ITO, DUNGARPUR V. Shri Sunil Kumar Gowadia, DUNGARPUR

ITSSA 9/JODH/2012

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 9475 (ITAT-JODHPUR)
• Duration Of Justice: 11 month(s) 23 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 30-08-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 10-07-2013
• Assessment Year: misc
• Appeal Filed On: 06-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DEEPAK SEHGAL
• Keywords: Unexplained investment; Gift; Income from undisclosed sources; Search and seizure; Document seized; Principle of natural justice; Question of law; Procedural lapse; Block assessment; Retraction; Documents seized
• Section: 132; 12

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL: JODHPUR BENCH : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. IT(SS)A NO. 9/JODH/2012 (A.YS. 1997-98 TO 2002-03 AND UPTO 28/05/2002) ITO, DUNGARPUR. VS SHRI SUNIL KUMAR GOWADIA, S/O SHRI DHANRAJ GOWADIA P/O M/S. DHANRAJ JEWELLERS, SADAR BAJAR, SAGWARA, DISTT. DUNGARPUR. PAN NO. AAQPG2517C C.O. NO. 35/JODH/2012 (ARISING OUT OF IT(SS)A NO. 9/JODH/2012) (A.YS. 1997-98 TO 2002-03 AND UPTO 28/05/2002) SHRI SUNIL KUMAR GOWADIA, VS ACIT, CENTRAL CIRCLE -1, C/O. SHRI SHRAWAN KUMAR GUPTA, UDAIPUR. ADVOCATE & TAX CONSULTANT 416, SURYA CHAMBER, RADIO MARKET, NEHRU BAZAR, JAIPUR. PAN NO. AAQPG2517C IT(SS)A NO. 07/JODH/2012 (A.YS. 1997-98 TO 2002-03 UPTO 28/05/2002) SHRI VIRENDRA KUMAR GOWADIA VS DCIT, CENTRAL CIRCLE-1, P/O M/S. DHANRAJ GOWADIA & SONS, UDAIPUR. C/O. SHRI SHRAWAN KUMAR GUPTA, ADVOCATE & TAX CONSULTANT 416, SURYA CHAMBER, RADIO MARKET, NEHRU BAZAR, JAIPUR. PAN NO. AANPG6465E 2 IT(SS)A NO. 08/JODH/2012 (A.YS. 1997-98 T 2002-03 UPTO 28/05/2002) ACIT, CIRCLE-1 VS. SHRI VIRENDRA KUMAR GOWADIA UDAIPUR. S/O SHRI DHANRAJ GOWADIA P/O M/S. DHANRAJ GOWADIA & SONS, SADAR BAZAR, SAGWARA, DUNGARPUR. PAN NO. AANPG6465E IT(SS)A NO. 06/JODH/2012 (A.YS. 1997-98 TO 2002-03 UPTO 28/05/2002) PAWAN KUMAR GOWADIA, VS DCIT, CENTRAL CIRCLE-1, P/O M/S. DHANRAJ GOWADIA & SONS, UDAIPUR. C/O. SHRI SHRAWAN KUMAR GUPTA, ADVOCATE AND TAX CONSULTANTS, 416, SURYA CHAMBER, RADIO MARKET, NEHRU BAZAR, JAIPUR. AAQPG2522B IT(SS)A NO. 05/JODH/2012 (A.YS. 1997-98 TO 2002-03 AND UPTO 28/05/2002) ITO, DUNGARPUR. VS. SHRI PAWAN KUMAR GOWADIA SADAR BAZAR, SAGWARA, DUNGARPUR. PAN NO. AAQPG2522B IT(SS)A NO. 10/JODH/2012 (A.Y. 1997-98 TO 2002-03 AND UPTO 28/05/2002) ITO, VS SHRI AMIT KUMAR GOWADIA DUNGARPUR. S/O SHRI DHANRAJ GOWADIA, P/O M/S. DHANRAJ JEWELLERS, SADAR BAZAR, SAGWARA, DUNGARPUR. PAN NO. AAOPG2518P 3 C.O. NO. 34/JODH/2012 (ARISING OUT OF IT(SS)A NO. 10/JODH/2012) (A.Y. 1997-98 TO 2002-03 AND UPTO 28/05/2002) SHRI AMIT KUMAR GOWADIA VS ACIT, CENTRAL CIRCLE- 1, C/O. SHRI SHRAWAN KUMAR GUPTA UDAIPUR. ADVOCATE & TAX CONSULTANT 416, SURYA CHAMBER, RADIO MARKET, NEHRU BAZAR, JAIPUR. PAN NO. AAOPG2518P (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. SHRAWAN KUMAR GUPTA. DEPARTMENT BY : SH. DEEPAK SEHGAL CIT-DR DATE OF HEARING : 10/07/2013. DATE OF PRONOUNCEMENT : 30/08/2013. O R D E R PER BENCH : ITSSA NO. 09/JU/2012 SHRI SUNIL KUMAR GOWADIA APPEAL BY THE REVENUE AND CROSS OBJECTIONS BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF LD. CIT(A) DATED 16/0 6/2012. 4 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN: 1. DELETING THE ADDITION OF RS. 18,500/- MADE ON ACCOUNT OF UNEXPLAINED CASH. 2. DELETING THE ADDITION OF RS. 6,57,039/- MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN GOLD ORNAMENTS 3. DELETING THE ADDITION OF RS. 40,712/- MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN SILVER ORNAMENTS. 2.1 THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS I N HIS CROSS OBJECTION (C.O.): 1. THAT THE IMPUGNED ASSESSMENT ORDER U/S 158BC(C)/158BB R.W.S.143(3)/254 DATED 30.09.2012 IS BAD IN LAW AND ON FACTS OF THE CASE FOR WANT OF JURISDI CTION AND FOR VARIOUS OTHER REASONS AND HENCE THE SAME; MAY K INDLY BE QUASHED. 2.RS. 16,817/-:THE ID. CIT(A) HAS GROSSLY ERRED IN LAW AS WELL AS ON FACTS OF THE CASE IN SUSTAINING THE ADD ITION OF RS.16,817/- ON ACCOUNT FOUND OF RS. 2,10,317/- (1/4 TH 5 SHARE OF RS. 8,41,270/-) IN COMMON TIJORI ALLEGED BELONGING OF FOUR BROTHERS OUT OF WHICH RS. 1,75,00 0/- HAS BEEN DECLARED BY THE ASSESSEE IN THE BLOCK RETURN A S HIS UNDISCLOSED INCOME, THEREBY THE AO FURTHER MADE THE ADDITION OF RS. 35,317/- AND CIT(A) SUSTAINED THE S AME AT RS.16,817/- IGNORING THAT THE SAME INCOME HAS ALREA DY DECLARED AND TAXED IN THE OTHER FAMILY MEMBERS. HEN CE THE ADDITION SO MADE BY THE AO AND PARTLY CONFIRMED BY CIT(A), BEING CONTRARY TO THE PROVISIONS OF LAW AND FACTS, HENCE THE SAME MAY KINDLY BE DELETED IN FULL . 3. THE ID. CIT(A) HAS GROSSLY ERRED IN LAW AS WEL L AS ON THE FACTS OF THE CASE IN CONSIDERING THE UNEXPLAINE D INVESTMENT IN GOLD JEWELLERY FOUND IN COMMON TIJORI OF ALLEGED OF FOUR BROTHERS INCLUDING THE ASSESSEE ONL Y INSTEAD OF ALL FAMILY MEMBERS. HENCE THE CONSIDERATION SO M ADE BY THE AO AND CONFIRMED BY THE CIT(A), BEING CONTRA RY TO THE PROVISIONS OF LAW AND FACTS, HENCE THE SAME MAY KINDLY BE DELETED IN FULL. HOWEVER, AS PER CALCULATION TH ERE IS NO ADDITION IS REMAINED. 4. RS. 1,15,756/- : THE ID. CIT(A) HAS GROSSLY ER RED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN SUSTAINING THE ADDITION OF RS. 1,15,756/- ON ACCOUNT OF UNEXPLAINE D INVESTMENT IN SILVER JEWELLERY, OUT OF TH E UNEXPLAINED INVESTMENT IN SILVER JEWELLERY RS. 2,31 ,468/- (1/4TH SHARE OF RS. 9,25,873/-) FOUND IN COMMON TIJ ORI OF ALLEGED OF FOUR BROTHERS, OUT OF WHICH RS. 75,000/- HAS 6 ALREADY BEEN DECLARED BY THE ASSESSEE IN THE BLOCK RETURN AS HIS UNDISCLOSED INCOME, THEREBY THE AO FURTHER M ADE THE ADDITION OF RS. 1,56,468/- AND CIT(A) SUSTAINED THE SAME AT RS. 1,15,756/- IGNORING THAT THE SAME OR PA RT INCOME HAS ALREADY DECLARED AND TAXED IN THE OTHER FAMILY MEMBERS. HENCE THE ADDITION SO MADE BY THE AO AND P ARTLY CONFIRMED BY THE CIT(A), BEING CONTRARY TO THE PROV ISIONS OF LAW AND FACTS, HENCE THE SAME MAY KINDLY BE DELE TED IN FULL. 5. THE ID. CIT(A) HAS FURTHER ERRED IN SUSTAINING A LL ABOVE ADDITIONS AND CONFIRMING THE ACTION OF THE AO IN TA XING THE SAME INCOME TWICE ONE IN THE HANDS OF THE ASSESSEE AND SECOND IN THE HANDS OF THE OTHER FAMILY MEMBERS, WH EN THE TOTAL UNDISCLOSED INCOME DECLARED BY THE WHOLE GROUP OR FAMILY MEMBERS WERE MORE THAN THE UNDISCLOSED IN COME FOUND DURING THE COURSE OF SEARCH, BEING THE COMMON SEARCH OPERATION. 6. THE ID. AO HAS GROSSLY ERRED IN LAW AS WELL AS O N THE FACTS OF THE CASE IN CHARGING INTEREST U/S 158BFA(1 ). THE APPELLANT TOTALLY DENIES IT LIABILITY OF CHARGING O F ANY SUCH INTEREST. THE INTEREST, SO CHARGED, BEING CONTRARY TO THE PROVISIONS OF LAW AND FACTS, MAY KINDLY BE DELETED IN FULL. 2.2 WE HAVE HEARD RIVAL SUBMISSIONS AND HAVE CAREFU LLY PERUSED THE ENTIRE RECORD. THE FACTS OF THE CASE ARE THAT A SEA RCH AND SEIZURE OPERATION U/S 132 OF THE I.T. ACT, 1961(THE ACT F OR SHORT) WAS 7 CONDUCTED IN THE GOWADIA GROUP INCLUDING AT THE RES IDENTIAL PREMISES OF SHRI SUNIL KUMAR GOWADIA S/O SHRI DHANRAJ GOWADI A WHERE HIS FATHER SHRI DHANRAJ GOWADIA, HIS BROTHERS SHRI VIRENDER GO WADIA, SHRI AMIT GOWADIA, SHRI PAWAN KUMAR GOWADIA AND SHRI NARENDRA KUMAR GOWADIA WERE ALSO RESIDING. DURING THIS SEARCH CASH , VALUABLES AND INCRIMINATING DOCUMENTS WERE FOUND WHICH WERE SEIZE D. THE DETAIL OF GOLD / SILVER ORNAMENTS AND CASH FOUND DURING THIS SEARCH ARE GIVEN AT PAGE 34 OF ANNEXURE OF THE ASSESSMENT ORDER. 2.3 AGAINST VARIOUS ADDITIONS MADE IN THE BLOCK ASS ESSMENT ORDER DATED 20/05/2004 THE ASSESSEE PREFERRED APPEAL AND LD. CIT(A) VIDE HIS ORDER DATED 18/10/2005 ALLOWED ASSESSEES APPEAL AN D DELETED ALL THE ADDITIONS. THE REVENUE FILED APPEAL BEFORE THE APPE LLATE TRIBUNAL WHO VIDE ITS ORDER DATED 02/03/2010 SET ASIDE THE ISSUE S REGARDING UNEXPLAINED CASH, UNEXPLAINED INVESTMENTS IN GOLD / SILVER ORNAMENTS PERTAINING TO A.Y. 2003-04. THE A.O. HAD MADE THE S ET ASIDE BLOCK ASSESSMENT ORDER IN RESPECT OF THE ABOVE 3 ITEMS, T HE A.O. HAS TREATED THE SAME AS UNDISCLOSED INCOME OF THIS ASSESSEE. TH E DETAIL OF POSITION OF CASH, GOLD AND SILVER TO BE CONSIDERED IN SET AS IDE PROCEEDINGS IS GIVEN AT PAGE 33 OF THE ANNEXURE TO ASSESSMENT ORDE R. 8 2.4 IN THE SECOND ROUND, THE LD. CIT(A) HAS GIVEN A PART RELIEF, AGAINST WHICH BOTH PARTIES ARE NOW IN APPEAL. 2.5 WE HAVE HEARD RIVAL SUBMISSIONS. WE HAVE ALSO G ONE THROUGH THE AVAILABLE RECORD. 2.6 GROUND NO. 1 OF REVENUES APPEAL AND GROUND NO. 2 OF THE CROSS OBJECTION ARE IN RELATION OF ONE ISSUE I.E., ADDITI ON ON ACCOUNT OF CASH FOUND DURING THE COURSE OF SEARCH. DURING SEARCH A SUM OF RS. 5,400/- WAS FOUND FROM THE RESIDENCE (COMMON) AND RS. 8,41, 270/- FROM THE TIJORI (COMMON) BELONGING TO FOUR BROTHERS NAMELY S HRI PAWAN, VIRENDER, AMIT AND SUNIL. THE FOLLOWING SUBMISSIONS HAS BEEN MADE, IN WRITING BY THE LD. A.R. SHRI GUPTA :- 1. AT THE VERY OUTSET IT IS SUBMITTED THAT THE LD. AO HAS NOT FOLLOWED THE DIRECTION OF THE HONBLE ITAT AND REPE ATED THE ADDITION WITHOUT UNDERSTANDING THE FACTS AND CIRCUM STANCE OF THE CASE. AS THE HONBLE ITAT OBSERVED AND DIRECTED AS UNDER. THE AO HIMSELF HAS TREATED THE CASH FOUND IN TIJOR I AS BELONGING TO FOUR PERSONS EQUALLY, AS THE TIJORI WAS A COMMON TIJORI OF FOUR PERSONS, NAMELY SH. AMIT KUMAR, SH. VIRENDRA KUMAR, SH. SUNIL KUMAR, SH. PAWAN KUMAR. THE GOVADI A GROUP MEMBERS, HOWEVER GAVE A REASONABLE EXPLANATIO N THAT 9 THE CASH OF THE FIRM AND CASH BELONGING TO VARIOUS FAMILY MEMBERS WAS ALSO KEPT IN COMMON TIJORI AT THE RESID ENCE FOR SAFE CUSTODY AND CONVENIENCE. THE SEARCH WARRANT IN JOINT NAMES, PANCHNAMAS WERE ALSO DRAWN IN JOINT NAMES(CP B74- 99) AND NO DAY TO DAY ACCOUNTS OF CASH HANDLING WAS FOUND MAINTAINED. ESSENTIALLY, THEREFORE THE UNEXPLAINED AMOUNT TO THE EXTENT OF RS.8,16,000/- FORMING PART OF THE TOT AL CASH FOUND FROM THE PARTNERSHIP FIRM AND FAMILY MEMBERS INCLUDING CASH FOUND IN TIJORI AGGREGATING TO RS.11 ,86,161/- OUGHT TO HAVE BEEN ACCEPTED BY THE ASSESSING OFFICE R AS UNDISCLOSED INCOME PLACED ON THE RECORD PARTICULARL Y WHEN THE DEPARTMENT FOUND NO ADVERSE MATERIAL OR DOCUMEN TARY EVIDENCE SUGGESTING INCOME EARNED BY ANY OF AFORESA ID EIGHT PERSONS MORE THAN THAT HAS BEEN DECLARED BY THEM A S THEIR UNDISCLOSED INCOME ON ACCOUNT OF CASH FORMING PART OF THE TOTAL UNDISCLOSED INCOME. THROUGH ANNEXURE-6(CPB21 -23). THE AO TO CONSIDER THE EXPLANATION OF THE ASSESSEE IN RIGHT PERSPECTIVE AND IF NEED BE, TAKE MATERIAL AS MAY BE ADDUCED ON RECORD BY THE ASSESSEE AND EXAMINE THE CLAIM ON MER ITS AND IN ACCORDANCE WITH LAW. HE SHALL ALSO ALLOW CREDIT OF REASONABLE SAVINGS INCLUDING PIN MONEY OF VARIOUS FAMILY MEMBE RS AND STRIDHAN WITH THE LADIES OF THE FAMILY ETC. WHILE A DJUDICATING THE ISSUE IN REMAND PROCEEDINGS . HE SHALL ALSO ENSURE THAT THE CASH AVAILABLE WITH PARTNERSHIP FIRM AS PER THEIR B OOKS OF ACCOUNT AND WITH VARIOUS OTHER FAMILY MEMBERS THAT IS BEING CLAIMED FORMING PART OF THE AFORESAID AMOUNT OF RS. 3,70,161/- IS NOT CLAIMED TO HAVE BEEN UTILIZED FOR EXPLAININ G THE FORMATION OF OTHER ASSETS FOUND AS A RESULT OF SEA RCH OR 10 OTHERWISE. THE AO SHALL ALSO ENSURE THAT THE PART OF THE UNDISCLOSED INCOME OF RS. 8,16,000/- FALLEN TO THE SHARE OF THE ASSESSEE DECLARED IN THE RETURN OF UNDISCLOSED INCOME, IS NOT BROUGHT TO TAX AGAIN ON ACCOUNT OF UNEXPLAINED CASH TO THAT EXTENT. AND ON PERUSAL OF THE ORDER OF THE AO IT IS VERY CL EAR THAT HE HAS NOT FOLLOWED THE SAME IN TRUE PERSPECTIVE. AND REPE ATED THE ADDITIONS IGNORING THE ABOVE OBSERVATIONS OF THE HO NBLE ITAT AND FILED BY THE ASSESSEE. AND THE LD CIT(A) HAS AL SO PARTLY ACCEPTED THE SAME IGNORING THE TRUE AND GENERAL APP ROACH. 2. THE CASH FOUND AT SHOP AND AT THE RESIDENCE OF PAR TNERS OF FIRM WERE CONSIDERED COMMONLY FOR EXPLANATIONS OF A VAILABILITY OF DECLARED CASH DUE TO THE REASON THAT MANY TIMES CASH OF SHOPS WERE KEPT AT RESIDENCE FOR SECURITY PURPOSES. FURTH ER IT WAS CONVENIENT TO EXPLAIN COMMONLY BECAUSE THE DEPARTME NT TOO HAD INVENTORIED COLLECTIVELY AND SEIZED ALL THE CAS H AT RESIDENCE THROUGH COMMON PANCHNAMA ALSO. THE SAME OBSERVATION S HAS ALSO BEEN GIVEN BY THE HONBLE ITAT. THE EXPLANATION OF CASH IN THE HAND OF INDIVIDUAL P ARTNER BECOMES IMPOSSIBLE DUE TO WRONG PROCEDURE ADOPTED A T THE TIME OF SEARCH AND SEIZERS PROCEEDINGS BY THE SEARCH PAR TY. COMMON WARRANTS WERE THERE, COMMON PANCHNAMA HAS BEEN PREP ARED AGAINST THE CASH OF DIFFERENT INDIVIDUALS, WHICH IN CLUDES CASH OF LADIES OF THE FAMILY ALSO. EVEN THE CASH BELONGING TO DIFFERENT 11 LADIES BEING THEIR STRI-DHAN WERE NOT SEPARATELY IN VENTORIED. THE SAME WERE GOT SEIZED WITHOUT ANY AUTHORITY OR S EARCH WARRANT AGAINST THEM. IN ORDER TO MEET OUT ALL THESE DISCREPANCIES COMMIT TED AT THE TIME OF SEARCH AGAINST ALL SUCH SEARCH WARRANTS OF SEVEN PREMISES, THE ASSESSEE WAS NOT IN A POSITION TO EXP LAIN THE AVAILABILITY OF THE CASH IN CASE OF EACH ASSESSEE S O COMMON EXPLANATION FOR WHOLE GOWADIA GROUP WAS FURNISHED A ND A COMMON LIST OF EXPLAINED CASH WAS ALSO FURNISHED. 3. THE TOTAL UNDISCLOSED CASH TO BE CONSIDERED IN SET ASIDE PROCEEDINGS IS RS.10,38,582/- ONLY. BECAUSE DURING THE COURSE OF SEARCH TOTAL CASH OF RS. 13,61,281/- WAS FOUND OUT OF WHICH AS CASH AMOUNTING TO RS. 3,22,699/- ALREADY CONSIDERED SEPARATELY IN THE THREE FIRMS NAMELY M/S GOWADIA JEWELLERS (RS .78,175/-), M/S DHANRAJ JEWELLERES(RS.71,230/-), M/S DHANRAJ GO WADIA & SONS(RS.1,73,294/-) AND ARE NOT SUBJECT MATTER OF S ET ASIDE PROCEEDINGS IN THE CASE OF INDIVIDUAL ASSESSEE. OUT OF ABOVE RS.10,38,582/- CASH AMOUNTING TO RS. 2,37,682/- IS CLAIMED AS EXPLAINED AND DISCLOSED AS PER SEPARATE CHART ATTAC HED(CPB 8,21- 23). DETAILED EXPLANATIONS FOR THE SAME WERE AVAILA BLE ON THE RECORDS. THE BALANCE RS. 8,00,900/- REMAINS UNEXPLA INED. AGAINST THIS THE PARTNERS HAVE ALREADY CONSIDERED R S.8,16,000/- AND OFFERED FOR TAXATION IN RETURN FILED U/S158BC. THE AO HAD MADE THE TOTAL ADDITION OF RS. 2,10,317/- OUT WHICH THE ASSESSEE HAS ALREADY DECLARED AS UNDISCLOSED INCOME OF RS. 1 ,75,000/- AND THE BALANCE ADDITION IS REMAINED ONLY OF RS. 35,317 /- WHICH IS 12 CONSIDERED AND EXPLAINED IN THE HAND OF VARIOUS FAM ILY MEMBERS WHICH IS ACCEPTABLE. HENCE NOW NO ADDITION IS REMAI NED STILL MAKING THE ADDITION BY THE AO AND PARTLY SUSTAINED BY THE CIT(A) AND SEPARATE CONSIDERATION IS DOUBLE TAXATION ON TH IS ACCOUNT, WHICH IS ILLEGAL AND BAD IN LAW. IT MEANS THE ASSES SEE WITH THE GROUP HAS OFFERED FOR TAXATION MORE THAN THE UNDISC LOSED CASH FOUND, WHICH HAS NOT BEEN CONSIDERED BY THE AO AS W ELL AS CIT(A) AND IGNORED ALL TOGETHER. 4. FURTHER AS THE HONBLE ITAT HAS DIRECTED THAT THE AO SHALL ALSO ALLOW CREDIT OF REASONABLE SAVINGS INCLUDING PIN MONEY OF VARIOUS FAMILY MEMBERS AND STRIDHAN WITH THE LAD IES OF THE FAMILY ETC. AND IT IS VERY GENERAL THAT THE LADIES MEMBERS HAD RECEIVED CASH GIFTS ON VARIOUS SOCIAL CEREMONIES LI KE ON RAKSHA BANDHAN, BHAIDOOJ, BIRTHDAY, AND MARRIAGE ANNIVERSA RY ETC. SINCE BIRTH. ALL THE MEMBERS USUALLY KEPT ABOUT RS. 5,000/- OR MORE IN CASH WITH THEM FOR THEIR PERSONAL OUT OF PO CKET EXPENSES PURPOSES FROM THEIR DECLARED SOURCES. THE CLAIM OF EXPLAINED CASH IS VERY REASONABLE CONSIDERING THE M EMBERS OF FAMILY AND THERE PAST SAVINGS FROM DRAWINGS, GIFTS, SOCIAL CEREMONIES ETC. THE CLAIM IS VERY MEAGER ALSO. HENC E ACCORDING TO US, SUCH MEAGER AMOUNT OF DECLARED CASH CLAIMED BY THE ASSESSEE AND BY THE GOWADIA GROUP IS FULLY ACCEPTAB LE AS AVAILABLE FROM THE DECLARED SOURCES. AND LOOKING TO THE STATUS OF THE FAMILY IT IS NOT MUCH. IT IS NOT POSSIBLE AND A CCEPTABLE THAT NO ONE PERSON IS HAVING ANY SAVINGS, STRIDHAN, PIN OR POCKET MONEY ETC. AND THE AO DID NOT GIVE THE CREDIT OF T HE SAME. BY STATING THAT THE ASSESSEE HAS NOT FURNISHED THE EVI DENCE OF THE 13 SAVING OF FAMILY MEMBER. HERE WE WOULD LIKE TO SUBM IT THAT WHILE DOING A JUDICIOUS ACT BY A PERSON (HERE THE A O) SHOULD ALSO KEEP IN MIND THE CIRCUMSTANCE, FACTS, GENERAL APPRO ACH, STATUS ETC. HE SHOULD NOT RESTRICT TO HIMSELF ONLY TO THE EVIDENCE WHERE THE SAME IS NOT POSSIBLE. HERE THE AO RESTRICTED TO HIMSELF ONLY EVIDENCE AND IGNORED THE CIRCUMSTANCE, FACTS, GENER AL APPROACH, STATUS ETC. KINDLY REFER THE DECISION OF MANGE RAM MITTAL V/S ACIT 105 TTJ 594(DEL)(SB) HENCE WE PRAY YOUR HONOUR TO CONSIDER OUR CONTENTION IN THE INTEREST OF NATURAL JUSTICE AND DELETE ENTIRE ADDITION. POSITION OF AVAILABILITY OF EXPLAINED CASH VIZ A VI Z POSITION OF CASH FOUND DURING SEARCH PROCEEDINGS IS ANNEXED(CPB 8,21-23) IN FRESH CHART FILED IN SET ASIDE PROCEEDING IS ATTACH ED HEREWITH. 5. IN ADDITION TO THE ABOVE WE HAD FILED A CHART SHOW ING THE ASSETS COVERED IN THE UNDISCLOSED INCOME BY THE ASS ESSEE AT THE TIME OF FILING OF RETURN FOR BLOCK ASSESSMENT. A CH ART FOR WHOLE GROUP IS ALSO ENCLOSED HEREWITH FOR YOUR READY REFE RENCE (PB 64,180). THE ORIGINAL CHARTS ATTACHED ALONGWITH THE ORIGINA L REPLY WERE ALSO SELF EXPLANATORY IN THIS RESPECT. THE OVERALL DECLARATION OF THE GROUP SHALL BE CONSIDERED IN ITS TRUE PERSPECTI VE. OUT OF TOTAL CASH OF RS.11,86,161/- FOUND AS PER ANNEXURE WITH ALL PANCHNAMAS THE GROUP HAS DECLARED RS.8,16,000/- AS UNDISCLOSED AND OFFERED FOR TAXATION IN THE HANDS OF SIX PERSON S AS REFLECTED IN THE CHART CONTAINING DETAILS OF ASSETS COVERED I N DISCLOSURE OF 14 UNDISCLOSED INCOME IN RETURN FILED IN RESPONSE TO N OTICE U/S 158BC BY 12 PERSONS. THE BALANCE AMOUNT OF RS.3,70, 161/- WAS EXPLAINED AS DECLARED CASH OF THREE PARTNERSHIP FIR M AS PER BOOKS AND ABOUT 37 INDIVIDUAL FAMILY MEMBERS AS PAS T SAVINGS FROM WITHDRAWALS AND GIFTS ETC(PB 55,169 & CPB 8,21 -23) THE HONBLE ITAT HAS DIRECTED TO AO TO ENSURE THAT THE PART OF THE UNDISCLOSED INCOME OF RS 816000/- FALLEN TO THE SHARE OF THE ASSESSEE DECLARED IN THE RETURN OF UNDISCLOS ED INCOME, IS NOT BROUGHT TO TAX AGAIN ON ACCOUNT OF UNEXPLAIN ED CASH TO THAT EXTENT. 6.1 IN THE CASE OF SAT PAL PANDIT & CO. V/S ACIT 61 TTJ(ASR) 602 IT HAS BEEN HELD THAT AMOUNT ALREADY BEEN TAXED IN THE HANDS OF ANOTHER PERSON ON SUBSTANTIVE BASIS, CANNO T BE ASSESSED IN THE HANDS OF THE ASSESSEE AGAIN, PARTICULARLY WH EN AO HAS NOT CONCLUSIVELY PROVED THAT THE TRANSACTION WAS BENAMI ON BEHALF OF THE ASSESSEE. HERE IS THE SAME POSITION. ALSO R EFER CIT V/S TRUSTEES OF MISS GARGIBEN & ORS. 130 ITR 479(BOM)., ITO V/S VINOD KUMAR SONI 258 ITR 717(DEL)., CIT V/S MRS. BA NNO E. COWASJI 147 ITR 744(MP). 6.2 IN MEHMOOD PASHA V/S DCIT (INV.) 44 DTR 55(KAR) IT HAS BEEN HELD THAT TRIBUNAL HAS NOT TAKEN IN TO CONSIDERATION THE EVIDENCE PRODUCED BY THE ASSESSEE IN THE FORM OF AS SESSMENT ORDER OF THE ASSESSEES BROTHER. THE ORDER IS MADE U/S 158BD, WHEREIN A SUM OF RS. 2,75,000/- IS SHOWN AS THE UND ISCLOSED INCOME OF THE ASSESSEES BROTHER AND ACCORDINGLY AN ADDITION 15 WOULD HAVE BEEN MADE IN THE SAID ASSESSMENT ORDER. THE TRIBUNAL OUGHT TO HAVE TAKEN THIS ASPECT IN TO CONS IDERATION AND THE FACT THAT THE SAID AMOUNT WAS OFFERED FOR TAX A ND ACCORDINGLY OUGHT TO HAVE DELETED THE ADDITIONS MAD E TO THE INCOME OF THE ASSESSEE. SINCE THE TRIBUNAL HAS NOT TAKEN THE MATERIAL EVIDENCE WHICH HAS BEEN PRODUCED BY THE AS SESSEE AND ALSO HAS NOT APPLIED ITS MIND TO THE FACTS AS TO WH ETHER THE ADDITION IF SO MADE IN THE CASE OF THE ASSESSEE, IT WOULD AMOUNT TO DOUBLE TAXATION. HERE IS THE SAME POSITION THE AO HAS NOT TAKEN IN TO CONSIDERATION THAT OTHER FAMILY MEMBER HAS ALREADY BEEN OFFERED THE UNDISCLOSED INCOME. 7.1 IN THE CASE OF M. NARAYAN & BROS. V/S ACIT 243 CTR 588(MAD). IT HAS BEEN HELD THAT ADDITION ON THE BASIS OF STATEMENT RECORDED DURING THE SEARCH ASSESSEE OFFE RED RS. 3LAKHS AS UNACCOUNTED INCOME ON THE FIRST DAY OF SE ARCH AT HIS PREMISES AND ANOTHER SUM OF RS. 4 LAKHS ON THE SECO ND DAY OF THE SEARCH- HOWEVER IN THE COURSE OF ASSESSMENT PRO CEEDINGS, ASSESSEE RETRACTED THE STATEMENT MADE ON THE SECOND DAY OFFERING THE ADDITIONAL INCOME OF RS. 4 LAKHS AO REJECTED THE SAID PLEA AND MADE ASSESSMENT ON THE BASIS OF BOTH THE CONFESSIONAL STATEMENTS GIVEN BY THE ASSESSEE- NOT JUSTIFIED THOUGH THE STATEMENT RENDERED AT THE TIME OF SEARCH MAY BE USED IN EVIDENCE IN ANY PROCEEDINGS THAT BY ITSELF CANNOT BECOME THE SOLE MATERIAL TO REST THE STATEMENT, MORE SO WH EN THE ASSESSEE SEEKS TO WITHDRAW THE SAME BY PRODUCING MA TERIAL EVIDENCE IN SUPPORT OF SUCH RETRACTION- IT IS ALWAY S OPEN TO THE PERSON WHO MADE THE ADMISSION TO SHOW THAT THE STAT EMENT TO 16 OFFER INCOME IS INCORRECT ASSESSEE HAS EXPLAINED T HAT THE AMOUNT OFFERED ON THE SECOND DAY OF THE SEARCH WAS LOAN TAKEN BY HIM FROM RELATIONS WHO WERE ALREADY ASSESSED TO ON THE SAID AMOUNT- THUS ONCE THE ASSESSEE HAD EXPLAINED HIS ST ATEMENT AS INCORRECT IN THE CONTEXT OF THE MATERIAL PRODUCED B Y HIM, THE TRIBUNAL WAS NOT JUSTIFIED IN ITS CONCLUSION THAT T HE STATEMENT MADE BY THE ASSESSEE CLOTHED THE ASSESSMENT WITH LE GALITY- THAT APART, THE CASE OF THE ASSESSEE ALSO STANDS SU PPORTED BY CIRCULAR NO. F-NO. 286/2/2003-IT(INV.), DT. 10 TH MARCH, 2003, WHEREIN THE CBDT HAS GIVEN CATEGORICAL DIRECTIONS T O THE DEPARTMENTAL OFFICERS THAT UNDUE EMPHASIS SHOULD NO T BE PLACED ON RECORDED STATEMENTS-THEREFORE, CIT(A) WAS JUSTIF IED IN ACCEPTING THE ASSESSEES CASE AND DELETING THE ADDI TION OF RS. 4 LAKHS. HERE IS THE SAME POSITION IN THIS CASE ALS O AS THE AO MADE THE ADDITION ON THE BASIS OF STATEMENT ON THE DAY OF SEARCH DT. 28.05.2002 AND OFFERING LETTER ON THE SE COND DAY OF SEARCH DT. 29.05.2002. HERE ALSO ASSESSEE EXPLAINED THE UNDISCLOSED INCOME AND OFFERED FOR TAX IN THE HAND OF THE FAMILY MEMBERS. 7.2 IN THE CASE DCIT V/S PRAMUKH BUILDERS 115 TTJ (AHD) 330 IT HAS BEEN HELD THAT ADDITION ON THE BASIS OF STA TEMENT U/S 132(4)- THERE BEING NO SPECTRA OF EVIDENCE REGARDIN G UNDISCLOSED INCOME, ADDITION MADE ONLY ON THE BASIS OF STATEMEN T OF MANAGING PARTNER OF THE ASSESSEE U/S 132(4), GIVEN IN A STATE OF CONFUSION AND LATER RETRACTED, COULD NOT BE SUSTAIN ED EITHER IN PART OR AS A WHOLE- THERE MAY NOT BE ANY DURESS ALS O, BUT EXISTENCE OF CONFUSION CANNOT BE RULED OUT AND THE REVISION OF 17 THE EARLIER STATEMENT DOES NOT REFLECT APPLICATION OF MIND BUT A STATE OF COMPOUNDED CONFUSION ONLY. 7.3 IN ACIT V/S DR. RAJ. DHARIWAL 63 DTR 113(JD)(TRB.) HELD THAT STATEMENT MADE BY THE ASSESSEE U/S 132(4) SURR ENDERING THE IMPUGNED AMOUNT COULD NOT HAVE BEEN TAKEN AS BA SIS FOR MAKING ADDITION TOWARDS UNEXPLAINED INVESTMENT IN P LOTS BY THE ASSESSEE PARTICULARLY WHEN NO EVIDENCE OF UNDISCLOS ED PAYMENT HAS BEEN FOUND AT THE TIME OF SEARCH. THE SAID CASE AFFIRMED BY THE HONBLE RAJ. HIGH COURT KINDLY REFER CIT V/S DR. RAJ. DHARIWAL 63 DTR 83(RAJ.) WE LIKE TO SUBMIT THAT THE ISSUE SHALL BE CONSIDER ED AFTER VERIFYING THE FACT THAT THE SET ASIDE PROCEEDINGS A RE AGAINST 10 ASSESSEES BELONGING TO THE GROUP OUT OF 12 ORIGINA L ASSESSMENT U/S 153A. THE PORTION OF CASH ALREADY CONSIDERED IN THE HANDS OF TWO PARTNERSHIP FIRMS I.E. M/S DHANRAJ JEWELLERS & M/S GOWADIA JEWELLERS SHALL BE EXCLUDED IN THE OVERALL CONSIDER ATION FOR THIS 10 CASES. 8. FURTHER ON PERUSAL OF THE STATEMENTS OF SOME OF TH E FAMILY MEMBERS OF THE ASSESSEE IT IS VERY CLEAR THAT THEY WERE HAVING SAVINGS, GIFT MONEY, STRIDHAN ETC. ON SOCIAL OCCAS ION. SH. SUNIL GOVADIA IN ANS TO Q. 16 (CPB 30)STATED HE IS HAVING RS. 4-5 THOUSAND WHICH IS LAYING WITH HIS WIFE. 18 SH. AMIT GOVADIA IN ANS TO Q. 15(CPB 36) STATED THAT HIS NEW BORN CHILD HAS RECEIVED CASH GIFTS OF RS. 10,000/- WHO IS ONLY 15 DAY. SMT. SHIVANI W/O. AMIT GOVADIA IN ANS TO Q. 11(CPB 47) STATED THAT SHE AND HER NEW BORN CHILD HAD RECEIVED CASH G IFTS OF RS. 15,000/- TO 20,000/- WHO IS ONLY 15 DAY. IN ANS TO Q. NO. 7(CPB47) SHE STATED THAT SHE EARNED RS. 4-5 THOUSAN D PM FROM THE SOFT TOYS AND MEHANDI. SMT. KAJAL W/O. SUNIL GOVADIA IN ANS. TO Q. NO. 5 SHE STATED THAT SHE EARNED ABOUT RS.5 THOUSAND PM (CPB48)FROM THE STITCHING SOFT TOYS AND MEHANDI. SH. DHANRAJ GOVADIA IN ANS TO Q. NO. 6 (CPB 56)HE STATED THAT HE IS HAVING CASH OF RS. 60 TO 70 THOUSAND, IN ANS TO Q. NO. (CPB 56) HE STATED THAT THE SAME BELONGS TO HIS DAUGHTE R IN LAW IN ANS TO Q. NO. 8 HE STATED THAT IT IS HER PAG LAGAI CEREMONY OF MARRIAGE THE MARRIAGE IS ON 16 JUNE. SH. NARENDRA GOVADIA IN ANS TO Q. 6 (CPB 58)STATED HE IS HAVING RS. 4-5 THOUSAND. SH. ASHOK KUMAR GOWADIA IN ANS TO Q NO. 9 STATED THAT RS. 10 OR 12 THOUSAND RECEIVED AS GIFT ON THE ENGAGEMENT O F DAUGHTER AND REST(OUT OFF RS. 28601/-) IS SAVING WHICH SURRE NDER FOR TAX. ALL THESE EVIDENCE SHOWS THAT THERE WERE SAVINGS, G IFT, POCKET MONEY ETC. 19 9.1 IN THE CASE OF CIT V/S SMT. REKHA BAI 289 ITR 351(MAD) IT HAS BEEN HELD THAT ASSESSEE, HER HUSBAND AND HIS H UF HAVING BEEN ASSESSED TO TAX IN THE PAST AND ASSESSEES SON HAVING ALSO FILED HIS RETURN, TRIBUNAL WAS JUSTIFIED IN HOLDING THAT THE UNDISCLOSED INCOME DISCOVERED DURING THE SEARCH BEL ONGED TO THE ASSESSEE HER HUSBAND, HIS HUF AND HER SON AND DIVID ED BETWEEN THEM. 9.2 ALSO REFER JAI KUMAR JAIN V/S ACIT 99 TTJ 744(JP), WHEREIN HELD THAT CASH OF RS. 26,910/- FOUND AT THE ASSESSEES PREMISES IS COVERED BY THE CASH FLOW STATEMENT OF F AMILY, DEFICIT OF ACTUAL CASH EXPLAINS THE WITHDRAWALS FOR HOUSE H OLD PURPOSE. AMOUNT OF RS. 16,660/- IN THE ROOM OF CHILDREN IS A CCEPTED AS PETTY SAVINGS OUT OF GIFTS. 10. HENCE IN VIEW OF THE ABOVE SUBMISSIONS THE ADDITIO N SO MADE BY THE AO AND PARTLY SUSTAINED BY THE CIT(A) MAY K INDLY BE DELETED IN FULL. 2.7 THE LD. (DR) HAS RELIED ON THE ORDERS OF THE AU THORITIES BELOW. 2.8 AFTER CONSIDERING RIVAL SUBMISSIONS, WE ARE OF THE CONSIDERED OPINION THAT THE POSITION OF AVAILABILIT Y OF CASH VIS-- VIS THE CASH FOUND DURING SEARCH. A CHART OF THE WH OLE GROUP IS ENCLOSED AT PAGES 64, 180 OF PB'. 20 THUS, OUT OF THE TOTAL CASH OF RS. 11,86,161/- FOUN D PERTAINING TO THE ENTIRE GROUP, THIS GROUP HAS DECLARED A SUM OF RS. 8,16,000/- AS UNDISCLOSED INCOME AND HAVE OFFERED FOR TAXATION IN THE HANDS OF SIX PERSONS AS REFLECTED IN THE ABOVE CHART CONTAINING DETAILS OF ASSETS COVERED IN DISCLOSURE OF UNDISCLOSED INCOME IN RETU RNS FILED IN RESPONSE TO NOTICES ISSUED U/S 158BC BY 12 PERSONS. THE BALA NCE AMOUNT OF RS. 3,70,161/- HAS BEEN DECLARED AND UNEXPLAINED TO BE AVAILABLE WITH PARTNERSHIP FIRM AS PER BOOKS AND AS PAST SAVINGS O F 37 INDIVIDUALS OF THE MEMBERS OF THE GROUP AND ALSO FROM WITHDRAWALS AND GIFTS ETC. THUS, KEEPING IN VIEW THE FINDING IN THE FIRST ROUN D AND THE PRESENT EXPLANATION WE ARE OF THE CONSIDERED OPINION THAT N O FURTHER ADDITION ON ACCOUNT OF CASH FOUND IS JUSTIFIED AS ADDITION I N THE HANDS OF THIS ASSESSEE AND IN HANDS OF OTHER ASSESSEES OF THIS GR OUP. ACCORDINGLY, WE ALLOW GROUND NO. (2) OF CROSS OBJECTION AND DISMISS GROUND NO. (1) OF REVENUES APPEAL. 3. GROUND NO. 2 AND 3 OF REVENUES APPEAL AND GROUN D NOS. 3 & 4 OF CROSS OBJECTIONS, CAN BE DECIDED SIMULTANEOUSLY. TH E FACTS OF THESE ISSUES ARE THAT IN THE ORIGINAL ASSESSMENT ORDER TH E AO NOTED THAT DURING THE COURSE OF SEARCH ACTION ON 28.05.2002 AT THE ASSESSEE GROUP THE GOLD WEIGHING 14858.360 GMS AND SILVER WEIGHING 181.921 KG ALSO FOUND IN THE COMMON TIJORI AT RESIDENCE CLAIMED TO BE BELONGING TO 21 FOUR BROTHERS I.E SH. PAWAN KUMAR GOWADIA(IND.), SH . VIRENDRA KUMAR (HUF), SH. SUNIL KUMAR (HUF)AND AMIT KUMAR GOWADIA( HUF), AS ADMITTED BY THE STATEMENT OF SH. SUNIL KUMAR & AMIT KUMAR. IN STATEMENT OF SH. SUNIL KUMAR IN ANS TO Q NO.13, IT WAS STATED THAT AS PER MY KNOWLEDGE THE GOLD OF 5-6 KG, SILVER OF 100K G AND CASH ABOUT RS. 1.5 TO RS. 2 LAC IS KEPT IN THIS HOUSE, WHICH I S KEPT IN THE TIJORI SITUATED IN THE SECOND ROOM OF THIS HOUSE, WHICH BE LONGS TO OUR FOUR BROTHERS, SH. PAWAN KUMAR GOWADIA(IND.), SH. VIREND RA KUMAR, SH. SUNIL KUMAR AND AMIT KUMAR GOWADIA(HUF). AND SH. AM IT KUMAR IN ANS TO Q NO. 14 OF HIS STATEMENT STATED THAT GOLD OF 5K G BELONGING TO OUR FOUR BROTHERS SH. PAWAN KUMAR GOWADIA, SH. VIRENDRA KUMAR, SH. SUNIL KUMAR AND AMIT KUMAR GOWADIA IS KEPT IN THE TIJORI SITUATED IN THE ROOM OF OUR HOUSE. DURING THE COURSE OF ASSESSMENT PROCEEDING THE LD.AO ASKED THE SOURCE OF ACQUISITION OF ABOVE GOLD AND SILVER ORNAMENTS, IN RESPONSE THERETO THE ASSESSEE FILED R EPLY DT. 02.04.2004 (PB131-136), WITH DETAILS AND EXPLANATIONS. HOWEVER THE AO WAS NOT SATISFY WITH THE REPLY AND MADE THE ADDITION WITHOU T GIVING THE SETOFF OF UNDISCLOSED INCOME/GOLD/SILVER DECLARED IN THE HAND OF FAMILY MEMBERS FOR WHICH THE ASSESSEE AND HIS ALL FAMILY MEMBER HAD FILED THE RETURN BY CONSIDERING THE ALL UNDISCLOSED INCOM E FOUND DURING THE SEARCH AND DISTRIBUTED THE SAME BETWEEN THE FAMILY MEMBERS. THE AO 22 MADE ADDITION OF RS. 16,93,107/- ON ACCOUNT OF GOLD BEING 1/4 TH SHARE OF 14858.360 GM FOUND AT COMMON TIJORI IN COMMON RE SIDENCE AND RS. 2,31,468/- ON ACCOUNT OF SILVER I.E. 1/4 TH SHARE OF 181.921 KG, ONLY ON THE BASIS OF STATEMENT OF THE ASSESSEE/S BROTHER AM IT AND SUNIL AND OFFER LETTER BY THE ASSESSEE AND BROTHERS DURING TH E COURSE OF SEARCH. VIDE ASSESSMENT ORDER DT. 20.05.2004 (PB97-105). IN FIRST APPEAL THE ASSESSEE FILED DETAILED EXPLANA TIONS, WRITTEN SUBMISSION. AFTER CONSIDERING AND VERIFIED FROM BOO KS AND SEIZED RECORDS, THE LD. CIT(A) HAS DELETED THE ADDITION BY OBSERVING AS UNDER) VIDE ORDER IN APPEAL NO. 169/UDR/04-05 DT. 18.10.20 05. REGARDING RS. 16,39,107/- FOUND AT COMMON TIJORI- DURING THE COURSE OF SEARCH ACTIVITY TOTAL GOLD J EWELLERY WEIGHING 14858.360 GMS WAS FOUND AND THE SAME WAS SEIZED ALS O . THE A/R OF THE APPELLANT SUBMITTED THAT OUT OF TOTAL GOLD JEWE LLERY OF RS.65,56,430/- HAS BEEN DISTRIBUTED AMONG EIGHT MEM BERS IN THEIR INDIVIDUAL CASE. BUT THE AO DID NOT ACCEPT THE APPE LLANTS CONTENTIONS AND ADDED 1/4 TH SHARE I.E. RS. 16,39,107/- TO THE INCOME. THE A/R OF THE APPELLANT HAS FILED HIS EXPLANATIONS ALONGWITH ANNX. 5&6 WHICH IS ENCLOSED HEREWITH. ON GOING THROUGH ANNEX. 5 IT IS SEEN THAT TOTAL GOLD FOUND HAS BEEN SHOWN 62945 GMS. AS PER BOOKS A ND EXPLAINED IT AT 51629 GMS. THE DIFFERENCE OF 11316 GMS @ RS. 491 0/- PER 10 GMS HAS BEEN OFFERED FOR TAXATION IN THE HANDS OF EIGHT MEMBERS OF THE FAMILY IN THEIR INDIVIDUAL ASSESSMENT. AS PER ANNEX .6 TOTAL AMOUNT OF 23 RS.51,94,000/- HAS BEEN OFFERED FOR TAXATION IN RES PECT OF GOLD. THE COPY OF ANNX.6 IS ENCLOSED. THUS, THE EXCESS GOLD I N THE HANDS OF APPELLANT STANDS EXPLAINED AND THE ADDITION IS DELE TED. REGARDING SILVER ORNAMENTS OF RS. 2,31,468/- TOTAL SILVER ORNAMENTS WEIGHING 181.921 KG WERE FOUND AND SEIZED AT THE TIME OF SEARCH WORTH RS. 9,25,873/-. THE AO HAD ADDED 1/4 TH OF THIS IN THE HANDS OF THE APPELLANT ON THE GROUND TH AT THE EXPLANATION FURNISHED BY THE A/R IS VAGUE AND DOES NOT SPELL AN Y FACT AS TO QUANTUM OF DISCLOSURE IN PARTICULAR AND BASIS THERE OF. FURTHER IT WAS STATED THAT NO ANY STOCK OF SHOP LYING AT OTHER PL ACE OR THAT OTHER PERSONS. THE A/R OF THE APPELLANT SUBMITTED THAT AL L THE SILVER ORNAMENTS WEIGHING 212.696 KG VALUED AT RS. 6,75,09 6/-WERE NOT DISCLOSED AND THEREFORE, WERE OFFERED THE ABOVE INV ESTMENT FOR TAXATION UNDER VDIS. THE WORKING OF THE SILVER DECL ARED UNDER VDIS FOR TAXATION HAS BEEN GIVEN BY THE LD. A/R (COPY ENCLOS ED). THE ALSO FILED RECONCILIATION/WORKING AS PER ANNX. 5&6(COPY ENCLOS ED). AS PER ANNX.5 TOTAL SILVER ORNAMENTS 961.260 KG WAS FOUND BUT 83 5.400KG WAS AVAILABLE AS PER BOOKS AND RECORDS, THE BALANCE125. 860 KG@6,400/- PER KG HAS BEEN OFFERED FOR TAXATION. THIS 125.860 KG HAS BEEN INCLUDED IN THE TOTAL DISCLOSURE OF RS. 8,05,000/- ON ACCOUNT OF EXCESS SILVER FOUND DURING THE COURSE OF SEARCH IN THE EIG HT MEMBERS OF THE FAMILY. THUS, THE EXCESS FOUND GETS EXPLAINED. 3. AGAINST THE ORDER OF THE LD . CIT(A) THE REVENUE F ILED APPEAL BEFORE THE HONBLE ITAT. THE HONBLE ITAT RESORTED THE MAT TER BACK TO THE 24 FILE OF THE AO VIDE ITS ORDER IN ITA NO. 03/JU/2006 DT. 10.03.2010 WITH DIRECTION AS UNDER. A PERUSAL OF THE ASSESSMENT ORDER REVELS THAT TH E ASSESSEE MADE A CLAIM IN ASSESSMENT PROCEEDINGS BEFORE THE A O THAT CERTAIN ORNAMENTS WERE RECEIVED IN THE PARTNERSHIP FIRMS, NAMELY, M/S DHANRAJ JEWELLERS AND M/S DHANRAJ GOWA DIA & SONS FOR SALE BY THOSE FIRMS . SOME OF SUCH JEWELLERY AL ONGWITH JEWELLERY OF THE FIRM WAS BROUGHT IN COMMON TIJORI AT THE PARTNERS RESIDENCE AND THUS SUCH QUANTITIES WERE AV AILABLE TO EXPLAIN THE JEWELLERY FOUND AT THE RESIDENCE AND WI TH VARIOUS FAMILY MEMBERS. THE AO, HOWEVER, KEEPING IN VIEW TH E STATEMENT MADE BY ONE OF THE PARTNERS, NAMELY, SH. VIRENDRA KUMAR GOWADIA THAT NEITHER THE JEWELLERY OF OTHERS IS LYING AT THE FIRMS NOR THE JEWELLERY OF THE FIRM IS LYING WI TH OTHERS AND FINDING THAT THERE ARE NO ENTRIES FOR RECEIPTS AND SALE OF SUCH JEWELLERY RECORDED IN THE BOOKS OF ACCOUNT. CONSIDE RED THAT THE SAID EXPLANATION IS AN AFTERTHOUGHT AND REJECTED THE SAME WITHOUT MAKING ANY FACTUAL VERIFICATION FROM THE KA RIGARS WHOSE NAME DULY RECORDED IN THE SEIZED MATERIAL ITS ELF. THE LD. CIT(A) ALSO DID NOT VERIFY THE CORRECTNESS OF T HIS FACT AND ACCEPTED THE PLEA OF THE ASSESSEE AT ITS FACE VALUE WITHOUT EVEN VERIFYING THE MODUS OPERANDI EXPLAINED BY THE ASSES SEE. IN FACT IN THE MODUS OPERANDI OF BUSINESS, THE ASSESSEE STA TED THAT GOLD IS GIVEN TO KARIGARS FOR MAKING ORNAMENTS AND THEN RECEIVED BACK FROM THEM AND AT SOME OCCASIONS, GOLD ORNAMENTS REC EIVED IN ADVANCE. THE LD. CIT(A) DID NOT COMMENT AS TO WHETH ER ENTRIES 25 OF ISSUING GOLD FOR MAKING ORNAMENTS WAS RECORDED I N KARIGAR BHAI OR THAT WAS MERELY A BOOK ENTRY FOR RETURNING BACK THE GOLD ORNAMENTS. EVEN KARIGARS WHOSE NAMES WERE ENTERED I N THE KARIGAR BAHI AND AS ARE ALSO NARRATED IN THE FIRST APPELLATE ORDERS OF THE RESPECTIVE FIRMS, WERE NEITHER EXAMIN ED NOR ANY INQUIRY MADE THEREON. IT WAS ALSO NOT INQUIRED AS T O HOW THE JEWELLERY ALLEGEDLY MEANT FOR SALE AT THE BUSINESS PREMISES REACHED THE PERSONAL TIJORI AT PARTNERS RESIDENCE. THAT BESIDES, EVEN THE QUANTITIES OF THE GOLD ORNAMENTS THAT ARE CLAIMED TO HAVE FINALLY SURRENDERED AND CONTAINED IN THE TOTAL VALUE OF SURRENDER OF RS. 51,94,000/- AS PER ANNEXURE-5 FORM ING PART OF THE ORDER OF THE CIT(A) WERE NOT AVAILABLE AND THUS , WITHOUT APPLICATION OF MIND THEREON, THE DIFFERENCE IN QUAN TITY STOOD ACCEPTED BY THE LD. CIT(A). THE LD. CIT(A) ALSO ACC EPTED THE CLAIM OF THE OTHER FAMILY MEMBERS FOR A QUANTITY OF 5250 GMS EVEN THOUGH NO CLAIM OR CONFIRMATIONS IN THAT RESPE CT FROM SUCH FAMILY MEMBERS ARE LAID ON RECORD. IT IS ALSO NOTEW ORTHY THAT THREE PERSONS, NAMELY SH. AMIT GOWADIA, SH. SUNIL GOWADIA, AND SH. NARENDRA GOWADIA HAD KEPTS BOOKS OF ACCOUNT S AND CLAIMED AVAILABLE QUANTITY OF DECLARED GOLD ORNAMEN TS THEREIN. IN THAT EVENT, IT SOUNDS STRANGE TO ALLOW FURTHER B ENEFIT OF 100 GMS OF ORNAMENTS TO EACH OF THEM. THE CLAIM AS SUCH HAS NOT BEEN CONSIDERED IN THE TENOR OF THE CBDT CIRCULARS READ WITH JUDGMENT IN THE CASE OF PATI DEVI V/S ITO 240 ITR 727(KAR) AND CIT V/S KAILASH CHAND 198 CTR 201(RAJ.) SUCH BENEFI T IS AVAILABLE ONLY IN A CASE WHERE THE ASSESSEE IS NEITHER ASSES SED TO WEALTH TAX OR DECLARED SUCH QUANTITIES TO THE INCOME TAX D EPARTMENT OR DID NOT MAINTAIN ANY ACCOUNTS IN THAT REGARD, IS RE QUIRED TO BE 26 VERIFIED AS IN A CASE WHERE METICULOUS ACCOUNTS ARE MAINTAINED, SUCH BENEFIT MAY NOT BE AVAILABLE TO THE ASSESSEE. THIS ASPECT HAS NOT BEEN DWELVED UPON BY THE LD. CIT(A) BEFORE ACCEPTING THE CLAIM ON ITS FACE VALUE. THE LD. CIT(A) ALSO DID NOT CONSIDER THE APPLICAB ILITY OF S. 69B FOR UNEXPLAINED INVESTMENT FOUND AND ASSESSABLE AS UNDI SCLOSED INCOME UNDER CHAPTER XIVB, BUT THE SURRENDER MADE BY VARIO US FAMILY MEMBERS AT THE DICTATES OF THEIR HEAD OF THE FAMILY AND IN ORDER TO MAINTAIN HARMONY IN THE FAMILY, STOOD ACCEPTED EVEN THOUGH SUCH SURRENDER AMOUNT WAS NOT, IN FACT, THE INCOME THAT COULD BE ASSESSED AS THEIR UNDISCLOSED INCOME IN THEIR HAND BUT WAS S UBSEQUENT AMOUNT OF APPROPRIATION THAT AT BEST COULD BE TAKEN AS APP LICATION OF INCOME OF THOSE PERSONS, WHO IN FACT, HAVE EARNED AND AS SUCH, SUCH UNEXPLAINED INVESTMENT COULD BE DEEMED THEIR UNDISC LOSED INCOME. THERE ARE, THUS, SERIOUS PROCEDURAL LAPSE COMMITTED BY THE LD. CIT(A) IN ACCEPTING THE CORRECTNESS OF THE ANNEXURE 5&6 ON THE BASIS OF WHICH ADDITION HAVE BEEN DELETED WHEREAS CORRECT & COMPLE TE FACTS IN THAT REGARD WERE NEITHER LAID ON RECORD NOR INQUIRED BY HIM. WE, THEREFORE, CONSIDER IT PROPER AND JUSTIFIED TO SET -ASIDE HIS DECISION WITH RESPECT TO GOLD ORNAMENTS AND LIKEWISE FOR SI LVER ORNAMENTS AS WELL AS AND RESTORE THE MATTER TO THE FILE OF THE AO SO THAT THE ASSESSEE HAS AN OPPORTUNITY TO PUT UP HIS CASE BEFO RE HIM. ALONG WITH DOCUMENTARY EVIDENCE TO THE SATISFACTION OF THE AO, WHO AFTER MAKING VERIFICATION OF FACTS SHALL REACH A CONCLUSION IN A CCORDANCE WITH LAW. IN CONSEQUENT TO THE DIRECTION OF THE HONBLE ITA T THE AO ISSUED NOTICE TO THE ASSESSEE FOR SET ASIDE ASSESSMENT PRO CEEDINGS. IN 27 RESPONSE THERE TO THE ASSESSEE FILED REPLY EXPLANAT IONS CHART ETC. (PB 186 TO 188 & CPB5-24)). THE AO HOWEVER IGNORED ALL THESE EXPLANATIONS CHART ETC AND STATED THAT (I) THE DIVISION OF THE F AMILY MEMBERS OF GOVADIA GROUP HAD HAPPENED BEFORE BLOCK PERIOD AND MEMBERS OF GOWADIA FAMILY WERE HAVING THEIR SPECIFIED SHARE IN EACH OF THE ASSETS. (II) THE GOLD ORNAMENTS WEIGHING 14858.360 GMS RECO VERED FROM STRONG ROOM WERE STATED TO BE BELONGING TO FOUR BROTHERS S AY SH. SUNIL KUMAR, SH. VIRENDRA KUMAR, SH. PAWAN KUMAR AND AMIT KUMAR AS ADMITTED BY SH. SUNIL AND AMIT IN THEIR STATEMENT DT. 28.05.200 2. THE AO REPRODUCED THE STATEMENTS OF VARIOUS FAMILY MEMBERS IN THE ASSESSMENT ORDER.(III) THE PARTNER STATED IN THEIR STATEMENT THAT NEITHER THE CASH, STOCK OF GOLD AND SILVER JEWELLER Y BELONGING TO FIRM LYING AT ANY PLACE OR WITH ANY OTHER PERSON NOR THE CASH, STOCK OF GOLD AND SILVER JEWELLERY BELONGING TO OTHER PERSON LYIN G AT FIRM. (IV) THE ASSESSEES CLAIM IN RESPECT OF STOCK OF GOLD AND SI LVER ORNAMENTS CLAIMED TO BE BELONGING TO KARIGARS AND NOTED IN TH E KARIGAR BAHIS CANNOT BE ACCEPTED AS CORRECT IN THE LIGHT OF BASIS OF PRINCIPLES OF ACCOUNTING. IT IS AGAINST UNBELIEVABLE THAT KARIGAR S USED TO KEEP/DEPOSIT THEIR GOLD/SILVER WITH THE ASSESSEE I. E EMPLOYER. (V) THE FRESH CHART AS WELL AS ANNEXURE -5 & 6 IS VAGUE AND DOES NOT SPELL OUT ANY FACTS AS TO QUANTUM OF DISCLOSURE IN PARTICULAR HAND AND BASIS 28 THEREOF. THE ASSESSEE COULD NOT GIVE YEAR WISE BIFU RCATION OF THIS HEAD WISE DISCLOSURE. (VI) THE CLAIM OF CBDTS NOTIFICATION DT. 11.05.1994 I S NOT ACCEPTABLE BECAUSE SUCH BENEFIT IS AVAILABLE ONLY IN A CASE WHERE THE ASSESSEE IS NEITHER ASSESSED TO WEALTH TAX OR D ECLARED SUCH QUANTITIES TO THE INCOME TAX DEPARTMENT OR DID NOT MAINTAIN ANY ACCOUNTS IN THAT REGARD, IS REQUIRED TO BE VERIFIED AS IN A CASE WHERE METICULOUS ACCOUNTS ARE MAINTAINED, SUCH BENEFIT MAY NOT BE AVAILABLE TO THE ASSESSEE. (VII) IT NEITHER EXPLAINED THE SOU RCE OF INVESTMENT EXCEPT STATING THAT EXPLAINABLE NOR SPECIFIED WHICH FAMILY MEMBER OWNS OR HOW MUCH QUANTITY IS/WAS OWNED BY PARTICULA R PERSON AND SOURCES THEREOF. ULTIMATELY THE LD. AO HAS NOT ACCE PTED THE CONTENTION OF THE ASSESSEE OF COMMON DISCLOSURE, CREDITON THE BASIS OF OF CBDT CIRCULAR, GOLD BOND AND VDIS ETC. AND REPEATED THE ADDITION AS MADE IN THE ORIGINAL ASSESSMENT FOR A SUM OF RS. 16,39,107/ - ON ACCOUNT OF COMMON TIJORI. ON PERUSAL OF CHART, IT IS FOUND THA T THE ENTIRE GOLD AND SILVER FOUND DURING THE COURSE OF SEARCH AT GOWADIA GROUP WERE CONSIDERED COMMONLY AND DISTRIBUTED IN MEMBERS/CONC ERNS OF GOWADIA GROUP. THE AO DID NOT ACCEPT THE COMMON DIS CLOSURE. REGARDING ADDITION OF RS. 2,31,464/- ON ACCOUNT OF SILVER THE AO NOTED THAT SILVER ORNAMENTS OF 181.921 KG VALUE OF RS. 9, 25,873/- WAS ALSO FOUND DURING THE COURSE OF SEARCH IN COMMON TIJORI AT COMMON 29 RESIDENCE WHICH ALSO CLAIMED TO BE BELONGING TO FOU R BROTHERS AS IN GOLD. THE AO REJECTED THE CONTENTION, EXPLANATIONS, DETAILS AND CHART BY STATING THAT SH. SUNIL KUMAR GOVADIAS CONTENTIO NS THAT 25.00 KG OF SILVER ORNAMENTS PERTAINING TO SMT. JYOTSNA W/O VIR ENDRA GOVADIA, SMT. SHIVANI W/O AMIT KUMAR, AND SMT. KAJAL W/O SH. SUNIL KUMAR IS NOT FOUND CORRECT AS NO SPECIFIC ITEMS OWNED BY THE SE LADIES WERE FOUND AND IDENTIFIED IN THE ENTIRE STOCK OF 181.921 KG. ALL THE ORNAMENTS OF EACH TYPE WERE KEPT IN SEPARATE PLACE. NO DETAILS OF ORNAMENTS ARE SHOWN IN RESPECTIVE INCOME TAX/WEALTH TAX RETURNS MADE AVAILABLE. THEREFORE THE AO AGAIN MADE ADDITIO N OF RS. 2,31,468/- 1/4 TH SHARE OF THE ASSESSEE AS UNEXPLAINED INVESTMENT IN SILVER ORNAMENTS OUT OF WHICH THE ASSESSEE HAS ALR EADY DECLARED RS. 75,000/-. IN FIRST APPEAL DETAILED SUBMISSIONS/EXPLANATION HA VE BEEN FILED. HOWEVER THE LD. CIT(A) HAS REJECTED ALL THE PLEA AN D CLAIMS OF THE ASSESSEE BUT ACCEPTED PLEA REGARDING BENEFIT OF CB DT CIRCULAR AND GOLD BOND SCHEME VIDE OBSERVATION MADE AT PAGE 35 TO 37 I.E THE LD. CIT(A) HAS ALLOWED THE RELIEF OF RS. 6,57,039/- OU T OF RS. 16,39,107/- IN GOLD ACCOUNT BY GIVING THE BENEFIT OF 1489 GM GO LD JEWELLERY. AND IN SILVER ACCOUNT HE ALLOWED THE RELIEF OF RS. 40,712/ - OUT OF RS. 30 1,56,468/- BY GIVING THE BENEFIT OF 8KG SILVER. AGG RIEVED ASSESSEE AND REVENUE BOTH ARE IN APPEAL. 3.1 IT WAS SUBMITTED BY LD. AR AS UNDER :- FIRSTLY WE RELY UPON ON OUR SUBMISSION FILED BEFORE THE LD. CIT(A) IN FIRST ROUND REPRODUCED IN HIS ORDER PB 77-87AND 34-51) AND WS FILED IN SECOND ROUND(PB206-226) WHICH MAY KINDLY B E CONSIDERED AND ITS ORDER TO THE EXTENT IN FAVOUR OF ASSESSEE. 2.1 FURTHER AS WE HAVE ALREADY STATED ABOVE THE REASON OF COMMON DISCLOSURE HENCE AT THE TIME OF FILING OF RE TURNS U/S 158 BC A LIST WAS PREPARED WHERE IN THE TOTAL ASSETS FO UND WERE SHOWN VIS A VIS UNDISCLOSED INCOME SURRENDERED IN 8 HANDS. THE REASONING AND LOGIC BEHIND THE DISTRIBUTION AMONGST THESE FAMILY MEMBERS, OF THE UNDISCLOSED INCOME SO SURRENDERED, WAS EXPLAINED IN THE DETAIL AT THE TIME OF ORIGINAL ASS ESSMENT PROCEEDINGS IN EVERY CASE. THE REASONING BEHIND NOT DISCLOSING ANY UNEXPLAINED INCOME IN THE HANDS OF THE THREE FI RMS, OR THE NON WORKING PARTNERS SHRI NARENDRA KUMAR AND THE TH REE LADIES THOUGH PARTNER BUT NONWORKING PARTNERS, AND OTHER F AMILY MEMBER WAS THAT WHATEVER UNDISCLOSED INCOME WAS EAR NED, SOLELY AND EXCLUSIVELY BELONGED TO THE WORKING PART NERS FOR THE REASON THAT THESE WERE THE ONLY PERSONS, WHO WERE E NGAGED IN THE BUSINESS OUTSIDE THE BOOKS NOT THE FIRM ITSELF OR NON WORKING PARTNERS. 2.2 THIS IS ALSO BECAUSE OF THE LEGAL POSITION THAT ALTHOUGH A PARTNER OF A FIRM ACT AS AN AGENT OF THE FIRM HOWEV ER ONLY FOR THE PURPOSE OF THE BUSINESS OF THE FIRM I.E. TO THE EXTENT SUCH 31 WORK IS DONE WITH THE CONSENT AND KNOWLEDGE OF ALL THE PARTNERS AND THEN ONLY, HE CAN ABIDE THE OTHER PARTNERS BY H IS ACT AS PROVIDED U/S 18, 19 & 22 OF THE PARTNERSHIP ACT, 19 32. THERE WAS NO MATERIAL ON RECORD DURING ORIGINAL ASSESSMENT PR OCEEDINGS SUGGESTING A CONSCIOUS KNOWLEDGE AND CONSENT BY THE OTHER NON WORKING PARTNERS OF THESE THREE FIRMS. FOR THIS VERY REASONS, IT CANNOT BE SAID THAT THE ACT DONE BY ONE OR FEW PART ICULAR PARTNERS (BUT NOT BY ALL) IS ACT OF THE FIRM SO AS TO CREATE A JOINT LIABILITY . THE THEN AO AS WELL AS THE PRESENT AO AND CIT(A) BOTH HAVE NOT UNDERSTOOD THE REASONS IN THEIR TRUE SENSE AND HAS ARGUED BEFORE THE TRIBUNAL THAT THE NAME OF NARENDR A KUMAR IS ESCAPED IN THE LIST PREPARED BY THE ASSESSEE GROUP WHICH CONTRARY TO THE FACTS OF THE CASE AND MATERIAL AVAI LABLE ON RECORDS. 3.1 THE DISTRIBUTION OF SURRENDERED INCOME WAS IN ACCO RDANCE WITH THE UNDISCLOSED ASSETS FOUND AND AFTER DISCUSS ION WITHIN THE FAMILY WITH A VIEW TO MAINTAIN HARMONY IN THE FAMIL Y. SHRI DHANRAJ GOWADIA BEING THE HEAD OF THE FAMILY WAS SU PPOSED TO HAVE MAINTAINED A BALANCE BETWEEN THE FAMILIES O F HIS TWO WIVES. THEREFORE, HE CONSCIOUSLY DISTRIBUTED THE UN DISCLOSED INCOME DEPENDING UPON THE NUMBER OF MEMBERS IN THE TWO GROUPS AND CONSIDERING THE SOURCES OF ACQUISITION OF UNDISCLOSED ASSETS AFTER MUTUAL CONSENSUS WHICH WAS THE ONLY PRACTICABLE METHOD IN THE OPINION OF VARIOUS FAMILY MEMBERS OF THE GROUP AND NONE OF THEM DENIED. AT THE TIME OF COMPUTATION OF UNDISCLOSED INCOME TO BE OFFERED IN RESPONSE TO THE NOTICE UNDER SECTION 158(BC) THE FAMILY MEMBERS HAVE CLAIMED CREDIT OF THE ORNAMENTS ACCORDING TO THE RE CORDED 32 DECLARED AS PER BOOKS OR OTHER RECORDS VIZ DECLARED UNDER GOLD BOND SCHEME, 1993 AS WELL AS VOLUNTARILY DISCLOSURE SCHEME, 1997 OR IN THE WEALTH TAX RETURN AS WELL AS CONSIDE RING THE CBDT INSTRUCTION DATED 11/5/94 AND DECISIONS OF VARIOUS HIGH COURTS AND TRIBUNAL. CARE WAS ALSO TAKEN TO AVOID DOUBLE TAXATION OF THE SAME INCOME/ASSETS IN MORE THAN ONE HAND. DETAI LED EXPLANATIONS WERE ON RECORDS TO CONSIDER SUCH ASSET S AS DECLARED AS PER SCHEME OF GOVERNMENT. 3.2 UNDER THE TOTALITY OF FACTS AND CIRCUMSTANCES OF T HE CASE, IT IS IMPRACTICABLE TO MAKE ADDITION ON ACCOUNT OF UND ISCLOSED ASSETS BY ESTABLISHING THE OWNERSHIP AND SOURCES OF ACQUISITION OF EACH AND EVERY PERSON OF THE FAMILY. THE SUBSTAN TIVE AND VITAL FACTS REMAINED UNDISPUTED AND UN-REBUTTED TILL DATE IS THAT THE ENTIRE UNDISCLOSED ASSETS FOUND HAVE BEEN DISCLOSED BY THE ASSESSEE GROUP IN THE RETURNS SUBMITTED IN RESPONSE TO NOTICE U/S158(BC) IN THE HANDS OF WORKING PARTNERS ONLY AF TER MUTUAL CONSENSUS AMONGST THE FAMILY MEMBERS. 3.3 THE POSITION OF DECLARED AND EXPLAINED GOLD AND SI LVER ORNAMENTS AS WELL AS CASH IS CHANGED ON ACCOUNT OF TWO SEPARATE ASSESSMENT ORDERS FINALIZED OUT OF 12 ASSESSMENTS O RIGINALLY FRAMED AGAINST THE GROUP. THE ASSESSMENT IN THE CAS E OF M/S. DHANRAJ JEWELERS AND M/S. GOWADIA JEWELERS WERE NOT WITHIN JURISDICTION OF SET ASIDE PROCEEDINGS. SOME OF THE ASSETS WHICH WERE ORIGINALLY OFFERED FOR TAXATION IN THE HANDS O F THE WORKING PARTNERS ARE BEING ASSESSED IN THE HANDS OF FIRM, S O THE POSITION OF BALANCE ASSETS FOUND, BALANCE EXPLAINED ASSETS A ND BALANCE 33 UNDISCLOSED ASSETS WAS PREPARED AND SUBMITTED FOR V ERIFICATION TO AVOID DOUBLE TAXATION ON SAME ASSETS. 4. GOLD AND SILVER JEWELLERY THE GOLD AND SILVER ORNAMENTS AND UTENSILS FOUND AT SHOP AND AT THE RESIDENCE OF PARTNERS OF FIRM ARE CONSIDERED CO MMONLY FOR EXPLANATIONS OF AVAILABILITY OF DECLARED ORNAMENTS AT THE TIME OF FILING OF RETURN IN RESPONSE TO NOTICE UNDER SECTIO N 158 BC AND DURING ORIGINAL BLOCK ASSESSMENT PROCEEDINGS DUE TO THE REASON THAT MANY A TIMES ORNAMENTS OF SHOPS WERE KEPT AT R ESIDENCE FOR SECURITY PURPOSES AS ALSO ADMITTED BY ASSESSEE SH.V IRENDRA KUMAR ONE OF THE PARTNER IN ANS TO QUE. 24(CPB301) IN STATEMENT RECORDED DURING THE SEARCH. FURTHER SOME TIME LADIES OF THE FAMILY HAVE UTILIZED ORNAMENTS BELONGING TO SHOP ON FESTIVALS OR SOCIAL CEREMONIES ALSO. SIMILARLY ORNA MENTS BELONGING TO LADIES WERE ALSO BROUGHT TO SHOP FOR S AMPLE AND DEMONSTRATION PURPOSES TO THE CUSTOMERS. FURTHER IT WAS CONVENIENT TO EXPLAIN COMMONLY BECAUSE THE DEPARTME NT TOO HAD INVENTORIED COLLECTIVELY AND SIZED ALL THE ORNA MENTS THROUGH COMMON PANCHNAMA ALSO. THE STATEMENT OF TOTAL GOLD AND SILVER ORNAMENTS FO UND AND SEIZED AT THE TIME OF SEARCH AT ALL THESE SEVEN PRE MISES BELONGING TO THREE FIRMS AND ALL THE INDIVIDUAL MEM BERS OF THE FAMILY OF SH. DHANRAJ GOWADIA AND THEIR SONS WAS AV AILABLE ON RECORDS(PB66,180). 34 FRESH STATEMENTS RELATED TO ASSETS FOUND AND CONSID ERED EXPLAINED WERE PREPARED AND FILED BEFORE THE LOWER AUTHORITY AND ALSO ENCLOSED HEREWITH FOR YOUR KIND CONSIDERAT ION AS IN THE ORIGINAL STATEMENTS 12 ASSESSEE WERE THERE WHER E AS AT PRESENT WE HAVE TO CONSIDER ONLY 10 ASSESSEE IN SE T ASIDE PROCEEDINGS(CPB 8-24). THE ASSESSEES HAD ALSO EXPLAINED THE AVAILABILITY OF DECLARED GOLD IN SUCH STATEMENT. THE DECLARED GOODS OF EACH FIRM, INDIVIDUAL PARTNERS AND ALL MALE, FEMALE MEMBERS AR E INCLUDED IN SUCH CLAIM OF DECLARED ORNAMENTS. THE AVAILABILI TY OF GOLD ORNAMENTS IS CLAIMED ON THE BASIS OF BOOKS OF ACCOU NTS AND RECORDS OF FIRMS AND WEALTH TAX RETURNS, GOLD BOND SCHEME, VDIS RETURNS AND ON THE BASIS OF INSTRUCTIONS GIVEN BY CBDT CIRCULAR AS PER LAW ONLY. 5.1 AS PER CHART TOTAL GOLD ORNAMENTS WEIGHTING 62945 GMS WAS FOUND AT ALL THE PREMISES OF THE GROUP AND OUT OF W HICH 42213.565 GMS HAS BEEN SEPARATELY CONSIDERED IN THE ASSESSMENTS OF PARTNERSHIP FIRM. ONLY BALANCE WEIG HT OF 20731.44 HAD TO BE EXPLAINED IN SET ASIDE PROCEEDIN GS IN THE CASES OF 9 PERSONS. EXPLANATION FOR AVAILABILITY OF 16936.00 GMS FURNISHED IN FRESH CHART (CPB14-20) AND THERE REMAI NS ONLY 3795.44 GMS AS UNDISCLOSED. AGAINST WHICH THE PART NERS HAVE CONSIDERED 11315.900 GMS AT THE TIME OF DECLARATION OF UNDISCLOSED INCOME IN THE RETURN. HENCE EXCEEDS CON SIDERATION OF 7520.470 GMS WAS THERE. DUE TO THE REASON THAT THE TOTAL UNDISCLOSED GOLD WAS TREATED BY THE PARTNER IN THEI R HAND AT THE 35 TIME OF FILING OF RETURN. BUT THE DEPARTMENT HAS CO NSIDERED PART OF IT IN HANDS OF FIRM SO THERE WAS EXCESS CONSIDER ATION IN THE HANDS OF PARTNERS. WE WOULD LIKE TO DRAW YOUR ATTEN TION THAT AS THE HONBLE ITAT HAS DIRECTED THAT PART OF THE UNDI SCLOSED INCOME FALLEN TO THE SHARE OF ANY ASSESSEE DECLARED IN THE RETURN OF UNDISCLOSED INCOME IS NOT BROUGHT TO TAX AGAIN . HOWEVER THE AO HAS NOT CONSIDERED THE DIRECTION OF THE HONBLE ITAT IN RIGHT PERSPECTIVE AND NOT REDUCED THE PROPO RTIONATE SHARE IN THE CASE OF INDIVIDUAL ASSESSEE CHARGED DO UBLE TAXATION, WHICH IS AGAINST THE INTEREST OF EQUITY AND NATURAL JUSTICE. 5.2 THE AO CONSIDERED TOTAL UNDISCLOSED GOLD IN THE HA NDS OF ASSESSEE 3714.59(1/4THE SHARE OF 14858.360 OF COMMO N TIJORI) OUT OF THIS THE ASSESSEE HAS DECLARED 2287.580 GMS IN THE RETURN FILED U/S 158 BC AS UNDISCLOSED INCOME + 1368 GMS E XPLAINABLE IN THE HANDS OF SELF, WIFE, AND SON AS PER CBDT CIRCUL AR, STRIDHAN, GOLD BOND DECLARED(SEE DETAILS AS PER CHART SR. NO. 22 TO 24 CPB17-18) +140 GMS OF SMT. SUNITA SISTERINLAW OF SM T. KAJAL W/O SUNIL (ASSESSEE) AS PROVING FROM THE STATEMENT OF S MT. KAJAL W/O ASSESSEE(CPB50&54),+323.53 GMS (1294.120 GMS DIVIDE D IN TO FOUR HAND) OFFERED IN THE HANDS OF FATHER SH. DHANR AJJI BECAUSE THE TIJORI WAS OF THE FATHER AND THE TOTAL OF ALL T HESE COMES 4119.11 I.E EXCESS OF 404.52 GMS HAS BEEN OFFERED FOR TAX, IT MEANS THERE IS NO GOLD REMAINED ON WHICH TAX WAS TO BE CHARGED, AND THE CREDIT OF SUCH SHOULD HAVE BEEN GI VEN IN THE OTHER FAMILY MEMBERS AS CLEAR FROM THE CHARTS AND R ETURN FILED. 5.3 FURTHER IT IS SUBMITTED AND CLARIFY THAT THE GOLD FOUND IN THE TIJORI ALLEGED TO BE BELONGING TO THE FOUR BROTHERS I.E PAWAN, 36 VIRENDRA, SUNIL AND AMIT. HOWEVER THE TIJORI WAS NO T ONLY OF FOUR BROTHERS THE SAME WAS OF THE FATHER SH. DHANRAJ AND THE FATHER CANNOT BE SEPARATED TO THESE FOUR BROTHERS THAT IS WHY THE FATHER ALSO OFFERED GOLD OF 1294.120 GMS AS UNDISCL OSED INCOME AND ADMITTEDLY GOLD IN THE HAND OF SH. DHANRAJJI IS ONLY FOUND 468 GMS WHICH IS EXPLAINABLE AS PER CBDT CIRCULARS AND GOLD BOND SCHEME AND THIS IS EVIDENT FROM THE ASSESSMENT ORDER OF SH. DHARAJJI ENCLOSED WHERE ADDITION IS MADE ONLY O F 468 GMS NOT MORE THAN IT AGAINST WHICH SH. DHANRAJJI DECLARED 1 294.120 GMS. THEREFORE IF YOUR HONOR HAS ALSO TREATED THE GOLD B ELONGING ONLY TO FOUR BROTHERS THEN AT LEAST THE CREDIT OF UNDISC LOSED GOLD DECLARED BY SH. DHANRAJJI IN HIS HAND SHOULD BE GI VEN TO THESE FOUR BROTHERS AT LEAST. HENCE THE CREDIT OF UNDISCL OSED INCOME OFFERED IN THE HANDS OF THE FATHER SHOULD ALSO BE G IVEN IN THE HANDS OF FOUR BROTHERS AND THUS 323.53 GOLD IN EACH HAND OF FOUR BROTHER DEEMED TO BE OFFERED IN THEIR INDIVIDUAL HA ND THERE APART TO DECLARED BY THEM. HENCE TOTAL OFFERED IN T HEIR HANDS COMES TO 2611.11 GMS (2287.580 DECLARED BY ASSESSEE AND 1/4 TH DECLARED BY THE FATHER IN ITS HAND). THUS HERE IN T HE HAND OF ASSESSEE TOTAL GOLD OF 4119.11 GMS ARE EXPLAINABLE AND DECLARED AGAINST THE UNDISCLOSED GOLD OF 3714.59 FOUND OR TREATED BY THE REVENUE. THE CLAIM OF EXPLAINED GOLD ORNAMENTS IS VERY REASO NABLE CONSIDERING THE MEMBERS OF FAMILY AND THEIR PAST SA VINGS FROM DRAWINGS, GIFTS, SOCIAL CEREMONIES ETC. THE CLAIM I S VERY MEAGER ALSO. THE LD. CIT(A) APPRECIATED THE SAME BUT HE IG NORED THE THING THAT THE BALANCE GOLD/SILVER DECLARED IN THE HANDS OF OTHER 37 FAMILY MEMBERS. HENCE THE ASSESSEE RIGHTLY MADE THE CLAIM AS PER CBDT INSTRUCTION. HENCE WE REQUEST YOUR HONOR T O ACCEPT THE SAME. FURTHER THE OVERALL UNDISCLOSED GOLD ORNAMENT S HAS ALREADY BEEN CONSIDERED AND THE SHARE OF ASSESSEE I S INCLUDED IN THE UNDISCLOSED INCOME OFFERED FOR TAXATION IN THE RETURN OF UNDISCLOSED INCOME. THEREFORE, NO FURTHER ADDITION WAS CALLED FOR ON THIS ACCOUNT IN THIS CASE. 6. SILVER ORNAMENTS . AS PER CHART TOTAL SILVER ORNAMENTS WEIGHTING 961.2 60 KG WAS FOUND AT ALL THE PREMISES OF THE GROUP AND OUT OF W HICH 791.307 KG HAS BEEN SEPARATELY CONSIDERED IN THE ASSESSMENT S OF PARTNERSHIP FIRM. ONLY BALANCE WEIGHT OF 169.95 HAD TO BE EXPLAINED IN SET ASIDE PROCEEDINGS IN THE CASES OF 9 PERSONS. OUT OF THAT(169.95KG) AVAILABILITY OF 57.00 KG HAS BEE N CONSIDERED IN THE HAND OF 22 FAMILY MEMBERS(CPB97), WHICH IS VERY REASONABLE LOOKING TO THE STATUS AND SIZE OF THE FAMILY AND AL SO APPEARING FROM THE STATEMENTS OF VARIOUS PERSON AND THERE REM AINS ONLY 112.95KG AS UNDISCLOSED. AGAINST WHICH THE PARTNER HAVE CONSIDERED 125.860 KG AT THE TIME OF DECLARATION OF UNDISCLOSED INCOME IN THE RETURN. HENCE EXCEEDS CONSIDERATION O F 12.91 KG WAS THERE. DUE TO THE REASON THAT THE TOTAL UNDISCL OSED SILVER WAS TREATED BY THE PARTNER IN THEIR HAND AT THE TIM E OF FILING OF RETURN. BUT THE DEPARTMENT HAS CONSIDERED PART OF I T IN HANDS OF FIRM SO THERE WAS EXCESS CONSIDERATION IN THE HANDS OF PARTNERS. WE LIKE TO DRAW YOUR ATTENTION THAT AS THE HONBLE ITAT HAS DIRECTED THAT PART OF THE UNDISCLOSED INCOME FALLEN TO THE SHARE 38 OF ANY ASSESSEE DECLARED IN THE RETURN OF UNDISCLOS ED INCOME IS NOT TO BE BROUGHT TO TAX AGAIN. HOWEVER, THE AO HAS NOT CONSIDERED THE DIRECTION OF THE HONBLE ITAT IN RIGH T PERSPECTIVE AND NOT REDUCED THE PROPORTIONATE SHARE IN THE CASE OF INDIVIDUAL ASSESSEE CHARGED DOUBLE TAXATION, WHICH IS AGAINST THE INTEREST OF EQUITY AND NATURAL JUSTICE. POSITION OF AVAILABILITY OF EXPLAINED SILVER ORNAME NTS VIZ A VIZ POSITION OF SILVER ORNAMENTS FOUND DURING SEARCH PR OCEEDINGS AND FRESH CHART IN SET ASIDE PROCEEDING WERE FILED AND ALSO ATTACHED HEREWITH(CPB 8-9, & 97). THE CLAIM OF EXPLAINED SILVER ORNAMENTS WAS VERY RE ASONABLE CONSIDERING THE MEMBERS OF FAMILY AND THERE PAST SA VINGS FROM DRAWINGS, GIFTS, SOCIAL CEREMONIES, MARRIAGES ETC. THE CLAIM IS VERY MEAGER ALSO. THE LD. CIT(A) APPRECIATED THE SA ME BUT HE IGNORED THE THING THAT THE BALANCE GOLD/SILVER DECL ARED IN THE HANDS OF OTHER FAMILY MEMBERS. HENCE WE REQUEST YOU R GOOD SELF TO ACCEPT THE SAME. FURTHER THE OVERALL UNDISCLOSED SILVER ORNAMENTS HAS ALREADY BEEN CONSIDERED AND THE SHARE OF ASSESSEE IS INCLUDED IN THE UNDISCLOSED INCOME OFFERED FOR T AXATION IN THE RETURN OF UNDISCLOSED INCOME. 7. FURTHER SH. AMIT KUMAR IN HIS STATEMENT IN ANS TO Q14 (CPB 33-34)STATED THAT HIS WIFE IS HAVING 8.000 KG SILVE R WHICH HAS BEEN RECEIVED EITHER FROM THE INLAWS AND FATHER AT THE TIME OF MARRIAGE AND SMT. KAJAL WIFE OF SEARCH. SUNIL KUMAR AND SMT. JYOTSNA W/O SH. VIRENDRA KUMAR IS ALSO HAVING 8.250 KG SILVER EACH. 39 THEREFORE NO FURTHER ADDITION IS CALLED FOR ON THIS ACCOUNT IN THIS CASE. 8.1 FURTHER THE HONBLE ITAT IN SAME SEARCH GROUP CASE NAMELY M/S GOWADIA JEWELLERS IN ITA NO.776/JU/2005 DT. 30. 09.2008 AT PAGE 9 ONWARD(CPB108-109) OBSERVED THAT IT IS CORRECT THAT ONE OF THE PARTNER HAS ADMIT TED OF EXCESS STOCK OF GOLD AND AGREED TO SURRENDER THE EXCESS I N HIS STATEMENT RECORDED U/S 132(4) OF THE ACT. THE RESPO NDENT ASSESSEE DID NOT ACT IN ACCORDANCE WITH THE STATEME NT SO MADE AND FILED RETURN OF NIL UNDISCLOSED INCOME, THEREBY RETRACTING WHAT WAS ADMITTED IN THE STATEMENT U/S 132(4) OF TH E ACT. THE REASON TAKEN FOR RETRACTION IS THAT THE PARTNER, AT THE HEAT OF MOVEMENT, WHEN THE SEARCH WAS GOING ON, COMMITTED F ACTUAL ERROR IN ADMITTING STOCK TO BE EXCESS. THE STATEMEN T WAS MADE WITHOUT CONSIDERING THE BOOKS ENTRIES, THAT WERE DU LY RECORDED IN THE SEIZED RECORD. IT IS AFTER CONSIDERATION OF ALL SUCH ENTRIES AND THERE BEING NO EXCESS STOCK AS ALLEGED , THE ASSESSEE DID NOT DECLARE IT AS ITS UNDISCLOSED INCO ME. SUCH A RETRACTION THE LD. CIT(A) FOUND TO BE VALID. H E FOUND THAT THE AO HAS IGNORED THE MOST IMPORTANT FACTS THAT TH E ENTRIES FOR ALLEGED EXCESS STOCK WERE FOUND WRITTEN IN THE CUSTOMERS REGISTER. IN THE CUSTOMERS REGISTER SEIZED & INVENT ORIED. AS ANN A-24 WHICH IS MAZDOORI REGISTER FOR A.Y. 20 01-02 OF THE ASSESSEE FIRM M/S GOWADIA JEWELLERS, THE ENTRY REGARDING THE QUANTITY WEIGHING 5.389 KG GOLD JEWELLERY IS FOU ND WRITTEN AT S.NO. 33 ON DT. 07.04.2002 AND AGAIN AT S.NO. 22 40 OF DT. 17.05.2002. THUS ALLEGED EXCESS QUANTITY OF 5 .389 GM OF GOLD JEWELLERY STANDS EXPLAINED. THE LD. DR FROM THE SEIZED DOCUMENTS, A CERTIFIED COPY PLACED ON RECORD OF THE TRIBUNAL, WAS NOT ABLE TO SHOW ANY PERVERSITY IN THE FINDING SO REACHED BY THE LD. CIT(A). KEEPING IN VIEW OF THE TOTALITY AND FACTS AND CIRCUMSTANCE, WE FIND NO REASON TO INTERFERE WITH T HE DECISION REACHED BY THE LD. CIT(A) AS HE DELETED THE ADDITIO N AFTER BEING SATISFIED THAT THE RECEIPTS OF THE ALLEGED GOLD FRO M THE CUSTOMERS STOOD DULY RECORDED IN THE MAZDOORI REGISTER SEIZED AND INVENTORIED AT ANN-A-24 TO THE PANCHNAMA, WHICH HAS TO BE TAKEN AS A DIRECT EVIDENCE TO SUPPORT THE CLAIM OF THE RESPONDENT ASSESSEE. STATEMENT MADE UNDER ERRONEOUS BELIEF AND LACKING ANY SUPPORTIVE EVIDENCE THEREOF COULD N OT BE TAKEN AS BASIS TO MAKE ADDITION AS UNDISCLOSED OF BLOCK P ERIOD. AS REGARD EXCESS JEWELLERY ALLEGED TO HAVE BEEN FOU ND AT THE RESIDENCE OF THE PARTNERS, THE LD. CIT(A) DELETED T HE ADDITION BY ALLOWING THE BENEFIT OF BOARD INSTRUCTIONS NO. 1916 DT. 15.05.1994, WHICH INTERALIA PROVIDED CREDIT OF JEWE LLERY TO BE GIVEN IN THE CASE OF EACH MARRIED LADY AT 500GMS OF GOLD JEWELLERY, IN THE CASE OF UNMARRIED LADY AT 250GMS AND IN THE CASE OF MALE MEMBERS AT 100GMS. IN CATENA OF CASES , THE TRIBUNAL HAS ALLOWED BENEFIT IN RESPECT OF EXCESS J EWELLERY SO FOUND AT THE RESIDENCE BY RELYING ON THE AFORESAID CIRCULAR. LD. COUNSEL OF THE ASSESSEE HAS ALSO BROUGHT TO OUR NOT ICE THE JUDGMENT OF PATI DEVI V/S ITO 240 ITR 727(KER), WHICH SUPPORT THE CASE OF THE ASSESSEE. SINCE THE BOARD CIRCULAR IS BINDING ON THE IT AUTHORITIES, WE ARE NOT INCLINED TO INTERFER E WITH THE 41 DECISION TAKEN BY THE LD. CIT(A) AND FINDING ON ME RIT IN THIS GROUND OF THE REVENUE. 8.2 AGAINST THAT THE REVENUE FILED APPEAL BEFORE THE H ONBLE RAJ. HIGH COURT JODHPUR REGISTERED AS DBIT NO.63/2010 ON THE VARIOUS QUESTION OF LAW VIDE(CPB 130-132) AND THE H ONBLE HIGH COURT HAS NOT ADMITTED ANY QUESTION OF LAW EXCEPT L EVY OF SURCHARGE U/S 113. COPY OF ADMISSION/REJECTED ORDE R DT. 13.12.2010 OF HONBLE RAJ. HIGH COURT IS ENCLOSED(C PB 146-147) HENCE THE STANDS OF THE HONBLE ITAT AFFIRMED. HERE IS ALSO SAME FACTS AND CIRCUMSTANCE ALSO BEING SAME GROUP AND SE ARCH AND THE ASSESSEE IS ALSO PART OF THAT SEARCH. 9. FURTHER SEE OVER ALL POSITION AS UNDER: TOTAL GOLD FOUND IN SEARCH 62945.000 LESS GOLD CONSIDERED 16936.000 OF FAMILY MEMBERS BALANCE TO BE CONSIDERED 46009.000 IN THE HANDS OF PARTNERS AND FIRM 37314.565 (STOCK OF THREE FIRMS) +4899.000(GOLD OF KARIGAR AND CUSTOMERS VERIFIED BY CIT(A). LESS GOLD CONSIDERED IN THE HANDS OF FIRM FROM THE SEIZED MATERIAL AS ALSO ADMITTED BY THE HONBLE ITAT IN THE CASE OF GOWADIA JEWELERS (CPB 108)) BALANCE GOLD TO BE DECLARED 3795.435 BY THE INDIVIDUAL MEMBERS OFFERED U/S 158BC 11315.900 HENCE EXCESS CONSIDERED 7520.47 42 STILL HOWEVER THE AO HAS NOT ALLOWED THE CREDIT OF GOLD OF 214.600 GMS BELONGS TO MOTHER OF SMT. SHIVANI W/O A MIT GOWADIA AS SMT. SHIVANI IN HER STATEMENT RECORDED D URING THE COURSE OF SEARCH DT. 28.05.2002 IN ANS TO Q NO. 5(C PB46) STATED THAT THE GOLD OF HER MOTHER IS ALSO KEPT WITH ME BE CAUSE SHE HAD COME ON THE MY DELIVERY HAPPENED 15 DAYS BEFORE, AS ALSO VERIFIABLE FROM THE PANCHNAMA DT. 28.05.2002(CPB89 ) AND THE CREDIT OF GOLD OF 140.00 GMS BELONGS TO SISTER IN L AW(SMT. SUNITA) OF SMT. KAJAL W/O SUNIL GOWADIA AS SMT. KAJAL IN HE R STATEMENT RECORDED DURING THE COURSE OF SEARCH DT. 28.05.2002 IN ANS TO Q NO. 13(CPB50)AND IN ANS TO Q NO. 22 (CPB54) STATED THAT THE GOLD OF HER SISTER-IN-LAW IS ALSO KEPT WITH ME BECA USE SHE HAS COME ON 05.05.2002 ON THE MARRIAGE IN FAMILY AND AL SO THERE IS A MARRIAGE OF DAUGHTER OF BROTHER-IN-LAW IN THE MONTH OF JUNE HENCE SHE LEFT THESE JEWELLERY WITH HER FOR THE SAF ETY PURPOSE AS ALSO VERIFIABLE FROM THE PANCHNAMA DT. 28.05.2002( CPB88) AND THE CREDIT OF 354.600 GOLD SHOULD ALSO BE GIVEN TO THE ASSESSEE WHICH IS VERY EVIDENT FROM THE STATEMENTS, WHICH HA VE BEEN HEAVILY RELIED UPON BY THE REVENUE. IT MEANS EXCESS GOLD OF 7875.07 GMS(7520.47+354.600) HAS BEEN CONSIDERED AN D TAXED BY THE PARTNERS IN THEIR RETURN THAN TO FOUND, DESPIT E IT THE REVENUE STILL MAKING THE ADDITIONS, WHICH IS DOUBLE ADDITION AND AGAINST THE PRINCIPAL OF NATURAL JUSTICE AND SETTLE D LEGAL POSITION THAT A INCOME CANNOT BE TAXED TWICE. 10. FURTHER IN ANS. TO QUE. 10 (CPB28) OF STATEMENT SH . SUNIL KUMAR STATED THAT HIS FATHER HAS GIVEN 500-500 GM G OLD TO EACH BROTHERS AND IN ANS TO Q. 14 SH. AMIT STATED THAT T HE GOLD, SILVER 43 8.25 KG AND GOLD BOND HAS BEEN RECEIVED EITHER FROM THE IN-LAWS AND FATHER AT THE TIME OF MARRIAGE. FURTHER IN THE STATEMENT OF THE BROTHERS OF THE ASS ESSEE THEY STATED THAT IN STATEMENT OF SH. SUNIL KUMAR IN ANS TO Q NO.13CPB29) STATED THAT AS PER MY KNOWLEDGE THE G OLD OF 5-6 KG, SILVER OF 100KG AND CASH ABOUT RS. 1.5 TO 2 LAC IS KEPT IN THIS HOUSE, WHICH IS KEPT IN THE TIJORI SITUATED IN THE SECOND ROOM OF THIS HOUSE, WHICH BELONGS TO OUR FOUR BROTHERS SH. PAWAN KUMAR GOWADIA, SH. VIRENDRA KUMAR, SH. SUNIL KUMAR AND AM IT KUMAR GOWADIA AND SH. AMIT KUMAR IN ANS TO Q NO. 4(CPB33-34) OF H IS STATEMENT STATED THAT GOLD OF 5KG BELONGING TO OUR FOUR BROTH ERS SH. PAWAN KUMAR GOWADIA, SH. VIRENDRA KUMAR, SH. SUNIL KUMAR AND AMIT KUMAR GOWADIA IS KEPT IN THE TIJORI SITUATED IN THE ROOM OF OUR HOUSE. 10.2. AND NO QUESTION HAS BEEN ASKED TO SH. VIRENDRA, PA WAN AND DHANRAJ GOWADIA REGARDING THE COMMON TIJORI. TH US ON PERUSAL OF THE STATEMENT THEY STATED THAT THE GOLD OF 5-6 KG, SILVER 100 KG AND CASH OF 1.5 TO 2 LACS ONLY BELONG S TO THEM I.E OF FOUR BROTHERS. IT MEANS EXCESS (GOLD SILVER AND CAS H) TO THAT BELONGS TO VARIOUS FAMILY MEMBERS OR FIRMS, WHICH K EPT BY THEM IN THAT TIJORI BY THE FATHER SH. DHANRAJ, BECAUSE T HE TIJORI WAS IN THE SUPERVISION OF SH. DHANRAJJI WHO WAS THE HEAD, ELDEST OR OLD PERSON OF THIS FAMILY, AND FOR HIM ALL THE SONS OR OTHER FAMILY MEMBERS ARE EQUAL AND IN ALL THE FAMILY THERE WAS O NLY ONE 44 TIJORI AT THAT TIME AND NO OTHER TIJORI. HENCE THE FATHER USED TO LIKE OR ALLOW ALL THE FAMILY MEMBERS TO KEEP THEIR GOLD, SILVER OR CASH IN COMMON TIJORI FOR THE SAFETY INSTEAD OF VAR IOUS PLACE. THAT IS WHY IN THE STATEMENT SH. AMIT AND SUNIL STA TED THAT GOLD OF 5-6 KG, SILVER 100 KG AND CASH OF 1.5 TO 2 LACS ONLY BELONGS TO THEM I.E OF FOUR BROTHERS AND THE DEPARTMENT NEVER STATED TO THEM WHILE RECORDING THEIR STATEMENT THAT IN COMMON TIJORI GOLD OF 14858.360 GM, SILVER OF 181.921 KG AND CASH OF 8 ,41,270/- HAS BEEN FOUND IN PLACE OF GOLD OF 5-6 KG, SILVER 100 KG AND CASH OF 1.5 TO 2 LACS ONLY AS YOU ARE CLAIMING. WHEN THESE FACTS CAME TO THE NOTICE IN VARIOUS FAMILY MEMBERS AND SH. DHANRA JJI THEN ALL THE FAMILY MEMBERS DECIDED TO DISCLOSE THE UNDISCLO SED GOLD, SILVER, CASH AND OTHER INVESTMENT IN THEIR RETURN W ITH THE MUTUAL CONSENT OF FAMILY MEMBERS AND FATHER. THEREFORE THE AO AS WELL AS CIT(A) RELIED UPON ONLY ON THOSE STATEMENTS WHICH FAVOUR IN THE DEPARTMENT AND NOT CONSIDERED THE STATEMENTS IN FAVOUR OF THE ASSESSEE I.E HE REL IED ON CHOOSE AND PICK BASIS. THE SETTLED LEGAL POSITION IS THAT A STATEMENT SHOULD BE READ IN ITS ENTIRETY OR WHOLE NOT CHOOSE OR PICK, WHICH IS ILLEGAL AND AGAINST THE PRINCIPAL OF LAW. 11. REGARDING THE SURRENDER LETTER DT. 29.05.2002 WE W OULD LIKE TO SUBMIT THAT THIS LETTER WAS SIGNED ONLY BY THREE BROTHERS AND NOT BY ALL FAMILY MEMBER OR FOUR BROTHERS AND IN TH AT LETTER IT IS WRITTEN THAT WHATEVER UNDISCLOSED CASH, GOLD, SILVER FOUND DURING THE SEARCH AT OUR . OUT OF THEM WE SURRENDER FOLLOWING UNDISCLOSED INCOME FOR TAX TO THE INCOME TAX DEPART PMENT AND 45 READY TO PAY TAX AS PER LAW. HOWEVER THE REVENUE FA ILED TO UNDERSTAND THIS SURRENDER IN TRUE PERSPECTIVE OR SE NSE AND PROCEED ON HIS OWN WHIMS AND SENSE. BECAUSE IN THIS LETTER SINGED PERSON NEVER STATED THAT IN WHAT MANNER THEY WILL GIVE TAX ON THIS UNDISCLOSED INCOME, I.E. WHETHER IN THE HANDS OF THREE SINGED PERSON OF LETTER (VIRENDRA, AMIT, SUNI L) OR IN THE HAND OF FOUR BROTHERS(PAWAN, VIRENDRA, AMIT, SUNIL) OR IN THE HAND OF ALL BROTHERS AND FATHERS OR IN WHAT INDIVID UAL AMOUNT IN THEIR HAND. IF ALL THESE THING IS NOT BEING CLEARED FROM THE LETTER THAN HOW THE AO CAN REACHED ON THE CONCLUSION THAT THIS UNDISCLOSED INCOME BELONGS ONLY TO FOUR BROTHERS NA MELY SH. PAWAN, VIRENDRA, AMIT AND SUNIL NOT TO ALL EIGHT BR OTHERS AND FATHER. IN THE LETTER THE WORDS WE AND OUR INDICATES TO ALL EIGHT BROTHERS AND FATHER AND IT IS PROVED FROM THE RETURN FILED U/S 158BC BY ALL OF THEM WHERE ALL THE SURRENDERED UNDISCLOSED INCOME IN THAT LETTER HAD BEEN SHOWN AND CONSIDERED WHICH WERE ITSELF A STRONG CONFIRMATION. AND ALL THE THESE FAC TS AND EXPLANATION HAVE NOT BEEN REBUTTED OR DISPROVED BY THE AO TILL DATE. 12. HENCE THE ADDITION MADE BY THE AO AND PARTLY SUSTA INED BY THE CIT(A) IN THE QUANTITY NOT IN AMOUNT ONLY ON T HE BASIS OF STATEMENTS DT. 28.05.2002 OF FEW PERSONS AND SURREN DER LETTER DT. 29.05.2002. IS ILLEGAL AND IT IS SETTLED THAT N O ADDITION CAN BE MADE ONLY ON THE BASIS OF STATEMENTS OR SURRENDER L ETTERS, WHEN THE SAME HAS NOT BEEN UNDERSTOOD IN TRUE PERSPECTIV E BY THE REVENUE AND WHEN THE ASSESSEE HAS RETRACTED OR FILE D EXPLANATION OR EVIDENCES IN REGARD THE STATEMENTS G IVEN IN 46 CONFUSION OR HEAT MOMENT OR IN DURESS OR PRESSURE, WHICH HAS NOT BEET REBUTTED OR DISPROVED BY THE AO. KINDLY RE FER VARIOUS DECISION ON THIS ASPECT. 13.1. IN THE CASE OF M. NARAYAN & BROS. V/S ACIT 243 CTR 588(MAD). IT HAS BEEN HELD THAT ADDITION ON THE BASIS OF STATEMENT RECORDED DURING THE SEARCH ASSESSEE OFFE RED RS. 3LAKHS AS UNACCOUNTED INCOME ON THE FIRST DAY OF SE ARCH AT HIS PREMISES AND ANOTHER SUM OF RS. 4 LAKHS ON THE SECO ND DAY OF THE SEARCH- HOWEVER IN THE COURSE OF ASSESSMENT PRO CEEDINGS, ASSESSEE RETRACTED THE STATEMENT MADE ON THE SECOND DAY OFFERING THE ADDITIONAL INCOME OF RS. 4 LAKHS AO REJECTED THE SAID PLEA AND MADE ASSESSMENT ON THE BASIS OF BOTH THE CONFESSIONAL STATEMENTS GIVEN BY THE ASSESSEE- NOT JUSTIFIED THOUGH THE STATEMENT RENDERED AT THE TIME OF SEARCH MAY BE USED IN EVIDENCE IN ANY PROCEEDINGS THAT BY ITSELF CANNOT BECOME THE SOLE MATERIAL TO REST THE STATEMENT, MORE SO WH EN THE ASSESSEE SEEKS TO WITHDRAW THE SAME BY PRODUCING MA TERIAL EVIDENCE IN SUPPORT OF SUCH RETRACTION- IT IS ALWAY S OPEN TO THE PERSON WHO MADE THE ADMISSION TO SHOW THAT THE STAT EMENT TO OFFER INCOME IS INCORRECT- ASSESSEE HAS EXPLAINED T HAT THE AMOUNT OFFERED ON THE SECOND DAY OF THE SEARCH WAS LOAN TAKEN BY HIM FROM RELATIONS WHO WERE ALREADY ASSESSED TO ON THE SAID AMOUNT- THUS ONCE THE ASSESSEE HAD EXPLAINED HIS ST ATEMENT AS INCORRECT IN THE CONTEXT OF THE MATERIAL PRODUCED B Y HIM, THE TRIBUNAL WAS NOT JUSTIFIED IN ITS CONCLUSION THAT T HE STATEMENT MADE BY THE ASSESSEE CLOTHED THE ASSESSMENT WITH LE GALITY- THAT APART, THE CASE OF THE ASSESSEE ALSO STANDS SU PPORTED BY 47 CIRCULAR NO. F-NO. 286/2/2003-IT(INV.), DT. 10 TH MARCH, 2003, WHEREIN THE CBDT HAS GIVEN CATEGORICAL DIRECTIONS T O THE DEPARTMENTAL OFFICERS THAT UNDUE EMPHASIS SHOULD NO T BE PLACED ON RECORDED STATEMENTS-THEREFORE, CIT(A) WAS JUSTIF IED IN ACCEPTING THE ASSESSEES CASE AND DELETING THE ADDI TION OF RS. 4 LAKHS. HERE IS THE SAME POSITION IN THIS CASE ALSO AS THE AO MADE THE ADDITION ON THE BASIS OF STATEMENT ON THE DAY O F SEARCH DT. 28.05.2002 AND OFFERING LETTER ON THE SECOND DAY OF SEARCH DT. 29.05.2002. HERE ALSO ASSESSEE EXPLAINED THE UNDISC LOSED INCOME AND OFFERED FOR TAX IN THE HAND OF THE FAMILY MEMBE R. 13.2. IN THE CASE DCIT V/S PRAMUKH BUILDERS 115 TTJ (AHD) 330 IT HAS BEEN HELD THAT ADDITION ON THE BASIS OF ST ATEMENT U/S 132(4)- THERE BEING NO SPECTRA OF EVIDENCE REGARDIN G UNDISCLOSED INCOME, ADDITION MADE ONLY ON THE BASIS OF STATEMEN T OF MANAGING PARTNER OF THE ASSESSEE U/S 132(4), GIVEN IN A STATE OF CONFUSION AND LATER RETRACTED, COULD NOT BE SUSTAIN ED EITHER IN PART OR AS A WHOLE- THERE MAY NOT BE ANY DURESS ALS O, BUT EXISTENCE OF CONFUSION CANNOT BE RULED OUT AND THE REVISION OF THE EARLIER STATEMENT DOES NOT REFLECT APPLICATION OF MIND BUT A STATE OF COMPOUNDED CONFUSION ONLY. 13.3 IN ACIT V/S DR. RAJ. DHARIWAL 63 DTR 113(JD)(TRB.) HELD THAT STATEMENT MADE BY THE ASSESSEE U/S 132(4) SURR ENDERING THE IMPUGNED AMOUNT COULD NOT HAVE BEEN TAKEN AS BA SIS FOR MAKING ADDITION TOWARDS UNEXPLAINED INVESTMENT IN P LOTS BY THE ASSESSEE PARTICULARLY WHEN NO EVIDENCE OF UNDISCLOS ED PAYMENT HAS BEEN FOUND AT THE TIME OF SEARCH. THE SAID CASE AFFIRMED BY 48 THE HONBLE RAJ. HIGH COURT KINDLY REFER CIT V/S DR. RAJ. DHARIWAL 63 DTR 83(RAJ.) 13.4 ALSO REFER CIT V/S RAM DAS MOTOR TRANSPORT 238 ITR 177(AP), ACIT VS. SATYA NARAYAN AGARWALLA (2002) 255 ITR (AT) 69 (KOL) A ND PAUL METHEW AND SONS V/S CIT 263 ITR 101(KER) 13.5 IT HAS BEEN HELD BY THE HONBLE SUPREME COURT IN PULLANGODE RUBBER PRODUCE CO. LTD. VS. STATE OF KE RALA & OTHERS 91 ITR 18 (SC): SUCH ADMISSION IS AN EXTREMELY IMPORTANT PIECE OF EVIDENCE BUT IT CANNOT BE SAID THAT IT IS CONCLUSIV E. IT IS OPEN TO THE ASSESSEE WHO MADE THE ADMISSION TO SHOW THAT IT IS INCORRECT AND THE ASSESSEE SHOULD BE GIV EN A PROPER OPPORTUNITY TO SHOW THAT THE BOOKS OF ACCOUN TS DO NOT DISCLOSE THE CORRECT STATE OF FACTS. 14.1.1. NO LOSS TO REVENUE AND DOUBLE TAX OF SAME I NCOME: FURTHER WE HAVE TO SUBMIT THAT THERE WAS NO LOSS IN CURRED TO THE REVENUE FOR NON DISCLOSURE OF FULL UNDISCLOSED INCO ME IN THE HAND OF ASSESSEE. BECAUSE THE SAME UNDISCLOSED INCOME AD MITTEDLY DECLARED IN THE HAND OF OTHER BROTHERS AND FATHERS. THE ASSESSEE HAD ALREADY EXPLAINED THE REASONS FOR THE SAME TO T HE AO AND AS ABOVE. IT IS NOT THE CASE OF THE REVENUE THAT THE T AX RATE OF THE FIRMS OR IN THE CASE OF OTHER PERSONS ARE LOW THEN TO THE ASSESSEE AND IN CALCULATION THERE COMES ANY DIFFER ENCE. AND IT 49 WAS ALSO NOT THE CASE OF THE AO THAT THE TAX HAS NO T PAID ON SUCH UNDISCLOSED INCOME. 14.1.2. THE AO TAXED THE SAME INCOME DOUBLE/TWICE ONE IN T HE HANDS OF ASSESSEE AND ANOTHER IN THE HAND OF OTHER FAMILY MEMBERS, WHEN THE AO OF ALL PERSONS ARE SAME. AND I N LAW THERE IS NOWHERE PROVIDED THAT ONE INCOME CAN BE TAXED TW ICE. IF THE AO WANTED TO TAX THE UNDISCLOSED INCOME IN THE HAND S OF THE ASSESSEE, HE SHOULD NOT HAVE TAXED THAT PART OF INC OME IN THE HANDS OF OTHER FAMILY MEMBERS. THE AO NOWHERE DENIE D THE FACTS OF DOUBLE TAX, COMMON SEARCH AND SEIZER WAS T HERE, REVENUE LOSS HAS NOT BEEN BROUGHT ON RECORD DUE TO DISTRIBUTION OF ASSETS/UNDISCLOSED INCOME, BUT THE AO HAS IGNORE D ALL THESE BEFORE MAKING THE ADDITION IN THE HANDS OF ASSESSEE , WHICH IS ILLEGAL, BAD IN LAW AND AGAINST THE PRINCIPAL OF NA TURAL JUSTICE AND TAXATION. 14.2.1. IT IS FUNDAMENTAL RULE OF TAXATION THAT UNLESS PRO VIDED, SAME INCOME CANNOT BE TAXED TWICE. KINDLY REFER LAXMIPAT SINGHANIA V/S CIT 72 ITR 291(SC), 14.2.2. CIT V/S M.P. JAYARAM 100 TAXMAN 544(KAR), G YAN CHAND JAIN V/S ITO 73 TTJ 859(JD). GEM PALACE V/S C IT 168 ITR 543(RAJ.) ., RAMANLAL MADAN LAL V/S CIT 116 ITR 657(CAL.), JAIN BROTHERS V/S UOI 77 ITR 107(SC), FURTHER THE H ONBLE ITAT IN THE GROUP CASE OF M/S GOWADIA JEWELLERS IN ITA N O. 776/JU/05 AT PAGE 8-PARA 15 DT. 30.09.2008 DELETED CERTAIN ADDITIONS, MAINLY ON THE REASONING THAT SUCH INCOME WAS ALREADY 50 DISCLOSED IN THE HANDS OF THE WORKING PARTNER AND AS SUCH SAME INCOME CANNOT BE BROUGHT TO TAX AS UNDISCLOSED INCO ME OF THE FIRM. KINDLY ALSO REFER LATEST DECISION OF THIS HO NBLE BENCH IN THE CASE OF AO V/S SH. BHIM SINGH DEVRA IN ITA NO. 79/JU/11 DT. 29.11.2012. 14.2.3. IN THE CASE OF CIT V/S SMT. REKHA BAI 289 ITR 351(MAD) IT HAS BEEN HELD THAT ASSESSEE, HER HUSBAND AND HI S HUF HAVING BEEN ASSESSED TO TAX IN THE PAST AND ASSESSEES SON HAVING ALSO FILED HIS RETURN, TRIBUNAL WAS JUSTIFIED IN HOLDING THAT THE UNDISCLOSED INCOME DISCOVERED DURING THE SEARCH BEL ONGED TO THE ASSESSEE HER HUSBAND, HIS HUF AND HER SON AND DIVID ED BETWEEN THEM. 14.2.4. IN THE CASE OF SAT PAL PANDIT & CO. V/S ACIT 61 TTJ(ASR) 602 IT HAS BEEN HELD THAT AMOUNT ALREADY BEEN TAXED IN THE HANDS OF ANOTHER PERSON ON SUBSTANTIVE BASIS , CANNOT BE ASSESSED IN THE HANDS OF THE ASSESSEE AGAIN, PARTIC ULARLY WHEN AO HAS NOT CONCLUSIVELY PROVED THAT THE TRANSACTION WAS BENAMI ON BEHALF OF THE ASSESSEE. HERE IS THE SAME POSITIO N. ALSO REFER CIT V/S TRUSTEES OF MISS GARGIBEN & ORS. 130 ITR 47 9(BOM)., ITO V/S VINOD KUMAR SONI 258 ITR 717(DEL)., CIT V/S MRS. BANNO E. COSWAJI 147 ITR 744(MP). ALSO REFER DECI SION OF YOUR HONOR IN THE CASE OF ONE OF BROTHER OF THIS GR OUP NAMELY ASHOK KUMAR GOWADIA IN APPEAL NO. 178/09-10 WHEREIN YOUR HONOR STATED THAT CONSIDERING THESE FACTS AND CIRCU MSTANCES THAT THE INTEREST RECEIVED ALONGWITH REFUND HAS BEEN SHO WN BY THE FIRM, MAKING THE ADDITION OF SAME AMOUNT IN THE HAN DS OF 51 APPELLANT PARTNER WILL LEAD TO DOUBLE ADDITION, WHI CH WILL NOT BE JUSTIFIED. 14.2.5. IN MEHMOOD PASHA V/S DCIT (INV.) 44 DTR 55( KAR) IT HAS BEEN HELD THAT TRIBUNAL HAS NOT TAKEN IN TO CONSIDERATION THE EVIDENCE PRODUCED BY THE ASSESSEE IN THE FORM OF AS SESSMENT ORDER OF THE ASSESSEES BROTHER. THE ORDER IS MADE U/S 158BD, WHEREIN A SUM OF RS. 2,75,000/- IS SHOWN AS THE UND ISCLOSED INCOME OF THE ASSESSEES BROTHER AND ACCORDINGLY AN ADDITION WOULD HAVE BEEN MADE IN THE SAID ASSESSMENT ORDER. THE TRIBUNAL OUGHT TO HAVE TAKEN THIS ASPECT IN TO CONS IDERATION AND THE FACT THAT THE SAID AMOUNT WAS OFFERED FOR TAX A ND ACCORDINGLY OUGHT TO HAVE DELETED THE ADDITIONS MAD E TO THE INCOME OF THE ASSESSEE. SINCE THE TRIBUNAL HAS NOT TAKEN THE MATERIAL EVIDENCE WHICH HAS BEEN PRODUCED BY THE AS SESSEE AND ALSO HAS NOT APPLIED ITS MIND TO THE FACTS AS TO WH ETHER THE ADDITION IF SO MADE IN THE CASE OF THE ASSESSEE, IT WOULD AMOUNT TO DOUBLE TAXATION. HERE IS THE SAME POSITION THE AO HAS NOT TAKEN IN TO CONSIDERATION THAT OTHER FAMILY MEMBER HAS ALREADY BEEN OFFERD THE UNDISCLOSED INCOME. 15. FURTHER OUR SUBMISSION ON THE ALLEGATIONS OF TH E AO ARE AS UNDER: 15.1 THE AO STATED THAT THE DIVISION OF THE FAMILY MEMBE RS OF GOVADIA GROUP HAD HAPPENED BEFORE BLOCK PERIOD AND MEMBERS OF GOWADIA FAMILY WERE HAVING THEIR SPECIFIED SHARE IN EACH OF THE ASSETS. IN THIS REGARD IT IS SUBMITTED THAT HER E DIVISIONS 52 MEANS KITCHEN DIVIDETIONS NOT RELATIONS DIVIDETIONS AND DIVISION MEANS NOT TO DIVISION OF ALL ASSETS AND IT MEANS NO T THAT AFTER DIVISION THE FATHER SHALL NOT ALLOW TO OTHER SONS T O KEEP THEIR GOLD/SILVER/CASH IN HIS COMMON TIJORI FOR SAFETY PU RPOSE. AND IT IS NOT NECESSARY THAT A FATHER ASK TO OTHER SON BEF ORE DOING SO AND WHEN ALL THE EIGHT BROTHERS HAS NEITHER DISPUTE D THE SAME NOR DENIED ABOUT THEIR ASSETS KEPT IN COMMON TIJORI THAN HOW THE AO DEEMED THE SAME BELONGING TO ONLY FOUR BROTH ERS WHEN HE HAS NEITHER ASKED NOR REBUTTED THE SAME WITHOUT BRINGING ANY COGENT MATERIAL OR EVIDENCE ON RECORD. AN ALLEGATIO N REMAINS A MERE ALLEGATION UNLESS PROVED. IT IS SETTLED LEGAL POSITION THAT NO ADDITION CAN BE MADE ON ASSUMPTION, PRESUMPTION AND SUSPICION, SUSPICION MAY BE STRONG BUT CANNOT TAKE THE PLACE OF REALITY, ARE THE SETTLED PRINCIPLES KINDLY REFER DHAKESHWARI COTTON MILLS 26 ITR 775 (SC) ALSO REFER R.B.N.J. NA IDU V/S CIT 29 ITR 194 (NAG), KANPUR STEEL CO. LTD. V/S CIT 32 ITR 56 (ALL) . ALSO REFER CIT V/S KULWANT RAI 291 ITR 36( DEL). WHERE HELD THAT IT IS WELL SETTLED LEGAL POSITION IN RESPECT I NCOME TAX ASSESSMENT PROCEEDING THAT ALTHOUGH STRICT RULE OF EVIDENCE ACT DO NOT APPLY IN ASSESSMENT PROCEEDING, ASSESSMENT C ANNOT BE MADE ON IMAGINATION AND GUESSWORK ALSO REFER DHIRAJLAL GIRDHARILAL V CIT (26 ITR 736 (SC), OMAR SALARY MOH ANMED SAIT V CIT (37 ITR 151) (SC), LEKCHABND BHAGAT AMBI CA RAM V CIT (37 ITR 285) (SC), CIT V NANDINI C. (1989) 230 ITR 679, 689 (CAL). IT WAS THE COMMON PRACTICE OF THE FAMILY TO KEEP TH E ORNAMENTS IN SAFE CUSTODY WITH THE FATHER SH. DHANR AJJI AT THEIR RESIDENCE FOR MENTAL SATISFACTIONS ALSO. 53 15.2 . THE PARTNER STATED IN THEIR STATEMENT THAT NEITH ER THE CASH, STOCK OF GOLD AND SILVER JEWELLERY BELONGING TO FIRM LYING AT ANY PLACE OR WITH ANY OTHER PERSON NOR THE CASH, ST OCK OF GOLD AND SILVER JEWELLERY BELONGING TO OTHER PERSON LYIN G AT FIRM. HERE THE AO AGAIN FAILED TO UNDERSTOOD THE STATEMEN T IN THEIR TRUE PERSPECTIVE. BECAUSE THE PARTNERS OR THEIR FAM ILY MEMBERS IS NOT THE OTHER PERSON, FOR THE FIRM THEY ARE OWNE R OF THE FIRMS. THERE WERE OTHER PERSONS MEANS, THE PERSON O THER THAN TO PARTNERS OR THEIR FAMILY AND OTHER PLACE MEANS, PLA CE BELONGING TO OTHER THAN TO PARTNERS OR THEIR FAMILY. FURTHER ASSESSEE SH. VIRENDRA GOWADIA IN ANS TO Q NO. 24(CPB43) REGARDIN G SHORT OF GOLD STOCK AT SHOP STATED THAT I DONT KNOW, PERHAP S HAS TAKEN AT HOME, BECAUSE THERE IS THEFT/STOLEN AT SHOP. HENCE GOLD OF 9457 GMS AT SHOP AND 370 GMS GOLD AT HOME. THIS PROVES T HE CONTENTION OF THE ASSESSEE AND ITS MODUS OPERANDI O F BUSINESS AS STATED. 15.3 THE ASSESSEES CLAIM IN RESPECT OF STOCK OF GOLD AND SILVER ORNAMENTS CLAIMED TO BE BELONGING TO KARIGARS AND N OTED IN THE KARIGAR BAHIS CANNOT BE ACCEPTED AS CORRECT IN THE LIGHT OF BASIC PRINCIPLES OF ACCOUNTING. IT IS AGAINST UNBELIEVABL E THAT KARIGARS USED TO KEEP/DEPOSIT THEIR GOLD/SILVER WITH THE ASS ESSEE I.E EMPLOYER. HERE THE AO PROCEEDED ON HIS OWN ASSUMPTI ON, PRESUMPTION AND SUSPICION WITHOUT REBUTTING THE EVI DENCE AVAILABLE ON THE RECORD IN THE SEIZED MATERIAL AND THE HONBLE CIT(A) IN FIRST ROUND THE VERIFIED SAME FROM THE BO OKS OF ACCOUNTS AND SEIZED RECORD AND IN THE SAME GROUP CA SE NAMELY M/S GOWADIA JEWELLERS IN ITA NO. 776/JU/2005 DT. 30 .09.2008 54 THE HONBLE ITAT ITSELF OBSERVED THAT WE FIND NO RE ASON TO INTERFERE WITH THE DECISION REACHED BY THE LD. CIT( A) AS HE DELETED THE ADDITION AFTER BEING SATISFIED THAT TH E RECEIPTS OF THE ALLEGED GOLD FROM THE CUSTOMERS STOOD DULY RECORDED IN THE MAZDOORI REGISTER SEIZED AND INVENTORIED AT ANN-A-24 TO THE PANCHNAMA, WHICH HAS TO BE TAKEN AS A DIRECT EVIDEN CE TO SUPPORT THE CLAIM OF THE RESPONDENT ASSESSEE AND T HE AO NEITHER DENIED THIS FACTS NOR REBUTTED THE SAME BY BRINGING ANY COGENT MATERIAL AND EVIDENCE ON RECORD AND PROCEEDE D ON HIS OWN ASSUMPTIONS, PRESUMPTION AND SUSPICION AS HE ST ATED IT IS AGAINST UNBELIEVABLE THAT KARIGARS USED TO KEEP/DEP OSIT THEIR GOLD/SILVER WITH THE ASSESSEE I.E EMPLOYER AND AS S TATED ABOVE BY US THAT NO ADDITION CAN BE MADE ON SUSPICION AS STATED ABOVE AND ACCEPTED BY THE HONBLE ITAT. 15.4. THE FRESH CHART AS WELL AS ANNEXURE -5 & 6 IS VAGU E AND DOES NOT SPELL OUT ANY FACTS AS TO QUANTUM OF DISC LOSURE IN PARTICULAR HAND AND BASIS THEREOF. THE ASSESSEE COU LD NOT GIVE YEAR WISE BIFURCATION OF THIS HEAD WISE DISCLOSURE. THE LD. AO STATED SO WITHOUT CONSIDERING OUR EXPLANATIONS /EVI DENCES/ MATERIALS/ DIFFICULTIES ETC. 15.5. THE AO NOTED THAT THE CLAIM OF CBDTS NOTIFICATION DT. 11.05.1994 IS NOT ACCEPTABLE BECAUSE SUCH BENEFIT I S AVAILABLE ONLY IN A CASE WHERE THE ASSESSEE IS NEITHER ASSESS ED TO WEALTH TAX OR DECLARED SUCH QUANTITIES TO THE INCOME TAX D EPARTMENT OR DID NOT MAINTAIN ANY ACCOUNTS IN THAT REGARD, IS RE QUIRED TO BE VERIFIED AS IN A CASE WHERE METICULOUS ACCOUNTS ARE MAINTAINED, 55 SUCH BENEFIT MAY NOT BE AVAILABLE TO THE ASSESSEE. (VII) IT NEITHER EXPLAINED THE SOURCE OF INVESTMENT EXCEPT S TATING THAT EXPLAINABLE NOR SPECIFIED WHICH FAMILY MEMBER OWNS OR HOW MUCH QUANTITY IS/WAS OWNED BY PARTICULAR PERSON AND SOURCES THEREOF. IN THIS REGARD WE HAVE TO SUBMIT AS UNDER AT PRESENT IT IS THE SETTLED LAW BY NOW THAT NO ADD ITION OF GOLD ORNAMENTS FOUND CAN BE MADE, TO THE EXTENT OF THE PRESCRIBED LIMIT IN THE CBDT INSTRUCTION NO. 161 DT. 11.05.94 AS HELD IN CIT V/S KAILASH CHAND SHARMA (2005) 198 CTR 201(RAJ.). ALSO SMT. PATI DEVI V/S 240 ITO 727 (KER.) AND SMT. KAML ESH DUTTA V/S ACIT 69 ITD 218 (CH.). DR. SUSHIL RASTOGI V/S D IRECTOR INVESTIGATIONS OF INCOME TAX DEPARTMENT & ORS 260 I TR 249(ALL) ALSO REFER CIT V/S M.S. AGRAWAL (HUF) 11 D TR 169(MP)(2008) WHEREIN IT HAS BEEN HELD THAT IN ABSENCE OF ANY MATERIAL FOUND DURING SEARCH HAVING NEXUS WITH UNDI SCLOSED INCOME, NO ADDITION COULD BE MADE IN BLOCK ASSESSME NT. FURTHER TRIBUNAL WAS JUSTIFIED IN DELETING ADDITION ON ACCO UNT OF JEWELLERY HAVING REGARD TO CBDT INSTRUCTION NO. 16 16 DT. 11 TH 11.05.1994. ALSO REFER VARIOUS OTHER DECISIONS P.C. MUNDRA V/S ACIT 80 TTJ 945 (JP), JAI KUMAR JAIN V/S ACIT 99 TTJ 744(JP), D CIT V/S SMT. JAYITA BOSE 3 SOT 525(KOL.) DCIT V/S SH. CHAND MAL SONI 6 DTR 571(JD), ITO V/S MANILAL S. DAVE 70 TTJ 801(AHD .) AND IDEAL PLOT VIKRI KENDRA & ORS. V/S ACIT 74 ITD 117( PUNE) TM. 56 HENCE IT IS VERY SETTLED PRINCIPAL THAT NO ADDITION CAN BE MADE ON ACCOUNT OF GOLD JEWELLERY TO THE LIMIT GIVEN IN THE SAID CBDT INSTRUCTION NO. 1916 DT. 11.05.1994. IN THE CASE OF ASHOK CHADDHAV/S ITO 202 TAXMAN 395/69 DTR 82 (DEL). IT HAS BEEN HELD THAT DURING SEARCH AT ASSESSEES PREMISES 906.900 GMS JEWELLERY WAS FOUND ASSESSEE E XPLAINED THAT HE WAS MARRIED 25 YEARS BACK AND JEWELLERY WAS RECEIVED BY HIS WIFE IN FORM OF STREE DHAN OR ON OTHER OCCASI ON, SUCH AS, BIRTH OF A CHILD ETC. THE HIGH COURT HELD THAT COLL ECTING JEWELLERY OF 900.600 GMS BY A WOMEN IN A MARRIED LI FE OF 25 YEARS IN THE FORM OF STREE DHAN OR OTHER OCCASION IS NOT ABNORMAL HENCE THE ASSESSING OFFICER WAS UNJUSTIFIE D TREATING ONLY 400 GMS AS REASONABLE AND TREATING REMAINING J EWELLERY AS UNEXPLAINED, ACCORDINGLY THE ADDITION WAS DELETED. FURTHER THE ASSESSEE IS NOT A WEALTH TAX ASSESSEE A ND NO PAPER RELATING TO WEALTH TAX OF ASSESSEE HAS FOUND IN THE SEARCH. HOWEVER THE AO HAS IGNORED THE SAME AND THE LD. CIT (A) HAS RIGHTLY ACCEPTED THE SAME. MORE PARTICULARLY WHEN T HIS ISSUE IS NOW COVERED AS ABOVE SIMILARLY, THE CREDIT OF THE DECLARATION OF UNDISCLOSED GOLD OF 3993 GMS IN THE NAME OF EIGH T PERSON OUT OF WHICH THE ASSESSEES GOLD OF 500 GM MADE IN GOLD BONDS UNDER THE GOLD BONDS SCHEME, 1993 OR DECLARATION OF UNDISCLOSED GOLD MADE IN VDIS WERE NOT CONSIDERED AND ALLOWED, THOUGH AS PER LAWS NO QUESTIONS CAN BE RAISED FOR EXPLANATION S OF SOURCES ON OF ACQUISITION THEREOF OF GOLD BOND SCHEME ACT 1 993, 57 PRINCIPALLY ADMITTED BY THE AO STILL HE NOT CONSIDE RED AND HE HAS VERY CONVENIENTLY USED THE SAME AS A BENCHMARK IN D ETERMINING THE BUSINESS AFFAIRS AND THE POTENTIAL OF EARNING C APACITY OF THE ASSESSEE AND ITS FAMILY MEMBERS WHICH IS AGAINST TH E PRINCIPAL OF LAW. THE EVIDENCES OF SUCH DECLARATION WERE ADMITTE DLY ALREADY AVAILABLE ON RECORDS. THEREFORE, THE GOLD BONDS AC QUIRED BY A PERSON UNDER THE GOLD BOND SCHEME 1993 ARE EXEMPT I N THE HANDS OF SUCH PERSON FROM ANY ENQUIRY ABOUT THE SOU RCE OF INVESTMENT UNDER THE I. T. ACT AND ALSO UNDER TH E WEALTH TAX ACT. INTEREST HAS BEEN ALLOWED @ 40/- PER 10 GMS FO R 5 YEARS ON SUCH BONDS. THE INTEREST AND CAPITAL GAIN ARE ALSO EXEMPT AS PER SCHEME. THE IMMUNITY AVAILABLE TO A SUBSCRIBER OF S UCH GOLD BONDS ARE AS PER SEC. 4 OF GOLD BONDS SCHEME, 1993. PHOTOCOPY OF RELEVANT PROVISIONS HAS ALREADY FURNISHED AT THE TIME OF BLOCK ASSESSMENT ALSO ENCLOSED HEREWITH. HENCE WE REQUES T YOUR GOOD SELF TO ACCEPT THE EXPLANATIONS IN THEIR TRUE PERSP ECTIVES. 16. THEREFORE IN VIEW OF THE ABOVE SUBMISSION AND LEGA L POSITION THE APPEAL OF THE REVENUE MAY KINDLY BE DISMISSED A ND CO/APPEAL OF THE ASSESSEE ALLOWED AND ENTIRE ADDITI ON MAY KINDLY BE DELETED IN FULL. THE ASSESSEE HIMSELF HAS DECLARED RS.13,50,000/- O N THIS ACCOUNT IN THE RETURN OF UNDISCLOSED INCOME FILED W HICH IS VERIFIABLE FROM THE CHART ATTACHED. HOWEVER BOTH T HE LOWER AUTHORITY HAVE CONSIDERED THIS WHILE MAKING THE EST IMATIONS. 58 HONBLE ITAT HAS ALSO DIRECTED TO AO ON EARLIER OCC ASION TO ENSURE THAT THE PART OF THE UNDISCLOSED INCOME ON T HIS ACCOUNT DECLARED IN THE RETURN OF UNDISCLOSED INCOME, IS NO T BROUGHT TO TAX AGAIN TO THAT EXTENT TO AVOID DOUBLE TAXATION . THEREFORE IN VIEW OF THE ABOVE SUBMISSIONS THE ADDI TIONS SO MADE MAY KINDLY BE DELETED IN FULL. 3.2 ON THE OTHER HAND LD. D.R. HAS RELIED ON THE OR DERS OF THE AUTHORITIES BELOW. 3.3 AFTER CONSIDERING RIVAL SUBMISSIONS AND THE LEG AL POSITION, WE HAVE TO ALLOW THE GROUNDS RAISED IN THE CROSS OBJEC TION AND DISMISS THE GROUND RAISED IN THE APPEAL OF THE REVENUE. THE ASS ESSEE HIMSELF HAS DECLARED A SUM OF RS. 13,50,000/- ON THIS ACCOUNT I N THE RETURN OF UNDISCLOSED INCOME FILED WHICH IS VERIFIABLE FROM T HE ABOVE EXTRACTED CHART. IN THE FIRST ROUND THE APPELLATE TRIBUNAL HA D DIRECTED THAT THE PART OF THE UNDISCLOSED INCOME ON THIS ACCOUNT DECL ARED IN THE RETURN OF THE BLOCK SHOULD NOT BE BROUGHT TO TAX AGAIN TO THAT EXTENT TO AVOID DOUBLE TAXATION. KEEPING IN VIEW THE EXPLANATION OF THE ASSESSEE WE HAVE TO DELETE THE IMPUGNED ADDITION IN THEIR ENTIR ETY. THIS LEADS TO ALLOWANCE OF GROUND NOS. 3 AND 4 OF THE CROSS OBJEC TION AND CANNOT ALLOW GROUND NO. 2 AND 3 OF THE REVENUES APPEAL. 59 4. GROUND NO. (5) OF CROSS OBJECTION IS JUST EXPLAN ATORY AND GROUND NO. (6) IS REGARDING CHARGING OF INTEREST. BOTH THE GROUNDS GROUND NO. (5) STANDS EXPLAINED ALONGWITH GROUND NO. 3 AND 4. WHEREAS GROUND NO. (6) CANNOT BE ALLOWED AS CHARGING OF INTEREST UNDER THE ACT IS MANDATORY BUT CONSEQUENTIAL RELIEF IS LOGICALLY AVA ILABLE TO THE ASSESSEE. THEREFORE, CROSS OBJECTION IS PARTLY ALLO WED. 4.1 IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED AND THE CROSS OBJECTION IS PARTLY ALLOWED. VIRENDER KUMAR GOWADIA IT(SS)A NO. 07/JODH/2012 (ASSESSEE) IT(SS)A NO. 08/JODH/2012(DEPARTMENT) THESE ARE CROSS APPEALS FIELD AGAINST THE ORDER OF LD. CIT(A), CENTRAL, JAIPUR, DATED 12/03/2012. 5. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS :- 1. THAT THE IMPUGNED ASSESSMENT ORDER U/S 158BC(C)/158BB R.W.S.143(3)/254 DATED 30.09.2012 IS BAD IN LAW AND ON FACTS OF THE CASE FOR WANT OF JURISDI CTION AND FOR VARIOUS OTHER REASONS AND HENCE THE SAME; MAY K INDLY BE QUASHED. 60 2.RS. 18,267/-: THE ID. CIT(A) HAS GROSSLY ERRED IN LAW AS WELL AS ON FACTS OF THE CASE IN SUSTAINING THE ADD ITION OF RS.18,267/- ON ACCOUNT FOUND OF RS. 2,10,317/- (1/4 TH SHARE OF RS. 8,41,270/-) IN COMMON TIJORI ALLEGED BELONGING OF FOUR BROTHERS OUT OF WHICH RS. 1,75,00 0/- HAS BEEN DECLARED BY THE ASSESSEE IN THE BLOCK RETURN A S HIS UNDISCLOSED INCOME, THEREBY THE AO FURTHER MADE THE ADDITION OF RS. 35,317/- AND CIT(A) SUSTAINED THE S AME AT RS.18,267/- IGNORING THAT THE SAME INCOME HAS ALREA DY DECLARED AND TAXED IN THE OTHER FAMILY MEMBERS. HEN CE THE ADDITION SO MADE BY THE AO AND PARTLY CONFIRMED BYCIT(A), BEING CONTRARY TO THE PROVISIONS OF LAW AND FACTS, HENCE THE SAME MAY KINDLY BE DELETED IN FULL . 3. RS. 21,008:- THE ID. CIT(A) HAS GROSSLY ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN SUSTAINING THE ADDITION OF RS. 21,008/- ON ACCOUNT OF UNEXPLAINED INVESTMEN T IN GOLD JEWELLERY FOUND AT HIS OWN RESIDENCE AND UNEXP LAINED GOLD JEWELLERY AT RS. 16,39,,107/- [1/4 TH SHARE OF RS. 65,56,430/-] FOUND IN COMMON TIJORI OF ALLEGED FOUR BROTHERS TOTALING TO RS. 17,70,025/- OUT OF WHICH RS. 10,50,000/- HAS ALREADY BEEN DECLARED BY THE ASSESS EE IN THE BLOCK RETURN AS HIS UNDISCLOSED INCOME, THEREBY THE A.O. FURTHER MADE THE ADDITION OF RS. 7,20,025/- AN D THE LD. CIT(A) SUSTAINED THE SAME AT RS. 21,008/- IGNOR ING THAT THE SAME OR PART INCOME HAS ALREADY DECLARED AND TA XED IN THE OTHER FAMILY MEMBERS. HENCE THE ADDITION SO MADE BY AO AND PARTLY CONFIRMED BY THE CIT(A), BEIN G 61 CONTRARY TO THE PROVISIONS OF LAW AND FACTS, HE NCE THE SAME MAY KINDLY BE DELETED IN FULL. HOWEVER, AS PER CALCULATION THERE IS NO ADDITION IS REMAINED. 4. RS. 15,756/- : THE ID. CIT(A) HAS GROSSLY ERRE D IN LAW AS WELL AS ON THE FACTS OF THE CASE IN SUSTAINING THE ADDITION OF RS. 1,15,756/- ON ACCOUNT OF UNEXPLAINED INVES TMENT IN SILVER JEWELLERY, OUT OF THE UNEXPLAIN ED INVESTMENT IN SILVER JEWELLERY RS. 2,31,468/- (1/4T H SHARE OF RS. 9,25,873/-) FOUND IN COMMON TIJORI OF ALLEGE D OF FOUR BROTHERS, OUT OF WHICH RS. 75,000/- HAS ALREADY BEE N DECLARED BY THE ASSESSEE IN THE BLOCK RETURN AS HIS UNDISCLOSED INCOME, THEREBY THE AO FURTHER MADE THE ADDITION OF RS. 1,56,468/- AND CIT(A) SUSTAINED THE SAME AT RS. 1,15,756/- IGNORING THAT THE SAME OR PART INCOM E HAS ALREADY DECLARED AND TAXED IN THE OTHER FAMILY MEMB ERS. HENCE THE ADDITION SO MADE BY THE AO AND PARTLY CONFIRMED BY THE CIT(A), BEING CONTRARY TO THE PROV ISIONS OF LAW AND FACTS, HENCE THE SAME MAY KINDLY BE DELE TED IN FULL. 5. RS. 7,00,000/-. THE LD. CIT(A) HAS GROSSLY ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN SUSTAINI NG THE ADDITION OF RS. 7 LAKHS OUT OF RS. 11 LAKHS MADE BY THE A.O. ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE CONSTRU CTION IGNORING THE SPECIFIC DIRECTION GIVEN BY THE ITAT. HENCE THE ADDITION SO MADE BY THE AO AND PARTLY CONFIRMED BY THE CIT(A), BEING CONTRARY TO THE PROVISIONS OF LAW AND FACTS, 62 HENCE THE SAME MAY KINDLY BE DELETED IN FULL. 6. THE ID. CIT(A) HAS FURTHER ERRED IN SUSTAINING A LL ABOVE ADDITIONS AND CONFIRMING THE ACTION OF THE AO IN TAXING THE SAME INCOME TWICE ONE IN THE HANDS OF TH E ASSESSEE AND SECOND IN THE HANDS OF THE OTHER FAMIL Y MEMBERS, WHEN THE TOTAL UNDISCLOSED INCOME DECLARED BY THE WHOLE GROUP OR FAMILY MEMBERS WERE MORE THAN TH E UNDISCLOSED INCOME FOUND DURING THE COURSE OF SEARC H, BEING THE COMMON SEARCH OPERATION. 7 .THE ID. AO HAS GROSSLY ERRED IN LAW AS WELL AS O N THE FACTS OF THE CASE IN CHARGING INTEREST U/S 158BFA(1 ). THE APPELLANT TOTALLY DENIES IT LIABILITY OF CHARGING O F ANY SUCH INTEREST. THE INTEREST, SO CHARGED, BEING CONTRARY TO THE PROVISIONS OF LAW AND FACTS, MAY KINDLY BE DELETED IN FULL. 5.1 THE REVENUE HAS RAISED THE FOLLOWING GROUNDS :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN: 1. ALLOWING RELIEF OF RS. 17,050/- OUT OF UNEXPLAI NED CASH. 63 2. ALLOWING RELIEF OF RS. 7,48,832/- AND RS. 1,30,9 18/- IN RESPECT OF ADDITIONS MADE UNDER THE HEAD UNEXPLAINE D INVESTMENT IN GOLD ORNAMENTS AND PERSONAL GOLD JEWE LLERY RESPECTIVELY 3. ALLOWING RELIEF OF RS. 40,712/- OUT OF ADDITION OF RS. 2,31,468/- MADE AS ACCOUNT OF UNEXPLAINED INVESTMEN T IN SILVER ORNAMENTS. 4. RESTRICTING ADDITION TO RS. 7 LAKHS IN RESPECT O F UNEXPLAINED INVESTMENT IN CONSTRUCTION OF HOUSE. 5.2 AFTER HEARING BOTH SIDES, WE HAVE FOUND THAT GR OUND NO. 2, 3 AND 4 OF ASSESSEES APPEAL HAVE TO BE ALLOWED, AND GROU ND NO. 1 TO 3 OF REVENUES APPEAL HAVE TO BE DISMISSED IN THE SAME M ANNER AS WE HAVE DECIDED IN THE CASE OF ASSESSEES BROTHER SHRI SUNI L KUMAR, AS ABOVE. THE FACTS, THE EVIDENCE, AND THE SUBMISSIONS OF THE PARTIES ARE MUTATIS MUTANDIS IDENTICAL TO THAT OF SUNIL KUMARS CASE. T HEREFORE, WITH THE SIMILAR REASONING WE DO AS ABOVE. 5.3 GROUND NO. 1 OF ASSESSEES APPEAL WAS NOT PRESS ED, THEREFORE, IT IS DISMISSED AS SUCH. 6. GROUND NO. 5 OF ASSESSEES APPEAL AND GROUND NO. 4 OF REVENUES APPEAL ARE IN RELATION TO INVESTMENT IN RESPECT OF CONSTRUCTION OF THE 64 HOUSE. THE FACTS OF THIS ISSUE ARE THAT DURING THE COURSE OF ORIGINAL ASSESSMENT THE A.O. NOTICED FROM THE DOCUMENTS SEIZ ED FROM THE RESIDENCE OF THE ASSESSEE AND ANNEXURED AS A-1/1 [P AGES 1 TO 161] THAT THE ASSESSEE GOT A HOUSE CONSTRUCTED DURING THIS BL OCK PERIOD AND AS PER THESE DOCUMENTS THE TOTAL INVESTMENT CAME TO RS . 14,80,932. THE ASSESSEE FILED DETAILED REPLY TO EXPLAIN THE WRITIN GS ON THESE DOCUMENTS ON 2.4.2004 ALONGWITH A COPY OF REPORT OF THE REGISTERED VALUER [PB PAGES 52 TO 55]. THE REGISTERED VALUER HAS ESTIMATED TOTAL INVESTMENT IN THIS HOUSE AT RS. 8.55 LAKHS AND THE ASSESSEE HAS DECLARED THIS INVESTMENT AT RS. 9 LAKHS. BUT BEING NOT SATISFIED THE A.O. HAS ADDED A SUM OF RS. 11 LAKHS IN THIS ACCOUN T. HE HAS ESTIMATED THE COST OF THE HOUSE AT RS. 20 LAKHS AND HAS ALSO ACCEPTED RS. 9 LAKHS DECLARED TOWARDS THIS COST BY THE ASSESSEE AS EXPLA INED. HE HAS ADDED BALANCE RS. 11 LAKHS ON ACCOUNT OF UNDISCLOSED INVE STMENT IN THIS HOUSE. 6.1 THE LD. CIT(A), AFTER CONSIDERING THE DETAILED WRITTEN SUBMISSIONS [WS] OF THE ASSESSEE, HAS RESTRICTED THIS ADDITION TO RS. 7 LAKHS. THEREFORE, BOTH THE PARTIES ARE AGGRIEVED AND HAVE RAISED THEIR RESPECTIVE GROUNDS. 65 6.2 AFTER HEARING BOTH THE SIDES, WE ARE OF THE CON SIDERED OPINION THAT THERE IS NO LOGIC OR BASIS TO ESTIMATE THIS IN VESTMENT AT RS. 20 LAKHS BY THE A.O. WE WOULD LIKE TO REPRODUCE THE W RITTEN SUBMISSIONS OF THE ASSESSEE FILED IN THIS REGARD, WHICH IS AS U NDER: FIRSTLY WE RELY UPON ON OUR SUBMISSION (26-35,120- 124) FILED BEFORE THE ID. CIT(A) REPRODUCED AT PAGE 48 O NWARD (PB 107-116) AND CHART(PB120-124) IN FIRST ROUND AN D WS (PB255-258) WHICH MAY KINDLY BE CONSIDERED HERE ALS O. 2. DIRECTION OF HONBLE ITAT NOT FOLLOWED:- FURTHE R THE AO AS WELL AS THE ID. CIT(A) HAS NOT FOLLOWED THE DIRE CTION OF THE HONBLE ITAT AS THE HONBLE ITAT OBSERVED AND DIRECTED TO THE AO BY STATING THAT 'ESSENTIALLY, TH E AO IS NOT AN EXPERT TO MAKE COMMENT ON TECHNICAL MATTERS AS HAS BEEN HELD IN SARSWATI INDUSTRIAL SYNDICATE LTD V/S CIT (1999) 237 ITR 1(SC). HE, THEREFORE, COULD NOT HAVE ESTIMATED THE COST OF CONSTRUCTION ON HIS OWN AT RS . 20 LACS WITHOUT MAKING REFERENCE TO THE DEPARTMENTAL VALUATION OFFICER. THE, ASSESSING OFFICER, IS THERE FORE DIRECTED TO MAKE CORRECT CALCULATION OF TOTAL COST OF CONSTRUCTION OF HOUSE ON THE BASIS OF DOCUMENTS FOU ND AND EVIDENCE COLLECTED AS A RESULT OF SEARCH ALREADY ON HIS RECORD.' HENCE ON PERUSAL OF THE SAME IT IS VERY CL EARLY PROVED THAT THE DIRECTION BY THE HONBLE ITAT WAS G IVEN TO THE AO NOT TO THE ASSESSEE AND THE AO WAS REQUIRED TO DO CORRECT CALCULATION AND TO TAKE THE EXPERT COMMENT OF DVO 66 IF ANY BUT HE DID NOT BOTHER TO DO SO AND REPEATED THE ADDITION WITHOUT MAKING ANY EXERCISE OR WORKING, ON LY ON THE BASIS OF ORIGINAL ASSESSMENT AND THE ID CIT(A ) DESPITE ACCEPTING ALL THE MATERIAL AND EXPLANATIONS FURNISH ED BY THE ASSESSEE IN LAST ON THE BASIS OF SUSPICION, PRE SUMPTION AND ASSUMPTION FURTHER ESTIMATED. ON OTHER HAND WHEN THE ASSESSEE FILED DETAILED SUBMISSIONS(26-35), C OPY OF APPROVED VALUER REPORT (PB52-55)WHO IS AN EXPERT OR TECHNICAL PERSON TO ESTIMATE COST OF CONSTRUCTION A ND CORRECT CALCULATION OF CONSTRUCTION POSITION OF THE SEIZED ANNEXURES (PB 120-124). HOWEVER, THE ID. AO NEITHER CONSIDERED THESE VITAL EVIDENCES NOR REBUTTED THE S AME NOR MADE ANY INDEPENDENT INQUIRY NOR BROUGHT ANY EVIDEN CE OR MATERIAL ON RECORD. WHEN THE ONUS WAS ON THE AO AS PER THE DIRECTION OF THE HON'BLE ITAT, WHICH HAS NOT BE EN DISCHARGED. IT MEANS THERE WAS NO MATERIAL OR EVID ENCE IN THE HANDS OF THE AO AND CIT(A) TO REBUT THE CONTENT ION OF THE ASSESSEE. HENCE THE COST OF CONSTRUCTION DECLAR ED BY THE ASSESSEE SHOULD BE ACCEPTED BASED ON VARIOUS MA TERIAL OR EXPERTS, WITHOUT ANY DOUBT AND COST OF CONSTRUCT ION ESTIMATED BY THE AO WITHOUT ANY MATERIAL SHOULD NOT BE ACCEPTED OR BE SHOULD BE IGNORED AND KINDLY DELETE THE ENTIRE ADDITION. 3. FURTHER THE LD. AO HAS ERRED IN NOT CONSIDERING THE LEGAL POSITION THAT NO ADDITION CAN BE MADE UNDER CHAPTER XIV IN THE BLOCK ASSESSMENT WITHOUT ANY DE HORS MATERIAL F OUND IN THE SEARCH KINDLY REFER CIT V/S RAJENDRA PRASAD GUP TA 248 67 ITR 350(RAJ.) AND AO HAS ERRED IN NOT CONSIDERING T HAT NO INCRIMINATING DOCUMENTS/EVIDENCE FOUND DURING THE C OURSE OF SEARCH WHICH SUGGEST THAT THE COST OF CONSTRUCTI ON WAS RS. 20 LACS WITHOUT ANY CONTRARY EVIDENCE/ MATERIAL BROUGHT ON RECORD BY REVENUE AND MERELY ON ERRONEOU S PRESUMPTION OF FACTS WHICH ARE CONTRARY TO EVIDENCE S ON RECORD NO ADDITION CAN BE MADE ONLY ON THE BASIS OF STATEMENTS AS HELD IN VARIOUS CASES AS ABOVE REFERR ED, WHICH ALSO CONSIDERED HERE. 4. FURTHER THE ASSESSEE HAS MADE RETRACTION OF TH E STATEMENTS WHILE FILING THE BLOCK RETURN AND ALSO F ILED DETAILED OBJECTION (PB 56-59) AND ALSO FILED AFFIDA VIT(PB 50-51), WHICH HAS NOT BEEN CONSIDERED OR NOT REBUTT ED BY THE AO TILL DATE. FURTHER THE REGULAR BOOKS AND REC ORDS WERE SEIZED PRIOR TO COMMENCEMENT OF STATEMENT AND SEARCH PARTY HAS NOT SHOWN SUCH RECORD FOR THE REF ERENCE AND EXPLANATION OF ASSETS SEIZED. THE STATEMENTS WE RE TAKEN UNDER PRESSURE/DURESS AND DISTURBED MIND OF A FFAIRS THAT IS WHY THE ASSESSEE HAS RETRACTED FROM THESE S UCH STATEMENTS THROUGH AFFIDAVIT (PB50-51) AND SUCH RET RACTION HAS NOT BEEN CONSIDERED. FURTHER THE CONTENTION MADE IN THE LETTER OF AFFIDA VIT SHOULD BE ACCEPTED UNLESS REBUTTED. BECAUSE THIS AF FIDAVITS HAS NOT BEEN REBUTTED BY LOWER AUTHORITY TILL DATE AND IT IS VERY SETTLED THAT IN THE CASES WHERE AFFIDAVIT HAS BEEN FILED YET THE CONTENTS THEREOF HAVE NOT BEEN REBUTT ED BY 68 THE AO/AUTHORITY, THE FACTS MENTIONED THEREIN HAVE TO BE READ AS THE FACTS BINDING UPON THE INCOME TAX AUTHO RITIES. KINDLY REFER MEHTA PAREEK & CO. 30 ITR 181 (SC) , I TO V. DR. TEJGOPAL BHATNAGAR 20 TW 368 (JP) PARAS COTTON COMPANY VS. CIT (2003) 30 TW 168 (JD)., CIT V/S LUN ARD DIMOND LTD. 281 ITR 1 (DEL). RECENTLY IN CIT V/S BH AWANI OIL MILLS (P) LTD 239 CTR 445/49 DTR 212(RAJ.)- IT HAS BEEN HELD THAT CONTENTS OF AFFIDAVIT COULD NOT BE TREATE D AS OF A LESSER IMPORTANCE THAN THE STATEMENT GIVEN BY THE C REDITOR BEFORE THE AO. 5. IT IS ALSO SETTLED LEGAL POSITION THAT NO ADDITI ON CAN BE MADE, ASSUMPTION, PRESUMPTION AND SUSPICION, SUSPIC ION MAY BE STRONG BUT CANNOT TAKE THE PLACE OF REALITY , ARE THE SETTLED PRINCIPLES KINDLY REFER DHAKESHWARI COT TON MILLS 26 ITR 775 (SC) ALSO REFER R.B.N.J. NAIDU V/S CIT 29 ITR 194 (NAG), KANPUR STEEL CO. LTD. V/S CIT 32 ITR 56 (ALL). ALSO REFER CIT V/S KULWANT RAI 291 ITR 36( DEL). WH ERE HELD THAT IT IS WELL SETTLED LEGAL POSITION IN RESPECT I NCOME TAX ASSESSMENT PROCEEDING THAT ALTHOUGH STRICT RULE O F EVIDENCE ACT DO NOT APPLY IN ASSESSMENT PROCEED ING, ASSESSMENT CANNOT BE MADE ON IMAGINATION AND GUES SWORK ALSO REFER . DHIRAJLAL GIRDHARILAL V CIT (26 ITR 73 6 (SC), OMAR SALARY MOHANMED SAIT V CIT (37 ITR 151) (SC). 69 6. HOWEVER IN THE PRESENT CASE, ADMITTEDLY, THE ASS ESSEE HAS SHOWN THE EXPENSES AND WITHDRAWAL IN THE REGULA R BOOKS OF ACCOUNTS AND IF THE TRANSACTION IS NOTED I N THE REGULAR BOOKS OF ACCOUNT NO ADDITION CAN BE MADE IS ALSO SETTLED LEGAL POSITION, ACIT V/S. DR. SMT SHARDA AD HALKHA 95 TTJ 643(ASR). FURTHER WHEN INCREMENTING DOCUMEN TS OR MATERIAL HAS BEEN FOUND DURING THE COURSE OF SEARCH WHICH HAS NOT BEEN CALCULATED CORRECTLY. ADDITION IN THE BLOCK ASSESSMENT ONLY CAN BE MADE WHEN ANY EVIDENCE, RECO RD OR DOCUMENTS FOUND AND IN ABSENCE OF THE SAME NO ADDIT IONS CAN BE MADE OR ESTIMATED. FURTHER WHEN THE ASSESSEE FILED COPY OF REGISTERED VALUER REPORT(PB52-55) WHO IS BE ING A TECHNICAL PERSON OF THIS FIELD, WHICH HAS NOT BEEN FOUND AS WRONG, INCORRECT OR DISPROVED BY THE AO. AND AN EXP ERT REPORT CANNOT BE DENIED WITHOUT BRINGING ANY CONTRA RY REPORT OF THE ANOTHER EXPERT BY THE APPOSITIVE PART IES. IF THE AO WAS HAVING ANY DOUBT ON THE REPORT OF THE REGISTERED VALUER, HE SHOULD TAKE THE COMMENT OF TH E OTHER TECHNICAL PERSON BUT HE DID NOT DO SO AND AGA IN ESTIMATE THE COST OF CONSTRUCTION AT RS. 20 LAC AND RS. 16 LAKS BY THE ID. CIT(A) WHICH IS INCORRECT BECAUSE T HE AO AND CIT(A) HOW CAN ESTIMATED THE SAME WITHOUT ANY EVIDENCE OR MATERIAL AS THEY ARE NOT A TECHNICAL PE RSON AS ALSO HELD BY THE HON'BLE 1TAT. HENCE THE ESTIMATION SO MADE BY BOTH THE AUTHORITY IS WRONG AND AGAINST THE LAW AS NO ADDITION CAN BE MADE ON ESTIMATION BASIS IN THE BLOCK ASSESSMENT IS THE SETTLED LEGAL POSITIONS. IN THE C ASE OF CIT V/S SMT. C. SABIRA 338 ITR 226(KER) IT HAS BEEN HEL D THAT 70 NO ADDITION CAN BE MADE IN BLOCK ASSESSMENT ON THE BASIS OF ESTIMATED COST OF CONSTRUCTION WITHOUT ANY EVIDE NCE OR OTHER MATERIAL OR INFORMATION'S. HENCE THERE WAS NO QUESTION OF APPRECIATION OF FACTS, AND THEREFORE TH E ADDITION SO MADE IS ILLEGAL AND AGAINST THE LAW AND MAY KINDLY BE DELETED IN FULL. 7.1 FURTHER IT IS DOUBTED BY THE ASSESSEE THAT IN T HE ORIGINAL BLOCK ASSESSMENT PROCEEDINGS THE AO MIGHT HAVE BEEN GOT DVO'S REPORT, WHICH WAS PROBABLY IN FAVOUR OF THE ASSESSEE THAT IS WHY THE SAME HAS NOT BEEN REFERRED ANYWHERE BY THE REVENUE. AND IN THE SET ASIDE BLOCK ASSESSMENT PROCEEDINGS ALSO THE AO HAS NOT BOTHER T O GET OR REFER OF THE SAME DESPITE THE DIRECTION OF THE H ONBLE ITAT. THE ASSESSEE WAS RELYING SO ON THE BASIS OF S OME CORRESPONDANCE BETWEEN THE AO, DVO AND ASSESSEE KIN DLY REFER PB 214 TO 219. FURTHER WHEN WE HAD WRITTEN TO THE AO AND DVO TIME TO TIME TO PROVIDE THE COPIES OF DV O'S REPORT IF ANY. IN RESULT THEREFORE HAVE JUST ABLE T O RECEIVE THE COPY OF DVO'S REPORT IN THIS CASE [PB 259 TO 27 2]. THE DVO HAS ESTIMATED THE COST OF CONSTRUCTION AT RS. 11,97,000/- AGAINST WHICH THE ASSESSEE HAS SHOWN CO ST OF CONSTRUCTION AT RS. 9 LACS AND DECLARED UNDISCLOSED INCOME UNDER THIS HEAD AT RS. 1,50,000/- THUS TOTALING TO RS.10,50,000/- HAS BEEN SHOWN BY BIMLA THE ASSESSEE . NOW THE DIFFERENCE REMAINS ONLY RS. 1,47,000/-(RS.2,97, 000/-/ BEFORE DECLARATION UNDISCLOSED INCOME) AND THIS AS PER DECISION OF BHIM SINGH V/S CIT 308 ITR 71(PATNA) DI FFERENCE 71 LESS THAN TO 15% BETWEEN THE COST DECLARED BY THE A SSESSEE AND DVO IS ALLOWABLE. THE 15% OF RS. 11,97,000/- CO MES TO RS. 1,79,550/- WHICH IS MORE THAN THE DIFFERENCE OF RS.1,47,000/-. THE AO HAS NOT PROVIDED ANY OPPORTUN ITY TO THE ASSESSEE TO FILE THE OBJECTION ON THE DOV'S REP ORT (WHICH WAS ALSO ON THE BASIS OF ESTIMATION AND CPWD RATE) RATHER HE HAS CONCEALED THE FACTS OF THE DVO'S REPO RT. WHICH WAS TOTALLY AGAINST THE PRINCIPAL OF NATURAL JUSTICE AND HE DISHONORED THE DIRECTION OF THE HONBLE ITAT . 7.2 FURTHER THE AO HAS ERRED IN IGNORING THE LAW TH AT THE DIFFERENCE BETWEEN THE VALUE SHOWN BY THE ASSESSEE AND VALUE DETERMINED BY THE REGISTERED VALUER, WHICH CO MES TO LESS THEN TO 10% AND AS PER THE DECISION OF HON'BLE J&K HIGH COURT IN THE CASE OF HONEST GROUP OF HOTELS (P ) LTD V/S CIT(A) 177 CTR 232(J&K), WHEREIN IT HAS BEEN HELD T HAT IF THE MARGIN BETWEEN THE VALUE SHOWN BY THE ASSESSEE AND VALUE DETERMINED BY THE DVO (IN THIS CASE REGISTERE D VALUER) IS LESS THAN 10 % THE DIFFERENCE IS LIABLE TO BE IGNORED, WHICH IS STILL HOLD GOOD. AND HERE THE DIF FERENCE IS ADMITTEDLY LESS THEN TO 10%. HENCE NO COGNIZANCE TH EREOF SHOULD BE TAKEN BY THE LOWER AUTHORITY. ALSO REFER BHIM SINGH V/S CIT 308 ITR 71(PATNA) DIFFERENCE LESS THA N TO 15% BETWEEN/THE COST DECLARED BY THE ASSESSEE AND DVO I S ALLOWABLE. 7.3 . PWD RATES TO BE APPLIED: IN THE PRESENT CASE, THE DVO APPLIED CPWD RATES BASED ON THE CBDT CIRCULAR. HOWE VER, 72 IT IS BY NOW SETTLED THAT NORMALLY LOCAL PWD RATES SHOULD BE APPLIED AS AGAINST THE CPWD RATES. RECENTLY, HON 'BLE RAJASTHAN HIGH COURT IN THE CASE OF SMT. PREM KUMAR I MUDRIA V/S ACIT 211 CTR 500(RAJ.) DATED 18.07.2007 HAS HELD THAT THE CIT(A) HAS CORRECTLY ALLOWED 20% DEDU CTION FROM THE COST AS ESTIMATED BY DVO AND ITAT HAS CORR ECTLY CONFIRMED SUCH TREATMENT GIVEN BY ITAT CORRECTLY. A LSO REFER CIT V/S SMT. PREM KUMARI MURDIA 296 ITR 508(R AJ.) AND CIT V/S DINESH TALWAR 265 ITR 344(RAJ.) IN CIT VS. HOTEL JOSHI 242 ITR 478 (RAJ.) IT IS HELD THAT FOR THE PU RPOSES OF VALUATION OF PROPERTY ON THE BASIS OF ITEM WISE COS T BASED ON PWD RATES IS THE PROPER METHOD TO WORK OUT THE C OST OF CONSTRUCTION. HON'BLE JAIPUR BENCH OF ITAT IS ALSO TAKING THIS CONSISTENT VIEW. KINDLY REFER: ITO VS. TEK CHA ND 52 ITD 197, REKHADEVI V. ACIT AJMER 49 TTJ 530 JPR, MUSHTA QUE AHMED. 22 TW 25 (JP). IT HAS ALSO BEEN HELD THAT TO BRING THE VALUATION WITH CPWD RATES AT PAR WITH PWD RATES , AN AD HOC DEDUCTION OF 20% IS TO BE ALLOWED FROM THE F ORMER .KINDLY REFER RAVI MATHUR & OTHERS 22 TW 245 (JP) & SANDEEP LOOMBA VS. ACIT 26 TW 288 (JP). IT IS ALSO NOTABLE THAT THE VALUATION BY THE REGISTERED VALUER WAS ALS O DONE ON PWD RATES. ALSO REFER ITO V/S NITESH MAHESHWARI 53 DTR 413(JP)(2011). 7. 4. SELF SUPERVISION ALLOWABLE @ 15% : IN THE PRE SENT CASE, THE AO HAS ALLOWED THE DEDUCTION FOR SELF SUP ERVISION @ 7.5% ONLY, INSTEAD OF USUAL 15%. THE JAIPUR BENCH OF ITAT IS CONSISTENTLY TAKING A VIEW THAT A DEDUCTION OF 15% 73 SHOULD BE ALLOWED ON THIS ACCOUNT. KINDLY REFER RAV I MATHUR & OTHERS 22 TW 245 (JP), MUSHTAQUE AHMED (SU PRA) & URMILA LUMBA VS. AO 25 TW 322 (JP).THE AO HAVING AGREED IN OPRICIPAL, THEREFORE , SHOULD HAVE ALLOWE D 15% INSTEAD OF 7.5% ONLY. ITO V/S NITESH MAHESHWARI 53 DTR 413(JP)(2011) 12%. THUS IF ALL THIS THINGS ARE TAKEN IN TO CONSIDERATI ON THAN THE VALUE ADOPTED BY THE DVO'S CAME VERY LOW THAN T O VALUE SHOWN OR DECLARED BY THE ASSESSEE I.E THE COS T ALREADY SHOWN ON HIGHER SIDE OR EXCESS. HENCE NOW T HERE REMAINS NO QUESTION OF ANY ADDITIONS. FURTHER DURING THE COURSE OF APPELLATE PROCEEDING T HE A/R HAS PRODUCED ALL THE SEIZED ANNEXURES AND VERIFIED THE DISCREPANCY, ALLEGATIONS OF THE AO OR OTHER THING T O THE ID. CIT(A) HIMSELF WHO HAS PRINCIPALLY ADMITTED ALL THE SAME. HOWEVER DESPITE ITS ADMISSIONS HE STILL RESTRICTED THE ADDITION OR ESTIMATED THE COST OF CONSTRUCTION, WHI CH IS AGAINST THE PRINCIPAL OF EQUITY OR NATURAL JUSTICE AND BAD IN LAW. THE HONBLE ITAT ON EARLIER OCCASION HAS DIRECTED T O AO TO ENSURE THAT THE PART OF THE UNDISCLOSED INCOME ON T HIS ACCOUNT DECLARED IN THE RETURN OF UNDISCLOSED INCOM E, IS NOT BROUGHT TO TAX AGAIN TO THAT EXTENT TO AVOID DO UBLE TAXATION. 74 THEREFORE IN VIEW OF THE ABOVE SUBMISSIONS THE ADDI TIONS SO MADE MAY KINDLY BE DELETED IN FULL. 6.3 THE ABOVE SUBMISSIONS OF THE ASSESSEE ARE IN OR DER. AS PER THE SETTLED LAW, NO ADDITION IN THE BLOCK ASSESSMENT CA N BE MADE DE HORS ANY INCRIMINATING MATERIAL FOUND DURING SEARCH. TH EREFORE, WE FIND FORCE IN THE SUBMISSIONS OF THE ASSESSEE. THE ACTU AL WORKING OF THE INVESTMENTS AS PER THE ASSESSEE FOUND AND SEIZED DO CUMENTS COMES TO RS. 5,72,290/- AGAINST WHICH THE ASSESSEE HAS ALREA DY DISCLOSED RS. 9 LAKHS. THEREFORE, THERE IS NO SCOPE FOR MAKING ANY FURTHER ADDITION IN THIS ACCOUNT. ACCORDINGLY, THE SUSTAINED ADDITION HAS TO BE DELETED. IN THIS WAY, WE ALLOW GROUND NO. 5 OF ASSESSEES APPEA L AND DISMISS GROUND NO. 4 OF THE REVENUES APPEAL. 7. GROUND NO. 6 OF ASSESSEES APPEAL STANDS DECIDED ALONGWITH GROUND NO. 1 TO 4. GROUND NO. (7) IS DISMISSED IN T HE SAME MANNER AS IT IS DONE IN SUNIL KUMARS CASE. ACCORDINGLY, THE AP PEAL OF THE ASSESSEE IS PARTLY ALLOWED AND THAT OF THE REVENUE IS DISMIS SED. 75 C PAWAN KUMAR GOWADIA IT(SS)A NO. 05/JODH/2012 (DEPARTMENT) IT(SS)A NO. 06/JODH/2012 (ASSESSEE) THERE ARE CROSS APPEALS FILED AGAINST THE ORDER OF LD. CIT(A), JAIPUR, DATED 09/03/2012. 8. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS IN ITS APPEAL :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN: 1. DELETING THE ADDITION OF RS. 18,000/- FOUND AT O WN RESIDENCE AND AT COMMON RESIDENCE. 2. DELETING THE ADDITION OF RS. 6,39,389/- MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN GOLD ORNAMENTS AND DIAMOND FOUND AT THE ASSESSEES OWN RESIDENCE AND COMMON RESIDENCES 3. DELETING THE ADDITION OF RS. 40,712/- MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN SILVER ORNAMENTS. 4. DELETING THE UNEXPLAINED INVESTMENT OF RS. 43,00 0 MADE ON ACCOUNT OF VALUABLE ITEMS. 76 5. DELETING THE ADDITION OF RS. 14,34,900/- IN RE SPECT OF UNEXPLAINED INVESTMENT IN CONSTRUCTION OF SHOPS AND HOUSE. 8.1 THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS I N HIS APPEAL :- 1. THAT THE IMPUGNED ASSESSMENT ORDER U/S 158BC(C)/158BB R.W.S.143(3)/254 DATED 30.09.2012 IS BAD IN LAW AND ON FACTS OF THE CASE FOR WANT OF JURISDI CTION AND FOR VARIOUS OTHER REASONS AND HENCE THE SAME; MAY K INDLY BE QUASHED. 2.RS. 1,03,547/-: THE ID. CIT(A) HAS GROSSLY ERRED IN LAW AS WELL AS ON FACTS OF THE CASE IN SUSTAINING THE ADD ITION OF RS. 1,03,547/- ON ACCOUNT OF CASH FOUND OF RS. 2,10 ,317/- (1/4 TH SHARE OF RS. 8,41,270/-) IN COMMON TIJORI ALLEGE D BELONGING OF FOUR BROTHERS OUT OF WHICH RS. 1,75,00 0/- HAS BEEN DECLARED BY THE ASSESSEE IN THE BLOCK RETURN A S HIS UNDISCLOSED INCOME, THEREBY THE AO FURTHER MADE THE ADDITION OF RS. 1,21,547/- AND CIT(A) SUSTAINED THE SAME AT RS.1,03,547/- IGNORING THAT THE SAME INCOME HAS ALR EADY DECLARED AND TAXED IN THE OTHER FAMILY MEMBERS. HEN CE THE ADDITION SO MADE BY THE AO AND PARTLY CONFIRMED BYCIT(A), BEING CONTRARY TO THE PROVISIONS OF LAW AND FACTS, HENCE THE SAME MAY KINDLY BE DELETED IN FULL . 77 3. RS. 2,43,578/- THE ID. CIT(A) HAS GROSSLY ERR ED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN SUSTAINING T HE ADDITION OF RS. 2,43,578/- ON ACCOUNT OF UNEXPLAINE D INVESTMENT IN GOLD JEWELLERY FOUND AT HIS OWN RESID ENCE AND UNEXPLAINED GOLD JEWELLERY AT RS. 2,67,860/- AN D DIAMOND OF RS. 26,000 FOUND AT HIS RESIDENCE AND UNEXPLAINED INVESTMENT IN GOLD JEWELLERY AT RS. 16,39,468/- [1/4 TH SHARE OF RS. 65,56,430/-] FOUND IN COMMON TIJORI OF ALLEGED FOUR BROTHERS TOTALING TO RS. 19,32,967/- OUT OF WHICH RS. 10,50,000/- HAS ALREA DY BEEN DECLARED BY THE ASSESSEE IN THE BLOCK RETURN AS HIS UNDISCLOSED INCOME, THEREBY THE A.O. FURTHER MADE T HE ADDITION OF RS. 7,20,025/- AND THE LD. CIT(A) SUSTA INED THE SAME AT RS. 2,43,578/- IGNORING THAT THE SAME OR PA RT INCOME HAS ALREADY DECLARED AND TAXED IN THE OTHER FAMILY MEMBERS. HENCE THE ADDITION SO MADE BY AO AND PARTL Y CONFIRMED BY THE CIT(A), BEING CONTRARY TO TH E PROVISIONS OF LAW AND FACTS, HENCE THE SAME MAY KI NDLY BE DELETED IN FULL. HOWEVER, AS PER CALCULATION THERE IS NO ADDITION IS REMAINED. 4. RS. 15,756/- : THE ID. CIT(A) HAS GROSSLY ERRE D IN LAW AS WELL AS ON THE FACTS OF THE CASE IN SUSTAINING THE ADDITION OF RS. 15,756/- ON ACCOUNT OF UNEXPLAINED INVESTM ENT IN SILVER JEWELLERY, OUT OF THE UNEXPLAINED IN VESTMENT IN SILVER JEWELLERY RS. 2,31,468/- (1/4TH SHARE OF RS. 9,25,873/-) FOUND IN COMMON TIJORI OF ALLEGED OF FO UR BROTHERS, OUT OF WHICH RS. 75,000/- HAS ALREADY BEE N 78 DECLARED BY THE ASSESSEE IN THE BLOCK RETURN AS HIS UNDISCLOSED INCOME, THEREBY THE AO FURTHER MADE THE ADDITION OF RS. 56,468/- AND CIT(A) SUSTAINED THE S AME AT RS. 15,756/- IGNORING THAT THE SAME OR PART INCOME HAS ALREADY DECLARED AND TAXED IN THE OTHER FAMILY MEMB ERS. HENCE THE ADDITION SO MADE BY THE AO AND PARTLY CONFIRMED BY THE CIT(A), BEING CONTRARY TO THE PROV ISIONS OF LAW AND FACTS, HENCE THE SAME MAY KINDLY BE DELE TED IN FULL. 5. RS. 74,290/-. THE LD. CIT(A) HAS GROSSLY ERRED I N LAW AS WELL AS ON THE FACTS OF THE CASE IN SUSTAINING THE ADDITION OF RS. 74,290/- ON ACCOUNT OF UNEXPLAINED INVESTMEN T IN VALUABLE ITEMS OF RS. 1,67,290/- OUT OF WHICH RS. 5 0,000/- HAS ALREADY BEEN DECLARED BY THE ASSESSEE IN THE BL OCK RETURN AS HIS UNDISCLOSED INCOME, THEREBY THE A.O. MADE THE ADDITION OF RS. 1,17,290/- AND THE CIT(A) SUSTA INED THE SAME AT RS. 74,290/- IGNORING THE EXPLANATIONS AND SUBMISSIONS OF THE ASSESSEE. HENCE, BEING CONTRARY TO THE PROVISIONS OF LAW AND FACTS, THE SAME MAY KINDLY BE DELETED IN FULL. 6. THE ID. CIT(A) HAS FURTHER ERRED IN SUSTAINING A LL ABOVE ADDITIONS AND CONFIRMING THE ACTION OF THE AO IN TAXING THE SAME INCOME TWICE ONE IN THE HANDS OF TH E ASSESSEE AND SECOND IN THE HANDS OF THE OTHER FAMIL Y MEMBERS, WHEN THE TOTAL UNDISCLOSED INCOME DECLARED BY THE WHOLE GROUP OR FAMILY MEMBERS WERE MORE THAN TH E 79 UNDISCLOSED INCOME FOUND DURING THE COURSE OF SEARC H, BEING THE COMMON SEARCH OPERATION. 7. THE ID. AO HAS GROSSLY ERRED IN LAW AS WELL AS O N THE FACTS OF THE CASE IN CHARGING INTEREST U/S 158BFA(1 ). THE APPELLANT TOTALLY DENIES IT LIABILITY OF CHARGING O F ANY SUCH INTEREST. THE INTEREST, SO CHARGED, BEING CONTRARY TO THE PROVISIONS OF LAW AND FACTS, MAY KINDLY BE DELETED IN FULL. 9 AFTER HEARING BOTH SIDES WE DECIDE GROUND NOS. 1 TO 3 OF REVENUES APPEAL AND 2, 3 AND 4 AND GROUND NOS. 6 A ND 7 OF ASSESSEES APPEAL IN THE SAME MANNER AS WE HAVE DONE ABOVE. G ROUND NO. 1 AND 5 WERE NOT REALLY PRESSED. THEREFORE, GROUND NOS. 1 AND 5 OF ASSESSEES APPEAL ARE DISMISSED. NOW GROUND NOS. 4 AND 5 OF REVENUES APPEAL REMAIN TO BE ADJUDICATED. 9.1 FACTS APROPOS GROUND NO. 4 OF REVENUES APPEAL ARE THAT DURING SEARCH CERTAIN ITEMS LIKE TV, MUSIC SYSTEM, ETC. WE RE PRESENT IN THE HOUSE. THE ASSESSEE EXPLAINED THEIR POSSESSION, BU T THE A.O. DID NOT ACCEPT AND MADE ESTIMATED ADDITION OF RS. 1,67,290/ -. THE LD. CIT(A) HAS REDUCED THIS ADDITION TO RS. 1,24,290/- BY GIVI NG RELIEF OF RS. 43,000/-. AGAINST THIS ADDITION, THE REVENUE IS IN APPEAL. 80 9.2 AFTER HEARING BOTH THE SIDES, WE DO NOT FIND AN Y MERIT IN THIS GROUND. THE LD. CIT(A) HAS MADE A DETAILED ENQUIRY IN THIS REGARD. THE LD. D.R. COULD NOT PIN-POINT ANY INFIRMITY EVEN FOR NAME-SAKE. THEREFORE, WE CANNOT ALLOW THIS GROUND DISMISS THE SAME. 10. FACTS APROPOS GROUND NO. 5 OF THE REVENUES APP EAL ARE THAT AS PER THE STATEMENT OF THE ASSESSEE RECORDED U/S 132( 4) OF THE ACT, WHO STATED THAT INVESTMENT OF RS. 25 LAKHS WAS MADE IN THE CONSTRUCTION OF SHOPS AND THE RESIDENTIAL HOUSE RAISED ABOVE THEM. THE ASSESSEE DISCLOSED INVESTMENT OF RS. 14 LAKHS. BUT AFTER CO NSIDERING THE CLAIM OF THE ASSESSEE, THE A.O. HAS MADE AN ADDITION OF R S. 14,34,650/- IN THIS ACCOUNT. 11 THE LD. CIT(A) HAS DELETED THIS ADDITION. THE R EVENUE HAS OBJECTED TO THE SAME. 11.1 AFTER HEARING BOTH THE SIDES, WE HAVE FOUND TH AT THE ASSESSEE HAD MADE A STATEMENT WHICH WAS LATER RETRACTED. IN THE FIRST ROUND THE TRIBUNAL HAS OBSERVED THAT THE A.O. NOT BEING T HE EXPERT, CANNOT ESTIMATE THE COST OF CONSTRUCTION. THE ASSESSEE HA S FILED REPORT OF APPROVED VALUER. THE A.O. DID NOT REFER THIS MATTE R TO THE DVO. 81 THEREFORE, IN VIEW OF THE OBSERVATIONS MADE BY THE TRIBUNAL IN THE FIRST ROUND, THE ESTIMATION MADE BY HIM CANNOT BE APPROVE D. THEREFORE, IN THE GIVEN FACTS AND THE CIRCUMSTANCES OF THIS CASE, WE DO NOT FIND ANY ERROR IN THIS FINDING OF THE LD. CIT(A) AND THEREFO RE, CONFIRM THE SAME. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED AND THAT OF THE REVENUE IS DISMISSED. SHRI SUNIL KUMAR GOWADIA ITSSA NO. 09/JU/2012 & CO. 35/JU/2013. 13. THIS APPEAL BY THE REVENUE AND CROSS OBJECTIONS BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF LD. CIT(A), JAIPU R DATED 08/06/2012. 13.1 BRIEFLY STATED, THE FACTS OF THE CASE ARE THA T THE GOWADIA GROUP CONSISTS OF THREE PARTNERSHIP FIRMS NAMELY : (I) DHANRAJ GOWADIA & SONS (FOR SHORT DGS) (II) M/S. DHANRAJ JEWELLERS (FOR SHORT DJ) AND (III) M/S. GOWADIA JEWELLERS (FOR SHORT GJ) THE ASSESSEE IS ENGAGED IN THE BUSINESS OF SARAFA I .E. TRADING AND MANUFACTURING OF GOLD AND SILVER ORNAMENTS AT SAGWA RA DIST. DUNGARPUR. A SEARCH AND SEIZER OPERATION TOOK PLACE U/S 132 OF THE IT ACT ON 28/5/2002 AT THE BUSINESS AND RESIDENTIAL PR EMISES OF ENTIRE GROUP(THERE ARE FIVE SEARCH IN WHOLE GROUP), ALL SI TUATED AT DIFFERENT 82 PLACES IN TOWN SAGWARA DISTRICT DUNGARPUR, ON ONE S INGLE DAY. AGAINST THAT SEARCH THERE WERE SEVEN WARRANTS AND PANCHNAMA S PREPARED, AS AGAINST WHICH 11 BLOCK ASSESSMENTS WERE FRAMED. THE ASSETS FOUND BELONGED TO MORE THAN 20 MEMBERS OF THE GROUP. THE PERSON WISE DETAILS AND INCOME TAX ASSESSMENT WISE A DETAIL WAS ALSO FURNISHED DURING THE ORIGINAL ASSESSMENT PROCEEDINGS. AT THE COURSE OF SEARCH AND SEIZURE PROCEEDINGS ALL ASSETS FOUND WERE ACCOR DING TO PANCHNAMAS AND THE DEPARTMENT HAD ASKED TO EXPLAIN THE TOTAL A SSETS FOUND VIZ. THE CASH, GOLD AND SILVER ORNAMENTS, THROUGH COMMON QUERY LETTERS THOUGH LISTED IN DIFFERENT PANCHNAMA CONSIDERING TH E COMPLICACIES ARRIVING ON ACCOUNT OF TECHNICAL BREACH COMMITTED B Y THE SEARCH PARTY DURING THE COURSE OF SEARCH PROCEEDINGS. IN THE ORI GINAL BLOCK ASSESSMENT PROCEEDINGS THE DEPARTMENT BROADLY CONSI DERED THE TOTAL QUANTITY FOUND VIS A VIS EXPLAINED JOINTLY AND NOT EXACTLY ON THE BASIS OF PLACE OF FINDING BECAUSE THERE WAS NO CLEAR CUT FINDINGS IN THE NAME OF ANY PERSON OR ASSESSEE. THE ASSETS WERE KEPT COM MONLY IN COMMON TIJORI KEPT AT RESIDENCE INSTEAD OF SHOP AND THE PA RTNERS WERE LIVING AT DIFFERENT PLACES. DURING THE COURSE OF SEARCH CASH, GOLD, SILVER, JEWELLERY, VALUABLE AND INCRIMINATING DOCUMENTS WER E FOUND AT HIS OWN RESIDENCE, SHOP AND COMMON RESIDENCE AS PER DET AILS GIVEN AT PAGES 1 & 2 OF ASSESSMENT ORDER AND PANCHNAMA DT.28 .05.2002. 83 13.2. CONSEQUENT TO SEARCH PROCEEDING THE AO ISSUED THE NOTICE U/S 158BC TO FILE THE RETURN OF UNDISCLOSED RETURN FOR THE BLOCK PERIOD FOR A.Y. 1997- TO 2002-03 UPTO THE DATE OF SEARCH DT. 2 8.05.2002. IN RESPONSE THERETO THE ASSESSEE FILED THE RETURN DECL ARING THE UNDISCLOSED INCOME AT RS. 13,50,000/- WITH NOTES AN D OBJECTIONS. IN ORIGINAL ASSESSMENT PROCEEDINGS THE AO REQUIRED THE ASSESSEE TO EXPLAIN THE NATURE AND SOURCE OF ACQUISITION OF CAS H, JEWELLERY AND OTHER VALUABLE AND TO RECONCILE WITH THE BOOKS OF A CCOUNT. THE ASSESSEE FILED REPLY ON DATED 02.04.2004 STATING TH AT RETURN WAS FILED U/S 158BC AFTER CONSIDERING THE EXCESS STOCK, IF A NY FOUND AT THE SHOPS AND OTHER RESIDENCE OF FAMILY MEMBERS. IT WAS ALSO STATED THAT WHATEVER EXCESS STOCK, VALUABLE ETC. WAS FOUND AT A LL PLACES OF SEARCH, THE VALUE THEREOF HAS BEEN CONSIDERED AND DECLARED AND OFFERED AS UNDISCLOSED INCOME IN THE HANDS OF WORKING PARTNERS OF THE FIRM AND OTHER FAMILY MEMBERS OF GOWADIA GROUP. COMMON UNDI SCLOSED INCOME HAS BEEN COMPUTED AND DISTRIBUTED AMONGST THE FAMIL Y MEMBERS BY MUTUAL CONSENT. THE REASON FOR COMMON COMPUTATION W AS ON ACCOUNT OF, BECAUSE COMMON SEARCH AND SEIZURE PROCEEDING AT RESIDENTIAL PREMISES AND COMMON PANCHNAMA, SEIZURE MEMOS ETC. W ERE PREPARED. THE SEARCH AND SEIZURE PROCEEDINGS HAVE BEEN CONDUC TED SIMULTANEOUSLY AT 7 PREMISES OF GOWADIA FAMILY. THE WORKING OF CASH, 84 GOLD AND SILVER, FOUND, SEIZED AND TAX ON UNDISCLOS ED INCOME I.E. DIFFERENCE HAS BEEN PROVIDED TO THE AO. THE ASSESS EE GROUP HAD PAID TAX CONSIDERING THE SURRENDER AND DIFFERENCE BETWE EN THE GOLD/ SILVER/CASH FOUND, AS PER BOOKS OF ACCOUNTS. THE DI STRIBUTION OF SURRENDERED INCOME WAS IN ACCORDANCE WITH THE UNDIS CLOSED ASSETS FOUND AND AFTER DISCUSSION WITHIN THE FAMILY WITH A VIEW TO MAINTAIN HARMONY IN THE FAMILY. SHRI DHANRAJ GOWADIA BEING T HE HEAD OF THE FAMILY WAS SUPPOSED TO HAVE MAINTAINED A BALANCE BE TWEEN THE FAMILIES OF HIS TWO WIVES. THEREFORE, HE CONSCIOUSL Y DISTRIBUTED THE UNDISCLOSED INCOME DEPENDING UPON THE NUMBER OF MEM BERS IN THE TWO GROUPS AND CONSIDERING THE SOURCES OF ACQUISITION O F UNDISCLOSED ASSETS AFTER MUTUAL CONSENSUS WHICH WAS THE ONLY PRACTICAB LE METHOD IN THE OPINION OF VARIOUS FAMILY MEMBERS OF THE GROUP AND NOTHING WRONG IN IT BECAUSE THE GROUP OF THE ASSESSEE HAS PAID TAX ON T HE UNDISCLOSED INCOME FOUND AND SURRENDERED AND IT MAKES NO DIFFER ENCE THAT THE TAX PAID BY ONE PERSON OR ALL PERSON OF FAMILY. 13.3 THE AO WHILE MAKING THE ORIGINAL ASSESSMENT OR SET -ASIDE ASSESSMENT MADE DOUBLE ADDITION BY IGNORING THE UND ISCLOSED INCOME ALREADY SHOWN IN THE OTHER FAMILY MEMBERS NOT GIVIN G THE SET OFF OF THE SAME IN THE OTHER FAMILY MEMBERS. IN FIRST APPE AL THE LD CIT(A) 85 PARTLY ACCEPTED THE APPEAL. HENCE, REVENUE IS IN AP PEAL AND THE ASSESSEE IS IN CROSS OBJECTION AGAINST THE SUSTAINE D ADDITION. 13.4. THE ASSESSEE PREFERRED APPEAL AGAINST THE ASS ESSMENT DATED 20.5.2004 BEFORE THE LD. CIT(A), WHO ALLOWED THE AS SESSEES APPEAL. BEING AGGRIEVED, THE REVENUE WENT IN APPEAL BEFORE THE ITAT, WHO IN TURN, SET ASIDE THE ORDER WITH THE FOLLOWING DIRECT IONS: THE LD. CIT(A), HOWEVER IN HIS ORDER TOOK ONLY A G ENERAL VIEW AND ACCEPTED THE CLAIM OF THE ASSESSEE FOR TH E REST OF THE CASH THAT IT BELONGS TO VARIOUS FAMILY MEMBE RS OR IS EXPLAINED CASH. HE, HOWEVER WAS REQUIRED TO ADDRESS ON CLAIM OF INDIVIDUAL PERSONS OF THE FAMILY MEMBERS A S WELL AS THE PARTNERSHIP FIRMS WHO CLAIMED THE OWNERSHIP OF THE CASH FOR ANY PARTICULAR AMOUNT VIS A VIS AVAILABILI TY THEREOF AND CONSIDERED THE SAME BY PASSING A SPEAKING ORDER THEREON BEFORE ENTERTAINING A VIEW AS SUCH. WE THER EFORE, CONSIDER IT PROPER AND REASONABLE TO REMIT THE MATT ER BACK TO THE AO TO CONSIDER THE EXPLANATION OF THE ASSESS EE IN RIGHT PERSPECTIVE AND IF NEED BE, TAKE MATERIAL AS MAYBE ADDUCED ON RECORD BY THE ASSESSEE AND EXAMINE THE C LAIM ON MERITS AND IN ACCORDANCE WITH LAW. HE SHALL ALSO ALLOW CREDIT OF REASONABLE SAVINGS INCLUDING PIN MONEY O F VARIOUS FAMILY MEMBERS AND STRIDHAN WITH THE LADIES OF THE FAMILY ETC. WHILE ADJUDICATING THE ISSUE IN REMAND PROCEED INGS. HE SHALL ALSO ENSURE THAT THE CASH AVAILABLE WITH 86 PARTNERSHIP FIRM AS PER THEIR BOOKS OF ACCOUNT AND WITH VARIOUS OTHER FAMILY MEMBERS THAT IS BEING CLAIMED FORMING PART OF THE AFORESAID AMOUNT OF RS. 3,70,16 1/- IS NOT CLAIMED TO HAVE BEEN UTILIZED FOR EXPLAINING T HE FORMATION OF OTHER ASSETS FOUND AS A RESULT OF SEA RCH OR OTHERWISE. THE AO SHALL ALSO ENSURE THAT THE PART O F THE UNDISCLOSED INCOME OF RS. 8,16,000/- FALLEN TO THE SHARE OF THE ASSESSEE DECLARED IN THE RETURN OF UNDISCLOSED INCOME , IS NOT BROUGHT TO TAX AGAIN ON ACCOUNT OF UNEXPLAI NED CASH TO THAT EXTENT. THERE ARE, THUS, SERIOUS PROCEDURAL LAPSE COMMITTED BY THE LD. CIT(A) IN ACCEPTING THE CORRECTNESS OF THE ANNE XURE 5&6 ON THE BASIS OF WHICH ADDITION HAVE BEEN DELETED WH EREAS CORRECT & COMPLETE FACTS IN THAT REGARD WERE NEITHE R LAID ON RECORD NOR INQUIRED BY HIM. WE, THEREFORE, CONSI DER IT PROPER AND JUSTIFIED TO SET-ASIDE HIS DECISION WIT H RESPECT TO GOLD ORNAMENTS AND LIKEWISE FOR SILVER ORNAMEN TS AS WELL AS AND RESTORE THE MATTER TO THE FILE OF THE AO SO THAT THE ASSESSEE HAS AN OPPORTUNITY TO PUT UP HIS CASE BEFORE HIM. ALONG WITH DOCUMENTARY EVIDENCE TO THE SATISFACTION OF THE AO, WHO AFTER MAKING VERIFICATI ON OF FACTS SHALL REACH A CONCLUSION IN ACCORDANCE WITH L AW. 13.5. IN VIEW OF THE ABOVE DIRECTIONS, THE A.O. HAS AGAIN FINALIZED THE BLOCK ASSESSMENT ORDER AS UNDER :- 87 PARTICULARS AMOUNT [RS.] A.Y. UNEXPLAINED CASH 210318 2003 - 04 UNEXPLAINED INVESTMENT 1639108 2003 - 04 UNEXPLAINED INVESTMENT 231469 2003 - 04 2080895 13.6. AGGRIEVED, THIS ASSESSEE PREFERRED APPEAL BEF ORE LD. CIT(A), WHO, IN TURN, HAS ALLOWED A PART RELIEF TO THE ASSESSEE. THAT IS WHY BOTH PARTIES ARE NOW AGGRIEVED. THE REVENUE HAS RAISED T HE FOLLOWING GROUNDS : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN: 1. DELETING THE ADDITION OF RS. 16,370/- MADE ON ACCOUNT OF UNEXPLAINED CASH. 2. DELETING THE ADDITION OF RS. 6,24,209/- MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN GOLD ORNAMENTS 3. DELETING THE ADDITION OF RS. 40,712/- MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN SILVER ORNAMENTS. 88 13.7. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN HIS CROSS OBJECTIONS :- 1. THAT THE IMPUGNED ASSESSMENT ORDER U/S 158BC(C)/158BB R.W.S.143(3)/254 DATED 30.09.2012 IS BAD IN LAW AND ON FACTS OF THE CASE FOR WANT OF JURISDI CTION AND FOR VARIOUS OTHER REASONS AND HENCE THE SAME; MAY K INDLY BE QUASHED. 2.RS. 18,947/-:THE ID. CIT(A) HAS GROSSLY ERRED IN LAW AS WELL AS ON FACTS OF THE CASE IN SUSTAINING THE ADD ITION OF RS.18,947/- ON ACCOUNT FOUND OF RS. 2,10,317/- (1/4 TH SHARE OF RS. 8,41,270/-) IN COMMON TIJORI ALLEGED BELONGING OF FOUR BROTHERS OUT OF WHICH RS. 1,75,00 0/- HAS BEEN DECLARED BY THE ASSESSEE IN THE BLOCK RETURN A S HIS UNDISCLOSED INCOME, THEREBY THE AO FURTHER MADE THE ADDITION OF RS. 35,317/- AND CIT(A) SUSTAINED THE S AME AT RS.18,947/- IGNORING THAT THE SAME INCOME HAS ALREA DY DECLARED AND TAXED IN THE OTHER FAMILY MEMBERS. HEN CE THE ADDITION SO MADE BY THE AO AND PARTLY CONFIRMED BY CIT(A), BEING CONTRARY TO THE PROVISIONS OF LAW AND FACTS, HENCE THE SAME MAY KINDLY BE DELETED IN FULL . 3. THE ID. CIT(A) HAS GROSSLY ERRED IN LAW AS WEL L AS ON THE FACTS OF THE CASE IN CONSIDERING THE UNEXPLAINE D INVESTMENT IN GOLD JEWELLERY FOUND IN COMMON TIJORI OF ALLEGED OF FOUR BROTHERS INCLUDING THE ASSESSEE INS TEAD OF ALL FAMILY MEMBERS. HENCE THE CONSIDERATION SO MADE BY 89 THE AO AND CONFIRMED BY THE CIT(A), BEING CONTRAR Y TO THE PROVISIONS OF LAW AND FACTS, HENCE THE SAME MAY KINDLY BE DELETED IN FULL. HOWEVER, AS PER CALCULATION TH ERE IS NO ADDITION IS REMAINED. 4. RS. 1,15,756/- : THE ID. CIT(A) HAS GROSSLY ER RED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN SUSTAINING THE ADDITION OF RS. 1,15,756/- ON ACCOUNT OF UNEXPLAINE D INVESTMENT IN SILVER JEWELLERY, OUT OF TH E UNEXPLAINED INVESTMENT IN SILVER JEWELLERY RS. 2,31 ,468/- (1/4TH SHARE OF RS. 9,25,873/-) FOUND IN COMMON TIJ ORI OF ALLEGED OF FOUR BROTHERS, OUT OF WHICH RS. 75,000/- HAS ALREADY BEEN DECLARED BY THE ASSESSEE IN THE BLOCK RETURN AS HIS UNDISCLOSED INCOME, THEREBY THE AO FURTHER M ADE THE ADDITION OF RS. 1,56,468/- AND CIT(A) SUSTAINED THE SAME AT RS. 1,15,756/- IGNORING THAT THE SAME OR PA RT INCOME HAS ALREADY DECLARED AND TAXED IN THE OTHER FAMILY MEMBERS. HENCE THE ADDITION SO MADE BY THE AO AND P ARTLY CONFIRMED BY THE CIT(A), BEING CONTRARY TO THE PROV ISIONS OF LAW AND FACTS, HENCE THE SAME MAY KINDLY BE DELE TED IN FULL. 5. THE ID. CIT(A) HAS FURTHER ERRED IN SUSTAINING A LL ABOVE ADDITIONS AND CONFIRMING THE ACTION OF THE AO IN TA XING THE SAME INCOME TWICE ONE IN THE HANDS OF THE ASSESSEE AND SECOND IN THE HANDS OF THE OTHER FAMILY MEMBERS, WH EN THE TOTAL UNDISCLOSED INCOME DECLARED BY THE WHOLE GROUP OR FAMILY MEMBERS WERE MORE THAN THE UNDISCLOSED IN COME 90 FOUND DURING THE COURSE OF SEARCH, BEING THE COMMON SEARCH OPERATION. 6.THE ID. AO HAS GROSSLY ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN CHARGING INTEREST U/S 158BFA(1). THE APPELLANT TOTALLY DENIES IT LIABILITY OF CHARGING O F ANY SUCH INTEREST. THE INTEREST, SO CHARGED, BEING CONTRARY TO THE PROVISIONS OF LAW AND FACTS, MAY KINDLY BE DELETED IN FULL. 13.8 WE HAVE HEARD RIVAL SUBMISSIONS AND HAVE CAREF ULLY PERUSED THE ENTIRE RECORD. THE LD. A.R. HAS FILED A LENGTHY WRI TTEN SUBMISSION APART FROM MAKING ORAL SUBMISSIONS. THE SUBMISSIONS OF TH E ASSESSEE ARE BEING REPRODUCED AS UNDER :- AT THE VERY OUTSET IT IS SUBMITTED THAT THE LD. AO HAS NOT FOLLOWED THE DIRECTION OF THE HONBLE ITAT AND REPE ATED THE ADDITION WITHOUT UNDERSTANDING THE FACTS AND CIRCUMSTANCE OF THE CASE. AS THE HONBLE ITAT OBSER VED AND DIRECTED AS UNDER. THE AO HIMSELF HAS TREATED THE CASH FOUND IN TIJORI AS BELONGING TO FOUR PERSONS EQUALLY, AS THE TIJORI WA S A COMMON TIJORI OF FOUR PERSONS, NAMELY SH. AMIT KUMA R, SH. VIRENDRA KUMAR, SH. SUNIL KUMAR, SH. PAWAN KUMAR. T HE GOVADIA GROUP MEMBERS, HOWEVER GAVE A REASONABLE EXPLANATION THAT THE CASH OF THE FIRM AND CASH BELO NGING TO VARIOUS FAMILY MEMBERS WAS ALSO KEPT IN COMMON TIJO RI AT 91 THE RESIDENCE FOR SAFE CUSTODY AND CONVENIENCE. THE SEARCH WARRANT IN JOINT NAMES, PANCHNAMAS WERE ALSO DRAWN IN JOINT NAMES(CPB74-99) AND NO DAY TO DAY ACCOUNTS OF CASH HANDLING WAS FOUND MAINTAINED. ESSENTIALLY, THEREFO RE THE UNEXPLAINED AMOUNT TO THE EXTENT OF RS.8,16,000/- F ORMING PART OF THE TOTAL CASH FOUND FROM THE PARTNERSHIP FIRM AND FAMILY MEMBERS INCLUDING CASH FOUND IN TIJORI AGGRE GATING TO RS.11,86,161/- OUGHT TO HAVE BEEN ACCEPTED BY TH E ASSESSING OFFICER AS UNDISCLOSED INCOME BASED ON TH E RECORD PARTICULARLY WHEN THE DEPARTMENT FOUND NO ADVERSE MATERIAL OR DOCUMENTARY EVIDENCE SUGGESTING INCOME EARNED BY ANY OF AFORESAID EIGHT PERSONS MORE THAN THAT HAS BEEN DECLARED BY THEM AS THEIR UNDISCLOSED INCO ME ON ACCOUNT OF CASH FORMING PART OF THE TOTAL UNDISCLO SED INCOME . THROUGH ANNEXURE-6(CPB21-23 ). THE AO TO CONSIDER THE EXPLANATION OF THE ASSESSEE IN RIGHT PERSPECTIVE AND IF NEED BE, TAKE MATERIAL AS MAY BE ADDUCED ON RECORD BY THE ASSESSEE AND EXAMINE THE C LAIM ON MERITS AND IN ACCORDANCE WITH LAW. HE SHALL ALSO ALLOW CREDIT OF REASONABLE SAVINGS INCLUDING PIN MONEY OF VARIOUS FAMILY MEMBERS AND STRIDHAN WITH THE LADIES OF THE FAMILY ETC. WHILE ADJUDICATING THE ISSUE IN REM AND PROCEEDINGS . HE SHALL ALSO ENSURE THAT THE CASH AVAILABLE WITH PARTNERSHIP FIRM AS PER THEIR BOOKS OF ACCOUNT AND WITH VARIOUS OTHER FAMILY MEMBERS THAT IS BEING CLA IMED FORMING PART OF THE AFORESAID AMOUNT OF RS. 3,70,16 1/- IS NOT CLAIMED TO HAVE BEEN UTILIZED FOR EXPLAINING T HE FORMATION OF OTHER ASSETS FOUND AS A RESULT OF SEA RCH OR 92 OTHERWISE. THE AO SHALL ALSO ENSURE THAT THE PART OF THE UNDISCLOSED INCOME OF RS. 8,16,000/- FALLEN TO THE SHARE OF THE ASSESSEE DECLARED IN THE RETURN OF UNDISCLOS ED INCOME, IS NOT BROUGHT TO TAX AGAIN ON ACCOUNT OF UNEXPLAINED CASH TO THAT EXTENT. AND ON PERUSAL OF THE ORDER OF THE AO IT IS VERY CL EAR THAT HE HAS NOT FOLLOWED THE SAME IN TRUE PERSPECTIVE. A ND REPEATED THE ADDITIONS IGNORING THE ABOVE OBSERVATI ONS OF THE HONBLE ITAT AND FILED BY THE ASSESSEE. AND THE LD CIT(A) HAS ALSO PARTLY ACCEPTED THE SAME IGNORING T HE TRUE AND GENERAL APPROACH. 2. THE CASH FOUND AT SHOP AND AT THE RESIDENCE OF PAR TNERS OF FIRM WERE CONSIDERED COMMONLY FOR EXPLANATIONS O F AVAILABILITY OF DECLARED CASH DUE TO THE REASON THA T MANY TIMES CASH OF SHOPS WERE KEPT AT RESIDENCE FOR SECU RITY PURPOSES. FURTHER IT WAS CONVENIENT TO EXPLAIN COMM ONLY BECAUSE THE DEPARTMENT TOO HAD INVENTORIED COLLECTI VELY AND SEIZED ALL THE CASH AT RESIDENCE THROUGH COMMON PANCHNAMA ALSO. THE SAME OBSERVATIONS HAS ALSO BEEN GIVEN BY THE HONBLE ITAT. THE EXPLANATION OF CASH IN THE HAND OF INDIVIDUAL P ARTNER BECOMES IMPOSSIBLE DUE TO WRONG PROCEDURE ADOPTED A T THE TIME OF SEARCH AND SEIZERS PROCEEDINGS BY THE S EARCH PARTY. COMMON WARRANTS WERE THERE, COMMON PANCHNAMA HAS BEEN PREPARED AGAINST THE CASH OF DIFFERENT 93 INDIVIDUALS, WHICH INCLUDES CASH OF LADIES OF THE F AMILY ALSO. EVEN THE CASH BELONGING TO DIFFERENT LADIES B EING THEIR STRI-DHAN WERE NOT SEPARATELY INVENTORIES. TH E SAME WERE GOT SEIZED WITHOUT ANY AUTHORITY OR SEARCH WAR RANT AGAINST THEM. IN ORDER TO MEET OUT ALL THESE DISCREPANCIES COMMIT TED AT THE TIME OF SEARCH AGAINST ALL SUCH SEARCH WARRANTS OF SEVEN PREMISES, THE ASSESSEE WAS NOT IN A POSITION TO EXPLAIN THE AVAILABILITY OF THE CASH IN CASE OF EAC H ASSESSEE SO COMMON EXPLANATION FOR WHOLE GOWADIA GROUP WAS FURNISHED AND A COMMON LIST OF EXPLAINED CASH WAS A LSO FURNISHED. 3. THE TOTAL UNDISCLOSED CASH TO BE CONSIDERED IN SET ASIDE PROCEEDINGS IS RS.10,38,582/- ONLY. BECAUSE DURING THE COURSE OF SEARCH TOTAL CASH OF RS. 13,61,281/- WAS FOUND OUT OF WHICH AS CASH AMOUNTING TO RS. 3,22,699/- AL READY CONSIDERED SEPARATELY IN THE THREE FIRMS NAMELY M/S GOWADIA JEWELLERS (RS.78,175/-), M/S DHANRAJ JEWELLERS(RS.71,230/-), M/S DHANRAJ GOWADIA & SONS(RS.1,73,294/-) AND ARE NOT SUBJECT MATTER OF S ET ASIDE PROCEEDINGS IN THE CASE OF INDIVIDUAL ASSESSEE. OUT OF ABOVE RS.10,38,582/- CASH AMOUNTING TO RS. 2,37,682 /- IS CLAIMED AS EXPLAINED AND DISCLOSED AS PER SEPARATE CHART ATTACHED(CPB 8,21-23). DETAILED EXPLANATIONS FOR TH E SAME WERE AVAILABLE ON THE RECORDS. THE BALANCE RS. 8.00 ,900/- REMAINS UNEXPLAINED. AGAINST THIS THE PARTNERS HAVE 94 ALREADY CONSIDERED RS.8,16,000/- AND OFFERED FOR TA XATION IN RETURN FILED U/S158BC. THE AO HAD MADE THE TOTAL ADDITION OF RS. 2,10,317) OUT WHICH THE ASSESSEE HA S ALREADY DECLARED AS UNDISCLOSED INCOME OF RS. 1,75, 000/- AND THE BALANCE ADDITION IS REMAINED ONLY OF RS. 35 ,317/- WHICH IS CONSIDERED AND EXPLAINED IN THE HAND OF VA RIOUS FAMILY MEMBERS WHICH IS ACCEPTABLE. HENCE NOW NO ADDITION IS REMAINED STILL MAKING THE ADDITION BY T HE AO AND PARTLY SUSTAINED BY THE CIT(A) AND SEPARATE CONSIDERATION IS DOUBLE TAXATION ON THIS ACCOUNT, W HICH IS ILLEGAL AND BAD IN LAW. IT MEANS THE ASSESSEE WITH THE GROUP HAS OFFERED FOR TAXATION MORE THAN THE UNDISC LOSED CASH FOUND, WHICH HAS NOT BEEN CONSIDERED BY THE AO AS WELL AS CIT(A) AND IGNORED ALL TO GATHER. 4. FURTHER AS THE HONBLE ITAT HAS DIRECTED THAT THE A O SHALL ALSO ALLOW CREDIT OF REASONABLE SAVINGS INCL UDING PIN MONEY OF VARIOUS FAMILY MEMBERS AND STRIDHAN WI TH THE LADIES OF THE FAMILY ETC. AND IT IS VERY GENERAL THAT THE LADIES MEMBERS HAD RECEIVED CASH GIFTS ON VARIO US SOCIAL CEREMONIES LIKE ON RAKSHA BANDHAN, BHAIDOOJ, BIRTHDAY, AND MARRIAGE ANNIVERSARY ETC. SINCE BIRTH . ALL THE MEMBERS USUALLY KEPT ABOUT RS. 5,000/- OR MORE IN C ASH WITH THEM FOR THEIR PERSONAL OUT OF POCKET EXPENSES PURPOSES FROM THEIR DECLARED SOURCES. THE CLAIM OF EXPLAINED CASH IS VERY REASONABLE CONSIDERING THE M EMBERS OF FAMILY AND THERE PAST SAVINGS FROM DRAWINGS, GIF TS, SOCIAL CEREMONIES ETC. THE CLAIM IS VERY MEAGER ALS O. 95 HENCE ACCORDING TO US, SUCH MEAGER AMOUNT OF DECLAR ED CASH CLAIMED BY THE ASSESSEE AND BY THE GOWADIA GRO UP IS FULLY ACCEPTABLE AS AVAILABLE FROM THE DECLARED SOU RCES. AND LOOKING TO THE STATUS OF THE FAMILY IT IS NOT M UCH. IT IS NOT POSSIBLE AND ACCEPTABLE THAT NO ONE PERSON IS H AVING ANY SAVINGS, STRIDHAN, PIN OR POCKET MONEY ETC. AN D THE AO DID NOT GIVE THE CREDIT OF THE SAME BY STATING T HAT THE ASSESSEE HAS NOT FURNISHED THE EVIDENCE OF THE SAVI NG OF FAMILY MEMBER. HERE WE WOULD LIKE TO SUBMIT THAT WH ILE DOING A JUDICIOUS ACT BY A PERSON (HERE THE AO) SHO ULD ALSO KEEP IN MIND THE CIRCUMSTANCE, FACTS, GENERAL APPRO ACH, STATUS ETC. HE SHOULD NOT RESTRICT TO HIMSELF ONLY TO THE EVIDENCE WHERE THE SAME IS NOT POSSIBLE. HERE THE A O RESTRICTED TO HIMSELF ONLY EVIDENCE AND IGNORED THE CIRCUMSTANCE, FACTS, GENERAL APPROACH, STATUS ETC. KINDLY REFER THE DECISION OF MANGE RAM MITTAL V/S ACIT 105 TTJ 594(DEL)(SB) HENCE WE PRAY YOUR OWNER TO CONSIDER OUR CONTENTION IN THE INTEREST OF NATURAL JUSTICE AND D ELETE ENTIRE ADDITION. POSITION OF AVAILABILITY OF EXPLAINED CASH VIZ A VI Z POSITION OF CASH FOUND DURING SEARCH PROCEEDINGS IS ANNEXED(CPB8,21-23) IN FRESH CHART FILED IN SET ASI DE PROCEEDING IS ATTACHED HEREWITH. 5. IN ADDITION TO THE ABOVE WE HAD FILED A CHART SHOW ING THE ASSETS COVERED IN THE UNDISCLOSED INCOME BY THE ASSESSEE AT THE TIME OF FILING OF RETURN FOR BLOCK 96 ASSESSMENT. A CHART FOR WHOLE GROUP IS ALSO ENCLOSE D HEREWITH FOR YOUR READY REFERENCE(PB 55,169). THE ORIGINAL CHARTS ATTACHED ALONGWITH THE ORIGINA L REPLY WERE ALSO SELF EXPLANATORY IN THIS RESPECT. THE OVE RALL DECLARATION OF THE GROUP SHALL BE CONSIDERED IN ITS TRUE PERSPECTIVE. OUT OF TOTAL CASH OF RS.11,86,161/- FO UND AS PER ANNEXURE WITH ALL PANCHNAMAS THE GROUP HAS DEC LARED RS.8,16,000/- AS UNDISCLOSED AND OFFERED FOR TAXATI ON IN THE HANDS OF SIX PERSONS AS REFLECTED IN THE CHART CONTAINING DETAILS OF ASSETS COVERED IN DISCLOSURE OF UNDISCLOSED INCOME IN RETURN FILED IN RESPONSE TO N OTICE U/S 158BC BY 12 PERSONS. THE BALANCE AMOUNT OF RS.3,70, 161/- WAS EXPLAINED AS DECLARED CASH OF THREE PARTNERSHIP FIRM AS PER BOOKS AND ABOUT 37 INDIVIDUAL FAMILY MEMBERS AS PAST SAVINGS FROM WITHDRAWALS AND GIFTS ETC(PB 55,169 & CPB 8,21-23) THE HONBLE ITAT HAS DIRECTED TO AO TO ENSURE THAT THE PART OF THE UNDISCLOSED INCOME OF RS 816000/- FALLE N TO THE SHARE OF THE ASSESSEE DECLARED IN THE RETURN OF UNDISCLOSED INCOME, IS NOT BROUGHT TO TAX AGAIN ON ACCOUNT OF UNEXPLAINED CASH TO THAT EXTENT. 6.1 IN THE CASE OF SAT PAL PANDIT & CO. V/S ACIT 61 TTJ(ASR) 602 IT HAS BEEN HELD THAT AMOUNT ALREADY BEEN TAXED IN THE HANDS OF ANOTHER PERSON ON SUBSTANTIVE BASIS, CANNOT BE ASSESSED IN THE HANDS OF THE ASSESSEE AGA IN, 97 PARTICULARLY WHEN AO HAS NOT CONCLUSIVELY PROVED TH AT THE TRANSACTION WAS BENAMI ON BEHALF OF THE ASSESSEE. H ERE IS THE SAME POSITION. ALSO REFER CIT V/S TRUSTEES OF MISS GARGIBEN & ORS. 130 ITR 479(BOM)., ITO V/S VINOD KUMAR SONI 258 ITR 717(DEL)., CIT V/S MRS. BANNO E. COWASJI 147 ITR 744(MP). 6.2 IN MEHMOOD PASHA V/S DCIT (INV.) 44 DTR 55(KAR) IT HAS BEEN HELD THAT TRIBUNAL HAS NOT TAKEN IN TO CONSIDERATION THE EVIDENCE PRODUCED BY THE ASSESSEE IN THE FORM OF ASSESSMENT ORDER OF THE ASSESSEES BROTHER. THE ORDER IS MADE U/S 158BD, WHEREIN A SUM OF RS. 2,75, 000/- IS SHOWN AS THE UNDISCLOSED INCOME OF THE ASSESSEE S BROTHER AND ACCORDINGLY AN ADDITION WOULD HAVE BEEN MADE IN THE SAID ASSESSMENT ORDER. THE TRIBUNAL OUGHT TO HAVE TAKEN THIS ASPECT IN TO CONSIDERATION AND THE FACT THAT THE SAID AMOUNT WAS OFFERED FOR TAX AND ACCORDINGLY OUG HT TO HAVE DELETED THE ADDITIONS MADE TO THE INCOME OF TH E ASSESSEE. SINCE THE TRIBUNAL HAS NOT TAKEN THE MATE RIAL EVIDENCE WHICH HAS BEEN PRODUCED BY THE ASSESSEE AN D ALSO HAS NOT APPLIED ITS MIND TO THE FACTS AS TO WHETHER THE ADDITION IF SO MADE IN THE CASE OF THE ASSESSEE, IT WOULD AMOUNT TO DOUBLE TAXATION. HERE IS THE SAME POSITI ON THE AO HAS NOT TAKEN IN TO CONSIDERATION THAT OTHER FAM ILY MEMBER HAS ALREADY BEEN OFFERED THE UNDISCLOSED INC OME. 98 7.1 IN THE CASE OF M. NARAYAN & BROS. V/S ACIT 243 CTR 588(MAD). IT HAS BEEN HELD THAT ADDITION ON THE BASIS OF STATEMENT RECORDED DURING THE SEARCH ASSESSEE OFFE RED RS. 3LAKHS AS UNACCOUNTED INCOME ON THE FIRST DAY OF SE ARCH AT HIS PREMISES AND ANOTHER SUM OF RS. 4 LAKHS ON THE SECOND DAY OF THE SEARCH- HOWEVER IN THE COURSE OF ASSESSM ENT PROCEEDINGS, ASSESSEE RETRACTED THE STATEMENT MADE ON THE SECOND DAY OFFERING THE ADDITIONAL INCOME OF RS. 4 LAKHS AO REJECTED THE SAID PLEA AND MADE ASSESSMENT ON TH E BASIS OF BOTH THE CONFESSIONAL STATEMENTS GIVEN BY THE ASSESSEE- NOT JUSTIFIED THOUGH THE STATEMENT REND ERED AT THE TIME OF SEARCH MAY BE USED IN EVIDENCE IN ANY PROCEEDINGS THAT BY ITSELF CANNOT BECOME THE SOLE M ATERIAL TO REST THE STATEMENT, MORE SO WHEN THE ASSESSEE SE EKS TO WITHDRAW THE SAME BY PRODUCING MATERIAL EVIDENCE IN SUPPORT OF SUCH RETRACTION- IT IS ALWAYS OPEN TO T HE PERSON WHO MADE THE ADMISSION TO SHOW THAT THE STATEMENT T O OFFER INCOME IS INCORRECT, ASSESSEE HAS EXPLAINED T HAT THE AMOUNT OFFERED ON THE SECOND DAY OF THE SEARCH WAS LOAN TAKEN BY HIM FROM RELATIONS WHO WERE ALREADY ASSESS ED TO TAX ON THE SAID AMOUNT- THUS ONCE THE ASSESSEE HAD EXPLAINED HIS STATEMENT AS INCORRECT IN THE CONTEXT OF THE MATERIAL PRODUCED BY HIM, THE TRIBUNAL WAS NOT JUSTIFIED IN ITS CONCLUSION THAT THE STATEMENT MADE BY THE ASSESSEE CLOTHED THE ASSESSMENT WITH LEGALITY- THAT APART, THE CASE OF THE ASSESSEE ALSO STANDS SUPPORT ED BY CIRCULAR NO.F-NO. 286/2/2003-IT(INV.), DT.10 TH MARCH, 2003, WHEREIN THE CBDT HAS GIVEN CATEGORICAL DIRECTIONS T O THE 99 DEPARTMENTAL OFFICERS THAT UNDUE EMPHASIS SHOULD NO T BE PLACED ON RECORDED STATEMENTS-THEREFORE, CIT(A) WAS JUSTIFIED IN ACCEPTING THE ASSESSEES CASE AND DELE TING THE ADDITION OF RS. 4 LAKHS. HERE IS THE SAME POSITIO N IN THIS CASE ALSO AS THE AO MADE THE ADDITION ON THE BASIS OF STATEMENT ON THE DAY OF SEARCH DT. 28.05.2002 AND O FFERING LETTER ON THE SECOND DAY OF SEARCH DT. 29.05.2002. HERE ALSO ASSESSEE EXPLAINED THE UNDISCLOSED INCOME AND OFFERED FOR TAX IN THE HAND OF THE FAMILY MEMBERS. 7.2 IN THE CASE DCIT V/S PRAMUKH BUILDERS 115 TTJ (AHD) 330 IT HAS BEEN HELD THAT ADDITION ON THE BASIS OF STATEMENT U/S 132(4)- THERE BEING NO SPECTRA OF EVI DENCE REGARDING UNDISCLOSED INCOME, ADDITION MADE ONLY ON THE BASIS OF STATEMENT OF MANAGING PARTNER OF THE ASSES SEE U/S 132(4), GIVEN IN A STATE OF CONFUSION AND LATER RET RACTED, COULD NOT BE SUSTAINED EITHER IN PART OR AS A WHOLE - THERE MAY NOT BE ANY DURESS ALSO, BUT EXISTENCE OF CONFUS ION CANNOT BE RULED OUT AND THE REVISION OF THE EARLIER STATEMENT DOES NOT REFLECT APPLICATION OF MIND BUT A STATE OF COMPOUNDED CONFUSION ONLY. 7.3 IN ACIT V/S DR. RAJ. DHARIWAL 63 DTR 113(JD)(TRB.) HELD THAT STATEMENT MADE BY THE ASSESSEE U/S 132(4) SURRENDERING THE IMPUGNED AMOUNT COULD NOT HAVE BEE N TAKEN AS BASIS FOR MAKING ADDITION TOWARDS UNEXPLAI NED INVESTMENT IN PLOTS BY THE ASSESSEE PARTICULARLY WH EN NO EVIDENCE OF UNDISCLOSED PAYMENT HAS BEEN FOUND AT T HE 100 TIME OF SEARCH. THE SAID CASE AFFIRMED BY THE HONBL E RAJ. HIGH COURT KINDLY REFER CIT V/S DR. RAJ. DHARIWAL 63 DTR 83(RAJ.) WE LIKE TO SUBMIT THAT THE ISSUE SHALL BE CONSIDER ED AFTER VERIFYING THE FACT THAT THE SET ASIDE PROCEEDINGS A RE AGAINST 10 ASSESSEES BELONGING TO THE GROUP OUT OF 12 ORIGINAL ASSESSMENT U/S 153A. THE PORTION OF CASH A LREADY CONSIDERED IN THE HANDS OF TWO PARTNERSHIP FIRMS I. E. M/S DHANRAJ JEWELLERS & M/S GOWADIA JEWELLERS SHALL BE EXCLUDED IN THE OVERALL CONSIDERATION FOR THIS 10 C ASES. 8. FURTHER ON PERUSAL OF THE STATEMENTS OF SOME OF TH E FAMILY MEMBERS OF THE ASSESSEE IT IS VERY CLEARLY T HAT THEY WERE HAVING SAVINGS, GIFT MONEY, STRIDHAN ETC. ON SOCIAL OCCASION. SH. SUNIL GOVADIA IN ANS TO Q. 16 (CPB 30)STATED HE IS HAVING RS. 4-5 THOUSAND WHICH IS LAYING WITH HIS WI FE. SH. AMIT GOVADIA IN ANS TO Q. 15(CPB 36) STATED THAT HIS NEW BORN CHILD HAS RECEIVED CASH GIFTS OF RS. 10,00 0/- WHO IS ONLY 15 DAY. SMT. SHIVANI W/O. AMIT GOVADIA IN ANS TO Q. 11(CPB 47) STATED THAT SHE AND HER NEW BORN CHILD HAD RECEIVED CASH GIFTS OF RS. 15,000/- TO 20,000/- WHO IS ONLY 15 DA Y. IN ANS 101 TO Q. NO. 7(CPB47) SHE STATED THAT SHE EARNED RS. 4 -5 THOUSAND PM FROM THE SOFT TOYS AND MEHANDI. SMT. KAJAL W/O. SUNIL GOVADIA IN ANS. TO Q. NO. 5 SHE STATED THAT SHE EARNED ABOUT RS.5 THOUSAND PM (CPB48)FROM THE STITCHING SOFT TOYS AND MEHANDI. SH. DHANRAJ GOVADIA IN ANS TO Q. NO. 6 (CPB 56)HE STATED THAT HE IS HAVING CASH OF RS. 60 TO 70 THOUSAND, IN ANS TO Q. NO. (CPB 56) HE STATED THAT THE SAME BELONGS TO HIS DAUGHTER IN LAW IN ANS TO Q. NO. 8 HE STATED THAT IT IS HER PAG LAGAI CEREMONY OF MARRIAGE THE MARRIAGE IS ON 1 6 JUNE. SH. NARENDRA GOVADIA IN ANS TO Q. 6 (CPB 58)STATED HE IS HAVING RS. 4-5 THOUSAND. SH. ASHOK KUMAR GOWADIA IN ANS TO Q NO. 9 STATED THAT RS. 10 OR 12 THOUSAND RECEIVED AS GIFT ON THE ENGAG EMENT OF DAUGHTER AND REST(OUT OFF RS. 28601/-) IS SAVIN G WHICH SURRENDER FOR TAX. ALL THESE EVIDENCE SHOWS THAT THERE WERE SAVINGS, G IFT, POCKET MONEY ETC. 9.1 IN THE CASE OF CIT V/S SMT. REKHA BAI 289 ITR 351(MAD) IT HAS BEEN HELD THAT ASSESSEE, HER HUSBAND AND HIS HUF HAVING BEEN ASSESSED TO TAX IN THE PAST AND ASSESSEES SON HAVING ALSO FILED HIS RETURN, TRIBU NAL WAS 102 JUSTIFIED IN HOLDING THAT THE UNDISCLOSED INCOME DI SCOVERED DURING THE SEARCH BELONGED TO THE ASSESSEE HER HUSB AND, HIS HUF AND HER SON AND DIVIDED BETWEEN THEM. 9.2 ALSO REFER JAI KUMAR JAIN V/S ACIT 99 TTJ 744(JP), WHEREIN HELD THAT CASH OF RS. 26,910/- FOUND AT THE ASSESSEES PREMISES IS COVERED BY THE CASH FLOW STA TEMENT OF FAMILY, DEFICIT OF ACTUAL CASH EXPLAINS THE WITH DRAWALS FOR HOUSE HOLD PURPOSE. AMOUNT OF RS. 16,660/- IN T HE ROOM OF CHILDREN IS ACCEPTED AS PETTY SAVINGS OUT O F GIFTS. 10. HENCE IN VIEW OF THE ABOVE SUBMISSIONS THE ADDITIO N SO MADE BY THE AO AND PARTLY SUSTAINED BY THE CIT(A) MAY KINDLY BE DELETED IN FULL. 14. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE CA REFULLY PERUSED THE ENTIRE MATERIAL ON RECORD. GROUND NOS. 1 TO 3 O F REVENUE APPEAL AND GROUND NOS. 2,3 AND 4 OF ASSESSEES APPEAL ARE COMMON ISSUES. THESE GROUNDS ARE PARI MATERIA TO THE GROUNDS IN OT HER BROTHERS CASES, AND THEREFORE, WITH SIMILAR REASONING, WE DISMISS G ROUND NOS. 1 TO 3 OF REVENUES APPEAL AND ALLOW GROUND NOS. 2,3 AND 4 OF ASSESSEES APPEAL. 15. FURTHER GROUND NO. 5 OF ASSESSEES APPEAL IS DI SPOSED OFF IN THE SAME MANNER AS DONE IN ASSESSEES BROTHERS CASES A ND ALLOW THE SAME. 103 16. GROUND NO. 6 IS SIMILARLY DISMISSED. 17. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED AND THAT OF THE ASSESSEE IS PARTLY ALLOWED. 18. TO SUM UP, ALL THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED AND THOSE OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE COURT ON 30 TH AUGUST, 2013. SD/- SD/- (N.K.SAINI) (HARI OM MARATHA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 30 TH AUGUST, 2013. V L /- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT BY ORDER 4. THE CIT(A) 5. THE DR ASSISTANT REGISTRAR ITAT, JODHPUR