TMI Blog2015 (3) TMI 1278X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee. Addition on advances and interest thereon - Held that:- 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 element can be considered as taxable. He accordingly restricted such interest and other income to ₹ 62,51,754/- as against ₹ 82,81,598/- determined by the Assessing Officer. This reasoned finding given by the CIT(A) in our opinion does not suffer from any infirmity and accordingly the same is upheld. The grounds raised on this issue are accordingly dismissed Addition on account of alleged interest received on the unexplained investment - Held that:- After considering the reply of the assessee to such en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asons for reopening of the case. 4. A search and seizure action u/s.132 of the I.T. Act was conducted at the residential and office premises of Chhoriya Group of Jalgaon on 22-08-2008. During the course of such search certain documents were seized at the residential-cum-factory premises of Shri Kanhaiyalal D. Chhoriya, G-128, MIDC, Jalgaon. It was noticed on perusal of the seized documents as per Annexure-B item No.1 to 40 which are rough cash books of Chhoriya group that Shri Ratanlal C. Bafna, Jalgaon had given advances to Chhoriya group of Jalgaon during the period 01-04-2001 to 31-03-2002. However, on perusal of the balance sheet filed by the assessee along with the return of income for the A.Y. 2002-02 the Assessing Officer noticed that these advances were not reflected in the said balance sheet. He examined such entries date-wise and observed that right from the first entry as on 04-04-2001 showing a credit amount of ₹ 26,880/- all these entries are till 28-02-2002. The peak of all these entries comes to ₹ 2,91,36,825/- On going through these entries in the rough cash book, the Assessing Officer noted that it has been mentioned there in case of certain entries ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ply drew the attention of the Assessing Officer to the statement given by Shri Devichand Motilal Chhoriya wherein it has been stated by him that all the names as appearing in the rough cash book are imaginary and the name of Shri R.C. Bafna is also imaginary. The assessee submitted that in answer to Question No.6 Shri Devichand Motilal Chhoriya has stated that since F.Y. 2001-02 is not covered for assessment in his case, they had paid the taxes for the F.Y. 2002-03 to 2007-08 working out the income of their concerns. It was further submitted that Shri Devichand Motilal Chhoriya has nowhere admitted that Shri R.C. Bafna has ever given any loan to him. It was accordingly submitted that no addition is called for. The assessee further submitted that Shri Devichand Motilal Chhoriya in his statement recorded has admitted himself that the said transactions are belonging to his firms. Therefore, the amounts cannot be added in the hands of the assessee. The assessee also objected to the working of the peak on the basis of which ₹ 2,91,36,825/- was treated by the Assessing Officer as unexplained loan. It was argued that the credit entry of ₹ 2,80,00,000/- was not found in the who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment is finalised not only on the basis of statement of Shri Devichand Motilal Chhoriya but also on the basis of the various documents seized during the course of search and seizure action u/s.132. He observed that although during the course of search action u/s.132 of the I.T. Act, the statements of Shri Kanhaiyalal D. Chhoriya and Shri Devichand Motilal Chhoriya were recorded and they had admitted the fact of recording of transactions in respect of the business affairs of the family members, however, inference can be drawn easily from the seized diary that these are transactions of Chhoriya group with the assessee and therefore the statement of Shri Devichand Motilal Chhoriya recorded on 01-12-2009 is false and misleading. 10. The Assessing Officer also rejected the submission of the assessee that the working of peak on the basis of which ₹ 2,91,36,825/- has been treated as unexplained loan is incorrect, since the credit entry of ₹ 2,80,00,000/- was not found in the whole month of April 2001 and no clear cut name was written there and that the amount might be outstanding before March 2001. The Assessing Officer held that though the amount of ₹ 2,80,00, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... khs per month. He noted that though for certain amounts the narration is clearly mentioned as interest against the entire amount of ₹ 7 to ₹ 7.5 lakhs, for certain months narration is given as interest and profit or other narration. This narration, according to the Assessing Officer, does not change the taxability of the amount as interest or profit both need to be taxed. Further, the name of the assessee Shri R.C. Bafna is always there with every entry even if narration is interest, profit, cash, Ajith Bhau or Gadhiayaji. This according to the Assessing Officer shows that the interest is being paid to the assessee only. As these are not entries of repayment of loan, therefore, these entries have to be of interest only which is clear from the fact that for certain months the entire amount of ₹ 7 to ₹ 7.5 lakhs is clearly written as interest. In view of the above, the Assessing Officer held that an amount of ₹ 82,81,598/- was paid to the assessee on account of interest during the year under consideration. Rejecting the various submissions made by the assessee from time to time and distinguishing the various decisions relied by the assessee before him th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 in the period laid down for action u/s.153C for assessment, therefore, the assessment framed u/s.143(3) r.w.s. 147 is bad in law and void ab-initio. It was argued that the statement of Shri Chhoriya given on oath during the course of assessment proceedings should have been considered and should not have been treated as false and misleading. The assessee also challenged the addition of ₹ 2,91,36,825/- on account of unaccounted peak advances on the ground that the name of the assessee in the books of Chhoriya was stated as imaginary name and when Chhoriya himself has admitted that such income belongs to him, therefore, the addition in the hands of the assessee was not justified. Without prejudice to the above, the assessee further argued that the credit figure of ₹ 2,80,00,000/- is not reflected in the said alleged rough cash book, therefore, the addition of the same is not justified since the same is legally unsustainable, arbitrary and devoid of any merit. The assessee also challenged the add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 and stating that the names contained in the seized documents were imaginary and further that the Assessing Officer could not find any incriminating documents during survey conducted u/s.133A of the I.T. Act in his premises on 19-09-2008 and therefore the reassessment was not correct, the Ld.CIT(A) held that since the material seized in the case of Chhoriya group revealed certain financial transactions which were not disclosed by the assessee to the department, therefore, the action taken by the Assessing Officer u/s.147 of the I.T. Act is justified. 17. As regards the contention of the assessee that the Assessing Officer should not have ignored the statement of Shri Chhoriya which was recorded on oath on 01-12-2009 as false and misleading, the Ld.CIT(A) rejected the same on the ground that the Assessing Officer has arrived at the conclusion based on the enquiries and other material available on record and it cannot be stated that they were mere presumptions. 18. So far as the ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Ratanlal C.Bafna , R.C.Bafna , Ratanlalji Bafna , Shri Ratanlal Bafna , etc. in respect of various financial transactions. It is an undeniable fact that Shri Ratanlal C.Bafna, who is the appellant in the instant case, is having business transactions with Chhoriya Group, Therefore, it can be simply inferred that the transactions against the above said names related to the business or financial transactions of the appellant with the Chhoriya Group. As per the seized document Page No.64 of Annexure B-19, Shri Chhoriya has given the complete details of advances and interest received in respect of Shri Ratanlal C.Bafna. The entries received on account of sale plots measuring specific areas mentioned in the seized documents tallied with the details of actual purchase of plots by appellant from the Chhoriya Group. Similarly, there are transactions relating to sale of jewellery in the said seized documents against the name of the appellant in one or the other forms mentioned above. These aspects have been elaborately discus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd, the monthly summary balances represented the overall position at the end of the each month regarding the outstanding receipts and payments. While completing the assessment, the A.O. segregated the transactions into two categories. The A.O. considered the interest, profit, etc. as taxable receipts for the A.Y.2002- 2003 as per Annexure A. The other financial transactions were considered as related to money lending activity and adopted for addition by peak credit method as per Annexure B. While working out the peak credit, the A.O. considered an amount of ₹ 2,80,00,000/- as advanced y the appellant during the F.Y.2001-2002 based on the seized documents. This amount do not find place in the daily cash book maintained by Shri Chhoriya for the F.Y.2001-2002. However, this amount was shown in the monthly summary sheet prepared as on 01/05/2001. The appellant seriously contested inclusion of the said .amount of ₹ 2,80,00,000/- while working-out the peak credit as the same was advanced prior to the F.Y.2001-2002. The appellant supported his argument on the ground that this transaction was not entered by Shri Chhoriya in the daily cash book. Therefore, it was requested that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unaccounted advance. It is also seen from the seized cash book that an amount of ₹ 2,00,000/- as interest and ₹ 5,00,000/- as profit has been credited on 04/04/2001 indicating that there is substantial outstanding advance even before 01/04/2001. Thus, it clearly proves that the entry made on the monthly summary sheet of May, 2001, is not representing amount advanced by the appellant during April, 2001 and could have been advanced in the earlier period. Therefore, the monthly peak statement needs to be recast by excluding the amount of ₹ 2,80,00,000/-. Similarly, it has already been decided at Para 6.6 below that the financial transactions amounting to ₹ 23,00,000/- are to be considered for the working of the peak statement. There are also certain transactions representing unrecorded sales of jewellery as mentioned and the same were included for workingout the peak credit in Annexure B. Since these transactions are sale transactions, they are to be excluded from the peak statement as discussed above. The following transactions included in the peak credit statement are actually related to sale of jewellery transactions: 04/04/2001 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment 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 true and correct and consequently the various additions sustained by the learned C.I.T(A) on the basis of entries found in the documents seized from Chhoriya Group allegedly in the name of the appellant, be deleted. 3] Shri. Devichand Motilal Chhoriya, the author of the seized documents (allegedly seized from Chhoriya Group) having admitted that the entries made by him in the alleged seized documents in the name of appellant represented the undisclosed income of his family and having paid the taxes on the said undisclosed income deceitfully recorded as loan from the appellant, the various additions as made by the learned Assessing Officer and as sustained by the learned CIT(A) on the basis of entries as appearing in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g at the end of the cash book in the monthly summary sheet of May 2001 drawn on 01-05-2001 and the amount of ₹ 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 ₹ 2,26,751/- while working out peak. The CIT(A) has failed to appreciate that the amount of ₹ 2,26,751/- is a gift and not sale transaction. 3. On the facts and in the circumstances of the case, the CIT(A) erred in excluding the entries of certain transaction considered for income as per Annexure A, to the tune of ₹ 23,00,000/-. The CIT(A) has failed to appreciate the facts that, though specific word like interest / profit has not been written in front of entries but the corresponding entry in the earlier or corresponding date of earlier month clearly speak about the profit and interest. Further, CIT(A) failed to appreciate that fix amount of ₹ 7 to 7.5 lakh is given as interest / profit to the assessee every month by Chhoriya Group. 3. The appellant craves leave to amend, alter or raise any new grounds which may be deemed necessary. 22. The assessee has also taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Vs. Miss Lata Mangeshkar reported in 97 ITR 696 (Bom.) 25. The Ld. Departmental Representative on the other hand strongly objected to the admission of the additional ground. He submitted that the Investigation Wing conducts searches and seizure operations, summons different persons, records their statements and prepare appraisal report which is sent to the Assessing Officer for making assessment. Such reports are not binding on the Assessing Officer. The Assessing Officer is at liberty to conduct independent enquiry and deviate from the conclusion arrived at the appraisal report. However, if during assessment proceedings certain issues crop up the Assessing Officer may seek help of the Investigation Wing of the Department to make certain investigations/enquiry. At the time of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppraisal 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 the non-searched person. The Assessing Officers during the course of assessment proceedings may require the assistance of the Investigation Wing for supply of further material. Sometimes the Investigation Wing suomoto forwards the documents to the Assessing Officer having jurisdiction over the said person. The Assessing Officer is not bound to blindly follow the recommendation, if any, of the Investigation Wing. The Assessing Officer applies his mind, examines the documents, gives opportunity to the assessee concerned to rebut his findings and then makes the assessment. 28. In the instant case, the Investigation Wing has forwarded such details to the Assessing Officer having jurisdiction over the case of Shri R.C. Bafna. The Investigation Wing has nowhere directed the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ₹ 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 10-12-2009 by the JCIT, Range-1, Jalgaon to JDIT (Investigation) Jalgaon, we find the JCIT has mentioned that peak determined by the Investigation Wing is incorrect and the peak is coming to negative for which he has requested for further material at the disposal of the Investigation Wing. Therefore it is not a case where the Assessing Officer has acted at the behest of the JDIT. He has acted in a very judicious manner acting independently which is in the line of the decision of the Hon ble Allahabad High Court cited (Supra). In this view of the matter, we dismiss the additional ground raised by the assessee. 31. Now coming to the other grounds of appeal, the Ld. Counsel for the assessee during the course of hearing before us did not press Grounds of appeal No. 1, 7 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 of one Kaihaiyalal Om Prakash and Baldev Prasad of Muzaffarnagar in which certain books of account and other documents were seized. There were credit entries of ₹ 2,20,000 standing in the name of the respondent-assessee in the seized books. On being asked to explain the nature and the source of the investment so made with the aforesaid firm, the respondent-assessee denied to have made any such investment or having given any advance to the said firm. The assessing office not being satisfied with the statement of the respondent-assessee made addition of the said amount which was affirmed in appeal by the CIT(A). On further appeal, the Tribunal deleted the addition on the ground that there was no material on record which may either establish or ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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. 37. Referring to paper book page 139 the Ld. Counsel for the assessee drew the attention of the Bench to the monthly summary as on 01-05- 2001 according to which the figure written against Seth Saheb is 280, i.e. 280 lakhs. This according to him tallies with the figures and calculation at page 70. 38. The Ld. Departmental Representative on the other hand strongly supported the order of the Assessing Officer. Referring to the order of the Ld.CIT(A) for A.Y. 2008-09 the Ld. Departmental Representative drew the attention of the Bench to para 11 onwards where the Ld.CIT(A) had demolished the statement given by Shri Chhoriya that the names appearing in the seized diary are imaginary. He has held that if all these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ginary. 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 of the I.T. Act was conducted at the residential and office premises of the Chhoriya group of Jalgaon on 22-08-2008. During the course of such search operation certain documents as per Annexure-B item No.1 to 40 were seized which are rough cash books of the Chhoriya group. The said diaries contain certain entries according to which Shri Ratanlal C. Bafna had given certain advances to Chhoriya group of Jalgaon during the period from 01-04-2001 to 31-03-2002. Since the assessee in his balance sheet had not disclosed such advances, the Assessing Officer issued notice u/s.148 and sought to bring the amount to tax as undisclosed income of the assessee. The Assessing Officer quantified such advances for the period from 01-04-200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ₹ 2,80,00,000/-. 40.2 The Ld.CIT(A) further observed that there are certain transactions included in the peak credit/statement actually related to sale of jewellery transactions, the details of which are as under : 04/04/2001 ₹ 26,880/- 04/06/2001 ₹ 2,26,751/- 12/11/2001 ₹ 2,000/- 02/02/2002 Rs. 53,520/- Similarly, he also held that the following amounts representing interest are to be excluded while working out the peak: 22/06/2001 Rs.994/- 14/12/2000 Rs. 260/- 40.3 He accordingly calculated a revised peak statement as per Annexure B to the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 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 in the above. A perusal of the order of the CIT(A) for A.Y. 2008-09 gives the sequence of events that took place. Admittedly, the search in the instant case took place on 22-08-2008 and in their statements recorded on that day or immediately after the search no member of the Chhoriya group had ever stated that the transacti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 copy of cash book for the period from 01-01-2001 to 31-03-2001 which he has obtained from the department by filing an RTI application. As per page 70 of the said cash book there appears an entry of ₹ 200 in the name of Srimanseth Saheb . Similarly, there is one more entry of 100 under the same name. As per the vers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sentative 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 ₹ 9,30,000/- as against ₹ 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 element can be considered as taxable. He accordingly restricted such interest and other income to ₹ 62,51,754/- as against ₹ 82,81 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne, 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 initiated in Mr. Chhoriya a group of cases for the year under consideration. Thus, for the natural justice, it is absolutely necessar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arding the same and name of Shri R.C. Bafna is not 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 stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndication of nature of transaction, i.e. money lending. The 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 busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee is concerned, he observed that the statement of Shri 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 computin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT[A] has failed to appreciate that the transactions 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of alleged interest received on alleged unexplained investment made by the appellant with Chhoriya Group and has further erred in making an enhancement of ₹ 52,99,832.00 to the addition made by the learned Assessing Officer on this ground. Thus the total addition of ₹ 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 ₹ 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. 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 the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 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 subjected to search u/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned, 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 ₹ 64,47,000/- out of ₹ 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 ₹ 20,31,360/- on account of alleged interest received on the unexplained investment and further enhancing the same by ₹ 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rest October 17. B-15/100 31/12/2007 57,000/- Interest others November 18. 111 07/01/2008 30,000/- Interest others November 19. 4,33,500/- Interest November 20. B-14/22 13/02/2008 19,98,692/- Interest Dec., Jan, Feb, Principal + Warehouse 2,55,000 Interest other Dec., Jan., Feb 3,85,500/- Interest March 84,000/- Interest others March 2,02,500/- Interest Warehouse receipt March Total 73,31,192/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 61. The assessee at the time of hearing did not press grounds of appeal No.1 3 for which the Ld. Departmental Representative has no objection. Accordingly, the above 2 grounds are dismissed as not pressed . Ground of appeal No.4 being general in nature is dismissed. 62. So far as ground of appeal No.2 is concerned, we find the above ground is identical to grounds of appeal in ITA No.951/PN/2010. Both the parties at the time of hearing also had stated that the outcome of the result in the above case will be applicable to the impugned appeal. We have already decided the issue in the preceding paragraphs and the grounds raised by the assessee on this issue have been dismissed. Following the same reasoning, the above ground by the assessee is dismissed. ITA No.101/PN/2012 (By Assessee - Shri Dalichand H. Oswal (Jain) (A.Y. 2002-03) : 63. Grounds raised by the assessee are as under : 1. That the Ld.CIT(A) erred in confirming the addition of ₹ 2,16,000/- being the amount of interest allegedly received by the appellant. 2. That the Ld.CIT(A) erroneously concluded that the appellant had loaned ₹ 9,00,000/- to Chhoriyas (prior to Asst. Yr. 2002-03) when ..... X X X X Extracts X X X X X X X X Extracts X X X X
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