ACIT, UDAIPUR V. Shri Vinod Kumar Mehta S/o Sh. Jeevan Singh Mehta, UDAIPUR

ITSSA 67/JODH/2006

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 0136 (ITAT-JODHPUR)
• Duration Of Justice: 7 year(s) 6 month(s) 8 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 23-05-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 04-04-2014
• Assessment Year: misc
• Appeal Filed On: 15-11-2006
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR DEEPAK SEHGAL
• Keywords: Unexplained cash credit; Unexplained investment; Search and seizure; Salary income; Loose papers; Document seized; Corroborative evidences; Documents seized
• Section: 132; 154

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENC H : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITSSA NO. 65/JU/2006 (BLOCK A.Y. 1991-92 TO 2000-01 & UPTO 14/08/2000) VINOD KUMAR MEHTA, VS. THE ACIT ( CENTRAL-1), 25, MEHTON KA TIMBA, 16, MUMAL TOWER, UDAIPUR (RAJASTHAN). SAHELI MARG, UDAIPUR. PAN NO. AGJPM 7394 N (APPELLANT) (RESPONDENT) ITSSA NO. 67/JU/2006 (BLOCK A.Y. 1991-92 TO 2000-01 & UPTO 14/08/2000) ACIT (CENTRAL-1), VS. SHRI VIN OD KUMAR MEHTA, UDAIPUR S/O SHRI JEEVAN SINGH MEHTA, 25, MEHTTON KA TIMBA, NEAR GANTAGHAR, UDAIPUR. PAN NO. AGJPM 7394 N (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI AMIT KOTHARI. DEPARTMENT BY : DR. DEEPAK SEHGAL - D.R. DATE OF HEARING : 04/04/2014. DATE OF PRONOUNCEMENT : 23/05/2014. O R D E R PER N.K. SAINI, A.M 2 THESE CROSS APPEALS BY THE ASSESSEE AND THE DEPART MENT ARE DIRECTED AGAINST THE ORDER DATED 18/08/2006 OF LD. CIT(A), UDAIPUR FOR THE BLOCK PERIOD 1991-92 TO 2000-01 & UPTO 14/08/20 00. 2 FIRST WE WILL DEAL WITH THE ASSESSEES APPEAL IN I .T.A.NO. 65/JU/2006. THE FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: 1. THE LD. CIT(A) ERRED IN LAW AS WELL AS ON THE F ACTS AND CIRCUMSTANCES OF THE CASE IN CONFIRMING THE ADDITION OF UNEXPLAIN ED INVESTMENT IN PROPERTY OF RS. 2,50,000/- MADE BY THE ASSESSING OF FICER. 2. THE LD. CIT(A) ERRED IN LAW AS WELL AS ON THE FA CTS AND CIRCUMSTANCES OF THE CASE IN CONFIRMING THE ADDITION OF UNDISCLOS ED INCOME OF RS. 1,11,000/- MADE BY THE ASSESSING OFFICER ON THE BAS IS OF LOOSE PAPERS FOUND DURING THE COURSE OF SEARCH. 3. THE LD. CIT(A) ERRED IN LAW AS WELL AS ON THE FA CTS AND CIRCUMSTANCES OF THE CASE IN CONFIRMING THE ADDITION OF RENT OF T HE PROPERTY OF RS. 5,400/- FOR THE ASSESSMENT YEAR 2000-01 AND DIRECTI NG THE ASSESSING OFFICER TO RE-COMPUTE THE SAME AFTER GIVING THE RED UCTION OF RS. 900/- ONLY FROM SUCH INCOME. 4. THE APPELLANT RESERVES THE RIGHT TO ADD TO THE A BOVE GROUNDS OF APPEAL AND/OR AMEND, MODIFY AND TO DELETE ANY OF TH EM ON OR BEFORE THE HEARING OF APPEAL. 3. FIRST ISSUE VIDE GROUND NO. 1 RELATES TO THE CONFI RMATION OF ADDITION OF RS. 2,50,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PROPERTY. 4. THE FACTS RELATING TO THIS ISSUE, IN BRIEF, ARE TH AT THE A SEARCH AND SEIZURE OPERATION UNDER SECTION 132 I.T. ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT IN SHORT) WERE CARRIED OUT AT THE R ESIDENTIAL PREMISES OF 3 THE ASSESSEE ON 14/08/2000. IN THE COURSE OF SEARC H, CASH, VALUABLES AND OTHER INCRIMINATING DOCUMENTS WERE FOUND AND SEIZED . THEREAFTER, THE ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 158 B C OF THE ACT. IN RESPONSE TO THE SAID NOTICE, THE ASSESSEE FURNISHED RETURN OF INCOME ON 08/01/2001 DECLARING UNDISCLOSED INCOME AT NIL. TH E ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS, NOTICE D THAT THE ASSESSEE HAD GIVEN ADVANCES OF RS. 1,70,000/-, RS. 40,000/- & RS. 40,000/- FOR THREE SEPARATE PLOTS FROM SHRI UDAI NATHJI AND SHRI MADAV NATH AS PER AGREEMENT PAGED NOS. 32 & 33, 35 & 36 AND 39 & 40 O F ANNEXURE-3, SEIZED DURING THE COURSE OF SEARCH, THE ADVANCES WE RE GIVEN ON 29/08/1998. SHRI UDAI NATHJI HAD FILED AN AFFIDAVI T DATED 13/06/2002 CLAIMING THAT HE HAD NOT RECEIVED RS. 2,50,000/-. THE ASSESSING OFFICER ASKED THE ASSESSEE TO PRODUCE SHRI UDAI NATHJI, BUT HE FAILED TO DO SO. THE ASSESSEE SUBMITTED TO THE ASSESSING OFFICER VID E HIS LETTER DATED 13/06/2002 THAT THE ACTUAL ADVANCE GIVEN BY HIM WAS STATED IN THE DOCUMENTS AND THE TRANSACTION COULD NOT MATERIALIZE , SALE DEED WAS NOT REGISTERED AND NO FURTHER INVESTMENT WAS MADE IN RE SPECT OF ABOVE PROPERTIES. THE ASSESSING OFFICER DID NOT FIND MER IT IN THE EXPLANATION OF THE ASSESSEE BY OBSERVING THAT IT WAS CLEARLY MENTI ONED IN THE DOCUMENTS EXECUTED ON STAMP PAPERS THAT ADVANCES AGGREGATING TO RS. 2,50,000/- 4 HAD BEEN PAID BY THE ASSESSEE ON 29/08/1998. THE A SSESSING OFFICER HELD THAT THE ADVANCE PAID BY THE ASSESSEE ON 29/08/1998 REMAINED UNEXPLAINED. HE ALSO MENTIONED THAT THE ENQUIRY WA S MADE FROM WARD INSPECTOR WHICH REVEALED THAT THOSE PROPERTIES WERE GOT NOT REGISTERED IN THE NAME OF THE ASSESSEE BECAUSE OF THOSE PLOTS WE RE ACQUIRED BY URBAN IMPROVEMENT TRUST (UIT) AND IN LIEU THEREOF THE VEN DOR WAS ALLOTTED TWO PLOTS AT OTHER PLACES. 5. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER T O THE LD. CIT(A) AND SUBMITTED THAT THE DEAL COULD NOT BE THROUGH BE CAUSE OF THE TITLE DEFECT WITH THE UIT AND SHRI UDAI NATHJI HAD GIVEN AFFIDAVIT THAT HE DID NOT RECEIVE ANY AMOUNT OF ADVANCE. 6 . THE LEARNED CIT(A), AFTER CONSIDERING THE SUBMISS IONS OF THE ASSESSEE, OBSERVED THAT IN ALL THE THREE AGREEMENT S FOUND DURING THE COURSE OF SEARCH, IT WAS CLEARLY WRITTEN AND ACCEPT ED BY SHRI UDAI NATHJI THAT HE HAD RECEIVED RS. 1,70,000/-, RS. 40,000/- & RS. 40,000/- AND THERE WAS NO WORDING LIKE WAS TO BE RECEIVED OR WIL L BE RECEIVED. HE FURTHER OBSERVED THAT AGREEMENT WAS THE BASIS FOR R ECEIPT OF ADVANCE MONEY AND AFTER THE SEARCH, THE AFFIDAVIT PREPARED BY THE ASSESSEE AND GIVEN BY SHRI UDAI NATHJI DID NOT HAVE ANY RELEVANC E BECAUSE IT WAS CLEARLY AN AFTERTHOUGHT. HE WAS OF THE VIEW THAT PO WER OF ATTORNEY AND 5 AGREEMENT ACCEPTED AT ONE TIME COULD NOT BE REJECTE D AT NEXT TIME. HE, ACCORDINGLY, CONFIRMED THE ADDITION MADE BY THE ASS ESSING OFFICER. NOW THE ASSESSEE IS IN APPEAL. 7 . LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE S UBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT THE AFFIDAVIT OF SHRI UDAI NATHJI SUBMITTED AT THE TIME OF ASSESSMEN T PROCEEDINGS, CLEARLY INDICATED THAT NO MONEY WAS ACTUALLY RECEIVED OR PA ID AS THE TITLE OF THE PROPERTY WAS NOT CLEAR. HE FURTHER SUBMITTED THAT THE PROPERTY WAS ACQUIRED BY UIT, UDAIPUR, THEREFORE, NO SALE OR TRA NSACTION COULD TAKE PLACE AND THE ASSESSING OFFICER HIMSELF HAD VERIFIE D THAT NO SALE TOOK PLACE, AS SUCH THERE BEING NO INVESTMENT MADE AND T HOSE AGREEMENTS THOUGH RELATED TO THE PERIOD OF 1992, BUT TILL THE DATE OF SEARCH, NO AGREEMENT REGISTRATION COULD TOOK PLACE. THEREFORE , THE ADDITION MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE LD. C IT(A) DESERVES TO BE DELETED. 8 . IN HIS RIVAL SUBMISSIONS, LEARNED D.R. STRONGLY S UPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 9 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IN THE PRESENT 6 CASE, IT IS AN ADMITTED FACT THAT DURING THE COURSE OF SEARCH, AGREEMENTS FOR THREE SEPARATE PLOTS WERE FOUND WHICH INDICATED THAT THE ASSESSEE HAD GIVEN ADVANCES OF RS. 1,70,000/-, RS. 40,000/- & RS. 40,000/- TOTALING TO RS. 2,50,000/- TO SHRI UDAI NATHJI AND SHRI MADHAV NATH. THOSE AGREEMENTS WERE WRITTEN ON THE STAMP PAPERS, THEREFORE, IT CANNOT BE SAID THAT THE ASSESSEE DID NOT MAKE THE PAYMENT EVEN WHEN THE SALE DEED DID NOT MATERIALIZE DUE TO DEFECTIVE TITLE OR THE LAND BEING ACQUIRED BY UIT, UDAIPUR, AS THE ASSESSEE PAID THE ADVANCE T OTALING TO RS. 2,50,000/-, IT WAS HIS DUTY TO EXPLAIN THE SOURCE F OR THE SAME, BUT THE ASSESSEE COULD NOT EXPLAIN THE SOURCE. THEREFORE, THE LD. CIT(A) RIGHTLY CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICE R. IN THAT VIEW OF THE MATTER, WE DO NOT SEE ANY MERIT IN THIS GROUND OF T HE ASSESSEES APPEAL. 10 . VIDE GROUND NO. 2, THE GRIEVANCE OF THE ASSESSEE RELATES TO THE CONFIRMATION OF ADDITION OF RS. 1,11,000/- MADE BY THE ASSESSING OFFICER ON THE BASIS OF LOOSE PAPERS FOUND DURING THE COURS E OF SEARCH. 11 . FACTS RELATING TO THIS ISSUE, IN BRIEF, ARE THAT THE ASSESSING OFFICER ADDED RS. 3,11,000/- AS UNEXPLAINED INCOME AS PER L OOSE PAPER NO. 183 OF ANNEXURE A-2 ON THE GROUND THAT THE AFFIDAVIT FI LED BY SHRI MANSOOR ALI HITAWALA ON 25/07/2002 WAS DEFECTIVE AND MOREOVER THE ASSESSEE 7 HIMSELF HAD ACCEPTED TO HAVE RECEIVED RS. 3,11,000/ - INSTEAD OF RS. 2,00,000/- AS STATED BY SHRI MANSOOR ALI HITAWALA. 12. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER T O THE LD. CIT(A) AND SUBMITTED THAT THE ASSESSEE RECEIVED RS. 3,11,0 00/- FROM SHRI MANSOOR ALI HITAWALA FROM TIME TO TIME ON VARIOUS D ATES AND THE ASSESSING OFFICER COULD NOT HAVE MADE THE ADDITION OF UNDISCLOSED INCOME MERELY ON THE GROUND OF NON-FURNISHING THE DATES OF RECEIPT OF THE SAID AMOUNT. IT WAS FURTHER STATED THAT INITIAL BURDEN O F ONUS LIES UPON THE ASSESSING OFFICER TO PROVE THAT HOW THE UNDISCLOSED INCOME HAD BEEN GENERATED OUT OF THE DETAILS MENTIONED IN THE LOOSE PAPER, BUT THE ASSESSING OFFICER FAILED TO DISCHARGE HIS ONUS TO P ROVE IN THIS REGARD. 13. THE LEARNED CIT(A), AFTER CONSIDERING THE SUBMISSI ONS OF THE ASSESSEE, OBSERVED THAT THE ASSESSING OFFICER ADDE D THE INCOME OF RS. 3,11,000/- ON THE ACCEPTANCE OF THE ASSESSEE TH AT HE HAD RECEIVED RS. 3,11,000/- INSTEAD OF RS. 2,00,000/- FROM SHRI MANSOOR ALI HITAWALA AND ONCE THE ASSESSEE HAD ACCEPTED THE HIGH RECEIPT S WHY SHOULD THE ASSESSING OFFICER DISPUTED THE RECEIPTS OF HIGHER I NCOME AND SECONDLY, THE ASSESSING OFFICER HAD NOT GIVEN CREDIT OF RS. 2 ,00,000/- ON THE GROUND THAT THE DATES OF GIVING/RECEIVING WERE NOT GIVEN B Y THE ASSESSEE. THE 8 LD. CIT(A) WAS OF THE VIEW THAT ONCE THE ASSESSEE H IMSELF HAD ACCEPTED TO HAVE RECEIVED RS. 3,11,000/-, THERE WAS NO BURDE N OF ONUS UPON THE ASSESSING OFFICER TO PROVE OTHERWISE. HOWEVER, THE LD. CIT(A) WAS OF THE VIEW THAT THE CREDIT OF RS. 2,00,000/- SHOULD HAVE BEEN GIVEN BY THE ASSESSING OFFICER WHICH HE HAD NOT GIVEN. HE THERE FORE, SUSTAINED THE ADDITION OF RS. 1,11,000/- AND ALLOWED THE RELIEF O F RS. 2,00,000/-. NOW THE ASSESSEE IS IN APPEAL. 14. LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SU BMISSIONS MADE BEFORE THE AUTHORITIES BELOW. IN HIS RIVAL SUBMISS IONS, LEARNED D.R. RELIED ON THE ORDER OF THE ASSESSING OFFICER. 15. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PAR TIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IN THE PRESENT CASE, IT APPEARS THAT THE ASSESSING OFFICER MADE TH E ADDITION OF RS. 3,11,000/- ONLY ON THE BASIS OF ACCEPTANCE BY T HE ASSESSEE, WHO STATED THAT HE RECEIVED RS. 3,11,000/- AND NOT RS. 2,00,000/- FROM SHRI MANSOOR ALI HITAWALA AS MENTIONED IN THE LOOSE PAPE RS FOUND DURING THE COURSE OF SEARCH. THE ASSESSING OFFICER WHILE MAKI NG THE ADDITION OF RS. 3,11,000/- DID NOT ALLOW THE CREDIT OF RS. 2,00,000 /- WHICH WAS DISCLOSED BY THE ASSESSEE ON THE BASIS OF ACCEPTANCE BY SHRI MANSOOR ALI HITAWALA. 9 THEREFORE, THE LD. CIT(A) WAS FULLY JUSTIFIED IN DI RECTING THE ASSESSING OFFICER TO ALLOW THE CREDIT OF RS. 2,00,000/- I.E. THE AMOUNT WHICH WAS GIVEN TO THE ASSESSEE BY SHRI MANSOOR ALI HITAWALA. WE, THEREFORE, DO NOT SEE ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A), W HO SUSTAINED THE ADDITION OF RS. 1,11,000/-. 16. GROUND NO. 3 WAS NOT ARGUED CONSIDERING THE SMALLN ESS OF THE AMOUNT INVOLVED. THEREFORE,, THE SAID GROUND IS DI SMISSED. 17 NOW WE WILL DEAL WITH THE APPEAL OF THE DEPARTMENT IN I.T.A.NO. 67/JU/2006. THE FOLLOWING GROUNDS HAVE BEEN RAISE D IN THIS APPEAL:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT (A), UDAIPUR HAS ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF C ASH FOUND DURING THE SEARCH, BY RELYING ON THE AFFIDAVITS FILED BY THE ASSESSEE, WHEN A.O, HAS CLEARLY POINTED OUT DEFICIENCIES IN THE SAME AND SHOWN THEM TO BE SELF-SERVING. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THIS CASE, THE LD. CIT (A), UDAIPUR HAS ERRED IN DELETING THE ADDITION OF RS. 4 0000/- MADE BY THE A.O, ON ACCOUNT OF UNEXPLAINED INVESTMENT IN GO LD ORNAMENTS. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THIS CASE, THE LD. CIT (A), UDAIPUR HAS ERRED IN DELETING THE ADDITION OF RS. 4 00000/- MADE BY THE A.O. ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PL OT AT N.H. 8, GOVERDHAN VILAS, UDAIPUR ON THE BASIS OF SEIZED PAG ES NO. 59 TO 61 OF ANRTEXURE-A-4. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THIS CASE, THE LD. CIT (A), UDAIPUR HAS ERRED IN DELETING THE ADDITION OF RS. 5 1000/- MADE BY THE A.O. ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PA RTNERSHIP FOR 10 SHARE OF PROFIT IN PETROL PUMP ON THE BASIS OF SEIZ ED PAGES NO. 65 AND 66 OF ANNEXURE-A-3. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF FT IS CASE , THE LD. CIT (A), UDAIPUR HAS ERRED IN DELETING THE ADDITION OF RS. 2 7101/- MADE BY THE A.O. ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PL OT NO. 152-8, HIRAN MAGRI, SECTOR-4, UDAIPUR ON THE BASIS OF SEIZ ED PAGE NO. 162 OF ANNEXURE-A-3. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THIS CASE, THE LD. CIT (A), UDAIPUR HAS ERRED IN DELETING THE ADDITION OF RS, 3 50000/- MADE BY THE A.O. ON ACCOUNT OF UNDISCLOSED SHARE OF PROFIT WITH SHRI SAGAR MAL KOTHARI ON THE BASIS OF FIR AS PER SEIZED PAGES NO. 90 AND 91 OF ANNEXURE-A-5. 7. ON THE FACTS AND IN THE CIRCUMSTANCES OF THIS CASE, THE LD. CIT (A), UDAIPUR HAS ERRED IN DELETING THE ADDITIONS OF RS, 543800/- MADE BY THE A.O, ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PR OPERTIES, ADDITION OF RS. 8700/- ON ACCOUNT OF UNEXPLAINED IN VESTMENT IN SHARES AND ADDITION OF RS. 20395/- ON ACCOUNT OF UN EXPLAINED INVESTMENT IN FDRS IN THE NAME OF SHRI DILIP KUMAR MEHTA AND SMT. SEEMA MEHTA. 8. ON THE FACTS AND IN THE CIRCUMSTANCES OF THIS CASE, THE LD. CIT (A), UDAIPUR HAS ERRED IN DELETING THE ADDITION OF RS. 1 62000/- AND 170000/- MADE BY THE A.O. ON ACCOUNT OF UNEXPLAINED CREDIT ENTRIES AS RECORDED ON THE SEIZED PAGE NO, 183 OF ANNEXURE-A-2. 9. ON THE FACTS AND IN THE CIRCUMSTANCES OF THIS CA SE, THE LD. CIT (A), UDAIPUR HAS ERRED IN DELETING THE ADDITION OF RS, 5 46145/- MADE BY THE A.O. ON ACCOUNT OF UNDISCLOSED INCOME FROM PROP ERTY, BROKERAGE AND COMMISSION AS ADMITTED BY THE ASSESSEE IN HIS S TATEMENT RECORDED DURING THE COURSE OF SEARCH PROCEEDINGS. 10. THE ID. CIT (A), UDAIPUR ERRED IN LAW AND FACTS WHILE DELETING THE SURCHARGE LEVIED AS THE FINANCE ACT CLEARLY LAID DO WN THAT SURCHARGE IS LEVIABLE ON RATES PRESCRIBED U/S 113 TO THE ACT. SE CTION 113 PRESCRIBES RATES FOR THE BLOCK PERIOD ONLY. THE RATES FOR BLOC K PERIOD WOULD BE GOVERNED BY CHARGING SECTION 4 OF THE ACT, WHICH SA YS THAT RATES PRESCRIBED UNDER CENTRAL ACT WOULD BE APPLICABLE, T O INCOME OF PREVIOUS YEARS. 11 11. EXERCISE OF APPELLANT POWER BEING QUASI-JUDICI AL, THE CIT(A) HAS ERRED IN NOT FOLLOWING PRINCIPLE LAID DOWN BY THE HON'BLE SU PREME COURT IN RANGNATH DAULAT RAO (1975) 1SCC 686; AIR 1975 SC 21 46, 2149 THAT APPELLATE AUTHORITIES, WHILE DECIDING APPEALS, MUST PASS SPEAKING ORDER RECORDING REASON IN SUPPORT THEREOF. THE RELIEF GRA NTED BY THE CIT(A) IS ON FLIMSY GROUNDS WITHOUT RECORDING REASONS IN SUPPORT OF HIS DECISION WHEN THE A.O, HAS GIVEN COGENT REASONS FOR EACH ADDITION MADE. 18. FIRST ISSUE VIDE GROUND NO. 1 RELATES TO THE DELET ION OF ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF CASH F OUND DURING THE COURSE OF SEARCH. 19 FACTS RELATING TO THIS ISSUE, IN BRIEF, ARE THAT D URING THE COURSE OF ASSESSMENT PROCEEDINGS, CASH AMOUNTING TO RS. 4,96, 535/- WAS FOUND, OUT OF WHICH RS. 4,50,000/- WAS SEIZED. THE ASSESSEE P RODUCED AFFIDAVITS, COPY OF AGREEMENTS, RECEIPTS, CONFIRMATIONS AND EXP LAINED THE SOURCE OF CASH. HOWEVER,, THE ASSESSING OFFICER DID NOT ACCE PT THE EXPLANATION AND ADDED THE AMOUNT OF RS. 4,78,000/- CONSIDERING THE SAME AS UNEXPLAINED. 20 BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER T O THE LD. CIT(A) AND CLAIMED TO HAVE RECEIVED THE FOLLOWING AMOUNTS AS UNDER:- S.NO. PARTICULARS AMOUNT IN (RS.) 1 AMOUNT RECEIVED FROM SHRI RAJENDRA SINGH KACHAWA, PROP. OF M/S. CHANDRA SINGH & SONS 1,65,000/- 2 AMOUNT RECEIVED FROM SHRI MANSOOR ALI 1,50,000/- 12 HITAWALA 3. CASH BELONGING TO SHRI ANIL MEHTA 85 ,000/- 4 CASH BELONGING TO SHRI DILIP MEHTA 28, 000/- 5. AMOUNT RECEIVED FROM MISS. NEENA AGARWAL 50,000/- 6. TOTAL 4,78,000/- 21 THE LD. CIT(A) DISCUSSED THE FACTS RELATING TO THIS ISSUE SUBMISSIONS OF THE ASSESSEE AND HIS FINDINGS IN RESPECT OF EACH OF THE ABOVE SAID AMOUNTS IN PARA 2.3 TO 2.22 WHICH ARE REPRODUCED VE RBATIM AS UNDER:- 2.3. SHRI RAIENDRA SINGH RS. 1,10,000/- THE ASSESSEE RECEIVED RS. 1,10,000/- FROM SHRI RAJE DNRA SINGH RATHORE AS ADVANCE MONEY ON ACCOUNT OF PURCHASE OF LAND OF SHR I DHANRAJ SITUATED AT VILL. KARPINA. THIS AMOUNT WAS LYING IN THE TI JORI AND FOUND AT THE TIME OF SEARCH. THE A/R HAS SUBMITTED- (I) COPY OF AGREEMENT EXECUTED ON STAMP PAPER OF RS. 10 /- ON 6-11 -96 AND AFFIDAVIT OF SHRI DHANRAJ. (II) SHRI DHANRAJ, THE SELLER OF THE LAND HAD EXECUTED A POWER OF ATTORNEY IN FAVOUR OF THE APPELLANT SHRI VINOD KUMAR MEHTA. (III) THE DETAILS OF RECEIPT OF RS. 1,10,000/- I .E. RS.30,000/- IN CASH ON 6-11-96, RS.50,000/- IN CASH ON 14-1-97 AND RS.30,0 00/- IN CASH ON 27-3-97. 2.4. THE AO HAS NOT ACCEPTED THE EXPLANATION OF THE APPELLANT ON THE GROUND THAT THE APPELLANT WAS HAVING TWO BANK ACCOU NT, EVEN THEN HE KEPT THIS CASH IN HIS RESIDENCE FOR A PERIOD OF MORE THAN 5 YEARS. THE APPELLANT HAD ISSUED A CHEQUE OF RS. 1,00,000/- DATED 5-4-98 IN FAVOUR OF SHRI SHYAM SUNDER AGARWAL WHICH COULD NOT BE ENCASHED DUE TO NON AVAILABILITY OF CASH BALANCE IN HIS BANK ACC OUNT. THEREFORE, THE ASSESSING OFFICER CONCLUDED THAT THE CASH FOUND AT HIS RESIDENCE IS NOT THE SAME WHICH HAS BEEN RECEIVED FROM SHRI RAJENDRA SINGH RATHORE. 13 THE AR OF THE APPELLANT HAS REITERATED THE SAM E FACTS WHICH WERE ALREADY SUBMITTED AT THE TIME OF ASSESSMENT PR OCEEDINGS. 2.5. I HAVE GONE THROUGH THE FACTS AND SUBMISSION O F THE CASE AND FOUND THAT THE APPELLANT RECEIVED RS.1,10,000/- O N 6-11-98 FROM SHRI RAJEDNRA SINGH RATHORE. IN ITS SUPPORT THE APPELL ANT HAS SUBMITTED COPY OF AGREEMENT BETWEEN SHRI DHANRAJ, THE SELLER AND SHRI R.S. RATHORE, THE PURCHASER, THE AFFIDAVIT OF SHRI DHANR AJ AND POWER OF ATTORNEY OF SHRI DHANRAJ TO THE APPELLANT SHRI VINO D KUMAR MEHTA. OF COURSE THE DEAL COULD NOT MATERIALIZE BECAUSE OF TH E ONWERSHIP DISPUTE OF THE LAND BETWEEN SHRI DHANRAJ AND FOREST DEPARTM ENT. THERE IS ALSO A SUIT PENDING AGAINST SHRI VINOD MEHTA IN CIVIL CO URT, UDAIPUR FOR DISHONOUR OF CHEQUE OF RS. 1,10,000/- ISSUED BY THE APPELLANT IN FAVOUR OF SHRI R.S. RATHORE. 2.6. MOREOVER IT IS NOT NECESSARY TO DEPOSIT THE CASH AM OUNT RECEIVED FROM THE BUYER OR SELLER IN BANK ACCOUNT. IT CAN BE KEPT AT THE RESIDENCE ALSO FOR IMMEDIATE REQUIREMENT AS THE APPELLANT IS A BROKER IN PURCHASE/SALE OF LAND. 2.7. THE A.O'S REJECTION OF APPELLANT'S CONTENTION ON TE CHNICAL GROUND OF NON MENTION OF THE DATE OF POWER OF ATTORNEY AND IN SERTION OF DATE IN AFFIDAVIT AND THE AGREEMENT AND SIGNATURE ALSO IS N OT JUSTIFIED AS ON ALL THE THREE PAPERS I.E AGREEMENT, POWER OF ATTORNEY AND A FFIDAVIT, DATE IS MENTIONED EXCEPT IN POWER OF ATTORNEY AND THE SIGNA TURE ALSO. THE POWER OF ATTORNEY IS NOTARIZED ON 24-6-96. THE AO SHOULD HAVE IN FACT EXAMINED THE ISSUE ON MERIT I.E. WHETHER SHRI RAJEN DRA SINGH RATHORE WAS ASSESSED TO TAX, WHETHER HE HAD THE SUFFICIENT CASH BALANCE AVAILABLE BEFORE 6-11-98 TO ADVANCE THE CASH AMOUNT OF RS. 1,10,000/ -. AS FAR AS THE TRANSACTION BETWEEN DHANRAJ AND RAJENDRA SINGH RATH ORE AND THE APPELLANT SHRI V.K. MEHTA, BEING BROKER THERE IS NO DISPUTE O R DOUBT AS SUPPORTED BY THE AGREEMENT BETWEEN SHRI DHANRAJ AND SHRI RAJENDRA SI NGH RATHORE, POWER OF ATTORNEY OF SHRI DHANRAJ GIVEN TO SHRI VINOD KUMAR MEHTA AND THE AFFIDAVIT OF SHRI DHANRAJ THAT THE AGREEMENT HAS BEEN MADE AND A DVANCE HAS BEEN TAKEN BY SHRI VINOD KUMAR MEHTA. THE REJECTION BY THE AO ON TECHNICAL GROUND IS NOT SUSTAINABLE. ALL THE DOCUMENTARY EVIDENCES WER E AVAILABLE ON RECORD AND HAS BEEN FURNISHED AT THE TIME OF APPELLATE PRO CEEDINGS ALSO. THEREFORE, THE ADDITION OF RS. 1,10,000/- MADE BY T HE AO IS DELETED. 14 II. RS. 1,00,000/- SHRI MADAN SINGH: 2.8. THE AMOUNT WAS RECEIVED ON 8-4-98 BY THE APPEL LANT SHRI VINOD KUMAR AS ADVANCE FROM SHRI RAJENDRA SINGH RATHORE FOR PUR CHASE OF LAND OF SHRI MADAN SINGH S/O SHRI GANGA SINGH RAJPUT. THE AO DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE AT THE TIME OF ASSESSMEN T PROCEEDINGS ON THE GROUND THAT IT WAS UNBELIEVABLE THAT THE AMOUNT OF RS. 1,00,000/- RECEIVED ON 8-4-98 WAS KEPT INTACT UPTO 14-8-2000. 2.9. THE A/R OF THE APPELLANT HAS SUBMITTED IN THIS REGARD THAT THE APPELLANT HAD NEGOTIATED THE TRANSACTION OF SALE OF PLOT OWNED BY SHRI MADAN SINGH RAJPUT TO SHRI RAJENDRA SINGH RATHORE A ND HAD POWER OF ATTORNEY ALSO IN HIS FAVOUR. THE APPELLANT HAS ALSO FURNISHED THE AGREEMENT BETWEEN SHRI MADAN SINGH AND SHRI RAJEDNRA SINGH DA TED 29-3-97, AFFIDAVIT OF SHRI MADAN SINGH DATED 28-5-2002 AND P OWER OF ATTORNEY BY SHRI MADAN SINGH IN FAVOUR OF THE APPELLANT SHRI VI NOD KUMAR MEHTA. 2.10. HAVING GONE THROUGH THE FACTS OF THE CASE AND SUBMISSION OF THE LD. A/R OF THE APPELLANT I HAVE FOUND THAT THERE IS NO DISPUTE/DOUBT ABOUT THE TRANSACTION BETWEEN SHRI MADAN SINGH AND SHRI RAJEN DRA SINGH RATHORE AND THE RECEIPT OF RS. 1,00,000/- BY SHRI VINOD KUM AR MEHTA FROM SHRI RAJENDRA SINGH RATHORE. ALL THE ABOVE MENTIONED EVI DENCES I.E. AGREEMENT, POWER OF ATTORNEY AND AFFIDAVIT WERE AVA ILABLE WITH THE AO AND HAS BEEN FURNISHED NOW AT THE TIME OF APPELLATE PROCEEDINGS ALSO. IN FACT THEY ARE THE SEIZED DOCUMENTS. THE AO DID NOT ACCEPT THE CONTENTION OF THE APPELLANT MERELY ON THE GROUND THAT IT IS UN BELIEVABLE TO HAVE KEPT RS. 1,00,000/- CASH RECEIVED IN 1998 IN THE TIJORI TILL 14-8-2000. THE AO HAS NOT DISCUSSED THE ISSUE ON MERIT, QUESTIONING THE O WNERSHIP OF THE LAND, TRANSACTION BETWEEN SHRI MADAN SINGH AND SHRI RAJEN DRA SINGH RATHORE, THE RECEIPT OF ADVANCE AND PAYMENT OF SUB-BROKERAGE OF RS.5,000/- TO ONE SOBHALAL AND RS.40,000/- TO SHRI NAJUMAUL HUSSA IN CHIPPA. AS THERE IS NO OTHER SOURCE OF INCOME OF THE APPELLANT, IT I S VERY MUCH POSSIBLE THAT THE SAME CASH AMOUNT RECEIVED AS ADVANCE FROM SHRI RAJENDRA SINGH RATHORE IN 1998, WAS KEPT IN TIJORI AT THE RESIDENC E. THE TRANSACTION DID NOT MATERIALIZE BECAUSE OF DISPUTE OF TITLE. THE SUIT W AS PENDING IN REVENUE BOARD, AJMER AND HAS BEEN REMAND BACK TO THE TEHSIL DAR, GIRWA. THEREFORE, THE ADDITION MADE BY THE AO IS DELETED. THE APPEAL IS ALLOWED ON THIS POINT. 15 2.11. RS.1,50,000/- SHRI MANSOOR ALI HITAWALA: THIS AMOUNT WAS RECEIVED BY THE APPELLANT FROM SHRI MANSOOR ALI HITAWALA FOR PURCHASE OF PETROL PUMP SITUATED AT SA RDARPURA OWNED BY SMT. PYARI BAI W/O LATE SHRI PRITHVIRAJ BHOI. THE AGREEM ENT FOR THIS TRANSACTION BETWEEN SMT. PYARI BAI AND SHRI MANSOOR ALI WAS MAD E ON 16-3-1996. THE TRANSACTION OF PETROL PUMP DID NOT MATERIALIZE. THE REFORE, 1,50,000/- WAS RETURNED BACK TO SHRI MANSOOR ALI. THE ASSESSEE HAD FURNISHED LICENSE OF PETROL PUMP, CONFIRMATION OF RETURN OF RS. 1,50,000/- FROM PYARI BAI, AFFIDAVIT OF SMT. PYARI BAI, AFFIDAVIT OF SHRI MANSOOR ALI AND CIVIL SUIT OF THE TITLE AT THE TIME OF ASSESSMENT PROCEEDINGS. THE AO DID NOT ACCEPT THE C ONTENTION OF THE APPELLANT ON THE GROUND THAT THE SOURCE OF INCOME O F SHRI MANSOOR ALI HITAWALA AND QUANTUM OF INCOME PER ANNUM NOT MENTIO NED. THE DATE OF AFFIDAVIT IS INSERTED LATERON IN AFFIDAVIT OF SHRI MANSOOR ALI. SIGNATURE IS ALSO NOT THERE. DATE OF RECEIVING OF RS. 1,50,000/- BY S HRI VINOD KUMAR MEHTA NOT MENTIONED. DATE 4-7-1998 HAS BEEN INSERTED LATERON AND NOT SIGNED BY THE DEPONENT. SIMILAR IS THE CASE OF AFFIDAVIT OF SMT. PYARI BAI. THE AO HAD ASKED THE ASSESSEE TO PRODUCE SMT. PYARI BAI AND SHRI MAN SOOR ALI HITAWALA FOR EXAMINATION OF THE CONTENTS DEPOSED IN THEIR AFFIDA VITS. THE APPELLANT DID NOT PRODUCE THEM. 2.12. THE A/R OF THE APPELLANT HAS REITERATED THE S AME FACTS AS GIVEN AT THE TIME OF ASSESSMENT PROCEEDINGS AND FURTHER POINTED OUT THAT THE DEFECTS POINTED OUT BY THE AO IN AFFIDAVITS ARE NOT INHEREN T DEFECT BUT MINOR IRREGULARITIES WHICH DO NOT INVALIDATE THE CONTENTS OF THE AFFIDAVITS. THE A/R ALSO FURNISHED THE PAN NO. AAHPH6148 M OF SHRI MANS OOR ALI HITAWALA AND PRODUCED BANK PASS BOOK NO.225960 OF BANK OF RAJAST HAN, UDAIPUR OF THE APPELLANT WHEREIN RS.1,50,000/- IS CREDITED THROUGH CLEARING ON 23-1-1996. NO ADVERSE INFERENCE CAN BE DRAWN ON THE BASIS NON-PRO DUCTION OF SHRI MANSOOR ALI AND SMT. PYARI BAI FOR EXAMINATION. 2.13. HAVING GONE THROUGH THE FACTS AND SUBMISSION, I FIN D THAT THE AO HAS NOT POINTED OUT ANY SUBSTANTIVE DISCREPANCY ABO UT THE RECEIPT AND REPAYMENT OF ADVANCE OF RS.1,50,000/- FOR TRANSAC TION OF THE PETROL PUMP AND NON MATERIALIZATION OF THE TRANSACTION DUE TO D ISPUTE OF TITLE. THE A/R HAS ALSO FURNISHED THE DOCUMENTARY EVIDENCE I.E AFF IDAVIT, AGREEMENT, CONFIRMATION, INFORMATION OF CIVIL SUIT, PAN OF SHR I MANSOOR ALI AND BANK PASS BOOK OF THE APPELLANT SHRI VINOD KUMAR MEHTA. THE M ENTIONING OF DATE IN HAND 16 WRITING DOES NOT MEAN THAT IT HAS BEEN INSERTED LAT ER ON. THE NOTARY HAS SIGNED AND MENTIONED THE DATE 21-7-2002 IN THE AFFI DAVIT OF SMT. PYARI BAI. SMT PYARI BAI HAS PUT HER THUMB IMPRESSION AS DEPON ENT. THE DATE OF RECEIVING AND GIVING BACK OF CASH HAS ALSO BEEN FURNISHED BY THE LD. A/R. THE ADDITION MADE BY THE AO IS NOT SUSTAINABLE. THEREFO RE, THE ADDITION IS DELETED. THE APPEAL IS ALLOWED ON THIS GROUND. 2.14. RS.85.000/- SHRI ANIL KUMAR MEHTA: DURING THE COURSE OF SEARCH ITSELF SHRI ANIL KUMAR MEHTA, YOUNGER BROTHER OF THE APPELLANT HAD GIVEN THE STATEMENT TH AT RS.85,000/- BELONGED TO HIM. THE A/R HAD SUBMITTED AT THE TIME OF ASSESS MENT PROCEEDINGS THAT HE WAS RUNNING A PRINTING PRESS IN THE NAME OF ANKU R SALES, INSIDE SURAJ POLE, UDAIPUR. HE HAD TAKEN AN UNSECURED LOAN OF RS.45,00 0/- FROM SHRI MADAN MOHAN S/O SHRI NATHULAL AND RS.40,000/- OUT OF HIS OWN SAVINGS. THE AO DID NOT ACCEPT THE CONTENTION ON THE GROUND THAT THE AP PELLANT DID NOT FURNISH THE CONFIRMATION FROM SHRI ANIL KUMAR MEHTA AND SHRI AN IL KUMAR COULD NOT EXPLAIN THE SOURCE OF RS.85,000/- AT THE TIME OF SE ARCH. 2.15. THE LD. A/R OF THE APPELLANT HAS REITERATED T HE SAME FACTS AND ARGUMENTS AS AT THE TIME OF ASSESSMENT PROCEEDINGS. HE HAS NOW FURNISH THE CONFIRMATION FROM SHRI MADAN MOHAN FOR UNSECURED LO AN OF RS,45,000/-. 2.16. HAVING GONE THROUGH THE FACTS AND SUBMISSION I FOUN D THAT THE APPELLANT HAS EXPLAINED THE CASH AMOUNT OFRS.85,000 /- BY WAY OF ACCEPTANCE BY SHRI ANIL KUMAR MEHTA, YOUNGER BROTHE R OF THE APPELLANT AT THE TIME OF SEARCH ITSELF. DURING THE ASSESSMENT PR OCEEDINGS ALSO THE APPELLANT EXPLAINED THAT RS.40,000/- OUT OF SAVINGS OF SHRI ANIL KUMAR AND RS.45,000/- AS UNSECURED LOAN FROM SHRI MADAN MOHAN . THUS THE APPELLANT HAS DISCHARGED HIS ONUS FOR PROVING THE C ASH AMOUNT OF RS.85,000/-. THE ONUS SHIFTED TO THE AO. IT WAS HIS DUTY TO CALL SHRI ANIL KUMAR AND EXAMINE HIM ABOUT THE SOURCE OF THE SAVIN G AMOUNT OF RS.40,000/- AND WHERE ABOUT OF SHRI MADAN MOHAN. HO WEVER, THE ASSESSING OFFICER HAS NOT DONE THE SAME. HE, THEREF ORE, CANNOT SHIFT HIS ONUS UPON THE APPELLANT. THEREFORE, THE ADDITION MA DE BY THE AO IS DELETED. THE APPEAL IS ALLOWED ON MIDPOINT TOO. 17 2.17. RS.28.000/- SHRI DILIP KUMAR MEHTA: OUT OF RS. 1,78,000/- FOUND FROM THE ROOM OF SHRI D ILIP KUMAR MEHTA, RS. 1,50,000/- HAS BEEN CLAIMED BY THE APPEL LANT AND THE BALANCE RS.28,000/- BELONGED TO HIS BROTHER SHRI DILIP KUMA R MEHTA WHO IS A STATE GOVT. EMPLOYEE. THE APPELLANT HAD FURNISHED THE AFF IDAVIT OF SHRI DILIP KUMAR MEHTA IN RESPECT OF CASH AMOUNT OF RS.28,000/ -. THE AO DID NOT ACCEPT THE CONTENTION OF THE APPELLANT ON THE GROUN D OF NO SOURCE OF INCOME, DATE IN THE AFFIDAVIT INSERTED LATERON, NO DETAILS OF PURCHASE OF SHARES AND FDRS ETC. 2.18. THE LD. A/R HAS REITERATED THE SAME FACTS AS AT THE TIME OF ASSESSMENT PROCEEDINGS. 2.19. ON GOING THROUGH THE FACTS AND AFFIDAVIT OF S HRI DILIP KUMAR MEHTA IT IS SEEN THAT HE IS ASSESSED TO TAX WITH PAN ADAPM2704L . HE IS A STATE GOVERNMENT EMPLOYEE. HE IS 47 YEARS OF AGE AND HAVI NG 20 YEARS OF SERVICE. HE HAS NO OTHER SOURCE OF INCOME EXCEPT SAVING FROM HIS SALARY. HE HAS INVESTED IN SHARES FOR RS.8700/-, FDRS OF RS.20395/ - AND PURCHASED A PLOT IN FINANCIAL YEAR 1995-96 FOR RS. 1,02,600/- AND HAS T AKEN A HOUSE ON MORTGAGE BY PAYING RS.50,000/-. THUS TOTAL INVESTMENT IS RS. 1,81,000/-. RS.28,000/- ALSO OUT OF SAVINGS. NEITHER THE APPELLANT HAS GIVEN WOR KING OF SAVING NOR SHRI DILIP MEHTA HIMSELF HAS GIVEN ANY SUCH WORKING. HOWEVER, THE APPELLANT HAS FURNISHED COPY OF RETURN OF SHRI DILIP KUMAR FOR AS SESSMENT YEAR 2001-02 ALONGWITH COMPUTATION OF INCOME. SHRI DILIP KUMAR H AS SHOWN TOTAL SALARY OF RS. 1,93,806/-. SMT. SEEMA MEHTA W/O OF SHRI DILIP MEHTA IS ALSO ASSESSED TO TAX WITH PAN AEIPM1257R. HER TOTAL INCOME FOR THE Y EAR 2001-02 IS RS.59,510/- FROM BEAUTY PARLOR. HER ACCUMULATED CAP ITAL IS RS.3,74,470/-. THUS IT CAN BE SEEN THAT SHRI DILIP MEHTA HAS BEEN ABLE TO MAKE REASONABLE AMOUNT OF SAVING OUT OF HIS SALARY INCOME THROUGHOU T THE YEAR. THEREFORE, THE AO IS NOT JUSTIFIED IN MAKING ADDITION OF RS.28,000 /-. THE SAME IS, THEREFORE, DELETED. THE APPEAL IS ALLOWED ON THIS POINT. 2.20 RS. 50,000/- SMT. NEENA AGARWAL:- THE APPELLANT CLAIMED TO HAVE RECEIVED RS.1,00,000/ - IN CASH ON 6-3-98 FROM SMT. NEENA AGARWAL D/O SHRI SHYAMLAL AGARWAL, UDAIPUR FOR MORTGAGE 18 OF SHOP NO.300B, ASHOK NAGAR, UDAIPUR. SINCE THE TR ANSACTION COULD NOT MATERIALIZE, THEREFORE, RS.50,000/-WAS RETURNED BAC K ON 5-4-98 AND BALANCE RS.50,000/- REMAINED WITH HIM. LATERON THE CHEQUE W AS DISHONOURED. THEREFORE, THE APPELLANT REPAID RS.40,000/- IN CASH ON 10-5-98 AND RS. 10,000/- BY CHEQUE IN JUNE, 1998. THE AO HAS NO T ACCEPTED THE CONTENTION OF THE APPELLANT ON THE GROUND THAT HAD THE BALANCE CASH OF RS. 50,000/- BEEN LYING WITH THE APPELLANT HE COULD HAV E RETURNED BACK TO NEENA AGARWAL. 2.21 THE LD. A/R OF THE APPELLANT REITERATED THE SA ME FACTS AS AT THE TIME OF ASSESSMENT PROCEEDINGS. HE HAS FURTHER BROUGHT TO T HE NOTICE THAT THE TRANSACTION FOR MORTGAGE COULD NOT BE MATERIALIZED DUE TO SOME UNAVOIDABLE REASON. SMT. NEENA AGARWAL HAS FILED A SUIT U/S 138 OF NEGOTIABLE INSTRUMENT ACT AGAINST THE APPELLANT FOR DISHONOR OF CHEQUE. THAT IS WHY THE APPELLANT HAD NOT REPAID THE AMOUNT OF RS. 50,000/-. 2.22 HAVING GONE THROUGH THE ABOVE FACTS AND SUBMIS SION I FIND THAT THE APPELLANT DID RECEIVE RS. 1,00,000/-, REPAID RS.50, 000/- AND KEPT THE BALANCE RS.50,000/- BECAUSE OF SOME DISPUTE AND SUIT U/S 138 OF THE NEGOTIABLE INSTRUMENT ACT IS ALSO PENDING. THUS THE AO'S FINDI NG THAT RS.50,000/- IS NOT THE SAME AMOUNT WHICH WAS FOUND AT THE TIME OF SEARCH D OES NOT HOLD ANY GROUND. THEREFORE, THE ADDITION MADE BY THE AO IS DELETED. THE APPEAL IS ALLOWED ON THIS GROUND ALSO. BEING AGGRIEVED, THE DEPARTMENT IS IN APPEAL. 22 LEARNED D.R. REITERATED THE OBSERVATIONS MADE BY T HE ASSESSING OFFICER AND STRONGLY SUPPORTED THE ASSESSMENT ORDER . HE FURTHER SUBMITTED THAT THE ASSESSEE WAS UNABLE TO EXPLAIN T HE CASH FOUND DURING THE COURSE OF SEARCH. THEREFORE, THE ADDITION WAS RIGHTLY MADE. 23 IN HIS RIVAL SUBMISSIONS, LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW A ND FURTHER SUBMITTED 19 THAT THE SOURCE OF RECEIPT OF CASH WAS EXPLAINED ON THE BASIS OF DOCUMENTS FOUND DURING THE COURSE OF SEARCH AND SEI ZED AT THE TIME OF SEARCH PROCEEDINGS. THEREFORE, LD. CIT(A) WAS FULL Y JUSTIFIED IN DELETING THE ARBITRARY ADDITION MADE BY THE ASSESSING OFFICE R. 24 WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PAR TIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IN THE PRESENT CASE, IT APPEARS THAT THE ASSESSEE ON THE BASIS OF DOCUMENTS FOUND AND SEIZED AT THE TIME OF SEARCH PROCEEDINGS WAS ABLE T O SATISFY THE LD. CIT(A) WITH REGARD TO SOURCE OF CASH FOUND. THEREF ORE, THE ADDITION MADE BY THE ASSESSING OFFICER WAS NOT JUSTIFIED WHEN THE ASSESSEE WAS IN A POSITION TO EXPLAIN THE SOURCE OF CASH FOUND DURING THE COURSE OF SEARCH. WE, THEREFORE, DO NOT SEE ANY MERIT IN THIS GROUND OF THE DEPARTMENTAL APPEAL. 25 VIDE GROUND NO. 2, THE GRIEVANCE OF THE DEPARTMEN T RELATES TO THE DELETION OF ADDITION OF RS. 40,000/- MADE BY THE AS SESSING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTMENT IN GOLD ORNAMENT S. 26 FACTS RELATING TO THIS ISSUE, IN BRIEF, ARE THAT D URING THE COURSE OF SEARCH, 587 GRMS. OF GOLD ORNAMENTS AND 1100 GRMS. SILVER ITEMS WERE FOUND AND HAD BEEN ACCEPTED BY SHRI JEEWAN SINGH ME HTA AND HAD BEEN 20 CONSIDERED IN HIS CASE IN BLOCK PERIOD. REGARDING 205 GRMS. OF GOLD ITEMS, THE ASSESSEE SUBMITTED TO THE ASSESSING OFFICER THA T 105 GRMS. BELONGED TO HIS BROTHER-SHRI KAMAL KUMAR MEHTA AND HIS WIFE, REMAINING 100 GOLD ORNAMENTS TO SHRI DILIP KUMAR MEHTA HIS BROTHER AND HIS WIFE. IN SUPPORT OF THE ABOVE SAID CONTENTION, THE AFFIDAVITS OF THE SAID PERSONS WERE ALSO FURNISHED, BUT THE ASSESSING OFFICER FOUND SOME DEF ECTS IN THE AFFIDAVIT AND REJECTED THE CLAIM OF THE ASSESSEE. 27 BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER T O THE LD. CIT(A) AND SUBMITTED THAT THE GOLD JEWELLERY BELONGING TO SMT. SEEMA MEHTA, WHO RECEIVED AS STRIDHAN FROM HER PARENTS AND 105 G RMS. BELONGED TO SMT. KANCHAN DEVI, WHICH WAS ALSO SUPPORTED BY HER PRELIMINARY STATEMENT ON 14/08/2000 AND HER AFFIDAVIT FILED ON 03/07/2002. 28 THE LEARNED CIT(A), AFTER CONSIDERING THE SUBMISSI ONS OF THE ASSESSEE, OBSERVED THAT 205 GRMS. OF GOLD ORNAMENT S WAS VERY NOMINAL AND VERY COMMON IN THE HANDS OF TWO LADIES LOOKING TO THEIR STATUS AND EARNING OF SHRI KAMAL KUMAR MEHTA AND SHRI DILIP KU MAR MEHTA. THEREFORE, HE TREATED THE SOURCE OF THE SAID JEWELL ERY AS EXPLAINED KEEPING IN VIEW THE BOARD INSTRUCTIONS NO. 1916 DAT ED 11/05/1994. 21 ACCORDINGLY, THE ADDITION MADE BY THE ASSESSING OFF ICER WAS DELETED. NOW THE DEPARTMENT IS IN APPEAL. 29 LEARNED D.R. ALTHOUGH SUPPORTED THE ORDER OF THE A SSESSING OFFICER, BUT COULD NOT REBUT THE OBSERVATIONS OF THE LD. CIT (A). IN HIS RIVAL SUBMISSIONS, LEARNED COUNSEL FOR THE ASSESSEE SUPP ORTED THE IMPUGNED ORDER PASSED BY THE LD. CIT(A). 30 AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PART IES AND THE MATERIAL ON RECORD, WE ARE OF THE VIEW THAT THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER BY KEEPING IN VIEW THE STATUS OF THE ASSESSEES FAMILY, THEIR EARNINGS AND THE QUANTITY OF GOLD ITEMS. WE DO NOT SEE ANY INFIRMITY IN THE ORD ER OF THE LD. CIT(A). 31 THE NEXT ISSUE VIDE GROUND NO. 3 RELATES TO THE DE LETION OF ADDITION OF RS. 4 LAC MADE BY THE ASSESSING OFFICER ON ACCOU NT OF UNEXPLAINED INVESTMENT IN PLOT AT NH 8, GOVERDHANVILAS, UDAIPUR . 32 FACTS RELATING TO THIS ISSUE, IN BRIEF, ARE THAT T HE ASSESSING OFFICER MADE THE ADDITION OF RS. 4 LAC ON THE GROUND THAT T HE LAND HAD BEEN SOLD BY SHRI MADAN SINGH ON 29/03/1997 TO THE ASSESSEE F OR RS. 4 LAC. THE BASIS FOR THIS ADDITION WAS THE LANGUAGE OF THE POW ER OF ATTORNEY ISSUED 22 BY SHRI MADAN SINGH IN FAVOUR OF THE ASSESSEE. BEF ORE THE LD. CIT(A), THE ASSESSEE SUBMITTED THAT THE POWER OF ATTORNEY WAS G IVEN BY SHRI MADAN SINGH IN FAVOUR OF THE ASSESSEE, BUT THE TRANSACTIO N COULD NOT MATERIALIZE BECAUSE OF DISPUTE IN TITLE. 33 THE LEARNED CIT(A), AFTER CONSIDERING THE SUBMISSI ONS OF THE ASSESSEE AND GOING THROUGH THE POWER OF ATTORNEY DA TED 29/03/1997 OBSERVED THAT IT WAS NOWHERE MENTIONED THAT SHRI MA DAN SINGH HAD RECEIVED RS. 4 LAC FROM THE ASSESSEE FOR SALE OF PL OT. INSTEAD IT WAS MENTIONED THAT THE SECOND PARTY WOULD GET THE REGIS TRY OF SALE OF THE PLOT BY HANDING OVER THE POSSESSION OF THE PLOT TO PURCH ASER AND AFTER PAYMENT OF RS. 4 LAC TO THE FIRST PARTY. THE LD. C IT(A) CATEGORICALLY STATED THAT NO PAYMENT HAD BEEN MADE AT ALL AS THE TRANSACTION DID NOT MATERIALIZE, THEREFORE, THE ADDITION MADE BY THE AS SESSING OFFICER WAS DELETED. NOW THE DEPARTMENT IS IN APPEAL. 34 AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PART IES AND THE MATERIAL ON RECORD, WE ARE OF THE VIEW THAT THE ADD ITION WAS MADE BY THE ASSESSING OFFICER ON THE BASIS OF SURMISES AND CONJ ECTURERS AND THE LD. CIT(A) RIGHTLY DELETED THE SAME BECAUSE NOTHING WAS BROUGHT ON RECORD TO SUBSTANTIATE THAT THE ASSESSEE PAID RS. 4 LAC TO SH RI MADAN SINGH. 23 35 THE NEXT ISSUE VIDE GROUND NO. 4 RELATES TO THE DE LETION OF ADDITION OF RS. 51,000/- MADE BY THE ASSESSING OFFICER ON AC COUNT OF UNEXPLAINED INVESTMENT IN PARTNERSHIP FOR SHARE OF PROFIT IN PE TROL PUMP. 36 FACTS RELATING TO THIS ISSUE, IN BRIEF, ARE THAT S HRI MANSOOR ALI HITAWALA EXECUTED AN AGREEMENT THROUGH THE ASSESSEE ON 16/04/1996 WITH SMT. PYARI BAI FOR SHARING OF PROFIT IN PETROL PUMP FOR RS. 51,000/-. AS PER AGREEMENT, THE ASSESSEE WOULD GET 98% AND SM T. PYARI BAI WOULD GET 2% SHARE IN PROFIT. OUT OF RS. 51,000/-, RS. 5 0,000/- WAS ALREADY WITH THE LADY SMT. PYARI BAI, CARRY FORWARDED FROM THE C ANCELLATION OF LEASE OF PETROL PUMP. THE ASSESSEE FURTHER PAID RS. 1,000/- TO THE LADY SMT. PYARI BAI OUT OF HIS OWN POCKET, BUT THE AGREEMENT DID NO T MATERIALIZE BECAUSE OF DEFECT IN THE TITLE OF THE PETROL PUMP LICENSE. THE SAID PUMP WAS IN THE NAME OF SHRI KISHORI LAL SON-IN-LAW OF SHRI PRI THVI RAJ BHOI BUT THE LADY SMT. PYARI BAI CLAIMED THE TITLE, RS. 51,000/- HAD BEEN FORFEITED BY THE LADY, HOWEVER, THE ASSESSING OFFICER MADE THE A DDITION. LD. CIT(A) DELETED THE SAME BY OBSERVING THAT THERE WAS NO QUE STION OF ADDITION OF RS. 51,000/-. NOW THE DEPARTMENT IS IN APPEAL. 37 LEARNED D.R. SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUB MISSIONS MADE BEFORE 24 THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT TH E DEAL DID NOT MATERIALIZE AND AN AFFIDAVIT OF SMT. PYARI BAI WAS SUBMITTED, COPY OF WHICH IS PLACED AT PAGE NO. 131 OF THE ASSESSEES P APER BOOK WHEREIN IT IS MENTIONED THAT THE TRANSACTION DID NOT MATERIALIZE AND THE AGREEMENT, POWER OF ATTORNEY ETC. WERE NULL AND VOID. THEREFO RE, THE IMPUGNED ADDITION WAS RIGHTLY DELETED BY THE LD. CIT(A). 38 AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PART IES AND THE MATERIAL ON RECORD, IT IS NOTICED THAT THE AGREEMEN T FOR TAKING PETROL PUMP ON LEASE DID NOT MATERIALIZE, SO THERE WAS NO QUESTION OF MAKING THE ADDITION AND THE LD. CIT(A) RIGHTY DELETED THE SAME. WE DO NOT SEE ANY MERIT IN THIS GROUND OF THE DEPARTMENTAL APPEAL . 39 THE NEXT ISSUE VIDE GROUND NO. 5 RELATES TO THE DE LETION OF ADDITION OF RS. 27,101/- MADE BY THE ASSESSING OFFICER ON AC COUNT OF UNEXPLAINED INVESTMENT IN PLOT NO. 152B, HIRAN MAGRI, SECTOR-4, UDAIPUR. 40 FACTS RELATING TO THIS ISSUE, IN BRIEF, ARE THAT THE ASSESSING OFFICER MADE THIS ADDITION ON THE GROUND THAT THE ASSESSEE DID NOT FILE ANY CONFIRMATION FROM SHRI JEEVANLAL POKHRANA. ASSESSE E SUBMITTED BEFORE THE LD. CIT(A) THAT THE PAPER A-3 PAGE NO. 162 DID NOT HAVE ANY RELATION 25 WITH THE ASSESSEE AS THE AGREEMENT WAS BETWEEN SHRI JEEWANLAL POKHRANA AND SHRI SHRAVAN KUMAR S/O SHRI SOM PRAKASH, BHUPAL PURA. 41 THE LEARNED CIT(A), AFTER CONSIDERING THE SUBMISSI ONS OF THE ASSESSEE, OBSERVED THAT ANNEXURE A-3 PAGE NO. 162 DID NOT HAVE ANY RELATION AT ALL WITH THE ASSESSEE AS IT WAS BETWEEN THE TWO DIFFERENT PERSONS AND THE ASSESSING OFFICER MADE THIS ADDITIO N ON THE GROUND THAT THIS PAPER WAS SEIZED FROM THE RESIDENCE OF THE ASS ESSEE AND HE WAS OBLIGED TO EXPLAIN THE CONTENTS. ACCORDING TO THE LD. CIT(A), THE ASSESSING OFFICER ADDED THIS AMOUNT WITHOUT ANY EVI DENCE JUST ON PRESUMPTION. THEREFORE, THE IMPUGNED ADDITION WAS DELETED. NOW THE DEPARTMENT IS IN APPEAL. 42 AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PART IES, WE DO NOT SEE ANY VALID GROUND TO INTERFERENCE WITH THE FINDINGS OF THE LD. CIT(A) SINCE THE DOCUMENT ON THE BASIS OF WHICH THE ADDITION WAS MADE BY THE ASSESSING OFFICER DOES NOT BELONG TO THE ASSESSEE. 43 THE NEXT ISSUE VIDE GROUND NO. 6 RELATES TO THE DE LETION OF ADDITION OF RS. 3,50,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNDISCLOSED SHARE OF PROFIT WITH SHRI SAGARMAL KOTH ARI. 26 44 FACTS RELATING TO THIS ISSUE, IN BRIEF, ARE THAT THE ASSESSING OFFICER ADDED THIS AMOUNT ON THE BASIS OF COPY OF FIR LODGE D WITH SURAJPOLE THANA, UDAIPUR AS PER ANNEXURE A-5 PAGE 90 & 91 FOU ND FROM THE RESIDENCE OF THE ASSESSEE. BEFORE THE LD. CIT(A), THE ASSESSEE SUBMITTED THAT NO AGREEMENT BETWEEN THE ASSESSEE AND SHRI SAG ARMAL KOTHARI HAD BEEN FOUND FROM THE RESIDENCE OF THE ASSESSEE AND T HERE WAS ONLY COPY OF FIR IN WHICH THE ASSESSEE HAD COMPLAINED THAT SHRI SAGARMAL KOTHARI DID NOT GIVE HIM 50% PROFIT OF RS. 3,50,000/- ON SALE O F ONE PROPERTY. 45 THE LEARNED CIT(A), AFTER CONSIDERING THE SUBMISSI ONS OF THE ASSESSEE FOUND THAT NO AGREEMENT BETWEEN THE ASSESS EE AND SHRI SAGARMAL KOTHARI WAS AVAILABLE WITH THE ASSESSING O FFICER, ONLY COPY OF FIR WAS FOUND IN WHICH THE ASSESSEE CLAIMED HIS SHA RE OF 50% OF RS. 3,50,000/- FROM SAGARMAL KOTHARI ON SALE OF ONE PRO PERTY, BUT IT WAS NOT ACTUALLY KNOWN FROM THE RECORDS AS TO WHETHER THERE WAS ANY AGREEMENT BETWEEN THE ASSESSEE AND SHRI SAGARMAL KOTHARI AT A LL OR WHETHER THERE WAS ANY SALE OF PROPERTY. ACCORDINGLY, THE ADDITIO N MADE BY THE ASSESSING OFFICER WAS DELETED. NOW THE DEPARTMENT IS IN APPEAL. 46 WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO THE ARGUMENTS OF BOTH THE PARTIES AND THE MATERIAL ON RECORD. IN T HE PRESENT CASE, IT 27 APPEARS THAT THE ASSESSING OFFICER MADE THE ADDITIO N ONLY ON THE BASIS OF PRESUMPTION AND ASSUMPTION BECAUSE NOTHING WAS FOUN D DURING THE COURSE OF SEARCH TO SUBSTANTIATE THAT THE ASSESSEE ACTUALL Y HAD RECEIVED RS. 3,50,000/- AS HIS SHARE OF PROFIT. THE ADDITIO N WAS MADE ONLY ON THE BASIS OF ONE FDR IN WHICH THE ASSESSEE HAD COMPLAIN ED THAT SHRI SAGARMAL KOTHARI DID NOT GIVE HIM 50% SHARE OF RS. 3,50,000/ - ON SALE OF ONE PROPERTY. HOWEVER, NEITHER ANY AGREEMENT WAS FOUND DURING THE COURSE OF SEARCH NOR ANY EVIDENCE WAS THERE THAT THE ASSES SEE IN FACT HAD RECEIVED THE IMPUGNED AMOUNT. THEREFORE, THE ADDIT ION MADE BY THE ASSESSING OFFICER WAS RIGHTLY DELETED BY THE LD. CI T(A). 47 VIDE GROUND NO. 7, THE GRIEVANCE OF THE DEPARTMENT RELATES TO THE DELETION OF ADDITIONS OF RS. 5,43,800/-, RS. 8,700/ - & RS. 20,395/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PROPERTIES, SHARES AND FDRS RESPECTIVELY IN THE NAM E OF SHRI DILIP KUMAR MEHTA AND SMT. SEEMA MEHTA. THESE ADDITIONS WERE M ADE BY THE ASSESSING OFFICER ON THE GROUND THAT THE ASSESSEE D ID NOT EXPLAIN THE SOURCE OF INCOME/ INVESTMENT AND DID NOT PRODUCE SH RI DILIP KUMAR MEHTA AND SMT. SEEMA MEHTA FOR EXAMINATION. 48 THE CONTENTION OF THE ASSESSEE BEFORE THE LD. CIT( A) WAS THAT ANNEXURE-A/1 AT PAGES 39-43, 44-52, 34-38 & 54-56 W ERE FOUND FROM THE 28 ROOM OF SHRI DILIP KUMAR MEHTA SITUATED AT 25, MEHT ON KA TIMBA, UDAIPUR. IT WAS FURTHER STATED THAT SHRI DILIP KUM AR MEHTA INVESTED IN THESE PROPERTIES, SHARES AND FDRS OUT OF HIS SAVING S FROM HIS SALARY INCOME OF RS. 2,40,000/- PER YEAR FROM SERVICE OF G OVERNMENT OF RAJASTHAN SINCE 1980 AND HIS WIFE DERIVED INCOME OF RS. 60,000/- PER YEAR FROM BEAUTY PARLOUR. IT WAS FURTHER STATED THAT SH RI DILIP KUMAR MEHTA AND SMT. SEEMA MEHTA HAD CONFIRMED THE ABOVE FACTS IN THEIR AFFIDAVITS AND THE DEFECTS POINTED OUT BY THE ASSESSING OFFICE R IN THEIR AFFIDAVITS WERE MINOR WHICH WILL NOT INVALIDATE THE CONTENTS O F THE AFFIDAVITS. 49 THE LEARNED CIT(A), AFTER CONSIDERING THE SUBMISSI ONS OF THE ASSESSEE, OBSERVED THAT THE INVENTORY OF BOOKS OF ACCOUNTS AND LOOSE PAPERS FOUND AND SEIZED CONTAINED ANNEXURE-A/1 LOOS E PAPER 1 TO 56 FROM THE ROOM OF SHRI DILIP KUMAR MEHTA, WHO ALONG WITH HIS WIFE SMT. SEEMA MEHTA HAD ACCEPTED THAT THE ABOVE MENTIONED P APERS BELONGED TO THEM AND THE INVESTMENT IN PROPERTIES, SHARES AND F DRS HAD BEEN MADE BY THEM OUT OF THEIR SAVINGS FROM SALARY AND BEAUTY PARLOUR AND IF THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE EXPLAN ATION FOR INVESTMENT, HE COULD HAVE BEEN INTIMATED THE CONCERNED AOS OF S HRI DILIP KUMAR MEHTA AND SMT. SEEMA MEHTA FOR NECESSARY ACTION. T HE LD. CIT(A) 29 FURTHER OBSERVED THAT ALL THOSE PAPERS WERE AVAILAB LE ON RECORD, SO THERE WAS NO SCOPE OF ADDITION AS UNDISCLOSED INVESTMENT IN THE HANDS OF THE ASSESSEE AND IT WAS TO BE ADDED IN THE CASE OF SHRI DILIP KUMAR MEHTA AND SMT. SEEMA MEHTA AND NOT IN THE HANDS OF THE ASSESS EE AS HE HAD NO CONCERN WITH ALL THE ABOVE MENTIONED PAPERS. ACCOR DINGLY, THE IMPUGNED AMOUNT WAS DELETED. 50 AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PART IES AND THE MATERIAL ON RECORD, WE ARE OF THE VIEW THAT THE LD. CIT(A) RIGHTLY DELETED THIS ADDITION BECAUSE THE DOCUMENTS FOUND DURING TH E COURSE OF SEARCH WERE NOT RELATED TO THE ASSESSEE, THOSE WERE OF SHR I DILIP KUMAR MEHTA AND HIS WIFE SMT. SEEMA MEHTA. THEREFORE, IF THE A SSESSING OFFICER WAS NOT SATISFIED, THE ADDITION COULD HAVE BEEN MADE IN THE HANDS OF THE CONCERNED PERSONS I.E. SHRI DILIP KUMAR MEHTA AND S MT. SEEMA MEHTA AND NOT IN THE HANDS OF THE ASSESSEE. WE, THEREFORE, D O NOT SEE ANY MERIT IN THIS GROUND OF THE DEPARTMENTAL APPEAL. 51 THE NEXT ISSUE VIDE GROUND NO. 8, THE GRIEVANCE OF THE DEPARTMENT RELATES TO THE DELETION OF ADDITION OF RS. 1,62,000 /- AND RS. 1,72,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPL AINED CREDIT ENTRIES. 30 52 FACTS RELATING TO THIS ISSUE, IN BRIEF, ARE THAT T HE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOUND T HAT THE ASSESSEE HAD RECEIVED RS. 1,62,000/- FROM SHRI KAILASH CHAND PAN WARAND THE SAME AMOUNT WAS RETURNED BACK TO HIM AS THE TRANSACTION BETWEEN SHRI KAILASH CHAND PANWARAND SHRI UDAINATH FOR PROPERTY SITUATED AT PATEL CIRCLE, UDAIPUR DID NOT MATERIALIZED. THE ASSESSING OFFICER ASKED FOR CONFIRMATION OF SHRI KAILASH CHAND PANWARAND OTHER DETAILS, BUT THE ASSESSEE DID NOT FURNISH. THE ASSESSING OFFICER AL SO REFERRED PAGE 94 & 95 OF ANNEXURE-A/5 WHEREIN THE ASSESSEE HAD GIVEN NOTI CE TO SHRI KAILASH CHAND PANWARFOR PAYMENT OF THE OUTSTANDING AMOUNT T HROUGH HIS ADVOCATE . THE ASSESSING OFFICER ALSO REFERRED PAG E 183 OF ANNEXURE-A/2 WHEREIN RS. 1,62,000/- WAS MENTIONED, AGAINST IT P LETTER WAS WRITTEN THERE AND ALSO RS. 50,000/- CASH WAS WRITTEN. THE ASSESSING OFFICER TREATED THIS AMOUNT AS LOAN GIVEN BY THE ASSESSEE T O SHRI KAILASH CHAND PANWARON INTEREST. SINCE THE ASSESSEE DID NOT EXPL AIN THIS ENTRY BY SUPPORTING EVIDENCE, THE ASSESSING OFFICER ADDED TH IS AMOUNT TO THE ASSESSEES INCOME. THE ASSESSING OFFICER ALSO NOTI CED THAT THERE WAS AN ENTRY OF RS. 1,70,000/- AGAINST T LETTER WAS MENT IONED ON PAGE 813 OF ANNEXURE-A/2. THE ASSESSING OFFICER HAD ASKED THE ASSESSEE TO EXPLAIN THIS ENTRY AND THE ASSESSEE SUBMITTED THAT HIS SIST ER SMT. SUSHILA KOTHARI 31 HAD SOLD 8 BIGHA AGRICULTURAL LAND AT VILLAGE NORA TO SHRI TOLARAM NIMAWAT AND HAD RECEIVED RS. 2 LAC. THE ASSESSING OFFICER HAD CALLED FOR THE CONFIRMATION FROM SMT. SUSHILA KOTHARI AND SHRI TOL ARAM NIMAWAT, BUT THE ASSESSEE HAD NOT FURNISHED THE SAME. THEREFORE , THE ASSESSING OFFICER ADDED THIS AMOUNT ALSO TO THE TOTAL INCOME OF THE ASSESSEE. 53 BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER T O THE LD. CIT(A) AND SUBMITTED THAT HE HAD MADE AN ORAL AGREEMENT WI TH SHRI KAILASH CHAND PANWAR FOR SALE OF PROPERTY SITUATED AT PATEL CIRCLE, UDAIPUR AND THE AGREEMENT BETWEEN THE ASSESSEE AND THE SELLER S HRI UDAINATH FOR THE ABOVE PROPERTY WAS AS PER PAGE NO. 39-40 OF ANNEXUR E-A/3. AGAINST THIS TRANSACTION, THE ASSESSEE RECEIVED RS. 1,62,000/-, BUT THE SAID TRANSACTION COULD NOT MATERIALIZE DUE TO DISPUTE IN OWNERSHIP OF THE SAID LAND AND THE ASSESSEE RETURNED BACK RS. 50,000/- IN CASH AND BALANCE OF RS. 1,00,000/- GIVEN TO SHRI KAMAL KHATRI BROTHER O F SHRI KAILASH CHAND PAWAR. IT WAS ALSO STATED THAT THE RECEIPT OF SHRI KAMAL KHATRI OF RS. 1,00,000/- WAS SETTLED FINALLY. AS REGARDS TO THE AGRICULTURAL LAND AT VILLAGE NORA, THE ASSESSEE SUBMITTED THAT SHRI SHIV SINGH KOTHARI HUSBAND OF HIS SISTER, DISTRIBUTED HIS AGRICULTURAL LAND BE TWEEN HIS TWO WIVES I.E. 8 BIGHA TO SMT. SUSHILA KOTHARI AND 1 BIGHA TO SMT. T ARUN KOTHARI. THE ASSESSEE ALSO FILED COPY OF AGREEMENT OF PARTITION DATED 15/07/1985 AND 32 COPY OF KHATHONI FOR TOTAL LAND OF 9 BIGHA IN THE N AME OF SHRI SHIV SINGH KOTHARI, COPY OF POWER OF ATTORNEY DATED 15/04/1993 , COPY OF IKRAR NAUKAR NAMA BETWEEN SHRI TOLARAM AND SHRI DUNGA GAM ETI FOR VACATING THE LAND AND RECEIPT DATED 09/02/1995 BY SMT. SUSHI LA KOTHARI TO HAVE RECEIVED RS. 2 LAC FROM SHRI TOLARAM. 54 THE LEARNED CIT(A), AFTER CONSIDERING THE SUBMISSI ONS OF THE ASSESSEE, OBSERVED THAT THERE WAS AN AGREEMENT BETW EEN THE ASSESSEE AND SHRI UDAINATH, THE OWNER OF THE PROPERTY SITUAT ED AT PATEL CIRCLE, UDAIPUR AND THE ASSESSEE ORALLY AGREED WITH SHRI KA ILASH CHAND PANWAR TO SALE THE ABOVE PROPERTY AND HAD RECEIVED RS. 1,62,0 00/- AS DOWN PAYMENT, BUT DUE TO NON-MATERIALIZATION OF THE TRAN SACTION, THE ASSESSEE HAD TO RETURN BACK THE AMOUNT AND THE AGREEMENT FOR RECEIPT OF RS. 1,62,000/- ENTERED ON PAGE 183 OF ANNEXURE-A/2. TH E LD. CIT(A) CATEGORICALLY STATED THAT THE AMOUNT OF RS. 1,62,00 0/- AND RS. 1,70,000/- WERE RECEIPTS BY THE ASSESSEE FROM THE CONCERNED PE RSONS AND NOT THE PAYMENT. HE FURTHER OBSERVED THAT THE SEARCH WAS CO NDUCTED ON 14/08/2000 WHEREAS THE NOTICE WAS GIVEN BY THE ASSE SSEE TO SHRI KAILASH CHAND PANWAR ON 19/07/1996 I.E. PRIOR TO THE DATE O F SEARCH. THUS, IT COULD NOT BE INFERRED THAT THE ASSESSEE HAD GIVEN R S. 1,62,000/- AS LOAN 33 TO SHRI KAILASH CHAND PAWAR. AS REGARD TO THE ADDI TION OF RS. 1,70,000/-, THE LD. CIT(A) OBSERVED THAT THE ASSESSEE WAS MEREL Y BROKER AND HAD NOT RECEIVED THE AMOUNT. HE FURTHER OBSERVED THAT THE AMOUNT WAS RECEIVED BY SMT. SUSHILA KOTHARI DIRECTLY FROM SHRI TOLARAM NIMAWAT AND SHE HAD GIVEN A RECEIPT ALSO ON 09/02/1995 WHICH WAS BEFORE THE DATE OF SEARCH I.E. ON 14/08/2000. THEREFORE, THE IMPUGNED AMOUNT S ADDED BY THE ASSESSING OFFICER WERE DELETED. NOW THE DEPARTMENT IS IN APPEAL. 55 LEARNED D.R. STRONGLY SUPPORTED THE ORDER OF THE A SSESSING OFFICER AND FURTHER SUBMITTED THAT THE ADDITION WAS MADE ON THE BASIS OF DOCUMENTS FOUND DURING THE COURSE OF SEARCH. THERE FORE, THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION. 56 IN HIS RIVAL SUBMISSIONS, LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW A ND STRONGLY SUPPORTED THE IMPUGNED ORDER PASSED BY THE LD. CIT( A) ON THIS ISSUE. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE HAD NOT GIV EN ANY LOAN AMOUNTING TO RS. 1,62,000/- RATHER IT WAS THE RECEI PT BY THE ASSESSEE ON BEHALF OF THE CUSTOMER AND ANOTHER RECEIPT OF RS. 1 ,70,000/- WAS BY HIS SISTER SMT. SUSHILA KOTHARI AGAINST HER PROPERTY. THEREFORE, THE ADDITION WAS RIGHTLY DELETED BY THE LD. CIT(A). 34 57 WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PAR TIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IN THE PRESENT CASE, IT IS NOTICED THAT THE ASSESSING OFFICER MADE THE IMPUGNED ADDITIONS ONLY ON THIS BASIS THAT THE DOCUMENTS WERE FOUND IN POSSESSION OF THE ASSESSEE. HOWEVER, HE IGNORED THIS VITAL FACT THAT AN AMOUNT OF RS. 1,62,000/- WAS GIVEN TO THE ASSESSEE BY SHRI KA ILASH CHAND PANWAR, WHO WANTED TO PURCHASE THE PROPERTY. SO, IT WAS NO T A LOAN GIVEN BY THE ASSESSEE TO SHRI KAILASH CHAND PAWAR, THEREFORE, TH E ADDITION MADE BY THE ASSESSING OFFICER WAS NOT JUSTIFIED AND THE LD. CIT(A) RIGHTY DELETED THE SAID ADDITION. SIMILARLY, THE ENTRY OF RS. 1,7 0,000/- AGAINST WHICH T LETTER WAS MENTIONED WAS NOT RELATED TO THE ASSESSE E RATHER IT WAS BELONGING TO HIS SISTER SMT. SUSHILA KOTHARI WHO RE CEIVED SAID AMOUNT DIRECTLY FROM SHRI TOLARAM NIMAWAT AND HAD GIVEN A RECEIPT ON 09/02/1995. THEREFORE, THERE WAS NO DOUBT ABOUT TH E GENUINENESS OF THE TRANSACTION AND THE RECEIPT OF THE AMOUNT BY SMT. S USHILA KOTHARI. SO, THE IMPUGNED AMOUNT COULD NOT HAVE BEEN CONSIDERED A LOAN GIVEN BY THE ASSESSEE. WE, THEREFORE, ARE OF THE VIEW THAT THE LD. CIT(A) RIGHTY DELETED THE IMPUGNED ADDITION. 35 58 THE NEXT ISSUE VIDE GROUND NO. 9 RELATES TO THE DE LETION OF ADDITION OF RS. 5,46,145/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNDISCLOSED INCOME FROM PROPERTY, BROKERAGE AND COM MISSION. 59 FACTS RELATING TO THIS ISSUE, IN BRIEF, ARE THAT T HE ASSESSING OFFICER ON THE BASIS OF THE STATEMENT OF THE ASSESSEE RECOR DED ON 14/08/2000 WHEREIN WHILE ANSWERING THE QUESTION NO.10, THE ASS ESSEE SUBMITTED THAT HIS ANNUAL INCOME WAS RS. 50,000/- TO 60,000/- AND HE WAS NOT MAINTAINING ANY BOOKS OF ACCOUNTS AND WAS NOT INCOM E TAX ASSESSEE. THE ASSESSING OFFICER ESTIMATED THE INCOME AT RS. 5,46, 145/- AND ADDED THE SAME IN THE HANDS OF THE ASSESSEE. 60 BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER T O THE LD. CIT(A) AND SUBMITTED THAT THE UNDISCLOSED INCOME OF THE BL OCK PERIOD SHOULD HAVE BEEN COMPUTED ONLY ON THE BASIS OF THE BOOKS O F ACCOUNTS OR DOCUMENTS AND THE EVIDENCE FOUND AS A RESULT OF SEA RCH AND OTHER MATERIALS AND INFORMATION COLLECTED BY THE ASSESSIN G OFFICER. 61. THE LEARNED CIT(A), AFTER CONSIDERING THE SUBMISSI ONS OF THE ASSESSEE, OBSERVED THAT WHATEVER DOCUMENTARY EVIDE NCE WAS FOUND AS A RESULT OF SEARCH, THE ADDITION/DISALLOWANCE HAD BEE N MADE IN THE 36 ASSESSMENT ORDER ON EACH AND EVERY ISSUE SEPARATELY . HOWEVER, IN THE LAST PART OF THE ASSESSMENT ORDER, THE ASSESSING OF FICER HAD ESTIMATED THE INCOME FROM BROKERAGE AND HOUSE PROPERTY ON THE BAS IS OF THE STATEMENT OF THE ASSESSEE THAT HE EARNED RS. 50,000/- TO 60,0 00/- PER ANNUM. ACCORDING TO THE LD. CIT(A), THE SAID STATEMENT WAS NOT A DOCUMENTARY EVIDENCE FOUND DURING THE COURSE OF SEARCH AND THE ASSESSING OFFICER HAD NOT BROUGHT ON RECORD ANY OTHER MATERIAL EVIDENCE O N THE BASIS OF WHICH HE COULD HAVE MADE THE ESTIMATE OF INCOME FROM HOUS E PROPERTY AND BROKERAGE AND INCREASED IT TO RS. 5,46,145/- FROM R S. 3,64,480/-. THE LD. CIT(A) WAS OF THE VIEW THAT THE ASSESSING OFFIC ER MADE THIS ADDITION ON THE BASIS OF PRESUMPTION. HE ACCORDINGLY, DELET ED THIS ADDITION. NOW THE DEPARTMENT IS IN APPEAL. 62 LEARNED D.R. SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND FURTHER SUBMITTED THAT THE ADDITION MADE BY THE ASS ESSING OFFICER WAS BASED ON THE STATEMENT OF THE ASSESSEE HIMSELF. TH EREFORE, LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE SAME. 63 IN HIS RIVAL SUBMISSIONS, LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW A ND FURTHER SUBMITTED THAT WHATEVER UNDISCLOSED INCOME WAS FOUND DURING T HE COURSE OF SEARCH 37 WAS ADDED BY THE ASSESSING OFFICER. THEREFORE, SEP ARATE ESTIMATED ADDITION MADE BY THE ASSESSING OFFICER WAS NOT JUST IFIED AND THE LD. CIT(A) RIGHTLY DELETED THE SAME. 64 WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PAR TIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IN THE PRESENT CASE, IT APPEARS THAT THE ASSESSEE DISCLOSED THE IN COME FROM BROKERAGE AND PROPERTY ON THE BASIS OF THE DOCUMENTS AND EVID ENCES FOUND DURING THE COURSE OF SEARCH. THE ASSESSING OFFICER HOWEVE R, ESTIMATED THE INCOME AND ENHANCED THE SAME TO RS. 5,46,145/- FROM RS. 3,64,480/- DECLARED BY THE ASSESSEE. IN OUR OPINION, WHEN THE INCOME WAS DECLARED BY THE ASSESSEE ON THE BASIS OF DOCUMENTARY EVIDENC E FOUND DURING THE COURSE OF SEARCH, THEN THE INCOME ESTIMATED BY THE ASSESSING OFFICER MERELY ON THE BASIS OF THE STATEMENT OF ASSESSEE WA S NOT JUSTIFIED PARTICULARLY WHEN NOTHING WAS BROUGHT ON RECORD TO SUBSTANTIATE THAT THE ASSESSEE IN FACT EARNED THE INCOME WHICH WAS ESTIMA TED BY THE ASSESSING OFFICER. WE, THEREFORE, CONSIDERING THE TOTALITY O F THE FACTS, DO NOT SEE ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) ON THI S ISSUE. 65 THE LAST ISSUE VIDE GROUND NO. 10 RELATES TO THE D ELETION OF SURCHARGE LEVIED UNDER SECTION 113 OF THE ACT. 38 66 FACTS RELATING TO THIS ISSUE, IN BRIEF, ARE THAT T HE ASSESSING OFFICER LEVIED SURCHARGE OF RS. 4,04,376/- BY PASSING ORDER UNDER SECTION 154 OF THE ACT. THE CONTENTION OF THE ASSESSEE BEFORE THE LD. CIT(A) WAS THAT SECTION 113 OF THE ACT DID NOT PROVIDE FOR LEVY OF SURCHARGE ON UNDISCLOSED INCOME OF THE ASSESSEE PRIOR TO THE FIN ANCE ACT 2002. THE LEARNED CIT(A), AFTER CONSIDERING THE SUBMISSIONS O F THE ASSESSEE, OBSERVED THAT THE SEARCH AND SEIZURE OPERATION WER E CONDUCTED AND CONCLUDED ON 14/08/2000 AND THE AMENDMENT IN PROV ISION FOR LEVY OF SURCHARGE UNDER SECTION 113 OF THE ACT CAME INTO EX ISTENCE IN SEARCH CASES W.E.F. 01/06/2002. THEREFORE, THE ASSESSING OFFICER WAS DIRECTED TO DELETE THE SURCHARGE SO LEVIED. NOW THE DEPARTM ENT IS IN APPEAL. 67 WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PAR TIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IN THE PRESENT CASE, IT IS NOTICED THAT A PROVISO TO SECTION 113 O F THE ACT WAS INSERTED BY THE FINANCE ACT, 2002 W.E.F.01/06/2002 AND IT HAS B EEN PROVIDED THAT THE TAX CHARGEABLE UNDER THIS SECTION I.E. 113 OF T HE ACT SHALL BE INCREASED BY A SURCHARGE IF ANY LEVIED BY ANY CENTR AL ACT AND APPLICABLE IN THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEA R IN WHICH SEARCH IS INITIATED UNDER SECTION 132 OF THE ACT OR THE REQUI SITION IS MADE UNDER SECTION 132A OF THE ACT. IT IS CLEAR THAT THIS PRO VISO IS NOT RETROSPECTIVE IN 39 NATURE AND WAS OPERATIVE W.E.F. 01/06/2002, THEREFO RE, LD. CIT(A) WAS JUSTIFIED IN DELETING THE SURCHARGE IN THIS CASE BE CAUSE THE SEARCH CONCLUDED ON 14/08/2000. WE DO NOT SEE ANY MERIT I N THIS GROUND OF THE DEPARTMENTAL APPEAL. 68 IN THE RESULT, APPEAL OF THE ASSESSEE AS WELL AS TH AT OF THE DEPARTMENT ARE DISMISSED. (ORDER PRONOUNCED IN THE COURT ON 23 RD MAY, 2014). SD/- SD/- (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 23 RD MAY, 2014. VR/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD.CIT 4. THE CIT(A) 5. THE D.R ASSISTANT REGISTRAR, ITAT, JODHPUR.