SHRI LALTA PRASAD CHOUDHARY,GWALIOR vs. THE DCIT 1(1), BHOPAL

PER BENCH:

The above captioned appeals are filed against the following orders of the ld. CIT(A):

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SN ITANo. Name CIT(A) order Appeal o date filed by the Revenues or assessee 1 & ITA(SS) Mukesh Sharma 30.01.2013 Revenue & 2 No.88/Ind/2013 & CO Assessee NO.76/Ind/2014 3 ITANo.189/Ind/2013 Vinod Vaish 31.01.2013 Revenue 4 ITANo.699/Ind/2016 Suresh Kumar 22.03.2016 Assessee Upadhya 22.03.2016 Assessee 5 ITANo.700/Ind/2016 Chandra Kumar Sharma 22.03.2016 Assessee 6 ITANo.701/Ind/2016 Sanjay Kumar Sahu 22.03.2016 Assessee 7 ITANo.702/Ind/2016 Sukhdev Singh Dhariwal 22.03.2016 Assessee 8 ITANo.703/Ind/2016 Khemraj Singh Chauhan 22.03.2016 Assessee 9 ITANo.704/Ind/2016 Kamlesh Kumar Choudhary 22.03.2016 Assessee 10 ITANO.705/Ind/2016 Santosh Kumar Sharma 22.03.2016 Assessee 11 ITA No.706/Ind/2016 Lalta Prasad Choudhary 22.03.2016 Assessee 12 ITANo.707/Ind/2016 Pradeep Kumar Sharma 22.03.2016 Assessee 13 ITANo.708/Ind/2016 Ramesh Chandra Parashar 22.03.2016 Assessee 14 ITANo.709/Ind/2016 Vijay Kumar Shrivastava 22.03.2016 Assessee 15 ITANo.710/Ind/2016 Dharmendra K. Choudhary 22.03.2016 Assessee 16 ITANo.711/Ind/2016 Ram Kumar Swami 22.03.2016 Assessee 17 ITANo.542/Ind/2017 Virendra Kumar Sharma

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objection in the case of Shri Mukesh Sharma pertaining to A.Y.2009-10

4 Briefly stated facts as culled out from the records are that the assessee is an individual deriving income from business and profession and agriculture. Search and seizure action u/s 132 of the Act was conducted at residential premises of the assessee on 21.07.2008. During the course of search various incriminating material were found and seized. During the course of search proceeding assessee surrendered income on various counts. Consequently, notice u/s 153A of the Act dated 10.07.2009 served upon the assessee for making necessary compliances. The assessee filed return of income on 11.02.2010 in response to notice u/s 153A of the Act for A.Y.2009-10 declaring total income of Rs.4,55,29,800/- and agricultural income of Rs.12,13,089/-. Questionnaire was issued calling various informations. Details filed by the assessee were examined along with seized documents. Income assessed at total income of Rs.7,79,03,480/- after making following additions to the income shown by the assessee:- A.Y. 2009-10 Amount Total income as shown in the 4,55,29,800 return of income filed in response to notice u/s 153A of the IT. Act Add: Non-genuine agricultural income 9,60,589 treated as income from undisclosed sources Add: Unexplained investment in share 1,50,00,000 capital out of income from undisclosed sources as per 7

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discussion in para 3 above Add: Unexplained investment in Gold 6,67,090 jewellery as per discussion in apara 5 above Add: Payment of ON money for 87,46,000 purchase of land as per discussion in para 6 above Add Non-genuine unsecured loans as 70,00,000 per discussion in para 8 above Total Income 7,79,03,479 Rounded Off; 7,79,03,480 Agricultural income 252500 5. Against various additions made by the Ld. Assessing Officer (in short Ld. AO) assessee filed appeal before the Ld. CIT(A) and partly succeeded.

I.T.(SS) No.88/Ind/2013 (Revenue) “On the facts and in the circumstances of the case, the CIT(Appeal) has erred in 1. Not following the provisions of section 250(1) of the Income Tax Act 1961 by not giving a notice to the Assessing Officer of the date and place for the hearing the appeal, 2. Not following the provisions of section 250(2) of the Income Tax Act 1961 by not providing the Assessing Officer an opportunity of being heard at the hearing of the appeal. 3.admitting additional evidences without following the provisions of rule 46A of the Income Tax Rules and relying on the facts of the case not presented by the assessee before the AO

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C.O.No.76/Ind/2014 (Assessee)

That on facts and circumstances of the case and in law and in any view of the matter, the Ld. Assessing officer and Ld. CIT (A), Bhopal have erred in assessing and upholding the agricultural income at Rs.25,000/- and Rs.30,000/- per acre respectively as against total agricultural income declared Rs.12,13,089/- for 10.1 acres of agriculture land which come to Rs.1,20,100/- per acre. The summary of which is as under:

Area of Land Agri. Income Agr income Agr income after Addition after declared assessed appeal effect appeal effect 10.1 Acres 12,13,089 i.e. 2,52,500 i.e 3,03,000 i.e. 1213069- Rs.1,20,100/- per Rs.25,000/- Rs.30,000/- per 303000+910089 acre per acre acre deletion i.e. Rs.90108/- addition Rs.50500/- per acre Rs.9,60,589/- (303000-252500) 2. That on facts and circumstances of the case and in law and in any view of the matter, Commissioner of Income Tax (Appeals), Bhopal has correctly deleted the addition of Rs. on account of alleged unexplained investment in shares. 3. That on facts and circumstances of the case and in law and in any view of the matter, the Id Assessing Officer and Ld. Commissioner of Income Tax (Appeals), Bhopal , have erred in making and up holding the addition of Rs. 6,67,090/- and Rs 86,535/- on account of unexplained investment in Jewelry. 4. That on facts and circumstances of the case and in law and in any view of the matter, the Id Commissioner of Income Tax (Appeals), Bhopal has

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correctly deleted the addition of Rs. 87,46,000/- on account of alleged unexplained investment as payment of on money in purchase of land. 5. That on facts and circumstances of the case and in law and in any view of the matter, the Id Assessing Officer and Id Commissioner of Income Tax (Appeals), Bhopal , have erred in making and up holding the addition of Rs. 70,00,000/- and Rs. 5,00,000/- on account of non genuine unsecured loans. That, the respondent craves leave to add and/or amend any ground(s) of the cross objection before and/or at the time of hearing. Revenue’s appeal for A.Y. 2009-10 in case of Mukesh Sharma

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officer for preparing remand report to be submitted to Ld. CIT(A).

We therefore, allow the revenue’s ground No.3 holding that the ld. CIT(A) erred in admitting additional evidences without following provisions of Rule 46A of the IT Rules. Ground No.3 of the Revenue’s appeal is allowed.

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adjudicating the issue given following finding of facts by directing the assessing officer to estimate agricultural income of Rs.25,000/- per acre for A.Y. 2003-04 and Rs.30,000/- for A.Y. 2006-07 to 2009-10 respectively.

6) Ground No.3 This ground of appeal is directed against treating of part of the agricultural income as non-genuine and income from undisclosed sources. The AO has observed that the appellant was required to substantiate the claim of earning agricultural income shown at the declared amount by furnishing documentary evidences regarding holding of agricultural lands, details of agricultural lands put to cultivation, crops grown, quantities produced, sale consideration, expenses incurred, etc. and also to file agricultural profit and loss account. It was held that as per details filed, the agricultural income comes as high as Rs.57,500/- per acre in A.Yr.2003-04 and Rs.1,20,100/- in A.Y..2009-10. The crops cultivated were traditional crops, like wheat, chana, hence, it was possible to earn such huge income. It was also observed that out of nearly 10 acres of agricultural land owned in 2005-06 to 2009-10, around 6 acres is located at village Kalapani, where only one crop of Soybean was grown. According to the AO, hardly any income would have been earned from the other smaller pieces of land. Giving the details of copies of 34 bills for expenses, and summarizing his findings, the AO has observed that the relevant documents relied also include papers pertaining to the appellant's spouse. Most of the bills vouchers did not bear the name of the purchaser. Out of 34 bills/vouchers only 15 bear the name of the appellant and could be related to his agricultural income. The petrol and diesel expenses may not relate to agricultural operations of the assessee and his family. The bills relating to purchase of khali, chunni, etc. relate to diary business. The gross agricultural receipts for the assessment years 2003-04 to 2009-10 were claimed at Rs. 42,63,178/-, but sale vouchers for Rs.l,22,337/- only were produced and out of six sale bills 13

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produced, 4 bills relate to A.Yr.2010-11, which appear to have been obtained after search only to support claim of huge agricultural income. It was also held that the sale bills themselves cannot prove that the produce sold was obtained from the appellant's land and even a trader can sell food grains in mandi or to other traders and receive the payments through cheques and it did not mean that such income relates to agriculture income. It was also held that both wheat and chana are Rabi crops and cannot be grown simultaneously. The claim of 80 qtl.chana and 290 qtl wheat sold in the month of May, 09 is not practicable. Referring to the legal position settled in various case-laws cited at page 39 of the assessment order, the A.O. has held that the onus to prove that income sought to be taxed is agricultural income lies on the appellant, which has not been properly discharged. Therefore, the AO has rejected the tall claims. However, after considering the orders of Hon'ble ITAT, Jabalpur Bench in the case of Shri Suresh Chand Khausal vs ITO Itarasi and Shri Dulichand Goel vs DCIT, Indore and CIT vs Paras Kumar Samirmal Jain, Indore, where the agricultural income was held acceptable respectively at Rs.15,000/- per acre in A. Yr. 1998-99 and at Rs.I0,0001- in the block period 01.04.1996 to 17.02.2002, the AO has estimated the agricultural income at Rs.20,000/-per acre in A.Yrs. 2003-(}4 to 2004-05 and at Rs. 25,000/- per acre in A.Yrs. 2005-06 to 09-10.pplying these standards, the following amounts were held as non-genuine agricultural income and treated the same as income from other sources.

Ayr. Agril. Income treated as income from other sources Rs. 2003-04 75,000/- 2004-05 78,000/- 2006-07 8,048/- 2007-08 1,24,412/-

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2008-09 3,90,000/- 2009-10 960589/-

6.1) In the course of appeal proceedings, the ld. Counsel for the appellant has contended that the appellant owned agricultural lands with all agricultural facilities. All the necessary details were submitted during the course of assessment proceedings and since the agricultural income was exempt, no regular and proper books of accounts were maintained. According to the ld. A.R, the AO has not doubted agricultural landholdings and cultivation activity. He has accepted a part of agricultural income and estimated the balance as non-agricultural on the ground that bills, etc. were not maintained. It was contended that the two comparable cases referred by the AO cannot be taken as correct, because, the agricultural produce obtained from two lands located at different places cannot be compared, as it largely depends on various factors like fertility, availability of irrigation facilities, nature of crops grown, area of cultivation, extent of agricultural inputs, extent of mechanization, climatic conditions, availability of fertilizers, pesticides and financial capacity of the cultivator to hold the crops to get better prices in the market. The AO has not considered all these factors and estimated the agricultural income on ad hoc basis at amounts much lesser than the income shown by the appellant. Therefore, according to the ld. AR, the action of the A.O. is not correct. Finally, the appellant has relied on the decision of Hon'ble Jodhpur Tribunal in the case of Kamal Kishore Chandak vs ITO (2006) 103 TTJ (Jd)843 to support his contentions. 6.2 I have gone through the observations of the AO and submissions of the appellant. The dispute covered in this ground of appeal relates to reasonableness of the quantum of agricultural income shown by the appellant with reference to his landholdings. There is no dispute regarding ownership of the land so also about the cultivation activities. However, the AO was of the opinion that the appellant had shown agricultural 15

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income highly disproportionate to the total lands put to cultivation and crops obtained. The average per acre agricultural income shown by the appellant is as

A.Y. Agril. Income shown per acre Rs. 2003-04 57,500/- 2004-05 41,667/- 2005-06 16,667/- 2006-07 25,745/- 2007-08 36,510/- 2008-09 61,110/- 2009-10 1,20,100/-

The onus to prove the claim of agricultural income, being an exempted income, heavily lies on the appellant In view of the detailed findings given in the assessment order and summarized above, the appellant has not satisfactorily explained the reasonableness of the quantum of agricultural income claimed to have been earned by him. There are huge variations in the figures shown in different years, for which no explanation was forthcoming. At the same time, the estimation made by the AO cannot be held to be reasonable. The AO did not conduct any independent enquiry from revenue authorities or cite comparable cases of the close localities to support his findings. The orders of the Han'ble ITAT Benches relate to different periods and the income held reasonable in the subsequent period is lesser than

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the preceding period. Thus, it is clear that the facts of those cases are different. However, in the absence of sufficient material to support the claim, the income prescribed in the Tribunal orders can be taken as indicative and after considering the consistent figure of agricultural income shown by the appellant, the AO is directed to estimate the agricultural income at Rs. 25,000 per acre for A. Y rs. 2003 -04 and 2004-05 and at Rs.30,0001- per acre in AYrs. 2006-07 to 2009-10. This ground of appeal is, therefore, partly allowed. date of bill being 28.01.2007, it relates to F.Yr.2006-07 relevant to A.Yr.2007-08 and not in the A.yr.2008-09. Therefore, the addition made by the AO is not correct.

11.2) I have gone through the observations of the AO and submissions of the appellant. Admittedly, this bill confirms the purchase of a phone in cash. The disputed paper being cash memo, mentioning of the appellant's name is not necessary. Further, as per of provision of Section 292C of the Act, the A.O. has rightly presumed that the said paper belongs to the appellant. The appellant has not rebutted the presumption. Therefore, the addition made by the A.O. is confirmed. However, since it pertains to A.Yr.2007-08, the AO is directed to exclude the same from computation total income for A.Yr. 2008-09 and include the same in the total income of A.Yr. 2007-08.The appeal is, accordingly, dismiss. 17. From perusal of the above finding of the Ld. CIT(A) which goes uncontroverted by the ld. DR, we observe that the Revenue authorities have nowhere disputed that the assessee holds agricultural land measuring 10 acres since last many years. It is a known fact that regular maintenance of books of accounts and 17

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documentary evidences for each and every transactions entered into during the course of agricultural operations for buying the seeds, labour charges, sale of produced, purchase of fertilizers etc. cannot be fully documented for various practical reasons. The AO has also not placed any contrary material to support its finding. Only remedy is estimation of income per acre. In certain cases as referred in the finding of the Ld. CIT(A), the tribunal has estimated income per acre at Rs. 15000/- during A.Y. 1998-99 and Rs.25000/- during A.Y. 2005-06.

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share premium of Rs.90 per share. During the course of search when the assessee was confronted with these documents, he admitted that the sum of Rs.1.50 crore was his undisclosed income and was introduced in the company PPTPL through various companies based in Kolkata. Later on in the income tax return filed in reply to notice u/s 153A of the Act the assessee failed to offer the alleged sum of Rs.1.50 corers for tax. Ld. AO conducted necessary inquiry to come to a conclusion that the invested companies based in Kolkata are merely accommodation entries providers and the alleged amount was undisclosed income of the assessee. When the matter come up before the Ld. CIT(A) the addition was deleted.

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no objection if the issue for unexplained investment of Rs.1.50 crores is set aside to the file of Ld. CIT(A) for deciding afresh.

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during the course of appellate proceedings conducted by the Ld. CIT(A) and therefore, all the issues raised in the revenue’s appeal and the cross objection are set aside to the file of the Ld. CIT(A) for deciding the issue afresh.

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sold during the A.Ys. 2002-03 and 2007-08. The Ld. Assessing Officer asked the assessee to explain the total jewellery of 2802.16 gms. Necessary reply was submitted and after considering the same Ld. Assessing Officer treated 402.160 gms jewellery asunexplained and made a addition of Rs.6,67,090/-. The assessee challenged this addition before the Ld. CIT(A) and partly succeeded.

This ground of appeal is directed against the addition ofRs.6,67,090/- made on account of unexplained investments in gold jewellery. The AO has observed that total gold jewellery 22

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having net weight of 1199.830 gms was found from the appellant's residence and the lockers available in the names of the appellant, his mother Smt. Vimla Rani Sharma and his wife Smt. Neena Sharma. It was held that Smt. Vimla Sharma and Smt. Neena Sharma have sold jewellery weighing 1602.330 gms in A.Yrs.2002-03 and 2007-08 and as per several purchase bills found during search, nearly 900 gms of jewellery was purchased in the names of the appellant, Smt. Neena Sharma and Smt. Vimla Rani Sharma. Therefore, the total jewellery of 2802.16 gms was required to be explained-by the appellant. The A.G. has held that gold jewellery totalling to 1500 gms might have been received by Smt. Vimla Rani Shrama, Smt. Neena Sharma and the appellant on various occasions including their marriage, receipts by inheritance, etc. but possession of the balance jewellery of 402.160gms (2802.160 less 1500 less 900 gms) remained unexplained. Therefore, he had worked out and made the addition at Rs.6,67,0901- applying the average rate taken in the valuation report prepared at the time of search. 13.1 In the course of appeal proceedings, the appellant has contended that the addition made by the AO is not justified. The appellant belongs to a well to do family and the entire jewellery was either inherited from the parents or received by the family members including their children on various occasions or purchased subsequently. In the course of intensive search, the details of jewellery sold and purchased were found and all these facts were accepted by the AO without any dispute. However, the AO has considered the jewellery received on marriages and other occasions by Smt. Vimla Rani Sharma, Smt. Neena Sharma and the appellant and received on inheritance only at 1500 gms. The jewellery received and owned by the unmarried children of the appellant i.e. son, Shri Indra Prakash and daughter Miss Ronak Sharma was not considered him. The balance quantity of 402.160 gms relate to the children. It was contended that even as per the CBDT's instructions regarding seizure of jewellery, jewellery in respect of unmarried daughter at 250 gms and unmarried son at 100 gm was to be considered reasonable. Therefore, even as per the standards of the Board, the credit of 23

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350 gms should have been allowed and after giving credit of 350gms of jewellery of the children, only meager quantity of 52.160 gms remains to be explained and looking to the family status, this much of jewelery deserves to be accepted, specifically, when the A.O. has adopted ownership of inherited jewelery on estimate basis. 13.2 I have gone through the observations of the AO and submissions of the appellant. It appears, looking to the family status, the AO has given credit for 1500 gms of jewellery as received by Smt. Vimla Rani Sharma and Smt. Neena Sharma and the appellant on their marriages and that was inherited by the family and it is reasonable. However, he did not consider the availability of jewellery in the case of the children and considering the family status, it cannot be ruled out. Therefore, after considering the facts and circumstances of the case, the appellant deserves further credit of350 gms of jewellery against holding of the children. However, there is no explanation available for the remaining quantity of 52.16 gms and the addition made by the A.O. deserves to be sustained to this extent. Therefore, applying the average rate of Rs.16.59 per gm, the unexplained investment comes to Rs.86,5351-. Accordingly the addition made by the A.O. is confirmed to this extent. The appellant gets relief of Rs.5,80,555/-. This ground of appeal is partly allowed. 32. The above finding of fact has not been controverted by the ld. DR. In our considered view the Ld. CIT(A) has rightly given the benefit of 350 gms of gold jewellery (250 gms for daughter and 100 gms for son) thereby giving relief of Rs.5,80,555/- and confirming the remaining amount as unexplained investment at Rs. 86,535/-. We therefore, find no reason to interfere in the finding of Ld. CIT(A) deleting the addition of Rs.5,80,555/- and same is upheld. Ground No.6 of Revenue’s appeal stands dismissed.

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S.No Name of the Amount Stamp Stamp Other Khasra Area Purchasers of Duty Paper fees sold Registry fee No./total (Rs.) (Rs.) (Rs.) aria (Rs.) 1 RC Parashar 2700000 239625 600 21775 556/(1.1 0.100 80 hec.) Hec. 2 -do- 2595000 230310 280 20935 556/(1.1 0.080 80 hec Hec. 3 Lalta Prasad 2647000 235000 3000 21355 556/(1.1 0.100 Choudhary 80 Hec.) hec. 4 Kamlesh 479000 42520 2500 4010 559/(0.1 0.020 Choudhary 60 Hec.) hec. 5 -do- 2168000 192500 3000 17520 557/(0.4 0.080 00 hec.) hec. 6 -do- 2647000 235000 3000 21355 556/(1.1 0.100 80 hec.) hec. 7 Khemraj singh 2647000 235000 3000 21355 556/(1.1 0.100 Chouhan 12680 80 Hec.) hec. 8 -do- 1563000 138720 680 12680 556/(1.1 0.060

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60 hec) Hec 9 -do- 1084000 96205 1000 8850 559/(0.1 0.040 60 hec. hec. 10 Santosh Kumar 2647000 235000 2500 21355 558/(1.1 0.100 Sharma 60 hec. hec. 11 Sukhdev Singh 2647000 235000 3000 21355 557/(0.4 0.100 00 hec. hec. 12 Suresh Upadhya 2647000 235000 3000 21355 556/(1.1 0.100 80 Hec.) hec. 13 Dharmendra 2647000 235000 3000 21355 556/(1.1 0.100 Choudhary 80 Hec.) hec. 14 Ram Kumar 2647000 235000 3000 21355 557/(0.4 0.100 00 hec. hec. 15 Virendra Kumar 2647000 235000 3000 21355 557/(0.4 0.100 Sharma 00 hec. hec. 16 Sanjay Sahu 2647000 235000 3000 21355 559/(0.1 0.100 60 hec. hec. 17 Pradeep Kumar 2647000 235000 3000 21355 559/(0.1 0.100 Sharma 60 hec. hec. 18 Chandra Kumar 2647000 235000 3000 21355 556/(1.1 0.100 Sharma 80 Hec.) hec. 19 Vijay Kumar 2647000 235000 3000 21355 556/(1.1 0.100 Shrivastava 80 Hec.) hec. Total 45000000 3994880 45560 363385 20 Mukesh Sharma 2647000 235000 900 21355 556/(1.1 0.100 80 Hec.) hec. 21 Mukesh Sharma 2647000 235000 900 21355 556/(1.1 0.100 80 Hec.) hec. Grand Total 50000000 4464880 47360 406095 54918335

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examined these transactions along with seized documents LPS-1/1 page No.74 (front and back) which contained certain calculations for the alleged land deal with Mr. Vinod Vaish. Ld. A.O observed that certain details of receipt and payments and some calculation were there on these loose papers. On back side certain calculations have been made. The alleged seized documents forms part of impugned assessment order at page 51to 55. When the assessee was confronted with these seized documents it was submitted that these are merely rough jottings and the calculations relates to the future planning of selling the agriculture land after converting it for residential purpose. However Ld. A.O was not convinced with the submissions. On observing the fact that the actual transaction relating to purchase of land was having some nexus with the seized document which included the reference to cheque payment of Rs.50 lakhs, area of land, the figure 225 mentioned in the seized document denoting the cheque of Rs.225 lakhs deposited in the bank account of co-purchasers. Ld. A.O also linked the amount of Rs.323 lakhs mentioned on the seized documents with the cash deposited in the bank account of the co-purchasers. On the basis of these facts Ld. A.O came to the conclusion that the actual deal of land was carried out at Rs.14,24,60,600/- out of which Rs.5 crores was the stated purchase consideration and Rs.49,18,335/- roughly to Rs.50 lakhs was the registry charges, stamp and other charges. Ld. A.O also held that the land measuring 4.70 acres which is equal to 43,560 sq.ft sold @Rs.660/- per sq.ft for total consideration of Rs.13,65,60,600/-

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and Rs.9,00,000/- was paid to a person named Kaushal Bhaiya for arranging entries in the name of various parties i.e. the co- purchasers. This unaccounted payment in the entire deal was worked out by Ld. A.O at Rs.8,74,60,600/- (Rs.13,65,60,600/-+ Rs.9,00,000/- (-) Rs. 5,00,00,000/-). Since the assessee’s share in the stated consideration is 1/10th only, the unaccounted payment alleged to have been made by the assessee was added at Rs.87,46,000/- as undisclosed income. On the basis of the finding by the Ld. A.O in the case of Mr. Mukesh Sharma addition for unaccounted receipt of Rs.8,74,60,600/- was also made in the hands of the seller namely Mr. Vinod Vaish. Subsequently Ld. CIT(A) vide his order dated 28.32013 passed u/s 263 of the Act held that the order of the Ld. A.O passed in the case of Mr. Mukesh Sharma dated 31.12.2010 was erroneous and prejudicial to the interest of revenue and directed the Ld. A.O to examine the issue of undisclosed income invested in the purchase of said agriculture land and to make total addition of Rs.8,74,60,600/- in the hands of Mr. Mukesh Sharma as the other co-partners were merely accommodation entry providers as they were funded by Mr. Mukesh Sharma to make the payment for purchase of property. However the assessee Mr. Mukesh Sharma succeeded in the appeal before the Tribunal against the order passed u/s 263 of the Ld. CIT(A) vide order dated 31.10.2014 in ITA No.366 to 372/Ind/2013 as the order passed u/s 263 of the Act dated 28.03.2013 was quashed by Tribunal.

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taken during the year to tax. Cash was deposited in their respective bank accounts which is alleged to have been received from Mr. Mukesh Sharma. She further submitted that various figures mentioned in the alleged seized documents seems to have direct nexus with the actual land deal and Ld. A.O was justified in making the addition for “on money” paid at Rs.8,74,60,600/-.

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at no stage the rate was Rs.660/- per sq.ft. It was also submitted that the land under consideration was agriculture land and un diverted land which was not commanding such price as assumed by the Ld. A.O. There is no corroborative evidence which could support the rough jottings made on the seized documents. Registered sale deed has been signed by all the concerned parties i.e. the buyers and sellers and transactions taken place through account payee cheques. Revenue authorities have not initiated any action for valuing the property by registered valuer or Departmental Valuation Officer so as to prove that the market price of the alleged agriculture land was much more than the stated sale consideration of Rs. 5 crores. He further submitted that all the other persons who are the co-partners in purchasing the land have filed their respective Income Tax Returns showing sufficient income to cover up the purchase consideration. Under these circumstances the addition made by the Ld. A.O was not justified and Ld. CIT(A) has rightly deleted the addition.

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Sr. Party Names & Proposition Para Page No. Citation No 1 (1998) SCC 410 CBI Entries appearing in loose paper Para 1-18 v. V.C. Shukla not seized from one person cannot 34 & from evidence for another person 39 2 (1988) 172-ITR Rule of evidence & Salutary Para 6 19-22 250/251 (Hon'ble principal of common law & 7 Supreme Court) jurisprudence Chuharmal vs. CIT 3 (2001) 70 TTJ (Ahd) The presumption under the Para 23-29 122 Prarthana provision of section 132(4A) would 12 Construction (P) in any case not applicable to a Ltd. vs. DCIT third party from whose possession such papers and documents have not been obtained 4 (1991) 39 ITD The loose sheet forming part of Para 30-38 183(Del) Ashwin seized material is a dumb 24 Kumar vs. ITO document and no addition can be made in the hand of assessee on the basis of dumb documents 5 (2005) 1 SOT 515 Whether entries found in loose Para 39-50 (Del) Nem Chand paper can have any authenticity 16 & Daga v. ACIT or evidentiary value value-in self- 21 held no 6 (2002) 82 ITD 85 Addition cannot be made on basis Para 51-62 (Mum) (TM) S.P. of entry on loose paper is has to 11 and Goyal vs. DCIT be supported by circumstantial para evidence and corroborative 15 of evidence Secon d part 7 (2008) 307 ITR The addition made by the AO Para 6 63-66 137(Guj) CIT vs. toward “on money” on the basis of Maulik Kumar K seized paper along without any Shah corroborative evidence accnot be sustained 8 (2007) 291 ITR 36 No addition can be made based on Para 67-70 (Delhi) CIT v. surmises and gues work 12 & Kulwant Rai 13 9 (2007) 289 ITR 509 Seized docuemnts are not a Para 71-75 ACIT v. Kences conclusive proof to arrive at 16 & Foundation P. Ltd. undisclosed income 17 10 (2009) 308 ITR 230 If there is no corroborative or Para 3 76-78 (Del) CIT v. D.K. direct evidence to presume that Gupta the notings/jottings has materialized into transactions giving rise to income not disclosed in the books by the assessee the department’s presumption cannot 32

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be tenable in law 11 (2008) 301 ITR 134 That seized document must be 15 & 79-83 (MP) Prakash speaking document no addition 16 Chand Nahta v. CIT permissible on the basis of dumb papers 12 (2007) 295 ITR That seized document must be Para 84- 352(Jabalpur speaking document no addition 29 110 I.T.A.T.) ACIT v. permissible on the basis of dumb Satyapal Wassam papers 13 (2008) 25 SOT 387 Since paper/documents seized on 111- (Kol) Nirmal search were found to be untenable 118 Fashions (P) L. v. and contrary to ther evidence on DCIT record impugned addition was not justified 14 (1997) 224 ITR 180 That suspicion however strong Para 5 119- CIT vs. Ram Narain cannot take the place of evidence & 6 121 Goel or proof 15 (2003) 262 ITR 295 It is settled proposition that the Para 3 122- (P & H) CIT vs. presumption however strong 124 Faqir Chaman Lal cannot substitute evidence 16 (2001) 250 ITR 539 The finding of the Income Tax Para 5 125- CIT vs. Emerald Officer and CIT(A) were based on & 6 126 Commercial Ltd. & presumption and not warranted Anr. by the facts of the case 17 332 ITR 468 (P&H) As such the Ld. CIT(A) to that Para 2 128 CIT vs. Atam Valves extent is justifies in holding that P. Ltd. estimation of sales on the basis of lose slips represented payment of wages is not possible 18 (2003) 84 ITD 320 The presumption under the Para 7 129- (Mum) Straptex provision of section 132 (4A) 135 (India) P. Ltd. v. would in any case not applicable DCIT to a third party from whose possession such papers and documents have not been obtained 19 (2006) 99 ITD 177 Dumb Documents or documents Para 136- (Del) with no certainty have no 36 153 evidentiary value 20 (2017) 394 ITR 220 Investigation could not have been 154- (Hon'ble Supreme directed in cas of high public 162 Court) Common functionaries on the basis of cause ( A registered legally inadmissible evidence in Society) v. UOI form of loose papers 21 (2018) 32 ITJ 510 AO made additions without any 36 163- (Trib- Indore) basis and only on the basis of 193 Assessment. CIT v. suspicion and doubts and the Narottam Mishra reference drawn by AO were also 33

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not base on the reliable evidence and material –CIT(A) was right in allowing relief to the assessee

Reliance was also placed on following judgments;

(i) Central Bureau of Investigation V V.C. Shukhla (1998) Taxmann.com 2155(SC) (ii) Chuharmal V/s Commissioner of Income Tax (1998) 172 TR 250/251 (SC) (iii) Prarthana Constructions Pvt. Ltd V/s Deputy Commissioner of Income Tax (2001) 70TTJ (Ahd) 122 (iv) Ashwin Kumar Vs Income Tax Officer (1991) 39 ITD 183 (Del) (v) Nem Chand Daga V/s Assistant Commissioner of Income Tax (2005) 1 SOT 515 (Delhi) (vi) S.P. Goyal Vs Deputy Commissioner of Income Tax (2002) 82 ITD 85 (Mum) (TM) (vii) Commissioner of Income Tax V/s Maulikumar K. Shah (2008) 307 ITR 137 (Guj.) (viii) Commissioner of Income Tax Vs. Kulwant Rai (2007) 291 ITR 36 (Delhi) (ix) Assistant Commissioner of Income Tax Vs. Kences Foundation Pvt. Ltd (2007) 289 ITR 509 High Court of Madras (x) Commissioner of Income tax Vs D.K. Gupta (2009) 308 ITR 230 (Del) High Court of Delhi (xi) Prakash Chand Nahta Vs Commissioner of Income Tax (2008) 301 ITR 134 (MP) High Court of Madhya Pradesh (xii) ACIT V/s Sri Satyapal Wassan (2007) 295 ITR 352 ITAT, Jabalpur Bench (xiii) Nirmal Fashions (P) ltd Vs. DCIT (2008) 25 SOT 387 (Kol) ITAT, Kolkata Bench (xiv) Commissioner of Income Tax Vs Tam Narain Goel (1997) 224 ITR 180, Punjab & Haryana High Court. (xv) Commissioner of Income Tax Vs. Faqir Chand Chaman Lal (2003) 262 ITR 295 (P&H) (xvi) Commissioner of Income Tax Vs. Emerald Commercial Ltd & Ors (2001) 250 ITR 539, High Court of Calcutta (xvii) Commissioner of Income Tax Vs. Atam Valves (P) Ltd 332 ITR 468 (P&H) (xviii) Starptex (India) (P) Ltd Vs. Deputy Commissioner of Income Tax (2003) 84 ITD 320 (Mum) (xix) Bansal Strips Pvt. Ltd Vs. Asstt. Commissioner of Income Tax (2006)

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99 ITD 177 (Del.) (xx) Common Cause (A registered Society) Vs Union of India (2017) ITR 220 (SC) (xxi) Asstt. Commissioner of Income tax Vs. Narottam Mishra (2018) 32 ITJ 510 (Indore) ITAT, Indore Bench. (xxii)Bansal Strips Pvt. Ltd V/s ACIT (2006) 99 ITD 177 (Del)

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S.No Name of the Amount Stamp Stamp Other Khasra Area Purchasers of Duty Paper fees sold Registry fee No./total (Rs.) (Rs.) (Rs.) aria (Rs.) 1 RC Parashar 2700000 239625 600 21775 556/(1.1 0.100 80 hec.) Hec. 2 -do- 2595000 230310 280 20935 556/(1.1 0.080 80 hec Hec. 3 Lalta Prasad 2647000 235000 3000 21355 556/(1.1 0.100 Choudhary 80 Hec.) hec. 4 Kamlesh 479000 42520 2500 4010 559/(0.1 0.020 Choudhary 60 Hec.) hec. 5 -do- 2168000 192500 3000 17520 557/(0.4 0.080 00 hec.) hec. 6 -do- 2647000 235000 3000 21355 556/(1.1 0.100 80 hec.) hec. 7 Khemraj singh 2647000 235000 3000 21355 556/(1.1 0.100 Chouhan 12680 80 Hec.) hec. 8 -do- 1563000 138720 680 12680 556/(1.1 0.060 60 hec) Hec 9 -do- 1084000 96205 1000 8850 559/(0.1 0.040 60 hec. hec. 10 Santosh Kumar 2647000 235000 2500 21355 558/(1.1 0.100 Sharma 60 hec. hec. 11 Sukhdev Singh 2647000 235000 3000 21355 557/(0.4 0.100 00 hec. hec. 12 Suresh Upadhya 2647000 235000 3000 21355 556/(1.1 0.100 80 Hec.) hec. 13 Dharmendra 2647000 235000 3000 21355 556/(1.1 0.100 Choudhary 80 Hec.) hec. 14 Ram Kumar 2647000 235000 3000 21355 557/(0.4 0.100 00 hec. hec. 15 Virendra Kumar 2647000 235000 3000 21355 557/(0.4 0.100 Sharma 00 hec. hec. 16 Sanjay Sahu 2647000 235000 3000 21355 559/(0.1 0.100 60 hec. hec. 17 Pradeep Kumar 2647000 235000 3000 21355 559/(0.1 0.100 Sharma 60 hec. hec. 18 Chandra Kumar 2647000 235000 3000 21355 556/(1.1 0.100 Sharma 80 Hec.) hec. 19 Vijay Kumar 2647000 235000 3000 21355 556/(1.1 0.100 Shrivastava 80 Hec.) hec. Total 45000000 3994880 45560 363385 20 Mukesh Sharma 2647000 235000 900 21355 556/(1.1 0.100 80 Hec.) hec. 21 Mukesh Sharma 2647000 235000 900 21355 556/(1.1 0.100 80 Hec.) hec. Grand Total 50000000 4464880 47360 406095 54918335

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which also included LPS 1/1 page No.74 & 75 (front and back).

These seized loose papers contained certain entries and calculations.

These are not signed by any of the parties. For better understanding

we reproduce below the scan copy of the typed version of seized

document on the basis of which the Ld. A.O came to a conclusion

that “ON MONEY’ of Rs.8,74,60,600/- was paid by all the

purchasers including the assessee to Mr. Vinod Vaish and to the

extent of assessee’s share in the land i.e. 10% addition for

unaccounted investment of Rs.87,46,000/- was made by the Ld. A.O.

In the assessment order Ld. A.O has reproduced the original seized

document as well as typed version of the seized documents which are

placed at page 53 and 55 of the paper book.

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Mr. Mukesh Sharma has denied to have made the alleged unaccounted investment. As far as these loose sheets are concerned it has been stated that the co-purchasers including the assessee were planning to sell the land in future @660/- per sq.ft. It is contended by Ld. Counsel for the assessee that the land purchased is agricultural land and as per the stamp valuation authorities the circle rate of the alleged land was below the stated purchase consideration of Rs.5 crores and by no stretch of imagination the value of the land can be Rs.13,65,60,600/- as shown in the alleged seized document at page-74 arrived at by multiplying 206910 sq.ft with the rate of Rs.660/- per sq.ft.

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“This ground of appeal is directed against addition of Rs.87,46,000/-- made on account of payment on money for purchase of land. The AO has observed that certain documents along with a memorandum of agreement for purchase of land of 1.9 hectares (4.70 acres) at Ratanpur, Miss Road near Bhopal was seized in the course of search at the appellant's residential premises. Further, it was held that in the course of subsequent enquiry, it was found that the. land was purchased by the appellant along with 14 other persons on 23.06.2008 for total sale consideration of Rs.5 crores and Rs.49,18,355/- (roughly Rs.50,00,000/-) was incurred towards registry charges, stamp duty, etc. This land was purchased from Shri Vinod Vaish and his family members through 21 registries. In the course of search, the appellant has admitted that the entire amount of Rs.5 crores pertains to him and he was ready to surrender the amount as his undisclosed income. The AO further held that seized documents showed that total payment of Rs.14,24,60,600/- was made in the land deal out of which Rs.5,50,00,000/- ( including registry charges) was paid and the balance amount was paid in cash over and above the stated purchase consideration. The AO has held that page no.74 ofLPS-1I1 and back side of the said page, give detailed calculations of the land deal with Shri Vinod Vaish. As per calculation given in page no.75, the area in sq.ft comes to 206910 sqfts and the total cost @Rs.660/- per sq.ft works out to Rs.13,65,60,600/- and after including Rs.50,00,000/- towards registry expenses and Rs.9,00,000/- paid to one Shri Kaushal Bhaiya, the total amount works out to Rs.14,24,60,600/-. The payment details are given on the reverse side on page no. 74. He further held that page no. 26 of loose paper of LPS-l/l give names of 14 persons in whose names the land was purchased. Therefore, the AO has concluded that the persons are known to the appellant and are under his control. The AO had further held that cheque payment of Rs.50,00,000/- mentioned in page no.74 backside gets corroborated with the actual cheque payment ofRs.50,00,000/- made on 23.05.2008. The area of the land and the registration expenses tally with the actual area of the land and the amount of expenditure incurred with the

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registration. The amount of 225 mentioned in this document denotes the amount of Rs. 225,00,000/- deposited in DDI cheque in the bank account of 14 purchases of Dabra. The amount of Rs.3,23,00,000/- mentioned on this document is the amount of cash deposited in the bank accounts of these 14 purchases. It was also held that the documents at page no. 74 backside and 75 also corroborated with each other. Accordingly, the AO has inferred that the total payment of Rs.14,24,60,600/- was made for purchasing the land and the unaccounted payments in the entire deals works out to Rs.8,74,60,600/- (Rs.l3,65,60,600 + 9,00,000 _ 50,00,000/-). Since, the assessee's share was 1I10th, the AO has added Rs.87,46,OOO/- as his undisclosed income.

15.2 In the course of appeal proceedings, the Id. Counsel for the appellant has contended that the action of the ld. AO is not justified. Though the appellant has purchased the land simultaneously with other persons, he had no direct or indirect relation with them. Notings found in the papers reproduced at page no.51-55 of the assessment order are rough notings. There are no dates, names or narration mentioned against these calculations. The appellant along with the other buyers has made a planning regarding further prospects of the land after completion of the transaction and these papers are dumb documents and they cannot be relied up on for the purpose of assessments by any stretch of imagination. It was further contended that the calculations made by the AO are. merely based on suspicion and presumption and without any supporting cogent material to establish the fact of investment as assumed by the AO over and above the amount of investments shown by the appellant. In this connection, the appellant further contended that these papers relate to future planning with respect to the land and loose paper no.74 and 75 were made for showing them to a prospective buyer in furtherance of their business. The figures were written only to make believe the prospective customers about the transaction, whereas no such transactions had ever happened. The appellant further contended that Ratanpur, Misrode is slightly away from Bhopal and the relevant land had no rate of Rs.660/- per sq.ft at the relevant point of time. Filing a copy of the written submission made during the course of assessment proceedings, the appellant has contended that land under

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consideration was agricultural and un-diverted land and it was not commanding any such price as assumed by the AO. The estimated rough jottings at page no.75 relate to the calculation of estimated return after diversion of land for residential and commercial purposes after obtaining necessary approvals from various authorities. Therefore, the action of the AO, treating the documents as correct evidences is not justified and hence, the addition is also not correct. The appellant has also referred to the statement of Shri Vinod Vaish to press his point that no such payment was made. It was contended that Shri Vinod Vaish has denied receipt of any such payments. It was also contended that as per the appellant's information all other persons, who have purchased the land, have also filed their individual returns of income and the same were accepted without any reservations. Under these circumstances, the appellant has stated that the addition made by the AO is not correct. Finally, the appellant has relied on several case laws to support this contention that no addition is possible on account of imaginary and non- reliable entries found in diary/loose papers.

15.3 I have gone through the observations of the AO and submissions of the appellant. The AO has made the addition mainly on the basis of inferences drawn about the jottings contained in loose papers - LPS-1I1 page no.74 back side and page no. 75 . The AO has summarized the basis of his conclusions at page no.58 of the assessment order by stating that the cheque payment of Rs.50,00,000/- on the backside of page ~ no.74 tallies with the actual amount ofRs.50 lakhs paid on 23.5.2008. The area of land and registry expenses tally with the actual land area and the expenses incurred on registration. The figure of '225' mentioned at page no.75 denotes the amount ofRs.225 lakhs deposited by DD/ cheque in the bank accounts of 14 persons ofDabra. The figure of '3.23' mentioned in these documents tallies with the amount of cash deposited in the bank accounts of the 14 persons plus registration charges and page no.74 back side and page no. 75 corroborated each other. Though the first observation is found to be correct, the subsequent observations are only inferences and are not based on facts. There is nothing unusual in tallying the land area. The amount of registration expenses were incurred at Rs.49, 18,335/- and not Rs.50,OO,OOOI-, i.e., the figure mentioned against the narration. The total of the amount 43

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deposited through DD/ cheques in the bank accounts of the 14 persons comes to Rs.2,70,05,400/- and it is not matching with the figure of '225'. Similarly, the total amount of cash deposited in the bank: accounts of the 14 persons comes to Rs.2, 76, 77 ,877/-. Thus, it is also not tallying with the figure of' 323'. Since, the above figures are not tallying with the above figures, it cannot be concluded that page no.74 backside and 75 are corroborative to each other. Except these jottings, there are no other corroborative evidences to justify the addition. On the contrary, the appellant's contention that the entire exercise is based on inferences carries more force.No incriminating documents establishing transfer of funds between the buyers and the sellers were found. The land was purchased at a price higher than the Guide Line Price fixed by the Collector. The land was un-diverted agricultural land and considering the location and the status of the land, it did not command such price as opined by the A.O. Under these circumstances, I am of the considered opinion that though the jottings contained in the loose papers may generate a suspicion, they are not sufficient enough, without corroborating evidences, to conclude that actual money has changed hands. In this view of the matter, the addition covered in this ground of appeal is not sustainable, hence, deleted. This ground of appeal is, accordingly, allowed”.

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the course of search without establishing any nexus with the actual transaction or placing any corroborative evidence on record.

Hon’ble Supreme Court in the case of Dhakeshwari Cotton Mills Ltd V/s CIT 1954 261 ITR 775 held that “in making assessment u/s 23(3) of the Indian Income Tax Act, the ITO is not fractured by technical rules of evidence and fluctuations and he is entitled to act on material which may not accept an evidence in the court of law, but the IT is not entitled to make and power comes and making assessment without reference to any evidence or any material delivered. There must be something more than more where suspicion to support the assessment u/s 23(3)”. The rule of law on this subject has been fully and rightly stated by Hon’ble High Court in the case of Sree Shanmugar Mills Ltd v/s Commissioner of Income Tax, Punjab 1944 12 ITR 393. Similar view was also taken by Delhi Tribunal in the case of Bansal Strips V/s ACIT (supra) observing that “the A.O cannot first make certain conjectures and surmises and thereafter deemed provisions based on such conjectures and surmises”. In the absence of material as to the nature of ownership of the transaction, undisclosed income cannot be assessed in the hands of the assessee summarily by arithmetically total various figures dotting down on the loose document. Any other seized for the purpose of exercising to deemed provisions dumb documents order documents with no certainty for no evidential value”.

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"A) Whether or not when the Returns and the Statements of the seller admit higher sale consideration actually received, the revenue is justified in fixing the sale consideration at the higher amount than what has been declared?

B) When the Assessee did not give any explanation to the notings found and at the same time the revenue is able to corroborate the same with the statement of the seller for the purpose of determination of actual sale value, would the lower authority be justified in interfering with the same? C) When consistent sworn statements were taken into consideration along with evidences found at the time of search, would all be liable to be rejected on the basis of one statement in between contradicting the earlier ones which was also explained away as a result of intimidation?"

i) The assessment was made under Section 158BC of the Income Tax Act. The relevant Block Period was 01.04.1988 to 08.12.1998. The assessee had purchased land at Brindavan Road, Fairlands, Salem on 26 .10.1 998. The land was registered for Rs.4.10 lakhs. During the course of search in the office premises of Polimer Net Work, certain notings were found in the seized material RK/S/B&D/25. In the statement recorded on 08.12.98, the assessee stated that he did not remember for what purpose he had made 47

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notings, which was confirmed by the assessee in a subsequent statement recorded on 11.12.1998. The land was purchased from one Shri Rajarathinam. His statement was also recorded on the date of search i.e. 08.12.1998 and also on 11.12.1998. In the sworn statement dated 08.12.1998, in question No.3, Shri Rajarathinam admitted that he had received Rs.4.10 lakhs as sale consideration but in question No.4, he admitted that he had received Rs.34.35 lakhs. Again in the statement recorded on 11.12.1998, Shri Rajarathinam, the seller admitted that a total consideration of Rs.34.85 lakhs was received from the assessee out of which Rs.4.10 lakhs was received in demand draft and the balance in cash. In the affidavit given on 08.01 .1999 by Shri Rajarathinam, it was mentioned that the sale consideration received by him from Sri P.V.Kalyanasundaram i.e. the assessee, was only Rs.4.10 lakhs and the earlier statements given before the Income Tax authorities were not true. On 10.08.2000, the seller Sri Rajarathinam submitted a letter before the Assessing Officer withdrawing the affidavit given on 08.01.1999. In the subsequent sworn statement recorded before the Assessing Officer on 20.11.2000, Sri Rajarathinam had mentioned that the sale consideration of Rs.34.85 lakhs which was received by him from the purchase consideration was actually Rs.34.85 lakhs, as against Rs.4.10 lakhs stated in the registered deed for purchase of land. In the cash flow statement for the assessment year 19 99-2000 i.e. block period 01.04.1998 to 08.12.1998, the Assessing Officer adopted the sum in the cash flow relating to purchase of land at Rs.35.45 lakhs as against Rs.4,69,995/- disclosed by the assessee in his cash flow statement. This had resulted in an addition of Rs.3 0,75,005/- as undisclosed income for the Block Period 01.04.1998 to 0 8.12.1998.

ii) Aggrieved by the order, the assessee filed an appeal to the Commissioner of Income Tax (Appeals). The Commisioner of Income Tax ( Appeals), noted

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that due to conflicting nature of the statements given by the seller, his statement could not be relied upon and hence he deleted the addition made by the Assessing Officer. Aggrieved by the order of the C.I.T. (A), the Revenue filed an appeal before the Income Tax Appellate Tribunal. The Tribunal dismissed the Revenue's appeal and confirmed the order of the C.I.T. (A). The learned counsel for the Revenue submitted that the value declared by the assessee for the purchase of the plot was Rs.100/- per sq.ft. even when the guideline value was Rs.400/- per sq.ft. and hence the order of the Tribunal was perverse, wrong and without basis.

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construction of residential house property and consequently claiming exemption under Section 54, the seller filed the computation of income paying Rs.1,83,576/- as tax, which was quite evident from the conflicting statements given by the seller and the conflicting I.T. Returns filed by him that his action of admitting sale consideration and paying tax was nothing but an obvious effort to save from further harassment from the Revenue and escape from the exigibility of tax on undisclosed income of the cash consideration under Section 158 BD of the Act, which in magnitude would far exceed the tax paid by him. The burden of proving actual consideration in such transaction was that of Revenue. The Tribunal had given factual finding and held as follows: "We find that it is the uniform view of the Courts and also held by the Apex Court as reported in 131 ITR 397 the burden of proving actual consideration in such transaction is that of revenue. Considering the entire gamut of the case, we find that revenue has failed to discharge its duties and as held by the Id. CIT(A) instead made up a case on surmices and conjectures which cannot be allowed. Under the circumstances, we do not find any infirmity in the order of the Id. CIT(A) and we uphold the appellate order in this regard."

We also found that the Assessing Officer did not conduct any independent enquiry relating to the value of the property purchased. He merely relied on the statement given by the seller. If he would have taken independent enquiry by referring the matter with the Valuation Officer, the controversy could have been avoided. Failing to refer the matter was a fatal one.

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“34. Now that we have found (in disagreement with the High Court) that entries in MR 71/9'/ would be admissible under Section 34 of the Act we have to next ascertain there probative value. Mr. Altaf Ahmed took great pains to decode and analyses the entries in the above book and, correlating them with the entries in the other three books and in some of the loose sheets found in the files, submitted that the intrinsic evidence furnished by their internal corroboration and inter-dependence unmistakably demonstrated their authenticity and trustworthiness. According to Mr. Altaf Ahmed the entries reflect such periodicity and regularity as was compatible with the modus operandi of the business of Jain brothers of corrupting public servant including Members of Parliament and Ministers in order to influence their decisions and seek their favours for promotion of their (Jain brothers) economic interests. Besides, he submitted, the external independent corroboration of those entries as required under Section 34 was also available to the prosecution from the statements made by Shri Jacob Mathai, Danial P. Rambal and P. Ghoshal and Ejaj Ilmi during investigation, in that, they have admitted receipts of the payments as shown against them in MR.71/91. While on this point, he made a particular reference to those entries in MR 71/91 Which, according to him m if corresponded with the entries in the other books and the enclose sheets would prove the payments to Shri Advani and Shri Shukla. As regard s the proof of authorship of the entries he drew our attention to the statements of Pawan Jain, A. V. Pathak and O.K. Guha who have stated that the entries were made by J. K. Jain and that the Jain Brothers had put their signatures against some of these entries in token of verification thereof. He also drew our attention to the written opinion given by the hand writing expert in this regard.

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given to the party Who relies upon such entries to sUpport his ctaim. against another. In Hiralal v. Ram Rakha [AIR 1953 Pepsu the High Court, while negativing a contention that it having been proved that the books of account were regularly kept in the ordinary course of business and that, therefore, all entries therein should be considered to be relevant and to have been prove, said that the rule as laid down in Section 34 of the Act that entries in the books of account regularly kept in the course of business re relevant whenever they refer to a matter in Which the court has to enquire was subject to the salient Proviso that such entries shall not alone be Sufficient evidence to charge any person with liability. It is not, therefore, enough merely to prove that the books have been regularly kept in the Course of business and the entries therein are correct. It is further incumbent upon the person relying upon those entries to prove that they were in accordance with facts. "

Society) Vs. Union of India (2017) 77 taxmann.com 245 (SC) held as

follows:-

“22. In case of Sahara, in addition we have the adjudication by the Income Tax Settlement Commission. The order has been placed on record along with I.A.No.4. The Settlement Commission has observed that the scrutiny of entries on loose papers, computer prints, hard disk, pen drives etc. have revealed that the transactions noted on documents were not genuine and have no evidentiary value and that details in these loose papers, computer print outs, hard disk and pen drive etc. do not comply with the requirement of the Indian Evidence Act and are not admissible

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evidence. It further observed that the department has no evidence to prove that entries in these loose papers and electronic data were kept regularly during the course of business of the concerned business house and the fact that these entries were fabricated, non-genuine was proved. It held as well that the PCIT/OR have not been able to show and substantiate the nature and source of receipts as well as nature and reason of payments and have failed to prove evidentiary value of loose papers and electronic documents within the legal parameters. The Commission has also observed that Department has not been able to make out a clear case of taxing such income in the hands of the applicant firm on the basis of these documents.

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respect to third parties and considering the explanation which have been made by the Birla Group and Sahara Group, we are of the opinion that it would not be legally justified, safe, just and proper to direct investigation, keeping in' view principles laid down in the cases of Bhajan Lal and V.C. Shukla (supra).

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the alleged seized loose papers are Dumb documents and addition cannot be made on such dumb documents. Rather the jottings on the seized papers were stated to be a part of future planning and references of the transaction in the loose papers are not supported by any corroborative evidence and the evidence in the form of registered sale deeds only indicates that the transaction of purchase/sale of land between the various concerned parties was actually entered at consideration of Rs.5 crores only and no evidence of any ‘ON MONEY’ of Rs.8,74,60,600/- has been paid. We therefore find no reason to interfere in the finding of Ld. CIT(A) deleting the addition of Rs.87,46,600/- and dismiss the revenue’s Ground No.7.

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for afresh adjudication after calling for remand report from the assessing officer relating to the additional evidences filed by the assessee before the Ld. CIT(A).

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for deciding afresh.

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revenue’s ground for statistical purposes. Accordingly Ground No.5 of the Cross Objection is allowed for statistical purposes.

“On the facts and in the circumstances of the case, the CIT(Appeal) has erred in 1. Not following the provisions of section 250(1) of the Income Tax Act 1961 by not giving a notice to the Assessing Officer of the date and place for the hearing the appeal, 2. Not following the provisions of section 250(2) of the Income Tax Act 1961 by not providing the Assessing Officer an opportunity of being heard at the hearing of the appeal. 3. deleting the addition of Rs.87460600/- made by the AO on account of undisclosed income. The appellant reserves his right to add, amend or alter the grounds of appeal on or before the date, the appeal is finally heard for disposal. 74. The facts in brief are that Mr. Vinod Vaish filed return of income on 30.7.2009 declaring total income of Rs.3,32,98,372/-. During the course of search conducted on 21.07.2008 at the residential premises of Mr. Mukesh Sharma certain documents were found which indicated that the assessee i.e. Mr. Vinod Vaish has sold agriculture land measuring 1.9 hectare to Mr. Mukesh

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Sharma and others. The stated consideration received by Mr. Vinod Vaish was Rs.5 crores but the Ld. A.O on the basis of the finding in the case of Mr. Mukesh Sharma came to a conclusion that “on money” of Rs.8,74,60,600/-has been paid by all the purchasers to Mr. Vinod Vaish. Ld. A.O made the addition of Rs.8,74,60,600/- in the hands of Mr. Vinod Vaish and assessed the income at Rs.12,07,58,972/- vide his order dated 29.12.2011 u/s 143(3) of the Act. Against this impugned addition of Rs.8,74,60,600/- assessee preferred appeal before Ld. CIT(A) and succeeded as the Ld. CIT(A) deleted the addition. 75. Now the revenue is in appeal before the Tribunal.

before us. The issue raised by the revenue in Ground No.3 deleting

the addition of Rs.8,74,60,600/- made by the Ld. A.O on account of

undisclosed income. We find that the issue relates to the sale of 1.9

hectare land owned by the assessee for which consideration of Rs.5

crores was stated in the registered sale deed but the Ld. A.O in the

case of one of the purchaser Mr. Mukesh Sharma, on the basis of

loose paper seized during the course of search u/s 132 of the Act

conducted on 21.07.2008 held that an ‘ON MONEY’ of

Rs.8,74,60,600/- is alleged to have been paid by various purchases

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to Mr. Vinod Vaish. We find that we have already adjudicated this

issue in the case of Mr. Mukesh Sharma for Assessment Year 2009-

10 wherein we have held that the Ld. CIT(A) has rightly deleted the

addition for alleged ‘ON MONEY’ payment. We have also held that

the Ld. A.O erred in making the addition merely on the basis of

‘seized loose papers’ without proving any nexus with the actual

transaction by placing corroborative evidence on record and were

merely dumb in nature and out this view was supported by various

judgments of Hon'ble Apex Court and other Hon'ble courts as

referred in the preceding paras.

the addition in the case of Mr. Mukesh Sharma for his share of ‘ON

MONEY’ , therefore no addition could be made in the hands of the

seller Mr. Vinod Vaish also. Therefore the Ld. CIT(A) has rightly

deleted the addition of Rs.8,74,60,600/- made by the Ld. A.O on

account of undisclosed income giving following finding of fact.

All these grounds of appeal re directed against the addition of Rs.8,74,60,600/-made on account of receipt of 'on money' against sale of lands located at Vill. Ratanpur, Misrod, Bhopal. The A.O. has held that in

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the course of search conducted on 21.07.2008 in the case of Shri Mukesh Sharma, B-99, Rajvaidh Colony, Kolar Road, Bhopal, one of the buyers of the land, various incriminating documents were found and on the basis of such documents, it was held that the buyers have paid .on money to the above extent to the appellant. The appellant did not disclose receipt of the same as his income. Accordingly, the above amount was added to the total income of the appellant after reproducing the observations made in the assessment order in the case of Shri Mukesh Sharma.

5.1) In the course of appeal proceedings, the ld. Counsel for the appellant has contended that the A.O. has erred in making the addition without providing copies of the evidences used against him and without allowing cross-examination of the person giving the statement. Copies of written submissions, copy of appellant's statement recorded by the A.O., copy of appellant's affidavit denying receipt of any on money and other details filed before the A.O. were filed. It was contended on the basis of the replies and other details filed that the notings if the loose papers seized from Shri Mukesh Sharma are not corroborated by any other evidences to establish that the appellant has received any on money. It was contended that the land was sold at the ruling market price which was higher than guideline price and capital gain on the same was offered to tax in the return filed. There is no basis for making the addition except the A.O's findings contained in the assessment order. The rough jottings relate to the calculation of estimated return on sale of such land, provided the land is diverted for residential and commercial purposes after obtaining approvals from various authorities. The land can be sold in terms of square feet only, when usage of land is changed and converted into residential/ commercial use. The hand writing contained in the loose paper is not in the handwriting of the appellant or any of his family members. There is no corrob01.-ative material to suggest that the appellant has actually received

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any amount more than of Rs.3,10,50,OOO/- towards sale consideration of agricultural land. There is no conclusive presumption to hold that actual consideration that was passed between Shri Mukesh Sharma and the appellant of Rs.13,65,60,OOO/- and no addition is possible on the basis of suspicion, conjectures, surmises and on the basis of documents. The appellant has finally relied on the following cases.

CIT vs J.P. Dubey (1997) 223 ITR 451(MP)

39 lTD 183 - Aswani Kumar vs ITO in the ITAT Delhi Bench' D

Embee Clearing and Shipping vs ACIT on 26.09.2006

5.2 I have gone through the observations of the AO and submissions of the appellant. The papers, on the basis of which the addition was made, were considered in the case of Shri Mukesh Sharma in ground no.8 of the grounds of appeal for A. Yr.2009-1 O. The first objections of the Ld. Counsel for the appellant is that, despite repeated requests, the evidences used against him, except assessment order in the case of Shri Mukesh Sharma, were supplied to him. Similarly, the A.O. has not allowed cross examination of Shri Mukesh Sharma, whose statement given in proceedings u/s.l32, was used in the appellant's case. Therefore, according to the Ld. AR, the principles of natural justice were not complied with and the assessment is bad in law. Perusal of the assessment records reveal that no such opportunity was given to appellant during assessment proceedings, which is a fact. However, after considering the facts of the case, contents of the loose papers and the appellant's submission in case of Shri Mukesh Sharma, the addition made on account of payment on money was deleted in that case. Therefore, it is not considered necessary to allow cross examination of Shri Mukesh Sharma by the appellant at this stage. The other contentions of the present appellant are identical to the contentions raised and considered in the case of Shri Mukesh Sharma. The operative

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part of the order at page Nos. 21 &22 in ITA No.584/10-11, dated 30.01.2013 is reproduced below:

"15.3 I have gone through the observations of the A 0 and submissions of the appellant. The AD has made the addition mainly on the basis of inferences drawn about the jottings contained in loose papers - LPS-III page no. 74 back side and page no. 75. The A D has summarized the basis of his conclusions at page no. 58 of the assessment order by stating that the cheque payment of Rs. 50,00,0001- on the backside of page no. 74 tallies with the actual amount of Rs.50 lakhs paid on 23.5.200B. The area of land and registry expenses tally with the actual land area and the expenses incurred on registration. The figure of '225' mentioned at page no. 75 denotes the amount of RS.225 lakhs deposited by DDI cheque in the bank documents of 14 persons of Dabra. The figure of '323' mentioned in these documents tallies with the amount of cash deposited in the bank accounts of the 14 persons plus registration charges and page no. 74 back side and page no. 75 corroborated each other. Though the first observation is found to be correct, the subsequent observations are only inferences and are not based on facts. There is nothing unusual in tallying the land area. The amount of registration expenses were incurred at Rs.49, 18,335/- and not Rs.50,00,000/-, i.e. the figure mentioned against the narration. The total of the amount deposited through DDI cheques in the bank accounts of the 14 persons comes to Rs.2, 70,05,400/- and it is not matching with the figure of '225 '. Similarly, the total amount of cash deposited in the bank accounts of the 14 persons comes to Rs.2, 76,77,877/-. Thus, it is also not tallying with the figure of '323 '. Since, the above figures are not tallying with the above figures, it cannot be concluded that page no. 74 backside and 75 are corroborative to each other. Except these jottings, there are no other corroborative evidences to justify the addition. On the contrary, the appellant's contention that the entire exercise is based on inferences carries

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more force. No incriminating documents establishing transfer of actual funds between the buyers and the sellers were found The land was purchased at a price higher than the Guide Line Price fixed by the Collector. The land was un-diverted agricultural land and considering the location and the status of the land, it did not command such price as opined by the A.O. Under these circumstances, I am of the considered opinion that though the jottings contained in the loose papers may generate a suspicion, they are not sufficient enough, without corroborating evidences, to conclude that actual money has changed hands. In this view of the matter, the addition covered in this ground of appeal is not sustainable, hence deleted This ground of appeal is, accordingly, allowed. '

In this view of the matter, I am of the considered opinion that the addition made by the AO on account of receipts of on money in the appellants case is not suitable, hence deleted. According, these two grounds of appeals are allowed.

revenue’s Ground No.3.

notice was given to the Ld. A.O providing opportunity of being heard

before Ld. CIT(A). At the outset the Ld. Departmental Representative

requested for not pressing their grounds. Since the revenue has not

pressed Ground No. 1 & 2 as per the letter given by them before us

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during the course of hearing, we dismiss Ground No. 1 & 2 as not

pressed.

for Assessment Year 2009-10 stands dismissed.

assessees in which protective addition for unaccounted investments

in purchase of land as well as disallowance of expenses have been

made. Details of the assessee’s with appeal Nos along with total

income disclosed, additions made and income assessee is detailed

below;

Name of Assessee & Total Addition on Addition Assessed ITANo. income disallowance on income of expenses protective basis 1 Suresh Kumar 26,33,230 19,520 46,01,538 72,54,288 Upadhyay

ITANo.699/Ind/2016 2 Chandra Kumar 42,96,651 3,68,349 29,38,117 76,03,117 Sharma

ITANo.700/Ind/2016 3 Sanjay Kumar Sahu 4,62,060 NIL 67,72,708 72,34,768

ITANo.701/Ind/2016 4 Sukhdev Singh 22,21,765 17,78,235 50,13,003 90,13,003 Dhariwal

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ITANo.702/Ind/2016 5 Khemraj Singh 50,21,671 NIL 94,47,865 1,44,69,536 Chauhan

ITANo.703/Ind/2016 6 Kamlesh Kumar 25,91,668 NIL 1,18,77,868 1,44,69,536 Choudhary

ITANo.704/Ind/2016 7 Santosh Kumar 26,33,954 NIL 46,00,814 72,34,768 Sharma

ITANO.705/Ind/2016 8 Lalta Prasad 22,94,656 3,55,913 49,40,112 75,90,681 Choudhary

ITA No.706/Ind/2016 9 Pradeep Kumar 57,33,205 1,21,795 15,01,563 73,56,563 Sharma

ITANo.707/Ind/2016 10 Ramesh Chandra 28,54,750 4,33,000 1,16,14,786 1,49,02,536 Parashar

ITANo.708/Ind/2016 11 Vijay Kumar 46,61,357 3,38,643 25,73,411 75,73,411 Shrivastava

ITANo.709/Ind/2016 12 Dharmendra K. 21,95,008 4,55,561 50,39,760 76,90,329 Choudhary

ITANo.710/Ind/2016 13 Ram Kumar Swami 22,88,974 3,61,595 49,45,794 75,96,363

ITANo.711/Ind/2016 14 Virendra Kumar 23,58,560 2,92,010 48,76,208 76,26,778 Sharma

ITANo.542/Ind/2017

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ITA No.699/Ind/2016 1.That the Ld. CIT{A} erred both in law and on facts in upholding the validity of reassessment proceedings u/s 148. The Id. CIT(A} has failed to appreciate that the reassessment proceedings' initiated by the AO were illegal, void and without jurisdiction. 2.That the Ld. CIT(A) erred in law and on facts in failing to appreciate that reassessment proceedings were initiated on the basis of incorrect facts since the income alleged to have escaped assessment was already offered to tax in the return of income. 3.That the Ld. CIT(A) erred both in law and on facts in deciding the entire appeal on a preconceived hypothesis and predetermined notion without considering the written submissions and facts on record. Most of the findings in the appellate order are without any basis and appear to be on presumptions and surmises. 4.That the Ld. CIT{A} has erred in law and on facts in not appreciating that since no addition has been made in respect of the income on the basis of which assessment was reopened therefore the addition made for item in respect of which reason of reopening was not recorded is unsustainable. 5.That the Ld. CIT{A) has erred in law and on facts in confirming the addition of Rs. 19520/-. 6.That the Ld. CIT(A) has erred in law and on facts in confirming the addition of Rs. 46,01,538/- made on the basis of a dumb document unrelated to the assessee and not found from the assessee's possession. 7.That the manner in which the Ld. CIT(A) has upheld the addition in para 14 over the alleged excess investment in land without even discussing the alleged document, submissions of the assessee and simply relying on the Assessment order is unwarranted and perverse and is devoid of any merit. 8. That the Ld. CIT{A) erred in law and on facts in confirming the protective addition as substantive addition in the hands of the appellant. The CIT(A) on one hand is doubting the financial capacity of the appellant to make the investment and on the other hond is confirming the protective addition as substantive addition. The said finding is perverse and contrary to the entire matrix built up by the CIT(A)

Mukesh Sharma IT(SS) No.88/Ind/2013 C.O.No.76/Ind/2014, ITA No.189/Ind/2013, ITA No.702 to 711/Ind/2016 & ITA No.542/Ind/2017 9.That the Ld. CIT(AJ has exceeded her jurisdiction in giving directions to the AO to reopen the case for AY 2010-11 and giving directions for examining the opening capitol which are I10t within the scope of the assessment year under consideration and which were not even the Subject matter of assessment.

ITA No.700/Ind/2016 1.That the Ld. CIT{A} erred both in law and on facts in upholding the validity of reassessment proceedings u/s 148. The Id. CIT(A} has failed to appreciate that the reassessment proceedings' initiated by the AO were illegal, void and without jurisdiction. 2.That the Ld. CIT(A) erred in law and on facts in failing to appreciate that reassessment proceedings were initiated on the basis of incorrect facts since the income alleged to have escaped assessment was already offered to tax in the return of income. 3. That the Ld. CIT(A) erred both in law and on facts in deciding the entire appeal on a preconceived hypothesis and predetermined notion without considering the written submissions and facts on record. Most of the findings in the appellate order are without any basis and appear to be on presumptions and surmises. 4. That the Ld. CIT{A} has erred in law and on facts in not appreciating that since no addition has been made in respect of the income on the basis of which assessment was reopened therefore the addition made for item in respect of which reason of reopening was not recorded is unsustainable. 5. That the Ld. CIT{A) has erred in law and on facts in confirming the addition of Rs.3,68,349/-. 6. That the Ld. CIT(A) has erred in law and on facts in confirming the addition of Rs. 29,38,117/- made on the basis of a dumb document unrelated to the assessee and not found from the assessee's possession. 7. That the manner in which the Ld. CIT(A) has upheld the addition in para 14 over the alleged excess investment in land without even discussing the alleged document, submissions of the assessee and simply relying on the Assessment order is unwarranted and perverse and is devoid of any merit.

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ITA No.701/Ind/2016 1. That the Ld. CIT{A} erred both in law and on facts in upholding the validity of reassessment proceedings u/s 148. The Id. CIT(A} has failed to appreciate that the reassessment proceedings' initiated by the AO were illegal, void and without jurisdiction. 2. That the Ld. CIT(A) erred in law and on facts in failing to appreciate that reassessment proceedings were initiated on the basis of incorrect facts since the income alleged to have escaped assessment was already offered to tax in the return of income. 3. That the Ld. CIT(A) erred both in law and on facts in deciding the entire appeal on a preconceived hypothesis and predetermined notion without considering the written submissions and facts on record. Most of the findings in the appellate order are without any basis and appear to be on presumptions and surmises. 4. That the Ld. CIT{A} has erred in law and on facts in not appreciating that since no addition has been made in respect of the income on the basis of which assessment was reopened therefore the addition made for item in respect of which reason of reopening was not recorded is unsustainable. 5. That the Ld. CIT{A) has erred in law and on facts in confirming the addition of Rs. 67,72,708/- made on the basis of a dumb document unrelated to the assessee and not found from the assessee’s possession. 6. That the manner in which the Ld. CIT(A) has upheld the addition in para 14 over the alleged excess investment in land without even discussing the alleged document, submissions of the assessee and simply relying on the Assessment order is unwarranted and perverse and is devoid of any merit. 70

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ITA No.702/Ind/2016 1.That the Ld. CIT{A} erred both in law and on facts in upholding the validity of reassessment proceedings u/s 148. The Id. CIT(A} has failed to appreciate that the reassessment proceedings' initiated by the AO were illegal, void and without jurisdiction. 2. That the Ld. CIT(A) erred in law and on facts in failing to appreciate that reassessment proceedings were initiated on the basis of incorrect facts since the income alleged to have escaped assessment was already offered to tax in the return of income. 3. That the Ld. CIT(A) erred both in law and on facts in deciding the entire appeal on a preconceived hypothesis and predetermined notion without considering the written submissions and facts on record. Most of the findings in the appellate order are without any basis and appear to be on presumptions and surmises. 4. That the Ld. CIT{A} has erred in law and on facts in not appreciating that since no addition has been made in respect of the income on the basis of which assessment was reopened therefore the addition made for item in respect of which reason of reopening was not recorded is unsustainable. 5. That the Ld. CIT{A) has erred in law and on facts in confirming the addition of Rs. 17,78,235/- claimed as expenses by the assessee. 6. That the Ld. CIT(A) has erred in law and on facts in confirming the 71

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addition of Rs. 50,13,003/-- made on the basis of a dumb document unrelated to the assessee and not found from the assessee's possession. 7. That the manner in which the Ld. CIT(A) has upheld the addition in para 14 over the alleged excess investment in land without even discussing the alleged document, submissions of the assessee and simply relying on the Assessment order is unwarranted and perverse and is devoid of any merit. 8. That the Ld. CIT{A) erred in law and on facts in confirming the protective addition as substantive addition in the hands of the appellant. The CIT(A) on one hand is doubting the financial capacity of the appellant to make the investment and on the other hand is confirming the protective addition os substantive addition. The said finding is perverse and contrary to the entire matrix built up by the CIT(A) 9. That the Ld. CIT(AJ has exceeded her jurisdiction in giving directions to the AO to reopen the case for AY 2010-11 and giving directions for examining the opening capitol which are I10t within the scope of the assessment year under consideration and which were not even the Subject matter of assessment.

ITA No.703/Ind/2016 1. That the Ld. CIT{A} erred both in law and on facts in upholding the validity of reassessment proceedings u/s 148. The Id. CIT(A} has failed to appreciate that the reassessment proceedings' initiated by the AO were illegal, void and without jurisdiction. 2. That the Ld. CIT(A) erred in law and on facts in failing to appreciate that reassessment proceedings were initiated on the basis of incorrect facts since the income alleged to have escaped assessment was already offered to tax in the return of income. 3. That the Ld. CIT(A) erred both in law and on facts in deciding the entire appeal on a preconceived hypothesis and predetermined notion without considering the written submissions and facts on record. Most of the findings in the appellate order are without any basis and appear to be on presumptions and surmises. 4. That the Ld. CIT{A} has erred in law and on facts in not appreciating that since no addition has been made in respect of the income on the basis of which assessment was reopened therefore the addition made for item in respect of which reason of reopening was not recorded is unsustainable. 72

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reopening was not recorded is unsustainable. 5. That the Ld. CIT{A) has erred in law and on facts in confirming the addition of Rs. 1,18,77,858/-. made on the basis of a dumb document unrelated to the assessee and not found from the assessee’s possession. 6. That the manner in which the Ld. CIT(A) has upheld the addition in para 14 over the alleged excess investment in land without even discussing the alleged document, submissions of the assessee and simply relying on the Assessment order is unwarranted and perverse and is devoid of any merit. 7. That the Ld. CIT{A) erred in law and on facts in confirming the protective addition as substantive addition in the hands of the appellant. The CIT(A) on one hand is doubting the financial capacity of the appellant to make the investment and on the other hond is confirming the protective addition os substantive addition. The said finding is perverse and contrary to the entire matrix built up by the CIT(A) 8. That the Ld. CIT(AJ has exceeded her jurisdiction in giving directions to the AO to reopen the case for AY 2010-11 and giving directions for examining the opening capitol which are I10t within the scope of the assessment year under consideration and which were not even the Subject matter of assessment.

ITA No.705/Ind/2016 1. That the Ld. CIT{A} erred both in law and on facts in upholding the validity of reassessment proceedings u/s 148. The Id. CIT(A} has failed to appreciate that the reassessment proceedings' initiated by the AO were illegal, void and without jurisdiction. 2. That the Ld. CIT(A) erred in law and on facts in failing to appreciate that reassessment proceedings were initiated on the basis of incorrect facts since the income alleged to have escaped assessment was already offered to tax in the return of income. 3. That the Ld. CIT(A) erred both in law and on facts in deciding the entire appeal on a preconceived hypothesis and predetermined notion without considering the written submissions and facts on record. Most of the findings in the appellate order are without any basis and appear to be on presumptions and surmises. 4. That the Ld. CIT{A} has erred in law and on facts in not appreciating that since no addition has been made in respect of the income on the basis of which assessment was reopened 74

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therefore the addition made for item in respect of which reason of reopening was not recorded is unsustainable. 5. That the Ld. CIT{A) has erred in law and on facts in confirming the addition of Rs.46,00,814/- made on the basis of a dumb document unrelated to the assessee and not found from the assessee’s possession. 6. That the manner in which the Ld. CIT(A) has upheld the addition in para 14 over the alleged excess investment in land without even discussing the alleged document, submissions of the assessee and simply relying on the Assessment order is unwarranted and perverse and is devoid of any merit. 7. That the Ld. CIT{A) erred in law and on facts in confirming the protective addition as substantive addition in the hands of the appellant. The CIT(A) on one hand is doubting the financial capacity of the appellant to make the investment and on the other hond is confirming the protective addition of substantive addition. The said finding is perverse and contrary to the entire matrix built up by the CIT(A) 8. That the Ld. CIT(AJ has exceeded her jurisdiction in giving directions to the AO to reopen the case for AY 2010-11 and giving directions for examining the opening capitol which are I10t within the scope of the assessment year under consideration and which were not even the Subject matter of assessment.

ITA No.706/Ind/2016 1.That the Ld. CIT{A} erred both in law and on facts in upholding the validity of reassessment proceedings u/s 148. The Id. CIT(A} has failed to appreciate that the reassessment proceedings' initiated by the AO were illegal, void and without jurisdiction. 2. That the Ld. CIT(A) erred in law and on facts in failing to appreciate that reassessment proceedings were initiated on the basis of incorrect facts since the income alleged to have escaped assessment was already offered to tax in the return of income. 3. That the Ld. CIT(A) erred both in law and on facts in deciding the entire appeal on a preconceived hypothesis and predetermined notion without considering the written submissions and facts on record. Most of the findings in the appellate order are without any basis and appear to be on presumptions and surmises. 75

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ITA No.707/Ind/2016 1.That the Ld. CIT{A} erred both in law and on facts in upholding the validity of reassessment proceedings u/s 148. The Id. CIT(A} has failed to appreciate that the reassessment proceedings' initiated by the AO were illegal, void and without jurisdiction. 2. That the Ld. CIT(A) erred in law and on facts in failing to appreciate that reassessment proceedings were initiated on the basis of incorrect facts since the income alleged to have escaped 76

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assessment was already offered to tax in the return of income. 3. That the Ld. CIT(A) erred both in law and on facts in deciding the entire appeal on a preconceived hypothesis and predetermined notion without considering the written submissions and facts on record. Most of the findings in the appellate order are without any basis and appear to be on presumptions and surmises. 4. That the Ld. CIT{A} has erred in law and on facts in not appreciating that since no addition has been made in respect of the income on the basis of which assessment was reopened therefore the addition made for item in respect of which reason of reopening was not recorded is unsustainable. 5. That the Ld. CIT{A) and the AO were not justified in law and on facts in sustaining the addition of Rs. 1,21,795/-. 6. That the Ld. CIT(A) has erred in law and on facts in confirming the addition of Rs. 15,01,563/- made on the basis of a dumb document unrelated to the assessee and not found from the assessee's possession. 7. That the manner in which the Ld. CIT(A) has upheld the addition in para 14 over the alleged excess investment in land without even discussing the alleged document, submissions of the assessee and simply relying on the Assessment order is unwarranted and perverse and is devoid of any merit. 8. That the Ld. CIT{A) erred in law and on facts in confirming the protective addition as substantive addition in the hands of the appellant. The CIT(A) on one hand is doubting the financial capacity of the appellant to make the investment and on the other hond is confirming the protective addition os substantive addition. The said finding is perverse and contrary to the entire matrix built up by the CIT(A) 9. That the Ld. CIT(AJ has exceeded her jurisdiction in giving directions to the AO to reopen the case for AY 2010-11 and giving directions for examining the opening capitol which are I10t within the scope of the assessment year under consideration and which were not even the Subject matter of assessment.

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ITA No.708/Ind/2016 1.That the Ld. CIT{A} erred both in law and on facts in upholding the validity of reassessment proceedings u/s 148. The Id. CIT(A} has failed to appreciate that the reassessment proceedings' initiated by the AO were illegal, void and without jurisdiction. 2. That the Ld. CIT(A) erred in law and on facts in failing to appreciate that reassessment proceedings were initiated on the basis of incorrect facts since the income alleged to have escaped assessment was already offered to tax in the return of income. 3. That the Ld. CIT(A) erred both in law and on facts in deciding the entire appeal on a preconceived hypothesis and predetermined notion without considering the written submissions and facts on record. Most of the findings in the appellate order are without any basis and appear to be on presumptions and surmises. 4. That the Ld. CIT{A} has erred in law and on facts in not appreciating that since no addition has been made in respect of the income on the basis of which assessment was reopened therefore the addition made for item in respect of which reason of reopening was not recorded is unsustainable. 5. That the Ld. CIT{A) and the AO were not justified in law and on facts in sustaining the addition of Rs. 4,33,000/-. 6. That the Ld. CIT(A) has erred in law and on facts in confirming the addition of Rs.1,16,14,786/- made on the basis of a dumb document unrelated to the assessee and not found from the assessee's possession. 7. That the manner in which the Ld. CIT(A) has upheld the addition in para 14 over the alleged excess investment in land without even discussing the alleged document, submissions of the assessee and simply relying on the Assessment order is unwarranted and perverse and is devoid of any merit. 8. That the Ld. CIT{A) erred in law and on facts in confirming the protective addition as substantive addition in the hands of the appellant. The CIT(A) on one hand is doubting the financial capacity of the appellant to make the investment and on the other hond is confirming the protective addition os substantive addition. The said finding is perverse and contrary to the entire matrix built up by the 78

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CIT(A) 9. That the Ld. CIT(AJ has exceeded her jurisdiction in giving directions to the AO to reopen the case for AY 2010-11 and giving directions for examining the opening capitol which are I10t within the scope of the assessment year under consideration and which were not even the Subject matter of assessment.

ITA No.709/Ind/2016 1.That the Ld. CIT{A} erred both in law and on facts in upholding the validity of reassessment proceedings u/s 148. The Id. CIT(A} has failed to appreciate that the reassessment proceedings' initiated by the AO were illegal, void and without jurisdiction. 2. That the Ld. CIT(A) erred in law and on facts in failing to appreciate that reassessment proceedings were initiated on the basis of incorrect facts since the income alleged to have escaped assessment was already offered to tax in the return of income. 3. That the Ld. CIT(A) erred both in law and on facts in deciding the entire appeal on a preconceived hypothesis and predetermined notion without considering the written submissions and facts on record. Most of the findings in the appellate order are without any basis and appear to be on presumptions and surmises. 4. That the Ld. CIT{A} has erred in law and on facts in not appreciating that since no addition has been made in respect of the income on the basis of which assessment was reopened therefore the addition made for item in respect of which reason of reopening was not recorded is unsustainable. 5. That the Ld. CIT{A) and the AO were not justified in law and on facts in sustaining the addition of Rs. 3,38,643/-. 6. That the Ld. CIT(A) has erred in law and on facts in confirming the addition of Rs. 25,73,411/- made on the basis of a dumb document unrelated to the assessee and not found from the assessee's possession. 7. That the manner in which the Ld. CIT(A) has upheld the addition in para 14 over the alleged excess investment in land without even discussing the alleged document, submissions of the assessee and simply relying on the Assessment order is unwarranted and perverse 79

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and is devoid of any merit. 8. That the Ld. CIT{A) erred in law and on facts in confirming the protective addition as substantive addition in the hands of the appellant. The CIT(A) on one hand is doubting the financial capacity of the appellant to make the investment and on the other hond is confirming the protective addition os substantive addition. The said finding is perverse and contrary to the entire matrix built up by the CIT(A) 9. That the Ld. CIT(AJ has exceeded her jurisdiction in giving directions to the AO to reopen the case for AY 2010-11 and giving directions for examining the opening capitol which are I10t within the scope of the assessment year under consideration and which were not even the Subject matter of assessment.

ITA No.710/Ind/2016 1.That the Ld. CIT{A} erred both in law and on facts in upholding the validity of reassessment proceedings u/s 148. The Id. CIT(A} has failed to appreciate that the reassessment proceedings' initiated by the AO were illegal, void and without jurisdiction. 2. That the Ld. CIT(A) erred in law and on facts in failing to appreciate that reassessment proceedings were initiated on the basis of incorrect facts since the income alleged to have escaped assessment was already offered to tax in the return of income. 3. That the Ld. CIT(A) erred both in law and on facts in deciding the entire appeal on a preconceived hypothesis and predetermined notion without considering the written submissions and facts on record. Most of the findings in the appellate order are without any basis and appear to be on presumptions and surmises. 4. That the Ld. CIT{A} has erred in law and on facts in not appreciating that since no addition has been made in respect of the income on the basis of which assessment was reopened therefore the addition made for item in respect of which reason of reopening was not recorded is unsustainable. 5. That the Ld. CIT{A) and the AO were not justified in law and on facts in sustaining the addition of Rs.4,55,561/-. 6. That the Ld. CIT(A) has erred in law and on facts in confirming the 80

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addition of Rs. 50,39,760/- made on the basis of a dumb document unrelated to the assessee and not found from the assessee's possession. 7. That the manner in which the Ld. CIT(A) has upheld the addition in para 14 over the alleged excess investment in land without even discussing the alleged document, submissions of the assessee and simply relying on the Assessment order is unwarranted and perverse and is devoid of any merit. 8. That the Ld. CIT{A) erred in law and on facts in confirming the protective addition as substantive addition in the hands of the appellant. The CIT(A) on one hand is doubting the financial capacity of the appellant to make the investment and on the other hond is confirming the protective addition os substantive addition. The said finding is perverse and contrary to the entire matrix built up by the CIT(A) 9. That the Ld. CIT(AJ has exceeded her jurisdiction in giving directions to the AO to reopen the case for AY 2010-11 and giving directions for examining the opening capitol which are I10t within the scope of the assessment year under consideration and which were not even the Subject matter of assessment.

ITA No.711/Ind/2016 1.That the Ld. CIT{A} erred both in law and on facts in upholding the validity of reassessment proceedings u/s 148. The Id. CIT(A} has failed to appreciate that the reassessment proceedings' initiated by the AO were illegal, void and without jurisdiction. 2. That the Ld. CIT(A) erred in law and on facts in failing to appreciate that reassessment proceedings were initiated on the basis of incorrect facts since the income alleged to have escaped assessment was already offered to tax in the return of income. 3. That the Ld. CIT(A) erred both in law and on facts in deciding the entire appeal on a preconceived hypothesis and predetermined notion without considering the written submissions and facts on record. Most of the findings in the appellate order are without any basis and appear to be on presumptions and surmises. 4. That the Ld. CIT{A} has erred in law and on facts in not appreciating that since no addition has been made in respect of the 81

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income on the basis of which assessment was reopened therefore the addition made for item in respect of which reason of reopening was not recorded is unsustainable. 5. That the Ld. CIT{A) and the AO were not justified in law and on facts in sustaining the addition of Rs. 3,61,595/- claimed as expenses. 6. That the Ld. CIT(A) has erred in law and on facts in confirming the addition of Rs. 49,45,794/- made on the basis of a dumb document unrelated to the assessee and not found from the assessee's possession. 7. That the manner in which the Ld. CIT(A) has upheld the addition in para 14 over the alleged excess investment in land without even discussing the alleged document, submissions of the assessee and simply relying on the Assessment order is unwarranted and perverse and is devoid of any merit. 8. That the Ld. CIT{A) erred in law and on facts in confirming the protective addition as substantive addition in the hands of the appellant. The CIT(A) on one hand is doubting the financial capacity of the appellant to make the investment and on the other hond is confirming the protective addition os substantive addition. The said finding is perverse and contrary to the entire matrix built up by the CIT(A) 9. That the Ld. CIT(AJ has exceeded her jurisdiction in giving directions to the AO to reopen the case for AY 2010-11 and giving directions for examining the opening capitol which are I10t within the scope of the assessment year under consideration and which were not even the Subject matter of assessment.

ITA No.542/Ind/2017 1.That the Ld. CIT{A} erred both in law and on facts in upholding the validity of reassessment proceedings u/s 148. The Id. CIT(A} has failed to appreciate that the reassessment proceedings' initiated by the AO were illegal, void and without jurisdiction. 2. That the Ld. CIT(A) erred in law and on facts in failing to appreciate that reassessment proceedings were initiated on the basis of incorrect facts since the income alleged to have escaped assessment was already offered to tax in the return of income. 82

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(i) Challenging the validity of reassessment u/s 147 of the Act

(ii) Protective addition made on the basis of dumb document unrelated to the assessee.

(iii) Addition for disallowance of expenses

(iv) Direction by Ld. CIT(A) for reopening of case for Assessment Year 2010-11.

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direction of Ld. CIT(A)’s order u/s 263 of the Act dated 28.3.2013. This order of Ld. CIT(A) passed u/s 263 of the Act was quashed by Tribunal vide order dated 31.10.2014. However amount of the ‘ON MONEY’ was added protectively in the hands of the 14 assessee’s as per their share in land. Ld. A.O also made addition for disallowance of expenses in case of 10 assessee’s for the alleged difference between the amount deposited in the bank as against the amount admitted as undisclosed income. The respective amount are already mentioned in the chart given herein above relating to the 14 assessee’s. Aggrieved assessee’s preferred appeal before Ld. CIT(A) and failed to succeed and now all the assessee’s are in appeal before the Tribunal.

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seized which as per the Ld. A.O indicated some undisclosed investment. Return were filed on 31.03.2010 and notice u/s 148 of the Act issue within 4 years i.e. before 31.03.2014. Proper opportunity was given to assessee(s) to reply to the reasons recorded for reopening. In our considered view the cases of 14 assessee’s were fit case for issue of notice u/s 148 of the Act and for conducting reassessment proceedings u/s 147 of the Act. We accordingly dismiss this common issue raised in 14 cases challenging the validity reassessment proceedings.

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14 assessee’s. We accordingly allow this common issue in the case of the 14 assessee’s and delete the addition made on protective basis on un accounted investments in purchase of land totalling to Rs.8,07,43,547/-.

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Name of Assessee & Amount Amount admitted Difference ITANo. Deposit in as undisclosed bank/loan income 1 Suresh Kumar 26,52,750 26,33,230 19,520 Upadhyay

ITANo.699/Ind/2016 2 Chandra Kumar 46,65,000 42,96,651 3,68,349 Sharma

ITANo.700/Ind/2016 3 Sukhdev Singh 40,00,000 22,21,765 17,78,235 Dhariwal

ITANo.702/Ind/2016 4 Lalta Prasad 26,50,569 22,94,656 3,55,913 Choudhary

ITA No.706/Ind/2016 5 Pradeep Kumar 68,55,000 57,33,205 1,21,795 Sharma

ITANo.707/Ind/2016 6 Ramesh Chandra 32,87,750 28,54,750 4,33,000 Parashar

ITANo.708/Ind/2016 7 Vijay Kumar 50,00,000 46,61,357 3,38,643 Shrivastava

ITANo.709/Ind/2016 8 Dharmendra K. 26,50,569 21,95,008 4,55,561 Choudhary

ITANo.710/Ind/2016 9 Ram Kumar Swami 26,50,569 22,88,974 3,61,595

ITANo.711/Ind/2016 10 Virendra Kumar 26,51,070 23,58,560 292010 Sharma

ITANo.542/Ind/2017

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the scope of Ld. CIT(A).

“251. (1) In disposing of an appeal, the Commissioner (Appeals) shall have the following powers – (a) In an appeal against an order of assessment, he may confirm, reduce, enhance or annul the assessment

[(aa)in an appeal against the order of assessment in respect of which the proceedings before the Settlement Commission abates under section 245HA, he may, after taking into consideration all the material and other information produced by the assessee before, or the results of the enquiry held or evidence recorded by, the Settlement Commission, in the course of the proceeding before it and such other material as may be brought on his record, confirm, reduce, enhance or annul the assessment;]

(b)in an appeal against an order imposing a penalty, he may confirm or cancel such order or vary it so as either to enhance or to reduce the penalty;

(c)in any other case, he may pass such orders in the appeal as he thinks fit.

2.The Commissioner (Appeals) shall not enhance an assessment or a penalty or reduce the amount of refund unless the appellant has had a reasonable opportunity of showing cause against such enhancement or reduction.

Explanation.- In disposing of an appeal, the Commissioner (Appeals) may consider and decide any matter arising out of the proceedings in which the order appealed against was passed, notwithstanding that such matter was not raised before the Commissioner (Appeals) by the appellant.

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The order pronounced in the open Court on 04.06.2019.

Sd/- Sd/-

( KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER

�दनांक /Dated : 04th June, 2019 /Dev Copy to: The Appellant/Respondent/CIT concerned/CIT(A) concerned/ DR, ITAT, Indore/Guard file.

By Order, Asstt.Registrar, I.T.A.T., Indore