MR KAILASH AGRAWAL, Bhopal V. The ACIT Circle 3(1), Bhopal

ITSSA 99/IND/2014

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 1386 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 8 month(s) 4 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 08-12-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 06-10-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 03-04-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJEEV VARSHANEY
• Assessee Lawyers: L N MALIK; MANISH MALIK CAS
• Keywords: Business income; Loose papers; Document seized; Source of fund; Assessment record; Documents seized
• Section: 153A; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI B.C.MEENA, ACCOUNTANT MEMBER I.T.(SS).A.NOS. 98 TO 100/IND/2014 & I.T.A.NO. 254/IND/2014 A.YS : 2007-08 TO 2010-11 MR.KAILASH AGRAWAL, ACIT, 188,PUL BOGDA, VS CIRCLE 3(1), JINSI, JAHANGIRABAD, BHOPAL BHOPAL APPELLANT RESPONDENT PAN NO. ADQPA5194H I.T.(SS).A.NOS. 113 TO 115/IND/2014 & I.T.A.NO. 256/IND/2014 A.YS : 2007-08 TO 2010-11 ACIT, 3(1), MR.KAILASH AGRAWAL, BHOPAL VS 188,PUL BOGDA, JINSI, JAHANGIRABAD, BHOPAL APPELLANT RESPONDENT MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 2 2 ASSESSEE BY : SHRI L.N.MALIK & SHRI MANISH MALIK, CAS DEPARTMENT BY : SHRI RAJEEV VARSHANEY, CIT DR O R D E R PER BENCH THESE ARE SIX APPEALS THREE APPEALS BY THE ASSESS EE AND THREE APPEALS BY THE DEPARTMENT, RELATE TO ASSESSME NT YEARS 2007-08 TO 2010-11. 2. THE SHORT FACTS OF THE CASE ARE AS UNDER. 3. THE BRIEF FACTS OF THE CASE ARE THAT A SEARCH AN D SEIZURE OPERATION U/S 132(1) OF INCOME-TAX ACT, 1961, HAS B EEN CARRIED OUT ON 04.02.2010 AT THE OFFICE-CUM-RESIDEN TIAL PREMISES OF ASSESSEE SITUATED AT 188, PUL BOGDA, JI NSHI, JAHANGIRABAD, BHOPAL. THE ASSESSEE FAMILY CONSISTIN G OF HIS WIFE (SMT. MANORAMA AGRAWAL), HIS SON (SHRI SUNIL A GRAWAL) AND DAUGHTER-IN-LAW (SMT.RENU AGRAWAL) ARE CARRYING OUT DATE OF HEARING : 06.10.2015. DATE OF PRONOUNCEMENT : 08 .1 2 .2015 MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 3 3 BUSINESS IN THE NAME AND STYLE OF M/S. G. S. OIL MI LLS AND M/S. G. S. ROLLER FLOUR MILLS PRIVATE LIMITED. IN R ESPONSE TO THE SEARCH, THE RETURN WAS FILED IN ALL THE YEARS, WHICH READ AS UNDER :- S.NO. A.Y. ORIGINAL RETURN DETAILS RETURNED INCOME U/S 153A ( RS.) ASSESSED INCOME ( RS. ) (A) (B) DATE OF RETURN (C) RETURNED INCOME (RS.) (D) (E) (F) 1 2004-05 13.02.2007 40,200 40,200 40,200 2 2005-06 13.02.2007 96,500 96,500 96,500 3 2006-07 26.05.2006 59,210 60,450 60,450 4 2007-08 31.10.2007 (-)3,14,064 NIL 24,85,482 5 2008-09 30.09.2008 10,77,200 10,78,700 2,95,43,20 0 6 2009-10 12.10.2009 16,55,710 16,55,710 84,54,129 7 2010-11 28.09.2010 7,18,520 NA 1,44,93,451 4. THE COMMON GROUNDS OF DEPARTMENTS APPEALS IN ASSESSMENT YEARS 2008-09 & 2010-11 IN RESPECT OF DE LETING THE ADDITION ON ACCOUNT GROSS PROFIT OF RS. 1,90,69 0/- AND RS. 68,65,500/- FOR ASSESSMENT YEARS 2008-09 AND 2010-1 1 ON ACCOUNT OF INCREASE IN GROSS PROFIT. THE AO HAS MAD E THE ADDITION BY OBSERVING AS UNDER :- THE ASSESSEE IS A PROPRIETOR OF A FIRM KNOWN AS M/S. G. S. MILLS. THIS FIRM IS ENGAGED IN TRADING OF PULSES. APART INCOME FROM CONSTRUCTION AND SALE OF FLATS/SHOPS IN THE MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 4 4 NAME OF CENTER POINT FORMS PART OF BUSINESS INCOME. EARLIER TO THIS YEAR THE SAME BUSINESS WAS CARRIED ON AS PARTNERSHIP FIRM IN WHICH SUNIL AGRAWAL AND PAWAN AGRAWAL WERE PARTNERS OTHER THAN SHRI KAILASH CHAND AGRAWAL HIMSELF. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS FOUND THAT THE ASSESSEE WAS BOOKING PROFITS FROM TWO SOURCES OF INCOME I.E. MANUFACTURING AND TRADING OF PULSES, GRAINS ETC. AND SALE OF SHOPS/FLATS AT CENTER POINT. JAHANGIRABAD, BHOPAL. FOLLOWING KEY FIGURES WERE ABSTRACTED DURING THE EXAMINATION OF FINAL ACCOUNTS PRODUCED BY THE ASSESSEE. MANUFACTURING/TRADING BUSINESS OF PULSES. GRAINS ETC. A.Y. TURNOVER RS. IN LACS GROSS PROFIT (RS. IN LACS % OF G.P. 2007-08 8.57 4.03 47.00 2008-09 97.79 11.663 11.90 MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 5 5 2009-10 89.35 14.17 15.85 2010-11 659.51 22.70 3.44 SALE OF SHOPS/FLATS AT CENTER POINT A.Y. TURNOVER RS. IN LACS GROSS PROFIT (RS. IN LACS % OF G.P. 2007-08 34.46 8.70 25.24 2008-09 34.45 10.38 30.13 2009-10 29.05 9.70 33.40 THE ASSESSEE WAS ASKED TO PROVIDE FOR THE VARIATION IN GROSS PROFIT RATES IN DIFFERENT YEARS IRRESPECTIVE OF THE BUSINESS ACTIVITY BEING THE SAME. ALSO MONTH WISE DETAILS OF VALUATION OF CLOSING STOCK AND WORK-IN- PROGRESS WAS ASKED IN A TABULAR FORM. ALSO THE BASI S OF RECOGNIZING REVENUE WAS ASKED. APART BIFURCATION OF COST OF CONSTRUCTION IN MATERIAL PURCHASES, LABOUR PAYMENTS AND OTHER VARIOUS ADMINISTRATIVE EXPENSES WAS ASKED TO BE SUBMITTED ALONG WITH RELEVANT BILLS , RECEIPTS, VOUCHERS ETC. THE ASSESSEE FAILED TO PRO VIDE AFOREMENTIONED DETAILS DESPITE VARIOUS REMINDERS. CONTEMPLATING THE CHANGE OF BUSINESS FROM PARTNERSH IP MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 6 6 TO PROPRIETORSHIP OF SHRI KAILASH CHAND AGRAWAL THE FIRST YEAR OF OPERATIONS WHERE THE TURNOVER IS ALMO ST NEGLIGIBLE, THE GROSS PROFIT RATIO 47 % CLAIMED BY THE ASSESSEE IS NOT TAKEN AS THE BASE FOR FURTHER OPERATIONAL YEARS. IN SUCCEEDING TWO YEARS THE STAB ILITY OF TURNOVER IS EVIDENT AND AVERAGE GROSS PROFIT (13 .85%) OF SAID YEAR IS TAKEN AS THE PERCENTAGE OF GROSS PR OFIT TO BE ASSESSED. IN THE YEAR 2010-11 THE ASSESSEE IS SHOWING A GROSS PROFIT OF 3.44 % WHICH IS 10.44 % LESS THAN THE AVE RAGE GROSS PROFIT SHOWN IN PRECEDING YEARS. A SEARCH PROCEEDINGS WERE CARRIED ON THE ASSESSEES PREMISES WHERE HE HAS SURRENDERED UNDISCLOSED INCOME, POSSIBILITY CANNOT BE RULED OUT, THAT DUE TO THIS S TOCKS ARE UNDER VALUE DIN THE YEAR CONCERNED TO COVER UP THE LOSSES. ALSO THE BASIS VALUATION OF STOCK IS NOT PR OVIDED BY THE ASSESSEE. THUS, FOLLOWING ADDITIONS ARE MADE ON ACCOUNT OF GROSS PROFIT VARIATIONS TAKING THE PEAK GROSS PROFIT SHOWN BY THE ASSESSEE IN RESPECTIVE YEARS. MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 7 7 MANUFACTURING/TRADING BUSINESS OF PULSES, GRAINS ET C. A.Y. TURNOVER RS. IN LACS GROSS PROFIT (RS. IN LACS % OF G.P. SHOWN BY THE ASSESSEE % OF G.P. ASSESSED AMOUNT OF ADDITION 2007-08 8.57 4.03 47.00 13.85 NIL 2008-09 97.79 11.63 11.90 13.85 190690 2009-10 89.35 14.17 15.85 13.85 NIL 2010-11 659.51 22.70 3.44 13.85 6865500 SALE OF SHOPS/FLATS AT CENTER POINT A.Y. TURNOVER RS. IN LACS GROSS PROFIT (RS. IN LACS % OF G.P. SHOWN BY THE ASSESSEE % OF G.P. ASSESSED AMOUNT OF ADDITION 200 7 - 08 34.46 8.70 25.24 16.42 NIL 200 8 - 0 9 34.45 10.38 30.13 16.42 NIL 2009 - 10 29.05 9.70 33.40 16.42 NIL THUS FOLLOWING ADDITIONS ARE MADE ON ACCOUNT OF GROSS PROFITS VARIATIONS TAKING THE PEAK GROSS PROFIT SHOWN BY THE ASSESSEE IN RESPECTIVE YEARS. ASSESSMENT YEAR AMOUNT 2008 - 09 190690 20 10 - 11 6865500 TOTAL RS. 7056190 MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 8 8 5. THE MATTER CARRIED TO THE LD. CIT(A) AND THE LD. CIT(A) HAS DELETED THE ADDITION BY OBSERVING AS UNDER :- 7.3 APPELLANT'S SUBMISSIONS ALONG WITH ASSESSMENT ORDER AND RECORDS HAVE BEEN CONSIDERED CAREFULLY. THE BUSINESS OF M/S G.S. OIL MILLS HAS BEEN CONVERTED FROM PARTNERSHIP FIRM TO A PROPRIETORSHIP CONCERN OF THE APPELLANT FROM THE YEAR 2007. AO HIMSELF HAS GIVEN CONSIDERATION TO THIS FACT AND HAS ACCORDINGLY APPLIED AVERAGE GROSS PROFIT RATE OF NEXT TWO YEARS SHOWN BY THE APPELLANT TO ARRIVE AT ASSESSED GROSS PROFIT RATE OF 13.85 %. HOWEVER, IT IS SEEN FROM RECORDS THAT ON SIMILAR BUSINESS OF MANUFACTURING/TRADING OF PULSES/GRAINS CARRIED ON BY M/S. G. S. OIL MILLS, GROSS MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 9 9 PROFIT RATE HAS BEEN SHOWN AND ASSESSED AS UNDER FOR EARLIER 3 YEARS OF THE FIRM AND SUBSEQUENT YEARS OF SAME BUSINESS CARRIED ON IN PROPRIETORSHIP CAPACITY BY THE APPELLANT : A.Y. TURNOVER RS.IN LACS GROSS PROFIT RS. IN LACS % GROSS PROFIT SHOWN % GROSS PROFIT ASSESSED ADDITION MADE (RS.) 2004-05 363.03 11,59 3,19 6.23 11,04,000 2005-06 602.99 28.44 4,72 6.23 9,11,000 2006-07 590.82 36.81 6.23 6.23 NIL 2007-08 8.57 4.03 47 13.85 NIL 2008-09 97.79 11.63 11.9 13.85 1,90,690 2009-10 89.35 14.17 15.85 13.85 NIL 2010-11 659.51 22.7 3.44 13.85 68,65,500 SIMILARLY IN RESPECT OF SALE OF PLOTS/FLATS AT CENTRE POINT, THE POSITION IS AS UNDER :- A.Y. TURNOVER RS.IN LACS GROSS PROFIT RS. IN LACS % GROSS PROFIT SHOWN % GROSS PROFIT ASSESSED ADDITION MADE (RS.) 2004-05 117.37 19.28 16.42 16.42 NIL 2005-06 168.38 18.69 11.10 16.42 8,96,000 2006-07 147.97 05.51 00.37 16.42 23,75,000 2007-08 34.46 8.70 25.24 16.42 NIL 2008-09 34.45 10.38 30.13 16.42 NIL 2009-10 29.05 9.70 33.40 16.42 NIL MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 10 10 THUS THE APPELLANT IS FOUND TO HAVE BEEN DECLARING WIDELY VARYING GROSS PROFIT BETWEEN 3.19% TO 15.85% ON SAME BUSINESS FOR THESE YEARS EXCEPT FOR ASSESSMENT YEAR 2007-08 WHERE IT HAS BEEN SHOWN @ 47% THOUGH THE TURNOVER IS ALSO LEAST AND UNCOMPARABLE FOR THAT YEAR AS COMPARED TO OTHER YEARS AND IT BEING THE 1 ST YEAR OF FUNCTIONING AS PROPRIETORSHIP CONCERN CONVERTED FROM PARTNERSHIP FIRM. SAME AO HAS ASSESSED GROSS PROFIT @ 6.23 % FOR ASSESSMENT YEAR 2004-05 TO 2006-07 VIDE SEPARATE SIMILAR ASSESSMENT ORDER PASSED U/S 153A IN CASE OF M/S G. S. OIL MILLS. FOR SAME BUSINESS, IT HAS NOW BEEN ASSESSED @ 13.85% FOR ASSESSMENT YEARS 2007-08 TO 2010-11. FOR THE YEARS UNDER PRESENT APPEAL, IT HAS BEEN DONE SO ON THE GROUND THAT SEPARATE TRADING AND PROFIT AND LOSS ACCOUNT NOT PRODUCED FOR TWO DISTINCT BUSINESS OF TRADING/MANUFACTURING OF GRAINS/PULSES AND FOR SALE OF SHOPS/FLATS. AS MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 11 11 PER THE A.O., THE APPELLANT HAS ALSO FAILED TO GIVE MONTH-WISE DETAILS OF VALUATION OF CLOSING STOCK, WORK-IN-PROGRESS AND BIFURCATION OF VARIOUS TRADING, MANUFACTURING AND OTHER EXPENSES. FROM PERUSAL OF ASSESSMENT RECORDS, IT IS SEEN THAT FIRST DETAILED QUESTIONNAIRE, INCORPORATING SEIZED DOCUMENTS, HAS BEEN ISSUED BY THE AO. ON 31.10.2011 FIXING APPELLANT'S CASES FOR 04.11.2011. NO QUERY HAS BEEN RAISED REGARDING DECLARED GROSS PROFIT AND JUSTIFICATION OF THE SAME FOR ANY OF THESE YEARS. THE APPELLANT HAS MADE SUBMISSIONS VIDE LETTER DT 04.11.2011. THEREAFTER, VIDE LETTER DTD 14.12.2011, APPELLANT'S AR HAS APPEARED AND FILED LETTER REGARDING VALUATION OF HOUSE E- 4/170, ARERA COLONY IN RESPONSE TO ITS PROPOSED VALUATION VIDE LETTER DTD 13.12.2011 OF THE AO. THEN NOTICES U/S 143(2) BEEN ISSUED ON 16.12.2011 AND 23.12.2011 FIXING THE APPELLANTS CASES FOR 23.12.2011 AND MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 12 12 27.12.2011.VIDE ORDER SHEET ENTRY DTD 23.12.2011, THE APPELLANT HAS BEEN REPRESENTED THROUGH HIS AR - SHRI R.C. BAHETI AND SHRI SUNIL AGARWAL THE PARTNER. ALONG WITH OTHER DETAILS THE APPELLANT HAS BEEN ASKED TO JUSTIFY THE VARIATION IN G.P. IN TRADING AND SALE OF FLAT/SHOP. VIDE LETTER DTD 26.12.2011, THE APPELLANT HAS BEEN ASKED TO EXPLAIN AS TO WHY PEAK GROSS PROFIT BE NOT APPROXIMATED FOR HIS TRADING BUSINESS AND SALE OF FLATS/PLOTS. VIDE LETTER DATED 26.12.2011, THE APPELLANT HAS ENCLOSED ITEM-WISE DETAILS OF ITEMS TRADED/MANUFACTURED BY M/S. G. S. OIL MILLS FOR TWO SEPARATE PERIODS OF ASSESSMENT YEARS 2004-05 TO 2007-08 AND 2008-09 TO 2010-11. IT HAS ALSO SUBMITTED AS UNDER BEFORE AO :- '5(I) THE ASSESSEE MAINLY HAVING TWO ACTIVITIES I.E. MANUFACTURING, TRADING IN CEREAL AND PULSES ETC. AND CONSTRUCTION AND SALE OF SHOPS AND MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 13 13 FLATS IN CENTRE POINT BUILDING. THE BUSINESS WAS RUN IN PARTNERSHIP UNDER G.S. OIL MILL UPTO 06- 03-2006 AND FROM 07-03-2006 BUSINESS OF G.S. OIL MILL IS CARRIED ON BY MR. KAILASH AGARWAL AS PROPRIETOR. UPTO FINANCIAL YEAR 2005-06 G..S. OIL MILL WAS CARRYON ACTIVITY OF MANUFACTURING AND SALE OF VARIOUS KIND OF DAL AND BESAN, THE GROSS PROFIT IN ALL TYPE OF DAL ARE NOT SIMILAR. THE SALE PRICE AND GROSS PROFIT ARE DEPEND UPON MARKEL CONDITION, GOVERNMENT POLICY, AVAILABILITY OF MATERIAL, WEATHER/RAIN, COMPETITION AND DECISION TAKEN. GROSS PROFIT/LOSS IS ALSO BASED ON HOLDING CAPACITY OF MATERIAL AND FINISHED PRODUCT SOMETIME. THE PRICE OF DAL, BESAN ALWAYS FLUCTUATING SOMETIME DAILY. THUS PEAK GROSS PROFIT IS NOT AT ALL THE BASIS TO DETERMINE PROFIT. IN CASE OF MANUFACTURING/PROCESSING CONCERN, THE PERIOD TAKEN FROM THE DATE OF PROCUREMENT OF RAW MATERIAL TO THE DATE OF SALE OF FINISHED PRODUCT MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 14 14 IS VERY IMPORTANT. THERE MUST BE LOSS IN CASE OF DOWN WARD TREND NO PROFIT CAN BE ESTIMATED OR DETERMINED IN CASE OF PROCESSING OF DAL IT DEPEND UPON MARKET CONDITION. THE CHART SHOWING SALE OF INDIVIDUAL PRODUCT FROM FINANCIAL YEAR 2003-04 TO 2006-07 ATTACHED HEREWITH. THE ASSESSEE MAINTAINING REGULAR AND PROPER BOOKS OF ACCOUNT WITH QUANTITATIVE DETAILS DULY AUDITED ONLY GROSS PROFIT RATE IS NOT A YARD STICK TO JUDGE THE WORKING RESULT. IN FINANCIAL YEAR 2006-07 MAINLY GRAM WAS SOLD OUT OF OLD STOCK HENCE EXCESS GROSS PROFIT EARNED. FROM FINANCIAL YEAR 2007-08 TO 2009-10 EXCLUSIVELY TRADING ACTIVITIES WERE CARRIED OUT WHICH WHOLLY DEPEND UPON MARKET CONDITION. DURING THE FINANCIAL YEAR 2008-09 URAD SALE RATE INCREASED SUDDENLY ON WHICH ASSESSEE EARNED GROSS PROFIT @ 24.90% .DURING THE MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 15 15 FINANCIAL YEAR 2009-10 SALE OF WHEAT WAS RS.4,63,26,840/- ON WHICH GROSS PROFIT EARNED @ 2.90%.DURING THIS YEAR GOVERNMENT PROCURED WHEAT DIRECTLY FROM AGRICULTURIST AT HIGHER RATE AND ALSO PROVIDE BONUS PRICE TO THEM. THE PREVAILING MARKET PURCHASE RATE WAS ALMOST AT PAR TO THE GOVERNMENT PROCUREMENT RATE. SALE RATE WAS ALSO UNDER THEIR CONTROL. MOREOVER, WE HAVE CARRIED OUT FAST TURNOVER DUE TO APPREHENSION OF RESTRICTION OF STOCK HOLDING. THE TURNOVER OF WHEAT IN PREVIOUS YEAR WAS RS.34.97 LAKH INCREASED TO RS.463.27 LAKH BECAUSE OF FAST TURNOVER AND LOW RATE OF GROSS PROFIT. THE CHART SHOWING YEAR WISE ITEM WISE TURNOVER WITH GROSS PROFIT RATE FROM FINANCIAL YEAR 2007-08 TO 2009-10 ENCLOSED. ' UNDER THE FACTS AND CIRCUMSTANCES OF CASE IT IS THAT GROSS PROFIT DISCLOSED AS PER BOOKS OF ACCOUNT IN CASE OF PROCESSING PERIOD AS WELL AS MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 16 16 IN TRADING PERIOD PLEASE BE ACCEPTED' SIMILAR SUBMISSIONS, AS UNDER, HAVE BEEN MADE FOR CONSTRUCTION ACTIVITIES: ' 5(II) TWO METHODS OF ACCOUNTING FOR A ENTERPRISE UNDERTAKING CONSTRUCTION ACTIVITIES COMMONLY FOLLOWED I.E. PERCENTAGE OF COMPLETION METHOD AND THE COMPLETE CONTRACT METHOD. UNDER PERCENTAGE OF COMPLETION METHOD, THE AMOUNT OF REVENUE/PROFIT RECOGNIZED IS DETERMINED BY REFERENCE TO THE STAGE OF COMPLETION OF ACTIVITY AT THE END OF EACH ACCOUNTING YEAR. WE ARE ACCOUNTING ALL DIRECT AND INCIDENTAL EXPENSES UNDER VARIOUS HEADS AND GROUPS UNDER BUILDING CONSTRUCTION IN PROGRESS. FROM THAT ACCOUNT COST OF CONSTRUCTION (DIRECT AND INCIDENTAL) ATTRIBUTABLE TO SALE OUT PORTION, TRANSFER TO BUILDING ACCOUNT AT COST PRICE. THUS SALE PRICE MINUS COST OF CONSTRUCTION AND VALUE OF LAND ATTRIBUTABLE TO SALE IS PROFIT. THE REMAINING MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 17 17 AMOUNT IN BUILDING CONSTRUCTION ACCOUNT IS WORK IN PROGRESS VALUED AT COST AND REFLECTED IN BALANCE SHEET UNDER THE HEAD BUILDING COST IN PROGRESS. SINCE WORK. IN PROGRESS IS ALWAYS VALUE AT COST HENCE GROSS PROFIT ON PORTION SALE OUT LATER IS MORE COMPARE TO PORTION SALE OUT IN EARLY PERIOD, BECAUSE BOOK COST IS LESS ON PORTION SALE OUT LATER. EXCESS INTEREST CHARGED BY BANK IN EARLIER YEAR WAS REVERTED IN THE FINANCIAL YEAR 2006-07 BY RS. 11,14,191/- SALE PRICE OF SHOPS/FLATS AFFECT VARIOUS FACTOR SUCH AS VASTUSHASTRA. PREVIOUS OCCASION, MIDDLEMAN ROLE, FLOOR, NEIGHBORHOOD, NEARNESS TO WORKING PLACE, REQUIREMENT OF FOND ETC. HAD THE COMPLETE CONTRACT METHOD IS FOLLOWED THE OVERALL GROSS PROFIT (AFTER DEDUCTING ALL COST, DIRECT EXPENSES AND VALUE OF LAND) ON SALE OF RS. 5,32,20,075/- WOULD HAVE BEEN APPROX. 13.57%. IN ADDITION TO ABOVE THE UNDER NOTED AMOUNT OFFERED FOR TAX, IF CONSIDER IT WILL INCREASE GROSS PROFIT RATE. MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 18 18 ASSESSMENT YEAR AMOUNT 2004-05 2,50,400/- 2005-06 11,41,500/- 2006-07 3,43,800/- 17,35,700/- UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE OF ADOPTION PEAK GROSS PROFIT RATE DOES NOT ARISE AT ALL. ' THESE SUBMISSIONS HAVE BEEN MADE VIDE LETTER DTD 26.12.2011 WHEN APPELLANT'S AR- SHRI R.C. BEHATI- HAS APPEARED. A.O. HAS NOTED ON ORDER SHEET THAT CASE DISCUSSED. NO FURTHER OBSERVATIONS MADE NOR ANY OTHER DETAILS/EXPLANATION CALLED FOR BEFORE PASSING OF ASSESSMENT ORDER ON 30.12.2011. THUS A.O. IS FOUND TO HAVE REJECTED APPELLANT'S SUBMISSIONS WITHOUT GIVING ANY REASON OR JUSTIFICATION FOR THE SAME. THOUGH THE APPELLANT HAS MADE DISCLOSURE OF RS.20,00,000/- FOR DISCREPANCIES IN DEPOSITS AND EXPENSE ETC. BUT MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 19 19 THE FACT REMAINS THAT APPELLANT'S AUDITED BOOKS OF ACCOUNTS HAVE BEEN ACCEPTED BY THE A.O. HIMSELF. NO SPECIFIC DEFECT HAS BEEN MENTIONED THEREIN EITHER BY THE A.O. OR THE AUDITOR. EVEN DURING THE COURSE OF SEARCH OPERATIONS, NO INCRIMINATING DOCUMENTS ON THIS ISSUE OF GROSS PROFIT BEEN FOUND OR SEIZED. TOTAL SALES AND PURCHASES, AS DECLARED BY THE APPELLANT, HAVE ALSO BEEN ACCEPTED BY THE A.O. THUS, THERE IS NO REASON TO NOT ACCEPT THE DECLARED TRADING RESULTS OF THE APPELLANT. THOUGH THE APPELLANT IS SHOWING WIDELY VARYING GROSS PROFIT RATES FOR ALL THE 7 YEARS BUT IT IS FOUND TO HAVE DULY EXPLAINED THE REASONS THEREFOR. FOR A.YS.2004- 05 TO 2006-07, A.O. HIMSELF HAS ASSESSED GROSS PROFIT @ 6.23% FOR SAME BUSINESS CARRIED ON BY M/S G.S. OIL MILLS, THOUGH IN PARTNERSHIP CAPACITY THE APPELLANT HIMSELF HAS DECLARED SUCH GROSS PROFIT @ 47%, 11.9% AND 15.85% FOR ASSESSMENT YEARS 2007-08 TO 2009-10. MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 20 20 HOWEVER, THE TURNOVER IS NOT AT ALL FOUND COMPARABLE WITH EARLIER YEARS, AS MENTIONED IN CHART ABOVE. FURTHER, THE SAME AO HAS TAKEN DECLARED PEAK GROSS PROFIT @ 16.42% OF ASSESSMENT YEAR 2004-05 FOR ALL THE YEARS I.E. ASSESSMENT YEAR 2004-05 TO 2009-10 IN RESPECT OF ANOTHER BUSINESS OF SALE OF SHOPS/FLATS AT CENTRE POINT CARRIED BY THE SAME APPELLANT IN SIMILAR CAPACITY OF PARTNERSHIP AS WELL AS PROPRIETORSHIP AND NO ADDITION MADE. FOR BUSINESS OF PULSES/GRAINS AO HAS TAKEN DIFFERENT BASIS FOR TWO DIFFERENT PERIODS WITHOUT ANY JUSTIFICATION FOR THE SAME. 7.4 KEEPING IN VIEW ABOVE AND AFTER PERUSAL OF RECORDS, ADDITIONS MADE FOR VARIATION IN GROSS PROFIT RATE OF THE APPELLANT BY TAKING TWO YEARS IN ASSESSMENT YEAR 2008-09 AND 2009-10 AVERAGE IN RESPECT OF PULSES/GRAINS BUSINESS IS NOT FOUND SUSTAINABLE. ACCORDINGLY, ADDITION OF MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 21 21 RS. 1,90,690/- AND RS. 68,65,500/- MADE FOR ASSESSMENT YEARS 2008-09 AND 2010-11 RESPECTIVELY IS, HEREBY DELETED. 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PA RTIES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE AO HAS MADE THE ADDITION ON ACCOUNT OF GRO SS PROFIT RATE FOR TWO YEARS ON THE GROUND THAT THE GROSS PRO FIT RATE OF 13.85% BASED ON AVERAGE TWO YEARS GROSS PROFIT. DUR ING THE COURSE OF SEARCH, NO MATERIAL WAS FOUND. THE AO HAS DETERMINED THE GROSS PROFIT RATE ON AVERAGE RATE OF TWO YEARS. THE LD. CIT(A) WAS OF THE VIEW THAT THE GROSS PROFI T RATES FOR TWO CANNOT BE SIMILAR. THE GROSS PROFIT DEPENDS UPON TH E MARKET CONDITIONS SPECIFIED IN COMMODITIES DEALT BY THE AS SESSEE. THEREFORE, THE LD. CIT(A) CONSIDERING THE GROSS PRO FIT AND COMPARING THE GROSS PROFIT OF MARKET HAS DELETED TH E ADDITION AND DURING THE COURSE OF HEARING, THE LD. DR COULD NOT BRING ANY CONTRARY MATERIAL AGAINST THE FINDING OF THE LD . CIT(A). THEREFORE, WE ARE OF THE VIEW THAT THE LD. CIT(A) I S JUSTIFIED IN HIS ACTION AND OUR INTERFERENCE IS NOT REQUIRED. MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 22 22 7. IN THE RESULT, THE DEPARTMENTAL APPEALS IN RESPECT OF GROSS PROFIT FOR TWO YEARS ARE DISMISSED. 8. THE NEXT COMMON GROUND PERTAINS TO ADDITION OF RS. 25,60,758/- MADE FOR DISALLOWANCE OF INTEREST PAID TO BANK AND OTHERS WHILE MAKING THE YEAR-WISE ADDITION AS P ER THE ASSESSMENT ORDER, WHICH READS AS UNDER :- THE ASSESSEE HAS CLAIMED AN EXPENDITURE ON ACCOUNT OF INTEREST PAID TO BANK AND OTHERS IN THE ASSESSMENT YEARS 2007-08, 2008-09, 2009- 10 AND 2010-11. ON ANALYSIS OF FINAL ACCOUNTS, IT WAS FOUND THAT CREDIT FACILITIES IN THE FORM OF TERM LOANS AND CASH CREDIT LIMITS ARE ENJOYED BY THE ASSESSEE ON WHICH THE INTEREST OF RS. 10,66,882/- RS. 1,44,310/-, RS. 3,93,135/- AND RS. 9,59,431/- HAS BEEN PAID IN RESPECTIVE YEARS. SIMULTANEOUSLY HUGE AMOUNTS OF DEBTORS AND ADVANCES IS APPEARING IN FINAL ACCOUNTS. OUT OF SAID DEBTORS AND ADVANCES RS. 113.83 LACS IN 2007-08, RS. 178.40 LACS IN 2008-09, RS. 179.21 LACS IN 2009-10 AND RS. 155.61 LACS MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 23 23 IN 2010-11 PERTAINS TO M/S. G. S. ROLLER FLOUR MILLS PVT.LTD., ( RS. 97.21 LACS TO PAWAN AGRAWAL) A SISTER CONCERN OF THE ASSESSEE. NO TRANSACTION OF PURCHASES OR SALES ARE ENTERED INTO WITH THE SAID SISTER CONCERN AGAINST WHICH THE PAYMENTS MADE CAN BE JUSTIFIED. IT IS EVIDENT FROM THE ABOVE ANALYSIS FROM THE FUNDS PROCURED AS LOANS FROM BANKS AND OTHERS HAS BEEN ADVANCED TO SISTER CONCERNS WITHOUT ANY BUSINESS DEALS. ON THE CONTRARY, THE INTEREST PAID ON SUCH LOANS IS CLAIMED AS AN EXPENDITURE WHICH IS NOT JUSTIFIED. ACCORDINGLY, THE SAID AMOUNT OF EXPENDITURE IS BEING ADDED TO THE INCOME OF THE ASSESSEE FOR FOLLOWING ASSESSMENT YEARS. ASSESSMENT YEAR AMOUNT 2007 - 08 1066882 20 08 - 09 144310 2009 - 10 393135 2010 - 11 959431 TOTAL RS. 2563758 MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 24 24 9. THE MATTER CARRIED TO THE LD. CIT(A) AND THE LD. CI T(A) HAS PARTLY DELETED THE ADDITION BY OBSERVING AS UNDER : - 8.3 APPELLANT'S SUBMISSIONS ALONG WITH ASSESSMENT ORDER AND RECORDS HAVE BEEN CONSIDERED CAREFULLY. T HE FACT IS THAT M/S. G. S. OIL MILLS, OF WHICH APPELLANT IS THE PROPRIETOR, HAS SHOWN INTEREST FREE UNSECURED LOANS TO FAMILY MEMBERS OR SISTER CONCERNS. A.O. HAS DISALLO WED THE ENTIRE SUM OF INTEREST PAID TO BANK SOLELY ON T HE GROUND THAT INTEREST FREE AMOUNTS HAVE BEEN ADVANCE D TO SISTER CONCERNS. INTEREST PAID TO BANKS FOR VEHI CLE LOAN, WAREHOUSE RECEIPT, STOCK LOAN IS CERTAINLY FO R APPELLANT'S BUSINESS PURPOSES. A.O. IS FOUND TO HAV E MADE THE IMPUGNED YEAR WISE ADDITION MORE ON SUSPICION AND PRESUMPTION WITHOUT ESTABLISHING THE NEXUS BETWEEN THE ADVANCES GIVEN TO THE FAMILY MEMBERS AND SISTER CONCERNS VIS-A-VIS AMOUNT OF LOA NS TAKEN FROM THE BANKS ON WHICH INTEREST AND COMMISSI ON PAID BY THE APPELLANT DURING THESE YEARS. A.O. HAS MADE THE ADDITION ON THE PRESUMPTION THAT THE MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 25 25 APPELLANT HAS DIVERTED INTEREST BEARING FUNDS FOR MAKING INTEREST FREE ADVANCES DURING THESE YEARS. T HE SISTER CONCERN VIZ. M/S. G .S. ROLLER FLOUR MILL PVT LTD HAS ALSO TAKEN HUGE LOANS FROM BANKS ON WHICH INTEREST IS BEING PAID BY IT. AMOUNT OF RS. 1 ,25,00,000/- GIVEN TO SHRI PAWAN AGARWAL - SON OF THE APPELLANT DURING TH E PERIOD 29.12.2006 TO 09.01.2008 IS IN PURSUANCE OF FAMILY SETTLEMENT AFTER HIS SEPARATION FROM THE FIR M AND FAMILY, AS PER DETAILS GIVEN BY THE APPELLANT. 8.4 KEEPING IN VIEW ABOVE AND AFTER PERUSAL OF RECO RDS AND CONCERNED BOOKS OF ACCOUNTS AND APPELLANT'S SUBMISSIONS, A.O. IS NOT FOUND JUSTIFIED IN MAKING DISALLOWANCE OF ENTIRE BANK INTEREST WITHOUT ESTABLISHING THE NEXUS BETWEEN BORROWED FUNDS AND THEIR ADVANCEMENT, AS INTEREST FREE FUNDS, TO SISTE R CONCERNS AND FAMILY MEMBERS FOR NON BUSINESS PURPOSES. THE DISALLOWANCE IS PERMISSIBLE ONLY TO T HE EXTENT OF INCREASED AMOUNT OF SUCH INTEREST FREE LO ANS TO SISTER CONCERN I.E. M/S. G .S. ROLLER FLOUR MILL PVT LTD MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 26 26 DURING THE RELEVANT ASSESSMENT YEAR. AS PER APPELLA NT'S BOOKS OF ACCOUNTS, YEAR WISE ACCOUNT OF M/S O.S. ROLLER FLOUR MILL PVT LTD IN THE BOOKS OF M/S G .S. OIL MILLS, ON THE BASIS OF TRANSACTIONS MADE DURING THE YEAR, IS FOUND AS UNDER: A.Y. M/S. G.S.ROLLER FLOUR MILLS A/C M/S. G.S.ROLLE R FLOUR MILLS (BUILDING)A/C NET INCREASE/DEC REASE DURING THE YEAR (1) (2A) 2(B) 2(C) 3(A) 3(B) 3 RS. 2004-05 96,18,170/- 1,10,03,170 13,85,000/- 8,51,30 0/- 33,26,300/- 24,75,500 38,60,000/- 2005-06 1,10,03,170/- 48,69,912/- (-)61,33,258/- 33 ,26,300/- 34,76,300/- 1,50,000/- (-)59,83,258/- 2006-07 48,69,912/- 37,99,912/- (-)10,70,000/- 34,7 6,300/- 45,26,300/- 10,50,000/ - (-)20,000/- 2007-08 37,99,912/- 67,97,912/- 29,98,000/- 45,26,3 00/- 45,26,300/- NIL 29,98,000;/- 2008-09 67,97,912/- 1,77,80,987/- 1,09,83,075/- TFD TO REGULAR A/C & A/C CLOSED TFD TO REGULAR A/C & A/C CLOSED TFD TO REGULAR A/C & A/C CLOSED 1,09,83,075/- 2009-10 1,77,80,987/- 1,78,61,029/- 80,042/- ------ ------- DO ----------- 80,042/- 2010-11 1,78,61,029/- 57,80,987/- (-)1,20,80,042/- ------------- DO ----------- ON THE BASIS OF ABOVE AND CONSIDERING INTEREST RATE @ 18% P.A. INTEREST ON THESE ADVANCES COMES TO RS.6,94,800/-, RS.5,39,640/-, RS. 19,76,953/- AND RS.14,407/- FOR A.YS. 2004-05, 2007-08, 2008-09 AND 2009-10 RESPECTIVELY. NO SUCH INTEREST IS FOUND CHARGEABLE FOR A.YS. 2005-06, 2006-07 AND 2010-11 O N THE BASIS OF DECREASED BALANCE. ACCORDINGLY, YEAR-W ISE AMOUNT OF INTEREST DISALLOWANCE SUSTAINABLE COMES T O RS.6,94,800/-, RS.5,39,640/-, RS.19,76,953/- AND RS . 1 4,407/- FOR A.YS. 2004-05, 2007-08, 2008-09 AND MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 27 27 2009-10 RESPECTIVELY. THEREFORE, ADDITION OF RS.5,39,640/-, RS. 19,76,953/- AND RS. 14,407/- FOR A.YS. 2007-08, 2008-09 AND 2009-10 RESPECTIVELY IS, HEREBY, CONFIRMED IN CASE OF THE APPELLANT. SIMILAR ADDITION OF RS.6,94,800/- MADE FOR A.Y. 2004-05 SHA LL BE SEPARATELY CONSIDERED IN CASE OF M/S G.S. OIL MI LLS - THE PARTNERSHIP FIRM- FOR A.Y. 2004-05. ADDITION OF RS.9,59,431/- MADE FOR A. Y. 2010-11 IS NOT FOUND SUSTAINABLE, AND, HEREBY DELETED. 10. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PAR TIES. WE FIND THAT THE AO HAS MADE THE ADDITION ON THE GR OUND THAT THE FUNDS BORROWED FROM THE BANK HAVE BEEN ADVANCED TO SISTER CONCERN, NAMELY, M/S. G. S. ROLLING AND FLOU R MILLS AND MR.PAWAN AGRAWAL WITHOUT ANY INTEREST. THE AO WITHO UT PROVING THE NEXUS HAS HELD THAT THE FUNDS OBTAINED FROM THE BANK HAS BEEN DIVERTED TO SISTER CONCERN. THE ASSES SEE HAS GIVEN THE EXPLANATION BEFORE THE AO AND CIT(A) THAT THE ASSESSEE HAS TAKEN THE BANK LOAN AND UTILIZED THE A MOUNT FOR MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 28 28 BUSINESS PURPOSE. THE ASSESSEE FOR THE ASSESSMENT Y EAR 2007- 08 HAS GIVEN THE DETAILS THAT IN CASE OF M/S. G. S. ROLLING AND FLOUR MILLS, NO FRESH LOAN OR ADVANCE WAS GIVEN DUR ING THE ASSESSMENT YEAR 2007-08 AND THE ASSESSEE HAS OBTAIN ED LOAN FROM FAMILY MEMBERS ON WHICH NO INTEREST WAS PAID. THE ASSESSEE HAS ALSO TAKEN THE LOAN FROM WHICH NO INTE REST WAS CHARGED. THEREFORE, CONSIDERING THE DETAILED SUBMIS SIONS FOR ASSESSMENT YEAR 2008-09, 2009-10 AND 2010-11, THE L D. CIT(A) CONSIDERING THE SUBMISSION OF THE ASSESSEE H AS DELETED THE ADDITION AND OUR INTERFERENCE IS NOT REQUIRED. GROUND FAILS. 11. THE DEPARTMENT IS IN APPEAL AGAINST DELETION OF ADD ITION FOR ASSESSMENT YEAR 2010-11 BY GROUND NO. 3 AND THE ASSESSEE IS IN APPEAL FOR ASSESSMENT YEAR 2007-08 A ND 2008- 09, FOR CONFIRMING THE ADDITION OF RS. 5,39,640/- A ND RS. 19,76,953/-. 12. THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED BEFORE US THAT THE ASSESSEE HAS PAID THE BANK INTEREST ON THE BORROWED FUNDS ADVANCED TO THE SISTER CONCERN, NAMELY G.S. R OLLING AND FLOUR MILLS AND MR. PAWAN AGRAWAL WITHOUT INTEREST. THE ASSESSEE SUBMITTED THAT NO FRESH LOAN OR ADVANCE WA S GIVEN MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 29 29 DURING THE ASSESSMENT YEAR 2007-08. ONLY RS. 29,98, 000/- LOAN WAS GIVEN TO M/S. G. S. ROLLING AND FLOUR MILL S. THE ASSESSEE HAS OBTAINED THE LOAN FROM FAMILY MEMBERS ON WHICH NO INTEREST HAD BEEN MADE AND THE AO HAS DISALLOWED THE INTEREST ON ASSUMPTION AND SUSPICION. 13. SIMILAR SUBMISSION WAS MADE FOR ASSESSMENT YEAR 200 8- 09 AND OUR INTERFERENCE IS NOT REQUIRED. 14. IN THE RESULT, THE ASSESSEES APPEAL AND DEPARTMENT AL APPEALS ARE DISMISSED. 15. COMMON GROUND IN ASSESSMENT YEAR 2007-08, 2008-09 AND 2009-10 RELATE TO CONFIRMING THE ADDITION ON AC COUNT OF PRICE VARIATION IN SALE OF SHOPS/FLATS AT CENTRE PO INT COMPLETELY IGNORING THE MATERIAL FACTS ON RECORD. 16. THE SHORT FACTS OF THE CASE ARE AS UNDER. 17. DURING THE COURSE OF SEARCH PROCEEDINGS, VARIOUS AGREEMENTS, REGISTERS, RECEIPTS AND LOOSE PAPERS RE LATING TO SALE OF SHOPS AND FLATS AT CENTRE POINT WERE FOUND AND SEIZED. THE ASSESSEE WAS ASKED TO GIVE THE EXPLANATION IN R ESPECT OF PAYMENT RECEIVED FROM THE PURCHASER OF VARIOUS SHOP S/FLATS WHETHER IT WAS RECORDED IN THE BOOKS OF ACCOUNT OR NOT. THE MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 30 30 ASSESSEE FAILED TO PROVIDE THE AFOREMENTIONED DETAI LS REQUIRED BY THE ASSESSING OFFICER. THE ASSESSEE FAILED TO PO INT OUT THE DIFFERENCE IN THE SALE DEED AND AGREEMENT WHICH IS ON A/BS- 13 TO A/BS-141. THEREFORE, THE AO HAS MADE THE ADDI TION FOR THREE YEARS BY OBSERVING AS UNDER :- PARTICULARS OF LPS DURING SEARCH A.Y. 2007-08 A.Y. 2008-09 A.Y. 2009-10 A/BS-14 2,00,000 A/BS-22 4,94,000 A/BS-26 1,14,000 A/BS-38 1,86,000 A/BS-41 86,600 A/BS-64 32,000 A/BS-72 75,500 A/BS-78 3,43,000 A/BS-79 1,48,000 A/BS-80 2,50,000 A/BS-81 50,000 A/BS-82 1,00,000 A/BS-90 3,97.000 A/BS-126 1,66,000 A/BS-133 1,00,000 A/BS-141 1,35,000 14,18,600 11,83,200 2,75,500 ON THE BASIS OF SAID GROUNDS AND INFORMATION NOT PR OVIDED BY THE ASSESSEE WE CANNOT RULE OUT THE POSSIBILITY OF FURTHER UNDISCLOSED INCOME. ACCORDINGLY, THE DIFFER ENCE OF MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 31 31 AMOUNTS AS PER ANNEXURE ENCLOSED IS BEING ADDED TO THE INCOME OF THE ASSESSEE FOR FOLLOWING ASSESSMENT YEA RS. A.Y. AMOUNT 2007-08 14,18,600 2008-09 11,83,200 2009-10 2,75,500 TOTAL RS. 2,88,77,300 18. THE MATTER CARRIED TO THE LD. CIT(A) AND THE LD. C IT(A) HAS CONFIRMED THE ADDITION. 19. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, BEFORE THE AO AND CIT(A), THE ASSESSEE HAS SUBMITTED THE WRITT EN SUBMISSION, WHICH READS AS UNDER :- GROUND NO. 1(B) ASSAILS ADDITION OF RS. 14,18,600/- PRESUMING THE SAME AS PRICE VARIATION IN BUILDING SALE WITHOUT CO-RELATING WITH EVIDENCE/DOCUMENT/INFORMATION AVAILABLE ON RECORD AND SUBMITTED BY THE APPELLANT DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE AO MADE THE ADDITION IN PARA 6 OF HIS ORDER PURELY ON THE GROUND THAT TH E APPELLANT FAILED TO EXPLAIN AND PROVIDE DETAILS AS MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 32 32 REQUIRED FOR DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE AO, HOWEVER, ALLEGES THAT THE DIFFERENCE IN THE SALE DEEDS/AGREEMENTS POINTED OUT DURING THE SEARCH OPERATIONS VIDE A/BS-13 TO A/BS- 141 WERE NOT EXPLAINED BY THE APPELLANT TO HIS SATISFACTION. IT HAS FURTHER BEEN NOTICED THAT THE FLATS AND SHOPS OF SAME SIZES AND SOME FIATS ARE SOLD AT DIFFERENT RATES. THE ADDITION FOR THE YEAR UNDER CONSIDERATION IS RS 14.18,600/-. IT HAS TO BE FIRST LY SUBMITTED THAT THE APPELLANT HAD SURRENDERED A SUM OF RS.20 LACS IN RESPECT OF UNDISCLOSED INCOME FOR THE ASSESSMENT YEARS FALLING IN THE ASSESSMENT YEARS CONTEMPLATED U/S. I53A OF THE ACT. THE APPELLANT HA S ASSAILED THE ADDITION MADE BY THE ASSESSING OFFICER IN THE SUBMISSIONS AS CONTAINED IN POINT 2 OF THE STATEMENT OF FACTS. ON THE BASIS OF THE SUBMISSIONS CONTAINED THERE, THE ADDITION OF RS.14,18,600/- REQUIRES TO BE DELETED. THE APPELLANT ALSO RELIES O N THE EXTENSIVE SUBMISSIONS MADE IN THE CASE OF M/S. G. S. OIL MILLS IN THE APPEAL FOR THE ASSESSMENT YEAR MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 33 33 2004-05. THE ADDITION MADE BY THE ASSESSING OFFICER IS, THEREFORE, UNCALLED FOR AND WITHOUT ANY BASIS. II IS TO BE RESPECTFULLY SUBMITTED THAT THE APPELLANT IS NOT ANNEXING THE SEIZED DOCUMENTS REFERRED IN THE CHART IN THE LETTER DATED 04.11.2011 AS THEIR PART OF THE ASSESSMENT RECORD WHICH YOUR HONOUR PUT THE REQUIRED TO PERUSE WHILE DISPOSING OF THE APPEAL. COPY OF THE LETTER DATED 04.11.2011 IS BEING ANNEXE D AS ANNEXURE P-4. HOWEVER, IF YOUR HONOUR REQUIRES THE APPELLANT TO FILE THE VOLUMINOUS DETAILS WE SHA LL PLEASE TO DO SO.' 20. THE LD. CIT DR RELIED UPON THE ORDER OF CIT(A). 21. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PA RTIES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE ASSESSEE HAS SUBMITTED THE DETAILS REGARDI NG A/BS- 26, 38, 41, 80, 81, 82, 90, 91, 133. SIMILARLY, ALL THE EXPLANATIONS HAVE BEEN SUBMITTED TO THE AO AND LD. CIT(A). WE FIND THAT THE LD. CIT(A) HAS NOT CONSIDERED HIS SUBMISSION AND SIMPLY CONFIRMED THE ADDITION. THEREFORE, WE RE VERSE THE MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 34 34 FINDING OF THE CIT(A) AND RESTORE THIS ISSUE BACK T O THE FILE OF AO TO CONSIDER THE EXPLANATION OF THE ASSESSEE. THE AO IS DIRECTED TO CONSIDER THE SURRENDERED AMOUNT OF RS. 20 LACS BEFORE MAKING THE ADDITION AND IF THE AO FINDS THAT THERE IS VARIATION OF PRICES MORE THAN RS. 20 LACS, THEN THE AO IS DIRECTED TO REPEAT THE ADDITION BY SPEAKING ORDER. 22. IN THE RESULT, THE APPEALS OF THE ASSESSEE FOR THE THREE YEARS ARE ALLOWED FOR STATISTICAL PURPOSES. GROUND NO. 3 OF ASSESSEES APPEAL FOR ASSESSMENT Y EAR 2008-09, GROUND NO. 14 & GROUND NO.9 OF DEPARTMENT S APPEALS FOR ASSESSMENT YEAR 2008-09 & 2009-10 : 23. THE SHORT FACTS OF THE CASE ARE AS UNDER. 24. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO EXPLAIN THE DETAILS OF SUM OF RS. 2 CRORES APPEARING IN THE ASSET SIDE OF BALANCE SHEET FOR THE YEAR ENDING 2008, 2009 AND 2010 RELEVANT TO ASSESSM ENT YEARS 2008-09, 2009-10 AND 2010-11 RESPECTIVELY. IT WAS CLAIMED BY THE ASSESSEE THAT THE SAID SUM WAS CASH IN HAND WHICH WAS GIVEN BY SHRI SINGLA FOR THE LAND DEAL AN D BOTH HAVE AGREED UPON. OUT OF ABOUT RS 8.45 CRORES ADVAN CE RECEIVED BY HIM, RS. 6.45 CRORES WAS THROUGH CHEQUE S AND RS. MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 35 35 2.00 CRORES WAS IN CASH. THE ASSESSEE HAS USED RS. 6.45 CRORES IN SISTER CONCERN SUCH AS G. S. ROLLER FLOUR MILLS PRIVATE LIMITED AND PAWAN AGRAWAL. THE AO WAS OF THE VIEW T HAT TIJORI FUND OF RS. 2 CRORES FLOUTED IN MARKET AND INTEREST ON IT CANNOT BE RULED OUT. THE AO HAS MADE THE FOLLOWING ADDITIO NS IN RESPECTIVE YEARS :- A.Y. AMOUNT 2008-09 2,00,00,000 2008-09 36,00,000 2009-10 42,48,000 2010-11 50,00,000 TOTAL RS. 3,28,48,000 25. THE MATTER CARRIED TO THE LD. CIT(A) AND THE LD. C IT(A) HAS CONFIRMED THE ADDITION OF RS. 2,00,00,000/- AND DELETED THE ADDITIONS OF RS. 36,00,000/-, RS. 42,48,000/- A ND RS. 50,00,000/- BY OBSERVING AS UNDER :- 10.3 APPELLANT'S SUBMISSIONS ALONG WITH ASSESSMENT ORDER AND RECORDS HAVE BEEN CONSIDERED CAREFULLY. RELEVANT SEIZED DOCUMENTS, ON WHICH THE APPELLANT H AS PLACED HIS RELIANCE, HAVE ALSO BEEN PERUSED ALONG W ITH MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 36 36 APPELLANT'S BOOKS OF ACCOUNTS PRODUCED BEFORE ME. A .O. HAS MADE THE ADDITION OF RS. 2,00,00,000/- ON THE BASIS OF AMOUNT SHOWN IN THE BALANCE SHEET OF THE APPELLANT WITHOUT THERE BEING ANY DETECTION OR INVE NTORY OF SUCH CASH DURING THE COURSE OF SEARCH OPERATIONS AND IN THE ABSENCE OF ANY DETAILS/EXPLANATION FROM THE APPELLANT DURING THE ENTIRE COURSE OF ASSESSMENT PROCEEDINGS. 10.4 FIRST COMING TO APPELLANT'S FAILURE TO EXPLAIN TIJORI CASH WHILE APPELLANT IS SUBMITTING THAT HE HAS GIVE N ALL THE REQUIRED DETAILS, AS ASKED FOR BY THE A.O., FRO M TIME TO TIME AND A.O. HAS NOT SPECIFICALLY ENQUIRED ABOU T TIJORI CASH DURING ASSESSMENT PROCEEDINGS. FROM PERUSAL OF ASSESSMENT RECORDS, IT IS SEEN THAT THE APPELLANT HAS FILED COMPLETE BALANCE SHEET FOR ALL THE YEARS FOR THE FIRST TIME ON 23.12.2011 REFLECTING T IJORI CASH ON ASSETS SIDE FOR A.Y. 2008-09 ONWARDS. VIDE ORDER SHEET ENTRY DTD 23.12.2011, THE APPELLANT-THR OUGH HIS AR-HAS BEEN SPECIFICALLY ASKED TO EXPLAIN CASH MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 37 37 FOUND AT PREMISE AND TIJJORI CASH SHOWN, ALONG WITH OTHER DETAILS ASKED FOR REGARDING BANK DEPOSITS, IN TEREST FREE ADVANCES ETC. THE CASE HAS BEEN ADJOURNED TO 26.12.2011. ON THE FIXED DATE, THE APPELLANT'S AR H AS APPEARED AND FILED LETTER DTD 26.12.2011. ON ISSUE OF CASH, HE HAS SUBMITTED THAT IN CONNECTION WITH CASH FOUND I HAVE SUBMITTED MY REPLY VIDE PARA 15 OF MY REPLY DTD 04-11-2011 WHICH MAY KINDLY REFER TO. PAR A 15 OF LETTER DTD 04.11.20 II IS REPRODUCED AS UNDER : '(15) RESIDENCE AND BUSINESS PREMISES SITUATED AT 188 PUL BOGDA BHOPAL FOR SAFE CUSTODY WE ARE KEEPING CA SH AT RESIDENCE. THE CASH FOUND FROM MY BEDROOM AND FROM THE BEDROOM OF SON SUNIL AGRAWAL. CASH -IN - HAND G.S.OIL MILL DTD. 3-2-2010 (CASH BO OK) 12,74,142.68 CASH FOUND FROM RESIDENCE (5,82,700/- + 1,18,400/-) 7,01,100 CASH WITH SHRI PRAKASH JAIN BROKER TO PURCHASE GRAM ETC. 5,70,000/- FROM KRISHI UPOJ MANDI FROM AGRICULTURIST 12,71, 100/- PETTY EXPENSES/ CASH 3,04 12,74,142/- MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 38 38 PHOTOCOPY OF CASH BOOK DT,3.2.2010 HAS ALREADY BEEN PROVIDED PLEASE REFER PARA 5 OF MR.SUNIL AGRAWAL REPLY. THUS THE APPELLANT HAS BEEN SPECIFICALLY ASKED TO EXPLAIN THIS AMOUNT BUT HE IS FOUND TO HAVE EXPLAIN ED NOTHING AT ALL REGARDING TIJORI CASH OF RS. 2,00,00,000/- MENTIONED IN HIS BALANCE SHEET. RATHER THERE HAS BE EN NO MENTION OF THIS AMOUNT ANYWHERE BY THE APPELLANT OR ANY OF HIS FAMILY MEMBERS EITHER IN HIS/THEIR STATEMENT(S) RECORDED ON 04.02.2010 AND 05.02.2010 OR DURING THE ENTIRE COURSE OF ASSESSMENT PROCEEDINGS. THUS, APPELLANT'S CONTENTION THAT HE HAS NOT BEEN A SKED TO EXPLAIN IT NOR GIVEN DUE OPPORTUNITY IS NOT FOUN D ACCEPTABLE. 10.5 NOW COMING TO THE APPELLANT'S RELIANCE ON SEIZ ED DOCUMENTS REGARDING SALE OF LAND FOR RS.8.45 CRORES IN PURSUANCE OF WHICH RS.6.45 CRORES RECEIVED THROUGH CHEQUES AND RS.2 CRORES IN CASH AS MENTIONED IN TIJ ORI CASH. THERE IS NO DENYING THE FACT THAT AS PER LPS- I, (PG NO.32 TO 39 AND AGAIN PG NO.68 TO 72) THERE, INDEED , MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 39 39 HAS BEEN FOUND AND SEIZED DULY SIGNED SALE AGREEMEN T DTD 30.09.2006 BETWEEN M/S G.S. OIL MILLS AS SELLER - THROUGH SHRI KAILASH CHANDER AGARWAL (THE APPELLANT ) AND HIS TWO SONS-SHRI SUNIL KUMAR AGARWAL AND SHRI PAWAN KUMAR AGARWAL, ALL R/O 188, JINSI CHOURAHA, PUL BOGDA, JAHANGIRABAD, BHOPAL- AND SHRI RAJENDRA PRASAD SINGLA S/O LT. SHRI SHYAMLAL SINGLA, R/O A-3131, GOGAL, MUDGAON (GOA). THE SAID AGREEMENT IS FOR SAL E OF LAND ADMEASURING 110500 SQ.FT. OF KHASRA NO.900,912,913,914,915,916/1, 917/1,918/1. THE VALUE OF THE LAND HAS BEEN FIXED @ RS.1333/- PER SQ.FT. WHICH COMES TO ALMOST RS.14.73 CRORES. THE PURCHASER IS STATED TO HAVE MADE PART PAYMENT OF RS.119 LAKHS DIRECTLY TO M/S DESIGN AIDS VIDE CHEQUE NO. 61008 D TD 30.09.2006 AS PART OF SETTLEMENT BETWEEN THE APPELL ANT AND HIS SONS AND MR. SUNIL KUMAR OF DESIGN AIDS AND RS.31 LAKHS TO SELLERS, EACH STATED TO BE HAVING 1/3 RD SHARE IN THE SAID LAND, VIDE CHEQUE NO. 610100 DTD 30.09.2006. IN THE BANK ACCOUNT OF THE APPELLANT, N O SUCH DEPOSIT HAS BEEN MADE SHOWN. HOWEVER, IT IS MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 40 40 FURTHER SEEN FROM THE SAME SEIZED ANNEXURE I.E. LPS -I (PG.NO. 40 TO 58) THAT THERE IS ALSO COPY OF SUIT F ILED BY THE PURCHASER I.E. SHRI SINGLA ON 01.07.2008 IN THE COURT OF HON'BLE DISTRICT JUDGE, BHOPAL FOR SPECIFIC PERFORMANCE OF THIS CONTRACT, CONSEQUENT DELIVERY O F POSSESSION AND DAMAGES. AS PER THIS SUIT, IT IS STA TED THAT AN AMOUNT OF RS. 8.45 CRORES HAS BEEN PAID IN VARIOUS INSTALMENTS AS ON 26.10.2007 BUT NO CONVEYANCE DEED FOR THE LAND HAS BEEN EXECUTED IN FAVOR OF PURCHASER SOFAR. THE DETAILS OF THESE PAYM ENTS LIKE CHEQUE NO., DATE, BANK ACCOUNT ETC ARE FOUND NOWHERE MENTIONED IN THE SUIT. THE APPELLANT HAS AL SO FAILED TO EXPLAIN AS TO WHY SOME PURCHASER WOULD KE EP ON PAYING MONEY IN INSTALMENTS WHEN, AS PER THE SUI T ITSELF, NO STEPS HAVE EVER BEEN TAKEN FOR AFOREMENT IONED PROPERTY TRANSFER AND IN FACT DUES IN GOVT. AUTHORI TIES ARE ALSO STATED TO BE OUTSTANDING AGAINST THIS PROP ERTY AND THIS FACT KNOWN TO THE PURCHASER ALSO. THE APPELLANT HAS ALSO FAILED MISERABLY TO EXPLAIN THE DETAILS OF RECEIPT OF AMOUNT OF RS. 8.45 CRORES FRO M SHRI MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 41 41 SINGLA EITHER THROUGH HIS CASH BOOK OR BANK ACCOUNT STATEMENTS. THE FACT IS ALSO THAT NO SUCH CASH OF RS.2,00,00,000/- AS LYING WITH THE APPELLANT AS CASH-IN- HAND OR TIJORI CASH, HAVING BEEN RECEIVED IN PURSUA NCE OF THIS SALE AGREEMENT, HAS EITHER BEEN MENTIONED O R EVEN FOUND DURING THE COURSE OF EXTENSIVE SEARCH OPERATIONS AT BOTH BUSINESS AND RESIDENTIAL PREMISE S OF THE APPELLANT AND HIS FAMILY MEMBERS. EVEN DURING ASSESSMENT, THE APPELLANT HAS TRIED TO EXPLAIN ONLY CASH FOUND OF RS.5,82,700/- FROM BEDROOM OF SHRI SUNIL AGARWAL, RS. 1,18,400/- FROM APPELLANT'S AND HIS WIFE'S BEDROOM AND RS.37,030/- FROM FACTORY PREMISES. IN MY CONSIDERED VIEW, THE APPELLANT HAS NOT BEEN A BLE TO SATISFACTORILY EXPLAIN THE AMOUNT OF RS.2,00,00,000/- SHOWN BY HIMSELF AS TIJORI CASH IN HIS BALANCE SHEE T FOR THE YEAR 2008-09 AND ONWARDS. IN THESE CIRCUMSTANCE S, IT IS REASONABLE TO INFER THAT THIS EXPLANATION HAS BEEN GIVEN IN ORDER TO HIDE THE REAL CHARACTER OF THE SU M IN MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 42 42 QUESTION. UNSUBSTANTIATED EXPLANATION, PER SE, WOUL D ENTITLE THE AUTHORITIES TO REACH A CONCLUSION ADVER SE TO THE APPELLANT. ACCORDINGLY, ADDITION OF RS.2,00,00,OOO/- IS, HEREBY, CONFIRMED. 10.6 HOWEVER, A.O. IS NOT FOUND JUSTIFIED IN COMP UTING ESTIMATED INTEREST INCOME OF RS.36,00,OOO/-, RS.42,48,OOO/- AND RS.50,00,OOO/- FOR A.Y. 2008-09, 2009-10 AND 2010-11 RESPECTIVELY, ALLEGEDLY EARNED ON CUMULATIVE BASIS FROM SAID TIJORI CASH OF RS.2,OO,00,000/- ASSESSED AND CONFIRMED, AS ABOVE. THE APPELLANT IS NOT FOUND TO BE IN THE BUSINESS OF MON EY LENDING FOR ANY OF THE YEAR UNDER APPEAL AS NO DOCUMENT FOR THE SAME HAS BEEN FOUND OR PLACED ON RECORD BY THE A.O. THERE IS NO MATERIAL ON RECORD A S TO HOW, WHERE AND WHEN THE APPELLANT IS FOUND TO HAVE EARNED SUCH INTEREST INCOME. A.O. HAS MADE THE IMPUGNED ADDITION PURELY ON ASSUMPTIONS AND CONJECTURES. IT IS A SETTLED LEGAL POSITION THAT SE IZED MATERIAL HAS TO BE READ AND ACCEPTED AS A WHOLE-IT IS MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 43 43 NOT PERMISSIBLE TO PICK AND CHOOSE OR MAKE FURTHER ESTIMATES THEREFROM UNLESS THERE IS COGENT MATERIAL IN SUPPORT OF UNDERTAKING SUCH AN EXERCISE. A.O. HAS M ADE THE ADDITION, WHICH HAS BEEN CONFIRMED, AS ABOVE, O N THE BASIS OF SEIZED MATERIAL. NOW THERE IS NO SCOPE FOR MAKING FURTHER ESTIMATES THEREFROM AND ACCORDINGLY ADDITIONS MADE ON THE BASIS OF SUCH ESTIMATES ARE N OT FOUND SUSTAINABLE. THE BURDEN IS ON THE A.O. TO PRO VE THAT THE APPELLANT HAS, INDEED, RECEIVED SUCH INTER EST FOR THESE YEARS AND THAT IT REPRESENTS HIS INCOME E ARNED FOR CORRESPONDING YEARS. CONCEPT OF 'INCOME' IS A L EGAL CONCEPT AND AMOUNT OF REAL AND NOT NOTIONAL INCOME, HAS TO BE ARRIVED AT AFTER CONSIDERING VARIOUS ASPE CTS WHICH CANNOT BE IGNORED AS NO SUCH INTEREST INCOME HAS ACTUALLY FOUND TO HAVE BEEN EARNED BY THE APPELLANT EITHER DURING COURSE OF SEARCH OPERATIONS OR POST S EARCH INVESTIGATIONS AND EVEN DURING ASSESSMENT PROCEEDINGS. THE INCOME EARNED MUST BE ESTABLISHED BY THE A.O. AND NO ADDITION IS PERMISSIBLE, PARTICULAR LY IN SEARCH ASSESSMENT CASES, ON PRESUMPTIVE BASIS. MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 44 44 ACCORDINGLY ESTIMATED ADDITION OF RS.36,00,000/-, RS. 42,48,000/- AND RS. 50,00,000/- MADE SOLELY ON PRESUMPTIVE BASIS FOR A.YS. 2008-09, 2009-10 AND 2010-11 RESPECTIVELY IS NOT FOUND SUSTAINABLE AND, HEREBY, DELETED. 26. LD. AUTHORIZED REPRESENTATIVE SUBMITTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE ASKE D TO, EXPLAIN THE SOURCE OF RS. 2 CRORES TALLYING IN THE ASSETS SIDES OF THE BALANCE SHEET AND ENDING FOR ASSESSMENT YEAR 20 08-09, 2009-10 AND 2010-11 RESPECTIVELY. THE ASSESSEE SUBM ITTED THAT THE CASH WAS GIVEN BY SHRI RAJINDER PRASHAD SI NGLA FOR LAND. TOTAL SALE CONSIDERATION RECEIVED ON LAND DEA L WAS RS. 8.45 CRORES, RS. 6.45 CRORES BEING RECEIVED THROUGH CHEQUES AND RS. 2 CRORES WAS PAID IN CASH. DURING THE SEARC H, PHYSICAL POSSESSION OF THE HUGE CASH WAS NOT MENTIONED. ACCO RDINGLY, RS. 2 CRORES WAS ADDED U/S 69 OF THE ACT. FOR THE S UBSEQUENT YEAR, INTEREST OF 18 % HAVE BEEN ADDED ON PRESUMPT ION THAT THE DEPOSIT SHOULD HAVE BEEN EARNED INTEREST AT THA T RATE. THE ASSESSEE HAS ALSO PROVED THAT THERE WAS A CIVIL SUI T IN THE CIVIL MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 45 45 COURT, WHEREIN ALL THESE FACTS HAVE BEEN ADMITTED B Y SHRI SINGLA AND THE POSSESSION OF CASH WAS NOT FOUND DUR ING THE COURSE OF SEARCH, IT DOES NOT RAISE A PRESUMPTION T HAT THE SAME IS NOT AVAILABLE FOR EARNING THE INTEREST. DUR ING THE SEARCH, THE CIVIL DISPUTE WAS DISCOVERED AND NO QUE STION WAS ASKED ABOUT THE SAME. THEREFORE, THE ADDITION OF RS . 2 CRORES CANNOT BE MADE. 27. THE LD. CIT DR RELIED UPON THE ORDER OF REVENUE AUTHORITIES. THE LD. AUTHORIZED REPRESENTATIVE SUBM ITTED THAT THE ENTRY OF RS. 2 CRORES HAS BEEN NOT SATISFACTORI LY EXPLAINED BY THE ASSESSEE. THE BALANCE SHEET WAS FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND IN THE BALANCE SHEET, THESE RS. 2 CRORES WERE APPEARING AND ASSESSEE DID NOT EXPLAI N RS. 2 CRORES MENTIONED IN THE BALANCE SHEET. THE LD. CIT DR FURTHER SUBMITTED THAT AS PER THE SUIT, RS. 8.45 CRORES HAV E BEEN PAID IN VARIOUS INSTALMENTS. THEREFORE, IT IS THE DUTY O F THE ASSESSEE TO EXPLAIN THE SAME, WHICH THE ASSESSEE FAILED. THE REFORE, THE LD. CIT(A) IS JUSTIFIED IN HIS ACTION. 28. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PAR TIES. IT IS THE CASE OF THE AO THAT A SUM OF RS. 2 CRORES APPEARED IN MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 46 46 ASSET SIDE OF THE BALANCE SHEET FOR THE YEAR ENDING 2008-09, 2009-10 AND 2010-11 RESPECTIVELY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE CONTENDED THAT THE AMOUNT OF CASH WAS GIVEN BY SHRI RAJINDER PRASHAD S INGLA FOR LAND DEAL. THE TOTAL CONSIDERATION OF LAND DEAL WAS RS. 8.45 CRORES, RS. 6.45 CRORES BEING RECEIVED THROUGH BAN KERS CHEQUE THAT IS NOT IN DISPUTE. ACCORDING TO THE AO AND LD. CIT(A), WHEN THE ASSESSEE HAS RECEIVED RS. 2 CRORES AND WHEN IT IS ON THE BALANCE SHEET, THE ASSESSEE SHOULD EXP LAIN THESE RS. 2 CRORES AND ASSESSEE MIGHT HAVE USED THIS MONE Y ON INTEREST ON IT. DURING THE COURSE OF SEARCH, THIS C ASH WAS NOT FOUND, BUT THE MONEY HAS BEEN REFLECTED IN THE BOOK S OF ACCOUNT AND THAT IS TIJORI ACCOUNT. WE FIND THAT IT IS NOT IN DISPUTE THAT DURING THE COURSE OF SEARCH A DOCUMENT REGARDING SALE OF LAND FOR RS. 8.45 CRORES IN PURSUANCE OF WH ICH RS. 6.45 CRORES RECEIVED THROUGH CHEQUE AND RS. 2 CRORES IN CASH AS MENTIONED IN TIJORI CASH. IT IS ALSO FACT THAT DURI NG THE COURSE OF SEARCH A SALE AGREEMENT DATED 30.09.2006 BETWEEN G.S.OIL MILLS AS SELLER THROUGH KAILASH CHANDRA AGRAWAL, AS SESSEE AND TWO SONS SUNIL AGRAWAL AND PAWAN AGRAWAL AND SHRI R AJINDER MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 47 47 PRASHAD SINGLA. THIS SALE AGREEMENT FOR SALE OF LAN D ADMEASURING 110500 SQ.METRE OF KHASRA NOS. 900,912, 913, 914, 915, 916/1, 917/1 AND 918/1. THE VALUE OF THE LAND HAS BEEN FIXED WHICH COMES TO RS. 14.73 CRORES. THE PUR CHASER HAS MADE PAYMENT OF RS. 119 LACS DIRECTLY TO M/S. D ESIGN AIDS AS PART OF SETTLEMENT BETWEEN THE ASSESSEE AND HIS SONS. DURING THE COURSE OF PROCEEDINGS, A COPY OF THE SUI T FILED BY SHRI SINGLA IN THE COURT OF DISTRICT JUDGE, BHOPAL, FOR SPECIFIC PERFORMANCE OF CONTRACT CONSEQUENTLY FOR DELIVERY A ND POSSESSION. AS PER SUIT, IT HAS BEEN STATED THAT AN AMOUNT OF RS.8.45 CRORES HAS BEEN PAID IN VARIOUS INSTALMENTS , BUT NO CONVEYANCE DEED OF LAND HAS BEEN EXECUTED IN FAVOUR OF PURCHASER SO FAR. THE DETAILS OF THIS PAYMENT LIKE CHEQUE NOS., DATE, BANK A/C NO. ARE FOUND NO WHERE MENTIONED IN THE SUIT. HOWEVER, RS. 2 CRORES WAS GIVEN AND THAT IS SHOWN I N THE BALANCE SHEET FOR ASSESSMENT YEAR 2008-09 ONWARDS. THEREFORE, WE ARE OF THE VIEW THAT THE ASSESSEE IS ABLE TO EXPLAIN THE SOURCE OF RS. 2 CRORES IN HIS BOOKS OF ACCOUNT. DURING THE COURSE OF SEARCH, IT WAS FOUND THAT DETA IL OF PAYMENT MADE BY SHRI SINGLA ONLY A SUM OF RS. 8.45 CRORES MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 48 48 HAVE BEEN PAID TO THE ASSESSEE. THEREFORE, WE ARE O F THE VIEW THAT THE ASSESSEE HAS RECEIVED RS. 3 CRORES IN CASH AND THAT MONEY HAS BEEN USED BY THE ASSESSEE. THEREFORE, THE RE IS NO AMPLE EVIDENCE TO SHOW THAT THE ASSESSEE HAS RECEIV ED RS. 2 CRORES IN CASH AND THAT ENTRY IS REFLECTED IN THE B ALANCE SHEET. THEREFORE, WE DELETE THE SAME. AS WE HAVE DELETED T HE ADDITION OF RS. 2 CRORES AND THE ASSESSEE HAS ALREADY SPENT THIS RS. 2 CRORES, THEREFORE, NO QUESTION OF EARNING INTEREST ON IT ARISES. THEREFORE, WE ARE OF THE VIEW THAT THE LD. CIT(A) I S JUSTIFIED IN HIS ACTION AND OUR INTERFERENCE IS NOT CALLED FOR. CONSEQUENTLY APPEAL OF THE ASSESSEE IS ALLOWED AND DEPARTMENTS APPEAL ARE DISMISSED ON THE GROUNDS. COMMON GROUNDS IN DEPARTMENTS (GROUND NO.6) APPEA L NO. 256/IND/2014 AND ASSESSEES APPEAL (GROUND NO. 1) NO. 254/IND/2014 : 29. THIS GROUND RELATES TO ADDITION OF RS. 9,50,000/- F OR ASSESSMENT YEAR 2010-11 MADE ON ACCOUNT OF CASH FOU ND AT THE PREMISES OF THE ASSESSEE TREATING IT AS UNEXPLA INED. 30. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO PROVIDE THE DETAILS OF RS. 12 ,00,000/- MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 49 49 APPEARING IN CASH BOOK OF G.S.OIL MILLS, WHEREAS IN THE STATEMENT GIVEN DURING THE COURSE OF SEARCH, THE AS SESSEE CLAIMED TO HAVE IN POSSESSION ONLY RS. 2.00 LAKHS T O RS. 2.50 LAKHS. THEREFORE, THE AO MADE THE ADDITION. 31. THE MATTER CARRIED TO THE LD. CIT(A) AND THE LD. C IT(A) HAS CONFIRMED THE ADDITION OF RS. 5,73,042/- AND BA LANCE WAS DELETED BY OBSERVING AS UNDER :- 4.2 APPELLANT'S SUBMISSIONS ALONG WITH THE ASSESSMENT ORDER AND RECORDS HAVE BEEN CONSIDERED CAREFULLY. STATEMENTS OF THE APPELLANT ALONG WITH H IS FAMILY MEMBERS AND RELEVANT ASSESSMENT/APPEAL ORDER HAVE ALSO BEEN PERUSED. DURING THE COURSE OF SEARCH OPERATIONS, CASH OF RS. 1,18,400/- AND OF RS.5,82,700/- HAS BEEN FOUND FROM BEDROOMS OF THE APPELLANT/WIFE AND SON/DAUGHTER-IN-LAW RESPECTIVELY. CASH BALANCE AS ON 03/02/2010 IN THE BOOKS OF M/S. G.S. OIL MILLS - OF WHICH APPELLANT IS THE PROPRIETOR - IS SHOWN AT RS. 12,74,142/-. IN HIS PRELIMINARY STATEMENT RECORDED BEFORE MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 50 50 COMMENCEMENT OF SEARCH OPERATIONS THE APPELLANT HAS STATED THAT HE IS HAVING CASH OF ABOUT RS. 2 - 2.50 LAKHS IN HIS POSSESSION. BASED ON THIS PRELIMINARY STATEMENT ALONE, A.O. HAS ADDED RS.9,50,000/- AS UNEXPLAINED CASH. THE FACT IS THAT RS. 1,18,400/- FOUND FROM APPELLANT'S BEDROOM HAVE BEEN STATED TO BE BELONGING TO M/S. G.S. OIL MILLS BOTH BY THE APPELLANT AND HIS WIFE SMT. MANORAMA AGRAWAL AS PER THEIR SEPARATE STATEMENTS RECORDED ON OATH DURING THE COURSE OF SEARCH OPERATIONS. SIMILARLY, CASH OF RS.5,82,700/- FOUND FROM BEDROOM OF APPELLANT'S SON - SHRI SUNIL AGRAWAL AND HIS WIF E- HAS ALSO BEEN CATEGORICALLY STATED TO BE BELONGING TO M/S G.S. OIL MILLS IN THEIR RESPECTIVE STATEMENTS RECORDED UNDER OATH. BOTH RESIDENCE AND BUSINESS PREMISES OF THE APPELLANT HAVE BEEN FOUND TO BE COMMON, AS IS EVIDENT DURING SEARCH OPERATIONS. THI S FACT HAS ALSO NOT BEEN DISPUTED BY THE A.O. THUS OU T OF TOTAL CASH OF RS.12,74,142/- AS PER BOOKS OF M/S. G.S. OIL MILLS, CASH OF RS.7,01,100/-, AS FOUND HAS MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 51 51 BEEN STATED AND CLAIMED TO BE BELONGING TO THE PROPRIETORSHIP BUSINESS OF THE APPELLANT .A.O. IS N OT FOUND JUSTIFIED IN TREATING THIS AMOUNT OF RS. 7,01,100/- AS UNEXPLAINED. 4.3 HOWEVER, THE APPELLANT HAS NOT BEEN ABLE TO EXPLAIN THE AMOUNT OF RS. 5,70,100/- STATED TO BE LYING WITH SHRI PRAKASH JAIN- BROKER-FOR PURCHASE O F GRAM ETC FROM KRISHI UPON MANDI. DURING APPEAL THE APPELLANT HAS STATED THAT A.O. HAS NOT ENQUIRED FRO M SAID SHRI PRAKASH JAIN BEFORE MAKING THE ADDITION. IN MY CONSIDERED VIEW, THE APPELLANT HAS BEEN ASKED AND GIVEN ADEQUATE OPPORTUNITIES, AS PER RECORDS TO JUSTIFY AND EXPLAIN CASH AS PER HIS BOOKS VIS-A-VIS CASH FOUND DURING SEARCH. IT IS THE DUTY OF THE APPELLANT AND APPELLANT ALONE TO FILE AND BRING ON RECORD ALL THE NECESSARY EVIDENCES AS RELIED ON BY HIM, IN THIS REGARD. THE APPELLANT HAS FULL KNOWLED GE OF THE TRANSACTIONS INVOLVED AND SHRI PRAKASH JAIN IS HIS WITNESS. THE ONUS IS ON THE APPELLANT TO MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 52 52 DISCHARGE IT WITH THE HELP OF SUPPORTING DOCUMENTAR Y EVIDENCES. SIMILARLY, THE APPELLANT HAS MENTIONED T HE AMOUNT OF RS.3,042/- AS PETTY EXPENSES WITHOUT SUBMITTING EVEN A SINGLE PIECE OF EVIDENCE IN THIS REGARD AT ANY STAGE OF THE PROCEEDINGS-DURING SEARCH, POST SEARCH INVESTIGATIONS, ASSESSMENT AS WELL AS APPEAL. 4.4 KEEPING IN VIEW ABOVE AND AFTER PERUSAL OF ENTI RE MATERIAL ON RECORD, ADDITION OF RS.5,73,042/-, OUT OF RS.9,50,000/- MADE BY THE A.O., IS FOUND SUSTAINABLE AND ACCORDINGLY CONFIRMED. 32. THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED THAT TH ERE WAS CASH IN HAND OF G. S. OIL MILLS ON 3.2.2010 AS PER CASH BOOK. THE CASH FOUND FROM THE BEDROOM OF THE ASSESS EE AND CASH FOUND FROM THE ROOM OF SUNIL AGRAWAL AT RS. 5, 82,700/- AND CASH WITH PRAKASH JAIN, BROKER FOR PURCHASE OF GRAM FROM KRISHI MANDI AT RS. 5,70,100/-AND PETTY EXPENSES OF RS. 3,042/-. THUS, THERE IS NO DIFFERENCE IN CASH AS PE R THE BOOKS MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 53 53 AND CASH FOUND DURING THE COURSE OF SEARCH. DURING THE COURSE OF SEARCH, SHRI PRAKASH JAIN, BROKER, WORKIN G FOR PURCHASE OF GOODS FOR ASSESSEE WAS NOT INTERROGATED AND DURING THE SEARCH, THE CASH FOUND FROM SUNIL AND RE NU AGRAWAL AT RS. 5,82,700/- GIVEN TO G. S. OIL MILLS. THEREFORE, NO ADDITION SHOULD BE MADE. 33. ON THE OTHER HAND, THE LD. CIT DR RELIED UPON THE O RDER OF AO. 34. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PAR TIES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE LD. CIT(A) HAS HELD THAT OUT OF RS. 12,74 ,142/- AS PER THE BOOKS OF G. S. OIL MILLS, CASH OF RS. 7,01,100/ - BELONGING TO PROPRIETORY BUSINESS OF THE ASSESSEE. THEREFORE, THE LD. CIT(A) HAS DELETED THIS ADDITION AND OUR INTERFEREN CE IS NOT REQUIRED IN RESPECT OF RS. 5,70,100/-, IT WAS TREAT ED THAT THE CASH BELONGS TO PRAKASH JAIN AND THE ASSESSEE COULD NOT PRODUCE ANY EVIDENCE THAT CASH BELONGED TO PRAKASH JAIN. THEREFORE, THE AO MADE THE ADDITION. DURING THE COU RSE OF HEARING, THE LD. AUTHORIZED REPRESENTATIVE COULD NO T BRING ANY MR. KAILASH AGRAWAL, BHOPAL VS. ACIT, 3(1),BHOPAL A ND ACIT VS. MR.KAILASH AGRAWAL, BHOPAL I.T.(SS).A.NOS. 98 TO 100 AND 254/IND/2015 AND 113 TO 115 AND 256//IND/201 A.YS. 2007-08 TO 2010-11 54 54 EVIDENCE AGAINST THE FINDING OF LD. CIT(A). THEREFO RE, WE CONFIRM THE SAME. 35. CONSEQUENTLY, THE DEPARTMENT APPEAL AS WELL AS ASSESSEES APPEAL ARE DISMISSED ON THIS COMMON GROU ND. 36. IN THE RESULT, THE DEPARTMENTAL APPEALS ARE DISMISS ED AND ASSESSEE APPEALS ARE PARTLY ALLOWED FOR STATIST ICAL PURPOSES. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 8 TH DECEMBER, 2015. SD/- (B. C. MEENA) ACCOUNTANT MEMBER SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 8 TH DECEMBER, 2015. CPU* 27.9