Shri Dharmendrasinh R.Waghela, Baroda V. The ACIT.,Cent.Circle-2, Baroda

ITSSA 76/AHD/2009

• Counselvise Citation: [2011] 124 COUNSELVISE.COM (IT) 8337 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 25 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 27-06-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 05-10-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MUKUND BAKSHI SHRI S K GUPTA
• Keywords: Unexplained investment; Unexplained expenditure; Income from undisclosed sources
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C BEFORE SHRI G.D. AGARWAL, VICE-PRESIDENT (AZ) AND SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER DATE OF HEARING : 27/06/2011 DRAFTED ON: 27/06/ 2011 APPEAL(S) BY SL. NO(S). IT(SS)A NO(S) ASSESSMENT YEAR(S) APPELLANT (S) RESPONDENT(S) 1. 76/AHD/2009 2002-03 DHARMENDRA SINH R.WAGHELA PROP.NARENDRA ROADLINES OPP.HEAVY WATER PLANT, CHHANI BARODA PAN:AAHPV2633B THE ASST.CIT CIRCLE-2 BARODA 2. 77/AHD/2009 2003-04 -DO- -DO- 3. 78/AHD/2009 2004-05 -DO- -DO- 4. 79/AHD/2009 2005-06 -DO- -DO- 5. 80/AHD/2009 2006-07 -DO- -DO- ASSESSEE BY : SHRI MUKUND BAKSHI REVENUE BY : SHRI S.K. GUPTA, CIT-D.R. O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THESE FIVE APPEALS HAVE EMANATED FROM THE ORDERS O F THE CIT(A)-IV, AHMEDABAD ALL IDENTICALLY DATED 02/03/2 009. SOME OF THE GROUNDS BEING COMMON AND EMERGING FROM THE I DENTICAL FACTS, THEREFORE, THESE APPEALS ARE CONSOLIDATED AND HEREB Y DECIDED BY THIS SINGLE ORDER. 2. GROUND NO.1 FOR AY 2002-03 AND GROUND NO.2 FOR AYS 2003-04, 2004-05 ARE AS UNDER:- ITA NOS.76 TO 80/AHD/2 009 DHARMENDRASINH R.WAGHELA VS. ACIT ASST.YEARS 2002-03 TO 2006-07 (RESPECTIVELY ) - 2 - THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-IV, AHMEDABAD HAS ERRED IN FACTS AND IN LAW IN CONFIRMI NG THE ACTION OF THE LD. A.O. IN MAKING AN ADDITION OF RS.2,38,206/-{ (FOR A.Y. 2002-03)( RS.27,611/- FOR A.Y. 2003-04);( RS.2,14,952/- A.Y. 2004-05)}* BEING THE ALLEGED UNDISCLOSED INVESTMENT IN CONSTRUCTION OF RESIDENTIAL HOUSE. THE ADDITION OF RS.2,38,206/- { (FOR A.Y.2002-03),(RS.27,611/-FORA.Y.2003-04)(RS.2,14,95 2/- FOR A.Y. 2004-05)}* BEING ERRONEOUS IN FACTS AND IN LAW IS PRAYED TO BE DIRECTED TO BE DELETED.[*FIGURES O F OTHER YEARS ADDED TO CONSOLIDATE] 2.1. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDI NG ASSESSMENT ORDERS PASSED U/S.153A(B) R.W.S. 143(3) OF THE ACT ALL DATED 31/12/2007 WERE THAT THE ASSESSEE IS IN TRANSPORT B USINESS. A SEARCH U/S.132 OF THE ACT WAS CARRIED OUT ON 24/11/2005. CONSEQUENCE THERE-UPON NOTICE U/S.153A WAS ISSUED AND IN COMPLI ANCE RETURNS WERE FILED DISCLOSING INCOME AS FOLLOWS:- SR.NO(S) ASST.YEAR(S) ORIGINAL RETURN U/S.139((1) INCOME DECLARED AFTER SEARCH 1. 2002-03 4,54,950/- 6,87,750/- 2. 2003-04 10,59,910/- 18,22,610/- 3. 2004-05 16,16,030/- 19,60,070/- ITA NOS.76 TO 80/AHD/2 009 DHARMENDRASINH R.WAGHELA VS. ACIT ASST.YEARS 2002-03 TO 2006-07 (RESPECTIVELY ) - 3 - 2.2. THE ADMITTED FACTUAL POSITION IS THAT A HOUSE WAS CONSTRUCTED AT MILLAN PARK SOCIETY. TO DETERMINE THE COST OF CONSTRUCTION, THE MATTER WAS REFERRED TO VALUATION CELL AND THE VALUA TION OFFICER HAS ASSESSED THE COST OF CONSTRUCTION AS PER THE FOLLOW ING CHART: S.NO. PERIOD OF CONSTRUCTION EXPENDITURE AS STATED BY THE ASSESSEE (RS.) ASSESSED COST OF CONSTRUCTION (RS.) DIFFERENCE RS.) 01 2001-2002 1307,549/- 18,45,755/- 5,38,206/- 02 2002-2003 3,10,026/- 4,37,637/- 1,27,611/- 03 2003-2004 7,65,163/- 10,80,115/- 3,14,952/- 04 2004-2005 3,87,532/- 5,47,046/- 1,59,514/- TOTAL 27,70,270/- 39,10,563/- 11,40,283/- 2.3. AS AGAINST THE SAID DIFFERENCE, IT WAS NOTED B Y THE AO THAT FOR AY 2002-03 THE ASSESSEE HAS DISCLOSED RS.3 LACS, AN D FOR AYS 2003- 04 & 2004-05 RS.1 LAC EACH. THE AO, HAS THEREFOR E HELD THAT THE DIFFERENCE IN THE VALUATION WAS MORE THAN THE AMOUN T DISCLOSED THEREFORE THE BALANCE WAS RESPECTIVELY TO BE TAXED FOR ALL THE THREE YEARS AMOUNTING TO RS.2,38,206/-, RS.27,611/- AND R S.2,14,952/- RESPECTIVELY FOR ASSESSMENT YEARS 2002-03 TO 2004-0 5. ACCORDINGLY THE ADDITIONS FOR EACH YEAR WERE MADE W HICH WERE CHALLENGED BEFORE THE FIRST APPELLATE AUTHORITY. ITA NOS.76 TO 80/AHD/2 009 DHARMENDRASINH R.WAGHELA VS. ACIT ASST.YEARS 2002-03 TO 2006-07 (RESPECTIVELY ) - 4 - 3. BEFORE LD.CIT(A), IT WAS CONTESTED THAT THE DVO HAS ADOPTED THE RATES AS PRESCRIBED BY CPWD. HOWEVER, THOSE RATES WERE HIGHER AS COMPARED TO THE PREVAILING RATES APPLICAB LE FOR THE YEARS UNDER CONSIDERATION. IT WAS ARGUED THAT THE ASSESS EE HAD NOT INCURRED THAT COST OF EACH ITEM WHICH WAS TAKEN BY THE DVO. NEXT, IT WAS ALSO ARGUED THAT MOST OF THE EXPENDITURE AS SHOWN BY THE ASSESSEE AMOUNTING TO RS.30,78,086/- WAS INCURRED OUT OF THE WITHDRAWALS FROM BANK ACCOUNTS. IT WAS ALSO INFORMED THAT THE WITHDRAWALS FOR CONSTRUCTION ACTIVITY HAVE REGULARL Y BEEN MADE OUT OF A BANK ACCOUNT MAINTAINED BY THE FATHER OF THE ASSESS EE. FURTHER, IT WAS ALSO CONTESTED THAT EVEN WHILE FILI NG A RETURN ADDITIONAL INCOME OF RS.7 LACS WAS DECLARED IN COMP LIANCE OF NOTICE ISSUED AFTER THE SEARCH. IT HAS ALSO BEEN ARGUED THAT CONSIDERING THE DISCLOSURE OF RS.7 LACS, THE TOTAL VALUE OF THE PRO PERTY IN QUESTION WAS THEREFORE DISCLOSED AT RS.37,78,086/-. HOWEVER, THE DVO HAS ESTIMATED THE VALUE AT RS.39,10,563/-. THEREFORE TH E RATIO BETWEEN THE TWO WAS ONLY AT RS.1,32,467/- . THE DIFFERENCE RATIO OF THE TWO WAS ONLY 3.39% WHICH WAS VERY NOMINAL THEREFORE DES ERVES TO BE IGNORED. HOWEVER THE LD.CIT(A) WAS NOT CONVINCED AND HELD THAT ONCE THE ASSESSEE HAS HIMSELF HAS ADMITTED AN INVESTMENT OF UNDISCLOSED INVESTMENT TOWARDS CONSTRUCTION OF RESI DENTIAL HOUSE THE DIFFERENCE IN THE COST OF CONSTRUCTION WAS RIGHTLY ASSESSED BY THE AO. BEING AGGRIEVED; NOW THE ASSESSEE IS FURTHER IN APPEALS. ITA NOS.76 TO 80/AHD/2 009 DHARMENDRASINH R.WAGHELA VS. ACIT ASST.YEARS 2002-03 TO 2006-07 (RESPECTIVELY ) - 5 - 4. WE HAVE HEARD BOTH THE SIDES. FROM THE SIDE OF THE ASSESSEE, LD.AR MR.MUKUND BAKSHI APPEARED AND CONTESTED THAT THE DIFFERENCE BETWEEN THE TWO VALUATIONS, ONE AS DISCL OSED BY THE ASSESSEE, AND THE OTHER AS ESTIMATED BY THE DVO, WA S VERY NOMINAL IN PERCENTAGE THEREFORE SUCH A NOMINAL DIFFERENCE H AS TO BE IGNORED. IN SUPPORT RELIANCE IS PLACED ON THE FOLLOWING CASE LAWS:- SL.NO(S) DECISION IN THE CASE OF REPORTED IN 1. CIT VS. ABEESON HOTELS PVT.LTD. (2004) 191 CTR (MP) 263 2. ACIT VS. SMT. RAMKALI SHIVHAREY (2004) 4 SOT 338 (AGRA) 3. CIT VS. SMT. APARAJITHA SHANTILAL MAHAJAN (2005) 272 ITR 470 (MP) 4. SMT. PREM KUMARI MUDRIA VS. ACIT (2008) 303 ITR 128 (RAJ) 5. AMT ESTATE ORGANISERS VS. ITO 113 ITD 255 (AHD.) (TM) 5. FROM THE SIDE OF THE REVENUE, LD.DR MR.S.K. GUPT A, APPEARED AND PLACED RELIANCE ON THE ORDERS OF THE AO AND CIT (A). HE HAS CONTESTED THAT THIS IS THE CASE WHERE A SEARCH WAS CONDUCTED AND AN UNEXPLAINED INVESTMENT WAS DETECTED AFTER THE SEARC H, THEREFORE WHATEVER AMOUNT WAS ASSESSED BY THE DVO SHOULD BE H ELD AS UNDISCLOSED INCOME OF THE ASSESSEE. ITA NOS.76 TO 80/AHD/2 009 DHARMENDRASINH R.WAGHELA VS. ACIT ASST.YEARS 2002-03 TO 2006-07 (RESPECTIVELY ) - 6 - 6. BEFORE US A CHART IS FURNISHED TO DEMONSTRAT E THAT THE DIFFERENCE BETWEEN THE TWO VALUATIONS WAS VERY NOMINAL AS FOLL OWS:- AS PER APPELLANT FINANCIAL YEAR INCURRED BY THE APPELLANT ADDITIONAL AMOUNT DISCLOSED IN RETURN TOTAL DECLARED BY APPELLANT EXPENDITURE INCURRED BY APPELLANT & CONSIDERED BY DVOI AS PER DVOS REPORT ADDITION MADE BY A.O. 2001-02 848,999 300,000 1,148,999 1,307,549 1,845,755 238,206 2002-03 773,816 100,000 873,816 310,026 437,637 27,611 2003-04 962,564 100,000 1,062,564 765,163 1,080,115 214,952 2004-05 492,707 200,000 692,707 387,532 547,046 - 3,078,086 700,000 3,778.086 2,770,270 3,910,553 480,769 700,000 TOTAL COST 3,470,270 DIFFERENCE BETWEEN RS.39,10,553/- AND RS.37,78,086/ - = RS.1,32,467/-(3.39% OF RS.39,10,553/-) DIFFERENCE BETWEEN RS.39,10,553/- AND RS.34,70,270/ - = RS.4,40,283/- (11.26% OF RS.39,10,553/-) 6.1. IT HAS ALSO BEEN ARGUED THAT IN ADDITION TO TH E FIRST PLEA OF MARGINAL DIFFERENCE IN THE TWO VALUATION, THE OTHER PLEA IS THAT THE ASSESSEE HAS MAINTAINED A DETAILED ACCOUNT OF T HE EXPENDITURE INCURRED FOR CONSTRUCTION OF THE SAID P ROPERTY. THE ASSESSEE HAS INFORMED THAT THE CONSTRUCTION MATERIA L PURCHASED WAS DULY RECORDED, HENCE THE NAMES OF THE PARTIES WHO H AVE SUPPLIED THE CONSTRUCTION MATERIAL; ALONG WITH THE MODE OF PAYM ENT WAS DULY MAINTAINED. SUCH DETAILS ARE AVAILABLE BEFORE US AS PER PAGE NOS.78 TO 83 OF THE COMPILATION. AN ANOTHER PLANK OF ARGUMENT IS THAT THE DVO HAS GRANTED ONLY 5% REBATE OF SELF SUPERVISION CHARGE S ITA NOS.76 TO 80/AHD/2 009 DHARMENDRASINH R.WAGHELA VS. ACIT ASST.YEARS 2002-03 TO 2006-07 (RESPECTIVELY ) - 7 - BUT GENERALLY THIS REBATE IS GRANTED UPTO 7 TO 8% T O DETERMINE THE COST OF CONSTRUCTION. IT HAS ALSO BEEN POINTED O UT THAT THE DVO HAS ADDED THE ARCHITECTURE FEES ON ESTIMATE BASIS AT 3% OF THE TOTAL COST DETERMINED BUT THE CORRECT FACTUAL POSITION WAS THA T ONLY RS.55,000/- WAS PAID TO THE ARCHITECTURE. 7. CONSIDERING THE ARGUMENTS OF BOTH THE SIDES AND ON APPRECIATION OF THE FACTS OF THE CASE, WE ARE OF THE VIEW THAT B ECAUSE OF THREE BASIC REASONS THIS GROUND DESERVES TO BE ALLOWED. 7.1. FIRST, THAT THE ASSESSEE HAS MAINTAINED A DETAILED EXPEND ITURE ACCOUNT. THIS ACCOUNT HAS PRECISELY STATED THE IT EM WISE PARTICULARS OF THE EXPENDITURE, PARTIES FROM WHOM THE CONSTRUCT ION MATERIAL WAS PURCHASED WITH THEIR RESPECTIVE BILL NUMBERS AND TH E MODE OF PAYMENT. A SUBSTANTIAL NUMBER OF PAYMENTS WERE FO UND TO BE THROUGH CHEQUE. SUPPORTING BILLS HAVE ALSO BEEN PL ACED ON RECORD. REVENUE DEPARTMENT HAS NOT POINTED OUT ANY FALLACY IN THE RECORDS MAINTAINED BY THE ASSESSEE. THIS IS ALSO NOT THE C ASE OF THE REVENUE THAT EITHER THE BILLS WERE INCORRECT, BOGUS OR NOT RECORDED PROPERLY. AS AGAINST THAT, REVENUE DEPARTMENT HAS APPLIED CER TAIN RATES OF CONSTRUCTION AND THERE UPON ESTIMATED THE VALUE AT RS.39,90,300/-. THIS AMOUNT APPEARS TO BE AN ESTIMATED COST OF CONS TRUCTION BECAUSE THE DVO HAS ADOPTED AN ESTIMATED RATE OF CONSTRUCTI ON OF EACH ITEM OF CONSTRUCTION. IN SUCH A SITUATION, IF THE ESTI MATED RATES AS ADOPTED BY THE DVO ARE PITTED AGAINST THE EXACT RAT E OF CONSTRUCTION, ITA NOS.76 TO 80/AHD/2 009 DHARMENDRASINH R.WAGHELA VS. ACIT ASST.YEARS 2002-03 TO 2006-07 (RESPECTIVELY ) - 8 - THEN NATURALLY ONE HAS TO COMPUTE THE TOTAL VALUE ON THE BASIS OF THE EXACT COST OF CONSTRUCTION BEING DULY SUPPORTED BY RELEVANT BILLS. 7.2. TH E SECOND REASON FOR ACCEPTING THE PLEA OF THE ASSESSEE IS THAT THE DVO HAS REDUCED ONLY 5% SELF SUPERVISION REBATE, BUT GENERALLY IN SUCH TYPE OF CASES THE SELF SUPERVISIO N REBATE IS ALLOWED UPTO 8%. IF THAT CONCESSION IS GRANTED, THEN THER E WOULD BE NO DIFFERENCE IN BOTH THE VALUATIONS. IT IS ALSO NO T FAIR ON THE PART OF THE DVO TO ADD AN ADHOC PERCENTAGE OF ARCHITECTURE FEE SPECIALLY WHEN THE ASSESSEE HAS FURNISHED THE EXACT AMOUNT OF PAYMENT. 7.3 THIRDLY, IT IS ALSO APPARENT THAT THE DIFFERENCE BETWEEN TH E TWO VALUATIONS IS VERY NOMINAL. IN A SITUATION WHE N ONLY MARGINAL DIFFERENCE WAS NOTED, THEN THE COURTS HAVE DIRECTE D TO IGNORE THE ESTIMATED VALUATION OF THE DVO. FOR THIS LEGAL PR OPOSITION, FEW CASE LAWS HAVE BEEN CITED, AS LISTED ABOVE. THEREFO RE, PLACING RELIANCE ON THESE DECISIONS, AND ON DUE CONSIDERATI ON OF THE COGENT MATERIAL PLACED AS DISCUSSED SUPRA, WE HEREBY REVE RSE THE FINDINGS OF THE AUTHORITIES BELOW AND DIRECT TO ADOPT THE VA LUATION OF THE PROPERTY AS DECLARED BY THE ASSESSEE. THIS GROUND FOR THESE THREE YEARS IS ALLOWED. 8. GROUND NO.1 FOR AYS 2003-04 & 2005-06 AND GROUND NO.3 FOR AY 2004-05 A RE COMMON IN RESPECT OF ESTIMATED ADDITION TOWARDS HOUSE-HOLD EXPENSES , REPRODUCED BELOW:- ITA NOS.76 TO 80/AHD/2 009 DHARMENDRASINH R.WAGHELA VS. ACIT ASST.YEARS 2002-03 TO 2006-07 (RESPECTIVELY ) - 9 - THE LD.COMMISSIONER OF INCOME-TAX (APPEALS)-IV, AHMEDABAD HAS ERRED IN FACTS AND IN RESTRICTING THE ALLOWANCE TO RS.24,000/-{ (FOR AY 2003-04),( RS.32,000/-FOR AY 2005- 06);( RS.24,000/- FOR AY 2004-05)} INSTEAD OF ALLOW ING THE ENTIRE ADDITION OF RS.55,000/-{ (FOR AY 2003-04),( RS.80,000/- FOR AY 2005-06);( RS.55,000/-FOR AY 2004-05)}, BEIN G THE AMOUNT ALLEGED TO BE EXPENDED ON HOUSEHOLD EXPENSES OUT OF UNDISCLOSED SOURCES, MADE BY THE LD. A.O. THE ADDI TION OF RS.31,000/-{ (FOR AY 2003-04),( RS.48,000/- FOR AY 2005-06); (RS.31,000/- FOR AY 2004-05)} BEING ERRONEOUS IN FA CTS AND IN LAW IS PRAYED TO BE DIRECTED TO BE DELETED. 8.1. THE ASSESSEE FOR AY 2003-04 HAS INCURRED THE E XPENDITURE OF RS.1,20,000/-TOWARDS HOUSE-HOLD EXPENSES, WHICH WAS CONSIDERED BY THE AO INSUFFICIENT AND THEREFORE HELD THAT AT L EAST RS.14,500/- EXPENDITURE PER MONTH SHOULD HAVE BEEN INCURRED. AS PER AO THE ANNUAL HOUSE-HOLD EXPENDITURE WOULD HAVE BEEN RS.1, 75,000/- ANNUALLY, HENCE, THE DIFFERENCE OF RS.55,000/- WAS TAXED. THE SAME RECOURSE WAS REPEATED FOR REST OF THE YEARS. 9. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST A PPELLATE AUTHORITY, LD.CIT(A) HAS HELD THAT A SUM OF RS.12,000/- P.M. W OULD BE ADEQUATE FOR AY 2003-04 AND LIKE WISE FOR REST OF THE YEARS PART RELIEF WAS GRANTED. 10. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDE S AND CONSIDERING THE TOTALITY OF THE CIRCUMSTANCES OF TH E CASE, WE ARE OF THE VIEW THAT THE HOUSE-HOLD EXPENDITURE AS ESTIMAT ED BY THE LD.CIT(A) APPEARS TO BE ADEQUATE FOR THE YEARS UNDE R CONSIDERATION ITA NOS.76 TO 80/AHD/2 009 DHARMENDRASINH R.WAGHELA VS. ACIT ASST.YEARS 2002-03 TO 2006-07 (RESPECTIVELY ) - 10 - FOR THIS ASSESSEE, SPECIALLY WHEN THE REVENUE HAS N OT CHALLENGED THE SAID FINDING OF LD.CIT(A). THESE GROUNDS FOR ALL T HE YEARS ARE THEREFORE, DISMISSED. 11. FOR AY 2004-05, GROUND NO.1 IS IN RESPECT OF FOREIGN TRAVEL EXPENSES REPRODUCED BELOW:- 1. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-I V, AHMEDABAD HAS ERRED IN FACTS AND IN LAW IN CONFIRMI NG THE ACTION OF THE LD. A.O. IN MAKING AN ADDITION OF RS. 1,50,000/- IN RESPECT OF FOREIGN TRAVEL EXPENSES ON THE ALLEGE D GROUND THAT THE SAID EXPENSES ARE INCURRED OUT OF UNACCOUN TED INCOME OF THE APPELLANT. THE ADDITION OF RS.1,50,000/- BE ING ERRONEOUS IN FACTS AND IN LAW IS PRAYED TO BE DIREC TED TO BE DELETED. 11.1. THIS GROUND IS NOT PRESSED, HENCE DISMISSED . 12. FOR AY 2005-06, GROUND NO.2 IS REPRODUCED BELOW:- 2. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-I V, AHMEDABAD HAS ERRED IN FACTS AND IN LAW IN CONFIRMI NG THE ADDITION OF RS.50,000/- MADE BY THE LD. A.O. ON ACC OUNT OF ALLEGED PAYMENT MADE IN CASH TREATING THE SAME AS UNEXPLAINED EXPENDITURE U/S.69C. THE ADDITION OF R S.50,000/- BEING ERRONEOUS IN FACTS AND IN LAW IS PRAYED TO BE DIRECTED TO BE DELETED. ITA NOS.76 TO 80/AHD/2 009 DHARMENDRASINH R.WAGHELA VS. ACIT ASST.YEARS 2002-03 TO 2006-07 (RESPECTIVELY ) - 11 - 12.1. DURING THE COURSE OF SEARCH FROM THE RESIDE NCE, A LOOSE- PAPER WAS FOUND SHOWING A PAYMENT OF RS.50,000/- IN CASH TO BAHADUR ON 20/11/2004. THE ASSESSEE HAS DENIED ANY KNOWLED GE OF THE SAID PAYMENT. IT WAS ALSO DENIED THAT THE PAPER WAS WRITTEN IN ASSESSEES HANDWRITING. HOWEVER, THE AO WAS NOT CONVINCED AND HELD THAT THE SAID PAYMENT WAS MADE OUT OF THE UNDI SCLOSED INCOME AND TAXED ACCORDINGLY. 13. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST A PPELLATE AUTHORITY, THE ACTION OF THE AO WAS AFFIRMED. 14. HAVING HEARD SUBMISSIONS OF BOTH THE SIDES, WE ARE OF THE VIEW THAT THE AO HAS NOT ESTABLISHED ANY NEXUS OF T HIS DOCUMENT WITH THE BUSINESS ACTIVITY OF THE ASSESSEE. THOUG H THE DOCUMENT WAS RECOVERED FROM THE ASSESSEE BUT THE ADMITTED FA CTUAL POSITION IS THAT THE SAID DOCUMENT IS NOT IN ASSESSEES HANDWRI TING. IT HAS NO NEXUS WITH THE BUSINESS ACTIVITY OF THE ASSESSEE. A N EXPLANATION ABOUT THE PRESENCE OF SUCH AN UN-CONNECTED DOCUMENT STATED TO BE THAT THE ASSESSEE BEING IN POLITICS THEREFORE IT CO ULD HAVE BELONGED TO A VISITOR. AS FAR AS THE DECISION REFERRED BY THE REVENUE DEPARTMENT IN THE CASE OF KERALA LIQUOR CORPORATION VS. CIT RE PORTED AT 222 ITR 333 (KER.) IS CONCERNED, THERE WAS A SEIZURE O F A SPECIFIC DOCUMENT. THROUGH THAT DOCUMENT IT WAS FOUND TO BE CLEAR THAT IT BELONGED TO THE SAID ASSESSEE AND THE CONTENTS WERE TRUE. ON THE BASIS OF THOSE PAPERS, IN THE CITED DECISION, IT WA S HELD THAT THE ITA NOS.76 TO 80/AHD/2 009 DHARMENDRASINH R.WAGHELA VS. ACIT ASST.YEARS 2002-03 TO 2006-07 (RESPECTIVELY ) - 12 - REGISTRATION, ALREADY GRANTED, WAS LIABLE TO BE CAN CELLED U/S.186 OF THE I.T.ACT, 1961. THIS JUDGEMENT IS NOT GOING TO HELP THE REVENUE DEPARTMENT. IN THE PRESENT APPEAL WE HAVE OBSERVED THAT EVEN AFTER THE INVESTIGATION THE AO WAS NOT ABLE TO CORRELATE ANY UNDISCLOSED BUSINESS ACTIVITY OR THE UNACCOUNTED INCOME OF THE ASSESSEE, THEREFORE IN THE ABSENCE OF ANY OTHER CORROBORATIVE EVIDENCE IN THE POSSESSION OF THE REVENUE, THIS ADDITION IS UNCALLE D FOR, HENCE GROUND IS ALLOWED. 15. FOR AY 2006-07 GROUND NO.1 IS AS FOLLOWS:- 1. THE LD. COMMISSIONER OF INCOME-TAX(APPEALS)-IV , AHMEDABAD HAS ERRED IN FACTS AND IN LAW IN CONFIRMI NG THE ADDITION OF RS.30,27,987/- ALLEGING THAT THE CONTENT OF THE SEIZED MATERIAL FOUND AS STATED IN THE ORDER BELONGS TO THE APPELLANT. THE ADDITION OF RS.30,27,987/- BEING BA D IN LAW AND IN FACTS IS PRAYED TO BE DELETED. 15.1. DURING THE COURSE OF SEARCH A DOCUMENT WAS FO UND AND THE ASSESSEE WAS ASKED TO EXPLAIN THE NATURE OF JOTTING S MADE IN THE SAID PAPER. THE EXPLANATION OF THE ASSESSEE WAS THAT THE SAID DOCUMENT DID NOT BELONG TO HIM. THE AO HAS DISCUSSED IN GENERAL THAT IF A DOCUMENT RECOVERED FROM THE ASSESSEE DURI NG THE COURSE OF SEARCH, THEN IN VIEW OF SECTION 132(4A) OF THE ACT THE PRESUMPTION IS THAT THE DOCUMENT BELONGED TO THE ASSESSEE IN WH OSE POSSESSION IT WAS RECOVERED. THE OTHER PRESUMPTION IS THAT THE C ONTENTS OF WERE TRUE AND BELONGED TO THE ASSESSEE. BY APPLYING THE GENERAL PRINCIPLE, LD.DR HAS HELD THAT THE EXPLANATION FURNISHED BY TH E ASSESSEE WAS ITA NOS.76 TO 80/AHD/2 009 DHARMENDRASINH R.WAGHELA VS. ACIT ASST.YEARS 2002-03 TO 2006-07 (RESPECTIVELY ) - 13 - NOT SATISFACTORY AND, THEREFORE, MADE AN ADDITION O F RS.26,39,987/-. IN ADDITION TO THE SAID PAPER, THERE WAS AN ANOTHE R PAPER, WHICH WAS IMPOUNDED, AND THAT HAD REVEALED THAT A SUM OF RS.3 .88 LAKHS WAS DUE FROM ONE MR.LALA. THE SAID AMOUNT WAS THUS TAX ED IN THE HANDS OF THE ASSESSEE. AGAINST THE TOTAL ADDITION OF RS. 30,27,987/- THE ASSESSEE HAS PREFERRED AN APPEAL BEFORE THE CIT(A). 16. BY SIMPLY DISCUSSING THE PROVISIONS OF SECTION 132(4A), THE LD.CIT(A) HAS HELD THAT THE DOCUMENT BEING FOUND IN POSSESSION OF THE ASSESSEE, THEREFORE, THE INCOME NOTED THEREIN W AS THE UNDISCLOSED INCOME OF THE ASSESSEE. THE ACTION OF THE AO WAS CONFIRMED. 17. WE HAVE HEARD BOTH THE SIDES. WE HAVE PERUSED THE MATERIAL PLACED BEFORE US. AS PER THE DOCUMENT PLACED ON P AGE NO.179 OF THE COMPILATION, IT HAD REFLECTED SOME BUSINESS TRA NSACTION IN RESPECT OF OIL AND KEROSENE OIL. AS PER THIS TYPED DOCUMEN T, THERE WAS A MENTION OF PARTIES FROM WHOM A BUSINESS ACTIVITY WA S PERFORMED. THE FIGURES HAVE MENTIONED THE RATES APPLIED FOR TH E SAID COMMODITY AND THE DETAILS OF THE AMOUNT RECEIVED. THIS DOCUME NT IN FACT APPEARS TO BE IN RESPECT OF SOME OIL-BUSINESS BUT THERE IS NO DENIAL OF THIS ADMITTED FACT THAT THE ASSESSEE IS IN THE B USINESS OF TRANSPORT. HENCE, A VEHEMENT CONTENTION IS THAT BY THE VERY NA TURE OF DOCUMENT IT DID NOT RELATE TO THE BUSINESS ACTIVITY OF THE A SSESSEE. HOWEVER, THERE WAS NO FINDING OR EVEN AN ALLEGATION OF THE R EVENUE THAT THERE ITA NOS.76 TO 80/AHD/2 009 DHARMENDRASINH R.WAGHELA VS. ACIT ASST.YEARS 2002-03 TO 2006-07 (RESPECTIVELY ) - 14 - WAS SUCH TYPE OF BUSINESS AT ALL RUN BY THE ASSESS EE. IT WAS NOT THE CASE OF THE REVENUE THAT AN UNDISCLOSED BUSINESS WA S UNEARTHED WHICH WAS NOT FOUND RECORDED IN THE BOOKS OF ACCOUN T. BARRING THIS PAPER, THERE IS NO MATERIAL IN POSSESSION OF THE RE VENUE TO CORROBORATE THAT THE SAID PAPER HAD ANY CONNECTION WITH THE ACCOUNTED OR UNACCOUNTED BUSINESS ACTIVITY OF THE A SSESSEE. FROM THE SIDE OF THE REVENUE EVEN NO SUCH ATTEMPT WAS EV ER MADE TO MAKE AN ENQUIRY FROM THOSE PARTIES WHOSE NAMES WERE PRINTED ON THE SAID PAPER. BECAUSE OF THESE REASONS, LD.AR M R. MUKUND BAKSHI HAS EMPHASIZED THAT THE SAID DOCUMENT WAS N OTHING BUT A BALD DOCUMENT . FOR THIS LEGAL PROPOSITION, CASE LAWS CITED ARE :- SL.NO(S) DECISION IN THE CASE OF REPORTED IN 1. ACIT VS. SATYAPAL VASAN 295 ITR (AT) 352 [ITAT JABALPUR] 2. CIT VS. GIRISH CHAUDHARY (2008) 296 ITR 619 (MAD.) 3. CIT VS. S.M. AGGARWAL (2007) 293 ITR 43 (DEL.) 4. JAYA S.SHETTY VS. ACIT (1999) 69 ITD 336 (MUM.) 5. BANSAL STRIPS P.LTD. VS. ACIT (2006) 99 ITD 177 (DEL.) 18. FROM THESE DECISIONS, IT TRANSPIRES THAT IF AN ADDITION IS TO BE MADE ON THE BASIS OF A SEIZED DOCUMENT, THEN IT MUS T BE SUPPORTED BY SOME IDENTIFICATION HAVING ANY NEXUS WITH THE UNACCOUNTED BUSINESS ACTIVITY OF THE ASSESSEE. THE NATURE OF TRANSACTION SHOULD REFLECT SOME DIRECT OR INDIRECT CONNECTION WITH THE ACCOUNTED OR UNACCOUNTED ACTIVITY OF THE ASSESSEE. IF A DOCUMEN T IS SILENT OR THE INGREDIENTS COULD NOT BE LINKED, THEN THE SAID DOCU MENT WAS ITA NOS.76 TO 80/AHD/2 009 DHARMENDRASINH R.WAGHELA VS. ACIT ASST.YEARS 2002-03 TO 2006-07 (RESPECTIVELY ) - 15 - CONSIDERED AS A DUMB DOCUMENT. PLACING RELIANCE ON THESE DECISIONS, INTER-ALIA WE ARE OF THE VIEW THAT THE R EVENUE DEPARTMENT HAD NOT MADE SUFFICIENT ENQUIRY SO AS TO ESTABLISH THAT IN FACT THE SAID DOCUMENT HAD UNEARTHED A CONCEALED BUSINESS AC TIVITY OF THE ASSESSEE. IN THE ABSENCE OF ANY SUCH EVIDENCE, THE ADDITION SO MADE BY THE AO REMAINED UN-CORROBORATED, HENCE, WE HEREB Y REVERSE THE FINDINGS AND ALLOW THIS GROUND. 19. FOR AY 2006-07, GROUND NO.2 IS AS FOLLOWS:- 2. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-I V, AHMEDABAD HAS ERRED IN FACTS AND IN LAW IN CONFIRMI NG THE ADDITION OF RS.3,05,766/- BEING THE AMOUNT FOUND IN THE BANK ACCOUNT OF THE APPELLANT WITHOUT CONSIDERING THE EXPLANATIONS AND SUBMISSIONS MADE BY THE APPELLANT DURING THE CO URSE OF ASSESSMENT PROCEEDINGS. THE ADDITION OF RS.3,05,76 6/- BEING ERRONEOUS IN FACTS AND IN LAW IS PRAYED TO BE DIREC TED TO BE DELETED. 19.1. THIS GROUND IS NOT PRESSED, HENCE DISMISSED. 20. IN THE RESULT, APPEAL FOR AY 2002-03 IS ALL OWED, AND APPEALS FOR REST OF THE AYS, I.E. 2003-04, 2004-05, 2005- 06 AND 2006-07 ARE PARTLY ALLOWED. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 30 TH JUNE, 2011. SD/- SD/- ( G.D. AGARWAL ) ( MUKUL KR. SHRAWAT ) VICE PRESIDENT (AZ) JUDICIAL ME MBER AHMEDABAD; DATED 30/ 6 /2011 T.C. NAIR, SR. PS ITA NOS.76 TO 80/AHD/2 009 DHARMENDRASINH R.WAGHELA VS. ACIT ASST.YEARS 2002-03 TO 2006-07 (RESPECTIVELY ) - 16 - COPY OF THE ORDER FORWARDED TO : 1. THE ASSESSEE. 2. THE DEPARTMENT. 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-IV, AHMEDABAD 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD 1. DATE OF DICTATION..27/6/2011 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 27/6/2011 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S30.6.11 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 30.6.11 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER