Jivraj V. Desai, Mehsana V. The ACIT, Central Circle-1(1), Ahmedabad

MA 2/AHD/2015

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 6679 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 24 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 06-06-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 04-09-2015
• Assessment Year: misc
• Appeal Filed On: 12-01-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: T P HEMANI
• Keywords: Search and seizure; Loose papers; Difference of opinion; Corroborative evidences; Block assessment
• Section: 260A; 131; 132

Judgement Text

- , - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI RAJPAL YADAV, JUDICIAL MEMBER MISC. APPLICATION NO.02 AND 03 /AHD/2015 IN ./ IT(SS)A NO.99, 106/AHD/2004 / ASSTT. YEAR: BLOCK PERIOD JIVRAJ V. DESAI 5, ASHOKKUMAR SOCIETY RADHANPUR ROAD HIGHWAY MEHSANA, NORTH GUJARAT. VS. ACIT, CENT.CIR.1(1) AHMEDABAD. ( APPLICANT ) (RESPONDENT) ASSESSEE BY : SHRI T.P. HEMANI, AR REVENUE BY : SHRI PRASOON KABRA, SR.DR ! '#$ % &' / DATE OF HEARING : 20/04/2018 ()* % &' / DATE OF PRONOUNCEMENT: 06/06/2018 +, / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: PRESENT MISC. APPLICATIONS ARE DIRECTED AT THE INST ANCE OF THE ASSESSEE POINTING OUT APPARENT ERROR IN THE ORDER O F THE TRIBUNAL DATED 13.12.2013 PASSED IN IT(SS)A.NO.99/AHD/2004 A ND IT(SS)A.NO.106/AHD/2004. IN OTHER WORDS, CROSS APP EALS WERE DECIDED BY THE TRIBUNAL WHEREIN MISC. APPLICATION P OINTING OUT APPARENT ERRORS HAVE BEEN FILED BY THE ASSESSEE. 2. MA NO.2/AHD/2015 IS RUNNING INTO 16 PAGES WHEREA S MA NO.3/AHD/2004 IS RUNNING INTO 5 PAGES. THE TRIBUNA L ORDER IS RUNNING INTO 89 PAGES. THUS, THE ASSESSEE HAS DEVO TED LOT OF MA NO.02 AND 03/AHD/2015 2 ENERGY FOR POINTING OUT ALLEGED APPARENT ERROR IN T HE ORDER OF THE TRIBUNAL. THEREFORE, WE EMBARK UPON AN INQUIRY ON THE FACTS OF THE PRESENT CASE IN ORDER TO FIND OUT WHETHER ANY A PPARENT ERROR COMMITTED BY THE TRIBUNAL OR NOT WHILE PASSING THE IMPUGNED ORDER ON 13.12.2013. WE THINK IT APPROPRIATE TO BE AR IN MIND CERTAIN BASIC PRINCIPLES FOR EXERCISING POWERS CONT EMPLATED IN SECTION 254(2) OF THE INCOME TAX ACT, 1961. 4. THERE ARE SERIES OF DECISIONS AT THE END OF THE HONBLE SUPREME COURT AS WELL AS HONBLE HIGH COURT EXPOUND ING SCOPE OF EXERCISING POWERS UNDER SECTION 254(2) OF THE ACT. WE DO NOT DEEM IT NECESSARY TO RECITE AND RECAPITULATE ALL OF THEM, BUT SUFFICE TO SAY THAT CORE OF ALL THESE AUTHORITATIVE PRONOUNCEMENTS IS THAT POWER FOR RECTIFICATION UNDER SECTION 254(2 ) OF THE ACT CAN BE EXERCISED ONLY WHEN MISTAKE, WHICH IS SOUGHT TO BE RECTIFIED, IS AN OBVIOUS AND PATENT MISTAKE, WHICH IS APPARENT FR OM THE RECORD AND NOT A MISTAKE, WHICH IS REQUIRED TO BE ESTABLIS HED BY ARGUMENTS AND LONG DRAWN PROCESS OF REASONING ON PO INTS, ON WHICH THERE MAY CONCEIVABLY BE TWO OPINIONS. FOR F ORTIFYING THIS VIEW, WE MAKE REFERENCE TO THE DECISION OF THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF ACIT VS. S AURASHTRA KUTCH STOCK EXCHANGE LD., 262 ITR 146 WHICH HAS BEEN UPHE LD BY THE HONBLE SUPREME COURT REPORTED IN 305 ITR 227. THE HONBLE COURT HAS LAID DOWN FOLLOWING PROPOSITION WHILE CON CLUDING THE JUDGMENT: '(A) THE TRIBUNAL HAS POWER TO RECTIFY A MISTAKE AP PARENT FROM THE RECORD ON ITS OWN MOTION OR ON AN APPLICAT ION BY A PARTY UNDER S. 254(2) OF THE ACT; (B) AN ORDER ON APPEAL WOULD CONSIST OF AN ORDER MA DE UNDER S. 254(1) OF THE ACT OR IT COULD BE AN ORDER MADE U NDER SUB- MA NO.02 AND 03/AHD/2015 3 S. (1) AS AMENDED BY AN ORDER UNDER SUB-S. (2) OF S . 254 OF THE ACT; (C) THE POWER OF RECTIFICATION IS TO BE EXERCISED T O REMOVE AN ERROR OR CORRECT A MISTAKE AND NOT FOR DISTURBING F INALITY, THE FUNDAMENTAL PRINCIPLE BEING THAT POWER OF RECTIFICA TION IS FOR JUSTICE AND FAIR PLAY; (D) THAT POWER OF RECTIFICATION CAN BE EXERCISED EV EN IF A MISTAKE IS COMMITTED BY THE TRIBUNAL OR EVEN IF A M ISTAKE HAS OCCURRED AT THE INSTANCE OF PARTY TO THE APPEAL ; (E) A MISTAKE APPARENT FROM RECORD SHOULD BE SELF-E VIDENT, SHOULD NOT BE A DEBATABLE ISSUE, BUT THIS TEST MIGH T BREAK DOWN BECAUSE JUDICIAL OPINIONS DIFFER AND WHAT IS A MISTAKE APPARENT FROM THE RECORD CANNOT BE DEFINED PRECISEL Y AND MUST BE LEFT TO BE DETERMINED JUDICIALLY ON THE FAC TS OF EACH CASE; (F) NON-CONSIDERATION OF A JUDGMENT OF THE JURISDIC TIONAL HIGH COURT WOULD ALWAYS CONSTITUTE A MISTAKE APPARENT FR OM THE RECORD, REGARDLESS OF THE JUDGMENT BEING RENDERED P RIOR TO OR SUBSEQUENT TO THE ORDER PROPOSED TO BE RECTIFIED; (G) AFTER THE MISTAKE IS CORRECTED, CONSEQUENTIAL O RDER MUST FOLLOW AND THE TRIBUNAL HAS POWER TO PASS ALL NECES SARY CONSEQUENTIAL ORDERS.' 5. IT IS PERTINENT TO OBSERVE THAT IN HIERARCHY OF APPELLATE JURISDICTION UNDER THE INCOME TAX ACT, ITAT IS THE LAST FACT FINDING APPELLATE AUTHORITY, THEREAFTER APPEAL TO THE HONB LE HIGH COURT UNDER SECTION 260A OF THE ACT IS PROVIDED ON POINT OF LAW INVOLVED THEREIN. OPERATIVE FORCE OF THE ARGUMENTS ADVANCED BY SHRI HEMANI ON BEHALF OF THE ASSESSEE WAS THAT ITAT HAS CONCEIVED FACTS WRONGLY AND CUMULATIVE EFFECT OF THIS CONCEI VEMENT OF THESE WRONG FACTS WOULD BE THAT THEY WILL GOAD THE ADJUDI CATING AUTHORITY ON WRONG CONCLUSION. ASSIMILATION OF INC ORRECT FACTS WOULD LAY FOUNDATION OF WRONG REASON AND RESULT IN AN INCORRECT MA NO.02 AND 03/AHD/2015 4 ADJUDICATION. WE ARE CONSCIOUS OF THE FACT THAT ER ROR OF FACT AND LAW IN APPRECIATING THE CIRCUMSTANCES SECTION AND P ROVISION COULD FALL IN THE AMBIT OF APPARENT ERROR BUT NOT ERROR O F JUDGMENT REACHED AFTER APPLYING CORRECT FACT AND CORRECT LAW , BECAUSE THAT WILL BE PROCESS OF ADJUDICATING THE CONTROVERSY AND THAT CAN LEAD TO DIFFERENCE OF OPINION QUA RESULT. BUT IF INCORRECT FACTS AND INCORRECT PROVISIONS ARE CONSIDERED, THEN THAT WOUL D COME IN THE AMBIT OF APPARENT ERROR. 6. APART FROM ABOVE, AT THE TIME OF HEARING, THE LD .DR RELIED UN TWO JUDGMENTS OF THE HONBLE HIGH COURT RENDERED IN THE CASE OF CIT VS. GUJARAT INSTITUTE OF HOUSING ESTATE DEVELOP ERS, AND PR.CIT VS. NIRMA LIMITED BOTH REPORTED IN 84 TAXMANN.COM 1 48 AND 188 (GUJ). HE HAS PLACED ON RECORD COPIES OF BOTH THES E JUDGMENTS. IN THE CASE OF GUJARAT INSTITUTE OF HOUSING ESTATE DEVELOPERS (SUPRA), THE ASSESSEE RECEIVED CONTRIBUTIONS FROM I TS MEMBERS. IT CLAIMED NON-TAXABILITY OF SUCH CONTRIBUTIONS ON THE PRINCIPLE OF MUTUALITY. HOWEVER, THE AO DID NOT CONCUR WITH THE VIEW OF THE ASSESSEE AND DISPUTE TRAVELLED UPTO THE TRIBUNAL. THE TRIBUNAL PASSED A COMMON ORDER DATED 29.9.2015 CONFIRMING TH E VIEW OF THE AO AND THE CIT(A) HOLDING THAT SUCH INCOME WAS TAXABLE. IN SUCH ORDER, TRIBUNAL REFERRED TO THE LATEST DECISIO N OF HONBLE SUPREME COURT IN THE CASE OF BANGALORE CLUB VS. CIT, 350 ITR 509 AND NOTED THAT AS PER DECISION OF THE HONBLE SUPRE ME COURT THERE ARE THREE BASIC FEATURES, WHICH WOULD HAVE TO BE TE STED VIZ. COMPLETE IDENTITY BETWEEN THE CLASS OF CONTRIBUTORS AND THE PARTICIPATORS, THE ACTION OF THE PARTICIPATORS AND CONTRIBUTORS SHOULD BE IN FURTHERANCE OF THE MANDATE OF THE ASSO CIATION, AND LASTLY THAT THERE SHOULD NOT BE ANY SCOPE OF PROFIT EERING BY THE CONTRIBUTORS FROM A FUND MADE BY THEM WHICH COULD O NLY BE MA NO.02 AND 03/AHD/2015 5 EXTENDED OR RETURNED TO THEMSELVES. IN THIS WAY, THE TRIBUNAL HELD THAT PRINCIPLE OF MUTUALITY WOULD NOT APPLY IN THE CASE OF ASSESSEE AND DISMISSED ITS APPEAL. THE ASSESSEE TH EREAFTER FILED MA POINTING OUT APPARENT ERROR IN THE ORDER OF THE TRIBUNAL. THIS MA WAS ALLOWED AND ORDER OF THE TRIBUNAL WAS RECALL ED. DISSATISFIED WITH THE ORDER OF THE TRIBUNAL, THE RE VENUE WENT IN APPEAL BEFORE THE HONBLE HIGH COURT AND THE HONBL E HIGH COURT SET ASIDE THE ORDER OF RECALL AND RESTORED THE ORIG INAL ONE. IT IS IMPERATIVE UPON US TO TAKE THE FOLLOWING FINDING OF THE HONBLE HIGH COURT: 4. IN THE PRESENT CASE, AS NOTED THE TRIBUNAL HAD GIVEN DETAILED REASONS FOR COMING TO THE CONCLUSION THAT THE PRINCIPLE OF MUTUALITY WOULD NOT APPLY. WHILE ACCEP TING THE ASSESSEE'S RECTIFICATION APPLICATIONS, THE TRIBUNAL UNDERTOOK EQUALLY PAINSTAKING AND ELABORATE CONSIDERATION OF THE VERY SAME ISSUES AND VERY SAME FACTS TO COME TO A CONTRA RY CONCLUSION. IT IS NOT NECESSARY NOR POSSIBLE FOR US TO HOLD WHETHER THE TRIBUNAL'S FIRST VIEW WAS CORRECT OR TH E SUBSEQUENT ONE. IT IS ENOUGH TO HOLD THAT THE TRIBU NAL COULD NOT HAVE UNDERTAKEN SUCH INCISIVE AND DETAILED EXAM INATION OF FACTS AND LAW TO COME TO THE CONCLUSION WHICH AR E COMPLETELY CONTRARY TO ITS OWN CONCLUSION ARRIVED A T AFTER DETAILED CONSIDERATIONS. SUCH POWERS SIMPLY DO NOT FLOW FROM THE POWER OF RECTIFICATION UNDER SUB-SECTION (2) OF SECTION 254 OF THE ACT. 7. NEXT DECISION REFERRED BY THE LD.DR IS IN THE CA SE OF NIRMA LTD. IN THIS CASE, THE ASSESSEE HAD CLAIMED INTERE ST EXPENDITURE UNDER SECTION 36(1) OF THE ACT ALLEGEDLY INCURRED B Y IT ON PREMATURE REDEMPTION OF SECURED PREMIUM NOTES ISSUE D BY THE COMPANY. THE AO DID NOT ACCEPT THIS CLAIM OF THE A SSESSEE WHICH WAS CONCURRED BY THE CIT(A) AS WELL AS BY THE TRIBU NAL. THE ASSESSEE FILED APPEAL AGAINST THE ORDER OF THE TRIB UNAL BEFORE THE HONBLE HIGH COURT AS WELL AS FILED MA BEFORE THE T RIBUNAL. THE MA NO.02 AND 03/AHD/2015 6 TRIBUNAL EARLIER WAS OF THE VIEW THAT SINCE THE ASS ESSEE HAS FILED APPEAL BEFORE THE HONBLE HIGH COURT, THEREFORE, MA OUGHT NOT TO BE TAKEN UP. BUT THE ASSESSEE WENT TO THE HIGH COUR T AND DIRECTION WAS MADE FOR ADJUDICATING THE MA. AFTER HEARING THE ASSESSEE THE TRIBUNAL RECALLED ITS ORDER. DISSATIS FIED WITH THE ORDER OF THE TRIBUNAL, THE REVENUE WENT IN APPEAL B EFORE THE HONBLE HIGH COURT, AND THE HONBLE COURT HAS VACAT ED THE ORDER OF THE ITAT. FINDING RECORDED BY THE HONBLE HIGH COURT EXPLAINING THE POWER OF THE TRIBUNAL UNDER SECTION 254(2) IS WORTH TO NOTE. IT READS AS UNDER: 4. WE HAVE HEARD LEARNED COUNSEL FOR THE PARTIES. WE HAVE PERUSED THE DOCUMENTS ON RECORD. WE ARE OF THE VIEW THAT THE TRIBUNAL COMMITTED A LEGAL ERROR IN RECALLING I TS EARLIER DETAILED JUDGEMENT. AS NOTED, THERE WAS A RAGING CONTROVERSY BETWEEN THE REVENUE AND THE ASSESSEE REGARDING THE ASSESSCE COMPANY'S CLAIM OF DEDUCTION OF INTEREST EXPENDITURE AT ALL STAGES BEFORE THE ASSES SING OFFICER. COMMISSIONER (APPEALS) AND THE TRIBUNAL. T HIS ISSUE RECEIVED MINUTE SCRUTINY. THE TRIBUNAL IN PARTICULA R HAD REFERRED TO THE FACTS ON RECORD, FINDINGS AND THE O BSERVATIONS OF THE ASSESSING OFFICER AND THE COMMISSIONER (APPE ALS) AND ULTIMATELY GAVE ITS OWN REASONING FOR COMING TO THE CONCLUSION THAT THE TRANSACTION LEADING TO THE ASSE SSEE'S CLAIM OF INTEREST EXPENDITURE WAS NOT GENUINE AND I T ULTIMATELY PUT ITS SEAL ON THE DECISIONS OF THE REV ENUE AUTHORITIES. WHETHER .SUCH OPINION OF THE TRIBUNAL WAS LEGALLY SUSTAINABLE OR NOT IS THE SUBJECT MATTER BEFORE US IN THE PRESENT TAX APPEAL. THE RELEVANT QUESTION IS, COULD THE TRIBUNAL HAVE EXERCISED THE POWER OF RECTIFICATION TO RECALL SUCH JUDGEMENT? THE ANSWER BEING OBVIOUS, IS IN THE NEGATIVE. THE POWERS OF RECTIFICATION FLOWING FROM SECTION 254(2) OF THE ACT ARE FOR CORRECTING APPARENT ERROR S AND NOT FOR RE-EXAMINATION OF THE ISSUES ALREADY CONSIDERED AND CONCLUDED. IT IS WELL RECOGNISED THAT THE POWERS OF RECTIFICATION CANNOT BE EQUATED TO THAT OF REVIEW. THE TRIBUNAL THUS TRAVELLED FAR BEYOND ITS POWER OF REC TIFICATION IN ACCEPTING THE ASSESSEE'S VARIOUS CONTENTIONS WHICH WERE NOT CONFINED TO PURE FACTUAL ERRORS APPARENT ON THE REC ORD. SOME MA NO.02 AND 03/AHD/2015 7 OF THE CONTENTIONS OF THE ASSESSEE WERE HIGHLY CONT ENTIOUS LEGAL ISSUES. ONCE THE TRIBUNAL HAD TAKEN A PARTICU LAR VIEW, IT WAS ALWAYS OPEN FOR THE AGGRIEVED PARTY TO CHALLENG E SUCH VIEWS BEFORE THE HIGHER COURT. THE TRIBUNAL COULD N OT HAVE BEEN PERSUADED TO RE-EXAMINE THE ISSUES ON THE PREM ISE THAT THERE WAS AN ERROR APPARENT ON THE RECORD. 8. IN THE MA, THE ASSESSEE HAS MADE REFERENCE TO TH E DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASES OF MERCU RY METALS P.LTD. VS. ACIT, AND RAMESHCHANDRA M. LUTHRA, 257 I TR 297/460. ON STRENGTH OF THESE DECISIONS, IT HAS BEEN PLEADED THAT IF THE TRIBUNAL FAILED TO CONSIDER JUDGMENT OF THE HONBLE SUPREME COURT OR JURISDICTIONAL HIGH COURT, THEN IT WOULD TANTAMO UNT TO AN APPARENT MISTAKE. WE DO NOT HAVE ANY HESITATION QUA THIS PROPOSITION CANVASSED BY THE LD.COUNSEL FOR THE ASS ESSEE, BECAUSE WE HAVE ALREADY REFERRED THE DECISION OF THE HONBL E SUPREME COURT IN THE CASE OF ACIT VS. SAURASHTRA KUTCH STOC K EXCHANGE LTD. (SUPRA). 9. IN THE LIGHT OF THE ABOVE, LET US CONSIDER THE F ACTS OF PRESENT CASE. AS ALLEGED EARLIER, THE ASSESSEE HAS FILED M AS RUNNING INTO 16 AND 5 PAGES. IT HAS FILED TWO SYNOPSIS ONE RUN NING INTO 8 PAGES AND OTHER 15 PAGES. WITH THE ASSISTANCE OF LD.REPRESENTATIVES, WE HAVE GONE THROUGH ALL THESE DETAILS. SYNOPSIS SHOWING MISTAKE RUNNING INTO 8 PAGES IS BE ING REPRODUCED HERE. IT READS AS UNDER: 1. (I) ISSUE : THE PRESUMPTIONS DRAWN BY THE HON'BLE ITAT U/S 132( 4) ON THE DIARY A-L FOUND FROM ARVIND A. SHAH. (II) OBSERVATION OF HON'BLE ITAT : MA NO.02 AND 03/AHD/2015 8 THE HON'BLE ITAT ON PAGE 37 TO 39 IN PARA 8.10 TO 8 .11, WHILE RECORDING THE FINDINGS HAS DRAWN PRESUMPTIONS U/S 1 32(4) IN THE CASE OF APPELLANT JIVRAJ V. DESAI AND RECORDED THE FOLLOWING FINDINGS: 'IN THE PRESENT CASE, WE HAVE NOTED THAT LEARNED CI T(A) HAS OVERLOOKED THE STATEMENT RECORDED U/S 132(4) OF IT ACT AND GIVEN UNDUE WEIGHTAGE TO THE STATEMENT RECORDED U/S 131 OF IT ACT WHICH WERE OTHERWISE NOT SUPPORTED BY EVIDENCE. AT THIS JUNCTURE WE MAY LIKE TO FURTHER CLARIFY THAT THE EV IDENCE ARE THOSE EVIDENCES WHICH ARE FOUND AT THE TIME OF SEAR CH IN SEARCH RELATED MATTERS. THE ENTIRE PROCEEDING REVOLVED ARO UND THE EVIDENCES OR DOCUMENTS FOUND IN THE POSSESSION, AND UNEARTHED AT THE TIME OF SEARCH; SO AS TO DEMONSTRA TE THAT THE DIARY A-L WAS BELONGING TO THE ASSESSEE AND NOT TO ANY THIRD PERSON'. (III) OBSERVATION IN ASST. ORDER : SINCE THE ISSUE WAS NOT RAISED BY AO DURING THE COU RSE OF ASSESSMENT PROCEEDINGS, THERE IS NO DISCUSSION IN T HE ASSESSMENT ORDER ON PRESUMPTION U/S 132(4). (IV) OBSERVATION IN CIT(A)S ORDER : ON PAGE NO.68 IN PARA 13, THE ISSUE RELATING TO PRE SUMPTION U/S 132(4) HAS BEEN DISCUSSED AND WHILE RECORDING THE F INDINGS ON PAGE 69 UNDER PARA 5.11, THE LD.CIT(A) HAS RECORDED THE FINDINGS AS UNDER: 'I HAVE CAREFULLY CONSIDERED THE FACTS AND THE RIVA L SUBMISSIONS AND I HAVE ALSO GONE THROUGH THE SEIZED RECORDS. I HAVE ALSO GONE THROUGH THE REMAND REPORTS AND THE SUBMISSIONS OF THE APPELLANT ON THE REMAND REPORT, AS REPRODUCED HEREI N ABOVE. IT IS AN UNDISPUTED FACT IMPUGNED DIARY BEING ANNEXURE A-L HAS BEEN FOUND DURING THE COURSE OF SEARCH, FROM THE RE SIDENCE OF SHRI ARVIND SHAH, APPELLANT'S ACCOUNTANT. APART FRO M THE DIARY, THERE ARE OTHER VARIOUS LOOSE PAPERS ALSO, WHICH HA S BEEN FOUND FROM THE RESIDENCE OF SHRI ARVIND SHAH, WHICH HAS DIRECT LINK WITH THE NOTINGS IN THE SAID DIARY, ON THE BAS IS OF WHICH, THE A.O. HAS MADE THE ADDITION. (V) CONCLUSION : 1) HON'BLE ITAT HAS WRONGLY DRAWN THAT LD.CIT(A) HAS OVERLOOKED THE STATEMENT RECORDED U/S 132(4). MA NO.02 AND 03/AHD/2015 9 2) THE PRESUMPTION U/S 132(4) IS APPLICABLE IN C ASE OF ARVIND SHAH AS SAID DIARY WAS FOUND FROM THE POSSESSION OF ARVIND SHAH AND NOT FROM THE APPELLANT JIVRAJ V. DESAI. 3) THEREFORE, HON'BLE ITAT ON PAGE 39 IN PARA 8. 11 HAS WRONGLY DRAWN THE PRESUMPTION IN CASE OF JIVRAJ V. DESAI PRESUMING THAT THE SAID DIARY HAS BEEN FOUND FROM T HE POSSESSION OF JIVRAJ V. DESAI WHEREAS THE SAID DIAR Y WAS FOUND FROM THE POSSESSION OF ARVIND SHAH. 2. (I) ISSUE : NO DISCUSSION ABOUT THE AMOUNT OF RS.23,43,08,700 D ELETED BY CIT(A) PERTAINING TO MR. MANOJ VADODARIA, AS CHALLE NGED BY THE REVENUE IN THE GROUNDS OF APPEAL NO.1 (II) OBSERVATION OF HON'BLE ITAT : WHILE DELETING THE REVENUE APPEAL IN IT(SS)A NO.99/ AHD/2004 (REVENUE'S APPEAL) RELATING TO GROUND APPEAL NO.1, AS DISCUSSED BY THE HON'BLE ITAT ON PAGE 2 OF THE ORDE R, THE AMOUNT DELETED BY THE CIT(A) OF RS.26,80,09,000/- I NCLUDES PERTAINING TO MANOJ VADODARIA. HON'BLE ITAT ON PAGE 16 TO 18 IN PARA 4.3 DISCUSSED THE SAID ISSUE RELATING TO 3 PARTIES OF RS.26,80,09,000/-. THEREAFTER, HON'BLE ITAT IN PARA 4.4 HAS DISCUSSED THE FACTS RELATING TO AMOUNT OF RS.2,21,71,300/- IN THE NAME OF JIGNESH V. DESAI AND AMOUNT OF RS.1,15,29,000/-IN THE NAME OF VIKASBHAI SHAH, BUT HAS NOT DISCUSSED THE ISSUE REL ATING TO RS.23,43.08,700/- PERTAINING TO MANOL VADODARIA WHI CH WAS DISCUSSED IN PARA (VIH AVAILABLE ON PAGE NO.21 TO 2 2. PARA (VII) OF THE ORDER OF THE CIT(A). (III) OBSERVATION IN ASST. ORDER : (IV) OBSERVATION IN CIT(A)S ORDER : (V) CONCLUSION : ACCORDINGLY, THE SUBMISSION WITH RESPECT TO THE MAJ OR AMOUNT OF RS.23,43,08,700/- WITH RESPECT TO MANOJ VADODARI A HAS ALTOGETHER BEEN IGNORED BY THE HON'BLE ITAT WHILE D EALING WITH THE GROUND OF APPEAL NO.1 OF THE REVENUE'S APPEAL A ND ONLY FACTS RELATING TO THE AMOUNT OF JIGNESH V. DESAI & VIKASBHAI SHAH HAS BEEN DISCUSSED IN PARA 4.4, IMMEDIATELY AF TER REPRODUCING THE TABLE IN PARA 4.3. MA NO.02 AND 03/AHD/2015 10 3. (I) ISSUE : WRITTEN SUBMISSION OF D.R. CONSIDERED BY HON'BLE IT AT WAS NOT MADE AVAILABLE TO THE A.R. OF THE APPELLANT, (II) OBSERVATION OF HON'BLE ITAT : THE HON'BLE ITAT ON PAGE NOS. 22 TO 25 IN PARA 5.1 WHILE CONSIDERING THE SIDE OF THE REVENUE HAS REPRODUCED THE RELEVANT PORTION OF THE SO CALLED WRITTEN SUBMISSIO N OF DR. (III) OBSERVATION IN ASST. ORDER : (IV) OBSERVATION IN CIT(A)S ORDER : (V) CONCLUSION : NEITHER THE SAID WRITTEN SUBMISSION WAS FILED DURIN G THE COURSE OF APPEAL HEARING, NOR COPY OF THE SAME HAS BEEN PR OVIDED TO THE A.R. OF THE APPELLANT. TWO WRITTEN SUBMISSIONS HAVE BEEN FILED BY THE D.R. VIZ. DATED 9/4/2013 (WHICH HAS BEEN REPLACED BY NEW SUBMISSION DATED 9/4/2013) AND 10/4/2013 WHICH HAS BEEN PROVIDED TO THE A.R. OF THE APPELLANT. SUBMISSION WHICH HAS BEEN REPRODU CED BY THE HON'BLE ITAT AS CLAIMED TO HAVE BEEN FILED BY D.R. IN PARA NO.5.1 WAS NOT MADE AVAILABLE TO THE A.R. OF THE AP PELLANT. 4. (I) ISSUE : FINDING OF THE HON'BLE ITAT, IS CONTRARY TO THE FIN DINGS RECORDED BV THE AO. (II) OBSERVATION OF HON'BLE ITAT : THE HON'BLE ITAT ON PAGE NO. 28 IN PARA-8 HAS OBSER VED: 'THE DIARY HAS SINGLE ENTRY LEDGER ACCOUNT OF VARIO US SHARAFI BUSINESS RELATED PARTIES'. (III) OBSERVATION IN ASST. ORDER : ON PAGE 29 OF THE ASSESSMENT ORDER IN PARA 2, AO WH ILE ANALYZING THE TRANSACTION FOUND RECORDED IN THE DIA RY A-L HAS RECORDED THE FOLLOWING FINDINGS: MA NO.02 AND 03/AHD/2015 11 'THE ACCOUNTS/TRANSACTIONS IN THE DIARY ARE NOT PUR ELY SHARRAFI IN NATURE. THE SAME ARE CLASSIFIED IN THREE CATEGORIES AS UNDER: A) TRANSACTIONS/ACCOUNTS PERTAINING TO THALTEJ LAND DEAL, B) OTHER SHARAFI TRANSACTIONS/ACCOUNTS WITH DEBIT BALANCES/ENTRIES INCLUDING MISCELLANEOUS ACCOUNTS. C) SHARAFI TRANSACTIONS/ACCOUNTS WITH CREDIT BALANC ES/ENTRIES'. (IV) OBSERVATION IN CIT(A)S ORDER : (V) CONCLUSION : THE SAID FINDING OF THE HON'BLE ITAT IS CONTRARY TO THE FINDING OF THE A.O. AS POINTED OUT DURING THE COURSE OF APPEAL ARGUMENT AND SPECIFICALLY VIDE PARA NO.3.5 OF THE SYNOPSIS O F THE ARGUMENTS. THE SAID FINDING OF THE HON'BLE ITAT IS CONTRARY TO THE FINDING OF THE A.O. 5. (I) ISSUE : FINDING OF THE HON'BLE ITAT RELATING TO THE STATEME NT DATED 250/10/2000 OF SHRI ARVIND A. SHAH. (II) OBSERVATION OF HON'BLE ITAT : THE HON'BLE ITAT ON PAGE NO.29 IN PARA NO.8, HAS DI SCUSSED THE STATEMENT OF SHRI ARVIND A. SHAH RECORDED U/S. 143(4) ON 20/10/2000 AND THEREFORE CONCLUDED AS UNDER: 'IN THE LIGHT OF THE SAID STATEMENT OF SRI SHAH, WE HAVE CAREFULLY PERUSED THE PHOTOCOPY OF THE SAID DIARY, BEING A PA RT OF THE COMPILATION AS WELL AS AN ENGLISH VERSION OF THE SA ID DIARY PLACED BEFORE US FROM THE SIDE OF THE REVENUE'. (III) OBSERVATION IN ASST. ORDER : (IV) OBSERVATION IN CIT(A)S ORDER : (V) CONCLUSION : THE DISCUSSION OF THE HON'BLE ITAT ON PAGE NO.28 & 29 IN PARA NO.8 IS PERTAINING TO THE STATEMENT U/S 132(4) OF A RVIND A. SHAH ON 20/10/2000, WHICH IS ON THE BASIS OF DISCUSSION MADE BY THE AO ON PAGE 8 OF THE ASSESSMENT ORDER. HOWEVER, VIDE SYNOPSIS OF THE ARGUMENT SUBMITTED DURING THE COURS E OF APPEAL HEARING BY THE A.R., ATTENTION TO PARA NO.2. 3 WAS DRAWN ON THE STATEMENT U/S 131 OF THE SAID SHRI ARVIND A. SHAH MA NO.02 AND 03/AHD/2015 12 RECORDED ON 24/9/2002 WHEREIN WHILE ANSWERING TO QU ESTION NO.6, THE LOOSE PAGE NO.93 TO 99 WERE CLEARLY EXPLA INED AS RELATING THE SAID LAND. ACCORDINGLY, THE CONCLUSION HAS BEEN DRAWN ONLY ON THE BASIS OF STATEMENT DATED 20/10/2000, IGNORING STATEMENT D ATED 24/9/2002. 6. (I) ISSUE FINDING OF THE HON'BLE TRIBUNAL THAT NO SUPPORTING EVIDENCES WERE FURNISHED. (II) OBSERVATION OF HON'BLE ITAT : HON'BLE ITAT AFTER DISCUSSING THE STATEMENTS RECORD ED U/S 132(4) AND 131 IN PARA NO.8.5 & 8.6 HAS COME TO THE CONCLUSION IN PARA NO.8.8 THAT ASSESSEE HAS CHANGED THE STATEMENT AND NO CORROBORATIVE DOCUMENTARY EVIDENCE S WERE SUBMITTED BY THE ASSESSEE TO SUBSTANTIATE THE SAID CLAIM. (III) OBSERVATION IN ASST. ORDER : (IV) OBSERVATION IN CIT(A)S ORDER : ON PAGE NO.70 TO 73 UNDER PARA 5.12 WHILE RECORDING FINDINGS BY CIR(A), REFERENCE HAS BEEN MADE TO THE FOLLOWING LOOSE PAPERS: PAGE LOOSE PAPERS 71 A-3 PAGE 35-36 BEING MOU 72 A-3 PAGE 82 73 A-3 PAGES 26, 30, 31, 32, 49 TO 52 74 A-3 PAGE 1 A-3 PAGE 7 & 8 A-4 PAGE 91 A-3 PAGE 2 CONCLUSION: IN THIS RESPECT, ATTENTION IS DRAWN TO THE ELABORAT E ARGUMENTS WHICH HAS TAKEN PLACED DURING THE COURSE OF APPEAL HEARING BY THE A.R. WHEREIN ATTENTION WAS DRAWN TO THE FACT TH AT SEVERAL REMAND REPORTS WERE SOUGHT BY THE CIT(A) FROM THE A .O. BUT MA NO.02 AND 03/AHD/2015 13 NONE OF THE OBSERVATION OF THE A.O. IN THE REMAND R EPORT HAS BEEN CONSIDERED BY THE HON'BLE TRIBUNAL. THE ONLY T WO STATEMENTS RECORDED U/S 132(4) AND 131 HAS BEEN CON SIDERED AND REFERENCE TO VARIOUS LOOSE PAPERS OF ANNEXURE A -3 AND A-4 AS MADE BY THE CIT(A) IN PARA NO.5.12 OF THE ORDER OF THE CIT(A) HAS ALTOGETHER BEEN IGNORED. THEREFORE, THE SAID FINDING IS CONTRARY TO THE RECORDS AND FINDINGS OF THE CIT( A) 7. (I) ISSUE : THAT THE ASSESSEE HAS NOT DISCHARGED ONUS RELATING TO 9 LEDGER ACCOUNTS IN THE DIARY A-L. (II) OBSERVATION OF HON'BLE ITAT : HON'BLE ITAT ON PAGE 36 IN PARA 8.9 IN THE BEGINNIN G PART HAS DISCUSSED THE ISSUE RELATING TO THE 9 LEDGER ACCOUN TS OF THE DIARY A-L AND OBSERVED THAT ASSESSEE WAS GRANTED SE VERAL OPPORTUNITIES TO PRODUCE THOSE PARTIES IN RESPECT O F THE CONTENTION THAT IT WAS NOT RELATING TO THE SHARAFI BUSINESS AND ASSESSEE HAS NOT DISCHARGED SAID ONUS. (III) OBSERVATION IN ASST. ORDER : (IV) OBSERVATION IN CIT(A)S ORDER : (IV) CONCLUSION : THE LIST OF THE SAID 9 PARTIES IS APPEARING ON PAGE 25 OF THE ORDER OF THE CIT(A) AND IT WAS SUBMITTED TO CIT(A) AS WELL AS HON.ITAT THAT ONLY ONE NAME VIKASBHAI SHAH IS INCLU DED IN THE 9 NAMES WHICH HAS BEEN DELETED BY THE CIT(A) OF RS. 1,15,29,0007-. AS COMPLETE IDENTITY AND THE DETAILS OF VIKASBHAI SHAH WAS SUBMITTED TO THE AO IN THE REMAND REPORT PROCEEDINGS WHICH HAS BEEN DISCUSSED BY THE CIT(A) IN THE BEGINNING PART ON PAGE NO.74 OF HIS FINDING. THEREF ORE, THE HON'BLE ITAT HAS OVERLOOKED THE FACT THAT ADDITION WHICH HAS BEEN DELETED BV CIT(A) WITH RESPECT TO MANOJ VADODA RIA AND JIQNESH V. DESAI IS NOT FORMING PART OF THE SAID 9 NAMES AND FURTHER ABOUT VIKASBHAI A. SHAH ONUS WAS DISCHARGED AS COPY OF THE BLOCK ASSESSMENT IN THE CASE OF VIKAS A. SHA H WHEREIN THIS ASPECT HAS ALREADY BEEN CONSIDERED WAS ALSO PO INTED OUT IN PARA NO.9.2 OF THE SYNOPSIS OF ARGUMENTS AND THE COPY OF THE ASSESSMENT ORDER IN THE CASE OF VIKAS SHAH WAS ALSO SUBMITTED ON PAGE NOS. 148 TO 152 OF THE ADDITIONAL PAPER BOOK. THEREFORE, THE SAID OBSERVATION OF THE HON'BL E ITAT IS CONTRADICTORY TO THE RECORDS AND FACTS. MA NO.02 AND 03/AHD/2015 14 8. (I) ISSUE : THALTEJ LAND HAS BEEN TAKEN AS SECURITY AGAINST THE LOAN ADVANCED. (II) OBSERVATION OF HON'BLE ITAT : THE HON. ITAT IN PARA NO.8.11 HAS GIVEN FINDING AS UNDER: 'THEREFORE, THE CONCLUSION IS THAT THE THALTEJ LAND WAS ALSO CONNECTED WITH THE SHARAFI BUSINESS AND THE ASSESSE E WAS MONITORING THE LAND TRANSACTION SO AS TO SECURE HIS LOAN ADVANCED TO THE PARTIES AS NOTED IN THE DIARY. LEAR NED CIT(A) HAS NOT LOOKED IN THIS ASPECT AND UNILATERALLY HELD THAT THE AMOUNT WHICH WAS RECORDED WAS REQUIRED TO BE CONSID ERED IN THE CASE OF ONE SRI MANOJ VADODARIA'. (III) OBSERVATION IN ASST. ORDER : (IV) OBSERVATION IN CITF AVS ORDER : (V) CONCLUSION : IT IS RESPECTFULLY SUBMITTED THAT THE SAID OBSERVAT ION OF THE HON'BLE ITAT THAT THALTEJ LAND WAS CONNECTED WITH T HE SHARAFI BUSINESS AND ASSESSEE WAS MONITORING THE LAND TRANS ACTION TO SECURE HIS LOAN ADVANCED TO THE PARTIES NOTED IN TH E DIARY, IS CONTRARY TO THE FACTS AND RECORDS. IT WAS NOT THE FINDING OF BOTH THE LOWER AUTHORITIES THAT THALTEJ LAND HAS BEEN TA KEN AS SECURITY BY THE APPELLANT FOR HIS FINANCING BUSINES S; RATHER ISSUE BEFORE BOTH THE LOWER AUTHORITIES WAS THAT THE DIAR Y INTER ALIA INCLUDES TRANSACTIONS RELATING TO THE THALTEJ LAND IN WHICH APPELLANT WAS NOT INVOLVED AS PER DOCUMENTARY EVIDE NCE IN THE FORM OF MOU DATED 5/7/1998. THEREFORE, THE CIT(A) A FTER CO- LINKING THE VARIOUS OTHER SEIZED MATERIAL WITH THE AMOUNT NOTED IN THE DAIRY HAS DELETED THE ADDITION, BY OBSERVING AS UNDER IN PARA NO.5.12, AS CONSIDERED BY ITAT IN PARA NO.4.5: '5.12 THEREFORE, THE CONTENTION RAISED BY THE APPEL LANT DURING THE COURSE OF APPEAL HEARING WAS VERY MUCH AVAILABL E BEFORE THE ASSESSING OFFICER IN THE STATEMENT RECORDED BY, STILL ASSESSING OFFICER IN THE STATEMENT RECORDED BY, STI LL ASSESSING OFFICER HAS PREFERRED TO MAKE THE ADDITION IN THE H ANDS OF THE APPELLANT ON THE BASIS OF SAID DIARY WITHOUT EXCLUD ING THE TRANSACTIONS PERTAINING TO THE SAID LAND, WHICH IN MV VIEW IS NOT CORRECT AS NEITHER DURING THE COURSE OF SEARCH, NOT IN THE POST SEARCH ENQUIRIES, INCLUDING THE REMAND REPORTS, ANY EVIDENCE HAS BEEN BROUGHT ON RECORD BY THE ASSESSING OFFICER INDICATING ANY INVESTMENT BY THE APPELLANT IN THE SAID LAND. THEREFORE, IN MA NO.02 AND 03/AHD/2015 15 ABSENCE OF ANY EVIDENCES, SUGGESTING EITHER OWNERSH IP OR CONTROL OR PAYMENT BY THE APPELLANT PERTAINING TO T HE SAID LAND, I AM AFRAID NO ADDITION CAN BE MADE IN THE HANDS OF A PPELLANT FOR SUCH TRANSACTIONS, MOREOVER, WHEN DURING THE COURSE OF SEARCH, CERTAIN OTHER EVIDENCES WERE ALSO FOUND FROM THE RE SIDENCE OF ARVIND SHAH INDICATING TRANSACTIONS BETWEEN SUCH PE RSONS AS REFERRED BY THE APPELLANT, WHICH I SHALL BE DISCUSS ING IN THE LATER PART OF THIS ORDER'. 9. (I) ISSUE : THAT CIT HAS NOT PERUSED THE CASE RECORDS OF MANOJ VADODARIA. (II) OBSERVATION OF HON'BLE ITAT : HON.ITAT HAS FURTHER OBSERVED ON PAGE 39 IN PARA 8. 11 AS UNDER: 'THE DECISION OF LEARNED CIT(A) APPEARS TO BE INCOR RECT BECAUSE ON HIS PART IN THE ABSENCE OF PERUSAL OF TH E CASE RECORDS OF SRI MANOJ VADODARIA, IT WAS NOT JUSTIFIA BLE FOR CIT(A) TO TAKE DECISION BY APPRECIATING THE FACTS OF ONE S IDE ONLY'. (III) OBSERVATION IN ASST. ORDER : (IV) OBSERVATION IN CITF AVS ORDER : (V) CONCLUSION : IT IS RESPECTFULLY SUBMITTED THAT WHEN THE CIT(A) P ASSED ORDER IN CASE OF APPELLANT ON 19/1/2001, ONLY THE NOTICE U/S . 158BD WAS ISSUED IN CASE OF MANOJ VADODARIA AND ASSESSMENT WA S COMPLETED IN CASE OF MANOJ VADODARIA U/S 158BD ON 29/12/2004. THEREFORE, THERE WAS NO OCCASION TO CON SIDER CIT(A) THE ASSESSMENT IN CASE OF MANOJ VADODARIA. T HEREFORE, THE SAID OBSERVATION IS ALSO CONTRARY TO THE FACTS AND RECORDS. 10. BRIEF FACTS OF THE CASE ARE THAT A SEARCH UNDER SECTION 132 OF THE INCOME TAX ACT, 961 WAS CARRIED OUT ON 20.10.20 00. A NOTICE UNDER SECTION 158BC WAS ISSUED AND SERVED UPON THE A SSESSEE. HE HAS FILED HIS RETURN OF INCOME ON 14.10.2002 DEC LARING NIL INCOME FOR THE BLOCK PERIOD STARTING FROM THE ASSES SMENT YEAR 1991-92 AND ENDING ON 2001-02. ACCORDING TO THE AO , THE ASSESSEE IS THE MAIN PERSON OF MASTER GROUP WHICH I S ENGAGED IN MA NO.02 AND 03/AHD/2015 16 THE DEVELOPMENT OF RESIDENTIAL AND COMMERCIAL BLOCK S. GROUP IS ALSO IN THE BUSINESS OF LAND TRANSACTION AND HOTEL BUSINESS. THE AO FURTHER NOTICED THAT THE ASSESSEE WAS DOING BUSI NESS OF CASH FINANCE. DURING THE COURSE OF SEARCH CERTAIN DOCUM ENTS WERE FOUND SHOWING SHARAFI BUSINESS. THE AO HAS MADE AN ADDITION OF RS.27,32,38,000/- IN RESPECT OF SHARAFI BUSINESS. ON APPEAL, THE LD.CIT(A) RESTRICTED THIS ADDITION TO RS.52,29,000/ -. REVENUE IN ITS APPEAL I.E. IT(SS)A.NO.99/AHD/2004 CHALLENGED T HIS PART OF DELETION. THE TRIBUNAL MADE DETAILED ANALYSIS OF T HE MATERIAL AVAILABLE ON RECORD AND REVERSED THE FINDING OF THE LD.CIT(A) MAJOR ERROR ACCORDING TO THE ASSESSEE CREPT IN THE FINDIN G OF THE TRIBUNAL WHILE DEALING WITH THIS GROUND OF APPEAL. IT IS PE RTINENT TO OBSERVE THAT A DIARY, ANNEXURE A/1 WAS FOUND FROM THE RESID ENTIAL PREMISES OF ONE SHRI ARVINDBHAI SHAH WHO HAPPENED T O BE ACCOUNTANT OF THE ASSESSEE. HE HAS DISCLOSED THAT THIS DIARY WAS BEING WRITTEN ON THE BASIS OF INSTRUCTION OF THE AS SESSEE. THUS THE TRIBUNAL WAS CALLED UPON TO MAKE AN ANALYSIS OF THE STATEMENT OF SHRI ARVIND SHAH RECORDED UNDER SECTION 132(4) OF T HE ACT ON 20.10.2000. THEREAFTER, HIS STATEMENT WAS RECORDED UNDER SECTION 131 ON 19.9.2002. ON AN ANALYSIS OF THE SE IZED MATERIALS AS WELL AS FINDING OF THE AO, THE TRIBUNAL ARRIVED AT A CONCLUSION THAT THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITI ON ON ACCOUNT OF SHARAFI BUSINESS PARTLY. 11. LET US REVERT TO THE SPECIFIC OBJECTION HIGHLIG HTED BY THE ASSESSEE IN HIS SYNOPSIS FILED DURING THE COURSE OF HEARING BEFORE THE TRIBUNAL. THE FIRST ISSUE POINTED BY THE ASSES SEE IS THAT ITAT HAS DRAWN PRESUMPTION UNDER SECTION 132(4) ON THE D IARY A/1 FOUND FROM SHRI ARVIND SHAH. WITH REGARD TO THIS, THE ASSESSEE HAS PROPOUNDED TWO FOLD SUBMISSIONS. IN HIS FIRST FOLD OF MA NO.02 AND 03/AHD/2015 17 SUBMISSIONS, HE CONTENDED THAT DIARY WAS FOUND FROM ARVINDBHAI SHAH AT HIS RESIDENCE. THUS, PRESUMPTION OF TRUTH QUA THAT MATERIAL COULD NOT BE DRAWN IN THE CASE OF ASSESSEE FROM WHOSE POSSESSION SUCH DIARY WAS NOT FOUND. IN THE SECOND FOLD OF SUBMISSIONS THE ASSESSEE HAS SUBMITTED THAT THE TRI BUNAL HAS WRONGLY OBSERVED THAT THE LD.CIT(A) HAS OVERLOOKED THE STATEMENT RECORDED UNDER SECTION 132(4) OF THE ACT. ON DUE CONSIDERATION OF ALL THESE OBJECTIONS, WE ARE OF THE VIEW THAT IN THE PRESENT PROCEEDINGS, WE ARE NOT CALLED UPON TO FIND OUT WHE THER THE TRIBUNAL HAS COMMITTED AN ERROR IN APPRECIATING THE EVIDENCE. OUR JURISDICTION IS, HAD THIS POINT SUBMITTED BY THE AS SESSEE BEEN TAKEN ON THE FACE VALUE THEN ALSO, COULD THE RESULT ON THIS ASPECT BE DIFFERENT ? IT IS PERTINENT TO OBSERVE THAT BEF ORE THE TRIBUNAL THE ISSUE WAS, WHETHER DIARY FOUND DURING THE COURS E OF SEARCH IS TO BE CONSIDERED AS RELATABLE TO THE ASSESSEE, AND HE IS REQUIRED TO EXPLAIN THE NOTING IN THIS DIARY. SECOND ASPECT IS WHETHER STATEMENT RECORDED UNDER SECTION 132(4) AT THE TIME OF SEARCH OF SHRI ARVIND SHAH IS TO BE GIVEN PREFERENCE OVER THE STATEMENT RECORDED UNDER SECTION 131 IN SEPTEMBER, 2002. TO OUR MIND, THERE IS NO APPARENT ERROR IN THE ORDER OF THE TRIB UNAL. THE TRIBUNAL HAS MADE ANALYSIS OF THE STATEMENT OF SHRI ARVIND SHAH, AND THEREAFTER OBSERVED THAT ACCORDING TO THIS STAT EMENT, DIARY WAS TO BE CONSIDERED AS RELATABLE TO THE ASSESSEE, BECAUSE THE SHRI ARVIND SHAH WAS ACCOUNTANT WORKING WITH THE AS SESSEE AND USED TO WRITE DIARY UNDER THE INSTRUCTIONS OF THE A SSESSEE. STATEMENT GIVEN AT THE TIME OF SEARCH IS THE FIRST STATEMENT WHICH OTHERWISE ALSO ADMISSIBLE AS PROVIDED IN SECTION 13 2(4), BUT THAT WAS ALSO, ACCORDING TO THE RULE OF PRUDENCE THAT ON CE THE FIRST STATEMENT GIVEN BY A PERSON WITHOUT ANY CONSULTANCY , THE MA NO.02 AND 03/AHD/2015 18 STATEMENT GIVEN AFTER TWO YEARS OF SEARCH IS BEING PRESUMED TO BE GIVEN AFTER DUE DELIBERATIONS AND CONSULTATION. WE ARE NOT HERE TO EXPLAIN THE ORDER OF THE ITAT AS TO WHAT OPERATED I N THE MINDS OF HONBLE MEMBERS WHILE APPRECIATING THE CONTROVERSY, OUR CONCERN IS WHETHER ANY APPARENT ERROR HAS BEEN COMMITTED WH ICH GOAD THE TRIBUNAL TO REACH WRONG CONCLUSIONS. TO OUR MIND T HERE IS NO SUCH ERROR. THE TRIBUNAL HAS APPRECIATED THE EVIDENCE A CCORDING TO ITS UNDERSTANDING AND TAKEN ONE OF THE POSSIBLE OPINION S. 12. IN THE NEXT ISSUE IT HAS BEEN PLEADED THAT NO D ISCUSSION WAS MADE ABOUT THE AMOUNT OF RS.23,43,08,700/- DELETED BY THE LD.CIT(A). AGAIN TO OUR MIND, IT IS VERY MINOR PER IPHERAL ISSUE. AT THE TIME OF HEARING TRIBUNAL TOOK INTO COGNIZANCE B IFURCATION OF RS.27,32,38,000/-. WHILE TAKING COGNIZANCE OF THE STATEMENTS MADE BY THE ASSESSEE IN PARA 5.3, THE TRIBUNAL HAS TAKEN INTO CONSIDERATION BIFURCATION OF TOTAL AMOUNTS AND AS T O HOW RS.23,43,08,700/- HAS BEEN TREATED BY THE CIT(A) CO ULD BE ASSESSABLE IN THE HANDS OF MANOJ VADODARIA IN WHOSE CASE 153-BD PROCEEDINGS WAS ALLEGEDLY PENDING. ONCE THE TRIBUN AL HAS TAKEN INTO CONSIDERATION WHOLE AMOUNT AND APPRECIATED THE CONTROVERSY WITH THAT ANGLE, REVERSED THE FINDING OF THE LD.CIT (A) THEN NOT TAKING INTO CONSIDERING THIS ISSUE SEPARATELY, IS N OT AN APPARENT ERROR. IT IS SUCH A MINOR ASPECT WHICH HAS NOT INF LUENCED THE DECISION MAKING PROCESSING. IMPLIEDLY, THIS GROUND AND ASPECT IS EMBEDDED IN THE OVERALL FINDING OF THE TRIBUNAL RUN NING INTO FIRST 40 PAGES. 13. IN THE NEXT ISSUE, THE ASSESSEE HAS PLEADED THA T THE TRIBUNAL TOOK COGNIZANCE OF THE WRITTEN SUBMISSION OF THE LD .DR, WHICH WAS MA NO.02 AND 03/AHD/2015 19 NOT SUPPLIED TO IT. WE HAVE PASSED AN INTERIM-ORDE R ON THIS ASPECT ON 27.11.2017, WHICH READS AS UNDER: 27.11.2017 AFTER CONCLUSION OF HEARING IN THESE MI SC.APPLICATIONS, TRIBUNAL HAS OBSERVED THAT REFERENCE TO PAGE NO.82, PARA 6 OF THE TRIBUNALS ORDER WAS MADE BY THE LD.REPRESEN TATIVE AND IT WAS CONTENDED THAT INVESTMENT WAS MADE FROM EXPLAINED SOURCES DULY ACCOUNTED IN THE BOOKS OF AC COUNTS, AND SUCH BOOKS OF ACCOUNTS HAVE NOT BEEN REJECTED. THESE BOOKS HAVE ALREADY BEEN CALLED FOR AND EXAMINED BY THE LD.AO AND THE TRIBUNAL OUGHT TO HAVE NOT SET ASIDE ISSUE TO THE FILE OF THE AO. WHILE VERIFYING THE ABOVE ASSE RTION, WE FACED LITTLE DIFFICULTY ON CERTAIN FACTUAL ISSUES, AND THEREFORE, THESE MAS. WERE RE-FIXED FOR CLARIFICATI ON OF CERTAIN ISSUES. DURING THE HEARING, THE LD.COUNSEL FOR THE ASSESSEE CONTENDED THAT THESE ISSUES ARE INVOLVED IN M.A.NO. 4 AND 5. THE ASSESSEE DID NOT PRESS THESE MAS., AND THEY CAN BE DISMISSED. MA NO.4 AND 5 ARE BEING FILED IN THE OR DER OF THE TRIBUNAL DATED 13/12/2013 PASSED IN ITA NO.3437 AND 3438/AHD/2007. TRIBUNAL HAS DECIDED OTHER APPEALS ALSO ALONG WITH THIS ORDER. CONSIDERING STAND OF THE AS SESSEE, THESE TWO MAS. ARE DISMISSED. AS FAR AS MA NO.2 AND 3 IN ITA NO.99/AHD/2004 AND 106/AHD/2004 ARE CONCERNED, THE ASSESSEE HAS RAISED A PLEA APART FROM OTHER SUBMISSIONS THAT TRIBUNAL HAS TAKEN COGNIZANCE OF THE SUBMISSIONS MADE BY THE LD.DR IN PARA 5.1. IN OTHER WORDS, THE TRIBUNAL HAS REPRODUCED W RITTEN SUBMISSIONS GIVEN BY THE LD.DR. ACCORDING TO THE ASSESSEE, COPY OF THIS SUBMISSION WAS NEVER GIVEN N OR WAS DISCUSSED DURING THE COURSE OF HEARING. ON VERIFIC ATION OF RECORD, WE FIND THAT COPY OF THIS WRITTEN SUBMISSIO N IS AVAILABLE, BUT IT IS WITHOUT SIGNATURE OF ANY AUTHO RITY AND WITHOUT ANY DATE. THE ABOVE PLEA TAKEN BY THE ASSE SSEE HAS RAISED A DOUBT ABOUT SANCTITY OF PROCEEDINGS BE FORE THE TRIBUNAL, AND IF ON VERIFICATION OF RECORD, IT IS F OUND TO BE CORRECT, THEN PROCEEDINGS WOULD BE CONSTRUED AS VIT IATED. THUS, ASSESSEE CANNOT BE PERMITTED TO RAISE A BALD ALLEGATION ON THE PROCEEDINGS FOR CONDUCTING A ROVI NG INQUIRY WITHOUT ANY CONSEQUENCE FOR THE ALLEGATOR. THE ASSESSEE SHOULD ATLEAST FILE AN AFFIDAVIT IN SUPPOR T OF SUCH ALLEGATIONS SO THAT A REPORT FROM DRS OFFICE COULD BE CALLED FOR EXHIBITING UNDER WHOSE SIGNATURE AND ON WHICH D ATE SUCH SUBMISSIONS WERE FILED BEFORE THE TRIBUNAL. IT IS ALSO PERTINENT TO OBSERVE THAT AFTER HEARING THESE MAS., IN THE LAST ONE-AND-HALF MONTHS JUDICIAL MEMBER REMAINED E ITHER ON TOUR OR ON LEAVE. THEREFORE, MAS., COULD NOT BE DISPOSED WITHIN TIME LIMIT STIPULATED IN RULE 34 OF INCOME MA NO.02 AND 03/AHD/2015 20 TAX (APPELLATE TRIBUNAL) RULES, 1963. THUS, ON ACC OUNT OF THIS CUMULATIVE EFFECT I.E. NON-ADJUDICATION OF THE MAS., WITHIN TIME LIMIT COUPLED WITH FACT THAT THE ASSESS EE HAS NOT FILED AFFIDAVIT SUPPORTING ALLEGATION THAT DEPA RTMENT HAS NOT FILED WRITTEN SUBMISSIONS DURING THE COURSE OF HEARING, WE DEEM IT APPROPRIATE TO HEAR THESE MAS. AFRESH. THEREFORE, THEY ARE RELEASED AND REGISTRY IS DIRECT ED TO LIST THEM FOR HEARING ON 5 TH JANUARY, 2018. BOTH PARTIES BE INFORMED ACCORDINGLY. SD/- SD/- (PRAMOD KUMAR) (RAJPAL YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER 14. THE ASSESSEE HAS FILED AN AFFIDAVIT STATING THE REIN THAT COPY OF THE SUBMISSIONS WAS NOT SUPPLIED. THE LD.DR POI NTED OUT THAT ORIGINAL COPY OF SUBMISSIONS IS AVAILABLE WITH THE FILE OF DR. IT IS ALSO FILED ON THE RECORD OF THE ITAT. HE FURTHER P OINTED OUT THAT WHENEVER SUBMISSIONS ARE BEING GIVEN ACROSS THE BAR , ACKNOWLEDGEMENTS ARE NOT BEING TAKEN. ONCE THE COP Y OF THE SUBMISSIONS ON THE RECORD OF THE TRIBUNAL AND HAS B EEN CONSIDERED BY THE TRIBUNAL, THEN ON THE BASIS OF SU CH AFFIDAVIT, IT COULD NOT BE CONCLUDED THAT PROCEEDINGS HAVE BEEN V ITIATED. ON THE OTHER HAND, THE LD.COUNSEL FOR THE ASSESSEE CON TENDED THAT COPY OF THE SUBMISSIONS WAS NOT SUPPLIED TO THE ASS ESSEE. 15. WE HAVE CONSIDERED THIS ISSUE AND PERUSED THE W RITTEN SUBMISSIONS REPRODUCED IN PARA 5.1. WE FIND THAT N OTHING NEW IS CONTAINED IN THE SUBMISSIONS. IT IS NOT SOMETHING, WHICH IF EXCLUDED, WOULD CHANGE THE RESULT OR IMPACTED THE A SSESSEE ADVERSELY. IT IS ONE FOLD OF SUBMISSIONS AMONGST O THERS, WHICH IS OTHERWISE NOTED AND SUBMITTED DURING THE COURSE OF HEARING. THE ASSESSMENT ORDER IS BASED ON THIS LINE OF SUBMISSIO NS, AND THEREFORE, IT COULD NOT BE CONCLUDED THAT SOMETHING NEW IS TAKEN FROM THE BACK OF THE ASSESSEE. THUS, WE ARE OF THE VIEW THAT ARGUMENTS OF THE ASSESSEE IN THIS RESPECT ARE DEVOI D OF ANY MERIT MA NO.02 AND 03/AHD/2015 21 BECAUSE ALLEGED SUBMISSIONS WAS ONE FOLD OF CONTENT IONS AMONGST OTHERS, AND NOT SOME DISCOVERY OF NEW FACTS. EVEN FOR ARGUMENTS SAKE, IT IS PRESUMED THAT COPY WAS NOT SUPPLIED THE N ALSO THIS ONE-HALF PAGE SUBMISSION REPRODUCED BY THE ITAT IS NOT A SOLE BASIS OF REASONING GIVEN IN ITS ORDER. IT IS JUST ONE FACET FOR CORROBORATION OF CONCLUSIONS. ON THE BASIS OF THIS PLEA OF THE ASSESSEE, WE CANNOT SAY THAT PROCEEDINGS WERE VITIA TED OR ANY ERROR CREPT IN THE FINDING OF THE TRIBUNAL. THE AS SESSEE COULD FILE APPEAL AND POINT OUT THIS ERROR, BUT IT DOES NOT FA LL WITHIN THE AMBIT OF SECTION 254(2) OF THE ACT. 16. NEXT ERROR POINTED OUT BY THE ASSESSEE IS THAT WHILE RECORDING CONCLUSION IN PARA 8.8, THE TRIBUNAL MADE REFERENCE TO THE STATEMENT RECORDED UNDER SECTION 132(4) AND 131 OF SHRI ARVINDBHAI SHAH, BUT FAILED TO TAKE COGNIZANCE OF V ARIOUS LOOSE PAPERS FOUND AT THE TIME OF SEARCH INVENTORISED AS A/3, A4 CONTAINING PAGE NOS.26 TO 52 OF A/3 AND 91 OF A/4. THE LD.CIT(A) HAS CONSIDERED THESE PAGES, AND THEREAFTER HARBOURE D A BELIEF THAT OUT OF TOTAL TRANSACTIONS NARRATED IN THE DIARY, SO ME OF THE TRANSACTIONS ARE RELATED TO THALTEJ LAND, AND THESE TRANSACTIONS WERE NOT BELONGING TO THE ASSESSEE, RATHER THEY REL ATED TO MANOJ VADODARA. ACCORDING TO THE ASSESSEE, TRIBUNAL FAIL ED TO TAKE COGNIZANCE OF THESE LOOSE PAPERS AND FINDING OF THE LD.CIT(A), THUS ARRIVED AT A WRONG CONCLUSION. ON DUE CONSIDERATIO N OF ALL THESE PLEAS OF THE ASSESSEE, WE ARE OF THE VIEW THAT WE A RE NOT SITTING IN APPEAL OVER THE ORDER OF THE TRIBUNAL. WE ARE REQU IRED TO RE- APPRECIATE THE EVIDENCE. WE HAVE TO FIND OUT WHETH ER THESE ASPECTS HAVE BEEN CONSIDERED OR NOT BY THE TRIBUNAL . IT IS CONSCIOUS DECISION AFTER EVALUATION OF ALL EVIDENCE S. THERE IS NO APPARENT ERROR AS SUCH IN THE ORDER OF THE TRIBUNAL . THE ASSESSEE MA NO.02 AND 03/AHD/2015 22 IS TRYING TO POINT OUT VERY MINOR APPARENT ERROR I. E. OBSERVATION OF THE TRIBUNAL THAT DIARY HAS A SINGLE ENTRY LEDGER A CCOUNT OF VARIOUS SHARAFI BUSINESS, WHEREAS ACCORDING TO THE AO DIARY CONTAI NED ACCOUNTS/TRANSACTION NOT PURELY SHARAFI IN NATURE. THE SAME ARE CLASSIFIED IN THREE CATEGORIES. WE DO NOT SEE THAT REFERENCE TO SUCH SMALL ASPECTS WOULD HAVE BEARING ON THE DECISI ON MAKING PROCESS. THE TRIBUNAL HAS ANALYZED THE ISSUE. MOR E SO, THESE ASPECTS ARE NOT TO BE LOOKED INTO IN A PROCEEDING U NDER SECTION 254(2) OF THE ACT. ON OVERALL ANALYSIS OF BOTH THE MAS. WE ARE OF THE VIEW THAT THE ASSESSEE HAS TRIED TO GET THE ORD ER OF THE TRIBUNAL REVIEWED IN THE GARB OF POINTING OUT APPAR ENT MISTAKE, WHICH IS NOT PERMISSIBLE IN LAW. WE DO NOT FIND AN Y APPARENT MISTAKE IN THE ORDER OF THE TRIBUNAL, HENCE, BOTH T HE MAS. ARE REJECTED. 17. IN THE RESULT, BOTH THE MAS. ARE DISMISSED. ORDER PRONOUNCED IN THE COURT ON 6 TH JUNE, 2018. SD/- SD/- (PRAMOD KUMAR) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 06/06/2018