DEPUTY COMMISSIONER OF INCOME TAX , CENTRAL CIRCLE-3, JAIPUR vs. SHRI NIRMAK KUMAR KEDIA,, JAIPUR

2 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT vkns'k@ ORDER PER: R.C. SHARMA, A.M. These are the cross appeals filed by the assessee and the Revenue against the separate orders of ld. CIT(A)-IV, Jaipur dated 31/12/2018 for the A.Ys. 2015-16 to 2017-18 in the matter of order passed U/s 143(3) read with Section 153A of the Income Tax Act, 1961 (in short, the Act).

2. In all these appeals, common issues are involved, therefore, for the sake of convenience and brevity all the appeals were heard together and now disposed off by passing this consolidated order.

3. Firstly we take assessee’s appeal being and Revenue’s Appeal being ITA No. 286/JP/2019 (A.Y. 2015-16). Rival contentions have been heard and record perused. The facts in brief are that the assessee derived income from the business of Real Estate and the assessee is also a partner in the firm M/s Kedia Real Estate LLP., the assessee filed his original return of income on 11.1.2016 for the AY 2015-16 declaring total income at Rs. 98,16,820/-. The assessee belongs to Kedia & Yadav Group, Jaipur on whose premises, a search u/s 132 of the Act was carried out on 19.11.2016. Various assets/ books of accounts

3 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT and documents were found and seized as per annexure prepared during the course of search. Pursuant to this, AO issued a notice u/s 153A of the Act to the assessee, in compliance of which, the assessee e-filed his return of income on 21.4.2017 for the AY 2015-16 declaring total income at Rs.98,16,820/-. Finally, the AO completed the assessment u/s 143(3) r.w.s. 153A of the Act vide order dated 22.3.2018 at a total income of Rs. 4,70,12,970/- making various additions. During the course of search and seizure operations u/s 132(1) of the Act and survey u/s 133A, statement were recorded by the Income Tax department at following premises. Premises Search/survey Date of Date of Commencement concluding Kedia House, Benad Search u/s 19-11-2016 20-11-2016 Road, Jaipur 132(4) Kedia Real Estate Survey u/s 133A 19-11-2016 20-11-2016 LLP, Shop No 8, 9, 10, 11 Ganesh Nagar, Jaipur Kedia Real Estate Survey u/s 133A 19-11-2016 20-11-2016 LLP, Evershine Tower, Vaishali Nagar, Jaipur Kedia Real Estate Survey u/s 133A 19-11-2016 20-11-2016 LLP, 1, Gayatri Nagar, Sanganer Flyover, Jaipur

4 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT During the course of search/survey, statements of Shri Nirmal Kedia and Shri Nitin Kedia were recorded, time of commencement/ conclusion of statements were as under:-

Section SHRI NIRMAL KEDIA START SUSPENDED/CONCLUDED 132(4) 19-11-2016 9.00 AM KEDIA 19-11-2016 10.00 AM HOUSE 131 19-11-2016 6.40 PM SANGANER 19-11-2016 11.50 PM OFFICE 131 20-11-2016 6.30 AM SANGANER NOTHING MENTIONED OFFICE ABOUT SUSPENSION 132(4) 20-11-2016 1.00 PM KEDIA 20-11-2016 HOUSE CONCLUDED 131 20-11-2016 4.30 PM SANGANER 20-11-2016 8.30 PM OFFICE 131 20-11-2016 11.30 PM SANGANER 20-11-2016 OFFICE CONCLUDED SHRI NITIN KEDIA 132(4) 19-11-2016 10.00 AM KEDIA 19-11-2016 11.00 AM HOUSE 131 19-11-2016 2.00 PM GANESH 19-11-2016 2.00 PM NAGAR 131 19-11-2016 5.30 PM EVERSHINE 21-11-2016 No break except TOWER small for rest on VAISALI 20/11/2016 NAGAR 131 19-11-2016 6.30 PM GANESH 19-11-2016 11.00 PM NAGAR 132(4) 20-11-2016 9.00 AM KEDIA SUSPENDED AND HOUSE RESUMED TIME NOT MENTIONED; CONCLUDED ON 20/11/2016 131 20-11-2016 10 AM GANESH 20-11-2016 NAGAR CONCLUDED

5 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT Even after search, statement U/s 131 of the Act was recorded on 02/12/2016 in the hands of Shri Nirmal Kedia wherein he confirmed the surrender made in survey/search but at this stage also he could not give persons wise/year wise bifurcation of undisclosed income. The assessee made several requests to provide the copy of statement (as placed at APB 791 to 800). However, the assessee could get the copy of statement only on 19/01/2018 (Friday). The assessee and his brother Shri Nitin Kedia retracted from the admission of undisclosed income in the statements recorded during the course of survey/search by filing an affidavit before AO on 22/01/2018. Thereafter, the AO recorded the statement of assessee on 23/02/2018 on the retraction of admission made by the assessee and his brother. 3.1 In the order framed U/s 143(3) read with Section 153A of the Act, the A.O. made addition of Rs. 1,22,26,044/- on account of alleged unaccounted business income alleged to be earned on sales of plots in Kediaz Corridor computed on the basis of noting found on Page No. 13- 19 of AS-9 impounded u/s 133(6) from M/s Kedia Real Estate LLP, Shop No. 8-10, Ganesh Nagar 6-A, Nadi Ka Phatak, Murlipura, Sikar Road, Jaipur. 3.2 Addition of Rs. 1,74,91,981/- on account of alleged unaccounted business income alleged to be earned on sales of plots in Kediaz

6 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT Corridor computed on the basis of noting found on Page No. 23-28 of AS-9 impounded u/s 133(6) from M/s Kedia Real Estate LLP, Shop No. 8-10, Ganesh Nagar 6-A, Nadi Ka Phatak, Murlipura, Sikar Road, Jaipur. 3.3 The A.O. also made addition of Rs. 74,06,624/- on account of alleged unaccounted business income alleged to be earned on sales of plot at Ganesh Vihar Vistar computed on the basis of noting found on Page 21-22 of Annexure-AS-9 impounded u/s 133(6) from M/s Kedia Real Estate LLP, Shop No. 8-10, Ganesh Nagar 6-A, Nadi Ka Phatak, Murlipura, Sikar Road, Jaipur. 3.4 Moreover, the addition of Rs. 71,500/- was made by the A.O. U/s 69C r.w.s 115BBE of the Act being alleged undisclosed expenses on the basis of Page No. 16 of annexure AS-1 found & impounded from Kedia House, Benar Road, Ganesh Nagar, Near Nadi Ka Phatak, Jhotwara, Jaipur.

4. By the impugned order, the ld. CIT(A) deleted the addition of Rs. 1,14,46,666/- made on account of unaccounted business income, Rs. 37,75,344/- made on account of GP rate on accounted business income from sale of plots. The ld CIT(A) also deleted the addition made by the A.O. of Rs. 31,81,606/- by treating the capital gains as income from business and also addition of Rs. 1,48,22,442/- on account of undisclosed receipts from sale of plots. An addition of Rs. 71,500/- made

7 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT by the A.O. on account of undisclosed expenditure U/s 69C of the Act was also deleted by the ld. CIT(A). However, the ld. CIT(A) has upheld addition of Rs. 7,79,378/- by applying GP rate of 31% on alleged unaccounted receipts of Rs. 25,14,122/- and Rs. 26,69,539/- by estimating the GP of 31% on the alleged unaccounted receipts of Rs. 86,11,417/-. The ld. CIT(A) has also upheld the addition of Rs. 4,49,644/- on account of alleged brokerage income @ 4% earned on sale of plots and addition of Rs. 31,81,606/- under the head income from long term capital gains worked out on the basis of notings on page No. 21-22 of exihibit-9, Annexure-AS seized from shop No. 8,9, and 10, Ganesh Nagar-6-A, Nadi Ka Phatak, Murlipura, Jaipur.

1. On the facts and in the circumstances of the case and in law the Id. CIT(A) erred in determining unaccounted receipts of Rs. 25,14,122/- against sales and confirming the addition of Rs. 7,79,378/- by applying the GP rate of 31% on alleged unaccounted receipts of Rs. 25,14,122/- worked out on the basis of noting on page No. 13-19 of AS-9 Seized from Shop No. 8-10, Ganesh Nagar 6-A, Nadi Ka Phatak, Murlipura, Sikar Road, Jaipur. The addition was confirmed without bringing any positive material on record to prove that the assessee received some amount against the sales over and above to whatever recorded in books of accounts.

8 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT 2. On the facts and in the circumstances of the case and in law the Id. CIT(A) erred in determining unaccounted receipts of Rs. 74,52,461/- + 11,58,956/-totaling to Rs. 86,11,417/- against sales and in confirming the addition of Rs. 23,10,263/- + 3,59,276 totaling to Rs. 26,69,539/- by applying the GP rate of 31% on alleged unaccounted receipts of Rs. 74,52,461/- +Rs. 11,58,956= Rs. 86,11,417/- on the basis of noting on page No. 23-28 of AS-9 Seized from Shop No. 8-10, Ganesh Nagar 6-A, Nadi Ka Phatak, Murlipura, Sikar Road, Jaipur. The addition was confirmed by bringing any positive material on record to prove that the assessee received some amount against the sales over and above to whatever recorded in books of accounts.

3. On the facts and in the circumstances of the case and in law the Id. CIT(A) erred in confirming the addition of Rs. 4,49,644/- on a/c of alleged brokerage income @ 4% earned on the sale of plots of Rs. 1,12,41,839/- found noted on Page No. 21-22 of exihibit-9, Annexure-AS seized from Shop No. 8,9,10, Ganesh Nagar-6-A, Nadi Ka Phatak, Murlipura, Jaipur. The addition was confirmed by bringing any positive material to prove the receipt of any brokerage income.

4. On the facts and in the circumstances of the case and in law the ld. CIT(A) erred in confirming addition of Rs. 31,81,606/- under the head income from long term capital gain worked out on the basis of noting on page No. 21-22 of exihibit-9, Annexure-AS seized from Shop No. 8,9,10, Ganesh Nagar-6-A, Nadi Ka Phatak, Murlipura, Jaipur. The addition was confirmed by bringing any positive material to prove the addition to be correct and without controverting the evidences filed by the assessee.

5. The appellant prays for leave to Add, to amend, to delete, or modify the all or any grounds of appeal

on or before the hearing of appeal.” Grounds of Revenue’s appeal:

1. Whether on the facts and in the circumstances of the case and in law the CIT(A) is justified in deleting the addition of Rs. 1,14,46,666/- made by A.O. on account of unaccounted business income.

2. Whether on the facts and in the circumstances of the case and in law the CIT(A) is justified in deleting the addition of Rs. 37,75,344/- by applying GP rate on account of unaccounted business income from sale of plots.

3. Whether on the facts and in the circumstances of the case and in law the CIT(A) is justified in giving the directions to A.O. for Rs. 31,81,606/- to be treated as capital gain and to be taxed under capital gain from sale of plots instead of business income.

9 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT 4. Whether on the facts and in the circumstances of the case and in law the CIT(A) is justified in deleting the addition of Rs. 1,48,22,442/- made by the A.O. on account of undisclosed receipts from sale of plots.

5. Whether on the facts and in the circumstances of the case and in law the CIT(A) is justified in deleting the addition of Rs. 71,500/- made by A.O. on account of undisclosed expenditure U/s 69C of the Income Tax Act, 1961.

6. It was argued by the ld AR of the assessee that the A.O. was not justified in making addition of Rs. 1,22,26,044/- on account of unaccounted business income in so far as the documents were not found from the assessee but from the premises of Kedia Real Estate. Thus, in respect of documents not found at the possession of the assessee, the A.O. was not justified in making addition. For this proposition, reliance was placed on the following judicial pronouncements: i) CIT v. K.K. Abdul Kareem [1996] 88 Taxman 323 (Kerala). Presumption u/s 132 (4A) can arise only if it is established that the paper was in the control on or in the possession of the assessee. ii) Chandalal Kalyanmal Vs ACIT 21 Taxworld 125 ITAT Jaipur Bench in 1992 order dated 3/2/1998. Held that on the basis of paper recovered from brother of partner, addition in the hands of firm cannot be made. iii) Mahendra Kumar Agarwal Vs ACIT 21 Taxworld 445 ITAT Jaipur Bench has held that on the basis of paper recovered from father of the assessee, addition in the hands of the assessee cannot be made.

10 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT iv) CIT vs SMS Investment Corporation Private Limited 207 ITR 364 Hon’ble Rajasthan High Court has held that if any document is found in the course of a search, then by legal fiction, a presumption has to be drawn that such document belongs to the person from whose possession or control it was found and the contents of such documents are true. v) Shardha Construction Vs ACIT 76 ITD 85 ITAT Pune bench Hon'ble ITAT Pune Bench has held that no addition can be made in the hands of assessee firm for the papers found at the residence of partner. vi) Jayantilal Patel Vs. ACIT and others/ Dr Balbir Singh Tomar Vs ACIT & others (Rajasthan High Court) 233 ITR 588. / 244 ITR 500 (Departmental appeal in DB)/ 142 CTR 571/20 Tax World 546/. Hon’ble Rajasthan High Court observed that addition on the basis of noting on a piece of paper cannot be sustained when it is not in assessee’s own hand-writing.

8. In view of above discrepancy in the statement, the ld AR contended that Shri Nitin Kedia could not be present at two places at same time. The statement at Ganesh Nagar shows that Shri Nitin Kedia was present at Ganesh Nagar in between 6.30 PM to 11 PM on 19/11/2016 where the statement at Evershine Tower in Vaisali Nagar shows that Shri Nitin Kedia was present at Vaisali Nagar office during this time. How it can be possible. Therefore, all the proceedings are vitiated in law.

9. As per the ld AR, the A.O. was justified in making addition of Rs. 1,22,26,044/- on the basis of e-mails since the print out of e-mail does not show receipts of cash but merely shows committing for booking. As 12 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT per the ld AR, the copies of impounded document No. 13 to 19 on the basis of which the addition is made by the AO are print out of e-mails, these sheets are printout taken from email accounts of the assessee group on which the sheets were sent by the sales team/staff /business associates of the assessee group. As per modus operandi, the sales team approaches the different group or person for sale of the plots. Whenever, they get commitment of booking, they report the management for intended booking of the plots. From examination of the impounded document, as per the ld AR, there is no evidence in the sheet that the amount noted in the column "cash amount" in this sheet was actually received from the plot holders. The ld AR further contended that without rebutting the explanation filed by the assessee, the A.O. jumped to the conclusion that the amount received was unaccounted sales of the assessee. He further submitted that the amount shown in the column “cash amount” in the impounded document in respect of plots were never received by the assessee. Merely commitment was made by these parties to the sales team to pay such amount but later on they did not make the payment because they found the rates quoted by the sales team was excessive as compared to the market rate or they change their mind to raise the construction or boundary wall etc. through the sales team of the assessee.

13 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT 10. On the other hand, the ld CIT-DR has relied on the order of the A.O. and contended that the seized documents clearly show that the amount received by the assessee as “on money” and the A.O. was justified in adding the same to the income of the assessee. He further contended that even during post search investigation, Shri Nirmal Kedia and Shri Nitin Kedia could not provide any evidence regarding accounting such cash receipts on sale of plot.

12. By the impugned order, the ld. CIT(A) has deleted the addition of Rs.1,14,46,666/- after observing as under:

14 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT “8. I have considered the assessment order, the submissions made by the appellant along with paper book for the year under consideration and all relevant material placed on record.

From examination of seized document it reveals that the name of the scheme developed by the appellant naming "Kediaz Corridor" is mentioned over the paper and the plot No. mentioned over the paper is also pertaining to this scheme and noting of seized documents in some of the cases is also correlating from the books of accounts of the appellant, therefore there remains no doubt that the seized documents pertain to business of appellant and the noting of the paper pertaining to the business affairs of the appellant. The appellant pleaded that the seized document were neither prepared by the assessee nor found from control of assessee and possession of the assessee and there is no evidence in the sheet that the cash amount noted in this sheet was actually received from the plot holders or if received the same was entirely only for plot sales and remitted to assessee is not acceptable because these sheets were found on the E-Mail id of the appellant and if the same would not having any bearing from the actual affairs there was no relevance of preparing such elaborate data. Further the sheets were recovered from the E-Mail id of the assessee, therefore the same cannot be said that the same was not found from the control 85 possession of the assessee. Further part of the noting of the seized document is also being verified from the books of accounts which can be sufficient to lead the logical conclusion that the noting made in the seized sheets is in relation to actual transaction. Therefore, the argument of the appellant is rejected on this count. 8.2 On being examining the seized document with the submission and details submitted by the appellant and finding of the AO following facts emerges 15 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT i) In the seized document (PB Pg 67 to 73) in respect of amount received from customer there are two column "Cash amount" and "Cheque amount". The cheque amount was recorded in books of appellant and this fact was also not disputed by the AO. However the AO presumed that the cash amount noted in the seized document is entirely out of books cash receipt of the appellant. The amount of cheque noted in the seized document and verifiable of the same from books of accounts leads to the conclusion that the seized document does not contain entirely the noting of unrecorded transactions. ii) In the seized document (PB Pg 67 to 73) the plot No. and name of respective Customer against such plot is also mentioned. From examination of the same from books of accounts its reveals that in some of the cases the plot was actually not sold to the customer mentioned on the seized document but the same was actually sold to some other party. Meaning which the initially plot was booked in the name of customer mentioned in the seized document and later on due to cancellation of booking the same was sold to some other party. iii) In some of the cases the cash amount recorded in the seized document is recorded in books of accounts which is either equal to amount noted in the seized document, or by more amount or by less amount. However, the date of cash receipt recorded in the books of account is not commensurate with the date noted in the seized document. The appellant in this regard submitted that the date noted on the seized record is not the date of receipt of amount from customer but the same is date of booking. This fact also elaborated from the fact that in the case of cheque receipts also the date is not same which proves that the date noted in the seized document is date of booking and not date of receipt.

16 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT 8.3 The appellant in the written submission bifurcated the addition of Rs.1,22,26,044/- made by the AO as tabulated below : - S. No. Particulars Amount (in Rs. ) A) Cases where the booking cancelled and 39,37,168/- either re-allotted to other party or stock in trade B) 57,08,521/- Cases where cash amount mentioned in the seized document is fully recorded in books of accounts C) 66,233/- Cases where cash amount mentioned in the seized document is partly recorded in books of accounts D) 25,14,122/- Cases where the sales was made to party mentioned in the seized document but the cash amount noted in the seized document is not found recorded in books In support of the above bifurcation the appellant also submitted the documents to substantiate his claim which was examined and verified. The working and chart of above bifurcation is available in the submission of the applicant which has been reproduced herein above, therefore the same is not reproduced in the finding given in this regard.

8.4 Now I decided the matter regarding addition made with regard to each class as bifurcated and mentioned in the para 8.3 above as under: - A) Cases where booking was cancelled: -It is established from the record and documents that in some of the cases the booking in the name of parties, as mentioned in the seized document was cancelled and later on the same was sold to some other party or being held by appellant as stock. Once it is proved that the booking has been cancelled than there remains no reason that the amount so 17 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT recoded against booking would not be refunded back to the respective party. This fact is also verifiable from the books of accounts on examination of which it reveals that the cases where the booking amount is received through cheque was also refunded back on cancellation of booking. Thus, in case of amount received through cash it cannot be presumed that the same would not be refunded back to the party. Thus, merely that initial amount received from party at the time of booking does not constitute the income of the 'appellant until and unless the same is materialized as sales or forfeited. Therefore, there is no logical reason to add the amount received against booking which were subsequently cancelled as income of the appellant. The finding of ld. AO that there is no reason as to why a cancelled booking of a plot will be made at a lower price subsequently to another purchaser is no bearing because in the seized document the amount of sales or rate of sales is not mentioned. Further each transaction from different party is different transaction and the same cannot be compared from each one if the same are made from unrelated parties. Further in several cases the appellant filed the affidavits of the buyers wherein they confirmed the purchase consideration. In absence of any contra material gathered as a result of search/survey or as a result of assessment proceedings the evidences in the shape of third party's affidavit submitted by the assessee should have been accepted and in such cases the acceptability of the affidavit cannot be denied by treating the same as self-serving evidences because here the seized recorded do not conclusively proves the unaccounted 18 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT receipt from the other persons who are actual buyers of these plots. Further the profit cannot be determined on the plots which are in stock. As regard my finding elsewhere that affidavits are self serving documents is not applicable here because my own finding was given in the other instances where the unaccounted amount is apparent from seized records. Thus the addition to the extent of Rs. 39,37,168/- on these cases is uncalled for and the same is directed to be deleted.

B & C) Cases where cash amount mentioned in the seized document is fully/partly recorded in books of accounts: - From the examination of the documents submitted by the appellant it reveals that in some of the cases the cash receipt is entirely or partly recorded in books. There is no evidence on record that the cash receipt against such plots recorded in books of accounts is different from the cash receipt as per seized document and there is no material available on record that the appellant received some payment from such parties over and above to whatever recorded in books of accounts. The seized document contains the noting of amount received by cash as well as cheque. The cheque amount is duly recorded is books of accounts and the same fact also admitted by the AO therefore there remain no reason to presume that the cash amount recorded in the seized document is entirely unaccounted receipt. In the light of cheque transaction noted in the sheet it can be considered that part of the amount noted in the sheet which are being verified from books of accounts are 19 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT recorded transactions. Admittedly there is difference in the date noted in the seized document and date of receipt in books of accounts but as submitted the date noted on the seized record is not the date of receipt of amount from customer but the same is date of booking. This submission of the appellant is acceptable because of the reason that in the case of cheque receipts also the date is not same which proves that the date noted in the seized document is date of booking and not date of receipt. In view of above the cash receipt to the extent of Rs. 57,74,754/- (57,08,521+66,233) recorded in books of accounts cannot be added as income of the appellant and hence the same is directed to be deleted.

(D) Other cases where the sales made to party noted in the seized record and cash mention in the seized document is not found recorded in books: - For the cases where the sale was actually made to the parties mentioned in the seized document and the cash recorded in the seized document is not found recorded in books of accounts the appellant made a submission that such cash receipt was not received by the appellant. The appellant submitted that such cash receipts may be regarding the amount demanded by the staff/sales team/business associates of the assessee group for JDA and other expenses etc. for which the assessee was not having any concern. The submission of the appellant on this account is not acceptable because the seized document was found from the E-Mail id of the appellant and the same was in relation to amount receipt from various parties against booking of plot. It is not understandable that if some 20 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT receipts are not attributable to the appellant and the appellant is not having any concern from such receipt than why someone report such receipt to appellant and why will the same will brought in knowledge of the appellant. Further it is impossible to imagine and accept that the appellant will leave the activity regarding the recovery of JDA and other expenses etc. on part of its staff/associates more so when it involves the volume of high amount and in case of any failure on part of staff/associate the liability/recovery of such amount by the respective party will be from the appellant only. Thus the argument of the appellant in this regard is not acceptable and the appellant failed to substantiate nature of these receipts, therefore it can be reliably and logically presume that such receipts are unaccounted cash receipt of the appellant which is not recorded in books of accounts. The affidavits submitted by the appellant cannot be considered as evidence because no party will admit the unaccounted payment made by him because the same also lead to them also in trouble. Thus, the affidavits submitted by the appellant are not corroborative evidences but the same are self-serving evidence which cannot be accepted.

The appellant alternatively argued that the even in case of unaccounted sales, the entire receipts cannot be held as taxable income. In such case, only GP should be estimated. In view of various judicial pronouncements including the case laws relied by the appellant the alternative argument of the appellant is acceptable that in case of unaccounted sales only GP on such sales should be estimated and such GP should only 21 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT be added as income of the appellant. In this case the appellant himself declare the GP 30.60% in the regular books of accounts. Therefore, the AO is directed to apply the GP rate of 31% on unaccounted receipts of Rs.25,14,122/- which comes Rs.7,79,378/-. Thus, the addition to the extent of Rs.7,79,378/- is confirmed and the balance addition of Rs.17,34,744/- is deleted.

In this regard it is to further added that in the case of Shri Gulam Farooq Ansari vs ACIT Honb'le ITAT, Jaipur bench, Jaipur after giving the finding that entire receipt cannot be added as income applied the profit rate of 8% by following the decision of DCIT Vs Pahar Ganj Grih Nirman Sahkari Samiti Ltd 86 Othrs IT(SS)A nos. 100,129,130 86 133/JP/2003. The GP rate estimated by me is though higher from the GP rate estimated by Hon'ble ITAT in similar cases but the same is based on the GP rate himself declared by the appellant in his books of accounts, therefore in my considered view logically the higher GP rate himself declared by the appellant in his books of accounts should be applied on unaccounted receipts.

8 . 5 I n v i e w o f a b o v e t h e a d d i t i o n s t o t h e e x t e n t o f R s . 1,14,46,666/- = (39,37,168 + 57,74,754 + 17,34,744) is directed to be deleted and the addition of Rs.7,79,378/- is sustained. Thus, the Appellant's Ground No. 2 of the appeal is partly allowed to the extent indicated above.”

13. From the orders of the lower authorities, we gather that copies of seized document No. 13 to 19 on the basis of which the addition of Rs. 1,22,26,044/- is made by the AO is discussed at para 6 if his order. With 22 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT regard to addition of Rs. 1,22,26,044/-, the A.O. referred page 13-19 of Annexure AS-9 impounded u/s 133(6) from M/s Kedia Real Estate LLP, Shop No. 8-10, Ganesh Nagar 6-A, Nadi Ka Phatak, Murlipura, Sikar Road, Jaipur. Statement of Shri Nitin Kedia was recorded u/s 131 of Income Tax Act during the survey proceedings u/s 133(6) over M/s Kedia Real Estate LLP, Shop No. 8-10, Murlipura, Sikar Road, Jaipur. No specific question was raised on page 13-19 of Annexure AS-9 by the survey party. However general statement of Shri Nitin Kedia u/s 131 of the Act on Annexure AS-9 are in answer to question no 14 & 17.

15. During the course of assessment proceedings, the assessee made following submissions relevant to impugned page Nos. 13-19 to the A.O.. a) Vide letter dated 07.02.2018 (Copy at PB Page 136 to 172 relevant page PB Page 169)

"These sheets were neither prepared by the assessee nor found from control of assessee. Entries in these sheets do not show any undisclosed income of the assessee. These sheets are printout of email.

Prima facie it appears that these sheets were prepared by the staff/sales team/business associates of the assessee group regarding amounts demanded by them from various customers regarding JDA and other expenses etc. against the plots in scheme naming "Kediaz Corridor". It is relevant to mention here that the assessee did not receive any amount from any customer against JDA and other expenses. The same was directly receiving by the staff/sales team/business associates of the assessee group and being expending by them directly. The assessee group no way concern of this activity which is evident from the fact that no supporting material/record on the basis of which these sheets were 25 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT prepared was found from the possession of the assessee group. Whatever sales consideration and cheques received by the assessee against sales of plots are duly recorded in books of accounts." b) Vide letter dated 28.02.2018 (Copy at PB Page 173 to 176)

"ii) Regarding page No. 13 to 19 of Annexure 9 found and seized from Shop No. 8 to 11, Ganesh Nagar, 6A, Nadi Ka Phatak, Murlipura, Sikar Road, Jaipur and pgge No. 23 to 28 of Annexure 9 found and seized from Shop No. 8 to 11, Ganesh Nagar, 6A, Nadi Ka Phatak, Murlipura, Sikar Road, Jaipur Without prejudice to our submission dated 07.02.2018 submitted on these papers we may further submit that: - a) These sheets pertain to scheme of the assessee group naming "Kedia'z Corridor" owned by Shri Nirmal Kumar Kedia and Shri Nitin Kedia. b) Part of the plots containing the cash receipt at Page No. 23 to 28 are also appearing at page No. 13 to 19. Thus while working the cash receipt on the basis of these papers the common entries are required to be eliminated. b) In some of the cases the booking was cancelled and the plot was later on sold to some other party or still lying in stock of the assessee group thus in such cases the cash receipts cannot be added as income of the assessee because upon cancellation of booking the advance amount was also required to be refunded to the customer. c) In some of the cases the cash receipt either partly or fully recorded in books of accounts of the assessee and in such cases no 26 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT unrecorded cash receipt can be added in the hands of the assessee group on the basis of these papers.

To prove our contention we are enclosing herewith the following documents: - i) Working sheet of Page No. 13 to 19 marking the entries where the booking was cancelled or cases where the amount is duly recorded in books of accounts. The ledger a/c of the parties in whose cases the amount is recorded in books of accounts is also enclosed herewith. In cases where the initial booking mentioned in this sheet was cancelled and the plot was later on sold to other party we are enclosing herewith the copy of possession letter issued to party to whom the plot was finally sold to prove that the plot was not sold to the party whose name is mentioned in the sheet. After considering the above submission if any unaccounted cash receipt is required to be added by presuming the cash receipts as unaccounted business receipts then the same can be worked out Rs. 25,14,122/- only. ii) Working sheet of Page No. 23 to 28 marking the entries where the booking was cancelled or cases where the amount is duly recorded in books of accounts or cases where the entry is also appearing at page No. 13 to 19. The ledger a/c of the parties in whose cases the amount is recorded in books of accounts is also enclosed herewith. In cases where the initial booking mentioned in this sheet was cancelled and the plot was later on sold to other party we are enclosing herewith the copy of possession letter issued to party to whom the plot was finally sold to prove that the plot was not sold to the party whose name is mentioned in the sheet. After considering the above submission if any unaccounted cash receipt is required to be added by presuming the cash receipts as 27 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT unaccounted business receipts then the same can be worked out Rs. 9,58,956/- only." c) Vide letter dated 05.03.2018 (Copy at PB Page 185 to 194)

"7. Regarding page No. 13 to 19 of Annexure 9 found and seized from Shop No. 8 to 11, Ganesh Nagar, 6A, Nadi Ka Phatak, Murlipura, Sikar Road, Jaipur and page No. 23 to 28 of Annexure 9 found and seized from Shop No. 8 to 11, Ganesh Nagar, 6A, Nadi Ka Phatak, Murlipura, Sikar Road, Jaipur In this regard we have submitted our detailed submission along with supporting documents with our submission dated 28.02.2018 and the same may kindly be considered here also. For the sake of convenience the same submission is reproduced hereunder again: - "Without prejudice to our submission dated 07.02.2018 submitted on these papers we may further submit that: - a) These sheets pertain to scheme of the assessee group naming "Kedia'z Corridor" owned by Shri Nirmal Kumar Kedia and Shri Nitin Kedia. b) Part of the plots containing the cash receipt at Page No. 23 to 28 are also appearing at page No. 13 to 19. Thus while working the cash receipt on the basis of these papers the common entries are required to be eliminated. b) In some of the cases the booking was cancelled and the plot was later on sold to some other party or still lying in stock of the assessee group thus in such cases the cash receipts cannot be added as income of the assessee because upon cancellation of booking the advance amount was also required to be refunded to the customer.

28 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT c) In some of the cases the cash receipt either partly or fully recorded in books of accounts of the assessee and in such cases no unrecorded cash receipt can be added in the hands of the assessee group on the basis of these papers.

To prove our contention we are enclosing herewith the following documents: - i) Working sheet of Page No. 13 to 19 marking the entries where the booking was cancelled or cases where the amount is duly recorded in books of accounts. The ledger a/c of the parties in whose cases the amount is recorded in books of accounts is also enclosed herewith. In cases where the initial booking mentioned in this sheet was cancelled and the plot was later on sold to other party we are enclosing herewith the copy of possession letter issued to party to whom the plot was finally sold to prove that the plot was not sold to the party whose name is mentioned in the sheet. After considering the above submission if any unaccounted cash receipt is required to be added by presuming the cash receipts as unaccounted business receipts then the same can be worked out Rs. 25,14,122/- only. ii) Working sheet of Page No. 23 to 28 marking the entries where the booking was cancelled or cases where the amount is duly recorded in books of accounts or cases where the entry is also appearing at page No. 13 to 19. The ledger a/c of the parties in whose cases the amount is recorded in books of accounts is also enclosed herewith. In cases where the initial booking mentioned in this sheet was cancelled and the plot was later on sold to other party we are enclosing herewith the copy of possession letter issued to party to whom the plot was finally sold to prove that the plot was not sold to the party whose name is mentioned in the sheet. After considering the above submission if any unaccounted cash receipt 29 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT is required to be added by presuming the cash receipts as unaccounted business receipts then the same can be worked out Rs. 9,58,956/- only."

In view of above submission and documents/affidavits submitted by the assessee and further inquiry made by you, no addition can be made on the basis of these seized documents in the hands of the assessee group. However, without consenting, we further submitting that if the explanation of the assessee is rejected than at the worst the addition of Rs. 25,14,122/- (In AY 2015-16) on the basis of seized documents 13 to 19 and addition of Rs. 9,58,956/- (In AY 2015-16) on the basis of seized documents 23 to 28 can only be made in the case of assessee group. Further the plots mentioned in this sheet pertaining to scheme of the assessee group M/s Kediaz Corridor which pertaining to Shri Nirmal Kumar Kedia and Shri Nitin Kedia."

2) These sheets were neither prepared by the assessee nor found from control of assessee and possession of the assessee. These sheets are printout taken from email accounts of the assessee group on which the sheets were sent by the sales team/staff /business associates of the assessee group. From examination of the seized document your honour will find that admittedly the name of the scheme of the assessee has been mentioned over the sheet but there is no evidence in the sheet that the cash amount noted in this sheet was actually received from the plot holders or if received the same was entirely only for plot sales and remitted to assessee.

3) The AO treated the unaccounted sales of Rs. 1,22,26,044/- on the basis of the impugned seized paper 13-19 of AS-9 without rebutting the explanation made by the assessee. On being reconciliation of the 30 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT sheet from the books of accounts of the assessee following facts emerges: - S.No Particulars Amount (Rs) Total of figure mentioned on seized paper 13-19 of AS-9 1,22,26,044 Less (i) Booking Cancelled —either re-allotted to other party or in stock (-)39,37,168 In several cases the booking mentioned in the sheet was cancelled, therefore there is no reason to add the amount of such plots as income of the assessee as in such cases if any amount is presumed to have been received against booking of such plots, then upon cancellation of booking, the same will have to be refunded back to the party. Less (ii) Cash Amount mentioned in the seized paper fully recorded in books of (-)57,08,521 account In several cases the cash amount mentioned on the sheet is completely recorded in books of accounts of the assessee as and when the same was remitted to the assessee, therefore the cash amount duly recorded in books of accounts against such plot cannot be treated as income of the assessee. Further there is no reason to presume that the cash amount recorded in the seized document is over and above to cash recorded in books of accounts. Less Cash Amount mentioned in the seized paper partly recorded in books of (-) 66233 (iii) account at lesser figure Balance 25,14,122 In some of the cases the sales was actually made to the same party as noted on the Balance seized document but the cash receipt is either not recorded in books or recorded by lesser amount. In such cases the excess cash reported on the sheet was never received to the assessee but the same was on account of IDA expenses or boundary wall construction expenses which retained by sales team and further expended directly by them.

16. From the record we found that in the following cases, the booking mentioned in the seized documents were cancelled:

S. No. of Plot/ Shop Name of the party as Name of Person to Cash as per Document submitted in entry as per No per seized records whom sale actually Annexure Page support of explanation seized made/booked 13 to 19 annexure 19 172 Om Prakash Limmedi Lal 1,100.00 Copy of possession letter Sharma Meena issued in the name of actual buyer at PB Page 445. 21 216 Sushila Devi Alok Sharma 9,100.00 Copy of affidavit of actual buyer of plot at PB Page 260- 261 and Copy of possession letter issued in the name of actual buyer at PB Page 446. 25 217 Mukesh Bugalia Naurati Verma 2,06,567.00 Copy of possession letter issued in the name of actual buyer at PB Page 448.

31 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT 26 218 Mukesh Bugalia Jagdish Chnadra 2,06,567.00 Copy of possession letter Nagar issued in the name of actual buyer at PB Page 449. 30 386 Vivek Shukla Pradeep Kumar 1,48,025.00 Copy of possession letter issued in the name of actual buyer at PB Page 450. 39 186 Radesh Hegda Sachin Pathak 1,100.00 Copy of possession letter issued in the name of actual buyer at PB Page 451. 40 270 Manmohan Pravesh Goyal 1,000.00 Copy of possession letter Mehta issued in the name of actual buyer at PB Page 452. 41 271 Laxmi Sharma Pravesh Goyal 1,000.00 Copy of affidavit of actual buyer of plot at PB Page 264- 265 and Copy of possession letter issued in the name of actual buyer at PB Page 471. 46 50 R. G. Soni Rajeev Jain 33,333.00 Copy of affidavit of actual buyer of plot at PB Page 268- 269 and Copy of possession letter issued in the name of actual buyer at PB Page 454. 47 230 R. G. Soni Jagdish Prasad 33,334.00 Copy of possession letter Gupta issued in the name of actual buyer at PB Page 455. 50 229 Hemant Sharma Monika Dikshit 3,00,000.00 Copy of affidavit of actual buyer of plot at PB Page 272- 273 and Copy of possession letter issued in the name of actual buyer at PB Page 457. 56 137 Kishan Brijesh Kumar 5,500.00 Copy of possession letter Chandnani Gupta issued in the name of actual buyer at PB Page 461. 64 225 Gopalji Rajan Shri 1,100.00 Copy of affidavit of actual Vastav buyer of plot at PB Page 286- 287 and Copy of possession letter issued in the name of actual buyer at PB Page 463. 65 2C6 Giraj Gupta Rameshwar 1,100.00 Copy of affidavit of actual Datal Gupta buyer of plot at PB Page 288- 289 and Copy of possession letter issued in the name of actual buyer at PB Page 464. 69 49 Suresh Gupta Rakesh Kumar 11,000.00 Copy of affidavit of actual Singhal buyer of plot at PB Page 290- 291 and Copy of possession letter issued in the name of actual buyer at PB Page 465. 73 275 Naval Kishor Sanjay Shri 500.00 Copy of affidavit of actual Jhaver Vastav buyer of plot at PB Page 296- 297 and Copy of possession letter issued in the name of actual buyer at PB Page 469.

32 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT 76 342 Arvind Jain P.k.icii Mittal 250.00 Copy of possession letter issued in the name of actual buyer at PB Page 471. 78 274 Gauri Shanker Akansha Joshi 2,100.00 Copy of affidavit of actual buyer of plot at PB Page 302- 303 and Copy of possession letter issued in the name of actual buyer at PB Page 472. 85 203 Om Prakash Kailash Chand 2,18,736.00 Copy of possession letter Dhama Sharma issued in the name of actual buyer at PB Page 476. 86 204 Om Prakash Yodram 2,18,736.00 Copy of possession letter Dhama Dayama issued in the name of actual buyer at PB Page 477. 87 205 Om Prakash Yatendra 2,18,736.00 Copy of possession Dhama Madaan letter issued in the name of actual buyer at PB Page 478. 88 208 Om Prakash Ashish Mantri 3,15,000.00 The possession letter not Dhama issued to the party till date. However the copy of ledger a/c of the party showing the detail of payment received from party against booking to plot is at PB Page 479. 89 209 Om Prakash Shankar Lal 3,15,000.00 Copy of affidavit of actual Dhama Sharma buyer of plot at PB Page 317 318 and Copy of possession letter issued in the name of actual buyer at PB Page 480. 90 210 Om Prakash Ram Ji Lal Saini 3,15,000.00 Copy of possession Dhama letter issued in the name of actual buyer at PB Page 481. 91 211 Om Prakash Jyoti Agarwal 3,15,000.00 Copy of possession letter Dhama issued in the name of actual buyer at PB Page 482.2 92 212 Om Prakash Rachana 3,36,984.00 Copy of possession letter Dhama Sharma issued in the name of actual buyer at PB Page 483.

33 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT 96 19 Sanjay Sharma Manju Singh 1,000.00 Copy of affidavit of actual buyer of plot at PB Page 319-320 and Copy of possession letter issued in the name of actual buyer at PB Page 484. 97 316 Vikram Singh Saba Khan 1.75,000.00 Copy of possession letter issued in the name of actual buyer at PB Page 485. 98 317 Vikram Singh Saba Khan 1,75,000.00 Copy of possession letter issued in the name of actual buyer at PB Page 486, 101 107 Yogesh Kumar Ravindra Kumar 5,100.00 Copy of affidavit of actual Bairwa buyer of plot at PB Page 321-322 and copy of possession letter issued in the name of actual buyer at PB Page 489. 109 171 Umesh Kumar Shanbhu Dayal 5,100.00 Copy of affidavit of actual Vijay Sharma buyer of plot at PB Page 325-326 and copy of possession letter issued in the name of actual buyer at PB Page 491. 118 75 Rajan Shri Vastav Kamla 550.00 Copy of affidavit of actual Khandelwal buyer of plot at PB Page 333-334 and Copy of possession letter issued in the name of actual buyer at PB Page 494. 136 S-14 Laxman Singh Hemlata Devi 56,250.00 Copy of possession letter issued in the name of actual buyer at PB Page 502. 137 320 Chander Shakar Savitri Devi 1,100.00 Copy of possession letter Sharma Sharma issued in the name of actual buyer at PB Page 503. 139 79 Dr. Manoj Singh Sanjay Kanwar 1,100.00 Copy of affidavit of actual buyer of plot at PB Page 345-346 and Copy of possession letter issued in the name of actual buyer at PB Page 504. 142 98 Kishor Singh Prem Lata 85,000.00 Copy of affidavit of actual Sharma buyer of plot at PB Page 349-350 and Copy of possession letter issued in the name of actual buyer at PB Page 507.

34 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT 143 390 Rajkumar Hari Mohan 1,62,500.00 Copy of affidavit of actual Mashwari Sharma buyer of plot at PB Page 351-352 and Copy of possession letter issued in the name of actual buyer at PB Page 508. 148 279 L. K. Gupta Ram Laxman 1,100.00 Copy of possession letter issued in the name of Vijayvergiya actual buyer at PB Page 509. 149 391 Ashish Sharma Praful Pareek 1,000.00 Copy of affidavit of actual buyer of plot at PB Page 355-356 and Copy of possession letter issued in the name of actual buyer at PB Page 510. 156 339 Shri Ram Shefali 1,500.00 Copy of possession letter Bhagotiya issued in the name of actual buyer at PB Page 516. 157 340 Sanjay Archana Gupta 1,100.00 Copy of affidavit of actual Khandalwal buyer of plot at PB Page 367-368 and Copy of possession letter issued in the name of actual buyer at PB Page 517. 158 353 Vikarm Vaswani Akash Bhati 2,100.00 Copy of affidavit of actual buyer of plot at PB Page 369-370 and Copy of possession letter issued in the name of actual buyer at PB Page 518. 160 325 Sanjay Gautam Laxmi Meena 550.00 Copy of possession letter issued in the"-name of actual buyer at PB Page 519. 161 326 Sanjay Gautam Satish 550.00 Copy of possession letter Choudhary issued in the name of actual buyer at PB Page 520. 165 72 Murli Manhor Kamlesh Seth 5,100.00 The possession letter (Rahul Seth) not issued to the party Sharma till date. However the copy of ledger a/c of the party showing the detail of payment received from party against booking to plot is at PB Page 520A. Suresh Kumar 180 266 Not Sold 2,100.00 Not sold. Yadav 181 190 Sumitra Sharma Rahul 1,100.00 Copy of possession letter Bhagotiya issued in the name of 35 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT actual buyer at PB Page 529. 182 158 Vikram Singh Sanjay Bansal 500.00 Copy of possession letter issued in the name of actual buyer at PB Page 530. 183 139 Kailash Chand Rachna 100.00 Copy of possession letter Saini Goadwal issued in the name of actual buyer at PB Page 531. Copy of affidavit of actual buyer of plot at PB Page 391-392 and Copy of 189 370 Priyanka Singh Kamlesh 500.00 possession letter issued in the name of actual buyer at PB Page 533. Copy of possession letter Suresh Kumar issued in the name of 190 233 Beena Rathore 2,100.00 Yadav actual buyer at PB Page 534. Copy of affidavit of actual buyer of plot at PB Page Ghanshyam 403-404 and Copy of 198 5-1 Sharda Sharma 21,000.00 Khandelwal possession letter issued in the name of actual buyer at PB Page 541. Copy of affidavit of actual buyer of plot at PB Page Subhash Ramgopal 415-416 and Copy of 205 357 Chnadra 2,500.00 Agarwal possession letter issued in Agarwal the name of actual buyer at PB Page 543. Copy of affidavit of actual buyer of plot at PB Page Ramgopal 2,500.00 417-418 and Copy of 206 358 Sandeep Bansal Agarwal possession letter issued in the name of actual buyer at PB Page 544. Copy of affidavit of actual buyer of plot At PB Page 419-420 and 207 334 Safi k Suresh Gurjer 5,100.00 Copy of possession letter issued in the name of actual buyer at PB Page 545. Copy of possession letter Mahander K. issued in the name of 212 368 Rajevv Gupta 500.00 Saini actual buyer at PB Page 546. Copy of affidavit of actual buyer of plot at PB Page 213 369 Rajevv Gupta Anita Agarwal 500.00 423-424 and Copy of possession letter issued in 36 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT the name of actual buyer at PB Page 547. Copy of affidavit of actual buyer of plot at PB Page 427-428 and Copy of 215 384 Murarilal Gupta Vijay Vyas 1,000.00 possession letter issued in the name of actual buyer at PB Page 548. Copy of possession letter Umesh Kumar Devki Nandan issued in the name of 218 71 1,100.00 Goyal Sharma actual buyer at PB Page 549. 39,37,168.00 Total

37 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT 18. From the record, we also found that in the following cases, cash receipts were duly recorded in the books of account of the party:

S. No. of Plot/ Shop Name of the party Cash as per Cash receipt Document submitted in entry as No as per seized Annexure Recorded in support of explanation per seized records/party to Page 13 to 19 books annexure whom sales made if the made to family member Copy of ledger account of the party showing the 1 61 Naresh Kumar 1,64,000.00 1,69,443.00 cash receipt recorded in books of accounts at PB Page 4.40. 12 53 K.C. Sethi 1,65,275.00 3,33,330.00 Copy of affidavit of buyer of plot at PB Page 252- 253 and Copy of ledger account of the party showing the cash receipt recorded in books of accounts at PB Page 441. 13 54 K.C. Sethi (Sold to 1,65,275.00 3,33,330.00 Copy of affidavit of buyer Pushpa Setha wife of plot at P8 Page 254- of K. C. Sethi) 255 and Copy of ledger account of the party showing the cash receipt recorded in books of accounts at PB Page 442 14 52 Sandeep Sharya 1,63,900.00 3,77,774.00 Copy of affidavit of buyer (Sold to Madhu of plot at PB Page 256- Saharya wife of 257 and Copy of ledger Sandeep) account of the party showing the cash receipt recorded in books of accounts at PB Page 443 16 227 Shailesh Gupta 50,000.00 53,062.00 Copy of ledger account of the party showing the cash receipt recorded in books of accounts at PB Page 444. 24 117 Jitandra Kumar 5,100.00 40,038.00 Copy of ledger account Sharma of the party showing the cash receipt recorded in books of accounts at PB Page 447.

38 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT 48 231 R.G. Soni (full 33,333.00 3,90,625.00 117 and Copy of ledger name Rak Govind account of the party Soni) showing the cash receipt recorded in books of accounts at PB Page 456. 51 43 Mashesh Gurjar 3,10,000.00 6,20,000.00 Copy of affidavit of buyer (Sold to Anjana of plot at PB Page 274- Gurjar wife of 275 and Copy of ledger Mahesh Gurjar) account of the party showing the cash receipt recorded in books of accounts at PB Page 458 52 44 Mashesh Gurjar 3,10,000.00 3,10,000.00 Copy of affidavit of buyer of plot at PB Page 276- 277 and Copy of ledger account of the party showing the cash receipt recorded in books of accounts at PB Page 459 55 290 Babita 1,100.00 72,778.00 Copy of ledger account of the party showing the cash receipt recorded in books of accounts at PB Page 460. 57 138 Kishan Chandnani 5,500.00 16,500.00 Copy of affidavit of (Sold to Neelam buyer of plot at PB Page Butani family 278-279 and Copy of member of Kishan ledger account of the Ji) party showing the cash receipt recorded in books of accounts at PB Page 462. 70 93 Anshuman Sharma 3,30,500.00 3,33,330.00 Copy of ledger account of the party showing the cash receipt recorded in books of accounts at PB Page 466. 71 276 Ram Karan Yadav 2,22,205.00 4,44,416.00 Copy of affidavit of buyer (Sold to Chawali of plot at PB Page 292- Devi wife of Ram 293 and Copy of ledger Karan) account of the party showing the cash receipt recorded in books of accounts at PB Page 467 72 277 Ram Karan Yadav 2,22,205.00 4,44,416.00 Copy of affidavit of buyer (Sold to Geeta Devi of plot at PB Page 294- family member of 295 and Copy of ledger Ram Karan) account of the party showing the cash receipt recorded in books of accounts at PB Page 468 39 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT Copy of affidavit of buyer of plot at PB Page 298- 299 and Copy of ledger 74 94 Pinky Garg 2,100.00 5,552.00 account of the party showing the cash receipt recorded in books of accounts at PB Page 470. 80 S-11 Arvind Kumar 56,250.00 1,12,500.00 Copy of affidavit of Sharma buyer of plot at PB Page 306-307 and Copy of ledger account of the party showing the cash receipt recorded in books of accounts at PB Page 474. 82 200 Om Prakash 2,18,736.00 4,72,192.00 Copy of affidavit of Dhama (Solo to buyer of plot at PB Manju Dhamor Page 310-311 and wife of Om Copy of ledger Prakash) account of the party showing the cash receipt recorded in books of accounts at PB Page 475. 83 201 Om Prakash 2,18,736.00 4,72,192.00 Copy of affidavit of Dhama (Solo to buyer of plot at PB Manju Dhamor Page 312-313 and wife of Om Copy of ledger Prakash) account of the party showing the cash receipt recorded in books of accounts at PB Page 475. 84 202 Om Prakash 2,18,736.00 4,72,192.00 Copy of affidavit of Dhama buyer of plot at PB Page 314-315 and Copy of ledger account of the party showing the cash receipt recorded in books of accounts at PB Page 475. 99 318 Vikram Singh (Sold 1,75,000.00 3,50,000.00 Copy of ledger to Priyanka Yadav account of the party family member of showing the cash Vikram Singh) receipt recorded in books of accounts at PB Page 487. 100 319 Vikram Singh (Sold 1,75,000.00 3,50,000.00 Copy of ledger to Priyanka Yadav account of the party family member of showing the cash 40 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT Vikram Singh) receipt recorded in books of accounts at PB Page 488. 108 159 Ashok Kumar 5,100.00 2,38,476.00 Copy of ledger Sharma account of the party Showing the cash receipt recorded in books of accounts at PB Page 490. 110 389 Mohit Singh 1,000.00 26,000.00 Copy of affidavit of buyer of plot at PB Page 327-328 and Copy of ledger account of the party showing the cash receipt recorded in books of accounts at PB Page 492. 119 338 Prabhakar Gaur 1,100.00 1,100.00 Copy of ledger account of the party showing the cash receipt recorded in books of accounts at PB Page 495. 122 251 Deepa Devi Rathi 2,05,100.00 5,41,645.00 Copy of affidavit of buyer of plot at PB Page 335-336 and Copy of ledger account of the party showing the cash receipt recorded in books of accounts at PB Page 496. 124 73 Seema Meena 11,000.00 11,000.00 Copy of affidavit of buyer of plot at PB Page 337-338 and Copy of ledger account of the party showing the cash receipt recorded in books of accounts at PB Page 497 126 97 Vijay Kain 5,100.00 7,775.00 Copy of ledger account of the party showing the cash receipt recorded in books of accounts at PB Page 498. 130 S-7 Bhavna Ray 56,250.00 56,250.00 Copy of affidavit of buyer of plot at PB Page 339-340 and Copy of ledger account of the party showing the cash 41 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT receipt recorded in books of accounts at PB Page 499. 131 S-8 Bhavna Ray 41,750.00 Copy of affidavit of 5,250.00 buyer of plot at PB Page 341-342 and Copy of ledger account of the party showing the cash receipt recorded in books of accounts at PB Page 499. 135 258,259 Kusum Singhal 4,95,100.00 5,77,792.00 Copy of ledger account of the party showing the cash receipt recorded in books of accounts at PB Page 500-501. 140 260, 261 Kusum Singhal 4,95,100.00 8,50,000.00 Copy of ledger account of the party showing the cash receipt recorded in books of accounts at PB Page 505. 141 156 Sushma Agarwal 5,100.00 5,944.00 Copy of affidavit of buyer of plot at PB Page 347-348 and Copy of ledger account of the party showing the cash receipt recorded in books of accounts at PB Page 506. 151 321 Bhagirath Yadav 1,76,67E00 3,55,552.00 Copy of affidavit of buyer of plot at PB Page 357-358 and Copy of ledger account of the party showing the cash receipt recorded in books of accounts at PB Page 511. 152 322 Devilal Kumawat 1,76,676.00 3,55,552.00 Copy of affidavit of buyer of plot at PB Page 359-360 and Copy of ledger account of the party showing the cash receipt recorded in books of accounts at PB Page 512. 153 323 Prabhulal Yadav 3,55,552.00 Copy of affidavit of 1,76,676.00 buyer of plot at PB Page 361-362 and Copy of ledger account of the party showing the cash receipt recorded in 42 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT books of accounts at PB Page 513. 154 324 Vijander Yadav 1,76,676.00 3,55,552.00 Copy of affidavit of buyer of plot at PB Page 363-364 and Copy of ledger account of the party showing the cash receipt recorded in books of accounts at PB Page 514. 155 265 Ramkaran Yadav 1,98,900.00 4,00,000.00 Copy of affidavit of buyer of plot at PB Page 365-366 and Copy of ledger account of the party showing the cash receipt recorded in books of accounts at PB Page 515. 162 361 1,11,108.00 Copy of ledger account Dhan Singh 1,000.00 of the party showing the cash receipt recorded in books of accounts at PB Page 521. 163 344 Nisha Gupta 1,81,800.00 3,62,550.00 Copy of ledger account of the party showing the cash receipt recorded in books of accounts at PB Page 522. 174 345 Naresh Gaager 25,000.00 1,54,552.00 Copy of ledger account of the party showing the cash receipt recorded in books of accounts at PB Page 524. 175 346 Naresh Gaager 25,000.00 1,55,552.00 Copy of affidavit of (Sold to Priya buyer of plot at PB Page Gaagar wife of 379-380 and Copy of Naresh Gaggar) ledger account of the party showing the cash receipt recorded in books of accounts at PB Page 525. 176 264 Banwari Lal 21,000.00 2,00,000.00 Copy of affidavit of Devanda buyer of plot at PB Page 381-382 and Copy of ledger account of the party showing the cash receipt recorded in books of accounts at PB Page 526 43 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT 1,000.00 41,664.00 Copy of affidavit of 178 69 Pramod Jain (Sold Preeti Jain wife of buyer of plot at PB Pramod Jain) Page 383-384 and Copy of ledger account of the party showing the cash receipt recorded in books of accounts at PB Page 527. Sharwanlal 5,100.00 4,00,000.00 Copy of affidavit of 179 263 Kumawat buyer of plot at PB Page 385-386 and Copy of ledger account of the party showing the cash receipt recorded in books of accounts at PB Page 528. 2,375.00 Copy of ledger account 184 Kailash Goyal 1,100.00 157 of the party showing the cash receipt recorded in books of accounts at PB Page 532. 191 70 Kalicharan Jatav 1,100.00 31,248.00 Copy of affidavit of buyer of plot at PB Page 393-394 and Copy of ledger account of the party showing the cash receipt recorded in books of accounts at PB Page 535. 23,500.00 Copy of ledger account 193 188 Anushka Methwani 5,250.00 of the party showing the cash receipt recorded in books of accounts at PB Page 536. 189 Anushka Methwani 5,250.00 73,500.00 Copy of affidavit of 194 buyer of plot at PB Page 395-396 and Copy of ledger account of the party showing the cash receipt recorded in books of accounts at PB Page 537. 195 149 Anushka Methwani 5,250.00 20,000.00 Copy of affidavit of buyer of plot at PB Page 397-398 and Copy of ledger account of the party showing the cash receipt recorded in books of accounts at 44 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT PB Page 538. 23,500.00 - and Copy of ledger Anushka Methwani 5,250:00 196 150 account of the party showing the cash receipt recorded in books of accounts at PB Page 539. Ramvtar Gupta 5,000.00 7,663.00 Copy of affidavit of 197 65 (Sold to Pista Devi buyer of plot at PB wife of Ramvtar Page 401-402 and Gupta) Copy of ledger account of the party showing the cash receipt recorded in books of accounts at PB Page 540. Prabhu Dayal 16,666.00 50,001.00 Copy of affidavit of 199 S-12 buyer of plot at PB Page 405-406 and Copy of ledger account of the party showing the cash receipt recorded in books of accounts at PB Page 542. 1,20,10,823 Total 57,08,521.00

S. No of Plot/Shop Name of the party Cash as per Difference Document Cash entry as No. as per seized Annexure Page submitted in Recorded in per seized records/ party to 13 to 19 support of the books annexure whom sales made explanation if the made to family member 20 221 Binny 5hau 82,630.00 - 82,630,00 Copy of affidavit of buyer of plot at PB Page 258-259 27 219 Mukesh Bugalia 2,06,566.00 - 2,06,566.00 Copy of affidavit of buyer of plot at PB Page 262-263 - 31 214 Arvind Kedawat 2,03,113.00 - 2,03,113.00 - 2,03,112.00 2,03,112.00 32 215 Arvind Kedawat - 44 55 Ganesh Lal 1,65,100.00 - 1,65,100.00 Copy of affidavit of buyer of plot at PB Page 266-267 - 49 46 Manoj Agarwal 10,000.00 - 10,000.00 - Ashish Gupta 500.00 58 92 - 500.00 59 S-27 Chanderkanta 58,050.00 - 58,050.00 Copy of affidavit of buyer of plot at PB Page 280-281 60 Chanderkanta 58,050.00 Copy of affidavit of S-52 - 58,050.00 buyer of plot at PB Page 282-283 63 207 Sameer Kasliwal (Sold 1,05,100.00 - 1,05,100.00 Copy of affidavit of buyer of plot at PB Kamla Jain wife Page 284-285 of Sameer)

46 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT Vinod Kumar - 66 213 1,000.00 - 1,000.00 Sharma 75 341 Arvind Jain 250.00 - 250,00 Copy of affidavit of buyer of plot at PB Page 300-301 79 88 Amit Agarwal 30,100.00 28,013.00 2,087.00 Copy of affidavit of (sold to Seeman buyer of plot at PB Kumari wife of Page 304-305 and Amit) ledger a/c at PB Page 473. 81 96 Arvind K. 84,750.00 - 84,750.00 Copy of affidavit of Sharma buyer of plot at PB Page 308-309 Yogendra Kumar - 95 285 500.00 - 500.00 Panday _07 8 Neeraj Sharma 4,21,000.00 - 4,21,000.00 Copy of affidavit of buyer of plot at PB Page 323-324 112 393 Anil Mahawar 1,60,000.00 21,000.00 1,39,000.00 Copy of affidavit of buyer of plot at PB Page 329-330 and ledger a/c at PB Page 493. 113 284 Dr. Rajeev Jain 2,00,000.00 - 2,00,000.00 Copy of affidavit of buyer of plot at PB Page 331-332 128 333 Sawata Sharma 5,000.00 - 5,000.00 Copy of affidavit of buyer of plot at PB Page 339-340 Shivansh - 144 282 5,500.00 - 5,500.00 Nagepal - Shivansh 145 283 5,500.00 - 5,500.00 Nagepal 147 343 Kavita Gupta 3,000.00 - 3,000.00 Copy of affidavit of buyer of plot at PB Page 353-354 159 268 Bhanu Ram 1,100.00 - 1,100.00 Copy of affidavit of Singh buyer of plot at PB Page 371-372 167 106 Harendra Kumar 5,000.00 - 5,000.00 Copy of affidavit of Sam buyer of plot at PB Page 373-374 172 76 Sandeep Rathi 55,000.00 - 55,000.00 Copy of affidavit of (Sold in the buyer of plot at PB name of Rahul Page 375-376 Mohata family member of Sandeep) 173 101 Rajendra Kumar 1,81,100.00 17,220.00 1,63,880.00 Copy of affidavit of buyer of plot at PB Page 377-378 and ledger a/c at PB Page 550. 187 187 Madhu Bala 5,000.00 5,000.00 Copy of affidavit of buyer of plot at PB Page 387-388 188 347 Reena (Sold to 1,80,000.00 1,80,000.00 Copy of affidavit of Sudhir relative of buyer of plot at PB 47 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT Page 389-390 Reena) 200 335 Prabhu Dayal 16,667.00 - 16,667.00 Copy of affidavit of buyer of plot at PB Page 407-408 Copy of affidavit of 201 336 Prabhu Dayal 16,667.00 - 16,667.00 buyer of plot at PB Page 409-410 202 S-38 Shazaed Hussain 55,000.00 - 55,000.00 Copy of affidavit of buyer of plot at PB Page 411-412 203 S-39 Shazaed Hussain 55,000.00 - 55,000.00 Copy of affidavit of buyer of plot at PB Page 413-414 214 102 Rajkumar 1,000.00 - 1,000.00 Copy of affidavit of Khandalwal buyer of plot at PB Page 425-426 Total 25,80,355.00 66,233.00 25,14,122.00

In this regard, we found that statement of Shri Nitin Kedia was recorded u/s 131 of Income Tax Act during the survey proceedings u/s 133(6) over M/s Kedia Real Estate LLP, Shop No. 8-10, Ganesh Nagar 6- A, Nadi Ka Phatak, Murlipura, Sikar Road, Jaipur. No specific question was raised on page 13-19 of Annexure AS-9 by the survey party. However general statement of Shri Nitin Kedia u/s 131 of I.Tax Act on 52 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT Annexure AS-9 are in answer to question no 14 & 17. The A.O. made addition of Rs. 74,06,624/- on the basis of Pages 21-22 of Exhibit AS-9 which were impounded from the shop no. 8, 9, 10 Ganesh Nagar 6A, Nadi Ka Phatak, Murlipura, Sikar Road, Jaipur.

A) Addition regarding to plots belonging to other Rs. 42,25,018/- B) Addition regarding plots pertaining to assessee Rs. 31,81,606/- Out of total plots noted on the impounded document some plots belongs of the assessee himself and income arose to assessee on sales of such plots offered as capital gain by himself. Regarding the plots belonging to the other the assessee was just acting as a middleman and no brokerage was received or receivable to him on those transactions. Ld CIT(A) held there is no material available on the record the beneficiary owner of such plots was the assessee. The AO herself has not taxed the 53 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT amount recorded in the registered sales deed in the hands of the assessee meaning which she herself admitted the ownership of such plots in the hands of respective seller thus there remains no reason to taxed alleged on money of such plots in the hands of the assessee. The single transaction cannot be taxed in two hands only on presumption and assumption. The society naming Sh. Ganpati Griha Nirmaan Sahkaari Samiti Ltd cannot be treated as pertaining to the assessee group and the same is the independent person in the eye of law including Income Tax Act. The ld CIT(A) had deleted the addition by observing that sales consideration regarding plots belonging to other cannot be sustained in the hands of the assessee. However, he estimated the brokerage alleged to be earned by the assessee on sale amount of these plots @4% of sale amount, which was calculated by him at Rs. 1,12,41,839/-, and brokerage income comes @ 4% of Rs. 1,12,41,839/- is Rs. 4,49,674/-.

58 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT Babita W/o -  Copy of affidavit of the B-275 Vikrant 2,77,000 buyer confirming the Gopi Krishan payment made against sales consideration at APB page 708-709.  Copy of JDA allotment letter in the name of seller of plot at APB page 710.  Copy of registered sales deed of plot at APB page 711-718. A-119 Deal cancelled as admitted by ld AO Total 42,25,018 31,81,606

“11.7 Now I will deal with the addition of 1,48,66,363/- made on account of difference in the accounted and unaccounted sale price of 35 plots as computed by AO. The appellant in the written submission bifurcated the addition of Rs.1,48,66,363/- made by the AO as follow: - A) Cases where the booking cancelled and sold to other party

Rs. 65,47,622/- B) Cases where the sales was made to party mentioned in the seized document Rs.83,18,741/- The AR of appellant submitted that out of addition of Rs.83,18,741/- by AO on a/c of difference in sales rate the addition to the extent of Rs.8,66,280/- has already been made on the basis of cash amount noted on seized document 65 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT Page No. 13 to 19 (PB Pg 67 to 73) and 23 to 28 (PB Pg 76 to 80) thus the same tantamount to double addition.

11.8 In support of the above bifurcation the appellant also submitted the documents to substantiate his claim which was examined and verified. The working and chart of above bifurcation is available in the submission of the applicant which has been reproduced herein above, therefore the same is not reproduced in the finding given in this regard.

Now I decided the matter regarding addition made with regard to each class as bifurcated and mentioned in the para 11.7 above as under: - A) Cases where booking was cancelled: -It is established from the record and documents that in some of the cases the booking in the name of parties, as mentioned in the seized document was cancelled and later on the same was sold to some other party In such cases there is no material on the record that the sales to actual allottee was made at the rate over 85 above to whatever recorded in books of accounts The finding of Id. AO that there is no reason as to why a cancelled booking of a plot will be made at a lower price subsequently to another purchaser is no bearing because each and every transaction from different party is different transaction and the same cannot be compared from each one if the same are made from unrelated parties. In the real estate sector, the terms & condition and negotiation regarding sales vary person to person and the same cannot be compared from each other. Further in several cases the appellant filed the affidavits of the buyers wherein they confirmed the purchase consideration. In absence of any contra material 66 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT gathered as a result of search/survey or as a result of assessment proceedings the evidences submitted by the assessee should have been accepted and in such cases the acceptability of the affidavit cannot be denied by treating the same as self- serving evidences as per my own finding given in the other instances where the unaccounted amount is apparent from seized record. Therefore, the addition made to the extent of Rs. 65,47,622/- on the basis of presumption and assumption is uncalled and the same is directed to be deleted.

B) Other cases where the sales made to party noted in the seized record: - For the cases where the sale was actually made to the parties mentioned in the seized document and difference in sales rate as mentioned in seized record and as recorded in books of accounts, the appellant made a submission that such cash receipt was not received by the appellant. The appellant submitted that such cash receipts may be regarding the amount demanded by the staff/sales team/business associates of the assessee group for JDA and other expenses etc. for which the assessee was not having any concern. The submission of the appellant on this account is not acceptable because the seized document was found from the E-Mail id of the appellant and the same was in relation to amount receipt from various parties against booking of plot. It is not understandable that if some receipts are not attributable to the appellant and the appellant is not having any concern from such receipt than why someone report such receipt to appellant and why the same will be brought in knowledge of the appellant. Further it is impossible to imagine and accept that the appellant will leave the activity regarding the recovery of JDA and other 67 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT expenses etc. on part of its staff/associates more so when it involves the volume of high amount and in case of any failure on part of staff/associate the liability/recovery of such amount by the respective party will be from the appellant only. Thus, the argument of the appellant in this regard is not acceptable and the appellant failed to substantiate nature of these receipts, therefore it can be reliably and logically presumed that such difference in sales rates are unaccounted cash receipt of the appellant which is not recorded in books of accounts. In view of the evidence found in the form of seized record the affidavits submitted by the appellant cannot be considered as evidence because no party will admit the unaccounted payment made by him because the same also lead to them also in trouble. Thus, the affidavit submitted by the appellant are not corroborative evidences but the same are self-serving evidence which cannot be accepted.

11.9 The appellant alternatively argued that even in case of unaccounted sales, the entire receipts cannot be held as taxable income. In such case, only GP should be estimated. In view of various judicial pronouncements including the case laws relied by the appellant the alternative argument of the appellant is acceptable that in case of unaccounted sales only GP on such sales should be estimated and such GP should only be added as income of the appellant. The appellant further contended that addition to the extent of Rs.8,66,280/- has already been made on the basis of cash amount noted on seized document page No. 13 to 19 and 23 to 28, therefore the remaining amount should only be taken 68 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT into consideration. Both these arguments of the appellant are acceptable.

In this case the appellant himself declare the GP 30.60% in the regular books of accounts. Therefore, AO is directed to apply the GP rate of 31% on unaccounted receipts of Rs.74,52,461/- (83,18,741 - 8,66,280) which comes Rs.23,10,263/-. Thus, the addition to the extent of Rs.23,10,263/- is confirmed and the balance addition of Rs.60,08,478/- is deleted.

11.10 In this regard it is to further added that in the case of Shri Gulam Farooq Ansari vs ACIT Hon'ble ITAT, Jaipur bench, Jaipur after giving the finding that entire receipt cannot be added as income applied at the profit rate of 8% by following the decision of DCIT Vs Pahar Ganj Grih Nirman Sahkari Samiti Ltd & Others — IT(SS)A nos. 100,129,130 &.; 133/JP/2003. The GP rate estimated by me is though higher from the GP rate estimated by Hon'ble ITAT in similar cases but the same is based on the GP rate himself declared by the appellant in his books of accounts, therefore in my considered view logically the higher GP rate himself declared by the appellant in his books of accounts should be applied on unaccounted receipts.

Thus out of total addition of Rs.1,48,66,363/- made by the AO on the basis of difference in sales rate mention in seized record and as recorded in books of accounts the addition to the extent of Rs.1,25,56,100/- (65,47,622 + 60,08,478) is deleted and addition to the extent of Rs.23,10,263/- is confirmed.

69 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT 11.11 In view of above against the total addition of Rs.1,74,91,981/- made by AO the additions to the extent of Rs.1,48,22,542/- 22,66,442/- (as Para 11.6 of order) + Rs.1,25,56,100/- (as Para 11.10 of order)) is directed to be deleted and the addition of Rs.26,69,539/- (Rs.3,59,276/- (as Para 11.6 of order) + Rs.23,10,263 (as Para 11.10 of order)) is sustained. Thus the Appellant's Ground No. 3 of the appeal is partly allowed to the extent indicated above.”

“11. I have considered the assessment order, the submissions made by the appellant along with paper book for the year under consideration and all relevant material placed on record.

From examination of seized document (PB Pg 76-80) it reveals that the name of the scheme developed by the appellant naming "Kedi-37 Corridor" is mentioned over the paper and the plot No. mentioned over the paper is also pertaining to this scheme and noting of seized documents in some of the cases is also correlating from the books of accounts of the appellant, therefore there remains no doubt that the seized document pertain to business of appellant and the noting of the paper pertaining to the business affairs of the appellant. The appellant pleaded that the seized documents were neither prepared by the assessee nor found from control of assessee and possession of the assessee and there is no evidence in the sheet that the cash amount noted in this 70 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT sheet was actually received from the plot holders or if received the same was entirely only for plot sales and remitted to assessee is not acceptable because these sheets were found on the E-Mail id of the appellant and if the same would not having any bearing from the actual affairs there was no relevance of preparing such elaborate data. Further the sheets were recovered from the E-Mail id of the assessee, therefore the same cannot be said that the same was not found from the control & possession of the assessee. Further part of the noting of the seized document is also being verified from the books of accounts which can be sufficient to lead the logical conclusion that the noting made in the seized sheets is in relation to actual transaction. Therefore the argument of the appellant is rejected on this count.

On being examining the seized document with the submission and details submitted by the appellant and finding of the AO following facts emerges: - i) In the seized document (PB Pg 76-80) in respect of amount received from customer there are two column "Cash amount" and "Cheque amount". The cheque amount was recorded in books of appellant and this fact has not been disputed by the AO. However the AO presumed that the cash amount noted in the seized document is entirely out of books cash receipt of the appellant. The amount of cheque noted in the seized document and verifiable of the same from books of accounts leads to the conclusion that the 71 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT seized document does not contain entirely the noting of unrecorded transactions. ii) In the seized document (PB Pg 76-80) the plot No. and name of respective Customer against such plot is also mentioned. From examination of the same from books of account, it reveals that in some of the cases the plot was actually not sold to the customer mentioned on the seized document but the same was actually sold to some other party. Meaning which the initially plot was booked in the name of customer mentioned in the seized document and later on due to cancellation of booking the same was sold to some other party. iii) In some of the cases (PB Pg 76-80) the cash amount recorded in the seized document is recorded in books of accounts which is either equal to amount noted in the seized document, or by more amount or by less amount. However the date of cash receipt recorded in the books of account is not commensurate with the date noted in the seized document. The appellant in this regard submitted that the date noted on the seized record is not the date of receipt of amount from customer but the same is date of booking. This fact also elaborated from the fact that in the case of cheque receipts also the date is not same which proves that the date noted in the seized document is date of booking and not date of receipt.

72 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT iv) Some of the entries of cash amount recorded in the seized document (PB Pg No. 76-80) are also repeating on the seized document (PB Pg No. 67-73). The AO made the addition on the basis of cash amount noted on both seized documents thus the same tantamount to double addition. v) On the seized documents (PB Pg 76-80) the rate of sales is also mentioned, therefore in the cases where the sales was finally made to the parties mentioned in the seized document the actual sales amount is subject to determinable from seized record. Therefore on such cases the unrecorded amount received by the appellant against the sales cannot be denied.

11.2 The impugned addition of Rs.1,74,91,981/- was made by ld. AO in two part. One addition of Rs.26,25,618/- (chart 3 at page 10 of the assessment order) on the basis of cash amount noted on the seized document and another the addition of Rs.1,48,66,363/- (chart 4 at page 11 of the assessment order) by computing the amount of sales on the basis of rate of sales mentioned in the seized document and thereby computed the amount of suppressed sales.

11.3 First I will deal with the addition of Rs.26,25,618/- made on the basis of cash amount noted on the seized document No. 23 to 28 of AS-9. The appellant in the written submission bifurcated the addition of Rs.26,25,618/- made by the AO as follows : - 73 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT A) Cases of duplicate entries which are appearing on Page No. 13 to 19 (deal in ground No. 2 above) as well as Page No. 23 to 28

Rs.6,20,880/- B) Cases where the addition already made on the basis of entries noted on Page No. 13 to 19 (deal in ground No. 2 above)

Rs.3,73,100/- C) Cases where the booking cancelled and either re-allotted toother party or stock in trade

Rs.2,64,700/- D) Cases where cash amount mentioned in the seized document is recorded in books of accounts

Rs.2,08,082/- E) Cases where the sales was made to party mentioned in the seized document but the cash amount noted in the sized document is not found recorded in books

Rs.11,58,956/- In support of the above bifurcation the appellant also submitted the documents to substantiate his claim which was examined and verified. The working and chart of above bifurcation is available in the submission of the applicant, which has been reproduced herein above, therefore the same is not reproduced in the finding given in this regard.

74 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT 11.4 Now I decided the matter regarding addition made with regard to each class as bifurcated and mentioned in the para 11.3 above as under: - A & B) Cases of duplicate entries on Page 13 to 19 and Page 23 to 28 of seized documents: - In the written submission the appellant gives the chart of entries which are noted on the seized document Page 13 to 19 as well as Page 23 to 28. The amount and other particulars of such entries are entirely matching with each other, therefore there is no basis to presume that the entries on both the documents are different. Further entries of Rs. 3,73,100/- are partly matching with the entries recorded in seized page 13 to 19. Since I have dealt with such entries while deciding the ground No. 2 taken regarding addition made on the basis of Page No. 13 to 19 and addition made on the basis of such entries has been dealt with therein, therefore addition of such duplicate entries to the extent of Rs. 6,20,880/-+3,73,100/- = 9,93,980/- is tantamount to double addition and the same is directed to be deleted.

C) Cases where booking was cancelled: -It is established from the record and documents that in some of the cases the booking in the name of parties, as mentioned in the seized document was cancelled and later on the same was sold to some other party or being held by appellant as stock. Once it is proved that the booking has been cancelled 75 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT than there remains no reason that the amount so recoded against booking will not be refunded back to the respective party. This fact is also verifiable from the books of accounts on examination of which it reveals that the cases where the booking amount is received through cheque was also refunded back on cancellation of booking. Thus in case of amount received through cash it cannot be presume that the same will not be refunded back to the party. Thus merely that some advance received from party at the time of booking does not constitute the income of the appellant until and unless the same is materialized as sales or forfeited. Therefore there is no logical reason to add the amount received against booking which were subsequently cancelled as income of the appellant. The finding of ld. AO that there is no reason as to why a cancelled booking of a plot will be made at a lower price subsequently to another purchaser is no bearing because in the seized document the amount of sales or rate of sales is not mentioned. Further each transaction from different party is different transaction and the same cannot be compare from each one if the same are made from unrelated parties. Thus the addition to the extent of Rs. 2,64,700/- on these cases is uncalled and the same is directed to be deleted.

76 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT D) Cases where cash amount mentioned in the seized document is fully/partly recorded in books of accounts: - From the examination of the documents submitted by the appellant it reveals that in some of the cases the cash receipt is entirely or partly recorded in books. There is no evidence on record that the cash receipt against such plots recorded in books of accounts is different from the cash receipt as per seized document and there is no material available on record that the appellant received some payment from such parties over and above to whatever recorded in books of accounts. The seized document contains the noting of amount received by cash as well as cheque. The cheque amount is duly recorded in books of accounts and the same fact also admitted by the AO therefore there remain no reason to presume that the cash amount recorded in the seized document is entirely unaccounted receipt. In the light of cheque transactions noted in the sheet it can be considered that part of the amount noted in the sheet which are being verified from books of accounts are recorded transactions. Admittedly there is difference in the date noted in the seized document and date of receipt in books of accounts but as submitted the date noted on the seized record is not the date of receipt of amount from customer but the same is date of 77 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT booking. This submission of the appellant is acceptable because of the reason that in the case of cheque receipts also the date is not same which proves that the date noted in the seized document is date of booking and not date of receipt. In view of above the cash receipt to the extent of Rs. 2,08,082/- found recorded in books of account cannot be added as income of the appellant and hence the same is directed to be deleted.

E) Other cases where the sales made to party noted in the seized record and cash mentioned in the seized document is not found recorded in books: - For the cases where the sale was actually made to the parties mentioned in the seized document and the cash recorded in the seized document is not found recorded in books of accounts the appellant made a submission that such cash receipt was not received by the appellant. The appellant submitted that such cash receipts may be regarding the amount demanded by the staff/sales team/business associates of the assessee group for JDA and other expenses etc. for which the assessee was not having any concern. The submission of the appellant on this account is not acceptable because the seized documents were found from the E-Mail id of the appellant and the same was in relation to amount receipt from various parties against booking of plot. It is not understandable that if 78 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT some receipts are not attributable to the appellant and the appellant is not having any concern from such receipt than why someone report such receipt to appellant and why will the same be brought in knowledge of the appellant. Further it is impossible to imagine and accept that the appellant will leave the activity regarding the recovery of JDA and other expenses etc. on part of its staff/associates more so when it involves the volume of high amount and in case of any failure on part of staff/associate the liability/recovery of such amount by the respective party will be from the appellant only. Thus the argument of the appellant in this regard is not acceptable and the appellant failed to substantiate nature of these receipts, therefore it can be reliably and logically presumed that such receipts are unaccounted cash receipt of the appellant which is not recorded in books of accounts. The affidavits submitted by the appellant cannot be considered as evidence because no party admitted the unaccounted payment made by him because the same also lead to them also in trouble. Thus the affidavit submitted by the appellant are not corroborative evidences but the same are self-serving evidence which cannot be accepted.

11.5 The appellant alternatively argued that even in case of unaccounted sales, the entire receipts cannot be held as taxable income. In such case, only GP should be estimated.

79 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT In view of various judicial pronouncements including the case laws relied by the appellant the alternative argument of the appellant is acceptable that in case of unaccounted sales only GP on such sales should be estimated and such GP should only be added as income of the appellant. In this case the appellant himself declare the GP 30.60% in the regular books of accounts. Therefore, AO is directed to apply the GP rate of 31% on unaccounted receipts of Rs.11,58,956/- which comes Rs.3,59,276/-. Thus, the addition to the extent of Rs.3,59,276/- is confirmed and the balance addition of Rs.7,99,680/- is deleted.

In this regard it is to further added that in the case of Shri Gulam Farooq Ansari vs ACIT Hon’ble ITAT, Jaipur bench, Jaipur after giving the finding that entire receipt cannot be added as income applied at the profit rate of 8% by following the decision of DCIT Vs Pahar Ganj Grih Nirman Sahkari Samiti Ltd 85 Othrs - IT(SS)A nos. 100,129,130 & 133/JP/2003. The GP rate estimated by me is though higher from the GP rate estimated by Hon'ble ITAT in similar cases but the same is based on the GP rate himself declared by the appellant in his books of accounts, therefore in my considered view logically the higher GP rate himself declared by the appellant in his books of accounts should be applied on unaccounted receipts.

11.6 Thus out of total addition of Rs.26,25,618/- made by the AO on the basis of cash amount noted on seized document the addition to the extent of Rs.22,66,442/- (6,20,880 + 3,73,100 + 2,64,700 + 2,08,082 + 7,99,680) is 80 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT deleted and addition to the extent of Rs.3,59,276/- is confirmed.”

81 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT a) S.No. 2 of impounded page is in respect to plot no 221, where amount of Rs. 82630/- mentioned in column “Cash Amount”. The ld AO made the addition of this amount under Chart-3 at pg 10 of her order. b) Then she worked out the sale amount of this plot by extrapolating the rate of Rs. 5950/- and worked out the sale amount at Rs. 8,26,336/-. She compared this amount from the amount of Rs. 4,10,000/- recorded in books and worked out the difference of Rs. 4,16,335.85/- which she added as income of the assessee under Chart-4 at pg 11 -12 of her order c) No deduction was given for the amount already added in (a) above.

38. We further observe that while making the addition the AO grossly made the following further errors which are contrary to the documents submitted by the assessee: - i) Duplicate entries impounded page 13-19 (APB 67-73) as well as in impounded page 23 to 28 (APB 78A-80) In some of the cases the amount written in cash column of page No. 23 to 28 (APB 67-73) was also appearing at Page No. 13 to 19 (APB 78A-80) but the ld. AO made the addition of such amount on the basis of both the papers which tantamount to double addition. ii) Cash receipts already recorded in books against the same plots:- While adding the amount mentioned in cash column of page No. 23 to 28, the cash receipts already recorded in books of accounts (as and when the same was received by the assessee) has not been considered and eliminated but the same was treated as income of the assessee and addition was made. There is no reason to presume that the cash amount recorded in the impounded document is over and above to cash recorded in books of accounts. iii) Booking cancelled and advance was refunded.

82 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT The amount under “cash column” in the cases where the plots were not sold to the persons whose name is appearing in the sheet (booking was cancelled) is also added as income of the assessee. There is no reason to add the amount of such plots as in such cases. In such cases no amount was received from these persons as committed by them and even if it is presumed that amount was received against booking of such plots the same would have been refunded back to the party on cancellation of booking. iv) Extrapolation of sale value of other plots by applying the rates of the plots mentioned in impounded papers. The ld. AO extrapolated the sales recorded in books of accounts by applying the rate mentioned in the impounded document but while doing so the extrapolation was made in such cases also where the booking in the name of the party mentioned in the impounded sheet was cancelled and the same was later on sold to some other party. Further while doing such extrapolation the amount of addition already made on account of amount mentioned under “cash column” in the impounded sheet was not deducted which tantamount to double addition. v) In support of correctness of sales recorded in books of accounts the affidavits of several parties were given but no heed was given by ld. AO on such evidences.

Regarding addition of Rs. 26,25,618/-: - The reconciliation chart is as under:- Particulars Amount Total of figure mentioned on impounded paper 23-28 of 26,25,618 AS-9 Less Duplicate Entries impounded page 13 to 19 of AS-9 as -6,20,880 well as 23-28 of AS-9 (Tabulated at page 29-30 of order of CIT(A)) Less Addition already made on the basis of 13-19 (Tabulated -3,73,100 at page 31-33 of order of CIT(A)) Less Booking Cancelled –either re-allotted to other party or -2,64,700 in stock (Tabulated at page 30-31 of order of CIT(A)) In several cases the booking mentioned in the sheet was cancelled, therefore there is no reason to add the amount of such plots as income of the assessee as in such cases if any amount is presumed to have been received against booking of such plots, then upon cancellation of booking, the same will have to be refunded back to the party. Less Cash Amount mentioned in the impounded paper -2,08,082 recorded in books of account In several cases the cash amount mentioned on the sheet is completely recorded in books of accounts of the assessee as and when the same was remitted to the assessee, therefore the cash amount duly recorded in books of accounts against such plot cannot be treated as income of the assessee. Further there is no reason to presume that the cash amount recorded in the impounded document is over and above to cash recorded in books of accounts. (50000+55000+4082+49500+49500) (S. No 63, 66, 73, 46, 47 mentioned in table at page 31-32 of order of CIT(A)

84 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT Balance Balance 11,58,956 In some of the cases the sales was actually made to the same party as noted on the impounded document but the cash receipt is either not recorded in books or recorded by lesser amount. In such cases the cash as reported on the sheet was never received to the assessee (Tabulated at page 31-33 of order of CIT(A)

Regarding addition of Rs. 1,48,66,363/-: The reconciliation chart is as under:- Particulars Amount Total of figure of unaccounted sale worked out by ld AO 1,48,66,363/- on the basis difference in rate as mentioned on impounded paper 23-28 of AS-9 and as per books of account. Chart 4 of AO at pg 11-12 Less Not sold to the persons as mentioned in impounded -65,47,622 documents - Booking Cancelled –either re-allotted to other party or in stock (Tabulated at page 35-6 of order of CIT(A)) In several cases the booking mentioned in the sheet was cancelled, therefore there is no reason to add the amount of such plots as income of the assessee as in such cases if any amount is presumed to have been received against booking of such plots, then upon cancellation of booking, the same will have to be refunded back to the party. Less Addition already made on the basis of amount -8,66,280 mentioned under column “Cash Amount” of impounded pg 23-28 Under chart 3 (S.No 2, 11, 69, 70,71) pg 10-11 of Astt Order (Tabulated at page 38-39 of order of CIT(A)) Balance Balance 74,52,461 In some of the cases the sales was actually made to the same party as noted on the impounded document but the cash receipt is either not recorded in books or recorded by lesser amount. In such cases the cash as reported on the sheet was never received to the assessee (Tabulated at page 38-39 of order of CIT(A)

85 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT 40. It was also contention of the ld AR that no addition can be made on the basis of impugned impounded papers. Detailed submissions was as under:- It is apparent that the impounded sheet is not prepared for the actual sales i) made by the assessee. It is apparent that in cases of many plots, the sales were not executed to the same persons whose name is appearing in the impounded sheets. Therefore, on the basis of booking sheet prepared by the sales team, it cannot be presumed that the transactions were actually materialised inall cases and at the same rate as mentioned in the impounded documents. This sheet was prepared for tentative booking by sales team and at the stage of final sales, the picture changed completed. The sales team projected the rates to the prospective buyers including construction of boundary wall and room and JDA charges. This is done by sales team just to avoid dispute in future as regard possession as the township scheme of assessee located in mofussil area. Later on at the stage of final sale, some of the buyers refused to purchase the plots as they found the rate quoted by sales team is much higher than the market rate. Some of buyers negotiated the rates and purchased the plots without construction and JDA charges and at the much lower rate. ii) Thus in view of above this is to submit that the amount shown under the column "Cash Amount" in the impounded document in respect of above mentioned plots was never received to the assessee. Whatever cash was received to the assessee against the sales of plot is duly recorded in books of accounts and except to that no cash was received to the assessee. The assessee filed the affidavit in most of the plot holders and the sale consideration received to assessee against sales of plots is duly verifiable from such affidavits. iii) Further the impounded document also does not speak that the cash amount mentioned on such paper was actually received by the assessee. Thus on the basis of this impounded document only presumption and assumption can be drawn and it is admitted fact that no addition can be made on the basis of presumption and assumption. Further contra to that the assessee submitted the affidavits of several plot holders which supports the amount recorded by the assessee in books of accounts.

86 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT iv) The ld. AO extrapolated the sales of plots by presuming that the same were sold by the assessee at the rate mentioned in the above said impounded paper. Furthermore, Ld AO failed to appreciate that the consideration received on sale of plots was higher as compared to stamp duty valuation and there was no reason to disbelieve the actual consideration received and resort to presumption and assumption in arriving at erroneous conclusion of suppression of sales. v) It is relevant to mention here that during the course of assessment proceedings the assessee submitted the affidavits of several buyers who purchased the plots in the scheme of assessee group and out of that the ld. AO examined to some of the plots holders by issuing the summons to them (PB pg 801-808/APB Vol IV). The ld. AO did not issue any summon to other parties, therefore the sworn affidavit submitted by the parties confirming the amount paid to the assessee group for purchases of plot should be accepted as admissible evidence. The AO has not rebutted the contents of the affidavits. The contents of affidavits, which are not vague should be accepted correct. Reliance is placed on the following decisions:- (i) Mehta Parikh & Co v CIT [1958] 30 ITR 181 (SC) (ii) Dilip Kumar Rao Vs CIT (1974) 94 ITR 1 (Bom); (iii) Malwa Knitting Works Vs CIT (1977) 107 ITR 379, 381 MP vi) It is an admitted fact that in the case of search assessment the additions can only be made on the basis of evidences and if there is no evidence of receipt of sales consideration over & above to whatever recorded in books of accounts than in such case no addition can be made on the basis of presumption, assumption and guess work. Also the judgment of Hon’ble Apex Court in the case of CIT V/s Padamchand Ramgopal (SC) 76 ITR 719 and Allahabad High Court in CIT Vs Mahesh Chand 199 ITR 247 very clearly state that no addition in subsequent years can be made merely because some addition has been made in earlier years. Similarly in our case no adverse inference can be drawn on extrapolation, assumption, presumption and on guesswork ad infinitum especially when the department has carried out intensive search operations and as the result of this search no incriminating material or undisclosed assets/expenses were found to support the on money in such plots. The actual realization against the sale value of the plots is based on many factors such as need of money (for example if a person is in urgent need of fund, he will sale the plots at whatever available price), bargaining, location of plots, possibility of increase in trade by mouth publicity of the prospective buyers, market conditions etc.

87 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT Reliance is also placed on the following decisions:- (i) The ITAT Jaipur Bench has held in & ITO/790/JP/07 in Badri Narain Modi Vs. DCIT an reported in Tax World volume 39 (April 2008) Page 105 that unless department has any material in its possession to establish that a higher consideration has been paid than the disclosed amount no addition can be made. (ii) Hon’ble Rajasthan High Court in the case of CIT Vs. Bhanwarlal Murwatiya reported in CTR 215 page 489 (2008) has held as under :- “The question as to what was the price of the land at the relevant time, is a pure question of fact. Apart from the fact, that even if it were to be assumed, that the price of the land was different that the one, recited in the sale deed, unless it is established on record by the Department, that as a matter of fact, the consideration, as alleged by the Department, did pass to the seller from the purchase, it can not be said, that the Department had any right to make any additions.” (iii) ACIT Vs Rustom Soli Sethna ITA No. 5086/M/2014 dated 22.06.2017 Hon’ble ITAT has held that:- “6. We have considered rival contentions and carefully gone through the orders of authorities below. From the record we found that AO has made addition on the plea that various flats booked and sold by the assessee was at a different price, even though situated in the same building. The AO found that flat No.701 having area of 1387 sq.ft was agreed to be sold on 23/06/2008 and for which payment was received by the assessee during the F.Y.2009-10 was at Rs.41,456/- per.sq.ft, whereas flat No.702 having area of 710 sq.ft which was agreed to be sold on 22/06/2009 at a rate of Rs.29,577 per sq.ft. Similarly other flats on the 8th and 9th floor was sold by the assessee at a lower price. The CIT(A) has given due justification with regard to the prevailing rate during the F.Y. 2008 vis-à-vis 2009. The CIT(A) observed that sales price declined by the assessee was not below price declared by the State Government of Maharashtra or below the market price. The AO has simply applied deferential in the rates of booking of flat No.701 and other flats for arriving at the actual booking rate for all the flats other than falt No.701. We also found that the decision of the Tribunal in case of Diamond Investment and Properties relied on by the AO was on different facts in so far as in the case of Diamond Investment Flats were sold by the assessee to the related parties, however, in the case 88 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT of above all the flats were sold by the assessee to the parties not related to the assessee. After giving detailed justification, the CIT(A) has applied the proposition laid down by ITAT Mumbai Bench in case of Neelkamal Realtors & Erectors India (P) Ltd reported In (2013) 38taxman.com 195. The facts of the case were very much similar to the assessee's case. The issues before the Tribunal in the above case was whether since assessee tendered explanation in support of charging lower price in respect of some of the flats sold by it, which AO failed to controvert, addition is sustainable. The ITAT held that addition in entirety is liable to be deleted. The operative part of the order is as follows:- "It can be observed from the chart made by the AO after page no. 2 of the assessment order that he made addition by considering the rate another flat sold by the assessee vis-a-vis the rate at which flat under view was sold. For example, first item in the table is flat no. 2501 with area of 2645 sq. feet and sale consideration at Rs. 65.24 lakh. First payment for this flat was received by the assessee on rate charged for flat no. 2702 sold by the assessee at a price higher by Rs. 649 per sq. ft. The assessee gave reason for charging low price in the terms that the buyer of flat no. 2501 assisted in promoting assessee in respect of which the AO has made addition by comparing the rate charged with the higher rate charged in respect of other sale transactions. The assessee gave justification for lower rate in respect of each flat, such as, higher down payment; no hard bargain by the buyer; buyer is an RI; party was tenant who helped in settlement with other tenants; different amenity values; demand for a higher or lower flat; higher or lower carpet area etc. The AO brushed aside these explanations given by the-assessee qua each flat sold at a lower rate by simply mentioning that such reduction was not justifiable or there was no explanation for lower rate or fabricated reasoning etc. Such rejection of the asseesse's explanation in one stroke is wholly impermissible. If the AO was not satisfied with the assessee's explanation for charging a lower rate in comparison with a higher rate of other flats, he was required to bring on record certain material to demonstrate that the assessee, in fact, charged such higher rate. The rejection of assessee's explanation for charging a lower sale price cannot be jettisoned without positively showing that the assessee received a higher sale price. The Hon'ble Supreme Court, in context of section 52, in K.P Varghese v. ITO [198] 131 ITR 597/7 Taxman 13, has held that: Sub-s. (2) of s. 52 can be invoked only where the consideration 89 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT for the transfer has been understated by the assessee or, in other words, the consideration actually received by the assessee in more than is declared or disclosed by him and the burden of proving such an understatement or concealment is on the Revenue. Sub-(2) has no application in the case of an honest and bona fide transaction where the consideration received by the assessee has been correctly declared was subsequently reiterated in CIT v. Shivakami Co. (P) Ltd {1986} 159 ITR 71/25 Taxman 80K (SC) Similar view has been expressed by the Hon'ble Supreme Court in CIT v. Godauari Corpn.Ltd. {1993} 200 ITR567/68 Taxman 344by holding that the burden is on the Revenue to prove under-statement of the consideration. The following observations of the Hon'ble Supreme Court from this case merit mention Section 52(2) of the IT Act, 1961 can be invoked only where the consideration for the transfer of a capital asset has been understated by the assessee or in other words the full value of the consideration in respect of the transfer in shown at a lesser figure than that actually received by the assessee and the burden of proving understatement or concealment is on the Revenue; and the sub-section has no application in the case of bona fide transaction where the consideration received by [1979] 117 ITR 371 has held that the ITO cannot fix higher sales price without any evidence. The mere to the conclusion that the assessee did charge a higher price. A survey of aforementioned judgments manifests that there is no low which obliges a trader to make the maximum profit on sales. It is trite that the onus to claim that the apparent is not real is one who so claims. Where the Revenue requires the assessee to show as to why there is a difference in the price charged from two customers and the assessee offers some plausible explanation, no addition can be made simply by holding that this explanation is fanciful. There must be something concrete to show that the version given by the assessee is incorrect. The AO cannot simply make addition on hypothetical basis by presuming a higher sale price by simply rejecting the assessee's explanation without cogent reasons. If this procedure is resorted, then it would amount to taxing hypothetical income instead of real income, which is obviously impermissible unless an express provision is enshrined in this regard. Coming back to the facts of the instant case, we find that the assessee tendered explanation in support of charging lower price in respect of some of the flats sold by it. The AO not only simply refused to accept such explanation without any convincing reason but also did not bring any material on 90 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT record to show that the assessee in fact received higher price that declared. Under such circumstances, we are of the considered opinion that the action of the authorities below in this regard cannot be with effect from 2014-15 in respect of transfer of land or building or both which is not a capital asset. It is only during the prevalence of this provision that the Revenue has been discharged from the burden of proving that the sale price of land, or building of both is understand. Straight way, the declared sale consideration can be substituted with the stamp duty value, if it less. In the period anterior to the application of this provision, the burden is squarely on the Revenue to positively show that the sale price charged was actually more than that declared. We are confronted with a situation in which the assessee gave reasons for charging lower price in respect of some of the flats sold, which the AO failed to controvert. In such a situation, there can be no reason to me of sustain any such addition. We, therefore, order for the deletion of this addition in entirely. This ground is allowed. "

7. The detailed finding recorded by CIT(A) has not been controverted by learned AR, accordingly, we do not find any reason to interfere in the order of CIT(A) for deleting the addition made on account of estimated sales price by disregarding the actual sale price shown by the assessee.

92 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT “17. I have considered the assessment order, the submissions made by the appellant along with paper book for the year under consideration and all relevant material placed on record.

17.2 From the perusal of seized document it reveals that the seized document under consideration is in relation to purchases of Mobile phone. The appellant is living in joint family with his parents and brother. It was claimed that payment of the same was made out of withdrawals made for household expense by the appellant and his family members. In support of the household expenses the appellant submitted the ITR and Balance sheet of the family and from examination of such details it is found that the total withdrawal of the family towards the household expenses was of Rs.9,19,207/- (apart from the withdrawal of Shri Shiv Kumar Kedia father of appellant) which is quite sufficient to cover up the expenditure of this much petty amount spend on the mobile so purchased as per seized document. Therefore, in my considered opinion the Id. AO failed to controvert to the submission of the appellant. Thus, the AO is directed to delete the addition of Rs.71,500/-. Thus, the appellant's Ground No. 5 of the appeal is allowed.”

42.1 The revenue is in further appeal before us.

42.2 We have considered the rival contentions and found from the record that in support of household expenses, the assessee has submitted income tax return and balance sheet of the family members before the A.O. As per the balance sheet and ITR, we observe that there 93 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT was a total withdrawal of the family members with regard to household expenses was Rs. 9,19,207/-. Looking to the household withdrawal of Rs. 9,19,207/-., the expenses of Rs. 71,500/- so incurred by the assessee on purchase of mobile phone is duly explained. Furthermore, detailed finding to this effect has also been recorded by the ld. CIT(A) at para 17.2 of his appellate order which has not been controverted by the ld DR by bringing any positive material on record. Accordingly, we do not find any reason to interfere in the order of the ld. CIT(A) in deleting the addition of Rs. 71,500/- made by the A.O. on account of purchase of mobile phone as found during the course of search.

42.3 In the result, appeal of the revenue is dismissed whereas appeal of the assessee in allowed in part in terms indicated hereinabove.

In the course of assessment U/s 153A of the Act, the A.O. made addition U/s 69C of the Act amounting to Rs. 4,90,666/- being unexplained expenses, which was deleted by the ld. CIT(A) to the extent of Rs. 82,185/-. An addition was also made by the A.O. on account of alleged unaccounted business income earned on sales of plot at Ganesh Vihar amounting to Rs. 1,27,50,000/-, which was deleted by the ld. 94 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT CIT(A) after having a detailed observation at paragraphs No. 8 to 8.5 at pages 15 to 18 of his appellate order, which are as under:

“8. During the course of search on 19.11.2016 on Kedia group certain loose documents were seized from the premises of Shri Harpal Singh, whose premises was covered on the same day. The scanned copy of document is found on page 4 86 5 of the AO order. These two seized documents contain some transaction about sale of plot no. 7 & 12. This document contains cheque and cash transaction. During the course of search subsequently statement of Shri Harpal Yadav was recorded. The statement of buyers of these plots was also recorded wherein it was confirmed such plot was transacted through Kedia and payments were made to them. Relevant extract of statement of Shri Harpal Yadav 86 Kailash Bhutia 86 Jitendra Bhutia, the buyers, is also reproduced in the AO order from page 4 to 7. On the basis of this statement the AO concluded that the appellant has transacted in the plots and thus proceeded to add Rs.1,27,50,000/- as unaccounted income of the appellant for the relevant A.Yr. 8.2 I have perused the written submissions submitted by the Ld. A/R and the order of AO. I have also seen and perused the scanned seized document in the order of the AO. I have also gone through various judgments cited by the Ld. A/R and those contained in the order of AO. I am not in agreement with the contention of AO for the following reasons: The appellant has at the very outset has submitted that he is not related to plot no. 7 & 12 which is reflected in the seized document scanned on page 5 of AO order. Learned A/R has submitted that plot no. 12 was sold to Shri Vijay on 8.11.2016 and was registered on the same date, about 11 days before the date of search. The Ld. A/R submitted this plot is unsold till date. The Ld. A/R submitted that the cheque transaction of Rs. 30,50,000 on page 7/ Exh AS2 does not relate to plot no. 7 8s 12. In fact it is sum total of consideration for plot no. 8 & 13. Same 95 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT can be verified from APB page no. 340 8s 350. The Ld. A/R admitted that for these 2 plots the appellant played a mediator and in fact these two plots are bought by Shri J. Bhutia 8s S.P. Bhutia, in joint name. The Ld. A/R submitted that the cheque consideration is paid to the respective seller as is evident from the sale deed & hence naturally the cash consideration is also pertaining to the respective sellers. That the addition is based on the statement of Shri Harpal Yadav and this statement is given in context of the seized document which is reproduced in the order. The Ld. A/R on the other hand has submitted overwhelming evidence that for these plots the appellant was not the buyer or seller. In fact for plot 12 the original allotted to the appellant & then it was transferred in the name of Vijay Kumar vide sale deed dated 08- 11-2016 which is prior to the date of search. That for plot no. 8 86 13 the Ld. A/R has filed evidences that appellant is not the owner of the plot at the very outset. Plot no. 8 86 13 were sold by Shri O.P. Khandelwal 86 Shri S.P. Agarwal respectively. Copies of allotment letter from LIDA have been placed on record. The transaction of sale and consequent capital gain is reflected in the respective return of income. 8.3 Following are the legal contention taken by the Ld. A/R in Ground 1.

2. That copies of seized document are not provided to the appellant, same were only shown to the appellant during the course of assessment proceedings 3. That the opportunity of cross examination was not given in respect to the Shri Harpal Yadav & Shri Jitender Bhutia & Shri S Bhutia. 8.4 Coming to the legal contention taken in the ground my attention is drawn to section 142(3) of the Act. The same reads as under: 143(3) The assessee shall, except where the assessment is made under section 144, be given an opportunity of being heard in 96 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT respect of any material gathered on the basis of any inquiry under sub-section (2)[or any audit under sub-section (2A)] and proposed to be utilised for the purposes of the assessment. As per section there it is obligatory on the part of AO to provide the copy of material which is used against the appellant. It is not done in the present case. 8.5 That being so I am not inclined to sustain the addition of Rs.1,27,50,000/-in the hands of appellant. Since the appellant has conceded that he has played a role of mediator in the sale of 2 plots a fair amount of commission shall be added in the hand of appellant. The commission is taken 4% of the total sale consideration of Rs.1,58,00,000/-, which comes out to be Rs.6,32,000/-. On the facts and in the circumstances of the case, the AO is directed to delete Rs.1,27,50,000/- and tax a sum of Rs.6,32,000/-. Ground No. 2 is partly allowed.”

97 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT 45. While making addition, the AO referred in assessment order page 7 & 8 of Exhibit AS-2 found and seized from the possession of Shri Harpal Yadav during the independent search proceeding on 19-11-2016 at the residential premises of Shri Harpal Yadav. The copy of the impugned seized paper was not given to assessee.

“In continuation of our this submission we further submit that the copies of statements of various persons replied by your honour in your show cause notice has not been provided to the assessee and the statements of these persons cannot be used against the assessee as the same were recorded behind the back of the assessee.” Thus as per the natural justice once the assessee had objected to use the statements of the persons against the assessee which has been recorded behind the back of the assessee than in such a case it is duty of AO to provide the copies of such statements to the assessee and provide the opportunity of cross examination of such witnesses. In the case of assessee the AO neither provided the copies of statements of such persons nor provided the opportunity to cross examination to such persons thus the entire additions made on the basis of such statements is not tenable in the eye of law for being gross violation of natural justice.

101 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT ii) Commissioner of Income Tax v. Ashwani Gupta, 2010 322 ITR 396 (Del); iii) H.R. Mehta V. Assistant Commissioner of Income Tax 387 ITR 561(Bombay); iv) M/s Kota Dall Mill in ITA 997/JPR/2018, ITA 998/JPR/2018, ITA 999/JPR/2018, ITA 1000/JPR/2018, ITA 1119/JPR/2018, ITA 1001/JPR/2018 and ITA 1002/JPR/2018 for A.Y 2010-11 to A.Y 2016-17.

102 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT 53. From the documents so submitted by the assessee and the material relied by the AO the following facts emerged: - i) The assessee is neither the seller of the plots nor the beneficial owner of such plots, therefore the receiving of any consideration against sales of plots under consideration to the assessee does not arises. ii) The name of the assessee or any scheme is not mentioned on the seized papers. iii) The plot No. 7 and 12 is mentioned on the papers seized from the residence of Shri Harpal Yadav while the plot No. 8 and 13 were sold to Shri Bhutia Ji by Shri Om Prakash Khandelwal and Shri Satyaprakash Agarwal in the scheme naming “Shri Ganesham Vihar”. iv) On the documents seized from the possession of Shri Harpal Yadav the name of the assessee or his family members or his business concerns is not mentioned. There is nothing in seized record to presume that the cash mentioned in the seized document was received by the assessee. v) In the statements Shri Harpal Yadav has also admitted to have some other dealing with Shri Bhutia Ji. vi) Further except to the statements of the persons relied by ld. AO no any other evidence is in possession of ld. AO to prove her allegation that the amount found written in the documents seized from Shri Harpal Yadav was received to the assessee. vii) The assessee has submitted the copy of ITR of Shri Om Prakash Khandelwal and Shri Satyaprakash Agarwal of AY 2016-17 wherein the capital gain on sales of plot A-8 & A- 13 has been reflected by them in their computation of total income.

103 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT viii) The ld AO has not made any inquiry from the owner of the plots i.e. Shri Om Prakash Khandelwal and Shri Satyaprakash Agarwal.

1. CIT Vs Daulat Ram Rawatmull 87 ITR 349 (SC) 2. Jaydayal Poddar vs. Bibi Hazra, AIR 1974 SC 171 Hon’ble Supreme Court has held that it is well settled that the burden of proving that a particular sale is Benami and the apparent purchaser is not the real owner, always rests on the person asserting it to be so. 3. Prakash Narain Vs CIT 134 ITR 364 (ALL) 4. Lal Chand Agarwal vs. ACIT 21 Tax World 213 Hon’ble ITAT Jaipur Bench has held that to hold a person as benami of another, one ought to have concrete evidences in contrast to sheer presumptions and suspicion and in such cases initial burden lies on revenue; 5. ITO vs. Shree Ladani Family Trust 21 Tax World 351 Hon’ble ITAT Jaipur Bench has held that burden to prove Benami nature heavily lies on the department. 6. DCIT vs. PSM Family Trust 21 Tax World 553 To hold benami Character of a business, it is essential to prove interlocking, interlacing and inter controlling between the two business. 7. Ravi Mathur& Others vs. ACIT 22 Tax World 245 Held that burden to prove Benami nature of transaction heavily lies on the department. 8. Ramjas Nawal vs. ACIT 22 Tax World 126 Held that A person cannot be held to be Benami of assessee simply because the vehicle along with its registration papers were recovered from the possession of assessee in absence of some positive evidence.

105 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT 9. S.S. Gupta vs. ACIT 22 Tax World 337 Held that to hold Benami character of a business, it is essential to prove interlocking, interlacing and inter linking between the two or more businesses.

11. ITO vs. Suresh Chand Gupta 26 Tax World 224 held that burden to bring material evidence on records to prove a person to be benami of another heavily lies on the revenue.

17. Radhey Shyam Ojha vs. ACIT 32 Tax World 81 held that it is the duty of AO to bring on record sufficient material to prove Benami nature.

106 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT 55. In view of the above discussion and the findings recorded by the ld. CIT(A), we do not find any reason to interfere in the order of the ld. CIT(A) in deleting the addition.

109 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT Brief facts of the case are same as we have already quoted hereinabove while dealing with the appeal for the A.Y. 2015-16. During the course of assessment U/s 143(3) read with Section 153A of the Act, for the A.Y. 2017-18, the A.O. has made addition in respect of unexplained cash of Rs. 13,52,328/- found during the course of search. The alleged unaccounted income on account of alleged unexplained cash found during the course of search was added by the A.O. by applying the provisions of section 69A r.w.s. 115BBE of Income Tax Act, 1961. The addition was made by the A.O. by rejecting the submission & evidences submitted by the assessee.

“8. I have considered the assessment order, the submissions made appellant along with paper book for the year under consideration and relevant material placed on record. The cash of Rs.13,52,328/- was found the residence of the assessee. During the course of search, statement of Nitin Kedia brother of the assessee was recorded u/s 132(4) wherein he stated in answer to question no 8 of statement dated 20/11/2016 that the cash of Rs.65,068/- belongs to his late grandfather Shri Sunder Mal Kedia, Rs. 4,00,000/- is unclaimed cash found at Sanganer Office belong to some broker/party and Rs.8,87,260/- belongs to family members and duly verifiable from books of account. 8.2 From perusal of assessment record it reveals that the addition was made merely for the reason that during the course of search the appellant group could not produce the cash book and further the same was not produced during post search proceedings also. For non-producing the 110 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT cash book during search and post search proceedings the appellant submitted that the books of accounts of the assessee group was maintaining in Tally software of accounting which was running on the laptop of accountant of the assessee group. The assessee group could not have contacted from the accountant as on the date of search; therefore cash book and other books of account were not submitted at the time of search. Further during the course of post search proceedings no explanation was called from the assessee group in this regard. 8.3 However during the course of assessment proceedings the appellant produced the cash book before the AO along with the books of accounts supported with bank statements, bills 86 vouchers and documents wherein no defects were pointed by the AO. Further the Income Tax returns of AY 2016-17 was already filed before the search and the cash balance was also available as per balance sheets of such year. It is relevant to mention the appellant group is engaged in the business activities and for the purpose of day to day requirement they have to maintain the cash balance. Further the appellant group is also making the withdrawal for household expenses. Therefore, by no stretch of imagination it cannot be presumed that as on the date of search the appellant group would not having any cash balance as per their books of accounts. 8.4 In view of above finding, respectfully following the judgements on which the reliance was placed by appellant and the fact that as on the date of search the sufficient cash balance was available in the cash book of appellant group which was produced before AO and the AO has not pointed out any defects therein, therefore the impugned addition of Rs.13,52,328/- made for no valid reasons deserves to be deleted and it is directed to delete the addition of Rs.13,52,328/-. Thus, the appellant's Ground No. 2 of the appeal is allowed.”

111 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT 61. We have considered the rival contentions and carefully gone through the orders of the authorities below and found from the record that the cash of Rs. 13,52,238/- was found at the residence of assessee. During the course of assessment proceedings, the assessee submitted to AO that the cash found during the course of search pertains to Shri Nirmal Kumar Kedia, Shri Nitin Kedia and Kedia Real Estate LLP and the same is duly appearing in their respective books of accounts. During the course of assessment proceedings, the assessee submitted the reply on this issue vide letter dated 07.02.2018 and vide letter dated 05.03.2018 along with supporting documents. The ld CIT (A) has reproduced the reply of the assessee at page 5-10 of his order.

115 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT 67. In the result, ground No. 1 taken by the revenue is dismissed.

“11. I have considered the assessment order, the submissions made by the appellant along with paper book for the year under consideration and all relevant material placed on record. 11.2 From examination of the assessment order it reveals that the addition was made by ld. AO by rejecting the documentary evidence submitted by the appellant during the course of assessment proceedings and solely relying on the search statement of the appellant. From the documents and submission of the appellant its reveals that the appellant claiming that 550 gram jewellery is belonging to HUF of his father and 1941 gram jewellery lying with his father Shri Shiv Kumar Kedia. This jewellery was originally belonging to grandmother of assessee, Late Smt Ginni Devi Kedia, which was lying with late Shri Sunder Mal Kedia at the time of previous search. In support of this contention the appellant submitted the copy of Panchnama and annexure of Jewellery found of previous search. Though, this jewellery of 1941 gram was divided amongst the three sons of Late Shri Sunder Mal Kedia, during his life time but the same was kept with late Shri Sunder Mal Kedia. Due to sentimental issues, two other sons of Shri Sunder Mal Kedia (Shri Rajendra Kedia and Shri Murli Manohar Kedia) has not taken their share in this jewellery and was lying with Shri Shiv Kumar Kedia in a separate box.

116 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT 11.3 From examination of examined in APB its reveals that the alleged excess jewellery was found from the possession of Shri Shiv Kumar Kedia. Statement of father of appellant Shri Shiv Kumar Kedia regarding the Jewellery found from his bed room. The appellant or his brother could not explain this fact to the search party as they were not aware that some jewellery left by late Shri Sunder Mal Kedia was lying with his father at the time of search. The AO also made the addition solely relying the search statement and in this regard no further or subseqent inquiry was made from Sh. Shiv Kumar Kedia, Sh. Rajendra Kedia and Sh. Murli Manohar Kedia, sons to Late Shri Sunder Mal Kedia more so when the assessments of Shri Rajendra Kumar Kedia and Shri Murli Manohar Kedia were completed by the same AO. Regarding surrender made in the search statement it is pertinent to mention here that the statement alone is not sufficient to make an addition. In other words the statement must corroborate with some seized material found during the course of search. The appellant has correctly relied on various judgements in this regard in his written submission. It has been held in many judgements that mere statement is not sufficient to make an addition. A statement made must be relatable to incriminating material found during the course of search or statement must be made relatable to subsequent inquiry/investigation. Otherwise also, the jewellery found from the bed room of father cannot be taxed in the hands of assessee. Thus AO was not justified in making an addition of Rs.1,02,81,252/-solely on the basis of disclosure made in the statement u/s 132(4) of the Act. 11.4 It may be pointed out that the appellant group was also subjected to search and seizure action u/s 132(1) of the Act on15.09.1996. During that search certain amount of jewellary was found to be owned by Shri Sunder mal Media grandfather of appellant. This jewellary was added as unexplained by the AO and this issued thus travelled up to Hon'ble ITAT Jaipur. Hon'ble ITAT Jaipur in its order dated 28- 04-1999 considered all the aspects and treated jewellary of 1941 gms belonging to Shri Sundermal Kedia as explained. It was contended that same jewellary was found in the bedroom 86 in possession of Shiv Kumar Kedia son of Shri Sundermal Kedia son. Following documents are annexed in support for this contention.

1. Panchnama dated 15-09-1996 at APB page-248 2. Copy of annexure J-2 dated 18-09-1996 at APB page- 249 3. Copy of assessment order dated 30-09-1997 at APB page- 250-255 117 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT 4. Copy of order of Hon'ble ITAT Jaipur dated 28-04-1999 APB page-256-269 (refer para 8 of APB page- page 261) All these documentary evidences proved that Shri Sundermal Kedia possessed gold jewellary of 1941 gms. 11.5 In my view the appellant has furnished substantial documentary evidence to show that gold jewellary to the extent of 1941 gms is explained and was in possession of father of appellant Shri Shiv Kumar Kedia. 11.6 In view of above I am not concur with the, finding of AO regarding making addition of Rs.1,02,81,252/- on a/c of alleged undisclosed investment in Jewellery. Therefore it is directed to delete the addition of Rs.1,02,81,252/-. 11.7 The appellant took the alternative argument that the appellant had pointed out in his statement that unaccounted business income of Rs.1,02,81,252/- was utilized in making undisclosed investment in jewellery. Accordingly, the amount of Rs.1,02,81,252/- cannot be added to the total income of the assessee u/s 69A r.w.s. 115BBE of the Act for the AY 2017-18 because the source of the same is utilization of alleged unaccounted business income. Since the entire impugned addition has been deleted, therefore the alternative argument of the assessee has no force now. Appellant gets a relief of Rs.1,02,81,252/- in Ground No. 3.”

118 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT Ann No. Particulars Net Weight Weight of Total Value Total Value of Metal (In Stones (in Metal of Stone Gms.) Cts.)

JF-1 Bedroom of Shri Shiv Kumar 7901.351 281.250 (APB Kedia Ji and Smt. Saroj 2,33,87,982 47,11,760 15-21) Kedia JF-2 Bedroom of Shri Nirmal 1526.837 135.760 45,19,431 31,10,160 (APB Kedia and Smt. Ritu Kedia 6-8) JF-3 Bedroom of Shri Nitin Kedia 2746.300 360.510 81,29,030 (APB and Smt. Monika Kedia 88,66,750 9-14) JF Locker no 1070 at Ratna 88.781 0.760 2,62,791 26,600 (APB Sagar 28) Total 12,263.269 778.280 3,62,99,234 1,67,15,270 72. With regard to above jewellery, statement of Shri Nitin Kedia was recorded U/s 132(4) of the Act, which reads as under:

The search party recorded the statement of Shri Nitin Kedia on 19-11- 2016 at 10 AM which was temporarily suspended at 11 AM of 19-11-2016. The statement was resumed on 20-11-2016 at 9 AM starting from question no.

4. The search party in question no. 12 asked Shri Nitin Kedia to explain the jewellery found in the search from him and from the hands of his father, his brother, and locker. Shri Nitin Kedia accepted the excess jewellery of Rs. 1,02,32,236/-, which he surrendered as income of Shri Nirmal Kumar Kedia.

JF-1 Bedroom of Shri Shiv 7901.351 281.250 Kumar Kedia Ji and 2,33,87,982 47,11,760 Smt. Saroj Kedia JF-2 Bedroom of Shri Nirmal 1526.837 135.760 45,19,431 31,10,160 Kedia and Smt. Ritu Kedia JF-3 Bedroom of Shri Nitin 2746.300 360.510 81,29,030 Kedia and Smt. Monika 88,66,750 Kedia JF Found from Locker at 88.781 0.760 2,62,791 26,600 Ratna Sagar Total 12,263.269 778.280 3,62,99,234 1,67,15,270 iii) The explanation of Jewellery so found is as under: - S. Name of Person Net Weight of Weight of No. Metal (In Gms.) Stones (in Cts.) (A) Declared in wealth Tax return 1. Smt. Saroj Kedia w/o Shri Shiv Kumar Kedia 1042.300 115.000 (Copy of W. tax return for AY 2006-07 to AY 2014-15 along with valuation report filed with the W.Tax Return is enclosed herewith at Page No. 12-53) 2. Shri Nirmal Kumar Kedia (Copy of W. tax 4258.180 219.000 return for AY 2006-07 to AY 2014-15 along with valuation report filed with the W.Tax Return is enclosed herewith at Page No. 54-98) 3. Shri Nitin Kedia (Copy of W. tax return for 952.860 78.500 AY 2006-07 to AY 2014-15 along with valuation report filed with the W.Tax Return is enclosed herewith at Page No. 99-139) 4. Smt. Monika Kedia w/o Shri Nitin Kedia 2630.350 368.430 (Copy of W. tax return for AY 2007-08 to AY 2014-15 along with valuation report filed with the W.Tax Return is enclosed herewith at Page No. 140-179)

121 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT (B) Received at the time of marriage or other auspicious occasions in cases where W.Tax returns not filed 5. Shiv Kumar Kedia HUF (Ancestral) 550.00 6. Ritu Kedia W/o Shri Nirmal Kedia 500.00 7. Tanishk Kedia S/o Shri Nirmal Ji 100.00 8. Harsh Kedia S/o Shri Nirmal Ji 100.00 9. Yash Kedia S/o Shri NitinKedia 100.00 10. Shaurya Kedia S/o Shri NitinKedia 100.00 (C) Pertaining to Grandparents (Found in earlier search) 11. Jewellery pertaining to grandfather 1941.000 Shri Sunder Mal Kedia Ji and also found during the course of search in the year 1996. (Copy of Panchnama & inventory of Jewellery so found along with copy of assessment order & order of ITAT is enclosed herewith at Page No. 180-201) Total (A+B+C) 12,274.692 780.930 Note: - i) The weight of stone includes the weight of diamonds also. ii) It is relevant to mention here that the assessee group is living in joint family and the Jewellery of each other is being used by the family members commonly irrespective of belonging to particular person, therefore the Jewellery found from bedroom of particular person cannot be said to belonging to him only. b) Submitted vide letter dated 05.03.2018 “3. Explanation regarding Jewellery found from the residence of the assessee group and bank locker. The detail explanation in this regard along with supporting documents has been submitted along with our submission dated 07.02.2018. Broadly the explanation of the Jewellery so found is as under: - a) Gold Jewellery S. No. Name of Person Net Weight of Weight of Metal (In Stones (in Cts.) Gms.) (A) Declared in wealth Tax return 122 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT 1. Smt. Saroj Kedia w/o Shri Shiv Kumar 1042.300 115.000 Kedia 2. Shri Nirmal Kumar Kedia 4258.180 219.000 3. Shri Nitin Kedia 952.860 78.500 4. Smt. Monika Kedia w/o Shri Nitin Kedia 2630.350 368.430 (B) Received at the time of marriage or other auspicious occasions in cases where W.Tax returns not filed 5. Shiv Kumar Kedia HUF (Ancestral) 550.00 6. Ritu Kedia W/o Shri Nirmal Kedia 500.00 7. Tanishk Kedia S/o Shri Nirmal Ji 100.00 8. Harsh Kedia S/o Shri Nirmal Ji 100.00 9. Yash Kedia S/o Shri Nitin Kedia 100.00 10. Shaurya Kedia S/o Shri Nitin Kedia 100.00 (C) Pertaining to Grandparents (Found in earlier search) 11. Jewellery pertaining to grandfather Shri 1941.000 Sunder Mal Kedia Ji and also found during the course of search in the year 1996. Total Explained Jewellery (A+B+C) 12,274.692 780.930 Total Jewellery found 12,263.269 778.280 Shortfall Nil Nil b) Silver Jewellery/Articles S. No. Name of Person Net Weight of Metal (In Gms.) 1. Declared in W. Tax return of Smt. 9,837 Monika Kedia w/o Shri Nitin Kedia.

123 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT Without prejudice to above this is to submit that if still your honour wants to make any addition on this account by not accepting the submission of the assessee than the same may treated as utilization of alleged on money received on sale of plots.”

(iii) Benefit The benefit of 550 In this regard this is submit that the of 550 gms gms of jewellery father of the assessee Shri Shiv Kumar of jewellery claimed as Kedia was 61 years old as on the date claimed as ancestral in the of search and belonging to the reputed belonging name of M/s Shiv family. Shri Shiv Kumar Kedia Ji to Shiv Kumar Kedia acquired the Jewellery over the year Kumar (HUF) is also not time of time on marriage and other Kedia HUF allowable for the various auspicious occasions solemnized 125 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT same reason as time to time in family. After the discussed above. marriage of Shri Shiv Kumar Kedia Ji However, in there was birth of three children in the keeping with the family, marriage of two sons and birth CBDT Instruction of four grandsons of Shri Shiv Kumar no.1916, benefit Kedia Ji. As per customary of the Hindu of 100 gms of family apart from Jewellery received at jewellery in the the time of marriage of Shri Shiv Kumar name of Sh. Shiv Kedia Ji he would receive some Kumar Kedia is Jewellery on the birth of his child, being provided.” marriage of his child and birth of his grandsons and the same fact cannot be ruled out. The ld. AO allow the benefit only of the 100 Gms by relying the CBDT instruction No. 1916 dated 11.05.1994. In this regard we would like to catch your kind attention towards the clause (iii) of the instruction which said that “The authorized officer may having regard to the status of the family and the customs and practices of the community to which the family belongs and other circumstances of the case, decide to exclude a larger quantity of jewellery and ornaments from seizure.” Thus the 100 gms Jewellery as per board instruction is not a thumb rule but while considering the same the other surrounding circumstances should have been also taken into consideration. The ld. AO considering the Jewellery of Shiv Kumar Kedia HUF at par from his grandsons i.e. 100 Gms and much below to his sons Shri Nirmal and Nitin Kedia which is not at all possible considering the age of Shri Shiv Kumar Kedia, his family status and size of family. Thus the ld. AO completely erred 126 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT on this account in allowing only credit of 100 Gms Jewellery.

S.No Date of letter Addressed to Copy of letter given to 1 Dated 21/11/2016 ADIT-3 Jaipur 1. Principal Director of Income Tax, Investigation, Jaipur 2. Additional Director of Income Tax, Investigation, Jaipur. 2 Dated 08/03/2017 DCIT Central 1. Principal Commissioner Circle-3, Jaipur of Income Tax, Central, Jaipur 2. Principal Director of Income Tax, Investigation, Jaipur 3. Additional Director of Income Tax, Investigation, Jaipur.

4. Joint Commissioner of Income Tax, Central, Jaipur 5. Asstt. Director of Income Tax, Investigation-III, Jaipur 3 Dated 17/04/2017 DCIT Central 134 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT Circle-3, Jaipur 4 Dated 18/05/2017 DCIT Central Joint Commissioner of Income Circle-3, Jaipur Tax, Central, Jaipur. 5 Dated 08/01/2018 DCIT Central (i) The Principle Circle-3, Jaipur Commissioner of Income Tax, Central, Jaipur (ii) Joint Commissioner of Income Tax, Central, Jaipur.

It was submitted that the assessee vide letter dated 18/05/2017 and 08/01/2018 made repetitive request to the ADIT and the AO, however, despite such request, the copy of the statements recorded at the time of search and post search has not been provided to the assessee and from this it appears that the department does not want to use these statements against the assessee and want to make assessment on the basis of documents seized during the course of search.

Section 69B of the Income-tax Act, 1961 - Undisclosed investments (Burden of proof) - Whether where except statement of director of assessee- company offering additional income during survey in his premises, there was no other material either in form of cash, bullion, jewellery or document or in any other form to conclude that statement made was supported by some documentary evidence, said sum could not be added in hands of assessee as undisclosed investments - Held, yes [Paras 10-11] [In favour of assessee] Para 10 & 11 of the order is as under : 10. Before proceeding with the matter, it will not be out of place to mention that except the statement in the letter, the AO has no other material on record to assess the income of Rs. 1,82,00,000/-.

137 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT 11. It is settled proposition of law that merely on the statement that too also was taken in view of threat given in question No.36 as narrated by Mr. Gupta and the same sought to have been relied upon, there is no other material either in the form of cash, bullion, jewellery or document in any other form which can come to the conclusion that the statement made was supported by some documentary evidence. We have gone through the record and find that the CIT (A) has rightly observed as stated hereinabove, which was confirmed by the Tribunal. It would not be out of place to mention that this order of Hon'ble Rajasthan High Court has been confirmed by Hon'ble Supreme Court also. iv) Further, Hon’ble Delhi High court in case of Harjeev Agarwal (70 Taxmann.com 95) held: “…A plain reading of Section 132 (4) of the Act indicates that the authorized officer is empowered to examine on oath any person who is found in possession or control of any books of accounts, documents, money, bullion, jewellery or any other valuable article or thing. The explanation to Section 132 (4), which was inserted by the Direct Tax Laws (Amendment) Act, 1987 w.e.f. 1st April, 1989, further clarifies that a person may be examined not only in respect of the books of accounts or other documents found as a result of search but also in respect of all matters relevant for the purposes of any investigation connected with any proceeding under the Act. However, as stated earlier, a statement on oath can only be recorded of a person who is found in possession of books of accounts, documents, assets, etc. Plainly, the intention of the Parliament is to permit such examination only where the books of accounts, documents and assets possessed by a person are relevant for the purposes of the investigation being undertaken. Now, if the provisions of Section 132(4) of the Act are read in the context of Section 158BB (1) read with Section 158B (b) of the Act, it is at once clear that a statement recorded under Section 132(4) of the Act can be used in evidence for making a block assessment only if the said statement is made in the context of other evidence or material discovered during the search. A statement of a person, which is not relatable to any incriminating document or material found during search and seizure operation cannot, by itself, trigger a block assessment. The undisclosed income of an Assessee has to be computed on the basis of evidence and material found during search. The statement recorded under Section 132(4) of the Act may also be used for making the assessment, but only to the extent it is relatable to the 138 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT incriminating evidence/material unearthed or found during search. In other words, there must be a nexus between the statement recorded and the evidence/material found during search in order to for an assessment to be based on the statement recorded….” Though the above principle is laid down in relation to assessment of block period u/s 158 BC of the Act, the same was also applied in respect of assessment u/s 153A by Delhi High Court in case of Best Infrastructure (84 Taxmann.com 287) when it was held thus: 38. Fifthly, statements recorded under Section 132 (4) of the Act of the Act do not by themselves constitute incriminating material as has been explained by this Court in Harjeev Aggarwal (supra). Some of the more decisions laying down ratio that mere statement is not enough to make addition are as under: v) Hon’ble Madras High Court in the case of Smt. S. Jayalakshmi Ammal [2016] 74 taxmann.com 35 (Madras) “…While adverting to the above, we are of the considered view that, for deciding any issue, against the assessee, the Authorities under the Income Tax Act, 1961 have to consider, as to whether there is any corroborative material evidence. If there is no corroborating documentary evidence, then statement recorded under Section 132(4) of the Income Tax Act, 1961, alone should not be the basis, for arriving at any adverse decision against the assessee. If the authorities under the Income Tax Act, 1961, have to be conferred with the power, to be exercised, solely on the basis of a statement, then it may lead to an arbitrary exercise of such power. An order of assessment entails civil consequences. Therefore, under judicial review, courts have to exercise due care and caution that no man is condemned, due to erroneous or arbitrary exercise of authority conferred….” “…If the assessee makes a statement under Section 132(4) of the Act, and if there are any incriminating documents found in his possession, then the case is different. On the contra, if mere statement made under Section 132(4) of the Act, without any corroborative material, has to be given credence, than it would lead to disastrous results. Considering the nature of the order of assessment, in the instant case characterized as undisclosed and on the facts and circumstances of the case, we are of the view that 139 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT mere statement without there being any corroborative evidence should not be treated as conclusive evidence against the maker of the statement…” vi) Naresh Kumar Agarwal [2015] 53 taxmann.com 306 (Andhra Pradesh) “…it is admitted by the Revenue that on the dates of search, the Department was not able to find any unaccounted money, unaccounted bullion nor any other valuable articles or things, nor any unaccounted documents nor any other valuable articles or things, nor any unaccounted documents nor any such incriminating material either from the premises of the company or from the residential houses of the managing director and other directors. In such a case, when the managing director or any other persons were found to be not in possession of any incriminating material, the question of examining them by the authorised officer during the course of search and recording any statement from them by invoking the powers under section132(4) of the Act, does not arise. Therefore, the statement of the managing director of the assessee, recorded patently under Section 132(4) of the Act, does not have any evidentiary value. This provision embedded in sub-section (4) is obviously based on the well established rule of evidence that mere confessional statement without there being any documentary proof shall not be used in evidence against the person who made such statement..” vii) Hon’ble Gujarat High Court, vide its order dated 14.07.2016, in the case of CHETNABEN J SHAH LEGAL HEIR OFJAGDISHCHANDRA K. SHAH, in TAX APPEAL NO. 1437 of 2007, laid down the ratio that no additions can be made in the hands of the assessee merely on the basis of statements recorded, during the course of search, under section 132(4). Hon’ble High Court in the above mentioned case relied on its earlier order in the case of Kailashben Manharlal Chokshi [2008] 174 Taxman 466 (Guj.),wherein a similar ratio was laid down. Further, in the case of Narendra Garg & Ashok Garg (AOP) [2016] 72 taxmann.com 355 (Gujarat), Hon’ble Gujarat High Court held that “….It is required to be borne in mind that the revenue ought to have collected enough evidence during the search in support of the disclosure statement. It is a settled position of law that if an assessee, under a mistake, misconception or on not being properly instructed, is over assessed, the authorities are required to assist him and ensure that only 140 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT legitimate taxes are collected. The Assessing Officer cannot proceed on presumption u/s 134(2) of the Act and there must be something more than bare suspicion to support the assessment or addition. In the present case, though the revenue's case is based on disclosure of the assessee stated to have been made during the search u/s 132(4) of the Act, there is no reference to any undisclosed cash, jewellery, bullion, valuable article or documents containing any undisclosed income having been found during the search…”

"6. We have heard parties with reference to material on record and case laws brought to our notice. The action under section 132 was carried out at assessee’s premises on 27.8.2008 and in the statement assessee made surrender of income of Rs. 30,00,000/- on account of income earned from trading of items in pharmaceutical business outside the books. The appellant, however, had been approaching the authorized officer to provide copy of statement so obtained in proceedings under section 132 of the Act. When these statements were not provided, the appellant vide letter dated 3.10.2008 addressed to the authorized officer and another letter dated 18.12.2008 addressed to the assessing authority requested to provide the copy of statement in case the same were to be used against him. Till such time the copy of statement was not provided, assessee entertained a 142 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT bonafide belief that in the absence of any documentary evidence or corroborative evidence having been found as a result of search, such statement would not be used against him. If such statements were to be used, the department was under legal obligation to have provided the copy thereof to the appellant. It is only on persistent efforts of the appellant, copies of statement were provided only on 13.3.2009. The appellant after understanding the legal implication of such statement made a valid retraction as the surrender was not supported by any corroborative evidence. The affidavit filed in this regard is laid on assessee’s paper book pages 64 to 68. This affidavit has carefully been perused. After the affidavit was filed before the assessing authority, he remained silent on the face of it and carried no enquiry thereon to verify the correctness thereof. The assessee was also not cross examined on the point of retraction nor was required to produce any documentary evidence or any other evidence. Assessee was, therefore, entitled to assume that the income tax authorities were satisfied with the affidavit as sufficient on this point. The Hon'ble Allahabad High Court in the case of Sohan Lal Gupta vs. CIT (1958) 33 ITR 786 (All.), as also put to the parties during the course of argument, has made elaborate discussion on the evidentiary value of the affidavit. The relevant passage from the aforesaid judgment at page 791 of the report is reproduced as under :-

The most important points on which the Tribunal relied, is that mentioned at No. 2, viz., that, according to the Tribunal, the assessee had not satisfactorily established that the shares had to be sold as the purchaser of the Jaswant Sugar Mills was not willing to purchase that mill unless the shares in the Straw Board Mills Ltd. held by the family were also transferred to him at the same time. On this point, the only material available on the record is the affidavit which was filed by the assessee before the Income-tax Officer. The assessee in his affidavit, had definitely stated that the purchaser wanted to purchase both the going concerns, the Jaswant Sugar Mills and the Straw Board Mills Ltd., together and one of his conditions of purchase was that all the shares of Lala Jaswant Rai, his sons and other relatives had to be transferred to the purchaser. The Income-tax Appellate Tribunal rejected this affidavit of the assessee on the mere ground that there was no documentary evidence in corroboration in the form of any correspondence of otherwise on this point. Shri G.S. Pathak contended rightly before us that the Tribunal was not entitled to reject the 143 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT affidavit on this point on such a ground. After the assessee had filed the affidavit, he was neither cross-examined on that point, nor was he called upon to produce any documentary evidence. Consequently, the assessee was entitled to assume that the Income-tax authorities were satisfied with the affidavit as sufficient proof on this point. If it was not to be accepted as a sufficient proof either by the Income-tax Officer or by the Appellate Assistant Commissioner of Income-tax or by the Income-tax Appellate Tribunal, the assessee should have been called upon to produce documentary evidence, or, at least he should have been cross-examined to find out how far his assertions in the affidavit were correct.

The reliance placed by the assessee on the judgment by Hon'ble Apex Court in the case of Pullangode Rubber Produce Co. Ltd. (supra) and Hon'ble Rajasthan High Court in the case of Ashok Kumar Soni (supra) are well placed as the assessee has successfully demonstrated that the admission made during the course of search is not correct. The ingredient for retraction of statement made during the search, therefore, stand duly satisfied as the assessee is found to have made retraction within a reasonable time immediately after the copies of statement were provided to him. Furthermore, there being no material or evidence on record to show that appellant has carried any business outside the books for sale and purchase of items of pharmaceutical companies that could give rise to income to the extent of Rs. 30,00,000/-, addition merely on the basis of such statement which stood validly retracted could not have been made. On similar basis and reasoning in the case of Suresh Medical Agency another assessee of the group who were also searched on the same day along with this appellant, vide our order dated 21.8.2013 in have found the retraction made as valid and also deleted the addition. We, therefore, find no factual or legal justification in sustenance of addition by Ld. CIT (A) in this regard. As a result, the addition sustained by Ld. CIT (A) is deleted and ground no. 1 raised in appeal is allowed."

3. Having considered the rival submissions and the relevant material on record, we note that the assessee produced a sale deed dated 18.05.2012 whereby the owner of the land Shri Daya Kishan sold the said plot of land to third party Mrs. Nirmala Devi and, therefore, once the said plot of land was sold by the owner to third party and not to the assessee or his son, then the question of investment of Rs. 5,75,000/- which was to be paid at the time of sale deed does not arise. The AO has made the addition only on the basis of surrender made by the assessee during the course of survey though there was an agreement found during the survey action. As per the said agreement only Rs. 1,00,000/- was found to be paid by the son of the assessee as an advance for purchase of the plot of land and, therefore, to that extent the addition can be made if assessee has not surrendered the amount. Since the assessee has already surrendered the amount of Rs. 1,00,000/-, therefore no further addition can be made on account of investment in the land when the said agreement found during the course of survey was not given effect by the parties and the plot of land was sold by the owner to some third party vide sale deed dated 18th May, 2012. Hence, when the facts were brought on record by 145 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT the assessee regarding the sale of plot of land to the third party, then the statement recorded under section 133A which is contrary to the actual facts, cannot be a basis of addition. Accordingly, in the facts and circumstances of the case, the addition made by the AO is not sustainable in law and the same is deleted.”

“14. I have considered the assessment order, the submissions made by the appellant along with paper book for the year under consideration and all relevant material placed on record.

14.2 From examination of the assessment order it reveals that the addition was made by Ld. AO by rejecting the documentary evidence submitted by the appellant during the course of assessment proceedings. From the documents and submission of the 146 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT appellant its reveals that the appellant claiming that 16015 grams silver items lying with his father Shri Shiv Kumar Kedia and these items were originally belonging to grandmother of assessee Late Smt Ginni Devi Kedia, which was lying with late Sh. Sunder Mal Kedia at the time of previous search. In support of this contention the appellant submitted the copy of Panchnama and annexure of Jewellery found of previous search. Due to some sentimental issues, two other sons of Shri Sunder Mal Kedia (Shri Rajendra Kedia and Shri Murli Manohar Media) have not taken their share in this jewellery and was lying with Shri Shiv Kumar Kedia in a separate box.

14.3 From examination of record its reveals that the alleged excess silver articles were found from the possession and control of father of Assessee Shri Shiv Kumar Kedia and the search party has not recorded the statement of father of appellant Shri Shiv Kumar Media regarding the Jewellery and silver articles found from his bed room. The appellant or his brother could not explain this fact to the search party as they were not aware about this fact at the time of search. The AO also made the addition solely relying the search statement and in this regard no inquiry was made from Shri Shiv Kumar Kedia Shri Rajendra Kedia and Murli Manohar Kedia, sons to Late Shri Sunder Mal Kedia more so when the assessments of Shri Rajendra Kumar Kedia and Shri Murli Manohar Kedia were completed by the same AO.

In view of above I am not concur with the finding of AO regarding making addition of Rs.6,59,818/- on a/c of alleged undisclosed investment in silver. Therefore, it is directed to delete the addition of Rs.6,59,818/-.

147 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT 14.4 The argument of the appellant that the alleged undisclosed investment in silver may be treated as utilization of unaccounted business income and accordingly the addition cannot be made to the total income of the assessee u/s 69A r.w.s. 115BBE of the Act which has no force now as since the entire impugned addition has been deleted.

On the facts and in the circumstances of the case and in view of above the Ground No. 4 of the appeal is allowed.”

150 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT 99. From the record we found that AO failed to appreciate the copy of inventory submitted before her in respect of search on 15-09-1996, which is as under: - Silver items S.No of old Description Quantity Panchnama (Kg) 1 to 5 Misc Silver Items/Utensils/ Ornaments 11.470 (found from bed room of Shri S.M. Kedia) 6 Silver Coins of different size (found 0.530 from bed room of Shri S.M. Kedia) 7 Silver Coins (found from bed room of 216 Nos. Shri S.M. Kedia) 17 Silver Utensils/ Items 4.075 (Bed room of Shri S.M. Kedia (Suit Case) 18 Silver Coins 196 Pcs (Bed room of Shri S.M. Kedia (Suit Case) Found at the time of old search from 16.075 Kg + Shri S.M.Kedia 412 coins In view of the above if credit of silver items belonging to late Shri Sunder Mal Kedia is given there cannot be excess silver items.

151 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT 101. The A.O. also made addition of Rs. 4,33,350/- on a/c of alleged unaccounted business income alleged to be earned on sales of plot at Ganesh Vihar computed on the basis of noting found on Page 1 of exihibit-8, seized from 1, Gayatri Nagar, Main Tonk Road, Sanganer, Flyover, Jaipur. The addition was made by rejecting the submission & evidences submitted by the assessee and further ignoring the fact that plot mentioned in the seized documents does not pertain to the assessee and the assessee is neither buyer nor seller of this plot, therefore the income of such plots cannot be added in the hands of the assessee. Further the deal of the plot also did not materialize.

“20. I have considered the assessment order, the submissions made by the appellant along with paper book for the year under consideration and all relevant material placed on record.

From examination of seized document, it reveals that the scrabbling such as plot No., Name of customer, rate, plot size, total amount, cheque amount and cash amount etc. has been written on the seized paper. The name of the scheme is not written on the paper but it is undisputed fact that the plots mentioned on the seized sheet are of the scheme naming "Ganesh Vihar Vistar".

152 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT 20.2 The appellant in his written submission pleaded that the plots mentioned in paper did not pertain to him and no unaccounted payment was received to him against sales of this plot. It was further argued that the deal in respect of noted plot was actually not materialized. The arguments of the applicant is considered and not found acceptable completely. The ld. AO filed the documents to prove that the plot does not belong to the appellant but no evidence was placed on record to prove that the noted deal was actually not materialized. The paper found from the possession of the appellant, therefore to prove the every contention taken regarding such paper lies over the appellant. Since the appellant could not adduce any evidence that the deal noted on the paper did not materialize, therefore this argument is rejected.

From examination of paper and facts of the case it can be reasonably presumed that the appellant was acting as an broker in this deal because being a businessmen it cannot be presumed that the applicant will take interest and use his resources for materialization of any deal without any interest.

20.3 Regarding the finding of AO that Ganesh Vihar scheme has been developed by a cooperative society by the name of Sh. Ganpati Griha Nirmaan Sahkaari Samiti Ltd. which apparently pertains to the Kedia family that appellant submitted that society naming Sh. Ganpati Griha Nirmaan Sahkaari Samiti Ltd was an independent registered socicty under Cooperative Laws. This society was independent person and was being run by several members and office 153 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT bearers of the society. The argument of the appellant in this regard is acceptable and the finding of the AO given in this regard cannot be upheld. Merely that large number of plots in the scheme developed by the society owned by the assessee family cannot lead to the conclusion that such society was belonging to the appellant family. It is uncontroverted fact that many outsiders have also purchased the plots in this scheme of the society and the plots purchased by the appellant group from the society was also purchased after making the payment of same consideration which the outsiders paid. Thus the society naming Sh. Ganpati Griha Nirmaan Sahkaari Samiti Ltd cannot be treated as pertaining to the appellant group and the same is the independent person in the eye of law including Income Tax Act.

20.4 The finding of the AO that the scheme as well as the plot sold, pertain to the Kedia family and the 'on money' recorded in these pages were received by the applicant through the sale of plots listed therein which were on paper sold by some other person on behalf of the applicant group is perverse and contra to the material/documents available on record. There is no material available on the record the beneficiary owner of such plots was the applicant. The AO himself did not tax the cheque and loan amount in the hands of the applicant meaning which she herself admitted the ownership of such plot in the hands of respective seller thus there remains no reason to on money of such plot in the hands of the applicant. The single transaction cannot be taxed in two hands only on presumption and assumption.

154 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT 20.5 The affidavits submitted by the appellant in support of his submission cannot be considered as evidence because the direct evidence in the form of seized material showing the unaccounted transaction is gathered during the course of search/survey. Further no party will admit the unaccounted payment made by him because the same also lead to them also in trouble. Thus, the affidavit submitted by the appellant are not corroborative evidences but the same are self-serving evidence which cannot be accepted.

20.6 In view of finding given by me in forgoing paras the addition of sales consideration regarding plot belonging to other cannot be sustained in the hands of the appellant. However as submitted earlier it cannot be presumed that the applicant will not receive any brokerage on sale of these plots cannot be accepted, therefore I estimate the brokerage earned to the applicant on sale amount (Cheque + Loan + Cash) of this plot @ 4% of sales amount Rs.8,38,350/-which comes Rs.33,534/-. Thus the addition on this account is sustained to Rs.33,534/- only and the balance addition of Rs.3,99,816/- is directed to be deleted. On the facts and in the circumstances of the case, thus the ground No. 6 of the appeal is partly allowed to the extent indicated above.”

155 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT 104. We have considered the rival contentions and carefully gone through the orders of the authorities below and found from the record that during the course of assessment, the A.O. has made addition of Rs. 3,99,816/- on account of undisclosed receipts from sale of plots. Statement of Shri Nirmal Kumar Kedia was recorded at Sanganer office on 19-11-2016 which concluded on 20-11-2016. The relevant question is question no. 39 wherein the assessee was asked to explain page 1-6 of annexure A-8. The assessee answered that this is a note pad wherein name, address, mobile no. etc. of some parties is written and on some pages some account is written for which full detail will be submitted in office. The Ld AO recorded the statement of assessee u/s 131 on 23-02- 2017. The Ld AO has reproduced relevant question and answer at page 11 of her order. The assessee has stated that it is ruff noting noted by our sales staff during the decision and this deal not executed and the assessee and his family members have no concern with this plot.

156 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT The AO has made a categorical finding that in this deal M/s Kedia Real Estate LLP has taken "On Money' in cash amounting to Rs. 4,33,350/-, then no addition can be made in the hands of assessee. The copies of seized document No. 1 on the basis of which the addition is made by the AO is at PB Page 96. During the course of assessment proceedings on these papers the assessee made the following submission to the AO: - a) Vide letter dated 07.02.2018 (Copy at PB Page 145 to 181 relevant page PB Page 150) “This is noting made by sales staff of the assessee group during discussion made with some customer regarding sale of plot No. A-120 at Ganesh Vihar Vistar deal of which could not be materialized. This plot is owned by Shri Manish Agarwal who wanted to sale the plot through assessee group.” b) Vide letter dated 28.02.2018 (Copy at PB Page 185) “iii) Regarding page No. 1 of Exhibit 8 found and seized from 1, Gayatri Nagar Main Tonk Road, Sanganer, Jaipur As submitted in our previous submission this is noting made by sales staff of the assessee group during discussion made with some customer regarding sale of plot No. A-120 at Ganesh Vihar Vistar deal of which could not be materialized. This plot is owned by Shri Manish Agarwal who wanted to sale the plot through assessee group. The assessee group is neither buyer nor seller of this plot. We are enclosing herewith the copy of JDA allotment letter of this plot to prove that this plot does not belongs to the assessee group.”

“23. I have considered the assessment order, the submissions made by the appellant along with paper book for the year under consideration and all relevant material placed on record.

Background for making this addition is as follows. The appellant disclosed a lump sum of Rs. 20 Crores vide Q 4 & 5 in the statement u/s 132(4) of the act dated 19.11.2016. Same is on page 9 of the AO order.

23.2 This disclosure was reiterated by the appellant in the statement recorded u/s 131 of the act on 20.11.2016 & 2.12.2016. The relevant extracts of the statement are reproduced in the AO order. Subsequently the appellant filed a retraction affidavit dated 22.1.2018, whole of it is reproduced on page 14 to 16 of the AO order. In this affidavit the appellant gave reasons for retraction. In the final statement u/s 131 of the act the retraction was reiterated. The AO dismissed the retraction affidavit and made an addition vide para 9, whole of it reproduced below:

This admission of undisclosed income was also confirmed by Sh. Nirmal Kumar Kedia in his statement recorded on u/s 131 of the I. T. Act, 1961 on 20.11,2016 as well as during the post search proceedings on 02.12.2016. The relevant extract of both the statements is reproduced as under for ready reference:

163 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT 9.1 On perusal of the return filed by the assessee in response to notice u/s 153A, it was observed that the assessee failed to declare the undisclosed income of Rs.20 crores as admitted during the course of search proceedings in his statement recorded u/s 132(4). Further, an affidavit dated 22.01.2018 was also filed by the assessee as per which he retracted from the confession made during 164 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT the course of the search proceedings. In this affidavit, the assessee stated as under:

165 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT 166 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT 167 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT 9.2 In view of the retraction made and the affidavit filed, the statement of the assessee was once again recorded on oath u/s 131 of the IT Act, 1961 on 23.02.2018. The relevant extract of the statement is as under:

168 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT 9.3 Further, a specific show cause was also given to the assessee with respect to the retraction, wherein he was specifically asked as to why such retraction affidavit filed after more than one year of the search may not be taken as an afterthought, since, no such reason was pointed out during the course of search and post-search proceedings and that why the undisclosed income of X20 Crores admitted by the assessee during the course of search may not be added to his total income for the relevant A.Y. in view of the statement recorded u/s 132(4) and 131. In his reply, the assessee stated that, "...At the outset this is to submit that the admission of business income of Rs. 20 Crores in the statement recorded by search party/survey party was wrong, incorrect and involuntarily obtained by the department for the reasons that during the course of search/survey, the assessee was under mental tension, fear and due to misconception and misrepresentation of facts by the search/survey party and without going through & completely examining to the documents found as a result of search/survey. Thus for these reason the assessee admitted in the statements recorded by search/survey party and also in post search statement recorded on 02.12.2016 certain undisclosed income/investments/expenses which was actually not earned/made by assessee or his business concerns or his family members. The surrender is not based on the basis of records/documents and assets found as the result of search. This fact is evident from the statements of the assessee wherein no 169 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT year wise, project wise and assessee wise segregation/ classification of the surrendered income with reference to seized documents was made. Had this income will be the real income of the assessee than in such a situation the supporting documents or material of the same would find to the search party which is not found in this case. From perusal of the show cause notice issued by your honour has also not corroborated the statement with the supporting material/documents found as a result of search which could have prove that this much of income was actually earned by the assessee or his business concerns or his family members. During the course of the search & survey, the search/survey party recorded the statement of the assessee and his brother Shri Nitin Kedia at their residence and business premises on 19.11.2016 and 20.11.2016. Further the ADIT-Investigation-Ill, Jaipur also recorded my statement on 02.12.2016 in his office. The search/survey party after recording of the statements did not provide the copy of statements to the assessee. Vide letter dated 23.11.2016 we requested to ADIT-Investigation-Ill, Jaipur to provide the copies of statements recorded by the search/ survey party but the same was not provided by the ADIT. Thus the assessee was under bona fide belief that the statement would not be used against him or his business concerns and the real income of the group will be assessed on the basis of documents/assets found as a result of search & survey. Thereafter vide letter dated 08.03.2017, 17.04.2017, 18.05.2017 and 08.01.2018, we further requested to your honour to provide the copies of statements recorded by the search & survey party. Vide letter dated 18/05/2017 and 08/01/2018 filed before your honour under copy to JCIT, it was clearly mentioned that the department is not providing the copy of the statement for the reason that it does not want to use these statements against assessee/assessee group and it want to make the search assessments on the basis of documents seized during the course of search. However, the AO provided the copies of the statement to our council on 19.01.2018 (Friday). Thus upto the 19.01.2018 the assessee was under bona fide belief that the statement would not be used against him or his business concerns and the real income of the group will be assessed on the basis of documents/assets found as a result of search & survey. However as soon as the copies of statements were provided to the assessee the assessee filed the affidavit on 22.01.2018 to retract from the incorrect surrender made in his statements for the 170 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT reasons mentioned in forgoing paras. The retraction by way of affidavit in not an afterthought but the same is made on the basis of actual facts and record. Without having the copies of statements recorded no further clarification or explanation could be submitted in that regard. The brother of assessee Shri Nitin Kedia has also given his acceptance on the income surrendered by the assessee at saying of the assessee for the reasons explained in forgoing paras without examining the correctness of surrendered made. Thus in view of above this is to submit that the income of Rs. 20 Crores surrendered by the assessee in his statements recorded during search/survey or post search is wrong, incorrect and involuntarily and no such income was actually earned by the assessee or his family members or his business concerns. As a result of search the search party did not found any documents/evidences to prove that the assessee group earned this much of undisclosed income. As a result of assessment proceedings your honour also could not pointed out any documents/evidences to prove that the assessee group had earned this much of undisclosed income. The surrender is not based on the basis of records/documents and assets found as the result of search and is against the directions issued by CBDT to the All Chief Commissioners of Income Tax, (Cadre Contra) & All Directors General of Income Tax Inv. vide letter F. No. 286/2/2003-IT (Inv) dated 10.03.2003 as regard confiscatory statement. In view of this instructions and various settled case law of Jurisdictional High court no addition can be made merely on the basis of statements. It is further relevant to mention here that the assessee has retracted from the statements recorded during search/survey therefore the same does not have no legal value now in the eye of law. Further during the course of assessment proceedings your honour also recorded the statements of the assessee on 23.02.2018 for re- confirming the admission made during search or on certain evidence found as a result of search and in such statement the assessee categorically denies to earned any undisclosed income or making any undisclosed investment/expenses. Without prejudice to above and consent of the assessee, if still your honour wants to assessee some income only on the basis of income of Rs. 20 Crores surrendered by the assessee during the course of search in his statement than this is to request that: - 171 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT i) In your show cause notices issued by your honour in the case of assessee, Shri Nitin Kedia and Kedia Real Estate LLP your honour proposed certain other additions in the group on the basis of other seized documents/evidences. If the submission of the assessee group given on such issues is rejected and the additions are being made on such issues than such addition may kindly be treated as covered as additional income of Rs. 20 Crores surrendered by the assessee because such additions are not separate income of the assessee group but part of the overall income of Rs. 20 Crores or utilization of such income..." 9.4 The reply of the assessee has been considered but not found acceptable due to the following reasons:- * The assessee failed to furnish any proof of misrepresentation by the search team during the course of search and post-search proceedings; * The assessee confirmed to the undisclosed income of Z20 crores in his three different statements recorded during the search/survey and post- search proceedings. The assessee signed these statements after going through them in detail. It is not rational to claim that the assessee was unaware of the facts deposed in his statement recorded u/s 132(4) and 131; * The brother of the assessee Sh. Nitin Kedia also confirmed to the undisclosed income of Z20 crores in the hands of the assessee in his statement recorded u/s 132(4). Sh. Nitin Kedia also did not claim of any misrepresentation of facts during the search or post-search proceedings; * The offer of the undisclosed income made by the assessee was made voluntarily and in a stable state of mind without any fear or tension and the same is evident from the perusal of his statements; * In his statement Shri Nirmal Kumar Kedia stated that the additional income offered for taxation as undisclosed income of his business concern has been earned from the Assessment Year 2010-11 onwards and that additional income of Z20 crores is net undisclosed income of himself/his business concern and that he will not claim any set off or deductions against this income. * The statement recorded u/s 132(4) of the IT Act, 1961 during the course of search proceedings has an evidentiary value in itself. Also, such statement is much accurate and truthful due to a surprise 172 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT element as compared to the retraction made after one year of the search, which is well deliberated. 9.5 In view of the above facts and discussion, it is clear that the assessee has retracted from the statement given during the course of search proceedings u/s 132(4) with the clear purpose of tax evasion. During the course of search proceedings, Sh. Nirmal Kumar Kedia had stated in his statement, Thus, after examining the seized material, unaccounted income has been determined in the hands of M/s Kedia Real Estate LLP, Sh. Nitin Kedia and Sh. Nirmal Kumar Kedia and accordingly, an addition of Rs.14,03,26,787/- has been made in the cases of M/s Kedia Real Estate LLP, Sh. Nitin Kedia and Sh. Nirmal Kumar Kedia in different assessment years starting from AY 2012-13 to AY 2017-18. Since the assessee disclosed an unaccounted income of X20 crores during the search proceedings earned from the business activities, the balance undisclosed amount of Rs.5,96,73,213/- (20,00,00,000— 14,03,26,787) is being added to the total income of the assessee for the AY 2017-18 in view of the confessional statement of the assessee regarding undisclosed income recorded during the course of search proceedings u/s 132(4) of the IT Act, 1961. 23.3 Perusal of para 9 of assessment order it reveals that the addition was made by ld. AO by solely relying on the search statement u/s 131 of the act which were later on retracted by filing an affidavit. The AO in fact has concluded that since Rs.1,43,26,787 has already been added as undisclosed income, the balance, Rs.5,96,73,213 (20 173 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT Crores-total disclosure & Rs.14,03,26,787- added by the AO in different AYrs) is taxed as undisclosed income for this A.Yr.

Clearly In support of the addition so made the AO has not relied upon any evidence or seized document or subsequent inquiry.

Regarding surrender made in the search statement u/s 132(4) of the Act it is pertinent to mention here that the statement alone is not sufficient to make an addition more so when the same were later on retracted. In other words the statement u/s 132(4) of the act or u/s 131 of the Act must corroborate with some seized material found during the course of search. The appellant has correctly relied on various judgements in this regard in his written submission. It has been held in judgements referred that mere statement is not sufficient to make an addition. A statement made must be relatable to incriminating material found during the course of search or statement must be made relatable to the seized material or evidences found subsequent to inquiry/investigation.

Hon'ble Rajasthan High Court in the case of Mantri Share Brokers Vs. CIT ( 96 Taxmann.com 279) have held as under:

Section 69B of the Income-tax Act, 1961 - Undisclosed investments (Burden of proof) - Whether where except statement of director of assessee- company offering additional income during survey in his premises, there was no other material either in form of cash, bullion, jewellery or document or in any other form to conclude that statement made was supported by some documentary evidence, said sum could not be added in hands of assessee as undisclosed investments - Held, yes [Paras 10-11] [In favour of assessee] Para 10 & 11 of the aid judgment may also be referred to. Same reads as under:

174 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT 10. Before proceeding with the matter, it will not be out of place to mention that except the statement in the letter, the AO has no other material on record to assess the income of Rs. 1,82,00,000/-.

11. It is settled proposition of law that merely on the statement that too also was taken in view of threat given in question No.36 as narrated by Mr. Gupta and the same sought to have been relied upon, there is no other material either in the form of cash, bullion, jewellery or document in any other form which can come to the conclusion that the statement made was supported by some documentary evidence. We have gone through the record and find that the CIT (A) has rightly observed as stated hereinabove, which was confirmed by the Tribunal. It may be pointed out that this judgement has already been confirmed by Hon'ble Supreme Court. Further, Hon'ble Delhi High court in case of Harjeev Agarwal (70 Taxmann.com 95) also has held as under:

A plain reading of Section 132 (4) of the Act indicates that the authorized officer is empowered to examine on oath any person who is found in possession or control of any books of accounts, documents, money, bullion, jewellery or any other valuable article or thing. The explanation to Section 132 (4), which was inserted by the Direct Tax Laws (Amendment) Act, 1987 w.e.f. 1st April, 1989, further clarifies that a person may be examined not only in respect of the books of accounts or other documents found as a result of search but also in respect of all matters relevant for the purposes of any investigation connected with any proceeding under the Act. However, as stated earlier, a statement on oath can only be recorded of a person who is found in possession of books of accounts, documents, assets, etc. Plainly, the intention of the Parliament is to permit such examination only where the books of accounts, documents and assets possessed by a person are relevant for the purposes of the investigation being undertaken. Now, if the provisions of Section 132(4) of the Act are read in the context of Section 15888(1) read with Section 158B(b) of the Act, it is at once clear that a statement recorded under Section 132(4) of the Act can be used in evidence for making a block assessment only if the said statement is made in the context of other evidence or material discovered during the search. A statement of a person, which is not relatable to any incriminating document or material found during search and seizure operation cannot, by itself, trigger a block 175 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT assessment. The undisclosed income of an Assessee has to be computed on the basis of evidence and material found during search. The statement recorded under Section 132(4) of the Act may also be used for making the assessment, but only to the extent it is relatable to the incriminating evidence/material unearthed or found during search. In other words, there must be a nexus between the statement recorded and the evidence/material found during search in order to for an assessment to be based on the statement recorded....

Though the above principle is laid down in relation to assessment of block period u/s 158 BC of the Act, the same was also applied in respect of assessment u/s 153A by Delhi High Court in case of Best Infrastructure (84 Taxmann.com 287) when it was held thus:

38. Fifthly, statements recorded under Section 132 (4) of the Act of the Act do not by themselves constitute incriminating material as has been explained by this Court in Harjeev Aggarwal (supra). Some more judgment on the issue are as under: Kailashben Mangarlal Chokshi Vs CIT (2008) 174 Taxmann 466 (Gun / (2008) 14 DTR 257 (Guj.) Merely on the basis admission, the assessee could not have been subjected to additions, unless and until some corroborative evidence was found in support of such admission. Further statement recorded at such odd hours (at midnight) could not be considered to be voluntary statement, it was subsequently retracted and necessary evidence was led contrary to such admission. Addition was deleted. Arun Kumar Bhansali Vs DCIT (2006) 10 SOT 46 (Bang) (URO)Block period 19909 1 to 1999-2000 — Whether while computing undisclosed income of assessee, Assessing Officer should take cognizance of such correct income as depicted in books of account as well as in seized material, and should not adopt a figure merely as per admission of assessee — Held, yes. Shree Chand Soni Vs DCIT (2006) 101 Till (JD) 1028 Search and seizure — Block assessment — consumption of undisclosed income — Addition based on the assessee's statement under s. 132 (4) — Admittedly, no incriminating document was found to support the impugned addition regarding bogus capital —Statement recorded under s. 132(4) does not tantamount to unearthing any incriminating evidence during the course of search — Therefore, no addition could be made only on the basis of such statement.

176 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT Pranav Construction Co. Vs Asstt. CIT (1998) 3 DTC 719 (Mum-Trib) (1998) 61 TTJ (Mum.-Trib) 145 It was held that the admission cannot be read as an Act of Parliament and that it has to be read in the context fairly and reasonably. The burden of incurring the expenditure can be discharged either by direct evidence or if such evidence is not available the assessee can always point out to circumstantial evidence supporting the claim. Thus, statement recorded under section 132(4) cannot be made:use for purpose of precluding assessee from claiming expenditure for earning income which assessee forgot to claim while making statement disclosing income. Smt. S.Jayalakshmi Ammal [2016] 74 taxmann.com 35 (Madras) "...While adverting to the above, we are of the considered view that, for deciding any issue, against the assessee, the Authorities under the Income Tax Act, 1961 have to consider, as to whether there is any corroborative material evidence. If there is no corroborating documentary evidence, then statement recorded under Section 132(4) of the Income Tax Act, 1961, alone should not be the basis, for arriving at any adverse decision against the assessee. If the authorities under the Income Tax Act, 1961, have to be conferred with the power, to be exercised, solely on the basis of a statement, then it may lead to an arbitrary exercise of such power. An order of assessment entails civil consequences. Therefore, under Judicial review, courts have to exercise due care and caution that no man is condemned, due to erroneous or arbitrary exercise of authority conferred...." "...If the assessee makes a statement under Section 132(4) of the Act, and if there are any incriminating documents found in his possession, then the case is different. On the contra, if mere statement made under Section 132(4) of the Act, without any corroborative material, has to be given credence, than it would lead to disastrous results. Considering the nature of the order of assessment, in the instant case characterized as undisclosed and on the facts and circumstances of the case, we are of the view that mere statement without there being any corroborative evidence, should not be treated as conclusive evidence against the maker of the statement..." Naresh Kumar Agarwal [2015] 53 taxmann.com 306 (Andhra Pradesh) "...it is admitted by the Revenue that on the dates of search, the Department was not able to find any unaccounted money, unaccounted bullion nor any other valuable articles or things, nor any unaccounted 177 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT documents nor any other valuable articles or things, nor any unaccounted documents nor any such incriminating material either from the premises of the company or from the residential houses of the managing director and other directors. In such a case, when the managing director or any other persons were found to be not in possession of any incriminating material, the question of examining them by the authorised officer during the course of search and recording any statement from them by invoking the powers under section132(4) of the Act, does not arise. Therefore, the statement of the managing director of the assessee, recorded patently under Section 132(4) of the Act, does not have any obviously based on the well- established rule of evidence that mere confessional statement without there being any documentary proof shall not be used in evidence against the person who made such statement." Hon'ble Gujarat High Court, vide its order dated 14.07.2016, in the case of CHETNABEN J SHAH LEGAL HEIR OF JAGDISHCHANDRA K. SHAH, in TAX APPEAL NO. 1437 of 2007, laid down the ratio that no additions can be made in the hands of the assessee merely on the basis of statements recorded, during the course of search, under section 132(4). Hon'ble High Court in the above mentioned case relied on its earlier order in the case of Kailashben Manharlal Chokshi [2008] 174 Taxman 466 (Guj.),wherein a similar ratio was laid down. Further, in the case of Narendra Garg & Ashok Garg (AOP) [2016] 72 taxmann.com 355 (Gujarat), Hon'ble Gujarat High Court held that "....lt is required to be borne in mind that the revenue ought to have collected enough evidence during the search in support of the disclosure statement. It is a settled position of law that if an assessee, under a mistake, misconception or on not being properly instructed, is over assessed, the authorities are required to assist him and ensure that only legitimate taxes are collected. The Assessing Officer cannot proceed on presumption u/s 134(2) of the Act and there must be something more than bare suspicion to support the assessment or addition. In the present case, though the revenue's case is based on disclosure of the assessee stated to have been made during the search u/s 132(4) of the Act, there is no reference to any undisclosed cash, jewellery, bullion, valuable article or documents containing any undisclosed income having been found during the search..." 23.4 In view of above, I do not concur with the finding of AO regarding making the addition of Rs.5,96,73,21.3/- solely on the basis of statements of applicant. AO is directed to delete the addition 178 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT of Rs.5,93,76,213/-. On the facts and in the circumstances of the case, in view of above the ground No. 7 of the appeal is allowed.”

“Nitin Kedia's Statements were recorded under fear & duress and serious other discrepancies in recording of the Statement of Shri Nitin Kedia:- (a) If we see the copy of statement Shri Nitin Kedia recorded at F- 110 Evershine Tower, Vaisali Nagar, Jaipur (APB 85-92), we find that here the statements were commenced at 5.30 PM on 179 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT 19/11/2016, which remained continued up to 21-11-2016 except a small break for rest on 20-11-2016 (APB 89). Inhumanity is apparent. Shri Nitin Kedia was not allowed for break for dinner, sleep, breakfast, rest etc. as the statement at Evershine Tower started at 5.30 PM on 19/11/2016 which remained continuous upto 21-11-2016 except a small break for rest on 20-11-2016 (APB 89). This attitude of search party is against CHARTER OF RIGHTS AND DUTIES OF PERSONS SEARCHED AS REPORTED IN (1994) 208 ITR 5 (ST), which provides that the assessee has right to have facility of having meals etc at normal time. Shri Nitin Kedia was not allowed for break for dinner, sleep, breakfast, rest etc. Shri Nitin Kedia was kept whole night in office situated at Evershine Tower Vaisali Nagar, Jaipur where there is no facility of bed in office to sleep. Therefore, Shri Nitin Kedia was kept awaken whole night. All these were noting but torture to assessee with a motive to get the desired surrender and get the signature over the statement whatever recorded by the search party. (b) One person cannot be at two different places at same time. As per the copy of statement provided to assessee, Shri Nitin Kedia confirmed the surrendered the income made by Shri Nirmal Kedia in statement recorded on 20-11-2016 which started at 9 AM from question no. 4 (APB page 66). In last question no. 15 Shri Nitin Kedia was asked to submit the explanation over the confession statement made by his brother Shri Nirmal Kumar Kedia. (APB page 74). If we see the statement of Shri Nitin Kedia at Evershine Tower, (APB page 85-92) he was at Evershine Tower Vaishali Nagar, 180 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT Jaipur from 5.30 PM on 19-11-2016 to 21-11-2016 (up to conclusion of statement). Then how could be his availability at Kedia House on 20-11-2016 from 9.00 AM to conclusion of statement on 20/11/2016. Shri Nitin Kedia could not be present at two places at same time. The statement at Evershine Tower, Vaisali Nagar shows that Shri Nitin Kedia was present at Vaisali Nagar in between 5.30 PM on 19/11/2016 to 21-11-2016 (up to conclusion of statement) whereas the statement at Kedia House shows that Shri Nitin Kedia was present at Kedia House during 9.00 AM on 20/11/2016 to conclusion of statement. How it can be possible to record the statement of Shri Nitin Kedia at Kedia House on 20/11/2016. (c) Other discrepancies in statement Statement at Shop at Ganesh Nagar: - During the course of survey u/s 133A of the Act, statement of Shri Nitin Kedia was recorded at the premise Ganesh Nagar, 6A, Nadi Ka Phatak, Murlipura Jaipur. There are following discrepancies in the recording of statement by the survey team. c.i) Commencement of the statement and after recording 7 questions the postponing of the statement at same time As per the copy of the statement provided by the department, the department commenced the recording of the statement of Shri Nitin Kedia on 19/11/2016 at 2.00 PM. (APB page 75). After recording of answer to question number 1 to 7 in three pages, the statement was postponed for physical verification. The time marked for postponing the statement is 2.00 PM (APB page 77) i.e. commencement of the statement and postponing the 181 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT statement at same time which shows no time consumed in question, answer and in writing of 7 question answer on paper. c.ii) Shri Nitin Kedia could not be present at two places at same time on 19/11/2016. After postponing the statement at 2.00 PM, the statement was resumed at 6.30PM on 19-11-2016 (APB page 77) at Shops at Ganesh Nagar. This statement was again postponed at night 11.00 PM on 19-11-2016 (APB page 78). These statements were resumed at 10.00AM Morning on 20-11-2016 (APB page 79) and concluded on 20-11-2016 after recording answer to question no. 11 to 23. As per the copy of statement given, the assessee should be at Premise situated at Ganesh Nagar from 6.30PM to 11PM on 19-11-2016 and 10 AM to conclusion of statement on 20-11-2016. Question and answer for Q.No. 18-19 was in between 6.30 PM to 11PM. But if we see the copy of statement Shri Nitin Kedia recorded at F-110 Evershine Tower, Vaisali Nagar, Jaipur (APB 57-64), we find that here the statements were commenced at 5.30 PM on 19/11/2016, which remained continue upto 21-11-2016 except a small break for rest on 20-11-2016 (APB 61). Therefore, Shri Nitin Kedia could not be present at two places at same time on 19/11/2016. The statement at Ganesh Nagar shows that Shri Nitin Kedia was present at Ganesh Nagar in between 6.30 PM to 11 PM on 19/11/2016 where the statement at Evershine Tower in Vaisali Nagar shows that Shri Nitin Kedia was present at Vasali Nagar office during 5.30 PM on 19/11/2016 to 21-11-2016. How it can be possible to record the statement of Shri Nitin Kedia at Ganesh Nagar in between 6.30 PM to 11.00 PM on 19/11/2016.

182 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT This shows that the statements were prewritten and the search/survey team got the signature of Shri Nitin Kedia under duress, coercion and under inhumanity. This was the reason for not providing the copy of statements in spite of repeated request to ADIT and AO and other higher authorities. Shri Nirmal Kumar Kedia's Statements were recorded under fear & duress and serious other discrepancies in recording of the Statement of Shri Nirmal Kumar Kedia:- Search started on 19-11-2016 at residence situated at Kedia House near Nadi ka Phatak, Murlipura, Jaipur. Statement of Shri Nirmal Kumar Kedia started at 9.00 AM at residence on 19-11-2016 and suspended at 10.00AM (APB page 39-40). The department also carried out survey at office situated at Sanganer (about 30 Km from residence) on same day. Shri Nirmal Kumar Kedia was taken there by the officers of the department and his statement was started to record at 6.40 PM on 19-11-2016 at Sanganer office which continued upto 11.50PM on 19-11-2016 (APB Page 45-50). There was no break in statement for dinner and he was without dinner in night. He was sick and tired. So, a break in statement was given at 11.50 PM on 19-11-2016. In Sanganer Office there was no bed or other basic facilities. The assessee was kept awaken whole night and he was not allowed to go at home. On 20-11-2016 at early morning his statement was resumed at 6.30 AM. The assessee was kept tired, sleepless and without food, this was nothing but torture by the survey team to get the 183 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT desired surrender and sign on the prewritten statements. This was the reason of surrender of Rs. 5 crores in just in first effective question of the statement on 20/11/2016 (APB page 50) without any corroborative material or incriminating documents. Then the assessee was taken to Kedia House. The search party started to recorded the statement of the assessee at 1.00 PM (APB page 41). Here in very first question the assessee had to confirmed the surrender of Rs. 5 Crore made at Sanganer office and has to overall surrender Rs. 20 Crore without any corroborative material or incriminating documents. The assessee made surrender under inhumanity conditions created by search/ survey party. The search/survey party kept the assessee and his brother Shri Nitin Kedia whole night without sleep and without food, and they created an atmosphere of fear and duress where the assessee was forced to make the desired surrender. Therefore, no cognizance can be given the statements recorded during the search and survey. Copy of statement was not given in spite of repeated requests: - The survey/search party after recording of statement of assessee did not provide copy of statements to the assessee group. The assessee made the repeated request by following letters (copy at PB page 791- 800/Vol IV in APB for AY 2015-16):-

S.No Date of letter Addressed to Copy of letter given to 1 Dated ADIT-3 Jaipur 1. Principal Director of 21/11/2016 Income Tax, Investigation, Jaipur 2. Additional Director of Income Tax, Investigation, Jaipur.

184 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT 2 Dated DCIT Central 1. Principal Commissioner 08/03/2017 Circle-3, of Income Tax, Central, Jaipur Jaipur 2. Principal Director of Income Tax, Investigation, Jaipur 3. Additional Director of Income Tax, Investigation, Jaipur.

The assessee group was under bonafide belief that since the survey/search party has not given the copy of the statements, therefore, the same would not be used against them.

This attitude of search party is against CHARTER OF RIGHTS AND DUTIES OF PERSONS SEARCHED AS REPORTED IN (1994) 208 ITR 5 185 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT (ST), which provides that the assessee has right to have a copy of any statement that is used against him by the department.

After the survey/search several requests were made to Investigation wing as well as AO to provide the copy of statements recorded by the survey/search party. After the continuous efforts of the assessee group, the copy of the statements were provided on 19.01.2018 (Friday) and thereafter on very first working day i.e. 22.01.2018 the assessee filed the affidavit (Copy at APB Page 97-107) before ld. AO to retract the statements. The relevant para of the affidavit is as under: - (ii) In reply to the Q. No. 4 and 5 of the statement I accepted to having been earned undisclosed income of Rs. 20 Crore from sales of plots/buildings by my concern naming Kedia Real Estate LLP while no such income was actually earned by me or our business concerns or my family members. The entire receipts and payments pertaining to our group are duly recorded in books of accounts/ITR of respective person. No unaccounted money was received by me or our business concerns or my family members against any transactions and likewise no unaccounted payments/investments were made. During the course of search, the search party said to me that several documents and evidences have been found from various places which prove that undisclosed payment has been received against sales. Since major sales were made through staff/sales team/business associates and during the course of search/survey we were not able to contact them therefore the correctness of documents found as a result of search/survey and its contents could not be verified, therefore under misconception/misrepresentation by search/survey party, and under fear and mental tension this wrong surrender was made. iii) In the reply to the Q. No. 4 of my statement it was accepted that the undisclosed income of Rs. 20 Crore was expended/invested in making payment of Rs. 5 Crore for purchases of 3 Bigha 18 Biswa land, Rs. 1.02 Caror for investment in Jewellery, part amount for purchases of some plots by way of agreements in my name and balance amount by way of advance & other heads in difference projects of LLP. Actually no such unaccounted investment/expenditure was made for any purposes by me or our business concerns or my family members. The clarification regarding admission of payment of Rs. 5 Crore has 186 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT been given in forgoing para. The excess Jewellery found as a result of search pertains to our grandparents which was found in search held in the year 1996. No evidence regarding other unaccounted investment/expenses was found to the search party. Thereafter during the course of assessment proceedings, the ld. AO recorded the statement of assessee on 23.02.2018 wherein, the assessee explained the factual position. (APB pg 108-118).

Thus, the surrender of Rs. 20 crores made by the Assessee during the course of search was not voluntarily but the same was because of mental tension, fear and under torture and inhumanity conditions.

The Board of direct taxes issued instruction to the All Chief Commissioners of Income Tax, (Cadre Contra) & All Directors General of Income Tax Inv. vide letter F. No. 286/2/2003-IT (Inv) dated 10.03.2003 in regard of confiscatory statement in the course of search and seizer. The Board has again issued a Circular dated 18th December, 2014 and advised the taxing authorities to avoid obtaining admission of undisclosed income under coercion/undue influence.

But in spite of clear-cut board circular the surrender of income was taken by the search/survey party without having any corroborative or incriminating material.

The Addition cannot be made merely on the basis of search statement Except to search statement which was later on retracted by assessee by filing affidavit there is nothing with the department to visualize that the assessee has undisclosed income. The AO herself has made addition for the balancing amount merely on confession statement. Further, in confession statement the person wise and year wise bifurcation was not 187 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT given by the assessee. Further, the confession statement is not in relation to incriminating documents. It is well settled principal of law that no addition can be made only on the basis of survey/search statement more so when there is no supporting evidence with department to prove that the surrender made in the statement was correct. The department has no evidence/documents which prove that surrender in statement by assessee is correct, therefore the same cannot be relied upon.

Further Reliance is placed on the following decisions :-

(i) Apex Court in the case of Pullangode Rubber Produce Co Ltd v/s State of Kerala & Another (1973) 91 ITR 18 (SC) has held that admission is an extremely important piece of evidence but it can’t be said that it is conclusive. It is upon to the assessee to show that it is incorrect.

(ii) Hon’ble Rajasthan High Court in the case of CIT v/s Ashok Kumar Soni 291 ITR 172 (Raj.) has held that admission in statement during search is not conclusive proof of fact and can always be explained.

(iii) Hon’ble Rajasthan High Court in the case of Mantri Share Brokers PL (96 taxmann.com 279) have held as under:

Section 69B of the Income-tax Act, 1961 - Undisclosed investments (Burden of proof) - Whether where except statement of director of assessee-company offering additional income during survey in his premises, there was no other material either in form of cash, bullion, jewellery or document or in any other form to conclude that statement made was supported by some documentary evidence, said sum could not be added in hands of assessee as undisclosed investments - Held, yes [Paras 10-11] [In favour of assessee] 188 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT Para 10 & 11 of the order is as under : 10. Before proceeding with the matter, it will not be out of place to mention that except the statement in the letter, the AO has no other material on record to assess the income of Rs. 1,82,00,000/-.

11. It is settled proposition of law that merely on the statement that too also was taken in view of threat given in question No.36 as narrated by Mr. Gupta and the same sought to have been relied upon, there is no other material either in the form of cash, bullion, jewellery or document in any other form which can come to the conclusion that the statement made was supported by some documentary evidence. We have gone through the record and find that the CIT (A) has rightly observed as stated hereinabove, which was confirmed by the Tribunal. It would not be out of place to mention that this order of Hon'ble Rajasthan High Court has been confirmed by Hon'ble Supreme Court also.

Further, Hon’ble Delhi High court in case of Harjeev Agarwal (70 Taxmann.com 95) held: “…A plain reading of Section 132 (4) of the Act indicates that the authorized officer is empowered to examine on oath any person who is found in possession or control of any books of accounts, documents, money, bullion, jewellery or any other valuable article or thing. The explanation to Section 132 (4), which was inserted by the Direct Tax Laws (Amendment) Act, 1987 w.e.f. 1st April, 1989, further clarifies that a person may be examined not only in respect of the books of accounts or other documents found as a result of search but also in respect of all matters relevant for the purposes of any investigation connected with any proceeding under the Act. However, as stated earlier, a statement on oath can only be recorded of a person who is found in possession of books of accounts, documents, assets, etc. Plainly, the intention of the Parliament is to permit such examination only where the books of accounts, documents and assets possessed by a person are relevant for the purposes of the investigation being undertaken. Now, if the provisions of Section 132(4) of the Act are read in the context of Section 158BB (1) read with Section 158B (b) of the Act, it is at once clear that a statement recorded under Section 132(4) of the Act can be used in evidence for making a block assessment only if the said statement is made in the context of other evidence or material discovered during the search. A statement of a person, which is not relatable to any incriminating document or material found during search and seizure operation cannot, by itself, trigger a block assessment. The 189 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT undisclosed income of an Assessee has to be computed on the basis of evidence and material found during search. The statement recorded under Section 132(4) of the Act may also be used for making the assessment, but only to the extent it is relatable to the incriminating evidence/material unearthed or found during search. In other words, there must be a nexus between the statement recorded and the evidence/material found during search in order to for an assessment to be based on the statement recorded….” Though the above principle is laid down in relation to assessment of block period u/s 158 BC of the Act, the same was also applied in respect of assessment u/s 153A by Delhi High Court in case of Best Infrastructure (84 Taxmann.com 287) when it was held thus:

Hon’ble Madras High Court in the case of Smt. S. Jayalakshmi Ammal [2016] 74 taxmann.com 35 (Madras) “…While adverting to the above, we are of the considered view that, for deciding any issue, against the assessee, the Authorities under the Income Tax Act, 1961 have to consider, as to whether there is any corroborative material evidence. If there is no corroborating documentary evidence, then statement recorded under Section 132(4) of the Income Tax Act, 1961, alone should not be the basis, for arriving at any adverse decision against the assessee. If the authorities under the Income Tax Act, 1961, have to be conferred with the power, to be exercised, solely on the basis of a statement, then it may lead to an arbitrary exercise of such power. An order of assessment entails civil consequences. Therefore, under judicial review, courts have to exercise due care and caution that no man is condemned, due to erroneous or arbitrary exercise of authority conferred….” “…If the assessee makes a statement under Section 132(4) of the Act, and if there are any incriminating documents found in his possession, then the case is different. On the contra, if mere statement made under Section 132(4) of the Act, without any corroborative material, has to be given credence, than it 190 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT would lead to disastrous results. Considering the nature of the order of assessment, in the instant case characterized as undisclosed and on the facts and circumstances of the case, we are of the view that mere statement without there being any corroborative evidence should not be treated as conclusive evidence against the maker of the statement…” Naresh Kumar Agarwal [2015] 53 taxmann.com 306 (Andhra Pradesh) “…it is admitted by the Revenue that on the dates of search, the Department was not able to find any unaccounted money, unaccounted bullion nor any other valuable articles or things, nor any unaccounted documents nor any other valuable articles or things, nor any unaccounted documents nor any such incriminating material either from the premises of the company or from the residential houses of the managing director and other directors. In such a case, when the managing director or any other persons were found to be not in possession of any incriminating material, the question of examining them by the authorised officer during the course of search and recording any statement from them by invoking the powers under section132(4) of the Act, does not arise. Therefore, the statement of the managing director of the assessee, recorded patently under Section 132(4) of the Act, does not have any evidentiary value. This provision embedded in sub-section (4) is obviously based on the well established rule of evidence that mere confessional statement without there being any documentary proof shall not be used in evidence against the person who made such statement..” Hon’ble Gujarat High Court, vide its order dated 14.07.2016, in the case of CHETNABEN J SHAH LEGAL HEIR OFJAGDISHCHANDRA K. SHAH, in TAX APPEAL NO. 1437 of 2007, laid down the ratio that no additions can be made in the hands of the assessee merely on the basis of statements recorded, during the course of search, under section 132(4). Hon’ble High Court in the above mentioned case relied on its earlier order in the case of Kailashben Manharlal Chokshi [2008] 174 Taxman 466 (Guj.),wherein a similar ratio was laid down. Further, in the case of Narendra Garg & Ashok Garg (AOP) [2016] 72 taxmann.com 355 (Gujarat), Hon’ble Gujarat High Court held that “….It is required to be borne in mind that the revenue ought to have collected enough evidence during the search in support of the disclosure statement. It is a settled position of law that if an assessee, under a mistake, misconception or on not being properly instructed, is over assessed, the authorities are 191 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT required to assist him and ensure that only legitimate taxes are collected. The Assessing Officer cannot proceed on presumption u/s 134(2) of the Act and there must be something more than bare suspicion to support the assessment or addition. In the present case, though the revenue's case is based on disclosure of the assessee stated to have been made during the search u/s 132(4) of the Act, there is no reference to any undisclosed cash, jewellery, bullion, valuable article or documents containing any undisclosed income having been found during the search…” CIT v/s G.Krishnan (1994) 210 ITR 707 Mad. Held, that additions cannot be made merely on the basis of statements.

The Jodhpur ITAT Bench in Maheshwari Industries v. Asstt. CIT [2005] 148 Taxman 74 (Jodh) (Mag.) has held that additions should be considered on merits rather than on the basis of the fact that the amount was surrendered by the assessee. It is settled legal position that unless the provision of statute warrant or there is a necessary implication on reading of section that the principles of natural justice are excluded, the provision of section should be construed in manner incorporating principles of natural justice and quasi judicial bodies should generally read in the provision relevant section a requirement of giving a reasonable opportunity of being heard before an order is made which will have adverse civil consequences for parties effected.

Rajesh Jain Vs. DCIT 100 TTJ 929 (ITAT, Delhi 'A' Bench) Search and seizure - Block assessment - Retraction of statement - Addition of Rs.25 lacs made solely on the basis of confessional statement of assessee that he earned the said amount in the last ten years was not justified - Confessional statement should be corroborated with some material to show that assessment made is just and fair.

KRISHNA TERINE (P) LTD. vs. ASSISTANT COMMISSIONER OF INCOME TAX, ITAT, AHMEDABAD ‘D’ BENCH 56 DTR, ITAT 395 Held that it appears that both the additions have been made by the AO because the assessee in the statement under s. 132(4) of the IT Act made surrender of the above amounts but later on did not disclose the same in the return of income filed for the block period. However, on consideration of the orders of the authorities below, we are of the view that no evidence or material is 192 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT discussed to show any incriminating material recovered during the course of search to make the above additions. The Tribunal in the first round of proceedings has already directed to examine the case on the basis of material seized, material available on record and books of account. In the absence of any specific findings as per the direction of the Tribunal dt. 31st May, 2005 and as per law for the block assessment noted above, before making the addition on the above issue the AO and the learned CIT(A) should have specified as to what material was found during the course of search to make the above additions. In the absence of any proper explanation and finding in the above grounds, we set aside the orders of the authorities below and restore these two grounds of appeal to the file of the AO with direction to re-decide both the grounds afresh on the basis of material seized, material available on record and the books of accounts as is directed by the Tribunal earlier vide order dt. 31st May, 2005 and in accordance with law for the block assessment as noted above.

The law relating to retraction is well-settled by Supreme Court in Sri Krishna V. Kurukshetra University, AIR 1976 SC 376, wherein it is held that if the original statement suffers from any defects, the person is entitled to go back on the statement already made by making correct statement. The Supreme Court have laid down the ratio, after considering S. 18 of the Evidence Act, 1872 that any admission made in the ignorance of the legal rights or under duress, cannot bind the maker of the admission. This right has been tested under Income-tax Act and the same has been upheld by Punjab & Haryana High Court in Kisan Lal Shivchand Rai v. CIT, (88 ITR 293).

Hon’ble ITAT Jaipur Bench in the case of Shri Pawan Lashkary dated 06.01.2012has held that income cannot be assessed merely on the basis of statement. Hon’ble ITAT has observed in Para 2.37 to 2.38 as under:- “2.37 The revenue has relied upon the statement of the assessee recorded during the course of search in which the assessee surrendered the amount on account of revaluation of land as undisclosed income. Kelkar Panel studied the problem of confessions and surrenders during its studies and deliberations in para 3.27 and the same is reproduced as under:

193 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT ‘’A cross section of people cutting across 4trade and industry complained of a high handed behaviour of raiding parties particularly while recording a statement. It was pointed out that overenthusiastic aiding parties would often coerce a ‘surrender’. As a result all follow up investigations are distracted and generally brought to a stand still. Since the surrender is not backed by adequate evidence, the tax evader invariably retracts from the statement of surrender by which time it is too late for the Department to resume investigations. Similarly, where adequate evidence is indeed found, a surrender is not necessary to establish tax evasion. Therefore, the Task Force recommends that the CBDT must issue immediate instructions to the effect that no raiding party should obtain any surrender whatsoever. Where a tax payable desires to voluntarily make a disclosure, he should be advised to make so after the search. As a result, the taxpayer will not be able to allege coercion and successfully distract investigations. All cases where surrender is obtained during the course of the search in violation of the instructions of the CBDT, the leader of the raiding party should be subjected to ‘vigilance enquiry. Further the task force also recommends that statements recorded during the search should be video recorded. This will indeed add to the confidence of the taxpayer in the impartiality of the system.’’ 2.38 The Finance Minister in the budget speech for the year 2003 stated that no confession shall be obtained during search and seizure operation. The instructions were followed by CBDT by issue of a circular on the lines desired by the Finance Minister. There can be an estoppel on the issue of the facts but there cannot be estoppel on the principle of law. It is not the case of the revenue that the assessee was not disclosing the amount received as a result of retirement from the firm. The assessee obtained the legal advice and was of the opinion that such revaluation is capital receipt which is not liable to tax. Hence, we feel that income cannot be added simply on the basis of surrender. The statement recorded u/s 132(4) can be rebutted by the assessee and the case of the assessee is that the amount is not liable to tax.” The search party took the similar type surrender in the case of M/s Suresh Medical Agency dated 21.08.2013, Shri Radhey Shyam Mittal ITA No 420/JP/2012 dated 26.08.2013, Shri Suresh Kumar Mittal ITA No 947/JP/2013 dated 24.09.2015 and Shri Madan lal Mittal ITA No 948/JP/2013 dated 24.09.2015. In these cases without having any corroborative material, the AO made the addition in these cases merely on the basis of search statement. In these cases the copy of statements were given at much later stage and the assessee retracted from the statement after receipt the copy of statement.

194 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT Hon’ble ITAT has deleted the addition in all these cases. The findings of Hon’ble ITAT in the case of Shri Radhey Shyam Mittal are produced as under:-

"6. We have heard parties with reference to material on record and case laws brought to our notice. The action under section 132 was carried out at assessee’s premises on 27.8.2008 and in the statement assessee made surrender of income of Rs. 30,00,000/- on account of income earned from trading of items in pharmaceutical business outside the books. The appellant, however, had been approaching the authorized officer to provide copy of statement so obtained in proceedings under section 132 of the Act. When these statements were not provided, the appellant vide letter dated 3.10.2008 addressed to the authorized officer and another letter dated 18.12.2008 addressed to the assessing authority requested to provide the copy of statement in case the same were to be used against him. Till such time the copy of statement was not provided, assessee entertained a bonafide belief that in the absence of any documentary evidence or corroborative evidence having been found as a result of search, such statement would not be used against him. If such statements were to be used, the department was under legal obligation to have provided the copy thereof to the appellant. It is only on persistent efforts of the appellant, copies of statement were provided only on 13.3.2009. The appellant after understanding the legal implication of such statement made a valid retraction as the surrender was not supported by any corroborative evidence. The affidavit filed in this regard is laid on assessee’s paper book pages 64 to 68. This affidavit has carefully been perused. After the affidavit was filed before the assessing authority, he remained silent on the face of it and carried no enquiry thereon to verify the correctness thereof. The assessee was also not cross examined on the point of retraction nor was required to produce any documentary evidence or any other evidence. Assessee was, therefore, entitled to assume that the income tax authorities were satisfied with the affidavit as sufficient on this point. The Hon'ble Allahabad High Court in the case of Sohan Lal Gupta vs. CIT (1958) 33 ITR 786 (All.), as also put to the parties during the course of argument, has made elaborate discussion on the evidentiary value of the affidavit. The relevant passage from the aforesaid judgment at page 791 of the report is reproduced as under :- “ The most important points on which the Tribunal relied, is that mentioned at No. 2, viz., that, according to the Tribunal, the assessee had not satisfactorily established that the shares had to be sold as the purchaser of the Jaswant Sugar Mills was not willing to purchase that mill unless the shares in the Straw Board Mills Ltd. held by the family were also transferred to him at the same time. On this point, the only material available on the record is the affidavit which was filed by the assessee before the Income-tax Officer. The assessee in his affidavit, had definitely stated that the purchaser wanted to purchase both the going concerns, the Jaswant Sugar Mills and the Straw Board Mills Ltd., together and one of his conditions of purchase was that all the shares of Lala Jaswant Rai, his sons and other relatives had to be transferred to the purchaser. The Income-tax Appellate Tribunal rejected this affidavit of the assessee on the mere ground that there was no documentary evidence in corroboration in the form of any 195 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT correspondence of otherwise on this point. Shri G.S. Pathak contended rightly before us that the Tribunal was not entitled to reject the affidavit on this point on such a ground. After the assessee had filed the affidavit, he was neither cross- examined on that point, nor was he called upon to produce any documentary evidence. Consequently, the assessee was entitled to assume that the Income-tax authorities were satisfied with the affidavit as sufficient proof on this point. If it was not to be accepted as a sufficient proof either by the Income-tax Officer or by the Appellate Assistant Commissioner of Income-tax or by the Income-tax Appellate Tribunal, the assessee should have been called upon to produce documentary evidence, or, at least he should have been cross-examined to find out how far his assertions in the affidavit were correct.”(emphasis supplied) The reliance placed by the assessee on the judgment by Hon'ble Apex Court in the case of Pullangode Rubber Produce Co. Ltd. (supra) and Hon'ble Rajasthan High Court in the case of Ashok Kumar Soni (supra) are well placed as the assessee has successfully demonstrated that the admission made during the course of search is not correct. The ingredient for retraction of statement made during the search, therefore, stand duly satisfied as the assessee is found to have made retraction within a reasonable time immediately after the copies of statement were provided to him. Furthermore, there being no material or evidence on record to show that appellant has carried any business outside the books for sale and purchase of items of pharmaceutical companies that could give rise to income to the extent of Rs. 30,00,000/-, addition merely on the basis of such statement which stood validly retracted could not have been made. On similar basis and reasoning in the case of Suresh Medical Agency another assessee of the group who were also searched on the same day along with this appellant, vide our order dated 21.8.2013 in have found the retraction made as valid and also deleted the addition. We, therefore, find no factual or legal justification in sustenance of addition by Ld. CIT (A) in this regard. As a result, the addition sustained by Ld. CIT (A) is deleted and ground no. 1 raised in appeal is allowed." Hon’ble ITAT Jaipur Bench in the case of Ashok Kumar Lakhyani vs DCIT ITA No 30/JP/2018 order dated 24/07/2018 held that “We have heard the ld. A/R as well as the ld. D/R and considered the relevant material on record. The assessee is engaged in the business of trading of Fertilizers and pesticides. A survey under section 133A of the I.T. Act was carried out at the business premises of the assessee on 19th December, 2012. During the course of survey action, an agreement to sale dated 1st March, 2012 executed between Shri Harish Kumar, the son of the assessee and one Shri Daya Kishan was found from the premises of the assessee. As per the said agreement Shri Harish Kumar agreed to purchase the plot of land from Shri Daya Kishan for a consideration of Rs. 6,75,000/- and a sum of Rs. 1,00,000/- was paid as an advance on the date of agreement and balance of Rs. 5,75,000/- was to be paid by 10th May, 2012. Accordingly, the assessee who is the father of Shri Harish Kumar in his statement recorded under section 133A surrendered the undisclosed income including the income of Rs.5,75,000/- on account of investment in plot. After the survey, the assessee vide letter dated 16.01.2013 informed the AO that 196 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT the agreement found during the survey was cancelled by his son though the assessee was not aware about this fact and, therefore, the surrender of Rs. 5,75,000/- on account of investment in the plot was mistakenly made during the survey. The assessee filed his return of income declaring undisclosed income of Rs. 24,50,000/- inclusive of Rs. 1,00,000/- on account of the advance given for purchase of land. The AO made an addition of Rs. 5,75,000/- which was not offered by the assessee to tax in the return of income but was surrendered during the course of survey proceedings. The assessee challenged the action of the AO before the ld. CIT (A) but could not succeed.

3. Having considered the rival submissions and the relevant material on record, we note that the assessee produced a sale deed dated 18.05.2012 whereby the owner of the land Shri Daya Kishan sold the said plot of land to third party Mrs. Nirmala Devi and, therefore, once the said plot of land was sold by the owner to third party and not to the assessee or his son, then the question of investment of Rs. 5,75,000/- which was to be paid at the time of sale deed does not arise. The AO has made the addition only on the basis of surrender made by the assessee during the course of survey though there was an agreement found during the survey action. As per the said agreement only Rs. 1,00,000/- was found to be paid by the son of the assessee as an advance for purchase of the plot of land and, therefore, to that extent the addition can be made if assessee has not surrendered the amount. Since the assessee has already surrendered the amount of Rs. 1,00,000/-, therefore no further addition can be made on account of investment in the land when the said agreement found during the course of survey was not given effect by the parties and the plot of land was sold by the owner to some third party vide sale deed dated 18th May, 2012. Hence, when the facts were brought on record by the assessee regarding the sale of plot of land to the third party, then the statement recorded under section 133A which is contrary to the actual facts, cannot be a basis of addition. Accordingly, in the facts and circumstances of the case, the addition made by the AO is not sustainable in law and the same is deleted.” The following decisions of Hon’ble Rajasthan High Court is distinguishable on facts. Therefore the addition cannot be sustained on the basis of the following decisions:- a) 2018 (11) TMI 953 - Rajasthan High Court Pr. Commissioner Of Income Tax (Central) , Jaipur Versus Shri Roshan Lal Sancheti, Prateek-13 In this case in the search, on the basis of seven loose papers were seized on which the assessee had written various amounts showing undisclosed investment in construction, purchase and advances the assessee agreed to surrender amount of Rs. 2,28,44,545/-. Thereafter, the statement of the assessee on these seven papers was recorded on 27.09.2012 where surrender of the aforesaid amount was made by the assessee.

197 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT But in the case of the assessee, the surrender is not relatable to any material. Further, the surrender was obtained under duress, coercion, and in the atmosphere of fear. Further, in view of several discrepancies pointed out by the assessee in recording of the statement, the recording of statement is against the principle of natural justice vitiated in law and no cognizance of these statements should be taken. b) 2016 (5) TMI 1304 - RAJASTHAN HIGH COURT CIT, Bikaner Versus Ravi Mathur and others In this case the assessee agreed to surrender certain amount on the basis of incriminating documents, cash, jewellery etc., in statements recorded under Section 132(4) on 9.11.1995 and later, however, it was contended by the assessee that the statements under Section 132(4) of the Act was not correct and the amounts which were taken into lakhs are in thousands and attempted to retract from the statements made at the time of search and seizure operation. But in the case of the assessee, the surrender is not relatable to any material. Further, the surrender was obtained under duress, coercion, and in the atmosphere of fear. Further, in view of several discrepancies pointed out by the assessee in recording of the statement, the recording of statement is against the principle of natural justice vitiated in law and no cognizance of these statements should be taken. c) 2019 (4) TMI 1120 - Rajasthan High Court in the case of M/S Bannalal Jat Constructions Pvt. Ltd. Versus ACIT, Central Circle-2, Ajmer In this case a search was conducted at the business/residential premises of Shri Banna Lal Jat, the Director of appellant company - M/s. Bannalal Jat Constructions Private Limited, on 10.10.2014, in which he was also operating his proprietary concern in the name of M/s. Bannalal Jat Contractor. During the search proceedings at residential premises of Shri Bannalal Jat, a cash worth of ₹ 1,21,43,210/- was found and inventorised as per Annexure CF of Panchnama dated 11.10.2014. He, in his statement, recorded under Section 132(4) of the Income Tax Act, 1961 (for short ‘the IT Act’) during the course of search and even subsequent statement recorded under Section 131 of the IT Act, admitted the same as undisclosed income of the appellant-company. However, subsequently while filing the return of income for the relevant assessment year, the appellant-company did not offer the said undisclosed income to tax. Therefore, in this case, surrender was backed by cash found during the search. But in the case of the assessee, the surrender is not relatable to any material. Further, the surrender was obtained under duress, coercion, and in the atmosphere of fear. Further, in view of several discrepancies pointed 198 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT out by the assessee in recording of the statement, the recording of statement is against the principle of natural justice vitiated in law and no cognizance of these statements should be taken. In view of above submission this is to submit that the addition made by ld. AO is not justifiable and CIT (A) rightly deleted to such addition.

199 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT 119. As per mater on record, post search statement was recorded on 02.12.2016 wherein the assessee confirmed his earlier statement but here also no year wise or person wise bifurcation of undisclosed income could be given or worked out by the ADIT. Here the assessee has specifically stated that he has surrendered Rs. 20 Crore for peace and self satisfaction.

Order pronounced in the open court on 03rd June, 2019. Sd/- Sd/- ¼fot; iky jko½ ¼jes'k lh 'kekZ½ (VIJAY PAL RAO) (RAMESH C SHARMA) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 03rd June, 2019 204 ITA 124 to 126/JP/2019 & 286 to 288/JP/2019_ Shri Nirmal Kumar Kedia Vs DCIT *Ranjan आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू vihykFkhZ@The Appellant- Shri Nirmal Kumar Kedia, Jaipur. 1. izR;FkhZ@ The Respondent- The DCIT/ACIT, Central Circle-3, Jaipur. 2. vk;dj vk;qDr@ CIT 3. vk;dj vk;qDr¼vihy½@The CIT(A) 4. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. xkMZ QkbZy@ Guard File (ITA No. to 126/JP/2019 & 6. 286 to 288/JP/2019) vkns'kkuqlkj@ By order,

सहायक पंजीकार@Aेेज. त्महपेजतंत