9911796707
TMI Blog2010 (6) TMI 800X X X X Extracts X X X X X X X X Extracts X X X X ..... med by ld CIT(A) is bad in law and against the facts and circumstances of the case. 3. That having regard to the facts and circumstances of the case, Ld CIT(A) has erred in law and on facts in confirming the action of the Ld Assessing Officer in framing the impugned assessment without assumption valid jurisdiction and as such impugned assessment was liable to be declared null and void, more so when notice u/s 158BC was void. 4. That the appellant craves the leave to add, amend, modify delete any of the grounds of appeal before or at the time of hearing and all the above grounds are without prejudice to each other. 4. It was submitted by the ld AR of the assessee that ground No. 3 is not pressed and accordingly the same is dismissed as not pressed. Ground No.4 is general and in ground No. 1 2, the issue involved is common. 5. The facts in brief are that It is noted by the Assessing Officer on page No.7 of the assessment order that during the course of search, two cars bearing No. HR-5- D-0939 and UP-14-D-5428 (Ceilo) were found at the resident of the assessee. It is also noted by the Assessing Officer that the keys of these cars were found at the residence of Shri I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment order on this issue on the basis that a perusal of the statement of Shri Inderjit Singh Sabharwal clearly shows that these vehicles belonged to his brother Shri Bahadur Singh Sabharwal i.e. the present assessee. Now, the assessee is in further appeal before us. 6. It was submitted by Ld AR of the assessee that Panchnama is available on pages 5-19 of the paper book and there is no mention in the Panchnama that any car was found or any car key was found in the course of search. Regarding the statement of Shri Inderjit Singh Sabharwal, it was submitted that the same is available on page No.461 of the paper book in Departmental appeal in the case of Shri Inderjit Singh Sabharwal. Our attention was also drawn to the statement of the assessee recorded on 26.4.1998 which is available on pages 406-414 of the paper book in Departmental appeal in assessee s own case and it is submitted that in this statement, no question was asked from the assessee with regard to these cars which are alleged to be owned by the assessee. It is also submitted that a questionnaire dated 22.3.2001 was issued by the Assessing Officer and copy of which is available on pages 20-24 of the paper book and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing Officer for a fresh decision after making detailed enquiries and after recording statement of the assessee with regard to these two cars and after making enquiries from Shri Dinesh Kumar and Shri Subash Chander. If required, the assessee may be allowed to cross examine his brother Shri Inderjit Singh Sabharwal and after detailed enquiry, the Assessing Officer should decide this issue afresh and pass necessary order as per law after providing adequate opportunity of being heard to the assessee. 9. In the result, the appeal of the assessee stands partly allowed for statistical purposes. 10. Now, we take up revenue s appeal in I.T.(SS).A. No.297/Del/2005. 11. Ground No.1 of the appeal reads as under:- On the facts and circumstances of the case whether the CIT(A) was right in law in deleting the addition of ₹ 5,00,000/- on account of undisclosed investment in purchase of land from Smt. Sarla Devi. 12. Brief facts of the case are that It is noted by the Assessing Officer on page No.2 that the assessee has purchased land from Smt. Sarla Devi for ₹ 5 lakhs. It is also noted that this was admitted by Smt. Sarla Devi in her statement, The Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f ₹ 5 lakhs as undisclosed income of the assessee is deleted. Now, the revenue is in appeal before us. 13. Ld. D.R. for the revenue supported the assessment order whereas it is submitted by the Ld. A.R. for the assessee that there was no agreement dated 01.01.1998 ever entered into by the assessee with Smt. Sarla Devi as alleged and nothing was found during the course of search and hence the addition was rightly deleted by the Ld. CIT(A). He supported the order of Ld. CIT(A). It was submitted that the documents found from one Mr. M L Saini are available at pages 310-314. 14. We have considered the rival submission and perused the material on record and have gone through the orders of authorities below. We find that the pages 310-311 of the Paper Book is an agreement dated 11th November 1998 between one Mr. Vijay Kumar Arora being the seller and there is no name mentioned in the agreement of the buyer. This agreement is with regard to sale of a land at Faridabad of 500 Sq. yards. The rates fixed as per this agreement is @ ₹ 2,200/- per sq. yard and it is also noted in the agreement that the buyer has paid ₹ 1 lacs in advance and the balance amount of ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d ranges from ₹ 7,000/- to ₹ 10,000/- per sq. yard and the A.O. had stated that the value of this plot purchased by the assessee in January 1997 has to be assessed @ ₹ 7,000/- per sq. yard resulting in the total value of the land at ₹ 21 lacs and the 40% share of the assessee comes to ₹ 8.40 lacs. Thus the addition of this amount in the income of the assessee by the A.O. Being aggrieved, assessee carried the matter in appeal before the Ld. CIT(A) who have decided this issue at Para 4.3 to 4.4 of his order and this addition was deleted by him and now the revenue is in appeal before us. 17. The Ld. D.R. for the revenue supported the assessment order whereas the Ld. A.R. for the assessee supported the order of the Ld. CIT(A). 18. We have considered the rival submissions and perused the material on record and have gone through the orders of authorities below. We find that in Para 4 of the assessment order, the A.O. is referring to the prevailing market rates in Faridabad area in January 1997. In that Para, it is noted by the A.O. that the plot in 3F/14B of 300 sq. yards was sold for ₹ 9.03 lacs @ ₹ 3010/- per sq. yard. He further stated t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 16 lacs per acre. Thereafter, the A.O. has stated that @ ₹ 16 lacs per acre, the value of the land purchased by the assessee to the extent of 15 canals 9 marlas comes to ₹ 30,00,900/-. The A.O. made addition of the same. Being aggrieved, the assessee carried the matter before the Ld. CIT(A) who has deleted this addition as per para 5 of his order and now the revenue is in appeal before us. 21. The Ld. D.R. for the revenue supported the assessment order whereas the Ld. A.R. for the assessee supported the order of Ld. CIT(A). We find that his issue was decided by the Ld. CIT(A) as per Para 5.3 of his order which is reproduced below: 5.3 The issue has been examined. Vide letter dated 18.03.2005 the A.O. has informed that the statement of various persons involved had been sent to the assessee on 14.03.2005. I have carefully gone though the assessment order, the written submissions and the various statements relied upon by the A.O. All the statement of various person making a very revealing reading and facts revealed from all the above statements is that the A.O. has heavily relied on imagination. Page 3 of the statement of Sh. Gauri Shankar recorded on 03.07.19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im at ₹ 2,000/--3,000/-. Thereafter, the A.O. decided this issue on the basis of some further inquires made by DDI from Shri Ramesh Chander and Sohan Lal. In the absence of any seized material indicating any purchase of land by the assessee which is not disclosed before the department, the addition made by the A.O. in block assessment cannot be justified and hence we do not find any reason to interfere in the order of Ld. CIT(A) on this issue also. Hence, the ground No.3 of the revenue s appeal is also rejected. 23. Ground NO.4 of the revenue s appeal reads as under: On the facts and circumstances of the case whether the CIT(A) was right in law in deleting the addition of ₹ 15 lacs undisclosed investment in purchase of land from Smt. Sarla Devi Shri Tek Chand. 24. The brief facts of the case are that it is noted by the A.O. in Para 5.1 of the assessment order that as per the agreement dated 01.01.1998 between Smt. Sarla Devi of Village Pali and the assessee, the assessee has paid ₹ 5 lacs for 4 canals 3 marlas of land at Village Pali on 01.01.1998. This addition was separately made by the A.O., which is the subject matter of ground No.1 of the revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed investment made by Sh. Bahadur Singh Sabharwal was not even confronted. Moreover the reference to the bank accounts of Sh. Tek Chand is totally irrelevant as it no where indicates that the alleged unaccounted funds which had been applied by the appellant in the land had found its place in these accounts. It is also true that no such evidence had been found from the appellant during the search and seizure proceedings carried out in his case. In view of the above facts and circumstances of the case, the stand of ht A.O. cannot be accepted. The treatment of ₹ 15,00,000/- as undisclosed investment is accordingly deleted. 27. From the above Para of the order of Ld. CIT(A), we find that as per the statement of Shri Tek Chand recoded on 28.08.1999, it is stated by him that he has sold land to one Shir Mulak Raj Bhatia and one Shir Madan Lal Saini. It is further noted by the Ld. CIT(A) that in another statement he was categorically asked as to whether he knew Shri Bahadur Singh Sabharwal and he categorically denied the name of Shri Bahadur Singh. The basis of addition is statement of Shri Tek Chand in which he has not stated the name of the assessee. Rather he has stated name ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conclusion that Sh. Bahadur Singh Sabharwal was the benamidar of Sh. Mulak Raj Bhatia. On perusal there is no evidence on record of any sort which can even remotely indicate that Sh. Bahadur Singh Sabharwal had anything to do with Sh. Mulak Raj Bhatia and that the funds invested if at all by Sh. Mulak Raj Bhatia to the tune of ₹ 9,35,000/- was actually the funds of Sh. Bahadur Singh Sabarwal and who had utilized the name of Sh. Mulak Raj Bhatia to make this benami investment. In view of the above facts and circumstances of the case the treatment of a sum of ₹ 9,35,000/- as undisclosed investment of the appellant cannot be sustained and is accordingly deleted. 32. From the above Para of the order of Ld. CIT(A), we find that it is noted by the CIT(A) that these 2 registered deeds were examined by him and as per these deeds, transaction took place between one Shri Tek Chand on one side and Shri M L Saini and M. R. Bhatia on the other side and there is no mention in these deeds of any transaction having been taken place with the assessee, Shri Bahadur Singh Sabharwal. It is further observed by the Ld. CIT(A) that there is no basis for the A.O. to conclude that the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er or indicated by the A.O., which clearly shows that the amounts mentioned in this diary were actually not what has been mentioned and the actual amounts are different than what ahs been mentioned in the diary. The other possibility could be that this document has been confronted to the appellant and the appellant in his statement has indicted or admitted that the entries in these documents are not the actual entries and that two more zeros are to be added to these entries. Unfortunately, both the possibilities do not exist in this case. In fact, whatever records have been made available do not contain any such statement, which shows that this diary has been confronted at all to the appellant or that the appellant in any other oral evidence has indicated to the alleged manipulation. Moreover, there is no other documentary evidence which has been brought to my attention which can corroborate the conclusion drawn by the A.O. Under the circumstances the stand of the A.O. cannot be sustained and the addition is accordingly deleted. 37. In the above Para of the order of Ld. CIT(A), we find that specific finding has been given by the CIT(A) that in the figures noted in the seized do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t allegedly belongs to the maternal grand mother. From this survey report how the A.O. has come to the conclusion that this property belongs to the assessee or how this property which belongs to the assessee has a market value of ₹ 5,00,000/- is difficult rather impossible the comprehend. It may be true that the assessee may be in the Real Estate business but thee is no evidence to suggest that this property situated at 64, Neelam Baa Chowk belongs to him or it is his benami investment in the name of his maternal grand mother or that the market value of this property is ₹ 5,00,000/-. The stand of the A.O. cannot be upheld and the treatment of ₹ 5,00,000/- as undisclosed income is deleted. 42. From the above Para of the order of Ld. CIT(A), we find that a clear finding has been given by the Ld. CIT(A) that there is no evidence to suggest that his property has situated at 64, Neelam Bata Road belongs to the assessee and it is his benami investment in the name of his maternal grandmother. 43. We have also gone through the assessment order and we do not find any basis of this allegation that this property is belonging to the assessee and is a benami investme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... correctly brought on record by the Ld. counsel that these documents have not been recovered form the possession of the assessee. It is also an undisputed fact that the A.O. did not even consider it fit to examine the assessee in the context of these documents so as to come to any conclusion regarding the relationship of the assessee with Sh. M L Saini, if at all, and as noted in the documents. From the records it is also apparent that the A.O. did not even consider fit to examine the assessee regarding the statement of a third party which allegedly brought the assessee into an alleged transactions. These papers recovered form Sh. M L Saini are reflecting real Estate transactions of various lands and at few places refers to the scribbling as BSS or BS or B S Sabarwal. How the A.O. could come to a conclusion that the appellant has derived undisclosed sources from the various transactions based on the documents allegedly found in the case of Sh. M L Saini is difficult to understand. Law does not permit the use of such evidence to fasten undisclosed income in the hands of an assessee without such evidence being corroborated through other evidence which has been found form the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue is in appeal before us. 52. The Ld. D.R. for the revenue supported the assessment order whereas the Ld. A.R. for the assessee supported the order of Ld. CIT(A). 53. We have considered the rival submissions. We find that a clear finding is given by the Ld. CIT(A) that the assessee lives with his four brothers and parents under the same roof. It is further observed by the Ld. CIT(A) that house hold gods to the extent ofRs.30,000/- have been declared by the spouse of the assessee in her return of income which have been filed prior to the date of search. It is held by him that there is nothing to suggest that investment in such small household goods were out of unaccounted funds. Out of the total assets found at ₹ 1.10 lacs, the A.O. himself found explanation to the extent of ₹ 12,000/-. Ld. CIT(A) has found that the house hold goods of ₹ 30,000/- were declared by the spouse of the assessee. For the balance amount of ₹ 68,000/-, it cannot be held that the same was out of undisclosed income of the assessee particularly when the assessee is living with four brothers and parents under the same roof. Considering all these facts, we do not find any reaso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee. It is further stated by the Ld. CIT(A) that the A.O. has again referred to the documents seized from one Shri M L Saini and it is also stated by him that as per the perusal of these documents, it is found that these documents do not refer to the alleged lottery being carried out allegedly by the assessee except at one place where it is written ( B S Sabharwal Lottery March 10th, 97 Apr 97). Regarding this noting also it was argued by the Ld. A.R. before CIT(A) that this noting in a document found at the 3rd person s residence can never be utilized for determining the undisclosed income of the assessee in as much as this document was never confronted and the assessee has neither admitted to any transaction as recorded in this document. It is also observed by the Ld. CIT(A) that as per the assessee, there is no document that have been made available with the A.O. which was found in the course of search which can corroborate the evidence found from the residence of the 3rd person namely Shri M L Saini. It is also observed by the Ld. CIT(A) that as per assessee, even the statement of Shri M L Saini was never confronted to the assessee. The A.O. had relied upon the diary a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ran a lottery scheme and he thereafter gave the various details of the method by which this transaction was carried out. Before any conclusion can be drawn it must be categorically brought out on record that the statement of Sh. Satish Chander and Sh. Gulshan Bagga, relied upon by the A.O., does not make any reference to the appellant- Sh. Bahadur Singh Sabarwal. At best the statement makes a reference to one Sh. Harjeet Singh. It may also be at this point categorically stated that the statement of Sh. Gulshan Baga and Sh. Satish Chander have been used against the appellant without confronting the same to the appellant and without giving an opportunity to the appellant to explain and nor were Sh. Gulshan Bagga and Sh. Satish Chander cross examined by the appellant. It has been argued by the Ld. counsel, and correctly so, that the A.O. could not under law rely on such unsubstantiated uncorroborated statements. The A.O. has again referred to the documents seized form one Sh. M L Saini. Once again a perusal of these documents do not refer to the alleged lottery business carried out allegedly by the appellant except at one place where it is written (B.S. Sabarwal lottery March 10th 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it of Mr. Yashpal these facts have been confirmed. It has also vehemently been argued by the Ld. Counsel that even the two panchas who wee witnessed to the search categorically denied that these documents were found from the residence of Sh. Inderjeet Sing hand his brother, the appellant Sh. Bahadur Singh Sabarwal. 13.5 The issues as disclosed above clearly points out to the fact that the A.O. has erred in holding that the appellant was running the Lucky Car Draw Scheme. None of the statements relied upon indicate the name of the appellant. None of the statements relied upon have been confronted. Nowhere has the appellant indicated that he was running a Lucky Car Draw scheme. The A.O. has not pointed out to any document or evidence seized from the appellant which can corroborate the evidence relied upon regarding the documents found from the premises of one Sh. M L Saini. And coming to the diaries which have been relied upon it cannot at all be understood and comprehended how the A.O. has been able to decipher these diaries to come to a conclusion that undisclosed interest income had been earned from these Lucky Car Draw Scheme. Moreover, any reliance on this evidence appears to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to note here is that a) Sh. Inderjeet Singh, in his statement recorded during the search and seizure proceedings itself denied that the documents pertained to him; b) That the Panchas themselves who were witnesses to the search and seizure proceedings substantiated the statement of Shj. Inderjeet Singh. c) That the A.O. himself recorded the statements of the Panchas in which it could not be brought out by the A.O. that the affidavits sworn by them was factually incorrect. 13.8 Keeping in view the above facts and circumstances of the case the stand of the A.O. cannot be accepted and the treatment of ₹ 43,27,400/- as the undisclosed interest income is deleted. 58. From the above paragraphs of the order of Ld. CIT(A), we find that the finding of Ld. CIT(A) is based on these facts that Shri Inderjeet Singh, brother of the assessee has denied in the course of search proceedings itself that these documents do not pertain to him. It is also noted by the Ld. CIT(A) that the Panchas themselves who were the witnesses, substantiated the statement of Shri Inderjeet Singh and it is stated by them that these docuemtns were not found from the premises of Shri Inderjeet Sin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounts referred to are as petty as ₹ 400/-, ₹ 1,000/-, ₹ 3,000/-. Similarly page 95 document A-10 (Paper Book-252) refers to some transactions amounting to ₹ 24,76,980/- or to Sh. Harish ₹ 1,500/-. It is absolutely incomprehensible how the A.O. has relying on these documents come to a conclusion about the monthly installments, the number of person involved and the number of months to determine an undisclosed commission income at the rate of 3% amounting to ₹ 20,41,050/-. The documents do not in any context referred to the above calculation and conclusion of the A.O. To clarify further, there is no other evidence which has been relied upon nor has any evidence even been confronted for the A.O. to arrive at any conclusion least the conclusion arrived at by the A.O. Under the circumstances the treatment of undisclosed income amounting to ₹ 20,41,050/- stands deleted. 63. In the above Para, the Ld. CIT(A), has given a clear finding that regarding the noting of the calculation on page 222 252 containing page 17 of the document A-10, the notings are regarding petty amounts of ₹ 400/-, Rs..1,000/-, ₹ 3,000/-. It is also noticed ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
