THE APPELLANT THAT THE LOOSE PAPER PAGE NO 14 OF ANNEXURE BS-3 FOUND AND SEIZED FROM T HE PREMISES FROM AYUSHMAN COLLEGE AT HIG-3, SHAHPURA, BHOPAL CONTAINS ONLY ROUGH CAL CULATIONS REGARDING PROPOSED INVESTMENT IN NURSING COLLEGE HAS NO MERIT. THE PAP ER WAS SEIZED FROM THE PREMISES OF THE APPELLANT WHEREBY CLEAR CUT DETAIL OF EXPENSES RELATING TO BRIBES (LOCAL 5LAKHS + 10 ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 110 LAKHS) TO V VM NURSING COLLEGE HAS BEEN MENTIONED. THE SAID EXPENS ES HAS BEEN MADE IN CASH. NO EVIDENCE OR DETAILS AS TO THAT THE SAID LO OSE PAPER CONTAINS ONLY ROUGH CALCULATIONS HAS BEEN PRODUCED EITHER BEFORE THE A. O OR AT THE APPELLATE STAGE. THE PAPER IS HANDWRITTEN AND THE CLAIM OF THE APPELLANT THAT IT IS A 'ROUGH WORKING' IS IN AFTERTHOUGHT. THE FINDINGS OF THE A. 0 THAT IT IS A CONCOCTED STORY MADE BY THE APPELLANT, CALLS FOR NO INTERFERENCE AND THE ADDITION OF RS. 1 5,00,000/- MADE BY THE A.O IS CONFIRMED. THE GROUND OF APPEAL IS DISMISSED. 127. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 128. LD. COUNSEL FOR THE ASSESSEE REFERRED TO THE FOLLO WING WRITTEN SUBMISSIONS PLACED ON RECORD. GROUND NO. 5 (PAGE 12 TO 15 OF PB B-3) : ADDITION OF RS.15,00,000/- BEING THE UNEXPLAINED CASH PAYMENTS - THE LD. AO HA S MADE THIS ADDITION AT PAGE 8, PARA L0 ON THE BASIS OF THE LOO SE PAPER ANNEXURE BS- 3, PAGE 14 TO 17 ON THE GROUND THAT THE ASSESSEE HA S INCURRED THE EXPENSES FOR BRIBES, ETC. IT WAS SUBMITTED THAT THE SE LOOSE PAPERS ARE PROBABLE ESTIMATES OF THE PROJECTS. THIS WAS A ROUG H CALCULATION IN THE SHAPE OF PROJECT REPORTS. THE LD. AO CONCLUDED THAT THE ASSESSEE HAS MADE THE PAYMENTS WHICH ARE UNEXPLAINED. HE HAS REL IED ON THE JUDGMENT OF THE CALCUTTA HIGH COURT AND THE MADRAS HIGH COURT. BOTH THE CASES ARE IN RESPECT OF THE EXPENDITURE INCURRE D BY THE ASSESSEE. IN THE INSTANT CASE, NO CASH OUTFLOW IS MENTIONED BUT THEY ARE THE ESTIMATED PROJECTED AMOUNTS. THE CASE LAWS ARE NOT APPLICABLE IN THE ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 111 ASSESSEE'S CASE. THE LD. CIT(A) HAS UPHELD THESE AD DITIONS IN PARA 8.1, PAGE 35 ON THE GROUND THAT IT IS A CLEAR CUT DETAIL OF EXPENSES FOR BRIBE AND NO EVIDENCE IS PRODUCED BEFORE THE AO OR AT THE APPELLATE STAGE. IT IS HUMBLY SUBMITTED THAT ON PERUSAL OF THE SAID LOOSE PAPER PAGE 14, IT CLEARLY INDICATES THE ROUGH CALCULATIONS OF THE PROJECTS FOR STARTING UP THE NURSING COLLEGE. ON THIS LOOSE PAPER, THE CA LCULATIONS ARE GIVEN INCLUDING THE REQUIREMENT OF LAND, EQUIPMENTS, ETC AND THE SALARIES TO THE STAFFS AND THE CALCULATIONS REGARDING SALARIES TO THE STAFF ARE GIVEN. THE NAMES OF THE EXISTING OTHER COLLEGES HAVE ALSO BEEN GIVEN WHICH ARE VVM NURSING COLLEGE, PRASHAM COLLEGE, RKDF AND RANI DULLAIYA COLLEGE HAVE ALSO BEEN MENTIONED. THE EXPECTED BRIBE OF RS.15,00,000/- IS MENTIONED. SINCE ALL THESE PAPERS ARE THE ESTIMATED PROJECTED REQUIREMENTS, NO ADDITION CAN BE MADE ON THIS GROUN D. THIS PAPER ITSELF INDICATES THAT NO EXPENDITURE IS INCURRED BUT THESE ARE ONLY PROJECTED ESTIMATES. IN VIEW OF 'THIS, THE ADDITIONS MADE DES ERVE TO BE DELETED. 129. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE VEHEMEN TLY ARGUED SUPPORTED THE ORDER OF BOTH THE LOWER AUTHOR ITIES. 130. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RE CORDS PLACED BEFORE US. THROUGH GROUND NO.5 ASSESSEE HAS CHALLENGED THE FINDING OF LD. CIT(A) CONFIRMING THE ADDITION O F RS.15,00,000/- MADE BY LD. A.O FOR THE ALLEGED UNEXPLAINED CASH BR IBES GIVEN ON THE BASIS OF SEIZED DOCUMENT BS-3 PAGE 14 TO 17. L D. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ALLEGED SEIZED DOCUMENTS DEPICTS ROUGH CALCULATION FOR THE PROJECTIONS MADE BY THE ASSESSEE ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 112 FOR PUTTING UP COLLEGES FOR NURSING/PHARMACY/HOMEOP ATHY AND AYURVEDIC. BOTH THE LOWER AUTHORITIES HAVE NOT ACCE PTED THIS CONTENTION. 131. ON PERUSAL OF THE ALLEGED SEIZED DOCUMENT WE FIND THAT AT PAGE-14 THERE IS SOME CALCULATION ABOUT THE NURSING COLLEGE. THIS CALCULATION INCLUDES AREA OF LAND, NUMBER OF BEDS, AREA OF BUILDING IN SQ.FT, PERIOD OF COURSE, FEES FOR VARIOUS TERMS. IN THE MIDDLE OF THE DOCUMENT IT IS MENTIONED THAT BRIBES TO LOCAL R S.5 LAKHS PLUS RS.10 LAKHS. BELOW THIS FRONTS MONTHLY SALARY OF TH E STAFF AND NUMBER OF STAFFS IS MENTIONED. PAGE 15 TALKS ABOUT PHARMACY COLLEGE AND THE FEES OF THE PRINCIPAL AND FEES FOR B.PHARM AND D. PHARM. PAGE 16 TALKS ABOUT HOMEOPATHY COLLEGE AND THE INFRASTRUCTURE TO SET UP. PAGE 16 ALSO TALKS ABOUT THE AYURVEDIC COLLEGE AND THE INFRASTRUCTURE REQUIRED FOR THE AYU RVEDIC COLLEGE. AT PAGE 17 IT SUMMARISES THE INVESTMENT SO MADE IN AL L THE COLLEGES NURSING, PHARMACY AND AYURVEDIC. IF ALL THE FOUR P AGES ARE SEEN TOGETHER IT IS CLEARLY VISIBLE THAT THESE ARE THE P ROJECTIONS FOR THE COLLEGES WHICH WERE PLANNED OR TO BE SET UP IN FUTU RE. THE MENTIONING OF BRIBE OF RS.15 LAKHS IS ONLY ON PAGE 14 OF BS-3 BUT ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 113 THERE ARE OTHER THREE PAGES ALSO AND LIST OF FIGURE S ARE AVAILABLE ON ALL THE PAGES. LD. A.O HAS CHOOSEN ONLY TWO TAKING UP TWO FIGURES I.E. RS.5 LAKHS AND RS.10 LAKHS MENTIONED AGAINST T HE ASSESSEE FOR MAKING ADDITION. NO EFFORTS WERE MADE TO EXAMINE T HE OTHER FIGURES AVAILABLE ON THESE FOUR PAGES. THE SEIZED DOCUMENT DO NOT REVEAL ANYTHING ABOUT THESE COLLEGES BEING SET UP. 132. IN THESE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE WHERE THE ALLEGED DOCUMENTS PRIMARILY SEEMS TO BE PROJECTION FOR DIFFERENT TYPE OF COLLEGES TO BE ESTABLISHED IN FUTURE AND TH ERE IS NO IOTA OF EVIDENCE TO SHOW THAT ANY SUCH INVESTMENT IN COLLE GES HAS BEEN MADE, THEN IN SUCH SITUATION NO ADDITION COULD BE M ADE FOR THE PROPOSED BRIBES MENTIONED IN THE DOCUMENT. LD. CIT (A) ERRED IN NOT TAKING NOTE OF THESE FACTS AND WAS THUS NOT JUS TIFIED IN CONFIRMING THE ACTION OF THE LD. A.O. WE THEREFORE SET ASIDE THE FINDING OF LD. CIT(A) AND DELETE THE ADDITION OF RS .15,00,000/- MADE BY THE LD. A.O ON THE BASIS OF SEIZED DOCUMENT OF P AGE 14 TO 17 OF BS-1 AND ALLOW GROUND NO.5 RAISED BY THE ASSESSEE F OR ASSESSMENT YEAR 2012-13. ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 114 133. NOW WE TAKE UP GROUND NO.6 RELATED TO ADDITION OF RS.39,500/- MADE BY THE LD. A.O FOR UNEXPLAINED EXP ENDITURE CALCULATED ON THE BASIS OF SEIZED DOCUMENT NO.123 O F LPS-3. THIS DOCUMENT SHOWS SOME FIGURE CORRESPONDING TO BILL RS .5,000/- STAMP RS.3,000/-, NOTARY RS.1500/- AND FEES RS.30,0 00/-. IN THE STATEMENT IT WAS STATED THAT ELEMENT OF THESE PAYME NTS TO A PARTICULAR DOCUMENT AS ROUGH CALCULATION. LD. A.O IS NOT SATISFIED WITH THIS SUBMISSION AND HE MADE ADDITION OF RS.39, 500/- FOR UNEXPLAINED EXPENDITURE. ASSESSEES APPEAL BEFORE L D. CIT(A) DID NOT BRING ANY RELIEF AS THE ADDITION WAS CONFIRMED BY LD. CIT(A) OBSERVING AS FOLLOWS:- I HAVE PERUSED THE SUBMISSIONS OF THE LEARNED AA TH E ASSESSMENT ORDER AND THE VARIOUS DECISIONS CITED AND ALSO PERUSED TH E CASE RECORD. IT HAS BEEN STATED BY THE APPELLANT THAT IT IS NOT IN HIS MEMORY AS TO WHICH DOCUMENT THESE EXPENSES RELATE TO AND THE CALCULATI ONS O THE PAPER MAY BE ROUGH WORKING. THE SUBMISSIONS OF THE APPELLANT HAS NO MERIT IN VIEW OF THE ABOVE REPLY WHICH IS UNRELIABLE AND VAGUE AN D HE HAS NO EXPLANATION TO OFFER IN THIS REGARD. THE HANDWRITTEN LOOSE PAPER HAS BEEN SEIZED FROM THE RESIDENCE OF THE APPELLANT ASSESSEE AT THE TIME OF SEARCH. THE SAID HANDWRITTEN LOOSE PAPER CLEARLY SHOWS THAT THE EXPENDITURE AMOUNTING TO RS. 39,500/- HAS BEEN INCURRED IN CASH BY THE APPELLANT ASSESSEE AND WHICH IS NOT BEEN ENTERED IN THE BOOKS OF ACCOUNTS. NO EVIDENCE WHAT SO EVER WAS FILED EITHER BEFORE THE A.O OR DURING APPELLATE PROCEEDINGS TO SUBSTANTIATE THE CLAIM THAT THE ABOV E HANDWRITTEN JOTTINGS ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 115 RELATING TO BILL, STAMP, NOTARY AND FEES DO NOT REL ATE TO THE APPELLANT. THE ADDITION MADE BY THE A.O ON ACCOUNT OF UNEXPLAINED EXPENDITURE U/S 69C FOR A.Y 2 012-13 AMOUNTING TO RS. 39,500/- IS CONFIRMED. 134. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 135. LD. COUNSEL FOR THE ASSESSEE REFERRED TO THE FOLLO WING WRITTEN SUBMISSIONS: GROUND NO. 6 (PAGE 16 OF PB B-3) : ADDITION OF RS.39,500/- ON ACCOUNT OF UNEXPLAINED EXPENDITURE - THE LD. AO HAS MADE THIS ADDITION AT PAGE 9 AND 10, PARA 11 ON THE BASIS OF LOOSE PAPER LPS - 3 , PAGE 123. THIS IS A DUMB DOCUMENT WHICH DOES NOT SPEAK ABOUT EITHER THE RECEIPTS OR THE PAYMENTS. IT CONTAINS THE MENTION OF SOME STAMPS AN D NOTARY CHARGES. NO RECEIPT OR PAYMENT HAS BEEN MENTIONED ON THIS PAPER . IT IS A DUMB DOCUMENT. THE LD. AO HAS TREATED IT TO BE AN UNEXPL AINED EXPENDITURE. THE LD. CIT(A) HAS UPHELD THE ADDITION IN PARA 11.4 , PAGE 38 ON THE GROUND THAT THE ASSESSEE HAS NOT SUBSTANTIATED THE CLAIM BEFORE THE AO OR DURING THE COURSE OF THE APPELLATE PROCEEDING. IT IS HUMBLY SUBMITTED THAT THIS IS A DUMB DOCUMENT WHICH DOES NOT CONTAIN ANY RECEIPT OR PAYMENT. NO ADDITION CAN BE MADE ON THE BASIS OF DUMB DOCUMENT. 136. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE VEHEMEN TLY ARGUED SUPPORTING THE ORDERS OF BOTH THE LOWER AUTH ORITIES. ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 116 137. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE REC ORDS PLACED BEFORE US. ASSESSEE IS AGGRIEVED WITH THE A DDITION OF RS.39,500/- MADE BY LD. A.O AND CONFIRMED BY LD. CI T(A). THIS ADDITION IS ON THE BASIS OF SEIZED DOCUMENT NO.123 OF LPS-3 SHOWING THE PAYMENT OF RS.39,500/- IN TOTAL TOWARDS BILL, STAMP, NOTARY AND FEES. THE ASSESSEE HAS MERELY SUBMITTED THAT IT IS A DUMB DOCUMENT. HOWEVER LOOKING TO THE SEIZED DOCUM ENT, WE FIND THAT ON THIS SHEET THERE ARE OTHER TRANSACTIONS ALS O WHICH HAVE BEEN STRIKED OFF. THERE ARE FIGURES MENTIONED RELA TING TO DIVIDEND WHICH IS ALSO STRIKED OFF. THIS DOCUMENT IS CERTAIN LY RELATING TO THE ASSESSEE. SINCE HE HAS UNABLE TO GIVE ANY EXPLANAT ION TO IT AND THE ACTION OF LD. A.O NEEDS TO BE CONFIRMED. WE THUS F IND NO REASON TO INTERFERE IN THE FINDING OF LD. CIT(A) CONFIRMING T HE ACTION OF LD. A.O FOR THE ADDITION OF RS.39,500/- TOWARDS UNEXPLAINED EXPENDITURE. GROUND NO.6 OF THE ASSESSEES APPEAL STANDS DISMISS ED. 138. NOW WE TAKE UP GROUND NO.7 WHEREIN THE ASSESSEE HA S CHALLENGED THE ADDITION OF RS.21,16,800/- MADE BY T HE LD. A.O ON THE BASIS OF LOOSE PAPER PAGE AT 125 TO 128 OF ANNE XURE LPS-3. BRIEF FACTS RELATING TO THIS ISSUE ARE THAT DURING THE COURSE OF ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 117 SEARCH AT THE PREMISE OF AYUSHMAN COLLEGE SITUATED AT JLIG-3. LAKE VIEW SOCIETY SHAHPURA, BHOPAL HANDWRITTEN LOOSE PAPERS PAGE NO. 125- 128 OFANNEXURE-LPS-3 WERE FOUND AND SEIZED THESE PA PERS ARE THE DETAIL OF PURCHASE OF PROPERTY G-48., MEASURING 588 SQ. FT. @ RS, 9000/- PER SQ.FT. THE TOTAL AMOUNT MADE IS RS 52,92,000/- OUT OF WHICH 31, 75,200 /- (60%) HAS BEEN PAID BY CHEQUE AND REMAINING RS.21,16,800/- (40%) PAID BY CASH. VIDE SHOW CAUSE NOTICE U/S 142(1) DATED 17/02/2014 THE ASSESSEE WAS REQUIRED TO EXPLAIN THE ABOVE CASH PAYMENT FOR PURCHASE OF PROPERTY AND REC ONCILE THE ABOVE WITH HIS REGULAR BOOKS OF ACCOUNTS. THE ASSES SEE WAS ALSO REQUIRED TO SHOW CAUSE WHY THE AMOUNT OF RS. 21,16,800/- NOT BE TREATED AS UNDISCLOSED INCOME AND ADDED TO THE INCO ME OF ASSESSEE FOR A. Y 2012-13. THE ASSESSEE VIDE REPLY DATED 21/02/2014 STATED THAT:- 'REGARDING PAGE NO. 125 TO 128 OF LP S-3 SEIZED FROM THE PREMISES OF AYUSHMAN COLLEGE AT HIG- 3, SHAHPURA, BHOPAL IT IS SUBMITTED THAT THESE PAPERS RELATE TO PROPOSAL FOR PURCHASE OF SHOP AT G REAT INDIA PLACE MALL, KOIAR ROAD, BHOPAL SOME REPRESENTATIVE FROM THE SAID MALL HAD VISITED THE ASSESSEE AND HAD EXPLAINED THE PROPOSAL ON THES E PAPERS. HOWEVER, THE ASSESSEE DID NOT PURCHASE ANY SHOP AT THE SAID MALL AND NO SUCH INVESTMENT AS YOU HAVE MENTIONED IN THIS PARA OF YO UR QUESTIONNAIRE WAS MADE BY THE ASSESSEE EITHER THROUGH CHEQUES OR CASH. ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 118 139. THE SUBMISSION OF THE ASSESSEE WERE NOT FOUND ACCE PTABLE AND LD. A.O COMPLETED THE ASSESSMENT MAKING ADDITION OF THE ALLEGED CASH PAYMENT OF RS.21,16,800/- FOR THE PURCHASE OF SOME PROPERTY. AGGRIEVED ASSESSEE PREFERRED APPEAL BEFORE LD. CIT( A) BUT FAILED TO SUCCEED AS LD. CIT(A) CONFIRMED THE ACTION OF THE L D. A.O OBSERVING AS FOLLOWS:- I HAVE PERUSED THE SUBMISSIONS OF THE LEARNED AR TH E ASSESSMENT ORDER AND THE VARIOUS DECISIONS CITED AND ALSO PERUSED TH E CASE RECORD. THE ASSESSEE 'HAS NOT SUBMITTED ANY MATERIAL EITHER BEF ORE THE A.O OR DURING APPELLATE PROCEEDINGS TO SUBSTANTIATE HIS CLAIM THA T THE LOOSE PAPERS (LPS- 3 PAGE 125 TO 128) RELATE ONLY TO THE PROPOSAL FOR THE PURCHASE F HOP AT GREAT INDIA PLACE MALL, KOLAR ROAD, BHOPAL . .THE A BOVE LOOSE PAPERS CLEARLY SHOWS THAT THE APPELLANT ASSESSEE HAS MADE CASH PAYMENT OF RS, 21,16,800/- AND THE BALANCE OF RS. 31,75,200/- HAS BEEN PAID BY CHEQUE' AND THAT THE APPELLANT ASSESSEE WAS REQUIRED TO MAK E 40 OF THE PAYMENT IN CASH, OUT OF THE TOTAL COST OF THE PROPERTY RS. 52,92,000[-( 40% WORKS OUT TO RS 21,16,800/-) . LPS-3 PAGE 125 TO 1 28 GIVES ME DATE OF POSSESSION' OF THE ABOVE PROPERTY AS ON 31.12.2013 AND SHOWS DETAILS OF PAYM ENT SCHEDULE BY CASH AND BY .CHEQUE. THE PLEA TAKEN BY _ THE APPELLANT HAS NO MERIT BECAUSE BY STATING THAT THE LOOSE PAPERS SEIZED (LPS-3 PAGE 125 TO 128) IS ONLY ROUGH CALCULATIONS OR PROPOSAL WHERE AS IT IS SEEN THAT ACTUAL PAYMENT AS PER SCHEDULE HAS BEEN MADE. PAYMENT SCHEDULE CLEARLY ME NTIONS THAT 40% OF TOTAL COST OF THE PROPERTY RS. 52,92,000/- WHICH WORKS OUT TO RS. 21,16,800/- HAS TO BE MADE IN CASH. UNDER WHAT CIRCUMSTANCES 40 % OF THE TOTAL COST WAS MADE IN CASH, WHEN THE SAME COULD HAVE BEEN PAID THROUGH ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 119 CHEQUE AS THE PAYMENT FOR 60% OF THE COST WAS TO PA ID BY CHEQUE. THIS CLEARLY SHOWS THAT 40% OF THE PAYMENT AMOUNTING TO RS.2 1,16,800/- IS PAID IN CASH AND NOT RECORDED IN THE BOOKS OF ACCOU NT. IN VIEW OF THE ABOVE THE ORDER OF THE A.O CALLS FOR NO INTERFERENCE. THE ADDITION OF RS. 21,16,800/- U/S 69 FOR A.Y 2012-13 IS CONFIRMED. 140. NOW ASSESSEE IN APPEAL BEFORE THE TRIBUNAL. 141. LD. COUNSEL FOR THE ASSESSEE REFERRED TO THE FOLLO WING WRITTEN SUBMISSION:- GROUND NO. 7 (PAGE 17 TO 20 OF PB B-3) : ADDITION OF RS.21,16,800/- ON ACCOUNT OF UNEXPLAINED INVESTMENTS THE LD. AO HAS MADE THIS ADDITION OF RS.21,16,800 AT PAGE 12, PARA 12.9 ON T HE BASIS OF LOOSE PAPER PAGE 125 TO 128 OF LPS 3. THE SAID PAPERS A RE ONLY JOTTINGS IN RESPECT OF SOME SHOP OF 588 SQ. FEET. IT MERELY CON TAINS THE PROPOSAL OF ESTIMATED FIGURES WHICH MENTIONS THE FIGURES OF 15, 75 AND 10. THE ASSESSEE HAS NEITHER PURCHASED ANY SHOP NOR HAS ENT ERED INTO ANY AGREEMENT. NO PAPER WAS FOUND WHICH COULD SHOW THAT THE ASSESSEE HAS PURCHASED OR ENTERED INTO THE AGREEMENT OR HAS PAID ANY MONEY. THESE ARE ALL ESTIMATED PROPOSED OFFER. THE ASSESSEE HAS NEITHER MADE ANY PAYMENT NOR ENTERED INTO ANY AGREEMENT. THE ADDITIO N MADE ON THE HYPOTHETICAL GROUND THAT THE ASSESSEE HAS MADE CASH PAYMENT IS BASED ON SURMISES AND CONJECTURES AND NO ADDITION CAN BE MADE ON THIS GROUND. THE ADDITION DESERVES TO BE DELETED. 142. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY ARGUED SUPPORTED THE ORDERS OF BOTH THE LOWER AUTHO RITIES. ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 120 143. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RE CORDS PLACED BEFORE US. THROUGH GROUND NO.7 ASSESSEE HAS CHALLENGED THE FINDING OF LD. CIT(A) CONFIRMING THE ACTION OF THE LD. A.O MAKING ADDITION FOR UNEXPLAINED CASH INVESTMENT OF RS.21,1 6,800/-. THIS ADDITION WAS MADE BY THE LD. A.O ON THE BASIS OF HI S INTERPRETATION OF THE SEIZED DOCUMENT PAGE 125 TO 128 OF LPS-3 WHI CH ARE PLACED AT PAGE 17 TO 20 OF THE PAPER BOOK PB/B-3 DATED 14. 06.2017. THE ASSESSEES CONTENTION IS THAT THE ALLEGED PAGES ARE THE CALCULATION FOR THE PROPOSED PURCHASE OF IMMOVEABLE PROPERTY WH ICH FINALLY DID NOT MATERIALIZED. SINCE THERE WAS NO ACTUAL TRANSA CTION SO NO ADDITION SHOULD HAVE BEEN MADE FOR THE ALLEGED CASH PAYMENTS. 144. ON PERUSAL OF THE SEIZED DOCUMENT (PB-3 PAGE 125 T O 128) WE FIND THAT ON THE TOP OF THE PAGE 125 IT IS MENTIONE D G-48-588 SQ.FT BELOW THAT THERE IS A CALCULATION OF BUILDING, THE RATE OF RS.9000 PER SQ.FT TO 588 SQ.FT THE RESULTANT FIGURE COMES AS RS . 52,95,000/-. THEREAFTER THERE IS A BIFURCATION OF RS.52,95,000/- IN 60:40 RATIO. 40% IS REFERRED TO BE CASH. THERE ARE FURTHER CALC ULATION ABOUT THE PAYMENTS AND DEDUCTIONS ON THIS ACCOUNT. ON PAGE 1 26 THERE IS THE CALCULATION OF CONSTRUCTION, TIME AND THE THEOR Y OF THE 60:40 ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 121 CONTINUES. PAGE 127 TO 128 ALSO SEEMS TO BE THE FU RTHER CALCULATIONS FOR THE SAME IMMOVEABLE PROPERTY, G-48 WHICH SEEMS TO BE AN EXPANDED FORM OF PAGE 126. THE SEARCH TOO K PLACE ON 2.6.2011. BUT IN PAGE 128 OF LPS-3 IN THE LOWER P ART IT MENTIONS 3 YEARS PERIOD FROM 2011 TO 2013. IN 2011, 2012 & 20 13 TALKS ABOUT THE CHEQUE. IN THE LAST IT SAYS ABOUT THE POSSESSI ON TO BE GIVEN IN THE YEAR 2013. AFTER GOING THROUGH ALL THESE ASPEC TS WE ARE OF THE CONSIDERED VIEW THAT THESE 4 PAGES ARE ROUGH CALCUL ATION MADE FOR PURCHASING THE IMMOVEABLE PROPERTY. IN THE SEIZED DOCUMENT NO SUCH PIECE OF PAPER HAS BEEN UNEARTHED ABOUT ANY TR ANSACTION RELATING TO PURCHASE OR PAYING ADVANCE FOR PURCHASE OF IMMOVEABLE PROPERTY MEASURING 588 SQ.FT. WHEN THE ADDITION WA S PROPOSED TO BE MADE FOR CASH ELEMENT OF 40% OF RS.21,16,800/- T HE LD.A.O WAS UNABLE TO LAY HANDS ON ANY DOCUMENT SHOWING PAYMENT BY CHEQUE OF RS.31,75,200/- HAS BEEN MADE. IT IS THE SETTLED PRINCIPLE THAT ONE CANNOT PICK OR CHOOSE ANY FIGURE FROM THE SEIZED DO CUMENT. TO MAKE THE ADDITION ON THE BASIS OF SEIZED DOCUMENT R EQUIRES THE OVERALL ANALYSIS AND TRANSACTIONS MENTIONED ON THAT PIECE OF PAPER NEEDS TO BE DEALT TOGETHER AND NOT IN PART. ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 122 145. WE THEREFORE IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE ARE OF THE CONSIDERED VIEW THAT SINCE PAGE 125 TO 128 OF L PS-3 ARE ROUGH CALCULATION FOR PROPOSED INVESTMENT IN IMMOVEABLE P ROPERTY, LD. A.O WAS NOT JUSTIFIED IN MAKING THE ADDITION SINCE NO ACTUA L TRANSACTION HAS TAKEN PLACE. WE THEREFORE SET ASIDE THE FINDING OF LD. CIT(A) AND DELETE THE ADDITION OF RS.21,16,800/- AND ALLOW GROUND NO. 7 RAISED BY THE ASSESSEE IN APPEAL FOR ASSESSMENT YEAR 2012-13. 146. GROUND NO. 8 & 9 ARE GENERAL IN NATURE WHICH DOES N OT REQUIRE ANY ADJUDICATION. 147. APPEAL OF THE ASSESSEE DR. NEERAJ KUMAR FOR ASSE SSMENT YEAR 2012-13 IS PARTLY ALLOWED. 148. IN THE RESULT APPEAL NO. IT(SS) NOS. 54 & 161/IND/2017 FOR ASSESSMENT YEARS 2011-12 & 2012-13 OF DR. ASHOK GUP TA AND IT(SS) NO.66, 67 & 162/IND/2017 FOR ASSESSMENT YEARS 2006- 07, 2011-12 & 2012-13 OF DR. NEERAJ GUPTA ARE PARTLY ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 30 .06. 2020 I AGREE SD/- SD/- ( KUL BHARAT) (MANISH BORA D) JUDICIAL MEMBER ACCOUNTANT MEMBER / DATED : 30 TH JUNE, 2020 /DEV ASHOK GUPTA & NEERAJ GUPTA IT(SS)NOS.64, 66,67 & 161 & 162 /IND/17 123 COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CIT (A) CONCERNED/ DR, ITAT, INDORE/GUARD FILE. BY ORDER, ASSTT.REGISTRAR, I.T.A.T., INDORE