TaxTMI 
TaxTMI 
2015 (3) TMI 1278
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....essees are directed against the separate orders dated 25-03-2011 and 18-11-2011 of the CIT(A) Nashik relating to Assessment Year 2002-03. For the sake of convenience, these appeals were heard together and are being disposed of by this common order. ITA No. 951/PN/2010 (By Assessee-Shri Ratanlal C. Bafna) & ITA No.1050/PN/2010 (By Revenue) (A.Y. 2002-03) : 2. Facts of the case, in brief, are that the assessee is an individual and is engaged in the business of trading in Gold and Silver ornaments and manufacturing of silver ornaments. He filed his original return of income for the impugned assessment year on 28-10-2002 declaring total income of Rs. 37,08,583/- and agricultural income of Rs. 2,53,278/-. 3. This case was reopened by the Assessing Officer u/s.147 by issue of notice u/s.148 of the I.T. Act on 17-03-2009. The assessee in response to the above statutory notice filed a written submission stating to treat the return of income filed by him on 28-10-2002 as return in response to notice u/s.148. The request of the assessee to supply the reasons for issue of notice u/s.148 was accepted by the Assessing Officer by providing reasons for reopening of the case. 4. A s....
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....th regard to the entries found in the rough cash book seized during the course of search action u/s.132. It was replied by Shri Devichand Motilal Chhoriya that all the names mentioned in these books were imaginary names. He further stated that the money received in the various names is income of their group concern on which they would be paying taxes from F.Y. 2002-03 to 2007-08 . 6. During the course of assessment proceedings, the assessee requested for inspection of the seized documents which was allowed by the Assessing Officer. The Assessing Officer specifically asked the assessee as to why on the basis of seized documents addition of Rs. 2.91 crores should not be made to his income on account of unexplained loan given during F.Y. 2001-02. The assessee was also given the working of peak of loan entries, on the basis of which peak amount was worked out at Rs. 2.91 crores. The assessee was also asked to explain as to why the addition of Rs. 82,81,598/- should not be made to his income on account of interest received during the year under consideration as per the seized documents. 7. The assessee in its reply drew the attention of the Assessing Officer to the statement given....
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....th Chhoriya group. Further, Smt. Taradevi R. Bafna, wife of the assessee, is associated with Chhoriya group as a member of an AOP by name "D.D. Jain-AOP, Chandwad" which has developed a layout in land and sold plots. Further Shri R.C. Bafna is also associated with this group as a member of an AOP under the name of "S.D. Jain-AOP, Bhambhori". Further, the assessee is trading in gold and silver articles and there are entries in the seized cash book showing gold and silver articles purchased by Mr. Chhoriya from the assessee. Therefore, the Assessing Officer held that when these entries of purchase of gold and silver from Shri R.C. Bafna are correct, therefore, the loan and interest entries in which also the name of Shri R.C. Bafna is appearing cannot be treated as the entries in imaginary name. 9. So far as the argument of the assessee that Shri Devichand Motilal Chhoriya in his statement recorded has himself admitted that the said transactions are belonging to his all firms and therefore the amount cannot be added in the hands of the assessee is concerned, the Assessing Officer held that the assessment is finalised not only on the basis of statement of Shri Devichand Motilal Chho....
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....somewhere after March 2001 and before May 2001. As regards the argument of the assessee that the figure of Rs. 2,80,00,000/- was also not written in full value and it was written as 280 which was wrongly inferred as Rs. 2,80,00,000/-, the Assessing Officer held that at the time of search action it was admitted by Shri Chhoriya that the amounts are to be read in lakhs that is 280 means Rs. 280 lakhs, i.e. Rs. 2,80,00,000/-. The various other entries found in the seized chart also corroborate the same thing. He accordingly rejected the contention of the assessee and held that the assessee had given advances to Chhoriya group which the assessee failed to disclose in his return of income. Since the assessee had given loans, interest on the same will also has to be taxed in assessee's hands. From the various entries found in the seized documents, the Assessing Officer noted that there is a specific trend of giving certain amount every month right from April 2001 to March 2002 by Chhoriya group to Shri R.C. Bafna. This amount is Rs. 7 to Rs. 7.5 lakhs per month. He noted that though for certain amounts the narration is clearly mentioned as interest against the entire amount of Rs. 7 to R....
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....luded. Therefore, the Assessing Officer made addition of proportionate labour charges to the net increase in the silver of 385.13 kgs. After giving credit to the stock of bullion and old ornaments sold by customers. Since the labour charges are 82 to 225/10 gms the Assessing Officer took the average rate of 2000/kgs and made addition of Rs. 77,026/- to the total income of the assessee on account of valuation of closing stock. The Assessing Officer also made addition of Rs. 10,000/- on estimate basis out of the office expenses and postages in absence of supporting vouchers. 14. Before CIT(A) the assessee challenged the validity of the reopening of the assessment on the ground that the case of assessee is entirely based upon the imaginary alleged papers found in the search and seizure action at the premises of Chhoriya for which separate procedure is laid down for such assessment under the provisions of section 153C which overrides the provisions of section 147 r.w.s. 148. It was submitted that when there is no consistency in the approach of the Department in as much as the amount is sought to be taxed in the hands of the assessee for A.Y. 2002-03 simply because it is not covered ....
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....s rightly invoked the provisions of section 147 of the I.T. Act, 1961. 16. As regards the argument of the assessee that procedure under the provisions of section 153C of the I.T. Act should have been followed by the Assessing Officer, the Ld.CIT(A) held that the incriminating material found during the search and seizure action in the case of Chhoriya group was forwarded to the Assessing Officer having jurisdiction over the case of the assessee and the AO had decided to invoke the provisions of section 147 of the I.T. Act as there was escapement of income chargeable to tax for the A.Y. 2002-03. He held that there is no bar under the I.T. Act to take action u/s.147 of the I.T. Act in such circumstances. He further noted that the socalled objection filed by the assessee for the reassessment proceedings clearly indicates that they are not containing any specific objections as provided by the decision of Hon'ble Supreme Court in the case of G.K.N. Drive Shafts (I) Ltd., reported in 259 ITR 19. So far as the argument of the assessee that the Assessing Officer should not have resorted to the reassessment proceedings particularly when Shri Chhoriya accepted the transactions as his own a....
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....same belonged to him and agreed for the additions. v) Mere entries in the account of third party regarding the payments were not sufficient to make additions. vi) The documents seized during the course of the search do not contain any signature of the appellant or the borrower. vii) There was no corroborative evidence to conclude that the entries recorded in the seized documents were representing the real transactions relating to the appellant. 6.3 It is true that Shri Chhoriya himself admitted the transactions contained in the seized documents were related to him and maintained similar stand during the assessment proceeding when he was questioned u/s.131 of the Act. A perusal of the seized documents and the transactions contained therein would reveal that Shri Chhoriya clearly wrote the financial transactions with various pers.ons, including those of the appellant. The other argument of the appellant that the seized documents do not contain any of his signature or the borrower is also not acceptable as the unaccounted transactions are always carried-out based on mutual trust and faith. The seized documents contained the names of the appellant as....
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....tions would be rarely available. The A.O. has considered all the circumstances and other factors in the instant case and has drawn an inference regarding the unaccounted income of the appellant. Therefore, I have no hesitation in holding that the transactions contained in the seized documents are related to the appellant as far as mentioned against "various names" of the appellant. 6.4 The appellant made an alternative argument that the method of computing the peak credit as per Annexure B of the assessment order was incorrect. He also disputed inclusion of the amount of Rs. 2,80,00,000/- as advance made during April, 2001 while computing the peak credit. The appellant also questioned the treatment of various amounts as taxable receipts like interest, profit, etc. as per Annexure A of the assessment order. It may be mentioned here that Shri Chhoriya was maintaining a daily cash book and month-wise summary balances. The daily cash book contained date-wise details of each and every receipt & payment. On the other hand, the monthly summary balances represented the overall position at the end of the each month regarding the outstanding receipts and payments. While completing t....
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....tained by Shri Chhoriya. It is only finding place in the monthly summary sheet as on 01/05/2001. The monthly summary sheet is .a sort of trial balance representing the outstanding transactions. The amount of Rs. 2,80,00,000/- could have been advanced by the appellant in the earlier period and was outstanding as on 01/04/2001. The monthly summary balance for the month of March, 2001 not available on record. It is only monthly summary balance for the month of April, 2001 prepared on 01/05/2001. Thus there is a missing link between March, 2001 and April, 2001. In the absence of specific entry in the cash book during April, 2001, it is very difficult to presume that the amount was advanced by the appellant during the month of April, 2001. It is also seen from the seized documents that there are entries on the monthly summary sheets of August, 2001, September, 2001 and other months about outstanding amounts in the name of the appellant. Such amounts have not at all been considered either for income or as unaccounted advance. It is also seen from the seized cash book that an amount of Rs. 2,00,000/- as interest and Rs. 5,00,000/- as profit has been credited on 04/04/2001 indicating that ....
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....ing Officer which was based on the remarks of the Auditors in Form 3CB according to which personal expenditure included in the office expenditure cannot be denied. Further, no supporting vouchers were also made available before the Assessing Officer during the course of assessment proceedings in respect of the office expenses. He accordingly confirmed the disallowance of Rs. 10,000/- on estimate basis out of office expenses. 21. Aggrieved with such part relief given by the CIT(A) the assessee as well as the revenue are in appeal before us with the following grounds: Grounds by Assessee : "1] In the absence of conditions precedent for issuance of notice u/s.148 of the I.T Act, 1961, the impugned assessment order is bad in law, null, and void ab initio and without jurisdiction and hence the same may please be vacated / annulled. 2] In the facts and in the circumstances of the case and in law, both the lower authorities have erred in rejecting the sworn statement of Mr. Devichand Motilal Chhoriya recorded by the learned Assessing Officer u/s.131 of the I.T. Act 1961 on 16-12-2009, as untrue, false and misleading. It may please be held that the said statement is tr....
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....arned CIT(A) being devoid of merits the same may please be deleted. 8] The adhoc disallowance of Rs. 10,000/- made by the learned Assessing Officer and as sustained by the learned CIT(A) out of expenses may please be deleted. 9] The Appellant craves the permission to add, amend, modify, alter, revise, substitute, delete any or all grounds of the appeal, if deemed necessary at the time of hearing of the appeal." Grounds by Revenue in ITA No.1050/PN/2010 : "1. On the facts and in the circumstances of the case, the CIT(A) erred in working out the revised peak after excluding the entry of loan of Rs. 2,80,00,000. The CIT(A) has failed to appreciate the facts that, the entry of loan of Rs. 2,80,00,000/- was appearing at the end of the cash book in the monthly summary sheet of May 2001 drawn on 01-05-2001 and the amount of Rs. 2,80,00,000/- was not carried forward as on 01-4- 2001. 2. On the facts and in the circumstances of the case, the CIT(A) erred in excluding so called entry of Gift of Rs. 2,26,751/- while working out peak. The CIT(A) has failed to appreciate that the amount of Rs. 2,26,751/- is a gift and not sale transaction. 3....
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....erred to make an order judiciously has to act independently. He cannot act on the advice given by an outsider even though that stranger may be an authority higher in rank to him in the official hierarchy. The communication between the officer empowered to impose penalty and the higher authorities in regard to assessment or penalty proceedings could not be held to be communications made in official confidence because in law those officers were not entitled to give opinions or advice in regard to judicial proceedings. He accordingly submitted that the order passed by the Assessing Officer u/s.147 of the I.T. Act at the behest of the Investigation Wing should be held as void and therefore the reassessment order passed by the Assessing Officer should be annulled. He also relied on the following decisions : 1. CIT Vs. Salekchand Agarwal reported in 300 ITR 426 (All). 2. State of Kerala Vs. K.T. Shaduli Yusuff Etc. reported in 1977 AIR 1627 (SC). 3. Rajinder Pershad Vs. Smt. Darshana Devi reported in 2001-(088)- AIR -3207-SC. 4. Kishore Samrite Vs. State of U.P. & Others - Criminal Appeal No.1406/2012 order dated 18-10-2012 (SC). 5. Addl.CIT V....
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....r which the order is liable to be quashed. 27. We have considered the rival arguments made by both the sides for the admissibility of the additional ground. Since admittedly all the material facts are on record, therefore, the additional ground raised by the assessee is admitted in view of the decision of the Hon'ble Supreme Court in the case of NTPC (Supra). However, so far as the merit of the additional ground is concerned, we proceed to adjudicate the same. As per the provisions of the I.T. Act, the Investigation Wing of the Department conducts search and seizure operations to unearth black money/unaccounted income. They examine the seized materials in details and also record statements of different persons by issue of summons. After thorough enquiry they prepare the appraisal report which is sent to the field units for making assessment of the searched person. Sometimes incriminating documents relating to non searched persons are also found in the premises of the searched person. The Assessing Officer of the searched person forwards those documents to the Assessing Officer having jurisdiction of the non searched person after recording satisfaction for escapement of income of....
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..... As primafacie it appeared that the materials sought to be summoned were relevant for the purpose of proving that there was a settlement, the Tribunal directed the departmental representative to produce the records mentioned in the application. The Union of India, the CIT and the ITO filed a Writ Petition challenging the order of the Tribunal. Under these circumstances, the Hon'ble High Court agreed with the view of the Tribunal that the assessment proceedings and penalty proceedings are judicial in nature and that an officer or authority upon whom jurisdiction has been conferred to make an order judicially has to act independently. He cannot act on the advice given by an outsider even though that stranger may be an authority higher in rank to him in the official hierarchy. 30. However, in the instant case, if we accept the contention of the Ld. Counsel for the assessee that the Assessing Officer has acted at the behest of the Investigation Wing, then in that case he would have made addition of Rs. 9,83,50,000/- which is as per the reasons for issue of notice u/s.148 for the A.Y. 2002-03, a copy of which is placed at page 28 of the paper book. Further, from the letter dated 10-....
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....f has summoned the author of the diary Mr. Devichand Motilal Chhoriya whose statement was recorded on 01-12- 2009, a copy of which is placed at paper book pages 36 and 37. Referring to the copy of the transactions of the same, a copy of which is placed at paper book pages 38 and 39, Ld. Counsel for the assessee drew the attention of the Bench to statement given by Shri Devichand Motilal Chhoriya in response to Question No.4 wherein Shri Chhoriya in his reply had categorically stated that he has never taken any loan from Shri R.C. Bafna. In his reply to Question No.5 he had categorically stated that the entire money belongs to different firms and the names are imaginary. Therefore, when the author of the seized documents/diary himself has explained the nature of the entries and has owned up the undisclosed income as his income the Department should have accepted that explanation and no addition should have been made in the hands of the assessee. 34. Referring to the decision of Hon'ble Allahabad High Court in the case of CIT Vs. Salek Chand Agarwal reported in 300 ITR 426 the Ld. Counsel for the assessee submitted that in that case a search was conducted on the business premises ....
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.... for the assessee drew the attention of the Bench to Paper book No.2 which contained cash book of the Chhoriya group for the period from 01-01-2001 to 31-03- 2001. Referring to page 70 of the paper book, the Ld. Counsel for the assessee drew the attention of the Bench to the entry of Rs. 200 which as per the department is Rs. 200 lakhs, i.e. Rs. 2 crores. Referring to the above, he submitted that this is the loan for the period 01-01-2001 to 31- 03-2004 to be repaid over a period of 40 months @ Rs. 5 lakhs per month. The interest rate is also mentioned at 2% per month. There is also another entry of 100 lakhs taking the total loan to Rs. 3 crores, i.e., Rs. 200 lakhs +100 lakhs, i.e. Rs. 3 crores. Referring to the above entries in page 70 of the cash book for the period from 01-01-2001 to 31-03- 2001, the Ld. Counsel for the assessee submitted that this document was in possession of department, however, the department was not coming with clean hands inspite of the fact that they have the diary for the period from 01-01-2001 to 31-03-2001. The department did not produce the records despite directions by the Tribunal. The assessee obtained the same by applying under the RTI Act. 3....
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....k seized under section 132 of the I.T. Act. These are found in your residential premises means your business premises - G-128, MIDC, Near Mukesh Ind. Jalgaon. Ans: You asked me about the above diaries. I agree that these diaries were found in my residential premises. All diaries are handwritten by me. These diaries are related to business of my family members. Persons who have deposited amounts have been mentioned in these diaries. How this deposited money has been spent has also been written in the diaries. Presently I cannot give details. However, I will furnish all information well-in-time." 39.1 Referring to above, he submitted that the author of the diary never confessed that the names are fictitious or imaginary. Therefore, the Assessing Officer was justified in making the addition on account of unexplained advances and addition on account of interest on such advances. 40. We have considered the rival arguments made by both the sides, perused the orders of the Assessing Officer and the CIT(A) and the Paper Book filed on behalf of the assessee. We have also considered the various decisions cited before us. In the instant case, a search and seizure action u/s.132....
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....de addition of Rs. 2,91,36,825/-. Similarly, he also made addition of Rs. 82,81,598/- which is the interest received by the assessee from time to time. We find in appeal the Ld.CIT(A) deleted an amount of Rs. 2,80,00,000/- on the ground that the said amount of Rs. 2,80,00,000/- is not entered in the daywise cash book maintained by Shri Chhoriya. It is only finding place in the monthly summary sheet as on 01-05-2001. According to him, the amount of Rs. 2,80,00,000/- could have been advanced by the assessee in the earlier period and was outstanding as on 01-04-2001. He observed that the monthly summary balance in the month of March 2001 is not available on record. It is only monthly summary balance for the month of April 2001 prepared on 01-05-2001. Thus, there is a missing link between March 2001 and April 2001. Therefore, he held that in the absence of any specific entry in the cash book during April 2001, it is very difficult to presume that the amount was advanced by the assessee during the month of April 2001. He accordingly deleted the amount of Rs. 2,80,00,000/-. 40.2 The Ld.CIT(A) further observed that there are certain transactions included in the peak credit/statement ac....
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....he entries appearing in the seized document, there appears an entry in the name of "Shrimanseth Saheb" 200 which in the own version of the department should be read as 200 lakhs, i.e. Rs. 2 crores. As per the entries appearing in the said page, the said amount has to be repaid in 40 instalments of Rs. 5 lakhs. There is also another entry of 100 lakhs to be repaid as under : 30 lakhs - 31-12-2001 30 lakhs - 31-12-2002 30 lakhs - 31-12-2003 10 lakhs - 30-08-2004 Out of the above entry of 200 +100 the amount of 20 has been paid and the outstanding amount is 280 which tallies with the amount 280 shown in the name of Shrimanseth Saheb at page 139 of the paper book. 40.5 As regards the arguments of Ld. Counsel for the assessee that no addition is called for since the author of the document has denied to have received any advance from persons as noted in the seized document that Shri Kanhailal Chhoriya himself has admitted the transactions as related to family members of their group for which they offered to pay the taxes on the same and that Shri Devichand Motilal Chhoriya has stated the names as imaginary are concerned, we do not find any substance i....
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....ugned assessment year Shri Chhoriyas have not offered any amount to tax on account of such entries. The Ld. Counsel for the assessee could not bring any material before us to show that the income has been offered to tax by Shri Chhoriya. The entries which are meticulously and systematically maintained clearly show that the transactions have taken place, money has been advanced by Sri Ratanlal C. Bafna to Shri Chhroriya as per the entries in seized documents, which are diaries hand written by the searched person, having entries not only in the name of the assessee, but various other persons also and interest has been received by Sri Ratanlal C. Bafna from the Chhoriyas. Therefore, in absence of any material to prove that the amount has been owned up and offered to tax by the Chhoriyas, the same has to be taxed in the hands of Shri Ratanlal C. Bafna. Therefore, in principle, we uphold the order of the Assessing Officer as well as the CIT(A) for taxation of the unexplained investment and interest thereon in the hands of Shri Ratanlal C. Bafna. 40.7 Now coming to the quantum of addition, we find there are serious calculation mistakes and error of judgment. The assessee has filed the....
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....ellate order according to which the highest peak comes to Rs. 9,30,000/-. Neither the Ld. Departmental Representative nor the Ld. Authorised Representative could point out any mistake in the computation of such peak. Under these circumstances, we do not find any infirmity in the order of the CIT(A) sustaining addition of Rs. 9,30,000/- as against Rs. 2,91,36,825/- made by the Assessing Officer. Accordingly, the same is upheld. 40.10 Similarly, the Ld.CIT(A) while computing the interest that has to be added to the total income has also thoroughly analysed the entries item-wise. After thoroughly analysing he considered certain transactions which according to him do not appear to be taxable receipts. Such transactions are without any reference to interest or profit on sale and are just financial transactions involving receipts by the assessee and cannot be considered as income for the impugned assessment year. He therefore added these loans for the purpose of working out the peak credit but did not consider the same as income. Similarly, certain transactions represented sale of jewellery which according to him cannot be said as income as such. According to him, only the profit elem....
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....his context, I have to submit that I am not at all connected with any of such transaction noted in the similar name of mine, on the said alleged papers. Merely because of there is similar name to my name, these transactions cannot be considered or related to me. I categorically deny of all the said transaction shown to me. In absence of any further corroborative evidence, the transacted amount cannot be taxed in my hand. Further, it is significant to note here that your kind honour has thoroughly verified our audited books of accounts and satisfied yourself that in no way we are having any transaction with Mr. Chhoriya group of case. Neither I have provided him any fund nor received any interest and also not sold out any gold as alleged during the assessment proceedings. It is to be noted that your kind honour has recorded the statement of Mr. Chhoriya on 1-12-2009 in earlier assessment proceedings, wherein he has categorically denied to have any transaction with me. Mr. Chhoriya has also affirm that these all names were imaginary one and offered the same as income of his group. It may not be out of place to mention here that assessment proceedings must have been ....
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....t imaginary one. Further, during the course of search and seizure action u/s.132 of the I.T. Act, statements of Shri Kanhaiyalal Chhoriya and Shri Devichand M. Chhoriya were recorded and they had admitted the fact of transactions in respect of the business affairs of the family members in this cash book. He therefore was of the opinion that the statement of Shri Devichand M. Chhoriya on 1-12-2009 is false and misleading and cannot be relied upon. He further held that admission of financial transaction by Shri Chhoriya in his group will not absolve the assessee from explaining the true transactions relating to seized documents. According to the AO, Mr.Chhoriyas would not have written the name of the assessee without really having the transactions with assessee and summary sheets maintained by him. Therefore, such transactions particularly made and interest received on the same have to be brought to tax. As regards the contention of the assessee that cross examination of Shri Devichand M. Chhoriya should be allowed, the AO held that Shri Devichand M. Chhoriya has given the statement on 01-12-2009 u/s.131 of the I.T. Act and the statement is not against the assessee. Therefore, the....
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....he names of the persons including the assessee are clearly written and the figures mentioned briefly against their respective names sometimes speak that units such a Lakh/Crore etc. including specifically total amounts. Further, the nature of seized annexures is very much similar to cash book where the transactions are recorded on daily basis of each month. The opening and closing balance in which it is worked out and the monthly summary balances of various lenders shown at the end of the month. The documents unmistakably showed that accounts of business regarding receipt and payments of money during 01-04-2007 to 31-03-2008 were regularly maintained. He observed that Chhoriyas have already admitted in their statements during the search that the said books were in the hand writing of Shri Devichand M. Chhoriya. The dates for each receipts and payments are mentioned. The full names of the persons from whom the receipts were taken and to whom payments were made are available in the seized annexures. Therefore, he had no hesitation in holding that the seized documents were books of accounts kept in the regular course of business and therefore admissible for the purpose of income-ta....
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.... Devichand M. Chhoriya recorded on 01-12-2009 u/s.131 of the I.T. Act was not against the assessee. He accordingly rejected the argument of examination/cross examination of Chhoriya. As regards the argument of the assessee that the AO has not corroborated the genuineness of the transaction shown against his name by bringing on record any independent evidence is concerned, the Ld.CIT(A) rejected the same on the ground that the above contention is devoid of any reasoning. He observed that Shri R.C. Bafna is a business associate of Chhoriyas as the business relationship of the assessee and his wife with the Chhoriyas has already been established. Further, Shri R.C. Bafna has purchased plots at Shirdi from the Chhoriyas. Transactions relating to purchase of plots has been accepted by the assessee also. According to the Ld.CIT(A) the circumstantial evidence gathered during the course of search clearly demonstrates that the assessee had made undisclosed investments with the Chhoriyas which was not reflected by him in his books of account. He accordingly held that the AO was justified in relying on the seized material while computing the income of the assessee for the impugned assessment ....
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....actions of alleged undisclosed investment in the name of the appellant as allegedly recorded in the diaries seized from Chhoriya group in search and seizure action on 22-08-2008 were considered while computing the income of Chhoriya group, the same alleged undisclosed transactions cannot be taxed in the hands of the appellant again. In the circumstances the additions made in the impugned appellate order by the learned CIT[A] may please be deleted. 4. The learned CIT[A] has failed to appreciate that the findings of the learned Assessing Officer in respect of the alleged entries in the alleged seized papers in the Chhoriya Group of cases were binding upon the department particularly when the said assessments had attained finality and in the circumstances the learned CIT[A] ought to have vacated the impugned order passed by the learned Assessing Officer. 5. Mr. Devichand Chhoriya the author of the seized papers, having denied to have accepted any loans / advances from the appellant and having in an unequivocal manner admitted that the name of the appellant was written in the seized documents in a fictitious manner and further having admitted that the unaccounted mone....
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....st received on alleged unexplained investment made by the appellant with Chhoriya Group and has further erred in making an enhancement of Rs. 52,99,832.00 to the addition made by the learned Assessing Officer on this ground. Thus the total addition of Rs. 52,99,832.00 being patently illegal, arbitrary, perverse and based on no evidence and being legally unsustainable and devoid of merits the same may please be deleted. 11. In the facts and circumstances of the case and in law, the learned CIT[A] has grossly erred in confirming the addition of Rs. 74,404.00 made by the learned Assessing Officer on the ground of alleged profits earned by the appellant on alleged unrecorded sales. The addition being patently illegal, bad in law, arbitrary, perverse and being legally unsustainable and devoid of merits the same may please be deleted. 12. Since the appellant was denied the opportunity to cross examine Mr. Devichand Chhoriya the author of the seized documents, the impugned order is bad in law and hence the same may please be annulled. 13. The appellant craves the permission to add, amend, modify, alter, revise, substitute, delete any or all grounds of appeal, if....
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....s misplaced. So far as the various decisions relied on by the Ld. Counsel for the assessee are concerned, he submitted that the same are distinguishable and not applicable to the facts of the present case. 56. We have considered the rival arguments made by both the sides, perused the orders of the Assessing Officer and the CIT(A) and the Paper Book filed on behalf of the assessee. We have also considered the various decisions cited before us. There is no dispute to the fact that in the instant case the search took place in the residential and business premises of the Chhoriya group on 22-08-2008 during which certain books of account marked as Annexure B item Nos. 1 to 4 were seized. These are rough cash books of the Chhoriya group which contain various entries according to which the various lenders had advanced various amounts during the impugned assessment year. The entries in the rough cash books on one hand reflected the receipt of money and simultaneously entries against which the said money was utilised was also mentioned. Meticulous details have been written in the seized diary. Entries relating to the assessee are also found in the seized diaries, which reflect that th....
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....decisions in our opinion are distinguishable on facts and not applicable to the facts of the present case. In the case of Mirza Rafiullah Baig (Supra) a document belonging to the assessee was found in the course of search on the premises of Janpriya Engineering Syndicate which was handed over to the AO who had jurisdiction over the case. Since in that case proceedings u/s.147 was initiated the assessee challenged the validity of the same on the ground that proceedings ought to have been initiated u/s.153C of the I.T. Act as the basis for initiation of proceedings u/s.147 relates to discovery of a document belonging to the assessee. Accordingly, the Tribunal upheld the order of Ld.CIT(A) holding such assessment u/s.147 instead of 153C as void ab-initio. However, in the instant case, no such document belonging to the assessee was found, therefore, this decision in our opinion is not applicable. 56.5 So far as the case of M/s. Kumar Company Vs. Addl.CIT and vice versa vide ITA No. 463/PN/2008 and as relied on by Ld. Counsel for the assessee is concerned, we find in that case the assessee was a land developer and builder. He had transactions with one Raut group of cases who were sub....
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....ment is concerned, we find the facts of the impugned assessment year are identical to the facts in ITA No.951/PN/2010 filed by the assessee for A.Y. 2002-03. We have already discussed the issue and the addition sustained by the CIT(A) has been upheld. Following the same reasoning and considering the fact that the Ld.CIT(A) while deciding the issue has exhaustively given the reasons and after thoroughly analysing has sustained the addition of only Rs. 64,47,000/- out of Rs. 87,25,360/- as made by the Assessing Officer, therefore, we find no infirmity in his order. Accordingly, the same is upheld and the grounds raised by the assessee on this issue of addition on account of unexplained investment are dismissed. 58. The third issue raised by the assessee in the grounds relates to the order of the CIT(A) in confirming the addition of Rs. 20,31,360/- on account of alleged interest received on the unexplained investment and further enhancing the same by Rs. 52,99,835/-. 59. After hearing both the sides, we find the Ld.CIT(A) after thoroughly examining the nature of advances given by the assessee on which he receives of interest @1.5% per month has calculated the details of such rec....
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....d calculation. Under these circumstances, the third issue raised by the assessee in the ground is dismissed. The appeal filed by the assessee for this year is accordingly dismissed. ITA No.718/PN/2011 (By Assessee - Shri Shankarlal Amolakchand Chordia) (A.Y. 2002-03) : 60. Grounds raised by the assessee are as under : "1. In the absence of conditions precedent for issuance of notice u/s.148 of the I.T. Act, 1961, the impugned reassessment proceedings are bad in law, null and void ab initio and without jurisdiction and hence the impugned reassessment order be vacated/quashed/annulled. 2. In the facts and circumstances of the case and in law, the Ld.CIT(A) has erred in sustaining the addition of Rs. 5,45,000/- made by the Ld. Assessing Officer solely on the basis of entries in the rough book of third party, without any corroborative evidence and especially when the third party itself had explained that the entries were false and the same represented undisclosed income of the third party entered in bogus names including the names of the appellant. The impugned addition of Rs. 5,45,000/- being arbitrary, perverse and legally unsustainable the same may please be ....