SHRI DILIP G. PUROHIT,AHMEDABAD vs. THE DY.CIT, CENTRAL CIRCLE-2(4),, AHMEDABAD

आदेश/ORDER

Per Suchitra Kamble, Judicial Member:

ITA No. 69/Ahd/2016 filed by the Revenue and the other four appeals vide ITA Nos. 75 to 78/Ahd/2016 filed by the assessee are filed against the order dated 29-09-2015 passed by CIT(A)-12, Ahmedabad for assessment year 2008- 09 to 2011-12.

“1. "On facts and circumstances of the case and in law, the Ld. CIT(A) has erred in law and/or on facts in accepted the books of the assessee which had been rejected by the AO."

8. "On facts and circumstances of the case and in law, the Ld. CIT(A) has erred in law and/or on facts in deleting the addition of Rs.9,26,543/-on account of unaccounted purchases of Honda City Car."

11.On the facts and in the circumstances of the case and in law, the CIT(A) ought to have upheld the order of the A.O.

12.It is, therefore, prayed that the order of the CIT (A) be set aside and that of the A.O. be restored to the above extent.”

ITA No. 75/Ahd/2016 A.Y. 2008-09 filed by assessee “1.1 The order passed u/s. 250 on 29.09.2015 for A.Y.2008-09 by CIT(A)-12, Abad partly confirming the additions made by AO is wholly illegal, unlawful and against the principles of natural justice.

1.2 The Ld. CIT(A) has grievously erred in law and or on facts in not considering fully and properly the submissions made and evidence produced by the appellant with regard to the impugned additions.

2.1 The Ld. CIT(A) has grievously erred in law and on facts in confirming the addition in respect of other loans & advance of Rs.86,600/-.

2.2 That in the facts and circumstances of the case as well as in law, the Ld.CIT(A) ought not to have confirmed the addition in respect of other loans & advance of Rs.86,600/-.

It is, therefore, prayed that the additions upheld by the CIT(A) may kindly be deleted.”

ITA No. 76/Ahd/2016 A.Y. 2009-10 filed by assessee

“1.1 The order passed u/s. 250 on 29.09.2015 for A.Y.2009-10 by CIT(A)-12, Abad partly confirming the additions made by AO is wholly illegal, unlawful and against the principles of natural justice.

1.2 The Ld. CIT(A) has grievously erred in law and or on facts in not considering fully and properly the submissions made and evidence produced by the appellant with regard to the impugned additions.

2.1 The Ld. CIT(A) has grievously erred in law and on facts in confirming the addition in respect of other loans & advance of Rs.1,93,000/- and in case of Ramesh Amngana of RS. 25,000/-.

2.2 That in the facts and circumstances of the case as well as in law, the Ld.CIT(A) ought not to have confirmed the addition in respect of other loans & advance of Rs.1,93,000/- and in case of Ramesh Amngana of Rs. 25,000/-.

It is, therefore, prayed that the additions upheld by the CIT(A) may kindly be deleted.”

ITA No. 77/Ahd/2016 A.Y. 2010-11 filed by assessee

“1.2 The order passed u/s. 250 on 29.09.2015 for A.Y.2010-11 by CIT(A)-12, Abad partly confirming the additions made by AO is wholly illegal, unlawful and against the principles of natural justice.

1.2 The Ld. CIT(A) has grievously erred in law and or on facts in not considering fully and properly the submissions made and evidence produced by the appellant with regard to the impugned addition.

2.1 The Ld. CIT(A) has grievously erred in law and on facts in confirming the following additions/disallowances: (a) Loan & Advances Rs 29,500/- (b) Advance to Ramesh Angana Rs 13,00,000/- (c) Transactions with Vicky Shah Rs 14,00,000/- (d) Directions for interest on above said advances

2.2 That in the facts and circumstances of the case as well as in law, the Ld. CIT(A) ought not to have upheld the above said disallowances. The Ld. CIT(A) has erred in directing AO to recomputed actual receipt of interest in respect of advances confirmed.

3.1 Without prejudice to above, the above said additions confirmed by CIT(A) was highly excessive and the benefit of telescoping should have been allowed.

It is, therefore, prayed that the additions upheld by the CIT(A) may kindly be deleted.”

ITA No. 78/Ahd/2016 A.Y. 2011-12 filed by assessee

“1.1 The order passed u/s.250 on 29.09.2015 for A.Y.2011-12 by CIT(A)-12, Abad partly confirming the additions made by AO is wholly illegal, unlawful and against the principles of natural justice.

1.2 The Ld. CIT(A) has grievously erred in law and or on facts in not considering fully and properly the submissions made and evidence produced by the appellant with regard to the impugned addition.

2.1 The Ld. CIT(A) has grievously erred in law and on facts in directing AO to include interest received, if any, to the extent of advances to Ramesh Angana confirmed in appeal for Α.Υ. 2010- 11.

2.2 That in the facts and circumstances of the case as well as in law, the Ld. CIT(A) ought not to have directed AO to recomputed and include interest actually received, if any, to the extent of advances to Ramesh Angana confirmed in appeal for A.Y.2010- 11.

3.1 The Ld. CIT(A) has grievously erred in law and on facts in confirming the so-called advance of Rs. 7 lacs in respect of Ramesh Angana and interest thereon.

4.1 The Ld. CIT(A) has grievously erred in law and on facts in confirming the so-called advance of Rs. 10 lacs in respect of Mahesh C Shah.

5.1 The Ld. CIT(A) has grievously erred in law and on facts in confirming the addition in respect of other loans & advance of Rs. 6,21,000/-.

6.1 The Ld. CIT(A) has grievously erred in law and on facts in confirming the addition of Rs. 5,55,650/- in respect of dalai income.

7.1 Without prejudice to the above the Ld. CIT(A) ought to have allowed the benefit of telescoping in respect of the additions upheld in appeal.

It is, therefore, prayed that the additions upheld by the CIT(A) may kindly be deleted.”

3. Firstly we are taking up IT(SS)A No. 69/Ahd/2016 (A.Y. 2011-12). A search action u/s. 132 of the Income Tax Act, 1961 was carried out in the case of the Dilip G. Purohit on 09-03-2011 and the warrant was issued in the name of the assessee. The assessee filed return of income on 29-07- 2011 declaring income of Rs. 13,54,600/-. Notice u/s. 143(2) was issued on 24-09-2012 and notice u/s. 142(1) was issued on 05-10-2012. In response to the notices, the A.R. of the assessee attended the assessment proceedings and filed details. The Assessing Officer observed that the assessee derives income by way of commission (dalali) as broker in real estate. The Assessing Officer further observed that while search and seizure operation carried in the case of Dilip Purohit on 09-03-2011, the assessee disclosed Rs. 4.5 crores as his unaccounted income in statement u/s. 132(4) of the Act on 09-03-2011. Subsequently, the same has been confirmed by the assessee while recording the statement u/s. 131 during the post search proceedings. However, the assessee did not declare the undisclosed income and admitted unaccounted income in his return of income filed in response to the notice u/s. 153A of the Act. The assessee never retracted his statement made u/s. 132(4)/131 of the Act. While filing return of income, the assessee has made full disclosure by way of preparing books claimed to have been made on the basis of seized documents and restricted his disclosure to 30% of the adequate amount disclosed. The assessee submitted his books of account including the cash book during the assessment proceedings and claimed that his disclosed and

undisclosed transactions are incorporated in the cash book and the said cash book is prepared on the basis of seized materials. The assessee has shown debit and credit entries in cash book and income by way of disclosure on same dates.

3.1 The Assessing Officer observed the following discrepancies in the books of account and cash books:-

a) The so-called books of account produced before the undersigned is the books of account prepared after the date of search. The same is afterthought as not maintained in the regular course of business. No regular records are maintained to prepare such books of accounts.

b) The entries/transactions entered in the books of account which has prepared after the search proceedings having no supporting evidence can be manipulated to suit the assessee's requirement. It is to be noted that the assessee has claimed to have incorporated accounted and unaccounted transactions. But, there is no evidence of accounted transactions and entries have been made as per the requirement of the assessee. This becomes clear with the glance through the cash book of A.Y. 2011-12. It is to be noted that cash of Rs. 14,64,000/- was found and out of which cash of Rs. 14,00,000/- was seized from the premises of the assessee on date of search,

i.e., 09/03/2011. The assessee has managed his cash book in such a way that he has shown opening cash balance on 09/03/2011 at Rs.14,81,824/-. Thus, entire cash seized by the Department has been treated by the assessee as explained. Now, it is important to note that the assessee himself admitted in his statement u/s. 132(4) of the Act that cash found from his premises is unexplained. The same fact of cash being unexplained, was reiterated by the assessee in his statement u/s. 131 of the Act on 20/05/2011. Thus, the assessee did not change his stand even after two months and did not retract from his stand till filing of return of income.

The evidentiary value of the statement u/s. 132(4) of the Act can't be undermined, particularly when it has not been retracted and when it is compared with such cash book, which has been prepared without primary documents and cogent evidences.

c) In the regular books of account transactions have double effect and can be counter-checked but in the case of seized documents, when the identity /claim of the third party is not supported by evidences, the same cannot be relied upon.

d) The figures appearing in the seized papers have no direct nexus between various transactions, However, the assessee has tried to co-relate one transaction to

another thereby reducing the undisclosed income. For example, the assessee has tried to incorporate the loan given to Jayesh Shah and outstanding with the loan given to other individuals even though they are separate transactions.

e) The assessee is carrying out various business activity, such as dalali in respect of property, money lending and investment in land and the funds of one business are utilized in another. By preparing the books of account after the date of search, claimed to have been made on the basis of seized records resulted into set off of one business against another business, in this case the assessee has also prepared the books of the assessee's wife and file the same at Rs. 8,90,000/- Thus the assessee had tried to reduce his undisclosed income by diverting the expense of marriage to her books of account.

f) A perusal of the preliminary statement recorded on the date of search u/s 132(4), the assessee has given explanation to each individual transaction and offered the same as income. Subsequently, the assessee has tried to club one expenditure to the other income or vice versa without any concrete evidence, thus reducing the tax liability. Thus the statement u/s 132 (4) gains more reliability as there is ample possibility of afterthought and guidance by professionals.

The assessee is in money lending business and this fact has not been disputed by the assessee. Further, some papers have also been seized during the course of search related to money lending transactions. In some of these pages, interest has been calculated, but the assessee has denied to have received any interest since he has claimed to follow cash system of accounting and such interest has not been received by him. Even the plea of the assessee is accepted for sake of the argument only in respect of those transactions (which would be discussed subsequently), then also it is to be observed that the assessee has not shown a single entry of interest in his cash book, between 01/04/2004 to 31/03/2011. It is very hard to believe that even if a person is maintaining his books of account on cash basis, will not receive any interest on loan advanced by him in seven years. This is against preponderance of probabilities and can only be assumed if assessee is involved in the field of charity.

g) On 22.09.2009 a banakhat was executed and notarized and duly signed by Shri Vicky Jayesh Shah and Shri Dilip G. Purohit as per which Rs. 14 lacs was given by the assessee to Shri Vicky Jayesh Shah in cash. However, these entries are not reflected in the Cash book made after the date of search.

h) During the course of search and post search proceedings the assessee had contended that the entire expenses of marriage of his daughter are not reflected in the books of accounts and agreed to pay tax on the same. However, during the course of assessment proceedings no disclosure is made in this regard, on the reason that the expenditure has been incurred by his wife. Further, no books of accounts pertaining to the assessee's wife was found/seized during search and no such documentary evidence was submitted during post-search proceedings to show that the marriage expenditure was incurred by the assessee's wife except for the copy of the return of income of wife.

i) With respect to certain entries in the name of Satish Maharaj, the assessee claimed that he was Satish Maharaj and the transactions belonged to him. The assessee further disclosed the principal amount but the interest amount, which is also reflected in the seized documents, has not been disclosed. No evidence has been submitted to substantiate his claim that he is also known as Satish Maharaj.

j) On Page-25 of Ann. BF-2, the assessee has shown that Rs. 15000/- was given to Omji, this transaction pertains to 17.05.2007 but he has shown it as 17.05.2008. It may be noted that the entries both above and below this transaction is dated 17.05.2007.

k) On Page 21 of Ann. BF-2, the assessee has mentioned that the amount is Rs. 75,000/- however, the actual figure is Rs. 80,000/-

l) On Page 30 of Ann BF-10, there is a letter signed by Sarpanch of Laxmanpura which acknowledges that he has received Rs. 1 lac, however, no such entry is made in the assessee's books.

m) On Page 11 of Ann. BF-10, the assessee has stated that the disclosure is of Rs. 499/- only and it is sundry expenses. However, during the post search proceedings he had admitted that the same is dalali receipts of Rs. 4,99,000/-

n) On Page 25 of Ann. BF-6, the assessee has stated the disclosure is of Rs. 16300/- whereas in several instances he has considered the figures in thousands (‘000).).).).

o) When there is shortage of fund in the cash book, the assessee has shown Disclosure amount. Therefore, the books do not portray the true picture of the financial status of the assessee. As per the disclosure made in the return, there is huge disclosure in one year which covers all the discrepancies of the subsequent years. This gives a skewed picture of the state of affairs and cannot be taken as true. Thus, it is seen that the assessee has used the system of preparing the books 12

to reduce the income declared as unaccounted in the search proceedings.

p) Even a cursory glance at the cash book shows that the same reflects distorted picture. It is seen that the assessee has available cash balance running into crores of rupees for more than 4 months. This is not believable when the assessee is engaged in the business of money lending charging interest in the range of 2% to 7% per month (as admitted by him). Thus it is unbelievable that there is availability of such huge cash with the assessee for more than 4 months. Thus the so-called books give a irrational and absurd result These facts lead the undersigned for rejection of the so called books of account.

Thus, the Assessing Officer rejected the books of account prepared on the basis of seized material.

3.2 The Assessing Officer further observed that during the course of search, cash of Rs. 14.46 crores was found and the same was not reflected in books of account as on the date of search nor the source of the same was explained. After taking into consideration of the assessee’s reply, the Assessing Officer held that the assessee has not proved through evidences the cause of balance of Rs. 14,64,000/- existed on the date of search. In fact, the assessee admitted that the cash found is unaccounted and offered the same for taxation in his statement recorded u/s. 132(4) on 09-03-

2013. This fact was reiterated in his statement u/s. 20-05- 2013/2011. Thus, the Assessing Officer made addition of Rs. 14,64,000/- for assessment year 2011-12. 3.3 The Assessing Officer in respect of construction of house at Mudatra village, Rajasthan observed that during the search loose paper files inventorized as A-1 was seized and at the business premises during survey a diary inventorized as BF-2 was impounded wherein entries in respect of cash incurred for construction of house was found. The assessee during the assessment proceedings contended that certain entries were repeated and therefore the Assessing Officer issued show cause notice as to why the amount of Rs. 27,06,080/- should not be taxed as assessee’s unaccounted investment. After taking cognizance of the assessee’s rebuttal/submissions, the Assessing Officer held that the assessee has incurred various expenditure for construction of his house and admitted that the same was unaccounted. The assessee during assessment proceedings contended that the expenditure was reflected in his books of accounts, however overall the books of account were rejected u/s. 145(1) and thus the assessee was unable to demonstrate the source of the expenditure as well as there was no evidence submitted. Hence, the addition on account of unaccounted expenditure on house construction was made on the basis of seized records, payment, expenditure. Thus addition of Rs. 2,45,326/- was shown in assessment year 2009-10, addition of Rs. 19,02,597/- was made in assessment year

2010-11 and addition of Rs. 5,58,157/- was made in assessment year 2011-12.

3.4 The Assessing Officer regarding the marriage expenses of the daughter has made addition of Rs. 10,00,000/- for assessment year 2010-11 thereby stating that during the course of search no books of account of Smt. Laxmiben Purohit was found and the marriage expenditure as stated by the assessee in his statement recorded u/s. 132(4) and u/s. 131, the same was done by the assessee’s wife. The claim of the assessee that the withdrawal of the money was made from the account of assessee’s wife was not supported by any evidences. Thus, the same has been added in assessment year 2010-11.

3.5 The Assessing Officer in respect of the impounded loose paper file BF-10 consisting of 62 pages, observed that on page no. 44, there are some entries made on 29-04-2009 pertaining to Jayesh Babulal Shah. The assessee in the statement recorded u/s. 131 stated that the entries are with regard to principal amount advanced through Jayeshbhai Babulal Shah and interest due @ 7% per month. The assessee explained the entries as follows:- ➤Rs. 96 lac principal amount as on 1.1.2009 ➤ Rs. 6,66,500/- interest receivable on 01.01.2009 ➤ Rs. 7,11,550/- interest receivable on 01.02.2009 ➤ Rs. 7,61,358/-interest receivable on 01.03.2009 ➤Rs. 8,14,653/- interest receivable on 01.04.2009

➤ Rs. 8,71,679/- interest receivable on 01.05.2009 ➤ Rs. 13 Lac further given to Jayeshbhai on 01.01.2009 (New loan given)

Rs. 7 Lac further given to Jayeshbhai on 20.02.2009 (New laon given) ➤ Interest on 13 Lac comes to Rs. 3,90,000/- for 4 months ➤ Interest on 7 Lac comes to Rs. 1,96,000/- ➤ Total due from Jayeshbhai as on 21.04.2009 is Rs. 1,59,10,240/-

The Assessing Officer held that the assessee admitted only part of the loan as given and since the books of account were rejected held that Rs. 96,00,000 should not be considered as assessee’s unaccounted capital and Rs. 64,10,240/- should be considered as unaccounted interest. The Assessing Officer further held that the loan of Rs. 75,00,000/- was taken over by Mahesh C. Shah and Rs. 25,00,000/- by Ramesh Angana was devoid of any evidence. Thus, the Assessing Officer observed that these entries related to the impounded purchase was regarding principal amount advanced to Shri Jayesh C. Shah and interest was due @ 7% per month. The Assessing Officer further held that none of the said transactions are reflected in any books of account and there is sufficient evidence to show that the entire closing balance of Rs. 1,59,10,240/- is assessee’s unaccounted capital deployed by him in money lending. The statement of Shri Jayesh C. Shah was recorded u/s. 131 of the Act wherein he stated that he had taken loans of 16

Rs. 1.17 crore which was received in cash. He further submitted that he has not paid any interest as he had not borrowed the amount on interest from assessee i.e. Dilipbhai Purohit. The Assessing Officer has given a categorical finding that this claim of assessee is proved wrong as in the seized documents rate of interest charged and the computation thereof is clearly mentioned. The assessee mortgaged the property pertaining to Jayesh Shah’s son in order to claim his dues. The substantive amount of the loan taken was repaid as the assessee’s contention that assessee has not received any interest was not accepted by the Assessing Officer. The Assessing Officer categorically gave the finding that the scan copy of one of the seized documents (mentioned in page 25 of the assessment order) gives the calculation of interest @ 7% per month. Thus, the Assessing Officer made addition of Rs. 1,41,29,908/- in assessment year 2009-10 and Rs. 18,81,832/- for assessment year 2010-11.

3.6 The Assessing Officer further observed that during the survey proceedings u/s. 133A of the Act at the office of the assessee a diary consisting of 26 pages was found which was inventorized as BF-3. In page no. 18 of the said diary, there were entries made on 01-7-2009 which represented loan given to one Shri Mahesh Chhotalal Shah who is also known as ‘M.D.’ The same was explained by the assessee that as on 01-07-2009, Rs. 75,00,000/- principal amount in cash was given to Maheshbhai on interest @ 7% per month. Upto 01-10-2010 interest of Rs. 84 lac was paid out of

which Rs. 67,00,5000/- was received back as per the explanation of the assessee. The assessee further submitted that from 01-10-2010 to 01-02-2011, interest of Rs. 29,42,400/- was to be received and Rs. 80,000/- was to be received from him for document preparation. Thus, the total due was Rs. 1,22,17,400/-. Further on the subsequent pages of the diary i.e. page no. 19 of BF-3, there were more financial transactions with Shri Mahesh Chotalal Shah was mentioned which was admitted by the assessee saying that unaccounted amount of Rs. 2,23,17,400/- in total was advanced to Maheshbhai. The said Maheshbhai borrowed a sum of Rs. 56,00,000/- ( 25,00,000 + 5,00,000 + 6,00,000 + 20,00,000) upto 05-02-2011. The same was admitted by assessee. As per other entry in said page Rs. 45,00,000/- was to be given as advance to Maheshbhai by the assessee. However, the assessee has given him an additional loan of Rs. 15,00,000/-only. After taking into account, the contentions of the assessee, the Assessing Officer held that no evidence was submitted to show that out of the total loan taken an amount of Rs. 75,00,000/- pertains to Jayesh Babulal Shah. Shri Mahesh C. Shah claims outstanding amount of Rs. 2,23,17,400/- against his claim also included a loan of Rs. 75,00,000/- given to Jayesh Shah through Govind as he was the guarantor of the loan. The Assessing Officer held that a total amount of Rs. 176 lakhs was given to Mahesh C. Shah on which interest upto 01-02-2011 is charged amounting to Rs. 113.42 lakhs. The Assessing Officer further held that the assessee’s claim as against Rs. 45,00,000/- shown as given to Shri Mahesh C. Shah only

15,00,000/- have been taken by Shri Mahesh C. Shah is not acceptable as in the seized material the amount of Rs. 45,00,000/- is clearly mentioned. The amount of loan given that of 15,00,000/- and the statement therein is without any basis or documentary evidence. With regard to non- receipt of interest, the assessee’s claim was also rejected. Since the assessee is engaged in the business of money lending has taken sufficient pre-caution to ensure that he receives his interest on time. Thus, the Assessing Officer made addition on account of principal amount advanced to the extent of Rs. 75,00,000/- in assessment year 2010-11 and Rs. 1,01,00,000/- for assessment year 2011-12. Thus, totaling to addition of Rs. 1,76,00,000/-. The Assessing Officer further made addition on account of interest received/receivable to the extent of Rs. 31,50,000/- for assessment year 2010-11 and Rs. 81,92,000/- for assessment year 2011-12.

3.6 However, the Assessing Officer observed that on perusal of the impounded materials BF-2, BF-6 and BF-10 had reflected transactions made with R. Angana and the cash given on various dates to Rameshbhai Shah totaling to Rs. 25,0000/- and also an amount received back from him on various dates totaling to Rs. 34,000/- (Annexure BF-2 page no. 16). As regards Annexure BF-6, page no. 26, the Assessing Officer observed that on various dates from 29- 10-2009 to 09-08-2010 Shri Rameshbhai Shah deposited an amount totaling to Rs. 20,00,000/- and this amount was given on behalf of Jayesh Babulal Shah and interest at 7%

commenced from 01-05-2009 as stated by the assessee. Relating to Annexure BF-10, page 146 contained with transactions Rameshbhai Angna and it showed calculation of interest of Rs. 13,44,000/- of Rs. 20,00,000/- due from Rameshbhai Shah. Annexure BF-10 page no. 13 reflected calculation of component interest of Rs. 26,99,443/- on Rs. 20,00,000/- due form Rameshbhai Shah. The Assessing Officer observed that the assessee made total advance of Rs. 20,00,000/- as revealed from entries in page 16 of BF-16 and page 26 of BF-6 and charged total interest of Rs. 27,08,443/- as revealed from entries made in pages 13 of BF-10 and page 16 of BF2. The initial loan of Rs. 20,00,000/- advances to Shri Jayesh Babulal Shah was not supported by any documentary evidence. After taking into cognizance of the assessee’s submissions, the Assessing Officer observed that these entries revealed that the assessee has given loan of Rs. 20,00,000/- to Shri Ramesh Angana and it never mentioned that Rs. 20,00,000/- is part of the loan given to Jayesh Babulal Shah. This loan of Rs. 20,00,000/- was given on 01-05-2009 whereas the last transaction with Shri Jayesh Babulal Shah took place in April, 2009. Thus, the Assessing Officer held that the there is interlinking between these transactions and thus addition of Rs. 25,000/- was made in assessment year 2009-10 and 13,00,000/- in assessment year 2010-11. Further, the Assessing Officer made addition of Rs. 7,00,000/- for assessment year 2011-12. On account of interest, the Assessing Officer made addition of Rs. 19,06,000/- for assessment year 2010-11 and Rs. 8,02,443/- for

assessment year 2011-12. As per para 9.7 the Assessing Officer has made addition of Rs. 42,08,250/- for the other advances given to interest therein in respect of amount appearing on the pages which was mentioned in tabular form at page 41-42 of the assessment year and treated the same as advanced by the assessee which were not recorded in assessee’s books of account. In fact, certain entries were repeated and amount of Rs. 92,500/- has been taken into consideration by the Assessing Officer therefore balance of Rs. 42,08,250/- was added thereby giving the following treatment in the respective assessment year at page 44 which is as follows:- (i) For A.Y.2006-07 Rs. 4,00,000/- (ii) For A.Y.2007-08 Rs. 50,000/- (iii) For A.Υ.2008-09 Rs. 6,18,130/- (iv) For A.Y.2009-10 Rs. 2,07,500/- (v) For A.Y.2010-11 Rs. 7,80,250/- (vi) For A.Y.2011-12 Rs. 21,52,371/- ------------------- Rs. 42,08,251/-

The Assessing Officer related to page 23 of impounded diary inventorised as BF-2 has observed that the page contains details of payments made to Shri Umeshbhai for purchase of land. The said payments aggregated to Rs. 7,00,025/- and the same was admitted by the assessee that the amounts mentioned was paid by the assessee in cash for purchase of a land at Ogan Village. This amount was paid on behalf of Umeshbhai, however the banakhat was in

assessee’s name. Since, there was no evidence that this land/payment was made by the said Shri Umeshbhai. The Assessing Officer made addition of Rs. 7,00,025/- as unaccounted and made addition to that extent. The addition was bifurcated in the relevant assessment year as follows:- Addition:

(i) For A.Y.2008-09 Rs. 3,27,000/- (ii) For A.Y.2009-10 Rs. 2,48,025/- (iii) For A.Y.2011-12 Rs. 1,25,000/- ------------ Rs. 7,00,025/- ------------ During the course of survey at assessee’s business premises a diary which was impounded and inventorised as BF-6 consisting of 29 pages. On page 8, there was details with regard to purchase of shares of two companies namely; Koutons and Gokul. The assessee submitted before the Assessing Officer that the shares of these two companies were purchased in A.Y. 2008-09 and sold in the year 2009- 10. As per the entries in the said page, an investment of Rs. 12,27,939/- and Rs. 5,01,659/- was made in the shares of Koutons and Gokul respectively. The assessee submitted the details and after going through the details and the reply, the Assessing Officer held that there has been cash deposits prior to issuance of cheques for payment being made for purchase of shares and it is evident that the source of investment in shares is not explained and thus it was

unaccounted investment. The Assessing Officer made addition of Rs. 17,29,593/- for assessment year 2011-12 on account of investment in Kouton and Gokul. shares. The Assessing Officer also made addition on account of investment in other shares of assessment year 2009-10 to the extent of Rs. 15,02,729/- and Rs. 7,76,697/- for assessment year 2010-11.

3.7 In respect of BF-6 page no. 25 the assessee accepted @ Rs. 16,3,00/- in respect of BF-10 page 11, the assessee accepted only Rs. 499/- stating that the same sundry expenses and in respect of page 31, the assessee stated that the since the transaction did not materialize, no amount has been received by the assessee. The dalali which was received by the assessee was taken into account as per the seized materials and the Assessing Officer made addition of Rs. 4,48,845/- for assessment year 2008-09, Rs. 94,570/- for assessment year 2009-10 and Rs. 1,90,311/- for assessment year 2010-11 and Rs. 11,11,300/- for assessment year 2011-12. Thus, the total addition of Rs. 18,35,026/- was made by the Assessing Officer towards unaccounted dalali income. The Assessing Officer held that towards this addition that it is a stamp receipt and cash receipt by the land owners which is an acknowledgment related to the transaction which took place on 01-10-2010 and since as per the seized document an amount of Rs. 3,30,000/- was received by the assessee. The addition of Rs. 18,35,026/- was made as unaccounted dalali. The Assessing Officer also made addition of Rs. 9,26,543/-

towards purchase of Honda City car in the hands of the assessee as the loan taken was also not recorded in the books of accounts as on the date of search even though the same was purchased in April, 2010.

3.8 The Assessing Officer in respect of page 1-8 of the diary inventorized BF-4 has observed that the details of expenses incurred since 2004-05 towards property purchase in Vinzol land which was recorded in the assessee’s books has been noted in the said diary. The assessee filed reply and after taking consideration of the same the Assessing Officer held that the since books were rejected and these transactions pertained to a period for more than 6-7 years. The part of purchase consideration was paid in cash by the assessee and hence the entire transaction was carried in cash. Thus, the addition was made to the extent of Rs. 12,79,890/- in total bifurcating it as Rs. 4,28,530/- for assessment year 2005-06, Rs. 6,85,910/- for assessment year 2006-07, Rs. 18,250/- for assessment year 2007-08 and Rs. 1,47,200/- for assessment year 2008-09.

3.9 In respect of search proceedings at the assessee’s residence, loose paper files inventorized A-3 was seized and in page nos.100-105, there is a copy of banachitthi dated 07-08-2010 pertaining to sale of land at various survey nos. of Laxmanpur village Kadi Taluka. As per the banachitthi the land admeasuring approximately 100 bighas was sold, name of the seller was mentioned as Dilipbhai G. Purohit

and the buyer is Shri Virambhai Bhagwanbhai Desai. The price of the land was fixed at Rs. 10,51,000/- per bigha and Rs. 2,25,00,000/- was paid by the parties mentioned as on the date of banachitthi. Further installment was drawn to the banachitthi as per which Rs. 3 crore was to be paid by 15-09-2010, Rs. 2.66 cores was to be paid on 15-11-2010 and Rs. 2.66 crore was to be paid by 15-01-2011. The Assessing Officer observed that after making inquiries with the Mamlatdar Kadi during the year under reference, there has been change in the owner of the property and thus considering the fact that out of total 25 survey nos. only 9 transactions have taken place, the assessee was asked as to why cash received of Rs. 2.25 crores should not be considered as assessee’s unaccounted receipt. After considering assessee’s reply, the Assessing Officer held that out of total 25 survey nos., 30 transactions taken place and the details were given in page 62-62 para 9.13 of the assessment order. In fact the return signed by Sarpanch of Laxmanpura engages that the said Sarpanch Rs. 1,00,000/- towards facilitating purchases in respect of various land at Laxmanpur. As per the doctrine, the assessee is precluded from claiming the benefit for want of ownership once he has signed as a seller in a document and after catching upon by receiving amount of Rs. 2.25 crores. The Assessing Officer held that the assessee did receive cash and his statement that he did not receive cash is not acceptable. Hence A.O. made addition of Rs. 2.25 crores in assessment year 2011- 12 and further Rs. 1,00,000/- for assessment year 2011-12 towards the unaccounted expenditure of the assessee.

3.10 As relates to annexure A-5 page 1-35, the assessee executed various banakhat with Vicky Jayesh Shah and the same was executed on 22-02-2009. Based on this banakhat general power of the attorney was given to the assessee and Rs. 14,00,000/- was given to Vicky Jayesh Shah in cash. Subsequently, this agreement was cancelled on 10-11-2010 which mentioned that cash of Rs. 14,00,000/- was received back. However, these entries were not reflected in the cash book made after the date of search. After taking cognizance of the assessee’s reply, the Assessing Officer made addition of Rs. 14,00,000/- for assessment year 2010-11.

6. The ld. A.R. relied upon the order of the CIT(A).

return of income that cannot be the sole criteria for rejecting books of accounts. In the regular books of account transaction, the same should have been taken into account and the books prepared by the assessee cannot be categorically be stated as double entry. Thus, the Assessing Officer at no point of time submitted the actual reason for rejecting the books of accounts. Thus, ground no. 1 of Revenue’s appeal is dismissed.

9. We have heard both the parties and perused all the relevant material available on record. The CIT(A) has given a detailed finding in para 19.3 thereby categorically mentioning each and every entry in respect of the seized documents and after taking due diligence of the seized documents has given the brief reasons for decision on page 71 of the order. There is a difference between what entry was passed in the books of accounts and what is represented by the seized document and therefore the CIT(A) has rightly granted assessee the relief of Rs. 31,61,350/- thereby in assessment year 2011-12 has granted benefit of Rs. 15,00,000/-. There is no need to interfere with the finding of the CIT(A). Hence, ground no. 2 of Revenue’s appeal is dismissed.

7,25,000/- but as such both the amounts pertains to assessment year 2008-09. Umeshbhai also filed an affidavit dated 20-06-2011 in which payment of land was confirmed and necessary entries were passed in the books of the assessee which were prepared after the date of search showing receipt. The amount is repaid in assessment year 2008-09 and assessment year 2009-10 which appears on page 66 in para 16.3 of the CIT(A) orders.

through Mahesh Shah. The ld. D.R. relied upon the assessment order wherein it was categorically mentioned that no evidence was submitted to show out of total loan taken, the amounts of Rs. 75,00,000 pertains to Shri Jayesh Shah. The reply of the assessee that the books of accounts are prepared on cash basis and no interest was received by the assessee was not considered. Even, the statement given by Mahesh Chhotalal u/s. 131 and Jayesh Shah was considered. The ld. A.R. submitted that the CIT(A) has considered seized documents of Mahesh Chhotalal and after considering the same (BF-3 page 19 and 24)) and also another loan given to Mahesh Chhotalal after 05-02-2011. Thus after considering all the evidences retained the addition to the extent of Rs. 10,00,000/- and gave relief to Rs. 91,00,000/-

5,55,560/- on account of dalali income. The ld. D.R. submitted that the Assessing Officer considered the dalali income of Rs. 16,300/- which was already disclosed in the assessment year 2010-11, Rs. 499/- is the amount of expenditure which is debited in sundry expenditure and the same is taken as income of Rs. 4,99,000/-. Inquiry of the property could not be materialize and thus an addition of Rs. 11,11,300/- was made. The ld. A.R. relied upon the order of the CIT(A) and submitted that income was added on adhoc basis which is not permitted in block assessment.

relied upon the assessment order and submitted that during the search u/s. 151 on 09-13-2013, this amount was admitted as undisclosed income and no books of accounts were produced during search or post search proceedings. Therefore, the contention of the ld. A.R./assessee that it amounts to double taxation of income was not considered. The ld. A.R. submitted that in the statement recorded after search on 16-03-2011 and 20-05-2011 before the DDIT, the assessee stated that the books of account on the basis of seized material will be prepared from assessment year 200- 06-07 and undisclosed income will be disclosed u/s. 153A for various years. The amount found appeared in the books of account prepared after search and therefore the CIT(A) has rightly deleted the addition on the basis of double taxation.

18. As relates to ground no. 7, the ld. D.R. submitted that the CIT(A) was not right in deleting the addition of Rs. 81,92,000/- on account of interest received or receivable. The ld. D.R. submitted that there was no evidence to link the loan taken by Jayesh Shah has been taken over by the Shri Mahesh Shah. Thus, the addition of principal amount and interest was made in assessment year 2010-11 and 2011-12 by the Assessing Officer. The ld. D.R. submitted that the addition of interest receivable is deleted considering the cash system by the CIT(A) and in fact the CIT(A) has given the detailed finding to that extent.

There is no need to interfere with the same. Thus, ground no. 7 is dismissed.

D.R. submitted that statement recorded u/s. 131 on 20-05- 2011 that of Virambhai and the affidavit filed by him was not properly giving explanation recording these unaccounted receipts. In the signature on the revenue stamp in person two witnesses, the same was doubted by the Assessing Officer. As per the provisions of section 292C when the document was found from the premises of assessee, it is presumed that the said document belongs to the assessee. The ld. A.R. submitted that the details of the land have been given by the Assessing Officer during the course of discussion of the addition and the banachitthi evidence and agreement for sale executed by the assessee with one Virambhai. As per the annexure to this banachitthi showing roughly 29 survey no and total 100 bighas as subject matter to this banachitthi and from the perusal of this, the appellant has received Rs. 2.25 crore in cash and Rs. 10.51 lacs per bigha. The content of these documents reveals that the document executed between the assessee and Virambhai was only that of negotiations and the same was never materialize and in fact the assessee was not the owner of the said land in question. It is accepted that the assessee received Rs. 2.25 crore towards sale of property mentioned in banachitthi. At the end, the ld. A.R. submitted that there was conclusive and corroborative evidence as stated in the very seized documents. Thus, ld. A.R. relied upon the finding of the CIT(A).

that the CIT(A) on page 61 of the order of the CIT(A) has categorically mentioned that the assessee has accepted the payment as received Rs. 2.25 crore but that was an argument so and in fact the details related to the finding has been given by the CIT(A) on page 63 wherein it is clearly stated that this banachitthi has not been the instrument of transfer of any right in the immoveable property or receipt of money of Rs. 2.25 crore. The Assessing Officer in fact has not shown any linkage that the assessee received Rs. 2.25 crore from the said land from the other seized documents and there was no co-relation. There was no evident inquiry conducted either from Virambhai or from the purchaser of the land or from the owner farmer of the land by the Assessing Officer. Thus, the CIT(A) has rightly deleted this addition. Hence ground no. 9 is dismissed.

25. We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the CIT(A) has rightly given the finding that the Sarpanch was called by the Assessing Officer and his explanation was also considered and after considering explanation and the document furnished with regard to Laxmanpura land of Rs. 2.25 crore and Rs. 1,00,000/- expenditure, the CIT(A) has rightly deleted this addition and there is no need to interfere with the findings of the CIT(A). Hence, ground no. 10 is dismissed.

Whatever cash thus introduced which would subsequently explain the transactions/investments reflected through seized records, was the basis of disclosing the unaccounted income through returns u/s. 153A. In short, the unaccounted portion of transactions/assets was claimed to be explained by the books of account read in conjunction with the return of income filed u/s. 153A. Thus, the assessee has shown only 30% of income disclosed u/s. 132(4). The Assessing Officer rejected the books u/s. 145 thereby holding that the books of accounts does not have any evidentiary value and therefore proceed to confront the assessee with each transaction/investment/receipt/possession of assets and decides whether they represent unaccounted receipts/investments. The Assessing Officer observed that the assessee derives income by way of commission i.e. the dalali as broker in real estate and income from other sources. The Assessing Officer made addition of Rs. 1,47,200/- on account of investment and expanses incurred on the Vinzol land in cash. As regards loans and advances to Jayesh and Mahesh Shah, the Assessing Officer has also made addition to that effect.

the same to that of IT(SS)A 75/Ahd/2016. Hence, this appeal is also dismissed.

assessment year 2011-12 concerned has been challenged. The CIT(A) has ignored the fact that this has been already calculated and added in the assessment year 2010-11 and therefore cannot be again confirmed in assessment year 2011-12. Thus, ground no. 2.1 and 2.2 for assessment year 2011-12 are partly allowed.

37. In the result, all the appeals filed by the Revenue as well as by the assessee are dismissed.

Order pronounced in the open court on 18-12-2025

Sd/- Sd/- (Dr. BRR Kumar) (Suchitra Kamble) Vice President Judicial Member Ahmedabad : Dated 18/12/2025 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से,

उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद