M/S. ACIT CIR 6(3), MUMBAI V. THE ARMAITY RAYMOND ELAVI,

ITSSA 79/MUM/2008

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 0736 (ITAT-MUMBAI)
• Duration Of Justice: 6 year(s) 10 month(s) 6 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 27-05-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 12-03-2015
• Assessment Year: misc
• Appeal Filed On: 21-07-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARESH KUMAR BALODIA
• Assessee Lawyers: ABHISHEK TILAK
• Keywords: Search and seizure; Block assessment
• Section: 131; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH D , MUMBAI BEFORE SHRI B.R. BASKARAN , ACCOUNTANT MEMBER AND SHRI SANJAY GARG , JUDICIAL MEMBER IT(SS) A NO. 78/M/2008 ASSESSMENT YEAR: B.P. FROM 01/04/1997 TO 21/01/2003 ACIT, CIR. - 6(3), R.NO.522, 5 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 VS. SHRI RAYMOND NARIMAN ELAVIA, 91, SHRI KRISHNA BHAVAN, HINDU COLONY ROAD NO.3, DADAR(E), MUMBAI 400 014 PAN: AAAPE 0554D (APPELLANT) (RESPONDEN T) IT(SS)A NO. 79/M/2008 ASSESSMENT YEAR: B.P. FROM 01/04/1997 TO 21/01/2003 ACIT, CIR. - 6(3), R.NO.522, 5 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 VS. MRS. ARMAITY RAYMOND ELAVIA, 91, SHRI KRISHNA BHAVAN, HINDU COLONY ROAD NO.3, DADAR( E), MUMBAI 400 014 PAN: AABPE 6245L (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI VIPUL JOSHI, A.R. & SHRI ABHISHEK TILAK, A.R. REVENUE BY : SHRI NARESH KUMAR BALODIA, CIT - DR DATE OF HEARING : 12.03 .201 5 DATE OF PRONOUNCEMENT : 27.05. 2015 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE ABOVE TITLED APPEALS PREFERRED BY THE REVENUE AGAINST THE ORDER S OF THE COMMISSIONER OF INCOME TAX (APPEALS) [(HEREINAFTER REFERRED TO AS CIT(A)] DATED 23.05.08 ARE RELATING TO THE RELATED ASSESSEES (HUSBAND & IT(SS) NO.79/M/2008 & IT(SS) NO.78/M/2008 MRS. ARMAITY RAYMOND ELAVIA & SHRI RAYMOND NARIMAN ELAVIA 2 WIFE). SINCE THE ISSUES INVOLVED THEREIN ARE IDENTICAL IN NATURE, THE SAME ARE TAKEN TOGETHER FOR DISPOSAL BY THIS COMMON ORDER. FOR THE SAKE OF CONVENIENCE, FACTS HAVE BEE N TAKEN FROM IT(SS)A NO. 78/M/2008 IN THE CASE OF SHRI RAYMOND NARIMAN ELAVIA . 2. THE REVENUE HAS AGITATED AGAINST THE ACTION OF THE LD. CIT(A) IN HOLDING THAT THE PROCEEDINGS INITIATED UNDER SECTION 158BD AGAINST THE ASSESSEE WERE BAD IN LAW AND FURTHER IN DELETING THE ADDITION OF RS. 10 , 72 , 500/ - WHICH WAS MADE BY THE ASSESSING OFFICER (HEREINAFTER REFERRED TO AS THE AO) IN BLOCK ASSESSMENT AS UNDISCLOSED INCOME OF THE ASSESSEE. 3. THE BRIEF FACTS OF THE CASE AS BROUGHT OUT FROM THE IMPUGNED ORDER ARE AS UNDER: FACTS OF THE CASE ARE THAT ACTION UNDER SECTION 132 OF THE INCOME TAX ACT, 1961 WAS CONDUCTED AT THE RESIDENCE AND BUSINESS PREMISES OF M /S. KEYSTONE REALTORS PVT. LTD. [KRPL] ON 21 - 01 - 2003. IN THE SAID OPERATION, A LOOSE PAPER NO. 31 OF ANNEXU RE A - 3 WAS SEIZED FROM THE OFFICE OF KRIL WHICH INDICATED TRANSACTION RELATED TO SALE OF FLAT ALONG WITH FURNITURE. ACCORDING TO AO, A TOTAL SALE CONSIDERATION SHOWN IN THIS PAPER IS OF R. 39 LACS OUT OF WHICH R S. 18 LACS HAVE BEEN RECEIVED THROUGH CHEQUE AND BALANCE OF RS. 21 LAC S HAS BEEN RECEIVED IN CASH. THE TRANSACTION WAS RELATED TO MS. PARIN N. SANAJANA, WHO WAS MAUSI OF ONE OF THE DI RECTOR OF KRPL. MR. PERCY CHOUDH ARY DISOWNED THE PAPER AND STATED THAT SAID TRANSACTION IS RELATED TO SALE OF FLAT BY MS. PARIN N. SANJANA. DURING THE COURSE OF ASSESSMENT PROCEEDINGS OF KRPL FOR BLOCK ASSESSMENT, SUMMONS WERE ISSUED TO THE SECRETARY OF THE SAID BUILDING. THE SECRETARY REPLIED THAT THE FLAT NO.304, 3 RD FLOOR, PLOT NO.666 IN THE NEW ORIENG C HS LTD., JAHANG IR ROAD, PARSI COLONY, DADAR, MUMBAI - 400 014, WAS SOLD ON 18/3/2002 BY M/S. PAIN N. SANJANA TO MR. RAYMOND N. ELAVIA & MRS. ARMAITY RAYMOND ELAVIA. THEREFORE, AO OF KRPL [DCIT, C.C. - 10, MUMBAI] HAS TRANSFERRED A COPY OF SEIZED MATERIAL AS WELL AS THE LET TE R FROM TH E SECRETARY OF THE BUILDING, FROM WHERE FLAT HAS BEEN SOLD, TO ACIT 6(3) VIDE HIS LETTER DATED 13/3/2005. THEREFORE AFTER CONSIDERING THE ENTIRE MATERIAL FACTS ON RECORD, THE THEN AO RECORDED HIS SATISFACTION THAT RS.2 I LACS HAS BEEN PAID IN CASH BY MR. RAYMOND N. ELAVIA & MRS. ARMAITY RAYMOND ELAVIA FOR THE PURCHASE OF THE SAID FLAT. IN VIEW OF THE ABOVE, AO ISSUED NOTICE U/S. 158BD TO THE ASSESSEE. ASSESSEE SUBMITTED HIS RETURN OF INCOME FOR BLOCK PERIOD SHOWING NIL UNDISCLOSED INCOME. IN IT(SS) NO.79/M/2008 & IT(SS) NO.78/M/2008 MRS. ARMAITY RAYMOND ELAVIA & SHRI RAYMOND NARIMAN ELAVIA 3 THE COURSE OF ASSESSMENT PROCEEDINGS, COPY OF THE SEIZED PAPER, LETTER SENT BY DCIT CENTRAL CIRCLE - 10, LETTER RECEIVED FROM SECRETARY OF THE SAID ALONG WITH SATISFACTION RECORDED BY AO WERE GIVEN TO ARS OF ASSESSEE. AO ALSO RECORDED THE STATEMENT OF MR. PERCY CHOUDHARY, DIRECTOR OF KRPL. IN HIS STATEMEN T MR. PERCY CHOUDHARY HAS STATED THAT MS. PE RIN N. SANJANA, WHO IS M AUSI O F HIS FATHER MR. SORABJEE CHOUDHARY , HAS SOLD ONE PROPERTY I.E. FLAT NO.304, 3 RD FLOOR, PLOT NO.666, NEW ORIENT CHS LTD., JEHANGI R ROAD, PARSI COLONY, DADAR, MUMBAI TO TWO PARTIES AND WAS ALSO GIVEN TO THE ASSESSEE. IN VIEW OF ABOVE AO ASKED THE AS SESSEE TO EXPLAIN AS TO WHY THE DIFFERENCE OF RS.21.45 LACS (RS.21 LACS CASH PAID FOR FLAT & RS.45,000/ - PAID FOR FURNITURE) SHOULD NOT BE CONSIDERED AS UNDISCLOSED INCOME OF THE ASSESSEE. ASSESSEE STATED THAT NO CASH HAS BEEN PAID FOR THE PURCHASE OF FLAT EXCEPT RS.18 LACS PAID THROUGH CHEQUE. ASSESSEE ALSO STATED THAT DCIT CIRCLE 6(3) HAS NOT RECORDED HIS SATISFACTION THEREFORE, THE PR OCEEDINGS U/S 158BD ARE BAD IN LAW. SECONDLY, ONLY ONE LOOSE PAPER CANNOT BE MADE. ASSESSEE ALSO PLACED RELIANCE ON MANY CASE LAWS. AO, HOWEVER, WAS NOT SATISFIED WITH THE ABOVE SUBMISSIONS OF THE ASSESSEE. AO HAS OBSERVED THAT AO IN THE ORDER SHEET DA TED 8 - 11 - 2005 HAS CLEARLY RECORDED THAT SINCE ASSESSEE HAS PAID UNACCOUNTED CASH, FOR PURCHASE OF FLAT, THEREFORE I AM OF THE OPINION THAT IT IS A FIT CASE TO ISSUE NOTICE U/S. 158BD OF THE IT ACT. IN VIEW OF ABOVE AND THE FACT THAT AO BEFORE ISSUE OF N OTICE U/S. 158 BD WAS HAVING COPY OF SEIZED PAPER, LETTER OF SECRETARY OF BUILDING, COPY OF AGREEMENT OF FLAT AND THE LETTER FROM DCIT CC - 10, AO HELD THAT HE HAD RECORDED HIS SATISFACTION. REGARDING ASSESSEE'S CONTENTION THAT NO ADDITION CAN BE MADE ON THE B ASI S OF IOO S E PAPER ONLY, AO OBSERVED THAT PART O F THE PAPER HAS BEEN ACCEPTED BY THE ASSESSEE THAT HE HAS PURCHASED THE FLAT F ROM MS. PERIN N. SA N J A NA AND AMOUNT OF CONSIDERATION OF RS.18 L ACS WAS SHOWN IN CHEQUE AND FURTHER FURNITURE WAS ALSO SOL D ALONG W ITH THE HOUSE. THEREF ORE, IT IS ESTABLISHED THAT THE SAID PAPER IS ABOUT THE PURCHASE OF FLAT BY THE ASSESSEE ONLY AND ALL THE CONTENTS OF THE SAID PAPER WOULD HAVE TO BE CONSIDERED IN TOTO. AO HAS ALSO OBSERVED THAT MARKET RATES PUBLISHED BY THE TIMES OF INDIA, DATE MAR.9, 2002 IN WHICH PROPERTY RATES OF MUMBAI RESIDENTIAL WAS GIVEN, ALSO SHOW THAT DADAR AREA RATE WAS BETWEEN 4500 - 8500 PER SQ. FEET. ON THE BASIS OF ABOVE (RS.4500 PER SQ. FEET) VALUE OF ABOVE FLAT OF 918 SQ. FEET COMES TO RS .4 1 , 3 1 , 000/ - WHICH WAS NEARLY THE SAME AS SHOWN IN SUCH PAPER I.E. RS.39 LACS. IN VIEW OF ABOVE, AO HELD THAT ASSESSEE AND HIS WIFE HAVE PURCHASED THE ABOVE FLAT FOR WHICH THEY HAVE PAID UNACCOUNTED CASH OF RS.21.45 LACS. AO THEREFORE MADE ADDITION OF RS.10, 72,500/ - I.E. HALF OF CASH PAID OF RS.21.45 LACS AS UNDISCLOSED INCOME IN THE CASE OF ASSESSEE. SIMILAR ADDITION OF RS.10,72,500/ - HAS ALSO BEEN MADE IN THE CASE OF SMT. ARMAITY RAYMOND ELAVIA. IT(SS) NO.79/M/2008 & IT(SS) NO.78/M/2008 MRS. ARMAITY RAYMOND ELAVIA & SHRI RAYMOND NARIMAN ELAVIA 4 4. IN APPEAL, THE LD. CIT(A) HELD THAT THE AO OF THE SEARCH ED PERSON HAD NOT RECORDED SATISFACTION THAT ANY INCOME OF THE ASSESSEE UNDER CONSIDERATION HAD ESCAPED ASSESSMENT. HENCE, THE PROC EEDINGS UNDER SECTION 158BD WERE BAD IN LAW. HE FURTHER HELD THAT EVEN ON MERITS, THE ADDITIONS WERE NOT WARRANTED BECAUSE THERE WAS NO CORROBORATIVE EVIDENCE THAT THE ASSESSEE HAD PAID ANY MONEY IN CASH EXCEPT RS. 18 LAKHS PAID BY CHEQUE AS SALE CONSIDERATION OF THE FLAT IN QUESTION. THE RELEVANT OBSERVATIONS OF THE LD. CIT(A) FOR THE SAKE OF CONVENIENCE ARE REPRODUCED AS UND ER: I HAVE CONSIDERED THE FACTS OF THE CASE AND DETAILED SUBMISSIONS MADE BY THE APPELLANT. SUBMISSIONS OF THE APPELLANT ARE ACCEPTABLE. AS ALREADY DISCUSSED APPELLANT HAS STATE D THAT THERE WAS NO SATISFACTION OF THE AO AND THEREF ORE PROCEEDINGS INITIATE D AGAINST THE APPELLANT ARE BAD IN LAW. IN THIS REGARD, A REFERENCE IS NEEDED TO BE MADE TO THE L ET TER DATED 31 - 03 - 2005 OF DCIT CC 10 AND ADDRESSED TO ACIT 6(3) AO OF THE APPELLANT. IN THE AFORESAID LETTER DCIT CC - 10 HAS, AFTER REFERRING TO THE SEARCH COND UCTED ON 21 - 0 1 - 200 3 AT THE RESIDENTIAL AND BUSINESS PREMISES OF KRPL AND THE LOOSE PAPER NO. 31 OF ANNEXURE A - 3 SEIZED FROM T HE OFFICE OF KRPL STATED THAT ASSESSEE O F D CIT CC HAS DISOWNED THIS PAPER AND STATED THAT TRANSACTIONS RELATED TO MS. PA R IN MASI WH O IS RELATED TO MR. PERCY CHOUDHARY. SECRETARY OF THE BUILDING WAS SUMMONED UNDER S. 131 WHO STATED THAT ABOVE FLAT HAS BEEN SOLD ON 18 - 03 - 2002 BY MR. PE RI N N. SANJANA TO MR. RAYMOND NARIMAN ELAVIA AND MRS. ARMAITY RAYMOND ELAVIA AT THE CONSIDERATION OF RS . 18 LACS. IT IS ON THE BASIS OF ABOVE THAT DCIT CC 10 HAS ASKED THE AO TO EXAMINE THE PAYMENT OF CHEQUE AND CASH MADE BY ABOVE MENTIONED PERSONS AS THE CASE OF MR. RAYMOND NANIMAN ELAVIA IS ASSESSED WITH ACIT 6(3), MU M BAI. IN MY OPINION AFORESAID FACTS CA N NOT BE CONSTRUED AS A SATISFACTI ON OF THE DC IT CC - 10 AO OF THE SEARCHED PARTY. ABOVE SAID LOOSE PAPER NO.31 HAS BEEN SEIZED FROM TIRE OFFICE OF KRPL AND THEREFORE, PRIMARY ONUS OF EXPLAINING THE ENTRIES RECORDED THEREIN IS OF M/S KRPL ONLY. M/S KRPL HAS DISOWNED THE PAPER. DCIT CC 10 HAS JUST ACCEPTED THE DISCLAIMER OF MR. PERCY CHOWDHRY DIRECTOR OF M/S KRPL WITHOUT ANY EVIDENCE SUBSTANTIATING THE DISCLAIMER. MR. PERCY CHOUDHARY FILED AN AFFIDAVIT AND GOT AWAY WITH IT. THERE IS NO OTHER EVIDENCE TO PROVE THAT WHAT IS STATED BY MR. PERCY CHOUDHARY IS TRUE AND CORRECT. DCIT CC - 10 HAS NOT CONFRONTED THE MATERIAL AND AFFIDAVIT OF MR. PERCY CHOUDHARY TO THE APPELLANT BEFORE REACHING THE CONCLUSION THAT DOCUMENT AND ENTRIES MADE THEREIN BELONG TO THE APPELLAN T. EVEN THE DETAILS OBTAINED FROM SECRETARY OF THE BUILDING DO NOT HELP THE CASE OF AO. SECRETARY OF THE BUILDING REPLIED THAT FLAT WAS SOLD BY MS. PE RI N N. SAN JANA TO MR. RAYMOND NARIMAN ELAVIA AND MRS. ARMENITY RAYMOND ELAVIA AT CONSIDERATION OF RS.18 LA CS. FACTS DISCUSSED ABOVE IN MY OPINION DO NOT CONCLUSIVELY PROVE THAT APPELLANT HAS PAID AMOUNT IN CASH AND THIS WAS PROBABLY THE REASON THAT DCIT CC - 10 IN HIS LETTER DATED IT(SS) NO.79/M/2008 & IT(SS) NO.78/M/2008 MRS. ARMAITY RAYMOND ELAVIA & SHRI RAYMOND NARIMAN ELAVIA 5 31 - 03 - 2005 HAS JUST REQUESTED THE AO TO EXAMINE THE PAYMENT MADE AS THESE TWO PER SONS PURCHASED THE FLAT DCIT CC - 10 AS CONTENDED BY THE APPELLANT HAS ASKED THE ACIT 6(3) TO MAKE FURTHER INVESTIGATIONS IN THE MATTER WHICH CANNOT BE CONSTRUED AS SATISFACTION AS CONTEMPLATED IN THE ACT. THE SATISFACTION IS REQUIRED TO BE PRECEDED BY THE INVESTIGATIONS AND INVESTIGATION IS NOT REQUIRED TO BE PRECEDED BY SATAISFACTION [ AMITY HOTELS PVT. LTD. V CIT AND OTHERS (2005) 272 ITR 75 DELHI]. IN THE ABOVE LETTER, WHAT CC - 10 REQUIRES IS EXAMINATION, I.E. INVESTIGATION AFTER HE IS SATISFIED WHICH IN MY OPINION IS NOT PERMISSIBLE UNDER THE LAW. SATISFACTION MUST BE REACHED BY THE AO UNDER SECTION 158BD ON THE BASIS OF MATERIALS DISCLOSING UNDISCLOSED INCOME OF THE ASSESSEE (OTHER PERSON) AND HAS TO BE SUITABLY RECORDED SINCE SUCH ACTION IS JUSTIFIAB LE BY COURTS. NO DOUBT THAT SATISFACTION OF THE OFFICER HAS TO BE JUDGED ON THE BASIS OF MATERIAL AVAILABLE WITH HIM, AND EXPRESSION USED BY THE OFFICER AND NOT ON THE WORDS THAT I AM SATISFIED, BUT EVEN SURROUNDING FACTS AND CIRCUMSTANCES OF THE CASE A S DISCUSSED ABOVE AND (HEREINAFTER REFERRED TO AS THE AO) BELOW, IN MY OPINION ARE NOT SUFFICIENT TO HOLD THAT THERE WAS SATISFACTION ON THE PART OF DCIT CC - 10. MOREOVER, AS STATED BY THE APPELLANT, LETTER DATED 31 - 03 - 2004 SPEAKS OF ONLY MR. RAYMOND ELAVI A AND AO HAS BIFURCATED THE INCOME AND MADE ADDITION OF THE AMOUNT OF CASH PAID IN THE CASE OF TWO ASSESSEES . FOR THE ABOVE REASONS AND THE REASONS DISCUSSED HEREINAFTER ON MERITS OF ADDITION I AM OF THE OPINION DCIT CC - 10 HAS NOT RECORDED HIS SATISFACTIO N AS CONTEMPLATED IN THE ACT AND JUDICIAL PRONOUNCEMENTS AND THEREFORE, ASSESSMENT MADE BY AO IN THE CASE OF ASSESSEE IS BAD IN LAW. AS REGARDS MERITS OF ADDITION ON THE BASIS OF LOOSE PAPER AND THE ENTRIES RECORDED THEREIN SAME TOO IN MY OPINION IS NOT JUSTIFIED. THOUGH ON LOOSE PAPER NO. 31. THE WORDS 'MONEY RECEIVED FROM THE SALE OF FLAT' ARE WRITTEN BUT P ARTICULA RS OF FLAT SOLD WHICH HAS BEEN PURCHASED BY THE ASSESSEE ARE NOWHERE MENTIONED ON THE PAPER. APPELLANT ALONG WITH HIS WIFE HAS PURCHASED FLA T NO. 304, 3 RD FLOOT, PLOT NO.666, NEW ORIENT CHS LTD., JEHANGIR ROAD, PARSI COLONY, DADAR, MUMBAI 400 014 FROM MS. PERIN N. SANJANA. HOWEVER, ON THE ABOVE PAPER PARTICULARS OF THE ABOVE FLAT ARE NOT APPEARING. NAME OF THE SELLER OF THE ABOVE FLAT I.E. MS. PE RI N N. SANAJANA ALSO DOES NOT APPEAR ON THE ABOVE PAPER EXCEPT THAT 'PE RI N MASI IS BR INGING THIS ALONG'. THE ABOVE WORDS DO NOT INDICATE THAT MS.PERIN N. SANJANA HAS SOLD THE ABOVE FLAT AND PARTICULARS OF AMOUNTS MENTIONED IN THE ABOVE PAPER RELAT E TO THE SALE OF FL AT PURCHASED BY THE APPELLANT ALONG WITH HIS WIFE. FU RT HER, NAMES OF APPELLANTS AND HIS WIFE ALSO DO NOT APPEAR ON THE ABOVE LOOSE PAPER. THE LOOS E PAPER IS NEITHER SIGN ED BY M. PERI N N. SANJANA NOR BY APPELLANT AND HIS WIFE NOR IS IT IN T HEIR HANDWRITING. FURTHER, THERE IS NO DATE MENTIONED ON THE PAPER. IT IS THEREFORE, DIF F ICULT TO CONCLUDE THAT ENTRIES RECORDED ON THE PAPER REALLY PERTAIN TO THE FLAT PURCHASED BY THE APPELLANT AND HIS WIFE. DCIT CC 10 AND ACIT 6 (3) BOTH HAVE LEAD THE MSELVES INTO BELIEVING THAT ABOVE DOCUMENT PERTAIN TO SALE OF FLAT PURCHASE BY APPELLANT AND THEREFORE CASH PAID OF RS. 21 LACS AND FURTHER AMOUNT OF RS. 45,000/ - MENTIONED AGAINST FU RN ITURE IS THE UNDIS CL OSED INCOME OF THE APPELLANT AND HIS IT(SS) NO.79/M/2008 & IT(SS) NO.78/M/2008 MRS. ARMAITY RAYMOND ELAVIA & SHRI RAYMOND NARIMAN ELAVIA 6 WIFE. I AM AFR AID, CONCLUSION OF BOTH THE OFFICERS IS NOT SUPPORTED BY ANY EVIDENCE EXCEPT THE AFFIDAVIT OF MR. PERCY CHOUD HARY DIRECTOR OF KRPL IN W HOSE CASE SEARCH WAS CO NDUCTED AND FROM WHOS E POSSESSION THE ABOVE PAPER WAS FOUND AND SEIZED. AS ALREADY DISCUSSED EARLI ER IN THIS ORDER, LOOSE PAPER WAS FOUND IN POSSESSION OF KRPL AND THEREFORE ITS DIRECT OR MR. PERCY CHOUDHARY HAS THE L ARGER ONUS TO EXPLAIN WITH E VI D ENC E WHATEVER HE HAS SAID ABOUT ABOVE DOCUMENT. THE RE IS NO EVIDENCE TO PROVE THE FACTS STAT E D BY M R . PERCY CHOUDHARY. THE STATEMENT OF SECRETARY OF THE B U I L DING ALSO DOES NOT SUPPORT THE CASE OF AO AS THE SECRETARY OF THE BUILDING THOUGH HAS STATED THAT THE FLAT WAS SOLD BY PE RI N M. SANJANA TO RAYMOND NARIMAN ELAVIA AND HIS WIFE. HE HAS ALSO STATED THAT FLAT W AS SOLD AT A CONSIDERATION OF RS. 18 LAC. MR. PERCY CHOUDHARY HAS NOT SUPPORTED THE FACT OF HIS STATEMENT THAT SAID PAPER IS IN RELATION TO TRANSACTION OF THE FLAT AND MS. PE RI N N. SANAJANA WOULD HAVE LEFT IT IN HIS OFFICE. THERE IS NO STATEMENT OR AFFIDAV IT OF MS. PE RI N N. SANJANA WHO HAS SOLD THE FLAT TO THE APPELLANT, TO SUPPORT THE VIEW THAT ABOVE LOOSE PAPER AND ENTRIES MADE THEREIN ACTUALLY PERTAIN TO THE FLAT SOLD BY HER TO THE APPELLANT AND HIS WIFE. DCIT CC - 10 AND ACIT 6 (3) ALSO DO NOT APPEAR TO HAVE MADE ANY ATTEMPT TO FIND OUT SOME TRUTH ABOUT ABOVE PAPER FROM PE RI N N. S A NJANA. IF THE ENTIRE DEAL OF SALE OF FIAT WAS DONE BY MS. PERI N N. SANJANA AND HER DAUGHTER MS. SANOBER SANJAN A AS STATED BY MR. PE RI N CHOUDHARY (PAGE 4 OF ASSESSMENT ORDER ) TH EN UNDER WH AT CIRCU M STA N CES THE PAPER REACHED TO THE OFFICE OF KRPL ARE NOT FORTHCOMING. IN VIEW OF ABOVE POSSIBILITY OF THIS PAPER BELONGING TO SOME OTHER TRANSACTIONS OF SALE OF FLAT CANNOT BE RULED OUT. IT IS INTERESTING TO NOTE HERE THAT ALL THE CHARA CTERS INVOLVED IN THE PURCHASE AND SALE OF THE FLAT I.E. APPELLANT AND HIS WIFE WHO HAVE PURCHASED THE FLAT AND MS. PERIN N. SANJANA WHO HAS SOLD THE FLAT EITHER HAVE DENIED HAVING MADE CASH PAYMENT RS. 21 LACS OR ARE NOT AVAILABLE. THE APPELLANT HAS STATE D THAT HE HAS NOT MADE ANY CASH PAYMENT FOR PURCHASE O F FLAT EXCEPT RS. 18 L ACS PAID TH ROUGH CHUE Q UE ( PAGE 7 OF ASSESSMENT O RDER). T HERE IS NO CONFIRMATION FROM MS. PERIN N. SANJANA OF HAVING RECEIVED CASH PAYMENT. EVEN MR. PERCY CHOUDHARY DOES NOT REMEMB ER THE FACTS AND DOES NOT KNOW THE APPELLANT AND HIS WIFE. THE ABOVE LOOSE PAPER HAS BEEN FOUND FROM THE POSSESSION OF SOME THIRD PERSON WHO TOO IS NOT AWARE OF FULL FACTS. FOR THE REASONS DISCUSSED ABOVE, I AM OF THE OPINION THAT AO IS NOT ABLE TO CONCLUS IVELY PROVE THAT APPELLANT AND HIS WIFE HAVE MADE CASH PAYMENT OF RS.2 1 LACS AND FURTHER PAYMENT OF RS.45, 000 FOR FURNIT URE AND THEREFORE NO ADDITION CAN BE MADE ON THIS AMOUNT. IN THIS REGARD, IT IS ALSO MENTIONED THE AO APPEARS TO HAVE OVERLOOKED THE PRO VISIONS OF SECTION 50 C. THOUGH AO HAS REFERRE D TO THE RATES PUBLISHED BY T IMES O F INDIA DAT E MAR CH 9, 2002 TO SUPPORT HIS POINT BUT MERELY ON THE BASIS O F SUCH RATES IT CANNOT BE CONCLUDED THAT APPELLANT HAS MADE CASH PAYMENT OVER AND ABOVE THE CHEQUE PAYM ENT. IF THAT IS SO, THEN A QUESTION MAY ARISE WHETHER IN ALL CASES OF PROPERTY TRANSACTIONS ADDITIONS CAN BE MADE ON THE BASIS OF RATES PUBLI SHED IN THE NEWSPAPER. I AM AFRAID, IT CANNOT BE SO. APPELLANT HAS CONTENDED THAT STAMP DUTY AUTHORITY HAS ACCEPTE D THE FIGURE OF RS. 18 LACS, HENCE SAME SHOULD BE ACCEPTED. I TEND TO ARGUE WITH THE ABOVE CONTENTIONS OF THE APPELLANT. AO HAS NOT BROUGHT ON RECORD ANY OTHER INSTANCE OF SALE OF FLAT IN THAT LOCALITY TO PROVE THE FACT THAT APPELLANT HAS ACTUALLY PURCHASE D THE FLAT FOR RS.39 LACS. WHETHER MS. PERIN N. IT(SS) NO.79/M/2008 & IT(SS) NO.78/M/2008 MRS. ARMAITY RAYMOND ELAVIA & SHRI RAYMOND NARIMAN ELAVIA 7 SA N JANA HAS PAID CAPITAL GAINS TAX ON THE BASIS OF THE SALE PRICE OF R S.39 LACS. IS ALSO NOT PROVED BY THE AO. FOR THE ABOVE REASONS I AM OF THE CONSIDERED VIEW THAT ON THE BASIS OF THE ABOVE DOCUMENT, IT C ANNOT BE HELD THAT APPELLANT AND HIS WIFE HAVE ACTUALLY MADE CASH PAYMENT OF RS. 21 LACS FOR THE PURCHASE OF FLAT AND RS. 45,000/ - FOR FURNITURE AND THEREFORE NO ADDITION CAN BE MADE ON THIS ACCOUNT AND CONSEQUENTLY ADDITION OF RS. 10,72,500/ - MADE BY THE AO IS DELETED. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE ASSESSEE HAS COME IN APPEAL BEFORE US. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. ADMITTEDLY, IN THIS CASE THE AO OF THE SEARCHED PERSON HAD NOT RECORDED ANY SATISFACTION ABOUT ANY UNDISC LOSED INCOME OF THE ASSESSEE WHICH HAD ESCAPED ASSESSMENT. THE AO OF THE SEARCHED PERSON HAD SIMPLY FORWARDED THE DOCUMENTS TO THE AO OF THE ASSESSEE FOR EXAMINATION. THE AO, IN THE ASSESSMENT ORDER, HAS REPRODUCED THE SATISFACTION NOTE WHICH RELATES TO THE ALLEGED SATI SFACTION RECORDED BY THE AO OF THE ASSESSEE AND NOT BY THE AO OF THE SEARCHED PERSON AND HENCE THE NOTICE ISSUED UNDER SECTION 158BD DID NOT FULFILL THE REQUIREMENT OF SAID SECTION AND HENCE I S LIABLE TO BE TREATED AS BAD IN LAW AND CONSEQU ENTLY THE ASSESSMENT PROCEEDINGS UNDER SECTION 158BD ARE THUS LIABLE TO BE HELD AS NULL AND VOID. EVEN ON MERITS, THE LD. CIT(A) HAS GIVEN A REASONED AND CATEGORICAL FINDING THAT THE SEARCHED PERSON WAS IN NO WAY RELATED TO THE ASSESSEE. EVEN THERE WAS N O NAME OF THE ASSESSEE ON THE SEIZED LOOSE PAPER. IT WAS STATED BY MR. PERCY CHOUDHARY, DIRECTOR OF M/S. KRPL, THE SEARCHED PARTY , THAT THE LOOSE PAPER IN QUESTION BELONGED TO ONE MS. PARIN N. SANJANA WHO WAS DISTINCTLY RELATED TO THE ASSESSEE I.E. MATERN AL AUNT OF HIS FATHER WHO WAS CANADIAN CITIZEN. THE PAPER CONTAINED SOME DETAILS ABOUT THE MONEY TO BE TAKEN TO CANADA BY SAID MS. PARIN N. SANJANA. N O PROCEEDING HA VE BEEN INITIATED AGAINST THE SAID LADY MS. PARIN N. SANJANA TO WHOM THE ALLEGED DOCUMENT WAS STATED TO BELONG . NEITHER THE NAME OF THE ASSESSEE HAS BEEN MENTIONED ON THE SAID DOCUMENT NOR THE DESCRIPTION OF THE FLAT IN QUESTION HAS BEEN MENTIONED ON THE SAID IT(SS) NO.79/M/2008 & IT(SS) NO.78/M/2008 MRS. ARMAITY RAYMOND ELAVIA & SHRI RAYMOND NARIMAN ELAVIA 8 DOCUMENT. THE SAID DOCUMENT WAS A DUMB DOCUMENT. EVEN THE CONCERNED PERSON , FROM W HOM THE SAID DOCUMENT WAS RECOVERED , HAD STATED THAT HE WAS NOT AWARE OF THE CORRECTNESS OF THE CONTENTS OF THE DOCUMENT. MERELY BASED ON THE SAID LOOSE PAPER, THE ADDITION IN THE CASE OF THE ASSESSEE WITHOUT ANY CORROBORATIVE EVIDENCE IN THIS RESPECT W AS NOT WARRANTED AND NO EVIDENTIARY VALUE CAN BE ATTACHED TO SUCH A DOCUMENT IN THE ABSENCE OF ANY CIRCUMSTANTIAL OR CORROBORATIVE EVIDENCE. WE , THEREFORE , DO NOT FIND ANY INFIRMITY IN THE WELL REASONED ORDER OF THE LD. CIT(A) IN THIS RESPECT AND ACCORDINGL Y THIS APPEAL OF THE REVENUE IS DISMISSED. IT (SS) A NO.79/M/2008 6. THE ASSESSEE IN THIS CASE IS THE WIFE OF SHRI RAYMOND NARIMAN ELAVIA, WHOSE CASE HAS BEEN DISCUSSED ABOVE . I N THE CASE OF THE ASSESSEE SIMILAR ADDITION OF RS.10,72,500/ - BEING 50% OF THE TOTAL UNDISCLOSED INCOME OF RS.21,45,000/ - HAD BEEN MADE ON THE BASIS OF THE ALLEGED LOOSE PAPER AS DISCUSSED IN IT(SS)A NO.78/M/2008. IN VIEW OF OUR FINDINGS AND REASONING GIVEN ABOVE, THIS APPEAL OF THE REVENUE IS ALSO ACCORDINGLY DISMISSED. 7. IN TH E RESULT, BOTH THE APPEALS OF THE REVENUE ARE HEREBY DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 27.05. 201 5 . SD/ - SD/ - ( B.R. BASKARAN ) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 27.05.2015 . * KISHORE , SR. P.S. IT(SS) NO.79/M/2008 & IT(SS) NO.78/M/2008 MRS. ARMAITY RAYMOND ELAVIA & SHRI RAYMOND NARIMAN ELAVIA 9 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT ( A) CONCERNED, MUMBAI THE DR CONCERNED B ENCH //TRUE COPY// [ BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.