TMI Blog2005 (8) TMI 534X X X X Extracts X X X X X X X X Extracts X X X X ..... was submitted to Municipal Committee, Gurgaon, Haryana and subsequently vide their certificate bearing No. 2363 dated 11-5-2000 the requisite Completion Certificate was issued to them. Simultaneously other certificates from Fire Department, Air Port Authority of India etc. were also obtained. Total covered area together with all buildings and structures constructed thereon was at 1,63,838 sq. ft. and open area was at 1,95,000 sq. ft. 3. On 22-8-2001 a search operation under section 132(1) was conducted on DN Taneja Group of cases wherein certain books of account and other documents were found and seized. During the course of search certain papers i.e. page Nos. 23 and 24 of Annexure A-1 were also seized from premises at 7, KG Marg, New Delhi reflecting the name of the assessee-company and certain cash and cheque payments received by the assessee from Dinesh Jain Group. The Assessing Officer accordingly issued notice under section 158BD read with section 158BC on 27-6-2002. The assessee filed the return on 9-9-2002 declaring NIL income. Thereafter, notice under section 142(1) along with questionnaire dated 3-12-2002 were issued which read as under : "Q.1 This is a mixed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain who may have incurred a loss of Rs. 62.50 lakhs on sale of the same farmhouse. There was a third partner Vipin Sharma as well. So each of the three would have had to share one-third loss amounting to Rs. 20,83,500. This adjustment has been made in the accounts of Elite and Dynamic at pages 23 and 24 respectively. Further Tanejas and Dewan have further equally shares the loss of Shri Vipin Sharma equally and this has amounted to Rs. 10,41,500. This adjustment has also been made in the accounts of Elite and Dynamic. It is obvious from the credit of Rs. 31,25,000 given both in the accounts of Elite Promoters Pvt. Ltd. at page 23 and Dynamic Universal Ltd. at page 24 that this loss must have been incurred by Shri Dinesh Jain and his group and since Taneja and Dewans may have been involved as guarantees in the farmhouse deal along with Vipin Sharma, both of them must have agreed to share the loss equally between them including the share of loss to Shri Vipin Sharma. Accordingly, both of them have given an equivalent credit to Dinesh Jain group against the consideration they were likely to receive towards the sale of property at Palm Courts. That is why this adjustment has been mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion that this document pertains to the assessee-company. It was categorically stated that this document did not pertain to us. On this very issue Directors of the assessee-company were called by the Deputy Director (Inv.) a number of times and their statement recorded clarifying that this document does not pertain to the company. It is further clarified that since the document does not pertain to the assessee-company the subsequent question stated in your questionnaire cannot be answered. The answer to this question, if any, can be given by only those persons who have written this paper. The assessee-company categorically denied to have entered into any transaction with any person in cash. Wherever the assessee-company has made any transaction in respect of its property the same has been properly recorded in the books of account and can be verified as the same are being produced before your goodself as stated above. It was further submitted that, as this document did not pertain to the assessee-company, the figure stated therein for which the question has been asked cannot be answered by the assessee-company. On page 3, para 2 of the questionnaire, your honour has raised a presump ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n issue regarding validity of initiation of proceedings under section 158BD. The CIT(A) dealt with this issue in paras 4.6 to 4.18 of his order. Paras 4.6 to 4.9 are reproduced herein below for ready reference: "4.6 I have gone through the verbal and written arguments advanced by the appellant and also perused the relevant case laws relied upon. The objection raised by the appellant regarding initiation of proceedings under section 158BD and non-recording of "satisfaction" by the Assessing Officer were also considered. Though, in my opinion, the Assessing Officer has complied with the provisions of section 158BD, however, before arriving at any conclusion, it would be appropriate to spell out the law on the subject i.e. the order passed by the Assessing Officer with reference to the language as used in the statute. Accordingly, the perusal of section 158BD was made, which deals with the "undisclosed income of any other person" and reads as under : Where the Assessing Officer is satisfied that any undisclosed income belongs to any person, other than the person with respect to whom search was made under section 132 or whose books of account or other documents or any assets we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter of afterthought. Further, the assessee has objected that the proceedings have been initiated without recording satisfaction of the Assessing Officer. This contention of the assessee is also not correct, as the satisfaction note has been recorded vide order sheet entry dated 26-7-2002 before issue the notice on 26-7-2002 under section 158BD of the IT Act. Point No. 4 : The assessee has objected that no notice under section 143(2) has been issued to the assessee-company by the Assessing Officer after filing of the return. This contention of the assessee is not correct. The notice under sections 143(2) and 142(1) were initially issued to the assessee-company along with questionnaire dated 3-12-2002, which remained un-complied with. As such a show-cause notice dated 27-1-2003 was issued on 27-1-2003 for non-compliance of the said notices and asking the assessee as to why penalty under section 271(1)( b ) should not be imposed and further a fresh notice under section 143(2) was issued on 27-1-2003. The assessee has himself replied to the said show-cause notice vide his letter dated 3-2-2003. From the above facts, it is crystal clear that the contention of the assessee is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovided to this effect. Besides this, in the case of Rushil Industries Ltd. v. Harsh Prakash [2001] 251 ITR 608 (Guj.), Priya Blue Inds. Pvt. Ltd. v. JCIT [2001] 251 ITR 615 (Guj.) and Premjibhai Sons v. JCIT [2001] 251 ITR 625 (Guj.) it was held that in absence of an averment on behalf of the Assessing Officer, about the satisfaction arrived at by the Assessing Officer, the same will not vitiate the notice issued by the Assessing Officer under section 158BD. 4.11 Besides above, I find that the Assessing Officer vide order sheet entry dated 27-6-2002 i.e. while issuing notice under section 158BD read with section 158BC has duly recorded his reasons for initiating assessment proceedings under section 158BD as under : During search seizure operation under section 132 of the Income-tax Act, 1961 conducted at Mr. D.N. Taneja Group of Companies, it was found that M/s. Dynamic Universal Ltd. is also a company promoted by Taneja family. The assessee-company had developed a property in Gurgaon along with M/s. Elite Promoters Pvt. Ltd. After developing the property, the same was sold to a Kanpur Party. Seized material "suggests" that there was part receipt in cash, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extracted the reasons recorded of Elite Promoters (P.) Ltd. by mistake and reasons recorded in assessee s case are as under : "During the search seizure under section 132 of Income-tax Act, 1961 conducted at D.N. Taneja group, it was found that M/s. Dynamic Universal (P.) Ltd. has developed a property in Gurgaon in collaboration with M/s. Elite Promoters (P.) Ltd. After developing the property, the same was sold to a Kanpur party. Seized material suggests that the sale proceeds were received partly through cheques and partly in cash. This is the general practice that in property deal the cash transaction is not recorded in the books of account. In order to examine this issue, the case is picked up under section 158BD of the Income-tax Act, 1961." 10. As regards the issue of notice under section 143(2) the CIT(A) observed in para 4.15 that since the block assessment is not made under section 143(3), therefore, the issue of notice under section 143(2) by the Assessing Officer is not mandatory. While the Assessing Officer proceeds to determine the undisclosed income as per the provisions of section 158BC( b ), the Assessing Officer may issue notices under sections 142(1) an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Jain group were highly understated. Thus, confirming the fact that besides cheque payments of Rs. 2,40,00,300, Dinesh Jain Group has also given cash payments over and above these cheque payments and that the seized document i.e. page No. 24 of Annexure A-1, containing the details of these cash payments is not a dumb document. Rather, it very much belongs to the appellant-company but the appellant in its books of account has not recorded the cash payments reflected therein." 13. The CIT(A) also observed that wrong statements were given by Sh. D.N. Taneja during the course of search operation on 22-8-2001, by Sh. S.K. Dewan, Director of appellant-company and by Sh. Ravinder Taneja, Director of Elite Promoters (P.) Ltd. on 14-7-2003 before the Assessing Officer. The CIT(A) further observed that Shri D.N. Taneja was the main controlling person of Taneja group including the Palm Court Project, because in all the statements recorded by DDIT (Inv.) on 17-9-2001, 24-9-2001 and by DCIT on 27-5-2003, Shri S.K. Dewan, Director of the assessee-company has admitted that all the deals regarding sale of flats of Palm Court Project were undertaken/settled only by Shri D.N. Taneja. Though ini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l the transactions entered into by the assessee-company and being audited from assessment year 1996-97 onwards; that the assessee-company submitted its reply vide letter dated 28-8-2001 giving basic information sought by the ADI, Delhi. Statements of the Directors of the company, namely, Mr. S.K. Dewan and Mrs. Achala Dewan were recorded on 17-9-2001 and 24-9-2001, in which various questions asked regarding Mr. D.N. Taneja and the working of the company were replied and there was nothing adverse coming out of the statements; that after the receipt of notice under section 158BD the assessee-company has been asking for the details of the documents and the statements relating to the block period on the basis of which notice under section 158BD has been issued but the Assessing Officer provided a photocopy of the document, which is unsigned computer print found at the time of search on 22-8-2001, on the basis of which the notice was issued. The learned counsel contended that this is a plain paper on which certain computer print are there but it is without any signature or handwriting of the person who has prepared this paper; that the assessee-company filed a detailed reply dated 3-2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of the circumstances in which this document was found. He submitted that the assessee had time and again requested for a copy of the statement of Shri D.N. Taneja. However, the same has not been provided to the assessee. It is contended that before making an allegation against a person he should be provided relevant information so that he be aware of the precise charge and reply to the same. He further contended that in this case the onus was on Mr. D.N. Taneja to explain the document and this could have been shifted to the assessee only on Mr. Taneja making a statement that this document pertained to the assessee-company or coming out with any other explanation imputing the assessee-company. In the absence of any such statement or allegation by Mr. Taneja the presumption has to be drawn against Mr. Taneja and not against the assessee. He referred to two decisions of the Delhi High Court - Amity Hotel (P.) Ltd. v. CIT [2005] 142 Taxman 160 and Janki Exports International v. UOI [2005] 145 Taxman 82. 18. On merit, the learned counsel for the assessee submitted that the Assessing Officer has made the addition of Rs. 5,50,36,030, which consists of two parts, Rs. 5,34,2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly received and presuming on this basis that this paper is written by a person having exact information regarding receipt of payment does not establish that as to who is this person. Every person examined by the Assessing Officer as well as ADI have denied about this paper. On the face of it, this is a dumb document and at best one can make out that some calculation of interest has been done but with no reference to any property purchase or sale. It is further submitted that the reference of one Mr. Bipin Sharma and of the date 15-8-2000, the use of word "seems", then of "it can be seen", then of "they must be in deal of purchase of this farmhouse", then stating that the deal did not materialize "may be due to Shri Dinesh Jain not liking this farmhouse or may be he has got a better deal", then stating that "dispute started with regard to who should show how much loss", and that "the deal must have got stuck on 15th August, 2000" are all imaginations as if the Assessing Officer without knowing as to whether he was evaluating the evidence or writing a story without any source of information or any person, any other material showing these actions or facts. Further the words used "thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; Prarthana Construction (P.) Ltd. v. Dy. CIT [2001] 70 TTJ (Ahd.) 122 2 ; Chiranji Lal Steel Rolling Mills v. CIT [1972] 84 ITR 222 (Punj. Har.); Pankaj Dahyabhai Patel (HUF) v. Asstt. CIT [1999] 63 TTJ (Ahd.-Trib.) 790; Punjab Traders v. ITO [2004] 88 TTJ (Chd.) 394; Jaya S. Shetty v. Asstt. CIT [1999] 69 ITD 336-472 (Mum.); Addl. CIT v. Miss Lata Mangeshkar [1974] 97 ITR 696 (Bom.); Atul Kumar Jain v. Dy. CIT [1999] 64 TTJ (Delhi) 786; Asstt. CIT v. Shri Radheyshyam Poddar [1992] 41 ITD 449 (Cal.); Addl. ITO v. T. Mudduveerappa Sons [1993] 45 ITD (Bang.) 12; CIT v. Nirmal H. Phopalia [2003] 262 ITR 522 (Bom.); Monga Metals (P.) Ltd. v. Asstt. CIT [2000] 67 TTJ (All.) 247 3 ; Rama Traders v. First ITO [1988] 25 ITD 599 (Pat.) (TM); Amarjit Singh Bakshi (HUF) v. Asstt. CIT [2003] 80 ITD 13 (Delhi); S.P. Goyal s case ( supra ); Asstt. CIT v. G.S. Bhatia [1997] 59 TTJ (Mum.) 91; Smt. K.C. Agnes s case ( supra ); Srinivasa Ultrasound Scanning Centre v. Asstt. CIT [1998] 61 TTJ (Bang.) 619 4 ; Amar Natvarlal v. Asstt. CIT [1997] 60 ITD 560 ; Pushkar Narain v. CIT [1990] 183 ITR 388 5 (All.) and Satnam Singh C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d paper does not pertain to it, does not carry any weight, because page Nos. 5, 7 and 11 of Annexure A-2 are related to sale of some properties to Sh. Praveen Arora and in these pages also sale of property of Palm Court is mentioned. In that case the assessee has filed the copy of account and other details but did not take plea that this paper does not pertain to it. The assessee-company has a collaboration agreement with M/s. Elite Promoters (P.) Ltd. a group company of Taneja Group, there is nothing abnormal in finding of paper relating to the assessee at the premises of Sh. D.N. Taneja. Further it is also clear from the fact that total cheque payment as per books is matching with what is mentioned in loose paper that whatever is written on this paper is written by a person having exact information regarding receipt of payments with respect of sale of prop- erty at Palm Court, Gurgaon. The learned DR also referred to the date "15-8-2000" on this paper and submitted that on perusal of this paper it seems that the assessee, M/s. Elite Promoters (P.) Ltd. and Shri Vipin Sharma were dealing with Shri Dinesh Jain for sale of some Farm House and incurred a total loss of Rs. 62.5 lakhs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the person with respect to whom search and seizure action has been taken, and thereafter he has to handed over such documents to the Assessing Officer who was having jurisdiction over the other person to proceed under section 158BC against such other person. In the case of Amity Hotels (P) Ltd. ( supra ), the Delhi High Court held that there was no question of there being any reasons to believe if the officer has initiated action either under section 132 or under section 132A of the Act in respect of the person. It is section 158BD that calls upon the Assessing Officer to be satisfied himself before initiating it. From the records of that case, the Delhi High Court observed that it appears from the appreciation report that in almost all the cases, what issues needs to be investigated are indicated. Over and above, it was also indicated "some of it is verifiable from our record, but for the rest an indepth scrutiny is required to detect concealment". It was further said "Keeping in view the above observations and preliminary examination of the seized record, proceedings under section 158BD of the IT Act are hereby initiated against the assessee-company, to carry out detailed inve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed income has been discovered. Once this is done, the person who is to be proceeded with under section 158BD and then section 158BC must be informed about the satisfaction of the Assessing Officer recorded and he must be given a reasonable opportunity to object the same. In that connection, it is also observed, "Satisfaction can be arrived on some material. That material would provide the reasonable satisfaction". Referring to the Supreme Court decision in the case of Dr. GKN Driveshafts (India) Ltd. v. ITO [2003] 259 ITR 19 1 , the court directed the Assessing Officer to supply the reasons recorded for arriving at a satisfaction to the petitioner within a reasonable time upon the petitioner filing a return as required by the impugned notice. Here also, the judgment is not an authority for recording of reasons but is an authority for supplying the reasons for arriving at a satisfaction. 27. We may refer to in this connection the provisions of section 271(1) wherein also a similar language is used for levying penalty upon satisfaction of the Assessing Officer. It reads, "if the Assessing Officer or the Commissioner (Appeals) or the Commissioner in the course of any proceedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the course of assessment proceedings that the firm had concealed its income". The court also found that there was an endorsement at the foot of the assessment order by the Assessing Officer that action under section 28 has been taken for concealment of income and that indicated clearly that the Assessing Officer was satisfied in the course of assessment proceedings that the firm had concealed its income. 29. In the case of D.M. Manasvi v. CIT [1972] 86 ITR 557 , the Supreme Court again observed that clause ( c ) of sub-section (1) of section 271 says that action for taking proceedings for imposition of penalty arises if the Income-tax Officer or the Appellate Asstt. Commissioner is satisfied that any person has concealed the particulars of his income or furnished inaccurate particulars of such income. It is also to be shown that the Income-tax Officer or the Appellate Asstt. Commissioner was so satisfied in the course of proceedings under the Act. In that case, the notice for levy of penalty was issued subsequent to the making of assessment order and in that context the Supreme Court opined that this fact would not show that there was no satisfaction of the Income-tax Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roceeding to levy penalty has, however, not to be commenced by the Income-tax Officer before the completion of the assessment proceedings by the Income-tax Officer. Satisfaction before conclusion of the proceeding under the Act, and not the issue of a notice or initiation of any step for imposing penalty is a condition for the exercise of the jurisdiction." 30. On the contrary, we find a direct decision of Allahabad High Court in the case of Digvijay Chemicals Ltd. ( supra ) wherein the appeal was admitted on the following inter alia two questions : "2. Whether the Deputy Commissioner of Income-tax, Amritsar, had lawful satisfaction as mentioned in section 158BD before handing over the books of account and documents to the Assessing Officer of the appellant ? 2A. Whether such satisfaction is legally required to be recorded in writing?" 31. The court answered these two questions as under :- "As regards the second question, we are of the opinion that there was sufficient satisfaction by the Deputy Commissioner of Income-tax, Amritsar, for handing over the books of account and documents to the Assessing Officer of the appellant. This matter has been dealt with in pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required to come to a firm or conclusive satisfaction, before issuing such notice as is sought to be urged on behalf of the assessee. The facts revealed in the search operations have been stated in the reply affidavit that one Royal Enterprises through the two abovenamed persons M.H. Shah and M.C. Shah were engaged in clandestine business of converting black money into white in the garb of bogus sales of ship breaking material of Alang. The petitioner has been paid the purchase price by the two abovenamed persons having connection with Royal Enterprises. Certain disclosures were made by them with regard to the nature of the transactions they were engaged in. This disclosure in the search operations against the two abovenamed persons was a relevant material for forming of an opinion and satisfaction that the petitioner has not truly disclosed his income and the action under section 158BD was, therefore, called for." 33. Another Bench of Gujarat High Court has taken the similar view in the case of Priya Blue Industries P. Ltd. ( supra ) wherein it is observed as under: "Initiation of proceedings under section 158BD of the Income-tax Act, 1961, against another person is not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Date Amount received by you on A/c. of Mr. Dinesh Jain No. of Days up to 15-8-2000 Rent @ 12.5% from 15-8-2000 12-7-2000 CHS Rs. 24,00,000 (-) 35 days (-) Rs. 28,767 15-8-2000 ADJ Rs. 20,83,500 1/3rd loss of farm house Total Rs. 62.50 (50% of Vipin) Rs. 10,41,500 Sharma s 1/3rd share of loss) 30-8-2000 Cash Rs. 60,00,000 15 days Rs. 30,821 4-9-2000 Cash Rs. 85,69,800 19 days Rs. 55,762 15-9-2000 Cash Rs. 45,03,000 1 Month Rs. 46,906 22-9-2000 Cash Rs. 15,24,000 37 days Rs. 19,310 28-9-2000 Cash Rs. 44,03,500 43 days Rs. 64,846 4-12-2000 Cash Rs. 25,00,000 110 days Rs. 94,178 5-12-2000 Cash Rs. 22,00,000 111 days Rs. 83,630 19-12-2000 Cash Rs. 4,00,000 125 days Rs. 17,123 13-9-2000 Cash Rs. 1,20,00,000 23 days Rs. 1,15,068 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A-1 regarding certain transactions of cheque as well as cash and, therefore, that would be the sufficient material for satisfaction of the first mentioned Assessing Officer to hand over the record to the other Assessing Officer. It is always open to an assessee to challenge the same and plead that the books of account, documents, etc. did not belong to him or they do not contain any undisclosed income of that person. 38. On merits, the main contention of the assessee is that except the availability of page 24 of Annexure A-1 exhibiting the name of the assessee, some calculation of interest and mention of some loss to be shared by the assessee and others, there is nothing on record to suggest or to support the version of the Assessing Officer that cash was received by the assessee over and above the cheque amounts incorporated in the books of the assessee and also in the said documents. This is claimed to be dumb document without having any evidentiary value. The document/sheet of paper does contain the details of cheques received and these were found recorded in the books of the two assessees and that may give an impression that document pertain to the assessee concerns or tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the said company. As far as the transaction with Mr. Dinesh Jain is concerned, the same has been negotiated in my office in the presence of Mrs. Dewan along with Mr. Ravinder Taneja. At the time of search itself, it was stated by me that my brother Shri Rattan Chand had undergone open heart surgery about 5-6 days back and his office was lying open when I picked up these papers from his office and had kept them as such in my telephone diary without going through them, thinking that these papers are printouts which may be necessary for him in respect of the transactions which he might be proposing. In view of the aforesaid, though these documents were found from me but actually do not belong to me. Before making this statement, I have discussed with Shri Rattan Chand and Mr. Ravinder Taneja and they have stated that the said papers does not pertain to them. Mr. Rattan Chand has also denied any knowledge in respect of the said printouts since none of the printouts were available when he had gone for open heart surgery. It is thus evident that none of the print outs were within the knowledge of the management of the company and none have been found either from their custody or contro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id Annexure was put to him. He stated that Shri Dinesh Jain has purchased property developed by M/s. Elite Promoters Pvt. Ltd.; that a part of property comprising ground and 3rd floor were sold to Shri Dinesh Jain and its associate concerns for a consideration of 2,40,00,300 (Two crore forty lakhs and three hundred). He also stated that he did not know any person by the name Vipin Sharma. He was also asked question about the claim of loss relating to the sale of some farm house and that what prevented him to deposit these cheques not on and around date those cheques were issued and received by him in month of Apr. and May, 2000 but to deposit in his bank A/c only after 15-8-2000 and his answer was that the said paper on which this significant date is mentioned is not related to any of his concern. He also denied any dispute mentioned in the paper regarding any farm house and stated that they have not sold any farm house to him or any of his concern. Regarding depositing of cheques he stated that these cheques were received by me on the condition that the same will be deposited only after reconfirmation and were deposited when he got reconfirmation. 41. Statement of Sh. Dinesh J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge No. 24 of Annexure A-1 and he stated that the paper did not belong to them and he did not know who had prepared the paper for what purpose; that no such cheques have been received by my company and whatever the payment we received from any buyer is properly recorded in our books of account and he categorically denied that they had not entered into any cash transactions except shown in our books of account. As regards entries like adjustment against the 1/3rd loss of farm house, "H T paid by Dynamic" "Security lying with Dynamic" and "amount to be received from you" he stated that the paper did not pertain to them and no such transaction regarding farm house had been made and regarding security lying with Dynamic they have paid through account-payee cheque and the same has been properly recorded in their books of account and they had not paid Rs. 8 lakhs as H T for Dinesh Jain. He stated that before imputing this document the authenticity of the document has to be tested and that if somebody writes some figures and it is found from his premises which does not belong to him. There has to be some person who has to come forward and say that this document pertains to me. It was not t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of properties at Palm Court Project at Gurgaon and other family members as well as HUFs and companies and that the page is a statement of account of Shri Dinesh Jain giving the details of payments received by the assessee from him and the name of the assessee and Shri Dinesh Jain are mentioned on the aforesaid paper is though not fully supported by direct evidence but if seen with reference to other circumstance and the material/fact it clearly establishes the case of the revenue that cash was also received by the assessee over and above the cheque receipts appearing in pages 23 and 25 of Annexure A and accounted for by the assessee in its books of account. 46. In the case of Sumati Dayal ( supra ), a case came up before the Supreme Court regarding receipts from winning tickets from various racing clubs on the basis of winning tickets presented by the assessee. The dispute was, were they really winning of the appellant from the races? In that context it was observed that "this raises the question whether the apparent can be considered as the real". A reference was made to the earlier Supreme Court decision in the case of Durga Prasad More ( supra ) at pages 545 and 547 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction about purchase of winning ticket takes place in secret and direct evidence about such purchase would be rarely available. An inference about such a purchase has to be drawn on the basis of the circumstances available on the record. Having regard to the conduct of the appellant as disclosed in her sworn statement as well as other material on the record an inference could reasonably be drawn that the winning tickets were purchased by the appellant after the event. We are, therefore, unable to agree with the view of the Chairman in his dissenting opinion. In our opinion, the majority opinion after considering the surrounding circumstances and applying the test of human probabilities has rightly concluded that the appellant s claim about the amount being her winnings from races is not genuine. It cannot be said that the explanation offered by the appellant in respect of the said amounts has been rejected unreasonably and that the finding that the said amounts are income of the appellant from other sources is not based on evidence." 47. On consideration of rival submissions we notice that the commercial flats at the ground floor and 3rd floor, sold to Dinesh Jain group were fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Taneja. Besides this, it was also admitted that both cheque as well as cash payments were received by him only through Sh. D.N. Taneja. Thus establishing the fact that Sh. D.N. Taneja was very much involved in the Palm Court Project; (2) that though initially Sh. D.N. Taneja has denied of having any connection with pages 23 to 25 of Annexure A-1 and with Palm Court Project, however, later on, vide his reply dated 6-2-2002 to DDIT (Inv.), he admitted that this deal was made through him stating that : "As far as the transaction with Mr. Dinesh Jain is concerned, the same has been negotiated in my office in the presence of Mr. and Mrs. Dewan along with Mr. Ravinder Taneja."; (3) that similarly, page No. 2 of Annexure A-54 seized from 9, K.G. Marg, New Delhi which is a duly signed letter from Sh. Dinesh Jain to Sh. D.N. Taneja requesting him to resolve the long pending issues related to purchase of Palm Court Project; and (4) that the reference of Sh. Vipin Sharma, who was involved in materializing all the deal with Dinesh Jain group, has also been found on page No. 25 of Annexure A-1 seized from the residence of Sh. D.N. Taneja. Thus, establishing the fact that Sh. D.N. Taneja was t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8-2000 i.e. the date mentioned on page Nos. 23, 24 and 25 of Annexure A-1, is the para 6 reading : "In terms of the collaboration agreement the builder caused a plan bearing No. 1155/ME dated 3-9-1997 to be sanctioned by the Municipal Committee, Gurgaon for construction of the said Office- cum -Commercial Complex on the said plot of land a Completion Certificate bearing No. 2363 dated 11-5-2000 was issued by the Municipal Committee, Gurgaon thereof." If the Agreements to Sell were actually prepared on 10th and 11th April, 2000, then how a date later than that i.e. 11-5-2000 can appear in these Agreements to Sell with Dinesh Jain group? It may be that these Agreements were executed on a much later date i.e. on or after 15-8-2000 the date mentioned in pages 23, 24 and 25 of Annexure A . This view would get support from the fact that not even a single cheque issued in compliance to Paragraph 2 of page 4 of these Agreements to Sell i.e. Rs. 2,00,000 was to be given at the time of signing this Agreement, was deposited into the appellant s Bank account in the month of April, 2000 to August, 2000. The earliest date of depositing the cheque was 4-9-2000. Further, all Form No. 34A, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rty of Farmhouse or having any loss incurred with respect thereto. It is also not on record as to what has happened in the case of Dinesh Jain and his group case for assessment of the alleged payment in cash by them. CIT(A) gives certain findings but without giving an opportunity to the assessee to explain the same. He quotes certain examples of sales at higher rates but again without confronting the same to the assessee and to explain. Shri Ravinder Jain was not put to question about the document containing the details of cash and cheques payments and other notings stated to have been taken by D.N. Taneja from his drawer, the document on which case of the Revenue is heavily stands. These are all things to be seen and the assessee has to be given proper opportunity to explain the material used against him before taking a final decision. We accordingly set aside his order and also that of the Assessing Officer and remit the matter back to his file for consideration of the issue afresh after affording a reasonable opportunity to the assessee to explain the matter and the material being used against him. 54. In the result, the appeal of the assessee is allowed for statistical purp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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